INTRODUCTORY CHAPTER

Brief History of Labor Relations

During the Spanish administration, the relationship between
employer and employee was regulated to a very limited extent by
the Code of Commerce, particularly, Articles 282 to 302 thereof.
The relationship between master and domestic help was regulated
by the Civil Code, particularly Articles 1583 to 1600 thereof.
Workers did not enjoy security of tenure. There were no unions to
protect their interests. Thus, workers could not bargain collectively
with their employer to improve the terms and conditions of their
employment.
The Filipino workers had the first taste of unionism in 1902
(during the American regime), when Isabelo de los Reyes organized
the first labor organization — the Union Obrera Democratica.
However, the birth of unionism in the Philippines was not enough to
afford protection to labor, hence, government intervention in labor
relations was inevitable.

During the Commonwealth era, the Court of Industrial

Relations was created by Commonwealth Act No. 103. Legitimate
labor organizations were defined and regulated by Commonwealth
Act 104.

With the establishment of the independent Philippine Republic,

the Industrial Peace Act, otherwise known as the Magna Carta
of Labor (R.A. No. 875), was enacted. This marked shift from the
policy of compulsory arbitration (established by Commonwealth Act
No. 103) to free collective bargaining. The Industrial Peace Act was
anchored on the theory that industrial peace cannot be achieved by
compulsion of law but must rest on an essentially voluntary basis.
Thus, compulsory arbitration has been reduced to a minimum.
During the martial law regime, President Marcos enacted the
Labor Code of the Philippines. With the enactment of the Labor
Code, all employees are now assured of security of tenure. Free
 LABOR LAW 2 LATIONS
a THE LAW ON LABOR RE INTRODUCTORY CHAPTER 3

ipartism in labo.
m, free collec tive bargaining and trus, workers ang
trade unionis heen declare d as State policies. Th The Essence of Labor Laws
involved in decision ag
far as practicable, are now
relations have Labor law is about employer-employee relationship. Therefore,
employers, aS . Workers are now given the applicability of the Labor Code is dependent upon the existence
policy-making bodies of the government
bode g
Procesge
te in decision and a in of employer-employee relationship.’ If the relationship is something
the right to participa
: 4 ies, [ and welfare. Volunt
ri hts, dut
theirir rig else other than “employer-employee,” the principles of ordinary civil
ma m paectoing, and conciliation as modes of settling labor or law will apply.
en institutionalized.
industrial disputes have be The Tests of Employer-Employee Relationship

Labor Law The Economic Reality Test —

Labor law is that branch of law that governs and regulates

the Under the economic reality test, when a worker possesses some
attributes of an employee and others of an independent contractor
relationship between employers and employees.
which make him fall within an intermediate area, he may be
classified under the category of an employee when the economic facts
The General Classification of Labor Laws of the relation make it more nearly one of employment than one of
(1) Labor standards independent business enterprise with respect to the ends sought to
be accomplished.
(2) Labor relations
(3) Welfare laws Sunripe Coconut Products v. CIR
83 Phil. 518
Labor standards is the branch of labor law that prescribes the
minimum requirements for hours of work, wages, monetary benefits, FACTS: Sunripe Coconut Products has “parers” and
“shellers” working under the “pakiao” system. Their work
welfare benefits, and occupational health and safety.
consists in paring and shelling coconuts. These “parers” and
_ Labor relations is the branch of labor law that regulates the “shellers” work under some degree of control and supervision
of the company, if not under its absolute direction. For the most
activities of labor organizations and prescribes the modes and part, they depend on their work at Sunripe Coconut Products
machinery for the settlement of labor disputes, including collective
bargaining, and the modes and procedure for terminating for their livelihood. They perform their work at the premises
an of the company. Sunripe Coconut Products contends that
employment.
these “parers” and “shellers” are independent contractors, and
therefore, not its employees.
a laceandlawa
em Ployee are statutes intended to provide protection to the
his beneficiaries in case of disability, sickness, old ISSUE: Whether the relationship of employer-employee
age, death, and it o . : a
exists between Sunripe Coconut Products and the “parers” and
financial Ng her contingencies that results in loss of income “shellers” of coconuts.

nite, #8 no precise definition for social legislation. Socia HELD: The relationship of employer-employee exists
legis
lt cover
l
s labor laws, agrarian laws, 2”
between Sunripe Coconut Products and the “parers” and
welfare laws. Essentially, “shellers” of coconuts because the economic facts showing
th ese are laws or statutes enacted
pursual! employee status outweigh those indicative of independent
f the Constitution. The emph contractor. When a worker possesses some attributes of an
general pu asis is more
blic good and social welfare.

Madrigal Shipping Co. v. Melad, 7 SCRA 330

 LABOR LAW 2
RELATIONS
THE LAW ON LABOR INTRODUCTORY CHAPTER
1
. dent contractor, which mak I
of an indepen!
a withind others
an intermediate area, he may be classified under
him or ry of an employee when the economic facts of the
Payment of Wages --
the catego re nearly one of employment than one of Under this criterion, the relationship of employer-employee
ion make it mo A a in terms
maa dent business enterprise with respect to the ends sought is deemed to exist if the person hired is compensated
of “wages.” It should be emphasized, however, that the mere
to be accomplished.
designation of the compensation as “salaries” will not per se indicate
The Control Test — the existence of employer-employee relationship.” To determine
whether the compensation falls within the connotation of the term
The relationship of employer-employee will be deemed to exist “wages,” the consideration for its payment should be taken into
where the person for whom the services are performed reserves the account. Thus:
right to control not only the end to be achieved but also the means to (1) if paid in consideration of the labor being performed, the
be used in reaching such end.” compensation is considered as “wages”:

Elements of Employer-Employee Relationship (2) if paid in consideration of the results or finished work, the
compensation is not considered as “wages.”
In the case of Viana v. Al-Lagadan,’ the Supreme Court
This distinguishes lease of work by contract for a fixed price (job
laid down the following elements that are generally considered in
contracting) from lease of services of hired servants (employment).
determining the existence of employer-employee relationship:
In the case of Chartered Bank v. Constantino,’ the Supreme Court
(1) Selection and engagement of the employee; laid down the distinction in this wise:

(2) Payment of wages; (1) In lease of services of hired servants or laborers

(employment), the direct object of the contract is the lessor’s labor.
(3) Power of dismissal; and
(2) ; In lease of work by contract for a fixed price (job
(4) Power to control the employees’ conduct. contracting), the direct object of the contract is not the labor but the
result or the complete and finished work.
Selection and Engagement —
; The relationship of employer-employee can exist if compensa-
Under this criterion, the relationship of employer-e tion is paid in terms of profit-sharing. In the case of Fortis v. Gutier-
mployee is
created by the act of hiring a person as an employee. Hiring may be rez Hermanos,? the Supreme Court held that:
mp or "DBA A written contract is not necessary.‘ However,
it 1s essentialthat
parties that one is tothere should be an understanding
“Tt is claimed by the appellants that the contract alleged in
i be tween the
the complaint made the plaintiff a co-partner of the defendants
render personal service to or for the benefit of in the business which they were carrying on. This contention
thetroother
con recognition by them of the right of one to order and
l theandother in the performance of the
nner and method by work and to direct the
per
<<

formance.’ “The term “wages” means remuneration or earnings, however designated,

ca-
Papa of being expressed in terms of money, whether
fixed or ascertained on the basis
et ab ba piece commission, or other method of calculating the same, which
is
Hi © by an employer to an employee under a written or unwritten contract
ini of em-
‘oe work done or to be done or for services rendered or to
be rendered, and
"LVN Pictures v, - Philip
Phil; 364. j ily DO ; ee fair and reasonable value of board, lodging,
Loop Technology, 481 SCRA pi Musiciciians Guild3 , 110 Phil. 725; Almirez v- Infinite pa ed by the employer to the employee (Art. 97[f],
or other facilities customar-
Labor Code).
399 Phil. 408 JAlmirez v. Infinite Loop Technology, 481 SCRA
364
ima y, Ca 56 Phil. 717, 720
bagnot, 107 26 Phil. 100, 102
v. Valero, 132 Phi
SCRA 578
ms
 LABOR LAW 2
TIONS
THE LAW ON LABOR RELA
[ INTRODUCTORY CHAPTER
The
cannot be sustained. It was a mere contract of employment.affairs
plaintiff had no voice or vote in the management of the
by him
of the company. The fact that the compensation received
was to be determined with reference to the profits made by the
defendants in their business did not in any sense make him a
partner therein.”
The Supreme Court issued a similar ruling in the cage of
Bastida v. Menzi & Co.'” where it was held that:
“After considering the evidence and arguments of counsel,
we are unanimously of the opinion that under the facts of this
case, the relationship established between Menzi and Co. and
the plaintiff by the contract, Exhibit A, was not that of partners,
but that of employer and employee, whereby the plaintiff was to
receive 35 percent of the net profits of the fertilizer business of
Menzi & Co. Inc. in compensation for his services of supervising
the mixing of the fertilizers.”
Power of Dismissal —
Under this criterion, the relationship of employer-employee
is deemed to exist if the person hired is subjected to the rules
of discipline of the employer. Prohibiting a person hired from
competing with the firm under pain of dismissal, and subjecting the
person hired to disciplinary action are indications that the employer
wields the power of dismissal." In the case of Ysmael v. CIR,” the
power of dismissal was manifested by the following acts: cutting
off the transportation benefit for misrepresentation, disloyalty, or
free-lancing for any company during his tour of duty, withdrawing
the authority to sell in case of disloyalty, free-lancing, or failure to
make any good sale within a reasonable period: and forcing agents
to resign for any compelling reason.
Power to Control the Employee’s Conduct —
Among the four (4) elements of employer-employee relationship,
the power to control the employee’s conduct is the
most important,
that the other elements may even be
disregarded."
—_—_—_—_—
1058 Phil. 188
"Cosmopolitan Fun
eral H
12108 Phil. 407 omes v. Maalat, 187 SCRA 108
18Sara v. Agarrado, 166
SCRA 625
7
When used as a test in determining the existence of
employer-
employee relationship, the term “control” has a technic al meaning.
It refers to the authority of the employer to manage the employee
on
both the result of the work to be done and the means by which the
work is to be accomplished."
However, it should be stressed that not every form of control
may be accorded the effect of establishing an employer-employee
relationship.” To fall within the ambit of employer-employee
relationship, control should be on both the means and the end.'” If
control is limited only to the result of the work, employer-employee
relationship does not exist.””
The mere fact that the hiring party imposes certain rules on
the hired party does not per se indicate that the power to control
is in existence. Rules, which serve as guidelines toward the
achievement of the mutually desired result, are not indicative of
the power to control.!? Thus, the power to control cannot be inferred
from the mere fact that the relationship may be terminated for
certain specified causes, such as failure to meet the annual sales
quota, inability to make sales production during a certain period,
or conduct detrimental to the company. The reason is because the
causes thus specified have no relation whatsoever to the means
and methods of work that is ordinarily required of or imposed upon
employees.”
Similarly, the power to control cannot be inferred from the
mere fact that a newspaper publisher requires a newspaper carrier
to follow a fixed route and time in the delivery of its newspapers. The
reason is because the requirements are all designed to secure the
accomplishment of one result — the distribution of the publisher’s
newspapers. If there is a certain degree of control, it is only on the
result of the work but not on the means or manner of doing the
work. In the same manner, a building contractor does not become
an employee simply because he agrees to build a house according
MSSS v. Court of Appeals, 156 SCRA 383
18AFP Mutual Benefit Association v. NLRC, 267 SCRA 47; Tongko v. The Man-
ufacturers Life, 570 SCRA 503
Insular Life v. NLRC, 179 SCRA 459; Vinoya v. NLRC, 324 SCRA 469
17Sasan v. NLRC, 569 SCRA 670
18Qrozco v. Court of Appeals, 562 SCRA 36
191nvestment Planning Corp. v. SSS, 21 SCRA 924
 LABOR LAW 2
8 INTRODUCTORY CHAPTER
THE LAW ON LABOR RELATIONS

Hability for any

to specifications, for a certain degree of time, with (2) Non-regular employment, and
y,
delay and with responsibility for poor workmanship. Realisticall
it would be a rare contract of service that gives untrammele freedom
d (3) Casual employment.”
to the party hired and eschews any intervention whatsoever in his Regular Employment —
performance of the agreement.”
was engaged
Regular employment is a job where the employee
usual business or
Statutory Classification of Employees to perform activities necessary or desirable in the
The Labor Code classifies employees in the following manner: trade of the employer.
(1) Managerial; Non-Regular Employment —
(2) Supervisory; and Non-regular employment is a job where the employee was
(3) Rank-and-file.” engaged for a specific period or undertaking, for a particular season,
for a trial period, or for an activity that is not usually necessary or
Managerial Employees — desirable to the business or trade. It may be classified into:
Managerial employees are those vested with powers or (1) Project employment;
prerogatives to lay down and execute management policies and/or (2) Seasonal employment;
hire, transfer, suspend, lay-off, recall, discharge, assign, or discipline
employees. (3) Fixed-term employment;

Supervisory Employees — (4) Probationary employment; and

Supervisory employees are those who, in the interest of the (5) Casual employment.
employer, effectively recommend managerial actions if the exercise
Project Employment —
of such authority is not merely routinary or clerical in nature but
requires the use of independent judgment. Project employment is a job where the employee was engaged
for a specific undertaking, the completion or termination of which
Rank-and-File Employees -- has been determined at the time of the engagement.
Rank-and-file employees are those who are neither managerial
nor supervisory. They can either be daily paid or monthly-paid. Seasonal Employment —

Daily-paid employees are those who are paid only on the days Seasonal employment is a job where the employee was engaged
they actually worked and on unworked regular holidays. Monthly- to work during a particular season.
paid employees are those who are paid every day of the month,
including unworked rest days, special holidays, and regular holidays. Fixed-Term Employment —
Fixed-term employment is a job where the parties by free
Statutory Classification of Employment choice have assigned a specific date of termination.
The Labor Code classifies employment into:
Casual Employment —
(1) Regular employment:
Casual employment is a job where the activities performed
by
the employee are not usually necessary or desirab
Se
le in the usual
business or trade of the employer.
°Quinio v. Munoz, 15 SCRA 140
“Insular Life v. NLRC, 179 SCRA 459 —__
Art. 219(m), Labor Code *3Art. 295, Labor Code
 LABOR LAW 2 11
0 INTRODUCTORY CHAPTER
: THE LAW ON LABOR RELATIONS

Probationary Employment -- yer — ere

(7) Right to present grievances to the emplo
the right at se a inion
Probationary employment is a job where the employee
upon employees or group of employees have 1 cli n
This right , bo
his engagement, is made to undergo a trial period to enable the present grievances to their employer.” wa a ile
grievance must be in
employer to determine his fitness for regular employment on the to certain limitations, to wit: (a) the a
natur e; i.e., does not enco mpas s matte rs of collective concern,
basis of reasonable standards made known to him at the time of the Wara o naa
does not contr avene
engagement.” adjustment of the grievance nasa m
the bargaining
collective bargaining agreement, and (c)
an oppor tunit y to be prese nt durin g the adjustment.
The Rights of Workers be given
ag pics
(8) Right to participate in policy and bang
(1) Right to security of tenure — This simply means that that direct ly affect the
processes — This right is limited to matters
employees cannot be dismissed without valid cause.* e. It does not exten d to matte rs
employees’ rights, benefits, and welfar
the business Br
(2) Right toa living wage — The living (minimum) wage shall pertaining to business operations, management of
those fallin g within the tradit ional areas of collec tive bargaining.
be as nearly as adequate as is economically feasible to maintain the
minimum standards of living necessary for the health, efficiency
and general well-being of the employees within the framework of The Prerogatives of Management
the national and social development program.” While workers have their rights, employers have also their
(3) Right to humane conditions of work — Every workingman prerogatives. These prerogatives extend to all aspects of employment,
including hiring, work assignment, working methods, time, place,
is entitled to be protected against the dangers of sickness or death
through safe and healthful working conditions.” and manner of work, tools to be used, processes to be followed,
supervision of workers, working regulations, transfer of employees,
(4) Right to self-organization — Employees of commercial, work supervision, lay-off of workers, discipline, dismissal, and
industrial, agricultural enterprises, or those employed in religious, recall of work. These prerogatives are recognized because it is
charitable, medical, or educational institutions, whether operating deemed important to society as a whole that the business should
for profit or not, have the right to form or join an organization succeed.
for purposes of collective bargaining or for their mutual aid and The exercise of these prerogatives is inherent and exclusive to
protection.” every owner of a business. They may be exercised without liability
(5) Right to engage in concerted activities — Workers have as long as they are done in good faith for the advancement of the
the right to engage in peaceful concerted activities for purposes of employer's interest.” Employees or labor unions cannot object to
collective bargaining or for their mutual aid and protection.” the exercise by management of its prerogatives, in much the same
way that they may be expected to resist to the utmost what they
(6) Right to collectively bargain — This right can be exercised consider to be an intrusion into their exclusive domain.** Not even
by the workers through their certified collective bargaining agent. the National Labor Relations Commission or the Labor Arbiters can
interfere with or substitute their judgment for that of the employer
in the conduct of his business because there is nothing in the Labor
“Sec. 6, Rule I, Book VI, Rules Implementing the Labor Code
5Art. 294, Labor Code as amended 31Art. 267, Labor Code as amended
6Art. 124, Labor Code Art. 260, Labor Code as amended; Sec. 1, Rule XXI, Book V, Rules Imple-
“Rule 1001, Occupational Safety and Health Standard menting the Labor Code
s
“Art. 253, Labor Code as amended 33Chu v. NLRC, 232 SCRA 764
“Art. 278(b), Labor Code as amended 34GSIS v. GSIS Supervisors Union, 85 SCRA 90
Art. 267, Labor Code as amended 35Shell Oil Workers v. Shell Oil Co., 39 SCRA 276
 12 LABOR LAW 2
THE LAW ON LABOR RELATIONS

Code that authorizes them to exercise managerial authority,’

although it is within their power to inquire on whether or not the
exercise of managerial prerogatives was tainted with bad faith or
grave abuse of discretion.”
LABOR CODE OF THE PHILIPPINES
PRESIDENTIAL DECREE NO. 442

(As amended by P.D. Nos. 570-A, 626, 643, 823, 849, 850, 865-
A, 891, 1367, 1368, 1391, 1412, 1641, 1691, 1692, 1693, 1920, 1921,
and 2018; E.O. No. 797; B.P. Blg. 32, 70, 130, and 227, E.O. Nos. 74,
111, 126, 180, 247, 251, and 292; and R.A. Nos. 6715, 6725, 6727,
7610, 7641, 7655, 7658, 7700, 7730, 7796, 7877, 8042, 8558, 9347,
9481, 10151, 10361, 10395, 10396, 10741, 10757, 10789, and 11360.)

