Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem

Will you post a bond at that point?

● Yes. 10% of the appeal bond, later on, you have to pay the
reduced amount/the rest of the amount
● If you file the appeal but only partially post the appeal bond
(10%), the appeal is not perfected.
May 27, 2020
_______________________________________________________ What happens next?
DISPUTE SETTLEMENT ● NLRC would rule on the motion to reduce bond
● The decision could be (1) Approved, in that case you pay the
Illegal Dismissal reduced amount (2) Denied, pay the rest (90%) of the
amount.
● Pay the following amounts, as the case may be, within 10
Complaint for illegal dismissal who has jurisdiction?
days from receipt of NLRC order:
● The Labor Arbiter has exclusive jurisdiction.
○ If the NLRC denies the motion, the ER must post the
After the labor arbiter what will happen next?
remaining 90% of the bond within a fresh 10 day
● It will go to the NLRC
period counted from receipt of the denial of the
What is the mode for review?
motion to reduce bond.
● By filing a notice and memorandum of appeal.
○ If the motion is granted, the ER will pay the
● MR is not allowed.
remainder of the reduced amount within a fresh 10
day period counted from receipt of the approval of
Any other requirement for the appeal?
the motion to reduce bond.
● APPEAL BOND. ER will be required to post an appeal bond
■ Example: 75% was the reduced amount of
equivalent to the monetary award of the LA.
the bond, pay 65% since the 10% was
○ This is not an execution on the monetary award, that
already paid earlier (initial deposit)
bond will not go to the complainant. The monetary
award is not yet final and not subject to execution
Only when you paid the full bond will the appeal be entertained.
○ Purpose of the appeal bond: Ensure payment in
Failure to pay the additional amount will amount to appeal not being
case the NLRC confirms the decision of the LA.
perfected.
What if the employer cannot afford to post the appeal bond?
What happens next? Is the decision of the NLRC subject to an
● ER may file a motion to reduce the appeal bond filed within
MR? Yes. It is necessary before a R65 Certiorari can be filed. The
the 10 day period for appeal.
only instance where MR is prohibited is the decision of the LA
● Notice of appeal and motion to reduce the appeal bond are
filed simultaneously,
What is the remedy (from NLRC)?
● MR first in NLRC (within 10 days)

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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
● Then file a rule 65 petition to the Court of Appeals (60 days
from denial of MR).
Then
Petition for Review under Rule 45 with the SC.
From NLRC to CA, how much period do you have?
Period to file MR in the CA - 15 days
For Rule 45 Petition for review on certiorari- 15 days
What is the difference between a R65 petition and a R45
petition?
● R65 - original; 60 day; MR is needed
● R45 - appeal; 15 days; motion for extension for another 30?
Days
● Pay filing fees even if you are still asking for an extension
Does the LA decision become final?
No. this is still subject to appeal
What about the reinstatement aspect? Does it become final?
It is immediately executory.
Does it become final?
● Not yet.
Does the decision of the commission become final?
● Yes. That is why it is not appealable. Only questionable
through GADALEJ.
● That’s why you go to an original action under Rule 65.
Does the CA decision become final?
● No, it is appealable.
Can you file a Rule 65 petition to the SC to question the CA
decision?
● No. Since there is a plain, speedy, adequate remedy. There
is still appeal available under Rule 45
REGIONAL DIRECTOR
What cases are falling under the Regional Office?
1. Simple monetary claims not exceeding 5k
2. Visitorial power of the SOLE
What makes a monney claim simple?
It can arise out of the claim of the employee after being dismissed
where there is no prayer for reinstatement.
Can a simple money claim be filed by an EE while still
employed? Or is it only for terminated/dismissed employees?
No. it can be filed by EEs that are still employed. Article 129 covers a
broad type of EEs. Whether still employed or dismissed.
Example of Simple Money Claims:
Kasambahay Law - unpaid wage for a kasambahay where the
money claim does not exceed 5k
Is 129 only for Kasambahay?
No. It applies to any kind of employees as well as to any kind of
monetary claims, as long as the amount does not exceed 5k.
If the complainant EE has already been dismissed from
employment, there should be no claim for reinstatement. Why?
Since if there is a prayer for reinstatement, the jurisdiction is
not with the LA. This now becomes a cse for illegal dismissal. It
will cease to be a simple money claim. Money claims is only for
collection. If there is a claim for reinstatement, it becomes an
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem

illegal dismissal taking it out from the RD jurisdiction vesting it

can be an investigation on
with the LA safety of workplace; health

What is the 5k? Initiated by complaint

Maximum amount that a single employee can claim under Article
129. No threshold amount per 5k threshold
employee
If the claim exceeds 5k - the employee has to claim it under the LA.
even if there is no claim for reinstatement. Visitorial and enforcement
power
If less than 5k but accompanied by a claim for reinstatement - it
goes to LA.
Visitorial and Enforcement, how does it work?
● Report received by the Regional Office and pursuant to this
Look at:
report, the RO may conduct an ocular inspection
1. Amount (5k)
(investigation), despite the absence of a formal complaint
2. Nature of the complaint
lodged before the RO.
Appellate Procedure for Regional Office on a Complaint for
How will the regional office conduct the investigation?
Simple Money Claims
● Via an ocular inspection of the ER.
APPEAL to NLRC within 5 days
What happens in an ocular inspection? What do you do? What
Article 128. VISITORIAL AND ENFORCEMENT POWERS
does the DOLE do? (This is the visitorial power)
Exercised by the Secretary or any authorized representative
● Visiting the workplace and checking compliance with labor
standards.
Does the Regional Office have the powers under Article 128?
● Should not only be an ocular inspection per se. The DOLE
Yes. For regional office, there can be both 128 and 129
should interview the employees, and check the records.
[Article 128(a)]
128 129 ● For occupational health and safety, ocular inspection is okay.
● After, the SOLE will make an assessment whether ER is
investigatory Adjudicatory compliant with the laws and regulations.
EER is a precondition (must be No EER needed (even
continuing) dismissed EE can file a simple If there are findings of violations by the inspector, what
money claim) happens next?
● The DOLE will issue compliance orders. This is the
Not limited to money claims. It enforcement power.

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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
Visitorial power may happen without any enforcement such as if
there are no violations found. Dapat regular ang visit may nahuhuli
ka man or wala.
Based on the findings of the inspection then the SOLE/RO will issue
a compliance order, directing the ER to pay what had not been paid
or to comply with law. THERE IS NO ADJUDICATION HERE.
SOLE/RO is not deciding a complaint lodged before it. SOLE/RO is
merely directing the ER to comply with the laws/regulations.
Continuing existence of EER is a prerequisite for the exercise of
the visitorial and enforcement power under Art. 128 (by the
regional office)
How can you compel the employer to pay the employee?
● It would be meaningless at that point because you cant
compel payment to a dismissed employee. Its needed for
128, not so for 129.
Take note we are referring to the same office that’s why its important
to distinguish the elements of 128 and 129.
The only other aspect of labor dispute settlement that we have not
yet discussed is the Voluntary Arbitrator and the BLR.
Voluntary Arbitrator
VA is not an office. Not similar to LA which is an office - a position in
the government. No permanent office for a VA. There are accredited
VAs who are private individuals
There are accredited VAs who are private individuals. They are not
full time government employees unlike the others (LAs).
What is the jurisdiction of VA?
● Grievances are supposed to be resolved at the plant level, at
the grievance machinery
● But if you have reached the end of the grievance machinery
and the grievance has not yet been resolved, we go to VA
Is there a permanent VA?
● It depends on what has been agreed upon in the CBA
● Or instead of identifying VA, parties can just agree on the
selection of the VA. Whatever procedure they have agreed
upon
● VA will decide based on the parties submission agreement
● Jurisdiction is primarily coming from both parties, not a
complaint unlike the other tribunals and offices we have
covered.
● Labor Code specifically says VA likewise has jurisdiction
over other labor disputes by agreement of the parties
● While primarily, jurisdiction is over unresolved grievances,
Labor Code grants VA plenary powers over all disputes
provided parties submit the issue or matter to the jurisdiction
of the VA
- For example illegal dismissal cases, it can be
decided by VA if parties agree.
From VA you go the CA under Rule 43
● Period: Initially SC said 10, but the latest is 15 days.
● SC in its latest decision said we follow the 15 day period
under the Rules of Court.
● From CA, go up to SC via same mode of review, Rule 45
BLR
Concurrent jurisdiction over the same type of case
Article 232: All inter union and intra union conflicts
Who has jurisdiction over 232?
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BLR AND LRD (Labor Relations Division of Regional Office) ● So ang decision ng BLR dalawa ang pupuntahan, pwedeng
Secretary of Labor or CA.
Do they have overlapping jurisdiction? - Same type of case, intra/inter union disputes
NO. Haddle the same type of case but different. - Difference is on the type of union
- Type of union determines who has jurisdiction at the
How is jurisdiction divided? first instance and who has appellate jurisdiction.
BLR - intra inter involving federations ● CA then to SC.
RO - intra inter involving company level union (either independent
union or chapter) NEXT MEETING:
● Smaller unions go to RO, Federations, BLRR. ● Will be finalized with beadle
● Thursday: Joint class
From the Regional Office, where do you go?
● Appellate jurisdiction is with BLR
● If the question asked is does the BLR have jurisdiction over
intra union disputes (company level union) , the answer is
YES, but only at the appellate level.
● Hindi ka pwede dumiretsyo sa BLR.
● BLR has original jurisdiction over federations, and
appellate jurisdiction over independent unions/
company unions.

THIRD LEVEL
Fromthe BLR where do you go?
● It depends.
● If the case involves a federation, decided for the first time by
BLR you go to the Secretary of Labor on appeal, then the
CA.
- SOLE has appellate jurisdiction over intra/inter union
disputes over federations. From the Secretary of Labor→
CA.
● For a case involving a chapter and independent union which
came from RO, appealed to the BLR, decision of BLR can
be brought to the CA. BLR’s decision on appeal will no
longer go to the Secretary of Labor, via Rule 65, original
action.

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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
May 25,2020
_______________________________________________________
Constructive Dismissal
- No actual dismissal; NO POSITIVE ACT ON THE PART OF
THE EMPLOYER FOR DISMISSAL; THERE IS NO
NOTICE, VERBAL OR WRITTEN. BUT IT IS STILL
CONSIDERED DISMISSAL
- Ratio: the employee is forced to quit employment.
- It is not the employer initiating the employer, but the
employee is forced to quit
- Quitting is not considered as voluntary resignation but an act
of dismissal on the part of employer
- Employer placed the employee under conditions that are
oppressive and unbearable therefore compelling the
employee to quit employment.
- The quitting is attributable to the employer's actions. The
work environment has become unbearable. This is a factual
situation, hence, case to case basis.
- Demotion per se is NOT constructive dismissal; same for
transfer. It depends on a number of factors.
- We have to discuss constructive dismissal in relation to
abandonment.
Abandonment
- In our explanation earlier, we said that employee is the one
quitting employment; employer did not do anything but
employee left
- In most cases where you have constructive dismissal, let's
say an employee filed a case of constructive dismissal, ER
will say there is no dismissal, no letter/notice of termination.
ER will say EE abandoned the work.
- Those two arguments are the respective positions of the
parties: EE will claim constructive dismissal; ER’s defense is
he wasn’t dismissed, he abandoned his work.
- For abandonment to apply, it is not enough for the employee
to have stopped working. There must be concurrence of the
act of leaving the work and a clear evidence of intent not to
return.
- The mere fact of filing a complaint for illegal dismissal
praying for reinstatement shows that there is no intent to
abandon work.
Q: EE working in a BPO company, under a tram leader. No good
relationship. EE asked to be transferred to another team, else will
resign. He wasn’t transferred, so he resigned. Is this constructive
dismissal considering the grievance was not heeded?
- On its face no. It’s not in itself oppressive to justify a
constructive dismissal.
- Sub-Q: what if the supervisor disclosed the health status of
the employee, eg that he has AIDs?
- Manuel: That can’t be resolved by a transfer. It’s not very
easy on the part of the EE to prove constructive dismissal
cause take note you are the one leaving employment so you
have to show facts pointing to an oppressive and unbearable
WORKING environment
NOTE: WITHOUT QUITTING, THERE IS NO CONSTRUCTIVE
DISMISSAL. . If he is still working, it means that the working
conditions are still bearable. If you quit working, you are not assured
that you claim for constructive dismissal will be affirmed by the LA or
by the courts.
Constructive dismissal has been applied to prolonged floating status
for security guards. Floating status- nop assignment, salary - it
should only last for 6 months. The court applied the rule for
temporary suspension of operations which is also limited to 6
months. Beyond the 6-month period, the employer may be
considered to constructively dismissed, hence, entitled to separation
pay and other rights provided for under the law.
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Q: Does constructive dismissal always involve cessation of work?
Can it involve reduction of work?
A: The court said yes. But as a general rule, the employee should
quit working and then file a complaint for illegal dismissal. In one
case, there's a resignation letter, and the court considered it as
constructive dismissal despite the presence of the resignation letter.
The letter explained the reasons for quitting which was attributable to
the employer.
When is there an illegal dismissal?
If there re no authorized or just cause - no valid cause. Even if the
procedure is followed.the absence of the accuse makes it illegal
What if there was a cause, but the procedure was not followed?
It is a valid dismissal.
What are the remedies available to an illegally dismissed
employee?
1. Reinstatement without loss of seniority right
2. Separation pay
3. Backwages
4. Damages
What is actual resentment?
The employee returns to work for the position he previously occupied
under the same terms and conditions that he was previously entitled
to.
What if the former position is no longer available?
IHe can be given an equivalent position.
What is meant by without loss of seniority rights?
The years that he rendered before he was illegally dismissed will still
be credited.
What is the salary level at the point of reinstatement?
It depends on the basis of salary adjustment.
1. If adjustment is based on seniority rights, adjust
2. Otherwise, it remains to be what he is previously enjoying
T or F: if reinstatement is available, reinstatement should always be
done.
- False. In cases where reinstatement is available but the
relationship of the parties is already strained, reinstatement
will not be ordered.
Generally, reinstatement should be done
1. To the former position
2. To an equivalent position
XPN: Separation pay in case
1. Strained relationship
2. Impossible to reinstate to his position
3. Position is no longer existing
It’s not automatic that the relationship is strained by the mere fact
that a case is already filed. What is important is that reinstatement
will no longer be conducive for employment, both for the employer
and the employee. It is a factual situation
Example: There is no more trust between the ER and EE.
Strained relations - is this an option on the part of the employer,
meaning that he can just opt to pay separation pay in lieu of
separation pay?
Who proves strained relations?
The employee is not expected to prove strained relations because he
prays for reinstatement. However, the employee can ask for
separation pay instead of reinstatement
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
It is an extraordinary remedy. Strained relations is primarily a finding
and a decision of the court. It is weird for the employer to say there is
no illegal dismissal but assuming there is, he should not be
reinstated. It is weird for the employer to adopt both arguments. In a
way you are admitting to illegal dismissal.
Impossibility of reinstatement is not only because of the absence of
vacancy but also because the company closed or the employee has
reached retirement age.
So it can be based on a number of factors, not just absence of
vacancy
DON'T FORGET: REINSTATEMENT WITHOUT LOSS OF
SENIORITY RIGHTS
- Seniority rights will be assumed; in effect it is putative
seniority rights meaning it is assumed that you worked in
those years where you were separated from employment.
After reinstatement, what’s the next remedy?
Backwages.
What is backwages? These are the wages that the illegally
dismissed EE should have received were it not for his illegal
dismissal.
What amount will be used? Generally, it’s the amount he was
receiving at the time of dismissal.
What period is covered? From the time of illegal dismissal up to the
time of actual reinstatement (if reinstatement is ordered).
Let’s say EE was receiving P20k/month at the time of termination.
The case dragged on for 8 years. The decision was rendered early
this year and has become final. Assuming that the EE has been
reinstated today, how much will the back wages be?
- P1,920,000
- 20k (salary per month) x 12 (months in a year) x 8 (years the
case dragged on
- That means for every year of backwages, backwages should
be equivalent to AT LEAST 12 months. If employee is
eligible for 13th month pay, then multiplier should be 13,
multiplied by the number of years the case dragged on
Assuming that the EE has not been reinstated immediately,
what will happen?
- Computation for backwages continue until actual
reinstatement. EE continues to earn backwages, despite the
fact that the case has been decided with finality, if the EE
has not yet been actually reinstated
- So NOTE, until reinstatement, backwages continue to
accrue.
The backwages will go beyond the period of litigation, as a general
rule. In what case will backwages stop at the time of finality of
the case?
- In cases where separation pay, instead of reinstatement, is
ordered.
- Here, there is still backwages, but instead of accruing until
reinstatement, amount of backwages is only until finality of
decision.
So remember for backwages:
STARTING POINT - always from the time of illegal dismissal
ENDING POINT: it depends:
a) If reinstatement is ordered - backwages accrue until actual
reinstatement
b) If separation pay is ordered in lieu of reinstatement -
backwages accrue until finality of decision
Assuming that reinstatement was not ordered. EE was terminated
after 2 years of employment. 8 years of litigation. Salary is
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem

