VLC Pbr2021 Crit - Areas BNB Labor Dean Anna Maria D. Abad

7/26/2021
PRE - BAR REVIEW - SYNCHRONOUS SPECIAL LECTURES

Critical Areas in Labor Law
Dean Anna Maria D. Abad
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2021 U.P. LABOR LAW

BAR REVIEW
THE BARE ESSENTIALS.
INCLUDING QUESTIONS FROM 2011-2019 BAR
DEAN ADA D. ABAD

Adamson University College of Law
WARNING: No part of this presentation may be copied, reproduced or transmitted in any form or by any means, electronic or mechanical, without prior written permission from the Villasis Law Center. Villasis Law Center operates a zero tolerance
policy in relation to inappropriate behavior of students. Violators shall be subject to prosecution under the law. All rights reserved by Villasis Law Center.
DEAN ADA ABAD 2021 VILLASIS BAR REVIEW

CRITICAL AREAS IN LABOR LAW

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WHAT WOULD
THE LEONEN
BAR BE LIKE?
Hashtag:
#BestBarEver
2020-2021
DEAN ADA ABAD 2021 VILLASIS BAR REVIEW 2

DEAN ADA ABAD 2021 VILLASIS BAR

REVIEW CRITICAL AREAS IN LABOR
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• Supreme Court Bar Bulletins

• Ada’s notes on Justice Marvic Leonen’s
speech at the Philippine Association of
Law Schools (PALS) Convention, 25
November 2020 at 2:30 pm
• Ada’s notes on Justice Marvic Leonen’s
lecture at the Ateneo de Manila Law
Alumni Association J Bernas lecture
series, 01 July 2021 at 2pm


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OVER-RIDING THEME OF THE

ENTIRE BAR EXAMINATIONS 2021
•EQUITY
•INCLUSIVITY


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THE BAR EXAMINATION IS THE

QUALIFYING LEVEL, WHERE THE
EXAMINEE IS TESTED ON BASIC
COMPETENCE AND KNOWLEDGE
OF KEY LEGAL TEXTS AND
CANONICAL DOCTRINES.


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1. QUESTIONS WILL BE
“TEXTUAL AND CANONICAL”
• Only text of the law, plus basic
principles and canons which are
consistently upheld by the Court
• Interpretation of the law
• Areas of strong dissent will not be
preferred


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The 2021 Bar will NOT focus on

RATIO DECIDENDI of a particular
case, e.g, the rule of law on
which a judicial decision is based


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The 2021 Bar will focus on

canonical doctrine:
Doctrine: a well-settled principle of law,
interpretation of the law, definition or procedure
Canonical: when the principle of

law/definition/procedure is often repeated
unanimously over time e.g., several generations
of Courts.


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2. IDENTIFICATION OF LEGAL
ISSUES
• Will require analysis of the given

facts and assess its relevance to
the question that you need to
answer


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3. THREE BAR EXAMINERS

PER SUBJECT
• Approximately 10,000 to 12,000
examinees (2020, 2021 and repeaters)
• Examiners shall also grade the Bar
Examinations digitally, and hence,
need not be based in NCR.


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4. CUT-OFF PERIODS FOR

THE 2021 BAR EXAMS:
• Supreme Court decisions until
30 September 2020
• Laws, rules and issuances until

30 June 2019


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5. DIGITAL BUT NOT REMOTE

• Applications and payments online
• “Examinees will still walk into testing rooms

and will be proctored while taking the exams.
Surveillance cameras will also be installed in
all testing rooms.”


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Examinees will be assigned in testing

centers in a locality closest to their
residence or the school they graduated
from, or for any other consideration. This
determination shall depend on the final
list of schools that would qualify as local
testing sites


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• Bar takers shall bring their own WiFi-enabled

laptops that run on Mac or Windows operating
systems for the exams.
• No other digital device will be allowed inside

the testing sites except their laptops.
• On the examination days, the computer

hardware shall be thoroughly checked by Court
personnel.  LONG LINES at entrance!


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• Examinees are advised not to store any file

in their laptops that has a reasonable
connection with the substance and
procedure of the examinations.
• Examinees are advised to start organizing

their digital filing system so that they may
offload their law-related files into an external
disk or other devices before taking the Bar
Examinations


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The traditional mode of handwritten exams

will still be allowed, but “only in very
exceptional cases where it can be
adequately proven that the examinee
suffers from a physical disability that does
not permit them to take the examinations
through a computer.”


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6. “LOCALIZED AND PROCTORED

SETTING”
• Mock Bar: NCR, North

Luzon, Cebu and Davao
• Additional local venues – not
yet announced


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7. COVID-19 PROTOCOLS IN PLACE

• Proper hygiene protocols will be observed during
the Bar Examinations, which will include COVID-19
testing and proper physical distancing inside the
testing rooms.
• The Court will explore arrangements for a

predominantly Saliva RT-PCR testing modality in
each of the testing sites.


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8. NO RANKING OF BAR EXAMINEES

BUT OF LAW SCHOOLS
• No bar topnotcher; no top-ten list
BUT will be categorized “with
distinction”
• Law school ranking according to
number of students taking the bar,
viz: less than 50; 50-99; 100 and
above


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9. BAR EXAMINATION DATES

Day 1 (November 7):
Political and International Law, and Labor Law and Social
Legislation
Day 2 (November 14):
Civil Law and Taxation Law
Commercial Law and Criminal Law
Remedial Law and Legal and Judicial Ethics & Practical
Exercises


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The exam periods will be:

FIRST SUBJECT: 8:00 a.m. to 12:00
SECOND SUBJECT: 2:00 p.m. to 6:00 p.m.


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Let me be clear about this, your

task is not to hope or seek a
better world – it is more than
that. Your purpose as a lawyer is
to use your life to shape law so
that it authentically contributes
to the achievement of the best
society for every human being.
-- Justice Marvic M.V.F. Leonen

Speech on the oath taking ceremony of
19 bar passers


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SOME STATISTICAL DATA

FROM LAST FOUR BAR
EXAMINATIONS


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Dean Anna Maria D. Abad 2019 LABOR LAW
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BAR EXAMS (J. ESTELA PERLAS-

BERNABE)
100% ESSAY of 100 pts total
20 PROBLEMS WITH
43 QUESTIONS
SPREAD OVER FOUR HOURS
APPROXIMATELY 5.5 MINUTES TO

ANSWER EACH QUESTION


NATURE OF QUESTIONS:
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• 16 objective questions, on definitions,

explanations or distinctions
• For essay type questions, some had
objective, lead-up question on the
problem followed by question on
application


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LABOR STANDARDS:
• CONTROL TEST DEFINITION

• HOLIDAY PAY, LESS THAN 10 EMPLOYEES
• LABOR-ONLY CONTRACTING
• DEFINITION OF WAGE DISTORTION AND
APPLICATION
• COMPULSORY VS. VOLUNTARY/OPTIONAL
RETIREMENT


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WELFARE AND SOCIAL LEGISLATION

• SSS BENEFITS
• KASAMBAHAY, ON SERVICE INCENTIVE
LEAVE
• MIGRANT WORKERS’ CLAIMS; REDUCTION
OF SALARY AND LIABILITY OF RECRUITMENT
AGENCY
• THIRD DOCTOR CONFLICT RESOLUTION;
COMPENSABILITY OF DISEASE AND FAILURE
TO GO TO DOCTOR WITHIN 3 DAYS


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LABOR RELATIONS
• DISTINCTIONS: JUST VS. AUTHORIZED CAUSE
SEASONAL VS. PROJECT
BONA FIDE OCCUPATIONAL QUALIFICATION
RESIGNATION VS. CONSTRUCTIVE
DISMISSAL
• CBA RENEGOTIATIONS; ECONOMIC VS.
REPRESENTATION ISSUE AND THE FREEDOM
PERIOD
• PROBATIONARY VS. FIXED TERM VS REGULAR
• ULP; CRITICAL POINT OF ANALYSIS


JURISDICTION AND REMEDIES

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• GRIEVANCE MACHINERY; DISTINCTION

• REINSTATEMENT WITH FULL BACKWAGES AND
SEPARATION PAY; PERIOD TO APPEAL
• PRESCRIPTIVE PERIOD: MONETARY CLAIMS
ILLEGAL DISMISSAL; OFFENSES IN LABOR
CODE; ILLEGAL RECRUITMENT
• POWERS AND RESPONSIBILITIES OF:
SECRETARY OF LABOR; BUREAU OF LABOR
RELATIONS; VOLUNTARY ARBITRATOR
• CORPORATE OFFICER; JURISDICTION
• PAYROLL REINSTATEMENT


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2018 LABOR LAW

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BAR EXAMS (DEL CASTILLO)

20 PROBLEMS WITH
40 QUESTIONS
APPROXIMATELY 6 MINUTES
TO ANSWER EACH QUESTION


NATURE OF QUESTIONS:
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• Case-based; straight to the point

• -- either you know it or you don’t.
• Some questions may have alternative
answers, because of the way it was
formulated
• Uniformly 2.5% each question; good
coverage of exam


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LABOR STANDARDS:
• DEDUCTION OF FACILITIES
• COMPUTATION OF HOLIDAY PAY
• WHETHER OR NOT PRODUCTIVITY ALLOWANCE IS
PART OF 13TH MONTH PAY COMPUTATION
• MAY EMPLOYEE OF ALLEGED INDEP CONTRACTOR
FILE REGULARIZATION WITH THE PRINCIPAL
• WAGE INCREASE NON-PAYMENT; ALTERNATIVE
MODES OF DISPUTE RESOLUTION


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WELFARE AND SOCIAL LEGISLATION

• RETIREMENT OF PART-TIME EMPLOYEES;
COMPUTATION
• RETIREMENT PLUS SEPARATION PAY
(GOODYEAR VS ANGUS)
• GSIS BENEFITS OF AFP/PNP;
COMPENSABILITY; LEGITIMATE VS LIVE-IN
PARTNER; MINOR CHILDREN’S ENTITLEMENT
TO SUPPORT WHEN ONLY PARTIAL BEING
GIVEN BY PARENT


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• KASAMBAHAY; LIVE-IN DRIVERS

• MATERNITY AND PATERNITY LEAVE
BENEFITS
• SEXUAL HARASSMENT
• MIGRANT WORKERS’ NATURE OF
ENGAGEMENT; COMPENSABILITY OF
DISABILITY CLAIMS FOR
HYPERTENSION AND DIABETES


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LABOR RELATIONS
• SELF-ORGANIZATION; CHARTER CERTIFICATE
VESTS LEGAL PERSONALITY FOR PURPOSES OF
FILING PETN FOR CE; EMPLOYER NOT A BYSTANDER
IN CANCELLATION PROCEEDINGS
• CERTIFICATION ELECTION; SEALED ENVELOPES
• SUPERVISORY EMPLOYEES
• UNION SECURITY CLAUSES
• MANAGEMENT PREROG ON TRANSFER


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• UNION SECURITY CLAUSES VS

PURCHASER IN CORPORATE TAKE-OVER
• UNFAIR LABOR PRACTICES
• ASSUMPTION OF JURISDICTION BY
SECRETARY; RTW ORDER; VIOLENCE IN
CONDUCT OF STRIKE; READMISSION VIA
PAYROLL REINSTATEMENT
• TERMINATION OF EMPLOYMENT


JURISDICTION AND REMEDIES

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• NLRC JURISDICTION ON MONETARY CLAIMS

AND PRESCRIPTIVE PERIOD
• EMPLOYER’S ROLE IN CERTIF ELECTION AND
CANCELLATION OF UNION REGISTRATION
• GRIEVANCE MACHINERY AND ALTERNATIVE
MODES OF DISPUTE RESOLUTION
• MOTION FOR EXECUTION DURING APPEAL;
ILLEGAL TERMINATION CASES


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2017 LABOR LAW

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BAR EXAMS (BERSAMIN)

15 PROBLEMS WITH
32 QUESTIONS
APPROXIMATELY 7.5 MINUTES



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GENERAL PRINCIPLES:
FOUR (4) QUESTIONS
•ER-EE RELN;
•JEEPNEY ON BOUNDARY SYSTEM;
• INTERPRETATION OF LABOR LAWS
IN EVIDENCE ON TERMINATION;
•RESIDENT ALIEN;
•LA SALLE DOCTORS CASE


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LABOR STANDARDS:
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SEVEN (7) QUESTIONS
•WAGE ORDER;
•PETN FOR WAGE INCREASES EXCEPTION
ON 12-MONTH RULE
•MEAL BREAK
•LEARNERSHIP VS. APPRENTICESHIP
•HOUSEHELPER VS HOMEWORKER
•SALARIES EXEMPT FROM GARNISHMT
•LABOR-ONLY CONTRACTING


LABOR RELATIONS:
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TEN (10) QUESTIONS
•MGMT PREROG ON STIPULATION AGST

MARRIAGE;
•CLASSIFICATION ON RANKING (MGR
SUPERV/R&F)
•CONFIDENTIAL EMPLOYEES
•GROUNDS FOR TERMINATION
•DUE PROCESS IN TERMINATION


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• MODES IN DETERMINING
EXCLUSIVE BARG AGENT
• DISEASE AS A GROUND FOR
TERMINATION
• STRIKE
• SYMPATHETIC STRIKE
• RETRENCHMENT PAY


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JURISDICTION:
FOUR (4) QUESTIONS
•JURISDICTION OF VOLUNTARY ARBITRATOR/PANEL

•REMEDIES IN CASE OF APPEAL OF ILLEGAL DISMISSAL
CASE (PAYMENT OF SALARY DURING APPEAL)
•ASSUMPTION OF JURISDICTION BY SECRETARY OF
LABOR, AND EFFECT OF DEFIANCE OF RTW ORDER
•TERMINATION OF COMPANY OFFICIAL VS INTRA-
CORPORATE DISPUTE


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MIGRANT WORKERS:
THREE (3) QUESTIONS
•LIABILITY OF AGENT WITH

PRINCIPAL
•DIRECT HIRING EXCEPTIONS
•NATURE OF CONTRACT


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2016 LABOR LAW

BAR EXAMS (VELASCO)
20 PROBLEMS WITH
30 QUESTIONS
APPROXIMATELY 8 MINUTES TO
ANSWER EACH QUESTION


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90% OF THE QUESTIONS WERE

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ON LABOR RELATIONS; WITH

MULTIPLE PROBLEMS ON:
• EMPLOYER-EMPLOYEE
RELATIONSHIP
• CLASSIFICATION OF
EMPLOYMENT; AND
• TERMINATION (8)


STATISTICS ACCORDING TO NUMBER AND NATURE OF QUESTIONS
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Labor Labor Relations OFW/ Jurisdiction
Standards compen- Remedies
sability
Apprenticeship Ee classifc (2) SSS claim Regional Director
vs learnership
Er-Ee reln (2) Bargaining Quitclaim
Representative
Indep contracting Certification election Perfection of
Vs Labor only appeal
Strike (ULP) Piercing veil of
corporate fiction
Termination (7) Attys fees.
 due process
 Union security clause
Termination of
pregnant woman DEAN ADA ABAD 2021 VILLASIS BAR REVIEW 52


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2015 LABOR LAW

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BAR EXAMS (de CASTRO)

22 PROBLEMS WITH
32 QUESTIONS
APPROXIMATELY 7.5 MINUTES



STATISTICS ACCORDING TO NUMBER AND NATURE OF QUESTIONS
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Labor Labor Relations OFW/ compen- Jurisdiction
Standards sability
Wages (2) Mgmt prerog (3) OFW compen- RTC vs labor (1)
Bonus (1) Ee classifc (1) sability (1) Intra-corp
controversy (1)
Minors (1) Prev suspension Police off-duty (1) Injunction (1)
(1)
Indep Cont/Er-Ee Termination (2) Corporate liability
reln (2) of officer (1)
Successor- principle
(1)
Strike (2)
Self-org (3)
CBA (2)
Equity of incumbent

(1) CRITICAL AREAS IN LABOR LAW

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IN THE TRADITIONAL
BAR EXAMINATION:


ASSUMING FORTY (40)

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QUESTIONS SPREAD OVER

FOUR HOURS:
SIX (6) MINUTES

TO ANSWER EACH
QUESTION


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ASSUMING THIRTY (30)

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QUESTIONS SPREAD OVER

FOUR HOURS:
EIGHT (8) MINUTES

TO ANSWER EACH
QUESTION


ASSUMING 12,000 WILL TAKE THE

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BAR, 3 EXAMINERS WITH FOUR (4)

MONTHS TO CHECK:
PER EXAMINER: 4,000

BOOKLETS AT 4 MONTHS
= 12 MINUTES PER BOOKLET
(8HRS/DAY OF CHECKING)


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BUT THIS IS
THE BEST BAR EVER!!!
DIGITAL, ON-LINE,
LOCALIZED, PROCTORED


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SAMPLE EXAM QUESTION: #BESTBAREVER2020-2021
AFTER DUE DEMAND, X CORPORATION FILED AN

ACTION WITH THE REGIONAL TRIAL COURT OF MANILA
TO RECOVER PAYMENT FROM A CONTRACT OF LOAN
AGAINST Y. THE COMPLAINT ONLY ASKS FOR A
PAYMENT IN THE AMOUNT OF TWENTY THOUSAND
PESOS (P20,000.00).
MAY Y SUCCEED IN HAVING THE CASE DISMISSED ON

THE GROUND OF LACK OF JURISDICTION? EXPLAIN
BRIEFLY.


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SAMPLE ANSWER:
YES, GIVEN THE FACTS OF THE CASE,

BATAS PAMBANSA BLG 129 AS AMENDED
BY REPUBLIC ACT NO. 7691 REQUIRES THAT
CASES INVOLVING COLLECTION OF DEBT
AMOUNTING TO P20,000.00 BE FILED WITH
THE METROPOLITAN TRIAL COURT OF
MANILA.


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KEEP
IT
SHORT
SIMPLE
STRAIGHT TO THE POINT


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KEY WORDS AND

KEY PHRASES


USUAL TOPICS FOR LABOR

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STANDARDS:
WAGES (2019, 2018, 2017, 2015,

2014, 2013)
BONUS (2015, 2014)
MINORS (2015, 2014, 2012)


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INDEP CONTRACTING VS. LABOR-ONLY CONTRACTING

(2019, 2018, 2017, 2016, 2015, 2014, 2013, 2012)
MANAGEMENT PREROGATIVE
(2018, 2017, 2015, 2014, 2012)
EMPLOYMENT CLASSIFICATION
(2019, 2018, 2017, 2016, 2015, 2014, 2013)
TERMINATION (2019, 2018, 2017, 2016, 2015, 2014, 2013,

2012)


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USUAL TOPICS FOR LABOR

RELATIONS:
STRIKES (2019, 2018, 2017, 2016,

2015, 2014, 2013, 2012)
ASSUMPTION (2018, 2017, 2014,
2012)


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RIGHT TO SELF-ORGANIZATION
(2018, 2015, 2014, 2013, 2012)
CBA (2015, 2014, 2012)

on freedom period only - 2019
CERTIFICATION ELECTION
(2018, 2016, 2014, 2013)


OTHER TOPICS:
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COMPENSABILITY OF OFW DEATH

OR INJURY (2019, 2018, 2017, 2015, 2014)
JURISDICTION OF RTC VS LABOR (2019, 2017,

2016, 2015, 2014)
INTRA-CORPORATE CONTROVERSY (2019,

2017, 2015, 2014)


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WHEN FACED WITH A PROBLEM
SOLVING ESSAY-TYPE
QUESTION IN THE BAR
EXAMINATIONS, REMEMBER:
• ALL relevant facts already

given, but some facts may be
immaterial.
• The intention of the examiner
here is to see if you can
determine which facts are
relevant or not, in answering
the question.


• Do NOT add to the facts at hand, except

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if it is an open-ended question.
• Most questions require you to decide as

follows –
Comment on the action of one party
Decide if you were the Labor Arbiter
Comment on the decision of the Labor
Arbiter (or Court)


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How to answer bar question:
“IF YOU WERE THE LABOR

ARBITER, HOW WOULD YOUR
DECIDE?”


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GENERAL
PRINCIPLES IN
LABOR LAW


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1. Constitutional and statutory

basis of labor law and social
legislation
2. Declaration of policy and

paradigm shift towards mutual
cooperation


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FOR BASIC FRAMEWORK OF LABOR LAW, MEMORIZE

ARTICLE 3, LABOR CODE: DECLARATION OF POLICY
Mnemonic: PFE-SC-SJ
ART. 3. Declaration of basic policy. - The State shall afford
Protection to labor, promote Full employment, ensure
Equal work opportunities regardless of sex, race or creed
and regulate the relations between workers and employers.
The State shall assure the rights of workers to Self-
organization, Collective bargaining, Security of
tenure, and Just and humane conditions of
work.


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GENERAL RULE #1:

EXISTENCE OF AN EMPLOYER-
EMPLOYEE RELATIONSHIP IS
CONDITION SINE QUA NON
FOR THE APPLICATION OF
LABOR LAWS


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GENERAL RULE#2
PRINCIPLE OF INCORPORATION
the minimum labor standards and benefits in
Labor Code are considered inherent in every
employer-employee relationship even absent a
written employment contract


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GENERAL RULE #3:
Burden of proof is
always upon
employer to show
validity of its exercise of
management prerogatives,
especially as regards
termination of employment.


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GENERAL RULE #4:
Only SUBSTANTIAL
EVIDENCE required.


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GENERAL RULE #5
NO RETROACTIVE EFFECT OF
LABOR LAWS
EXCEPTION:
WHEN EXPLICITLY SO PROVIDED


GENERAL RULE #6:
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IN CASE OF DOUBT, INTERPRET IN

FAVOR OF LABOR


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SPECIFIC ISSUES ON
GENERAL PRINCIPLES:
FEARLESS FORECASTS


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VS
MANAGEMENT LABOR
• CAPITAL • WORK
• PROFIT • EQUITABLE SHARE IN
THE PROFITS
• Management • Workers’ rights
prerogatives Minimum standards;
Hiring, employee constitutional rights to security
classification, work of tenure, unionization,
methods, rules and collective bargaining and to
regulations strike
STATE
police power/social justice
WARNING: No part of this presentation may be copied, reproduced or transmitted in any form interpretation in favor
or by any means, electronic or mechanical, ofwritten
without prior laborpermission from the Villasis Law Center. Villasis Law Center operates a zero tolerance


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In balancing the interest between labor and

capital, the prudent recourse in termination
cases is to safeguard the prized security of
tenure of employees and to require employers to
present the best evidence obtainable, especially
so because in most cases, the documents or
proof needed to resolve the validity of the
termination, are in the possession of employers.
(American Power Conversion Corp et. al. vs. Jason Yu Lim, G.R. No.
214291. 11 January 2018.)


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Principles of Social Justice,

Equity and Police Power:
• The tension of opposites, and

balancing of interests in case
workers’ and management’s
rights collide


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GENERAL RULE #1:

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EXISTENCE OF AN
EMPLOYER-EMPLOYEE
RELATIONSHIP FOR THE
APPLICATION OF LABOR
LAWS


PRINCIPLE OF
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INCORPORATION
the minimum labor standards and
benefits in Labor Code are
considered inherent in every
employer-employee relationship even
absent a written employment contract


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HOW DO YOU KNOW IF THE PERSON IS

YOUR EMPLOYEE?
APPLICATION OF FOUR-FOLD TEST TO

DETERMINE EXISTENCE OF AN EMPLOYER-
EMPLOYEE RELATIONSHIP
ELECTION AND HIRING
AGES
ISMISSAL


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ONTROL TEST
• IS THE MOST IMPORTANT TEST TO DETERMINE
EXISTENCE OF EMPLOYMENT RELATIONSHIP
• an employer-employee relationship is deemed to

exist “where the employer has a right to CONTROL
the conduct of the employee in relation to his work.”


