Labor Law 2

LABL2
University of San Agustin
Atty. Rommel Bellones
Sources:
➢ The Labor Code of the Philippines
➢ The Labor Code with Comments and Case, Volume I, Labor Standards and Welfare, C.A. Azucena, Jr. (2016)
➢ Atty. Rommel Bellones’s lecture and slides (2nd Semester A.Y. 2020-2021 Edition)
➢ Other sources as may be indicated

Introduction to Labor Relations Law

RECALL Key Concepts:

Concept Definition Notes

Welfare/Social Primarily intended for protection and promotion of general - Mother of all Labor-related laws
Legislation Laws welfare of the worker.

Labor Law That branch of law that governs and regulates the -
relationship between employers and employees. It includes
laws enacted to promote employment and those enacted for
the protection and welfare of employees.

Labor Standards Prescribes the minimum requirements for wages, hours of - Basic benefits that an employee may
work, cost of living allowances and other monetary and get. For better benefits, need to
welfare benefits, including occupational safety and health negotiate through Labor Relations.
standards. - The Prescribed Minimum

Labor Relations Regulates the activities of labor organizations and prescribes
the procedures on collective bargaining and the modes and
machineries for the settlement of labor disputes.
- Means for employees to negotiate
“better” terms in labor.
- Atty: It is a basic human characteristic
to “want more,” until it becomes greed.
- To come up with a mutually acceptable
terms and condition of employment
- End goal is Industrial Peace

Constitutional Provisions

❖ Article II, Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers
and promote their welfare.
➢ NOTES: Belief of the State that all products and services made available to the economy are made available by
Labor

❖ Article II, Section 20. The State recognizes the indispensable role of the private sector, encourages private enterprise,
and provides incentives to needed investments.
➢ NOTES: The State cannot create everything. Private capital is important for the economy. It is profit that
motivates businesses.

❖ MEMORIZE: Article XIII, Section 3. The State shall afford full protection to labor. It shall guarantee the rights of all
workers to:
➢ Self-organization
➢ Collective bargaining and negotiations
➢ Peaceful concerted activities including the right to strike in accordance with law
➢ Security of tenure
➢ Humane conditions of work
➢ Living wage
➢ Participate in policy and decision-making process affecting their rights and benefits as may be provided by law
➢ NOTES: Only two belong to Standards: Humane conditions of work & Living Wage; the rest deal with Relations
■ Standard Bar Exam question: Distinguish between Labor Standards and Labor Relations Law

❖ The State shall promote the principle of shared responsibility between workers and employers. The State shall
regulate the relations between workers and employers.
➢ NOTES: Both parties have a stake for the survival of the continued operation of a business.
■ Since this relationship is imbued with public interest, the State has the right to regulate it

Other Key Concepts:

1. Principle of Shared Responsibility
a. Business Operations, per se
i. Purely a management prerogative
1. What products to be produced, who to be employed, etc.
ii. No participation in policy and decision-making to chart corporate programs and policies
iii. No Co-Management
iv. Principle of Shared Responsibility has little significance

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 b. Rights, duties, welfare of employees
i. Level of participation could be in discussion, deliberations or consultation
1. Principle of Shared Responsibility is limited here
a. Cannot dictate the management what you should be doing, but can contribute
how, limited to discussion, deliberation, or consultation

2. Management Prerogative
a. Except as limited by special laws, an employer is free to regulate, according to his own discretion and judgment,
ALL ASPECTS OF EMPLOYMENT, including: hiring, work assignments, working methods, time, place, manner
of work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer of
employees, work supervision, layoff of workers and the discipline, dismissal and recall of workers.

b. Basic Management Prerogatives:

i. Business / Personnel Management - All aspects of employment (hiring, work assignment, working
methods, time, place manner of work)
ii. Discipline - Promulgate disciplinary rules and sanctions
iii. Transfer - Transfer/assign employees where they would be more effective for the success of the
business undertaking
iv. Dismissal - As a measure of self-protection, to dismiss employees subject to the requirements of the
presence of just or authorized cause and after due process

c. Discipline
i. Promulgation of Rules (Concept of Shared Responsibility)
1. Prior consultation and information of disciplinary rules affecting their rights
2. Consultation, not acceptance or approval
3. Rules may be implemented despite employee protest/objection
ii. Validity of Company Rules / Regulations
1. Reasonable and lawful
2. Sufficiently known to the employee
3. In connection with duties of employee
iii. NOTES: This is unilateral--consent by the employee is not needed; only consultation and discussion
1. Atty. Bellones: Can the government require vaccination as a condition for employment? No.
What they can do is to make it as a requirement for a business to operate, under health and
sanitation permit.
iv. LMT Note: Promulgation refers to Procedural Due Process, and Validity refers to Substantial Due
Process

Labor Relations Law: A Bird’s Eye View

NOTES: Status of employment determines eligibility to join a Labor Organization (L.O.)

- The establishment is composed of bargaining units
- If you are qualified, you can join an L.O. Just make sure that the L.O. actually belongs to the bargaining unit to which you
are a part of.

Definition of Terms

Term Definition Key Terms

Labor Organization Any union or association of employees which exists in whole or in part for the - Union/associa
purpose of collective bargaining or of dealing with employers concerning terms and tion by

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 conditions of employment. employees

Legitimate Labor Any labor organization duly registered with the Department of Labor and -
Organization Employment, and includes any branch or local thereof.

Labor Dispute Includes any controversy or matter concerning terms and conditions of employment -
or the association or representation of persons in negotiating, fixing, maintaining,
changing or arranging the terms and conditions of employment, regardless of
whether the disputants stand in the proximate relation of employer or employee.

Managerial The one who is vested with the powers or prerogatives to lay down and execute -
Employee management policies and/or to hire, transfer, suspend, lay-off, recall, discharge,
assign or discipline employees. Supervisory employees are those who, in the interest
of the employer, effectively recommend such managerial actions if the exercise of
such authority is not merely routinary or clerical in nature but requires the use of
independent judgment. All employees not falling within any of the above definitions
are considered rank-and-file employees for purposes of Book V.

Strike Any temporary stoppage of work by the concerted action of employees as a result of -
an industrial or labor dispute.

Lockout Any temporary refusal of an employer to furnish work as a result of an industrial or -

labor dispute.

I. LABOR RELATIONS LAW

A. Coverage of the Right to Self-Organization (252-256)

Title V
COVERAGE
Article 243. Coverage and employees’ right to self-organization. All persons employed in commercial, industrial and agricultural
enterprises and in religious, charitable, medical, or educational institutions, whether operating for profit or not, shall have the right
to self-organization and to form, join, or assist labor organizations of their own choosing for purposes of collective bargaining.
Ambulant, intermittent and itinerant workers, self-employed people, rural workers and those without any definite employers may
form labor organizations for their mutual aid and protection. (As amended by Batas Pambansa Bilang 70, May 1, 1980)
Article 244. Right of employees in the public service. Employees of government corporations established under the Corporation
Code shall have the right to organize and to bargain collectively with their respective employers. All other employees in the civil
service shall have the right to form associations for purposes not contrary to law. (As amended by Executive Order No. 111,
December 24, 1986)
Article 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees. Managerial
employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for
membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of
their own. (As amended by Section 18, Republic Act No. 6715, March 21, 1989)
Article 246. Non-abridgment of the right to self-organization. It shall be unlawful for any person to restrain, coerce, discriminate
against or unduly interfere with employees and workers in their exercise of the right to self-organization. Such right shall include
the right to form, join, or assist labor organizations for the purpose of collective bargaining through representatives of their own
choosing and to engage in lawful concerted activities for the same purpose for their mutual aid and protection, subject to the
provisions of Article 264 of this Code. (As amended by Batas Pambansa Bilang 70, May 1, 1980)

Qualified to form, assist, join unions Disqualified

Employee Caveat and Notes Employee Caveat and Notes

1. Rank-and-file Employees of commercial, industrial, 1. Managerial Employees Ineligible to join, assist, or

Employees agricultural enterprises and religious, form any labor organization.
charitable, medical or educational Doctrine of Necessary
institutions, whether profit or non-profit. Implication - Employees
represent the interest of the
\owners.

1. Supervisory But only their union. Cannot join the union 2. Supervisory Employees Cannot join the union of
Employees of rank-and-file employees. rank-and-file employees

3. Security But only their union. 3. Confidential Employees Those who assist/act in
Personnel/Co confidential capacity to
nfidential/Tec persons who formulate and
hnical implement management
Employees policies in labor relations.

4. Government Must not be part of the AFP, BFP, PNP, 4. AFP, PNP, BFP, BJMP
Employees BJMP personnel

5. Employees of GOCCs are those with original charters 5. Employees of Like those from the UN,
GOCCs (like Land Bank, Developmental Bank, International Organizations WHO, SEAFDEC

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 SSS, GSIS, etc.)

6. Aliens Those with employment permits and 6. Alien employees If there is no permit and no
reciprocity. reciprocity
Reciprocity is when their State must also
allow Filipinos the same right. 7. Religious Objectors

8. Member-Employees of Cooperatives

9. Employees excluded from bargaining unit

Doctrinal Rulings:

1. Confidential employees -- Metrolab v. Confessor, G.R. No. 10885, 28 February 1996

CASE: Metrolab v. Confessor, G.R. No. 10885, 28 February 1996

Doctrine: Although Art. 245 of the Labor Code limits the ineligibility to join, form, and assist any labor organization to managerial
employees, jurisprudence has extended this prohibition to confidential employees or those who by reason of their positions or
nature of work are required to assist or act in a fiduciary manner to managerial employees and hence, are likewise privy to
sensitive and highly confidential records.

2. Accounting personnel, radio and telegraph operators;

NOTE: Radio and telegraph operators are mostly an outdated profession.

3. Branch managers, cashiers and controllers

CASE: National Union Association of Trade Unions-RBP Supervisors Chapter v. Torres 239 SCRA 546
Doctrine: The disqualification of managerial employees from joining a union is due to the evident conflict of interest as they are
supposed to be on the side of the management.  As to confidential employees, their disqualification is due to the undue
advantage they possess.
Branch managers/Cashiers/Controllers are all considered confidential employees and hence disqualified from joining a labor
organization.  Do note that this is not applicable to all banks in general.

4. General manager including executive secretaries;

5. Legal secretaries

CASE: Pier 8 Arrastre & Stevedoring Services, Inc. v. Confessor, 241 SCRA 294
Doctrine: The test of supervisory or managerial status is whether an employee possesses authority to act in the interest of his
employer, and such authority is not merely routinary or clerical in nature but requires the use of independent judgment. What
determines the nature of the employment is not the title but the job description.

B. Labor Organizations (240-248)

Title IV
LABOR ORGANIZATIONS
Chapter I
REGISTRATION AND CANCELLATION
Article 240 (234). Requirements of registration. Any applicant labor organization, association or group of unions or workers shall
acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon
issuance of the certificate of registration based on the following requirements.
a. Fifty pesos (P50.00) registration fee;
b. The names of its officers, their addresses, the principal address of the labor organization, the minutes of the
organizational meetings and the list of the workers who participated in such meetings;
c. In case the applicant is an independent union, the names of all its members comprising at least twenty percent (20%)
of all the employees in the bargaining unit where it seeks to operate; (As amended by Executive Order No. 111,
December 24, 1986)
d. If the applicant union has been in existence for one or more years, copies of its annual financial reports; and
e. Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the list
of the members who participated in it. (As amended by Batas Pambansa Bilang 130, August 21, 1981)
Article 241 (234-A). Chartering and Creation of a Local Chapter. A duly registered federation or national union may directly
create a local chapter. The chapter shall acquire legal personality only for purposes of filing a petition for certification election
from the date it was issued a charter certificate.
The chapter shall be entitled to all other rights and privileges of a legitimate labor organization only upon the submission of the
following documents in addition to its charter certificate:
a. The names of the chapter’s officers, their addresses, and the principal office of the chapter; and
b. The chapter’s constitution and by-laws: Provided, that where the chapter’s constitution and by-laws are the same as
that of the federation or the national union, this fact shall be indicated accordingly.
The additional supporting requirements shall be certified under oath by the secretary or treasurer of the chapter and attested by
its president.
Article 242 (235). Action on application. The Bureau shall act on all applications for registration within thirty (30) days from filing.
All requisite documents and papers shall be certified under oath by the secretary or the treasurer of the organization, as the case
may be, and attested to by its president.
Article 243 (236). Denial of registration; appeal. The decision of the Labor Relations Division in the regional office denying
registration may be appealed by the applicant union to the Bureau within ten (10) days from receipt of notice thereof.
Article 244 (237). Additional requirements for federations or national unions. Subject to Article 238, if the applicant for
registration is a federation or a national union, it shall, in addition to the requirements of the preceding Articles, submit the

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 following:
Proof of the affiliation of at least ten (10) locals or chapters, each of which must be a duly recognized collective bargaining agent
in the establishment or industry in which it operates, supporting the registration of such applicant federation or national union; and
The names and addresses of the companies where the locals or chapters operate and the list of all the members in each
company involved.
[Article 238. Conditions for registration of federations or national unions. (Repealed by Executive Order No. 111, December 24,
1986)]
Article 245 (238). Cancellation of registration; appeal. The certificate of registration of any legitimate labor organization, whether
national or local, shall be cancelled by the Bureau, after due hearing, only on the grounds specified in Article 239 (247) hereof.
(As amended by R.A. No. 9481)
Article 246 (238-A). Effect of Petition for Cancellation of Registration. A petition for cancellation of union registration shall not
suspend the proceedings on certification election nor shall it prevent the filing of a petition for certification election.
In case of cancellation, nothing herein shall restrict the right of the union to seek just and equitable remedies in the appropriate
courts. (This new article is an amendment inserted by R.A. No. 9481, effective June 14, 2007.)
Article 247 (239). Grounds for cancellation of union registration. The following may constitute grounds for cancellation of union
registration:
a. Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and
by-laws or amendments thereto, the minutes of ratification and the list of members who took part in the ratification;
b. Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of
officers, and the list of voters;
c. Voluntary dissolution by the members. (As amended by R.A. No. 9481, effective June 14, 2007)
Article 248 (239-A). Voluntary Cancellation of Registration. The registration of a legitimate labor organization may be cancelled
by the organization itself, Provided, That at least two-thirds of its general membership votes in a meeting duly called for that
purpose to dissolve the organization Provided, further, That an application to cancel registration is thereafter submitted by the
board of the organization, attested to by the president thereof. (As inserted by R.A. No. 9481, effective June 14, 2007.)

a. Requirements of registration;
b. Additional requirements for federations or national unions;
c. Grounds for cancellation of union registration;
d. Procedure for registration and its cancellation of registration, appeal;
e. Equity of the incumbent;

Labor Organizations, defined:

❖ A union or association of employees which exists in whole or in part
❖ Purpose: Collective Bargaining and Dealing with Employers concerning terms and conditions of employment.
❖ A legitimate Labor Organization is one that is duly registered with the DOLE.

Classification of Labor Organizations

● At the National Level (Macro-Labor)
1. National Union/Federation
❖ Labor organizations with at least 10 locals/chapters or affiliates, each of which must be a duly certified
or recognized collective bargaining agent.
2. Industry Union
❖ Any group of legitimate labor organizations operating within an identified industry.
3. Trade Union Center
❖ A group of national unions or federations organized for the mutual aid and protection of its members.
4. Alliance
❖ An aggregation of unions existing in one line of industry, or in a conglomerate, a group of franchisees,
a geographical area, or an industrial center.
❖ Each member union retains its own organization, structure, and independence.
❖ It cannot represent its member unions in CBA negotiations.

● At the Enterprise Level (Micro-Labor)

1. Independent registration
❖ Obtained by union organizers through their own action, pursuant to Article 240, instead of through
issuance of a charter by a federation or national union.
2. Chartering
❖ Takes place when a duly registered federation or national union issues a charter to a union in an
enterprise and registers the creation of the chapter with the Regional Office where the applicant
operates.
3. Company-union
❖ A labor organization that is employer-controlled or -dominated. Article 259(d) prohibits these.

The Collective Bargaining Unit (CBU)

➢ A group of employees sharing mutual interests with a given employer unit, comprised of all or less than all of the
entire body of employees in the employer unit or any specific occupational or geographical grouping within such
employer unit.1
❖ Always a group of employees.
➢ May be all the supervisors or all the rank-and-file in the company.
➢ The law does NOT allow supervisors and rank-and-file employees to belong to the same bargaining unit.
❖ Employer units may be subdivided, on occupational or geographical basis.
❖ In every case, the composition of the unit must be “appropriate”
➢ The members share common concerns or common interests
❖ The CBU is different from and bigger than a union.

1
Implementing Rules, Book V, Rule I, Section 1.

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Description of illustration above:
❖ The CBU comprises a group of employees with mutual interests within an employer unit.
❖ It includes legitimate labor organizations (LLOs) and can also include disqualified employees.
❖ One of the LLOs becomes the Collective Bargaining Agent (CBA) of the entire CBU through a certification election
➢ The CBA will represent the entire CBU, and not just the members within its LLO.

Can there be several bargaining units of supervisors or of the rank-and-file in just one company?
❖ YES.
❖ If the employees are too numerous, the groups may be organized under sub units.
❖ If there is physical difficulty of assembling, it may be split geographically (i.e. Luzon, Visayas, Mindanao groups)
❖ BUT
➢ DOLE policy favors creation of only one CBU in one company (one for rank-and-file, one for supervisors)

Is there a minimum or maximum number for a bargaining unit?

❖ NO.
❖ The law fixes no minimum or maximum number.
❖ Whatever the number, 20% thereof should be members of the independent union applying for registration.

Term of the Collective Bargaining Agreement (CBA)

❖ Economic Aspect
➢ Default: 3 year period (but, length may be stipulated)
➢ Due to the non-uniformity of the representation aspect, new economic CBAs may be implemented by the
bargaining agent who did NOT negotiate for the same.
■ That bargaining agent CANNOT touch the existing economic aspect.
❖ Representation Aspect
➢ Default: 5 year period (but, length may be stipulated)
➢ Throughout the entire period, their status as bargaining agent cannot be questioned
■ EXCEPT: during the FREEDOM PERIOD
● 60 days prior to the end of the Representation period
➢ A bargaining agent can represent the bargaining unit if:
■ It has the personality of a Legitimate Labor Organization
■ It is the bargaining agent through the Certification Election
❖ Term of CBA

Other Key Terms:

1. Freedom Period
a. Period of questioning filiation and membership with the Bargaining Agent
b. The member will not be charged for disloyalty
i. If a member questions filiation/membership NOT during freedom period:
1. Bargaining agent may accuse them of disloyalty and may be expelled

Modes of Registration

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 ❖ Independent Registration (Art. 240)
➢ Requirements:2
■ Fifty Pesos (P50.00) Registration Fee
■ Names of its officers, addresses, principal address of the Labor Org, minutes of the organizational
meetings and list of workers who participated in such meetings;
■ Name of all members comprising at least 20% of all employees in the bargaining unit where it
seeks to operate;
● The 20% is not required during the ratification of the union’s CBL, but is only required at the
time the independent union applies to register.
■ If the applicant union has been in existence for one or more years, copies of its annual financial
reports; and
■ Four (4) copies of the constitution and by-laws of the applicant union, minutes of its adoption or
ratification and the list of members who participated in it.

❖ Chartering and Creation of Local Chapter (Art. 241)3

➢ Definition under Art. 241:
■ A duly registered federation or national union may directly create a local chapter by issuing a charter
certificate indicating the establishment of the local chapter.
■ The chapter shall acquire legal personality only for purposes of filing a petition for certification
election from the date it was issued a charter certificate.
■ The chapter shall be entitled to all other rights and privileges of a legitimate labor organization only
upon submission of the documents required under Article 241 in addition to its charter certificate:
● The names of the chapter’s officers, their addresses, and the principal office of the chapter;
and
● The chapter’s constitution and by-laws: Provided, That where the chapter’s constitution and
by-laws are the same as that of the federation or the national union, this fact shall be
indicated accordingly.
■ Additional requirements shall be certified under oath by the secretary or treasurer of the chapter and
attested by its president.
➢ A union created through chattering is called a local, a chapter, or a chartered local
➢ Chartered local, defined:
■ A labor organization in the private sector operating at the enterprise level that acquired legal
personality through registration with the Regional Office in accordance with Rule III, Section 2-E of
these Rules.

Only 17% of the members attended the organizational meeting, but upon registration the union’s membership was at 21%.
Was the union registration valid?
❖ YES.
❖ The 20% minimum requirement pertains only to the union membership when it was registered and not to attendance in
the organizational meeting.4

If members in the union withdrew their membership, thereby depleting the 20% requirement, is the union still registerable?
❖ It DEPENDS when they withdrew--before or after the application for registration.
❖ If before, the withdrawal is voluntary and it will prejudice the registrability of the application.
❖ If after, the withdrawal is involuntary and does NOT affect the registration.

Does a local chapter automatically receive the rights and privileges as that of an LLO upon registration?
❖ NO.
❖ The legal personality acquired by a local chapter is merely provision, for purposes of filing a petition for certification
election (PCE). The other rights and privileges are available only upon the submission of other documents as
demanded by Art. 241.

Until when must the local chapter submit the documents in order to garner the rights and privileges of an LLO?
❖ Article 241 does not provide a time limit for submitting those additional documents.
❖ It is assumed that it is not difficult because:
➢ A chapter that wants to become a bargaining agent will waste no time to make itself legitimate.
➢ The documents asked for are the same documents supporting the PCE that should be submitted within 30
days.

Can the Med Arbiter dismiss the PCE if the union failed to attach in its petition a duly issued charter certificate?
❖ YES.
❖ It is necessary to attach a duly issued charter certificate.5
❖ A PCE may also be dismissed if the union is not listed in DOLE’s registry of legitimate unions.

Advantages and Disadvantages of Independent Registration v. Creation of a Local Chapter

Independent Registration (Art. 240) Creation of a Local Chapter (Art. 241)

Registration Stricter; more requirements More relaxed; only information of officers and CBL.
(registration fee, information of officers, at least No minimum number of members are necessary.
20% of all employees in bargaining unit, copies
of CBL, financial reports)

Strength of Acquires legal personality straightaway. Acquires provisional legal personality, but “only for
Registration purposes of filing a petition for a certification election”
Will acquire other rights after submission of requirements

2
As amended by. R.A. No. 9481, effective June 14, 2007
3
Article is inserted as an amendment by R.A. No. 9481, effective June 14, 2007.
4
Takata Phil. Corp. v. Bureau of Labor Relations, G.R. No. 196276, June 4, 2014.
5
Section 14, Rule VIII, D.O. No. 40-F-03

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 Legal Independent and of its own Derived from a federation.
personality However, may subsequently register itself independently.

Where to Register?

Local Union National Union

1. Regional Office; in case of denial, appeal to 1. Bureau of Labor Relations (BLR); in case of denial,
appeal to

2. BLR; in case denial is affirmed, appeal to 2. Secretary of Labor; in case denial is affirmed, appeal to

3. Court of Appeals; in case appeal is denied, appeal to 3. Court of Appeals; in case appeal is denied, appeal to

4. Supreme Court. 4. Supreme Court.

Are all labor organizations that are not registered considered as “illegitimate”?
❖ NO.
❖ A labor organization is still a lawful organization and can deal with the employer.
❖ However, it has no legal personality to:
➢ Demand collective bargaining with the employer
➢ Petition for a certification election
➢ Request a preventive mediation
➢ Hold a legal strike

Are labor organizations that have a certification of incorporation by the SEC and under the Corporation Law granted the
same rights and privileges as LLOs?
❖ NO.
❖ While labor organizations may be organized under the Corporation Law as a nonstock corporation, it does not grant them
the same rights and privileges as LLOs.
❖ However, they have juridical personality before regular courts of justice.

Can a Trade Union Center create a Chapter?

❖ NO.
❖ Only duly registered federations or national unions may create chapters.6
❖ RECALL:
➢ A Trade Union Center refers to a group of national unions or federations organized for the mutual aid and
protection of its members, for assisting such members in collective bargaining, or for participating in the
formulation of social and employment policies, standards, and programs.
When does a Chapter become an LLO?
❖ On the date of issuance of its certificate of registration or certificate of creation of chartered local.7

Effect of Registration:
❖ A labor organization that is registered becomes “legitimate,” i.e. a Legitimate Labor Organization (LLO), and is able to:
➢ Demand collective bargaining with the employer
➢ Petition for a certification election (CE)
➢ Request a preventive mediation
➢ Hold a legal strike

AFFILIATION
Affiliation, defined:
❖ An independently registered union that enters into an agreement of affiliation with a federation or a national union; or
➢ Their relationship is that of a principal and agent, where the principal is the independent union, and the agent is
the federation/national union.
■ Even after disaffiliation, the independent union can still stand.
❖ A chartered local which applies for and is granted an independent registration but does not disaffiliate from its mother
federation or national union.
➢ Here, the chartered local is a part of the mother federation or national union, without which it will dissolve.

Union Affiliation
❖ Local Union
➢ Any labor organization operating at the company or establishment level
❖ National Union or Federation
➢ Any labor organization with at least TEN (10) affiliates (local unions or chapters) each of which must be a duly
recognized collective bargaining agent.
❖ NOTE:
➢ Workers may form independent local unions or join national unions or federations either as affiliates or chapters.
➢ Affiliation is intended to strengthen the collective bargaining leverage of local unions.
➢ The relationship between affiliated independent union and federation/national union is one of
PRINCIPAL-AGENT

Effect of Affiliation
❖ The affiliate becomes subject to rules and laws of the parent organization or mother union under whose charter or
authority the local union exists and functions.

6
San Miguel Corp. Employees Union, et al. v. San Miguel Packaging Products Employees Union, etc. G.R. No. 171153, September 12, 2007.
7
D.O. No. 40-03, superseding D.O. No. 9

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 ❖ The local union, however remains the basic unit of association, free to serve its own and the common interest of all,
subject to the restraints and limitations imposed by the constitution and by-laws of the parent organization, and free to
renounce the affiliation for mutual welfare.

