Labor Law Review Case Digest MT

LABOR LAW REVIEW – JD4202 (2020)
Atty. Ryan Jeremiah Quan
EMPLOYER-EMPLOYEE RELATIONSHIP
Elements of Relationship
Labor Code: Article 97 (a), (b), (c), (e); 173 (f), (g); 219 (e) & (f)
Case Title + GR Num + Date Facts + Issue Held
Television and Production Facts: TAPE is a domestic corporation engaged in Yes, there was an employee-employer
Exponents v. Servana the production of television programs, such as the relationship between the TAPE and Servana.
GR No. 167648 long-running variety program, "Eat Bulaga!". Its The Court applied the "four-fold test" in this wise:
January 28, 2008 president is Antonio P. Tuviera (Tuviera). Respondent
Roberto C. Servaña had served as a security guard First. The selection and hiring of Servana was done
for TAPE from March 1987 until he was terminated by TAPE. In fact, TAPE themselves admitted having
on 3 March 2000. Respondent filed a complaint for engaged the services of Servana only in 1995 after
illegal dismissal and nonpayment of benefits against TAPE severed its relations with RPN Channel 9. By
TAPE. informing Servana through the Memorandum dated
2 March 2000, that his services will be terminated
He alleged that he was first connected with Agro- as soon as the services of the newly hired security
Commercial Security Agency but was later on agency begins, TAPE in effect acknowledged
absorbed by TAPE as a regular company guard. He petitioner to be their employee. For the right to hire
was detailed at Broadway Centrum in Quezon City and fire is another important element of the
where "Eat Bulaga!" regularly staged its employer-employee relationship.
productions. On 2 March 2000, respondent received
a memorandum informing him of his impending Second. Payment of wages is one of the four
dismissal on account of TAPE’s decision to contract factors to be considered in determining the
the services of a professional security agency. At the existence of employer-employee relationship.
time of his termination, respondent was receiving a Payment as admitted by TAPE was given by them
monthly salary of P6,000.00. He claimed that the on a monthly basis at a rate of P5,444.44.
holiday pay, unpaid vacation and sick leave
benefits and other monetary considerations were Third. Of the four elements of the employer-
withheld from him. He further contended that his employee relationship, the "control test" is the most
dismissal was undertaken without due process and important. The bundy cards representing the time
violative of existing labor laws, aggravated by petitioner had reported for work are evident proofs
nonpayment of separation pay. of TAPE’s control over petitioner more particularly
with the time he is required to report for work
The LA ruled that Servana was a regular employee. during the noontime program of "Eat Bulaga!" If it
were not so, Servana would be free to report for
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The NLRC ruled that Servana was not a regular work anytime even not during the noontime
employee. program of "Eat Bulaga!" from 11:30 a.m. to 1:00
p.m. and still gets his compensation for being a
The CA reversed and set aside the NLRC decision "talent." Precisely, he is being paid for being the
and affirmed the LA decision that Servana was a security of "Eat Bulaga!" during the above-
regular employee. mentioned period. The daily time cards of Servana
are not just for mere record purposes as claimed by
Issue: Whether an employer-employee relationship TAPE. It is a form of control by the management of
exists between TAPE and respondent. TAPE.
[Doctrine]
Jurisprudence is abound with cases that recite the
factors to be considered in determining the
existence of employer-employee relationship,
namely: (a) the selection and engagement of the
employee; (b) the payment of wages; (c) the power
of dismissal; and (d) the employer's power to
control the employee with respect to the means and
method by which the work is to be accomplished.
The most important factor involves the control test.
Under the control test, there is an employer-
employee relationship when the person for whom
the services are performed reserves the right to
control not only the end achieved but also the
manner and means used to achieve that end.
ABS-CBN Broadcasting Corp. v. Facts: Petitioner ABS-CBN employed respondents Yes, employer-employee relationship exists
Nazareno Nazareno, Gerzon, Deiparine, and Lerasan as between petitioner and respondents. First, in the
G.R. No. 164156 production assistants (Pas) on different dates. They selection and engagement of respondents, no
September 26, 2006 were assigned at the news and public affairs. They peculiar or unique skill, talent or celebrity status was
were issued ABS-CBN employees’ identification required from them because they were merely hired
cards and were required to work for a minimum of through petitioner’s personnel department just like
eight hours a day, including Sundays and holidays. any ordinary employee. Second, the so-called
The PAs were under the control and supervision of "talent fees" of respondents correspond to wages
Assistant Station Manager Dante J. Luzon, and News given as a result of an employer-employee
Manager Leo Lastimosa. relationship. Respondents did not have the power to
bargain for huge talent fees, a circumstance
Petitioner and the ABS-CBN Rank-and-File negating independent contractual relationship.
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Employees executed a CBA. However, since Third, petitioner could always discharge
petitioner refused to recognize PAs as part of the
respondents should it find their work unsatisfactory,
bargaining unit, respondents were not included to
and respondents are highly dependent on the
the CBA. Respondents filed a Complaint for petitioner for continued work. Fourth, the degree of
Recognition of Regular Employment Status, among
control and supervision exercised by petitioner over
others, against the petitioner before the NLRC.
respondents through its supervisors negates the
allegation that respondents are independent
Issue: Whether or not employer-employee contractors.
relationship exists between petitioner and
respondents.
FULACHE v. ABS-CBN Facts: Petitioners, who are drivers, cameramen, Petitioners are regular employees. The Court held
GR No. 183810 editors, among others, of respondent ABS-CBN, filed that Petitioner as a regular employees falls within
January 21, 2010 a complaint for regularization, unfair labor practice the coverage of the bargaining unit and are
and several money claims against the latter. They therefore entitled to CBA benefits as a matter of
alleged that on Dec. 17, 1999, ABS-CBN and the law and contract. In the root decision (the labor
ABS-CBN Rank-and-File Employees Union executed arbiter’s decision of January 17, 2002) that the
a collective bargaining agreement. However, they NLRC and CA affirmed, the labor arbiter declared:
were excluded from its coverage as ABS-CBN WHEREFORE, IN THE LIGHT OF THE FOREGOING,
considered them temporary and not regular taking into account the factual scenario and the
employees. Petitioner then claim that they had evidence adduced by both parties, it is declared
already rendered more than a year of service in that complainants in these cases are REGULAR
the company and, therefore, should have been EMPLOYEES of respondent ABS-CBN and not
recognized as regular employees entitled to security INDEPENDENT CONTRACTORS and thus henceforth
of tenure and to the privileges and benefits enjoyed they are entitled to the benefits and privileges
by regular employees. ABS-CBN alleged that the attached to regular status of their employment.
petitioners’ services were contracted by its Cebu
station as independent contractors/off camera The petitioners are regular employees of ABS-CBN
talents. According to ABS-CBN, as talents, because there was an employer-employee
petitioners are considered independent contractors relationship between the petitioners and ABS-CBN
that are paid a pre-arranged consideration called as the company exercised control over the
“talent fee” taken from the budget of a particular petitioners in the performance of their work; the
program; they do not undergo probation; that their petitioners were regular employees because they
services are engaged for a specific program or were engaged to perform activities usually
production, and that their contract are terminated necessary or desirable in ABS-CBN's trade or
once the program, production or segment is business; they cannot be considered contractual
completed. Labor Arbiter ruled that petitioners are employees since they were not paid for the result of
regular employees of ABS-CBN. NLRC affirmed the their work, but on a monthly basis and were
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LA’s decision that petitioners are regular employees required to do their work in accordance with the
of ABS-CBN because there was an employer- company’s schedule
employee relationship between the petitioners and
ABS-CBN as the company exercised control over the This declaration unequivocally settled the
petitioners in the performance of their work; the petitioners’ employment status: they are ABS-CBN’s
petitioners were regular employees because they regular employees entitled to the benefits and
were engaged to perform activities usually privileges of regular employees. These benefits and
necessary or desirable in ABS-CBN's trade or privileges arise from entitlements under the law
business; they cannot be considered contractual (specifically, the Labor Code and its related laws),
employees since they were not paid for the result of and from their employment contract as regular ABS-
their work, but on a monthly basis and were CBN employees, part of which is the CBA if they fall
required to do their work in accordance with the within the coverage of this agreement.
company’s schedule. CA ruled that the petitioners
failed to prove their claim to CBA benefits since
they never raised the issue in the compulsory
arbitration proceedings. Hence, Petitioners argue
that even if they were not able to prove that they
were members of the bargaining unit, the CA should
not have dismissed their petition. When the CA
affirmed the rulings of both the labor arbiter and
the NLRC that they are regular employees, the CA
should have ordered ABS-CBN to recognize their
regular employee status and to give them the
salaries, allowances and other benefits and
privileges under the CBA
Issue: Whether or not Petitioners are regular

employees of ABS-CBN.
Dumpit-Murillo v. Court of Facts: Private respondent Associated Broasting Yes, there was an employee-employer
Appeals Company (ABC) hired petitioner Thelma Dumpit- relationship between the Dumpit-Murillo and
GR No. 164653 Murillo as a newscaster and co-anchor for Balitang- ABC. Petitioner was a regular employee under
June 8, 2007 Balita, an early evening news program. The contract contemplation of law. The practice of having fixed-
was for a period of three months. It was renewed term contracts in the industry does not automatically
under Talent Contracts Nos. NT95-1915, NT96- make all talent contracts valid and compliant with
3002, NT98-4984 and NT99-5649. In addition, labor law. The assertion that a talent contract exists
petitioner's services were engaged for the program does not necessarily prevent a regular employment
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"Live on Five." On September 30, 1999, after four status.

years of repeated renewals, petitioner's talent
contract expired. Further, the Sonza case is not applicable. In Sonza,
the television station did not instruct Sonza how to
A month later, petitioner sent a demand letter7 to perform his job. How Sonza delivered his lines,
ABC. On December 20, 1999, petitioner filed a appeared on television, and sounded on radio were
complaint against ABC, Mr. Javier and Mr. Edward outside the television station's control. Sonza had a
Tan, for illegal constructive dismissal. free hand on what to say or discuss in his shows
provided he did not attack the television station or
The LA dismissed the complaint. its interests. Clearly, the television station did not
exercise control over the means and methods of the
The NLRC reversed the LA decision and ruled that performance of Sonza's work. In the case at bar,
there was an employer and employee relationship ABC had control over the performance of
exists. petitioner's work. Noteworthy too, is the
comparatively low P28,000 monthly pay of
The CA reversed and set aside the NLRC decision petitioner vis the P300,000 a month salary of
and there was no employer and employee Sonza, that all the more bolsters the conclusion that
relationship exists and Dumpit-Murillo was only a petitioner was not in the same situation as Sonza.
fixed-term employee.
The duties of petitioner as enumerated in her
Issue: Whether an employer-employee relationship employment contract indicate that ABC had control
exists between ABC and Dumpit-Murillo. over the work of petitioner. Aside from control, ABC
also dictated the work assignments and payment of
petitioner's wages. ABC also had power to dismiss
her. All these being present, clearly, there existed
an employment relationship between petitioner and
ABC.
[Doctrine] According to jurisprudence, we said that

the elements to determine the existence of an
employment relationship are: (a) the selection and
engagement of the employee, (b) the payment of
wages, (c) the power of dismissal, and (d) the
employer's power to control. The most important
element is the employer's control of the employee's
conduct, not only as to the result of the work to be
done, but also as to the means and methods to
accomplish it.
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Fuji Television v. Espiritu Facts: Arlene S. Espiritu was engaged by Fuji Yes, an employer-employee relationship existed
G.R. No. 204944-45 Television Network, Inc. as a news between Fuji and Arlene. Arlene was hired by Fuji
December 3, 2014 correspondent/producer. Arlene’s employment as a news producer, but there was no showing that
contract initially provided for a term of one (1) year she was hired because of unique skills that would
but was successively renewed on a yearly basis. distinguish her from ordinary employees. Her
Sometime in January 2009, Arlene was diagnosed monthly salary amounting to US$1,900.00 appears
with lung cancer. to be a substantial sum. Fuji had the power to
dismiss Arlene, as provided for in her professional
Arlene and Fuji signed a non-renewal contract employment contract. Her contract also indicated
where it was stipulated that her contract would no that Fuji had control over her work because she was
longer be renewed after its expiration. The day required to work for eight (8) hours from Monday to
after Arlene signed the non-renewal contract, she Friday, although on flexible time.
filed a complaint for illegal dismissal and attorney’s
fees with NLRC. The Labor Arbiter, applying the
[Doctrine]
four-fold test, held that Arlene was not Fuji’s
The four-fold test can be used in determining
employee but an independent contractor. NLRC whether an employer-employee relationship exists.
reversed the decision of the Labor Arbiter. CA held
The elements of the four-fold test are the following:
that the elements of an employer-employee (1) the selection and engagement of the employee;
relationship are present, particularly that of control.
(2) the payment of wages; (3) the power of
dismissal; and (4) the power of control, which is the
Issue: Whether or not an employer-employee most important element.
relationship existed between Fuji and Arlene.
The power to control refers to the existence of the
power and not necessarily to the actual exercise
thereof, nor is it essential for the employer to
actually supervise the performance of duties of the
employee. It is enough that the employer has the
right to wield that power.
The “power of control” was defined as “[the] right

to control not only the end to be achieved but also
the means to be used in reaching such end.”
As to how the elements in the four-fold test are

proven, it was discussed that there is no hard and
fast rule designed to establish the aforesaid
elements. Any competent and relevant evidence to
prove the relationship may be admitted.
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Identification cards, cash vouchers, social security

registration, appointment letters or employment
contracts, payrolls, organization charts, and
personnel lists, serve as evidence of employee
status.
BEGINO v. ABS-CBN Facts: Respondent ABS-CBN, through Respondent Yes. There was an employer-employee
GR No. 199166 Villafuerte, engaged the services of Petitioners as relationship between the parties.
April 20, 2015 cameramen, editors or reporters for TV
Broadcasting. Petitioners signed regularly renewed ART. 280. Regular and Casual Employment.— The
Talent Contracts (3 months - 1 year) and Project provisions of written agreement to the contrary
Assignment Forms which detailed the duration, notwithstanding and regardless of the oral
budget and daily technical requirements of a agreement of the parties, an employment shall be
particular project. Petitioners were tasked with deemed to be regular where the employee has
coverage of news items for subsequent daily airings been engaged to perform activities which are
in Respondents’ TV Patrol Bicol Program. The Talent usually necessary or desirable in the usual
Contract has an exclusivity clause and provides that business or trade of the employer, except where
nothing therein shall be deemed or construed to the employment has been fixed for a specific
establish an employer-employee relationship project or undertaking the completion or
between the parties. Petitioners filed against termination of which has been determined at the
Respondents a complaint for regularization before time of the engagement of the employee or where
the NLRC's Arbitration branch. In support of their the work or service to be performed is seasonal in
complaint, Petitioners claimed that they worked nature and the employment is for the duration of
under the direct control of Respondent Villafuerte - the season. An employment shall be deemed to be
they were mandated to wear company IDs, they casual if it is not covered by the preceding
were provided the necessary equipment, they were paragraph: Provided, that, any employee who has
informed about the news to be covered the rendered at least one year of service, whether
following day, and they were bound by the such service is continuous or broken, shall be
company’s policy on attendance and punctuality. considered a regular employee with respect to the
Respondents countered that, pursuant to their Talent activity in which he is employed and his
Contracts and Project Assignment Forms, Petitioners employment shall continue while such actually
were hired as talents to act as reporters, editors exists.
and/or cameramen. Respondents further claimed
they never imposed control as to how Petitioners The test to determine whether employment is
discharged their duties. At most, they were briefed regular or not is the reasonable connection between
regarding the general requirements of the project the activity performed by the employee in relation
to be executed. The Arbitration Branch ruled that to the business or trade of the employer. As
Petitioners were regular employees, and ordered cameramen/editors and reporters, petitioners were
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Respondents to reinstate the Petitioners. The NLRC undoubtedly performing functions necessary and
affirmed the ruling, but the CA overturned the essential to ABS-CBN’s business of broadcasting
decision. television and radio content. It matters little that
petitioners’ services were engaged for specified
periods for TV Patrol Bicol and that they were paid
Issue: Whether or not there was an employer- according to the budget allocated therefor.
employee relationship between the parties
Aside from the fact that said program is a regular
weekday fare of the ABS-CBN’s Regional Network
Group in Naga City and that petitioners were
continuously re-hired by respondents over the years,
thus, indicates that they were ABS-CBN’s regular
employees.
If the employee has been performing the job for

at least one year, even if the performance is not
continuous or merely intermittent, the law deems
the repeated or continuing performance as
sufficient evidence of the necessity, if not
indispensability of that activity in the
business. When circumstances show that
contractually stipulated periods of employment
have been imposed to preclude the acquisition of
tenurial security by the employee, Court has not
hesitated in striking down such arrangements as
contrary to public policy, morals, good customs or
public order. The nature of the employment
depends on the nature of the activities to be
performed by the employee, considering the
nature of the employer’s business, the duration
and scope to be done, and, in some cases, even
the length of time of the performance and its
continued existence.
As cameramen/editors and reporters, it appears

that petitioners were subject to the control and
supervision of respondents. The presumption is that
when the work done is an integral part of the
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regular business of the employer and when the

worker, relative to the employer, does not furnish
an independent business or professional service,
such work is a regular employment of such
employee and not an independent contractor.
[Doctrine]
To determine the existence employer-employee
relationship, case law has consistently applied the
four-fold test, to wit: (a) the selection and
engagement of the employee; (b) the payment of
wages;(c) the power of dismissal; and (d) the
employer's power to control the employee on the
means and methods by which the work is
accomplished. Of these criteria, the so-called
"control test" is generally regarded as the most
crucial and determinative indicator of the presence
or absence of an employer-employee relationship.
Under this test, an employer-employee relationship
is said to exist where the person for whom the
services are performed reserves the right to control
not only the end result but also the manner and
means utilized to achieve the same
SONZA v. ABS-CBN Facts: In May 1994, respondent ABS-CBN Sonza is not an employee.
BROADCASTING CORP. Broadcasting Corporation (“ABS-CBN”) signed an
GR No. 138051 Agreement (“Agreement”) with the Mel and Jay A. Selection and Engagement of Employee
June 10, 2004 Management and Development Corporation
(“MJMDC”). ABS-CBN was represented by its
ABS-CBN engaged SONZA’s services to co-host
corporate officers while MJMDC was represented
by SONZA, as President and General Manager, its television and radio programs because of
and Carmela Tiangco (“TIANGCO”), as EVP and SONZA’s peculiar skills, talent and celebrity
Treasurer. Referred to in the Agreement as status. SONZA contends that the "discretion
“AGENT,” MJMDC agreed to provide SONZA’s used by respondent in specifically selecting and
services exclusively to ABS-CBN as talent for radio hiring complainant over other broadcasters of
and television. SONZA wrote a letter to ABS-CBN’s possibly similar experience and qualification as
President, Eugenio Lopez III about the recent event complainant belies respondent’s claim of
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concerning his program and career, and that the independent contractorship."
said violation of the company has breached the
agreement, thus, the notice of rescission of the Independent contractors often present
Agreement was sent. SONZA filed a complaint themselves to possess unique skills, expertise or
against ABS-CBN before the Department of Labor
and Employment, National Capital Region
talent to distinguish them from ordinary
in Quezon City. SONZA complained that ABS-CBN employees. The specific selection and hiring of
did not pay his salaries, separation pay, service SONZA, because of his unique skills, talent and
incentive leave pay, 13th month pay, signing bonus, celebrity status not possessed by ordinary
travel allowance and amounts due under the employees, is a circumstance indicative, but not
Employees Stock Option Plan (“ESOP”). ABS-CBN conclusive, of an independent contractual
filed a Motion to Dismiss on the ground that no relationship. If SONZA did not possess such
employer-employee relationship existed between unique skills, talent and celebrity status, ABS-
the parties. SONZA filed an Opposition to the CBN would not have entered into the
motion. SONZA maintains that all essential elements Agreement with SONZA but would have hired
of an employer-employee relationship are present him through its personnel department just like
in this case. Case law has consistently held that the
elements of an employer-employee relationship are:
any other employee.
(a) the selection and engagement of the employee;
(b) the payment of wages; (c) the power of In any event, the method of selecting and
dismissal; and (d) the employer’s power to control engaging SONZA does not conclusively
the employee on the means and methods by which determine his status. We must consider all the
the work is accomplished. The last element, the so- circumstances of the relationship, with the
called "control test", is the most important element. control test being the most important element.
Issue: Whether or not Sonza was an employee. B. Payment of Wages
ABS-CBN directly paid SONZA his monthly

talent fees with no part of his fees going to
MJMDC. SONZA asserts that this mode of fee
payment shows that he was an employee of
ABS-CBN. SONZA also points out that ABS-CBN
granted him benefits and privileges "which he
would not have enjoyed if he were truly the
subject of a valid job contract."
All the talent fees and benefits paid to
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SONZA were the result of negotiations that

led to the Agreement. If SONZA were ABS-
CBN’s employee, there would be no need for
the parties to stipulate on benefits such as "SSS,
Medicare, x x x and 13th month pay"20 which
the law automatically incorporates into every
employer-employee contract.21Whatever
benefits SONZA enjoyed arose from contract
and not because of an employer-employee
relationship.22
SONZA’s talent fees, amounting to ₱317,000

monthly in the second and third year, are so
huge and out of the ordinary that they indicate
more an independent contractual relationship
rather than an employer-employee relationship.
ABS-CBN agreed to pay SONZA such huge
talent fees precisely because of SONZA’s
unique skills, talent and celebrity status not
possessed by ordinary employees. Obviously,
SONZA acting alone possessed enough
bargaining power to demand and receive such
huge talent fees for his services. The power to
bargain talent fees way above the salary
scales of ordinary employees is a circumstance
indicative, but not conclusive, of an independent
contractual relationship.
The payment of talent fees directly to SONZA

and not to MJMDC does not negate the status
of SONZA as an independent contractor. The
parties expressly agreed on such mode of
payment. Under the Agreement, MJMDC is the
AGENT of SONZA, to whom MJMDC would
have to turn over any talent fee accruing under
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the Agreement.
C. Power of Dismissal
For violation of any provision of the

Agreement, either party may terminate their
relationship. SONZA failed to show that ABS-
CBN could terminate his services on grounds
other than breach of contract, such as
retrenchment to prevent losses as provided
under labor laws.23
During the life of the Agreement, ABS-CBN

agreed to pay SONZA’s talent fees as long as
"AGENT and Jay Sonza shall faithfully and
completely perform each condition of this
Agreement."24 Even if it suffered severe
business losses, ABS-CBN could not retrench
SONZA because ABS-CBN remained obligated
to pay SONZA’s talent fees during the life of
the Agreement. This circumstance indicates an
independent contractual relationship between
SONZA and ABS-CBN.
SONZA admits that even after ABS-CBN

ceased broadcasting his programs, ABS-CBN
still paid him his talent fees. Plainly, ABS-CBN
adhered to its undertaking in the Agreement to
continue paying SONZA’s talent fees during the
remaining life of the Agreement even if ABS-
CBN cancelled SONZA’s programs through no
fault of SONZA.25
SONZA assails the Labor Arbiter’s

interpretation of his rescission of the Agreement
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as an admission that he is not an employee of