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MEMORIZE THIS!!!
An employer-employee relationship is said
to exist where the person for whom the
services are performed RESERVES THE
RIGHT TO CONTROL NOT ONLY THE END
TO BE ACHIEVED BUT ALSO THE MANNER
AND MEANS UTILIZED TO ACHIEVE THE
SAME. (J. LEONEN: Paragele v. GMA Network, Inc.,
G.R. No. 235315, [July 13, 2020])


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J. LEONEN: Paragele v. GMA Network, Inc., G.R. No. 235315, [July

13, 2020]
Complaint for regularization, which was subsequently converted

into one for "illegal dismissal, non-payment of salary/wages, and
regularization” filed by 30 camera men, against respondent GMA
Network, Inc., with work service ranging from two (2) years to
thirteen (13) years.
Case for GMA: No employer-employee relationship. Camera men

were engaged as mere "pinch-hitters or relievers" whose services
were engaged only when there was a need for substitute or
additional workforce.


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CASE FOR PETITIONERS:
As camera operators, petitioners performed functions that

were necessary and desirable to GMA's usual business as a
television and broadcasting company.
They emphasize that their continuous employment with GMA,

despite the end of shooting and recording for each television
program to which they were assigned, further demonstrates
the necessity and desirability of the functions they were
performing. Accordingly, they were regular employees.
DEAN ADA ABAD 2021 VILLASIS BAR REVIEW DEAN ADA ABAD 2021 VILLASIS BAR REVIEW 97
CRITICAL AREAS IN LABOR LAW CRITICAL AREAS IN LABOR LAW

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Labor Arbiter: NO employer-employee

relationship; dismissed complaint
NLRC and Court of Appeals: There is

employer-employee relationship BUT it
does not automatically make the camera
men regular employees.
HOW DID THE SUPREME COURT DECIDE?



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J. LEONEN: Paragele v. GMA Network, Inc., G.R. No. 235315, [July

13, 2020]
THE CAMERA MEN ARE EMPLOYEES. The four-fold test has been applied in
determining the existence of an employer-employee relationship. In Begino v. ABS-CBN:
To determine the existence of [an employer-employee relationship], case law has
consistently applied the four-fold test, to wit: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power of dismissal; and (d) the
employer's power to control the employee on the means and methods by which the work
is accomplished. Of these criteria, the so-called "control test" is generally regarded as
the most crucial and determinative indicator of the presence or absence of an employer-
employee relationship. Under this test, an employer-employee relationship is
said to exist where the person for whom the services are performed
reserves the right to control not only the end result but also the manner
and means utilized to achieve the same. (Citations omitted, emphasis supplied)
|||


---------------------------------------------------------
Petitioners were subject to GMA's control and supervision.
(1) Their recordings and shoots were never left to their own
discretion and craft;
(2) They were required to follow the work schedules which GMA
provided to them;
(3) They were not allowed to leave the work site during tapings,
which often lasted for days;
(4) They were also required to follow company rules like any
other employee.
GMA provided the equipment they used during tapings. GMA

also assigned supervisors to monitor their performance and
guarantee their compliance with company protocols and
standards.
DEAN ADA ABAD 2021 VILLASIS BAR REVIEW100


LAW 07172021 50
7/26/2021

---------------------------------------------------------
BUT ARE THEY

REGULAR
EMPLOYEES?
Assuming casual
employees, do they
need to have rendered
365 days before they
could be considered
regular?


---------------------------------------------------------
REGULAR EMPLOYEES!!!
Not even casual employees, because of
the necessity or desirability of the job.
Classifying employment, that is,

whether an employee is engaged as a
regular, project, seasonal, casual, or
fixed-term employee, is "determined by
law, regardless of any contract
expressing otherwise.


LAW 07172021 51
7/26/2021

Here, GMA argues that petitioners should have rendered
---------------------------------------------------------
"at least one (1) year of service equivalent to 313 working

days (6-day work per week) or 261 days (5-day work per
week)" before they are deemed to have attained regular
status.
It harps on the March 3, 2017 Decision of the Court of

Appeals which noted that petitioners cannot be deemed
regular employees since they failed to comply with the
one-year period supposedly required by law.
Quite notably, GMA does not refute the finding that

petitioners performed functions necessary and desirable
to its usual business, it merely insists on a supposedly
requisite duration.


---------------------------------------------------------
From the plain language of the second paragraph of Article 295 of
the Labor Code, it is clear that the requirement of rendering "at
least one (1) year of service[,]" before an employee is deemed to
have attained regular status, only applies to casual employees.
An employee is regarded a casual employee if he or she was

engaged to perform functions which are NOT necessary
and desirable to the usual business and trade of the
employer.
Thus, when one is engaged to perform functions which are

necessary and desirable to the usual business and trade of the
employer, engagement for a year-long duration is not a controlling
consideration.


LAW 07172021 52
7/26/2021

---------------------------------------------------------
GMA's claim that petitioners were required to render

at least one (1) year of service before they may be
considered regular employees finds no basis in law.
Petitioners were never casual employees

precisely because they performed functions
that were necessary and desirable to the
usual business of GMA. They did not need to
render a year's worth of service to be
considered regular employees. (J LEONEN,
Paragele v. GMA Network, Inc., G.R. No. 235315, [July 13, 2020])


2019 BAR: QUESTION 3 –

---------------------------------------------------------
A, B, and C were hired as resident-doctors by MM

Medical Center, Inc. In the course of their
engagement, A, B and C maintained specific work
schedules as determined by the Medical Director.
The hospital also monitored their work through
supervisors who gave them specific instructions
on how they should perform their respective
tasks, including diagnosis, treatment, and
management of their patients.


LAW 07172021 53
7/26/2021

---------------------------------------------------------
One day, A, B, and C approached the Medical

Director and inquired about the non-payment of
their employment benefits.
In response, the Medical Director told them that

they are not entitled to any because they are mere
"independent contractors" as expressly stipulated
in the contracts which they admittedly signed. As
such, no employer-employee relationship exists
between them and the hospital.


---------------------------------------------------------
a) What is the control test in determining the

existence of an employer-employee? (2%)
b) Is the Medical Director's reliance on the

contracts signed by A, B, and C to refute the
existence of an employer-employee relationship
correct? If not, are A, B, and C employees of MM
Medical Center, Inc.? Explain (3%)


LAW 07172021 54
7/26/2021

---------------------------------------------------------
SUGGESTED ANSWER:
a) Control test has been defined as one where the

employer has reserved to himself the right to
control not only the ends to be achieved, but
also the manner and means to achieve such end.
(LVN Pictures vs. LVN Musician’s Guild, 1 SCRA 132; cf. J. PERLAS-BERNABE CASE:
FELICILDA V. UY, G.R. NO. 221241, [14 SEPTEMBER 2016])


---------------------------------------------------------
b) No, the Medical Director’s reliance on the contracts signed by A,B & C to refute
the existence of an employer-employee relationship is not correct. A, B & C are
employees of MM Medical Center, Inc. Under the “control test” the employment
of relationship existed between the physicians and the hospital because the
hospital controlled the means and the details of the process by which the
resident doctors accomplished their task.
In this case, the hospital maintained the specific work schedules of A,B, & C.
Moreover, the hospital monitored their specific instructions on how they should
perform their respective tasks, including diagnosis, treatment and management of
their patients. The element of control having been established, A, B, & C are
employees of MM Medical Center, Inc. (Calamba Medical Center, Inc. vs. NLRC, et al., G.R. No.
176484, 25 November 2008.)


LAW 07172021 55
7/26/2021

---------------------------------------------------------
2017 LABOR BAR QUESTION (I).
A.What are the accepted tests to determine the

existence of an employer-employee relationship?
(5%)
B. Applying the tests to determine the existence of

an employer-employee relationship, is a jeepney
driver operating under the boundary system an
employee of his jeepney operator or a mere
lessee of the jeepney? Explain your answer. (3%)


---------------------------------------------------------
ANSWER (B):
The relationship is that of employer-employee, and not of lessor-

lessee.
In the case of jeepney operator and jeepney driver, the former

exercise supervision and control over the latter. The owner-operator,
as holder of the certificate of public convenience, must see to it that
the jeepney driver follows the route prescribed by the franchising
authority and the rules promulgated as regards to its operation.
Moreover, jeepney drivers perform activities which are usually
necessary or desirable in the usual business or trade of the jeepney
operator. (Jardin, et al. V. NLRC, 326 SCRA 299 [2000].)


LAW 07172021 56
7/26/2021

---------------------------------------------------------
CONTRA -- 2016 BAR QUESTION:
Jim is the holder of a certificate of public convenience for a
jeepney. He entered into a contract of lease with Nick, whereby they
agreed that the lease period is for one (1) year unless sooner
terminated by Jim for any of the causes laid down in the contract.
The rental is thirty thousand pesos (P30,000.00) monthly. All the

expenses for the repair of the jeepney, together with expenses for
diesel, oil and service, shall be for the account of Nick. Nick is
required to make a deposit of three (3) months to answer for the
restoration of the vehicle to its good operating condition when the
contract ends.


It is stipulated that Nick is not an employee of Jim
---------------------------------------------------------
and he holds the latter free and harmless from all

suits or claims which may arise from the
implementation of the contract. Nick has the right to
use the jeepney at any hour of the day provided it is
operated on the approved line of operation.
After five (5) months of the lease and payment of the

rentals, Nick became delinquent in the payment of
the rentals for two (2) months. Jim, as authorized by
the contract, sent a letter of demand rescinding the
contract and asked for the arrearages.


LAW 07172021 57
7/26/2021

---------------------------------------------------------
Nick responded by filing a complaint with the

NLRC for illegal dismissal, claiming that the
contract is illegal and he was just forced by Jim to
sign it so he can drive. He claims he is really a
driver of Jim on a boundary system and the reason
he was removed is because he failed to pay the
complete daily boundary, of one thousand
(P1,000.00) for 2 months due to the increase in the
number of tricycles.


---------------------------------------------------------
[a] Jim files a motion to dismiss the NLRC

case on the ground that the regular court
has jurisdiction since the agreement is a
lease contract. Rule on the motion and
explain. (2.5%)
[b] Assuming that Nick is an employee of

Jim, was Nick validly dismissed? (2.5%)


LAW 07172021 58
7/26/2021

---------------------------------------------------------
ANSWER:
(A)This is a LEASE CONTRACT. xxx
(B) Not a valid dismissal. No due

process.


---------------------------------------------------------
CONTRA:
Royale Homes Marketing Corp. v. Alcantara, G.R. No.
195190, 28 July 2014. ---
BUT not every form of control that a hiring party imposes

on the hired party is indicative of employee-employer
relationship. Rules and regulations that merely serve as
guidelines towards the achievement of a mutually desired
result without dictating the means and methods of
accomplishing it do not establish employer-employee
relationship


LAW 07172021 59
7/26/2021

---------------------------------------------------------
RULES as NO CONTROL, NO
GUIDELINES ER-EE RELN
RULES fixing CONTROL,

METHOD ER-EE RELN


---------------------------------------------------------
GENERAL RULE #3:

Burden of proof is
always upon
employer to show
validity of its exercise of
management prerogatives,
especially as regards
termination of employment.


LAW 07172021 60
7/26/2021

---------------------------------------------------------
NOTE:
HOWEVER COMPLAINANT EMPLOYEE

INITIALLY HAS THE BURDEN OF
PROVING THE FACT OF HIRING (Danilo
“Bitoy” Javier vs. CA, G.R. No. 192558, 15 February 2012)
AND THE FACT OF FIRING (Remoticado v.
Typical Construction Trading Corp., G.R. No. 206529, [April
23, 2018], J. LEONEN).


---------------------------------------------------------
There can be no case for illegal termination of
employment when there was no termination by
the employer. While, in illegal termination
cases, the burden is upon the employer to
show just cause for termination of employment,
such a burden arises only if the complaining
employee has shown, by substantial evidence,
the fact of termination by the
employer.||| (Remoticado v. Typical Construction
Trading Corp., G.R. No. 206529, [April 23, 2018], J.
LEONEN).


LAW 07172021 61
7/26/2021

---------------------------------------------------------
'The burden of proof rests upon the party who

asserts the affirmative of an issue.'
Since it is Valencia here who is claiming to be an employee of
Classique Vinyl, it is thus incumbent upon him to proffer evidence to
prove the existence of employer-employee relationship between
them. He needs to show by substantial evidence that he was indeed
an employee of the company against which he claims illegal
dismissal. Corollary, the burden to prove the elements of an
employer-employee relationship, viz.: (1) the selection and
engagement of the employee; (2) the payment of wages; (3) the
power of dismissal; and (4) power of control.


---------------------------------------------------------
Indeed, there is no hard and fast rule designed to

establish the afore-mentioned elements of employer-
employee relationship. "Any competent and relevant
evidence to prove the relationship may be admitted."
In this case, however, Valencia failed to

present competent evidence, documentary
or otherwise, to support his claimed employer-
employee relationship between him and Classique
Vinyl. All he advanced were mere factual assertions
unsupported by proof.


LAW 07172021 62
7/26/2021

---------------------------------------------------------
GENERAL RULE #4:
Only SUBSTANTIAL
EVIDENCE required.


---------------------------------------------------------
Valencia v. Classique Vinyl Products Corp., G.R. No.

206390, 30 January 2017] --
It is an oft-repeated rule that in labor cases, as in other

administrative and quasi-judicial proceedings, “the
quantum of proof necessary is substantial
evidence, or such amount of relevant evidence
which a reasonable mind might accept as
adequate to justify a conclusion.”


LAW 07172021 63
7/26/2021

---------------------------------------------------------
IMPORTANT
CASE ON
SUBSTANTIAL
EVIDENCE. –
Alilem Credit Cooperative
vs. Bandiola, G.R. No.
173489, 25 February 2013.
NOT ASKED IN PREVIOUS

BAR


---------------------------------------------------------
QUESTION: Are sworn statements of relatives and

friends of respondent attesting to the existence of an
extra-marital affair considered sufficient evidence to
prove immorality, as a just cause for termination?


LAW 07172021 64
7/26/2021

---------------------------------------------------------
Answer: YES.
The employer’s evidence
consists of sworn statements
of either relatives or friends of
Thelma and respondent.
They either had direct personal

knowledge of the illicit
relationship or revealed
circumstances indicating the
existence of such relationship.


2017 BAR EXAM: (Question II)

---------------------------------------------------------
Procopio was dismissed from employment

for stealing co-employee Raul’s watch.
Labor Arbiter ruled in favor of Procopio on
the ground that Raul’s testimony was
doubtful, and hence should be resolved in
favor of Procopio.


LAW 07172021 65
7/26/2021

On appeal, NLRC reversed because Art 4 of Labor

---------------------------------------------------------
Code provides that all doubts in the interpretation

and implementation of Labor Code and impl rules,
shall be resolved in favor of labor – APPLIED ONLY
when the doubt involved “interpretation or
implementation of Labor Code.”
Hence, the doubt which involved application of

rules on evidence, not Labor Code, could not
necessarily be resolved in favor of Procopio. Was
the reversal correct? Explain your answer (3%)


---------------------------------------------------------
ANSWER:
The reversal is NOT correct.
The interpretation in favor of labor also includes that
regarding doubtful evidence.
In this case, there appears to be serious doubts in the evidence on
record as to the factual basis of the charges against Procopio. These
doubts should be resolved in his favor in line with the policy under the
Labor Code to afford protection to labor and construe doubts in favor
of labor. Hence, the reversal is not correct. (Asuncion V. NLRC, 362 SCRA 56
[2001].)


LAW 07172021 66
7/26/2021

---------------------------------------------------------
GENERAL RULE N0. 4
NO RETROACTIVE EFFECT OF
LABOR LAWS
EXCEPTION:
WHEN EXPLICITLY SO PROVIDED


---------------------------------------------------------
GENERAL RULE #5:

IN CASE OF DOUBT OR AMBIGUITY, INTERPRET
IN FAVOR OF LABOR


LAW 07172021 67
7/26/2021

---------------------------------------------------------


---------------------------------------------------------
Where the contract of

“
employment, being a contract of

adhesion, is ambiguous, any
ambiguity therein should be
construed strictly against the
party who prepared it.”
Price vs. Innodata Phils., 567 SCRA 122 [2008]


LAW 07172021 68
7/26/2021

TWO CASES ON
---------------------------------------------------------
CONTRACT INTERPRETATION


---------------------------------------------------------
CASE1 ISSUE: (BPI vs. BPI Employees Union –

Metro Manila, G.R. No. 175678 [22 August 2012]).
In a CBA which provides for multipurpose

loans which may be availed of by the
employees, is the imposition of a “NO
NEGATIVE DATA BANK (No NDB)” policy
violative of the CBA obligation?


LAW 07172021 69
7/26/2021

---------------------------------------------------------
NO NDB POLICY:
“BEFORE AN EMPLOYEE OR HIS/HER SPOUSE
CAN AVAIL OF THE LOAN BENEFITS UNDER THE
CBA, THE SAID EMPLOYEE OR HIS/HER SPOUSE
MUST NOT BE LISTED IN THE NEGATIVE
DATA BANK, OR IF PREVIOUSLY LISTED
THEREIN, MUST OBTAIN CLEARANCE OF AT
LEAST ONE (1) YEAR OR SIX MONTHS, AS THE
CASE MAY BE, PRIOR TO A LOAN APPLICATION.”


---------------------------------------------------------
SUPREME COURT
DECISION:
YES, it is violative
of CBA. For the
Union.


LAW 07172021 70
7/26/2021

---------------------------------------------------------
• The “No NDB policy” is a new

condition which was NEVER
CONTEMPLATED in the CBA
• UNREASONABLE to the
employees because some of them
may not be able to get a “NO NDB
CLEARANCE”


---------------------------------------------------------
If the Bank intended to include the

No NDB policy in the CBA, it should
have presented such proposal to
the union during negotiations.
To include such policy after the effectivity of
the CBA is deceptive and goes beyond the
original agreement between the parties. (BPI vs.
BPI Employees Union – Metro Manila, G.R. No. 175678 [22 August 2012].


LAW 07172021 71
7/26/2021

---------------------------------------------------------
IMPORTANT CASE2 ON FUNERAL AND BEREAVEMENT AID FOR

DEATH OF LEGAL DEPENDENTS:
(Philippine Journalist Inc. vs.Journal Employees Union, G.R. No. 192601, 03 June 2013)


---------------------------------------------------------
CBA PROVISION:
SECTION 4. Funeral/ Bereavement Aid. The

COMPANY agrees to grant a
funeral/bereavement aid in the following
instances:
a. Death of a regular employee in line of duty –
P50,000
b. Death of a regular employee not in line of
duty – P40,000
c. Death of legal dependent of a regular
employee – P15,000.


LAW 07172021 72
7/26/2021

---------------------------------------------------------
ISSUE:
In the availment of funeral and

bereavement aid under the CBA,
may the Company interpret “legal
dependent” in accordance with the
SSS definition of “beneficiary” and
hence, refuse payment of the
benefit?


---------------------------------------------------------
SUPREME
COURT
DECISION:
NO, the
Company
cannot do so.
For the Union.


LAW 07172021 73
7/26/2021

---------------------------------------------------------
If the CBA is silent, then the

coverage of the term legal
dependent in the CBA is to be
construed as similar to the
meaning that contemporaneous
social legislations have set.


---------------------------------------------------------
Accordingly, the concurrence of a

legitimate spouse does not disqualify
a child or a parent of the employee
from being a legal dependent,
provided substantial evidence is
adduced to prove the actual
dependency of the child or parent on
the support of the employee.”


LAW 07172021 74
7/26/2021

---------------------------------------------------------


---------------------------------------------------------


LAW 07172021 75
7/26/2021

---------------------------------------------------------
SOUTH WEST DISASTER CONTROL
Er-ee relationship as condition sine

qua non for application of labor
code: jurisdiction of labor courts
"Reasonable causal connection

rule”


---------------------------------------------------------
THE TV CASES:
ABS-CBN (KAPAMILYA)
GMA (KAPUSO)
FUJI TELEVISION


LAW 07172021 76
7/26/2021

---------------------------------------------------------
Jose Sonza vs. ABS-CBN, G.R. 138051, 10

June 2004. – Relationship of a big name
talent (Jay Sonza) and a television-radio
broadcasting company is one of an
independent contracting arrangement. ABS-
CBN engaged SONZA’s services specifically
to co-host the "Mel & Jay" programs. ABS-
CBN did not assign any other work to
SONZA. To perform his work, SONZA only
needed his skills and talent. How SONZA
delivered his lines, appeared on television,
and sounded on radio were outside ABS-
CBN’s control. SONZA did not have to
render eight hours of work per day.


---------------------------------------------------------
The Agreement required SONZA to attend only rehearsals

and tapings of the shows, as well as pre- and post-
production staff meetings. ABS-CBN could not dictate the
contents of SONZA’s script. We find that ABS-CBN was not
involved in the actual performance that produced the
finished product of SONZA’s work.33
ABS-CBN did not instruct SONZA how to perform

his job. ABS-CBN merely reserved the right to
modify the program format and airtime schedule
"for more effective programming."


LAW 07172021 77
7/26/2021

---------------------------------------------------------
IN CONTRAST TO:
FURLACHE VS ABS-CBN, JAN 2010:
CAMERAMAN, EDITOR, VTR, DRIVERS, TELEPROMPTER cannot be
considered “off-camera talents”
ABS-CBN VS NAZARENO, Sept 2006

PRODUCTION ASSISTANTS cannot be considered "talents" because
they are not actors nor actresses or radio specialists BUT mere
clerks or utility employees


---------------------------------------------------------
ABS-CBN Naga News Center
Complainants were hired as Manager, Cameramen/Editors and Reporters,

on project basis through Talent Contracts with terms ranging from three
(3) months to one (1) year with correlative Project Assignment Forms.
(Nelson Begino vs. ABS-CBN, Apr 2015)


LAW 07172021 78
7/26/2021

---------------------------------------------------------
SUPREME COURT DECISION:

REGULAR EMPLOYEES
Notwithstanding the nomenclature of

their Talent Contracts and/or Project
Assignment Forms, the terms and
conditions of the engagement reveal one
of employer-employee relationship rather
than as independent contracting
arrangement.


---------------------------------------------------------
In January 2009, Arlene was diagnosed with lung cancer. She

informed Fuji about her condition. Fuji, through News Head,
informed Arlene "that the company will have a problem
renewing her contract" since it would be difficult for her to
perform her job. She "insisted that she was still fit to work as
certified by her attending physician.”
After much negotiations, Arlene and Fuji signed a last non-

renewable contract on May 5, 2009, where it was stipulated
that her contract would no longer be renewed after its
expiration on May 31, 2009. The contract also provided that
the parties release each other from liabilities and
responsibilities under the employment contract.


LAW 07172021 79
7/26/2021

---------------------------------------------------------
In consideration of the non-renewal

contract, Arlene "acknowledged receipt of
the total amount of US$18,050.00
representing her monthly salary from March
2009 to May 2009, year-end bonus, mid-year
bonus, and separation
pay." However, Arlene affixed her signature
on the non-renewal contract with the initials
"U.P." for "under protest."


---------------------------------------------------------
ARLENE’S WORK IS NECESSARY OR DESIRABLE IN THE USUAL

TRADE OR BUSINESS OF FUJI
Fuji is engaged in the business of broadcasting, including news

programming. It is based in Japan and has overseas offices to
cover international news. Based on the record, Fuji's Manila
Bureau Office is a small unit and has a few employees. As
such, Arlene had to do all activities related to news gathering.
Although Fuji insists that Arlene was a stringer, it alleges that her
designation was "News Talent/Reporter/Producer."
||| (Fuji Television Network, Inc. v. Espiritu, G.R. Nos. 204944-45, [December 3, 2014], 749 PHIL 388-450)


LAW 07172021 80
7/26/2021

---------------------------------------------------------
• plans and supervises newscast . . . [and] work[s] with

reporters in the field planning and gathering information.
. . ."
• "[m]onitoring and [g]etting [n]ews [s]tories, [r]eporting
interviewing subjects in front of a video camera,"
• "the timely submission of news and current events
reports pertaining to the Philippines[,] and
traveling [sic] to [Fuji's] regional office in Thailand."
• She also had to report for work in Fuji's office in Manila
from Mondays to Fridays, eight (8) hours per day.
• She had no equipment and had to use the facilities of Fuji
to accomplish her tasks.


