Labor Law Case Index on Jurisdiction, Remedies and Employer-Employee Relationship

I
LABOR RELATIONS
Atty. R. Mercader
Case Index
NB: This index is a compilation directly lifted from cases and case digests. Quality of the content is assured, but nonetheless,
use with discretion. Hope this helps :)
I. JURISDICTION AND REMEDIES

A. Existence of Employer-Employee Relationship

1. Javier v. Fly Ace Corporation G.R. NO. 192558 February 15, 2012
No particular form of evidence is required to prove the existence of such employer-employee relationship. Any
competent and relevant evidence to prove the relationship may be admitted. The rule of thumb remains: the onus
probandi falls on petitioner to establish or substantiate such claim by the requisite quantum of evidence. Whoever
claims entitlement to the benefits provided by law should establish his or her right thereto x x x.
2. Southeast International Rattan, Inc v. Coming G.R. NO. 126297 February 11, 2008
To ascertain the existence of an employer-employee relationship jurisprudence has invariably adhered to the
four-fold test, to wit:
(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."
In resolving the issue of whether such relationship exists in a given case, substantial evidence – that amount of
relevant evidence which a reasonable mind might accept as adequate to justify a conclusion – is sufficient.
Although no particular form of evidence is required to prove the existence of the relationship, and any competent
and relevant evidence to prove the relationship may be admitted, a finding that the relationship exists must
nonetheless rest on substantial evidence.
3. Tenazas v. R. Villegas Taxi Transportation GR NO. 192998 April 2, 2014

There is no hard and fast rule designed to establish the aforesaid elements. Any competent and relevant evidence
to prove the relationship may be admitted. Identification cards, cash vouchers, social security registration,
appointment letters or employment contracts, payrolls, organization charts, and personnel lists, serve as evidence
of employee status. "[T]he burden of proof rests upon the party who asserts the affirmative of an issue."
4. Sagun v. ANZ Global GR NO. 220399 August 22, 2016

An employment contract, like any other contract, is perfected at the moment the parties come to agree upon its
terms and conditions, and thereafter, concur in the essential elements thereof. In this relation, the contracting
parties may establish such stipulations, clauses, terms, and conditions as they may deem convenient, provided
they are not contrary to law, morals, good customs, public order or public policy.
Accordingly, petitioner's employment with ANZ depended on the outcome of his background check, which
partakes of the nature of a suspensive condition, and hence, renders the obligation of the would-be employer, i.e.,
ANZ in this case, conditional. While a contract may be perfected in the manner of operation described above, the
efficacy of the obligations created thereby may be held in suspense pending the fulfillment of particular conditions
agreed upon. In other words, a perfected contract may exist, although the obligations arising therefrom if
premised upon a suspensive condition would yet to be put into effect. Thus, until and unless petitioner complied
Labor Law 2 (Labor Relations) | Atty. Mercader Case Index A.Y. 2019-2020 ib3g
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with the satisfactory background check, there exists no obligation on the part of ANZ to recognize and fully accord
him the rights under the employment contract.
5. LVN Pictures v. Philippine Musicians Guild 110 Phil. 725 January 28, 1961
To determine whether a person who performs work for another is the latter's employee or an independent
contractor, the National Labor Relations relies on 'the right to control' test. Under this control test, an
employer-employee relationship exist where the person for whom the services are performed reserves the right to
control not only the end to be achieved, but also the manner and means to be used in reaching the end (United
Insurance Company, 108, NLRB No. 115). Notwithstanding that the employees are called independent
contractors', the Board will hold them to be employees under the Act where the extent of the employer's control
over them indicates that the relationship is in reality one of employment.
6. Paguio Transport, Corp. v. NLRC GR NO. 119500 August 28, 1998

Boundary system is that of employer-employee and not of lessor-lessee. Under the “boundary system” the drivers
do not receive fixed wages; all the excess in the amount of boundary was considered his income but it is not
sufficient to withdraw the relationship between them from that of employer and employee. In the lease of
chattels[,] the lessor loses complete control over the chattel leased . . . . In the case of jeepney owners/operators
and jeepney drivers, the former exercise supervision and control over the latter.
7. Teng v. Pahagac GR NO. 169704 November 17, 2010

As a policy, the Labor Code prohibits labor-only contracting:
Art. 106. Contractor or Subcontractor
xxx
There is "labor-only" contracting where the person supplying workers to an employer does not have substantial capital or investment
in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such persons
are performing activities which are directly related to the principal business of such employer.
Section 5 of the DO No. 18-02,[46] which implements Article 106 of the Labor Code, provides:
Section 5. Prohibition against labor-only contracting. - Labor-only contracting is hereby declared prohibited. For this purpose,
labor-only contracting shall refer to an arrangement where the contractor or subcontractor merely recruits, supplies or places
workers to perform a job, work or service for a principal, and any of the following elements are present:
(i) The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service
to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing
activities which are directly related to the main business of the principal; or
(ii) The contractor does not exercise the right to control over the performance of the work of the contractual employee.
A finding that the maestros are labor-only contractors is equivalent to a finding that an employer-employee
relationship exists between Teng and the respondent workers. As regular employees, the respondent workers are
entitled to all the benefits and rights appurtenant to regular employment.
8. Dy Keh Beng v. International Labor and Marine Union of the Philippines GR NO. L-32245 May 25,
1979
An employer-employee relationship exists, using the control test, exists “where the person for whom the services
are performed reserves a right to control not only the end to be achieved but also the means to be used in
reaching such end.” It should be borne in mind that the control test calls merely for the existence of the right to
control the manner of doing the work, not the actual exercise of the right.
“Circumstances must be construed to determine indeed if payment by the piece is just a method of compensation
and does not define the essence of the relation. x x x and units of work are in establishments like respondent (sic)
just yardsticks whereby to determine rate of compensation, to be applied whenever agreed upon. We cannot
construe payment by the piece where work is done in such an establishment as to put the worker completely at
liberality to turn him out and take in another at pleasure.” Lastly, the court noted the judicial notice in previous
case of ‘pakyaw’ system as generally practiced in our country, is, in fact, a labor contract between employers and
employees, between capitalists, and laborers.
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9. Insular Life Assurance Company v. NLRC and Basiao GR NO. 84484 November 15, 1989
It should x x x be obvious that not every form of control that the hiring party reserves to himself over the conduct
of the party hired in relation to the services rendered may be accorded the effect of establishing an
employer-employee relationship between them in the legal or technical sense of the term.
Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the
mutually desired result without dictating the means or methods to be employed in attaining it, and those that
control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim
only to promote the result, create no employer-employee relationship unlike the second, which address both the
result and the means used to achieve it.
The distinction acquires particular relevance in the case of an enterprise affected with public interest, as is the
business of insurance, and is on that account subject to regulation by the State with respect, not only to the
relations between insurer and insured but also to the internal affairs of the insurance company. Rules and
regulations governing the conduct of the business are provided for in the Insurance Code and enforced by the
Insurance Commissioner. It is, therefore, usual and expected for an insurance company to promulgate a set of
rules to guide its commission agents in selling its policies that they may not run afoul of the law and what it
requires or prohibits. None of these really invades the agent’s contractual prerogative to adopt his own selling
methods or to sell insurance at his own time and convenience, hence cannot justifiably be said to establish an
employer-employee relationship between him and the company.
10. Tongko v. Manulife GR NO. 167622 November 7, 2009

If the specific rules and regulations that are enforced against insurance agents or managers are such that would
directly affect the mean and methods by which such agents or managers would achieve the objectives set by the
insurance company, they are employees of the insurance company.
NB: Motion for Reconsideration (June 29, 2010)

The business of insurance is a highly regulated commercial activity in the country, in terms particularly of who can
be in the insurance business, who can act for and in behalf of an insurer, and how these parties shall conduct
themselves in the insurance business. Thus, under the Insurance Code, the agent must, as a matter of
qualification, be licensed and must also act within the parameters of the authority granted under the license and
under the contract with the principal. Rules regarding the desired results (e.g., the required volume to continue to
qualify as a company agent, rules to check on the parameters on the authority given to the agent, and rules to
ensure that industry, legal and ethical rules are followed) are built-in elements of control specific to an insurance
agency and should not and cannot be read as elements of control that attend an employment relationship
governed by the Labor Code.
The employer controls the employee both in the results and in the means and manner of achieving this result.
The principal in an agency relationship, on the other hand, also has the prerogative to exercise control over the
agent in undertaking the assigned task based on the parameters outlined in the pertinent laws. With particular
relevance to the present case is the provision that "In the execution of the agency, the agent shall act in
accordance with the instructions of the principal." This provision is pertinent for purposes of the necessary control
that the principal exercises over the agent in undertaking the assigned task, and is an area where the instructions
can intrude into the labor law concept of control so that minute consideration of the facts is necessary. The
provisions of the Insurance Code cannot be disregarded as this Code expressly envisions a principal-agent
relationship between the insurance company and the insurance agent in the sale of insurance to the public. For
this reason, we can take judicial notice that as a matter of Insurance Code-based business practice, an agency
relationship prevails in the insurance industry for the purpose of selling insurance.
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NB: Motion for Reconsideration (January 25, 2011)
The Insurance Code provides definite parameters in the way an agent negotiates for the sale of the company’s
insurance products, his collection activities and his delivery of the insurance contract or policy. All these, read
without any clear understanding of fine legal distinctions, appear to speak of control by the insurance company
over its agents. They are, however, controls aimed only at specific results in undertaking an insurance agency,
and are, in fact, parameters set by law in defining an insurance agency and the attendant duties and
responsibilities an insurance agent must observe and undertake. They do not reach the level of control into the
means and manner of doing an assigned task that invariably characterizes an employment relationship as defined
by labor law.
To reiterate, guidelines indicative of labor law "control" do not merely relate to the mutually desirable result
intended by the contractual relationship; they must have the nature of dictating the means and methods to be
employed in attaining the result. Manulife’s codes of conduct, likewise, do not necessarily intrude into the
insurance agents’ means and manner of conducting their sales.
11. AFP Mutual Benefit Association v. NLRC GR NO. 102199 January 28, 1997
The significant factor in determining the relationship of the parties is the presence or absence of supervisory
authority to control the method and the details of performance of the service being rendered, and the degree to
which the principal may intervene to exercise such control. The presence of such power of control is indicative of
an employment relationship, while absence thereof is indicative of independent contractorship. In other words, the
test to determine the existence of independent contractorship is whether one claiming to be an independent
contractor has contracted to do the work according to his own methods and without being subject to the control of
the employer except only as to the result of the work.
The jurisdiction of labor arbiters and respondent Commission is set forth in Article 217 of the Labor Code. The
unifying element running through paragraphs (1) - (6) of said provision is the consistent reference to cases or
disputes arising out of or in connection with an employer-employee relationship. Without this critical element of
employment relationship, the labor arbiter and respondent Commission can never acquire jurisdiction over a
dispute. It was serious error on the part of the labor arbiter to have assumed jurisdiction and adjudicated the
claim.
12. Encyclopaedia Brittanica v. NLRC GR NO. 87098 November 4, 1996

It should be noted that in petitioner’s business of selling encyclopedias and books, the marketing of these
products was done through dealership agreements. The sales operations were primarily conducted by
independent authorized agents who did not receive regular compensations but only commissions based on the
sales of the products. These independent agents hired their own sales representatives, financed their own office
expenses, and maintained their own staff. Thus, there was a need for the petitioner to issue memoranda to
private respondent so that the latter would be apprised of the company policies and procedures. Nevertheless,
agents were free to conduct and promote their sales operations. The periodic reports to the petitioner by the
agents were but necessary to update the company of the latter’s performance and business income.
Control of employee’s conduct is commonly regarded as the most crucial and determinative indicator of the
presence or absence of an employer-employee relationship. Under this, an employer-employee relationship exists
where the person for whom the services are performed reserves the right to control not only the end to be
achieved, but also the manner and means to be used in reaching that end. The fact that petitioner issued
memoranda to private respondent and to other division sales managers did not prove that petitioner had actual
control over them. The different memoranda were merely guidelines on company policies which the sales
managers follow and impose on their respective agents.
"[T]he element of control is absent; where a person who works for another does so more or less at his own
pleasure and is not subject to definite hours or conditions of work, and in turn is compensated according to the
result of his efforts and not the amount thereof, we should not find that the relationship of employer and employee
exists.”
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13. HSY Marketing v. Villastique GR NO. 219569 August 17, 2016
The Court had already exposed the practice of setting up "distributors" or "dealers" which are, in reality, dummy
companies that allow the mother company to avoid employer-employee relations and, consequently, shield the
latter from liability from employee claims in case of illegal dismissal, closure, unfair labor practices, and the like.
For failure to present evidence to rebut the allegation that the respondent is indeed an employee of the petitioner,
it cannot be allowed to evade liability as the employer of respondent. The Court has already held that company
drivers who are under the control and supervision of management officers — like respondent herein — are regular
employees entitled to benefits including service incentive leave pay.
14. Coca-Cola Bottlers Phils., Inc. v. Climaco GR NO. 146881 February 5, 2007
The Court, in determining the existence of an employer-employee relationship, has invariably adhered to the
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," considered to be
the most important element.
The Comprehensive Medical Plan which contains the respondent‘s objectives, duties and obligations, does not tell
respondent “how to conduct his physical examination, how to immunize, or how to diagnose and treat his patients,
employees of petitioner company, in each case.” It provided guidelines merely to ensure that the end result was
achieved, but did not control the means and methods by which respondent performed his assigned tasks.
15. Corporal v. NLRC GR NO. 129315 October 2, 2000

An independent contractor is one who undertakes "job contracting", i.e., a person who (a) carries on an
independent business and undertakes the contract work on his own account under his own responsibility
according to his own manner and method, free from the control and direction of his employer or principal in all
matters connected with the performance of the work except as to the results thereof, and (b) has substantial
capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are
necessary in the conduct of the business.
In determining the employer-employee relationship using the control test, the power to control refers to the
existence of the power and not necessarily to the actual exercise thereof, nor is it essential for the employer to
actually supervise the performance of duties of the employee. It is enough that the employer has the right to wield
that power.
16. Maraguinot v. NLRC GR NO. 120969 January 22, 1998

A work pool may exist although the workers in the pool do not receive salaries and are free to seek other
employment during temporary breaks in the business, provided that the worker shall be available when called to
report for a project. Although primarily applicable to regular seasonal workers, this set-up can likewise be applied
to project workers insofar as the effect of temporary cessation of work is concerned. This is beneficial to both the
employer and employee for it prevents the unjust situation of "coddling labor at the expense of capital" and at the
same time enables the workers to attain the status of regular employees.
Once a project or work pool employee has been: (1) continuously, as opposed to intermittently, re-hired by the
same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable
to the usual business or trade of the employer, then the employee must be deemed a regular employee, pursuant
to Article 280 of the Labor Code and jurisprudence.
19. Calamba Medical Center v. NLRC GR NO. 176484 November 25, 2008
Under the "control test," an employment relationship exists between a physician and a hospital if the hospital
controls both the means and the details of the process by which the physician is to accomplish his task. Where a
person who works for another does so more or less at his own pleasure and is not subject to definite hours or
conditions of work, and is compensated according to the result of his efforts and not the amount thereof, the
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element of control is absent. For control test to apply, it is not essential for the employer to actually supervise the
performance of duties of the employee, it being enough that it has the right to wield the power.
Under Section 15, Rule X of Book III of the Implementing Rules of the Labor Code, an employer-employee
relationship exists between the resident physicians and the training hospitals, unless there is a training agreement
between them, and the training program is duly accredited or approved by the appropriate government agency.
18. Jardin v. NLRC GR NO. 119268 February 23, 2000

In a number of cases decided by this Court, we ruled that the relationship between jeepney owners/operators on
one hand and jeepney drivers on the other under the boundary system is that of employer-employee and not of
lessor-lessee. In the lease of chattels, the lessor loses complete control over the chattel leased although the
lessee cannot be reckless in the use thereof, otherwise he would be responsible for the damages to the lessor. In
the case of jeepney owners/operators and jeepney drivers, the former exercise supervision and control over the
latter. The management of the business is in the owner’s hands. The owner as holder of the certificate of public
convenience must see to it that the driver follows the route prescribed by the franchising authority and the rules
promulgated as regards its operation.
The fact that the drivers do not receive fixed wages but get only that in excess of the so-called "boundary" they
pay to the owner/operator is not sufficient to withdraw the relationship between them from that of employer and
employee. The Court have applied by analogy the abovestated doctrine to the relationships between bus
owner/operator and bus conductor, auto-calesa owner/operator and driver, and recently between taxi
owners/operators and taxi drivers. Here, petitioner are considered employees of the private respondent as taxi
drivers perform activities which are usually necessary or desirable in the usual business or trade of their
employer.
19. Sonza v. ABSCBN GR NO. 138051 June 10, 2004

The control test is the most important test our courts apply in distinguishing an employee from an independent
contractor. This test is based on the extent of control the hirer exercises over a worker. The greater the
supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse
holds true as well – the less control the hirer exercises, the more likely the worker is considered an independent
contractor. Independent contractors often present themselves to possess unique skills, expertise or talent to
distinguish them from ordinary employees. The specific selection and hiring of SONZA, because of his unique
skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not
conclusive, of an independent contractual relationship.
Applying the control test to the present case, we find that SONZA is not an employee but an independent
contractor. This test is based on the extent of control the hirer exercises over a worker. The greater the
supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse
holds true as well the less control the hirer exercises, the more likely the worker is considered an independent
contractor
The right of labor to security of tenure as guaranteed in the Constitution arises only if there is an
employer-employee relationship under labor laws. Not every performance of services for a fee creates an
employer-employee relationship. To hold that every person who renders services to another for a fee is an
employee - to give meaning to the security of tenure clause - will lead to absurd results. An individual like an artist
or talent has a right to render his services without any one controlling the means and methods by which he
performs his art or craft. This Court will not interpret the right of labor to security of tenure to compel artists and
talents to render their services only as employees. If radio and television program hosts can render their services
only as employees, the station owners and managers can dictate to the radio and television hosts what they say
in their shows. This is not conducive to freedom of the press.
20. Begino v. ABSCBN GR NO. 199166 April 20, 2015
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Notwithstanding the nomenclature of their Talent Contracts and/or Project Assignment Forms and the terms and
condition embodied therein, petitioners are regular employees of ABS-CBN because they perform functions
necessary and essential to ABS-CBN’s business. Respondents’ repeated hiring of petitioners for its long-running
news program positively indicates that the latter were ABS-CBN’s regular employees. Exclusivity Clause and
Prohibitions in talent contracts are indicative of control by the employer if it does not concern well-known
television and radio personality who can legitimately be considered as talent and compensated as such.
21. Orozco v. CA GR NO. 155207 August 13, 2008

The newspaper’s power to approve or reject publication of any specific article she wrote for her column cannot be
the control contemplated in the "control test," as it is but logical that one who commissions another to do a piece
of work should have the right to accept or reject the product. The important factor to consider in the "control test"
is still the element of control over how the work itself is done, not just the end result thereof. Where a person who
works for another performs his job more or less at his own pleasure, in the manner he sees fit, not subject to
definite hours or conditions of work, and is compensated according to the result of his efforts and not the amount
thereof, no employer-employee relationship exists.
22. TAPE, Inc. v. Servana GR NO. 167648 January 28, 2008

Jurisprudence is abound with cases that recite the factors to be considered in determining the existence of
employer-employee relationship, namely: (a) the selection and engagement of the employee; (b) the payment of
wages; (c) the power of dismissal; and (d) the employer's power to control the employee with respect to the
means and method by which the work is to be accomplished.
Aside from possessing substantial capital or investment, a legitimate job contractor or subcontractor carries on a
distinct and independent business and undertakes to perform the job, work or service on its own account and
under its own responsibility according to its own manner and method, and free from the control and direction of
the principal in all matters connected with the performance of the work except as to the results thereof. TAPE
failed to establish that respondent is an independent contractor.
In classifying independent contractors, Policy Instruction No. 40 defines program employees as—
x x x those whose skills, talents or services are engaged by the station for a particular or specific program or
undertaking and who are not required to observe normal working hours such that on some days they work for less
than eight (8) hours and on other days beyond the normal work hours observed by station employees and are
allowed to enter into employment contracts with other persons, stations, advertising agencies or sponsoring
companies. The engagement of program employees, including those hired by advertising or sponsoring companies,
shall be under a written contract specifying, among other things, the nature of the work to be performed, rates of pay
and the programs in which they will work. The contract shall be duly registered by the station with the Broadcast
Media Council within three (3) days from its consummation.
23. Francisco v. NLRC GR NO. 170087 August 31, 2006

When the control test is not sufficient to give a complete picture of the relationship between the parties, two-tiered
test must be applied. It involves: 1) the putative employer’s power to control the employee with respect to the
means and methods by which the work is to be accomplished; and (2) the underlying economic realities of the
activity or relationship. This two-tiered test would provide us with a framework of analysis, which would take into
consideration the totality of circumstances surrounding the true nature of the relationship between the parties.
This is especially appropriate in this case where there is no written agreement or terms of reference to base the
relationship on; and due to the complexity of the relationship based on the various positions and responsibilities
given to the worker over the period of the latter's employment.
The determination of the relationship between employer and employee depends upon the circumstances of the
whole economic activity, such as:
(1) the extent to which the services performed are an integral part of the employers business;
(2) the extent of the workers investment in equipment and facilities;
(3) the nature and degree of control exercised by the employer;
(4) the workers opportunity for profit and loss;
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(5) the amount of initiative, skill, judgment or foresight required for the success of the claimed
independent enterprise;
(6) the permanency and duration of the relationship between the worker and the employer; and
(7) the degree of dependency of the worker upon the employer for his continued employment in that line
of business.
The proper standard of economic dependence is whether the worker is dependent on the alleged employer for his
continued employment in that line of business.
24. WPP Marketing v. Galera GR NO. 169207 March 25, 2010

Corporate officers are given such character either by the Corporation Code or by the corporation’s by-laws. An
appointment as a corporate officer (Vice-President with the operational title of Managing Director of Mindshare)
during a special meeting of WPP’s Board of Directors is an appointment to a non-existent corporate office.
Therefore, respondent is an employee and the Labor Arbiter and the NLRC have jurisdiction over the present
case.
25. Matling Industrial v. Coros GR NO. 157802 October 13, 2010

As a rule, the illegal dismissal of an officer or other employee of a private employer is properly cognizable by the
LA. This is pursuant to Article 217 (a) 2 of the Labor Code, as amended. Where the complaint for illegal dismissal
concerns a corporate officer, however, the controversy falls under the jurisdiction of the Securities and Exchange
Commission (SEC).
Thus, pursuant to the above provision (Section 25 of the Corporation Code), whoever are the corporate officers
enumerated in the by-laws are the exclusive Officers of the corporation and the Board has no power to create
other Offices without amending first the corporate By-laws. However, the Board may create appointive positions
other than the positions of corporate Officers, but the persons occupying such positions are not considered as
corporate officers within the meaning of Section 25 of the Corporation Code.
26. Malcaba v. Prohealth Pharma Philippines GR NO. 209085 June 6, 2018

Under the Labor Code, the Labor Arbiter exercises original and exclusive jurisdiction over termination disputes
between an employer and an employee while the National Labor Relations Commission exercises exclusive
appellate jurisdiction over these cases. The presumption under this provision is that the parties have an
employer-employee relationship. Otherwise, the case would be cognizable in different tribunals even if the action
involves a termination dispute.
Under Section 25 of the Corporation Code, the President of a corporation is considered a corporate officer. The
dismissal of a corporate officer is considered an intra-corporate dispute, not a labor dispute. In Matling Industrial
v. Coros, the Court stated that jurisdiction over intra-corporate disputes involving the illegal dismissal of corporate
officers was with the Regional Trial Court, not with the Labor Arbiter. The mere designation as a high-ranking
employee, however, is not enough to consider one as a corporate officer. The clear weight of jurisprudence
clarifies that to be considered a corporate officer, first, the office must be created by the charter of the corporation,
and second, the officer must be elected by the board of directors or by the stockholders. Respondent
corporation's By-Laws creates the office of the President. That foundational document also states that the
President is elected by the Board of Directors. Finding that petitioner Malcaba is the President of respondent
corporation and a corporate officer, any issue on his alleged dismissal is beyond the jurisdiction of the Labor
Arbiter or the National Labor Relations Commission. Their adjudication on his money claims is void for lack of
jurisdiction.
27. Republic v. Asiapro Cooperative GR NO. 172101 November 23, 2007

Re: Competence of the SSC to hear the case
The question on the existence of an employer-employee relationship is not within the exclusive jurisdiction of the
National Labor Relations Commission (NLRC). Article 217 of the Labor Code enumerating the jurisdiction of the
Labor Arbiters and the NLRC provides that:
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ART. 217. JURISDICTION OF LABOR ARBITERS AND THE COMMISSION. - (a) x x x.
xxxx
6. Except claims for x x x Social Security, all other claims, arising from employer-employee relations, x x x”
Although the aforesaid provision speaks merely of claims for Social Security, it would necessarily include issues
on the coverage thereof, because claims are undeniably rooted in the coverage by the system. Hence, the
question on the existence of an employer-employee relationship for the purpose of determining the coverage of
the Social Security System is explicitly excluded from the jurisdiction of the NLRC and falls within the jurisdiction
of the SSC which is primarily charged with the duty of settling disputes arising under the Social Security Law of
1997.
Re: existence of EE-ER relationship

It is true that the Service Contracts executed between the respondent cooperative and Stanfilco expressly provide
that there shall be no employer-employee relationship between the respondent cooperative and its
owners-members. This Court, however, cannot give the said provision force and effect. In determining the
existence of an employer-employee relationship, the four cardinal elements are considered, the most important
element is the employer’s control of the employee’s conduct, not only as to the result of the work to be done, but
also as to the means and methods to accomplish.
In ruling in this case that there is an employer-employee relationship, the existence of an employer-employee
relationship cannot be negated by expressly repudiating it in a contract, when the terms and surrounding
circumstances show otherwise. The employment status of a person is defined and prescribed by law and not by
what the parties say it should be. Jurisprudence, furthermore, will show that it recognized that an owner-member
of a cooperative can be its own employee. A cooperative can be likened to a corporation with a personality
separate and distinct from its owners-members. Consequently, an owner-member of a cooperative can be an
employee of the latter and an employer-employee relationship can exist between them.
B. Reasonable Causal Connection Rule
28. San Miguel Corporation v. Ectuban GR NO. 127639 December 3, 1999

The demarcation line between the jurisdiction of regular courts and labor courts over cases involving workers and
their employers has always been the subject of dispute. We have recognized that not all claims involving such
groups of litigants can be resolved solely by our labor courts. However, we have also admonished that the present
trend is to refer worker-employer controversies to labor courts, unless unmistakably provided by the law to be
otherwise. Because of this trend, jurisprudence has developed the "reasonable causal connection rule." Under
this rule, if there is a reasonable causal connection between the claim asserted and the employer-employee
relations, then the case is within the jurisdiction of our labor courts. In the absence of such nexus, it is the regular
courts that have jurisdiction.
With regard to claims for damages under Art. 217(4) of the Labor Code, jurisprudence has evolved the rule that
claims for damages under paragraph 4 of Article 217, to be cognizable by the Labor Arbiter, must have a
reasonable causal connection with any of the claims provided for in that article. Only if there is such a connection
with the other claims can the claim for the damages be considered as arising from employer-employee relations.
The damages incurred by respondents as a result of the alleged fraudulent retrenchment program and the
allegedly defective “contract of termination” are merely the civil aspect of the injury brought about by their illegal
dismissal. The civil ramifications of their actual claim cannot alter the reality that it is primordially a labor matter
and, as such, is cognizable by labor courts.
29. Kawachi v. Del Quero GR NO. 163768 March 27, 2007

Article 217(a) of the Labor Code, as amended, clearly bestows upon the Labor Arbiter original and exclusive
jurisdiction over claims for damages arising from employer-employee relations - in other words, the Labor Arbiter
has jurisdiction to award not only the reliefs provided by labor laws, but also damages governed by the Civil Code.
The Court cited the case of San Miguel Corporation v. Etcuban, developed the "reasonable causal connection
9
rule." Under this rule, if there is a reasonable causal connection between the claim asserted and the
employer-employee relations, then the case is within the jurisdiction of our labor courts. In the absence of such
nexus, it is the regular courts that have jurisdiction.
Where the employer-employee relationship is merely incidental and the cause of action proceeds from a different
source of obligation, the Court has not hesitated to uphold the jurisdiction of the regular courts. Where the
damages claimed for were based on tort, malicious prosecution, or breach of contract, as when the claimant
seeks to recover a debt from a former employee or seeks liquidated damages in the enforcement of a prior
employment contract, the jurisdiction of regular courts was upheld. The allegations in private respondent's
complaint unmistakably relate to the manner of her alleged illegal dismissal. In the instant case, the NLRC has
jurisdiction over private respondent's complaint for illegal dismissal and damages arising therefrom.
30. Eviota v. CA GR NO. 152121 July 29, 2003

Not every controversy or money claim by an employee against the employer or vice-versa is within the exclusive
jurisdiction of the labor arbiter. A money claim by a worker against the employer or vice-versa is within the
exclusive jurisdiction of the labor arbiter only if there is a “reasonable causal connection” between the claim
asserted and employee-employer relation. Absent such a link, the complaint will be cognizable by the regular
courts of justice. Actions between employees and employer where the employer-employee relationship is merely
incidental and the cause of action precedes from a different source of obligation is within the exclusive jurisdiction
of the regular court. The jurisdiction of the Labor Arbiter under Article 217 of the Labor Code, as amended, is
limited to disputes arising from an employer-employee relationship which can only be resolved by reference to the
Labor Code of the Philippines, other labor laws or their collective bargaining agreements. The fact that the private
respondent was the erstwhile employer of the petitioner under an existing employment contract before the latter
abandoned his employment is merely incidental. In fact, the petitioner had already been replaced by the private
respondent before the action was filed against the petitioner.
In this case, jurisdiction over the controversy belongs to the civil courts. The action was for breach of a contractual
obligation, intrinsically a civil dispute; while seemingly the cause of action arose from employer-employee
relations, the employers claim for damages is grounded on wanton failure and refusal without just cause to report
to duty coupled with the averment that the employee maliciously and with bad faith violated the terms and
conditions of the contract to the damage of the employer. Such averments removed the controversy from the
coverage of the Labor Code of the Philippines and brought it within the purview of the Civil Law.
31. Indophil Textile Mills v. Adviento GR NO. 171212 August 4, 2014

The "reasonable causal connection rule," wherein if there is a reasonable causal connection between the claim
asserted and the employer-employee relations, then the case is within the jurisdiction of the labor courts; and in
the absence thereof, it is the regular courts that have jurisdiction. Such distinction is apt since it cannot be
presumed that money claims of workers which do not arise out of or in connection with their employer-employee
relationship, and which would therefore fall within the general jurisdiction of the regular courts of justice, were
intended by the legislative authority to be taken away from the jurisdiction of the courts and lodged with Labor
Arbiters on an exclusive basis.
Indeed, jurisprudence has evolved the rule that claims for damages under Article 217(a)(4) of the Labor Code, to
be cognizable by the LA, must have a reasonable causal connection with any of the claims provided for in that
article. Only if there is such a connection with the other claims can a claim for damages be considered as arising
from employer-employee relations.
True, the maintenance of a safe and healthy workplace is ordinarily a subject of labor cases. More, the acts
complained of appear to constitute matters involving employee-employer relations since respondent used to be
the Civil Engineer of petitioner. However, it should be stressed that respondent’s claim for damages is specifically
grounded on petitioner’s gross negligence to provide a safe, healthy and workable environment for its employees
−a case of quasi-delict. A perusal of the complaint would reveal that the subject matter is one of claim for
damages arising from quasi-delict, which is within the ambit of the regular court's jurisdiction.
10
C. Mandatory Conciliation and Mediation as Prerequisite for the Exercise of Jurisdiction

D. Labor Arbiter
1. Labor dispute, defined
32. San Miguel Corporation Employees Union v. Bersamira GR NO. 87700 June 13, 1990
A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "any controversy or matter concerning
terms and 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." A labor dispute can nevertheless exist "regardless of
whether the disputants stand in the proximate relationship of employer and employee" (Article 212 [1], Labor
Code, supra) provided the controversy concerns, among others, the terms and conditions of employment or a
"change" or "arrangement" thereof (ibid). The existence of a labor dispute is not negative by the fact that the
plaintiffs and defendants do not stand in the proximate relation of employer and employee, provided the
controversy concerns, among others, terms and conditions of employment, or a change or arrangement thereof.
As the case is indisputably linked with a labor dispute, jurisdiction belongs to the labor tribunals. The claim of
SanMig that the action below is for damages under Articles 19, 20 and 21 of the Civil Code would not suffice to
keep the case within the jurisdictional boundaries of regular Courts. That claim for damages is interwoven with a
labor dispute existing between the parties and would have to be ventilated before the administrative machinery
established for the expeditious settlement of those disputes.
33. Citibank, N. A. v. CA GR NO. 108961 November 27, 1998

Article 212, paragraph l of the Labor Code provides the definition of a "labor dispute". It "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."
If at all, the dispute between Citibank and El Toro security agency is one regarding the termination or non-renewal
of the contract of services. This is a civil dispute. El Toro was an independent contractor. Thus, no
employer-employee relationship existed between Citibank and the security guard members of the union in the
security agency who were assigned to secure the bank's premises and property. Hence, there was no labor
dispute and no right to strike against the bank. In this case, it was the security agency El Toro that recruited, hired
and assigned the watchmen to their place of work. It was the security agency that was answerable to Citibank for
the conduct of its guards.
34. PAL v. NLRC GR NO. 120567 March 20, 1998

Article 218 of the Labor Code empowers the NLRC-
"(e) To enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts or to require the performance
of a particular act in any labor dispute which, if not restrained or performed forthwith, may cause grave or irreparable damage to any
party or render ineffectual any decision in favor of such party; x x x."
Complementing the above-quoted provision, Sec. 1, Rule XI of the New Rules of Procedure of the NLRC,
pertinently provides as follows:
"Section 1. Injunction in Ordinary Labor Dispute.-A preliminary injunction or a restraining order may be granted by the Commission
through its divisions pursuant to the provisions of paragraph (e) of Article 218 of the Labor Code, as amended, x x x”
The foregoing ancillary power may be exercised by the Labor Arbiters only as an incident to the cases pending
before them in order to preserve the rights of the parties during the pendency of the case, but excluding labor
disputes involving strikes or lockout. From the foregoing provisions of law, the power of the NLRC to issue an
injunctive writ originates from "any labor dispute" upon application by a party thereof, which application if not
granted "may cause grave or irreparable damage to any party or render ineffectual any decision in favor of such
11
party." Taking into account the foregoing definitions, it is an essential requirement that there must first be a labor
dispute between the contending parties before the labor arbiter.
2. Original and exclusive jurisdiction
35. Pondoc v. NLRC GR NO. 116347 October 3, 1996

Article 218(e) of the Labor Code does not provide blanket authority to the NLRC or any of its divisions to issue
writs of injunction, while Rule XI of the New Rules of Procedure of the NLRC makes injunction only an ancillary
remedy in ordinary labor disputes. The foregoing ancillary power may be exercised by the Labor Arbiters only as
an incident to the cases pending before them in order to preserve the rights of the parties during the pendency of
the case, but excluding labor disputes involving strike or lockout. Under paragraph (b), Art. 217 of the Labor Code,
the NLRC has exclusive appellate jurisdiction over all cases decided by the Labor Arbiters. This simply means
that the NLRC does not have original jurisdiction over the cases enumerated in paragraph (a) and that if a claim
does not fall within the exclusive original jurisdiction of the Labor Arbiter, the NLRC cannot have appellate
jurisdiction thereon.
The conclusion is inevitable that the NLRC was without jurisdiction, either original or appellate, to receive
evidence on the alleged indebtedness, render judgment thereon, and direct that its award be set-off against the
final judgment of the Labor Arbiter. As correctly pointed out by the Solicitor General, there is a complete want of
evidence that the indebtedness asserted by the private respondent against Andres Pondoc arose out of or was
incurred in connection with the employer-employee relationship between them. The Labor Arbiter did not then
have jurisdiction over the claim as under paragraph (a) of Article 217 of the Labor Code
36. Villamaria v. CA and Bustamante GR NO. 165881 April 19, 2006

Under the boundary-hulog scheme incorporated in the Kasunduan, a dual juridical relationship was created
between petitioner and respondent: that of employer-employee and vendor-vendee. The Kasunduan did not
extinguish the employer-employee relationship of the parties extant before the execution of said deed.
In the cases provided in Article 217 of the Labor Code, an employer-employee relationship is an indispensable
jurisdictional requisite. The jurisdiction of Labor Arbiters and the NLRC under Article 217 of the Labor Code 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. Not every dispute between an employer
and employee involves matters that only the Labor Arbiter and the NLRC can resolve in the exercise of their
adjudicatory or quasi-judicial powers. Actions between employers and employees where the employer-employee
relationship is merely incidental is within the exclusive original jurisdiction of the regular courts. When the principal
relief is to be granted under labor legislation or a collective bargaining agreement, the case falls within the
exclusive jurisdiction of the Labor Arbiter and the NLRC even though a claim for damages might be asserted as
an incident to such claim.
37. San Jose v. NLRC GR NO. 121227 August 17, 1998

An analysis of the provisions of Articles 217, 261, and 262 indicates that:
1. The jurisdiction of the Labor Arbiter and Voluntary Arbitrator or Panel of Voluntary Arbitrators over the
cases enumerated in Articles 217, 261 and 262, can possibly include money claims in one form or
another.
2. The cases where the Labor Arbiters have original and exclusive jurisdiction are enumerated in Article 217,
and that of the Voluntary Arbitrator or Panel of Voluntary Arbitrators in Article 261.
3. The original and exclusive jurisdiction of Labor Arbiters is qualified by an exception as indicated in the
introductory sentence of Article 217 (a), to wit:
Art. 217. Jurisdiction of Labor Arbiters ... (a) Except as otherwise provided under this Code x x x
The phrase “Except as otherwise provided under this Code” refers to the following exceptions:
A. Art. 217. Jurisdiction of Labor Arbiters …
xxx
12
(c) Cases arising from the interpretation or implementation of collective bargaining agreement and those
arising from the interpretation or enforcement of company procedure/policies shall be disposed of by the
Labor Arbiter by referring the same to the grievance machinery and voluntary arbitrator as may be
provided in said agreement.
4. The jurisdiction of Voluntary Arbitrator or Panel of Voluntary Arbitrators is provided for in Arts. 261 and
262 of the Labor Code as indicated above.
The original and exclusive jurisdiction of the Labor Arbiter under Article 217(c) for money claims is limited only to
those arising from statutes or contracts other than a Collective Bargaining Agreement. The Voluntary Arbitrator or
Panel of Voluntary Arbitrators will have original and exclusive jurisdiction over money claims “arising from the
interpretation or implementation of the Collective Bargaining Agreement and, those arising from the interpretation
or enforcement of company personnel policies,” under Article 261. The voluntary arbitrator or panel of voluntary
arbitrators, upon agreement of the parties, shall also hear and decide all other labor disputes including unfair labor
practices and bargaining deadlocks.” It must be emphasized that the jurisdiction of the Voluntary Arbitrator or
Panel of Voluntary Arbitrators under Article 262 must be voluntarily conferred upon by both labor and
management. The labor disputes referred to in the same Article 262 can include those mentioned in Article 217
over which the Labor Arbiter has original and exclusive jurisdiction.
38. Del Monte v. Saldivar GR NO. 158620 October 11, 2006

Article 217(c) states: Cases arising from the interpretation or implementation of collective bargaining agreements
and those arising from the interpretation or enforcement of company personnel policies shall be disposed of by
the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided
in said agreements. In contrast, Article 261 of the Labor Code indubitably vests on the Voluntary Arbitrator or
panel of Voluntary Arbitrators the "original and exclusive jurisdiction to hear and decide all unresolved grievances
arising from the interpretation or implementation of the Collective Bargaining Agreement." Among those areas of
conflict traditionally within the jurisdiction of Voluntary Arbitrators are contract-interpretation and
contract-implementation.
In reconciling the grants of jurisdiction vested under Articles 261 and 217 of the Labor Code, the Court has
pronounced that "the original and exclusive jurisdiction of the Labor Arbiter under Article 217(c) for money claims
is limited only to those arising from statutes or contracts other than a Collective Bargaining Agreement. The
Voluntary Arbitrator or Panel of Voluntary Arbitrators will have original and exclusive jurisdiction over money
claims 'arising from the interpretation or implementation of the Collective Bargaining Agreement and, those arising
from the interpretation or enforcement of company personnel policies', under Article 261."
Thus, as the law indubitably precludes the Labor Arbiter from enforcing money claims arising from the
implementation of the CBA, the CBA herein complementarily recognizes that it is the Voluntary Arbitrators which
have jurisdiction to hear the claim. The Labor Arbiter correctly refused to exercise jurisdiction over Del Monte's
cross-claim, and the Court of Appeals would have no basis had it acted differently.
39. 7K Corporation v. Albarico GR NO. 182295 June 26, 2013

Although the general rule under the Labor Code gives the labor arbiter exclusive and original jurisdiction over
termination disputes as provided for in Art. 217, it also recognizes exceptions. One of the exceptions is provided
in Article 262 of the Labor Code. In San Jose v. NLRC, the Court said:
The phrase “Except as otherwise provided under this Code” refers to the following exceptions:
A. Art. 217. Jurisdiction of Labor Arbiters . . .
xxxx
(c) Cases arising from the interpretation or implementation of collective bargaining agreement and those arising from the
interpretation or enforcement of company procedure/policies shall be disposed of by the Labor Arbiter by referring the
same to the grievance machinery and voluntary arbitrator as may be provided in said agreement.
13
B. Art. 262. Jurisdiction over other labor disputes. The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon
agreement of the parties, s hall also hear and decide all other labor disputes including unfair labor practices and bargaining
deadlocks.
The labor disputes referred to in the same Article 262 [of the Labor Code] can include all those disputes
mentioned in Article 217 over which the Labor Arbiter has original and exclusive jurisdiction.” From the above
discussion, it is clear that voluntary arbitrators may, by agreement of the parties, assume jurisdiction over a
termination dispute such as the present case, contrary to the assertion of petitioner that they may not.
In ruling that VA assumed jurisdiction in deciding the issue of the legality of dismissal of Albarico, the
circumstances of the case lead to no other conclusion that the claim for separation pay was premised on his
allegation of illegal dismissal. Then, VA properly assumed jurisdiction over the issue of the legality of his
dismissal. To think otherwise would lead to absurdity, because the voluntary arbitrator would then be deciding that
issue in a vacuum. The arbitrator would have no basis whatsoever for saying that respondent was entitled to
separation pay or not if the issue of the legality of Albarico’s dismissal was not resolved first.
b. Unfair Labor Practice
40. Allan Mendoza v. Manila Water Employees Union GR NO. 201595 January 25, 2016
While it is true that some of petitioner’s causes of action constitute intra-union cases cognizable by the BLR under
Article 226 of the Labor Code, petitioner’s charge of unfair labor practices falls within the original and exclusive
jurisdiction of the Labor Arbiters, pursuant to Article 217 of the Labor Code. Where the facts show that respondent
is guilty of unfair labor practices under Article 249 (a) and (b) – that is, violation of petitioner’s right to
self-organization, unlawful discrimination, and illegal termination of his union membership – which case falls within
the original and exclusive jurisdiction of the Labor Arbiters, in accordance with Article 217 of the Labor Code.
c. Termination Dispute

41. Atlas Farms v. NLRC GR NO. 142244 November 18, 2002
Where the dispute is just in the interpretation, implementation or enforcement stage, it may be referred to the
grievance machinery set up in the CBA, or brought to voluntary arbitration. But, where there was already actual
termination, with alleged violation of the employees’ rights, it is already cognizable by the labor arbiter.
Only disputes involving the union and the company shall be referred to the grievance machinery or voluntary
arbitrators. In these termination cases of private respondents, the union had no participation, it having failed to
object to the dismissal of the employees concerned by the petitioner. It is obvious that arbitration without the
union’s active participation on behalf of the dismissed employees would be pointless, or even prejudicial to their
cause. Given the fact of dismissal, it can be said that the cases were effectively removed from the jurisdiction of
the voluntary arbitrator, thus placing them within the jurisdiction of the labor arbiter.
42. Negros Metal v. Lamayo GR NO. 186557 August 25, 2010

Under Art. 217, it is clear that a labor arbiter has original and exclusive jurisdiction over termination disputes. On
the other hand, under Article 261, a voluntary arbitrator has original and exclusive jurisdiction over grievances
arising from the interpretation or enforcement of company policies. As a general rule then, termination disputes
should be brought before a labor arbiter, except when the parties, under Art. 262, unmistakably express that they
agree to submit the same to voluntary arbitration. Where the CBA provision on grievance machinery does not
expressly state that termination disputes are included in the ambit of what may be brought before the company’s
grievance machinery, the original and exclusive jurisdiction of the Labor Arbiter over termination disputes is not
removed.
43. Vivero v. CA GR NO. 138938 October 24, 2000