ABS-CBN. The Labor Arbiter stated that "if it
were true that complainant was really an
employee, he would merely resign, instead."
SONZA did actually resign from ABS-CBN but
he also, as president of MJMDC, rescinded the
Agreement. SONZA’s letter clearly bears this
out.26 However, the manner by which SONZA
terminated his relationship with ABS-CBN is
immaterial. Whether SONZA rescinded the
Agreement or resigned from work does not
determine his status as employee or
independent contractor.
D. Power of Control
Since there is no local precedent on whether a

radio and television program host is an
employee or an independent contractor, we
refer to foreign case law in analyzing the
present case. The United States Court of
Appeals, First Circuit, recently held in Alberty-
Vélez v. Corporación De Puerto Rico Para La
Difusión Pública ("WIPR") that a television
program host is an independent contractor. We
quote the following findings of the U.S. court:
Several factors favor classifying Alberty

as an independent contractor. First, a
television actress is a skilled position
requiring talent and training not
available on-the-job. x x x In this
regard, Alberty possesses a master’s
degree in public communications and
journalism; is trained in dance, singing,
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and modeling; taught with the drama

department at the University of Puerto
Rico; and acted in several theater and
television productions prior to her
affiliation with "Desde Mi
Pueblo." Second, Alberty provided the
"tools and instrumentalities"
necessary for her to
perform. Specifically, she provided, or
obtained sponsors to provide, the
costumes, jewelry, and other image-
related supplies and services necessary
for her appearance. Alberty disputes
that this factor favors independent
contractor status because WIPR
provided the "equipment necessary to
tape the show." Alberty’s argument is
misplaced. The equipment necessary for
Alberty to conduct her job as host of
"Desde Mi Pueblo" related to her
appearance on the show. Others
provided equipment for filming and
producing the show, but these were not
the primary tools that Alberty used to
perform her particular function. If we
accepted this argument, independent
contractors could never work on
collaborative projects because other
individuals often provide the equipment
required for different aspects of the
collaboration. x x x
Third, WIPR could not assign Alberty

work in addition to filming "Desde Mi
Pueblo." Alberty’s contracts with WIPR
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specifically provided that WIPR hired

her "professional services as Hostess for
the Program Desde Mi Pueblo." There is
no evidence that WIPR assigned Alberty
tasks in addition to work related to
these tapings. x x x28 (Emphasis
supplied)
Applying the control test to the present case,

we find that SONZA is not an employee but an
independent contractor. The control test is
the most important test our courts apply in
distinguishing an employee from an
independent contractor.29 This test is based on
the extent of control the hirer exercises over a
worker. The greater the supervision and control
the hirer exercises, the more likely the worker is
deemed an employee. The converse holds true
as well – the less control the hirer exercises, the
more likely the worker is considered an
independent contractor.
First, SONZA contends that ABS-CBN exercised

control over the means and methods of his
work.
SONZA’s argument is misplaced. ABS-CBN

engaged SONZA’s services specifically to co-
host the "Mel & Jay" programs. ABS-CBN did
not assign any other work to SONZA. To
perform his work, SONZA only needed his skills
and talent. How SONZA delivered his lines,
appeared on television, and sounded on radio
were outside ABS-CBN’s control. SONZA did
not have to render eight hours of work per day.
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The Agreement required SONZA to attend only

rehearsals and tapings of the shows, as well as
pre- and post-production staff meetings. ABS-
CBN could not dictate the contents of SONZA’s
script. However, the Agreement prohibited
SONZA from criticizing in his shows ABS-CBN or
its interests. The clear implication is that SONZA
had a free hand on what to say or discuss in his
shows provided he did not attack ABS-CBN or
its interests.
We find that ABS-CBN was not involved in the

actual performance that produced the finished
product of SONZA’s work. ABS-CBN did not
instruct SONZA how to perform his job. ABS-
CBN merely reserved the right to modify the
program format and airtime schedule "for more
effective programming." ABS-CBN’s sole
concern was the quality of the shows and their
standing in the ratings. Clearly, ABS-CBN did
not exercise control over the means and
methods of performance of SONZA’s work.
SONZA claims that ABS-CBN’s power not to

broadcast his shows proves ABS-CBN’s power
over the means and methods of the
performance of his work. Although ABS-CBN
did have the option not to broadcast SONZA’s
show, ABS-CBN was still obligated to pay
SONZA’s talent fees... Thus, even if ABS-CBN
was completely dissatisfied with the means and
methods of SONZA’s performance of his work,
or even with the quality or product of his work,
ABS-CBN could not dismiss or even discipline
SONZA. All that ABS-CBN could do is not to
- 16 -
broadcast SONZA’s show but ABS-CBN must

still pay his talent fees in full.35
Clearly, ABS-CBN’s right not to broadcast

SONZA’s show, burdened as it was by the
obligation to continue paying in full SONZA’s
talent fees, did not amount to control over the
means and methods of the performance of
SONZA’s work. ABS-CBN could not terminate or
discipline SONZA even if the means and
methods of performance of his work - how he
delivered his lines and appeared on television -
did not meet ABS-CBN’s approval. This proves
that ABS-CBN’s control was limited only to the
result of SONZA’s work, whether to broadcast
the final product or not. In either case, ABS-CBN
must still pay SONZA’s talent fees in full until
the expiry of the Agreement.
In Vaughan, et al. v. Warner, et al., the United

States Circuit Court of Appeals ruled that
vaudeville performers were independent
contractors although the management reserved
the right to delete objectionable features in
their shows. Since the management did not have
control over the manner of performance of the
skills of the artists, it could only control the result
of the work by deleting objectionable
features.37
SONZA further contends that ABS-CBN

exercised control over his work by supplying all
equipment and crew. No doubt, ABS-CBN
supplied the equipment, crew and airtime
needed to broadcast the "Mel & Jay"
- 17 -
programs. However, the equipment, crew and

airtime are not the "tools and instrumentalities"
SONZA needed to perform his job. What
SONZA principally needed were his talent or
skills and the costumes necessary for his
appearance.38Even though ABS-CBN provided
SONZA with the place of work and the
necessary equipment, SONZA was still an
independent contractor since ABS-CBN did not
supervise and control his work. ABS-CBN’s sole
concern was for SONZA to display his talent
during the airing of the programs.
A radio broadcast specialist who works under

minimal supervision is an independent
contractor. SONZA’s work as television and
radio program host required special skills and
talent, which SONZA admittedly possesses. The
records do not show that ABS-CBN exercised
any supervision and control over how SONZA
utilized his skills and talent in his shows.
Second, SONZA urges us to rule that he was

ABS-CBN’s employee because ABS-CBN
subjected him to its rules and standards of
performance. SONZA claims that this indicates
ABS-CBN’s control "not only [over] his manner
of work but also the quality of his work."
The Agreement stipulates that SONZA shall

abide with the rules and standards of
performance "covering talents"of ABS-CBN.
The Agreement does not require SONZA to
comply with the rules and standards of
performance prescribed for employees of ABS-
- 18 -
CBN. The code of conduct imposed on SONZA

under the Agreement refers to the "Television
and Radio Code of the Kapisanan ng mga
Broadcaster sa Pilipinas (KBP), which has been
adopted by the COMPANY (ABS-CBN) as its
Code of Ethics." The KBP code applies to
broadcasters, not to employees of radio and
television stations. Broadcasters are not
necessarily employees of radio and television
stations. Clearly, the rules and standards of
performance referred to in the Agreement are
those applicable to talents and not to
employees of ABS-CBN.
In any event, not all rules imposed by the hiring

party on the hired party indicate that the latter
is an employee of the former. In this case,
SONZA failed to show that these rules
controlled his performance. We find that these
general rules are merely guidelines towards
the achievement of the mutually desired result,
which are top-rating television and radio
programs that comply with standards of the
industry. We have ruled that:
Further, not every form of control that a party

reserves to himself over the conduct of the other
party in relation to the services being rendered
may be accorded the effect of establishing an
employer-employee relationship. The facts of
this case fall squarely with the case of Insular
Life Assurance Co., Ltd. vs. NLRC. In said case,
we held that:
Logically, the line should be drawn
- 19 -
between rules that merely serve as

guidelines towards the achievement of
the mutually desired result without
dictating the means or methods to be
employed in attaining it, and those that
control or fix the methodology and bind
or restrict the party hired to the use of
such means. The first, which aim only to
promote the result, create no employer-
employee relationship unlike the second,
which address both the result and the
means used to achieve it.
The Vaughan case also held that one could still

be an independent contractor although the hirer
reserved certain supervision to insure the
attainment of the desired result. The hirer,
however, must not deprive the one hired from
performing his services according to his own
initiative.
Lastly, SONZA insists that the "exclusivity

clause" in the Agreement is the most extreme
form of control which ABS-CBN exercised over
him.
This argument is futile. Being an exclusive talent

does not by itself mean that SONZA is an
employee of ABS-CBN. Even an independent
contractor can validly provide his services
exclusively to the hiring party. In the broadcast
industry, exclusivity is not necessarily the same
as control.
The hiring of exclusive talents is a widespread
- 20 -
and accepted practice in the entertainment

industry.This practice is not designed to control
the means and methods of work of the talent,
but simply to protect the investment of the
broadcast station. The broadcast station
normally spends substantial amounts of money,
time and effort "in building up its talents as well
as the programs they appear in and thus
expects that said talents remain exclusive with
the station for a commensurate period of
time."Normally, a much higher fee is paid to
talents who agree to work exclusively for a
particular radio or television station. In short,
the huge talent fees partially compensates for
exclusivity, as in the present case.
Bernante v. PBA Facts: Complainants (Jose Mel Bernarte and Renato No, there was no employer-employee
GR No. 192084 Guevarra) aver that they were invited to join the relationship between PBA and Bernante. The
September 14, 2011 PBA as referees. referees exercise their own independent judgment,
based on the rules of the game, as to when and
During the leadership of Commissioner Emilio how a call or decision is to be made. The referees
Bernardino, they were made to sign contracts on a decide whether an infraction was committed, and
year-to-year basis. During the term of Commissioner the PBA cannot overrule them once the decision is
Eala, however, changes were made on the terms of made on the playing court. The referees are the
their employment. only, absolute, and final authority on the playing
On the other hand, complainant Guevarra alleges court. Respondents or any of the PBA officers cannot
that he was invited to join the PBA pool of referees and do not determine which calls to make or not to
in 2001. make and cannot control the referee when he blows
the whistle because such authority exclusively
He signed a contract as trainee. Beginning 2002, he belongs to the referees. The very nature of
signed a yearly contract as Regular Class C petitioner’s job of officiating a professional
referee. On 2003, respondent Martinez issued a basketball game undoubtedly calls for freedom of
memorandum to Guevarra expressing dissatisfaction control by respondents.
over his questioning on the assignment of referees
officiating out-of-town games. Moreover, the following circumstances indicate that
Respondents aver that complainants were not petitioner is an independent contractor: (1) the
illegally dismissed because they were not referees are required to report for work only when
- 21 -
employees of the PBA. Their respective contracts of

PBA games are scheduled, which is three times a
retainer were simply not renewed. PBA had the week spread over an average of only 105 playing
prerogative of whether or not to renew their days a year, and they officiate games at an
contracts, which they knew were fixed. average of two hours per game; and (2) the only
deductions from the fees received by the referees
The LA ruled that Bernante et. al were illegally are withholding taxes.
dismissed.
The NLRC affirmed the LA decision. In other words, unlike regular employees who
ordinarily report for work eight hours per day for
The CA reversed and set aside the LA and NLRC five days a week, petitioner is required to report
decision and dismissed the complaint. for work only when PBA games are scheduled or
three times a week at two hours per game. In
Issue: Whether an employer-employee relationship addition, there are no deductions for contributions to
exists between PBA and Bernante. the Social Security System, Philhealth or Pag-Ibig,
which are the usual deductions from employees’
salaries. These undisputed circumstances buttress the
fact that petitioner is an independent contractor,
and not an employee of respondents.
[Doctrine] The line should be drawn between rules

that merely serve as guidelines towards the
achievement of the mutually desired result without
dictating the means or methods to be employed in
attaining it, and those that control or fix the
methodology and bind or restrict the party hired to
the use of such means. The first, which aim only to
promote the result, create no employer-employee
relationship unlike the second, which address both
the result and the means used to achieve it.
Abella v. PLDT Facts: Respondent PSI entered into an agreement No, employer-employee relationship does not
G.R. No. 159469 with the PLDT to provide the latter with such number exist between petitioners and respondent PLDT.
June 8, 2005 of qualified uniformed and properly armed security The Labor Arbiter, the NLRC and the CA rendered a
guards for the purpose of guarding and protecting consistent finding based on the evidence adduced
PLDT’s installations and properties from theft, that it was the PSI, the security provider of the PLDT,
pilferage, intentional damage, trespass or other which selected, engaged or hired and discharged
unlawful acts. Under the agreement, it was the security guards. It is not disputed that
expressly provided that there shall be no employer- complainants applied for work with PSI, submitted
- 22 -
employee relationship between the PLDT and the the necessary employment documentary
security guards, which may be supplied to it by PSI, requirement with PSI and executed employment
and that the latter shall have the entire charge, contracts with PSI. The employer-employee
control and supervision over the work and services relationship is deemed perfected even before the
of the supplied security guards. It was likewise posting of the petitioners with the PLDT. It is PSI that
stipulated therein that PSI shall also have the determined and paid the petitioners’ wages,
exclusive authority to select, engage, and discharge salaries, and compensation. Termination of services
its security guards, with full control over their wages, from PLDT did not ipso facto mean dismissal from
salaries or compensation. PSI inasmuch as some of those pulled out from PLDT
were merely detailed at the other clients of PSI.
Sixty-five (65) security guards supplied by With regard to the seminars, while said seminars
respondent PSI filed a Complaint for regularization were conducted at the premises of PLDT, it also
against the PLDT with the Labor Arbiter. Petitioner remains uncontroverted that complainants’
security guards alleged that they served PLDT participation was done with the approval and at
directly for more than 1 year. In sum, the Complaint the expense of PSI. The certificates of appreciation
states that inasmuch as the complainants are under and/or commendations for good performance
the direct control and supervision of PLDT, they issued by PLDT to select security guards are not
should be considered as regular employees. proof that the latter are under the control and
supervision of PLDT because similar certificates are
Issue: Whether or not an employer-employee also issued as a matter of practice to non-PLDT
relationship exists between petitioners and personnel who have rendered exemplary support
respondent PLDT. and assistance to PLDT.
[Doctrine]
The Court considered the following factors in
considering the existence of an employer-employee
relationship: (1) the selection and engagement of
the employee; (2) the payment of wages; (3) the
power to dismiss; and (4) the power to control the
employee’s conduct.
CONSULTA v. COURT OF Facts: Respondent Pamana Philippines, Inc. is a Consulta was not an employee of Panama.
APPEALS healthcare business. Petitioner Raquel Consulta was In Viaña v. Al-Lagadan, the Court first laid down the
GR No. 145443 a Managing Associate of Pamana. Consulta was four-fold test to determine the existence of an
March 18, 2005 duly authorized by Pamana to negotiate with the employer-employee relationship. The four elements
Federation of Filipino Civilian Employees Association of an employer-employee relationship, which have
working at the United States Subic Naval Base for a since been adopted in subsequent
Employees Association working at the US Subic jurisprudence,10 are (1) the power to hire; (2) the
- 23 -
Naval Base for Health Care Plan for the FFCEA payment of wages; (3) the power to dismiss; and
account. Consulta, claiming that Pamana did not pay
(4) the power to control. The power to control is the
her commission against Pamana. The LA ordered most important of the four elements. In Insular Life
Pamana to pay Consulta. Pamana appealed. NLRC Assurance Co., Ltd. v. NLRC, the Court explained the
dismissed the appeal. On appeal, the appellate scope of the power to control, thus: x x x It should,
court reversed the NLRC decision and ruled that however, be obvious that not every form of control
Consulta was a commission agent, not an employee that the hiring party reserves to himself over the
of Panama. Hence, Consulta’s recourse. conduct of the party hired in relation to the services
rendered may be accorded the effect of
Issue: Whether or not Consulta was an employee of establishing an employer-employee relationship
Pamana. between them in the legal or technical sense of the
term. A line must be drawn somewhere, if the
recognized distinction between an employee and an
individual contractor is not to vanish altogether.
Realistically, it would be a rare contract of service
that gives untrammelled freedom to the party hired
and eschews any intervention whatsoever in his
performance of the engagement.
Logically, the line should be drawn between rules

that merely serve as guidelines towards the
achievement of the mutually desired result without
dictating the means or methods to be employed in
attaining it, and those that control or fix the
methodology and bind or restrict the party hired to
the use of such means. The first, which aim only to
promote the result, create no employer-employee
relationship unlike the second, which address both
the result and the means used to achieve it. In the
present case, the power to control is missing.
Pamana tasked Consulta to organize, develop,
manage, and maintain a sales division, submit a
number of enrollments and revenue attainments in
accordance with company policies and guidelines,
and to recruit, train and direct her Supervising
Associates and Health Consultants. However, the
manner in which Consulta was to pursue these
activities was not subject to the control of Pamana.
- 24 -
Consulta failed to show that she had to report for

work at definite hours. The amount of time she
devoted to soliciting clients was left entirely to her
discretion. The means and methods of recruiting and
training her sales associates, as well as the
development, management and maintenance of her
sales division, were left to her sound judgment.
Consulta claims that the documents she submitted
show that Pamana had control on the conduct of her
work and the means and methods to accomplish the
work. However, the documents only prove the
absence of the power to control. The Managing
Associates only received suggestions from Pamana
on how to go about their recruitment and sales
activities. They could adopt the suggestions but the
suggestions were not binding on them. They could
adopt other methods that they deemed more
effective. Further, the Managing Associates had to
ask the Management of Pamana to shoulder half of
the advertisement cost for their recruitment
campaign. They shelled out their own resources to
bolster their recruitment. They shared in the
payment of the salaries of their secretaries. They
gave cash incentives to their sales associates from
their own pocket. These circumstances show that the
Managing Associates were independent contractors,
not employees, of Pamana.
Finally, Pamana paid Consulta not for labor she

performed but only for the results of her labor.
Without results, Consulta’s labor was her own
burden and loss. Her right to compensation, or to
commission, depended on the tangible results of her
work
[Doctrine] Court explained the scope of the power

to control, thus:x x x It should, however, be obvious
that not every form of control that the hiring party
- 25 -
reserves to himself over the conduct of the party

hired in relation to the services rendered may be
accorded the effect of establishing an employer-
employee relationship between them in the legal or
technical sense of the term. A line must be drawn
somewhere, if the recognized distinction between an
employee and an individual contractor is not to
vanish altogether. Realistically, it would be a rare
contract of service that gives untrammelled freedom
to the party hired and eschews any intervention
whatsoever in his performance of the engagement.
Villamaria v. CA Facts: Oscar Villamaria, Jr. operated passenger Yes, there was an employee-employer
GR No. 165881 jeepneys by employing drivers on a “boundary relationship between Villamaria and Bustamante.
April 19, 2006 basis.” By 1995, Villamaria stopped assembling Under the boundary-hulog scheme incorporated in
jeepneys and retained only nine, four of which he the Kasunduan, a dual juridical relationship was
operated by employing drivers on a "boundary created between petitioner and respondent: that of
basis." One of those drivers was respondent employer-employee and vendor-vendee. The
Bustamante who drove the jeepney with Plate No. Kasunduan did not extinguish the employer-
PVU-660. Bustamante remitted P450.00 a day to employee relationship of the parties extant before
Villamaria as boundary and kept the residue of his the execution of said deed.
daily earnings as compensation for driving the
vehicle. The exercise of control by private respondent over
petitioner’s conduct in operating the jeepney he was
In 1997, Villamaria agreed to sell the jeepney to driving is inconsistent with private respondent’s claim
driver Bustamante under the “boundary-hulog that he is, or was, not engaged in the transportation
scheme”. Their contract stipulated the prohibitions, business; that, even if petitioner was allowed to let
compliance and restrictions. Bustamante continued some other person drive the unit, it was not shown
driving the jeepney under the supervision and that he did so; that the existence of an employment
control of Villamaria. But later he failed to comply relation is not dependent on how the worker is paid
with his obligations so that notice of compliance and but on the presence or absence of control over the
warning were ensued. Until in 2000, Villamaria took means and method of the work; that the amount
back the jeepney driven by Bustamante and barred earned in excess of the "boundary hulog" is
the latter from driving the vehicle. equivalent to wages; and that the fact that the
Hence, Bustamante filed a complaint for Illegal power of dismissal was not mentioned in the
Dismissal. Kasunduan did not mean that private respondent
never exercised such power, or could not exercise
The LA ruled in favor of Villamaria and dismissed
- 26 -
the complaint. such power.