A DECREE INSTITUTING A LABOR CODE,

THEREBY REVISING AND CONSOLIDATING LABOR
AND SOCIAL LAWS TO AFFORD PROTECTION TO LABOR,
PROMOTE EMPLOYMENT AND HUMAN RESOURCES
DEVELOPMENT AND INSURE INDUSTRIAL PEACE
BASED ON SOCIAL JUSTICE.

BOOK FIVE
LABOR RELATIONS
TITLE|
POLICY AND DEFINITIONS

CHAPTER |
POLICY
= ART. 218. Declaration of Policy. — A. It is the policy of the
ate:

(a) To promote and emphasize the primacy of

free collective bargaining and negotiations, including
voluntary arbitration, mediation, and conciliation
ean as
36
modes of settling labor or industrial disputes; "
aon v. NLRC, 202 SCRA 346; Almodiel
v. NLRC, 223 SCRA 341
Master Iron Labor Union v. NLRC, 219 SCRA
47 13
 LABOR LAW 2 Art. 218
BOOK FIVE — LABOR RELATIONS 15
" THE LAW ON LABOR RELATIONS Art. 218
TITLE I — POLICY AND DEFINITIONS

as an
(b) To promote free trade unionism achieved by compulsion of law and that sound and stable industr
ial
y and the
instrument for the enhancement of democrac relations must rest on an essentially voluntary basis.”
ent;
promotion of social justice and developm there are instances where government
Nevertheless,
(c) To foster the free and voluntary organization intervention cannot be avoided. In anticipa tion of this eventual ity,
of a strong and united labor movement; the National Conciliation and Mediation Board (NCMB) was created
(d) To promote the enlightenment of workers to handle the task of conciliation and mediation, while the National
concerning their rights and obligations as union Labor Relations Commission (NLRC) was created to settle disputes
members and as employees; through compulsory arbitration. In labor disputes causing or likely
to cause a strike or lockout in an industry indispensable to national
(e) To provide an adequate administrative interest, the Secretary of Labor and Employment can assume
machinery for the expeditious settlement of labor or jurisdiction over the dispute and decide it, or certify the dispute to
industrial disputes; the NLRC for compulsory arbitration.
(f) To ensure a stable but dynamic and just To emphasize the primacy of free collective bargaining
industrial peace; and and negotiations, the law? expressly enjoins that no court or
(g) To ensure the participation of workers in administrative agency or official shall have the power to set or fix
wages, rates of pay, hours of work, or other terms and conditions of
decision and policy-making processes affecting their
employment, except:
rights, duties, and welfare.
(1) Under Article 122 of the Labor Code, where the
B. To encourage a truly democratic method of
Regional Tripartite Wages and Productivity Boards are
regulating the relations between the employers and
empowered to determine and fix minimum wages rates in their
employees by means of agreements freely entered into
region, provinces, or industries therein; and
through collective bargaining, no court or administrative
agency or official shall have the power to set or fix wages, (2) Under Article 278(g) of the Labor Code, where the
rates of pay, hours of work, or other terms and conditions of Secretary of Labor and Employment is empowered to assume
employment, except as otherwise provided under this Code.! jurisdiction over a labor dispute causing or likely to cause a
strike or lockout, and decide it, or certify the dispute to the
COMMENT: NLRC for compulsory arbitration, in which case, the Secretary
of Labor and Employment or the NLRC may fix the terms
Policy of the State of a collective bargaining agreement in case of a deadlock in
negotiations.
In general, the policy of the State is to minimize government
intervention in the settlement of labor disputes. The State prefers To the foregoing exceptions, we can add the power granted by
that labor disputes be left to the parties to settle through peaceful Section 3(i) of Executive Order No. 247,‘ to the Philippine Overseas
negotiation and collective bargaining — a matter which was initially Employment Administration (POEA) to secure the best terms
adopted by the Industrial Peace Act. This is a radical departure and conditions of employment of Filipino contract workers, which
from the principle of compulsory arbitration established
by
Commonwealth Act No. 103. Resort to the grievance
machinery and
voluntary arbitration are preferred modes of settling labor Explanatory Note, S.B. No. 423 and H.B. 825 which became R.A. No. 875,
disputes
In recognition of the reality that “real industrial cited in Montemayor, Labor, Agrarian and Social Legislation, 2nd Ed., p. 210.
peace cannot be
3Art. 218 B, Labor Code
“E.O. No. 247 is the law which reorganized the Philippine Overseas Employ-
_—_—_—_—_——_ll ment Administration, promulgated on July 24, 1987 by the then President Corazon
‘As amended by P.D. No. 570-A; E.0. C. Aquino.
No. 111; and R.A. No. 6715
 LABOR LAW 2 Art. 219 17
BOOK FIVE — LABOR RELATIONS
THE LAW ON LABOR RELATIONS
Art. 219
: TITLE I — POLICY AND DEFINITIONS

um requirements for practice” means any unfair labor

includes the power to prescribe the minim (k) “Unfair labor
contracts of employ men t. practice as expressly defined by this Code.
any controversy OF
means the (1) “Labor dispute” includes
ART. 219. Definitions. — (a) “Commission” of employme nt or
divisions matter concerning terms or conditions
National Labor Relations Commission or any of its the association or representation of pers
ons in negot iatin g,
this Code.
as the case may be, as provided under fixing, maintaining, changing, or arra
nging the terms
nt, regar dless of whether mini
(b) “Bureau” means the Bureau of Labor Relations and conditions of employme an
ion of employer
and/or the Labor Relations Divisions in the regional disputants stand in the proximate relat
offices established under Presidential Decree No. 1, in the employee.
Department of Labor. (m) “Managerial employee” is one who is vested
with
(c) “Board” means the National Conciliation and powers or prerogatives to lay down and execute management
, recall,
Mediation Board established under Executive Order No. 126. policies and/or to hire, transfer, suspend, lay-off
employ ees. Super visory
discharge, assign, or discipline
(d) “Council” means the Tripartite Voluntary Arbitra- in the intere st of the emplo yer,
employees are those who,
tion Advisory Council established under Executive Order such managerial actions if the
effectively recommend
No. 126 as amended.
exercise of such authority is not merely routinary or clerical
(e) “Employer” includes any person acting in the in nature but requires the use of independent judgment. All
interest of an employer, directly or indirectly. The term shall employees not falling within any of the above definitions are
not include any labor organization or any of its officers or considered rank-and-file for purposes of this Book.
agents except when acting as employer.
(n) “Voluntary Arbitrator” means any person
(f) “Employee” includes any person in the employ of accredited by the Board as such, or any person named or
an employer. The term shall not be limited to the employees designated in the Collective Bargaining Agreement by the
ofa particular employer, unless this Code so explicitly states. parties to act as their Voluntary Arbitrator, or one chosen,
It shall include any individual whose work has ceased as a with or without the assistance of the National Conciliation
result of or in connection with any current labor dispute or and Mediation Board, pursuant to a selection procedure
because of any unfair labor practice if he has not obtained agreed upon in the Collective Bargaining Agreement, or any
any other substantially equivalent and regular employment. official that may be authorized by the Secretary of Labor and
(g) “Labor organization” means any union Or Employment to act as Voluntary Arbitrator upon the written
association of employees which exists in whole or in part request and agreement of the parties to a labor dispute.
for the purpose of collective bargaining or of dealing with (o) “Strike” means any temporary stoppage of work by
employers concerning terms and conditions of employment. the concerted action of employees as a result of an industrial
(h) “Legitimate labor organization” means any labor or labor dispute.
organization duly registered with the Department of Labor (p) “Lockout” means the temporary refusal of an
and Employment, and includes any branch or local thereof. employer to furnish work as a result of an industrial or labor
ex. da , ; dispute.
(i) “Company union” means any labor organizatio n
whose formation, function, or administration has been . (a) “Internal union dispute” includes all disputes or
oo by any act defined as unfair labor practice by this grievances arising from any violation of or disagreement
ode. over any provision of the constitution and by-laws of a union
(j) “Bargaining representative” means including any violation of the rights and conditions of
a legitimate anion
labor organization whether or not employed membership provided for in this Code.
by the employer.
 LABOR LAW 2
18
THE LAW ON LABOR RELATIONS
(r) “Strike-breaker” means any person who obstructs,
impedes, or interferes with by force, violence, coercion,
by employees
threats, or intimidation any peaceful picketing
during any labor controversy affecting wages, hours, or
conditions of work or in the exercise of the right of self-
organization or collective bargaining.
(s5) “Strike-area” means the establishment, warehouses,
depots, plants, or offices, including the sites or premises used
as run-away shops, of the employer struck against, as well as
the immediate vicinity actually used by picketing strikers
in moving to and fro before all points of entrance to and exit
from said establishment.”
COMMENT:
Statutory Definition of Employer Not Complete
As defined in Article 219(e) of the Labor Code, the term
“employer” “includes any person acting in the interest of an employer,
directly or indirectly.” The law, in defining the term “employer” does
not use the word “means.” Instead, it uses the word “includes.” In
using the word “includes” and not “means,” the framers of the law
did not intend to give a complete definition of “employer” but rather
that such definition should be complimentary to what is commonly
understood as employer. The term was intended to be understood ina
broad meaning because, firstly, the statutory definition includes not
only a “principal employer but also a person acting in the interest of
the employer,” and secondly, the law itself specifically enumerates
those who are not included in the term “employer,” namely:
(1) a labor organization (except when acting
employer), and
(2) anyone acting in the capacity of officer or agent of
such labor organization.‘
Labor Organization as an Employer
. As defined in Article 219(e) of the Labor
Code,
employer” includes a labor organization that
acts as an employer.
This situation arises when a labor organization
hires employees to
work for it.
ma
kang amended by P.D. No. 570-A: B.P.
Blg. 227: and R.A. No. 6715
Feati University v. Bautista, 18
SCRA 1191
Ave ngg 19
Art. 219 BOOK FIVE -- LABOR RELATIONS
TITLE I — POLICY AND DEFINITIONS
Bautista v. Inciong
158 SCRA 665
FACTS: BAUTISTA was hired by the Associated Labor
Union (ALU) as Union Organizer. He was given a monthly
salary. He was enrolled with the SSS with ALU as his employer.
Thereafter, ALU terminated the services of BAUTISTA. Hence,
BAUTISTA filed a complaint for illegal dismissal. ALU moved
for the dismissal of the complaint on the ground of lack of
employer-employee relationship.
ISSUE: Was there an employer-employee relationship
between BAUTISTA and ALU?
HELD: There was employer-employee relationship
between BAUTISTA and ALU. The mere fact that ALU is a labor
union does not mean that it cannot be considered an employer
of the persons who work for it. The relationship of employer-
employee between BAUTISTA and ALU could be gleaned from
the fact that BAUTISTA was selected and hired by ALU. He
was paid wages by ALU. ALU had the power to dismiss him
as indeed it dismissed BAUTISTA, and definitely, ALU tightly
controlled the work of BAUTISTA as one of its organizers.
Unregistered Association as Employer
An unregistered association may be an employer. The law does
not require an employer to be registered before he may come within
the purview of the Labor Code.
Orlando Farm Growers Association v. NLRC
299 SCRA 364
FACTS: Orlando Farm Growers Association (OFGA)
as an is an association of landowners engaged in the production of
export quality bananas. It was established for the sole purpose
of dealing collectively with STANFILCO on matters concerning
technical services, canal maintenance, irrigation, and pest
control among others. OFGA hired several persons to work as
packers and harvesters in their plantation. Thereafter, these
persons were dismissed by OFGA for which reason, they filed a
complaint for illegal dismissal against OGFA. OFGA contended
the term be considered an employer because it is an
it that cannot
unregistered association formed solely to serve as an effective
medium for dealing collectively with STANFILCO, hence, it
does not exist in law.
HELD: The contention of OFGA is misleading. Article
219(e) of the Labor Code, as amended, defines “employer” as
any person acting in the interest of an employer, directly or
 20 LABOR LAW 2 Art. 219 21
BOOK FIVE — LABOR RELATIONS
THE LAW ON LABOR RELATIONS Art. 219
TITLE I — POLICY AND DEFINITIONS

indirectly. The said provision does not require an employer to be
registered before he may come within the purview of the Labor
Code. To hold otherwise would bring about a situation whereby
employees are denied, not only redress of their grievances,
but more importantly, the protection and benefits accorded to
them by law if their employer happens to be an unregistered
association.
Statutory Definition of Employee
The term “employee” as defined in Article 219(f) of the Labor
Code, embraces not only those who are usually and ordinarily
considered employees, but also those who have ceased as employees
as a consequence of a labor dispute or because of unfair labor
practice “if he has not obtained any other substantially equivalent
and regular employment.”
Meaning of Substantially Equivalent Employment
Substantially equivalent employment means a job similar
to that which the employee held at the time of his dismissal. The
determining factor is not the amount of compensation received by
the employee but the nature of the job itself and the career that it
can offer the employee.
HELD: The employment of AGUIRRE in the Central Bank
and his teaching load in the Philippine College of Commerce
cannot be considered as substantially equivalent to his former
job at FEU because AGUIRRE’s work with FEU was that of
an instructor, while his work in the Central Bank is clerical in
nature. AGUIRRE was receiving from FEU P5,400.00 a year,
while he receives only P3,000.00 a year from the Central Bank.
Moreover, as professor at FEU, AGUIRRE’s maximum teaching
load is five (5) hours daily; while in the Bank, he works eight (8)
hours a day. Furthermore, although his work in the Bank allows
him to teach part time in the Philippine College of Commerce
for one hour, he could also do the same work even if he was
employed with FEU. In addition to the foregoing circumstances,
one important factor is that AGUIRRE is an instructor in
Tagalog. As such, his position as researcher in the Central Bank
has no future for him. The situation would perhaps have been
different had his line been economics. Inasmuch as AGUIRRE
has been specialized in the Tagalog dialect, his work as
researcher in the Central Bank is inferior to his job as full-time
instructor in FEU, not so much because his salary in the latter
is substantially bigger, even if we add thereto his emoluments
in the Philippine College of Commerce, but especially because
of the future his position as instructor in FEU offers him as a
career, which is non-existent in the Central Bank.

Far Eastern University v. CIR

5 SCRA 1082
FACTS: AGUIRRE was employed by FEU as full-time
instructor with a salary of P5,400.00 per annum. Because of his
union activities, FEU dismissed AGUIRRE from his employment,
for which reason AGUIRRE filed a complaint for unfair labor
practice against FEU. During the pendency of the unfair labor
practice case, AGUIRRE was able to get a permanent
clerical
job as researcher in the Central Bank with a salary of
P3,000.00
per annum. He was also able to get a part-time teaching position
at the Philippine College of Commerce at P100.00
a month. In
the complaint for unfair labor practice, FEU sought
to block the
reinstatement of AGUIRRE on the ground that he has already
gotten a substantially equivalent employment. According to
FEU, the employment of AGUIRRE
in the Central Bank and
his teaching load in the Philippine
College of Commerce are
substantially equivalent to his former
position at FEU.
ISSUE: Whether] the employme
Central Bank and his teaching load nt of AGUIRRE ini the
in the Philippine College of
 PB
art, 253 BOOK FIVE — LABOR RELATIONS ans
: TITLE V — COVERAGE

Right to Form or Join Workers’ Association Available to All Types

of Employees
TITLE V The right to form workers’ association is accorded to all kinds
of employees (whether managerial, supervisory, or rank-and-file)
COVERAGE who are working in any type of establishment, operating for profit
or not. Article 253 of the Labor Code expressly provides that:

ART. 253. Coverage and Employees Right to Self-Organization, “ART. 253. Coverage and Employees Right to Self-
- All persons employed in commercial, industrial and Organization — All persons employed in commercial, industrial
and agricultural enterprises and in religious, charitable,
agricultural enterprises and in religious, charitable, medical,
medical, or educational institutions, whether operating for
or educational institutions, whether operating for profit or profit or not, shall have the right to self-organization xxx.”
not, shall have the right to self-organization and to form,
join, or assist labor organizations of their own choosing for
Right to Form or Join a Labor Organization Not Available to All
purposes of collective bargaining. Ambulant, intermittent
Types of Employees
and itinerant workers, self-employed people, rural workers
and those without any definite employers may form labor Only the following employees are given the right to form, join
organizations for their mutual aid and protection.'! or assist in the formation of a labor organization:
COMMENT: (1) Rank-and-file employees; and

The Right to Self-Organization (2) Supervisory employees.