Right to Disaffiliate
❖ The affiliate has the constitutionally guaranteed right to disaffiliate from the national union/federation, generally during the
Sixty-Day (60-Day) Freedom Period.
❖ However, under certain circumstances, the disaffiliation may be effected at any time provided the majority of the members
of the bargaining unit approve the same.

CASE: NATIONAL UNION OF BANK EMPLOYEES (NUBE) VS. PHILNABANK EMPLOYEES ASSOCIATION (PEMA) AND
PHILIPPINE NATIONAL BANK.

Doctrine: While local unions should be free to affiliate with other unions, they should also be free to disassociate, especially if the
latter is unable to fulfill their role of providing better rights for the members. In determining the validity of a disassociation, majority
rule is needed and due process has to be followed

Facts: The Philippine National Bank (PNB)’s employees are represented by Philnabank Employees Association (PEMA). When
PNB became a private corporation in 1996, PEMA affiliated with the National Union of Bank Employees (NUBE), a labor
federation composed of unions in the banking industry, becoming NUBE-PNB Employees Chapter (NUBE-PEC).
❖ NUBE-PEC was the certified exclusive bargaining agent of the PNB employees. They had a CBA which, among
others, required PNB to remit P15.00 of the P65.00 union due and credit the amount to NUBE’s account.
➢ This act led to the dissatisfaction of PNB employees. They wanted to disaffiliate with NUBE.
➢ Officers of NUBE-PEC adopted a Resolution of disaffiliating and the same was ratified by 81% of its
employees
➢ PNB respected this and stopped remitting funds to NUBE.
❖ NUBE insisted that it was still the exclusive bargaining agent and denied the disaffiliation.
➢ NUBE and PNB brought the matter before the NCMB and also to the Office of the SOLE.
➢ DOLE denied NUBE-PEC’s petition to be renamed as PEMA.
❖ October 17, 2003: A certification election was held between NUBE v. NUBE-PEC. NUBE-PEC won 2,683 votes to 289.
➢ A motion for intervention by PEMA was filed to resolve the validity of the disaffiliation. Denied by Acting
SOLE Manuel Imson. He further ordered PNB to release the withheld union dues and remit them to NUBE.
❖ PEMA filed a TRO and Writ of Preliminary Injunction (WPI) before the CA. This was denied, but the CA declared
PEMA’s disaffiliation as valid. Hence, this petition by NUBE.

ISSUE: WON there was a valid disaffiliation from NUBE

RULING: YES. The right of the local union to exercise the right to disaffiliate from its mother union is well settled in this
jurisdiction.

NUBE’s defense that PD 1391 allows disaffiliation only within a 60- day period preceding the expiration of the CBA is untenable.
This is because if the majority of members want the disaffiliation, it shall be allowed. In their Resolution, 81% agreed to the
disaffiliation. NUBE’s citation of the certification election cannot be relied on since PEMA’s name was not used.

There is no merit on NUBE’s contention that PEMA’s disaffiliation is invalid for non-observance of the procedure that union
members should make such determination through secret ballot and after due deliberation, conformably with Article 241 (d) of the
Labor Code, as amended. Conspicuously, other than citing the opinion of a “recognized labor law authority,” NUBE failed to quote
a specific provision of the law or rule mandating that a local union’s disaffiliation from a federation must comply with Article 241
(d) in order to be valid and effective.

In effect, NUBE loses its right to collect all union dues held in its trust by PNB. The moment that PEMA separated from and left
NUBE and exists as an independent labor organization with a certificate of registration, the former is no longer obliged to pay
dues and assessments to the latter; naturally, there would be no longer any reason or occasion for PNB to continue making
deductions.

May a local union disaffiliate from a national federation on their own terms?
❖ NO.
❖ While local unions have the right to disaffiliate, the manner in which it is to be done must be in observance of the terms of
the agreement.

CANCELLATION

Grounds for Cancellation of Registration (Art. 246)

❖ 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 embers who took part in the ratification;

❖ Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of the
officers, adn the list of voters;

❖ Voluntary dissolution by the members

➢ Members’ desire to dissolve or cancel the registration of their union should have been voted upon through
secret balloting, applying the rule in Article 250(d).
➢ The balloting should take place in a meeting duly called for the purpose of deciding whether or not to dissolve
the union.
➢ The vote to dissolve should represent two-thirds (⅔) affirmative vote of the general membership, not just of
the quorum.
■ Justification of voting is not necessary.
➢ Members’ resolution should be followed by an application for cancellation
■ Passed and submitted by the union’s governing board
■ Application is attested by the president

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Effect of Cancellation
❖ Cancellation is the government’s act that divests the organization of their status as legitimate.
❖ Cancellation reverts the organization’s character prior to the registration.
❖ The juridical personality, statutory rights and privileges are suspended
➢ Organization, however, does not cease to exist or become an unlawful organization.
❖ Loses entitlement to rights under Article 251 of the Labor Code.
❖ Cannot demand recognition
❖ Cannot bargain with the employer
❖ Cannot file a petition for certification election
❖ Cannot strike.

Where to File Petition?

❖ RULE: The office that registers the union is the same office that can cancel the registration
➢ Regional Director, if:
■ Legitimate independent labor union
■ Chartered local and workers’ association
➢ Bureau Director, if:
■ Federations
■ National or industry unions
■ Trade union centers
■ NOTE: Only upon the filing of an independent complaint or petition for cancellation8

Equity of the incumbent rule

❖ All existing federations and national unions which meet the qualifications of a legitimate labor organization and none of the
grounds for cancellation shall continue to maintain their existing affiliates regardless of the nature of the industry and
location of the affiliates.
❖ Upon the passage of the LCP (P.D. 442), existing institutions will not necessarily be affected
➢ As long as grounds for cancellation are NOT present

Summary of Amendments (R.A. 9481)

Amendment Notes:

1. No required number for ❖ The 20% registration requirement applies only to an independent union
charter registration; ❖ Local chapters are registrable even if its initial membership is less than 20% of the
bargaining unit.

2. Tentative legal personality
for local chapters;
❖ Local chapters are created when a federation issues a charter certificate
➢ Chapter acquires legal personality to file a petition for CE
❖ Other union rights of the local chapter will be acquired upon submission of:
➢ Names and address of officers and members of union;
➢ Chapter’s constitution and by-laws (can be the same as that of federation’s)
➢ NOTE: must be certified by the Secretary/Treasurer and attested by the President

3. Specific grounds (3) for ❖ Instead of the 10 grounds, they are reduced to 3:
cancellation; ➢ Falsehood about the Constitution and by-laws;
➢ Falsehood about the election of the officers
➢ Voluntary dissolution by the members

4. PCE proceeds despite ❖ A petition to cancel union registration does not prevent the filing or the hearing of a
Petition to Cancel Union petition for a Certification Election.
Registration;

5. Cancellation by Action of ❖ ⅔ of membership vote required to dissolve the organization

the Members; ❖ Action requires a subsequent “application to cancel,” submitted by the board and
attested by the president.

6. Reportorial requirements; ❖ Every legitimate labor organization has to submit to the Bureau of Labor Relations:
➢ Adoption or amendments to constitution and by-laws (CBL)
➢ Election of officers, with list of voters submitted in 30 days;
➢ Annual financial reports within 30 days from close of fiscal year;
➢ Annual list of members
❖ NOTE: Non-submission is NOT a ground for canceling registration, but erring officers
may be punished even by expulsion.

7. Affiliation with same ❖ Supervisors’ union and rank-and-file union in the same company may affiliate with the
Federation; same federation.

8. Commingling is not a ❖ Commingling of supervisors and rank-and-file- in one union is NOT ground to cancel
ground for cancellation; union registration.
❖ The excludible member is “automatically deemed removed” from the list.

9. Non-disclosure of identity ❖ In organized (unionized) enterprises:

(even in in Unorganized ➢ Identification of the chapter’s officers and members are NOT necessary
Establishments); ■ When the federation files a Petition for Certification Election (PCE) on
behalf of a chapter.
➢ PCE does not have to be filed by the local officers
❖ In unorganized companies:

8
Sec. 1, Rule XIV, D.O. No. 40-03

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 ➢ Non-disclosure rule still applies

10. Employer is a bystander ❖ The employer has NO RIGHT to oppose a Petition for Certification Election (PCE)
❖ Participation is limited to (1) being informed about the petition, and (2) being required to
submit the list of employees if a CE will be held.

❖ What is this?
➢ R.A 9481 (2007) provides amendments to the Labor Code, particularly the workers’ Right to Self-Organization
➢ It amends six articles and replaces them with new ones.
■ Makes it easier to create unions and harder to cancel a union’s registration
➢ Author (Azucena):
■ Amendments strengthen the national unions more than the locals
■ Grass root union democracy appears weakened, not strengthened.
➢ The 10 items above are its highlights.

C. Rights of Legitimate Labor Organizations (250)

Chapter III
RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS
Article 251 (242). Rights of legitimate labor organizations. A legitimate labor organization shall have the right:
A. To act as the representative of its members for the purpose of collective bargaining;
B. To be certified as the exclusive representative of all the employees in an appropriate bargaining unit for purposes of
collective bargaining;
C. To be furnished by the employer, upon written request, with its annual audited financial statements, including the
balance sheet and the profit and loss statement, within thirty (30) calendar days from the date of receipt of the request,
after the union has been duly recognized by the employer or certified as the sole and exclusive bargaining
representative of the employees in the bargaining unit, or within sixty (60) calendar days before the expiration of the
existing collective bargaining agreement, or during the collective bargaining negotiation;
D. To own property, real or personal, for the use and benefit of the labor organization and its members;
E. To sue and be sued in its registered name; and
F. To undertake all other activities designed to benefit the organization and its members, including cooperative, housing,
welfare and other projects not contrary to law.

Notwithstanding any provision of a general or special law to the contrary, the income and the properties of legitimate labor
organizations, including grants, endowments, gifts, donations and contributions they may receive from fraternal and similar
organizations, local or foreign, which are actually, directly and exclusively used for their lawful purposes, shall be free from taxes,
duties and other assessments. The exemptions provided herein may be withdrawn only by a special law expressly repealing this
provision. (As amended by Section 17, Republic Act No. 6715, March 21, 1989)

a. Right to represent members for Collective Bargaining

b. Right to be certified as Collective Bargaining Agent
c. Right to be furnished Audited Financial Statements
d. Right to own property
e. Right to sue and be sued
f. Right to organize and operate cooperatives, housing, welfare, and other projects, etc.

D. Rights and Conditions of Membership (250)

Article 250 (241). Rights and conditions of membership in a labor organization. The following are the rights and conditions of
membership in a labor organization:

(a) No arbitrary or excessive initiation fees shall be required of the members of a legitimate labor organization nor shall
arbitrary, excessive or oppressive fine and forfeiture be imposed;

(b) The members shall be entitled to full and detailed reports from their officers and representatives of all financial
transactions as provided for in the constitution and by-laws of the organization;

(c) The members shall directly elect their officers, including those of the national union or federation, to which they or
their union is affiliated, by secret ballot at intervals of five (5) years. No qualification requirements for candidacy to any position
shall be imposed other than membership in good standing in subject labor organization. The secretary or any other responsible
union officer shall furnish the Secretary of Labor and Employment with a list of the newly-elected officers, together with the
appointive officers or agents who are entrusted with the handling of funds, within thirty (30) calendar days after the election of
officers or from the occurrence of any change in the list of officers of the labor organization; (As amended by Section 16,
Republic Act No. 6715, March 21, 1989)

(d) The members shall determine by secret ballot, after due deliberation, any question of major policy affecting the entire
membership of the organization, unless the nature of the organization or force majeure renders such secret ballot impractical,
in which case, the board of directors of the organization may make the decision in behalf of the general membership;

(e) No labor organization shall knowingly admit as members or continue in membership any individual who belongs to a
subversive organization or who is engaged directly or indirectly in any subversive activity;
(f) No person who has been convicted of a crime involving moral turpitude shall be eligible for election as a union officer
or for appointment to any position in the union;

(g) No officer, agent or member of a labor organization shall collect any fees, dues, or other contributions in its behalf or
make any disbursement of its money or funds unless he is duly authorized pursuant to its constitution and by-laws;
(h) Every payment of fees, dues or other contributions by a member shall be evidenced by a receipt signed by the officer
or agent making the collection and entered into the record of the organization to be kept and maintained for the purpose;

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 (i) The funds of the organization shall not be applied for any purpose or object other than those expressly provided by
its constitution and by-laws or those expressly authorized by written resolution adopted by the majority of the members at a
general meeting duly called for the purpose;

(j) Every income or revenue of the organization shall be evidenced by a record showing its source, and every
expenditure of its funds shall be evidenced by a receipt from the person to whom the payment is made, which shall state the
date, place and purpose of such payment. Such record or receipt shall form part of the financial records of the organization.
Any action involving the funds of the organization shall prescribe after three (3) years from the date of submission of the annual
financial report to the Department of Labor and Employment or from the date the same should have been submitted as required
by law, whichever comes earlier: Provided, That this provision shall apply only to a legitimate labor organization which has
submitted the financial report requirements under this Code: Provided, further, that failure of any labor organization to comply
with the periodic financial reports required by law and such rules and regulations promulgated thereunder six (6) months after
the effectivity of this Act shall automatically result in the cancellation of union registration of such labor organization; (As
amended by Section 16, Republic Act No. 6715, March 21, 1989)

(k) The officers of any labor organization shall not be paid any compensation other than the salaries and expenses due
to their positions as specifically provided for in its constitution and by-laws, or in a written resolution duly authorized by a
majority of all the members at a general membership meeting duly called for the purpose. The minutes of the meeting and the
list of participants and ballots cast shall be subject to inspection by the Secretary of Labor or his duly authorized
representatives. Any irregularities in the approval of the resolutions shall be a ground for impeachment or expulsion from the
organization;

(l) The treasurer of any labor organization and every officer thereof who is responsible for the account of such
organization or for the collection, management, disbursement, custody or control of the funds, moneys and other properties of
the organization, shall render to the organization and to its members a true and correct account of all moneys received and
paid by him since he assumed office or since the last day on which he rendered such account, and of all bonds, securities and
other properties of the organization entrusted to his custody or under his control. The rendering of such account shall be made:
At least once a year within thirty (30) days after the close of its fiscal year;
At such other times as may be required by a resolution of the majority of the members of the organization; and
Upon vacating his office. The account shall be duly audited and verified by affidavit and a copy thereof shall be furnished the
Secretary of Labor.

(m) The books of accounts and other records of the financial activities of any labor organization shall be open to
inspection by any officer or member thereof during office hours;

(n) No special assessment or other 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 in 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.

(o) 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;
and

(p) It shall be the duty of any labor organization and its officers to inform its members on the provisions of its constitution
and by-laws, collective bargaining agreement, the prevailing labor relations system and all their rights and obligations under
existing labor laws.

For this purpose, registered labor organizations may assess reasonable dues to finance labor relations seminars and other labor
education activities.

Any violation of the above rights and conditions of membership shall be a ground for cancellation of union registration or
expulsion of officers from office, whichever is appropriate. At least thirty percent (30%) of the members of a union or any member
or members specially concerned may report such violation to the Bureau. The Bureau shall have the power to hear and decide
any reported violation to mete the appropriate penalty.

Criminal and civil liabilities arising from violations of above rights and conditions of membership shall continue to be under the
jurisdiction of ordinary courts.

Summary Rights/Conditions of Members

❖ Political Right/Decision-Making
➢ Participate in Electoral Processes
➢ Participate in deliberations
❖ Financial Rights
➢ Right against excessive fees, assessments, disbursements, examine financial records
❖ Right to Information
➢ Information on membership, union rules, CBA

POLITICAL RIGHTS
❖ Direct election of officers every Five (5) years;
❖ Participate by secret ballot in policy-making;
❖ Right against admission of subversives and engaging in subversive activity;
❖ Right against election of persons convicted of crimes involving moral turpitude to elective administrative posts;
❖ Participate in approval of special assessments;

Election of Officers

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 Stage Criteria

Running Qualification Disqualification

❖ An employee of the company ❖ Conviction of crime of moral turpitude

❖ Other matters as stated in the union’s CBL ❖ Subversive (though subversion law was repealed)

Elections How? By whom? When?

❖ By Members ❖ Directly and secretly ❖ Every five (5) years

❖ By secret ballot by the Members
❖ Other matters as stated in the union’s CBL

Impeachment How? By whom? Where?

❖ Procedure must be in accordance with the ❖ Thirty (30%) percent ❖ Before the Bureau of
union’s CBL of Membership Labor Relations
❖ Due Process (National) or Regional
Officer (Local Chapter)

CASE: BENEDICTO RODRIGUEZ, ETC. VS. HON. DIRECTOR, BUREAU OF LABOR RELATIONS, CARLOS GALVADORES
AND LIVI MARQUEZ.

G.R. Nos. 76579-82, G.R. NO. 80504. AUGUST 31, 1988

Doctrine:
(1) A member’s right of suffrage in the union is an essential right. Union elections should be free and honest so as to
protect the employees’ right to self-organization.
(2) Resolutions and changes in a Union should follow procedural due process requirements.
(3) Art. 242 mandates a 30% requirement of members petitioning in cases of violation of rights. Art. 226 removes that
requirement if the case deals with intra- and inter-union conflicts.

Facts: The petitions for certiorari were instituted separately, but consolidated because both involved the PLDT employees, who
are members of the same union, the Free Telephone Workers Union (FTWU).
❖ G.R. Nos. 7659-82: Controversy Respecting Elections of Officers
➢ July 1986 elections were to be held but the fees for filing of Certificate of Candidacies (COCs) were raised
from P75-100 to P3000 for Presidents. Petitioners in these cases are Presidential candidates for the
elections.
➢ Med-Arbiter issued a restraining order against the enforcement of the new rates.
❖ July 21 and 22: The provincial elections (supposedly 14 to 18) was held in spite of the restraining order.
➢ More complaints were filed seeking to nullify the elections and for the issuance of ground rules before the
Metro Manila elections would be held. TRO was issued.
➢ Nevertheless, the Union COMELEC still proceeded with the elections. 73% turnout.
➢ Med-Arbiter consolidated the 4 cases and ruled that the election was valid.
❖ On appeal, the judgment was overturned by the Officer-In-Charge of Labor Relations. Hence, the petition for certiorari
❖ G.R. No. 80504: Controversy Respecting Labor Union Dues
➢ While the case on the elections is pending, the old officers led by Manolito Paran resumed their
administration in July 1986. They made a resolution to increase the union dues from P21 to P50 per month.
This was later ratified through a referendum.
➢ Rey Sumangil and his 829 followers assailed the increase citing that the officers lost their power last August.
■ The Med-Arbiter disagreed stating that their complaint lacked the required 30% support of Art. 242.
■ The Director of Labor Relations reversed the Med-Arbiter’s decision.
■ The Director reversed herself, later and affirmed the Med-Arbiter. Hence, the petition for certiorari.

ISSUE: WON the general elections of 1986 was valid; and WON the increase of union dues adopted by the officers was valid.

RULING: NO and NO.

The general elections was not valid because there was no due process for the candidates, and the elections were held in
defiance of the restraining orders. The provincial elections were not held on the supposed date and, together with the Metro
Manila elections, did not have any prescribed ground rules. The claim of a record-breaking over-turn (73% vs. the previous 66%
turnout) cannot purge the election’s grave infirmities. Free and honest elections are indispensable to the enjoyment by employees
and workers of their constitutionally protected right to self-organization.

The increase of union dues was also not valid because the required 2/3 signatures of the members of the Council were not met,
per the Union’s by-laws. There was also no proof that a plebiscite was called for the ratification of the resolution. Due to these
violations, the resolution is invalid and such funds must be returned to the members.

Finally, reliance on Art. 242 is improper. While the 30% requirement is mandatory for cases of violation of rights of an officer, Art.
226 removes that requirement if the issue is concerned with inter-union and intra-union conflicts. Since the elections dealt with
the members’ right of suffrage, and the complaint of labor union dues brought up by 800+ members, the Bureau of Labor
Relations has jurisdiction over the matters.

Due Process
❖ Necessary in Impeachment and Expulsion of a member
➢ In expulsion of a member, it should be for a valid cause and follows the procedure outlined in the CBL
■ Remedies usually found in the CBL of the union
● XPN: If exhaustion of remedies lead to denial of justice; can invoke the aid of a court.
➢ In impeachment
■ Ground includes irregularities in the approval of resolutions (Art. 250(k))

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 ■ 30% of the membership need to file it before the Bureau of Labor Relations or the Regional Officer

Consequence of Violation of Rights

❖ RULE: Violation of Article 250 shall be treated as an intra-union dispute
➢ Any complaint or petition with allegations of mishandling, misappropriation, or non-accounting of funds
➢ At least thirty (30%) percent of members should report the violation to the BLR or RO
■ EXCEPT:
● When the violation directly affects only one or two members, then only one or two members
would be enough to report such violation
● In Rodriguez v. Director, Bureau of Labor Relations (above), the 30% membership was
not met. However, the Director still had jurisdiction since the issue, the right of suffrage,
was an inter-union conflict. This is the exception.
❖ REMEDY: Heard and resolved by the Med-Arbiter (Rule XI)
❖ NOTE:
➢ Violation of Article 250 is NOT a ground for cancellation of union registration.

Visitorial Power (Art. 289)

❖ On the basis of a complaint under oath, supported by 20% of the membership
❖ The Secretary of Labor and Employment or his duly authorized representatives can inquire into the financial activities of
any labor organization.
➢ They will determine compliance or noncompliance with the laws and to aid in the prosecution of any violation.

FINANCIAL RIGHTS

Division of Finances

Financial Rights of the Union Members

❖ No arbitrary or excessive fees, fines, etc.;
❖ No unauthorized special assessments;
❖ No check-off except for dues and mandatory activities;
❖ Right ot be issued receipts for payments;
❖ No unauthorized collection or disbursement of funds; and
❖ Officers are only entitled to salaries/expenses duly authorized under the Constitution or majority of members.

Right against arbitrary or excessive fees, fines, etc.

❖ COMPARE:
➢ Right of a Union to Collect Dues (Art. 292-A)
■ Amount of union dues should be reasonable
■ “Any question of major policy affecting the entire membership” has to be determined by the members
themselves by secret ballot. (Art. 250(d))
● This includes the amount and collection of union dues.
❖ Check-offs, defined:
➢ A method of deducting from an employee’s pay at prescribed period, the amounts due the union for fees, fines,
or assessments.

Right against unauthorized special assessments

❖ Art. 250:
➢ “Other than for mandatory activities under the Code, no special assessment, attorney’s fees, negotiation fees or
any other extraordinary fees may be checked off from any amount due an employee without individual written
authorization duly signed by the employee. The authorization should specifically state the amount, purpose and
beneficiary of the deduction.”
❖ Mandatory activity, defined:
➢ A judicial process of settling disputes laid down by the law.
■ An amicable settlement entered into by the management and the union is NOT mandatory activity.

❖ Financial Matters
➢ Prescription
■ Three (3) years from the date audited financial reports submitted/should have been submitted.
■ No financial report, sanction on the officer concerned

➢ Article 288 (Visitorial Power)

■ Twenty (20%) percent of the membership
■ Examination of financial activities
■ No examination
● Freedom Period
● 30 days before the Election of Officer

❖ Financial Concerns
➢ No arbitrary/excessive fees/fines
➢ Reasonable dues for labor seminars/education

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 ➢ Issuance of receipts
➢ Detailed reports/financial transactions
➢ Check-offs/Special Assessments
➢ Agency Fee

Special assessment
❖ Written resolution approved by majority
❖ General membership meeting called for that purpose
❖ President/Secretary to attest to:
➢ Minutes
➢ Members present
➢ Votes cast
➢ Purpose of Special Assessment
➢ Recipient
❖ Requisites to Collect Special Assessment 9
➢ Authorization by a written resolution;
➢ Secretary’s record of the minutes of the meeting;
➢ Individual written authorization for check-off duly signed by the employee concerned;
➢ No requirement for check-off of union dues/agency fee

CASE: CARMELITO L. PALACUL, ET AL., VS. PURA FERRER-CALLEJA, DIRECTOR OF THE BUREAU OF LABOR
RELATIONS, MANILA CCBPI SALES FORCE UNION, AND COCA-COLA BOTTLERS (PHILIPPINES)

G.R. No. 85333, February 26, 1990

Doctrine: CBAs are designed for the purpose of helping each member primarily for their individual rights and not merely for the
entire union. If a clause is included in collecting more funds from their members, such collection must go through substantial and
procedural due process.

FACTS:
❖ October 12, 1987: The employees of Coca-Cola Bottlers (Coke) are members of the union Manila CCBPI Sales Force
(Union). With Coke, they had a Collective Bargaining Agreement (CBA)
➢ CBA included general salary increase and deduction of union dues that would go to a 10% Special
Assessment (SA). This SA will, for the meantime, be held in trust by Coke.
❖ September 29, 1987: Through a Board Resolution, the SA will be used for a cooperative and credit union, purchase of
vehicles, and other purposes deemed necessary by the Union President.
➢ For the approval of the SA, there was a secret referendum: 672 voted yes, 173 voted no.
➢ Later, some members withdrew their votes: 272 yes, 528 no.
❖ Since Coke is not sure who to give the allocated SA money too, they filed an interpleader with the Bureau of Labor
Relations. The parties were the petitioners vs. Coke and the Union.
➢ The petitioners comprise of those who voted no (or later voted no) to the referendum.
➢ The petitioners allege that the SA provision violates Articles 222(b) and 241(o) of the Labor Code.
❖ February 15, 1988: Med-Arbiter ruled in favor of Petitioners; later, August 19, Director Ferrer-Calleja reversed the
decision. Hence, this present petition.

ISSUE: WON the provision for the Special Assessment is violative of the Labor Code of the Philippines.