Where the question to be resolved necessarily springs from the primary issue of whether there was a valid
termination, and proper interpretation and implementation of the CBA provisions comes into play only because the
grievance procedure provided for in the CBA was not observed after he sought his Union’s assistance in
14
contesting his termination, there would be no reason to invoke the need to interpret and implement the CBA
provisions properly. The instant case then is a termination dispute falling under the original and exclusive
jurisdiction of the Labor Arbiter
A quick perusal of the pertinent provision of the CBA show:

“x x x The Master shall refer the case/dispute upon reaching port and if not satisfactorily settled, the case/dispute may be referred to
the grievance machinery or procedure hereinafter provided.”
The use of the word “may” in the provision shows that the import of the CBA and the intention of the parties was
to reserve the right to submit the illegal termination dispute to the jurisdiction of the Labor Arbiter rather than a
Voluntary Arbitrator.
44. University of Immaculate Conception v. NLRC GR NO. 181146 January 26, 2011
Article 217 of the Labor Code states that unfair labor practices and termination disputes fall within the original and
exclusive jurisdiction of the Labor Arbiter. The exception lies in:
Art. 262. Jurisdiction over other labor disputes. – The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of the
parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks.
Hence, when gleaned from the transcript of stenographic notes of the administrative hearing shows that the
parties clearly agreed to resort to voluntary arbitration, the Labor Arbiter should have immediately disposed of the
complaint and referred the same to the voluntary arbitrator.
45. Austria v. NLRC GR NO. 124382 August 16, 1992

Re: Coverage of religious corporations under the Labor Code
Under the Labor Code, the provision which governs the dismissal of employees, is comprehensive enough to
include religious corporations in its coverage. Article 278 of the Labor Code on post-employment states that "the
provisions of this Title shall apply to all establishments or undertakings, whether for profit or not." Obviously, the
cited article does not make any exception in favor of a religious corporation. This is made more evident by the fact
that the Rules Implementing the Labor Code, particularly, Section 1, Rule 1, Book VI on the Termination of
Employment and Retirement, categorically includes religious institutions in the coverage of the law.
46. Reyes v. RTC Makati, Zenith Insurance Corporation GR NO. 165744 August 11, 2008
To determine whether a case involves an intra-corporate controversy, and is to be heard and decided by the
branches of the RTC specifically designated by the Court to try and decide such cases, two elements must
concur: (a) the status or relationship of the parties; and (2) the nature of the question that is the subject of their
controversy.
The first element requires that the controversy must arise out of intra-corporate or partnership relations between
any or all of the parties and the corporation, partnership, or association of which they are stockholders, members
or associates; between any or all of them and the corporation, partnership, or association of which they are
stockholders, members, or associates, respectively; and between such corporation, partnership, or association
and the State insofar as it concerns their individual franchises.
The second element requires that the dispute among the parties be intrinsically connected with the regulation of
the corporation. If the nature of the controversy involves matters that are purely civil in character, necessarily, the
case does not involve an intra-corporate controversy.
47. Locsin v. Nissan Lease Philippines GR NO. 185567 October 20, 2010
Re: officer v. employee
An "office" is created by the charter of the corporation and the officer is elected by the directors or stockholders.
On the other hand, an "employee" usually occupies no office and generally is employed not by action of the
directors or stockholders but by the managing officer of the corporation who also determines the compensation to
be paid to such employee.
Re: jurisdiction over issues on corporate officer’s dismissal

15
A corporate officer’s dismissal is always a corporate act, or an intra-corporate controversy which arises between a
stockholder and a corporation. Prior to its amendment, Section 5(c) of Presidential Decree No. 902-A (PD 902-A)
provided that intra-corporate disputes fall within the jurisdiction of the Securities and Exchange Commission
(SEC):
Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations,
partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees, it shall have
original and exclusive jurisdiction to hear and decide cases involving:
xxxx
c) Controversies in the election or appointments of directors, trustees, officers or managers of such corporations, partnerships or
associations.
Subsection 5.2, Section 5 of Republic Act No. 8799, which took effect on 8 August 2000, transferred to regional
trial courts the SEC’s jurisdiction over all cases listed in Section 5 of PD 902-A.
48. Wesleyan University v. Maglaya GR NO. 212774 January 23, 2017

"Corporate officers" in the context of Presidential Decree No. 902-A are those officers of the corporation who are
given that character by the Corporation Code or by the corporation's by-laws. There are three specific officers
whom a corporation must have under Section 25 of the Corporation Code. These are the president, secretary and
the treasurer. The number of officers is not limited to these three. A corporation may have such other officers as
may be provided for by its by-laws like, but not limited to, the vice-president, cashier, auditor or general manager.
The number of corporate officers is thus limited by law and by the corporation's by-laws.
The creation of the position is under the corporation's charter or by-laws, and that the election of the officer is by
the directors or stockholders must concur in order for an individual to be considered a corporate officer, as against
an ordinary employee or officer. It is only when the officer claiming to have been illegally dismissed is classified as
such corporate officer that the issue is deemed an intra-corporate dispute which falls within the jurisdiction of the
trial courts.
49. Cacho v. Balagtas GR NO. 202974 February 17, 2018

Two-tier test must be employed to determine whether an intra-corporate controversy exists in the present case,
viz.: (a) the relationship test, and (b) the nature of the controversy test.
A dispute is considered an intra-corporate controversy under the relationship test when the relationship between
or among the disagreeing parties is any one of the following: (a) between the corporation, partnership, or
association and the public; (b) between the corporation, partnership, or association and its stockholders, partners,
members, or officers; (c) between the corporation, partnership, or association and the State as far as its franchise,
permit or license to operate is concerned; and (d) among the stockholders, partners, or associates themselves.
Under the nature of the controversy test, the disagreement must not only be rooted in the existence of an
intra-corporate relationship, but must as well pertain to the enforcement of the parties' correlative rights and
obligations under the Corporation Code and the internal and intra-corporate regulatory rules of the corporation.
All told, the issue in the present case is an intra-corporate controversy, a matter outside the Labor Arbiter's
jurisdiction.
D. Monetary Claims

50. Paredes v. Feed the Children Philippines GR NO. 184397 September 9, 2015
The money claims within the original and exclusive jurisdiction of labor arbiters are those which have some
reasonable causal connection with the employer-employee relationship. By the designating clause "arising from
the employer-employee relations," Article 217 applies with equal force to the claim of an employer for actual
damages against its dismissed employee, where the basis for the claim arises from or is necessarily connected
with the fact of termination, and should be entered as a counterclaim in the illegal dismissal case.
16
This claim is distinguished from cases of actions for damages where the employer-employee relationship is
merely incidental and the cause of action proceeds from a different source of obligation. Thus, the regular courts
have jurisdiction where the damages claimed for were based on: tort, malicious prosecution, or breach of contract,
as when the claimant seeks to recover a debt from a former employee or seeks liquidated damages in the
enforcement of a prior employment contract. The fact that the transaction happened at the time they were
employer and employee did not negate the civil jurisdiction of trial court. Hence, it is erroneous for the LA and the
CA to rule on such claim arising from a different source of obligation and where the employer-employee
relationship was merely incidental, moreso when the claim does not arise from or is necessarily connected with
the fact of termination.
51. Lunzaga v. Albar Shipping GR NO. 200476 April 18, 2012

A review of the records of the case reveals that the main issue in the complaint before the Labor Arbiter was
whether the heirs of Romeo are entitled to receive his death benefits from Albar. Clearly, the Labor Arbiter has
jurisdiction over this issue and the case itself, involving as it does a claim arising from an employer-employee
relationship. And while the Labor Arbiter has no jurisdiction to determine who among the alleged heirs is entitled
to receive Romeo's death benefits, it should have made a ruling holding Albar liable for the claim.
52. Santos v. Servier Philippines GR NO. 166377 November 28, 2008

Re: claim for illegal deduction due to alleged tax deductions on retirement benefits
It is noteworthy that petitioner demanded the completion of her retirement benefits, including the amount withheld
by respondent for taxation purposes. The issue of deduction for tax purposes is intertwined with the main issue of
whether or not petitioner's benefits have been fully given her. It is, therefore, a money claim arising from the
employer-employee relationship, which clearly falls within the jurisdiction of the Labor Arbiter and the NLRC.
53. World’s Best Gas v. Vital GR NO. 211588 September 9, 2015

Having no subject matter jurisdiction to resolve claims arising from employer-employee relations, the RTC's ruling
on unpaid salaries and separation pay is, thus, null and void, and therefore, cannot perpetuate even if affirmed on
appeal. However, since the dismissal is grounded on lack of jurisdiction, then the same should be considered as a
dismissal without prejudice. Hence, claimant may re-file the same claim, including those related thereto (e.g.,
moral and exemplary damages, and attorney's fees) before the proper labor tribunal.
54. Halaguena v. PAL GR NO. 172013 October 2, 2009

Not every controversy or money claim by an employee against the employer or vice-versa is within the exclusive
jurisdiction of the labor arbiter. Actions between employees and employer where the employer-employee
relationship is merely incidental and the cause of action precedes from a different source of obligation is within the
exclusive jurisdiction of the regular court. The jurisdiction of labor arbiters and the NLRC under Article 217 of the
Labor Code 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.
In this case, The said issue cannot be resolved solely by applying the Labor Code. Rather, it requires the
application of the Constitution, labor statutes, law on contracts and the Convention on the Elimination of All Forms
of Discrimination Against Women and the power to apply and interpret the constitution and CEDAW is within the
jurisdiction of trial courts, a court of general jurisdiction.
55. Pepsi Cola v. Gal-lang GR NO. 89621 September 24, 1991

A complaint for damages for malicious prosecution filed by employees has its jurisdiction belonging with the
regular courts.
The complaint did not arise from such relations and in fact could have arisen independently of an employment
relationship between the parties. No such relationship or any unfair labor practice is asserted. What the
employees are alleging is that the petitioners acted with bad faith when they filed the criminal complaint which the
Municipal Trial Court said was intended "to harass the poor employees" and the dismissal of which was affirmed
17
by the Provincial Prosecutor "for lack of evidence to establish even a slightest probability that all the respondents
herein have committed the crime imputed against them." This is a matter which the labor arbiter has no
competence to resolve as the applicable law is not the Labor Code but the Revised Penal Code.
56. Banez v. Valdevilla GR NO. 128024 May 9, 2000

Presently, and as amended by R.A. 6715, the jurisdiction of Labor Arbiters and the NLRC in Article 217 is
comprehensive enough to include claims for all forms of damages "arising from the employer-employee relations".
The Labor Arbiter has jurisdiction to award not only the reliefs provided by labor laws, but also damages governed
by the Civil Code.
By the designating clause "arising from the employer-employee relations", Article 217 should apply with equal
force to the claim of an employer for actual damages against its dismissed employee, where the basis for the
claim arises from or is necessarily connected with the fact of termination, and should be entered as a
counterclaim in the illegal dismissal case. This is, of course, to distinguish from cases of actions for damages
where the employer-employee relationship is merely incidental and the cause of action proceeds from a different
source of obligation.
57. Milan v. NLRC GR NO. 202961 February 4, 2015

Claims arising from an employer-employee relationship are not limited to claims by an employee. Employers may
also have claims against the employee, which arise from the same relationship. Article 217 should apply with
equal force to the claim of an employer for actual damages against its dismissed employee, where the basis for
the claim arises from or is necessarily connected with the fact of termination, and should be entered as a
counterclaim in the illegal dismissal case. As a general rule, therefore, a claim only needs to be sufficiently
connected to the labor issue raised and must arise from an employer-employee relationship for the labor tribunals
to have jurisdiction.
Respondent Solid Mills allowed the use of its property for the benefit of petitioners as its employees. Petitioners
were merely allowed to possess and use it out of respondent Solid Mills’ liberality. The employer may, therefore,
demand the property at will. Thus, the return of the property’s possession became an obligation or liability on the
part of the employees when the employer-employee relationship ceased.
58. Amecos Innovations v. Lopez GR NO. 178055 July 2, 2014

Article 217(a)(4) of the Labor Code is applicable, between petitioner and respondent.. Said provision bestows
upon the Labor Arbiter original and exclusive jurisdiction over claims for damages arising from
employer-employee relations. The observation that the matter of SSS contributions necessarily flowed from the
employer-employee relationship between the parties – shared by the lower courts and the CA – is correct; thus,
petitioners’ claims should have been referred to the labor tribunals. In this connection, it is noteworthy to state that
“the Labor Arbiter has jurisdiction to award not only the reliefs provided by labor laws, but also damages governed
by the Civil Code.”
59. PAL v. Airline Philots Association of the Philippines GR NO. 200088 February 26,
2018
To determine whether a claim for damages under paragraph 4 of Article 217 is properly cognizable by the labor
arbiter, jurisprudence has evolved the "reasonable connection rule" which essentially states that the claim for
damages must have reasonable causal connection with any of the claims provided for in that article. A money
claim by a worker against the employer or vice-versa is within the exclusive jurisdiction of the labor arbiter only if
there is a "reasonable causal connection" between the claim asserted and employee-employer relations. Only if
there is such a connection with the other claims can the claim for damages be considered as arising from
employer-employee relations.
The SOLE assumed jurisdiction over the labor dispute between PAL and the respondents on 23 December 1997.
In this regard, it is settled that the authority of the SOLE to assume jurisdiction over a labor dispute causing or
likely to cause a strike or lockout in an industry indispensable to the national interest includes and extends to all
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questions and controversies arising therefrom. When the SOLE assumed jurisdiction over the labor dispute, the
claim for damages was deemed included therein.
E. Legality of strikes and lockouts

F. Legislated wage increases and wage distortion

G. In relation to DOLE jurisdiction under Arts. 128 and 129

60. Ex-Bataan Veterans Security Agency v. Secretary of Labor GR NO. 152396 November 20,
2007
While it is true that under Articles 129 and 217 of the Labor Code, the Labor Arbiter has jurisdiction to hear and
decide cases where the aggregate money claims of each employee exceeds P5,000.00, said provisions of law do
not contemplate nor cover the visitorial and enforcement powers of the Secretary of Labor or his duly authorized
representatives. Rather, said powers are defined and set forth in Article 128 of the Labor Code. However, if the
labor standards case is covered by the exception clause in Article 128(b) of the Labor Code, then the Regional
Director will have to endorse the case to the appropriate Arbitration Branch of the NLRC.
In order to divest the Regional Director or his representatives of jurisdiction, the following elements must be
present:
1) that the employer contests the findings of the labor regulations officer and raises issues thereon;
2) that in order to resolve such issues, there is a need to examine evidentiary matters; and
3) that such matters are not verifiable in the normal course of inspection.
If the case does not fall under the exception clause, the Regional Director may validly assume jurisdiction over
money claims because such jurisdiction was exercised in accordance with Article 128(b) of the Labor Code even
if the claims exceeded P5,000.
61. People’s Broadcasting (Bombo Radyo Phils., Inc.) v. SOLE GR NO. 179652 March
6, 2012
Under Art. 128(b) of the Labor Code, as amended by RA 7730, it is clear and beyond debate that an
employer-employee relationship must exist for the exercise of the visitorial and enforcement power of the DOLE.
The determination of the existence of an employer-employee relationship by the DOLE must be respected. No
limitation in the law was placed upon the power of the DOLE to determine the existence of an employer-employee
relationship. No procedure was laid down where the DOLE would only make a preliminary finding, that the power
was primarily held by the NLRC. The law did not say that the DOLE would first seek the NLRC’s determination of
the existence of an employer-employee relationship, or that should the existence of the employer-employee
relationship be disputed, the DOLE would refer the matter to the NLRC. The expanded visitorial and enforcement
power of the DOLE granted by RA 7730 would be rendered nugatory if the alleged employer could, by the simple
expedient of disputing the employer-employee relationship, force the referral of the matter to the NLRC.
62. Meteoro v. Creative Creatures GR NO. 171275 July 13, 2009

The visitorial and enforcement powers of the Secretary, exercised through his representatives, encompass
compliance with all labor standards laws and other labor legislation, regardless of the amount of the claims filed
by workers. This notwithstanding, the power of the Regional Director to hear and decide the monetary claims of
employees is not absolute. The last sentence of Article 128 (b) of the Labor Code, otherwise known as the
"exception clause," provides an instance when the Regional Director or his representatives may be divested of
jurisdiction over a labor standards case. Under prevailing jurisprudence, the so-called "exception clause" has the
following elements, all of which must concur:
1) that the employer contests the findings of the labor regulations officer and raises issues thereon;
2) that in order to resolve such issues, there is a need to examine evidentiary matters; and
3) that such matters are not verifiable in the normal course of inspection.
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In such case, the Regional Director shall refer the matter to the Labor Arbiter.
H. Enforcement or annulment of compromise agreement (Art. 233)

I. Execution and enforcement of voluntary arbitrator’s decision (Art. 276)

63. Santiago v. CF Sharp Crew Management GR NO. 162419 July 10, 2007
Section 10 of R.A. No. 8042 (Migrant Workers Act), provides that:
Sec. 10. Money Claims. – Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations
Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the
filing of the complaint, the 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 actual, moral, exemplary and other forms of damages.
The jurisdiction of labor arbiters is not limited to claims arising from employer-employee relationships. Despite the
absence of an employer-employee relationship between petitioner and respondent, the Court rules that the NLRC
has jurisdiction over petitioner’s complaint.
64. IPAMS v. De Vera GR NO. 205703 March 7, 2016

For a foreign law to govern an employment contract the following requisites must be met:
1) That it is expressly stipulated in the overseas employment contract that a specific foreign law shall
govern;
2) That the foreign law invoked must be proven before the courts pursuant to the Philippine rules on
evidence;
3) That the foreign law stipulated in the overseas employment contract must not be contrary to law, morals,
good customs, public order, or public policy of the Philippines; and
4) That the overseas employment contract must be processed through the POEA.
Absence thereof, the foreign law will not be applicable as it will be against our fundamental and statutory laws.
65. Ace Navigation v. Fernandez GR NO. 197309 October 10, 2012

The State’s labor relations policy laid down in the Constitution and fleshed out in the enabling statute, the Labor
Code (Art. 260, 261 and 262) and the POEA-SEC provide that the voluntary arbitrator or panel of voluntary
arbitrators has original and exclusive jurisdiction over Fernandez’s disability claim. Where there is unequivocal or
unmistakable language in the agreement which mandatorily requires the parties to submit to the grievance
procedure any dispute or cause of action they may have against each other, it unmistakably reflects the parties’
agreement to submit any unresolved dispute at the grievance resolution stage to mandatory voluntary arbitration.
It is settled that when the parties have validly agreed on a procedure for resolving grievances and to submit a
dispute to voluntary arbitration then that procedure should be strictly observed.
POEA-SEC, which governs the employment of Filipino seafarers, provides in its Sec. 29 on Dispute Settlement
Procedures, provides:
In cases of claims and disputes arising from this employment, the parties covered by a collective bargaining agreement shall submit
the claim or dispute to the original and exclusive jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators. If the parties
are not covered by a collective bargaining agreement, the parties may at their option submit the claim or dispute to either the original
and exclusive jurisdiction of the National Labor Relations Commission (NLRC), pursuant to Republic Act (RA) 8042 otherwise known
as the Migrant Workers and Overseas Filipinos Act of 1995 or to the original and exclusive jurisdiction of the voluntary arbitrator or
panel of voluntary arbitrators. If there is no provision as to the voluntary arbitrators to be appointed by the parties, the same shall be
appointed from the accredited voluntary arbitrators of the National Conciliation and Mediation Board of the Department of Labor and
Employment.
66. Heirs Dulay v. Aboitiz

A careful reading of this RA 8042 would readily show that there is no specific provision thereunder which provides
for jurisdiction over disputes or unresolved grievances regarding the interpretation or implementation of a CBA.
Section 10 of R.A. 8042, which is cited by petitioner, simply speaks, in general, of "claims arising out of an
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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."
With respect to disputes involving claims of Filipino seafarers wherein the parties are covered by a collective
bargaining agreement, the dispute or claim should be submitted to the jurisdiction of a voluntary arbitrator or panel
of arbitrators. It is only in the absence of a collective bargaining agreement that parties may opt to submit the
dispute to either the NLRC or to voluntary arbitration.
K. In relation to GOCCs

67. LRTA v. Alvarez GR NO. 188047 November 28, 2016
In LRTA v. Mendoza, which have the same facts, issue, and claims as in this case, the Court upheld the
jurisdiction of the labor tribunals over LRTA, citing PNB v. Pabalan, stating that: “By engaging in a particular
business thru the instrumentality of a corporation, the government divests itself pro hac vice of its sovereign
character, so as to render the corporation subject to the rules of law governing private corporations.” LRTA must
submit itself to the provisions governing private corporations, including the Labor Code, for having conducted
business through a private corporation. Therefore, the jurisdiction of the Labor Arbiter shall be upheld.
68. GSIS v. NLRC GR NO. 180045 November 17, 2010

The declared policy of the State in Section 39 of the GSIS Charter granting GSIS an exemption from tax, lien,
attachment, levy, execution, and other legal processes should be read together with the grant of power to the
GSIS to invest its "excess funds" under Section 36 of the same Act. Under Section 36, the GSIS is granted the
ancillary power to invest in business and other ventures for the benefit of the employees, by using its excess
funds for investment purposes. In the exercise of such function and power, the GSIS is allowed to assume a
character similar to a private corporation. Thus, it may sue and be sued, as also, explicitly granted by its charter.
69. Duty Free Philippines v. Mojica GR NO. 166365 September 30, 2005
Civil Service Authorities has jurisdiction in controversies involving the terms of employment, and other related
issues, of the Civil Service official and employees. Civil Service Commission shall hear and decide administrative
cases instituted by or brought before it directly or on appeal, including contested appointments, and review
decisions and actions of its offices and of the agencies attached to it.
DFP was created under Executive Order (EO) No. 46 primarily to augment the service facilities for tourists and to
generate foreign exchange and revenue for the government. DFP is under the exclusive authority of the PTA, a
corporate body attached to the Department of Tourism, it follows that its officials and employees are likewise
subject to the Civil Service rules and regulations.
L. Cases with foreign element

70. WPP Marketing v. Galera GR NO. 169207 March 25, 2010
The law and the rules are consistent in stating that the employment permit must be acquired prior to employment.
The Labor Code states: "Any alien seeking admission to the Philippines for employment purposes and any
domestic or foreign employer who desires to engage an alien for employment in the Philippines shall obtain an
employment permit from the Department of Labor." Section 4, Rule XIV, Book 1 of the Implementing Rules and
Regulations provides:
Employment permit required for entry. — No alien seeking employment, whether as a resident or non-resident, may enter the
Philippines without first securing an employment permit from the Ministry. If an alien enters the country under a non-working visa
and wishes to be employed thereafter, he may only be allowed to be employed upon presentation of a duly approved employment
permit.
When there is violation of the said provision, the alien employee cannot come to this Court with unclean hands.
To grant such is to sanction the violation of the Philippine labor laws requiring aliens to secure work permits
before their employment.
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71. Pakistan International Airlines v. Ople GR NO. 61594 September 28, 1990
Art. 278 of the Labor Code, as it then existed, forbade the termination of the services of employees with at least
one (1) year of service without prior clearance from the Department of Labor and Employment:
Art. 278. Miscellaneous Provisions — . . .

(b) With or without a collective agreement, no employer may shut down his establishment or dismiss or
terminate the employment of employees with at least one year of service during the last two (2) years,
whether such service is continuous or broken, without prior written authority issued in accordance with
such rules and regulations as the Secretary may promulgate . . . (emphasis supplied)
Rule XIV, Book No. 5 of the Rules and Regulations Implementing the Labor Code, made clear that in case of a
termination without the necessary clearance, the Regional Director was authorized to order the reinstatement of
the employee concerned and the payment of backwages; necessarily, therefore, the Regional Director must have
been given jurisdiction over such termination cases.
72. PNB v. Cabansag GR NO. 157010 June 21, 2005

Based on Article 217 of the Labor Code and Section 10 of RA 8042, labor arbiters clearly have original and
exclusive jurisdiction over claims arising from employer-employee relations, including termination disputes
involving all workers, among whom are overseas Filipino workers (OFW). Securing an employment pass in the
foreign country to work does not automatically mean that the non-citizen is thereby bound by local laws only, as
averred by petitioner. It does not at all imply a waiver of one's national laws on labor. Absent any clear and
convincing evidence to the contrary, such permit simply means that its holder has a legal status as a worker in the
issuing country.
As held by the Court in Royal Crown Internationale v. NLRC, "whether employed locally or overseas, all Filipino
workers enjoy the protective mantle of Philippine labor and social legislation, contract stipulations to the contrary
notwithstanding. This pronouncement is in keeping with the basic public policy of the State to afford protection to
labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate
the relations between workers and employers.”
73. Manila Hotel v. NLRC GR NO. 120077 October 13, 2000

Under the rule of forum non conveniens, a Philippine court or agency may assume jurisdiction over the case if it
chooses to do so provided:
1) that the Philippine court is one to which the parties may conveniently resort to;
2) that the Philippine court is in a position to make an intelligent decision as to the law and the facts; and
3) that the Philippine court has or is likely to have power to enforce its decision.
When the Court held that the requisites to warrant application of forum non-conveniene is present, this is not to
say that Philippine courts and agencies have no power to solve controversies involving foreign employers. Neither
are we saying that we do not have power over an employment contract executed in a foreign country. If the
worker were an "overseas contract worker", a Philippine forum, specifically the POEA, not the NLRC, would
protect him.
74. Saudi Arabian Airlines v. Rebesencio GR NO. 198587 January 14, 2015
Contractual choice of law is not determinative of jurisdiction. Stipulating on the laws of a given jurisdiction as the
governing law of a contract does not preclude the exercise of jurisdiction by tribunals elsewhere. The reverse is
equally true: The assumption of jurisdiction by tribunals does not ipso facto mean that it cannot apply and rule on
the basis of the parties' stipulation.
Under the doctrine of forum non conveniens, "a court, in conflicts of law cases, may refuse impositions on its
jurisdiction where it is not the most 'convenient' or available forum and the parties are not precluded from seeking
remedies elsewhere." Consistent with the principle of comity, a tribunal's desistance in exercising jurisdiction on
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account of forum non conveniens is a deferential gesture to the tribunals of another sovereign. It is a measure that
prevents the former's having to interfere in affairs which are better and more competently addressed by the latter.
Forum non conveniens finds no application and does not operate to divest Philippine tribunals of jurisdiction and
to require the application of foreign law. Forum non conveniens relates to forum, not to the choice of governing
law. That forum non conveniens may ultimately result in the application of foreign law is merely an incident of its
application.
M. In relation to entities with immunity

75. DFA v. NLRC GR NO. 113191 September 18, 1996
Being an international organization that has been extended diplomatic status, the ADB is independent of the
municipal law. One of the basic immunities of an international organization is immunity from local jurisdiction, i.e.,
that it is immune from the legal writs and processes issued by the tribunals of the country where it is found. The
obvious reason for this is that the subjection of such an organization to the authority of the local courts would
afford a convenient medium thru which the host government may interfere in their operations or even influence or
control its policies and decisions of the organization; besides, such subjection to local jurisdiction would impair the
capacity of such body to discharge its responsibilities impartially behalf of its member-states.
76. Lasco v. UNRF GR NO. 109095 February 23, 1995

Immunity is necessary to assure unimpeded performance of their functions. The purpose is "to shield the affairs of
international organizations, in accordance with international practice, from political pressure or control by the host
country to the prejudice of member States of the organization, and to ensure the unhampered performance of
their functions." Our courts can only assume jurisdiction over private respondent if it expressly waived its
immunity. Clauses on jurisdictional immunity are now standard in the charters of the international organizations to
guarantee the smooth discharge of their functions.
Clauses on jurisdictional immunity are now standard in the charters of the international organizations to guarantee
the smooth discharge of their functions.
77. US v. Guinto GR NO. 76607 February 26, 1990

The rule that a state may not be sued without its consent, now expressed in Article XVI, Section 3, of the 1987
Constitution, is one of the generally accepted principles of international law that we have adopted as part of the
law of our land under Article II, Section 2. The consent of the state to be sued may be manifested expressly or
impliedly. However, not all contracts entered into by the government will operate as a waiver of its non-suability;
distinction must be made between its sovereign and proprietary acts.
There is no question that the United States of America, like any other state, will be deemed to have impliedly
waived its non-suability if it has entered into a contract in its proprietary or private capacity. And because the
activities of states have multiplied, it has been necessary to distinguish them — between sovereign and
governmental acts (jure imperii) and private, commercial and proprietary acts (jure gestionis). A State may be said
to have descended to the level of an individual and can thus be deemed to have tacitly given its consent to be
sued only when it enters into business contracts.
N. In relation to Cooperatives

78. Perpetual Help Credit Cooperative v. Faburada GR NO. 12194
The Labor Arbiter has exclusive and original jurisdiction over disputes between cooperatives and its employees.
The pertinent provisions (Art. 121, Cooperative Code of the Philippines on procedures on how cooperative
disputes are to be resolved); and Sec. 8, Cooperative Development Authority Law on mediation and conciliation
before filing of appropriate action before the proper courts apply to members, officers and directors of the
cooperative involved in disputes within a cooperative or between cooperatives.
23
There is no evidence that private respondents are members of petitioner PHCCI and even if they are, the dispute
is about payment of wages, overtime pay, rest day and termination of employment. Under Art. 217 of the Labor
Code, these disputes are within the original and exclusive jurisdiction of the Labor Arbiter. Further bolstering the
point is that there is an employer-employee relationship, as determined through the four-fold test.
79. San Miguel v. Semillano GR NO. 164257 July 5, 2010

The existence of an independent and permissible contractor relationship is generally established by the following
criteria: whether or not the contractor is carrying on an independent business; the nature and extent of the work;
the skill required; the term and duration of the relationship; the right to assign the performance of a specified piece
of work; the control and supervision of the work to another; the employer's power with respect to the hiring, firing
and payment of the contractor's workers; the control of the premises; the duty to supply the premises, tools,
appliances, materials, and labor; and the mode, manner and terms of payment. Despite the fact that the service
contracts contain stipulations which are earmarks of independent contractorship, they do not make it legally so.
Upon finding that there is a labor-only contracting, and the respondents are employers of the principal, the
argument that the respondent is a member of the cooperative-contractor necessarily fails; then the LA has
jurisdiction over the matter.
80. Ellao v. Batangas I Electric Cooperative GR NO. 209166 July 9, 2018

Complaints for illegal dismissal filed by a cooperative officer constitute an intra-cooperative controversy,
jurisdiction over which belongs to the RTCs.
A cooperative, as defined under PD 269 refers to a “corporation organized under RA 6038.” Even without
choosing to convert and register as a stock corporation before the SEC, electric cooperatives already enjoy
powers and corporate existence akin to a corporation. As a rule, the illegal dismissal of an officer or other
employee of a private employer is properly cognizable by the labor arbiter pursuant to Article 217 (a) 2 of the
Labor Code, as amended. By way of exception, where the complaint for illegal dismissal involves a corporate
officer, the controversy falls under the jurisdiction of the SEC (now RTC), because the controversy arises out of
intra-corporate or partnership relations.
3. Proceedings before the Labor Arbiter

A. Construction of the Rules and suppletory application of the Rules of Court
81. Beltran v. AMA Computer College GR NO. 223795 April 3, 2019

The quantum of proof necessary to establish one's claims in labor and administrative cases is substantial
evidence, or such amount of relevant evidence which a reasonable mind might accept as adequate to justify a
conclusion even if other equally reasonable minds might conceivably opine otherwise. Contrary to the findings of
the NLRC and CA, the Court holds that the affidavits and other supporting documents submitted by petitioner
substantially proved that AMA had a consistent company practice of granting early retirement to its employees
who have rendered at least 10 years of service.
The NLRC is allowed more latitude in the application of its rules. Technical rules of procedure may be relaxed in
the interest of substantial justice and to assist the parties in obtaining just, expeditious and inexpensive resolution
and settlement of labor disputes. Subject to rules of reason and fair play, this liberal policy of procedural rules is
qualified by two requirements: (1) a party should adequately explain any delay in the submission of evidence; and
(2) a party should sufficiently prove the allegations sought to be proven.
82. Daikoku Electronics v. Raza GR NO. 181688 June 5, 2009

Section 15, Rule VII of the NLRC 2005 Rules of Procedure pertinently provides:
SEC. 15. Motions For Reconsideration. — Motions for reconsideration of any decision, resolution or order of the Commission shall
not be entertained except when based on palpable or patent errors; provided that the motion is . . .fi led within ten (10) calendar days
24
from receipt of decision, resolution or order, with proof of service that a copy of the same has been furnished, within the
reglementary period, the adverse party; and provided further, that only one such motion from the same party shall be entertained.
The relaxation of procedural rules cannot be made without any valid reasons proffered for or underpinning it. To
merit liberality, petitioner must show reasonable cause justifying its non-compliance with the rules and must
convince the Court that the outright dismissal of the petition would defeat the administration of substantive justice.
The bare invocation of "the interest of substantial justice" line is not some magic wand that will automatically
compel this Court to suspend procedural rules. Procedural rules are not to be belittled, let alone dismissed simply
because their non-observance may have resulted in prejudice to a party's substantial rights.
B. Pleadings, notices, and appearances

i. Complaint

83. Samar-Med Distribution v. NLRC GR NO. 162385 July 15, 2013
The complaint is a mere checklist of possible causes of action that he might have against the defendant.. The
non-inclusion in the complaint of the issue on the dismissal did not necessarily mean that the validity of the
dismissal could not be an issue.
The rules of the NLRC require the submission of verified position papers by the parties should they fail to agree
upon an amicable settlement, and bar the inclusion of any cause of action not mentioned in the complaint or
position paper from the time of their submission by the parties. In view of this, Gutang's cause of action should be
ascertained not from a reading of his complaint alone but also from a consideration and evaluation of both his
complaint and position paper.
84. Our Haus Realty Development Corporation v. Parian GR NO. 204651 August 6, 2014
A claim not raised in the pro forma complaint may still be raised in the position paper. The Court agree with the
CA that such omission does not bar the labor tribunals from touching upon this cause of action since this was
raised and discussed in the respondents’ position paper. The rules of the NLRC require the submission of verified
position papers by the parties should they fail to agree upon an amicable settlement, and bar the inclusion of any
cause of action not mentioned in the complaint or position paper from the time of their submission by the parties.
As such, the cause of action should be ascertained not from a reading of the complaint alone but also from a
consideration and evaluation of both the complaint and position paper.
85. Dee Jay’s Inn v. Raneses GR NO. 191823 October 5, 2016

Rule V Sec. 4 of the NLRC Rules of Procedure provides that the Labor Arbiter shall direct both parties to submit
simultaneously their ostion papers with supporting documents and affidavits within an inextendible period of 10
days from notice of termination of the mandatory conference. These verified position papers to be submitted shall
cover only those claims and causes of action raised in the complaint excluding those that may have been
amicably settled, and shall be accompanied by all supporting documents including the affidavits of their respective
witnesses which shall take the place of the latter's direct testimony.
The complaint is not the only document from which the complainant's cause of action is determined in a labor
case. Any cause of action that may not have been included in the complaint or position paper, can no longer be
alleged after the position paper is submitted by the parties. In other words, the filing of the position paper is the
operative act which forecloses the raising of other matters constitutive of the cause of action. This necessarily
implies that the cause of action is finally ascertained only after both the complaint and position paper are properly
evaluated.
ii. Filing and service of pleadings

86. Charter Chemical v. Tan GR NO. 163891 May 21, 2009
The established rule is that the date of delivery of pleadings to a private letter-forwarding agency is not to be
considered as the date of filing thereof in court, and that in such cases, the date of actual receipt by the court, and
not the date of delivery to the private carrier, is deemed the date of filing of that pleading. When such was not
25
made within the reglementary period to perfect an appeal, it renders the assailed decision final and executory and
deprives the appellate court of jurisdiction to alter the judgment, much less to entertain the appeal. The 10-day
reglementary period to perfect an appeal is mandatory and jurisdictional in nature.
iii. Services of notices, resolutions, and orders

87. Sy v. Fairland Knitcraft GR NO. 182915 December 12, 2011
Article 224 contemplates the furnishing of copies of final decisions, orders or awards both to the parties and their
counsel in connection with the execution of such final decisions, orders or awards. However, for the purpose of
computing the period for filing an appeal from the NLRC to the CA, same shall be counted from receipt of the
decision, order or award by the counsel of record pursuant to the established rule that notice to counsel is notice
to party. Therefore, the reckoning period for their finality is likewise the counsel's date of receipt thereof, if a party
is represented by counsel. Hence, the date of receipt referred to in Sec. 14, Rule VII of the then in force New
Rules of Procedure of the NLRC which provides that decisions, resolutions or orders of the NLRC shall become
executory after 10 calendar days from receipt of the same, refers to the date of receipt by counsel.
iv. Appearances and authority to bind

88. Gudez v. NLRC GR NO. 83023 March 23, 1990
administrative and quasi-judicial bodies like the NLRC are not bound by the technical rules of procedure in the
adjudication of cases. However, the rule on substitution of counsel or employment of additional counsel is still
observed in labor cases. Thus, there can be no valid substitution of counsel until the prescribed procedure is
followed, to wit:
1) there must be filed a written application for substitution;
2) there must be filed the written consent of the client to the substitution;
3) there must be filed the written consent of the attorney to be substituted, if such consent can be obtained;
and
4) in case such written consent cannot be procured, there must be filed with the application for substitution,
proof of the service of notice of such motion in the manner required by the rules on the attorney to be
substituted.
If it is not shown that the above procedure had been complied with, there was no valid substitution of counsel and
hence the counsel for respondent RAPSA is not authorized to appeal for and in behalf of respondent Crisologo.
C. Venue

89. Philtranco Service Enterprises v. NLRC GR NO. 124100 April 1, 1998
The Court has previously declared that the question of venue essentially pertains to the trial and relates more to
the convenience of the parties rather than upon the substance and merits of the case. Provisions on venue are
intended to assure convenience for the plaintiff and his witnesses and to promote the ends of justice. In fact,
Section 1(a), Rule IV of the New Rules of Procedure of the NLRC, speaks of the complainant/petitioner's
workplace, evidently showing that the rule is intended for the exclusive benefit of the worker. This being the case,
the worker may waive said benefit. Furthermore, the aforesaid Section has been declared by this Court to be
merely permissive. Said section uses the word "may," allowing a different venue when the interests of substantial
justice demand a different one.
D. Consolidation of cases

E. Issuance and service of summons
i. Contents of summons
ii. How summons is effected
iii. Validity of Summons

26
90. Pabon v. NLRC GR NO. 120457 September 24, 1998
Courts acquire jurisdiction over the person of a party-defendant by virtue of the service of summons in the manner
required by law. In the case at bar, although as a rule, modes of service of summons are strictly followed in order
that the court may acquire jurisdiction over the person of a defendant, such procedural modes, however, are
liberally construed in quasi-judicial proceedings, as in this case, substantial compliance with the same being
considered adequate. The rationale of all rules with respect to service of process on a corporation is that such
service must be made to an agent of a representative so integrated with the corporation sued as to make it a priori
supposable that he will realize his responsibilities and know what he should do with any legal papers served on
him.
A bookkeeper can be considered as an agent of private respondent corporation within the purview of Section 13,
Rule 14 of the old Rules of Court. Although it may be true that the service of summons was made on a person not
authorized to receive the same in behalf of the petitioner, nevertheless since it appears that the summons and
complaint were in fact received by the corporation through its said clerk, the Court finds that there was a
substantial compliance with the rule on service of summons. Indeed the purpose of said rule as above stated to
assure service of summons on the corporation had thereby been attained. The need for speedy justice must
prevail over technicality.
91. Masagana Concrete Products v. NLRC GR NO. 106916 September 3, 1999

The registry return receipt states that "a registered article must not be delivered to anyone but the addressee, or
upon the addressee's written order." Thus, the persons who received the notice were presumably able to present
a written authorization to receive the same and we can assume that the notices were duly received in the ordinary
course of events.
It is a legal presumption, born of wisdom and experience, that official duty has been regularly performed; that the
proceedings of a judicial tribunal are regular and valid, and that judicial acts and duties have been and will be duly
and properly performed. The burden of proving the irregularity in official conduct, if any, is on the part of
petitioners who in this case clearly failed to discharge the same. The return is prima facie proof of the facts
indicated therein and service by registered mail is deemed completed even only upon receipt by an agent of the
addressee. There was then sufficient compliance with the procedure for service of summons and/or notices of the
scheduled hearings upon the petitioners.
92. Landbank v. Heris Alsua GR NO. 167361 April 2, 2007

All that the rules of procedure require in regard to service by registered mail is to have the postmaster deliver the
same to the addressee himself or to a person of sufficient discretion to receive the same. The paramount
consideration is that the registered mail is delivered to the recipient’s address and received by a person who
would be able to appreciate the importance of the papers delivered to him, even if that person is not a subordinate
or employee of the recipient or authorized by a special power of attorney.
In this case, case, the receipt by the security guard of the order of dismissal should be deemed receipt by
petitioner’s counsel as well. Petitioner’s admission that there were instances in the past when the security guard
received notices for petitioner LBP only underscores the fact that the security guard who received the order of
dismissal fully realized his responsibility to deliver the mails to the intended receipient, as it did without delay.
93. Oyster Plaza Hotel v. Melivo GR NO. 217455 October 5, 2016

In quasi-judicial proceedings before the NLRC and its arbitration branch, procedural rules governing service of
summons are not strictly construed. Substantial compliance thereof is sufficient. The constitutional requirement of
due process with respect to service of summons only exacts that the service of summons be such as may
reasonably be expected to give the notice desired. Once the service provided by the rules reasonably
accomplishes that end, the requirement of justice is answered, the traditional notion of fair play is satisfied, and
due process is served.
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In this case, the summons and notices were served by registered mail at the petitioners' place of business. Thus,
the person who received the same was presumed authorized to do so. Consequently, the summons and notices
were presumed to be duly served. The burden of proving the irregularity in the service of summons and notices, if
any, is on the part of the petitioners. In this case, the petitioners clearly failed to discharge that burden.