P20k/month. Separation pay in lieu of actual reinstatement because because of minimum wage orders, that means you cannot do the
there are strained relations. What is the formula for separation pay? 20k X 8 (years of service). Your 20k this year will not be used for the
● Separation pay is equivalent to 1 month pay next year.
● P20,000 x 10. Why? SEPARATION PAY IS ONE MONTH
FOR EVERY YEAR OF SERVICE, INCLUDING THE TIME For the separation pay, separation pay will then be based on your
OF LITIGATION (WHICH IS CREDITED AS ‘YEAR OF supposed salary had you been reinstated on the year you were
SERVICE’) supposed to be reinstated. Separation pay should not be based on
● 20,000 (monthly salary) x 10 years of service (2 years of the minimum wage rates back then. The basis has to be the
actual service + 8 years of litigation credited as service) minimum wage at the time when you should have been reinstated.
● So take note sobrang liit ng separation pay compared to So essentially, LATEST SALARY RATE SHOULD BE THE BASIS.
backwages. It’s like retirement pay. (at the time you were dismissed) - Sabi ni sir yung salary daw nung
last month mo.
Take note for backwages, THERE SHOULD BE NO DEDUCTIONS.
The essence is for him to be restored as if he was never dismissed.
BASIS
The only exception is in cases where he was actually reinstated
pending appeal. SEPARATION PAY BACKWAGES
For example: 8 year litigation period, but on the 4th year he was
reinstated. Then you don’t pay for the full 4 years. The amount he Latest amount x years of service Generally: Computed uniformly
blanketly
received then will be considered as an advance on the backwages. However if you can prove increases
So ALWAYS, FULL BACKWAGES. 12 k x 5 years during the period (ie: Contractual
agreement, CBA, etc)
For years with lower salary use
Query: What if there is a salary increase? IF there is an increase in that; for years with higher salary ;
the wages, it depends: use higher account
1) If based on seniority, he is entitled to increase. (tama ba?) - Example (10 k x 2 years +12k x 5
dapat ata if seniority ONLY years)
2) If based on salary performance, then he will not be entitled
to that since he was not there.
3) If the increase is based on CBA, employee still benefitted by What happens then if the company closes? Then the computation
that. should stop at the time of closure. It cannot be that your backwages
As long as there is evidence that had he not been dismissed, the and separation pay continue beyond the closure. It should also stop
employee will get that adjusted salary rate, then he should get the at the time of closure, even if the closure is before the finality of the
increase. decision. It’s just logical. This is because kahit di ka tinanggal, you
wouldn’t have earned kasi nga closed na.
Backwages are computed uniformly: based on the last salary
received. IF on the other hand the EE’s salary will be increased, say