The NLRC dismissed the appeal for lack of merit.
Moreover, requiring petitioner to drive the unit for
The CA reversed and set aside the NLRC decision commercial use, or to wear an identification card, or
and ruled in favor of Bustamante. to don a decent attire, or to park the vehicle in
Villamaria Motors garage, or to inform Villamaria
Issue: Whether an employer-employee relationship Motors about the fact that the unit would be going
exists between Villamaria and Bustamante. out to the province for two days of more, or to drive
the unit carefully, etc. necessarily related to control
over the means by which the petitioner was to go
about his work; that the ruling applicable here is not
Singer Sewing Machine but National Labor Union
since the latter case involved jeepney
owners/operators and jeepney drivers, and that the
fact that the "boundary" here represented
installment payment of the purchase price on the
jeepney did not withdraw the relationship from that
of employer-employee, in view of the overt
presence of supervision and control by the
employer.
Republic of the Philippines v. Facts: Respondent Asiapro, as a cooperative, is Yes, employer-employee relationship exists
ASIAPRO composed of owners-members. The owners-members between respondent corporation and its owners-
G.R. No. 172101 do not receive compensation or wages from the members. All the elements of employer-employee
November 23, 2007 respondent cooperative. Instead, they receive a relationship are present in this case. First, it is
share in the service surplus which the respondent expressly provided in the Service Contracts that it is
cooperative earns from different areas of trade it the respondent cooperative which has the exclusive
engages in. Respondent cooperative entered into discretion in the selection and engagement of the
several Service Contracts with Stanfilco. owners-members as well as its team leaders who
will be assigned at Stanfilco. Second, the weekly
In order to enjoy the benefits under the Social stipends or the so-called shares in the service surplus
Security Law of 1997, the owners-members of the given by the respondent cooperative to its owners-
respondent cooperative, who were assigned to members were in reality wages. Third, it is also
Stanfilco requested the services of the latter to stated in the above-mentioned Service Contracts
register them with petitioner SSS as self-employed that it is the respondent cooperative which has the
and to remit their contributions as such. However, power to investigate, discipline and remove the
petitioner SSS said that respondent cooperative is owners-members and its team leaders who were
an employer of its owners-members working with rendering services at Stanfilco. Fourth, it is the
- 27 -
Stanfilco. Thus, respondent cooperative should respondent cooperative which has the sole control
register itself with petitioner SSS as an employer over the manner and means of performing the
and make the corresponding report and remittance services under the Service Contracts with Stanfilco
of premium contributions. Respondent cooperative as well as the means and methods of work. Also, the
asserted that it is not an employer because its respondent cooperative is solely and entirely
owners-members are the cooperative itself. Hence, it responsible for its owners-members, team leaders
cannot be its own employer. Moreover, respondent and other representatives at Stanfilco.
cooperative alleged that no employer-employee
relationship exists between it and its owners-[Doctrine]
members. In determining the existence of an employer-
employee relationship, the following elements are
Issue: Whether employer-employee relationship considered: (1) the selection and engagement of the
exists between respondent corporation and its workers; (2) the payment of wages by whatever
owners-members. means; (3) the power of dismissal; and (4) the
power to control the worker’s conduct, with the
latter assuming primacy in the overall consideration.
The most important element is the employer’s control
of the employee’s conduct, not only as to the result
of the work to be done, but also as to the means
and methods to accomplish. The power of control
refers to the existence of the power and not
necessarily to the actual exercise thereof. It is not
essential for the employer to actually supervise the
performance of duties of the employee; it is enough
that the employer has the right to wield that power.
PHIL. GLOBAL Facts: Philippine Global Communications, Inc. No employer-employee relationship exist. The
COMMUNICATIONS v. DE VERA (PhilCom), is a corporation engaged in the business Court, in determining the existence of an employer-
GR No. 157214 of communication services and allied activities, while employee relationship, has invariably adhered to
June 7, 2005 respondent Ricardo De Vera is a physician by the four-fold test, to wit: [1] the selection and
profession whom petitioner enlisted to attend to the engagement of the employee; [2] the payment of
medical needs of its employees. wages; [3] the power of dismissal; and [4] the
power to control the employee's conduct, or the so-
The parties agreed and formalized respondent's called "control test", considered to be the most
proposal in a document denominated important element. Applying the four-fold test to this
as RETAINERSHIP CONTRACT which will be for a case, we initially find that it was respondent himself
period of one year subject to renewal, it being who sets the parameters of what his duties would be
made clear therein that respondent will cover "the
- 28 -
retainership the Company previously had with Dr. K. in offering his services to petitioner.
Eulau" and that respondent's "retainer fee" will be
at P4,000.00 a month. Said contract was renewed The fact that the complainant was not considered an
yearly.5 The retainership arrangement went on from employee was recognized by the complainant
1981 to 1994 with changes in the retainer's fee. himself in a signed letter to the respondent dated
However, for the years 1995 and 1996, renewal of April 21, 1982 attached as Annex G to the
the contract was only made verbally. The turning respondent's Reply and Rejoinder. Quoting the
point in the parties' relationship surfaced in pertinent portion of said letter:
December 1996 when Philcom, thru a letter bearing
on the subject boldly written as "TERMINATION - 'To carry out your memo effectively and to provide
RETAINERSHIP CONTRACT", informed De Vera of its a systematic and workable time schedule which will
decision to discontinue the latter's "retainer's contract
serve the best interests of both the present and
with the Company because management has absent employee, may I propose an extended two-
decided that it would be more practical to provide hour service (1:00-3:00 P.M.) during which period I
medical services to its employees through accredited can devote ample time to both groups depending
hospitals near the company premises. De Vera filed upon the urgency of the situation. I shall readjust my
a complaint for illegal dismissal before the National private schedule to be available for the herein
Labor Relations Commission (NLRC). Labor Arbiter proposed extended hours, should you consider this
dismissed De Vera’s complaint for lack of merit. proposal. As regards compensation for the
additional time and services that I shall render to
On De Vera's appeal to the NLRC, the latter, in a the employees, it is dependent on your evaluation
reversed (the word used is "modified") that of the of the merit of my proposal and your confidence on
Labor Arbiter, on a finding that De Vera is Philcom's my ability to carry out efficiently said proposal.'
"regular employee" and accordingly directed the
company to reinstate him to his former position
The tenor of this letter indicates that the complainant
without loss of seniority rights and privileges and
was proposing to extend his time with the
with full backwages from the date of his dismissal
respondent and seeking additional compensation
until actual reinstatement. Hence, Philcom's present
for said extension. This shows that the respondent
recourse.
PHILCOM did not have control over the schedule
of the complainant as it [is] the complainant who
Issue: Whether an employer-employee relationship
is proposing his own schedule and asking to be
exists between Phil. Global and De Vera.
paid for the same. This is proof that the
complainant understood that his relationship with the
respondent PHILCOM was a retained physician and
not as an employee. If he were an employee he
could not negotiate as to his hours of work.
The complainant is a Doctor of Medicine, and
- 29 -
presumably, a well-educated person. Yet, the

complainant, in his position paper, is claiming that
he is not conversant with the law and did not give
much attention to his job title - on a 'retainer basis'.
But the same complainant admits in his affidavit that
his service for the respondent was covered by a
retainership contract [which] was renewed every
year from 1982 to 1994. Upon reading the
contract signed by the complainant himself (Annex
'C' of Respondent's Position Paper), it clearly states
that is a retainership contract. The retainer fee is
indicated thereon and the duration of the contract
for one year is also clearly indicated in paragraph
5 of the Retainership Contract. The complainant
cannot claim that he was unaware that the 'contract'
was good only for one year, as he signed the same
without any objections. The complainant also
accepted its renewal every year thereafter until
1994. As a literate person and educated person,
the complainant cannot claim that he does not know
what contract he signed and that it was renewed on
a year to year basis.
The labor arbiter added the indicia, not disputed by

respondent, that from the time he started to work
with petitioner, he never was included in its payroll;
was never deducted any contribution for remittance
to the Social Security System (SSS); and was in fact
subjected by petitioner to the ten (10%) percent
withholding tax for his professional fee, in
accordance with the National Internal Revenue
Code, matters which are simply inconsistent with an
employer-employee relationship.
Clearly, the elements of an employer-employee

relationship are wanting in this case. We may
add that the records are replete with evidence
showing that respondent had to bill petitioner for his
- 30 -
monthly professional fees. It simply runs against the

grain of common experience to imagine that an
ordinary employee has yet to bill his employer to
receive his salary. We note, too, that the power to
terminate the parties' relationship was mutually
vested on both. Either may terminate the
arrangement at will, with or without cause.
Finally, remarkably absent from the parties'

arrangement is the element of control, whereby the
employer has reserved the right to control the
employee not only as to the result of the work done
but also as to the means and methods by which the
same is to be accomplished.
Here, petitioner had no control over the means and

methods by which respondent went about
performing his work at the company premises. He
could even embark in the private practice of his
profession, not to mention the fact that respondent's
work hours and the additional compensation
therefor were negotiated upon by the parties. In
fine, the parties themselves practically agreed on
every terms and conditions of respondent's
engagement, which thereby negates the element of
control in their relationship.
Coca Cola Bottlers v. Climaco Facts: Respondent Dr. Dean Climaco is a medical No, there was no employer-employee
GR No. 146881 doctor who was hired by petitioner Coca-Cola by relationship between Coca Cola and Climaco.
February 5, 2007 virtue of a Retainer Agreement. The circumstances of this case show that no
Despite the non-renewal of the agreement, employer-employee relationship exists between the
respondent continued to perform his functions as parties. The petitioner company lacked the power
company doctor. He inquired from petitioner if it of control over the performance by respondent of
was agreeable recognizing him as a regular his duties. The Comprehensive Medical Plan, which
employee but the management refused to do so. contains the respondent’s objectives, duties and
This prompted respondent to file a complaint obligations, does not tell respondent "how to
seeking recognition as a regular employee. While conduct his physical examination, how to immunize,
the case was pending, respondent received a letter or how to diagnose and treat his patients,
- 31 -
from petitioner concluding their retainer agreement employees of [petitioner] company, in each case."
which then prompted him to file a complaint for
illegal dismissal. The company lacks the power of control that the
contract provides that respondent shall be directly
responsible to the employee concerned and their
Issue: Whether an employer-employee relationship
dependents for any injury, harm or damage caused
exists between Coca Cola and Climaco.
through professional negligence, incompetence or
other valid causes of action.
In addition, the Court finds that the schedule of work

and the requirement to be on call for emergency
cases do not amount to such control, but are
necessary incidents to the Retainership Agreement.
The Court also notes that the Retainership

Agreement granted to both parties the power to
terminate their relationship upon giving a 30-day
notice. Hence, petitioner company did not wield the
sole power of dismissal or termination.
The Court agrees with the Labor Arbiter and the

NLRC that there is nothing wrong with the
employment of respondent as a retained physician
of petitioner company and upholds the validity of
the Retainership Agreement which clearly stated
that no employer-employee relationship existed
between the parties. The Agreement also stated
that it was only for a period of 1 year beginning
January 1, 1988 to December 31, 1998, but it was
renewed on a yearly basis.
Considering that there is no employer-employee

relationship between the parties, the termination of
the Retainership Agreement, which is in accordance
with the provisions of the Agreement, does not
constitute illegal dismissal of respondent.
- 32 -
Chavez v. NLRC Facts: The respondent company Supreme Packaging Yes, employer-employee relationship existed
G.R. No. 146530 engaged the services of petitioner Pedro Chavez as between the respondent company and the
January 17, 2005 truck driver to deliver the respondent company’s petitioner. All the elements of employer-employee
products from its factory in Mariveles, Bataan, to its relationship are present in this case. First,
various customers, mostly in Metro Manila. The undeniably, it was the respondents who engaged
respondent company furnished the petitioner with a the services of the petitioner without the intervention
truck. The deliveries were made in accordance with of a third party. Second, that the petitioner was
the routing slips issued by respondent company paid on a per trip basis is not significant. This is
indicating the order, time and urgency of delivery. merely a method of computing compensation and
not a basis for determining the existence or absence
Petitioner expressed to respondent company’s plant of employer-employee relationship. Third, the
manager his desire to avail himself of the benefits respondents’ power to dismiss the petitioner was
that the regular employees were receiving but these inherent in the fact that they engaged the services
were not given to him. Petitioner filed a complaint of the petitioner as truck driver. They exercised this
for regularization with the NLRC. Before the case power by terminating the petitioner’s services albeit
could be heard, respondent company terminated the in the guise of “severance of contractual relation”
services of the petitioner which prompted the latter due allegedly to the latter’s breach of his
to file a complaint for illegal dismissal, among contractual obligation. Fourth, a careful review of
others. The respondents, for their part, denied the the records shows that the petitioner performed his
existence of an employer-employee relationship work as truck driver under the respondents’
between the respondent company and the supervision and control (truck driven by the
petitioner. They averred that the petitioner was an petitioner belonged to respondent company;
independent contractor as evidenced by the express instruction from the respondents that the
contract of service which he and the respondent truck shall be used exclusively to deliver respondent
company entered into. company’s goods; respondents directed the
petitioner, after completion of each delivery, to
Issue: Whether or not employer-employee park the truck in specific places only; respondents
relationship existed between the respondent determined how, where and when the petitioner
company and the petitioner. would perform his task by issuing to him gate passes
and routing slips).
[Doctrine]
The elements to determine the existence of an
employment relationship are: (1) the selection and
engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the
employer’s power to control the employee’s conduct.
The most important element is the employer’s control
- 33 -
of the employee’s conduct, not only as to the result

of the work to be done, but also as to the means
and methods to accomplish it.
It bears stressing that the existence of an employer-

employee relationship cannot be negated by
expressly repudiating it in a contract and providing
therein that the employee is an independent
contractor when the facts clearly show otherwise.
Indeed, the employment status of a person is
defined and prescribed by law and not by what the
parties say it should be.
ANGELICA FRANCISCO v. NLRC Facts: Petitioner Angelina Francisco was hired by Yes. Angelina is an employee of Kasei
GR No. 170087 respondent Kasei Corporation during its Corporation. Generally, courts have relied on the
August 31, 2006 incorporation stage as Accountant and Corporate so-called right of control test where the person for
Secretary and later as Liaison Officer. Subsequently whom the services are performed reserves a right to
she was also designated Acting Manager until control not only the end to be achieved but also the
replaced but was assured by the company that she means to be used in reaching such end. In addition
was still connected as Technical Consultant. to the standard of right-of-control, the existing
Thereafter, Kasei Corporation reduced petitioner’s economic conditions prevailing between the parties,
salary until it was later withheld despite repeated like the inclusion of the employee in the payrolls,
follow-ups. Petitioner once again asked for her can help in determining the existence of an
salary but was informed that she is no longer employer-employee relationship.
connected with the company. Petitioner thus filed an
action for constructive dismissal before the LaborHowever, in certain cases the control test is not
Arbiter. Respondent Kasei Corporation averred thatsufficient to give a complete picture of the
petitioner is not their employee as she performed relationship between the parties, owing to the
her work at her own discretion without their control
complexity of such a relationship where several
and supervision. Both the Labor Arbiter and NLRC positions have been held by the worker. There are
tribunal found found that Francisco was illegally instances when, aside from the employer’s power to
dismissed. CA reversed the decision. Hence, the control the employee with respect to the means and
present recourse. methods by which the work is to be accomplished,
economic realities of the employment relations help
Issue: Whether or not there was an employer- provide a comprehensive analysis of the true
employee relationship between Francisco and Kasei classification of the individual, whether as
Corporation. employee, independent contractor, corporate
- 34 -
officer or some other capacity.
The better approach would therefore be to adopt

a two-tiered test involving: (1) the putative
employer’s power to control the employee with
respect to the means and methods by which the
work is to be accomplished; and (2) the underlying
economic realities of the activity or relationship.
This two-tiered test would provide us with a

framework of analysis, which would take into
consideration the totality of circumstances
surrounding the true nature of the relationship
between the parties. This is especially appropriate
in this case where there is no written agreement
or terms of reference to base the relationship on;
and due to the complexity of the relationship
based on the various positions and
responsibilities given to the worker over the
period of the latter’s employment.
Thus, the determination of the relationship between

employer and employee depends upon the
circumstances of the whole economic activity, such
as: (1) the extent to which the services performed
are an integral part of the employer’s business; (2)
the extent of the worker’s investment in equipment
and facilities; (3) the nature and degree of control
exercised by the employer; (4) the worker’s
opportunity for profit and loss; (5) the amount of
initiative, skill, judgment or foresight required for
the success of the claimed independent enterprise;
(6) the permanency and duration of the relationship
between the worker and the employer; and (7) the
degree of dependency of the worker upon the
employer for his continued employment in that line
of business.
- 35 -
The proper standard of economic dependence is

whether the worker is dependent on the alleged
employer for his continued employment in that line
of business. In the United States, the touchstone of
economic reality in analyzing possible employment
relationships for purposes of the Federal Labor
Standards Act is dependency. By analogy, the
benchmark of economic reality in analyzing possible
employment relationships for purposes of the Labor
Code ought to be the economic dependence of the
worker on his employer.
By applying the control test, there is no doubt that

petitioner is an employee of Kasei Corporation
because she was under the direct control and
supervision of Seiji Kamura, the corporation’s
Technical Consultant. She reported for work
regularly and served in various capacities as
Accountant, Liaison Officer, Technical Consultant,
Acting Manager and Corporate Secretary, with
substantially the same job functions, that is,
rendering accounting and tax services to the
company and performing functions necessary and
desirable for the proper operation of the
corporation such as securing business permits and
other licenses over an indefinite period of
engagement.
Under the broader economic reality test, the

petitioner can likewise be said to be an employee
of respondent corporation because she had served
the company for six years before her dismissal,
receiving check vouchers indicating her
salaries/wages, benefits, 13th month pay, bonuses
and allowances, as well as deductions and Social
Security contributions from 1999 to 2000. When
petitioner was designated General Manager,
respondent corporation made a report to the SSS
- 36 -
signed by Irene Ballesteros. Petitioner’s membership

in the SSS as manifested by a copy of the SSS
specimen signature card which was signed by the
President of Kasei Corporation and the inclusion of
her name in the on-line inquiry system of the SSS
evinces the existence of an employer-employee
relationship between petitioner and respondent
corporation.
It is therefore apparent that petitioner is

economically dependent on respondent corporation
for her continued employment in the latter’s line of
business.
Tongko v. Manufacturers Life Facts: Manufacturer’s Life Insurance Co. (Phils.), Inc. No, there was no employer-employee
GR No. 167622 (Manulife) is a domestic corporation engaged in life relationship between Tongko and Manulife.
June 29, 2010 and January 25, insurance business. It executed a Career Agents
2011 Agreement with Gregorio Tongko whereby the In the November 7, 2008 decision, the Court ruled
latter agreed to be an independent contracor for that there was an employer-employee relationship
the canvass of insurance policies and other products between Tongko and Manulife. Manulife had the
offered by the company. Tongko was promoted to power of control over Tongko. Under the Agreement
Unit Manager in 1983 and Branch Manager in executed between Tongko and Manulife in 1977,
1990. However, Tongko received a letter in 2001 the former must comply with the following
from Manulife President and Chief Executive requirements: (1) compliance with the regulations
Officer, Ranato Vergel De Dios, regarding a Metro and requirements of the company; (2) maintenance
North Sales Managers Meeting. The said letter of a level of knowledge of the company’s products
stated that the region of Tongko is the lowest that is satisfactory to the company; and (3)
performer in terms of recruiting and provided for compliance with a quota of new businesses. Tongko
measures to address such issue. Subsequently, was required to comply with the different codes of
Tongko received another letter form De Dios conduct of Manulife and he was also tasked to
terminating his Agent’s Contract for his failure to perform administrative duties that established his
align his directions with the Management’s avowed employment.
agency growth policy. Tongko then filed a complaint
for illegal dismissal against Manulife before the In the June 29, 2010 decision, the Court reversed
NLRC. and set aside the November 7, decision. There was
no employer-employee relationship between
The LA ruled that no employer-employee Tongko and Manulife. The primary evidence in the
relationship was found in applying the four-fold test. present case is the July 1, 1977 Agreement that
- 37 -
governed and defined the parties’ relations until the

The NLRC ruled that there was an employer- Agreement’s termination in 2001.
employee relationship between Tongko and By the Agreement’s express terms, Tongko served as
Manulife. an "insurance agent" for Manulife, not as an
employee. To be sure, the Agreement’s legal
The CA reversed and set aside the NLRC decision characterization of the nature of the relationship
and affirmed the LA decision that there was no cannot be conclusive and binding on the courts; the
employer-employee relationship between Tongko characterization of the juridical relationship the
and Manulife. Agreement embodied is a matter of law that is for
the courts to determine. At the same time, though,
the characterization the parties gave to their
relationship in the Agreement cannot simply be
brushed aside because it embodies their intent at
the time they entered the Agreement, and they
Issue: Whether an employer-employee relationship were governed by this understanding throughout
exists between Manulife and Tongko. their relationship. At the very least, the provision on
the absence of employer-employee relationship
between the parties can be an aid in considering
the Agreement and its implementation, and in
appreciating the other evidence on record.
Evidence shows that Tongko’s role as an insurance
agent never changed during his relationship with
Manulife. If changes occurred at all, the changes did
not appear to be in the nature of their core
relationship. Tongko essentially remained an agent,
but moved up in this role through Manulife’s
recognition that he could use other agents approved
by Manulife, but operating under his guidance and
in whose commissions he had a share. For want of a
better term, Tongko perhaps could be labeled as a
"lead agent" who guided under his wing other
Manulife agents similarly tasked with the selling of
Manulife insurance.
Evidence suggests that these other agents operated

under their own agency agreements. Thus, if
Tongko’s compensation scheme changed at all
during his relationship with Manulife, the change
- 38 -
was solely for purposes of crediting him with his

share in the commissions the agents under his wing
generated. As an agent who was recruiting and
guiding other insurance agents, Tongko likewise
moved up in terms of the reimbursement of
expenses he incurred in the course of his lead
agency, a prerogative he enjoyed pursuant to
Article 1912 of the Civil Code. Thus, Tongko
received greater reimbursements for his expenses
and was even allowed to use Manulife facilities in
his interactions with the agents, all of whom were, in
the strict sense, Manulife agents approved and
certified as such by Manulife with the Insurance
Commission.
The best evidence of control – the agreement or

directive relating to Tongko’s duties and
responsibilities – was never introduced as part of
the records of the case. The reality is, prior to de
Dios’ letter, Manulife had practically left Tongko
alone not only in doing the business of selling
insurance, but also in guiding the agents under his
wing.
The mere presentation of codes or of rules and

regulations, however, is not per se indicative of
labor law control as the law and jurisprudence
teach us.
Insurance Code imposes obligations on both the

insurance company and its agents in the
performance of their respective obligations under
the Code, particularly on licenses and their
renewals, on the representations to be made to
potential customers, the collection of premiums, on
the delivery of insurance policies, on the matter of
compensation, and on measures to ensure ethical
business practice in the industry.
- 39 -
The general law on agency, on the other hand,

expressly allows the principal an element of control
over the agent in a manner consistent with an
agency relationship. In this sense, these control
measures cannot be read as indicative of labor law
control. Foremost among these are the directives
that the principal may impose on the agent to
achieve the assigned tasks, to the extent that they
do not involve the means and manner of
undertaking these tasks. The law likewise obligates
the agent to render an account; in this sense, the
principal may impose on the agent specific
instructions on how an account shall be made,
particularly on the matter of expenses and
reimbursements. To these extents, control can be
imposed through rules and regulations without
intruding into the labor law concept of control for
purposes of employment.
According to the Insular Life case, a commitment to

abide by the rules and regulations of an insurance
company does not ipso facto make the insurance
agent an employee. Neither do guidelines somehow
restrictive of the insurance agent’s conduct
necessarily indicate "control" as this term is defined
in jurisprudence. Guidelines indicative of labor law
"control," as the first Insular Life case tells us, should
not merely relate to the mutually desirable result
intended by the contractual relationship; they must
have the nature of dictating the means or methods
to be employed in attaining the result, or of fixing
the methodology and of binding or restricting the
party hired to the use of these means. In fact,
results-wise, the principal can impose production
quotas and can determine how many agents, with
specific territories, ought to be employed to achieve
the company’s objectives. These are management
- 40 -
policy decisions that the labor law element of

control cannot reach.
A "coordinative" standard for a manager cannot be

indicative of control; the standard only essentially
describes what a Branch Manager is – the person in
the lead who orchestrates activities within the group.
To "coordinate," and thereby to lead and to
orchestrate, is not so much a matter of control by
Manulife; it is simply a statement of a branch
manager’s role in relation with his agents from the
point of view of Manulife whose business Tongko’s
sales group carries.
Specifically, the following portions of the affidavits
were not brought out:
1.a. I have no fixed wages or salary since my
services are compensated by way of commissions
based on the computed premiums paid in full on the
policies obtained thereat;
1.b. I have no fixed working hours and employ my

own method in soliticing insurance at a time and
place I see fit;
1.c. I have my own assistant and messenger who

handle my daily work load;
1.d. I use my own facilities, tools, materials and

supplies in carrying out my business of selling
insurance;
6. I have my own staff that handles the day to day

operations of my office;
7. My staff are my own employees and received

salaries from me;
9. My commission and incentives are all reported to
- 41 -
the Bureau of Internal Revenue (BIR) as income by a

self-employed individual or professional with a ten
(10) percent creditable withholding tax. I also remit
monthly for professionals.
These statements, read with the above comparative

analysis of the Manulife and the Grepalife cases,
would have readily yielded the conclusion that no
employer-employee relationship existed between
Manulife and Tongko.
What happened in Tongko’s case was the grant of

an expanded sales agency role that recognized him
as leader amongst agents in an area that Manulife
defined.
Under this legal situation, the only conclusion that

can be made is that the absence of evidence
showing Manulife’s control over Tongko’s contractual
duties points to the absence of any employer-
employee relationship between Tongko and
Manulife. In the context of the established evidence,
Tongko remained an agent all along; although his
subsequent duties made him a lead agent with
leadership role, he was nevertheless only an agent
whose basic contract yields no evidence of means-
and-manner control.
In the January 25, 2011 decision, the Court affirmed

the June 29, 2010 decision that there was no
employer-employee relationship between Tongko
and Manulife. Control over the performance of the
task of one providing service – both with respect to
the means and manner, and the results of the service
– is the primary element in determining whether an
employment relationship exists. We resolve the
petitioner’s Motion against his favor since he failed
to show that the control Manulife exercised over him
- 42 -
was the control required to exist in an employer-

employee relationship; Manulife’s control fell short
of this norm and carried only the characteristic of
the relationship between an insurance company and
its agents, as defined by the Insurance Code and by
the law of agency under the Civil Code.
There are built-in elements of control specific to an
insurance agency, which do not amount to the
elements of control that characterize an employment
relationship governed by the Labor Code. The
Insurance Code provides definite parameters in the
way an agent negotiates for the sale of the
companys insurance products, his collection activities
and his delivery of the insurance contract or policy.
They do not reach the level of control into the means
and manner of doing an assigned task that
invariably characterizes an employment relationship
as defined by labor law.
To reiterate, guidelines indicative of labor law