---------------------------------------------------------
The Court of Appeals correctly affirmed the finding of

the National Labor Relations Commission that the
successive renewals of Arlene's contract indicated
the necessity and desirability of her work in the
usual course of Fuji's business. Because of
this, Arlene had become a regular
employee with the right to security of
tenure


LAW 07172021 81
7/26/2021

---------------------------------------------------------
Under this rule, if there is a reasonable causal

connection between the claim asserted and
the employer-employee relations, then the
case is within the jurisdiction of our labor
courts. In the absence of such nexus, it is the
regular courts that have jurisdiction.


2014 CASE: Indophil Textile Mills Vs. Adviento,
---------------------------------------------------------
G.R. No. 171212, 04 August 2014 – definition of

reasonable causal connection
Facts: Adviento was
hired as Civil Engineer
(of Indophil, whose
primary business is the
manufacture of textiles.
Adviento developed a
chronic allergy on
account of the textile
dust.


LAW 07172021 82
7/26/2021

---------------------------------------------------------
He was eventually dismissed from employment, for

which reason he filed two cases against the
company, viz:
(a) NLRC for illegal termination; and
(b) Regional Trial Court for damages arising from
gross negligence and failure of company to
provide a safe, workable and healthy environment.
Company sought to dismiss the RTC case on

account of litis pendencia and lack of jurisdiction,
considering that the claim arises from an employer-
employee relationship.


---------------------------------------------------------
Question: Whether or not

RTC has jurisdiction?
Answer: YES! No reasonable

causal connection between
claim and employer-
employee relationship.


LAW 07172021 83
7/26/2021

---------------------------------------------------------
While the maintenance of a safe and

healthy workplace may be a subject of a
labor case, note that the cause of action
is one for torts/quasi-delict and that
relief prayed for is the payment for
damages arising from alleged gross
negligence on the part of the company to
provide a safe, healthy and workable
environment for its employees.


---------------------------------------------------------
De Roca v. Dabuyan, G.R. No. 215281, 05 March 2018–
"Contracts take effect only between the

parties, their assigns and heirs, except in
case where the rights and obligations
arising from the contract are not
transmissible by their nature, or by
stipulation or by provision of law."


LAW 07172021 84
7/26/2021

---------------------------------------------------------
The contract of employment between respondents, on the one hand,

and Oceanic and Ewayan on the other, is effective only between
them; it does not extend to petitioner, who is not a party thereto.
His only role is as lessor of the premises which Oceanic

leased to operate as a hotel; he cannot be deemed as
respondent's employer — not even under the pretext that he took
over as the "new management" of the hotel operated by Oceanic.
There simply is no truth to such claim. Thus, to allow respondents to
recover their monetary claims from petitioner would necessarily
result in their unjust enrichment.


IS A CAR PLAN GIVEN TO MANAGERS

---------------------------------------------------------
A CIVIL OR LABOR DISPUTE?


LAW 07172021 85
7/26/2021

---------------------------------------------------------
An employer’s demand for the payment

of the market value of the car, or in the
alternative, the surrender of a car, is not a
labor dispute but a civil one. Hence, this
demand properly falls within the jurisdiction of
the civil courts. No reasonable causal
connection between the claim to the issue of
an employer-employee relationship.SMART
Communications vs. Astorga, G.R. 148132, 28 Jan 2008.


---------------------------------------------------------
QUESTION: CAR LOAN BENEFIT

WHAT IF THE REIMBURSEMENT OF CAR
LOAN PAYMENTS WERE MADE AS A
PART OF THE CLAIMS IN THE ILLEGAL
TERMINATION CASE? MAY THE LABOR
COURTS STILL HAVE JURISDICTION
OVER THE CLAIM?


LAW 07172021 86
7/26/2021

---------------------------------------------------------
Grandteq Industrial Steel

Products vs. Edna
Margallo, G.R. No.
181393, 28 July 2009. –
Margallo availed of car loan program offered by Grandteq,

as reward for being “Salesman of the Year.” She paid a
downpayment on brand new Toyota Corolla in amount of
P201,000.00 from her own personal money, plus half of
monthly amortizations (half company)


---------------------------------------------------------
Claim by Margallo for reimbursement of car loan

payments under car loan agreement with Grandteq,
among others.
Labor Arbiter dismissed claim, finding that the

contract stipulation should be strictly followed as the
law between the parties.
On appeal, NLRC/CA reversed the Labor Arbiter’s

decision, and declared the forfeiture provision of the
car loan agreement as null and void.


LAW 07172021 87
7/26/2021

---------------------------------------------------------
“Although not strictly a labor contract, a car loan agreement

herein involves a benefit extended by the employers, Grandteq
and Gonzales, to their employee Margallo. It should benefit, and
not unduly unburden Margallo.
The court cannot, in any way, uphold a car loan agreement that
threatens the employee with the forfeiture of all the car loan
payments he/she had previously made, plus loss of the
possession of the car, should the employee wish to resign;
otherwise, said agreement can then be used by employer as an
instrument to either hold said employee hostage to the job or
punish him/her for resigning.”


---------------------------------------------------------


LAW 07172021 88
7/26/2021

---------------------------------------------------------
IS THE TERMINATION
OF A HIGHER MANAGEMENT
OFFICER
“ASST. VICE-PRESIDENT”
“EXECUTIVE VICE-
PRESIDENT”, OR SIMPLY
“VICE-PRESIDENT”
A LABOR CASE OR
A CORPORATE CASE?


---------------------------------------------------------
WHO ARE CORPORATE OFFICERS?

Corporation Code, Section 25. Corporate officers,
quorum. - Immediately after their election, the directors of a
corporation must formally organize by the election of a
president, who shall be a director, a treasurer who may
or may not be a director, a secretary who shall be a resident
and citizen of the Philippines, and such other officers as may be
provided for in the by-laws. Any two (2) or more positions may be
held concurrently by the same person, except that no one shall
act as president and secretary or as president and treasurer at
the same time.


LAW 07172021 89
7/26/2021

EXCEPTIONS:
---------------------------------------------------------
• WHEN THE ARTICLES OR BY-LAWS PROVIDE

FOR OFFICERS OTHER THAN THAT REQUIRED
IN THE CORPORATION CODE
• BY RESOLUTION OF BOARD OF DIRECTORS,

DULY EMPOWERED AND AUTHORIZED TO
CREATE SUCH ADDITIONAL CORPORATE
OFFICES, WHICH POSITIONS ARE ALSO
REFLECTED IN THE ARTICLES OR BY-LAWS


---------------------------------------------------------
Intra-corporate disputes.
A corporate officer’s removal from his office

is a corporate act, and the case partakes of
the nature of an intra-corporate dispute.


LAW 07172021 90
7/26/2021

---------------------------------------------------------
Inasmuch as the matter comes within the area of corporate

affairs and management, such a corporate controversy
would necessarily require the adjudicative expertise of the
Securities and Exchange Commission (SEC), and not the
Labor Arbiter or the NRLC. (De Rossi vs. NLRC, 314 SCRA 245 [1999]).


---------------------------------------------------------
The Supreme Court has

consistently held that it is the
SEC that has exclusive and
original jurisdiction over
controversies involving
removal from a corporate
office. (Union Motors Corp. vs. NLRC, 314 SCRA 531
[1999]).


LAW 07172021 91
7/26/2021

---------------------------------------------------------
Is separation from the
service of one who is an
employee, stockholder,
and a Director of the
corporation all at the
same time, an intra-
corporate dispute or a
labor termination case?
(Matling Industrial and Commercial Corporation vs.
Coros G.R. No.. 157802, 13 October 2010).


---------------------------------------------------------
This is a labor termination case within the

jurisdiction of the Labor Arbiter.
The criteria for distinguishing between corporate

officers who may be ousted from office at will, on
one hand, and ordinary corporate employees who
may only be terminated for just cause, on the other
hand, do not depend on the nature of the services
performed, but on the creation of the office.


LAW 07172021 92
7/26/2021

---------------------------------------------------------
In the present case, the complainant rose

from the ranks from the position of
bookkeeper to become Vice President
for Finance and Administration after
21 years of service with the
company, which corporate position he
held for 13 years until he was terminated
from employment.


---------------------------------------------------------
Even though the complainant might have become a

stockholder of the company, his promotion to the position of
VP Finance & Administration was by virtue of the length of
service he had rendered as an employee.
His subsequent acquisition of the status of

Director/Stockholder had no relation to his promotion.
Besides, his status as Director/Stockholder was unaffected by

his dismissal from employment as Vice President for Finance
and Administration.


LAW 07172021 93
7/26/2021

---------------------------------------------------------
More importantly, the Company’s

By-laws did not mention his
position Vice President for Finance
and Administration as one of the
corporate officers and that his
position was not created by its
Board of Directors or stockholders
but only by the President or
Executive Vice President.


---------------------------------------------------------
VERY IMPORTANT CASE ON

EXISTENCE OF INTRA-CORPORATE
CONTROVERSY:
Real v. Sangu Philippines, Inc., G.R. No.

168757, 19 January 2011


LAW 07172021 94
7/26/2021

---------------------------------------------------------
There is a two-tier test in determining the

existence of intra-corporate controversy
which must both be complied with:
1. RELATIONSHIP TEST; and

2. NATURE OF THE
CONTROVERSY TEST


---------------------------------------------------------
If not complied with,

then this is not an intra-
corporate controversy.


LAW 07172021 95
7/26/2021

---------------------------------------------------------
Intra-Corporate Controversy; relationship test
a) between the corporation, partnership or association and

the public;
b) between the corporation, partnership or association and
its stockholders, partners, members or officers;
c) between the corporation, partnership or association and
the State as far as its franchise, permit or license to
operate is concerned; and
d) among the stockholders, partners or associates
themselves.


---------------------------------------------------------
Intra-Corporate Controversy; nature of the

controversy test
The controversy must not only be rooted in the

existence of an intra-corporate relationship, but
must as well pertain to the enforcement of the
parties' correlative rights and obligations under
the Corporation Code and the internal and intra-
corporate regulatory rules of the corporation.


LAW 07172021 96
7/26/2021

---------------------------------------------------------
If the relationship and its incidents

are merely incidental to the
controversy; OR
if there will still be conflict even if the
relationship does not exist,
then no intra-corporate
controversy exists


---------------------------------------------------------
Two-tier test converting into a LABOR

PERSPECTIVE:
1. EMPLOYER-EMPLOYEE
RELATIONSHIP; and
2. REASONABLE CAUSAL
CONNECTION


LAW 07172021 97
7/26/2021

---------------------------------------------------------


---------------------------------------------------------
GENERAL RULE:
CORPORATE OFFICER NOT LIABLE
EXCEPT:
(A) BAD FAITH OF CORPORATE OFFICER
MUST BE ESTABLISHED CLEARLY
AND CONVINCINGLY; AND
(B) CAN BE INDIVIDUALLY ATTRIBUED TO
THE OFFICER.


LAW 07172021 98
7/26/2021

---------------------------------------------------------
GENERAL RULE:
JOINT LIABILITY ONLY
If bad faith established,

Decision must state that
liability is SOLIDARY;
otherwise, NOT.


---------------------------------------------------------
ADA’S TIP ON
HOW TO
DECIDE ON
JURISDICTION


LAW 07172021 99
7/26/2021

---------------------------------------------------------
In determining the nature of

the case, check the principal
relief/ prayer sought by the
complainant.
That is the main factor that

determines jurisdiction.

CASE RELIEF JURISDICTION

SMART VS. REPLEVIN; RETURN OF THE CAR OF REGIONAL TRIAL
ASTORGA THE MANAGER COURT
GRANDTEQ VS. ILLEGAL TERMINATION WITH PRAYER LABOR ARBITER
MARGALLO FOR REIMBURSEMENT OF
DOWNPAYMENT FOR CAR
INDOTEXTILE VS. DAMAGES FOR COMPANY’S FAILURE REGIONAL TRIAL
ADVIENTO TO PROVIDE SAFE AND HEALTHY COURT
WORKING ENVIRONMENT
MATLING VS. TERMINATION OF VP FOR FINANCE LABOR ARBITER
COROS AND ADMINISTRATION, WHICH
POSITION IS NOT IN ARTICLES OR BY-
LAWS
COSARE VS TERMINATION OF ASST VICE- LABOR ARBITER
BROADCOM PRESIDENT FOR SALES, WHO WAS
ALSO A STOCKHOLDER. AVP-SALES
NOT A CORP OFFICER
MALAYAN VS REPLEVIN; RETURN OF THE CAR OF REGIONAL TRIAL
ALIBUDBUD THE MANAGER COURT
200

LAW 07172021 100
7/26/2021

---------------------------------------------------------
LEONEN, J: Malcaba v. ProHealth Pharma Philippines, Inc., G.R.
No. 209085 , [June 6, 2018]
This case involves fundamental principles in labor cases.
First, appeal bond must be complied with.
Second, before any labor tribunal takes cognizance of termination disputes, it

must first have jurisdiction over the action. The Labor Arbiter and the National Labor
Relations Commission only exercise jurisdiction over termination disputes between an
employer and an employee. They
do not exercise jurisdiction over
termination disputes between a corporation and a corporate officer.
Third, while this Court recognizes the inherent right of employers to discipline their
employees, the penalties imposed must be commensurate to the infractions
committed. Dismissal of employees for minor and negligible offenses may be
considered as illegal dismissal.


---------------------------------------------------------


LAW 07172021 101
7/26/2021

---------------------------------------------------------
SIX GENERAL
PRINCIPLES
IN LABOR LAW


---------------------------------------------------------
WHAT ARE THE FOUR TESTS

TO DETERMINE THE
EXISTENCE OF AN
EMPLOYER-EMPLOYEE
RELATIONSHIP?
(CLUE: SOUTH-WEST-
DISASTER CONTROL)


LAW 07172021 102
7/26/2021

---------------------------------------------------------
WHAT ARE THE TWO

TESTS TO DETERMINE
JURISDICTION UNDER
CASTILLO’S REAL VS.
SANGYU CASE?


---------------------------------------------------------
WHO ARE THE THREE

REQUIRED CORPORATE
OFFICERS OF A COMPANY?
ASIDE FROM THE THREE

CORPORATE OFFICERS ABOVE,
HOW CAN ONE BE A
CORPORATE OFFICER?


LAW 07172021 103
7/26/2021

---------------------------------------------------------
QUESTIONS:
CAN YOU HOLD A CORPORATE

OFFICER PERSONALLY LIABLE FOR
CORPORATE DEBT?
GENERAL RULE?
EXCEPTION – ELEMENTS?


---------------------------------------------------------
MANAGEMENT PREROGATIVE


LAW 07172021 104
7/26/2021

---------------------------------------------------------
Management controls and owns

CAPITAL
money workplace equipment
the disposition and direction of

which is ENTIRELY HIS OWN
PREROGATIVE.


WHAT IS MANAGEMENT’S PREROGATIVE?
---------------------------------------------------------
In its quest for profits, management may exercise its

management prerogatives – which is the discretionary
power to decide ALL ASPECTS OF OPERATIONS. In the
aspect of EMPLOYMENT, it includes everything -
From HIRING
To FIRING


LAW 07172021 105
7/26/2021

--------------------------------------------------------- OTHER EXAMPLES OF
MANAGEMENT PREROGATIVES
work assignments and

working methods
time, place and

manner of work,


tools to be used, processes to

---------------------------------------------------------
be followed,
Supervision and
discipline of
employees


LAW 07172021 106
7/26/2021

---------------------------------------------------------
Management is free to regulate, according to

its discretion and judgment, all aspects of
employment, including hiring, work
assignments, working methods, time, place
and manner of work, processes to be followed,
supervision of workers, working regulations,
transfer of employees, work supervision, lay-
off of workers, and discipline, dismissal and
recall of workers. Malcaba v. ProHealth Pharma Philippines, Inc., G.R.
No. 209085, 06 June 2018 ( J. Leonen), citing San MIguel Brewery Sales Force Union vs.
Ople.


---------------------------------------------------------
ELEMENTS FOR
A VALID EXERCISE OF
MANAGEMENT
PREROGATIVES:


LAW 07172021 107
7/26/2021

The free will of the management to conduct its

---------------------------------------------------------
own affairs to achieve its purpose cannot be

denied, PROVIDED THAT THE SAME IS
EXERCISED:
• IN GOOD FAITH,
• FOR THE ADVANCEMENT OF THE
EMPLOYER’S INTEREST; AND
• NOT TO CIRCUMVENT THE RIGHTS OF THE
EMPLOYEES. (San Miguel Brewery and Union
Carbide cases).


---------------------------------------------------------
An employer is entitled to prescribe reasonable
work standards, rules, and regulations necessary
for the conduct of its business, to provide certain
disciplinary measures in order to implement
them, and to assure that the same would be
complied with. This management prerogative of
requiring standards may be availed of so long as
they are exercised in good faith for the
advancement of the employer's interest.
Telephilippines, Inc. v. Jacolbe, G.R. No. 233999, [February 18,
2019])


LAW 07172021 108
7/26/2021

---------------------------------------------------------
As long as no arbitrary or malicious action

on the part of an employer is
shown, the wisdom of a business
judgment to implement a cost saving device
is beyond this court's determination. After all,
the free will of management to conduct its
own business affairs to achieve its purposes
cannot be denied. (citing Maya Farms Employees
Org. vs NLRC, GR No. 106256, 28 Dec 1994)


---------------------------------------------------------
LIMITS ON THE EXERCISE

OF MANAGEMENT
PREROGATIVES


LAW 07172021 109
7/26/2021

---------------------------------------------------------
TRANSFER OF
EMPLOYEES
versus
CONSTRUCTIVE
DISMISSAL


---------------------------------------------------------
It is the prerogative
of management to
transfer an
employee where he
can be most useful
to the company.


LAW 07172021 110
7/26/2021

---------------------------------------------------------
The employer has the burden of proving that the
transfer of an employee is for just or valid ground,
such as genuine business necessity.
The employer must demonstrate that the transfer is
not unreasonable, inconvenient, or prejudicial to
the employee and that the transfer does not involve
a demotion in rank or a diminution in salary and
other benefits.
If the employer fails to overcome this burden of
proof, the employee's transfer is tantamount to
unlawful constructive dismissal."


---------------------------------------------------------
IMPORTANT CASE:
Jurisprudential guidelines in the transfer of
employees: ICT Marketing Services, Inc., etc. vs. Mariphil
L. Sales, G.R. No. 202090, 09 September 2015.


LAW 07172021 111
7/26/2021

---------------------------------------------------------
 Transfer is a movement from one position to another of equivalent
rank, level or salary without break in the service or a lateral
movement from one position to another of equivalent rank or
salary;
 The employer has the inherent right to transfer or reassign an

employee for legitimate business purposes;
 A transfer becomes unlawful where it is motivated by

discrimination or bad faith or is affected as a form of punishment
or is a demotion without sufficient cause;
 The employer must be able to show that the transfer is not

unreasonable, inconvenient or prejudicial to the employee.


---------------------------------------------------------
LATERAL TRANSFER:
No demotion in rank, nor diminution

in pay or benefit
“Not unduly inconvenience the

employee”


LAW 07172021 112
7/26/2021

Chateau Royale Sports and Country Club,
---------------------------------------------------------
Inc. vs. Rachelle G. Balba, et al., G.R. No.

197492, 18 January 2017


---------------------------------------------------------
CONTRA case:
Julie’s Bakeshop vs. Arnaiz, G.R. No.
173882, 15 Feb 2012.
Transfer as demotion, viz from baker to

utility personnel, gives rise to
constructive dismissal --
DEAN ADA ABAD 2021 VILLASIS BAR REVIEW DEAN ADA ABAD 2021 VILLASIS BAR REVIEW226

LAW 07172021 113
7/26/2021

---------------------------------------------------------
In this case, petitioners insist that the transfer of respondents was a

measure of self-preservation and was prompted by a desire to
protect the health of the buying public, claiming that respondents
should be transferred to a position where they could not sabotage
the business pending resolution of their cases.
According to petitioners, the possibility that respondents might

introduce harmful substances to the bread while in the performance
of their duties as chief bakers is not imaginary but real as borne out
by what Tolores did in one of the bakeshops in Culasi, Antique
where he was assigned as baker.


---------------------------------------------------------
WHAT IS THE NATURE

OF THE EXERCISE OF
MANAGEMENT
PREROGATIVE –
IS IT INITIALLY
PRESUMED VALID OR
INVALID?


LAW 07172021 114
7/26/2021

MANILA PAVILLION VS. HENRY DELADA, GR
---------------------------------------------------------
189947, 25 JANUARY 2012 SERENO


---------------------------------------------------------
MPH: YOU TRANSFER, without

prejudice to the resolution of the
grievance involving the transfer.


LAW 07172021 115
7/26/2021

---------------------------------------------------------
Delado: NO!
I will stay in the
Rostisserie until
resolution of the
grievance .


---------------------------------------------------------
Disciplinary case for:

serious misconduct; willful disobedience
of the lawful orders of the employer;
gross insubordination; gross and habitual
neglect of duties; and willful breach of
trust.


LAW 07172021 116
7/26/2021

QUESTION:
---------------------------------------------------------
CAN EMPLOYEE REFUSE TO

COMPLY WITH TRANSFER BY
RAISING THIS AS A GRIEVANCE
ISSUE? IN SHORT, CAN DELADA
RIGHTFULLY STAY IN THE
ROTISSERIE?


---------------------------------------------------------
NO!!! The refusal to obey a valid transfer

order constitutes willful disobedience of a
lawful order of an employer. Employees may
object to, negotiate and seek redress against
employers for rules or orders that they regard
as unjust or illegal. However, until and
unless these rules or orders are declared
illegal or improper by competent
authority, the employees ignore or
disobey them at their peril.


LAW 07172021 117
7/26/2021

---------------------------------------------------------
In fact, Delada cannot hide under the legal cloak

of the grievance machinery of the CBA or the
voluntary arbitration proceedings to disobey a
valid order of transfer from the management of
the hotel. While it is true that Delada’s transfer to
Seasons is the subject of the grievance
machinery in accordance with the provisions of
their CBA, Delada is expected to comply first with
the said lawful directive while awaiting the results
of the decision in the grievance proceedings.


---------------------------------------------------------
OBEY
FIRST


LAW 07172021 118
7/26/2021

---------------------------------------------------------
CONTRA; Prince Transport, Inc. vs. Garcia, et al. G.R. No. 167291,
12 January 2011; When transfer is done in bad faith. –
When the President of Prince Transport, Inc. (PTI) suspected that

the drivers, conductors, mechanics or inspectors were about to
form a union, he made known his objection to the formation of the
same. In order to block the continued formation of the union, PTI
caused the transfer of all union members and sympathizers to one
of its sub-companies, Lubas Transport (Lubas). The transfer of the
workers to Lubas was designed by PTI as a subterfuge to foil the
former’s right to organize themselves into a union. This is ULP as
it interferes with, restrains or coerces the workers of PTI in the
exercise of their right to self-organization.


