S C B A R S T A G N O T E S [ 2019 ]
LABOR LAW
LABOR STANDARDS
What are the rights of employees under the
1987 Constitution?
- Right of security of tenure;
- Right to receive a living wage;
- Right to a just share in fruits of production;
- Right to human working conditions;
- Right to engage in peaceful concerted
activities, which includes the right to strike, in
accordance with law;
- Right to conduct collective bargaining or
negotiation with management;
- Right to participate in policy and decision-
making processes affecting their rights and
benefits as may be provided by law (Protection
to Labor Clause: Article XIII, Section 3)
Outsourcing any activities as management
prerogative
In one case, the Court held that it is management
prerogative to farm out any of its activities, regardless
of whether such activity is peripheral or core in nature.
What is of primordial importance is that the service
agreement does not violate the employee's right to
security of tenure and payment of benefits to which he
is entitled under the law. Furthermore, the outsourcing
must not squarely fall under labor-only contracting
where the contractor or sub-contractor merely
recruits, supplies or places workers to perform a job,
work or service for a principal.
Do you know that it is not an illegal reduction
of work, by way compressed work week, when
the arrangement is resorted to prevent serious
losses due to causes beyond the employer's
control?
This was explained in Linton Commercial
Company, Inc. v. Hellera, where the High Court
upheld the validity of the reduction of working
hours, taking into consideration the following:
the arrangement was temporary, it was a more
humane solution instead of a retrenchment of
personnel, there was notice and consultations
with the workers and supervisors, a consensus
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BRAVO BASTE!
were reached on how to deal with deteriorating
economic conditions and it was sufficiently
proven that the company was suffering from
losses.
The Bureau of Working Conditions of the DOLE,
moreover, released a bulletin providing for in
determining when an employer can validly
reduce the regular number of working days. The
said bulletin states that a reduction of the
number of regular working days is valid where
the arrangement is resorted to by the employer
to prevent serious losses due to causes beyond
his control, such as when there is a substantial
slump in the demand for his goods or services or
when there is lack of raw materials
Grant of bonus
2014, 2005, 2003, 2002 and 1995 Bar
From a legal point of view, a bonus is a gratuity
or act of liberality of the giver which the
recipient has no right to demand as a matter of
right. he grant of a bonus is basically a
management prerogative which cannot be
forced upon the employer who may not be
obliged to assume the onerous burden of
granting bonuses or other benefits aside from
the employee‘s basic salaries or wages.
A bonus, however, becomes a demandable or
enforceable obligation when it is made part of
the wage or salary or compensation of the
employee.
Whether or not a bonus forms part of wages
depends upon the circumstances and
conditions for its payment. If it is additional
compensation which the employer promised
and agreed to give without any conditions
imposed for its payment, such as success of
business or greater production or output, then it
is part of the wage. But if it is paid only if profits
are realized or if a certain level of productivity is
achieved, it cannot be considered part of the
wage. Where it is not payable to all but only to
some employees and only when their labor
becomes more efficient or more productive, it is
only an inducement for efficiency, a prize
therefore, not a part of the wa
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LABOR LAW
Illegal Recruitment
The crime of illegal recruitment is committed when
two elements concur, namely: (1) the offender has no
valid license or authority required by law to enable one
to lawfully engage in recruitment and placement of
workers; and (2) he undertakes either any activity
within the meaning of "recruitment and placement"
defined under Article 13 (b), or any prohibited practices
enumerated under Article 34 of the Labor Code.
(Romero vs People)
Illegal Recruitment involving economic sabotage
llegal recruitment when committed by a syndicate or
in large scale shall be considered an offense involving
economic sabotage.
Illegal recruitment is deemed committed by a
syndicate if carried out by a group of three (3) or more
persons conspiring and/or confederating with one
another in carrying out any unlawful or illegal
transaction, enterprise or scheme defined under
Article 13(b).
Illegal recruitment is deemed committed in large
scale if committed against three (3) or more persons
individually or as a group. To prove illegal recruitment in
large scale, the prosecution must prove three essential
elements, to wit: (1) the person charged undertook
a recruitment activity under Article 13(b) or any
prohibited practice under Article 34 of the Labor Code;
(2) he/she did not have the license or the authority to
lawfully engage in the recruitment and placement of
workers; and (3) he/she committed the prohibited
practice against three or more persons individually or
as a group and Employment. All foreign nationals who
intend to engage in gainful employment in the
Philippines shall apply for Alien Employment Permit
(AEP).
Qualifications for local recruitment and
placement
2002 Bar
The applicant for a license to operate a private
employment agency must possess the
following:
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BRAVO BASTE!
a. Filipino citizens for single proprietorship and
seventy five percent (75%) of the authorized
capital stock is owned and controlled by Filipino
citizens for partnership and corporation.
b. Minimum net worth of P1,000,000.00 in case
of single proprietorship and a minimum paid up
capital of P1,000,000.00 in case of partnership
and corporation; and
c. Not otherwise disqualified by law or other
government rules and regulations to engage in
the business of recruitment and placement of
workers for local employment.
Coverage of alien employment permit
Any alien seeking admission to the Philippines for
employment purposes and any domestic or foreign
employer who desires to engage an alien for
employment in the Philippines shall obtain an
employment permit from the Department of Labor
and Employment. All foreign nationals who intend to
engage in gainful employment in the Philippines shall
apply for Alien Employment Permit (AEP).
Persons and entities that are disqualified to
participate or engage in the recruitment and
placement of workers for overseas
employment
2006 Bar
1. Travel agencies and sales agencies of airline
companies;
2. Officers or members of the Board of any
corporation or partners in a partnership
engaged in the business of a travel agency;
3. Corporations and partnerships, where any of
its officers, members of the board or partners is
also an officer, member of the board or partner
of a corporation or partnership engaged in the
business of a travel agency;
4. The applicant is presently an incorporator,
director or key officer of at least five (5) licensed
manning agencies;
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LABOR LAW
5. Individuals, partners, officers or directors of
an insurance company who make, propose or
provide an insurance contract under the
compulsory insurance coverage for agency-
hired Overseas Filipino Workers;
6. Sole proprietors, partners or officers and
members of the board with derogatory;
7. Any official or employee of the DOLE, POEA,
OWWA, DFA, DOJ, DOH, BI, IC, NLRC, TESDA,
CFO, NBI, PNP, Civil Aviation Authority of the
Philippines (CAAP), international airport
authorities, and other government agencies
directly involved in the implementation of RA
8042, as amended, and/or any of his/her
relatives within the fourth civil degree of
consanguinity or affinity.
Do you know that while a declaration of
redundancy is ultimately a management
decision, it must not violate the law nor
declare redundancy without sufficient basis?
In Manggagawa ng Komunikasyon sa Pilipinas
vs. PLDT, the High Court listed down the
elements for the valid implementation of a
redundancy program:
For the implementation of a redundancy
program to be valid, the employer must comply
with the following requisites: (1) written notice
served on both the employees and the
Department of Labor and Employment at least
one month prior to the intended date of
retrenchment; (2) payment of separation pay
equivalent to at least one month pay or at least
one month pay for every year of service,
whichever is higher; (3) good faith in abolishing
the redundant positions; and (4) fair and
reasonable criteria in ascertaining what
positions are to be declared redundant and
accordingly abolished. (Citations omitted)
To establish GOOD FAITH the company must
provide SUBSTANTIAL PROOF that the
services of the employees are in excess of what
is required of the company, and that FAIR AND
REASONABLE CRITERIA WERE USED to
determine the redundant positions.
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Do you know that the decrease in the grant of
bonuses (midyear and year-end) does not
constitute a diminution of the employees'
salaries?
This is because bonuses are not part of labor
standards in the same class as salaries, cost of
living allowances, holiday pay, and leave
benefits, which are provided by the Labor Code
said the Supreme Court in Traders Royal Bank v.
NLRC.
Ban on direct-hiring
2010 Bar
Direct-hiring is prohibited. Thus, it is provided
that no employer may hire a Filipino worker for
overseas employment except through the
POEA and entities authorized by the Secretary
of Labor (Article 18, Labor Code). The reason for
the ban is that ―a Filipino worker hired directly
by a foreign employer without government
intervention, may not be assured of the best
possible terms and conditions of employment.
He is not in a position to know the real financial
condition of the foreign employer and the
prevailing terms and conditions of employment
in the host country. On the other hand, the
Philippine government, through its various
listening posts abroad (embassies, consular
offices, etc.) has up-to-date and more or less
accurate information on the conditions
prevailing in foreign countries. As the Filipino
worker may be over-eager to find employment
abroad, government intervention is necessary
to protect him from exploitation by foreign
employers.‖ (Annotation Illegal Recruitment of
Overseas Filipino Workers as Economic
Sabotage, 279 SCRA 199 [1997], by Jorge R.