RULING: Yes. The provision violated Articles 222(b) and 241(o) of the LCP. They violated Article 241 when they failed to comply
with the procedure to legitimize the special assessment by:
1. Presenting mere minutes of local membership meetings instead of a written resolution;
2. Failing to call a general meeting;
3. Having the minutes of three (3) local meetings recorded by a union director, and not by the union secretary as required;
4. Failing to have the list of members present included in the minutes of the meetings; and
5. Failing to present a record of the votes cast.
The reason advanced is that a special assessment is not a matter of major policy affecting the entire union membership but is
one which concerns the individual rights of members. Moreover, the collection of a special fund should only be for labor and
education research. Purchase of vehicles and other reasons are not included in the law and should be covered by regular union
dues.

They violated Article 222(b) since the payment will be for the union officers and their consultants. This contravenes the Article
because the same falls within the category of “similar charge.”

RIGHT TO INFORMATION
❖ Recording of income and expenditures;
❖ Accounting of all organizational funds;
❖ Inspection of Books of Accounts/Financial Records;
❖ Information on rights/duties of members under the Union Constitution and By-Laws (CBL), CBA, Labor Laws, and
Jurisprudence

Violation of Rights
Remedies:
❖ Sanctions
➢ Expulsion of culpable officer/s
❖ Complaint filed with BLR
➢ 30% of Membership
■ Not mandatory per Verceles v. BLR
➢ Member/s specially concerned

9
ABS-CBN Supervisors Employees Union Members v. ABS-CBN Corp. et al., G.R. No. 106518, March 11, 1999.

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 ❖ Complaint for inspection by SOLE
➢ 20% of the membership to inquire into the financial activities

Grounds for Expulsion

❖ A union member/officer may be expelled from the organization on the following grounds:
➢ For causes specified in the union’s constitution and by-laws (CBL), provided:
■ The same are not arbitrary, unreasonable or contrary to law or public policy
■ The member is accorded a fair hearing
➢ Participation in any irregularity in the approval of a resolution authorizing payment of compensation to union
officers.
Summary of Rights

Rights Specific Right

Financial Rights 1. No arbitrary or excessive fees, fines, etc.;

2. No unauthorized special assessments;

3. No check-off except for dues and mandatory activities

4. Right to be Issued receipts for payments;

5. No unauthorized collection or disbursement of funds;

6. Officers are only entitled to salaries/expenses duly authorized under the Constitution or majority of
members

Right to Information 1. Recording of income and expenditures;

2. Accounting of all organizational funds;

3. Inspection of Books of Accounts/Financial Records;

4. Information on rights/duties of members under the Union Constitution and By-laws, CBA, labor laws
and jurisprudence.

Political Rights 1. Direct election of officers every FIVE (5) years;

2. Participate by secret ballot in policymaking;

3. Right against admission of subversives and engaging in subversive activity;

4. Right against election of persons convicted of crimes involving moral turpitude to elective
administrative posts.

E. Unfair Labor Practice (ULP)

Article 257 (246). Non-abridgment of the right to self-organization. It shall be unlawful for any person to restrain, coerce,
discriminate against or unduly interfere with employees and workers in their exercise of the right to self-organization. Such right
shall include the right to form, join, or assist labor organizations for the purpose of collective bargaining through representatives
of their own choosing and to engage in lawful concerted activities for the same purpose for their mutual aid and protection,
subject to the provisions of Article 264 of this Code. (As amended by Batas Pambansa Bilang 70, May 1, 1980)

Title VI
UNFAIR LABOR PRACTICES
Chapter I
CONCEPT
Article 258 (247). Concept of unfair labor practice and procedure for prosecution thereof. Unfair labor practices violate the
constitutional right of workers and employees to self-organization, are inimical to the legitimate interests of both labor and
management, including their right to bargain collectively and otherwise deal with each other in an atmosphere of freedom and
mutual respect, disrupt industrial peace and hinder the promotion of healthy and stable labor-management relations.
Consequently, unfair labor practices are not only violations of the civil rights of both labor and management but are also criminal
offenses against the State which shall be subject to prosecution and punishment as herein provided.
Subject to the exercise by the President or by the Secretary of Labor and Employment of the powers vested in them by Articles
263 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.
Recovery of civil liability in the administrative proceedings shall bar recovery under the Civil Code.
No criminal prosecution under this Title may be instituted without a final judgment finding that an unfair labor practice was
committed, having been first obtained in the preceding paragraph. During the pendency of such administrative proceeding, the
running of the period of prescription of the criminal offense herein penalized shall be considered interrupted: Provided, however,
that the final judgment in the administrative proceedings shall not be binding in the criminal case nor be considered as evidence
of guilt but merely as proof of compliance of the requirements therein set forth. (As amended by Batas Pambansa Bilang 70, May
1, 1980 and later further amended by Section 19, Republic Act No. 6715, March 21, 1989)
Chapter II
UNFAIR LABOR PRACTICES OF EMPLOYERS
Article 259 (248). Unfair labor practices of employers. It shall be unlawful for an employer to commit any of the following unfair
labor practice:

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 (a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization;
(b) To require as a condition of employment that a person or an employee shall not join a labor organization or shall
withdraw from one to which he belongs;
(c) To contract out services or functions being performed by union members when such will interfere with, restrain or
coerce employees in the exercise of their rights to self-organization;
(d) To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization,
including the giving of financial or other support to it or its organizers or supporters;
(e) To discriminate in regard to wages, hours of work and other terms and conditions of employment in order to encourage
or discourage membership in any labor organization. Nothing in this Code or in any other law shall stop the parties
from requiring membership in a recognized collective bargaining agent as a condition for employment, except those
employees who are already members of another union at the time of the signing of the collective bargaining
agreement. Employees of an appropriate bargaining unit who are not members of the recognized collective bargaining
agent may be assessed a reasonable fee equivalent to the dues and other fees paid by members of the recognized
collective bargaining agent, if such non-union members accept the benefits under the collective bargaining agreement:
Provided, that the individual authorization required under Article 242, paragraph (o) of this Code shall not apply to the
non-members of the recognized collective bargaining agent;
(f) To dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about to
give testimony under this Code;
(g) To violate the duty to bargain collectively as prescribed by this Code;
(h) To pay negotiation or attorney’s fees to the union or its officers or agents as part of the settlement of any issue in
collective bargaining or any other dispute; or
(i) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the officers and agents of corporations, associations or
partnerships who have actually participated in, authorized or ratified unfair labor practices shall be held criminally liable. (As
amended by Batas Pambansa Bilang 130, August 21, 1981)

Chapter III
UNFAIR LABOR PRACTICES OF LABOR ORGANIZATIONS
Article 260 (249). Unfair labor practices of labor organizations. It shall be unfair labor practice for a labor organization, its officers,
agents or representatives:
(a) To restrain or coerce employees in the exercise of their right to self-organization. However, a labor organization shall
have the right to prescribe its own rules with respect to the acquisition or retention of membership;
(b) To cause or attempt to cause an employer to discriminate against an employee, including discrimination against an
employee with respect to whom membership in such organization has been denied or to terminate an employee on any
ground other than the usual terms and conditions under which membership or continuation of membership is made
available to other members;
(c) To violate the duty, or refuse to bargain collectively with the employer, provided it is the representative of the
employees;
(d) To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other things of
value, in the nature of an exaction, for services which are not performed or not to be performed, including the demand
for fee for union negotiations;
(e) To ask for or accept negotiation or attorney’s fees from employers as part of the settlement of any issue in collective
bargaining or any other dispute; or
(f) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the officers, members of governing boards, representatives or
agents or members of labor associations or organizations who have actually participated in, authorized or ratified unfair labor
practices shall be held criminally liable. (As amended by Batas Pambansa Bilang 130, August 21, 1981)

Unfair Labor Practice (ULP)

❖ Defined:
➢ ULP is a violation of the right to self-organization and is inimical to the interest of both labor and management,
disrupts industrial peace, and hinders the promotion of a healthy and stable labor-management relations.
➢ Not only a violation of civil rights, but is also a criminal offense.
■ Prescriptive period for filing ULP with labor tribunals is one (1) year from accrual of cause of action
for criminal prescriptions. Prescription is interrupted during the pendency of administrative
proceedings.
❖ Elements
➢ Existence of an employer-employee relationship;
➢ Act complained of must be expressly mentioned and defined In the Labor Code as a ULP (Articles 259 and 260)

Can Labor Organizations be guilty of Unfair Labor Practice?

❖ YES.
❖ Labor Organizations may commit practices that are unfair to labor, as listed under Article 249.

Acts that constitute ULP

By the Employer (Art. 259) By Labor Organizations (Art. 260)

To interfere with, restrain or coerce employees in the exercise To restrain or coerce employees in the exercise of their right
of their right to self-organization; to self-organization.

However, a labor organization shall have the right to prescribe

its own rules with respect to the acquisition or retention of
membership;

To require as a condition of employment that a person or an
employee shall not join a labor organization or shall
withdraw from one to which he belongs;
To cause or attempt to cause an employer to discriminate
against an employee, including discrimination against an
employee with respect to whom membership in such
organization has been denied or to terminate an employee on
any ground other than the usual terms and conditions under

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 which membership or continuation of membership is made
available to other members;

To contract out services or functions being performed by To violate the duty, or refuse to bargain collectively with the
union members when such will interfere with, restrain or employer, provided it is the representative of the employees;
coerce employees in the exercise of their rights to
self-organization;

To initiate, dominate, assist or otherwise interfere with the
formation or administration of any labor organization,
including the giving of financial or other support to it or its
organizers or supporters;
To cause or attempt to cause an employer to pay or deliver or
agree to pay or deliver any money or other things of value, in
the nature of an exaction, for services which are not
performed or not to be performed, including the demand for
fee for union negotiations;

To discriminate in regard to wages, hours of work and other To ask for or accept negotiation or attorney’s fees from
terms and conditions of employment in order to encourage or employers as part of the settlement of any issue in collective
discourage membership in any labor organization. bargaining or any other dispute; or

To dismiss, discharge or otherwise prejudice or discriminate To violate a collective bargaining agreement.

against an employee for having given or being about to give
testimony under this Code;

To violate the duty to bargain collectively as prescribed by

this Code;

To pay negotiation or attorney’s fees to the union or its

officers or agents as part of the settlement of any issue in
collective bargaining or any other dispute; or

To violate a collective bargaining agreement.

❖ Liabilities
➢ Administrative/Civil
➢ Criminal
■ One year from the commission of the ULP Act
■ Prior final judgment of the ULP in administrative proceeding

Under Article 258, ULP is both civil and a criminal offense. Why?
❖ ULP is also a criminal offense because it offends the people as well.
❖ In the attack against the constitutional rights, the victim of the offense is not just the workers as a body and the
well-meaning employers who value industrial peace, but also the people. It is considered as a public offense which carries
both civil and criminal liabilities.
❖ ULP cases involve violation of public right or policy, to be prosecuted like criminal offenses, whereas a breach of an
obligation of the employer to his employees is only a contractual breach to be dressed like an ordinary contract or
obligation.10

What are the elements of ULP as an offense?

1. Existence of an employer-employee relationship;
2. Act complained of must be expressly mentioned and defined In the Labor Code as a ULP (Articles 248 and 249)

Who has jurisdiction to hear cases involving ULPs?

❖ The Labor Arbiters.
❖ 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. 11
❖ The Labor Arbiters shall resolve such cases within thirty (30) calendar days from the time they are submitted for decision.

ULP Process of Liabilities

Can the judgment in the administrative proceeding be used as evidence in the Criminal Proceeding?
❖ NO.
❖ A judgment against the violator in the administrative proceeding is only a requisite for a criminal proceeding to commence.
❖ The judgment will not be used as evidence of ULP in the criminal case; the criminal charge must be proved independently
from the labor case.

Cases where there is NO ULP present:

❖ General Rules:
➢ NO ULP if there are no Elements of ULP Present:

10
National Labor Union v. Insular-Yebana Tobacco Corp. G.R. No. L-15363, July 31, 1961.
11
Art. 258 (247), Labor Code of the Philippines.

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 ■ Existence of an Employer-Employee relationship
■ Violation under Articles 259 and 260 (Violation of Employer or Union)
➢ The act was not done in bad faith nor violated the employee’s right to self-organization.
➢ The enforcement of the act was not done in a malicious, harsh, oppressive, vindictive nor wanton manner, or out
of malice or spite (and is related to the right to self-organization).
➢ RECALL Police Powers of the State:
■ Lawful Subject
■ Lawful Means

1. Personnel movements are an exercise of valid management prerogative;

➢ Not ULP, generally. Unless, there was bad faith to interfere with the employee’s right to self-organization
➢ It is the prerogative of the company to promote, transfer, or even demote its employees to other positions when
the interests of the company reasonably demand it.
■ It should be done in good faith.

2. Retiring an employee under the CBA;

➢ Similar to above, this is justified under management prerogative and in exercising stipulations that may be
present in the CBA.
■ E.g. exercising the option to retire an employee who rendered 25 years of service or reached 60 y.o.,
under the CBA.
➢ Minimum 22.5 days for every year of service
➢ Nothing wrong to agree with a contributory employment package
➢ Nothing wrong with a better retirement pay
■ Higher than 22.5 days; or lower than the mandatory retirement age of 65

3. Promotion of rank and file to managerial employees;

➢ Managerial employees in supervisory positions are automatically excluded from rank-and-file unions
➢ Unless, the promotion was done out of bad faith (this has to be alleged)
■ However, promotion is generally management prerogative
➢ The presumption is that a promotion is done for the benefit of the employee and not to deprive the union of the
membership of the promoted employee.12

4. Acceptance of voluntary resignation;

➢ Issue is the voluntariness of the act
■ If the act was attended with duress or undue pressure, there is bad faith present and may be ULP, if
done in the context of exercise with their right to self-organization.
➢ If they were pressured to resign due to non-performance and NOT due to union-related acts
■ NOT ULP, but may be illegal dismissal
● No criminal liability, but can be liable for back wages and reinstatement (labor standards)
➢ If resignation was voluntary, nothing wrong; not ULP, no illegal dismissal
■ If there was bad faith, it has to prove that there was intent, proved through overt acts (e-mails,
statements, etc.)

5. Grant of profit-sharing scheme to employees not covered by the CBA;

➢ It is within management prerogative to regulate all aspects of employment, including offering profit-sharing
benefits.
➢ Profit-sharing benefits may be offered to members of a union if their CBA stipulates the same.
■ The members of a union cannot complain if they were given the chance to include a profit-sharing
scheme in the CBA, did not include such profit-sharing scheme, and that the same was instead
offered to non-members of a union.
■ Members of a union can only cry foul if such a scenario was attended with bad faith or violates the
employees’ right to self-organization.

6. Forced Vacation Leave;

➢ Applicable in emergency situations like the existence of an economic crisis.
■ Can be forced vacation leave without pay.
➢ As long as not done with bad faith to go against the right of self-organization.
■ If employees complain of unfair labor practice, they must also allege the non-existence of the
emergency situation.13

7. Implementation of new policies;

➢ If the new policy is necessary and justifiable, it cannot be a ULP

If an employee was promoted on the basis of personal acquaintance instead of merits, is there ULP?
❖ NO.
❖ While the act is “unfair” and may be bad human resource management, it is not ULP.14
❖ REMEMBER: ULP refers only to acts opposed to workers’ right to organize.

END OF PRELIMS

MIDTERMS START
Unfair Labor Practice (ULP) Committed by the Employer (Article 259)

12
Bulletin Publishing Corporation v. Sanchez, G.R. No. 74425, October 7, 1986.
13
Philippine Graphic Arts, Inc. v. NLRC, et al., No. L-80737, September 29, 1988.
14
Philcom Employees Union v. Philippine Global Communications. G.R. No. 144315, July 17, 2006.

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 ❖ Twin requirements:
➢ Injured party is an “employee” under the terms defined by the LCP.
➢ The act charged is a ULP under the prohibitions of Article 259.
■ ULPs should also be related to a worker’s right to organize.

Unfair Labor Practices

ULP Notes: Examples

To interfere with, restrain or

coerce employees in the
exercise of their right to
self-organization;
❖ Interfere - individual solicitation, strike breaking, ❖ Housing benefits
etc. ➢ Threats to evict are ULP
❖ Coerce right - offering incentives to employees ❖ Interrogation to elicit information
not to participate in labor relations activities, ❖ Even prior to union registration
closure, sale in bad faith ➢ E.g. gathering of signatures
❖ NOTE: the employer’s efforts are much more stage.
covert and are generally disguised to escape ❖ Prohibiting of solicitation of union
detection.15 membership
➢ Sir: Any form of prohibition is
interference.

❖ Interrogation to elicit information and identity on active union employees

❖ Interference may be committed even prior to union registration
❖ Prohibiting solicitation of union membership especially when majority of employees live on
company premises;
❖ Interference through reprisal against a spouse or family member;
❖ Violence or intimidation;
❖ Espionage and surveillance; (even if the fruits of the espionage were not used, it is still
“interference” and a ULP)
❖ Letter to individual employees;
❖ Economic inducements;
❖ Strike-breaking;
❖ Acts violative of the right to organize;
❖ Mass lay off;
❖ Lock out/closure;
❖ Sale in bad faith;
➢ It is irrational to suppose that a purchaser of a manufacturing enterprise is not aware
of the labor-management situation in the firm he bought.16

❖ Proof of the employer’s state of mind, unless it is expressed, is often very difficult. However, it may be proven by
circumstantial evidence.17

Totality of Conduct Doctrine

❖ Definition:
➢ Under this doctrine, expressions of opinion of an employer, which, though innocent in themselves, frequently
were held to be culpable because of the circumstances under which they were uttered, the history of the
particular employer’s labor relations or anti-union bias or because of their connection with an established
collateral plan of coercion or interference.
❖ Even if the expressions of an employer are innocent in themselves, if the circumstances under which they were uttered,
the history of labor relations, or anti-union bias, show coercion or interference with the rights of the employees to labor
organization, it can be considered as ULP.
❖ Example:
➢ During a Christmas party, while everyone was having fun, people were drinking, the boss grabbed the
microphone and uttered a speech saying, among others, “union wala pulos, di kamo mag intra.”

To require as a condition of ❖ Yellow Dog Contract:

employment that a person
or an employee shall not
join a labor organization or
shall withdraw from one to
which he belongs;
➢ A promise extracted from workers as a condition of employment that they are not to
belong to, or attempt to foster, a union during their period of employment.
❖ Usual provisions:
➢ A representation by the employee that he is not a member of a labor union
➢ A promise by the employee not to join a labor union
➢ A promise by the employee that, upon joining a labor union, he will quit. 18

To contract out services or ❖ Runaway shop

functions being performed
by union members when
such will interfere with,
restrain or coerce
employees in the exercise
of their rights to
self-organization;
➢ An industrial plant moved by its owners from one location to another to escape union
labor regulations or state laws
➢ 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
❖ Contracting out, itself, is not ULP; it is the ill intention that makes it so.
❖ Read: Complex Electronics Employees Association v. NLRC, G.R. No. 121315, July 19,
1999 as found in p. 333 of Azucena.

To initiate, dominate, assist Forms of company domination:19

or otherwise interfere with ❖ Initiation of the company union idea
the formation or ➢ Outright formation by the employer or his representatives
administration of any labor ➢ Employee formation on outright demand or influence by employer

15
Rothenberg on Labor Relations, p. 367.
16
National Labor Union v. Court of Industrial Relations, 116 SCRA 417 (1982).
17
Rothenberg, p. 369.
18
Teller, Law Governing Labor Disputes and Collective Bargaining, pp. 118-119.
19
Philippine American Cigar & Cigarette Factory Workers Union v. Philippine American Cigar & Cigarette Mfg. Co., Inc. 7 SCRA 375.

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 organization, including the
giving of financial or other
support to it or its
organizers or supporters;
➢ Manergirally motivated formation by employees
❖ Financial support to the union → employer defrays the union expenses or pays the
attorney’s fees of the attorney who drafted the CBL of the union
❖ Employer encouragement and assistance → immediately granting exclusive recognition
to the union as a bargaining agent without determining whether the union represents the
majority of employees
❖ Supervisory assistance → soliciting membership, permitting union activities during
working time or coercing employees to join the union by threats of dismissal or demotion.

To discriminate in regard to INVALID Acts of discrimination:

wages, hours of work and
other terms and conditions
of employment in order to
encourage or discourage
membership in any labor
organization.
❖ Work quota;
❖ Bonus allocation/salary adjustments;
❖ Discipline;
❖ Regularization;
❖ Blacklisting;
❖ Indirect discrimination;
❖ Test of discrimination;
❖ Question of fact; (Discharge due to union activity)
Note: Purpose of acts of discrimination is to influence the union activity of employees.

VALID Acts of Discrimination:

❖ Closed Shop → Only members of the BARGAINING AGENT can be hired and they must
remain union members as a condition of continued employment.
➢ Unlike in (d), this has to be established from the very beginning
❖ Union Shop → Once hired, a person must become a member of the bargaining agent and
must remain so during the period of the CBA for continued employment.
➢ Like the Union Security Clause.
❖ Modified Union Shop → Employees who are not members of the bargaining union upon
execution of the CBA are not required to join the union; only those hired after are required.
❖ Agency Shop → Non-members are not required to join the bargaining union, but they
should pay an AGENCY FEE to the union as a condition for continued employment.
❖ Maintenance of Membership Clause → Requires members of the bargaining union to
maintain their membership therein for continued employment. Non-union members are not
required to join.
❖ Preferential Hiring Agreement → Preference in hiring is given to members of the
bargaining union who are thereafter required to maintain their membership for continued
employment.
❖ To determine validity, note the Equal Protection Clause. The agreements must apply to the
classes identified by the employer, without discrimination, interference, or domination.
❖ P.345-346 of Azucena.

To dismiss, discharge or
otherwise prejudice or
discriminate against an
employee for having given
or being about to give
testimony under this Code;
❖ A protection to shield the workers’ right to self-organization from indirect assault by the
employer.
❖ Does this apply to a situation where the employer retaliates against an employee who
refused to testify in favor of the employer?
➢ YES. it is analogous to the prohibition under Art. 259(f). 20

To violate the duty to bargain collectively as prescribed by this Code;

To pay negotiation or ❖ The employer cannot pay the union or any of its officers or agents any negotiation fee or
attorney’s fees to the union attorney’s fee as part of settlement in collective bargaining or any labor dispute.
or its officers or agents as ❖ It is akin to bribery.
part of the settlement of
any issue in collective
bargaining or any other
dispute; or

To violate a collective bargaining agreement.

Examples of Employer’s acts that may be ULP

Allowed (NOT ULP)

Majority of the employees live on the premises of the employer and cannot be reached by union organizers. Employer permits
non-employee union organizers to enter premises and solicit employees to join a union.21

Merely interrogating an employee as to his or her union affiliation. Circumstances do not show ULP.22

Illegal dismissal was dictated by anti-union motives. (remedy is action for reinstatement with backwages and damages)23

An honest closing of one’s plant.

Classifying jobs and granting varied levels of pay or benefits package under management practice

Company telling the strikers returning to work not to destroy company property and not to commit acts of reprisal against the

20
Mabeza v. NLRC, G.R. No. 118506, April 18, 1997.
21
Fafnir Bearing Co. v. NLRB, 362 F 2d7 16.
22
Phil. Steam Navigation v. Phil. Marine Officers Guild, 15 SCRA 174.
23
AHS/Philippine Employees Union v. NLRC, G.R. No. 87321, March 31, 1987.

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 union members who did not participate in the strike, under the act of self-preservation and maintenance of peace and order.24

An employee, who frequently and persistently filed grievances against the company, was discharged for absenteeism and
lateness based on prior sufficient warnings. The employer presented better evidence.

Disallowed (Unfair Labor Practice)

A rule on prohibiting solicitation of union membership in company property applying to non-working time and working time 25

Persistent interrogation of employees to elicit information as to what happened in union meetings and the identities of active
union employees.

Discharging a supervisor because he refuses to commit unfair labor practices.26

Dismissal of union members due to refusal to give up membership, under pretext of retrenchment

Dismissal due to refusal over a period of years to give salary adjustments according to the improved salary scales in CBAs

Dismissal of an old employee allegedly due to inefficiency, but because she joined a union and engaged in union activities.

Disallowing employee’s request for permission for time out to attend the hearing of their petition before the med-arbiter.

Coercing employees by directing two individuals to his office at gun point on the day of representation election after the
individuals had informed the employer that they were on the premises to vote in the election.27

Employer threatened employees favoring the union with force or violence

Employer warning his employees favoring a union through a union leaflet.28

Employer asked the union’s recruiter to surrender the union affiliation forms, threatening him with bodily harm.29

Employer hired employees to provoke fights against two employees. The fight was to create a lawful cause for their dismissal.

Spying upon employees by over-eager employers

Employer using one or a small group of employees or other agents, inspired by profit, opportunism, vengeance, etc., for the
purpose of spying upon fellow employees and reporting back to the employer.

Employer’s announcement of benefits prior to a representation election, to induce employees to vote against a union.30

Offering a Christmas bonus to all “loyal” employees shortly after the union requested to bargain with the employer

Giving wage increases to mollify the employees after the employer refused to bargain with the union

Promise of benefits in return for the strikers’ abandonment of their strike

Capital reduction efforts to justify the mass lay-off of its employees especially union members

Dismissing teachers despite their permanent status because the president of the school feared that if their contracts were
renewed, there would be a strike in the school the following semester.31

Lock out, actual or threatened, as a means of dissuading the employees from exercising their rights.

Cessation of operations, actual or threatened, if it is, directly or indirectly, expressly or by innuendo, calculated or employed to
interfere with the employees’ rights.