"control" do not merely relate to the mutually
desirable result intended by the contractual
relationship; they must have the nature of dictating
the means and methods to be employed in attaining
the result. Tested by this norm, Manulife’s instructions
regarding the objectives and sales targets, in
connection with the training and engagement of
other agents, are among the directives that the
principal may impose on the agent to achieve the
assigned tasks. They are targeted results that
Manulife wishes to attain through its agents.
Manulife’s codes of conduct, likewise, do not
necessarily intrude into the insurance agents means
and manner of conducting their sales. Codes of
conduct are norms or standards of behavior rather
than employer directives into how specific tasks are
to be done.
- 43 -
Matling Industrial v. Coros Facts: After his dismissal by Matling as its Vice No, SEC has no jurisdiction over the case. The fact
G.R. No. 157802 President for Finance and Administration, that the parties involved in the controversy are all
October 13, 2010 respondent Ricardo R. Coros filed a complaint for stockholders or that the parties involved are the
illegal suspension and illegal dismissal against stockholders and the corporation does not
petitioners Matling and some of its corporate necessarily place the dispute within the ambit of the
officers with the NLRC. Petitioners moved to dismiss jurisdiction of SEC. The better policy to be followed
the complaint, raising the ground, among others, that in determining jurisdiction over a case should be to
the complaint pertained to the jurisdiction of the SEC consider concurrent factors such as the status or
due to the controversy being intra-corporate relationship of the parties or the nature of the
inasmuch as the respondent was a member of question that is the subject of their controversy. In
Matling’s Board of Directors aside from being its the absence of any one of these factors, the SEC
Vice-President for Finance and Administration prior will not have jurisdiction. Furthermore, it does not
to his termination. The respondent opposed the necessarily follow that every conflict between the
petitioners’ motion to dismiss, insisting that his status corporation and its stockholders would involve such
as a member of Matling’s Board of Directors was corporate matters as only the SEC can resolve in the
doubtful, considering that he had not been formally exercise of its adjudicatory or quasi-judicial powers.
elected as such and that he did not own a single
share of stock in Matling. The criteria for distinguishing between corporate
officers who may be ousted from office at will, on
Issue: Whether or not SEC has jurisdiction over the one hand, and ordinary corporate employees who
case. may only be terminated for just cause, on the other
hand, do not depend on the nature of the services
performed, but on the manner of creation of the
office. In the respondent’s case, he was supposedly
at once an employee, a stockholder, and a Director
of Matling. The circumstances surrounding his
appointment to office must be fully considered to
determine whether the dismissal constituted an intra-
corporate controversy or a labor termination
dispute. We must also consider whether his status as
Director and stockholder had any relation at all to
his appointment and subsequent dismissal as Vice
President for Finance and Administration.
Obviously enough, the respondent was not

appointed as Vice President for Finance and
Administration because of his being a stockholder or
Director of Matling.
- 44 -
COSARE V. BROADCOM ASIA Facts: Cosare was employed as a salesman by Cosare was a regular employee of Broadcom
G.R. 201298 Arevalo, who was then in the business of selling Asia. In Matling Industrial and Commercial
February 5, 2014 broadcast equipment needed by television networks Corporation v. Coros, the Court distinguished
and production houses. In December 2000, Arevalo between a "regular employee" and a "corporate
set up the company Broadcom, still to continue the officer" for purposes of establishing the true nature
business of trading communication and broadcast of a dispute or complaint for illegal dismissal and
equipment. Cosare was named an incorporator of determining which body has jurisdiction over it.
Broadcom, having been assigned 100 shares of Succinctly, it was explained that "[t]he determination
stock with par value of P1.00 per share. In Octoberof whether the dismissed officer was a regular
2001, Cosare was promoted to the position of employee or corporate officer unravels the
Assistant Vice President for Sales (AVP for Sales) conundrum" of whether a complaint for illegal
and Head of the Technical Coordination. Alex F. dismissal is cognizable by the LA or by the RTC. "In
Abiog (Abiog) was appointed as Broadcom’s Vice case of the regular employee, the LA has
President for Sales and thus, became Cosare’s jurisdiction; otherwise, the RTC exercises the legal
immediate superior. On March 23, 2009, Cosare authority to adjudicate. Applying the foregoing to
sent a confidential memo to Arevalo to inform him of
the present case, the LA had the original
the anomalies which were allegedly being jurisdiction over the complaint for illegal
committed by Abiog against the company.Arevalo dismissal because Cosare, although an officer of
failed to act on Cosare’s accusations and instead Broadcom for being its AVP for Sales, was not a
called Cosare for a meeting and was asked to "corporate officer" as the term is defined by law.
tender his resignation in exchange for "financial We emphasized in Real v. Sangu Philippines, Inc. the
assistance" in the amount of P300,000.00. Cosare definition of corporate officers for the purpose of
refused to comply with the directive. Cosare identifying an intra-corporate controversy. Citing
received a memo charging him of serious misconduct Garcia v. Eastern Telecommunications Philippines,
and willful breach of trust. On April 3, 2009, Inc., we held: ‘Corporate officers’ in the context of
Cosare filed the subject labor complaint, claiming Presidential Decree No. 902-A are those officers of
that he was constructively dismissed from the corporation who are given that character by the
employment by the respondents. He further argued Corporation Code or by the corporation’s by-laws.
that he was illegally suspended, as he placed no There are three specific officers whom a corporation
serious and imminent threat to the life or propertymust have under Section 25 of the Corporation
of his employer and co-employees. In refuting Code. These are the president, secretary and the
Cosare’s complaint, the respondents argued that treasurer. The number of officers is not limited to
Cosare was neither illegally suspended nor these three. A corporation may have such other
dismissed from employment. officers as may be provided for by its by-laws like,
but not limited to, the vice-president, cashier,
The Labor Arbiter rendered his Decision dismissing auditor or general manager. The number of
the complaint on the ground of Cosare’s failure to corporate officers is thus limited by law and by the
establish that he was dismissed, constructively or
- 45 -
otherwise, from his employment. Unyielding, Cosare corporation’s by-laws."

appealed the LA decision to the NLRC. The NLRC
rendered its Decision reversing the Decision of the In Tabang v. NLRC, the Court also made the
Labor Arbiter, and found that the Respondents are following pronouncement on the nature of corporate
found guilty of Illegal Constructive Dismissal. offices:
Thereafter, the CA rendered the assailed
Decision granting the respondents’ petition.
It has been held that an "office" is created by the
charter of the corporation and the officer is elected
Issue: Whether or not Cosare is a regular by the directors and stockholders. On the other
employee. hand, an "employee" usually occupies no office and
generally is employed not by action of the directors
or stockholders but by the managing officer of the
corporation who also determines the compensation
to be paid to such employee.
The CA’s heavy reliance on the contents of the

General Information Sheets, which were submitted
by the respondents during the appeal proceedings
and which plainly provided that Cosare was an
"officer" of Broadcom, was clearly misplaced. The
said documents could neither govern nor establish
the nature of the office held by Cosare and his
appointment thereto. Furthermore, although Cosare
could indeed be classified as an officer as provided
in the General Information Sheets, his position could
only be deemed a regular office, and not a
corporate office as it is defined under the
Corporation Code. Hence, Cosare is a regular
employee.
[Doctrine] A "regular employee" and a

"corporate officer" for purposes of establishing the
true nature of a dispute or complaint for illegal
dismissal and determining which body has
jurisdiction over it. Succinctly, it was explained that
"[t]he determination of whether the dismissed officer
was a regular employee or corporate officer
unravels the conundrum" of whether a complaint for
- 46 -
illegal dismissal is cognizable by the LA or by the

RTC.
Atlanta v. Sebolino Facts: Sebolino et al. filed several complaints for Yes, there was an employee-employer
GR No. 187320 illegal dismissal, regularization, underpayment, relationship between Atlanta and Sebolino.
January 26, 2011 nonpayment of wages and other money claims as Based on company operations at the time material
well as damages. They alleged that they had to the case, Costales, Almoite, Sebolino and Sagun
attained regular status as they were allowed to were already rendering service to the company as
work with Atlanta for more than six (6) months from employees before they were made to undergo
the start of a purported apprenticeship agreement apprenticeship. The company itself recognized the
between them and the company. They claimed that respondents' status through relevant operational
they were illegally dismissed when the records
apprenticeship agreement expired. The fact that Costales, Almoite, Sebolino and Sagun
were already rendering service to the company
In defense, Atlanta and Chan argued that the when they were made to undergo apprenticeship
workers were not entitled to regularization and to (as established by the evidence) renders the
their money claims because they were engaged as apprenticeship agreements irrelevant as far as the
apprentices under a government-approved four are concerned.
apprenticeship program. The company offered to These tasks and their nature characterized the four
hire them as regular employees in the event as regular employees under Article 280 of the
vacancies for regular positions occur in the section of Labor Code. Thus, when they were dismissed
the plant where they had trained. They also claimed without just or authorized cause, without notice, and
that their names did not appear in the list of without the opportunity to be heard, their dismissal
employees (Master List) prior to their engagement was illegal under the law.
as apprentices.
Even if we recognize the company's need to train its
employees through apprenticeship, we can only
Issue: Whether an employer-employee relationship consider the first apprenticeship agreement for the
exists between Atlanta and Sebolino. purpose. With the expiration of the first agreement
and the retention of the employees, Atlanta had, to
all intents and purposes, recognized the completion
of their training and their acquisition of a regular
employee status. To foist upon them the second
apprenticeship agreement for a second skill which
was not even mentioned in the agreement itself, is a
violation of the Labor Code's implementing
rules and is an act manifestly unfair to the
employees, to say the least.
- 47 -
Intel Technology v. NLRC & Facts: Jeremias Cabiles was initially hired by Intel Yes, the employee-employer relationship
Cabiles Phil. as an Inventory Analyst. He was subsequently between Intel Phil. and Cabiles was severed
G.R. No. 200575 promoted several times over the years and was also when the latter transferred to Intel HK. All of the
February 5, 2014 assigned at Intel Arizona and Intel Chengdu. He benchmarks for the continuity, existence or
later applied for a position at Intel Semiconductor termination of an employer-employee relationship
Limited Hong Kong (Intel HK). After seven (7) months ceased upon Cabiles’ assumption of duties with Intel
of employment, Cabiles resigned from Intel HK. HK. Intel HK became the new employer. It provided
Cabiles his compensation. Cabiles then became
About two years thereafter, Cabiles filed a subject to Hong Kong labor laws, and necessarily,
complaint for non-payment of retirement benefits the rights appurtenant thereto, including the right of
and for moral and exemplary damages with the Intel HK to fire him on available grounds. Lastly,
NLRC. He insisted that he was employed by Intel for Intel HK had control and supervision over him as its
10 years and 5 months – a period which included new Finance Manager. Evidently, Intel Phil. no
his seven (7) month stint with Intel HK. Thus, he longer had any control over him.
believed he was qualified to avail of the benefits
under the company’s retirement policy allowing an [Doctrine]
employee who served for 10 years or more to The continuity, existence or termination of an
receive retirement benefits. employer-employee relationship in a typical
secondment contract or any employment contract for
Issue: Whether or not the employee-employer that matter is measured by the following yardsticks:
relationship between Intel Phil. and Cabiles was 1. the selection and engagement of the
severed when the latter transferred to Intel HK. employee;
2. the payment of wages;
3. the power of dismissal; and
4. the employer’s power to control the
employee’s conduct.
ROYALE HOMES v. ALCANTARA Facts: Royale Homes, a corporation engaged in Alcantara was not an employee but a mere
GR No. marketing real estates, appointed Alcantara as its independent contractor. In this case, the
JULY 28, 2014 Marketing Director for a fixed period of one year. contract, duly signed and not disputed by the
His work consisted mainly of marketing Royale parties, conspicuously provides that "no employer-
Homes’ real estate inventories on an exclusive basis. employee relationship exists between" Royale
Royale Homes reappointed him for several Homes and Alcantara, as well as his sales agents. It
consecutive years, the last of which covered the is clear that they did not want to be bound by
period January 1 to December 31, 2003. employer-employee relationship at the time of the
signing of the contract.
Alcantara filed a Complaint for Illegal
- 48 -
Dismissal against Royale. Alcantara alleged that he

is a regular employee of Royale Homes since he is In determining the existence of an employer-
performing tasks that are necessary and desirable employee relationship, this Court has generally
to its business and that the acts of the executive relied on the four-fold test, to wit: (1) the selection
officers of Royale Homes amounted to his dismissal and engagement of the employee; (2) the payment
from work without any valid or just cause and in of wages; (3) the power of dismissal; and (4) the
gross disregard of the proper procedure for employer’s power to control the employee with
dismissing employees. respect to the means and methods by which the
work is to be accomplished. However, not every
Royale Homes, on the other hand, vehemently form of control is indicative of employer-employee
denied that Alcantara is its employee. It argued that relationship. A person who performs work for
the appointment paper of Alcantara is clear that it another and is subjected to its rules, regulations, and
engaged his services as an independent sales code of ethics does not necessarily become an
contractor for a fixed term of one year only. He employee. As long as the level of control does not
never received any salary, 13th month pay, interfere with the means and methods of
overtime pay or holiday pay from Royale Homes as accomplishing the assigned tasks, the rules imposed
he was paid purely on commission basis. In addition, by the hiring party on the hired party do not
Royale Homes had no control on how Alcantara amount to the labor law concept of control that is
would accomplish his tasks and responsibilities as he indicative of employer-employee relationship. In
was free to solicit sales at any time and by any Insular Life Assurance Co., Ltd. v. National Labor
manner which he may deem appropriate and Relations Commission it was pronounced that:
necessary. According to Royale Homes, Alcantara Logically, the line should be drawn between rules that
decided to leave the company after his wife, who merely serve as guidelines towards the achievement of
was once connected with it as a sales agent, had the mutually desired result without dictating the means
formed a brokerage company that directly or methods to be employed in attaining it, and those
competed with its business, and even recruited some that control or fix the methodology and bind or
of its sales agents. Two months after he relinquished restrict the party hired to the use of such means. The
his post, however, Alcantara appeared in Royale first, which aim only to promote the result, create no
Homes and submitted a letter claiming that he was employer-employee relationship unlike the second,
illegally dismissed. which address both the result and the means used to
achieve it.
The Labor Arbiter rendered a Decision holding that
Alcantara is an employee of Royale Homes and that Notably, Alcantara was not required to observe
the pre-termination of his contract was against the definite working hours. Except for soliciting sales,
law. The NLRC rendered its Decision, ruling that Royale Homes did not assign other tasks to him. He
Alcantara is not an employee but a mere had full control over the means and methods of
independent contractor of Royale Homes. It based accomplishing his tasks as he can "solicit sales at any
its ruling mainly on his employment contract. The CA time and by any manner which [he may] deem
- 49 -
promulgated its Decision granting Alcantara’s appropriate and necessary." He performed his
Petition and reversing the NLRC’s Decision. Applying
tasks on his own account free from the control and
the four-fold and economic reality tests, it held that
direction of Royale Homes in all matters connected
Alcantara is an employee of Royale Homes. therewith, except as to the results thereof. The Court
is, therefore, convinced that Alcantara is not an
employee of Royale Homes, but a mere
Issue: Whether or not Alcantra was an employee independent contractor.
of Royale Homes.
[Doctrine]
Not every form of control that a hiring party
imposes on the hired party is indicative of
employee-employer relationship. Rules and
regulations that merely serve as guidelines towards
the achievement of a mutually desired result without
dictating the means and methods of accomplishing it
do not establish employer-employee relationship.
Bazar v. Ruizol Facts: Respondent Carlos A. Ruizol was a mechanic Yes, there was an employee-employer
GR No. 198782 at Norkis Distributors, Inc. (NDI) assigned at its relationship between Norkis and Ruizol. The Court
October 19, 2016 Surigao City branch where petitioner Allan Bazar applied the four-fold test in this wise:
was the manager. He was paid a monthly salary of
P2,050 and worked from 8 a.m. to 5 p.m. with a First, the services of [respondent] was indisputably
one-hour meal break for six days in a week. engaged by the [NDI] without the aid of a third
party.
Upon the other hand, petitioner averred that NDI is
a corporation engaged in the sale, wholesale and Secondly, the fact that the [respondent] was paid a
retail of Yamaha motorcycle units. Respondent is not
retainer fee and on a per diem basis does not
an employee but a franchised mechanic of NDI, altogether negate the existence of an [employer]-
pursuant to a retainership agreement. Being the employee relationship. The retainer agreement only
owner of a motor repair shop, he performed repair provided the breakdown, of the [respondent's]
warranty service, back repair of Yamaha units, and monthly income. On a more important note, the
ordinary repair at his own shop. [NDI] did not present its payroll, which it could
conveniently do, to disprove the [respondent's] claim
The Labor Arbiter ruled that an employer-employee that he was their employee.
relationship exists.
Third, the [NDI's] power of dismissal can be
The NLRC reversed the ruling of the Labor Arbiter. [gleaned] from the termination of the [respondent]
although couched under the guise of the non-
- 50 -
The CA set aside the NLRC ruling and affirmed the renewal of his contract with the company. Also, the
LA ruling. contract alone showed that the [respondent]
provided service to Yamaha motorbikes brought to
the NDI service shop in accordance with the manual
Issue: Whether an employer-employee relationship of the unit and subject to the minimum standards set
exists between Norkis and Ruizol. by the company. Also, tool kits were furnished to the
mechanics which they use in repairs and checking of
the units conducted inside or in front of the Norkis
Display Center.
The control test is the most crucial and determinative

indicator of the presence or absence of an
employer-employee relationship. Under the control
test, an employer-employee relationship exists
where the person for whom the services are
performed reserves the right to control not only the
end achieved, but also the manner and means to be
used in reaching that end.
[Doctrine] It is the law that defines and governs an

employment relationship, whose terms are not
restricted by those fixed in the written contract, for
other factors, like the nature of the work the
employee has been called upon to perform, are
also considered. The law affords protection to an
employee, and does not countenance any attempt
to subvert its spirit and intent. Any stipulation in
writing can be ignored when the employer utilizes
the stipulation to deprive the employee of his
security of tenure. The inequality that characterizes
employer-employee relations generally tips the
scales in favor of the employer, such that the
employee is often scarcely provided real and
better options.
- 51 -
EMPLOYER-EMPLOYEE RELATIONSHIP
Independent Contractors and Labor-Only Contractors
Department Order No. 174, series of 2017 (NOTE: Compare with DO No. 18-A)
Department Circular No. 1-2017
Philippine Airlines v. Ligan Facts: Petitioner Philippine Airlines, as Owner, and Synergy is a mere job-only contractor. From the
G.R. No. 146408 Synergy Services Corporation, as Contractor, records of the case, it is gathered that the work
February 29, 2008 entered into an agreement whereby Synergy performed by almost all of the respondents -
undertook to “provide loading, unloading, delivery loading and unloading of baggage and cargo of
of baggage and cargo and other related services passengers - is directly related to the main business
to and from [petitioner]'s aircraft at the Mactan of petitioner. And the equipment used by
Station.” Moreover, the agreement expressly respondents as station loaders, such as trailers and
provided that Synergy was "an independent conveyors, are owned by petitioner.
contractor and that there would be no employer-
employee relationship between CONTRACTOR The express provision in the agreement that
and/or its employees on the one hand, and Synergy was an independent contractor and there
OWNER, on the other." would be "no employer-employee relationship
between [Synergy] and/or its employees on one
Respondents, who appear to have been assigned hand, and [petitioner] on the other hand" is not
by Synergy to petitioner filed complaints before the legally binding and conclusive as contractual
NLRC against petitioner, Synergy and their provisions are not valid determinants of the
respective officials for underpayment, non-payment existence of such relationship. For it is the totality of
of premium pay for holidays, premium pay for rest the facts and surrounding circumstances of the case
days, service incentive leave pay, 13th month pay which is determinative of the parties' relationship.
and allowances, and for regularization of
employment status with petitioner, they claiming to
[Doctrine]
be “performing duties for the benefit of petitioner
The statutory basis of legitimate contracting or
since their job is directly connected with its business
subcontracting is provided in Article 106 of the
x x x." Labor Code which reads:
“x x x
Issue: Whether Synergy is a mere job-only There is "labor-only" contracting where the
contractor or a legitimate contractor. person supplying workers to an employer does
not have substantial capital or investment in
the form of tools, equipment, machineries,
- 52 -
work premises, among others, AND the

workers recruited and placed by such person
are performing activities which are directly
related to the principal business of such
employer. In such cases, the person or
intermediary shall be considered merely as
an agent of the employer who shall be
responsible to the workers in the same
manner and extent as if the latter were
directly employed by him.”
Legitimate contracting and labor-only contracting

are defined in Department Order (D.O.) No. 18-02,
Series of 2002 (Rules Implementing Articles 106 to
109 of the Labor Code, as amended) as follows:
“Section 3. Trilateral relationship in contracting
arrangements. In legitimate contracting, there
exists a trilateral relationship under which there
is a contract for a specific job, work or service
between the principal and the contractor or
subcontractor, and a contract of employment
between the contractor or subcontractor and its
workers. Hence, there are three parties
involved in these arrangements, the principal
which decides to farm out a job or service to a
contractor or subcontractor, the contractor or
subcontractor which has the capacity to
independently undertake the performance of
the job, work or service, and the contractual
workers engaged by the contractor or
subcontractor to accomplish the job, work or
service.
Section 5. Prohibition against labor-only

contracting. Labor-only contracting is hereby
declared prohibited. For this purpose, labor-
only contracting shall refer to an arrangement
where the contractor or subcontractor merely
- 53 -
recruits, supplies or places workers to perform

a job, work or service for a principal, and any
of the following elements are present:
(i) The contractor or subcontractor does
not have substantial capital or
investment which relates to the job,
work or service to be performed and
the employees recruited, supplied or
placed by such contractor or
subcontractor are performing activities
which are directly related to the main
business of the principal; OR
(ii) The contractor does not exercise the
right to control over the performance
of the work of the contractual
employee.
“Substantial capital or investment” and the “right to

control” are defined in the same Section 5 of the
Department Order as follows:
“Substantial capital or investment” refers to

capital stocks and subscribed capitalization in
the case of corporations, tools, equipment,
implements, machineries and work premises,
actually and directly used by the contractor or
subcontractor in the performance or completion
of the job, work or service contracted out.
The “right to control” shall refer to the right

reserved to the person for whom the services of
the contractual workers are performed, to
determine not only the end to be achieved, but
also the manner and means to be used in
reaching that end. (Emphasis and underscoring
supplied)
- 54 -
SAN MIGUEL CORPORATION v. Facts: Petitioner San Miguel Corporation (SMC) and Sunflower Multi-Purpose Cooperative is a Labor-
ABALLA Sunflower Multi-Purpose Cooperative (Sunflower) only contracting. The Court ruled that there is
GR No. 149011 entered into a one-year Contract of Service and "labor-only" contracting where the person supplying
June 28, 2005 such contract is renewed on a monthly basis until workers to an employer does not have substantial
terminated. Pursuant to this, respondent Prospero capital or investment in the form of tools, equipment,
Aballa et al. rendered services to SMC. After one machineries, work premises, among others, and the
year of rendering service, Aballa et al., filed a workers recruited and placed by such person are
complaint before National Labor Relations performing activities which are directly related to
Commission (NLRC) praying that they be declared the principal business of such employer. In such
as regular employees of SMC. On the other hand, cases, the person or intermediary shall be
SMC filed before the Department of Labor and considered merely as an agent of the employer who
Employment (DOLE) a Notice of Closure due to shall be responsible to the workers in the same
serious business losses. Hence, the manner and extent as if the latter were directly
labor arbiter dismissed the complaint and ruled in employed by him.
favor of SMC. Aballa et al. then appealed before
the NLRC. The NLRC dismissed the appeal finding "Substantial capital or investment" refers to capital
that Sunflower is an independent contractor.On stocks and subscribed capitalization in the case of
appeal, the Court of Appeals reversed NLRC’s corporations, tools, equipment, implements,
decision on the ground that the agreement between machineries and work premises, actually and
SMC and Sunflower showed a clear intent to abstain directly used by the contractor or subcontractor in
from establishing an employer-employee the performance or completion of the job, work or
relationship. service contracted out.
Issue: Whether or not Sunflower Multi-Purpose The "right to control" shall refer to the right reserved
Cooperative is a labor-only contracting. to the person for whom the services of the
contractual workers are performed, to determine
not only the end to be achieved, but also the
manner and means to be used in reaching that end.
The test to determine the existence of independent

contractorship is whether one claiming to be an
independent contractor has contracted to do the
work according to his own methods and without
being subject to the control of the employer,
except only as to the results of the work.
In legitimate labor contracting, the law creates an

employer-employee relationship for a limited
- 55 -
purpose, i.e., to ensure that the employees are paid

their wages. The principal employer becomes jointly
and severally liable with the job contractor, only for
the payment of the employees’ wages whenever the
contractor fails to pay the same. Other than that,
the principal employer is not responsible for any
claim made by the employees.
In labor-only contracting, the statute creates an

employer-employee relationship for a
comprehensive purpose: to prevent a circumvention
of labor laws. The contractor is considered merely
an agent of the principal employer and the latter is
responsible to the employees of the labor-only
contractor as if such employees had been directly
employed by the principal employer.
While indeed Sunflower was issued Certificate of

