LABOR STANDARDS
of collective bargaining and the
PRELIMINARY TITLE
Q: What is labor?
A: It is the exertion by human beings of
physical or mental efforts, or both.jowards the
production of goods and services? (MenCfoza,
2001)
Q: What is labor law?
A: The law governing the rights and duties of
the employer and employees with respect to:
1. The terms and conditions of
employment and
2. Labor disputes arising from collective
bargaining (CB) respecting such
terms and conditions.
Q: What is the purpose of labor legislation?
A: Labor legislation is an exercise of police
power. The purpose of labor legislation is to
regulate the relations between employers (Ers)
and employees (Ees) respecting the terms and
conditions of employment, either by providing
for certain standards or for a legal framework
within which better terms and conditions of
work could be negotiated through CB. It is
intended to correct the injustices inherent in
Er-Ee relationship. (2006 Bar Question)
Q: What are the classifications of labor
law?
A:
1. Labor standards - The minimum
terms and conditions of employment
prescribed by existing laws, rules and
regulations relating to wages, hours
of work, cost-of-living allowance and
other monetary and welfare benefits.
(Batong Buhay Gold Mines, Inc. v.
Dela Serna, G.R. No. 86963, August
6,1999)
e.g. ra" month pay
2. Labor relations - Defines and
regulates the status, rights and
duties, and the institutional
mechanisms, that govern
individual and collective interactions
of Ers, Ees, or their representatives. It
is concerned with the stabilization of
relations of Er and Ees and seek to
fOt8-?taU .~n0 ~~::\ ,~t :h8 (jiff~1renc:::s
between them by the encouragement
settlement of labor disputes through
conciliation, mediation and arbitration.
(Azucena, 2007)
e.g. Additional allowance pursuant to
CBA
3. Social legislation - It includes laws
that provide particular kinds of
protection or benefits to society or
segments thereof in furtherance' of
social justice. (Azucena, 2007)
e.g. GSIS Law, SSS Law, Philhealth
benefits
Q: Is there any distinction between labor
legislation and social legislation? Explain.
A: Labor legislation is sometimes
distinguished from social legislation by the
former referring to labor statutes, like Labor
Relations Law and Labor Standards, and the
latter to Social Security Laws. Labor legislation
focuses on the rights of the worker in the
workplace.
Social legislation is a broad term and may
include not only laws that give social security
protection, but also those that help the worker
secure housing and basic necessities. The
Comprehensive Agrarian Reform Law could
also be considered a social legislation. All
labor laws are social legislation, but not all
social legislation is labor law. (1994 Bar
Question)
ART. 3. QECLARATION OF POLICY
Q: What is the State policy on labor?
A:
1. Afford full protection to labor
2. Promote full employment
3. Ensure equal work opportunities
r€~ardless of sex, race, or creed
4. Assure the rights of workers to self
organization, security of tenure, just
and humane conditions of work,
participate in policy and decision-
making processes affecting their right
and benefits
5. Regulate the relations between
workers and employers
the
1.
1'ai::ifta/ de (j)erecno CiviC
 LI\BOR STANDARDS: GENERAL PROVISIONS

Q: What is the principle of non- employment and equality of

oppression?
A: The principle mandates capital and labor
not to act oppressively against each other or
impair the interest and convenience of the
public. The protection to iabor clause in the
Constitution is not designed to oppress or
destroy capital. (Capili v. NLRC, G.R. No.
117378, Mar. 26, 1997)
Q: What is the aim of labor laws?
A: The justification of labor laws is social
justice. Social justice is "neither communism,
nor despotism, nor atomism, nor anarchy," but
the humanization of laws and the equalization
of social and economic force by the State so
that justice in its rational and objectively
secular conception may at least be
approximated. Social justice means the
promotion of the welfare of all the people, the
adoption by the government of measures
calculated to insure economic stability of all
the competent elements of society, through the
maintenance of a proper economic and social
equilibrium in the interrelations of the members
of the community, constitutionally, through the
adoption of measures legally justifiable, or
extra-Sonstitutionally, through the exercise of
powers underlying the existence of all
governments on the time-honored principle of
salus populi est suprema lex.(Calalang
Williams, G.R. No. 47800, Dec. 2, 1940)
Q: What is "compassionate justice"?
A: It is disregarding rigid rules and giving due
weight to all equities of the case.
e.g: Employee validly dismissed may still be
given severance pay.
Q: What are the sources of labor laws?
A:
1. Labor Code and other related gf,ecial
legislation
2. Contract
3. Collective Bargaining Agreement
4. Past practices
5. Company policies
employment opportunities for all.
It shall guarantee the rights of all
workers to self-organization,
collective bargaining and
negotiations, and peaceful concerted
activities, including the right to strike
in accordance with law. They shall be
entitled to security of tenure, humane
conditions of work, and a living wage.
They shall also participate in policy
and decision-making processes
affecting their rights and benefits as
may be provided by law.
The State shall promote the principle
of shared responsibility between
workers and employers and the
preferential use of voluntary modes in
settling disputes, including
conciliation, and shall enforce their
mutual compliance therewith to foster
industrial peace. The State shall
regulate the relations between
workers and employers, recognizing
the right of labor to its just share in
the fruits of production and the right
of enterprises to reasonable returns
to investments, and to expansion and
growth.
2. Sec. 9, Art. II - The State shall
v. promote a just and dynamic social
order that will ensure the prosperity
and independence of the nation and
free the people from poverty through
policies that provide adequate social
services, promote full employment, a
rising standard of living, and an
improved quality of life for all.
3. Sec. 18, Art./ II - The State affirms
labor as a primary social economic
force. It shall protect the rights of
workers and prqmote their welfare.
4. Sec. 8, Art. III - The right of the
people, including those employed in
the public and private sectors, to form
unions, associations, or societies for
purposes not contrary to law shall not
be abridged.

Q: What are the constitutional mandates 5. Sec. 18 (2), Art. III - No involuntary
with regard labor laws? servitude in any form shall exist
except as a punishment for a crime
A: whereof the party shall have been
..L. Sec. 3, Art. XIII - The State shall duly convicted .
afford full protection to labor, local
and overseas, organized and 6. Sec. 12, Art. XII - The State shall
unorganized, and promote full establish and maintain an effective
food and drug regulatory system and

2
 UST GOLDEN NOTES 2010

undertake appropriate health, the free and legal exercise of their

manpower development, and industry or work, if the act shall not
research, responsive to the country's constitute a more serious offense in
health needs and problems. accordance with the provisions of the
RPC.
7. Sec. 14, Art. XIII - The State shall
protect working women by providing 3. Special Laws
safe and healthful working conditions, a. GSIS Law
taking into account their maternal b. 13th Month Pay Law
functions, and such facilities and c. Retirement Pay Law
opportunities that will Iflhanc~ their d. SSS Law
welfare and enable them to 'realize e. Paternity Leave Act
their full potential in the service of the f. Anti - Child Labor Act
nation. g. Anti - Sexual Harassment Act
h. Magna Carta for Public Health
Q: What are other related laws to labor? Workers
i. Solo Parents Welfare Act of 2000
A: j. National Health Insurance Act as
1. Civil Code amended by R.A. 9241
k. Migrant Workers and Overseas
a. Art. 1700 - The relations Filipinos Act of 1995 as amended
between capital and labor are not by RA 10022
merely contractual. They are so I. PERA Act of 2008
impressed with public interest m. Home Development Mutual Fund
that labor contracts must yield to Law of 2009
the common gooa.· Therefore, n. The Magna Carta of Women
such contracts are subject to the o. Comprehensive Agrarian Reform
special laws on labor unions, Law as amended by R.A. 9700
collective bargaining, strikes and
lockouts, closed shop, wages, Q: What are the basic rights of workers
working conditions, hours of guaranteed by the Constitution?
labor and similar subjects.
A:
b. Art. 1701 - Neither capital nor 1. Security of tenure
labor shall act oppressively 2. Receive a living wage
against the other, or impair the 3. Humane working conditions
interest or convenience of the 4. Share in the fruits of production
public. 5. Organize themselves
6. Conduct collective bargaining or
c. Art. 1702 - In case of doubt, all negotiation with management
labor legislation and all labor 7. Engage in peaceful concerted
contracts shall be construed in activities including strike
favor of the safety and decent 8. Participate in policy and decision
living for the laborer. making processes

d. Art. 1703 - No contract which Q: Who is an employer (Er)?

practically amounts to involuntary
servitude, under any guise
whatsoever, shall be valid.
2. Revised Penal Code
Art. 289 - Formation, maintenance
and prohibition of combination of
capital or labor through violence or
.threats. - Any person who, for the
purpose of organizing, maintaining or
preventing coalitions or capital or
labor, strike of laborers or lock-out of
employees, shall employ violence or
threats in such a degree as to compel
or force the laborers or employers in
A:
1. One who employs the services of
others
2. One for whom employees work and
who pays their wages and salaries
Q:Who isan employee (Ee)?
A:
1. A person working for salary or wages
2. Any person in the service of another
under a contract for hire, express or
implied, oral or written

W3
'''0
UNIVERSITY OF SANTO TOMAS
Pacu{taa de ([)erecno CiviC
 , LABOR STANDARDS~ GENERAL PROVISIONS
~~~-;-~;;~~,:;~:~~~~;;.~.;;~ ~~~.~;;.7.~:;;;;;;7~:"':;~;;~;:;;;;;;;,_:;;;;;';'-;-;;;;;~;;;;;~~~~:;;'~~~
•. ..~_~_.

Q: Describe employer fEr) - employee (Ee) relationship, while ordinary rules on

relationship? contract will apply to an independent
contractor and principal.
A:
1. Contractual in nature but impressed 2. Courts which have jurisdiction are
with public interest. - It arises from likewise different - Labor tribunals will
the agreement of the parties. have jurisdiction over Er-Ee disputes
However, since a labor contract is while regular courts will have
impressed so much with public jurisdiction to an independent
interest, it must conform to the contractor and principal.
common good. Hence, it is subject to
special laws on public unions,
collective bargaining and strikes, etc .: ART: 4. CONSTRUCTION IN FAVOR OF
Further, the parties are enjoined not . - _LABOR . . j
to act oppressively against each
other, or impair the interest or Q: How should doubts in the
convenience of the public. implementation and interpretation of the
Labor Code (LC) and its Implementing
2. In personam - It involves the Rules and Regulations (IRR)be resolved?
rendition of personal service by the
Ee (partakes of master-servant A: They should be resolved in favor of labor.
relationship) and the effects of the
relationship will only extend to the Q: What is the concept of liberal approach
parties. in interpreting the LC and its IRR?

Q: What is the importance of determining A: The workers' welfare should be the

employer (Er)-employee(Ee)relationship?
A:
GR: Labor standards and conditions
only if there is Er-Ee relationship.
XPN: Even if there is no Er-Ee relationship,
the LC may still be invoked:
1. Indirect Er's liability
2. Illegal recruitment
3. Misuse of POEA license
paramount consideration in interpreting the
LC and its IRR. This is rooted in the
constitutional mandate to afford full protection
apply to labor. (PLOT v. NLRC, G.R. No. 111933,
July 23, 1997). It underscores the policy of
social justice to accommodate the
interests of the working class on the humane
justification that those who have less in life
shaH have more in law. (PAL v. Santos, G.R.
No. 77875, Feb. 4, 1993). (2006 Bar
Question)

Note: The LC may apply even if the parties Q: Art. 4 of the LC provides that in case of
are not Ers and Ees of each other. doubt In the implementation and
Employment relationship is not a pre- interpretation of the provisions of the LC
condition to the applicability. of the LC but it and its IRR, the doubt shall be resolved in
depends on the kind of issue involved. favor of labor. Art. 1702 of the Civil Code
also provides that in case of doubt, all
Q: Who is an independent contractor? labor legislation and all labor contracts
shall be construed in favor of the safety
A: A person who accomplishes the desired and decent living of the laborer.
work as specified by the principal in
accordance with his own means and methods. Mica-MaraCompany assails the validity of
As long as the desired result is achieved, the these statutes on the ground that they
means and methods used are immaterial to violate its constitutional right to equal
the principal. protection of the laws. Is the contention of
Mica Mara Companytenable? Discuss fully.
Q: Why is it important to distinguish
whether the relationship is that of an Er A: No, the Constitution provides that the State
and Ee or that of a principal and shall afford full protection to labor.
independentcontractor? Furthermore, the State affirms labor as a
primary economic force. It shall protect the
rights of workers and promote their welfare.
1. Laws governing them are different. - (1998Bar Question)
Labor laws govern the rights and
liabilities of the parties in an Er-Ee
 UST GOLDEN NOTES 2010
Q: What are the reasons for affording
greater protection to employees?
A:
1. Greater supply than demand for
labor; and
2.. Need for employmentby labor comes
from vital. .and .desperate necessity.
(Sanchez v. Harry Lyons
Construction Inc., G.R. L-2779, Oct.
18, 1950)
Q: Are all labor disputes resolved in favor
of labor?
A: No. The law also recognizes that
managementhas rights which are also entitled
to respect and enforcement in the interest of
fair play. (St. Lukes Medical Center Ees Ass'n
v. NLRC, GR. No. 162053, Mar. 7, 2007)
Q: What is management prerogative?
A: It is the right of an Er to regulate, unless
otherwiselimited by special laws, accordingto
his own discretionand judgment, all aspectsof
employment, including hiring, work
assignments, working methods, time, place
and manner of work, tools to be used,
processes to be followed, supervision of
workers, working regulations, transfer of Ees,
work supervision, lay-off of workers and' the
discipline,dismissaland recall of workers.
Q: Is the exercise of management
prerogative unlimited?
A: No. A line must be drawn between
management prerogatives regarding business
operations per se and those which affect the
rightsof employees(Ees). In treatingthe latter,
managementshould see to it that its Ees are
at least properly informed of its decisions and
modes of actions. (PAL v. NLRC, GR. No.
8598~Aug. 13, 1993)
Q:1. An exclusive school for girls, run by a
religious order, has a policy of not
employing unwed mothers, women with
live-in partners, and lesbians. Is the policy
violative of any provision of the LC on
employment of women?
2. The same school dismissed 2 female
faculty members on account of pregnancy
out of wedlock. Did the school violate any
provision of the LC on employment of
women?
A:
1. No, the policy does not violate the
LC. The practice is a valid exerciseof
UNIVERS!TY
management function. Considering
the nature and reason for existence
of the school, it may adopt such
policy as will advance its laudable
objectives. In fact, the policy accords
with the· constitutional precept of
inculcating ethical and moral values
in schools. The- school policy does
not discriminate against women
solely on account of sex (Art. 135,
LC) nor are the acts prohibitedunder
Art. 137 of the LC.
2. No, because to tolerate pregnancy
out of wedlock will be a blatant
contradiction of the school's laudable
mission which, as already stated,
accords with high constitutional
precepts. This answer does not
contradict the ruling in Chua-Qua
where the teacher merely fell in love
with a bachelor student and the
teacher, also single, did not get
pregnant out of wedlock. (2000 Bar
Question)
Q: Little Hands Garment Company, an
unorganized manufacturer of children's
apparel with around 1,000 workers,
suffered losses for the 1st first time in
history when its US and European
customers shifted their huge orders to
China and Bangladesh. The management
informed its Ees that it could no longer
afford to provide transportation shuttle
services. Consequently, it announced that
a normal fare would be charged depending
on the distance traveled by the workers
availing of the service.
Was the Little Hands Garments Company
within its rights to withdraw this benefit
which it had unilaterally been providing to
its Ees?
A: Yes, because this is a management
prerogative which is not due any legal or
contractual obligation. - The facts of the case
do not state the circumstancesthrough which
the shuttle service may be considered as a
benefit that ripened into a demandable right.
There is no showing that the benefit has been
deliberately and consistently granted, i.e. with
the employer's full consciousnessthat despite
its not being bound by law or contractto grant
it, it just the same granted the benefit. (2005
Bar Question)
Q: Arnulfo, a supervisor of Quantum Foods
Inc., was transferred by the latter as Area
Sales Manager of Cebu to Area Sales
Manager of head office when the former
OF SANTO TOMAS ~ 5'
f£acu{taa ae (j)erecno CiviC' .
 LABOR STANDARDS: GENERAL PROVISIONS

denied liability of the company's decrease

in merchandise due to his mismanagement
of sales. Was the transfer of Arnulfo valid? Q: To whom shall all rights and benefits
under the LC apply?
A: Yes. In the pursuit of its legitimate business
interests, especially during adverse business A:
conditions, management has the prerogative GR: All rights and benefits granted to
to transfer or assign Ees from one office or workers under the LC shall apply alike to all
area of operation to another provided there is workers, whether agricultural or non-
no demotion in rank or diminution of salary, agricultural.
benefits and other privileges and the action is
not motivated by discrimination, bad faith, or XPN:
effected as a form of punishment or demotion 1. Government employees (Ees)
without sufficient cause. This privilege is 2. Ees of government corporations
inherent in the right of Ers to control and created by special or original charter
manage their enterprises effectively. The right 3. Foreign governments
of Ees to security of tenure does not give them 4. International agencies
vested rights to their positions to the extent of 5. Corporate officers/ intra-corporate
depriving management of its prerogative to disputes which fall under P.D. 902-A
change their assignments or to transfer them. and now fall under the jurisdiction of
(Endico v. Quantum Foods Distribution Center, the regular courts pursuant to the
G.R. No. 161615, Jan. 30, 2009, J. Carpio- SRC
Morales) 6. Local water district except where
NLRC's jurisdiction is invoked.
7. As may otherwise be provided by the
ART. 5. RULES AND REGULATIONS : LC

Q: Who is given the "rule-making power"? Q: What is the test in determining whether
a GOCC is subject to the Civil Service Law?
A: The Department of Labor and other gov't
agencies charged with the administration and A: It is determined by the manner of their
enforcement of the Labor Code or any of its creation. Gov't corporations that are created
parts shall promulgate the necessary by special (original) charter from Congress are
implementing rules and regulations. Such rules subject to Civil Service rules, while those
and regulations shall become effective 15 days incorporated under the General Corporation
after announcement of their adoption in Law are covered by the Le.
newspapers of general circulation.
Q: Who is an agricultural/farm worker?
Q: What are the limitations to the "rule-
making power" given to the Secretary of A:
Labor and Employment and other gov't 1. One employed in an agricultural or
agencies? farm enterprise,
2. Performs tasks which are directly
A: It must: related to agricultural activities of the
1. Be issued under the authority of the Er, and
law 3. Any activities performed by a farmer
2. Not be contrary to taw and the as an incident to farming operations.
Constitution (Azucena, 2007)

6 Iteam:__
 UST GOLDEN NOTES 2010
l:teX·'3·'¢'j
PRE- EMPLOYMENT
RECRUITMENT AND
PLACEMENT OF WORKERS
Art. 12. POLICY OF THE STATE
Q: What is the policy of the State as
regards labor?
A:
1. Promote and maintain a State of full
employment through improved
manpower training, allocation and
utilization
2. Protect every citizen desiring to work
locally or overseas by securing for
him the best possible terms and
conditions of employment
3. Facilitate a free choice of available
employment by persons seeking work
in conformity with the national interest
4. Facilitate and regulate the movement
of workers in conformity with the
national interest
5. Regulate the employment of aliens,
including the establishment of a
registration and/or work permit
system
6. Strengthen the network of public
employment offices and rationalize
the participation of the private sector
in the recruitment and placement of
workers, locally and overseas, to
serve national development
objectives
7. Ensure careful selection of Filipino
workers for overseas employment in
order to protect the good name of the
Philippines abroad
ART. 13. DEFINITIONS
Q: Who is a worker?
A: Any member of the labor force, whether
employed or unemployed. (Art. 13 [aJ, LC)
Q: What is recruitment and placement?
A:
1. Any act of canvassing, enlisting,
contracting, transporting, utilizing,
hiring or procuring workers; and
2. Includes referrals, contact services,
promising or advertising for
employment, locally or abroad,
whether for profit or not. (Art. 13
[b},LC)
UNIVERSITY
Q: What are the essential elements in
determining whether one is engaged in
recruitment/placement?
A: It must be shown that:
1. The accused gave the complainant
the distinct impression that she had
the power or ability to send the
complainant for work,
2. Such that the latter was convinced to
part with his money iii aider to be so
employed. (People v. Goee, G.R. No.
113161, Aug. 29, 1995)
Q: Who Is deemed engaged in recruitment
and placement?
A: Any person or entity which, in any manner,
offers or promises for a fee employment to 2 or
more persons. (Art. 13[b), Le)
Q: What if employment Is offered to only
one person?
A: Immaterial. The number of persons dealt
with is not an essential ingredient of the act of
recruitment and placement of workers. The
proviso merely lays down a rule of evidence
that where a fee is collected in consideration of
a promise or offer of employment to 2 or more
prospective workers, the individual or entity
dealing with them shall be deemed to be
engaged in the act of recruitment and
placement. The words "shall be deemed"
create that presumption. (People v. Pan is,
G.R. L-58674-77, July 11, 1986)
Q: What is a private employment agency?
A: Any person or entity engaged in the
recruitment and placement of workers for a fee
which is charged, directly or indirectly, from the
workers or employers or both.
Q: What is a license?
A: It is issued by DOLE authorizing a person
or entity to operate a private employment
agency.
Q: What is a private recruitment agency?
A: It is any person or association engaged in
the recruitment and placement of workers
without charging any fee, directly or indirectly,
from the workers or employers.
Q: Who is a seaman?
A: Any person employed in a vessel engaged
in maritime navigation.
OF SANTO TOMAS ~. 7
Pacu{tati tie <Dereclio CilliC' .
 LABOR STANDARDS: PRE-EMPLOYMENT

Q: What is overseas employment? Rule III, POEA Rules Governing Overseas

Employment as amended in 2002)
A: It is employment of a worker outside the
Philippines.
ART. 17. PHILIPPINE OVERSEAS
Q: Who is an overseas Filipino worker .. EMPLOYMENT ADMINISTRATION (POEA)
(OFW)?
Q: What are the principal functions of the
A: A person who is to be engaged, is engaged POEA?
or has been engaged in a remunerated activity
in a State of which he or she is not a citizen or A:
on board a vessel navigat!ng the foreign seas 1. Protection of the right of Filipino
other than a government ship used for military workers to .fair and equitable
or non-commercial purposes or on an emploYglent practices
installation located offshore or on the high 2. Regulation of private sector
. seas; to be used interchangeably with migrant participation in the recruitment and
worker. (Sec. 2, R.A. 10022 amending R.A. overseas placement of workers by
setting up a licensing and registration
8042)
system
Q: Who is an emigrant? 3. Deployment of Filipino workers
through gov't to gov't hiring
A: Any person, worker or otherwise, who 4. Formulation, implementation, and
emigrates to a foreign country by virtue of an monitoring of overseas employment
immigrant visa or resident permit or its of Filipino workers taking into
equivalent in the country of destination. consideration their welfare and
domestic manpower requirements
5. Shall inform migrant workers not only
; -ART. 16. PRIVATE RECRUITMENT of their rights as workers but also of
their rights as human beings, instruct
Q: What is the rule in recruitment and and guide the workers how to assert
their rights and provide the available
placement?
mechanism to redress violation of
their rights. (Sec. 14, R.A. 10022)
A: 6. Implementation, in partnership with
GR: No person or entity other than the
public employment offices, shall engage in other law-enforcement agencies, of
the recruitment and placement of workers an intensified program against illegal
recruitment activities. (Sec. 14, R.A.
10022)
XPN:
1. Construction contractors if authorized
by the DOLE and Construction Q: What is the rule on deployment of
Industry Authority OFWs?
2. Other persons or entities as may be
A: The State shall allow the deployment of
authorized by the SLE
3. Members of the diplomatic corps (but OFWs:
hiring must go through POEA)
4. Public employment offices
1. Only in countries where the rights of
Filipino migrant workers are
5. Private recruitment offices
6. Private employment agencies protected.
7. POEA
8. Shipping or manning agents or 2. To vessels navigating the foreign
seas or to installations located
representatives
offshore or on high seas whose
9. Name hires
owners/Ers are compliant with
international laws and standards that
Q: Who are name hires?
protect the rights of migrant workers.
A: They are individual workers who are able to
3. To companies and contractors with
secure contracts for overseas employment on
international operations: Provided,
their own efforts and representations without
That they are compliant with
the assistance or participation of any agency.
standards, conditions and
Their hiring, nonetheless, shall pass through
the POEA for processing purposes. (Part /II, requirements, as embodied in the
employment contracts prescribed by

8
 UST GOLDEN NOTES 2010

the POEA and in accordance with Workers Welfare Administration, in

internationally-accepted standards. coordination with appropriate
(Sec. 3, R.A. 10022 amending R.A. international agencies, shall take
8042) charge of the repatriation. (Sec. 15,
R.A. 8042)
Q: What are the guarantees of the receiving Q: What is the rule on mandatory
country for the protection of the rights of repatriation of underage migrant workers?
OFWs? A: Upon discovery or being informed of the
presence of migrant workers whose ages fall
A: below the minimum age requirement for
1. It has existing labor and social laws overseas deployment, the responsible officers
protecting the rights ~pf workers, in the foreign service shall without delay
including migrant workers;' repatriate said workers and advise the DFA
through the fastest means of communication
2. It is a signatory to and/or a ratifier of available of such discovery and other relevant
multilateral conventions, declarations information. The license of a
or resolutions relating to the recruitment/manning agency which recruited or
protection of workers, including deployed an underage migrant worker shall be
migrant workers; and automatically revoked and shall be imposed a
fine of not less than P500,000 but not more
3. It has concluded a bilateral than P1 ,000,000. (Sec. 9, R.A. 10022)
agreement or arrangement with the Q: What are the regulatory and
government on the protection of the adjudicatory functions of the POEA?
rights of OFWs .. (Sec. 3, R.A. 10022
amending R.A. 8042) A:
1. Regulatory - It regulates the private
Provided, that the receiving country is taking sector participation in the recruitment
positive, concrete measures to protect the and overseas placement of workers
rights of migrant workers in furtherance of any through its licensing and registration"
of the guarantees. system.

Note: In the absence of a clear showing that any 2. Adjudicatory

of the guarantees exists in the country of a. Administrative cases involving
destination of the migrant workers, no permit for violations of licensing rules and
deployment shall be issued by the POEA. regulations and registration of
recruitment and employment
Q: What is the rule on repatriation? agencies or entities
b. Disciplinary action cases and
A: other special cases which are
GR: The repatriation of the: administrative in character
1 . Worker and the transport of his involving employers, principals,
personal belongings - shall be the contracting partners and Filipino
primary responsibility of the agency migrants.
which recruited or deployed the
worker overseas. Q: What are the grounds for disciplinary
action?
2. Remains and transport of the
personal belongings of a deceased A: Under R.A. 8042, these are:
worker and all costs attendant thereto 1. Prostitution
shall be borne by the principal 2. Unjust refusal to depart for the
and/or the local agency. worksite
XPNs: 3. Gunrunning or possession of deadly
1. If the termination of employment is weapons
due solely to the fault of the worker, 4. Vandalism or destroying company
the principall Er or agency shall not property
be responsible for the repatriation of 5. Violation of the laws and sacred
the former andlor his belongings practices of the host country and
2. In cases of war, epidemic, disaster or unjustified breach of employment
calamities, natural or man-made, and contract
other similar event, and where the 6. Embezzlement of funds of the

~"'l
principal or recruitment agency company or fellow worker entrusted
cannot be identified, the Overseas for delivery to relatives, in the Phils.

UNIVERSITY OF SANTO TOMAS 9

Pacu[taa ae i1)ereclio CiviC
 LABOR STANDARDS: PRE-EMPLOYMENT

7. Creating trouble at the worksite or in present case involves the employment

contract entered into by petitioner for overseas
the vessel
employment, his claims are cognizable by the
8. Gambling
9. initiating or joining a strike or work labor arbiters of the NLRC. (Santiago v. CF
stoppage where the laws of the host Sharp Crew Management,G.R. No. 162419,
country prohibits strikes or similar July 10, 2007)
actions
10. Commission of felony punishable by Q: What matters fall outside the jurisdiction
Philippine laws or by the host country of the POEA?
11. Theft or robbery
12. Drunkenness A:
13. Drug addiction or possession or 1. Foreign judgments - such claim must
be brought before regular courts.
trafficking of prohibited drugs
POEA is not a court; it is an
14. Desertion or abandonment
administrative agency, exercismq
adjudicatory or quasi-judicial
Q: What is the distinction between the
jurisdiction ofthe LA and POEA? functions.
2. Torts - falls under the provisions of
the Civil Code.

, .' ART. 18. BAN ON DIRECT HIRING

jurisdiction over:
Original and 1. All cases which are Q: What is the ban on direct-hiring?
exclusive administrative in character
jurisdiction over all
claims arising out of
relating to licensing and A:
registration of recruitment GR: An Er may only hire Filipino worker for
Er-Ee relationship and employment agencies overseas employment through POEA or
or by virtue of any
entities authorized by DOLE.
law or contract 2. Disciplinary Action
involving OFWs cases and other special
including claims for: XPN:
cases, which are
1. Actual Direct hiring by
administrative in
2. Moral 1. International organizations
character, involving Ees,
3. Exemplary 2. Name hires
principals, contracting
4. Other forms of 3. Members of the diplomatic
partners and Filipino
damages. (Sec. migrant workers. (Rule organizations
10, R.A. 8042) 4. Other Ers as may be allowed by
VII, Book VII, POEA
DOLE

Q: A seafarer was prevented from leaving

the port of Manila and refused deployment Reasons:
1. To ensure the best possible terms
without valid reason. His POEA-approved
and conditions of employment for the
employment contract provides that the
employer-employee relationship shall worker.
commence only upon the seafarer's actual 2. To assure the foreign Er that he hires
departure from the port in the point of hire. only qualified Filipino workers.
3. To ensure full requlation of
Is the seafarer entitled to relief under the
employment in order to avoid
Migrant Workers' Act, in the absence of an
employer-employee relationship? exploitation.

Q: May the POEA, at any time terminate or

A: Yes. Despite the absence of an
impose a ban on employment of migrant
employer-employee relationship, the NLRC
has jurisdiction over the seafarer'S complaint. workers?
The jurisdiction of labor arbiters is not limited
to claims arising from Er-Ee relationships. Sec. A: Yes, in consultation with the DFA based on
10 of the Migrant Workers Act provides that the ft. grounds:
1. In pursuit of the National Interest or
the labor arbiters shall have jurisdiction over
2. When public welfare so requires.
claims arising out of an Er-Ee relationship or
(Sec. 4 R.A. 10022)
by virtue of any law or contract involving
Filipino workers for overseas deployment
including claims for actual, moral, exemplary
and other forms of damages. Since the

10
 UST GOLDEN NOTES 2010

Q: What is the liability of the private XPN:

employment agency and the principal or 1. The worker's immediate family
foreign-based employer? members, beneficiaries and
dependents are residing with him
A: They are jointly and severally liable for any abroad
violation of the recruitment agreement and the 2. Immigrants and Filipino professionals
contracts of employment. and employees working with the UN
agencies or specialized bodies
Note: This joint and solidary liability imposed by 3. Filipino servicemen working in U.S.
law against recruitment agencies and foreign Ers military installations. (Resolution No.
is meant to assure the aggrieved worker of 1-83, Inter-Agency Committee for
immediate and sufficient payment ~f what is due Implementation of E. O. 857)
him. If the recruit menUplacement agency is a
juridical being, the corporate officers and Q: What is the effect of failure to remit?
directors and partners as the case may be, shall
themselves be jointly and solidarily liable with the
corporation or partnership for the claims and
A:
1. Workers - Shall be suspended or
damages. (Becmen Service Exporter and
removed from the list of eligible
Promotion v. Cuaresma, GR. Nos. 182978-79,
workers for overseas employment.
April 7, 2009)

2. Employers - Will be excluded from

Q: What are the minimum conditions/
the overseas em ployment program.
provisions of overseas employment
Private employment agencies shall
contracts?
face cancellation or. revocation of
their licenses or authority to recruit.
A:
(Sec. 9, E.O. 857)
1. Guaranteed wages for regular hours
and overtime, not lower than the
minimum wage prescribed in all of the
ff: CHAPTER II
REGULATIONS OF RECRUITMENT AND'
a. The host country
b. Bilateral agreements or PLACEMENT ACTIVITIES .
international conventions ratified
by the host country and the . ART. 25. PRIVATE SECTOR
Philippines PARTICIPATION IN THE RECRUITMENT
c. The Philippines AND PLACEMENT OF WORKERS
2. Free transportation to and from the
worksite or offsetting benefit Q: What are the entities in the private
3. Free food and accommodation or sectors that can participate in recruitment
offsetting benefit and placement of workers?
4. Just/authorized causes of termination
of the contract or services of the A:
worker 1. Shipping or manning agents or
representatives
Note: An agreement that diminishes the Ees pay 2. Private recruitment offices
and benefits as contained in a POEA-approved 3. Public employment offices
contract is void, unless such subsequent 4. Construction contractors if authorized
agreement is approved by the POEA. by the DOLE and Construction
Industry Authority.
5. Persons that may be authorized by
ART. 22. MANDATORY REMITTANCE OF the SLE
FOREIGN EXCHANGE EARNINGS 6. Private employment agencies. (Sec.
t, Rule VII, Book I, IRR)
Q: What is the rule on remittance of foreign
exchange earnings?

A:
GR: it shall be mandatory for all OFWs to
remit a portion of their foreign exchange
earnings to their families, dependents,
andlor beneficiaries ranging from 50% - 80%
depending on the worker's kind of job. (Rule
VIII, Book III, POEA Rules)
UNIVERSITY OF SANTO TOMAS ~~-~11
Pacu{tatI tie cJJerecno CiviC
 LABOR STANDARDS: PRE-EMPLOYMENT

Q: What are the qualifications, for 2. Officers or members of the board of

participation in recruitment and placement any corporation or members in a
of workers? ' partnership engaged in the business
of a travel agency;
A: 3. Corporations and partnerships, when
1, Filipino citizens, partnerships or any of its officers, members of the
corporations at least 75% of the board or partners, is also an officer,
authorized capital stock of which is member of the board or partner of a
owned and controlled by Filipino corporation or partnership engaged in
citizens; (Art, 27, LC) the business of a travel agency;
4. Persons, partnerships or corporations
2. Capitalization which have derogatory records, such
a. Single proprietorship or as but not limited to those:
partnership a. Certified to have derogatory
-A minimum capitalization of P2 record or information by the NBI
million or by the Anti-Illegal Recruitment
b. Corporation Branch of the POEA;
-A minimum paid-up capital of P2 b. Against whom probable cause or
million prima facie finding of guilt for
illegal recruitment or other
Provided, that those with existing related cases exists;
licenses shall, within 4 yrs from the c. Convicted for illegal recruitment
effectivity hereof, increase their or other related cases and/or
capitalization or paid up capital, as crimes involving moral turpitude;
the case may be, to P2 million at the and
rate of P250,000.00 every year. (Art. d. Agencies whose licenses have
28, LC) been previously revoked or
cancelled by the POEA for
3, Not otherwise disqualified by law or violation of RA 8042, PD. 442
other government regulations to as amended and their
engage in the recruitment and implementing rules and
placement of workers for overseas regulations as well as these rules
employment. (Rule I, Part II, POEA and regulations,
Rules)
5. Any official or Ee of the DOLE,
4. Payment of registration fees POEA, OWWA, DFA and other
government agencies directly
5, Posting of surety/cash bonds involved in the implementation of RA
8042 and/or any of his/her relatives
Q: How will POEA regulate private sector within the 4t~ civil degree of
participation in the recruitment and consanguinity or affinity; and
overseas placement of workers? 6. Persons or partners, officers and
directors of corporations whose
A: By setting up a licensing and registration licenses have been previously
system. (Sec. 14, R.A. 10022) cancelled or revoked for violation of
recruitment laws. (Sec. 2, Rule I,
Q: Is a corporation, 70% of the authorized 2002 Rules and Regulations on the
and voting capital of which is owned and Recruitment and Employment of
controlled by Filipino citizens, allowed to Land-Based Workers)
engage in the recruitment and placement of
workers, locally or overseas? Explain
briefly.
A: No. It is because Art, 27 of the Labor Code
requires at least 75%. (2002 Bar Question)

Q: Who are disqualified to engage in the

business of recruitment and placement of
workers?

A:
1. Travel agencies and sales agencies
of airline companies; (Art. 26, LC)

12
 UST GOLDEN NOTES 2010

:~.__ -c- ART. 26. TRAVEL AGENCIES'- citizenship and capitalization requirements.
PROHIBITED TO RECRUIT (Arts. 27-28, LC). (1998 Bar Question)

Q: What is the rule on recruitment of travel Note: Change of ownership or relationship of a

agencies and sales agencies of airline single proprietorship licensed to engage in
companies? overseas employment shall cause the automatic
revocation of the license.
A: They are prohibited from engaging in the
business of recruitment and placement of
workers for overseas employment whether for ART. 32. FEES TO BE PAID' BY WORKERS
profit or not.
~~ ~ Q: When maya worker be charged any fee?
Q: w:rTA is a well-known travel agency and
an authorized sales agent of the PAL. Since A: Only when:
majority of its passengers are overseas 1. He has obtained work through
workers, WTT A applied for a license for recruiter's efforts, and
recruitment and placement activities. It 2, The worker has actually commenced
stated in its application that its purpose is working
not for profit but to help Filipinos find
employment abroad. Should the application Note: A land based agency may charge and
be approved? collect from its hired workers a placement fee in
an amount equivalent to 1 month salary,
A: The application should be disapproved, as exclusive of documentation costs.
it is prohibited by Art. 26 of the LC, to wit: "Art
26. Travel agencies and sales agencies of Q: What are the only authorized payments
airline companies are prohibited from that may be collected from a hired worker?
engaging in the business of recruitment and
placement of workers for overseas A:
employment whether for profit or not." Rule I, 1. Placement fee in an amount
Part II POEA Rules and Regulations equivalent to one month's salary of
Governing the Recruitment and Employment the worker and
of Land-Based Workers (2002) disqualifies any 2. Documentation costs.
entity having common director or owner of
travel agencies and sales agencies of airlines,
including any business entity from the . ART. 34..PROHIBITED~PRACTICES
recruitment and placement of Filipino workers
overseas, whether they derive profit or not. Q: What are prohibited practices in
(2006 Bar Question) recruitmentl placement?

Q: Is the license or authority transferable? A:

1. Furnishing or publishing any false
A: No, they are non-transferable. (Art. 29) notice/information/document related
to recruitment/employment
Q: A Recruitment and Placement Agency 2. Failure to file reports required by
declared voluntary bankruptcy. Among its SLE
assets is its license to engage in business. 3. Inducing or attempting to induce a
Is the license of the bankrupt agency an worker already employed to quit his
asset which can be sold in public auction employment in order to offer him
by the liquidator? another unless the transfer is
designed to liberate a worker from
A: No, because of the non-transferability of the oppressive terms and conditions
license to engage in recruitment and 4. Recruitment/placement of workers in
placement. The LC (Art. 29) provides that no jobs harmful to public health or
license to engage in recruitment and morality or to the dignity of the
placement shall be used directly or indirectly country
by any person other than the one in whose 5, Engaging directly or indirectly in the
favor it was issued nor may such license be management of a travel agency
transferred, conveyed or assigned to any other 6, Substituting or altering employment
person or entity. It may be noted that the grant contracts without approval of DOLE
of a license is a governmental act by the 7. Charging or accepting any amount
DOLE based on personal qualifications, and greater than that specified by DOLE

UNIVERSITY OF SANTO TOMAS ~. 13

Pacu(taa ae Verecno CiviC
 LABOR STANDARDS: PRE-EMPLOYMENT

or make a worker pay any amount ART. 35. SUSPENSION AND/OR

greater than actually received by him CANCELLATION OF LICENSE OR
8. Committing any act of AUTHORITY ,
misrepresentation to secure a license
or authority Q: Who is a non-licensee I non-holder of
9. Influencing or attempting to influence authority?
any person/entity not to employ any
worker who has not applied of A: Any person, corporation or entity:
employment through his agency 1. Which has not been issued a valid
10. Obstructing or attempting to obstruct license or authority to engage in
inspection by SLE or by his recruitment and placement by the
representatives Secretary of Labor and Employment
11. Withholding or denying travel (SLE) or
documents from applicant workers 2. Whose license or authority has been
before departure for monetary suspended, revoked or cancelled by
considerations other than authorized the POEA or the SLE
by law
12. Granting a loan to an OPN which will Q: What are the grounds for revocation of
be used for payment of legal and license?
allowable placement fees
13. Refusing to condone or renegotiate a A:
loan incurred by an OPN after his 1. Incurring an accumulated 3 counts of
employment contract has been suspension by an agency based on
prematurely terminated through no final and executory orders within the
fault of his or her own period of validity of its license
14. For a suspended 2. Violations of the conditions of license
recruitment/manning agency to 3. Engaging in acts of misrepresentation
engage in any kind of recruitment for the purpose of securing a license
activity including the processing of or renewal
pending workers' applications; and 4. Engaging in the recruitment or
15. For a recruitment/manning agency or placement of workers to jobs harmful
a foreign principal/ Er to pass on the to the public health or morality or to
OPN or deduct from his or her salary the dignity of the country. (Sec. 3,
the payment of the cost of insurance Rule I, Book VI, Rules and
fees, premium or other insurance Regulations Governing Overseas
related charges, as provided under Employment)
the compulsory worker's insurance
coverage Q: What are the grounds for suspension or
16. Imposing a compulsory and exclusive cancellation of license?
arrangement whereby an OPN is
required to: A:
a. Avail a loan only from specifically 1. Prohibited acts under Art. 34
designated institutions, entities or 2. Publishing job announcements w/o
persons POEA's approval
b. To undergo health examinations 3. Charging a fee which may be in
only from specifically designated excess of the authorized amount
medical, entities or persons, before a worker is employed
except seafarers whose medical 4. Deploying workers w/o processing
examination cost is shouldered through POEA
by the shipowner 5. Recruitment in places outside its
c. To undergo training of any kind authorized area. (Sec. 4, Rule II,
only from designated institutions, Book IV, POEA Rules)
entities or persons, except for
recommendatory trainings Q: Concerned Filipino contract workers in
mandated by the Middle East reported to the DFA that
principals/shipowners. (Sec. 6, XYZ, a private recruitment and placement
R.A. 10022) agency, is covertly transporting extremists
to terrorist training camps abroad.
Intelligence agencies of the gov't allegedly
confirmed the report. Upon being alerted
by the DFA, the DOLE issued orders
cancelling the licenses of XYZ, and

14
 UST GOLDEN NOTES 2010

imposing an immediate travel ban on its ART. 38. ILLEGAL RECRUITMENT

recruits for the Middle East. XYZ appealed
to the Office of the President to reverse and Q: Who are the persons prohibited from
set aside the DOLE orders, citing damages engaging the business of recruiting
from loss of employment of its recruits, migrant workers?
and violations of due process including
lack of notice and hearing by DOLE. The A:
DOLE in its answer claimed the existence 1. Unlawful for any official or Ee of the:
of an emergency in the Middle East which a. DOLE
required prompt measures to protect the b. POEA
life and limb of OFWs from a clear and c. Overseas Workers Welfare
present danger posed by the 0Qgoing war Administration (OWWA)
against terrorism. Should the DOLE orders d. DFA
be upheld or set aside? e. Other gov't agencies involved in
the implementation of this Act
A:
1. The DOLE order cancelling the 2. Their relatives within the 4th civil
licenses of XYZ is void because a degree of consanguinity or affinity, to
report that an agency is covertly engage, directly or indirectly in the
transporting extremists is not a valid business of recruiting migrant
ground for cancellation of a workers. (Sec. 8, R.A. 8042)
Certificate of Registration (Art. 239,
LC and there is failure of due process Q: What are the elements of illegal
as no hearing was conducted prior to recruitment?
the cancellation (Art. 238, LC).
A:
2. The DOLE order imposing the travel 1. Offender is a non-li~nsee or non-
ban is valid because it is a valid holder of authority to lawfully engage
exercise of police power to protect in the recruitmenUplacement of
the national interest (Sec. 3, Art. XIII, workers
Constitution on full protection to labor
safety of workers) and on the rule 2. Offender undertakes:
making authority of the SLE. (Art. 5, a. Any act of canvassing, enlisting.
LC; Phil. Ass'n. of Service Exporters contracting, transporting,
v. Drilon, G.R. No. 81958, June 30, utilizing, hiring or procuring
1988). (2004 Bar Question) workers, and includes referrals,
contact services, promising or
advertising for employment,
" CHAPTER 111- locally or abroad, whether for
i MISCELLANEOUS PROVISIONS profit or not (Art. 13[bJ) or
ART. 36. REGULATORY POWERS b. Any of prohibited practices under
Art. 34
Q: What are the regulatory powers of the
Secretary of Labor and Employment (SLE)? Q: Larry Domingo was accused of the
crime of illegal recruitment. He argued that
A: he issued no receipt or document in which
1. Restrict and regulate the recruitment he acknowledged as having received any
and placement activities of all money for the promised jobs. Hence, he
agencies should be free him from liability. Was Larry
2. Issue orders and promulgate rules engaged in recruitment activities?
and regulations
A: Yes. Even if at the time Larry was
promising employment no cash was given to
him, he is still considered as having been
engaged in recruitment activities, since
Art.13(b) of the LC states that the act of
recruitment may be for profit or not. It suffices
that Larry promised or offered employment for
a fee to the complaining witnesses to warrant
his conviction for illegal recruitment. (People v.
Domingo, G.R. No. 181475, April 7, 2009, .J.
Carpio- Morales)

UNIVERSITY OF SANTO TOM.A~ ,,~ 15

Pacu{taa ae (])ereChO Ct'ln{ .
 LABOR STANDARDS: PRE-EMPLOYMENT

Q: What is the difference between the LC 1. By a syndicate - carried out by 3 or

and R.A. 8042 or the Overseas Filipinos·
and Overseas Migrant Workers Act?
A:
Lc (Art . 38) R.A. 8042, as amended by
'RA 10022 '. .
Applies to recruitment for
Local recruitment
overseas employment
Illegal recruitment under
Sec. 6 means any
recruitment activity
committed by non-
licensees/ non-holders of
authority or prohibited acts
(same as Art. 3~, l.C)
Illegal recruitment
under Art 38 Added to the following in
means any the list of prohibited acts:
recruitment 1. Failure to actually
activity including deploy without valid
prohibited acts reason;
under Art. 34 2. Failure to reimburse
committed by non- expenses incurred by
licensees or non- the worker in
holders of connection with his/her
authority. documentation and
processing for
purposes of
deployment;
3. To allow a non-Filipino
citizen to head or
manage a licensed
recruitmenV manning
agency.
Q: How does one prove illegal recruitment?
A: It must be shown that the accused gave the
distinct impression that he had the power or
ability to send complainants abroad for work
such that the latter were convinced to part their
money in order to be deployed.
Q: Maya licensee or holder of authority
held liable for illegal recruitment?
A: Yes, any person (whether non-licensee,
non-holder of authority, licensee or holder of
authority) who commits any of the prohibited
acts, shall be liable for l\Iegal recruitment.
(R.A. 8042)
Q: When is illegal recruitment considered
as economic sabotage?
more persons
conspiring/confederating with one
another or
2. In large scale - committed against 3
or more persons individually or as a
group. (Sec. 6, 10022)
Q: While her application for renewal of her
license to recruit workers for overseas
en1nlovemnt was still Dendina Marvrose
G~~d-'; -~~~~~ited- AI~a, ~nd he~ 3 si~ters,
Ana, Joan, and Mavic, for employment as
housemates in Saudi Arabia. Maryrose
represented to the sisters that she had a
license to recruit w9rkers for overseas
employment and demanded and received
P30,OOO.OO from each of them for her
services. However, her application for the
renewal of her license was denied, and
consequently failed to employ the 4 sisters
in Saudi Arabia. The sisters charged
Maryrose with large scale illegal
recruitment. Testifying in her defense, she
declared that she acted in good faith
because she believed that her application
for the renewal of her license would be
approved. She' adduced in evidence the
Affidavits of Desistance which the four
private complainants had executed after
the prosecution rested its case. In the said
affidavits, they acknowledge receipt of the
refund by Maryrose of the total amount of
P120,OOO.00 and indicated that they were
no longer interested to pursue the case
against her. Resolve the case with reasons.
A: l\Iegal recruitment is defined by law as any
recruitment activities undertaken by non-
licenses or non-holders of authority. (People v.
Senoron, G.R. No. 119160, Jan. 30,1997) And
it is large scale illegal recruitment when the
be offense is committed against 3 or more
persons, individually or as a group. (Art. 38[b),
l.C) In view of the above, Maryrose is guilty of
large scale illegal recruitment. Her defense of
GF and the Affidavit of Desistance as well as
the refund given will not save her because
R.A. No. 8042 is a special law, and illegal
recruitment is malum prohibitum. (People v.
Saulo, G.R. No. 125903, Nov. 15, 2000).
(2005 Bar Question)

A: When it is committed:

16
 UST GOLDEN NOTES 2010

Q: What is the consequence of conviction of illegal recruitment (IR)?

Life imprisonment +
fine of P2M-P5M
IR as economic sabotage

Provided:
1. If person illegally recruited is bel~~w18 rears of
~em -
2. Illegal recruitment is committed by a non-
.
lJ Maximum penalty 'hall be imposed
licensee/non-holder

12 yrs and 1 day - 20 yrs imprisonment; or

Any person found guilty of illegal recruitment
Fine: P1M-P2M
6 yrs and 1 day - 12 yrs imprisonment; or
Any person found guilty of the prohibited acts
Fine of P500K - P1M
yrs imprisonment; or
Licensee/holder of authority violates provisions Fine: P10K - P50K;
or both
4-8 yrs imprisonment; or
Non-licensee/non-holder of authority violates
Fine: P20K - P1OOK
provisions
or both
Penalty imposed upon officer/s responsible for
Corporation, partnership, association, or entity
violation
Penalties prescribed under RA 10022,
Alien +
Deportation without further proceedings
Automatic revocation of license or authority and all
In every case permits and privileges of the recruitment m manning
agency, lending institutions, training school or medical
clinic

C·
.".- 17
UNIVERSITY OF SANTO TOMAS
Pacu{taa de (])ereclio Civ-i{
 LABOR STANDARDS: PRE-EMPLOYMENT

Q: What are the remedies under the Migrant Workers Act and how may they be enforced?

Original and exclusive jurisdiction to hear and decide claims arising out of an Er-Ee 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.
1. The liability of the principal! Er and the recruitmenU placement agency for any and all claims shall be joint
and several.
2. The performance bond to de filed by the recruitmenU placement agency shall be answerable for all money
claims or damages that may be awarded to the workers.
3. If the recruitmenUplacement agency is a juridical being, the corporate officers and directors and partners as
the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the
claims and damages.

Original and exclusive jurisdiction to hear and decide:

1. All cases which are administrative in character, involving or arising out of violations of rules and regulations
relating to licensing and registration of recruitment and employment agencies or entities and
2. Disciplinary action (DA) cases and other special cases which are administrative in character, involving Ers,
principals, contracting partners and Filipino migrant workers.
a.lt may be filed with the POEA Adjudication Office or the DOLEIPOEA regional office of the place where
the complaint applied or was recruited at the option of the complainant. The office with which the
complaint was first filed shall take cognizance of the case.
b. DA cases and other special cases, as mentioned in the preceding Section, shall be filed with POEA
Adjudication Office.

Within 5 yrs from the time illegal recruitment has Within 20 yrs from the time illegal recruitment has
happened happened. (Sec. 12,R.A. 8042)

18
 UST GOLDEN NOTES 2010

Q: Can SLE issue search warrants or Is the subject clause constitutional?

warrants of arrest?
A: No. Only a judge may issue search and
arrest warrants. Art 38 (c) of the Labor Code is
unconstitutional inasmuch as it gives the SLE
the power to issue search or arrest warrants.
The labor authorities must go through the
judicial process.
Q: Is compromise agreement on money
claims allowed?
A: Yes. Consistent with the policy encouraging
amicable settlement of labor disputes, Sec. 10
of R.A. 8042 allows resolution by compromise
of cases filed with the NLRC.
Q: When shall compromise agreements
money claims be paid?
A: No. The subject clause contains a suspect
classification in that, in the computation of the
monetary benefits of fixed-term employees
who are illegally discharged, it imposes a 3-
month cap on the claim of OFWs with an
unexpired portion of one year or more in their
contracts, but none on the claims of other
OFWs or· local workers with fixed-term
employment. The subject clause singles out
one classification of OFWs and burdens it with
a peculiar disadvantage.
The clause is a violation of the right of Serrano
and other OFWs to equal protection and right
to substantive due process, for it deprives him
of property, consisting of monetary benefits,
on without any existing valid governmental
purpose.

A: Any compromise/amicable settlement or Furthermore, prior to R.A. 8042, all OFWs,

voluntary agreement on money claims regardless of contract periods or the unexpired
inclusive of damages shall be paid within 4 portions thereof, were treated alike in terms of
months from the approval of the settlement by the computation of their monetary benefits in
the appropriate authority. case of illegal dismissal. Their claims were
subjected to a uniform rule of computation:
Q: Serrano, a seafarer, was hired by Gallant their basic salaries multiplied by the entire
Maritime and Marlow Navigation Co. for 12 unexpired portion of their employment
months as Chief Officer. On the date of his contracts. The same applies local workers with
departure, he was constrained to accept a fixed-term employment.
downgraded employment contract for the
position of Second Officer, upon the Thus, Serrano is entitled to his salaries for the
assurance that he would be made Chief entire unexpired period of nine months and 23
Officer after a month. It was not done; days of his employment contract, pursuant to
hence, he refused to stay on as Second law and jurisprudence prior to the enactment
Officer and was repatriated to the Phi/so He of RA 8042. (Serrano v. Gal/ant Maritime
had served only 2 months & 7 days of his Services & Marlow Navigation Co., Inc., G.R.
contract, leaving an unexpired portion of 9 No. 167614, Mar.24, 2009)
months & 23 days.
Do OT and leave pay form part of the salary
Serrano filed with the LA a Complaint basis in the computation of the monetary
against Gallant Maritime and Marlow for award?
constructive dismissal and for payment of
his money claims. The LA rendered a A: No. The word salaries in Sec. 10(5) does
favorable decision to Serrano awarding him not include overtime and leave pay. For
$8,770.00, representing his salary for 3 seafarers, DOLE Department Order No. 33,
months of the unexpired portion of his series 1996, provides a Standard Employment
contract of employment applying R.A. Contract of Seafarers, in which salary is
8042, Sec 10, par 5: understood as the basic wage, exclusive of
OT, leave pay and other bonuses; whereas OT
Money Claims. • In case of termination of pay is compensation for all work "performed" in
overseas employment without just, valid or excess of the regular 8 hours, and holiday pay
authorized cause as defined by law or is compensation for any work "performed" on
contract, the workers shall be entitled to designated rest days and holidays.
the full reimbursement of his placement fee (Serrano v. Gal/ant Marffime Services &
with interest of 12% per annum, plus his Marlow Navigation Co., Inc., G.R. No. 167614,
salaries for the unexpired portion of his Mar. 24, 2009)
employment contract or for 3 months for
every year of the unexpired term,
whichever is less.

UNIVERSITY OF
PacuCtaa
SANTO TOMAS
ae (])erecfio CiviC
~i."~
19
 LABOR STANDARDS: PRE-EMPLOYMENT

, EMPLOYMENT OF NON-RESIDENT ALIENS : ART. 41. PROHIBITION AGAINST

l TRANSFER OF EMPLOYMENT .
Q: What is required in the employment of
non-resident aliens? Q: Who .are required to obtain an
employment permit?
A: Any alien seeking admission to the Phil. for
employment purposes and any domestic or A:
foreign employer (Er) who desires to engage GR: Only non-resident aliens;
an alien for employment in the Philippines:
1. Shall obtain an employment permit XPNS:
from the DOLE -1-.-Diplomatic services and foreign gov't
')
L...
Th"" ~"r.....,i+
111e; POIIIIIL
~''''U'
IllaJ
hI"\, iro~II""\I'~
LI'Ci I.;:)..:;JUGU
+'"
\.\oJ
.." nn.•.·L
CA:IIVII- offlcials
resident alien or to the applicant Er 2. Officers and staff of int'I organizations
after a determination of the non- and theirdeqitimate spouses
availability of a person in the Phil. 3. Members of governing board who has
who is competent, able and willing at voting rights only
the time of application to perform the 4. Those exempted. by special laws
services for which the alien is desired 5. Owners and representatives of
3. For an enterprise registered in foreign principals who interview
preferred areas of investments, said Filipino applicants for employment
permit may be issued upon abroad
recommendation of the gov't agency 6. Aliens whose purpose is to teach,
charged with the supervision of said present and/or conduct research
registered enterprise studies
7, Resident aliens. (D.O. 75-06, May 31,
Q: The DOLE issued an alien employment 2006)
permit for Earl Cone, a U.S. citizen, as
sports consultant and assistant coach for Q: What is required for immigrants and
GMC. Later, the Board of Special Inquiry of resident aliens?
the Commission on Immigration and
Deportation approved Cone's application A: An Alien Employment Registration
for a change of admission status from Certificate.
temporary visitor to pre-arranged
employee. A month later, GMC requested Q: What is the duration of the employment
that it be allowed to employ Cone as full- permit?
fledged coach. The Dole Regional Director
granted the request. The Basketball A:
Association of the Phils. appealed the GR: Minimum of 1 year
issuance of said permit to the SLE who
cancelled Cone's employment permit XPN: Unless revoked and subject to
because GMC failed to show that there is renewal
no person in the Philippines who is
competent and willing to do the services Q: May aliens be employed in entities
nor that the hiring of Cone would redound engaged in nationalized activities?
to the national interest. Is the act of SLE
valid? A:
GR: No.
A: Yes. GMC's claim that hiring of a foreign
coach is an Er's prerogative has no legal XPNS:
basis. Under Art. 40 of the LC, an Er seeking 1. Sec. of Justice specifically authorizes
employment of an alien must first obtain an the employment of technical
employment permit from the DOLE. GMC's personnel
right to choose whom to employ is limited by 2. Aliens are elected members of the
the statutory requirement of an employment board of directors or governing body
permit. (GMC v. Torres, G.R. No. 9366, April of corporations or associations or
22, 1991) 3. Enterprises registered under the
Omnibus Investment Code in case of
technical, supervisory or advisory
positions, but for a limited period.

20
 UST GOLDEN NOTES 2010

BOOK TWO conditions as it continues personal

discipline and values.
.HUMAN RESOURCES DEVELOPMENT
'/PROGRAM TRAINING AND EMPLOYMENT Q: What is manpower?
OF·SPECIAL WORKERS
A: It means that portion of the nation's
Q: What is human resource development population which has actual or potential
(HRO)? capability to contribute directly to the
production of goods and services.
A: It refers to the process by which the actual
and potential labor force is made Q: What is entrepreneurship?
systematically to acquire greatw kno'J,!!edge,
skills, and capabilities for the nation's A: It means training for self-employment or
sustained economic and social growth. assisting individual or small industries.

Q: What is the rationale of HRD?

TITLE II .
A: It will produce skilled workers. With the TRAINING AND EMPLOYMENT
abundance of skilled workers, labor industry - OF SPECIAL WORKERS
can operate efficiently; hence, economic
stability and growth will be sustained. Q: Who are special workers?

Note: HRD is not intended solely for the purpose A:

of training workers to serve employers; it also 1. Apprentices
means training for self-employment or 2. Learners
entrepreneurship. 3. Handicapped workers

Q: What is the agency tasked to regulate Q: What are their conditions of their
HRD? employment?

A: Technical Education and Skills A:

Development Authority (TESDA). It is the body 1. Work shall not exceed 8 hours per
created under R.A. 7796 to replace and day
absorb the National Manpower and youth 2. OT allowed, but with pay
Council, the Bureau of Technical and
Vocational Education as well as the
apprenticeship program of the DOLE. (R.A. , CHAPTER I
7796) APPRENTICES ,
ART. 58. DEFINITION OF TERMS
Q: What are the powers and functions of
TESDA? Q: Who is an apprentice?

A: It is responsible for formulating, continuing A: Any worker who is covered by a written

coordinating and fully integrating technical apprenticeship agreement with an individual
education and skills development policies, employer or any of the entities recognized
plans and programs. under the LC.

Q: What is dual system/training? Q: What is apprenticeship?

A: It refers to a delivery system of quality A: It is practical training on the job
technical and vocational education which supplemented by reiated theoretical
requires training to be carried out alternately in instruction,
2 venues, in school and in the actual
production or plant area. Q: What is an apprenticeable occupation?

1. In school training - the trainee is A: That which requires more than 3 months of
taught of the theoretical foundation, practical training with theoretical instruction
basic training, guidance, and human
foundation Q: What is on the job training (OJT)?
2. In plant training - the trainee is given
the opportunity to develop his skills
and proficiency in actual work

UNIVERSITY OF SANTO TOMAS

PacuCtati tie (])ereclio Ci1JiC
 LABOR STANDARDS: SPECIAL WORKERS

A: It is practical work experience through 3. Workers are engaged in the

actual participation in productive activities manufacture or handling of
given to or acquired by an apprentice. explosives and other pyrotechnic
products
Q: What are highly technical industries? 4. Workers use, or are exposed to
heavy or power-driven machinery or
A: Those which are engaged in the application equipment.
of advanced technology.

Q: What are related theoretical ART. 60. EMPLOYMENT OF APPRENTICES

instructions?
Q: Who may empioy appfwiitices?
A: Technical information based on
apprenticeship standards approved by the A:
Bureau. 1. Only employers in highly technical
industries and
Note: Prior approvai by TESDA (formerly DOLE) 2. Only in apprenticeable occupations
of the proposed apprenticeship program is a approved by SLE
condition sine qua non. Otherwise, apprentice
becomes a regular Ee. (Nitto Enterprises v. Q: What is the employment status of
NLRC, G.R. No. 114337, Sep. 29, 1995).
apprentices?

A: They are contractual workers whose length

ART. 59. QUALIFICATIONS OF
of service depends on the term provided for in
APPRENTICE
the apprenticeship agreement. Thus, the
employer is not obliged to employ the
Q: What are the qualifications of an apprentice after the completion of his training.
apprentice?
Q: What Is the period of apprenticeship?
A:
1. At least 15 yrs of age A: Must not exceed 6 months:
1. 2 monthsl400 hours: Trades or
Note: Those below 18 years of age
occupations which normally require 1
shall not work in hazardous occupations
year or more for proficiency
2. 1 monthl200 hours: Occupations and
2. Physically tit for the occupation
jobs which require more than 3 months
3. Possess vocational aptitude and
but less than 1 year for proficiency.
capacity
(Sec. 19, Rule VI, Book II, IRR)
4. Possess:
a. The ability to comprehend, and
Q: What is the status of an apprentice hired
b. Follow oral and written
after such term?
instructions
5. The company must have an
A: He is deemed a regular Ee. He cannot be
apprenticeship program duly
hired as a probationary Ee since the
approved by the DOLE.
apprenticeship is deemed the probationary
Note: Trade and industry associations may period.
recommend to the SLE appropriate educational
requirements for different occupations. Q: What is the wage rate of an apprentice?

Q: When is an occupation deemed A: Start at not less than 75% of the statutory
hazardous? minimum wage for the 1s1 6 months (except
OJT); thereafter, shall be paid in full minimum
A: wage, including the full COLA.
1. Nature of work exposes worker to
Note:
dangerous environmental elemental
contaminants or work conditions
!iB: Apprenticeship programs shall be
primarily voluntary
2. Workers are engaged in construction
XPN: Compulsory apprenticeship:
work, logging, firefighting, mining, 1. National security or economic
quarrying, blasting, stevedoring, development so demand, the President
deep-sea fishing, and mechanized may require compulsory training
farming

22
 UST GOLDEN NOTES 2010

2. Services of foreign technicians are ART. 72. APPRENTICESHIP WITHOUT

utilized by private companies in COMPENSATION
- -
apprenticeable trades.
Q: May apprentices be hired without
compensation?
r ART. 61. CONTENTS OF- APPRENTICESHIP
-' AGREEMENTS A: Required:
1. By school
Q: What are the rules regarding 2. By the training program curriculum
apprenticeship agreements? 3. For Graduation
4. For board examinations
A: Apprenticeship aqreernentss including the
wage rates of apprentices, shall: '. Q: What are the rules on working scholars?

1. Conform to the rules issued by SLE. A: There is no Er-Ee relationship between

students on one hand, and schools, where
2. The period of apprenticeship shall not there is written aqreernent between them
exceed 6 months. under which the former agree to work for the
latter in exchange for the privilege to study free
3. Apprenticeship agreements providing of charge. The student is not considered an
for wage rates below the legal Ee. (Sec. 14, Rule IX, Book III, IRR)
minimum wage, which in no case
shall start below 75% of the Q: Padilla entered into a written agreement
applicable min. wage, may be with Gomburza College to work for the
entered into only in accordance with latter in exchange for the privilege of
apprenticeship programs duly studying in said institution. His work was
approved by the SLE. confined to keeping clean the lavatory
facilities of the school. One school day, he
4. The DOLE shall develop standard got into a fist fight with a classmate,
model programs of apprenticeship. Monteverde, as a result of which the latter
(Sec. 18, Rule VI, Book II, IRR) sustained a fractured arm. Victor filed a
civil case for damages against him,
impleading Gomburza College due to the
ART. 62. SIGNING OF APPRENTICESHIP latter's alleged liability as his Er. Under the
. AGREEMENTS circumstances, could Gomburza College be
held liable by Victor Monteverde as an
Q: Who signs the apprenticeship Padilla's Er?
agreement?
A: Gomburza College is not liable for the acts
of Padilla because there is no Er-Ee
A: Every apprenticeship agreement shall be
relationship between them. As provided in the
signed by:
Rules and Regulations Implementing the LC
"there is no Er-Ee relationship between
1. The employer or his agent, or
students on one hand, and schools, colleges,
or universities on the other, where students
2. An authorized representative of any
of the recognized organizations, work with the latter in exchange for the
privilege to study free of charge, provided the
associations or groups, and
students are given real opportunity, including
such facilities as may be reasonable and
3. The apprentice.
necessary to finish their chosen courses under
such arrangement." (1997 Bar Question)
Q: Who will sign if the apprentice is a
minor?

A: An apprenticeship agreement with a minor

shall be signed in his behalf by:

1. His parent or guardian, or if the latter

is not available,

2. An authorized representative of the

DOLE.

~
UNIVERSITY OF SANTO TOMAS ~ ,"• 23
tFacu{taa de CDerecno CiviC 1{J'
 LABOR STANDARDS: SPECIAL WORKERS

r ART. 65. VIOLATION OF APPRENTICESHIP 2. Stating the reason for such decision;
AGREEMENT . and
3. A copy of said notice shall be
Q: Who may terminate an apprenticeship furnished the Apprenticeship Division
agreement? concerned.

A:
1. Either party may terminate an "-" " " ' . CtfAPIER II '- "' "" *"~,".
agreement after the probationary ~ "...: ,,',' :. ··I.:iEARNERS'" .;.:"i-.~ .-,":::' ·Ff-';"-:I
" .

period but only for a valid cause.

2. It may be initiated by either party Q: Who are learners?
upon filing a complaint or upon
DOLE's own initiative. A:
1. They are persons hired as trainees in
semi-skilled and other industrial
occupations
~ ART. 66. APPEAL 2. Which are non-apprenticeable and
3. Which may be learned through
Q: Who may appeal the decision of the practical training on the job in a
authorized agency of the DOLE? relatively short period of time
4. Which shall not exceed 3 months
A: It may be appealed by any aggrieved 5, Whether or not such practical training
person to the SLE within 5 days from receipt of is supplemented by theoretical
the decision. instructions. (Sec. 1a, Rule VII, Book
II,IRR)
Note: The decision of the SLE shall be final and
executory. Q: Distinguish Learnership from
Apprenticeship.

:. . ART. 67. EXHAUSTION OF., - " A:

'. ADMINISTRATIVE REMEplES (EAR) .

Q: What is EAR?
Training on the job in Training in trades
semi-skilled and other which are
A: It is a condition precedent to the institution industrial occupation or apprenticeable, that
of action. (Sec. 32b, Rule VI, Book II, IRR) trades which are non- is, practical training
apprentice able and onthejob
Q: How is the principle of EAR applied in which may be learned supplemented by
case of breach of apprenticeship thru practical training on related theoretical
agreement? the job in a relatively instruction for more
short period of time. than 3 months.
A: No person shall institute any action for the
enforcement of any apprenticeship agreement
or damages for breach of any such agreement, Min: 3 months
Max: 3 months
unless he has exhausted all available Max: 6 months
administrative remedies.
With commitment to
Q: Who shall settle differences arising out employ the learner as a
No commitment to
of apprenticeship agreement? regular Ee if he desires
hire
upon completion of
A: The plant apprenticeship committee shall learners hip
have the initial responsibility for settling
differences arising out of apprenticeship rn"" irl<>rt,ti a reg
agreement. (Sec. 32b, Rule VI, Book II, IRR) if pre-termination occurs
Worker not
after 2 months of
considered as regular
Q: What is the procedure for the training and the
employee.
termination of apprenticeship? dismissal is without fault
of the learner.
A: The party terminating shall:
1. Serve a written notice on the other at Semi-skilled/lndus-trial
least 5 days before actual occupations
termination,

24
 UST GOLDEN NOTES 2010

There is a list of Q: What is the status of learners who have

learnable trades by No list been allowed or suffered work during the
TESDA first 2 months, if training is terminated by
"'" the Er before the end of the stipulated
'"
Requires period through no fault of the learner?
Requires learnership
Apprentices hip
agreement
Agreement A: They are deemed regular employees. (Sec.
4, Rule VII, Book II, IRR)

1>'ARL"74'. WHEN LEARNERS MAY BE HIRED

. CHAPTER III
Q: When may learners be em!?loyed? , HANDICAPPED WORKERS
v "

A: Q: Who are handicapped workers (HW)?

1, When no experienced worker is A: Those whose earning capacity is impaired
available by:
2, It is necessary to prevent curtailment 1. Physlcat deficiency
of employment opportunities; and 2. Age
3. Employment does not create unfair 3. Injury
competition in terms of labor costs or 4. Disease
impair or lower working standards. 5. Mental deficiency
6. Illness

I.. " ART. 75. LEARNERSHIP AGREEMENT _ . ART. 80. EMPLOYMENT AGREEMENT

Q: What is a learners hip agreement? Q: What is the duration of the employment

period of handicapped workers?
A: Any employer desiring to employ learners
shall enter into a learnership agreement with A: There is no minimum or maximum duration.
them, which agreement shall include: It depends on the agreement but it is
1. The names and addresses of the necessary that there is a specific duration
learners; stated.
2. The duration of the learnership
period, which shall not exceed 3 Q: May handicapped workers be hired as
months; apprentices or learners?
3. The wages or salary rates of the
learners which shall begin at not less A: Yes, if their handicap is not such as to
than 75% of the applicable minimum effectively impede the performance of job
wage; and operations in the particular occupations for
4. A commitment to employ the learners which they are hired, (Art. 81)
if they so desire, as regular
employees upon completion of the Q: Can a handicapped workers acquire the
learnership. status of a regular Ee?

Q: What is the qualification of a learner? A: Yes, if work is usually or necessarily or

desirable to the business. (Bernardo v. NLRC,
A: Must be at least 15 years of age. G.R No. 122917, July 12, 1999)

Note: Those below 18 years of age shall not Q: Who may employ handicapped workers?
work in hazardous occupations.
A: Employers in all industries. Provided, the
Q: Who may employ learners? handicap is not such as to effectively impede
the performance of job operations in the
A: Only employers in semi-skilled and other
particular occupations for which they are hired
industrial occupations which are non-
apprenticeable.

UNIVERSITY OF SANTO TOMAS

'Facu[taa ae cDerecfio CiviC
 LABOR STANDARDS: SPECIAL WORKERS

Q: When can handicapped workers be

employed?

A:
1. When their employment is necessary
to prevent curtailment of employment
opportunities and
2. When it will not create unfair
competition in labor costs or lower
working standards. (Art. 79)

Q: Does the mere fact that a worker has a

disability, make him a handicapped
workers?

A: No, because his disability may not impair his

efficiency or the quality of his work. If despite his
disability he can still efficiently perform his work,
he cannot be classified as handicapped; he
would be considered a qualified disabled worker
entitled to the same treatment as qualified able-
bodied workers.

Q: Distinguish handicapped from disabled?

A:
i Disabled
,. Handicapped
(Differently Ab.led)
Refers to all suffering from
restriction of different
abilities as a result of
Earning capacity is
mental, physical or
impaired by age, or
sensory impairment to
physical or mental perform an activity in the
deficiency or injury.
manner or within range
considered normal for a
human being. Academics Committee
Covers all activities or Chairperson: Abraham D. Genuine II
Covers only workers. endeavors. Vice-Chair for Academics: Jeannie A. Laurentino
Basis: Basis: range of activity Vice-Chair for Admin & Finance: Aissa Celine H. Luna
loss/impairment of which is normal for a Vice-Chair for Layout & Design: Loise Rae G. Naval
earning capacity. human being.

Restriction due to
Labor Law Committee
Loss due to injury or Subject Head: Lester Jay Alan E. Flores II
impairment of
physical or mental Assistant Subject Head' Domingo B. Diviva V
mental/physical! sensory
defect or age.
defect.
Members:
If hired, entitled to
Rene Francis P. Batal1a
75% of minimum
If qualified, entitled to all Diane Camilla R. Borja
wage.
terms and conditions as Maria Kristina L. Dacayo-Garcia
qualified able-bodied
Subject to definite Christian Nino A. Diaz
person.
periods of Angelo S. Diolrno
employment. Genesis R. Fulgencio
Employable only No restrictions on J eanelle C. Lee
when necessary to employment. ] emuel Paolo M. Lobo
prevent curtailment Andrew W. Montesa
of employment Must get equal opportunity
Maria Maica A.ngelikaRoman
opportunity. and no unfair competition.

26
 UST GOLDEN NOTES 2010

l:t.1·';t·1I33:1 therefrom the amounts for SSS premiums,

medicare contributions and withholding
CONDITIONS OF EMPLOYMENT taxes. Assignments of security guards,
who should be on duty or on call,
i -, CHAPTER I promotions, suspensions, dismissals and
;:.:., ,,, "'<~....:.. : HOURS_OE WORK _.. ' _. award citations for meritorious services
were all done upon approval by BARON's
chief security officer. After the expiration of
the contract with ASIA, BARON did not
Q: Who determines working conditions? renew the same and instead executed
another' contract for security services with
A: Generally, they are detwmine,p by the another agency. ASIA placed the affected
employer, as he is usually free to: regulate, security guards on "floating status" on "no
according to his discretion, all aspects of work no pay" basis. Having been displaced
employment. from work, the ASIA security guards filed a
case against the BARON for illegal
Q: What is the limitation on the employer's dismissal, overtime pay, minimum wage
power to regulate working conditions? differentials, vacation leave and sick leave
benefits, and 13th month pay. BARON
A: It must be done in good faith and not for the denied liability alleging that ASIA is the
purpose of defeating or circumventing the employer of the security guards and
rights of the employees. Such are not always therefore, their complaint for illegal
absolute and must be exercised with due dismissal and payment of money claims
regard to the rights of labor. should be directed against ASIA.
Nevertheless, BARON filed a Third Party
Note: One's employment, profession, trade or Complaint against ASIA.
calling is a property right and the wrongful
interference therewith is an actionable wrong. Is there an Er-Ee relationship between the
BARON, on one hand, and the ASIA
Q: When does the condition on security guards, on the other hand?
employment under the Labor Code apply? Explain briefly.

A: Only if an Er-Ee relationship exists. A: As a general rule, the security guards of a

private security guard agency are the
Q: Who are the employees that are covered employees of the latter and not of the
by the conditions of employment? establishment that has entered into a contract
with the private security guard agency for
A: security services. But under the facts in the
GR: It applies to a\l Ee's in all question, Baron Hotel appear to have hired the
establishments. security guards, to have paid their wages, to
have the power to promote, suspend or
XPN: dismiss the security guards and the power of
1. Gov't employees control over them, namely, the security guards
2. Managerial employees were under orders of Baron Hotel as regard
3. Field personnel their employment. Because of the above-
4. The employers family members who mentioned circumstances, Baron Hotel is the
depend on him for support Er of the security guards.
5. Domestic helpers and persons in the
personal service of another, and Q: Assuming that ASIA is the Er, is the act
6. Workers who are paid by results as of ASIA in placing the security guards on
determined under DOLE regulations "floating status" lawful? Why?

Q: ASIA executed a 1-year contract with the
Baron Hotel (BARON) for the former to
provide the latter with 20 security guards to
safeguard the persons and belongings of
hotel guests, among others. The security
guards filled up Baron application form and
submitted the executed forms directly to
the Security Department of Baron. The pay
slips of the security guards bore BARON's
logo and showed that Baron deducted
A: It is lawful for a private security guard
agency to place its security guard on a
"floating status" if it has no assignment to give
to said security guards. But if the security
guards are placed on a ''floating status" for
more than 6 months, the security guards may
consider themselves as having been
dismissed. (1999 Bar Question)

UNIVERSITY OF SANTO TOMAS

If'acu{taa de (])erecno CiviC
LABOR STANDARDS: CONDITIONS
Q:Lacson was one of more than 100 Ees
who were terminated from employment due
to the closure of LBM Construction
Corporation. LBM was a sister company of
Lastimoso Construction, Inc. and RL Realty
& Dev't Corp. All 3 entities formed what
came to be known as the Lastimoso Group
of Companies. The 3 corporations were
owned and controlled by members of the
Lastimoso family; their incorporators and
directors all belonged to the Lastimoso
family. The 3 corporations were engaged in
the same line of business, under one
management, and used the same
equipment including manpower services.
Lacson and his co-Ees filed a complaint
with the Labor Arbiter against LBM, RL
Realty and Lastimoso Construction to hold
them jointly and severally liable for
backwages and separation pay. Lastimoso
Construction, Inc. RL Realty & be used in reaching such end.
Development Corporation interposed a
Motion to Dismiss contending that they are
juridical entitles with distinct and separate
personalities from LBM Construction
Corporation and therefore, they cannot be
held jointly and severally liable for the
money claims of workers who are not their
Ees. Rule on the motion to dismiSS. Should
it be granted or denied? Why?
A: It is very clear that even if LBM
Construction company, Lastimoso
Construction Company, Inc. and RL Realty &
Dev't Corp. all belong to the Lastimoso family
and are engaged in the same line of business
under one management and used the same
equipment including manpower services, these
corporations were separate juridical entities.
Thus, only the LBM Construction Corp. is the
Er of Teofilo Lacson. The other corporation do
not have any Er-Ee relations with Lacson. The
case in question does not include any fact that
would justify piercing the veil of corporate
fiction of the other corporations in order to
protect the rights of workers. In a case
(Concept Builders, Inc. v. NLRC, G.R. No.
108734, May 29, 1996) the SC ruled that it is a
fundamental principle of corporation law that a
corporation is an entity separate and distinct
from its stockholders and from other
corporations to which it may be connected. But
this separate and distinct personality of a
corporation is merely a fiction created by law
for convenience and to promote justice. So,
when the notion of separate juridical
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, this separate personality of the
corporation maybe disregarded or the veil of
28
OF EMPLOYMENT: HOURS OF WORK
corporate fiction pierced. (1999 Bar
Question)
Q: What factors determine the existence of
an Er-Ee relationship?
A: The "four-fold test":
1. Selection and engagement of the
employee;
2. Payment of wages;
3. Power of dismissal; and
4. Power of control. (The Labor Code
with Comments and Cases 2007,
AzucenIJ, Vol I, p. 158)
Q: What is control test?
A: 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
Note: However, in certain cases the control test
is not sufficientto give a complete picture of the
relationship between the parties, owing to the
complexityof such a relationship where several
positions have been held by the worker. The
better approach is to adopt the two-tiered test.
(Francisco vs. NLRC, G.R. No. 170087, Aug. 31,
2006)
Q: What is the two-tiered test?
A:
1. The putative Er's power to control the
Ee 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.
Note: This two-tieredtest would provideus with a
framework of analysis, which would take into
consideration the totality of circumstances
surroundingthe true nature of the relationship
between the parties. This is especially
appropriatein this case where there is no written
agreement or terms of reference to base the
relationshipon 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. (Francisco vs.
NLRC, GR. No. 170087, Aug. 31, 2006)
Q: What is the proper standard for
economic dependence?
A: The proper standard is whether the worker
is dependent on the alleged employer for his
continued employment in that line of business
 UST GOLDEN NOTES 2010

Q: What determines the existence of an Q: Who are managerial Ees?

employment relationship?
A: Those whose primary duty consists of the
A: It is determined by law and not by contract. management of the establishment in which
Whether or not an Er-Ee relationship exists they are employed or a department or
between the parties is a question of fact. In subdivision thereof, and other officers or
this regard, the findings of the NLRC are members of the managerial staff.
accorded not only respect but finality if
supported by evidence. They must meet all of the ff. conditions,
namely:
Note: Taxi or jeepney drivers under the 1. Primary duty: management of the
"boundary" system are Ee's of tl;1.e
taxi or jeepney establishment in which they are
owners/operators; so also the" passenger bus employed or of a department or sub-
drivers and conductors. (Jardin vs. NLRC and division thereof;
Goodman Taxi, G.R. No. 119268, Feb. 23, 2000) 2. Customarily or regularly direct the
work of 2 or more Ees
Q: The employment contract stipulates that 3. Has the authority to hire or fire other
there is no Er-Ee relationship between the
Ees of lower rank; or their
parties. Is that valid?
suggestions and recommendations
as to the hiring and firing and as to
A: No. The existence of an Er-Ee relation is a
the promotion or any change of status
question of law and being such, it cannot be
of other Ees are given particular
made the subject of agreement.' (Tabas v. weight.
California Manufacturing Co., G.R. No. L-
4. Execute under general supervision
80680, Jan. 26, 1989)
work along specialized or technical
lines requmnq special training,
Q: Banco de Manila and the Ang Husay experience, or knowledge
Janitorial and Pest Control Agency entered 5. Execute under general supervision
into an Independent Contractor Agreement
special assignment and tasks; and
with the usual stipulations: specifically, the 6. Do not devote more than 20% of their
absence of Er-Ee relationship, and the
hours worked to activities which are
relief from liability clauses. Can the bank,
not directly and closely related to
as a client, and the agency, as an
performance of the work described.
independent contractor, stipulate that no (Art. 82[2])
Er-Ee relationship exists between the bank
and the Ees of the Agency who may be
Q: Why are managerial Ees not covered?
assigned to work in the Bank? Reason.
A: They are employed by reason of their
A: Yes, they can stipulate provided the
special training, expertise or knowledge and
relationship is job contracting. However the
for positions requiring the exercise of
stipulation cannot prevail over the facts and
discretion and independent judgment. Value of
the laws. The existence of Er-Ee relationship is
work cannot be measured in terms of hours.
determined by facts and law and not by
stipulation of the parties. (Insular Life
Q: Who are field personnel?
Assurance Co.. Ltd. v. NLRC, G.R. No.
119930, March 12,1998)
A: They are:
1. non-agricultural em ployees
Q: Who are government employees (Ees)?
2. who regularly perform their duties
3. away from the principal place of
A: They are Ees of the:
business or branch office of the
1. National Government
em ployer; and
2. Any of its political subdivisions
4. whose actual hours of work in the
3. Including those employed in GOCCs
field cannot be determined with
with original charters.
reasonable certainty.

Q: What law governs government Ees?

A: The Civil Service Law, rules and

regulations.

UNIVERSITY OF SANTO TOMAS

PacuCtaa de <Derecno CiviC
LABOR STANDARDS: CONDITIONS OF EMPLOYMENT: HOURS OF WORK

Q: Who are workers paid by results? , ART. 83. NORMAL HOURS OF WORK

A: They are: Q: What is the normal hours of work of an

1. paid based on the work completed; Ee?
and
2. not on the time spent in working A: It should not exceed 8 hours in a general
3. including those who are paid on working day.
piece-work, 'takay", "pakiaw", or task
basis if their output rates are in Note: Only the maximum is prescribed, not the
accordance with the standards minimum. Part-time work is therefore not
prescribed. prohibited.

Q: Who are domestic helpers and persons Q: Can the normal. hours of work be
in the personal service of another? shortened or cornpressed?

A: Those who: A: Yes.

1. perform services in the employers
(Er) home which are usually Q: What is a compressed workweek?
necessary or desirable for the
maintenance or enjoyment thereof; or A: The normal workweek is reduced to less
. 2. minister to the personal comfort, than 6 days but the total number of work-hours
convenience or safety of the Er as of 48 hours per week shall remain. The normal
well as the members of his Ers workday is increased to more than 8 hours but
household. not to exceed 12 hours, without corresponding
overtime premium. The concept can be
Q: A house personnel was hired by a adjusted accordingly depending on the normal
ranking company official to maintain a staff workweek of the company. (Department
house provided for the official. The Advisory Order No.2, Series of 2009)
personnel is being paid by the company
itself. Is the house personnel a domestic Q: When is the implementation of a
servant of the company official? compressed work week valid?

A: No, the personnel is not a domestic helper A: The validity of the reduction of working
but a regular employee of the company. hours can be upheld when the arrangement is
temporary, it is a more humane solution
Q: What are the 3 groups of employees instead of a retrenchment of personnel, there
(Ees) under the LC? is notice and consultations with the workers
A: and supervisors, a consensus is reached on
1. Managerial Ee - One who is vested how to deal with deteriorating economic
with the powers or prerogatives to lay conditions and it is sufficiently proven that the
down and execute management company was suffering from losses. Under the
policies and/or to hire, transfer, Bureau of Working Conditions' bulletin, a
suspend, lay-off, recall, discharge, reduction of the number of regular working
assign or discipline Ees. days is valid where, the arrangement is
2. Supervisory Ee - those who in the resorted to by the employer to prevent serious
interest of the Er, effectively losses due to causes beyond his control, such
recommend such managerial actions as when there is a substantial slump in the
if the exercise of such authority is not demand for his goods or services or when
merely routinary or clerical in nature there is lack of raw materials. There is one
but requires the use of independent main consideration in determining the validity
judgment. of reduction of working hours - that the
3. Rank-and-File Ee • all Ees not falling company was suffering from losses. A year of
within any of the above definitions. financial losses would not justify a reduced
(Art. 212{mJ) workweek. (Linton Commercial v. Hel/era,
G.R. No. 163147, October 10,2007)

30
 UST GOLDEN NOTES 2010

Q: Under what conditions may a Q: What are regular working days?

"compressed work week" schedule be
legally authorized as an exception to the A: It should not be more than 5 days in a
"S-hour a day" requirement under the LC? workweek. It may begin at any hour and on
any day, including Saturday or Sunday,
A: designated by the employer.
1. The Ee voluntarily agrees to it
2. There is no diminution in their weekly Q: Who are health personnel?
or monthly take home payor fringe
benefits A: Includes resident physicians, nurses,
3. The benefits are more than or at least nutritionists, dieticians, pharmacists, social
commensurate or equal to what is workers, laboratory technicians, paramedical
due the Ees without the compressed technicians, psychologists, midwives,
work week attendants and all other hospital or clinic
4. OT pay will be due and demandable personnel.
when they are required to work on
those days which should have Q: What are the hours of work of health
ceased to be working days because personnel?
of the compressed work week
schedule. A:
5. No strenuous physical exertion or that GR: 8 hours/5 days (40-hour work week),
they are given adequate rest periods. exclusive of time for meals.
6. It must be for a temporary duration as
determined by the DOLE. (2005 Bar XPN: Where the exigencies of the service
Question) require that such personnel work for 6 days
or 48 hours, they shall be entitled to an
Q: What are the requisites lor adoption of additional compensation of at least 30% of
compressed workweek? their regular wage for work on the s"
day.

A: Note: 40-hour work week does not apply if there

1. The Er shall notify the DOLR through is a training agreement between the resident
the Regional Office which has physician and the hospital and the training
jurisdiction over the workplace, of the program is duly accredited or approved by
adoption of compressed workweek. appropriate government agency.
2. The notice shall be in Report Form
attached to the advisory. Q: Who are covered by the 40-hour work
3. The Regional Office shall conduct an week?
ocular visit to validate whether the
adoption of the flexible work A:
arrangements is in accordance with 1. Health personnel in cities and
this issuance. (Department Advisory municipalities with a population of at
Order No.2, Series of 2009) least 1 million; or
2. Hospitals and clinics with a bed
Q: Is an employer (Er) obliged to pay an capacity of at least 100
employee (Ee), who rendered less than 8
hours of work, the wages due for S hours- Note: Art. 83(2) do not require hospital to pay the
work? Ees a full weekly salary with paid 2 days off.
(San Juan de Dios Ees Assoc.-AFW et al. VS.
A: NLRC, G.R. No. 126383, Nov. 28, 1997)
GR: No, following the principle of "a fair
day's wage for a fair day's labor" Q: Distinguish work day from calendar
day?
XPN: If by voluntary practice or policy, the
Er, for a considerable period of time, has A:
been paying his Ees wages due for 8 hours WORK DAY . CALENDAR DAY
although their work shift is less than 8 It refers to 24 hr. period
It refers to the 24
hours. commencing from the time
hr. period
an Ee regularly starts to
commencing at 12
work regardless of
midnight and
whether the work is
ending at 11:59 pm
continuous or broken.

UNIVERSITY OF SANTO TOMAS

Pacu{taa de Verecno Civi(
 LABOR STANDARDS: CONDITIONS OF EMPLOYMENT: HOURS WORKED

, ART. 84. HOURS WORKED Q: When is an Ee considered working while

on call?
Q: What are considered hours worked?
A: When Ee is required to remain on call in the
A: Ers premises or so close thereto that he
1. All time during which an Ee is cannot use the time effectively and gainfully for
required to be: his own purpose.
a. On duty, or
b. At the Ers premises, or Q: When is waiting time considered
c. At a prescribed workplace working time?
2. All time during which an Ee is
suffered or permitted to work. (Sec. 3, A:
Rule I, Book III, IRR) 1. If waiting is an integral part of his
work or »
Q: What are the principles in determining 2. The Ee is required or engaged by the
hours worked? Er to wait (engaged to wait)

Note: The controlling factor is whether waiting

A:
1. All hours which the Ee is required to
give to his Er regardless of whether
or not such hours are spent in
productive labor or involve physical or
mental exertion.
2. Rest period is excluded from hours
worked, even if Ee does not leave his
workplace, it being enough that:
a. He stops working
b. May rest completely and
c. May leave his workplace, to
go elsewhere, whether
within or outside the
premises of the workplace
3. All time spent for work is considered
hours worked if:
a. The work performed was
necessary
b. If it benefited the Er
c. Or the Ee could not abandon
his work at the end of his
normal working hours
because he had no
replacement
d. Provided, the work was with
the knowledge of his Er or
immediate supervisor
4. The time during which an Ee is
inactive by reasons of interruptions in
his work beyond his control shall be
considered working time:
a. If the imminence of the
resumption of the work
requires the Ees presence
at the place of work or
b. If the interval is too brief to
be utilized effectively and
gainfully in the Ees own
interest. (Sec. 4, Rule I,
Book III, IRR)
time spent in idleness is so spent predominantly
for the Er's benefit or for the Ee.
Q: When is waiting time not considered
working time?
A: When the Ee is waiting to be engaged: idle
time is not working time; it is not compensable.
Q: Lito and Bong were employed as truck
drivers of Line Movers, Inc. Usually, Lito is
required by the personnel manager to just
stay at the head office after office hours
because he could be called to drive the
trucks. While at the head office, Lito merely
waits in the manager's reception room. On
the other hand, Bong is allowed to go home
after office hours but could be contacted
whenever his service as driver becomes
necessary. Would the hours that Lito and
Bong are on call be considered
compensable working hours?
A: The hours of Lito and Bong while on call
can be considered compensable hours. The
applicable rule is: "An Ee who is required to
remain on call in the Er's premises or so close
thereto that he cannot use the time
effectively and gainfully for his own purpose
shall be considered as working while on can.
An Ee who is not required to leave word at his
home or with company officials where be may
be reached is not working while on cal!." Here,
Bong is required to stay at the office after
office hours so he could be called to drive the
trucks of the Company. As for Bong, he is
required to keep his cellular phone so that he
could be contacted whenever his services as
driver as needed. Thus, the waiting time of Lito
and Bong should be considered are
compensable hours. (1997 Bar Question)
Note: It could be argued that in the case of Bong
who is not required to stay in the office but is

32
 UST GOLDEN NOTES 2010

allowed to go home, if he is not actually asked by Q: What are the conditions in order for
cellular phone to report to the office to drive a car, lectures, meetings and training programs
he can use his time effectively and gainfully to his to be not considered as working time?
own purpose, thus, the time that he is at home
may mean that there are not compensable hours. A: All of the ft. conditions must be present:
1. Attendance is outside of the
Q: When is travel time considered working employers regular working hours
time? 2. Attendance is in fact voluntary and
3. The employee does not perform any
A: productive work during such
1. Travel from home to work attendance.

GR: Normal travel frofh horne to work Q: Are regular full-time teachers entitled to
is not working time. salary and COLA during semestral breaks?

XPNS: A: Yes. It is a form of interruption beyond their

;-Emergency call outside his control. (University of Pangasinan Faculty
regular working hours where he Union vs. University of Pangasinan, G.R No.
is required to travel to his regular L-63122, Feb. 20, 1984)
place of business or some other
work site. Q: What are the guidelines on power
b. Done through a conveyance interruptions?
provided by the employer (Er).
c. Done under the supervision and A:
control of the Er. 1. Brownouts of short duration but not
d. Done under vexing and exceeding 20 minutes shall be
dangerous circumstance. treated as worked or compensable
hours whether used productively by
2. Travel that is all in a day's work - the employees (Ees) or not.
time spent in travel as part of the 2. Brownouts running for more than 20
employees (Ees) principal activity minutes may not be treated as hours
worked provided any of the following
e.g. travel from job site to job site conditions are present:
during the work day, must be counted a. The Ees can leave their
as working hours. workplace or go elsewhere within
or without the work premises; or
3. Travel away from home b. The Ees can use the time
effectively for their own interest.
GR:
a Travel that requires. an overnight
3. In each case, the Er may extend the
working hours of his Ees outside the
stay on the part of the Ee when it regular schedules to compensate for
cuts across the Ees workday is the loss of productive man-hours
clearly working time. without being liable for OT pay.
b. The time is not only hours 4. lndustrial enterprises with one or two
worked on regular workdays but work shifts may adopt any of the work
also during corresponding shift prescribed for enterprises with 3
working hours on non-working work shifts to prevent serious loss or
days. Outside of these regular damage to materials, machineries, or
working hours, travel away from equipment that may result case of
home is not considered working power interruptions. (Policy
time. Instruction No. 36)

XPN: During meal period or when Ee

is permitted to sleep in adequate
facilities fumished by the Er.

UNIVERSITY OF SANTO TOMAS JO...IJJ.. 33

PacuCtad de <Derecho CiviC
 LABOR STANDARDS: CONDITIONS OF EMPLOYMENT: MEAL PERIODS

ART. 85. MEAL P-ERIODS ' which the Er would otherwise

suffer. (Sec. 7, Rule I, Book III,
Q: What is the duration of the meal period? IRR)

A: Every Er shall give his Ees not less than 60
minutes or 1 hour time-off for regular meals.
Q: Is the meal period compensable?
A: Being time-off, it is not compensable.
Employee must be completely relieved from
duty.
Q: When is the meal period considered
compensable?
A: It is compensable where the lunch period or
mealtime:
1. Is predominantly spent for the
employers benefit or
2. Where it is less than 20 minutes.
Note: Where during meal period, the taborers are
required to stand by for emergency work, or
where the meal hour is not one of complete rest,
such is considered OT. (Pan Am vs. Pan Am Ees
Association, G.R. No. L-16275, Feb. 23, 1961)
Rest periods or coffee breaks running from 5 to
20 minutes shall be considered as compensable
working time. (Sec. 7, Rule f, Book III, IRR)
Q: Are meal periods provided during
work compensable?
A: Yes, since the 1 hour meal period (non-
compensable) is not given during OT work
because the latter is usually for a short period
and to deduct from the same would reduce to
nothing the Ees OT work. Thus, the 1 hour
break for meals during OT should be treated
as compensable.
2. Not Compensable - Ee requested for
the shorter meal time so that he can
leave work earlier than the previously
established schedule. Requisites:
a. Ees voluntarily agree in writing
and are willing to waive OT pay
for the shortened meal period;
b. No diminution in the salary and
other fringe benefits of the Ees
which are existing before the
effectivity of the shortened meal
period;
c. Work of the Ees does not involve
strenuous physical exertion and
they are provided with adequate
coffee breaks in the morning and
afternoon;
d. Value of the benefits derived by
the Ees from the proposed work
arrangements is equal to or
commensurate with the
compensation due them for the
shortened meal period as well as
the OT pay for 30 minutes as
determined by the Ees
concerned;
e. OT pay will become due and
demandable after the new time
OT schedule
f. Arrangement is of temporary
duration.

Q: What are the instances where meal

periods shortened to not less than 20
minutes is compensable or not
compensable?

A:
1. Compensable - At the instance of
Employer, when:
a. Work is non-manual in nature or
does not involve strenuous
physical exertion;
b. Establishment regularly operates
less than 16 hours a day;
c. Work is necessary to prevent
serious loss of perishable goods.
d. Actual or impending emergency
or there is urgent work to be
performed on machineries and
equipment to avoid serious loss

34
 UST GOLDEN NOTES 2010

. ~-~ART. Jl!)", flI_IGHTSH~Ft DIFFERENTIAL '. A: Yes. Under Art 86 of the Labor Code, NSD
shall be paid to every Ee for work performed
between 10:00 o'clock in the evening to six
Q: What is night shift differential (NSD)?
o'clock in the morning. Therefore, Goma is
entitled to nightshift differential for work
A: It is additional compensation of not less
performed from 10:00 pm until 6:00 am of the
than 10% of an Ees regular wage for every
day following, but not from 6:00 am to 7:00 am
hour worked between 10:00 pm to 6:00 am,
of the same day. (2002 Bar Question)
whether or not such period is part of the
worker's regular shift.

Q: Who are entitled to NSD?

~l ,
A: GR: NSD applies to all employeesIfies).

XPN:
1. Ees of the Gov't and any of its
political subdivisions, including
GOGG's.
2. Retail and service establishments
regularly employing not more than 5
workers.
3. Includes task and contract basis
4. Domestic helpers and persons in the
personal service of another.
5. Field personnel and Ees whose time
and performance is unsupervised by
the employer
6. Managerial Ees

Q: Mayan employee waive the right to

NSD?

A: •..."...,.
.'~ i:~.·~ .•
GR: No, such waiver is against public
policy. (Mercury Drug Co., Inc. vs. Dayao,
Academics Committee
et al., G.R. No. L-30452, Sep. 30, 1982)
Chairperson: Abraham D. Genuino II
XPN: Higher/better benefits Vice-Chair for Academics: Jeannie I\. Laurentino
Via-Cbar for Arbnin & Finance: Aissa Celine H. Luna
Q: Distinguish NSD from overtime pay. Vice-Chair jar Layout & Design: Loise Rae G. Naval

A: Labor Law Committee

NSD' - OVERTIME PAY Subject Head' Lester Jay Alan E. Flores II
Payment for work .Assistant Subject Head' Domingo B. Diviva V
Payment for the
done during the
excess of the regular
night Members:
8-hr work
(10pm-6am) Rene Francis P. Batalla
25% or 30% of basic Diane Camilla R. Borja
10 % of basic wage
wage
Maria Kristina L Dacayo-Garcia
Christian Nino i\. Diaz
Note: When the Ee's shift falls at nighttime, the
Angelo S. Diokno
receipt for OT pay shall not preclude the right to
receive NSD. Genesis R. Fulgencio
Jeanelle C Lee
Q: As a tireman in a gasoline station, open Jemuel Paolo M. Lobo
24 hours a day with only 5 employees, Andrew W. Montesa
Goma worked from 10:00 P.M. until 7:00 Maria Maica i\ngehka Roman
A.M. of the following day. He claims he is
entitled to NSD. Is he correct? Explain •• "~ .... ~ •.••.•••••••.• 7

briefly.

UNIVERSITY OF
PacuCtati
SANTO TOM.A~
tie (/)ereclio CunC
~;!
'9
35
 LABOR STANDARDS: CONDITIONS
. ART. 87. OVERTIME WORK
Q: What is overtime work (OT)?
A: Work performed beyond 8 hours within the
worker's 24 hour workday.
Note: Express instruction from the employer (Er)
to the employee (Ee) to render OT work is not
required for the Ee to be entitled to OT pay; it is
sufficient that the Ee is permitted or suffered to
work. However, written authority after office hours
during rest days and holidays are required for
entitlement to compensation.
Q: What is a work day?
A: The 24-hour period which commences from
the time the employee regularly starts to work
e.g. If the worker starts to work 8 am today,
the workday is from 8 am today up to 8am
tomorrow.
Note: Minimum normal working hours fixed by
law need not be continuous to constitute the legal
working day.
Q: Distinguish OT from premium pay.
A:
~. OT PAY' . PREMIUM PAY
Additional compensation for
Additional work performed within 8 hours
compensation on days when normally he
for work should not be working (on
non-working days, such as
performed
beyond 8 hours rest days and special days.)
on ordinary
days (within the But additional compensation
worker's 24- for work rendered in excess of
hour workday) 8 hours during these days is
also considered OT pay.
Q: What are the OT pay rates?
Rate of the first 8 hours worked on
plus at least30% of the regular wage (RW):
if done on a special holiday OR rest day:
30% of 130% of RW
If done on a special holiday AND rest day:
30% of 150% of RW
if done on a regular holiday:
30% of 200% of RW
36
OF EMPLOYMENT: OVERTIME
Q: What is the rationale behind OT pay?
A: Employee is made to work longer than what
is commensurate with his agreed
compensation for the statutory fixed or
voluntarily agreed hours of labor he is
supposed to do. (PNB VS. PEMA and CIR,
G.R. No. L-30279, July 30, 1982)
Discourages the employer (Er) from requiring
such work thus protecting the health and well-
being of the worker, and also tend to remedy
unemployment by encouraging Ers to employ
others workers c. to do what cannot be
accomplished during the normal hours of work.
Q: Can the right to OT pay be waived?
A: .
GR: The right to OT pay cannot be waived
as it is governed by law and not merely by
the agreement of the parties.
XPN:
1. If the waiver is done in exchange for
certain valuable .benefits and
privileges, which may' even exceed
the OT Pay, waiver may be permitted.
2. Compressed work week
.
Q: What is the basis of computing the OT
pay and additional remuneration?
A: Regular wage-includes the cash wage only,
without deduction on account of facilities
provided by the employer. (Art. 90)
Q: In lieu of OT pay, the employee was
given permission to go on leave on some
other day, is that valid?
A: No. Permission given to the employee (Ee)
to go on leave on some other day of the week
shall NOT exempt the employer from paying
the additional compensation required because
it would prejudice the Ee, for he will be
deprived of the additional pay for the OT work
he has rendered and which is utilized to offset
the undertime he may have incurred.
Undertime could be charged against the Ees
accrued leave.
 UST GOLDEN NOTES 2010

Q: Socorro is a clerk-typist in the Hospicio rates of pay on the thesis that they were
de San Jose, a charitable institution not required to complete, and they did not
dependent for its existence on in fact complete, the B-hour work period
contributions and donations from well daily from Monday through Friday. Given
wishers. She renders work 11 hours a day the circumstances, the Er contended that
but has not been given O'T pay since her the Ees were not entitled to OT
place of work is a charitable institution. Is compensation, i.e., with premium rates of
Socorro entitled to O'T pay? Explain briefly. pay. Decide the controversy.

A: Yes. Socorro is entitled to OT A: The Er is correct. While Art. 88 of the LC

compensation. She does not fal! under any of
the exceptions to the covera9;.~ of ~rt. 82,
under the provisions of hours of work. The
Labor Code is equally applicable to non-profit
institutions. A covered Ee who works beyond 8
hours is entitled to OT compensation. (2002
Bar Question)
Q: Flores applied for the position of driver
in the motor-pool of Gold Company, a
multinational corporation. Danilo was
informed that he would frequently be
working aT as he would have to drive for
the company's executives even beyond the
ordinary 8-hour work day. He was provided
with a contract of employment wherein he
would be paid a monthly rate- equivalent to
35 times his daily wage, regular sick and
vacation leaves, 5 day-leave with pay every
month and time off with pay when the
company's executives using the cars do
not need Danilo's service for more than
eight hours a day, in lieu of OT. Are the
above provisions of the contract of
employment in conformity with, or violative
of, the law?
A: Except for the provision that Oanilo shall
have time off with pay when the company's
executives using the cars do not need Oanilo's
service for more than 8 hours a day, in lieu of
OT, the provisions of the contract of
employment of Oanilo are not violative of any
labor law because they instead improve upon
the present provisions of pertinent labor laws.
ART: 88. UNDERTIME N,OTOFFSET BY or
Q: Can undertime (UT) offset OT?
A: No, UT work on any particular day shall not
be offset by OT work on any other day.
clearly provides that undertime work on any
other particular day shall not be offset by
overtime work on any other day, this rule is
inapplicable in this case pertaining to Saturday
work which in reality does not constitute OT
work as Saturday is still a working day under
the law and there is no CBA stipulation against
it. (2003 Bar Question)
ART.'89. EMERG-EN€Y OVERTIME WORK
Q: Mayan employee be compelled to
render O'I work?
A:
GR: No. OT work is voluntary.
XPN: Compulsory OT work in any of the
following situations:
1. Urgent work to be performed on
machines and installations in order to
avoid serious loss or damage to the
Er or some other cause of similar
nature.
2. Work is necessary to prevent loss or
damage to perishable goods.
3. In case of imminent danger to the
public safety due to an actual or
impending emergency in the locality
caused by serious accidents, fire,
flood, typhoon, earthquake, epidemic
or other disaster or calamity.
4. Country is at war,
5. Completion or continuation of the
work started before the 8th hour is
necessary to prevent serious
obstruction or prejudice to the
business operations of the Er
6. Any other national or local emergency
has been declared
7. Necessary to prevent loss of life or
property.

Q: A case against an employer (Er) Note: There should be payment of additional

company was filed charging it with having compensation. Ees refusal to obey the order of
violated the prohibition against offsetting the Er constitutes insubordination for which he
UT for aT work on another day. The may be subjected to disciplinary action.
complainants were able to show that,
pursuant to the CBA, employees (Ees) of
the union had been required to work "O'I"
on Saturday but were paid only at regular

UNIVERSITY OF SANTO TOMAS

Pacu(taa ae <Derecfio Civif
 LABOR STANDARDS: CONDITIONS OF EMPLOYMENT: OVERTIME

Q: The employment contract requires work

for more than 8 hours a day with a fixed·
wage inclusive of OT pay. Is that valid?

A: It depends.
1. When the contract of employment
requires work for more than 8 hours
at specific wages per day, without
providing for a fixed hourly rate or
that the daily wages include OT pay,
said wages cannot be considered as
including OT compensation. (Manila
Terminal Go. vs. GIR, et al., 91 Phil.,
625)
2. However, the employment contract
may provide for a "built-in" OT pay.
Because of this, non-payment of OT
pay by the employer is valid. (Eng'g
Equipment vs. Minister of Labor, G.R.
No. L-64967, Sep. 23, 1985)

Academics Committee
Chairperson: Abraham D. Genuino II
Vice-Chair for Academics: Jeannie A. Laurentino
Vice-Chair for Admin & Finance: Aissa Celine H. Luna
Vice-Chair for Lqout & Design: Loise Rae G. Naval

Labor Law Committee

Subject Head' Lester Jay Alan E. Flores II
Assistant Subject Head' Domingo B. Diviva V

Members:
Rene Francis P. Batalla
Diane Camilla R. Borja
Maria Kristina L. Dacayo-Garcia
Christian Nino A. Diaz
Angelo S. Diokno
Genesis R. Fulgencio
J eanelle C. Lee
] emuel Paolo M. Lobo
Andrew W. Montesa
Maria Maica AngeJika Roman

38
 UST GOL1)EN NOTES 2010

CHAPTER II ART. 92. EMPLOYER MAY REQUIRE

WEEKLY REST PERIODS -
WORK ON A REST DAY
- --
- ART~-9C RIGI:rt-foWEEKLY REST D~-
Q: Can an Ee be compelled to work on his'
Q: What is the right to weekly rest day rest day?
(WRD)?
A:
A: Every employer shall give his employees a GR: No.
rest period of not less than 24 consecutive
hours after every 6 consecutive normal work XPN:
days. (Sec. 3, Rule III, Book III, IRR) 1. Urgent work to be performed on the
machinery, equipment or installation,
Q: What is the scope of WRD? to avoid serious loss which the Er
would otherwise suffer;
A: It shall apply to all employers whether 2. Nature of work requires continuous
operating for profit or not, including public operations for 7 days in a week or
utilities operated by private persons. (Sec. 1, more and stoppage of the work may
Rule III, Book III, IRR) result in irreparable injury or loss to
the Er;
Q: Who determines the WRD? 3. Abnormal pressure of work due to
special circumstances, where the Er
A: cannot be ordinarily expected to
GR: Er shall determine and schedule the resort to other measures;
WRD of his Ee. 4. Actual or impending emergencies
(serious accident, fire, flood, typhoon,
XPNs: earthquake, etc.)
1. CSA 5. Prevent loss or damage to perishable
2. Rules and regulations as the SLE goods;
provides 6. Analogous or similar circumstances
3. Preference of employee (Ee) based as determined by the SLE;
on religious grounds - Ee shall make 7. Work is necessary to avail of
known his preference in writing at favorable weather or environmental
least 7 DAYS before the desired conditions where performance or
effectivity of the initial rest day so quality of work is dependent thereon.
preferred. (Sec. 4(1), Rule III, Book
III, IRR) Q. What is the rule when an Ee volunteers
to work on his rest day under other
XPN to XPN no. 3: employer (Er) Circumstances?
may schedule the WRD of his choice
for at least 2 days in a month if A: He shall express it in writing subject to
preference will inevitably result in: additional compensation. (Sec. 6[2J, Rule III,
a. serious prejudice to the Book III, IRR)
operations of the undertaking
and
b. the Er cannot normally be ART. 93. COMPENSATION FOR REST
expected to resort to other DAY, SUNDAY or HOLIDAY WORK
remedial measures. (Sec. 4(2), (SPECIA[ HOLIDAY)
Rule III, Book III, IRR)
Q: What is premium pay?
Q: When should employees (Ees) be
informed of their schedule of WRD? A: It is the additional compensation for work
rendered by the employee on days when
A: Er shall make known rest period by means normally he should not be working such as
of: special holidays and weekly rest days.
1. Written notice
2. Posted conspicuously in the Q: Can the Er and Ee agree on the rate of
workplace premium pay other than that provided by
3. At least 1 week before it becomes law?
effective. (Sec. 5, Rule III, Book III.
IRR) A: Yes. Nothing shall prevent the Er and his
Ee or their representatives from entering into

~i.
any agreement with terms m9re favorable to

UNIVERSiTY OF SANTO TOMAS 39

PacuCtaa ae CDerecno CiviC . ,(;1' •
 LABOR STANDARDS: CONDITIONS OF EMPLOYMENT: REST DAY

the Ees Provided: It shall not be used to work on Sundays and holidays, which Jose
diminish any benefit granted to the Ees under signed. Is such a waiver binding on Jose?
existing laws, agreements and voluntary Er Explain.
practices. (Sec. 9, Rule III, Book III, IRR)
A: As long as the annual compensation is an
Q: What are the rates of compensation for amount that is not less than what Jose should
rest day, Sunday or holiday work? receive for all the days that he works, plus the
extra compensation that he should receive for
A: work on his weekly rest WRD and for night
RATES OF differential pay for late night work, considering
INSTANCES ADDITIONAL the laws and wage orders providing for
COMPENSATION minimum wages, and the pertinent provisions
Work on a scheduled + 30% Premium Pay of the LC, then the waiver that Jose signed is
rest day (PP) of 100% regular' binding on him, for he is not really waiving any
wage (RW). (Sec. 7, right under Labor Law. It is not contrary to law,
Rule III, Book III, IRR) morals, good customs, public order or public
Work has no regular policy for an Er and Ee to enter into a contract
workdays and rest + 30% PP of 100% RW . where the Ees compensation that is agreed
days . (Sec. 7, Rule III, Book upon already includes all the amounts he is to
(If performed on receive for OT work and for work on weekly
III,IRR
Sundays and rest days and holidays and for night differential
Holidays) pay for late night work. (1996 Bar Question)
Work on a Sunday + 30% PP of 100% RW.
(If Ee's scheduled (Sec. 7, Rule III, Book
rest day) III,IRR)
1st 8 hrs; + 30% PP of
100% RW
Work performed on
Excess of 8 hrs: + 30%
any Special Holiday of hourly rate on said
date. (M.C. No. 10,
Series of 2004)
1st 8 hrs: + 50% PP of
100% regular wage
Work performed on a
Special Holiday and
Excess of 8 hrs: + 30%
same day is the of hourly rate on said Academics Committee
scheduled rest day date. (M.C. No. 10, Chairperson: Abraham D. Genuino II
Series of 2004) Vice-Chair for Academics: Jeannie "-\.Laurentino
Ee is only entitled to Vice-Chair for Admin & Finance: Aissa Cehne H. Luna
his basic rate. No PP is Vice-Chair for Layou: & Design: Loise Rae G. Naval
required.
Work performed on a Labor Law Committee
Special Working Reason: Work
performed is considered Subject Head' Lester Jay Alan E. Flores II
Holiday
work on ordinary Assistant Subject Head' Domingo B. Diviva V
working days. (Sec. 7,
Rule III, Book III, IRR) Members:
Rene Francis P. Batalla
Note: Holiday work provided under Art.93 Diane Camilla R. Borja
pertains to special holidays or special days. Maria Kristina L. Dacayo-Garcia
Christian Nino A. Diaz
Q: Jose applied with Mercure Drug
Angelo S. Diokno
Company for the position of Sales Clerk.
Genesis R. Fulgencic
Mercure Drug Company maintains a chain
of drug stores that are open everyday till ] eanelle C. Lee
late at night. Jose was informed that he had ] emuel Paolo M. Lobe
to work on Sundays and holidays at night Andrew W. Montesa
as part of the regular course of Maria Maica Angelika Romaz
employment. He was presented with a
contract of employment setting forth his
compensation on an annual basis with an
express waiver of extra compensation for

40
 UST GOLDEN NOTES 2010

. ".~ ~-CHAPTERIJI' --"~-,,_

0
~ BEGUt:~HOt:IDAYS. DATE
~HOUOAYS, S ENTIVE LEAVES AND New Year's Day January 1
';". S .ARGES Maundy Thursday April 1
Good Friday April 2
Eid'IFitr Movable Date
Monday nearest April
8raw ng Kagitingan
Q: What is holiday pay (HP)? 9
Monday nearest May
,babor Day
1
A: It is a premium given to employees (Ees)
Monday nearest June
pursuant to law even if he has' not been independence Day
12
suffered to work on a regular holiday. It is
Last Monday of
limited to the 11 regular, also called legal, National Heroes Day
August (Aug. 30)
holidays listed by law. The employee (Ee)
Monday nearest Nov.
should not have been absent without pay on ~onifacio Day
30 (Nov. 29)
the working day preceeding the regular December 25
Christmas Day
holiday. Monday nearest Dec.
Bizal Day
30 (Dec.27)
Q: What are the classes of special days
(SO)? Note: RA 9492 provides that Holidays, except
those which are religious in nature, are moved to
A: the nearest Monday unless otherwise modified by
1. National Special Public Holiday law, order or proclamation. (Proc. No. 1841)
GR: Non working days
If the holiday falls on a Wednesday, the holiday
XPN: Otherwise declared by the will be observed on the Monday of the week. If
President the holiday falls on a Sunday, it will be observed
on the Monday that follows. (R.A 9492)
2. Local Special Public Holiday -
Regular working day. (LOt 814 as Q: What are Muslim Holidays (MH)?
amended by L011087)
A: The MHs, except Eid'/ Fitr, are observed in
NATIONAL SPECIAL specified Muslim areas. All private
DAYS·
All Saints Day
I DATE
November 1
corporations, offices, agencies and entities or
establishments operating within the designated
Last Day of the Year December 31 Muslim provinces and cities are required to
Monday Nearest observe MH.
August 21(RA
Ninoy Aquino Day Q: When shall Eid" Fitr andlor Eid'/ Adha
9462, July 25,
2007) be declared a national holiday?
Other days declared by
A: The proclamation declaring a national
law
December 24 holiday for the observance of Eid'l Fitr and/or
1. Special Non-working
days Eid'l Adha shall be issued:
2. Special Public 1. After the approximate date of the
Holidays Islamic holiday has been determined
3. Special National in accordance with the:
Holiday a. Islamic Calendar (Hijra) or
4. Special Holiday ( for b. Lunar Calendar or
all schools) c. Upon astronomical calculations
February 22
a. Edsa Revolution d. Whichever is possible or
(Monday nearest
Anniversary convenient.
25)
~'11f!''''1;,j:{1t'!' •••
Those declared by:
2. The Office of Muslim Affairs shall
e.g. Manila day (in inform the Office of the President on
1. Law or
Manila only) which day the holiday shall fall.
2. Ordinance \
(Sec.2, Proc. No. 1841)
Q: What are regular holidays (RH)?

A: They are compensable whether worked or

nworked subject to certain conditions. They
are also called legal holidays. The following
a-e considered regular holidays. (R.A 9492)
UNIVERS!TV OF SANTO TOMAS .•.A •••••• ~ 41
Pacu{tad de (])erecho CiviC
 LABOR STANDARDS: CONDITIONS OF EMPLOYMENT: HOLIDAY PAY

Q: Can a Christian employee (Ee) working Q: Who are entitled to HP?

within the Muslim area be compelled to
work during MH? A:
GR: All employees (Ees) are entitled.
A: No. Christians working within the Muslim (Sec. 1, Rule IV, Book III, IRR)
areas may not report for work during MH. Not
only Muslim but also Christian Ee in the XPNS:
designated provinces and cities are entitled to 1. Gov't Ees and any of its political
HP on the MH. (SMC v. CA, G.R. 146775, Jan. subdivisions, including GOCCs (with
30,2002) original charter)
2. Retail and service establishments
Q: Can a Muslim Ee working outside the regularly employing less than 10
Muslim area be compelled to work during workers
the observance of the MH? 3. Domestic helpers and persons in the
personal service of another
A: 4. Ee engaged on task or contract basis
GR: No. Muslim Ees shall be excused from or purely commission basis
work during MH without diminution of 5. Members of the Family of the Er who
salary or wages. are dependent on him for support
6. Managerial Ee and other member of
XPN: Those who are permitted or suffered the managerial staff
to work on MH are entitled to at least 100% 7. Field personnel and other Ee whose
basic pay + 100% as premium of their time and performance are
basic pay. (SMC v. CA, G.R. No. 146775, unsupervised by the Er
Jan. 30, 2002) 8. Ee paid Fixed amount for performing
work irrespective of the time
Note: RH falling within temporary or periodic consumed in the performance
shutdown and temporary cessation of work are thereof. (Sec. 1, Rule IV, Book III,
compensable. However, if the temporary or IRR)
periodic shutdown and cessation of work is due
to business reverses, the employer may not pay Q: What are retail establishments?
the RHs during such period.
A: They are engaged in the sale of goods to
Q: Distinguish RH from SO. end users for personal or household use. (e.g.
Grocery)

Q: What are service establishments?

Regular pay A: They are engaged in the sale of services to

(subject to certain individuals for their own or household use.
No Pay
conditions for daily paid
(e.g. TV repair shop)
Ee'

Q: Is an exercise of profession retail or

2x regular pay (200%) service?

A: It is neither retail nor service.

Not exclusive Q: Mayan Er require an Ee to work on RH?

A: Yes. But Ee shall be compensated twice his

regular rate.

42
 UST GOLDEN NOTES 2010

Q: What are the rates of compensation for Q: Discuss the concept of absences.
RH on Ees regular workday and RH on Ees
rest day? A:
. ~ ABSENCES
LOA with pay on the LOA without pay on the
",- daY,lmmedlatley,,~ _., day Immediately . •
'. preceding RH " r:: preceding a RH.

GR: An Ee may not be

paid the required
HP if he has not
worked on such
100% RH.
\l100%~ XPN: Where the day
e.g. 300 Php regular immediately
e.g. 300 Php (RW) GR: All covered Ees
preceding the
are entitled to HP.
holiday is a:
+ 30% of 200% 1. Non-working day
200% (NWD) in the
e.g 600 -200% of establishment or
e.g. 300- RW RW 2. The scheduled
+ 300 X 0.3 rest day (RD) of
000 = Total Wage (1W) 180 the Ee.
180+ 600= 780
Q: What is the effect in case there is a
230% temporary or periodic shutdown and
230% + 30% of temporary cessation of work?
hourly rate on said
200% + 30% of hourly
- date A:
rate on said date
TEMPORARY OR PERIOEHC SHUTDOWN and
Q: What is an important condition that TEMPORARY CESSATION OF WORK'
should be met in order to avail/receive the (Sec 7, Rule ,V, Book /I(IRR) ,

single HP? Instances Rule:

1. Yearly inventory or
A: The Ee should not have been absent 2. When the repair or RH falling within the
ithout pay on the working day preceding the cleaning of period shall be
RH. machineries is com pensated.
undertaken
Due to business reverses
Q: Distinguish between monthly paid and RH may not be paid
(cessation as authorized
daily paid Ees. by the Er
by the Sec. of Labor)

A:
Q: What are the HPs of certain employees?
Monthly Paid Ees Daily Paid Ees
One who is paid his wage One who is paid
or salary for everyday of
A:
his wage or salary
'. EMPLOYEES RULE
t e month, including rest only on those days
Private school 1. RH during semestral
ays, Sundays, regular or he actually worked,
special days, although he teachers vacations
except in cases of
does not regularly work on regular or special
(Faculty - Not entitled to HP
members of 2. RH during Christmas
these days. days, although he
colleges and vacation
does not regularly
at excluded from benefit work on these
universities ) - Shall be paid HP
of HP. HP shall not be less than his
days.
Ee paid by: average daily earnings for
1. results or the last 7 actual work days
Q: What is the effect if a legal holiday falls
2. output preceding the RH,
on a Sunday?
(Piece work Provided: HP shall not be
payment) less than the statutory
A: A legal holiday falling on a Sunday creates minimum wage rate.
legal obligation for the Er to pay extra to the May not be paid the required
::e who does not work on that day, aside from Seasonal
HP during offseason where
. e usual HP to its monthly paid Ee. Workers
they are not at work.
ellington v. Trajano, G.R. 114698, July 3, Workers having
'995) no regular work Shall be entitled to HP
days

UN IV E R SIT Y 0 F SAN ToT 0 MAS I''''''''~~ 43

PacuCtaa ae Verecno CiviC ~•.
 LABOR STANDARDS: CONDITIONS OF EMPLOYMENT: HOLIDAY PAY

Q: Are the school faculty who according to
their contracts are paid per lecture hour
entitled to unworked HP? . rendered by her. In short, the University
A:
1. If during regular holiday - No. Art. 94
of LC is silent with respect to faculty
members paid by the hour who because
of their teaching contracts are obliged to
work and consent to be paid only for work
actually done (except when an emergency
or a fortuitous event or a national need
calls for the declaration of special
holidays). RH specified as such by law are
known to both school and faculty
members as "no class days" certainly the
latter do not expect payment for said
unworked days, and this was clearly in
their minds when they entered into the
teaching contracts. (Jose Rizal College v.
NLRC, G.R. No. 65482, Dec. 1, 1987)
allegedly not an integral part of the school
year and no teaching service were actually
invoked the principle of "no work, no pay".
She seeks your advice on whether or not
she is entitled to receive her ECOLA during
semestral breaks. How would you respond
to the query?
A: There is no longer any law making it the
legal obligation of an employer to grant an
Emergency Cost of Living Allowance
(ECOLA). Effective 1981, the mandatory living
allowances provided for in earlier Presidential
Decrees were integrated into the basic pay of
all covered employees. Thus, whether the
ECOLA will be paid or not during the semestral
break now depends on the provisions of the
applicable wage order or contract which may
be a CSA, that many grant said ECOLA. (1997
Bar Question)

2. If during special public holidays - Q: What is the concept of double HP?

Yes. The law and the IRR governing HP
are silent as to payment on Special Public A: 2 RH on same day.
Holidays. It is readily apparent that the
declared purpose of the HP which is the \
\
MAUNDY
prevention of diminution of the monthly THURSDAY&,
- WED RATE
income of the Ees on account of work ARAW NG
l
interruptions is defeated when a regular -. !- KAGITI,NGAN '
class day is cancelled on account of a Present unworked 200%
special public holiday and class hours are LOAw/pay unworked 200%
held on another working day to make up 300%
LOAw/ pay worked
for time lost in the school calendar. (at least)
Otherwise stated, the faculty member, Authorized 300%
worked
although forced to take a rest, does not absence (at least)
earn what he should earn on that day. Se 390%
Worked and day (+30% of
it noted that when a special public holiday Same
is Rest Day each 3
is declared, the faculty member paid by
100%)
the hour is deprived of expected income,
and it does not matter that the school
Q: Is double HP applicable at present?
calendar is extended in view of the days
or hours lost, for their income that could
A: No, because Araw ng Kagitingan is moved
be earned from other sources is lost
to Monday nearest April 9. (R.A. 9242)
during the extended days. Similarly, when
classes are called off or shortened on
Q: What is the concept of successive RH?
account of typhoons, floods, rallies, and
the like, these faculty members must
A:
likewise be paid, whether or not
MAUNDY I GOOD ENTITLED
extensions are ordered. (Jose Rizal WED \
THURS i FRIDAY TOHP
Col/ege v. NLRC, G.R. No. 65482, Dec.1,
Worked RH RH Yes. Both
1987)
LOA
RH RH Yes. Both
wlpay
Q: Lita, a full time professor in San
LOA wlo
IIdefonso University, is paid on a regular RH RH No. Both
pay
monthly basis. She teaches for a period of Yes. Only
10 months in a school year, excluding the 2 LOA wlo
Worked RH to HP on
month summer-break. During the semestral pay
Friday
break, the University did not pay her
emergency Cost of Living allowance
(ECOLA) although she received her regular
salary since the semestral break was

44
 UST GOLDEN NOTES 2010

Q: What are the conditions so that an Ee

may be entitled to 2 successive HP?

A: On the day immediately preceding the 151

H, he must be:
1. Present (worked), or
2. On LOA with pay. (Sec. 10, Rule IV,
Book III, IRR)

Q: What if the conditions are not met?

A: He must work on the 1st RH to,:ge entitled to

• P on the 2nd RH. (Sec. 10, Rule' IV, Book III,
IRR)

Academics Committee
Chairperson. Abraham D. Genuino II
Vice-Cbair Jor Academics: Jeannie ,\. Laurentino
Vice-Cbair Jar .Admin & Finance: Aissa Celine H. Luna
Vice-Chair Jar Lqout & Desien: Loise Rae G. Naval

Labor Law Committee

Subject Head' Lester Jay Alan E. Flores II
Assistant Subject Head' Domingo B. Divrva V

Members:
Rene Francis P. Batalla
Diane Camilla R. Borja
Maria Kristina L. Dacayo-Garcia
Christian Nino A. Diaz
Angelo S. Diokno
Genesis R. Fulgencio
Jeanelle C. Lee
J emuel Paolo M. Lobo
)\ndrew W. Montesa
Maria Maica Angelika Roman

UNIVERSITY OF SANTO TOMAS

Pacu{taa ae ([)ereclio CiviC
 LABOR STANDARDS: CONDITIONS OF EMPLOYMENT:
SERVICE INCENTIVE LEAVE
ART. 95. RIGHT TO SERVICE
INCENTIVE LEAVE"
Q: What is service incentive leave (SIL)?
A: It is 5 days leave with pay for every
employee who has rendered at least 1 yr of
service. It is commutable to its money
equivalent if not used or exhaustedat the end
of year.
Q: What do you mean by at least 1 year of
service?
A: Service for not less than 12 months,
whether continuous or broken reckoned from
the date the employee started working,
including authorized absences and paid
regular holidays unless the working days in the
establishment as a matter of practice or policy,
or that provided in the employment contract is
less than 12 months, in which case said period
shall be considered as one year. (Sec. 3, Rule
V, Book III, IRR)
Q: Who are entitled to SIL?
A:
GR: Applies to every Ee who has rendered
at least 1 year of service. (Art. 95[a])
XPNS:
1.Government Ees and any of its
political subdivisions including GOCCs
2. Those already enjoying the benefit
3. Domestic helpers and persons in the
personal services of another
4. Those already enjoying vacation leave
with pay of at least 5 days
5. Managerial Ees
6. Field personnel and other Ees whose
performance is unsupervised by the Er
7. Employed in establishments regularly
employing less than 10 workers
8. Exempt establishments
9. Engaged on task or contract basis,
purely commission basis, or those who
are paid in a fixed amount
performing work irrespective of the
time consumed in the performance
thereof. (Art. 95[b])
Q: Are teachers of private schools
contract basis entitled to SIL?
A: Yes. The phrase "those who are engaged
on task or contract basis" should, however, be
related with "field personnel" applying the rule
on ejusdem generis that general and unlimited
terms are restrained and limited by the
particular terms that they follow. Clearly, Cebu
46
Institute of Technology teaching personnel
cannot be deemed as field personnel which
refers "to non-agricultural Ees who regularly
perform their duties away from the principal
place of business or branch office of the Er
and whose actual hours of work in the field
cannot be determined with reasonable
certainty. (Par. 3, Art. 82, LC). (CIT vs. Ople,
G.R. No. 70203, Dec. 18, 1987)
Q: Is SIL commutable to its monetary
equivalent if not used or exhausted at the
end of the year?
A: Yes. It is aimed primarily at encouraging
workers to work continuously and with
dedication to the company.
Q:.What is the basis for cash conversion?
A: The basis shall be the salary rate at the
date of commutation. The availment and
commutation of the SIL may be on a pro-rata
basis. (No. VI(e), DOLE Handbook on
Worker's Statutory Monetary Benefit)
Q: Are part-time workers entitled to the full
benefit of the yearly 5 day SIL?
A: Yes. Art. 95 of Labor Code speaks of the
number of months in a year for entitlement to
said benefit. (Bureau of Working Conditions
Advisory Opinion to Phil. Integrated Exporter's,
Inc.)
Q: Are piece-rate workers entitled to the full
benefit of the yearly 5 day SIL?
A: It depends.
1. Yes. Provided:
a. They are working inside the
premises of the employer (Er)
and
b. Under the direct supervision of
the Er.
2. No. Provided:
a. They are working outside the
of premises of the Er
b. Hours spent in the performance
of work cannot be ascertained
with reasonable certainty
c. The are not under the direct
supervision of the Er
on
Q: Does it apply to Ees with salaries above
minimum wage?
A: No. The difference between the minimum
wage and the actual salary received by the
Ees cannot be deemed as their is"
month pay
and SIL pay as such difference is not
 UST GOLDEN NOTES 2010

equivalent to or of the same import as the said Q: What is the reason for VASl?
benefits contemplated by law. (JPL Marketing
Promotions v. CA, GR. No. 151966, July 8, A: Vacation leave is intended to give the
2005.) employees a rest from the monotony and
rigors of his daily work, on the other hand, sick
Q: Explain the entitlement of terminated leave is meant to be enjoyed only during
Ees to SIL. actual illness.

A: Q: In the grant of vacation leave privileges

1. Illegally dismissed Ees - entitled to to an employee (Ee), is the employer (Er)
SIL until actual reinstatement. given the discretion to impose conditions
(Integrated Conirectoe and E;lumbing on its entitlement and commutation?
Works, Inc. v. NLRC, G.R.No. Aug.9,
2005) A: Yes.The grant of vacation leave is not a
2. Legally dismissed Ees - the Ee who standard of law, but a prerogative of
had not been paid of SIL from outset management. It is a mere concession or act of
of employment is entitled only of such grace of the Er and not a matter of right on the
pay after a year from commencement part of the Ee. Thus, it is well within the power
of service until termination of and authority of an Er to impose certain
employment or contract. (JPL conditions, as it deems fit, on the grant of
Marketing Promotions v. CA, GR. vacation leaves, such as having the option to
No. 151966, July 8,2005) schedule the same. (PNCC Skyway Traffic
Management v. PNCC Skyway Corp.,G.R. No.
Q: What is the nature of vacation and sick 171231, Feb. 17,2010)
leave (VASl)?
Q: What is the solo parent leave (SPl)?
A: It is voluntary. It lies- purely within
management discretion or an output of A: It is a leave of not more than 7 working
collective bargaining agreement. days granted every year to any solo parent Ee
who has rendered service of at least 1 yr.
Q: What is the basis of VASl? (R.A. 8972)

A: It is a result of Note: The terms and conditions of

1. Collective bargaining negotiations or employment cannot be prejudiced by reason of
2. Established employer practice or having the status of a solo parent.
policy, not granted by law
Q: Is the SPl convertible to cash?
Q: How does an Ee enjoy VASl benefits?
A:
A: It must be enjoyed by the Ee within 1 year, GR: No.
thru established practice or policy of the Er
and cannot be unilaterally withdrawn by the XPN: If specifically agreed upon otherwise,
latter. and is non- cumulative. (R.A. 8972) Non-
compliance with the law may make the
Q: What is the effect if not enjoyed within 1 employer liable for damages. (Azucena,
yr? 2007)

A: Q: What is the effect if there is a change in

GR: Considered waived. status of the parent?

XPN: When the labor contract or the A: If the solo parent is no longer left alone with
established practice of the employer the responsibility of parenthood it shall
provides otherwise. terminate his/her eligibility for these benefits.
(R.A. 8972)
Q: Can it be converted to cash?
Q: What is battered woman leave (BWl)?
A:
GR: No. A: A female Ee who is a victim of violence
(physical, sexual or psychological) is entitled to
XPN: Unless allowed by the employer a paid leave of 10 days in addition to other
paid leaves. (R.A. 9262, Anti-VAWC Act)

UNIVERSITY OF SANTO TOMAS f.<U~ 47

Pacu{tad de CJ)ereclio CiviC .~-
 LABOR STANDARDS: CONDITIONS OF EMPLOYMENT:
SERVICE INCENTIVE LEAVE

Q: Is BWL extendible?

A: Yes, when the necessity arises. (R.A.

9262)

Q: What is special leave benefits for

women?

A: A woman Ee having rendered continuous

aggregate employment service of at least 6
months for the last 12 months shall be entitled
to a special leave benefit of 2 months with full
pay based on her gross monthly compensation
following surgery caused by gynecological
disorders. (Sec. 18, R.A. 9710)

Academics Committee
Chairperson: Abraham D. Genuine II
Vice-Chair for Academics: Jeannie A. Laurentino
Vice-Chair for Admin & Finance: Aissa Celine H. Luna
Vice-Chair for Lryout & Design: Loise Rae G. Naval

Labor Law Committee

Subject Head: Lester Jay Alan E. Flores II
Assistant Subject Head: Domingo B. Diviva V

Members:
Rene Francis P. Batalla
Diane Camilla R.'Borja
Maria Kristina L. Dacayo-Garcia
Christian Nino A. Diaz
Angelo S. Diokno
Genesis R. Fulgencio
] eanelle C. Lee
] emuel Paolo M. Lobo
Andrew W. Montesa
Maria Maica Angelika Roman

48
 UST GOLDEN NOTES 2010

; " ART. 96. SERVICE CHARGES Note: Since a tip is considered a pure gift out of
benevolence or friendship. it cannot be
Q: What are service charges (SC)? demanded from the customer. Whether or not
tips will be given is dependent on the will and
generosity of the giver. Although a customer may
A: These are charges collected by hotels,
give a tip as a consideration for services
restaurants and similar establishments and
rendered, its value still depends on the giver.
shall be distributed at the rate of:
They are given in addition to the compensation
by the employer. A gratuity given by an employer
in order to inspire the employee to exert more
effort in his work is more appropriately called a
bonus.
1. To answer fqr losses and
breakages and Q: What happens to the tips given freely
Equally
2. Distributed to Ees receiving
distributed by customers?
more than P2000 a month at
among them
the discretion of the
management. A: Pooled tips should be monitored, accounted
for and distributed in the same manner as the
service charges where a restaurant or similar
Q: Who are covered Ees?
establishment does not collect service charges
but has a practice or policy of monitoring and
A:
pooling tips given voluntarily by its customers.
GR: All Ees are covered, regardless of
(No. 7[c] DOLE Handbook on Workers
their position, desiqnation, employment
Statutory Monetary Benefits)
status, irrespective of the method by which
their wages are paid.

Note: Applies only to hotels; restaurants and

similar establishment collecting service
charges.

XPN: Managerial Ees. (Sec. 2, Rule VI,

Book JIJ, IRR)

Q: When is the share of employee

distributed and paid to them?

A: Not less than once every 2 weeks or twice Academics Committee

a month at intervals not exceeding 16 days. Chairperson: Abraham D. Genuino II
'Vice-Char for .Academics: Jeannie i\. Laurentino
Q: What happens If the SC is abolished?
Vice-Chair for Admin ri'7' Finance: Aissa Celine H. Luna
Vice· Chair for LaJ10ut & Design: Loise Rae G. Naval
A: The share of the covered Ees shall be
considered integrated in their wages on the
basis of the average monthly share of each Labor Law Committee
Ees for the past 12 months immediately Subject Head' Lester] ay Alan E. Flores II
preceding the abolition. .Assistant Subject Head' Domingo B. Diviva V

Note: Service charges form part of the award in Members:

illegal dismissal cases.
Q: What is the difference
SC?
A:
SERVICE CHARGE'
What the restaurant
requires you to pay for
the benefit of its Ees
Not a voluntary
contribution on the part
of the customer
Rene Francis P. Batalla
Diane Camilla R. Borja
between tip and Maria Kristina L. Dacayo-Garcia
Christian Nirio A. Diaz
Angelo S. Diokno
TIP' - Genesis R. Fulgencio
What you give to the J
eanelle C. Lee
waiter/waitress after J emuel Paolo M. Lobo
eating if you like their Andrew W. Montesa
service Maria Maica Angelika Roman
Voluntary contribution

UNIVERSITY OF SANTO TOMAS

Pacu{taa de ([)erecno CiviC
 LABOR STANDARDS: WAGES

, TITLE 2 WAGES Q: What does a "fair day's wage for a fair

day's labor "mean (no work no pay)?
, CHAPTER I
l PRELIMINARY MA TIERS '
A:
GR: If there is no work performed by the
Ee, without the fault of the Er, there can be
:' , ' ,A,~T. ,9.7. DEFINITION , "", '- ,
no wage or pay,
!

Q: What is a wage? XPN: The laborer was able, willing and

ready to work but was:
A: It is the remuneration or earnings, however 1, Prevented by management;
designated, capable of being expressed in 2, Illegally locked out;
terms of money, whether fixed or ascertained 3, Illegally suspended;
on a time, task, piece, or commission basis, or 4, Illegally dismissed
other method of calculating the same, payable 5, Otherwise illegally prevented from
by an employer (Er) to an employee (Ee) working, (Aklan Electric Coop, v.
under a written or unwritten contract of NLRC, G.R No, 129246, Jan. 25,
employment: 2000)
1, For work done or to be done, or for
services rendered or to be rendered; Q: What is equal pay for equal work?
and includes
2, Fair and reasonable value of board, A: Ees who work with substantially equal
lodging, or other facilities customarily qualifications, skill, effort and responsibility,
furnished by the Er to the E,e as under similar conditions, should be paid similar
determined by SLE, salaries, (Int'I School Alliance of Educators v.
Quisumbing, G.R No, 128845, June 1, 2000)
Q: What do you mean by customary?
Q: What are included in wage or salary?
A: It is founded on long-established and
constant practice connoting regularity, A:
1, Commission
Q: What do you mean by fair and 2. Facilities
reasonable value? 3, Commodities and supplements

A: It shall not include any profit to the Q: What is commission?

employer (Er) or to any person affiliated with
the Er. A: Direct remuneration received by an agent,
salesman, executor, broker, or trustee
Q: Distinguish between wage and salary? calculated as a percentage on the amount of
his transactions or on the profit to the principal.
A:
WAGE .' SALAR¥ .
Q: Are sales commission earned by a
(Ga<? vs.CA, GR No 44169, Dec. 3,1985) salesman who make or close a sale of
Compensation for duplicating machines' distributed by Phil.
Denotes higher degree
manual labor (skilled or Duplicators Corp., constitute part of his
of employment or a
unskilled) paid at stated
superior grade of "wage" or "salary"?
times and measured by
services and implies a
the day, week, month
position in office. A: Yes. Sales commission form part of the
or season.
"wage" or "salary" of salesmen and are not in
Considerable pay for a
Out gesture of a larger the nature of an "allowance" or "additional
lower and less
and more important fringe" benefit. Commissions are in the form of
responsible character
service incentives of encouragement, so that the
of em 10 rnent,
GR: Not subject to salesman would be inspired to put a little more
execution industry on the jobs particularly assigned to
them, The nature of the work of a salesmen
XPN: Debts incurred Subject to execution, and the reason for such type of remuneration
for food, shelter, for services rendered demonstrate clearly that
clothing and medical commissions are part of salesman wage or
attendance. salary. (Phil. Duplicators, Inc. v. NLRC, G.R
No, 110068, Nov. 11, 1993)

50
 UST GOLDEN NOTES 2010

Q: Distinguish between facilities and availability is a necessary matter in the

supplement?
..A:
. ~,
~':"', FACILITIES . --.
Items of expenses
necessary for the
laborer's and his
family's existence and
subsistence
Note: Does not include
tools of trade or articles/
services primarily for the
benefit of the Er or
necessary to the
conduct of the Er's
business.
Forms part of the wage
Deductible from wage
For the benefit of the
worker and his family.
. SUPPLEMENT
Extra remuneration or
special privileges or
benefits given to or
received by the
laborers over and
above their ordinary
earainqs 01: wages
(Atok Big Wedge
Mining Co. v, Atok Big
Wedge Mutual Benefit
Assoc, G.R. No. L-
7349, July 19, 1955) .
Independent of wage
Not wage deductible
Granted for the
convenience of the
Er.
operations of a small hotel. Furthermore,
granting that meals and lodging were provided
and indeed constituted facilities, such facilities
could not be deducted without the Er
complying first with certain legal requirements.
These requirements were not met in the
instant case. (Mabeza v. NLRC, G.R. No.
118506, April 18, 1997)
Q: What is gratuity pay?
A: It is something given freely to reward Ees
who have rendered satisfactory and efficient
service to the company. It does not fonm part
of the wage.
Q: What are allowances?
A: Amounts of money given in consideration of
certain expenses like transportation and
representation. It does not form part of the
wage.

Q: What is the criterion in determining ART. 98. APPLICATION OF TITLE

whether an item is a supplement or facility?
Q: To whom does the title on wages apply?
A: The criterion is not so much with the kind of
the benefit or item (food, lodging, bonus or sick
A:
leave) given, but its purpose. (State Marine v. GR: It applies to all employees
Cebu Seamen's Ass'n., G.R. No. L-12444,
Feb. 28, 1963) ..
XPN:
-1-. -Farm tenancy or leasehold;
Q: When can the cost of facilities furnished 2. Household or domestic helpers,
by the Er be charged against an Ee? including family drivers and persons
working in the personal service of
A: In order that the cost be charged against another;
the Ee, the latter's acceptance of such facilities 3. Home workers engaged in
must be voluntary. needlework or in any cottage industry
duly registered in accordance with
Q: What are the requirements for deducting law'
values for facilities? 4. Wo~kers in duly registered
cooperatives when so recommended
A: by the Bureau of Cooperative
1. Proof must be shown that such Development and upon approval of
facilities are customarily furnished by the Secretary of Labor and
the trade; Employment:
2. The provision of deductible facilities 5. Workers of a barangay micro
must be voluntarily accepted in business enterprise (R.A. 917E})
writing
3. The facilities must be charged at fair
and reasonable value (Mabeza v,
NLRC, G.R. No. 118506, April 18,
1997)

Q: Are food and lodging, or the electricity

and water consumed by a hotel worker,
considered facilities?
A: No. These are supplements. Considering,
therefore, that hotel workers are required to
work different shifts and are expected to be
available at various odd hours, their ready

UNIVERSITY OF SANTO TOMAS

PacuCtaa ae rDerecno CiviC
 LABOR STANDARDS: WAGES

. , . CHAPTER II . " Q: What is the purpose of fixing a minimum

, MINIMUM WAGE RATES wage?

: ART. ,99. REGIONALMINIMUM ..VVAGES '-; A:

1. Provide rock-bottom wage to be paid
Q: What is minimum wage? to Ees by Ers and below which the
rate must not fall,
A: It is the lowest basic wage rate fixed by law 2. Gives protection to enlightened Er
that an employer (Er) can pay his employees who without legal compulsion
voluntarily pays a decent wage
(Ees),
against competition of Er who pays
Ee inadequate wages and thus
Q: What is regional minimum wage?
operates at -a lower cost and sell
products at lower price,
A: The minimum wage rates for agricultural
and non-agricultural Ees and workers in each
Q: Can an Er be exempt from his obligation
and every region of the country shall be those
to pay minimum wages because of poor
prescribed by the Regional Tripartite Wages
financial condition of the company?
and Productivity Board (RTWPB).

Q: What is statutory minimum wage?

A: No. The payment of minimum wage is not
being dependent on the Ers ability to pay.
Payment of wage is a mandatory statutory
A: This shall refer to rate fixed by the RTWPB,
obligation. (De Racho VS. Mun. of J/agan, G.R.
as defined by the Bureau of Labor and
Employment Statistics (BLES) of the DOLE, No. L-23542, Jan. 2, 1968)
(RA 9504)
Q: Can an Ee be estopped in suing his Er
by accepting his wage below the minimum
Q: Who are minimum wage earners?
wage without objection?
A: Workers in the private sector paid the
statutory minimum wage, or to an employee in
A: No. It does not give rise to estoppel. The Ee
the public sector with compensation income of
can still sue his Er for the difference between
not more than the statutory minimum wage in
the amount received and the amount he
the non-agricultural sector where he/she is
should have received pursuant to a valid
assigned, (RA 9504)
minimum wage law where it does not appear
that the Er changed his position to his own
Q: Are minimum wage earners exempt from
payment of income tax on their taxable prejudice.
income?

A: Yes, provided that the holiday pay, overtime ( ARTS. 122. CREATION OF THE REGIONAL
; TRIPARTITE WAGES AND PRODUCTIVITY
pay, night shift differential pay and hazard pay
, BOARD (RTWPB) ,
received by such minimum wage earners shall
likewise be exempt from income tax. (RA
9504) Q: Who may set the minimum wage?

Q: Who are daily-paid Ees? A:

1. RTWPB
A: Ees paid only for days he actually worked. 2, Congress

Q: Who are monthly paid Ees? Q: What is the duty of RTWPB?

A: Ees paid by the month, irrespective of the A: Prescribe the minimum wage rates for
number of working days, with a salary not agricultural . and non-agricultural Ees and
below the established minimum wage, shall be workers in each and every region of the
presumed to be paid for all the days in the country,
month whether worked or not. The monthly
minimum wage shall not be less than the Q: What is the composition of RTWPB?
statutory minimum wage multiplied by 365
days divided by 12. A:
1, Regional Director of DOLE
2. Regional Director of NEDA
3. Regional Director of DTI

52
 UST GOLDEN NOTES 2010
4. 2 members from the employers'
sector
5. 2 members from the workers' sector;
and
6. Secretariat
;::t~·:"':A.J~T:,124.:~;rANDA~DSICRITERIA
r,:
r- 'i,.":. FOR"MfNIMUM WAGE FIXING .:
Q: What are standards or criteria for
minimum wage fixing?
A:
1. Demand for living wages
2. Wage adjustment vis-a-vis the
consumer price index
3, Cost of living and changes or
increase therein
4. Needs of workers and their families
5. Need to induce industries to invest in
the countryside
6. Improvements in standards of living
7. Prevailing wage levels
8. Fair return of capital invested and the
capacity to pay of Ers
9. Effects on employment generation
and family income
10. Equitable distribution of income and
wealth along the imperatives
Q: What is salary ceiling method?
A: A method of minimum wage adjustment
whereby the wage adjustment is applied to
Ees receiving a certain denominated ceiling. In
other words, workers already being paid more
than the existing minimum wage are also to be
given a wage increase. (ECOP v. NWCP, G.R.
No. 96169, Sep. 24, 1991).
Q: What is a floor wage method?
A: It involves the fixing of a determinate
amount to be added to the prevailing statutory
minimum wage rates.
Q: The Regional Wage Board of Region \I
issued a Wage Order granting all Ees in the
private sector throughout the region an
across-the-board increase of P15.00 daily.
Is this Wage Order valid?
A: The Wage Order is valid insofar as the
mandated increase applies to Ees earning the
prevailing minimum wage rate at the time of
the passage of the Wage Order and void with
respect to its application to Ees receiving more
than the prevailing minimum wage rate at the
time of the passage of the Wage Order.
Pursuant to its authority, the Regional Wage
Boards may issue wage orders which set the
daily minimum wage rates. In the present
case, the Regional Wage Board did not
determine or fix the minimum wage rate. It did
not set a wage level nor a range to which a
wage adjustment or increase shall be added.
Instead, it granted an across-the-board wage
increase of P15.00 to all Ees in the region. In
. doing so, the Regional Wage Board exceeded
its authority by extending the coverage of the
Wage Order to wage earners receiving more
than the prevailing minimum wage rate,
without a denominated salary ceiling. The
Wage Order granted additional benefits not
contemplated by R.A. No. 6727. (MBTC v
NWPC Commission, G.R. No. 144322, Feb. 6,
2007)
Q: Since the Wage Order was declared void
with respect to its application to employees
receiving more than the prevailing
minimum wage rate at the time of the
passage of the Wage Order, should these
Ees refund the wage increase received by
them?
A: No. The Ees should not refund the wage
increase that they received under the
invalidated Wage Order. Being in good faith,
the employees need not refund the benefits
they received. Since they received the wage
increase in good faith, in the honest belief that
they are entitled to such wage increase and
without any knowledge that there was no legal
basis for the same, they need not refund the
wage increase that they already received.
(MBTC v NWPC Commission, G.R. NO.
144322, Feb. 6, 200~
Q: What is wage distortion (WO)?
A: A situation where an increase in wage
results in the elimination or severe contraction
of intentional quantitative differences in wage
or salary rates between and among the Ee-
groups in an establishment as to effectively
obliterate the distinctions embodied in such
wage structure based on skills, length of
service or other logical bases of differentiation.
Q: What are the elements of WO?
A:
1. An existing hierarchy of positions with
corresponding salary rates.
2. A significant change or increase in
the salary rate of a lower pay class
without a corresponding increase in
the salary rate of a higher one;
3. The elimination of the distinction
between the 2 groups or classes; and
4. The WD exists in the same region of
the country. (Alliance Trade Unions v.
UN!VERSITY OF SArHO TOMAS
Pacu(taa de (])erecfio Civif
 LABOR STANDARDS: WAGES

NLRC, G.R. No. 140689, Feb. 17, resolved within 10 conduct continuous
2004) days from the time the' hearings and decide
dispute was referred to the dispute within 20
Q: Is the Er legally obliged to correct WD? voluntary arbitration. days from the time the
same was referred.
A: The Er and the union shall negotiate to
correct the distortions. If there is no union, the Q: Can the issue of WD be raised in a
Er and the workers shall endeavor to correct notice of strike?
such distinctions.
A: No. WD is non-strikeable. (flaw at Buklod
Q: What are the basic principles in WD? ng Manggagawa v. NLRC, G.R. No. 91980,
June 27, 1991.) WD is neither a deadlock in
A: collective bargaining nor.ULP.
1. The concept of WD assumes an
existing group or classification of Ees
which establishes distinctions among . ART. 100. PROHIBITION AGAINST
such Ees on some relevant or : ELIMINATION OR DIMINUTION OF
legitimate basis. This classification is . BENEFITS
reflected in a differing wage rate for
each of the classes of Ees Q: What is the concept of non-diminution
2. Often results from gov't decreed (ND) of benefits?
increases in minimum wages.
3. Should a WD exist, there is no legal A:
requirement that, in the rectification of GR: Benefits being given to employees
that distortion by re-adjustment of the (Ees) cannot be taken back or reduced
wage rates of the differing classes of unilaterally by the employer (Er) because
Ees, the gap which had previously or the benefit has become part of the
historically existed be restored in employment contract, whether written or
precisely the same amount. In other unwritten.
words, correction of a WD may be
done by reestablishing a substantial XPN: To correct an error, otherwise, if the
or significant gap (as distinguished error is not corrected for a reasonable time,
from the historical gap) between the it ripens into a company policy and Ees can
wage rates of the differing classes of demand it as a matter of right.
Ees.
4. The re-establishment of a significant Q: When is ND applicable?
difference in wage rates may be the
result of resort to grievance A: It is applicable if it is shown that the grant of
procedures or collective bargaining benefit:
negotiations. (Metro Transit Org., Inc. 1. Is based on an express policy of the
v. NLRC, GR. No. 116008, July 11, law; or
1995) 2. Has ripened into practice over a long
period of time and the practice is
Q: Distinguish the process. for correction of consistent and- deliberate and is not
WD of organized establishments and due to an error in the construction/
unorganized establishments? application of a doubtful or difficult
question of law.
A:
Organized Unorganized Q: What are the tests ascertaining
; Establishment Establishments existence of binding and enforceable
(with union) (without union) . company practice?
The Er and the union The Er and the workers
shall negotiate to shall endeavor to A: The act of the employer:
correct distortion. correct the distortion. 1. Has been done for a long period of
Any dispute shall be time;
Any dispute shall be
resolved through a 2. Has been done consistently and
settled through the
grievance procedure intentionally;
NCMB.
under the CSA. 3. Should not have been a product of
If it remains erroneous interpretation or
If it remains unresolved
unresolved, it shall be construction of a doubtful or difficult
within 10 days it shall
dealt with through question on law.
be refers to the NLRC.
voluntary arbitration.
The dispute will be The NLRC shall

54
 UST GOLDEN NOTES 2010

Q: What is a bonus? excluded from the computation of basic salary.

(Honda Phil., Inc. v. Samahan ng Malayang
A: It is an amount granted and paid to an Ee Manggagawa sa Honda, G.R. No. 145561, June
for his industry and loyalty which contributed to 15,2005)
the success of the Ers business and made
possible the realization of profits. Q: What are excluded in basic salary?

Q:Canbonusbedemanded? A: Allowances and monetary benefits which

are not considered integrated as part of the
A: regular or basic salary such as vacation and
GR: Bonus is not demandable as a matter sick leave credits, OT, premium, night
of right. It is a management @rerogqtive differential, holiday pay and COLA. Provided:
given in addition to what is ordinarily they are treated as part of the basic salary if
received by or strictly due to recipient. . provided by reasons of individual or collective
(Producers Bank of the Phil. v NLRC, G.R. bargaining or company practice or policy.
No. 100701, March 28, 2001)
Q: Suarez is a salesman for Star
XPN: Given for a long period of time Pharmaceuticals. Star Pharmaceuticals has
1. Consistent and deliberate - Er applied with the DOLE for clearance to
continued giving benefit without any terminate (by way of retrenchment) the
condition imposed for its payment services of Suarez due to financial losses.
2. Er knew he was not required to give He, aside from his monthly salary, receives
benefit commissions on the sales he makes and
3. Nature of benefit is not dependent on allowances. The existing CBA between Star
profit Pharmaceuticals and the union, of which
4. Made part of the wage or Suarez is a member, states that any Ee
compensation agreed ana stated in separated from employment for causes not
the employment contract. due to the fault of the Ee shall receive from
the company a retirement gratuity in an
Q: The projected bonus for the Ees of amount equivalent to one month's salary
Suerte Co. was 50% of their monthly per year of service. Suarez contends that in
compensation. Unfortunately, due to the computing his separation pay, his sales
slump in the business, the president commission and his allowances should be
reduced the bonus to 5% of their included in the monthly salary. Do you
compensation. . Can the company agree?
unilaterally reduce the amount of bonus?
Expiain briefly. A: I agree, with some conditions. In computing
separation pay, the monthly salary should
A: Yes. The granting of a bonus is a include commissions because a commission
management prerogative, something given in received by a salesman is part of his salary.
addition to what is ordinarily received by or
strictly due the recipient. An Er cannot be But for allowances to be included as part of
forced to distribute bonuses when it can no salary, they should be for services rendered or
longer afford to pay. To hold otherwise would to be rendered, like a cost of living allowance.
be to penalize the Er for his past generosity. But transportation and representation
(Producers Bank of the Phil. v NLRC, G.R. No. allowances are not considered as part of
100701, March 28, 2001). (2002 Bar salary because they are to meet expenses for
Question) transportation and representation. Thus, cost
of living allowances, but not transportation or
Q: What is covered by basic salary? representation allowances, shall be included
as part of salary in the computation of
A: All remunerations or earnings paid by its Er separation pay. (1997 Bar Question)
'or services rendered.

Note: For Ees receiving regular wage, the term

oaslc salary does not mean the amount actually
eceived by an Ee, but 1/12 of their standard
onthly wage multiplied by the length of their
service within a given calendar year. The
ayments of sick, vacation, and maternity leaves,
ight differentials, holiday pay, and premiums for
Nork done on rest days and special holidays are

UNIVERSITY OF SANTO TOMAS

55
lFacuCtaa de i])erecno CiviC
 LABOR STANDARDS: WAGES

,- ART. 101. PAYMENT BY RESUtTS - " Q: Distinguish piece rate Ee from task work
Ee.
Q: What does payment of wages by results
include? A:
;-: PIECE RATE - '. -:TASKWORK' "
A: Stress is placed on the
Emphasis on the task
1. Pakyaw unit of work produced,
itself
2. Piece-work or the quantity thereof.
3. Other non-time work Payment is not
reckoned in terms of
Uniform amount is paid
Note: It is regulated by DOLE Sec. to ensure the numbers of unit
per unit accomplished
payment of fair and reasonable wage rates, produced, but in terms
preferably through time and motion studies or in of completion of work,
consultation with representatives of workers and
Er's organizations. Q: What are the benefits payable to piece-
rate workers?
Q: What are the two categories of piece-
rate workers? A:
1_ Thirteenth month pay
A: 2. Night shift differential (NSD) pay
1. As to presence of control 3. Service incentive leave of five days
a. Piece-rate worker works with pay
directly under the supervision of 4. Holiday pay
their Er. 5. Applicable statutory minimum daily
b. Pakyaw or takay - works away rate
from the Ers work premises and 6. Meal and rest periods
are not directly supervised by the 7. Premium pay (conditional)
Er. 8. Overtime pay (conditional)
9. Other benefits granted by law,
2. As to rate of payment individual or collective bargaining
a. Those who are paid rates as agreements or company policy or
prescribed in Piece Rate Orders practice.
by the DOLE
b. Those who are paid output rates Note: The rules implementing the Labor Code
which are prescribed by the Er (LC) on NSD and SIL do not apply to Ees whose
and are not yet approved by the time and performance is unsupervised by the Ers,
DOLE. including those who are engaged on task or
contract basis, purely commission or those who
are paid a fixed amount for performing work
Q: Who are non-time workers?
irrespective of the time consumed in the
performance thereof.
A: They are workers paid according to the
quantity, quality or kind of job and the
Q: TRX, a local shipping firm, maintains a
consequent results thereof.
fleet of motorized boats plying the island
barangays of AP, a coastal town. At day's
Q: Who are workers paid on piece-rate
end the boat operators/crew members turn
basis?
over to the boat owner their cash
collections from cargo fees and passenger
A: Workers paid by standard amount for every
fares, less the expenses for diesel fuel,
piece or unit of work produced that is more or
food, landing fees and spare parts .. 50% of
less regularly replicated, without regard to the
the monthly income or earnings derived
time spent in producing the same.
from the operations of the boats are given
to the boatmen by way of compensation.
Deducted from the individual shares of the
boatmen are their cash advance and peso
value of their absences, if any. Are these
boatmen entitled to OT pay, holiday pay,
and 13th month pay?

A: If the boatmen are considered Ees, like

jeepney drivers paid on a boundary system,
the boatmen are not entitled to O'T and holiday
pay because they are workers who are paid by

56
 UST GOLDEN NOTES 2010
~~~~==~~~~~--
results. Said workers, under the LC are not . . ART. 103. TIME OF PAYMENT
entitled, among others, to OT pay and holiday
pay. In accordance with the rules and Q: When should wages be paid?
regulations implementing the 13th month pay
law, however, the boatmen are entitled to the A:
13th month pay. Workers who are paid by GR: Wages shall be paid
results are to
be paid their 13th month pay. 1. At least once every 2 weeks, or
(2004 Bar Question) 2. Twice a month at intervals not
exceeding 16 days