Employer who closed his business to put an end to a union’s activities, making no effort to allow the employees’ attempt to
exercise their right to self-organization and collective bargaining.32

Threats of discharge and closing of the plant made by supervisors during a union campaign justified a finding of unlawful
interference by the employer, despite the lack of any express employer sanction or the absence of an organized program of
coercion.33

Where employees have, for several years attempted to organize a union, and finally succeeded. Then, ten days later, without any
valid notice, all of them were placed on forced leave, allegedly because of lack of quota.34

Dismissal need not entirely and exclusively be motivated by the union’s activities or affiliations. It is enough that the discrimination
was a contributing factor, if the basic inspiration for the act of the employer is derived from the affiliation or activities of the union.

Threatening the union members to resign from the union, and to withdraw the claims filed before the CIR, then closing the factory

24
Pagkakaisang Itinataguyod ng mga Manggagawa sa Ang Tibay, et al. v. Ang Tibay, et al. L-22273, May 16, 1967.
25
Samahan ng mga Manggagawa sa Bandolino-LMLC, et al. v. NLRC, Bandolino Shoe Corp, G.R. No. 125195, July 17, 1997.
26
Jackson Tile Mfg. Co., 12 NLRB 764.
27
Holly Hill Lumber Co. v. NLRB, 56 LC 19, 513.
28
NLRB v. Eastern Die Co., 340 F. 2d 607.
29
Velez v. Watchmen’s Union, 107 Phil. 689.
30
Re Hancock Fabrick Outlet, 175 NLRB No. 42.
31
Rizal Memorial Colleges Faculty Union, et al. v. NLRC, G.R. Nos. 59012-13, October 12, 1989.
32
Sy Chie Junk Shop v. Federacion Obrero de la Industria, G.R. No. 30964, May 9, 1988.
33
Irving Air Chute Co. v. NLR?B, 52 LC 23, 406.
34
Me-Shurn Corporation and Sammy Chou v. Me-Shurn Workers Union-FSM and Rosalinda Cruz, G.R. No. 156292, January 11, 2005.

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 and selling the same to someone. When that “new” factory opens, the employees who were part of the union were not
readmitted.35

Dismissal of union members as a result of the sale of the company, when such members had just finished finalizing a CBA.36

Closure of the company, but the same company reappears under a new name, but engages in the same business, or is owned by
the same people, and the closure is to defeat the workers’ organizational rights.

Contract provisions whereby an employee agrees that during the period of his employment, he will not become a member of a
labor union.37

Employer contracting out of work where he is motivated by a desire to prevent his employees from organizing and selecting a
collective bargaining representative, rid himself of union men, or escape his statutory duty to collectively bargain with
employees.38

Removal of a plant for business reasons, but the relocation is hastened by anti-union motivation

Key officials of a company forcing employees from one union to join another union under pain of dismissal if they refuse.

Employer aided a union by assisting its attempt to secure authorization cards from employees

Discrimination for the purpose of influencing the union activity of employees

Increase of sales quota to the union president and vice-president to 400% and 300%, respectively, as opposed to the other field
representatives whose increase was at 98% only, with the company failing to give a valid explanation for the difference.

Manila Hotel allocated 50% of its net profits to its employees as Christmas Bonus. Pines Hotel and Taal Vista were only allocated
5% and 25%, respectively. There is no union at the Manila Hotel. Circumstances constitute discrimination.

While business conditions justified a layoff of employees, only unionists were permanently dismissed while nonunionists were not

Refusing to regularize unionized employees.

Blacklisting persons to prevent employment of employees for union activities

Dismissal of an employee’s brother because said employee will not withdraw the charges he filed against the company.

Discharge of an employee due to the union activities of the wife (or vice versa)

There exists a lawful cause for discharge, but the reason for discharging the employee was due to union activities.

Prohibition of employees from exercising their rights, on pain of discharge, leading to the eventual quitting of the employee due to
the prohibition. (Constructive Discharge)

Summary of ULP Acts of an employer: (BC YT CUPID; “busy white cupid)

1. Interference
2. “Yellow dog” condition
3. Contracting out
4. Company Unionism
5. Discrimination for or against union membership
6. Discrimination because of Testimony
7. Violation of duty to Bargain
8. Paid negotiation
9. Violation of CBA

35
Moncada Bijon Factory v. CIR and Moncada United Workers’ Union MUWU, G.R. No. L-18065, March 30, 1962.
36
Cruz v. PAFLU, G.R. No. L-26519, October 29, 1971.
37
31 Am. Jur., Sec. 62, p. 863.
38

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Reliefs in ULP Cases:
❖ Cease and Desist Order
❖ Affirmative Order
❖ Order to Bargain
❖ Disestablishment

Box questions:
What acts are considered unfair labor practice by an employer?
Art. 248 of the Labor Code enumerated unfair labor practices of employers.
❖ To interfere with, restrain or coerce employees in the exercise of their right to self-organization.
❖ To require as a condition of employment that a person or an employee shall not join a labor organization or shall
withdraw from one to which he belongs.
❖ To contract out services or functions being performed by union members when such will interfere with, restrain or
coerce employees in the exercise of their right to self-organization;
❖ To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization,
including the giving of financial or other support to it or its organizers or supporters;
❖ To discriminate in regard to wages, hours of work, and other terms and conditions of employment in order to encourage
or discourage membership in any labor organization.
❖ To dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about to
give testimony under this Code;
❖ To violate the duty to bargain collectively as prescribed by this Code;
❖ To pay negotiation or attorney’s fees to the union or its officers or agents as part of the settlement of any issue in
collective bargaining or any other dispute;
❖ To violate a collective bargaining agreement.

What is the discrimination that may constitute ULP?

❖ To constitute an unfair labor practice, the discrimination committed by the employer must be in regard to the ‘hire or
tenure of employment or any term or condition of employment to encourage or discourage membership in any labor
organization.”

Is it ULP for an employer to contract out jobs being done by union members?
❖ No. It is not ULP for an employer to contract out jobs being done by union members UNLESS such act will interfere
with, restrain, or coerce employees in the exercise of their right to self-organization. Hence, contracting out by itself is
not ULP. It is the ill- intention that makes it so.

Is it ULP for an employer to favour a particular union?

❖ Yes, if the act of favouring a particular union amounts to domination of a labor union such as in the following:
❖ Initiation of company union idea; giving financial support to the union; employer encouragement and assistance; and
supervisory assistance.

Is it lawful to compel an employee to join a union?

❖ No. There is a form of encouragement of union membership which is not considered ULP. This is where the
management and union enters into a collective bargaining agreement containing a union security clause. A union
security clause essentially requires membership in the union so that an employee may retain his job and the union’s
existence is assured. It is compulsory union membership whose objective is to assure continued existence of the
union. In a sense, there is discrimination when certain employees are obliged to join a particular union. But it is
discrimination favouring unionism; it is a valid kind of “discrimination.”

Unfair Labor Practice (ULP) Committed by the Union (Article 259)

ULP Notes Example

To restrain or coerce employees in
the exercise of their right to
self-organization.
However, a labor organization shall
have the right to prescribe its own
rules with respect to the acquisition
or retention of membership;
❖ Labor Organizations can only commit ULPs based on restraint or coercion
❖ Interference by unions is not ULP
➢ A labor organization may interfere in the employees’ right to
self-organization as long as the interference does not amount to restraint or
coercion.
❖ Restraint or coercion
➢ Restraining or coercing an employee in the exercise of his right to refuse to
participate in or recognize a strike.

To cause or attempt to cause an ❖ This section refers to union-induced discrimination

employer to discriminate against an
employee, including discrimination
against an employee with respect to
whom membership in such
organization has been denied or to
terminate an employee on any ground
other than the usual terms and
conditions under which membership
or continuation of membership is
made available to other members;
❖ The law forbids a union’s attempts to cause an employer to grant advantages for
union members over nonmembers, for union members in good standing over
suspended or expelled members.
❖ Forbidden discrimination may refer to terms of:
➢ Hiring or firing, in layoff, in seniority, or in benefits.
❖ XPN: Arbitrary use of Union Security Clause:
➢ Salunga resigned from the union due to disappointing inaction
➢ The union requested dismissal of Salunga through closed-shop provisions
➢ Salunga withdrew his resignation
➢ The union denied the withdrawal and urged the company to dismiss him.
➢ The dismissal is illegal. Labor Union committed ULP.
➢ Labor unions are not entitled to arbitrarily exclude qualified applicants for
membership.
➢ Here, the company did not commit ULP because they complied with the
closed-shop agreement.
➢ Here, the LO may be ordered by the court to shoulder the backwages
❖ XPN: Not disloyalty to ask help from another union

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 ➢ Under the act of self-preservation, merely asking for help from another
union is not tantamount to disloyalty and cannot be met with expulsion.
❖ NOTE: The company usually has no liability if the dismissal and/or ULP was
committed or demanded by the union and the company merely complied.

To violate the duty, or refuse to ❖ This section refers to refusal to bargain

bargain collectively with the ❖ Unions should approach the bargaining table with the same attitude of
employer, provided it is the willingness to agree as the law requires of management.
representative of the employees; ❖ A union violates this duty by entering negotiations with a fixed purpose of not
reaching an agreement or signing a contract.39

To cause or attempt to cause an ❖ Featherbedding

employer to pay or deliver or agree to Refers to the practice of the Union or its agents in causing or attempting to cause an
pay or deliver any money or other employer to pay or deliver or agree to pay or deliver money or other things of value,
things of value, in the nature of an in the nature of an exaction, for services which are not performed or not to be
exaction, for services which are not performed.
performed or not to be performed,
including the demand for fee for
union negotiations;

To ask for or accept negotiation or ❖ Asking for or accepting some “fee” from the employer as part of the CBA or
attorney’s fees from employers as dispute settlement.
part of the settlement of any issue in
collective bargaining or any other
dispute; or

To violate a collective bargaining agreement.

Box questions:
What acts are considered ULP by a Labor Organization?
❖ Art. 249. Unfair Labor practices of labor organizations. It shall be unfair labor practice for a labor organization, its
officers, agents or representatives:
❖ a.) To restrain or coerce employees in the exercise of their right to self-organization. However, a labor organization shall
have the right to prescribe its own rules with respect to the acquisition or retention of membership;
❖ b.) To cause or attempt to cause an employer to discriminate against an employee, including discrimination against an
employee with respect to whom membership in such organization has been denied or to terminate an employee on any
ground other than the usual terms and conditions under which membership or continuation of membership is made
available to other members;
❖ c. ) To violate the duty, or refuse to bargain collectively with the employer, provided it is the representative of the
employees;
❖ d. ) To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other things of
value, in the nature of an exaction, for services which are not performed or not to be performed, including the demand
for fee for union negotiations;
❖ e .) To ask for or accept negotiation or attorney’s fees from employers as part of the settlement of any issue in collective
bargaining or any other dispute; or
❖ f.) To violate a collective bargaining agreement

May a union charge with ULP another union in the same enterprise?
❖ No, Unfair Labor Practices can only be invoked by an employee against an employer and and by a union member
against the labor union when such employer or labor union violates the Constitutional right of workers or Employees to
self-organization.

May a union member charge with ULP his own union?

❖ Yes. Labor Union can be charged with ULP by a union member where in a case such Union arbitrarily exclude qualified
applicants for membership, and a closed-shop provision would not justify the employer in discharging, or a union in
insisting upon the discharge of, an employee whom the union thus refuses to admit to membership, without any
reasonable ground therefor.

What is featherbedding? Is it featherbedding to object to the abolition of certain jobs or positions in the company?
❖ Article 249(d) To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other
things of value, in the nature of an exaction, for services which are not performed or not to be performed, including the
demand for fee for union negotiations; refers to “featherbedding”, a term given to employee practices which create or
spread employment by ‘unnecessarily’ maintaining or increasing the number of employees used,or the amount of time
consumed, to work on a particular job.
❖ No. Most of these practices stem from a desire on the part of employees for job security in the face of technological
improvements or in the face of employer subcontracting. However, most courts at common law found these practices to
be economically wasteful and without any legitimate employee justification.

F. Collective Bargaining
Title VII
COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENTS

Article 261 (250). Procedure in collective bargaining. The following procedures shall be observed in collective bargaining:
(a) When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of
its proposals. The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such

39
48 Am. Jur. 2d 1200, p. 954.

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 notice;
(b) Should differences arise on the basis of such notice and reply, either party may request for a conference which shall
begin not later than ten (10) calendar days from the date of request.
(c) If the dispute is not settled, the Board shall intervene upon request of either or both parties or at its own initiative and
immediately call the parties to conciliation meetings. The Board shall have the power to issue subpoenas requiring the
attendance of the parties to such meetings. It shall be the duty of the parties to participate fully and promptly in the
conciliation meetings the Board may call;
(d) During the conciliation proceedings in the Board, the parties are prohibited from doing any act which may disrupt or
impede the early settlement of the disputes; and
(e) The Board shall exert all efforts to settle disputes amicably and encourage the parties to submit their case to a
voluntary arbitrator.40

Article 262 (251). Duty to bargain collectively in the absence of collective bargaining agreements. In the absence of an
agreement or other voluntary arrangement providing for a more expeditious manner of collective bargaining, it shall be the duty of
employer and the representatives of the employees to bargain collectively in accordance with the provisions of this Code.

Article. 252. Meaning of duty to bargain collectively. The duty to bargain collectively means the performance of a mutual
obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect
to wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or
questions arising under such agreement and executing a contract incorporating such agreements if requested by either party but
such duty does not compel any party to agree to a proposal or to make any concession.

Article. 253. Duty to bargain collectively when there exists a collective bargaining agreement. When there is a collective
bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate nor modify such
agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty
(60) days prior to its expiration date. 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. 253-A. Terms of a collective bargaining agreement. Any Collective Bargaining Agreement that the parties may enter
into shall, insofar as the representation aspect is concerned, be for a term of five (5) years. No petition questioning the majority
status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the Department
of Labor and Employment outside of the sixty-day period immediately before the date of expiry of such five-year term of the
Collective Bargaining Agreement. All other provisions of the Collective Bargaining Agreement shall be renegotiated not later than
three (3) years after its execution. Any agreement on such other provisions of the Collective Bargaining Agreement entered into
within six (6) months from the date of expiry of the term of such other provisions as fixed in such Collective Bargaining
Agreement, shall retroact to the day immediately following such date. If any such agreement is entered into beyond six months,
the parties shall agree on the duration of retroactivity thereof. In case of a deadlock in the renegotiation of the Collective
Bargaining Agreement, the parties may exercise their rights under this Code. 41

Art. 254. Injunction prohibited. No temporary or permanent injunction or restraining order in any case involving or growing out
of labor disputes shall be issued by any court or other entity, except as otherwise provided in Articles 218 and 264 of this Code. 42

Collective Bargaining and Administration of Agreements

Employment Contract v. Collective Bargaining Agreement

Employment Contract Collective Bargaining Agreement

Establishes the Employer-Employee (ER-EE) Relationship Presupposes the existence of ER-EE Relationship

Between the ER and an individual EE Between the ER and a Union in representation of a group of
workers

40
(As amended by Section 20, Republic Act No. 6715, March 21, 1989)
41
(As amended by Section 21, Republic Act No. 6715, March 21, 1989)
42
(As amended by Batas Pambansa Bilang 227, June 1, 1982)

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 Ends or terminates when the period fixed therein expires Continues to be binding and effective as long as no new CBA
is entered into

Collective Bargaining Process

Concept of Collective Bargaining Process (CBP)

❖ Definition:
➢ A democratic framework to stabilize the relation between labor and management to create a climate of sound
and stable industrial peace.
➢ It is a mutual responsibility of the employer and the union and is their legal obligation.43
❖ Collective Bargaining Process:
➢ Negotiation over wages, benefits, terms and conditions of employment
➢ Execution of CBA
➢ interpretation/Application of CBA
➢ Adjustment of Grievance/Voluntary Arbitration
❖ Collective Bargaining Agreement (CBA), defined:
➢ A contract executed upon request of either the employer or the exclusive bargaining representative of the
employees incorporating the agreement reached after negotiations with respect to wages, hours of work and all
other terms and conditions of employment, including proposals for adjusting any grievances or questions under
such agreement.

Basic Components of the CBP

❖ Employer
❖ Exclusive Bargaining Representative (EBR)
➢ Refers to a legitimate labor organization or any officer or agent of such organization, whether or not employed
by the employer.
❖ Collective Bargaining Unit (CBU)
❖ Collective Bargaining Agreement (CBA)
❖ Grievance Machinery

Jurisdictional Preconditions
❖ Majority Status/Bargaining Agent
❖ Proof of Majority Representation
❖ Demand to Bargain
Timeline of Bargaining

43
Loy v. NLRC, G.R. No. 54334, January 22, 1986.

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 Stages

Multi-employer bargaining
❖ Legitimate labor organizations (LLOs) and employers may agree in writing to come together for collective bargaining
purposes under the following conditions:
➢ The LLOs must be incumbent exclusive bargaining agents;
➢ The employers must have counterpart LLOs who are incumbent bargaining agents; and
➢ The LLOs of employer units must consent to multi-employer bargaining.
❖ Pre-requisites: LLOs to have a written agreement containing the following:
➢ Names of the labor unions who desire to avail of multi-employer bargaining;
➢ Names of each labor union in the employer unit;
➢ Statement that each of the labor unions are the incumbent exclusive bargaining agents of their respective
employer units;
➢ Duration of the collective bargaining agreements, if any, between each labor organization and their respective
employers.

Remedies in case of Deadlock

❖ Call upon the National Conciliation and Mediation Board (Board) to assist them in arriving at an amicable settlement;
❖ Submit the matter for compulsory arbitration by filing a complaint with the NLRC;
❖ Submit the matter for resolution by a voluntary arbitrator; or
❖ Declare a strike or lockout.

Duty to bargain collectively (Art. 263)

❖ Mutual obligation of the parties
❖ To meet and convene
➢ Promptly, expeditiously, in good faith
❖ Negotiating an agreement with respect to:
➢ Wages,
➢ Hours of work
➢ All other terms and conditions
➢ Adjustment of grievances or questions on execution

❖ Elements of the Duty to Bargain Collectively

❖ No duty to Bargain with Minority

Essential elements of the duty to bargain collectively (Art. 263)

❖ A legitimate labor organization,
❖ Composed employees of the supposed employer, and
❖ Chosen or designated by the majority of the employees within the bargaining unit as their CBR.

Duty to bargain collectively with existing CBA (Art. 264)

❖ After the execution of the CBA, the duty to bargain collectively obliges the parties:
➢ Not to terminate or modify the CBA during its lifetime;
➢ To ask for modification of the CBA only during the 60-day period prior to its expiration date; and
➢ To observe the terms and conditions of the CBA during the 60-day period and until a new agreement is reached

❖ Freedom Period
➢ The 60-day period prior to the expiration of the collective bargaining agreement (CBA)
➢ It is called the freedom period because it is the time when the bargaining agent can validly serve notice to
renegotiate the existing CBA
➢ It is the time when a union member can validly resign from the union and the time for a local union to
disaffiliate from its mother federation without being subjected to sanctions.
➢ It is the time for challenging the majority status of the incumbent collective bargaining agent through a
petition for certification election (CE).

❖ Hold-Over Principle

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 ➢ In the absence of a new CBA, the parties must maintain status quo and must continue in full force and effect the
terms and conditions of the existing agreement until a new agreement is reached.

Terms of a Collective Bargaining Agreement (Art. 265)

❖ CBA shall have a representation aspect for a term of five (5) years
➢ No petition questioning the majority status of the incumbent bargaining agent shall be entertained
➢ No certification election shall be conducted
➢ XPN: Freedom period (60-day period immediately before expiry of 5-year term of CBA)
❖ All other provisions of the CBA shall be renegotiated not later than three (3) years after execution
❖ Agreements entered into within six months from the date of expiry term, will retroact to the day immediately following such
date.
❖ Agreements entered into beyond six months, parties shall agree on the duration of effectivity thereof.

Collective Bargaining Agreement

❖ Definition
➢ A contract by and between an employer and the collective bargaining representative of the employees within an
appropriate bargaining unit, concerning wages, hours of work, and all other terms and conditions of employment
➢ Law of the plant
➢ Purpose: industrial peace

❖ Coverage
➢ Applies to and is binding on all employees of the CBU, whether union members or not.
➢ According benefits under the CBA only to union members without any valid reason would constitute undue
discrimination against non-members.
❖ Construction
➢ It is impressed with public interest
➢ It must be construed liberally.

❖ Term
➢ Representation aspect → 5 years
➢ Majority status cannot be questioned or challenged except during the Freedom Period

❖ Renegotiation within the 5-year period

➢ Not later than 3 years after the CBA’s execution
➢ Applies to all provisions of the CBA, whether economic or non-economic
❖ Ratification of the CBA
➢ Upon the approval of the majority of employees covered by the bargaining unit.
➢ No ratification, no registration
❖ Ten-year Suspension of CBA is valid
➢ Under exceptional conditions, parties can agree to suspend their CBA.
➢ The right to free collective bargaining includes the right to suspend it.

No-Injunction Policy (Art. 265)

❖ GEN RULE: Injunction is not favored in law considering that it generally has not proved to be an effective means of
settling labor disputes.
➢ Usual means of settling disputes includes negotiation, compromise, mediation, arbitration
❖ XPN: injunctions may be issued only in cases of extreme necessity based on legal grounds after due
considerations/hearing and when all efforts at conciliation are exhausted.

When injunction in Labor Disputes may issue

❖ In case of actual or threatened commission of any prohibited or unlawful acts, or when necessary to require the
performance of a particular act
➢ And if not restrained, may cause grave or irreparable damage to any party
❖ In case of a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to national interest.

Who may issue injunction in labor disputes?

❖ NLRC
➢ In ordinary disputes, and other cases arising from violation of Art. 264
❖ Secretary of Labor and Employment
➢ In labor dispute causing or likely to cause a strike or lockout in an industry indispensable to national interest
❖ NOT ordinary courts

Exclusive bargaining representation and workers’ participation in policy and decision-making (Art. 266)
❖ Right of employees to participate in Policy and Decision-Making
➢ Such right extends only to matters that directly affect their rights, benefits and welfare
❖ Right can be exercised through a labor management council to be formed jointly by the ER and the EEs
➢ Unionized establishments → EE’s representatives to council shall shall be nominated by the EBR
➢ Non-unionized establishments → EE’s representatives to council shall be elected directly by the EEs at large

Box questions:
How is collective bargaining done? May the parties devise their own procedure? (See Art.261)
❖ The mechanics of collective bargaining are set in motion only when the following jurisdictional preconditions are
present, namely:
(1) possession of the status of majority representation of the employees' representative in accordance with any of the
means of selection or designation provided for by the Labor Code;
(2) proof of majority representation;
(3) a demand to bargain under A rt 250, par.[a] of the New Labor Code. If the three jurisdictional preconditions are present,
the collective bargaining should begin within 12 months following the determination and certification of the employees'
exclusive bargaining representative.

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 ❖ Yes. Art 251 provides, "In the absence of an agreement or other voluntary arrangement providing for a more
expeditious manner of collective bargaining, it shall be the duty of the employer and the representatives o f the
employees to bargain collectively in accordance with the provisions of this Code."

The prevailing practice is single enterprise bargaining. Is multi-employer bargaining allowed?

❖ Yes. Multi-employer bargaining unit is particularly advantageous to both sides in industries composed o f many small,
financially weak employers.

What are the elements of the duty to bargain, violation of which may constitute ULP?
❖ There are four essential elements:
❖ Legal: collective bargaining is a process of negotiation an agreement
❖ Economic: its contents specify the terms and conditions of employment (e.g. salary/wage increase, benefits, etc.)
❖ Political: the agreement is a product of a negotiation between labor and management
❖ Moral: it involves a system of shared responsibility and decision-making
❖ Forms of ULP:
➢ Failure or refusal to meet and convene
➢ Evading the mandatory subjects of bargaining
➢ Bad faith in bargaining including failure or refusal to execute the collective agreement, if requested
➢ Gross violation of the CBA

What are the compulsory and optional subjects of bargaining?

❖ The mandatory subjects of collective bargaining are wages, hours of work and all other terms and conditions of
employment. Those matters outside the terms and conditions of employment are not within the employer's duty to
bargain, such other matters he is free to bargain or not to bargain.

What are the requirements of valid ratification of a CBA?

❖ The agreement negotiated by the employees' bargaining agent should be ratified or approved by the majority of all the
workers in the bargaining unit. The posting of the CBA in two conspicuous places for five days is also required.

When does a CBA take effect? Up to when is it effective? May its life be extended by non-renewal or by mutual
agreement?
❖ It has been held that a CBA was effective on ratification by union members.
❖ RA No. 6715 was introduced through Art. 253-A a significant change in setting the durations or terms of a CBA at five
years for the "representation aspect" and not more than three years for "all other provisions".
❖ Art. 253 provides, 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. 255. Exclusive bargaining representation and workers’ participation in policy and decision-making. The labor
organization designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be the
exclusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual employee
or group of employees shall have the right at any time to present grievances to their employer.

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. For this purpose, workers
and employers may form labor-management councils: Provided, That the representatives of the workers in such
labor-management councils shall be elected by at least the majority of all employees in said establishment.44

Article. 256. Representation issue in organized establishments. In organized establishments, when a verified petition
questioning the majority status of the incumbent bargaining agent is filed before the Department of Labor and Employment within
the sixty-day period before the expiration of the collective bargaining agreement, the Med-Arbiter shall automatically order an
election by secret ballot when the verified petition is supported by the written consent of at least twenty-five percent (25%) of all
the employees in the bargaining unit to ascertain the will of the employees in the appropriate bargaining unit. To have a valid
election, at least a majority of all eligible voters in the unit must have cast their votes. The labor union receiving the majority of the
valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the unit. When an election which provides
for three or more choices results in no choice receiving a majority of the valid votes cast, a run-off election shall be conducted
between the labor unions receiving the two highest number of votes: Provided, that the total number of votes for all contending
unions is at least fifty percent (50%) of the number of votes cast.