---------------------------------------------------------

LAW 07172021 119
7/26/2021
Bughaw Jr. Vs. Treasure Island, 550 SCRA 307 [2008];

serious misconduct; drug abuse
The Supreme Court has taken judicial notice of

scientific findings that drug abuse can damage
the mental faculties of the user.
It is beyond question that any employee under

the influence of drugs cannot possibly
continue doing his duties without posing a
serious threat to the lives and property of his
co-workers, and even his employer. DEAN ADA ABAD 2021 VILLASIS BAR REVIEW
239

---------------------------------------------------------
REQUIREMTS FOR VALID DRUG TEST under Rep.
Act No, 9165: (AER vs. Progresibong Union sa AER, 15 July 2011 citing
Nacague vs. Suplicio Case, Aug 2010)
• The drug tests shall be performed only by any

government forensic laboratories or authorized drug
testing centers accredited by the Dept. Of Health, (list of
accredited centers at www.oshc.dole.gov.ph)
• Drug testing shall conform with procedure prescribed by
the Dept. of Health
• Two testing methods: screening text and confirmatory
test


LAW 07172021 120
7/26/2021

---------------------------------------------------------
WHERE THERE IS FRAUD OR ERROR IN

THE DRUG TEST, THEN COMPANY
CANNOT TERMINATE THE EMPLOYEE.
(Plantation Bay vs. Dubrico, GR 188216, 04
Dec 2009)


---------------------------------------------------------
Records show the following timeline, based on the

reports on respondents respective drug
tests administered by Martell and confirmatory tests[
undertaken by the Phil. Drug:
Name Drug Test Confirmatory Test

Romel Dubrico Urine sample received on Issued on 09/29/04
09/29/04 at 5:14 p.m. at 3:57 p.m.
Godfrey Ngujo Urine sample received on Issued on 09/29/04
09/29/04 at 5:24 p.m. at 3:57 p.m.
Julius Villaflor Urine sample received on Issued on 09/29/04
09/29/04 at 5:32 p.m. at 4:15 p.m.


LAW 07172021 121
7/26/2021

---------------------------------------------------------
The importance of the confirmatory test is

underscored in Plantation Bays own Policy and
Procedures, in compliance with Republic Act No. 9165,
requiring that a confirmatory test must be conducted if
an employee is found positive for drugs in the
Employees Prior Screening Test, and that both tests
must arrive at the same positive result.
As reflected in the above matrix, the confirmatory test

results were released earlier than those of the drug test,
thereby casting doubts on the veracity of the
confirmatory results.


---------------------------------------------------------
FOR POSSIBLE BAR QUESTION:
May a company terminate an

employee who refused to take a
random drug test?
Mirant Philippines vs. Joselito A. Caro, G.R.

No. 181490, 23 April 2014. –


LAW 07172021 122
7/26/2021

---------------------------------------------------------
While the adoption and enforcement by petitioner

corporation of its Anti-Drugs Policy is recognized as a valid
exercise of its management prerogative as an employer,
such exercise is not absolute and unbridled.
In the exercise of its management prerogative, an employer

must therefore ensure that the policies, rules and
regulations on work-related activities of the employees
must always be fair and reasonable and the corresponding
penalties, when prescribed, commensurate to the offense
involved and to the degree of the infraction.47 The Anti-
Drugs Policy of Mirant fell short of these requirements.


Armando Puncia vs. Toyota Shaw, G.R. No. 214399,

---------------------------------------------------------
28 June 2016.
MANAGEMENT PREROGATIVE TO IMPOSE
PRODUCTIVITY STANDARDS.


LAW 07172021 123
7/26/2021

Facts:
---------------------------------------------------------
Records reveal that as a Marketing Professional

for Toyota, Puncia had a monthly sales quota of
seven (7) vehicles from March 2011 to June 2011.
As he was having trouble complying with said
quota, Toyota even extended him a modicum of
leniency by lowering his monthly sales quota to
just three (3) vehicles for the months of July and
August 2011; but even then, he still failed to
comply.


---------------------------------------------------------
Issue: Whether or not

management may
impose productivity
standards to determine
efficiency of
employee?
Answer: YES!!!


LAW 07172021 124
7/26/2021

---------------------------------------------------------
Decision:
Puncia’s repeated failure to perform his duties, i.e., reaching his monthly
sales quota for such a period of time, falls under the concept of gross
inefficiency.
In Aliling vs. Feliciano (686 Phil. 910 [2012], citing Lim vs. NLRC, 328 Phil. 843 [1996]),
the SC held that an employer is entitled to impose productivity standards for
its employees, and the latter’s non-compliance therewith can lead to his
termination from work.
In this regard, case law instructs that “gross inefficiency” is analogous to
“gross neglect of duty”, a just cause of dismissal under Article 297 of the
Labor Code, for both involve specific acts of omission on the part of the
employee resulting in damage to the employer or to his business.


---------------------------------------------------------
SPECIFIC ISSUES
ON LABOR STANDARDS


LAW 07172021 125
7/26/2021

---------------------------------------------------------
VALID JOB-
CONTRACTING
VS. LABOR-ONLY
CONTRACTING


---------------------------------------------------------
WHAT IS THE EFFECT IF ONE IS AN

EMPLOYEE?
The employer becomes

liable to the personnel for
ALL WAGES AND
BENEFITS that are found
under the Labor Code. The
employee may exercise
ALL RIGHTS found in
Labor Code


LAW 07172021 126
7/26/2021

---------------------------------------------------------
The employer may validly

avoid liability if he can raise a
defense that the employees –
complainants are not his
employees, but employees of
another entity (the
INDEPENDENT
CONTRACTOR).


---------------------------------------------------------
WHO ARE NOT YOUR

EMPLOYEES?
• Employees of an INDEPENDENT
CONTRACTOR, or those whose conduct
you do not control, are NOT your
employees.
Example: consultant; security guards
assigned by a security agency; janitors
assigned by a janitorial agency.


LAW 07172021 127
7/26/2021

---------------------------------------------------------
ELEMENTS OF A VALID
INDEPENDENT CONTRACTING
OR JOB-CONTRACTING
ARRANGEMENT


---------------------------------------------------------
INDEPENDENT CONTRACTOR
Elements: [I ARM FREE CAPITAL TEMWORK R&B]

Article 106, LB; IRR S8R8B3; Dept. Order 10, Sec. 4[d][e]; Dept. Order 40
• There is a job-contracting permissible by law

where the contractor/agency carries on an
INDEPENDENT business and undertakes the
contract work on his ACCOUNT, under his own
RESPONSIBILITY, using his own MANNER AND
METHODS, FREE from the control of the
principal in all matters connected with the
performance of work excepting the results
thereof.


LAW 07172021 128
7/26/2021
•He has his own CAPITAL in the form

of TOOLS, EQUIPMENT, MACHINERY,
WORK PREMISES, and that the
agreement between the contractor and
principal assures the former’s
employees of ALL RIGHTS AND
BENEFITS under the law.

257
BASIC PREMISES IN VALID JOB CONTRACTING

(INDEPENDENT CONTRACTORSHIP ARRANGEMENT)
FIRST PREMISE:
Not all who work for you, need to be your
employees
SECOND PREMISE:
Contractual relationship borne out of free will.
Management prerogative on part of the owner
of the company, and freedom to contract and
earn a living (property right) on the part of the
job contractor DEAN ADA ABAD 2021 VILLASIS BAR REVIEW
258

LAW 07172021 129
7/26/2021

THIRD PREMISE:
---------------------------------------------------------
TRILATERAL RELATIONSHIP (ARRANGEMENT

BETWEEN THREE PARTIES REGARDING WORK)
OWNER Ind. contractor

employees


FOURTH PREMISE:
---------------------------------------------------------
The vinculum of the relationship between the owner

and independent contractor is the JOB OR
SERVICE (example: SECURITY SERVICES)
PROVIDE
SECURITY TO
PREMISES
IND. CONTRACTOR/
OWNER
SECURITY AGENCY


LAW 07172021 130
7/26/2021

FIFTH PREMISE:
---------------------------------------------------------
The vinculum of the relationship between the

independent contractor and the employees is the
EMPLOYER-EMPLOYEE RELATIONSHIP
ER-EE RELNS.
Employees/
Ind. Contractor/ security
security agency guards


SIXTH PREMISE:
---------------------------------------------------------
The principal (OWNER) does NOT HAVE ANY CONTROL

over the Independent Contractor, nor of the employees of
the independent contractor – EXCEPT as to the results of
the job contracted.
NO
CONTRO
L
OWNER Ind. contractor employees



LAW 07172021 131
7/26/2021

---------------------------------------------------------
TWO CONTRACTS INVOLVED:

FIRST CONTRACT BETW
PRINCIPAL AND AGENCY
No
control
OWNER Ind. contractor employees


---------------------------------------------------------
TWO CONTRACTS INVOLVED:

SECOND CONTRACT BETW AGENCY AND SECURITY GUARDS
No
control
OWNER employees
Ind. contractor


LAW 07172021 132
7/26/2021

---------------------------------------------------------
FIRST CONTRACT BETWEEN

PRINCIPAL AND AGENCY
No Must comply
control with Dept Order
No. 18-A and/or
Dept Order No.
174
OWNER Ind. contractor


---------------------------------------------------------
SYNTHESIS AND
CLARIFICATION OF DOLE
CERTIFICATION AND
PREVIOUS DOCTRINES IN
VALID JOB-CONTRACTING
(OUT-SOURCING)


LAW 07172021 133
7/26/2021

---------------------------------------------------------
RECAPITULATION: Distinction between independent

contractor and the labor-only contractor.
IF VALID JOB-CONTRACTING, LIABILITY OF PRINCIPAL IS FOR

LIMITED PURPOSE, VIZ., TO ENSURE THAT WAGES OF EMPLOYEES
OF INDEPENDENT CONTRACTOR ARE PAID.
IF LABOR-ONLY CONTRACTOR, LIABILITY OF PRINCIPAL IS FOR A
MORE COMPREHENSIVE PURPOSE. THE PRINCIPAL EMPLOYER
BECOMES SOLIDARILY LIABLE WITH LABOR-ONLY CONTRACTOR
FOR ALL RIGHTFUL CLAIMS OF THE EMPLOYEES. San Miguel Corp. vs.
MAERC Integrated Systems, 405 SCRA 579 [10 July 2003]
WARNING: No part of this presentation may be copied, reproduced or transmitted in any form or by any means, electronic or mechanical, without prior written permission from the Villasis Law Center. Villasis Law Center operates a zero tolerance policy in relation to inappropriate
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DEAN ADA ABAD 2021 VILLASIS BAR REVIEW CRITICAL

267
AREAS IN LABOR LAW

---------------------------------------------------------
FIRST CLARIFICATION:
Contracting out is valid as an exercise of
management prerogative for as long as it
complies with the limits and standards
provided by the Labor Code. Essentially,
there must be proof of capitalization, and of
control over his employees on the part of
the independent contractor. ASIAN ALCOHOL,
MERALCO VS. QUISUMBING; REITERATED IN COCA-COLA BOTTLERS VS.
DELA CRUZ ET AL, G.R. No. 184977, 07 December 2009 (BRION, J); See also:
TEMIC Automotive vs. Temic Employees Union, 23 December 2009)


LAW 07172021 134
7/26/2021

---------------------------------------------------------
The law allows contracting and sub-contracting involving

services but closely regulates these activities for the
protection of workers. Thus, an employer can contract out
part of its operations, provided it complies with the limits
and standards provided in the Code and in its
implementing rules. xxx
In strictly layman’s terms, a manufacturer can sell its

products on its own, or allow contractors, independently
operating on their own, to sell and distribute these
products in a manner that does not violate the regulations.
(Coca Cola vs. Dela Cruz, ibid.)


---------------------------------------------------------
SECOND CLARIFICATION: PHIL. AIRLINES VS. LIGAN CASE, CARPIO-
MORALES 2008 CASE --
For labor-only to exist, Sec. 5 of Department Order No. 18-02 requires

any two of the elements to be present, viz.:
(a)The contractor has NO SUFFICIENT CAPITAL OR INVESTMENT, and
the employees supplied to the COMPANY are performing work
which are DIRECTLY RELATED to the principal business business
of the so-called Indirect employer; OR
(b) The contractor has NO CONTROL over the conduct of the work to
be done by the contractor and/or his employees. PHILIPPINE AIRLINES VS.
LIGAN, GR 146408; 548 SCRA 181 (FEB 2008).


LAW 07172021 135
7/26/2021

---------------------------------------------------------
THIRD CLARIFICATION:
The DOLE certification simply gives
rise to a presumption that the
contractor is a legitimate one, in the
absence of evidence to the contrary
presented by the complainants. RAMY
GALLEGO VS. BAYER PHILS. G.R. No. 179807, 31 July 2009; See also: COCA
COLA BOTTLERS VS. RICKY DELA CRUZ, ET AL. (G.R. No. 184977, 07
December 2009) and COCA COLA BOTTLERS VS. AGITO ET AL (G.R. 179546,
13 Feb 2009)


---------------------------------------------------------
HOWEVER PER TRENDING OF SUPREME COURT

CASES:
Where there are there are contradictory

findings between the Court of Appeals and the
NLRC/Labor Arbiter, the
Supreme Court
will NOT be bound by the DOLE
CERTIFICATION, and may consider other factors in the
determination of whether or not a contractor complies
with the requisite elements of a legitimate sub-
contracting as enumerated in the Labor Code and the
Dept. Order No. 18-02.


LAW 07172021 136
7/26/2021

---------------------------------------------------------
WAGES
FACILITIES
(articles or services
CASH WAGE customarily given for
(money) benefit of employee and
accepted voluntarily by
said employee


---------------------------------------------------------


LAW 07172021 137
7/26/2021

---------------------------------------------------------
Basic salary shall include ALL REMUNERATIONS

OR EARNINGS paid by an employer to an
employee for services rendered.
EXCEPT:
• payments for sick, vacation and maternity
leaves;
• night differentials;
• regular holiday pay;
• premiums for work done on rest days and
special holidays. (Honda Phils., Inc. vs. Samahan ng Malayang
Manggagawa sa Honda, 460 SCRA 186 [2005].)


---------------------------------------------------------


LAW 07172021 138
7/26/2021

---------------------------------------------------------
GENERAL RULE:
A bonus is a gratuity or an act of liberality

which the recipient has no right to demand as
a matter of right.
EXCEPTION: WHEN DEMANDABLE AS A

MATTER OF RIGHT –
A bonus, however, is a demandable or

enforceable obligation when it is made part of
the wage or salary or compensation of the
employee.


---------------------------------------------------------
Whether or not a bonus

forms part of wages
depends upon the
circumstances and
conditions for its
payment.


LAW 07172021 139
7/26/2021

SITUATION A:
---------------------------------------------------------
• THE AMOUNT TAKEN FROM THE ANNUAL

NET INCOME OF THE COMPANY IS GIVEN TO
THE EMPLOYEES AT THE END OF THE YEAR
• THE AMOUNT IS NOT FIXED BUT
DEPENDENT ON THE COMPANY’S NET
INCOME
• PAYMENT WAS DISCRETIONARY ON THE
PART OF THE CHAIRMAN AND THE
PRESIDENT.


---------------------------------------------------------
IS THE YEAR-
END LUMP-
SUM
PAYMENT
PART OF THE
SALARY, OR A
BONUS?


LAW 07172021 140
7/26/2021

---------------------------------------------------------
ANSWER:
THIS IS A BONUS, NOT

FORMING PART OF THE
WAGES/SALARY.
(PROTACIO VS. LAYA MANANGHAYA CASE)


---------------------------------------------------------
If it is additional compensation
which the employer promised
and agreed to give without any
conditions imposed for its
payment, such as success of
business or greater production
or output, then it is part of the
wage.


LAW 07172021 141
7/26/2021

---------------------------------------------------------
But if it is paid only if profits are

realized or if a certain level of
productivity is achieved, it can not
be considered part of the wage.
Where it is not payable to all but only

to some employees and only when
their labor becomes more efficient or
more productive, it is only an
inducement for efficiency, a prize
therefor, not a part of the wage.


SITUATION B:
---------------------------------------------------------
• REDUNDANCY PROGRAM IMPLEMENTED,

AND SEPARATION PAY GIVEN TO
EMPLOYEES
• SEPARATION PAY INCLUDED PAYMENT OF
ACCRUED VACATION LEAVE AND 50%
UNUSED SICK LEAVE PLUS 3 MOS SALARY
FOR EVERY YEAR OF SERVICE PLUS
ADDITIONAL CASH IN LIEU OF BENEFITS
PROVIDED BY COMPANY


LAW 07172021 142
7/26/2021

---------------------------------------------------------
• TWO EMPLOYEES WERE TO RECEIVE

SERVICE AWARDS FOR YEARS OF SERVICE A
FEW MONTHS BEFORE THE
IMPLEMENTATION OF THE REDUNDANCY
PROGRAM.
• THEY NOW INSIST THAT THE SERVICE
AWARD (IN FORM OF MONEY AND PRO-
RATED BONUS) SHOULD LIKEWISE FORM
PART OF THEIR REDUNDANCY PAY.


---------------------------------------------------------


LAW 07172021 143
7/26/2021

ANSWER:
---------------------------------------------------------
YES, THE SERVICE AWARDS ARE GOVERNED IN THE

EMPLOYEES’ MANUAL AND HENCE, CONTRACTUAL IN
NATURE. AS SUCH, NO LONGER A BONUS BUT A BENEFIT
FORMING PART OF SALARY.
PERFORMANCE AND ANNIVERSARY BONUS MAY

HOWEVER BE PRO-RATED TO THE NUMBER OF MONTHS
ACTUALLY SERVED IN THE YEAR, FOR REASONS OF
EQUITY. (MARCOS VS. NLRC CASE)


---------------------------------------------------------
SITUATION C:
CHRISTMAS GIFT PACKAGE OR
BONUS WHICH IS STATED IN THE
COLLECTIVE BARGAINING
AGREEMENT – IS THIS A BONUS
OR PART OF THE
WAGE/SALARY?
(Lepanto case)


LAW 07172021 144
7/26/2021

---------------------------------------------------------
ANSWER: PART OF WAGE/SALARY
YES. A reading of the CBA reveals that the giving of

“Christmas gift package/bonus is without
qualification. It was not made dependent on the
company’s financial standing.
Even assuming there were business losses, it is a
benefit under a contractual stipulation which cannot
be diminished without employee’s consent.


---------------------------------------------------------


LAW 07172021 145
7/26/2021

---------------------------------------------------------
GENERAL RULE:
BONUS IS AN ACT OF
LIBERALITY AND
GENEROSITY ON PART OF
THE EMPLOYER, AND HENCE,
NOT DEMANDABLE AS A
MATTER OF RIGHT


---------------------------------------------------------
EXCEPTIONS WHEN BONUS CAN BE

DEMANDED AS A MATTER OF RIGHT:
1. BONUS GIVEN WITHOUT CONDITION, AND

HENCE, PART OF WAGE OR SALARY;
2. GRANT IS THE RESULT OF AN AGREEMENT
OR UNDERTAKING, SUCH AS IN A CBA
3. GIVEN ON ACCOUNT OF COMPANY POLICY
OR PRACTICE
4. GIVEN AS A MANDATE OF LAW.


LAW 07172021 146
7/26/2021

---------------------------------------------------------


---------------------------------------------------------
GENERAL RULE:
Nothing in the Labor Code shall be construed to

eliminate or in any way diminish supplements, or other
employee benefits being enjoyed at the time of
promulgation of the Labor Code.
Benefits being given to employees shall not be taken

back or reduced unilaterally by the employer because
the benefit has become part of the employment
contract, written or unwritten


LAW 07172021 147
7/26/2021

---------------------------------------------------------
EXCEPTION:
1.IF employee also consents to the

deduction
2.To correct an error.
EXCEPTION TO THE EXCEPTION:
If the error is left uncorrected for a

reasonable period of time, it ripens into a
company policy and employees can demand
for it as a matter of right.


---------------------------------------------------------
SITUATION:
BOSTSIP ADA ISSUED A MEMORANDUM

CHANGING WORK HOURS EVERY TUESDAY AND
THURSDAY, FROM THE USUAL 9AM-5PM, TO 1PM-
8PM. MWF STILL SAME AT 9AM-5PM
REASON:
TO ENSURE WINE AND LIQUOR DELIVERY
REQUIREMENTS ARE MET EVERY MWF


LAW 07172021 148
7/26/2021

---------------------------------------------------------
THE UNION THEN

QUESTIONED THE
CHANGE IN
SCHEDULE, STATING
THE RIGHT TO
OVERTIME PAY FOR
TUESDAYS AND
THURSDAYS HAS
BEEN EFFECTIVELY
ELIMINATED OR
DIMINISHED.


---------------------------------------------------------
IS OVERTIME PAY A
BENEFIT OR AN
ADDED
COMPENSATION?


LAW 07172021 149
7/26/2021

---------------------------------------------------------
ANSWER: (Manila Jockey Club case)
NO DIMINUTION OF BENEFITS. NOTE

THAT OVERTIME PAY IS SIMPLY ADDED
COMPENSATION FOR WORK DONE BEYOND
THE 8-HOUR WORK DAY.
COMPANY HAD VALID JUSTIFICATION TO

CHANGE THE SCHEDULE OF THE
EMPLOYEES, AS A VALID EXERCISE OF
MANAGEMENT PREROGATIVES.


2013 BAR MCQ ON NON-DIMINUTION

---------------------------------------------------------
OF BENEFITS
In order to improve the Cebu service and sales, Ricardo decided to
assign some of its Makati-based employees to Cebu to train Cebu
employees and expose them to the Makati standard of service. A chef
and three waiters were assigned to Cebu for the task.
While in Cebu, the assigned personnel shared in the Cebu service

charge collection and thus received service charge benefits lesser than
what they were receiving in Makati.
If you were the lawyer for the assigned personnel, what would you
advice them to do? (1%)


LAW 07172021 150
7/26/2021

---------------------------------------------------------
(A) I would advise them to file a complaint for unlawful
diminution of service charge benefits and for payment of
differentials.
(B) I would advise them to file a complaint for illegal transfer
because work in Cebu is highly prejudicial to them in terms of
convenience and service charge benefits.
(C) I would advise them to file a complaint for discrimination in
the grant of service charge benefits.
(D) I would advise them to accept their Cebu training assignment
as an exercise of the company's management prerogative.
(E) I would advise them to demand the continuation of their
Makati-based benefits and to file a complaint under (B)above
if the demand is not heeded.


---------------------------------------------------------


LAW 07172021 151
7/26/2021

GENERAL RULE:
---------------------------------------------------------
If there is no work performed by the

employee, there can be no wage or pay
EXCEPTION:
Where the employee was able, willing, and
ready to work but was prevented by
management or was illegally locked out,
suspended or dismissed.


---------------------------------------------------------
But where the failure of employees to

work was not due to the employer’s
fault (absence or participation in
strike such as in AKLAN
COOPERATIVE CASE), the burden of
economic loss suffered by the
employers should not be shifted to
the employer. Each party must bear
his own loss.


LAW 07172021 152
7/26/2021

---------------------------------------------------------
REPUBLIC ACT NO. 11165
[20 December 2018]
TELECOMMUTING ACT


The measure could also address traffic
---------------------------------------------------------
congestion and its "tremendous effect on the

country's economy, Villanueva said.
P3.5 billion lost daily due to traffic jams: JICA


LAW 07172021 153
7/26/2021

---------------------------------------------------------
SECTION 3. Telecommuting Defined. —

As used in this Act, the term
"telecommuting" refers to a work
arrangement that allows an employee in
the private sector to work from an
alternative workplace with the use of
telecommunication and/or computer
technologies. (Telecommuting Act, Republic |||
Act No. 11165, [December 20, 2018])


---------------------------------------------------------
SECTION 4. Telecommuting Program. — An employer in the private sector
may offer a telecommuting program to its
employees on a voluntary basis, and upon such
terms and conditions as they may mutually agree upon


LAW 07172021 154
7/26/2021

---------------------------------------------------------
Provided:
• That such terms and conditions

shall not be less than the minimum
labor standards set by law, and
shall include compensable work
hours, minimum number of work
hours, overtime, rest days, and
•
entitlement to leave benefits.
H|||


---------------------------------------------------------
In all cases, the employer shall

provide the telecommuting employee
with relevant written information in
order to adequately apprise the
individual of the terms and conditions
of the telecommuting program, and
the responsibilities of the employee.