F. Prohibited Pleadings and Motions

G. Motion to dismiss

H. Mandatory Concilliation and Mediation Conference (Sec. 8, Rule V)

I. Amendment of Complaint/Petition

J. Submission of Position Papers and reply
i. Effect of failure to file
ii. Contents of position paper and reply

94. Magnolia Corporation v. NLRC GR NO. 116813 November 24, 1995
The New Rules of Procedure of the NLRC prohibit parties from making new allegations or cause of action not
included in the complaint or position papers, affidavits and other documents. In the instant case, private
respondent raised the issue of unfair labor practice only after the parties have submitted their respective position
papers.
Verified position papers shall cover only those claims and causes of action raised in the complaint excluding those
that may have been amicably settled,and shall be accompanied by all supporting documents including the
affidavits of their respective witnesses which shall take the place of the latter's direct testimony. The parties shall
thereafter not be allowed to allege facts, or present evidence to prove facts, not referred to and any cause or
causes of action not included in the complaint or position papers, affidavits and other documents. Unless
otherwise requested in writing by both parties to submit simultaneously their position papers/memorandum with
the supporting documents and affidavits within fifteen (15) calendar days from the date of the last conference, with
proof of having furnished each other with copies thereof.” Petitioners cannot be found guilty of unfair labor
practice on the basis of an allegation sneaked in the Reply of the private respondent, for such charge cannot be
taken lightly, as it entails violations not only of the civil rights but are also criminal offenses subject to prosecution
and punishment.
K. Hearing or Clarificatory Conference

L. Death of Parties

95. Fontana Development Corporation v. Vukasinovic GR NO. 222424 September 21,
2016
An illegal dismissal is an action that does not survive the death of the accused.
The question as to whether an action survives or not depends on the nature of the action and the damage sued
for. In the causes of action which survive, the wrong complained [of] affects primarily and principally property and
property rights, the injuries to the person being merely incidental, while in the causes of action which do not
survive, the injury complained of is to the person, the property and rights of property affected being incidental.
Since the property and property rights of the respondent is only incidental to his complaint for illegal dismissal, the
same does not survive his death.
E. National Labor Relations Commission (NLRC)

1. Powers of the Commission (Art. 225)
28

96. Robosa v. NLRC GR NO. 176085 February 8, 2012
Under Article 218 of the Labor Code, the NLRC (and the labor arbiters) may hold any offending party in contempt,
directly or indirectly, and impose appropriate penalties in accordance with law. The penalty for direct contempt
consists of either imprisonment or fine, the degree or amount depends on whether the contempt is against the
Commission or the labor arbiter. The Labor Code, however, requires the labor arbiter or the Commission to deal
with indirect contempt in the manner prescribed under Rule 71 of the Rules of Court.
Rule 71 of the Rules of Court does not require the labor arbiter or the NLRC to initiate indirect contempt
proceedings before the trial court. This mode is to be observed only when there is no law granting them contempt
powers. As is clear under Article 218(d) of the Labor Code, the labor arbiter or the Commission is empowered or
has jurisdiction to hold the offending party or parties in direct or indirect contempt.
Contempt is still a criminal proceeding in which acquittal, for instance, is a bar to a second prosecution. The
distinction is for the purpose only of determining the character of punishment to be administered. Dismissal of a
contempt charge then is not appealable.
97. Yupangco Cotton Mills v. CA GR NO. 126322 January 16, 2002

A third party whose property has been levied upon by a sheriff to enforce a decision against a judgment debtor is
afforded with several alternative remedies to protect its interests. The third party may avail himself of alternative
remedies cumulatively, and one will not preclude the third party from availing himself of the other alternative
remedies in the event he failed in the remedy first availed of. Thus, a third party may avail himself of the following
alternative remedies:
a) File a third party claim with the sheriff of the Labor Arbiter, and
b) If the third party claim is denied, the third party may appeal the denial to the NLRC.
The remedies above mentioned are cumulative and may be resorted to by a third-party claimant independent of or
separately from and without need of availing of the others. If a third-party claimant opted to file a proper action to
vindicate his claim of ownership, he must institute an action, distinct and separate from that in which the judgment
is being enforced, with the court of competent jurisdiction even before or without need of filing a claim in the court
which issued the writ, the latter not being a condition sine qua non for the former.
98. Ando v. Campo GR NO. 184007 February 16, 2011

Re: jurisdiction over third party claims
Regular courts have no jurisdiction to hear and decide questions which arise from and are incidental to the
enforcement of decisions, orders, or awards rendered in labor cases by appropriate officers and tribunals of the
Department of Labor and Employment. To hold otherwise is to sanction splitting of jurisdiction which is obnoxious
to the orderly administration of justice. The subject matter of petitioner's complaint is the execution of the NLRC
decision. Execution is an essential part of the proceedings before the NLRC. Jurisdiction, once acquired,
continues until the case is finally terminated, and there can be no end to the controversy without the full and
proper implementation of the commission's directives.
ART. 254. INJUNCTION PROHIBITED. - No temporary or permanent injunction or restraining order in any case involving or growing
out of labor disputes shall be issued by any court or other entity, except as otherwise provided in Articles 218 and 264 of this Code.
Re: extent of execution of judgement

The power of the NLRC to execute its judgment extends only to properties unquestionably belonging to the
judgment debtor alone. Thus, a sheriff has no authority to attach the property of any person except that of the
judgment debtor.
2. Exclusive original jurisdiction
A. Petition for injunction in ordinary labor disputes [Art. 225(e)]
29
99. PAL v. NLRC GR NO. 120567 March 20, 1998
Generally, injunction is a preservative remedy for the protection of one's substantive rights or interest. It is not a
cause of action in itself but merely a provisional remedy, an adjunct to a main suit. The essential conditions for
granting such temporary injunctive relief are:
a) that the complaint alleges facts which appear to be sufficient to constitute a proper basis for injunction
and
b) that on the entire showing from the contending parties, the injunction is reasonably necessary to protect
the legal rights of the plaintiff pending the litigation.
Article 218 of the Labor Code empowers the NLRC “[t]o enjoin or restrain any actual or threatened commission of
any or all prohibited or unlawful acts or to require the performance of a particular act i n any labor dispute which, if
not restrained or performed forthwith, may cause grave or irreparable damage to any party or render ineffectual
any decision in favor of such party; . . ."
Sec. 1, Rule XI of the New Rules of Procedure of the NLRC, pertinently provides as follows: A preliminary
injunction may be granted when it is established on the bases of the sworn allegations in the petition that the acts
complained of, involving or arising from any labor dispute before the Commission, which, if not restrained or
performed forthwith, may cause grave or irreparable damage to any party or render ineffectual any decision in
favor of such party and that it may be exercised by the Labor Arbiter only as an incident to the cases pending
before them in order to preserve the rights of the parties during the pendency of the case, but excluding labor
disputes involving strikes or lockout.
Taking into account the foregoing definitions, it is an essential requirement that there must first be a labor dispute
between the contending parties before the labor arbiter. Article 218(e) then of the Labor Code does not provide
blanket authority to the NLRC or any of its divisions to issue writs of injunction, considering that Section 1 of Rule
XI of the New Rules of Procedure of the NLRC makes injunction only an ancillary remedy in ordinary labor
disputes." NLRC has only exclusive appellate jurisdiction over all cases decided by the labor arbiters in their
exclusive and original jurisdiction; and NLRC can only issue injunction in labor disputes before it.
100. Frondozo v. Meralco GR NO. 178379 August 22, 2017

There are instances when writs of execution may be assailed. They are:
1) the writ of execution varies the judgment;
2) there has been a change in the situation of the parties making execution inequitable or unjust;
3) execution is sought to be enforced against property exempt from execution;
4) it appears that the controversy has been submitted to the jThe perfection of an appeal is a mandatory
requirement, which cannot be trifled as a mere technicality to suit the interest of a partyudgment of the
court;
5) the terms of the judgment are not clear enough and there remains room for interpretation thereof; or
6) it appears that the writ of execution has been improvidently issued, or that it is defective in substance, or
issued against the wrong party, or that the judgment debt has been paid or otherwise satisfied, or the writ
was issued without authority.
101. Bisig Manggagawa sa Concrete Aggregates v. NLRC GR NO. 105090 September 16,
1993
The issuance of an ex parte temporary restraining order in a labor dispute is not per se prohibited. Its issuance,
however, should be characterized by care and caution for the law requires that it be clearly justified by
considerations of extreme necessity, i.e., when the commission of unlawful acts is causing substantial and
irreparable injury to company properties and the company is, for the moment, bereft of an adequate remedy at
law. This is as it ought to be, for imprudently issued temporary restraining orders can break the back of
employees engaged in a legal strike.
The substantive and procedural requirements under Art. 218(e) of the Labor Code must be strictly complied with
before a temporary or permanent injunction can issue in a labor dispute, viz:
30
1) That prohibited or unlawful acts have been threatened and will be committed and will be continued unless restrained but no
injunction or temporary restraining order shall be issued on account of any threat, prohibited or unlawful act, except against the
person or persons, association or organization making the threat or committing the prohibited or unlawful act or actually authorizing
or ratifying the same after actual knowledge thereof;
2) That substantial and irreparable injury to complainants property will follow;
3) That as to each item of relief to be granted, greater injury will be inflicted upon complainant by the denial of relief than will be inflicted
upon defendants by the granting of relief
4) complainant has no adequate remedy at law; and
5) That the public officers charged with the duty to protect complainants property are unable or unwilling to furnish adequate protection.
Such hearing shall be held after due and personal notice thereof has been served, in such manner as the Commission shall direct,
to all known persons against whom relief is sought, and also to the Chief Executive and other public officials of the province or city
within which the unlawful have been threatened or committed charged with the duty to protect complainant's property x x x”
B. Petition for Injunction in strikes and lockouts

C. Certified Cases (Rule VIII, NLRC Rules of Procedure)

3. Exclusive Appellate Jurisdiction
A. Appeal in Contempt Cases before the Labor Arbiter
B. Appeal in small money claims resolved by the DOLE Regional Director or hearing officer
C. Appeal in cases decided by the Labor Arbiter

4. Grounds for Appeal

5. Requisites for perfecting an appeal
A. Filed within the reglementary period

102. Calipay v. NLRC GR NO. 166411 August 3, 2010
It is doctrinally entrenched that appeal is not a constitutional right, but a mere statutory privilege. Hence, parties
who seek to avail themselves of it must comply with the statutes or rules allowing it.Procedural rules setting the
period for perfecting an appeal or filing a petition for review are generally inviolable. The perfection of an appeal in
the manner and within the period permitted by law is not only mandatory, but also jurisdictional. Failure to perfect
the appeal renders the judgment of the court final and executory. It is true that procedural rules may be waived or
dispensed with in the interest of substantial justice. This Court may deign to veer away from the general rule if, on
its face, the appeal appears to be absolutely meritorious.
103. Building Care Corporation v. Macaraeg GR NO. 198357 December 10, 2012
The relaxation of procedural rules in the interest of justice was never intended to be a license for erring litigants to
violate the rules with impunity. Liberality in the interpretation and application of the rules can be invoked only in
proper cases and under justifiable causes and circumstances. In Gaudiano v Benemerito, the Court held that the
perfection of an appeal within the period and in the manner prescribed by law is jurisdictional and non-compliance
with such legal requirements is fatal and has the effect of rendering the judgment final and executory. The
limitation on the period of appeal is not without reason. They must be strictly followed as they are considered
indispensable to forestall or avoid unreasonable delays in the administration of justice, to ensure an orderly
discharge of judicial business, and to put an end to controversies.
Clearly, allowing an appeal, even if belatedly filed, should never be taken lightly. The judgment attains finality by
the lapse of the period for taking an appeal without such appeal or motion for reconsideration being filed.
B. Verified by the appellant himself/herself in accordance with Sec. 4 Rule 7 of the Rules of Court

104. Innodata Knowledge Services, Inc. v. Inting GR NO. 211892 December 6, 2017
The Court has previously set the guidelines pertaining to non-compliance with the requirements on, or submission
of defective, verification and certification against forum shopping:
31
1) A distinction must be made between non-compliance with the requirement on or submission of defective
verification, and noncompliance with the requirement on or submission of defective certification against
forum shopping;
2) As to verification, non-compliance therewith or a defect therein does not necessarily render the pleading
fatally defective. The court may order its submission or correction, or act on the pleading if the attending
circumstances are such that strict compliance with the Rule may be dispensed with in order that the ends
of justice may be served;
3) Verification is deemed substantially complied with when one who has ample knowledge to swear to the
truth of the allegations in the complaint or petition signs the verification, and when matters alleged in the
petition have been made in good faith or are true and correct;
4) As to certification against forum shopping, non-compliance therewith or a defect therein, unlike in
verification, is generally not curable by its subsequent submission or correction thereof, unless there is a
need to relax the Rule on the ground of substantial compliance or the presence of special circumstances
or compelling reasons;
5) The certification against forum shopping must be signed by all the plaintiffs or petitioners in a case;
otherwise, those who did not sign will be dropped as parties to the case. Under reasonable or justifiable
circumstances, however, as when all the plaintiffs or petitioners share a common interest and invoke a
common cause of action or defense, the signature of only one of them in the certification against forum
shopping substantially complies with the Rule; and
6) Finally, the certification against forum shopping must be executed by the party pleader, not by his
counsel. If, however, for reasonable or justifiable reasons, the party-pleader is unable to sign, he must
execute a Special Power of Attorney designating his counsel of record to sign on his behalf.
In the case at hand, only twelve (12) of respondents were able to sign the Verification and Certification Against
Forum Shopping since they were only given ten (10) days from the receipt of the LA's decision to perfect an
appeal. Some of them were even no longer based in Cebu City. But it does not mean that those who failed to sign
were no longer interested in pursuing their case. In view of the circumstances of this case and the substantive
issues raised by respondents, the Court finds justification to liberally apply the rules of procedure to the present
case.
C. Memorandum of appeal stating the grounds of the appeal, arguments, relief sought, and date of receipt of the appealed
decision, award, or oder.

D. Proof of payment of appeal fee and legal research fee

105. Luna v. NLRC GR NO. 116404 March 20, 1997
Under the rules of the NLRC, an appeal from the Labor Arbiter's decision to the NLRC may be taken
1) by filing a verified memorandum of appeal; and
2) by paying the appeal fees filed within ten (10) calendar days from receipt of a decision, award or order of
the Labor Arbiter.
Both requisites must be satisfied, otherwise the running of the prescriptive period for perfecting an appeal will not
be tolled. Records do not support that petitioners paid the appeal fees on April 26, 1993 together with the filing of
their appeal memorandum. What appears instead is that they paid the fees only on May 5, 1993, nine days after
the expiration date of the reglementary period, As payment of the requisite appeal fees is an indispensable and
jurisdictional requisite and not a mere technicality of law or procedure, and as the failure to comply with this
requirement renders the decision of the court final, we hold that the NLRC correctly dismissed petitioners' appeal.
Indeed, appeal is only a statutory privilege and therefore it may only be exercised in the manner provided by law.
E. Posting of an appeal bond

106. Toyota Alabang v. Games GR NO. 206612 August 17, 2005
Article 223 of the Labor Code and Section 6, Rule VI of the 2011 NLRC Rules of Procedure, uniformly state thus:
32
In case the decision of the Labor Arbiter or the Regional Director involves a monetary award, an appeal by the employer
may be perfected only upon the posting of a bond, which shall either be in the form of cash deposit or surety bond
equivalent in amount to the monetary award, exclusive of damages and attorney's fees.
Evidently, the above rules do not limit the appeal bond requirement only to certain kinds of rulings of the LA.
Rather, these rules generally state that in case the ruling of the LA involves a monetary award, an employer's
appeal may be perfected only upon the posting of a bond. Therefore, absent any qualifying terms, so long as the
decision of the LA involves a monetary award, as in this case, that ruling can only be appealed after the employer
posts a bond. If to construe otherwise, then an aggrieved party may simply seek the quashal of a writ of
execution, instead of going through the normal modes of appeal, to altogether avoid paying for an appeal bond.
Re: Finality of judgement

Jurisprudence dictates that a final and executory decision of the LA can no longer be reversed or modified. After
all, just as a losing party has the right to file an appeal within the prescribed period, so does the winning party
have the correlative right to enjoy the finality of the resolution of the case.
107. GBMLT Manpower v. Malinao GR NO. 189262 July 6, 2015

In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the
posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in
the amount equivalent to the monetary award in the judgment appealed from The requirement of an appeal bond
is further emphasized in Section 6, Rule VI of the 2011 NLRC Rules of Procedure. This provision clarifies that
damages and attorney's fees awarded by the labor arbiter shall not be included in the computation of the bond to
be posted.
In several pronouncements, this Court has adopted a particular understanding of the word "only" in the phrase "an
appeal by the employer may be perfected only upon the posting of a cash or surety bond." It has regarded the
phrase as the legislative's unequivocal declaration that the posting of a cash or surety bond is the exclusive
means by which an employer's appeal from a labor arbiter's decision may be perfected. Jurisprudence dictates
that the appeal bond requirement for judgments involving monetary awards may be relaxed in meritorious cases,
as in instances when a liberal interpretation would serve the desired objective of resolving controversies on the
merits. In this case, the Court noted that its payment of the appeal bond through the issuance of a check was not
even an issue before the NLRC. The latter had given due course to petitioner's appeal without any indication of
having found any defect in the appeal bond posted. Hence, the appeal has been perfected by virtue of its
compliance with the appeal bond requirement.
108. Orozco v. CA GR NO. 155207 April 29, 2005

As a rule, compliance with the requirements for the perfection of an appeal within the reglementary period is
mandatory and jurisdictional. However, in National Federation of Labor Unions v. Ladrido as well as in several
other cases, the Court postulated that "private respondents cannot be expected to post such appeal bond
equivalent to the amount of the monetary award when the amount thereof was not included in the decision of the
labor arbiter." The computation of the amount awarded to petitioner not having been clearly stated in the decision
of the labor arbiter, private respondents had no basis for determining the amount of the bond to be posted. While
the posting of a cash or surety bond is jurisdictional and is a condition sine qua non to the perfection of an appeal,
there is a plethora of jurisprudence recognizing exceptional instances wherein the Court relaxed the bond
requirement as a condition for posting the appeal.
109. Lepanto Consolidated Mining v. Icao GR NO. 196047 January 15, 2014
Instead of posting a cash or surety bond, Petitioner filed a Consolidated Motion praying that the cash bond it had
previously posted in another labor case be released and applied to the present one. Under the Rule VI, Section 6
of the 2005 NLRC Rules, "a cash or surety bond shall be valid and effective from the date of deposit or posting,
until the case is finally decided, resolved or terminated, or the award satisfied." Hence, it is clear that a bond is
encumbered and bound to a case only for as long as:
1) the case has not been finally decided, resolved or terminated; or
33
2) the award has not been satisfied. Therefore, once the appeal is finally decided and no award needs to be
satisfied, the bond is automatically released.
Since the money is now unencumbered, the employer who posted it should now have unrestricted access to the
cash which he may now use as he pleases as appeal bond in another case, for instance. This is what petitioner
simply did. when the law does not clearly provide a rule or norm for the tribunal to follow in deciding a question
submitted, but leaves to the tribunal the discretion to determine the case in one way or another, the judge must
decide the question in conformity with justice, reason and equity, in view of the circumstances of the case. There
is substantial compliance with the mandatory requirements of posting an appeal bond.
110. Forever Security v. Flores GR NO. 147961 September 7, 2007

The requirement of a cash or surety bond for the perfection of an appeal from the Labor Arbiter's monetary award
is not only mandatory but jurisdictional as well, and noncompliance therewith is fatal and has the effect of
rendering the award final and executory. The logical purpose of an appeal bond is to insure, during the period of
appeal, against any occurrence that would defeat or diminish recovery under the judgment if subsequently
affirmed; it also validates and justifies, at least prima facie, an interpretation that would limit the amount of the
bond to the aggregate of the sums awarded other than in the concept of moral and exemplary damages.
111. UERM Memorial Medical Center v. NLRC GR NO. 110419 March 3, 1997
The intention of the lawmakers to make the bond an indispensable requisite for the perfection of an appeal by the
employer is underscored by the provision that an appeal by the employer may be perfected "only upon the posting
of a cash or surety bond." The word "only" makes it perfectly clear, that the lawmakers intended the posting of a
cash or surety bond by the employer to be the exclusive means by which an employer's appeal may be perfected.
However, it is the current policy is not to strictly follow technical rules but rather to take into account the spirit and
intention of the Labor Code. In the case at bar, the real property bond posted by petitioners sufficiently protects
the interests of private respondents should they finally prevail.
112. Manila Mining Co. v. Amor GR NO. 182800 April 20, 2015
Section 6, Rule VI of the NLRC Rules of Procedure provides that no motion to reduce bond shall be entertained
except on meritorious grounds and upon the posting of a bond in a reasonable amount in relation to the monetary
award. The filing of the motion to reduce bond without compliance with the requisites in the preceding paragraph
shall not stop the running of the period to perfect an appeal.
Respondent correctly called attention to the fact that the check submitted by petitioner was dishonored upon
presentment for payment, thereby rendering the tender thereof ineffectual. Having filed its motion and
memorandum on the very last day of the reglementary period for appeal, moreover, petitioner had no one but
itself to blame for failing to post the full amount pending the NLRC’s action on its motion for reduction of the
appeal bond.
113. Banahaw Broadcasting v. Pacana GR NO. 171673 May 30, 2011

Re: requirement to a GOCC to post appeal bond
As a general rule, the government and all the attached agencies with no legal personality distinct from the former
are exempt from posting appeal bonds, whereas government-owned and controlled corporations (GOCCs) are not
similarly exempted. When the State litigates, it is not required to put up an appeal bond because it is presumed to
be always solvent. This exemption, however, does not, as a general rule, apply to GOCCs for the reason that the
latter has a personality distinct from its shareholders. Thus, while a GOCC’s majority stockholder, the State, will
always be presumed solvent, the presumption does not necessarily extend to the GOCC itself.
However, when a GOCC becomes a "government machinery to carry out a declared government policy,” it
becomes similarly situated as its majority stockholder as there is the assurance that the government will
necessarily fund its primary functions. Thus, a GOCC that is sued in relation to its governmental functions may be,
under appropriate circumstances, exempted from the payment of appeal fees. Here, petitioner was organized as a
34
private corporation, sequestered in the 1980’s and the ownership of which was subsequently transferred to the
government. Its primary function is to engage in commercial radio and television broadcasting, a purely
commercial or proprietary one and not governmental. As such, BBC cannot be deemed entitled to an exemption
from the posting of an appeal bond.
Re: Motion for Recomputation

The posting of the appeal bond within the period provided by law is not merely mandatory but jurisdictional. The
failure on the part of BBC to perfect the appeal thus had the effect of rendering the judgment final and executory.
Neither was there an interruption of the period to perfect the appeal when BBC filed (1) its Motion for the
Recomputation of the Monetary Award in order to reduce the appeal bond, and (2) its Motion for Reconsideration
of the denial of the same. In the case at bar, BBC already took a risk when it filed its Motion for the
Recomputation of the Monetary Award without posting the bond itself.
114. McBurnie v. Ganzon GR NO. 178034 October 17, 2013

The Court must give utmost regard to the legislative and administrative intent to strictly require the employer to
post a cash or surety bond securing the full amount of the monetary award within the 10-day reglementary period.
However, there are two conditions where a bond may be reduced upon motion by the employer:
1) the motion to reduce the bond shall be based on meritorious grounds; and
2) a reasonable amount in relation to monetary award is posted by the appellant.
Guidelines that are applicable in the reduction of appeal bonds were also explained in Nicol v. Footjoy Industrial
Corporation.
The bond requirement in appeals involving monetary awards has been and may be relaxed in meritorious cases,
including instances in which:
1) there was substantial compliance with the Rules;
2) surrounding facts and circumstances constitute meritorious grounds to reduce the bond;
3) a liberal interpretation of the requirement of an appeal bond would serve the desired objective of resolving
controversies on the merits; or
4) the appellants, at the very least, exhibited their willingness and/or good faith by posting a partial bond
during the reglementary period.
The filing of a motion to reduce bond, coupled with compliance with the two conditions shall suffice to suspend the
running of the period to perfect an appeal from the labor arbiter’s decision to the NLRC. For purposes of
determining a “meritorious ground”, the NLRC is not precluded from receiving evidence, or making a preliminary
determination of the merits of the appellant’s contentions. It is discretionary for the court to accept the merit of the
grounds. What constitutes a “reasonable amount” of the bond shall be based primarily on the merits of the motion
and the main appeal.
To ensure that the provisions of Section 6, Rule VI of the NLRC Rules of Procedure that give parties the chance
to seek a reduction of the appeal bond are effectively carried out, without however defeating the benefits of the
bond requirement in favor of a winning litigant, all motions to reduce bond that are to be filed with the NLRC shall
be accompanied by the posting of a cash or surety bond equivalent to 10% of the monetary award that is subject
of the appeal, which shall provisionally be deemed the reasonable amount of the bond in the meantime that an
appellant motion is pending resolution by the Commission. The foregoing shall not be misconstrued to unduly
hinder the NLRC exercise of its discretion, given that the percentage of bond that is set by this guideline shall be
merely provisional. The NLRC retains its authority and duty to resolve the motion and determine the final amount
of bond that shall be posted by the appellant, still in accordance with the standards of meritorious grounds and
reasonable amount
115. Sara Lee Philippines v. Macatlang GR NO. 180147 January 14, 2015
The 10% requirement pertains to the reasonable amount which the NLRC would accept as the minimum of the
bond that should accompany the motion to reduce bond in order to suspend the period to perfect an appeal under
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the NLRC rules. The 10% is based on the judgment award and should in no case be construed as the minimum
amount of bond to be posted in order to perfect appeal.
The NLRC retains its authority and duty to resolve the motion and determine the final amount of bond that shall be
posted by the appellant, still in accordance with the standards of "meritorious grounds" and "reasonable amount."
Should the NLRC, after considering the motion’s merit, determine that a greater amount or the full amount of the
bond needs to be posted by the appellant, then the party shall comply accordingly. The appellant shall be given a
period of 10 days from notice of the NLRC order within which to perfect the appeal by posting the required appeal
bond.
116. AFP General Insurance Corporation v. Molina GR NO. 151133 June 30, 2008
The instant case pertains to a surety bond; thus, the applicable provision of the Insurance Code is Section 177,
which specifically governs suretyship. It provides that a surety bond, once accepted by the obligee becomes valid
and enforceable, irrespective of whether or not the premium has been paid by the obligor. The bond is both valid
and enforceable.
When petitioner surety company cancelled the surety bond because Radon Security failed to pay the premiums, it
gave due notice to the latter but not to the NLRC. By its failure to give notice to the NLRC, AFPGIC failed to
acknowledge that the NLRC had jurisdiction not only over the appealed case, but also over the appeal bond. This
oversight amounts to disrespect and contempt for a quasi-judicial agency tasked by law with resolving labor
disputes. Until the surety is formally discharged, it remains subject to the jurisdiction of the NLRC.
F. Proof of service upon the other parties

117. Sunrise Manning Agency v. NLRC GR NO. 146703 November 18, 2004
Re: propriety of appeal when no memorandum of appeal was served upon the opposing party
It has long been settled that mere failure to serve a copy of a memorandum of appeal upon the opposing party
does not bar the NLRC from entertaining an appeal. In its prior rulings, the Court ruled that the appellant's failure
to furnish copy of his memorandum appeal to respondent is not a jurisdictional defect, and does not justify
dismissal of the appeal. Thus, the failure to give a copy of the appeal to the adverse party was a mere formal
lapse, an excusable neglect.
Re: on allegations of lack of due process

Considering that the entire record of a case on appeal is open for review by the NLRC, and that herein petitioner
was afforded a fair opportunity to be heard when it filed a motion for reconsideration after receiving a copy of the
first NLRC resolution, it cannot validly claim that it was deprived of due process. In limiting its motion for
reconsideration to procedural issues, petitioner effectively waived its opportunity to be heard on the merits of the
case. It was thus not deprived of its right to due process
118. EDI Staffbuilders International v. NLRC GR NO. 145587 October 26, 2007
the doctrine that evolved from these cases is that failure to furnish the adverse party with a copy of the appeal is
treated only as a formal lapse, an excusable neglect, and hence, not a jurisdictional defect. Accordingly, in such a
situation, the appeal should not be dismissed; however, it should not be given due course either. As enunciated in
J.D. Magpayo v. NLRC, the duty that is imposed on the NLRC, in such a case, is to require the appellant to
comply with the rule that the opposing party should be provided with a copy of the appeal memorandum. While
Gran's failure to furnish EDI with a copy of the Appeal Memorandum is excusable, the abject failure of the NLRC
to order Gran to furnish EDI with the Appeal Memorandum constitutes grave abuse of discretion.
119. Fernandez v. Botica Claudio GR NO. 205870 13 August 2014

While Article 223 of the Labor Code and Section 3(a), Rule VI of the then New Rules of Procedure of the
NLRC[48] require the party intending to appeal from the LA's ruling to furnish the other party a copy of his
memorandum of appeal, the Court has held that the mere failure to serve the same upon the opposing party does
not bar the NLRC from giving due course to an appeal. Such failure is only treated as a formal lapse, an
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excusable neglect, and, hence, not a jurisdictional defect warranting the dismissal of an appeal. Instead, the
NLRC should require the appellant to provide the opposing party copies of the notice of appeal and memorandum
of appeal.
NLRC though could not be expected to require compliance from the petitioner, since it was not aware that the
respondent was not notified of her appeal; it cannot be faulted in relying with Fernandez’ representation that a
copy of memorandum was sent. Moreover, since it was undisputed that respondent eventually participated in the
appeal proceedings by filing not only one, but two MRs, thereby negating any supposed denial of due process on
her part.
6. Execution proceedings
A. Final and executory nature of NLRC Judgment
120. Molina v. Pacific Plans GR No. 165476 March 10, 2006

The Court finds that all pending actions in the instant case, including the execution of the judgment in favor of
petitioner, should be suspended pending termination of the rehabilitation proceedings.
Jurisprudence is settled that the suspension of proceedings referred to in the law uniformly applies to "all actions
for claims" filed against a corporation, partnership or association under management or receivership, without
distinction, except only those expenses incurred in the ordinary course of business. In the oft-cited case of
Rubberworld (Phils.) Inc. v. NLRC, the Court noted that aside from the given exception, the law is clear and
makes no distinction as to the claims that are suspended once a management committee is created or a
rehabilitation receiver is appointed. Since the law makes no distinction or exemptions, neither should this Court.
Ubi lex non distinguit nec nos distinguere debemos.
121. De Ocampo v. RPN-9 GR No. 192947 December 9, 2015

It is basic that a judgment can no longer be disturbed, altered, or modified as soon as it becomes final and
executory; "[n]othing is more settled in law." Once a case is decided with finality, "the controversy is settled and
the matter is laid to rest." Accordingly, a final judgment may no longer be modified in any respect "even if the
modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of
whether the modification is attempted to be made by the court rendering it or by the highest court of the land."
Once a judgment becomes final, the court or tribunal loses jurisdiction, and any modified judgment that it issues,
as well as all proceedings taken for this purpose, is null and void.
This rule, however, does admit of exceptions. As this court explained in Sacdalan v. Court of Appeals:
The only exceptions to the general rule are the correction of clerical errors, the so-called nunc pro tunc
entries which cause no prejudice to any party, void judgments, and whenever circumstances transpire
after the finality of the decision rendering its execution unjust and inequitable.
B. Reinstatement pending appeal in decisions rendered by the Labor Arbiter

122. Pioneer Texturizing Corp. v. NLRC GR No. 118651 October 16, 1997
The provision of Article 223 is clear that an award for reinstatement shall be immediately executory even pending
appeal and the posting of a bond by the employer shall not stay the execution for reinstatement. To require the
application for and issuance of a writ of execution as prerequisites for the execution of a reinstatement award
would certainly betray and run counter to the very object and intent of Article 223, i.e., the immediate execution of
a reinstatement order.
123. Triad Security & Allied Services v. Ortega GR No. 160871 February 6, 2006
In this case, the labor arbiter ordered the reinstatement of respondents and the payment of their backwages until
their actual reinstatement and in case reinstatement is no longer viable, the payment of separation pay. Under
Article 223 of the Labor Code, "the decision of the Labor Arbiter reinstating a dismissed or separated employee,
insofar as the reinstatement aspect is concerned, shall be immediately executory, even pending appeal." The
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same provision of the law gives the employer the option of either admitting the employee back to work under the
same terms and conditions prevailing before his dismissal or separation from employment or the employer may
choose to merely reinstate the employee to the payroll.
An order of reinstatement by the labor arbiter is not the same as actual reinstatement of a dismissed or separated
employee. Thus, until the employer continuously fails to actually implement the reinstatement aspect of the
decision of the labor arbiter, their obligation to respondents, insofar as accrued backwages and other benefits are
concerned, continues to accumulate. It is only when the illegally dismissed employee receives the separation pay
that it could be claimed with certainty that the employer-employee relationship has formally ceased thereby
precluding the possibility of reinstatement.
124. Roquero v. PAL GR No. 164856 January 20, 2009

The order of reinstatement is immediately executory. The unjustified refusal of the employer to reinstate a
dismissed employee entitles him to payment of his salaries effective from the time the employer failed to reinstate
him despite the issuance of a writ of execution. Unless there is a restraining order issued, it is ministerial upon the
Labor Arbiter to implement the order of reinstatement.
125. Garcia v. PAL GR No. 164856 January 20, 2009

After the Labor Arbiter's decision is reversed by a higher tribunal, the employee may be barred from collecting the
accrued wages, if it is shown that the delay in enforcing the reinstatement pending appeal was without fault on the
part of the employer.
The test is two-fold:

(1) there must be actual delay or the fact that the order of reinstatement pending appeal was not executed
prior to its reversal; and
(2) the delay must not be due to the employer's unjustified act or omission. If the delay is due to the
employer's unjustified refusal, the employer may still be required to pay the salaries notwithstanding the
reversal of the Labor Arbiter's decision.
While reinstatement pending appeal aims to avert the continuing threat or danger to the survival or even the life of
the dismissed employee and his family, it does not contemplate the period when the employer-corporation itself is
similarly in a judicially monitored state of being resuscitated in order to survive.
126. Pfizer v. Velasco GR No. 177467 March 9, 2011

The Court reiterates the principle that reinstatement pending appeal necessitates that it must be immediately
self-executory without need for a writ of execution during the pendency of the appeal, if the law is to serve its
noble purpose, and any attempt on the part of the employer to evade or delay its execution should not be allowed.
Furthermore, we likewise restate our ruling that an order for reinstatement entitles an employee to receive his
accrued backwages from the moment the reinstatement order was issued up to the date when the same was
reversed by a higher court without fear of refunding what he had received.
127. Wenphil Corporation v. Abing GR No. 207983 April 7, 2014

In the present case, the parties’ compromise agreement simply provided that Wenphil’s obligation to pay the
respondents’ backwages shall end the moment the NLRC modifies, amends or reverses the illegal dismissal
decision of LA Bartolabac. On its face, there is nothing invalid with such stipulation. Indeed, had the NLRC
reversed the LA, the obligation to pay backwages would have stopped. Even if the order of reinstatement of the
Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the dismissed
employee’s wages during the period of appeal until reversal by the higher court.
128. College of Immaculate Conception v. NLRC GR No. 167563 March 22, 2010
An employee cannot be compelled to reimburse the salaries and wages he received during the pendency of his
appeal, notwithstanding the reversal by the NLRC of the LA's order of reinstatement. In this case, there is even
more reason to hold the employee entitled to the salaries he received pending appeal, because the NLRC did not
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reverse the LA's order of reinstatement, but merely declared the correct position to which respondent is to be
reinstated, i.e., that of full-time professor, and not as Dean.
It bears stressing that the manner of immediate reinstatement, pending appeal, or the promptness thereof is
immaterial, as illustrated in the following two scenarios:
Situation No. 1. The LA ruled in favor of the dismissed employee and ordered his reinstatement.
However, the employer did not immediately comply with the LA's directive. On appeal, the NLRC reversed
the LA and found that there was no illegal dismissal. In this scenario, We ruled that the employee is
entitled to payment of his salaries and allowances pending appeal.
Situation No. 2. (As in the present case) The LA ruled in favor of the dismissed employee and ordered
the latter's reinstatement. This time, the employer complied by reinstating the employee in the payroll. On
appeal, the LA's ruling was reversed, finding that there was no case of illegal dismissal but merely a
temporary sanction, akin to a suspension. Here, We also must rule that the employee cannot be required
to reimburse the salaries he received because if he was not reinstated in the payroll in the first place, the
ruling in situation no. 1 will apply, i.e., the employee is entitled to payment of his salaries and allowances
pending appeal.
Thus, either way we look at it, at the end of the day, the employee gets his salaries and allowances pending
appeal. The only difference lies as to the time when the employee gets it.
129. Islriz Trading v. Capada GR No. 16501 January 21, 2011

Employees are entitled to their accrued salaries during the period between the Labor Arbiter's order of
reinstatement pending appeal and the resolution of the NLRC overturning that of the Labor Arbiter. Even if the
order of reinstatement of the Labor Arbiter is reversed on appeal, the employer is still obliged to reinstate and pay
the wages of the employee during the period of appeal until reversal by a higher court or tribunal.
It likewise settled the view that the LA's order of reinstatement is immediately executory and the employer has to
either re-admit them to work under the same terms and conditions prevailing prior to their dismissal, or to reinstate
them in the payroll, and that failing to exercise the options in the alternative, employer must pay the employee's
salaries. The two-fold test in determining whether an employee is barred from recovering his accrued wages, to
wit:
(1) there must be actual delay or that the order of reinstatement pending appeal was not executed prior to
its reversal; and
(2) the delay must not be due to the employer's unjustified act or omission.
If the delay is due to the employer's unjustified refusal, the employer may still be required to pay the salaries
notwithstanding the reversal of the LA's Decision.
130. Bergonio v. South East Asian Airlines GR No. 195227 April 21, 2014
The LA's order for the reinstatement of an employee found illegally dismissed is immediately executory even
during pendency of the employer's appeal from the decision. Under this provision, the employer must reinstate the
employee — either by physically admitting him under the conditions prevailing prior to his dismissal, and paying
his wages; or, at the employer's option, merely reinstating the employee in the payroll until the decision is
reversed by the higher court. Failure of the employer to comply with the reinstatement order, by exercising the
options rendered in the alternative, renders him liable to pay the employee’s salaries.
Hence, as a general rule, an employee may still recover the accrued wages up to and despite the reversal by the
higher tribunal. As an exception, an employee may be barred from collecting the accrued wages if shown that the
delay in enforcing the reinstatement pending appeal was without fault on the part of the employer. To determine
whether an employee is thus barred, two tests must be satisfied: (1) actual delay; and (2) the delay must not be
due to the employer’s unjustified act or omission.
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131. Manila Doctors College v. Olores GR No. 225044 October 3, 2016
In this case, petitioners contend that that they should not be faulted for failing to enforce the December 8, 2010
Decision of LA Amansec which had given respondent the option to receive separation pay in lieu of reinstatement
for the reason that it was respondent who failed to choose either relief. However, as above-discussed, the
reinstatement aspect of the LA's Decision is immediately executory and, hence, the active duty to reinstate the
employee - either actually or in payroll - devolves upon no other than the employer, even pending appeal.Thus,
while herein respondent may have been given an alternative option to instead receive separation pay in lieu of
reinstatement, there is no denying that, based on the provisions of the Labor Code and as attributed in
jurisprudence, it is his employer who should have first discharged its duty to reinstate him.
132. DUP Sound Philippines v. CA GR No. 168317 November 21, 2011

It is established in jurisprudence that reinstatement means restoration to a state or condition from which one had
been removed or separated. The person reinstated assumes the position he had occupied prior to his dismissal.
Reinstatement presupposes that the previous position from which one had been removed still exists, or that there
is an unfilled position which is substantially equivalent or of similar nature as the one previously occupied by the
employee.
Based on the foregoing principles, it cannot be said that petitioners intended to reinstate private respondent
neither to his former position under the same terms and conditions nor to a substantially equivalent position.
Indeed, as it turned out, petitioners had other plans for private respondent. Thus, private respondent's assignment
to a different job, as well as transfer of work assignment without any justification therefor, cannot be deemed as
faithful compliance with the reinstatement order.
Private respondent's refusal to report for work subsequent to the Labor Arbiter's issuance of an order for his
reinstatement be considered as another abandonment of his job. Failure to report for work after a notice to return
to work has been served does not necessarily constitute abandonment. As defined under established
jurisprudence, abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It
is a form of neglect of duty, hence, a just cause for termination of employment by the employer. Pial may not be
faulted for rejecting what petitioners claim as compliance with the order to reinstate the former given the totally
different nature of the job he was afterwards given and the conditions and working environment under which he
was to perform such job.
133. Banares v. Tabaco Women’s Transport Service GR No. 197353 April 1, 2013
Reinstatement, as a labor law concept, means the admission of an employee back to work prevailing prior to his
dismissal; restoration to a state or position from which one had been removed or separated, which presupposes
that there shall be no demotion in rank and/or diminution of salary, benefits and other privileges; if the position
previously occupied no longer exists, the restoration shall be to a substantially equivalent position in terms of
salary, benefits and other privileges. Management's prerogative to transfer an employee from one office or station
to another within the business establishment, however, generally remains unaffected by a reinstatement order, as
long as there is no resulting demotion or diminution of salary and other benefits and/or the action is not motivated
by consideration less than fair or effected as a punishment or to get back at the reinstated employee.
C. Third party claims in execution proceeding

134. Yupangco Cotton Mills v. CA GR No. 126322 January 16, 2002
A third party may avail himself of the following alternative remedies: a) File a third party claim with the sheriff of
the Labor Arbiter, and b) If the third party claim is denied, the third party may appeal the denial to the NLRC. Even
if a third party claim was denied, a third party may still file a proper action with a competent court to recover
ownership of the property illegally seized by the sheriff. Therefore, the filing of a third party claim with the LA and
the NLRC did not preclude the petitioner from filing a subsequent action for recovery of property and damages
with the RTC. The institution of such complaint will not make petitioner guilty of forum shopping.
135. Ando v. Campo GR No. 184007 February 16, 2011
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A third-party claim is one where a person, not a party to the case, asserts title to or right to the possession of the
property levied upon. It can be said that the property belongs to the conjugal partnership, not to petitioner alone.
Thus, the property belongs to a third party, i.e., the conjugal partnership. At the very least, the Court can consider
that petitioner’s wife is a third party within contemplation of the law. Moreover, the power of the NLRC, or the
courts, to execute its judgment extends only to properties unquestionably belonging to the judgment debtor alone.
A sheriff, therefore, has no authority to attach the property of any person except that of the judgment debtor.
Likewise, there is no showing that the sheriff ever tried to execute on the properties of the corporation.
D. Piercing the veil of corporate fiction

136. Dutch Movers v. Lequin GR No. 210032 April 25, 2017
A corporation has a separate and distinct personality from its stockholders, and from other corporations it may be
connected with. However, such personality may be disregarded, or the veil of corporate fiction may be pierced
attaching personal liability against responsible person if the corporation's personality "is used to defeat public
convenience, justify wrong, protect fraud or defend crime, or is used as a device to defeat the labor laws x x x."
Also, piercing the veil of corporate fiction is allowed where a corporation is a mere alter ego or a conduit of a
person, or another corporation.
Here, the veil of corporate fiction must be pierced and accordingly, petitioners should be held personally liable for
judgment awards because the peculiarity of the situation shows that they controlled DMI; they actively participated
in its operation such that DMI existed not as a separate entity but only as business conduit of petitioners.
Petitioners controlled DMI by making it appear to have no mind of its own, and used DMI as shield in evading
legal liabilities, including payment of the judgment awards in favor of respondents.
Piercing the veil of corporate fiction is allowed, and responsible persons may be impleaded, and be held solidarily
liable even after final judgment and on execution, provided that such persons deliberately used the corporate
vehicle to unjustly evade the judgment obligation, or resorted to fraud, bad faith, or malice in evading their
obligation.
137. Guillermo v. Uson GR No. 198967 March 7, 2016

In the earlier labor cases of Claparols v. Court of Industrial Relations and A.C. Ransom Labor Union-CCLU v.
NLRC, persons who were not originally impleaded in the case were, even during execution, held to be solidarily
liable with the employer corporation for the latter’s unpaid obligations to complainant-employees. These included
a newly-formed corporation which was considered a mere conduit or alter ego of the originally impleaded
corporation, and/or the officers or stockholders of the latter corporation. Liability attached, especially to the
responsible officers, even after final judgment and during execution, when there was a failure to collect from the
employer corporation the judgment debt awarded to its workers.
The common thread running among the cases, is that the veil of corporate fiction can be pierced, and responsible
corporate directors and officers or even a separate but related corporation, may be impleaded and held
answerable solidarily in a labor case, even after final judgment and on execution, so long as it is established that
such persons have deliberately used the corporate vehicle to unjustly evade the judgment obligation, or have
resorted to fraud, bad faith or malice in doing so. When the shield of a separate corporate identity is used to
commit wrongdoing and opprobriously elude responsibility, the courts and the legal authorities in a labor case
have not hesitated to step in and shatter the said shield and deny the usual protections to the offending party,
even after final judgment. The key element is the presence of fraud, malice or bad faith.
7. Reliefs against judgments/decisions rendered by the Commission

A. Petition for certiorari under Rule 65 to the Court of Appeals

138. St. Martin Funeral Homes v. NLRC GR No. 130866 September 16, 1998
The Supreme Court stated: Our mode of judicial review over decisions of the NLRC has for some time now been
understood to be by a petition for certiorari under Rule 65 of the Rules of Court. This is, of course, a special
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original action limited to the resolution of jurisdictional issues, that is, lack or excess of jurisdiction and, in almost
all cases that have been brought to us, grave abuse of discretion amounting to lack of jurisdiction.
It will, however, be noted that paragraph (3), Section 9 of B.P. No. 129 now grants exclusive appellate jurisdiction
to the Court of Appeals over all final adjudications of the Regional Trial Courts and the quasi-judicial agencies
generally or specifically referred to therein except, among others, "those falling within the appellate jurisdiction of
the Supreme Court in accordance with . . . the Labor Code of the Philippines under Presidential Decree No. 442,
as amended, . . . ." This would necessarily contradict what has been ruled and said all along that appeal does not
lie from decisions of the NLRC. Yet, under such excepting clause literally construed, the appeal from the NLRC
cannot be brought to the Court of Appeals, but to this Court by necessary implication.
Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed appeals from the NLRC to the
Supreme Court are interpreted and hereby declared to mean and refer to petitions for certiorari under Rule 65.
Consequently, all such petitions should hence forth be initially filed in the Court of Appeals in strict observance of
the doctrine on the hierarchy of courts as the appropriate forum for the relief desired.
139. Veloso v. China Airlines GR No. 104302 July 14, 1999

It is settled that certiorari will lie only if there is no appeal or any other plain, speedy and adequate remedy in the
ordinary course of law against acts of public respondent. In this case, the plain and adequate remedy expressly
provided by law is a motion for reconsideration of the impugned resolution, to be made under oath and filed within
ten (10) days from receipt of the questioned resolution of the NLRC, a procedure which is jurisdictional.
This precipitate filing of petition for certiorari under Rule 65 without first moving for reconsideration of the assailed
resolution warrants the outright dismissal of this case. As we have consistently held in numerous cases, a motion
for reconsideration is indispensable, for it affords the NLRC an opportunity to rectify errors or mistakes it might
have committed before resort to the courts can be had. It is settled that certiorari will lie only if there is no appeal
or any other plain, speedy and adequate remedy in the ordinary course of law against acts of public respondent.
B. Appeal of the CA decision to Supreme Court under Rule 45
140. Hanjin Engineering v. CA GR No. 165910 April 10, 2006