At the expiration of the freedom period, the employer shall continue to recognize the majority status of the incumbent bargaining
agent where no petition for certification election is filed.45

Article. 257. Petitions in unorganized establishments. In any establishment where there is no certified bargaining agent, a
certification election shall automatically be conducted by the Med-Arbiter upon the filing of a petition by a legitimate labor
organization.46

Article. 258. When an employer may file petition. When requested to bargain collectively, an employer may petition the Bureau
for an election. If there is no existing certified collective bargaining agreement in the unit, the Bureau shall, after hearing, order a
certification election.

All certification cases shall be decided within twenty (20) working days.

The Bureau shall conduct a certification election within twenty (20) days in accordance with the rules and regulations prescribed
by the Secretary of Labor.

44
(As amended by Section 22, Republic Act No. 6715, March 21, 1989)
45
(As amended by Section 23, Republic Act No. 6715, March 21, 1989)
46
(As amended by Section 24, Republic Act No. 6715, March 21, 1989)

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 Article. 259. Appeal from certification election orders. Any party to an election may appeal the order or results of the election
as determined by the Med-Arbiter directly to the Secretary of Labor and Employment on the ground that the rules and regulations
or parts thereof established by the Secretary of Labor and Employment for the conduct of the election have been violated. Such
appeal shall be decided within fifteen (15) calendar days.47

Bargaining Unit
❖ Bargaining Unit, defined:
➢ A group of employees of a given employer comprised of all or less than of the entire body of employees,
consistent with equity to the employer, indicated to be best suited to serve the reciprocal rights and duties of the
parties under the collective bargaining provisions of the law.
➢ There can only be one exclusive bargaining agent in a bargaining unit even if there is more than one union
therein.
❖ RECALL:

Collective bargaining unit (CBU)

❖ Groups of jobs or group of employees sharing mutual interests
❖ Comprised of all or less than the entire body of employees in the employer unit
❖ Specific occupational/geographical groupings in the employer unit
➢ E.g. Western Visayas Chapter and Mindanao Chapter
➢ E.g. Iloilo Plant
❖ Voting group to select the collective bargaining agent (CBA)
❖ There may be two or more unions in a CBU
➢ Consequence: mode of selection of bargaining representative cannot be voluntary recognition. There has to be
a Certification Election
❖ Can be possible to have one employer, one CBU

Principles or factors in determining the appropriate bargaining:

Factor Definition Notes

Single Employer One employer, One CBU ❖ Regardless of positions, status, interests
Unit ❖ Sir: para hapos ah!

Substantial Mutual Similarity of employment status, duties and
Interests responsibilities, similar compensation
scheme and working conditions;
❖ The employees whose interests are similar in terms
of compensation, job description, etc, may be
grouped
❖ To be easier to negotiate
❖ To avoid complications with bargaining agreement
❖ E.g. Teachers and Faculty, non-teaching
personnel

Globe Doctrine Will or desire of the employees to be joined ❖ The standard is not the position or description, but
together in one bargaining unit; the free will of the employees.
❖ If they want to, the employer cannot question it.
❖ “Choose your own groupmate”

Collective Prior collective bargaining history or affinity ❖ History

Bargaining History of the employees;

Employment Status Category or kind of employment. ❖ Regulars, contractual (not probationary)

CASE: NAFTU v. Mainit Lumber, G.R. No. 79526, December 21, 1990, Paras48

47
(As amended by Section 25, Republic Act No. 6715, March 21, 1989)
48
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 FACTS:
❖ January 28, 1985: private respondent Mainit Lumber Development Company Workers Union-United Lumber and
General Workers of the Philippines, MALDECOWU-ULGWP (ULGWP), a legitimate labor organization duly registered
with the Ministry of Labor and Employment under Registry No. 2944-IP, filed with Regional Office No. 10, Ministry of
Labor and Employment at Cagayan de Oro City, a petition for certification election to determine the sole and
exclusive collective bargaining representative among the rank and file workers/employees of Mainit Lumber
Development Company Inc. (MALDECO), a duly organized, registered and existing corporation engaged in the
business of logging and saw-mill operations employing approximately 136 rank and file employees/workers.
❖ April 11, 1985: Med-Arbiter granted the petition for certification election.
❖ April 26, 1985: NAFTU appealed the decision of the Med-Arbiter on the ground that MALDECO was composed of two
(2) bargaining units, the Sawmill Division and the Logging Division, but both the petition and decision treated these
separate and distinct units only as one.
❖ April 28, 1986: the Bureau of Labor Relations affirmed the decision. Thus, a certification election was held on separate
dates at the employer's sawmill division and logging area respectively. In said election MALDECOWU-ULGWP
garnered a total vote of 146 while NAFTU garnered a total of 2 votes.
❖ July 26, 1986: NAFTU filed an election protest alleging massive vote buying accompanied with grave and serious
threat of force and intimidation on the lives of 25 applicants.
❖ September 24, 1986: the Med-Arbiter dismissed the election protest.
❖ October 10, 1986: petitioner NAFTU appealed the order of the Med-Arbiter to the Bureau of Labor Relations in Manila
which denied the appeal and the two motions for reconsideration. Hence, this Petition for Certiorari to annul and set
aside the Resolution.
ISSUE: Whether or not it was right for the med-arbiter to change the employer from two separate bargaining units to only one.

HELD: YES.
❖ It is important to remember that out of two hundred and one (201) employees of MALDECO, one hundred seventy five
(175) consented and supported the petition for certification election, thereby confirming their desire for one bargaining
representative.
❖ Moreover, while the existence of a bargaining history is a factor that may be reckoned with in determining the
appropriate bargaining unit, the same is not decisive or conclusive.
❖ The basic test of an asserted bargaining unit's acceptability is whether or not it is fundamentally the
combination which will best assure to all employees the exercise of their collective bargaining rights.

CASE: PLASLU V. CIR, G.R. No. L-14656, November 29, 1960, Gutierrez David49

FACTS:
❖ Petitioner PLASLU filed petition to review on certiorari an order of the Court of Industrial Relations certifying the Allied
Workers’ Association of the Philippines as the sole collective bargaining representative of the employees of the San
Carlos Milling, Co., Inc.
❖ Prior the certification, a certification election was held in the premises of the San Carlos Milling Co. PLASLU received
88 votes while AWA garnered 149 votes and a total of 390 ballots recorded as challenged, 242 of them by the
petitioner and 142 by the respondent AWA.
❖ Petitioner PLASLU alleged that the 242 ballots should be excluded in the counting of votes because the piece workers
were ineligible to cast such votes as they were only hired on temporary or casual basis and had a work of a different
nature from those laborers permitted to vote in the certification election. Respondent AWA argued otherwise to which
the Industrial Court ruled in its favor.
ISSUE: Whether or not the piece workers should be included in the determination of a bargaining unit.

HELD:
❖ NO.
❖ The Court finds petitioner’s contention to be meritorious. The Court, citing the case of Democratic Labor Union vs.
Cebu Stevedoring., Inc., et al, ruled that in the determination of the proper constituency of a collective bargaining unit,
certain factors must be considered, among them, the employment status of the employees to be affected, i.e., the
positions and categories of work to which they belong, and the unity of employees’ interest such as substantial
similarity of work and duties.
❖ It appearing that the 242 stevedores and piece works, whose votes have been challenged, were employed on a
casual or day to day basis and have no reasonable basis for continued or renewed employment for any
appreciable substantial time, they cannot be considered to have such mutuality of interest as to justify their inclusion in
a bargaining unit composed of permanent or regular employees.
❖ Disregarding the votes cast by the stevedores and piece workers, the final results of the certification election show that
the petitioner PLASLU garnered a majority of the votes cast by eligible voters. Consequently, petitioner should be
certified as the sole collective bargaining representative of the employees of the San Carlos Milling Co.
❖ The order complained of is REVERSED and the petition is Granted.

Collective Bargaining Unit (CBU), up close:

❖ Composition
➢ Union members
➢ Non-union members
■ Not part of managerial positions, but are part of managerial staff
❖ Confidential employees
➢ Work involves labor relations matters
❖ Doctrine of Necessary Implication:
➢ Immediate superiors are managerial employees; they are also excluded
❖ Exclusion/Inclusion
➢ Process to determine qualified voters in CE (certification election)
➢ Exercise of right of suffrage

Representation/Majority Status

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 Mode of Notes
Representation

Voluntary ❖ Only in unorganized establishments, when there is only one legitimate labor organization in the
Recognition (VR) bargaining unit;
❖ Submit Join Statement under Oath to DOLE
➢ Proof of Posting of Joint Statement for 15 days in 2 conspicuous places
➢ Approximate number of employees in CBU, with names and signatures of majority supporting
voluntary recognition
➢ No other legitimate labor organization in CBU
❖ VR may also be made within 12 months after Certification Election where “no union” wins
➢ Employees and employer can agree on the LO who can be the certified bargaining unit
➢ As if it has never been recognized
❖ Certification year rule will not apply

Consent Election ❖ Election voluntarily agreed upon by parties

➢ With or without intervention of DOLE
❖ Purpose: to determine majority representation only (not the collective bargaining agent)
➢ Who has more support?
➢ A Trojan Horse
■ After agreeing to consent election, cannot go to certification election
❖ Applicability:
➢ Organized (unionized) establishments: when the majority status of the incumbent bargaining
agent is challenged; or
➢ Unorganized establishments: when a petition is filed by a union or the employer.
❖ May be held even if CE (certificate election) petition is pending
➢ If no CE petition, no CYR bar unless winner extended VR by employer
➢ So, if you have a high chance of winning, do not agree to a consent election
❖ Certification-Year Rule (CYR) will apply
➢ No more conducting certification election
➢ If no Certification Election (CE) petition, no CYR bar, therefore the winner can be extended by
VR by the employer.

Election Bans

Ban Notes

Contract Bar Rule ❖ When there is still a valid and binding CBA, except during the Freedom Period
❖ Effect: NO certification election (CE)
❖ Petition for CE can be filed only during the Freedom Period (60-day period prior to the expiration
of the CBA [5th year])
❖ XPNs:
➢ Existing CBA not registered
➢ Existing CBA prematurely renewed
➢ Spurious CBA (fake signatures of union officers, for example)
➢ Substantad CBA
■ Does not contain the required or mandatory provisions
■ E.g. absence of grievance machinery

Certification Year ❖ Within one (1) year from the date of the issuance of the final certification election result.
Rule (CYR) ❖ Effect: NO certification election (CE)
❖ No certification election may be held within 12 months of previous CE, consent election, or
voluntary recognition
➢ Sir: kung manog daog ka na, do not agree to a consent election
❖ Prior CE was actually conducted
❖ XPNs:
➢ Prior petition defective
➢ Change in circumstances of majority union
■ E.g. during freedom period, the majority union disappeared because all members
left and formed their own union

Deadlock Bar Rule ❖ Where on-going CBA negotiations result in a deadlock that has been submitted for conciliation or
mediation or has become the subject of a notice of strike or lockout.
❖ Effect: NO certification election
❖ CBA Negotiations result in a deadlock
❖ Deadlock is genuine
➢ Notice of Strike filed
➢ Issues submitted for Arbitration
❖ Includes on-going negotiations
➢ Literally on-going
➢ Not meeting on May 10, and next meeting on July.

❖ Certification Election (CE)

➢ Defined:
■ Non-adversary fact-finding process or investigation to determine the will of the employees if they wish
to have a collective bargaining agent/representative in the appropriate bargaining unit for the purpose
of collective bargaining.
■ All employees, whether probationary or permanent, regular or otherwise may be allowed to
participate, subject to the exclusion-inclusion proceedings.
➢ What is the role of the employer during CE?

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 ■ The employer is simply a bystander in certification election proceedings.

Requisites:
➢ Organized Establishment
■ Verified petition supported by written consent of 25% of all the employees in CBU
● Based off of personal knowledge
■ Add the 25% to the 20/30% required, as applied
■ Valid election
● If majority of eligible voters voted
● E.g. out of 50 million, 25 million + 1 must have voted
■ Filed by LLO with Med-Arbiter during Freedom Period
■ Union with majority of valid votes cast is certified
● Majority of the majority votes
■ Total number of votes for all contending unions must be at least 50%

Run-Off Election
❖ When there are more choices in the certification election (including NO UNION) and none gets the majority vote, a run-off
shall be held within five (5) days between the two (2) unions receiving the highest votes, provided that the total number of
votes for all the contending unions is at least 50% of the total votes cast.
❖ They will rank it, provided number 1 and number 2 obtains at least 50% and that those are not “no union”

Procedure in CE
❖ Pre-Election Conference
➢ Exclusion/inclusion proceedings
❖ Election proper
❖ Canvassing of votes
❖ Proclamation/certification
❖ Appeal
❖ Inter-union dispute

What is the role of the employer during the CE?

❖ A certification election is the sole concern of the workers. The only exception is where the employer has to file a petition
for certification election because it is requested to bargain collectively.
❖ The employer is merely a by-stander
❖ Only role is to provide the list of employees

What is the basis for the computation of quorum in a certification election?

❖ The computation of quorum in a CE should be based on the membership of the rank and file unit in the particular worksite
petitioning and not on all the employees in the other worksites.50

Other issues:
❖ Employer-employee relationship
➢ Determination by med-arbiter, not conclusive; Labor Arbiter makes final determination
➢ For purposes of the CE; it is not conclusive
❖ Employees who can vote
➢ Generally: ALL EMPLOYEES, irrespective of status, designation
❖ No direct certification
❖ Unorganized establishment
➢ Election scheduled immediately
❖ Organized establishment
➢ No petition during Freedom Period, incumbent exclusive bargaining representative (EBR) enjoys recognition of
majority status

What if nobody filed a CE during?

❖ The incumbent enjoys the status as the CBA

Collective Bargaining Proper

❖ Concept: The duty to bargain collectively involves:
❖ NO CBA
➢ The performance of the mutual obligation TO MEET AND CONVENE promptly, expeditiously and in good faith
➢ To NEGOTIATE an agreement with respect to wages, hours of work and all other terms and conditions of
employment, including proposals for grievance machinery.
➢ However, this duty does not compel any party to agree to a proposal or to make concessions.

❖ Existing CBA
➢ Not terminate or modify agreement, except during “freedom period”
➢ Observe Hold-Over of CBA pending renegotiation
■ Hold-over is the automatic renewal of the CBA while there is no CBA executed between the parties.

Mandatory Subjects of Collective Bargaining

❖ Wages, work hours/days, vacations/holidays, bonuses, retirement, seniority, layoffs/transfers, workloads,
operating/disciplinary rules and regulations,
❖ Union security arrangements;
➢ Close shop, etc.
❖ Grievance machinery;
❖ No strike/lockout clause, zipper clause;
➢ Zipper clause → all matters not contained in the agreement are deemed to not have been agreed upon.
❖ Waiver clause;
➢ Under this clause, if you agreed to the CBA, you are waiving any other claim based on prior or previous CBAs.
➢ Sir: Don’t bring up the past, tapos na to!

50
St. James School of Quezon City v. Samahang Manggagawa sa St. James School of Quezon City, Nov. 23, 2005.

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 ❖ Automatic renewal clause

Union Security Arrangements, review:

Closed Shop: ❖ Only members of the bargaining agent can be hired and they must remain union members as a
condition of continued employment
❖ Union security clause

Union Shop ❖ Once hired, a person must become a member of the bargaining agent and must remain so during
the period of the CBA for continued employment.

Modified Union ❖ Employees who are not members of the bargaining union upon execution of the CBA are not
Shop required to join the union; only those hired after are required.

Agency Shop: ❖ Non-members are not required to join the bargaining union but they should pay an agency fee to the
union as a condition for continued employment.

Maintenance of ❖ Requires members of the bargaining union to maintain their membership therein for continued
membership clause employment.
❖ Non-union members are not required to join.

Preferential hiring ❖ Preference in hiring is given to members of the bargaining union who are thereafter required to
agreement maintain their membership for continued employment.

Term of the CBA:

❖ Five (5) years
❖ Economic provisions shall be renegotiated not later than three (3) years after execution
➢ If a new CBA is concluded within six (6) months from expiration, the effectivity of the CBA shall retroact to the
day following the expiry date; otherwise, the effectivity of the

Formal Requirements:
❖ Within thirty (30) days from execution thereof, the parties shall submit copies of the CBA directly to the Bureau of Labor
Relations (BLR) or with the DOLE Regional Office with verified proof of its posting in two conspicuous places and its
ratification by majority of the workers in the bargaining unit.
❖ Requirements:
➢ Within 30 days from execution
➢ Submission of copies of the CBA to the BLR or DOLE
➢ Proof of posting in two (2) conspicuous locations
➢ Ratification by majority of the workers.

Term of the CBA, illustrated:

❖ General Rules:
❖ Execution of CBA within six (6) months from the date of expiration (retroaction):

❖
❖ Execution of CBA after six (6) months from date of expiration:

Applicable Principles:
❖ Substitutionary Doctrine

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 ➢ Employees cannot revoke the validity of the executed CBA by the simple expediency of changing their collective
bargaining agent.
➢ New bargaining agent must respect existing CBA although it may negotiate with the employer for the shortening
of the term thereof.
➢ You cannot change the provisions of the CBA
➢ RECALL: overlap of economic and representative aspect of the CBA.
■ New bargaining agent cannot modify the existing economic CBA.

❖ Wiley Doctrine
➢ Loss of personality by a legal/valid merger or consolidation of a corporation with an existing CBA with the union
does not automatically terminate all the rights of the covered employees.

When there is a transfer of ownership of a company, are the labor contracts of the former employer binding on the
transferee?
❖ The Supreme Court ruled that, unless expressly assumed, labor contracts like collective bargaining agreements are not
enforceable against the transferee of an enterprise.51
❖ Labor contracts are in personam and thus binding only between the parties.
❖ The liabilities of the previous owner to its employees are not enforceable against the buyer or transferee, unless
(1) The latter unequivocally assumes them; or
(2) The sale or transfer was made in bad faith.
❖ Possibly a runaway shop
❖ No loss of legal personality, only changed ownership52

An employer filed a petition to cancel the union’s certificate of registration. Is the resolution of the petition a prejudicial
question that must be settled first before the SOLE could order the parties to bargain collectively?
❖ NO. The pendency of a petition for cancellation of union registration does NOT preclude collective bargaining.
❖ The discretion to assume jurisdiction may be exercised by the SOLE without the necessity of prior notice or hearing given
to any of the parties.53
❖ COLLECTIVE BARGAINING PROPER

➢ CONCEPT: The duty to bargain collectively involves the performance of the mutual obligation:
➢ TO MEET AND CONVENE promptly, expeditiously and in good faith;
➢ To NEGOTIATE an agreement with respect wages, hour% of work and all other terms and conditions of
employment, including proposals for grievance machinery;
➢ However, this duty does not compel any party to agree to a proposal or to make concessions.

❖ SUBJECTS OF BARGAINING
➢ Mandatory: wages, work hours/days, vacations/holidays, bonuses, retirement, seniority, layoffs/transfers,
workloads, operating/disciplinary rules and regulations, union security arrangements.
➢ COMMON STIPULATIONS AND CLAUSES IN A CBA:
■ Title;
■ Description of the parties;
■ Preliminary statement of principles;
■ Description of bargaining unit;
■ Exclusionary clause;
■ Check off of union dues, agency fees and other assessments;
■ Statement of management prerogatives;
■ Union commitment;
■ Economic and other fringe benefits;
■ Grievance Machinery;
■ Voluntary Arbitration;
■ No-strike, No-lockout clause;
■ Family planning, health and safety, cooperative, recreation and sports;
■ Waiver and completeness of Agreement;
■ Duration and effectivity of agreement.

❖ IMPORTANT CONCEPTS IN COLLECTIVE BARGAINING

➢ SUBSTITUTIONARY DOCTRINE:
■ employees cannot revoke the validity of the executed CBA by the simple expediency of changing their
collective bargaining agent.
■ New bargaining agent must respect existing CBA although it may negotiate with the employer for the
shortening of the term thereof;
➢ WILEY DOCTRINE:
■ loss of personality by a legal/valid merger or consolidation of a corporation with an existing CBA with
the union does not automatically terminate all the rights of the covered employees;
➢ ABSORPTION DOCTRINE:
■ “accretion doctrine” applies when there is absorption and integration by one entity of one or more
establishments having the same kind and line of business and having their respective collective
bargaining agreements with different labor union existing therein;
■ the duty to bargain which originally devolves upon the selling party is transferred to the buying entity
➢ AUTOMATIC RENEWAL CLAUSE:
■ It shall be the duty of both parties to keep the status quo and to continue in full force and effect the
terms and conditions of the existing agreement during the 60-day period and/or until a new
agreement is reached by the parties. (Art. 253)
➢ RETROACTIVITY OF CBA:
■ Any agreement on such other provisions of the Collective Bargaining Agreement entered into within
six (6) months from the date of expiry of the term of such other provisions as fixed in such Collective
Bargaining Agreement, shall retroact to the day immediately following such date.

51
Sundowner Development Corp. v. Drilon
52
Barayoga v. Asset Privatization Trust, Oct. 24, 2005
53
Capitol Medical Center, Inc. v. Trajano, June 30, 2005

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 ■ If any such agreement is entered into beyond six months, the parties shall agree on the duration of
retroactivity thereof.
■ In case of a deadlock in the renegotiation of the Collective Bargaining Agreement, the parties may
exercise their rights under this Code.
■ (Art. 253-A) The retroactivity provision under Art. 253-A applies only in cases where the CBA is
voluntarily concluded by and between the parties and not through arbitral awards.
■ In Meralco vs. Quisumbing [G.R. No. 127598] August 1, 2000, the Supreme Court held that the
arbitral award should retroact to the first day after the six-month period following the expiration of the
last day of the CBA;

➢ SUSPENSION OF CBA
■ In the case of Rivera vs. Espiritu, G.R. No. 135547, January 23, 2002, the Supreme Court held as
valid the agreement between PAL and the PALEA to suspend the CBA for a period of ten (10) years
subject to certain safeguards.
■ The Supreme Court held, “In the instant case, it was PALEA, as the exclusive bargaining agent of
PAL’s ground employees, that voluntarily entered into the CBA with PAL. It was also PALEA that
voluntarily opted for the 10-year suspension of the CBA. Either case was the union’s exercise of its
right to collective bargaining.
■ The right to free collective bargaining, after all, includes the right to suspend it.
● In sum, we are of the view that the PAL-PALEA agreement dated September 27, 1998, is a
valid exercise of the freedom to contract.
■ Under the principle of inviolability of contracts guaranteed by the Constitution, the contract must be
upheld.”

➢ COLLECTIVE BARGAINING PROCESSES

■ Preliminary Process;
■ Negotiation Process;
■ Execution Process;
■ Publication Process;
■ Ratification Process;
■ Registration Process;
■ Administration Process
■ Interpretation and application process.

G. Grievance Machinery and Voluntary Arbitration

Title VII-A
GRIEVANCE MACHINERY AND VOLUNTARY ARBITRATION
Art. 260. Grievance machinery and voluntary arbitration. The parties to a Collective Bargaining Agreement shall include
therein provisions that will ensure the mutual observance of its terms and conditions. They shall establish a machinery for the
adjustment and resolution of grievances arising from the interpretation or implementation of their Collective Bargaining
Agreement and those arising from the interpretation or enforcement of company personnel policies.

All grievances submitted to the grievance machinery which are not settled within seven (7) calendar days from the date of its
submission shall automatically be referred to voluntary arbitration prescribed in the Collective Bargaining Agreement.

For this purpose, parties to a Collective Bargaining Agreement shall name and designate in advance a Voluntary Arbitrator or
panel of Voluntary Arbitrators, or include in the agreement a procedure for the selection of such Voluntary Arbitrator or panel of
Voluntary Arbitrators, preferably from the listing of qualified Voluntary Arbitrators duly accredited by the Board. In case the parties
fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of
Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure agreed upon in the Collective Bargaining
Agreement, which shall act with the same force and effect as if the Arbitrator or panel of Arbitrators has been selected by the
parties as described above.

Art. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. The Voluntary Arbitrator or panel of
Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the
interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or enforcement
of company personnel policies referred to in the immediately preceding article. Accordingly, violations of a Collective Bargaining
Agreement, except those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as
grievances under the Collective Bargaining Agreement. For purposes of this article, gross violations of Collective Bargaining
Agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement.

The Commission, its Regional Offices and the Regional Directors of the Department of Labor and Employment shall not entertain
disputes, grievances or matters under the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of Voluntary
Arbitrators and shall immediately dispose and refer the same to the Grievance Machinery or Voluntary Arbitration provided in the
Collective Bargaining Agreement.

Art. 262. Jurisdiction over other labor disputes. The Voluntary Arbitrator or panel of Voluntary Arbitrators, upon agreement of
the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks.

Art. 262-A. Procedures. The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have the power to hold hearings, receive
evidences and take whatever action is necessary to resolve the issue or issues subject of the dispute, including efforts to effect a
voluntary settlement between parties.

All parties to the dispute shall be entitled to attend the arbitration proceedings. The attendance of any third party or the exclusion
of any witness from the proceedings shall be determined by the Voluntary Arbitrator or panel of Voluntary Arbitrators. Hearing
may be adjourned for cause or upon agreement by the parties.

Unless the parties agree otherwise, it shall be mandatory for the Voluntary Arbitrator or panel of Voluntary Arbitrators to render an
award or decision within twenty (20) calendar days from the date of submission of the dispute to voluntary arbitration.

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 The award or decision of the Voluntary Arbitrator or panel of Voluntary Arbitrators shall contain the facts and the law on which it is
based. It shall be final and executory after ten (10) calendar days from receipt of the copy of the award or decision by the parties.

Upon motion of any interested party, the Voluntary Arbitrator or panel of Voluntary Arbitrators or the Labor Arbiter in the region
where the movant resides, in case of the absence or incapacity of the Voluntary Arbitrator or panel of Voluntary Arbitrators, for
any reason, may issue a writ of execution requiring either the sheriff of the Commission or regular courts or any public official
whom the parties may designate in the submission agreement to execute the final decision, order or award.