Registration No. IL0-875 on February 10, 1992 by
the Cooperative Development Authority, this merely
shows that it had at least ₱2,000.00 in paid-up
share capital as mandated by Section 5 of Article
14 of Republic Act No. 6938, otherwise known as
the Cooperative Code, which amount cannot be
considered substantial capitalization.
What appears is that Sunflower does not have

substantial capitalization or investment in the form
of tools, equipment, machineries, work premises and
other materials to qualify it as an independent
contractor.
On the other hand, it is gathered that the lot,

building, machineries and all other working tools
utilized by private respondents in carrying out their
tasks were owned and provided by SMC. Consider
the following uncontroverted allegations of private
- 56 -
respondents in the Joint Affidavit:
[Sunflower], during the existence of its service

contract with respondent SMC, did not own a single
machinery, equipment, or working tool used in the
processing plant. Everything was owned and
provided by respondent SMC. The lot, the building,
and working facilities are owned by respondent
SMC. The machineries and equipments like washer
machine, oven or cooking machine, sizer machine,
freezer, storage, and chilling tanks, push carts,
hydrolic jack, tables, and chairs were all owned by
respondent SMC. All the boxes, trays, molding pan
used in the processing are also owned by
respondent SMC. The gloves and boots used by the
complainants were also owned by respondent SMC.
Even the mops, electric floor cleaners, brush, hoose,
soaps, floor waxes, chlorine, liquid stain removers,
lysol and the like used by the complainants assigned
as cleaners were all owned and provided by
respondent SMC.
Simply stated, third-party respondent did not own

even a small capital in the form of tools,
machineries, or facilities used in said prawn
processing
And from the job description provided by SMC

itself, the work assigned to private respondents
was directly related to the aquaculture operations
of SMC. Undoubtedly, the nature of the work
performed by private respondents in shrimp
harvesting, receiving and packing formed an
integral part of the shrimp processing operations of
SMC. As for janitorial and messengerial services,
that they are considered directly related to the
principal business of the employerhas been
- 57 -
jurisprudentially recognized.
Furthermore, Sunflower did not carry on an

independent business or undertake the performance
of its service contract according to its own manner
and method, free from the control and supervision
of its principal, SMC, its apparent role having been
merely to recruit persons to work for SMC.
Thus, it is gathered from the evidence adduced by

private respondents before the labor arbiter that
their daily time records were signed by SMC
supervisors Ike Puentebella, Joemel Haro, Joemari
Raca, Erwin Tumonong, Edison Arguello, and
Stephen Palabrica, which fact shows that SMC
exercised the power of control and supervision over
its employees. And control of the premises in which
private respondents worked was by SMC. These
tend to disprove the independence of the
contractor. Private respondents had been working in
the aqua processing plant inside the SMC compound
alongside regular SMC shrimp processing workers
performing identical jobs under the same SMC
supervisors. This circumstance is another indicium of
the existence of a labor-only contractorship.
Meralco Industrial Engineering Facts: Meralco and Ofelia P. Landrito General 1. Yes, Meralco was an indirect
Services v. NLRC Services (OPLGS) executed a Contract Order No. employer.
GR No. 145402 166-84, whereby the latter would supply 2. No, Meralco was not liable for the
March 14, 2008 Mercalco’s janitorial services. payment of separation pay of the
dismissed employees.
On 20 September 1989, however, the aforesaid 49
employees (complainants) lodged a Complaint for
illegal deduction, underpayment, non-payment of Taken together, an indirect employer (as defined
overtime pay, legal holiday pay, premium pay for by Article 107) can only be held solidarily liable
holiday and rest day and night differentials. with the independent contractor or subcontractor (as
provided under Article 109) in the event that the
Thus, on 27 February 1990, complainants amended latter fails to pay the wages of its employees (as
- 58 -
their Complaint to include the charge of illegal described in Article 106).

dismissal and to implead the petitioner as a party
respondent therein. Hence, while it is true that the petitioner was the
indirect employer of the complainants, it cannot be
The Labor Arbiter dismissed the complaint for lack held liable in the same way as the employer in
of merit. every respect.
The NLRC affirmed the decision of the LA with the There is no question that private respondents are
modification that Meralco is solidariy liable to operating as an independent contractor and that
OPLGS in the judgment award on underpayment the complainants were their employees. There was
and on the non-payment of overtime pay. no employer-employee relationship that existed
between the petitioner and the complainants and,
The CA rendered a decision that Meralco is thus, the former could not have dismissed the latter
solidarily liable to OPLGS for the satisfaction of the from employment. Only private respondents, as the
laborer’s separation pay. complainants’ employer, can terminate their
services, and should it be done illegally, be held
Issue/s: 1.Whether Meralco is an indirect employer. liable therefor. The only instance when the principal
2.Whether Meralco is jointly and solidarily liable can also be held liable with the independent
for the payment of the dismissed laborers. contractor or subcontractor for the backwages and
separation pay of the latter’s employees is when
there is proof that the principal conspired with the
independent contractor or subcontractor in the
illegal dismissal of the employees, thus:
The liability arising from an illegal dismissal is unlike

an order to pay the statutory minimum wage,
because the workers’ right to such wage is derived
from law. The proposition that payment of back
wages and separation pay should be covered by
Article 109, which holds an indirect employer
solidarily responsible with his contractor or
subcontractor for "any violation of any provision of
this Code," would have been tenable if there were
proof - there was none in this case - that the
principal/employer had conspired with the
contractor in the acts giving rise to the illegal
dismissal.
- 59 -
It is the established fact of conspiracy that will tie

the principal or indirect employer to the illegal
dismissal of the contractor or subcontractor’s
employees. In the present case, there is no
allegation, much less proof presented, that the
petitioner conspired with private respondents in the
illegal dismissal of the latter’s employees; hence, it
cannot be held liable for the same.
Although petitioner is not liable for complainants’

separation pay, the Court conforms to the consistent
findings in the proceedings below that the petitioner
is solidarily liable with the private respondents for
the judgment awards for underpayment of wages
and non-payment of overtime pay.
[Doctrine]
The concept of indirect employer only relates or
refers to the liability for unpaid wages. Articles 106
and 109 simply mean that the party with whom an
independent contractor deals is solidarily liable with
the latter for unpaid wages, and only to that extent
and for that purpose that the latter is considered a
direct employer.
Manila Electric Company v. Facts: The individual respondents are licensed Yes, ASDAI and AFSISI are not labor-only
Benamira security guards formerly employed by People’s contractors. Given the distinction between “labor
G.R. No. 145271 Security, Inc. (PSI) and deployed as such at only” contract and “job (independent) contracting”
July 14, 2005 MERALCO’s head office. When the security service and the provisions of the security service
agreement between PSI and MERALCO was agreements entered into by petitioner with ASDAI
terminated, they filed a complaint for unpaid and AFSISI, the Court is convinced that ASDAI and
monetary benefits against PSI and MERALCO. AFSISI were engaged in job contracting.
Meanwhile, the security service agreement between The individual respondents cannot be considered as
respondent Armed Security & Detective Agency, Inc., regular employees of the MERALCO for, although
(ASDAI) and MERALCO took effect. In the security services are necessary and desirable to the
agreement, ASDAI was designated as the AGENCY business of MERALCO, it is not directly related to its
while MERALCO was designated as the COMPANY. principal business and may even be considered
- 60 -
Subsequently, the individual respondents were unnecessary in the conduct of MERALCO’s principal
absorbed by ASDAI and retained at MERALCO’s business, which is the distribution of electricity.
head office. Later on, the individual respondents
filed another complaint for unpaid monetary Furthermore, the fact that the individual respondents
benefits, this time against ASDAI and MERALCO. filed their claim for unpaid monetary benefits
against ASDAI is a clear indication that the
On July 25, 1992, the security service agreement individual respondents acknowledge that ASDAI is
between respondent Advance Forces Security & their employer.
Investigation Services, Inc. (AFSISI) and MERALCO
took effect, terminating the previous security service The fact that there is no actual and direct employer-
agreement with ASDAI. The individual respondents employee relationship between MERALCO and the
amended their complaint to implead AFSISI as party individual respondents does not exonerate
respondent. MERALCO from liability as to the monetary claims
of the individual respondents. When MERALCO
MERALCO denied liability on the ground of lack of contracted for security services with ASDAI as the
employer-employee relationship with individual security agency that hired individual respondents to
respondents. It averred that the individual work as guards for it, MERALCO became an indirect
respondents are the employees of the security employer of individual respondents pursuant to
agencies it contracted for security services. Article 107 of the Labor Code.
Issue: Whether or not ASDAI and AFSISI are not [Doctrine]

labor-only contractors since they have their own There is “labor only” contract when the person
equipment, machineries and work premises which acting as contractor is considered merely as an
are necessary in the conduct of their business and agent or intermediary of the principal who is
the duties performed by the security guards are not responsible to the workers in the same manner and
necessary in the conduct of MERALCO’s principal to the same extent as if they had been directly
business. employed by him. On the other hand, “job
(independent) contracting” is present if the following
conditions are met: (a) the contractor carries on an
independent business and undertakes the contract
work on his own account under his own responsibility
according to his own manner and method, free from
the control and direction of his employer or
principal in all matters connected with the
performance of the work except to the result
thereof; and (b) the contractor has substantial
capital or investments in the form of tools,
equipment, machineries, work premises and other
- 61 -
materials which are necessary in the conduct of his

business.
DOLE PHILS. v. ESTEVA Facts: Petitioner is a corporation engaged CAMPCO was a mere labor-only contractor.
GR No. 161115 principally in the production and processing of
November 30, 2006 pineapple for the export market. Respondents are Sec. 9. Labor-only contracting. – (a) Any person who
members of the Cannery Multi-Purpose Cooperative undertakes to supply workers to an employer shall
(CAMPCO). CAMPCO was organized in be deemed to be engaged in labor-only
accordance with Republic Act No. 6938, otherwise contracting where such person:
known as the Cooperative Code of the Philippines.
Pursuant to the Service Contract, CAMPCO members (1) Does not have substantial capital or
rendered services to petitioner. The number of investment in the form of tools, equipment,
CAMPCO members that report for work and the machineries, work premises and other
type of service they performed depended on the materials; and
needs of petitioner at any given time. Although the
Service Contract specifically stated that it shall only
(2) The workers recruited and placed by
be for a period of six months, i.e., from 1 July to 31
such persons are performing activities which
December 1993, the parties had apparently
are directly related to the principal business
extended or renewed the same for the succeeding
or operations of the employer in which
years without executing another written contract. It
workers are habitually employed.
was under these circumstances that respondents
came to work for petitioner. DOLE organized a Task
Force that conducted an investigation into the (b) Labor-only contracting as
alleged labor-only contracting activities of the defined herein is hereby prohibited
cooperatives. The Task Force identified six and the person acting as contractor
cooperatives that were engaged in labor-only shall be considered merely as an
contracting, one of which was CAMPCO. In this case, agent or intermediary of the
respondents alleged that they started working for employer who shall be responsible
petitioner at various times in the years 1993 and to the workers in the same manner
1994, by virtue of the Service Contract executed and extent as if the latter were
between CAMPCO and petitioner. All of the directly employed by him.
respondents had already rendered more than one
year of service to petitioner. While some of the (c) For cases not falling under this
respondents were still working for petitioner, others Article, the Secretary of Labor shall
were put on “stay home status” on varying dates in determine through appropriate
the years 1994, 1995, and 1996 and were no orders whether or not the
longer furnished with work thereafter. Together, contracting out of labor is
respondents filed a Complaint with the NLRC for permissible in the light of the
illegal dismissal, regularization, wage differentials, circumstances of each case and
after considering the operating
- 62 -
damages and attorney’s fees. Petitioner denied that needs of the employer and the
respondents were its employees. It explained that it rights of the workers involved. In
found the need to engage external services to such case, he may prescribe
augment its regular workforce, which was affected conditions and restrictions to insure
by peaks in operation, work backlogs, absenteeism, the protection and welfare of the
and excessive leaves. It used to engage the workers.
services of individual workers for definite periods
specified in their employment contracts and never
First, although petitioner touts the multi-million pesos
exceeding one year. However, such an assets of CAMPCO, it does well to remember that
arrangement became the subject of a labor case, in
such were amassed in the years following its
which petitioner was accused of preventing the establishment. In 1993, when CAMPCO was
regularization of such workers. established and the Service Contract between
petitioner and CAMPCO was entered into,
Issue: Whether or not CAMPCO was a mere labor- CAMPCO only had P6,600.00 paid-up capital,
only contractor. which could hardly be considered substantial. It only
managed to increase its capitalization and assets in
the succeeding years by continually and defiantly
engaging in what had been declared by authorized
DOLE officials as labor-only contracting. Second,
CAMPCO did not carry out an independent business
from petitioner. It was precisely established to
render services to petitioner to augment its
workforce during peak seasons. Petitioner was its
only client. Even as CAMPCO had its own office
and office equipment, these were mainly used for
administrative purposes; the tools, machineries, and
equipment actually used by CAMPCO members
when rendering services to the petitioner belonged
to the latter. Third, petitioner exercised control over
the CAMPCO members, including
respondents. Petitioner attempts to refute control
by alleging the presence of a CAMPCO supervisor
in the work premises. Yet, the mere presence within
the premises of a supervisor from the cooperative
did not necessarily mean that CAMPCO had control
over its members. Section 8(1), Rule VIII, Book III of
the implementing rules of the Labor Code, as
amended, required for permissible job contracting
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that the contractor undertakes the contract work on

his account, under his own responsibility, according
to his own manner and method, free from the control
and direction of his employer or principal in all
matters connected with the performance of the work
except as to the results thereof. As alleged by the
respondents, and unrebutted by petitioner,
CAMPCO members, before working for the
petitioner, had to undergo instructions and pass the
training provided by petitioner’s personnel. It was
petitioner who determined and prepared the work
assignments of the CAMPCO members. CAMPCO
members worked within petitioner’s plantation and
processing plants alongside regular employees
performing identical jobs, a circumstance
recognized as an indicium of a labor-only
contractorship. Fourth, CAMPCO was not engaged
to perform a specific and special job or service. In
the Service Contract of 1993, CAMPCO agreed to
assist petitioner in its daily operations, and perform
odd jobs as may be assigned. CAMPCO complied
with this venture by assigning members to
petitioner. Apart from that, no other particular job,
work or service was required from CAMPCO, and it
is apparent, with such an arrangement, that
CAMPCO merely acted as a recruitment agency for
petitioner. Since the undertaking of CAMPCO did
not involve the performance of a specific job, but
rather the supply of manpower only, CAMPCO
clearly conducted itself as a labor-only contractor.
Lastly, CAMPCO members, including respondents,
performed activities directly related to the principal
business of petitioner. They worked as can
processing attendant, feeder of canned pineapple
and pineapple processing, nata de coco processing
attendant, fruit cocktail processing attendant, and
etc., functions which were, not only directly related,
but were very vital to petitioner’s business of
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production and processing of pineapple products

for export.
The declaration that CAMPCO is indeed engaged in

the prohibited activities of labor-only contracting,
then consequently, an employer-employee
relationship is deemed to exist between petitioner
and respondents, since CAMPCO shall be
considered as a mere agent or intermediary of
petitioner.
Aliviado v. Procter and Gamble Facts: Aliviado, et. al worked as merchandisers of 1. No, P&G was not the employer of Aliviado,
GR No. 160506 P&G from various dates and they all individually et.al.
March 9, 2010 signed employment contracts with either Promm- 2. Promm-Gem and SAPS were legitimate job
Gem or SAPS for periods of more or less five contractors.
months at a time. They were assigned at different
outlets, supermarkets and stores where they handled Rule VIII-A, Book III of the Omnibus Rules
all the products of P&G.They received their wages Implementing the Labor Code, as amended by
from Promm-Gem or SAPS. SAPS and Promm-Gem Department Order No. 18-02, distinguishes
imposed disciplinary measures on erring between legitimate and labor-only contracting:
merchandisers for reasons such as habitual
absenteeism, dishonesty or changing day-off without Section 3. Trilateral Relationship in Contracting
prior notice. Arrangements. In legitimate contracting, there exists
a trilateral relationship under which there is a
Aliviado, et. al filed a complaint against P&G for contract for a specific job, work or service between
regularization, service incentive leave pay and the principal and the contractor or subcontractor,
other benefits with damages.The complaint was and a contract of employment between the
later amended to include the matter of their contractor or subcontractor and its workers. Hence,
subsequent dismissal. there are three parties involved in these
arrangements, the principal which decides to farm
The Labor Arbiter dismissed the complaint for lack out a job or service to a contractor or subcontractor,
of merit. the contractor or subcontractor which has the
capacity to independently undertake the
The NLRC and CA affirmed the ruling of the LA. performance of the job, work or service, and the
contractual workers engaged by the contractor or
subcontractor to accomplish the job[,] work or
Issue/s: service.
1.Whether P&G is the employer of Aliviado, et.al.
2. Whether Promm-Gem and SAPS are labor-only
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contractors or legitimate job contractors. Section 5. Prohibition against labor-only

declared prohibited. For this purpose, labor-only
contracting shall refer to an arrangement where the
contractor or subcontractor merely recruits, supplies
or places workers to perform a job, work or service
for a principal, and any of the following elements
are present:
i) The contractor or subcontractor does not have

substantial capital or investment which relates to the
job, work or service to be performed and the
employees recruited, supplied or placed by such
contractor or subcontractor are performing activities
which are directly related to the main business of
the principal; or
ii) [T]he contractor does not exercise the right to

control over the performance of the work of the
contractual employee.
Clearly, the law and its implementing rules allow

contracting arrangements for the performance of
specific jobs, works or services. Indeed, it is
management prerogative to farm out any of its
activities, regardless of whether such activity is
peripheral or core in nature. However, in order for
such outsourcing to be valid, it must be made to
an independent contractor because the current labor
rules expressly prohibit labor-only contracting.
In the instant case, the financial statements of

Promm-Gem show that it has authorized capital
stock of ₱1 million and a paid-in capital, or capital
available for operations, of ₱500,000.00 as of
1990.It also has long term assets worth
₱432,895.28 and current assets of ₱719,042.32.
Promm-Gem has also proven that it maintained its
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own warehouse and office space with a floor area

of 870 square meters. It also had under its name
three registered vehicles which were used for its
promotional/merchandising business. Promm-Gem
also has other clients aside from P&G. Under the
circumstances, we find that Promm-Gem has
substantial investment which relates to the work to
be performed. These factors negate the existence
of the element specified in Section 5(i) of DOLE
Department Order No. 18-02.
The records also show that Promm-Gem supplied its

complainant-workers with the relevant materials,
such as markers, tapes, liners and cutters, necessary
for them to perform their work. Promm-Gem also
issued uniforms to them. It is also relevant to mention
that Promm-Gem already considered the
complainants working under it as its regular, not
merely contractual or project, employees. This
circumstance negates the existence of element (ii) as
stated in Section 5 of DOLE Department Order No.
18-02, which speaks of contractual employees. This,
furthermore, negates – on the part of Promm-Gem –
bad faith and intent to circumvent labor laws which
factors have often been tipping points that lead the
Court to strike down the employment practice or
agreement concerned as contrary to public policy,
morals, good customs or public order.
Under the circumstances, Promm-Gem cannot be

considered as a labor-only contractor. We find that
it is a legitimate independent contractor.
[Doctrine]
Where ‘labor-only’ contracting exists, the Labor