The right to self-organization is the entitlement given to all Implications of the Right to Self-Organization
employees to form, join, or assist in the formation of associations for
purposes not contrary to law. The right of employees to self-organization carries with it the
right:
There are two (2) basic types of organizations that may be
formed by employees, namely: (1) to abstain from joining a union;‘
(1) Workers’ association; and (2) to choose which union he would join:? and
(2) Labor organization. (3) to cancel his membership with the union.®
A workers’ association is an organization of employees created
Limitation
for mutual aid and protection of its members or for any other
legitimate purpose other than collective Generally, the right to abstain from joining a union as well as
bargaining.’
A labor organization (which is commonly known as labor union) the right to resign from the union or to choose which union to join,
is cannot be exercised where the contracting union” and the employer
of andealin
associ ation cnof
g with emplo yees created for collective
ployees ive bargai
g ning have agreed on a union security arrangement.”
Ployers concerning terms and conditions 0f
employment.3 AA
—.___,
“Victoriano v. Elizalde Rope Workers Union, 59 SCRA 54, 56: CENECO v.
‘As amended by P.D No. 570 retary of Labor, 201 SCRA 584
“Sec. 1(cce), Rul NO. 570-A; P.D.P.D. No. 1367: ; and B.P. Blg. 70 “Airtime Specialists v. Ferrer-Calleja, 180 SCRA 749
by D.O. No. 40-03 e1, Book V, Rules Implementing the Labor Code as amended ti “Pagkakaisa v. Enriquez, 108 Phil. 1010, 1019; Basa v. FOITAF, 61 SCRA 93,
3Art. 219(g), Labor Cod
e, as amended "The contracting union is the certified collective bargaining agent.
Victoriano v. Elizalde Rope Workers Union, 59 SCRA 54; Reyes v. Trajano,
209 SCRA 4 84
210
 FF
LABOR LAW 2 Art. 253 art, 263 BOOK FIVE — LABOR RELATIONS =
THE LA W ON LABOR RELATIONS TITLE V — COVERAGE
=
ent “ART. 259. Unfair Labor Practices of Employers — xxx
Union Security Agreem
ective (e) xxx Employees of an appropriate collective bargaining unit
is a stipulation in a coll
Union security agreement who are not members of the recognized collective bargaining
bargaining agreement which requires me= covered by the agent may be assessed a reasonable fee equivalent to the dues
become
to mbers of the contracting and other fees paid by members of the recognized collective
collective bargaining unit” bargaining agent, if such non-union members accept the benefits
union and to mai nta in the ir union membership in good standing a under the collective agreement: Provided, That the individual
emp loyment.
a condition for continued authorization required under Article 242 (now Art. 250),
paragraph (0) of this Code shall not apply to the non-members
ts of the recognized collective bargaining agent;”
Types of Union Security Agreemen
ement whereby
(1) Closed Shop — Closed shop is an agre Effect of Union Security Agreement
the employer binds himself to hire only members of the contracting the employee must
If there is a union security agreement,
union who must continue to remain members in good standing to join the contracting union and maintain his membership in good
keep their jobs." He can resign from the union
standing to retain his employment.
(2) Union Shop — Union shop is an agreement whereby an only during the freedom period, i.e., within the sixty (60)-day period
employer can hire non-members of the contracting union on condition prior to the expiration of the collective bargaining agreement. If the
union member fails to maintain his membership in good standing,
that they should join the union within a specified period and must
or resigns prior to the freedom period, he will be subject to dismissal.
continue to remain members in good standing to keep their jobs.
(3) Maintenance of Membership — Maintenance of member- Employees can be dismissed for breach of union security
agreement even if they may not be aware of such a provision. As
ship is an agreement which requires those who are members of the
held in the case of Manalang u. Artex:!!
contracting union at the time of the execution of the collective bar-
gaining agreement to maintain their membership in good standing “Even if we assume, in gratia argumentis, that the
as a condition of continued employment. petitioners were unaware of the stipulations set forth in the
collective bargaining agreement, since membership in the
(4) Preferential Hiring — Preferential hiring is an arrange- BBLU prior to their expulsion therefrom is undenied, there
ment whereby the members of the contracting union are given pref- can be no question that as long as the agreement with closed
erence in engagement, all circumstances being equal, and for them shop provision was in force, they are bound by it. Neither
to maintain their membership in good standing during the lifetime their ignorance of nor their dissatisfaction with its terms and
conditions would justify breach thereof or the formation by them
of the collective bargaining agreement as a condition of continued
of a union of their own.”
employment.
(5). Agency Shop — Agency shop is an agreement which does ; If a union member fails to maintain his union membership
not require union membership but only support in the form of agency mM good standing, the union will recommend to the employer his
fees, from the employees who are covered by the bargaining unit. dismissal from employment, and the employer is bound to comply
isauthorized by Article 259(e) of the Labor Code which provides by dismissing the union member. However, before effecting the
at: dismissal, the employer must observe due process, which means
that the employer should first require the employee to explain,
conduct administrative hearing if necessary, and proceed to dismiss
the union member only when warranted by the evidence. As held by
9 : . a i the Supreme Court in the case of LCMWU u. Liberty Cotton Mills:!?
Collective bargaining unit refers to a group of employees who share mute
interests within a given emplo yer
unit.
xt a ae body of employees in the i It may be comprise i d of all or less
employer unit, or any occupational a i
n such employer unit, or any gov?” :
geographical grouping within “21 SCRA 561, 568
ONL i , sucha employ 154
SCRA 368 U v. Aguinaldo's Echague, 97 Phil. 184; Manila Mandarin v. NLRC, 90 SCRA 391: see also Carifio v. NLRC, 185 SCRA 177
 yr
LABOR LAW 2 Art. 253
" THE LAW ON LABOR RELATIONS
“While the respondent company, under the Mainte nance of
Agreement,
ning
Membership provision of the Collective Bargai by PAFLU for
expelle d
is bound to dismiss any employ ee
undertaking shoul d
disloyalty, upon its written request, this
not be done hastily and summar ily. The compa ny acted in bad
faith in dismissing petitioner worker s withou t giving them
the benefit of a hearing. It did not even bother to inquire from
the workers concerned and from PAFLU itself about the cause
y
for expulsion of the petitioner workers. Instead the compan
immedi ately dismis sed the worker s on May 29, 1964- ina
span of only one day -- stating that it had no alternative but
to comply with its obligation under the Security Agreement
in the Collective Bargaining Agreement, thereby disregarding
the right of the workers to due process, self-organization and
security of tenure.”
If the employer fails to observe due process, he will be liable for
nominal damages as decreed in the case of Slord Development Corp.
v. Noya.?
It should be stressed that an employer is bound to dismiss
an employee under a union security agreement only when the
authority to dismiss is clearly expressed in the agreement. Union
security agreements should be strictly construed against their
existence. Sometimes harsh and onerous, such provisions should not
be extended beyond the explicit coverage of their terms."
Confederated Sons of Labor v. Anakan Lumber Co.
107 Phil. 915
FACTS: The United Workers Union (UWU) has a contract
with Anakan Lumber Co. entitled “Collective Bargaining and
Closed Shop Agreement” which provides: “That the UNION shall
have the exclusive right, and privilege to supply the COMPANY
with such laborers, employees and workers as are necessary xxx
in its many phases of operations, xxx and that the COMP.
agrees to employ or hire in any of its departments only such person
or persons who are members of the UNION.” Subsequently, forty-
six (46) members of UWU joined the Confederated Sons of Labor
(CSL). Consequently, UWU expelled the said employees from
the union and demanded (from the company) their dismiss
pursuant to the closed-shop agreement. In compliance thereof,
Anakan Lumber Co. dismissed the
said employees.
SB. No. 232687, February
4, 2019
San Carlos Milling Co. v. CIR,
1 SCRA 734, 739
Art. 253 BOOK FIVE — LABOR RELATIONS 215
TITLE V — COVERAGE
ISSUE: Whether Anakan Lumber Co. was
bound to
dismiss the forty-six (46) members of UWU under the closed-
shop provision of the CBA.
HELD: Anakan Lumber Co. was not bound to dismiss
the forty-six (46) members of UWU because membership with
UWU was not made a condition for the continued employment
of a worker. The CBA provision in this case merely required the
workers hired by Anakan Lumber Co. to be members of UWU at
the time of hiring. In order that an employer may be bound to
dismiss employees for non-union membership, the stipulation to
this effect must be so clear and unequivocal as to leave no room
for doubt thereon. An undertaking of this nature is so harsh
that it must be strictly construed, and doubts must be resolved
against the existence of “closed shop.” Since CBA provision does
not provide that employees “must continue to remain members in
good standing” with UWU “o keep their jobs,” the CBA between
them does not establish a “closed shop.”
Manila Cordage Co. v. CIR
168 Phil. 556
FACTS: Manila Cordage Company and Manco Labor Union
(MLU) entered into a collective bargaining agreement (CBA)
which contained the following stipulation: “Both parties agree
that all employees of the COMPANY who are already members
of the UNION at the time of the signing of this AGREEMENT
shall continue to remain members of the UNION for the duration
of this AGREEMENT.” When the CBA was signed, Rabago,
Trajano and Nisperos were members of MLU. Subsequently,
some employees organized the Manila Cordage Workers Union
(MCWU). Rabago, Trajano and Nisperos, among others, joined
the MCWU. Invoking the maintenance of membership provision
of the CBA, MLU requested Manila Cordage Company to
dismiss those who joined MCWU. Accordingly, Manila Cordage
Company dismissed the said employees.
ISSUE: Whether the members of MLU who joined
MCWU can be dismissed under the maintenance of membership
provision of the CBA.
HELD: The members of MLU who joined the MCWU
cannot be dismissed under the maintenance of membership
provision of the CBA because the maintenance of membership
provision of the CBA does not clearly state that maintenance
of membership in the MLU is a condition of continuous
employment. In order that an employer may be bound to dismiss
employees who do not maintain their membership in the
contracting union, the stipulation to this effect must be so clear
as to leave no room for doubt thereon. An undertaking of this
nature is so harsh that it must be strictly construed and doubts
 OB Oo

LABOR LAW 2 Art. 253

mi THE LAW ON LABOR RELATIONS . 253 BOOK FIVE — LABOR RELATIONS 217
ae TITLE V — COVERAGE

to dismiss,
must be resolved against the existence of the right (2) Union security agreements cannot be enforced against
Otherwise, it would violate the natural and constitutional right
of employees to organize freely. Such interpretation
would be employees who were unjustifiably refused admission by the union
inconsistent with the constitutional mandate
that the State itself. Unions are not entitled to arbitrarily exclude qualified
shall afford protection to labor. applicants for membership. The existence of a closed-shop stipulation
in the CBA will not justify the dismissal of an employee whom the
If the employer is sued for illegal dismissal for terminating an union refused to admit to member without any reasonable ground.’
employee for breach of the union security agreement, the employer
should prove that: Salunga v. Court of Industrial Relations
21 SCRA 216
(1) the union security clause is applicable,
FACTS: The collective bargaining agreement (CBA)
(2) the union requested the employer to enforce the between the Union and the Company stipulates a closed-shop
union security agreement, and form of union security. SALUNGA resigned from the Union. As
a result, the Union asked the company to dismiss SALUNGA
(3) there is sufficient evidence to support the union’s
pursuant to the closed-shop agreement. Upon being informed by
decision to expel the employee from the union.” the Company that his resignation would result in the termination
of his employment, SALUNGA withdrew his resignation. The
Validity of Union Security Agreements Union refused to honor the withdrawal because of SALUNGA’s
critical attitude towards the Union. Instead, the Union pressed
Union security agreements are valid and legal. It is authorized the company to dismiss SALUNGA based on the closed-shop
by Article 259(e) of the Labor Code which provides that: agreement.

“ART. 259. Unfair Labor Practices of Employers — xxx ISSUE: Can the Union validly invoke the closed shop
(e) xxx Nothing in this Code or in any other law shall stop the provision in the CBA to dismiss SALUNGA?
parties from requiring membership in a recognized collective
HELD: The Union cannot validly invoke the closed-shop
bargaining agent as a condition for employment, except those agreement to justify the dismissal of SALUNGA because the
employees who are already members of another union at the union itself unjustifiably refused to re-admit SALUNGA as
time of the signing of the collective bargaining agreement.” member.

Limitations on the Applicability of Union Security Agreements

(3) Union security agreements cannot be enforced against
(1) Union security agreements cannot be enforced against employees who are members of religious sects which prohibit their
employees who are already members of another union at the time of members from joining a labor organization. The reason is because
the signing of the CBA. This could be gleaned from Article 259 of the free exercise of religious belief is superior to contract rights.
Labor Code, the pertinent portion of which reads as follows: Religious freedom is a fundamental personal right which has a
preferred position in the hierarchy of values. Contract rights yield
to the freedom of religion.
“ART. 259. Unfair Labor Practices of Employers — XXX
(e) xxx Nothing in this Code or in any other law shall stop the
parties from requiring membership in a recognized collective Victoriano v. Elizalde Rope Workers Union
bargaining agent as a condition for employment, except those 158 Phil. 60
employees who are already members of another union FACTS: VICTORIANO, a member of “Iglesia Ni Cristo,”
at the time of the signing of the collective bargaining was an employee of ELIZALDE ROPE FACTORY. He was
agreement.” /emphasis supplied]
a member of the Elizalde Rope Workers Union which had a

Alabang Country Club, Inc. v. NLRC, 569 Phil. “Salunga v. CIR, 21 SCRA 216
68

LABOR LAW 2 Art. 258
o THE LAW ON LABOR RELATIONS
The
collective bargaining agreement (CBA) with the Company.
CBA contained a closed shop stipulation which provides that
“membership in the Union shall be required as a condition of
employment for all permanent employees and workers covered
by this Agreement.” Considering that Iglesia Ni Cristo prohibits
its members from joining a union, VICTORIANO resigned
from the union. Thus, the Union requested the Company to
dismiss VICTORIANO pursuant to the closed-shop stipulation
in the CBA. The Company in turn notified VICTORIANO that
unless he could achieve a satisfactory arrangement with the
Union, he will be dismissed from service. VICTORIANO filed
a complaint for injunction. The injunction was granted, hence,
ELIZALDE ROPE FACTORY was restrained from dismissing
VICTORIANO.
ISSUE: Whether the issuance of the injunction was valid.
HELD: The issuance of the injunction was valid. Members
of religious sects which prohibits its members from joining a
union cannot be compelled to join the union even in the presence
of a union security agreement in the CBA.
It must be noted, however, that although the Iglesia Ni Cristo
religion forbids its members from forming or joining a labor union,
said members are not legally barred from joining a union or forming
their own union.'” They can even vote in a certification election, if
they are covered by the collective bargaining unit."
Effect of Union Security Agreement in Case of Merger
Union security agreements apply to employees who were
absorbed because of merger of corporations, otherwise, it will lead to
an inequitable and very volatile labor situation.
Bank of the Philippine Islands v. BPIEU
642 Phil. 47
FACTS: The Bank of the Philippine Islands (BPI) merged
with the Far East Bank & Trust Co. (FEBTC). BPI absorbed
the FEBTC employees, it being the surviving corporation. At
the time of merger, BPI was unionized, with BPIEU as the
collective bargaining agent. FEBTC was not unionized, hence,
its employees did not belong to any labor union. The collective
bargaining agreement (CBA) between BPI and BPIEU contains @
"Kapatiran sa Meat and Canning Division
v. Ferrer-Calleja, 162 SCRA al
‘Reyes v. Trajano, 209 SCRA 484
ae
art. 264 BOOK FIVE — LABOR RELATIONS aa
TITLE V -- COVERAGE
union security agreement which requires new employees falling
within the bargaining unit to join BPIEU ag a condition for their
continued employment. Some of the FEBTC employees refused
to join the Union. Thus, BPIEU requested BPI to terminate
the employment of the employees who refused to join the union
pursuant to the union security agreement. BPI contended that
the FEBTC employees were not covered by the Union Security
Clause of the CBA because the said employees were not new
employees but “absorbed” employees.
ISSUE: Whether the FEBTC employees who were
absorbed by BPI upon merger with FEBTC should be covered by
the Union Shop Clause of the existing CBA.
HELD: The FEBTC employees who were absorbed by BPI
upon merger with FEBTC should be covered by the Union Shop
Clause of the CBA. Since the FEBTC employees are deemed
covered by the Union Shop Clause, they should join BPIEU,
the certified bargaining agent. Their joining the certified union
would, in fact, be in the best interests of the FEBTC employees
for it unites their interests with employees in the bargaining
unit. It encourages employee solidarity and affords sufficient
protection to the majority status of the union during the life of
the CBA which are the precisely the objectives of union security
clauses, such as the Union Shop Clause involved herein.
ART. 254. Right of Employees in the Public Service. --
Employees of government corporations established under
the Corporation Code shall have the right to organize and
to bargain collectively with their respective employers. All
other employees in the civil service shall have the right to
form associations for purposes not contrary to law."
COMMENT:
Types of Employees in the Public Service
There are three (3) types of employees in the public service,
namely:
(1) Employees of the Government;
(2) Employees of GOCCs” with original charters;
ws amended by E.O. No. 111
Government-Owned or Controlled Corporations

LABOR LAW 2
220 THE LAW ON LABOR RELATIONS
(3) Employees of GOCCs established under the Corpo.
ration Law.
Of the three (3) types of employees in the public service, 9 nly
f GOCCs established under the Corporation Code Hi
organization and b argainte
ees o
emiply the right
given j01
to form or join a labor
ta
collectively with their respective employers.
Lumanta v. NLRC
170 SCRA 79
FACTS: Food Terminal, Inc. (FTI) was a government.
owned corporation created and organized under the Corporation
Law. For failure of FTI to pay the retrenched employees their
separation pay, the affected employees filed with the Arbitration
Branch of the National Labor Relations Commission (NLRC)
a complaint for unpaid separation pay. FTI moved to dismiss
the complaint on the ground of lack of jurisdiction. It argued
that being a government-owned and controlled corporation,
its employees are governed by the Civil Service Law not by
the Labor Code, and that claims arising from employment fall
within the jurisdiction of the Civil Service Commission and not
the NLRC.
ISSUE: Whether the claim falls within jurisdiction of the
NLRC.
HELD: The claim falls under the jurisdiction of the NLRC
because FTI is a government-owned and controlled corporation
organized under the Corporation Law.
Paloma v. PAL
558 SCRA 94
FACTS: After 35 years of continuous service
Philippine Airlines (PAL), PALOMA retired from service.
PAL, a corporation organized under the Corporation Law, but
later became government controlled, paid PALOMA the total
amount of P5,163,325.64 which represented his retirement pay
and accrued vacation leave pay. Subsequently, PALOMA filed
before the Arbitration Branch of the National Labor Relations
Commission (NLRC) a complaint for commutation of accrue
sick leaves totaling 392 days pursuant to Executive Order
1077 which allows retiring government employees to commute,
without limit, all accrued vacation and sick leave credits.
ISSUE: Whether Executive Order 1077 is applicable.
HELD: Notwithstanding that PAL, during the
period
ent was a government-cont corporation in the sense
at the GSIS owned a controrolle d
lling interest over its stocks,
ee
Art. 254
Art. 264 BOOK FIVE - LABOR RELATIONS 221
TITLE V — COVERAGE
Executive Order 1077 is not applicable because PAL never ceased
to be operated as a private corporation. It was never subjected
to the Civil Service Law. Through the years, PAL functioned
as a private corporation and managed as such for profit. Their
personnel were never considered government employees. In fact,
Secretary of Labor Blas Ople rhetorically asked how PAL can be
covered by the civil service law when there are three (3) CBAs
in PAL, one for the ground crew, one for the flight attendants,
and one for the pilots. When public sector unionism was just an
abstract concept, labor unions in PAL with the right to engage
in strike and other concerted activities were already active.
Given the foregoing considerations, PALOMA cannot plausibly
be accorded the benefits of Executive Order 1077. What governs
Paloma’s entitlement to sick leave benefits and the computation
and commutation of creditable benefits is not Executive Order
1077, but PAL’s company policy on the matter.
Government employees and employees of GOCCs with original
charters are not allowed form or join a labor organization, but they
can form or join associations for the furtherance and protection of
their interests. Section 2 of Executive Order No. 180 provides that:
“Sec. 2. All government employees can form, join or
assist employees’ organizations of their own choosing for the
furtherance and protection of their interests. They can also form,
in conjunction with appropriate government authorities, labor-
management committees, work councils and other forms of
workers’ participation schemes to achieve the same objectives.”
The right accorded to government employees to form or join
associations is not available to:
with (1) Members of the Armed Forces;
(2) Members of the Philippine National Police;
(3) Members of the Bureau of Fire Protection; and
(4) Members of the Bureau of Jail Management and
Penology;?!
(5) High-level employees whose functions are normally
considered as policy-making or managerial; and
(6) Employees whose duties are of highly confidential in
nature.”
“ISec. 4, E.O. No. 180
“Sec, 3, E.O. No. 180
 Pe
i
LABOR LAW 2 255 BOOK FIVE — LABOR RELATIONS
R RELATIONS Art. 255 223
THE LAW ON LABO TITLE V — COVERAGE
=

I
il vernm ent employees are given the right to form medical, or educational institutions, whether operating for profit
or agata for the furtherance and protection of their
or not, shall have the right to self-organization and to form, join,
tively to ask ier
rabereati they can neither strike nor bargain collec or assist labor organizations of their own choosing for purposes
oyment. The reas on for this ig of collective bargaining. Ambulant, intermittent and itinerant
better terms and conditions of empl nt of all government
of empl oyme workers, self-employed people, rural workers and those without
because the terms and conditions origi nal ch arters, any definite employers may form labor organizations for their
of GOCCs with
employees, including employees mutual aid and protection.”
are governed by law. Such being the case, the term s and conditions
oyme nt can be modi fied not by collective bargaining lint
of their empl Therefore, employees of non-profit institutions can form a
by an act of Congress.” union and bargain collectively with their employer.