LAW 07172021 155
7/26/2021

---------------------------------------------------------
SECTION 5. Fair Treatment. — The

employer shall ensure that the
telecommuting employees are given the
same treatment as that of comparable
employees working at the employer's
premises. All telecommuting employees
shall:


---------------------------------------------------------
(a) Receive a rate of pay, including

overtime and night shift differential,
and other similar monetary benefits
not lower than those provided in
applicable laws, and collective
bargaining agreements.
(b) Have the right to rest periods,
regular holidays, and special
nonworking days.


LAW 07172021 156
7/26/2021

(c) Have the same or equivalent workload
---------------------------------------------------------
and performance standards as those of

comparable workers at the employer's
premises.
d) Have the same access to training and

career development opportunities as
those of comparable workers at the
employer's premises, and be subject to
the same appraisal policies covering
these workers.


---------------------------------------------------------
(e) Receive appropriate training on the

technical equipment at their disposal,
and the characteristics and conditions
of telecommuting.
(f) Have the same collective rights as the

workers at the employer's premises,
and shall not be barred from
communicating with workers'
representatives.


LAW 07172021 157
7/26/2021

---------------------------------------------------------
INTERNATIONAL SCHOOL VS. QUISUMBING

AND PHILEX GOLD VS. PHILEX SUPERVISORS
UNION


---------------------------------------------------------


LAW 07172021 158
7/26/2021

---------------------------------------------------------


---------------------------------------------------------
Employees who work with

substantially equal
qualifications, skill, effort and
responsibility, under similar
conditions should be paid
similar salaries (International School
Alliance of Educators vs. Quisumbing, GR
No.128845, June 1, 2000).


LAW 07172021 159
7/26/2021

---------------------------------------------------------
CHANGE IN
WORKING HOURS


REPUBLIC ACT NO. 10151 ALLOWING THE
---------------------------------------------------------
EMPLOYMENT OF NIGHT WORKERS (21

JUNE 2011)


LAW 07172021 160
7/26/2021

old provisions in the Labor Code were
---------------------------------------------------------
no longer relevant, especially as regards

the business process outsourcing industry
or call centers.


---------------------------------------------------------
OLD LAW:
Women were prohibited from
working the nightshift
between the hours of 10:00
p.m. and 6:00 a.m. of the
following day, whether with
or without compensation.
This prohibition has thus

been repealed by Republic
Act No. 10151.


LAW 07172021 161
7/26/2021

---------------------------------------------------------
Night Shift
Differential OT
Payment for work Payment for the

done during the night excess of the regular
() 8-hour work
10% of the basic 25% or 30% of the
wage basic wage


---------------------------------------------------------
WHO MAY BE ALLOWED AS
NIGHT WORKERS:
all workers who shall be employed or
permitted or suffered to work at night,
EXCEPT:
(a) pregnant women or nursing
mothers, subject to certain conditions;
and
(b) those workers employed in
agriculture, stock raising, fishing,
maritime transport and inland
navigation.


LAW 07172021 162
7/26/2021

---------------------------------------------------------
Pregnant women or
nursing mothers at
least sixteen (16)
weeks before or after
childbirth, are to be
allowed
ALTERNATIVE to
night work, such as:
(a) transfer to day
work where this is
possible; (b) the
provision of social
security benefits; or
(c) an extension of
maternity leave


---------------------------------------------------------
Pregnant women and nursing

mothers may be allowed to
work at night only if a
competent physician, other
than the company physician,
shall certify their fitness to
render night work, and
specify, in the case of
pregnant employees, the
period of the pregnancy that
they can safely work


LAW 07172021 163
7/26/2021

---------------------------------------------------------
RIGHTS OF PREGNANT WOMAN NIGHT

WORKER -- During the periods referred to above,
a woman night worker shall
• NOT be dismissed or given notice of

dismissal, EXCEPT for just or authorized causes
provided for in this Code that are not connected
with pregnancy, childbirth and childcare
responsibilities.
• NOT lose the benefits regarding her

status, seniority and access to promotion which
may attach to her regular night work position.


---------------------------------------------------------


LAW 07172021 164
7/26/2021

---------------------------------------------------------
 Right to health assessment

 Right to safe and healthful working
conditions
 Right to compel employer to provide

the following mandatory facilities
(a) Suitable first aid facilities
(b) Adequate or reasonable facilities such as sleeping or
resting quarters in the establishment
(c) Adequate transportation from the work premises to the
nearest point of their residence


---------------------------------------------------------
DOLE Department Order No. 119-12 [24 January 2012] --

Implementing Rules of RA 10151 mandates that there should always
be facilities for transportation or sleeping/resting quarters for the
night workers.
EXCEPTIONS:
• When there is already an existing company policy or CBA
providing for an equivalent or superior benefit i.e. there is already
transportation allowance;
• Start or end of work rendered does not fall between 12mn to 5am;
• Where the workplace is located in an area that is accessible twenty
four (24) hours to public transportation; and
• Insufficient number or night workers to warrant the necessity for
sleeping/resting facilities.


LAW 07172021 165
7/26/2021

---------------------------------------------------------
NON-COMPETE
CLAUSES


---------------------------------------------------------
Non-compete agreements are becoming an

increasingly popular way for employers to
try to protect themselves by:
• prohibiting or limiting their employees
and/or former employees from working for
a competitor, or
• from misappropriating or divulging trade
secrets or other proprietary data, or
•unfairly solicit former customers to their
own benefit, to the prejudice of the
employer.


LAW 07172021 166
7/26/2021

---------------------------------------------------------
Both Philippine and American courts also

recognize the need to protect the employer’s
interests in trade secrets and customer
contacts.
This must be so, because the former employee –
in whom the employer had invested time,
training and other resources -- could potentially
cause significant business losses to the
employer if he/she is allowed to work with a
competitor or set up his/her own business upon
resignation or termination from the employer’s
business.


WHAT IF THE PRODUCTS

---------------------------------------------------------
WERE NOT IN DIRECT

COMPETITION:


LAW 07172021 167
7/26/2021

---------------------------------------------------------
AVON COSMETICS VS. LETICIA

LUNA, GR No. 153674, 20 Dec 2006
Leticia Luna was a Supervisor at Avon,
where the arrangement was that she will
purchase products from company
exclusively for resale on retain. She was
eventually invited by former Avon employee
to join Sandre Philippines as a Group
Franchise Director, to sell vitamins and food
supplements.


---------------------------------------------------------
Issue: Valid termination or

unfair competition?
There is nothing invalid or contrary to public
policy either in the objectives sought to be
attained by paragraph 5, i.e., the exclusivity
clause, in prohibiting respondent Luna, and
all other Avon supervisors, from selling
products other than those manufactured by
petitioner Avon.


LAW 07172021 168
7/26/2021

---------------------------------------------------------
Such prohibition is
neither directed to
eliminate the
competition like
Sandré Phils., Inc. nor
foreclose new entrants
to the market but to
safeguard the network
that it has cultivated
through the years.


---------------------------------------------------------
It was not by chance that Sandré Philippines,

Inc. made respondent Luna one of its Group
Franchise Directors. It doesn’t take a genius to
realize that by making her an important part of
its distribution arm, Sandré Philippines, Inc., a
newly formed direct-selling business, would
be saving time, effort and money as it will no
longer have to recruit, train and motivate
supervisors and dealers


LAW 07172021 169
7/26/2021

---------------------------------------------------------
STIPULATIONS
AGAINST MARRIAGE
AND OTHER BONA
FIDE OCCUPATIONAL
QUALIFICATIONS


---------------------------------------------------------
Art. 136, LC. Stipulation against

marriage. -- It shall be unlawful for an
employer to require as a condition of
employment or continuation of employment
that a woman employee shall not get
married, or to stipulate expressly or tacitly
that upon getting married, a woman
employee shall be deemed resigned or
separated, or to actually dismiss, discharge,
discriminate or otherwise prejudice a woman
employee merely by reason of her marriage.


LAW 07172021 170
7/26/2021

---------------------------------------------------------
Duncan Association of Detailman-PTGWO and Pedro

Tecson v. Glaxo Wellcome Philippines, Inc., G.R. No.
162994, September 17, 2004; 438 SCRA 434.


---------------------------------------------------------
Stipulation in employment contract:
“TO INFORM MANAGEMENT OF ANY EXISTING OR

FUTURE RELATIONSHIP BY CONSANGUINITY OR
AFFINITY WITH CO-EMPLOYEES OR EMPLOYEES
OF COMPETING COMPANIES.
IF MANAGEMENT PERCEIVES CONFLICT OF
INTEREST, WHETHER POTENTIAL OR OTHERWISE,
POSSIBILTY OF TRANSFER TO ANOTHER
DEPARTMENT OR PREPARATION FOR
EMPLOYMENT OUTSIDE COMPANY WITHIN SIX
MONTHS.”


LAW 07172021 171
7/26/2021

---------------------------------------------------------
Pedro Tecson, a medical
representative of Glaxo,
fell in love with Bettsy, a
Branch coordinator/
supervisor of competitor
Astra Pharma.
Even before marriage,
Tecson warned by his
superiors of the conflict of
interest. In any event,
love prevailed and Tecson
married Bettsy.


---------------------------------------------------------
ISSUE:
MAY THE COMPANY VALIDLY
IMPLEMENT THE STIPULATION
AGAINST MARRIAGE HERE?
Supreme Court upheld the validity of the

policy of a pharmaceutical company
prohibiting its employees from marrying
employees of any competitor company


LAW 07172021 172
7/26/2021

---------------------------------------------------------
The prohibition against personal or marital
relationships with employees of competitor
companies upon Glaxo’s employees was considered
reasonable under the circumstances because
relationships of that nature might compromise the
interests of Glaxo.
In laying down the assailed company policy,

Glaxo only aims to protect its interests
against the possibility that a competitor
company will gain access to its secrets and
procedures.


---------------------------------------------------------
STAR PAPER
VS. SIMBOL
G.R. No. 164774, April 12,
2006; 487 SCRA 228


LAW 07172021 173
7/26/2021

---------------------------------------------------------
Company policy:
1. New applicants will not be allowed to be hired if in
case he/she has [a] relative, up to [the] 3rd degree of
relationship, already employed by the company.
2. In case of two of our employees (both singles [sic],

one male and another female) developed a friendly
relationship during the course of their employment
and then decided to get married, one of them should
resign to preserve the policy stated above.3


---------------------------------------------------------
IS THE COMPANY POLICY

A VALID EXERCISE OF
MANAGEMENT
PREROGATIVES, OR A
VIOLATION OF THE
CONSTITUTIONAL RIGHTS
OF THE EMPLOYEES?


LAW 07172021 174
7/26/2021

---------------------------------------------------------
Where employer has not been able to prove how
marriage of two co-employees will be detrimental or
prejudicial to the business operations (BONA FIDE
OCCUPATIONAL QUALIFICATION), then policy
violates the rights of the employee under the
Constitution and the Labor Code. Not a valid exercise
of management prerogative.
Qualification to be valid, must reasonably related to
essential operation of the job; factual basis for
believing that the person meeting the qualification will
be UNABLE to properly perform the duties of the job
(Glaxo case)


---------------------------------------------------------
Under the disparate treatment analysis, the

plaintiff must prove that an employment policy is
discriminatory ON ITS FACE. No-spouse
employment policies requiring an employee of a
particular sex to either quit, transfer, or be fired are
facially discriminatory.
Example: Employment policy prohibiting the

employer from hiring wives of male employees,
but not husbands of female employees, is
discriminatory on its face.


LAW 07172021 175
7/26/2021

---------------------------------------------------------
Disparate impact analysis: the complainants

must prove that a facially neutral policy has a
disproportionate effect on a particular class.
Example: Company policy which requires the other

spouse to transfer or leave the company (without
stating who shall do so)
If the application of the policy often

disproportionately affects one sex, then this is
discriminatory


---------------------------------------------------------
RIGHT TO
SELF ORGANIZATION


LAW 07172021 176
7/26/2021

---------------------------------------------------------
COVERAGE 0F THE
LABOR CODE:
WHO ARE
INCLUDED/
EXCLUDED?


---------------------------------------------------------
WHO MAY UNIONIZE?

General Rule:
Any employee may be eligible to

join and be a member of a labor
union, beginning on his first day
of service, whether employed for
a definite period or not. (Article 292 [c],
Labor Code; See also: UST Faculty Union vs. Bitonio)


LAW 07172021 177
7/26/2021

EXCEPTIONS: WHO
---------------------------------------------------------
CANNOT UNIONIZE --
• Govt employees (incl GOCC with
original charters)
• Managerial (distinguish between
supervisory employees which can
form union but cannot join with R&F)
• Confidential employees
• Members of cooperative
• Aliens and employees of diplomatic
corps.


---------------------------------------------------------
1. GOVERNMENT EMPLOYEES -- whether

employed by the National Government or any of
its political subdivisions, including those
employed in GOCCs with original charters


LAW 07172021 178
7/26/2021

The civil service embraces ALL (Mnemonic:

---------------------------------------------------------
BRASIA) Branches, Subdivisions,

Instrumentalities and Agencies of the
Government, including government-owned
and controlled corporations with original
charters.
 Employees of GOCC without original

charter (incorporated under the
Corporation Code) are considered as
employees of the private sector


---------------------------------------------------------
J. LEONEN: GSIS FAMILY BANK EMPLOYEES UNION,v s. SEC.

CESAR L. VILLANUEVA ET.AL., G.R. NO. 210332, 23 JANUARY 2019.
Officers and employees of government-owned or controlled

corporations without original charters are covered by the Labor
Code, not the Civil Service Law.
HOWEVER, non-chartered government-owned or controlled
corporations are limited by law in negotiating economic terms
with their employees. This is because the law has provided the
Compensation and Position Classification System, which applies
to all government-owned or controlled corporations, chartered or
non-chartered.


LAW 07172021 179
7/26/2021

---------------------------------------------------------
ELEMENTS OF GOVERNMENT-OWNED OR CONTROLLED

CORPORATION:
(1) established by original charter or through the general
corporation law;
(2) vested with functions relating to public need whether
governmental or proprietary in nature; and
(3) directly owned by the government or by its instrumentality,
or where the government owns a majority of the
outstanding capital stock.
Possessing all three (3) attributes is necessary to be

classified as a government-owned or controlled
corporation


---------------------------------------------------------
Republic Act No. 10149 defined a non-chartered

government-owned or controlled corporation as a
government-owned or controlled corporation that
was organized and is operating under the
Corporation Code.
It did not differentiate between chartered and non-

chartered government-owned or controlled
corporations; hence, its provisions apply equally to
both.


LAW 07172021 180
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Republic Act No. 10149 (GOCC Governance Act of 2011)
---------------------------------------------------------
established a Governance Commission to develop a

Compensation and Position Classification System, to be
submitted for the President's approval, which shall apply to all
officers and employees of government owned or controlled
corporations, whether chartered or non-chartered. THUS:
Section 9 of Republic Act No. 10149: "Any law to the
contrary notwithstanding, no
government-
owned or controlled corporation shall be
exempt from the coverage of the
Compensation and Position
Classifcation System developed by the
[Governance Commission] under this Act."


---------------------------------------------------------
On March 22, 2016, President Aquino issued Executive Order No.
203, which approved the compensation and classification standards
and the Index of Occupational Services Framework developed and
submitted by the Governance Commission.
When it comes to collective bargaining agreements and collective

negotiation agreements in government-owned or controlled
corporations, Executive Order No. 203 unequivocally stated that
while it recognized the right of workers to organize, bargain, and
negotiate with their employers, "the Governing Boards of all covered
[government owned or controlled corporations], whether Chartered
or Non-chartered, may not negotiate with their officers and
employees the economic terms of their [collective bargaining
agreements]."


LAW 07172021 181
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---------------------------------------------------------
Thus, considering the existing law at the time, GSIS

Family Bank could not be faulted for refusing to enter
into a new collective bargaining agreement with
petitioner as it lacked the authority to negotiate
economic terms with its employees.
Unless directly challenged in the appropriate case and
with a proper actual controversy, the constitutionality
and validity of Republic Act No. 10149, as it applies to
fully government-owned and controlled non-chartered
corporations, prevail.


2. MANAGERIAL EMPLOYEES CANNOT

---------------------------------------------------------
UNIONIZE
By explicit provision of law,
managerial employees are
prohibited from unionizing.
Otherwise, the union may not
be assured of their loyalty, in
view of the evident conflict of
interest, or the possibility that
it may become a company
union.


LAW 07172021 182
7/26/2021

---------------------------------------------------------
BUT Supervisory employees may

unionize and form labor
organizations of their own,
but may not join rank-and-file
union.


---------------------------------------------------------
Sec. 8. Article 245 of the Labor Code is hereby amended to read as

follows:
“ART. 245. Ineligibility of Managerial Employees to Join any Labor

Organization; Right of Supervisory Employees. - Managerial
employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for
membership in the collective bargaining unit of the rank-and-file
employees but may join, assist or form separate collective
bargaining units and/or legitimate labor organizations of their own.
The rank and file union and the supervisors’ union operating within the same
establishment may join the same federation or national union.”


LAW 07172021 183
7/26/2021

---------------------------------------------------------
Q: Can a supervisory union affiliate with a Federation with rank-

and-file unions?
A: Yes. Article 255 had been amended by Congress under Rep. Act No. 9481 to
read as follows:
“ART. 255. Ineligibility of Managerial Employees to Join any Labor Organization;

Right of Supervisory Employees. - Managerial employees are not eligible to join,
assist or form any labor organization. Supervisory employees shall not be
eligible for membership in the collective bargaining unit of the rank-and-file
employees but may join, assist or form separate collective bargaining units
The rank and file
and/or legitimate labor organizations of their own.
union and the supervisors’ union operating within the same
establishment may join the same federation or national
union.”


---------------------------------------------------------
3. CONFIDENTIAL EMPLOYEES --
Confidential employees are those who:

(1) assist or act in a confidential
capacity, (2) to persons who formulate,
determine, and effectuate management
policies in the field of labor relations.
*Access to confidential information

relating to labor matters
.


LAW 07172021 184
7/26/2021

---------------------------------------------------------
The two criteria are cumulative, and both must be met if

an employee is to be considered a confidential employee
— e.g., the confidential relationship must exist between
the employee and his supervisor, and the supervisor
must handle the prescribed responsibilities relating to
labor relations. The exclusion from bargaining units of
the employees who, in the normal course of their duties,
become aware of management policies relating to labor
relations is a principal objective sought to be
accomplished by the “confidential employee rule.”
Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery vs. Asia Brewery, G.R. No.
162025, 03 August 2010


---------------------------------------------------------
Article 255 of the Labor Code does not directly prohibit confidential
employees from engaging in union activities.
However, underthe doctrine of necessary implication, the

disqualification of managerial employees equally applies
to confidential employees.
The confidential-employee rule justifies exclusion of confidential employees
because in the normal course of their duties they become aware of management
policies relating to labor relations. It must be stressed, however, that when the
employee does NOT have access to confidential labor relations information, there
is no legal prohibition against confidential employees from forming, assisting, or
joining a union.


LAW 07172021 185
7/26/2021

---------------------------------------------------------
Where employee’s access to confidential labor relations

information is merely incidental, but not central, to the discharge
of his duties and responsibilities, then the employee is NOT a
confidential employee and cannot be excluded from the
bargaining unit.
It must be borne in mind that Section 3 of Article XIII of the 1987

Constitution mandates the State to guarantee to “all” workers the
right to self-organization. Hence, confidential employees who
may be excluded from bargaining unit must be strictly defined so
as not to needlessly deprive many employees of their right to
bargain collectively through representatives of their choosing.”
(San Miguel Corp. Supervisors and Exempt Employees Union vs. Laguesma, 277 SCRA 370
[1997]). (Emphasis ours.)


---------------------------------------------------------
EXAMPLES OF CONFIDENTIAL EMPLOYEES
Division secretaries, all staff of General Management, Personnel

and Industrial Relations Department, Secretaries of Audit, EDP
and Financial Systems. (Philips Industrial Development, Inc. vs. NLRC, 210 SCRA 339 [1992]).
 Legal Secretaries (Pier 8 Arrastre & Stevedoring Services, Inc. vs. Roldan-Confesor, 241 SCRA
294 [1995]).
 Executive secretaries of the General Manager and the executive

secretaries of the Quality Assurance Manager, Product
Development Manager, Finance Director, Management System
Manager, Human Resources Manager, Marketing Director,
Engineering Manager, Materials Manager and Production
Manager. (Metrolab Industries, Inc. vs. Roldan-Confesor, 254 SCRA 182 [1996]).


LAW 07172021 186
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---------------------------------------------------------
4. EMPLOYEES WHO ARE MEMBERS OF A

COOPERATIVE
Rationale: A cooperative is different from an ordinary
business concern, inasmuch as its owners are
likewise the ones who run and operate the business
themselves. Hence, incongruous situation where the
owners will just bargain with themselves or their co-
workers (who are also co-owners). However, this will
not apply insofar as it involves employees of the
cooperative who are not owners or members thereof.


---------------------------------------------------------
Note however SSS VS. ASIAPRO COOPERATIVE:
While members of a cooperative cannot form

unions and bargain with themselves, they are to be
considered as employees with respect to SSS
coverage because the Cooperative acts as an
independent contractor vis-à-vis principal clients
they secure, and an employer-employee
relationship actually exists between respondent
cooperative and its owners-members.


LAW 07172021 187
7/26/2021

---------------------------------------------------------
5. EMPLOYEES OF INTERNATIONAL
ORGANIZATIONS OR SPECIALIZED AGENCIES
WHICH ARE REGISTERED WITH THE UNITED
NATIONS AND WHICH ENJOYS DIPLOMATIC
IMMUNITY.
The grant of immunity from local jurisdiction to

ICMC and IRRI is clearly necessitated by their
international character and respective purposes.
The objective is to avoid the danger of partiality
and interference by the host country in their
internal workings. International Catholic Migration Commission vs.
Calleja, G.R. No., 89331, 28 September 1990; and Kapisanan ng Manggagawa at
TAC sa IRRI, etc. vs. Secretary of Labor, G.R. No. 85750, 28 September 1990


---------------------------------------------------------
The exercise of jurisdiction by the Department of Labor

in these instances would defeat the very purpose of
immunity, which is to shield the affairs of international
organizations, in accordance with international practice,
from political pressure or control by the host country to
the prejudice a member States of the organization, and
to ensure the unhampered performance of their
functions. International Catholic Migration Commission vs. Calleja, G.R.
No., 89331, 28 September 1990; and Kapisanan ng Manggagawa at TAC sa
IRRI, etc. vs. Secretary of Labor, G.R. No. 85750, 28 September
1990


LAW 07172021 188
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---------------------------------------------------------
6. ALIENS WITHOUT VALID WORKING

PERMITS; AND NO RECIPROCITY (Department
Order No. 9 [1997], Rule II, Sec. 2)


---------------------------------------------------------
WHAT ABOUT
SECURITY GUARDS?

LAW 07172021 189
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---------------------------------------------------------
NOTE: NO MORE PROHIBITION AGAINST

SECURITY GUARDS JOINING THE UNIONS
AS OF 1989
“On December 24, 1986, Pres. Corazon C. Aquino

issued E.O No. 111 which eliminated the above-
cited provision on the disqualification of security
guards.