The aggrieved party is proscribed from assailing a decision or final order of the CA via Rule 65 because such
recourse is proper only if the party has no plain, speedy and adequate remedy in the course of law. In this case,
petitioners have an adequate remedy, namely, a Petition for Review on Certiorari under Rule 45 of the Rules of
Court. It must be stressed that the remedies of appeal under Rule 45 and an original action for certiorari under
Rule 65 are mutually exclusive.
The general rule is that questions or findings of facts in the lower court, board or tribunal, and the probative weight
and sufficiency of the evidence upon which the said findings were based are not reviewable by certiorari under
Rule 65 of the Revised Rules of Court. However, the sufficiency of the evidence may be inquired into in order to
determine whether jurisdictional facts were or were not proved or whether the lower court had exceeded its
jurisdiction.
141. Macasero v. Sourhtern Industrial Gases GR No. 178524 January 30, 2009
Rule 45 of the Rules of Civil Procedure provides that only questions of law shall be raised in an appeal by
certiorari before this Court. This rule, however, admits of certain exceptions,one of which is when the findings are
conclusions without citation of specific evidence on which they are based.
In illegal dismissal cases, the onus of proving that the employee was not dismissed or, if dismissed, that the
dismissal was not illegal, rests on the employer, failure to discharge which would mean that the dismissal is not
justified and, therefore, illegal. A party alleging a critical fact must support his allegation with substantial evidence,
for any decision based on unsubstantiated allegation cannot stand without offending due process. In this case,
Respondents reiterate their claim that its act of not providing work to petitioner starting September 1995 was "due
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principally to a slump in the market and the dwindling demand by the Visayas-Mindanao clients." This claim was
credited by the Arbiter, the NLRC and the appellate court. However, the records are bereft of any documentary
evidence showing that it was indeed suffering losses or a decline in orders which justified its admitted failure to
give assignments to petitioner.
142. Stanfilco v. Tequillo GR No. 209735 July 17, 2019

The Court's power to decide Rule 45 petitions in labor cases is not unlimited. The remedy from an adverse
decision or final order of the NLRC is to file a petition for certiorari before the CA on the ground that the former
tribunal acted with grave abuse of discretion in arriving at its determination of the case. It follows then that, in
labor cases, the Court enquires into the legal correctness of the CA's determination of the presence or absence of
grave abuse of discretion in the NLRC decision. Rule 45 petitions in labor cases ultimately concern whether the
NLRC's decision is tainted with grave abuse of discretion, and not whether said decision is correct on the merits.
8. Compromise Agreement

143. Magbanua v. Uy GR No. 161003 May 6, 2005
A compromise agreement is a contract whereby the parties make reciprocal concessions in order to resolve their
differences and thus avoid or put an end to a lawsuit. They adjust their difficulties in the manner they have agreed
upon, disregarding the possible gain in litigation and keeping in mind that such gain is balanced by the danger of
losing. Verily, the compromise may be either extrajudicial (to prevent litigation) or judicial (to end a litigation).
Rights may be waived through a compromise agreement, notwithstanding a final judgment that has already
settled the rights of the contracting parties. To be binding, the compromise must be shown to have been
voluntarily, freely and intelligently executed by the parties, who had full knowledge of the judgment. Furthermore,
it must not be contrary to law, morals, good customs and public policy. The Court is tasked to determine the
legality of a compromise agreement after final judgment, not the prudence of entering into one. The validity of the
agreement is determined by compliance with the requisites and principles of contracts, not by when it was entered
into. A compromise of a final judgment operates as a novation of the judgment obligation, upon compliance with
either requisite.
When a compromise agreement is given judicial approval, it becomes more than a contract binding upon the
parties. Having been sanctioned by the court, it is entered as a determination of a controversy and has the force
and effect of a judgment. It is immediately executory and not appealable, except for vices of consent or forgery.
There is no justification to disallow a compromise agreement, solely because it was entered into after final
judgment. The validity of the agreement is determined by compliance with the requisites and principles of
contracts, not by when it was entered into.
The presence or the absence of counsel when a waiver is executed does not determine its validity. There is no
law requiring the presence of a counsel to validate a waiver. The test is whether it was executed voluntarily, freely
and intelligently; and whether the consideration for it was credible and reasonable.
144. Arellano v. Ppwertech Corporation GR No. 150861 January 22, 2008

Collusion is a species of fraud. Art. 227 of the Labor Code empowers the NLRC to void a compromise agreement
for fraud. The powers of an agent may be circumscribed either:
a. by putting a clause in the SPA providing a minimum amount upon which the agent may compromise on
behalf of the principal; or
b. by providing that some acts of the agent are conditional and subject to the approval of the principal.
145. Philippine Transmarine Carriers v. Pelagio GR No. 211302 August 12, 2015
A valid compromise agreement may render a pending case moot and academic. However, the parties may opt to
put therein clauses, conditions, and the like that would prevent a pending case from becoming moot and
academic - such as when the execution of such agreement is without prejudice to the final disposition of the said
case. After all, a compromise agreement is still a contract by nature, and as such, the parties are free to insert
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clauses to modify its legal effects, so long as such modifications are not contrary to law, morals, good customs,
public order, or public policy.
In this case, while this document may be properly deemed as a compromise agreement, it is conditional in nature,
considering that it is without prejudice to the certiorari proceedings pending before the CA, i.e., it obliges Pelagio
to return the aforesaid proceeds to petitioners should the CA ultimately rule in the latter's favor. The Court ruled
that since the agreement in that case was fair to the parties in that it provided available remedies to both parties,
the certiorari petition was not rendered moot despite the employer's satisfaction of the judgment award, as the
respondent had obliged himself to return the payment if the petition would be granted.
146. Magsaysay Maritime v. De Jesus GR No. 203943 August 30, 2017

While the general rule is that a valid compromise agreement has the power to render a pending case moot and
academic, being a contract, the parties may opt to modify the legal effects of their compromise agreement to
prevent the pending case from becoming moot. A conditional settlement of a judgement award may be treated as
a compromise agreement and a judgement on the merits of the case if it turns out to be highly prejudicial to one of
the parties.
9. Quitclaims

147. Periquet v. NLRC GR No. 91298 June 22, 1990
Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into
and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply
because of a change of mind. It is only where there is clear proof that the waiver was wangled from an
unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in
to annul the questionable transaction. But where it is shown that the person making the waiver did so voluntarily,
with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable,
the transaction must be recognized as a valid and binding undertaking. As in this case.
148. Goodrich Manufacturing v. Ativo GR No. 188002 February 1, 2010

It is true that the law looks with disfavor on quitclaims and releases by employees who have been inveigled or
pressured into signing them by unscrupulous employers seeking to evade their legal responsibilities and frustrate
just claims of employees.
In certain cases, however, the Court has given effect to quitclaims executed by employees if the employer is able
to prove the following requisites, to wit:
1. the employee executes a deed of quitclaim voluntarily;
2. there is no fraud or deceit on the part of any of the parties;
3. the consideration of the quitclaim is credible and reasonable; and
4. the contract is not contrary to law, public order, public policy, morals or good customs, or prejudicial to a
third person with a right recognized by law.
149. Aujero v. Philippine Communications Satellite Corporation GR No. 193484

Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into
and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply
because of a change of mind. It is only where there is clear proof that the waiver was wangled from an
unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in
to annul the questionable transaction. But where it is shown that the person making the waiver did so voluntarily,
with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable,
the transaction must be recognized as a valid and binding undertaking.
150. EDI Staffbuilders v. NLRC GR No. 145587 October 26, 2007

In order to prevent disputes on the validity and enforceability of quitclaims and waivers of employees under
Philippine laws, said agreements should contain the following:
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1. A fixed amount as full and final compromise settlement;
2. The benefits of the employees if possible with the corresponding amounts, which the employees are
giving up in consideration of the fixed compromise amount;
3. A statement that the employer has clearly explained to the employee in English, Filipino, or in the dialect
known to the employees—that by signing the waiver or quitclaim, they are forfeiting or relinquishing their
right to receive the benefits which are due them under the law; and
4. A statement that the employees signed and executed the document voluntarily, and had fully understood
the contents of the document and that their consent was freely given without any threat, violence, duress,
intimidation, or undue influence exerted on their person.
It is advisable that the stipulations be made in English and Tagalog or in the dialect known to the employee. There
should be two (2) witnesses to the execution of the quitclaim who must also sign the quitclaim. The document
should be subscribed and sworn to under oath preferably before any administering official of the Department of
Labor and Employment or its regional office, the Bureau of Labor Relations, the NLRC or a labor attaché in a
foreign country. It is made clear that the foregoing rules on quitclaim or waiver shall apply only to labor contracts
of OFWs in the absence of proof of the laws of the foreign country agreed upon to govern said contracts.
Otherwise, the foreign laws shall apply.
151. Carolina’s Lace Shoppe v. Maquilan GR No. 219419 April 10, 2019
Resignation letters which are in the nature of a quitclaim, lopsidedly worded to free the employer from liabilities
reveal the absence of voluntariness.
F. DOLE Regional Directors

1. Small money claims without a claim for reinstatement

152. Maternity Children’s Hospital v. SOLE GR No. 78909 June 30, 1989
Under the present rules in Art. 128-B, Labor Code, a RegionalDirector exercises both visitorial and enforcement
power over labor standards cases, and is therefore empowered to adjudicate money claims, provided there still
exists an employer-employee relationship, and the findings of the regional office is not contested by the employer
concerned.
The justification for the award to this group of employees who were not signatories to the complaint is that the
visitorial and enforcement powers given to the Secretary of Labor is relevant to, and exercisable over
establishments, not over the individual members/employees because what is sought to be achieved by its
exercise is the observance of, and/or compliance by, such firm/establishment with the labor standards regulations.
Necessarily, in case of an award resulting from a violation of labor legislation by such establishment, the entire
members/employees should benefit therefrom. However, there is no legal justification for the award in favor of
those employees who were no longer connected with the hospital at the time the complaint was filed, having
resigned therefrom in 1984.
153. Odin Security v. De La Serna GR No. 87439 February 21, 1990

The Regional Directors, in representation of the Secretary of Labor — and notwithstanding the grant of exclusive
original jurisdiction to Labor Arbiters by Article 217 of the Labor Code, as amended — have power to hear cases
involving violations of labor standards provisions of the Labor Code or other legislation discovered in the course of
normal inspection, and order compliance therewith, provided that: 1) the alleged violations of the employer involve
persons who are still his employees, i.e., not dismissed, and 2) the employer does not contest the findings of the
labor regulations officer or raise issues which cannot be resolved without considering evidentiary matters that are
not verifiable in the normal course of inspection
Regional Director and the Undersecretary did have jurisdiction over the private respondents' complaint which was
originally for violation of labor standards (Art. 128[b], Labor Code). Only later did the guards ask for backwages on
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account of their alleged constructive dismissal. Once vested, that jurisdiction continued until the entire controversy
was decided.
2. Visitorial and enforcement power (Art. 128 and 289)

154. SSK Parts Corporation v. Camas GR No. 85934 January 30, 1990
The jurisdiction of the Regional Director over employees' claims for wages and other monetary benefits not
exceeding P5,000 has been affirmed by Republic Act No. 6715, amending Article 129 of the Labor Code as
follows: Art. 129. Recovery of wages, simple money claims and other benefits. — Upon complaint of any
interested party, the Regional Director of the Department of Labor and Employment or any of the duly authorized
hearing officers of the Department is empowered, through summary proceeding and after due notice, to hear and
decide any matter involving the recovery of wages and other monetary claims and benefits, including legal
interest, owing to an employee or person employed in domestic or household service or househelper under this
Code, arising from employer-employee relations: Provided, that such complaint does not include a claim for
reinstatement: Provided, further, That the aggregate money claims of each employee or househelper do not
exceed five thousand pesos (P5,000.00). The Regional Director or hearing officer shall decide or resolve the
complaint within thirty (30) calendar days from the date of the filing of the same.
3. Remedy against decisions rendered by the Regional Director

G. DOLE Secretary

1. Visitorial and enforcement powers
2. Assumption of jurisdiction over strikes and lockouts

155. Telefunken Semiconductors Employees Union v. CA GR No. 143013 December 18, 2000
It is clear from the Art. 264 (g) that the moment the Secretary of Labor assumes jurisdiction over a labor dispute in
an industry indispensable to national interest, such assumption shall have the effect of automatically enjoining the
intended or impending strike. It was not even necessary for the Secretary of Labor to issue another order directing
them to return to work. The mere issuance of an assumption order by the Secretary of Labor automatically carries
with it a return-to-work order, even if the directive to return to work is not expressly stated in the assumption order.
However, petitioners refused to acknowledge this directive of the Secretary of Labor thereby necessitating the
issuance of another order expressly directing the striking workers to cease and desist from their actual strike, and
to immediately return to work but which directive the herein petitioners opted to ignore. In this connection, Article
264(a) of the Labor Code clearly provides that:
Article 264. Prohibited Activities.
(a) No strike or lock out shall be declared after the assumption of jurisdiction by the President or the
Secretary or after certification or submission of the dispute to compulsory or voluntary arbitration or during
the pendency of cases involving the same grounds for the strike or lockout
Any union officer who knowingly participates in illegal strike and any worker or union officer who knowingly
participates in the commission of illegal acts during a strike may be declared to have lost his employment
status: Provided, that mere participation of a worker in a lawful strike shall not constitute sufficient ground for
termination of his employment even if a replacement had been hired by the employer during such lawful
strike x x x
In Marcopper Mining Corp. v. Brillantes (254 SCRA 595), the High Tribunal stated in no uncertain terms that – "by
staging a strike after the assumption of jurisdiction or certification for arbitration, workers forfeited their right to; be
readmitted to work, having abandoned their employment, and so could be validly replaced."
156. Phimco Industries v. Brillantes GR No. 120751 March 17, 1999

Art. 263, paragraph (g) of the Labor Code, provides:
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(g) When, in his opinion, there exist a labor dispute causing or likely to cause a strike or lockout in an industry
indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the
dispute and decide it or certify the same to the Commission for compulsory arbitration . . .
The Labor Code vests in the Secretary of Labor the discretion to determine what industries are indispensable to
the national interest. Accordingly, upon the determination by the Secretary of Labor that such industry is
indispensable to the national interest, he will assume jurisdiction over the labor dispute in the said industry. This
power, however, is not without any limitation – the coverage being limited to strikes or lockouts adversely affecting
the national interest. It is thus evident from the foregoing that the Secretary's assumption of jurisdiction grounded
on the alleged "obtaining circumstances" and not on a determination that the industry involved in the labor dispute
is one indispensable to the "national interest", the standard set by the legislature, constitutes grave abuse of
discretion amounting to lack of or excess of jurisdiction.
3. Suspension of the effects of termination

4. Remedy from decisions of the DOLE Secretary

157. National Federeation of Labor v. Laguesma GR No. 123426 March 10, 1999
The Labor Code and its implementing and related rules generally do not provide for any mode for reviewing the
decision of the Secretary of Labor. It is further generally provided that the decision of the Secretary of Labor shall
be final and executory after ten (10) days from notice. Yet, like decisions of the NLRC which under Art. 223 of the
Labor Code become final after ten (10) days, decisions of the Secretary of Labor come to this Court by way of a
petition for certiorari even beyond the ten-day period provided in the Labor Code and the implementing rules but
within the reglementary period set for Rule 65 petitions under the 1997 Rules of Civil Procedure.
In two instances, however, there is specific mention of a remedy from the decision of the Secretary of Labor, thus:
1. Section 15, Rule XI, Book V of the amended implementing rules provides that the decision of the
Secretary of Labor on appeal from the Med-Arbiter’s decision on a petition for certification election shall
be final and executory, but that the implementation of the Secretary’s decision affirming the Med-Arbiter’s
decision to conduct a certification election "shall not be stayed unless restrained by the appropriate court."
We read "the appropriate court" in the above provision refers to the Court of Appeals. Thus, the proper
remedy which is Rule 65 should be initially filed in the Court of Appeals in strict observance of the
doctrine on the hierarchy of courts.
2. Section 5, Rule V (Execution) of the Rules on the Disposition of Labor Standards Cases in Regional
Offices provides that "the filing of a petition for certiorari before the Supreme Court shall not stay the
execution of the [appealed] order or decision unless the aggrieved party secures a temporary restraining
order from the Court."
H. Bureau of Labor Relations

1. Inter-union and intra-union disputes

158. Pepsi-Cola Sales and Advertising Union v. SOLE GR No. 97092 July 27, 1992
An intra-union conflict would therefore refer to a conflict within or inside a labor union, and an inter-union
controversy or dispute, one occurring or carried on between or among unions. Under Article 226 of the Labor
Code such controversies are within the exclusive, original jurisdiction of the Med-Arbiter of the Bureau of Labor
Relations whose decision, is appealable to the Secretary of Labor.
159. Diokno v. Cacdac GR No. 168475 July 4, 2007

As defined, an intra-union conflict refer to a conflict within or inside a labor union, while inter-union controversy or
dispute is one occurring or carried on between and among unions. More specifically, an intra-union dispute is
defined under Sec. (z), Rule I of the Rules Implementing Rule V of the Labor Code, viz:
(z) "Intra-Union Dispute" refers to any conflict between and among union members, and includes all
disputes or grievances arising from any violation of or disagreement over any provision of the constitution
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and by-laws of a union, including cases arising from chartering or affiliation of labor organizations or from
any violation of the rights and conditions of union membership provided for in the Code.
The controversy in the case at bar is an intra-union dispute. There is no question that this is one which involves a
dispute within or inside FLAMES, a labor union. Despite the allegations that Daya, et. al. sought help from
non-members, it does not detract from the real character of the controversy. It remains as one which involves the
grievance over the constitution and by-laws of a union, and it is a controversy involving members of the union.
Moreover, the non-members of the union who were alleged to have aided private respondents Daya, et al., are
not parties in the case.
160. Montano v. Verceles GR No. 168583 July 26, 2010

The matter of venue becomes problematic when the intra-union dispute involves a federation, because the
geographical presence of a federation may encompass more than one administrative region. Pursuant to its
authority under Article 226, this Bureau exercises original jurisdiction over intra-union disputes involving
federations. It is well-settled that FFW, having local unions all over the country, operates in more than one
administrative region. Therefore, this Bureau maintains original and exclusive jurisdiction over disputes arising
from any violation of or disagreement over any provision of its constitution and by-laws.
2. Disputes arising from or affecting labor management relations except grievances

161. La Tondena Workers Union v. SOLE GR No. 96821 December 9, 1994
Union accounts examiners of the Bureau" mentioned in Rule 1, sec. 1(ff) of the implementing rules as having the
power to audit the books of accounts of unions are actually officials of the BLR because the word "Bureau" is
defined in Rule 1, sec. 1(b) of the same rules as the Bureau of Labor Relations.
The delegation of authority to union accounts examiners in Rule 1, sec. 1(ff) is not exclusive. By indorsing the
case to the BLR, the Secretary of Labor and Employment must be presumed to have authorized the BLR to act on
his behalf. Independently of any delegation, the BLR had power of its own to conduct the examination of accounts
in this case as provided by Book IV, Title VII, Chapter 4, sec. 16 of the Administrative Code of 1987:
... It shall also set policies, standards, and procedure relating to collective bargaining agreements, and the
examination of financial records of accounts of labor organizations to determine compliance with relevant
laws.
The Labor Code (Art 226), as amended by RA 6715, likewise authorizes the BLR to decide intra-union disputes.
This includes the examinations of accounts. Conflicts affecting labor-management relations are apart from
intra-union conflicts, as is apparent from the text of Art. 226.
3. Registration of CBA
4. Remedies to decisions rendered by the BLR

162. Abbot Laboratories v. Abbot Laboratories Employees Union GR No. 131374
The appellate jurisdiction of the Secretary of Labor and Employment is limited only to a review of cancellation
proceedings decided by the Bureau of Labor Relations in the exercise of its exclusive and original jurisdiction. The
Secretary of Labor and Employment has no jurisdiction over decisions of the Bureau of Labor Relations rendered
in the exercise of its appellate power to review the decision of the Regional Director in a petition to cancel the
union's certificate of registration, said decisions being final and unappealable.
The decisions of the BLR brought before it on appeal (appellate jurisdiction) is FINAL and UNAPPEALABLE.
Hence, CA has no jurisdiction over an appeal from the decision of the BLR in its appellate jurisdiction.
Nevertheless, BLR’s decision may be brought to the CA via Rule 65 petition but must be within the 60 day period.
163. Heritage Hotel Manila v. NUWHRAIN GR No. 178296 January 12, 2011
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Jurisdiction remained with the BLR despite the BLR Director's inhibition. When the DOLE Secretary resolved the
appeal, she merely stepped into the shoes of the BLR Director and performed a function that the latter could not
himself perform. She did so pursuant to her power of supervision and control over the BLR. The DOLE Secretary,
as the person exercising the power of supervision and control over the BLR, has the authority to directly exercise
the quasi-judicial function entrusted by law to the BLR Director.
163. Takata Corporation v. BLR GR No. 196276 June 4, 2014

Since Paralegal Officer Mole's appeal filed with the BLR was not specifically authorized by respondent, such
appeal is considered to have not been filed at all. It has been held that "if a complaint is filed for and in behalf of
the plaintiff who is not authorized to do so, the complaint is not deemed filed. An unauthorized complaint does not
produce any legal effect.”
I. National Conciliation and Mediation Board

164. Tabigue v. International Copra Export Corporation GR No. 183335 December 23,
2009
Given NCMB's following functions, as enumerated in Section 22 of Executive Order No. 126 (the Reorganization
Act of the Ministry of Labor and Employment), viz:
(a) Formulate policies, programs, standards, procedures, manuals of operation and guidelines pertaining to
effective mediation and conciliation of labor disputes;
(b) Perform preventive mediation and conciliation functions;
(c) Coordinate and maintain linkages with other sectors or institutions, and other government authorities
concerned with matters relative to the prevention and settlement of labor disputes;
(d) Formulate policies, plans, programs, standards, procedures, manuals of operation and guidelines pertaining to
the promotion of cooperative and non-adversarial schemes, grievance handling, voluntary arbitration and other
voluntary modes of dispute settlement;
(e) Administer the voluntary arbitration program; maintain/update a list of voluntary arbitrations; compile arbitration
awards and decisions;
(f) Provide counseling and preventive mediation assistance particularly in the administration of collective
agreements;
(g) Monitor and exercise technical supervision over the Board programs being implemented in the regional offices;
andcralawlibrary
(h) Perform such other functions as may be provided by law or assigned by the Minister,
it can not be considered a quasi-judicial agency.
1. Preventive Mediation

165. Insular Hotel Employees Union-NFL v. Waterfront Insular Hotel Davao GR No. 174040
Section 3, Rule IV of the NCMB Manual of Procedure provides that any certified or duly recognized bargaining
representative may file a notice or declare a strike or request for preventive mediation in cases of bargaining
deadlocks and unfair labor practices.
J. Voluntary Arbitrator

166. Santuyo v. Remerco Garments GR No. 174420 March 22, 2010
With regard to the question of jurisdiction over the subject matter, Article 217 (c) of the Labor Code provides:
Article 217. Jurisdiction of Labor Arbiters and the Commission. — (c) Cases arising from the interpretation or
implementation of collective bargaining agreements and those arising from the interpretation or enforcement of
company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance
machinery and voluntary arbitration as may be provided in said agreements.
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This provision requires labor arbiters to refer cases involving the implementation of CBAs to the grievance
machinery provided therein and to voluntary arbitration. Moreover, Article 260 of the Labor Code clarifies that
such disputes must be referred first to the grievance machinery and, if unresolved within seven days, they shall
automatically be referred to voluntary arbitration. Under this provision, voluntary arbitrators have original and
exclusive jurisdiction over matters which have not been resolved by the grievance machinery. Pursuant to Articles
217 in relation to Articles 260 and 261 of the Labor Code, the labor arbiter should have referred the matter to the
grievance machinery provided in the CBA. Because the labor arbiter clearly did not have jurisdiction over the
subject matter, his decision was void.
167. Teng v. Pahagac GR No. 169704 November 17, 2010

On March 21, 1989, Republic Act No. 6715 took effect, amending, among others, Article 263 of the Labor Code
which was originally worded as:
Art. 263 x x x Voluntary arbitration awards or decisions shall be final, unappealable, and executory.
As amended, Article 263 is now Article 262-A, which states:

Art. 262-A. x x x [T]he award or decision x x x shall contain the facts and the law on which it is based. It
shall be final and executory after ten (10) calendar days from receipt of the copy of the award or decision
by the parties.
Notably, Article 262-A deleted the word "unappealable" from Article 263. The deliberate selection of the language
in the amendatory act differing from that of the original act indicates that the legislature intended a change in the
law, and the court should endeavor to give effect to such intent. We recognized the intent of the change of
phraseology in Imperial Textile Mills, Inc. v. Sampang, where we ruled that: It is true that the present rule [Art.
262-A] makes the voluntary arbitration award final and executory after ten calendar days from receipt of the copy
of the award or decision by the parties. Presumably, the decision may still be reconsidered by the Voluntary
Arbitrator on the basis of a motion for reconsideration duly filed during that period.
168. Samahan ng mga Manggagawa sa Hyatt v. Magsalin GR No. 164939 June 6, 2011
A decision or award of a voluntary arbitrator is appealable to the CA via petition for review under Rule 43. The
decision or award of the voluntary arbitrator or panel of arbitrators should likewise be appealable to the Court of
Appeals, in line with the procedure outlined in Revised Administrative Circular No. 1-95 (now embodied in Rule 43
of the 1997 Rules of Civil Procedure), just like those of the quasi-judicial agencies, boards and commissions
enumerated therein, and consistent with the original purpose to provide a uniform procedure for the appellate
review of adjudications of all quasi-judicial entities.
169. NYK Fil-Ship Management v. Dabu GR No. 225142 September 13, 2017
Under Section 4 of Rule 43, the period to appeal to the CA is 15 days from receipt of the decision.
Notwithstanding, since Article 262-A of the Labor Code expressly provides that the award or decision of the
voluntary arbitrator shall be final and executory after ten (10) calendar days from receipt of the decision by the
parties, the appeal of the VA decision to the CA must be filed within 10 days. The 10-day period to appeal under
the Labor Code being a substantive right, this period cannot be diminished, increased, or modified through the
Rules of Court.
170. Guagua National Colleges v. CA GR No. 188492 August 28, 2018

In other words, the remedy of appeal by petition for review under Rule 43 of the Rules of Court became available
to the parties aggrieved by the decisions or awards of the Voluntary Arbitrators or Panels of Arbitrators. Despite
Rule 43 providing for a 15-day period to appeal, we rule that the Voluntary Arbitrator's decision must be appealed
before the Court of Appeals within 10 calendar days from receipt of the decision as provided in the Labor Code.
By allowing a 10-day period, the obvious intent of Congress in amending Article 263 to Article 262-A is to provide
an opportunity for the party adversely affected by the VA's decision to seek recourse via a motion for
reconsideration or a petition for review under Rule 43 of the Rules of Court filed with the CA. Indeed, a motion for
reconsideration is the more appropriate remedy in line with the doctrine of exhaustion of administrative remedies.
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For this reason, an appeal from administrative agencies to the CA via Rule 43 of the Rules of Court requires
exhaustion of available remedies as a condition precedent to a petition under that Rule.
171. Sanyo Philippines Workers Union v. Canizares GR No. 101619 July 8, 1992
While it appears that the dismissal of the private respondents was made upon the recommendation of PSSLU
pursuant to the union security clause provided in the CBA, We are of the opinion that these facts do not come
within the phrase "grievances arising from the interpretation or implementation of (their) Collective Bargaining
Agreement and those arising from the interpretation or enforcement of company personnel policies," the
jurisdiction of which pertains to the Grievance Machinery or thereafter, to a voluntary arbitrator or panel of
voluntary arbitrators. No grievance between them exists which could be brought to a grievance machinery. Hence,
only disputes involving union and company shall be referred to the grievance machinery or voluntary arbitrators.
172. Negros Metal v. Lamayo GR No. 186557 August 25, 2010

As a general rule then, termination disputes should be brought before a labor arbiter, except when the parties,
under Art. 262, unmistakably express that they agree to submit the same to voluntary arbitration. In the present
case, the CBA provision on grievance machinery being invoked by petitioner does not expressly state that
termination disputes are included in the ambit of what may be brought before the company’s grievance
machinery.
173. Landtex Industries v. CA GR No. 150278 August 9, 2007

The original and exclusive jurisdiction of the labor arbiter over unfair labor practices, termination disputes, and
claims for damages cannot be arrogated into the powers of voluntary arbitrators in the absence of an express
agreement between the union and the company.
Article 261 of the Labor Code provides that voluntary arbitrators shall have original and exclusive jurisdiction to
hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective
Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies.
On the other hand, a reading of Article 217 in conjunction with Article 262 shows that termination disputes fall
under the jurisdiction of the labor arbiter unless the union and the company agree that termination disputes should
be submitted to voluntary arbitration. Such agreement should be clear and unequivocal.
174. Octavio v. PLDT GR No. 175492 February 27, 2013

Every Collective Bargaining Agreement (CBA) shall provide a grievance machinery to which all disputes arising
from its implementation or interpretation will be subjected to compulsory negotiations. This essential feature of a
CBA provides the parties with a simple, inexpensive and expedient system of finding reasonable and acceptable
solutions to disputes and helps in the attainment of a sound and stable industrial peace. It is settled that "when
parties have validly agreed on a procedure for resolving grievances and to submit a dispute to voluntary
arbitration then that procedure should be strictly observed."
Moreover, we have held time and again that "before a party is allowed to seek the intervention of the court, it is a
precondition that he should have availed of all the means of administrative processes afforded him. Hence, if a
remedy within the administrative machinery can still be resorted to by giving the administrative officer concerned
every opportunity to decide on a matter that comes within his jurisdiction, then such remedy should be exhausted
first before the court’s judicial power can be sought. The premature invocation of the court’s judicial intervention is
fatal to one’s cause of action.
2. Submission Agreement

175. Temic Automotive Philippines v. Temic Automotive Philippines, Inc. Employees Union
The voluntary arbitration submission covers matters affecting third parties who are not parties to the voluntary
arbitration and over whom the voluntary arbitrator has no jurisdiction; thus, the voluntary arbitration ruling cannot
bind them. While they may voluntarily join the voluntary arbitration process as parties, no such voluntary
submission appears in the record and we cannot presume that one exists. Thus, the voluntary arbitration process
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and ruling can only be recognized as valid between its immediate parties as a case arising from their collective
bargaining agreement. This limited scope, of course, poses no problem as the forwarders and their employees
are not indispensable parties and the case is not mooted by their absence.
K. Prescription of Actions
1. Money claims

176. PLDT v. Pingol GR No. 182622 September 8, 2010
"ARTICLE 291. Money claims. All money claims arising from employer-employee relations accruing during the
effectivity of this Code shall be filed withinthree years from the time the cause of action accrued, otherwise they
shall be forever barred."
It is a settled jurisprudence that a cause of action has three (3) elements, to wit: (1) a right in favor of the plaintiff
by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named
defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant violative
of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff. The day the
action may be brought is the day a claim starts as a legal possibility.
177. Serrano v. CA GR No. 139420 August 15, 2001

"ARTICLE 291. Money claims. All money claims arising from employer-employee relations accruing during the
effectivity of this Code shall be filed within three years from the time the cause of action accrued, otherwise they
shall be forever barred." Petitioner repeatedly demanded payment from respondent Maersk but similar to the
actuations of Baliwag Transit in the above cited case, respondent Maersk warded off these demands by saying
that it would look into the matter until years passed by. In October 1993, Serrano finally demanded in writing
payment of the unsent money orders. Then and only then was the claim categorically denied by respondent A.P.
Moller in its letter dated November 22, 1993. Petitioner's cause of action accrued only upon respondent A.P.
Moller's definite denial of his claim in November 1993. Having filed his action five (5) months thereafter or in April
1994, we hold that it was filed within the three-year (3) prescriptive period provided in Article 291 of the Labor
Code.
178. Intercontinental Broadcasting Corporation v. Panganiban GR No. 151407

The applicable law in this case is Article 291 of the Labor Code which provides that "all money claims arising from
employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from
the time the cause of action accrued; otherwise they shall be forever barred." The term "money claims" covers all
money claims arising from an employer-employee relation.
Like other causes of action, the prescriptive period for money claims is subject to interruption, and in the absence
of an equivalent Labor Code provision for determining whether the said period may be interrupted, Article 1155 of
the Civil Code may be applied, to wit:
ART. 1155. The prescription of actions is interrupted when they are filed before the Court, when there is a
written extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt
by the debtor.
Thus, the prescription of an action is interrupted by (a) the filing of an action, (b) a written extrajudicial demand by
the creditor, and (c) a written acknowledgment of the debt by the debtor. On this point, the Court ruled that
although the commencement of a civil action stops the running of the statute of prescription or limitations, its
dismissal or voluntary abandonment by plaintiff leaves the parties in exactly the same position as though no
action had been commenced at all.
179. Accessories Specialist v. Alabanza GR No. 168985 July 23, 2008

Promissory estoppel may arise from the making of a promise, even though without consideration, if it was
intended that the promise should be relied upon, as in fact it was relied upon, and if a refusal to enforce it would
virtually sanction the perpetration of fraud or would result in other injustice. Promissory estoppel presupposes the
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existence of a promise on the part of one against whom estoppel is claimed. The promise must be plain and
unambiguous and sufficiently specific so that the court can understand the obligation assumed and enforce the
promise according to its terms.
All the requisites of promissory estoppel are present in this case. Jones relied on the promise of ASI that he would
be paid as soon as the claims of all the rank-and-file employees had been paid. If not for this promise that he had
held on to until the time of his death, we see no reason why he would delay filing the complaint before the LA.
Thus, we find ample justification not to follow the prescriptive period imposed under Article 291 of the Labor Code.
180. Auto Bus Transport v. Bautista GR No. 156367 May 16, 2005
Service incentive leave is a right which accrues to every employee who has served "within 12 months, whether
continuous or broken reckoned from the date the employee started working. Service Incentive Leave shall not
apply to employees classified as "field personnel." In the case of SIL, the cause of action of an entitled employee
to claim his service incentive leave pay accrues from the moment the employer refuses to remunerate its
monetary equivalent if the employee did not make use of said leave credits but instead chose to avail of its
commutation.
In light of this peculiarity of the service incentive leave, we can conclude that the three (3)-year prescriptive period
commences, not at the end of the year when the employee becomes entitled to the commutation of his service
incentive leave, but from the time when the employer refuses to pay its monetary equivalent after demand of
commutation or upon termination of the employee’s services.
181. Montero v. TImes Transportation GR No. 190828 March 16, 2015

Settled is the rule that when one is arbitrarily and unjustly deprived of his job or means of livelihood, the action
instituted to contest the legality of one’s dismissal from employment constitutes, in essence, an action predicated
upon an injury to the rights of the plaintiff, as contemplated under Article 1146 of the New Civil Code, which must
be brought within four years.
However, the Court had already ruled that the prescriptive period continues even after the withdrawal of the case
as though no action has been filed at all. The applicability of Article 1155 of the Civil Code in labor cases was
upheld in the case of Intercontinental Broadcasting Corporation v. Panganiban where the Court held that
"although the commencement of a civil action stops the running of the statute of prescription or limitations, its
dismissal or voluntary abandonment by plaintiff leaves the parties in exactly the same position as though no
action had been commenced at all."
2. Illegal dismissal

182. Callanta v. Carnation Philippines GR No. 70616 October 28, 1986
The period of prescription mentioned under Article 281, now Article 292, of the Labor Code, refers to and "is
limited to money claims, an other cases of injury to rights of a workingman being governed by the Civil Code."
Accordingly, a dismissed employee, who sought reinstatement, had four [4] years within which to file her
complaint for the injury to her rights as provided under Article 1146 of the Civil Code.
3. Offenses under the Labor Code

183. Arriola v. Pilipino Star Ngayon GR No. 175689 August 13, 2014
Arriola’s claims for backwages and damages have not yet prescribed when he filed his complaint with the National
Labor Relations Commission. By way of supplement – "Article 1146 of the Civil Code of the Philippines governs
complaints for illegal dismissal. Under Article 1146, an action based upon an injury to the rights of a plaintiff must
be filed within four years. This court explained:
. . . when one is arbitrarily and unjustly deprived of his job or means of livelihood, the action instituted to
contest the legality of one's dismissal from employment constitutes, in essence, an action predicated
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"upon an injury to the rights of the plaintiff," as contemplated under Art. 1146 of the New Civil Code, which
must be brought within four years.
The four-year prescriptive period under Article 1146 also applies to actions for damages due to illegal dismissal
since such actions are based on an injury to the rights of the person dismissed. In this case, Arriola filed his
complaint three years and one day from his alleged illegal dismissal.
184. Cadalin v. POEA GR No. 104776 December 5, 1994

Article 156 of the Amiri Decree No. 23 of 1976 provides:
"A claim arising out of a contract of employment shall not be actionable after the lapse of one year from
the date of the expiry of the contract"
As a general rule, a foreign procedural law will not be applied in the forum. Procedural matters, such as service of
process, joinder of actions, period and requisites for appeal, and so forth, are governed by the laws of the forum.
This is true even if the action is based upon a foreign substantive law. "If by the laws of the state or country where
the cause of action arose, the action is barred, it is also barred in the Philippines Islands."
4. Illegal recruitment
II. Right to Self-Organization

A. Legal Basis

185. Samahan ng Manggagawa sa Hanjin Shipyard v. BLR GR NO. 211145 October 14, 2015
As Article 246 (now 252) of the Labor Code provides, the right to self-organization includes the right to form, join
or assist labor organizations fer the purpose of collective bargaining through representatives of their own choosing
and to engage in lawful concerted activities for the same purpose for their mutual aid and protection. This is in line
with the policy of the State to foster the free and voluntary organization of a strong and united labor
movement as well as to make sure that workers participate in policy and decision-making processes affecting
their rights, duties and welfare.
The right to form a union or association or to self-organization comprehends two notions, to wit:
(a) the liberty or freedom, that is, the absence of restraint which guarantees that the employee may act for
himself without being prevented by law; and
(b) the power, by virtue of which an employee may, as he pleases, join or refrain from joining an
association.
In view of the revered right of every worker to self-organization, the law expressly allows and even encourages
the formation of labor organizations.
A labor organization is defined as "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."
Labor organization has two broad rights: (1) to bargain collectively and (2) to deal with the employer concerning
terms and conditions of employment. A union refers to any labor organization in the private sector organized for
collective bargaining and for other legitimate purpose, while a workers' association is an organization of workers
formed for the mutual aid and protection of its members or for any legitimate purpose other than collective
bargaining.
The existence of employer-employee relationship is not mandatory in the formation of workers' association. What
the law simply requires is that the members of the workers' association, at the very least, share the same interest.
The very definition of a workers' association speaks of "mutual aid and protection." The Court agrees with
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Samahan's argument that the right to form a workers' association is not exclusive to ambulant, intermittent and
itinerant workers. The option to form or join a union or a workers' association lies with the workers themselves,
and whether they have definite employers or not.
186. PICOP v. Laguesma GR NO. 101738 April 12, 2000

Managerial employees are ranked as Top Managers, Middle Managers and First Line Managers.
Top and Middle Managers have the authority to devise, implement and control strategic and operational policies
while the task of First-Line Managers is simply to ensure that such policies are carried out by the rank-and- file
employees of an organization. Under this distinction, "managerial employees" therefore fall in two (2) categories,
namely, the "managers" per se composed of Top and Middle Managers, and the "supervisors" composed of
First-Line Managers. Thus, the mere fact that an employee is designated "manager" does not ipso facto make him
one. Designation should be reconciled with the actual job description of the employee, for it is the job description
that determines the nature of employment.
187. Samahang Manggagawa sa Charter Chemical v. Charter Chemical GR NO. 168717 March 16, 2011
The mixture of rank-and-file and supervisory employees in petitioner union does not nullify its legal personality as
a legitimate labor organization.
The job descriptions indicate that the aforesaid employees exercise recommendatory managerial actions which
are not merely routinary but require the use of independent judgment, hence, falling within the definition of
supervisory employees. Nonetheless, the inclusion of the aforesaid supervisory employees in petitioner union
does not divest it of its status as a legitimate labor organization.
Re: standing of employer in certicifaction proceedings:

“Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for
certification election; such proceeding is non-adversarial and merely investigative, for the purpose thereof is to
determine which organization will represent the employees in their collective bargaining with the employer. The
choice of their representative is the exclusive concern of the employees; the employer cannot have any partisan
interest therein; it cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal
from it; not even a mere allegation that some employees participating in a petition for certification election are
actually managerial employees will lend an employer legal personality to block the certification election. The
employer's only right in the proceeding is to be notified or informed thereof.”
188. Cooperative Bank of Davao City v. Calleja GR NO. 77951 September 26, 1988
An employee therefore of such a cooperative who is a member and co-owner thereof cannot invoke the right to
collective bargaining for certainly an owner cannot bargain with himself or his co-owners. In the opinion of the
Solicitor General he correctly opined that employees of cooperatives who are themselves members of the
cooperative have no right to form or join labor organizations for purposes of collective bargaining for being
themselves co-owners of the cooperative.
However, in so far as it involves cooperatives with employees who are not members or co-owners thereof,
certainly such employees are entitled to exercise the rights of all workers to organization, collective bargaining,
negotiations and others as are enshrined in the Constitution and existing laws of the country.
189. San Juan Electric Cooperative v. MOLE GR NO. 77231 May 31, 1989
As regards employees of SAJELCO who are members-consumers, the rule is settled that they are not qualified to
form, join or assist labor organizations for purposes of collective bargaining. The reason for withholding from
employees of a cooperative who are members-co-owners the right to collective bargaining is clear: an owner
cannot bargain with himself.
However, employees who are not members-consumers may form, join or assist labor organizations for purposes
of collective bargaining notwithstanding the fact that employees of SAJELCO who are not members-consumers
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were employed ONLY because they are members of the immediate family of members-consumers. The fact
remains that they are not themselves members-consumers, and as such, they are entitled to exercise the rights of
all workers to organization, collective bargaining, negotiations and others as are enshrined in Section 8, Article III
and Section 3, Article XIII of the 1987 Constitution, Labor Code of the Philippines and other related laws.
190. United Pepsi-Cola Supervisory Union v. Laguesma GR NO. 122226 March 25, 1998
The term "manager" generally refers to "anyone who is responsible for subordinates and other organizational
resources." As a class, managers constitute three levels of a pyramid:
1. FIRST-LINE MANAGERS — The lowest level in an organization at which individuals are responsible
for the work of others is called first-line or first-level management. First-line managers direct operating
employees only; they do not supervise other managers.
2. MIDDLE MANAGERS — The term middle management can refer to more than one level in an
organization. Middle managers direct the activities of other managers and sometimes also those of
operating employees. Middle managers' principal responsibilities are to direct the activities that implement
their organizations' policies and to balance the demands of their superiors with the capacities of their
subordinates.
3. TOP MANAGERS — Composed of a comparatively small group of executives, top management is
responsible for the overall management of the organization. It establishes operating policies and guides
the organization's interactions with its environment.
Unlike supervisors who basically merely direct operating employees in line with set tasks assigned to them, route
managers are responsible for the success of the company's main line of business through management of their
respective sales teams. Such management necessarily involves the planning, direction, operation and evaluation
of their individual teams and areas which the work of supervisors does not entail. The route managers cannot thus
possibly be classified as mere supervisors because their work does not only involve, but goes far beyond, the
simple direction or supervision of operating employees to accomplish objectives set by those above them.
The guarantee of organizational right in Art. III, Section 8 infringed by a ban against managerial employees
forming a union. The right guaranteed in Art. III, Section 8 is subject to the condition that its exercise should be for
purposes "not contrary to law." In the case of Art. 245, there is a rational basis for prohibiting managerial
employees from forming or joining labor organizations: The rationale for this inhibition has been stated to be,
because if these managerial employees would belong to or be affiliated with a Union, the latter might not be
assured of their loyalty to the Union in view of evident conflict of interests. The Union can also become company-
dominated with the presence of managerial employees in Union membership.
191. Metrolab v. Confesor GR NO. 108855 February 28, 1996