Coquia) However, exempted from this provision
is the direct-hiring made by members of the
diplomatic corps, international organizations
and such other employers as may be allowed by
the Secretary of Labor.
Wage rate of persons with disability
A qualified disabled employee shall be subject to the
same terms and conditions of employment and the
same compensation, privileges, benefits, fringe
 S C B A R S T A G N O T E S [ 2019 ]
LABOR LAW
benefits, incentives or allowances as a qualified able-
bodied person. This means that persons with disability
are entitled to 100% of the applicable minimum wage.
However, if they are employed as apprentices or
learners their wage rate shall be not less that 75% of
the applicable minimum wage. But if they are
employed as learners in piece or incentive-rate jobs
they are entitled to be paid in full or 100% of the
minimum wage.
Persons with disability as apprentices or
learners
2012, 2011 and 2006 Bar
Subject to the provision of the Labor Code as
amended, disabled persons shall be eligible as
apprentices or learners; Provided, That their
handicap is not much as to effectively impede
the performance of job operations in the
particular occupation for which they are hired;
Provided, further, That after the lapse of the
period of apprenticeship if found satisfactory in
the job performance, they shall be eligible for
employment. (Section 7, Republic Act No. 7277)
The traditional four-fold test of employer employee
relationship
The four elements of an employment relationship are:
(a) the selection and engagement of the employee;
(b) the payment of wages; (c) the power of dismissal;
and(d) the employer‘s power to control the
employee‘s conduct.
The most crucial and determinative factor of
employment relationship
The significant factor in determining the
relationship of the parties is the presence or
absence of supervisory authority to control the
method and the details of performance of the
service being rendered, and the degree to which
the principal may intervene to exercise such
control. In other words, the test is whether the
employer controls or has reserved the right to
control the employee, not only as to the work
done, but also as to the means and methods by
which the same is accomplished.
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Existence of employer-employee relationship
cannot be expressly repudiated
2005 Bar
It is axiomatic that the existence of an
employer-employee relationship cannot be
negated by expressly repudiating it in the
management contract and providing therein
that the employee is an independent contractor
when the terms of agreement clearly show
otherwise. For, the employment status of a
person is defined and prescribed by law and not
by what the parties say it should be.
The existence of employer-employee
relationship not on the basis of an agreement
the Honorable Supreme Court ruled in this wise:
The existence of an employer-employees
relation is a question of law and being such, it
cannot be made the subject of agreement.
Kind of relationship under a "boundary
system" arrangement
In a number of cases decided by the Supreme
Court, (National Labor Union vs. Dinglasan, 98
Phil. 649, 652 (1996); Magboo vs. Bernardo, 7
SCRA 952, 954 (1963); Lantaco, Sr. vs. Llamas,
108 SCRA 502, 514 [1981]) it was ruled that the
relationship between jeepney
owners/operators on one hand and jeepney
drivers on the other under the boundary system
is that of employer-employee and not of lessor-
lessee. It was explained that in the lease of
chattels, the lessor loses complete control over
the chattel leased although the lessee cannot be
reckless in the use thereof, otherwise he would
be responsible for the damages to the lessor. In
the case of jeepney owners/operators and
jeepney drivers, the former exercise supervision
and control over the latter. The management of
the business is in the owner's hands. The owner
as holder of the certificate of public
convenience must see to it that the driver 21
follows the route prescribed by the franchising
authority and the rules promulgated as regards
its operation. Now, the fact that the drivers do
not receive fixed wages but get only that in
excess of the so-called "boundary" they pay to
 S C B A R S T A G N O T E S [ 2019 ]
LABOR LAW
the owner/operator is not sufficient to withdraw
the relationship between them from that of
employer and employee. The above doctrine
was applied by analogy to the relationships
between bus owner/operator and bus
conductor, (Doce vs. Workmen's Compensation
Commission, 104 Phil. 946, 948 [1958]) auto-
calesa owner/operator and driver, (Citizens'
League of Freeworkers vs. Abbas, 18 SCRA 71, 73
[1966]) and recently between taxi
owners/operators and taxi drivers. (Martinez vs.
NLRC, 272 SCRA 793, 800 [1997])
Working scholars
There is no employer-employee relationship between
students on one hand, and schools, colleges or
universities on the other, where there is written
agreement between them under which the former agree
to work for the latter in exchange for the privilege to
study free of charge, provided the students are given real
opportunities, including such facilities as may be
reasonable and necessary to finish their chosen courses
under such agreement. (Section 14 Rule X Book III,
Omnibus Rules Implementing the Labor Code)
Supervisory Employees are deemed managerial
employees in view of Article 82 Officers or members of a
managerial staff if they perform the following duties and
responsibilities:
(1) The primary duty consists of the performance of work
directly related to management policies of their
employer; (2) Customarily and regularly exercise
discretion and independent judgment; and (3) (i)
Regularly and directly assist a proprietor or a managerial
employee whose primary duty consists of the
management of the establishment in which he is
employed or subdivision thereof; or (ii) execute under
general supervision work along specialized or technical
lines requiring special training, experience, or
knowledge; or (iii) execute, under general supervision,
special assignments and tasks; and (4) Who do not
devote more than 20 percent of their hours worked in a
work week to activities which are not directly and closely
related to the performance of the work described in
paragraphs (1), (2) and (3) above. (Rule I, Section 2(c),
Labor Code Implementing Rules and Regulation, Book
III)
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The following shall be considered as compensable
hours worked:
(a) All time during which an employee is required to be
on duty or to be at the employer's premises or to be at
a prescribed work place; and (b) All time during which
an employee is suffered or permitted to work. (Section
3, Rule I, Labor Code Implementing Rules and
Regulation, Book III)
Sleeping while on duty is compensable if:
The nature of the employee’s work allows
sleeping without interrupting or prejudicing
work or when there is an agreement between
the employee and his employer to that effect.
For example, a truck helper may sleep after
performing his task and while his truck is
traveling on its way to its assignment. But of
course, the same may not be done by the driver.
Working while on call is compensable:
If the employee is required to remain on call in the
employer’s premises or so close thereto that he cannot
use the time effectively and gainfully for his own
purpose.
Rest periods or coffee breaks running from five (5) to
twenty (20) minutes shall be considered as
compensable working time. Thus, the eight-hour work
period does not include the meal break. Nowhere in
the law may it be inferred that employees must take
their meals within the company premises. Employees
are not prohibited from going out of the premises as
long as they return to their posts on time. Private
respondent's act, therefore, of going home to take his
dinner does not constitute abandonment. (Philippine
Air Lines, Inc. vs. National Labor Relations
Commission)
Rule when two holidays fall on the same day
When Araw ng Kagitingan falls on the same day
as Maundy Thursday or Good Friday, a covered
employee is entitled to at least two hundred
percent (200%) of his/her basic wage even if
said day is unworked. Where the employee is
required to work on that day, he/she is entitled
to an additional 100% of the basic wage.
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LABOR LAW
What is the requirement to be entitled to two (2) days
successive holidays?
One must be present on the day immediately
preceding the first holiday; or one is on leave with pay.
Do you know that those paid by result such as
those engaged on a contract or task basis are
entitled to service incentive leave and holiday
pay?
The High Court explained in David v. Macasio,
that as early as 1987 in the case of Cebu Institute
of Technology v. Ople, , the phrase "those who
are engaged on task or contract basis" in the
rule has already been interpreted to mean as
follows:
[the phrase] should however, be related with
"field personnel" applying the rule on ejusdem
generis that general and unlimited terms are
restrained and limited by the particular terms
that they follow xxx In short, the payment of an
employee on task or pakyaw basis alone is
insufficient to exclude one from the coverage of
SIL and holiday pay. They are exempted from
the coverage of Title I (including the holiday and
SIL pay) only if they qualify as "field personnel."
The IRR therefore validly qualifies and limits the
general exclusion of "workers paid by results"
found in Article 82 from the coverage of holiday
and SIL pay. This is the only reasonable
interpretation since the determination of
excluded workers who are paid by results from
the coverage of Title I is "determined by the
Secretary of Labor in appropriate regulations."
Do you know that there are two categories of
employees paid by results?
The said categories were explained by the
Supreme Court in Lambo v. NLRC, there are two
categories of employees paid by results: (1)
those whose time and performance are
supervised by the employer. (Here, there is an
element of control and supervision over the
manner as to how the work is to be performed.