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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
There is an old decision where the SC said that the employee was
dismissed twice: first, illegal dismissal; and second, at the time of the
retrenchment program of the company.
So the same logic applies. While you were dismissed, your
entitled to backwages. But when the case was pending and
the company had a retrenchment program, the SC assumed
that you will be part of those retrenched. Hence, your
backwages stopped at the time that the company
implemented a retrenchment program.
OPTIONS:
1. Reinstatement + Backwages
2. Separation Pay in lieu of Reinstatement + Backwages
NOTE: Backwages is always there. The amount is adjustable.
DAMAGES
When will the employee get damages for illegal dismissal?
In cases where there EE suffered sleepless nights due to illegal
dismissal. EE may get moral damages under the Civil Code. EE has
to adduce proof that he suffered sleepless nights - effect of illegal
dismissal.
Dismissal with a valid cause but fails to comply with procedure
What will the employee get?
Nominal damages - there is a violation of an employee’s rights but
there is noeed to prove the actual damage done.
How much?
1. If based on just cause - P30k
2. If based on authorize cause - P50k
Why the difference?
In authorized cause, the procedure is simple - it only requires notice
to DOLE and the concerned employee. Then, it is more
reprehensible to neglect the procedure.
Will the employee be reinstated?
No, because there is valid cause for dismissal
Will the employee get backwages? Why?
No. Backwages is given because it is what the employee should
have received if he was not illegally dismissed. The employee is no
longer entitled to work since the dismissal is with a valid cause.
That is the effect of distinction between w/ cause and w/o
If w/o cause - remedies for ILLEGAL DISMISSAL
If with cause - NOT an illegal dismissal; remedies we discussed will
not apply = no reinstatement, no backwages. Instead, the damages
awarded to an employee is given as a penalty for not complying with
the procedural requirement.
The validity of the dismissal is dependent on the substantive apart
and not the procedural part.
Can the 30k or the 50k be increased? By whom?
Yes, it can be increased by the court.
These are arbitrary amounts set by the Court so they can adjust it as
well.
Can it be lowered? Yes, but only for authorized causes, and the
Court considered the financial capacity of the employer and the
number of employees involved.
Why only to authorized causes?
There are causes that you are looking at the financial capacity of the
employer. Also because there can be more than one employee who
is covered, hence, it is more expensive.
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
Take note that the 50k will be multiplied to the number of employees
for example retrenched.
So 50k multiplied by say, 100 employees. Thus, in those cases, the
Court considers the financial capacity of the employer. This is why
that adjustment only applies for authorized causes.
What about for separation pay?
Separation pay in this case is not a remedy. So he should still be
entitled whether procedural requirements are complied with or not.
That is just a completion for termination due to authorized causes.
The separation pay you find in cases for dismissal with cause but
without procedural requirements only apply to those cases. (This is
just the separation pay that an employee is entitled to in authorized
causes)
Q: For backwages, if there is a wage increase pursuant to a
wage order during pendency, does the employee have the
burden to show the wage increase?
The NLRC takes note of that, but only if the employee concerned is a
minimum wage earner.
What if it is not a minimum wage earner, but it is provided by
the CBA?
Employee must prove that
During the pendency, there will be a wage increase. What is the
basis of separation pay?
It is based on your wage on the year you were supposed to be
actually reinstated to work.
Increase
(same as retirement pay; computed on the basis of your last pay)
Note: After the case is decided by SC, you have to go back to the LA
for execution conference. If there are no voluntary compliance on the
part of the employer, then the NLRC will issue an execution order.
Reinstatement is not automatic, hence, pwede ba pa tumagal.
Pwede rin magkagulo as to computation. In some cases, it may
again reach the SC because the employer will question the
computation at the execution stage.
Take note that after the case is decided by the SC; babalik kayo uli
sa LA; magpapatawag si NLRC ng execution conference. Kapag
walang compliance kay employer, magkakaroon kayo ng execution
order.
Remember na hindi automatic ang reinstatement ng employee;
pwedeng tumagal pa ng years kasi magcocompute pa kayo etc.
Magkakagulo uli kayo sa backwages, and in some cases, case will
go up again to SC because ER will question the computation at the
execution stage
Will you still continue to earn backwages at that point?
- Yes pag naground 2 kayo, you again earn backwages until
the time that you are actually reinstated
- ER is penalized for delaying the reinstatement of the EE.
Court said that backwages is definitely adjustable. EE continues to
earn, there is no problem with the adjustment. But as I've said, SC
will not do the computation. Babalik kayo sa NLRC.
LA-Illegal Dismissal finding + Reinstatement pending appeal
provision
● Decision is not yet final
● Law mandates the execution of the reinstatement aspect as
a provisional remedy, it becomes immediately executory and
self-executory even pending appeal. No need to file for a writ
of execution
● LA, if he or she did not receive report of compliance should
issue writ of execution
- This is a problematic practice.
- Hindi kailangan ng report of compliance
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
- This is a special provisional remedy mandated by
the LC.
● Employer has the option, allow the employee to go back to
work or reinstate the employee in the payroll only.
- EE can’t say payroll na lang; but if the ER agrees, no
problem
- But there’s more probability that ER will not agree.
Reinstatement pending appeal
If LA decided in favor of the employee and declares the dismissal
illegal, and orders reinstatement, the reinstatement pending appeal
will apply. The main decision is not yet final, but the law mandates
the reinstatement aspect as a provisional remedy. It becomes
immediately self-executory even pending appeal. There is no need
for a motion for execution. The LA, if he or she did not receive a
report of compliance from the ER, LA should issue the writ of
execution.
This is not an execution of a final decision, it is a provisional remedy!
The employer has the option
1. Actual reinstatement; or
2. Payroll reinstatement
Employee cannot request na payroll na lang.
Is the monetary award subject to execution? No, not yet since it is
still pending appeal. Only the reinstatement aspect is immediately
executory.
Decision covered by reinstatement pending appeal decision
LA lang not the NLRC. You have to win at the LA level. If you lost
at LA, and NLRC reversed, that reinstatement order by the NLRC ill
not be the subject of execution pending appeal because the
provision refers to LA’s decision.
Only the LA’s decision finding illegal dismissal, ordering
reinstatement is immediately executory.
Until when ang reinstatement?
In one SC decision, it ruled that is “until reversed.” For you to enjoy
payroll reinstatement, you should win at LA, and there should be no
reversal afterwards. Okay lang matalo sa SC because at least you
can collect during the litigation period.
If you eventually lose the case, what will happen to the amount
received?
NO REFUND. It is yours. Kaya okay lang matalo sa SC basta
tumagal yung kaso and you have earned enough.
If the final decision is in your favor and the decision grants
reisntatment plus full backwages, the full backwages is computed
from dismissal to actual reinstatement.
So if ang reinstatement mo is 10 years and if 2 years ang…..
(anoraw)
10 years - litigation
Was reinstated 2 years
Backwages only for the 2 years.
Bc you already worked for the 8 years
Question:
LA: Illegal Dismissal + Reinstatement
NLRC: Legal
- Employer can order the employee to stop working
LA - reinstated
NLRC
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
Q: What if it was the employee who appealed the computation of the
backwages? Is the EE still entitled to backwages?
YES. In one SC decision, regardless who appealed, backwages
must be computed from time of dismissal up to actual reinstatement.
May 20,2021
Procedure for Termination due to Just Causes
Q: How do you terminate an employee on the ground of just
cause? What is the procedure?
● Twin notice rule
● Show cause order must be sent to a employee enumerating
a ground for termination
● Notice of termination stating the ground
What happens in between the two notices?
● In between the two notices, a reasonable opportunity to be
heard is afforded to an employee
● While as a general rule, a formal hearing is not required,
there may be instances where it can be mandatory:
1. Requested by an employee
2. Company Practice
Why is face to face hearing not required?
● Law only requires an “ample opportunity to be heard”
● Unless the employee requests for it. In which case, it
becomes mandatory.
● Can the employer adopt an online conference? Yes.
Since it still is compliant with the requirement of an
“opportunity to be heard”
If the employee requests for a face to face hearing, can the company
do an online hearing? Is it compliant with the requirement?
● Yes.
● There’s no reason to make a distinction between face to face
and online virtual conference.
● What the SC clarified is the meaning of the ample
opportunity to be heard is a written explanation suffices
When is the final notice effective?
● Notice of termination is immediately effective. So for
example, the next day, the employee cannot go to work
anymore.
● Final notice is the goodbye letter.
Is there any separation pay due for an employee terminated on
the ground of a just cause?
● No.
● In all cases? No. Unless there is a provision in the CBA that
provides otherwise.
You might find decisions regarding financial assistance. It's not
a requirement
● It's more of an equitable remedy given by the court. It is not
a demandable right on the part of the employee
Preventive Suspension
1. The evidence of guilt is strong and the employer or head of
establishment is convinced that the continued stay of the
employee during the period of investigation constitutes a
distraction to the normal operations of the company
2. His continued employment poses serious and imminent threat
to life or property of the employer or his co-workers
3. Maximum 30 days
a. No work-no pay period during the 30 days
b. If beyond 30 days in case the investigation is not yet
done, it will be with pay.
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
Can an employee being investigated for an offense (that may be
a ground for just cause) be put under preventive suspension?
1. The evidence of guilt is strong and the employer or head of
establishment is convinced that the continued stay of the
employee during the period of investigation constitutes a
distraction to the normal operations of the company
2. His continued employment poses serious and imminent
threat to life or property of the employer or his co-workers
Sir’s problem with the rules:
● I could no longer find the provision on preventive suspension
although SC has numerous cases explaining it
● If you compare the different versions, apparently that
provision is lost.
● Unless DOLE says its still there and it still applies, because
of the series of amendments done, for some reason, it's no
longer there
Authorized Causes
Installation of Labor Saving Devices
“Installation of Labor-Saving Device” – refers to the reduction of the
number of workers in any workplace made necessary by the
introduction of labor-saving machinery or devices.
Elements:
1. Introduction of machinery, equipment of other services
2. The introduction must be done in good faith
3. The purpose for such introduction must be valid such as to
save cost, enhance efficiency and other justifiable economic
reasons
4. There is no other option available to the employer than the
introduction of machinery, equipment or device and the
consequent termination of employment of those affected
thereby
5. There must be a fair and reasonable criteria in selecting
employees to be terminated
Example: In a factory, the employer gets a machine to pack food.
Packaging machine make the work of employees in the poaching
department no longer needed.
How is ILSD different from Redundancy?
● Superfluity/redundancy comes from the introduction of the
machines. Unlike in Redundancy, termination could happen
for other reasons such as abolition of the position
● Installation of labor savings device is a subset of
redundancy
● Why is it enumerated with redundancy? If the only reason is
the presence of devise
● Need not be introduction of machine/equipment per se
Redundancy
“Redundancy” – refers to the condition when the services of an
employee are in excess of what is reasonably demanded by the
actual requirements of the enterprise or superfluous.
Example: Strike, company hires workers. Employers hired new
workers. After the strike, the striking employees returned to work.
Redundancy is present since the company already hired new
workers. LIFO rule may apply
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
Example: Mergers. Bank has 2 HR departments with 20 HR
employees (BPI) & 25 in the other HR department (BPI Family).
When they merge, there is superfluity in the HR personnel. Bank
only needs 25 HR employees. How many are superfluous? 20
employees.
Who will you terminate? It depends on the criteria.
- I can terminate the less senior ones. (LIFO)
In the installation of labor saving devices, there is a replacement
of the services of workers, so whoever is no longer needed would be
terminated because of the machines. So you install a machine, lahat
kayo na hindi kailangan, pwedeng tanggalin. Unless you need some
human intervention, like taga pindot. There is a one to one
correspondence.
In redundancy, there’s no such thing like that. It could simply be a
reduction of personnel. For example, restaurants are no longer
operating in full capacity because of COVID. You need to go through
a set of reasonable criteria to reduce the capacity of the
establishment.
Assuming you made a mistake, instead of labor saving device, you
used redundancy as a ground. Is there a major problem in that?
● None. Employees will be awarded with the same amount of
separation pay.
● Same procedure and amount:
Equivalent to at least 1 month pay or at least 1 month
pay for every year of service
● Automation
● Redundancy
Q: When does the Last In First Out Rule apply (LIFO)?
Under the Rules, you have to apply it.
Is it the only factor you have to consider? No. Employer has the
prerogative to consider other factors. LIFO will not save the seniors.
The company can adopt a set of criteria, and therefore the LIFO is
only part of a bigger set.
Interesting case: A factory was planning because of the pandemic,
they are planning to have a redundancy program. Before they
implemented the redundancy program, the company gave the
employees an option to avail of voluntary separation/early retirement.
(need to reduce to 200) If the company doesn’t hit 200, the company
would proceed to the retrenchment. Management based on
announcements still have the right to choose.
Management wanted to keep the applications live, meaning those
who applied, if management still needed further reduction,
applications would still be considered subject to confirmation.
This reduces the burden on the part of the company because it
becomes voluntary separation. There are tax implications but its a
minor concern.
Retrenchment
“Retrenchment” – refers to the economic ground of dismissing
employees and is resorted to primarily avoid or minimize business
losses.
Elements:
1. Reasonably necessary and likely to prevent business losses
2. The losses if already incurred are not merely de minimis but
substantial series, actual real or if only expected are
reasonably imminent
3. The expected or actual losses must be proved by sufficient
and convincing evidence
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
4. The retrenchment must be in good faith for the advancement
of its interest and not to defeat or circumvent the employee's
right to security of tenure; and
5. There must be a fair and reasonable criteria in ascertaining
who would be dismissed among the employees
What kind of retrenchment? Retrenchment to PREVENT LOSSES
● Anticipatory
● Different from “Retrenchment due to losses” - the
ground is “Retrenchment to prevent losses”
Not a wholesale dismissal. Selection cannot be arbitrary and must
follow a criteria.
What kind of losses? Actual or future losses
● Negative balance in income statement last year 500k, is that
enough? If loss is greater than profit, it could be enough.
● Losses of 10k? It depends on the (size) business. It must be
a substantial loss.
Is a reduction of income equivalent to losses? No. Reduction in
income does not result to a substantial loss, it could be a minimal
loss.
● Even if you have significant drop in sales, does not
necessarily result to a negative bottom line.
● Must be a negative in the bottom line; not a mere
reduction in your revenue/income
How to prove? Show Financial Statement
● Last year you had a bottom line of 500 pesos, can you
retrench based on that?
- No. You must show that you are expecting the same
situation this year.
● It is not enough to show that your balance sheet and your
losses last year. You have to explain what you expect to
happen this year.
“Real and Imminent”
● Show current situation that there’s no longer a chance of
profiting.
● Certainty
How can you show that? The FS is for the past year, but you are
proving future losses. How can you prove future losses? Show that
there is no chance for the business to profit (that you are certain that
you will be incurring losses in the immediate future -- there must be
certainty & imminence). You may identify a political, economic, social
reason
Example: If the government issues a policy regulating the sale of
your product, that can justify retrenchment because you won't be
able to sell your product.
● Even if you have not yet incurred losses, you will
CERTAINLY have losses
● Future losses, while you are allowed to retrench while you
have not yet had losses, you have to prove that expected
future losses.
● Include the amount since you have to prove that it is
substantial
What else should you prove?
● Good faith and it was for the advancement of the
corporation’s interest
How should you prove retrenchment to prevent losses?
● You need to prove that it is reasonably necessary to prevent
losses - that this is your last resort
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
● It need not be due to losses
● It is not enough to prove losses, what you need to prove
more importantly is that what you’re doing is a preventive
measure against further losses.
● We are not just playing with words, there is a difference.
● If “due to losses” the termination is due to the situation
experienced by the corporation
● Here, it's the other way around. It's supposed to be a
preventive measure. It's not a result of losses.
● You have to prove that retrenching is your last resort, you
have no choice but to retrench, otherwise your business will
not survive
● You are expecting to alleviate your situation.
Retrenchment comes before losses - it is supposed to be a
preventive measure. It is not an effect or result of lossesses. The
retrenchment program will help you survive. You have to prove that it
is your last resort also., but you are still incurring losses. By
terminating employees, you expect to alleviate your financial
situation.
● The preventive effect is one piece of the pieces of evidence
that you have to present.
How do you differentiate it from the first two (ILSD and
Redundancy)?
● In this cases, there must be a showing of loss
● In the first two, there is no relation to the financial situation. It
is linked more to efficiency or organization. You have to
present proof of redundancy or superfluity.
● The preventive effect MUST be proven.
Closure or Cessation of Business
“Closure or Cessation of Business” – refers to the complete or
partial cessation of the operations and/or shut-down of the
establishment of the employer.
Elements:
1. There must be a decision to close or cease operation of the
enterprise by the management
2. The decision must be made in good faith
3. There is no other option available to the employer except to
close or cease operations
Are these (closure or cessation) 2 separate grounds? No. It’s the
same thing. When you close, you cease to operate. The conjunction
“or” is introduced to give further explanation of the first term.
“Cessation” further explains “closure”
How is this different from retrenchment?
● In retrenchment, there is still an existing business.
In closure, should there be a complete closure, or is partial
closure allowed?
● Partial closure is not allowed. It must be a complete closure.
● BUT SC has decisions allowing a partial closure. Follow SC
decisions.
Can the employer close down the business without need for
reason? Yes. Provided the requisites are met.
Requisites:
1. There must be a decision to close or cease operation of the
enterprise by the management
2. The decision must be made in good faith
3. There is no other option available to the employer
except to close or cease operations (For Manuel, this
requisite is wrong; but for closure due to losses, it can
apply)
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem

a. Is this last requisite needed? Do you need to present ● Remember: We cannot force the employers to continue.
a valid reason? Can you just say that you don't want
to continue with the business? Atty. Manuel’s webinar: https://www.facebook.com/watch/live/?
i. Yes as long as it is not for the circumvention
v=1065887030531624&ref=watch_permalink
of the law.

Employer cannot be required to justify his decision to close. No need Procedure for Termination due to Authorized Causes
to show that closure is the only smart decision that should be done
under the circumstances. As long as it is not done to circumvent the
How do you terminate if you have an authorized cause?
right of the employees
1. Written notice to employees concerned at least 30 days prior
to the intended date of termination.
Types of closure:
a. Uniform for all authorized causes.
1. Closure due to serious business losses
2. Written notice to DOLE at least 30 days prior to the intended
2. Closure not due to serious business losses
date of termination.
3. Payment of separation pay.
Important to know the types because of how separation pay
applies.
How should the notice be given to the employees?
● No need to pay separation pay if the closure is due to
● Must be in writing, directly addressed to the employees
business losses.
individually.
○ Even if there are still assets left, separation pay is
● May be through email.
not required.
● Not by posting. Not to the union even.
● If closure is NOT due, there’s a requirement to pay
● Not mere announcement
separation pay
Effectivity of termination: Immediately after the 30 days.
Q: The owner is not required to explain the cause of his closure,
how do we reconcile the DO which states “There is no other
When is separation pay required to be paid?
option available to the employer except to close or cease
● Law does not mention any date when the separation pay has
operations” (number 3 requisite above)
to be given BUT payment of this is part of the procedure.
● The D.O. is WRONG.
● Applies only to closure due to business losses.
How much separation pay should be paid?
● The SC has compared the right to closure to the worker’s
right to stop working. You cannot compel the employee to
continue working. Equivalent to at least 1 Equivalent of 1 month No separation pay
month pay or at least 1 pay or at least ½
● It must be in good faith and not done to avoid the law,
month pay for every month pay for every
example, CBA provisions etc. year of service year of service

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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem

● Law does not provide a period when it should be paid. But

whichever is higher
since it’s part of the procedure, it can be argued that it
Automation Retrenchment Closure or cessation should be paid prior to termination.
of operation DUE TO ● There is a recent issuance of DOLE issued last year saying
Redundancy Closure or cessation SEVERE business
of operations NOT due losses or financial
that the payment should be done within 1 month from the
to losses or financial reverses termination of employment.
reverses
Closure due to For just cause termination, do you have to notify the DOLE?
Disease government act
No. Only for authorized causes. This gives the DOLE the chance to
verify or look at the reason behind the termination.
Higher amount - ILSD & Redundancy
The main difference is that in just cause, you are terminating
Why give a higher separation pay for ILSD & Redundancy? No one or few employees. In authorized causes, you are
losses are attributable to the employer. These grounds are not terminating multiple or hundred employees, in most cases
dependent on the financial situation of the employer. except for REDUNDANCY.
● In authorized causes you are terminating a group of
How about closure? employees. Could be hundreds of employees concerned so
the law requires that the government be notified of such
SC decisions allow that the employer may only pay the 30 day termination.
gap, rather than directing the employee to go to work
***Tuesday: other causes for dismissal; Disease; Suspension of
SC adopted a recent ruling which is worded in such a way Operations; Webinar happened last year; there had been more
apparently giving the employer not requiring the employees to recent issuances that are not covered in the webinar especially
report to work. for the suspension of operations part. We’ll go to illegal
dismissal, remedies available for illegally dismissed employees.
● Equivalent to saying actual termination happens today, but
you still get 1 month salary Then illegal dismissal, its consequences, and the remedies
● Old decisions: They did not allow that; the purpose is not available to the employee
only compensatory or to allow employee to find job, but also
to psychologically prepare the employee.