ART. 255. Ineligibility of Managerial Employees to Join Rank-and-File Employees

—
Any Labor Organization, Right of Supervisory Employees,
or form Rank-and-file employees are those who are neither managerial
Managerial employees are not eligible to join, assist
nor supervisory.” They can either be daily paid or monthly-paid.
any labor organization. Supervisory employees shall not
be eligible for membership in collective bargaining unit of Daily-paid employees are those who are paid only on the days they
the rank-and-file employees, but may join, assist or form worked and on regular holidays. Monthly-paid employees are those
who are paid every day of the month, including unworked rest days,
separate collective bargaining units and/or legitimate labor
special holidays and regular holidays. Monthly-paid rank-and-file
organizations of their own. The rank-and-file union and the
employees can join the union of daily-paid employees.”
supervisors’ union operating within the same establishment
may join the same federation or national union.”
Supervisory Employees
COMMENT: Supervisory employees are those who, in the interest of the
employer, effectively recommend managerial actions such as laying
Who Are Qualified to Form or Join a Labor Organization
down and execution of management policies or the hiring, transfer,
Only the following employees are given the right to form, join suspension, lay-off, recall, discharge, assignment, or discipline
or assist in the formation of a labor organization: employees using their independent judgment.”
(1) Rank-and-file employees: and The supervisory status of an employee is determined not by the
Position title but by the nature of the employee’s functions. The point
(2) Supervisory employees. to consider is whether the employee has the power to effectively
These employees could be employed in any kind of recommend the laying down and execution of management policies,
establishment, whether commercial, industrial, and agricultural including personnel movement, using his independent judgment.
enterprises or in religious, charitable, medical, and educational
_ _ There is neither effective recommendation nor independent
institutions, whether operating for profit or not. This could be
Judgment if the power to hire and fire is subject to evaluation,
gleaned from Article 253 of the Labor Code which reads as follows: review and final action by the department heads and other higher
executives of the company.” If the power is merely routinary or
o “Art. 253. Coverage and Employees Right to Self-
teed — All persons employed in commercial, industrial
and agricultural enterprises and in religious, charitable,
“aaa

watt. 219(m), Labor Code

moeneral Rubber v. BLR, 255 SCRA 283
23
Ki Employees Association v. Court of Appeals, 175 SCRA 686 at 219(m), Labor Code
PICOP v. Laguesma, 330 SCRA 205
amended by P.D. No. 570-A: R.A. No. 6715: and R.A. No. 9481
 ye

LABOR LAW 2 Art. 255 Art. 255 BOOK FIVE — LABOR

ONS
THE LAW ON LABOR RELATI
RELATIONS
224 TITLE V — COVERAGE 225

"
MAG the position is not supervisory.” Thus, the the rank-and-file whenever they ask for the discipline or dismissal
Welder, or Chic
as Chief Mechanic, Chiefory of subordinates.” If supervisors and rank-and-file employees are
Prepare af aes status, Saar
indicative of supervis allowed to form a single union, their conflicting interests will
Carpenter is not necessarily is the number one mechani
impair
designation merely connotes that he their relationship and adversely affect discipline, because the
of the same category.% supervisors might refuse to carry out disciplinary
welder, or carpenter among the many their co-member rank-and-file employees.2”
measures against
the category of supervisory
Foremen squarely fall under
employees. In the modern industrial plant, they are at once a link supervisory Union and Rank-and-File Union Can Join the Same
gement
in the chain of command and the bridge between mana Federation
orma nce of their work , fore men use their
and labor. In the perf
aree mpow ered to make reco mmen dati ons While supervisory employees cannot join the union of rank-
independent judgment and
for managerial action with respect to those employees under their and-file employees, the union of supervisors and the union of rank-
control." Other examples of supervisory employees are: cashiers, and-file employees can validly affiliate with the same federation.
and controllers of a bank,” credit and collection supervisor,” Article 255 of the Labor Code expressly provides that:
assistant branch head, branch bookkeeper, and branch head of the “ART. 255. Ineligibility of Managerial Employees to Join
accounting department of a bank.” Any Labor Organization; Right of Supervisory Employees — xxx
The rank-and-file union and the supervisors’ union operating
Supervisors and Rank-and-File Cannot Lump into a Single Union within the same establishment may join the same federation or
national union.”
Supervisory employees are given the right to form or join a
labor organization. However, they cannot join the union of rank-and-
Adamson & Adamson, Inc. v. CIR
file employees — they should form their own separate organization. 127 SCRA 268
This is clear from the provisions of Article 255 of the Labor Code, the
pertinent portion of which reads as follows: FACTS: There are three (3) unions at Adamson &
Adamson, Inc., namely: the UNION OF SALESMEN, the
“ART. 255. Ineligibility of Managerial Employees to Join UNION OF SUPERVISORS, and the UNION OF RANK-AND-
Any Labor Organization; Right of Supervisory Employees — xxx FILE employees. All the three unions affiliated themselves with
Supervisory employees shall not be eligible for membership in Federation of Free Workers (FFW). Adamson & Adamson, Inc.
questioned the affiliation of the unions with the same federation
collective bargaining unit of the rank-and-file employees, but on the ground that the affiliation of the three (3) unions with
may join, assist or form separate collective bargaining units
the same federation practically transforms them into a single
and/or legitimate labor organizations of their own. xxx”
union because the three (3) unions would now be governed by
the constitution and by-laws of the federation.
The reason for the segregation is the difference in their
interests. In the area of collective bargaining, their interests are mo HELD: The contention of Adamson & Adamson, Inc. is
identical. The needs of one are different from those of the other: without merit. Notwithstanding the affiliation, the three (3)
unions remained a basic unit free to serve the common interest
In disciplinary matters, supervisors act contrary to the interests of of all its members. The inclusion of the name FFW after the
name of the local unions does not mean that the local unions
Cannot stand on their own. Neither can it be construed that
#PAFLU v. BISCOM, 8 SCRA their personalities are so merged with the mother federation
700
#National Merchandising Corp. that for one difference or another they cannot pursue their own
31p; v. CIR, 7 SCRA 598
. Pier 8 Arrastre
& Stevedoring Services v. ways, independently of the federation.
Roldan-Confessor, 241 SCRA
2NATU v. Torres, 239 SCRA -
546
a panday v. NLRC, 209
SCRA 122
mi Bank ofCantilan v. Julve, “Philippine Phosphate v. Torres, 231 SCRA 335
517 SCRA 17 De La Salle University Medical Center v. Laguesma, 294 SCRA 141, 148
8 Lithographic Services, Inc.
v. Laguesma, 205 SCRA
12
 B
ka
LABOR LAW 2 255 get BOOK FIVE — LABOR RELATIONS
RELATIONS
= THE LAW ON LABOR TITLE V— COVERAGE ner

Alien Employees na o who Are Disqualified from Forming or Joining a Labor Organization
Alien employees can form or join a labor| organization Under The following employees are disqualified from forming or
the following condition
s: joining a labor organization:
s, and
(1) they have valid working permit (1) Managerial employees;
lar rights to Filipin,
(2) their country grants simi dential employees who have access to labor
gn Affairs, Confi
(2) matte
workers as certified by the Department of Forei relations rs;*!

This could be gleaned from the provisions of Article 284 of the (3) Employees-members of cooperatives;
Labor Code which reads as follows: (4) Government employees:4
“ART. 284. Prohibition Against Aliens, Exceptions. -- All (5) "Employees of GOCCs" with original charters:“ and
aliens, natural, or juridical, as well as foreign organizations are
strictly prohibited from engaging directly or indirectly in all forms (6) Workers who are intermittent, itinerant or without
of trade union activities without prejudice to normal contacts definite employers.“
between Philippine labor unions and recognized international
labor centers: Provided, however, That aliens working in the Managerial Employees
country with valid permits issued by the Department of Labor
and Employment, may exercise the right to self-organization Managerial employees are those vested with powers or
and join or assist labor organizations of their own choosing for prerogatives to lay down and execute management policies and/or
purposes of collective bargaining, Provided, further, That said hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
aliens are nationals of a country which grants the same or employees.”
similar rights to Filipino workers.” [emphasis supplied]
The managerial status of an employee is determined not by the
Security Guards
nomenclature or title of the job but by the nature of the employee's
. Security guards can form or join a labor organization. They may functions.” The point to consider is whether the employee possesses
join the rank-and-file union or the supervisory union, depending on authority to act in the interest of his employer on his independent
their rank. judgment.” Thus, the mere fact that an employee is designated as
“manager” does not ipso facto make him one. The designation should
When an Employee Qualifies for Union Membership be reconciled with the actual job description of the employee, for it
An employee is eligible to join a labor organization on the first is the job description that determines the nature of employment.”
day of his employment.” This could be gleaned from Article 292(c) of
the Labor Code which provides as follows: eee
“Art. 255, Labor Code, as amended
“ART. 292. Miscellaneous Provisions — xxx (c) Any “Sugbuanon Rural Bank v. Laguesma, 324 SCRA 425
employee, whether employed for a definite period or “Cooperative Rural Bank of Davao City v. Ferrer-Calleja, 165 SCRA 725
Seeing not, shall,
on his first day of service, be cons BSSSEA v. CA, 175 SCRA 686
idered an employee
T purposes of membership “Government-Owned or Controlled Corporations
in any labor union.”
“Art. 291, Labor Code, as amended
“Art. 253, Labor Code, as amended
wrt. 219(m), Labor Code, as amended
E3M (eralco v,Secretary Engineering Equipment, Inc. v. NLRC, 133 SCRA 752
of Labor, 197 SCRA “Pagkakaisa ng mga Manggagawa sa Triumph v. Ferrer-Calleja, 181
275
D.O No. #bta-1, Rule II, Book V, Rules Implementing
a the Labor Code, as amended by SCRA 119
“Paper Industries Corporation of the Philippines v. Laguesma, 330 SCRA 295
 LABOR LAW 2 Art. 255
228 THE
LAW ON LABOR RELATIONS Art. 255 BOOK FIVE — LABOR RELATIONS 229
TITLE V — COVERAGE
(a) not
Among the characteristics of managerial rank are: requir
(b) es
subject to the rigid observance of regular office hours, of their loyalty. Moreover, the union can also become company-
the consistent exercise of discretion and judgm ent; (c) output dominated with the presence of managerial employees.”
period; (d) manages
given
cannot be standardized in relation to a
a customarily recognized depar tment or subdivision; (e) has ihe Confidential Employees
hourly
authority to hire or fire other employees; and (f) neither paid Confidential employees are those who (a) assist or act in
wages nor subject to maximum hours of work.®! a confidential capacity, in regard (b) to persons who formulate,
Examples of managerial employees are: captain of a determine, and effectuate management policies specifically in the
vessel,3? major patron, minor patron, chief mate, chief engineer field of labor relations.
department manager, assistant manager,” farm administrator,ss These two criteria are cumulative, and both must be met if
route manager, accounting manager,” bank manager, Personne] an employee is to be considered a confidential employee — that is,
officer. the confidential relationship must exist between the employee and
his superior officer; and that officer must handle the prescribed
Article 255 of the Labor Code expressly disqualifies managerial responsibilities relating to labor relations.
employees from forming, joining, or assisting in organizing a labor
Therefore, not all confidential employees are disqualified from
organization. Thus:
forming or joining a labor organization. Only those who have access
to labor relations information are disqualified. Employees who
“ART. 255. Ineligibility of Managerial Employees to Join
have access to information which is confidential from the business
Any Labor Organization; xxx — Managerial employees are not
standpoint, such as financial information or technical trade secrets,
eligible to join, assist or form any labor organization. xxx”
are not disqualified from forming or joining a labor union.”
The reason for disqualifying managerial employees is the An important element of the “confidential employee rule”
evident conflict of interest brought about by the nature of their is the employee’s need to use labor relations information. Thus,
position. In the field of collective bargaining, managerial employees in determining the confidentiality of certain employees, a key
are supposed to be on the side of the employer. They act as its question frequently considered is the employees’ necessary access to
representatives to ensure that its interests are well protected. confidential labor relations information.“ Examples of confidential
The employer is not assured of such protection if these employees employees who have access to labor relations matters are: legal
themselves are union members. In such a situation, collective secretaries,® executive secretaries,” and employees of the human
bargaining can become one-sided.” If managerial employees are resources department.
allowed to form or join a union, the employer might not be assured The reason behind the disqualification is the potential conflict of
interest. If confidential employees who have access to labor relations
information are allowed to unionize, they could be governed by their
"Engineering Equipment, Inc. v. NLRC own motives rather than the interest of the employers. It is not far-
, 133 SCRA 752
"Inter-Orient Maritime Enterprises
v. NLRC, 235 SCRA 268
880ciation of Marine Officers v. Lague
sma, 239 SCRA 460
NATU v. Torres, 239 SCRA 546 “Bulletin Publishing v. Sanchez, 144 SCRA 628, Golden Farms, Inc. v. Ferrer-
“De Ysasi v. NLRC, 231 SCRA
173
Calleja, 175 SCRA 471
#United Pepsi Cola Supervis “San Miguel Corp. Supervisors and Exempt Employees Union v. Laguesma,
Pi : ors Union v. Laguesma, 288 277 SCRA 370
United Pepsi Cola Supervisors SCRA 15
Union v. Laguesma, 288 SCRA
won ank aof San Isidro v, - P Paez, 15 “3Supbuanon Rural Bank v. Laguesma, 324 SCRA 425
Surigao del Norte Electric
Cooperative v. NLRC, 309
508 SCRA
| 245 “4San Miguel Corp. Supervisors and Exempt Union v. Laguesma, 343 Phil. 143
“National Associati , SCRA 233 2 5 #5Pier 8 Arrastre 8: Stevedoring Services, Inc. vs. Roldan-Confesor, 241 SCRA
Chapter v. Torres, 239 SCRA a Union-Republic Planters Bank Supervisors 94
®Metrolab Industries, Inc. v. Roldan-Confesor, 324 Phil. 416
 Ho
ka
LABOR LAW 2 a
bs
R RELATIONS Art. 255 BOOK FIVE — LABOR RELATIONS 231
THE LAW ON LABO TITLE V — COVERAGE
aso

no
:
collective
ining,
bargaining, they might
St :
jeopay, :
fetched that during are are duty-bound to protect. Along the kaa Government Employees
they come the K
that interest which ial employees may be Government employees refer to those employed by the
on in g, con fid ent
line of reas
a ee tage
apnea! said employees may act
because should as spies National Government or any of its political subdivisions and to
not be required to handle lahat those employed by government-owned and controlled corporations
with special charters.”
relations matters through employees who are represented by the
Who in the
union with which the company 1S required to deal and for Government employees are disqualified from forming a labor
normal performance of t heir duties may obtain advance information union because the terms and conditions of their employment are
wit h reg ard to con tra ct negotiations, o, fixed by law. Such being the case, only Congress can prescribe or
of the company’s position modify the terms and conditions of their employment. Article 291 of
other labor relations matters.”
the Labor Code expressly provides that:
tly
It is true that Article 255 of the Labor Code does not direc
prohibit employees Who have access to confidential labor relations “ART. 291. Government Employees. — The terms and
information from joining, forming or assisting in the formation of conditions of employment of all government employees,
a labor organization. Nevertheless, they are disqualified under
including employees of government-owned and controlled
corporations, shall be governed by the Civil Service Law, rules
the doctrine of necessary implication. Applying this doctrine, the and regulations. Their salaries shall be standardized by the
es
disqualification accorded to managerial employees equally appli National Assembly as provided for in the New Constitution.
to confi denti al empl oyee s beca use in the norm al cour se of their ”
XXX.
duties they become aware of management policies relating to labor
relations.” The term “government-owned and controlled corporations”
as used in Article 291 of the Labor Code, does not refer to those
Employees-Members of Cooperatives organized under the Corporation Law.” This means that employees
of government-owned and controlled corporations organized under
A cooperative is an organization composed primarily of the Corporation Law enjoy the same rights as employees of private
small producers and of consumers who voluntarily form business
establishments, hence, they can form or join a labor organization
enterprises which they themselves own, control, and patronize.”
and bargain collectively. This could be gleaned from the provisions
To fall within the disqualification, the employee must at the of Article 254 of the Labor Code which reads as follows:
same time be a member of the cooperative. The disqualification does
not extend to employees who are not members of the cooperative.” “ART. 254. Right of Employees in the Public Service —
The reason for the disqualification is because the members Employees of government corporations established under the
are co-owners of the cooperative.” Since, they are co-owners, they Corporation Code shall have the right to organize and to bargain
cannot bargain with themselves,” collectively with their respective employers. xxx”