A piece-rate worker belongs to this category
especially if he performs his work in the
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BRAVO BASTE!
company premises.); and (2) those whose time
and performance are unsupervised. (Here, the
employers control is over the result of the work.
Workers on pakyao and takay basis belong to
this group.) Both classes of workers are paid per
unit accomplished. Piece-rate payment is
generally practiced in garment factories where
work is done in the company premises, while
payment on pakyao and takay basis is
commonly observed in the agricultural industry,
such as in sugar plantations where the work is
performed in bulk or in volumes difficult to
quantify.
Can the right to claim overtime pay be
waived? What is the exception?
No. The right to claim overtime pay is governed
by law and not merely by the agreement of the
parties. (Manila Terminal v. CIR)
It may be waive if the waiver is done in exchange
for certain valuable privileges which
compensate for such work, the waiver may be
valid. If there is a stipulation regarding built-in
overtime pay, duly approved by DOLE, then the
non-payment of overtime is valid. (Bisig
Manggagawa sa Tryco v. NLRC,)
Is a union prohibited from offering and agreeing to
reduce wages and benefits of the employees?
The Labor Code prohibits elimination or diminution of
benefits already being enjoyed at the time of its
promulgation. It does not prohibit a union from
offering and agreeing to reduce wages and benefits of
the employees during CBA negotiations. (Insular Hotel
Employees Union v. Waterfront). The term “benefits”
mentioned in the nondiminution rule refers to
monetary benefits or privileges given to the employee
with monetary equivalents. This removed the chairs
provided to the employees from the purview of Article
100 of the Labor Code. (Royal Plant Workers Union vs.
Coca-Cola Bottlers Philippines).
What is a wage distortion? What are the
elements of a wage distortion?
A wage distortion is a situation where an
increase in the prescribed wage rates results in
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LABOR LAW
the elimination or severe contraction of
intentional quantitative differences in wage or
salary rates between and among employee
groups in an establishment as to effectively
obliterate the distinctions embodied in such
wage structure based on skills, length of service,
or other logical bases of differentiation. (Labor
Code, Art. 124)
The elements are: 1. An existing hierarchy of
positions with corresponding salary rates; 2. A
significant change in the salary rate of a lower
pay class without a concomitant increase in the
salary rate of a higher one; 3. The elimination of
the distinction between the two levels; and 4.
The existence of the distortion in the same
region of the country. (Bankard Employees
Union-Workers Alliance v. NLRC).
How would one correct a wage distortion?
The following are valid ways for correcting a
wage distortion: 1. By voluntary arbitration
after prior referral to grievance machinery.
(Labor Code, art. 124). 2. By compulsory
arbitration after prior referral to NCMB
conciliation. (Labor Code, art. 124); or 3. By
provisions in the CBA, which reestablishes the
wage gap, or a unilateral grant by the employer
which also restores said gap are valid wage
distortion schemes. (National Federation of
Labor v. NLRC)
Who are covered by the Service Incentive Leave
(SIL)?
Every employee who has rendered at least 1 year of
service shall be entitled to a yearly SIL of 5 days with
pay. EXCEPT: 1. Government employees, whether
employed by the National Government or any of its
political subdivisions, including those employed in
GOCCs with original charters or created under special
laws; 2. House helpers and persons in the personal
service of another 3. Managerial employees, if they
meet all of conditions provided for 4. Officers or
members of a managerial staff if they perform duties
and responsibilities enumerated 5. Field personnel and
those whose time and performance is unsupervised by
the employer; 6. Those already enjoying this benefit; 7.
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Those enjoying vacation leave with pay of at least five
(5) days; and 8. Those employed in establishments
regularly employing less than ten (10) employees.
(Labor Code, Art. 95; Section 2, Rule V, Book III of the
Omnibus Rules)
What is a solo parent's leave and how can it be
availed?
A parental leave of not more than 7 working days every
year shall be granted to any solo parent employee who
has rendered service of at least 1 year.
Conditions for Entitlement:
1. Has rendered at least 1 year of service, whether
continuous or broken;
2. Has notified the employer within a reasonable
period;
3. Has presented a Solo Parent ID to the employer
which may be obtained from the DSWD office of the
city or municipality where the employee resides (R.A.
No. 8972)
What are special leave benefits under the Magna
Carta for Women?
Gynecological Leave benefits of two (2) months with
full pay based on gross monthly compensation, for
women employees who undergo surgery caused by
gynecological disorders, provided that they have
rendered continuous aggregate employment service
of at least six (6) months for the last twelve (12)
months. The certification of a competent physician as
required period for recuperation shall be controlling.
Conditions for Entitlement:
1. A woman employee must have rendered continuous
aggregate employment service of at least six (6)
months for the twelve (12) months immediately prior
to the surgery;
2. She has filed an application for special leave with her
employer within a reasonable period of time from the
expected date of surgery or within such period as may
be provided by company rules and regulations or
collective bargaining agreement; and
3. She has undergone surgery due to gynecological
disorders as certified by a competent physician.
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What are the leave benefits for Women Workers
under the VAWC Law?
Under R.A. 9710 or the Magna Carta for Women,
Women who qualify under R.A. No. 9710 are entitled to
a special leave benefit of two (2) months with full pay
based on her gross monthly compensation following
surgery caused by gynecological disorders. Under R.A.
9262 or the Anti-Violence Against Women and their
Children Act of 2004, victims of violence may apply for
the issuance of a protection order. If such victim is an
employee, she is entitled to a paid leave of up to 10
days in addition to other paid leaves under the Labor
Code, other laws and company policies.
Conditions to entitlement:
1. The employee has to submit a certification from the
Punong Barangay or Kagawad or prosecutor or Clerk of
Court that an action under RA 9262 has been filed and
is pending;
2. The use of the 10-day leave is at the option of the
employee;
3. It shall be used for the days that she need to attend
to medical and legal concerns;
4. Leaves not availed of are non-cumulative and not
convertible to cash.
The VAWC leave may be extended beyond 10 days. It
is extendible when the necessity arises as specified in
the protection order. (R.A. No. 9262, Sec. 43)
Permissible Job Contracting vs Labor-only
Contracting
In Alilin et. Al v. Petron Corporation, the Higher
Court explained the following:
Permissible job contracting or subcontracting
refers to an arrangement whereby a principal
agrees to farm out with a contractor or
subcontractor the performance of a specific job,
work, or service within a definite or
predetermined period, regardless of whether
such job, work or, service is to be performed or
completed within or outside the premises of the
principal.
Under this arrangement, the following conditions
must be met:
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(a) the contractor carries on a distinct and
independent business and undertakes the
contract work on his account under his own
responsibility according to his own manner and
method, free from the control and direction of
his employer or principal in all matters
connected with the performance of his work
except as to the results thereof;
(b) the contractor has substantial capital or
investment; and
(c) the agreement between the principal and
contractor or subcontractor assures the
contractual employees’ entitlement to all labor
and occupational safety and health standards,
free exercise of the right to self-organization,
security of tenure, and social welfare benefits."
Labor-only contracting, on the other hand, is a
prohibited act, defined as "supplying workers to
an employer who does not have substantial
capital or investment in the form of tools,
equipment, machineries, work premises,
among others, and the workers recruited and
placed by such person are performing activities
which are directly related to the principal
business of such employer."
In distinguishing between prohibited labor-only
contracting and permissible job contracting, the
totality of the facts and the surrounding
circumstances of the case shall be
considered."46 Generally, the contractor is
presumed to be a labor-only contractor, unless
such contractor overcomes the burden of
proving that it has the substantial capital,
investment, tools and the like. However, where
the principal is the one claiming that the
contractor is a legitimate contractor, as in the
present case, said principal has the burden of
proving that supposed status.47 It is thus
incumbent upon Petron, and not upon
petitioners as Petron insists,48 to prove that
RDG is an independent contractor.
Do you know that the effect of prohibition
under Section 6(f) of D.O. 174-17 declaring as
contrary to law or public policy the act of
requiring the contractor's/subcontractor's
employees to perform functions which are
currently being performed by the regular
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LABOR LAW
employees of the principal is to prohibit the
outsourcing of jobs, works or services that are
the core activities of the principal?
This provision is contrary to the established
doctrinal rule in Alviado v. Procter & Gamble
Phils,, where the High Court ruled: Indeed, it is
management prerogative to farm out any of its
activities, regardless of whether such activity is
peripheral or core in nature. However, in order
for such outsourcing to be valid, it must be
made to an independent contractor because the
current labor rules expressly prohibit labor-only
contracting.
Change in the work schedule as valid exercise
of management prerogative
In Sime Darby Pilipinas, Inc. v. NLRC, G. R. No.