Although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor organization to
managerial employees, jurisprudence has extended this prohibition to confidential employees or 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.
The rationale behind the exclusion of confidential employees from the bargaining unit of the rank and file
employees and their disqualification to join any labor organization was succinctly discussed in Philips Industrial
Development v. NLRC:
“This rationale holds true also for confidential employees such as accounting personnel, radio and telegraph
operators, who having access to confidential information, may become the source of undue advantage. Said
employees may act as a spy or spies of either party to a collective bargaining agreement. This is specially true in
the present case where the petitioning Union is already the bargaining agent of the rank-and-file employees in the
establishment. To allow the confidential employees to join the existing Union of the rank-and-file would be in
violation of the terms of the Collective Bargaining Agreement wherein this kind of employees by the nature of their
functions/positions are expressly excluded.”
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The dangers sought to be prevented, particularly the threat of conflict of, interest and espionage, are not
eliminated by non-membership of Metrolab's executive secretaries or confidential employees in the Union.
Forming part of the bargaining unit, the executive secretaries stand to benefit from any agreement executed
between the Union and Metrolab. Such a scenario, thus, gives rise to a potential conflict between personal
interests and their duty as confidential employees to act for and in behalf of Metrolab. They do not have to be
union members to affect or influence either side.
192. San Miguel Corporation Supervisors and Exempt Union v. Laguesma GR NO. 110399
August 15, 1997
Confidential employees are those who (1) assist or act in a confidential capacity, (2) to persons who formulate,
determine, and effectuate management policies in the field of labor relations. The two criteria are cumulative, and
both must be met if an employee is to be considered a confidential employee — that is, the confidential
relationship must exist between the employee and his supervisor, and the supervisor must handle the prescribed
responsibilities relating to labor relations.
The exclusion from bargaining units of employees who, in the normal course of their duties, become aware of
management policies relating to labor relations is a principal objective sought to be accomplished by the
"confidential employee rule." The broad rationale behind this rule is that employees should not be placed in a
position involving a potential conflict of interests. "Management should not be required to handle labor relations
matters through employees who are represented by the union with which the company is required to deal and
who in the normal performance of their duties may obtain advance information of the company's position with
regard to contract negotiations, the disposition of grievances, or other labor relations matters."
193. San Miguel Foods v. San Miguel Corporation Supervisors and Exempt Union GR NO. 146206
August 1, 2011
A confidential employee is one entrusted with confidence on delicate, or with the custody, handling or care and
protection of the employer's property. Confidential employees, such as accounting personnel, should be excluded
from the bargaining unit, as their access to confidential information may become the source of undue advantage.
However, such fact does not apply to the position of Payroll Master and the whole gamut of employees who, as
perceived by petitioner, has access to salary and compensation data. The CA correctly held that the position of
Payroll Master does not involve dealing with confidential labor relations information in the course of the
performance of his functions. Since the nature of his work does not pertain to company rules and regulations and
confidential labor relations, it follows that he cannot be excluded from the subject bargaining unit.
194. Standard Chartered Bank Employees Union v. Standard Chartered Bank GR NO. 161933
April 22, 2008
As regards the qualification of bank cashiers as confidential employees, National Association of Trade Unions
(NATU) — Republic Planters Bank Supervisors Chapter v. Torres declared that they are confidential employees
having control, custody and/or access to confidential matters, e.g., the branch's cash position, statements of
financial condition, vault combination, cash codes for telegraphic transfers, demand drafts and other negotiable
instruments, pursuant to Sec. 1166.4 of the Central Bank Manual regarding joint custody, and therefore,
disqualified from joining or assisting a union; or joining, assisting or forming any other labor organization.
Golden Farms, Inc. v. Ferrer-Calleja meanwhile stated that "confidential employees such as accounting
personnel, radio and telegraph operators who, having access to confidential information, may become the source
of undue advantage. Said employee(s) may act as spy or spies of either party to a collective bargaining
agreement".
Finally, in Philips Industrial Development, Inc. v. National Labor Relations Commission, the Court designated
personnel staff, in which human resources staff may be qualified, as confidential employees because by the very
nature of their functions, they 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.
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D. Effect of commingling of Membership
195. Republic v. Kawashima Textile GR NO. 160352 July 23, 2008

When the issue of the effect of mingling was brought to the fore in Toyota,48 the Court, citing Article 245 of the
Labor Code, as amended by R.A. No. 6715, held:
“Clearly, based on this provision, a labor organization composed of both rank-and-file and supervisory employees
is no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not being
one, an organization which carries a mixture of rank-and-file and supervisory employees cannot possess any of
the rights of a legitimate labor organization, including the right to file a petition for certification election for the
purpose of collective bargaining. x x x”
Then came Tagaytay Highlands Int’l. Golf Club, Inc. v. Tagaytay Highlands Employees Union-PGTWO in which
the Court abandoned the view in Toyota and Dunlop and reverted to its pronouncement in Lopez that while there
is a prohibition against the mingling of supervisory and rank-and-file employees in one labor organization, the
Labor Code does not provide for the effects thereof. Thus, the Court held that after a labor organization has been
registered, it may exercise all the rights and privileges of a legitimate labor organization. Any mingling between
supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not among the
grounds for cancellation of its registration, unless such mingling was brought about by misrepresentation, false
statement or fraud under Article 239 of the Labor Code.
Re: Role of employer in petition for certification election

Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for
certification election; such proceeding is non-adversarial and merely investigative, for the purpose thereof is to
determine which organization will represent the employees in their collective bargaining with the employer. The
choice of their representative is the exclusive concern of the employees; the employer cannot have any partisan
interest therein; it cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal
from it; not even a mere allegation that some employees participating in a petition for certification election are
actually managerial employees will lend an employer legal personality to block the certification election. The
employer's only right in the proceeding is to be notified or informed thereof.
196. Holy Child Catholic School v. Sto. Tomas GR NO. 179146 July 23, 2013
In Tagaytay Highlands International Golf Club, Inc. v. Tagaytay International Highlands Employees Union -
PTGWO, the Court held that after a labor organization has been registered, it may exercise all the rights and
privileges of a legitimate labor organization. Any mingling between supervisory and rank-and-file employees in its
membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration,
unless such mingling was brought about by misrepresentation, false statement or fraud under Article 239 of the
Labor Code.
While the latest issuance is R.A. No. 9481, the 1997 Amended Omnibus Rules, as interpreted by the Court in
Tagaytay Highlands, San Miguel and Air Philippines, had already set the tone for it. Toyota and Dunlop no longer
hold sway in the present altered state of the law and the rules. When a similar issue confronted this Court close to
three years later, the above ruling was substantially quoted in Samahang Manggagawa sa Charter Chemical
Solidarity of Unions in the Philippines for Empowerment and Reforms (SMCC-Super) v. Charter Chemical and
Coating Corporation. In unequivocal terms, We reiterated that the alleged inclusion of supervisory employees in a
labor organization seeking to represent the bargaining unit of rank-and-file employees does not divest it of its
status as a legitimate labor organization. Following the doctrine laid down in Kawashima and SMCC-Super, it
must be stressed that petitioner cannot collaterally attack the legitimacy of private respondent by praying for the
dismissal of the petition for certification election.
E. Rights and Conditions of Membership

1. Union Members
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197. Victoriano v. Elizalde Roper Workers’ Union GR NO. L-25246 September 12, 1974
Republic Act No. 3350 merely excludes ipso jure from the application and coverage of the closed shop agreement
the employees belonging to any religious sects which prohibit affiliation of their members with any labor
organization. What the exception provides, therefore, is that members of said religious sects cannot be compelled
or coerced to join labor unions even when said unions have closed shop agreements with the employers; that in
spite of any closed shop agreement, members of said religious sects cannot be refused employment or dismissed
from their jobs on the sole ground that they are not members of the collective bargaining union.
It is clear, therefore, that the assailed Act, far from infringing the constitutional provision on freedom of
association, upholds and reinforces it. It does not prohibit the members of said religious sects from affiliating with
labor unions. It still leaves to said members the liberty and the power to affiliate, or not to affiliate, with labor
unions. If, notwithstanding their religious beliefs, the members of said religious sects prefer to sign up with the
labor union, they can do so. If in deference and fealty to their religious faith, they refuse to sign up, they can do
so; the law does not coerce them to join; neither does the law prohibit them from joining; and neither may the
employer or labor union compel them to join. Republic Act No. 3350, therefore, does not violate the constitutional
provision on freedom of association.
198. BPI v. BPI Employees Union GR NO. 1643011 August 10, 2010
Re: Union shop vs. Closed shop
"Union security" is a generic term which is applied to and comprehends "closed shop," "union shop,"
"maintenance of membership" or any other form of agreement which imposes upon employees the obligation to
acquire or retain union membership as a condition affecting employment. There is union shop when all new
regular employees are required to join the union within a certain period for their continued employment. There is
maintenance of membership shop when employees, who are union members as of the effective date of the
agreement, or who thereafter become members, must maintain union membership as a condition for continued
employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated. A
closed-shop, on the other hand, may be defined as an enterprise in which, by agreement between the employer
and his employees or their representatives, no person may be employed in any or certain agreed departments of
the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good
standing of a union entirely comprised of or of which the employees in interest are a part.
Re: exclusions on closed shop or union-shop agreement

All employees in the bargaining unit covered by a Union Shop Clause in their CBA with management are subject
to its terms. However, under law and jurisprudence, the following kinds of employees are exempted from its
coverage, namely, employees who at the time the union shop agreement takes effect are bona fide members of a
religious organization which prohibits its members from joining labor unions on religious grounds; employees
already in the service and already members of a union other than the majority at the time the union shop
agreement took effect; confidential employees who are excluded from the rank and file bargaining unit; and
employees excluded from the union shop by express terms of the agreement.
The Union Shop Clause in the CBA simply states that "new employees" who during the effectivity of the CBA
"may be regularly employed" by the Bank must join the union within thirty (30) days from their regularization.
Petitioner failed to point to any provision in the CBA expressly excluding from the Union Shop Clause new
employees who are "absorbed" as regular employees from the beginning of their employment. What is indubitable
from the Union Shop Clause is that upon the effectivity of the CBA, petitioner's new regular employees
(regardless of the manner by which they became employees of BPI) are required to join the Union as a condition
of their continued employment.
199. Slord Development Corporation v. Noya GR NO. 232687 February 4, 2019

While not explicitly mentioned in the Labor Code, case law recognizes that dismissal from employment due to the
enforcement of the union security clause in the CBA is another just cause for termination of employment. Similar
to the enumerated just causes in the Labor Code, the violation of a union security clause amounts to a
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commission of a wrongful act or omission out of one's own volition; hence, it can be said that the dismissal
process was initiated not by the employer but by the employee's indiscretion. Further, a stipulation in the CBA
authorizing the dismissal of employees is of equal import as the statutory provisions on dismissal under the Labor
Code, since a CBA is the law between the company and the union and compliance therewith is mandated by the
express policy to give protection to labor; thus, there is parallel treatment between just causes and violation of the
union security clause.
To validly terminate the employment of an employee through the enforcement of the union security clause, the
following requisites must concur: (1) the union security clause is applicable; (2) the union is requesting for the
enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the decision
of the union to expel the employee from the union.
2. Legitimate Labor Organizations
200. Del Pilar Academy v. Del Pilar Academy Union GR NO. 170112 April 30, 2008
The collection of agency fees in an amount equivalent to union dues and fees, from employees who are not union
members, is recognized by Article 248(e). Employees of an appropriate CBU who are not members of the
recognized collective bargaining agent may be assessed reasonable fees equivalent to the dues and other fees
paid by the recognized collective bargaining agent, if such non-union members accept the benefits under the
collective bargaining agreement.
No requirement of written authorization from the non-union employees is needed to effect a valid check off. Article
248(e) makes it explicit that Article 241, paragraph (o), requiring written authorization is inapplicable to non-union
members, especially in this case where the non-union employees receive several benefits under the CBA. The
employee's acceptance of benefits resulting from a collective bargaining agreement justifies the deduction of
agency fees from his pay and the union's entitlement thereto. In this aspect, the legal basis of the union's right to
agency fees is neither contractual nor statutory, but quasi-contractual, deriving from the established principle that
non-union employees may not unjustly enrich themselves by benefiting from employment conditions negotiated by
the bargaining union.
201. Palacol v. Ferrer-Calleja GR NO. 85333 February 26, 1990

Substantial compliance is not enough in view of the fact that the special assessment will diminish the
compensation of the union members. Their express consent is required, and this consent must be obtained in
accordance with the steps outlined by law, which must be followed to the letter.
Under Art 241 (n), the Union must submit to the Company a written resolution of a majority of all the members at a
general membership meeting duly called for the purpose. In addition, the secretary of the organization must
record the minutes of the meeting which, in turn, must include, among others, the list of all the members present
as well as the votes cast. Paragraph (o) on the other hand requires an individual written authorization duly signed
by every employee in order that a special assessment may be validly checkedoff. The contention that the
disauthorizations are not valid for being collective in form deserves no merit for the simple reason there is nothing
in the law which requires that the disauthorization must be in individual form.
202. Gabriel v. Secretary of Labor GR NO. 115949 March 16, 2000

In check-off, the employer, on agreement with the Union, or on prior authorization from employees, deducts union
dues or agency fees from the latter’s wages and remits them directly to the union. It assures continuous funding
for the labor organization. As this Court has acknowledged, the system of check-off is primarily for the benefit of
the union and only indirectly for the individual employees. Article 241 has three (3) requisites for the validity of the
special assessment for union’s incidental expenses, attorney’s fees and representation expenses:
1) authorization by a written resolution of the majority of all the members at the general membership meeting
called for the purpose;
2) secretary’s record of the minutes of the meeting; and
3) individual written authorization for check off duly signed by the employees concerned.
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203. Johnson and Johnson Labor Union - FFW v. Director of Labor Relations GR NO. 76427
February 21, 1989
Section 5, Article XIII of the petitioner-union's constitution and by-laws earlier aforequoted is self-executory. The
financial aid extended to any suspended or terminated union member is realized from the contributions declared
to be compulsory under the said provision in the amount of seventy-five centavos due weekly from each union
member. The nature of the said contributions being compulsory and the fact that the purpose as stated is for
financial aid clearly indicate that individual payroll authorizations of the union members are not necessary.
The petitioner-union's constitution and by-laws govern the relationship between and among its members. As in the
interpretation of contracts, if the terms are clear and leave no doubt as to the intention of the parties, the literal
meaning of the stipulations shall control.
204. Peninsula Employees Union v. Esquivel GR No. 218454 December 1, 2016

The recognized collective bargaining union which successfully negotiated the CBA with the employer is given the
right to collect a reasonable fee called "agency fee" from non-union members who are employees of the
appropriate bargaining unit, in an amount equivalent to the dues and other fees paid by union members, in case
they accept the benefits under the CBA. Case law interpreting Article 250 (n) and (o), mandates the submission of
3 documentary requisites in order to justify a valid levy of increased union dues. These are:
1) an authorization by a written resolution of the majority of all the members at the general membership
meeting duly called for the purpose;
2) the secretary's record of the minutes of the meeting, which shall include the list of all members present,
the votes cast, the purpose of the special assessment or fees and the recipient of such assessment or
fees; and
3) individual written authorizations for check-off duly signed by the employees concerned
205. Ergonomic Systems v. Enaje GR No. 195163 December 13, 2017

The Federation could not demand the dismissal from employment of the union officers on the basis of the union
security clause found in the CBA between ESPI and the local union. Only the local union may invoke the union
security clause in the CBA.
Even assuming that the union officers were disloyal to the Federation and committed acts inimical to its interest,
such circumstance did not give the Federation the prerogative to demand the union officers' dismissal pursuant to
the union security clause which, in the first place, only the union may rightfully invoke. Certainly, it does not give
the Federation the privilege to act independently of the local union. At most, what the Federation could do is to
refuse to recognize the local union as its affiliate and revoke the charter certificate it issued to the latter. In fact,
even if the local union itself disaffiliated from the Federation, the latter still has no right to demand the dismissal
from employment of the union officers and members because concomitant to the union's prerogative to affiliate
with a federation is its right to disaffiliate therefrom.
206. Philippine Skylanders v. NLRC GR No. 127374 January 31, 2002

The sole essence of affiliation is to increase, by collective action, the common bargaining power of local unions for
the effective enhancement and protection of their interests. Admittedly, there are times when without succor and
support local unions may find it hard, unaided by other support groups, to secure justice for themselves.
The mere act of disaffiliation did not divest PSEA of its own personality; neither did it give PAFLU the license to
act independently of the local union. Recreant to its mission, PAFLU cannot simply ignore the demands of the
local chapter and decide for its welfare. PAFLU might have forgotten that as an agent it could only act in
representation of and in accordance with the interests of the local union. The complaint then for unfair labor
practice lodged by PAFLU against PSI, PSEA and their respective officers, having been filed by a party which has
no legal personality to institute the complaint, should have been dismissed at the first instance for failure to state a
cause of action. Policy considerations dictate that in weighing the claims of a local union as against those of a
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national federation, those of the former must be preferred. Parenthetically though, the desires of the mother
federation to protect its locals are not altogether to be shunned.
207. Villar v. Inciong GR No. L-50283 April 20, 1983

Disaffiliation from a labor union is implicit in the freedom of association ordained by the Constitution. But this
Court has laid down the ruling that a closed shop is a valid form of union security, and such provision is not a
restriction of the right of freedom of association guaranteed by the Constitution. In the case at bar, it appears at an
undisputed fact that on February 15,1977, the Company and the Amigo-Employees Union-PAFLU entered into a
Collective Bargaining Agreement with a union security clause provided for in Article XII thereof which is a
reiteration of the same clause in the old CBA. The quoted stipulation for closed-shop is clear and unequivocal and
it leaves no room for doubt that the employer is bound, under the collective bargaining agreement, to dismiss the
employees, herein petitioners, for non-union membership. Petitioners became non-union members upon their
expulsion from the general membership of the Amigo Employees Union-PAFLU on March 15, 1977 pursuant to
the Decision of the PAFLU national president.
208. ANGLO v. Samahan ng mga Manggagawang Nagkakaisa sa Manila Bay

All employees enjoy the right to self-organization and to form and join labor organizations of their own choosing
for the purpose of collective bargaining. This Court is not ready to bend this principle to yield to a mere procedural
defect, to wit: failure to observe certain procedural requirements for a valid disaffiliation. Non-compliance with the
procedure on disaffiliation, being premised on purely technical right of self-organization. We quote, with approval,
the findings of herein public respondent, that: ". . . the resolution of the general membership ratifying the
disaffiliation action initiated by the Board, substantially satisfies the procedural requirements for disaffiliation. No
doubt was raised on the support of the majority of the union members on the decision to disaffiliate." This, to our
mind, is clearly supported by the evidence. It is clear under the facts that respondent union's members have
unanimously decided to disaffiliate from the mother federation and ANGLO has nothing to offer in dispute other
than the law prohibiting the disaffiliation outside the freedom period.
Settled is the rule that a local union has the right to disaffiliate from its mother union when circumstances warrant.
Generally, a labor union may disaffiliate from the mother union to form a local or independent union only during
the 60-day freedom period immediately preceding the expiration of the CBA. However, even before the onset of
the freedom period, disaffiliation may be carried out when there is a shift of allegiance on the part of the majority
of the members of the union.
209. Chrysler Philippines Labor Union v. Estrella GR No. L-46509 November 16, 1978
There is nothing in the Labor Code nor in the implementing rules which provides that a duly registered local union
which affiliates with a national union or federation loses its legal personality, much less is there any provision
which requires that upon the disaffiliation of said local union, it should register anew to be entitled to all the rights
and privileges of a duly registered labor union. On the contrary, the Labor Code expressly allows disaffiliation for
the purpose of operating as an independent labor organization (Art. 241). petitioner has legal personality to file a
petition for certification election, notwithstanding its disaffiliation from ALU.
210. AWU-PTGWO v. NLRC GR No. 87266 July 30, 1990

While it is true that AWUM as a local union, being an entity separate and distinct from AWU, is free to serve the
interest of all its members and enjoys the freedom to disaffiliate, such right to disaffiliate may be exercised, and is
thus considered a protected labor activity, only when warranted by circumstances. Generally, a labor union may
disaffiliate from the mother union to form a local or independent union only during the 60-day freedom period
immediately preceding the expiration of the CBA. Even before the onset of the freedom period (and despite the
closed-shop provision in the CBA between the mother union and management) disaffiliation may still be carried
out, but such disaffiliation must be effected by a majority of the members in the bargaining unit. This happens
when there is a substantial shift in allegiance on the part of the majority of the members of the union. In such a
case, however, the CBA continues to bind the members of the new or disaffiliated and independent union up to
the CBA's expiration date.
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211. Benguet Consolidated v. BCI Employees & Workers Union GR NO. L-24711 April 30, 1968
The principle of substitution, formulated by the NLRB as its initial compromise solution to the problem facing it
when there occurs a shift in employees' union allegiance after the execution of a bargaining contract with their
employer, merely states that even during the effectivity of a collective bargaining agreement executed between
employer and employees thru their agent, the employees can change said agent but the contract continues to
bind them up to its expiration date. They may bargain however for the shortening of said expiration date.
Stated otherwise, the "substitutionary" doctrine only provides that the employees cannot revoke the validly
executed collective bargaining contract with their employer by the simple expedient of changing their bargaining
agent. And it is in the light of this that the phrase "said new agent would have to respect said contract" must be
understood. It only means that the employees, thru their new bargaining agent, cannot renege on their collective
bargaining contract, except of course to negotiate with management for the shortening thereof.
The "substitutionary" doctrine, therefore, cannot be invoked to support the contention that a newly certified
collective bargaining agent automatically assumes all the personal undertakings — like the no-strike stipulation
here — in the collective bargaining agreement made by the deposed union.
212. Elisco-Elirol Labor Union v. Noriel GR NO. L-41955 December 29, 1977
Petitioner union to whom the employees owe their allegiance has from the beginning expressly avowed that it
does not intend to change and/or amend the provisions of the present collective bargaining agreement but only to
be given the chance to enforce the same since there is a shift of allegiance in the majority of the employees at
respondent company. In formulating the "substitutionary" doctrine, the only consideration involved as the
employees' interest in the existing bargaining agreement. The agent's interest never entered the picture.
The locals are separate and distinct units primarily designed to secure and maintain an equality of bargaining
power between the employer and their employee-members in the economic struggle for the fruits of the joint
productive effort of labor and capital; and the association of the locals into the national union (as PAFLU) was in
furtherance of the same end. Yet the locals remained the basic units of association, free to serve their own and
the common interest of all, subject to the restraints imposed by the Constitution and By- Laws of the Association,
and free also to renounce the affiliation for mutual welfare upon the terms laid down in the agreement which
brought it into existence.
F. The Collective Bargaining Unit
213. Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor Union GR NO.
121084 February 19, 1997
According to Rothenberg, an appropriate bargaining unit is a group of employees of a given employer, composed
of all or less than the entire body of employees, which the collective interests of all the employees, consistent with
equity to the employer indicate to be best suited to serve reciprocal rights and duties of the parties under the
collective bargaining provisions of law.
The rationale behind the Code's exclusion of supervisors from unions of rank-and-file employees is that such
employees, while in the performance of supervisory functions, become the alter ego of management in the
making and the implementing of key decisions at the submanagerial level. Certainly, it would be difficult to find
unity or mutuality of interests in a bargaining unit consisting of a mixture of rank-and-file and supervisory
employees. And this is so because the fundamental test of a bargaining unit's acceptability is whether or not such
a unit will best advance to all employees within the unit the proper exercise of their collective bargaining rights.
214. Dunlop Slazenger v. Secretary of Labor GR NO. 131248 December 11, 1998
Supervisors can be an appropriate bargaining unit. This is in accord with our repeated ruling that" [a]n appropriate
bargaining unit is a group of employees of a given employer, composed of all or less than the entire body of
employees, which the collective interests of all the employees, consistent with equity to the employer, indicate to
be best suited to serve reciprocal rights and duties of the parties under the collective bargaining provisions of law.
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Otherwise stated, it is a legal collectivity for collective bargaining purposes whose members have substantially
mutual bargaining interests in terms and conditions of employment as will assure to all employees their collective
bargaining rights. A unit to be appropriate must effect a grouping of employees who have substantial, mutual
interests in wages, hours, working conditions and other subjects of collective bargaining."
215. International School Alliance of Educators v. Quisumbing GR NO. 128845 June 1, 2000
A bargaining unit is "a group of employees of a given employer, comprised of all or less than all of the entire body
of employees, consistent with equity to the employer indicate to be the best suited to serve the reciprocal rights
and duties of the parties under the collective bargaining provisions of the law."
The factors in determining the appropriate collective bargaining unit are:

1) the will of the employees (Globe Doctrine);
2) affinity and unity of the employees' interest, such as substantial similarity of work and duties, or similarity
of compensation and working conditions (Substantial Mutual Interests Rule);
3) prior collective bargaining history; and
4) similarity of employment status.
The basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the combination
which will best assure to all employees the exercise of their collective bargaining rights. Using these factors, to
include foreign-hires in a bargaining unit with local hires would not assure either group the exercise of their
respective collective bargaining rights.
G. Determination of SEBA

1. Request for Certification
2. Unorganized establishment

216. Progressive Development Corporation-Pizza Hut v. Laguesma GR NO. 115077 April 18, 1997
After a labor organization has filed the necessary papers and documents for registration, it becomes mandatory
for the Bureau of Labor Relations to check if the requirements under Article 234 have been sedulously complied
with. If its application for registration is vitiated by falsification and serious irregularities, especially those
appearing on the face of the application and the supporting documents, a labor organization should be denied
recognition as a legitimate labor organization. And if a certificate of recognition has been issued, the propriety of
the labor organization’s registration could be assailed directly through cancellation of registration proceedings in
accordance with Articles 238 and 239 of the Labor Code, or indirectly, by challenging its petition for the issuance
of an order for certification election.
These measures are necessary — and may be undertaken simultaneously — if the spirit behind the Labor Code’s
requirements for registration are to be given flesh and blood. Registration requirements specifically afford a
measure of protection to unsuspecting employees who may be lured into joining unscrupulous or fly-by-night
unions whose sole purpose is to control union funds or use the labor organization for illegitimate ends. Such
requirements are a valid exercise of the police power, because the activities in which labor organizations,
associations and unions of workers are engaged directly affect the public interest and should be protected.
Furthermore, the Labor Code itself grants the Bureau of Labor Relations a period of thirty (30) days within which
to review all applications for registration. The thirty-day period ensures that any action taken by the Bureau of
Labor Relations is made in consonance with the mandate of the Labor Code, which, it bears emphasis,
specifically requires that the basis for the issuance of a certificate of registration should be compliance with the
requirements for recognition under Article 234.
The Labor Code requires that in organized and unorganized establishments, a petition for certification election
must be filed by a legitimate labor organization. The acquisition of rights by any union or labor organization,
particularly the right to file a petition for certification election, first and foremost, depends on whether or not
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the labor organization has attained the status of a legitimate labor organization.
217. UST Faculty Union v. Bitonio GR NO. 131235 November 16, 1999
A union election is held pursuant to the union’s constitution and bylaws, and the right to vote in it is enjoyed only
by union members. A union election should be distinguished from a certification election, which is the process of
determining, through secret ballot, the sole and exclusive bargaining agent of the employees in the appropriate
bargaining unit, for purposes of collective bargaining. Specifically, the purpose of a certification election is to
ascertain whether or not a majority of the employees wish to be represented by a labor organization and, in the
affirmative case, by which particular labor organization.
In a certification election, all employees belonging to the appropriate bargaining unit can vote. Therefore, a union
member who likewise belongs to the appropriate bargaining unit is entitled to vote in said election. However, the
reverse is not always true; an employee belonging to the appropriate bargaining unit but who is not a member of
the union cannot vote in the union election, unless otherwise authorized by the constitution and bylaws of the
union. Verily, union affairs and elections cannot be decided in a non-union activity.
218. NUWHRAIN v. Secretary of Labor GR NO. 181531 July 31, 2009

Re: Right to join the certification election
In a certification election, all rank and file employees in the appropriate bargaining unit, whether probationary or
permanent are entitled to vote. The Code makes no distinction as to their employment status as basis for eligibility
in supporting the petition for certification election. The law refers to "all" the employees in the bargaining unit. All
they need to be eligible to support the petition is to belong to the "bargaining unit."
The provision in the CBA disqualifying probationary employees from voting cannot override the
Constitutionallyprotected right of workers to self-organization, as well as the provisions of the Labor Code and its
Implementing Rules on certification elections and jurisprudence thereon. A law is read into, and forms part of, a
contract. Provisions in a contract are valid only if they are not contrary to law, morals, good customs, public order
or public policy.
Re: Double Majority Rule

It is well-settled that under the so-called "double majority rule," for there to be a valid certification election, majority
of the bargaining unit must have voted AND the winning union must have garnered majority of the valid votes
cast. It bears reiteration that the true importance of ascertaining the number of valid votes cast is for it to serve as
basis for computing the required majority, and not just to determine which union won the elections.
Re: Runo-off election

A run-off election refers to an election between the labor unions receiving the two (2) highest number of votes in a
certification or consent election with three (3) or more choices, where such a certified or consent election results
in none of the three (3) or more choices receiving the majority of the valid votes cast; provided that the total
number of votes for all contending unions is at least fifty percent (50%) of the number of votes cast. With 346
votes cast, 337 of which are now deemed valid and HIMPHLU having only garnered 169 and petitioner having
obtained 151 and the choice "NO UNION" receiving 1 vote, then the holding of a run-off election between
HIMPHLU and petitioner is in order.
219. Yokohama Tire v. Yokohama Employees Union GR NO. 159553 December 10, 2007
Section 2, Rule XII, the rule in force during the November 23, 2001 certification election clearly, unequivocally
and unambiguously allows dismissed employees to vote during the certification election if the case they filed
contesting their dismissal is still pending at the time of the election.
220. Capitol Medical Center Alliance of Concerned Employees v. Laguesma GR NO. 118915
February 4, 1997
"A 'deadlock' is xxx the counteraction of things producing entire stoppage; xxx There is a deadlock when there is a
complete blocking or stoppage resulting from the action of equal and opposed forces xxx. The word is
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synonymous with the word impasse, which xxx 'presupposes reasonable effort at good faith bargaining which,
despite noble intentions, does not conclude in agreement between the parties. ' "
Although there is no "deadlock" in its strict sense as there is no "counteraction" of forces present in this case nor
"reasonable effort at good faith bargaining, "such can be attributed to CMC's fault as the bargaining proposals of
respondent union were never answered by CMC. What happened in this case is worse than a bargaining
deadlock for CMC employed all legal means to block the certification of respondent union as the bargaining agent
of the rank-and-file; and use it as its leverage for its failure to bargain with respondent union. Thus, we can only
conclude that CMC was unwilling to negotiate and reach an agreement with respondent union. CMC has not at
any instance shown willingness to discuss the economic proposals given by respondent union.
If the law proscribes the conduct of a certification election when there is a bargaining deadlock submitted to
conciliation or arbitration, with more reason should it not be conducted if, despite attempts to bring an employer to
the negotiation table by the certified bargaining agent, there was "no reasonable effort in good faith" on the
employer to bargain collectively.
221. Kaisahan ng Manggagawang Pilipino v. Trajano GR NO. 75810 September 9, 1991

No bargaining deadlock. The stark, incontrovertible fact is that from February 27, 1981 when NAFLU was
proclaimed the exclusive bargaining representative of all VIRON employees to April 11, 1985 when KAMPIL filed
its petition for certification election or a period of more than four (4) years, no collective bargaining agreement was
ever executed, and no deadlock ever arose from negotiations between NAFLU and VIRON resulting in
conciliation proceedings or the filing of a valid strike notice.
H. Collective Bargaining

222. Kiok Loy v. NLRC GR NO. L-54334 January 22, 1986
Collective bargaining which is defined as negotiations towards a collective agreement, is one of the democratic
frameworks under the New Labor Code, designed to stabilize the relation between labor and management and to
create a climate of sound and stable industrial peace. It is a mutual responsibility of the employer and the Union
and is characterized as a legal obligation. So much so that Article 249, par. (g) of the Labor Code makes it an
unfair labor practice for an employer. The mechanics of collective bargaining is set in motion only when the
following jurisdictional preconditions are present, namely:
1) possession of the status of majority representation of the employees' representative in accordance with
any of the means of selection or designation provided for by the Labor Code;
2) proof of majority representation; and
3) a demand to bargain under Article 251, par. (a) of the New Labor Code all of which preconditions are
undisputedly present in the instant case.
A Company's refusal to make counter proposal if considered in relation to the entire bargaining process, may
indicate bad faith and this is specially true where the Union's request for a counter proposal is left unanswered.
223. Union of Filipro Employees v. Nestle Philippines GR NO. 158930 March 3, 2008
It is clear and explicit from Article 253-A that any agreement on such other provisions of the CBA shall be given
retroactive effect only when it is entered into within six (6) months from its expiry date. If the agreement was
entered into outside the six (6) month period, then the parties shall agree on the duration of the retroactivity
thereof.
Articles 253 and 253-A mandate the parties to keep the status quo and to continue in full force and effect the
terms and conditions of the existing agreement during the 60-day period prior to the expiration of the old CBA
and/or until a new agreement is reached by the parties. Consequently, there being no new agreement reached,
the automatic renewal clause provided for by the law which is deemed incorporated in all CBAs, provides the
reason why the new CBA can only be given a prospective effect.
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224. UST Faculty Union v. UST GR NO. 180892 April 7, 2009
It is not the duty or obligation of respondents to inquire into the validity of the election of the Gamilla Group. Such
issue is properly an intra-union controversy subject to the jurisdiction of the med-arbiter of the DOLE.
Respondents could not have been expected to stop dealing with the Gamilla Group on the mere accusation of the
Mariño Group that the former was not validly elected into office.
225. General Milling Coporation v. CA GR NO. 146728 February 11, 2004

The law mandates that the representation provision of a CBA should last for five years. The relation between
labor and management should be undisturbed until the last 60 days of the fifth year. Hence, it is indisputable that
when the union requested for a renegotiation of the economic terms of the CBA on November 29, 1991, it was still
the certified collective bargaining agent of the workers, because it was seeking said renegotiation within five (5)
years from the date of effectivity of the CBA on December 1, 1988. The unions proposal was also submitted within
the prescribed 3-year period from the date of effectivity of the CBA, albeit just before the last day of said period. It
was obvious that GMC had no valid reason to refuse to negotiate in good faith with the union. For refusing to send
a counter-proposal to the union and to bargain anew on the economic terms of the CBA, the company committed
an unfair labor practice under Article 248 of the Labor Code.
Article 253 mandates the parties to keep the status quo while they are still in the process of working out their
respective proposal and counter proposal. The general rule is that when a CBA already exists, its provision shall
continue to govern the relationship between the parties, until a new one is agreed upon. The rule necessarily
presupposes that all other things are equal. That is, that neither party is guilty of bad faith. However, when one of
the parties abuses this grace period by purposely delaying the bargaining process, a departure from the general
rule is warranted.
226. PAL v. PALEA GR NO. 142399 March 12, 2008

It is a well-settled doctrine that the benefits of a CBA extend to the laborers and employees in the collective
bargaining unit, including those who do not belong to the chosen bargaining labor organization. Otherwise, it
would be a clear case of discrimination. Hence, to be entitled to the benefits under the CBA, the employees must
be members of the bargaining unit, but not necessarily of the labor organization designated as the bargaining
agent.
227. FVC Labor Union v. SAMAMA-FVC-SIGLO GR NO. 176249 November 27, 2009
While the parties may agree to extend the CBAs original five-year term together with all other CBA provisions, any
such amendment or term in excess of five years will not carry with it a change in the union’s exclusive collective
bargaining status. By express provision of the above-quoted Article 253-A, the exclusive bargaining status cannot
go beyond five years and the representation status is a legal matter not for the workplace parties to agree upon.
In other words, despite an agreement for a CBA with a life of more than five years, either as an original provision
or by amendment, the bargaining unions exclusive bargaining status is effective only for five years and can be
challenged within sixty (60) days prior to the expiration of the CBAs first five years.
228. San Miguel Corporation Employees Union v. Confesor GR NO. 111262 September 19, 1996
Article 253 -A states that the CBA has a term of five (5) years instead of three years, before the amendment of the
law as far as the representation aspect is concerned. All other provisions of the CBA shall be negotiated not later
than three (3) years after its execution. The "representation aspect" refers to the identity and majority status of the
union that negotiated the CBA as the exclusive bargaining representative of the appropriate bargaining unit
concerned. "All other provisions" simply refers to the rest of the CBA, economic as well as non-economic
provisions, except representation.
As a matter of policy the parties are encouraged to enter into a renegotiated CBA with a term which would
coincide with the aforesaid five (5) year term of the bargaining representative. In the event however, that the
parties, by mutual agreement, enter into a renegotiated contract with a term of three (3) years or one which does
not coincide with the said 5-year term, and said agreement is ratified by majority of the members in the bargaining
unit, the subject contract is valid and legal and therefore, binds the contracting parties. The same will however not
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adversely affect the right of another union to challenge the majority status of the incumbent bargaining agent
within sixty (60) days before the lapse of the original five (5) year term of the CBA.
229. Hong Kong Bank Independent Labor Union v. HSBC GR NO. 218390 February 28, 2018
A collective bargaining agreement or CBA is the negotiated contract between a legitimated labor organization and
the employer concerning wages, hours of work and all other terms and conditions of employment in a bargaining
unit. As in all contracts the parties in a CBA may deem convenient provided these are not contrary to law, morals,
good customs, public order or public policy. Thus, where the CBA is clear and unambiguous, it becomes the law
between the parties and compliance therewith is mandated but the express policy of the law.
It is clear from the arguments and evidence submitted that the Plan was never made part of the CBA. As a matter
of fact, HBILU vehemently rejected the Plan’s incorporation into the agreement. The subsequent implementation
of the Plan’s external credit check provisions in relation to employee loan applications under the CA was then an
imposition solely by HSBC. In this respect, this Court is of the view that tolerating HSBC’s conduct would be
tantamount to allowing a blatant circumvention of Article 253 of the Labor Code. It would contravene the express
prohibition against the unilateral modification of a CBA during its subsistence and even thereafter until a new
agreement is reached.
230. Divine World University v. SOLE GR NO. 91915 September 11, 1992
If a collective bargaining agreement has been duly registered in accordance with Article 231 of the Code, a
petition for certification election or a motion for intervention can only be entertained within sixty (60) days prior to
the expiry date of such agreement.The provisions make it plain that in the absence of a collective bargaining
agreement, an employer who is requested to bargain collectively may file a petition for certification election any
time except upon a clear showing that one of these two instances exists: (a) the petition is filed within one year
from the date of issuance of a final certification election result or (b) when a bargaining deadlock had been
submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout.
As we said in Kiok Loy," [a] company’s refusal to make counter proposal if considered in relation to the entire
bargaining process, may indicate bad faith and this is especially true where the Union’s request for a counter
proposal is left unanswered." Moreover, the Court added in the same case that "it is not obligatory upon either
side of a labor controversy to precipitately accept or agree to the proposals of the other. But an erring party should
not be tolerated and allowed with impunity to resort to schemes feigning negotiations by going through empty
gestures."
2. Collective Bargaining Agreement

231. Wesleyan University v. Wesleyan University Faculty and Staff Association GR NO. 181806
A Collective Bargaining Agreement (CBA) is a contract entered into by an employer and a legitimate labor
organization concerning the terms and conditions of employment. Like any other contract, it has the force of law
between the parties and, thus, should be complied with in good faith. Unilateral changes or suspensions in the
implementation of the provisions of the CBA, therefore, cannot be allowed without the consent of both parties.
When the provision of the CBA is clear, leaving no doubt on the intention of the parties, the literal meaning of the
stipulation shall govern. However, if there is doubt in its interpretation, it should be resolved in favor of labor, as
this is mandated by no less than the Constitution.
232. Master Iron Labor Union v. NLRC GR NO. 92009 February 17, 1993
Re: no-strike clause
A no-strike clause in a CBA is applicable only to economic strikes. Corollarily, if the strike is founded on an unfair
labor practice of the employer, a strike declared by the union cannot be considered a violation of the no-strike
clause. An economic strike is defined as one which is to force wage or other concessions from the employer
which he is not required by law to grant.
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Re: Grievance Procedure
It should be remembered that a grievance procedure is part of the continuous process of collective bargaining
(Republic Savings Bank vs. CIR, et al., 21 SCRA 226 [1967]). It is intended to promote a friendly dialogue
between labor and management as a means of maintaining industrial peace. The Corporation's refusal to heed
petitioners' request to undergo the grievance procedure clearly demonstrated its lack of intent to abide by the
terms of the CBA.
233. Panay Electric Company v. NLRC GR NO. 102672 October 4, 1995

The State guarantees the right of all workers to self-organization, collective bargaining and negotiations, as well
as peaceful concerted activities, including the right to strike, in accordance with law. The right to strike, however,
is not absolute. It has heretofore been held that a "no strike, no lock-out" provision in the Collective Bargaining
Agreement ("CBA") is a valid stipulation although the clause may be invoked by an employer only when the strike
is economic in nature or one which is conducted to force wage or other concessions from the employer that are
not mandated to be granted by the law itself. It would be inapplicable to prevent a strike which is grounded on
unfair labor practice.
In this situation, it is not essential that the unfair labor practice act has, in fact, been committed; it suffices that the
striking workers are shown to have acted honestly on an impression that the company has committed such unfair
labor practice and the surrounding circumstances could warrant such a belief in good faith.
234. General Milling Corporation-ILU v. General Milling Corporation GR NO. 183122 June 15, 2011
The law mandates that the representation provision of a CBA should last for five years. The relation between
labor and management should be undisturbed until the last 60 days of the fifth year. Hence, it is indisputable that
when the union requested for a renegotiation of the economic terms of the CBA on November 29, 1991, it was still
the certified collective bargaining agent of the workers, because it was seeking said renegotiation within five (5)
years from the date of effectivity of the CBA on December 1, 1988. The union’s proposal was also submitted
within the prescribed 3-year period from the date of effectivity of the CBA, albeit just before the last day of said
period
235. FVC Labor Union v. Sama-samang Nagkakaisang Manggagawa sa FVC GR NO. 176249
By express provision of the above-quoted Article 253-A, the exclusive bargaining status cannot go beyond five
years and the representation status is a legal matter not for the workplace parties to agree upon. In other words,
despite an agreement for a CBA with a life of more than five years, either as an original provision or by
amendment, the bargaining union’s exclusive bargaining status is effective only for five years and can be
challenged within sixty (60) days prior to the expiration of the CBA’s first five years.
The negotiated extension of the CBA term has no legal effect on the FVCLU-PTGWO’s exclusive bargaining
representation status which remained effective only for five years ending on the original expiry date of January 30,
2003. Thus, sixty days prior to this date, or starting December 2, 2002, SANAMA-SIGLO could properly file a
petition for certification election.
236. Union of Filipro Employees v. NLRC GR NO. 91025 December 19, 1990
It is clear and explicit from Article 253-A that any agreement on such other provisions of the CBA shall be given
retroactive effect only when it is entered into within six (6) months from its expiry date. If the agreement was
entered into outside the six (6) month period, then the parties shall agree on the duration of the retroactivity
thereof. But since no agreement to that effect was made, public respondent [NLRC] did not abuse its discretion in
giving the said CBA a prospective effect. The action of the public respondent is within the ambit of its authority
vested by existing laws.
237. Manila Electric, Co. v. Quisumbing GR NO. 127598 February 2000

In general, a CBA negotiated within six months after the expiration of the existing CBA retroacts to the day
immediately following such date and if agreed thereafter, the effectivity depends on the agreement of the parties.
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On the other hand, the law is silent as to the retroactivity of a CBA arbitral award or that granted not by virtue of
the mutual agreement of the parties but by intervention of the government.
Despite the silence of the law, the Court rules herein that CBA arbitral awards granted after six months from the
expiration of the last CBA shall retroact to such time agreed upon by both employer and the employees or their
union. Absent such an agreement as to retroactivity, the award shall retroact to the first day after the six-month
period following the expiration of the last day of the CBA should there be one. In the absence of a CBA, the
Secretary's determination of the date of retroactivity as part of his discretionary powers over arbitral awards shall
control.
It is true that an arbitral award cannot per se be categorized as an agreement voluntarily entered into by the
parties because it requires the interference and imposing power of the State thru the Secretary of Labor when he
assumes jurisdiction. However, the arbitral award can be considered as an approximation of a collective
bargaining agreement which would otherwise have been entered into by the parties. The terms or periods set
forth in Article 253-A pertains explicitly to a CBA. But there is nothing that would prevent its application by analogy
to an arbitral award by the Secretary considering the absence of an applicable law.
I. Unfair Labor Practice

1. Nature, Aspect, and Elements of ULP

238. T&H Shopfitters Corporation v. T&H Shopfitters Union GR NO. 191714
The test of whether an employer has interfered with and coerced employees in the exercise of their right to
self-organization, that is, whether the employer has engaged in conduct which, it may reasonably be said, tends
to interfere with the free exercise of employees' rights; and that it is not necessary that there be direct evidence
that any employee was in fact intimidated or coerced by statements of threats of the employer if there is a
reasonable inference that anti-union conduct of the employer does have an adverse effect on self-organization
and collective bargaining.
2. ULP by the employer