Ambulant, Intermittent, Itinerant and Self-Employed Workers

Ambulant, intermittent, itinerant workers, self-employed

ney. Torres, 239 SCRA People, rural workers and those without any definite employers
546
an Miguel Corp. Supervisors cannot form a labor organization because collective bargaining is
and Exempt Union v. Lag
t is implied in a statute is uesma, 343 Phil.sah 18is not feasible for these types of employees.” However, they can join or
a t whic!
expressed (NATU v. Torres,
"Sugbuanon Rur 239 SCRA 546), PIAN eee form organizations for their mutual aid and protection.
al Bank
v. Laguesma, 324 SCR
A 425
"Sec. 2, PD. No. 175
2B ey
.
Boga pa NI Kr "Sec. 2(a), Rule I, Book III, Rules Implementing the Labor Code
Cedpeeat
r p ural ; ank ive v. Ferrer-Calleja, 180 SCRA 740
of Davao City y, Ferr "'PNOC-EDC v. Leogardo, 175 SCRA 26, PNOC v. NLRC, 201 SCRA 487
er-Calleja, 165 SCRA 725 "Sec. 2, Rule II, Book V, Rules Implementing the Labor Code
Ministry of Labor and Emp
loyment, 173 SCRA 697
 BT
THE LAW ON LABOR RELATIONS
OR LAW 2
Att, 256 Art. 256 BOOK FIVE - LABOR RELATIONS Ko
232
TITLE V- COVERAGE
Disqualification
Constitutionality of the ISSUE: Whether the petition for certification election
‘ ification of the aforementioned employees ;, should be granted.
righ tto a
exam atlenal does not violate of the Ma HELD: The petition for certification election should
ve y about org anizing
organization because Malagasang be granted, but the 271 professional and technical employees
for collective bargaining Purposes
joining a labor organization, l.e., should be excluded, because they are not supervisory employees
or joining an association fe
It does not prohibit them from forming but rank-and-file. Hence, they cannot validly join PMPI, which
their mutual aid and protection. is a union of supervisors. PMPI is supposed to be a union of 125
supervisors. If the 271 professional and technical employees are
not excluded, PMPI will turn out to be a rank and file union
ART. 256. Effect of Inclusion as Members of Employees Outside because the rank-and-file outnumbers the supervisors.
of the Bargaining Unit. — The inclusion as union members of
employees outside the bargaining unit shall not be a ground
However, if the union itself is composed of a mixture of rank-
for the cancellation of the registration of the union. Saig
and-file and supervisory employees, cancellation of the registration
employees are automatically deemed removed from the list may be warranted because the organization itself is defective,
of membership of said unions.”
considering that Article 255 of the Labor Code forbids the lumping
of supervisors and rank-and-file employees into a single union. This
COMMENT: organizational infirmity cannot be remedied by simply excluding the
supervisory employees from the union membership. As held in the
Effect If Some Union Members Do Not Belong to the Bargaining
Unit case of Toyota Motors Philippines v. TMPCLU:”

Union membership of employees who are not covered by “xxx a labor organization composed of both rank-and-
the collective bargaining unit, cannot be invoked as a ground for file and supervisory employees is no labor organization at
cancellation of the registration of the union. The said employees will all. It cannot, for any guise or purpose, be a legitimate labor
merely be deleted from the list of union members. For example, if organization. Not being one, an organization which carries a
mixture of rank-and-file and supervisory employees cannot
the bargaining unit is composed of rank-and-file field personnel,
possess any of the rights of a legitimate labor organization,
the inclusion of rank-and-file office employees as union members
including the right to file a petition for certification election
will not per se warrant the cancellation of the registration of the
for the purpose of collective bargaining. It becomes necessary,
union. The office employees will simply be removed from the list therefore, anterior to the granting of an order allowing
of union members. certification election, to inquire into the composition of any labor
organization whenever the status of the labor organization is
Philippine Phosphate v. Torres challenged on the basis of Article 255 of the Labor Code.”
301 Phil. 338
FACTS: PMPI Dunlop Slazenger v. SOLE
is a union of supervisory employees
of Philippine Phosphate. 360 Phil. 304
Its membership consists of 125
Supervisors, and 271 professional and technic FACTS: Dunlop Slazenger Staff Association, a supervi-
PMPI filed a petition for certification electio al employees. sory union composed of twenty-seven (27) supervisors,
it op certified
n praying that six (6)
as the bargaining agent of the supervisory, managerial employees, one (1) confidential employee, and twen-
PU gepil and technical employees of Philippine ty-six (26) office personnel and technical employees, filed
Phosphate. a peti-
she ma Phosphate opposed the petition on the ground that tion for certification election praying that it be certified as the
a ee and technical employees are not collective bargaining agent of the supervisors, office personnel
supervisory
Fa Uo Hi rank-and-file, considering that they are and technical employees of Dunlop Slazenger.
mediate direction and supervision of its supervi under
sors.

78As amended by R.A 268 SCRA 573

. No. 9481
 Sits
OR LAW 2 . 257
THE LA W ON LA BOR RELATIONS Art. 257 BOOK FIVE — LABOR RELATIONS 235
a TITLE V — COVERAGE
: ther Dunlop Slazenger Staff Association tain
l
nnel and te chnica
a supervisors, office perso “xxx Section 3, Art. XIII, of the 1987 Constitution
Vi
underscores the right of the workers to organize with others
employees. or to join any labor organization which he believes can assist
f Association cannot
HELD: Dunlop Slazenger Staf sonnel and technica] and protect him in the successful pursuit of his daily grind.
validly represent the s upervisors, office per The choice is his. Any attempt on the part of management
nization itself is defective,
employees because the orga or employers to curtail or stifle this right of the workers will
rvisors ang
considering that it is composed of a mixture of supe be deemed unconstitutional and considered as unfair labor
rank-and-file employees. The office per sonnel and technica] practice on the part of management. Briefly, this right to self-
ees — they are rank.
employ
employees are not supervisory of
organization is a fundamental right — to give the workers the
file empl oyee s, henc e, disq ualified from joining a union freedom to form any labor organization voluntarily without fear
and- ly dele ting
supervisors. The infi rmity cannot be remedied by simp of suppression or reprisal from management. xxx”
the rank-and-file employees from the list of membership.
ion has no
Needless to stress, Dunlop Slazenger Staff Associat
legal right to file a certification election to represent a bargaining
unit composed of supervisors for so long as it counts rank-and-
file employees among its members.

ART. 257. Non-Abridgment of Right to Self-Organization,

— It shall be unlawful for any person to restrain, coerce,
discriminate against or unduly interfere with employees
and workers in the exercise of the right to self-organization.
Such right shall include the right to form, join, or assist labor
organizations for purposes of collective bargaining through
representatives of their own choosing and to engage in lawful
concerted activities for the same purpose or for their mutual
aid and protection, subject to Article 264 (now Article 279) of
this Code.”

COMMENT:
Freedom of Association

This8, Article
Section Article stresses the freedom of association enshrined in
III of the Constitution, which expressl
y provides
lc and(the
a of the people,
right sectors,
private to including those employed in the pub"
Purpneg not contrary to lawform unions, associations, or
societies
TURO shall not be abridged.” The right to pr
1s a fundamental right
which
self
should not be circum”
Rubber n the words
ubber Philippin of the Supreme
es v. Secretar y Court in the case of FurusaW9
of Labor:*!

“As amended b
"282 SORA 635,641,
'Y B.P, Blg.
 Art. 258 BOOK FIVE — LABOR RELATIONS sai
TITLE VI — UNFAIR LABOR PRACTICES

No criminal prosecution under this Title may be

instituted without a final judgment, finding that an unfair
TITLE VI labor practice was committed, having been first obtained
in the preceding paragraph. During the pendency of such
UNFAIR LABOR PRACTICES administrative
prescription
proceeding,
of the criminal
the running
offense herein
of the period
penalized shall
of

be considered interrupted: Provided, however, that the final

CHAPTER | judgment in the administrative proceedings shall not be
binding in the criminal case nor be considered as evidence of
CONCEPT guilt but merely as proof of compliance of the requirements
therein set forth.’

ART. 258. Concept of Unfair Labor Practice and Procedure COMMENT:

for Prosecution Thereof. — Unfair labor practices violate
the constitutional right of workers and employees to
self-organization, are inimical to the legitimate interests
of both labor and management, including their right to
bargain collectively and otherwise deal with each other
in an atmosphere of freedom and mutual respect, disrupt
industrial peace and hinder the promotion of healthy and
stable labor-management relations.
Consequently, unfair labor practices are not only
violations of the civil rights of both labor and management
but are also criminal offenses against the State which shall be
subject to prosecution and punishment as herein provided.
Subject to the exercise by the President or by the
Secretary of Labor and Employment of the powers vested in
them by Articles 263 (now Article 278) and 264 (now Article
279) of this Code, the civil aspects of all cases involving unfair
labor practices, which may include claims for actual,
moral,
exemplary and other forms of damages, attorney’s fees and
oa affirmative relief, shall be under the jurisdic
tion of
e Labor Arbiters. The Labor Arbiters shall give
utmost
priority to the hearing and resolution of all cases involving
unfair labor practices. Th ‘thin
thirty (30) calend ar ey shall resolve such cases wit;
a
for decision. days from the time they are submitte
Meaning of Unfair Labor Practice
The term “unfair labor practice” does not refer to every unfair
act or decision of an employer.” It refers only to those acts listed in
Articles 259 and 260 of the Labor Code.”
The Essence of Unfair Labor Practice
Unfair labor practices are acts that violate the right of
employees to self-organization. This could be gleaned from the
provisions of Article 258 of the Labor Code, the pertinent portion of
which reads as follows:
“ART. 258. Concept of Unfair Labor Practice and
Procedure for Prosecution Thereof -- Unfair labor practices
violate the constitutional right of workers and employees to self-
organization, are inimical to the legitimate interests of both labor
and management, including their right to bargain collectively
and otherwise deal with each other in an atmosphere of freedom
and mutual respect, disrupt industrial peace and hinder the
promotion of healthy and stable labor-management relations.”
Without this element of “self-organization,” the acts, no matter
how unfair, cannot be considered as unfair labor practices.“ Thus,
an employer does not commit unfair labor practice if it dismisses
aa

Recovery of civi ‘As amended by B.P. Blg. 70; and R.A. No. 6715
ings shall bar recoy liability in the administrative proceed” *Great Pacific Life Employees Union v. Great Pacific Life, 303 SCRA 113
ery under the Civil
Code. SAllied Banking v. CA, 416 SCRA 65; GSWU-NAFLU v. NLRC, 504 SCRA 692
‘PEU v. Philippine Global Communications, 495 SCRA 214; Bisig ng
Manggagawa v. NLRC, 569 SCRA 122
236
 M
LABOR LAW 2 oag
art. 268 BOOK FIVE
— LABOR
TITLE VI — UNFAIR LABORRELAT IONS
S
BOR RELATION aes
THE LAW ON LA PRACTICES
a
os labor organization composed
a supervisor for eae The vans is because a supervisor Pain. against the State. Article 258 of the Labor Code expressly provides
under his ma agta d of men under his supervision in View that:
organize a in Na tatgiit involved.” Similarly, an employer dog
of the con na labor practice if it closes a department due ty “ART. 258. Concept of Unfair Labor Practice and Procedure
for Prosecution Thereof — xxx unfair labor practices are not
not gemma
5 Y s, even if it results in the : termination of yn: only violations of the civil rights of both labor and management
sean re eae is because the motive for the closure hag but are also criminal offenses against the State which shall be
ching to do with the right to self-organization.’ Likewise subject to prosecution and punishment as herein provided.”
not commit unfair labor practice if it exacts a promi
Company
Suetnaia who are returning to work, not to destroy Not being an ordinary labor dispute, complaints for unfair
property or commit acts of reprisal against union members who dia labor practice require a more thorough analysis, evaluation, and
not join the strike. The reason is because 1t has nothing to do with appreciation of the factual and legal issues involved.”
self-organization, considering that the employer's act was Intended
to ensure peace and order in the company premises.’
Criminal Prosecution of Unfair Labor Practice

Who Can Commit Unfair Labor Practice
Unfair labor practices can be committed not only by employers
but also by labor organizations.
Against Whom Can Unfair Labor Practice Be Committed?
Considering that unfair labor practices are acts that violate
the right of employees to self-organization, they can be committed
only against an employee who exercises or has exercised his right
to self-organization. It cannot be committed against an employee
who is not connected with any labor organization. Neither can it be
committed against an employee who has not attempted to join a labor
organization. Nor can it be committed against an employee who has
not assisted or contributed to the formation of a labor organization.’
Under this principle, unfair labor practices cannot be committed
against employees who are disqualified from forming or joining
a labor organization, like managerial employees or confidential
employees who have access to labor relations information.
The criminal aspect of unfair labor practice cannot be prosecuted
during the pendency of the administrative proceedings. Only
when there is a final judgment in the administrative proceedings
declaring that unfair labor practice has been committed, can
the criminal prosecution be commenced. Article 258 of the Labor
Code provides that:
“ART. 258. Concept of Unfair Labor Practice and Procedure
for Prosecution Thereof — xxx No criminal prosecution under
this Title may be instituted without a final judgment, finding
that an unfair labor practice was committed, having
been first obtained in the preceding paragraph. xxx” /emphasis
supplied]
Therefore, when the administrative aspect of unfair labor
practice was dismissed, the criminal aspect cannot prosper because
there is no finding that unfair labor practice was committed.
Probative Value of the Administrative Judgment

Unfair Labor Practice — Also The final judgment in the administrative proceedings finding
a Criminal Offense that unfair labor practice has been committed, is not binding in the
NPAUnfair
aga labor Practices are not only violations of the civil rights criminal case. It cannot be considered as an evidence of guilt but
management — they are also criminal offenses merely as proof of compliance with the procedural requirements for
the filing of the criminal case. Article 258 of the Labor Code provides
at:
“Fortich v. Court of Indus
“Phil. Am Embroideries trial RelatiEmbroider ofa
v. - Embroidery eee
634 and Garment Workers Union, 26 SCRA
"Lakas ng Man
: Bgagaw, 22 —_—

“Sterling Products v, ne pi v. Marcelo Enterprises, 118 SCRA # “The Hongkong and Shanghai Banking Corp. v. NLRC, 281 SCRA 509
 Pa
LABOR LAW 2 Art. 258
THE LAW ON LABOR RELA
TIONS art 258 BOOK FIVE — LABOR
ao TITLE VI — UNFAIR LABORRELAT IONS
PRACTICES isi
of Unfair Labor Practice ang
“ART. 258. Concept
final ju dgment
Thereof - xxx the Prescriptive Period of Unfair Labor Practices
Procedure for Prosecution in the
in the administrative proceedings shall not be binding mere ly
case nor be consi dered as evidence of guilt but For the administrative aspect of unfair labor practice, the
criminal prescriptive is one (1) year from the commission of such unfair labor
as proof of compliance of the requirements therein set forth.” practice. Article 305 of the Labor Code provides that:
ice
Degree of Proof to Establish Unfair Labor Pract “ART. 305. Offenses. -- xxx All unfair labor practices
arising from Book V shall be filed with the appropriate agency
To prove the administrative aspect of unfair labor practice, all within one (1) year from accrual of such unfair labor practice,
or
that is required is substantial evidence,” which may be direct otherwise, they shall be forever barred.”
circumstantial." With regard to the crimina l aspect, the degree of
proof required is proof beyond reasonable doubt. For the criminal aspect of unfair labor practice, the pres-
criptive period is one (1) year reckoned from the final judgment in
Burden of Proof the administrative proceedings. This is so because the prescriptive
period does not run during the pendency of the administrative
The complainant has the burden of proving an unfair labor
proceedings. Article 258 of the Labor Code provides that:
practice charge.'”
“ART. 258. Concept of Unfair Labor Practice and Procedure
Who Are Criminally Liable for Unfair Labor Practice? for Prosecution Thereof — xxx No criminal prosecution under
this Title may be instituted without a final judgment, finding
Only the officers or agents of the business entity and the union that an unfair labor practice was committed, having been first
officers, members or agents who have participated in, authorized or obtained in the preceding paragraph. During the pendency of
ratified the unfair labor practice are criminally liable. The pertinent such administrative proceeding, the running of the period of
portion of Articles 259 and 260 of the Labor Code provides that: prescription of the criminal offense herein penalized shall be
considered interrupted: xxx” /emphasis supplied]
“ART. 259. Unfair Labor Practices of Employers — xxx
The provision of the preceding paragraph notwithstanding,
only the officers and agents of corporations, associations or
partnerships who have actually participated in, authorized or
ratified unfair labor practice shall be held criminally liable.”
“ART. 260. Unfair Labor Practices of Labor Organizations
— xxx The provisions of the preceding paragraph notwithstand-
ing, only the officers, members of governing boards, represen-
tatives or agents or members of labor organiza
tions who have
actually participated in, authorized or ratifi i :
labor prac
tices shall be held criminally liable.” r ratified unfair

Philippine Engineeri ,
Confesor, 432 SCRA 308 orPoration v. CIR, 41 SCRA 89; SCBEU-NUBE ""
ka ng Paggawa v. CIR, 25
SCRA 19
amahan n 8g mga Manggagawa
sa Bandolino v. NLRC, 275
SCRA 633
 art, 260 BOOK FIVE — LABOR
TITLE VI — UNFAIR LABORRELAT IONS
PRACTICES =