11905, April 15, 1998, the Supreme Court
sustained the change in the work schedule and
the elimination of the 30-minute paid lunch
break of the factory workers as valid exercise of
management prerogative as follows: The right
to fix the work schedules of the employees rests
principally on their employer. In the instant case
petitioner, as the employer, cites as reason for
the adjustment the efficient conduct of its
business operations and its improved
production. It rationalizes that while the old
work schedule included a 30-minute paid lunch
break, the employees could be called upon to do
jobs during that period as they were ―on call.‖
Even if denominated as lunch break, this period
could very well be considered as working time
because the factory employees were required
to work if necessary and were paid accordingly
for working. With the new work schedule, the
employees are now given a one-hour lunch
break without any interruption from their
employer. For a full one-hour undisturbed lunch
break, the employees can freely and effectively
use this hour not only for eating but also for
their rest and comfort which are conducive to
more efficiency and better performance in their
work. Since the employees are no longer
required to work during this one-hour lunch
break, there is no more need for them to be
compensated for this period. We agree with the
Labor Arbiter that the new work schedule fully
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complies with the daily work period of eight (8)
hours without violating the Labor Code.
Besides, the new schedule applies to all
employees in the factory similarly situated
whether they are union members or not.
Do you know that there are different kinds of
independent contractors: those engaged in
legitimate job contracting (see D.O. 174-17,
IRR of Articles 106-109) and those,as
recognized by jurisprudence, who have unique
skills and talents that set them apart from
ordinary employees ?
The following are the jurisprudence that
recognized the independent contractor with
unique skills and talents:
1. In Bernarte v. Philippine Basketball
Association, involved a basketball referee. The
High Court ruled that “a referee is an
independent contractor, whose special skills
and independent judgment are required
specifically for such position and cannot
possibly be controlled by the hiring party.”
2. In Semblante v. Court of Appeals, involved a
masiador and a sentenciador. The High Court
ruled that “petitioners performed their
functions as masiador and sentenciador free
from the direction and control of respondents”
and that the masiador and sentenciador “relied
mainly on their ‘expertise that is characteristic
of the cockfight gambling.’” Hence, no
employer-employee relationship existed.
3. In Orozco v. Court of Appeals , Wilhelmina
Orozco was a columnist for the Philippine Daily
Inquirer. The Supreme Court ruled that she was
an independent contractor because of her
“talent, skill, experience, and her unique
viewpoint as a feminist advocate.” In addition,
the Philippine Daily Inquirer did not have the
power of control over Orozco, and she worked
at her own pleasure.
4. Sonza was engaged by ABS-CBN in view of
his “unique skills, talent and celebrity status not
possessed by ordinary employees.”(Sonza v.
ABS-CBN Broadcasting Corporation, G.R. No. )
In the foregoing cases, the workers were found
to be independent contractors because of their
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unique skills and talents and the lack of control
over the means and methods in the
performance of their work.
Who are disabled persons?
Disabled persons are those suffering from restriction
or different abilities, as result of a mental, physical or
sensory impairment, to perform an activity in the
manner or within the range considered normal for a
human being.
LABOR RELATIONS
Workers right to participate in policy and decision-
making processes
Any provision of law to the contrary notwithstanding,
workers shall have the right, subject to such rules and
regulations as the Secretary of Labor and Employment
may promulgate, to participate in policy and decision-
making processes of the establishment where they are
employed insofar as said processes will directly affect
their rights, benefits and welfare. (Article 267 [255],
Labor Code, as amended by Section 22, Republic Act
No. 6715, March 21, 1989) The right of the workers to
participate in policy and decision-making processes
affecting their rights and benefits as may be provided
by law is the principle of co-determination under
Article XIII, Section 3 of the 1987 Constitution.
Do you know that positions with access to
salary and compensation are included from
the bargaining unit?
In SMFI vs. SMC Supervisors and Exempt Union
(G.R. No. 146206, 2011), Confidential
employees are those who (1) assist or act in a
confidential capacity, in regard (2) to persons
who formulate, determine, and effectuate
management policies in the field of labor
relations. They should be excluded from the
bargaining unit, as their access to confidential
information may become the source of undue
advantage. The Payroll Master and employees
with access to salary and compensation data are
not considered confidential employees,
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because their positions do not involve dealing
with confidential labor relations information.
Do you know that the following are prohibited
to form, join and assist labor organizations for
the purpose of collective bargaining?
1. Managerial employees - refers to an
employee who is vested with powers or
prerogatives to lay down and execute
management policies or to hire, transfer,
suspend, layoff, recall, discharge, assign or
discipline employees. (Art. 255 LABOR CODE)
2. Confidential employees - Confidential
employees are those who (1) assist or act in a
confidential capacity, (2) to persons who
formulate, determine, and effectuate
management policies in the field of labor
relations. The prohibition is based on the
DOCTRINE OF NECESSARY IMPLICATION
wherein the reason behind disqualifying
managerial employees to form unions can be
similarly applied to confidential employees
(NATU v. Torres, G.R. No. 93468, 1994)
3. Member-Owner of Cooperatives - An owner
cannot bargain with himself or his co-owners.
Employees who are neither members nor co-
owners of the cooperative are entitled to
exercise the rights to self-organization,
collective bargaining and negotiation (Benguet
v. Ferrer-Calleja, G.R. No. 79025, 1989)
4. Employees of International Organizations
which have been granted diplomatic immunity
cannot unionize EXCEPT if the international
organizations expressly waived their immunity
(ICMC v. Calleja, G.R. No. 85750, 1990)
Grounds for cancellation of union registration
(a) Misrepresentation, false statement or fraud in
connection with the adoption or ratification of the
constitution and by-laws or amendments thereto, the
minutes of ratification, and the list of members who
took part in the ratification;
(b) Misrepresentation, false statements or fraud in
connection with the election of officers, minutes of the
election of officers, and the list of voters;
(c) Voluntary dissolution by the members.
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Do you know that a supervisors can join a
labor organization?
Supervisors are allowed to join labor
organization. HOWEVER, Supervisory
employees shall not be eligible for membership
in the collective bargaining unit of the rank-and-
file employees but may join, assist or form
separate collective bargaining units and/or
legitimate labor organizations of their own
(Labor Code, Art. 255)
Substitutionary doctrine
A new collective bargaining agency cannot repudiate
an existing collective bargaining agreement, because
the existing collective bargaining agreement must be
honored by a new exclusive bargaining representative
because of the policy of stability in labor relations
between an employer and the workers.
Factors to consider in determining appropriate
bargaining unit
1. The will of the employees (Globe Doctrine)
2. Affinity and unity of the employees’ interest, such as
substantial similarity of work and duties, or similarity
of compensation and working conditions (Substantial
Mutual Interests Rule)
3. Prior collective bargaining history; and
4. Similarity of employment status. (International
School Alliance of Educators v. Quisumbing, G.R. No.
128845, 2000)
Certification Election
Process of determining through secret ballot, the sole
and exclusive bargaining agent of the employees in an
appropriate bargaining unit, for purposes of collective
bargaining (Sec. 1 (x), Rule I, Book V, Rules &
Regulations Implementing the Labor Code)
Run-off Election
Election between the labor unions receiving the 2
highest number of votes in a certification or consent
election with 3 or more choices, where such a certified
or consent results in none of the 3 or more choices
receiving the majority of the valid votes cast; provided
that the total number of votes for all contending
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unions is at least 50% of the number of votes cast (DO
40-03)
Consent Election
Election voluntarily agreed upon by the parties, with or
without the intervention of the DOLE, to determine
the issue of majority representation of all the workers
in the appropriate bargaining unit (Rule I, D.O. No. 9,
as amended by D.O. No. 40-03)
SEBA Certification
Process by which a legitimate labor union is recognized
by the employer as the Sole and Exclusive Bargaining
Agent in a bargaining unit upon Request of a
Legitimate Labor Organization. It may be done in an
either an organized or unorganized establishment.
Unlike the repealed voluntary recognition, SEBA
certification is allowed even when there are more than
1 legitimate labor organizations in an unorganized
establishment.
Do you know that mandatory certification
election is mandatory in the following cases?
Article 256 – In organized establishments, a
petition for certification election can be filed,
questioning the majority status of the
incumbent bargaining agent
Article 257 – In unorganized establishments, a
petition for certification election can be filed
and it shall automatically be conducted by the
Med-Arbiter
Article 258 – When requested to bargain
collectively, an employer may file a petition for
certification election • DO 40-I-15 – If the
Regional Director finds the establishment
unorganized with more than one (1) legitimate
organization, he/she shall refer the same to the
election officer for the conduct of certification
election.