239. Insular Life Assurance Employees Association v. Insular Life GR NO. L-25291
It is an unfair labor practice for an employer operating under a collective bargaining agreement to negotiate or to
attempt to negotiate with his employees individually in connection with changes in the agreement. And the basis
of the prohibition regarding individual bargaining with the strikers is that although the union is on strike, the
employer is still under obligation to bargain with the union as the employees' bargaining representative. It is
likewise an act of interference for the employer to send a letter to all employees notifying them to return to work at
a time specified therein, otherwise new employees would be engaged to perform their jobs. Individual solicitation
of the employees or visiting their homes,
An act to spy on the activities of the union members is considered unjustifiable interference in the union activities
and is unfair labor practice.
240. Ren Transport v. NLRC GR NO. 188020 June 27, 2016

Violation of the duty to bargain collectively is an unfair labor practice under Article 258(g) of the Labor Code. Ren
Transport had a duty to bargain collectively with SMART. Under Article 263 in relation to Article 267 of the Labor
Code, it is during the freedom period — or the last 60 days before the expiration of the CBA — when another
union may challenge the majority status of the bargaining agent through the filing of a petition for a certification
election. If there is no such petition filed during the freedom period, then the employer "shall continue to recognize
the majority status of the incumbent bargaining agent where no petition for certification election is filed."
Interference with the employees' right to self-organization is considered an unfair labor practice under Article 258
(a) of the Labor Code. In this case, the labor arbiter found that the failure to remit the union dues to SMART and
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the voluntary recognition of RTEA were clear indications of interference with the employees' right to
self-organization.
241. Arellano University Employees and Workers Union v. CA GR NO. 139940 September 19,
2006
To constitute ULP, however, violations of the CBA must be gross. Gross violation of the CBA, under Article 261 of
the Labor Code, means flagrant and/or malicious refusal to comply with the economic provisions thereof.
242. Digital Telecommunications Philippines v. Digitel GR NO. 184903 October 10,

2012
That there is a pending cancellation proceeding against the respondent Union is not a bar to set in motion the
mechanics of collective bargaining. If a certification election may still be ordered despite the pendency of a
petition to cancel the union's registration certificate (National Union of Bank Employees vs. Minister of Labor, 110
SCRA 274), more so should the collective bargaining process continue despite its pendency.
243. BPI Employees Union - Davao v. BPI GR NO. 174912 July 24, 2013
ART. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. – x x x Accordingly, violations of a
Collective Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair
labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. For purposes of
this article, gross violations of Collective Bargaining Agreement shall mean flagrant and/or malicious refusal to
comply with the economic provisions of such agreement.
Clearly, only gross violations of the economic provisions of the CBA are treated as ULP. Otherwise, they are mere
grievances. In the present case, the alleged violation of the union shop agreement in the CBA, even assuming it
was malicious and flagrant, is not a violation of an economic provision in the agreement.
244. Rivera v. Espiritu GR NO. 135547 January 23, 2002

Article 253-A has a two-fold purpose. One is to promote industrial stability and predictability. Inasmuch as the
agreement sought to promote industrial peace at PAL during its rehabilitation, said agreement satisfies the first
purpose of Article 253-A. The other is to assign specific timetables wherein negotiations become a matter of right
and requirement. Nothing in Article 253-A, prohibits the parties from waiving or suspending the mandatory
timetables and agreeing on the remedies to enforce the same.
Re: Company union

Under Article 248(d) of the Labor Code, a company union exists when the employer acts "[t]o initiate, dominate,
assist or otherwise interfere with the formation or administration of any labor organization, including the giving of
financial or other support to it or its organizers or supporters."
Re: Union shop clause during suspension of CBA

The objective of remaining the union shop during the suspension of CBA. is to assure the continued existence of
PALEA during the said period. The Court is unable to declare the objective of union security an unfair labor
practice. It is State policy to promote unionism to enable workers to negotiate with management on an even
playing field and with more persuasiveness than if they were to individually and separately bargain with the
employer. For this reason, the law has allowed stipulations for "union shop" and "closed shop" as means of
encouraging workers to join and support the union of their choice in the protection of their rights and interests
vis-à-vis the employer.
245. Great Pacific Life Employees Union v. Great Pacific Life GR NO. 126717 February 11, 1999
While an act or decision of an employer may be unfair, certainly not every unfair act or decision constitutes unfair
labor practice (ULP) as defined and enumerated under Art. 248 of the Labor Code. There should be no dispute
that all the prohibited acts constituting unfair labor practice in essence relate to the workers' right to
self-organization. Thus, an employer may be held liable under this provision if his conduct affects in whatever
manner the right of an employee to self-organize.
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The decision of respondent GREPALIFE to consider the top officers of petitioner UNION as unfit for reinstatement
is not essentially discriminatory and constitutive of an unlawful labor practice of employers under the above-cited
provision. Discriminating in the context of the Code involves either encouraging membership in any labor
organization or is made on account of the employee's having given or being about to give testimony under the
Labor Code. These have not been proved in the case at bar.
246. AC Ransom Labor Union v. NLRC GR NO. L-69494 May 29, 1987
Incontrovertible is the fact that RANSOM was found guilty by the CIR, in its Decision of August 19, 1972, of unfair
labor practice; that its officers and agents were ordered to cease and desist from further committing acts
constitutive of the same, and to reinstate immediately the 22 union members to their respective positions with
backwages from July 25, 1969 until actually reinstated.
The CIR Decision became final, conclusive, and executory after this Court denied the RANSOM petition for review
in 1973. In other words, this Court upheld that portion of the judgment ordering the officers and agents of
RANSOM to reinstate the laborers concerned, with backwages. The inclusion of the officers and agents was but
proper since a corporation, as an artificial being, can act only through them.
247. Standard Chartered Bank Employees Union v. Confesor GR NO. 196276 June 16, 2004
Re: Inteference by employer
Article 248(a) of the Labor Code, considers it an unfair labor practice when an employer interferes, restrains or
coerces employees in the exercise of their right to self-organization or the right to form association. The right to
self-organization necessarily includes the right to collective bargaining.
Parenthetically, if an employer interferes in the selection of its negotiators or coerces the Union to exclude from its
panel of negotiators a representative of the Union, and if it can be inferred that the employer adopted the said act
to yield adverse effects on the free exercise to right to self-organization or on the right to collective bargaining of
the employees, ULP under Article 248(a) in connection with Article 243 of the Labor Code is committed. In order
to show that the employer committed ULP under the Labor Code, substantial evidence is required to support the
claim.
Re: Surface bargaining

Surface bargaining is defined as “going through the motions of negotiating” without any legal intent to reach an
agreement. The resolution of surface bargaining allegations never presents an easy issue. The determination of
whether a party has engaged in unlawful surface bargaining is usually a difficult one because it involves, at
bottom, a question of the intent of the party in question, and usually such intent can only be inferred from the
totality of the challenged party’s conduct both at and away from the bargaining table. It involves the question of
whether an employer’s conduct demonstrates an unwillingness to bargain in good faith or is merely hard
bargaining.
248. Employees Union of Bayer v. Bayer GR NO. 162943 December 6, 2010

CBA is entered into in order to foster stability and mutual cooperation between labor and capital. An employer
should not be allowed to rescind unilaterally its CBA with the duly certified bargaining agent it had previously
contracted with, and decide to bargain anew with a different group if there is no legitimate reason for doing so and
without first following the proper procedure. If such behavior would be tolerated, bargaining and negotiations
between the employer and the union will never be truthful and meaningful, and no CBA forged after arduous
negotiations will ever be honored or be relied upon.
This is the reason why it is axiomatic in labor relations that a CBA entered into by a legitimate labor organization
that has been duly certified as the exclusive bargaining representative and the employer becomes the law
between them. Compliance with the terms and conditions of the CBA is mandated by express policy of the law
primarily to afford protection to labor and to promote industrial peace. Thus, when a valid and binding CBA had
been entered into by the workers and the employer, the latter is behooved to observe the terms and conditions
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thereof bearing on union dues and representation. If the employer grossly violates its CBA with the duly
recognized union, the former may be held administratively and criminally liable for unfair labor practice.
J. Peaceful Concerted Activities

1. Strikes
249. NUWHRAIN Dusit Hotel v. CA GR No. 163942 November 11, 2008

The Union's violation of the Hotel's Grooming Standards was clearly a deliberate and concerted action to
undermine the authority of and to embarrass the Hotel and was, therefore, not a protected action. The reality that
a substantial number of employees assigned to the food and beverage outlets of the Hotel with full heads of hair
suddenly decided to come to work bald-headed or with cropped hair, however, suggests that something is amiss
and insinuates a sense that something out of the ordinary is afoot. It can be gleaned from the records before us
that the Union officers and members deliberately and in apparent concert shaved their heads or cropped their
hair. Clearly, the decision to violate the company rule on grooming was designed and calculated to place the
Hotel management on its heels and to force it to agree to the Union's proposals. Thus, we hold that the Union's
concerted violation of the Hotel's Grooming Standards which resulted in the temporary cessation and disruption of
the Hotel's operations is an unprotected act and should be considered as an illegal strike.
The Union officers and members' concerted action to shave their heads and crop their hair not only violated the
Hotel's Grooming Standards but also violated the Union's duty and responsibility to bargain in good faith.
The Union failed to observe the mandatory 30-day cooling-off period and the seven-day strike ban before it
conducted the strike on January 18, 2002. Records reveal that the Union filed its Notice of Strike on the ground of
bargaining deadlock on December 20, 2001. The 30-day cooling-off period should have been until January 19,
2002. On top of that, the strike vote was held on January 14, 2002 and was submitted to the NCMB only on
January 18, 2002; therefore, the 7-day strike ban should have prevented them from holding a strike until January
25, 2002. The concerted action committed by the Union on January 18, 2002 which resulted in the disruption of
the Hotel's operations clearly violated the above-stated mandatory periods.
Lastly, the Union committed illegal acts in the conduct of its strike. The NLRC ruled that the strike was illegal
since, as shown by the pictures presented by the Hotel, the Union officers and members formed human
barricades and obstructed the driveway of the Hotel.
250. Interphil Laboratories Employees Union v. Interphil GR NO. 142824 December 19, 2011
It is evident from the foregoing provision that the working hours may be changed, at the discretion of the
company, should such change be necessary for its operations, and that the employees shall observe such rules
as have been laid down by the company. In the case before us, Labor Arbiter Caday found that respondent
company had to adopt a continuous 24-hour work daily schedule by reason of the nature of its business and the
demands of its clients. It was established that the employees adhered to the said work schedule since 1988. The
employees are deemed to have waived the eight-hour schedule since they followed, without any question or
complaint, the two-shift schedule while their CBA was still in force and even prior thereto. The two-shift schedule
effectively changed the working hours stipulated in the CBA.
The "overtime boycott" or "work slowdown" by the employees constituted a violation of their CBA, which prohibits
the union or employee, during the existence of the CBA, to stage a strike or engage in slowdown or interruption of
work.
251. Ramirez v. Polyson GR NO. 207898 October 19, 2016

Jurisprudence defines a slowdown as follows:
x x x a "strike on the installment plan;" as a willful reduction in the rate of work by concerted action of workers for
the purpose of restricting the output of the employer, in relation to a labor dispute; as an activity by which workers,
without a complete stoppage of work, retard production or their performance of duties and functions to compel
management to grant their demands. The Court also agrees that such a slowdown is generally condemned as
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inherently illicit and unjustifiable, because while the employees "continue to work and remain at their positions and
accept the wages paid to them," they at the same time "select what part of their allotted tasks they care to perform of
their own volition or refuse openly or secretly, to the employer's damage, to do other work;" in other words, they "work
on their own terms.
The essence of this kind of strike is that the workers do not quit their work but simply reduce the rate of work in
order to restrict the output or delay the production of the employer. It has been held that while a cessation of work
by the concerted action of a large number of employees may more easily accomplish the object of the work
stoppage than if it is by one person, there is, in fact no fundamental difference in the principle involved as far as
the number of persons involved is concerned, and thus, if the act is the same, and the purpose to be
accomplished is the same, there is a strike, whether one or more than one have ceased to work.
252. Naranjo v. Biomedica Healthcare GR NO. 193789 September 19, 2012

The accusation is for engaging in a mass leave tantamount to an illegal strike. The term "Mass Leave" has been
left undefined by the Labor Code. The phrase "mass leave" may refer to a simultaneous availment of authorized
leave benefits by a large number of employees in a company. Going on leave or absenting one's self from work
for personal reasons when they have leave benefits available is an employee's right. Art. 212 (o) of the Labor
Code defines a strike as "any temporary stoppage of work by the concerted action of employees as a result of any
industrial or labor dispute." "Concerted" is defined as "mutually contrived or planned" or "performed in unison."
The petitioners went on leave for various reasons and they did not go to the company premises to petition
Biomedica for their grievance. To demonstrate their good faith in availing their leaves, petitions reported for work
and were at the company premises in the afternoon after they received text messages asking them to do so. This
shows that there was NO intent to go on strike. Biomedica did not prove that the individual absences can be
considered as "temporary stoppage of work." Biomedica's allegation that the mass leave "paralyzed the company
operation on that day" has remained unproved. It is erroneous, therefore, to liken the alleged mass leave to an
illegal strike much less to terminate petitioners' services for it.
253. Lapanday Workers Union v. NLRC GR NO. 95494 September 7, 1995

Some of the limitations on the exercise of the right of strike are provided for in paragraphs (c) and (f) of Article 263
of the Labor Code, as amended. They provide for the procedural steps to be followed before staging a strike —
filing of notice of strike, taking of strike vote, and reporting of the strike vote result to the Department of Labor and
Employment. In National Federation of Sugar Workers (NFSW) vs. Overseas, et al., we ruled that these steps are
mandatory in character, thus:
If only the filing of the strike notice and the strike-vote report would be deemed mandatory, but not the
waiting periods so specifically and emphatically prescribed by law, the purposes for which the filing of the
strike notice and strike vote report is required cannot be achieved. . . .
xxx xxx xxx
So too, the 7-day strike-vote report is not without a purpose. As pointed out by the Solicitor
General —
. . . The submission of the report gives assurance that a strike vote has been taken and that, if the report
concerning it is false, the majority of the members can take appropriate remedy before it is too late.
The seven (7) day waiting period is intended to give DOLE an opportunity to verify whether the projected strike
really carries the imprimatur of the majority of the union members.
254. Toyota Motor Phils. v. NLRC GR NO. 158786 October 19, 2007
Noted authority on Labor Law, Ludwig Teller, lists six (6) categories of an illegal strike, viz:
(1) [when it] is contrary to a specific prohibition of law, such as strike by employees performing governmental
functions; or
(2) [when it] violates a specific requirement of law[, such as Article 263 of the Labor Code on the requisites of a
valid strike]; or
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(3) [when it] is declared for an unlawful purpose, such as inducing the employer to commit an unfair labor practice
against non-union employees; or
(4) [when it] employs unlawful means in the pursuit of its objective, such as a widespread terrorism of non-strikers
[for example, prohibited acts under Art. 264(e) of the Labor Code]; or
(5) [when it] is declared in violation of an existing injunction[, such as injunction, prohibition, or order issued by the
DOLE Secretary and the NLRC under Art. 263 of the Labor Code]; or
(6) [when it] is contrary to an existing agreement, such as a no-strike clause or conclusive arbitration clause
The mass actions staged before the Bureau of Labor Relations on February 21-23, 2001 by the union officers and
members fall squarely within the definition of a strike (Article 212 (o), Labor Code). These concerted actions
resulted in the temporary stoppage of work causing the latter substantial losses. Thus, without the requirements
for a valid strike having been complied with, we were constrained to consider the strike staged on such dates as
illegal and all employees who participated in the concerted actions to have consequently lost their employment
status.
It is obvious that the February 21 to 23 concerted actions were undertaken without satisfying the prerequisites for
a valid strike under Art. 263 of the Labor Code. The Union failed to comply with the following requirements:
(1) a notice of strike filed with the DOLE 30 days before the intended date of strike, or 15 days in case of unfair
labor practice;
(2) strike vote approved by a majority of the total union membership in the bargaining unit concerned obtained by
secret ballot in a meeting called for that purpose; and
(3) notice given to the DOLE of the results of the voting at least seven days before the intended strike.
These requirements are mandatory and the failure of a union to comply with them renders the strike illegal.
With respect to the strikes committed from March 17 to April 12 (STRIKE 2), those were initially legal as the legal
requirements were met. However, on March 28 to April 12, the Union barricaded the gates of the Bicutan and Sta.
Rosa plants and blocked the free ingress to and egress from the company premises. Toyota employees,
customers, and other people having business with the company were intimidated and were refused entry to the
plants. As earlier explained, these strikes were illegal because unlawful means were employed.
255. Samahang Manggagawa sa Sulpicio Lines v. Sulpicio Lines GR NO. 140992 March
25, 2004
A strike shall be filed with the Department of Labor and Employment at least 15 days if the issues raised are
unfair labor practice or at least 30 days if the issue involved bargaining deadlock. However, in case of dismissal
from employment of union officers duly elected in accordance with the union constitution and by-laws, which may
constitute union busting where the existence of the union is threatened, the 15-day cooling-off period shall not
apply and the union may take action immediately. A strike vote shall be reported to the Department of Labor and
Employment at least seven (7) days before the intended strike.
The union failed to comply with the mandatory requirements of Article 263 (c) and (f) of the Labor Code. The
language of the law leaves no room for doubt that the cooling-off period and the seven-day strike ban after the
strike-vote report were intended to be mandatory. Such requirements as the filing of a notice of strike, strike vote,
and notice given to the Department of Labor are mandatory in nature. Thus, even if the union acted in good faith
in the belief that the company was committing an unfair labor practice, if no notice of strike and a strike vote were
conducted, the said strike is illegal.
Re: “one-day work absence” o r “simple act of absenteeism”

A strike, as defined in Article 212 (o) of the Labor Code, as amended, means "any temporary stoppage of work by
the concerted action of employees as a result of an industrial or labor dispute." The term "strike" shall comprise
not only concerted work stoppages, but also slowdowns, mass leaves, sitdowns, attempts to damage, destroy or
sabotage plant equipment and facilities, and similar activities.
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256. Biflex v. Filflex GR NO. 155679 December 19, 2006
Stoppage of work due to welga ng bayan is in the nature of a general strike, an extended sympathy strike. It
affects numerous employers including those who do not have a dispute with their employees regarding their terms
and conditions of employment. Employees who have no labor dispute with their employer but who, on a day they
are scheduled to work, refuse to work and instead join a welga ng bayan commit an illegal work stoppage. Even if
petitioners’ joining the welga ng bayan were considered merely as an exercise of their freedom of expression,
freedom of assembly or freedom to petition the government for redress of grievances, the exercise of such rights
is not absolute. For the protection of other significant state interests such as the "right of enterprises to reasonable
returns on investments, and to expansion and growth" enshrined in the 1987 Constitution must also be
considered, otherwise, oppression or self-destruction of capital in order to promote the interests of labor would be
sanctioned. There being no showing that petitioners notified respondents of their intention, or that they were
allowed by respondents, to join the welga ng bayan, their work stoppage is beyond legal protection.
257. Air Line Pilots Association v. CIR GR NO. L-33705 April 15, 1977
Section 2(1) of the Industrial Peace Act which defines "strike" as "any temporary stoppage of work by the
concerted action of employees as a result of an industrial dispute," it is worthwhile to observe that as the law
defines it, a strike means only a "temporary stoppage of work."
What the mentioned pilots did, however, cannot be considered, in the opinion of this Court, as mere "temporary
stoppage of work." What they contemplated was evidently a permanent cut-off of employment relationship with
their erstwhile employer, PAL. In any event, the dispute below having been certified as existing in an industry
indispensable to the national interest, the said pilots' rank disregard for the compulsory orders of the industrial
court and their daring and calculating venture to disengage themselves from that court's jurisdiction, for the
obvious purpose of satisfying their narrow economic demands to the prejudice of the public interest, are evident
badges of bad faith.
A legitimate concerted activity is a matter that cannot be used to circumvent judicial orders or be tossed around
like a plaything. Definitely, neither employers nor employees should be allowed to make of judicial authority a
now-youve-got-it-now-you-dont affair.
258. Abaria v. NLRC GR NO. 154113 December 7, 2011

To prove majority support of the employees, NAMAMCCH-NFL presented the CBA proposal allegedly signed by
153 union members. However, the petition signed by said members showed that the signatories endorsed the
proposed terms and conditions without stating that they were likewise voting for or designating the
NAMA-MCCH-NFL as their exclusive bargaining representative.
Considering their persistence in holding picketing activities despite the declaration by the NCMB that their union
was not duly registered as a legitimate labor organization and the letter from NFL's legal counsel informing that
their acts constitute disloyalty to the national federation, and their filing of the notice of strike and conducting a
strike vote notwithstanding that their union has no legal personality to negotiate with MCCHI for collective
bargaining purposes, there is no question that NAMA-MCCH-NFL officers knowingly participated in the illegal
strike.
259. Bigg’s v. Boncacas GR NO. 200487 March 6, 2019

In a strike grounded on unfair labor practice, the following are the requirements: (1) the strike may be declared by
the duly certified bargaining agent or legitimate labor organization; (2) the conduct of the strike vote in accordance
with the notice and reportorial requirements to the NCMB and subject to the seven-day waiting period; (3) notice
of strike filed with the NCMB and copy furnished to the employer, subject to the 15-day cooling-off period. In
cases of union busting, the 15-day cooling-off period shall not apply.
Re: first strike on February 16, 1996

The union did not file the requisite Notice of Strike and failed to observe the cooling-off period. In an effort to
legitimize the strike on February 16, 1996, the union filed a Notice of Strike on the same day. This cannot be
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considered as compliance with the requirement, as the cooling-off period is mandatory. The cooling-off period is
not merely a period during which the union and the employer must simply wait. The purpose of the cooling-off
period is to allow the parties to negotiate and seek a peaceful settlement of their dispute to prevent the actual
conduct of the strike. In other words, there must be genuine efforts to amicably resolve the dispute. Moreover, the
Court affirms the findings of the labor tribunals that the union failed to prove with substantial evidence that Bigg's
was guilty of unfair labor practice as defined under Article 259 of the Labor Code to allow the union, a
non-certified bargaining agent to initiate the strike. Likewise, the union failed to prove that there was union busting
to exempt compliance with the cooling-off period.
Re: March 5, 1996 strike

While the law protects the right of workers to engage in concerted activities for the purpose of collective
bargaining or to seek redress for unfair labor practices, this right must be exercised in accordance with the law.
Article 279 (formerly 264) (e) of the Labor Code provides:
No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the free ingress
to or egress from the employer's premises for lawful purposes, or obstruct public thoroughfares.
260. Grand Boulevard Hotel v. Genuine Labor Organizations GR NO. 153664

The respondents' claim of good faith is not a valid excuse to dispense with the procedural steps for a lawful strike.
People's Industrial did not rule that the procedural steps can be dispensed with even if the union believed in good
faith that the company was committing an unfair labor practice. Thus, even if the union acted in good faith in the
belief that the company was committing an unfair labor practice, if no notice of strike and a strike vote were
conducted, the said strike is illegal.
Moreover, astrike that is undertaken, despite the issuance by the SOLE of an assumption or certification order,
becomes a prohibited activity and, thus, illegal pursuant to Article 264of the Labor Code of the Philippines, as
amended. As this Court ruled in Union of Filipro Employees v. Nestle Philippines, Inc ., under Article 264(a) of the
said code, once an assumption certification order is issued by the SOLE, strikes are enjoined or if one has already
taken place, all strikers shall immediately return to work: We also wish to point out that an assumption and/or
certification order of the Secretary of Labor automatically results in a return-towork of all striking workers, whether
or not a corresponding order has been issued by the Secretary of Labor. Thus, the striking workers erred when
they continued with their strike alleging absence of a return-to-work order.
261. Philippine Diamond Hotel v. Manila Diamond Hotel Employees Union GR NO. 158075
Only the labor organization designated or selected by the majority of the employees in an appropriate collective
bargaining unit is the exclusive representative of the employees in such unit for the purpose of collective
bargaining.
The union officers should be dismissed for staging and participating in the illegal strike, following paragraph 3,
Article 264(a) of the Labor Code which provides that ". . .[a]ny union officer who knowingly participates in an illegal
strike and any worker or union officer who knowingly participates in the commission of illegal acts during strike
may be declared to have lost his employment status . . ." An ordinary striking worker cannot, thus be dismissed for
mere participation in an illegal strike. There must be proof that he committed illegal acts during a strike, unlike a
union officer who may be dismissed by mere knowingly participating in an illegal strike and/or committing an
illegal act during a strike.
262. Solidbank v. Gamier GR NO. 159640 November 15, 2010

The law grants the employer the option of declaring a union officer who participated in an illegal strike as having
lost his employment. It possesses the right and prerogative to terminate the union officers from service. However,
a worker merely participating in an illegal strike may not be terminated from employment. It is only when he
commits illegal acts during a strike that he may be declared to have lost employment status. We have held that
the responsibility of union officers, as main players in an illegal strike, is greater than that of the members and,
therefore, limiting the penalty of dismissal only for the former for participation in an illegal strike is in order. Hence,
with respect to respondents who are union officers, the validity of their termination by petitioners cannot be
questioned.
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For the rest of the individual respondents who are union members, the rule is that an ordinary striking worker
cannot be terminated for mere participation in an illegal strike. There must be proof that he or she committed
illegal acts during a strike. In all cases, the striker must be identified. But proof beyond reasonable doubt is not
required. Substantial evidence available under the attendant circumstances, which may justify the imposition of
the penalty of dismissal, may suffice. Liability for prohibited acts is to be determined on an individual basis.
263. C. Alcantara & Sons v. CA Gr NO. 155109 September 29 2010

1. The Union staged an illegal strike. A strike may be regarded as invalid although the labor union has complied
with the strict requirements for staging one as provided in Article 263 of the Labor Code when the same is held
contrary to an existing agreement, such as a no strike clause or conclusive arbitration clause. Here, the CBA
between the parties contained a "no strike, no lockout" provision that enjoined both the Union and the Company
from resorting to the use of economic weapons available to them under the law and to instead take recourse to
voluntary arbitration in settling their disputes. No law or public policy prohibits the Union and the Company from
mutually waiving the strike and lockout maces available to them to give way to voluntary arbitration. Indeed, no
less than the 1987 Constitution recognizes in Section 3, Article XIII, preferential use of voluntary means to settle
disputes.
2. Union members committed illegal acts. Since the Union’s strike has been declared illegal, the Union officers
can, in accordance with law be terminated from employment for their actions. This includes the shop stewards.
They cannot be shielded from the coverage of Article 264 of the Labor Code since the Union appointed them as
such and placed them in positions of leadership and power over the men in their respective work units.
As regards the rank and file Union members, Article 264 of the Labor Code provides that termination from
employment is not warranted by the mere fact that a union member has taken part in an illegal strike. It must be
shown that such a union member, clearly identified, performed an illegal act or acts during the strike. The mere
fact that the criminal complaints against the terminated Union members were subsequently dismissed for one
reason or another does not extinguish their liability under the Labor Code.
March 14, 2012 Decision re: separation pay

As a general rule, when just causes for terminating the services of an employee exist, the employee is not entitled
to separation pay because lawbreakers should not benefit from their illegal acts. The rule, however, is subject to
exceptions. Here, not only did the Court declare the strike illegal, rather, it also found the Union officers to have
knowingly participated in the illegal strike. Worse, the Union members committed prohibited acts during the strike.
Thus, the Court deletes the award of separation pay as a form of financial assistance.
2. Picketing

264. MSF Tire and Rubber v. CA GR NO. 128632 August 5, 1999
While peaceful picketing is entitled to protection as an exercise of free speech, we believe the courts are not
without power to confine or localize the sphere of communication or the demonstration to the parties to the labor
dispute, including those with related interest, and to insulate establishments or persons with no industrial
connection or having interest totally foreign to the context of the dispute. Thus the right may be regulated at the
instance of third parties or “innocent bystanders” if it appears that the inevitable result of its exercise is to create
an impression that a labor dispute with which they have no connection or interest exists between them and the
picketing union or constitute an invasion of their rights.
Thus, an "innocent bystander," who seeks to enjoin a labor strike, must satisfy the court that aside from the
grounds specified in Rule 58 of the Rules of Court, it is entirely different from, without any connection whatsoever
to, either party to the dispute and, therefore, its interests are totally foreign to the context thereof.
In the case at bar, petitioner cannot be said not to have such connection to the dispute. We find that the
“negotiation, contract of sale, and the post transaction” between Philtread, as vendor, and Siam Tyre, as vendee,
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reveals a legal relation between them which, in the interest of petitioner, we cannot ignore. This, together with the
fact that private respondent uses the same plant or factory; similar or substantially the same working conditions;
same machinery, tools, and equipment; and manufacture the same products as Philtread, lead us to safely
conclude that private respondent’s personality is so closely linked to Philtread as to bar its entitlement to an
injunctive writ.
265. Phimco Industries v. Phimco Industries Labor Association GR NO. 170830

Despite the validity of the purpose of a strike and compliance with the procedural requirements, a strike may still
be held illegal where the means employed are illegal. The means become illegal when they come within the
prohibitions under Article 264(e) of the Labor Code which provides: No person engaged in picketing shall commit
any act of violence, coercion or intimidation or obstruct the free ingress to or egress from the employer's premises
for lawful purposes, or obstruct public thoroughfares.
While the right of employees to publicize their dispute falls within the protection of freedom of expression and the
right to peaceably assemble to air, these rights are by no means absolute. Protected picketing does not extend to
blocking ingress to and egress from the company premises. That the picket was moving, was peaceful and was
not attended by actual violence may not free it from taints of illegality if the picket effectively blocked entry to and
exit from the company premises.
3. Lockout
4. Assumption of Jurisdiction

266. International Pharmaceuticals v. SOLE GR NO. 92981 January 9, 1992
The Secretary was explicitly granted by Article 263(g) of the Labor Code the authority to assume jurisdiction over
a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest,
and decide the same accordingly. Necessarily, this authority to assume jurisdiction over the said labor dispute
must include and extend to all questions and controversies arising therefrom, including cases over which the labor
arbiter has exclusive jurisdiction.
Moreover, Article 217 of the Labor Code is not without, but contemplates, exceptions thereto. This is evident from
the opening proviso therein reading "(e)xcept as otherwise provided under this Code x x x." Plainly, Article 263(g)
of the Labor Code was meant to make both the Secretary (or the various regional directors) and the labor arbiters
share jurisdiction, subject to certain conditions. Otherwise, the Secretary would not be able to effectively and
efficiently dispose of the primary dispute. To hold the contrary may even lead to the absurd and undesirable result
wherein the Secretary and the labor arbiter concerned may have diametrically opposed rulings.
267. Telefunken Seminconductors Employees Union- FFW v. CA GR NO. 143013

Under Art. 263 of the Labor Code, the moment the Secretary of Labor assumes jurisdiction over a labor dispute in
an industry indispensable to national interest, such assumption shall have the effect of automatically enjoining the
intended or impending strike. It was not even necessary for the Secretary of Labor to issue another order directing
them to return to work. The mere issuance of an assumption order by the Secretary of Labor automatically carries
with it a return-to-work order, even if the directive to return to work is not expressly stated in the assumption order.
In this connection, Article 264(a) clearly provides that no strike or lockout shall be declared after the assumption of
jurisdiction by the President or the Secretary or after certification or submission of the dispute to compulsory or
voluntary arbitration or during the pendency of cases involving the same grounds for the strike or lockout.
268. Phimco Industries v. Brillantes GR NO. 120751 March 7, 1999

The Labor Code vests in the Secretary of Labor the discretion to determine what industries are indispensable to
the national interest. Accordingly, upon the determination by the Secretary of Labor that such industry is
indispensable to the national interest, he will assume jurisdiction over the labor dispute in the said industry.
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In this case at bar, however, the very admission by the public respondent draws the labor dispute in question out
of the ambit of the Secretary's prerogative. Acting Sec. Brillantes did not even make any effort to touch on the
indispensability of the match factory to the national interest. It must have been aware that a match factory, though
of value, can scarcely be considered as an industry "indispensable to the national interest" as it cannot be in the
same category as "generation and distribution of energy, or those undertaken by banks, hospitals, and
export-oriented industries."
The Secretary's assumption of jurisdiction grounded on the alleged "obtaining circumstances" and not on a
determination that the industry involved in the labor dispute is one indispensable to the "national interest", the
standard set by the legislature, constitutes grave abuse of discretion amounting to lack of or excess of jurisdiction.

III. KINDS OF EMPLOYMENT

A. Regular
1. Definition of Regular Employment
2. Test in determining regular employment

269. De Leon v. NLRC GR NO. 70705 August 21, 1989
The primary standard of determining a regular employment is the reasonable connection between the particular
activity performed by the employee in relation to the usual business or trade of the employer. The test is whether
the former is usually necessary or desirable in the usual business or trade of the employer. The connection can
be determined by considering the nature of the work performed and its relation to the scheme of the particular
business or trade in its entirety. Also, if the employee has been performing the job for at least one year, even if the
performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its
performance as sufficient evidence of the necessity if not indispensability of that activity to the business.
270. Magsalin v. National Organization of Working Men GR NO. 148492 May 9, 2003
In determining whether an employment should be considered regular or non-regular, the applicable test is the
reasonable connection between the particular activity performed by the employee in relation to the usual business
or trade of the employer. The standard, supplied by the law itself, is whether the work undertaken is necessary or
desirable in the usual business or trade of the employer. It is distinguished from a specific undertaking that is
divorced from the normal activities required in carrying on the particular business or trade. But, although the work
to be performed is only for a specific project or seasonal, where a person thus engaged has been performing the
job for at least one year, even if the performance is not continuous or is merely intermittent, the law deems the
repeated and continuing need for its performance as being sufficient to indicate the necessity or desirability of that
activity to the business or trade of the employer. The employment of such person is also then deemed to be
regular with respect to such activity and while such activity exists.
Re: Fixed term employment

While this Court, in Brent School, Inc. vs. Zamora, has upheld the legality of a fixed-term employment, it has done
so, however, with a stern admonition that where from the circumstances it is apparent that the period has been
imposed to preclude the acquisition of tenurial security by the employee, then it should be struck down as being
contrary to law, morals, good customs, public order and public policy.
B. Probationary
271. Canadian Opportunities Unlimited v. Dalangin GR NO. 172223 February 6, 2012

A probationary employee, as understood under Article 281 of the Labor Code, is one who is on trial by an
employer, during which, the latter determines whether or not he is qualified for permanent employment. A
probationary appointment gives the employer an opportunity to observe the fitness of a probationer while at work,
and to ascertain whether he would be a proper and efficient employee.
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The essence of a probationary period of employment fundamentally lies in the purpose or objective of both the
employer and the employee during the period. While the employer observes the fitness, propriety and efficiency of
a probationer to ascertain whether he is qualified for permanent employment, the latter seeks to prove to the
former that he has the qualifications to meet the reasonable standards for permanent employment. The "trial
period" or the length of time the probationary employee remains on probation depends on the parties’ agreement,
but it shall not exceed six (6) months under Article 281 of the Labor Code, unless it is covered by an
apprenticeship agreement stipulating a longer period.
"The word ‘probationary,’ as used to describe the period of employment, implies the purpose of the term or period,
but not its length." Thus, the fact that Dalangin was separated from the service after only about four weeks does
not necessarily mean that his separation from the service is without basis.
1. Definition or probationary employment

2. Right to be informed of standards of regularization
272. Aliling v. Feliciano GR NO. 185829 April 25, 2012

The Labor Code and the IRR specifically requires the employer 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. WWWEC has failed to prove that an agreement as regards thereto has been reached. Clearly
then, there were actually no performance standards to speak of. And lest it be overlooked, Aliling was assigned to
GX trucking sales, an activity entirely different to the Seafreight Sales he was originally hired and trained for.
Thus, at the time of his engagement, the standards relative to his assignment with GX sales could not have
plausibly been communicated to him as he was under Seafreight Sales.
ART. 281. Probationary employment. - Probationary employment shall not exceed six (6) months from the date the
employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The
services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when
he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to
the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be
considered a regular employee.
Section 6(d) of the Implementing Rules of Book VI, Rule VIII-A of the Labor Code
Sec. 6. Probationary employment. – There is probationary employment where the employee, upon his engagement,
is made to undergo a trial period where the employee determines his fitness to qualify for regular employment, based
on reasonable standards made known to him at the time of engagement.
Probationary employment shall be governed by the following rules:

xxxx
(d) In all cases of probationary employment, the employer shall make known to the employee the standards under
which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to
the employee at that time, he shall be deemed a regular employee.
273. Philippine Daily Inquirer v. Magtibay GR NO. 164532 July 27, 2007
Within the limited legal six-month probationary period, probationary employees are still entitled to security of
tenure. It is expressly provided in the afore-quoted Article 281 that a probationary employee may be terminated
only on two grounds: (a) for just cause, or (b) when he fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the employee at the time of his engagement.
If the termination is based on the ground that the probationary employee did not qualify as a regular employee
based on the reasonable standards made known to him at the time of his engagement, such ground does not
require notice and hearing. By the very nature of a probationary employment, the employee knows from the very
start that he will be under close observation and his performance of his assigned duties and functions would be
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under continuous scrutiny by his superiors. It is in apprising him of the standards against which his performance
shall be continuously assessed where due process regarding the second ground lies, and not in notice and
hearing as in the case of the first ground. PDI was only exercising its statutory hiring prerogative when it refused
to hire Magtibay on a permanent basis upon the expiration of the six-month probationary period.
274. Abbot Laboratories v. Alcaraz GR NO. 192571 July 23, 2013

It is not the probationary employee’s job description but the adequate performance of his duties and
responsibilities which constitutes the inherent and implied standard for regularization. If the probationary
employee had been fully apprised by his employer of these duties and responsibilities, then basic knowledge and
common sense dictate that he must adequately perform the same, else he fails to pass the probationary trial and
may therefore be subject to termination.
“Adequate performance” is hinged on the qualitative assessment of the employee’s work; by its nature, this largely
rests on the reasonable exercise of the employer’s management prerogative. In the ultimate analysis, the
communication of performance standards should be perceived within the context of the nature of the probationary
employee’s duties and responsibilities.
275. Enchanted Kingdom v. Verzo GR NO. 209559 December 9, 2015

Section 6(d), Rule I, Book VI of the Implementing Rules of the Labor Code provides that if the employer fails to
inform the probationary employee of the reasonable standards on which his regularization would be based at the
time of the engagement, then the said employee shall be deemed a regular employee. An exception to the
foregoing rule is when the job is self-descriptive, as in the case of maids, cooks, drivers, or messengers.
The purpose of the law in requiring that an employee be notified of the standards for his regularization is to simply
afford him due process. Moreover, while it may be argued that ideally employers should immediately inform a
probationary employee of the standards for his regularization from day one, strict compliance thereof is not
required. As long as the probationary employee is given a reasonable time and opportunity to be made fully aware
of what is expected of him during the early phases of the probationary period, the requirement of the law has been
satisfied.
3. Period of Probation

276. International Catholic Migration Commission v. NLRC
Failure to qualify as a regular employee in accordance with the reasonable standards of the employer is a just
cause for terminating a probationary employee.
Being in the nature of a "trial period" the essence of a probationary period of employment fundamentally lies in the
purpose or objective sought to be attained by both the employer and the employee during said period. The length
of time is immaterial in determining the correlative rights of both in dealing with each other during said period.
While the employer, as stated earlier, observes the fitness, propriety and efficiency of a probationer to ascertain
whether he is qualified for permanent employment, the probationer, on the other, seeks to prove to the employer,
that he has the qualifications to meet the reasonable standards for permanent employment.
There is nothing under Article 281 of the Labor Code that would preclude the employer from extending a regular
or a permanent appointment to an employee once the employer finds that the employee is qualified for regular
employment even before the expiration of the probationary period. Conversely, if the purpose sought by the
employer is neither attained nor attainable within the said period, Article 281 of the Labor Code does not likewise
preclude the employer from terminating the probationary employment on justifiable causes as in the instant case.
277. Magis Young Achievers Learning Center v. Manalo

While there is no statutory cap on the minimum term of probation, the law sets a maximum "trial period" during
which the employer may test the fitness and efficiency of the employee. The 6 month limit on the term of
probationary employment, however, does not apply to all classes of occupations.
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For "academic personnel" in private schools, colleges and universities, probationary employment is governed by
Section 92 of the 1992 Manual of Regulations for Private Schools15 (Manual), which reads:
Section 92. Probationary Period. – Subject in all instances to compliance with the Department and school
requirements, the probationary period for academic personnel shall not be more than three (3) consecutive years of
satisfactory service for those in the elementary and secondary levels, six (6) consecutive regular semesters of
satisfactory service for those in the tertiary level, and nine (9) consecutive trimesters of satisfactory service for those
in the tertiary level where collegiate courses are offered on a trimester basis.
This was supplemented by DOLE-DECS-CHED-TESDA Order No. 1 which provides that the probationary period
for academic personnel shall not be more than three (3) consecutive school years of satisfactory service for those
in the elementary and secondary levels. By this supplement, the period of probation for academic personnel shall
be counted in terms of "school years," and not "calendar years."
Accordingly, no vested right to a permanent appointment shall accrue until the employee has completed the
prerequisite three-year period necessary for the acquisition of a permanent status. Of course, the mere rendition
of service for three consecutive years does not automatically ripen into a permanent appointment. It is also
necessary that the employee be afull-time teacher, and that the services he rendered are satisfactory.
278. Mercado v. AMA Computer College GR NO. 183572 April 13, 2010
The probationary status of teaching personnel is not governed purely by the Labor Code. The Labor Code is
supplemented with respect to the period of probation by special rules found in the Manual of Regulations for
Private Schools. On the matter of probationary period, Section 92 of these regulations provides:
Section 92. Probationary Period. – Subject in all instance to compliance with the Department and school
requirements, the probationary period for academic personnel shall not be more than three (3) consecutive
years of satisfactory service for those in the elementary and secondary levels, six (6) consecutive regular
semesters of satisfactory service for those in the tertiary level, and nine (9) consecutive trimesters of
satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester. Other
than on the period, the following quoted portion
Other than on the period,the following quoted portionof Article 281 of the Labor Code still fully applies: x x x An
employee who is allowed to work after a probationary period shall be considered a regular employee.
279. Colegio del Santisimo Rosario v. Rojo GR NO. 170388 Septmber 4, 2013
In the case of probationary period of employment for teachers, petitioners’ teachers who were on probationary
employment were made to enter into a contract effective for one school year. Thereafter, it may be renewed for
another school year, and the probationary employment continues. At the end of the second fixed period of
probationary employment, the contract may again be renewed for the last time.
The fixed-term character of employment essentially refers to the period agreed upon between the employer and
the employee; employment exists only for the duration of the term and ends on its own when the term expires. In
a sense, employment on probationary status also refers to a period because of the technical meaning "probation"
carries in Philippine labor law – a maximum period of six months, or in the academe, a period of three years for
those engaged in teaching jobs. Their similarity ends there, however, because of the overriding meaning that
being "on probation" connotes, i.e., a process of testing and observing the character or abilities of a person who is
new to a role or job.
“In a situation where the probationary status overlaps with a fixed-term contract not specifically used for the fixed
term it offers, Article 281 should assume primacy and the fixed-period character of the contract must give way."
For teachers on probationary employment, in which case a fixed term contract is not specifically used for the fixed
term it offers, it is incumbent upon the school to have not only set reasonable standards to be followed by said
teachers in determining qualification for regular employment, the same must have also been communicated to the
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teachers at the start of the probationary period, or at the very least, at the start of the period when they were to be
applied. Corollarily, should the teachers not have been apprised of such reasonable standards at the time
specified above, they shall be deemed regular employees.
280. Buiser v. Leogardo GR NO. L-63316 July 31, 1984

Generally, the probationary period of employment is limited to six (6) months. The exception to this general rule is
when the parties to an employment contract may agree otherwise, such as when the same is established by
company policy or when the same is required by the nature of work to be performed by the employee. In the latter
case, there is recognition of the exercise of managerial prerogatives in requiring a longer period of probationary
employment, such as in the present case where the probationary period was set for eighteen (18) months, i.e.
from May, 1980 to October, 1981 inclusive, especially where the employee must learn a particular kind of work
such as selling, or when the job requires certain qualifications, skills, experience or training.
In the case at bar, it is shown that private respondent Company needs at least eighteen (18) months to determine
the character and selling capabilities of the petitioners as sales representatives.
281. Mariwasa Manufacturing v. Leogardo GR NO. 74246 January 26, 1989