~ ART. 102. FORMS OF PAYMENT Note: No Er shall make payment with

~ " less frequency than once a month.
Q: What is the form of payment of wages?
XPN: Payment cannot be made with such
A: regularity:
GR: Wages shall be paid in legal tender. 1. Due to force majeure or
circumstances beyond the employer's
XPN: Payment of wages by bank checks, control.
postal checks or money orders is allowed 2. If engaged to perform a task which
where such manner of wage payment is: cannot be completed in 2 weeks and
1. Customary on the date of the in the absence of CBA.
effectivity of the Labor Code.
2. Stipulated in the CBA. Q: How can payment be made in case of
3. Where all of the following conditions force majeure or circumstances beyond the
are met: Ers control?
a. There is a bank or other facility
for encashment within a radius of A: Er shall pay wages immediately after such
1 km. from the workplace; force majeure or circumstance has ceased.
b. The Er or any of its agents or
representatives does not receive Q: How will wages of employees engaged
any pecuniary benefit directly or to perform a task which cannot be
indirectly from the arrangement. completed in 2 weeks be paid?
c. The Ees are given reasonable A: In the absence of a CBA or arbitration
time during banking hours to award:
withdraw their wages from the 1. Payment is made at intervals not
bank which time shall be exceeding 16 days, in proportion to
considered as compensable the amount of work completed.
hours worked if done during 2. Final settlement is made immediately
working hours. upon completion of work.
d. Payment by check is with
consent of the Ees concerned IF ART. 104. PLACE OF PAYMENT
there is no CBA authorizing
payment of wages by bank Q: Where is the place of payment of
checks. wages?
4. Other instances when necessary
because of special circumstances as A:
specified in appropriate regulations to GR: Place of payment shall be at or near
be issued by the SLE. the place of undertaking.

Q: Are the use of tokens, promissory notes, XPN: Permissible only under the following
coupons vouchers or any other form circumstances:
allowed? 1. When payment cannot be effected at
A: No. Any form alleged to represent legal or near the place of work
tender is absolutely prohibited even when a. by reason of the deterioration of
expressly requested by the Ee. the peace and order conditions
or
b. by reason of actual or impending
emergencies covered by fire,
flood, epidemic, or other calamity
c. rendering payment thereat
permissible;

UNiVERSITY OF SANTi,.) ~rO~f1.!\S

Pacu{tati tie Derecho CiviC
 LABOR STANDARDS: WAGES

2. When the employer (Er) provides free and in the amount prescribed under
transport to the employee (Ee) back the LC.
and forth; 4. There is a bank or ATM facility within
3. Any analogous circumstances a radius of 1 km. from the workplace;
provided that the time spent by the 5. Upon the request of the concerned
Ee in collecting their wage shall be Ee, the Er shall issue a record
considered compensable hours evidencing payment of wages,
worked. benefits and deductions for a
particular period;
Q: What are the prohibited places of 6. The ATM system of payment shall
payment? neither result in diminution of benefits
and privileges of the Ee nor shall the
A: latter incur additional expenses in the
GR: Places where games are played with process; and,
stakes of money or things representing 7. The Er shall assume full responsibility
money like: in case the wage protection
1. Bar; provisions of law and regulations are
2. Night club; not complied with under the
3. Day club; arrangement (DOLE's Explanatory
4. Drinking establishment; Bulletin on Wage Payment through
5. Massage clinic; A TM Facility, Nov. 25, 1996)
6. Dance hall;
7. Other similar places or in places
- ART. 105. DIRECT PAYMENT OF WAGES
XPN: In case of workers employed in said
places. . Q: How should payment of wages be
made?
Q: When can payment thru banks be
permitted? A:
GR: It shall be made directly to the Ees
A: entitled thereto.
1. Written permission of the majority of
the Ees concerned in the XPN:
establishments 1. Force majeure rendering such
2. Establishment must have 25 or more payment impossible or under other
Ees special circumstances in which the
3. Establishment must be located within worker may be paid:
1 km. radius to the bank. (Sec. 7, a. Through another person under
Wage Rationalization Act, R.A. 6727) written authorization, or
b. Upon authorization to a member
Q: What is the duty of the bank? of his family.
2. Authorized by existing laws
A: Whenever applicable and upon request of a a. Payment for the insurance
concerned worker or union, the bank shall premiums of the Ee and
issue a certification of the record of payment of b. Union dues where the right to
wages of a particular worker or workers for a check off is provided in CBA or
particular payroll period. c. Authorized in writing by the
individual Ees concerned. (Sec.
Q: Is payment through ATMs allowed? 5, Rule VIII, Book III, IRR).

A: Yes. Provided: 3. In case of death of the Ee, in which

1. The ATM system of paym ent is with case it will be paid directly to the
the written consent of the Ee worker's heirs.
concerned;
2. The Ees are given reasonable time to Q: What is the procedure in case of
withdraw their wages from the bank payment through heirs of worker?
facility which, if done during the
working hours, shall be considered as A:
compensable hours worked; 1. When the heirs are of age, they shall
3. The system shall allow the Ee to execute an affidavit attesting to their
receive their wage within the period relationship to the deceased and the
 UST GOLDEN NOTES 2010

fact that they are his heirs to the

exclusion of all other persons.
2. In case any of the heirs is a minor,
such affidavit shall be executed in his
behalf by his natural guardian or next
kin.
3. Affidavit shall be presented to the Er
who shall make payment through the
DOLE Secretary or his
representative.
4. Payment of wage shall absolve the Er
of any other liability ~with respect to
the amount paid.

Academics Committee
Chairperson: Abraham D. Genuino II
Vice-Chair jor .Academics: Jeannie A. Laurentino
Vice-Chair for Admin & Finance: A..issaCehne H. Luna
Vice-Chair for Layoi« & Design: Loise Rae G. Naval

Labor Law Committee

Subject Head: Lester Jay Alan E. Flores II
Assistant Subject Head: Domingo B. Diviva V

Members:
Rene Francis P. Batalla
Diane Camilla R. Borja
Maria Kristina L. Dacayo-Garcia
Christian Nino A. Diaz
Angelo S. Diokno
Genesis R. Fulgencio
Jeanelle C Lee
Jemuel Paolo M. Lobo
Andrew W. Montesa
Maria Maica Angelika Roman

UNiVERSITY OF SANTO TOMAS

59
Pacu{taa de CDereclio Civif
 LABOR STANDARDS

I ART. 106. CONTRACTOR OR to an arrangement between the latter and

:. SUBCONTRACTOR a principal. (0.0. 18-02)

Q: What is a permissible job contracting or 3. Principal - Any Er who puts out or farms
subcontracting? out a job, service, or work to a contractor
or subcontractor.
A: It refers to an arrangement whereby a
principal agrees to farm out with a contractor Q: What are the factors to consider in
or subcontractor the performance of a specific determining whether contractor is carrying
job, work, or service within a definite or on an independent business?
predetermined period, regardless of whether
such job, work or, service is to be performed or A:
completed within or outside the premises of 1. Nature and extent of work
the principal. 2. Skill r~quired
Under this arrangement, the following 3. Term and duration of the relationship
conditions must be met: 4. Right to assign the performance of
specified pieces of work
1. The contractor carries on a distinct 5. Control and supervision of worker
and independent business and 6. Power of employer to hire, fire and
undertakes the contract work on his pay wages
account under his own responsibility 7. Control of the premises
according to his own manner and 8. Duty to supply premises, tools,
method, free from the control and appliances, materials and labor
direction of his employer or principal 9. Mode, manner and terms of payment.
in all matters connected with the (Vinoya v. NLRC, G.R. No. 126286,
performance of his work except as to Feb 2, 2000)
the results thereof;
Note: Individuals with special skills; expertise or
2. The contractor has substantial capital talent enjoy the freedom to offer their services as
or investment; and independent contractors. An individual like an
artist or talent has a right to render his services
3. The agreement between the principal without anyone controlling the means and
methods by which he performs his art or craft.
and contractor or subcontractor
(Sonza VS. ABS-CBN, G.R. No. 138051, June 10,
assures the contractual employees
2004)
entitlement to all labor and
occupational safety and health
Q: Is the Sonza doctrine on "talents"
standards, free exercise of the right to
applicable to other workers of ABS-CBN,
self-organization, security of tenure,
such as production assistants and
and social welfare benefits. (Gal/ego
production crew?
v. BAYER Phi/s., lnc., GR. No.
179807, July 31, 2009, J. Carpio-
A: No. In the selection and engagement of the
Morales)
production assistants and production crew, no
peculiar or unique skill, talent or celebrity
Q: Describe the relationship arising from
status was required from them since they were
contractual arrangements.
merely hired through the company's personnel
A: There is a trilateral relationship between the
department just like any ordinary Ee. Their so-
principal, contractor and Ee. There exists a
called "talent fees" correspond to wages given
contractual relationship between the principal
as a result of an Er-Ee relationship. They did
and the contractor or subcontractor to its Ees.
not have the power to bargain tor huge talent
fees, a circumstance negating independent
Q: Who are the parties in contracting and
contractual relationship. The presumption is
subcontracting?
that when the work done is an integral part of
the regular business of the employer and when
A: the worker, relative to the employer, does not
1. Contractor/subcontractor - Refers to any
furnish an independent business or
person engaged in a legitimate
professional service, such work is a regular
contracting or subcontracting
employment of such employee and not an
arrangement.
independent contractor. (ABS-CBN v.
Marquez, June 22, 2005; ABS-CBN v.
2. Contractual Ee - One who is employed by
Nazareno, Sep. 26, 2006)
a contractor or subcontractor to perform or
complete a job, work, or service pursuant

60
Q: What are the rights of a contractual Ee any provision of the LG, including the failure to
(CEe)? pay wages. This will not prevent the principal
from claiming reimbursement from the
A: They shall be entitled to all the rights and contractor.
privileges due to a regular Ee as provided in
the LG, as amended to include the ff: Q: What does substantial capital or
1. Safe and healthful working investment mean?
conditions;
2. SI~ rest days, OT pay, holiday pay, A: It refers to the capital stocks and
13 month pay and separation pay; subscribed capitalization in case of
3. Social security and welfare benefits; corporations, tools, equipments, implement,
4. Self-organization, GSA) and eeaceful machineries and work premises, actually and
concerted actions; '. directly used by the contractor or
5. Security of tenure (Sec. 8, DO 18-02) subcontractor in the performance or
completion of the job, work or service
Q: What are the effects of termination of contracted out. (D. O. 18-02)
CEe to separation pay and other benefits?
Note: The law does not require both substantial
A: capital and investment in the form of tools
1. If prior to the expiration of the equipments, machineries, etc. This is clear fro~
employment contract between the the use of conjunction "or". If the contention was
principal and the contractor or to require the contractor to prove that he has both
subcontractor - The right of GEe to capital and requisite investment, then the
separation payor other related conjunction "and" should have been used.
benefits shall be governed by the (Virginia Neri v. NLRC, G.R. No. 97008, July 21,
applicable laws and jurisprudence on 1993)
termination of employment.
2. If the termination results from the Q: What does the right to control mean?
expiration of the contract between the
principal and the contractor or A: It refers to the right reserved to the person
subcontractor - The Ee shall not be for whom the services of the contractual
entitled to separation pay. However, workers are performed, to determine not only
this is wlo prejudice to completion the end to be achieved, but also the manner
bonuses or other emoluments and means to be used in reaching that end.
including retirement pay as may be (~.O. 18-02)
provided by law or in the contract
between the principal and the Q: SMC and Sunflower Cooperative entered
contractor. into a 1-yr Contract of Services, to be
renewed on a month to month basis until
Q: When is the principal deemed the terminated by either party, Pursuant to the
employer of the contractual employee? contract, Sunflower engaged private
respondents to render services at SMC's
A: Where: Bacolod Shrimp Processing Plant. The
1. There is labor-only contracting contract was deemed renewed by the
2. The contracting arrangement falls parties every month after its expiration on
within the prohibited acts Jan, 1, '94 and respondents continued to
perfonn their tasks until Sep, 11, '95. In
Q: May the Er or indirect Er require the July '95, private respondents filed a
contractor or subcontractor to furnish a complaint before the NLRC, praying to be
bond equal to the cost of labor under declared as regular Ees of SMC, with
contract to answer for the wages due to claims for recovery of all benefits and
Ees in case the contractor or subcontractor privileges enjoyed by SMC rank and file
fails to pay the same? Ees. Respondents subsequently filed an
Ame"tlded Complaint to include illegal
A: Yes. The Er or indirect Er may require the dismissal as additional cause of action
contractor or subcontractor to furnish a bond following SMC's closure of its Bacolod
that will answer for the wages due to the Ees. Shrimp Processing Plant on which resulted
in the termination of their services. SMC
Q: What is the liability of the principal? filed a Motion for Leave to File Attached
Third Party Complaint to implead
A: The principal shall be solidarily liable with Sunflower as 3rd -Party Defendant. Are
the contractor in the event of any violation of private respondents Ees of . the

. ~.
lFac'u{tad' de lDerecfio CiviC
 LABOR STANDARDS

independent cooperative contractor which are directly related to the

(Sunflower) or of the SMC? principal business of such Er.

A: The contention of SMC holds no basis. Q: Why is labor only contracting

Using the "substantial capital" doctrine and the prohibited?
"right of control test", the Court found that the
Sunflower had no substantial capitai in the A: It gives rise to confusion as to who is the
form of tools, equipment, machineries, work real Er of the workers and who is liable to their
premises and other materials to qualify itself claims. It also deprives workers of the
as an independent contractor. The lot, opportunity to become regular Ees.
building, machineries and ali other working
tools utilized by private respondents in carrying Q: How do we determine if one is engaged
out their tasks were owned and provided by in labor/job only contracting?
SMC. In addition, the shrimp processing
company was found to have control of the A: The test to determine whether one is a
manner and method on how the work was job/labor only contracting is to look into the
done. Thus, the complainants were deemed elements of a job contractor. If ali the elements
Ees not of the cooperative but of the shrimp of a job contractor are present, then he is a job
processing company. Since respondents who .contractor, Absent one of the elements for a
were engaged in shrimp processing performed job contractor, then the person is a labor-only
tasks usually necessary or desirable in the contractor.
aquaculture business of SMC, they should be
deemed regular Ees of the latter and as such Q: Distinguish between job contracting
are entitled to ali the benefits and rights and labor only contracting
appurtenant to regular employment. (SMC vs.
Prospero Aballa, et a/., G.R. No. 149011, June A:
28, 2005, J. Carpio-Morales) LABOR-ONLY
JOB CONTRACTING CONTRACTING
Q: What are the conditions before Liability is limited (shall
permitting job contracting? be solidarily liable with Liability extends to all
Er only when the Er
those provided under
fails to comply with the Labor Standards
A:
req'ts as to unpaid
1. The labor contractor must be duly law
wages and other labor
licensed by the appropriate Regional
standards violations)
Office of the DOLE
Permissible, subject
2. There should be a written contract Prohibited by Law
only to certain
between the labor contractor and his conditions
client-Er that will assure the Ees at The contractor has
least the minimum labor standards Has no substantial
substantial capital or capital or investment
and benefits provided by existing investment
laws.
Q: Metro Grocery Inc. arranged with Dado, a
Note: The Ees of the contractor or subcontractor Barangay Chairman, to provide the grocery
shall be paid in accordance with the provisions of with workers who 'will work as cashiers, bag
the tc. (Art. 106) boys, shelf-counter helpers and
sanitation workers. The grocery will pay
Q: What is labor-only contracting? Dado an amount equivalent to the direct
and hidden costs of the wages of each
A: It refers to an arrangement where the worker assigned, plus 10% to cover the
foliowing conditions concur: administrative costs related to their
1. The person supplying workers to an arrangement. Dado, in turn, will pay directly
Er does not have substantial capital the workers their wages. As far as the
or investment in the form of tools, workers are concerned, Dado is their Er. A
equipment, machineries, work, group of concerned workers consulted you
premises, among others, or if Dado is really under the law their Er. (2000
2. Even if such person has substantial
Bar Question)
assets, the same are not actualiy or
directly used by the Ees contracted 1. How will you analyze the problem in
out; order to formulate your answer?
3. The workers recruited and placed by 2. What is the legal significance, if any,
such person are performing activities
the
question of concerned workers as to
 UST GOLDEN NOTES 2010
who is their Er?
A: I will apply the four- fold test of Er-Ee
relationship. I will examine if Dado exercises
power of control or supervision over the
workers' manner and method of doing their
work. Control is the most important factor in
examining Er-Ee relationship. The other factors
are hiring, payment of wages, and power to
dismiss, I will also examine whether there was
job contracting or labor-only contracting.
iJ ..•
Q: SMPC entered into a contract with
Arnold for the milling of lumber as well as
the hauling of waste wood products. The
company provided the equipment and tools
because Arnold had neither tools and
equipment nor capital for the job. Arnold,
on the other hand, hired his friends,
relatives and neighbors for the job. Their
wages were paid by SMPC to Arnold, based
on their production or the number of
workers and the time used in certain areas
of work. All work activities and schedules
were fixed by the company.
1. Is Arnold a job contractor? Explain
briefly
2. Who is liable for the claims of the
workers hired by Arnold? Explain briefly.
A:
1. No. In the problem given, Arnold did
not have sufficient capital or
investment for one. For another,
Arnold was not free from the control
and direction of SMPC because all
work activities and schedules were
fixed by the company. Therefore,
Arnold is not a job contractor. He is
engaged in labor-only contracting.
2. SMPC is liable for the claims of the
workers hired by Arnold. A finding
that Arnold is a labor only contractor
is equivalent to declaring that there
exist an Er-Ee relationship between
SMPC and workers hired by Arnold.
This is so because Arnold is
considered a mere agent of SMPC
(Lim v. NLRC, G.R. No. 12463G, Feb.
19, 1999); 2002 Bar Question)
Q: What are the grounds for delisting of
contractors or subcontractors?
A:
1. Non-submission of contracts between
the principal and the contractor or
subcontractor when required to do so;
2. Non-submission of annual report;
3. Findings through arbitration that the
contractor or subcontractor has
UNiVERSITY
engaged in labor-only contracting and
other prohibited activities;
4. Non-compliance with labor standards
and working conditions. (Sec. 16,
D.O. 18-02)
~ . ART. 107. INDIRECT-EMPLOYER
Q: Who is an indirect Er?
A: The provisions of Art. 106 shall likewise
apply to any person, partnership, association
or corporation which, not being an employer
(Er), contracts with an independent contractor
for the performance of any work, task, job or
project. (Art. 107)
Note: The Er or indirect Er may require the
contractor or subcontractor to furnish a bond to
the cost of labor under the contract conditioned to
answer for the wages due the Ees should the
latter fail to pay the same. (Art. 108)
Q: What is the liability of an indirect Er?
A: Every Er or indirect Er shall be held
responsible with his contractor or
subcontractor for any violation of the
provisions of the LC.
For purposes of determining their civil liability,
every Er or indirect Er shall be considered as
direct Ers. (Art. 109, LC)
Q: CMI had provided janitorial services to
the NEDA since April '88. Its service
contract was renewed every three months.
However, in the bidding held on July 1992,
CMI was disqualified and excluded. In '93,
G janitors of CMI formerly assigned at
NEDA filed a complaint for underpayment
of wages. Both CMI and NEDA were
impleaded as respondents for failure to
comply with NCR Wage Orders Nos. 01
and 02, which took effect on Nov. 1, '90
and Jan. 2, '92, respectively.
Should NEDA, a gov't agency subject to
budgetary constraints, be held solidarily
liable with CMI for the payment of salary
differentials due the complainants?
A: NEDA shall be held solidarily liable with
CMI for the payment of salary differentials due
to the complainants, because NEDA is the
indirect Er of said complainants. The LC
provides that xxx A person, partnership,
association or corporation which, not being an
Er, contracts with an independent contractor
for the performance of any work, task, job or
project" xxx "shall be jointly and severally
liabie with his contractor or subcontractor to
OF SANTO TOMAS I,~~ 6'"
Pacu{tal de Verecfio CiviC.' ~
 such Ees (of the contractor or subcontractor)
to the extent of work performed under the
contract xxx." (Arts. 106 and 107, LC) (2004
Bar Question)
Note: Termination pay, after all, is
considered as additional remuneration
for services rendered to the employer
for a certain period of time; it is
computed on the basis of length of
service. (PNB vs. Cruz, G.R. No.
80593, Dec. 18, 1989)

5. Applicable only to ordinary preferred

Q: Can the Er require a bond?
credit, hence, must yield to special
preferred credits.
A: An Er or indirect Er may require the
contractor or subcontractor to furnish a bond Q: Are workers preferred than the tax
equal to the cost of labor under contract, on
claims of the Gov't?
condition that the bond will answer for the
wages due the employees (Ees) should the
A: No. Art. 110 did not sweep away the
contractor or subcontractor, as the case may
overriding preference accorded under the
be, fail to pay the same. scheme of the Civil Code to tax claims of the
gov't.
Where the Er fails to require the contractor or
subcontractor to post a bond, the Er must
Q: Is worker preference applicable if the Er-
answer for whatever liabilities the contractor
corporation is under rehabilitation?
may have incurred to his Ees. This is without
prejudice to its seeking reimbursement from
A: No. Suspension of payments order by the
the contractor for whatever amount it will have
SEC mandates the holding in abeyance the
to pay the said Ees. (Baguio v. NLRC, G.R.
filing or the proceedings on labor cases
Nos. 79004-08, Oct. 4, 1991) against an Er who is under rehabilitation to
give the Er the chance to concentrate on how
to revive his business and not be distracted in
: ART. 110 -. WORKER PREFERENCE trying to defend itself in labor cases filed
IN CASE OF BANKRUPTCY against it. (Rubberworld, Inc. v. NLRC, G.R.
No. 126773, April 14, 1999)
Q: What happens if the Er business
experiences bankruptcy or liquidation? Q: Premiere Bank, being the creditor-
mortgagee of XYZ & Co., a garment firm,
A: His workers shall enjoy first preference as foreclosed the hypothecated assets of the
regards their wages and monetary claims, any latter. Despite the foreclosure, XYZ & Co.
provrsion of the law to the contrary continued its business operations. A year
notwithstanding. later, the bank took possession of the
foreclosed property. The garment firm's
Q: What are the principles underlying the business operations ceased without a
preference? declaration of bankruptcy. Caspar, an
employee of XYZ & Co., was dismissed
A: from employment due to the cessation of
1. Declaration of bankruptcy or judicial business of the firm. He filed a complaint
liquidation before enforcement of the against XYZ & Co. and the bank. The Labor
worker's preferential right Arbiter, after hearing, so found the
company liable, as claimed by Caspar, for
2. Filing of claims by workers. separation pay. Premiere Bank was
additionally found subsidiarily liable upon
3. The right does not constitute a lien to the thesis that the satisfaction of labor
the property of the insolvent debtor in benefits due to the Ee is superior to the
favor of workers. (DBP VS. NLRC, right of a mortgagee of property. Was the
G.R. No. 82763 Mar. 19, 1990 and Labor Arbiter correct in his decision?
G.R. No. 97176, Mar. 18, 1993)
A: No. The preference of credits established in
4. The preference in favor of the Ees Art. 110 of the LC cannot be invoked in the
applies to discharge of funds. The absence of any insolvency proceedings,
preference does not only cover declaration of bankruptcy, or judicial
unpaid wages, it also extends to liquidation. (DBP v. Santos, G.R. No. 75801,
. termination pay and other monetary March 20, 1991). (2003 Bar Question)
claims.
 UST GOLDEN NOTES 2010

Q: Distinguish the mortgage created under (Traders Royal Bank Ee's Union-Independent
the Civil Code from the right of 1 st v. NLRC, GR. No. 120592, Mar. 14, 1997)
preference created by the LC as regards
e unpaid wages of workers. Explain. Note: Art.111 of the LC deals with the
extraordinary concept of attorney's fees. It may
A: A mortgage directly subjects the property not be used as the standard in fixing the amount
.ipon which it is imposed, whoever the payable to the lawyer by his client for the legal
services he rendered. (Masmud v. NLRC, GR.
oossessor may be, to the fulfillment of the
No. 18338~ Feb. 13,2009)
bligation for which it was constituted. It
c eates a real right which is enforceable
Q: Santiago, a project worker, was being
against the whole world. It is therefore a lien
assigned by his Er, Bagsak Builders, to
an identified real property. .,
'{I , Laoag, !locos Norte. Santiago refused to
comply with the transfer claiming that it, in
Aortgage credit is a special preferred credit
effect, constituted a constructive dismissal
.rider the Civil Code in the classification of
because it would take him away from his
edits. The preference given by the lC when
family and his usual work aSSignments in
I' t attached to any specific property, is an
Metro Manila. The Labor Arbiter (LA) found
dinary preferred credit. (1995 Bar Question)
that there was no constructive dismissal
but ordered the payment of separation pay
due to strained relations between Santiago
ART. 111. ATTORNEY'S FEES
and Bagsak Builders plus atty's fees
equivalent to 10% of the value of Santiago's
Q: What are the limitations to the
separation pay.
assessment of attorney's lien against the
culpable party?
Is the award of atty's fees valid? State the
reasons for your answer.
A:
1. In case of unlawful withholding of
A: No, the award of atty's fees is not valid.
wages - 10% of the amount of wages
According to the lC (Art. 111 [a]), atty's fees
to be recovered.
may be assessed in cases of unlawful
2. It shall be unlawful for any person to
withholding of wages which does not exist in
demand or accept, in any judicial or
the case. The worker refused to comply with a
administrative proceedings for the
lawful transfer order, and hence, a refusal to
recovery of wages, atty's fees that
work. Given this fact, there can be no basis for
exceed 10% of the amount of wages
the payment of atty's fees.
recovered.
Could the LA have validly awarded moral
ote: The prohibition on atty's lien refers to
and exemplary damages to Santiago
oceedings for recovery of wages and not to
instead of atty's fees? Why?
services rendered in connection with CBA
~egotiations. In the latter case, the amount of
arty's fees may be agreed upon by the parties A: No, moral and exemplary damages can be
a d the same is to be charged against union awarded only if the worker was illegally
. ds as provided for in Art. 222 of the Labor terminated in an arbitrary or capricious
Code, (Pacific Banking Corp.v. Clave, GR. No. manner. (Nueva Ecija Electric Cooperative
- 965, Mar. 7, 1984) inc., Ees' Ass'n., vs. NLRC, GR No. 116066,
Jan. 24, 2000; Cruz VS. NLRC, GR. No.
Q: What is ordinary attorney's fee? 116384, Feb. 7, 2000; Phil. Aeolus etc., VS.
NLRC, GR. No. 124617, April 28, 2000).
A: It is the reasonable compensation paid to a (2001 Bar Question)
awyer by his client for the legal services he
as rendered. Q: When can attorney's fees and damages
be awarded in an illegal dismissal case?
Q: What is extraordinary attorney's fee?
A: For attorney's fees, moral and exemplary
A: It is the indemnity for damages ordered by damages to be granted, the plaintiff must
e court to be paid by the losing party in a prove that the facts of his case fall within the
r 'gation and is not to be paid to the lawyer but enumerated instances in the Civil Code.
t the client, unless they have agreed that the Thus, moral damages may only be recovered
award shall pertain to the lawyer as an where the dismissal or suspension of the
additional compensation or as a part thereof. employee was attended by bad faith or fraud,
or constituted an act oppressive to labor, or

UNIVERSITY OF SANTO TOMAS (:;J 65

Pacu[taa ae !lJerecho CiviC .•.
 LABOR STANDARDS

was done in a manner contrary to morals,

good customs or public policy. In other
words, the act must be a conscious and
intentional design to do a wrongful act for a
dishonest purpose or some moral obliquity.
Exemplary damages, on the other hand, may
only be awarded where the act of dismissal
was effected in a wanton, oppressive or
malevolent manner. (Chaves v. NLRC,G.R.
No. 166382, June 27, 2006)

Q: What is union service fee?

A: The appearance of labor federations and c

local unions as counsel in labor proceedings
has been given legal sanction under Art. 222
of the LC, which allows non-lawyers to
represent their organization thereof. The said
labor federations and local unions have a valid
claim to atty's fees which is called the Union
Service Fee.

Academics Committee
Chairperson: Abraham D. Genuine II
Vice-Chair for Academics: Jeannie A. Laurentino
Vice-Chair for Admin & Finance: Aissa Celine H. Luna
Vice-Chair for LEgOII! & Design: Loise Rae G. Naval

Labor Law Committee

S lIo/eci Head' Lester Jay Alan E. Flores II
Assistant SlIo/eet Head' Domingo B, Diviva V

Members:
Rene Francis P. Batalla
. Diane Camilla R. Borja
Maria Kristina L. Dacayo-Garcia
Christian Niii.o A, Diaz
Angelo S. Diokno
Genesis R. Fulgencio
Jeanelle C. Lee
J emuel Paolo M, Lobo
Andrew \'1/.Montesa
Mana Maica Angelika Roman

66
 UST GOLDEN NOTES 2010

:. CHAPTER IV 11. In court awards, wages may be

. PROHIBITIONS REGARDING
'., ART. 112. NON-INTERFERENCE
:, -- -IN-DISPOSAL OF WAGES
Q: What is the rule on non-interference
disposal of wages?
WAGES subject of execution or attachment,
but only for debts incurred for food,
shelter, . clothing, and medical
attendance. (Art. 1703, Civil Code)
12. Salary deduction of a member of a
or legally established cooperative. (R.A
6938, Art. 59)

A: No employer (Er) shall: Q: An explosion in a mine site resulted in

1. Limit or otherwise interfere with the the death of 50 miners. At the time of the
freedom of any Ee to dispose. of his accident
wages (1) the mining company has not yet paid
2. Force, compel, or oblige his Ees to the wages, OT, holiday and rest day
purchase merchandise, commodities compensation of the deceased miners;
or other property from any person, or (2) all the deceased miners owed the
otherwise make use of any store, or miners Cooperative Union sums of money;
service of such Er or any other (3) the mining company was served by a
person sheriff writs of garnishment of wages of
some of the deceased miners by virtue of
final Judgments in several collection suits.
. ART. 113. WAGE DEDUCTIONS
After the accident, the wives, paramours,
Q: What Is the rule in wage deductions? brothers, sisters and parents of the
deceased miners filed their claims for
A: unpaid wages, OT, holiday and rest day
GR: It is strictly prohibited compensation. The company has
acknowledged its obligations. However, it
XPN: is in a quandary as to how to adjudicate the
1. Deductions under Art. 113 for conflicting claims; and whether it can
insurance premiums deduct from the monies due the miners
2. Union dues in cases where the right their unpaid debts with the credit union.
of the worker or his union to check off
has been recognized by the employer How will you advise the mining company
(Er) or authorized in writing by the on the ff:
individual worker concerned (Art 1) Can the mining company defer
113). Art. 241 (0) provides that special payment of the money claims until
assessments may be validly checked- an appropriate court has ruled on
off provided that there is an individual the conflicting claims?
written authorization duly signed by 2) Can the mining company deduct
every employee (Ee). from the amount due to each miner
3. Deductions for SSS, Medicare and an amount equivalent to their debt
Pag-ibig premiums and remit the same to the credit
4. Taxes withheld pursuant to the Tax union?
Code
5. Deductions under Art. 114 for loss or A:
damage to tools, materials or 1. I will advise the mining company to
equipments pay to the respective heirs of the
6. Deductions made with the written deceased miners whatever the
authorization of the Ee for payment to unpaid wages were, OT, holiday and
a third person. (Sec 13, Rule VIII, rest day compensation of said
Book 11/of the IRR) deceased miners without the
7. Deductions as disciplinary measures necessity of intestate' proceedings.
for habitual tardiness (Opinion dated The claimants, if they are all of age
March 10, 1975 ofthe SLE). shall execute an affidavit attesting to
8. Agency fees under Art. 248(e) their relationship to the deceased and
9. Deductions for value of meals and the fact that they are his heirs, to the
facilities freely agreed upon exclusion of all other persons. If any
10. In case where the Ee is indebted to of the heirs is a minor, the affidavit
the Er where such indebtedness has shall be executed on his behalf by his
become due and demandable. (Art. natural guardian or next of kin. The
1706, Civil Code) affidavit shall be presented to the

UNIVERSITY OF .sANTO TOMAS ~~; 67

Pacu{tad d« (])erecno Civit .•
 employer who shall make payment . ARTS.116-119·
through the Secretary of Labor (SLE)
or his representative. The Q: What are considered unlawful acts?
representative of the SLE shall act as
referee in dividing the amount paid A:
among the heirs. (Art. 105 (b), LC) 1. Withholding of any amount, by any
person, indirectly or directly, from the
2. I will advise the mining company not wage of a worker or induce the
to deduct from the amount due to worker to give up any part of his
each miner the amount equivalent to wages by force, stealth, intimidation,
his debt to the credit uuion. The debts thereat or by any other means
of a deceased worker to the credit whatsoever without the worker's
union is not one of the allowable consent. (Art. 116)
deductions under the Labor Code
(LC), or any rules and regulations of 2. Make any deductions from the wages
the DOLE. (Art. 113, LC) (1998 Bar of any Ee for the benefit of the Er or
Question) his representative or intermediary as
consideration of a promise or
Q: What is the rule in check-off? employment or retention in
employment. (Art 117)
A: An Er may be compelled to check-off union
dues from the wages of his Ee when it has 3. Refusal of an Er to payor reduce the
been authorized to do so by the Ee. This is wages and benefits, discharge or in
upon the theory that it is necessary to promote any manner discriminate against any
the welfare and integrity of the union to which employee who has filed any
he belongs. It is a forward step to promote complaint or instituted any
social justice as envisaged by our Constitution. proceeding under this title or has
(Manila Trading and Supply Co. v. Manila testified or is about to testify in such
Trading Labor Ass'n, G.R. No. L-5062, April proceedings. (Art. 118)
29, 1953)
4. For any person to make any
statement, report or record filed or
ART. 114. DEPOSIT FOR LOSS OR' . kept pursuant to the provisions of the
1 DAMAGES . LC Knowing such statement, report or
record to be false in any material
Q: Are Ers mandated to require his Ee to aspect. (Art. 119)
make deposits for loss or damages to
materials of the former?
\ ART. 125. FREEDOM TO BARGAIN

Q: Is the worker free to bargain as regards

A: wages?
GR: No Er shall require his worker to make
deposits for the reimbursement of loss or A: The question of minimum wage is beyond
damage to material, equipment, or tools the sphere of bargaining of the parties. It is not
supplied by the Er. negotiable. Under R.A. 6727, what the law
prohibits is bargaining for wages below the
XPN: When the trade, occupation or floor set by law or Wage Order. The worker is
business of the Er recognizes, or considers free to bargain for higher wages.
the practice of making deductions or
requiring deposits necessary or desirable.
However, the same does not apply to or
permit deposits to defray any deficiency
which a taxi driver may incur in the
remittance of his boundary. (Five J Taxi v.
NLRC, G.R. No. 111474, Aug. 22, 1994)
 UST GOLDEN NOTES 2010

. ART. 12S. PROHIBITION AGAINST

. INJUNCTION

Q: Does injunction lie against

NWPC/RlWPB.

A: No ..Proceedings of the National Wages and

Productivity Commission or the RTWPB are
beyond the reach of the injunction powers of
judicial or quasi-judicial bodies.

Q: What is the purpose ~f prohibition

against injunction?

A: In order for the National Wages and

Productivity Commission or the RTWPB to
perform its powers and functions speedily
without regard to unnecessary interventions
that may tremendously affect the wage fixing
functions. (Poouiz, 2005)

Academics Committee
Chairperson: Abraham D. Genuine II
Vice-Chair jor Academics: Jeannie J\. Laurentino
Vice-Chair jar Admin & Finance: Aissa Celine H. Luna
Vice-Chair jar Layout & DeSign: Loise Rae G. Naval

Labor Law Committee

Subject Head' Lester J ay "\Ian E. Flores II
Assistant Subject Head' Domingo B. Diviva V

Members:
Rene Francis P. Batalla
Diane Camilla R. Borja
Maria Kristina L. Dacayo-Garcia
Christian Nino A. Diaz
Angelo S. Diokno
Genesis R. Fulgencio
Jeanelle C. Lee
J emuel Paolo M. Lobo
Andrew W. Montesa
Maria Maica Angelika Roman

UN! V E R SIT Y 0 F S P. N ToT 0 il: Po S ~Q~ 69

Pacu{taa ae Derecho Civil '.'.
 LABOR STANDARDS: SPECIAL GROUPS OF EMPLOYEES: WOMEN

f TITLE III 3. Work is necessary to prevent serious

, WORKING CONDITIONS FOR SPECIAL loss to perishable goods
I GROUPS OF EMPLOYEES
! CHAPTER I . 4. Woman Ees
\ EMPLOYMENT.OF WOMEN a. Holds a responsible position of
managerial or technical nature,
or
b. Has been engaged to provide
Q: What is the coverage of this Title? health
and welfare services
A:
GR: It covers all Er, whether operating for 5. Nature of the work
profit or not including charitable, religious a. Requires .the manual skill and
and educational institutions. (Sec. 1, Rule dexterity of women workers
XII, Book III, IRR) and
b. The same cannot be performed
XPNs: with
1. GOCCs equal efficiency by male workers
2. Ers of househelpers and those in
their personal service only insofar as 6. Women Ees are immediate members
said workers are concerned of the establishment or undertaking

Q: What is night work prohibition with 7. In analogous cases exempted by the

regard to women workers? SLE in appropriate regulations. (Art.
131)
A:
GR: No woman regardless of age shall be Note: The operation of Call Contract Centers
employed or permitted to work, with or which provides offshore case solutions to US
without compensation in any: based clients who phone in to conduct product
inquiries and technical support, operating for
1. Industrial undertaking or branch 24/7, has been exempted from the prohibition
considering the inevitable time difference
thereof between 10pm and 6am of
between the US and the Phi Is. and the peak time
the following day.
for its operation is between 8:00 pm to 10:00 am
Manila time, thereby making it necessary for 80%
2. Commercial or non-industrial of its Ees, including women, to work during
undertaking or branch thereof, other graveyard shift. (BWC-WHSD Opinion No. 491, s.
than agricultural, between midnight 2003)
and 6am of the following day

3. Agricultural undertaking at nighttime : ART. --------~---~--

132. FACILITIES' FOR WOMEN
- -- ------- ~- --
unless she is given period of rest not
less than 9 consecutive hours. Q: What are facilities for women?