Art. 262-B. Cost of voluntary arbitration and Voluntary Arbitrator’s fee. The parties to a Collective Bargaining Agreement
shall provide therein a proportionate sharing scheme on the cost of voluntary arbitration including the Voluntary Arbitrator’s fee.
The fixing of fee of Voluntary Arbitrators, whether shouldered wholly by the parties or subsidized by the Special Voluntary
Arbitration Fund, shall take into account the following factors:
1. Nature of the case;
2. Time consumed in hearing the case;
3. Professional standing of the Voluntary Arbitrator;
4. Capacity to pay of the parties; and
5. Fees provided for in the Revised Rules of Court.

Grievance Machinery and Voluntary Arbitration

❖ Concept
➢ The constitution promotes the preferential use of voluntary modes in settling disputes, including conciliation, and
shall enforce compliance therewith to foster industrial peace (Section 3, Article XII).
➢ The grievance procedure/machinery
■ Refers to the internal rules of procedure established by the parties in their CBA intended to resolve all
issues arising from the implementation and interpretation of their CBA with VOLUNTARY
ARBITRATION as the final step.
■ It includes the mechanism for the adjustment and resolution of grievances arising from the
interpretation and/or implementation of the CBA and the enforcement of company personnel policies.
➢ Voluntary modes of setting disputes
➢ Refers to implementation of the CBA.
➢ If the issue is not outside of the CBA, then do not go to the NLRC or DOLE. refer to the grievance machinery
instead
❖ Grievance Machinery, up close:
➢ Grievance Machinery and its procedure must be included in CBA
➢ Part of duty to bargain collectively
➢ Appeal procedure to address issues on CBA interpretation/implementation
■ An appeal mechanism should also be provided.
● Enterprise level, national level, or referral of the matter to a voluntary arbitrator
➢ Bypassing or failure to resort to the grievance machinery may be considered as unfair labor practice (ULP)
➢ If a CBA lacks this, the CBA is considered as “sub-standard”

❖ Voluntary Arbitrator/Arbitration
➢ Definition:
■ Refers to the mode of settling labor-management disputes by which the parties select a competent,
trained and impartial arbitrator duly accredited by the National Conciliation and Mediation Board
(NCMB), to decide the merits thereof.
■ Not judges, not part of the judiciary or executive as they are private persons
■ However, part of the judicial system
➢ Jurisdiction:
■ Original and exclusive jurisdiction
● All unresolved grievances arising from interpretation, implementation, or enforcement of
company personnel policies
● Issues voluntarily submitted by parties, including termination disputes, ULP, etc.
◆ If expressly stipulated in the CBA
◆ CBA is a contract and the principle of autonomy applies to it, so parties are free
to stipulate what they want, unless contrary to public moral, customs, policies,
law, etc.
■ General: All disputes may be referred by the parties including ULP and bargaining deadlocks.
■ Mode of appeal:
● Petition for Review under Rule 43
● Decision appealable to CA
■ Compensation: P10,000 per issue

What is the role of an arbitrator in labor matters brought before him?

❖ An arbitrator is confined to the interpretation and application of the CBA
❖ He does not sit to dispense his own brand of industrial justice
➢ His award is legitimate only insofar as it draws its essence from the CBA, i.e., when there is a rational nexus
between the award and the CBA under consideration 54

END OF MIDTERMS
FINALS START
H. Strikes and Lockouts

54
United Kimblerly-Clark Employees Union--Phil. Transport General Workers’ Organization v. Kimberly-Clark Phils,. Inc., Marl 6, 2006.

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 Title VIII
STRIKES AND LOCKOUTS AND FOREIGN INVOLVEMENT IN TRADE UNION ACTIVITIES
Chapter I
STRIKES AND LOCKOUTS

Art. 263. Strikes, picketing and lockouts.

1. It is the policy of the State to encourage free trade unionism and free collective bargaining.

2. Workers shall have the right to engage in concerted activities for purposes of collective bargaining or for their mutual
benefit and protection. The right of legitimate labor organizations to strike and picket and of employers to lockout,
consistent with the national interest, shall continue to be recognized and respected. However, no labor union may strike
and no employer may declare a lockout on grounds involving inter-union and intra-union disputes.

3. In case of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or the
employer may file a notice of lockout with the Ministry at least 30 day before the intended date thereof. In cases of
unfair labor practice, the period of notice shall be 15 days and in the absence of a duly certified or recognized
bargaining agent, the notice of strike may be filed by any legitimate labor organization in behalf of its members.
However, in case of dismissal from employment of union officers duly elected in accordance with the union constitution
and by-laws, which may constitute union busting, where the existence of the union is threatened, the 15-day cooling-off
period shall not apply and the union may take action immediately. (As amended by Executive Order No. 111, December
24, 1986)

4. The notice must be in accordance with such implementing rules and regulations as the Minister of Labor and
Employment may promulgate.

5. During the cooling-off period, it shall be the duty of the Ministry to exert all efforts at mediation and conciliation to effect
a voluntary settlement. Should the dispute remain unsettled until the lapse of the requisite number of days from the
mandatory filing of the notice, the labor union may strike or the employer may declare a lockout.

6. A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit
concerned, obtained by secret ballot in meetings or referenda called for that purpose. A decision to declare a lockout
must be approved by a majority of the board of directors of the corporation or association or of the partners in a
partnership, obtained by secret ballot in a meeting called for that purpose. The decision shall be valid for the duration of
the dispute based on substantially the same grounds considered when the strike or lockout vote was taken. The
Ministry may, at its own initiative or upon the request of any affected party, supervise the conduct of the secret
balloting. In every case, the union or the employer shall furnish the Ministry the results of the voting at least seven days
before the intended strike or lockout, subject to the cooling-off period herein provided. (As amended by Batas
Pambansa Bilang 130, August 21, 1981 and further amended by Executive Order No. 111, December 24, 1986)

7. When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry
indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the
dispute and decide it or certify the same to the Commission for compulsory arbitration. Such assumption or certification
shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the
assumption or certification order. If one has already taken place at the time of assumption or certification, 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 lockout. The Secretary of Labor
and Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with
this provision as well as with such orders as he may issue to enforce the same.

In line with the national concern for and the highest respect accorded to the right of patients to life and health, strikes
and lockouts in hospitals, clinics and similar medical institutions shall, to every extent possible, be avoided, and all
serious efforts, not only by labor and management but government as well, be exhausted to substantially minimize, if
not prevent, their adverse effects on such life and health, through the exercise, however legitimate, by labor of its right
to strike and by management to lockout. In labor disputes adversely affecting the continued operation of such hospitals,
clinics or medical institutions, it shall be the duty of the striking union or locking-out employer to provide and maintain
an effective skeletal workforce of medical and other health personnel, whose movement and services shall be
unhampered and unrestricted, as are necessary to insure the proper and adequate protection of the life and health of
its patients, most especially emergency cases, for the duration of the strike or lockout. In such cases, therefore, the
Secretary of Labor and Employment may immediately assume, within twenty four (24) hours from knowledge of the
occurrence of such a strike or lockout, jurisdiction over the same or certify it to the Commission for compulsory
arbitration. For this purpose, the contending parties are strictly enjoined to comply with such orders, prohibitions and/or
injunctions as are issued by the Secretary of Labor and Employment or the Commission, under pain of immediate
disciplinary action, including dismissal or loss of employment status or payment by the locking-out employer of
backwages, damages and other affirmative relief, even criminal prosecution against either or both of them.

The foregoing notwithstanding, the President of the Philippines shall not be precluded from determining the industries
that, in his opinion, are indispensable to the national interest, and from intervening at any time and assuming
jurisdiction over any such labor dispute in order to settle or terminate the same.

8. Before or at any stage of the compulsory arbitration process, the parties may opt to submit their dispute to voluntary
arbitration.

9. The Secretary of Labor and Employment, the Commission or the voluntary arbitrator shall decide or resolve the
dispute, as the case may be. The decision of the President, the Secretary of Labor and Employment, the Commission
or the voluntary arbitrator shall be final and executory ten (10) calendar days after receipt thereof by the parties. (As
amended by Section 27, Republic Act No. 6715, March 21, 1989)

Art. 264. Prohibited activities.

1. No labor organization or employer shall declare a strike or lockout without first having bargained collectively in
accordance with Title VII of this Book or without first having filed the notice required in the preceding Article or without

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 the necessary strike or lockout vote first having been obtained and reported to the Ministry.

No strike or lockout shall be declared after assumption of jurisdiction by the President or the Minister or after
certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases
involving the same grounds for the strike or lockout.

Any worker whose employment has been terminated as a consequence of any unlawful lockout shall be entitled to
reinstatement with full backwages. Any union officer who knowingly participates in an illegal strike and any worker or
union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost
his employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient
ground for termination of his employment, even if a replacement had been hired by the employer during such lawful
strike.

2. No person shall obstruct, impede, or interfere with, by force, violence, coercion, threats or intimidation, any peaceful
picketing by employees during any labor controversy or in the exercise of the right to self-organization or collective
bargaining, or shall aid or abet such obstruction or interference.

3. No employer shall use or employ any strike-breaker, nor shall any person be employed as a strike-breaker.

4. No public official or employee, including officers and personnel of the New Armed Forces of the Philippines or the
Integrated National Police, or armed person, shall bring in, introduce or escort in any manner, any individual who seeks
to replace strikers in entering or leaving the premises of a strike area, or work in place of the strikers. The police force
shall keep out of the picket lines unless actual violence or other criminal acts occur therein: Provided, That nothing
herein shall be interpreted to prevent any public officer from taking any measure necessary to maintain peace and
order, protect life and property, and/or enforce the law and legal order. (As amended by Executive Order No. 111,
December 24, 1986)

5. No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the free ingress to
or egress from the employer’s premises for lawful purposes, or obstruct public thoroughfares. (As amended by Batas
Pambansa Bilang 227, June 1, 1982)

Art. 265. Improved offer balloting. In an effort to settle a strike, the Department of Labor and Employment shall conduct a
referendum by secret ballot on the improved offer of the employer on or before the 30th day of the strike. When at least a majority
of the union members vote to accept the improved offer the striking workers shall immediately return to work and the employer
shall thereupon readmit them upon the signing of the agreement.

In case of a lockout, the Department of Labor and Employment shall also conduct a referendum by secret balloting on the
reduced offer of the union on or before the 30th day of the lockout. When at least a majority of the board of directors or trustees
or the partners holding the controlling interest in the case of a partnership vote to accept the reduced offer, the workers shall
immediately return to work and the employer shall thereupon readmit them upon the signing of the agreement.55

Art. 266. Requirement for arrest and detention. Except on grounds of national security and public peace or in case of
commission of a crime, no union members or union organizers may be arrested or detained for union activities without previous
consultations with the Secretary of Labor.

Main Terms in Strikes

Strike ❖ Any temporary stoppage of work by the concerted action of the employees as a result of a labor dispute.
❖ Includes slowdowns, mass leaves, sit-downs, attempts to damage or sabotage the employer’s
operations, equipment and facilities, and other similar activities.
❖ Elements:
➢ Temporary stoppage of work
➢ Concerted action → not isolated, performed by a group of persons. There is unity in purpose
➢ Arising or as a result of a labor dispute
➢ A freedom of expression

Picketing ❖ Peaceably marching to and fro before an establishment to publicly make known the existence of a labor
dispute usually by the display of placards, banners and other propaganda materials and activities.
❖ It must be mobile; not a barricade of an entrance or exit (illegal act)

Lockout ❖ The temporary refusal of an employer to furnish work as a result of a labor dispute.
❖ This tool is available for the employers

Comments
❖ These are methods that an employee may do to really force the issue with the employer

Disputes

Industrial / ❖ Includes any controversy or matter concerning terms and conditions of employment or the association
Labor Dispute or representation of persons in negotiating the fixing, maintaining, changing or arranging the terms and
conditions of employment, regardless of whether the disputants stand in the proximate relationship of
employer and employee.

Inter-union ❖ A dispute between two or more unions seeking to represent the employees in a bargaining unit.
Dispute

55
(Incorporated by Section 28, Republic Act No. 6715, March 21, 1989)

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 Intra-union ❖ One involving the internal affairs of the union such as accounting of funds, disloyalty of members, etc.
Dispute ❖ Questioning the officers representing the union

Other Strike/Lockout Terms

“No Strike, No ❖ A standard provision in the CBA that prohibits resorting to strike/lockout as a means to resolve a
Lockout controversy.
Clause” ❖ The prohibition applies only to an economic strike and not to a ULP strike.
❖ In the Philippines, economic strikes are usually not allowed, unless there is a deadlock
❖ Best time to hold a strike is when the economic provision has expired.

Notice of Strike ❖ Refers to the notification file by a duly registered labor union with the appropriate NCMB Regional
Branch informing the latter of the former’s intention to go on strike because of a deadlock in collective
bargaining or the commission of ULP by the employer.
❖ A copy of the notice must be duly served on the employer by personal service or by registered mail.
❖ However, if the notice is sent by Registered Mail, the cooling-off period shall begin from the date of
receipt by the employer of the notice.

Cooling-off ❖ Refers to the period designed by law to afford the parties the opportunity to amicably resolve this
Period dispute with the assistance of the NCMB.
❖ GEN RULE: A requirement prior to the conduct of Strike.
❖ The period may either be THIRTY (30) DAYS in case of Economic Strike, or
❖ The period may be FIFTEEN (15) DAYS in case of a ULP Strike.
❖ XPN: The cooling-off period is dispensed with if the ground for the strike is Union Busting / Dismissal
of Union Officers.

❖ During the cooling-off period, parties will not do anything to exacerbate the relations. Do not ignite the fire

Strike ❖ Refers to the approval of the decision to strike/lockout by a majority of the total union membership in
Vote/Lockout the bargaining unit or the Board of Directors of the employer corporation concerned obtained by secret
Vote ballot.
❖ Strike out vote for union members
❖ Lockout vote for Board of Directors
❖ This results to a Strike Vote Report

Strike Ban ❖ The period of SEVEN (7) DAYS after the report of the strike vote results in the NCMB/DOLE within which
the strike cannot be staged in all kinds of strikes.
❖ If the strike vote is held and the result thereof is submitted during the cooling-off period, the 7-day ban
shall be reckoned from the expiration of the cooling-off period.
❖ The purpose of the strike ban is to enable the NCMB/DOLE the opportunity to verify whether or not the
projected strike was approved by the majority of the union members.
❖ Non-observance will consider the subsequent strike/lockout as illegal.

Strike Area ❖ The establishment, warehouse, depots, plants or office, including the sites or premises used as run-away
shops of the employer struck against as well as the immediate vicinity actually used by picketing-strikers
in moving to and fro before all points of entrance or exit from said establishments
❖ This assumes that there is compliance with the requisites of a Strike

Improved/ ❖ Referendum by secret ballot on the improved offer of the employer or reduced offer by the union
Reduced Offer conducted by the NCMB on or before the 30th day of the strike;
Balloting

Preventive ❖ A potential labor dispute that is the subject of a formal or informal request for conciliation and mediation
mediation case and mediation assistance sought by either or both parties or upon the initiative of the NCMB to avoid the
occurrence of an actual labor dispute;

Orders

Assumption/ ❖ Under Article 263[g] of the Labor Code, when in the opinion of the Secretary of DOLE, the labor dispute
Certification causes or will likely cause a strike or lockout in an industry indispensable to the national interest,
Order (ACO) he is empowered to do either of two things:
➢ Assume jurisdiction over the labor dispute and decide it himself; or
■ XPN: San Ag case; where the parties have a “no strike, no lockout clause” requiring that
their disputes be brought to voluntary arbitration.
➢ Certify the labor dispute to the NLRC for compulsory arbitration (Certified Case)
■ XPN: If parties themselves refer the case to voluntary arbitration
❖ SOLE is very powerful as they can identify what is an “industry indispensable to the national interest”

Return-to-Work ❖ The consequence of an Assumption/Certification Order where the striking workers are directed to
Order (RTWO) return to work, and the employer to accept them back, under the same terms and conditions
prevailing before the dispute.
❖ If no strike has been staged yet, the impending strike or lockout is automatically enjoined.
❖ Defiance of the ACO/RTW Orders will render the strike/lockout illegal.

Requisites of a Valid Strike

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 Requisite NOTES:

1. Strike must be based on a valid and factual ground

2. Collective Bargaining Deadlock

3. Unfair Labor Practice (ULP) ❖ Many acts. Recall in previous sections.

4. Conduct of Strike Vote

5. Submission of Strike Vote Report/Result (to NCMB Regional Office)

6. Observance of 15-Day or 30-Day ❖ This is not necessary for the valid strike, when there is union busting
Cooling-Off Period ❖ If Union Busting, can do away with the cooling off period

7. Observance of 7-Day Strike Ban

Notes:
❖ All requisites should be present for there to be a valid strike
➢ Except for #6; note XPN of Union Busting

Illegal Strike

Objective Test

Requisites 1. Failure to comply with requirements/requisites

2. Based on non-strikeable issues/unlawful purpose

Notes ❖ Like the exam, objective type. If you get it wrong, then it is wrong.
❖ Simply list down the requisites and check if there is compliance with the requisites.
➢ If one of them is missing, then the strike is illegal
❖ How soon can the union conduct a strike?
➢ After strike ban (7 days after filing of the strike vote report)
❖ Lockouts rarely happen in the Philippines

Unlawful Means Test

Requisites 1. Issues have already been submitted for arbitration

2. Commission of prohibited acts
3. Notice of Strike has already been converted to Preventive Mediation
4. Violation of “No Strike, No Lockout” clause of the CBA, except ULP
5. Defiance of Assumption/Certification/Injunction Order

Notes ❖ All the requisites for the conduct of the strike were initially present
❖ However, in the conduct of the strike, certain acts were committed that made the strike illegal

Reason for basis of illegality of the strike

❖ To determine the legal sanction of those who participated in the illegal strike
❖ You have to know WHY and HOW the strike became illegal

When can the Union file a Strike? How soon?

Scenario 1:
❖ The strike is for an Economic Strike
❖ Cooling-off period starts on May 31 and ends on June 30

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 ❖ Union files the strike vote at June 1
❖ The strike vote report (SVR) was submitted on June 10
❖ 7-day strike ban starts from submission of SVR

❖ Strike ban will NOT start on June 11, but after the mandatory cooling-off period, at JUNE 30.
❖ Strike ban will be from July 1-7

❖ Strike may be conducted on JULY 8

[DIAGRAM]

Scenario 2:
❖ The strike is for an Economic Strike
❖ Cooling-off period starts on May 31 and ends on June 30
❖ Union files the strike vote on June 24
❖ The strike vote report (SVR) was submitted on June 25
❖ 7-day strike ban starts from submission of SVR
❖ Effect:
➢ Strike ban will NOT start on June 11, but after the mandatory cooling-off period, at JUNE 30.
➢ Strike ban will be from July 1-7
❖ Strike
➢ Strike may be conducted on JULY 8

[SAME AS DIAGRAM ABOVE (Scenario 1)]

Scenario 3:
❖ The strike is for an Economic Strike
❖ Cooling-off period starts on May 31 and ends on June 30
❖ Union files the strike vote on July 8
❖ The strike vote report (SVR) was submitted on July 10
❖ 7-day strike ban starts from submission of SVR
❖ Effect:
➢ Strike ban will start after the mandatory cooling-off
➢ Strike ban will be from July 11-17
❖ Strike
➢ Strike may be conducted on JULY 18

Prohibited Acts and Practices

Prohibition NOTES:

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 1. Declaring a strike/lockout on grounds involving inter-union
or intra-union disputes, or on issues brought to voluntary or
compulsory arbitration
❖ Inter-union disputes is a matter between and among
contending unions
❖ Intra-union disputes is a matter between and among
members of a union
❖ This presupposes that you complied with the
requirements, but the ground cited are inter-union or
intra-union

2. Declaring a strike/lockout without first having bargained ❖ Premature strike

collectively or without first having filed the required notice of ❖ Fail the objective test
strike or without the strike or lockout vote

3. Strike in defiance of Return-to-Work Order (RTWO) or after ❖ Fail the unlawful means test
assumption of jurisdiction or certification of dispute to NLRC

4. Obstructing, impeding or interfering with by force, violence,
coercion, threats or intimidation, or abetting any such
obstruction or interference, any peaceful picketing or
exercise of the right to self-organization or collective
bargaining.
❖ These are overt acts and these can be proved by
oral testimony or documentary evidence such as
pictures or videos.
❖ Fail the unlawful means test

5. Employing a strikebreaker or being employed as such. ❖ An outsider was used to physically break the strike
❖ Fail the unlawful means test

6. No public official or employee including officers and
personnel of the AFP and PNP shall bring in, introduce, or
escort in any manner any individual who seeks to replace
strikers in entering or leaving the strike area; or to work in
place of the strikers.
❖ If they are within the strike area, it is illegal
❖ They should be around 300 meters away
❖ Fail the unlawful means test

7. Stationary pickets or permanent blockades ❖ The entrances or exit are blocked by the strikers for
non-compliance of the unlawful means test.

8. Violence, coercion and intimidation employed by a ❖ VIOLENCE

striker/picketer.

9. Obstruction of free ingress or egress from the employer’s ❖ The entrances or exit are blocked by the strikers for
premises. non-compliance of the unlawful means test.

10. Obstruction of public thoroughfares.

Effects of Participation in an Illegal Strike

❖ Any union officer who knowingly participates in an illegal strike and any worker who knowingly participates in the
commission of illegal acts during the strike may be declared to have lost their employment status.
➢ In the objective test, those who will be severely penalized are the officers.
■ The union officers are presumed to be well aware of the requirements for the conduct of a strike
❖ However, in case of defiance of a Return-to-Work order, it is immaterial whether the violator is a union officer or an
ordinary member.
➢ Penalized with the loss of employment.

Suspension of Effects of Termination

❖ Under Article 291(b) of the Labor Code, the DOLE Secretary may suspend the effects of termination of employees
pending the resolution of dispute in the event of a prima facie finding by the appropriate official before whom such dispute
is pending, that the termination may cause a serious labor dispute in the implementation of a mass lay-off.
❖ It will not be dependent on the illegal strike case. But if it will result in a mass lay-off, the SOLE may intervene.

Assumption/Certification

Article 263(g)

Requisites:
❖ There exists a labor dispute
❖ The labor dispute is causing or is likely to cause a strike or lockout
❖ The strike or lockout will happen in an industry indispensable to the national interest

Role of the Secretary of Labor and Employment (SOLE)

❖ The SOLE may assume jurisdiction over the dispute (Assumption)
❖ He or she will decide it or certify the same to the Commission for compulsory arbitration (Certification)

Effect of assumption/certification by SOLE

❖ Automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order.
❖ If one has already taken place at the time of assumption or certification
➢ All striking or locked out employees shall immediately return-to-work (RTWO)
➢ The employer shall immediately resume operations and readmit all workers under the same terms and
conditions prevailing before the strike or lockout.
❖ The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to
ensure compliance with this provision as well as with such orders as he may issue to enforce the same.

President’s role in determining industries that are indispensable to the national interest

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 ❖ The foregoing notwithstanding, the President of the Philippines shall not be precluded from determining the industries
that, in his opinion, are indispensable to the national interest; and
❖ The President shall not be precluded from intervening at any time and assuming jurisdiction over any such labor
dispute in order to settle or terminate the same.
❖ NOTE: The SOLE has power to declare an industry as indispensable, but this will give way to the President’s opinion.

Matters to consider Notes

National Interest Cases ❖ Like in the case of PhinCo

❖ The SOLE cannot be compelled to exercise this power as it is discretionary

Automatic Injunction/Return to ❖ If a strike is already being conducted, this is automatic

Work ❖ In effect, it enjoins a strike, if one is already being conducted
❖ If workers refuse to abide to the RTWO, they may be dismissed
➢ Result of compliance of unlawful means test
➢ Those who refuse to comply with the RTWO will be dismissed

Prior Notice to Parties Not ❖ It is not a requisite that parties be informed

Required ❖ Announcement through media or service by way of posting is sufficient

Immediately Executory ❖ Orders are immediately executory

All issues/disputes, subsumed ❖ E.g. in union busting, it leads to dismissal, illegal dismissal cases may be filed
❖ When the SOLE assumes jurisdiction, all cases will be consolidated in one labor case
➢ SOLE can judge it himself, or delegates it to the NLRC

Options of Secretary ❖ Resolve issues

❖ Certify dispute to NLRC

Management prerogative are regulated

Assumption/Certification Effects

Effect Notes

Projected Strike is enjoined ❖ If there is already a strike

Return to Work Order, on-going strike

Prior Notice to Parties Not Required

Immediately Executory

All issues/disputes, subsumed

Options of Secretary ❖ Resolve issues

❖ Certify dispute to NLRC

What is a Return To Work Order (RTWO)?

❖ Employees → must report back to work
➢ Employees who do not comply may be sanctioned
❖ Employer → must accept employees under the same terms and conditions prevailing before the strike/lockout
❖ No Estoppel or Waiver of Demands
➢ This means just because you returned to work, does not mean you are abandoning your claims against your
employer
➢ The employees are merely complying with the RTWO

Special case for Hospitals, Clinics, and Similar Medical Institutions

❖ Such strikes shall, to every extent possible, be avoided
❖ All serious efforts, not only by labor and management but government as well, be exhausted to substantially minimize, if
not prevent, their adverse effects on such life and health, through the exercise, however legitimate, by labor of its right to
strike and by management to lockout.