Agreements stipulating longer probationary periods as constituting lawful exceptions to the statutory prescription
limiting such periods to six months, when it upheld as valid an employment contract between an employer and
two of its employees that provided for an eigthteen-month probation period.
The single difference between Buiser and the present case: that in the former involved an eighteen-month
probationary period stipulated in the original contract of employment, whereas the latter refers to an extension
agreed upon at or prior to the expiration of the statutory six-month period, is hardly such as to warrant or even
suggest a different ruling here. In both cases the parties' agreements in fact resulted in extensions of the period
prescribed by law.
For aught that appears of record, the extension of Dequila's probation was ex gratia, an act of liberality on the part
of his employer affording him a second chance to make good after having initially failed to prove his worth as an
employee. Such an act cannot now unjustly be turned against said employer's account to compel it to keep on its
payroll one who could not perform according to its work standards. The law, surely, was never meant to produce
such an inequitable result.
C. Project Employees

282. ALU-TUCP v. NLRC GR NO. 109902 August 2, 1994
The principal test for determining whether particular employees are properly characterized as "project employees"
as distinguished from "regular employees," is whether or not the "project employees" were assigned to carry out a
"specific project or undertaking," the duration (and scope) of which were specified at the time the employees were
engaged for that project.
In the realm of business and industry, we note that "project" could refer to one or the other of at least two (2)
distinguishable types of activities. Firstly, a project could refer to a particular job or undertaking that is within the
regular or usual business of the employer company, but which is distinct and separate, and identifiable as such,
from the other undertakings of the company. Such job or undertaking begins and ends at determined or
determinable times. The term "project" could also refer to, secondly, a particular job or undertaking that is not
within the regular business of the corporation. Such a job or undertaking must also be identifiably separate and
distinct from the ordinary or regular business operations of the employer. The job or undertaking also begins and
ends at determined or determinable time
The simple fact that the employment of petitioners as project employees had gone beyond one (1) year, does not
detract from, or legally dissolve, their status as project employees. The second paragraph of Article 280 of the
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Labor Code, quoted above, providing that an employee who has served for at least one (1) year, shall be
considered a regular employee, relates to casual employees, not to project employees.
283. Leyte Geothermal Power PEU - ALU-TUCP v. PNOC-EDC GR NO. 170351

The distinction between a regular and a project employment is provided in Article 280, paragraph 1, of the Labor
Code:
ART. 280. Regular and Casual Employment.-- The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be
regular where the employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except where the employment has been fixed for a
specific project or undertaking the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season…
Plainly, the litmus test to determine whether an individual is a project employee lies in setting a fixed period of
employment involving a specific undertaking which completion or termination has been determined at the time of
the particular employee's engagement.
In this case, as previously adverted to, the officers and the members of petitioner Union were specifically hired as
project employees for respondent's Leyte Geothermal Power Project located at the Greater Tongonan
Geothermal Reservation in Leyte. Consequently, upon the completion of the project or substantial phase thereof,
the officers and the members of petitioner Union could be validly terminated.
284. Malicdem v. Marulas Industrial Corporation GR NO. 204406 February 26, 2014
A reading of the 2008 employment contracts, denominated as "Project Employment Agreement," reveals that
there was a stipulated probationary period of 6 months from its commencement. It was provided therein that in the
event that they would be able to comply with the company’s standards and criteria within such period, they shall
be reclassified as project employees with respect to the remaining period of the effectivity of the contract.
Under Article 281 of the Labor Code, however, an employee who is allowed to work after a probationary period
shall be considered a regular employee. When an employer renews a contract of employment after the lapse of
the six-month probationary period, the employee thereby becomes a regular employee. No employer is allowed to
determine indefinitely the fitness of its employees. While length of time is not the controlling test for project
employment, it is vital in determining if the employee was hired for a specific undertaking or tasked to perform
functions vital, necessary and indispensable to the usual business of trade of the employer.
If the employee has been performing the job for at least one year, even if the performance is not continuous or
merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of
the necessity, if not indispensability of that activity to the business. Guided by the foregoing, the Court is of the
considered view that there was clearly a deliberate intent to prevent the regularization of the petitioners.
285. Maraguinot v. NLRC GR NO. 120969 January 22, 1998

It may not be ignored, however, that private respondents expressly admitted that petitioners were part of a work
pool; and, while petitioners were initially hired possibly as project employees, they had attained the status of
regular employees in view of VIVA's conduct. A project employee or a member of a work pool may acquire the
status of a regular employee when the following concur:
1. There is a continuous rehiring of project employees even after cessation of a project; and
2. The tasks performed by the alleged project employee are vital, necessary and indispensable to the usual
business or trade of the employer.
However, the length of time during which the employee was continuously re-hired is not controlling, but merely
serves as a badge of regular employment.
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286. Liganza v. RBL Shipyard Corporation GR NO. 159862 October 17, 2006
A project employee is one whose "employment has been fixed for a specific project or undertaking, the completion
or termination of which has been determined at the time of the engagement of the employee or where the work or
service to be performed is seasonal in nature and the employment is for the duration of the season." Before an
employee hired on a per project basis can be dismissed, a report must be made to the nearest employment office
of the termination of the services of the workers every time it completed a project, pursuant to Policy Instruction
No. 20. While the appropriate evidence to show that a person is a project employee is the employment contract
specifying the project and the duration of such project, the existence of such contract is not always conclusive of
the nature of one's employment.
Re: termination of purported project employee

This Court has held that an employment ceases to be coterminous with specific projects when the employee is
continuously rehired due to the demands of employer's business and re-engaged for many more projects without
interruption. (cited the case of Maraguinot again on propriety of project or work pool employees being regular).
Surely, length of time is not the controlling test for project employment. Nevertheless, it is vital in determining if the
employee was hired for a specific undertaking or tasked to perform functions vital, necessary and indispensable to
the usual business or trade of the employer. Here, respondent had been a project employee several times over.
His employment ceased to be coterminous with specific projects when he was repeatedly re-hired due to the
demands of petitioner's business. Where from the circumstances it is apparent that periods have been imposed to
preclude the acquisition of tenurial security by the employee, they should be struck down as contrary to public
policy, morals, good customs or public order.
287. Hanjin Heavy Industries v. Ibanez GR NO. 170181 June 16, 2008
In a number of cases, the Court has held that the length of service or the re-hiring of construction workers on a
project-to-project basis does not confer upon them regular employment status, since their re-hiring is only a
natural consequence of the fact that experienced construction workers are preferred. Employees who are hired for
carrying out a separate job, distinct from the other undertakings of the company, the scope and duration of which
has been determined and made known to the employees at the time of the employment, are properly treated as
project employees and their services may be lawfully terminated upon the completion of a project. Should the
terms of their employment fail to comply with this standard, they cannot be considered project employees.
Even though the absence of a written contract does not by itself grant regular status to respondents, such a
contract is evidence that respondents were informed of the duration and scope of their work and their status as
project employees. In this case, where no other evidence was offered, the absence of an employment contract
puts into serious question whether the employees were properly informed at the onset of their employment status
as project employees. It is doctrinally entrenched that in illegal dismissal cases, the employer has the burden of
proving with clear, accurate, consistent and convincing evidence that a dismissal was valid. Absent any other
proof that the project employees were informed of their status as such, it will be presumed that they are regular
employees in accordance with Clause 3.3(a) of Department Order No. 19, Series of 1993.
Re: Section 2.2, Department Order No. 19, Series of 1993, entitled Guidelines Governing the Employment of
Workers in the Construction Industry, issued by the DOLE:
2.2 Indicators of project employment. - Either one or more of the following circumstances, among others,
may be considered as indicators that an employee is a project employee.
(a) The duration of the specific/identified undertaking for which the worker is engaged is
reasonably determinable.
(b) Such duration, as well as the specific work/ service to be performed, is defined in an
employment agreement and is made clear to the employee at the time of hiring.
(c) The work/service performed by the employee is in connection with the particular project/
undertaking for which he is engaged.
(d) The employee, while not employed and awaiting engagement, is free to offer his services to
any other employer.
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(e) The termination of his employment in the particular project/undertaking is reported to the
Department of Labor and Employment (DOLE) Regional Office having jurisdiction over the
workplace within 30 days following the date of his separation from work, using the prescribed
form on employees' terminations/ dismissals/suspensions.
(f) An undertaking in the employment contract by the employer to pay completion bonus to the
project employee as practiced by most construction companies.
288. PNOC - Energy Development Corporation v. NLRC GR NO. 169353 April 13, 2007
Project employees are those workers hired (1) for a specific project or undertaking, and (2) the completion or
termination of such project or undertaking has been determined at the time of the engagement of the employee.
However, petitioner failed to substantiate its claim that respondents were hired merely as project employees. A
perusal of the records of the case reveals that the supposed specific project or undertaking of petitioner was not
satisfactorily identified in the contracts of respondents.
Unmistakably, the alleged projects stated in the employment contracts were either too vague or imprecise to be
considered as the "specific undertaking" contemplated by law. Petitioner’s act of repeatedly and continuously
hiring respondents to do the same kind of work belies its contention that respondents were hired for a specific
project or undertaking. The absence of a definite duration for the project/s has led the Court to conclude that
respondents are, in fact, regular employees. It must be stressed that a contract that misuses a purported
fixed-term employment to block the acquisition of tenure by employees deserves to be struck down for being
contrary to law, morals, good customs, public order and public policy.
289. Filsystems and Cruz v. Puente GR NO. 153832 March 18, 2005
The provisions of Art. 280, Labor Code and DO 19,11 s. 2013 on construction industry make it clear that a project
employee is one whose "employment has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the engagement of the employee or where the work or
services to be performed is seasonal in nature and the employment is for the duration of the season." In D.M.
Consunji, Inc. v. NLRC, this Court has ruled that "the length of service of a project employee is not the controlling
test of employment tenure but whether or not 'the employment has been fixed for a specific project or undertaking
the completion or termination of which has been determined at the time of the engagement of the employee.”
That his employment contract does not mention particular dates that establish the specific duration of the project
does not preclude his classification as a project employee. This fact is clear from the provisions of Clause 3.3(a)
of Department Order No. 19, which states:
a) Project employees whose aggregate period of continuous employment in a construction company is at
least one year shall be considered regular employees, in the absence of a "day certain" agreed upon by
the parties for the termination of their relationship. Project employees who have become regular shall be
entitled to separation pay.
A "day" as used herein, is understood to be that which must necessarily come, although is may not be known
exactly when. This means that where the final completion of a project or phase thereof is in fact determinable and
the expected completion is made known to the employee, such project employee may not be considered regular,
notwithstanding the one year duration of employment in the project or phase thereof or the one-year duration of
two or more employments.
290. E. Ganzon, Inc. v. Ando GR NO. 214283 March 18, 2005

Project employment should not be confused and interchanged with fixed-term employment: x x x While the former
requires a project as restrictively defined above, the duration of a fixed-term employment agreed upon by the
parties may be any day certain, which is understood to be "that which must necessarily come although it may not
be known when." The decisive determinant in fixed-term employment is not the activity that the employee is called
upon to perform but the day certain agreed upon by the parties for the commencement and termination of the
employment relationship.
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In this case, the duration of the specific/identified undertaking for which Ando was engaged was reasonably
determinable. Although the employment contract provided that the stated date may be "extended or shortened
depending on the work phasing," it specified the termination of the parties' employment relationship on a "day
certain," which is "upon completion of the phase of work for which [he was] hired for." Ando's tenure as a project
employee remained definite because there was certainty of completion or termination of the Bahay Pamulinawen
and the West Insula Projects. The fact that Ando was required to render services necessary or desirable in the
operation of EGI's business for more than a year does not in any way impair the validity of his project employment
contracts.
291. Mercado v. NLRC GR NO. 79869 September 5, 1991

Art. 280 of the Labor Code, reads:
“xxx an employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That, any
employee who has rendered at least one year of service whether such service is continuous or broken, shall be
considered a regular employee with respect to the activity in which he is employed and his employment shall continue
while such actually exists."
The second paragraph of Art. 280 demarcates as "casual" employees, all other employees who do not fall under
the definition of the preceding paragraph. The proviso, in said second paragraph, deems as regular employees
those "casual" employees who have rendered at least one year of service regardless of the fact that such service
may be continuous or broken.
Policy Instruction No. 12 of the DOLE discloses that the concept of regular and casual employees was designed
to put an end to casual employment in regular jobs, which has been abused by many employers to prevent so
called casuals from enjoying the benefits of regular employees or to prevent casuals from joining unions. Hence,
the proviso is applicable only to the employees who are deemed "casuals" but not to the "project" employees nor
the regular employees treated in paragraph one of Art. 280. Clearly, therefore, petitioners being project
employees, or, to use the correct term, seasonal employees, their employment legally ends upon completion of
the project or the season. The termination of their employment cannot and should not constitute an illegal
dismissal.
292. Cocomangas Hotel Beach Resort v. Visca GR NO. 167045 August 29, 2008
A project employee is one whose "employment has been fixed for a specific project or undertaking, the completion
or termination of which has been determined at the time of the engagement of the employee or where the work or
service to be performed is seasonal in nature and the employment is for the duration of the season." Before an
employee hired on a per-project basis can be dismissed, a report must be made to the nearest employment office,
of the termination of the services of the workers every time a project is completed, pursuant to Policy Instruction
No. 20.
In the present case, respondents cannot be classified as project employees, since they worked continuously for
petitioners from three to twelve years without any mention of a "project" to which they were specifically assigned.
This Court has held that an employment ceases to be coterminous with specific projects when the employee is
continuously rehired due to the demands of employer's business and re-engaged for many more projects without
interruption.
293. Gadia v. Sykes Asia GR NO. 209499 January 28, 2015

In order to safeguard the rights of workers against the arbitrary use of the word "project" to prevent employees
from attaining a regular status, employers claiming that their workers are project[-based] employees should not
only prove that the duration and scope of the employment was specified at the time they were engaged, but also,
that there was indeed a project.” Verily, for an employee to be considered project based, the employer must show
compliance with two (2) requisites, namely that: (a) the employee was assigned to carry out a specific project or
undertaking; and (b) the duration and scope of which were specified at the time they were engaged for such
project.
D. Seasonal
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294. Hacienda Fatima v. National Federation of Sugarcane Workers GR NO. 149440
For respondents to be excluded from those classified as regular employees under Art. 280 of the Labor Code, it is
not enough that they perform work or services that are seasonal in nature. They must have also been employed
only for the duration of one season.
The fact that respondents do not work continuously for one whole year but only for the duration of the season
does not detract from considering them in regular employment since in a litany of cases this Court has already
settled that seasonal workers who are called to work from time to time and are temporarily laid off during
off-season are not separated from service in said period, but merely considered on leave until reemployed.
295. Gapayao v. Fulo GR NO. 193493 June 13, 2013

Regular seasonal employees are those called to work from time to time. The nature of their relationship with the
employer is such that during the off season, they are temporarily laid off; but reemployed during the summer
season or when their services may be needed. They are in regular employment because of the nature of their
job,and not because of the length of time they have worked. However, this is subject to the exception that that
seasonal workers who have worked for one season only may not be considered regular employees.
296. Universal Robina Sugar Milling Corporation v. Acibo GR NO. 186439 January 15, 2014
To exclude the asserted "seasonal" employee from those classified as regular employees, the employer must
show that: (1) the employee must be performing work or services that are seasonal in nature; and (2) he had been
employed for the duration of the season. Hence, when the "seasonal" workers are continuously and repeatedly
hired to perform the same tasks or activities for several seasons or even after the cessation of the season, this
length of time may likewise serve as badge of regular employment.
297. Paz v. Northern Tobacco Redrying Co. GR NO. 199554 February 18, 2015
In the case at bar, while it may appear that the work of petitioners is seasonal, inasmuch as petitioners have
served the company for many years, some for over 20 years, performing services necessary and indispensable to
respondent’s business, serve as badges of regular employment. Moreover, the fact that petitioners do not work
continuously for one whole year but only for the duration of the tobacco season does not detract from considering
them in regular employment since in a litany of cases this Court has already settled that seasonal workers who
are called to work from time to time and are temporarily laid off during off-season are not separated from service
in said period, but are merely considered on leave until reemployed.
E. Casual

298. Kimberly Independent Labor Union v. Drilon GR NO. 77629 May 9, 1990
While the actual regularization of these employees entails the mechanical act of issuing regular appointment
papers and compliance with such other operating procedures as may be adopted by the employer, it is more in
keeping with the intent and spirit of the law to rule that the status of regular employment attaches to the casual
worker on the day immediately after the end of his first year of service. To rule otherwise, and to instead make
their regularization dependent on the happening of some contingency or the fulfillment of certain requirements, is
to impose a burden on the employee which is not sanctioned by law.
The law is explicit. As long as the employee has rendered at least one year of service, he becomes a regular
employee with respect to the activity in which he is employed. The law does not provide the qualification that the
employee must first be issued a regular appointment or must first be formally declared as such before he can
acquire a regular status. Obviously, where the law does not distinguish, no distinction should be drawn.
299. Philippine Geothermal, Inc. v. NLRC GR NO. 82643-67 August 30, 1990
This Court classified the two kinds of regular employees, as: 1) those who are engaged to perform activities which
are usually necessary or desirable in the usual business or trade of the employer; and 2) those who have
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rendered at least one (1) year of service, whether continuous or broken with respect to the activity in which they
are employed.
Assuming therefore, that an employee could properly be regarded as a casual (as distinguished from a regular
employee) he becomes entitled to be regarded as a regular employee of the employer as soon as he has
completed one year of service. Under the circumstances, employers may not terminate the service of a regular
employee except for a just cause or when authorized under the Labor Code. It is not difficult to see that to uphold
the contractual arrangement between the employer and the employee would in effect be to permit employers to
avoid the necessity of hiring regular or permanent employees indefinitely on a temporary or casual status, thus to
deny them security of tenure in their jobs. Article 106 of the Labor Code is precisely designed to prevent such
result.
F. Fixed Term

300. Brent School v. Zamora 181 SCRA 702
"Where a contract specifies the period of its duration, it terminates on the expiration of such period." The entire
purpose behind the development of legislation culminating in the present Article 280 of the Labor Code clearly
appears to have been, as already observed, to prevent circumvention of the employee's right to be secure in his
tenure, the clause in said article indiscriminately and completely ruling out all written or oral agreements
conflicting with the concept of regular employment as defined therein should be construed to refer to the
substantive evil that the Code itself has singled out: agreements entered into precisely to circumvent security of
tenure.
It should have no application to instances where a fixed period of employment was agreed upon knowingly and
voluntarily 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 where it satisfactorily appears that the
employer and employee dealt with each other on more or less equal terms with no moral dominance whatever
being exercised by the former over the latter.
301. Fuji Network Television v. Espiritu GR No. 204944-45 December 3, 2014

Distinctions among fixed-term employees, independent contractors, and regular employees:
1) The fixed period of employment was knowingly and voluntarily agreed upon by the parties without any
force, duress, or improper pressure being brought to bear upon the employee and absent any other
circumstances vitiating his consent; 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.
These indications, which must be read together, make the Brent doctrine applicable only in a few special cases
wherein the employer and employee are on more or less in equal footing in entering into the contract. The reason
for this is evident: when a prospective employee, on account of special skills or market forces, is in a position to
make demands upon the prospective employer, such prospective employee needs less protection than the
ordinary worker. Lesser limitations on the parties’ freedom of contract are thus required for the protection of the
employee.
Employees under fixed-term contracts cannot be independent contractors because in fixed-term contracts, an
employer-employee relationship exists. The test in this kind of contract is not the necessity and desirability of the
employee’s activities, "but the day certain agreed upon by the parties for the commencement and termination of
the employment relationship." Further, an employee can be a regular employee with a fixed-term contract. The
law does not preclude the possibility that a regular employee may opt to have a fixed-term contract for valid
reasons. This was recognized in Brent: For as long as it was the employee who requested, or bargained, that the
contract have a "definite date of termination," or that the fixed-term contract be freely entered into by the employer
and the employee, then the validity of the fixed-term contract will be upheld.
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302. Samonte v. La Salle Greenhills GR NO. 199683 February 10, 2016
The decisive determinant in the term employment contract should not be the activities that the employee is called
upon to perform, but the day certain agreed upon by the parties for the commencement and termination of their
employment relationship, a day certain being understood to be "that which must necessarily come, although it
may not be known when.
Tersely put, a fixed-term employment is allowable under the Labor Code only if the term was voluntarily and
knowingly entered into by the parties who must have dealt with each other on equal terms not one exercising
moral dominance over the other. Further, a fixed-term contract is an employment contract, the repeated renewals
of which make for a regular employment.
303. Poseidon Fishing v. NLRC GR NO. 168052 February 20, 2006

In Brent, the acid test in considering fixed-term contracts as valid is: if from the circumstances it is apparent that
periods have been imposed to preclude acquisition of tenurial security by the employee, they should be
disregarded for being contrary to public policy.
In the case under consideration, the agreement has such an objective - to frustrate the security of tenure of
private respondent- and fittingly, must be nullified. In this case, petitioners’ intent to evade the application of
Article 280 of the Labor Code is unmistakable. In a span of 12 years, private respondent worked for petitioner
company first as a Chief Mate, then Boat Captain, and later as Radio Operator. His job was directly related to the
deep-sea fishing business of petitioner Poseidon. His work was, therefore, necessary and important to the
business of his employer. Unlike in the Brent case where the period of the contract was fixed and clearly stated,
note that in the case at bar, the terms of employment of private respondent as provided in the Kasunduan was not
only vague, it also failed to provide an actual or specific date or period for the contract. As adroitly observed by
the Labor Arbiter.
304. Fabella v. San Miguel Corporation GR NO. 150658 February 9, 2007

A stipulation [for a fixed-term] in an agreement can be ignored as and when it is utilized to deprive the employee
of his security of tenure. The sheer inequality that characterizes employer-employee relations, where the scales
generally tip against the employee, often scarcely provides him real and better options.
As Brent pronounces, a fixed-term employment is valid only under certain circumstances, such as when the
employee himself insists upon the period, or where the nature of the engagement is such that, without being
seasonal or for a specific project, a definite date of termination is a sine qua non. That petitioners themselves
insisted on the one-year fixed-term is not even alleged by respondents. In fact, the sustained desire of each of the
petitioners to enter into another employment contract upon the termination of the earlier ones clearly indicates
their interest in continuing to work for SMC.
IV. Management Prerogatives

A. Right to discipline

305. St. Luke’s Medical Center v. Sanchez GR NO. 212054 March 11, 2015
The right of an employer to regulate all aspects of employment, aptly called "management prerogative," gives
employers the freedom to regulate, according to their discretion and best judgment, all aspects of employment,
including work assignment, working methods, processes to be followed, working regulations, transfer of
employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers. In this light,
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.
Among the employer's management prerogatives is the right to prescribe reasonable rules and regulations
necessary or proper for the conduct of its business or concern, to provide certain disciplinary measures to
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implement said rules and to assure that the same would be complied with. At the same time, the employee has
the corollary duty to obey all reasonable rules, orders, and instructions of the employer; and willful or intentional
disobedience thereto, as a general rule, justifies termination of the contract of service and the dismissal of the
employee. Note that for an employee to be validly dismissed on this ground, the employer's orders, regulations, or
instructions must be: (1) reasonable and lawful, (2) sufficiently known to the employee, and (3) in connection with
the duties which the employee has been engaged to discharge.
306. Philippine Span Asia Carriers v. Pelayo GR No. 212003 February 28, 2018
An employer who conducts investigations following the discovery of misdeeds by its employees is not being
abusive when it seeks information from an employee involved in the workflow which occasioned the misdeed.
Basic diligence impels an employer to cover all bases and inquire from employees who, by their inclusion in that
workflow, may have participated in the misdeed or may have information that can lead to the perpetrator's
identification and the employer's adoption of appropriate responsive measures. An employee's involvement in
such an investigation will naturally entail difficulty. This difficulty does not mean that the employer is creating an
inhospitable employment atmosphere so as to ease out the employee involved in the investigation.
While adopted with a view "to give maximum aid and protection to labor," labor laws are not to be applied in a
manner that undermines valid exercise of management prerogative. Disciplining employees does not only entail
the demarcation of permissible and impermissible conduct through company rules and regulations, and the
imposition of appropriate sanctions. It also involves intervening mechanisms "to assure that [employers' rules]
would be complied with." These mechanisms include the conduct of investigations to address employee
wrongdoing. While due process, both substantive and procedural, is imperative in the discipline of employees, our
laws do not go so far as to mandate the minutiae of how employers must actually investigate employees'
wrongdoings. Employers are free to adopt different mechanisms such as interviews, written statements, or probes
by specially designated panels of officers.
B. Right to transfer

307. Pekcson v. Robinsons Supermarket GR No. 198534 July 3, 2013
Concerning the transfer of employees, these are the following jurisprudential guidelines:
(a) a transfer is a movement from one position to another of equivalent rank, level or salary without break
in the service or a lateral movement from one position to another of equivalent rank or salary;
(b) the employer has the inherent right to transfer or reassign an employee for legitimate business
purposes;
(c) a transfer becomes unlawful where it is motivated by discrimination or bad faith or is effected as a form
of punishment or is a demotion without sufficient cause;
(d) the employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to
the employee.
But like all other rights, there are limits to the exercise of managerial prerogative to transfer personnel, and on the
employer is laid the burden to show that the same is without grave abuse of discretion, bearing in mind the basic
elements of justice and fair play. Indeed, management prerogative may not be used as a subterfuge by the
employer to rid himself of an undesirable worker. If the transfer of an employee is not unreasonable, or
inconvenient, or prejudicial to him, and it does not involve a demotion in rank or a diminution of his salaries,
benefits and other privileges, the employee may not complain that it amounts to a constructive dismissal.
C. Right to impose productivity standard

308. Puncia v. Toyota Shaw GR No. 214399 June 28, 2016
In Aliling v. Feliciano, the Court held that an employer is entitled to impose productivity standards for its
employees, and the latter's non-compliance therewith can lead to his termination from work, viz.:
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The practice of a company in laying off workers because they failed to make the work quota has been recognized
in this jurisdiction. . . . . In the case at bar, the petitioners' failure to meet the sales quota assigned to each of them
constitute a just cause of their dismissal, regardless of the permanent or probationary status of their employment.
Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may
constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work goals or work
quotas, either by failing to complete the same within the allotted reasonable period, or by producing unsatisfactory
results.
D. Change of work hours

E. Bonuses

309. Metro Transit Organization v. NLRC GR NO. 116008 July 11, 1995
A "bonus" is an amount granted and paid to an employee for his industry and loyalty which contributed to the
success of the employer's business and made possible the realization of profits. It is something given in addition
to what is ordinarily received by or strictly due to the recipient.
The general rule is that a bonus is a gratuity or an act of liberality which the recipient has no right to demand as a
matter of right. A bonus, however, is a demandable or enforceable obligation when it is made part of the wage or
salary or compensation of the employee. If it is additional compensation which the employer promised and agreed
to give without any conditions imposed for its payment, such as success of business or greater production or
output, then it is part of the wage. But if it is paid only if profits are realized or if a certain level of productivity is
achieved, it can not be considered part of the wage. Where it is not payable to all but only to some employees and
only when their labor becomes more efficient or more productive, it is only an inducement for efficiency, a prize
therefor, not a part of the wage.
F. Prescription of rules on marriage

310. Duncan Association of Detailman - PTGWO v. Glaxo Wellcome GR NO. 162994
The prohibition against personal or marital relationships with employees of competitor companies upon Glaxo’s
employees is reasonable under the circumstances because relationships of that nature might compromise the
interests of the company. In laying down the assailed company policy, Glaxo only aims to protect its interests
against the possibility that a competitor company will gain access to its secrets and procedures. Indeed, while our
laws endeavor to give life to the constitutional policy on social justice and the protection of labor, it does not mean
that every labor dispute will be decided in favor of the workers. The law also recognizes that management has
rights which are also entitled to respect and enforcement in the interest of fair play.
As correctly put by the appellate court: “the policy being questioned is not a policy against marriage. An employee
of the company remains free to marry anyone of his or her choosing. The policy is not aimed at restricting a
personal prerogative that belongs only to the individual. However, an employee’s personal decision does not
detract the employer from exercising management prerogatives to ensure maximum profit and business success .
. .”
311. Star Paper v. Simbol GR No. 164774 April 12, 2006

It is true that the policy of petitioners prohibiting close relatives from working in the same company takes the
nature of an anti-nepotism employment policy. Companies adopt these policies to prevent the hiring of unqualified
persons based on their status as a relative, rather than upon their ability. These policies focus upon the potential
employment problems arising from the perception of favoritism exhibited towards relatives.
We note that since the finding of a bona fide occupational qualification justifies an employer's no-spouse rule, the
exception is interpreted strictly and narrowly by these state courts. There must be a compelling business
necessity for which no alternative exists other than the discriminatory practice. It is significant to note that in the
case at bar, respondents were hired after they were found fit for the job, but were asked to resign when they
married a co-employee. Petitioners failed to show how the marriage of Simbol, then a Sheeting Machine
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Operator, to Alma Dayrit, then an employee of the Repacking Section, could be detrimental to its business
operations.
The policy is premised on the mere fear that employees married to each other will be less efficient. If we uphold
the questioned rule without valid justification, the employer can create policies based on an unproven presumption
of a perceived danger at the expense of an employee's right to security of tenure.
G. Post-employment ban
312. Tiu v. Platinum Plans GR No. 163512 February 28, 2007

Conformably then with the aforementioned pronouncements, a non-involvement clause is not necessarily void for
being in restraint of trade as long as there are reasonable limitations as to time, trade, and place. In this case, the
non-involvement clause has a time limit: two years from the time petitioner's employment with respondent ends. It
is also limited as to trade, since it only prohibits petitioner from engaging in any pre-need business akin to
respondent's.
V. Post-Employment
A. Voluntary resignation by the employee

313. Doble v. ABB GR No. 215627 June 5, 2017
In illegal dismissal cases, the fundamental rule is that when an employer interposes the defense of resignation,
the burden to prove that the employee indeed voluntarily resigned necessarily rests upon the employer.
"[r]esignation is the voluntary act of an employee who is in a situation where one believes that personal reasons
cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself
from employment. It is a formal pronouncement or relinquishment of an office, with the intention of relinquishing
the office accompanied by the act of relinquishment. As the intent to relinquish must concur with the overt act of
relinquishment, the acts of the employee before and after the alleged resignation must be considered in
determining whether he or she, in fact, intended to sever his or her employment.
314. Mora v. Avesco Marketing GR NO. 177414 November 14, 2008

Voluntary resignations being unconditional in nature, both the intent and the overt act of relinquishment should
concur. If the employer introduces evidence purportedly executed by an employee as proof of voluntary
resignation yet the employee specifically denies such evidence, as in petitioner's case, the employer is burdened
to prove the due execution and genuineness of such evidence.
For a resignation tendered by an employee to take effect, it should first be accepted or approved by the employer.
Petitioner's receipt by respondent's personnel department of his resignation letter is not equivalent to approval.
Since petitioner requested that his resignation was to be effective a month later or on April 25, 2003, respondent's
approval was a fortiori necessary. That respondent issued the "show cause" letter a day after petitioner filed the
controversial letter of resignation could only mean that it did not accept the same.
315. Intertrod Maritime v. NLRC GR No. 81087 June 19, 1991

Resignation is the voluntary act of an employee who "finds himself in a situation where he believes that personal
reasons cannot be sacrificed in favor of the exigency of the service, then he has no other choice but to
disassociate himself from his employment." The employer has no control over resignations and so, the notification
requirement was devised in order to ensure that no disruption of work would be involved by reason of the
resignation. This practice has been recognized because "every business enterprise endeavors to increase its
profits by adopting a device or means designed towards that goal."
Resignations, once accepted and being the sole act of the employee, may not be withdrawn without the consent
of the employer. In the instant case, the Master had already accepted the resignation and, although the private
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respondent was being required to serve the thirty (30) days notice provided in the contract, his resignation was
already approved. When he later signified his intention of continuing his work, it was already up to the petitioners
to accept his withdrawal of his resignation. The mere fact that they did not accept such withdrawal did not
constitute illegal dismissal for acceptance of the withdrawal of the resignation was their (petitioners') sole
prerogative.
316. Hechanova Bugay Vilchez Lawyers v. Matorre GR No. 198261 October 16, 2013
The 30-day notice requirement for an employee's resignation is actually for the benefit of the employer who has
the discretion to waive such period. Its purpose is to afford the employer enough time to hire another employee if
needed and to see to it that there is proper turn-over of the tasks which the resigning employee may be handling.
As one author (Azucena) puts it,
. . . The rule requiring an employee to stay or complete the 30-day period prior to the effectivity of his
resignation becomes discretionary on the part of management as an employee who intends to resign may
be allowed a shorter period before his resignation becomes effective.
B. Involuntary resignation/Constructive dismissal

317. Torreda v. Investment and Capital Corporation GR No. 229881 September 5, 2018
Constructive dismissal is an involuntary resignation resorted to when continued employment is rendered
impossible, unreasonable or unlikely; or when there is a demotion in rank and/or a diminution in pay. It exists
when there is a clear act of discrimination, insensibility or disdain by an employer, which makes it unbearable for
the employee to continue his/her employment. In cases of constructive dismissal, the impossibility,
unreasonableness, or unlikelihood of continued employment leaves an employee with no other viable recourse
but to terminate his or her employment.
There is a difference between illegal and constructive dismissal. Illegal dismissal is readily shown by the act of the
employer in openly seeking the termination of an employee while constructive dismissal, being a dismissal in
disguise, is not readily indicated by any similar act of the employer that would openly and expressly show its
desire and intent to terminate the employment relationship. As stated in Fortuny Garments/Johnny Co. v. Castro,
the circumstances before and after the signing of the resignation letter must be examined to determine the
voluntariness of the said resignation
318. Ico v. Systems Technology Institute GR No. 185100 July 9, 2014

When another employee is soon after appointed to a position which the employer claims has been abolished,
while the employee who had to vacate the same is transferred against her will to a position which does not exist in
the corporate structure, there is evidently a case of illegal constructive dismissal.
319. Philippine Span Asia v. Pelayo GR No. 212003 February 23, 2018
"Not every inconvenience, disruption, difficulty, or disadvantage that an employee must endure sustains a finding
of constructive dismissal." It is an employer's right to investigate acts of wrongdoing by employees. Employees
involved in such investigations cannot ipso facto claim that employers are out to get them. Their involvement in
investigations will naturally entail some inconvenience, stress, and difficulty. However, even if they might be
burdened — and, in some cases, rather heavily so — it does not necessarily mean that an employer has
embarked on their constructive dismissal.
320. Agcolicol v. Casino GR No. 217732 June 15, 2016

An employee is considered to be constructively dismissed from service if an act of clear discrimination,
insensibility or disdain by an employer has become so unbeatable to the employee as to leave him or her with no
option but to forego with his or her continued employment.
From said definition, it can be gathered that various situations, whereby the employee is intentionally placed by
the employer in a situation which will result in the former's being coerced into severing his ties with the latter, can
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result in constructive dismissal. One such situation is where an employee is preventively suspended pending
investigation for an indefinite period of time.
C. Procedural due process

1. Required due process in Termination for Just causes
321. Agabon v. NLRC GR No. 158693 November 17, 2004

Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give the employee
two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the
employment: a notice specifying the grounds for which dismissal is sought a hearing or an opportunity to be heard
and after hearing or opportunity to be heard, a notice of the decision to dismiss; and (2) if the dismissal is based
on authorized causes under Articles 283 and 284, the employer must give the employee and the Department of
Labor and Employment written notices 30 days prior to the effectivity of his separation.
From the foregoing rules four possible situations may be derived:

The dismissal is for a just cause Due process was observed The dismissal is undoubtedly valid
under Article 282 of the Labor and the employer will not suffer any
Code, for an authorized cause liability.
under Article 283, or for health
reasons under Article 284
the dismissal is without just or Due process was observed Dismissal is illegal; Article 279
authorized cause mandates that the employee is
entitled to reinstatement without
loss of seniority rights and other
privileges and full backwages,
inclusive of allowances, and other
benefits or their monetary
equivalent computed from the time
the compensation was not paid up
to the time of actual reinstatement.
The dismissal is without just and No due process Same as second situation
authorized case
Dismissal was with just or No due process The dismissal should be upheld.
authorized cause While the procedural infirmity
cannot be cured, it should not
invalidate the dismissal. However,
the employer should be held liable
for non-compliance with the
procedural requirements of due
process.
Due process under the Labor Code, like Constitutional due process, has two aspects: substantive, i.e., the valid
and authorized causes of employment termination under the Labor Code; and procedural, i.e., the manner of
dismissal. Procedural due process requirements for dismissal are found in the Implementing Rules of P.D. 442, as
amended, otherwise known as the Labor Code of the Philippines in Book VI, Rule I, Sec. 2, as amended by
Department Order Nos. 9 and 10. Constitutional due process protects the individual from the government and
assures him of his rights in criminal, civil or administrative proceedings; while statutory due process found in the
Labor Code and Implementing Rules protects employees from being unjustly terminated without just cause after
notice and hearing.
The violation of the petitioners' right to statutory due process by the private respondent warrants the payment of
indemnity in the form of nominal damages. The amount of such damages is addressed to the sound discretion of
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the court, taking into account the relevant circumstances. Considering the prevailing circumstances in the case at
bar, we deem it proper to fix it at P30,000.00.
322. King of Kings Transport v. Mamac GR No. 166208 June 29, 2007
The procedure for terminating an employee is found in Book VI, Rule I, Section 2(d) of the Omnibus Rules
Implementing the Labor Code:
SEC. 2 Standards of due process: requirements of notice. — In all cases of termination of employment, the following
standards of due process shall be substantially observed:
I. For termination of employment based on just causes as defined in Article 282 of the Code:
(a) A written notice served on the employee specifying the ground or grounds for termination, and giving to said
employee reasonable opportunity within which to explain his side; CaEATI
(b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so
desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against
him; and
(c) A written notice of termination served on the employee indicating that upon due consideration of all the
circumstances, grounds have been established to justify his termination.
In case of termination, the foregoing notices shall be served on the employee's last known address.
To clarify, the following should be considered in terminating the services of employees:

(1) The first written notice to be served on the employees should contain the specific causes or grounds for
termination against them, and a directive that the employees are given the opportunity to submit their written
explanation within a reasonable period.
"Reasonable opportunity" under the Omnibus Rules means every kind of assistance that management must
accord to the employees to enable them to prepare adequately for their defense. This should be construed as a
period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study
the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the
defenses they will raise against the complaint.
Moreover, in order to enable the employees to intelligently prepare their explanation and defenses, the notice
should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against
the employees. A general description of the charge will not suffice. Lastly, the notice should specifically mention
which company rules, if any, are violated and/or which among the grounds under Art. 282 is being charged
against the employees.
(2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the
employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2)
present evidence in support of their defenses; and (3) rebut the evidence presented against them by the
management. During the hearing or conference, the employees are given the chance to defend themselves
personally, with the assistance of a representative or counsel of their choice. Moreover, this conference or hearing
could be used by the parties as an opportunity to come to an amicable settlement.
(3) After determining that termination of employment is justified, the employers shall serve the employees a
written notice of termination indicating that: (1) all circumstances involving the charge against the employees have
been considered; and (2) grounds have been established to justify the severance of their employment.
323. Perez v. Philippine Telegraph and Telephone Co., GR No. 152048 April 7, 2009
Article 277 (b) of the Labor Code provides that, in cases of termination for a just cause, an employee must be
given "ample opportunity to be heard and to defend himself." Thus, the opportunity to be heard afforded by law to
the employee is qualified by the word "ample" which ordinarily means "considerably more than adequate or
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sufficient." 21 In this regard, the phrase "ample opportunity to be heard" can be reasonably interpreted as
extensive enough to cover actual hearing or conference. To this extent, Section 2 (d), Rule I of the Implementing
Rules of Book VI of the Labor Code is in conformity with Article 277 (b).
Nonetheless, Section 2 (d), Rule I of the Implementing Rules of Book VI of the Labor Code should not be taken to
mean that holding an actual hearing or conference is a condition sine qua non for compliance with the due
process requirement in termination of employment. The test for the fair procedure guaranteed under Article 277
(b) cannot be whether there has been a formal pretermination confrontation between the employer and the
employee. The "ample opportunity to be heard" standard is neither synonymous nor similar to a formal hearing.
324. Puncia v. Toyota Shaw GR NO. 214399 June 28, 2016

A closer look at the records reveals that in the Notice to Explain, Puncia was being made to explain why no
disciplinary action should be imposed upon him for repeatedly failing to reach his monthly sales quota, which act,
as already adverted to earlier, constitutes gross inefficiency. On the other hand, a reading of the Notice of
Termination shows that Puncia was dismissed not for the ground stated in the Notice to Explain, but for gross
insubordination on account of his non-appearance in the scheduled October 17, 2011 hearing without justifiable
reason. In other words, while Toyota afforded Puncia the opportunity to refute the charge of gross inefficiency
against him, the latter was completely deprived of the same when he was dismissed for gross insubordination —
a completely different ground from what was stated in the Notice to Explain. As such, Puncia's right to procedural
due process was violated.
Hence, considering that Toyota had dismissed Puncia for a just cause, albeit failed to comply with the proper
procedural requirements, the former should pay the latter nominal damages in the amount of P30,000.00 in
accordance with recent jurisprudence
325. Sta. Isabel v. Perla Compania de Seguros GR No. 219430 November 7, 2016
In this case, a plain reading of the Notice to Explain and Notice of Termination both dated November 26, 2012
reveals that the charge of insubordination against Sta. Isabel was grounded on her refusal to report to the Head
Office despite due notice. While Perla's directives for Sta. Isabel to report to the Head Office indeed appear to be
reasonable, lawful, and made known to the latter, it cannot be said that such directives pertain to her duties as a
Claims Adjuster, i.e., handling and settling claims of Perla's Quezon City Branch, regardless of whether her
refusal to heed them was actually willful or not.
As correctly pointed out by the labor tribunals, Sta. Isabel's failure or refusal to comply with the foregoing
directives should only be deemed as a waiver of her right to procedural due process in connection with the
Ricsons incident, and is not tantamount to willful disobedience or insubordination.
2. Required Due Process for Authorized Causes

326. Jaka Food Processing v. Pacot GR No. 151378 March 28, 2005
The difference between Agabon and the instant case is that in the former, the dismissal was based on a just
cause under Article 282 of the Labor Code while in the present case, respondents were dismissed due to
retrenchment, which is one of the authorized causes under Article 283 of the same Code. A dismissal for an
authorized cause under Article 283 does not necessarily imply delinquency or culpability on the part of the
employee. Instead, the dismissal process is initiated by the employer's exercise of his management prerogative,
i.e. when the employer opts to install labor saving devices, when he decides to cease business operations or
when, as in this case, he undertakes to implement a retrenchment program. The clear-cut distinction between a
dismissal for just cause under Article 282 and a dismissal for authorized cause under Article 283 is further
reinforced by the fact that in the first, payment of separation pay, as a rule, is not required, while in the second,
the law requires payment of separation pay.
Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause under Article 282 but the employer
failed to comply with the notice requirement, the sanction to be imposed upon him should be tempered because
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the dismissal process was, in effect, initiated by an act imputable to the employee; and (2) if the dismissal is
based on an authorized cause under Article 283 but the employer failed to comply with the notice requirement, the
sanction should be stiffer because the dismissal, process was initiated by the employer's exercise of his
management prerogative.
It is established that there was ground for respondents' dismissal, i.e., retrenchment, which is one of the
authorized causes enumerated under Article 283 of the Labor Code.Likewise, it is established that JAKA failed to
comply with the notice requirement under the same Article. Considering the factual circumstances in the instant
case and the above ratiocination, we, therefore, deem it proper to fix the indemnity at P50,000.00.
3. Contractual Due process

327. Abbot Laboratories v. Alcaraz GR No. 192571 July 23, 2013
Despite the existence of a sufficient ground to terminate Alcaraz's employment and Abbott's compliance with the
Labor Code termination procedure, it is readily apparent that Abbott breached its contractual obligation to Alcaraz
when it failed to abide by its own procedure in evaluating the performance of a probationary employee. Once an
employer establishes an express personnel policy and the employee continues to work while the policy remains in
effect, the policy is deemed an implied contract for so long as it remains in effect. If the employer unilaterally
changes the policy, the terms of the implied contract are also thereby changed.
In this case, it is apparent that Abbott failed to follow the above-stated procedure in evaluating Alcaraz. For one,
there lies a hiatus of evidence that a signed copy of Alcaraz's PPSE form was submitted to the HRD. It was not
even shown that a PPSE form was completed to formally assess her performance. Neither was the performance
evaluation discussed with her during the third and fifth months of her employment. Nor did Abbott come up with
the necessary Performance Improvement Plan to properly gauge Alcaraz's performance with the set company
standards.
D. Just Causes for Termination of Employment