Take note: Payment of the separation pay is PART of the

procedure

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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
18 May 2021
____________________________________________________
Note: Manuel wants to use Canvas for finals.
Q: BPO workers? Are they contractual?
A: Some BPOs have principals based on the PH. PH Banks are
using call centers for their services. But they are special, so the
DOLE excluded them from the Rules (trilateral contract relationship).
In so far as the DO is concerned, they are not covered; but under
Article 106, they are covered. So I can use Art. 106 definition of
labor only contracting, which makes the principal the direct
employer. I don’t need the DO.
● For the purpose of the bar, if the question calls for the
application of the DO, then cite the DO
Termination of Employment
Main issues to be discussed under this topic:
1. Just Causes
2. Authorized Causes
3. Procedural Requirements
4. Consequences of Dismissal
Constitutional Right concerned: Right to Security of Tenure against
any unjust dismissal
Q: Difference between just and authorized causes
● Just cause - due to employee’s own fault or negligence
● Authorized cause - provided for by law; by reason of
business exigencies and change of economic conditions, it
allows the employers to terminate the employees
Does it apply to regular and non-regular employees?
● YES. It’s just that, for non-regular employees, there are
additional grounds (i.e: failure to meet the standards for
regular employment)
● All just and authorized causes apply to all employees.
Just Causes
(a) Serious misconduct1 or willful disobedience2 by the employee
of the lawful orders of his employer or representative in connection
with his work.
● Is this a single cause? No.
● Serious Misconduct - refers to transgression of a law/rule
or performance of a forbidden act which is willful;
performance connotes willful intent
● When you say transgression of a rule, does this mean
that there has to be an existing policy which must be
transgressed before you can terminate an employee?
No. You don't need a written rule.
11. There must be misconduct;
2. The misconduct must be of such grave and aggravated character;
3. It must relate to the performance of the employee's duties; and
4. There must be showing that the employee becomes unfit to continue working for
the employer.
2 1. There must be disobedience or insubordination;
2. The disobedience or insubordination must be willful or intentional characterized by
a wrongful and perverse attitude;
3. The order violated must be reasonable, lawful, and made known to the employee;
and
4. The order must pertain to the duties which he has been engaged to discharge.
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
● What makes it a just cause if it's not a transgression of a
policy? In itself, it is a wrongful act. No need for a formal
written rule.
● Must be in relation to the work.
Illustration: In banks, the bank teller was tasked with checking
transactions of AML, it was discovered that the EE did not report the
transaction to ALMC. Sir: isn’t this fraud?
Example of serious misconduct but is not a willful
disobedience:
Company driver, before delivering goods, he always used to drink,
and was involved in an accident.
- Sir: Isn’t this reckless? Yes. But the fact that he always
drinks before delivering, shows that it is willful. Therefore it is
serious misconduct
Do you need to have multiple serious misconduct to be
terminated? No. Only requires that the misconduct is willful
Act of violence, is it a ground for dismissal? Depends if the act of
violence affects the employer.
You committed an act of violence against a co-employee.
Ground for dismissal? It depends when the act was committed.
If committed during or outside work (i.e: lunch time) - no adverse
effect on the employer
What about if it was committed during lunch time, within the
company cafeteria? - Yes. It can be argued that it will affect the
employer as it will create an hostile environment
After premises - does not affect employer unles such act cause a
commotion or cause the attention of others, and so it will affect the
employer
How about if it is very far from the premised but during working
hours - affects the employer because during working horse, the
employees are prevented from working
Even if the quarrel has nothing to do for the employment? Yes.
How should we assess that a particular action is a ground for
serious misconduct or not?
Dependent on the factual circumstances as long as it affects the
employer.
In what way should the employer be affected? It can be directly or
indirectly. For instance, even if the act of violence was committed
outside working hours and even outside the premises, but it caught
the attention of the other people, the reputation of the company is
affected.
Direct - prevented the other employee from working
What if outside working time and at a place very far from the
company? Like if when they are neighbor co-employees? One
employee stabbed the other employee. They are coworkers and
neighbors. Is it a just cause for termination?
● It can be, if proven by the employer, that there was an
adverse effect on the company.
● How can you prove this? For example if the incident was
reported in the news and the news report referred to both the
victim and the aggressor as employees of the company -
there is an adverse effect on the company
If there is no mention that the parties to the incident are employees
of that company - it cannot be used as a ground to dismiss the
aggressor
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
Immorality? Is it a ground for dismissal under serious
misconduct? No, because immorality relates to the personal
circumstances of the person; and not work related.
● There must be a direct effect on the work concerned.
● Qualifier is WORK RELATED.Even a c
Case law: School cases - court did not find a scandalous matter;
thus dismissal has no justification
- Pregnancy in itself, and especially if the partners have no
impediment to marry - cannot be considered as a
misconduct
Query by Vic: Boss gives the employee a company car but the
employee uses it to service his paramour. Use of company property
was allowed for personal purposes. Is this serious misconduct? Can
the employer have a say on how the employee uses the company
car? Depends on company policy (i.e: if only the employee is allowed
to ride it, or other individuals are allowed as well). But it seems like
the company won’t be able to monitor every rider. If the ER did not
specify on who is allowed to ride it, then there is no misconduct.
Commission of a crime is NOT an automatic ground for
dismissal UNLESS it has a direct effect on the company.
If the serious misconduct has no relation to the work, then such
misconduct cannot be a ground for dismissal.
For it to be considered as a just cause, the employer has to show
that there is an adverse effect on the company, otherwise there is no
reason to terminate the employment of the employee concerned
Factors: Nature of the work, nature of the company’s business
Take note that Employer is concerned with the worker as an
employee. This is the limitation of the employer’s power over the
employee. So whatever the EE does outside that realm should not
be within the reach of the ER.
In serious misconduct, it is malum in se. WRONGFUL CONDUCT.
Disobedience is only wrongful because it is a TRANSGRESSION of
a company policy.
Take note of the safe spaces act and anti-sexual harassment law for
definition of wrongful act.
Query by Kev: fighting outside working hours but within work
premises. For example after 6pm. This can be misconduct because
that disrupted the work
● What is important is that it is WORK-RELATED. And this can
mean many things (i.e: how it affected the employer, or the
employer’s establishment)
Query by Fritz: If it's so scandalous that it affected the work and
the employer, then the ground to dismiss is serious
misconduct.
● Need not be within the premises
● Need not be within work hours
● BUT the employer must show how it is work related.
Willful disobedience
● Wrongful conduct committed in relation to the work.
● Should it be serious? No. It only has to be willful
Example: An office has a gym for the exclusive use of employees. In
order to use the gym, you have to use an ID card. And employee lent
his card to a friend friend in order to use the gym. That act of
breaking company policy would be willful disobedience. Company
has a policy that only employees can use the gym.
● Can you argue that this is work related?
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
Should disobedience be work related in order to be grounds for
dismissal?
● Should the order be work related? Yes.
● How can you show this? The use of ID is a general company
policy. Security concern of the premises.
Company has a rule that all employees must wear their ID.
Employee was caught not wearing an ID
.
● Not automatic defiance. Check if there is bad faith or good
faith.
● ER asked why he did not wear his ID. EE refused because
panget daw picture niya. Can the ER terminate just because
the EE did not use his ID? NO.
○ Violations of company policy should be PENALIZED.
DO NOT DISMISS IMMEDIATELY.
Should the disobedience be serious? Yes because otherwise, the
penalty of termination will not be commensurate to the offense
committed by the EE
In order to TERMINATE - both willful disobedience and serious
misconduct must be SERIOUS; otherwise, you can only impose
penalties/sanctions.
Serious conduct is malum in se
Disobedience is malum prohibitum.
Policy must be made known and it must be lawful, reasonable,
and work-related.
What is the importance that the policy is made known? So the EE is
aware of the possible acts that would merit his dismissal or
penalized.
What you are penalizing is the DEFIANCE OF THE ORDER, and not
the act itself.
There must be deliberate defiance.
One single act of serious willful disobedience? YES, you can
terminate on the first instance of commission of an offense
(b) Gross and habitual neglect by the employee of his duties3
Gross neglect - absence of that diligence that an ordinary prudent
man use in his/her own affairs
Habitual neglect - repeated failure to perform one’s duties over a
period of time, depending upon the circumstances
To be a valid ground for termination, the following must be present:
1. There must be neglect of duty; and
2. The negligence must be both gross AND habitual in character
Should it be work-related? Yes
Illustration: Habitual absenteeism; habitual tardiness; continuous
mismanagement of the company property as when you are an
accountant who is entrusted with a laptop (property assigned to you
to be used for your own work);
Example of pinupukpok laptop - not good example?
Example: What if you were assigned a company car and you are
careless as the car was left open with the keys attached to the
3 1. There must be neglect of duty; and
2. The negligence must be both gross and habitual in character.
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
ignition chenes. And then the car was carnapped. Can you be fired?
Not under the ground of gross and habitual neglect. NOT gross and
habitual. But can be terminated under other grounds i.e: Analogous
cause to serious misconduct Negligence is so gross that it is
analogous to serious misconduct, BUT not serious misconduct per
se since it is not willful per se
Let us assume that there are many instances of negligence. Is
there a threshold amount/ number before you can fire an
employee? No. There is no formula.
Can 2 acts of negligence be considered habitual? Yes. But it’s
not the number of times that is determinative, but the consideration
of all other circumstances
How do you terminate? Do you need to consider past offenses
even if the past offenses have been penalized?
Company policy naslight offenses lumped all together - 1 count of
gross and habitual neglect
Habituality qualifier -> requires a pattern! Must look at past
offenses.
Before SC was strict that there should be a graduated punishment,
until you reach a point where termination is proper.
In some cases, the SC said even if past offenses are not punished,
there can be termination because these offenses are not condoned.
In some company policies, there are some provisions on the period
to be covered. For example, three negligent acts within a time
period. And you committed 2 but 1 was committed 10 years ago. So
this will not count because it has “prescribed.”
Q: If it's in the company policy. The policy provided that within a
period of 2 years, repeated negligent acts will qualify it to
serious misconduct.
Sir: You don't have to qualify it as serious misconduct. You can just
say: 5 times of the same negligent act - may be ground for
termination.
● Ground: Still gross and habitual neglect
(c) Fraud or willful breach by the employee of the trust reposed in
him by his employer or duly authorized representative;4
“Fraud” – refers to any act, omission, or concealment which
involves a breach of legal duty, trust or confidence justly reposed,
and is injurious to another.
“Loss of Confidence” – refers to a condition arising from fraud or
willful breach of trust by an employee of the trust reposed in him/her
by his/her employer or his/her duly authorized representative. 5
Example: Cashier who stole money and failed to account for the
cash he/she should have. Does not have to be repeated or habitual.
A single act will justify termination.
4 1. There must be an act, omission, or concealment;
2. The act, omission or concealment involves a breach of legal duty, trust, or
confidence justly reposed;
3. It must be committed against the employer or his/her representative; and
4. It must be in connection with the employees' work.
5 1. There must be an act, omission or concealment;
2. The act, omission or concealment justifies the loss of trust and confidence of the
employer to the employee;
3. The employee concerned must be holding a position of trust and confidence;
4. The loss of trust and confidence should not be simulated;
5. It should not be used as a subterfuge for causes which are improper, illegal, or
unjustified; and
6. It must be genuine and not a mere afterthought to justify an earlier action taken in
bad faith.
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
Can a single offense merit termination? Yes.
No need for habituality? No need
Is there a need to make a distinction between serious and not
serious? Yes (?)
Is there such a thing as a slight breach? Yes
Is loss of confidence used as a term? No. Fraud or Willful breach OF
TRUST
Can there be a light fraud or light breach of trust? Yes BUT
NOTE: By the nature of this offense, any fraud any breach of trust
is considered as SERIOUS and therefore will justify dismissal.
Example: A factory worker was caught with products manufactured
in the factory while on his way home. Is this breach of trust? Ground
for termination?
● Is this breach of trust? No. You can terminate under
Serious Misconduct, but not Breach of Trust
● Factory worker is not occupying a position where trust and
confidence is reposed
● Ground is limited to those employees occupying a position of
trust and confidence OR those who are entrusted with
substantial value of company property
Employee is occupying a position of trust and confidence -
managerial, supervisory employee, cashier
How do we know that the employee is occupying such a position?
Depends on the nature of the work.
Cashier v. Factory worker
Cashier is entrusted with substantial value of company property
(money)
Factory worker who does not have custody of company property
cannot be terminated under this ground
Cahier is given with higher level of confidence
Cahier can be terminated under breach of trust - if he/she commit an
act that could be a ground to justify breach of trust
Loss of trust and confidence - Sir said this is not accurate (SC
decision cited this though). Stick to the term given by the law.
Managerial v. Non-managerial
The SC is more liberal in dismissing managerial employees. You
don't need to have actual evidence for the managerial EES to be
dismissed. On the other hand, in non managerial, the breach of trust
should be shown.
Note: this has nothing to do with the confidential employees
definition in unionization. What is important here is that you
are handling property of significant value and there is a
commission of fraud
(d) Commission of a crime or offense by the employee against the
person of his employer or any immediate member of his family or his
duly authorized representatives; and
(e) Other causes analogous to the foregoing.
● The DOLE now requires that analogous circumstances
should fall under the company code of conduct. Sir does not
agree. The ratio of the law is to be flexible but this was
defeated by the DO.
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem

_____________________________________________________
11 May 2021

REGULAR EMPLOYMENT

When is an employee considered regular?

-- When the work is usually necessary or necessary desirable in the
usual trade or business of the ER
Illustration: In a restaurant, the chef is a regular EE.

Is that equivalent to say that as long as you are a chef, you are a
regular EE?
For the restaurant, the chef is a regular ee
For other establishments, not necessarily
Does that mean that as long as a restaurant hires a chef, the chef
will be a regular ee?
Not necessarily. Could be hired for a fixed period only.