❖ Duty of the striking union or locking-out employer:

➢ To provide and maintain an effective skeletal workforce of medical and other health personnel, whose
movement and services shall be unhampered and unrestricted, as are necessary to insure the proper and
adequate protection of the life and health of its patients, most especially emergency cases, for the duration of
the strike or lockout.
➢ Skeletal workforce shall continue the operations

❖ Role of the SOLE:

➢ The SOLE may immediately assume, within twenty four (24) hours from knowledge of the occurrence of such a
strike or lockout, jurisdiction over the same. (Assumption)
➢ The SOLE may certify it to the Commission for compulsory arbitration. (Certification)
➢ For this purpose, the contending parties are strictly enjoined to comply with such orders, prohibitions and/or
injunctions as are issued by the Secretary of Labor and Employment or the Commission, under pain of
immediate disciplinary action, including dismissal or loss of employment status or payment by the locking-out
employer of backwages, damages and other affirmative relief, even criminal prosecution against either or both
of them.

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Concerted Activities and Strikes by Government Employees
❖ Government employees → not allowed to declare any strike for the purpose of changing the terms and conditions of
employment
➢ Negotiation is not also allowed on those matters that require appropriation of funds, those fixed by law, and
those involving the exercise of management prerogatives
❖ Employees of GOCCs organized under the Corporation Code → shall have the right to organize and bargain
collectively with their respective employers.
❖ All other employees in the Civil Service → shall have the right to form associations for purpose not contrary to law.

Strike Related Concerns

Concern NOTES:

Non Strikeable ❖ Wage distortion

Issues ❖ Inter-union, intra-union disputes
➢ Proper remedy is to register the union, and to let the union participate in a certification election
➢ If the duty fails to recognize the recognized bargaining agent, it will be considered as ULP for
failure to negotiate with the CBA
❖ To compel union recognition
❖ Violation of CBA that is not gross
➢ If it involves an ordinary violation, it will be covered by the grievance machinery
➢ Proper remedy is to submit for grievance and voluntary arbitration
❖ Economic demands not arising from CBA deadlock
➢ Union officers may have not properly attended the union labor seminars or instructions
➢ You cannot change your mind midway of the contract
❖ Trivial matters
➢ Only grave violations are considered as strikeable

Welga ng Bayan ❖ Illegal work stoppage, no labor dispute between Employer and Strikers
❖ May be treated as absent without leave (AWOL)
❖ Union/strikers can join “welga” but on their own time
➢ There is no prohibition, but make sure you file a proper leave

Replacement of ❖ Economic strike

Workers ➢ Employer may hire replacements on a permanent basis and is not bound to discharge them
should strikers decide to resume their employment
➢ This may be the consequence of engaging with replacement workers
➢ Deadlock strikes
➢ Here, the employer has the preferential choice, and can choose to keep the returning employee
or replace him with the replacement. (Note, this is just inference. No basis)
■ If there really is only one position and it would be redundant to keep the returning
employee and the replacement, the returning employee will be preferred.
■ However, if indeed replaced, economic strikers are entitled to recall if they are qualified
when openings occur (NLRB.gov)

❖ ULP strike
➢ Replacements hired may have to be dismissed should the strike be declared legal
➢ The strikers are favored
➢ Here, the returning worker has the preferential choice of returning, which the employer and
replacement worker have to follow.
➢ What if the strike was very long and the replacement workers already acquired security
of tenure?
■ The employer still has no choice but to dismiss the temporary employees, but should
give them separation pay

Strike Duration ❖ Economic strike

Pay/Backwages ➢ Rule is No Work, No Pay
➢ Worker may claim wages from Union

❖ ULP Strike
➢ Voluntary strikers → no backwages
➢ Involuntary strikers → entitled to backwages
■ Those directly affected by the ULP
■ Though both are entitled to reinstatement
➢ What about those who sympathized? → not entitled to backwages because they were
voluntary
➢ E.g. Union Busting led to 8 workers being dismissed, leading to a strike. Those who went to
strike may receive back wages, those who sympathized do not.

❖ Offer to Return to Work by the Strikers

➢ If unconditional, refusal by the employer to accept will entitle strikers to backwages
➢ As long as not subject to any condition
■ E.g. +2 days of union leave is considered a condition

Loss of ❖ Art. 264(a)

Employment ❖ Union officers lose employment if:
Status ➢ Non-compliance of objective test
■ Knowingly participate in an illegal strike
■ Non-compliance with legal requirements

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 ➢ Non-compliance of unlawful means test
■ Knowingly participate in illegal acts

❖ Workers lose employment if:

➢ Knowingly participate in illegal acts
➢ Defiance of RTWO is an illegal act
❖ Liability for Violent Acts
➢ Individual liability, if isolated acts, without knowledge/sanction of union officers
■ If there is conspiracy, all are liable
➢ Collective, if pervasive or widespread
❖ Decree of loss of employment
➢ Consequence of a finding of an illegal strike
➢ Employer may not dismiss workers while petition is pending

Reinstatement/ ❖ Applicability
Readmission ➢ In the event of readmission of employees

❖ No discrimination in readmission with respect terms/conditions of employment

❖ Employer may impose certain conditions not related to terms and conditions of employment
❖ Worker forfeits reinstatement when he fails to report at the earliest opportunity following RTW order
➢ E.g. there was a strike and then a pandemic. When is the earliest opportunity to return to work?
After the MECQ, for example.
❖ Voluntary or unconditional reinstatement of workers may render issue on illegality of strike moot and
academic

Improved Offer ❖ Art. 265

Balloting ❖ DOLE to conduct referendum on improved offer of employer/reduced offer of union on or before 30th
day of strike
➢ After the 30th day, the government will intervene. The government has to intervene because
more than 30 days is contrary to public interest
❖ RTWO, if majority of strikers/employer accepts
❖ In labor relations law, walang forever
➢ At some point, employment will end
➢ The Improved Offer Balloting helps deal
➢ Usually, this is done during a collective bargaining deadlock

Criminal ❖ Art. 266

Proceedings ❖ Arrest, detention, investigation and prosecution of complaint for criminal acts arising out of a labor
dispute need clearance from DOLE Secretary
❖ Complaints already filed/pending shall be suspended until cases with labor tribunals are completed.
➢ This does not mean it is a prejudicial question; just inform the prosecutor

Damages ❖ Each party will bear its own loss

❖ Injury incidental to a lawful strike is damnum absque injuria
❖ Unions will be liable for the acts of its officers, etc.
➢ Unless actsare unauthorized or unratified or committed by individual members on their own
❖ E.g. members and officers conspired, therefore the damages will be collectively borne by them
❖ Union or officers not liable for acts of individual members acting on their own in violation of admonition
or warning.

Injunction ❖ Only DOLE Secretary can enjoin a strike by assumption jurisdiction/certification to NLRC
❖ NLRC may issue an injunction to restrain the commission of prohibited acts in Art. 264
❖ Innocent bystander rule:
➢ Innocent bystander may seek injunction from regular courts, there being no ER-EE relationship
between him and the strikers
➢ Usually neighbors of workplaces, where there is right of way or passage blockage. They can
ask for injunctive relief from the regular courts
❖ Remind sir about this anecdote

Notes on Strikes
❖ What is an economic strike, unfair labor practice strike
❖ What is a deadlock strike
❖ What is a union recognition strike
➢ This is not allowed
➢ In the Philippines, what is prescribed is that there should be a certification election

Economic Strike
❖ Definition:
➢ One staged by workers to force wage or other economic concessions from the employer which he is not
required by law to grant.56
❖ Since the possibility of disagreement over terms and conditions of employment is implicit in the process of collective
bargaining, the Supreme Court has held in certain cases that the validity of an economic strike cannot be made to
depend upon the capacity of the employer to grant the strikers’ demands, given the absence of any compulsion on
the part of the employer to agree to the proposals or to make any concessions.

Unfair Labor Practice Strike

56
Consolidated Labor Association vs Marsman Company, 11 SCRA 589

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 ❖ A concerted activity of employees, an unfair labor practice is resorted to as a deliberate measure to compel the employer
to cease and desist from committing any of the unfair labor practice acts as enumerated and defined under Art. 248 of the
Labor Code.
❖ Economic and ULP Strikes: The Need for Distinction
➢ While the law requires prior notice for both economic and unfair labor practice strikes, the different periods on
notice obviously would make the distinction between one and the other still necessary, compliance with the
notice periods being considered mandatory.

Striker’s Rights in ULP Strikes

❖ Protection against Discrimination
❖ Reinstatement - Mere participation of workers in a lawful strike shall not constitute sufficient ground for the termination of
their employment even if the replacements had been hired by the employer during such lawful strike.
❖ Backwages: Two categories of employees involved:
➢ those directly and adversely affected by the employer’s ULP;
➢ those who voluntarily joined the strike in protest against the employer’s ULP;

Union Recognition Strike

❖ One calculated to compel the employer to recognize one union over another as the employee’s bargaining representative
➢ With the purpose of collective bargaining, notwithstanding the striking union’s doubtful majority status to merit
voluntary recognition or lack of formal certification as the EBR in the BU.
❖ Present law categorically prohibits strikes for union recognition.
❖ HOWEVER:
➢ A strike declared by a labor organization designated or selected by the majority of the employees to be their
Exclusive Bargaining Representative (EBR) to compel the employer to bargain collectively with would
obviously be a protected union activity and should not be confused with a strike for union recognition.

Jurisprudence on Strike:
❖ A union member may not be held responsible for the union’s illegal strike on the sole basis of such membership or on
account of his having voted affirmatively for the holding of the strike later declared illegal.57
❖ Striking professors do not lose their status as employees by going on strike and they may be reinstated even if their
teaching contracts had expired.58
❖ A strike is not illegal if the strikers believe in good faith that the employer has committed an unfair labor practice. 59
➢ This is the GOOD FAITH STRIKE rule
❖ Where the workers declared a strike on the good faith belief that the company had committed unfair labor practices, the
strike is legal and the workers do not forfeit their employment.60
❖ A strike without prior notice and in disregard of the no-strike clause of the CBA is not illegal where it was declared in
protest against the dismissal of the union president for his union activities.61
❖ It is legal to stipulate in a CBA that in case of unfair labor practice, no strike or lockout will be held until the grievance is
resolved.62

Security of Tenure
Management Prerogatives
❖ These are the collective rights of the employment relationship
➢ Regulate employment
■ The employer is free to regulate all aspects of employment (prescribe working methods, time, place,
manner and other aspects of work) according to his own judgment and discretion
■ The hiring, firing, transfer, demotion and promotion is traditionally a management prerogative subject
only to the limitations established by:
● Law, collective bargaining agreement (CBA), and general principles of fair play and justice.
■ Generally, you would always prefer to have productive employees, otherwise they are subject to
discipline/dismissal.

➢ Discipline/dismissal of employees
■ Discipline of employees is a basic management right and prerogative.
■ The employer cannot be compelled to maintain in his employ undeserving or undesirable employees.
■ The employer may demand observance of reasonable company rules and regulations and provide
appropriate penalties for violation thereof.

Requirements for valid dismissal

❖ A regular employee may not be dismissed except for just or authorized cause and after due process

Ways of Dismissal

Ways of Dismissal

Cause NOTES:

Just Causes ❖ Attributable to the employee’s act or omission

Authorized Causes ❖ Not attributable to the employee

❖ There are conditions and events allowing the employer to terminate the services of the employee
❖ Causes for termination

57
ESSO Phils. V. Malayang Manggagawa sa ESSO, 75 SCRA 73
58
FEATI Univ. v. Bautista, 18 SCRA 1191.
59
Pepsi Cola Labor Union v. NLRC 114 SCRA 930.
60
Ferrer v. CIR, 17 SCRA 353.
61
Phil. Metal Foundries v. CIR, 90 SCRA 135.
62
GOP Workers v. CIR, 93 SCRA 118.

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 By Employer ❖ Just cause
❖ Authorized cause

By Employee ❖ Resignation

Special Causes ❖ Disease

❖ Retirement
➢ Age 65: because there are some studies indicating that at this age, your productivity is not
efficient
■ To also give these citizens an opportunity to rest and enjoy their retirement benefits

Just causes, up close

Just Causes (SWAN FC)

Cause NOTES:

Serious ❖ Requisites (WIG):

misconduct a. Intent, intentional violation of an established or defined rule of action
b. Grave and aggravated in character
c. Work-connected

❖ What must be proved for misconduct and ground for dismissal?

a. Must be serious
b. Must relate to the performance of the employee’s duties, and
c. Must show that the employee has become unfit to continue working for the employer.63
➢ Act of defending self is not considered as misconduct, even if they were wearing a uniform

❖ Examples:
➢ Acts destructive of the morale of co-employees
■ Such acts even if they were committed outside of the workplace
■ This is more pertinent now, due to social media
➢ Circulation of e-mail subversion and undermining authority and credibility of management
➢ Assailing employer in union newspaper which is inimical to the interest of the employer
➢ Circulation of manifesto ridiculing the management and demanding their removal and disrupting
the good order and decorum in school
➢ Libel against an immediate superior
➢ Possession and use of shabu
➢ Immorality
■ E.g. Chua-Qua
➢ Sexual intercourse inside company premises
➢ Fighting within the work premises
➢ Challenging superiors to a fight
➢ Fighting in the presence of superiors
➢ Assaulting another employee
➢ Utterance of obscene, insulting or offensive words
➢ Gambling
➢ Rendering service to business rival
➢ Selling products of a competitor
➢ Intoxication

CASE: Capin-Cadiz v. Brent Hospital and Colleges, Inc. G.r. No. 187417, February 24, 201664

➢ FACTS:
■ Cadiz was the Human Resource Officer of respondent Brent Hospital and Colleges, Inc. (Brent) at the time of her
indefinite suspension from employment in 2006. The cause of suspension was Cadiz’s unprofessionalism and
unethical behavior resulting to unwed pregnancy. It appears that Cadiz became pregnant out of wedlock, and Brent
imposed the suspension until such time that she marries her boyfriend in accordance with law.
■ In this case, the surrounding facts leading to Cadiz’s dismissal are straightforward--she was employed as HRO in an
educational and medical institution of the Episcopal Church of the Philippines; she and her boyfriend at the time were
both single; they engaged in premarital sexual relations, which resulted into pregnancy.
■ The labor tribunals characterized these as constituting disgraceful or immoral conduct. They also sweepingly
concluded that as HRO, Cadiz should have been the epitome of proper conduct and her indiscretion “surely
scandalized the Brent community.”

➢ ISSUE:
■ Whether or not Cadiz’s act of getting pregnant is disgraceful and immoral, resulting to a just dismissal

➢ HELD:
■ NO.
■ The foregoing circumstances do not readily equate to disgraceful and immoral conduct.
■ Brent's Policy Manual and Employee's Manual of Policies do not define what constitutes immorality; it simply stated
immorality as a ground for disciplinary action.
■ Brent erroneously relied on the standard dictionary definition of fornication as a form of illicit relation and proceeded to
conclude that Cadiz's acts fell under such classification, thus constituting immorality.
■ Jurisprudence has already set the standard of morality with which an act should be gauged - it is public and secular,
not religious. Whether a conduct is considered disgraceful or immoral should be made in accordance with the

63
Lopez v. NLRC, December 13, 2005.
64
https://lawphil.net/judjuris/juri2016/feb2016/gr_187417_2016.html

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 prevailing norms of conduct, which, as stated in Leus, refer to those conducts which are proscribed because they are
detrimental to conditions upon which depend on the existence and progress of human society.
■ The fact that a particular act does not conform to the traditional moral views of a certain sectarian institution is not
sufficient reason to qualify such an act as immoral unless it, likewise, does not conform to public and secular
standards. More importantly, there must be substantial evidence to establish that premarital sexual relations and
pregnancy out of wedlock is considered disgraceful or immoral.

➢ Doctrine: Marriage as a condition for reinstatement

■ In this case, Brent imposed on Cadiz the condition that she subsequently contract marriage with her then boyfriend for
her to be reinstated. According to Brent, this is "in consonance with the policy against encouraging illicit or
common-law relations that would subvert the sacrament of marriage."
■ Brent's condition is coercive, oppressive and discriminatory. There is no rhyme or reason for it
■ It forces Cadiz to marry for economic reasons and deprives her of the freedom to choose her status, which is a
privilege that inheres in her as an intangible and inalienable right. While a marriage or no-marriage qualification may
be justified as a "bona fide occupational qualification,"
■ Brent must prove two factors necessitating its imposition, viz:
(1) That the employment qualification is reasonably related to the essential operation of the job involved;
(2) That there is a factual basis for believing that all or substantially all persons meeting the qualification would
be unable to properly perform the duties of the job. Brent has not shown the presence of neither of these
factors.

Perforce, the Court cannot uphold the validity of said condition.

❖ CASE: Union School International and Jennifer Mandapat v. Charley Jane Dagdag, G.R. No. 234186, November 21,
2018.65

➢ FACTS:
■ Dagdag was employed as an Elementary School Teacher on a probationary status by Union School from July 16,
2012 to May 31, 2013. During her employment, or on November 23, 2012, she found out that she was eight weeks
and five days pregnant. Soon thereafter, Dagdag informed Mandapat of her pregnancy and that the father of the child
was marrying another woman. As Dagdag was single, the matter of being charged with gross immorality and
Dagdag's resignation was discussed.
■ On December 12, 2012, Dagdag received a copy of a notice addressed to the members of the Grievance Committee
to attend to a Teacher's Disciplinary Committee on December 14, 2012 regarding the disciplinary action against her
for gross immorality.
➢ ISSUE:
■ Whether or not Dagdag’s act was considered immoral.
➢ HELD:
■ NO.
■ To determine whether a conduct is disgraceful or immoral, a consideration of the totality of the circumstances
surrounding the conduct; and an assessment of the said circumstances vis-a-vis the prevailing norms of conduct,
i.e., what the society generally considers moral and respectable, are necessary.
■ The totality of evidence in this case does not justify the dismissal of Dagdag from her employment considering that
there was no legal impediment to marry between Dagdag and the father of her child at the time of the conception.
■ To reiterate the ruling of this Court in Leus and Capin-Cadiz, pregnancy of a school teacher out of wedlock is not
a just cause for termination of an employment absent any showing that the pre-marital sexual relations and,
consequently, pregnancy out of wedlock, are indeed considered disgraceful or immoral.

➢ Doctrine: Concept of Immorality

Willful ❖ Requisites:
Disobedience a. Willful or intentional misconduct characterized by a wrongful or perverse attitude
b. Order violated is reasonable and lawful and made known to the employee
c. Order must pertain or relate to duties of the employee

❖ Examples:
➢ Failure to answer memo to explain
➢ Rules against marriage
■ Valid if reasonable under the circumstances because relationships of that nature might
compromise the interest of the company
● E.g. GSK reps from contracting marriage with another person employed by a
competitor firm
■ Not valid if it is made as a condition of employment
➢ Unauthorized use of company vehicles
➢ Smoking in restricted areas
➢ Rule on mandatory drug testing is valid
➢ Unauthorized encashment of check

Gross and ❖ This ground is inconsistent with the previous two. There, the element is intent. Here, it is just gross
Habitual Neglect of and habitual neglect.
Duties ❖ Requisites:
➢ Negligence must be both GROSS and HABITUAL
➢ However, habituality may be disregarded where there is grave or actual loss or prejudice
suffered by the employer.
■ Gross → utter disregard or want of slight

❖ Examples:
➢ Excessive absences

65
https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/64870

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 ➢ Abandonment
➢ Failure to attain work/production quotas
❖ Doctrine: Excessive absences was due to pregnancy. Pregnant women cannot be terminated for that
reason

CASE: Del Monte Philippines, Inc. v. Lolita Velasco, G.R. No. 153477, March 6, 200766
➢ FACTS and ISSUE:
■ The essential question is whether the employment of respondent had been validly terminated on the ground of
excessive absences without permission on account of pregnancy.
➢ HELD:
■ Petitioner’s contention that the cause for the dismissal was gross and habitual neglect unrelated to her state of
pregnancy is unpersuasive.
■ The Court agrees with the CA in concluding that respondent’s sickness was pregnancy-related and, therefore, the
petitioner cannot terminate respondents services because in doing so, petitioner will, in effect, be violating the Labor
Code which prohibits an employer to discharge an employee on account of the latter’s pregnancy a prohibited act.

Fraud or willful ❖ Fraud

breach of ➢ Malicious non-performance of one’s obligation
trust/confidence ➢ It connotes bad faith and an intentional act to cause damage or prejudice to the employer
thereby breaching the employer’s trust and confidence in the employee.
➢ Commission of fraud leads to loss of trust and confidence

❖ Notes:
➢ Lack of damage or losses no necessary
➢ Restitution does not have absolutory effect
■ Just cause they return what they took, does not have effect of deleting the breach of trust
➢ Failure to deposit collection constitutes fraud
■ Most common types of fraud happen in warehouses, where the outer cases are full
goods, but the ones inside are hollow.
➢ Lack of misappropriation or shortage is immaterial in case of unauthorized encashment of
personal checks by teller and cashier.

❖ Breach of trust and confidence, concept:

➢ The basic premise for this ground is that the employee occupies a position imbued with trust
and confidence as when the employee handles cash or property of the employee.
➢ Ordinarily, a rank-and-file employee’s position is not reposed with trust and confidence similar
to a supervisor or managerial employee.
➢ However, it is the nature of the employee’s work and the scope or special character of his
duties and not his designation that determines whether or not the position is imbued with
trust and confidence.
➢ To be a valid ground for dismissal, the loss of trust and confidence should NOT be
simulated.
■ It should not be used as a subterfuge for causes which are improper
■ It should not be arbitrarily asserted in the face of overwhelming evidence to the contrary
■ The loss must be genuine
■ Should not be an afterthought to justify earlier actions taken in bad faith.
■ It should be the main reason
➢ Proof beyond reasonable doubt is NOT required to justify dismissals for loss of trust and
confidence.
■ It is sufficient that there is some basis or reasonable ground to believe if not entertain the
moral conviction that the employee concerned is responsible for misconduct and his
participation therein renders him unworthy of the trust and confidence demanded by his
position.
■ Especially in the case of supervisory employees

❖ What amount of proof is needed for dismissals based on loss of confidence?

➢ Loss of confidence as a ground for dismissal does not require proof beyond reasonable doubt.
➢ The law requires only that there be at least some basis to justify it.67

❖ How do managerial employees and rank-and-file personnel differ as regards the Doctrine of
Loss of Trust and Confidence?
➢ For rank-and-file personnel → requires proof of involvement in the alleged events in question
and that mere uncorroborated assertions and accusation by the employer will not suffice
➢ For managerial employees → mere existence of a basis for believing that such employee has
breached the trust of his employer would suffice for his dismissal68
➢ That is why in establishments, CCTV is necessary to look after employees handling cash and
transactions

❖ What are the criteria for loss of confidence as a ground for dismissal?
➢ The loss of confidence should NOT be:
a. Simulated
b. Used as a subterfuge for causes which are improper, illegal, or unjustified
c. Arbitrarily asserted in the face of overwhelming evidence to the contrary, and
d. A mere afterthought to justify earlier action taken in bad faith. 69

66
https://lawphil.net/judjuris/juri2007/mar2007/gr_153477_2007.html
67
Ramatek Phils., Inc. v. De los Reyes, October 25, 2005.
68
Picar v. Shangri-La Hotel, December 14, 2005.
69
Wah Yuen Restaurant v. Jayona, December 16, 2005.

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 Commission of ❖ To justify dismissal, the crime or felony must have been committed against the employer, an
crime immediate member of his family, or the employer’s duly authorized representative
➢ So in the possession of illegal drugs, it is not necessarily a ground for dismissal
➢ It falls within the ground, serious misconduct
❖ Criminal conviction is not necessary to provide just cause for dismissal

Analogous Causes ❖ These are normally causes that have similar connotations as the specific causes mentioned above
➢ I.e. Sexual harassment, immorality, etc.

❖ Is an attitude problem a valid ground for the termination of an employee?

➢ Yes, bad attitude can be a ground for termination70
➢ An employee who cannot get along with his co-employees is detrimental to the company for he can upset
and strain the working environment. Without the necessary teamwork and synergy, the organization cannot
function well.
➢ Thus, management has the prerogative to take the necessary action to correct the situation and protect its
organization. When personal differences between employees and management affect the work
environment, the peace of the company is affected.
➢ Thus, an employees’ attitude problem is a valid ground for his termination.
■ It is analogous to loss of trust and confidence.

Authorized Causes (LRRC)

Cause NOTES:

Installation of ❖ Technology over Men

Labor-Saving ➢ Machines are more efficient than human beings
Devices ❖ It is the employer’s prerogative to use the most efficient equipment and technology to remain
competitive, streamline operations or adopt new methods and methodology to remain competitive or
maximize profits.
❖ Business losses or reverses, whether actual or imminent, are not necessary to justify termination of
employment due to installation of labor-saving devices

❖ Example:
➢ Employee-monitoring systems (through CCTV)
➢ Immigration “officers” are now robots

❖ If you are the employee affected, can you question this?

➢ No. It is management prerogative
➢ Employees replaced are entitled to separation pay
■ Separation Pay is one month pay or at least one month pay for every year
of service, whichever is higher

Redundancy ❖ Redundancy exists where the services of an employee are in excess of what is reasonably demanded
by the actual requirements of the enterprises.
❖ The stress in on the “position” and not on the “person occupying” the position
❖ The characterization of the service/position of the employee as redundant is an exercise of business
judgment by the employer over which labor tribunals must generally recognize and uphold.
❖ This does not require the existence or proof of business losses. It may be availed of by the
employer as a cost-cutting measure and to streamline operations.
❖ Example:
➢ Merger between two companies from the same industry or with similar departments or divisions
➢ Merging will result to an excess of positions
➢ Or after positional audits, the company will see which positions are redundant and must be
removed
❖ Note positions that are necessary by law.

Retrenchment ❖ Retrenchment or “lay-off”

➢ The reduction of personnel in response to adverse economic losses.
➢ Retrenchment is the only authorized cause requiring proof of actual or imminent losses for
dismissal.