A: SLE may require Ers to:

XPNS: 1. Provide seats which are proper for
1. Actual or impending emergencies women
a. Caused by serious accident, fire, 2. Establish separate toilet rooms and
flood, typhoon, earthquake, lavatories for men and women
epidemic, other disasters, or 3. Provide at least one dressing room
calamity for women
b. To prevent loss of life or property 4. Establish a nursery in the
or establishment
c. In case of force majeure or 5. Determine appropriate minimum age
d. Imminent danger to public safety and other standards for retirement or
termination of employment in special
2. Urgent work occupations such as those of flight
a. To be performed on machineries, attendants and the like
equipment or installations,
b. To avoid serious loss which the
Er
would otherwise suffer

70
 UST GOLDEN NOTES 2010

,- ART. 134. FAMILY PLANNING SERVICES 4. Denying any woman Ee benefits

provided by law. (Art. 137)
Q: .Are Ers mandated to provide family
planning services? 5. Discharge any woman for the
purpose of preventing her from
A: Ers who habitually employ more than 200 enjoying any of the benefits provided
workers in any locality shall provide free by law. (Art. 137)
family-planning services to employees-
spouses which shall include, but not limited to, 6. Discharging such woman on account
the application or use of contraceptive pills and of her pregnancy, or while on leave or
intra-uterine devices. (Sec. 11, Rule XII, Book in confinement due to her pregnancy.
II. IRR of the LC) Q (Art. 137)

7. Discharging or refusing the admission

:' ARTS. 135 -137 of such woman upon returning to her
work for fear that she may again be
Q: What are the unlawful acts against pregnant. (Art. 137)
women Ee?
Note: Discrimination in any form from pre-
employment to post employment. including hiring,
A: promotion or assignment, based on the actual,
1. Discrimination with respect to the perceived or suspected HIV status of an
terms and conditions of employment individual is unlawful. (Philippine AIDS Prevention
and Control Act of 1998, [R.A. 8504])
solely on account of sex
a. Payment of lesser compensation
Under Sec. 2 of R.A. 9710 or the Magna Carta of
to a female Ee as against a male
Women, the State condemns discrimination
Ee for work of equal-value against women in all its forms and pursues by all
b. Favoring a male Ee with respect appropriate means and without delay the policy of
to promotion, training eliminating discrimination against women in
opportunities, study and keeping with the Convention on the Elimination of
scholarship grants on account of All Forms of Discrimination Against Women
gender. (Art. 135) (CEDAW) and other international instruments
c. Favoring a male applicant with consistent with Philippine law. The State shall
respect to hiring where the accord women the rights, protection, and
particular job can equally be opportunities available to every member of
handled by a woman society.
d. Favoring a male Ee over a
female Ee with respect to The State shall take steps to review and, when
dismissal of personnel. necessary, amend and/or repeal existing laws
that are discriminatory to women within three (3)
2. Stipulating, whether as a condition for years from the effectivity of this Act. (Sec. 12.
R.A. 9710)
employment or continuation of
employment:
a. That a woman Ee shall not get Q: Can an individual, the sole proprietor of
married, or a business enterprise, be said to have
b. That upon marriage, such violated the Anti-Sexual Harassment Act of
woman Ee shall be deemed 1995 if he clearly discriminates against
resigned or separated. (Art. 136) women in the adoption of policy standards
for employment and promotions in the
Note: A woman worker may not be enterprise? Explain.
dismissed on the ground of dishonesty
for having written "single" on the space A: When an employer (Er) discriminates
for civil status on the application sheet, against women in the adoption of policy
contrary to the fact that she was standards for employment and promotion in
married. (PT& T Co. v. NLRC, GR. No. his enterprise, he is not guilty of sexual
118978, May 23, 1997) harassment. Instead, the Er is guilty of
discrimination against women Ees which is
3. Dismissing, discriminating or declared to be unlawful by the LC.
otherwise prejudice a woman Ee by
reason of her being married. (Art. For an Er to commit sexual harassment, he -
136) as a person of authority, influence or moral
ascendancy should have demanded,

U N I V E R SIT Y 0 F SAN ToT 0 MAS (:) 71

PacuCtaa ae (])ereChO Civif '9-
 LABOR STANDARDS: SPECIAL GROUPS OF EMPLOYEES: WOMEN

requested or otherwise required a sexual favor Simbol, G.R., No. 164774, April 12,
from his Ee whether the demand, request or 2006)
requirement for submission is accepted by the
object of said act. (2003 Bar Question) Q: What is the importance of the BFOQ
Rule?
Q: At any given time, approximately 90% of
the production workforce of a A:
semiconductor company are females. 75% 1. To ensure that the Ee can effectively
of the female workers are married and of perform his work
child-bearing years. It is imperative that the 2. So that the no-spouse rule will not
Company must operate with a minimum impose any danger to business.
number of absences to meet strict delivery
schedules. In view of the very high number Q: Tecson was employed by Glaxo as
of lost working hours due to absences for medical representative who has a policy
family reasons and maternity leaves, the against Ees having relatiOnships against
company adopted a policy that it will competitor's Ees. Tecson married Bettsy, a
employ married women as production Branch coordinator of Astra, Glaxo's
workers only if they are at least 35 yrs of competitor. Tecson was transferred to
age. Is the policy violative of any law? another area. Tecson did not accept such
transfer.
A: Yes, it is violative of Art. 140 of the LC Is the policy of Glaxo valid and reasonable
which provides that no employer shall so as to constitute the aet of Teeson as
discriminate against any person in respect to willful disobedience?
terms and conditions of employment on
account of his age. (1998 Bar Question) A: The prohibition against personal or marital
relationships with Ees of competitors
Q: What is the no-spouse employment companies upon Glaxo's Ees is reasonable
policy? under the circumstances because
relationships of that nature might compromise
A: the interest of the company. Glaxo does not
§B: impose an absolute prohibition against
1. Policy banning spouses from working relationships between its Ees and those of
in the same company. competitor companies. Its Ees are free to
2. May not facially violate Art. 136 of the cultivate relationships with and marry persons
LC but it creates a disproportionate of their own choosing. What the company
effect and the only way it could pass merely seeks to avoid is a conflict of interest
judicial scrutiny is by showing that it is between the Ee and the company that may
reasonable despite the discriminatory arise out of such relationships. Furthermore,
albeit disproportionate effect. the prohibition forms part of the employment
contract and Tecson was aware of such
XPN: Bona fide occupational qualification restrictions when he entered into a relationship
rule (BFOQ) with Bettsy. (Duncan Asso. of Detailman-
PTGWO v. G/axo WeI/come Phil. Inc., G.R.
Q: What Is the BFOQ rule? No. 162994, Sep.17, 2004),

A: There must be a finding of any BFOQ to . ART. 138. CLASSIFICATION OF CERTAIN ,

justify an Ers no spouse rule. There must be a r - WOMEN WORKERS
compelling business necessity for which no
alternative exist other than the discriminating Q: Who are covered under this Title?
practice.
A: Any women who is permitted or suffered to
To justify a BFOQ the employer must prove work:
two factors: 1. With or without compensation
1. That the employment qualification is 2. In any night club, cocktail lounge,
reasonably related to the essential massage clinic, bar or similar
operation of the job involved; and establishment
2. That there is a factual basis for 3. Under the effective control or
believing that all or substantially all supervision of the Er for a substantial
persons meeting the qualification period of time
would be unable .to properly perform 4. Shall be considered as an Ee of such
the duties of the job. (Star Paper v. establishment for purposes of labor
and social legislation.

72
 UST GOLDEN NOTES 2010

;' -CHAPTER II B. Above 15 but below 18 - may be

; EMPLOYMENT OF MINORS employed in any non-hazardous work

~:., ART. ·139. MINIMUM EMPLOYABLE AGE C. Above 18 - no prohibition

Q: What are the general prohibitions? Q; What is the duty of the Er before
engaging child into work?
A:
GR: A: The Er shall first secure a work permit from
1. No person under 18 years of age will the DOLE which shall ensure observance of
be allowed to be employed in an the requirements. (Sec. 12, R.A. 7160)
undertaking which is hazardous or
deleterious in nature. . Q: What is the rule regarding the issuance
2. No Er shall discriminate against any of work certificatesl permits for children at
person in respect to terms and least 15 but below 18 years of age?
conditions of employment on account
of his age. A: The issuance of a DOLE Certificate to
XPN: youth aged 15 to'"below 18 years of age is not
A. Below 15 yrs. Old required by law. No employer shall deny
1. The child works directly under opportunity to any such youth applying for
the sole responsibility of his employment merely on the basis of lack of
parents, or guardians who work permit or certificate of eligibility for
employ members of his family, employment. Any young person aged 15 to
subject to the following below 18 years of age may present copy of
conditions: this DOLE advisory to any employer, job
a. Employment does not provider, government authority, or his/her
endanger the child's safety, representative when seeking employment or
health and morals anytime during employment. (DOLE
b. Employment does not impair Department AdviSOry No. 01-08)
the child's normal dev't
c. Er-parent or legal guardian Q: What is a non-hazardous work?
provides the child with the
primary and/or secondary A: It is any work or activity in which the Ee is
education prescribed by the. not exposed to any risk which constitutes an
Dept. of Education imminent danger to his safety and health.

2. The child's employment or Q: What are hazardous workplaces?

participation in public
entertainment or information A:
through cinema, theater, radio or 1. Nature of work exposes the workers to
television is essential provided: dangerous environmental elements,
a. Employment contract is contaminants or work conditions;
concluded by the child's
parents or legal guardian, 2. Workers are engaged in construction
b. With the express agreement work, logging, fire-fighting, mining,
of the child concerned, if quarrying, blasting, stevedoring, dock
possible, and work, deep-sea fishing, and mechanized
c. The approval of DOLE, the farming;
following must be complied 3. Workers are engaged in the
with: manufacture or handling of explosives and
i. The employment does not other pyrotechnic products;
involve advertisement or 4. Workers use or are exposed to heavy
commercials promoting or power-driven tools.
alcoholic beverages,
intoxicating drinks,
tobacco and its by-
products or exhibiting
violence
ii. there is a written contract
approved by DOLE
iii. the conditions provided in
the first instance are met.

UNIVERSITY OF SANTO TOMAS

PacuCtaa de <Derec/io CiviC
 LABOR STANDARDS: SPECIAL GROUPS OF EMPLOYEES: MINORS

Q: You were asked by a paint 4. Art. 110 - If a domestic helper is

manufacturing company regarding the under 16 years of age, the head of
possible employment as a mixer of a the family shall give him an
person, agQd 17, who shall be directly opportunity to complete at least
under the care of the section supervisor. elementary education as required
What advice would you give? Explain under Art. 71.
briefly.
Q: What are the provisions under the RPC
A: I will advise the paint manufacturing on child labor?
company that it cannot hire a person who is
aged 17. Art 139 (c) of the LC provides that a A:
person below 18 yrs of age shall not be 1. Art. 273 - Exploitation of Child labor
allowed to work in an undertaking which is 2. Art. 278 - Exploitation of Minors
hazardous or deleterious in nature as
determined by the SLE. Paint manufacturing Q: A spinster school teacher took pity on
has been classified by the SLE as a hazardous one of her pupils, a robust and precocious
work. (2002 Bar Question) 12-year old boy whose poor family could
barely afford the cost of his schooling. She
Q: What are the prohibitions on the lives alone at her house near the school
employment of children in certain after her housemaid left. In the afternoon,
advertisements? she lets the boy do various chores as
cleaning, fetching water and all kinds of
A: No employment of child models in all errands after school hours. She gives him
commercial advertisements promoting: rice and P30.00 before the boy goes home
1. Violence at 7:00 every night. The school principal
2. Alcoholic beverages learned about it and charged her with
3. Intoxicating drinks violating the law which prohibits the
4. Tobacco and its by products employment of children below 15 years of
age. In her defense, the teacher stated that
Q: What are the pertinent provisions of the the work performed by her pupil is not
Child and Youth Welfare Code (P.O. 603)? hazardous, and she invoked the exception
provided in the Department Order of DOLE
A: for the engagement of persons in domestic
1. Art. 107 - Children below 16 years of and household service. Is her defense
age may be employed to perform light tenable? Reason?
work which is not harmful to their
safety, health or normal development A: No, her defense is not tenable. Under Art.
and which is not prejudicial to their 139 of the LC on "minimum employable age",
studies. no child below 15 years of age shall be
employed except when he works directly under
2. Art. 108 - The Er shall submit to the sole responsibility of his parents or
DOLE a report of all children guardian, the provisions of the alleged DO of
employed by him. DOLE to the contrary notwithstanding. A mere
DO cannot prevail over the-express prohibitory
3. Art. 109 - Every Er in any provisions of the LC. (2004 Bar Question)
commercial, industrial or agricultural Q: Determine whether the following minors
establishment or enterprise shall should be prohibited from being hired and
keep: from performing their respective duties
a. A register of all children indicated hereunder:
employed by him, indicating
dates of their birth 1. A 17-year old boy working as miner at
b. A separate file for the written the Walwadi Mining Corporation.
consent to their employment
given by their parents A: Yes, he should be prohibited from being
c. A separate file for their hired and from performing the duties of a
educational and medical miner because such constitutes hazardous
certificates work under D.O. No. 04 Series of 1999. Art.
d. A separate file for special work 139 (c) of LC expressly prohibits the
permits issued by the SLE in employment of persons below 18 years of age
accordance with existing laws. in an undertaking which is hazardous or
deleterious in nature as determined by the
SLE.
 UST GOLDEN NOTES 2010

2. An 11-year old boy who is an the guidelines issued by the SLE. Working as
accomplished singer and performer in a dealer in a casino is classified as hazardous
different parts of the country. under D.O. No. 04 Series of 1999 as it
exposes children to physical, psychological or
A: No, he should not be prohibited from being sexual abuses. (2006 Bar Question)
hired and from performing as a singer. Under
Art. VIII Sec. 12 par. 2 of R.A. 7619 as
amended by R.A. 7658, this constitutes an
exception to the general prohibition against the
employment of children below 15 years of age,
provided that the following requirements are
strictly complied with: ,1,

1. The Er shall ensure the protection,

health safety and morals of the child
2. The Er shall institute measures to
prevent the child's exploitation or
discrimination taking into account the
system and level of remuneration,
and the duration and arrangement of
working time; and
3. The Er shall formulate and
implement, subject to the approval
and supervision of competent
authorities, a continuing program for
training and skill acquisition of the
child. Moreover, the cfiild must be
directly under the sole responsibility
of his parents or guardian and his
employment should not in any way
interfere with his schooling.

3. A 15-year old girl working as a library

assistant in a girls' high school.

A: No, she should not be prohibited from Academics Committee

working as a library assistant because the
prohibition in the LC against employment of
persons below 18 years of age merely pertains
to employment in an undertaking which is
hazardous or deleterious in nature as identified
in the guidelines issued by the SLE working as
a library assistant is not one of undertakings
identified to be hazardous under D.O. No 04
Series of 1999.
Chairperson: ;\braham D. Genuino II
Vice-Chair for Academics: Jeannie A. Laurentino
Vice-Chair for Admin & Finance: Aissa Celine H. Luna
Vice-Chair for Layout & Design: Loise Rae G. Naval
Labor Law Committee
Subject Head' Lester Jay Alan E. Flores II
Assistant Subject Head' Domingo B. Diviva V

4. A 16-year old girl working as model Members:

promoting alcoholic beverages. Rene Francis P. Batalla
A: Yes, she should be prohibited from working Diane Camilla R. Borja
as a model promoting alcoholic beverages.
Maria Kristina L. Dacayo-Garcia
R.A. 7610 categorically prohibits the
Christian Nino A. Diaz
employment of child models in all commercials
or advertisements promoting alcoholic Angelo S. Diokno
beverages and intoxicating drinks, among Genesis R. Fulgencio
other things. J eanelle C. Lee
5. A 17-year old boy working as a dealer in J emuel Paolo M. Lobo
a casino. Andrew W. Montesa
A: Yes, he should be prohibited from working Maria Maica Angelika Roman
as a dealer in casino, because Art. 140 of the
LC prohibits the employment of persons below
18 years of age in an undertaking which is
hazardous or deleterious in nature identified in
UNIVERSITY OF SANTO TOMAS
PacuCtaa ae lDerecfio CiviC
 LABOR STANDARDS: SPECIAL GROUPS OF EMPLOYEES: HOUSEHELPERS

CHAPTER III 5. Non-assignment to a work in a

EMPLOYMENT OF HOUSEHELPERS commercial, industrial or agricultural
, ----;--- - -----ARTS-:--f41-=1S2.- - ------ ~ ~;-. enterprise at a wage or salary rate
lower than that provided for
Q: What is domestic or household agricultural or non-agricuitural
service? workers. (Art. 145)

A: 6. Ees under 18 years of age shall be

1.
Services in the Ers home given opportunity for at least
2.
Usually necessary or desirable elementary education. The cost of
3.
For the maintenance and education shall be part of the HH's
employment thereof compensation, unless otherwise
4. Includes ministering to the personal stipulated. (Art 146)
comfort and convenience of the
members of the Ers household 7. Should be treated in a just and
5. Including services of family drivers. humane manner. (Art. 147)
Q: Who is a househelper (HH)?
8. Not to be treated with physical
A: A HH is synonymous to domestic servant . violence (Art. 147)
1. Any person, male or female
2. Who renders services in and about the 9. Suitable and sanitary living
Ers headquarters as well as adequate
home and food and medical attendance. (Art.
3. Services are usually necessary or 148)
Desirable for the maintenance and
enjoyment thereof, and 10. Termination of employment should be
4. Ministers exclusively to the personal a. upon expiration of term of
comfort and enjoyment of Ers family employment, or
b. based on just cause (Art. 149)
Note: The children and relatives of a HH who live
under the Ers roof and who share the 11. Indemnity for unjust termination of
accommodations provided for the HH by the Er service
shall not be deemed as HH's if they are not
otherwise engaged as such and are not required 12. Employment certification as to nature
to perform any substantial household work. (Sec and duration of service and efficiency
3, Rule XII, Book III, IRR) and conduct of househelper.

The definition of a HH cannot be interpreted to Q: What is the minimum wage for HHs?
include househelp or laundry women working in
staffhouses of a company. (APEX Mining CO., A:
Inc., v. NLRC, GR. No. 94951, April 22, 1991) 1. P800 a month for HHs in Metro Manila.
2. P650 a month for HHs in other
Q: What are the rights of HHs? chartered cities or first class
3. P550 a month for HHs in other
A: municipalities.
1. Original contract of domestic service
shall not last for more than 2 years Note: The minimum cash wage rates shall be
but it may be renewed by the parties. paid to the HHs in addition to lodging, food and
(Art. 142) medical attendance.

2. Entitled to minimum wage in addition Q; Is there an OT Pay for HHs?

to lodging, food, and medical
attendance. (Art. 144) A: No. The LC is silent on the grant of OT pay,
HP, Premium Pay and SIL to those engaged in
3. Employment contract should be the domestic or household service. Moreover
reviewed every 3 years with the end Art. 82 of LC expressly excludes domestic
view of improving the terms and helpers from its coverage. (Ultra Villa Food
conditions of employment. (Art. 143) Haus v. Geniston, G.R. No. 120473, June 23,
4. SSS benefits for those who are 1999)
receiving at least Pi ,000 per month.
(Art. 143)

76
 UST GOLDEN NOTES 2010

Q: Erlinda worked as a cook, preparing the
lunch and merienda of the Ees of
Remington Industrial Sales Corp. She
worked at the premises of the company.
When Erlinda filed an illegal dismissal
case, Mr. Tan, the managing director of
Remington Corp. claimed that Erlinda was
a domestic helper, and not a regular Ee of
Remington Corp. Mr. Tan argued that it is
only when the househelper or domestic
servant is assigned to certain aspects of
the business of the Er ~hat ~such
househelper or domestic servant may be
considered as such an employee. Is Erlinda
a domestic or househelper?
A: No, Erlinda is clearly not a househelper. A
"househelper" or "domestic servant" under the
Implementing Rules of the LC is one who is
employed in the Er's home to minister
exclusively to the personal comfort and
enjoyment of the Er's family. A househelper,
domestic servant or laundrywoman in a home
or in a company staffhouse is different in the
sense that in a corporation or a single
proprietorship engaged in business or industry
or any agricultural or similar pursuit, service is
being rendered in the staffhouses or within the
premises of the business of the Er. In such
instance, they are Ees of the company or Er in
the business concerned, entitled to the
privileges of a regular Ee. The mere fact that
the househelper or domestic servant is
working within the premises of the business of
the employer and in relation to or in'connection
with its business, as in its staffhouses for its
guest or even for its officers and Ees, warrants
the conclusion that such househelper or
domestic servant is and should be considered
a regular Ee and not a househelper.
(Remington Industrial v. Castaneda, G.R. Nos.
169295-96, Nov.20, 2006)
G.R. No. 127864, Dec. 22. 1999), (2000 Bar
Question)
ART. 149. INDEMNITY FOR UNJUST
TERMINATION OF SERVICE .
Q: What are the rules for indemnity?
A:
1. If the period for household service is
fixed, neither the Er nor the
househelper may terminate the
contract before the expiration' of the
term except for just cause.
2. If the househelper is unjustly
dismissed, he or she shall be paid the
compensation already earned plus
that for the 15 days by way of
indemnity.
3. If the househelper leaves without
justifiable reason, he or she shall
forfeit any unpaid salary due him or
her not exceeding 15 days.
Q: When can the HH demand for
employment certification?
A: Upon the severance of the household
service relationship, the househelper may
demand from the Er a written statement of the
nature and duration of the service and his/ her
efficiency and conduct as househelper.

Q: NBC has a resthouse and recreational

facility in the highlands of Tagaytay City for
the use of its top executives and corporate
clients. The resthouse staft includes a
caretaker, two cooks and a laundrywoman.
All of them are reported to the SSS as
domestic or household Ees of the
resthouse and recreational facility and not
of NBC. Can NBC legally consider the
caretaker, cooks and laundrywoman as
domestic Ee's of the resthouse and not of
NBC?

A: No, they are not domestic Ees. They are

NBC's Ees because the resthouse and
recreational facility are business facilities as
they are for use of the top executives and
clients of NBC.(Traders Royal Bank v. NLRC,

UNIVERSITY OF SANTO TOMAS

Pacu(taa ae (])ereclio CiviC
 LABOR STANDARDS: SPECIAL GROUPS OF EMPLOYEES: HOME WORKERS
I ART. 153. REGULATION OF INDUSTRIAL
HOMEWORKERS
")
, his work?
;: Q: Who are homeworkers (HW)?
A: They are those who perform in or about his
own home any processing or fabrication of
goods or materials, in whole or in part, which
have been furnished directly or indirectly, by
an Er and sold thereafter to the latter.
Q: Who is the Er of HW?
A: Includes any person, natural or artificial
who, for his account or benefit, or on behalf of
any person residing outside the country,
directly or indirectly, or through an Ee, agent
contractor, subcontractor or any other person:
1. Delivers or causes to be delivered,
any goods, articles or materials to be
processed or fabricated in or about a
home and thereafter to be returned or
to be disposed of or distributed in
accordance with his directions.
2. Sells any goods, articles or materials
to be processed or fabricated in or
abut a home and then rebuys them
after such processing or fabrication,
either by himself or through some
other person.
Q: Can the Er make deductions on HW's
earnings?
A:
GR: No Er, contractor or subcontractor
shall make any deduction from the HWs
earnings for the value of materials which
have been lost, destroyed, soiled or
otherwise damage.
XPN: Unless the ft. conditions are met:
1. The HW is clearly shown to be
responsible for the loss or damage
2. The Ee is given reasonable
opportunity to show cause why
deductions should not be made;
3. The amount of such deduction is fair
and reasonable and shall not exceed
the actual loss or damages; and
4. The deduction is made at such rate
that the amount deducted does not
exceed 20% of the HW's earnings in
a week.
78
Q: What is the duty of the Er in case the he
contracts with another the performance of
A: It shall be the duty of the Er to provide in
such contract that the Ees or HWs of the
contractor and the latter's subcontractor shall
be paid in accordance with the LC.
Q: What is the liabilty of the Er if the
contractor or subcontractor fails to pay the
wages or earnings of his Ees?
A: Er shall be jOintly and severally liable with
the contractor or sub-contractor to the workers
of the latter to the extent that such work is
performed under such contract, in the same
manner as if the Ees or HWs were directly
engaged by the Er.
Q: Can HWs form labor organizations?
A: Yes. DO No.5, replacing Rule XIV of the
IRR Book 3 of the LC, authorizes the formation
and registration of labor organization of
industrial HWs. It also makes explicit the Ers
duty to pay and remit SSS, Philhealth and
ECC premiums.
Q: What are the prohibitions against
homework?
A: No homework shall be performed on:
1. Explosives, fireworks and similar
articles;
2. Drugs and poisons; and
3. Other articles, the processing of
which requires exposure to toxic
substances. (Sec. 13, Rule XIV, Book
1I1,IRR)
Q: Distinguish househelpers from
homeworkers.
A:
HOUSEHELPERS HOMEWORKERS
Performs in or about
his own home any
processing or
Minister to the fabrication of goods or
personal needs and materials, in whole or in
comfort of his Er in the part, which have been
latter's home furnished directly or
indirectly, by an Er and
sold thereafter to the
latter.
 UST GOLDEN NOTES 2010

Q: Josie is the confidential secretary of the

Chairman of the Board of the bank. She is
presently on matemity leave. In an
arrangement where the Chairman of the
Board can still have access to her services,
the bank allows her to work in her
residence during her leave. For this
purpose, the bank installed a fax machine
in her residence, and gave her a ceilphone
and a beeper. Is Josie a homeworker under
the law? Explain.
@ ~
A: No, she is actually an office worker. She is
not an industrial homeworker who accepts
work to be fabricated or processed at home for
a contractor, which work, when finished, will be
returned to or repurchased by said contractor.
(Art. 155,LC) (2000Bar Question)

Academics Committee
Chairperson: Abraham D. Genuino II
Vice-Chair for Academics: Jeannie A. Laurentino
Vice-Chair for Admin & Finance: Aissa Celine H. Luna
Vice-Chair for Loyout & Design: Loise Rae G. Naval

Labor Law Committee

Subject Head' Lester Jay Alan E. Flores II
Asst. Subjed Head' Domingo B. Diviva V

Members:
Rene Francis P. Batalla
Diane Camilla R. Borja
Maria Kristina L. Dacayo-Garcia
Christian Nino A. Diaz
Angelo S. Diokno
Genesis R. Fulgencio
Jeanelle C. Lee
] emuel Paolo M. Lobo
Andrew W. Montesa
Maria Maica Angelika Roman

UNIVERSITY OF SANTO TOMAS ~! 79

I£acu{taa ae <Derecfzo CiviC .•
 LABOR RELATIONS

LABOR RELATIONS Q: What is the control test?

,. POLICY AND DEFINITIONS A: Under the control test, an Er-Ee relationship

Q: What is labor relations?
A: It refers to the interactions between
employer (Er) and employees (Ees) or their
representatives and the mechanism by which
the standards and other terms and conditions
of employment are negotiated, adjusted and
enforced.
exists where the person for whom the services
are performed reserves the right to control not
only the end achieved, but also the manner
and means to be used in reaching that end. It
is regarded as the most crucial and
determinative indicator of the presence or
absence of an Er-Ee relationship. (Almirez v.
Infinite Loop Technology Corp., G.R. No.
162401, Jan. 31, 2006, J. Carpio-Morales)

Q: What is labor relations law? Q: For whose benefit is the control test
accorded?
A: It defines the status, rights and duties and
the institutional mechanisms that govern the A: For the benefit of the worker.
individual and collective interactions of Ers,
Ees or their representatives. Q: Who has the burden of proof that worker
is an Ee of Er?
It is concerned with the stabilization of
relations of Er and Ees and seeks to forestall A: Burden is on the part of the worker that he
and adjust differences between them by the is an Ee but need not prove that he was
encouragement of collective bargaining and actually controlled.
the settlement of labor disputes through
conciliation, mediation and arbitration. Note: For control test to apply, it is not essential
for the Er to actually supervise the performance
Q: Distinguish labor relations from labor of duties of the Ee, it being enough that it has the
standards. right to wield the power. (Calamba Medical
Center, Inc., vs. NLRC, G.R. No. 176484, Nov.
25, 2008, J. Carpio-Morales)
A:
Labor
: Relations Labor Standards Q: What happens if there is no certainty
Regulates the Prescribes the minimum that the worker under the control test is an
relations terms and conditions of Ee?
between Ers employment which the Er is
and workers required to grant its Ees A: Economic reality test will be used to
determine whether a worker is an Ee of the Er.
Q: What is collective bargaining (CB)?
Q: What is economic reality test?
A: It is a democratic framework to stabilize the
relation between labor and management to A: It is another important test of an Er-Ee
create a climate of sound and stable industrial relationship which inquires whether or not a
peace. worker is spending all his time for the Er and is
dependent on the latter for his income.
It is the process of negotiation between an Er
and Ees' organization or union to reach Note: There is no problem if worker is controlled
agreement on the terms and conditions of by an Er. He is an Ee under the control test.
employment for a specified period.
Q: What are the rights of workers
Note: CB process is possible only when there is guaranteed by the 1987 Constitution?
a labor organization, i.e. Labor union, Ees-ass'n.
A: Sec. 3, Art. X/II of the 1987 Constitution
Q: Can there be CB without an Er-Ee guarantees to all workers their right to:
relationship? 1. Self - organization;
2. CB and negotiations;
A: No. Er-Ee relationship must exist so that 3. Peaceful concerted activities
labor relations law may apply within an including right to strike in accordance
enterprise. Absent an Er-Ee relation, there is with law;
no basis for organizing for purposes of CB 4. Security of tenure;
since there is no labor relation to speak of. 5. Humane conditions of work;
6. Living wage; and

80
 UST GOLDEN NOTES 2010

7. Participation in policy and decision- Q: When is a labor organization deemed an

making processes involving their Er?
rights and benefits as may be
provided by law. A: When it is acting as such in relation to
persons rendering services under hire,
particularly in connection with its activities for
profit or gain.

Note: The mere fact that respondent is a labor

Q: What are the policy objectives of our
union does not mean that it cannot be considered
labor relations law? an Er for persons who work for it. Much less
A: The State aims to promote: should it be exempted from labor laws. (Bautista
1. Free collective bargaining) (CB) -and v. inciong, GR. No. L-52824, Mar. 16, 1988)
negotiations, including voluntary
arbitration, mediation and conciliation
Q: Who is an employee (Ee)?
as modes of settling labor or
industrial disputes
2. Free trade unionism
A:
1. Any person in the employ of the Er
3. Free and voluntary organization of a
2. Any individual whose work has
strong and united labor movement
ceased as a result of or in connection
4. Enlightenment of workers concerning with any current labor dispute or
their rights and obligations as union because of any unfair labor practice if
members and as Ees he has not obtained any other
5. Adequate administrative machinery
substantially equivalent and regular
for the expeditious settlement of labor
employment
or industrial disputes
3. One who has been dismissed from
6. Stable but dynamic and ju?t industrial work but the legality of dismissal is
peace being contested in a forum of
7. Participation of workers in the
appropriate jurisdiction. (D. O. No. 40-
decision-making processes affecting
03, Mar. 15, 2003)
their rights, duties, and welfare
8. Truly democratic method of regulating Note: The term shall not be limited to the Ees of
the relations between the Ers and a particular Er unless the LC explicitly states.
Ees by means of agreements freely
entered into through CB, no court or Any Ee, whether employed for a definite period or
administrative agency or official shall not, shall, beginning on the first day of service, be
have the power to set or fix wages, considered an Ee for purposes of membership in
rates of pay, hours of work or other any labor union. (Art. 277[c), LC)
terms and conditions of employment,
except as otherwise provided under Q: What is a labor dispute?
the LC.
A: Includes any controversy or matter
concerning:
ART. 212. DEFINITIONS 1. Terms and conditions of employment,
or
Q: Who is an employer (Er)? 2. The association or representation of
persons in negotiating, fixing,
A: Any person acting in the interest of an Er maintaining, changing or arranging
directly or indirectly. The term does not includ~ the terms and conditions of
a labor organization (LO) or any of its officers employment
and agents, except when acting as an Er. 3. Regardless of whether the disputants
(Art. 212[eJ) stand in the proximate relation of Er
and Ee. (Art.212[lj)
An Er is defined as any person or entity that
employs the services of others; one for whom Q: What are the tests on whether a
work and who pays their wages of salaries; controversy falls within the definition of a
any person acting in the interest of an Er; labor dispute?
refers to the enterprise where the LO operates
or seeks to operate. (Sec. 1lSi, Rule I, Book V, A:
IRR) 1. As to nature - It depends on whether
the dispute arises from Er-Ee
relationship, although disputants

UNIVERSITY
PacuCtaa
OF SANTO TOMAS
de IDerecno Civif
~i~
.'
81
 LABOR RELATIONS

need not be proximately "Er' or "Ee" termination; non-issuance of

of another. employment contract

2. As to subject matter - The test Q: Who are the parties to a dispute?

depends on whether it concerns
terms or conditions of employment or A:
association or representation of 1. Primary parties are the Er, Ees and
persons in negotiating, fixing, the union.
maintaining or changing terms or 2. Secondary parties are the voluntary
conditions of employment. arbitrator, agencies of DOLE, NLRC,
Secretary of Labor and the Office of
Q: What are the kinds of labor disputes? the President.

A: Q: What is an inter-union dispute?

1. Labor standard disputes
a. Compensation E.g. A: Any conflict between and among legitimate
Underpayment of minimum labor unions involving representation
wage; stringent output quota; questions for the purposes of CS or to any
illegal pay deductions other contlict or dispute between legitimate
b. Benefits - E.g. Non-payment of labor unions.
holiday pay, OT payor other
benefits Q: What is an intra-union dispute?
c. Working Conditions E.g.
Unrectified work hazards A: Any conflict between and 'among union
members, grievances arising from any
2. Labor relations disputes violation of the rights and conditions of
a. Organizational right membership, violation of or disagreement over
disputes/ULP - E.g. Coercion, any provision of the union's constitution and
restraint or interference in by-laws, or disputes from chartering or
unionization efforts; reprisal or affiliation of union.
discrimination due to union
activities; company unionism; Q: What are rights disputes?
ULP, strike or lockout; union
members' complaint against A: They are claims for violations of a specific
union officers right arising from a contract, i.e. CSA or
b. Representation disputes - E.g. company policies.
Uncertainty as to which is the
majority union; determination of Q: What are interest disputes?
appropriate CS unit; contests for
recognition by different sets of A: They involve questions on "what should be
officers in the same union included in the CSA". Strictly speaking, the
c. Bargaining disputes E.g. parties may choose a voluntary arbitrator to
Refusal to bargain; bargaining in decide on the terms and conditions of
bad faith; bargaining deadlock; employment, but this is impracticable because
economic strike or lockout it will be a value judgment of the arbitrators
d. Contract administration or and not of the parties.
personnel policy disputes - E.g.
Non-compliance with CSA Q: What are contract-negotiation disputes?
provision (ULP if gross non
compliance with economic A: These are disputes as to the terms of the
provisions); disregard of CSA.
grievance machinery; non
observance of unwarranted use Q: What are contract-interpretation
of union security clause; illegal or disputes?
unreasonable personnel
management policies; violation of A: These are disputes arising under an
no-strike/no-Iockout agreement existing CSA, involving such matters as the
e. Employment tenure disputes - interpretation and application of the contract,
E.g. Non-regularization of Ees; or alleged violation of its provisions.
non-absorption of labor only
contracting staff; illegal

82
 UST GOLDEN NOTES 2010

:, RIGHT TO SELF ORGANIZATION 4. Members of the AFP including police

officers, policemen, firemen, and jail
ART. 24.6. NON-ABRIDGEMENT OF RIGHT guards. (Sec. 4, E.O. 180)
" " :'[0 SELF ORGANIZATION 5. Confidential Ees. (Metrolab Industries
Inc. v. Confesor, G.R. No. 108855,
Q: What is the extent of the right to self- Feb. 28, 1996)
organization? 6. Ees of cooperatives who are its
members (Benguet Elec. Coop. V.
A: It includes the right: Ferrer-Calleja, G.R. No. 79025, Dec.
1. To form, join and assist labor 29, 1989); However they may form
organizations for the purpose of worker's association. (NEECO Ees'
Assoc. v. NLRC, G.R. No. 16066,
collective bargaining (CB:) through
representatives of their 'own Jan.24, 2000)
choosing; and 7. Non-Ees. (Rosario Bros. v. Ople,
2. To engage in lawful and concerted G.R. No. L-5390, July 31, 1984)
activities for the purpose of CS or for 8. Gov't Ees, including GOCCs with
their mutual aid and protection. (Art. original charters (Arizala v. CA, G.R.
246) Nos. 43633-34, Sep. 14, 1990)
9. Aliens without a valid working permit
Q: May the right to self-organization be or aliens with working permit but are
nationals of a country which do not
bargained away?
grant Filipinos to the exercise the
A: No. It must be upheld in the absence of right of self-organization and to join or
express provision of the law to the contrary. It assist labor organizations. (Art. 269 of
cannot be curtailed by a CSA. (SPFL v. LC; D.O. NO.9 [1997J, Rule II, Sec. 2)
Calleja, GR. No. 80882, April 24, t989)
Q: What is the concept of non-abridgement
Q: Who are the persons! Ees eligible to join of right to self organization?
a labor organization (LO) for purposes of
CB?
A: It shall be unlawful for any person to
restrain, coerce, discriminate against or unduly
A: The entities covered are all persons interfere with Ees in their exercise of the right
employed in: to self-organization. (Art. 246)
1. Commercial, industrial, and
agricultural enterprises; and Note: Any act intended to weaken or defeat
the right is regarded by law as an offense,
2. Religious, charitable, medical or
educational institutions whether which is technically called "unfair labor
operating for profit or not. (Art. 243) practice".

Q: Who are the personsl Ees eligible to join

a La for mutual aid and protection?

A: The following enjoy the right to self-

organization for mutual aid and protection:
1. Ambulant workers
2. Intermittent workers
3. Itinerant workers
4. Self-employed people
5. Rural workers
6. Those without any definite Ers. (Art.
243)

Q: Who are the personsl Ees not granted

the right to self-organization?

A:
1. High level or managerial gov't Ees.
(Sec. 3, E. O. 180)
2. Ees of int'l organizations with
immunities. (fCMC v. Calleja, G.R.
No. 85750, Sep. 28,1990)
3. Managerial Ees. (Art. 212 of LC)
UNIVERSiTY OF SANTO TOMAS ~. 83
PacuCtaa de <Dereclio CiviC ',.'
 LABOR RELATIONS: SPECIAL GROUPS OF EMPLOYEES

f SPECIAL GROUPS OF EMPLOYEES Note: It is the nature of the Ee's function and not
the nomenclature or title given to his job which
Q: What are the special groups of Ees? determines whether he has a rank-and-file or
managerial status. (Eng'g Equipment, Inc. v.
A: NLRC, G.R. No. L-59221, Dec. 26, 1984)
1. Managerial and supervisory Ees
2. Confidential Ees Q: Who are supervisory Ees?
3. Security guards
4. Members of cooperatives A: Those who, in the interest of the Er,
5. Religious objectors effectively recommend such managerial
6. Gov't Ees actions if the exercise of such authority is not
7. Ees of int'I organizations merely routinary or clerical in nature but
requires the use of independent judgment.
(Sec. 1, Rule I, Book V, IRR)
MANAGERIAL AND SUPERVISORY
; EMPLOYEES ' Q: Who are rank-and-file Ees?

Q: Who are managerial Ees? A: Those whose function is neither managerial

nor supervisory in nature.
A: Those vested with the powers and Q: Are managerial Ees eligible to join,
prerogatives to: assist or form any labor organization (LO)?
1. Lay down and execute management
policies; and/or A:
2. Hire, transfer, suspend, lay-off, recall, GR: No, managerial Ees are prohibited to
discharge, assign or discipline Ees. organize for collective bargaining because
(Sec. 1[hh), Rule I, Book V, IRR) they are the alter egos of the Ers and thus
they are supposed to be on the side of the
Er to act as its representatives, and to see
Q: Distinguish Managerial Ees (ME) in
to it that its interests are well protected.
Labor Standards from ME in Labor
The Er is not assured of such protection if
Relations.
these Ees are union members. (Bulletin
Publishing Co. Inc. v. Sanchez, G.R. No.
A:
74425, Oct. 7, 1986)
t ME under Lab STO I ME under Lab REL
Primary duty consists
Lay down and execute XPN: They are not prohibited from
of the management of
management policies organizing for other purposes such as for
the establishment in
and/or to hire, transfer, mutual aid and protection. (Pagkakaisa ng
which they are
suspend, lay-off, recall, mga Manggagawa sa Triumph tnt'! v.
employed or of a
discharge, assign or Ferrer-Calleja, G.R. No. 85915, Jan. 17,
department or
discipline Ees. 1990)
division.
Does not include the
managerial staff since Q: Is Art. 245 of the LC a violation of the
Includes the officers they are classified as right to self-organization of managerial
and members of the supervisory Ees (may/ Ees?
managerial staff. may not be eligible to
join labor union with A: No. They are not deprived of the right to
rank-and-file Ees) organize. Just like any right, the right to self-
To determine whether organization is not an absolute right. It is
To determine Ees
or not certain Ees are subject to the police power of the State, as
eligibility in
covered by Book III of well as to certain limitation.
joining/forming a labor
the LC on conditions
union.
of employment.
Note: Art. 245 does not absolutely disqualify
managerial Ees from exercising their right to
Q: Does the mere designation of an Ee as association. What it prohibits is merely the right to
"manager" ipso facto make him one? join labor organizations.

A: No. Designation should be reconciled with Q: May supervisory Ees form, assist, join a
the actual job description of the Ee for it is the LO?
job description that determines the nature of
employment". (APC VS. Farolan, G.R. A: Yes. They may form, assist and join LOs on
No. 151370, Oec.4, 2002, J. Carpio-Morales) their own but not with the rank-and-file Ees.
(Art. 245, as amended by R.A. 9481)

84
 UST GOLDEN NOTES 2010

If one exercises independent judgment which
is not subject to the evaluation of other
department heads/superiors, then they may
form a LO on their own (separate from the
rank-and-file).
If their responsibilities do not inherently require
the exercise of discretion and independent
judgment, then they may join the union
composed of the rank-and-file Ees.
Q: What is the test in determinin~ whether
an Ee is managerial or supervisory?
A:
1. Whether a person possesses
authority to act in the interest of his Er
or
2. Whether such authority is not merely
routinary or clerical in nature but
requires the use of independent
judgment.
Note: If recommendatory powers are subject to
evaluation, review, and final action of a
department head or other higher executives of a
company, it is not considered an exercise of
independent judgment as required by law. (Baker
v. Trajano, G.R. No. L-75039, Jan. 28, 1988)
Q: Are professors, associate professors,
and assistant professors high-level Ees?
Note: A LO composed of both rank-and-file and
supervisory Ees is not a LO at all. It cannot for
any guise or purpose be considered a legitimate
LO. (Toyota Motor Phi/so Corp. v. Toyota Motor
Phils Corp. Labor Union, G.R. No. 121084, Feb.
19, 1997)
Q: What is the reason behind the exclusion
of supervisors from unions of rank-and-file
Ees at plant level?
A: Supervisory Ees, while in the performance
of supervisory functions, become the alter ego
~
of management in the making and the
implementing of key decisions at the sub-
managerial level. Certainly, it would be difficult
to find unity or mutuality of interests in a
bargaining unit consisting of a mixture or rank-
and-file and supervisory Ees. 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 Ees within the unit
the proper exercise of their CB rights".
(TMPLU v. Toyota Motor Phils, GR. No.
135806, Aug. 8, 2002)
Q: Is commingling allowed at the federation
level?
A: Yes. The rank-and-ftle union and the
supervisors' union operating within the same
establishment may join the same federation or
national union. (Art. 245, as amended by R.A.
9481)

A: No. They cannot be considered as

exercising managerial or highly confidential CONFIDENTIAL EMPLOYEES
functions as would justify their being
categorized as "high-level Ees". It is the Q: Who are confidential Ees?
University Academic Personnel Committee
(dean, assistant for academic affairs, and chief A: Those entrusted with confidence on
personnel) which formulates policies, delicate matters or with the custody, handling,
standards and rules respecting selection, or care and protection of the Er's property.
compensation, and promotion. Hence, such (NA TU-Republic Planters Bank Supervisors
Ees are considered as rank and file. (UP v. Chapter v. Torres, G.R. No. 93468, Dec. 29,
Ferrer-Calleja, G.R. No. 96189; July 14, 1992) 1994)

Q: What is commingling? Q: What are the criterias to determine

whether one is a confidential Ee?
A: It is membership of supervisory and rank-
and-file Ees in one and the same labor A:
organization. 1. Assist and act in a confidential
capacity, or
Q: Is commingling allowed at the plant 2. Have access to confidential matters
level? of persons who exercise managerial
functions in the field of labor relations.
A: No. Supervisory Ees shall not be eligible for (Philips Industrial Dev't v. NLRC, G.R
membership in the collective bargaining unit of No. 161933, June 25, 1992)
the rank-and-file Ees. (Art. 245, as amended
by R.A. 9481) Note: The 2 criteria are cumulative, and both
must be met if an Ee is to be considered a
confidential Ee.

UNIVERSITY OF SANTO TOMAS ( .••..

~. 85
PacuCtaa de (])erecfio CiviC -.-
 LABOR RELATIONS: SPECIAL GROUPS OF EMPLOYEES

Q: What does the phrase "in the field of
labor relations" mean?
A: It stresses labor nexus.The confidential
information must be related to labor relations
matters. When the Ee does not have access to
confidential labor relations information, then
the prohibition to form, join, or assist a union
does not apply. (Sugbuanon Rural Bank v.
Laguesma, G.R. No. 116194, Feb. 2, 2000)
Note: If an Ee has access to confidential labor
relations information but such is merely incidental
to his duties and knowledge thereof is not
necessary in the performance of such duties,
such access does not render the Ee a
confidential Ee. (SMC Supervisors and Exempt
Union v. Laguesma, G.R. No. 110399, Aug. 15,
1997)
Q: May confidential Ees form, assist or join
a labor organization (LO)?
A: No. The disqualification is based on the
doctrine of necessary implication which
provides that what is implied in a statute is as
much part thereof as that which is expressed.
Under Art. 245 of the LC, managerial Ees are
prohibited from joining, assisting, or forming
any LO. But by virtue of necessary implication,
confidential Ees are similarly disqualified.
(National Association of Trade Union (NA TU)
v. NLRC, G.R. No. 93468, Dec.29, 1994)
Q: Jemuel is the Executive Secretary
the SVP of a bank while Genesis is the
Legal Secretary of the bank's lawyer.
They and other executive secretaries
would like to join the union of rank-and-file
Ees of the bank. Are they eligible to join the
union? Why? Explain briefly.
A: No. The following rules will govern the
right of selt-orqanlzation of Jemuel, Genesis,
and the other executive secretaries:
1. No Right to Self-Organization
Confidential Ees who act in a
confidential capacity to persons who
formulate, determine, and effectuate
management policies in the field of
labor- management relation. The 2
criteria are cumulative and both must
be met. (SMC Supervisors and
Exempt Union v. Laguesma, G.R. No.
110399, Aug. 15, 1997)
LO. (Sugbuanon Rural Bank v.
Laguesma, G.R. No. 116194, Feb. 2,
2000)
In the case at bar, legal secretaries fall under
the category of confidential Ees with no right to
self-organization. (Pier & Arrastre Stevedoring
Services, Inc. v. Confessor, GR. No. 110854
Feb. 13, 1995) (2002 Bar Question)
Q: Is a managerial Ee a confidential Ee?
A: Yes. Every managerial position is
confidential because one does not become a
manager without having gained the confidence
of the appointing' authority. But not every
confidential Ee is managerial; he may be a
supervisory or even a rank-and-file Ee.
, SECURITY GUARDS ,
Q: May security guards join a labor
organization (LO)?
A: Yes. Under R.A. 6715, security guards may
now freely join a LO of the rank-and-file or that
of the supervisory union, depending on their
rank. (Manila Electric Co. v. Sec. of Labor and
Employment, G.R. No. 91902, May 20, 1991)
I MEMBERS OF COOPERATIVES
of Q: May members of a cooperative join a
LO?
A: No. An Ee of a cooperative who is at the
same time a member and co-owner cannot
invoke the right to collective bargaining, for
certainly an owner cannot bargain with himself
or his co-owners. However, to Ees who are
neither members nor co-owners of the
cooperative they are entitled to exercise the
rights to self-organization, CB and negotiation.
(San Jose Electric Service Cooperative, Inc.
vs. Ministry of Labor, G.R. No. 77231, May 31,
1989)
Note: It is the fact of ownership of the
cooperative, not the involvement in management,
which disqualifies a member from joininq any LO.
(Benguet Electric Coop. v. Ferrer-Calleja, G.R.
No. 79025, Dec. 29, 1989)
;~. ~. RELIGIOUS·OBJECTORS.· _ ""

2. With Right to Self-Organization Q: Victoriano is a member of Iglesia ni

When the Ee does not have access Cristo (INC) and an Ee of the company
to confidential labor relations which had a CBA containing a closed-shop
information, there is no legal provision. A law was passed exempting
prohibition against confidential Ees members of any sect who prohibits
from forming, assisting, or joining a affiliation of their members from joining

86
 UST GOLDEN NOTES 2010

any labor organization (LO). Victoriano

then resigned but the union opposed and
manifested that he should be dismissed
due to the closed-shop provision of the
CBA. May a member of the INC be
compelled to join a labor union under a
CSA with a closed-shop proviso?

A: No. Members of said religious sect whose

teaching forbid membership in a labor union
cannot be compelled to join any labor union or
refused employment or be dismi~sed f[om
their job on the ground that they are' not
members of the bargaining unit. The right to
join a LO includes the right not to join.
Moreover, religious freedom, although not
unlimited, is a fundamental personal right and
liberty, and has a preferred position in the
hierarchy of values. (Victoriano v. Elizalde
Rope Workers Union, GR. No.L-25246, Sep.
12, 1974)

Q: May religious objectors form their own

union?

A: Yes. The right of the members of INC not to

join a labor union for being contrary to their
beliefs does not bar them from forming their
own union. The recognition of the belief of the
sect should not infringe on the basic right of
self-organization granted by the Constitution.
(Kapatiran Sa Meat and Canning Division v.
Ferrer-Calleja, G.R. No. L-82914, June 20,
1988)

UNIVERSITY OF SANTO TOMAS

87
'Facu{taa ae Verecfio Civil
 LABOR RELATIONS: EMPLOYEES IN THE PUBLIC SERVICE

, ART. 244. RIGHT OF EMPLOYEES IN THE 5. Jail guards

: PUBLIC SERVICE 6. Other personnel who, by nature of
their functions, are authorized to carry
, ART. 276. GOVERNMENT EMPLOYEES firearms, except when there is
express written approval from
Q: Are the Ees in public service covered by management.
the right to self-organization?
Q: What are the protections given on the
A: Yes. gov't Ees' right to organize?
1. Ees of gov't corporations established
under the Corporation Code shall A:
have the right to organize and 1. Gov't Ees shall not be discriminated
bargain collectively with their against by 'reason of their
respective Ers. (Bliss Dev't Corp. membership in Ees' organizations or
Union v, Ferrer-Cal/eja, G.R. No. participation in the normal activities
80887, Sep. 30, 1994) of their organization. (Sec. 5, E.O.
180)
2. All other Ees in the civil service shall 2. Their employment shall not be
have the right to form associations for subject to the condition that they
purposes not contrary to law. shall not join or shall relinquish their
membership in the Ees'
Q: Who are allowed to jorn Ees organizations. (ibid)
organization in the public sector? 3. Gov't authorities shall not interfere in
the establishment, functioning or
A: AIIEesin: administration of gov't Ees'
1, Agencies of the national gov't and organization through acts designed
their regional offices, attached to place such organizations under
agencies and their regional office the control of gov't authority. (Sec. 6,
2. State universities and colleges E.O. 180)
3. GOCCs with original charters
4. LGUs Q: Who are high level employees (Ees)?

Can form, Join or assist: A: Those who perform managerial functions

1. Ees' organizations such as the exercise of powers to formulate
2, Labor management committees management policies and decisions, or to hire,
3. Work councils transfer, assign, lay-off, recall or discipline
4. Other forms of Ees' participation Ees.
schemes of their own choosing.
Q: Who are highly-confidential Ees?
Note: Eligibility for membership in any Ees'
organization shall commence on the first day of A: Those who occupy a position which
Ee's service. requires a high degree of trust and confidence
and close intimacy with the appointing
Q: When will a corporation created under authority or immediate" supervisor which
the Corporation Code be deemed as a ensures free and open communication without
GOCC? harassment or freedom from misgivings '.of
betrayal of personal trust or confidential
A: The ownership test has been applied matters of state. The term is used
consistently. A corporation shall be deemed a interchangeably with primarily confidential Ees.
GOCC if the majority of its voting stocks are
owned by the gov'!. (Bliss Dev't Corp. Union v. Q: Are gov't Ees allowed to go on strike?
Ferrer-Calleja, G.R. No. 80887, Sep. 30, 1994)
A: No. By reason of the peculiar character of
Q: Who are those gov't Ees not allowed to the public service, it must necessarily regard
join Ees' organizations? the right to strike given to unions in the private
industry as not applying to public Ees. It has
A: been stated that the gov't, in contrast to the
1. High-level, highly-confidential and private Er, protects the interest of all people in
coterminous Ees the public service, and that accordingly such
2. Members of the AFP conflicting interest as are present in private
3. Members of the PNP labor relations could not exist in the relations
4. Firemen

88
 UST GOLDEN NOTES 2010

between the gov't and those whom they organizations and appropriate qov't
employ. a
authorities. (Sec. 13, E. 180)

Moreover, the CSC declared that the right to XPN: Those terms and conditions of
self organization accorded to gov't Ees shall employment that are fixed by law.:-
not carry with it the right to engage in any form
of prohibited concerted activity or mass action Q: Distinguish the rights of Ees in GOCCs
causing or intending to cause work stoppage with original charters from those without
or service disruption, albeit of temporary original charter.
nature. (Sec. 4, Resolution No. 021316, Oct.
11, 2002; Jacinto v. CA, GR. No. 124540, A:
Nov. 14, 1997) GOCC
wI Original Charter w/o Original Charter
Q: Because of al/eged "ULPs" by the Not allowed to strike.
management of GFI System, a gov't-
Allowed to strike
owned and controlled financial corporation, Note: Governed by Civil
subject to the
its Ees walked out from their jobs and Service Law.
provisions of the LC.
refused to return to work until the
management would grant their union Enjoined by CS Memo
Note: Created under
official recognition & start negotiations Circular 6, under the
the Corporation Code
pain of administrative
with them. The leaders of the walk-out therefore the Ees
sanctions from staging
were dismissed, and the other participants have the same rights
strikes, demonstrations,
were suspended for 60 days. In arguing as those of in the
mass leaves, walkouts
their case before the CSC, they cited the and other concerted
private sector.
principle of social justice for workers and activities.
the right to self-organization and collective Cannot bargain wi the
action, including the right to strike. They gov't. concerning the
claimed that the Constitution shielded conditions of their
them from any penalty because their walk- employment.
out was a concerted action pursuant to
their rights guaranteed by the basic law. Is Note:However, they
the position taken by the walk-out can negotiate (through Can Bargain. Has
leaders and participants legally correct? collective negotiation unlimited bargaining
Reasonbriefly. agreements or MOA) rights.
with the gov't. on those
A: The position taken by the walk-out leaders terms and conditions of
and participants is not legally correct. They are employment wlc are not
gov't Ees, and as such, they do not have the fixed by law. They have
limited bargaining
right to strike. According to the actual
riqhts,
wording of Sec. 3 of Art. XIII of the
Can only join or assist Can only join or assist
Constitution, the State "shall guarantee the
Las for purposes not Las for purposes of
rights of all workers to self-organization, CB
contrary to law. CBA, etc.
and negotiations, and peaceful concerted
activities including the right to strike in
Note: Ees of the gov't corporations incorporated
accordance with law."
under the Corporation Code and registered with
the SEC are governed by the LC and not by E.O.
Thus, the last clause of the above-quoted 180. They are allowed to organize because they
provision of the Constitution makes it very are not involved in public service and the terms of
clear: the right to strike is not constitutional, it their employment are not fixed by law.
is statutory because the right should be "in
accordance with law". And there is as yet Q: What are considered as non-negotiable
no law giving gOY'! Ees the right to strike. terms and conditions of employment in
(2004Bar Question) GOCCswith original charters?

Q: What are the matters that may be the A: Those which:

subject of negotiation? 1. Require appropriation of funds
2. Involve the exercise of management
A: prerogatives
GR: The terms and conditions of
employment or improvements in gov't
services may be the subject of negotiations
between duly recognized Ees'

UN I V E R SIT Y 0 F SAN
'Facu[taa
ToT 0 M.A ~
de (])erecfio Ctvd
~~::,!
~
89
 LABOR RELATIONS: EMPLOYEES IN THE PUBLIC SERVICE

Q: What are those which require EMPLOYEES OF INTERNATIONAL

appropriation of funds? ORGANIZATIONS

A: Q: What is an international organization

1. Increase in salary and emoluments (IO)?
and other allowance not presently
provided for by law A: It is an organization set up by agreement
2. Facilities requiring capital outlays between two or more States.
3. Car plan
4. Provident fund Q: What are specialized agencies?
5. Special hospitalization, medical,
dental and dental services A: Are las having functions in particular fields.
6. Rice, sugar and other subsidies
7. Travel expenses Q: May Ees of lOs organize?
8. Increase in retirement benefits
A: Yes.
Q: What are those negotiable terms and
conditions of employment in GOCCs with Q: May a certification election be
original charters? conducted in an 10 which the Phil. Gov't
has granted immunity from local
A: jurisdiction?
1. Schedule of vacation and other
leaves A: No. The grant of immunity from local
2. Work assignment of pregnant women jurisdiction to ICMC and IRRI is clearly
3. Personal growth and development necessitated by their int'I character and
4. Communication system (lateral and respective purposes. The objective is to avoid
vertical) the danger of partiality and interference by the
5. Provision for protection and safety host country in their internal workings. The
6. Provision for facilities for . exercise of jurisdiction by the DOLE in these
handicapped personnel instances would defeat the very purpose of
7. Provision for first-aid medical services immunity, which is to shield the affairs of int'I
for married women organizations, in accordance with int'I practice,
8. Annual medical/physical examination from political pressure or control by the host
9. Recreational, social, athletic and country to the prejudice of member States of
cultural activities and facilities. (Rules the organization, and to ensure the
implementing E.O. 180) unhampered performance of their functions.
(lCMC v. Calleja, G.R. No. 85750, Sep. 28,
1990)

90
 UST GOLDEN NOTES 2010

f . ACQUISITION AND RETENTION OF Note: It does not have any retroactive

i, _, MEMBERSHIP; UNION SECURITY effect.
I . AGREEMENTS .
2. Semi-closed shop agreement- The
Q: Enumerate LC provisions which governs prospective Ee must be a member of
the acquisition and retention of the union as a condition of
membership in a labor organization? employment and has no requirement
for the Ee to remain as a member of
A: the contracting union in good
1. An Ee, whether employed for a standing as a condition for continued
definite period or not, shall, beginning employment.
on his first day of .setvice, be
considered an Ee for ~purpoSes of 3. Union shop - Non-members may be
membership in any labor union. (Art. hired, but to retain their employment
277[cJ) must become union members after a
2. Nothing in the LC or in any other law certain period. (Requirement applies
shall stop the parties from requiring to present and future Ees)
membership in a recognized
collective bargaining (CS) agent as a 4. Modified union shop - Ees who are
condition of employment, except not union members at the time of
those Ee's who are already members signing the contract need not join the
of another union at the time of the union, but all workers hired thereafter
signing of the CSA (Art. 248[e]) must join.
5. Maintenance of membership shop -
Q: What is a union security clause? No Ee is compelled to join union, but
all present and future members must,
A: It is a generic term which is applied to and as a condition of employment, remain
comprehends "closed shop", "union shop", in good standing in the union.
"maintenance of membership" or any other
form of agreement which imposes upon 6. Exclusive bargaining shop - The
employees the obligation to acquire or retain union is recognized as the exclusive
union membership as a condition affecting bargaining agent of all Ees in the
employment. bargaining unit, whether union
members or not.
Note: Inclusion of union security clause in CSA is
not considered as ULP. 7. Bargaining for members only - The
union is recognized as the bargaining
Q: What are the principles of union security agent only for its members.
cl ausesl arran gements?
8. Agency shopl treasury shop - An
A: agreement whereby Ees must either
1. Protection - To shield union members join the union or pay the union as
from whimsical and abusive exercise exclusive bargaining agent a sum
of management prerogatives. equal to that paid by the members.
2. Benefits - An additional source of (This is directed against "free rider"
income to the union in the form of Ees who benefit from union activities
union dues and special assessments. without contributing financially to
3. Self-preservation - It strengthens the union support.)
union through selective acceptance of
new members on the basis of 9. Open shop - An arrangement which
commitment and loyalty. does not require union membership
as a condition for employment.
Q: What are the kinds of union security
agreements? 10. Preferential shop agreement - An
agreement whereby the Er merely
A: agrees to give preference to the
1. Closed shop - Only union members members of the bargaining union in
can be hired by the company and hiring, promotion or filing vacancies

~.!
they must remain as union members and retention in case of lay-off. The
in good standing to retain Er has the right to hire from the open
employment in the company. market if union members are not
available.

UNIVERSITY OF SANTO TOM.A~ 91

Pacu(taa de 1Jerecno Cl'fJl( .;
 LABOR RELATIONS: MEMBERSHIP
Note: The law has sanctioned stipulations for the
union shop and the closed shop as a means of
encouraging the workers to join and support the
labor union of their own choice as their
representative in the negotiation of their demands
and lhe protection of their interest vis-a-vis the
Er. ,(Liberty Flour Mills Ees v. Liberty Flour Mills,
G.R. No. 58768-70, Dec. 29, 1989)
Q: Is a closed-shop agreement valid?
A: Yes. It is true that disaffiliation from a labor
union is not open to legal objection. It is
implicit in the freedom of association ordained
by the Constitution. But a closed shop
provision is a valid form of union security, and
such provision in a CSA is not a restriction of
the right of freedom of association guaranteed
by the Constitution. (Villar v. Inciong, G.R.
Nos. L-50283-84, April 20, 1983)
Note: In order that the maintenance of
membership clause to take effect and entitle the
company to dismiss those who did not maintain
membership, it must be a clear and unequivocal
stipulation that maintenance of membership is a
condition for continued employment. (Manila
Cordage Co. v. CIR, G.R. No. L-27079, Aug. 31,
1977)
Q: Who are the Ees not covered by the
closed shop provision?
A:
1. Any Ee who at the time the closed-
shop agreement takes effect is a
bona fide member of a religious
organization which prohibits its
members from joining labor unions on
religious grounds
2. Ees already in service and already
members in a labor union or unions
other than the majority union at the
time the closed shop agreement took
effect
3. Confidential Ees who are excluded
from the rank and file bargaining unit
4. Ees excluded from the closed shop
by express terms of the agreement.
Q: Victoriano is a member of INC and an
employee of the company which had a CBA
containing a closed-shop provision. A law
was passed exempting members of, any
sect who prohibits affiliation of their
members from JOining any labor
organization. Victoriano then resigned but
the union opposed and manifested that he
should be dismissed due to the closed-
shop provision of the CBA. The further
argues that the law impairs obligations and
contracts.
92
IN LABOR ORGANIZATIONS
Is the dismissal of the Victoriano due to the
closed-shop proviso proper?
A: No. Members of said religious sect whose
teaching forbid membership in a labor union
cannot be compelled to join any labor union or
refused employment or be dismissed from
their job on the ground that they are not
members of the bargaining unit. Moreover,
religious freedom, although not unlimited, is a
fundamental personal right and liberty, and
has a preferred position in the hierarchy of
values. (Victoriano v. Elizalde Rope Workers
Union, GR. No.L-25246, Sep. 12, 1974)
Q: A CBA was entered into between the
company and the union containing a
closed shop proviso. Santos was already
an Ee of the company prior to the
effectivity of the CBA. He was required by
the company to join the Union. Santos was
dismissed due to his refusal to join the
union. Is the closed-shop proviso in the
CBA applicable to old Ees?
A: Yes. The closed-shop proviso of a CSA
entered into between the bargaining union and
Er is applicable to the old Ees provided they
are not members of any LO at the time the
CSA was entered into. On the other hand, an
Ee who is already a member of another union
at the time the CSA took effect cannot be
compelled to be a member of the current
bargaining agent. (Santos-Juat v. CIR, G.R.
No. L-20764, Nov. 29, 1965)
Q: In a certification election conducted by
the DOLE, Associated Workers
Organization in Laguna (AWOL) headed by
Bastian Flores, won over Pangkat ng mga
Manggagawa sa Laguna (PML), headed by
Martin Ortiz. Hence,AWOL was certified as
the exclusive bargaining agent of the rank-
and-file Ees of the Laguna Transportation
Company (LTC).
Shortly thereafter, a CBA was concluded by
LTC and AWOL which provided for a
closed shop. Consequently, AWOL,
demandedthat Martin Ortiz and all the PML
members be required to become members
of AWOL as a condition for their continued
employment. Otherwise, they shall be
dismissed pursuant to the closed shop
provision of the CBA.
The union security clause of the CBA also
provided for the dismissal of Ees who have
not maintained their membership in the
union. For one reason or another, Ruben
Simbulan, a member of AWOL, was
expelled from the union membership for
 UST GOLDEN NOTES 2010

acts inimical to the interest of the union. bases for the request of the
Upon receipt of the notice that Ruben union
Simbulan failed to maintain his b. The termination of the services of
membership in good standing with AWOL, the Ee is not automatic upon the
LTC summarily dismissed him from request of the union.
employment.
5. It cannot be applied to Ees who are
Can Martin Ortiz and all the PML members already members of the rival union or
be required to become members of the to the Ees based on their religious
AWOL pursuant to the closed shop belief.
provision of the CBA? Why?
(:j ..••
A: Martin Otiz and all the PML members can
not be required to become members of AWOL
pursuant to the closed shop provision of the
CBA. According to Art 248(e) of the LC, a
closed shop provision cannot be applied to
those Ees who are already members of
another union at the time of the signing of the
CBA.

Q: Is the termination from employment of

Ruben Simbulan by LTC lawful? Why?

A: Pursuant to the closed shop provision of the

CBA entered into by AWOL with LTC,
membership in AWOL has become a condition
of employment in LTC. As long as the
expulsion of Ruben Simbulan from AWOL
was done in accordance with applicable
provisions of law and with the Constitution and
By-laws of the AWOL, then it was lawful for
LTC to terminate Simbulan. (Ferrer v. NLRC,
G.R. No. 100898, July 5, 1993) (1999 Bar
....,..,.... ~
... ". ~ ..
Question)
Academics Committee
Chairperson: Abraham D. Genuino II
Q: What are the requirements for a valid
Vice· Chair for .Acadermcs: Jeannie A. Laurentino
termination by the Er of the services of an
Ee pursuant to a union or closed-shop Vice-Char jor Admin & Fillallce: Aissa Celine H. Luna
agreement? Vice-Chair jor Lryout & Desigll: Loise 'Rae G. Naval

A: Labor Law Committee

1. The agreement must be expressed in Subject Head' Lester Jay Alan E. Flores II
a clear and unequivocal way so as Assistant Subject Head' Domingo B. Diviva V
not to leave room for interpretation
because it is a limitation to the Members:
exercise of the right to self Rene Francis P. Batalla
organization.
Diane Camilla R. Borja
Mana Kristina L. Dacayo-Garcia
2. Any doubt must be resolved against
the existence of a closed-shop Christian Nino A Diaz
agreement. ,\ngelo S. Diokno
Genesis R. Fulgencio
3. The agreement can only have Jeanelle C Lee
prospective application and cannot be Jemuel Paolo M. Lobo
applied retroactively. Andrew W. Montesa
Mana Maica Angelika Roman
4. It can only be exercised by giving the
Ee his right to due process
a. The Er has the right to satisfy
himself that there are sufficient

UNIVERSITY OF SANTO TOMAS ~" .••...•

~ 03
Pacu(tarI rIe (])erecno CiviC ~. '7
 LABOR RELATIONS: LABOR ORGANIZATIONS

~," L~BORORGANIZATIONS " affiliates each of which must be a

duly certified or recognized CB agent.
Q: What is a labor organization (LO)?
- A group of labor unions in a private
A: It is any union or association of Ees which establishment organized for CB or for
exists in whole or in part for the purpose of dealing with Er concerning terms and
collective bargaining (CB) or of dealing with conditions of employment for their
Ers concerning terms and conditions of member unions or for participating in
employment. (Art.212{gJ) the formulation of social and
employment policies, standards and
Any union or association of Ees in the private programs, registered with the BLR in
sector which exist in whole or in part for the accordance with the implementing
purpose of CB, mutual aid, interest, rules. (Sec. 1 [kk), Rule 1, Book V,
cooperation, protection or other lawful Omnibus Rules)
purposes. (Sec.1{ce), Rule 1, Book V,
Omnibus Rules) 4. Affiliate - An independent union
affiliated with a federation, national
Q: What is a legitimate labor organization union, or a chartered local which was
(LLO)? subsequently granted independent
registration but did not disaffiliate
A: Any LO in the private sector registered or from its federation, reported to the
reported with the DOLE. (Sec.1[ee), Rule I, Regional Office (RO) and the BLR in
Book V, IRR) accordance with this Rules. (Sec. 1
[a), Rule 1, Book V, IRR)
The term includes a local/chapter of the
Bureau of Labor Relations directly chartered 5. Chartered local - A LO in the private
by a legitimate federation or national union sector operating at the enterprise
which has been duly reported to the DOLE in level that acquired legal personality
accordance with Sec. 2, Rule VI, Book V, IRR through the issuance of a charter
of LG. certificate by a duly registered
federation or national union, and
Note: Not every LLO can act as bargaining reported to the RO. (Sec. 1 [i], Rule I,
representative and be certified as such. This is Book V, IRR)
true only of a union that has won in certification
election or has been voluntarily recognized by the 6. Industry union - Any group of LLO
employer. operating within an identified industry,
organized for CB or for dealing with
Q: What is a company union? Ers concerning terms and conditions
of employment within an industry or
A: It is any LO whose formation, function or for participating in the formulation of
administration has been assisted by any act social and employment policies,
defined as unfair labor practice under the LC. standards, and programs in such
industry registered with DOLE.
Q: What are the classifications of LOs?
A: 7. Legitimate worker's association - An
1. Union - Any LO in the private sector association of workers organized for
organized for collective bargaining the mutual aid and protection of its
(CB) and for other legitimate members or for any purpose other
purposes. (Sec. 1 [zz), Rule 1, Book than CB registered with the DOLE.
V,IRR) (Sec. 1 (ft], Rule 1, Book V, IRR)
2. Independent union Any LO
operating at the enterprise level 8. Trade union center - Means any
whose legal personality is derived group of registered national unions or
through an independent action for federations organized for the mutual
registration with the Bureau of Labor aid and protection of its members, for
Relations (BLR) of DOLE prescribed assisting such members in CB or for
under Art.234. (Sec. 1 [w), Rule 1, participating in the formulation of
Book V, IRR) social and employment policies,
standards and programs duly
3. National union/federation - Any LO registered with the DOLE. (SMCEU v.
with at least 10 locals/chapters or San Miguel Packaging Products Ees
Union, G.R. 171153, Sep. 12, 2007)

94
 UST GOLDEN NOTES 2010

9. Worker's association - An association '. ART. 234. REQUIREMENIS OF "

of workers organized for mutual aid ~ ',;' REGISTRATION'" '.'
- - _. ~ -
and protection of its members for any
legitimate purpose other than CB. Q: Is registration of a labor organization
necessary?

;-ART. 231. REGISTRY OF UNIONS AND fiLE A: No. A La may be registered or not.
r: " OF ~OLtECTIVE,B~RGAINING . '
L' •. " .~~.' AGREEMENTS' , ;" Q: What is the purpose of registration?

Q: What is the nature of a CBA? A: Registration with the BLR is the operative
o act that gives rights to a labor organization
A: It is more than a contract; it is highly (La).
impressed with public interest for it is an
essential instrument to promote industrial 1. It is the fact of being registered with
peace. (TUP v. Laguesma, G.R. No. 95013, the DOLE that makes a La legitimate
Sep.21, 1994) in the sense that it is clothed with
legal personality to claim
Q: When, where and how is a CBA representational and bargaining rights
registered? enumerated in Art. 242 or to strike or
picket under Art. 263.
A:
1. The parties shall submit, within 30 Note: A union having been validly
days from execution, copies of the issued a certificate of registration
CBA directly to the Bureau of Labor should be considered to have already
Relations (BLR) or Regional Offices acquired juridical personality which may
(RO) of the DOLE. it must be not be assailed collaterally. (THIGCI v.
THEU-PGTWO, G.R. No. 142000, Jan.
accompanied by the ff:
22, 2003, J. Carpio-Morales)
a. Verified proof of posting in 2
conspicuous places in the place
2. The req't of registration is not the
of work;
curtailment of the right to association.
b. Verified proof of ratification by
It is merely a condition sine qua non
the majority of all workers in the
bargaining unit. for the acquisition of legal personality
Las, associations or unions and the
2. Action upon the application for
possession of the rights and
registration within 5 calendar days
privileges granted by law to Las.
from receipt thereof.
3. The RO shall furnish the BLR with a
3. It is a valid exercise of police power
copy of the CBA within 5 days from
since the activities in which Las,
its submission.
associations, or. unions of workers are
4. The BLR or RO shall assess the Er
engaged affect public interest.
for every CBA. A registration fee of
(PAFLU v. Sec. of Labor, G.R. No. L-
not less than P1,000.00 or any
22228, Feb. 27, 1969)
amount deemed appropriate by the
Secretary of Labor.
Q: What is the effect if a LO is not
5. Issuance of certificate of registration.
registered?
Q: Is registration required for the validity of
A: A La is not "illegitimate" just because it is
the CBA?
unregistered. It is still a lawful organization and
can deal with the Er, but it has no legal
A: No. The certification of the CBA by the BLR
personality to demand CB with the Er. It
is not required to put a stamp of validity to
cannot petition for a certification election and
such contract. Once it is duly entered into and
cannot hold a legal strike.
signed by the parties, the CBA becomes
effective as between the parties regardless of
whether or not the same has been certified by
the BLR. (Liberty Flour Mills Ees v. Liberty
Flour Mills Inc., G.R. Nos. 58768-70, Dec. 29,
1989)

UNIVERSITY OF SANTO TOMAS

If'acu(taa ae !Derecfio CiviC
 LABOR RELATIONS: LABOR ORGANIZATIONS

Q: What are the req'ts for the issuance of 3. The genuineness and due execution
the certificate of registration of a national of the supporting requirements shall
federation, national union or industry or be:
trade union center or an independent a. Certified under oath by the
union? secretary or treasurer of the
local/chapter, and
A: b. Attested to by its president.
1. P 50.00 registration fee (Sec.2{e), Rule 11/,Book V, IRR,
2. Names of its officers, their addresses, as amended by D. O. 40-F-03)
the principal address of the LO, the
minutes of the meeting of the Note: Under the LC and the rules, the power
organizational meetings and the list of granted to LOs to directly create a chapter or
the workers who participated in such local through chartering is given to a federation or
meetings national union only, not to a trade union center.
3. In case the applicant is an (SMCEU v. San Miguel Packaging Products Ees
independent union, the names of all Union, G.R. No. 171153, Sep. 12,2007)
the Ees in the bargaining unit where it
seeks to operate Q: Where is the application for registration
4. If the applicant union has been in filed',?
existence for one or more years,
copies of its annual financial reports A:
and 1. Independent labor unions, chartered
5. 4 copies of the constitution and by- locals or worker's associations - It is
laws of the applicant union, minutes filed with the Regional Office (RO).
of its adoption or ratification and the where the applicant principally
list of the members who participated operates. It shall be processed by the
in it. (Sec. 1, R.A. 9481) Labor Relations Division at the RO.
2. Federations, national unions or
worker'S association operating in
, ART. 234-A. CHARTERING AND CREATION more than one region - It is filed with
. OF A LOCAL CHAPTER the BLR of the RO, but shall be
(as Inserted by R.A. 9481) processed by the BLR.

Q: How is a local chapter created? Q: What is the duty of the BLR after a LO
had filed the necessary papers and
A: A duly registered federation or national documents for registration?
union may directly create a local/ chapter by
issuing a charter certificate indicating the A: It becomes mandatory for the BLR to check
establishment of a local/chapter. if the req'ts under Art. 234 of the LC have been
sedulously complied with. If its application for
1. The' chapter shall acquire legal registration is vitiated by falsification and
personality only for purposes of filing serious irregularities, especially those
a petition for certification election appearing on the face of the application and
from the date it was issued a charter the supporting documents, a LO should be
certificate denied recognition as a LLO. (Progressive
Dev't Corp.-Pizza Hut v. Laguesma, et.a/.,
2. The chapter shall be entitled to all G.R. No. 115077, April 18, 1997)
other rights and privileges of a
legitimate labor organization (LLO) Q: Within what period should the BLR act
only upon the submission of the on the applications submitted before it?
following documents in addition to its
charter certificate: A: It shall act on all applications for registration
a. Names of the chapter's officers, within 10m days from receipt either by:
their addresses, and the principal 1. Approving the application and issuing
office of the chapter the certificate of
b. Chapter's constitution and by- registration/acknowledging the
laws notice/report; or
c. Where the chapter's constitution 2. Denying the application/notice for
and by-laws are the same as that failure of the applicant to comply with
of the federation or the national the requirements for
union, this fact shall be indicated registration/notice (D. O. 40-03, Rule
accordingly IV, Sec.4, series of 2003)
 UST GOLDEN NOTES 2010

Note: All requisite documents shall be: establishment where it seeks to

1. Certified under oath by the secretary or operate; and
treasurer of the organization, as the 6. The name and addresses of the
case may be and companies where the affiliates
2. Attested to it by its President. operate and the list of all the
members in each company involved.
Q: May the BLR review the issuance of a (D. O. 40-03, Rule, III, Sec. 2-8,
certificate of registration? series of 2003)

A: No. The SLR has the duty to review the
application for registration not the issuance of
a certificate of registration.
Q: Why is a lesser requirement imposed for
a chartered local?
A: The intent of the law in imposing lesser
req'ts in the case of branch or local of a
registered federation or national union is to
encourage the affiliation of a local union in
order to increase the local union's bargaining
power respecting terms and conditions of
labor. (Progressive Dev't Corp v. SLE, G.R.
No. 96425, Feb. 4, 1992)
Q: What are the req'ts before a federation
can be issued a certificate of registration?
A: The application for registration of
federations and national unions shall be
accompanied by the following documents:
1. A statement indicating the name of
the applicant labor union, its principal
address, the name of its officers and
their respective addresses;
2. The minutes of the organizational
meeting(s) and the list of Ees who
participated in the said meeting(s);
3. The annual financial reports if the
applicant union has been in existence
for 1 or more years, unless it has not
collected any amount from the
members, in which case a statement
to this effect shall be included in the
application;
4. The applicant union's constitution and
by-laws, minutes of its adoption or
ratification, and the list of the
members who participated in it. The
list of ratifying members shall be
dispensed with where the constitution
and by-laws was ratified or adopted
during the organizational meeting(s).
In such a case, the factual
circumstances of the ratification shall
be recorded in the minutes of the
organizational meeting(s);
5. The resolution of affiliation of at least
10 LLOs, whether independent
unions or chartered locals, each of
which must be a duly certified or
recognized bargaining agent in the
Q: What are the requirements for
affiliation?
A: The report of affiliation of independently
registered labor unions with a federation or
national union shall be accompanied by the
following documents: .
1. Resolution of the labor union's board
of directors approving the affiliation;
2. Minutes of the general membership
meeting approving the affiliation;
3. The total number of members
comprising the labor union and the
names of members who approved the
affiliation;
4. The certificate of affiliation issued by
the federation in favor of the
independently registered labor union;
and
5. Written notice to the employer
concerned if the affiliating union is the
incumbent bargaining agent. (D.O.
40-03, Rule, III, Sec. 7, series of
2003)
Q: What is the effect of affiliation?
A: The labor union that affiliates with a
federation is subject to the laws of the parent
body under whose authority the local union
functions. The constitution, by-laws and rules
of the mother federation, together with the
charter it issues to the local union, constitutes
an enforceable contract between them and
between the members of the subordinate
union inter se. Thus, pursuant to the
constitution and by-laws, the federation has
the right to investigate and expel members of
the local union. (Villar v. Inciong, G.R. No. L-
50283-84, April 20, 1983)
Q: Maya local union disaffiliate from the
federation?
A:
GR: A labor union may disaffiliate from the
mother union to form an independent union
only during the 60-day freedom period
immediately preceding the expiration of the
CSA.
XPN: Even before the onset of the freedom
period, disaffiliation may still, be carried out,

UNIVERSITY OF SANTO TOMAS ~~. 97

Pacu{taa ae CDerecno CiviC ·9·
 LABOR RELATIONS: LABOR ORGANIZATIONS

but such disaffiliation must be effected by A: Yes. The pendency of an election protest
the majority of the union members in the does not bar the valid disaffiliation of the local
bargaining unit. union which was supported by the majority of
its members.
Note: This happens when there is a
substantial shift in allegiance on the part of The right of a local union to disaffiliate with the
the majority of the members of the union. In federation in the absence of any stipulation in
such a case, however, the CSA continues to the constitution and by-laws of the federation
bind the members of the new or disaffiliated prohibiting disaffiliation is well settled. Local
and independent union up to determine the unions remain as the basic unit of association,
union which shall administer the CSA may be free to serve their own interest subject to the
conducted. (ANGLO-KMU v. Samahan ng
restraints imposed by the constitution and by-
Manggagawang Nagkakaisa sa Manila Bay
laws of national federation and are free to
Spinning Mills at J.P. Coats, G. R. No.118562,
renounce such affiliation upon the terms and
July 5, 1996)
conditions laid down in the agreement which
brought such affiliation to existence. In the
Q: What is the limitation to disaffiliation?
case at bar, no prohibition existed under the
constitution and by-laws of the federation.
A: Disaffiliation should be in accordance with
Hence, the union may freely disaffiliate with
the rules and procedures stated in the
the federation. (Philippine Sky/anders v.
constitution and by-laws of the federation. A
NLRC, G.R. No. 127374, Jan. 31, 2002)
local union may disaffiliate with its mother
federation provided that there is no
Q: Distinguish between an independently
enforceable provision in the federation's
registered and unregistered chartered local
constitution preventing disaffiliation of a local
union.
union. (Tropical Hut Ees Union v. Tropical Hut,
G.R. Nos. L-43495-99, Jan. 20, 1990)
A:
: CHARTERED LOCAL UNION
Note: A prohibition to disaffiliate in the
Federation's constitution and by-laws is valid : Independently U· t d
l Registered nreqrs ere
because it is intended for its own protection.
~
By application of with
Q: What is the effect of cancellation of
the federation for the
registration of a federation or a national By signing contract of
issuance of a charter
union? affiliation
certificate to be
submitted to the BLR
A: iii !;'!~f1tl~~OfDisalfiliittlti1i'tq!fhff:~U.ftIQ.ri.:(IQc"aJ),··.
GR: It shall operate to divest its Would cease to be
locals/chapters of their status as LLO. LLO and would no
Would not affect its
longer have the legal
XPN: Locals/chapters retain status as LLO being a LLO and
personality and the
if they arecovered by a duly registered therefore it would
rights and privileges
continue to have legal
CSA. granted by law to LLO,
personality and to
unless the local
posses all rights and
Note Locals or chapters who retained status chapter is covered by
privileges of LLO.
as LLO shall be allowed to register as its duly registered
independent unions. If they fail to register, CBA.
they shall lose their legitimate status upon the '/' ;" ii' f~c}fE"ff.ectofrti$~fffU.atio'i.to:th~CBll'. .' !

expiration of the CSA. The CSA would

An existing CBA would
Q: PSEA is a local union in Skylander continue to be valid.
continue to be valid as
company which is affiliated with PAFLU. The local chapter will
the LO can continue
PSEA won the certification election among not lose its personality,
administering then
the rank and file Ees of the Skylander unless it registers a
CBA.
company but its rival union PSEA-WATU new.
protested the results. Pending the !h,:EJititl~mljn.fZtp.\;('iiltQ"aiiei;ilf1'ef;;£)1$~ffi(iiltioH.· ...•
resolution of such controversy, PSEA Union dues may no
disaffiliated with PAFLU and hence longer be collected as
LO entitled to the union
affiliated with NeW which was supported there would no longer
dues and not the
be any labor union that
by its members. May a local union federation from which
is allowed to collect
disaffiliate with its mother federation the LO disaffiliated.
such union dues from
per1ding the settlement of the status as the
the Ees.
sole and exclusive bargaining agent?

98
 UST GOLDEN NOTES 2010

~ART. 236. DENIAL OF REGISTRATION ART. 238-A. -EFFECT OF A PETITION" FOR

. CANCELLATION OF REGISTRATION
Q: What is the form of the decision of the
denial of application for registration? Q: What is the effect of a petition for
cancellation or of union registration?
A: It shall be:
1. In writing; A: It shall not suspend the proceedings for
2. Stating in clear terms the reason for certification election (CE) nor shall it prevent
the decision; and the filing of CEo
3. Applicant union must be furnished a
copy of said decision. In case of cancellation, nothing herein shall
<0 ...• restrict the right of the union to seek just and
Q: Is the denial of registration appealable? equitable remedies in the appropriate courts.

A: Yes. Q: Where is a petition for cancellation of

1. Decisions of the Regional Office shall registration or application for voluntary
be appealable to the BLR and CA. dissolution filed?
2. The BLR's decisions on cases
appealed from Regional Director are A:
final and not appealable to the SLE. 1. For legitimate independent labor
3. Decisions of the BLR denying the unions, local/chapter and worker's
registration of a LO (federation or association - It shall be filed with the
national union) is appealable to the Regional Office which issued its
SLE within 10 days from receipt of certificate of registration or creation.
the decision, on grounds of:
a. Grave abuse of discretion; or 2. For federations, national or industry
b. Gross incompetence. and trade union centers - It shall be
4. Decision of SLE appealable to CA. filed with the BLR. (Sec. 1, Rule XIV,
Book V, IRR as amended by 0.0.40-
Q: How is appeal taken with regard to F-03)
denial or cancellation of registration?
Q: Who may file a petition for cancellation
of registration?

A:
1. For legitimate individual labor union,
chartered local and worker's
association - Any party-in-interest
may file a petition for cancellation of
SLE decides on the
registration if the ground is:
matter within 20 days
a. Failure to comply with any of the
from receipt of records
req'ts under Art. 234, 237 and
238 of the LC.
b. Violation of any provision under
Note: Appeal is by memo of appeal within 10 Art. 239, LC.
days from receipt of notice.
2. For federations, national or industry
unions, trade union centers - Only
ART. 238. CANCELLATION OF members of the labor organization
REGISTRATION (LO) concerned may file if the
grounds are actions involving
Q: Who cancels the certificate of violations of Art. 241, subject to the
registration? 30% rule.

A: The certificate of registration of any LLO, Q: What is the effect of cancellation of

whether national or local, may be cancelled by
the BLR, after due hearing, only on the
grounds specified in Art. 239. (as amended by
R.A. 9481)
registration if the cancellation is made in
the course of the proceedings?
A: Where a labor union is a party in a
proceeding and later it loses its registration
permit in the course or during the pendency of
the case, such union may continue as party

UN IV E R SIT Y 0 F 5 ANT 0 TOM AS ~~ 99

PacuCtaa ae (])erecno CiviC .•
 LABOR RELATIONS: LABOR ORGANIZATIONS
without need of substitution of parties, subject
however to the understanding that whatever
decision may be rendered will be binding only
upon those members of the union who have
not signified their desire to withdraw from the
case before its trial and decision on the merits.
Note: Rationale: Principle of agency is applied -
the Ees are the principals, and the LO is merely
an agent of the former, consequently, the
cancellation of the union's registration would not
deprive the consenting member-Ees of their right
to continue the case as they are considered as
the principals.
i ART. 239. GROUNDS FOR CANCELLATION
; OF UNION REGISTRATION '"
Q: What are the grounds for cancellation
union registration?
A:
1. Misrepresentation, false statement or
fraud in connection with the:
a. Adoption or application of the
constitution and' by-laws or
amendments thereto
b. Minutes of ratification and
c. List of members who took part in
the ratification;
d. Election of officers
e. Minutes of the election of officers
and
f. List of voters (Art. 239 as
amended)
2. Voluntary
dissolution by
members. (as amended by
9481)
Note: A pronouncement as to the legality of the
strike is not within the meaning of Art. 239 of the
LC.
Q: What are the prohibited grounds
cancellation of union registration?
A:
1. The inclusion as union member of
Ees who are outside the bargaining
unit shall not be a ground to cancel
the union registration. The ineligible
Ees are automatically deemd
removed from the list of membership
of the union as. (Art. 245-A as
amended by RA 9481)
2. The affiliation of the rank-and-file and
supervisory unions operating within
the same establishment to the same
federation or national union shall not
100
be a ground to cancel registration of
either union. (Sec. 6, Rule XIV, Book
V, as inserted by D. O. 40-F-03)
t_ ART.239-A. VOLUN"A~y.CA~CELLATION :,
~"",',. ".,' .- ~'';.OE€RE~I,Sl:~TleN '/..'" ".:' .' . :'"'i~
Q: How is voluntary cancellation of
registration made?
A: Registration may be cancelled by the
organization itself provided:
1. At least % of its general membership
votes todissolve the organization, in
a meeting duly called for that
purpose; and
2. An application to cancel registration is
thereafter submitted by the' board of
of
the organization, attested by its
president.
Q: What are the "reportorial requirements"
required to be submitted by a legitimate
labor organization (LLO) ?
A: The following documents are required to be
submitted to BLR by the Ll.O concerned:
1. Within 30 days from adoption or
ratification of the constitution and by
laws (CBl) or amendments thereto:
a. CBl or amendments thereto
b. Minutes of ratification
c. List of members who took part in
the ratification of the constitution
and by-laws;
the
R.A.
2. Within 30 days from date of election
or appointment:
a. List of elected and appointed
officers and agents entrusted
with the handing of union funds
b. Minutes of election of officers
for c. List of voters
3. Annual financial report within 30 days
after the close of every fiscal year
4. List of members at least once a year
or whenever required by the Bureau.
(Sec. 1, Rule V, Book V, IRR, as
amended by D.O. 40-F-03)
Note: Failure to submit reportorial requirements
is no longer a ground for cancellation but shall
subject the erring officers or members to
suspension, expulsion from membership, or any
appropriate penalty (Art. 242-A, as inserted by
R.A. 9481).
 UST GOLDEN NOTES 2010

ART. 241. RIGHTS AND CONDITIONS OF a.

LOs cannot knowingly admit or
. MEMBERSHIP IN A LABOR continue in membership any
: ORGANIZATION individual who belongs to a
subversive organization er
Q: What is the nature of the relationship engaged directly or indirectly in
between the union and its members? any subversive activity
b. A member who has been
A: It is fiduciary in nature, and arises out of 2 convicted for a crime of moral
factors: turpitude (by final judgment) is
1. Degree of dependence of the ineligible fer election or
individual Ee on the union appointment in the union
organizatien and ~ ~ c. Every payment of fees, dues or
2. The comprehensive power vested in other contributions by a member
the union to the individual. shall be evidenced by a receipt
signed by the officer and entered
Q: What are the rights and conditions of into the record of the
membership in a labor organization (LO)? erganization
d. Every income shall be evidenced
A: by a record shewing its source.
1. Political right Every expenditure shall be
a. Right to vote evidenced by a receipt from the
b. Right to be voted for person who was paid. The
receipt shall state the date, place
Note: Both are subject to lawful and purpose of such payment.
provisions on qualifications and Q: When, how and under what conditions
disqualificatiens does an Ee become a union member?

2. Deliberative and decision-making A: It depends on the constitution and by-laws

right inasmuch as Art.249 gives a LO the right to
a. Right to' participate in prescribe its own rules for acquisition or
deliberations on major policy retention of membership.
questions
b. Right to decide on such major The relationship of the union and members is
policy questions by secret ballet governed by their mutual agreement, terms
and conditions of which are set forth in the
3. Rights over money matters union's constitution and by-laws and binding
a. Right against: on the members as well as the organization
i. Excessive fees itself. (Oca v. Trajano, G.R. No. 76189, Aug. 8,
ii. Unauthorized collection 1991)
iii. Unauthorized disbursements Note: An Ee, whether employed for a definite
period or not, shall beginning on his first day of
b. Right to: service, be considered an Ee for purposes of
i, Require adequate records of union membership. (Art. 277)
income and expenses
ii. Access financial records Q: How are union officers elected?
iii. Vote on officer's
compensation A: They are elected directly by the members
iv. Vote on proposed special through secret balloting. Election takes place
assessments at intervals of 5 years which is the term of
v. Deduction of special office of the union officers including these of a
assessments only with national union, federation or a trade union
written authorization from center.
member
Note: What positions to fill up, where and how
4. Right to information - Right to be the election should be done are matters left by
informed about the organization's law to the union's constitution and by-laws or to
constitution and by-laws and the CSA agreement among the members. Only in the
absence thereof will the IRR of Book V apply.
and about labor laws

5. Other rights and conditions under Art.

241

UNIVERSITY OF SANTO TOMAS

Pacu{tati tie cJ)erecno CiviC
~~ 101
 LABOR RELATIONS: LABOR ORGANIZATIONS

Q: Who takes part in the election of union membership in LOs cannot be

officers? compelled into union membership.

A: Only members of the union can take part in Q: Who are those disqualified to be a union
the election of union officers. (Art. 241{c]) officer?

Q: Who is a member in good standing? A:

1. Person who has been convicted of a
A: Any person who has: crime involving moral turpitude. (Art.
1. Fulfilled the req'ts for membership in 241[f])
the union, and
2. Not voluntarily withdrawn from 2. Any individual who belongs to a
membership or subversive organization or who is
3. Not been expelled or suspended from engaged indirectly or indirectly in any
membership after appropriate subversive activity. (Art. 241{e])
proceedings consistent with the lawful
provisions of the union's constitution 3. Non-employees. (Art. 241{c])
and by-laws.
Q: Wh,at is a union election protest?
Q: What may be used to determine
eligibility to vote? A: It is a complaint or protest regarding
election of union officers and is treated as an
A: The question of eligibility to vote may be inter/intra-union dispute,
determined through the use of the applicable
payroll period and Ee's status during the Q: What are union dues?
applicable period - the payroll of the month
next preceding the labor dispute in case of A: These are regular monthly contributions
regular Ees and the payroll at or near the peak paid by the members to the union in exchange
of operations in case of Ees in seasonal for the benefits given to them by the CSA and
industries. (Tancinco v. Pura Ferrer-Calleja, to finance the activities of the union in
G.R. No. 78131, Jan. 20, 1988) representing the union.
Note: If none of the contending unions insisted
on the use of the payroll period-list as voting list, Q: What is check-off?
the act of the non-union Ees of joining the
election by casting their votes is a clear
A: It is a method of deducting from an Ee's
manifestation of their intention to join a union.
pay at a prescribed period, the amounts due
They must therefore be considered ipso facto
the union for fees, fines and assessments.
union members. Said Ees having exercised their
right to unionism, by joining one of the unions,
their decision is paramount. (Tancinco v, Pura Deductions for union service fees are
Ferrer-Calleja, G.R. No. 78131, Jan. 20, 1988) authorized by law and do not require individual
check-off authorizations.
Q: Is it necessary that a union officer be an
Ee? Q: What is the nature and purpose of
check-off?
A: Yes. No qualification req'ts for candidacy to
any position shall be imposed other than A: Union dues are the lifeblood of the union.
membership in good standing in subject LO.
(Art. 241{c], 2"d sentence) All unions are authorized to collect reasonable
membership fees, union dues, assessments
Q: What are the limitations in memberships and fines and other contributions for labor
in unions? education and research, mutual death and
hospitalization benefits, welfare fund, strike
A: fund and credit and cooperative
1. The LO cannot compel Ees to undertakings. (Art. 277[a])
become members of the LO if they
are already members of a rival union.
2. The persons enumerated under Art.
241 (e) of the LC are prohibited from
becoming members of a LO.
3. The members of of religious
organizations whose religion forbids

102
 UST GOLDEN NOTES 2010

Q: What are the requisites of a valid check- I consent of the workers

off? affected.

A: Q: What are special assessments or

GR: No special assessments, atty's fees, extraordinary fees?
negotiation fees or any other extraordinary
fees may be checked off from any amount A: These are assessments for any purpose or
due to an employee (Ee) without individual object other than those expressly provided by
written authorization duly signed by the Ee. the labor organization's constitution and by-
laws.
The authorization should specifically state
the: Q: What are the requisites for a valid levy
1. Amount of special assessment or extraordinary
2. Purpose & fees?
3. Beneficiary of the deduction.
A:
XPN: 1. Authorization by a written resolution
1. For mandatory activities under the LC of the majority of all members at the
2. For agency fees general membership meeting duly
3. When non-members of the union called for that purpose;
avail of the benefits of the CBA:
a. Non-members may be assessed 2. Secretary's record of the minutes of
union dues equivalent to that the meeting, which must include the:
paid by union members; a. List of members present
b. Only by board resolution b. Votes cast
approved by majority of the c. Purpose of the special
members in general meeting assessments
called for the purpose. d. Recipient of such assessments;

Q: What is an agency fee? 3. Individual written authorization to

check-off duly signed by the Ee
A: It is an amount equivalent to union dues, concerned to levy such
which a non-union member pays to the union assessments.
because he benefits from the CBA negotiated
by the union. Q: What is the effect of failure to strictly
comply the req'ts set by law?
Note: Agency fee cannot be imposed on Ees
already in the service and are members of A: It shall invalidate the questioned special
another union. If a closed shop agreement cannot assessments. Substantial compliance of the
be applied to them, neither mayan agency fee, requirements is not enough in view of the fact
as a lesser form of union security, be imposed to that the special assessment will diminish the
them. Payment by non-union members of agency
compensation of union members. (Palacol v.
fees does not amount to an unjust enrichment
Ferrer-Calleja, GR. No. 85333, Feb. 26, 1990)
basically the purpose of such dues is to avoid
discrimination between union and non-union
members. Q: Who has jurisdiction over check-off
disputes?
Q: Distinguish union dues from agency
fees. A: Being an intra-union dispute, the Regional
Director of DOLE has jurisdiction over check
A: off disputes.
Union Dues Agency Fee
Is deducted from non-
members of the
Is deducted from bargaining agent
members for the (union) for the
payment of union dues enjoyment of the
benefits under the
CSA.
May not be deducted May be deducted from
from the salaries of the the salary of the Ees
union members without their written
without the written consent.

UNIVERSiTY OF SANTO TOMAS (..<.1.'. 103

Pacu{taa ae (])erec/io Civi] .~.
 LABOR RELATIONS: LABOR ORGANIZATIONS

Q: Distinguish check-off from special Q: What are the remedies for violation of
assessments. rights and conditions of membership?