---------------------------------------------------------
While therefore under the old rules, security guards were

barred from joining a labor organization of the rank and
file, under RA 6715 (MAR. 2 1989), they may now freely join a
labor organization of the rank and file or that of the
supervisory union, depending on their rank.
By accommodating supervisory employees, the Secretary of Labor

must likewise apply the provisions of RA 6715 to security guards by
favorably allowing them free access to a labor organization,
whether rank and file or supervisory, in recognition of their
constitutional right to self-organization.” Manila Electric Co. v. Secretary of
DOLE, G.R. No. 91902, 20 May 1991, 274 PHIL 549-564


LAW 07172021 190
7/26/2021

---------------------------------------------------------


---------------------------------------------------------
• The
creation of a Union is NOT an act of disloyalty to the
employer
• right to use all LAWFUL means of communicating with
employees, and to persuade them to join
• union may impose obligations upon its members, viz.,
payment of union dues
• right to expel members who commit acts inimical to the
interests of the union
• right to be certified as exclusive bargaining agent
• right to make union security arrangements


LAW 07172021 191
7/26/2021

---------------------------------------------------------
DEFINITIONS AND DISTINCTIONS:
1. LABOR ORGANIZATION vs. LEGITIMATE

LABOR
- ORGANIZATION
2. UNION VS APPROPRIATE BARGAINING
UNIT
3. LEGITIMATE LABOR ORGANIZATION vs.
COMPANY UNION vs. FEDERATION
:


Question:
---------------------------------------------------------
What is the effect of registration?

Answer:
The labor organization or workers’ association shall
be deemed registered and vested with legal
personality on the date of issuance of its certificate
or registration. Such legal personality cannot
thereafter be subject to collateral attack, by may be
questioned only in an independent petition for
cancellation in accordance with these Rules (Tagaytay
Highlands case)


LAW 07172021 192
7/26/2021

---------------------------------------------------------
Question:
What is the effect if the union is not registered as a
legitimate labor organization?
Answer:
A union which is not registered with the BLR, is not
considered a legitimate labor organization. As such, it
will not possess and acquire, in the first place, legal
personality to enforce its constitution and by-laws,
much less the right and privilege under the Labor Code
to organize and affiliate chapters or locals within its
group. (TROPICAL HUT, supra., 181 SCRA 173)


---------------------------------------------------------
4. THE INCLUSION OF UNION MEMBERS

OF EMPLOYEES OUTSIDE THE
BARGAINING UNIT NO LONGER A
GROUND FOR CANCELLATION OF
UNION REGISTRATION, CONTARY TO THE
IMPLICATION IN PREVIOUS SUPREME COURT DECISIONS
IN TOYOTA MOTOR AND TAGAYTAY HIGHLANDS CASES.


LAW 07172021 193
7/26/2021

---------------------------------------------------------
Republic Act No. 9481, Sec. 9. A new provision,

Article 256. is inserted into the Labor Code to read as follows:
“ART. 256. Effect of Inclusion as Members of Employees

Outside the Bargaining Unit. - The inclusion as union
members of employees outside the bargaining unit shall
not be a ground for the cancellation of the registration of
the union. Said
employees are
automatically deemed removed from the
list of membership of said union.”


---------------------------------------------------------


LAW 07172021 194
7/26/2021

---------------------------------------------------------
“ART. 247. Grounds for cancellation of union registration. - The
following may constitute grounds for cancellation of union
registration:
(a) Misrepresentation, false statement or fraud in connection with the

adoption or ratification of the constitution and by-laws or amendments
thereto, the minutes of ratification, and the list of members who took
part in the ratification;
(b) Misrepresentation, false statements or fraud in connection with the

election of officers, minutes of the election of officers, and the list of
voters;
(c) Voluntary dissolution by the members. (new mode)



---------------------------------------------------------
Republic Act No. 9481 amended ART. 239 of the

Labor Code on grounds for cancellation of union
registration
There are now FEWER grounds for cancellation of

union registration.
Under the new law, there are ONLY THREE

GROUNDS allowed, whereas the old law provides
for at least seventeen (17) different grounds for
cancellation.


LAW 07172021 195
7/26/2021

---------------------------------------------------------
Failure to comply with reportorial requirements shall no longer be a
ground for cancellation of union registration, but shall subject errant
officers/members to penalty.
“ART. 252 [242-A]. Reportorial Requirements. - The following are documents required to be
submitted to the Bureau by the legitimate labor organization concerned:
(a) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the list
of members who took part in the ratification of the constitution and by-laws within thirty (30)
days from adoption or ratification of the constitution and by-law or amendments thereto;
(b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days
from election;
(c) Its annual financial report within thirty (30) days after the close of every fiscal year; and
(d) Its list of members at least once a year or whenever required by the Bureau.
Failure to comply with the above requirements shall not be a ground for cancellation of union
registration but shall subject the erring officers or members to suspension, expulsion from
membership, or any appropriate penalty.”


---------------------------------------------------------
The inclusion of union members of employees

outside the bargaining unit no longer a ground
for cancellation of union registration.
Republic Act No. 9481, Sec. 9. -- A new provision, Article 256 [245-
A] is inserted into the Labor Code to read as follows:
“ART. 256 [245-A]. Effect of Inclusion as Members of Employees

Outside the Bargaining Unit. - The inclusion as union members of
employees outside the bargaining unit shall not be a ground for
the cancellation of the registration of the union. Said employees
are automatically deemed removed from the list of membership of
said union.”


LAW 07172021 196
7/26/2021

---------------------------------------------------------
ADA’S NOTES:
Implication of above is that the Union must still be
allowed to exist, notwithstanding violations by the Union
officers.
If at all, Union members and concerned parties are not

without any remedy, inasmuch as they may file the
necessary administrative cases against the union officers
(Art. 252, Labor Code).
Note further: Nothing in law which prohibits filing criminal

and civil cases in the regular courts, whenever applicable.


---------------------------------------------------------


LAW 07172021 197
7/26/2021

---------------------------------------------------------
Sec. 6. A new provision, Article 239-A is inserted

into the Labor Code to read as follows:
“ART. 248. Voluntary Cancellation of Registration. - The registration
of a legitimate labor organization may be cancelled by the
two-thirds of its
organization itself. Provided, That at least
general membership votes, in a meeting duly called

for that purpose to dissolve the organization: Provided, further, That
an application to cancel registration is thereafter submitted by the
board of the organization, attested to by the president thereof.”


---------------------------------------------------------
INTER-UNION AND
INTRA-UNION DISPUTES
(DOLE Dept. Order No. 40-03, series of 2003)


LAW 07172021 198
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---------------------------------------------------------
1. WHAT ARE INTER OR INTRA-UNION DISPUTES:

(sec 1&2)
(a) cancellation of registration of a labor organization filed by

its members or by another labor organization;
(b) conduct of election of union and workers’ association
officers/nullification of election of union and workers’
association officers;
(c) audit/accounts examination of union or workers’
association funds;
(d) deregistration of collective bargaining agreements;


---------------------------------------------------------
(e) validity/invalidity of union affiliation or

disaffiliation;
(f) validity/invalidity of acceptance/non-
acceptance for union membership;
(g) validity/invalidity of impeachment/expulsion
of union and workers association officers and
members;
(h) validity/invalidity of voluntary recognition;


LAW 07172021 199
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---------------------------------------------------------
(i) opposition to application for union and CBA

registration;
(j) violations of or disagreements over any
provision in a union or workers’ association
constitution and by-laws;
(k) disagreements over chartering or registration of
labor organizations and collective bargaining
agreements;
(l) violations of the rights and conditions of union
or workers’ association membership;


---------------------------------------------------------
(m) violations of the rights of legitimate labor

organizations, except interpretation of collective
bargaining agreements;
(n) such other disputes or conflicts involving the rights
to self-organization, union membership and
collective bargaining –
(1) between and among legitimate labor organizations;

(2) between and among members of a union or workers’
association.


LAW 07172021 200
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---------------------------------------------------------
Other related labor relations disputes shall

include any conflict between a labor union
and the employer or any individual, entity or
group that is not a labor organization or
workers’ association.
This includes: (1) cancellation of registration

of unions and workers associations; and (2) a
petition for interpleader.


---------------------------------------------------------
WHAT IS THE NATURE OF THE

RELATIONSHIP BETWEEN THE
LEGITIMATE LABOR
ORGANIZATION AND THE
FEDERATION TO WHICH IT IS
AFFILIATED?


LAW 07172021 201
7/26/2021

---------------------------------------------------------
LOCAL CHAPTER OR LEGITIMATE

LABOR ORG: PRINCIPAL
MOTHER FEDERATION: AGENT


---------------------------------------------------------
The Court explained the nature of the relationship between a
mother union/federation and a local union, thus:
“At this juncture, it is important to clarify the relationship

between the mother union and the local union. In the case of
Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc.
(66 SCRA 512 [1975]), the Court held that the mother union,
acting for and in behalf of its affiliate, had the status
of an agent while the local union remained the basic
unit of the association, free to serve the common
interest of all its members subject only to the
restraints imposed by the constitution and by-laws of
the association…


LAW 07172021 202
7/26/2021

---------------------------------------------------------
The same is true even if the local union is not a

legitimate labor organization. Conformably, in the
above-cited case the Court ruled that the mother
federation was a mere agent and the local
chapter/union was the principal, notwithstanding
the failure of the local union to comply with the
procedural requirements that would make it a
legitimate labor organization.” (Filipino Pipe and Foundry
Corp. vs. NLRC, G.R. No. 115180, November 16, 1999, citing Progressive
Development Corporation vs. Secretary, Department of Labor and
Employment, G.R. No. 96425, 04 February 1992).


---------------------------------------------------------
WHEN CAN THE LOCAL UNION DISAFFILIATE FROM THE MOTHER

UNION?
GENERAL RULE: A labor union may disaffiliate from the mother union to form a local or
independent union only during the 60-day freedom period immediately preceding the expiration
of the CBA.
EXCEPTION:
Even before the onset of the freedom period (and despite the closed-shop provision in the CBA
between the mother union and management) disaffiliation may still be carried out, but such
disaffiliation must be effected by a majority of the members in the bargaining unit.
This happens when there is a substantial shift in allegiance on the part of the majority of the
members of the union. In such a case, however, the CBA continues to bind the members of the
new or disaffiliated and independent union up to the CBA’s expiration date.”


LAW 07172021 203
7/26/2021

---------------------------------------------------------
WHAT HAPPENS TO EXISTING CBAS IN CASE OF

DISAFFILATION?
ANSWER: SUBSTITUTIONARY DOCTRINE will apply.


---------------------------------------------------------
SUBSTITUTIONARY DOCTRINE is a principle in labor law which

states that even during the effectivity of a collective bargaining
agreement executed between the employer and employees thru their
agent, the employees can change said agent but the contract
continues to bind them up to its expiration date.
They may bargain however for the shortening of said expiration date.
The principle applies to a situation when there occurs a shift in employees’ union
allegiance after the execution of a collective bargaining contract. (Benguet Consolidated,
Inc. vs. BCI Employees & Workers Union, 23 SCRA 471 [1968]; cited in Philippine Law Dictionary by Moreno, 2nd
Edition.)


LAW 07172021 204
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---------------------------------------------------------
Refers to the PROCESS OF DETERMINING

through secret ballot, THE SOLE AND
EXCLUSIVE REPRESENTATIVE OF THE
EMPLOYEES in an appropriate bargaining unit
for purposes of collective bargaining or
negotiation. [Dept. Order No. 40-03, Rule 1 S1 (h)]


WHAT IS THE ROLE OF THE EMPLOYER

---------------------------------------------------------
DURING CERTIFICATION ELECTIONS (PT&T vs.

Laguesma, 233 SCRA 452)
GENERAL RULE:
NONE. It is a well-settled rule
that an employer has no
standing to question a
certification election since this
is the sole concern of the
workers.


LAW 07172021 205
7/26/2021

---------------------------------------------------------
“REPUBLIC ACT NO. 9481 VIZ., ART. 271. Employer as

Bystander. - In all cases, whether the petition for certification
election is filed by an employer or a legitimate labor
organization, the employer shall not be considered a party
thereto with a concomitant right to oppose a petition for
certification election.
The employer’s participation in such proceedings shall be
limited to:
(1)being notified or informed of petitions of such nature; and
(2)submitting the list of employees during the pre-election
conference should the Med-Arbiter act favorably on the
petition


EXCEPTION:
---------------------------------------------------------
The only exception to this rule is where the employer has to

file the petition for certification election itself pursuant to
Art. 270 of the Labor Code, because it was requested to
bargain collectively.
MAJORITY
UNION
EMPLOYER
MINORITY UNION


LAW 07172021 206
7/26/2021

But, other than this instance, the choice of a
---------------------------------------------------------
collective bargaining agent is purely the internal

affair of labor.
UNION OR NO UNION?
INDEPENDENT OR
AFFILIATED?


SOLE AND EXCLUSIVE

---------------------------------------------------------
BARGAINING
REPRESENTATIVE (SEBA)
NOTE: This is allowed only if there is no other
legitimate labor organization operating within the
bargaining unit – Dept Order No. 9, Rule X, Sec. I (c); Dept Order No. 40-
03, Rule VII
WHO HAS POWER TO RECOGNIZE?

REGIONAL DIRECTOR, provided legitimate
labor org complies with requirements


LAW 07172021 207
7/26/2021

---------------------------------------------------------
1. NAME AND ADDRESS OF THE LLO

2. NAME AND ADDRESS OF COMPANY
3. BARGAINING UNIT SOUGHT TO BE REPRESENTED
4. APPROXIMATE NUMBER OF EMPLOYEES IN BARGAINING UNIT
5. MAJORITY OF #4 SUPPORT THE CERTIFICATION AS
SEBA OF THE PETITIONING UNION
6. NO OTHER LEGITIMATE LABOR ORGANIZATION OPERATING
WITHIN THE BARGAINING UNIT
DOCUMENTS DULY CERTIFIED BY UNION PRESIDENT



SEBA PROCEDURE IF THERE IS NO CBA

---------------------------------------------------------
(UNORGANIZED) AND ONLY ONE LLO

• REGIONAL DIRECTOR TO CALL FOR CONFERENCE
WITHIN FIVE (5) DAYS
• UNION TO SUBMIT NAMES OF EMPLOYEES IN THE APP

BARGAINING UNIT WHICH SUPPORT THE CERTIFICATION
AS SEBA, WHICH MUST BE AT LEAST A MAJORITY OF THE
NUMBER OF EMPLOYEES IN THE BARGAINING UNIT
•
• CERTIFICATION UNDER OATH BY PRESIDENT OF
REQUESTING UNION ARE TRUE AND CORRECT BASED ON
PERSONAL KNOWLEDGE


LAW 07172021 208
7/26/2021

---------------------------------------------------------
IF REQUESTING UNION
FAILS TO COMPLY WITH
REQUIREMENTS, THEN
ORDER FOR THE HOLDING
OF CERTIFICATION
ELECTIONS


---------------------------------------------------------
IF REQUESTING UNION COMPLIES

WITH REQUIREMENTS, THEN
CERTIFIED UNION OR LOCAL SHALL
ENJOY ALL RIGHTS AND
PRIVILEGES OF AN EXCLUSIVE
BARGAINING AGENT IN THE
COVERED BARGAINING UNIT.


LAW 07172021 209
7/26/2021

---------------------------------------------------------
• POSTING OF SEBA CERTIFICATION FOR 15
CONSECUTIVE DAYS IN TWO CONSPICUOUS
PLACES IN THE ESTABLISHMENT
• CERTIFICATION SHALL OPERATE TO BAR ANY

PETITION FOR CE FOR PERIOD OF ONE (1) YEAR
FROM ISSUANCE.
• UPON EXPIRATION, ANY LLO MAY FILE A

PETITION FOR CE, UNLESS A CBA HAS BEEN
EXECUTED AND REGISTERED


---------------------------------------------------------


LAW 07172021 210
7/26/2021

---------------------------------------------------------


---------------------------------------------------------
REASON WHY YOU NEED TO

KNOW WHO MAJORITY UNION IS:
EMPLOYER IS NOT UNDER

OBLIGATION TO BARGAIN WITH
ANY UNION, EXCEPT THE
MAJORITY UNION


LAW 07172021 211
7/26/2021

---------------------------------------------------------
CERTIFICATION ELECTION IS THE BEST WAY TO FIND

OUT WILL OF THE EMPLOYEES
EXCEPTION:
1. CONSENT ELECTION
2. DIRECT CERTIFICATION
3. SOLE AND EXCLUSIVE BARGAINING AGENT
(PREV VOLUNTARY RECOGNITION), DOLE DEPT ORDER NO. 40-1-
15 S 2015


---------------------------------------------------------
DAN ADA ABAD 2021 VILLASIS BAR REVIEW CRITICAL DEAN ADA ABAD 2021 VILLASIS BAR REVIEW424
AREAS IN LABOR LAW CRITICAL AREAS IN LABOR LAW

LAW 07172021 212
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---------------------------------------------------------


---------------------------------------------------------
1. A MAJORITY OF THE MEMBERS

OF THE APPROPRIATE
BARGAINING UNIT MUST HAVE
CAST THEIR VOTE
2. THE UNION WHICH GETS A
MAJORITY OF THE VALID VOTES
CAST, THERE BEING A VALID
ELECTION, WINS.


LAW 07172021 213
7/26/2021

---------------------------------------------------------
A. REQUIREMENT FOR A
VALID ELECTION
To have a valid election, at least a

majority of all eligible voters in the
appropriate unit must have cast their
votes.


---------------------------------------------------------
QUESTION:
MAY NON-UNION MEMBERS BE ALLOWED TO

PARTICIPATE IN THE CERTIFICATION
ELECTIONS?
ANSWER:
YES. Base is not limited to the members of the

union, but may include non-members, as long as
part of the bargaining unit.


LAW 07172021 214
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---------------------------------------------------------
MAY DISMISSED EMPLOYEES BE

ALLOWED TO VOTE?
YES. DO#40, R9 s5. -- An employee who has been

dismissed from work but has contested the legality of
the dismissal in a forum of appropriate jurisdiction at
the time of the issuance of the order for the conduct
of a certification election shall be considered a
qualified voter, unless his/her dismissal was declared
valid in a final judgment at the time of the conduct of
the certification election


---------------------------------------------------------
IN CASE OF DISAGREEMENT OVER

ELIGIBILITY OF VOTERS, WHAT WILL BE
DONE?
In case of disagreement over the voters’ list or over the
eligibility of voters, all
contested voters shall
be allowed to vote. But their votes shall be
segregated and sealed in individual envelopes in
accordance with Sections 10 and 11 of this Rule.


LAW 07172021 215
7/26/2021

---------------------------------------------------------
SITUATION:
Example: 100 in the voters list.

UNION A = 40
UNION B = 5
NO UNION = 2
The rest stayed at home and did not vote.
Hence: only 47 voted.
Question: Who won?



---------------------------------------------------------
REQUIREMENT FOR THE

CERTIFICATION OF THE UNION
(DEPT. ORDER NO. 9, RULE 11, SEC. 12)
The Union which obtained a majority of the

valid votes cast by the eligible voters
shall be certified as the sole and exclusive
bargaining agent of all the workers in the
appropriate unit.


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SITUATION:
---------------------------------------------------------
Example: 100 voters in the list

UNION A = 40
UNION B = 5
NO UNION = 2
Ten were declared illegal votes. The rest stayed
at home and did not vote.
Question: Who won?



---------------------------------------------------------
RUN-OFF ELECTIONS, REQUISITES:

Dept. Order No. 9,Rule XIII
1. Between three or more choices

2. FIRST MAJORITY RULE complied with
3. SECOND MAJORITY RULE not complied with ---
No choice receiving a majority of the valid votes
cast;
4. The total number of votes for all contending
unions is at least 50% of the number of votes
cast;
5. Between the labor unions receiving the two
highest number of votes.


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---------------------------------------------------------
SITUATION:
Example: 100 voters in voter’s list. All voted and cast their votes.
UNION A = 24
UNION B = 15
UNION C = 10
NO UNION = 5
Total: 54 valid votes. The rest of the ballots were declared astray or
illegal votes.
Question 1: Is the election valid?

Question 2: Who won?
Question 3. Will there be run-off election?


---------------------------------------------------------
STRIKES, PICKETING
AND LOCK-OUTS


LAW 07172021 218
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---------------------------------------------------------


---------------------------------------------------------
2. REQUISITES OF A VALID STRIKE:
(a) Must have a lawful purpose;
(b) Must be conducted through lawful

means; and
(c) Must with the be in compliance
procedural requirements under the
Labor Code


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---------------------------------------------------------
UNFAIR
LABOR
PRACTICES


Note 1: What are examples of Unfair

---------------------------------------------------------
Labor Practices (ULP) under Articles

259-260, LC?
(1) interference, restraint or coercion of the
employees in their exercise of right to self-
organization;
(2) yellow-dog contracts, e.g., stipulation
requiring employee not to join unions, or for
employee to withdraw from union as condition for
continued employment;


LAW 07172021 220
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---------------------------------------------------------
(3) refusal to collectively

bargain;
(4) economic inducement and/or discrimination

in regard to wages, hours of work, in order to
encourage/discourage union membership;


---------------------------------------------------------
(5) contracting out of services/functions being

performed by union members, where such will
interfere in the exercise of right to self-org.,
among others.
COMPARE WITH DEPT ORDER 18-2002 AND 18-A s 2011

D0\O#18-2002, Section 5 (e) Contracting out of a job, work
or service directly related to the business or operation of
the principal by reason of a strike or lockout whether
actual or imminent.


LAW 07172021 221
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---------------------------------------------------------


---------------------------------------------------------
SITUATION ONE:
PANALO MAJORITY UNION STAGES A
STRIKE ON THE GROUND THAT THE
COMPANY FAILED TO COMPLY WITH
WAGE ORDER NO. NCR-22 s. 2018, RE:
P25.00/DAY INCREASE.
IS THE STRIKE VALID?


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ANSWER: NO!
---------------------------------------------------------
Issues on wages not strikeable.

The law (RA 6727) expressly provides that
the solution regarding wage distortions
are to be referred to voluntary negotiation
or arbitration, and not by strikes, lockouts
or other concerted activities of union or
management. (Guidelines Governing Labor Relations (19 Oct. 1987)
issued by Sec. Drilon; see: Appendix “Y”, Foz Codals annotated; see also: Art.
261, LC.)


---------------------------------------------------------
SITUATION TWO:
DURING THE FREEDOM PERIOD, ASA PA
UNION QUESTIONED THE REPRESENTATION
OF PANALO UNION AND FILED A PETN FOR CE.
PANALO UNION INSISTS ON CONTINUING THE
BARGAINING WITH RAPID TASTE, TO WHICH
THE LATTER REFUSED.
MAY ASA PA UNION FILE A NOTICE OF STRIKE
ON THE BASIS OF THE ISSUE OF
REPRESENTATION? IS THIS STRIKEABLE?


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---------------------------------------------------------
Answer: No!
Inter-union or intra-union
controversies not strikeable. No
labor dispute exists between
management and labor.


---------------------------------------------------------
SITUATION THREE:
COMPANY GM TERMINATED
. ROY
IMMEDIATELY FILED A CASE FOR ILLEGAL
TERMINATION. LATER ON, PANALO
UNION CONDUCTED A STRIKE FOR
ALLEGED UNION BUSTING.
IS THIS A STRIKEABLE ISSUE?


LAW 07172021 224
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---------------------------------------------------------
Answer: No!
Cases already pending for
compulsory arbitration (labor arbiter)
not strikeable. Same reason as with
those cases arising out of grievances
for voluntary arbitration.


---------------------------------------------------------
SITUATION 4:
Is a violation of the CBA

a strikeable issue for
ULP strike?


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---------------------------------------------------------
Answer: IT DEPENDS!
Check Article 260, LC; See also: Dept. Order No. 9, Rule 22, Sec. 1.
Accordingly, VIOLATIONS OF THE CBA, EXCEPT

THOSE WHICH ARE GROSS IN CHARACTER, SHALL
NO LONGER BE TREATED AS ULP AND SHALL BE
RESOLVED AS GRIEVANCES UNDER THE CBA.
For purposes of this Article, gross violations of

the CBA shall mean flagrant and/or malicious
refusal to comply with the economic
provisions of the CBA.”


---------------------------------------------------------
RECAPITULATION: Article 278 (b); Dept. Order No. 9, Rule 12, Sec. 2
WHAT ARE NON-STRIKEABLE ISSUES?