Grounds for denying a Petition for Certification
Election
1. Non-registration in the DOLE
2. Non-submission of the Charter Certificate upon
filing of the PCE
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3. Contract Bar/Election Bar - Filing the petition before
or after the freedom period of a duly registered CBA;
provided that the 60-day period based on the original
CBA shall not be affected by any amendment,
extension or renewal of the CBA;
4. Certification Year Bar/ 12-Month Bar - Filing a
petition within one (1) year from the date of recording
of SEBA certification, or within the same period from a
valid certification, consent or run-off election where no
appeal on the results is pending;
5. Where a duly certified union has commenced and
sustained negotiations with the employer within the
one-year period (Negotiation Bar) or where there
exists a bargaining deadlock which has been submitted
to conciliation or arbitration or has become the subject
of a valid notice of strike or lockout where an
incumbent or certified bargaining agent is a party
(Deadlock Bar);
6. In an organized establishment, the failure to submit
the 25% signature requirement to support the filing of
the PCE
7. Non-appearance of the petitioner for 2 consecutive
scheduled conferences before the mediator-arbiter
despite due notice; and
8. Absence of ER-EE relationship between all the
members of the petitioning union and the
establishment where the proposed bargaining unit is
sought to be represented (D.O. No. 40- F-03, 2008)
Do you know that probationary employees
can vote in a certification/consent election?
All employees in the appropriate bargaining
unit, whether probationary or permanent are
entitled to vote. (National Union of Workers In
Hotels, Restaurant and Allied Industries-Manila
Pavilion Hotel Chapter v. Secretary of Labor,
July 31, 2009)
Double Majority Rule
For there to be a valid certification election, majority of
the bargaining unit must have voted AND the winning
union must have garnered majority of the valid votes
cast. (National Union of Workers In Hotels, Restaurant
and Allied Industries-Manila Pavilion Hotel Chapter v.
Secretary of Labor, G.R. No. 181531, 2009)
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Do you know that a certification election held
by a labor union, whose validity was being
contested is valid?
An order to hold a certification election is proper
despite the pendency of the petition for
cancellation of the registration certificate of the
respondent union. The rationale for this is that
at the time the respondent union filed its
petition, it still had the legal personality to
perform such act absent an order directing the
cancellation. (Legends International vs.
Kilusang Mangagawa, G.R. No. 169754, 2011)
Rule on Levy
Article 241, par. (o) of the Labor Code provides that no
special assessment or extraordinary fees may be levied
upon the members of a labor organization unless
authorized by a written resolution of a majority of all
the members at a general membership meeting duly
called for the purpose. The secretary of the
organization shall record the minutes of the meeting
including the list of all members present, the votes
cast, the purpose of the special assessment or fees and
the recipient of such assessment or fees. The record
shall be attested to by the president.
Rule on Collection
Article 241, par (n) of the Labor Code provides that
other than for mandatory activities under the Code, no
special assessments, attorney’s fees, negotiation fees
or any other extraordinary fees may be checked off
from any amount due to an employee without an
individual written authorization duly signed by the
employee. The authorization should specifically state
the amount, purpose and beneficiary of the deduction.
A valid collection presupposes a valid levy.
Collective Bargaining Unit (CBU)
A CBU is a group of employees sharing mutual
interests within a given employer unit, comprised of all
or less than all of the entire body of employees in the
employer unit or any specific occupation or
geographical grouping within such employer unit.
(Rule I, § 1(d), Omnibus Rules)
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Duty to bargain collectively
The performance of a mutual obligation to meet and
convene promptly and expeditiously in good faith for
the purpose of negotiating an agreement with respect
to wages, hours of work, and all other terms and
conditions of employment including proposals for
adjusting any grievance or questions arising under
such agreements if requested by either party but such
duty does not compel any party to agree to a proposal
or to make any concessions. (Labor Code, Art. 263)
Collective Bargaining Agreement or CBA
A CBA is executed upon the request of either the
employer or the exclusive bargaining representative
incorporating into the agreement reached after
negotiations with respect to wages, hours of work, and
all other terms and conditions of employment,
including the mandatory provisions for grievance and
arbitration machineries. (Davao Integrated
Stevedoring Services v. Abarquez, G.R. 102132, 1993).
Hold-over Principle in CBA
Until a new agreement is reached by the parties, both
parties shall keep the status quo and continue to abide
with the provisions of the CBA, even after its
expiration. The automatic renewal shall only apply to
economic provisions of the CBA and does not include
the representation aspect of the CBA. (Picop
Resources Inc., v. Dequilla, G.R. No. 172666, 2011)
Do you know that the following are the acts of
employers that constitute unfair labor
practice?
Rundown of Acts Constituting Unfair Labor
Practice of Employers
1. Interference
2. Yellow dog condition (agreement between an
employer and an employee in which the
employee agrees, as a condition of
employment, not to be a member of a labor
union.) (Labor Code, Art. 260)
3. Contracting out
4. Company unionism
5. Discrimination for or against union
membership
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6. Discrimination because of testimony
7. Violation of duty to bargain
8. Paid negotiation
9. Violation of CBA
Do you know that a profit-sharing scheme
implemented only for managers and
supervisors are not a form of discrimination
against rank and file employees?
The Court in Wise and Co vs. Wise and Co Union
(G.R. No. 87672, 1989), ruled that there could be
no discrimination committed by petitioner as
the situation of the union employees is different
and distinct from the non-union employees.
Discrimination per se is not unlawful.
Statutory requirements for a valid strike
1. Status of the striking union – For a ULP strike or
bargaining deadlock, on lay a duly certified or
recognized bargaining representative may declare
such strike
2. Procedural requirements: a. Notice of strike – file
notice of intent to strike with the NCMB; b. Cooling-
off Period must be observed o ULP 15 days before
intended strike o Bargaining deadlock 30 days
3. Strike vote and filing of the same with the NCMB
4. 7-day strike ban must be observed
5. Cause – a labor or industrial dispute (Labor Code,
Art. 279)
Compliance with all the legal requirements, as stated
by National Federation of Sugar Workers vs. Ovajera)
G.R. L-59743, 1982), are meant to be and should be
mandatory. Necessarily, a strike must comply with
the purpose and means test which means that both
the purpose and the means to carry out the strike
must be legal. The purpose must be based solely on
bargaining deadlock (economic) and/or unfair labor
practice (political). The means to carry out the strike
should also be legal where there should be no illegal
acts committed in the course of the strike.
Strike
It comprises not only concerted work stoppages but
also slowdowns, mass leaves, sit downs, attempts to
damage, destroy or sabotage plant equipment. The
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fact that the conventional term “strike” isn’t used is of
no moment. (Solidbank v. Gamier, G.R. No. 159460,
2010)
Do you know that act of not showing up for
work considered a form of strike?
The Court held in Toyota vs. NLRC (G.R. 158786,
2007) that the strikes were illegal because they
were in reality temporary stoppages of work
perpetrated through the concerted action of the
employees who deliberately failed to report for
work. Apart from the fact that they defied the
assumption order of the Secretary of DOLE, it
was apparent that the ultimate goal of the union
members was to coerce Toyota to acknowledge
them as the sole bargaining agent of the
company.
Kinds of strike:
1. LEGAL STRIKE – one called for a valid purpose and
conducted through means allowed by law.
2. ILLEGAL STRIKE – one staged for a purpose not
recognized by law, or if for a valid purpose, conducted
through means not sanctioned by law
3. ECONOMIC STRIKE – one staged by workers to
force wage or other economic concessions from the
employer which he is not required by law to grant
(Consolidated Labor Association of the Phil. vs.
Marsman and Company, 11 SCRA 589)
4. ULP STRIKE – one called to protest against the
employer’s acts of unfair labor practice enumerated in
the Labor Code
5. SLOWDOWN STRIKE – one staged without the
workers quitting their work but merely slackening or
by reducing their normal work output
6. WILD-CAT STRIKE – one declared and staged
without filing the required notice of strike and without
the majority approval of the recognized bargaining
agent.
7. SIT DOWN STRIKE – one where the workers stop
working but do not leave their place
Do you know that wage distortion cannot be
raised in a notice of strike?
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A strike is illegal if based on alleged salary
distortion. It is specifically provided in the law
that “any issue involving wage distortion shall
not be a ground for a strike/lockout.” Wage
distortions should be sought by voluntary
negotiation or arbitration. (IBM v. NLRC, G.R.
No. 91980, 1991)
Picketing
This involves the presence of striking workers or
their union brothers who pace back and forth
before the place of business of an employer
considered “unfair to organized labor.” The
purpose of such act is to peacefully persuade other
workers not to work in the establishment, and
customers not to do business there. (Azucena)
Do you know that picketing is legal if non-
employees of the strike-bound employer
participate in the activity?