1. Serious Misconduct

328. Imasen Philippine Corporation v. Alcon GR No. 194884 October 22, 2014
Sexual intercourse inside company premises and during work hours
Misconduct is defined as an improper or wrong conduct. It is a transgression of some established and definite rule
of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error
in judgment. For misconduct or improper behavior to be a just cause for dismissal, the following elements must
concur: (a) the misconduct must be serious; (b) it must relate to the performance of the employee's duties
showing that the employee has become unfit to continue working for the employer; 32 and (c) it must have been
performed with wrongful intent.
Sexual acts and intimacies between two consenting adults belong, as a principled ideal, to the realm of purely
private relations. Whether aroused by lust or inflamed by sincere affection, sexual acts should be carried out at
such place, time and circumstance that, by the generally accepted norms of conduct, will not offend public
decency nor disturb the generally held or accepted social morals. Under these parameters, sexual acts between
two consenting adults do not have a place in the work environment. Indisputably, the respondents engaged in
sexual intercourse inside company premises and during work hours. These circumstances, by themselves, are
already punishable misconduct. Added to these considerations, however, is the implication that the respondents
did not only disregard company rules but flaunted their disregard in a manner that could reflect adversely on the
status of ethics and morality in the company.
329. Northwest Airlines v. Del Rosario GR No. 157633 September 10, 2014
Fighting as serious misconduct
In several rulings where the meaning of fight was decisive, the Court has observed that the term fight was
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considered to be different from the term argument. In People v. Asto, for instance, the Court characterized fight as
not just a merely verbal tussle but a physical combat between two opposing parties. Based on the foregoing, the
incident involving Del Rosario and Gamboa could not be justly considered as akin to the fight contemplated by
Northwest. In the eyes of the NLRC, Del Rosario and Gamboa were arguing but not fighting. The understanding
of fight as one that required physical combat was absent during the incident of May 18, 1998. Moreover, the claim
of Morales that Del Rosario challenged Gamboa to a brawl (sabunutan) could not be given credence by virtue of
its being self-serving in favor of Northwest. Moreover, even assuming arguendo that the incident was the kind of
fight prohibited by Northwest's Rules of Conduct, the same could not be considered as of such seriousness as to
warrant Del Rosario's dismissal from the service. The gravity of the fight, which was not more than a verbal
argument between them, was not enough to tarnish or diminish Northwest's public image.
330. Citibank v. NLRC GR No. 159302 February 6, 2008

Attitude problem as serious misconduct
When an employee, despite repeated warnings from the employer, obstinately refuses to curtail a bellicose
inclination such that it erodes the morale of co-employees, the same may be a ground for dismissal for serious
misconduct.
331. Mirant Philippines v. Caro GR No. 181490 April 32, 2014

Refusal to undergo drug test not necessarily serious misconduct
While the adoption and enforcement by petitioner corporation of its Anti-Drugs Policy is recognized as a valid
exercise of its management prerogative as an employer, such exercise is not absolute and unbridled. Managerial
prerogatives are subject to limitations provided by law, collective bargaining agreements, and the general
principles of fair play and justice. In the exercise of its management prerogative, an employer must therefore
ensure that the policies, rules and regulations on work-related activities of the employees must always be fair and
reasonable and the corresponding penalties, when prescribed, commensurate to the offense involved and to the
degree of the infraction. The Anti-Drugs Policy of Mirant fell short of these requirements.
The policy was not clear on what constitutes "unjustified refusal" when the subject drug policy prescribed that an
employee's "unjustified refusal" to submit to a random drug test shall be punishable by the penalty of termination
for the first offense. To be sure, the term "unjustified refusal" could not possibly cover all forms of "refusal" as the
employee's resistance, to be punishable by termination, must be "unjustified." To the mind of the Court, it is on
this area where petitioner corporation had fallen short of making it clear to its employees — as well as to
management — as to what types of acts would fall under the purview of "unjustified refusal." The fact that
petitioner corporation's own Investigating Panel and its Vice President for Operations, Sliman, differed in their
recommendations regarding respondent's case are first-hand proof that there, indeed, is ambiguity in the
interpretation and application of the subject drug policy.
332. Nacague v. Sulpicio Lines GR No. 172589 August 9, 2010

Required proof for dismissal for use of drugs
Section 36 of R.A. No. 9165 provides that drug tests shall be performed only by authorized drug testing centers.
Moreover, Section 36 also prescribes that drug testing shall consist of both the screening test and the
confirmatory test.
The law is clear that drug tests shall be performed only by authorized drug testing centers. In this case, Sulpicio
Lines failed to prove that S.M. Lazo Clinic is an accredited drug testing center. Sulpicio Lines did not even deny
Nacague's allegation that S.M. Lazo Clinic was not accredited. Also, only a screening test was conducted to
determine if Nacague was guilty of using illegal drugs. Sulpicio Lines did not confirm the positive result of the
screening test with a confirmatory test. Sulpicio Lines failed to indubitably prove that Nacague was guilty of using
illegal drugs amounting to serious misconduct and loss of trust and confidence. Sulpicio Lines failed to clearly
show that it had a valid and legal cause for terminating Nacague's employment. When the alleged valid cause for
the termination of employment is not clearly proven, as in this case, the law considers the matter a case of illegal
dismissal.
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333. Leus v. St. Scholastica’s College GR No. 187226 January 28, 2015
Secular morality as basis for determining whether there is serious miscounduct
The fact of the petitioner's pregnancy out of wedlock, without more, is not enough to characterize the petitioner's
conduct as disgraceful or immoral. There must be substantial evidence to establish that pre-marital sexual
relations and, consequently, pregnancy out of wedlock, are indeed considered disgraceful or immoral.
That the petitioner was employed by a Catholic educational institution per se does not absolutely determine
whether her pregnancy out of wedlock is disgraceful or immoral. There is still a necessity to determine whether
the petitioner's pregnancy out of wedlock is considered disgraceful or immoral in accordance with the prevailing
norms of conduct. Public and secular morality should determine the prevailing norms of conduct, not religious
morality. Accordingly, when the law speaks of immoral or, necessarily, disgraceful conduct, it pertains to public
and secular morality; it refers to those conducts which are proscribed because they are detrimental to conditions
upon which depend the existence and progress of human society.
2. Gross insubordination/Willful disobedience

334. Coffee Bean and Tea Leaf v. Arenas GR No. 208908 March 11, 2015
For willful disobedience to be a valid cause for dismissal, these two elements must concur: (1) the employee's
assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the
order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties
which he had been engaged to discharge.
Tested against these standards, it is clear that Arenas' alleged infractions do not amount to such a wrongful and
perverse attitude. Though Arenas may have admitted these wrongdoings, these do not amount to a wanton
disregard of CBTL's company policies. As Arenas mentioned in his written explanation, he was on a scheduled
break when he was caught eating at CBTL's al fresco dining area. During that time, the other service crews were
the one in charge of manning the counter.
335. Lores Realty Enterprises v. Pacia GR No. 171189 March 9, 2011

Good faith refusal to obey a lawful order
The offense of willful disobedience requires the concurrence of two (2) requisites: (1) the employee's assailed
conduct must have been willful, that is characterized by a wrongful and perverse attitude; and (2) the order
violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which
he had been engaged to discharge. Let it be noted at this point that the Court finds nothing unlawful in the
directive of Sumulong to prepare checks in payment of LREI's obligations. The availability or unavailability of
sufficient funds to cover the check is immaterial in the physical preparation of the checks.
Pacia's initial reluctance to prepare the checks, however, which was seemingly an act of disrespect and defiance,
was for honest and well intentioned reasons. Protecting LREI and Sumulong from liability under the Bouncing
Checks Law was foremost in her mind. It was not wrongful or willful. Neither can it be considered an obstinate
defiance of company authority.
336. ePacific Global Contact Center v. Cabansay GR No. 167345 November 23, 2007
Refusal to comply with lawful order
Willful disobedience or insubordination necessitates the concurrence of at least two requisites: (1) the employee's
assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the
order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties
which he had been engaged to discharge. A breach is willful if it is done intentionally, knowingly and purposely,
without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently.
It must rest on substantial grounds and not on the employer's arbitrariness, whims, caprices or suspicion;
otherwise, the employee would eternally remain at the mercy of the employer.
101
It is of no moment that the presentation did not push through, and that no actual damage was done by respondent
to the company. The mere fact that respondent refused to obey the reasonable and lawful order to defer the
presentation and implementation of the module already gave a just cause for petitioners to dismiss her. Verily,
had it not been for the timely intervention of the Telesales Senior Manager, under the instructions of the SVP,
harm could have been done to company resources.
3. Gross and habitual neglect

337. St. Luke’s Medical Center v. Notario GR No. 152166 October 20, 2010
Negligence must not only be gross but habitual, single act does not suffice
Under Article 282 (b) of the Labor Code,an employer may terminate an employee for gross and habitual neglect of
duties. Neglect of duty, to be a ground for dismissal, must be both gross and habitual. Gross negligence connotes
want of care in the performance of one's duties. Habitual neglect implies repeated failure to perform one's duties
for a period of time, depending upon the circumstances. A single or isolated act of negligence does not constitute
a just cause for the dismissal of the employee. Under the prevailing circumstances, respondent exercised his best
judgment in monitoring the CCTV cameras so as to ensure the security within the hospital premises. Verily,
assuming arguendo that respondent was negligent, although this Court finds otherwise, the lapse or inaction
could only be regarded as a single or isolated act of negligence that cannot be categorized as habitual and,
hence, not a just cause for his dismissal.
338. LBC Express v. Mateo GR No. 168215 June 9, 2009

SIngle act of negligence leading to loss of substantial amount - justified dismissal
The services of a regular employee may be terminated only for just or authorized causes, including gross and
habitual negligence under Article 282, paragraph (b) of the Labor Code. Gross negligence is characterized by
want of even slight care, acting or omitting to act in a situation where there is a duty to act, not inadvertently but
willfully and intentionally with a conscious indifference to consequences insofar as other persons may be affected.
339. Mansion Printing Center v. Bitara GR No. 168120 January 15, 2012
Habitual tardiness and absenteeism as grounds for dismissal, totality of infractions
The Notice to Explain clearly stated:
“We are seriously considering your termination from service, and for this reason you are directed to submit a written
explanation, within seventy-two hours from your receipt of this notice, why you should not be terminated from service
for f ailure to report for work without verbal or written notice or permission on March 11, 13, 14, 15 and 16, 2000. . . .”
To give full meaning and substance to the Notice to Explain, however, the paragraph should be read together with
its preceding paragraph, to wit:
We have time and again, verbally and formally, called your attention to your negligence from your tardiness and your
frequent absences without any notice but still, you remain to ignore our reminder.
As found by the NLRC: the imputed absence and tardiness of the complainant are documented. He faltered on his
attendance 38 times of the 66 working days. His last absences on 11, 13, 14, 15 and 16 March 2000 were
undertaken without even notice/permission from management. These attendance delinquencies may be
characterized as habitual and are sufficient justifications to terminate the complainant's employment.
340. Cavite Apparel v. Marquez GR No. 172044 February 6, 2013

Neglect of duty, to be a ground for dismissal under Article 282 of the Labor Code, must be both gross and
habitual. Gross negligence implies want of care in the performance of one's duties. Habitual neglect imparts
repeated failure to perform one's duties for a period of time, depending on the circumstances. 23 Under these
standards and the circumstances obtaining in the case, we agree with the CA that Michelle is not guilty of gross
and habitual neglect of duties.
102
Based on what we see in the records, there simply cannot be a case of gross and habitual neglect of duty against
Michelle. Even assuming that she failed to present a medical certificate for her sick leave on May 8, 2000, the
records are bereft of any indication that apart from the four occasions when she did not report for work, Michelle
had been cited for any infraction since she started her employment with the company in 1994. Four absences in
her six years of service, to our mind, cannot be considered gross and habitual neglect of duty, especially so since
the absences were spread out over a six-month period.
341. Manarpiis v. Texan Philippines GR No. 197011 January 28, 2015

We have laid down the two elements which must concur for a valid abandonment, viz.: (1) the failure to report to
work or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-employee
relationship, with the second element as the more determinative factor being manifested by some overt acts.
Abandonment as a just ground for dismissal requires the deliberate, unjustified refusal of the employee to perform
his employment responsibilities. Mere absence or failure to work, even after notice to return, is not tantamount to
abandonment.
Furthermore, it is well-settled that the filing by an employee of a complaint for illegal dismissal with a prayer for
reinstatement is proof enough of his desire to return to work, thus, negating the employer's charge of
abandonment. An employee who takes steps to protest his dismissal cannot logically be said to have abandoned
his work.
4. Fraud

342. PAL v. NLRC GR No. 126805 March 16, 2000
Fraud need not lead to actual loss to justify dismissal
In the case at bar, there is substantial evidence showing that private respondent had direct involvement in the
illegal pooling of baggage. Obviously, private respondent's act is inexcusable as it constitutes a serious offense
under petitioner's Code of Discipline. The fact that petitioner failed to show it suffered losses in revenue as a
consequence of private respondent's questioned act is immaterial. It must be stressed that actual defraudation is
not necessary in order that an employee may be held liable under the aforequoted rule. That private respondent
attempted to deprive petitioner of its lawful revenue is already tantamount to fraud against the company, which
warrants dismissal from the service.
5. Loss of confidence/Breach of trust

343. Sta. Ana v. Manila Jockey Club GR No. 208459 February 15, 2017
In this regard, to legally dismiss an employee on the ground of loss of trust, the employer must establish that a)
the employee occupied a position of trust and confidence, or has been routinely charged with the care and
custody of the employer's money or property; b) the employee committed a willful breach of trust based on clearly
established facts; and, c) such loss of trust relates to the employee's performance of duties. In fine, there must be
actual breach of duty on the part of the employee to justify his or her dismissal on the ground of loss of trust and
confidence.
It is a cardinal rule that loss of trust and confidence should be genuine, and not simulated; it must arise from
dishonest or deceitful conduct, and must not be arbitrarily asserted in the face of overwhelming contrary evidence.
While proof beyond reasonable doubt is not required, loss of trust must have some basis or such reasonable
ground for one to believe that the employee committed the infraction, and the latter's participation makes him or
her totally unworthy of the trust demanded by the position. Here, MJCI failed to prove that Sta. Ana committed
willful breach of its trust. Particularly, it failed to establish that Sta. Ana used its employee for her personal
business during office hours, and used its money, without authority, to lend money to another. Hence, to dismiss
her on the ground of loss of trust and confidence is unwarranted.
344. Hormillosa v. Coca-Cola Bottlers Philippines GR No. 198699 October 9, 2013

Non-managerial employees
103
There are two (2) classes of positions of trust. The first class consists of managerial employees. They are defined
as those vested with the powers or prerogatives to lay down management policies and to hire, transfer suspend,
lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions. The
second class consists of cashiers, auditors, property custodians, etc. They are defined as those who in the normal
and routine exercise of their functions, regularly handle significant amounts of money or property.
Hormillosa, being a route salesman, falls under the second class. By selling soft drink products and collecting
payments for the same, he was considered an employee who regularly handled significant amounts of money and
property in the normal and routine exercise of his functions. Clearly, Hormillosa occupies a position of trust. As
correctly pointed out by the CA, there was a high degree of trust and confidence reposed on him and when this
confidence was breached, the employer was justified in taking the appropriate disciplinary action.
345. Manese v. Jollibee Foods Corporation GR No. 170454 October 11, 2012
The mere existence of a basis for the loss of trust and confidence justifies the dismissal of the managerial
employee because when an employee accepts a promotion to a managerial position or to an office requiring full
trust and confidence, such employee gives up some of the rigid guaranties available to ordinary workers.
Infractions, which if committed by others would be overlooked or condoned or penalties mitigated, may be visited
with more severe disciplinary action.
However, the right of the management to dismiss must be balanced against the managerial employee's right to
security of tenure which is not one of the guaranties he gives up. This Court has consistently ruled that
managerial employees enjoy security of tenure and, although the standards for their dismissal are less stringent,
the loss of trust and confidence must be substantial and founded on clearly established facts sufficient to warrant
the managerial employee's separation from the company. Substantial evidence is of critical importance and the
burden rests on the employer to prove it.
6. Commission of a crime
346. Reno Foods v. Nagkakaisang Lakas ng Manggagawa GR No. 164016

A criminal conviction is not necessary to find just cause for employment termination. Otherwise stated, an
employee's acquittal in a criminal case, especially one that is grounded on the existence of reasonable doubt, will
not preclude a determination in a labor case that he is guilty of acts inimical to the employer's interests. Criminal
cases require proof beyond reasonable doubt while labor disputes require only substantial evidence, which means
such relevant evidence as a reasonable mind might accept as adequate to justify a conclusion. The evidence in
this case was reviewed by the appellate court and two labor tribunals endowed with expertise on the matter — the
Labor Arbiter and the NLRC.
347. Lynvil Fishing Enterprises v. Ariola GR No. 181974 February 1, 2012

an employee's acquittal in a criminal case, especially one that is grounded on the existence of reasonable doubt,
will not preclude a determination in a labor case that he is guilty of acts inimical to the employer's interests. 33 In
the reverse, the finding of probable cause is not followed by automatic adoption of such finding by the labor
tribunals. In other words, whichever way the public prosecutor disposes of a complaint, the finding does not bind
the labor tribunal.
Thus, Lynvil cannot argue that since the Office of the Prosecutor found probable cause for theft the Labor Arbiter
must follow the finding as a valid reason for the termination of respondents' employment. The proof required for
purposes that differ from one and the other are likewise different.
7. Other analogous causes
348. John Hancock Life Insurance v. Davis GR No. 169549 September 3, 2008
The theft was not committed against petitioner itself but against one of its employees, respondent's misconduct
was not work-related and therefore, she could not be dismissed for serious misconduct.
104
Nonetheless, Article 282 (e) of the Labor Code talks of other analogous causes or those which are susceptible of
comparison to another in general or in specific detail. For an employee to be validly dismissed for a cause
analogous to those enumerated in Article 282, the cause must involve a voluntary and/or willful act or omission of
the employee. A cause analogous to serious misconduct is a voluntary and/or willful act or omission attesting to
an employee's moral depravity. Theft committed by an employee against a person other than his employer, if
proven by substantial evidence, is a cause analogous to serious misconduct.
E. Authorized Causes for Termination of Employment

1. Redundancy

349. Arabit v. Jardine Pacific GR No. 181719 April 21, 2014
Distinction between redundancy and retrenchment
Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the
actual requirements of the enterprise. A position is redundant where it is superfluous, and superfluity of a position
or positions may be the outcome of a number of factors, such as overhiring of workers, decreased volume of
business, or dropping of a particular product line or service activity previously manufactured or undertaken by the
enterprise.
Retrenchment, on the other hand, is used interchangeably with the term "lay-off." It is the termination of
employment initiated by the employer through no fault of the employee's and without prejudice to the latter,
resorted to by management during periods of business recession, industrial depression, or seasonal fluctuations,
or during lulls occasioned by lack of orders, shortage of materials, conversion of the plant for a new production
program or the introduction of new methods or more efficient machinery, or of automation. Simply put, it is an act
of the employer of dismissing employees because of losses in the operation of a business, lack of work, and
considerable reduction on the volume of his business, a right consistently recognized and affirmed by this Court.
The replacement effectively belies Jardine's claim that the petitioners' positions were abolished due to superfluity.
Redundancy could have been justified if the functions of the petitioners were transferred to other existing
employees of the company. To dismiss the petitioners and hire new contractual employees as replacements
necessarily give rise to the sound conclusion that the petitioners' services have not really become in excess of
what Jardine's business requires. To replace the petitioners who were all regular employees with contractual ones
would amount to a violation of their right to security of tenure.
350. Shimizu Philippines v. Callanta GR No. 165923 September 29, 2010

As an authorized cause for separation from service under Article 283 of the Labor Code,24 retrenchment is a valid
exercise of management prerogative subject to the strict requirements set by jurisprudence: TcDHSI
(1) That the retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred,
are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as
perceived objectively and in good faith by the employer;
(2) That the employer served written notice both to the employees and to the Department of Labor and Employment
at least one month prior to the intended date of retrenchment;
(3) That the employer pays the retrenched employees separation pay equivalent to one month pay or at least 1/2
month pay for every year of service, whichever is higher;
(4) That the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest
and not to defeat or circumvent the employees' right to security of tenure; and
(5) That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be
retained among the employees, such as status, . . . efficiency, seniority, physical fitness, age, and financial hardship
for certain workers.
The purpose of the one month prior notice rule is to give DOLE an opportunity to ascertain the veracity of the
cause of termination. Non-compliance with this rule clearly violates the employee's right to statutory due process.
105
to be consistent with our ruling in Jaka Food Processing Corporation v. Pacot, the indemnity in the form of
nominal damages should be fixed in the amount of P50,000.00.
2. Retrenchment

351. Asian Alcohol Corporation v. NLRC GR No. 131108 March 25, 1999
The right of management to dismiss workers during periods of business recession and to install labor saving
devices to prevent losses is governed by Art. 283 of the Labor Code, as amended. Under this provision,
retrenchment and redundancy are just causes for the employer to terminate the services of workers to preserve
the viability of the business. In exercising its right, however, management must faithfully comply with the
substantive and procedural requirements laid down by law and jurisprudence. The requirements for valid
retrenchment which must be proved by clear and convincing evidence are:
(1) that the retrenchment is reasonably necessary and likely to prevent business losses which, if already
incurred, are not merely de minimis,but substantial, serious, actual and real, or if only expected, are
reasonably imminent as perceived objectively and in good faith by the employer;
(2) that the employer served written notice both to the employees and to the Department of Labor and
Employment at least one month prior to the intended date of retrenchment;
(3) that the employer pays the retrenched employees separation pay equivalent to one month pay or at
least 1/2 month pay for every year of service, whichever is higher;
(4) that the employer exercises its prerogative to retrench employees in good faith for the advancement of
its interest and not to defeat or circumvent the employees' right to security of tenure; and
(5) that the employer used fair and reasonable criteria in ascertaining who would be dismissed and who
would be retained among the employees, such as status (i.e.,whether they are temporary, casual, regular
or managerial employees),efficiency, seniority, physical fitness, age, and financial hardship for certain
workers.
Employer must show that the business losses cannot be abated in the near future. The condition of business
losses is normally shown by audited financial documents like yearly balance sheets and profit and loss statements
as well as annual income tax returns. It is our ruling that financial statements must be prepared and signed by
independent auditors. Unless duly audited, they can be assailed as self-serving documents. It should be observed
that Article 283 of the Labor Code uses the phrase "retrenchment to prevent losses." In its ordinary connotation,
this phrase means that retrenchment must be undertaken by the employer before losses are actually sustained.
352. FASAP v. PAL GR No. 178083 March 13, 2018

The law speaks of serious business losses or financial reverses. The fact that an employer may have sustained a
net loss, such loss, per se, absent any other evidence on its impact on the business, nor on expected losses that
would have been incurred had operations been continued, may not amount to serious business losses mentioned
in the law. The employer must show that its losses increased through a period of time and that the condition of the
company will not likely improve in the near future, or that it expected no abatement of its losses in the coming
years.
The employer must also exhaust all other means to avoid further losses without retrenching its employees.
Retrenchment is a means of last resort; it is justified only when all other less drastic means have been tried and
found insufficient. Even assuming that the employer has actually incurred losses by reason of the Asian economic
crisis, the retrenchment is not completely justified if there is no showing that the retrenchment was the last
recourse resorted to.
In the instant case, PAL failed to substantiate its claim of actual and imminent substantial losses which would
justify the retrenchment of more than 1,400 of its cabin crew personnel. Although the Philippine economy was
gravely affected by the Asian financial crisis, however, it cannot be assumed that it has likewise brought PAL to
the brink of bankruptcy. Likewise, the fact that PAL underwent corporate rehabilitation does not automatically
justify the retrenchment of its cabin crew personnel.
106
353. Sebuguero v. NLRC GR No. 115394 September 27, 1995
Temporary Lay-off and Art. 301 by analogous application
Under Article 283 of the Labor Code,there are three basic requisites for a valid retrenchment: (1) the retrenchment
is necessary to prevent losses and such losses are proven; (2) written notice to the employees and to the
Department of Labor and Employment at least one month prior to the intended date of retrenchment; and (3)
payment of separation pay equivalent to one month pay or at least 1/2 month pay for every year of service,
whichever is higher.
The requirement of notice to both the employees concerned and the Department of Labor and Employment
(DOLE) is mandatory and must be written and given at least one month before the intended date of retrenchment.
In this case, it is undisputed that the petitioners were given notice of the temporary lay-off. There is, however, no
evidence that any written notice to permanently retrench them was given at least one month prior to the date of
the intended retrenchment. That they were already on temporary lay-off at the time notice should have been given
to them is not an excuse to forego the one-month written notice because by this time, their lay-off is to become
permanent and they were definitely losing their employment.
3. Closure of Business

354. Sangwoo Philippines v. Sangwoo Philippines Employees Union GR No. 173154
Article 297 of the Labor Code provides that before any employee is terminated due to closure of business, it must
give a one (1) month prior written notice to the employee and to the DOLE. In this relation, case law instructs that
it is the personal right of the employee to be personally informed of his proposed dismissal as well as the reasons
therefor; and such requirement of notice is not a mere technicality or formality which the employer may dispense
with.
To this end, jurisprudence states that an employer's act of posting notices to this effect in conspicuous areas in
the workplace is not enough. Verily, for something as significant as the involuntary loss of one's employment,
nothing less than an individually-addressed notice of dismissal supplied to each worker is proper.
356. Navotas Shipyard v. Montallana GR No. 190053 March 24, 2014

The petitioners undertook a temporary shutdown. In fact, the company notified the DOLE of the shutdown and
filed an Establishment Termination Report containing the names of the affected employees. The petitioners
expected the company to recover before the end of the six-month shutdown period, but unfortunately, no recovery
took place. Thus, the shutdown became permanent. According to the petitioners, they gave the company's
employees their separation pay. Under the circumstances, we cannot say that the company's employees were
illegally dismissed; rather, they lost their employment because the company ceased operations after failing to
recover from their financial reverses.
The failure to notify the respondents in writing of the closure of the company will not invalidate the termination of
their employment, but the company has to pay them nominal damages for the violation of their right to procedural
due process. This amount is addressed to the sound discretion of the court, taking into account the relevant
circumstances, as the Court explained in Agabon v. NLRC.
4. Disease

356. Deoferio v. Intel Technology Philippines GR No. 202996 June 18, 2014
The present case involves termination due to disease — an authorized cause for dismissal under Article 284 of
the Labor Code. As substantive requirements, the Labor Code and its IRR require the presence of the following
elements:
(1) An employer has been found to be suffering from any disease.
(2) His continued employment is prohibited by law or prejudicial to his health, as well as to the health of
his co-employees.
107
(3) A competent public health authority certifies that the disease is of such nature or at such a stage that it
cannot be cured within a period of six months even with proper medical treatment.
With respect to the first and second elements, the Court liberally construed the phrase "prejudicial to his health as
well as to the health of his co-employees" to mean "prejudicial to his health or to the health of his co-employees".
We did not limit the scope of this phrase to contagious diseases for the reason that this phrase is preceded by the
phrase "any disease" under Article 284 of the Labor Code. Consistent with this construction, we applied this
provision in resolving illegal dismissal cases due to non-contagious diseases such as stroke, heart attack,
osteoarthritis, and eye cataract, among others.
The third element substantiates the contention that the employee has indeed been suffering from a disease that:
(1) is prejudicial to his health as well as to the health of his co-employees; and (2) cannot be cured within a period
of six months even with proper medical treatment. Without the medical certificate, there can be no authorized
cause for the employee's dismissal. The absence of this element thus renders the dismissal void and illegal.
Simply stated, this requirement is not merely a procedural requirement, but a substantive one. The certification
from a competent public health authority is precisely the substantial evidence required by law to prove the
existence of the disease itself, its non-curability within a period of six months even with proper medical treatment,
and the prejudice that it would cause to the health of the sick employee and to those of his co-employees.
F. Reliefs for illegal dismissal

1. Backwages
357. United Coconut Chemicals v. Almores GR No. 201018 July 12, 2017
The base figure in the determination of full backwages is fixed at the salary rate received by the employee at the
time he was illegally dismissed. The award shall include the benefits and allowances regularly received by the
employee as of the time of the illegal dismissal, as well as those granted under the Collective Bargaining
Agreement (CBA), if any. The purpose for this is to compensate the worker for what he has lost because of his
dismissal, and to set the price or penalty on the employer for illegally dismissing his employee.
Re: employer liability in illegal dismissal done in relation to union security clause
Verily, the petitioner, as the employer effecting the unlawful dismissal, was solely liable for the backwages of the
respondent, its employee. The Court held that notwithstanding the fact that the dismissal was at the instance of
the federation and that the federation undertook to hold the company free from any liability resulting from the
dismissal of several employees, the company may still be held liable if it was remiss in its duty to accord the
would-be dismissed employees their right to be heard on the matter. In General Milling Corporation v. Casio, law
and jurisprudence imposes upon GMC the obligation to accord Casio, et al. substantive and procedural due
process before complying with the demand of IBP-Local 31 to dismiss the expelled union members from service.
The failure of GMC to carry out this obligation makes it liable for illegal dismissal of Casio, et al.
358. Session Delights v. CA GR No. 172149 February 8, 2010

A distinct feature of the judgment under execution is that the February 8, 2001 labor arbiter decision already
provided for the computation of the payable separation pay and backwages due, and did not literally order the
computation of the monetary awards up to the time of the finality of the judgment. The private respondent, too, did
not contest the decision through an appeal. The petitioner's argument to confine the awards to what the labor
arbiter stated in the dispositive part of his decision is largely based on these established features of the judgment.
We reject the petitioner's view as a narrow and misplaced interpretation of an illegal dismissal decision,
particularly of the terms of the labor arbiter's decision. On its face, the computation the labor arbiter made shows
that it was time-bound as can be seen from the figures used in the computation. This part of the decision on
computation of awards made arising from the first part declaring the dismissal illegal, being merely a computation
of what the first part of the decision established and declared, can, by its nature, be re-computed.
108
Had the case involved a pure money claim for a specific sum (e.g., salary for a specific period) or a specific
benefit (e.g., 13th month pay for a specific year) made by a former employee, the labor arbiter's computation
would admittedly have continuing currency because the sum is specific and any variation may only be on the
interests that may run from the finality of the decision ordering the payment of the specific sum.
In contrast with a ruling on a specific pure money claim, is a claim that relates to status (as in this case, where the
claim is the legality of the termination of the employment relationship). In this type of cases, the decision or ruling
is essentially declaratory of the status and of the rights, obligations and monetary consequences that flow from
the declared status (in this case, the payment of separation pay and backwages and attorney's fees when illegal
dismissal is found). When this type of decision is executed, what is primarily implemented is the declaratory
finding on the status and the rights and obligations of the parties therein; the arising monetary consequences from
the declaration only follow as component of the parties' rights and obligations.
359. Bani Rural Bank v. De Guzman GR No. 170904 November 13, 2013
As a rule, "a final judgment may no longer be altered, amended or modified, even if the alteration, amendment or
modification is meant to correct what is perceived to be an erroneous conclusion of fact or law and regardless of
what court, be it the highest Court of the land, rendered it. An exception to this rule is the existence of
supervening events which refer to facts transpiring after judgment has become final and executory or to new
circumstances that developed after the judgment acquired finality, including matters that the parties were not
aware of prior to or during the trial as they were not yet in existence at that time.
Under the circumstances of this case, the existence of the strained relations between the petitioners and the
respondents was a supervening event that justified the NLRC's modification of its final March 17, 1995 resolution.
The NLRC concluded that the award of reinstatement was no longer possible; thus, it awarded separation pay, in
lieu of reinstatement. Unless exceptional reasons are presented, these above findings and conclusion can no
longer be disturbed after they lapsed to finality.
360. Nacar v. Gallery Frames GR No. 189871 August 13, 2013

Rules on interest
in the absence of an express stipulation as to the rate of interest that would govern the parties, the rate of legal
interest for loans or forbearance of any money, goods or credits and the rate allowed in judgments shall no longer
be twelve percent (12%) per annum — as reflected in the case of Eastern Shipping Lines 40 and Subsection
X305.1 of the Manual of Regulations for Banks and Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual of
Regulations for Non-Bank Financial Institutions, before its amendment by BSP-MB Circular No. 799 — but will
now be six percent (6%) per annum effective July 1, 2013. It should be noted, nonetheless, that the new rate
could only be applied prospectively and not retroactively. Consequently, the twelve percent (12%) per annum
legal interest shall apply only until June 30, 2013. Come July 1, 2013 the new rate of six percent (6%) per annum
shall be the prevailing rate of interest when applicable.
361. Lara’s Gift & Decors v. Midtown Industrial Sales GR No. 225433 August 28, 2019
Clearly, under the law and jurisprudence, the prevailing legal interest prescribed by the Bangko Sentral ng
Pilipinas applies, in the absence of stipulated interest, on the following: (1) loans; (2) forbearance of any money,
goods or credits; and (3) judgments in litigations involving loans or forbearance of money, goods or credits.
If the rate of interest is stipulated, such stipulated interest shall apply and not the legal interest, provided the
stipulated interest is not excessive and unconscionable. The stipulated interest shall be applied until full payment
of the obligation because that is the law between the parties. The legal interest only applies in the absence of
stipulated interest. Moreover, there should be no compounding of interest, whether stipulated or legal, unless
compounding is expressly agreed upon in writing by the parties or mandated by law or regulation.
2. Reinstatement

362. Olympia Housing v. Lapastora GR No. 187691 January 13, 2016
109
While the finding of illegal dismissal in favor of Lapastora subsists, his reinstatement was rendered a legal
impossibility with OHI's closure of business. In Galindez v. Rural Bank of Llanera, Inc., the Court noted:
Reinstatement presupposes that the previous position from which one had been removed still exists or there is an
unfilled position more or less of similar nature as the one previously occupied by the employee. Admittedly, no
such position is available. Reinstatement therefore becomes a legal impossibility. The law cannot exact
compliance with what is impossible.
Considering the impossibility of Lapastora's reinstatement, the payment of separation pay, in lieu thereof, is
proper. The amount of separation pay to be given to Lapastora must be computed from March 1995, the time he
commenced employment with OHI, until the time when the company ceased operations in October 2000. 42 As a
twin relief, Lapastora is likewise entitled to the payment of backwages, computed from the time he was unjustly
dismissed, or from February 24, 2000 until October 1, 2000 when his reinstatement was rendered impossible
without fault on his part.
3. Separation pay in lieu of reinstatement

363. Claudia’s Kitchen v. Tanguin GR No. 221096 June 28, 2017
Separation pay is warranted when the cause for termination is not attributable to the employee's fault, such as
those provided in Articles 298 and 299 of the Labor Code, as well as in cases of illegal dismissal where
reinstatement is no longer feasible. On the other hand, an employee dismissed for any of the just causes
enumerated under Article 297 of the same Code, being causes attributable to the employee's fault, is not, as a
general rule, entitled to separation pay. The non-grant of such right to separation pay is premised on the reason
that an erring employee should not benefit from their wrongful acts.
In sum, separation pay is only awarded to a dismissed employee in the following instances:
1) in case of closure of establishment under Article 298 [formerly Article 283] of the Labor Code;
2) in case of termination due to disease or sickness under Article 299 [formerly Article 284] of the Labor Code;
3) as a measure of social justice in those instances where the employee is validly dismissed for causes other than
serious misconduct or those reflecting on his moral character;
4) where the dismissed employee's position is no longer available;
5) when the continued relationship between the employer and the employee is no longer viable due to the
strained relations between them;or
6) when the dismissed employee opted not to be reinstated, or the payment of separation benefits would be for
the best interest of the parties involved.
In all of these cases, the grant of separation pay presupposes that the employee to whom it was given was
dismissed from employment, whether legally or illegally. In fine, as a general rule, separation pay in lieu of
reinstatement could not be awarded to an employee whose employment was not terminated by his employer.
4. Attorney’s Fees

364. PCL Shipping v. NLRC GR No. 153031 December 14, 2006
In the present case, it is true that the Labor Arbiter and the NLRC failed to state the reasons why attorney's fees
are being awarded. However, it is clear that private respondent was illegally terminated from his employment and
that his wages and other benefits were withheld from him without any valid and legal basis. As a consequence, he
is compelled to file an action for the recovery of his lawful wages and other benefits and, in the process, incurred
expenses. On these bases, the Court finds that he is entitled to attorney's fees.
As the Court ruled in Reyes v. CA:

[T]here are two commonly accepted concepts of attorney's fees, the so-called ordinary and extraordinary. In its
ordinary concept, an attorney's fee is the reasonable compensation paid to a lawyer by his client for the legal
services he has rendered to the latter. The basis of this compensation is the fact of his employment by and his
110
agreement with the client. In its extraordinary concept, attorney's fees are deemed indemnity for damages ordered
by the court to be paid by the losing party in a litigation. The instances where these may be awarded are those
enumerated in Article 2208 of the Civil Code, specifically par. 7 thereof which pertains to actions for recovery of
wages, and is payable not to the lawyer but to the client, unless they have agreed that the award shall pertain to
the lawyer as additional compensation or as part thereof. The extraordinary concept of attorney's fees is the one
contemplated in Article 111 of the Labor Code, which provides:
Art. 111. Attorney's fees. — (a) In cases of unlawful withholding of wages, the culpable party may be
assessed attorney's fees equivalent to ten percent of the amount of wages recovered . . .
The afore-quoted Article 111 is an exception to the declared policy of strict construction in the awarding of
attorney's fees. Although an express finding of facts and law is still necessary to prove the merit of the award,
there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages.
There need only be a showing that the lawful wages were not paid accordingly, as in this case.

G. Retirement

365. Padillo v. Rural Bank of Nabunturan GR No. 199338 January 21, 2013
In the absence of any applicable agreement, an employee must (1) retire when he is at least sixty (60) years of
age and (2) serve at least (5) years in the company to entitle him/her to a retirement benefit of at least one-half
(1/2) month salary for every year of service, with a fraction of at least six (6) months being considered as one
whole year. Notably, these age and tenure requirements are cumulative and non-compliance with one negates
the employee's entitlement to the retirement benefits under Article 300 of the Labor Code altogether.
In this case, it is undisputed that there exists no retirement plan, collective bargaining agreement or any other
equivalent contract between the parties which set out the terms and condition for the retirement of employees,
with the sole exception of the Philam Life Plan which premiums had already been paid by the Bank. Neither was it
proven that there exists an established company policy of giving early retirement packages to the Bank's aging
employees. Unfortunately, while Padillo was able to comply with the five (5) year tenure requirement — as he
served for twenty-nine (29) years — he, however, fell short with respect to the sixty (60) year age requirement
given that he was only fifty-five (55) years old when he retired. Therefore, without prejudice to the proceeds due
under the Philam Life Plan, petitioners' claim for retirement benefits must be denied.
366. De La Salle Araneta University v. Bernardo GR No. 190809 February 13, 2017
As a part-time employee with fixed-term employment, Bernardo is entitled to retirement benefits.
Republic Act No. 7641 states that "any employee may be retired upon reaching the retirement age x x x;" and "[i]n
case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned
under existing laws and any collective bargaining agreement and other agreements." The Implementing Rules
provide that Republic Act No. 7641 applies to "all employees in the private sector, regardless of their position,
designation or status and irrespective of the method by which their wages are paid, except to those specifically
exempted x x x." And Secretary Quisumbing's Labor Advisory further clarifies that the employees covered by
Republic Act No. 7641 shall "include part-time employees, employees of service and other job contractors and
domestic helpers or persons in the personal service of another." The only exemptions specifically identified by
Republic Act No. 7641 and its Implementing Rules are: (1) employees of the National Government and its political
subdivisions, including government-owned and/or controlled corporations, if they are covered by the Civil Service
Law and its regulations; and (2) employees of retail, service and agricultural establishments or operations
regularly employing not more than 10 employees.
Re: cause of action when working beyond the compulsory retirement age
Even granting arguendo that Bernardo's cause of action already accrued when he reached 65 years old, we
cannot simply overlook the fact that DLS-AU had repeatedly extended Bernardo's employment even when he
already reached 65 years old. DLS-AU still knowingly offered Bernardo, and Bernardo willingly accepted,
111
contracts of employment to teach for semesters and summers in the succeeding 10 years. Since DLS-AU was still
continuously engaging his services even beyond his retirement age, Bernardo deemed himself still employed and
deferred his claim for retirement benefits, under the impression that he could avail himself of the same upon the
actual termination of his employment. DLS-AU, in this case, not only kept its silence that Bernardo had already
reached the compulsory retirement age of 65 years old, but even continuously offered him contracts of
employment for the next 10 years. It should not be allowed to escape its obligation to pay Bernardo's retirement
benefits by putting entirely the blame for the deferred claim on Bernardo's shoulders.
xXx END
Hope this case index helped! :)
ser ipasa nyo kami pls
112

Labor Law Case Index on Jurisdiction, Remedies and Employer-Employee Relationship

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Labor Law Case Index on Jurisdiction, Remedies and Employer-Employee Relationship

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I

I. JURISDICTION AND REMEDIES

3. Tenazas v. R. Villegas Taxi Transportation GR NO. 192998 April 2, 2014

4. Sagun v. ANZ Global GR NO. 220399 August 22, 2016

6. Paguio Transport, Corp. v. NLRC GR NO. 119500 August 28, 1998

7. Teng v. Pahagac GR NO. 169704 November 17, 2010

10. Tongko v. Manulife GR NO. 167622 November 7, 2009

NB: Motion for Reconsideration (June 29, 2010)

12. Encyclopaedia Brittanica v. NLRC GR NO. 87098 November 4, 1996

15. Corporal v. NLRC GR NO. 129315 October 2, 2000

16. Maraguinot v. NLRC GR NO. 120969 January 22, 1998

18. Jardin v. NLRC GR NO. 119268 February 23, 2000

19. Sonza v. ABSCBN GR NO. 138051 June 10, 2004

20. Begino v. ABSCBN GR NO. 199166 April 20, 2015

21. Orozco v. CA GR NO. 155207 August 13, 2008

22. TAPE, Inc. v. Servana GR NO. 167648 January 28, 2008

23. Francisco v. NLRC GR NO. 170087 August 31, 2006

24. WPP Marketing v. Galera GR NO. 169207 March 25, 2010

25. Matling Industrial v. Coros GR NO. 157802 October 13, 2010

26. Malcaba v. Prohealth Pharma Philippines GR NO. 209085 June 6, 2018

27. Republic v. Asiapro Cooperative GR NO. 172101 November 23, 2007

Re: existence of EE-ER relationship

B. Reasonable Causal Connection Rule

28. San Miguel Corporation v. Ectuban GR NO. 127639 December 3, 1999

29. Kawachi v. Del Quero GR NO. 163768 March 27, 2007

30. Eviota v. CA GR NO. 152121 July 29, 2003

31. Indophil Textile Mills v. Adviento GR NO. 171212 August 4, 2014

33. Citibank, N. A. v. CA GR NO. 108961 November 27, 1998

34. PAL v. NLRC GR NO. 120567 March 20, 1998

2. Original and exclusive jurisdiction

35. Pondoc v. NLRC GR NO. 116347 October 3, 1996

36. Villamaria v. CA and Bustamante GR NO. 165881 April 19, 2006

37. San Jose v. NLRC GR NO. 121227 August 17, 1998

38. Del Monte v. Saldivar GR NO. 158620 October 11, 2006

39. 7K Corporation v. Albarico GR NO. 182295 June 26, 2013

b. Unfair Labor Practice

42. Negros Metal v. Lamayo GR NO. 186557 August 25, 2010

43. Vivero v. CA GR NO. 138938 October 24, 2000

A quick perusal of the pertinent provision of the CBA show:

45. Austria v. NLRC GR NO. 124382 August 16, 1992

Re: jurisdiction over issues on corporate officer’s dismissal

48. Wesleyan University v. Maglaya GR NO. 212774 January 23, 2017

49. Cacho v. Balagtas GR NO. 202974 February 17, 2018

51. Lunzaga v. Albar Shipping GR NO. 200476 April 18, 2012

52. Santos v. Servier Philippines GR NO. 166377 November 28, 2008

53. World’s Best Gas v. Vital GR NO. 211588 September 9, 2015

54. Halaguena v. PAL GR NO. 172013 October 2, 2009

55. Pepsi Cola v. Gal-lang GR NO. 89621 September 24, 1991

56. Banez v. Valdevilla GR NO. 128024 May 9, 2000

57. Milan v. NLRC GR NO. 202961 February 4, 2015

58. Amecos Innovations v. Lopez GR NO. 178055 July 2, 2014

E. Legality of strikes and lockouts

62. Meteoro v. Creative Creatures GR NO. 171275 July 13, 2009

H. Enforcement or annulment of compromise agreement (Art. 233)

64. IPAMS v. De Vera GR NO. 205703 March 7, 2016

65. Ace Navigation v. Fernandez GR NO. 197309 October 10, 2012

66. Heirs Dulay v. Aboitiz

68. GSIS v. NLRC GR NO. 180045 November 17, 2010

L. Cases with foreign element

Art. 278. Miscellaneous Provisions — . . .

72. PNB v. Cabansag GR NO. 157010 June 21, 2005

73. Manila Hotel v. NLRC GR NO. 120077 October 13, 2000