(a) Violations of CBA which are not gross in character
shall be resolved via the Grievance Machinery;
(b) Inter-union or intra-union disputes;
(c) Issues on wages (Guidelines governing Labor Relations [19 Oct. 1987]
issued by Sec. Drilon; See: Appendix “Y” of Foz’s Labor Code; See also: Article 261, LC)
(d) Those issues which had already been brought to

voluntary or compulsory arbitration


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---------------------------------------------------------
IMPROVED
OFFER


---------------------------------------------------------
DEFINITION:
"Improved Offer Balloting" refers to a

referendum by secret ballot involving
union members on the improved offer
of the employer on or before the 30th
day of a strike.
Department Order No. 40-03 (Series Of 2003) Amending the Implementing
Rules of Book V Of the Labor Code of the Philippines


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---------------------------------------------------------
LABOR CODE, ARTICLE 280. [265]

Improved Offer Balloting. — In an effort to
settle a strike, the Department of Labor and
Employment shall conduct a referendum by secret
balloting on the improved offer of the employer on or
before the 30th day of the strike. When at least a
majority of the union members vote to accept the
improved offer, the striking workers shall immediately
return to work and the employer shall thereupon
readmit them upon the signing of the agreement (Labor
Code of the Philippines, Presidential Decree No. 442 (Amended & Renumbered),
[July 21, 2015])


---------------------------------------------------------
REDUCED
OFFER


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---------------------------------------------------------
LABOR CODE ARTICLE 280. [265] (Reduced) Offer

Balloting. – XXX In case of a lockout, the Department
of Labor and Employment shall also conduct a
referendum by secret balloting on the reduced offer
of the union on or before the 30th day of the lockout.
When at least a majority of the board of directors or
trustees or the partners holding the controlling
interest in the case of a partnership vote to accept
the reduced offer, the workers shall immediately
return to work and the employer shall thereupon
readmit them upon the signing of the agreement.
(Labor Code of the Philippines, Presidential Decree No. 442 (Amended & Renumbered),
[July 21, 2015])


WHO CAN ASSUME JURISDICTION OR

---------------------------------------------------------
CERTIFY THE DISPUTE TO THE NLRC FOR

COMPULSORY ARBITRATION?
SECRETARY OF DEPT. OF
LABOR AND EMPLOYMENT
SILVESTRE BELLO III

Department of Labor and Employment
Muralla St. cor. Gen. Luna St., Intramuros, 1002
Manila, Philippines
Hotline DOLE 2917 from your Globe or TM
mobile phones
908-2917 from your fixed-line phones for free
You can also text (SMS) us at 2910


LAW 07172021 229
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---------------------------------------------------------
Factors that have to be complied with BEFORE

Secretary may assume jurisdiction:
a) There exists a labor dispute
b) Said labor dispute is causing or likely to

cause a strike or lock-out
c) Said labor dispute involves an industry

indispensable to the national interest


QUESTION:
---------------------------------------------------------
IS IT NECESSARY THAT THERE BE A NOTICE OF STRIKE

BEFORE THE SECRETARY OF LABOR CAN ASSUME
JURISDICTION?
ANSWER: No. The Secretary of Labor is not precluded
from assuming jurisdiction over a labor dispute in a
vital industry even if there is no notice of strike or a
formal complaint. He need not wait for a notice of
strike or a formal complaint about a strike already in
progress before he could exercise the powers given to
him by law to avoid the strikes, picketing or lockouts
contemplated in the grant of power. (Saulog Transit vs. Lazaro,
128 SCRA 591.)


LAW 07172021 230
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---------------------------------------------------------
QUESTION: CAN YOU QUESTION THE

SECRETARY’S DECISION TO ASSUME
JURISDICTION?
ANSWER: NO. The Secretary of Labor has discretion

to assume jurisdiction or to certify to the NLRC on the
ground that the labor dispute is one "adversely
affecting the national interest", and said exercise of
discretion cannot be questioned. (FEATI University vs. Bautista,
18 SCRA 1191)


---------------------------------------------------------
MAY THE STRIKERS REFUSE TO COMPLY WITH THE ASSUMPTION

OR CERTIFICATION ORDER, ON THE GROUND THAT THERE IS A
PENDING MOTION FOR RECONSIDERATION QUESTIONING THE
VALIDITY OF SAID ASSUMPTION/CERTIFICATION ORDER?


LAW 07172021 231
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---------------------------------------------------------
ANSWER: NO!
Assumption and certification orders are
executory in character and are strictly to be
complied with by the parties even during the
pendency of any petition questioning their
validity. (Union of Filipro Employees., 192 SCRA 396)


---------------------------------------------------------
WHAT IS THE EFFECT OF AN ASSUMPTION

OR CERTIFICATION ORDER?
1. The intended strike or lock-out is

automatically enjoined;
2. If one has already taken place at

the time of the issuance of the
assumption or certification order,
then --


LAW 07172021 232
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---------------------------------------------------------
2.1) Striking or locked-out
workers shall immediately
return to work
2.2) Employer is required to

immediately resume
operations and readmit all
workers under the same
terms and conditions
prevailing before the strike
(status quo ante)


---------------------------------------------------------
ARE WORKERS
OBLIGED TO
RETURN TO WORK,
EVEN IF THE
ASSUMPTION
ORDER DID NOT
SAY SO?


LAW 07172021 233
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---------------------------------------------------------
ANSWER: YES!
The mere issuance of an assumption order
by the Secretary of Labor automatically
carries with it a return-to-work order, even if
the directive to return to work is not
expressly stated in the assumption order.
(Telefunken Semiconductors Employees Union-FFW vs. Court of
Appeals, 348 SCRA 565 [2000].)


---------------------------------------------------------
WHAT IS THE
EFFECT IF THE
STRIKING
WORKERS DEFY
THE RETURN-TO-
WORK ORDER?


LAW 07172021 234
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---------------------------------------------------------
ANSWER:
"A Strike that is undertaken despite the
issuance by the Secretary of Labor of an
assumption or certification order becomes
a prohibited activity and thus illegal,
pursuant to the second paragraph of Art.
264 of the Labor Code as amended (Zamboanga
Wood Products, Inc. vs. NLRC, G.R. 82088, October 13, 1989; 178 SCRA 482).


---------------------------------------------------------
The Union, officers and members, as a result, are

deemed to have lost their employment status for
having knowingly participated in an illegal act."
(Union of Filipino Employees vs. Nestle Philippines, Inc. [192 SCRA 396]; St. Scholastica
College vs. Torres, 210 SCRA 565); De Ocampo vs. NLRC, 213 SCRA 653)


LAW 07172021 235
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---------------------------------------------------------
Following an assumption or
certification order of returning to work
by the striking workers is not a matter
of option or voluntariness but of
obligation on their part. (Marcopper Mining
Corporation vs. Brillantes, 254 SCRA 595 [1996].)


---------------------------------------------------------
POSSIBLE BAR
QUESTION:
STRIKES IN
HOSPITALS


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---------------------------------------------------------
CAN THERE BE STRIKES

IN HOSPITALS?
Answer: YES, but it is

highly discouraged.


---------------------------------------------------------


LAW 07172021 237
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---------------------------------------------------------
Article 278(g), Labor Code. -- In line with the
national concern for and the highest respect accorded
to the right of patients to life and health, strikes and
lockouts in hospitals, clinics and similar
medical institutions shall, to every extent
possible, be avoided, and all serious efforts, not
only by labor and management but government as well,
be exhausted to substantially minimize, if not prevent,
their adverse effects on such life and health, through
the exercise, however legitimate, by labor of its right to
strike and by management to lockout. (Labor Code of the
Philippines, Presidential Decree No. 442 (Amended & Renumbered), [July 21, 2015])


---------------------------------------------------------
What is the duty and

obligation of the
striking union, or the
lock-outing
employer, if the
strike occurs in a
hospital?


LAW 07172021 238
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---------------------------------------------------------
SKELETAL WORKFORCE


---------------------------------------------------------
In labor disputes adversely affecting the continued
operation of such hospitals, clinics or medical
institutions, it shall be the duty of the striking union
or locking-out employer to provide and maintain
an effective SKELETAL WORKFORCE of
medical and other health personnel, whose
movement and services shall be unhampered and
unrestricted, as are necessary to 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. (Labor Code of the Philippines, Presidential Decree No. 442
(Amended & Renumbered), [July 21, 2015])


LAW 07172021 239
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---------------------------------------------------------
In such cases, therefore, the Secretary of

Labor and Employment may immediately
assume, within twenty four (24) hours
from knowledge of the occurrence of
such a strike or lockout, jurisdiction over the
same or certify it to the Commission for
compulsory arbitration. (Labor Code of the Philippines,
Presidential Decree No. 442 (Amended & Renumbered), [July 21, 2015])


---------------------------------------------------------
2019 BAR QUESTION A1 [C]:
Define, explain or distinguish

STRIKES AND LOCKOUTS


LAW 07172021 240
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---------------------------------------------------------
Strikes are any temporary stoppage of work

by the concerted action of employees as a
result of an industrial of labor dispute;
whereas, lockouts are the temporary refusal

of an employer to furnish work as a result of
an industrial or labor dispute. (Article 219 [212], par. o and
p, LC).


---------------------------------------------------------
SPECIAL ISSUES ON
LABOR RELATIONS
FEARLESS FORECASTS
ON LEONEN BAR


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1.1 CONFIDENTIAL EMPLOYEES AND

---------------------------------------------------------
THE DOCTRINE OF NECESSARY

IMPLICATION


---------------------------------------------------------
CONFIDENTIAL EMPLOYEES DEFINED:

Confidential employees are those who: (1) assist or act in a
confidential capacity, (2) to persons who formulate,
determine, and effectuate management policies in the field
of labor relations.
The two criteria are cumulative, and both must be met if an employee
is to be considered a confidential employee — e.g., the confidential
relationship must exist between the employee and his supervisor, and
the supervisor must handle the prescribed responsibilities relating to
labor relations. (San Miguel Corporation Supervisors and Exempt Employees Union vs. Laguesma, 277
SCRA 370 [1997]; See also: Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery vs. Asia Brewery, Inc. G.R.
No. 162025, 03 August 2010).


LAW 07172021 242
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---------------------------------------------------------
(b) Ineligibility of confidential employees to join, assist or

form unions; doctrine of necessary implication.
Confidential employees, by the very nature of their
functions, assist and act in a confidential capacity to, or
have access to confidential matters of, persons who
exercise managerial functions in the field of labor
relations. Therefore, the rationale behind the ineligibility
of managerial employees to form, assist or join a labor
union was held equally applicable to them.” (Philips Industrial
Development, Inc. vs. NLRC, 210 SCRA 339 [1992]; See also: Golden Farms vs. Calleja, 175 SCRA 471
[1989]; Pepsi-Cola Products Phils. vs. Sec. of Labor, supra.; San Miguel Foods, Inc. v. San Miguel Corp.
Supervisors and Exempt Union, G.R. No. 146206, 01 August 2011).


---------------------------------------------------------
This decision is also in accord with

the doctrine of necessary implication
why confidential employees are
similarly disqualified as managerial
employees to join, assist or form any
labor organization. This doctrine
states that what is implied in a
statute is as much a part thereof as
that which is expressed. (National
Association of Trade Unions)


LAW 07172021 243
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---------------------------------------------------------
(c) Access to confidential labor relations

information as a component element of a
confidential employee; explained. (San Miguel Corp.
Supervisors and Exempt Employees Union vs. Laguesma, 277 SCRA 370
[1997]).
The broad rationale behind this rule is that employees should not be
placed in a position involving a potential conflict of interests.
Management should not be required to handle labor relations matters
through employees who are represented by the union with which the
company is required to deal, and who in the normal performance of
their duties, may obtain advance information of the company’s
position with regard to contract negotiations, the disposition of
grievances, or other labor relations matters.”


---------------------------------------------------------
(d) Where employee’s access to

confidential labor relations
information is merely incidental, but
not central, to the discharge of his
duties and responsibilities, then the
employee is NOT a confidential
employee and cannot be excluded
from the bargaining unit.


LAW 07172021 244
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---------------------------------------------------------
1.2 COMMINGLING OR MIXTURE OF

MEMBERSHIP IN A UNION
a. ONLY THREE GROUNDS FOR

CANCELLATION under the new
amendments to the Labor Code.
Contrast with the old law provides for at
least fourteen (14) different grounds for
cancellation.


---------------------------------------------------------
MEMORIZE THIS:
“ART. 247 . Grounds for cancellation of union
registration. - The following may constitute grounds for
cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with
the adoption or ratification of the constitution and by-laws or
amendments thereto, the minutes of ratification, and the list of
members who took part in the ratification;
(b) Misrepresentation, false statements or fraud in connection
with the election of officers, minutes of the election of officers,
and the list of voters;
(c) Voluntary dissolution by the members.


LAW 07172021 245
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---------------------------------------------------------
b. The inclusion of union members of
employees outside the bargaining unit is no
longer a ground for cancellation of union
registration, contrary to the implication in
previous Supreme Court decisions.
“ART. 256. Effect of Inclusion as Members of

Employees Outside the Bargaining Unit. -- The
inclusion as union members of employees outside the
bargaining unit shall not be a ground for the
cancellation of the registration of the union. Said
employees are automatically deemed removed from
the list of membership of said union.”


---------------------------------------------------------
Tagaytay Highlands International Golf Club, Inc. vs. Tagaytay
Highlands Employees Union – PGTWO, 395 SCRA 699 [22
January 2003]. -- The inclusion in a union of disqualified
employees is not among the grounds for cancellation, unless
such inclusion is due to misrepresentation, false statement or
fraud under the circumstances enumerated in Sections (a) and
(c) of Article 245 of the Labor Code.
Previously Article 239 of the Labor Code.
Now overturned the following case:
Toyota Motor Philippines vs. Toyota MPC Labor Union, 268 SCRA 571
[1997]. -- A labor organization composed of both rank-and-file and
supervisory employees is no labor organization at all. It cannot, for
any guise or purpose, be a legitimate labor organization, and
consequently, cannot have the right to file a petition for CE for
purposes of collective bargaining.


LAW 07172021 246
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---------------------------------------------------------
c. Lack of mutuality or commonality of

interests among members of the
union is not a ground for cancellation
of its registration.
The only grounds on which the cancellation of a
union's registration may be sought are those
found in Article 247 (prev. Art. 239) of the Labor
Code. (De Ocampo Memorial Schools, Inc. vs. Bigkis Manggagawa sa
De Ocampo Memorial School, Inc., G.R. No. 192648, 15 March 2017
reiterating Tagaytay Highlands International Golf Club Incorporated v.
Tagaytay Highlands Employees Union-PTGW0)


d. Falsification and/or misrepresentation

---------------------------------------------------------
in the adoption of constitution and by-

laws or as a ground for cancellation of
union registration.
For fraud or misrepresentation to be valid
grounds for cancellation of union
registration, the nature of fraud and
misrepresentation must be grave and
compelling enough to vitiate the consent of
a majority of the union members. (Mariwasa
Siam Ceramics vs. Secretary of Labor, G.R. No. 183317, 21
December 2009).


LAW 07172021 247
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---------------------------------------------------------
• Discrepancy in documentation where

records reveal the admission of
additional members after the
organizational meeting but before the
registration, does not fall under fraud
and misrepresentation as would affect
union registration.


---------------------------------------------------------
“Any seeming infirmity in the application and admission of union

membership, most especially in cases of independent labor
unions, must be viewed in favor of valid membership.
As aptly found by the BLR Director, the Union already had 30
members when it applied for registration, for the admission of
new members is neither prohibited by law nor was it concealed in
its application for registration. Xxx The fact that EREU had 30
members when it applied for registration on December 19, 2005
while only 26 actually participated in the organizational meeting
(on December 6, 2005) is borne by the records. The right of
employees to self-organization and membership in a union must
not be trammeled by undue difficulties. (Eagle Ridge Golf and Country Club
vs. Court of Appeals and Eagle Ridge Employees Union [EREU], G.R. No. 178989, 18 March
2010). (Emphasis ours.)


LAW 07172021 248
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---------------------------------------------------------
• Where certificate of registration was already

issued, the burden of proof is upon
petitioner company to establish fraud.
Moreover, even if the number of members in the
application for union registration does not match the
actual membership, the same will not amount to
falsification or misrepresentation as would allow for
cancellation of union registration. -- (The Heritage Hotel
Manila, owned and operated by Grand Plaza Hotel Corporation vs.
Pinag-Isang Galing at Lakas ng mga Manggagawa sa Heritage
Manila (PIGLAS-Heritage), G.R. No. 177024, 30 October 2009;
Emphasis ours.).


---------------------------------------------------------
e. Alleged retractions of union membership looked

upon with disfavour after registration, and will not
affect union registration. --
We have in precedent cases said that the employees’ withdrawal from
a labor union made before the filing of the petition for certification
election is presumed voluntary, while WITHDRAWAL AFTER THE
FILING OF SUCH PETITION is considered to be involuntary and does
not affect the same.


LAW 07172021 249
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---------------------------------------------------------
Now then, if a withdrawal from union

membership done after a petition for
certification election has been filed
does not vitiate such petition, is it not
but logical to assume that such
withdrawal cannot work to nullify the
registration of the union? (S.S. Ventures
International, Inc. v. S.S. Ventures Labor Union [SSVLU], G.R. No.
161690, 23 July 2008, 559 SCRA 435, 443-444; Emphasis supplied by
authors.)


---------------------------------------------------------
1.3 NO MORE PROHIBITION AGAINST A NATIONAL

FEDERATION REPRESENTING BOTH THE RANK-AND-
FILE UNION AND THE SUPERVISORY UNION IN ONE
EMPLOYER UNIT. (Republic Act No. 9481 [25 May 2007], Section 8.)
“ART. 255. Ineligibility of Managerial Employees to Join any Labor Organization;

Right of Supervisory Employees. - Managerial employees are not eligible to join,
assist or form any labor organization. Supervisory employees shall not be eligible
for membership in the collective bargaining unit of the rank-and-file employees but
may join, assist or form separate collective bargaining units and/or legitimate labor
organizations of their own. The rank and file union and the supervisors’ union
operating within the same establishment may join the same federation or national
union.” (Bold supplied.)


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2. RELATIONSHIP BETWEEN THE

---------------------------------------------------------
MOTHER UNION AND THE LOCAL

UNION.
The mother union, acting for and in behalf of its
affiliate, had the status of an agent while the
local union remained the basic unit of the
association, free to serve the common interest of all
its members subject only to the restraints imposed by
the constitution and by-laws of the association… (Filipino
Pipe and Foundry Corp. vs. NLRC, G.R. No. 115180, November 16, 1999, citing
Progressive Development Corporation vs. Secretary, Department of Labor and
Employment, G.R. No. 96425, 04 February 1992).


---------------------------------------------------------
2.1Disaffiliation of the local union

from the mother union.
GENERAL RULE: A labor union may
disaffiliate from the mother union to
form a local or independent union
only during the 60-day freedom period
immediately preceding the expiration
of the CBA


LAW 07172021 251
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---------------------------------------------------------
WHAT IF DISAFFILIATION IS DONE BEFORE FREEDOM
PERIOD?
Even before the onset of the freedom period (and despite the
closed-shop provision in the CBA between the mother union and
management), disaffiliation may still be carried out, but
such disaffiliation must be effected by a majority of the
members in the bargaining unit. This happens when there is a
substantial shift in allegiance on the part of the majority of the
members of the union.
In such a case, however, the CBA continues to bind the members

of the new or disaffiliated and independent union up to the CBA’s
expiration date.” (Associated Labor Union-PTGWO vs. NLRC, 188 SCRA 123 [1990]).


---------------------------------------------------------
2.2 What happens to existing CBAs in case of

disaffilation? Substitutionary doctrine will apply.
SUBSTITUTIONARY DOCTRINE is a principle in labor law which

states that even during the effectivity of a collective bargaining
agreement executed between the employer and employees thru
their agent, the employees can change said agent but the
contract continues to bind them up to its expiration date.
They may bargain however for the shortening of said expiration
date. The principle applies to a situation when there occurs a shift
in employees’ union allegiance after the execution of a collective
bargaining contract. (Benguet Consolidated, Inc. vs. BCI Employees & Workers Union,
23 SCRA 471 [1968]; cited in Philippine Law Dictionary by Moreno, 2nd Edition.)


LAW 07172021 252
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---------------------------------------------------------
3. UNION SECURITY CLAUSES.

Union security" is a generic term, which is
applied to and comprehends "closed shop,"
"union shop," "maintenance of membership,"
or any other form of agreement which imposes
upon employees the obligation to acquire or
retain union membership as a condition
affecting employment. (PICOP Resources, Inc. (PRI) vs.
Anacleto L. Taneca et. al., G.R. No. 160828, 09 August 2010).


---------------------------------------------------------
3.1 Purpose of union security

arrangement is to give workers better
bargaining leverage, and to ensure
continued existence of the union
through enforced membership.. Xxx “Bank
of the Philippines Islands vs. BPI Employees Union-Davao Chapter, Federation of
Unions in BPI Unibank (G.R. No. 164301, August 10, 2010, En Banc),


LAW 07172021 253
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---------------------------------------------------------
3.2 TYPES OF UNION

SECURITY CLAUSES
(IDENTIFIED IN NATIONAL UNION OF WORKERS IN HOTELS,
RESTAURANTS AND ALLIED INDUSTRIES-MANILA PAVILLON
HOTEL CHAPTER VS. NLRC, G.R. NO. 179402, 30 SEPTEMBER
2008).


---------------------------------------------------------
3.2.1 Closed Shop. –
An agreement where the employer agrees that no person may be
employed in any or certain agreed departments of the enterprise
unless he or she is, becomes, and, for the duration of the agreement,
remains a member in good standing of a union entirely comprised of
or of which the employees in interest are a part. (PICOP Resources, Inc.
(PRI) vs. Anacleto L. Taneca et. al., G.R. No. 160828, 09 August 2010).
It is THE MOST PRIZED ACHIEVEMENT OF UNIONISM. IT ADDS

MEMBERSHIP AND COMPULSORY DUES. By holding out to loyal
members a promise of employment in the closed-shop, it wields
group solidarity. (Emphasis supplied). (Manila Mandarin Employees Union vs. NLRC (G.R.
No. 76989, September 29, 1987 cited in Bank of the Philippine Islands vs. BPI Employees Union-
Davao Chapter-Federation of Unions in BPI Unibank, G.R. 164301, 10 August 2010)


LAW 07172021 254
7/26/2021

---------------------------------------------------------
3.2.2 Union Shop. –
There is union shop when all new regular employees are required
to join the union within a certain period as a condition for their
continued employment. (PICOP Resources, Inc. (PRI) vs. Anacleto
L. Taneca et. al., G.R. No. 160828, 09 August 2010).
An agreement whereby the employer binds himself to keep only

union men on the payroll but the employer may hire non-union men
who must, however, join the union within a stipulated time or face
dismissal from their jobs. (Alabama vs. Philippine Packing Corporation, SP-01576, 25
June 1974, cited in Philippine Law Dictionary by Moreno, 2nd Edition.)


---------------------------------------------------------
b) Modified Union Shop Agreement. –

A union shop agreement with a provision
exempting certain employee groups from its
operation, such as old employees already with
the company at a designated date, key personnel,
persons with religious scruples in joining labor
unions. (Ibid.)


LAW 07172021 255
7/26/2021

---------------------------------------------------------
3.2.3 Maintenance of membership shop. –
There is maintenance of membership shop when

employees, who are union members as of the effective
date of the agreement, or who thereafter become
members, must maintain union membership as a
condition for continued employment until they are
promoted or transferred out of the bargaining unit, or
the agreement is terminated. (PICOP Resources, Inc. (PRI) vs. Anacleto L.
Taneca et. al., G.R. No. 160828, 09 August 2010; see also: Bank of Philippine Islands vs. BPI
Employees Union – Davao Chapter – Federation of Unions in BPI Unibank, G.R, No. 164301,
10 August 2010, En Banc.)