Peaceful picketing may be legally carried out
even in the absence of employer-employee
relationship for it is guaranteed under the
freedom of speech and of the press under the
Constitution. (PAFLU v. Coribel, G.R. No. L-
25878, 1969)
Do you know that even if the picketing is
peaceful and moving, it can still be declared as
an illegal strike?
Despite the validity of the purpose of a strike and
compliance with the procedural requirements, a
strike may still be held illegal where the means
employed are illegal. Protected picketing does
not extend to blocking ingress to and egress from
the company premises. That the picket was
moving, was peaceful and was not attended by
actual violence may not free it from taints of
illegality if the picket effectively blocked entry to
and exit from the company premises. (Phinco
Industries, Inc. vs. PILA, 628 SCRA 119, 2010)
Requisites for a lawful lockout:
1. Notice of intention to declare a lock-out has been
filed with the DOLE;
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2. At least thirty days has elapsed since the filing of the
notice before lock-out is declared;
3. An impasse has resulted in the negotiations; and
4. The lock-out is not discriminatory (San Pablo Oil
Factory v. CIR, G.R. 147749, 2006).
Nature of an Assumption Order
The power to issue assumption or certification orders
is an extraordinary authority granted to the President
and to his alter ego, the DOLE Secretary, the exercise
of which is strictly limited to national interest cases.
(Tabangao Shell Refinery Employees Association v.
Pilipinas Shell Petroleum Corp., G.R. No. 170007, 2014)
Do you know that for a valid exercise of the
assumption of jurisdiction under Article 278
(g) of the Labor Code, any of the following
conditions must be present?
a. Both parties have requested the Secretary of
Labor and Employment to assume jurisdiction
over the labor dispute; or
b. After a conference called by the Office of the
Secretary of Labor and Employment on the
propriety of the issuance of the Assumption or
Certification Order, motu proprio or upon a
request or petition by either party to the labor
dispute. In the said conference, the parties shall
also be encouraged to amicably settle the
dispute. (See Section 2, Operational Guidelines
of Department Order No. 40-G-03, Series of
2010, dated February 24, 2011)
Legal effects of an assumption of jurisdiction order
a. Automatically enjoins the intended or impending
strike or lock-out;
b. and If one has already taken place, all striking or
locked-out employees shall immediately return to
work and the employer shall immediately resume
operations and readmit all workers under the same
terms and conditions prevailing before the strike or
lock-out. (Labor Code, Art. 278)
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Do you know that there is no need to issue a
return-to-work order after the issuance of an
assumption of jurisdiction order?
The moment the Secretary of Labor assumes
jurisdiction over a labor dispute in an industry
indispensable to national interest, such
assumption shall have the effect of
automatically enjoining the intended or
impending strike. It was not even necessary for
the Secretary of Labor to issue another order
directing them to return to work. (Telefunken
Semiconductors Union v. CA, G.R. 143013-14,
2000).G.R. No. 174340
Requirements of a Valid Assumption Order or
Certification Order
1. There exist a labor dispute causing or likely to cause
a strike or lockout; and
2. That the labor dispute is in an industry indispensable
to the national interest. (Labor Code, Art. 278[g])
Industries Indispensable to the National Interest
1. Hospital Sector
2. Electric Power Industry
3. Water Supply Services, to exclude small water supply
such as bottling and refilling stations
4. Air traffic control
5. Such other industries as maybe recommended by the
National Tripartite Peace Council (TIPC) (DO No.40-H-
13)
Examples of “National Interest” disputes
1. Nestle Philippines, Inc. is engaged in an undertaking
affected with public interest being one of the largest
manufacturers of food products. (Union of Filipro v.
NLRC,G.R. No. 91025, 1990 )
2. Academic institutions (Philippine School of Business
Administration v. Noriel, G.R. No. 80648, 1988)
3. A company supplying the sulfate requirements of
MWSS
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4. Banking is expressly classified by the General
Banking Law as an industry indispensable to the
national interest.
5. However, the Court ruled that the production of
telephone directories is not an industry affecting the
national interest. (GTE Directories Corp v. Sanchez,
G.R. No. 76219, 1991)
Do you know that retrenched employees
are not excluded from the coverage of a
return-to-work order?
In YSS Employees Union vs. YSS
Laboratories (G.R. 155125, 2009), the
primary reason why the strike was
conducted in the first place was to protest
the implementation of the retrenchment
program. The determination of who among
the strikers could be admitted back to work
cannot be made to depend upon the
discretion of employer, Accordingly, when
the Secretary of Labor directed YSS
Laboratories to accept all the striking
workers back to work, the Secretary did not
exceed his jurisdiction, or gravely abuse the
same, said the Supreme Court.
Difference between the jurisdiction of the Labor
Arbiter and the regular RTC in relation to damage
claims filed by employees
The Labor Arbiter has jurisdiction over claims for
actual, moral, exemplary, and other forms of damages
arising from employer-employee relations., Art. 217 (a)
(4) Labor Code) Hence, a claim for liquidated damages
for breach of contractual obligation which is
intrinsically a civil dispute (Singapore Airlines Ltd. Vs.
Pano, G.R. No. L-47739, 1983) and a cause of action
based on quasi-delict or tort which has no reasonable
connection with any of the claims enumerated in Art.
217 of the Labor Code are beyond the jurisdiction of
the Labor Arbiter and within the jurisdiction of the
regular courts. (Ocheda v. CAG.R. 85517, 1992)
Where do you go from a decision, award, or order of
the Labor Arbiter?
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You appeal to the NLRC within 10 CALENDAR days
from the receipt of the decision on the grounds of grave
abuse of discretion, fraud and coercion, on pure
questions of law and/or serious, erroneous factual
findings causing grave or irreparable damage. (NLRC
RULE, Rule VI, Sec. 1-2).
Jurisdiction (Commission En Banc) of NLRC
The Commission shall sit En Banc only for purposes of
promulgating rules and regulations governing the
hearing and disposition of cases before its Divisions and
Regional Arbitration Branches, and for the formulation
of policies affecting its administration and operations.
It may, on temporary or emergency basis, allow cases
within the jurisdiction of any Division to be heard by any
other Division whose docket allows the additional
workload and such transfer will not expose litigants to
unnecessary additional expense. (Rule VII, Section 2
[b], 2011 NLRC Rules of Procedure, As Amended in
relation to Article 220 of the Labor Code)
Jurisdiction of labor arbiters under Section 10
of R.A. No. 8042 even in the absence of
employer-employee relationship
In Santiago v. CF Sharp Crew Management ,
Inc., G. R. No. 162419, July 10, 2007, the issue
to be resolved is whether the seafarer, who was
prevented from leaving the port of Manila and
refused deployment without valid reason but
whose POEA-approved employment contract
provides that the employer-employee
relationship shall commence only upon the
seafarer‘s actual departure from the port in the
point of hire, is entitled to relief? The High
Court ratiocinated‖ Despite the absence of an
employer-employee relationship between
petitioner and respondent, the Court rules that
the NLRC has jurisdiction over petitioner‘s
complaint. The jurisdiction of labor arbiters is
not limited to claims arising from employer-
employee relationships. Section 10 of R.A. No.
8042 (Migrant Workers Act). This ruling was
reiterated in Bright Maritime Corp. v.
Fantonial, G.R. No. 165935, February 8, 2012.
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Who may join employees’ organizations in the public
sector?
Employees in agencies of the national government and
their regional offices, attached agencies and their
regional offices, state universities and colleges,
government-owned or controlled corporations with
original charters, and local government units, except as
may be hereinafter provided, can form, join or assist
employees‘ organizations, labor-management
committees, work councils and other forms of
employees‘ participation schemes of their own
choosing for the purposes above-stated.
A: The President shall communicate his veto of any bill
to the House where it originated within thirty days
after the date of the receipt thereof; otherwise, it shall
become law as if he had signed it (Sec27(1), ArtVI, 1987
Constitution)
Those not eligible to join employees’ organizations
in the public sector
The following shall not be eligible to form, join or assist
any employees‘ organization for purposes of collective
negotiations:
(a) High level, highly confidential and coterminous
employees;
(b) Members of the Armed Forces of the Philippines;
(c) Members of the Philippine National Police;
(d) Firemen;
(e) Jail guards; and,
(f) Other personnel who, by the nature of their
functions, are authorized to carry firearms, except
when there is express written approval from
management.
Effect of inclusion as members of employees outside
the bargaining unit
The inclusion as union members of employees outside
the bargaining unit shall not be a ground for the
cancellation of the registration of the union. Said
employees are automatically deemed removed from
the list of membership of said union.