A: A: As to impeachment of a union officer, as

per reference to the union's constitution and
by-laws (CBL):

By written 1. Impeachment must be initiated by a

(Union Dues) resolution petition Signed by at least 30% of all
By obtaining the individual written approved by bona fide members of the union and
authorization duly signed by the majority of all addressed to the chairman of the
Ee which must specify: the members Executive Board;
1. Amount at the
2. Purpose meeting
2. A general membership meeting shall
3. Beneficiary called for
be convened by the Board Chairman
that e.
to consider the impeachment of an
(Agency fees) officer;
Not necessary when:
1. For mandatory activities under ~. Before the impeachment is finally
the LC taken, the union officer against whom
2. For agency fees the impeachment charges have been
3. When non-members of the No filed shall be given ample opportunity
union avail of the benefits of exception; to defend himself; and
the CBA: written
a. Said non-members may be resolution is 4. A majority of all members of the union
assessed union dues mandatory in shall be required to impeach or recall
equivalent to that paid by all instances. union officers.
union members;
b. Only by Board resolution Note: Despite the practical difficulties in
approved by majority of the complying with the procedure, petitioners should
members in general meeting show substantial compliance' with said
called for the impeachment procedure, by giving the union
officer ample opportunity to defend himself, as
Note: Individual written authorization is not contrasted to an outright impeachment, right after
necessary for the collection of agency fees. he failed to appear before the first and only
investigation scheduled. (Litton Mills Ee's Ass'n-
Q: Are Ees who are members of another Kapatiran v. Ferrer-Calleja, GR. No. L-78061,
union considered free riders? Nov. 24, 1988)

A: No. When the union bids to become the Q: Is the 30% support of union membership
bargaining agent, it voluntarily assumes the mandatory for filing of a complaint
responsibility of representing all the Ees. regarding a violation of the rights and
conditions of membership?

: REMEDIES FOR VIOLATIONS.OF RIGHTS A: No. The fact that the word "may" was used
in the LC negates the presumption that such is
Q: Who reports complaint for violation mandatory. It clearly shows that the said req't
rights of union members? is permissive in nature. (Rodriguez v. Director
of BLR, G.R. Nos. L-76579-82, Aug. 31, 1988)
A:
GR: Complaint for violation of right must be
reported by at least 30% of the union . ART. 242. RIGHTS OF LEGITIMATE
members. , LABOR ORGANIZATIONS _

XPN: When the violation directly affects Q: What are the rights of legitimate labor
only one or two members, then only one or organizations (LLOs)?
two members can report such violation.
A: A LLO shall have the right to:
Q: What is the consequence of violation of 1. Act as the exclusive representatives
such rights? of its members
2. Represent union members
A: Expulsion of the culpable officers.
 UST GOLDEN NOTES 2010

3. Be furnished by the Er with its annual Ees similarly situated," the title of the case filed
audited financial statements by it at the LA's Office so expressly
4. Own properties states. While a party acting in a rep. capacity,
5. Sue and be sued in its registered such as a union, may be permitted to intervene
name in a case, ordinarily, a person whose interests
6. Undertake all other activities for the are already represented will not be permitted
benefit of members to do the same except when there is a
7. Be exempted from taxes suggestion of fraud or collusion or that the rep.
will not act in GF for the protection of all
Q: When will the financial statements be interests represented by him. Petitioners cite
given to the union? the dismissal of the case filed by ICTSI, first by
the LA, and later by the CA. The dismissal of
A: the case does not, however, by itself show the
1. After the union has been recognized existence of fraud or collusion or a lack of GF
by the Er as the sole bargaining on the part of APCWU. (Jerry Acedera, et a/. v.
representative of the Ees in the ICTS/, G.R. No. 146073, Jan. 13, 2003, J.
bargaining unit Carpio-Morales)
2. After the union is certified by DOLE
as such sale bargaining
representative.
3. Written request from the union
4. Within the last 60 days of the life of a
CBA.
5. During the collective bargaining
negotiation

Q: Do unions have the right to collect fees?

A: Yes, the right to collect fees is recognized

in Art. 277(a) and discussed under Art. 241 of
the LC.

Q: Jerry Acedera and his co-Ees works for

ICTSI and are officers! members of
APCWU-ICTSI.ICTSI entered into a CBA "'~.'~".~ ..
with APCWU.CBA reduced Ees' work days
per yr from 304 days to 250 days. However Academics Committee
ICTSI continued using the 304-day. Later. Chairperson: Abraham D. Genuino II
RTWPBdecreed a daily wage Increase for Vice-Chair for Academics: Jeannie A. Laurentino
all workers but ICTSI did not comply and Vice-Chair Jor Admin & Finance: Aissa Cehne H. Luna
used 365 days as the divisor for Ees' rate Vice-Chair [or Layout & DeJign: Loise Rae G. Naval
of pay. APCWU filed with the LA a
complaint against ICTSI while Jerry Labor Law Committee
Acedera and his co-Ees filed with the LA a
Sui?jeet Head' Lester Jay Alan E. Flores II
Complaint-in-Intervention with Motion to
Assistant Suo/eet Head' Domingo B. Diviva V
Intervene. They wanted to insure by their
intervention that the case would thereafter
be prosecuted with all due diligence and Members:
would not again be dismissed for lack of Rene Francis P. Batalla
interest to prosecute on the part of the Diane Camilla R. Borja
union. The LA denied it. Can the Ees Maria Kristina L. Dacayo-Garcia
intervene in the case? Christian Nino A Diaz
Angelo S. Diokno
A: No. A labor union is the party authorized to Genesis R Fulgencio
represent its members under Art. 242(a) of the J eanelle C. Lee
LC which provides that a union may act as the Jemuel Paolo M. Lobo
representative of its members for the purpose
Andrew W. Montesa
of CB. This authority includes the power to
Maria Maica Angelika Roman
represent its members for the purpose of
enforcing the provisions of the CBA. That
APCWU acted in a representative capacity "for
and in behalf of its union members and other

UNIVERSITY OF SANTO TOMAS

Pacu[taa ae lIJerecfzo CiviC
105
 LABOR RELATIONS: UNFAIR LABOR PRACTICE

: UNFAIR LABOR PRACTICES (ULP) Q: Distinguish civil aspect from criminal

aspect of ULP?
I ART. 247. CONCEPT OF ULP AND
; PROCEDURE FOR PROSECUTION A:
k.· ~'.. THEREOF
< ••• "0···· ,,,~.

Q: What is the concept of ULP?

Agents
who partiCipated or
A: ULP are: authorized or ratified
1. Criminal offenses against the State the act and agents,
The officers and
2. Violations of civil rights of both labor agents of Er or LO repres entatives,
and management members of the gov't
3. Violates the constitutional rights of board, including
workers and Ees to self-organization ",rt,n"'''' members
4. Inimical to the legitimate interest of
both labor and management,
Labor Arbiter
including their right to bargain
collectively and otherwise deal with
each other in an atmosphere of
Substantial evidence
freedom and mutual respect
5. Disrupt industrial peace
6. Hinder the promotion of healthy and
1 year from the accrual
stable labor-management relations
of ULP, however, it will
and mutual respect (unstable labor-
be suspended once the
management relations)
administrative case has
1 year from the accrual
been filed and would
Note: Because self-organization is a prerequisite of ULP. (Art. 290)
only continue running
of industrial democracy, the right to self-organize
once the administrative
has been enshrined in the Constitution, and any
case has attained
attack to it - any act intended to defeat or
finality.
debilitate the right - is regarded by law as an
offense.
Note: Final judgment in the administrative
Q: What are the elements of ULP? proceeding finding that ULP has been committed:

A: 1. Is a prerequisite in filing a criminal case

1. Er-Ee relationship between the of ULP.
offender and the offended party. 2. Shall not be binding in the criminal case
2. Act done is expressly defined in the nor shall be considered as an evidence
LC as an act of ULP. of guilt but merely as a proof of
compliance of the requirements
Note: ULP is negation of the right to organize prescribed by the LC.
which is available only to Ees in relation to their
Er. No organizational right can be negated or Q: Who is liable if ULP is committed by a
assailed if the Er-Ee relationship is absent in the juridical person?
first place.
A: When committed by:
The prohibited acts are all related to the workers' 1. Corporation, trust, firm, partnership,
self-organizational right and the observance of a association or any other entity -
CBA, except Art. 248(f) - dismissing or Penalty shall be imposed upon its
prejudicing an Ee for giving testimony under the guilty officer or officers. (Art. 289)
LC. 2. Labor organization - Parties liable
are the officers of the governing
Q: Are all unfair acts considered as ULP? boards, representatives or agents or
members of labor associations or
A: No. Because ULP is and has to be related organizations who have participated
to the right to self organization and to the in authorized or ratified such. (Art.
observance of the CBA, it follows that not
249)
every unfair act is ULP.

Note: ULP refers only to acts opposed to

workers' right to organize. When committed by
the Er, it commonly connotes anti-unionism.
 UST GOLDEN NOTES 2010

officers and Gebu Seamen's Association

(GSA) is another union representing some
Q: What are the ULP that may be of Philsteam's officers. PMOG sent a letter
committed by Ers? to Phllsteam requesting for GS but the
company asked the former to first prove it
represents the majority. Simultaneously,
A: Philsteam interrogated its captains, deck
1. Interference officers and engineers while GSA likewise
2. Yellow dog condition sent its demands to Philsteam. The
3. Contracting out company recognized GSA as representing
4. Company unionism the majority and entered into a GSA.
5. Discrimination for or against ,union Hence PMOG declared a strike. PMOG was
membership subjected to vilification and Philsteam's
6. Discrimination because of testimony pier superintendent participated in the
7. Violation of duty to bargain solicitation of membership for GSA. Is the
8. Paid negotiation and company guilty of ULP?
9. Gross violation of CBA
A: Yes. Although the company is free to make
Q: What is meant by interference? interrogations as to its Ees' union, the same
should be for a legitimate purpose and must
A: The act of Er to interfere with, restrain or not interfere with the exercise of self-
coerce Ees in the exercise of their right to self organization otherwise it is considered as ULP.
organization. Moreover, Philsteam's supervisory Ees'
Q: What is the test of interference? statement that PMOG is a "money-making"
A: Whether the Er has engaged in conduct union, which is made to appear to be said in
which, it may reasonably be said, tends to behalf of the union and the participation of the
interfere with the free exercise ofIhe Ees right company's pier superintendent in soliciting
to self-organization. membership for the competing union, is ULP
for interfering with the exercise of the right to
Note: Direct evidence that an Ee was in fact self-organization. (Philsteam and Navigation v.
intended or coerced by the statements of threats Philippine Marine Officers Guild, G.R. Nos. L-
of the Er is not necessary if there is a reasonable 20667 and L-20669, Oct. 29, 1965)
interference that the anti-union conduct of the Er
does have an adverse effect on self-organization Q: What is a lockout?
and CB. (The Insular Life Assurance-NA TU v.
The Insular Life Co. Ltd, G.R. No.L-25291, Jan. A: It means any temporary refusal of an Er to
30, 1971)
furnish work as a result of an industrial or labor
dispute. (Art.212[pJ)
Q: What is the totality of conduct doctrine?
Q: When does lockout or closure amount to
A: It states that the culpability of Er's remarks ULP?
is to be evaluated not only on the basis of their
implications, but against the background of A: A lockout, actual or threatened, as a means
and in conjunction with collateral of dissuading the Ees from exercising their
circumstances. rights is clearly an ULP. However, to hold an
Er guilty, the evidence must establish that the
Under this doctrine, expressions of opinion by purpose was to interfere with the Ees exercise
an Er, though innocent in themselves, of their rights.
frequently were held to be ULP because of:
1. The circumstances under which they Q: What are other examples of acts of
were uttered interference?
2. The history of the particular Er's labor
relations or anti-union bias A:
3. Their connection with an established 1. Outright and unconcealed intimidation
collateral plan of coercion or 2. In order that interrogation would not
interference. (The Insular Life be deemed coercive:
Assurance-NA TU v. The Insular Life a. The Er must communicate to the
Co. Ltd, G.R. No.L-25291, Jan. 30, Ee the purpose of questioning
1971) b. Assure him that no reprisal would
take place
Q: Phil. Marine Officers Guild (PMOG) is a c. Obtain Ee participation
union representing some of Philsteam's voluntarily

UNIVERSITY OF
tf'acu(taa
SANTO TOMAS
ae 1)erecno Ci1iiC
~i~ 107
 LABOR RELATIONS: UNFAIR LABOR PRACTICE

d. Must be free from Er hostility to Q: What is "contracting out" as ·a form of

union organization
e. Must not be coercive in nature
3. Intimidating expressions of opinion by
Er
Note: An Er who interfered with the right to self-
organization before a union is registered can be
held guilty of ULP. (Samahan ng mga
Manggagawa sa Bandolino-LMLC v. NLRC, GR.
No. 125195, July 17,1997)
ULP?
A: It is to contract out services or functions
being performed by union members when
such will interfere with, restrain or coerce Ees
in the exercise of their rights to self-
organization.
Q: Does it mean that an Er cannot contract
out work?

It is the prerogative of the company to promote, A:

transfer or even demote its Ees to other positions
GR: Contracting out services is not ULP
when the interests of the company reasonably
per se.
demand it. Unless there are circumstances which
directly point to interference by the company with
the Ees right to self-organization, the transfer of XPN: It is ULP only when the ft. exists:
an Ee should be considered as within the bounds 1. The services contracted out are being
allowed by law. (Rubberworld Phils. v. NLRC, performed by union members; and
G.R. No. 75704, July 19, 1989) 2. Such contracting out interferes with,
restrains, or coerce Ees in the
Q: What is a yellow dog condition? exercise of their right to self-
organization.
A: It is to require as a condition of employment
that a person or an Ee shall not join a labor Note: When the contracting out is being done for
organization or shall withdraw from one to business reasons such as decline in business
which he belongs. inadequacy of equipment or to reduce cost, the~
it is a valid exercise of management prerogative.
Q: What is a yellow dog contract?
Q: Company "A" contracts out its clerical
A: It is a promise exacted from workers as and janitorial services. In the negotiations
condition of employment that they are not to of its CBA, the union insisted that the
belong to or attempt to foster a union during company may no longer engage in
their period of employment. contracting out these types of services,
which services the union claims to be
Q: Is yellow dog contract valid? necessary in the company's business,
without prior consultation. Is the union's
A: No. It is null and void because: stand valid or not? For what reason(s)?
1. It is contrary to public policy for it is
tantamount to involuntary servitude. A: The union's stand is not valid. It is part of
2. It is entered into without consideration management prerogative to contract out any
for Ees in waiving their right to self- work, task, job or project except that it is an
org anizatio n. ULP to contract out services or
3. Ees are coerced to sign contracts functions performed by union members
disadvantageous to their family. when such will interfere with, restrain or
coerce Ees in the exercise of their rights to
Note: This is one of the cases of ULP that may self-organization. (Art. 248[c] of the l.C).
be committed in the absence of an Er-Ee (2001 Bar Question)
relationship.
Q: What is a run-away shop?
Q: What are the 3 usual provisions under a
yellow dog contract? A: It is an industrial plant moved by its owners
from one location to another to escape labor
A: regulations or State laws or to discriminate
1. A representation by the Ee that he is against Ees at the old plant because of their
not a member of a labor union. union activities.
2. A promise by the Ee not to join a
labor union. Q: Is resorting to run-away shop ULP?
3. A promise by the Ee that upon joining
a labor union, he will quit his A: Yes. Where a plant removal is for business
employment. reasons but the relocation is hastened by anti-
union motivation, the early removal is ULP. It

lOB
 UST GOLDEN NOTES 2010

is immaterial that the relocation is A: It is to discriminate in regard to wages,

accompanied by a transfer of title to a new hours of work and other terms and conditions
employer (Er) who is an alter ego of the of employment in order to encourage or
original Er. discourage membership in any labor
organization.
Q: What is a company union?
Q: When is a discharge of an Ee
A: Any labor organization whose formation, discriminatory?
function or administration has been assisted
by any act defined as ULP. (Arl. 212[i]) A: For the test of determining whether or not a
discharge is discriminatory, it is necessary that
Q: What are the forms o~) company the underlying reason for the discharge be
unionism? established.

A: The fact that a lawful cause for discharge is

1. Initiation of the company union idea available is not a defense where the Ee is
by: actually discharged because of his union
a. Outright formation by Er or his activities. If the discharge is actually motivated
representatives by lawful reason, the fact that the Ee is
b. Ee formation on outright demand engaged in union activities at the time will lie
or influence by Er and against the Er and prevent him from the
c. Managerially motivated formation exercise of business judgment to discharge an
by Ees Ee for cause. (Phil. Metal Foundries Inc. v.
GIR, G.R. Nos. L-34948-49, May 15, 1979)
2. Financial supporl to the union by:
a. Er defrays union expenses Q: Jobo has 3 hotels, the Taal Vista Lodge,
b. Pays atty's fees to the attorney Manila Hotel and the Pines Hotel. Among
who drafted the Constitution or the 3, Pines Hotel had more Ees and the
by-laws of the union. only one with a labor organization (LO).
When the bonus was distributed among the
3. Er encouragement assistance - 3 hotels, Pines Hotel Ees received the least
Immediately granting of exclusive amount compared to the Ees of Manila
recognition as bargaining agent Hotel and Taal Vista Lodge. Did the
without determining whether the company commit ULP?
union represents the majority of the
employees A: Yes. The sharing of the bonuses is
discriminatory and such constitute ULP. The
4. Supervisory assistance- Soliciting Pines Hotel Ees would be receiving fewer
membership, permitting union bonuses compared to the Ees of Taal Vista
activities during work time or coercing Lodge and Manila Hotel where neither has a
Ees to join the union by threats of LO nor does the complainant union has a
dismissal or demotion member. Taking into account that Pines Hotel
is realizing profit compared to that of Taal
Q: What is meant by the act of company- Vista. Same analogy applies in the salary
domination of union? increase. (Manila Hotel Co. v. Pines Hotel Ees'
Ass'n, G.R. No.L-30139, Sep. 28, 1972)
A: This is to initiate, dominate, assist or
otherwise interfere with the formation or Q: When can there be a valid
administration of any labor organization discrimination?
including giving of financial or other support to
it or its organizers or supporters. A: The employer is not guilty of ULP if it
merely complies in good faith with the request
Q: Why is company unionism/captive of the certified union for the dismissal of
unionism a form of ULP? employees expelled from the union pursuant to
the union security clause in the CSA. (Soriano
A: It is considered ULP because the officers v. Atienza, G.R. No. L-68619, Mar. 16, 1989)
will be beholden to the Ers and they will not
look after the interest of whom they represent. Q: A profit sharing
scheme was introduced
by the company for its managers and
Q: What is meant by discrimination as a supervisors who are not members of the
form of ULP? union, hence do not enjoy the benefits of
the CSA. The respondent union wanted to

UNiVERSITY OF SANTO TOMAS ~. 109

IF'acuCtaa ae (])erecfio CiviC .
 LABOR RELATIONS: UNFAIR LABOR PRACTICE

participate with the scheme but was denied dismissed Ees their right to be heard on the
by the company due to the CSA. matter.
Subsequently the company distributed the
profit sharing to the manager, supervisors Q: Mabeza and her co-Ees were asked by
and other non-union member Ees. As a the company to sign an affidavit attesting
result the union filed a notice of strike to the latter's compliance with pertinent
alleging ULP. Is the non-extension of the labor laws. Mabeza signed the affidavit but
profit sharing scheme to union members refused to swear to its veracity before the
discriminatory and an ULP? City prosecutor. Mabeza then filed a LOA
which was denied by management. After
A: No. There can be no discrimination when sometime, she attempted to return to work
the Ees are not similarly situated. The situation but the company informed her not to report
of union members is different and distinct from for work and continue with her unofficial
non-union members because only union leave. Did the company commit ULP?
members enjoy the benefit under the CSA.
The profit sharing scheme was extended to A: Yes. The act of compelling an Ee to sign an
those who do not enjoy the benefits of the instrument indicating the Er's compliance with
CSA. Hence, there is no discrimination and Labor laws which the company might have
ULP is not committed. (Wise and Co., Inc. v. viotated together with the act of terminating or
NLRC, GR No. L-87672, Oct. 13, 1989) coercing those Ees to cooperate is an act of
ULP. This is analogous with Art. 248 (f) of the
Q: Is dismissal of an Ee pursuant to a LC which provides: "to dismiss, discharge or
union security clause a form of ULP? otherwise prejudice or discriminate against an
Ee for having given or being about to give
A: No. Union security clauses in the CSA, if testimony under this Code". For in not giving a
freely and voluntarily entered into, are valid positive testimony in favor of the Er, Mabeza
and binding. Thus, the dismissal of an Ee by reserved not only her right to dispute the claim
the company pursuant to a labor union's but also to work for better terms and condition.
demand in accordance with a union security (Mabeza v. NLRC, G.R No. 118506, April 18,
agreement does not constitute ULP. 1997)
(Ma/ayang Samahan ng mga Manggagawa sa
M. Greenfield v. Ramos, G.R. No. 113907, Q: What is vlolation of the duty to bargain
Feb. 28, 2000) as a kind of ULP?

A union member who is employed under an A: This is the act of violating the duty to
agreement between the union and his Er is bargain collectively as prescribed in the LC.
bound by the provisions thereof since it is a
joint and several contract of the members of Q: What are the forms of ULP in
the union entered into by the union as their bargaining?
agent. (Mana/ang v. Artex Dev't, GR No. L-
20432, Oct. 30, 1967) A:
1. Failure or refusal to meet and
Q: Is notice and hearing required in case an convene
Ee is dismissed pursuant to a union 2. Evading the mandatory subject of
security clause? bargaining
3. Sad faith (SF) bargaining, including
A: Yes. Although a union security clause in a failure to execute the CSA if
CSA may be validly enforced and dismissal requested
pursuant to thereto may likewise be valid, this 4. Gross violation of the CSA
does not erode the fundamental requirement
of due process. The reason behind the Note: A company's refusal to make counter-
enforcement of union security clauses which is proposal, if considered in relation to the entire
the sanctity and inviolability of contracts bargaining process, may indicate BF and this is
cannot erode one's right to due process. especially true where the union's request for a
counter proposal is left unanswered. (Kiok Loy v.
Notwithstanding the fact that the dismissal was NLRC, G.R. No. L-54334, Jan. 22, 1986)
at the instance of the federation and that it
undertook to hold the company free from any
liability resulting from such dismissal, the
company may still be held liable if it was
remiss in its duty to accord the would-be

110
 UST GOLDEN NOTES 2010

Q: What are the examples of ULP in the duty to bargain collectively only with a
bargaining? legitimate labor organization designated or
selected by the majority of the Ees in an
A: appropriate CB unit. It is not a ULP for an Er to
1.. Delaying negotiations by discussing ask a union requesting to bargain collectively
unrelated matters that such union first show proof of its being a
2. Refusal to accept request to bargain majority union. (1997 Bar Question)
3. Rejecting a union's offer to prove its
majority claim Q: What is surface bargaining?
4. Shutdown to avoid bargaining and
5. Engaging in surface bargaining A: It is the act of going through the motions of
negotiating without any legal intent to reach an
H " agreement. It involves the question of whether
Q: Balmar Farms Ees Association (BFEA)
is affiliated with Associated Labor Union or not the Ers conduct demonstrates an
(ALU). ALU won in the certification election unwillingness to bargain in good faith or is
held in the company. Thus, ALU sent its merely hard bargaining. (Standard Chartered
proposal for a CBA, but the company Bank v. Confessor, G.R. No, 114974, June 16,
refused to act on it alleging that BEA is the 2004)
sole and exclusive bargaining
representative and that BFEA through its Note: Occurs when the Er constantly changes its
president had sent a letter informing the position over the agreement.
company of its disaffiliation with ALU. Is
the company guilty of ULP for refusing to Q: What is meant by paid negotiation as a
bargain collectively? form of ULP?

A: Yes. ALU is the certified exclusive A: It is the act of the employer to pay
bargaining representative after winning the negotiation or atty's fees to the union or its
certification election. The company merely officers or agents as part of the settlement of
relied on the letter of disaffiliation by BFEA's any issue in collective bargaining or any other
president without proof and consequently dispute.
refusing to bargain collectively constitutes
ULP. Such refusal by the company to bargain Q: When is the violation of CBA considered
collectively with the certified exclusive as ULP?
bargaining representative is a violation of its
duty to collectively bargain which constitutes A: Only when the violation is gross - There
ULP. (Balmar Farms v. NLRC, G.R. No. 73504, must be a flagrant and/or malicious refusal to
Oct, 15, 1991) comply with the economic provision of the
CBA.
Q: The Kilusang Kabisig, a newly-formed
labor union claiming to represent a Note: All the ULP acts must have a relation to the
majority of the workers in the Microchip Ees exercise of their right to self-organization.
Anti-union or anti-organization motive must be
Corp., proceeded to present a list of
proved because it is a definitional element of
demands to the management for purposes
ULP.
of collective bargaining (CB). The
Microchips Corp., a multinational
If violation is not gross, it is not ULP but a
corp. engaged in the production of grievance under CBA. The "grossly violate"
computer chips for export, declined to phrase is an amendment by RA 6715.
talk with the union leaders, alleging
that they had not as yet presented any Q: A complaint for ULP was filed by a
proof of majority status. The Kilusang prosecutor of the CIR against Alhambra
Kabisig then charged Microchip Corp. with company, upon the charges of the union
ULP, and declared a "wildcat" strike that 15 of its members employed as drivers
wherein means of ingress and egress were and helpers are discriminated for being
blocked and remote and isolated acts of deprived of the benefits under the CBA
destruction and violence were committed. with no justifiable reason other than union
Was the company guilty of an ULP when it membership. Is the company guilty of
refused to negotiate with the Kilusang ULP?
Kabisig?
A: Yes. The refusal to extend the benefits and
A: No. It is not an ULP not to bargain with a privileges under the CBA to Ees constitutes
union which has not presented any proof of its ULP. Failure on the part of the 'Company to live
majority status. The LC imposes on an Er up in goo faith to the terms of- the CBA is a
UNIVERSITY OF SANTO TOMAS f'.<..C.>~ 111
Pacu{taa ae (})erechO Civif '9'
 LABOR RELATIONS: UNFAIR LABOR PRACTICE

serious violation of the duty to collectively under which membership or

bargain which again amounts to ULP. The 15 continuation of membership is made
drivers and helpers are found to be Ees of the available to other members
company, hence, the benefit and privileges
under the CBA should be extended to them. 3. To violate the duty, or refuse to
(Alhambra Industries v, CIR, G.R. No. L-
bargain collectively with the Er,
25984, Oct. 30, 1970)
provided it is the representative of the
Ees
Q: What are the reliefs available in ULP
cases?
4. To cause or attempt to cause an Er to
payor deliver or agree to payor
A: The following reliefs may be availed of: deliver any money or other things of
1. Cease and desist order value, in the nature of an exaction, for
2. Affirmative order services which are not performed or
3. Court may order the employer to not to be performed, including the
bargain. CBA may be imposed. demand for fee for union negotiations
4. Strike by union members
5. To ask for or accept negotiations or
Note: ULP cases are not subject to compromise atty's fees from Ers as part of the
in view of the public interest involve. The relation
settlement of any issue in collective
between capital and labor is not merely
bargaining (CB) or any other dispute
contractual. They are impressed with public
or
interest that labor contracts must yield to
common good.
6. To violate a CBA.
Q: Is the commission of an ULP by an
Q: Is interference by a LO an ULP?
employer subject to criminal prosecution?
A: No, because interference by a LO in the
A: Yes, because ULPs are not only violations
exercise of the right to organize is itself a
of the civil rights of both labor and
function of self-organizing.
management but are also criminal offenses
against the State which shall be subject to
Q: What are examples of interference which
prosecution and punishment. (Arl. 247 LC;
does not amount to ULP?
See also B.P. Big. 386 as amended by R.A.
6715). However, the criminal aspect can
A:
only be filed when the decision of the labor
1. Union campaigns for membership
tribunals, finding the existence of ULP, shall
even among members of another
have become final and executory. (2005 Bar
union
Question)
2. Filing by a union of a petition to
dislodge an incumbent bargaining
union
. ART. 249. ULP OF LABOR
3. A bargaining union, through a union
i ORGANIZATIONS security clause, requires an incoming
employee to join the union.
Q: What are the ULP of LOs?
Q: Maya union coerce Ees to join a strike?
A: It shall be ULP for a La, its officers, agents
or representatives:
A: No. A union violates the law when, to
1. To restrain or coerce Ees in the restrain or coerce non-strikers from working
exercise of their rights to self- during the strike, it:
organization. However, a LO shall 1. Assaults or threatens to assault them
have the right to prescribe its own 2. Threatens them with the loss of their
rules with respect to the acquisition or jobs
retention of membership 3. Blocks their ingress to or egress from
the plant
2. To cause or attempt to cause an Er to 4. Damages non-strikers' automobiles
discriminate against an Ee, including or forces them off the highway
discrimination against an Ee with 5. Physically preventing them from
respect to whom membership in such working
organization has been denied or to 6. Sabotages the Er's property in their
terminate an Ee on any ground other presence, thereby creating an
than the usual terms and conditions atmosphere of fear or violence

112
 UST GOLDEN NOTES 2010

7. Demonstrates loudly in front of a non- Note: The resulting CBA is considered as a

strikers' residence with signs and "sweetheart contract" - a CSA that does not
shouts accusing the non-striker of substantially improve the employees wages and
"scabbing" benefits and whose benefits are far below than
8. Holding the non striker up to ridicule those provided by law.
9. Seeking public condemnation of the
non-striker Q: What is blue-sky bargaining?

Q: What is a case of union induced A: It is defined as making exaggerated or

discrimination by labor organization (LO)? unreasonable proposals.

A: This pertains to the arbitrary w;e of ~union Note: Whether or not the union is engaged in
security clause. " blue-sky bargaining is determined by the
evidence presented by the union as to its
economic demands. Thus, if the union requires
A union member may not be expelled from the
exaggerated or unreasonable economic
union, and consequently from his job, for
demands, then it is guilty of ULP. (Standard
personal and impetuous reasons or for causes
Chartered Bank v. Confessor, G.R. No. 114974,
foreign to the closed shop agreement. (Manila
June 16, 2004)
Mandarin Ees Union v. NLRG, G. R. No.
76989, Sep. 29, 1987)
Q: When does boulwarism occur?

Labor unions are not entitled to arbitrarily

A: It occurs when employer (Er) directly
exclude qualified applicants for membership
bargains with the employee (Ee) disregarding
and a closed-shop applicants provision will not
the union; the aim was to deal with the labor
justify the employer in discharging, or a union
union through Ees rather than with the Ees
in insisting upon the discharge of an employee
thru the union. Er submits its proposals and
whom the union thus refuses 10 admit to
adopts a take-it-or-Ieave-it stand.
membership without any reasonable ground
thereof. (Salunga v. GIR, G.R. No. L-22456,
Sep. 27, 1967)

Q: When is there refusal to bargain?

A: A union violates its duty to bargain

collectively by entering negotiations with a
fixed purpose of not reaching an agreement or
Academics Committee
signing a contract.
Abraham D. Genuino II
Chairperson:

Q: What is featherbeddingl make work Via-Cbairfor Academics: Jeannie /\, Laurentino

activities? 'Vise-Chairjor Admin & Finance: Aissa Celine H. Luna
Vice-Chair jor Layout ~." Design: Loise Rae G, Naval
A: It refers to the practice of the union or its
agents in causing or attempting to cause an Labor Law Committee
employer (Er) to payor deliver or agree to pay S ub;ect Head: Lester Jay Alan E. Flores II
or deliver money or other things of value, in Assistant Subject Head' Domingo B. Diviva V
the nature of an exaction, for services which
are not performed or not to be performed, as
Members:
when a union demands that the Er maintain
Rene Francis P. Batalla
personnel in excess of the latter's
Diane Camilla R. Borja
requirements.
Maria Kristina L. Dacayo-Garcia
Note: It is not featherbedding if the work is Christian Nino ,-\. Diaz
performed no matter how unnecessary or useless Angelo S. Diokno
it may be. Genesis R. Fulgencio
J eanelle C. Lee
Q: What is the sweetheart doctrine? Jemuel Paolo M. Lobo
Andrew W. Montesa
A: It is when a LO asks for or accepts Maria Maica Angelika Roman
negotiations or atty's fees from employers as
part of the settlement of any issue in GB or any -e :~,.~,~.
other dispute.

UNIVERSITY OF SANTO TOMAS

Pacu(taa ae <Dereclio Ci'ViC
 LABOR RELATIONS: COLLECTIVE BARGAINING
, COLLECTIVE BARGAINING AND
~ ADMINISTRATION OF AGREEMENTS
Q: What is collective bargaining (CB)?
A:
1. It is the process of negotiation by an
organization or group of workmen, in
behalf of its members, with the
employer (Er), concerning wages,
hours of work, and other terms and
conditions of employment and
2. The settlement of disputes by
negotiation between an Er and the
representative of his employees (Ee)
3. It is the obligation to meet and
convene promptly and expeditiously
in good faith for the purpose of
negotiating an agreement with
respect to wages, hours of work and
all other terms and conditions of
employment including proposals for
adjusting any grievances or questions
arising under such agreement and
executing a contract incorporating
such agreements if requested by
either party but such does not compel
any party to agree to a proposal or to
make any concession. (Art. 252, LC)
Note:
GR: No court or administrative agency or
official shall have the power to set or fix
wages, rates of pay, hours of work, or other
terms and conditions of employment
XPN: As otherwise provided under the LC:
1. National Wages and Productivity
Commission and R1WPB as to wage
fixing. (Art. 99 and 122, LC)
2. NCMS and NLRC as to wage
distortion. (Art. 124, LC)
3. SLE and President of the Philippines
as to certification and assumption of
powers over labor disputes. (Art.
236[gj, LC)
Q: What is the purpose behind this rule?
A: It is to encourage a truly democratic method
of regulating the relations between the
employers and employees by means of
agreements freely entered into through CB.
Q: Who are the parties to a CB?
A:
1. Employer
2. Employees, represented by
exclusive bargaining agent
Q: What are the jurisdictional preconditions
in collective bargaining?
A:
1. Possession of the status of majority
representation of the em ployees
representative in accordance with any
of the means of selection or
designation provided for the Labor
Code
2. Proof of majority representation
3. A demand to bargain under Art. 250
(a) of the LC. (Kiok Loy v. NLRC,
G.R. No. L-54334, Jan.22, 1986)
Q: When does the duty of the employer (Er)
to bargain collectively arise?
A: Only after the union requests the Er to
bargain. If there is no demand, the Er cannot
be in default.
Note: Where a majority representative has been
designated, it is an ULP for the Er, as a refusal to
collectively bargain, to deal and negotiate with
the minority representative to the exclusion of the
majority representative.
Where there is a legitimate representation issue,
there is no duty to bargain collectively on the part
of the Er (Lakas ng mga Manggagawang
Makabayan v. Marcelo Enterprises, G.R. No. L-
38258. Nov. 19, 1982)
Q: What are the 4 forms of ULP in
bargaining?
A:
1. Failure to meet and convene
2. Evading the mandatory subjects of
bargaining.
3. Bad faith in bargaining (boulwarism)
4. Gross violation of the CBA
Note: Violations of CSA, except those which are
gross in character, shall no longer be treated as
ULP but a grievance under CSA. (Art. 261, LC,
Silva v. NLRC. GR. No. 110226, June 19 1997)
Q: What is a collective bargaining
agreement (CSA)?
A: It is a contract executed upon request of
either the Er or the exclusive bargaining
representative of the Ees incorporating the
agreement reached after negotiations with
respect to wages, hours of work, terms and
conditions of employment, including proposals
the for adjusting any grievance or questions under
the agreement.
Note: The certification of the CBA by the BLR is
not required to make such contract valid. Once it
 UST GOLDEN NOTES 2010

is duly entered into and signed by the parties, a Q: What are the stages in CS?
GSA becomes effective as between the parties
whether or not it has been certified by the SLR. A:
(Liberly Flour Mills Ee's Association v. Liberly 1. Preliminary process: Sending a
Flour Mil/s, G.R. Nos. 58768-70, Dec. 29, 1989) written notice for negotiation which
must be clear and unequivocal
Q: What is a zipper clause? 2. Negotiation process.
3. Execution process: The signing of the
A: It is a stipulation in a CSA indicating that agreement
issues that could have been negotiated upon 4. Publication for at least 5 days before
but not contained in the CSA cannot be raised ratification
for negotiation when the CSA is already in
~) ..• 5. Ratification by the majority of all the
effect.' workers in the bargaining unit
represented in the negotiation (not
Note: Only provisions embodied in the GSA necessary in case of arbitral award)
should be liberally interpreted and complied with. 6. Registration process.
Where the proposal of one party does not find 7. Administration process: The CSA
print in the GSA, it is not part thereof and the shall be jointly administered by the
proponent has no claim whatsoever to its management and the bargaining
implementation. (Samahang Manggagawa sa agent for a period of 5 years.
Top Form v. NLRG, GR. No. 113856, Sep. 7,
8. Interpretation and Application
1998)
process.
Q: When shall bargaining commence?
Q: What are the mandatory provisions of
the CSA?
A: It commences within 12 months after the
determination and certification. of the Ees
exclusive bargaining representative.
A:
1. Wages
(certification year)
2. Hours of work
3. Grievance machinery
4. Voluntary arbitration
, ' ART. 250. PROCEDURE IN COLLECTIVE
5. Family planning
, BARGAINING (CB)
6. Rates of pay
7. Mutual observance clause
Q: What is the procedure in CB?
Note: In addition, the SLR requires the CSA
A: When a party desires to negotiate an should include a clear statement of the terms of
agreement: the GSA.
1. It shall serve a written notice upon the
other party with a statement of Er's duty to bargain is limited to mandatory
proposals bargaining subjects; as to other matters, he IS
2. Reply by the other party shall be free to bargain or not.
made within 10 days with counter
proposals Q: Does a petition for cancellation of a
3. In case of differences, either party union's certificate of registration involve a
may request for a conference which prejudicial question that should first be
must be held within 10 calendar days settled before parties could be required to
from receipt of request collectively bargain?
4. If not settled, NCMS may intervene
and encourage the parties to submit A: No. A pending cancellation proceeding is
the dispute to a voluntary arbitrator not a bar to set mechanics for collective
5. If not resolved, the parties may resort bargaining (CB). If a certification election may
to any other lawful means (either to still be held even if a petition for cancellation of
settle the dispute or submit it to a a union's registration is pending, more so that
voluntary arbitrator). the CS process may proceed. The majority
status of the union is not affected by the
Note: During the conciliation proceeding in the cancellation proceedings. (Capitol Medical
NCMS, the parties are prohibited from doing any Center v. Trajano, G.R. No. 155690, June 30,
act which may disrupt or impede the early 2005)
settlement of disputes. (Arl.250[dj, LC)

f-'-'-'~
UNIVERS!TY OF
Pacu{taa
SANTO TOMAS
de (])erecho CiviC
.~. 115
 LABOR RELATIONS: COLLECTIVE BARGAINING

ART. 251. DUTY TO BARGAIN to have been jOintly and voluntarily incorporated
COLLECTIVELY IN THE ABSENCE OF CBA therein by the parties. This is not a case where
private respondent exhibited an indifferent
ART.2S2. MEANING OF DUTY TO BARGAIN attitude towards CS because the negotiations
; - COLLECTIVELY were not the unilateral activity of petitioner union.
The CSA is good enough that private respondent
Q: What is the duty to bargain collectively exerted "reasonable effort of GF bargaining."
when there is no CSA? (Samahang Manggagawa sa Top Form
Manufacturing-United Workers of the Pnits v.
A: It is the performance of a mutual obligation: NLRC, G.R. No. 113856, Sept. 7, 1998)
1. To meet and convene promptly and
expeditiously in good faith (GF) Q: Does an Er's steadfast insistence to
2. For the purpose of negotiating an exclude a particular substantive provision
in the negotiatiol1s for a CSA constitute
agreement with respect to wages,
refusal to bargain or bargaining in SF?
hours of work and all other terms and
conditions of employment
3. Including proposals for adjusting any A: No. This is no different from a
bargaining representative's perseverance to
grievances or questions arising under
such agreement; and include one that they. deem of absolute
necessity. Indeed, an adamant insistence on a
4. To execute a contract incorporating
bargaining position to the point where the
such agreements if requested by
negotiations reach an impasse does not
either party. (Art. 252)
establish bad faith. Obviously, the purpose of
CB is the reaching of an agreement resulting
Q: What are the limitations to the duty to
in a contract binding on the parties; but the
bargain collectively?
failure to reach an agreement after
A: negotiations have continued for a reasonable
period does not establish a lack of good faith.
1. Such duty does not compel any party
The statutes invite and contemplate a
to agree to a proposal or to make any
collective bargaining contract, but they do not
concession.
compel one. The duty to bargain does not
2. Parties cannot stipulate terms and
include the obligation to reach an agreement.
conditions of employment which are
While the law makes it an obligation for the Er
below the minimum req'ts prescribed
and the Ees to bargain collectively with each
by law.
other, such compulsion does not include the
commitment to precipitately accept or agree to
Q: May either party bargain to an impasse?
the proposals of the other. All it contemplates
A: It depends: is that both parties should approach the
negotiation with an open mind and make
1. Where the subject of a dispute is a
reasonable effort to reach a common ground
mandatory bargaining subject, either
of agreement. (Union of Fi/ipro Ees v. Nestle
party may bargain to an impasse as
Phils., G.R. Nos. 158930-31, Mar. 3, 2008)
long as he bargains in GF.
Q: What is a deadlock?
2. Where the subject is non-mandatory,
a party may not insist in bargaining to
A: It is synonymous with impasse or a
the point of impasse. His instance
standstill which presupposes reasonable effort
may be construed as evasion of duty
at GF bargaining but despite noble intentions
to bargain.
does not conclude an agreement between the
parties.
Q: What is the test of bargaining in bad
faith?
Q: In case of deadlock in the renegotiation
of the CSA, what are the actions that may
A: There is no perfect test of good faith (GF) in
be taken by the parties?
bargaining. The GF or BF is an inference to be
drawn from the facts and is largely a matter for
A: The parties may:
the NLRC's expertise. The charge of BF
1. Call upon the NCMB to intervene for
should be raised while the bargaining is in
progress. the purpose of conducting conciliation
or preventive mediation;
2. Refer the matter for voluntary
Note: With the execution of the CSA, SF can no
arbitration or compulsory arbitration;
longer be imputed upon any of the parties
thereto. All provisions in the CSA are supposed

116
 UST GOLDEN NOTES 2010
3. Declare a strike or lockout upon
compliance with the legal req'ts (This
remedy is a remedy of last resort).
Q: May economic exigencies justify refusal
to bargain?
A: No. An employer is not guilty of refusal to
bargain by adamantly rejecting the union's
economic demands where he is operating at a
loss, on a low profit margin, or in a depressed
industry, as long as he continues to negotiate.
But financial hardship constitutes no excuse
for refusing to bargain collectively.
: ART.253. DUTY TO BARGAIN
: COLLECTIVELY WHEN THERE EXISTS A
, COLLECTIVE BARGAINING AGREEMENT
Q: What is the duty to bargain collectively
when there is a CBA?
A:
1. When there is a CSA the duty to
bargain collectively shall also mean
that neither party shall terminate nor
modify such agreement during its
lifetime.
2. Either party can serve a written notice
to terminate or modify the agreement
at least 60 days prior to its expiration
date.
3. It shall be the duty of both parties to
keep the status quo and to 'continue
in full force and effect the terms and
conditions of the existing agreement
during the 60-day period and/or until
a new agreement is reached by the
parties. (Art. 253, LC)
Q: What is the automatic renewal clause of
CBAs?
A: Although a CBA has expired, it continues to
have legal effects as between the parties until
a new CBA has been entered into (Pier &
Arrastre Stevedoring Services, Inc. v.
Confessor, G.R. No. 110854, February 13,
1995). This is so because the law makes it a
duty of the parties to keep the status quo and
to continue in full effect the terms and
conditions of the existing agreement until a
new agreement is reached by the parties. (Art.
253, LC). (2008 Bar Question)
Q: What may be done during the 50-day
freedom period?
A:
1. A labor union may disaffiliate from the
mother union to form a local or
UNIVERSITY
independent union only during the 60-
day freedom period immediately
preceding the expiration of the CBA.
2. Either party can serve a written notice
to terminate or modify agreement at
least 50-days prior to its expiration
period.
3. A petition for certification election
may be filed.
Q: When to file CBA?
A: Within 30 days from execution of CSA.
Q: What are the req'ts for registration?
A: The application for CBA registration shall
be accompanied by the original and 2
duplicate copies of the following req'ts:
1. CSA
2. A statement that the CSA was posted
in at least 2 conspicuous places in
the establishment concerned for at
least 5 days before its ratification
3. Statement that the CBA was ratified
by the majority of the Ees in the
bargaining unit.
Note: The following documents must be certified
under oath by the representative of the Er and
the labor union. No other document shall be
required in the registration of the CSA
Q: What is a single enterprise bargaining?
A: It involves negotiation between one certified
labor union and one Er. Any voluntarily
recognized or certified labor union may
demand negotiations with its Er for terms and
conditions of work covering Ee's in the
bargaining unit concerned.
Q: What is a multi-Er bargaining scheme?
A: It involves negotiation between and among
several certified labor unions and Ers.
ART. 253-A. TERMS OF A CBA s:»
Q: What is the duration of a CBA?
A:
1. With respect to the representation
aspect (refers to the identity and
majority status of the union that
negotiated the CSA as the exclusive
bargaining representative): 5 years
2. With respect to all other provisions
(refers to the rest of the CSA,
economic as well as non-economic
provisions other than representational
OF SANTO TOMAS ("-'-'. 117
Pacu(taa de ([)ereclio Citli{ '9'
 LABOR RELATIONS: COLLECTIVE BARGAINING

provisions): 3 years after the status quo and must continue in full force and
execution of the CSA effect the terms and conditions of the existing
agreement. The law does not provide for any
Q: What are the economic provisions of a exception or qualification as to which of the
CBA? economic provisions of the existinq agreement
are to retain force and effect. Therefore, it
A: must be encompassing all the terms and
1. Wages condition in the said agreement. (New Pacific
2. Family planning Timber v. NLRC, G.R. No. 124224, Mar. 17,
3. Effectivity of the agreement 2000)
4. Other terms and conditions of
employment Q: Mindanao Terminal Company and
respondent union has an existing CBA
Q: What are the non-economic provisions which was about to expire. Thus,
of a CBA? negotiations were held regarding certain
A: provisions of the CBA which resulted in a
1. Coverage of the bargaining unit deadlock. Thus the union filed a notice of
2. Union security clauses strike. During the conference called by the
3. Management prerogatives and/or NCM13 the company and the union were
rights/responsibilities of employees able to agree on all of the provisions of the
4. Grievance machinery and voluntary CBA except for one. However, the last
arbitration unresolved provision was subsequently
5. No strike - no lock out provision settled but no CBA was signed. Hence, in
the records of the Mediation Arbiter, all
Q: What is the effectivity and retroactivity issues were settled before the lapse of the
date of other economic provisions of the 6 month period after the expiration of the
CBA? old CBA. Does the Signing of the CBA
determine the date it was entered into
A: within the 6 month period?
1. If the CSA is the very first for the
bargaining unit, the parties have to A: No. The signing of the CSA does not
decide the CSA effectivity date. determine whether the agreement was entered
into within the 6 month period from the date of
2. Those made within 6 months after expiration of the old CSA. In the present case,
date of expiry of the CSA are subject there was already a meeting of the minds
to automatic retroaction to the day between the company and the union prior to
immediately following the date of the end of the 6 month period after the
expiry. expiration of the old CSA. Hence, such
meeting of the mind is sufficient to conclude
3. Those not made within 6 months, the that an agreement has been reached within
parties may agree to the date of the 6 month period as provided under Art. 253-
retroaction. A of the LC. (Mindanao Terminal and
Brokerage Services lnc., v. Confessor, GR.
Note: This rule applies only if there is an existing No. 111809, May 5, 1997)
agreement. If there is no existing agreement,
there is no retroactive effect because the date Q: When is the effectivity of a CBA arbitral
agreed upon shall be the start of the period of award concluded beyond 6 months from
agreement.
the expiration of the old CBA?
Art. 253-A on retroactivity does not apply if the
A: The CSA arbitral awards granted 6 months
provisions were imposed by the SLE by virtue of
from the expiration of the last CSA shall
arbitration. It applies only if the agreement was
voluntarily made by the parties. retroact to such time agreed upon by both the
Er and the union. Absent such agreement as
to retroactivity, the award shall retroact to the
Q: May the economic provisions of an 51
1 day after the 6 month period following the
existing CBA be extended beyond the 3
expiration of the last day of the CSA should
year period as prescribed by law in the
there be one. In the absence of a CSA, the
absence of a new agreement?
SLE's determination of the date of retroactivity
as part of his discretionary powers over arbitral
A: Yes. Under the principle of hold over, until a
award shall control. (Manila Electric Company
new CSA has been executed by and between
the parties, they are duty bound to keep the
v. Quisumbing, G.R. No. 127598, Feb. 22 and
Aug. 1, 2000)
 UST GOLDEN NOTES 2010
Q: PAL was suffering from a worsened
financial condition resulting to a CERTIFICATION PROCEEDINGS
retrenchment which downsized its labor
force by more than 1/3 thereby affecting
numerous union members. Hence, the
union went on strike. The PAL offered that
shares of stock be transferred to its Ees
but the union refused. Thus, PAL claimed it
has no alternative left but to close. Hence,
the union PALEA offered that the CBA be
suspended for 10 years and to waive some
of the economic benefits i~ the, CBA
provided they remain the certlfled
bargaining agent. PAL agreed and
resumed operations. Is the agreement to
suspend the CBA for 10 years abdicated
the worker's right to bargain?
A: No. The primary purpose of a CBA is to
stabilize labor-management relations in order
to create a climate of a sound and stable
industrial peace. The assailed agreement was
the result of the voluntary CB negotiations
undertaken in the light of severe financial
situation faced by PAL.
Q: Is the agreement In conflict with Art.
253-A of the LC?
A: No. There is no conflict between the
agreement and Art. 253-A of the LC for the
latter has a 2-fold purpose namely: a) to
promote industrial stability and predictability
and b) to assign specific time tables wherein
negotiations become a matter of right and
requirement. In so far as the first purpose, the
agreement satisfies the first purpose. As
regard the second purpose, nothing in Art.
253-A prohibits the parties from waiving or
suspending the mandatory timetables and
agreeing on the remedies to enforce the same.
Q: Does the agreement violate the 5 year
representation limit as provided under Art.
253-A of the LC?
A: No. For under the said article, the
representation limit of the exclusive bargaining
agent applies only when there is an existing
CBA in full force and effect. In this case, the
parties agreed to suspend the CBA and put in
abeyance the limit on representation. (Rivera
v. Espiritu, G.R. No. 135547, Jan, 23, 2002)
UNIVERSITY
BARGAINING AGENT and
ART. 255. EXCLUSIVE BARGAINING
REPRESENTATION (EBR) AND WORKER'S
. PARTICIPATION IN POLICY AND DECISION
,. '. MAKING . C •
Q: What is the extent of the worker's right
to participate in policy and decision-
making processes in a company?
A: Such right refers not only to formulation of
corporate programs and policies but also to
participation in grievance procedures and
voluntary modes of settling disputes.
Q: Explain the extent of the workers' right
to participate in policy and decision-
making process as provided under Art. XIII,
Sec. 13 of the 1987 Constitution. Does it
include membership in the Board of
Directors of a corporation?
A: No. In Manila Electric Company v,
Quisumbing, G.R. No. 127598, January 27,
1999, the SC recognized the right of the union
to participate in policy formulation and decision
making process on matters affecting the Union
members' rights, duties and welfare. However,
the SC held that such participation of the union
in committees of Er Meralco is not in the
nature of a co-management control of the
business of Meralco. Impliedly, therefore,
workers' participatory right in policy and
decision-making processes does not include
the right to put a union member in the
Corporation's Board of Directors. (2008 Bar
Question)
Q: Mayan Er solicit questions, suggestions
and complaints from Ees even though the
Ees are represented by a union?
A: Yes, provided:
1. The CB representative executes an
agreement waiving the right to be
present on any occasion when Ee
grievances are being adjusted by the
Er; and
2. Er acts strictly within the terms of his
waiver agreement.
OF SANTO TOMAS
PacuCtaa ae CDerecno CiviC
 LABOR RELATIONS: COLLECTIVE BARGAINING

Q: The hotel union filed a Notice of Strike .' ART. 256-259. PETIT10N FOR ,
with the NCMB due to ULP against the :-' __ CERTIFICATION ELECTION (PCE~ '" .
Diamond Hotel who refused to bargain with
it. The hotel advised the union that since it Q: What is a bargaining unit?
was not certified by the DOLE as the
exclusive bargaining agent, it could not be A:
recognized as such. Whether the Union 1. A group of employees (Ees)
may bargain collectively? 2. Of a given employer
3. Comprised of all or less than all of the
A: No. Art. 255 of the LC declares that only the entire body of Ees
labor organization designated or selected by 4. Which the collective interest of all the
the majority of the Ees in an appropriate Ees consistent with equity to the Er
collective bargaining (CB) unit is the exclusive 5. Indicate to be best suited to serve the
representative of the employees (Ees) in such reciprocal rights and duties of the
unit for the purpose of CB. The union is parties under the collective
admittedly not the exclusive representative of bargaining provisions.
the majority of the Ees of the hotel, hence, it
could not demand from the hotel the right to Q: What are the factors considered in
bargain collectively in their behalf. (Manila determining the appropriateness of a
Diamond Hotel v. Manila Diamond Hotel Ees bargaining unit?
Union, G.R. No. 158075, June 30, 2006, J.
Carpio-Morales) A:
1. Will of the Ees. (globe doctrine)
Q: Are probationary Ees allowed to vote at 2. Affinity and unity of the Ees' interest,
the time of the certification elections? such as substantial similarity of work
and duties, or similarity of
A: Yes. Under Art. 255 of the LC the "labor compensation and working
organization designated or selected by the conditions. (substantial mutual
majority of the Ees in an appropriate interest rule)
bargaining unit shall be the exclusive 3. Prior collective bargaining history
representative of the Ees in such unit for 4. Similarity of employment status.
purposes of CB. " CB covers all aspects of the (SMC v. Laguesma, G.R. No. 100485,
employment relation and the resultant CSA September 21, 1994)
negotiated by the certified union binds all Ees
in the bargaining unit. Hence, all rank and file Q: What. are the factors considered in
Ees, probationary or permanent, have a determining the substantial mutual interest
substantial interest in the selection of the doctrine?
bargaining representative. The LC makes no
distinction as to their employment status as A:
basis for eligibility in supporting the petition for 1. Similarity in the scale and manner of
certification election. The law refers to "a\l" the determining earnings
Ees in the bargaining unit. All they need to be 2. Similarity in employment benefits,
eligible to support the petition is to belong to hours of work, and other terms and
the "bargaining unit." The provision in the CSA conditions of employment
disqualifying probationary Ees from voting 3. Similarity in the kinds of work
cannot override the constitutionally-protected performed
right of workers to self-organization, as well as 4. Similarity in the qualifications, skills
the provisions of the LC and its implementing and training of Ees
rules on certification elections and 5. Frequency of contract or interchange
jurisprudence. A law is read into, and forms among the Ees .
part of, a contract. Provisions in a contract are 6. Geographical proximity
valid only if they are not contrary to law, 7. Continuity and integration of
morals, good customs, public order or public production processes
policy. (NUWHRAIN-MPHC v. SLE, G.R. No. 8. Common supervision and
181531, July 31,2009, J. Carpio-Morales) determination of labor-relations policy
9. History of CS
10. Desires of the affected Ees or
11. Extent of union organization

120
 UST GOLDEN NOTES 2010

Q: A registered labor union in UP, contrary to law, self-organization and

ONAPUP, filed a petition for certification to enter into CB negotiations.
election (PCE) among the non-academic
Ees. The university did not oppose, Note: Two companies cannot be treated into a
however, another labor union, the All UP single bargaining unit even if their businesses are
Workers Union assents that it represents related.
both academic and non-academic
personnel and seeks to unite all workers in Subsidiaries or corporations formed out of former
1 union. Do Ees performing academic divisions of a mother company following a re-
functions need to comprise a bargaining organization may constitute a separate
bargaining unit.
unit distinct from that of the non-academic
E~? 0 •
Q: Union filed a peE among the rank and
A: Yes. The mutuality of interest test should file Ees of three security agencies
be taken into consideration. There are two including the Veterans Security. The latter
classes of rank and file Ees in the university opposed alleging that the three security
that is, those who perform academic functions agencies have separate and distinct
such as the professors and instructors and corporate personalities. Maya single PCE
those whose function are non-academic who filed by a labor union in the three
are the janitors, messengers, clerks etc. Thus, corporations instead of filing 3 separate
not much reflection is needed to perceive that petitions?
the mutuality of interest which justifies the
formation of a single bargaining unit is lacking A: Yes. The following are indications that the 3
between the two classes of Ees. (u.P. v. agencies do not exist and operate separately
Ferrer-Calleja, GR. No.96189, July 14, 1992) and distinctly from each other with different
corporate direction and goals: 1) Veterans
Q: Is the bargaining history a decisive Security failed to rebut the fact that they are
factor in the determination of managed through the Utilities Management
appropriateness of bargaining unit? Corp with a" their Ees drawing their salaries
and wages from the said entity; 2) that the
A: No. While the existence of a bargaining agencies have common and interlocking
history is a factor that may be reckoned with in incorporators and officers; 3) that they have a
determining the appropriate bargaining unit, single mutual benefit system and followed a
the same is not decisive or conclusive. Other single system of compulsory retirement. 4)
factors must be considered. The' test of they could easily transfer security guards of
grouping is community or mutuality of one agency to another and back again by
interests. This is so because the basic test of simply filling-up a common pro-forma slip; 5)
an asserted bargaining unit's acceptability is they always hold joint yearly ceremonies such
as the PGA Annual Awards Ceremony; and 6)
whether or not it is fundamentally the
they continue to be represented by one
combination which will best assure to a" Ees
counsel.
the exercise of their CB rights. (Democratic
Labor Ass'n v. Cebu Stevedoring Company,
lnc., GR.. No. L-10321, Feb. 28, 1958) Hence, the veil of corporate fiction of the 3
agencies should be lifted for the purpose of
Q: What is "one-union, one-company" allowing the Ees of the 3 agencies to form
policy? single union. As a single bargaining unit, the
Ees need not file 3 separate PCE. (Philippine
A: Scout Veterans Security and Investigation
GR: It is the proliferation of unions in an Er Agency v. SLE, G.R. No. 92357, July 21,
unit. Such is discouraged as a matter of 1993)
policy unless there are compelling reasons
which would deny a certain class of Ees to
the right to self-organization for purposes of ART. 256. REPRESENTATION; ISSUE IN
ORGANIZED ESTABLISHMENT .
collective bargaining (CB).

XPN: Q: Who is a bargaining representative?

1. Supervisory Ees who are allowed to
form their own unions apart from the
rank-and-file Ees and
2. The policy should yield to the right of
Ees to form union for purposes not
A: It is a LLO or an officer or agent of such
organization whether or not employed by the
Er. (Art. 2120])

UNIVERSITY OF SANTO TOMAS ("""'. 121

Pacu[taa de ([)erecno CiviC '9'
 LABOR RELATIONS: COLLECTIVE BARGAINING

Q: Who is an exclusive bargaining A: The supervisory Ees of PT&T did not yet
representative? have a certified bargaining agent to represent
them at the time the union, which is a LLO duly
A: Any LLO duly recognized or certified as the registered with the DOLE, filed the PCE. Since
sole and exclusive bargaining agent of all the no certified bargaining agent represented the
Ees in a bargaining unit. (Sec. 1 [t), Rule I, supervisory Ees, PT&T may be deemed an
Book V, IRR) unorganized establishment.

Q: Can there be several unions in one The fact that petitioner's rank-and-file Ees
bargaining unit? were already represented by a certified
bargaining agent does not make PT&T an
A: Yes, but only one will be chosen as the organized establishment vts-e-vis the
bargaining agent thru certification election. supervisory Ees. After all, supervisory Ees are
"not eligible for, membership in a labor
Q: Can there be several bargaining agents organization of the rank-and-file Ees. (PT& T
in one unit? Corp. v. Laguesma, G.R. No. 101730, June
17, 1993)
A: No.
Q: IJYhat are the 3 methods of determining
Q: Can there be several bargaining agents the bargaining representative?
in one company?
A:
A: Yes. 1. Voluntary recognition
2. Certification election with or without
Q: Can there be several CBA in one run-off
company? 3. Consent election
A: Yes, provided there is only one CSA per
bargaining unit. Q: What is voluntary recognition?

Q: Are all legitimate unions a bargaining A: The process by which a legitimate labor
agent? union is recognized by the employer (Er) as
the exclusive bargaining representative or
A: No. agent in a bargaining unit, reported with the
Regional Office. (Sec. 1 [bbb), Rule I, Book V,
Q: What is an organized establishment? IRR)

A: It refers to an enterprise where there exists Q: What are the three (3) conditions to
a recognized or certified sole and exclusive voluntary recognition (VR)?
bargaining unit. (Sec. 1 [II], Rule I, Book V,
IRR) A: VR requires 3 concurrent conditions:
1. VR is possible only in an unorganized
Q: What is an unorganized establishment? establishment.
A: It is one where no union has yet been duly 2. Only one union must ask for
recognized or certified as bargaining recognition. If there 2 or more unions
representative. asking to be recognized, the Er
cannot recognize any of them; the
Q: PT& T Supervisory employees (Ees) rivalry must be resolved through an
Union-APSOTEU filed a petition for election.
certification election (PCE) among the 3. The union voluntarily recognized
supervisory Ees of PT& T. The UNION later should be the majority union as
on amended its petition to include the indicated by the fact that members of
allegation that PT&T was an unorganized the bargaining unit did not object to
establishment employing roughly 100 the projected recognition. If no
supervisory Ees from whose ranks will objection is raised, the recognition will
constitute the bargaining unit sought to be proceed, the DOLE will be informed
established. PT&T opposed the petition, and CSA recognition will commence.
alleging that a certified bargaining unit If objection is raised, the recognition
already existed among its rank-and-file Ees is barred and a certification election
which makes it an organized or consent election will have to take
establishment. Is PT&T an organized or place.
unorganized establishment?

:i22
 UST GOLDEN NOTES 2010

Note: in an organized establishment, voluntary bargaining unit, for purposes of CB or

recognition is not possible. A petition to hold a CE negotiation. (Sec. 1 [hi, Rule I, Book V, IRR)
has to be filed within the freedom period which
means the last 60 days of the s" year of the Note: The process is called CE because it serves
expiring CSA. The petition may be filed by any as the official, reliabie and democratic basis for
LLO, but the petition must have written support of the BLR to determine and certify the union that
at least 25% of the Ees in the bargaining unit. shall be the exclusive bargaining representative
of the Ees for the purpose of bargaining with the
Q: Where and when to file the petition for Er.
VR?
Q: What is the nature of certification
A: Within 30 days from such rec,ognition, Er election?
shall submit a notice of VR with the Regional
Office which issued the recognized labor A: A certification election is not a litigation but
union's certificate of registration or certificate merely an investigation of a non-adversarial
of creation of a chartered local. fact-finding character in which BLR plays a
part of a disinterested investigator seeking
Q: What are the requirements for VR? merely to ascertain the desire of the
employees as to the matter of their
A: The notice of VR shall be accompanied by representation. (Airline Pilots Ass'n of the
the original copy and 2 duplicate copies of the Philippines v. CIR, 76 SCRA 274)
following req'ts:
1. Joint statement under oath of VR Q: What is the purpose of a certification
2. Certificate of posting of joint election?
statement for 15 consecutive days in
at least 2 conspicuous places in the A: It is a means of determining the worker's
establishment of the bargaining unit choice of:
3. Certificate of posting 1. Whether they want a union to
4. Approximate number of Ees in the represent them for collective
bargaining unit and the names of bargaining or if they want no union to
those who supported the recognition represent them at all.
5. Statement that the labor union is the 2. And if they choose to have a union to
only LLO operating within the represent them, they will choose
bargaining unit. which among the contending unions
will be the sale and exclusive
Note: Where the notice of voluntary recognition is bargaining representative of the
sufficient in form, number and substance and employees in the appropriate
where there is no registered labor union bargaining unit.
operating within the bargaining unit concerned,
the Regional Office, through the Labor Relations Q: What are the issues involved in a
Division shall, within 10 days from receipt of the certification proceeding?
notice, record the fact of VR in its roster of
legitimate labor unions and notify the labor union
A: Certification proceedings directly involve
concerned.
two issues:
1. Proper composition and constituency
Q: What are the effects of recording of fact
of the bargaining unit; and
of voluntary recognition (VR)?
2. The veracity of majority membership
claims of the competing unions so as
A:
to identity the one union that will
1. The recognized labor union shall
serve as the bargaining
enjoy the rights, privileges and
representative of the entire
obligations of an existing bargaining
bargaining unit.
agent of all the employees (Ees) in
the bargaining unit.
Note: Some of the Ees may not want to have a
2. It shall also bar the filing of a petition
union; hence, "no union" is one of the choices
for certification election by any labor
named in the ballot. If "no union" wins. the
organization for a period of 1 year
company or the bargaining unit remains un-
from the date of entry of VR.
unionized for at least 12 months, the period is
Q: What is certification election (CE)? known as 12-month bar. After that period, a
petition for a CE may be filed again.
A: It is the process of determining through
secret ballot the sale and exclusive
representative of the Ees in an appropriate

UN!VERSITY OF SANTO TOMAS

PacuCtaa ae (])ereclio CiviC
 LABOR RELATIONS: COLLECTIVE BARGAINING

Q: Distinguish the requisites for a petition certificate to its local chapter

for certification election between an participating in the CE
organized and an unorganized 3. A local chapter which has been
establishment. issued a charter certificate
4. An Er only when requested to bargain
A: collectively in a bargaining unit where
no registered CSA exists. (Sec 1,
Rule VIII, Book V, IRR as amended
by D. O. 40-F-03)

Note: A national union or federation filing a

petition in behalf of its local/chapter shall not be
required to disclose the names of the
local/chapter's officers and members, but shall
CE attach to the petition the charter certificate it
Not applicable. No
except within 60 days issued to its local/chapter. (Sec. 1, Rule VIII,
freedom period.
before the expiration Book V, IRR as amended by D. O. 40-F-03)
of the CSA. (See Art. Petition can be filed
anytime.
253 & Q: Mayan employee intervene in the
petition for certification election (peE)?
Must be duly
No substantial support
supported by 25% of
rule. A: Yes, for the purpose of protecting his
all the members of the
individual right. (Sec. 1, Rule VIII, Book V, IRR
appropriate bargaining
Why? Intention of law is as amended by 0.0.40-03)
unit (ABU).
to bring in the union, to
implement policy Q: Where is peE filed?
Percentage base: all
behind Art. 211(a).
members of an ABU.
A: It shall be filed with the Regional Office
Note: The approval of the PCE in an unorganized which issued the petitioning union's certificate
bargaining unit is NEVER appealable, the reason of registration/certificate of creation of
being that the law wants the ununionized to be chartered local. (Implementing Rules, as
unionized. amended by D.O. 40-03)

Q: Should the consent signatures of at Q: Who shall hear and resolve the peE?
least 25% of the Ees in the bargaining unit
be submitted simultaneously with the filing A: The Mediator-Arbiter.
of the petition for certification election
(peE)? Q: When to file peE?

A: No, the administrative rule requiring the
simultaneous submission of the 25% consent
signatures upon the filing of PCE should not
be strictly applied to frustrate the detenmination
of the legitimate representative of the workers.
Accordingly, the Court held that the mere filing
of a PCE within the freedom period is sufficient
basis for the issuance of an order for the
holding of a CE, subject to the submission of
the consent signatures within a reasonable
period from such filing. (Port Workers Union of
the Phils. v. Laguesma, G.R. Nos. 94929-30
Mar. 18, 1992)
Q: Who may file a petition for certification
election (peE)?
A: The proper time to file the PCE depends on
whether the Certified Bargaining Unit has a
CSA or not:
1. If it has no CBA, the petition may be
filed anytime outside the 12-month
bar (certification year).
2. If it has CBA, it can be filed only
within the last 60 days of the s" year
of the CBA.
Note: At the expiration of the freedom period, the
Er shall continue to recognize the majority status
, of the incumbent bargaining agent where no PCE
is filed.

A:
1. Any legitimate labor organization
(LLO)
2. A national union or federation which
has already issued a charter

124
 UST GOLDEN NOTES 2010

Q: Distinguish union election from freedom period of such CBA.

certification election.
Alternative Answer:
A: A PCE may be filed outside the freedom
, CERTIFICATION period of a current CBA if such CBA is a
ONION ELECTION
, ! -,;.;~ . ELECTION new CBA that has been prematurely entered
Held pursuant to the The process is ordered into, meaning, it was entered into before
union's constitution and supervised by the expiry date of the old CBA. The filing of
and by-laws DOLE the PCE shall be within the freedom period of
All Ees whether union the old CBA which is outside the freedom
Right to vote is or non-union members period of the new CSA that had been
enjoyed only by union who belon~to the., prematurely entered into.
members appropriate bargaining
unit can vote Q: Are probationary employees (Ees)
The winner in a CE is entitled to vote in a CE? Why?
an entity, a union,
Winners of union
which becomes the
election become A: In a CE, all rank-and-file Ees in the
representative of the
officers and appropriate bargaining unit (ABU) are entitled
whole bargaining unit
representatives of the to vote. This principle is clearly stated in
that includes even the
union only Art. 255 of the LC which states that the "labor
members of the
defeated unions. organization designated or selected by the
majority of the Ees in such unit shall be the
Note: Both in CE and union election, the exclusive representative of the Ees in such
prescribed procedures should be followed. unit for the purpose of collective bargaining
(CB)."
Q: Can a "no-union" win in a ceriification
Election (CE)? CB covers all aspects of the employment
A: Yes. Because the objective in a CE is to relation and the resultant CBA negotiated by
ascertain the majority representation of the the certified union binds all Ees in the
bargaining representative, if the Ee's desire to bargaining unit. Hence, all rank- and-file Ees,
be represented at all by anyone. Hence, no probationary or permanent, have a substantial
union is one of the choices in aCE, (2006 Bar interest in the selection of the bargaining
Question) representative. The LC makes no distinction
as to their employment status as basis for
eligibility to vote in the petition for CEo The
Alternative Answer:
No. A no union cannot win in a CEo The law refers to "all" the Ees in the bargaining
unit. All they need to be eligible to vote is to
purpose of a CE is to select an excusive
bargaining agent and a no union vote would belong to the "bargaining unit," (Airtime
precisely mean that the voter is not choosing
Specialists, Inc. V. Ferrer-Calleja, G.R. No.
any of the contending unions. If the no- union 80612-16, Oec. 29, 1989). (1999 Bar
votes constitute a majority of the valid votes Question)
cast, this fact will all the more mean that no
union won in CEo A one-year bar will Q: What is direct certification?
consequently stop the holding of another CE to
allow the Er to enjoy industrial peace for at A: It is the process whereby the Med-Arbiter
least one year. directly certifies a labor organization of an
appropriate bargaining unit (ABU) of a
Q: In what instance may a PCE be filed company after a showing that such petition is
outside the freedom period of a current supported by at least a majority of the Ees in
CBA? the bargaining unit.

Q: Does the failure of SAMAFIL (an

A: As a general rule, in an establishment
where there is a CBA in force and effect, a
PCE may be filed only during the freedom
period of such CBA. But to have that effect, the
CBA should have been filed and registered
with the DOLE. (Art 231, 253-A and 256, LC).
(1997 Bar Question)
Thus, a CBA that has not been filed and
registered with the DOLE cannot be a bar to a
independent union) to prove its affiliation
with NAFLU-KMU federation affect its right
to file a PCE as an independent union?
A: No, as a LLO, it has the right to file a PCE
on its own beyond question. Its failure to prove
its affiliation with the NAFLU-KMU cannot
affect its right to file said PCE as an
independent union. At the most, its failure will

~li!
result in an ineffective affiliation -,yith NAFLU-
CE and such election can be held outside the

UN!V E R S ITY OF S ANTO TOM.A~ 125

Pacu(taa de CDereclio Cl'lld "i,
 LABOR RELATIONS: COLLECTIVE BARGAINING

KMU. Despite affiliation, the local union Rule VIII, Book V, IRR as amended by DO 40-F-
remains the basic unit free to serve the 03)
common interest of ali its members and pursue
its own interests independently of the Q: What are the requisites before a labor
federation. (Samahan ng mga Manggagawa union can be declared a winner (double
sa Filsystems v. SLE, G.R. No. 128067, June majority rule)?
5, 1998)
A:
Q: May illegally dismissed Ees of the 1. Majority of the eligible voters cast
company participate in the certification their votes.
election (CE)? 2. Majority of the valid votes cast is for
such union.
A: Yes, it is now well-settled that Ees who
have been improperly laid off but who have at Q: How to determine the double majority
present an una ban do ned right to or rule?
expectation of re-employment, are eligible to
vote in CE's. Thus, and to repeat, if the A:
dismissal is under question, as in the case 1. In determining the eligible votes cast
now at bar whereby a case of iliegal dismissal (first majority) include spoiled ballots
and/or ULP was filed, the Ee's concerned 2. In determining valid votes (second
could still qualify to vote in the elections. (Phi/. majority), eliminate spoiled ballots but
Fruits & Vegetables Industries v. Torres, G.R. included the challenged votes.
No. 92391, July 3, 1992)
Q: A certification election was conducted
Q: Is direct certification (DC) still allowed? among the rank-and-file Ees of Holiday Inn
Manila Pavilion Hotel. In view of the
A: No. Even in a case where a union has filed significant number of segregated votes,
a petition for CE, the mere fact that there was contending unions, National Union of
no opposition does not warrant a DC. More so Workers in Hotels, Restaurants and Allied
in a case when the required proof is not Industries-Manila Pavilion Hotel Chapter
presented in an appropriate proceeding and (NUWHRAIN-MPHC) and Holiday Inn Manila
the basis of the DC is the union's self-serving Pavilion Hotel Labor Union (HIMPHLU),
assertion that it enjoys the support of the referred the case back to the Med-Arbiter to
majority of the Ees, without subjecting such decide which among those votes would be
assertion to the test of competing claims. opened and tallied. 11 votes were initially
(Samahang Manggagawa sa Permex v. segregated because they were cast by
Secretary, G.R. No. 107792, Mar. 2, 1998) dismissed Ees, albeit the legality of their
dismissal was still pending before the CA.
Q: Can the BLR certify a union as the 6 other votes were segregated because the
exclusive bargaining representative after Ees who cast them were already occupying
showing proof of majority representation supervisory posltions at the time of the
thru union membership cards without election. Still 5 other votes were
conducting an election? segregated on the ground that they were
cast by probationary Ees and, pursuant to
A: No. The LC (In Arts. 256, 257 and 258) the existing CBA, such Ees cannot vote.
provides only for a CE as the mode for NUHWHRAIN-MPHC further avers that
determining the exclusive collective HIMPHLU, which garnered 169 votes,
bargaining representative if there is a should not be immediately certified as the
question of representation in an appropriate bargaining unit, as the opening of the 17
bargaining unit. (1998 Bar Question) segregated ballots would push the number
of valid votes cast to 338, hence, the 169
Q: What is a consent election? votes which HIMPHLU garnered would be 1
vote short of the majority which would then
A: An election voluntarily agreed upon by the become 170.
parties, with or without the intervention by
DOLE. (Sec. 1 (hi, Rule I, Book V, IRR) Was HIMPHLU able to obtain the required
majority for it to be certified as the
Note: To afford an individual employee-voter an exclusive bargaining agent?
informed choice where a local/chapter is the
petitioning union, the local/chapter shall secure A: No, it is well-settled that under the "double
its certificate of creation at least 5 working days majority rule" for there to be a valid certification
before the date of the consent election. (Sec.1, election, majority of the bargaining unit must
 UST GOLDEN NOTES 2010

have voted and the winning union must have

garnered majority of the valid votes cast.
Following the ruling that all the probationary
Ees votes should be deemed valid votes while
that of the supervisory Ees should be
excluded, it follows that the number of valid
votes cast would increase. Under Art. 256 of
the LC, the union obtaining the majority of the
valid votes cast by the eligible voters shall be
certified as the sole exclusive bargaining agent
of all the workers in the appropriate bargaining
unit. This majority is 50% + 1, in tthis case at
least 170. HIMPHLU obtained 169, clearly it
was not able to obtain a majority vote.
(NUWHRAIN -MPHC v. SLE, G.R. No.
181531, July 31,2009, J. Carpio-Morales)

Q: What is a run-off election?

A: An election conducted when:

1. An election which provides for 3 or
more choices results in none of the
contending unions receiving a
majority of the valid votes cast, and
2. There are no objections or challenges
which if sustained can materially alter
the results, provided
3. The total number of votes for all the
contending unions is at least 50% of
the number of votes cast. (Sec. 1,
Rule X, Book V, IRR)
4. Not one of the choices obtained the
majority of the valid votes cast (50%+
1 second majority);
5. The two choices which garn·ered the
highest votes will be voted and the
one which garners the highest
number of votes will be declared the
winner provided they get the majority
votes of the total votes cast.

Q: Who are the choices in a run-off

election?
nd
A: The unions receiving the highest and 2
highest number of the votes cast. (Sec. 2, Rule
X, Book V, IRR)

Note: "No Union" shall not be a choice in the run-

off election

UNIVERSITY OF SANTO TOMAS 127

PacuCtaa ae l1)erecno CiviC
 LABOR RELATIONS: COLLECTIVE BARGAINING

Q: Distinguish certification election, consent election, direct certification, and run-off and re-run
elections.

A:

Requires petition CE filed by a union or Er. A

To determine the sole and exclusive bargaining
agent of all the Ees in an appropriate bargaining unit
for the purpose of collective bargaining.
Med-Arbiter grants the petition and an election
officer is designated by regional director to supervise
the election.
Note: Med-Arbiter may determine if there is Er-Ee
r<>",tir.,nc: h,;n and if the voters are

o determine the issue majority I of ~~~

all the workers in the appropriate CB unit mainly for
the purpose of determining the administrator of the Held by agreement of the unions with or without the
CBA when the contracting union suffered massive participation of the Med-Arbiter.
disaffiliation and not for the purpose of determining
the ent for of CB.

is directly cert as an appropriate Med-Arbiter union is the

bargaining unit of a company upon showing that
petition is supported by at least a majority of the Ees
in the bargaining unit.
allowed.
exclusive CB representative of the Ees of an
appropriate bargaining unit without holding a CE, but
merely on the basis of evidence of in support of the
union's claim that is the choice of the majority of the
Ees.

Takes place
1. If one choice receives a plurality of the vote and
the remaining choices results in a tie; or
2. If all choices received the same number of votes.

union is also a choice.

Note: Petition for cancellation of registration is not a bar to a PCE. No prejudicial question shall be
entertained in a petition for certification election. (D. O. 40-03)

(0 BARS TO CERTIFICATION ELECTlON(CE)' 3. The petition was filed before or after

the FREEDOM PERIOD of a duly
Q: What are the grounds for denying the registered GBA; provided that the 60-
PCE? day period based on the original GBA
shall not be affected by any
A: amendment, extension or renewal of
1. The petitioning union or federation is the GBA; (contract bar rule)
not listed in the DOLE's registry of
legitimate labor unions or that its 4. The petition was filed within 1 year
registration certificate legal from entry of voluntary recognition or
personality has been revoked or within the same period from a valid
cancelled with finality certification, consent or run-off
election and no appeal on the results
2. Failure of a local chapter or national of the certification, consent or run-off
union/federation to submit a duly election is pending; (12-month bar;
issued charter certificate upon filing of certification year bar rule)
the petition

128
 UST GOLDEN NOTES 2010

5. A duly certified union has of a duly registered union, the Med-

commenced and sustained Arbiter issued an order calling for a CE on
negotiations with the Er in July 25, 2001. This order was promulgated
accordance with Art. 250 of the LC and served on the parties on July 12,
within the 1-year period. (negotiation 2001. On July 14, 2001, UNlOAD submitted
bar rule) and served the required documents for its
registration as an independent union, i
5. There exists a bargaining deadlock which documents were 'approved by the
which had been submitted to DOLE on July 15,2001.
conciliation or arbitration or had
become the subject of a valid notice During the elections, UNlOAD won over
of strike or lockout to. which an SIGAW. SIGAW questioned UNlOAD's
incumbent or certified' batg~ining victory on the ground that UNlOAD was
agent is a party. (deadlock bar rule) not a duly registered union when it filed the
petition for a CEo Shall SIGAW's case
7. In case of an organized prosper or not? Why?
establishment, failure to submit the
25% support req't for the filing of the A: No, SIGAW's case will not prosper. The
PCE. application of technicalities of procedural
req'ts in CE disputes will serve no lawful
8. Non-appearance of the petitioner for objective or purpose. It is a statutory policy
2 consecutive scheduled conferences that no obstacles should be placed on the
before the med-arbiter despite due holding of aCE, (Samahang ng Manggagawa
notice, and sa Pacific Plastic vs. Laguesma, GR. No.
111245, Jan. 31, 1997) and that the law is
9. Absence of Er-Ee relationship indisputably partial to the holding of a CE.
between all the members of the (Western Agusan vs. Trajano G.R. No. 65833,
petitioning union and the owner of the May 6, 1991)
establishment where the proposed
bargaining unit is sought to be At any rate, UNlOAD completed all the req'ts
represented. (Sec. 14[a), Rule VIII, for union registration on July 14,2001, and
Book V, IRR, as amended by D.O. legitimate union status was accorded on July
40-F-03) 15, 2000, or at least 10 days before the.
scheduled date for holding the CEo (2001 Bar
Q: What is a prohibited ground for the Question)
denial/suspension of the petition for
certification election? Q: What is meant by "contract-bar rule"?

A: The inclusion as union members of Ees A: Contract-bar rule means that while a valid
outside the bargaining unit. Said Ees are and registered CSA is subsisting, the BLR is
automatically deemed removed from the list of not allowed to hold an election contesting the
membership of said unions. majority status of the incumbent union except
during the 50-day period immediately prior to
Q: Does the filing of a petition to cancel the its expiration, which period is called the
petitioner's registration cause the freedom period.
suspension or dismissal of the petition for
certification election? Note: In the absence of such timely notice or
filing of petition, the contract executed during the
A: No. To serve as a ground for dismissal of a automatic renewal period is a bar to CEo
PCE, the legal personality of the petitioner
should have been revoked or cancelled "with There shall be no amendment, alteration, or
finality". termination of any of the provisions of the CSA
except to give notice of one party's intention to
amend, alter and terminate the provisions within
Q: UNlOAD, a labor organization claiming
the freedom period.
to represent the majority of the rank and
file workers of BAGSAK Toyo
Manufacturing Corp. (BMTC), filed a
petition for CE during the freedom
period obtaining in said corp. Despite
the opposition thereto by SIGAW
Federation on the ground that UNlOAD was
not possessed with all the attributes

UNIVERSITY OF SANTO TOMAS

Pacu[taa ae (])erecno CiviC
 LABOR RELATIONS: COLLECTIVE BARGAINING
Q: What are the req'ts in order to invoke
the contract bar rule?
A: The existing CBA must:
1. Be in writing and signed by all
contracting parties
2. Contain the terms and conditions of
employment
3. Cover employees in an appropriate
bargaining unit
4. Be for a reasonable period or
duration
5. Be ratified
6. Be registered with the SLR; and
7. The violation of the contract bar rule
or the existence of a duly registered
CSA must be specially pleaded as a
defense.
Q: What is the effect of an invalid
unregistered eBA?
A: There is no bar and therefore a certification
election may be held.
Note: Registration of CSA only puts into effect
the contract-bar rule but the CSA itself is valid
and binding even if unregistered.
Q: What are the exceptions to the contract
bar rule?
A:
1. The CSA is unregistered
2. The CSA is inadequate
incomplete
3. The CSA was hastily entered into
(Doctrine of premature extension)
4. Withdrawal of affiliation from the
contracting union brought about by
schism or mass disaffiliation
5. Contract where the identity of the
representative is in doubt. (ALU v.
Ferrer Calleja, G.R. No. 85085, Nov.
6, 1989)
6. CSA entered into between the Er and
the union during the pendency of a
petition for CE (Vassar Industries Ees
Union v. Estrella, G.R. No. L-46562,
Mar. 31, 1978)
7. CBA conducted between the Er and
the union is not bar to a certification
election filed by another union and
said CSA can be renegotiated at the
option of the new bargaining agent.
(ATU v. Hon. Noriel, G.R. No. L-
48367, Jan. 16, 1979)
8. A CBA registered with falsified
supporting documents
9. CSA was concluded in violation of an
order enjoining the parties from
entering into a CSA until the issue of
representation is resolved
10. Petition is filed during the 50-day
freedom period.
Note: Basic to the contract bar rule is the
proposition that the delay of the right to select
representatives can be justified only where
stability is deemed paramount. Excepted from the
contract bar rule are certain types of contracts
which do not foster industrial stability, such as
contracts where the identity of the representative
is in doubt. Any stability derived from such
contracts must be subordinated to the Ees'
freedom of choice 'because it does not establish
the type of industrial peace contemplated by law.
(Firestone Tire & Rubber Company Ee's Union v.
Estrella, G.R. No. L-45513-14, Jan. 6, 1978)
Q: What is the successor- in-interest
or doctrine?
A:
GR: It is when an Er with an existing CSA
is succeeded by another Er, the successor-
in-interest who is the buyer in good faith
has no liability to the Ees in continuinq
employment and the bargaining agreement
because these contracts are in personam.
XPNs:
-1-.-When the successor-in-interest
expressly assumes an obligation;
2. The sale is a device to circumvent the
obligation; or
and
3. The sale or transfer is made in bad
faith.
Q: What is the substitutionary doctrine?
A: It is where there occurs a shift in the Ees
union allegiance after the execution of a
collective bargaining (CS) contract with the Er,
the Ees can change their agent (labor union)
but the CS contract which is still subsisting
continues to bind the Ees up to its expiration
date. They may however, bargain for the
shortening of said expiration date.
Note: The Er cannot revoke the validly executed
CS contract with their Er by the simple expedient
of changing their bargaining agent. The new
agent must respect the contract. (Benguet
Consolidated Inc. v. BCI Ees and Worker's
Union-PAFLU, GR. No. L-24711, April 30, 1968)
It cannot be invoked to support the contention
that a newly certified CS agent automatically
assumes all the personal undertakings of the
former agent-like the "no strike clause" in the
CBA executed by the latter.
 UST GOLDEN NOTES 2010
Q: When does deadlock arise?
A: It arises when there is an impasse, which
presupposes reasonable effort at good faith
bargaining which, despite noble intentions, did
not conclude in an agreement between the
parties.
Q: What is deadlock bar rule?
A: A petition for certification election (PCE)
cannot be entertained if, before th!)lfiling of the
PCE, a bargaining deadlock to which an
incumbent or certified bargaining agent is a
party, had been submitted to conciliation or
arbitration or had become the subject of a
valid strike or lockout.
Q: What are the indications of a genuine
deadlock?
A:
1. The submission of the deadlock to a
third party conciliator or arbitrator;
and
2. The deadlock is the subject of a valid
notice strike or lockout. -
Q: Capitol Medical Center Ees' Association-
Alliance of Filipino Workers (CMCEA-AFW)
emerged as the certified representative of
the rank-and-file Ees at Capitol Medical
Center (CMC). Due to CMC's refusal to
bargain collectively, CMCEA-AFW filed a
notice of strike and later on staged the
strike after complying with the other legal
req'ts. The SLE assumed jurisdiction over
the case and issued an order certifying the
same to the NLRC for compulsory
arbitration. During all of these events
Capitol Medical Center Alliance of
Concerned employees (Ees)-Unified
Filipino Service Workers filed a petition for
CE among the regular rank-and-file Ees of
CMC. The petition for CE was dismissed
and the CMC was directed to negotiate with
CMCEA-AFW. Was the dismissal of the
PCE proper?
A: Yes, if the law proscribes the conduct of a
CE 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 Er to the
negotiation table by the certified bargaining
agent, there was "no reasonable effort in good
faith" on the Er to bargain collectively.
The circumstances in this case should be
considered as similar in nature to a a legitimate labor organization, the Er shall not
"bargaining deadlock" when no CE could be
held. This is also to make sure that no
UN IV
floodgates will be opened for the
circumvention of the law by unscrupulous Ers
to prevent any certified bargaining agent from
negotiating a CBA. Sec. 3, (Rule VIII), Book V
of the IRR should be interpreted liberally so as
to include a circumstance where a CBA could
not be concluded due to the failure of one
party to willingly perform its duty to bargain
collectively. (Capdol Medical Center Alliance
of Concerned Ees v. Laguesma, GR. No.
118915, Feb. 4, 1997)
Q: Should the certification election
proceedings be suspended in view of the
pending case for cancellation of the
union's certificate of registration?
A: No, the pendency of a cancellation case is
not a ground for the dismissal or suspension of
a representation proceeding considering that a
registered labor organization (LO) continues to
be a legitimate one entitled to all the rights
appurtenant thereto until a final valid order is
issued cancelling such registration.
Once a LO attains the status of a LLO it begins
to possess all of the rights and privileges
granted by law to such organizations. As such
rights and privileges ultimately affect areas
which are constitutionally protected, the
activities in which LO, associations and unions
are engaged directly affect the public interest
and should be zealously protected.
(Progressive Dev't Corp. v. SLE, G.R. No.
115077, April 18, 1997)
Q: What is negotiation bar rule?
A: A PCE cannot be entertained if, before the
filing of the PCE, the duly recognized or
certified union has commenced negotiations
with the Er in accordance with Art. 250 of the
LC.
Q: What is certification year rule?
A: No PCE may be filed within one year from
the date of a valid certification, consent, or run-
off election or from the date of voluntary
recognition.
ART. 258-A. EMPLOYER AS A BYSTANDER
Q: What is the concept of an Er as a
bystander?
A: In all cases, whether the petition for
certification election (PCE) is filed by an Er or
be considered a party thereto with a
concomitant right to oppose a P,CE.
E R SIT Y 0 F SAN ToT 0 MAS ~. 131
Pacu{taa ae (])ereclio CiviC ""."
 LABOR RELATIONS: COLLECTIVE BARGAINING

Note: Er's participation shall be limited to: motion to dismiss the Union's
1. Being notified or informed of petitions of PCE
such nature; b. Proceed to hear the merits of the
2. Submitting the list of Ees during the pre- petition, especially:
election conference should the Med-
i. The appropriation of the
Arbiter act favorably on the petition.
claimed bargaining unit;
ii. Inclusion and exclusion of
Q: May the company actively participate in
voters, or the proposed voter
the conduct of the election in order to see
list; and
to it that the election is clean, peaceful,
iii. If the petition is in order, to
orderly and credible?
set the date, time and place
of the election.
A: Yes, the manner in which the election was
3. The Er has no remedy. The petition
held could make the difference between
for CE was initiated by the union;
industrial strife and industrial harmony in the
hence, the Er is a total stranger or a
company. What an Er is prohibited from doing
bystander in the election process.
is to interfere with the conduct of the
(Phil. Fruits and Vegetable
certification election for the purpose of
In d u s t r i e s , Inc. v. Torres,
influencing its outcome. But certainly an Er has G.R. No. 92391, July 3, 1992)
an abiding interest in seeing to it that the
4. To allow an Er to assert a remedy is
election is clean, peaceful, orderly and
an act of interference in a matter
credible. (National Federation of Labor v. SLE
which is purely a concern of the
and Hijo Plantation Inc., G.R. No. 104556,
Union. (1996 Bar Question)
Mar. 1g, 1998)

Q: PT & T Supervisory Ees Union filed a

petition for the holdlnq of a certification
election (CE) among the supervisory Ees
of the PT&T Company. The company
moved to dismiss the petition on the
ground that union members were
performing managerial functions and were
not merely supervisory Ees. The company
also alleged that a certified bargaining unit
existed among its rank and file Ees
which barred the filing of the petition.
Academics Committee
1. Does the company have the Chairperson: Abraham D. Genuino II
standing to file the motion to Vice-Chair for Academics: Jeannie A Laurentino
dismiss? Explain. Vice-Chair for Admin & Finance: Aissa Celine H. Luna
2. If you were the Med-Arbiter, Vice-Chair for Layout & Design: Loise Rae G. Naval
how would you resolve the
petition. Labor Law Committee
3. What is the proper remedy of an Subject Head' Lester Jay Alan E. Flores II
Er to ensure that the Ees are
Assistant SlIbject Head' Domingo B. Diviva V
qualified to hold aCE?

A: Members:
1. No, the company has no standing Rene Francis P. Batalla
to file the motion to dismiss as the Er Diane Camilla R. Borja
has no right to interfere in a purely Maria Kristina L. Dacayo-Garcia
union matter or concern. (Phil. Fruits Christian Nino A. Diaz
and Vegetable Industries, Inc. v. A.ngelo S. Diokno
Torres, G.R. No. 92391, July 3, 1992) Genesis R. Fulgencio
J eanelle C. Lee
A CE is the sole concern of the Jemuel Paolo M. Lobo
workers and the Er is regarded as Andrew W. Montesa
nothing more than a bystander with
Maria Maica Angelika Roman
no right to interfere at all in the
election.
2. As the med arbiter, I will:
a. Deny, for lack of merit, the Er's
 UST GOLDEN NOTES 2010

:~"'~STRIKES;iOCKOUTS'AND CONCERTED (Republic Savings Bank v. CIR, G.R. No. L-

I' - -,. , .. ACTION-S-:' -~ 20303, Oct. 31, 1967)

Q: What is the constitutional basis of Q: What is a strike?

strikes, lockouts and other concerted
activities? A: It means any temporary stoppage of work
by the concerted action of employees as a
A: The State shall guarantee the rights of all result of an industrial or labor dispute. (Sec. 1
workers to self-organization, collective [uu), Rule I, Book V, IRR)
bargaining and negotiations, and. peaceful It shall comprise not only concerted work
concerted activities, including the right to strike stoppages, but also slowdowns, mass leaves,
in accordance with law (Sec. 3, A~. XIII,,1987 sitdowns, attempt to damage, destroy or
Constftution) . sabotage plant equipment and facilities, and
similar activities. (Samahang Manggagawa sa
Note: The law does not look with favor upon Sulpicion Lines v. Sulpicio Lines, Inc., G.R.
strikes and lockouts because of. their disturbing No. 140992, Mar. 25, 2004)
and pernicious effects upon the social order and
the public interests; to prevent or avert them and Q: What is the purpose of a strike?
to implement Sec. 6, Art. XIV of the Constitution,
the law has created several agencies, namely: A: A strike is a coercive measure resorted to
the BLR, the DOLE, the Labor Management by laborers to enforce their demands. The idea
Advisory Board, and the CIR. (Luzon Marine behind a strike is that a company engaged in a
Dev't Union v. Roldan, G.R. No. L-2660, May 30, profitable business cannot afford to have its
1950) production or activities interrupted, much less,
paralyzed. (Phil. Can Co. v. CIR, G.R. No. L-
Q: What is a concerted action? 3021, July 13, 1950)

A: It is an activity undertaken by 2 or more Q: What is a lockout?

employees, by one on behalf of the others.
A: It means any temporary refusal of an
Q: Are all concerted actions strikes? employer to furnish work as a result of an
industrial or labor dispute. (Art. 212 [pJ)
A: Not all concerted activities are strikes. They
may only be protest actions - they do not Q: What is picketing?
necessarily cause work stoppage by the
protesters. A strike in contrast is always a A: It is the act of marching to and fro the
group action accompanied by work stoppage. employers premises which is usually
accompanied by the display of placard and
Q: The Ees wrote and published a letter to other signs, making known the facts involved
the bank president, demanding his in a labor dispute.
reSignation on the grounds of immorality,
nepotism, favoritism and discrimination in The right to picket as a means of
the appointment and promotion of bank communicating the facts of a labor dispute is a
Ees. The bank dismissed the 8 Ees on the phase of the freedom of speech guaranteed by
alleged libelous letter. Were the Ees the Constitution. If peacefully carried out, it can
engaged in a concerted activity? not be curtailed even in the absence of Er-Ee
relationship. (PAFLU v. Cloribel, G.R. No. L-
A: Yes, assuming that they acted in their 25878, Mar. 28, 1969)
individual capacities when they wrote the
letter, they were nonetheless protected, for Q: Is the right to picket an absolute right?
they were engaged in a concerted activity, in
their right of self-organization that includes A: No, while peaceful picketing is entitled to
concerted activity for mutual aid and protection as an exercise of free speech, the
protection. Any interference made by the courts are not without power to confine or
company will constitute as ULP. localize the sphere of communication or the
demonstration to the parties to the labor
The joining in protests or demands, even by a dispute, including those with related interests,
small group of Ees, if in furtherance of their and to insulate establishments or persons with
interests as such is a concerted activity no industrial connection or having interest
protected by the Industrial Peace Act. It is not totally foreign to the context of the dispute.
necessary that union activity be involved or (Liwayway Pub., Inc. v. Permanent Concrete
that collective bargaining be contemplated,

UNIVERSiTY OF SANTO TOMAS \::~) 133

PacuCtaa ae <Dereclio CiviC '.'
 LABOR RELATIONS: STRIKES, LOCKOUTS AND CONCERTED ACTIONS

Workers Union, G.R. No. L-25003, Oct. 23, Such a slowdown is generally condemned as
1981) inherently illicit and unjustifiable, because
while the employees (Ees) "continue to work
Q: Who is a strike-breaker? and remain at their positions and accept the
wages paid to them," they at the same time
A: Any person who obstructs, impedes, or "select what part of their allotted tasks they
interferes with by force, violence, coercion, care to perform of their own volition or refuse
threats, or intimidation any peaceful picketing openly or secretly, to the Er's damage, to do
affecting wages, hours or conditions of work or other work;" in other words, they "work on their
in the exercise of the right of self-organization own terms." (Interphil Laboratories Ees Union-
or collective bargaining. (Art. 212 [r)) FFW v. Interphil Laboratories, Inc., G.R. No.
142824,Oec. 19,2001)
Q: What is a strike area?
Q: What are the characteristics of a strike?
A: It means the establishment, warehouses,
depots, plants or offices, including the sites or A:
premises used as runaway shops, of the Er 1. An Er-Ee relationship
struck against, as well as the immediate 2. Existence of a labor dispute
vicinity actually used by picketing strikers in 3. Employment relation is deem.ed to
moving to and fro before all points of entrance continue although in a state of
to and exit from said establishment. (Sec. 1 belligerent suspension
[wi, Rule I, Book V, IRR) 4. Temporary work stoppage
5. Work stoppage is done through
Q: What is an internal union dispute? concerted action
6. The striking group is a legitimate
A: It includes all disputes or grievances arising labor organization; in case of a
from any violation of or disagreement over any bargaining deadlock, it must be the
provision of the constitution and by laws of a employees' sole bargaining
union, including any violation of the rights and representative
conditions of union membership provided for in
this i.c. (Art. 212 [qj) Q: PAL dismissed strike leader Capt.
Gaston as a result of which the Union
Q: What is a boycott? resolved to undertake the grounding of all
PAL planes and the filing of applications
A: It is an attempt, by arousing a fear of loss, for "protest retirement" of members who
to coerce others, against their will to withhold had completed 5 years of continuous
from one denominated "unfriendly to labor" service, and "protest resignation" for those
their beneficial business intercourse. who had rendered less than 5 years of
service in the company. PAL
Q: What is a slowdown? acknowledged receipt of said letters and
among the pilots whose "protest
A: It is a method by which one's employees, reslqnatlcn or retirement" was accepted by
without seeking a complete stoppage of work, PAL were Enriquez and Ecarma.
retard production and distribution in an effort to
compel compliance by the employer with the Before their readmission, PAL required
labor demands made upon him. Enriquez and Ecarma to accept 2
conditions, namely: that they sign
Q: Does an "overtime boycott" or "work conformity to PAL's letter of acceptance of
slowdown" by the employees constitute a their retirement and or reslqnatlon and that
strike and hence a violation of the CBA's they submit an application for employment
"No strike, no lockout" clause? as new employees (Ees) without protest or
reservation. As a result of this their
A: Yes, the concept of a slowdown is a "strike seniority rights were lost.
on the installment pian." It is a willful reduction
in the rate of work by concerted action of Are the pilots entitled to the restoration of
workers for the purpose of restricting the their seniority rights?
output of the employer (Er), in relation to a
labor dispute; as an activity by which workers, A: No, an Ee has no inherent right to
without a complete stoppage of work, retard seniority. He has only such rights as may be
production or their performance of duties and based on a contract, statute, or an
functions to compel management to grant their administrative regulation relative thereto.
demands. Seniority rights which are acquired by an Ee

134
 UST GOLDEN NOTES 2010

through long-time employment are contractual a strike against their company. The union
and not constitutional. The discharge of an Ee members picketed, stopped and prohibited
thereby terminating such rights would not Liwayway's trucks from entering the
violate the Constitution. When the pilots compound to load newsprint from its
tendered their respective retirement or bodega.
resignation and PAL immediately accepted
them, both parties mutually terminated the Does the lower court have jurisdiction to
contractual employment relationship between issue a writ of preliminary injunction
them thereby curtailing whatever seniority considering that there was a labor dispute
rights and privileges the pilots had earned between Permanent Concrete Products,
through the years. Inc. and the union?
,1 ~
Q: Does the action of the Ees of PAL fall A: Yes, Liwayway is not in anyway related to
under the ambit of concerted actions the striking union except for the fact that it is
protected by law1 the sub- lessee of a bodega in the company's
compound.
A: No, the pilot's mass action was not a strike
because Ees who go on strike do not quit their The business of Liwayway is exclusively the
employment. Ordinarily, the relationship of Er publication of magazines which has absolutely
and Ee continues until one of the parties acts no relation or connection whatsoever with the
to sever the relationship or they mutually act to cause of the strike of the union against their
accomplish that purpose. As they did not company, much less with the terms, conditions
assume the status of strikers, their "protest or demands of the strikers. Liwayway is merely
retirement/resignation" was not a concerted a 3rd person or an innocent by-stander.
activity which was protected by law. (Enrique (Liwayway Pub., Inc. v. Permanent Concrete
v. Zamora, G.R. No. L-51382, Dec. 29, 1986) Workers Union, G.R. No. L-25003, Oct. 23,
Q: What is a labor dispute? - 1981)
A: Any controversy or matter concerning terms
or conditions or representation of persons in Q: Because of financial problems, the
negotiating, fixing, maintaining, changing or company decided to temporarily shutdown
arranging the terms and conditions of its operations at the dyeing and finishing
employment, regardless of whether or not the division. It notified the DOLE of the
disputants stand in the proximate relation of shutdown. Raymund Tomaroy with 16
Ers and Ees. (Gold City Integrated Port members of the union staged a picket in
Services, Inc. v. NLRC, G.R. No. 103560, July front of the company's compound, carrying
6, 1995) placards. He demanded a resumption of
Q: When is a person or entity considered work and 13th month pay. The company
as partiCipating or interested in a labor filed a petition to declare the strike illegal.
dispute? The union argues that they did not stage a
A: strike, for considering that the dyeing and
1. If relief is sought against him or it, finishing division of the company was shut
and down, it could not have caused a work
2. He or it is engaged in the same stoppage. Was the action of the union a
industry, trade, craft, or occupation in strike?
which such dispute occurs, or A: Yes, the concerted efforts of the members
3. Has a direct or indirect interest of the union and its supporters caused a
therein, or temporary work stoppage. The allegation that
4. Is a member, officer, or agent of any there can be no work stoppage because the
association composed in whole or in operation in the division had been shut down is
part of employees or employers of no consequence. It bears stressing that the
engaged in such industry, trade, craft, other divisions were fully operational.
or occupation. (Bukluran ng Manggagawa sa C/othman
Knitting Corp. v. CA, G.R. No. 158158, Jan. 17,
Q: Liwayway Publication Inc. is a second 2005)
sub lessee of a part of the premises of the
Permanent Concrete Products, Inc. It has a
bodega for its newsprint in the sublet
property which it uses for its printing and
publishing business. The daily supply of
newsprint needed to feed its printing plant
is taken from its bodega. The Ees of the
Permanent Concrete Products Inc. declared

UNIVERSITY OF SANTO TOMAS

Pacu[taa de lDerecfzo CiviC
 LABOR RELATIONS: STRIKES, LOCKOUTS AND CONCERTED ACTfONS

Q: What are the types of strike? who are joining the strikers
and the latter's Er
A:
1. Economic strike - used to secure the 5. Secondary strike - Work stoppages
economic demands such as higher of workers of one company to exert
wages and better working conditions pressure on their Er so that the latter
for the workers will in turn bring pressure upon the Er
2. ULP strike - protest against ULP of of another company with whom
management another union has a labor dispute

Q: Give examples of strike and explain their I/Iegal - There is no labor

legality. dispute involved.