Code itself establishes an employer-employee
relationship between the employer and the
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employees of the ‘labor-only’ contractor." The

statute establishes this relationship for a
comprehensive purpose: to prevent a circumvention
of labor laws. The contractor is considered merely
an agent of the principal employer and the latter is
responsible to the employees of the labor-only
contractor as if such employees had been directly
employed by the principal employer.
Temic Automotive v. Temic Facts: The union members are regular rank-and-file Yes, the outsourcing/forwarding agreements are
Automotive Employees Union employees working in different sections of the valid. The Court’s examination of the agreement
G.R. No. 186965 warehouse department as clerks, material handlers, shows that the forwarding arrangement complies
December 23, 2009 system encoders and general clerks. By practice, the with the requirements of Article 106 of the Labor
petitioner contracts out some of the work in its Code and its implementing rules. The forwarding
warehouse department, specifically those in the arrangement has been in place since 1998 and no
receiving and finished goods sections, to three evidence has been presented showing that any
independent service providers or forwarders, regular employee has been dismissed or displaced
namely: Diversified, Airfreight and KNI. These by the forwarders’ employees since then. No
forwarders also have their own employees who hold evidence likewise stands before the Court showing
the positions of clerk, material handler, system that the outsourcing has resulted in a reduction of
encoder and general clerk. The regular employees work hours or the splitting of the bargaining unit –
of the petitioner and those of the forwarders share effects that under the implementing rules of Article
the same work area and use the same equipment, 106 of the Labor Code can make a contracting
tools and computers all belonging to the petitioner. arrangement illegal. The other requirements of
Article 106, on the other hand, are simply not
This outsourcing arrangement gave rise to a union material to the present petition. Thus, on the whole,
grievance on the issue of the scope and coverage of the Court sees no evidence or argument effectively
the collective bargaining unit, specifically to the showing that the outsourcing of the forwarding
question of “whether or not the functions of the activities violate labor laws, regulations, and the
forwarders’ employees are functions being parties’ CBA, specifically that it interfered with,
performed by the regular rank-and-file employees restrained or coerced employees in the exercise of
covered by the bargaining unit.” The petitioner their rights to self-organization as provided in
maintained that the services rendered by the Section 6, par. (f) of the implementing rules.
forwarders’ employees are not the same as the
functions undertaken by regular rank-and-file Moreover, the Court notes that the forwarding
employees covered by the bargaining unit agreements were already in place when the current
CBA was signed in 2005. In this sense, the union
Issue: Whether or not the outsourcing/forwarding accepted the forwarding arrangement, albeit
agreements are valid. implicitly, when it signed the CBA with the company.
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Thereby, the union agreed, again implicitly by its

silence and acceptance, that jobs related to the
contracted forwarding activities are not regular
company activities and are not to be undertaken by
regular employees falling within the scope of the
bargaining unit but by the forwarders’ employees.
Thus, the skills requirements and job content
between forwarders’ jobs and bargaining unit jobs
may be the same, and they may even work on the
same company products, but their work for different
purposes and for different entities completely
distinguish and separate forwarder and company
employees from one another.
SMART COMMUNICATIONS v. Facts: Regina M. Astorga was employed by Artoga’s dismissal was legal and valid. Yes.
ASTORGA respondent SMART as District Sales Manager of the Astorga was terminated due to redundancy, which is
GR No. 148132 Corporate Sales Marketing Group/ Fixed Services one of the authorized causes for the dismissal of an
January 28, 2008 Division (CSMG/FSD). She was receiving a monthly employee. Redundancy in an employer’s personnel
salary of P33,650.00. As District Sales Manager, force necessarily or even ordinarily refers to
Astorga enjoyed additional benefits, namely, annual duplication of work. The characterization of an
performance incentive equivalent to 30% of her employee’s services as superfluous or no longer
annual gross salary, a group life and hospitalization necessary and, therefore, properly terminable, is an
insurance coverage, and a car plan. In February exercise of business judgment on the part of the
1998, SMART entered into a joint venture employer. An employer is not precluded from
agreement with NTT of Japan, and formed SMART- adopting a new policy conducive to a more
NTT Multimedia, Incorporated (SNMI). Since SNMI economical and effective management even if it is
was formed to do the sales and marketing work, not experiencing economic reverses. Neither does
SMART abolished the CSMG/FSD, Astorga’s the law require that the employer should suffer
division. SNMI agreed to absorb the CSMG financial losses before he can terminate the services
personnel who would be recommended by SMART, of the employee on the ground of redundancy. But
Astorga landed last in the performance evaluation, while tilting the scales of justice in favor of workers,
thus, she was not recommended by SMART. SMART, the fundamental law also guarantees the right of
nonetheless, offered her a supervisory position in the the employer to reasonable returns for his
Customer Care Department, but she refused the investment.
offer because the position carried lower salary rank
and rate. In this light, we must acknowledge the prerogative
of the employer to adopt such measures as will
Despite the abolition of the CSMG/FSD, Astorga promote greater efficiency, reduce overhead costs
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continued reporting for work. SMART issued a and enhance prospects of economic gains, albeit
memorandum advising Astorga of the termination of always within the framework of existing laws.
her employment on ground of redundancy, effective However, SMART failed to comply with the
April 3, 1998. Astorga received it on March 16, mandated one (1) month notice prior to termination.
1998. The record is clear that Astorga received the notice
of termination only on March 16, 1998 or less than
Astorga then file a Complaint for illegal dismissal, a month prior to its effectively on April 3, 1998.
non-payment of salaries and other benefits with Likewise, the Department of Labor and Employment
prayer for moral and exemplary damages. She was notified of the redundancy program only on
also claimed that abolishing CSMG and terminating March 6, 1998. Article 283 of the Labor Code
her employment was illegal for it violated her right clearly provides Closure of establishment and
to security of tenure. SMART responded that there reduction of personnel.
was valid termination. It argued that Astorga was
dismissed by reason of redundancy, which is an
authorized cause for termination of employment, Note: Sorry, not sure if there is really a labor-only
and the dismissal was effected in accordance with contracting, independent contractors and DO’s
the requirements of the Labor Code. The under the syllabus in this case. The Court only
redundancy of Astorga’s position was the result of ruled on the issue of redundancy and illegal
the abolition of CSMG and the creation of a dismissal  Kindly check the full text.
specialized and more technically equipped SNMI,
which is a valid and legitimate exercise of
management prerogative. LA rendered its decision [The Arbiter also ruled that contracting out the
that the dismissal of Astorga was illegal and unjust functions performed by Astorga to an in-house
and SMART is hereby ordered to reinstate Astorga agency like SNMI was illegal, citing Section 7(e),
to her former position without loss of seniority rights Rule VIII-A of the Rules Implementing the Labor
and other privileges with full backwages inclusive of Code.]
allowances and other benefits from the time of her
dismissal to the date of reinstatement
Issue: Whether or not dismissal of Regina Astorga is

legal and valid.
Coca-Cola Bottlers v. Agito Facts: Agito, et al. are salesmen assigned at the 1. No, Intensive was not a legitimate job
GR No. 179546 Lagro Sales Office of Coca-Cola for a number of contractor but a labor-only contractor.
February 13, 2009 years but were not regularized. Their employment 2. Yes, there was an employer-employer
was terminated without just cause and due process. exists between Coca-Cola and Agito,
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They filed complaints against Coca-Cola, Interserve, et.al.

Peerless Integrated Services, Inc. Better Builders, A legitimate job contract, wherein an employer
Inc., and Excellent Partners, Inc. enters into a contract with a job contractor for the
performance of the formers work, is permitted by
Coca-Cola averred that Agito, et al. were law. Thus, the employer-employee relationship
employees of Interserve who were tasked to between the job contractor and his employees is
perform contracted services in accordance with the maintained. In legitimate job contracting, the law
provision of the Contract of Services. creates an employer-employee relationship
between the employer and the contractors
To prove that Interserve is an independent employees only for a limited purpose, i.e., to ensure
contractor, Coca-Cola presented the following: (1) that the employees are paid their wages. The
AOI of Interserve; (2) Certificate of Registration of employer becomes jointly and severally liable with
Interserve with BIR; (3) ITR with Audited Financial the job contractor only for the payment of the
Statements of Interserve for 2001; and (4) employees wages whenever the contractor fails to
Certificate of Registration of Interserve as an pay the same. Other than that, the employer is not
independent contractor issued by DOLE. responsible for any claim made by the contractors
employees.
As a result, Coca-Cola asserted that Agito, et al.
were employees of Interserve since it was the latter On the other hand, labor-only contracting is an
which hired them, paid their wages and supervised arrangement wherein the contractor merely acts as
their work. an agent in recruiting and supplying the principal
employer with workers for the purpose of
The LA ruled that Intensive is a legitimate job circumventing labor law provisions setting down the
contractor. rights of employees. It is not condoned by law. A
finding by the appropriate authorities that a
The NLRC affirmed the ruling of the LA. contractor is a labor-only contractor establishes an
employer-employee relationship between the
The CA reversed the NLRC decision and ruled that principal employer and the contractors employees
Intensive is a labor-only contractor. and the former becomes solidarily liable for all the
rightful claims of the employees.
Issue/s: 1.Whether Intensive is a legitimate job
contractor. Section 7 of the same implementing rules, describes
2. Whether there is an employer-employer exists the consequences thereof:
between Coca-Cola and Agito, et.al.
Section 7. Existence of an employer-employee
relationship. The contractor or subcontractor shall be
considered the employer of the contractual
employee for purposes of enforcing the provisions
- 71 -
of the Labor Code and other social legislation. The

principal, however, shall be solidarily liable with the
contractor in the event of any violation of any
provision of the Labor Code, including the failure to
pay wages.
The principal shall be deemed the employer of the

contractual employee in any of the following case,
as declared by a competent authority:
a. where there is labor-only contracting; or

b. where the contracting arrangement falls within
the prohibitions provided in Section 6 (Prohibitions)
hereof.
According to the foregoing provision, labor-only

contracting would give rise to: (1) the creation of an
principal and the employees of the contractor or
sub-contractor; and (2) the solidary liability of the
principal and the contractor to the employees in the
event of any violation of the Labor Code.
The law clearly establishes an employer-employee

relationship between the principal employer and
the contractors employee upon a finding that the
contractor is engaged in labor-only
contracting. Article 106 of the Labor Code
categorically states: There is labor-only contracting
where the person supplying workers to an employee
does not have substantial capital or investment in
the form of tools, equipment, machineries, work
premises, among others, and the workers recruited
and placed by such persons are performing
activities which are directly related to the principal
business of such employer. Thus, performing
activities directly related to the principal business of
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the employer is only one of the two indicators that

labor-only contracting exists; the other is lack of
substantial capital or investment. The Court finds
that both indicators exist in the case at bar.
Manila Water v. Dalumpines Facts: Manila Water engaged the services FCCSI is a labor-only contractor. FCCSI does not
G.R. No. 175501 individual respondents without written contract for have substantial capital or investment to qualify as
October 4, 2010 one month. Thereafter, individual respondents an independent contractor. FCCSI has no sufficient
signed a 3-month contract to perform collection investment in the form of tools, equipment and
services on commission basis. Before the expiration machinery to undertake contract services for Manila
of the contract of services, the bill collectors formedWater involving a fleet of around 100 collectors
a corporation duly registered with the SEC as the assigned to several branches and covering the
"Association Collector’s Group, Inc." (ACGI). ACGI service area of Manila Water customers spread out
was one of the entities engaged by Manila Water in several cities/towns of the East Zone. The only
for its courier service. rational conclusion is that it is Manila Water that
provides most if not all the logistics and equipment
Later on, Manila Water entered into a service including service vehicles in the performance of the
agreement with respondent First Classic Courier contracted service
Services, Inc. (FCCSI) also for its courier needs.
FCCSI gave a deadline for the bill collectors who
were members of ACGI to submit applications and [Doctrine]
letters of intent to transfer to FCCSI. The individual “Contracting” or “subcontracting” refers to an
respondents in this case were among the bill arrangement whereby a principal agrees to put out
collectors who joined FCCSI and were hired. or farm out with a contractor or subcontractor the
performance or completion of a specific job, work,
On various dates, individual respondents were or service within a definite or predetermined
terminated from employment. Manila Water no period, regardless of whether such job, work, or
longer renewed its contract with FCCSI because it service is to be performed or completed within or
decided to implement a “collectorless” scheme outside the premises of the principal.
whereby Manila Water customers would instead
remit payments through “Bayad Centers.” The Contracting and subcontracting arrangements are
aggrieved bill collectors individually filed expressly allowed by law but are subject to
complaints for illegal dismissal and unfair labor regulation for the promotion of employment and the
practice, among others, against petitioner Manila observance of the rights of workers to just and
Water and respondent FCCSI. humane conditions of work, security of tenure, self-
organization, and collective bargaining. In
Respondent bill collectors averred that when Manila legitimate contracting, the trilateral relationship
Water issued their individual contracts of service for between the parties in these arrangements involves
- 73 -
three months, there was already an attempt to make the principal which decides to farm out a job or
it appear that respondent bill collectors were not its service to a contractor or subcontractor, which has
employees but independent contractors. Respondent the capacity to independently undertake the
bill collectors stressed that they could not qualify as performance of the job, work, or service, and the
independent contractors because they did not have contractual workers engaged by the contractor or
an independent business of their own, tools, subcontractor to accomplish the job, work, or
equipment, and capitalization, but were purely service.
dependent on the wages they earned from Manila
Water, which was termed as “commission.” Job contracting is permissible only if the following
Moreover, respondent bill collectors insisted that conditions are met: 1) the contractor carries on an
they remained employees of Manila Water even independent business and undertakes the contract
after the entry of FCCSI. The latter did not qualifywork on his own account under his own responsibility
as a legitimate labor contractor since it had no according to his own manner and method, free from
substantial capital. the control and direction of his employer or
principal in all matters connected with the
On the other hand, respondent FCCSI claimed that it performance of the work except as to the results
is an independent contractor engaged in the thereof; and 2) the contractor has substantial
business of providing messengerial or courier capital or investment in the form of tools, equipment,
services machineries, work premises, and other materials
which are necessary in the conduct of the business.
Issue: Whether FCCSI is a labor-only contractor or
an independent contractor. On the other hand, the Labor Code expressly
prohibits “labor-only” contracting. Article 106 of the
Code provides that there is labor-only contracting
where the person supplying workers to an employer
does not have substantial capital or investment in
the form of tools, equipment, machineries, work
premises, among others, and the workers recruited
and placed by such person are performing activities
which are directly related to the principal business
of the employer. In such cases, the person or
intermediary shall be considered merely as an
agent of the employer who shall be responsible to
the workers in the same manner and to the same
extent as if the latter were directly employed by
him.
Department Order No. 18-02, Series of 2002,
- 74 -
enunciates that labor-only contracting refers to an

arrangement where the contractor or subcontractor
merely recruits, supplies, or places workers to
perform a job, work, or service for a principal, and
any of the following elements are present: (i) the
contractor or subcontractor does not have
job, work, or service to be performed and the
employees recruited, supplied, or placed by such
the principal; or (ii) the contractor does not exercise
the right to control the performance of the work of
the contractual employee.
“Substantial capital or investment” refers to capital

stocks and subscribed capitalization in the case of
corporations, tools, equipment, implements,
machineries, and work premises, actually and
directly used by the contractor or subcontractor in
the performance or completion of the job, work, or
service contracted out. The “right to control” refers
to the right reserved to the person for whom the
services of the contractual workers are performed,
to determine not only the end to be achieved, but
also the manner and means to be used in reaching
that end.
BABAS v. LORENZA SHIPPING Facts: Lorenzo Shipping Corp. (LSC) is a domestic BMSI is engaged in labor-only contracting. The
GR No. 186091 corporation engaged in the shipping industry; it Court ruled that a person is considered engaged in
December 15, 2010 owns several equipment necessary for its business. legitimate job contracting or subcontracting if the
LSC entered into a General Equipment Maintenance following conditions concur: (a) The contractor
Repair and Management Services Agreement carries on a distinct and independent business and
(Agreement) with Best Manpower Services, Inc. undertakes the contract work on his account under
(BMSI). Under the Agreement, BMSI undertook to his own responsibility according to his own manner
provide maintenance and repair services to LSC’s and method, free from the control and direction of
container vans, heavy equipment, trailer chassis, and his employer or principal in all matters connected
generator sets. BMSI further undertook to provide with the performance of his work except as to the
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checkers to inspect all containers received for results thereof; (b) The contractor has substantial
loading to and/or unloading from its vessels. capital or investment; and (c) The agreement
Simultaneous with the execution of the Agreement, between the principal and the contractor or
LSC leased its equipment, tools, and tractors to subcontractor assures the contractual employees'
BMSI. The period of lease was coterminous with the entitlement to all labor and occupational safety and
Agreement. BMSI then hired petitioners on various health standards, free exercise of the right to self-
dates to work at LSC as checkers, welders, utility organization, security of tenure, and social welfare
men, clerks, forklift operators, motor pool and benefits.
machine shop workers, technicians, etc. Six years
later, LSC entered into another contract with BMSI,Given the above standards, The Court sustained the
this time, a service contract. Petitioners filed with the
petitioners’ contention that BMSI is engaged in
Labor Arbiter (LA) a complaint for regularization labor-only contracting. First, petitioners worked at
against LSC and BMSI. LSC terminated the LSC’s premises, and nowhere else. Other than the
Agreement, effective October 31,
provisions of the Agreement, there was no showing
2003. Consequently, petitioners lost their that it was BMSI which established petitioners’
employment. BMI said it is an independent working procedure and methods, which supervised
contractor. It averred that it was willing to petitioners in their work, or which evaluated the
regularize petitioners; however, some of them same. There was absolute lack of evidence that
lacked the requisite qualifications for the job. BMSI
BMSI exercised control over them or their work,
was willing to reassign petitioners who were willing
except for the fact that petitioners were hired by
to accept reassignment. LSC averred that petitioners
BMSI. Second, LSC was unable to present proof that
were employees of BMSI and were assigned to LSC BMSI had substantial capital. The record before us
by virtue of the Agreement. BMSI is an independent is bereft of any proof pertaining to the contractor’s
job contractor with substantial capital or investment
capitalization, nor to its investment in tools,
in the form of tools, equipment, and machinery equipment, or implements actually used in the
necessary in the conduct of its business. Petitioners
performance or completion of the job, work, or
argued that they were engaged in labor-only service that it was contracted to render. What is
contracting. clear was that the equipment used by BMSI were
owned by, and merely rented from, LSC. Third,
Issue:Whether or not BMSI is engaged in labor-only petitioners performed activities which were directly
contracting. related to the main business of LSC. The work of
petitioners as checkers, welders, utility men, drivers,
and mechanics could only be characterized as part
of, or at least clearly related to, and in the pursuit
of, LSC’s business. Logically, when petitioners were
assigned by BMSI to LSC, BMSI acted merely as a
labor-only contractor. Lastly, as found by the NLRC,
BMSI had no other client except for LSC, and
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neither BMSI nor LSC refuted this finding, thereby

bolstering the NLRC finding that BMSI is a labor-
only contractor.
Teng v. Pahagac Facts: Albert Teng is engaged in the business of 1. Yes, Teng was engaged in a labor-only
GR No. 169740 deep sea fishing, and he employs master fishermen contract.
November 17, 2010 to facilitate his fishing venture. These master 2. Yes, there was an employer-employer
fishermen hire Pahagac, et.al as checkers of the exists between Coca-Cola and Agito,
volume of the fish caught in every voyage. et.al.
The element of control – which we have ruled in a
Pahagac, et.al filed a complaint of illegal number of cases to be a strong indicator of the
dismissalthey averred that there was no employment existence of an employer-employee relationship – is
contract, and sometime around Sept. 2002, Teng present in this case. Teng not only owned the tools
doubted the amounts that they were telling him and equipment, he directed how the respondent
regarding how much fish were caught. By workers were to perform their job as checkers; they,
December, Teng told them their services were in fact, acted as Teng’s eyes and ears in every
terminated. fishing expedition.
The VA ruled in favor of Teng that there was no Teng cannot hide behind his argument that the
employer-employee relationship existed between respondent workers were hired by the maestros. To
Teng and Pahagac, et.al. consider the respondent workers as employees of
the maestros would mean that Teng committed
The CA reversed and setaside the VA decision and impermissible labor-only contracting. As a policy,
ruled that there was an existing employer-employee the Labor Code prohibits labor-only contracting:
relationship between Teng and Pahagac, et.al.
ART. 106. Contractor or Subcontractor – x x x The
Secretary of Labor and Employment may, by
Issue/s: 1.Whether Teng was engaged in a labor- appropriate regulations, restrict or prohibit the
only contract. contracting-out of labor.
2. Whether there is an employer-employer exists
between Teng and Pahagac, et.al.
There is "labor-only" contracting where the
person supplying workers to an employer does
not have substantial capital or investment in the
form of tools, equipment, machineries, work
premises, among others, and the workers
recruited and placed by such persons are
performing activities which are directly related to
the principal business of such employer. In such
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cases, the person or intermediary shall be

considered merely as an agent of the employer who
shall be responsible to the workers in the same
manner and extent as if the latter were directly
employed by him.
Section 5 of the DO No. 18-02, which implements

Article 106 of the Labor Code, provides:
Section 5. Prohibition against labor-only contracting.

– Labor-only contracting is hereby declared
prohibited. For this purpose, labor-only contracting
shall refer to an arrangement where the contractor
or subcontractor merely recruits, supplies or places
workers to perform a job, work or service for a
principal, and any of the following elements are
present:
(i) The contractor or subcontractor does not have

job, work or service to be performed and the
employees recruited, supplied or placed by such
the principal; or
(ii) The contractor does not exercise the right to

control over the performance of the work of the
contractual employee.
In the present case, the maestros did not have any

substantial capital or investment. Teng admitted that
he solely provided the capital and equipment, while
the maestros supplied the workers. The power of
control over the respondent workers was lodged not
with the maestros but with Teng. As checkers, the
respondent workers’ main tasks were to count and
classify the fish caught and report them to Teng.
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They performed tasks that were necessary and

desirable in Teng’s fishing business. Taken together,
these incidents confirm the existence of a labor-only
contracting which is prohibited in our jurisdiction, as
it is considered to be the employer’s attempt to
evade obligations afforded by law to employees.
Accordingly, we hold that employer-employee ties

exist between Teng and the respondent workers. A
finding that the maestros are labor-only contractors
is equivalent to a finding that an employer-
employee relationship exists between Teng and the
respondent workers. As regular employees, the
respondent workers are entitled to all the benefits
and rights appurtenant to regular employment.
CEPALCO v. CEPALCO Facts: Petitioners CEPALCO and CESCO entered CESCCO is a labor-only contractor. Petitioners
Employees Labor Union into a Contract for Meter Reading Work where failed to show that CESCO has substantial capital or
G.R. No. 211015 CESCO undertook to perform CEPALCO's meter- investment which relates to the job, work or service
June 20, 2016 reading activities. As a result, several employees to be performed. There is no available document to
and union members of CEPALCO were relieved, show CESCO's authorized capital stock at the time
assigned in floating positions, and replaced with of the contracting out of CEPALCO's meter-reading
CESCO workers, prompting respondent to file a activities to CESCO on February 19, 2007. As it is,
complaint for unfair labor practices against the increases in its authorized capital stock and
petitioners. paid-up capital were only made after November
26, 2008. Since the amount of CESCO's authorized
Respondent alleged that when CEPALCO engaged capital stock at the time CEPALCO contracted out its
CESCO to perform its meter-reading activities, its meter-reading activities was not shown, the Court
intention was to evade its responsibilities under the has no means of determining whether it had
CBA and labor laws, and that it would ultimately substantial capital at the time the contract therefor
result in the dissipation of respondent's membership was entered into. Furthermore, the list of CESCO's
in CEPALCO. It averred that for engaging in labor- office equipment, furniture and fixtures, and
only contracting, the workers placed by CESCO must vehicles offered in evidence by petitioners does not
be deemed regular rank-and-file employees of satisfy the requirement that they could have been
CEPALCO, and that the Contract for Meter Reading used in the performance of the specific work
Work be declared null and void. contracted out, i.e., meter-reading service. As the
CA aptly pointed out the tools and equipment
In defense, petitioners averred that CESCO is an utilized by CESCO in the meter-reading activities
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independent job contractor and that the contracting are owned by CEPALCO, emphasizing the fact that
out of the meter-reading services did not interfere CESCO has no basic equipment to carry out the
with CEPALCO's regular workers' right to self- service contracted out by CEPALCO.
organize, denying that none of respondent's
members was put on floating status. More significantly, records are devoid of evidence
to prove that the work undertaken in furtherance of
the meter-reading contract was made under the
Issue: Whether CESCCO is a labor-only contractor sole control and supervision of CESCO. Instead, as
or an independent job contractor. noted[81] by the CA, it was CEPALCO that
established the working procedure and methods
and supervised CESCO's workers in their tasks.
[Doctrine]
Under Article 106 of the Labor Code, as amended,
labor-only contracting is an arrangement where the
contractor, who does not have substantial capital or
investment in the form of tools, equipment,
machineries, work premises, among others, supplies
workers to an employer and the workers recruited
are performing activities which are directly related
to the principal business of such employer. Section 5
of the “Rules Implementing Articles 106 to 109 of
the Labor Code, As Amended” (D.O. 18-02),
provides the following criteria to gauge whether or
not an arrangement constitutes labor-only
contracting:
Section 5. Prohibition against labor-only
declared prohibited. For this purpose, labor-
only contracting shall refer to an arrangement
where the contractor or subcontractor merely
recruits, supplies or places workers to perform
a job, work or service for a principal, and any
of the following elements are present:
(i) the contractor or subcontractor does
not have substantial capital or
investment which relates to the job,
work or service to be performed and
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the employees recruited, supplied or

placed by such contractor or
subcontractor are performing activities
which are directly related to the main
business of the principal; or
(ii) he contractor does not exercise the
right to control over the performance
of the work of the contractual
employee.
“Substantial capital or investment” refers to capital

stocks and subscribed capitalization in the case of
corporations, tools, equipment, implements,
machineries and work premises, actually and
directly used by the contractor or subcontractor in
the performance or completion of the job, work or
service contracted out.
The “right to control” shall refer to the right