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Civil aspects of unfair labor practices and its
jurisdiction
Subject to the exercise by the President or by
the Secretary of Labor and Employment of the
powers vested in them by Articles 263 and 264
of this Code, the civil aspects of all cases
involving unfair labor practices, which may
include claims for actual, moral, exemplary and
other forms of damages, attorney‘s fees and
other affirmative relief, shall be under the
jurisdiction of the Labor Arbiters. The Labor
Arbiters shall give utmost priority to the hearing
and resolution of all cases involving unfair labor
practices. They shall resolve such cases within
thirty (30) calendar days from the time they are
submitted for decision.
Runaway Shop
A runaway shop is defined as an industrial plant moved
by its owners from one location to another to escape
union labor regulations or state laws, but the term is
also used to describe a plant removed to a new location
in order to discriminate against employees at the old
plant because of their union activities. It is one wherein
the employer moves its business to another location or
it temporarily closes its business for anti-union
purposes. A runaway shop in this sense, is a relocation
motivated by anti-union animus rather than for
business reasons.
Employees exempt from the coverage of
union shop clause
2005 and 1996 Bar
The following are the employees exempt from
the coverage of union shop clause:
All employees in the bargaining unit covered
by a Union Shop Clause in their CBA with
management are subject to its terms.
However, under the law and jurisprudence, the
following kinds of employees are exempted
from its coverage, namely:
1. Employees who at the time the union shop
agreement takes effect are bona fide members
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of a religious organization which prohibits its
members from joining labor unions on religious
grounds;
2. Employees already in the service and already
members of a union other than the majority at
the time the union shop agreement took
effect;
3. Confidential employees who are excluded
from the rank and file bargaining unit; and
4. Employees excluded from the union shop by
express terms of the agreement.
Status quo of CBA (Automatic Renewal
Clause/Evergreen Clause/Hold-over)
2009, 2008, 2001 and 1999 Bar
It shall be the duty of both parties to keep the status
quo and to continue in full force and effect the terms
and conditions of the existing agreement during the
60-day period and/or until a new agreement is reached
by the parties. (Article 264 [253], Labor Code). The
period of status quo and effectivity of the existing CBA
is during the freedom period (60-day period) and/or
until a new agreement is reached by the parties.
Requirements to appeal the LA’s decision
Appeal from the decision of the Labor Arbiter is
brought by ordinary appeal to the NLRC within 10
calendar days from receipt of the decision. (Vir-jen
Shipping and Marine Services v. NLRC, G.R. No. 58011-
12, 1982)
The 10-day period is reckoned from receipt by counsel
of the final decision, order or award. This applies to
both appeals from the LA to NLRC and NLRC to CA.
(Sy. v. Fairland Knitcraft, G.R. No. 182915, 2011)
This 10-day period is both mandatory and jurisdictional
in nature. (Charter Chemical & Coating Corp v. Tan,
G.R. No. 163891, 2009)
NOTE: There is no appeal from the decision of the
NLRC. The only way to elevate the case to the CA is by
way of special civil action of certiorari under Rule 65,
Rules of Court.
From the ruling of the Court of the Appeals, it may be
elevated to the SC by petition for review on certiorari
under Rule 45 of the Rules of Civil Procedure. (St.
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Martin Funeral Home v. NLRC, et al., G.R. No. 130866,
1998)
What is the effect of self-executing order of
reinstatement on back wages?
The law intends the award of backwages and similar
benefits to accumulate past the date of the Labor
Arbiter’s decision until the dismissed employee is
actually reinstated. (Siemens Philippines v. Domingo,
G.R. No. 150488, 2008)
However, if reinstatement is no longer possible,
backwages shall be computed from the time of illegal
dismissal until the date the decision becomes final.
(Javellana v. Belen, G.R. No. 181913 and 182158, 2010)
Note: If there was implementation of reinstatement
pending appeal, either through actual or payroll
reinstatement, and the employee received his/her
salary for the period of such reinstatement, the said
amount received shall be deducted from the total
amount of backwages due the employee, assuming
the final decision of the case awarded backwages to
the employee.
An employee who was dismissed on the ground of
AWOL due to incarceration, is entitled to
reinstatement and under the principle of “no work, no
pay”, his full backwages shall only commence from the
time he is refused work after acquittal. (Standard
Electric v. Standard Electric employees Union, G.R. No.
166111, 2005)
How is the Employer’s Liability Determined after the
finality of the case?
After finality of the case, the records will have to be
remanded to the Labor Arbiter to determine the actual
liability of the employer to each and every employee.
Both parties will have a chance to submit further proof
and argument in support of their respective proposed
computations.
For the guidance of the labor arbiter, as well as the
parties, this court lays down the following yardsticks in
the computation of the final amount of liability:
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1. Employees who have been re – employed without
loss of seniority rights shall be paid backwages but only
up to actual reinstatement;
2. Employees who have been re – employed as new
hires shall be restored their seniority and other
preferential rights. However, their backwages shall be
computed only to date of actual re- hiring;
3. Employees who shall have reached compulsory age
of retirement shall receive backwages up to their
retirement only. The same is true as regards the heirs
of those who have passed away;
4. Employees who have not been reemployed plus
those who have executed quitclaims and received
separation pay of financial assistance shall be
reinstated without loss of seniority rights and paid full
backwages, after deduction of whatever amounts
already received; and
5. Employees who had obtained substantially
equivalent or even more lucrative employment
elsewhere in 1998 or thereafter are deemed to have
severed their employment with their previous
employer, and shall be entitled to full backwages from
the date of their retrenchment only up to the date they
found gainful employment elsewhere. (FASAP v. PAL,
G.R. No. 172013, 2009)
Rules on reinstatement pending appeal
If reinstatement is ordered in an illegal dismissal
case, it is immediately executory even pending
appeal. This means that the perfection of an
appeal shall stay the execution of the decision
of the Labor Arbiter except execution of the
reinstatement pending appeal.
Self-executing with no need for a writ of
execution – only applicable to order issued by
Labor Arbiter.
Writ of execution required when reinstatement
is ordered by NLRC on appeal, or subsequently
by the court of appeals or Supreme Court, as the
case may be.
Either admitted back to work under the same
terms and conditions prevailing prior to his
dismissal or separation or merely reinstated in
the payroll (at the option of the employer, i.e.
confidential employee, but the choice must be
communicated to the employee by the
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employer) Posting of a bond shall not stay the
execution of reinstatement.
The unjustified refusal of the employer to
reinstate an illegally dismissed employee
entitles the employee to payment of his
salaries.
What are the only instances when a petition for
certiorari under Rule 65 be brought to the Court of
Appeals?
If the labor case was decided by:
1. The DOLE Secretary, in his appellate jurisdiction;
2. The Commission (NLRC); and
3. The Director of the Bureau of Labor Relations (BLR)
in cases decided by him in his appellate jurisdiction (as
distinguished from those he decides in his original
jurisdiction which are appealable to the DOLE
Secretary).
The remedy of ordinary appeal to the Court of Appeals
is not available from their decisions, orders or awards.
The reason for this rule is that their decisions, orders or
awards are final and executory and therefore
unappealable. (Chan Robles, Labor Code)
May the amount of an appeal bond be reduced
despite it being fixed by law?
While it has been settled that the posting of a
cash or surety bond is indispensable to the
perfection of an appeal in cases involving
monetary awards from the decision of the LA,
the Rules of Procedure of the NLRC nonetheless
allows the reduction of the bond upon a
showing of (a) the existence of a meritorious
ground for reduction, and (b) the posting of a
bond in a reasonable amount in relation to the
monetary award. (Philippine Touristers, Inc.
and/or Alejandro R. Yague, Jr. v. Mas Transit
Workers Union-Anglo-Kmu and its members,
G.R. No. 201237, 2014)
Is the simultaneous filing of motion to reduce bond
and posting of the reduced amount substantial
compliance with Article 223 of the Labor Code?
While the bond requirement on appeals involving a
monetary award has been relaxed in certain cases, this
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LABOR LAW
can only be done where there was substantial
compliance with the rules or where the appellants, at
the very least, exhibited willingness to pay by posting
a partial bond. (Magdala Multipurpose v. KMLMS, G.R.
191138- 39, 2011).
May the Labor Arbiter, NLRC or Court of
Appeals validly award attorney’s fees in favor
of a complainant even if not claimed or proven
in the proceedings?
Yes. The provision on attorney’s fees in Article
111 envisions a situation where there is a judicial
or administrative proceeding for recovery of
wages. Upon the termination of the
proceedings, the law allows a deduction for
attorney’s fees of 10% from the total amount
due to the winning party. (Vengco v. Trajano,
G.R. 74453, 1989).