A: N9te: A strike can validly take

1. Sit-down strike - Characterized by a
temporary work stoppage of workers
who seize or occupy property of the
Er or refuse to vacate the premises of
the Er.
II/egal - Amounts to a
criminal act because of the
Ee's trespass on the
premises of the Er
2. Wildcat strike - A work stoppage that
violates the labor contract and is not
authorized by the union.
II/egal -Because it fails to
comply with certain req'ts of
. the law, to wit: notice of
strike, vote and report on
strike vote
3. Slowdown - Strike on an installment
plan; an activity by which workers,
without complete stoppage of work,
retard production or their
performance of duties and functions
to compel management to grant their
demands
II/egal - Ees work on their
own terms; while the Ees
continue to work and remain
in their positions and accept
wages paid to them, they at
the same time select what
part on their allotted tasks
they care to perform on their
own volition or refuse openly
or secretly
4. Sympathetic strike - Work stoppages
of workers of one company to make
common cause with other strikers or
other companies without demands or
grievances of their own against the Er
place only in the presence of
and in relation to a labor.
dispute between Er and Ee.
6. Welga ng bayan (Cause Oriented
Strikes) - A political strike and
therefore there is neither a bargaining
deadlock nor any ULP
II/egal- It is a political rally
7. Quickie strikes- brief and
unannounced temporary work
stoppage
II/egal- failure to comply with
notice requirements and etc.
Q: Two unions, joined a welga ng bayan .
The unions, led by their officers, staged a
work stoppage which lasted for several
days, prompting FILFLEX and BIFLEX
Corporations to file a petition to declare the
work stoppage illegal for failure to comply
with procedural req'ts. Whether the Ees
committed an illegal work stoppage?
A: Yes. Ees, who have no labor dispute with
their Er 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. There being no showing that the two
unions notified the corporations of their
intention, or that they were allowed by the
corporations, to join the welga ng bayan, their
work stoppage is beyond legal
protection.(BIFLEX Phils. Inc. Labor Union
(NAFLU) vs. FILFLEX Industrial and
Manufacturing Corp., G.R. No. 155679, Dec.
19, 2006, J. Carpio-Morales)

II/egal - There is no labor

dispute between the workers

136
 UST GOLDEN NOTES 2010

Q: What are the grounds for the declaration 4. After assumption of jurisdiction by the
of strike? SLE
5. After certification or submission of
A: dispute to compulsory or voluntary
1. Deadlock in CSA (economic) arbitration or during the pendency of
2. ULP (political) cases involving the same grounds for
strike or lockout
Note: It is possible tochange an economic strike 6. Labor standards cases such as wage
into a ULP strike. (Consolidated Labor Ass'n of orders. (Guidelines governing Labor
the Phils. v. Marsman and Co., G.R. No. L- Relations [Oct. 19, 19B7) issued by
17038, July 31, 1964) Sec. Drilon. See also Art. 261, LC)
'OJ
Violations of CBA must be gross to b'e considered Q: Distinguish between an economic strike
as ULP. and an ULP strike.

Q: What is conversion doctrine?

A: It is when a strike starts as economic and

later, as it progresses, it becomes a ULP, or
vice versa. Involuntary strike;
, Voluntary strike .forced to go on strike
Q: Can a strike be converted into a because the Ee because of the ULP
lockout? will declare a committed against them by
strike to compel the Er. It is an act of self-
A: No, a strike cannot be converted into a pure management to defense since the Ee's are
and simple lockout by the mere expedient of grant its being pushed to the wall and
filing before the trial court a notice of offer to demands their only remedy is to stage
return to work during the pendency of the labor a strike
dispute between the union and the employer.
(Rizal Cement Workers Union v. CIR, GR. No. agent
L-18442, Nov. 30, 1962). the appropriate
Either the CB agent or the
bargaining unit
LLO in behalf of its members
Q: What are the tests in determining the can declare an
economic strike
legality of strike?

30 days from
A: The following must concur:
notice of strike
1. Purpose test - the strike must be due
before the
to either bargaining deadlock and/or 15 days from the filing of the
intended date of
the ULP notice of strike
actual strike
2. Compliance with the procedural and subject to the 7-
substantive req'ts of the law. (See strike ban
requisites of a valid strike) , .<
3. Means employed test - It states that The cooling-off period may
a strike may be legal at its inception be dispensed with, and the
but eventually be declared illegal if union may take immediate
the strike is accompanied by violence No exception - action in case of dismissal
which is widespread, pervasive and mandatory from employment of their
adopted as a matter of policy and not officers duly elected in
mere violence which is sporadic Note: notice of accordance with the union's
which normally occur in a.strike area. strike and strike constitution and by-laws,
vote may be which may constitute union
Q: What are the instances when a strike or dispensed with; busting where the existence
lockout cannot be declared? they may strike of the union is threatened. It
immediately must still observe the
mandatory 7-day strike ban
A: Non-strikable issues:
period before it can stage a
1. CSA violations not gross in character
valid strike
2. Grounds involving inter/intra-union
disputes
3. When there is no notice of strike or
lockout or without the strike or lockout
vote

UNIVERSITY OF SANTO TOMAS

137
Pacu{taa de (/)erecno CiviC
 LABOR RELATIONS: STRIKES, LOCKOUTS AND CONCERTED ACTIONS

Q: Who may declare a strike? strike vote, at least 24-hours before

the meeting for such purpose (Sec.
A: 10, Rule XXII of the Omnibus Rules
1. Any certified or duly recognized ofthe NLRC).
bargaining representative; in its 5. 7-Day strike ban - a 7-day waiting
absence period before the date of the
2. Any LLO, on grounds of ULP only purported strike (within which the
union intending to conduct a strike
must at least submit a report to DOLE
as to the result ofthe strike vote)
Q: What are the procedural and substantive
requisites before a strike may be declared? Note: To give DOLE an opportunity to
verify whether the projected strike really
A: carries the imprimatur of the majority of
1. Notice of strike - filed with the NCMB the union members in addition to the
taking into consideration the cooling- cooling-off period before the actual
off period strike. (Lapanday Workers' Union, et.a!.
v. NLRC, G.R. Nos. 95494-97, Sep. 7,
Note: The failure of the union to serve 1995)
the company a copy of the notice of
strike is a clear violation of Section 3, Q: What is a cooling-off period?
Rule XXII, Book V of the Rules
Implementing the LC. The A: It is the period of time given the NCMB to
Constitutional precepts of due process mediate and conciliate the parties. It is the
mandate that the other party be notified span of time allotted by law for parties to settle
of the adverse action of the opposing their disputes in a peaceful manner before
party. (Filipino Pipe and Foundry Corp. staging a strike or lockout.
v. NLRC, G.R. No. 115180, Nov.r 16,
1999) Note: COOling-off and waiting period may be
done simultaneously.
2. 30115 day Cooling-off period before
the intended date of actual strike - Q: What is the effect of non-compliance
notice of strike is filed with the NCMB with the requisites of a strike?
taking into consideration the cooling-
off period, at least: A: The strike may be declared illegal.
a. 30 days before the intended
strike for bargaining deadlocks; Q: What is the purpose of giving notice of
b. 15 days before the intended the conduct of a strike vote to the NCMB at
strike for ULP least 24 hours before the meeting for the
said purpose?
3. Strike vote
a. The decision to declare a strike A:
must be approved by a majority 1. Inform the NCMB of the intent of the
of the total union membership in union to conduct a strike vote;
the bargaining unit concerned. 2. Give the NCMS ample time to decide
b. It must be obtained by secret on whether or not there is a need to
ballot through meetings or supervise the conduct of the strike
referenda called for the purpose. vote to prevent any acts of violence
c. Its purpose is to ensure that the and or irregularities;
intended strike is a majority 3. Ample time to prepare for the
decision. The report on the strike deployment of the requisite
vote must be submitted to DOLE personnel. (Capitol Medical Center v.
at least 7 days before the NLRC, G.R. No. 147080, April 26,
intended strike subject to the 2005)
cooling-off period.
d. The regional branch may Q: Is a no strikellockout clause legal?
supervise the conduct of the
secret balloting at its own A: Yes, but it is applicable only to economic
initiative or upon request of any strikes, not ULP strikes. As a provision in the
party. CSA, it is a valid stipulation although the
clause may be invoked by an employer (Er)
4. Furnish the regional branch of the only when the strike is economic in nature or
NCMB with a notice to conduct a one which is conducted to force wage or other

138
 UST GOLDEN NOTES 2010

concessions from the Er that are not mandated disrupt or impede the early settlement
to be granted by the law itself. It would be of the dispute. They are obliged, as
inapplicable to prevent a strike which is part of their duty to bargain
grounded on ULP. (Panay Electric Co. v. collectively in good faith and to
NLRC, G.R. No. 102672, Oct. 4, 1995; participate fully and promptly in
Malayang Samahan ng mga Manggagawa sa conciliation meetings called by the
Greenfield v. Ramos, G.R. No. 113907, Feb. regional branch of the NCMB.
28,2000) 4. A notice, upon agreement of the
parties, may be referred to alternative
Q: What is a preventive mediation case? modes of dispute resolution, including
voluntary arbitration.
A: It involves labor disputes wlYch are the
subject of a formal or informal request for Q: Was the strike held by the union legal
conciliation and mediation assistance sought based on the fact that the notice of strike
by either or both parties or upon the initiative only contained general allegations of ULP?
of the NCMB. (Sec. 1 (mmj, Rule I, Book V,
IRR) A: No. Rule XIII Sec. 4 Book V of the
Implementing Rules of the LC provides: In
Note: The regional branch may treat the notice cases of ULP, the notice of strike shall as far
as preventive mediation case upon agreement of as practicable, state the acts complained of
the parties. and the efforts to resolve the dispute amicably.
(Tiu v. NLRC, G.R. No. 123276, Aug. 18,
Q: What are the contents of the notice of 1997)
strike or lockout?
Q: NFSW, the bargaining agent of Central
A: Azucarera de la Carlota (CAC) rank and file
1. Name and addresses of Er employees, filed a notice of strike based on
2. Union involved non-payment of the 13th month pay and 6
3. Nature of the industry to which the Er days thereafter they held the strike. A day
belongs after the commencement of the strike, a
4. Number of union members report of the strike-vote was filed by NFSW
5. Workers in the bargaining unit with MOLE. CAe filed a petition to declare
6. Other relevant date the strike illegal due to non-compliance
7. In case of bargaining deadlocks: with the 15-day cooling of period and the
unresolved issues, written proposals strike was held before the lapse of 7 days
of the union, counter-proposals of the from the submission to the MOLE of the
Er and proof of request for result of the strike vote. Was the strike held
conference to settle differences by NFSW legal?
8. In case of ULP: The acts complained
of, and the efforts taken to resolve the A: No. The cooling-off period in Art. 264(c)
dispute and the 7-day strike ban after the strike-vote
report prescribed in Art. 264 (f) were meant to
Note: NCMB shall inform the concerned party in be mandatory. The law provides that "the labor
case notice does not conform with the req'ts. union may strike" should the dispute "remain
unsettled until the lapse of the requisite
Q: What action will the board take on the
number of days from the filing of the notice",
notice of strike of strike or lockout?
this clearly implies that the union may not
strike before the lapse of the cooling-off
A: period. The cooling-off period is for the
1. Upon receipt of notice, the regional
Ministry of Labor and Employment to exert all
branch of the Board shall exert all
efforts at mediation and conciliation to effect a
efforts at mediation and conciliation to
voluntary settlement.
enable the parties to settle the
dispute amicably. It shall also
The mandatory character of the 7-day strike
encourage the parties to submit the
ban is manifest in the provision that "in every
dispute to voluntary arbitration.
case" the union shall furnish the MOLE with
2. The regional branch of the NCMB
the results of the voting "at least 7 days before
may, upon agreement of the parties,
the intended strike." This period is to give time
treat a notice as a preventive

~.
to verify that a strike vote was actually held.
mediation case.
(NFSW v. Ovejera, G.R. No. L-59743, May 31,
3. During the proceedings, the parties
1982)
shall not do any act which may

UNIVERSITY OF SANTO TOMAS

Pacu[tad de cDereclio Civil .'." 139
 LABOR RELATIONS: STRIKES, LOCKOUTS AND CONCERTED ACTIONS

Q: Fil Transit Ees Union filed a notice of Q: What are the exceptions to the "no
strike with the BLR because of alleged ULP backwagesrule" of strikers?
of the company. Because of failure to reach
an agreement the union went on strike. A:
Several employees (Ees) were dismissed 1. When the Ees were illegally locked
because of the strike. The union filed thus compelling them to stage a strike
another notice of strike alleging ULP, 2. When the Er is guilty of the grossest
massive dismissal of officers and form of ULP
members, coercion of Ees and violation of 3. When the Er committed
workers rights to self-organization. The discrimination in the rehiring of
Ministry of Labor and Employment, after strikers refusing to readmit those
assuming jurisdiction over the dispute, against whom there were pending
ordered all striking Ees including those criminal cases while admitting
who were dismissed to return to work. The nonstrikers who were also criminally
company however countered that no strike charged in court;
vote had been obtained before the strike 4. When the workers who staged a
was called and the result of the strike vote voluntary ULP strike offered to return
was not reported to Ministry of Labor and to work unconditionally but the Er
Employment. Was the strike held by the refused to reinstate them. (Manila
union illegal for failure to hold a strike Diamond Hotel VS. Manila Diamond
vote? Hotel Ees' Union, G. R. No. 158075,
June 30, 2006, J. Carpio-Morales)
A: Yes, there is no evidence to show that a
strike vote had in fact been taken before a
strike was called. Even if there was a strike . A~T. 254. INJUNCTION
vote held, the strike called by the union was
illegal because of non-observance by the Q: What is an injunction?
union of the mandatory 7-day strike ban
counted from the date the strike vote should A: It is an order or a writ that commands a
have been reported to the DOLE. (First Cfty person to do or not to do a particular act. It
Interlink Transportation Co., Inc. v. Confessor, may be a positive (mandatory) or a negative
GR. No. 106316, May 5, 1997) (prohibitory) command.

Q: The company conceived and decided to Q: May the court or quasi-judicial entity
retrench its Ees and selected about 40 Ees issue any injunction during
to be dismissed because of the lack of strikes/lockouts?
work. Because of this about 200 Ees
during break-time boarded buses and went A:
to the Ministry of Labor but they were GR: No court or entity shall eruom any
advised to return to work. picketing, strike or lockout, or any labor
dispute.
Upon returning to the company's premises,
the Ees were only allowed to stay in the XPN:
canteen and were not given work because 1. When prohibited or unlawful acts are
according to the company the machines being or about to be committed that
were undergoing repairs. Are the Ees will cause grave or irreparable
entitled to reinstatement and backwages? damage to the complaining party.
(Art. 218[e])
A: The Ees are entitled to reinstatement but 2. On the ground of national interest
not to backwages. Both parties being in pari 3. The SLE or the NLRC may seek the
delicto, having conducted an illegal strike and assistance of law enforcement
lockout respectively, there must be a agencies to ensure compliance with
restoration of the status quo ante and must this provision as well as with such
bring the parties back to their respective orders as he may issue to enforce the
positions prior to the illegal strike and lockout same (Art. 263[g])
which shall be done by reinstating the
remaining Ees. However, it is the general rule
that strikers are not entitled to backwages. The
principle of "no work, no pay" is applicable in
view of the finding of the illegality of the strike.
(Philippine Inter-Fashion, Inc v. NLRC, G.R.
No. L-59847, Oct. 18, 1982)

140
 UST GOLDEN NOTES 2010

Q: What must an "innocent by-stander" A: No, the concerted action taken by the
satisfy before a court may enjoin a labor members of the union in picketing the
strike? premises of the dep't store, no matter how
illegal, cannot be regarded as acts not arising
A: The innocent by stander must show: from a labor dispute over which the RTCs may
1. Compliance with the grounds exercise jurisdiction. (Samahang Manggagawa
specified in Rule 58 of the Rules of ng Liberty Commercial v. Pimentel, G.R. No.
Court,and L-78621, Dec. 2, 1987)
2. That it is entirely different from,
without any connection whatsoever
to, either party to the dispute and, ART. 263(g)~ASSUMPTIOtf:OF
therefore, its interests ,?re totally J'URISDICTION; RETU~N-TO-WORK
foreign to the context the·reof. (MSF ORDER
Tire & Rubber v. CA, G.R. 128632,
Aug. 5, 1999) Q: Discuss the assumption of jurisdiction
by the Secretary of Labor and Employment
Q: May the RTC take cognizance of the (SLE) on strikes/lockouts.
complaint where the same is but an
incident of a labor dispute? A:
1. Discretionary
A: No, where the subject matter of the 3'd a. If in his opinion there exists a
party claim is but an incident of the labor case, labor dispute causing or likely to
it is a matter beyond the jurisdiction of the cause a strike or lockout in an
RTC, such courts have no jurisdiction to act on industry indispensable to the
labor cases or various incidents arising national interest.
therefrom, including the execution of b. He may certify the same to the
decisions, awards or orders. NLRC for compulsory arbitration
c. Effect - Automatically enjoins the
A party, by filing its 3rd party claim with the intended or impending
deputy sheriff, it submitted itself to the strike/lockout but if one has
jurisdiction of the NLRC acting through the LA. already taken place, all striking or
locked out Ees shall immediately
The broad powers granted to the LA and to the return to work and the Er shall
NLRC by Art. 217, 218 and 224 of the LC can immediately resume operations
only be interpreted as vesting in them and re-admit all workers under the
jurisdiction over incidents arising from, in same terms and conditions
connection with or relating to labor disputes, prevailing before the strike or
as the controversy under consideration, to the lockout (Trans-Asia Shipping
exclusion of the regular courts. The RTC, Lines, Inc.-Unlicensed Crews Ee's
being a co-equal body of the NLRC, has no Union v. CA, G.R. No. 145428,
jurisdiction to issue any restraining order or July 7, 2004)
injunction to enjoin the execution of any
decision of the latter. (Delta ventures v. Note: A motion for reconsideration does
Cabato, G.R. No. 118216, Mar. 9, 2000) not suspend the effects as the
assumption order is immediately
Q: The employer filed with the RTC a executory.
complaint for damages with preliminary
mandatory injunction against the union, the 2. Mandatory (within 24 hours)
main purpose of which is to dispense the a. In labor disputes adversely
picketing of the members of the union. The affecting the continued operation
union filed a motion to dismiss on the of hospitals, clinics or medical
ground of lack of jurisdiction. The RTC institutions.
denied the motion to dismiss and enjoined b. May assume jurisdiction or certify
the picketing, it said that mere allegations it to the NLRC for compulsory
of Er-Ee relationship does not arbitration
automatically deprive the court of its c. Duty of striking union or locking
jurisdiction and even the subsequent filing out Er to provide and maintain an
of charges of ULP, as an afterthought, does effective skeletal workforce of
not deprive it of its jurisdiction. Was the medical and other health
issuance by the RTC of the injunction personnel, where movement and
proper? service shall be unhampered and

~i!
unrestricted as are ~ecessary to

UNIVERSITY OF SANTO TOMAS 141

Pacu{taa de <Derecfw CiviC '"
 LABOR RELATIONS: STRIKES, LOCKOUTS AND CONCERTED
insure the proper and adequate
protection of the life and health of
its patients most especially
emergency cases for the duration
of the strike or lockout (Arl. 263
[gJ)
Q: What does the phrase "under the same
tenns and conditions" contemplate?
A:
GR: It contemplates only actual
reinstatement. This is in keeping with the
rationale that any work stoppage or
slowdown in that particular industry can be
inimical to the national economy.
XPN: Payroll reinstatement in lieu of actual
reinstatement but there must be showing of
special circumstances rendering actual
reinstatement impracticable, or otherwise
not conducive to attaining the purpose of
the law in providing for assumption of
jurisdiction by the SLE in a labor dispute
that affects the national interest. (Manila
Diamond Hotel Ees Union v. SLE, G.R. No.
140518, Dec. 16,2004)
Q: What are issues that the SLE may
resolve when he assumes jurisdiction over
a labor dispute?
A:
1. Issues submitted to the SLE for
resolution and such issues involved in
the labor dispute itself. (St.
Scho/astica's College v. Torres, G.R.
No. 100158, June 2, 1992)
2. SLE may subsume pending labor
cases before LAs which are involved
in the dispute and decide even issues
falling under the exclusive and
original jurisdiction of LAs such as the
declaration of legality or illegality of
strike (Int'I. Pharmaceuticals v. SLE,
G.R. Nos. 92981-83, Jan. 9, 1992)
Note: Power of SLE is plenary and discretionary.
(St. Luke's Medical Center v. Torres, G.R. No.
99395, June 29, 1993)
Q: What is the effect of defiance to the
return to work order?
A: It shall be considered an illegal act
committed in the course of the strike or lockout
and shall authorize the SLE or the NLRC, as
the case may be, to enforce the same under
pain or loss of employment status or
entitlement to full employment benefits from
the locking-out Er or backwages, damages
and/or other positive and/or affirmative reliefs,
142
ACTIONS
even to criminal prosecution against the liable
parties. (Sec. 6, Rule IX, of the New Rules of
Procedure of the NLRC; St. Scholastica's
Col/ege v. Torres, G.R. No. 100158, June 2,
1992)
Q: Is it necessary for the SLE to issue a
return-to-work order in an assumption
order?
A: No, the mere issuance of an assumption
order automatically carries with it a return-to-
work order although not expressly' stated
therein. (TSEU-FFW v. CA, G.R. Nos. 143013-
14, Dec. 18, 2000)
Q: What is the extent of the powers of the
President during strikes/lockouts?
A:
1. May determine the industries, which
are in his opinion indispensable to
national interest
2. May intervene at any time and
assume jurisdiction over any such
labor dispute in order to settle or
terminate the same. (Arl. 263[gJ)
Note: The decision of the PresidenUSLE is final
and executory after receipt thereof by the parties.
Q: Maya return to work order be validly
issued pending determination of the
legality of the strike?
A: Yes. Where the return to work order is
issued pending the determination of the
legality of the strike, it is not correct to say that
it may be enforced only if the strike is legal and
may be disregarded if illegal. Precisely, the
purpose of the retum to work order is to
maintain the status quo while the
determination is being made. (Sarmiento v.
Tuico, G.R. Nos. 75271-73, June 27, 1988)
Q: What is the nature of the power of SLE
under Art. 263(g)?
A: The assumption of jurisdiction is in the
nature of a police power measure. This is done
for the promotion of the common good
considering that a prolonged strike or lockout
can be inimical to the national economy. The
SLE acts to maintain industrial peace. Thus,
his certification for compulsory arbitration is
not intended to impede the worker's right to
strike but to obtain a speedy settlement of the
dispute. (Philtread Workers Union v. Confesor,
G.R. No. 117169, Mar. 12, 1997)
Art. 263(g) does not interfere with the workers
right to strike but merely regulates it, when in
 UST GOLDEN NOTES 2010

the exercise of such right national interest will service pursuant to its redundancy
be affected. The LC vests upon the SLE the program. Pursuant to Art. 263(g) of the LC
discretion to determine what industries are the SLE certified the labor dispute for
indispensable to national interest. compulsory arbitration. Accordingly the
SLE enjoined the strike staged by the union
Q: A notice of strike was filed by the PSBA and all striking workers were directed to
Ees Union-FFW, alleging union busting, return to work within 24 hours except for
coercion of Ees and harassment on the those who were terminated due to
part of PSBA. The conciliation being redundancy.
ineffective, the strike pushed through. A
complaint for ULP and for a declaration of Was the SLE correct in excepting from the
illegality of the strike with a ~praye! for return-to-work order those who were
preliminary injunction was filed by PSBA terminated due to redundancy?
against the union.
A: No, Art. 263(g) is clear and unequivocal in
While the cases were pending, a complaint stating that all striking or lock-out Ees shall
was filed in the RTC of Manila by some immediately return to work and the Er shall
PSBA students against PSBA and the immediately resume operations and readmit all
union, seeking to enjoin the union and its workers under the same terms and conditions
members from picketing and from prevailing before the strike or lockout.
barricading themselves in front of the Records of the case would show that the strike
schools main gate. A TRO was then issued occurred one day before the members of the
by the RTC, which the union opposed on union were dismissed due to alleged
the ground that the case involves a labor redundancy. Thus the abovementioned article
dispute over which the RTC had no directs that the Er must readmit all workers
jurisdiction. The Acting SLE later on under the same terms and conditions
assumed jurisdiction over the labor dispute prevailing before the strike. (PLOT v.
and ordered the striking Ee's to return to Manggagawa ng Komunikasyon sa Pilipinas,
work. Was the SLE correct in ordering the G.R. No. 162783, July 14, 2005)
striking Ees to return to work?

A: Yes. In the opinion of the Acting SLE, the CONSEQUENCES OF STRIKE

labor dispute adversely affected the national
interest, affecting as it did 9,000 students. He Q: When is a strike illegal?
is authorized by law to assume jurisdiction
over the labor dispute, after finding that it A:
adversely affected the national interest. This 1. Contrary to specific prohibition of law,
power is expressly granted by Art. 263 (g) of such as strike by employees (Ees)
the LC, as amended by B.P. Big. 227. performing governmental functions;
2. Violates a specific req't of law;
Q: Does the RTC have jurisdiction to 3. Declared for an unlawful purpose,
decide on the case filed by the PSBA such as inducing the employer (Er) to
students? commit ULP against non-union Ees;
4. Employs unlawful means in the
A: No, the RTC was without jurisdiction over pursuit of its objective, such as
the subject matter of the case filed by some widespread terrorism of non-strikers;
PSBA students, involving as it does a labor 5. Declared in violation of an existing
dispute over which the labor agencies had injunction;
exclusive jurisdiction. That the regular courts 6. Contrary to an existing agreement,
have no jurisdiction over labor disputes and to such as a no strike clause or
issue injunctions against strikes is well-settled. conclusive arbitration clause
(PSBA v. Nonet, G.R. No. 80648, Aug. 15,
1988) Q: When is an expression of an opinion by
the Er held to be culpable (totality of
Q: Members of the union learned that a conduct doctrine)?
redundancy program would be
implemented by the company. Thereupon A: The expressions of an opinion by an Er
it filed a Notice of strike on the grounds of which, though innocent in themselves, may be
ULP. A number of conciliation meetings held by the Court to be culpable based on the
were conducted but to no avail so the ff:
union staged a strike while the company 1. The circumstances under which they
terminated 383 union members from were uttered

UNIVERSITY OF SANTO TOM.AS ~~ 143

Pacu{taa de ([)erecno CHli( '.
 LABOR RELATIONS: STRIKES, LOCKOUTS AND CONCERTED ACTIONS

2. The history of the particular Ers labor Q: What is the rule on reinstatement of
relations of anti-union bias striking workers?
3. Their connection with an established
collateral plan of coercion or A: Striking employees are entitled to
interference reinstatement, regardless of whether or not the
strike was the consequence of the employers
Q: What is the doctrine of means and ULP because while out on strike, the strikers
purposes? are not considered to have abandoned their
employment, but rather have only ceased from
A: It states that a strike is legal when lawful their labor; the declaration of a strike is not a
means concur with lawful purpose. (GOP-CCP renunciation of employment relation.
Workers v. CIR, GR. No. L-33015, Sep. 10,
1979) Q: Who are not entitled to reinstatement?

Q: What is "good faith (GF) strike" A:

doctrine? 1. Union officers who knowingly
participate in the illegal strike
A: A strike may be considered legal where the 2. Any striker or union who knowingly
union believed that the company committed .participates in the commission of
ULP and the circumstances warranted such illegal acts during the strike
belief in GF, although subsequently such
allegations of ULP are found out as not true. Note: Those union members who have joined an
(Bacus V. Ople, GR No. L-56856, Oct. 23, illegal strike but have not committed any illegal
1984, People's Industrial and Commercial Ees act shall be reinstated but without back wages,
and Organization (FFW) V. People's Industrial
and Commercial Corp., G.R. No. 37687, Mar. The responsibility for the illegal acts committed
15, 1982) during the strike must be on an individual and not
on a collective basis. (First City Interlink
Transportation Co., Inc, v. Confesor, G.R. No,
Q: What is the effect of the GF of strikers
106316, May 5, 1997)
on the legality of strike?
Q: Are strikers entitled to their backwages
A: or strike duration pay?
GR: A strike grounded on ULP is illegal if
no such acts actually exist.
A:
GR: No, even if such strike was legal.
XPN: Even if no ULP acts are committed
XPN:
by the Er, if the Ees believe in GF that ULP
1. Where the strikers voluntarily and
acts exist so as to constitute a valid ground
unconditionally offered to return to
to strike, then the strike held pursuant to
work, but the employer refused to
such belief may be legal. Where the union
accept the offer - workers are entitled
believed that the Er committed ULP and
to back wages from the date their
the circumstances warranted such belief in
offer was made
GF, the resulting strike may be considered
2, When there is a return-to-work order
legal although, subsequently, such
and the Ees are discriminated against
allegations of ULP were found to be
other Ees, workers are entitled to
groundless. (NUWHRAIN-Interim Junta V.
back wages from the date of
NLRC, G.R. No. 125561, Mar. 6, 1998)
discrimination
3, In case of a ULP strike, in the
Q: Should separation pay and backwages
discretion of the authority deciding
be awarded to the participants of an illegal
the case
strike?
Q: What is the rule in strikes in hospitals?
A: No backwages will be awarded to union
members as a penalty for their participation in
the illegal strike. As for the union officers, for
A:
1. It shall be the duty of the striking
knowingly participating in an illegal strike, the
employees or locking-out employer to
law mandates that a union officer may be
provide and maintain an effective
terminated from employment and they are not
skeletal workforce of medical and
entitled to any relief. (Gold City Integrated Port
health personnel for the duration of
Services, Inc. V. NLRC, G.R. No. 86000, Sep.
the strike or lockout.
21, 1990)

144
 UST GOLDEN NOTES 2010

2. SLE may immediately assume ART. 264.PROHIBITEDACTIVITIES .

jurisdiction within 24 hours from
knowledge of the occurrence of such Q: What are the prohibited activities during
strike or lockout certify it to the NLRC a strike/lockout?
for compulsory arbitration.
A:
Q: More or less 1400 Ees of the company 1. No labor organization or employer
staged a mass walk-out, allegedly without (Er) shall dec/are a strike or lockout
anybody leading them as it was a without:
simultaneous, immediate and unanimous a. First having bargained
group action and decision, to protest the collectively in accordance with
non-payment of their salaries sand wages. Title VII of the LC or .
The Minister of Labor and Employmentwho b. First having filed the notice
found the strike to be illegal granted the required in Art 263 or
clearance to terminate the employment of c. The necessary strike or lockout
those who were instigators in the Illegal vote first having been obtained
strike. Was the decision of the Minister of and reported to DOLE
Employment in granting the clearance
correct? 2. No strike or lockout shall be declared:
a. After assumption of jurisdiction
A: No, a mere finding of the illegality of a by the President or the DOLE
strike should not be automatically followed by Secretary or
wholesale dismissal of the strikers from their b. After certification or submlssion
employment. While it is true that administrative of the dispute to compulsory or
agencies exerclsinq quasi-judicial functions voluntary arbitration or
are free from the rigidities of procedure, it is c. During the pendency of cases
equally well-settled that avoidance of involving the same grounds for
technicalities of law or procedure in strike/lockout.
ascertaining objectively the facts in each case
should not, however, cause denial of due 3. No (third) person shall obstruct,
process. (Bacus v. Ople, G.R. No. L-56856, impede or interfere with by force,
Oct. 23, 1984) violence, coercion, threats or
intimidation any peaceful picketing by
Q: 2 days after the union struck, the SLE employees (Ees) during any labor
ordered the striking workers to return to controversy or in the exercise of the
work within 24 hours. But the striking right of self-organization or CB or
union failed to return to work and instead shall aid or abet such obstruction or
they continued their pickets. As a result, interference.
violence erupted in the picket lines. The
service bus ferrying non-striking workers 4. No Er shall use or employ any strike
was stoned causing injuries to its breaker nor shall any person be
passengers. Threats, defamation, illegal employed as a strike breaker'
detention, and physical rnjunes also
occurred. The company was directed to 5. GR: No public official or Ee, including
accept back all striking workers, except the officers and personnel of the AFP,
union officers, shop stewards, and those PNP or armed persons shall bring in,
with pending criminal charges. Was the introduce, or escort in any manner,
SLE correct in not including the union any individual who seeks to replace
officers, shop stewards and those with strikers in entering or leaving the
pending criminal charges in the return-to- premises of a strike area or work in
work order? place of the strikers. The police force
shall keep out of the picket lines
A: No, to exclude union officers, shop unless actual violence or other
stewards and those with pending criminal criminal acts occur therein.
charges in the directive to the company to
accept back the striking workers without first XPN: Nothing herein shall be
determining whether they knowingly committed interpreted to prevent any public
illegal acts would be tantamount to dismissal officers from taking any measure
without due process of law. (Telefunken necessary to:
Semiconductors Ees Union-FFW v. SLE, G.R. a. Maintain peace and order
No. 122743 & 127215, Dec. 12, 1997) b. Protect life and property
c. Enforce the law and legal order

UNIVERSITY OF SANTO TOMAS .~ 145

Pacu[taa ae Verecno CiviC "
 LABOR RELATIONS: STRIKES, LOCKOUTS AND CONCERTED ACTIONS

6. No person engaged in picketing shall: Q: Distinguish improved offer balloting

a. Commit any act of violence, from reduced offer balloting.
coercion or intimidation, or
b. Obstruct the free ingress to or
egress from the Er's premises for
lawful purpose or obstruct public
thoroughfares
To determine WON To determine WON
Q: The hotel union which was not certified the improved offer of reduced of the union is
by the DOLE as the exclusive bargaining the Er is acceptable acceptable to the Er.
agent staged a strike against the Hotel. to the union
NLRC declared the strike illegal. CA members. To ascertain whether
affirmed but ordered the reinstatement of at least a majority of
To ascertain the real the Board of Directors
union members and officers. Are Union
sentiment of the" or trustees or partners
members and officers who participated in
silent majority of the holding the controlling
the illegal strike entitled to reinstatement?
union members on interest vote to accept
strike. the reduced offer
A: It depends. The union officers should be
dismissed for staging and participating in the
illegal strike, ff. par. 3, Art. 264(a) of the LC
which provides that "any union officer who
On or before the so" On or before the so"
day of strike day of lockout
knowingly participates in an illegal strike and
any worker or union officer who knowingly
participates in the commission of illegal acts
Applies only to Applies only to
during strike may be declared to have lost his
economic strikes economic strikes -
employment status" An ordinary striking deadlock in bargaining
worker cannot, thus be dismissed for mere
participation in an illegal strike. There must be
proof that he committed illegal acts during a Majority of
Majority of union
strike, unlike a union officer who may be members vote to Directors, trustees or
dismissed by mere knowingly participating in accept improved partners vote to accept
an illegal strike and/or committing an illegal act offer: striking workers the reduced offer:
shall immediately workers shall
during a strike. (Manila Diamond Hotel vs.
return to work and Er immediately return to
Manila Diamond Hotel Ees Union, GR. No.
shall readmit them work and Er shall
158075, June 30, 2006, J. Carpio-Morales)
readmit them upon
upon signing of the
agreement signing of the
ent
ART.265. IMPROVED OFFER BALLOTING

Q: What is improved offer balloting? , ART. 266. REQUIREMENTS FOR ARREST ,

: AND DETENTION'
A: A referendum conducted by DOLE on or
before the so" day of the strike, for the Q: Can police officers immediately arrest
purpose of determining whether or not the and detain union members for union
improved offer of the employer is acceptable to activities?
the union members.
A:
Q: What is reduced offer balloting? GR: A police officer CANNOT arrest or
detain a union member for union activities
A: A referendum conducted by DOLE for the without previous consultations with the
purpose of determining whether or not the SLE.
reduced offer of the union is acceptable to the
board of directors, trustees or partners. XPN: Incidences pertaining to:
1, National security
2. Public peace
3. Commission of crimes

14,6
 UST GOLDEN NOTES 2010

Q: In what cases can arrest be lawfully

made?

A:
1. Any person who obstructs the free
and lawful ingress and egress from
the Ers premises or who obstructs
public thoroughfares.

2. Any person who shall have in his

possession deadly weapons in
violation of B.P. Big. 6 and firearms
and explosives. (Guidelines for the
conduct of PNPIAFP Personnel in
Labor Disputes)

Academics Committee
Chairperson: Abraham D. Genuino II
Vice-Chair for Academics: Jeannie .\. Laurentino
Vice-Chair for Admin & Finance: ,\issa Celine H. Luna
Vice-Chair for Layout & Design: Loise Rae G. Naval

Labor Law Committee

S ubject Head' Lester Jay Alan E. Flores II
Assistant Subject Head' Domingo B. Diviva V

Members:
Rene Francis P. Batalla
Diane Camilla R. Borja
Maria Kristina L. Dacayo-Garcia
Christian Nino A. Diaz
Angelo S. Diokno
Genesis R. Fulgencio
Jeanelle C. Lee
] emuel Paolo M. Lobo
Andrew W. Montesa
Maria Maica .\ngelika Roman

UNIVERSITY OF SANTO TOMAS

Pacu{taa ae i])erecfio CiviC
 LABOR RELATIONS: POST-EMPLOYMENT

The practice of entering into employment

contracts which would prevent the workers from
becoming regular should be struck down as
POST EMPLOYMENT contrary to public policy and morals. (Universal
Robina Corp. v. Catapang, G.R. No. 164736, Oct.
V\' ,ART. 278. COVERAGE, , '"',),:'-. 14,2005)

Q: Discuss the coverage of the Labor Code Q: What is the test to determine regular
as regards post-employment, employment?

A: It applies to all establishments and A:

undertakings, whether operated for profit or 1. The primary standard of determining
not, including educational, medical, charitable regular employment is the reasonable
and religious institutions and organizations in connection between the particular
cases of regular employment activity performed by the employee
(Ee) to the usual trade or business of
Q: What employment is excluded from the the employer. The test is whether the
coverage of the Labor Code (LC)? former is usually necessary or
desirable in the usual business or
A: The coverage of the LC excludes trade of the Er. (De Leon v. NLRC,
employment in the gov't and its political G,R. No. 7070~Aug. 21, 198~
subdivisions including GOCCs.
Note: The connection can be
determined by considering the nature of
CLASSES OF EMPLOYEES the work performed and its relation to
the scheme of the particular business or
trade in its entirety. (Highway Copra
. ART. 280. REGULAR AND CASUAL
Traders v, NLRC, G.R. No. 108889,
EMPLOYMENT July 30, 1998)

Q: What is regular employment? 2. Also, the performance of a job for at

A:
1. An employment shall be deemed to
be regular where the Ee has been
engaged to perform activities which
are usually necessary or desirable in
the usual business or trade of the Er,
the provisions of written agreements
to the contrary notwithstanding and
regardless of the oral agreements of
the parties. (Sec. 5 raj, Rule I, Book
VI,IRR)
2. Any Ee who has rendered at least
one year of service, whether such
service is continuous or broken, shall
be considered a regular Ee with
respect to the activity in which he is
employed and his employment shall
continue while such activity exists.
(Sec. 5 [bJ, Rule I, Book VI, IRR)
Notes: Regularization is not a management
prerogative; rather, it is the nature of employment
that determines it. It is a mandate of the law.
(PAL v. Pascua, G.R. No. 143258, Aug. 15,
2003)
Regular employment does not mean permanent
employment. A probationary Ee becomes a
regular Ee after 6 months. A regular Ee may only
be terminated for jusUauthorized causes.
least a year is sufficient evidence of
the job's necessity if not
indispensability to the business. This
is the rule even if its performance is
not continuous 'and merely
intermittent The employment is
considered regular, but only with
respect to such activity and while
such activity exists. (Universal Robina
Corp. v. Catapang, GR No. 164736,
Oct. 14, 2005).
Note: The status of regular employment attaches
to the casual Ee on the day immediately after the
end of his first year of service. The law does not
provide the qualification that the Ee must first be
issued a regular appointment or must first be
formally declared as such before he can acquire
a regular status. (Aurora Land Projects Corp, v.
NLRC, G.R No. 114733, Jan. 2, 1997)
Q: Is the mode of compensation
determinative of regular employment?
A: No, while the Ees mode of compensation
was on a "per piece basis" the status and
nature of their employment was that of regular
Ees. (Labor Congress of the Phils v. NLRC,
GR No. 123938, May 21, 1998)

148
 UST GOLDEN NOTES 2010
Q: When does Art. 280 not apply?
A: It does not apply in case of OFWs.
Note: Seafarerscannot be consideredas regular
Ees. Their employment is governed by the
contractsthey sign everytimethey are hired and
their employment terminated when the contract
expires. Their employment is fixed for a certain
periodof time. (Ravago v. Esso Eastern Maritime
Ltd., GR. No. 158324, Mar. 14, 2005)
Q: Moises was employed by La ron delia at
the maintenance section of its Eng'g Dep't
paid on a daily basis through petty cash
vouchers. His work consisted mainly of
painting company building and equipment
and other odd jobs relating to maintenance.
After a service of more than 1 year, Moises
requested that he be included in the payroll
of regular workers, instead of being paid
through petty cash vouchers. Instead La
Tondefia's dismissed Moises and claimed
that Moises was contracted on a casual
basis specifically to paint certain company
buildings and that its completion
tenninated Moises' employment. Can
Moises be considered as a regular Ee?
A: Yes, the law demands that the nature and
entirety of the activities performed by the Ee
be considered. Here, the painting and
maintenance work given Moises manifests a
treatment consistent with a maintenance man
and not just a painter, for if his job was only to
paint a building there would be no basis for
giving him other work assignments in-between
painting activities.
It is not tenable to argue that the painting and
maintenance work of Moises are not
necessary in La Tonderia's business of
manufacturing liquors; otherwise, there would
be no need for the regular maintenance
section of the company's eng'g dep't. (De
Leon v. NLRC, G.R. No. 70705, Aug. 21,
1989)
Q: Honorio Dagui was hired by Dona
Aurora Suntay Tanjangco in 1953 to take
charge of the maintenance and repair of the
Tanjangco apartments and residential
bldgs. He was to perform carpentry,
plumbing, electrical and masonry work.
Upon the death of Dona Aurora Tanjangco
in '82 her daughter, Teresita Tanjangco
Quazon, took over the administration of all
the Tanjangco properties, and dismissed
Dagui. Is Honorio Dagui a regular employee
(Ee)?
A: Yes. The jobs assigned to Dagui as
maintenance man, carpenter, plumber,
UN i V E R SIT Y 0 F SAN ToT
electrician and mason were directly related to
the business of the Tanjangco's as lessors of
residential and apartment bldgs. Moreover,
such a continuing need for his services by the
Tanjangcos is sufficient evidence of the
necessity and indispensability of his services
to their business or trade.
Dagui should likewise be considered a regular
Ee by the mere fact that he rendered service
for the Tanjangcos for more than one year,
that is, beginning '53 until '82, under Dona
Aurora; and then from 1982 up to June 8, '91
under the daughter, for a total of 29 and 9
years respectively. Owing to Dagui's length of
service, he became a regular Ee, by operation
of law, one year after he was employed in '53
and subsequently in '82. (Aurora Land
Projects Corp. v. NLRC, G.R. No. 114733,
Jan. 2, 1997)
Q: A total of 43 Ees who are deaf-mutes
were hired and re-hired on various periods
by Far East Bank and Trust Co. as money
sorters and counters through a uniformly
worded agreement called "Employment
Contract for Handicapped Workers." The
company disclaimed that these Ees were
regular Ees and maintained among others
that they are a special class of workers,
who were hired temporarily under a special
employment arrangement which was a
result of overtures made by some civiC and
political personalities to the Bank. Should
the deaf-mute Ees be constdered as regular
Ees?
A: Yes. The renewal of the contracts of the
handicapped workers and the hiring of others
leads to the conclusion that their tasks were
beneficial and necessary to the bank. It also
shows that they were qualified to perform the
responsibilities of their positions; their disability
did not render them unqualified or unfit for the
tasks assigned to them.
The Magna Carta for Disabled Persons
mandates that a qualified disabled Ee should
be given the same terms and conditions of
employment as a qualified able-bodied person.
The fact that the Ees were qualified disabled
persons necessarily removes the employment
contracts from the ambit of Art. 80. Since the
Magna Carta accords them the rights of
qualified able-bodied persons, they are thus
covered by Art. 280 of the Le. (Bernardo v.
NLRC, G.R. No. 122917, July 12, 1999)
Q: Coca-Cola Bottlers Phils, Inc., (CCBPI)
~.!
engaged the services of the workers as
"sales route helpers" for a period of 5
months. After 5 months, the workers were
employed by the company on fJ day-to-day
Ui..•
0 MAS 149
fFacu(tad de cJ)erecfzo CiviC
 LABOR RELATIONS: POST-EMPLOYMENT

basis. According to the company, the basis of the nature of the work of Efren has
workers were hired to substitute for regular been called upon to perform. A stipulation in
route helpers whenever the latter would be an agreement can be ignored as and when it is
unavailable or when there would be an utilized to deprive the Ee of his security of
unexpected shortage of manpower in any tenure. (Paguio v. NLRC, G.R. No. 147816,
of its work places or an unusually high May 9,2003)
volume of work. The practice was for the
workers to wait every morning outside the Q: What are the requisites before a private
gates of the sales office of the company, if school teacher can attain permanent
thus hired, the workers would then be paid status?
their wages at the end of the day. Should
the workers be considered as regular A:
employees (Ees) of CCBPI? 1. The teacher is a full-time teacher;
2. The teacher must have rendered
A: Yes, the repeated rehiring of the workers three consecutive years of service;
and the continuing need for their services and
clearly attest to the necessity or desirability of 3. Such service must have been
their services in the regular conduct of the satisfactory. (St. Mary's University v.
business or trade of the company. The fact CA, G.R. No. 157788, Mar. 8, 2005)
that the workers have agreed to be employed
on such basis and to forego the protection Q: Who are full-time academic personnel?
given to them on their security of tenure,
demonstrate nothing more than the serious A: Those who:
problem of impoverishment of so many of our 1. Possess at least the minimum
people and the resulting unevenness between academic qualifications prescribed by
labor and capital. (Magsalin & Coca-Cola v. the Department of Education under
N. O. w.M., G.R. No. 148492, May 9, 2003) this Manual for all academic
personnel;
Q: Metromedia Times Corp. entered, for the 2. Are paid monthly or hourly, based on
fifth time, into an agreement with Efren the regular teaching loads as
Paguio, appointing him to be an account provided for in the policies, rules and
executive of the firm. He was to solicit standards of the Department of
advertisements for "The Manila TImes,". Education and the school;
The written contract between the parties 3. Whose total working day of not more
provided that, "You are not an Ee of the than 8 hours a day is devoted to the
Metromedia Times Corp. nor does the school;
company have any obligations towards 4. Have no other remunerative
anyone you may employ, nor any occupation elsewhere requiring
responsibility for your operating expenses regular hours of work that will conflict
or for any liability you may incur. The only with the working hours in the school;
rights and obligations between us are and
those set forth in this agreement. This 5. Are not teaching full-time in any other
agreement cannot be amended or modified educational institution. (Sec. 45 of the
in any way except with the duly authorized 1992 Manual of Regulations for
consent in writing of both parties." Is Efren Private Schools)
Paguio a regular employee of Metromedia
Times Corporation? Note: All teaching personnel who do not meet the
foregoing qualifications are considered part-time.
A: Yes, he performed activities which were
necessary and desirable to the business of the Q: Oonelo taught at the St. Mary's
Er, and that the same went on for more than a University on a contractual basis.
year. He was an account executive in Sometime later, he was issued an
soliciting advertisements, clearly necessary appointment as Asst. Professor I, and later
and desirable, for the survival and continued Asst. Prof. III. He taught until the first
operation of the business of the corp. semester of S.Y. '99-'00 when the school
did not give him any teaching aSSignments.
The corporation cannot seek refuge under the Oonelo thus filed a complaint for illegal
terms of the agreement it has entered into with dismissal. 5t. Mary's however claim that
Efren Paguio. The law, in defining their Oonelo was never a regular Ee of the
contractual relationship, does so, not school, as he was only a part-time
necessarily or exclusively upon the terms of instructor, carrying a load of less than 18
their written or oral contract, but also on the units. It was also claimed that the twin-

150
 UST GOLDEN NOTES 2010
notice req't does not apply in the case of
part-time teachers. Is Oonelo a full-time
teacher and has he attained permanent
status?
A: No, a part-time Ee does not attain
permanent status no matter how long he has
served the school. After the end of each term
or semester, the school does not have any
obligation to give teaching load to each and
every part-time teacher. Since there is no
showing that Donelo worked on full-,¥me basts
for at least 3 years, he could not have acquired
a permanent status. (St. Mary's University v.
CA, G.R. No. 157788, Mar. 8, 2005)
[ PROJECT EMPLOYEES
Q: What is project employment?
A: Employment that has been fixed for a
specific project or undertaking the completion
for which has been determined at the time of
engagement of the employee (Ee). (Sec. 5 [aJ,
Rule I, Book VI, IRR). The period is not the
determining factor, so that even ifthe period is
more than 1 year, the Ee does not necessarily
become regular.
Notes: Where the employment of a project Ee is
extended long after the supposed project has
been finished, the Ees are removed from the
scope of project Ees and considered as regular
Ees. . Members of a work pool from which a
Repeated hiring on a project-to-project basis is
considered necessary and desirable to the
business of the Er. The Ee is regular (Maraguinot
v. NLRC, G.R. No. 120969, Jan. 22, 1998 ).
However, repeated hiring does not necessarily
mean regular employment. (Filipinas Pre-
Fabricated Building Systems (FILSYSTEMS), Inc.
v. Puente, GR. No. 153832,. March 18, 2005)
Q: What are the requisites in detennining
whether an employee (Ee) is a project Ee?
A:
1. The project Ee was assigned to carry
out a specific project or undertaking,
and
2. The duration and scope of which
were specified at the time the Ee was
engaged for that project. (Imbuido v.
NLRC, G.R. No. 114734, Mar. 31,
2000)
3. The Ee must have been dismissed
every after completion of his project
or phase
4. Report to the DOLE of Ee's dismissal
on account of completion of contract
(Policy Inst. No. 20; D.O. 19 [1997])
UNiVERSITY
Q: What is a project?
A: A "project" has reference to a particular job
or undertaking that mayor may not be within
the regular or usual business of the Er. In
either case, the project must be distinct,
separate and identifiable from the main
business of the Er, and its duration must be
determined or determinable (PAL v. NLRC,
G.R. No. 125792, Nov. 9, 1998).
Q: Can a project employee (Ee) or a
member of a work pool acquire the status
of a regular Ee?
A: Yes, when the following concur:
1. There is a continuous rehiring of
project Ee's even after cessation of a
project; and
2. The tasks performed by the alleged
"project Ee" are vital, necessary and
indispensable to the usual business
or trade of the employer (Er).
Note: The length of time during which the Ee was
continuously re-hired is not controlling, but merely
serves as a badge of regular employment. Enero
and Maraguinot have been employed for a period
of not less than 2 years and have been involved
in at least 18 projects. These facts are the basis
in coosiderlnq them as regular Ees of the
company. (Maraguinot v. NLRC, G.R. No.
120969,Jan.2Z 1998)
construction company draws its project Ees, if
considered Ees of the construction company
while in the work pool, are non-project Ees or Ees
for an indefinite period. If they are employed in a
particular project, the completion of the project or
any phase thereof will not mean severance of Er-
Ee relationship. Unless the workers in the work
pool are free to leave any time and offer their
services to other Ers. (L. T. Datu & Co., Inc. v.
NLRC, GR. No. 113162, Feb. 9, 1996)
Q: What is the "day certain" rule?
A: It states that a project employment that
ends on a certain date does not end on an
exact date but upon the completion of the
project.
Q: Are project Ees entitled to separation
pay?
A:
GR: Project Ees are not entitled to
separation pay if they are terminated as a
result of the completion project.
XPN: If the projects they are working on
have not yet been completed, when their
OF SANTO TOMAS
Pacu(taa ae Derech o CiviC
.~ 151
 LABOR RELATIONS: POST-EMPLOYMENT

services are terminated; project Ees also on more or less equal terms with no
enjoy security of tenure during the limited moral dominance whatever being
time of their employment. (De Ocampo v. exercised by the former over the
NLRC, G.R. No. 81077, June 6, 1990) latter. (Brent School, Inc. v. Zamora,
G.R. No. 48494, Feb. 5, 1990)
Q: Roger Puente was hired by Filsystems,
Inc., initially as an installer and eventually Note: A fixed-period Ee does not become a
promoted to mobile crane operator, and regular Ee because his employment is co-
was stationed at the company's premises. terminus with a specific period of time.
Puente claimed in his complaint for illegal
dismissal, that his work was continuous Ee hired on a fixed-term is regular if job is
and without interruption for 10 years, and necessary and desirable to the business of Er.
that he was dismissed from his (Philips Semiconductor v. Fadriquela, G.R. No.
141717, April 2004)
employment without any cause. Filsystems
on its part averred that Puente was a
Q: Is "term employment" a circumvention
project Ee in the company's various
of the law on security of tenure?
projects, and that after the completion of
A: No, it is not a circumvention of the law if it
each project, his employment was
follows the requisites laid down by the Brent
terminated, and such was reported to the
ruling: (Romares v, NLRC, G.R. No. 122327,
DOLE. Is Roger Puente a regular Ee?
Aug. 19, 1998)
A: No, Puente is a project Ee. The contracts
Q: Dean Jose and other employees are
of employment of Puente attest to the fact that
holding administrative positions as dean,
he was hired for specific projects. His
dep't heads and institute secretaries. In the
employment was coterminous with the
implementation of the Reorganization,
completion of the projects for which he had
Retrenchment and Restructuring program
been hired. Those contracts expressly
effective Jan. 1, 1984, Dean Jose and other
provided that his tenure of employment
employees were retired but subsequently
depended on the duration of any phase of ~he
rehired. Their appointrnent to their
project or on the completion of the construction
administrative positions as dean, dep't
projects. Furthermore, the company regularly
heads and institute secretaries had been
submitted to the labor dep't reports of the
extended by the company from time to time
termination of services of project workers.
until the expiration of their last
Such compliance with the reportorial req't
appointment on May 31, 1988. Were Dean
confirms that Puente was a project Ee.
Jose and other employees illegally
dismissed?
The mere rehiring of Puente on a project-to-
project basis did not confer upon him regular
A: No. Petitioners were dismissed by reason
employment status. "The practice was
of the expiration of their contracts of
dictated by the practical consideration that
employment. Petitioners' appointments .as
experienced construction workers are more
dean, dep't heads and institute secretaries
preferred." It did not change ~is status .a~ a
were for fixed terms of definite periods as
project Ee. (Filipinas Pre-Fabrtcated Bulldmg
shown by their respective contracts of
Systems (FILSYSTEMS), Inc. v. Puente, G.R.
employment, which all expired on the same
No. 153832, Mar. 18, 2005)
date, May 31, 1988. The validity of
employment for a fixed period has been
acknowledged and affirmed by the. SC.
, TERM EMPLOYEES
(Blancaflor v. NLRC, G.R. No. 101013, Feb. 2,
1993)
Q: What is a fixed-term employment?
Q: How is the project worker different from
A: It is an employment where a fixed period of
a casual or contractual worker? Briefly
employment was agreed upon: explain your answers.
1. Knowingly and voluntarily by the
parties,
A: A "contractual worker" is a generic term
2. Without any force, duress or improper used to designate any worker covered by a
pressure being brought to bear upon written contract to perform a specific
the employee (Ee) and
undertaking for a fixed period. On the other
3. Absent any other circumstances
hand, a "project worker" is used to designate
vitiating his consent, or
workers in the construction industry, hired to
4. Where it satisfactorily appears that
perform a specific undertaking for a fixed
the Er and Ee dealt with each other
period, co-terminus with a project or phase

152
 UST GOLDEN NOTES 2010
thereof determined at the time of the Q: Can seasonal employees (Ees) be
engagement of the Ee. (Policy Instruction No. considered as regular Ees?
19, DOLE) In addition, to be considered a
true project worker, it is required that a A: Yes. The fact that seasonal Ees do not
termination report be submitted to the nearest work continuously for one whoie year but only
public employment office upon the for the duration of the season does not detract
completion of the construction project. from considering them in regular employment.
(Aurora Land Projects Corp. v. NLRC, G.R. Seasonal workers who are cailed to work from
No. 114733, Jan. 2, 1997) In contrast, there is time to time and are temporarily laid off during
no such requirement for an ordinary off-season are not separated from service in
contractual worker. (2005 Bar Question) that period, but merely considered on leave
until re-employed.
If the Ee has been performing the job for at
least a year, even if the performance is not
continuous and merely intermittent, the law
Q: What is seasonal employment? deems repeated and continuing need for its
performance as sufficient evidence of the
A: Employment where the job, work or service necessity if not indispensability of that activity
to be performed is seasonal in nature and the to the business. Hence, the employment is
employment is for the duration of the season. considered regular, but only with respect to
(Sec.5 (aJ, Rule I, Book VI, IRR) such activity and while such activity exists.
(Ben ares v. Pancho, G.R. No. 151827, April
An employment arrangement where an 29,2005)
employee (Ee) is engaged to work during a
particular season on an activity that is usually Q: Carli to Codilan and Maximo Docena had
necessary or desirable in the usual business been working for the rice mill for 25 years,
or trade of the employer (Er). while Eugenio Go, Teotilo Trangria and
Reynaldo Tutin have been working for 22,
Note: For seasonal Ees, their employment legally 15, and 6 years respectively. The
ends upon completion of the project or the operations of the rice mill continue to
season. The termination of their employment operate and do business throughout the
cannot and should not constitute an illegal year even if there are only two or three
dismissal. (Mercado v. NLRC, G.R. No. 79869, harvest seasons within the year. This
Sept. 5, 1991)
seasonal harvesting is the reason why the
company considers the workers as
One year duration on the job is pertinent in
seasonal Ees. Is the company correct in
deciding whether a casual Ee has become
conslderlnq the Ees as seasonal Ees?
regular or not, but it is not pertinent to a seasonal
or project Ee. Passage of time does not make a
seasonal worker regular or permanent. (Mercado A: No, the fact is that big rice mills such as
v. NLRC, G.R. No. 78969, Sep. 5, 1991) the one owned by the company continue to
operate and do business throughout the year
During off-season, the relationship of Er-Ee is not even if there are only two or three harvest
severed; the seasonal Ee is merely considered seasons within the year. It is a common
on LOA without pay. Seasonal workers who are practice among farmers and rice dealers to
repeatedly engaged from season to season store their palay and to have the same milled
performing the same tasks are deemed to have as the need arises. Thus, the milling
acquired regular employment. (Hacienda Fatima operations are not seasonal. Finally,
v. National Federation of Sugarcane Workers- considering the number of years that they
Food and General Trade, G. R. No. 149440, Jan. have worked, the lowest being 6 years, the
28,2003) workers have long attained the status of
regular Ees as defined under Art. 280.
Q: Are seasonal Ees entitled to separation (Tacloban Sagkahan Rice Mill v. NLRC, G.R.
pay? No. 73806, Mar. 21, 1990)

A: When the business establishment is sold

which effectively terminates the employment of
the seasonal Ees, the latter would be entitled
to separation pay.

UNIVERSITY OF SANTO TOMAS

Pacu(taa ae iDereclio CiviC
.~ 153
 LABOR RELATIONS: POST-EMPLOYMENT

~ PROBATIONARY EMPLOYEES c. The probation is fixed

Q: What is probationary employment?
A: Employment where the employee (Ee),
upon his engagement:
1. Is made to undergo a trial period
2. During which the Er determines his
fitness to qualify for regular
employment,
3. Based on reasonable standards
made known to the Ee at the time of
engagement. (Sec 6, Rule I, Book VI,
IRR)
Note: The services of an Ee who has been
engaged on probationary basis may be
terminated only for just cause, when he fails to
qualify as a regular Ee in accordance with
reasonable standards prescribed by the Er.
Q: Michelle Miclat was employed on a
probationary basis as marketing assistant
by Clarion Printing House but during her
employment she was not informed of the
standards that would qualify her as a
regular employee (Ee). 30 days after,
Clarion informed Miclat that her
employment contract hac'! been terminated
without any reason. Miclat was informed
that her termination was part of Clarion's
cost-cutting measures. Is Miclat considered
as a regular Ee and hence entitled to its
benefits?
A: Yes. Probationary employment shall be
governed by the following rules: xxx (d) In all
cases of probationary employment, the Er
shall make known to the Ee the standards
under which he will qualify as a regular Ee at
the time of his engagement. Where no
standards are made known to the Ee at that
time, he shall be deemed a regular Ee". In the
case at bar, she was deemed to have been
hired from day one as a regular Ee. (Clarion
Printing House Inc., VS. NRLC, G.R. No.
148372, June 27, 2005, J. Carpio-Morales)
Q: What are the characteristics
probationary employment?
A:
1. It is an employment for a trial period;
2. It is a temporary employment status
prior to regular employment;
3. It arises through a contract with the
following elements:
a. The employee (Ee) must learn
and work at a particular type of
work
b. Such work calls for certain
qualifications
d. The Er reserves the power to
terminate during or at the end of
the trial period
e. And if the Ee has learned the job
to the satisfaction of the Er, he
becomes a regular Ee.
Q: What is the period of probationary
employment?
A: GR: It shall not exceed 6 months.
XPNs:
1. Covered by an apprenticeship or
learnership agreement stipulating a
different period
2. Voluntary agreement of parties
(especially when the nature of work
requires a longer period)
3. The Er gives the(Ee a second chance
to pass the standards set. (Mariwasa
Manufacturing, Inc. v. Leogardo,
Jr.,G.R. No. 74246, Jan. 26, 1989)
4. When the same is required by the
nature of the work, e.g. the
probationary period set for
professors, instructors and teachers
is 3 consecutive years of satisfactory
service pursuant to DOLE Manual of
Regulations for Private Schools.
5. When the same is established by
company policy.
Note: Period of probation shall be reckoned from
the date the Ee actually started working. (Sec.6
[b), Rule I, Book VI, IRR)
After the lapse of the probationary period (6
months), Ee becomes regular.
Probationary Ees may be dismissed before end
of the probationary period.
Q: May the Er and Ee validly agree to
extend the probationary period beyond 6
months?
A: Yes. Such an extension may be lawfully
of agreed upon, despite the restrictive language
of Art. 281. A voluntary agreement extending
the original probationary period to give the Ee
a second chance to pass the probation
standards constitutes a lawful exception to the
statutory limit. (Mariwasa Manufacturing, Inc.
v. Leogardo, Jr., G.R. No. 74246, Jan. 26,
1989)
Note: By voluntarily agreeing to such an
extension, the Ee waived any benefit attaching to
the completion of the period if he still failed to
make the grade during the period of extension.
(Mariwasa Mfg. Inc. v. Hon. Leogardo, G.R. No.
74246, Jan. 26, 1989)

154
 UST GOLDEN NOTES 2010

Q: Is double or successive probation granting the subject Ee regular

allowed? employment status (based on
Constitutional and statutory provisions
A: No. The evil sought to be prevented is to for the liberal interpretation of labor
discourage scheming employers from using laws)
the system of double or successive probation
to circumvent the mandate of the law on Q: What is the purpose of the period?
regularization and make it easier for them to
dismiss their employees. (Holiday Inn Manila A; To afford the employer an opportunity to
v. NLRC, G.R. No. 109114, Sep. 14,2003) observe the fitness of a probationary employee
at work.
Q: Middleby Phils. Corp. hire~ Alcica as
eng'g support services supervisor on a Q: In what instances is a probationary
probationary basis for 6 months. employee (Ee) deemed a regular Ee?
Apparently unhappy with Alcira's
performance, Middleby terminated his A:
services. Alcira contends that he was 1. If he is allowed to work after a
already a regular employee (Ee) when he probationary period. (Art. 281)
was tenninated. According to Alcira's 2. If no standards, under which he will
computation, since Art. 13 of the Civil Code qualify as a regular Ee, are made
provides that 1 month is composed of 30 known to him at the time of his
days, 6 months totaling 180 days, then his engagement. (Sec. 6 [d), Rule I, Book
180th day would fall on Nov. 16, '96 making VI, IRR)
him a regular Ee before his termination. Is
the contention of the petitioner in the Q: What are the grounds for terminating
computation of 6 months correct? probationary employment?

A: No, the computation of the 6-month A:

probationary period is reckoned from the date 1. JusUauthorized causes
of appointment up to the same calendar date 2. When he fails to qualify as a regular
of the s" month following. In short, since the Ee in. accordance with reasonable
number of days in each particular month was standards made known by the
irrelevant, Alcira was still a probationary Ee employer (Er) to the Ee at the time of
when Middleby opted not to "regularize" him his engagement (ICMC v. NLRC,
on Nov. 20, 1996. (Alcira v. NLRC, G.R. No. G.R. No. 7222~Jan. 30, 198~
149859, June 9, 2004)
Notes: The probationary Ee is entitled to
Note: In Mitsubishi Motors v. Chrysler Phils. procedural due process prior to dismissal from
Labor Union, GR. No. 148738, June 29, 2004, service.
the SC ruled in this wise:
While probationary Ees do not enjoy permanent
"Applying Art. 13 of the Civil Code, the status, they are afforded the security of tenure
probationary period of 6-months consists of the protection of the Constitution. Consequently, they
180 days. This is in conformity with par.1, Art. 13 cannot be removed from their positions unless for
of the Civil Code. The number of months in the cause. Such constitutional protection, however,
probationary period, 6, should then be multiplied ends upon the expiration of the period stated in
by the number of days within a month, 30; hence, their probationary contract of employment.
the period of 180 days. As clearly provided for Thereafter, the parties are free to renew the
the in last par. of Art. 13, in computing a period, contract or not. (CSA v. NLRC, GR. No. 87333,
the first day shall be excluded and the last day Sep. 6, 1991)
included. Thus, the 180 days commenced on
May 27,1996, and ended on Nov. 23,1996. The Q; What are the limitations on the
termination letter dated Nov. 25, 1996 was employer's (Er's) power to tenninate a
served on Paras only on Nov. 26, 1996. He was, probationary employment contract?
by then already a regular Ee of the company
under Art. 281 of the LC." A:
1. The power must be exercised in
How to resolve the conflict between the Alcira accordance with the specific req'ts of
and Mitsubishi Motors case? the contract
1. Statutory Construction - The latter case 2. If a particular time is prescribed, the
prevails (Mitsubishi Motors); or termination must be within such time
2. Rule more favorable to the Ee - use the and if formal notice is required, then
computation which would amount to that form must be used,

UNIVERSITY OF SANTO TOMAS .~ 155

Pacu{taa de cDerecno Cid{ .. .
 LABOR RELATIONS: POST-EMPLOYMENT
3. The Er's dissatisfaction must be real
and in good faith, not feigned so as to
circumvent the contract or the law
4. There must be no unlawful
discrimination in the dismissal
Note: The probationary employee is entitled to
procedural due process prior to dismissal from
service.
Q: R.L. Cruz was employed as gardener by
Manila Hotel on "probation status" effective
Sep. 22, '76. The appointment signed by Cruz
provided for a 6 month probationary period.
On Mar. 20, '77, or a day before the expiration
of the probationary period, Cruz's was
promoted to lead gardener position. On the
same day Cruz' position was "abolished" by
Manila Hotel allegedly due to economic
reverses or business recession, and to
salvage the enterprise from imminent danger
of collapse. Was Cruz illegally dismissed?
A: Yes, there is no dispute that as a probationary
employee (Ee), Cruz had but limited tenure.
Although on probationary basis, however, Cruz
still enjoys the constitutional protection on
security of tenure. During his tenure of
employment, therefore, or before his contract
expires, Cruz cannot be removed except for
cause as provided for by law.
What makes Cruz' dismissal highly suspicious is
that it took place at a time when he needs only
but a day to be eligible as a regular Ee. That he
is competent finds support in his being promoted
to a lead gardener in so short span of less than 6
months. By terminating his employment or
abolishing his position with but only one day
remaining in his probationary appointment, the
hotel deprived Cruz of qualifying as a regular Ee
with its concomitant rights and privileges. (Manila
Hotel Corp. v. NLRC, G.R. No. L-53453, Jan. 22,
1986)
Q: Coleglo San Agustin (CSA) hired the Gela
Jose as a grade school classroom teacher on
a probationary basis for SY 'S4 - 'S5. Her
contract was renewed for SY's 'S5·'S6 and 'S6-
'S7. On Mar. 24, 'S7, the CSA wrote the Gela
that "it would be in the best interest of the
students and their families that she seek
employment in another school or business
concern for next school year".
Notwithstanding the said notice, the CSA still
paid Gela her salary for April 15 to May 15,
1987. On April 6, 'S7, Gela wrote the eSA and
sought reconsideration but she received no
reply. Thereafter, she filed a complaint for
illegal dismissal. Was Gela illegally
dismissed?
A: No. The Faculty Manual of CSA underscores
the completion of 3 years of continuous service at
CSA before a probationary teacher acquires
156
tenure. Hence, the Gela cannot claim any vested
nght to a permanent appointment since she had
not yet achieved the prerequisite 3-year period
under the Manual of Regulation for Private
Schools and the Faculty Manual of CSA.
In the instant case where the CSA did not wish to
renew the contract of employment for the next
school year, the Gela has no ground to protest.
She was not illegally dismissed. Her contract
merely expired. (CSA v. NLRC, G.R No. 87333,
Sep. 6, 1991)
Q: During their probationary employment, S
Ees were berated and insulted by their
supervisor. In protest, they walked out. The
supervisor shouted at them to go home and
never to report back to work. Later, the
personnel manager required them to explain
why ,they should not be dismissed from
employment for abandonment and failure to
~ualify for the positions applied for. They
flled a complaint for illegal dismissal against
their Er. As a LA, how will you resolve the
case?
A: As a LA I will resolve the case in favor of the
8 probationary Ees due to the ff::
1. Probationary Ees also enjoy security of
tenure. (Biboso v. Victoria Milling,
G.R. No. L-44360, Mar. 31, 1977)
2. In all cases involving Ees on
probationary status, the Er shall make
known to the Ee at the time he is
hired, the standards by which he will
qualify for the positions applied for.
3. The filing of the complaint for illegal
dismissal effectively negates the Ers
theory of abandonment. (Rizada v.
NLRC, G.R. No. 96982, Sep. 21,
1999)
4. The order to go home and not to return
to work constitutes dismissal from
employment.
5. The 8 probationary Ees were
terminated without just cause and
without due process
In view of the foregoing, I will order
reinstatement to their former positions without
loss of seniority rights with full backwages, plus
damages and atty's fees. (2006 Bar Question)
 UST GOLDEN NOTES 2010

~" ' . CASUAL EMPLOYEES The workers are casual Ees. Nevertheless,
they may be considered regular Ees if they
Q: What is casual employment? have rendered services for at least 1 year.
When, as in this case, they were dismissed
A: from their employment before the expiration of
1. An Ee is engaged to perform a job, the 1-year period they cannot lawfully claim
work or service which is merely that their dismissal was illegal. (Capule, et al.
incidental to the business of the Er, v. NLRC, G.R. No. 90653, Nov. 12, 1990)
and such job, work or service is for a
definite period made known to the Ee
at the time of engagement (Sec. 5 {b},
Rule I, Book VI, IRR) ~) ~

Note: If he has rendered at least 1 year of

service, whether such service is continuous
or broken, he is considered as regular Ee
with respect to the activity in which he is
employed and his employment shall
continue while such activity exists.

A Casual Ee is only casual for 1 year, and it

is the passage of time that gives him a
regular status. (KASAMMA-CCO v. CA, G.R.
No. 159828, April 19, 2006)

The purpose is to give meaning to the

constitutional guarantee of security of tenure
and right to self-organization. (Mercado v.
NLRC, G.R. No. 79868, Sep. 5, 1991)

2. It is an employment where the Ee is

engaged in an activity which is not
usually necessary or desirable in the
usual business or trade of the Er,
provided: such employment is not
project nor seasonal (Art. 281).
Academics Committee
Note: But despite the distinction between
Chairperson: .Abraham D. Genuino II
regular and casual employment, every Ee
Vice-Chair jor Academics: Jeannie A. Laurentino
shall be entitled to the same rights and
privileges, and shall be subject to the same Vice-Chair jar Admin & Finance: Aissa Celine H. Luna
duties as may be granted by law to regular Vice-Cbair jar Lyout & Design: Loise Rae G. Naval
Ees during the period of their actual
employment. Labor Law Committee
SubJect Head' Lester Jay Alan E. Flores II
Q: Yakult Phils. is engaged in the Assistant SubJect Head' Domingo B. Diviva V
manufacture of cultured milk. The workers
were hired to cut cogon grass and weeds at
Members:
the back of the factory building used by
Yakult. They were not required to work on Rene Francis P. Batal1a
fixed schedule and they worked on any day Diane Camilla R. Borja
of the week on their own discretion and Maria Kristina 1. Dacayo-Garcia
convenience. The services of the workers Christian Nino A. Diaz
were terminated by Yakult on less than 1- Angelo S. Diokno
year after. May casual or temporary Ees be Genesis R. Fulgencio
dismissed by the Er before the expiration J eanel1eC. Lee
of the 1-year period of employment? J emuel Paolo M. Lobo
Andrew \'\1. Montesa
A: Yes, the usual business or trade of private
Maria Maica Angelika Roman
respondents is the manufacture of cultured
milk. The cutting of the cogon grasses in the

~\.!
premises of its factory is hardly necessary or
desirable in the usual business of the Yakult.

UNIVERSITY OF SANTO TOMAS 157

Pacu{taa ae lDerecfio Ci1Jif '1
 LABOR RELATIONS: TERMINATION OF EMPLOYMENT: JUST CAUSES

r " ART. 279. SECURITY OF TENURE.' '. 2. Gross and habitual neglect by the Ee
of his duties
Q: What is security of tenure? 3. Fraud or willful breach by the Ee of
the trust reposed in him by his Er or
A: In cases of regular employment, the Er duly organized representative
shall not terminate the services of an Ee 4. Commission of a crime or Qffense by
except for just or authorized causes as the Ee against the person of his Er or
provided by law, and subject to the req'ts of any immediate member of his family
due process. (Sec. 2 (aJ, Rule I, Book VI, IRR) or his duly authorized representative.
5. Other causes analogous to the
It is the constitutional right granted to Ee, that foreqoinq
an Er shall not terminate the services of an Ee
except for just cause or when authorized by Note: The burden of proving that the termination
law. It extends to regular (permanent) as well was for a valid or authorized cause shall rest on
as non-regular (temporary) employment. the Er. (Art. 277{bJ)
(Kiamco v. NLRC, G.R. No. 129449, June 29,
1999) Q: What is the totality of infractions
doctrine?
Note: Security of tenure is not confined to cases
of termination of Er-Ee relationship alone. It is A: It is the totality. not the
also intended to shield workers from unwarranted compartmentalization of company infractions
and unconsented demotion and transfer. that the Ee has committed, which justifies the
penalty of dismissal. (MERALCO v. NLRC,
Q: What is the extent of the application of G.R. No. 114129, Oct. 24, 1996)
security of tenure?
Where the Ee has been found to have
A: It does not exclusively apply to regular repeatedly incurred several suspensions or
employment only. It also applies to warnings on account of violations of company
probationary, seasonal, project and other rules and regulations, the law warrants their
forms of employment during the effectivity dismissal as it is akin to "habitual delinquency".
thereof. Managerial employees also enjoy (Villeno v. NLRC, G.R. No. 108153, Dec. 26,
security of tenure. 1995)

Q: Which takes precedence in conflicts Q: What are the guidelines to determine the
arlsmg between Ers' management validity of termination?
prerogatives and the Ees' right to security
of tenure? A:
1. Gravity of the offense
A: The Ees' right to security of tenure. An Ers' 2. Position occupied by the employee
management prerogative includes the right to 3. Degree of damage to the employer
terminate the services of the Ee but this 4. Previous infractions of the same
management prerogative is limited by the LC offense
which provides that the Er can terminate an Ee 5. Length of Service
only for just cause or when authorized by law.
This limitation is because no less than the
Constitution recognizes and guarantees Ees' . I. SERIOUS MISCONDUCT
right to security of tenure. (Art. 279, LC, Art.
XIII, Sec. 3, 1987 Constffution) Q: What is serious misconduct?

A: It is an improper or wrong conduct; the

l ART. 282: TERMINATION BY EMPLOYER . transgression of some established and definite
rule of action, a forbidden act, a dereliction of
Q: What are the just causes for duty. willful in character, and implies wrongful
termination? intent and not mere error in judgment. To be
serious within the meaning and intendment of
A: the law, the misconduct must be of such grave
1. Serious misconduct or willful and aggravated character and not merely
disobedience by the employee (Ee) of trivial or unimportant. (Vil/amor Golf Club v.
the lawful orders of his employer (Er) Pehid, G.R. No. 166152, Oct. 4, 2005)
or representative in connection with
his work

15f.f
 UST GOLDEN NOTES 2010

Q: What are the elements of serious Q: Give some examples of serious

misconduct? misconduct.

A: A:
1. It must be serious or of such a grave 1. Sexual harassment
and aggravated character; 2. Fighting within the company premises
2. Must relate to the performance of the 3. Uttering obscene, insulting or
employees (Ee) duties; offensive words against a superior
3. Ee has become unfit to continue 4. Falsification of time records
working for the employer. (Philippine 5. Gross immorality
Aeolus Automotive United Corp. v.
NLRC, G.R. No. 1246~l, Aprjl 28,
2000)' II. WILLFUL DISOBEDIENCE o.

Q: Escando, upset at his transfer to the Q: When is willful disobedience of the Er's
washer section, repeatedly uttered "gago lawful orders a just cause for termination?
ka" and threatened bodily hann to his
superior Mr. Andres, Is the utterance of the A: 2 requisites must concur:
obscene words and threats of bodily harm 1. The employees (Ees) assailed
gross and willful misconduct?
conduct must have been willful or
intentional, the willfulness being
A: Yes. The repeated utterances by Escando characterized by a wrongful and
of obscene, insulting or offensive words perverse attitude.
against a superior were not only destructive of 2. The disobeyed orders, regulations or
the morals of his co-employees (Ees) and a instructions of the Er must be:
violation of the company rules and regulations, a. Reasonable and lawful
but also constitute gross misconduct which is b. Sufficiently made known to the
one of the grounds provided by law to Ee
terminate the services of an Ee. (Autobus c. Must pertain to or be in
Workers Union v. NLRC, G.R. No. 11753, connection with the duties which
June 26, 1998)
the Ee has been engaged to
discharge. (Cosep V. NLRC,
Q: Samson made Insulting and obscene G.R. No. 124966 June 16, 1998)
utterances towards the General Manager
saying "Si EDT bullshit yan, sabihin mo kay Note: There is no law that compels an Ee to
EDT yan" among others during the accept a promotion for the reason that a
Christmas party, Are the utterances promotion is in the nature of a gift or reward.
towards the General Manager gross which a person has the right to refuse. The
misconduct? exercise of the Ee of the right to refuse a
promotion cannot be considered in law as
A: The alleged misconduct of Samson when insubordination or willful disobedience. (PT& T
viewed in its context is not of such serious and Corp. v. CA. GR. No. 152057, Sep. 29, 2003)
grave character as to warrant his dismissal.
The Samson made the utterances and Q: Aquote brought out of the company
obscene gestures at an informal Christmas premises the company vehicle without
gathering and its is to be expected during this authorization twice and meeting an
kind of gatherings, where tongues are more accident in Espana Blvd. in the latter
often than not loosened by liquor of other instance. Is Aquote guilty of willful
alcoholic beverages, that employees (Ees) disobedience even though he was not the
freely express their grievances· and gripes one who personally brought the company
against their employers (Ers). Ees should be vehicle out of the company premises?
allowed wider latitude to feely express heir
grievances and gripes against their Er. Ees A: Yes. A rule prohibiting Ees from using
should be allowed wider latitude to freely company vehicles for private purpose without
express their sentiments during these kinds of authority from management is a reasonable
occasions which are beyond the disciplinary one.
authority of the Er. (Samson v. NLRC, G.R.
No. 121035, April 12, 2000) When Aquote rode the company vehicle he
was undoubtedly aware of the possible
consequences of his act and taking into
consideration his moral ascendancy over the
security guards it was incumbent upon him not

UNIVERSITY OF SANTO TOMAS (:~ 159

If'acu[taa ae lDereChO CiviC '."
 LABOR RELATIONS: TERMINATION OF EMPLOYMENT: JUST CAUSES

only to admonish them but also to refrain from considering that Antiola committed the
using the company car himself. (Family infraction for the first time. (Judy Phi/so V.
Planning Org. of the Phil. v. NLRC, G.R. No. NLRC, G.R. No. 111934. April 29, 1998)
75907, Mar. 23, 1992)
Q: Does the failure in performance
Q: Escobin et al. were security guards evaluations amount to gross and habitual
based in Basilan were placed in floating neglect of duties?
status and were asked to report for
reassignment in Metro Manila by PIS! and A: As a general concept "poor performance" is
upon failure to report or respond to such equivalent to inefficiency and incompetence in
directives were ordered dismissed from the performance of official duties. The fact that
employment by PISI for willful an employee's (Ee's) performance is found to
disobedience. Did the failure to report to be poor or unsatisfactory does not necessarily
Manila amount to willful disobedience? mean that the Ee <is grossly and habitually
negligent of his duties. Gross negligence
A: The reasonableness of the rule pertains to implies a want or absence of or failure to .
. the kind of character of directives and exercise slight care of diligence or the entire
commands and to the manner in which they absence or care. He evinces a thoughtless
are made. In this case, the order to report to disregard of consequences without exerting
the Manila office fails to meet this standard. any effort to avoid them. (Eastern Overseas
The order to report to Manila was Employment Center Inc. V. Bea, G.R. 143023,
inconvenient, unreasonable, and prejudicial to Nov.29,2005)
Escobin et a/. since they are heads of families
residing in Basilan and they were not given Q: Is inefficiency a just cause for
transportation money or assurance of dismissal?
availability of work in Manila. (Escobin v.
NLRC, G.R. No. 118159. Apri/15, 1998) A: Yes, failure to observe prescribed
standards of work, or to fulfill reasonable work
assignments due to inefficiency may constitute
III. A. NEGLIGENCE just cause for dismissal. Such inefficiency is
understood to mean failure to attain work goals
Q: When is negligence a just cause for or work quotas, either by failing to complete
termination? the same within the allotted reasonable period,
or by producing unsatisfactory results. (Buiser
A: When it is gross and habitual. V. Leogardo, GR. No. L-63316, July 31, 1984)

Gross negligence implies a want or absence of This ground is considered analogous to those
or failure to exercise slight care of diligence of enumerated under Art. 282. (Skippers United
the entire absence of care it evinces Pacific v. Magud, G.R. No. 166363, Aug. 15,
thoughtless disregard of consequences 2006)
without exerting any effort to avoid them.
However, such neglect must not only be gross Q: Gamido was a quality control inspector
but habitual in character. (Judy Phils. v. NLRC, of VH Manufacturing. Gamido was allegedly
G.R. No. 111934, April 29, 1998) caught by the company Pres. Dy Juanco of
sleeping and was dismissed from
Habitual Neglect implies repeated failure to employment Did Gamido's act of sleeping
perform one's duties over a period of time, on the job constitute a valid cause of
depending upon the circumstance. (JGB and dismissal?
Associates v. NLRC, GR No. 10939, Mar. 7,
1996) A: Sleeping on the job as a valid ground for
dismissal only applies to security guards
Q: Antiola, as assorter of baby infant dress whose duty necessitates that they be awake
as for Judy Phils. erroneously assorted and and watchful at all times. Gambido's single act
packaged 2,680 dozens of infant wear. of sleeping further shows that the alleged
Antiola was dismissed from employment negligence or neglect of duty was neither
for this infraction. Does the single act of groS$ nor habitual. (VH Manufacturing V.
misassortment constitute gross NLRC, G.R. No. 130957, Jan. 19,2000)
negligence?

A: No. Such neglect must not only be gross

but also habitual in character. Hence, the
penalty of dismissal is quite severe

160
 UST GOLDEN NOTES 2010

Q: Give some forms of neglect of duty. reinstatement as a relief. Did Mejila commit
abandonment?
A:
1. Habitual tardiness and absenteeism A: Mejila's acts such as surrendering the
2. Abandonment: shop's keys, not reporting to the shop anymore
a. Failure to report for work or without any justifiable reason, his employment
absence without justifiable in another barber shop, and the filing of a
reason complaint for illegal dismissal without praying
b. Clear intention to sever Er-Ee for reinstatement clearly show that there was a
relationship manifested by some concurrence of the intention to abandon and
overt acts. (Labor et. al v. NLRC, some overt acts from which it may be inferred
GR No. 110388, Seg.14, 1~95) that the Ee concerned has no more interest in
working. (Jo v. NLRC, G.R. No. 121605, Feb.
2,2000)
I III.. B. ABANDONMENT

Q: What is abandonment as a just cause for IV. FRAUD; BREACH OF TRUSTILOSS OF

termination? CONFIDENCE .

A: It means the deliberate, unjustified refusal Q: When is breach of trust/loss of

of an employee to resume his employment. confidence a just cause for termination?
Q: What are the requirements for a valid
finding of abandonment? A:
A: For a valid finding of abandonment, 2 1. It applies only to cases involving:
factors must be present: a. Employees (Ees) occupying
1. The failure to report for work, or positions of trust and confidence
absence without valid 'Or justifiable (confidential and managerial
reason; and Ee's) - to this class belong
2. A clear intention to sever Er-Ee managerial Ees, i.e., those
relationship, with the 2nd element as vested with the powers or
the more determinative factor, being prerogatives to lay down
manifested by some overt acts. (Sta. management policies andlor to
Catalina College and Oranza, vs. hire, transfer, suspend, lay-off,
NLRC and Tercera, G. R. No. recall, discharge, assign or
144483, Nov. 19, 2003, J. Carpio- discipline Ees or effectively
Morales) recommend such managerial
actions
Q: How to prove abandonment? b. Ees routinely charged with the
care and custody of the
A: To prove abandonment, the Er must show employer's (Er's) money Dr
that the Ee deliberately and unjustifiably property - to this class belong
refused to resume his employment without any cashiers, auditors, property
intention of returning. There must be a custodians, etc., or those who, in
concurrence of the intention to abandon and the normal and routine exercise
some overt acts from which an Ee may be of their functions, regularly
deduced as having no more intention to work. handle significant amounts of
The law, however, does not enumerate what money or property. (Mabeza v.
specific overt acts can be considered as strong NLRC, G. R. No. 118506 April 18,
evidence of the intention to sever the Ee-Er 1997)
relationship. (Sta. Catalina College and Sr.
Loreta Oranza, VS. NLRC and Tercera, G.R. 2. The loss of trust and confidence must
No. 144483. Nov. 19, 2003, J. Carpio- be based on willful breach. A breach
Morales) is willful if it is done intentionally,
knowingly, and purposely without
Q: Mejila a barber at Windfield Barber justifiable excuse, as distinguished
Shop, had an altercation with a fellow from an act done carelessly,
barber which resulted in his subsequent thoughtlessly, heedlessly, or
turning over the duplicate keys of the shop inadvertently (De te Cruz v. NLRC,
to the cashier and took away all his G.R. No. 119536, Feb. 1~ 199~.
belongings there from and worked at
different barbershop. Mejila then filed an 3. The act constituting the breach must
illegal dismissal case but did not seek be "work-related" suchas would show

UNIVERSITY OF SANTO TOMAS (~. 161

Pacu[taa de (])erecno CiviC ,",
 LABOR RELATIONS: TERMINATION OF EMPLOYMENT: JUST CAUSES

the Ee concerned to be unfit to loss of confidence a valid ground for

continue working for the Er. dismissal of a hotel chambermaid?
(Gonzales V. NLRC, G.R. No.
131653, Mar. 26, 2001) A: No. Loss of confidence as a just cause for
dismissal was never intended to provide Ers
4. It must be substantial and founded on with a blank check for terminating their Ees.
clearly established facts sufficient to Evidently, an ordinary chambermaid who has
warrant the Ee's separation from to sign out for linen and other hotel property
employment. (Sulpicio Lines Inc. V. from the property custodian each day and who
Guide, G. R. No. 149930, Feb. 22, has to account for each and every towel or bed
2002) sheet utilized by the hotel's guests at the end
of her shift would not fall under any of these
5. Fraud must be committed against the two classes of Ees for which loss of
Er or his representatives, e.g.: confidence, if ably supported by evidence,
a. Falsification of time cards would nonmally apply. (Mabeza v. NLRC, G.R.
b. Theft of company property No. 118506, April 18, 1997)
c. Unauthorized use of company
vehicle Note: The breach of trust must rest on
substantial grounds and not on the Er's
Note: The treatment of rank and file personnel arbitrariness, whims, caprices, or suspicion:
and managerial Ees in so far as the application of otherwise, the Ee would eternally remain at the
the doctrine of loss of trust and confidence is mercy of the Er. It should be genuine and not
concerned is different. As regards managerial simulated, nor should it appear as a mere
Ees, such as Caoile, mere existence of a basis afterthought to justify earlier action taken in bad
for believing that such Ee has breached the trust faith of a subterfuge for causes which are
of his Er would suffice for his dismissal. (Caoile v. improper, illegal, or unjustified. It has never been
NLRC, GR. No. 115491, Nov. 24, 1998) intended to afford and occasion for abuse
because of its subjective nature. There must,
A criminal case need not be actually filed. therefore, be an actual breach of dully committed
Commission of acts constituting a crime itself is by the employee which must be established by
sufficient. substantial evidence. (Oela Cruz v. NLRC, GR.
No. 119536, Feb. 17, 1997)
Q: What are the guidelines for the doctrine
of loss of confidence to apply? Q: Abelardo Abel was first hired by Philex
Mining Corp. in Jan. '88. He was later
A: assigned to the company's Legal Dep't as a
1. Loss' of confidence should not be Contract Claims Asst., and held the
simulated (reasonable basis for loss position for 5 yrs prior to his transfer to the
of trust and confidence) Mine Eng'g and Draw Control Dep't wherein
2. Not used for subterfuge for causes he was appointed Unit Head. In '02, he was
which are improper and/or illegal and implicated in an irregularity occurring in
unjustified . the subsidence area of the company's mine
3. Not arbitrarily asserted in the face of site at Benguet. His co-worker Danilo,
overwhelming evidence to the executed an affidavit known as the
contrary; "Subsidence Area Anomaly". The incidents
4. Must be genuine, not a mere in Lupega's affidavit supposedly took place
afterthought to justify earlier action when Abel was still a Contract Claims Asst.
taken in bad faith and at the company's legal dep't. An
5. The Ee involved holds a position of investigation was promptly launched by the
trust and confidence. company's officers. Abel attended the
meetings but claimed that he was neither
Q: Mabeza a chambermaid at Hotel asked if he needed the assistance of
Supreme was terminated from employment counsel nor allowed to properly present his
because of her refusal to sign an affidavit side. By memo, the company found Abel
attesting to their employer's (Er's) guilty of (1) fraud resulting in loss of trust
compliance with minimum wage and other and confidence and (2) gross neglect of
labor standards. Mabeza filed a complaint duty, and was meted out the penalty of
for illegal dismissal against Hotel Supreme. dismissal from employment. Was Abel
As a defense, Hotel Supreme claimed that validly dismissed for any of the causes
she abandoned her work and belatedly provided for in Art. 282 of the LC?
claimed loss of confidence as the ground
for the dismissal of Mabeza because she A: No. The 1st requisite for dismissal on the
stole some of the properties of her Er. Is ground of loss of trust and confidence is that

1.62
 UST GOLDEN NOTES 2010

the Ee concerned must be holding a position 4." Illegally diverting employer's products
of trust and confidence, Abel was a contract 5. Failure to heed an order not to join an
claims assistant at the time he allegedly illegal picket
committed the acts which led to its loss of trust 6. Violation of safety rules and code of
and confidence. It is not the job title but the discipline
actual work that the Ee performs. It was part of
Abel's responsibilities to monitor the Q: What is the doctrine of incompatibility?
performance of the company's contractors in
relation to the scope of work contracted out to A: Where the employee has done something
them. that is contrary or incompatible with the faithful
performance of his duties, his employer has a
The 2nd requisite is that there most be 61nact just cause for terminating his employment.
that would justify the loss of trust' and (Manila Chauffeur's League v. Bachrach Motor
confidence. Loss of trust and confidence, to Co., G.R. No. L-47071, June 17, 1940)
be a valid cause for dismissal, must be based
on a willful breach of trust and founded on
clearly established facts. The basis for the VII. IMMORALITY
dismissal must be clearly and convincingly
established but proof beyond reasonable Q: Santos, a married man and a teacher
doubt is not necessary. The company's was dismissed from employment for
evidence against Abel fails to meet this having an extra-marital affair with a co-
standard. Its lone witness, Lupega, did not teacher as confirmed by the investigating
support his affidavit and testimony during the committee of the school. Is immorality a
company investigation with any piece of just and valid ground for dismissal of
evidence at all. It could hardly be considered employment?
substantial evidence. (Abel v. F?hilex Mining
Corp., G.R. No. 178976, July 31, 2009, J. A: To constitute immorality, the circumstances
Carpio-Morales) of each particular case must be holistically
considered and evaluated in light of the
prevailing norms of conduct and applicable
: V. COMMISSION OF A CRIME laws. Consequently, it is but stating the
obvious to assert that teachers must adhere to
Q: What do you mean by "commission of a the exacting standards of morality and
crime or offense" as a just cause for decency. The personal behaviors of teacher, in
termination of an Ee? . and outside of the classroom must be beyond
A: It refers to an offense by the Ee against the reproach. Teachers must observe a high
person of his employer or any immediate standard of integrity and honesty. When a
member of his family or his duly authorized teacher engages in extra-marital relationship.
representative and thus, conviction of a crime especially when the parties are both married,
involving moral turpitude is not analogous such behavior amounts to immorality, justifying
thereto as the element of relation to his work his termination from employment. (Santos v.
or to his employer is lacking. NLRC, G.R. No. 115795, Mar. 6, 1998)

Note: A criminal case need not be actually filed.