Provided, That the individual authorization required under

Article 242 (now Article 250), paragraph (o) of this Code shall
not apply to the non-members of the recognized collective
CHAPTER II bargaining agent,
OYERS
UNFAIR LABOR PRACTICES OF EMPL (f) To dismiss, discharge, or otherwise prejudice or
discriminate against an employee for having given or being
about to give testimony under this Code,
shall
ART. 259. Unfair Labor Practices of Employers. — It (g) To violate the duty to bargain collectively as
be unlawful for an employer to commit any of the following prescribed by this Code;
unfair labor practices:
s in (h) To pay negotiation or attorney’s fees to the union
(a) To interfere with, restrain or coerce employee or its officers or agents as part of the settlement of any issue
the exercise of their right to self-organization; in collective bargaining or any other dispute; or
(b) To require as a condition of employment that a (i) To violate a collective bargaining agreement.
person or an employee shall not join a labor organization or
shall withdraw from one to which he belongs; The provision of the preceding paragraph notwith-
standing, only the officers and agents of corporations, as-
(c) To contract out services or functions being
sociations or partnerships who have actually participated
performed by union members when such will interfere with,
in, authorized or ratified unfair labor practice shall be held
restrain or coerce employees in the exercise of their right to
criminally liable.’
self-organization;
(d) To initiate, dominate, assist or otherwise interfere COMMENT:
with the formation or administration of any labor organiza-
Interference, Restraint, or Coercion
tion, including the giving of financial or other support to it
or its organizers or supporters; “ART. 259. Unfair Labor Practices of Employers — It
shall be unlawful for an employer xxx (a) To interfere with,
(e) To discriminate in regard to wages, hours of restrain or coerce employees in the exercise of their right to self-
work, and other terms and conditions of employment in organization”;
order to encourage or discourage membership in any
labor
organization. Nothing in this Code or in any other law shall The test of interference, restraint or coercion is whether the
stop the parties from requiring membership in a recognized employer has engaged in a conduct which reasonably tends to
collective bargaining agent as a condition hinder the free exercise of the employees’ right to self-organization.
for employment,
except those employees who are already members of another Under the “totality of conduct” doctrine, the culpability of an
nag at the time of the signing of the collective employer’s remarks should not only be based on their implications
bargaining
hala Employees of an appropriate collective = they should also be appraised against the background of and in
cae a unit who are not members Conjunction with collateral circumstances. Expressions of opinion by
of the recognize
an employer which though innocent in themselves, were frequently
equivalent
quivalent tomene
the dues aeent may befeesassessed a reasonable fee
and other held to be culpable, because of the circumstances under which
recognized collective bargainin paid b bers of the
brag matag they were uttered, the history of the employer's anti-union bias, or
members accept the benefits nion
under aap
the collecti poate
ve agreeme?”t:

242 1As amended by P.D. No. 570-A; B.P. Blg. 70; and B.P. Blg. 130
 yr
LABOR LAW 2 Art. 959 Art. 269 BOOK FIVE — LABOR RELATIONS
ONS 245
ui THE LA ON LABOR RELATI
W TITLE VI - UNFAIR LABOR PRACTI CES
established collatera] plan of
because of their connection with an they are members of the union and were threatened that
coercion or interference.” the store would be closed if they do not dissolve the union.
Later, Scoty's Department Store dismissed the employee who
Mere attempt on the part of an employer to curtail or stifle the organized the union, for which reason, a complaint for unfair
right of workers to organize or join a union 1s considered a8 unfa: labor practice was filed against Scoty’s Department Store.
labor practice.” The mere fact that the employer S conduct wag ISSUE: Did Scoty’s Department Store commit unfair
susceptible of being resisted, will not negate interference. Neither labor practice?
can it be negated by the fact that it did not produce the intended
HELD: Scoty’s Department Store committed unfair labor
result. Success of purpose is not the criterion in determining Whether
practice because the act of subjecting employees to a series of
an unfair labor practice has been committed." questioning regarding their union membership and their union
Subjecting employees to a series of questioning regarding their activities constitutes interference in the exercise of the right to
union activities or their membership in the union, in such a Way self-organization.
that it hampers the exercise of free choice on their part, constitutes
interference in the right to self-organization. While an employer is PHILSTEAM v. PMOG
15 SCRA 174
not denied the privilege of interrogating its employees as to their
union affiliation, provided the same is for a legitimate purpose and FACTS: The Company received a set of collective
assurance is given by the employer that no reprisals would be taken bargaining proposals from the Union. Immediately thereafter,
against the unionists, nonetheless, any employer who engages in the Company started interrogating and investigating its
employees to find out directly from them if they had joined the
interrogation does so with notice that he risks a finding of unfair
Union or if they had authorized the Union to represent them.
labor practice if the circumstances are such that his interrogation The Union was then constrained to declare a strike on the
restrains or interferes with employees in the exercise of their rights ground of unfair labor practices.
to self-organization.5
ISSUE: Whether the Company committed unfair labor
practice.
Scoty's Department Store v. Micaller
99 Phil. 762 HELD: The Company committed unfair labor practice.
The act of interrogating and investigating its employees to see if
FACTS: The employee, who was a worker of Scoty's they indeed joined the Union is unfair labor practice, because it
Department Store, organized a union. When the management
interferes with or restrains the exercise of the employees’ right
learned about it, the employee was called for questioning
to self-organization.
as to who the members of the union are. Thereafter, one of
the owners of the store went to her house and there again
questioned her regarding her membership with the union. The employer’s motive is a relevant factor in determining
Subsequently, the employee was brought to the house of the
whether an unfair labor practice has been committed. It is for the
company's lawyer where she was again questioned regarding Labor Arbiter, in the first instance, to weigh the employer’s motive
her union activities and made to sign a paper of withdrawal and determine the effect (on the employees) of the employer’s
from the union. Several employees were also asked whether equivocal act.” Direct evidence is not necessary to prove that an
employee was in fact intimidated or coerced by statements of threats
SA by the employer. It is enough that there is a reasonable inference
“Insular Life Assurance Co. Lt that the anti-union conduct of the employer had an adverse effect on
d. Employees Association-NATU v. Insular Life,
37 SCRA 244 self-organization. If it is proven that the true and basic inspiration
“Furusawa Rubber y. Secre for the employer’s act is derived from the employer's union affiliation
“Insular . C 'tary of Lab or, 282 SCRA 635
Life Assurance
37 SCRA 244 o. Ltd. Employees Association-NATU v. Insular Life
ee
5Philippine Ste ivati yes 1 .
SCRA 174 am Navigation v. Philippine Marine Officers Guild, 16 “Republic Savings Bank v. CIR, 21 SCRA 226
 er
LABOR LAW 2 eit
ue THE LAW ON LABOR RELATIONS Art. 259 BOOK FIVE — LABOR RELATIONS 247
TITLE VI — UNFAIR LABOR PRACTICES
nagka annot escape liability for unfair
or activities, the pa a loyer will ascribe a miscong labo of company rules having been brought about by the company
practice.’ Thus, even if the emp alone will not absolve the e Uct to itself, thru the recent employment of the two employees who
the employee, this circumstance Mployep provoked the fight cannot be regarded as a ground to punish the
of liability for unfair labor practice if it is established that the Vice President and Secretary of the union.
N
misconduct was merely used to give semblance of validity to the
dismissal. It must be stressed however, that the right to self-organization
does not take away the inherent prerogative of an employer to
Judric Canning v. Inciong discipline his employees.” An employee cannot avoid liability for
115 SCRA 887
his misconduct by invoking that what he did was a union activity,
FACTS: Six (6) employees actively engaged themselves in because union activity is not a shield for misconduct.” Indeed, the
the organization of a union by soliciting signatures of employees, idea of unfair labor practice is incompatible with dismissal for
When the Company learned of this activity, they were not just cause.” Thus, if the employer dismisses the employee under
allowed to work anymore. a reasonable belief that a misconduct has been committed, the
ISSUE: Is the Company guilty of unfair labor practice? employer cannot be held liable for unfair labor practice. As held by
the Supreme Court in the case of Nevans v. CIR"
HELD: The Company is guilty of unfair labor practice,
because by dismissing the employees merely because they “The CIR was seemingly under the impression that
solicited signatures needed for the formation of the union, the petitioners had committed an unfair labor practice because
Company retaliated against the employees who exercised their they did not prove satisfactorily that the aforementioned case
right to self-organization. of merchandise had been stolen by Sta. Ana. Our point of
inquiry, however, is not whether Sta. Ana is guilty of theft,
Visayan Bicycle v. NLU but petitioner's motive in suspending and then dismissing him.
14 SCRA 5 And since there is neither direct nor circumstantial evidence
thereon, the issue boils down to what was, in all probability, the
FACTS: The Vice President and the Secretary of the
main cause for said suspension and dismissal.
union were instrumental in affiliating the Union with a
Federation. When this came to the knowledge of the Company, “Under the circumstances adverted to above, petitioners
they were warned that if they will not withdraw their had reasonable ground to believe, if not to entertain the moral
affiliation, they will be dismissed from their employment. True conviction that Sta. Ana was the person mainly responsible for
enough, they were later dismissed from their employment for the disappearance of the case of goods consigned to Shurdut
figuring (on the same day) in a fight with two employees who and not delivered thereto, and for which the Company would
were hired only within that week. It was established that the have to indemnify Shurdut in the sum of P2,469.45, or at least,
Vice President and the Secretary of the union were provoked that the nature of his participation therein rendered him
by the two employees into a pre-arranged fight pursuant to the absolutely unworthy of the trust and confidence demanded by
strategy of the Company to give semblance of a lawful cause his position as head checker, and that, accordingly, he should
for their dismissal. be dismissed, not only to punish him as a deterrent to similar
behavior of other employees, but also to protect the reputation
ISSUE: Is the company guilty of unfair labor practice? of the Company.”
HELD: The Company is guilty of unfair labor practice.
The Vice President and the Secretary of the union were in reality
dismissed because of their union activities and not because of
their violation of 4 company rule against fights in the premises
or during working hours. Furthermore, the so-called violation UA

“Royal Interocean Lines v. CIR, 109 Phil. 900

—__._____, “Lopez v. Chronicle Publications Employees Association, 12 SCRA 694
EP Kamn
Philippine Engineer ing Corporation v. CIR, 41
Ormoc Sugar Co. v. OSCO Workers Fraternity Labor Union, 1 SCRA 21
SCRA 89 N23 SCRA 1321
 LABOR LA w2 Art, 259
R RELATIONS Art. 259 BOOK FIVE
THE LAW ON LABO
TITLE VI — UNFA— IRLABOLABO
R RELATIONS
R PRACTICES as
Lopez v. CPEA
12 SCRA 694 A yellow dog contract is an agreement which
requires a person
ion member published in the union Paper, or employee:
o
“The eae oe article entitled “Political Pressure?” which (1) to declare that he is not a member
accused the employer of a criminall, act,which corrupting or of a labor
accusation wag organization;
attempting to corrupt a public officia
on rumors and suspici ons. For that reason, the
based merely (2) to refrain from joining a labor organization;
Contending that
employee was dismissed from employment.
filed a
what the employee did was a union activity, the union (3) to withdraw his membership in a labor organization;
t the employer.
complaint for unfair labor practice agains or
ISSUE: Whether the employer committed unfair labor (4) to quit his employment upon joining a labor
practice.
organization.
HELD: The employer did not commit unfair labor
practice, because the employee was dismissed for committing In the case of National Fastener Co. v. CIR, the employee was
a misconduct. To publish a “suspicion,” which amounts to
requested by the management not to join the union, with a promise
a public accusation, that the employer is exerting political
pressure on a public official to thwart some legitimate activities that he would be given a salary increase if he accedes to the request.
of the employees, which charge, in the least, would sully their However, when the management learned that the employee joined
employer's reputation, can be nothing but an act inimical to the the union, the management served him with a stern warning that
said employer's interest. The fact that the same was made in any little infraction on his part would mean his outright dismissal
the union newspaper does not alter its deleterious character nor
from work. In the complaint for unfair labor practice filed by the
shield or protect a reprehensible act on the ground that it is a
union activity, because such end can be achieved without resort union, the employer contended that if it were true that the company
to improper conduct or behavior. Their act may be considered as intended to discourage union membership, then it could have done
a misconduct which is a just cause for dismissal. better by dismissing more active union officers. In declaring the
employer guilty of unfair labor practice, the Supreme Court held
Requiring an Employee Not to Join a Union that such an act would have made the design too obvious and, no
doubt, would have been riskier for the company to do.
“ART. 259. Unfair Labor Practices of Employers -- It shall
be unlawful for an employer xxx (b) To require as a condition of
employment that a person or an employee shall not join a labor VISTRANCO v. CIR
organization or shall withdraw from one to which he belongs”: 19 SCRA 426
FACTS: VISTRANCO is a business establishment
An employer commits unfair labor practice if an applicant
engaged in loading and unloading of vessels. It refused to engage
for employment is required to sign an employment contract which the services of 139 workers unless they sever their connection
forbids him from joining a union. Likewise, an employer commits with the union.
unfair labor practice if it requires employees to declare that
they are
not members of a union. Similarly, an employer commits unfair labor ISSUE: Is VISTRANCO guilty of unfair labor practice?
practice if it obliges an employee to withdraw his union
membership HELD: VISTRANCO is guilty of unfair labor practice
or to resign from his employment if he will join a union. These because it required the employees to sever their connection with
acts
run counter to Article 259(b) of the Labor the union as a condition for continued employment.
Code.
Anemployment contract
. : which provides
i for any of the foregoing
foreg
stipulations is called a “ello
w dog contract.”

12] SCRA 17
 LABOR LAW 2 Art. 269 BOOK FIVE — LABOR RELATIONS
R RELATIONS 251
THE LAW ON LABO TITLE VI — UNFAIR LABOR PRACTICE
aso S

en's Union
Velez v. PAV Watchm Serrano v. NLRC
107 Phil. 689 880 Phil. 416
employer asked the employee whether FACTS: SERRANO was hired by Isetann Department
FACTS: The
he was a member 0 f the Union. The 2
replied in the Store as a security checker to apprehend shoplifters and
:ve. whereupon, the employer bade himto resign from prevent pilferage of merchandise. When the company decided to
fe ann wat he could
thet it was the only way by which adopt a cost-cutting measure, it decided to phase out its entire
signed the security section and engage the services of an independent
show his loyalty. Fearing to lose his job, the employee
the employer
prepared resignation paper. On another occasion, security agency. For this reason, SERRANO’s employment was
otherwise, he terminated. The loss of his employment prompted him to file a
told another employee to resign from the Union,
signed complaint for unfair labor practice.
would have no work assignment. Hence, the employee
four (4) copies of a prepared affidavit renouncing his union ISSUE: Whether Isetann Department Store committed
membership. unfair labor practice.
ISSUE: Whether the employer is guilty of unfair labor HELD: No unfair labor practice was committed. The
practice. phase-out of the security section constituted a “legitimate
business decision” to obtain reasonable return from its
HELD: The employer is guilty of unfair labor practice investment, which is a right guaranteed to employers under
because he required his employees to resign from the Union as the Constitution.
a condition for their continued employment.
De Ocampo v. NLRC
Contracting Out Services 213 SCRA 652
FACTS: BMC terminated three (3) mechanics (all union
“ART. 259. Unfair Labor Practices of Employers — It shall members) due to cost reduction. Thereafter, BMC contracted the
be unlawful for an employer xxx (c) To contract out services or services of Genmac Machineries to handle the maintenance and
functions being performed by union members when such will repair of its industrial machinery. The Union questioned the
interfere with, restrain or coerce employees in the exercise of legality of the termination of the three (3) mechanics claiming
their right to self-organization”; that the positions held by the three (3) mechanics were not at all
abolished but merely given to Genmac Machineries.
From the aforequoted provision, it can be gleaned that
ISSUE: Whether the engagement of Genmac Machineries
contracting out services or functions performed by union members
to perform the jobs of the three (3) mechanics is valid.
does not per se constitute unfair labor practice. Contracting out
the services performed by union members will be considered as HELD: The engagement of Genmac Machineries to
perform the jobs of the three (3) mechanics is valid. The
unfair labor practice only when it interferes with, restrains, or
determination of whether the mechanics’ services are no longer
coerces employees in the exercise of their right to self-organization. necessary or sustainable, was an exercise of business judgment
The reason is because contracting out services is an exercise of @ on the part of BMC. The wisdom or soundness of such decision
management prerogative.” The determination of whether services is not subject to the discretionary review of the Labor Arbiter in
should be performed by its personnel or contracted to outside the absence of proof that BMC acted in a malicious or arbitrary
agencies belongs to the employer." manner. In contracting the services of Genmac Machineries,
as part of its cost-saving program, the services of the three (3)
mechanics became redundant and superfluous, and therefore,
properly terminable.