When we say usually necessary or desirable are these 2

different terms? YES. “usually necessary” OR “usually desirable”

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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
When we say usually necessary, or desirable, are those t2 terms
different? Yes
Is the chef’s work necessary or desirable?
Difference between necessary and desirable:
- Ex. The chef’s work is usually necessary to the business of
the restaurant.
- Give an example of not usually necessary but desirable
From wrocking:
a. Usually necessary→essential
b. Usually desirable→ not essential but helpful/profitable to business
operations
Illustration:
● Chef’s work in a restaurant - necessary
● Painter for the decorations of the restaurant - is this usually
desirable? NO. Because you do not need the painter on a
regular basis
● Receptionist in the restaurant; work is confined to customer
service (i.e: reservations, assign customers to their tables) -
not usually necessary, but usually desirable - because even
without the receptionist the restaurant can functions, but
desirable because hiring such can help the customers
● Lobby greeter - stays at the hotel and greet guests;
NOTE: Work need not be usually necessary to be regular - could be
usually desirable only.
No need for concurrence of the two; either “usually necessary” [usual
necessity] OR “usually desirable”[usual desirability]
What do you mean by usually?
Pertains to regularity, frequency as opposed to intermittently or for a
particular purpose only
Poblete: Recurrence
AS OPPOSED TO: INTERMITTENTLY
Desirability is a level lower than necessity
- A chef’s work is necessary; but you can run a restaurant w/o
a receptionist
- BUT both will qualify the EE as regular in sofar as that
establishmnet is concerned
Wrokcing file example of not usually necessary but desirable
- Janitor. An office can function without a janitor, but it would
be desirable to have it
Desirability is a level lower than necessity
- Chef’s work is necessary, indispensable because you cannot
run a restaurant without a chef
- But you can run a restaurant without a receptionist. The work
of the receptionist is not necessary but is usually desirable
- Both will qualify an employee to be a regular.
Regularity is always in relation to the business
- You cannot say that this position is regular for all business.
Case to case basis
- Regular employment status is always in relation to the
business. Cannot say that this position is regular for all
business. Applied in a case to case basis; look for the
reasonable connection between the work and the business
True or False: if a person’s work is usually necessary or desirable
to the usual business of a company or a person, then that worker is
an ee of that company or person for whom that work is performed?
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
FALSE. The term usually necessary or desirable is not used to
determine EER. It is only used as to the kind of employment (i.e.
Regular, Casual, Probationary, etc.)
That standard also already provided EER. it already assumes that
the person performing work is an EE. so the question is only as to
whether or not such a person is a regular EE.
So what standard is used to determine EER?
4 fold test. (control test)
It is incorrect to say that if a worker performs UNOD UTOD that
person is an employee-- because after all, there may be absence of
control.
What determines regular employment status? Agreement of the
parties, meeting of the minds, intent?
It is the law. Even if the parties say that their em rel is just a regular
em, but the law deems it as another, then it will be that.
Can the parties negate the existence of employment status by
stipulation?
Yes. But if the position should be regular, but you do not fall under
any of the exceptions, you are a regular EE.
- The law gives us the standard, if the standard is met,
then the law deems him regular. Regardless of any
agreement to the contrary. Unless you fall under any of the
exceptions.
FIXED TERM EMPLOYMENT
FIXED TERM EMPLOYMENT
EE and ER will agree on a day certain when the em is ended and
there is no vitiation of ees consent and the parties in equal footing
and no moral dominance. (jurisprudential definition)
- Wala kang tinaype now algaCASE: Brent School Case
What is the basis of the jurisprudence?
● Civil Code - because that time, the LC was not yet
promulgated
- There was a temporary vacancy created because the athletic
director went abroad and took a leave of absence. The
director did not resign. The position is technically still
occurred but there is a temporary vacancy. The school
cannot afford that the position be vacant so the school hired
a substitute for the position. Because the absence was
temporary, the school entered into a K limiting the period of
EM.
In subsequent cases, the court emphasized:
1. Absence of vices of consent or vitiation of consent
2. The parties dealt with each other in an equal bargaining
position.
a. Goes beyond voluntariness!
- Therefore, not all contracts are considered valid just because
it was entered into voluntarily.
What if an EE is repeatedly hired as a fixed term ee? Is it a Valid
Practice?
- Not a valid practice. If this happens, the EE bceomes a
regular EE.
If it is clear that the ER is using the arrangement to avoid having
regular EES, then it is a circumvention of workers’ rights and is
invalidated. Thus, the EEs become regular EEs.
Take note: that by introducing this new concept of fixed term
employment, the court allowed employers to enter into this type of
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
employment, which would not have been allowed under the labor
code.
● By opening up this venue, the court put the burden to have a
mechanism to catch the illicit practice.
If you don't have an effective mechanism to determine which
agreements are valid or should be nullified, then you have thousands
of EEs that are under fixed term employment that cannot be regular.
Because of the req that the party must have dealt in equal bargaining
position. That means that the position is important.
Example: a janitor cannot be considered to have bargained equally
with the ER leading to a fixed-term EM K.
But this happens only when there is a case. When the EE has
already been dismissed. Unless there is a suit, you will never catch
the illegal practices.
PROBATIONARY EMPLOYMENT
Probationary Employees
- May be usually necessary or usually desirable in the usual
trade or business of the ER
- Limited to a 6 months probation which is communicated at
the time of the EE’s engagement
- Performance standards must be communicated to him
Isn't this fixed term?
● No. when you hire a proby, you are not just saying that you
are hired for 6 mos.
● What is the reason for the hiring? ER is trying to evaluate
whether or not the EE can be a regular employee
● ER wants the EE to undergo a testing period
Where did you get the 6 months? Article 295
It’s a maximum period, subject to a few exceptions:
Apprenticeship - probationary period can be as long as 1 year
Learners
● Aside from apprenticeship, What will justify a longer period of
probation? When the work requires a special skill in doing
work. But what justifies? Why would you need to extend the
probationary period longer than 6 months? Well, the 6 month
period could not have been enough not only because of the
learning period, but also of the assessment period
● So The 6 mos period may not be enough not just because of
the learning period but because of the assessment period.
I.e. the work cannot be assessed until after the 6 mos is
over.
The court clarified that the proby period is not a term. Unik ein fixed
term employment. Court clarified: Probationary period is NOT a
term in fixed term employment.
● Objective of probation period: to assess the EE’s work to
determine his potential to qualify for employment
● Is this mandatory? NO.
● Can an ER hire an employee even without undergoing a
probationary period. YES, once you are hired, then you are a
regular EE immediately
● Because of that objective, there is a requirement that the
standard should be communicated to the EE.
Take Note: Standard should be made known to the EE at the time of
engagement. This is mandatory because this is like a grading system
which will be used by the ER to assess the EE.
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
What if the EE did not communicate these reasonable
standards? The employee is a regular EE
Can an EE be terminated prior to the end of the probationary
period? Yes. For a just cause (or authorized cause) or fails to qualify
in accordance with the reasonable standards communicated by the
ER
- Probationary EE is not entitled to the whole probationary
period. It is a chance, not a term.
It is not a guarantee that you will be hired.
What happens if you are a good employee and has performed
work in accordance to the reasonable standard? Probationary EE
becomes a regular employee.
Do you need confirmation of the ER to be considered as a
regular employee? NO. Probationary EE can be regularized if the
ER did not do anything once the probationary period lapses.
The probationary EE, by operation of law, is converted to regular
employment status
Assumption: The fact that you are there after the probationary period
means you have met at least the minimum standards.
TAKE NOTE: Teachers are covered with a different probationary
period - 3 school years + full time +subject to other additional
academic qualifications
“Reasonable standards” has been interpreted differently by the SC
Case 1: Job description and organization structure is not enough -
you have to go beyond in telling the EE what to do. You have to tell
the EE what the job entails and how the job should be done
Case 2: Job description and organizational structure is enough
without anything else because clear to the ee concerned - but EE
here is a managerial EE
ER can put up a probationary period for project employment?
YES.
PROJECT EMPLOYMENT
What is a project? Any particular work which is separable and could
be considered distinct
Illustration: Construction workers
How is project employment different from fixed term
employment?
Project EM- eM coterminous with the project. There is no period
agreed upon. When the project is completed, the EM ends
automatically ends
Fixed term- EM is for a fixed period agreed by the parties. Not reliant
on a project. Even if the work is still needed, the EM is terminated
upon end of the term agreed upon.
Fixed term employment, even if the work is still needed because of
the initiative of the employer,the employment is terminated upon the
period agreed upon. In project employment, there is no period
agreed upon. The employment is coterminous with the project itself.
When it is completed, employment ends automatically. It is not
considered as dismissal.
What are the requirements to be a valid project employment?
1. The EE must be hired for a specific project. There must be a
genuine project.
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
2. The termination of the project is agreed upon at the time of
hiring
When can be a FALSE project or non genuine project?
- If there is no project to end the relationship. If there is no
distinct undertaking that will require the initiative or
undertaking, then there is no project. It is a fixed term
employment
When can you be considered as a regular EE even if you started
as a project EE?
1. When you are asked to do tasks outside of the tasks of a
project EE
- Ratio: since you are using the arrangement as a
means to circumvent regular EM
- Are you saying that work usually necessary and
desirable cannot be a project? No. It can be a
project.
2. Continuous rehiring of the same employee for the same or
different projects
- Continuous means hiring several times. Not need be
unbroken. It can be intermittent.
- As long as you are hired every time that there is a
project and your services are needed.
Maraguinot case:
A. If there is continuous rehiring
B. for the same tasks or nature of tasks under different projects,
C. which tasks are vital, necessary and indispensable
to the usual business or trade of the employer,
D. an employee who was initially hired as a project employee
may eventually acquire regular status.
● A project EM can handle tasks usually necessary and
desirable to the business of the ER.
Let us consider a single project, what will happen at the end?
Are you entitled to be rehired?
● Employment also ends (terminated; not dismissed), without
the right to be rehired.
What about after 6 projects. When that project ends, what
happens?
● You become a regular employee, because of repeated
rehiring (Maraguinot case)
● You become an employee despite the end of the latest
project.
● Your employment is no longer coterminous with the project.
● In the meantime, what if there is no work? You are not
entitled to wages because of the principle of “no work, no
pay.”
What are your rights as a regular employee?
● Right to be rehired
● Right to be given work for the new project if your work is
needed for the new project.
Can you put a probationary period for project employees?
● Yes. As long as it is clear that the probationary employment
is not for regular employment.
● As long as you are not using the probationary employment to
circumvent the law.
Take note that for the conversion from project employment to
regular employment: There is no quantitative formula. The Court
did not say after how many projects the conversion will take place. It
is on a case to case basis.
SEASONAL EMPLOYMENT
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
How is this different from a fixed term or project employment?
Restrictions are based on seasons
Example: A certain crop that is only harvested at a certain time
This is the reason why seasonal employment is usually in the
agricultural industries - BUT there can be seasonal employment
outside of agricultural industry
PARAMETERS OF VALID SEASONAL EMPLOYMENT:
● Employed within that period of time (1 season)
● If allowed to work outside of that season - becomes a regular
EE
There is no need to limit the period because it exceeds that season,
you will be considered a regular EE, especially if you have worked
year-round.
If you are working year-round - then you are definitely not a seasonal
EE
Situation:
Working for 7 months for a year; every year you are hired to
work; 5-month off season
● If there is a pattern, then you will be considered as regular
EE
But at the end of the seasonal work, what would be your status?
Because you are only given work for 7 months.
Temporarily laid off. That means for that period, you are not entitled
to payment but you are still considered “regular seasonal EE”. The
employment continues. Same formula as project EE
CASUAL EMPLOYMENT
Who are casual EE?
Those who are engaged in work that is only incidental and not for
1 year. It may be necessary but not usually necessary to the
business. You need it only today.
Work is necessary but it is not “usually necessary” or “usually
desirable.” You do not need that work on a regular business. It could
be you need that work for only that day.
Illustration:
Retailer selling second hand clothing (ukay-ukay)
- Student: Fix the plumbing of the restroom
- Why is this casual? Because the work is incidental - does not
involve the selling of the used clothes
- Why is this not a project employment? (A project can be
incidental to the regular business.)
- What is the difference between casual work and a project?
When we talk about casual employment, for academic purposes, we
consider that there is an ER-EE relationship. Because in reality, the
plumber, for instance, could be an independent contractor. And there
is no minimum period for employment; can be employed for 1 day.
- Why is that employment casual? Because the work is
incidental to the business of the ER
Can the plumber be a regular employee? YES. If working for more
than a year
- Continuously? No need. (codal: continuous or broken)
- Plumber can work for 1 month for a year (1 month to fix the 1
broken toilet in the ukay ukay shop)
- Aggregate of 1 month per year - Plumber will become
regular EE after 12 years (assuming that plumber will be
rehired)
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem

- This is why this is usually difficult to be achieved for casual

employees.

Real objective of Casual Employment 1-year rule: To avoid ERs

who avoid having regular EEs

There can be a valid project employment for more than 1 year. (1st
classification; 1-year period does not apply)
ONLY APPLY 1-YEAR RULE TO CASUAL EMPLOYMENT

You can be hired as a project employee or for a fixed term

employment for more MORE THAN one year, and it will still NOT
make you a regular employee. This is because the one-year rule
only applies to casual employment. You don’t apply the one-year rule
to project, fixed-term or seasonal employment.

In relation to contractual workers, therefore, the contractor can hire

you for more than one year and you still will not be regular. This is
especially true since the employment agreement must be
coterminous with the service agreement, and the one-year rule will
not apply in this case to make them regular.