---------------------------------------------------------
3.2.4 Open shop –
An arrangement on recruitment whereby an

employer may hire any employee, union member or
not, but the new employee must join the union
within a specified time and remain a member in
good standing. (LABSTAT Updates of the Department of Labor and
Employment, Vol. 1 No. 12, August 1997).


LAW 07172021 256
7/26/2021

---------------------------------------------------------
3.2.5 Agency shop --
An arrangement whereby non-members

of the contracting union must pay the
union a sum equal to union dues known
as agency fees for the benefits they
received as a consequence of the
bargaining negotiations effected through
the efforts of the union. (LABSTAT Updates of the
Department of Labor and Employment, Vol. 1 No. 12, August 1997).


---------------------------------------------------------
3.3 GENERAL RULE ON COVERAGE

OF UNION SECURITY CLAUSE:
All employees in the bargaining unit

covered by a Union Shop Clause in
their CBA with management are
subject to its terms.


LAW 07172021 257
7/26/2021

EXCEPTIONS:
---------------------------------------------------------
a) employees who at the time the union shop

agreement takes effect are bona fide
members of a religious organization which
prohibits its members from joining labor
unions on religious grounds (Victoriano vs. Elizalde
Rope Workers case);
b) employees already in the service and already

members of a union other than the majority
union at the time the union shop agreement
took effect (Article 259 [e], Labor Code);


---------------------------------------------------------
c) confidential employees who are

excluded from the rank and file
bargaining unit by the doctrine of
necessary implication (Golden Farms vs. Calleja,
Philips cases); and
d) employees excluded from the union

shop by express terms of the
agreement. (Bank of the Philippine Islands vs. BPI Employees
Union - Davao Chapter - Federation of Unions in BPI Unibank, G.R. No.
164301, 10 August 2010; En Banc.).


LAW 07172021 258
7/26/2021

2018 BAR QUESTION:

---------------------------------------------------------
May "absorbed employees"

of a corporation who
merged with another
corporation be considered
as “new employees” as to
fall within the coverage of a
union shop clause
contained in its existing
Collective Bargaining
Agreement (CBA) with its
own certified labor union?


---------------------------------------------------------
CBA Provision:
New employees falling within the bargaining

unit as defined in Article I of this
Agreement, who may hereafter be regularly
employed by the Bank shall, within thirty
(30) days after they become regular
employees, join the Union as a condition of
their continued employment. It is
understood that membership in good
standing in the Union is a condition of their
continued employment with the Bank


LAW 07172021 259
7/26/2021

---------------------------------------------------------
Position of Union: Former FEBTC

employees are to be considered as
new employees of BPI for
purposes of applying the union
shop clause of the CBA.
Position of Company: Former

FEBTC employees are NOT new
employees of BPI for purposes of
applying the union shop clause of
the CBA


---------------------------------------------------------
Answer: No. The absorbed employees are to

be considered “new employees” within the ambit
of the union security clause.
In any event, it is of no moment that the former FEBTC employees

retained the regular status that they possessed while working for
their former employer upon their absorption by petitioner. This
fact would not remove them from the scope of the phrase “new
employees” as contemplated in the Union Shop Clause of the
CBA, contrary to petitioner’s insistence that the term “ new
employees” only refers to those who are initially hired as non-
regular employees for possible regular employment.


LAW 07172021 260
7/26/2021

---------------------------------------------------------
The Union Shop Clause in the CBA simply states that “new
employees” who during the effectivity of the CBA “may be
regularly employed” by the Bank must join the union within
thirty (30) days from their regularization.
There is nothing in the said clause that limits its application

to only new employees who possess non-regular status,
meaning probationary status, at the start of their
employment. Petitioner likewise failed to point to any
provision in the CBA expressly excluding from the Union
Shop Clause new employees who are “absorbed” as regular
employees from the beginning of their employment.


---------------------------------------------------------
Article 259(e) of the Labor Code

provides that membership in a
recognized collective bargaining agent
may be required as a condition for
employment “except those employees
who are already members of another
union at the time of the signing of the
collective bargaining agreement.”


LAW 07172021 261
7/26/2021

---------------------------------------------------------
Enforcement of Union security clause with
respect to employees already working at the
time CBA is made:
Union shop, as with close shop provisions should be strictly
construed against its existence.
Where there is no provision in the agreement making it a

condition of continued employment in the Company, that an old
worker should remain a member of good standing of the
contracting union, said agreement should not be extended beyond
the explicit coverage of its terms, and will not be deemed to
authorize by implication the dismissal of employees already
working before the agreement was made (San Carlos Milling Co., Inc. v.
Court of Industrial Relations, G.R. Nos. L-15453 and 15723, [March 17, 1961], 111 PHIL 323-
335, citing Confederated Sons of Labor vs. Anakan Lumber Co., 107 Phil., 915).


---------------------------------------------------------
In order that an employer may be

bound, under a collective bargaining
agreement, to dismiss employees for
non-union membership, the stipulation
to that effect must be so clear and
unequivocal as to leave no room for
doubt thereon. (Rizal Labor Union vs. Rizal Cement Co.,
Inc., supra.)


LAW 07172021 262
7/26/2021

---------------------------------------------------------
2015 LABOR BAR QUESTION: (XII)
Blank Garments, Inc. (BLANK), a clothing manufacturer, employs

more than 200 employees in its manufacturing business. Because of
its high overhead, BLANK decided to sell its manufacturing business
to Bleach Garments, Inc. (BLEACH) lock, stock and barrel which
included goodwill, equipment, and personnel. After taking on BLANK's
business, BLEACH reduces the workforce by not hiring half the
workers specifically the ones with seniority. BLANK and BLEACH are
still discerned to be sister companies with identical incorporators. The
laid-off employees sue both BLANK and BLEACH for unlawful
termination.
(a) How would you decide this case? (4%)
(b) What is the "successor employer" doctrine? (2%)


---------------------------------------------------------
Answer:
(a) I will decide the case by using the doctrine of piercing the
corporate veil, and uphold the employees.
I will adduce evidence to show that BLEACH is merely an

alter ego of BLANK; that the former is merely a farce since it
is merely an alter ego or business conduit of the latter.
Considering that BLANK and BLEACH are sister companies
with identical incorporators, it can be said that latter is so
organized and controlled and it’s merely an instrumentally,
agency, conduit or adjunct of the former. (Sarona vs. NLRC,
G.R. No. 185280, 18 January 2012.)


LAW 07172021 263
7/26/2021

---------------------------------------------------------
Answer:
(b) The successor employer doctrine is one where the transferee or

acquirer of an enterprises assumes the latter’s obligations and
liabilities in case the transferee or acquiror: 1) Expressly assumes
such obligations and liabilities; or 2) Where the transaction between
the parties is clothed or colored with bad faith. (Sundowner
Development Corp. vs. Drilon, 180 SCRA 141 [1989]). Otherwise, the
general rule is that the successor is not bound to recognize the
predecessor’s bargaining agent nor is it liable under previous
contracts, which are in personam. (E. Razon, Inc. vs. Secretary of
Labor, G.R. No. 85867, May 13, 1993)


---------------------------------------------------------
4. CHECK-OFF OF UNION
DUES, SPECIAL
ASSESSMENTS
AND AGENCY FEES:


LAW 07172021 264
7/26/2021

---------------------------------------------------------
4.1. Defined:
Union dues are regular monthly contributions
imposed by the Union upon their members, and form
part of the union funds used to finance union activities and as seed
money for services and/or benefits extended by said Union to them.
Article. 277, Labor Code. Miscellaneous provisions. - (a) All unions

are authorized to collect reasonable membership fees, union dues,
assessments and fines and other contributions for labor education
and research, mutual death and hospitalization benefits, welfare
fund, strike fund and credit and cooperative undertakings. (As
amended by Section 33, Republic Act No. 6715, March 21, 1989).


---------------------------------------------------------
4.2 Requisites for validity of union’s special

assessment. (ABS-CBN Supervisors Employees Union Members vs. ABS-CBN Broadcasting
Corp., 304 SCRA 489 [1999]).
a) authorization by a written resolution of the majority

of all the members at the general membership
meeting duly called for the purpose;
b) secretary’s record of the minutes of the meeting;
and
c) individual written authorization for check-off duly
signed by the employee concerned.


LAW 07172021 265
7/26/2021

---------------------------------------------------------
4.2.1 No deductions may be taken from the

workers who did not sign any check-off
authorization.
4.2.2 Abad notes: It is opined that the same

requisites apply for the assessment of
union dues, as inferred in Article 113 (b),
Labor Code.


---------------------------------------------------------
What if the Union’s

Board of Directors
passed a resolution for
deduction of union
dues, and ratified by
the members? Can
Management already
check-off the union
dues?


LAW 07172021 266
7/26/2021

---------------------------------------------------------
ANSWER:
No. Not valid. A mere board resolution of the

directors, and not by the majority of all the
members of the labor organization, is not
sufficient to allow deductions from the
employees’ salary. (Stellar Industrial Services, Inc. vs. NLRC, 252
SCRA 323 [1996].) A written individual authorization
duly signed by the employee is also a

condition sine qua non for such deduction.
(ibid.)


---------------------------------------------------------
4.3 Requisites for assessment of

Agency fee: (Art. 259[e], Labor Code).
a) The employee is part of the

bargaining unit;
b) He is not a member of the
union; and
c) He partook of the benefits of
the CBA.


LAW 07172021 267
7/26/2021

---------------------------------------------------------
4.3.1 Individual written

authorization is not necessary
for the collection of agency
fees. This is to avoid free-riders
who will unjustly enrich
themselves by the acceptance of
benefits negotiated by the
bargaining agent.


---------------------------------------------------------
BASIS: Article 259 (e) of the Labor Code provides that it shall
be considered an unfair labor practice xxx
“(e) To discriminate in regard to wages, hours of work and other

terms and conditions of employment in order to encourage or
discourage membership in any labor organization.
Nothing in this Code or in any other law shall stop the parties
from requiring membership in a recognized collective
bargaining agent as a condition for employment, except those
employees who are already members of another union
at the time of the signing of the collective bargaining
agreement.


LAW 07172021 268
7/26/2021

---------------------------------------------------------
Employees of an appropriate bargaining unit
who are not members of the recognized
collective bargaining agent may be assessed a
reasonable fee equivalent to the dues and other
fees paid by members of the recognized
collective bargaining agent, if such non-union
members accept the benefits under the
collective bargaining agreement: Provided, that
the individual authorization required under
Article 242, paragraph (o) of this Code shall not
apply to the non-members of the recognized
collective bargaining agent.” (Emphasis supplied.)


---------------------------------------------------------
5. Registration of the CBA operates as a

bar to the filing of a petition for
certification election during its lifetime,
except only during the freedom period.
• However, a CBA which is an arbitral

award need not be formally certified
by the BLR to constitute a bar to
certification election.


LAW 07172021 269
7/26/2021

---------------------------------------------------------
IS A CBA WHICH
IS NOT
REGISTERED,
STILL VALID AND
ENFORCEABLE?


---------------------------------------------------------
ANSWER:
YES. CBA is valid even without

registration; hence, binding between
the parties.
It simply will not bar the filing of a

petition for a certification election. (Sec.
3, Rule V, Book V, Implementing Rules)


LAW 07172021 270
7/26/2021

---------------------------------------------------------
6. DURATION OF THE CBA (Art. 265, Labor Code and

Dept. Order No. 9, Rule XIV, Secs. 3-4)
Article 265, Labor Code. Terms of a collective bargaining agreement. –

Any Collective Bargaining Agreement that the parties may enter into
shall, insofar as the representation aspect is concerned, be for a term
of five (5) years. No petition questioning the majority status of the
incumbent bargaining agent shall be entertained and no certification
election shall be conducted by the Department of Labor and
Employment outside of the sixty-day period immediately before the
date of expiry of such five-year term of the Collective Bargaining
Agreement. All other provisions of the Collective Bargaining
Agreement shall be renegotiated not later than three (3) years after its
execution.


---------------------------------------------------------
• On retroactivity; 6-month period –
Any agreement on such other provisions of the

Collective Bargaining Agreement entered into within six
(6) months from the date of expiry of the term of such
other provisions as fixed in such Collective Bargaining
Agreement, shall retroact to the day immediately
following such date.
If any such agreement is entered into beyond six

months, the parties shall agree on the duration of
retroactivity thereof.


LAW 07172021 271
7/26/2021

---------------------------------------------------------
Article 268 , last paragraph, Labor Code.

Representation issue in organized
establishments. –
At the expiration of the freedom period, the

employer shall continue to recognize the
majority status of the incumbent bargaining
agent where no petition for
certification election is filed. (Emphasis
supplied.)


---------------------------------------------------------
“Section 3. Term of representation status of

agreement; contract-bar rule. --
The representation status of the incumbent exclusive

bargaining representative which is a party to a duly
registered collective bargaining agreement shall be for a
term of five (5) years. No petition questioning the majority
status of the incumbent exclusive bargaining
representative shall be entertained and no certification
election shall be conducted by the department outside of
the sixty-day period immediately before the date of expiry
of such five-year term.


LAW 07172021 272
7/26/2021

---------------------------------------------------------
Section 4. Exception to the contract bar rule. –
Notwithstanding its registration, a collective bargaining
agreement shall not constitute a bar to a certification
election where it is found in appropriate proceedings before
the Regional Director that any of the following conditions
exist:
(a) The agreement contains provisions lower than the

standards fixed by law (sub-minimum); or
(b) The documents supporting its registration are falsified,

fraudulent or tainted with misrepresentation.”


---------------------------------------------------------
May the parties

agree to extend the
five year term of the
representation
issue? FVC Labor Union –PTGWO
vs. Sama-Samang Nagkakaisang
Manggagawa sa FVC-SIGLO (G.R. No.
176249 , 27November 2009)


LAW 07172021 273
7/26/2021

---------------------------------------------------------
ANSWER:
NO. By express provision of the above-quoted

Article 253(A), the exclusive bargaining status
cannot go beyond five years and the
representation status is a legal matter not for the
workplace parties to agree upon.


---------------------------------------------------------
In other words, despite an agreement for a CBA with a
life of more than five years, either as an original
provision or by amendment, the bargaining union’s
exclusive bargaining status is effective only for five
years and can be challenged within sixty (60) days prior
to the expiration of the CBA’s first five years. Xxx
In the event however, that the parties, by mutual

agreement, enter into a renegotiated contract with a
term of three (3) years or one which does not coincide
with the said five-year term and said agreement is
ratified by majority of the members in the bargaining
unit, the subject contract is valid and legal and
therefore, binds the contracting parties.


LAW 07172021 274
7/26/2021

---------------------------------------------------------
The same will however not adversely

affect the right of another union to
challenge the majority status of the
incumbent bargaining agent within
sixty (60) days before the lapse of the
original five (5) year term of the
CBA.” (Emphasis supplied.)


7.Automatic retroactivity of CBA benefits, Article

---------------------------------------------------------
265, Labor Code as renumbered :
7.1 If the new CBA is entered into within a six-month

period after the expiration of the old CBA, then the
wage increases and other benefits which had been
negotiated shall be made retroactive to the day
immediately following such expiration date.
7.2 If the new CBA is entered outside of the six-month

period, then the parties shall agree on the date of the
retroactivity of the negotiated wage increases and
other benefits.


LAW 07172021 275
7/26/2021

---------------------------------------------------------
7.3 A CBA which is part of an arbitral award

may be made retroactive to the date of
expiration of the previous agreement since
Article 265 of the Labor Code refers to
CBAs entered into by the parties as a result
of their mutual agreement, and not to
arbitral award. (Manila Central Line Corporation vs. Manila
Central Line Free Workers Union-National Federation of Labor, 290 SCRA 690
[1998]. Emphasis supplied.).


---------------------------------------------------------
Abad notes: The implication therefore is

that six-month retroactivity applies in the
following cases –
(a) the parties execute a CBA within the

six (6) month period from expiration of
the old CBA; or
(b) where the CBA is part of an arbitral
award arising from a decision of the
Secretary of Labor or Voluntary
Arbitrator.


LAW 07172021 276
7/26/2021

---------------------------------------------------------
8. Expiration of CBA.
8.1 Although a Collective Bargaining Agreement has

expired, it continues to have legal effect as between
the parties until a new CBA has been entered into.
(Pier 8 Arrastre & Stevedoring Services, Inc. vs. Roldan-Confessor, 241 SCRA 294 [1995].)
8.2 Even if the 5-year representation issue of the CBA

has expired, the employer is obliged to continue to
recognize the majority status of the incumbent
bargaining agent where no petition for certification
election is filed. (Article 256 [now Art. 267], last paragraph, Labor Code).


---------------------------------------------------------
9.Mandatory aspects of bargaining.
9.1 Wages, hours of work and other terms and conditions

of employment should not be below the standard
prescribed by law, award or order. (sub-minimum CBA).
9.2 CBA should include the mandatory provisions such as

grievance procedure, family planning, “no strike-no
lockout” clause, cooperative scheme, Labor
Management Council (LMC).


LAW 07172021 277
7/26/2021

---------------------------------------------------------
WHAT ARE THE TWO

KINDS OF BARGAINING?
(NEVER ASKED IN THE
BAR)
• SINGLE ENTERPRISE
BARGAINING
• MULTIPLE EMPLOYER
BARGAINING.


---------------------------------------------------------
SINGLE ENTERPRISE BARGAINING. – One where

any voluntarily recognized or certified labor union
may demand negotiations with its employer for
terms and conditions of work covering employees
in the bargaining unit concerned.
MULTIPLE EMPLOYER BARGAINING. – One where a

legitimate labor union(s) and employers may agree
in writing to come together for the purpose of
collective bargaining,


LAW 07172021 278
7/26/2021

---------------------------------------------------------
REQUIREMENTS FOR MULTIPLE-PARTY BARGAINING:
a) only legitimate labor unions who are incumbent exclusive

bargaining agents may participate and negotiate in multi- employer
bargaining;
b) only employers with counterpart legitimate labor unions who are

incumbent bargaining agents may participate and negotiate in multi-
employer bargaining; and
c) only those legitimate labor unions who pertain to employer units

who consent to multi-employer bargaining may participate in multi-
employer bargaining.


---------------------------------------------------------
VERY IMPORTANT 2016 CASE: WORK-POOLING

SCHEME; MULTI- EMPLOYER BARGAINING. – NEVER
BEEN ASKED IN THE BAR!!!
Erson Ang Lee doing business as “Super Lamination Services”,

vs. Samahang Manggagawa ng Super Lamination (SMSLS-
NAFLU-KMU), G.R. No. 193816, 21 November 2016. - Under the
doctrine of piercing the corporate veil, the three companies can
be treated as one and the rank-and-file employees of the three
companies will constitute the appropriate bargaining unit for
purposes of holding a certification election.


LAW 07172021 279
7/26/2021

---------------------------------------------------------
Facts:
Super Lamination is principally engaged in the business of
providing lamination services to the general public. It appears that
Super Lamination is a sole proprietorship, while Express
Lamination and Express Coat are duly incorporated entities
separately registered with the Securities and Exchange
Commission (SEC).
Respondent Samahan ng mga Manggagawa ng Super Lamination

Services (Union A) is a legitimate labor organization, which is also a
local chapter affiliate of the National Federation of Labor Unions –
Kilusang Mayo Uno.


On 7 March 2008, Union A filed a Petition for Certification

---------------------------------------------------------
Election to represent all the rank-and-file employees of

Super Lamination.
Notably, on the same date, Express Lamination Workers’

Union (Union B) also filed a Petition for Certification
Election to represent all the rank-and-file employees of
Express Lamination.
Also on the same date, the Samahan ng Manggagawa

ng Express Coat Enterprises, Inc. (Union C) filed a
Petition for Certification Election to represent the rank-
and- file employees of Express Coat.


LAW 07172021 280
7/26/2021

---------------------------------------------------------
All three petitions were dismissed by DOLE NCR Med-Arbiters

on the ground of lack of employer-employee relationship
between these establishments and the bargaining units that
Unions A, B and C seek to represent.
The three unions filed their respective appeals before the Office
of the DOLE Secretary which rendered a Decision reversing and
setting aside the ruling of the Med-Arbiters, and directing the
immediate conduct of certification election among the rank-and-
file employees of Express Lamination Services, Inc., Super
Lamination Services and Express Coat Enterprises, Inc., with
A,B, C Unions and No Union as choices.


---------------------------------------------------------
DOLE found that Super Lamination, Express Lamination

and Express Coat were sister companies that had a
common human resource department responsible for
hiring and disciplining the employees of the three
companies.
The same department was found to have also given

them daily instruction on how to go about their work and
where to report for work. It also found that the three
companies involved constantly rotated their workers,
and that the latter’s identification cards had only one
signatory.


LAW 07172021 281
7/26/2021

---------------------------------------------------------
To DOLE, these circumstance showed that the companies were

engaged in a work-pooling scheme, in light of which they
might be considered as one and the same entity for the purpose of
determining the appropriate bargaining unit in a certification election.
DOLE applied the concept of multi-employer bargaining

under Sections 5 and 6 of DOLE Department Order 40-03, Series of
2003. Under that concept, the creation of a single bargaining unit for
the rank-and-file employees of all three companies was not
implausible and was justified under the given circumstance. Thus, it
considered these rank-and-file employees as one bargaining unit and
ordered the conduct of a certification election as uniformly prayed for
by the three unions.


---------------------------------------------------------
Issue:
May all three companies be considered as a
single bargaining unit for all its employees,
under multiple-employer bargaining?
Supreme Court:
YES. The application of the doctrine of piercing
the corporate veil is warranted.


LAW 07172021 282
7/26/2021

---------------------------------------------------------
This Court has time and again disregarded separate juridical personalities under the
doctrine of piercing the corporate veil. It has done so in cases where a separate
legal entity is used to defeat public convenience, justify wrong, protect fraud, or
defend crime, among other grounds. In any of these situations, the law will regard it
as an association of persons or, in case of two corporations, merge them into one
(Villanueva vs. Lorenzon, G.R. No. 179640, 18 March 2015; Times Transportation Co. Inc. vs.
Sotelo, 491 Phil. 756 [2005]).
A settled formulation of the doctrine of piercing the corporate veil is

that when two business enterprises are owned, conducted, and
controlled by the same parties, both law and equity will, when necessary to
protect the rights of third parties, disregard the legal fiction that these two entities
are distinct and treat them as identical or as one and the same (Prince Transport, Inc.
vs. Garcia, 654 Phil. 296 [2011]).


---------------------------------------------------------
The established facts show that Super

Lamination, Express
Lamination, and Express Coat are under the control
and management of the same party – petitioner Ang
Lee.
In effect, the employees of these three companies have petitioner as
their common employer. Therefore, in order to safeguard the right of the
workers and Unions A, B, and C to engage in collective bargaining, the
corporate veil of Express Lamination and Express Coat must be
pierced. The separate existence of Super Lamination, Express Lamination, and
Express Coat must be disregarded. In effect, we affirm the lower tribunals in ruling
that these companies must be treated as one and the same unit for purposes of
holding a certification election.


LAW 07172021 283
7/26/2021

---------------------------------------------------------


---------------------------------------------------------
FOR FURTHER
QUESTIONS: PLEASE
EMAIL OR CALL:
Ada D. Abad
Cell: 0917-526-9732
ada.abad@gmail.com
Ofc: +632-844-0583/
+632-843-8621


LAW 07172021 284

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7/26/2021

PRE - BAR REVIEW - SYNCHRONOUS SPECIAL LECTURES

2021 U.P. LABOR LAW

DEAN ADA D. ABAD

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THE BAR EXAMINATION IS THE

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The 2021 Bar will NOT focus on

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The 2021 Bar will focus on

Canonical: when the principle of

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• Will require analysis of the given

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3. THREE BAR EXAMINERS

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4. CUT-OFF PERIODS FOR

• Laws, rules and issuances until

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5. DIGITAL BUT NOT REMOTE

• “Examinees will still walk into testing rooms

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Examinees will be assigned in testing

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