reserved to the person for whom the services of the
contractual workers are performed, to determine
not only the end to be achieved, but also the
manner and means to be used in reaching that end.
DE CASTRO v. CA Facts: Nuvoland, a corporation formed primarily "to Silvericon was a mere labor-only contractor.
GR No. 204261 own, use, improve, develop, subdivide, sell, Basically, a legitimate job contractor complies with
October 5, 2016 exchange, lease and hold for investment or the requirements on sufficient capitalization and
otherwise, real estate of all kinds, including equipment to undertake the needs of its client.
buildings, houses, apartments and other structures.” Although this is not the sole determining factor of
Respondent Ramon Bienvenida (Bienvenida) was the legitimate contracting, independent contractors are
principal stockholder and member of the Board of likewise required to register with the DOLE.
Directors while Raul Martinez (Martinez) was its
President. Silvericon, on the other hand, was First. D.O. 18-02 expressly provides for a
registered with the SEC. Martinez recruited registration requirement. Remarkably, the
petitioner De Castro, a sales and marketing respondents do not deny the apparent non-
professional in the field of real estate, to handle its compliance with the rules governing independent
sales and marketing operations, including the hiring contractors.This failure on the part of Silvericon
and supervision of the sales and marketing reinforces the Court's view that it was engaged in
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personnel. To formalize this undertaking, De Castro labor-only contracting. Nuvoland did not even
was made to sign a Memorandum of bother to make Silvericon comply with this vital
Agreement (MOA), denominated as Shareholders requirement had it really entered into a legitimate
Agreement, wherein Martinez proposed to create a contracting arrangement with a truly independent
new corporation. The supposedly new corporation outfit. The efforts which the two corporations have
contemplated was Silvericon. De Castro was put into the drafting of the SMA belie mere
appointed the President and majority stockholder of inadvertence and heedlessness on this matter.
Silvericon while Bienvenida and Martinez were
named as stockholders and incorporators thereof. In Second. D.O. No. 18-A, series of 2011, defines
the same MOA, Martinez was designated as substantial capital as the paid-up capital
Chairman of the new corporation to whom De stocks/shares of at least P3,000,000.00 in the case
Castro, as President and Chief Operating Officer, of corporations, partnerships and cooperatives. This
would directly report. De Castro and his team of amount was set with speciflty to avoid the
sales personnel were responsible for the sale of subterfuge resorted to by entities with the intention
100% of the projects owned and developed by to circumvent the law. As things now stand, even the
Nuvoland. subscribed capital of Silvericon was a far cry from
the amount set by the rules. It is important to note
In a Letter signed by Bienvenida, Nuvoland that at the time Nuvoland engaged the services of
terminated the SMA on the ground that Silvericon Silvericon, the latter's authorized stock capital was
personnel committed an unauthorized walkout and P4,000,000.00, out of which only P1,000,000.00
abandonment of the Nuvo City Showroom for two was subscribed.
(2) days. After that De Castro and all the sales and
marketing personnel of Silvericon were barred from In Vinoya v. National Labor Relations Commission,
entering the office premises. the Court tackled the insufficiency of paid-in
capitalization taking into account the "current
De Castro and Platon filed a complaint for illegal economic atmosphere in the country." In other words,
dismissal before the LA, demanding the payment the determination of sufficient capital stock for
and other benefits. Nuvoland and its directors and independent contractors must be assessed in a
officers denied a direct contractual relationship with broad and extensive manner with consideration of
De Castro and Platon. Silvericon admitted that it the industry involved. In this case, the sufficiency of
had employed De Castro as President and COO. a subscribed capital of P1,000,000.00 for
independent contracting must be assessed taking
LA handed down his decision in favor of De Castro into consideration the extent of the undertaking
and Platon. It concluded that Silvericon was a mere relative to the nature of the industry in which
labor-only contractor and, therefore, a mere agent Nuvoland was engaged. Nuvoland was one of the
of Nuvoland. Nuvoland, Bienvenida and Martinez prominent corporations in the real estate industry. It
appealed before the NLRC, arguing Silvericon was is safe to assume then that the marketing of its
not a labor-only contractor. NLRC reversed the LA condominium projects would entail a substantially
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decision, finding that Silvericon was an independent high amount in what was typically a capital
contractor, thus, the direct employer of De Castro intensive industry. The undertaking covered not just
and Platon. CA affirmed the NLRC. one but two considerably huge condominium
projects located in prime spots in the metropolis.
Issue:Whether or not Silverion was engaged in
labor-only contracting or independent contracting. For the sale and marketing of two condominium
buildings, it would require massive funds for
promotions, advertisements, shows, salaries, and
operating expenses of its more or less 40 personnel.
In light of this vast business undertaking, it is obvious
that the P1 million subscribed capital of Silvericon
would hardly suffice to satisfy this huge
engagement. Nuvoland was apparently aware of
this that it had to fund the marketing expenses of
the project in an amount not exceeding P30 million
per building. This was even provided in paragraph
6 of the SMA. This being the case, the paid-in
capitalization of Silvericon amounting to P1
million was woefully inadequate to be
considered as substantial capital. Thus, Silvericon
could not qualify as an independent contractor.
Third. Silvericon had no substantial equipment in the

form of tools, equipment, machinery, and work
premises. Records reveal that Nuvoland itself
designed and constructed the model units used in the
sales and marketing of its condominium units. This
indisputably proves that at the time of its
engagement, Silvericon had no such investment
necessary for the conduct of its business.
Fourth. Although it is true that the respondents had

explicitly assailed the authenticity of the MOA
attached with the petition, their faint denial fails to
explain the exclusivity which had characterized the
relationship between Nuvoland and Silvericon. If
Silvericon was an independent contractor, it is only
but logical that it should have also offered its
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services to the public.
Fifth. The respondents do not deny that Nuvoland

and Silvericon shared the same officers and
employees: respondents Bienvenida and Martinez
were stockholders and incorporators thereof while
De Castro was the President and majority
stockholder of Silvericon. At the same time,
Bienvenida was a principal stockholder and member
of the Board of Directors of Nuvoland while
Martinez was Nuvoland's President. Admittedly, this
fact alone does not give rise to an inference that
Nuvoland and Silvericon are one and the same. It
effectively sows doubt, however, when taken
together with the other indicators of labor-only
contracting, as previously discussed.
If Nuvoland and Silvericon were indeed separate

entities, out of all other Nuvoland officers, why did
Bienvenida, as an incorporator of both corporations,
choose to authorize the purported termination of the
SMA without at least calling for an investigation of
the incident? As a stockholder of Silvericon, he
possessed an interest in the said corporation.
Curiously though, Nuvoland's decision to part with
Silvericon as expressed in Bienvenida's letter was
reached without consultation or, at the least, a
preliminary notice. Had there really been a breach
of contract, Nuvoland would have demanded an
explanation from Silvericon before barring the
personnel's entry in their work premises to think that
the latter was engaged in an important aspect of its
business.Further, with Nuvoland having advanced a
huge amount of money for Silvericon, it could have
at least exercised caution before terminating the
SMA with a meager request for an accounting of
funds. A closer scrutiny of the events that transpired
would show that the termination of the SMA was
- 84 -
one and the same with the termination of all

Silvericon personnel. This conclusion proceeded from
the irrefutable fact that Silvericon was actually a
creation of Nuvoland.
Diamond Farms v. SPFL-Workers Facts: DFI owns an 800-hectare banana plantation Yes, DFI and DARBMUPCO were labor-only
Solidarity ("original plantation") in Alejal, Carmen, Davao. contractors. This case involves job contracting, a
GR No. 173254-55 & 173263 Pursuant to Republic Act No. 6657 or the labor arrangement expressly allowed by law.
January 13, 2016 Comprehensive Agrarian Reform Law of 1988 Contracting or subcontracting is an arrangement
("CARL"), commercial farms shall be subject to whereby a principal (or employer) agrees to put
compulsory acquisition and distribution, thus the out or farm out with a contractor or subcontractor
original plantation was covered by the law. the performance or completion of a specific job,
work or service within a definite or predetermined
The awarded plantation was turned over to period, regardless of whether such job, work or
qualified agrarian reform beneficiaries ("ARBs") service is to be performed or completed within or
under the CARL. These ARBs are the same farmers outside the premises of the principal. It involves a
who were working in the original plantation. They trilateral relationship among the principal or
subsequently organized themselves into a multi- employer, the contractor or subcontractor, and the
purpose cooperative named "DARBMUPCO," which workers engaged by the contractor or
is one of the respondents in this case. subcontractor.
DARBMUPCO entered into a Banana Production and Based on the conditions for permissible job
Purchase Agreement ("BPPA") with DFI. Under the contracting, we rule that respondent-contractors
BPPA, DARBMUPCO and its members as owners of are labor-only contractors.
the awarded plantation, agreed to grow and
cultivate only high grade quality exportable There is no evidence showing that respondent-
bananas to be sold exclusively to DPI. The BPPA is contractors are independent contractors. The
effective for 10 years.18 respondent-contractors, DFI, and DARBMUPCO did
not offer any proof that respondent-contractors
Hampered by lack of manpower to undertake the were not engaged in labor-only contracting.
agricultural operation under the BPPA, DFI engaged
the services of the respondent-contractors, who in Before the LA, respondent-contractors categorically
turn recruited the respondent-workers to assist stated that they are "labor-only" contractors who
DARBMUPCO in meeting its production obligations have been engaged by DFI and
under the BPPA, DARBMUPCO.80 They admitted that they do not
have substantial capital or investment in the form of
Southern Philippines Federation of Labor ("SPFL")— tools, equipment, machineries, work premises and
a legitimate labor organization with a local chapter other materials, and they recruited workers to
- 85 -
in the awarded plantation filed a petition for perform activities directly related to the principal
certification election in the Office of the Med- operations of their employer.
Arbiter on behalf of some 400 workers (the
respondent-workers in this petition) "jointly A finding that a contractor is a labor-only contractor
employed by DFI and DARBMUPCO" working in the is equivalent to a declaration that there is an
awarded plantation. employer-employee relationship between the
principal, and the workers of the labor-only
In another case, SPFL, together with more than 300 contractor; the labor-only contractor is deemed only
workers, filed a case for underpayment of wages, as the agent of the principal. Thus, in this case,
nonpayment of 13th month pay and service respondent-contractors are the labor-only
incentive leave pay and attorney's fees against DFI, contractors and either DFI or DARBMUPCO is their
DARBMUPCO and the respondent-contractors principal.
before the National Labor Relations Commission
("NLRC").
[Doctrine]
DARBMUPCO and DFI denied that they are the
employers of the respondent-workers. They claimed, A contractor is a labor-only contractor is equivalent
instead, that the respondent-workers are the to a declaration that there is an employer-
employees of the respondent-contractors. employee relationship between the principal, and
the workers of the labor-only contractor; the labor-
Issue: Whether DFI and DARBMUPCO were labor- only contractor is deemed only as the agent of the
only contractors. principal.
Quintanar v. Coca-Cola Bottlers Facts: Petitioners allege that they are former Interserve is a labor-only contractor. In this case,
G.R. No. 210565 employees directly hired by respondent Coca-Cola the appellate court considered the evidence of
June 28, 2016 on different dates assigned as regular Route Interserve that it was registered with the DOLE as
Helpers under the direct supervision of the Route independent contractor and that it had a total
Sales Supervisors. After working for quite some time
capitalization of P27,509,716.32 and machineries
as directly-hired employees of Coca-Cola, and equipment worth P12,538859.55. However,
petitioners were allegedly transferred successively
the possession of substantial capital is only one
as agency workers to the following manpower element. Labor-only contracting exists when any of
agencies, namely, Lipercon Services, Inc., People's
the two elements is present. Thus, even if the Court
Services, Inc., ROMAC, and the latest being would indulge Coca-Cola and admit that Interserve
respondent Interserve Management and Manpower had more than sufficient capital or investment in the
Resources, Inc. form of tools, equipment, machineries, work
premises, still, it cannot be denied that the
Further, petitioners alleged that when the DOLE petitioners were performing activities which were
conducted an inspection of Coca-Cola to determine directly related to the principal business of such
- 86 -
whether it is complying with the various mandated employer. Also, it has been ruled that no absolute
labor standards, they were declared to be regular figure is set for what is considered ‘substantial
employees of Coca-Cola. In support of their capital’ because the same is measured against the
argument that they were regular employees of type of work which the contractor is obligated to
Coca-Cola, the complainants relied on the perform for the principal.
pronouncement of the Supreme Court in the case of
CCBPI v. NOWM. More importantly, even if Interserve were to be
considered as a legitimate job contractor, Coca-
The petitioners insist that ISI, Lipercon, PSI, ROMAC, Cola failed to rebut the allegation that petitioners
and Interserve are labor-only contractors, making were transferred from being its employees to
Coca-Cola still liable for their claims. The latter, on become the employees of ISI, Lipercon, PSI, and
the other hand, asserts that the said agencies are ROMAC, which were labor-only contractors. Well-
independent job contractors and, thus, liable to the settled is the rule that "[t]he contractor, not the
petitioners on their own. employee, has the burden of proof that it has the
substantial capital, investment, and tool to engage
Issue: Whether Interserve is a labor-only contractor in job contracting. In this case, the said burden of
or a legitimate independent contractor. proof lies with Coca-Cola although it was not the
contractor itself, but it was the one invoking the
supposed status of these entities as independent job
contractors.
[Doctrine]
As to the supposed substantial capital and
investment required of an independent job
contractor, the Court stated that it “does not set an
absolute figure for what it considers substantial
capital for an independent job contractor, but it
measures the same against the type of work which
the contractor is obligated to perform for the
principal.” The Court reiterated that the contractor,
not the employee, had the burden of proof that it
has the substantial capital, investment and tool to
engage in job contracting.
- 87 -
CLASSES OF EMPLOYEES
Probationary Employees
Labor Code: Article 293, 295-296; Omnibus Rules, Book VI, Secs. 5-6

ABBOTT LABORATORIES v. Facts: YES, clearly conveyed to Alcaraz her duties and
ALCARAZ Abbott Laboratories, Philippines (“Abbott”) caused responsibilities as Regulatory Affiairs Manager
GR No. 192571 the publication in a major broadsheet newspaper of prior to, during the time of her engagement, and
July 23, 2013 its need for a Medical and Regulatory Affairs the incipient stages of her employment. Alcaraz
Manager who would: (a) be responsible for drug was well-apprised of her employer’s expectations
safety surveillance operations, staffing, and budget; that would, in turn, determine her regularization –
(b) lead the development and implementation of that it would depend on her ability and capacity to
standard operating procedures/policies for drug fulfilll the requirements of her position as Regulatory
safety surveillance and vigilance; and (c) act as the Affairs Manager and that her failure to perform
primary interface with internal and external such would give Abbott a valid cause to terminate
customers regarding safety operations and queries. her probationary employment.
Pearlie Alcaraz (“Alcaraz”) later on signed an In fine, the Court rules that Alcaraz’ status as a
employment contract with Abbott which stated that probationary employee and her consequent
she will be placed on probation for a period of 6 dismissal must stand. Cons
months. She underwent a pre-employment
orientation where she was briefed on her duties and [Doctrine]
responsibilities. She also received emails explaining The adequate performance of one’s duties is, by
Abbott’s organizational chart and the job and of itself, an inherent and implied standard for
description of her work. She was also informed of a probationary employee to be regularized; such is
the procedure in evaluating the performance of its a regularization standard which need not be
probationary employees. literally spelled out or mapped into technical
indicators in every case.
Alcaraz’ method of management was considered by
her immediate supervisor to be “too strict”. In a It must be observed that the assessment of
meeting with the former HR director, Alcaraz also adequate duty performance is in the nature of a
accidentally saw a printed copy of an email sent by management prerogative which when reasonably
her immediate supervisor to some staff members exercised should be respected. This is especially
which essentially contained queries regarding her true of a managerial employee who was tasked
- 88 -
job performance. Alcaraz asked if this was the with the vital responsibility of handling the
normal process of evaluation which was answered in personnel and important matters of her department.
the negative.
Later on, she was called to a meeting wherein her

immediate supervisor and former HR director
informed her that she failed to meet the
regularization standards for the position. Thereafter,
she was asked to tender her resignation or else they
will be forced to terminate her services. She later on
found out that it was already announced to
everyone that she resigned due to health reasons.
Issue:
Whether Alcaraz was sufficiently informed of the
reasonable standards to qualify her as a regular
employee.
ABBOTT LABORATORIES v. Facts/Issue: The argument is untenable.

ALCARAZ For resolution here is the Motion for Reconsideration
GR No. 192571 of Alcaraz of the Court’s decision dated July 23, First, it is not the probationary employee’s job
April 22, 2014 2013. description but the adequate performance of his
(Resolution) duties and responsibilities which constitutes the
Alcaraz posits that, contrary to the Court’s decision, inherent and implied standard for regularization. If
one’s job description cannot by and of itself be a probationary employee had been fully apprised
treated as a standard for regularization as a by his employer of these duties and responsibilities,
standard denotes a measure of quantity or quality. the nasi knowledge and common-sense dictate that
By way of example, Alcaraz cites the case of a he must be adequately perform the same, else he
probationary salesperson and asks how does such fails to pass the probationary trial and may
employee achieve regular status if he does not therefore be subject to termination.
know how much he needs to sell to reach the same.
Second, the determination of “adequate
performance” is not, in all cases, measurable by
quantitative specification. It is also hinged on the
qualitative assessment of the employee’s work; by
its nature, this largely rests on the reasonable
exercise of the employer’s management
prerogative. The communication of performance
- 89 -
standard should be perceived within the context

and nature of the probationary employee’s duties
and responsibilities.
Third, the same logic applies to probationary

managerial employee who is tasked to supervise a
particular department. Given that a managerial
role essentially connotes an exercise of discretion,
the quality of effective management can only be
determined through subsequent assessment. While
at the time of engagement, reason dictates that the
employer can only inform the probationary
managerial employee of his duties and
responsibilities as such and provide the allowable
parameters for the same.
Fourth, the performance standard contemplated by

law should not, in all cases, be contained in a
specialized system of feedbacks or evaluation. The
Court takes judicial notice of the fact that not all
employers have a sophisticated form of human
resource management, so much so that the adoption
of technical indicators as utilized through “comment
cards” or “appraisal” tools should not be treated as
a prerequisite for every case of probationary
engagement.
And fifth, Alcaraz cannot take refuge in Aliling v.

Feliciano since the same is not squarely applicable
to the case at bar. Alcaraz was terminated because
she (a) did not manage her time effectively; (b)
failed to gain the trust of her staff and to build an
effective rapport with them; (c) failed to train her
staff effectively; and (d) was not able to obtain the
knowledge and ability to make sound judgments on
case processing and article review which were
necessary for the proper performance of her duties.
- 90 -
Regular Employees
Labor Code: Article 293, 295-296; Omnibus Rules, Book VI, Secs. 5-6

KIMBERLY CLARK PHILS. v. Facts:
SECRETARY The Collective Bargaining Agreement (“CBA”) NO, the reckoning date for determining
GR No. 156668 between Kimberly-Clark (Phils.) Inc. (“Kimberly”) regularization is the hiring date from which the
November 23, 2007 and United Kimberly-Clark Employees Union- one-year period should be counted. Owing to their
Philippine Transport and General Workers’ length of service with the company, these workers
Organization (“UKCEO-PTGWO”) expired. Within became regular employees by operation of law,
the freedom period, KILUSAN-OLALIA, a newly- one year after they were employed by Kimberly.
formed labor organization, challenged the While actual regularization entails the mechanical
incumbency of UKCEO-PTGWO. act of issuing regular appointment papers and
compliance with such other operating procedures as
The Ministry of Labor and Employment (“MOLE”) may be adopted by the employer, it is more in
issued an order, among others that casual workers keeping with the intent and spirit of the law to rule
not performing janitorial and yard maintenance that the status of regular employment attaches to the
services had attained regular status. UKCEO- casual worker on the day immediately after the end
PTGWO was also declared as the exclusive of his first year of service. To rule otherwise, and to
bargaining representative of Kimberly’s instead make their regularization dependent on the
employees, having garnered the highest number happening of some contingency or the fulfillment of
of votes in the certification election. KILUSAN- certain requirements, is to impose a burden on the
OLALIA then filed a petition for certiorari assailing employee which is not sanctioned by law.
the MOLE’s order.
[Doctrine]
During the pendency of the petition for certiorari,
The law provides for two (2) kinds of regular
Kimberly dismissed from service several employees, namely: (1) those who are engaged to
employees and refused to heed the workers’ perform activities which are usually necessary or
grievances, impelling KILUSAN-OLALIA to stage a desirable in the usual business or trade of the
strike. employer; and (2) those who have rendered at least
one year of service, whether continuous or broken,
The Court ordered Kimberly to pay the workers with respect to the activity in which they are
who have been regularized their differential pay employed.
with respect to minimum wage, COLA, 13th month
pay and benefits provided for under the
applicable CBA from the time they became
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regular employees. Kimberly argued that such

decision only pertained to casuals who had
rendered one (1) year of service as of the filing
date of KILUSAN-OLALIA’s petition for certification
election and that those employees who were
dismissed due to illegal strike should not be
awarded regularization differentials.
Issue:
Whether the reckoning point in determining who
among Kimberly’s casual employees are entitled
to regularization should be the date KILUSAN-
OLALIA filed a petition for certification election to
challenge the incumbency of UKCEO-PTGWO.
ROWELL INDUSTRIAL Facts: YES, Taripe is a regular employee because he was

CORPORATION v. CA Joel Taripe (“Taripe”) filed a Complaint against engaged to perform activities which are usually
GR No. 167714 Rowell Industrial Corp. (“RIC”) for regularization necessary or desirable in the usual business or
March 7, 2017 and payment of holiday pay, as well as indemnity trade of the employer and, thus, was illegally
for severed finger—and later amended it to dismissed. RIC’s contention that the four (4) months
include illegal dismissal when he was summarily length of service of Taripe did not grant him a
dismissed while the case for regularization was still regular status is inconsequential, considering that
pending. Taripe alleges that he was employed by length of service assumes importance only when the
RIC starting November 8, 1999 as a power press activity in which the employee has been engaged to
machine operator, such position of which was perform is not necessary and desirable to the usual
occupied by RIC’s regular employees and the business or trade of the employer.
functions of which are necessary to RIC’s business
(manufacturing of tin cans for use in consumer Article 280 (now Art. 295) of the Labor Code
products). classifies employees into three categories, namely:
(1) regular employees, (2) project employees, and
On the other hand, RIC claims that Taripe was a (3) casual employees. Regular employees are
contractual employee whose services were further classified into: (a) regular employees by
required due to the increase in the demand for nature of work; and (b) regular employees by years
packaging requirement of its clients for Christmas of service.
season and to build up stock levels during the
early part of the following year, and that Taripe’s The aforesaid provision of law does not proscribe or
employment contract expired, hence, his discharge prohibit an employment contract for a fixed period.
from service. It does not necessarily follow that where the duties
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of the employee consist of activities usually