Assisting in Organizing a Union

—_—___
13
De Ocampo v. NLRC, 213 SCRA 652; Asian Alcohol v. NLRC, 305 SCRA 416 “ART. 259. Unfair Labor Practices of Employers — It shall
“Shell Oil Workers Uni B be unlawful for an employer xxx (d) To initiate, dominate, assist
Quisumbing, 326 SCRA 172” Shell Co. 89 SCRA 276, 2855 Merale? "
 ME:
LABOR LAW 2 9
ONS aani BOOK
TITLE VI —FIVUNF
E - LABOR RELATIONS
THE LA W ON LABOR RELATI
7 AIR LABOR PRACTICES =
:co : the formatio
interfere with tion or administr
i ation 0 of
or a iia tion, including the giving of financial or other In a certification election proceeding where one of the
zers or supporters ;
any
support to it or its organi
participant-union is charged with unfair labor practice for being
a company union, the certification election proceedings should be
act of support: ing the union: or its organizers 18; suspended, because the complaint for unfair labor practice is a
MAA a labor practice under Article 259(d) of the Labor prejudicial question. This means that the certification election
rt need not be financial -- it can be in the form of proceedings should wait for the outcome of the complaint for unfair
Selgin such as use of the company facilities, Preparation labor practice. To allow the certification proceedings to continue
of constitution and by-laws, allowing union members and officers without waiting for the outcome of the unfair labor practice case,
to be absent with pay, or giving legal counsel to the union or itg may result in the election of a company union and its eventual
members. certification as collective bargaining agent. If the company union is
certified as collective bargaining agent, the certification proceedings
A labor organization, the formation of which has been initiated would be rendered nugatory, because the company union will be de-
or assisted by the employer is called a company union or company. certified and the employer will be ordered to withdraw its recognition
dominated union. A company union or company-dominated union of the union.®
should not be confused with a “company-type” union. A company.
type union is a kind of labor organization composed of employees in Discrimination
the same company.
“ART. 259. Unfair Labor Practices of Employers — It
Velez v. PAV Watchmen’s Union shall be unlawful for an employer xxx (e) To discriminate in
regard to wages, hours of work, and other terms and conditions
107 Phil. 689
of employment in order to encourage or discourage membership
FACTS: The employer instructed his secretary to organize in any labor organization. xxx”
another union in the company. The next day, an organizational
meeting was held during office hours. In that meeting, the From the wordings of the law, it can be readily seen that
employer spoke and promised to help in securing the certificate discrimination per se is not an unfair labor practice. It becomes unfair
of registration. labor practice only when it is intended to encourage or discourage
membership in any labor organization.
HELD: The employer is guilty of unfair labor practice
because it assisted in the formation of a union. Giving wage increases to non-union members covered by the
collective bargaining unit, to the exclusion of union members is an
example of unfair labor practice by discrimination if the motive is to
Oceanic Air Products v. CIR
entice the union members to withdraw their union membership and
7 SCRA 209
discourage the non-union members from joining the union.
FACTS: UNION 1 sent its collective bargaining proposals
to the company. Instead of giving a counterproposal, Discrimination can exist only when one is denied privileges
the given to the other under identical or similar conditions.'” The
Company, on the pretext that it was losing, dismissed the
officers of UNION 1, except the auditor and two (2) member decision of an employer to consider the officers of the union
s which declared an illegal strike, as unfit for reinstatement, is not
of the board of directors. The auditor and the two (2) member
s essentially discriminatory. There can be no discrimination because
of the board of directors were not dismissed
because they joined the employees concerned are not similarly situated. Union officers
UNION 2. Notwithstanding the alleged losses, no member of
NT hived have larger and heavier responsibilities than plain union members.
UNION 2 was dismissed. In f
several employees. - In fact, the Company still hire Union officers are bound to respect the law and to exhort and guide

HELD: U ‘ a
that UNION 2is pi factual circumstances, it is very clear Montemayor, Labor, Agrarian and Social Legislation, vol. 2, p, 304, 1967 Ed.,
mpany union. Citing Rothenberg on Labor Relat
ions :
Caltex v. Philippine Labor Organization, 92 Phil. 1014, 1018
———

LABOR LAW 2 Art, 9 59 Art. 259 BOOK FIVE — LABOR RELATIONS 255
LABOR RELATIONS TITLE VI — UNFAIR LABOR PRACTICES
THE LAW ON
nii

ame. Their: position

iti man dates the m to lead Rizal Cement v. Madrigal
their a kar jectiv® of the Labor Code is to ensure a Stable 10 SCRA 831
by example. me ‘ant fil dustrial peace, the dismissal of undesirable
but dynamic ane’) id and jus tified.” Similarly, the refusal of a, FACTS: The Rizal Cement Workers Union staged a
i rai union members (assigned at the Warehoug e)
labor leaders rea strike at the plant of the Company in Binangonan, Rizal. The
ikers
Plant where the str following day, the warehouseman at the Paco Warehouse in
em an of the strike : at the
t necessarily discriminato received a telephone call from the Manager of the Company
} ts of sabotage, Is no , UY informing him that the Union has staged a strike at the
a was justified by the Company's apprehension Binangonan Plant and advising him to take precautionary
bec bot5 age might als o be committed in the warehouse where the measures in protecting the properties of the company stored
ts were stored.!”
sia ronekiibelt and spare par at the warehouse because the strikers have caused damage to
the Binangonan plant and sabotage may occur. The manager
8 Co., Inc. v. Wise 8 Co., Inc., Employees Union instructed the warehouseman to request the union members
me 178 SCRA 536 to stay meanwhile outside the premises of the warehouse.
Thus, when the workers arrived for work, only the non-union
FACTS: Wise & Co. introduced a profit sharing scheme
When the members were allowed to enter. The Union then charged the
for managers, supervisors, and non-union members.
Company with unfair labor practice for discriminating against
Union learned about this, it requested Management to extend
denied the union members.
such benefit to their members, but the Management
the request. Thereafter, the Management distributed the profit ISSUE: Is the Company guilty of unfair labor practice by
sharing benefit to the managers, supervisors and non-union
discrimination?
members. This prompted the Union to file a notice of strike on
the ground of unfair labor practice allegedly because the union HELD: The Company is not guilty of unfair labor practice
members were discriminated against in the grant of the profit by discrimination. The refusal on the part of the Company to
sharing benefits. allow the union members to work and the requirement that
they stay out of the premises in the meantime was borne
ISSUE: Whether the grant of profit sharing benefits to
out of the Company’s justified apprehension and fear that
employees not covered by the collective bargaining unit is
sabotage might be committed in the warehouse where the
discriminatory.
products, machinery and spare parts were stored, as has been
HELD: There is no discrimination because the situation the case in Binangonan. For discrimination by reason of union
of the employees covered by the collective bargaining agreement membership to be considered unfair labor practice, the same
(CBA) is different and distinct from the employees not covered must have been committed to encourage or discourage such
by the CBA. Unlike union members, the non-union members do membership in the union. It has never been shown that the act
not derive and enjoy the benefits under the CBA. The grant of of the Company was intended to induce the union members to
profit sharing benefit to employees outside the bargaining unit renounce their union membership or as a deterrent for non-
falls within the ambit of managerial prerogative. members to affiliate therewith, nor as a retaliatory measure
for activities in the union or in the furtherance of the cause of
the union.

Insular Life Assurance Co. Ltd. Employees

v. Insular Life
87 SCRA 244
FACTS: The Union went on strike. Because of the issuance
of a writ of preliminary injunction, the striking employees
AN
VGPLEU v. Great Pacific
A an acific Life,
Li 303 SCRA 113,
citing CCCLU v. Continental decided to call off their strike. When the strikers reported
18p:Rizal Cement back to work, the Company required them to secure clearances
y, Madrigal, 10 SCRA
831 from the City Fiscal’s Office, after which, they were screened
 >ae
it:

Art .269
2 9 BOOK FIVE — LABOR RELATIONS
LABOR LAW 257
W ON LA BOR RELATI
ONS TITLE VI — UNFAIR LABOR PRACTICES
THE LA
mg h .
3o
strikers “A
e practically a
i ll
*
e
tte When
e. e the employee. Thus, the employee charged Royal Interocean
bya ma nagement DAG Lines with unfair labor practice allegedly because she was
kerg
e) refused to admit the stri
mm , dismissed for having filed a complaint against the Branch
n co the
kaneactive
pode management "mitte
strike. Manager.
1n
pi were most
y of unfair labor practice by ISSUE: Whether Royal Interocean Lines can be held
ISSUE: Is the Company guilt liable for unfair labor practice.
discrimination?
HELD: The Company is guiltyrate practice
of unfair labor from HELD: Royal Interocean Lines cannot be held liable for
d the active the unfair labor practice. The mere fact that the employee was
they sepa
by discrimination, because
ive strik to a committeewort
ers. It is note hy that the power to re-admit dismissed because she filed a complaint against the Branch
less
p alog composed of persons who have Manager does not by itself constitute unfair labor practice,
s with the picketers during because the filing of complaint which is the cause of the
bagi involved in unpleasant incident reinstatement dismissal was not related at all to the right to self-organization.
the power of
the strike. The mere act of placing is a form of The dismissal of the employee has no relation to union activities;
pers ons hosti le to the strikers,
in the hands of hence, Royal Interocean Lines cannot be held guilty of unfair
discrimination in re-hiring. labor practice.
Employer
Dismissing an Employee for Testifying Against H.G. Henares & Sons v. NLU
It
“ART. 259. Unfair Labor Practices of Employers — 3 SCRA 765
e,
shall be unlawful for an employer xxx (f) To dismiss, discharg FACTS: FERNANDEZ was employed by H.G. Henares &
e for
or otherwise prejudice or discriminate against an employe Sons as Laboratory Assistant. One day, he requested another
having given or being about to give testimony under this Code”;
employee to take over his shift to enable him to testify in the
unfair labor practice case filed against the Company by the
To constitute unfair labor practice under this provision, the Union. The exchange of shift was done without the Company’s
testimony should relate to matters that pertain to the exercise of prior approval. When the immediate superior learned of the
the right to self-organization, such as testimony in another unfair unauthorized exchange of shift, FERNANDEZ was dismissed.
labor practice case, illegal strike case, labor injunction case, or The Union then filed a complaint for unfair labor practice.
certification election proceeding.” This is so because the essential ISSUE: Is the Company guilty of unfair labor practice?
element of unfair labor practice is “self-organization,” considering
that unfair labor practices are acts that violate the right of HELD: The Company is guilty of unfair labor practice.
employees to self-organization. Hence, an employer does not There is reason to believe that FERNANDEZ was dismissed from
work because he testified unfavorably against the Company in
commit unfair labor practice if it dismisses an employee because of
another unfair labor practice case. The Company makes undue
his adverse testimony in a case that has nothing to do with “self-
emphasis of the fact that FERNANDEZ took it upon himself to
organization.” exchange shifts with another employee without first securing
previous authorization of the company. It is hardly convincing,
Royal Interocean Lines v. CIR however, to say that this trivial infraction, if at all, could have
109 Phil. 900 really been the immediate cause of FERNANDEZ’ discharge.
FACTS: The employee and the Branch Manager of Royal His action does not by itself show any wanton disregard of the
company rules. On the contrary, rather than absenting himself
Interocean Lines developed a strained relationship. This led the on the day he was called upon to testify, he worked on the night
Sop ove to lodge with the management a complaint against
shift the day before and urged the other employee to take over
ae Manager. In reaction to the complaint, the Branch his day shift on the day of the trial to avoid impairing the normal
ger (with the approval of higher management) dismissed
business operation.
7
“Royal Interocean Lines
v. CIR, 109 Phil. 900
 an
OR LAW 2
258 LA BOR RELATIONS
THE LAWON
n-Suyoc Mines v. Baldo
12 SCRA 599
a
FACTS: BALDO was given a 30-day notice of termin ation
by the
his services were no longer needed
on the ground that
n
Company. BALDO then brought the matter of his terminatio
was pending before
to the grievance committee. While the case
asked BALDO
eer
the grievance committee, the Plant Engin
not to testify in the hearing of the certifi cation election case go
that his termin ation will not push throug h. BALDO , however,
proceeded to testify against the Company. As a result, the
grievance committee dropped his grievance.
ISSUE: Is the Company guilty of unfair labor practice?
HELD: Considering that BALDO’s grievance was dropped
by the grievance committee soon after he had testified adversely
to the Company, the conclusion is inescapable that the Company
had much to do with the dropping of BALDO’s case. Under these
circumstances, the Company is guilty of unfair labor practice.
Article 259(f) of the Labor Code applies not only to dismissal of
(or discrimination against) an employee who has given or is about to
give testimony against the employer — it also applies to an employee
who was dismissed or discriminated against because his brother has
given testimony against the employer.”
PACC Factory Workers Union v. Phil. Am. Cigar
7 SCRA 375
FACTS: SAN JOSE filed a complaint for unfair labor
practice against the Company. Upon learning that a case has
been filed, the manager of the Company advised the president of
the Union that if SAN JOSE will not withdraw his charge, SAN
JOSE's brother will be dismissed. SAN JOSE did not withdraw
the case, and true enough, the Company dismissed his brother
from his employment.
ISSUE: Is the company guilty of unfair labor practice?
It is coat Sipngang 1s guilty of unfair labor practice.
not mean thai th a smissed was the brother, but this does
practice If digma, ae Is no longer guilty of unfair labor
employer heat sal of an employee who files a case against his
nstitutes
unfair labor practice, with greater
reason
an
*Phil. Am. Cigar & Cig
American Cigar, 7 SCRA 375 arette Factory Workers Independent Union v. Philippine
259
Art. 259 BOOK FIVE
— LABOR RELATIONS
259
TITLE VI — UNFAIR LABOR PRACTICES
should it be when the employer dismisses an employee by reason
of the case filed by his brother.
Violation of the Duty to Bargain Collectively
“ART. 259. Unfair Labor Practices of Employers — It
shall be unlawful for an employer xxx (g) To violate the duty to
bargain collectively as prescribed by this Code”;
The duty to bargain collectively refers to the obligation of one
party to sit down (in good faith) with the other party to negotiate the
terms of the collective bargaining agreement. This could be gleaned
from Article 263 of the Labor Code which provides that:
“ART. 263. Meaning of the Duty to Bargain Collectively
— The duty to bargain collectively means the performance
of a mutual obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating an
agreement with respect to wages, hours of work and all other
terms and conditions of employment, including proposals for
adjusting any grievances or questions arising under such
agreements and executing a contract incorporating such
agreements if requested by either party, but such duty does
not compel any party to agree to a proposal or to make any
concession.”
To be liable for violation of the duty to bargain collectively,
the obligation to bargain must exist. Insofar as the employer is
concerned, the obligation to bargain collectively will exist only when
the following conditions are present:
(1) The union which seeks to bargain collectively with
the employer must be a legitimate labor organization. This
means that the union must be registered with the Department
of Labor and Employment or affiliated with a duly registered
federation or national union. If the labor organization, which
seeks to represent employees, is neither registered with the
Department of Labor and Employment nor affiliated with a
duly registered federation or national union, the employer is
not under obligation to bargain collectively with such union
because an unregistered labor organization has neither the
right nor the legal personality to act as collective bargaining
representative.”!
———
“Villar v. Inciong, 121 SCRA 444
 An
OR LAW 2 259
BOR RELATION
S Art. 269 BOOK FIVE — LABOR
TITLE VI -- UNFAIR LABORELA TIONS
260 THE LAW ON LA
R PRACTICES ap]
. ich seeks to bargain collectively Wi
a The i ema of employees of theSupposen group of employees on matters of collective concerns. It can bargain
the emp id duty to bargain collectively arises only between with its employees only through the certified collective bargaining
employer.” par and its “employees.” Where a party is neither an agent. An employer who attempts to negotiate with individual
the pah an “employee” of the other, the duty to bargain employees despite the existence of a certified bargaining agent
employ ly does not exist. Therefore, if the union (which violates the duty to bargain collectively.
collectively ely with 1 the employer) is composed
bargain collectiv Insular Life Assurance Co. Ltd. Employees
se oxuleaeee of the employer's independent aus contractor, the v. Insular Life
not exis t, bec e in a valiq
gain collectively does
duty to bar 37 SCRA 244
emp loyee relationship ni;
arrangement, employer -emp
tractingi employees of the FACTS: The Union declared a strike. The following day,
principal and the
oot sotablished between the the Company sent letters to the individual strikers offering them
contractor.” comfortable beds, free coffee and occasional movies, overtime
The union which seeks to bargain collectively with
pay and arrangements for their families if they will abandon
(3) their strike.
the majority of
the employer must be chosen or designated by
the employees within the bargaining unit as their collective ISSUE: Did the Company violate its duty to bargain
collectively?
bargaining representative. If two (2) or more unions claim
unit,
to hold the majority of the employees in the bargaining HELD: The Company violated its duty to bargain
the duty to bargain does not exist until the issue on majority collectively. An employer operating under a collective bargaining
representation is finally settled.” agreement cannot negotiate or attempt to negotiate with his
employees individually. And the basis of such prohibition
(4) The union which seeks to bargain collectively is that although the Union is on strike, the employer is still
with the employer must be certified by the Department of under obligation to bargain with the Union as the employees’
Labor and Employment as the collective bargaining agent bargaining representative.
of the employees. This means that the union must undergo
the certification process, either by request for SEBA” Declaring a Lockout Without First Having Bargained
certification” or by certification election.” If the union which Collectively —
seeks to bargain in behalf of the employees is not certified as If a union has been certified as collective bargaining agent,
the collective bargaining agent, the employer has no obligation the employer cannot shirk its obligation to bargain collectively
to bargain collectively, even if the union is a legitimate labor by declaring a lockout. Article 279(a) of the Labor Code prohibits
organization. employers from declaring a lockout without first having bargained
collectively. Thus:
Negotiating With Individual Employees on Matters of Collective
Concerns — “ART. 279. Prohibited Activities — (a) No xxx employer
shall declare a xxx lockout without first having bargained
If there is a certified ascollective bargaining agent, the collectively in accordance with Title VII of this Book xxx.”
employer cannot negotiate directly with individual employees oF 4
If the employer receives the collective bargaining proposals,
—_—_—_—_—..__,
it should not declare a lockout — it should give a reply or
Singer Sewing Machine vy. Drilo
nG:
. .

Employees Union v.
n,193 SCRA 270; RPB Gen. Services i counterproposal within ten (10) days from receipt of the collective
Laguesma, 264 SCR
A 637 bargaining proposal. Article 261(a) of the Labor Code provides that:
“Sole and Exclusive gawang
Papin Mak. haa v. Marcelo Enterprises,
E 118 SCRA 422
Rule VI “ART. 261. Procedure in Collective Bargaining — xxx (a)
Rule “iyna Rules Imp lementing the Labor Code, as amended When a party desires to negotiate an agreement, it shall serve
b , Rules Implementing the Labor
Code
 ee
LABOR LAW 2 Art. 259
™ THE LAW ON LABOR RELATIONS Art. 259 BOOK FIVE — LABOR RELATIONS
TITLE VI — UNFAIR LABOR PRACTICES
263

i upon the other party w1 ith a statement of pa

it,
i n notice
writte
theret o not later whether the employees desire to be represented
a reply determine
neonate The other party shall make by the Union. The parties then agreed to meet to set the date
such notice.”
than ten (10) calendar days from receipt of of election, but before the scheduled meeting, the employer
dismissed seventy-three (73) union members
It must be understood, however, that the mere failure of an
and employed
other persons to replace them.
employer to reply or submit a counterproposal within the 10-day
period is not a violation of the duty to bargain collectively. The 19. HELD: The employer guilty of unfair labor practice for
day period is merely procedural, and non-compliance thereof is not violating the duty to bargain collectively. The dismissal of the
unfair labor practice.” However, if the employer totally disregards union members was a scheme intended to avoid bargaining
the proposal without giving the union the benefit of a reply? or collectively with the union, because by this stratagem, the union
presents a counterproposal on a “take it or leave it basis,”” a violation membership would be depleted, thereby assuring the defeat of
of the duty to bargain is committed. the union in the event the consent election is held.