Next week: Termination

________________________________________________

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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
APRIL 20, 2021
T/F PORTION
In a true or false situation, if you cannot find anything that
makes it false, then it is true
1.) False. There are other types of labor organizations. For
instance, it could be a federation (10-member requirement)
2.) False. You should be able to identify immediately that this
refers to the support requirement. This depends on whether
it is a labor union or a chapter. Why false? The 20 & req has
nothing to do with the filing of PCE. You look at the BU
--whether organized or not.
3.) True. This is still on the 25 % support req case. What is the
issue? You should know when the med arbiter’s decision is
appealable or when not appealable. The MA decision is
ALWAYS appealable in cases of Organized Establishments.
What is not appealable is the decision granting the petition in
an Unorganized Establishment. So that means the 25 % req
does not apply
4.) False. A strike based on the employer’s bad faith bargaining
is covered by the 30-day cooling off period. There are 2
cooling-off periods. 15 days applies to ULP; 30 days applies
to bargaining deadlock. So what applies? This is a case of
ULP. Hence, it is covered by the 15-day cooling-off period.
5.) False. A chapter that has submitted its charter certificate
and the required additional documents to DOLE becomes a
full fledged affiliate. What makes a chapter an affiliate? A
chapter becomes an affiliate if it secures its registration but
stays within the federation. So it is not correct to say that it
becomes a full fledged affiliate once it submits requirements.
The effect of the submission is that it acquires full legal
personality - all rights given by law to LLOs.
6.) True. A labor organization can be the bargaining agent opf 2
bargaining units. Yes, based on the Holy Child case.
7.) False. No person convicted of a crime involving moral;
turpitude shall be eligible for membership in a labor union.
The conviction for moral turpitude is a disqualification for
union officers, not membership.
8.) False. According to the SC (Hanjin Shipyard case),
collective bargaining is NOT the end-goal of employee
representation. It is PARTICIPATION. It may happen outside
of bargaining. Employees are not limited to the option of
establishing an LO for collective bargaining, but also for
mutual aid and protection
9.) True. In determining the appropriate bargaining unit, only
SUBSTANTIAL similarity is required, not absolute.
10.)False. In registering as an independent union, a labor
organization must submit the signatures of members
comprising at least 20% of all the employees in the
bargaining unit where it seeks to operate. What is required in
REGISTRATION is to submit the LIST of members -- and not
the signatures. The signatures are for PCE
11.) False. If valid CE where three are contending union resulted
in none of the choices getting majority of the valid votes cast
and at least hadl of the POTA ANG BILIS - Run off Election
12.)False. (I always get wrong answers for this issue) If the
segregated votes can materially alter the final results of the
CE, the next step is to open and count - If the segregated
votes are material, you do not proceed to opening the
envelopes but to determine which to open and count. Med-
Arbiter must determine the eligibility of the voters. In fact,
you may not need to open the ballots.
*you can change the object/subject, in the explanation of why it is
false.
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
ESSAY PORTION
Q1
A-119
B-10
No union-101
Abstain-30
Total votes casted - 260
Total voters- 90% of eligible
A1: There is a valid election because more than 90% voted. There is
no winner. In this example - abstentions - the total valid votes is 260.
Include Abstention votes as valid votes casted. There is no winner
because none of the choices got a majority of 260. Run-off is not
possible because the total votes for the contending unions (Union A
and B) are short vis-a-vis 50% of the votes casted. It will serve as a
bar to the filing of a PCE since there is a valid election.
A1(b): Changing the abstentions to spoiled ballots will reduce the
valid votes cast. The valid votes shall be 230.The majority shall be
116. So, there is a winner - Union A, which got 119.
Q2: You have to identify whether the voters are eligible or not
eligible.
1st set- rank and file
2nd set- promoted rank and file (supervisory)
A2:
A. Take note that you have rank and file EES then you have
EES who used to be rank and file, are they eligible? You
have to determine the cut off. The supervisory EES should
be allowed to vote because they are part of the BU 3 mos
prior to the CE. take note that there is a practical issue to
this question. If you say that supervisory ees are not
anymore allowed to vote, then you are giving the ER the
incentive to promote EES so that they cannot anymore be
allowed to vote..
State the rule on the cut off for eligibility which is 3 months
prior to the filing of a PCE then you are eligible.Thus the
supervisory EEs should be allowed to vote because they are
part of the BU 3 months prior to the filing of the PCE. There
is a practical issue concerden in this question. Because if
you allow this, the employers will have incentive to promote
their employees, to dilute the bargaining unit, circumventing
the law.
B. Confidential employees are those who occupy positions of a
fiduciary nature who assists a managerial employee and
because of this fiduciary relationship, the confidential
employee has necessary access to confidential information
in relation to labor relations. Cashiers, who handle cash, are
not confidential employees. They may be holding positions
of trust and confidence, but they are not confidential
employees.
C. Employees dismissed by the company - as long as it is
contested, they are allowed to vote. If they failed to contest ,
they are not eligible to vote.
Q3:
A3:
A. YES. Med-Arbiter can decide EER to determine whether a
CE should be conducted. This is an ancillary issue (codal)
B. Lack of EER is a ground if ALL members of the petitioner
union are not employees.
Q4: Union members of SEBA withdrew from union, and formed
another union. Should the new union compel ER to nego
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem

A4: No. The new union has no certification as SEBA. The status of the fact that its constitution and by law is similar to that of the
the incumbent SEBA continues unless there is a PCE filed within the federation) Therefore, everything follows. The notice of strike
freedom period and a CE is conducted. You cannot ask the company filed were filed by non-LLOs.
to negotiate, even if you have the majority membership. It is too late.

The shift in the allegiance will not affect the status of the SEBA, kahit
pa 20% or whatever nalang naiiwan sakanya, as long as there is no
new certification election conducted.

Q5: WON arbitral award is covered by the provision extending

the effectivity of the CBA -- hold over provision.
A5: YES. The law does not distinguish, An arbitral award is an
approximation of the parties’ agreement - as if it was voluntarily
entered into. Whether kiok loy doctrine applies or because there is
assumption of jurisdiction - it will have the same effect as a CBA
voluntarily entered by the parties.

Q6: 2 unions RECENTLY organized: 1 individual union & 1

chapter. Both filed Notices of Strike.
A6: While the question asks the validity of strike, critical to the issue
is WON the Unions are legitimate LOs to have legal personality to
file a Notice of Strike. Ultimately the issue here is WON on April 13,
2021, it had a legal personality to file the notice of strike.

a. NO for both independent union & chapter. IU acquires legal

personality from the time it is issued a Certificate of
Registration by the DOLE. In this case, there was none.
Hence, the IU is not an LLO which has a standing to file a
Notice of Strike. A chapter acquires legal personality upon
issuance of a Charter Certificate by the Federation.
However, its legal personality is limited to filing of a PCE
only. To be entitled to the right to file a Notice of strike, it
must have submitted additional documents (i.e: names and
addresses of the chapter’s officers; principal address of the
chapter; constitution and by law, or an affidavit attesting to

36
Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
29 April 2021
Sir’s comment on Sonza v. ABS-CBN
● In the radio show, it was a different situation.
● Unfortunately in the decision of the SC, the Court lumped
together the functions of Sonza as a TV personality and a
radio broadcaster.
● Had the SC dissected the two, it would have found factual
distinctions which would delineate the two jobs.
● What added complexity was the talent agency, which Jay
Sonza was the president. Even if it was alleged that in the
previous contract, there was no talent agency involved. It
added a layer of complexity in the case, which worked
against Jay Sonza. To which the court said that he was not
dealing with ABS-CBN himself, but through an agency.
● What was interesting was that Sonza argued that the talent
agency which he headed was only an LOC. It was his, yet he
was arguing that. I think that added to the confusion.
Manuel: This is weird. It’s his company!
- Essentially, he was accusing himself through his
company, that he was committing an illegal act
(LOC) and hence ABS should be liable! That’s weird.
That backfired against him.
- If we remove the existence of talent agency, and
Sonza dealt directly with ABS without a
representative, it could be a different situation.
There’s nothing wrong with an employee negotiating
for himself. That should not negate the finding of an
EER, especially when he is talented like Sonza.
● Another additional item that confused the court and the
parties, was the notice of rescission that Sonza sent. It is
possible that from Sonza’s POV, he was not dealing with
ABS as an employee.
○ Sir thinks that it was a mistake on the part of Sonza
that he sent a notice of rescission instead of a
resignation letter.
● On the other hand, the 13th month pay and other benefits
should have been cited by the court in favor of Sonza.
○ The group argued that It was a superfluity because if
Jay was an employee, that wouldn’t be needed.
○ If Jay was an employee, you don't need to mention
those benefits, but it could be interpreted in another
way: 13th month pay can be said to be an employee
benefit. So Why use that term if he’s not an
employee? This could have been used by Sonza to
argue on his side. Because otherwise, why use this
term?
● The tax issue is clear both for sonza and tongko: we could
not determine EER with what the worker filed with the BIR.
That is not conclusive. It could be a determining factor.
○ The tax treatment of compensation cannot be
determinative of the existence of EER.
● Exclusivity is not an essential element of an EER, the fact
that you’re working exclusively does not, in itself point to the
existence of EER
● Problematic: Emphasis on Jay Sonza’s status as a celebrity.
● The court relied on the unique skills and the unique talents of
Jay Sonza. Is a highly talented individual not eligible to be
employed as an employee? What is problematic in the case
is the court's overemphasis on Sonza’s status as a celebrity.
This is also how the SC arrived at a talent category-- also
having a new doctrine, a talent doctrine.
● But does this mean that a talent cannot be an employee?
○ No matter how unique a person is, or his skills, or no
matter how high his celebrity status is, that doesn’t
disqualify him from being an employee.
37
Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
Query: is it possible that sonza is only arguing the Labor-only
Contracting only because he wants abs to pay?
- Yes but that is his own company! It's an ordinary argument
but it's weird because he is accusing his own company of
being an illegitimate contracting company.
- That’s why this worked against sonza.
- In fact there is a letter complaining about Sonza the talen---
how confusing canthis be?
If we remove this and sonza dealt with ABS CBN without any
representative, it could be a different situation
● The Court here heavily relied on his status as a celebrity.
This talent doctrine opened up so many cases that the
networks tried to abuse it and apply it to all its employees
like video camera men, etc. Fortunately, the Court has been
consistent in ruling that the talent doctrine would not apply to
them. So as it stands, the Sonza case is unique.
Query: would there be a distinction if it is live or not
- Unique because it’s live. Walang take two. It’s not like the
making of a movie where the director can ask you to retake
and retake. If it’s a live show like radio, if it was taped as live
that’s it. I don't know how they did it in Sonza if it was live or
they could retake since again the SC did not dwell on this,
but based from the facts there, control could be seen more in
his function as a TV personality i.e. “oh may commercial
muna tayo, iccut mo muna sinasabi mo dahil may
commercial.”
● Im not sure if they presented evidence in this case but they
should have, otherwise you are limited in looking at the
contract.
Judicial legislation ba na nag-dagdag ng classification na “Talent”
yung court? Na wala namang ganun elsewhere?
Sonza was occupying the highest hierarchy in ABS CBN. mala noli
de castro. Ganun siya ka-sikaw. In fact, sabay sila ni mel tiangco na
nag file but mel had a settlement
Take away from Sonza: The “talent doctrine” that the SC laid
down, was NOT applied in many subsequent cases, because the
court did not find any instance that it was compatible with the
Sonza case.
Tongko v. Manulife
Judges Group’s decision:
● EER exists using four-fold test
● Control: Tongko was hired and was given assignments;
Manulife controlled the various objectives in Tongko’s work
including recruitment and training; the prescribed Code of
Conduct provided minute details of his work; letter of De
Dios left no doubt who was in control over the actions of
Tongko
● Exclusivity argument: 19 long years working exclusively with
Manulife
● Existence of EER is not by virtue of the Career Agency
Agreement but by the existence of the circumstances
present in the case
● Indicators of EER: Given an office, elevation to a managerial
position
Sir Comments on Tongko:
● Tongko was a manager (context of EER or in a generic
sense) - was managing and supervising other EEs; Jay
Sonza did not have that role
38
Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
● Tongko was primarily a field worker unlike sonza who
worked within the premises of abs cbn. Tongko was given an
office, but primarily work is done outside.
● Tongko was governed by certain government-imposed rules
for insurance agents; Jay Sonza was not covered by a
similar set of rules. There are more restrictive rules for
insurance agents.
● Going back to our discussion earlier, unfortunately for
Tongko, he was relying primarily on the letter of De Dios to
establish control, unfortunately the court found it to be
insufficient. The court even looked for a copy of the
agreement but he was not able to present it. Tongko relied
heavily on that letter, without establishing clear facts of
control.
● Another distinction is the mode of compensation between
Tongko and Jay Sonza. Commission can be wages.
● The fact that a worker is earning commissions is not
inconsistent with payment of wage because wage could be
paid through many forms. This fact should not have worked
against Tongko.
Query: In the resolution there is a ruling about a subsequent
contract. Do you need to have a subsequent contract to be
considered as an employee?
- In an EER, a contract is not material. Intent is not material in
determining the existence of EER. If the parties stipulated
that “We are not entering into an EER” - despite such
stipulation, there could still be an EER.
● In that sense, intent is not material, in most cases the intent
of the employer is to deny the relationship. The issue of EER
is not the starting from a neutral position.
● You’re not starting from the position where you are trying to
find out how their relationship should be categorized, it
becomes material in situations where the situation of
EER is being denied by the employer
● The absence of a written contract, always works in favor
of the employee. Employment contracts are not negotiated.
Contracts are generally created for the benefit of the
employer (bc drafted by the employer), it is a contract of
adhesion. Most propositions of a contract work in favor of the
ER. so sometimes I prefer there there is NO written contract.
Akala ng iba pag wala kang kontata mas dehado ka. BUT IT
IS THE REVERSE.
● On the other hand, It is still important to determine the real
intent based on the situation. The intent should be evident in
the circumstances
● For example if the worker intends that he works for the
employer, then that is his intent. Otherwise if it is evident that
that was not the intent.
● Go through the written contract, go through what the
employee is saying. It is a factual; determination, especially
on the issue of control.
In Tongko, he was managing people who were not employees, court
said kahit, manager ka, yung minamanage mo naman hindi
employee, edi hindi ka rin employee. Sir: It is NOT logical. It could be
that his task is precisely to manage these non employees.
There Is a potion in the decision in tongko where it was pointed out
that even if tongko was a manager, he was managing not EEs. lead
agent ka, but yung mga minamange mo naman hindi EE.
- Manuel: i think that’s illogical. You can still be an EE even if
what you're managing are not employees.
- You can manage non employees but it does not preclude
you from being an EE.
Query: Do you agree with the position in the dissent that Manulife
said that the dismissal was legal so he’s an employee
- In any case, any change in your position is not good
39
Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
- Regardless if you are an EE or not, the same cause for the
dismissal could apply
- Regardless of the Employment contract, the same cause
can be a ground for dismissal.
- So that is not an inclusive factor.
- The dismissal is not important
What I find more interesting is the desert that tongko should be
considered both an agent and an EE.
- Dissenting opinion: Tongko should be considered an agent
and an employee.
- What was missing in the decision was any reference to
the case of Villamaria v.CA. The court should have pulled
out the case which states that there could be dual
relationships. It could have been a way for the court to say
that they are agent-employee.
- In Villamaria, it was a vendor vendee relationship PLUS
EER. Two types of relationships can exist. But the court did
not go back to that and even the dissent did not cite this.
I think, comparing the two cases, jay sonza’s case is more
defensible. It is easier to argue for EER existence in sonza case than
in tongko.
Decisions would emphasize the importance of the control test over
the others. In fact, I always criticize the court for giving the three
other tests. Why give the other three if the fourth is more
determinative?
- Selection and engagement - In contracting services, there is
always an engagement. Whether hiring as an employee or
not. That in itself is not a badge of employment. Any person
providing services to other will be engaged somehow
- Hiring is not unique to employment.
- Dismissal, in the Tongko case, the same grounds for the
dismissal of an employee, can be the same grounds for the
dismissal of an agent. You can copy the provisions of the
code and say that these are the grounds to terminate EER
yet the same may still hold as ground for termination in a
relationship that is NOT EER. It applies to any type OF
RELATIONSHIP. So dismissal is a bad factor in determining.
- Wages, this is worse. putting the cart before the horse..
What does it mean by that? You pay wages to an employee
because an employee is entitled to wages, it's not the other
way around
- Because you are an employee, you’re entitled to wages.
There’s a precise definition in the labor code, you cannot
reverse the formula and say because i’m paying you wage,
you are an employee
- The payment of wage can be in different modes (daily,
monthly, weekly, yearly, lumpsum, commission), which again
brings us to a generic compensation. Wage is a generic
compensation - compensation for the performance of
services for another (example: fees paid to a lawyer - not
wages)
The 3 are not good indicators on the existence of EER. they could be
additional, supportive circumstances justifying the conclusion but
eventually you have to look at the control
- You have to look at the mean and manner this is critical.
Especially in tongko, it was not able to show this. employer-
employee relationship.
- When we talk about the result, it's the final stage of the work.
So if you’re working, you start at one point and end in
another, in between you do processing, intellectual or
physical. Control happens at the end of the process. THAT
IS NOT WHAT WE NEED.
40
Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
- We need the control that exists while the work is being done,
not the product. The work is not the product. The product is
the result of the work.
- Example: A computer desk, i can provide the specifications,
the dimension, the color and the materials but that will not
make me the employer of the person who will produce it
because my control is over the laptop table. I am not
controlling the manner
- How do we convert that? We identify what the work means,
ano ang trabaho niya, the work involves cutting the
materials, measuring the materials, assembling the
materials, doing the finishing touches, that is the
performance of the work. If you can interfere at any given
time - then that is control.
- We do not need actual exercise of control. We just need to
prove the existence of the power to control.
- Exercise of power is an evidentiary aspect of the formula. In
this case, even if i have not interfered, if the circumstances
would show that I could have done that anytime, it says that
the power is not in me. [NOT in me ba?? Rinig ko THE
POWER WAS IN ME.]
- So when we are talking about the means, we are not talking
about the end-product. Because if you are only interested in
the final product, then you are not controlling the work itself.
- Nagpatahi ako ng barong. Binibisita ko ba yung tailor araw
araw? No. that was not part of the agreement--not the
intention . even if there is no written, klaro sa amin na di niya
ako binibigyan ng kapagyarihan na bantayan siya. I am only
interested in the final product--the barong, that I will get in
the end.
- Regarding the guidelines, no matter how thick your manual
is, if what is written there is only about the product and not
about the MANNER in doing the product, then that will not
indicate the existence of EER.
Query: If you told your tailor that you want a chinese collar in your
barong, is that a product? Or the manner?
- Yes that is still the product.
- Measurement of gaps between the button - still a control
over the product.
- But, the moment I said na babantayan kita and your left hand
must be used to do this and that - this is control.
Query: If you provide the manner, then does that mean that you also
control the output?
- The question that you must ask
1. What are you controlling
2. Where is your power of control over (output/manner)
Place of work - indication of power. Because if nagtratrabaho ka sa
loob ng factory ko, I can, at any given time, say na mali ‘yang
ginagawa mo. But it doesn’t mean na porket nasa labas ka you are
not an employee bc we have what we call Field Employees.
Query: What if you say to the tailor to do it hand-stitched?
- That is still on the product
In one case,remittances--yung mga nacollect ng collectors, there are
rules on how they would remit it (i.e: may forms na need i-fill out), the
SC said that is still control over the product.
- This is still control over the product - tapos na ang trabaho
nila. nirereport nalang at binibigay nalang sayo ano
nakolekta nila
The starting point of all of this is tat we do not have a statutory
definition of EER so we have to rely on jurisprudence. -- but
jurisprudence is not helpful.
- No statutory definition when EER exists. Thus. we have to
rely on jurisprudence.
41
Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem

- Jurisprudence is likewise not helpful

- The four fold It ends up to one, which is the control test

Topic for Tuesday: CONTRACTING.

42
Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
04 May 2021
Introductory Discussion on Contracting
Article 106 gives us the state policy on contracting
-Policy points to regulation
- purpose: restriction and prohibition
- not simply regulation for allowing it but regulation so that the
practice will be prohibited
- by inference the statement of policy, as a general rule, is inimical to
the rights of workers. Hence, state is mandated to restrict/prohibit
- SOLE may make a difference between diff types of contracting
- Second sentence repeats the mandate of prohibition or restriction.
It expands the mandate, SOLE may make distinctions between labor
contracting and job contracting.
-The SOLE can determine who between the parties involved is the
employer.
-106 does not contain prohibition but authorizes the SOLE to
prohibit contracting
What type of contracting may be prohibited?
● Can the SOLE issue a rule prohibiting any type of
contracting arrangement? YES. If we base it on 106, SOLE
may prohibit ANY TYPE of contracting without any
distinction between labor-only and job contracting.
● Contracting in general may be prohibited by the SOLE.
There is no need for any law.
Do we have that prohibition on all types of contracting? Ys. But we
do not have that yet.
If we look at the rules issued by the SOLE. it could be seen that Art
106 has been diluted.
The policy under Art. 106 has been diluted DO No. 18.
Sec. 1, DO 18-A. It flipped the policy stated in the Labor Code. Labor
contracting is allowed by law, but subject to regulation for the
promotion of employment. There is nothing in Art 106 that talks
about a mode to promote employment. But that is how the DOLE
sees it.
It now becomes the dilemma of the DOLE, to restrict or liberalize the
contracting. The DOLE sees contracting as a mode of promoting
employment.The DO is not faithful to the mandate of Art 106, which
is to restrict or prohibit.
Even the reference to the rights of the workers is mild. “Observance”
is a very mild word to use. There is a tempering of the state policy.
Article 106 - to protect the rights of workers
DO 18-A - observance of rights of workers
There is a tempering of the state policy ion Art 106, there is dilution
in so far as the rules are concerned. This is so far as the repealed
DO 18-A. I am showing this to explain the context of rule setting.
DO 174 2017 is very generic.
- Simply provides non-permissible forms of contracting
- SOLE shall regulate contracting or subcontracting - still very
generic
- This was very anticipated because of Duterete’s promise to
end ENDO. But there;s nothing new with this rule.
- There is nothing radical in so far as regulation of labor
contracting iis concerned.
- Sec Bello emphasized today that they are absolutely
prohibiting labor only contracting.
- What's the difference? NOTHING. It was prohibited before, it
still is now.
43
Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
There is no significant difference between DO 174 and DO 18 ba?
Explain the Concept of contracting:
● A principal obtains the services of a contractor in a service
agreement.
● Contracting - arrangement whereby principal agrees to farm
out to a contractor the performance or completion of a
specific job or work within a definite or predetermined period,
regardless of whether such job or work is to be performed or
completed within or outside the premises of the principal
(DO 174-7, Sec 3 c)
Give an illustration of the basic concept of contracting
● The Owner of a Mall seeks out the services of a security
agency to secure the premises of the mall
● The Principal is the Mall Owner
● The Contractor is the Security Agency
In that illustration, what services are involved
● Security, providing manpower to the mall.
● To whom are the services rendered for? The owner of the
mall
So ultimately the owner of the mall benefits from the services of the
security guards.
● Who is the employer?
○ The direct employer is the agency
○ The indirect employer would be the mall.
● Does the principal have any contractual relationship with the
workers, in this case the security guards?
- No sir, it would only be the security agency.
- The Principal only deals with th Security Agency
- Yes
And the security agency hires and employs for the duration of the
contract with the principal?
- Yes.
In this case, we have three parties:
● WORKERS - entering into an employment contract with the
contractor
● CONTRACTOR
● PRINCIPAL- enters into a service agreement with the
contractor
If the Principal is not contractually related to the security guards, why
is it the Indirect employers?
- Solidarily liable in case of failure to pay wages by the direct
employer or the contractor
Who is primarily liable to pay wages?
● The contractor is primarily liable because it is the contractor
who is the employer.
When does the Principal come in?
- Principal becomes Indirect Employer when Contractor fails to
pay wages
What do you mean by failure? The inability of the contractor or if it
has absconded?
● Simply failure to pay, the employees can go after the
principal. No need for reason.
Refer to the security agency example above.
You have the owner of the mall as the principal, let us say the
employment contract was for one year. After 6 months, the
contractor failed to pay the wages. For the 1st 6 months the wages
have been paid, for month 7 and 8, no wages have been paid.
● The extent should be to the services already rendered. So
month 7 and 8 are included.
44
Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
● Let's say the agency has closed, can the workers continue
working, will the workers be entitled to wages? Is the
principal liable to allow the guards to continue working
knowing that the agency has closed down?
● The workers do not have a direct contractual relationship
with the principal. Principal does not assume the role of the
contractor as the direct employer. It has no responsibility to
continue the employment contract knowing that it will
shoulder the payment of wage for the last 4 months of the
year. Its liability is limited to month 7 and 8 that the workers
had already worked.
Is the principal absolved that it had paid the contractor in full
pursuant to the service contract for 1 year?
● No. Principal is still liable in case the contractor fails to pay
the wages.
● It may happen that the principal will pay twice.
Why are we holding the principal liable again despite payment
to the contractor?
● To protect the workers
● Recourse of the principal: Go after the agency.
What if the agency has closed down and ceased operations and
no more assets? Will the principle bear the loss?
● Yes. Is there no other way for the principal can recover?
How can the principal prevent that from happening? What can
the principal do to protect itself?
● Principal may require Contractor to post a Performance
Bond.
● Performance Bond is not mandated by law but is recognized
to ensure that the contractor has paid the workers the wages
due them.
Is the principal's liability limited only to wages?
● No.
Anytime there is dismissal done by the contractor and the dismissal
is declared illegal, the remedies like backawages are shouldered by
the Principal?
● Yes. Art. 109
● Any violation under the Code is covered by Art. 109.
Wherein the Principal is solidarily liable with the Contractor
BUT the SC in the Rosewood case has restricted Art 109. It is
limited to the principals who have CONNIVED with the
contractors. It will only apply if the principal is at fault.
Otherwise the principal cannot be held liable despite the clear
wording of Art. 109 (Rosewood Case)
For the purposes of the exam, use Art. 109 AND jurisprudence. Do
not ignore jurisprudence.
How will the situation change when we convert the contracting
arrangement to a prohibited arrangement (labor only
contracting)?
- If its labor only contracting, the principal will be considered
as the real employer and the contractor will be considered as
an agent only of the employer
Automatically?
- Yes, if labor only contracting
When there is a finding of labor only contracting, you change
the relationships. The contractor is converted into an
intermediary.
- Yes
Is the principal in that case still solidarily liable?
- Yes sir.
45
Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
So in both legitimate and prohibited contracting, the principal is
liable with the contractor?
- Yes
In which situation is the solidary liability of the principal more
significant?
● In Ordinary Contracting, since if it is an ordinary
contracting then solidary liability of the principal is with
regard only to the non-payment of wages of the contractor.
What about in prohibited labor-only contracting arrangements?
- Not really because the Principal will be considered as a
Direct Employer.
- You do not need to invoke the solidary liability of the
Principal anymore because it is the Direct Employer already.
- The solidary liability of the principal is NOT significant here
because the principal is the employer.
While the solidary liability of the Principal applies in both, it is more
important in Ordinary Contracting since the Principal becomes the
direct employer in Labor-Only Contracting
Is that effect of entering into Labor only Contracting. Is the employer
only liable when he does a prohibited activity?
- The employer need not engage in a prohibited activity. Labor
only contracting can arise as long as the elements provided
for is present
What is the basis of the direct liability of the principal? Is it the
commission of a prohibited labor only contracting?
- Yes sir, as long as the principal is engaging the employees
and the employees are performing their work which is
directly related to the principal’s business, and he does not
have sufficient capital
- (Insert Sec 5)
- It becomes the employer not because of a prohibition but
because it has entered into a labor contracting agreement.
We don’t need the Rules (DO) for that to apply?
- Yes since it is imposed by law in Art. 106.
- Art 106 does not prohibit labor only contracting but it
defines labor only contracting and it provides the effect
(liability) of entering into labor only contracting. Thus,
even if the SOLE has not prohibited Labor Only
Contracting, the liability under Article 106 will apply
- Hence, even before we read the Department Order, it is
already provided in Art 106. Even if Art. 106 does not prohibit
it, it defines the consequence.
Regardless of the prohibition in the rules, together with it, entering
into an agreement falling under LOC, then there is LOC.
The rules will not affect the application of such consequences of
entering into a labor contracting arrangement.
It is important for us to know when a contract falls under LaborOnly
Contracting. Not only because we want to determine whether the
parties committed a prohibited practice but because we want to know
when the consequence will apply.
(Canvas Session)
46
Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem

A - Labor only: bc all elements are present

B-
C-
D-
E-

GROUP 3: DO 18-A, 2011

The phrase “For this purpose, labor-only contracting shall refer
to an arrangement where the contractor or subcontractor
merely recruits, supplies or places workers to perform a job,
work or service for a principal, and any of the following
elements are present” was deleted in this DO.
There is a definition of LOC - “any of the following elements are
present”
A - Labor only
GROUP 1: DO 10, 1997 B - Legitimate
CONCURRENCE OF (EITHER OF THE 2 OPTIONAL REQ) AND C- Legitimate
WORK MUST BE DIRECTLY RELATED TO THE BUSINESS OF D- Legitimate
THE PRINCIPAL E= Legitimate
2 items (i) & (ii)
A - Labor only
B - Legitimate GROUP 4: DO 174, 2017
C - Legitimate: met either of the 2 optional criteria BUT it is a [A] -All clumped into 1 group: (no substantial capital OR no
Legitimate Contracting Arrangement since work is not directly related investment AND directly related) - (i) (ii) (iii)
D - Legitimate: even if directly related, either of the optional criteria [B] - right to control
were not met
E - Legitimate A- Labor only
B- Legitimate
GROUP 2: D0 18, 2002 C- Legitimate
CONCURRENCE OF (EITHER OF THE 2 OPTIONAL REQ) AND D- Legitimate
WORK MUST BE DIRECTLY RELATED TO THE BUSINESS OF E- Legitimate
THE PRINCIPAL
Those 2 items above were combined in 1 sub-paragraph GROUP 5: ARTICLE 106, LABOR CODE
***Same answers with Group 1

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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem

All groups say that Item E is legitimate labor contracting. Does that
mean that we can allow a contractor to operate without capital? And
without any investments?

Think about Item D. Does that mean that a factory can contract out
about 90% of the work just because it has substantial capital?

Think about these 2 questions first for next meeting (thursday).

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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
06 May 2021
Group 5 Report based on Art. 106 of the LC
1. No substantial capital or
2. Nos substantial investment; AND
3. Work is directly related to the business of the principal
Is Art. 106’s definition different from the other DOs’ definition?
Yes.
1. Investment is specified in 106 v. Room 1
2. No prohibition of labor-only contracting v. room 2
3. Right to control is not specified in Art. 106
4. Compared to Room 3,
[Hingin kay Bono pinagsasabi nya]
SITUATION A: Labor-Only. Both elements present and work is
directly related
SITUATION B: Not Labor Only even if there is no substantial capital,
the work is not directly related.
Situation C: despite existence of the first two elements, work is
NOT directly related
Situation D: First, the work is directly related but there is substantial
capital and investment
- Case: If a work is directly related to the principal, even
without either substantial capital or investment, it can still be
considered LOC.
E: Not LOC, despite the existence of one of the two elements, the
work is not directly related to the business.
Sir: So how do we interpret the definition? You cannot have LOC if
the work is directly related to the principal?
Because you are only looking at the wok of the employees to the
principal; that's the only element we should look at? Based on the
definition Art 106, it would seem that only A should be considered as
LOC. However, there is case law that provides that Situation D can
be covered despite that inexistence of substantial capital or
investment requirement.
In short, the definition in the Labor Code and the Rules require a
concurrence of the absence of capital or investment AND direct
relationship of the work of the principal, otherwise, there is no LOC.
And without such concurrence, there can be no LOC? WHy do we
require concurrence based on the wording of the definition?
A: Comma and the conjunction “and.” Kala ko rationale tinatanong
ni sir. Hahaha
As in any other provisions of law, the definitions are
complicated --complex sentences. If you look at art 106 it says
there is LOC is no substantial capit COMMA, AND work is
related etc.
( “xxx, among others, and xxx”)
If you compare it with the rules, nothing has changed, other than
restructuring the definition (i.e: dividing the elements; combining the
elements into 1 paragraph). Rt 106 has one continuous sentence.
The main q for us is how we should interpret 106
How should we interpret Art. 106?
Look at situation D and E - not LOC because there is no
concurrence.
If we look at D, D allows contracting out of workers for work directly
related (as long as Principal is rich)
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
Implication: liberal rule that allows employers to hire employees thru
a contractor - practically all employees. Principals can avoid rights of
workers to be considered as employees and as regular employees of
the principal. The issue of contracting is related to security of tenure.
Contracting is essentially fixed-term employment. The rule provides
protection for employees of the contractor but they are covered by
limited term stipulated in the contract. If we allow Situation D as
Legitimate Contracting, it will end regular employment status with
principals that are the operators of business. They may not become
regular employees because you can hire a new set of employees
once the employment contract lapses, especially if the job doesn't
require specialized skills.
If situation D is allowed that will allow the owner of a factory and
avoid having a regular employee. And the collective rights will be
sacrificed.
The more obvious problem is Suitation E - Legitimate
Contracting - does not have capital or investment. A contractor
with no capital or investment cannot be considered as LOC as
long as the third requisite is present. BY POLICY, it should not
be allowed. They are evil practices that were not contemplated
in the definition.
I don't think D and E by principle is allowed.
(Quintanar v. Coca Cola Bottlers; June 28, 2016 En Banc
Decision) SC: No need for concurrence. Any of the two
elements should be enough to consider a contractor as a labor-
only contractor.
Will the formulation in the Rules change that?
No. Rules cannot change the definition given under the law even
though the Labor Code gives the Secretary the power to regulate
LOC.
If we reverse the formula, you can be a legitimate contractor if
you have ALL the qualifications. In short, what can be
contracted out should be jobs or services that are peripheral -
NOT DIRECTLY related to the business of the principal. It is a
factual issue.
1. Substantial capitalization and investment
2. Not directly related/peripheral
But ERs may justify by defining what is peripheral (factual).
Examples
1. Cashiers in supermarkets cannot be contracted out
Because they are essential to the business.
2. The baggers - do you need that for your business? Not only
necessity. Are you offering that as part of your services to
your customers?
The law does not require necessity. The term used by the law is
DIRECTLY RELATED. What can be contracted is supposed to be
separate from what you are regularly doing. It must be something
that requires specialization or special skills. In fact, they are licensed.
-
Security guards, while they may be necessary, that requires special
skills. In fact, they are licensed. You cannot expect all business
establishments to have their own set of security guards. That's a
highly specialized service that justifies contracting out. Unfortunately
this has become a loophole, that gave way to violate rights of the
employees (security of tenure, collective rights)
Permutations
1. No capital, Work directly related - LOC
2. With capital, work directly related - LOC
3. No capital, work not directly related - LOC
4. With capital, work is not directly related - NOT LOC
(NOTE from Mais: SO JUST TREAT ALL ELEMENTS AS “OR”)
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
Q by Kev aka Katalina: If work is NOT directly related, and there
is no substantial capital and investment?
Not legitimate because we are subjecting the EEs to abuse because
their ER does not have the capacity. THat is the reason for requiring
substantial capitalization.
IT IS SUPPOSED TO GUARANTEE THAT THE WORKERS WILL
BE PAID AND THAT THE CONTRACTOR IS AN INDEPENDENT
BUSINESS UNDERTAKING . It goes into the independence/capacity
of the contractor.
How are we going to determine if it is directly related to the
business again?
Look into the nature of the business. Q: How to determine whether
the work contracted out is “directly related” to the main business of
the principal?
A: Case-to-case basis.
ERs will always have an excuse on why it is contracting.
Pal for example, stated that we are in the business of flying planes,
Examples:
PAL: Business is flying planes. Hence, if your services (i.e: ground
personnel) are not directly involved in “flying planes” - these services
can be contracted out. Bakit? Eh kasi hindi sila lumilipad.This is an
example on how ers try to narrow down the nature of their business.
So it becomes an industry specifi cquestion
1. Hotels would say engineering and kitchen. All the rest can
be contracted out. Room boy and housekeeping di daw
needed.
2. Department Store’s sales personnel. Can the department
store argue bakit sila andyan? Hindi naman yan community
pantry. (hence needed)
3. Florists in Hotels - On a daily basis, hotels have flowers with
or without any function. Eventually the regular employees
(florists) were dismissed. Then, the hotel contracted these
services out to a contractor. ALLOWED (but see Manuel’s
opinion)
What is the effect? union members also shrink
- Because the ees will only be there until the end of their
contact (endo)
- So why would you form a union?
- But you can still be a regular even if contract ? yes but
there is a lng line of jobless ees. Umiikot lang sia sa mga
contractors.
- Thts the problem of contracting out. Whether legit or
illegit. This is the effect: EES ARE DEPRIVED OF
REGULAR EMPLOYMENT
QUERY: merchandisers are also the same?
- Thats more complicated. Merchandisers are those taga-
lagay ng prduct sa shelves.
- Some of them are employed through 3 layers of hiring:
- May agency sila. Yung agency ang kausap ay
yung supplier/product owner. Not the
supermarket.
- So sino ER? May tatlong layers ka na.
Query: art. 106 says that sole has the power to change the
distinction bet labor and job. So now pandemic, we have a
different conception of essential? So is essential
Q: Legislative question ni Pelongco? What do you think?
- Essential is higher standard as compared to directly
related. If you use the term “essential,” you exclude
more workers.
Examples:
1. Janitorial services - SC allowed a blanket a law office and for
a department store.
2. Messengerial
3. Security
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem
Is Cleanliness not part of your operations? Otherwise, it is directly
related.
But it should still be related to the nature of the business
Maisie Q: Florists were directly hired regular employees.
Changing the Q to: florists started as contractual employees.
A: if you consider their work as directly related, they cannot be
contracted out in the first place.
You can argue otherwise. CASE TO CASE nga wag kayo makulit.
BUT take note of Manuel Standard.
Q: Valet parkers in hotels- can they be contracted out? Waiters?
Laundry section for the linens and beddings?
A: Hirap besh. Basta di directly related, you can do away with such
service.
BASED on jurisprudence (Coca-Cola Case), NO
CONCURRENCE. Any of the two elements can make you a
labor-only contractor.
Those in red= Labor only contracting
Q: What about the element that the contractor must “merely
recruiting EEs to supply to the principal”
A: it is not part of the definition in Art. 106. It used to be part of the
definition in DOs. But now, it is no longer part of the definition.
*In reality, a LOC is just a recruiter/ manpower service. Because
if you don’t have investment, or substantial capital, then what
are you doing? You are just recruiting.
Q: Plantation workers in the US are covered by rights given by
law to industrial workers. But, if the employer hires not more
than 10 workers. Basta may contractors to avoid the 10-worker
limit. Purpose of contracting is avoidance of rules/
circumvention of provisions.
Note: Under the Rules, if you commit any of prohibited practices or
illicit practices, even if you do not fall under LOC, then the effect will
be the same as if you entered into an LOC where the principal shall
be considered as the Direct Employer of the employees.
MEMORIZE! Principal must make sure that the contractor is
following the Rules and the law.
Registration is required and absence thereof creates a
DISPUTABLE presumption of LOC.
SECTION 13. Effect of Termination of Employment. — The termination of
employment of the contractor's/subcontractor's employee prior to the
expiration of the Service Agreement shall be governed by Articles 297,
298 and 299 of the Labor Code.
In case the termination of employment is caused by the pre-termination
of the Service Agreement not due to authorized causes under Article 298,
the right of the contractor's/subcontractor's employee to unpaid wages
and other unpaid benefits including unremitted legal mandatory
contributions, e.g., SSS, PhilHealth, Pag-IBIG, ECC, shall be borne by
the party at fault, without prejudice to the solidary liability of the parties to
the Service Agreement.
Where the termination results from the expiration of the Service
Agreement, or from the completion of the phase of the job or work for
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Primary rounds: Bry,Mais,Alga,Aleezah,Meds,Tin,Vic, Rem

So in short, what is given only to you is the right to wait. Yun

which the employee is engaged, the latter may opt to wait for re-
employment within three (3) months to resign and transfer to another lang. Tapos 3 months pa.
contractor-employer. Failure of the contractor to provide new employment
for the employee shall entitle the latter to payment of separation benefits The end of the service agreement can only prejudice those
as may be provided by law or the Service Agreement, whichever is
higher, without prejudice to his/her entitlement to completion bonuses or employees who cannot attain regular status (?)
other emoluments, including retirement benefits whenever applicable.
The mere expiration of the Service Agreement shall not be deemed as a May 1 is a holiday - LABOR DAY. Mabuhay ang manggagawang
termination of employment of the contractor's/subcontractor's employees pilipino! In 1886, (May 4) in chicago 0 Heymarket Riot or massacre
who are regular employees of the latter.
because of demonstration of workers - basic rights of workers.

Sc. 13 of DO 174 (2017): The mere expiration of the Service

Agreement shall not be deemed as a termination of employment of
the contractor’s/subcontractor’s employees who are regular
employees of the latter.

It is good because this only covers employees who are regular

employees of the contractor. However, only a few can be considered
as regular employees.

A security agency has a one year contract with a Bank. The security
guard is assigned. After the end of the service agreement, your
employment with the agency continues if you are a regular employee
[of the contractor].

[SECOND PART: 3 month period]

The right to wait to be given another assignment.
If you are not a regular employee, however, you are not entitled to
the right to wait.
You are promised separation pay based on law or based on the
contract, WHICHEVER IS HIGHER. But if under the law, because
you're fixed term- you are not entitled to separation benefits.
Furthemore, the contract most likely does not provide for separation
benefits. 0 = 0 Furthermore, no one gives a completion bonus nor
retirement benefits. A FRAUDULENT PROMISE.

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