❖ “To Prevent Losses"

➢ Means that retrenchment is resorted to before the anticipated losses are actually sustained
or realized.
➢ Not every asserted possibility of loss is sufficient legal warrant for the reduction of personnel.
➢ Audited Financial Statements must properly establish the actual or imminent losses.
■ Audit must have been undertaken by an external auditor

❖ The standards for valid retrenchment are:

1. The losses should be substantial and not merely de minimis in extent;
2. The substantial loss apprehended must be reasonably imminent, with a certain degree of
urgency to reduce personnel;
3. Retrenchment is reasonably necessary and likely to prevent the expected losses and the
reduction of personnel must be resorted to only after the employer has taken prior or parallel
measures to forestall losses; and
4. Proof of actual or imminent losses.

70
Heavylift Manila, Inc. v. CA, October 20, 2005.

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 ❖ In case of retrenchment, actual termination for cost-cutting purposes
➢ To prevent losses
➢ Employer is allowed to terminate
➢ Skeletal force for the company to weather the financial crisis
➢ Separation pay of 1 month pay, or at least ½ month pay for every year of service,
whichever is higher
■ A fraction of 6 months service is considered a whole year
■ For example, X’s monthly pay is P100,000/month and he is terminated due to
retrenchment by Company Z
● If he has worked with Company Z for only 9 months, he gets P100,000 as SP
● If he has worked with Company Z for 2 years, he gets P100,000 as SP
● If he has worked with Company Z for 3 years, he gets P150,000 as SP
➢ Retrenchment is the last option

❖ Example:
➢ 349, number fever
➢ It so happened that thousands of Filipinos won the raffle, an error in printing.
➢ Resulted to massive losses, up to P8 Billion

Closure or ❖ The employer may close down or cease his business operations even if he is not suffering from
Cessation of financial losses or reverses.
Operations ❖ This move is purely a business judgment because no one can be compelled to do something
against his will.
❖ The prerogative to close down or cease operations extends to closing or abolishing a department
or section of the employer's establishment or operations.
❖ Two kinds of closure
➢ Closure due to losses
■ Due to bankruptcy
● When liabilities exceed its assets
■ No separation pay required
➢ Closure due to causes other than losses
■ Example: owner simply no longer wants to operate. No explanation needed.
■ Separation pay of 1 month pay, or at least ½ month pay for every year of service,
whichever is higher
● A fraction of 6 months service is considered a whole year (same above)

Other Causes

Disease ❖ The conditions for dismissal are:

1. The employee is suffering from a disease that makes his continued employment either
prohibited by law or prejudicial to his health or to the health of his co-workers.
2. Certification by a competent Public Health Authority that the disease is of such nature or at
such stage that it cannot be cured within a period of SIX (6) MONTHS even with prior medical
treatment.
3. Payment of SEPARATION PAY In the amount equivalent to one-half (1/2) month salary for
every year of service.
a. Separation pay of 1 month pay, or at least ½ month pay for every year of
service, whichever is higher
i. A fraction of 6 months service is considered a whole year

❖ DR was dismissed by SMC Corp. on the ground of redundancy. The criterion allegedly used by SMC
in reorganizing its sales unit was the employment status of the employee. However, in the
implementation thereof, SMC erroneously classified DR as a probationary employee, resulting in the
dismissal of the latter. Is this termination valid?
➢ The absence of criteria and the erroneous implementation of the criterion selected, both render
invalid the redundancy because both have the ultimate effect of illegally dismissing an
employee.71

❖ Is the bare fact that a business establishment suffered losses sufficient to constitute serious
business losses?
➢ The bare fact that an employer may have sustained a net loss, such loss, per se, absent any
other evidence on its impact on the business, nor on expected losses that would have been
incurred had operations been continued, may not amount to serious business losses mentioned
in the law.
➢ The employer must also show that its losses increased through a period of time and that the
condition of the company will not likely improve in the near future.72

❖ PICOP ceased the operation of its security force. No evidence was presented that it was
suffering from business losses. Was the closure a valid management prerogative?
➢ Yes.
➢ An employer may close or cease his business operations even if he were not suffering from
business losses or financial reverses.73

Retirement ❖ The Private Retirement Law

(R.A. 7641) ➢ Applies to all employees in the private sector regardless of their position, designation or status
and irrespective of the method by which their wages are paid

71
San Miguel Corp. v. Del Rosario, December 13, 2005.
72
Phil. Carpet Employees Associaiton v. Sto. Tomas, February 22, 2006.
73
Association of Integrated Security Force of Bislig (AISFB)-ALU v. CA, August 22, 2005.

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 ➢ Except employees of retail, service and agricultural establishments or operations employing
not more than TEN (10) employees.
❖ Minimum Service Requirement
➢ At least FIVE (5) YEARS
➢ Including authorized absences and vacations, regular holidays and mandatory fulfillment of a
military or civic duty.

❖ Optional Retirement
➢ Is at Sixty (60) years of age.
❖ Compulsory Retirement Age
➢ Sixty-Five (65) years old.

❖ The components of ONE-HALF MONTH SALARY are:

1. FIFTEEN (15) DAYS pay;
2. Cash Equivalent of FIVE (5) DAYS Service Incentive Leave;
3. ONE-TWELFTH (1/12) of the 13th Month Pay;
4. All other benefits under the employment contract or voluntary employer policy/practice.

❖ In retirement, “One-half month salary” is equal to Twenty-two and a half (22.5) days
➢ In consideration of the fifteen (15) days pay, five (5) days SIL, 1/12 13th Month pay
➢ Computation:
■ ½ Month for every year of service
■ Number of years x daily pay x 22.5 days

Suspension of ❖ BONA FIDE suspension of operations (partial or full) or the "temporary lay-off" of employees for a
Operations period not exceeding SIX (6) MONTHS.
(Article 286) ➢ The suspension may be LESS but never MORE than six months.
➢ If more than six months, the employees are entitled to separation pay
❖ The suspension is bona fide if:
➢ Not resorted to for the purpose of defeating the rights of the employees under the law, i.e.
union-busting.

❖ The principle of "no work, no pay" applies during the suspension.

➢ However, at the end of the six-month period, the employer must either re-open and recall the
employees
➢ Or pay them the appropriate separation pay for the "constructive dismissal".

❖ In the event of stoppage or suspension of operations of the employer because of the latter's fault,
➢ The employer shall be liable for the payment of the wages and benefits of the employees during
the period.

❖ Sir will delete this because it is unfair

➢ Employer is allowed to suspend operations for not more than 6 months
➢ The employee will look for another job. But how can you return?
➢ Free pass of employers to avoid separation pay
➢ Technically they have abandoned their work, so it seems as if they have resigned

Summary of Reliefs

Cause Relief

Just Causes ❖ No separation pay, backwages, or reinstatement is granted

Authorized Causes:

Labor Saving ❖ Separation Pay is one (1) month pay or at least one (1) month pay for every year of service,
Devices whichever is higher
➢ A fraction of 6 months service is considered a whole year
Redundancy

Retrenchment ❖ Due to losses

➢ NO Separation Pay needed
❖ To Prevent Losses
➢ Separation pay of one (1) month pay, or at least one-half (½ )month pay for every
year of service, whichever is higher
■ A fraction of six (6) months service is considered a whole year

Closure ❖ Closure due to losses

➢ NO Separation Pay required

❖ Closure due to causes other than losses

➢ Example: owner simply no longer wants to operate. No explanation needed.
➢ Separation pay of one (1) month pay, or at least one-half (½ ) month pay for every
year of service, whichever is higher
■ A fraction of six (6) months service is considered a whole year

Other Causes:

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 Disease ❖ Separation pay of one (1) month pay, or at least one-half (½ ) month pay for every year of
service, whichever is higher
➢ A fraction of six (6) months service is considered a whole year

Retirement ❖ Separation Pay of one-half (½) month pay for every year of service
❖ In retirement, “One-half month salary” is equal to Twenty-two and a half (22.5) days
➢ In consideration of the fifteen (15) days pay, five (5) days SIL, 1/12 13th Month pay
➢ Computation:
■ ½ Month for every year of service
■ Number of years x daily pay x 22.5 days

Suspension of ❖ No benefits
Operations ❖ UNLESS, at the end of the six-month period, the employer does not either re-open and recall the
employees
❖ Separation Pay

Procedural Due Process

❖ Dismissal for JUST CAUSE
➢ Two-Notice Rule (charges and grounds for dismissal);
■ First notice: what are your charges?
● What acts did you violate?
● Right to a counsel, administrative hearing, present evidence on your behalf
● All rights should be observed
◆ Right to answer
■ Second notice: termination letter
● If the company still believes you have committed a violation that is dismissible by just or
authorized causes, or a company code of discipline.
● You will be informed of your termination
➢ Administrative Hearing/Investigation

❖ Dismissal for AUTHORIZED CAUSES

➢ At least thirty (30) days written notice to both the DOLE and the affected employees
➢ 30 day notice rule
■ 30 days before actual termination
■ A copy is furnished to the DOLE
➢ Certification of employment is used
■ But this and others can be withheld if the employees still have pending payments to the company

What is the controlling jurisprudence as regards dismissal effected without compliance with the notice requirement?
❖ Termination
➢ The dismissal should be upheld because it was established that the petitioners abandoned their jobs to work
for another company.
➢ Private respondent, however, did not follow the notice requirements. Thus, it should be held liable for
non-compliance with the procedural requirements of due process.
■ Usually there will be fines for non-compliance (rule before)

❖ Serrano Doctrine Abandoned

➢ The rationale for the examination of the Wenphil doctrine in Serrano was the significant number of cases
involving dismissals without requisite notices.
➢ We concluded that the imposition of the penalty by way of damages was not serving as a deterrent. Hence, we
now required payment of full backwages from the time of dismissal until the time the Court finds the dismissal
was for a just or authorized cause.
■ It is as if the employee is being rewarded because backwages are big
❖ Agabon case (Main doctrine now)
➢ If there is non-compliance with the procedural aspect, the employer will be liable for nominal damages
➢ There is a recognition that a right was violated
■ Usually P20,000-30,000

Is it required of the employer that the same criteria shall be used in terminating employees?
❖ Yes
❖ An employer commits grave abuse of discretion where, in laying off an employee, it does not apply the same criteria it
applied in the previous lay-off of its other employees.74

What reliefs may be availed of by an employee who was dismissed without due process?
❖ Where the dismissal is for a just cause, the lack of statutory due process should not nullify the dismissal, or render it
illegal, or ineffectual, but the employer should indemnify the employee for the violation of his statutory rights in the form
of nominal damages.75

Preventive Suspension
❖ The employer may place the employee under preventive suspension for a period not exceeding THIRTY (30) DAYS
pending resolution of the administrative charges against him if the continued presence of the employee in the company
premises poses a serious and imminent threat to the life or property of the employer or his co-employee.
➢ If the period exceeds thirty days, employee has to be reinstated in the payroll
❖ Preventive Suspension is NOT a penalty but a preliminary step in an administrative investigation. Subjecting an employee
to preventive suspension does not by itself signify that the employer has adjudged the employee guilty of the charges
against him.

74
Becton Dickingson Phils., Inc. v. NLRC, November 15, 2005.
75
Durban Apartments Corp. v. Catacutan, December 14, 2005.

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 ❖ As a rule, the employee under preventive suspension is not entitled to wages under the principle of "no work, no pay"
unless there is a company policy/practice or CBA provision mandating payment of his wages.
❖ It is NOT AUTOMATIC
➢ Requirements are needed, including imminent threat to life or property

Give one instance when an employer may preventively suspend an employee.

❖ Employer may place the worker concerned under preventive suspension if his continued employment poses a serious
and imminent threat to the life or property of the employer or of his co-workers.
❖ When it is determined that there is no sufficient basis to justify an employee’s preventive suspension, the latter is entitled
to the payment of salaries during the time of preventive suspension.76

Constructive Dismissal/Resignation
❖ Forced Resignation
➢ or the act of "quitting" because continued employment is rendered impossible, unreasonable or unlikely
as in the case of demotion in rank or diminution in pay or privileges and benefits, or illegal/invalid
transfers/reassignments.
➢ A "VOLUNTARY RESIGNATION" is not constructive dismissal.
❖ Floating/Reserve Status
➢ is the temporary "off-detail' of security guards pending posting or reassignment not to exceed SIX (6) MONTHS.
Thereafter, the employee is considered constructively dismissed if he is not given a new assignment or posting.
❖ Bona fide suspension of operations under Article 286 exceeding six (6) months results in constructive dismissal.

Reliefs (ARTICLE 279)

Reliefs

Cause NOTES:

Reinstatement ❖ An employee who is unjustly dismissed shall be entitled to reinstatement without loss of seniority
rights and other privileges.
❖ Reinstatement is the restoration of the employee to his employment status prior to dismissal.
❖ Given even if not prayed for in the complaint.

Reinstatement ❖ Dismissal is illegal if without a just or authorized cause

Pending Appeal ❖ In the event of an order of reinstatement by the Labor Arbiter after a finding of illegal dismissal, the
employer, even during the pendency of an appeal, shall:
➢ Reinstate the employee to his work under the same terms and conditions prevailing prior to
his dismissal (ACTUAL REINSTATEMENT); or
➢ Reinstate him in the payroll without requiring the employee to report: for work (PAYROLL
REINSTATEMENT).
❖ The OPTION to reinstate either actually or in the payroll belongs to the employer.
❖ Upon receipt of the order to reinstate and without need for the issuance of a writ of execution, the
employer is obliged to officially inform the Labor Arbiter and the employee the option chosen.

Backwages ❖ The illegally dismissed employee is entitled to his FULL BACKWAGES, inclusive of allowances and to
his other benefits or their monetary equivalent from the time his compensation was withheld from him
until his actual reinstatement.
❖ The SALARY RATE prevailing at the time of dismissal shall be the basis for the computation of
backwages. In case of appeal, the employer is required to put an APPEAL BOND equivalent to the
monetary judgment to answer for the award for backwages, other money claims, except damages and
attorney's fees.

Separation Pay ❖ Separation Pay may be ordered IN LIEU OF REINSTATEMENT

➢ At the rate of ONE-MONTH PAY for every year of service using the salary prevailing at the time
the reinstatement is ordered,
➢ When such reinstatement is no longer feasible for certain reasons, /.e. strained relations,
position no longer exists, length of time etc.
❖ In termination of employment for authorized causes, the amount of separation is
➢ ONE MONTH PAY or at least ONE (1) MONTH PAY for every year of service in
Installation of Labor Saving Devices or Redundancy;
➢ ONE MONTH PAY or at least ONE-HALF MONTH (1/2) PAY for every year of service
In Retrenchment to Prevent Losses and Closure and/or Cessation of
Operations.

❖ The employer is not obliged to pay separation pay in case of retrenchment or closure or cessation of
operations due to losses.
❖ This is in the concept of financial assistance, to allow the employee to survive while they are looking
for work.
❖ Under what circumstance may a dismissed employee be denied his separation pay?
➢ Separation may be accordingly awarded provided that the dismissal does not fall
under...
❖ Separation pay cannot be awarded in lieu...
❖ When is the award of separation pay proper?
➢ The principle of awarding separation pay on the ground of compassionate justice,
or on grounds of equity and social consideration, applies only when the employee is
dismissed by the employer...

Damages: ❖ The legal basis for damages as a consequence of illegal dismissal is the CIVIL CODE not the Labor
Code.

76
Gatbonton v. NLRC.

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 ❖ Damages may be awarded in cases of dismissals attended by malice or bad faith, or when the
acts of the employer are oppressive to labor.
❖ Moral and exemplary damages

Financial ❖ T/his is an equitable award given to an employee who was validly dismissed for cause out of
Assistance compassion taking into account the employee's length of service, gravity of the offense and other
equitable considerations.
❖ However, the award is improper if the employee was dismissed for serious misconduct,
dishonesty, fraud or willful breach of trust and confidence.

Liability of Officers/Directors:
❖ As general rule, officers and directors of a company are not answerable in their personal capacity for backwages
and other related monetary claims unless they acted in bad faith in effecting the employee’s dismissal or if the
corporation has been dissolved.
❖ What is the liability of corporate directors in termination cases done in bad faith?
➢ In labor cases, corporate directors and officers are solidarily liable with the corporation for the termination of
employment of corporate employees done with malice or in bad faith.77

Retirement (R.A. ❖ The Private Retirement Law

7641) ➢ Applies to all employees in the private sector regardless of their position, designation or status
and irrespective of the method by which their wages are paid
➢ Except employees of retail, service and agricultural establishments or operations employing
not more than TEN (10) employees.
➢ 22.5 days
➢ This is the obligation of the employer

❖ Minimum Service Requirement

➢ At least FIVE (5) YEARS
➢ Including authorized absences and vacations, regular holidays and mandatory fulfillment of a
military or civic duty.

❖ Optional Retirement
➢ Is at Sixty (60) years of age.
❖ Compulsory Retirement Age
➢ Sixty-Five (65) years old.

❖ If employer chooses
❖ The components of ONE-HALF MONTH SALARY are:
1. FIFTEEN (15) DAYS pay;
2. Cash Equivalent of FIVE (5) DAYS Service Incentive Leave;
3. ONE-TWELFTH (1/12) of the 13th Month Pay;
4. All other benefits under the employment contract or voluntary employer policy/practice.

❖ An employer can only retire once

❖ What are the factors to determine the reasonableness of a competitive employment ban?
➢ A post-retirement competitive employment ban is unreasonable where it has no
geographical limits.
➢ An employer is burdened to establish that a restrictive covenant barring an employee
➢ In cases where an employee assails a contract containing a provision prohibiting him
from accepting competitive employment as against public policy, the employer has to
adduce evidence to prove that the restriction is reasonable and not greater than
necessary to protect the employer’s legitimate business interests.
➢ In determining whether the contract is reasonable or not. The factors are:
■ Whether the covenant protects a legitimate business interest of the
employer
■ Whether the covenant creates an undue burden on the employee
■ Whether the covenant is injurious to the public welfare
■ Whether the time and territorial limitations contained in the covenant are
reasonable
■ Whether the restraint is reasonable from the standpoint of public policy

III. JURISDICTIONS

JURISDICTIONS

Office Jurisdiction:

National Labor ❖ Labor Arbiter (MUST)

Relations ➢ Unfair Labor Practice (ULP)
Commission ➢ Termination Disputes
(NLRC) ➢ Legality of Strikes under Article 264
➢ Money claims arising from employer-employee relationship, and domestic help /
house helpers:
■ Small claims less than P 5,000, accompanied by a claim for
reinstatement;

77
Kay Products, Inc. v. CA, July 28, 2005.

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 ■ Claims over P 5,000.00, whether or not accompanied with a claim for
reinstatement;
■ Claims for damages;
❖ XPN: Voluntary Arbitration

❖ Commission Proper
➢ Appellate Jurisdiction
➢ Decisions of the Labor Arbiters:
➢ Grounds:
■ prima facie evidence of abuse of discretion on the part of the Labor Arbiter;
■ decision was secured through fraud/coercion including graft & corruption;
■ decision was made purely on questions of law;
■ serious errors in the findings of facts are raised which would cause grave or
irreparable damage/injury to the appellant.
➢ Decisions of the Regional Director in small claims under Article 129 of the Labor
Code;

❖ Injunction in Strikes (Article 218[e]):

➢ Issue TRO or Injunction to restrain the commission of prohibited acts under Article
264 of th4e Labor Code during strikes, lock-outs and other concerted activities;

❖ Certified Cases:
➢ Resolve all matters involved In the controversy or dispute certified to the NLRC by the
DOLE Secretary pursuant to Article 263[g] of the Labor Code;

❖ Promulgate Internal Rules and Regulations and such other rules and regulations as may be
necessary to carry out the purposes of the Labor Code;

Regional ❖ Visitorial / Enforcement Power (Article 128);

Office/Director of ➢ Conduct Routine/Complaint Inspection
DOLE ➢ Issue Compliance Orders for Labor Standards Violation
➢ Enforce Occupational Health and Safety Standards

❖ Small Claims (Article 129);

➢ Power to resolve by summary proceedings small claims not exceeding P 5,000.00
arising from employer-employee relationship/ including domestics/househelpers,
when the worker/employee no longer prays for reinstatement;

❖ Registration/Cancellation Proceedings

❖ Med-Arbiter
➢ Certification Elections
➢ Inter-union/Intra-union Disputes

National ❖ Notice of Strike

Conciliation and
Mediation Board ❖ Preventive Mediation
(NCMB) ➢ Cannot grant a relief
➢ Merely gives assistance to the parties

Bureau of Labor ❖ Registration/Cancellation Proceedings filed directly with It.

Relations ➢ In this case, the BLR's decision is appealable to the DOLE Secretary.
(BLR)
❖ Appellate Jurisdiction over decisions of the DOLE Regional Office in registration/cancellation
proceedings.
➢ The decision of the BLR in the exercise of its appellate jurisdiction is no longer
appealable to the DOLE Secretary, but to the Court of Appeals by Certiorari
proceedings.

Philippine ❖ Suspension/Cancellation of License;

Overseas ❖ Civil aspect of Illegal Recruitment; the criminal aspect is prosecuted before the regular courts.
Employment
Administration
(POEA)

Voluntary ❖ Grievance Machinery

Arbitration ❖ Voluntary Arbitrator

Miscellaneous ❖ Termination Disputes:

Concerns ➢ Remain under the original and exclusive jurisdiction of the Labor Arbiter.
➢ Termination disputes need not go through the Grievance Machinery or Voluntary
Arbitration unless so desired by the parties.

❖ Prescriptive Periods (IMUFE):

➢ Illegal dismissal: four (4) years
➢ Money Claims: three (3) years
➢ Unfair Labor Practice: One (1) year
➢ Formal Protest in Certification Elections: Five (5) days from close of election
proceedings, only on grounds raised during the balloting.

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 ➢ Election Protest (Union Officers): five (5) days from close of election proceedings

❖ Technical Rules of Evidence/Procedure:

➢ Generally not binding in labor law determinations.
➢ The underlying principle is the ascertainment of truth behind the controversy.
Summary proceedings are desired.
➢ For good cause shown, evidence may be presented at any stage of the proceeding,
even on appeal/MR in the interest of justice.

❖ Submission of Position Papers:

➢ Generally sufficient for. the requirement of due process.
➢ Full-blown/adversarial proceedings are not essential for the resolution of the
controversy before labor tribunals.

❖ Exhaustion of Administrative Remedies:

➢ Appeal/Review of decisions of the DOLE Secretary, NLRC, BLR, VA is generally to
the Court of Appeals by Certiorari proceedings under Rule 65.
➢ It is a condition precedent that the appropriate MOTION FOR RECONSIDERATION
is first filed before judicial resort.
➢ The decision of the Court of Appeals may be raised to the Supreme Court on Appeal
by Certiorari under Rule 45.

❖ Appeal Bond:
➢ Normally, an Appeal Bond equivalent to the amount of the monetary judgment is
required for appeals to the next level of administrative determination/adjudication.
➢ In the NLRC, it is required that there shall be a certification from the surety, the
appellant and counsel that the Appeal Bond is genuine and shall remain valid and
subsisting until the final

Bar Questions:
1. The modes of determining an exclusive bargaining agreement are: (1) voluntary recognition, (2) certification election, (3)
consent election. Explain briefly how they differ from one another.
2. As a result of bargaining deadlock between ROSE Corporation and ROSE Employees Union, its members staged a strike.
During the strike, several employees committed illegal acts. The company refused to give in to the union’s demands.
Eventually, its members informed the company of their intention to return to work.
a. Can ROSE Corporation refuse to admit all the strikers?
b. Assuming the company admits all the strikers, can it later on dismiss those employees who committed illegal
acts?
c. If due to the prolonged strike, ROSE Corporation hired replacements, can it refuse to admit the replaced
strikers?
3. Can a “no-union” win in a certification election?
4. When does a “run-off” election occur?
5. Explain the Globe Doctrine.
6. Explain the Community of Interest Rule.
7. Discuss in full the jurisdiction over the civil and criminal aspects of a case involving an unfair labor practice for which a
charge is pending with the DOLE.
8. Discuss the legal requirements of a valid strike.
9. Some officers and rank-and-file members of the union staged an illegal strike. Their employer wants all the strikers
dismissed. As the lawyer, what will you advise the employer? Discuss fully.
10. Explain the automatic renewal clause of collective bargaining agreements.
11. What issues or disputes may be the subject of voluntary arbitration under the Labor Code?
12. Can a dispute falling within the exclusive jurisdiction of the Labor Arbiter be submitted to voluntary arbitration? Why or why
not?
13. Can a dispute falling within the jurisdiction of a voluntary arbitrator be submitted to compulsory arbitration? Why or why
not?

Savoy Department Store (SDS) adopted a policy of hiring salesladies on five-month cycles. At the end of a saleslady’s five-month
term, another person is hired as replacement. Salesladies attend to store customers, were SDS uniforms, report at specified hours,
and are subject to SDS workplace rules and regulations

The day after expiration of her 5-month engagement, Lina wore her SDS white and blue uniform and reported for work but it was
denied entry into the store premises. Agitated, she went on a huger strike and stationed herself in front of one of the gates of SDS.
Soon thereafter, other employees whose 5-month term had also elapsed, joined Lina’s hunger strike.

Lina and 20 other saleladies filed a complaint for illegal dismissal, contending that they are SDS regular employees as they
performed activities usually necessary or desirable in the usual business or trade of SDS and thus, their constitutional right to
security of tenure was violated when they were dismissed without valid just or authorized causes. SDS, in defense, argued that Lina,
et al. agreed--prior to engagement--to a fixed period employment and thus waived their right to a full-term tenure. Decide the
dispute.

The owner of SDS considered the hunger strike staged by Lina, et al. an eyesore and disruptive of SDS business. He wrote the
Secretary of Labor a letter asking him to assume jurisdiction over the dispute and enjoin the hunger “strike.” What answer will you
give if you were the Secretary of Labor? (3 points)

Assume that no fixed-term worker complained, yet in a routine inspection a labor inspector of the Regional Office of the Labor
Code’s security of tenure provisions and recommended to the Regional Director the issuance of a compliance order. The Regional
Director adopted the recommendation and issued a compliance order. Is the compliance order valid? Explain your answer.

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