Hence, even if there is no claim and proof,
attorney’s fees not more than 10% of the
amount entitled may be awarded. The court has
also a liberty of decreasing it if the questions
involved in the litigation are neither novel nor
difficult. (D.M. Consunji v. NLRC, G.R. No.
71459, 1986).
What labor cases are covered by preventive
mediation?
Labor disputes which are the subject of a formal or
informal request for conciliation and mediation
assistance sought by either or both parties or upon the
initiative of the NCMB (NCMB Manual of Procedures,
section 1(24).
Who may request for preventive mediation?
Only a certified or duly recognized bargaining agent
may file a notice or request for preventive mediation.
In the case of (Insular Hotel Employees Union NFL v.
Waterfront Insular Hotel Davor, G.R. No. 174040-41),
the Court ruled that the NCMB has no jurisdiction to
entertain any notice filed by the federation in behalf of
individual union members of its local.
Requisites for Regional Director to Decide Small
Money Claims
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1. Claim is presented by an employee, or a person
employed in domestic or household service, or
employer;
2. The claim arises from an EER;
3. The claimant does not seek reinstatement; and
4. The aggregate money claim of each claimant does
not exceed PhP 5,000
Notes: In the absence of any of the above requisites,
the Labor Arbiter will have jurisdiction over the case,
pursuant to ART. 224.
The claimant need not be an employee at the time the
complaint has been filed; it is enough that the claim
arises from employment
Appeal from the Regional Director’s Decision
The Complainant may appeal to the NLRC within
10 calendar days from a receipt of a copy of the
Regional Director’s decision / resolution.
When is it appropriate to file a money claim before
the DOLE Regional Director?
The DOLE Regional Director has original jurisdiction
over small money claims cases arising from labor
standards violations in the amount not exceeding
P5,000.00 and not accompanied with a claim for
reinstatement under Article 129 of the Labor Code.
Article 129 contemplates the recovery of wages and
other monetary claims and benefits, including legal
interest, owing to an employee or domestic worker or
kasambahay, arising from employer employee
relations provided the claim does not exceed
P5,000.00.
What are the requisites for the valid exercise of
jurisdiction by the DOLE Regional Director?
The following requisites must all concur, to wit:
1. The claim is presented by an employee or domestic
worker or kasambahay;
2. The claimant, no longer being employed, does not
seek reinstatement; and
3. The aggregate money claim of the employee or
domestic worker or kasambahay does not exceed
P5,000.00. (Labor Code, Art. 129)
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May an inferior court issue a TRO against the
enforcement orders of the Secretary in line
with his regulatory and visitorial powers?
“No inferior court or entity shall issue temporary
or permanent injunction or restraining order or
otherwise assume jurisdiction over any case
involving the enforcement orders issued in
accordance with this Article.” (Labor Code, Art.
128)
Under what conditions may the Secretary of Labor
or his duly authorized representative inquire into the
financial activities of legitimate labor organizations?
The Secretary of Labor and Employment or his duly
authorized representative is hereby empowered to
inquire into the financial activities of legitimate labor
organizations upon the filing of a complaint under oath
and duly supported by the written consent of at least
20% of the total membership of the labor organization
concerned and to examine their books of accounts and
other records to determine compliance or
noncompliance with the law and to prosecute any
violations of the law and the union constitution and by-
laws:
Provided, That such inquiry or examination shall not be
conducted during the 60-day freedom period nor
within the 30 days immediately preceding the date of
election of union officials. (Labor Code, Art. 289)
Does the SOLE generally have jurisdiction over
appeals?
In The Heritage Hotel vs. National Union of Workers
(G.R. 178296, 2011), “jurisdiction remained with the
BLR despite the BLR Director's inhibition. When the
DOLE Secretary resolved the appeal, she merely
stepped into the shoes of the BLR Director and
performed a function that the latter could not himself
perform. She did so pursuant to her power of
supervision and control over the BLR.
Does the SOLE have the power to give arbitral
awards in the exercise of his authority to assume
jurisdiction over labor dispute?
The arbitral award given by the Secretary of Labor can
be considered as an approximation of a collective
Page 22 of 23
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bargaining agreement. While the award cannot per se
be categorized as an agreement between the parties
(because of the Secretary's interference), it still has the
force and effect of a valid contract obligation between
the parties, as is stated in (Cirtek Employees vs. Cirtek
Electronics, G.R. 190515, 2011).
Do you know that in the exercise of the powers
of the Secretary in "national interest" cases
the doctrine of "great breadth of discretion"
and "incidental jurisdiction" were used by the
Supreme Court to justify the creation of the
tripartite committee for the purpose of
resolving the contentious issue involving the
computation of the net incremental proceeds
under Republic Act No. 6728, between the
contending parties?
In the case of, UNIVERSITY OF THE
IMMACULATE CONCEPTION v. OFFICE OF
THE SECRETARY OF LABOR AND
EMPLOYMENT, G.R. NOS. 178085 - 178086,
September 14, 2015. The Court citing LMG
Chemicals Corporation v. Secretary of Labor
G.R. No. 127422, April 17, 2001, 356 SCRA 577,
585, said we already settled the extent of the
Secretary’s jurisdiction under Article 263(g): It is
well settled in our jurisprudence that the
authority of the Secretary of Labor to assume
jurisdiction over a labor dispute causing or likely
to cause a strike or lockout in an industry
indispensable to national interest includes and
extends to all questions and controversies
arising therefrom. The power is plenary and
discretionary in nature to enable him to
effectively and efficiently dispose of the primary
dispute.xxx. The authority to create the
tripartite committee flows from the jurisdiction
conferred by Article 263(g) to the Secretary. A
grant of jurisdiction, in the absence of
prohibitive legislation, implies the necessary
and usual incidental powers essential to
effectuate it (Philippine Air Lines Employees’
Association v. Philippine Air Lines, Inc., G.R. No.
L-18559, June 30, 1964, 11 SCRA 387, 393.)— also
referred to as "incidental jurisdiction.".
May the Secretary of Labor and Employment issue
search and arrest warrants when it initiates actions
against alleged illegal recruiters?
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General Rule: 3 years from the time the cause of

No, the Secretary of DOLE, not being a judge, cannot
issue search or arrest warrants. Under Art. III, sec. 2 of
the 1987 Constitution, it is only the judge, and no other,
who may issue warrants of arrest and search. (Salazar
vs. Achacoso, G.R. 81510, 1990)
What power does the SOLE have with regard to
arbitral awards?
action accrued.
Exception: ULP cases prescribe within 1 year
from accrual of such unfair labor practice.
(Labor Code, Arts. 290-291)
May the union president sign the certification and
verification against forum shopping on behalf of a
union?

The SOLE has the power to give arbitral awards in the
exercise of his authority to assume jurisdiction over
labor dispute.
The arbitral award given by the Secretary of Labor can
be considered as an approximation of a collective
bargaining agreement. While the award cannot per se
be categorized as an agreement between the parties
(because of the Secretary's interference), it still has the
force and effect of a valid contract obligation between
the parties, as is stated in (Cirtek Employees vs. Cirtek
Electronics, G.R. No. 190515, 2011).
Yes. The union president is in a position to verify the
truthfulness and correctness of the allegations in the
petition. Other allowable officers include –
1. The Chairperson of the Board of Directors
2. The President of a corporation
3. The GM or acting GM
4. Personnel officer
5. Employment specialist in a labor case (PSTMSDWO
v. PNCC Skyway Corporation, G.R. 171231, 2010)
---NOTHING FOLLOWS---

How do you execute a labor judgment which, on

appeal, had become final and executory?

By filing a motion for execution and serving a writ of

execution to be served by the sheriff or such law
enforcement agency as may be deputized by the DOLE
or NLRC. It may also be issued motu propio by the
Labor Arbiter. (Labor Code, Arts. 223 & 224)

What are the instances when an order of execution

may be appealed?

1. When execution becomes impossible or unjust, it

may be modified or altered on appeal to harmonize the
same with justice and the facts (Torres vs. NLRC, G.R.
No. 107014, 2000).
2. Supervening events may warrant modification in the
execution of judgment, as when reinstatement is no
longer possible because the position was abolished as
a cost-cutting measure due to losses. (Abalos vs. Philex
Mining Corp, G.R. No. 140374, 2002).
3. Where the writ is found defective, exceeds or varies
the award and/or is irregularly issued. (DBP v. Union
Bank, G.R. No. 155838, 2004).

What are the various prescriptive periods for

actions relating to labor disputes?