Commission of acts constituting a crime itself is VIII. UNION SECURITY CLAUSE
sufficient.
Q:, MSMG was a local union affiliated with
ULGWP a national federation. MSMG had a
. VI. ANALOGOUS CASES
dispute with ULGWP over an imposition of
a fine prompting MSMG to declare
Q: What is required for an act to be independence from ULGWP. Because of
included in analogous cases of just causes the dispute, ULGWP asked for the
of termination? dismissal from employment of the officers
of MDMG from the company by virtue of a
A: Must be due to the voluntary and/or willful union security clause iii the CBA. The
act or omission of the employee (Nadura v. company dismissed the officers. Does a
Benguet Consolidated, G.R. No. L-17780, union security clause absolve the company
Aug. 24, 1962), e.g.: . form observing the requirement of due
1. Violation of company rules and process?
regulations
2. Drunkenness A: Although union security clauses embodied
3. Gross inefficiency in the CBA may be validly, enforced and

UNIVERSITY OF SANTO TOMAS f~~ 163

Pacu[taa de (])erecfzo Civil '.'
 LABOR RELATIONS: TERMINATION OF EMPLOYMENT: JUST CAUSES

dismissals pursuant thereto may likewise be to constitute the act of Tecson as willful
valid, this does not erase the fundamental disobedience?
requirement of due process. An employer
cannot merely rely upon a labor federation's A: The prohibition against personal or marital
allegations in terminating union officers relationships with Ees of competitors
expelled by the federation for allegedly companies upon Glaxo's Ees is reasonable
committing acts of disloyalty and/or inimical to under the circumstances because
the interest of the federation and in violation of relationships of that nature might compromise
its constitution and by laws.
the interest of the company. Glaxo does not
impose an absolute prohibition against
The right of an Ee to be informed of the relationships between its employees and those
charges against him and to be given a of competitor companies. Its employees are
reasonable opportunity to present his side in a free to cultivate relationships with and marry
controversy with 'either the company or his persons of their own choosing. What the
own union is not wiped away by a union company merely seeks to avoid is a conflict of
security clause in a CBA. Even assuming that interest between the Ee and the company that .
a federation had valid grounds to expel union may arise out of such relationships.
, officers, due process requires that these union Furthermore, the prohibition forms part of the
officers be accorded a separate hearing by the employment contract and Tecson was aware
company. (MSMG v. Ramos, G.R. No, of such restrictions when he entered into a
113907, Feb. 28, 2000)
relationship with Bettsy. (Duncan Asso. Of
Detailman-PTGWO v Glaxo WeI/come Phil.
lnc., G.R. No. 162994, Sep. 17, 2004)
_ IX. MARRIAGE

Q: Is a company policy prohibiting

marriage betweenco-workers valid?

A: There must be a finding of a bona fide

occupational qualification (BFOQ) to justify an
employer's (Er's) no spouse rule, There must
be a compelling business necessity for which

...""--,, .
no alternative exists other than the .'. ~:"';". "

discriminating practice. (Star Paper v, Simbol, ""~'~' .

G.R. No. 164774, April 12, 2006)

Academics Committee
Q: What are the factors that the Er must Chairperson: Abraham D. Genuine II
prove inorder to justify BFOQ? Vice-Chair for Academics: Jeannie A. Laurentino
Vice-Chair for Admin & Finance: Aissa Celine H. Luna
A: The Er must prove 2 factors: Vice-Chair for Lqyout & Design: Loise Rae G. Naval

3. That the employment qualification is

Labor Law Committee
reasonably related to the essential
Subject Head: Lester Jay Alan E. Flores II
operation of the job involved; and
Assistant Subject Head' Domingo B. Diviva V
4. That there is a factual basis for
believing that all or substantially all
persons meeting the qualification Members:
would be unable to properly perform Rene Francis P. Batalla
the duties of the job, (Star Paper v. Diane Camilla R Borja
Simbol, G.R. No. 164774, April 12, Maria Kristina L. Dacayo-Garcia
2006) Christian Nino A. Diaz
Angelo S, Diokno
Q: Tecson was employed by Glaxo as Genesis R. Fulgencio
medical representative who has a policy Jeanelle C. Lee
against employees having relationships
Jemuel Paolo M. Lobo
against competitor's employees (Ees).
Tecson married Bettsy, a Branch Andrew W, Montesa
coordinator of Astra, Glaxo's competitor. Maria Maica Angelika Roman
Tecson was transferred to another area.
Tecson did not accept such transfer. Is the
policy of Glaxo valid and reasonable so as

164
 UST GOLDEN NOTES 2010
:' . PROCEDURE IN TERMINATION --- -
Q: What are the 2-fold requirements
valid dismissal for a just cause?
A:
1. Substantive - it must be for a just
cause
2. Procedural - there must be notice
and hearing
Q: What is the process to be ~serv~d by
the employer (Er) for termination of the
employment based on any of the just
causes for termination?
A:
1. A written notice should be served to
the Ee specifying the ground/s for
termination and giving the said Ee
reasonable opportunity to explain.
Note: This first written notice must
apprise the Ee that his termination is
being considered due to the acts stated
in the notice. (Phil. Pizza Inc. v.
Bungabong, GR. No. 15"4315, May 9,
2005)
2. A hearing or conference should be
held during which the Ee concerned,
with the assistance of counsel, if the
Ee so desires, is given the
opportunity to respond to the charge,
present his evidence and present the
evidence presented against him.
3. A written notice of termination - If
termination is the decision of the Er, it
should be served on the Ee indicating
that upon due considerations of all
the Circumstance, grounds have been
established to justify his termination,
at least one month prior to his
termination.
Note: Single notice of termination does
not comply with the requirements of the
law. (Aldeguer & Co., Inc.lLoalde
Boutique, VS. Honeyline Tomboc, GR.
No. 147633, July 28, 2008, J. Carpio-
Morales)
Q: What is the purpose of notice
hearing?
A:
1. The req't of notice is intended to
inform the Ee concerned of the Er's
intent to dismiss him and the reason
for the proposed dismissal; on the
other hand,
2. The req't of hearing affords the Ee
the opportunity to answer his Er's
of a charges against him and accordingly
to defend himself there from before
dismissal is effected. (Salaw v. NLRC
G.R. No. 90786 Sep. 27, 1991)
Note: Failure to comply with the req't of
the 2 notices makes the dismissal
illegal. The procedure is mandatory.
(Loadstar Shipping Co. Inc. v. Mesano,
G.R. No. 138956, Aug. 7, 2003)
Q: While it may be true that the Er enjoys
wider latitude of discretion in terminating
employees (Ees) should there exists valid
and just cause, would this be sufficient for
the Er to depart from giving the Ee the right
to be heard?
A: Art. 277(b) of the LC mandates that an Er
who seeks to dismiss an Ee must "afford the
latter ample opportunity to be heard and to
defend himself with the assistance of his
representative if he so desires." Expounding
on this provision, the SC held that "ample
opportunity" connotes every kind of assistance
that management must accord the Ee to
enable him to prepare adequately for his
defense including legal representation. (U-BIX
Corp. vs. Valeria Anne Bravo, G.R. No.
177647, Oct. 31, 2008, J. Carpio-Morales)
Q: Who has the burden of proof?
A: The burden of proof rests upon the
employer to show that the dismissal of the
employee is for a just cause, and failure to do
so would necessarily mean that the dismissal
is not justified, consonant with the
constitutional guarantee of security of tenure.
Note: Due process refers to the process to be
followed; burden of proof refers to the amount of
proof to be adduced.
In money claims, the burden of proof as to the
amount to be paid the Ees rests upon the Er
since he is in custody of documents that would be
able to prove the amount 'due, such as the
payroll.
and Q: What is the degree of proof?
A: In administrative or quasi-judicial
proceedings, substantial evidence is
considered sufficient in determining the legality
of an employer's dismissal of an employee.
(Pangasinan 11/ Electric Cooperative, Inc. v.
NLRC, G.R. No. 89878, Nov. 13, 1992)
Q: Perez and Doria were employed by
PT& T. After investigation, Perez and Doria
UNIVERSITY OF SANTO TOMAS ~""-", 165
PacuCtaa ae CDereclio CiviC .
 LABOR RELATIONS: TERMINATION OF EMPLOYMENT: PROCEDURE

were placed on preventive suspension for 5. Length of service (ALU- TUCP v.

30 days for their alleged Involvement in NLRC, G.R. No. 120450, Feb. 10,
anomalous transactions in the shipping 1999; PAL v. PALEA, G.R. No.L-
section. PT&T dismissed Perez and Doria 24626, June 28,1974)
from service for falsifying documents. They
filed a complaint for illegal suspension and Q: Felizardo was dismissed from Republic
illegal dismissal. The LA found that the 30- Flour Mills-Selecta ice cream Corporation
day extension of suspension and the for dishonesty and theft of company
subsequent dismissal were both illegal. property for bringing out a pair of boots, 1
The NLRC reversed the LA's decision, it piece aluminum container and 15 pieces of
ruled that Perez and Doria were dismissed hamburger patties. Is the penalty of
for just cause, that they were accorded due dismissal commensurate with the offense
process and that they were illegally committed?
suspended for only 15 days (without
stating the reason for the reduction of the A: There is no question that the employer has
period of petitioners' illegal suspension). the inherent right to discipline its Ees which
On appeal, CA held that they were includes the right to dismiss. However this
dismissed without due process. Whether right is subject to the police power of the State.
petitioners were illegally dismissed? In this case the Court finds that the penalty
imposed upon Felizardo was not
A: Yes. The Er must establish that the commensurate with the offense committed
dismissal is for cause in view of the security of considering the value of the articles he pilfered
tenure that Ees enjoy under the Constitution and the fact that he had no previous
and the LC. PT&T failed to discharge this derogatory record during his 2 years of
burden. PT&T's illegal act of dismissing Perez employment in the company. Moreover, it
and Doria was aggravated by their failure to should also be taken into account that
observe due process. To meet the req'ts of Felizardo was not a managerial or confidential
due process in the dismissal of an Ee, an Er Ee in whom greater trust is reposed by
must furnish the worker with 2 written notices: management and from whom greater fidelity to
(1) a written notice specifying the grounds for duty is correspondingly expected. (ALU- TUCP
termination and giving to said Ee a reasonable v. NLRC, G.R. No. 120450, Feb. 10, 1999)
opportunity to explain his side and (2) another
written notice indicating that, upon due
consideration of all circumstances, grounds , . CONSTRUCTIVE DISMISSAL
have been established to justify the Er's
decision to dismiss the Ee. Q: What is constructive dismissal?

There is however, no need for a hearing or A: An involuntary resignation resorted to when

conference. "To be heard" does not mean continued employment becomes impossible,
verbal argumentation alone inasmuch as one unreasonable, or unlikely: when there is a
may be heard just as effectively through demotion in rank or diminution in pay: or when
written explanations, submissions or a clear discrimination, insensibility or disdain
pleadings. In other words, the existence of an by an Er becomes unbearable to the Ee.
actual, formal "trial-type" hearing, although (Leonardo v. NLRC, G.R. No. 125303, June 16,
preferred, is not absolutely necessary to 2000)
satisfy the employee's right to be heard.
(Perez. v. Phil. Telegraph and Telephone Note: There is no formal dismissal. The Ee is
Company, G.R. No. 152048, April 7, 2009) placed in a situation by the Er such that his
continued employment has become unbearable.
Abandonment is incompatible with constructive
~ DISPROPORTIONATE PENALTY dismissal.

Q: What are the guidelines in determining Q: Reynaldo was hired by Geminilou

whether penalty imposed on Ee is proper? Trucking Service (GTS) as a truck driver to
haul and deliver products of San Miguel
A: Pure Foods Company, Inc. He was paid
1. Gravity of the offense P400 per trip and made 4 trips a day. He
2. Position occupied by the Ee claimed that he was requested by GTS to
3. Degree of damage to the employer sign a contract entitled "Kasunduan Sa
(Er) Pag-Upa ng Serbisyo" which he refused as
4. Previous infractions of the same he found it to alter his status as a regular
offense Ee to merely contractual. He averred that

166
 UST GOLDEN NOTES 2010

on account of his refusal to sign the

Kasunduan, his services were terminated A: No. Quinanola's transfer was not
prompting him to file a complaint before unreasonable since it did not involve a
the NLRC for constructive dismissal demotion in rank nor a change in her place of
against the GTS. Would Reynaldo's refusal work nor a diminution in pay, benefits and
to sign the Kasunduan adequately support privileges. It did not constitute a constructive
his allegation of constructively dismissal? dismissal. Furthermore, an employee's
security of tenure does not give him a vested
A: No. The test of constructive dismissal is right in his position as would deprive the
whether a reasonable person in the company of its prerogative to change his
employee's (Ee's) position would have felt assignment or transfer him where he will be
compelled to give up his job ~t;lnder, the most useful. (Philippine Japan Active Carbon
circumstances. In the present case, -the Corp. v. NLRC, G.R. No. 83239, Mar. 8, 1989)
records show that the lone piece of evidence
submitted by Reynaldo to substantiate his Q: Sangil was a utility man/assistant
claim of constructive dismissal is an unsigned steward of the passenger cruise vessel
copy of the Kasunduan. This falls way short of Crown odyssey under a one-year contract.
the required quantum of proof which is Sangil suffered head injuries after an
substantial evidence, or such relevant altercation with a Greek member of the
evidence as a reasonable mind might accept crew. He informed the captain that he no
as adequate to support a conclusion. longer intends to return aboard the vessel
Reynaldo was not dismissed, but that he for fear that further trouble may erupt
simply failed to report for work after an between him and the other Greek
altercation with a fellow driver. (Madrigalejos crewmembers of the ship. Was Sangil
vs. Geminilou Trucking Service, G.R. No. constructively dismissed?
179174, Dec. 24, 2008, J. Carpio-M_orales)
A: Yes. There is constructive dismissal where
Q: Flores, a conductor of JAM the act of a seaman in leaving ship was not
Transportation Co., Inc., had an accident voluntary but was impelled by a legitimate
where he had to be hospitalized for a desire for self-preservation or because of fear
number of days. Upon reporting back to the for his life Constructive dismissal does not
company he was told to wait. For several always involve diminution in payor rank but
days this continued and he was promised a may be inferred from an act of clear
route assignment which did not materialize. discrimination, insensibility or disdain by an Er
. Upon speaking to Personnel Manager may become unbearable on the part of the Ee
Medrano, he was told that he will be that it could foreclose any choice by him
accepted back to work but as a new except to forego his continued employment..
employee. Flores rejected the offer (Sunga Ship Management Phils., Inc. v.
because it would mean forfeiture of his 18 NLRC, G.R. No. 119080, April 14, 1998)
years of service to the company. Is the
offer for reinstatement as a new employee
(Ee) a constructive dismissal? PREVENTIVE SUSPENSION

A: Yes. Flores' re-employment as a new Ee Q: What is preventive suspension?

would be very prejudicial to him as it would
mean a demotion in rank and privileges, A: During the pendency of the investigation,
retirement benefits as his previous 18 years of the Er may place the Ee under preventive
service with the company would simply be suspension leading to termination when there
considered as non-existent. It amounts to is an imminent threat or a reasonable
constructive dismissal. (JAM Transportation possibility of a threat to the lives and
Co., Inc. v. Flores, G.R. No. 82829, Mar. 19, properties of the Er, his family and
1993) representatives as well as the offender's co-
workers by the continued service of the Ee.
Q: Quinanola was transferred from the
position of Executive Secretary to the Q: What is the duration of preventive
Executive Vice President and General suspension?
Manager to the Production Dep't as
Production Secretary. Quinanola rejected A: It should not last for more than 30 days.
the assignment and filed a complaint for The Ee should be made to resume his work
illegal dismissal due to constructive after 30 days. It can be extended provided the
dismissal. Did the transfer of Quinanola Ee's wages are paid after the 30-day period.
amount to constructive dismissal?

UNIVERSITY OF SANTO TOMAS f~". 167

Pacu(taa ae <Dereclio Civi] '9'
 LABOR RELATIONS: TERMINATION OF EMPLOYMENT: PROCEDURE

This period is intended only for the purpose of

investigating the offense to determine whether
he is to be dismissed or not. It is not a penalty.

Note: The Er may continue the period of

preventive suspension provided that he pays the
salary of the Ee.

If more than 1 month, the Ee must actually be

reinstated or reinstated in the payroll. Officers are
liable only if done with malice.

Q: Cantor and Pepito were preventively

suspended pending application for their
dismissal by Manila Doctor's Hospital after
being implicated by one Macatubal when
they refused to help him when he was
caught stealing x-ray films from the
hospital. Was the preventive suspension of
Cantor and Pepito proper?

A: Where the continued employment of an Ee

poses a serious and imminent threat to the life
and property of the employer or on his co-Ees,
the Ees' preventive suspension is proper. In
this case, no such threat to the life and·
property of the Er or of their co-Ee's is present
and they were merely implicated by the
Macatubal. (Manila Doctors Hospftal v. NLRC,
G.R. No 64897, Feb. 28, 1985)

Academics Committee
Chairperson: Abraham D. Genuino II
Vice-Chair for Academics: Jeannie A. Laurentino
Vice-Chair for Admin &Finance: Aissa Celine H. Luna
Vice-Chair for Lqyout & Design: Loise Rae G. Naval

Labor Law Committee

Subject Head' Lester Jay Alan E. Flores II
Assistant Suo/eel Head: Domingo B. Diviva V

Members:
Rene Francis P. Batalla
Diane Camilla R. Borja
Maria Krishna L. Dacayo-Garcia
Christian Nino A. Diaz
Angelo S. Diokno
Genesis R. Fulgencio
J eanelle C. Lee
Jemuel Paolo M. Lobo
Andrew W. Montesa
Maria Maica Angelika Roman

168
 UST GOLDEN NOTES 2010

r- ARTS. 283-284. AUTHORIZED CAUSES 6: Disease - must be incurable within 6

Q: What are the authorized causes of
termination by the employer (Er)?
A:
1. Installation of labor-saving devices
(a utomationlrobotics)
2. Redundancy (superfluity in the
performance of a particular work) -
exists where the servises ot an
employee (Ee) are in excess of what
is reasonably demanded by the
actual req'ts of the enterprise.
(Wiltshire File Co., Inc. v. NLRC, G.R.
No. 82249, Feb. 7, 1991)
Note: The redundancy should not have
been created by the Er.
3. Reorganization
Note: An Er is not precluded from
adopting a new policy conducive to a
more economical and effective
management, and the law does not
require that the Er should be suffering
financial losses before he can terminate
the services of the employee on the
ground of redundancy (DOLE Phil., Inc.
v. NLRC, GR. No. L-55413, July 25,
1983)
4. Retrenchment - cutting of expenses
and includes the reduction of
personnel; It is a management
prerogative, a means to protect and
preserve the Er's viability and ensure
his survival. To be an authorized
cause it must be affected in good
faith (GF) and for the retrenchment,
which is after all a drastic recourse
with serious consequences for the
livelihood of the Ee's or otherwise
laid-off.
Note: The phrase "to prevent losses"
means that retrenchment or termination
from the service of some Ees is
authorized to be undertaken by the Er
sometime before the anticipated losses
are actually sustained or realized.
Evidently, actual losses need not set in
prior to retrenchment. (Cajucom VII v.
TP Phils Cement Corp., et el, G.R. No.
149090, Feb. 11, 2005)
5. ClOSing or cessation of operation of
the establishment or undertaking -
must be done in good faith and not
for the purpose of circumventing
pertinent labor laws.
months and the continued
employment is prohibited by law or
prejudicial to his health as well as to
the health of his co-Ees with a
certification from the public health
officer that the disease is incurable
within 6 months despite due to
medication and treatment
Q: What are other authorized causes?
A:
1. Total and permanent disability of Ee
2. Valid application of union security
clause
3. Expiration of period in term of
employment
4. Completion of project in project
employment
5. Failure in probation
6. Relocation of business to a distant
place
7. Defiance of return-to work-order
8. Commission of Illegal acts in strike
9. Violation of contractual agreement
10. Retirement
Q: What are the procedural steps required
in termination of an employee for
authorized causes?
A:
1. Written Notice to DOLE 30 days prior
to the intended day of termination.
Purpose: To enable it to ascertain the
verity of the cause of termination.
2. Written notice to Ee concerned 30
days prior the intended date of
termination.
3. Payment of separation pay - Serious
business losses do not excuse the Er
from complying with the clearance or
report required in Art. 283 of the LC
and its IRR before terminating the
employment of its workers. In the
absence of justifying Circumstances,
the failure of the Er to observe the
procedural req'ts under Art. 284 taints
their actuations with bad faith if the
lay-off was temporary but then
serious business losses prevented
the reinstatement of respondents, the
Er's should have complied with the
req'ts of written notice.

UN!VERSITY OF SANTO TOMAS ".<.\..>. 169

PacuCtaa de CDereclio Civif .
 LABOR RELATIONS: TERMINATION OF EMPLOYMENT: AUTHORIZED CAUSES
i REDUNDANCY-
Q: What are the requisites of a valid
redundancy?
A:
1. Written notice served on both the
employees (Ees) and the DOLE at
least 1 month prior to separation from
work
2. Payment of separation pay equivalent
to at least 1 month payor at least 1
month pay for every year of service,
whichever is higher
3. Good faith in abolishing redundant
position
4. Fair and reasonable criteria in
ascertaining what positions are to be
declared redundant:
1. Less preferred status, e.g.
temporary Ee
2. Efficiency and
3. Seniority
Q: Ong, a Sales Manager of Wiltshire File
Co., Inc., was informed of the termination
of his employment due to redundancy upon
returning from a trip abroad. Ong maintains
that there can be no redundancy since he
was the only person occupying his position
in the company.
Is there redundancy even though Ong was
the only one occupying his position.
A: Redundancy in an employer's (Er's)
personnel does not necessarily or even
ordinarily refer to duplication of work. The
characterization ofOng's services as no longer
necessary or sustainable and therefore
properly terminable, was an exercise of
business judgment on the part of Wiltshire.
Furthermore, 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 over hiring of workers,
decreased volume of business, or dropping of
a particular' product line or service activity
previously manufactured or undertaken by the
enterprise. The Er has no legal obligation to
keep in its payroll more employees that are
necessary for the operation of its business.
(Wiltshire File Co., Inc. v. NLRC, GR No.
82249, Feb. 7, 1991)
RETRENCHMENT
Q: What are the circumstances that must
be present for a valid retrenchment?
A:
1. The losses expected should be
substantial and not merely de minimis
in extent - If the loss purportedly
sought to be forestalled by
retrenchment is clearly shown to be
insubstantial and inconsequential in
character, the bona fide nature of the
retrenchment would appear to be
seriously in question.
2. The substantial loss apprehended
must be reasonably imminent - as
such imminence can be perceived
objectively and in good faith by the
employer (Er). There should be a
certain degree of urgency for the
retrenchment.
3. It must be reasonably necessary and
likely to prevent the expected losse -
The Er should have taken' other
measures prior or parallel to
retrenchment to forestall losses such
as cutting other costs than labor
costs.
4. The alleged losses if already realized,
and the expected imminent losses
sought to be forestalled, must be
proved by sufficient and convincing
evidence - The reason for requiring
this quantum of proof is readily
apparent: any less exacting standard
of proof would render too easy the
abuse of this ground for termination
of services of employees. (Lopez
Sugar Corp. v. Federation of Free
Workers, GR No. 75700-01, Aug.
30, 1990)
Note: The losses which the company may suffer
or is suffering may be proved by financial
statements audited by independent auditors
(Asian Alcohol Corporation v. NLRC, GR. No.
131108, Mar. 25, 1999)
 UST GOLDEN NOTES 2010

Q: What are the requisites of a valid from closing shop. In determining

retrenchment? these issues, management plays a pre-
eminent role. The characterization of positions
A: as redundant is an exercise of business
1. Written notice served on both the Ee judgment on the part of the Er. It will be
and the DOLE at least 1 month prior upheld as long as it passes the test of
to the intended date of retrenchment arbitrariness. (2001 Bar Question)
2. Payment of separation pay equivalent
to at least one month payor at least Q: What is the difference between
1/2 month pay for every year of redundancy and retrenchment?
service, whichever is higher
3. Good faith ~ ~ A: In redundancy, company has no financial
4. Proof of expected or actual losses' problems, unlike in retrenchment where the
5. The employer used fair and company will suffer financial losses.
reasonable criteria in ascertaining
who would be retained among the Q: Philippine Tuberculosis Society, Inc.
Ees, such as status, efficiency, retrenched one hundred 116 Ees after
seniority, physical fitness, age, and incurring deficits amounting to 9.1 million
financial hardship of certain workers pesos. Aside for retrenching some of its
(Asian Alcohol Corp. v. NLRC, GR. Ees, the company also implemented cost
No. 131108, Mar. 25, 1999). cutting measures to prevent such losses
for increasing and minimizing it. The NLRC
Q: What are the criteria in selecting ruled that the retrenchment was not valid
employees (Ees) to be retrenched? on the ground that the Society did not take
seniority into account in their selection.
A: There must be fair and reasonable criteria Was the retrenchment done by the Society
to be used in selecting Ees to be' dismissed not valid for its failure to follow the criteria
such as: laid down by law?
1. Less preferred status;
2. Efficiency rating; A: No. The Society terminated the
3. Seniority. (Phil. Tuberculosis Society, employment of several workers who have
Inc. v. National Labor Union, GR. No. worked with the Society for great number of
115414, Aug. 25, 1998) years without consideration for the number of
years of service and their seniority indicates
Q: What is the "last in first out (LIFO)" that they had been retained for such a long
rule? time because of loyal and efficient service. The
burden of proving the contrary rest on the
A: It applies in the termination of employment Society. (Phil. Tuberculosis Society, Inc. v.
in the line of work. What is contemplated in the National Labor Union, G.R. No. 115414, Aug.
LIFO rule is that when there are two or more 25, 1998)
Ees occupying the same position in the
company affected by the retrenchment Q: Due to mounting losses the former
program, the last one employed will owners of Asian Alcohol Corporation sold
necessarily be the first one to go. (Maya its stake in the company to Prior Holdings.
Farms Ees' Organization v. NLRC, G.R. No. Upon taking control of the company and to
106256, Dec. 28, 1994) prevent losses, Prior Holdings
implemented a reorganization plan and
Q: Is the seniority rule or "last in first other cost-saving measures and one of
out" policy to be strictly followed in them is the retrenchment of 117 employees
effecting a retrenchment or redundancy (Ees) of which some are members of the
program? union and the majority held by non-union
members. Some retrenched workers filed a
A: Again, in Asian Alcohol Corp., the SC complaint for illegal dismissal alleging that
stated that with regard the policy of "first the retrenchment was a subterfuge for
in, last out" in choosing which positions to union busting activities.
declare as redundant or whom to retrench to
prevent further business losses, there is no Was the retrenchment made by Asian
law that mandates such a policy. The reason Alcohol valid and justified?
is simple enough. A host of relevant factors
come into play in determining cost efficient A: Yes. Even though the bulk of the losses
measures and in choosing the Ees who will were suffered under the old management and
be retained or separated to save the company continued only under the new jnanaqernent
•..••...
UilllVERSITY OF SANTO T OMAS ~. ,.• 171
Pacu[taa ae i])erecno CiviC .•.
 LABOR RELATIONS: TERMINATION OF EMPLOYMENT: AUTHORIZED CAUSES

ultimately the new management of Prior grant of separation benefits "in case of
Holdings will absorb such losses. The law closures or cessation of operation" of business
gives the new management every right to establishments "not due to serious business
undertake measures to save the company losses or financial reverses." Where, the
from bankruptcy. (ASian Alcohol Corp. v. closure then is due to serious business losses,
NLRC, G.R. No. 131108, Mar. 25, 1999) the LC does not impose any obligation upon
the employer to pay separation benefits.
(Galaxie Steel Workers Union, et al. VS.NLRC,
:c. ' • <:': Cl.OSURE . . . Galaxie Steel Corp., G.R. No. 165757, Oct. 17,
2006, J. Carpio-Morales)
Q: What are the requisites of a valid
closure? Q: Does the written notice posted by
Galaxie on the bulletin board sufficiently
A: comply with the notice req't under Art. 283
1. Written notice served on both the of the LC?
employees (Ees) and the DOLE at
least 1 month prior to the intended A: No. In order to meet the purpose, service of
date of closure the written notice must be made individually
2. Payment of separation pay equivalent upon each and every Ee of the company.
to at least one month payor at least However, the Court held that where the
1/2 month pay for every year of dismissal is for an authorized cause, non-
service, whichever is higher, except compliance with statutory due process should
when closure is due to serious not nullify the dismissal, or render it illegal, or
business losses ineffectual. Still, the employer should
3. Good faith indemnify the Ee, in the form of nominal
4. No circumvention of the law damages, for the violation of his right to
5. No other option available to the Er statutory due process. (Galaxie Steel Workers
Union, et al. VS. NLRC, Galaxie Steel Corp.,
Q: What is the test for the validity of G.R. No. 165757, Oct. 17, 2006, J. Carpio-
closure or cessation of establishment or Morales)
undertaking?
Q: Rank-and-flle workers of SIMEX filed a
A: The ultimate test of the validity of closure or petition for direct certification and affiliated
cessation of establishment or undertaking is with Union of Filipino Workers (UFW).
that it must be bona fide in character. And the Subsequently, 36 workers of the
burden of proving such falls upon the Er. company's "Iumpia" dep't and 16 other
(Capitol Medical Center, Inc. vs. Dr. Meris, workers from other dep'ts were effectively
G.R. No. 155098, Sep. 16, 2005, J. Carpio- locked out when their working areas were
Morales) cleaned out. The workers through UFW
filed a complaint for unfair labor practices
Q: When is separation pay required in case against the company. SIMEX then filed a
of closure? notice of permanent shutdownltotal cosure
of all units of operation in the
A: Only where closure is not due to serious establishment with the DOLE allegedly due
business losses nor due to an act of gov't. to business reverses brought about by the
(North Davao Mining Corp v. NLRC, G.R. No. enormous rejection of their products for
112546, Mar. 13, 1996; NFL v. NLRC, G.R. export to the United States.
No. 127718, Mar. 2, 2000)
Was the closure warranted by the alleged
Q: Galaxie Steel Corp. decided to close business reverses?
down because of serious business loses. It
filed a written notice with the DOLE A: The closure of a business establishment is
informing its intended closure and the a ground for the termination of the services of
termination of its employees (Ees). It any employee unless the closing is for the
posted the notice of closure on the purpose of circumventing the provisions of the
corporate bulletin board. law. But, while business reverses can be a just
cause for terminating employees, they must be
Are Ees entitled to separation pay? sufficiently proved. In this case, the audited
financial statement of SIMEX clearly indicates
A: No. Galaxie had been experiencing serious that they actually derived earnings. Although
financial losses at the time it closed business the rejections may have reduced their earnings
operations. Art. 283 of the LC governs the they were not suffering losses. There is no

172
 UST GOLDEN NOTES 2010

question that an employer may reduce its work 2. Where the transferee voluntarily
force to prevent losses but it must be serious, agrees to do so. (Marina Port
actual and real otherwise this ground for Services, Inc. v. Iniego, GR. No.
termination would be susceptible to abuse by 77853, Jan. 22, 1990)
scheming employers who might be merely
feigning business losses or reverses in their Q: Marikina Dairy Industries, Inc. decided
business ventures to ease out employees. to sell its assets and close operations on
(Union of Filipino Workers v. NLRC, G.R. No. the ground of heavy losses. The unions
90519, Mar. 23, 1992) alleged that the financial losses were
imaginary and the dissolution was a
Q: Carmel craft Corporation closed it scheme maliciously designed to evade its
business operations allegedty due to legal and social obligations to its
losses of P1, 603.88 after the Carmeicraft employees (Ees). The unions want the
Ees Union filed a petition for certification buyers of the corporations assets
election. Carmel craft Union filed a restrained to operate unless the members
complaint for illegal lockout and ULP with of the unions were the ones hired to
damages and claim for employment operate the plant under the terms and
benefits. Were the losses incurred by the conditions specified in the collective
company enough to justify closure of its bargaining agreements.
operations?
Is the buyer of a company's assets
A: The determination to cease operations is a required to absorb the Ees of the seller?
prerogative of management that is usually not
interfered with by the State as no business can A: There is no law requiring that the purchaser
be required to continue operating at a loss of a company's assets should absorb its Ees
simply to maintain the workers in employment. and the most that can be done for reasons of
That would be a taking of property without due public policy and social justice was to direct
process of law which the employer has a right that buyers of such assets to give preference
to resist. But where it is manifest that the to the qualified separated Ees in the filling up
closure is motivated not by a desire to avoid of vacancies in the facilities of the buyer. (MOil
further losses but to discourage the workers Supervisors & Confidential Ees Ass'n (FFW) v.
from organizing themselves into a union for Presidential Assistant on Legal Affairs, GR.
more effective negotiations with management, Nos. L-45421-23, Sep. 9, 1977)
the State is bound to intervene. The losses of
less than P2,OOO for a corporation capitalized
at P3 million cannot be considered serious
enough to call for the closure of the company.
(Carmelcraft Corp. v. NLRC, G.R. No. 90634-
35, June 6, 1990)

Q: Is the transferee of the closed

corporation required to absorb the
employees (Ees) of the old corporation?

A:
GR: There is no law requiring a bona fide
purchaser of assets of an on-going concern
to absorb in its employ the Ee's of the latter
except when the transaction between the
parties is colored or clothed with bad faith
(BF). In this case there is no BF since in
fact the assets were sold by Mabuhay to
pay for its obligations to its workers.
(Sundowner Dev't Corp. v. Orilon, G. R. No.
82341, Dec. 6, 1989)

XPNs:
1. Where the transferee was found to be

~.
merely an alter ego of the different
merging firms. (Filipinas Port
Services, Inc. v. NLRC, G.R. No.
97237, A'Jg. 16, 1991)

UNIVERSITY OF SANTO TOMAS

PacuCtaa ae Dereclio CiviC
.\.,. 173
 LABOR RELATIONS: TERMINATION OF EMPLOYMENT: AUTHORIZED CAUSES

Q: What is the difference between closure determination by the Er of the gravity or

and retrenchment? extent of the Ee's illness and thus defeat the
public policy on the protection of labor.
A: (Manly Express v Payong, GR. No. 167462,
CLOSURE RETRENCHMENT Oct.25, 2005)
Is the reversal of Is the reduction of
fortune of the Er personnel for the Termination of services for health reasons
whereby there is a purpose of cutting down must be effected only upon compliance with
complete cessation of on costs of operations in the above requisites. The req't for a medical
business operations terms of salaries and certificate under Art. 284 of the LC cannot be
to prevent further wages resorted to by an dispensed with; otherwise, it would sanction
financial drain upon Er because of losses in the unilateral and arbitrary determination by
an Er who cannot pay operation of a business the Er of the gravity or extent of the Ee's
anymore his Ees occasioned by lack of illness and thus defeat the public policy on
since business has work and considerable the protection of tabor. (Syet. al v. CA, G.R.
already stopped. reduction in the volume No. 142293, Feb. 27, 2003)
of business.
As in the case of Q: What is the procedure in terminating an
retrenchment, however, employee (Ee) on the ground of disease?
for the closure of a
One of the
business or a A:
prerogatives of
department due to 1. The employer (Er) shall not terminate
management is the
serious business losses his employment unless:
decision to close the
to be regarded as an a. There is a certification by a
entire establishment
authorized cause for competent public health authority
or to close or abolish
terminating Ees, it must that
a department or
be proven that the b. The disease is of such nature or
section thereof for
losses incurred are at such a stage that it cannot be
economic reasons,
substantial and actual or
such as to minimize cured within a period of 6 months
reasonably imminent;
expenses and reduce even with proper medical
that the same increased
capitalization. treatment.
through a period of time;
and that the condition of
the company is not likely 2. If the disease or ailment can be cured
to improve in the near within the period, the Er shall not
future. terminate the Ee but shall ask the Ee
LC provides for the to take a leave. The Er shall reinstate
Does not obligate the such Ee to his former position
payment of separation
Er for the payment of
package in case of immediately upon the restoration of
separation package if
retrenchment to prevent his normal health. (Sec. 8, Rule I,
there is closure of
losses. Book VI, IRR)
business due to
serious losses.
Q: Is an employee suffering from a disease
entitled to reinstatement?

. DISEASE . A: Yes, provided he presents a certification by

a competent public health authority that he is
Q: When is disease a ground for dismissal? fit to retum to work. (Cebu Royal Plant v.
Deputy Minister, G.R. No. L-58639,' Aug. 12,
A: Where the Ee suffers from a disease, and: 1987)
1. His continued employment is
prohibited by law or prejudicial to his Q: Is the req't of a medical certificate
health or to the health of his co-Ees. mandatory?
(Sec.8, Rule I, Book VI, IRR)
2. With a certification by competent A: Yes, it is only where there is a prior
public health authority that the certification from a competent public authority
disease is incurable within 6 months that the disease afflicting the employee sought
despite due medication and to be dismissed is of such nature or at such
treatment. (Solis v. NLRC, GR No. stage that it cannot be cured within 6 months
116175, Oct. 28,1996) even with proper medical treatment that the
latter could be validly terminated from his job.
Note: The req't for a medical certification (Tan v. NLRC, G. R. No. 116807, April 14,
cannot be dispensed with; otherwise, it 1997)
would sanction the unilateral and arbitrary

174
 UST GOLDEN NOTES 2010
Note: Termination from work on the sole basis of Q: Discuss the rules on separation pay with
actual perceived or suspected HIV status is regard to each cause of termination.
deemed unlawful. (Sec. 35, R.A. 8504 HIV/AIDS
Law)
A:
CAUSE OF
Q: Anna Ferrer has been working as TERMINATION SEPARATION PAY
bookkeeper at Great Foods, Inc., which Equivalent to at least 1
operates a chain of high-end restaurants month payor at least 1
throughout the country, since 1970 when it month pay for every year
was still a small eatery at Binondo. In the Automation
of service, whichever is
early part of the year 2003, Anna, who was higher
already 50 years old, reported $or w.prk Equivalent to at least 1
after a week-long vacation in her province. month payor at least 1
It was the height of the SARS scare, and month pay for every year
Redundancy
management learned that the first of service, whichever is
confirmed SARS death case in the Phils, a higher
"balikbayan" nurse from Canada, is a Equivalent to 1 month pay
townmate of Anna. Immediately, a or at least Y, month pay
Retrenchment
memorandum was issued by management for every year or service
terminating the services of Anna on the Closures or
Equivalent to at least 1
ground that she is a probable carrier of cessation of
month payor at least 1
operation not due
SARS virus and that her continued month pay for every year
to serious
employment is prejudicial to the health of of service (if due to severe
business
her co-Ees. Is the action taken by the financial losses, no
losses/financial
employer (Er) justified? separation pay
reverses
Equivalent to at least 1
A: The Er's act of terminating the employment month payor at least Y,
of Anna is not justified. There is no showing month pay for every year
that said employee is sick with SARS, or that Disease
of service, whichever is
she associated or had contact with the higher
deceased nurse. They are merely town mates.
Furthermore, there is no certification by a Note: A fraction of at least 6 months shall be
competent public health authority that the considered 1 whole year.
disease is of such a nature or such a stage that
it cannot be cured within a period of 6 months There is no separation pay when the closure is
even with proper medical treatment. due to an act of the gov'!.
(Implementing Rules, Book VI, Rule 1, Sec. 8,
LC) (2004 Bar Question) Q: What is the purpose of the 2 notices
served to the Ee and DOLE 1 month prior to
termination?

A:
1. To give the Ees some time to prepare
for the eventual loss of their jobs and
their corresponding income, look for
other employment and ease the
impact of the loss of their jobs.
2. To give DOLE the opportunity to
ascertain the verity of the alleged
cause of termination. (Phil. Telegraph
& Telephone Corp. v. NLRC, G.R. No.
147002, April 15, 2005)

Note: Notice to both the Ees concerned and the

DOLE are mandatory and must be written and
given at least 1 month before the intended date of
retrenchment - and the fact that the Ees were
already on temporary lay-off at the time notice
should have been given to them is not an excuse
to forego the 1-month written notice. (Sebuguero
V. NLRC, G.R. No. 115394, Sep. 27, 1995)

UNIVERSITY OF SANTO TOMAS

Pacu{tati tie ([)ereclio Ci'f)i{
.~ 175
 LABOR RELATIONS: TERMINATION OF EMPLOYMENT: AUTHORIZED CAUSES

Q: DAP Corp. ceased its operation due to

the termination of its distribution
agreement with Int'I Distributors Corp.
which resulted in its need to cease its
business operations and to terminate the
employmentof its Ees. Marcial et al. filed a
complaint for illegal dismissal and for
failure to give the Ees written notices
regarding the -termination of their
employment. On the other hand, DAP
claims that their Ees actually knew of the
termination therefore the written notices
were no longer required. Are written
notices dispensed with when the Ees have
actual knowledgeof the redundancy?

A: The Ees' actual knowledge of the

termination of a company's distributorship
agreement with another company is not
sufficient to replace the formal and written
notice required by law. In the written notice,
the Ees are informed of the specific date of the
termination, at least a month prior to the date
of effectivity, to give them sufficient time to
make necessary arrangements. In this case,
notwithstanding the Ees knowledge of the
cancellation of the distributorship agreement,
they remained uncertain about the status of
their employment when DAP failed to formally
inform them about the redundancy. (DAP
Corp. v. CA, G.R. No. 165811, Dec. 14,2005)

Academics Committee
Chairperson: Abraham D. Genuine II
Vice-Chair jor Academics: Jeannie A. Laurentino
Vice-Chair jor Admin & Finance: .AissaCeline H. Luna
Vice-Chair for Layout & Design: Loise Rae G. Naval

Labor Law Committee

SlIbject Head: Lester] ay Alan E. Flores II
Assistant SlIbject Head' Domingo B. Diviva V

Members:
Rene Francis P. Batalla
Diane Camilla R. Borja
Maria Kristina L. Dacayo-Garcia
Christian Nino A. Diaz
Angelo S. Diokno
Genesis R. Fulgencio
Jeanelle C. Lee
Jemuel Paolo M. Lobo
Andrew W. Montesa
Maria Maica Angelika Roman

.·~.~.~7
''':'Ar'

176
 UST GOLDEN NOTES 2010

, CONSEQUENCES OF DISMISSAL . DISMISSAL WITHOUT CAUSE .

" DISMISSAL WITH CAUSE Q: What are the remedies available to a

illegally dismissed employee (Ee)?
Q: When is a dismissal deemed valid?
A: An Ee who is unjustly dismissed from wo
A:. If the same was effected: shall by entitled to:
1. For a just or authorized cause; and 1. Reinstatement without loss
2. With due process seniority rights and
2. Full backwages. (Sec. 3, Rule I, Book
Q: Distinguish the status of dismissals vis- VI,IRR)
a-vis the presence of a valid cau\Se and: due 3. Separation pay in lieu f
process. reinstatement, if the latter is no longe
feasible
A:
With Due Status of Q: What is reinstatement?
! With Cause
Process Dismissal
Yes Yes Valid A: It is the restoration of the employee to the
No Yes lIIeaal state from which he has been unjustly
No No lileoal removed or separated without loss of senior' y
Valid, but with rights and other privileges.
payment of
Yes No
nominal Q: What are the forms of reinstatement?
darnaqes
A:
Q: What is the amount of nominal damages 1. Actual or physical - the em plo _ee
that an Ee dismissed with cause but (Ee) is admitted back to work
without due process is entitled to? 2. Payroll- the Ee is merely reinstateo
in the payroll
A:
1. Authorized causes - P50, 000 Note: An order of reinstatement by the LA is or
2. Just causes - P30, 000 the same as actual reinstatement of a dismisseo
or separated Ee. Thus, until the Er continuousl
Note: In Agabon v. NLRC, G.R. No. 158693, fails to actually implement the reinstateme
Nov. 17, 2004, it was held that when dismissal is aspect of the decision of the LA, their obligati
for just or authorized cause but due process was to the illegally dismissed Ee, insofar as accrueo
not observed, the dismissal should be upheld. backwages and other benefits are concerned,
However, the employer (Er) should be held liable continues to accumulate. It is only when the
for non-compliance with the procedural req'ts of illegally dismissed Ee receives the separation pa
due process (e.g. damages). The Agabon ruling (in case of strained relations) that it could be
was modified by JAKA Food Processing v, Pacot claimed with certainty that the Er-Ee realtions hi
(G.R. No. 515378, Mar. 28, 2005) where it was has formally ceased thereby precluding t e
held that: possibility of reinstatement. In the meantime, t e
iII~ally dismissed Ees entitlement to backwages,
1. If based on just cause (Art. 282) but the 13 month pay, and other benefits subsists. U Itl
Er failed to comply with the notice req't, the payment of separation pay is carried out, t e
the sanction to be imposed upon him Er should not be allowed to remain unpunished
should be tempered because the for the delay, if not outright refusal, t
dismissal process was, in effect, immediately execute the reinstatement aspect -
initiated by an act imputable to the Ee; the LA's decision.
and
2. If based on authorized causes (Art. 283) Further, the Er cannot refuse to reinstate the
but the Er failed to comply with the illegally dismissed Ee by claiming that the latter
notice req't, the sanction should be had already found a job elsewhere. Minimum
stiffer because the dismissal process wage earners are left with no choice after they
was initiated by Er's exercise of his are illegally dismissed from their employment, but
management prerogative. to seek new employment in order to earn a
decent living. Surely, we could not fault them for
their perseverance in looking for and eventuall
securing new employment opportunities instead
of remaining idle and waiting the outcome of the
case. (Triad Security & Allied Services, Inc. et al
v. Ortega, G.R. No. 160871, Feb. 6, 2006).
 LABOR RELATIONS: CONSEQUENCES OF DISMISSAL

Q: What are Arts. 223 from 279 of the LC? order of reinstatement and it is mandatory on
the Er to comply therewith. (Gercis vs. PAL,
A: G.R. No. 164856, Jan20, 2009)
: Art. 279 _ Art. 223
May be availed of as Q: What is the effect of the reversal of LA's
Presupposes that the
soon as the labor decision to the reinstated employee (Ee)?
judgment has already
arbiter renders a
become final and
judgment declaring A: If the decision of the LA is later reversed on
executory.
that the dismissal of appeal upon the finding that the ground for
the Ee is illegal and
Consequently, there is dismissal is valid, then the Er has the right to
ordering said
nothing left to be done require the dismissed Ee on payroll
reinstatement. It may
except the execution reinstatement to refund the salaries he/she
be availed of even
thereof. rec~ived while the case was pending appeal,
pending appeal
or It can be deducted from the accrued
Note: An award or order for reinstatement is self- benefits that the dismissed Ee was entitled to
executory. It does not require the issuance of a receive from the employer under existing laws,
.writ of execution. (Pioneer Texturizing Corp. v. CSA provisions, and company practices .
NLRC, G.R. No. 118651, Oct. 16, 1997) However, if the Ee was reinstated to work
Q: PAL dismissed Garcia, et al. for violating during the pendency of the appeal, then the Ee
PAL's Code of Discipline for allegedly is entitled to receive the compensation
sniffing shabu in PAL's Technical Center received for actual services rendered without
Toolroom Section. Garcia, et al. then filed need of refund (Cffibank v. NLRC, G.R. No.
for illegal dismissal and damages where 142732-33, Dec. 4, 2007).
the Labor Arbiter (LA) ordered PAL to
Immediately reinstate the Garcia, et al. On Q: Maya court order the reinstatement of a
appeal, the NLRC reversed the decision dismissed employee (Ee) even if the prayer
and dismissed Garcia's et al. complaint for of the complaint did not include such
lack of merit Garcia's et al. motion for relief?
reconsideration was denied by the NLRC. It
affirmed the validity of the writ and the A: Yes. So long as there is a finding that the
notice Issued by the LA but suspended and Ee was illegally dismissed, the court can order
referred the action to the Rehabilitation the reinstatement of an Ee even if the
Receiver for appropriate action. Whether complaint does not include a prayer for
Garcia, et al. may collect their wages reinstatement, unless, of course the Ee has
during the period between the LA's order of waived his right to reinstatement. By law, an
reinstatement pending appeal and the Ee who is unjustly dismissed is entitled to
NLRC decision overturning that of the LA? reinstatement among others. The mere fact
that the complaint did not pray for
A: Par. 3 of Art. 223 of the LC provides that reinstatement will not prejudice the Ee,
the decision of the LA reinstating a dismissed because technicalities of law and procedure
or separated Ee, insofar as the reinstatement are frowned upon in labor proceedings
aspect is concerned, shall immediately be (Pheschem Industrial Corp. v. Moldez, G.R.
executory, pending appeal. No. 1161158, May 9,2005).

Even if the order of reinstatement of the LA is Q: What happens if there is an Order of

reversed on appeal, it is obligatory on the part
of the Er to reinstate and pay the wages of the
dismissed Ee during the period of appeal until
reversal by the higher court. On the other
hand, if the Ee has been reinstated during the
appeal period and such reinstatement order is
reversed with finality, the Ee is not required to
reimburse whatever salary he received for he
is entitled to such, more so if he actually
rendered services during the period.
In other words, a dismissed Ee whose case
was favorably decided by the LA is entitled to
receive wages pending appeal upon
reinstatement, which is immediately
executory. Unless there is a restraining order,
it is ministerial upon the LA to implement the
Reinstatement but the position is no longer
available?
A: The employee (Ee) should be given a
substantially equivalent position. If no
substantially equivalent position is available,
reinstatement should not be ordered because
that would in effect compel the employer to do
the impossible. In such a situation, the Ee
should merely be given a separation pay
consisting of 1-month salary for every year of
service (GroJier Int'l Inc. v. ELA, G.R. No.
83523, Aug. 31, 1989).

liB
 UST GOLDEN NOTES 2010

Q: What are the instances when separation 2. Dismissal for a non-existent cause -
pay in lieu of reinstatement proper? the Er does not intend to dismiss t e
Ee but for a specific.zcause whic
A: Proceeds from an illegal dismissal wherein turns out to be false or non-existen:.
reinstatement is ordered but cannot be carried (Pedroso v. Castro, G.R. No. 7036 .
out as in the following cases: Jan. 30, 1986)

1. Reinstatement cannot be effected in Q: What is the remedy in case the

view of the long passage of time or dismissal was for a non-existent cause?
because of the realities of the
situation. A: An employee who is separated from wor'
2. It would be inimical to the~emplo¥ers' without just cause shall be reinstated to his
interest. former position, unless such position no longe
3. When reinstatement is no longer exists at the time of his reinstatement, in whic
feasible. case he shall be given a substantially
4. When it will not serve the best equivalent position in the same establishme
interest of the parties involved. without loss of seniority rights. (Sec. 4[a), Rule
5. Company will be prejudiced by I, Book VI, IRR)
reinstatement.
6. When it will not serve a prudent Q: Javier, an Ee for Standard Electric
purpose. Manufacturing Corporation, was charged
7. When there is resultant strained with rape and was detained. Standard
relation (applies to both confidential Electric moved to dismiss him for being
and managerial employees (Ees) absent without leave and for committing
only). rape. Upon acquittal, Javier reported for
8. When the position has been work but standard Electric refused to
abolished (applies • to both accept him back. Was Standard Electric's
managerial, supervisory and rank- act valid?
and-file Ees).
A: No. The trial court dismissed the case 0
Q: How can separation pay be viewed? insufficiency of evidence and such ruling is
tantamount to an acquittal of the cri e
A: Under present laws and jurisprudence, charged and proof that Javier's arrest a
separation pay may be viewed in 4 ways: detention was without factual and legal basis
1. In lieu of reinstatement in illegal in the first place. Standard Electric's ac .
dismissal cases, where Ee is ordered dismissing Javier on committing rape wit 0
reinstated but reinstatement is not trial shows that the company prejudged i
feasible. and preempted the ruling of the RTC ara
2. As Er's statutory obligation in cases adjudged Javier guilty without due process '
of legal termination due to authorized law. While it may be true that after
causes under Art. 283 and 284 of the preliminary investigation of the complai
LC. probable cause, for rape was found a
3. As financial assistance, as an act of respondent Javier to be detained, ese
social justice and even in case of cannot be made as legal bases for immedia e
legal dismissal under Art. 282 of the termination of his employment. (Standa
LC. Electric Manufacturing Corp. v. Standa c:
4. As employment benefit granted in Electric Ees Union, G.R. No. 166111 Aug. 25
CSA or company policy. (Po quiz, 2005)
2005)
Q: Is an illegally dismissed Ee entitled t
Q: What is the difference between a reinstatement as amatter of right?
dismissal without cause and dismissal for
a non-existent cause? A:
GR: Yes.
A:
1. Dismissal wfthout cause - It is the XPN:
intention of the Er to dismiss his Ee 1. Where reinstatement is not feasi c
for no cause whatsoever, in which expedient or practical, as w eOB
case the termination pay law would reinstatement would only exacer a e
apply. the tension and strained relatio s
between the parties, or

UNIVERSITY OF SANTO TOMAS

Pacu{taa de iDerecho CiviC
 LABOR RELATIONS: CONSEQUENCES OF DISMISSAL

2. Where the relationship between the Besides, no strained relations should arise
Er and Ee has been unduly strained from a valid and legal act of asserting one's
by reason of their irreconcilable right; otherwise an Ee who shall assert his
differences, particularly where the right could be easily separated from the
illegally dismissed Ee held a service, by merely paying his separation pay
managerial or key position in the on the pretext that his relationship with his
company employer (Er) had already become _strained.
(Globe Mackay Cable 8, Wire Corp. v. NLRC,
Note: In such cases, it would be more G.R. No. 82511, Mar. 3, 1992)
prudent to order payment of separation
pay instead of reinstatement. (Quijano Q: Respondents are licensed drivers of
v. Mercury Drug Corporation, G.R. No. public utility jeepneys owned by Moises
126561, July 8, 1998) Capili. When Capili assumed ownership
and operation of the jeepneys, the drivers
Q: What is the doctrine of strained were required to sign individual contracts
relations? of lease of the jeepneys. The drivers'
gathered the impression that signing the
. A: When the Er can no longer trust the Ee and contract was a condition precedent before
vice versa, or there were imputations of bad they could continue driving. The drivers
faith to each other, reinstatement could not stopped plying their assigned routes and a
effectively serve as a remedy. This doctrine week later filed with the Labor Arbiter a
applies only to positions which require trust complaint for illegal dismissal praying not
and confidence (Globe Mackay v. NLRC, G.R. for reinstatement but for separation pay.
No. 82511, March 3, 1992). Are the respondents entitled to separation
pay?
Under the circumstances where the
employment relationship has become so A: No. When drivers voluntarily chose not to
strained to preclude a harmonious working return to work anymore, they must be
relationship and that all hopes at reconciliation considered as having resigned from their
are naught after reinstatement, it would be employment. The common denominator of
more beneficial to accord the Ee backwages those instances where payment of separation
and separation pay. pay is warranted is that the employee was
dismissed by the employer. (Capili v. NLRC,
Q: What must be proven before the G.R. 117378, Mar. 26, 1997)
principle of strained relations can be
applied to a particular case? Q: Two groups of seasonal workers
claimed separation benefits after the
A: closure of Phil. Tobacco processing plant
1. The Ee concerned occupies a in Balintawak and the transfer of its
position where he enjoys the trust tobacco operations to Candon, tlocos Sur.
and confidence of his Er; and Phil. Tobacco refused to grant separation
2. That it is likely that if reinstated, an pay to the workers belonging to the first
atmosphere of antipathy and batch (Lubat group), because they had not
antagonism may be generated as to been given work during the preceding year
adversely affect the efficiency and and, hence, were no longer in its employ at
productivity of the Ee concerned. the time it closed its Balintawak plant.
(Globe Mackay Cable & Wire Corp. v. Likewise, it claims exemption from
NLRC G.R. No. 82511, Mar. 3, 1992) awarding separation pay to the second
batch (Luris group), because the closure of
Q: Does the doctrine of strained its plant was due to "serious business
relationship always bar reinstatement in all losses," as defined in Art. 283 of the LC.
cases? Both labor agencies held that the Luris and
Lubat groups were entitled to separation
A: No. The doctrine should be applied on a pay equivalent to 1/2 month salary for
case to case basis, based on each case's every of service, provided that the Ee
peculiar conditions and not universally. worked at least 1 month in a given year. Is
Otherwise, reinstatement can never be the separation pay granted to an illegally
possible simply because some hostility is dismissed Ee the same as that provided
invariably engendered between the parties as under Art. 283 of the LC in case of
a result of litigation. That is human nature. retrenchment to prevent losses?
(Anseor Transport v. NLRC, G.R. No. 85894,
Sept. 28, 1990)
 UST GOLDEN NOTES 2010

A: No. The separation pay awarded to Q: What is the basis of awarding

employees due to illegal dismissal is different backwages to an illegally dismissed
from the amount of separation pay provided for employee (Ee)?
in Art. 283 of the LC. Prescinding from the
above, Phil. Tobacco is liable for illegal A: The payment of backwages is generally
dismissal and should be responsible for the granted on the ground of equity. It is a form of
reinstatement of the Lubat group and the relief that restores the income that was lost by
payment of their backwages. However, since reason of the unlawful dismissal; the grant
reinstatement is no longer possible as Phil. thereof is intended to restore the earnings that
Tobacco have already closed its Balintawak would have accrued to the dismissed Ee
plant, members of the said group should during the period of dismissal until it is
instead be awarded normal sep'\'jation pay (in determined that the termination of employment
lieu of reinstatement) equivalent to at least one is for a just cause. It is not private
month pay, or one month pay for every year of compensation or damages but is awarded in
service, whichever is higher. It must be furtherance and effectuation of the public
stressed that the separation pay being objective of the LC. Nor is it a redress of a
awarded to the Lubat group is due to illegal private right but rather in the nature of a
dismissal; hence, it is different from the command to the employer to make public
amount of separation pay provided for in reparation for dismissing an Ee either due to
Article 283 in case of retrenchment to prevent the former's unlawful act or bad faith. (Tomas
losses or in case of closure or cessation of the Claudio Memorial College Inc., v. GA, G.R. No.
Er's business, in either of which the separation 152568, Feb. 16,2004)
pay is equivalent to at least one (1) month or
one-half (1/2) month pay for every year of Q: What is the period covered by the
service, whichever is higher. (Phil. Tobacco payment of backwages?
Flue-Curing & Redrying Corp. v. NLRC, G.R.
No. 127395, Dec. 10, 1998) A: The backwages shall cover the period from
the date of dismissal of the employee up to the
Q: Differentiate Art. 279 of the LC from Sec. date of:
7 of R.A. 10022. 1. Actual reinstatement, or if
reinstatement is no longer feasible
A: 2. Finality of judgment awarding
I Art. 279, lC (local . Sec. 7, RA 10022 backwages (Buhain v. CA, G.R.
! Workers) (Migrant Workers) 143709, July 2, 2002)
Reinstatement
Note: The backwages to be awarded should not
Full backwages from Full Reimbursement of be diminished or reduced by earnings elsewhere
the time of his his placement fee with during the period of his illegal dismissal. The
compensation was interest of 12% per reason is that the Ee while litigating the illegality
withheld from him up annum. of his dismissal must earn a living to support
to the time of his himself and his family. (Bustamante v. NLRC,
actual reinstatement. GR. No. 111651, Mar. 15, 1996; Buenviaje v.
CA G.R. No. 147806, Nov. 2002)

l BACKWAGES Q: What is included in the computation of

backwages?
Q: What are backwages? A: They cover the following:
1. Transportation and emergency
A: It is the relief given to an employee (Ee) to allowances
compensate him for the lost earnings during 2. Vacation or service incentive leave
the period of his dismissal. It presupposes and sick leave
illegal termination. 3. ia"
month pay

Note: Entitlement to backwages of the illegally
dismissed Ee flows from law. Even if he does not
ask for it, it may be given. The failure to claim
backwages in the complaint for illegal dismissal is
a mere procedural lapse which cannot defeat a
right granted under substantive law. (St.
Michael's Institute v. Santos, G.R. No. 145280,
Dec. 4, 2001)
Note: Facilities such as uniforms, shoes, helmets
and ponchos should not be included in the
computation of back wages because said items
are given for free, to be use only during official
tour of duty not for private or personal use.
The award of backwages is computed on the
basis of 30-day month. (JAM Trans Co. v. Flores,
G.R. No. L-63555, Mar. 19, 1993)

UNIVERSITY OF SANTO TOMAS

Pacu{taa ae <Derecfzo CiviC
 LABOR RELATIONS: CONSEQUENCES OF DISMISSAL

Q: What does the tenn "full backwages" malevolent manner. (Phil. Aeolus v. NLRC,
mean? G.R. No. 124617, April 28, 2000)

A: R.A. 6715 points to "full backwages" as
meaning exactly that, i.e., without deducting
from backwages the earnings derived
elsewhere by the concerned Ee during the
period of his illegal dismissal. (Buenviaje v.
CA, G.R. 147806, Nov. 12,2002)
The underlying reason for this ruling is that the
employee, while litigating the legality (illegality)
of his dismissal, must still earn a living to
support himself and family, while full
backwages have to be paid by the employer
as part of the price he has to pay for illegally
dismissing his Ee. (Bustamante v. NLRC, G.R.
No. 111651, Mar. 15, 1996)
Q: Is an Ee entitled to backwages even
after the closure of the business?
A: Yes. The closure of the business rendered
the reinstatement of complainant to her
previous position impossible but she is still
entitled to the payment of backwages up to the
date of dissolution or closure. An employer
found guilty of unfair labor practice in
dismissing his Ee may not be ordered to pay
backwages beyond the date of closure of
business where. such closure was due to
legitimate business reasons and not merely an
attempt to defeat the order of reinstatement.
(Pizza Inn v. NLRC, G.R. No. 74531, June 28,
1988)
Q: What are the circumstances that prevent
award of backwages?
As a rule, moral damages are recoverable only
where the dismissal of the Ee was attended by
bad faith or fraud or constituted an act
oppressive to labor, or were done in a manner
contrary to morals, good customs or public
policy. On the other hand, exemplary damages
may be awarded only if the dismissal was
effected in a wanton, oppressive or malevolent
manner. (Estiva v. NLRC, G.R. No. 95145,
Aug. 5, 1993)
, LIABILITY FOR MONETARY CLAIMS
Q: What must first be proven before an
officer' of a corporation can be held
solidarily liable with the corporation for the
payment of separation pay and other labor
standard benefits to its employees (Ees)?
A:
GR: Corporation is vested by law with a
personality separate and distinct from the
persons composing it, including its officers
as well as from that of any other legal entity
to which it may be related. (Pabalan v.
NLRC, G.R. No. 89879, April 20, 1990)
XPN: To justify solidary liability:
1. There must be an allegation or
showing that the officers of the
corporation deliberately or maliciously
designed to evade the financial
obligation of the corporation to its
Ees, or

A: 2. A showing that the officers

1. Dismissal for cause
indiscriminately stopped its business
2. Death, physical or mental incapacity to perpetrate an illegal act, as a
of the em ployee
vehicle for the evasion of existing
3. Business reverses
obligations, in circumvention of
4. Detention in prison
statutes, and to confuse legitimate
issues. (Reah's Corp.n v. NLRC G.R.
No. 117473, Apr. 15, 1997)
: DAMAGES

Q: What is the basis for awarding moral

and exemplary damages to an illegally
dismissed employee (Ee)?

A: In moral damages, it suffices to prove that

the claimant has suffered anxiety, sleepless
nights, besmirched reputation and social
humiliation by reason of the act complained of.
Exemplary damages, on the other hand, are
granted in addition to, inter alia, moral
damages "by way of example or correction for
the public good "if the employer" acted in a
wanton, fraudulent, reckless, oppressive or

182
 UST GOLDEN NOTES 2010

t" ART. 285. TERMINATION BY THE Note: It is legal, such as in the case of security
: . EMPLOYEE _ __ guards who have no assignment.

In security agency parlance, being placed "off-

Q: How can an employee (Ee) terminate his
duty" or on "floating status" means "waiting to be
service with his employer (Er)?
posted."
A: In case of temporary lay-off Ees, there is no
1. Without just cause - by serving specific provision of law which treats of a
written notice on the Er at least 1 temporary retrenchment or lay-off and provides
month in advance. The Er upon for the requisites in effecting it or a period of
whom no such notice was served duration therefore. These Ees, cannot however
may hold the Ee liable for pam ages. be forever "temporarily laid-off'. To remedy the
2. With just cause - an Ee may put an situation, Art. 286 may be applied by analogy to
end to employment without serving set a specific period that Ees may remain
any notice on the Er for any of the temporarily laid-off or in floating status. There
following just causes: fore It must not exceed 6 months (Art. 286 of the
a. Serious insult by the Er or his LC).
representative on the hour and
person of the Ee Q: Ernelson Trojillo was a driver for
b. Inhuman and unbearable Nelbusco, Inc. The air-conditioning unit of
treatment accorded the Ee by the the bus he drives broke down and he was
·Er or his representative placed in floating status until repair was
c. Commission of a crime or made. Trojillo reported to the bus company
offense by the Er or his but the air-conditioning unit for the bus has
representative against the not been repaired. Several months elapsed
person of the Ee or any of the without the company giving him another
immediate members of his family bus to drive or having the bus repaired.
d. Other causes analogous to any Trojillo then filed an illegal dismissal case
of the foregoing when he learned that the bus he drove was
used as an ordinary bus by a newly-hired
Q: When is employment not deemed driver. Was there a constructive dismissal
terminated? despite the fact that the bus was
unserviceable?
A:
1. Bona fide suspension of the operation A: Under Art. 286 of LC, if an Ee is forced to
of a business or undertaking for a remain without work or assignment for a period
period not exceeding 6 months, or exceeding 6 months, then he is in effect
2. The fulfillment by the Ee of a military constructively dismissed. When the reason for
or civic duty shall not terminate the stoppage of operation of the bus assigned
employment. to Trojillo was the breakdown of the air-
conditioning unit such suspension should only
Note: In all such cases, the Er shall reinstate the last for a reasonable period of time. The defect
Ee to his former position without loss of seniority could have been easily remedied by the bus
rights if he indicates his desire to resume his company. The period of 6 months is more than
work not later than 1 month from the resumption enough and beyond that period the stoppage
of operations of his Er or from his relief from the was already legally unreasonable and
military or civic duty. (Art. 286) economically prejudicial to Trojillo who was not
give a substitute vehicle to drive. (Valdez v.
Q: What is the term of "floating status" of NLRC, G.R. No. 125028, Feb. 9, 1998)
an employee (Ee)?

A: The "flo.ating" status of an Ee should last RETIREMENT .

only for a legally prescribed period of time.
When the floating status of an Ee lasts for Q: What is retirement?
more than 6 months, he may be considered to
have constructively dismissed from service. A: .It is the result of a bilateral act of the
Thus, he is entitled to corresponding benefits parties, a voluntary agreement between the
for separation pay. (Agro Commercial Security employer and the employees whereby the
Services Agency Inc. v. NLRC, GR. Nos. latter after reaching a certain age agrees
82823-24" July 31, 1989) and/or consents to sever his employment with
the former. (Soberano v. Sec. of Labor, GR.
Nos. L-43753-56 and L-50991, Aug. 29, 1980)
,
..••...
UNIVERSITY OF SANTO TOMAS 4-; ~ 183
PacuCtaa d« (])ereclio CidC .~.
 LABOR RELATIONS: TERMINATION OF EMPLOYMENT: By EMPLOYEE

Q: What are the kinds of retirement Q: What is the retirement age in the
schemes? absence of a retirement plan or other
A: applicable agreement?
1. Compulsory and contributory in
nature; A:
2. One set up by the agreement 1. Optional - 60 years old / 5 years in
between the employer (Er) and service (includes authorized
employees (Ees) in the CSA or other absences, vacations, regular
agreements between them (other holidays, mandatory military or civic
applicable employment contract); service)
3. One that is voluntarily given by the Note: The option to retire upon
Er, expressly as announced company reaching the age of 60 years or more
policy or impliedly as in the failure to but not beyond 65 is the exclusive
contest the Ee's claim for retirement prerogative, of the employee (Ee) if
benefits. (Marilyn Odchimar Geriech there is no provision on retirement in a
v. Reuters Limited, Phils., G.R. No. CSA or any other agreement or if the
148542, Jan. 17, 2005) employer (Er) has no retirement plan.
(R.A. 7641; Capili v. NLRC, G.R. No.
117378, Mar. 26, 1997)
Q: Who are covered by the LC provisions
on retirement?
2. Compulsory 65 years old,
regardless of years of service
A:
(company is not bound to dismiss Ee;
GR: All employees (Ees) in the private
it is automatic). (Sec. 4, Rule II, Book
sector:
VI,IRR)
1. Regardless of their position,
designation or status; and
Note: Retirement benefits, where not
2. Irrespective of the method by which
mandated by law, may be granted by
their wages are paid. (Sec. 1, Rule II,
agreement of the Ees and their Er or as
Book VI, IRR) a voluntary act on the part of the Er.
Retirement benefits are intended to
XPN: help the Ee enjoy the remaining years
1. Ees of the National Gov't and its of his life, lessening the burden of
political subdivisions, including worrying for his financial support, and
GOCCs (if they are covered by the are a form of reward for his loyalty and
Civil Service Law) service to the Er (Aquino v, NLRC, G.R.
2. Domestic helpers and persons in the No. 87653, Feb. 11, 1992).
personal service of another
3. Ees of retail, service, and agricultural Q: Is compulsory retirement age below 60
establishments or operations allowed?
employing not more than 10 Ees
(Sec.2, Rule II, Book VI, IRR) A: Yes. Art. 287 permits Er and Ee to fix the
applicable retirement age at below 60. The
Q: What is the retirement age? same is legal and enforceable so long as the
parties agree to be governed by such CBA.
A: It is the age of retirement that is specified in (Pantranco North Express v. NLRC, G.R. No.
the: 95940, July 24, 1996)
1. CSA; or
2. Employment contract; or Q: What is the rule for extension of service
3. Retirement plan (Sec. 3, Rule II, Book of retiree upon his reaching the
VI, IRR). compulsory retirement age?
4. Optional retirement age for
underground mining employees: 50- A: Upon the compulsory retirement of an
60 years provided they have at least employee (Ee) or official in the public or
served for a period of 5 years. private service, his employment is deemed
(Art. 285 as amended by R.A. 8558) terminated. The matter of extension of service
of such Ee or official is addressed to the sound
discretion of the Er. (UST Faculty Union v.
NLRC, G.R. No. 89885, Aug. 6,1990)
 UST GOLDEN NOTES 2010
Q: What are retirement benefits? Q: Rivera was employed as senior
manufacturing pharmacist by UNILAB. She
A: In the absence of an applicable agreement later became Director of UNILAB's
or retirement plan - A retiree is entitled to a Manufacturing Division. UNILAB adopted a
retirement pay equivalent to at least % month comprehensive retirement plan (the plan or
salary for every year of service, a fraction of at retirement plan) supported by a retirement
least 6 months being considered as 1 whole fund. A member is compulsorily retired
year. (Sec. 5. 1, Rule II, Book VI, IRR) upon reaching age 60 or has completed 30
years of service, whichever comes first.
Q: What comprises % month salary? Rivera completed 30 years of service and
UNILAB retired her pursuant to the terms of
A: Unless parties provide fqr broader the plan, she received the benefits in '88. At
inclusions: Rivera's request, UNILAB allowed her to
1. 15 days salary based on latest salary continue working for the company. She
rate; continued working beyond the compulsory
2. Cash equivalent of not more than 5 separation from service that resulted from
days of service incentive leaves her retirement. From 1993 to 1994, Rivera
(22.5/year of service) served as a personal consultant under
3. 1/12 of the 13th month pay contract for UNILAB's sister companies
4. All other benefits as may be agreed which assigned Rivera to render service
upon by the employer and employee involving UNILAB. In 1992, the company
(Ee). (Sec. 5. 2, Rule II, Book VI, IRR) amended its retirement plan, providing,
among others, for an increase in retirement
Note: Under Sec. 26 of R.A. No. 4670,otherwise
benefits. Rivera asked that her retirement
known as Magna Carta for Public School
benefits be increased in accordance with
Teachers, public school teachers having fulfilled
the amended retirement program. Whether
the age and service req'ts of the applicable
Rivera is entitled to the additional
retirement laws shall be given one range salary
retirement benefits of the amended
raise upon the retirement, which shall be the
basis of the computation of the lump sum of the retirement plan?
retirement pay and monthly benefit thereafter.
A: No. Whether these terms included renewed
Q: Can Art. 287 of the LC (on retirement) as coverage in the retirement plan is an
amended by R.A. 7641 be applied evidentiary gap that could have been
retroacti.vely? conclusively shown by evidence of deductions
of contributions to the plan after 1988. Two
A: Yes, provided: indicators, however, tell us that no such
1. The claimant for retirement benefits coverage took place. The first is that the terms
was still the employee of the of the retirement plan, before and after its
employer at the time the statute took 1992 amendment, continued to exclude those
effect; and who have rendered 30 years of service or
2. The claimant was in compliance with have reached 60 years of age. Therefore, the
the req'ts for eligibility under the plan could not have covered her. The second
statute for such retirement benefits. is the absence of evidence of, or of any
(PSVSIA v. NLRC, G.R. No. 115019, demand for, any reimbursement of what
April 14, 1997) Rivera would have paid as contributions to the
plan had her coverage and deductions
Q: Are the proviSions of the retirement plan continued after 1988. Thus, the Court
binding as part of the employment concludes that her renewed service did not
contract? have the benefit of any retirement plan
coverage. (Rivera v. United Laboratories, Inc.,
A: Yes. The retirement plan forms part of the G.R. No. 155639, April 22, 2009)
employment contract since it is made known to
the Ees and accepted by them, and such plan Q: Is a special retirement plan different
has an express provision that the company from those contemplated under the LC as
has the choice to retire an Ee regardless of agreed upon by the parties valid?
age, with 20 years of service, said policy is
within the bounds contemplated by the LC. A: Yes. A pilot who retires after 20 years of
Moreover, the manner of computation of service or after flying 20,000 hours would still

retirement benefits depends on the stipulation
provided in the company retirement plan.
(Progressive Dev't Corporation v. NLRC, G.R.
No. 138826, Oct.30, 2000)
.!.
be in the prime of his life and at the peak of his
career, compared to one who retires at the age
of 60 years old. Based on this peculiar
circumstance that PAL pilots are ip, the parties

UNIVERSITY OF SANTO TOM.A~ 185

lFacuftaa ae (])ereclio Cun(
 LABOR RELATIONS: TERMINATION OF EMPLOYMENT: By EMPLOYEE

provided for a special scheme of retirement Q: What is the difference between gratuity
different from that contemplated in the LC. pay and retirement benefits?
Conversely, the provisions of Art. 287 of the
LC could not have contemplated the situation A:
of PAL's pilots. Rather, it was intended for :' _ -GRATUITY PAY ,,> RETIREMENT
those who have no more plans of employment t- _ " - __ :.,BENEFITS, "
after retirement, and are thus in need of It is paid to the
financial assistance and reward for the years beneficiary for the past Are intended to help
that they have rendered service. (PAL v. services or favor the Ee enjoy the
Airline Pilots Ass'n of the Pnils., G.R. No. rendered purely out of remaining years of his
143686, Jan. 15, 2002) the generosity of the life, releasing him from
giver or grantor. It is the burden of worrying
not intended to pay a for his financial
Q: In '55, Hilaria was hired as a grade
worker for actual support, and are a form
school teacher at the Sta. Catalina
services rendered or of reward for his loyalty
College. In '70, she applied for and was for actual to the Er. (Ste. Catalina
granted a 1 yr LOA without pay due to the performance. It is a College and Sr. Loreta
illness of her mother. After the expiration in money benefit or Oranza, vs. NLRC and
'71 of her LOA, she had not been heard bounty given to the Hilaria Tercera, G.R.
from by Sta. Catalina. In the meantime, she worker, the purpose of No. 144483.
was employed as a teacher at the San which is to reward Ee's November 19, 2003, J.
Pedro Parochial School during SY '80-'81 who have rendered Carpio-Morales)
and at the Liceo de San Pedro, during SY satisfactory service to
'81-'82. In '82, she applied anew at Sta. the com an .
Catalina which hired her. On Mar 22, '97,
during the 51st Commencement Exercises
of Sta. Catalina, Hilaria was awarded a , RESIGNATION
Plaque of Appreciation for 30 yrs of service
and P12,OOO as gratuity pay. On May 31, Q: What is resignation?
'97, Hilaria reached the compulsory
retirement age of 65. Sta. Catalina pegged A: It is the voluntary act of an Ee who finds
her retirement benefits at himself in a situation where he believes that
P59,038.35. Deducted was the amount of personal relations can be sacrificed in favor of
P12,OOO representing the gratuity pay the exigency of the service, and he has no
which was given to her. other choice but to dissociate himself from his
employment.
Should the gratuity pay be deducted from
the retirement benefits? Note: The Ee must serve a written notice on the
employer (Er) at least 1month in advance. Once
A: No. As for the ruling of the CA affirming that accepted, it cannot be withdrawn without the
of the NLRC that the P12,OOO gratuity pay consent of the Er. (lntertrod Maritime Inc. v.
earlier awarded to Hilaria should not be NLRC, G.R. No. 81037, June 19, 1991)
deducted from the retirement benefits due her,
the same is in order. Gratuity pay is separate Q: What is the effect if resignation is not
and distinct from retirement benefits. It is paid voluntary?
purely out of generosity.
A: It is deemed to be a constructive dismissal.

Q: Noel was hired as a "sales eng'r" at

Avesco Marketing Corp. to supervise and
install sound and communications systems
for its clientele. Hetendered his resignation
letter after he was asked by the Avesco
Vice-President to resign which he
immediately revoked. A copy of revocation
was received by the company. He was
placed under preventive suspension and
asked to explain why no disciplinary action
should be taken against him. The latter
eventually terminated him due to breach of
trust and confidence arising from selling
competitive products which was inimical to
the interest of the company resulting to

186
 UST GOLDEN NOTES 2010

sales loss of the same. Noel filed a A: Yes. Notwithstanding the fact that the
complaint for illegal dismissal. AVESCO memo submitted by Ian to the Bernadette did
interposed a defense that Noel voluntarily not mention the words "resign", Ian's
resigned. Was Noel voluntarily resigned? incendiary words and sarcastic remarks,
negate any desire to improve work relations
A: No. Voluntary resignations being with Bernadette and other PTI executives.
unconditional in nature, both the intent and the Such strongly worded letter constituted an act
ovett act of relinquishment should concur. If of "burning his bridges" with the officers of the
the employer (Er) introduces evidence company. Common sense dictates that Ian
purportedly executed by an employee (Ee) as meant to resign when he wrote the said
proof of voluntary resignation yet the Ee memorandum. (Phils Today, Inc. v. NLRC,
specifically denies such evidence, as in Noel's G.R. No. 112965,Jan. 30, 199~
case, the Er is burdened to prove the due
execution and genuineness of such evidence.
In)he case at bar, the notice of asking Noel to
explain why no administrative action should be
taken against him negates Avesco's assertion
of voluntary resignation or separation. For a
resignation tendered by an Ee to take effect, it
should first be accepted or approved by the Er.
AVESCO's receipt of Noel's resignation letter
is not equivalent to approval. (Mora v.
AVESCO Marketing Corp., G.R. No. 177414,
Nov. 14, 2008, J. Carpio-Morales)

Q: Is a resigned employee (Ee) jmtltled to

separation pay?

A:
GR: No.

XPN: Unless otherwise stipulated in the

employment contract or CBA, or the
company policy provides for it.

Note: Generally, an Ee who voluntarily

resigns from employment is not entitled to Academics Committee
separationpay. In the presentcase, however, Chairperson: Abraham D. Genuino II
upon the request of Ee, Er agreed to a Vice-Chair for Academics: Jeannie A Laurentino
scheme whereby the former would receive Vice-Chair jor Admin & Finance: Aissa Celine H. Luna
separation pay despite having resigned
Vice-Chair jor Layout & Design: Loise Rae G. Naval
voluntarily. Thus, the terms and conditions
they both agreed upon constituteda contract -
freely entered into, which should be Labor Law Committee
performed in good faith, as it constitutedthe Subject Head' Lester Jay Alan E. Flores II
law between the parties. (Alfaro v. CA, GR. Assistant Subject Head: Domingo B. Diviva V
No. 140812, Aug. 28, 2001)
Members:
Q: Ian was employed by PTI as a chief Rene Francis P. Batalla
Investigative writer and then assistant to
Diane Camilla R. Borja
the publisher. Ian filed a 30-day leave of
Maria Kristina L. Dacayo-Garcia
absence effective on the same date, citing
the advice of his personal physician for Christian Nino A. Diaz
him to undergo further medical Angelo S. Diokno
consultations abroad. On Oct. 24, 1988, Ian Genesis R. Fulgencio
wrote a "Memorandum for File" addressed Jeanel1eC. Lee
to Bernadette. Construing said memo as a Jemuel Paolo M. Lobo
letter of resignation, Bernadette accepted Andrew W. Montesa
said resignation letter of private Maria Maica Angelika Roman
respondent. Maya "Memorandum for File"
which did not mention the words "resign" •. ~ :~.,!,!,,~~ .•
andlor "resignation" nonetheless juridically
constitutes voluntary resignation?
UNIVERSITY OF SANTO TOMAS
187
Pacu[taa ae CDerecfio Civif
 DISPUTE SETTLEMENT AND REMEDIES

DISPUTE SETTLEMENT and REMEDIES Q: What is the concept of tripartism?

Q: What are the alternative modes of A: It is the representation of 3 sectors. These

settlement of labor dispute under Art. 211 are:
of the Labor Code? 1. The public or the government
2. The employers
A: 3. The workers
1. Voluntary Arbitration - in policy-making bodies of the gov'!.
2. Conciliation Q: Can workers insist that they be
3. Mediation represented in the policy making in the
company?
Q: What is arbitration?
A: No. Such kind of representation in the
A: It is the submission of a dispute to an policy-making bodies of private enterprises is
impartial person for determination on the basis not ordained, not even by the Constitution.
of evidence and arguments of the parties. The What is provided for is workers participation in-
arbiter's decision or award is enforceable upon policy and decision-making process directly
the disputants. It may be voluntary (by affecting their rights, benefits, and welfare.
agreement) or compulsory (required by
statutory provision). (Luzon Dev't Bank v.
Ass'n of Luzon Dev't Bank Employees, G.R. ART. 128. VISITORIAL AND
No. 120319, Oct. 6, 1995) ; ENFORCEMENT POWER

Q: What is conciliation? Q: What are the 3 kinds of powers of the

Secretary of Labor and Employment (SLE)?
A: It is the process where a disinterested 3rd
party meets with management and labor, at A:
their request or otherwise, during a labor 1. Visitorial powers
dispute or in collective bargaining conferences, 2. Enforcement powers
and by cooling tempers, aids in reaching an 3. Appellate or power to review
agreement.
Q: What constitute visitorial power?
Q: What is mediation?
A:
A: It is when a 3'd party studies each side of 1. Access to employer's records and
the dispute then makes proposals for the premises at any time of the day or
disputants to consider. The mediator cannot night, whenever work is being
make an award nor render a decision. undertaken
2. To copy from said records
Q: Can the court fix resort to voluntary 3. Question any employee and
arbitration (VA)?
investigate any fact, condition or
matter which may be necessary to
A: Resort to VA dispute, should not be fixed by determine violations or which may aid
the court but by the parties relying on their in the enforcement of the Labor Code
strengths and resources. and of any labor law, wage order, or
rules and regulation issued pursuant
Q: Who are the parties to labor relations thereto.
cases?
Q: Give 4 instances where the visitorial
A: power of the SLE may be exercised under
1. Employees organization the Labor Code.
2. Management
3. The public A: Power to:

Note: Employer and Ees are active parties while 1. Inspect books of accounts and
the public and the State are passive parties. records of any person or entity
(Poquiz, 2006, p.3)
engaged in recruitment and
placement, require it to submit reports
regularly on prescribed forms and act
in violations of any provisions of the
LC on recruitment and placement.
(Art. 37)

188
 UST GOLDEN NOTES 2010

2. Have access to employer's records Q: What are the limitations to other

and premises to determine violations courts?
of any provisions of the LC on
recruitment and placement. (Arl. 128) A: In relation to enforcement orders issued
3. Conduct industrial safety inspections under Art. 128, no inferior court or entity shall:
of establishments. (Arl. 165)
4. Inquire into the financial activities of 1. Issue temporary or permanent
legitimate labor organizations (LLO) injunction or restraining order or
and examine their books of accounts 2. Assume jurisdiction over any case
upon the filing of the complaint under
oath and duly supported by the Q: What are the instances when
written consent of at leas~20% of the enforcement power may not be used?
total membership of the- LO
concerned. A:
1. Case does not arise from the
Q: What is enforcement power? exercise of visitorial power
2. When Er-Ee relationship ceased to
A: It is the power of the SLE to: exist at the time of the inspection
1. Issue compliance orders 3. If employer contests the finding of the
2. Issue writs of execution for the Labor Regulation Officer and such
enforcement of their orders, except in contestable issue is not verifiable in
cases where the employer (Er) the normal course of inspection
contests the findings of the labor
officer and raise issues supported by
documentary proof which were not Art. 129. RECOVERY OF WAGES, SIMPLE
considered in the courseof inspection MONEY CLAIMS AND OTHER BENEFITS
3. Order stoppage of work or
suspension of operation when non· Q: What is the rule on the recovery of
compliance with the law or simple money claims?
implementing rules and regulations
poses grave and imminent danger to A:
health and safety of workers in the 1. The aggregate money claim of each
workplace employee (Ee) or househelper (HH)
4. Require Ers to keep and maintain does not exceed P5,OOO.
such employment records as may be 2. The claim is presented by an Ee or
necessary in aid to the visitorial and person employed in the domestic or
enforcement powers household service or HH.
5. Conduct hearings within 24 hours to 3. The claim arises from Er-Ee
determine whether: relationship.
a. An order for stoppage of work or 4. The claimant does not seek
suspension of operations shall reinstatement.
be lifted or not; and
b. Er shall pay employees Note: In the absence of any of the ft. requisites, it
concerned their salaries in case is the labor arbiter (LA) who shall have the
the violation is attributable to his jurisdiction over the claims arising from Er-Ee
fault. (As amended by RA 7730; relations, except claims for Ees compensation,
Guico v. Secretary, G.R. No. SSS, Philhealth, and maternity benefits, pursuant
131750, Nov. 16, 1998) to Art.217 of the Labor Code.

The proceedings before the Regional Office shall

Q: What are the violations under Art. 128?
be summary and non-litigious in nature.

A: Q: What is the adjudicatory power of the

1. Obstruct, impede, delay or otherwise
Regional Director (RD)?
render ineffective the orders of the
SLE or his authorized representatives A: The RD or any of his duly authorized
2. Any government employee found
hearing officer is empowered through
guilty of, or abuse of authority, shall
summary proceeding and after due notice, to
be subject to administrative
hear and decide cases involving recovery of
investigation and summary dismissal wages and other monetary claims and
from service.
benefits, including legal interests.

UNIVERSITY OF SANTO TOMAS

Pacu{taa ae CDereclio CiviC
 DISPUTE SETTLEMENT AND REMEDIES

Q: An airline which flies both the A: Yes. Art.132 (d) of the Labor Code provides
international and domestic routes that the SLE shall establish standards that will
requested the SLE to approve the policy ensure the safety and health of women
that all female flight attendants upon employees including the authority to determine
reaching age 40 with at least 15 years of appropriate minimum age and other standards
service shall be compulsorily retired; for retirement or termination in special
however, flight attendants who have occupations such as those of flight attendants
reached age 40 but have not worked for 15 and the like. (1998 Bar Question)
years will be allowed to continue working in
order to qualify for retirement benefits, but
in no case will the extension exceed 4
years. Does the SLE have the authority to
approve the policy?

Q: What is the difference between the power of Secretary of Labor and Employment (SLE),
Regional Director (RD) and Labor Arbiter (LA)?

A:
Art. 128 Art. 129 Art. 217(a)(6)
~ VP and EP of SLE RD LA

Inspection of establishments
and issuance of orders to LA exercises original and
Adjudication of Ees claims for wages
compel compliance with labor exclusive jurisdiction
and benefits
standards, wage orders and
other labor laws

Enforcement of labor All other claims arising from Er-

Limited to monetary claims
legislation in general Ee relations

LA decides case within 30

Proceeding is an offshoot of Initiated by sworn complaints filed by calendar days after submission of
routine inspections any interested party the case by the parties for
decision

Jurisdictional req'ts:
1) All other claims arising from
1) Complaint arises from Er-Ee
Er-Ee relations
relationship
2) Including those of persons in
2) Claimant is an Ee or person
domestic or household service
employed in domestic or household
No jurisdictional req'ts
service or a HH
3) Involving an amount exceeding
3) Complaint does NOT include a
P5,000
claim for reinstatement
4) Whether or not accompanied
4) Aggregate money claim of EACH
with a claim for reinstatement
claimant does not exceed P5,000

Appealable to SLE (In case

compliance order is issued by Appealable to NLRC Appealable to NLRC
Regional Office)

190
 UST GOLDEN NOTES 2010

;. NATIONAL LABOR RELATIONS'- Q: What are the two kinds of jurisdiction of

, COMMISSION the NLRC?

i ART. 213·216. NATIONAL LABOR A:

(' RELATIONS COMMISSION (NLRC) 1. Exclusive Original Jurisdiction
a. Certified labor disputes causing
Q: What is the NLRC? or likely to cause a strike or
lockout in an industry
A: It is an administrative body with quasi- indispensable to national
judicial functions and the principal government interest, certified to it by the
agency that hears and decides labor- Secretary of Labor or the
management disputes; attachedte the QOLE President for compulsory
solely for program and policy coordination arbitratiqn
only. b. Injunction in ordinary labor
disputes to enjoin or restrain any
Q: How is the powers and functions of the actual or threatened commission
NLRC allocated? of any or all prohibited or
unlawful acts or to require the
A: performance of a particular act in
1. En Banc any labor dispute which, if not
a. Promulgating rules and restrained or performed forthwith,
regulations and governing the may cause grave or irreparable
hearings and disposition of cases damage to any party
before any of its divisions and c. Injunction in strikes or lockouts
regional branches. under Art. 264 of the Labor Code
b. Formulating policies affecting its (LC)
administration and operations. d. Contempt cases
c. On temporary or emergency
basis, to allow cases within the 2. Exclusive Appellate Jurisdiction
jurisdiction of any division to be a. All cases decided by the Labor
heard and decided by any other Arbiters under Art. 217(b) of the
division whose docket allows the LC and Sec. 10 of R.A.8042
additional workload and such (Migrant Worker's Act); and
transfer will not expose litigants to b. Cases decided by the Regional
unnecessary additional expense. Offices of DOLE in the exercise
of its adjudicatory function under
2. Division (8 Divisions with 3 members) Art.129 of the LC over monetary
a. Adjudicatory; claims of workers amounting to
b. All other powers, functions and not more than P5000 and not
duties; accompanied by claim for
c. Exclusive appellate jurisdiction reinstatement.
over cases within their respective
territorial jurisdiction. Q: What is the composition of the NLRC?

Q: Does an individual Commissioner have A:

adjudicatory power? 1. Chairman
2. 23 Members
A: No. The law lodges the adjudicatory power a. 8 members each, shall be chosen
on each of the eight divisions, not on the only from among the nominees of
individual commissioners nor on the whole the workers and employers (Er)
commission. The "division" is a legal entity, not organization respectively.
the person who sits in it. Hence, an individual b. The Chairman and the 7
commissioner has no adjudicatory power, remaining members shall come
although of course, he can concur or dissent in from the public sector, with the
deciding a case. latter to be chosen preferably
from among the incumbent Labor
Arbiters.
c. Upon assumption into office, the
members nominated by the
workers and Ers organization
shall divest themselves of any
affiliation with or .interest in the

UNIVERSITY OF SANTO TOMAS .~ 191

Pacu{taa ae <Dereclio CiviC ." r •
 DISPUTE SETTLEMENT AND REMEDIES: THE NLRC
federation or association to which
they belong.
Note: There is no need for the Commission on
Appointments to confirm the positions in the
NLRC. Such requirement has no constitutional
basis. (Calderon v. Carale, GR. No. 91636, April
23, 1992)
Q: How does the NLRC adjudicate cases?
A:
1. The NLRC adjudicates cases by
division. A concurrence of 2 votes is
needed for a valid judgment.
Note: Whenever the required
membershipin a division is not complete
and the concurrence of the
Commissionersto arrive at judgment or
resolution cannot be obtained, the
Chairman shall desiqnate such number
of additional Commissioners from the
otherdivisionsas may be necessary.
2. It shall be mandatory for the division
to meet for purposes of consultation.
Note: The conclusion of a division on
any case submitted to it for decision
shouldbe reachedin consultationbefore
the case is assignedto a memberfor the
writingof the opinion.
3. A certification that a consultation has
been conducted, signed by the
presiding commissioner of the
division, shall be issued (copy
attached to the record of case and
served upon the parties).
Q: What are the qualifications of the
Chairman and the Commissioners?
A:
1. Member of the Philippine Bar
2. Engaged in the practice of law in the
Philippines for at least 15 years
3. At least 5 years experience or
exposure in handling labor
management relations
4. Preferably a resident of the region
where he is to hold office
Q: What are the qualifications of an
Executive Labor Arbiter?
A:
1. Member of the Philippine Bar
2. Engaged in the practice of law in the
Philippines for at least 10 years
3. At least 5 years experience or
exposure in handling labor
192
management relations
Q: What is the term of office of the
Chairman, Commissioners and Labor
Arbiters (LAs)?
A: They shall hold office during good behavior
until they reach the age of 65 unless removed
for causes as provided by law or become
incapacltated to discharge the function of his
office.
Provided, however, that the President of the
Philippines may extend the services of the
Commissioners and LAs up to the maximum
age of 70 years upon the recommendation of
the Commission en bane.
Q: Some disgruntled members of
Bantay Labor Union filed with the Regional
Office of the DOLE a written complaint
against their union officers for
mismanagement of union funds. The
Regional Director (RD) did not rule in the
complainants" favor. Not satisfied, the
complainants elevated the RD's decision to
the NLRC. The union officers moved to
dismiss on the ground of lack of
jurisdiction. Are the union officers correct?
Why?
A: Yes, the union officers are correct in
claiming that the NLRC has no jurisdiction over
the appealed ruling of the. RD. in Barles v.
Baonio, G.R. No. 120220, June 16, 1999, the
SC ruled:
"Appellate authority over decisions of the RD
involving examination of union accounts is
expressly conferred on the Bureau of Labor
Relations (BLR) under the Rule of Procedure
on Mediation- Arbitration."
Sec. 4. Jurisdiction of the BLR - (b) The BLR
shall exercise appellate jurisdiction over all
cases originating from the RD involving
complaints for examination of union books of
accounts.
The language of the law is categorical. Any
additional explanation on the matter is
superfluous." (2001 Bar Question)
Q: Company "A" and Union "B" could not
resolve their negotiations for a new CBA.
After conciliation proceedings before the
NCMB proved futile, B went on strike.
Violence during the strike prompted A to
file charges against striker-members of B
for their illegal acts. The SLE assumed
jurisdiction, referred the strike to the
NLRC and issued a return-to-work order.
The NLRC directed the parties to
 UST GOLDEN NOTES 2010

submit their respective position papers ART. 217. JURISDICTION OF LABOR

and documentary evidence. At the initial
hearing before the NLRC, the parties
agreed to submit the case for resolution
after the submission of the position
papers and evidence.
SLibsequently, the NLRC issued an arbitral
award resolving the disputed provisions of
the CBA and ordered the dismissal of
certain strikers for having knowingly
committed illegal acts during $the strike.
The dismissed employees elevated "their
dismissal to the CA claiming that they
were deprived of their right to due process
and that the affidavits submitted by A
were 'self-serving and of no probative
value. Should the appeal prosper? State the
reason(s) for your answer clearly.
A: The appeal should not prosper. The SC, in
many cases, has ruled that decisions made by
the NLRC may be based on position papers. In
the question, it is stated that the parties agreed
to submit the case for resolution after the
submission of position papers and evidence.
Given this fact, the striker-members of B
cannot now complain that they were denied
due process. They are in estoppel. After
voluntarily submitting a case and encountering
an adverse decision on the merits, it is too late
for the loser to question the jurisdiction or
power of the court. A party cannot adopt a
posture of double dealing. (Marquez vs.
Secretary of Labor, G.R. No. 80685, March 16,
1989). (2001 Bar Question)
Q: Is judicial review of the NLRC's decision
available?
A: Yes, through petitions for certiorari (Rule
65) which should be initially filed with the CA in
strict observance of the doctrine on the
hierarchy of courts as the appropriate forum
for the relief desired. The CA is procedurally
equipped to resolve unclear or ambiguous
factual finding, aside from the increased
number of its component divisions. (Sf. Martin
Funeral Home v. NLRC, G.R. No. 130866,
Sep. 16, 1998)
Q: Is barangay conctllatlon available in
labor cases?
A: No. Labor cases are not subject to
barangay Conciliation since ordinary rules of
procedure are merely suppletory in character
vis-a-vis labor disputes which are primarily
governed by labor laws. (Montoya v. Escayo,
G.R. No. 82211-12, Mar. 21, 1989)
ARBITERS AND THE NATIONAL LABOR
RELATIONS-COMMISSION
Q: What is the distinction between the
jurisdiction of the labor arbiter (LA) and the
National Labor Relations Commission
(NLRC)?
A:
1. The NLRC has exclusive appellate
jurisdiction on all cases decided by
the LA.
2. The NLRC does not have original
jurisdiction on the cases over which
the LA have original and exclusive
jurisdiction.
3. The NLRC cannot have appellate
jurisdiction if a claim does not fall
within the exclusive original
jurisdiction of the LA.
Q: What is the nature of jurisdiction of
labor arbiters (LAs)?
A: It is original and exclusive. LAs have no
appellate jurisdiction.
Q: What are the cases falling under the
jurisdiction of labor arbiters (LAs)?
A: Exclusive and original jurisdiction to hear
and decide the following cases involving all
workers:
1. ULP cases
2. Termination disputes
3. If accompanied with a claim for
reinstatement, those that workers file
involving wages, rates of pay, hours
of work and other terms and
conditions of employment
4. Claims for actual, moral, exemplary
and other forms of damages arising
from Er-Ee relations
5. Cases arising from any violation of
Art. 264, including questions involving
the legality of strikes and lockouts;
6. Except claims for Employment
Compensation, Social Security,
Philhealth and maternity benefits, all
other claims arislnq from Er-Ee
relations, including those of persons
in domestic or household service,
involving an amount exceeding
P5000 regardless of whether
accompanied with a claim for
reinstatement
7. Monetary claims of overseas contract
workers arising from Er-Ee relations
under the Migrant Worker's Act of
1995 as amended by RA 10022

UNIVERSITY OF SANTO TOMAS ~,~-:l

193
PacuCtaa de <Derecno CiviC -."
 DISPUTE SETTLEMENT AND REMEDIES: THE
8. Wage distortion disputes in
unorganized establishments not
voluntarily settled by the parties
pursuant to RA 6727
9. Enforcement of compromise
agreements when there is non-
compliance by any of the parties
pursuant to Art. 227 of the Labor
Code (LC); as amended; and
10. Other cases as may be provided by
law
Note: Althoughthe provisionspeaks of exclusive
and original jurisdiction of LAs, the cases
enumerated may instead be submitted to a
voluntary arbitrator by agreement of the parties
under Art. 262 of the LC. The law prefers
voluntaryovercompulsoryarbitration.
Q: What is the nature of the cases which
the labor arbiter (LA) may resolve?
A: The cases that a LA can hear and decide
are employment related. Where no Er-Ee
relationship exists between the parties and no
issue is involved which may be resolved by
reference to the LC, other labor statutes, or
any collective bargaining agreement, it is the
RTC that has jurisdiction. (Lapanday
Agncuftural Dev't. Corp v. CA, G.R. No.
112139, Jan.31, 2000)
The LA has jurisdiction over controversies
involving Ers and Ees only if there is a
"reasonable causal connection" between the
claim asserted and the Er-Ee relations. Absent
such link, the complaint is cognizable by the
regular court. (Eviota v. CA, G.R. No. 152121,
July 29, 2003)
Q: Do labor arbiters exercise concurrent
jurisdiction with the NLRC?
A: Yes, with respect to contempt cases.
Q: What are the cases referred to grievance
machinery and voluntary arbitration?
A: Disputes arising from the:
1. Interpretation or implementation of
the CSA
2. Interpretation or enforcement of
company personnel policies
Q: What is the extent of the jurisdiction of
the labor arbiter (LA) If there are
unresolved matters arising from the
interpretation of the CBA? .
A:
GR: LAs have no jurisdiction over
unresolved or unsettled grievances arising
194
NLRC
from the interpretation or implementation of
the CSA and those arising from the
interpretation or enforcement of company
personnel policies.
XPN: Actual termination disputes
Note: Where the dispute is just in the
interpretation, implementation or enforcement
stage of the termination,it may be referredto the
grievance machinery set up by the CSA or by
voluntary arbitration. Where there was already
actual termination, i.e., violation of rights, it is
already cognizableby the LA. (Maneja v. NLRC,
G.R. No. 124013, June 5, 1998)
Q: Does the use of the word "may" in the'
.provisions of the Grievance Procedure
allow the alternative of submitting the case
before the labor arbiter (LA)?
A: Yes. The use of the word "may" shows the
intention of the parties to reserve the right to
submit the illegal termination dispute to the
jurisdiction of the LA, rather than to a voluntary
arbitrator. Petitioner validly exercised his
option to submit his case to a LA when he filed
his complaint before the proper government
agency. In other words, the CA is correct in
holding that voluntary abitration is mandatory
in character if there is a specific agreement
between the parties to that effect. It must be
stressed however that, in the case at bar, the
use of the word "may" shows the intention of
the parties to reserve the right of recourse to
LAs. (Vivero v. CA, G.R. No. 138938, Oct. 24,
2000)
Q: What are the cases which do not fall
under the jurisdiction of the labor arbiters
(LA)?
A: LAs have no jurisdiction over the ff:
1. Foreign governments (JUSMAG-
Phils. v. NLRC, G.R. No. 108813,
Dec. 15, 1994)
2. Int'l agencies (Lasco v. NLRC, G.R.
Nos. 109095-109107, Feb. 23, 1995)
3. Intra-corporate disputes which fall
under P.O. 902-A and now falls under
the jurisdiction of the regular courts
pursuant to the new Securities
Regulation Code (Nacpi/ v. IBC, G.R.
No. 144767, Mar. 21, 2002)
4. Executing money claims against
government (Dept of Agriculture v.
NLRC, G.R. No. 104269, Nov. 11,
1993)
 UST GOLDEN NOTES 2010

5. Cases involving GOCCs with original
. charters which are governed by civil
service law, rules or regulations (Arl.
IX-B, Sec.2, No.1, 1987 Constitution)
6. Local water district (Tanjay Water
District v. Gabaton, April 17, 1989)
except where NLRC jurisdiction is
invoked (Zamboanga City Water
District v. Buat, G.R. No. 104389,
May 27, 1994)
,:1 , Ee relationship between the parties is merely
7. The aggregate money claim does not
exceed P5000 and without claim for
reinstatement (Rajah Humabon Hotel,
Inc. v. Trajano, G.R. Nos. 100222-23,
Sep.14, 1993)
129, 13S amended. Being an ordinary civil
action, the same is beyond the jurisdiction of
labor tribunals.
Not every controversy or money claim by an
employee (Ee) against the employer (Er) or
vice-versa is within the exclusive jurisdiction of
the LA. Actions between Ees and Er where the
Er-Ee 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. Here, the Er-
incidental and the cause of action ultimately
arose from different sources of obligation, i.e.,
the Constitution and CEDAW. (Halaguena vs,
PAL Incorporated, G.R. No. 172013, Oct. 2,
2009)

8. Claim of employee (Ee) for cash prize Q: Who has the exclusive appellate
under the Innovation Program of the jurisdiction over all cases decided by Labor
company, although arising from Er-Ee Arbiters?
relationship, is one requiring
application of general civil law on A: The NLRC.
contracts which is within the
jurisdiction of the regular courts (SMC Q: Is a motion for reconsideration (MR) of
v. NLRC, G.R. No. 80774, May 31, the NLRC decision required before
1988) certiorari may be availed of?