Surface Bargaining — Pay Off for Settlement of Collective Bargaining Issues

The law mandates the parties to sit down and discuss the “ART. 259. Unfair Labor Practices of Employers — It
terms of the collective bargaining agreement after the exchanges of shall be unlawful for an employer xxx (h) To pay negotiation
the proposals and counterproposals, Article 261(b) of the Labor Code or attorney’s fees to the union or its officers or agents as part of
provides that: the settlement of any issue in collective bargaining or any other
dispute”;
“ART. 261. Procedure in Collective Bargaining — (b)
Should differences arise on the basis of such notice and reply, The act of paying negotiation fees or attorney’s fees to the
either party may request for a conference which shall begin not union or its officers as part of the settlement of any labor dispute
later than ten (10) calendar days from the date of request.”
or collective bargaining issues, is considered as an unfair labor
If the employer sits down with the union and goes through the practice because it compromises the right of employees to bargain
motion of negotiating without any intent to reach an agreement, collectively under an atmosphere of freedom and mutual respect.
or feigns negotiation through empty gestures, a violation of the Paying negotiation fees or attorney’s fees to the union or its officers
duty to bargain collectively is committed.” This is called “surface is a bribe which could entice the union to follow the wishes of the
bargaining.”®! employer at the expense of the employees whom it represents.

SAMAVIM v. Noriel Violation of Collective Bargaining Agreement

98 SCRA 507
FACTS: The Union requested the employer to negotiate a
collective bargaining agreement with it. The employer refused
because it is not the certified bargaining agent. Through
the conciliation efforts of the Bureau of Labor Relations, the
employer and the union agreed to hold a consent election to
“ART. 259. Unfair Labor Practices of Employers — It
shall be unlawful for an employer xxx (i) To violate a collective
bargaining agreement.”
To constitute unfair labor practice, the violation of the collective
bargaining agreement must be gross in character.

Gross violation of collective bargaining agreement means

“National Union of Restaurant Workers v.
CIR, 10 SCRA 843 flagrant or malicious refusal to comply with the economic
“General Milling Corp. v. Court of Appeals,
422 SCRA 514 provisions. This could be gleaned from Article 274 of the Labor
Herald Delivery Carriers Union v. Herald Publica
tions, 55 SCRA 713 Code provides that:
PKiok Loy v. NLRC, 141 SCRA 179
Surface bargaining is defined as “going
through the motions of negotiating”
“ART. 274. Jurisdiction of Voluntary Arbitrators or
without any legal intent to reach an agreement
ees Union v. Confesor, 476 Phil. 346 citing K-Mc
(Standard Chartered
5
Bank
5
Employ-
Labor Panel of Voluntary Arbitrators — xxx violations of a Collective
Relations Board, 626 F.2d 704 [1980]) sare Corporation v. National Bargaining Agreement, except those which are gross in
————>>—
Fe
LABOR LAW 2 ONS
Art. 259 Art. 269 BOOK FIVE -- LABOR RELATIONS
265
264
THE LA W ON LABOR RELATI TITLE VI — UNFAIR LABOR PRACTICES

no longer be treated as unfair

labor practice and Union in behalf of MATRIANO, charged SIA with unfair labor
character, shall das 3 grievances under the Co llective Dargain
Bargainiing
practice for violation of the CBA.
shall ba oe
5 ses of this Article, gross violations of
‘ve Bargaining Agreement shall mean flagrant
flagr and/ or ISSUE: Whether SIA can be held liable for unfair labor
of such practice for violation of CBA.
ios heal to comply with the economic provisions
agreement.” HELD: SIA is not guilty of unfair labor practice. SIA's
its
refusal to grant benefits was not a willful evasion of
For violation of a collective bargaining
agreement to be obligations under the CBA but was due to an honest mistake
considered “gross violation, ” the following points must be considered: in the belief that the same is not covered by the aforementioned
CBA provision. An error in interpretation without malice or bad
(1) The violation must pertain to an economic Provision; faith does not constitute unfair labor practice. We take judicial
and notice of the fact that honest differences in construction may
(2) The violation must be malicious or blatant. arise in the actual application of contractual provisions.

Therefore, an honest mistake pertaining to an economic

provision cannot be considered as gross violation. If the breach of
an economic provision of the collective bargaining agreement arose
from a mistaken interpretation, it cannot be considered as unfair
labor practice because honest differences in construction may arise
in the actual application of a contractual provision, particularly if
the stipulation is susceptible to varying interpretation.

Singapore Airlines v. NLRC

130 SCRA 472
FACTS: The Collective Bargaining Agreement (CBA)
between the Union and SINGAPORE AIRLINES (SIA) contains
a provision on hospitalization, medical care benefits, to wit”: The
COMPANY will meet expenses up to P9,000.00 per calendar year
for ward charges and surgical fees in respect of each employee
xxx” MATRIANO, who was employed by SIA as a telephone
operator/receptionist, underwent a caesarian operation for
which she spent P6,393.70 representing hospital, medical, and
surgical fees. MATRIANO filed a claim for reimbursement of
said expenses pursuant to the CBA, but SIA refused to
pay,
contending that MATRIANO is not entitled to hospitalization
ae medical benefits because its liability in maternity
cases is
C Tr MA leave benefit which provides that “(t)he
ee will grant maternity leave benefits of forty-five (45)
ao pa Na 2 oe 1202. MATRIANO and the Union argued
andes tl of SIA regarding maternity leaves is separate
distinct from the hospitalization benefits because the CBA

CHAPTER Ill
UNFAIR LABOR PRACTICES OF LABOR
ORGANIZATIONS
s, _
ART. 260. Unfair Labor Practices of Labor Organization
It shall be unfair labor practice for a labor organization, its
officers, agents or representatives:
(a) To restrain or coerce employees in the
of their rights to self-organization. However,
organization shall have the right to prescribe its own rules
with respect to the acquisition or retention of membership,
(b) To cause or attempt to cause an employer to
discriminate against an employee, including discrimination
against an employee with respect to whom membership
in such organization has been denied or to terminate an
employee on any ground other than the usual terms and
conditions under which membership is made available to
other members;
(c) To violate the duty, or refuse to bargain collectively
with the employer, provided it is the representative of the
employees;
; (d) To cause or attempt to cause an employer to
deliver or agree to pay or deliver any money or other
of value, in the nature of an exaction, for services
are not performed, including the demand for fee for
negotiations;
‘ (e) To ask for or accept negotiation or attorney's fees
a employers as part of the settlement of any issue
collective bargaining or any other dispute; or
() To violate a collective bargaining agreement.
The provisions
the preceding paragraph notw?
standing, only the afficers,
members of governing boards
266
Po
Art, 260 BOOK FIVE — LABOR RELATIONS a
TITLE VI — UNFAIR LABOR PRACTICES
representatives or agents or members of labor organizations
who have actually participated in, authorized or ratified un-
fair labor practices shall be held criminally liable.’
COMMENT:
Restraint or Coercion
“ART. 260. Unfair Labor Practices of Labor Organizations
— It shall be unfair labor practice for a labor organization, its
officers, agents or representatives: (a) To restrain or coerce
employees in the exercise of their rights to self-organization.
However, a labor organization shall have the right to prescribe
its own rules with respect to the acquisition or retention of
exercige membership.”
a labor
It will be noted that unlike the similar provision on unfair labor
practice of employers, [i.e., Article 259(a) of the Labor Code], the
word “interference” is not found in Article 260(a). Thus, conduct on
the part of a labor organization which, though intended or results in
intermeddling with employees’ rights, but which does not constitute
a “restraint” or “coercion” is not culpable, even though similar action
on the part of the employer would subject him to action for unfair
labor practice by way of “interference.”?
The second sentence of Article 260(a) states that (h)owever,
a labor organization shall have the right to prescribe its own rules
with respect to the acquisition or retention of membership.” This
means that rules which would otherwise constitute unfair labor
practice by way of “restraint” or “coercion,” are exempted from
action provided such rules bear upon or stem directly and properly
pay oF from the right of a labor organization to prescribe its own rules of
things membership. However, the question of propriety of such rules is
which in turn immediately connected with and limited by prohibitions
union against discrimination by labor organizations against employees in
= matter of membership,’ as set forth in Article 260(b) of the Labor
ode.
A labor organization which recommends the dismissal from
employment of an employee who resigned from the union during
the freedom period, i.e., the sixty (60) days prior to the expiration of
ith- aa
1As amended by B.P. Blg. 70: B.P. Blg. 130
“Rothenberg on Labor Relations p. 449
#Rothenberg on Labor Relations p. 450
 BO
OR LAW 2 Art, 260
ON LA BOR RELATIONS . 260 BOOK FIVE - LABOR RELATIONS 269
THE LA W said TITLE VI — UNFAIR LABOR PRACTICES
ms

the right na self-organization

the CBA is an example of restraint onto deprive ae employee of his to whom membership in such organization has been denied
s
There is restraint because it seek ion ea the union) was done or to terminate an employee on any ground other than the
employment even thou gh the resignat n usual terms and conditions under which membership is made
ng the freedom period, a unio
during the freedom period. Duri available to other members’;
anization. He may
member is free to exercise his right to self-org
the cont ract ing unio n or join another union of Mere attempt to cause an employer to discriminate against
therefore resign from a labor
s, because the Union an employee is considered as unfair labor practice. Thus,
his choice without being subjected to sanction
security agreement is deemed suspended during the fre
edom Period, organization commits unfair labor practice when it invokes the
an
If the member is subjected to sanctions under this circumstance, the closed-shop agreement to pressure an employer to dismiss
without any
ing or as member
labor organization commits unfair labor practice for restrain employee whom it refused to re-admit
coercing an employee who exercises his right to self-organization, reasonable ground.
Similarly, a labor organization commits unfair labor practice if Salunga v. Court of Industrial Relations
it expels a union member who initiates a petition for audit of union 21 SCRA 216
funds. Such an act is tantamount to restraint on the exercise of the
FACTS: SALUNGA resigned from the Union. As a result,
right to self-organization, considering that it violates the right of
the Union asked the company to dismiss SALUNGA pursuant
union members to full and detailed reports from their officers of all to the closed-shop agreement. Upon being informed by the
financial transactions. Company that his resignation would result in the termination
of his employment, SALUNGA wrote the Union a letter
MD Transit v. De Guzman withdrawing his resignation. The Union refused to honor the
7 SCRA 726 withdrawal because of SALUNGA's critical attitude towards
FACTS: Three (3) union members initiated the filing certain measures taken by the Union. Instead, the Union
of a petition for an audit of the mutual aid fund of the Union. pressed the company to dismiss SALUNGA based on the closed-
The petition for audit was granted and the audit discovered shop agreement. The Company was then constrained to dismiss
that the mutual aid fund was short of P22,000.00. The matter SALUNGA.
was accordingly referred to the City Prosecutor of Quezon City ISSUE: Whether the Union is guilty of unfair labor
for appropriate action. On the same date, the President of the practice.
Union suspended the three (3) members, and several days later,
the Board of Directors expelled them from the Union. HELD: The Union is guilty of unfair labor practice.
The Union cannot validly invoke the closed-shop agreement
ISSUE: Is the Union guilty of unfair labor practice?
to justify the dismissal of SALUNGA whom it refused to re-
HELD: The Union is guilty of unfair labor practice. The admit as member without any reasonable ground. Having been
suspension and subsequent expulsion of the union members denied readmission into the Union and having been dismissed
is unfair labor practice because it constitutes restraint from service owing to an unfair labor practice on the part of the
on the
SE et the right to self-organization, as it was motivated by Union, SALUNGA is entitled to reinstatement as employee and
era Fn aint they filed against the officers of the Union which as member of the Union.
e discovery of the shortage in the Mutual Aid Fund.
Mendoza v. Officers of MWEU
Discrimination G.R. No. 201595, January 25, 2016

—It ga 2 mee Labor Practices of Labor Organizations ; FACTS: The Manila Water Employees Union (MWEU)
olllocts; sents air labor Practice for a labor organization, its Increased the union dues of its members. For failure to execute
a check-off authorization, MWEU could not collect the union
to cause an a Fepresentatives: xxx (b) To cause or attempt
dues from MENDOZA. MWEU warned MENDOZA that his
including di employer to discriminate against an employee,
failure to pay the union dues would result in sanctions upon
serimination against an employee with respect

LABOR LAW 2
Art. 269
aro THE LAW ON LABOR RELATIONS
him. Despite the warning, MENDOZA did not pay the union
dues. Thus, MWEU meted out a 30-day suspension against him,
MENDOZA appealed the decision to suspend him, but MWEU
did not act on his appeal. MENDOZA continued to refuse to pay
the union dues, hence, MWEU eventually expelled him from
the union. Meanwhile, MWEU conducted an election of union
officers. MENDOZA filed his certificate of candidacy for Vice
President, but he was disqualified for not being a member in
good standing. Thus, MENDOZA filed a complaint for unfair
labor practice against the officers of MWEU.
ISSUE: Whether the officers of MWEU are guilty of unfair
labor practice.
HELD: The officers of MWEU are guilty of unfair labor
practice. Their act of suspending MENDOZA, failing to act
on his appeal, and eventually expelling him from the Union,
thereby depriving him of the right to run for the position of Vice
President, constitutes unfair labor practice because MENDOZA
was unlawfully discriminated against, hence, his right to self-
organization was violated.
Violation of the Duty to Bargain Collectively
“ART. 260. Unfair Labor Practices of Labor Organizations
- It shall be unfair labor practice for a labor organization, its
officers, agents or representatives: xxx (c) To violate the duty, or
refuse to bargain collectively with the employer, provided it is
the representative of the employees”:
To be liable for violation of the duty to bargain collectively, the
obligation to bargain must exist. Insofar as the union is concerned,
the duty to bargain collectively attaches only when it has been certi-
fied as the collective bargaining agent. This means that the union
must have been issued a SEBA' Certification by the Department of
Labor and Employment or has been certified as bargaining agent
through a certification election.
s Pi a Strike Without First Having Bargained Collec-
ively —
If the union has been certified as bargaining agent, it must
oe the collective bargaining negotiations by sending its collective
argaining proposals to the management. It cannot declare a strike
‘Sole and Exclusive Bargaining
Agent
eS
Art. 260 BOOK FIVE — LABOR RELATIONS
271
" TITLE VI — UNFAIR LABOR PRACTICES
without first sitting down with the employer to negotiate a CBA.
Article 279 of the Labor Code prohibits a labor organization from
declaring a strike without first having bargained collectively. Thus:
“Art. 279. Prohibited Activities — (a) No labor organization
xxx shall declare a strike without first having bargained
collectively in accordance with Title VII of this Book xxx.”
Blue-Sky Bargaining —
If the union presents and insists on unrealistic and
unreasonable demands, a violation of the duty to bargain collectively
is committed. This is called blue-sky bargaining, which is not
collective bargaining at all.5
Terminating a CBA Prior to the Freedom Period --
If a collective bargaining agreement has already been executed,
the collective bargaining agent cannot terminate the agreement
before the 60-day period prior to its expiry, otherwise, it will violate
the duty to bargain collectively. Article 264 of the Labor Code is
clear — a party can serve a written notice to terminate or modify
the agreement only during the 60-day period prior to its expiration
date. Thus:
“ART. 264. Duty to Bargain Collectively When There
Exists a Collective Bargaining Agreement — When there exists a
collective bargaining agreement, the duty to bargain collectively
shall also mean that neither party shall terminate nor modify
such agreement during its lifetime. However, either party
can serve a written notice to terminate or modify the
agreement at least sixty (60) days prior to its expiration
date. xxx” /emphasis supplied]
Featherbedding
Under Article 260(d) of the Labor Code, it is unfair labor
Practice for a labor organization to cause or attempt to cause an
employer to pay or deliver or agree to pay or deliver any money
or other things of value, in the nature of an exaction, for services
Which are not performed, including the demand for fee for union
negotiations.
.“Blue-Sky Bargaining is defined as “unrealistic and unreasonable demands in
aeotiationg by either or both labor and management, where neither concedes any-
hing and demands the impossible.” (Standard Chartered Bank Employees Union v.
Confesor, 476 Phil.
346)
 LABOR LAW 2 ONS Att, 269
m THE LAW ON LABOR RELATI Art. 260 BOOK FIVE — LABOR RELATIONS
TITLE VI — UNFAIR LABOR PRACTICES
273

s provision, to wit:
Two (2) acts are actionable under thi To constitute unfair labor practice, the breach of collective
(1) Exacting mon ey or other things of value from th bargaining agreement must be gross in character, i.e., flagrant and/
performed; and :
employer for services not or malicious refusal to comply with the economic provisions of
the employer.
Demanding negotiation fee from
the collective bargaining agreement.”
(2)
s of Value fp,
Mere attempt to exact negotiation fee or thing
services not performed is considered as unfair labor Practice under
this provision. According to Rothenberg, the most publicized example
of this was the practice of unions in the radio industry where the
broadcaster was required to hire and pay for so-called “stand-by”
bands, even if the bands did not perform any service.

Demanding or Accepting Negotiation Fees from Employer

Under Article 260(e) of the Labor Code, it is unfair labor
practice for a labor organization to ask for or accept negotiation or
attorney’s fees from employers as part of the settlement of any issue
in collective bargaining or any other dispute.
Two (2) acts are actionable under this provision, to wit:
(1) Asking for negotiation fees or attorney’s fees from
employers; and
(2) Accepting negotiation fees or attorney’s fees from
employers.
If a labor organization asks an employer to give negotiation
fees or attorney's fees, it is guilty of unfair labor practice,
regardless of whether the proposal was accepted by the employer.
If the employer agrees to the proposal and gives negotiation or
attorney's fees to the labor organization, then it is equally
guilty of
unfair labor practice. On the other hand, if the labor organization
did not ask for negotiation fees or attorney's fees, but nevertheless
accepted such fees from an employer, it is still guilty of unfair labor
practice.

Violation of Collective Bar

gaining Agreement
Under Article 260() of the Labor Code,
practice for a lab ope [ it is unfair labo
a r
agreement. or organization to violate a collective bargaining
ia
“Art. 274, Labor Code as amended