9. Cause of action based on quasi-delict A: Yes. A MR is required to enable NLRC to

or tort which has no reasonable correct its mistakes. If no MR is filed, NLRC's
connection with any of the claims decision becomes final and executory.
enumerated in Art.217 of the LC
(Ocheda v. CA, G.R. No. 85517, Oct. Q: What is the remedy in case of denial of
16, 1992) the MR?

10. Complaint arising from violation of
training agreement (Singapore
Airlines v. Pano, G.R. No. L-47739,
June 22, 1983)
Q: FASAP, the sole and exclusive
bargaining representative of the flight
attendants, flight stewards and pursers of
PAL, and respondent PAL entered into a
CSA incorporating the terms and
conditions of their agreement for the years
'01-'05. Sec. 144, Part A of the CSA
provides that compulsory retirement shall
be 55 for females and 60 for males. They
filed an action with the RTC claiming that
the CSA provision is discriminatory and
hence unconstitutional. The RTC issued a
TRO.The appellate court ruled that the RTC
has no jurisdiction over the case at bar.
Whether RTC has jurisdiction over the
petitioners' action challenging the legality
of the provisions on the compulsory
retirement age contained in the CSA?
A: Yes. The subject of litigation is incapable of
pecuniary estimation, exclusively cognizable
by the RTC, pursuant to Sec. 19 (1) of BP Big.
A: If the motion is denied, the aggrieved party
may file a petition for cerliorari not later than
60 days from notice of the judgment, order or
resolution. In case a motion for reconsideration
or new trial is timely filed, whether such motion
is required or not, the 60 day period shall be
counted from notice of the denial of said
motion. No extension of time to file the petition
shall be granted except for compelling reason
and in no case exceeding 15 days. (Sec. 4,
Rule 65, Rules of Court.)
Q: What is the effect if no service of
summons was made?
A: In the absence of service of summons or a
valid waiver thereof, the hearings and
judgment rendered by the labor arbiter is null
and void.
Q: What is compulsory arbitration?
A: The process of settlement of labor disputes
by a government agency which has the
authority to investigate and make an award
binding on all the parties.

UNIVERSITY OF SANTO TOMAS

Pacu[taa de iDerecfio Civif
 DISPUTE SETTLEMENT AND REMEDIES: THE NLRC

Q: Can the Labor Arbiter (LA) conduct ART. 218. POWERS OF THE NATIONAL
compulsory arbitration? LABOR RELATIONS COMMISSION (NLRC) _

A: Yes. Under the Labor Code, it is the LA Q: What are the powers
who is clothed with the authority to conduct
compulsory arbitration on cases involving A:
termination disputes [Art. 217, P.O. 442, as 1.
amended). (PAL v. NLRC, G.R. No. 55159,
Dec. 22, 1989)
Q: What are the rules on venue of filing
cases?
A:
1. All cases which the Labor Arbiters
(LAs) have authority to decide may
be filed in the Regional Arbitration 2.
Branch (RAB) having jurisdiction over
the workplace of the complainant
/petitioner. 3:
Note: Workplace is understood to be
the place or locality where the
employee (Ee) is regularly assigned
4.
when the cause of action arose. It shall
5.
include the place where the Ee is
supposed to report back after a 6.
temporary detail, assignment or travel.
of the NLRC?
Rule making power - promulgation of
rules and regulations:
a. Governing disposition of cases
before any of its diviSion/regional
offices.
b. Pertaining to its internal functions
c. As may be necessary to carry
out the purposes of the Labor
Code.
Power to issue compulsory processes'
(administer oaths, summon parties,
issue subpoenas)
Power to investigate matters and
hear disputes within its jurisdiction
(adjudicatory power - original and
appellate jurisdiction over cases)
Contem pt power
Ocular Inspection
Power to issue injunctions and
restraining orders

In case of field Ees, as well as ambulant Q: What is an injunction or a temporary

or itinerant workers, their workplace is restraining order (TRO)?
where they are"
a. Regularly assigned A: Orders which may require, forbid, or stop
b. Supposed to regularly receive their the doing of an act. The power of the NLRC to
salaries and wages enloin or restrain the commission of any or all
c. Receive their work instructions prohibited or unlawful acts under Art. 218 of
from Labor Code can only be exercised in a labor
d. Reporting the results of their disputes.
assignment to their employers (Er)
Note: A restraining order is generally regarded as
2. Where 2 or more RABs have an order to maintain the subject of controversy in
jurisdiction over the workplace, the status quo until the hearing of an application for a
first to acquire jurisdiction shall temporary injunction. (BF Homes v. Reyes, G.R.
exclude others. No. L-30690 November 19, 1982)
3. Improper venue when not objected to
before filing of position papers shall Q: Who may issue a TRO?
be deemed waived.
4. Venue may be changed by written A:
agreement of the parties or when the 1. President (Art.263[g])
NLRC or the LA so orders,upon 2. Secretary of Labor (Art. 263[g])
motion by the proper party in 3. NLRC (Art.218)
meritorious cases.
5. For Overseas Contract Workers Note: Art. 218 of the Labor Code limits the grant
where the complainant resides or of injunctive power to the "NLRC". The LA is
where the principal office of the excluded statutorily. Hence, no NLRC Rules can
respondent Er is located, at the grant him that power.
option of the complainant.

Note: The Rules of Procedure on

Venue is merely permissive, allowing a
different venue when the interest of
substantial justice demands a different
one. (Dayag v. Canizares, GR. No.
124193, Mar. 6, 1998)

196
 UST GOLDEN NOTES 2010
Q: What is the procedure for the issuance
of restraining orderlinjunction?
A:
1. Filing of a verified petition
2. Hearing after due and personal notice
has been served in such manner as
the Commission shall direct to:
a. All known persons against
whom relief is sought
b. Also the Chief E~cutiv~ or
other public officials of' the
province or city within which the
unlawful acts have been
threatened or commercial
charged with the duty to protect
the complainant's property.
3. Reception at the hearing of the
testimonies of the witnesses with
opportunity for cross-examination, in
support of the allegations of the
complaint made under oath as well as
testimony in opposition thereto.
4. Finding of fact of the Commission to
the effect that:
a. Prohibited or unlawful acts have
been threatened and will be
committed, or have been and will
be continued unless restrained,
but no injunction or TRO shall be
issued on account of any threat,
prohibited or unlawful act, except
against the 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.
b. The substantial and irreparable
injury to the complainant's
property.
Note: Irreparable Injury -an injury
which cannot be adequately
compensated in damages due to
the nature of the injury itself or the
nature of the right or property
injured or when there exist no
pecuniary standard for
measurement of damages.
c. That as to each item of relief to
be granted, greater injury will be
inflicted upon the complainant
by the denial of the relief than will
be inflicted upon the defendants
by the granting of the relief.
d. That complainant has no
adequate remedy at law
Note: Adequate remedy - one that
affords relief with reference to the
matter in controversy and which is
appropriate to the particular
circumstances of the case if the
remedy is specitlcally provided by
law. (PAL v. NLRC, GR. No.
120567, Mar. 20, 1998)
e. That public officers charged with
the duty to protect complainant's
property are unable or unwilling
to furnish adequate protection.
5. Posting of a bond.
ART. 221. TECHNICAL RULES NOT
BINDING AND PRIOR RESORT TO
AMICABLE SETTLEMENT
Q: Are technical rules strictly followed in
proceedings before the NLRC and the
Labor Arbiter (LA)?
A: No. Administrative and quasi-judicial bodies
like the NLRC, are not bound by the technical
rules of procedure in the adjudication of cases.
(Ford Phils. Salaried Employees Ass'n v.
NLRC, G.R. No. 75347, Dec. 11, 1987)
Q: Is NLRC precluded from receiving
evidence for the 1st time on appeal?
A: No. It is well-settled that the NLRC is not
precluded from receiving evidence, even for
the first time on appeal, because technical
rules of procedure are not binding in labor
cases.ln fact, labor officials are mandated by
the Labor Code to use every and all
reasonable means to ascertain the facts in
each case speedily and objectively, without
regard to technicalities of law or procedure, all
in the interest of due process. Thus, in Lawin
Security Services v. NLRC and Bristol
Laboratories Ees' Association-DFA v. NLRC,
G.R. No. 118536, June 9, 1997, we held that
even if the evidence was not submitted to the
labor arbiter, the fact that it was duly
introduced on appeal to the NLRC is enough
the basis for the latter to be more judicious in
admitting the same, instead of falling back on
the mere technicality that said evidence can no
longer be considered on appeal. Certainly, the
first course of action would be more consistent
with equity and the basic notions of fairness.
(Clarion Printing House, Inc. vs. NLRC, G.R.
No. 148372, June 27, 2005, J. Carpio-
Morales)
UNIVERSITY
...
OF SANTO TOM.A~
. Pdcu(t'ati- tie (])eredio CivtC
\ij,! 197
 DISPUTE SETTLEMENT AND REMEDIES: THE NLRC

Q: How is this rule reconciled with the 2. The LA shall direct the parties to
requirement of procedural due process? simultaneously file their respective
position papers on the issues agreed
A: While the rules of evidence prevailing in the upon by the parties and as reflected
courts of law or equity are not controlling in in the minutes of the proceedings.
proceedings before the NLRC, the evidence (Sec. 4, Rule V, NLRC 2005 Rules of
presented before it must at least have a Procedure)
modicum of admissibility for it to be given
some probative value (Uichico et al. v NLRC, Q: What is the effect of non-appearance of
G.R. No. 121434, June 2, 1997). Not only parties in a conciliation or mediation
must there be some evidence to support a proceeding?
finding or conclusion, but evidence must be
substantial. Substantial evidence is more than A:
a mere scintilla. It means such relevant 1. Complainant/Petitioner - His non-
evidence as a reasonable mind might accept appearance during the 2 settings for
as adequate to support a conclusion. (Gelmart mandatory conciliation and mediation
industries Inc. v. Leogardo Jr., G.R. No. conference scheduled in the
70544, Nov. 5, 1987) summons, despite due notice thereof,
shall be a ground for the dismissal of
Q: Should there always be a formal or trial the case without prejudice.
type hearing to satisfy the requirements of
due process? 2. Respondent
a. His non-appearance during the
A: No. Formal or trial-type hearing is not at all first scheduled conference shall
times and in all instances essential to due not preclude the second
process, the requirements of which are conference from proceeding as
satisfied where parties are afforded fair and scheduled in the summons.
reasonable opportunity to explain their side of b. If he still fails to appear at the
the controversy at hand. (Llora Motors Inc. v. second conference despite being
Drilon, GR. No. 82895, Nov. 7, 1989) duly served with summons, the
Labor Arbiter (LA) shall
Note: Res judicata applies only to judicial or immediately terminate the
quasi-judicial proceedings and not to the exercise mandatory conciliation and
of administrative powers. mediation conference.
c. The LA shall thereafter allow the
Q: What is the nature of the proceedings complainant or petitioner to file
before the Labor Arbiter (LA)? his verified position paper and
submit evidence in support of his
A: It shall be non-litigious in nature. Subject to causes of action, and thereupon
the requirements of due process, the render his declsion on the basis
technicalities of law and procedure and the of the evidence on record. (Sec.
rules obtaining in the courts of law shall not 5, Rule V, NLRC 2005 Rules of
strictly apply thereto. The LA may avail himself Procedure)
of all reasonable means to ascertain the facts
of the controversy speedily, including ocular Q: What is the concept of amicable
inspection and examination of well-informed settlement?
persons. (Sec. 2, Rule V, NLRC 2005 Rules of
Procedure) A: It is where the Labor Arbiter shall exert all
efforts to arrive at an amicable settlement of a
Q: What is the effect of failure of labor dispute within its jurisdiction on or before
conciliation and mediation? its first hearing or during the mandatory
conferences set for the purpose.
A: Should the parties fail to agree upon an
amicable settlement, either in whole or in part, Q: When may the Labor Arbiter (LA)
during the mandatory conciliation and approve a compromise agreement?
mediation conference:
1. The LA shall terminate the A: It shall be approved by the LA, if:
conciliation and mediation stage and 4. After explaining to the partie-
proceed to pursue the other purposes particularly to the complainants
of the said conference as enumerated terms and conditions
in Sec. 3; thereafter, consequences thereof
 UST GOLDEN NOTES 2010

5. He is satisfied that they understand :. . ART. 223. APPEAL

the agreement
6. That the same was entered into freely Q: Where do you appeal the labor Arbiter's
and voluntarily by them decision?
7. That it is not contrary to law, morals,
and public policy. A: NLRC.

Q: What are the grounds for appeal to the

h"~ ·;'ART. 222::APPEARANCES AND FEES' NlRC?

Q: Can a non-lawyer appear before the A:

NlRC or labor Arbiter? ;) 1. Prima facie evidence of abuse of
discretion on the part of the Labor
A: Yes. Provided, the non-lawyer: Arbiter
1. Represents himself as party to the 2. The decision, order or award was
case; secured through fraud or coercion,
2. Represents a legitimate labor including graft and corruption
organization (LLO) which is a party to 3. Purely questions of law
the case provided that he shall be 4. Serious errors in the findings of facts
made to present a verified which would cause grave or
certification that he is authorized to irreparable damage or injury to the
represent the LLO in the said case appellant.
3. Represents a member or members of
a LLO that is existing within the Q: Is a motion for reconsideration of labor
employers establishment Arbiter's decision a precondition to an
4. Is a duly-accredited member of any appeal to the NLRC?
legal aid office recognized by the
DOJ or IBP A: No.
5. Is the owner or president of a
corporation or establishment which is Q: Within what period should the appeal
a party to the case. (2005 NLRC from Labor Arbiter (LA) be made?
Rules)
A:
Q: What is the amount of attorney's fees 1. Decisions, resolutions or orders of the
that may be granted? .
LA shall be final and executory unless
appealed to the NLRC by any or bot
A: parties within 10 calendar days fro
1. For simple monetary claims - 10% of receipt thereof
the total monetary award adjudged 2. In case of decisions, resolutions
the employees excluding the award orders of the Regional Director of e
for moral and exemplary damages. DOLE pursuant to Art. 129 of t e
(Art. 111) Labor Code, within 5 calendar da s
from receipt thereof. (2005 Revised
2. For CBA negotiations and conclusion Rules of the NLRC)
- It shall be in the amount agreed
upon by the parties taken from the Q: The affected members of the rank and
union funds and not from individual file elevated a Labor Arbiter's decision to
union members. the NlRC via a petition for review filed
after the lapse of the ten-day
Q: When is payment of attorney's fees reglementary period for perfecting an
prohibited? appeal. Should the NLRC dismiss the
petition outright or may the NlRC take
A: Only where the same is effected through cognizance thereof?
forced contributions from the workers from
their own funds as distinguished from union A: The NLRC should dismiss the appea
funds. Neither the lawyer nor the union may outright because the same was filed beyo d
require the individual workers to assume the the reglementary period of appeal. Art. 223
obligation to pay the attorney's fees from their the Labor Code reads: "Decisions, awards,
own pockets. Any agreement to the contrary orders of the LA are final and executor unless
shall be null and void. appealed to the Commission by any or both
parties within 10 calendar days from receipt 0
such decisions, awards, or orders. P (2001 Bar
UNIVERSITY OF SANTO TOMAS
Pacu{taat{e CDerecfto CiviC
 DISPUTE SETTLEMENT AND REMEDIES: THE
Question)
Q: What does the "10 days" refer to?
A: The shortened period of 10 days fixed by
Art. 223 contemplates calendar days and not
working days. It is precisely in the interest of
labor law that the law has commanded that
labor cases be promptly, if not peremptorily,
disposed of. (Vir-jen Shipping and Marine
Services Inc. v. NLRC, GR. No. L-58011-12,
July 20, 1982)
Note: If the 10th or 5th day, as the case may
be, falls on a Saturday, Sunday or holiday, the
last day to perfect the appeal shall be the first
working day following such Saturday, Sunday
or holiday.
Q: May the period for filing an appeal be
extended?
A: No. The perfection of an appeal within the
statutory or reglementary period is not only
mandatory but also jurisdictional and failure to
do so renders the questioned decision final
and executory as to deprive the appellate court
of jurisdiction to alter the final judgment of the
Regional Directors and Labor Arbiters. (Aboitiz
Shipping Ees Ass'n v. Trajano,. GR. No.
112955, Sep. 1, 1997)
Q: Where is the appeal filed?
A: The appeal shall be filed with the Regional
Arbitration Branch or Regional Office where
the case was heard and decided. (Sec. 3, Rule
VI, NLRC 2005 Rules of Procedure)
Q: How is an appeal from LA to NLRC
perfected?
A:
1. The appeal is perfected:
a. Filed within the reglementary
period provided in Sec. 1 of this
Rules
b. Verified by the appellant himself
in accordance with Sec. 4, Rule
7 of the Rules of Court, as
amended
c. In the form of a memorandum of
appeal which shall state the
grounds relied upon and the
arguments in support thereof, the
relief prayed for, and with a
statement of the date the
appellant received the appealed
decision, resolution or order
d. In 3 legibly typewritten or printed
copies
NLRC
e. Accompanied by (i) proof of
payment of the required appeal
fee; (ii) posting of a cash or
surety bond as provided in Sec.
6 of this Rule; (iii) a certificate of
non-forum shopping; and (iv)
proof of service upon the other
parties.
2. Mere notice of appeal without
complying with the other requisites
aforestated shall not stop the running
of the period for perfecting an appeal.
. Q; Is the posting of an appeal bond
required for the perfection of an appeal
from a Labor Arbiter's (LA's) decision
involving monetary award?
A; Yes. In case the decision of the LA or the
Regional Director involves a monetary award,
an appeal by the employer may be perfected
only upon the posting of a bond. (Sec.6, Rule
VI, NLRC 2005 Rules of Procedure)
Q; What are the forms of the appeal bond?
A: It 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. (Sec. 6, Rule VI, NLRC 2005
Rules of Procedure)
Q: Who may issue a surety bond?
A: It shall be issued by a reputable bonding
company duly accredited by the Commission
or the SC, and shall be accompanied by
original or certified true copies of:
1. A joint declaration under oath by the
Er, his counsel, and the bonding
company, attesting that the bond
posted is genuine, and shall be in
effect until final disposition of the
case.
2. An indemnity agreement between the
Er-appellant and bonding company;
3. Proof of security deposit or collateral
securing the bond: provided, that a
check shall not be considered as an
acceptable security;
4. A certificate of authority from the
Insurance Commission;
5. Certificate of registration from the
SEC;
6. Certificate of authority to transact
surety business from the Office of the
President;
7. Certificate of accreditation and
authority from the SC; and
 UST GOLDEN NOTES 2010

8. A notarized board resolution or appeal, as the same was not perfected for
secretary's certificate from the failure to file a bond. In ABA vs. NLRC, GR
bonding company showing its No. 122627, July 18, 1999, the SC ruled: "A
authorized signatories and their appeal bond is necessary ...the appeal may
specimen signatures. (Sec. 6, Rule be perfected only upon the posting of cash or
VI, NLRC 2005 Rules of Procedure) surety bond issued by a reputable bonding
company duly accredited by the Commission
Note: The appellant shall furnish the appellee in the amount equivalent to the monetary
with a certified true copy of the said surety bond award in the judgment appealed from." (2001
with all the above-mentioned supporting Bar Question)
documents.
Q: What is the effect of perfection of an
Q: What is the period within which a l:ash
appeal on execution?
or surety bond shall be valid and effective?
A: The perfection of an appeal shall stay the
A: From the date of deposit or posting, until
execution of the decision of the Labor Arbiter
the case is finally decided, resolved or
on appeal, except execution for reinstatement
terminated, or the award satisfied. This
pending appeal.
condition shall be deemed incorporated in the Note: The provision of Art. 223 is clear that an
terms and conditions of the surety bond, and award by the LA for reinstatement shall be
shall be binding on the appellants and the immediately executory even pending appeal and
bonding company. (Sec. 6, Rule VI, NLRC the posting of a bond by the employer shall not
2005 Rules of Procedure) stay the execution for reinstatement. (Pioneer
Texturizing Corp. VS. NLRC, G.R. No. 118651,
Q: What is the effect if the bond is verified Oct.16, 1997)
by the NLRC to be irregular or not Q: May dismissed employees (Ees) collect
genuine? their wages during the period between the
Labor Arbiter's (LA's) order of
A: The Commission shall cause the immediate reinstatement pending appeal and the
dismissal of the appeal, and censure or cite in NLRC decision overturning that of the LA?
contempt the responsible parties and their
counsels, or subject them to reasonable fine or A: Yes. Par. 3 of Art. 223 of the Labor Code
penalty. (Sec.6, Rule VI, NLRC 2005 Rules of provides that the decision of the LA reinstating
Procedure) a dismissed or separated Ee, insofar as the
reinstatement aspect is concerned, shall
Note: The appellee shall verify the regularity and immediately be executory, pending appeal.
genuineness of the bond and immediately report
any irregularity to the NLRC. Even if the order of reinstatement of the LA is
reversed on appeal, it is obligatory on ,the part
Q: May the bond be reduced? of the employer (Er) to reinstate and pay the
wages of the dismissed Ee during the period of
A: appeal until reversal by the higher court. On
GR: No. the other hand, if the Ee has been reinstated
during the appeal period and such
XPN: On meritorious grounds, and only reinstatement order is reversed with finality,
upon the posting of a bond in a reasonable the Ee is not required to reimburse whatever
amount in relation to the monetary award. salary he received for he is entitled to such,
more so if he actually rendered services during
Note: The mere filing of a motion to reduce bond the period.
without complying with the requisites in the
preceding paragraphs shall not stop the running Unless there is a restraining order, it is
of the period to perfect an appeal (Sec. 6, Rule ministerial upon the LA to implement the order
VI, NLRC 2005 Rules of Procedure). of reinstatement and it is mandatory on the Er
to comply therewith. (Garcia vs. PAL, GR No.
Q: Company "A", within the reglementary 164856, Jan. 20, 2009)
period, appealed the decision of a Labor
Arbiter directing the reinstatement of an Q: Is a petition for relief available to the
Ee and awarding backwages. However, appellant?
A's cash bond was filed beyond the ten
day period. Should the NLRC entertain A: Yes.
the appeal? Why?

A: No, the NLRC should not entertain the

UNIVERSITY OF SANTO TOMAS ~>U.U. 201
PacuCtatf de CJ)erecfio Cicit .",.
 DISPUTE SETTLEMENT AND REMEDIES: THE NLRC
Q: Within what period may a petition for
relief may be filed?
A: It must be filed WITHIN:
1. 60 days from knowledge of judgment
and
2. 6 months from entry of such judgment
Q: What are the applicable rules on judicial
review?
A:
1. No law allows an appeal from a
decision of the Secretary of Labor or
the NLRC or of a voluntary arbitrator.
2. The way to review NLRC decisions is
by special civil action for certiorari,
prohibition or mandamus under Rule
65 of the Rules of Court.
3. Jurisdiction belongs to SC and CA,
but in line with the doctrine on
hierarchy of courts, the petition
should be initially presented to the
CA. (St. Martin's Funeral Home v.
NLRC, Sep. 16, 1988).
4. No motion for reconsideration (MR) is
allowed for any order, decision or
award of a LA. However, a MR of a
Labor Arbiter's decision, award or
order which has all the elements of
an appeal may be treated as appeal.
5. Only one MR of the decision, award
or order of the NLRC in cases
appealed before it is allowed.
Q: Will a petition for certiorari stay the
execution of the assailed decision of the
NLRC?
A: No. Unless a TRO is issued by the CA or
SC.
, ART. 224. EXECUTION OF DECISIONS,
ORDERS OR AWARDS
Q: What is a writ of execution?
A: It is an order to carry out or to implement a
final judgment.
Q: When does a decision of the (~LRC, LA,
BLR or Regional Director (RD), Med-arbiter,
Voluntary Arbitrator and SLE) become final
and executory?
A: After 10 calendar days from receipt of the
decision by the parties and shall be executory
within 10 years.
202
Q: Who are the officials who may issue a
writ of execution?
A:
1. SLE
2. Regional Director
3. NLRC
4. LA
5. Med-Arbiter
6. Voluntary Arbitrator
7. Panel of Arbitrators
Q: When may a writ of execution be
issued?
A: It may be issued motu proprio or on motion'
of any interested party within 5 years from the
date it becomes final and executory.
An independent action is required for the
execution of the final judgment within the next
5 years. (PNR v. NLRC, G.R. No. 81231, Sep.
19,1989)
Q: May the manner of execution be
appealedfrom?
A:
GR: Once a judgment becomes final and
executory, it can no longer be disturbed,
altered or modified.
XPN: In cases where, because of
supervening events, it becomes imperative,
in the higher interest of justice, to direct its
modification in order to harmonize the
disposition with the prevailing
circumstances or whenever it is necessary
to accomplish the aims of justice.
(Galindez, et al. v. Rural Bank of Lianera,
Inc., G.R. No. 84975, July 5, 1989)
The NLRC is vested with authority to look
into the correctness of the execution of the
decision and to consider supervening
events that may affect such execution.
Where the execution is not in harmony with
the judgment which gives it life and
exceeds it, it has pro tanto no validity. To
maintain otherwise would be to ignore the
constitutional provision against depriving a
person of his property without due process
of law. (SGS Far East Ltd. v. NLRC, G.R.
No. 123948, Feb. 12, 1998)
Note: Although the decision of the Labor Arbiter
has become final, the correctness of the
executionof the decisionmay be appealedto and
reviewedby the NLRC.
 UST GOLDEN NOTES 2010

Q: What are the remedies available to a

third party whose property is being levied
upon in enforcing a decision in a labor
case?

A: 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:
1. File a third party claim with the sheriff
of the Labor Arbiter, and
2. If the third party claim ildeniei1, 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.
(Yupangco Cotton Mills v. NLRC, G.R. No.
126322, Jan. 16, 2002)

Q: Can the RTCissue an injunction against

the NLRC?

A: Generally, no court has the power to

interfere by injunction with judgments of
another court with concurrent/coordinate
jurisdiction. However, the general rule applies
only when no third-party complaint is involved.

Therefore, if a property under levy does not

belong to the judgment debtor in the NLRC
case, it could not be validly levied upon by the
sheriff for the satisfaction of the judgment
therein. If the third-party claimant does not
involve nor grows out of a labor dispute, a
separate action for injunctive relief against
such levy may be maintained in court. (Co
Tuan et al. v. NLRC, G.R. No. 117232, April
22, 1998)
Academics Committee
Chairperson: Abraham D, Genuino II
Vice-Chair for Academics: Jeannie A. Laurentino
Vice-Chair for .Admin & Finance: .AissaCeline H. Luna
Vice-Chair for Layout & Design: Loise Rae G. Naval
Labor Law Committee
SlIl?JectHead' Lester Jay Alan E. Flores II
Assistant SlIl?JectHead' Domingo B. Diviva V

Members:
Rene Francis P. Batalla
Diane Camilla R. Borja
Maria Kristina L Dacayo-Garcia
Christian Nino A. Diaz
Angelo S. Diokno
Genesis R. Fulgencio
Jeanelle C. Lee
J emuel Paolo M. Lobo
Andrew W, Montesa
Maria Maica Angelika Roman

A..4l ••••
Ur~IVERS!TY OF SANTO TOMAS
~. 203
Pacu[tad de rDerecfio Civil '\(\iJV
 DISPUTE SETTLEMENT AND REMEDIES: BUREAU OF LABOR RELATIONS

, BUREAU OF l.ABOR RELATIONS 7. Opposition to application for union or

eBA registration
: ART. 226. BUREAU OF LABOR RELATIONS 8. Violations of or disagreements over
: . (BLR). " c •• any provision of the constitution and
by-laws of union or workers'
Q: What is covered by the BLR's association
jurisdiction and functions? 9. Disagreements' over chartering or
. registration of labor organizations or
A: The BLR no longer handles "all labor the registration of CBAs;
management disputes"; rather its functions 10. Violations of the rights and conditions
and jurisdiction are largely confined to: of membership in a union or workers'
1. Union matters association;
2. Collective bargaining registry and 11. Violations of the rights of legitimate
3. Labor education. labor organizations (LLO), except
interpretation of CBAs;
Note: Jurisdiction over labor management 12. Validity/invalidity of impeachment!
problems or disputes is also exercised by other expulSion/suspension or any
offices: disciplinary action meted against any
1. DOLE Regional Offices officer and member, including those
2. Office of the Secretary of Labor arising from non-compliance with the
3. NLRC reportorial requirements under Rule
4. POEA V;
5. OWWA 13. Such other disputes or conflicts
6. SSS-ECC involving the rights to self-
7. RTWPB organization, union membership and
B. NWPC
CB-
9. Regular courts over intra-corporate
a. Between and among LLO and
disputes.
b. Between and among members of
a union or workers' association.
Q: Who is a mediator-arbiter?
(Sec. 1, Rule XI, Book V, IRR as
amended by D.O. 40-F-03)
A: An officer in the Regional Office or Bureau
authorized to hear, conciliate and decide
Q: What is covered by the phrase "other
representation cases or assist in the
related labor relations disputes"?
disposition of intra or inter-union disputes.

Q: What kinds of cases fall within BLR's

A:
1. Any conflict between:
jurisdiction?
a. A labor union and the employer
(Er); or
A: The BLR has original and exclusive
b. A labor union and a group that is
jurisdiction over:
not a labor organization (LO); or
1. Inter-union disputes
c. A labor union and an individual
2. Intra-union disputes
who is not a member of such
3. Other related labor relations disputes
union
Q: What is the coverage of inter/intra-union
2. Cancellation of registration of unions
disputes?
and worker's associations filed by
individual/s other than its members,
A: They shall include:
or group that is not a LO.
1. Conduct or nullification of election of
union and workers' association
3. A petition for Interpleader involving
officers
labor relations. (Sec. 2, Rule XI, Book
2. Audit!accounts examination of union
V, IRR as amended by D.O. 40-F-03)
or workers' association funds
3. Deregistration of collective bargaining
Q: Who may file a complaint or petition
agreements (CBAs)
involving intrafinter-unlon disputes?
4. Validitylinvalidity of union affiliation or
disaffiliation
A: A legitimate labor organization or its
5. Validity/invalidity of acceptance/ non-
members. (Sec. 5, Rule XI, D.O. 40-03)
acceptance for union membership
6. Validity/invalidity of voluntary
recognition .
 UST GOLDEN NOTES 2010

Q: What if the issue involves the entire Q: What is the extent of the Bureau of
membership? Labor Relations (BLRs) authority?

A: The complaint must be signed by at least A:

30% of the entire membership of the union. 1. It may hold a referendum election
among the members of a union for
Q: What if the issue involves a member the purpose of determining whether
only? or not they desire to be affiliated with
a federation.
A: Only the affected member may file the
complaint. (Sec. 5, Rule XI, D.O. 40-03) 2. But the BLR has no authority to:

a. Order a referendum among

Note: union members to decide
GR: Redress must first be sought within the whether to expel or suspend
union itself in accordance with its constitution union officers.
and by-laws b. Forward a case to the Trade
Union Congress of the
XPN: Philippines for arbitration and
1. Futility of intra-union remedies; decision.
2. Improper expulsion procedure;
3. Undue delay in appeal as to constitute
Q: Is Katarungang Pambarangay applicable
substantial injustice;
to labor disputes?
4. The action is for damages;
5. Lack of jurisdiction of the investigating
body; action for the administrative A: No. Art. 226 of the LC grants original and
agency is patently illegal, arbitrary and exclusive jurisdiction over the conciliation and
oppressive; mediation of disputes grievances or problems
6. Issue is purely a question of law; in the regional offices of the DOLE. It is the
7. Where the administrative agency had Bureau and its divisions (now the NCMB) and
already prejudged the case; and not the Barangay Lupong Tagapamayapa
8. Where the administrative agency was which are vested by law with original and
practically given the opportunity to act exclusive authority to conduct conciliation and
on the case but it did not. mediation proceedings on labor controversies
before endorsement to the appropriate labor
Q: May a decision in an inter/intra-union arbiter for adjudication.
dispute be appealed from? .
Note: ConCiliation-Mediation is now done by the
A: Yes. NCMB, not Bureau Labor Relations.

Q: Within what period mayan appeal to a Q: What are the administrative functions of
decision of the med-arbiter or regional the Bureau Labor Relations (BLR)?
director in an inter/intra-union dispute be
filed? A:
1. Regulation of the labor unions
A: The decision may be appealed by any of
the parties within 10 days from receipt thereof. 2. Keeping the registry of labor unions
(Sec. 16, Rule XI, D.O. 40-03)
3. Maintenance of a file of the CBA
Q: To whom is the decision appealable?
4. Maintenance of a file of all
A: The decision is appealable to the: settlements or final decisions of the
1. Bureau of Labor Relations (BLR): if SC, CA, NLRC and other agencies on
the case originated from the Med- labor disputes
Arbiter or Regional Director;
2. SLE: if the case originated from the
BLR.

UNIVERSITY OF SANTO TOMAS

IJ'acu{taa de lDerecfio CiviC
~.! 205
 DISPUTE SETTLEMENT AND REMEDIES: BUREAU OF LABOR RELATIONS

Q: What are the effects of filing or

pendency of inter/intra-union dispute and
other labor relations disputes?

A:
1. The rights relationships and
obligations of the party-litigants
against each other and other parties-
in-interest prior to the institution of the
petition shall continue to remain
during the pendency of the petition
and until the date of the decision
rendered therein. Thereafter, the
rights, relationships and obligations of
the party-litigants against each other
and other parties-in-interest shall be
governed by the decision ordered.

2. The filing or pendency of any

inter/intra union disputes is not a
prejudicial question to any petition for
certification election, hence it shall
not be a ground for the dismissal of a
petition for certification of election or
suspension of the proceedings for the
certification of election. (Sec. 3, Rule
XI, DO 40-03)

Q: State the rules on appeal in intra/inter-

union disputes.

A:
1. Formal Requirements
a. Under oath
b. Consist of a memorandum of
appeal.
c. Based on either' of the following Academics Committee
grounds: Chairperson: Abraham D. Genuino II
i. Grave abuse of discretion Vice-Chair for Academics: J eannie A. Laurentino
ii. Gross violation of the rules Vice-Chair for .Admin & Finance: Aissa Celine H. Luna
iii. With supporting arguments Vice-Chair for Layout & Destgn: Loise Rae G. Naval
and evidence
2. Period - within 10 days from receipt of
Labor Law Committee
decision.
Subject Head' Lester Jay Alan E. Flores II
3. To whom appealable
a. BLR - if the case originated from Assistant Subject Head' Domingo B. Diviva V
the Med-Arbiter/Regional
Director. Members:
b. SLE - if the case originated from Rene Francis P. Batalla
the BLR. Diane Camilla R. Borja
4. Where Filed - Regional Office or to Maria Kristina L. Dacayo-Garcia
the BLR, where the complaint Christian Nino A. Diaz
originated (records are transmitted to Angelo S. Diokno
the BLR or Sec. within 24 hours from Genesis R. Fulgencio
the receipt of the memorandum of J eanelle C. Lee
appeal). (Rule XI, D. O. 40-03)
Jemuel Paolo M. Lobo
Andrew W. Montesa
Maria Maica Angelika Roman

206
 UST GOLDEN NOTES 2010

r ART. 227. COMPROMISE AGREEMENT DOLE can be repudiated by the

parties by going to the
Q: What is a compromise agreement? Commission.

A: It is a contract whereby the parties, by b.

making reciprocal concessions, avoid litigation GR: a compromise agreement
or put an end to one already commenced. entered into with the assistance. of
DOLE can no longer be repudiated,
Q: May labor standards violations be it becomes final and binding upon
settled by compromise? the parties upon execution.

A: Yes. XPN:
i. In case of non-compliance
Q: What are the substantial requirements of with the compromise
a compromise agreement? agreement
ii. If there is prima facie
A: The compromise agreement must: evidence that the settlement
1. Be freely entered into was obtained through fraud,
2. Not be contrary to law, morals or misrepresentation, or
public. policy coercion.
3. Be reasonable
4. Be approved by the authority before Q: May ULP cases be subject to
whom the case is pending compromise?

Q: What are the formal requirements of A: No.

compromise agreements involving labor
standards cases? - Note: Dire necessity is not an acceptable ground
for annulling a compromise agreement, especially
A: It must be: since it has not been shown that the employees
1. Reduced into writing had been forced to execute them (Ve/oso v.
2. Signed in the presence of the RD or DOLE, GR. No. 87297, Aug.S, 1991).
his duly authorized representative.
Q: When maya compromise be effected?
Note: Although generally, a compromise, once
approved by final .orders of the court' has the A: At any stage of the proceedings and even
force of res judicata between the parties and when there is already a final and executory
should not be disturbed except for vices of judgment. (Art. 2040, Nee)
consent or forgery. A compromise is basically a
contract perfected by mere consent. Consent is .Q: Can the parties enter into a compromise
manifested by the meeting of the offer and the when the final judgment is already in the
acceptance upon the thing and the cause which process of execution?
are to constitute the contract. However, a
compromise agreement is not valid when a party A: No. It cannot be entered into when the final
in the case has not signed the same or when judgment is already in the process of
someone signs for and in behalf of such party execution. (Jesalva, et al. v. Bautista, G.R.
without authority to do so. (Golden Donuts v. Nos. L-11928-11930, Mar. 24,1959)
NLRC, G.R. No. 113666-68, Jan. 19,2000)
Q: What are the options when a
Q: What is
the distinction between a compromise agreement is violated?
compromise agreement with assistance of
DOLE and that entered into without A: Two options:
assistance of the same? 1. Enforce compromise by writ of
execution; or
2. Regard it as rescinded and insist
A: upon original demand.
1. As to validity and binding effect - the
compromise agreement is valid and Q: Can there be waiver of reinstatement?
binding upon the parties on both
instances. A: Yes. Like waivers of money claims, a
waiver for reinstatement may be regarded as a
2. As to repudiation: personal right which must be exercised
a. A compromise agreement entered personally by the workers themselves.
into without the assistance of
UNIVERSiTY OF SANTO TOMAS (~"':~. 207
PacuCtad de <Derecho CiviC .• -
 DISPUTE SETTLEMENT AND REMEDIES:
Note: Not all waivers and quitclaims are invalid
as against public policy. If the agreement was
voluntarily entered into and represents a
reasonablesettlement,it is bindingon the parties
and may not later be disownedsimply becauseof
a change of mind. It is only where there is clear
proof that the waiver was wangled from an
unsuspectingor gullible person, or the terms of
settlement are unconscionableon its face, that
the law will step in to annul the questionable
transaction.But where it is shownthat the person
making the waiver did so voluntarily, with full
understandingof 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. (Periquet v. NLRC, GR No. 91298, June
22, 1990)
Q: Agoy alleged that he applied for
overseas employment as civil engineer
with private respondent. Agoy was
deployed by Eureka Management to Jubail,
SaUdi, mistakenly under the category of
"Foreman". Agoy, having been accepted by
the Royal Commission to work only as a
"Road Foreman", was later asked by
respondent AI-Khodari to sign a new
contract at a reduced salary rate or suffer
tennination and repatriation. Agoy's refusal
to sign the new contract eventually
resulted in his dismissal from employment.
After being paid the remaining balance of
his salary, Agoy executed a Final
Settlement releasing AI-Khodari from all
claims and liabilities. Agoy was finally
repatriated to Manila. Thereafter, he filed a
complaint for illegal dismissal with claims
for payment of salary for the unexpired
portion of his contract, salary differential
and damages against respondents. Is
Agoy's action barred by the Final
Settlement executed by him?
A: No. In our jurisprudence, quitclaims,
waivers or releases are looked upon with
disfavor, particularly those executed by
employees who are inveigled or pressured into
signing them by unscrupulous employers
seeking to evade their legal responsibilities.
The fact that petitioner signed his notice of
termination and failed to make any outright
objection thereto did not altogether mean
voluntariness on his part. Neither did the
execution of a final settlement and receipt of
the amounts agreed upon foreclose his right to
pursue a legitimate claim for illegal dismissal.
Moreover, it is noteworthy that petitioner lost
no time in immediately pursuing his claim
against private respondents by filing his
complaint for illegal dismissal a month after
being repatriated on April 2, 1990. This is
203
COMPROMISE AGREEMENTS
hardly expected from someone who voluntarily
'-.
consented to his dismissal, thus, completely
negating the conclusion that petitioner's
consent was given freely and bolstering the
claim that the same was obtained through
force and intimidation. (Agoy v. NLRC, G.R.
No. 112096, Jan. 30, 1996)
Q: What are the requirements of a valid
quitclaim?
A:
1. The quitclaim must be voluntarily
arrived at by the parties
2. It must be:with the assistance of the
BLR or any representative of the.
DOLE
3. The consideration must be
reasonable (required only when
entered without the assistance of
DOLE)
Q: Warlito was a cook aboard the vessel
plying overseas. He filed a complaint for
unpaid money claims and damages against
the manning agency. During the pendency
of the case, Warlito, against the advice of
his counsel, entered into a compromise
agreement with petitioners. He sig'ned a
Quitclaim and Release subscribed and
sworn to before the Labor Arbiter. What is
the effect of the compromise agreement
entered into without the assistance of the
counsel?
A: Art. 227 of the Labor Code provides: Any
compromise settlement, including those'
involving labor standard laws, voluntarily
agreed upon by the parties with the assistance
of the Dep't of Labor, shall be final and binding
upon the parties. The NLRC or any court shall
not assume jurisdiction over issues involved
therein except in case of non-compliance
thereof or if there is prima facie evidence that
the settlement was obtained through fraud,
misrepresentation or coercion.
In the case at bar, that Warlito. was not
assisted by his counsel when he entered into
the compromise does not render it null and
void. All that is required for the compromise to
be deemed volu.ntarilyentered into is personal
and specific individual consent. Contrary to
Warlito's contention, the employees counsel
need not be present at the time of the signing
of the compromise agreement. (J-PHIL
Marine, Inc. VS. NLRC, G.R. No. 175366,
Aug. 11, 2008, J. Carpio-Morales)
 UST GOLDEN NOTES 2010

Q: Complainants were members of the XPN: Those provided under Art. 218
KMDD-CFW, a union in the petitioner (Powers of the NLRC) and Art. 264
company, whose CSA with the corporation (Prohibited Activities) of the Labor Code.
expired. During the freedom period, the
parties were able to agree on the rules Note: Regular courts have no jurisdiction to hear
regarding the negotiation. On the date of and decide questions which arise and are
the negotiation, petitioner was late, thus incidental to the enforcement of decisions, orders
prompting the union panel to walkout. or awards rendered in labor cases by appropriate
Petitioner company sent a letter of apology officers and tribunals of the DOLE. Corollary, any
controversy in the execution of the judgment shall
but the union answered that it was
be referred to the tribunal which issued the writ of
declaring the negotiation deadlock. Hence,
execution since it has the inherent power to
the union struck. As a result;;) petitipner
control its own processes in order to enforce its
company filed a complaint for injunction
judgments and orders. (Nova v. Judge Dames,
and for the dismissal the union officers and AM. No. RTJ-00-1S74, Mar. 28, 2001)
members who participated. In the process,
a compromise agreement was entered into Q: What is the rationale for the prohibition
by the KMDD-CFW and petitioner which on Injunction?
provides that execution of the said
Agreement constitutes a general waiver or A: Injunction contradicts the constitutional
release/quitclaim by them and for payment preference for voluntary modes of dispute
of separation pay to the strikers. Is the settlement.
compromise agreement entered into by the
union binding to its members? Q: Who are those entities authorized to
issue injunction orders or restraining
A: No. Even if a clear majority of the union orders?
members agreed to a settlement with the
employer, the union has no authority to A:
compromise the individual claims of members 1. NLRC
who did not consent to such settlement. In the 2. SLE
case at bar, minority union members did not 3. The President
authorize the union to compromise their
individual claims. Absent a showing of the Q: Can the NLRC entertain an action for
union's special authority to compromise the injunction even without a complaint for
individual claims of private respondents for illegal dismissal filed before the Labor
reinstatement and back wages, there is no Arbiter (LA)?
valid waiver of the aforesaid rights.
A: No. It is an essential requirement that there
Thus, money claims due to laborers cannot be must first be a labor dispute between the
the object of settlement or compromise contending parties before the LA. The power
effected by a union or counsel without the of the NLRC to issue an injunctive writ
specific individual consent of each laborer originates from "any labor dispute" upon
concerned. The beneficiaries are the individual application by a party thereof, which
complainants themselves. The union to which application if not granted "may cause grave or
they belong can only assist them but cannot irreparable damage to any party or render
decide for them. (Go/den Donuts v. NLRC, ineffectual any decision in favor of such party."
G.R. No. 113666-68, Jan. 19,2000) (PAL v. NLRC, GR No. 120567, Mar.20, 1998)

Note: Labor dispute includes controversy or

! ART. 254 NO INJUNCTION RULE
Q: Can temporary or permanent injunction
or restraining order be issued in any case
involving the growing labor dispute?
A:
GR: No temporary or permanent injunction
Orrestraining order in any case involving or
growing out of labor disputes shall be
issued by any court or other entity.
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 Er and Ee. (Art.
212[1])

UNIVERSITY OF SANTO TOMAS

~"":'-'.209
Pacu(taa ae Derecho CiviC ''1'
 DISPUTE SETTLEMENT AND REMEDIES: COMPROMISE AGREEMENTS

Q: Can regular courts issue injunctions?

A:
GR: Regular courts are without authority to
issue injunction orders in cases involving or
originating from labor disputes even if the
complaint was filed by non-striking
employees and the employer was made a
respondent.

XPN: In cases of strikes/picketing, third

parties or innocent bystanders may secure
a court (regular court) injunction to protect
their rights. (PAFLU v. Claribel, GR. No. L-
25171, Aug. 17, 1967)

Note: The "by-stander" establishment which

is entitled to enjoin a labor strike or picket
must be entirely different from, without any
connection whatsoever to, either party to the
dispute.

Academics Committee
Chairperson: Abraham D. Genuine II
Vice-Chair for Academics: Jeannie i1.. Laurentino
Vice-Chair for Admin & Finance: Aissa Celine H. Luna
Vice-Chair for Layout & Design: Loise Rae G. Naval

Labor Law Committee

Subject Head: Lester Jay Alan E. Flores II
Assistant SlIo/ect Head: Domingo B. Diviva V

Members:
Rene Francis P. Batalla
Diane Camilla R. Borja
Maria Kristina L. Dacayo-Garcia
Christian Nino A. Diaz
Angelo S. Diokno
Genesis R. Fulgencio
J eanelle C. Lee
J emuel Paolo M. Lobo
Andrew W. Montesa
Maria Maica Angelika Roman

210
 UST GOLDEN NOTES 2010
r ART. 260. GRIEVANCE MACHINERY AND Note: Although Art. 260 of the Labor Code
: VOLUNTARY ARBITRATION mentions "parties to a CSA", it does not mean
that a grievance machinery cannot be set up in a
Q: How are cases arising from the CBA-Iess enterprise. In any workplace where
Interpretation or implementation of CBAs grievance can arise, a grievance machinery can
handled and disposed? be established.

A: They are disposed through the grievance Q: What is grievance procedure?

machinery and if not resolved by the grievance
machinery, through voluntary arbitration. (1995 A: It refers to the internal rules of procedure
Bar Question) established by the parties in their CSA which
usually consists of successive steps starting at
Q: What is grievance? the level of the complainant and his immediate
.:\
supervisor and ending, when necessary, at the
A: It is any question by either the ~~PIOy~r or level of the top union and company officials
the union regarding the interpretation or and with voluntary arbitration as the terminal
implementation of any provision of the CSA or step.
interpretation or enforcement of company
personnel policies. (Sec. 1 lui, Rule I, Book V, Q: What will happen to grievances
IRR) submitted to the grievance machinery
which are not settled within 7 calendar
Q: What provrsrons must the parties days from the date of their submission?
include in a CBA?
A: They shall automatically be referred to
A: voluntary arbitration prescribed in the CSA.
1. Provisions that will ensure the mutual (Art. 260, par. 2, Labor Code)
observance of its terms and
conditions. Either party may serve notice upon the other of
2. A machinery for adjustment and its decision to submit the issue to voluntary
resolution of grievances arisinq from arbitration (VA):
the: 1. If the party upon whom such notice is
a. Interpretation/implementation of served fails/refuses to respond within
the CSA and 7 days from receipt, VA/panel
b. Interpretation! enforcement of designated in the CSA shall
company personnel policies. (Art. commence arbitration proceedings
260, par. 1). 2. If the CSA does not designate or if
the parties failed to name the
Q: What is grievance machinery? VA/panel, the regional branch of
NCMS appoints VA/panel
A: It refers to the mechanism for the
adjustment and resolution of grievances Q: What is voluntary arbitration?
arising from the interpretation or enforcement
of company personnel policies. It is part of the A: It refers to the mode of settling labor
continuing process of collective bargaining management disputes by which the parties
(CS). select a competent, trained and impartial third
person who shall decide on the merits of the
Note: It is a must provision in any CBA and no case and whose decision is final and
collective agreement can be registered in the executory. (Sec. 1 {d}, Rule II, NCMB Revised
absence of such procedure. Procedural Guidelines in the Conduct of
Voluntary Arbitration Proceedings, Oct. 15,
Q: How is grievance machinery 2004)
established?
Q: What is the difference between
A: compulsory and voluntary arbitration?
1. Agreement by the parties
2. A grievance committee - composed A: Compulsory arbitration is a system whereby
of at least 2 representatives each the parties to a dispute are compelled by the
from the members of the bargaining government to forego their right to strike and
unit and the employer, unless are compelled to accept the resolution of their
otherwise agreed upon by the parties dispute through arbitration by a 3'd party. The
- shall be created within 10 days from essence of arbitration remains since a
the signing of CSA resolution of a dispute is arrived at by resort to

UNIVERSiTY OF SANTO TOMAS t!" .•.•..•• 211

fF"acu{taa de Vereclio Civi] ~.
 DISPUTE SETTLEMENT AND REMEDIES:
'GRIEVANCE MACHINERY & VOLUNTARY ARBITRATION

a disinterested third party whose decision is

effect a voluntary settlement between
final and binding on the parties, but in parties. (Art. 262-A)
compulsory arbitration, such a third party is
normally appointed by the government.
Q: How is arbitration initiated?

Under voluntary arbitration, on the other hand, A:

referral of a dispute by the parties is made,
1. Submission agreement - Where the
pursuant to a voluntary arbitration clause in
parties define the disputes to be
.their collective agreement, to an impartial third resolved
person for a final and binding resolution.
2. Demand notice - Invoking collective
Ideally, arbitration awards are supposed to be
agreement arbitration clause
complied with by both parties without delay,
such that once an award has been rendered
Q: How is a voluntary arbitrator (VA)fpanel
by an arbitrator, nothing is left to be done by chosen?
both parties but to comply with the same. After
all, they are presumed to have freely chosen A:
arbitration as the mode of settlement for that
1. The parties in a CBA shall desiqnate
particular dispute. Pursuant thereto, they have
in advance a VA/panel, preferably
chosen a mutually acceptable arbitrator who
from the listing of qualified VAs duly
shall hear and decide their case. Above all, accredited by the NCMB, or
they have mutually agreed to be bound by said 2. Include in the agreement a procedure
arbitrator's decision (Luzon Dev't Bank v.
for the selection of such VA or panel
Ass'n of Luzon Dev't Bank Ees, GR. No.
of VAs, preferably from the listing of
120319, Oct. 6, 1995)
qualified VAs duly accredited by the
NCMB. (Art. 260, par.3)
Q: What is the basis for voluntary
arbitration and its rationale?
Q: Who will deSignate the voluntary
A: The State shall promote the principle of arbitrator (VA)/panel in case the parties fail
shared responsibility between workers and to select one?
employers and the preferential use of
voluntary modes in settling disputes, including A: It is the NCMB that shall deslqnate the
conciliation, and shall enforce their mutual VA/panel based on the selection procedure
compliance therewith to foster industrial peace provided by the CBA. (Manila Central Line
(Sec. 3, Art. XIII, 1987 Constitution).
Free Workers Union v. Manila Central Line
Corp., G.R. No. 109383, June 15, 1998)
Q: Who Is a voluntary arbitrator (VA)? Q: May Labor Arbiters (LA) be deSignated
as voluntary arbitrators (VA)?
A:
1. Any person accredited by the NCMB A: Yes. There is nothing in the law that
as such prohibits LAs from also acting as VAs as long
2. Any person named or designated in as the parties agree to have him hear and
the CSA by the parties to act as their decide their dispute. (Manila Central Line Free
VA
Workers Union v. Manila Central Line Corp.,
3. One chosen with or without the G.R. No. 109383, June 15, 1998)
assistance of the NCMS, pursuant to
a selection procedure agreed upon in
the CBA
4. Any official that may be authorized by
the SLE to act as VA upon the written
request and agreement of the parties
to a labor dispute. (Art. 212 (nJ)

Q: What are the powers of a voluntary

arbitrator?

A:
1. Hold hearings
2. Receive evidence
3. Take whatever action necessary to
resolve the dispute including efforts to

212
 UST GOLDEN NOTES 2010

r ART.261. JURISDICTION OF VOLUNTARY of the courts. Such matters on fact and law a e
i ARBITRATORS OR PANEL OF conclusive.
VOLUNTARY ARBITRATORS
ART.262. JURISDICTION OVER OTHER Q: Are both the employer and the
. '. LABOR DISPUTES bargaining representative of the employees
required to go through the grievance
Q: What cases are within the jurisdiction of machinery in case a grievance arises?
VA?
A: Yes, because it is but logical, just and
A: Original and exclusive jurisdiction over: equitable that whoever is aggrieved should
1. All unresolved grievances arisinq initiate settlement of grievance through the
from the: grievance machinery. To impose compulsory
a. Implementation or ~terpr~tation procedure on employers alone would be
of the CSA oppressive of capital.
b. Interpretation or enforcement of
company personnel policies Q: Who has jurisdiction over actual
termination disputes and complaints for
2. Wage distortion issues arising from illegal dismissal filed by workers pursuant
the application of any wage orders in to the union security clause?
organized establishments
A: The Labor Arbiter and not the grievance
3. Those arising from interpretation and machinery.
implementation of productivity
incentive programs under RA 6971 Q: What is the nature of the power of a
voluntary arbitrator?
4. Violations of CBA provisions which
are not gross in character are no A: Arbitrators by the nature of their functio s,
longer treated as ULp'and shall be act in a quasi-judicial capacity (BP 129, as
resolved as grievances under the amended by R.A. 9702); where a question '
CBA law is involved or there is abuse of discretio
courts will not hesitate to pass upon review
Note: Gross violation of CSA provisions their acts.
shall mean flagrant and/or malicious
refusal to comply with the economic Q: Are decisions of voluntary arbitrators
provisions of such agreement. (VAs) appealable?

5. Any other labor disputes upon A:

agreement by -the parties including GR: Decisions of VA are final and execut
ULP and bargaining deadlock. (Art. after 10 calendar days from receipt of e
262) copy of the award or decision by the parties.
(Art. 262-A)
Q: May the NLRC and DOLE entertain
disputes/grievances/matters under the XPN:
exclusive and original jurisdiction of the 1. Appeal to the CA via Rule 43 of e
voluntary arbitrator? Rules of Court within 15 days fro
the date of receipt of VA's decisi
A: No. They must immediately dispose and (Luzon Dev't Bank v. Ass'n of Luz n
refer the same to the grievance machinery or Dev't Bank Ee's, G.R. No. 120319.
voluntary arbitration provided in the CSA Oct. 6, 1995)
2. If decision of CA is adverse to a
The parties may choose to submit the dispute party, appeal to the SC via Rule 45
to voluntary arbitration proceedings before or on pure questions of law.
at the stage of compulsory arbitration
proceedings. Note: A VA by the nature of her functions acts i
quasi-judicial capacity. There is no reason .'
Q: What is the effect of the award of the VA's decisions involving interpretation of lav,
voluntary arbitrator (VA)? should be beyond the SC's review. Administrati e
A: The decision or award of the VA acting officials are presumed to act in accordance w .
within the scope of its authority shall determine law and yet the SC will not hesitate to pass up
the rights of the parties and their decisions their work where a question of law is involved o'
shall have the same legal effects as judgment where a showing of abuse of authority
discretion in their official acts is properly raised in
petitions for certiorari. (Continental Marble
UNIVERSITY OF SANTO TOMAS ~;;') 213
Pacu{tad de C])erecfzo Civil .~.
 DISPUTE SETTLEMENT AND REMEDIES:
GRIEVANCE MACHINERY & VOLUNTARY ARBITRATION

Corporation v. NLRC, G.R. No. L-43825, May 9, Does the LA have jurisdiction over the
1988) case?

Q: PSSLU had an existing CBA with Sanyo A: Yes, the LA has jurisdiction. The dismissal
Phils., Inc. which contains a union security of X does not call for the interpretation or
clause which provides that: "all members enforcement of company personnel policies
of the union covered by this agreement but is a termination dispute which comes
must retain their membership in good under the jurisdiction of the LA. The dismissal
standing in the union as condition of his I of X is not an unresolved grievance. Neither
her continued employment with the does it pertain to interpretation of company
company." On account of anti-union personnel policy. (Maneja v. NLRC, G.R. No.
activities, disloyalty and for joining another 124013, June 5, 1998)
union, PSSLU expelled 12 employees (Ees)
from the Union. As a result, PSSLU Q: Sime Darby Salaried Employees (Ees)
recommended the dismissal of said Ees Association-ALU (SDSEA-ALU) wrote
pursuant to the union security clause. petitioner Sime Darby Pilipinas (SOP)
Sanyo approved the recommendation and demanding the implementation of a
considered the said Ees dismissed. performance bonus provision identical to
Thereafter, the dismissed Ees filed with the the one contained in their own CBA with
Arbitration Branch of the NLRC a complaint SOP. Subsequently, SOP called both
for illegal dismissal. respondent SOEA and SOEA-ALU to a
meeting wherein the former explained that
Does the voluntary arbitrator (VA) have it was unable to grant the performance
jurisdiction over the case? bonus. In a conciliation meeting, both
parties agreed to submit their dispute to
A: No, the VA has no jurisdiction over the voluntary arbitration. Their agreement to
case. Although the dismissal of the Ees arbitrate stated, among other things, that
concerned was made pursuant to the union they were "submitting the issue of
security clause provided in the CBA, there was performance bonus to voluntary
no dispute whatsoever between PSSLU and arbitration .••
Sanyo as regards the interpretation or
implementation of the said union security Does the voluntary arbitrator (VA) have the
clause. Both PSSLU and Sanyo are united and power to pass upon not only the question
have come to an agreement regarding the of whether to grant the performance bonus
dismissal of the Ees concerned. Thus there is or not but also to determine the amount
no grievance between the union and thereof?
management which could be brought to the
grievance machinery. The dispute is between A: Yes, in their agreement to arbitrate, the
PSSLU and Sanyo, on the one hand, and the parties submitted to the VA "the issue of
dismissed union members, on the other hand. performance bonus." The language of the
The dispute therefore, does not involve the agreement to arbitrate may be seen to be quite
interpretation or implementation of a CBA. cryptic. There is no indication at all that the
(Sanyo Philippines Workers Union-PSSLU v. parties to the arbitration agreement regarded
Canizares, G.R. No. 101619, July 8, 1992) "the issue of performance bonus" as a two-
tiered issue, only one tier of which was being
Q: X was employed as telephone operator submitted to arbitration. Possibly, Sime
of Manila Midtown Hotel. She was Darby's counsel considered that issue as
dismissed from her employment for having dual aspects and intended in his own
committing the following violations of mind to submit only one of those aspects to
offenses subject to disciplinary actions, the VA, if he did, however, he failed to reflect
namely: falsifying official documents and his thinking and intent in the arbitration
culpable carelessness-negligence or failure agreement. (Sime Darby Phils. v. Magsalin,
to follow specific instructions or G.R. No. 90426, Dec. 15, 1989)
established procedures. X then filed a
complaint for illegal dismissal with the
Arbitration branch of the NLRC. The Hotel
challenged the jurisdiction of the Labor
Arbitrator (LA) on the ground that the case
falls within the jurisdictional ambit of the
grievance procedure and voluntary
arbitration under the CBA.

214
 UST GOLDEN NOTES 2010

Q: Apalisok, production chief for RPN

Station, was dismissed due to her al/eged
hostile, arrogant, disrespectful, and defiant
behavior towards the Station Manager. She
informed RPN that she is waiving her right
to resolve her case through the grievance
machinery as provided in the CBA. The
voluntary arbitrator (VA) resolved the case
in the employees (Ees) favor.

On appeal, the CA ruled in favor of RPN

because it considered the.1waiver of
petitioner to file her complaint"before the
grievance machinery as a relinquishment
of her right to avail herself of the aid of the
VA. The CA said that the waiver had the
effect of resolving an otherwise unresolved
grievance, thus the decision of the VA
should be set aside for lack of jurisdiction.
Is the ruling of the CA correct?

A: No. Art. 262 of the Labor Code provides

that upon agreement of the parties, the VA can
hear and decide all other labor disputes.

Contrary to the finding of the CA, voluntary

arbitration as a mode of settling- the dispute
was not forced upon respondents. Both
parties indeed agreed to submit the issue of
validity of the dismissal of petitioner to the
jurisdiction of the VA by the Submission
Agreement duly signed by their respective
counsels. The VA had jurisdiction over the
parties' controversy.

The Ees waiver of her option to submit her

case to grievance machinery did not amount to
relinquishing her right to avail herself of
voluntary arbitration. (Apa/isok v. RPN, G.R.
No. 138094, May 29, 2003, J. Carpio-Morales)
Academics Committee
Chairperson: Abraham D. Genuine I.
Vice-Chair far Academics: Jeannie A. Laurentino
Via-Char far Admin & Finance: Aissa Celine H. LUrl2
Vice-Chair far Layout & Design: Loise Rae G. Naval

Labor Law Committee

Subject Head' Lester Jay Alan E. Flores II
.Assistant SlIo/ect Head' Domingo B. Diviva \-

Members:
Rene Francis P. Batalla
Diane Camilla R. Borja
Maria Kristina L. Dacayo-Garcia
Christian Nino A. Diaz
Angelo S. Diokno
Genesis R. Fulgencio
J eanelle C. Lee
J emuel Paolo M. Lobo
Andrew \'1;'.Montesa
Maria Maica Angelika Roman

UNIVERSITY OF SANTO TOMAS \;;;:/ 215

'Facu[tad de CDerecfio Civil -.-
 TRANSITORY AND FINAL PROVISIONS

, TRANSITORY AND FINAL PROVISIONS from the date of effectivity, in

accordance with IRR; otherwise, they
Q: What are the penalties provided for in shall be forever barred.
Art. 288 of the Labor Code?
5. Workmen's compensation claims
A: accruing prior to the effectivity of the
GR: Any violation of the provisions of the LC and between Nov. 1, 1974 - Dec.
LC declared to be unlawful or penal in 31, 1974 shall be filed not later than
nature shall be punished with: Mar. 31, 1975 before the appropriate
1. Fine - Not less than P1, 000.00 nor regional offices of the Department of
more than P10, 000.00; or Labor. (Art. 291)
2. Imprisonment - Not less 3 months or
more than 3 years, or 6. Illegal dismissal cases - 4 years. It
commences to run from the date of
3. Both fine and imprisonment at the formal dismissal. (Mendoza v. NLRC,
discretion of the court. G.R. No. 122481, Mar.5, 1998)

4. In addition to such penalty, any alien Q: What is the rule on institution of money
found guilty shall be summarily claims?
deported upon the completion of
service of sentence. A: Money claims shall be filed before the
appropriate entity independent of the criminal
XPN: As otherwise provided in the LC, or action that may be instituted in the proper
the acts complained of hinge on a question courts. (Art. 292)
of interpretation or implementation of
ambiguous provisions of an existing CBA. Pending the final determination of money
claims cases filed, no civil action ariSing from
Q: Which court has jurisdiction over any the same cause of action shall be filed with
criminal offense punished under the Labor any court. This provision shall not apply to
Code? employees compensation cases.

A: It shall be under the concurrent jurisdiction

of the Municipal or City Court and the RTC.

Q: Who are liable when the offenses are & . ......,.~.~:.

committed by persons other than natural

persons? Academics Committee
Chairperson: Abraham D. Genuino II
A: If the offense is committed by a corporation, Vice-Chair for Academics: ] eannie A. Laurentino
trust, firm, partnership, association, or any Vice-Cbair for Admin & Finance: Aissa Celine H. Luna
other entity - the penalty is imposed upon the Vice-Chair for Layo«: & Design: Loise Rae G. Naval
guilty officer or officers of such corporation,
trust, firm, partnership, association or entity.
Labor Law Committee
Q: Give the rules as regards the Subject Head: Lester] ay Alan E. Flores II
prescriptive period provided for in the Assistant Subject Head' Domingo B. Diviva V
Labor Code (LC).
Members:
A: Rene Francis P. Batalla
1. Offenses penalized under the LC - 3 Diane Camilla R. Borja
years Maria Kristina L. Dacayo-Garcia
Christian Nino A. Diaz
2. ULP - one (1) year from accrual of Angelo S. Diokno
such ULP; otherwise, forever barred. Genesis R. Fulgencio
(Art. 290);
J eanelle C. Lee
Jemuel Paolo M. Lobo
3. Money claims - 3 years from the time
the cause of action accrued; Andrew W. Montesa
otherwise forever barred. Maria Maica Angelika Roman

4. All money claims accruing prior to the

effectivity of the LC - within 1 year

216
 UST GOLDEN NOTES 2010

SOCIAL LEGISLATION The SC ruled in Jackson Building-

Q: What is Social Legislation?
A: It consists of statutes, regulations and
jurisprudence that afford protection to labor,
especially to working women and minors, and
is in full accord with the constitutional
provisions on the promotion of social justice to
insure the well being and economic security of
all the people.
Condominium Corp. v. NLRC, GR. No.
112546, March 13,1996, interpreting P.D.851,
as follows: Ees are entitled to the 13th month
pay benefits regardless of their designation
and irrespective of the method by which their
wages are paid. (1998 Bar Question)
Note: An Er, may give to his Ees % of the
required ia" Month pay before the opening of the
regular school yr. and the other half on or before
the Dec. 24.

th
Q: Is 13 Month Pay legally demandable?

A: Yes. It is a statutory obligation, granted to

Q: What is 13th month payor its covered Ees, hence, demandable as a matter
equivalent? of right. (Sec 1, P.O. 851)

A: Additional income based on wage required Q: In what form is the 13th month pay paid
by P.O. 851 which is equivalent to 1/12 of the or given?
total basic salary earned by an employee (Ee)
within a calendar year. A: It is given in the form of:
1. Christmas Bonus
Q: Who are covered by P.O. 851? 2. Midyear Bonus
3. Profit Sharing Scheme
A: 4. Other Cash bonuses amounting to
GR: All rank-and-file Ees regardless of the not less than 1/12 of its basic salary
amount of basic salary that they receive in
a month, if their employers (Er) are not Note: It must always be in the form of a legal
otherwise exempted from paying the 13th tender.
month pay. Such Ees are entitled to the
th
13 month pay regardless of said Q: What are not proper substitutes for 13th
designation of employment status, and Month pay?
irrespective of the method by which their
wages are paid. A:
1. Free rice
Provided, that they have worked for at least 2. Electricity
1 month, during a calendar year. (Revised 3. Cash and stock dividends
Guidelines on the Implementation of the 4. COLA (Sec. 3)
13th Month Pay Law)
Q: Concepcion Textile Co. included the OT
XPN: pay, night-shift differential pay, and the like
1. Government Ees in the computation of its Ees' 13th-month
2. Household helpers pay. Subsequently, with the promulgation
3. Ees paid purely on commission basis of the decision of the SC in the case of
4. Ees already receiving 13th month pay SMC vs. Inciong (103 SCRA 139) holding
that these other monetary claims should
Q: What would be your advice to your not be included in the computation of the
client, a manufacturing company, who asks 13th month pay, Concepcion Textile Co.
for your legal opinion on whether or not the sought to recover under the principle of
13th Month Pay Law covers a 'casual Ee solutio indebiti the overpayment of the Ees'
who is paid a daily wage? 13th-month pay, by debiting against future
13th-month payments whatever excess
A: I will advise the manufacturing company to amounts it had previously made.
pay the casual Ee 13th Month Pay if such
casual Ee has worked for at least 1 month (1) Is the Company's action tenable?
during a calendar year. The law on the 13th (2) With respect to the payment of the 13th-
Month Pay provides that Ees are entitled to the month pay after the SMC ruling, what
benefit of said law regardless of their arrangement, if any, must the Company
designation or employment status. make in order to exclude from the 13th-
month pay all earnings and remunerations
other than the basic pay?

UNIVERSiTY OF SANTO TOMAS '(~. 217

Pacu{tad de CDerecfio Civil .•.
 SOCIAL LEGISLATION: 13TH MONTH PAY LAw

A: The Company's action is not tenable. The Q: What is commission in relation to 13th
principle of solutio indebiti which is a civil law month pay?
concept is not applicable in labor law. (Davao
Fruits Corp. vs. NLRC, et el., G.R. No. 85073 A:
August 24, 1993). After the 1981 SMC ruling, 1. The salesman's commissions,
the High Court decided the case of Philippine comprising a pre-determined percent
Duplicators Inc. VS. NLRC, GR 110068, Nov. of the selling price of the goods sold
11, 1993. Accordingly, management may by each salesman, were properly
undertake to exclude sick leave, vacation included in the term basic salary for
leave, maternity leave, premium pay for purposes of computing their 13th
regular holiday, night differential pay and cost month pay.
of living allowance. Sales commissions,
however, should be included based on the 2. The so called commission paid to or
settled rule as earlier enunciated in Songco VS. received by medical representatives
NLRC, G.R. No. L-50999, March 23, 1990. of BoieTakeda Chemicals or by the
(1994 Bar Question) rank and file Ees of Phil. Fuji Xerox
were excluded from the term basic
Q: What is basic salary? salary because these were paid as
productivity bonuses. Such bonuses
A: Basic salary shall include all remunerations closely resemble profit sharing,
or earnings paid by an Er to an Ee for services payments and have no clear, direct,
rendered but may not include: necessary relation to the amount of
work actually done by each individual
1. Cost-of-living allowances (COLA) employee.
2. Profit-sharing payments
All allowances and monetary benefits Q: Are all Ers required to pay 13th Month
which are not considered or Pay under P.O. 851?
integrated as part of the regular or
basic salary of the employee at the A:
time of the promulgation of P.O. 851 GR: Yes. It applies to all Ers,
on Dec. 16, 1975. (SMC v. Inciong,
G.R. No. 80774, May 2, 1981) XPN:
3. Commissions, if it is not an integral 1. Distressed Ers:
part of the basic salary (Phlippine a. Currently incurring substantial
Duplicators, Inc. v. NLRC, GR. No. losses or
109455. November 11, 1993) b. In the case of non-profit
institutions and organizations,
Note: However, these salary related benefits (i.e. where their income, whether
cash equivalent of unused vacation and sick from donations, contributions,
leave credits, OT, premium, night differential and grants and other earnings from
holiday pay) should be included in the any source, has consistently
computation of the 13th month pay if by individual declined by more than 40% of
or collective agreement, company practice, or their normal income for the last 2
policy, the same are treated as part of the basic years, subject to the provision of
salary of the Ees. Sec. 7 of P.O. 851;

Salesmen's cornrmssion, comprising a

2. The Government and any of its
predetermined percent of the selling price of the
political subdivisions, including
goods by each salesman are not included in the
GOCCs, except those corporations
term "basic salary" for purposes of computing the
operating essentially as private
13th month pay (Philippine Duplicators, Inc. v.
NLRC,[1995]) However, commissions of medical subsidiaries of the Government;
representatives are not salesmen because they
did not effect any sale of article at all; additional 3. Ers already paying their Ees 13-
payments partook of the nature of profit-sharing month payor more in a calendar year
bonuses (80ie- Takeda Chemicals, Inc. v. Dela of its equivalent at the time of this
Serna, G.R. No. 92174, Dec. 10, 1993) issuance:

4. Its equivalent shall include:

a. Christmas bonus
b. Mid-year bonus
c. Profit-sharing payments
and
 UST GOLDEN NOTES 2010

d. Other cash bonuses

amounting to not less Note: Ees paid a fixed or guaranteed
than 1/12th of the basic wage plus commission are also entitleo
salary but to the mandated 13th month pay, based
5. It shall not include: on their total earnings during the
a. cash and stock calendar year, i.e. on both their fixed 0
dividends, guaranteed wage and commission
b. COLA
c. all other allowances 2. Those with Multiple Ers
regularly enjoyed by the Government Ees working part time i
Ee, as well as non- a private enterprise, including private
monetary benefits. educational institutions, as well as
~) :: Ees working in 2 or more private
4. Ers of household helpers and firms, whether full or part time basis,
persons in the personal service of are entitled to the required ia" month
another in relation to such workers; pay from all their private Ers
and regardless of their total earnings from
each or all their Ers.
5. Ers of those who are paid on purely
commission, boundary, or task basis, 3. Private School Teachers, including
and those who are paid a fixed faculty members of universities and
amount for performing a specific colleges - entitled regardless of the
work, irrespective of the time number of months they teach or are
consumed in the performance paid within a year, if they have
thereof, except where the workers are rendered service for at least 1 mont
paid on piece-rate basis in which within a year.
case the employer shall be covered
by this issuance insofar as such 4. Resigned or Separated Ees - I
workers are concerned.(Sec 3, P.O. resigned or separated from wo
851) before the time of payment of 13c'
month pay, entitled to monetary
Q: What are the options of covered Ers? benefit in proportion to the lengt c'
time he started working during r e
A: calendar year up to the time '
1. Pay one-half of the 13th-month pay resignation or termination of service
required before the opening of the (Pro-rated 13th month pay)
regular school year and the other half
on or before the 24th day of Q: When does pro-ration of 13th Month Pay
December of every year. apply?
2. In any establishment where a union
has been recognized or certified as A:
the collective bargaining agent of the GR: Pro-ration of this benefit applies 0 I
Ee, the periodicity or frequency of in cases of resignation or separation fro
payment of the 13th month pay may work; computation should be based 0
be the subject of agreement. length of service and not on the actual
wage earned by the worker (Honda Phi/s.
Q: How are claims adjudicated? v. Samahan ng Manggagawa sa Honda,
G.R. No. 145561, June 15, 2005)
A: Non-payment of the 13th month pay XPN: Ees who are paid a guaranteed
provided by P.O. 851 and the rules of NLRC minimum wage or commissions earned are
shall be treated as money claims cases. entitled to 13th month pay based on total
earnings. (Philippine Agricultural
Q: Are the following Ees entitled to ia" Commercial and Industrial Workers Union
month pay? v. N~RC, G.R. No. 107994, Aug. 14, 1995)
a. Ees who are paid by results Q: Is 14 Month Pay legally demandable?
b. Ees with multiple Ers
c. Private school teachers A: No. The granting of 14th month pay is a
d. Resigned or separated Ees management prerogative and is not legally
demandable. It is basically a bonus and is
A: gratuitous in nature. (Kamaya Point Hotel v.
1. Ee paid by results - entitled to 13th NLRC, G.R. No. 75289, Aug. 31, 1989)
month pay.

UNIVERSITY OF SANTO TOMAS' (~) 219

Pacu{taa ae (])erecno ciou .~.
 SOCIAL LEGISLATION: ANTI-SEXUAL HARRASMENT LAw

r-'~.'~1#31'i.jll!~!3~"If;Wj Likewise, it is not essential that the demand,

request or requirement be made as a condition
Q: What is the policy of the State in for continued employment or for promotion to a
enacting the Anti-Sexual Harassment law? higher position. It is enough that the
respondent's acts result in creating an
A: The State shall: intimidating, hostile or offensive environment
1. Value the dignity of every individual for the employee. (Domingo v. Rayala, G.R.
2. Enhance the development of it No. 155831, Feb. 18,2008)
human resources
3. Guarantee full respect for human Q: When is sexual harassment committed?
rights and
4. Uphold the dignity of workers, Ee, A: Specifically:
applicants for employment, students 1. In a work-related or employment
or those undergoing training, environment:
instruction or education. (Sec. 2) a. The sexual favor is made as a
condition in the hiring or in the
Q: Who may be held liable for sexual employment, re-employment or
harassment? continued employment of said
individual, or in granting said
A: In a work, education or training-related individual favorable
environment sexual harassment may be compensation, terms, conditions,
committed by an: promotions, or privileges; or the
1. Ee refusal to grant the sexual favor
2. Manager results in limiting, segregating or
3. Supervisor, classifying the Ee which in a way
4. Agent of the (Er), would discriminate, deprive or
5. Teacher, instructor, professor diminish employment
6. Coach, trainer, or opportunities or otherwise
7. Any other person who, having adversely affect said Ee;
authority, influence or moral b. The above acts would impair the
ascendancy over another in a work or Ees' rights or privileges under
training or education environment: existing labor laws; or
a. Demands c. The above acts would result in
b. Requests or an intimidating, hostile, or
c. Requires offensive environment for the Ee.
any sexual favor from the other,
regardless of whether the 2. In an education or training
demand, request or requirement environment:
for submission is accepted by the a. Against one who is under the
object of R.A. 7877. (Sec. 3) care, custody or supervision of
the offender;
Q: How is sexual harassment committed? b. Against one whose education,
training, apprenticeship or
A: Generally, a person liable demands, tutorship is entrusted to the
requests, or otherwise requires any sexual offender;
favor from the other, regardless of whether the c. Sexual favor is made a condition
demand, request or requirement for to the giving of a passing grade,
submission is accepted by the latter. or the granting of honors and
scholarships, or the payment of a
Q: Under the Sexual Harassment Act, does stipend, allowance or other
the definition of sexual harassment require benefits, privileges, or
a categorical demand or request for sexual considerations; or
favor? d. Sexual advances result in an
intimidating, hostile or offensive
A: No. It is true that the provision calls for a environment for the student,
"demand, request or requirement of a sexual trainee or apprentice.
favor." But it is not necessary that the demand,
request or requirement of a sexual favor be
articulated in a categorical manner. It may be
discerned, with equal certitude, from the acts
of the offender.

220
 UST GOLDEN NOTES 2010
Q; What are the duties of the Er or head of
office in a work-related, education or
training environment?
A;
1. Prevent or deter the commission of
acts of sexual harassment and
2. Provide the procedures for the
resolution, settlement or prosecution
of acts of sexual harassment.
Towards this end, the Er or head of office
shall:
1. Promulgate appropriate rules and
regulations in consultation with the
jointly approved by the Ees or
students or trainees, through their
duly designated representatives,
prescribing the procedure for the
investigation or sexual harassment
cases and the administrative
sanctions therefore. (Sec. 4)
Note; Administrative sanctions shall
not be a bar to prosecution in the
proper courts for unlawful acts of sexual
harassment.
The said rules and regulations issued
shall include, among others, guidelines
on proper decorum in the workplace
and educational or training institutions.
2. Create a committee on decorum and
investigation of cases on. sexual
harassment.
3. The Er or head of office, education or
training institution shall disseminate
or post a copy of this R.A. 7877 for
the information of all concerned
Q; What is the liability of the Er, head of
office, educational or training institution?
A; Ee shall be solidarily liable for damages
arising from the acts of sexual harassment
committed in the employment, education or
training environment provided:
1. The Er or head of office,educational
or training institution is informed of
such acts by the offended party; and
2. No immediate action is taken thereon.
(Sec. 5)
Q: Can an independent action for damages
be filed?
A: Yes. Nothing under R.A. 7877 shall
preclude the victim of work, education or
training-related sexual harassment from
instituting a separate and independent action
UNIVERSITY
for damages and other affirmative relief. (Sec.
6)
Q; What Is the three-fold liability rule in
sexual harassment cases?
A: An act of sexual harassment may give rise
to civil, criminal and administrative liability on
the part of the offender, each proceeding
independently of the others.
Q: When does the action prescribe?
A: Any action shall prescribe in 3 years.
Q: A Personnel Manager, while interviewing
an attractive female applicant for
employment, stared directly at her for
prolonged periods, albeit in a friendly
manner. After the interview, the manager
accompanied the applicant to the door,
shook her hand and patted her on the
shoulder. He also asked the applicant if he
could invite her for dinner and dancing at
some future time. Did the Personnel
Manager, by the above acts, commit sexual
harassment? Reason.
A: Yes, because the Personnel Manager, is in
a position to grant or not to grant a favor (a
job) to the applicant. Under the Circumstances,
inviting the applicant for dinner or dancing
creates a situation hostile or unfriendly to the
applicant's chances for a job if she turns down
the invitation. [Sec. 3(a)(3), R.A. No. 7877,
Anti-Sexual Harassment Act]. (2000 Bar
Question)
Q: In the course of an interview, another
female applicant inquired from the same
Personnel Manager if she had the physical
attributes required for the position she
applied for. The Personnel Manager
replied: "You will be more attractive if you
will wear micro-mini dresses without the
undergarments that ladies normally wear."
Did the Personnel Manager, by the above
reply, commit an act of sexual harassment?
Reason.
A: Yes. The remarks would result in an
offensive or hostile environment for the Ee.
Moreover, the remarks did not give due regard
to the applicant's feelings and it is a
chauvinistic disdain of her honor, justifying the
finding of sexual harassment (Villarama v.
NLRC, GR. No. 106341, Sep. 2, 1994)
OF SANTO TOMAS'
Pacu{tad de Verecfzo Civif
 SOCIAL LEGISLATION: ANTI-SEXUAL HARRASMENT LAw

Q: Pedrito Masculado, a college graduate

from the province, tried his luck in the city
and landed a job as utility/maintenance
man at the warehouse of a big shopping
mall. After working as a casual Ee for 6
months, he signed a contract for
probationary employment for 6 months.
Being well-built and physically attractive,
his supervisor, ML Hercules Barak, took
special interest to befriend him. When his
probationary period was about to expire, he
was surprised when one afternoon after
working hours, Mr. Barak followed him to
the men's comfort room. After seeing that
no one else was around, Mr. Barak placed
his arm over Pedrito's shoulder and softly
said: "You have great potential to become
a regular Ee and I think I can give you a
favorable recommendation. Can you come
over to my condo unit on Saturday evening
so we can have a little drink? I'm alone, and
I'm sure you want to stay longer with the
company." Is Mr. Barak liable for sexual
harassment committed in a work-related or
employment environment?

A: Yes, the elements of sexual harassment

are all present. The act of Mr. Barak was
committed in a workplace. Mr. Barak, as
supervisor of Pedrito Masculado, has
authority, influence and moral ascendancy
over Masculado.

Giventhe specific circumstancesmentionedin

the question like Mr. Barak following
Masculadoto the comfort room, etc. Mr. Barak Academics Committee
was requestinga sexualfavor from Masculado Chairperson: Abraham D. Genuino II
for a favorablerecommendatipnregardingthe
Vice· Chair for Academics: Jeannie A. Laurentino i
latter's employment.It is not impossiblefor a
Vice-Chair for Admin & Finance: Aissa Celine H. Luna
male,who is a homosexual,to ask for a sexual
favorfrom anothermale. (2000 Bar Question) Via-Chair for IqOllt & Design: Loise Rae G. Naval

Labor Law Committee

Subject Head' Lester Jay Alan E. Flores II
Assistant Subject Head' Domingo B. Diviva V

Members:
Rene Francis P. Batalla
Diane Camilla R. Borja
Maria Kristina L. Dacayo-Garcia
Christian Nino A. Diaz
Angelo S. Diokno
Genesis R. Fulgencio
Jeanelle C. Lee
Jemuel Paolo M. Lobo
Andrew W. Montesa
Maria Maica Angelika Roman

222
 UST GOLDEN NOTES 2010

Q: How are disputes settled?

A:
~ DISPUTE SETTtEMENT
Q: What is the policy objective in the Disputes involving:
enactment of (SSS) Law? 1. Coverage
2. Benefits
Contributions
A: It is the policy of the State to establish, 3.
4. Penalties
develop, promote and perfect a sound and
5. Any other matter
viable tax-exempt SSS suitable to the needs of
Social related thereto.
the people throughout the Phils., which shall Note: Disputes within the
Security
promote social justice and provid~~meaningful Commission mandatory period of 20 days
protection to members and their beneficiaries (SSC) after the submission of evidence.
against the hazards of disability, sickness, (See.5a)
maternity, old age, death, and other
contingencies resulting in loss of income or Decision, in the absence of
financial burden. (Sec. 2) appeal, shall be final and
executory 15 days after date of
The enactment of SSS law is a legitimate notification. (Sec. 5b)
exercise of the police power. It affords Decisions of SSC shall be
protection to labor and is in full accord with the appealable to:
constitutional mandate on the promotion of 1. CA - questions of law and fact
CA/SC (See.5e)
social justice. (Roman Catholic Archbishop of
Manila v. SSS, G.R. No. 15045 Jan. 20, 1961) 2. SC - questions of law.
(See.5e)
Q: Are the premiums considered as taxes? SSC may, motu propria or on
motion of any interested party,
Execution of
issue a writ of execution to
A: No. The funds contributed to the System decision
enforce any of its decisions or
belong to the members who will receive
awards, after it has become final
benefits, as a matter of right, whenever the and executory. (Sec. 5d)
hazards provided by the law occur. (CMS
Estate, lnc., v. SSS, G.R. No. 26298 Sep.28,
Q: Can the SSC validly re-evaluate the
1984)
findings of the RTC, and on its own,
Q: Are benefits received under SSS Law
declare the latter's decision to be bereft of
part of the estate of a member?
any basis?
A: No. Benefits receivable under the SSS Law
A: No. It cannot review, much less reverse,
are in the nature of a special privilege or an
decisions rendered by courts of law as it did in
arrangement secured by the law pursuant to
the case at bar when it declared that the CFI
the policy of the State to provide social
Order was obtained through fraud and
security to the workingman. The benefits are
subsequently disregarded the same, making
specifically declared not transferable and
its own findings with respect to the validity of
exempt from tax, legal processes and liens.
Bailon and Alice's marriage on the one hand
(SSS v. Davae, et. st., GR. No.21642, July 30,
.and the invalidity of Bailon and Teresita's
1966)
marriage on the other. In interfering with and
passing upon the CFI Order, the SSC virtually
acted as an appellate court. The law does not
give the SSC unfettered discretion to trifle with
orders of regular courts in the exercise of its
authority to determine the beneficiaries of the
SSS. (SSS vs. Teresita Jarque Vda. De
Bailon, G.R. No. 165545, Mar. 24, 2006, J.
Carpio-Morales)

UNIVERSITY OF SANTO TOMAS "4.A) 223

PacuCtaa de (])erecfio CiviC
 SOCIAL LEGISLATION: SOCIAL SECURITY LAw

Q: Who Is an employer (Er)? Q: Who are covered by SSS?

A: Any person, natural or juridical, domestic A:

or foreign, who carries into the Phils. any 1. Compulsory Coverage
trade, business, industry, undertaking or a. All Ees not over 60 years of age
activity of any kind and uses the services of and their Ers;
another person who is under his orders as b. Domestic helpers whose income
regards the employment, except the is not less than P 1000/month
Government and. any of its political and not over 60 years of age and
subdivisions, branches or instrumentalities, their Ers;
including corporations owned or controlled by
the Government: Provided, That a self- Limitations:
employed person shall be both Ee and Er at a. Any benefit earned by the Ees
the same time. (Sec 81e)) under private benefit plans
existing at the time of the
Q: Who is an employee (Ee)? approval of the Act shall not be.
discontinued, reduced or
A: Any person who performs services for an Er otherwise impaired;
in which either or both mental and physical
efforts are used and who receives , b. Existing private plans shall be
compensation for such services, where there integrated with the SSS but if the
is an Er-Ee relationship: Provided, That a self- Er under such plan is
employed person shall be both Ee and Er at contributing more than what is
the same time. (Sec. 8[d)) required by this Act, he shall pay
to the SSS the amount required
Q: What is employment? to him, and he shall continue with
his contributions less the amount
A: paid to SSS;
GR: Any service performed by an Ee for
his Er. c. Any changes, adjustments,
modifications, eliminations or
XPN: improvements in the benefits of
1. Employment purely casual and not the remaining private plan after
for the purpose of occupation or the integration shall be subject to
business of the Er; agreements between the Ers and
2. Service performed on or in the Ees concerned; and
connection with an alien vessel by an
Ee if he is employed when such d. The private benefit plan which
vessel is outside the Phi Is; the Er shall continue for his Ees
3. Service performed in the employ of shall remain under the Ers
the Phil. Government or management and control unless
instrumentality or agency thereof; there is an exlstinq agreement to
4. Service performed in the employ of a the contrary
foreign government or international
organization, or their wholly-owned c, All self-employed - considered
instrumentality: both an Er and Ee
5. Such other services performed by
temporary and other Ees which may d. Professionals;
be excluded by regulation of the
SSC. Ees of bona fide independent e. Partners and single proprietors of
contractors shall not be deemed Ees business;
of the Er engaging the services of
said contractors. (Sec. 80)) f. Actors and actresses, directors,
scriptwriters and news
Q: What is a contingency? correspondents who do not fall
within the definition of the term
A: The retirement, death, disability, injury or "Ee";
sickness and maternity of the member,
g. Professional athletes, coaches,
trainers and jockeys; AND

224
 UST GOLDEN NOTES 2010

h. Individual farmers and fisherman. 2. The legitimate, legitimated, or legally

(Sec. 9) adopted, and illegitimate child who:

2. Voluntary a. Is unmarried,
a. Spouses who devote full time to b. Not gainfully employed, and
managing the household and c. Has not reached 21 years of age,
family affairs, unless they are or if over 21 years of age, he is
also engaged in other vocation or congenitally or while still a minor
employment which is subject to has been permanently
mandatory coverage; (Sec. 9[b]) incapacitated and incapable of
b. Filipinos recruited by foreign- self-support, physically or
based Ers for ~mploy,ment mentally.
abroad may be covered by the
SSS on a voluntary basis; (Sec. 3. The parent who is receiving regular
9[c)) support from the member.
c. Ee separated from employment
to maintain his right to full Q: What is meant by "dependent for
benefits support"?
d. Self-employed who realizes no
income for a certain month A: The entitlement to benefits as a primary
beneficiary requires not only legitimacy but
3. By Agreement also dependence upon the member Ee. (Gil v.
Any foreign government, international SSC et. al. CA- GR SP. 37150 May 8, 1996)
organization, or their wholly-owned If a wife who is already separated de facto
instrumentality employing workers in from her husband cannot be said to be
the Phils., may enter into an "dependent for support" upon the husband,
agreement with the Phil. -government absent any showing to the contrary.
for the inclusion of such Ees in the Conversely, if it is proved that the husband
SSS except those already covered by and wife were still living together at the time of
their respective civil service his death, it would be safe to presume that she
retirement systems. was dependent on the husband for support,
unless it is shown that she is capable of
Q: Who are primary beneficiaries? providing for herself. (SSS v. Aguas, G.R. No.
165546, Feb. 27, 2006)
A:
1. The dependent spouse until he or she Q: Who is entitled to the benefits of an SSS
remarries member who was survived not only by his
legal wife, who is not dependent upon the
2. The dependent legitimate, legitimated member, but also by two common-law
or legally adopted, and illegitimate wives with whom he had illegitimate minor
children,: Provided, That the children?
dependent illegitimate children shall
be entitled to 50% of the share of the A: The illegitimate minor children shall be
legitimate, legitimated or legally entitled to the death benefits as primary
adopted children. beneficiaries because the legal wife is not
dependent upon the member. The SSS Law is
Q: Who are secondary beneficiaries? clear that for a minor child to qualify as a
"dependent" the only requirements are that
A: In the absence of primary beneficiaries, the he/she must be below 21 yrs. of age, not
dependent parents. married nor gainfully employed. (Signey v.
SSS, GR. No. 173582, Jan. 28, 2008)
In the absence of all the foregoing, any other
person designated by the member as his or Q: What is compensation?
her secondary beneficiary. (Sec. 8[k])
A: All actual remuneration for employment,
Q: Who are considered dependents? including the mandated cost of living
allowance, as well as the cash value of any
A: remuneration paid in any medium other than

~.
1. The legal spouse entitled by law to cash except that part of the remuneration
receive support from the member; received during the month in excess of the
maximum salary.

UNIVERSITY OF SANTO TOMAS

Pacu{taa de <Derecfzo CiviC
.•. 225
 SOCIAL LEGISLATION: SOCIAL SECURITY LAw

Q: The owners of FALCON Factory, a entitled to benefits according to the

company engaged in the assembling of provisions of R.A. 9282.
automotive components, decided to have
their building renovated. (50) persons, 3. He may, however, continue to pay the
composed of engineers, architects and total contributions to maintain his right
other construction workers, were hired by to full benefit. (Sec. 11)
the company for this purpose. The work
was estimated to be completed in 3 years. Note: The above provision recognizes the "once
The Ees contended that since the work a member, always a member" rule.
would be completed after more than 1
year, they should be subject to Q: What is the effect of interruption of
compulsory coverage under the Social business or professional income?
Security Law. Do you agree with their
contention? Explain your answer fully. A: If the self-employed member realizes no
income in any given month:
A: No. Under Sec. 8 m of R.A. 1161, as
amended, employment of purely casual and not 1. He shall not be required to pay
for the purpose of the occupation or business of contributions for that month.
the employer are excepted from compulsory
coverage. An employment is purely casual if it 2'. He may, however, be allowed to
is not for the purpose of occupation or business continue paying contributions under
of the Er. the same rules and regulations
applicable to a separated Ee
In the problem given, Falcon Factory is a member:
company engaged in the assembly of
automotive components. The 50 persons 3. Provided, that no retroactive payment
(engineers, architects and construction of contributions shall be allowed other
workers) were hired by Falcon Factory to than as prescribed under Sec.22-A.
renovate its building. The work to be performed (Sec. 11-A)
by these 50 people is not in connection with the
purpose of the business of the factory. Hence, Q: What are the benefits under the SSS
the employment of these 50 persons is Act?
purely casual. They are, therefore, excepted
from the compulsory coverage of the SSS law. A:
(2000Bar Question) 1. Monthly Pension
2. Retirement Benefits
Q: When is the compulsory coverage 3. Death Benefits
deemedeffective? 4. Disability Benefits
5. Funeral Benefits
A: 6. Sickness Benefits
1. Employer - on the first day of 7. Maternity Benefits
operation

2. Employee - on the day of his

employment

3. Compulsory coverage of self-

employed - upon his registration
with the SSS

Q: What is the effect of separation of an

employee from his employment under
compulsory coverage?

A:
1. His Ers obligation to contribute arising
from that employment shall cease at
the end of the month of separation,

2. But said Ee shall be credited with all

contributions paid on his behalf and

226
 UST GOLDEN NOTES 2010

Q: What is the difference of compensability iii. 2% of the average monthly

under the Labor Law and the Social salary credit for each
Security Law? credited year of service in
excess of 10 years; or
A: The claims are different as to their nature b. 40% of the average monthly
and purpose. (Ortega vs. Social Security salary credit; or
Commission, GR. No. 176150, June 25,2008, c. P1,000.00, provided that the
J. Carpio-Morales) monthly pension shall in no case
be paid for an aggregate amount
of less than sixty (60) months
(Sec. 12 (al)

Governs 2. Minimum Pension

compensability of : to provide insurance or a. P1,200.00 - members with at
1. work-related protection against the least 10 credited years of service
disabilities hazards or risks of b. P2,400.00 for those with 20
2. when there is disability, sickness, old credited years of service. (Sec.
loss of income age or death, inter alia, (bJ)
due to work- irrespective of whether
connected or they arose from or in
Retirement Benefit
work- the course of the
employment.
Q: What is a retirement benefit?

A disability is total and Dis may A: It is a cash benefit paid to a member who
permanent if as a result permanent total or can no longer work due to old age.
of the injury or sickness permanent partial.
the Ee is unable to Q: What are the types of retirement
perform any gainful benefits?
occupation for a
continuous period A:
exceeding 120 days 1. Monthly Pension - Lifetime cash
regardless of whether benefit paid to a retiree who has paid
he loses the use of any at least 120 monthly contributions to
of his the SSS prior to the semester of
retirement
Q: What are the reportorial requirements of
the Er and self-employed? 2. Lump Sum Amount - Granted to a
retiree who has not paid the required
A: 120 monthly contributions.
1. Er - Report immediately to SSS the
names, ages, civil status, occupations, Q: Who are entitled for retirement benefits?
salaries and dependents of all his
covered Ees A:
1. A member who
2. Self-employed - Report to SSS within a. has paid at least 120 monthly
30 days from the first day of his contributions prior to the semester
operation, his name, age, civil status, of retirement;
occupation, average monthly net b. at least 60 years old; and
income and his dependents c. already separated from
employment or has ceased to be
self-employed, OR
Monthly Pension
2. At least 65 years old, shall be entitled
Q: How much is the monthly pension? for as long as he lives to the monthly
pension; (Sec 12-8 (aJ)
A:
1. The monthly pension shall be the 3. A member
highest of the following amounts: a. At least 60 years old at
a. The sum of the following: retirement; and
i. P300.00; plus b. Does not qualify for pension
ii. 20% of the average monthly benefits under paragraph (a)
salary credit; plus above - entitled to a lump sum

UNIVERSITY OF SANTO TOMAS

227
Pacu(taa de lDerecfzo CiviC .
 SOCIAL LEGISLATION: SOCIAL SECURITY LAw

benefit equal to the total primary beneficiaries, his secondary

contributions paid by him and on beneficiaries will receive a lump sum
his behalf; benefit equivalent to the difference of
c. Must be separated from 60 multiplied by the monthly pension
employment and is not and the total monthly pensions paid
continuing payment of by the SSS excluding the
contributions to the SSS on his dependent's pension. (Sec. 12-8 [dJ)
own. (Sec. 12-8 [bJ)
Q: Bonifacio and Elena are living together
Q; What happens when the retirement as husband and wife without the benefit of
pensioner is re-employed or resumes self- marriage. Bonifacio declared Elena and
employment? their children as his primary beneficiaries
in his self-employed data record in SSS. A
A; The monthly pension of a retirement few months prior to his death, Bonifacio
pensioner who resumes employment and is married Elena.ls: Elena entitled to the
less than 65 years old will be suspended. He survivor's pension?
and his Er will again be subject to compulsory
coverage. (Sec. 12-8 [c]) A: Yes, she is considered primary beneficiary
Q; Are the children of a retiree member of Bonifacio. The phrase "Upon the death of
entitled to the dependent's pension? the retired member, his primary beneficiaries
as of the date of his retirement will get 100 per
A: Yes (Sec. 12[AJ). However, only 5 minor cent of his monthly pension xxX:' of Sec. 12-B
children, beginning from the youngest, are d of RA 8282 is unconstitutional because it
entitled to the dependents' pension. No violates the: (1) equal protection clause
substitution is allowed. Where there are more because it impermissibly discriminates against
than 5 legitimate and illegitimate children, the dependent spouses whose respective
legitimate ones will be preferred. marriages to the SSS members' were
contracted after the latter's retirement; (2) due
Q: For how long will the dependent child process clause because it outrightly deprives
receive the pension? spouses who married the SSS members after
their retirement of the survivor's pension, a
A: Until the child reaches 21 years of age, property interest, without giving them
gets married, gets employed and earns P300 a opportunity to be heard; and (3) social justice.
month or more, or dies.
Further, the survivorship pension applied for
However, the dependent's pension is granted was classified as death benefits. Hence, the
for life to children who are over 21 years old, contingency that gives rise to the entitlement
provided they are incapacitated and incapable of Elena is the death of Bonifacio and not his
of self-support due to physical or mental defect retirement. (Oycaico V. SSS, G. R. No. 16137,
which is congenital or acquired during minority. June 6, 2006)

Q: What will happen to the monthly

pension of a retiree in case of death? - Death Benefit

A: Q: When is a beneficiary entitled to death

1. Upon the death of the retired benefits?
member, his primary beneficiaries as
of the date of his retirement will get A:
100% of his monthly pension plus the 1. Upon death of a member, if he has
dependent's pension for each child. paid at least 36 monthly contributions
prior to the semester of death:
Note: The above phrase "primary a. primary beneficiaries shall be
beneficiaries (as of the date of his entitled to the monthly pension;
retirement )was declared or
unconstitutional by the SC in Oycaico v. b. If there are no primary
SSS and sse (G.R. No. 16137, June 6, beneficiaries, secondary
2006) because it is in violation of the
beneficiaries shall be entitled to a
equal protection, due process and
lump sum benefit equivalent to
social justice.
36 times the monthly pension.

2. If he dies within 60 months from the

2. Upon death of a member If he has
start of his pension and he has no
not paid the required 36 monthly
 UST GOLDEN NOTES 2010

contributions prior to the semester of guaranteed period excluding the

death: dependents' pension. (Sec. 13-A [cl)
a. primary or secondary
beneficiaries shall be entitled to a Q: What is the effect of retirement or death
lump sum benefit equivalent to to partial disability pension?
the monthly pension multiplied by
the number of monthly A: Disability pension shall cease upon his
contributions paid to the SSS: or retirement or death. (Sec 13-A OJ)
b. 12 times the monthly pension,
whichever is higher. (Sec. 13)
" Funeral' Benefit . '.'

b Permanent Disability Benefit . Q: What is the funeral benefit?

Q: What is a disability benefit?
A: It is a cash benefit paid to a member who
becomes permanently disabled, either partially
or totally.
Q: When is the monthly pension
dependent's pension suspended?
A:
1. Upon the reemployment
resumption of self-employment
2. Recovery of the disabled member
from his permanent total disability
3. Failure to present himself for
examination at least once a year
upon notice by the SSS. (Sec. 13-A
[bJ)
Q: What is the difference between
benefits and PTO benefits?
A:
PrimaryBeneficiaries Member
Benefitsshall be in lumpsum equivalentto the
monthlypensiontimes the numberof monthly
contributionspaidto SSS or 12 times the monthly
pension,whicheveris higher.
A: A funeral grant equivalent to P12, 000.00
shall be paid, in cash or in kind, to help defray
the cost of expenses upon the death of a
member or retiree. (Sec. 13-8)
Sickness Benefit
and
Q: What is sickness benefit?
or A: It is a daily cash allowance paid for the
number of days a member is unable to work
due to sickness or injury.
Q: What are the requirements to be entitled
for sickness benefit?
A:
1. The member paid at least 3 monthly
death contributions in the 12-month period
immediately preceding the semester
of sickness or injury;
2. Confined for more than 3 days in a
hospital or elsewhere with the
approval of the SSS;
3. He has used all current company sick
leaves with pay for the current year,
and
4. Notified his Er or the SSS, if he is a
separated, voluntary or self-employed
member.
Q: Who will pay sickness benefits? and
how much is the benefit?

A: The Er shall pay the:

Q: What is the effect of the death of ,the 1. Ee for each compensable
PTO pensioner? confinement or fraction thereof or
2. SSS if member is self-employed
A: 6. daily sickness benefit equivalent
1. Primary beneficiaries are entitled to to 90% of his average daily
receive monthly pension as of the salary credit, subject to the
date of disability. following conditions:
2. No primary beneficiaries and he dies a. In no case shall the daily
within 60 months from the start of his sickness benefit be paid longer
monthly pension secondary than 120 days in 1 calendar year,
beneficiaries shall be entitled to a nor shall any unused portion of
lump sum benefit equivalent to the the 120 days of sickness benefit
total monthly pensions corresponding granted be carried forward and
to the balance of the 5-year added to the total number of

UNIVERSITY OF SANTO TOMAS (~~ 229

Pacu(taa ae CDerecfio CiviC .•.
 SOCIAL LEGISLATION: SOCIAL SECURITY LAw

compensable days allowable in b. The Er has notified the SSS of

the subsequent year; the confinement within 5
calendar days after receipt of the
b. Not paid for more than 240 days notification from the Ee member:
on account of the same
confinement; and 2. Er shall be reimbursed only for each
da~ of confinement starting from the
c. Ee member shall notify his Er of 10 calendar day immediately
the fact of his sickness or injury preceding the date of notification to
within 5 calendar days after the the SSS if the notification to the SSS
start of his confinement unless is made beyond 5 calendar days after
such confinement: receipt of the notification from the Ee
i. is in a hospital member. (Sec. 14 [cl)
ii. the Ee became sick or was
injured while working or Q: When will reimbursement be made by
within the premises of the Er SSS?
(notification to the Er not
necessary); A:
GR: SSS shall reimburse the Er or pay the
d. If the member is unemployed or self- unemployed member only for confinement
employed, he shall directly notify the within 1 year immediately preceding the
SSS of his confinement within 5 date the claim for benefit or reimbursement
calendar days after the start thereof is received by the SSS
unless such confinement is in a
hospital in which case notification is XPN: Confinement in a hospital in which
also not necessary; case the claim for benefit or reimbursement
must be filed within 1 year from the last day
e. Where notification is necessary, of confinement. (Sec. 14[c))
confinement shall be deemed to have
started not earlier than the 5th day
immediately preceding the date of
notification. (Sec. 14 [bJ)
.,
Note: The law does not require that sickness ~ ....••••••.••• ".~iiI.'~ •
must be related to the duties of the beneficiaries.
Academics Committee
Q: When will compensable confinement Chairperson: Abraham D. Genuino II
commence?
Vice-Chair for Academics: Jeannie A. Laurentino
Vice-Chair for Admin & Finance: Aissa Celine H. Luna
A:
Vice-Chair for Layo«: & Design: Loise Rae G. Naval
1. Begins on the 1st day of sickness
2. Payment of such allowances shall be
promptly made by the Er: Labor Law Committee
a. every regular payday or on the Subject Head' Lester Jay Alan E. Flores II
is"and last day of each month, Assistant Subject Head' Domingo B. Diviva V
b. in case of direct payment by the
SSS as long as such Members:
allowances are due and payable. Rene Francis P. Batalla
(Sec. 14[bJ) Diane Camilla R. Borja
Maria Kristina L. Dacayo-Garcia
Q: What are the requirements in order that
Christian Nino A•. Diaz
Er may claim reimbursement of the
Angelo S, Diokno
sickness benefit?
Genesis R. Fulgencio
A: Jeanelle C. Lee
1. 100% of daily benefits shall be Jemuel Paolo M. Lobo
reimbursed by SSS if the following Andrew W. Montesa
requirements are satisfied: Maria Maica Angelika Roman
a. Receipt of SSS of satisfactory
proof of such payment and
legality thereof:

230
 UST GOLDEN NOTES 2010

previously notified by the Er of the

time of the pregnancy, the Er shall pay
to the SSS damages equivalent to the
Q: What is maternity leave benefit? benefits which said Ee would
otherwise have been entitled to, and
A: A covered female employee (Ee) is entitled the SSS shall in turn pay such amount
to a daily maternity benefit equivalent to 100% to the Ee concerned.
of her present basic salary, allowances and
other benefits or the cash equivalent of such . Loan Grant ',;.c' ,

benefits for 60 days or 78 days in case of

caesarian delivery. Q: What loans can be granted?

Q: What are the requirements in(;Order .that A: Salary loans, educational loans, housing
maternity benefits may be claimed? '. loan and community hospital loan.

A: Q: Are the benefits transferable?

1. There is childbirth, abortion or
miscarriage; and A: No. Such benefits are not transferrable and
2. She has paid at least 3 monthly no power of attorney or other document
contributions executed by those entitled thereto, in favor of
any agent, attorney or any other person for the
Q: What are the conditions? collection thereof on their behalf shall be
recognized, except when they are physically
A: unable to collect personally such benefits.
1. The Ee shall have notified her
employer (Er) of her pregnancy and Q: What is a reserve fund?
the probable date of her childbirth
which notice shall be tra-nsmitted to A: All revenues of SSS accumulated in a fund
the SSS not needed to meet the current administrative
and operations expenses incidental to the
2. The payment shall be advanced by carrying out of R.A. 1161.
the Er in 2 equal installments within
30 days from the filing of the Q: What is an investment reserve fund?
maternity leave application
A: Such portions of the Reserve Fund as are
3. In case of caesarian delivery; the Ee not needed to meet the current benefit
shall be paid the daily maternity obligations thereof.
benefit for 78 days
The Commission through such funds may:
4. Payment of daily maternity benefits 1. Finance housing loans of members;
shall be a bar to the recovery of 2. Long-term direct individual or group
sickness benefits for the same housing loans giving priority to the
compensable period of 60 days for low-income groups, up to a maximum
the same childbirth, abortion, or of 90% of the appraised value of the
miscarriage properties to be mortgaged by the
borrowers; and
5. The maternity benefits provided 3. In short and medium-term loans to
under Section 14-A shall be paid members such as salary, educational,
only for the first four deliveries livelihood, marital, calamity and
emergency loans
6. The SSS shall immediately reimburse
the Er of 100% of the amount of
maternity benefits advanced to the Ee
by the Er upon receipt of satisfactory
proof of such payment and legality
thereof; and

7. If an Ee should give birth or suffer

abortion or miscarriage without the
required contributions having been
remitted for her by her Er to the SSS,
or without the latter having been

UNIVERSITY OF SANTO TOMAS

Pacu[taa de <Derecno CiviC
 SOCIAL LEGISLATION: GOVERNMENT SERVICE INSURANCE SYSTEM

Q: Who are the considered beneficiaries?

A:
1. Primary beneficiaries
Q: What are the purposes behind the a. The legal dependent spouse until
enactment of the GSIS Act? he/she remarries and
b. The dependent children. (Sec.
A: To provide and administer the following 2[gJ)
social security benefits for government
employees (Ee): 2. Secondary beneficiaries
1. Compulsory life insurance a. The dependent parents and
2. Optional life insurance b. Subject to the restrictions on
3. Retirement benefits dependent children, the
4. Disability benefits to work-related legitimate descendants. (Sec.
contingencies; and 2[h]) ,
5. Death benefits
Q: What is disability? .
Q: Who are considered employers (Er)
under the GSIS Act? A: Any loss or impairment of the normal
functions of the physical and/or mental faculty
A: of a member, which reduces or eliminates
1. National Government, his/her capacity to continue with his/her
2. Its political subdivisions, branches, current gainful occupation or engage in any
agencies, instrumentalities, other gainful occupation.
3. GOCCs, and financial institutions with
original charters, Q: What is total disability?
4. Constitutional Commissions and the
Judiciary. (Sec. 2[c]) A: Complete incapacity to continue with
present employment or engage in any gainful
Q: Can SSS Ees be covered by GSIS? occupation due to the loss or impairment of the
normal functions of the physical and/or mental
A: Yes. faculties of the member.

Q: Who is an Ee or member? Q: What is permanent total disability

(PTD)?
A: Any person, receiving compensation while
in the service of an Er, whether by election or A: Accrues or arises when recovery from
appointment, irrespective of status of impairment mentioned in Sec.2(q) (defining
appointment, including barangay and disability) is medically remote.
sanggunian officials. (Sec. 2{dJ)
Q: What is temporary total disability (TID)?
Q: Who are considered dependents?
A: A: Accrues or arises when impaired physical
1. Legitimate spouse dependent for and/or mental faculties can be rehabilitated
support upon the member or and/or restored to their normal functions
pensioner;
2. Legitimate, legitimated, legally Q: What is permanent partial disability
adopted child, including the (PPD)?
illegitimate child,
a. who is unmarried, A: Accrues or arises upon the irrevocable loss
b. not gainfully employed, or impairment of certain portions of ,the
c. not over the age of majority, or if physical faculties, despite which the member is
over the age of majority, able to pursue a gainful occupation.
incapacitated and incapable of
self-support due to a mental or Q: What is compensation?
physical defect acquired prior to
age of majority; and A: The basic payor salary received by an Ee,
3. Parents dependent upon the member pursuant to his or her election or appointment,
for support. (Sec. 2{f]) excluding per diems, bonuses, OT pay,
honoraria, allowances and any other
emoluments received in addition to the basic

232
 UST GOLDEN NOTES 2010

pay which are not integrated into the basic pay Q: Who are covered by life insurance,
under existing laws. (Sec. 2[ij) retirement and other social security
protection?
Q: Baradero is a member of the
Sangguniang Bayan of the Municipality of A:
La Castellana, Negros Occ. and is paid on a GR: All members of the GSIS shall have
per diem basis. On the other hand, Belo a life insurance, retirement, and all other
Vice-Governor of Capiz is in a hold over social security protections such as
capaclty and is paid on a per diem basis. disability, survivorship, separation, and
Are the services rendered by Baradero and unemployment benefits. (Sec. 3)
Belo on a per diem basis creditable in
computing the length of service for XPN: Members of:
retirement purposes? " 1. the judiciary and
2. Constitutional commissions who shall
A: Yes. The traditional meaning of per diem is have life insurance only,
a reimbursement for extra expenses incurred
by the public official in the performance of his Q: Who under the GSIS are excluded from
duties. Under this definition the per diem is the coverage?
intended to cover the cost of lodging and
subsistence of officers and employees when A:
the latter are on a duty outside of their 1. Ees who have separate retirement
permanent station. On the other hand, a per schemes (members of the Judiciary,
diem could rightfully be considered a Constitutional Commissions and
compensation or remuneration attached to an others similarly situated);
office. 2. Contractual Ees who have no Er-Ee
with the agencies they serve;
The per diems paid to Baradero and Belo were 3. Uniformed members of the AFP,
in the nature of compensation or remuneration BJMP, whose coverage by the GSIS
for their services as Sangguniang Bayan and has ceased effective June 24,1997;
Vice-Governor, respectively, rather than a 4. Uniformed members of the PNP
reimbursement for incidental expenses whose coverage by the GSIS has
incurred while away from their home base. ceased effective February 1, 1996.
(Sec. 2.4, Rule II, IRR)
If the remuneration received by a public offlclal
in the performance of his duties does not Q: For the purpose of benefit entitlement,
constitute a mere "allowance for expenses" but how are the members classified?
appears to be his actual base pay, then no
amount of categorizing the salary as a "per A:
diem" would take the allowances received from 1. Active members
the term service with compensation for the a. still in the service and are
purpose of computing the number of years of paying integrated premiums.
service in government. (GS/S v esc and Dr. b. covered for the entire package
Baradero and GSIS v. esc and Belo, G. R. benefits and privileges being
Nos. 98395 and 102449, June 19, 1995) extended by GSIS.
2. Policyholders
Q: What government Ees are subject to a. covered for life insurance only
coverage under the GSIS? b. can avail of policy loan privilege
only
A: c. may also apply for housing
GR: All Ees receiving compensation who loans
have not reached the ,.compulsory d. Judiciary and Constitutional
retirement age, irrespective of employment Commissions
status.
3. Retired Members
XPN: a. former active members who
1. Uniformed members of the: have retired from the service
a. AFP; and and are already enjoying the
b. PNP. corresponding retirement
, 2. Contractuals who have no Er and Ee benefits applied for
relationship with the agencies they b. not entitled to any loan
serve. privilege, except stock purchase
loan (Sec. 2.2, Rules II, IRR)

UNIVERSITY OF SANTO TOMAS' ('U~233

PacuCtaa ae Verecfio CiviC '.- .
 SOCIAL LEGISLATION: GOVERNMENT SERVICE INSURANCE SYSTEM

Q: What are the sources of funds of the Mindanao, she suffered a stroke and
GSIS? since then had been confined to a
wheelchair. At the time she stopped
A: It comes from the monthly contributions of working because of her illness in line of
the covered Ees and Ers. (Sec. 5) duty, Atty. Guzman was only 60 years old
but she had been an active member of the
The contributions of the Ees are deducted and GSIS for 30 years without any break in her
withheld by the Er each month from the service record. What benefits could she
monthly salary of theJormer and are remitted claim from the GSIS? Cite at least five
by the latter, together with its own share, to the benefits.
System within the first 10 days of each
calendar month following the month to which A: The benefits Atty. Guzman could claim
the contributions apply. (Sec. 6) from the GSIS are:
1. Ees compensation which shall
Q: What is the penalty in case of delayed include both income and medical and
remittance or non-remittance of related benefits, including
contributions? rehabilitation;
2. Temporary total disability benefit;
A: The unremitted contributions shall be 3. Permanent total disability benefit;
charged interests as prescribed by the GSIS 4. Separation benefit; and
Board of Trustees but shall not be less than 5. Retirement benefit (2004 Bar
2% simple interest per month from due date to Question)
the date of payment by the employers
concerned. Q: What are the reportorial requirements of
the Er?
Q: What are the benefits provided by the
GSIS Act? A: Er must report to GSIS the names,
employment status, positions, salaries of the
A: employee and such other matter as determined
1. Separation by the GSIS.
2. Unemployment or involuntary
separation
3. Retirement , Separation Benefits
4. Permanent disability
5. Temporary disability Q: When will a member be entitled to
6. Survivorship separation benefits and what comprises
7. Funeral these separation benefits?
8. Life Insurance
9. Such other benefits and protection as A: A member who has rendered a minimum of
may be extended to them by the 3 years creditable service shall be entitled to
GSIS such as loans. separation benefit upon resignation or
separation under the following terms:
Q: What are the benefits under P.O. 1146
(Revised GSIS Act of 1977) that may be 1. A member wfth at least 3 years but
granted to the separated members of the less than 15 years: Cash payment
PNP, BJMP and BFP? equivalent to 100% of the AMC for
every year of service the member has
A: paid contributions:
GR: a. not less than P12,000.00
1. Old-age benefit b. Payable upon reaching 60 years
2. Permanent disability benefit of age or upon separation',
3. Survivorship benefit whichever comes later.
4. Funeral benefit
5. Retirement benefit 2. A member wfth less than 15 years of
service and less than 60 years of age
XPN: Judiciary (Life insurance only - tax at the time of resignation or
exempt) separation:
a. Cash payment equivalent to 18
Q: Atty. Lianne Guzman, a dedicated and times the basic monthly pension
efficient public official, was the top (BMP), payable at the time of
executive of a GOCC. While inspecting an resignation or separation
ongoing project in a remote village in

234
 UST GOLDEN NOTES 2010

b. An old-age pension benefit equal Q: What is the rule in case of extension of

to the basic monthly pension, service in order to be entitled for retirement
payable monthly for life upon benefit?
reaching the age of 60.
A: The doctrine in Cena v CSC, (G.R. No.
Q: What are the effects of separation from 97419, July 3, 1992), was modified in Rabor v
service with regard to membership? CSC, (G.R. No. 111812, May 31, 1995), where
the SC held that: The head of the government
A: A member separated from the service shall agency concerned is vested with discretionary
continue to be a member and shall be entitled authority to allow or disallow extension of the
to whatever benefits he has qualified to. service of an official or Ee who has reached 65
years old without completing the 15 years of
Note: A member separated for a (Valid cause government service. However, this discretion
shall automatically forfeit his benefits, unless the is to be exercise conformably with the
terms of resignation or separation provide provisions of Civil Service Memorandum
otherwise.
Circular No. 27, series of 1990 which provides
In the case of forfeiture, the separated employee
that the extension shall not exceed 1 year.
shall be entitled to receive only Y, of the cash
surrender value of his insurance.
Q: What is the reason for compulsory
retirement?

Unemployment or Involuntary
A: The compulsory retirement of government
, Separation Benefits
officials and Ees upon their reaching the age
of 65 years is founded on public policy which
Q: What are the conditions for entitlement aims by it to maintain efficiency in the
to unemployment benefits? government service and at the same time give
to the retiring public servants the opportunity to
A: enjoy during the remainder of their lives the
1. The recipient must be a permanent recompense, for their long service and
employee at the time of separation; devotion to the government, in the form of a
2. His separation was involuntary due to comparatively easier life, freed from the rigors
the abolition of his office or position of civil service discipline and the exacting
resulting from reorganization; and demands that the nature of their work and their
3. He has been paying the contribution relations with their superiors as well as the
for at least 1 year prior to separation. public would impose upon them. (Beronilla v.
GSIS, G.R. No. 21723, Nov. 26, 1970)
Q: What will consist of an unemployment
benefit? Q: What are the options of the retiree with
regard to his or her retirement benefits?
A: It will consists of cash payment equivalent
to 50% of the average monthly compensation A: The retiree may get either of the following:
1. Lump sum equivalent to 6 months of
Note: A member who has rendered at least 15 the basic monthly pension (BMP)
years of service will be entitled to separation
payable at the time of retirement and
benefits instead of unemployment benefits.
an old-age pension benefit equal to
BMP payable for life, starting upon
Retirement Benefits the expiration of the 5 years covered
by the lump sum; or
Q: What are the conditions in order to be
entitled to retirement benefits? 2. Cash payment equivalent to 18 times
his BMP and monthly pension for life
payable immediately. (Sec. 13[a])
A:
1. A member has rendered at least 15 Permanent Disability Benefits
years of service;
2. He is at least 60 years of age at the
Q: What are the conditions in order to be
time of retirement; and entitled for permanent disability benefits?
3. He is not receiving a monthly pension A: The permanent disability was not due to
benefit from permanent total any of the ff:
disability. (Sec. 13-A) 1. Grave misconduct
2. Notorious negligence
3. Habitual intoxication
, .•..•.•....
U N I V E R 5 I T Y 0 F SAN ToT 0 MAS ~. 235
Pacu(tatl tie <Derecfio CiviC '.-
 SOCIAL LEGISLATION: GOVERNMENT SERVICE INSURANCE SYSTEM

4. Willful intention to kill himself or another continue with his current gainful
occupation or engage in any other
Q: What are the two types of permanent gainful occupation is medically
disability? remote. {Section 2 (q) and (s)}

A: 2. Permanent partial disability (PPD) -

1. Permanent total disability (PTO) - accrues or arises upon the
accrues or arises when recovery from irrevocable loss or impairment of
any loss or impairment of the normal certain portion/s of the physical
functions of the physical and/or faculties, despite which the member
mental faculty of a member which is able to pursue a gainful occupation.
reduces or eliminates his capacity to (Sec.2{uJ)

of sight of both eyes

2. loss of 2 limbs at or above the ankle or wrist
3. permanent complete paralysis of 2 limbs 1. any finger
4. brain injury resulting in incurable imbecility or 2. any toe
insanity 3. one arm
5. such other cases as may be determined by the 4. one hand
GSIS 5. one foot
6. one leg
7. one or both ears
8. hearing of one or both ears
9. sight of one eye

.B!lI.lWilfiflIII]jBliiliililiiil~~.~s~uc~h other caus as determined GSIS

1. A member is entitled to the monthly income benefit member is entitled to cash payment in
for life equivalent to the BMP when: accordance with the schedule of disabilities to be
a. he is in the service at the time of the disability prescribed by GSIS, if he satisfies the given
or conditions of either (1) or (2) of Sec. 16(a).
b. if separated from service
c. he has paid at least 36 monthly contributions
within 5 years immediately preceding his
disability
d. he has paid a total of at least 180 monthly
contribution prior his disability
e. he is not receiving old-age retirement pension
benefits

2. If the member does not satisfy the conditions above

but has rendered at least 3 years service, he shall be
advanced the cash payment equivalent to 100% of his
average monthly compensation for each year of
service he has pad contributions but not less than
P12,OOO.OO which should have been his separation
benefit shall no ion benefits

Q: When will the payment of these benefits Q: Manioso was suffering from several
be suspended? diseases from 1959 to 1994 when he
worked as Accounting Clerk I at the Budget
A: CommiSSion up to the time he was
1. In case a member is re-employed; or transferred and promoted to the DENR as
2. Member recovers from disability as Senior Bookkeeper. On Jan. 11-20, '95, he
determined by the GSIS; or was hospitalized. The results of his
3. Fails to present himself for medical examinations showed that he was suffering
examination when required by the from Acute Myocardial Infarction and
GSIS. (Sec. 16 (c}) Hypertensive Vascular Disease. From Jan
11- May 5, '95 when he compulsory retired
from government service and after serving
for 36 yrs, he no longer reported for
work. His sick leave covering said period

236
 UST GOLDEN NOTES 2010

was duly approved. In the meantime, Permanent Total Disability. (Bemandin

Manioso filed a claim for income benefits Manioso, vs. GSIS, G.R. No. 148323, Apr. 2 ,
with the GSIS which found his ailments 2005, J Carpio-Morales)
work-related. He was granted Temporary
Total Disability benefits for 2 months. He ~ Temporary-Disability'Benefits,'
was later granted Permanent Partial
Disability benefits for 8 months. It appears Q: When does temporary total disability
that he appealed for more disability arises?
benefits with the GSIS which subjected him
to a series of medical tests, In '97, he was A: It accrues or arises when the impaired
brought to the PGH several times due to physical and/or mental faculties can be
Chronic Renal Infection 2' to Obstructive rehabilitated and/or restored to their normal
Uropathy 2' to Staghorn Calctlli (L).•and functions. (Sec 2ft))
Benign Prostatic Hypertrophy; Diabetes
Mellitus Neprophaty, Stage IV, and Q:What benefits are given for temporary
Hypertensive Nephrosclerosis. He then disability?
filed a request with the GSIS for additional
disability benefits, claiming that the A:
ailments for which he was hospitalized 1. Member is entitled to 75% of his
several times in '97 developed from his current daily compensation for eac
work-related illnesses. The GSIS day or fraction thereof of total
disapproved Manioso's request disability benefit, to start at the 4thday
but not exceeding 120 days in one
Do Manioso's ailments which later calendar year when:
developed fall under the category of
permanent total disability? a. he has exhausted all sic
leaves
A: Yes. Under Art. 192 (c) of =.o. No. 442, as b. CBA sick leave benefits
amended (the LC), the following disabilities are
deemed total and permanent: (1) Temporary Provided, that:
total disability lasting continuously for more i. he was in the service a'
than 120 days. Under Section 2(b), Rule VII of time of disability; or
the Amended Rules on Ee's Compensation, ii. if separated, he has rende ed
"[a] disability is total and permanent if as a at least 3 years of service a
result of the injury or sickness the Ee is unable has paid at least 6 mont
to perform any' gainful occupation for a contributions in the yea
continuous period exceeding 120 days, except preceding his disability
as otherwise provided under Rule X of these
RUles." In the case at bar, Manioso was on 2, The temporary total disability benefits
sick leave from Jan 11, '95 up to his date of shall in no case be less than P70 a
retirement on May 15, '95 or for a period of day.
more than 120 days. Surely, the DENR. in
approving his more than 120 days leave must Note: A membercannotenjoythe temporarytota
have passed upon his Medical Certificate disability benefit and sick leave pa
relative to his ailments. Manioso's disability simultaneously,
having lasted for more than 120 days, he is
entitled to PTD benefits. (Bernandino Manioso, An applicationfor disability must be filed with the
vs. GSIS, G.R. No. 148323, Apr. 29, 2005, J. GSIS within 4 years from the date of the
Carpio-Morales) occurrenceof the contingency.

Q: Does Manioso's retirement from service

prevent him from entitlement to PTD
benefits?

A: No. Benefits due an Ee due to work-related

sickness shall be provided until he becomes
gainfully employed, or until his recovery or
death. None of these are present in Manioso's
case, It would be an affront to justice if
Manioso, a government Ee who had served for
36 years, is deprived of the benefits due him
for work-related ailments that resulted in his

UNiVERSITY OF SANTO TOMAS' ~~ 237

Pacu[taa de <Derecfzo CiviC ',.
 SOCIAL LEGISLATION: GOVERNMENT SERVICE INSURANCE SYSTEM

. Survivorship Benefits Q: After the end of the guaranteed 30

months, are the beneficiaries still ·entitled
Q: Who are entitled to survivorship to any survivorship benefits?
benefits?
A: Yes. The survivorship pension shall be paid
A: Upon the death of a member or pensioner, as follows:
his beneficiaries shall be entitled to
survivorship benefits. Such benefit shall 1. When the dependent spouse is the
consist of: only survivor, he/she shall receive the
1. the basic survivorship pension which basic survivorship pension for life or
is 50% of the basic monthly pension; until he or she remarries;
and
2. the dependent children's pension not 2. When only dependent children are
exceeding 50% of the basic monthly the survivors, they shall be entitled to
pension the basic survivorship pension for as
long as they are qualified, plus the
Q: Under what conditions are the primary dependent children's pension
beneficiaries entitled to the basic monthly equivalent to 10% of the basic
pension? monthly pension for every dependent
child not exceeding 5, counted from
A: Upon the death of a member, the primary the youngest and without substitution:
beneficiaries shall be entitled to:
3. When the survivors are the
1. Survivorship pension: Provided, That dependent spouse and the
the deceased: dependent children, the dependent
spouse shall receive the basic
a. was in the service at the time of survivorship pension for life or until
his death; or he/she remarries, and the dependent
b. if separated from the service, has children shall receive the dependent
rendered at least 3 years of children's pension.(Sec. 21[bJ)
service at the time of his death
and has paid 36 monthly Note: The dependent children shall be entitled to
contributions within the five-year the survivorship pension as long as there are
period immediately preceding his dependent children and, thereafter, the surviving
death; or has paid a total of at spouse shall receive the basic survivorship
least 180 monthly contributions pension for life or until he or she remarries.
prior to his death; or
Q: When are secondary beneficiaries
2. The sutvivorshlp pension plus a cash entitled to survivorship benefits?
payment equivalent to 100% of his
average monthly compensation for A: In the absence of primary benefiCiaries, the
every year of service: Provided, That secondary beneficiaries shall be entitled to:
the deceased was in the service at
the time of his death with at least 3 1. The cash payment equivalent to
years of service; OR 100% of his average monthly
compensation for each year of
3. A cash payment equivalent to 100% of service he paid contributions, but not
his average monthly compensation less than P12,OOO.00: Provided, That
for each year of service he paid the member is in the service at the
contributions, but not less than time of his death and has at least 3
P12,000.OO: Provided, That the years of service; or
deceased has rendered at least 3
years of service prior to his death but 2. In the absence of secondary
does not qualify for the benefits under beneficiaries, the benefits under this
item (1) or (2) of this paragraph. [Sec. par. shall be paid to his legal heirs.
21 (a)J (Sec. 21[c])

238
 UST GOLDEN NOTES 2010
Q: What are the benefits that the
beneficiaries are entitled to upon the death
of the pensioner?
A:
1. Upon the death of an old-age
pensioner or a member receivingthe
monthly income benefitfor permanent
disability, the qualified beneficiaries
shall be entitled to the survivorship
pension defined in Sec. 20 of this Act,
subject to the provisionsof par. (b) of
Sec.21. ~) ~ protagonists. However, he was shot to
2. When the pensioner dies within the
period covered by the lump sum, the
survivorship pension shall be paid
only after the expiration of the said
period.
Q: Gary Leseng was employed as a public
school teacher at the Marinduque High. On
April 27, 1997, a memorandum was issued
by the school principal designating Gary to
prepare the model dam project, which will
be the official entry of the school in the
search for Outstanding _ Improvised
Secondary Science Equipment for
Teachers. Gary complied with his
superior's instruction and took home the
project to enable him to finish before the
deadline. While working on the model dam
project, he came to contact with a live wire
and was electrocuted. The death certificate
showed that he died of cardiac arrest due to
accidental electrocution. . when the policeman is on vacation leave. (EGG
Bella (Gary's common-law wife) and Jobo
(his only son) filed a claim for death
benefits with the GSIS which was denied
on the ground that Gary's death did not
arise out of and in the course of
employment and therefore not
compensable because the accident
occurred in his house and not in the
school premises. Is Bella entitled to file
a claim for death benefits with the GSIS?
Why?
A: The beneficiariesof a memberof the GSIS
are entitled to the benefits arising from the
death of said member. Death benefits are
called survivorship benefits under the GSIS
Law. Not being a beneficiary, Bella is not
entitled to receive survivorship benefits. She
is not a beneficiary because she is a
common-law wife and not a legal dependent
spouse.(1991 Bar Question)
UNIVERSITY
Q: Is the cause of death of Gary (cardiac
arrest due to accidental electrocution in
his house) compensable? Why?
A: Yes. To be compensable under the GSIS
Law, the death need not be work connected.
Q: Abraham, a policeman, was on leave for
a month. While resting in their house, he
heard two of his neighbors fighting with
each other. Abraham rushed to the
scene intending to pacify the
death by one of the protagonists. Eva Joy,
a housemaid, was Abraham's surviving
spouse whom he had abandoned for
another woman years back. When she
learned of Abraham's death, Eva Joy filed
a claim with the GSIS for death benefits.
However, her claim was denied because:
(a) when Abraham was killed, he was on
leave; and (b) she was not the dependent
spouse of Abraham when he died. Resolve
with reasons whether GSIS is correct· in
denying the claim.
A: Yes, because under the law, a dependentis
one who is a legitimate spouse living
with the Ee. (Art 167 [iJ, LG) In the problem
given, Eva Joy had been abandoned by
Abraham who was then living already with
anotherwoman at the time of his death.
Moreover,Abrahamwas on leavewhen he was
killed. The 24-hour duty rule does not apply
v. Court of Appeals, G.R. No. 121545,Nov. 14,
1996) Taking together jurisprudence and the
pertinent guidelinesof the EGGwith respect to
claimsfor death benefits,namely:
1. That the Ee must be at the place
where his work requireshim to be;
2. That the Ee must have' been
performinghis officialfunctions;and
3. That if the injury is sustained
elsewhere, the Ee must have been
executing an order for the Er, it is not
difficult to understand then why Eva
Joy's claim was denied by the GSIS.
(Tancinco v. GSIS, G.R. No. 132916,
Nov. 16, 2001)
In the present case, Abraham was resting at
his house when the incident happened; thus,
he was not at the place where his work
required him to be. Although at the time of his
death Abraham was performing a police
function, it cannot be said that his death
occurred elsewhere other than the place
where he was supposed to be because he
was executing an order for his Er. (2005 Bar
Question)
OF SANTO TOMAS .~ 239
Pacu[tad de (])erecho Civil "'"
 SOCIAL LEGISLATION: GOVERNMENT SERVICE INSURANCE SYSTEM

: Funeral Benefits . . 3. For those without any life insurance

as of the effectivity of this Act, their
Q: What comprises the funeral benefit? insurance shall take effect following
said effectivity.
A: Cash not less than P12,OOO to be
increased to at least P18,OOO after 5 years Q: When maya member obtain optional
(specifically year 2002). The amount shall be life insurance coverage?
determined and specified by the GSIS through
an information circular distributed to all Ers for A:
posting at their premises. (Sec. 23, par. 1) 1. A member may at any time apply for
himself and/or his dependents an
Q: When will it be paid? insurance and/or pre-need coverage
embracing:
A: Upon the death of: a. Life
1. An active member b. Memorlal plans
2. A member who has been separated c. Health
from the service but is entitled to d. Education
future separation or retirement e. Hospitalization
benefits f. Other plans as maybe designed
3. A member who is a pensioner by GSIS
(excluding survivorship pensioners)
4. A retiree who is at the time of his 2. Any employer may apply for group
retirement was of pensionable age, at insurance coverage for its
least 60 years old, who opted to retire employees.
under RA 1616.

Loan Grant
, Life Insurance Benefits
Q: Where can GSIS loans be invested in?
Q: What are the classes of life insurance
coverage? A:
1. In direct housing loans to members
A: and group housing projects secured
1. Compulsory life insurance by first mortgage giving priority to the
2. Optional life insurance . low income groups
2. In short and medium term loans to
Note: The plans may be endowment or ordinary members such as salary, policy,
life. educational, emergency stock
purchase plan, and other similar
Q: When does compulsory life insurance loans
coverage take effect?
Q: What is the prescriptive period to claim
A: All Ees including the members of the the benefits?
Judiciary and the Constitutional
Commissioners except for Members of the A:
AFP, the PNP, BFP and BJMP, shall, under GR: 4 Years from the date of contingency
such terms and conditions as may be
promulgated by the GSIS, be compulsorily XPN: Life insurance and retirement (Sec.
covered with life insurance, which shall 28)
automatically take effect as follows:

1. Those employed after the effectivity Q: What is the process for the adjudication
of this Act, their insurance shall take of claims and disputes regarding the GSIS
effect on the date of their benefits?
employment;
2. For those whose insurance will A: The quasi-judicial functions of the GSIS
mature after the effectivity of this Act, shall be vested in its Board of Trustees.
their insurance shall be deemed
renewed on the day following the 1. The GSIS, in appropriate cases, or
maturity or expiry date of their any person whose rights are or may
insurance; be prejudiced by the operations or
enforcement of R.A. 8291 and other
 UST GOLDEN NOTES 2010

laws administered by the GSIS, may garnishment, execution, levy or other

file a petition before the GSIS either processes issued by the courts, quasi-
personally or through counsel. judicial bodies or administrative
agencies including the Commission on
Audit, disallowances, and from all
2. Within 15 days from receipt of the
financial obligations of the members.
notice of decision or award, the
aggrieved party may appeal the
Q: May a member enjoy the benefits
decision of the GSIS Board of
provided for in the Revised GSIS Act
Trustees to the CA. Appeal shall be
simultaneous with similar benefits
taken by filling a verified petition for
provided under other laws for the same
review with the CA. (Sec 1 to 5, Rule
43, Rules of Court) contingency?
,
A: Whenever other laws provide similar
3. When no appeal is perfected and
benefits for the same contingencies covered
there is no order to stay by the Board,
by this Act, the member who qualifies to the
by the CA or by the SC, any decision
benefits shall have the option to choose which
or award of the Board shall be
benefits will be paid to him. However, if the
enforced and executed in the same
benefits provided by the law chosen are less
manner as decisions of the RTC.
than the benefits provided under this Act, the
Note: The social security benefits shall GSIS shall pay only the difference. (Sec. 55)
be exempt from attachment,

Q: State the respective coverage of:

1. The Social Security Law
2. The Revised Government Service Insurance Act and
3. The Ees Compensation Act.

A:
Social Security Law Revised Government Service Employees
Insurance Act Compensation Act
Compulsory upon all E e s not Compulsory for all permanent Ees Compulsory upon all Ers and their
over 60 years of age and below 60 years of age upon Ees not over 60 years of age;
their Ers. appointment to permanent status, Provided, that an Ee who is over
and for all elective officials for the
60 years of age and paying
1.Filipinos recruited in the Phils. duration of their tenure. contributions to qualify for the
by foreign - based Ers for retirement or life insurance benefit
employment abroad may be 1. Any person, whether elected administered by the System shall
covered by the SSS on a or appointed, in the service of an be subject to compulsory coverage.
voluntary basis. Er is a covered Ee if he receives
compensation for such service.
2.
Compulsory upon all self-
employed persons earning
P1 ,800 or more per annum.

Note: The Ees Compensation Commission shall ensure adequate coverage of Filipino Ees employed abroad,
subject to regulations as it may prescribe. (Art. 170) Any person compulsorily covered by the GSIS
including the members of the AFP, and any person employed as casual, emergency, temporary, substitute or
contractual, or any person compulsorily covered by the SSS are covered by the Ee's Compensation Program.
(1997 Bar Question)

U N I V E R 5 I T Y 0 F SAN ToT 0 M A '5 241

Pacu(taa ae !J)erecno CiviC
 SOCIAL LEGISLATION: PORTABILITY LAw

Q: What is the limited portability rule?

A: A covered worker who transfers

employment from one sector to another or is
employed on both sectors, shall have
creditable services. or contributions on both
Systems credited to his service or contribution
record in each of the Systems and shall be
totalized for purposes of old-age, disability,
survivorship, and other benefits in either or
both Systems. (Sec. 3)

All contributions paid by such member

personally, and those that were paid by his
employers to both Systems shall be
considered in the processing of benefits which
he can claim from either or both Systems.
(Sec. 4)

Q: How are the "portability" provisrons of

R.A. No. 7699 beneficial or advantageous
to SSS and GSIS members in terms of their
creditable employment services in the
private sector or the government, as the
case may be, for purposes of death,
disability or retirement?

A: Portability provisions of R.A. No. 7699

shall benefit a covered worker whose
creditable services or contributions in both
systems credited to his service or contribution
record in each of the system and shall be
totalized for purposes of old-age, disability,
survivorship and other benefits. (Sec. 3) Academics Committee
Chairperson: Abraham D. Genuino II
The "portability" provisions of R.A. 7699 allow Vice-Chair for Academics: Jeannie A. Laurentino
the transfer of funds for the account and Vice-Chair for Admin & Finance: Aissa Celine H. Luna
benefit of the worker who transfers from one Vice-Chair for Lqyout & Design: Loise Rae G. Naval
system to another.
This is advantageous to the SSS and GSIS
Labor Law Committee
members for purposes of death, disability or
Subject Head' Lester Jay Alan E. Flores II
retirement benefits. In the event the employees
Assistant Subject Head' Domingo B. Diviva V
transfer from the private sector to the public
sector, or vice-versa, their creditable
employment services and contributions are Members:
carried over and transferred as well. (2005 Bar Rene Francis P. Batalla
Question) Diane Camilla R. Borja
Maria Kristina L. Dacayo-Garcia
Christian Nino A. Diaz
Angelo S. Diokno
Genesis R. Fulgencio
J eanelle C. Lee
Jemuel Paolo M. Lobo
Andrew W. Montesa
Maria Maica Angelika Roman

242
 UST GOLDEN NOTES 2010

Q: What is the concept of paternity leave

benefits?

A: Notwithstanding any law, rules and

regulations to the contrary, every married male
employee in the private and public sectors
shall be entitled to a paternity leave of 7 days
with full pay for the first 4 deliveries of the
legitimate spouse with whom he is cohabiting.

Q: What is paternity leave?

A: It refers to the benefits granted to a

married male employee allowing him not to
report for work for 7 days but continues to earn
the compensation therefore, on the condition
that his spouse has delivered a child or
suffered a miscarriage for purposes of
enabling him to effectively lend support to his
wife in her period of recovery and/or in the
nursing of the newly-born child.

Q: What are the requirements in order to

avail paternity leave?

A: The male employee (Ee) applying for

paternity leave shall:
1. Notify his employer (Er) of the
pregnancy of his legitimate spouse
and
2. The expected date of such delivery.
4 .~ •••. ,r~•., "fIIY.' •

Q: What are the conditions for entitlement

to paternity leave? Academics Committee
Chairperson: Abraham D. Genuino II
A: The male Ee is; Vice-Chair for Academics: Jeannie A. Laurentino
1. Legally married to, and is cohabiting Vice-Chair for Admin & Finance: Aissa Celine H. Luna
with the woman who delivers the Vice-Chair for Lqyout & Design: Loise Rae G. Naval
baby
2. Ee of private or public sector; Labor Law Committee
3. Only for the first 4 deliveries of Subject Head' Lester Jay .AlanE. Flores II
legitimate spouse with whom he is
Assistant Subject Head: Domingo B. Diviva V
cohabiting; and
4. Notify his Er of the pregnancy of his
Members:
legitimate spouse and the expected
date of such delivery Rene Francis P. Batalla
Diane Camilla R. Borja
Note: For purposes of this Act, delivery shall Maria Kristina L. Dacayo-Garcia
include childbirth or any miscarriage. Christian Nino A. Diaz
Angelo S. Diokno
Genesis R. Fulgencio
J eanelle C. Lee
Jemuel Paolo M. Lobo
Andrew W. Montesa
Maria Maica Angelika Roman

UN I V E R SIT Y 0 F SAN ToT 0 MAS' 243

Pacu{taa ae Verecno Civif
 SOCIAL LEGISLATION: SOLO PARENTS WELFARE ACT OF 2000

Q; Who shall be eligible for assistance?

A; Any solo parent whose income in the place

Q Who is a "solo parent"? of domicile falls below the poverty threshold as
set by the NEDA and subject to the
A: Any individual who falls under any of the ft. assessment of the DSWD worker in the area,
categories:
Provided, however, That any solo parent
1. A woman who gives birth as a result of whose income is above the poverty threshold
rape and' other crimes against shall enjoy the benefits mentioned in Sec. 6, 7
chastity even without a final and 8 of this Act.
conviction of the offender, provided,
That the mother keeps and raises the Q: What are the benefits available to a solo
child; parent?

2. Parent left solo or alone with the A:

responsibility of parenthood due to: 1. Flexible work schedule (Sec. 6)
2. No work discrimination (Sec. 7)
a. Death of spouse; 3. Parental Leave (Sec. 8)
b. Detention or service of sentence of 4. . Educational Benefits (Sec. 9)
spouse for a criminal conviction 5. Housing Benefits (Sec, 10)
for at least 1 yr; 6. Medical Assistance (Sec 11)
c. Physical and/or mental incapacity
of spouse Q: What is a flexible work schedule?
d. Legal separation or de facto
separation from spouse for at A: The right granted to a solo parent Ee to
least 1 yr as long as he/she is vary his/her arrival and departure time
entrusted with the custody of the without affecting the core work hours as
children; defined by the Er.
e. Nullity or annulment of marriage as
decreed by a court or by a church Provided: That any Er may request
as long as he/she is entrusted exemption from the above requirements
with the custody of the children; from the DOLE on certain meritorious
f. Abandonment of spouse for at grounds, (Sec 6)
least 1 yr;
Q: What is parental leave?
3. Unmarried mother/father who has
preferred to keep and rear his or her A: Leave benefits granted to a solo parent to
child/children instead ot. enable him/her to perform parental duties
a. having others care for them or and responsibilities - where physical
b. give them up to a welfare presence is required.
institution;
In addition to leave privileges under
4. Any other person who solely provides: existing laws, parental leave of not more
a. parental care and than 7 working days every year shall be
b. support to a child or children; granted to any solo parent Ee who has
rendered service of at least 1 year. (Sec. 8)
5. Any family member who assumes the
responsibility of head of family as a Q: What is the rule on educational
result of the: benefits?
a. death,
b. abandonment, A: The DECS, CHED and TESDA shall
c. disappearance or provide the following benefits and
, d. prolonged absence of the parents privileges:
or solo parent.
1. Scholarship programs for qualified solo
Note: A change in the status or circumstance of parents and their children in
the parent claiming benefits under this Act, such institutions of basic, tertiary and
that helshe is no longer left alone with the technical/skills education; and
responsibility of parenthood, shall terminate
his/her eligibility for these benefits. (Sec.3)

244
 UST GOLDEN NOTES 2010
2. Nonformal education programs
appropriate for solo parents and their
children. (Sec. 9)

Q: What is the rule on housing benefits?

A: Solo parents shall be given allocation in

housing projects and shall be provided
with liberal terms of payment on said
government low-cost housing projects in
accordance with housing law provisions
prioritizing applicants below the poverty line
as declared by the NEDA. (Sec. ~10) ~

Academics Committee
Chairperson: Abraham D. Genuino n
Vice-Chair for Academics: Jeannie A Laurentino
Vice-Chair for Admin & Finance: Aissa Celine H. Luna
Vice-Chair for Layout & Design: Loise Rae G. -aval

Labor Law Committee

SII€ject Head' Lester Jay Alan E. Flores
Assistant Subject Head' Domingo B. Diviva \-

Members:
Rene Francis P. Batalla
Diane Camilla R. Borja
Maria Kristina L. Dacayo-Garcia
Christian Nino A Diaz
Angelo S. Diokno
Genesis R. Fulgencio
J eanelle C. Lee
J emuel Paolo M. Lobo
Andrew W. Montcsa
Maria Maica Angelika Roman

UNIVERSITY OF SANTO TOMAS

PacuCtaa de Verecno Civi]
245
 SOCIAL LEGISLATION: PERA ACT OF 2008

2. Upon the death of the contributor,

irrespective of the age of the
contributor at the time of his death a
complete distribution shall be made.
Q: What is the Personal Equity and
Retirement Account (PERA)? Q: What is early withdrawal?

A: It is a voluntary retirement account A:

established by and for the exclusive use and GR:
benefit of a contributor for the purpose of being 1. Any withdrawal of PERA assets
invested solely in PERA investment products before reaching the age of 55 or the
in the Philippines. The contributor shall retain death of the contributor;
the ownership, whether legal or beneficial, of
funds placed therein, including all earnings of 2. Any withdrawal of PERA assets
such funds. He makes all investment decisions before the contributor has made
pertaining to his PERA, with an option to contributions to his PERA for at least
appoint an Investment Manager. 5 years; or

Q: What is a contributor? XPN: When the entire proceeds from such

A: Any person with the capacity to contract
and possesses a tax identification number who
establishes and makes contributions to a
PERA.
withdrawal are immediately transferred to
another PERA Investment Product andlor
another administrator.
Q: What is the penalty on early withdrawal?

Q: Can a contributor establish more than 1 A: The penalty would be equal to the tax
PERA? incentives enjoyed by the Contributor during
the entire period of the PERA (lRR, Rule 15)
A: Yes. A Contributor may create and maintain
a maximum of 5 PERAs, at anyone time, Q: When can there be an early withdrawal
provided that the contributor shall designate without a penalty?
and maintain only one administrator for all his
PERA. A: No early withdrawal penalty shall be
imposed on any withdrawal of any funds for
Q: What is the benefit to the Ers if they the following purposes:
contribute?
1. For payment of accident or iIIness-
A: If a private Er decides to contribute to its related hospitalization in excess of 30
Ees PERA, the amount shall be allowed as a days attested by a notarized doctor's
deduction from the Ers gross income. certificate; and
However, the Er must also comply with the
mandatory SSS contribution and retirement 2. For payment to a contributor who
pay. has been subsequently rendered
permanently totally disabled as
Q: How much mayan Er contribute? defined under the Ee's
Compensation Law, Social Security
A: The Er can only contribute up to the extent Law and Government Service
of the amount allowable to the contributor/Ee. Insurance System Law together with
a certification from the pertinent
Q: When can a distribution be made? government agency.

A:
1. Upon reaching the age of 55 years:
Provided, That the contributor has
made contributions to the PERA for at
least 5 years. The distribution shall be
made in either lump sum or pension
for a definite period or lifetime
pension, at the option of the
contributor. The contributor, however,
has the option to continue the PERA;
or

246
 UST GOLDEN NOTES 2010

COMPREHENSIVE The State shall protect the rights of

AGR.A.R.IA.N.REFORM L.A.W.O.F.1988 subsistence fishermen to the preferential use
• R.A.66S7. of communal marine and fishing resources. It
'Asameridedby R.A. 9700 shall provide support through appropriate
technology and research, adequate financial,
Q: What are the Constitutional Provisions production and marketing assistance and other
governing Comprehensive Agrarian Reform services.
Law (CARL)?
The State shall provide incentives to
A: landowners to invest the proceeds of the "
1. Sec. 9, Art. II, Declaration of agrarian reform program to promote
Principles and State Policies; industrialization, employment and privatization
2. Sec. 9, Art. III, Bill of Rights; ~ of public sector enterprises.
3. Sec. 7, Art. X: Local Government;
4. Sec. 1 - 3, Art XII, National Note: R.A. 6657 has not been superseded by the
Economy and Patrimony; CARPER Law or R.A. 9700 but strengthens or
. 5. Sec. 4- 6 and 8, Art. XIII, Social improves the CARL.
Justice and Human Rights;
6. Sec. 22, Art. XVIII, Transitory Q: Upon what right is the agrarian reform
Provisions program to be undertaken by the State
founded?
Q: What are the principle and policies of
the State in the enactment of CARP Law of A: It is founded on the right of the farmers and
1988? regular farmworkers, who are landless, to own
directly or collectively, the lands they till or, in
A: The welfare of the landless farmers and the case of other farmworkers, to receive a just
farm workers will receive t~e highest share of the fruits thereof. (Sec. 4, Art. XII,
consideration to promote social justice and to 1987 Constitution)
move the nation towards sound rural
development and industrialization, and the Q: What is agrarian reform?
establishment of owner cultivatorship of
economic-sized farms as the basis of A: Agrarian reform means the redistribution of
Philippine agriculture. lands, regardless of crops or fruits produced,
to farmers and regular farm workers who are
The State shall promote industrialization and landless, irrespective of tenurial arrangement,
full employment based on sound ag'ricultural to include the totality of factors and support
development and agrarian reform, through services designed to lift the economic status of
industries that make full and efficient use of the beneficiaries and all other arrangements
human and natural resources, and which are alternative to the physical redistribution of
competitive in both domestic and foreign lands, such as production or profit-sharing,
markets, taking into account tillers' rights and labor administration, and the distribution of
national food security. shares of stock which will allow beneficiaries to
receive a just share of the fruits of the lands
The agrarian reform program is founded on the they work. [Section 3 [a])
right of farmers and regular farm workers, who
are landless, to own directly or collectively the Q: What is agriculture, agricultural
lands they till or, in the case of other farm enterprise or agricultural activity?
workers, to receive a share of the fruits
thereof. A: It means the cultivation of the soil, planting
of crops, growing of fruit trees, including the
The State shall recognize and enforce the harvesting of such farm products, and other
rights of rural women to own and control land, farm activities and practices performed by a
to receive a just share of the fruits thereof, and farmer in conjunction with such farming
to be represented in advisory or appropriate operations done by persons whether natural of
decision-making bodies. These rights shall be juridical. (Section 3 [bJ, as amended by R. A.
independent of their male relatives and of their 7881)
civil status.

This land-sharing shall be subject to prior

rights, homestead rights of small settlers and
the rights of indigenous communities to their

~i~
ancestral lands.

UNIVERSITY OF SANTO TOMAS' 247

PacuCtaa de (])eT'eChO CiviC
 SOCIAL LEGISLATION: AGRARIAN REFORM
Q: What is an agricultural land?
A: It refers to land devoted to agricultural
activity as defined in this Act and not classified
as mineral, forest, residential, commercial or
industrial land. (Sec. 3 [cl)
To make the land agriculture, it is not enough
that crops are grown or animals are raised
thereon; the land must be by destination
devoted to agricultural production; if the raising
of crops or animals are simply incidental to the
principal purpose, the land is not agricultural.
(PNR v. Han. Del Valle, et. aI., G.R. No. L-
29381, Sep. 30, 1969) . 2.
Q: Is the conversion of agricultural land to
non-agricultural land allowed?
A: No. Under the CARPER Law, irrigated and
irrigable lands, shall not be subject to
conversion. (Sec. 22, R.A. 9700) Any
conversion to avoid CARP coverage is a
prohibited act.(Sec. 24, R.A. 9700)
Q: What is an agrarian dispute?
A: It refers to any controversy relating to
tenurial arrangements, whether leasehold,
tenancy, stewardship or otherwise, over lands
devoted to agriculture, including disputes
concerning the fannworkers' association or
representation of person in negotiating, fixing,
. maintaining, changing, or seeking to arrange
terms or conditions of such tenurial
arrangements.
It includes controversy relating to
compensation of lands acquired under this Act
and other terms and conditions of transfer of
ownership from landowners to fannworkers,
tenants and other agrarian reform
beneficiaries, whether the disputants stand in
the proximate relation of farm operator and
beneficiary, landowner and tenant, or lessor
and lessee (Sec. 3 (d), RA 6657)
Q: The guardians over properties owned by
one Almendras initially soid, with the
approval of the guardianship court the lots
comprlsmg the subject plantation to
petitioners. Thereafter, the respondents
filed an ejectment case against petitioners
and also filed a Complaint, before the DAR,
alleging that, Almendras installed them in
the late 40's and early 50's as share
tenants, tenant-tillers, and farmworkers in
the plantation. Provincial Adjudicator
decided in favor of respondents.
Petitioners appealed the decision to the
DARAB.
243
Are the essential elements of agricultural
tenancy are supported by the evidence,
therefore considering respondents as
legitimate share tenants?
A: No. It is settled that the existence of a
tenancy relationship cannot be presumed.
There must be evidence to prove it. For a
tenancy relationship to exist, the following
essential elements must concur: The
1. The parties are the landowner and
the tenant or agricultural lessee;
The subject matter of the relationship
is an agricultural land;
3. There is consent between the parties
to the relationship;
4. The purpose of the relationship is to
bring about agricultural production;
5. There is personal cultivation on the
part of the tenant or agricultural
lessee; and
6. The harvest is shared between
landowner and the tenant or
agricultural lessee.
Of the essential elements of a tenancy
relationship, the records do not show that the
first, third, and fourth elements had been
proved by substantial evidence. No written
tenancy contract or proof of acts implying a
mutual agreement to enter into a tenancy
contract between Almendras and respondents
was proffered. Respondents not being tenants,
the case is not an agrarian dispute, hence,
beyond the DARAB's jurisotction. It was,
therefore, error for the Court of Appeals to
reverse the DARAB finding that, among other
things, respondents failed to prove their status
as bona fide tenantsllessees of the plantation.
(Dalwampo, et al. V. Quinocol Farmers, et al.,
G.R. No. 160614, Apr. 25, 2006, J. Carpio-
Morales)
 UST GOLDEN NOTES 2010

Q: Distinguish a farmer from a farmworker.
A:
I., ~ , ,farmer : 0
Refers to a natural
person whose
primary livelihood is
cultivation of land or
the production of
agricultural crops
either by himself, or
primarily with the
assistance of his
immediate farm
household, whether
the land is owned by
him, or by another
person under a
leasehold or share
tenancy agreement
or arrangement with
the owner thereof.
(Sec, 3 (f])
(BARC) to first certify that the potential
beneficiaries are Farmers or Regular
Farmworkers actually tilling the lands and the list
- Farmworker should by attested under oath by the Landowner
A. natural person who and lastly will state under oath before a judge that
he/she is willing to work on the land and make it
renders service for
productive and assume the obligation of paying
value as an employee
the amortization.
or laborer in an
agricultural enterprise
Q: Under the CARPER Law in what form
or farm regardless of
should land be awarded to the
whether his
beneficiaries?
compensation is paid
on a datly, weekly,
A: As a matter of policy in the CARPER law,
monthly or "pafyaw"
land awarded should be in the form of
basis, The term
individual title.
includes an individual
whose work has
Note: Award of the land must be in actual and
ceased as a
physical possession of the land in contrast with
consequence of, or in
non-distributed schemes like Leaseback
connection with, a agreements and Stock distribution open. (R.A.
pending agrarian 9700)
dispute who has not
obtained a Q: What are the conditions under the
substantially CARPER law for the issuance of collective
equivalent and titles?
regular farm
employment, (Sec. 3 A: The conditions for the issuance of collective
9 titles are as follows:

Q: What are the classifications of 1. The current farm management

farmworkers? system of the land covered by carp
will not be appropriate for individual
A:
I farmworker
farming of farm parcels;
Regular I Seasonal Other
Farmworker Farmworker 2, The farm labor system is specialized,
Natural Natural Farmworker where the farmworkers are organized
person who person who who does not by functions and not by specific
is employed is employed fall under parcels such as spraying, weeding,
on a on a paragraphs packing and other similar functions;
permanent recurrent, (g), (h) and
basis by an periodic or (i), (Sec. 3 {jJ) 3, The potential beneficiaries are
agricultural interm ittent currently not farming individual
enterprise or basis by an parcels but collectively work on large
farm. (Sec. 3 agricultural contiguous areas; and
(hJ) enterprise or
farm, whether 4. The farm consists of multiple crops
as a being farmed in an integrated manner
permanent or or includes non-crop production areas
a non- that are necessary for the viability of
permanent farm operations, such as packing
laborer, such plants, storage areas, dikes, and
as "dumaan", other similar facilities that cannot be
"sacada", subdivided or assigned to individual
and the like. farmers. (Sec. 10, R.A. 9700)
(Sec. 3 [iJ)

Note: Tenants and Regular Farmworkers Are

First Priority Beneficiaries. (Sec. 8, R.A. 9700)

Under the CARPER law a new procedure for the

identification of agrarian reform beneficiaries
requires the Barangay Agrarian Reform Council

UNIVERSITY OF
Pacu(taa
SANTO TOMAS
d« <Dereclio Ci"fJiC
c·
.• " 249
 SOCIAL LEGISLATION: AGRARIAN REFORM
Q: A Certificate of Land Ownership Award
(CLOA) was issued to the owner, Cristobal
Olar covering the subject lot. Respondents,
OIar's legal heirs, allowed Spouses Capitle
to occupy the lot. Subsequently, Spouses
Capltle did not pay rentals despite demand,
and neither did they heed the demand to
return the possession of the lot, claiming
that they have been in possession of the lot
since 1960 and even presented a "Waiver
of Rights" executed by Olar wherein he
renounced in their favor his rights and
participation over the lot. Spouses Capitle
then filed before the Municipal Agrarian
Reform Officer a petition for cancellation of
the CLOA issued to Olar, claiming that they
are the new farmer-beneficiaries as shown
by the "Waiver of Rights" executed by Olar
In the presence of the Brgy. Chairman. Can
the Spouses Capitle can. be considered as
farmer-beneficiaries of the subject lot?
A: No. Spouses Capitle's argument that "it
would be absurd for Olar to bequeath his
property to his estranged wife not to a relative
who had indeed helped him in tilling the
property and took good care of his needs," is a
virtual admission that their possession was not
in the concept of owners, they having merely
"helped" in tilling the lot, thereby
acknowledging that Olar was the actual
possessor and tiller. CA is correct in saying
that no amount of possession under whatever
claim (actual tilling and actual possession) can
clothe petitioner-appellants with any lawful
right over the questioned property. It simply
established the fact that petitioners-appellants'
claim could in no way legally stand against
Cristobal Olar, whose title under the CLOA
cannot be overthrown or supplanted by some
organizational resolution and/or barangay
attestations/certifications. (Spouses Capitle v.
Elbambuena Olar, G.R. No. 169193, Nov. 30,
2006, J. Carpio-Morales)
Q: What are the lands covered by CARP?
A: All public and private agricultural lands as
provided in Proclamation No. 131 and EO No.
229 (regardless of tenurial arrangement and
commodity produced), incluaing other lands of
the public domain suitable for agriculture:
Provided, that landholdings of landowners with
a total area of 5 hectares and below shall not
be covered for acquisition and distribution to
qualified beneficiaries.(As amended by R.A.
9700)
More specifically,
250
1. All alienable and disposable lands of
the public domain devoted to or
suitable for agriculture.
Note: No reclassification of forest or
mineral lands to agricultural lands shall
be undertakenafter the approvalof this
Act until Congress, taking into account
ecological, developmental and equity
considerations, shall have determined
by law, the specific limits of the public
domain
2. All lands of the public domain in
!!xcess to the specific limits as
determined by Congress in the
preceding paragraph;
3. All other lands owned by the
government devoted to or suitable for
,agriculture;
4. All private lands devoted to or
suitable for agriculture regardless of
the agricultural products raised or that
can be raised thereon.
Note: A comprehensiveinventory system in
consonancewith the national land use plan
shall be institutedby the DAR in accordance
with the Local Government Code, for the
purposeof properlyidentifyingand classifying
farmlandswithin 1 year from effectivityof this
Act, without prejudice to the implementation
of the land acquisition and distribution. (As
amended by R.A. 9700)
Q: What are the exempted and excluded
lands?
A:
1. Parks, wildlife, forest reserves,
reforestation, fish sanctuaries and
breeding grounds, watersheds and
mangroves.
2. Private lands used for prawn farms
and fishponds.
3. Lands used and found to be
necessary for national defense,
school sites and campuses, including
experimental farm stations operated
educational purposes, seeds and
seedlings research and pilot
production center, church sites and
convents, mosque sites and Islamic
centers, communal burial grounds
and cemeteries, penal colonies and
penal farms, government and private
research and quarantine centers and
all lands with 18% slope and over.
 UST GOLDEN NOTES 2010
Q: What are the retention limits? leaseholder.

A: The tenant must exercise this option within a

GR: 5 hectares for the landowner period of 1 year from the time the landowner
manifests his choice of the area for retention.
XPN: Provincial, city and municipal (Sec. 6)
government units acquiring private
agricultural lands by expropriation or other Q: What is the retention limit exemption of
modes of acquisition to be used for actual, LGUs?
direct and exclusive public purposes, such
as: A: LGUs except the 8arangays can own
agricultural lands beyond the 5-hectare limit
1. roads and bridges set by CARL. This privilege is only applicable
2. public markets to lands that will be used for public purposes
3. school sites such as roads, bridges, public markets, school,
4. resettlement sites resettlement, LGU facilities, public parks and
5. local government facilities barangay plazas.
6. public parks and barangay plazas or
squares, consistent with the approved Note: There are two limitations to this exemption:
local comprehensive land use plan 1. The use of the land must be actual,
direct and exclusive; and
Provided, that lands subject to CARP 2. The use must be consistent with the
shall first undergo the land acquisition approved comprehensive land use
plan17. Moreover, if the land is covered
and distribution process of the
under CARP and the LGU wants to use
program:
it for one of the public purpose
mentioned earlier then it must be
Provided, further, That when these expropriated first and the farmers
lands have been subjected to therein must be justly compensated.
expropriation, the agrarian reform
beneficiaries therein shall be paid just Q: Constructed on respondent's parcel of
compensation. (As amended by R.A.
land are houses occupied by its workers.
9700)
Spouses Pasco used to work for
respondent until '87 when they ceased to
7. 3 hectares may be awarded to each be Ee's of the respondent They were asked
child of the landowner, provided: to vacate the house they were occupying
a. at least 15 years of age but they refused, hence, respondent filed a
b. actually tilling or managing the complaint for unlawful detainer against
farm
them before the MTCC. Spouses Pasco
Provided, that original homestead claimed that they built the house occupied
grantees or direct compulsory heirs -- by them at their own expense and their stay
who still own the original homestead - on the land was upon the tolerance of
- shall retain the same areas as long respondent. MTCC ordered petitioners to
as they continue to cultivate said vacate the premises. After the
homestead. promulgation of the decision, the Municipal
Agrarian Reform Office sent a Notice of
Q: Who has the right to choose area to be Coverage and Field Investigation adviSing
retained?
respondent that its parcel of land is now
covered under RA. 6657 or CARL, and
A: It shall pertain to the landowner. Provided, inviting the presence of a representative to
that in case the area selected for retention by a field lnvestlqation.
the landowner is tenanted, the tenant shall
have the option:
Can a person who has been identified by
1. To remain or
the DAR as potential agrarian reform
2. Be a beneficiary in the same or benefiCiary may be ejected from the land
another agricultural land with similar where he is identified as such, by the
or comparable features. landowner, who has already been notified
by the DAR of the coverage of his land by
Note: If tenant chooses to remain, he shall be the CARP?
considered a leaseholder and shall lose his right
to be a beneficiary under this Act. In case the A: Yes. A Notice of Coverage does not ipso
tenant chooses to be a beneficiary in another facto render the land a land reform area. The
agricultural land, he loses his right as a owner retains its right to eject unlawful

UNIVERSITY OF SANTO TOMAS ~•• 251

PacuCtad de <Derecfzo CiviC . .'
 SOCIAL LEGISLATION: AGRARIAN REFORM

possessors of his land, as what respondent did Q: What are the modes of payment of
in the present case. compensation to the land owner?
As for the registration of petitioners as
potential CARP beneficiaries, the same does A: At the option of the landowner he shall be
not help their cause. As "potential" CARP paid in any of the following mode:
beneficiaries, they are included in the list of
those who may be awarded land under the 1. Cash payment, under the following
CARP. Nothing in the records of the case terms and conditions:
shows that the DAR has made an award in
favor of petitioners. (Spouses Pasco vs. Pison- a. For lands above 50 hectares,
Arceo Agricultural and Dev't Corp., G. R. No. insofar as the excess hectarage
165501, Mar.2B, 2006, J. Carpio-Morales) is concerned - 25% cash, the
balance to be paid in government
Q: Who are landless beneficiaries? financial instruments negotiable
at any time.
A: One who owns less than 3 hectares of b. For lands above 24 hectares and
agricultural land. up to 50 hectares - 30% cash,
the balance to be paid in
Q:What are the modes of land acquisition? government financial instruments
negotiable at any time.
A: c. For lands 24 hectares and below
1. Voluntary offer to sell (VaS) - 35% cash, the balance to be
2. Compulsory acquisition; paid in government financial
instruments negotiable at any
Note: No more Voluntary Land Transfer (VLT) time.
after June 30, 2009. (R.A. 9700). VLT has been
abused by the landowners to put people who are 2. Shares of stock in government-owned
not qualified or people who are loyal to them as
or controlled corporations, LBP
beneficiaries.
preferred shares, physical assets or
other qualified investments in
Q: What are the circumstances to be
accordance with guidelines set by the
considered in the determination of just PARC;
compensation?
3. Tax credits which can be used against
A: any tax liability;
1. The cost of acquisition of the land
2. the value of the standing crop
4. LBP bonds, which shall have the
3. The current value of like properties
following features:
4. Its nature
a. Market interest rates aligned with
5. Actual use and income
9 1-day treasury bill rates - 10%
6. Sworn valuation by the owner
of the face value of the bonds
7. Tax declarations
shall mature every year from the
8. Assessment made by government
date of issuance until the 10th
assessors
year: Provided, That should the
9. 70% of the zonal valuation of BIR,
landowner choose to forego the
translated into a basic formula by the
cash portion, whether in full or in
DAR subject to the final decision of part, he shall be paid
the proper court.
correspondingly in LBP bonds;
b. Transferability and negotiability.
As additional factors:
1. Social and economic benefits
contributed by the farmers and the
farm workers and by government to
the property
2. Non-payment of taxes or loans
secured from any government
financing institution on the said land

252
 UST GOLDEN NOTES 2010

Q: May lands acquired under the CARL be cases involving agricultural lands
sold, transferred or conveyed? irrespective of the presence of tenancy
relationship?
A:
GR: Lands acquired by beneficiaries under A: No. The allegations in petitioners' com pia,
this Act may not be sold, transferred or show that the action is one for recovery f
conveyed. possession, not one which involves a
agrarian dispute. It is the RTC which has
XPN: jurisdiction over it and not DARAB. T e
1. Through hereditary succession, or respondents' only basis in assailing the
2. To the government, or jurisdiction of the trial court is that the subj :
3. To the LBP, or matter of the case is an agricultural land and
4. To other qualified benefieiaries .iot a that they do not deny at all the allegation of e
period of 10 years: ~ complaint of petitioners that there is
Provided, however, that the children or the tenancy or leasehold agreement betwee
spouse of the transferor shall have a right to them; it unmistakably shows that there is n
repurchase the land from the government or agrarian dispute to speak of. (Sindico, vs
LBP within a period of 2 years. Gerardo Diaz;, G.R. No. 147444, Oct. 1, 2004,
J. Carpio-Morales)
Q: Is the decision of DAR immediately
executory?

A: Yes, Notwithstanding an appeal to the

Court of Appeals, the decision of the DAR
shall be immediately executory, except a
decision or a portion thereof involving solely
the issue of just compensation.

Q: When will DAR decide the case or

controversy?

A: Any case or controversy before it shall be

decided within 30 days after it is submitted for
resolution.

Only 1 motion for consideration shall be

allowed. Academics Committee
Chairperson: Abraham D. Genuino _:
Any order, ruling or decision shall become final J
Vice-Chair Jar Academics: eanrue A. Laurenuno
after the lapse of 15 days from receipt of a Vice-Chair jor Admin & Finance: Aissa Celine H. LulJ2.
copy thereof. Vice-Chair Jar Layout & Design: Loise Rae G. ~ ava,

Q: Virgilio Sindico, joined by his wife, filed Labor Law Committee

a civil case before the RTC of Iloilo City
Subject Head' Lester Jay Alan E. Flores -
against his first cousin Felipe Sombrea,
Assistant Subject Head' Domingo B. Diviva -
along with the latter'S wife, for Accion
Reinvindicatoria. After the defendants
received the summons, they filed a Motion
Members:
to Dismiss (MD) the complaint, alleging that Rene Francis P. Bar a
the RTC has no jurisdiction over their Diane Camilla R. Bo '2
person and that as the subject matter of the Maria Kristina L. Dacayo-Garm
case is an agricultural land which is Christian Nino /\. Diaz
covered by the CARP of the government, Angelo S. Diokno
the case is within the exclusive original Genesis R. Fulgencio
jurisdiction of the DARAB in accord with Jeanelle C. Lee
Sec. 50 of the CARL of 1988. To the MD, ] emuel Paolo M. Lobo
the plaintiffs filed an Opposition alleging
Andrew W. Monte sa
that the case does not involve an agrarian
Maria Maica Angelika Roman
dispute, there being no tenancy
relationship or leasehold agreement with
the defendants. Does the DARAB have
original and exclusive jurisdiction over

UNIVERSITY OF SANTO TOMAS' (.<loA. 253

PacuCtaa ae (])ereclio CiviC '.'
 SOCIAL LEGISLATION: ACT AGAINST CHILD LABOR

2. Where the child's employment or

petticipetion in public entertainment
or information through cinema,
Q: What is child labor? theater, radio, television or other
forms or media is essential, Provided:
A: Any work or economic activity performed-by a. The employment contract is
a child that subjects him or her to any form of concluded by the child's parents
exploitation or is harmful to his or her health or legal guardian with the
and safety or physical, mental or psychosocial express agreement or the child
development. concerned, if possible, and the
approval of DOLE
Q: Who is a working child? b. The following requirements are
complied with:
A: Any child engaged as follows: i. The Er shall ensure
1. When the child is below 18 years of protection, health, safety,
age in a work or economic activity morals and normal
that is not child labor; or development of the child
2. When the child is below 15 years of ii. The Er shall institute
age: measure to prevent the
a. In work where he/she is directly child's exploitation or
under the responsibility of his/her discrimination taking into
parents or legal guardian and account the system and
where only members of the level of remuneration and
child's family are employed; or the duration and
b. In public entertainment or arrangement of working
information time
iii. The Er shall formulate and
Q: When may the State intervene in behalf implement, subject to the
of the child? approval and supervision
of competent authorities, a
A: continuing program for
1. The parent, guardian, teacher or training and skills
person having care or custody of the acquisition of the child
child fails or is unable to protect the iv. The child is provided with
child against abuse, exploitation and at least mandatory
discrimination; or elementary or secondary
education
2. When such acts are committed
against the child by the said parent, Q: What is the limitation on the hours of
guardian, teacher or person having work of a working child?
care and custody over the child
A: If the child is:
Q: Can children below 15 years of age be 1. Below 15 years of age - not more
employed? than 20 hours a week and not more
than 4 hours a day
A: Not allowed to work between
GR: No. 8:00 pm - 6:00 am

XPN: 2. At least 15 years of age but below 18

1. When a child works directly under the years of age - will not exceed 8 hours
sale responsibility of his/her parents a day or 40 hours a week
or legal guardian and where only Not allowed to work between
members of his/her family are 10:00 pm - 6:00 am
employed, Provided that:
a. His employment neither
endangers his life, safety, health
and morals, nor impairs his
normal development; and
b. The parent or legal guardian
shall provide the said minor child
with the prescribed primary
and/or secondary education

254
 UST GOLDEN NOTES 2010

Q: What are the worst forms of labor?

A:
1. All forms of slavery (Anti-Trafficking
of Persons Act of 2003) or practices
similar to slavery such as sale and
trafficking of children, debt bondage
and serfdom and forced or
compulsory labor, including
recruitment of children for use in
armed conflict;

2. The use, procuring, Qffering. or

exposing of a child pornography or for
pornographic performances;

3. The use, procuring, offering or

exposing of a child for illegal or illicit
activities, including the production
and trafficking of dangerous drugs
and volatile substances prohibited
under existing laws;

4. Work which, by its nature or

circumstances in which it is carried
out, is hazardous or likely to be
harmful to the health, safety or morals
of children ..

Q: Who can file a complaint for unlawful

acts committed against children?

A:
1. Offended party
2. Parents or guardians
3. Ascendants or collateral relatives
within the 3'd degree of consanguinity
4. Officer, social worker or Academics Commi ee
representative of a licensed child- Chairpmon: Abraham D. Gen
caring institution Vice-Chair for Academics:] eannie A. Laurenc.o;
5. Officer or social worker of DSWD Vice-Chair for Admin & Finance: Aissa Celine H. u=
6. Barangay chairman of the place Vice-Chair for LayOlit & Design: Loise Rae G. _.:;:,'"-
where the violation occurred, where
the child is residing or employed Labor Law Committee
7. At least 3 concerned, responsible Subject Head' Lester] ay Alan E. Flores ::-=
citizens where the violation occurred .Assistaat Subject Head' Domingo B. Diviva --

Q: Which courts have jurisdiction over

Members.
offenses punishable under R.A. 9231?
Rene Francis P. B:e.~
A: The Family Courts shall have original Diane Camilla R. Bc r i
jurisdiction over all cases involving offenses Maria Kristina L. Dacavo-Garcu
punishable under this Act Christian Nino _\. .l2"
Angelo . Dicker
Genesis R. Fulgenc.c
]eanelle C ~
lemuel Paolo -!. :......~<
Andrew \'C _ 1or::e;~
Maria Maica Angelika Rorruz

UNIVERSITY OF SANTO TOMAS' 255

~•...•.•...•.•
PacuCtaa ae ([)erecfw CiViC -~-
 SOCIAL LEGISLATION: MAGNA CARTA OF WOMEN

Q: What is the policy of the State in

enacting the MeW?

A: The State shall endeavor to develop plans,

policies, programs, measures, and
mechanisms to address discrimination and
inequality in the economic, political, social, and
cultural life of women and men.

Q: What is discrimination against women?

A: Any gender-based distinction, exclusion, or

restriction which has the effect or purpose of
impamng or nUllifying the recognition,
enjoyment, or exercise by women, irrespective
of their marital status on a basis of equality of
men and women, of human rights.

It includes any act or omission, including by

law; policy, administrative measure, or
practice, that directly or indirectly excludes or
restricts women in the recognition and
promotion of their rights and their access to
and enjoyment of opportunities, benefits, or
privileges.

Q: When is a measure or practice of

general application considered as
discrimination against women?

A: A measure or practice of general

application is discrimination against women if it
fails to provide for mechanisms to offset or Academics Committee
address sex or gender-based disadvantages Chairperson: Abraham D. Genuine II
or limitations of women, as a result of which
Vice-Chair for Academics: Jeannie A. Laurentino
women are denied or restricted in the
Vice-Chair for Admin & Finance: Aissa Celine H. Luna
recognition and protection of their rights and in
Vice-Chair for Layout & Design: Loise Rae G. Naval
their access to and enjoyment of opportunities,
benefits, or privileges; or women, more than
men, are shown to have suffered the greater Labor Law Committee
adverse effects of those measures or . Subject Head' Lester Jay Alan E. Flores II
practices. Assistant Subject Head' Domingo B. Diviva V

Note: Discrimination compounded by or Members:

intersecting with other grounds, status, or
Rene Francis P. Batalla
condition, such as ethnicity, age, poverty, or
religion shall be considered discrimination against
Diane Camilla R. Borja
women under this Act. Maria Kristina L. Dacayo-Garcia
Christian Nino A. Diaz
Q: What are special leave benefits for Angelo S. Diokno
women? Genesis R. Fulgencio
Jeanelle C. Lee
A: A woman Ee having rendered continuous Jemuel Paolo M. Lobo
aggregate employment service of at least 6 Andrew W. Montesa
months for the last 12 months shall be entitled Maria Maica Angel.ika Roman
to a specialleave benefit of 2 months with full
pay based on her gross monthly compensation
following surgery caused by gynecological
disorders. (Sec. 18)

256
 OVERVIEW OF THE
PHILIPPINE LABOR DISPUTE SETTLEMENT PROCEDURE

ARTICLE
217 of the
Labor Code
NLRC

: . (Commission Level)
MONEY CLAIMS
under
: Section 10 RA
: 8042 as •
: amended :
; ~ ~)

~
• Injunction J.
................
.
: Labor Stds
. ~
•
-"TI
•
:

L
:
Art. 129 of
LC r:I
~
Inter-Intra
Union
Disputes

.. -------- ..•
I Representation
I Issues ri --I

~------L2J
Labor Stds.
Art. 128 (b)
LC

Notices of Strike or •• I!I ••••••••

Lockout, other disputes for
preventive mediation

r----I
I
tb
Unresolved GrievanceS
other disputes by
Parties' agreement
L ___ 3

M •...•
~
UNIVERSITY OF SANTO TOMAS
._ 257
Pacu{tati tie lDerecno CiviC
 PHILIPPINE LABOR DISPUTE SETTLEMENT PROCEDURE

ARTICLE 217 of LABOR

the Labor Code ARBITER
(RAB)

Under Article 217 of the Labor Code as amended, Labor

Arbiters shall have original and exclusive jurisdiction to hear
and decide the following cases involving all workers, whether
agricultural or non-agricultural:
1.Unfair Labor Practices;
2.Tenrnination Disputes;
3.lf accompanied with a claim for reinstatement, those cases
that workers may file involving wages, rates of pay, hours of
work and other terms and conditions of employment;
4.Claims for actual, moral and exemplary and other forms of
damages arising out of ER-EE relations;
5.Cases arising from any violation Art. 264 of the Labor Code,
including questions involving the legality of strikes and
lockouts; and

1
6. Except claims for Employees Compensation, Social
Security, Medicare and maternity benefits, and all other claims
arising from EE-ER relations, including those of persons in the
domestic or household service, involving an amount
exceeding P5,OOO regardless of whether accompanied with a
claim for reinstatement.

This Article enumerates the cases falling under "original and SUPREME
exclusive" jurisdiction of labor arbiters. This gives the COURT
impression that none but a labor arbiter can hear and decide
the six categories of cases listed. But this is not really so. Any
or all of these cases can, by agreement of the parties, be
presented to and decided with finality by a voluntary arbitrator
or a panel of voluntary arbitrators (see Articles 261-262).
(AZUCENA, Everyone's Labor Code 2001)

NOTE:
RAB-Regional Arbitration Branches

National
Conciliation and
Mediation
Board

258
 UST GOLDEN NOTES 2010

MONEY CLAIMS
under
Section 10 RA 8042 ----+
as amended

R.A. 8042 Migrant Workers and Overseas

Filipinos Act of 1995 as amended by R.A.
10022.

Section 10 of RA 8042 added to the exclusive

jurisdiction of the labor arbiters money claims
of Overseas Filipino workers arising from
violations of their employment contract against
foreign employers through their local
recruitment aqency.

Section 7 (R.A. 10022). Section 10 of

Republic Act No. 8042, as amended, is hereby

1
amended to read as follows:
"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
SUPREME
of the complaint, the claims arising out of an
employer-employee relationship or by virtue of COURT
any law or contract involving Filipino workers
for overseas deployment including claims for
actual, moral, exemplary and other forms of
damage. Consistent with this mandate, the
NLRC shall endeavor to update and keep
abreast with the developments in the global
services industry ... n

NOTE:
RAB-Regional Arbitration Branches

UNIVERSITY OF SANTO TOMAS 'C~·~.259

PacuCtaa ae ([)erecfio Civi! .~.
 PHILIPPINE LABOR DISPUTE SETTLEMENT PROCEDURE

Unresolved Grievances, Other

disputes by parties' agreements

Arbitrator

Voluntary Arbitratioll Machinery

The voluntary arbitration machinery has authority over unresolved

grievances arising from the interpretation or implementation of collective
bargaining agreements and those arising from the interpretation or
enforcement of company personnel policies (Art. 261, p.o. 442 as
amended).

Unresolved grievances involving distortion of wages (Art. 124, P.O. 442)

and the productivity and incentives program under Section 4 (b) R.A.
6971. Other labor disputes, including those involving strikes may be
referred to voluntary arbitration by agreement of the parties.

ARTICLE 262. JURISDICTION OVER OTHER LABOR DISPUTES. The

Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement
of the parties. shall hear and decide all other labor disputes
including unfair labor practices and bargaining deadlocks.

Art. 262 of the Labor Code provides that upon agreement of the parties,
the Voluntary Arbitrator can hear and decide all other labor disputes, COURT
including termination disputes which ordinarily fall under the jurisdiction
of the Labor Arbiters under Art. 217 of the Labor Code. (Apalisok v. OF
RPN, GR No. 138094, May 29,2003, J. Carpio-Morales). APPEALS
Article 217 (c) should be read in conjunction with Article 261 of the Labor
Code which grants to voluntary arbitrators 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. It can thus be deduced that only disputes involving
the union and the company shall be referred to the grievance machinery
or voluntary arbitrators. (Maneja v. NLRC, G.R. No. 124013 June 5,
199B).

InSan Miguel Corp. v. NLRC, G.R. No. 108001, March 15, 1996,
Termination disputes do not necessarily involve enforcement or
interpretation of personnel policies because they are broad and long-
term statements. As a rule, therefore termination disputes should be
lodged with a Labor arbiter. But the case may be brought to voluntary
arbitration if the parties, by virtue of Art. 262, state in unequivocal
language that they agree to submit the termination dispute to voluntary
arbitration. Even a ULP case can, by agreement of the parties, be
brought before voluntary arbitration. (Azucena, Everyone's Labor Code,
2001)

A Voluntary Arbitrator is a quasi-judicial instrumentality; hence, a petition

for certiorari under Rule 65 of the Rules of Court will lie where a grave
abuse of discretion or an act without or in excess of jurisdiction of the
voluntary arbitrator is shown. The petition may be filed with the Court of
Appeals.

Conciliation
NCMB
and
The NCMB cannot adjudicate but the it can recommend to the parties
that the dispute be submitted to voluntary arbitration because the policy
statement of the law is voluntary means of dispute settlement

260 ~eam:_
 UST GOLDEN NOTES 2010

Labor Standards
Art. 128 (b) LC

Regional
Office

Article 128 (b): Enforcement of Labor Standards Laws

1
Art, 128 (b) of the Labor Code allows the Secretary of Labor
and employment, usually through an authorized
representative, to inspect places of employment and, if SUPREME
necessary, issue compliance orders and writs of execution
to enforce "labor standards provisions" of the "labor laws". COURT
Orders issued under Art. 128 (b) by representatives of the
Secretary of Labor and Employment may be appealed to the
Secretary of Labor and Employment himself. Decisions of
the Secretary of Labor and Employment may then be
brought before the CA and thereafter, to the SC.

The authority of the DOLE Secretary under Art. 128 may be

exercised regardless of the monetary value involved. The
Secretary of Labor and employment may even order the
stoppage of work or suspension of operations of the
inspected establishment or parts of it. If the employer is at
fault, he may be ordered to pay the employees' wages
during the work stoppage or suspension of operations. The
requirement of due process must be observed.

In Aboitiz Shipping Corp. v. De la Serna (GR No. 88538,

April 25, 1990), it was held that a Regional Director of Dole
has the power to order rectification of Labor Standards
violation even if such violation is not mentioned in the
employee's complaint.

UNIVERSITY OF SANTO TOMAS' ~~ 261

Pacu{taa ae (/)erecFio CiviC '.
 PHILIPPINE LABOR DISPUTE SETTLEMENT PROCEDURE

Labor Standards
Art. 129 of LC

Article 129 of the LC: Recovery of Wages, Simple

Money claims and Benefits

The Regional Director's authority under Art. 129 is

subject to four requisites namely:
1.The claim is presented by an employee or by person
employed in domestic or household service or a house
helper.
2.The claim arises from ER-EE relations.
3. The claimant does not seek reinstatement.
4.The aggregate money claim of each employee or
house helper does not exceed P5000.

If there is a claim for reinstatement or if the claimant's

demand exceeds 'P5,OOO, the labor arbiter has
jurisdiction over the case pursuant to Art. 217 (6),
except claims for employees' compensation, social
security, Medicare, Phil health and maternity benefits.
Even as regards labor arbiter, however, Er-Ee relation
is a pre-requisite as basis of the claim.

A decision rendered under this article, being

adjudicatory, is appealable to the NLRC. (AZUCENA)

Note:
Under Art. 129 of the LC, the Regional Director or a
hearing officer of the DOLE hear and decide disputes
involving the recovery of wages for as long the
aggregate claim does not exceed P5000 and
reinstatement is not sought. Designed to expedite
enforcement of "simple money claims", hearings are
summary in nature and decisions may be appealed to
the Commission -level of the NLRC. SUPREME
COURT

262
 UST GOLDEN NOTES 2010

Section 5 (Rule XI, DO 40-03)

Inter-Intra Union Disputes
Where to file:

Generally, Intra-Inter Union disputes are heard in

Complaints or petitions involving:
administrative proceedings by the regional offices
or the BLR, depending on the labor organization 1. Labor unions with independent registrations, chartered
concerned. DO No. 40-03 provides that inter-intra locals workers associations, its officers or members
union disputes are resolve by Med-Arbiters in the
shall be filed with the Regional Office that issued its
regional offices with the exception of petitions for
certificate of registration or certificate of creation of
cancellation of registration of labor organizati~ns chartered local.
and petitions for deregistration of CBA's which are
resolved by the appropriate Regional Director or
2. Federations, national unions, industry unions, its
her appointed hearing officer.
officers or member organizations shall be filed with the
Bureau.
The decisions of the Med-Arbiter and the Regional
Director may be appealed to the BLR. The
Petitions for cancellation of registration of labor unions
decisions of the Bureau Director in the exercise of
with independent registrations, chartered locals, worker's
her original jurisdiction may be appealed to the
associations and petitions for deregistration of collective
Office of the Secretary.
bargaining agreements shall be resolved by the Regional
Director. He/she may appoint a Hearing Officer from the
Note:
Labor Relations Division.
The rules allow one motion for reconsideration and
thereafter, the decision of the Bureau Director or
Other Inter-Intra union and related labor relations
the Secretary of Labor and Employment will be final
disputes shall be heard and resolved by the Med-Arbiter
and executory, but this is without prejudice to a
in the Regional Office.
petition for certiorari (Rule 65) witb the CA.
Complaints or petitions involving federations, national
Decisions of the CA may thereafter be brought to
unions, industry unions, trade union centers and their
the SC by petition for review on certiorari (Rule 45).
chartered local, affiliates or member organizations shall
be filed with the Regional Office or the Bureau. The
complaint or petition shall be heard and resolved by the
Bureau.

When two or more petitions involving the same parties

and the same causes of action are filed, the same shall
be automatically consolidated.
Inter-Intra Union
Disputes

SUPREME
COURT

Office
BLR
of the Secretary
Director

UNiVERSITY OF SANTO TOMAS

Pacu{taa,ae c])ereclio Ci'Vi{
 PHILIPPINE LABOR DISPUTE SETTLEMENT PROCEDURE

Settlement of Representation Issues Under Art. 256 of the Labor

Code

Representation Issues are heard and resolved by Med-Arbiter of the

appropriate regional office. The decisions of the Med-Arbiters may be
appealed to the Secretary of labor and employment (see Art. 259)
whose decisions in turn may be questioned before CA (Rule 65) and
thereafter the dispute may be brought by any party to the SC (Rule
45).

Note:
An instance which cannot be appealed is Section 17, Rule VIII of Dept. Order No. 40-
03 (2003) on certification elections which provides that the order granting the conduct
of a certification election in an unorganized establishments shall not be subject to
appeal. Any issue arising therefrom may be raised by means of protest on the conduct
and results of the certification election. .

SUPREME
Representati on COURT
Issues
 UST GOLDEN NOTES 2010

National Conciliation and Mediation Board (NCMB) involving

notices of strike or lockout arising from collective
bargaining deadlocks or allegations of unfair labor
practices. SUPREME
The NCMB is a dispute-resolution arm under the administrative COURT
supervision of the Secretary of Labor and Employment. Its main
task is to help settle labor disputes to prevent actual work
stoppages (Azucena, Everyone's Labor Code, 2001).

After the receipt of Notice of strike/lockout, the NCMB conciliator-

mediators call the parties to conciliation conferences. They are
not judges and therefore th~y cannot re",~er ver~icts.

They can also urge submission of the dispute to preventive

mediation or arbitration. Under either proceedings a strike or
lockout is withheld.

If there is no agreement, the Secretary of Labor and Employment

may intervene at any stage.

The Secretary of Labor and Employment may exercise his

authority under Article 263 (g) of the Labor Code to assume
jurisdiction over the labor dispute or to certify the same to the
Commission for compulsory arbitration when in his opinion,
there exist a labor dispute causing or likely to cause a
strike/lockout in an industry indispensable to national
interest. (See Art. 263 (g) of the Labor Code)

A notice of strike or lockout, upon agreement of parties, may be

referred to alternative modes of dispute resolution, including
voluntary arbitration. (See Section 9, Rule XXII, DO 40-03).

•
Not all notices of strikes or lockouts are assumed / certified by
•
the Secretary of Labor and Employment.
•
Art. 263 (g)
There are cases which are initially subject of Notice of strike or
lockout but are referred to NLRC for compulsory arbitration, like
•
for instance ULP complaints.
•
Disputes initially subject of a notice of strike or lockout may be •
brought under Art. 217 of the Labor Code.

Note:
Under Art. 263 (g), disputes certified by the Secretary of Labor
and Employment under her authority to assume jurisdiction are
brought directly to the NLRC (Commission-Level). Secretary

Notices of Strike or
Lockout, other dispute
for preventive
mediation

UNIVERSITY OF SANTO
tf'acu{taa
TOMAS
de CDereclio CiviC
~i~
265
 PHILIPPINE LABOR DISPUTE SETTLEMENT PROCEDURE

Article 218(e) of the Labor Code INJUNCTION

INJUNCTION
Petitions for injunction are initially brought to and decided at the
commission level.

Rule X, Sections 1 and 2 of the 2005 Revised Rules of the NLRC,

providesthat:

Injunction in Ordinary Labor Disputes. - A preliminary injunction

or 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, when it is established on the
basis of the sworn allegations in the petition that the acts i NLRC
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.

Injunction in Strikes or Lockouts. - A preliminary or permanent

injunction may be granted by the Commission only after hearing
the testimony of witnesses and with opportunity for cross-
examination in support of the allegations of the complaint or
petition made under oath, and testimony by way of opposition
thereto if offered. and only after a finding of fact by the
Commission:

a) 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.

b) That SUbstantial and irreparable injury to

petitioner's property will follow;

c) That as tc. each item of relief to be granted, greater

injury will be inflicted upon the petitioner by the
denial of relief than will be inflicted upon
respondents by the granting of relief;

d) That petitioner has no adequate remedy at law;

and
SUPREME
e) That the public officers charged with the duty to
protect petitioner's property are unable or unwilling
COURT
to furnish adequate protection.

266
 UST GOLDEN NOTES 2010

Criminal Action for Illegal Recruitment

(Section 5, R.A. No. 10022)

Prosecutor's
CA SC
Office
Any Adverse decision of Adverse decision of Decision of the CA
Filing of Complaint- the Prosecutor may be the _Secretary of may be appealed to
Affidavit with appealed to the Justice may be the Supreme Court
Prosecutor's Office Secretary of Justice appealed to the CA by petition for
(To Conduct by petition for revi ew on certi orari
Preliminary
(DOJ), ,) , certiorari under Rule under Rule 45.
Investigation) 65.

CA sc
If the Resolution of the Finding of conviction by the Finding of conviction by
Prosecutor finding RTC may be elevated to the the RTC may be elevated
probable cause for CA by Ordinary Appeal or to the SC by petition for
prosecution of illegal by writ of error under Rule review on certiorari under
recruitment is not 41. Rule 45,
elevated for review with
the Secretary of Justice, The case may also be The case may also be
the Prosecutor will file elevated to the CA by elevated to the SC by
the information with the petition for certiorari petition for certiorari
under Rule 65 if proper
Regional Trial Court under Rule 65 if
grounds for it exists.
proper grounds for it
for trial.
exists

Section 9 ofR.A. No. 8042

Section 5 of R.A. No. 10022
VENUE:
Who can file an action for Illegal Recruitment? A criminal action arising from illegal
recruitment as defined herein shall be filed
In the filing of cases for illegal recruitment or any of the prohibited with the Regional Trial Court of:
acts under this section, the Secretary of Labor and Employment,
the POE A Administrator or their duly authorized 1.The province or city where the offense
representatives, or any aggrieved person may initiate the was committed ;or
corresponding criminal action with the appropriate office.
2. Where the offended party actually
For this purpose, the affidavits and testimonies of operatives or resides at the same time of the
personnel from the Department of Labor and Employment, POEA commission of the offense.
and other law enforcement agencies who witnessed the acts
constituting the offense shall be sufficient to prosecute the accused.
Provided: The court where the criminal
In the prosecution of offenses punishable under this section, the action is first filed shall acquire jurisdiction
public prosecutors of the Department of Justice shall collaborate to the exclusion of other courts.
with the anti-illegal recruitment branch of the POEA and, in certain
cases, allow the POEA lawyers to take the lead in the prosecution. Provided further, that the aforestated
The POEA lawyers who act as prosecutors in such cases shall be provisions shall also apply to those
entitled to receive additional allowances as may be determined by criminal actions that have already been
the POEA Administrator. filed in court at the time of the effectivity of
this Act.
The filing of an offense punishable under this Act shall be without
prejudice to the filing of cases punishable under other existing laws,
rules or regulations."

UNIVERSITY OF SANTO TOMAS

Pacu{taa de CDereclio Cioi!