Taripe signed a contract of employment prior to necessary or desirable in the usual business of the
his admission in RIC which provides, among other employer, the parties are forbidden from agreeing
things, that “my employment shall be contractual for on a period of time for the performance of such
the period of five (5) months which means that the activities.
end of the said period, I can be discharged unless
this contract is renewed by mutual consent or Fixed-term employment is not forbidden as long as
terminated for cause.” (1) the period of employment was knowingly and
voluntarily agreed upon by the parties, and (2) it
Labor Arbiter ruled that Taripe was a contractual satisfactorily appears that the employer and
employee whose contract has expired while the employee dealt with each other on more or less
NLRC declared that his employment was already equal terms with no moral dominance exercised by
attained regular status, hence, his dismissal was the employer on the employee. In this case, what
illegal. The CA, in a petition for certiorari case, was only stipulated in Taripe’s employment contract
affirmed the NLRC decision with modifications. was that it was for a contractual period of five (5)
months. Further, RIC did not present any evidence
RIC argues that the CA narrowly interpreted which may prove that Taripe was employed for a
Article 280 (now Art. 295) of the Labor Code, as fixed or specific project or that his services were
amended, and disregarded the contract validly seasonal in nature. Furthermore, the contract signed
entered into by the parties. RIC claims that there as a condition for his hiring is a contract of adhesion.
are certain forms of employment which entail the
performance of usual and desirable functions and Therefore, for failure of RIC to comply with the
which exceed one year but do not necessarily necessary guideline for a valid fixed term
qualify as regular employment under Art. 280 employment contract, it can be safely stated that the
(now Art. 295) of the Labor Code. These supposed contract signed by Taripe for a period of 5 months
two exceptions are if the employment is for a was a mere subterfuge to deny the latter a regular
fixed term and if the services to be performed are status of employment. Taripe was a regular
seasonal. employee of RIC by the nature of work he
performed in the company.
Issue:
Whether Taripe was a regular employee and was [Doctrine]
illegally dismissed. Settled is the rule that the primary standard of
determining regular employment is the reasonable
connection between the particular activity performed
by the employee in relation to the causal business or
trade of the employer. The connection can be
determined by considering the nature of the work
performed and its relation to the scheme of the
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particular business or trade in its entirety.
PLDT v. ARCEO Facts:

GR No. 1499851 In May 1990, Rosalina Arceo (“Arceo”) applied (1) YES, Arceo is qualified to be a regular
for the position of telephone operator with employee because her work, consisting
May 5, 2006 mainly of photocopying documents, sorting
Philippine Long Distance Company, Inc. (“PLDT”),
however, she failed her pre-employment out telephone bills and disconnection notices,
qualifying examination. Arceo requested PLDT to was certainly “necessary and desirable” to the
allow her to work even without pay to which PLDT business of PLDT. But even if the contrary were
agreed. She was assigned to perform various true, the uncontested fact is that she rendered
tasks like photocopying documents, sorting out service for more than one year as a casual
telephone bills and notices of disconnection, and employee. Hence, she is still eligible to become
other minor assignments and activities. After two a regular employee.
(2) weeks, PLDT decided to pay her minimum
wage. PLDT’s argument that Arceo’s position has been
abolished, if indeed true, does not preclude
On February 1991, PLDT saw no further need for Arceo’s becoming a regular employee. The
Arceo’s services and decided to fire her but order to reinstate her also included the
section supervisor recommended her for an on-the- alternative to reinstate her to “a position
job training on minor traffic work. Subsequently, equivalent thereto.” Further, PLDT failed to show
she took the pre-qualifying exams for the position that the activity undertaken by Arceo has been
of telephone operator two more times but again discontinued. Thus, PLDT, can still “regularize”
failed in both attempts. her in an equivalent position.
On October 1991, PLDT discharged her from (2) NOT NECESSARILY because the position of
employment. Arceo filed for an illegal dismissal telephone operator was never considered in
case wherein she won and PLDT was ordered to any of the assailed decisions of the LA, the
reinstate her to her “former position or to an NRLC or the CA. It is understood that she will be
equivalent position.” As such, On June 1993, she regularized in the position held prior to the filing
was reinstated as a casual employee and was of her complaint with the LA, or, if that position
assigned to photocopy documents and sort out was already abolished, to an equivalent
telephone bills. position.
On September 1996 or more than three (3) years (3) Arceo should be entitled to all the benefits of a
after her reinstatement, Arceo filed a complaint regular employee from the day of her actual
for unfair labor practice and alleged that since reinstatement (June 9, 1993). This is so because
her reinstatement, she had yet to be regularized she has already worked in PLDT for more than
and had yet to receive the benefits due to a one year at the time she was reinstated.
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regular employee. [Doctrine]

A regular employee is (1) one who is either
The Labor Arbiter, the NLRC and the CA all ruled engaged to perform activities that are necessary or
in favor of Arceo holding that she has already desirable in the usual trade or business of the
become a regular employee by operation of law. employer, or (2) a casual employee who has
rendered at least one year of service, whether
PLDT argues that while Article 280 (now Art. 295) continuous or broken, with respect to the activity in
of the Labor Code “regularizes” a casual which he is employed.
employee who has rendered at least one year of
service, whether continuous or broken, the provisio
is subject to the condition that the employment
subsists or the position still exists. Even if Arceo had
rendered more than one year of service as a
causal employee, PLDT insisted that this fact alone
would not automatically make her a regular
employee since her position had long been
abolished. PLDT also argues that it would be an
even greater error if Arceo were to be
“regularized” as a telephone operator since she
repeatedly failed her qualifying exams for that
position.
Issues:
(1) Whether Arceo is eligible to become a
regular employee.
(2) Whether Arceo should be regularized as a
telephone operator despite repeatedly failing
her qualifying exams for the position.
(3) From what date will Arceo be entitled to the
benefits of a regular employee?
ABS-CBN BROADCASTING CORP. Facts: YES, respondents are regular employees and not
v. NAZARENO Respondents were employed by ABS-CBN project employees. The Court reject, as barren of
GR No. 164156 Broadcasting Corporation (“ABS-CBN”) as factual basis, ABS-CBN’s contention that respondents
September 26, 2006 production assistants (“PAs”) on different dates. are considered as its talents, hence, not regular
They were given a monthly compensation, issued employees of the broadcasting company. ABS-CBN’s
ID cards and were required to work for a minimum claim that the functions performed by the
of 8 hours a day, including Sundays and holidays. respondents are not at all necessary, desirable or
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even vital to its trade or business is bellied by the

Later, a CBA was executed between ABS-CBN evidence on record.
and the ABS-CBN Rank-and-File Employees
however, since ABS-CBN refused to recognize Pas Not considered as regular employees are “project
as part of the bargaining unit, respondents were employees,” the completion or termination of which is
not included in the CBA. As such, they later on filed more or less determinable at the time of
a Complaint for recognition of regular employment, such as those employed in connection
employment status and other money claims. with a particular construction project, and “seasonal
employees” whose employment by its nature is only
ABS-CBN posits that respondents were considered desirable for a limited period of time. Even then, any
in the industry as “program employees” in that, as employee who has rendered at least 1 year of service,
distinguished from regular or station employees, whether continuous or intermittent, is deemed regular
they are basically engaged by the station for a with respect to the activity performed and while such
particular or specific program broadcasted by the activity performed and while such activity actually
radio station. exists.
Issue: It is of no moment that ABS-CBN hired respondents

Whether respondent PAs are regular employees as “talent.” Respondents cannot be considered
of ABS-CBN. “talents” because they are not actors or actresses or
radio specialists or mere clerks or utility employees.
They are thus, regular employees who perform
several different duties under the control and
direction of ABS-CBN executives and supervisors.
Further, it is undisputed that respondents had
continuously performed the same activities for an
average of 5 years. Their assigned tasks are
necessary or desirable in the usual trade or business
of ABS-CBN. The persisting need for their services is
sufficient evidence of the necessity and
indispensability of such services. Also, the
presumption is that when the work done is an
integral part of the regular business of the employer
and when the worker, relative to the employer, does
not furnish an independent business or professional
service, such work is a regular employment of such
employee and not an independent contractor.
[Doctrine]
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Where a person has rendered at least one year of

service, regardless of the nature of the activity
performed, or where the work is continuous or
intermittent, the employment is considered regular as
long as the activity exists, the reason being that
customary appointment is not indispensable before
one may be formally declared as having attained
regular status.
For project employment, the principal test is whether

or not the project employees were assigned to carry
out a specific project or undertaking, the duration
and scope of which were specified at the time the
employees were engaged for that project.
FULACHE v. ABS-CBN Facts: YES, the petitioners are regular employees and as
GR No. 183810 Petitioners were drivers, cameramen, editors, PA, such fall within the coverage of the bargaining
January 21, 2010 Teleprompter Operator-Editing, and VTR man of unit and are therefore entitled to CBA benefits as a
ABS-CBN Broadcasting Corporation (“ABS-CBN”). matter of law and contract. The Labor Arbiter’s
They filed complaints for regularization, unfair decision was affirmed all the way up to the CA level
labor practice and several money claims against and all ruled against ABS-CBN’s submission that the
ABS-CBN. petitioners are independent contractors. The CBA
provided for the composition of the bargaining unit
Petitioners alleged that they only became aware and under these terms, the petitioners are members
of the CBA between ABS-CBN and the ABS-CBN of the appropriate bargaining unit because they are
Rank-and-File Employees Union when they rank-and-file employees and do not belong to any
obtained copies of the agreement and learned of the excluded categories. Thus, as regular rank-
that they had been excluded from its coverage as and-file employees, they fall within the CBA
ABS-CBN considered them temporary and not coverage under the CBA’s express terms and are
regular employees. They claimed that they had entitled to such benefits.
already rendered more than a year of service in
the company and, therefore, should have been The LA, NLRC ad CA all held that the petitioners
recognized as regular employees. were regular employees of ABS-CBN, not
independent contractors. There is also employer-
ABS-CBN alleged that the petitioners’ services employee relationship between them as the
were contracted on various dates by its Cebu company exercised control over the petitioners in
station as independent contractors/off camera their performance of their work; and that the
talents, and thus, they were not entitled to petitioners were engaged to perform activities
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regularization in these capacities. ABS-CBN further usually necessary or desirable in ABS-CBN’s trade or
explained that the nature of the petitioners’ business.
employment within the framework of its
operations. ABS-CBN claimed that the production The petitioners who were claiming regular
of programs per se is not necessary or desirable employment status were also unceremoniously
in its business because it could generate profits by deprived of their employment son after their regular
selling airtime to block-timers or through status was recognized.
advertising. ABS-CBN also pointed out that talents
are paid a pre-arranged consideration called [Doctrine]
“talent fee” taken from the budget of a particular
program and subject to a 10% withholding tax. Employer-Employee relationship exists when the
Talents also do not undergo probation and that employer exercises control over the employee’s
their services are engaged for a specific program performance of his work.
or production, or a segment thereof. Their
contracts are terminated once the program, Performance of activities usually necessary or
production or segment is completed. desirable in the employer’s trade or business also
entitles them to a regular employment status.
While appeal of the regularization case was
pending, ABS-CBN dismissed the drivers for
refusing to sign up contracts of employment with a
service contractor.
Issue:
Whether the petitioners are regular employees,
and as such are members of the bargaining unit
entitled to the CBA benefits.
FUJI TELEVISION NETWORK, INC. Facts:

v. ESPIRITU In 2005, Arlene Espiritu (“Espiritu”) was engagedYES, Espiritu was a regular employee with a
GR No. 204944-45 fixed-term contract. Fuji’s argument that Arlene was
by Fuji Television Network, Inc. (“Fuji”) as a news
December 3, 2014 correspondent/producer tasked to an independent contractor under a fixed-term
report
Philippine news to Fuji through its Manila Bureaucontract is contradictory because employees under
fixed-term contracts cannot be independent
field office. Espiritu’s employment contract initially
contractors because in fixed term contracts, an
provided for a term of 1 year but was successfully
renewed on a yearly basis with salary adjustment employer-employee relationship exists. The test in
upon every renewal. this kind of contract is not the necessity grid
desirability of the employee’s activities, “but the day
In 2009, she was diagnosed with lung cancer. She certain agreed upon by the parties for the
commencement and termination of the employment
- 98 -
informed Fuji about her condition and in turn, she relationship.”

was informed that the company will have a
problem renewing her contract since it would be Espiritu’s contract indicating a fixed term did not
difficult for her to perform her job. She insisted automatically mean that she could never be a
that she was still fit to work as certified by her regular employee. This is precisely what Article 280
attending physician. Nevertheless, she was asked (now Article 295) seeks to avoid. Where an
to sign a non-renewal contract wherein she will no employee’s contract had been continuously extended
longer be renewed upon expiration of her or renewed to the same position, with the same
contract and it also provided that the parties duties and remained in employ without any
release each other from liabilities and interruption then such employee is a regular
responsibilities under the employment contract. employee. The continuous renewal is a scheme to
Espiritu affixed her signature with the initials “U.P.” prevent regularization. Further, such successive
for “under protest.” Immediately after, Espiritu renewals of Espiritu’s contract indicated the necessity
filed a complaint for illegal dismissal and and desirability of her work in the usual course of
attorney’s fees. Fuji’s business. Because of this, Espiritu had become a
The LA held that Espiritu was not Fuji’s employee regular employee with the right to security to tenure.
but an independent contractor. The NLRC then
reversed the LA’s decision ruling that Espiritu was a [Doctrine]
regular employee with respect to the activities for The test for determining regular employment is
which she was employed since she continuously whether there is a reasonable connection between
rendered services that were deemed necessary the employee’s activities and the usual business of
and desirable to Fuji’s business. The CA affirmed the employer. Article 280 (now Art. 295) provides
the NLRC’s decision with modification that Fuji that the nature of work must be necessary or
immediately reinstate Espiritu to her position as desirable in the usual business or trade of the
News Producer without loss of seniority rights. The employer as the test for determining regular
CA held that the successive renewals of her fixed- employment.
term contract resulted in regular employment.
However, there may be a situation where an
Fuji points out that Espiritu was hired as a stringer, employee’s work is necessary but is not always
and it informed her that she would remain one. desirable in the usual course of business of the
She was hired as an independent contractor and employer. In this situation, there is no regular
Fuji had no control over her work. Fuji insisted that employment.
they dealt on equal terms when they negotiated
and entered into employment contracts. They
further insist that there was no illegal dismissal
because she freely agreed not to renew her
fixed-term contract as evidenced by email
correspondence. In fact, the signing of non-
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renewal contract was not necessary to terminate

her employment since such employment terminated
upon expiration of her contract.
Issue:
Whether Espiritu was a regular employee, not an
independent contractor, considering that she was
hired on fixed terms subject to renewals.
PIER 8 ARRASTRE & Facts: YES, Bolcot is a regular employee because (1) he
STEVEDORING SERVICES v. Jeff Boclot (“Boclot”) was hired as a reliever by has performed tasks that are usually necessary
BOCLOT Pier 8 Arrastre and Stevedoring Services, Inc. and desirable to PASSI’s business, and (2) as per
GR No. 173849 (“PASSI”) to perform the functions of a stevedore the provisons of the CBA, he should be considered
September 28, 2007 starting September 20, 1999. For 36 months, he as a regular employee after 6 months of
was able to render a total of 228.5 days of accumulated service from the original date of
service. On May 2003, Boclot filed a Complaint hiring. Bolcot’s situation is akin to that of a seasonal
claiming for regularization and contended that he or project or term employee, albeit on a daily basis.
became a regular employee by April 2000, since Although he cannot be considered as a regular
it was his sixth continuous month in service in employee by the provisions of the Labor Code
PASSI’s regular course of business. He argued that alone, the provision in the CBA qualifies him as a
on the basis of Articles 280 and 281 (now Art. regular employee when it required for only 6 months
295 & 296) of the Labor Code, he should be of accumulated employment and not 1 year.
deemed a regular employee having rendered at
least one year of service with the company. Further, as a reliever, Bolcot does not fall under the
definitions of a regular, project or seasonal
Bolcot also relied on the provision of the employee, thus, he is deemed as a casual employee.
company’s existing CBA wherein it was stated that The same provision, however, provides that a causal
the Company agrees to convert to regular status employee can be considered as a regular employee
all incumbent probationary or casual employees if said employee has rendered at least 1 year of
and workers who have served for an accumulated service regardless of the fact that such service may
service term of employment of not less than 6 be continuous or broken. The IRR of the Labor Code
months from his original date of hiring. clarifies that term “at least 1 year of service” to mean
service within 12 months, whether continuous or
PASSI, on the other hand, alleged that Bolcot was broken, reckoned from the date the employee
hired as a mere “reliever” stevedore and could started working. Bolcot who has performed only for
thus not become a regular employee. an accumulated period of 228.5 days does not fall
under the classification of a causal turned regular
The Labor Arbiter concluded that Bolcot was employee. However, applying the provision of the
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“nothing more than an extra worker who is called CBA, Bolcot must be accorded the status of a regular
upon to work at the pier in the absence of regular employee.
stevedores at a certain shift.” The LA also ruled
that Articles 280 & 281 (now Arts. 295 & 296) [Doctrines]
were inapplicable because as a reliver, Bolcot is • Both the Constitution and the Labor Code
neither a probationary employee or a casual mandate the protection of labor. Hence, as a
employee. matter of judicial policy, this Court leaned
backwards to protect labor and the working
The NLRC ruled that Bolcot is a regular employee class against the machinations and incursions of
and predicated its findings on the reasonable their more financially entrenched employers.
connection between the activity performed by the However, while protecting the rights of the
employee in relation to the usual business or trade employees, the law authorized neither the
of the employer. oppression nor the destruction of the employer.
The CA affirmed the NLRC decision and ruled that • A regular employee is (1) one who is either
what determines regularity or casualness is not the engaged to perform activities that are
employment contract, written or otherwise, but the necessary and desirable in the usual trade or
nature of the job. Further, even assuming that business of the employer except for project or
Bolcot was able to render services for only 228.5 seasonal employees; or (2) a casual employee
days in a period of 36 months, the fact remains who has rendered at least one year of service,
that his services were continuously utilized by whether continuous or broken, with respect to the
PASSI in their business. Where the job is usually activity in which he is employed.
necessary or desirable to the main business of the
employer, then the employment is regular. • The primary standard in determining a regular
Whether one’s employment is regular is not employment is the reasonable connection
determined by the number of the hours of works, between the particular activity performed by
but by the nature and by the length of time one the employee in relation to the usual business or
has been in that particular job. trade of the employer. Also, if the employee has
been performing the job for at least 1 year,
Issue: even if the performance is not continuous or
Whether Bolcot has attained regular status as merely intermittent, the law deems the repeated
PASSI employee considering that he was hired as and continuing need for its performance as
a reliever. sufficient evidence of necessity, if not
indispensability, of that activity to the business.
The Peninsula Manila v. Alipio Facts: Article 280 of the Labor Code provides:
GR No. 167310 Petitioner, The Peninsula Manila, is a corporation
June 17, 2008 engaged in the hotel business. ART. 280. Regular and Casual Employment. - The
- 101 -
provisions of written agreement to the contrary

The hotel operates a clinic 24 hours a day and notwithstanding and regardless of the oral
employs three regular nurses who work eight hours agreement of the parties, an employment shall be
each day on three separate shifts. The hotel also deemed to be regular where the employee has
engages the services of reliever nurses who been engaged to perform activities which are
substitute for the regular nurses who are either usually necessary or desirable in the usual business
off-duty or absent. or trade of the employer, except where the
employment has been fixed for a specific project or
Respondent Alipio was hired merely as a reliever undertaking the completion or termination of which
nurse. However, she had been performing the has been determined at the time of the engagement
usual tasks and functions of a regular nurse since of the employee or where the work or services to be
the start of her employment. Hence, after about performed is seasonal in nature and the employment
four years of employment in the hotel, she inquired is for the duration of the season.
why she was not receiving her 13th month pay.
An employment shall be deemed to be casual if it is
On December 18, 1998, Alipio was informed by a not covered by the preceding paragraph: Provided,
fellow nurse that she can only report for work That, any employee who has rendered at least one
after meeting up with petitioner Santos. When year of service, whether such service is continuous or
Alipio met with Santos, Alipio was asked broken, shall be considered a regular employee with
regarding her payslip vouchers. She told Santos respect to the activity in which he is employed and
that she made copies of her payslip vouchers his employment shall continue while such activity
because Peninsula does not give her copies of the exists. (Emphasis supplied.)
same. Santos was peeved with Alipio's response
because the latter was allegedly not entitled toThus, an employment is deemed regular when the
get copies of her payslip vouchers. Santos likewise
activities performed by the employee are usually
directed Alipio not to report for work anymore. necessary or desirable in the usual business of the
employer. However, any employee who has
Aggrieved, Alipio filed a complaint for illegal rendered at least one year of service, even though
dismissal against the petitioners. intermittent, is deemed regular with respect to the
activity performed and while such activity actually
Issue: exists.
1. WON respondent is a regular employee
– Yes In this case, records show that Alipio's services were
2. WON the requisites for a valid dismissal engaged by the hotel intermittently from 1993 up to
was complied with - No 1998. Her services as a reliever nurse were
undoubtedly necessary and desirable in the hotel's
business of providing comfortable accommodation to
its guests. In any case, since she had rendered more
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than one year of intermittent service as a reliever

nurse at the hotel, she had become a regular
employee as early as 1994. Lastly, per the hotel's
own Certification dated in 1997, she was already a
"regular staff nurse" until her dismissal.
Being a regular employee, Alipio enjoys security of

tenure. Her services may be terminated only upon
compliance with the substantive and procedural
requisites for a valid dismissal: (1) the dismissal must
be for any of the causes provided in Article 28212
of the Labor Code; and (2) the employee must be
given an opportunity to be heard and to defend
himself.
When Santos had a meeting with Alipio on, she was

not informed that the hotel was contemplating her
dismissal. Neither was she informed of the ground
for which her dismissal was sought. She was simply
told right there and then that she was already
dismissed, thereby affording no opportunity for her
to be heard and defend herself. Thus, Alipio was
likewise deprived of procedural due process.
Clearly, Alipio was illegally dismissed because
petitioners failed on both counts to comply with the
twin requisites for a valid termination. She is thus
entitled to reinstatement without loss of seniority
rights and other privileges and to full backwages,
inclusive of allowances, and to other benefits, or
their monetary equivalent computed from the time
compensation was withheld up to the time of actual
reinstatement. Shsuld reinstatement be no longer
feasible, Alipio is entitled to separation pay
equivalent to one month pay for her every year of
service in lieu of reinstatement.
Furthermore, as a rule, moral damages are

recoverable where the dismissal of the employee
- 103 -
was attended with bad faith or was done in a

manner contrary to good customs Exemplary
damages may also be awarded if the dismissal is
effected in a wanton, oppressive or malevolent
manner.
[Doctrine]
An employment is deemed regular when the

activities performed by the employee are usually
necessary or desirable in the usual business of the
employer. However, any employee who has
rendered at least one year of service, even though
intermittent, is deemed regular with respect to the
activity performed and while such activity actually
exists.
Samonte v. La Salle Greenhills, Inc Facts: From 1989, and for fifteen (15) years Article 280 of the Labor Code classifies employees
G.R. No. 199683 thereafter, LSGI contracted the services of medical into regular, project, seasonal, and casual:
February 10, 2016 professionals, specifically pediatricians, dentists
and a physician, to comprise its Health Service Art. 280. Regular and casual employment. The
Team (HST). provisions of written agreement to the contrary
notwithstanding and regardless of the oral
Petitioners, along with other members of the HST agreement of the parties, an employment shall be
signed uniform one-page Contracts of Retainer for deemed to be regular where the employee has
the period of a specific academic calendar been engaged to perform activities which are
beginning in June of a certain year (1989 and the usually necessary or desirable in the usual business
succeeding 15 years) and terminating in March of or trade of the employer, except where the
the following year when the school year ends. employment has been fixed for a specific project or
After fifteen consecutive years of renewal each undertaking the completion or termination of which
academic year, where the last Contract of has been determined at the time of the engagement
Retainer was for the school year of 2003-2004, of the employee or where the . work or service to be
LSGI Head Administrator, Herman Rochester, on performed is seasonal in nature and the employment
that last day of the school year, informed the is for the duration of the season.
Medical Service Team, including herein petitioners,
that their contracts will no longer be renewed for An employment shall be deemed to be casual if it is
the following school year by reason of LSGI's not covered by the preceding paragraph: Provided,
decision to hire two (2) full-time doctors and That any employee who has rendered at least one
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dentists. year of service, whether such service is continuous or

broken, shall be considered a regular employee with
When petitioners', along with their medical respect to the activity in which he is employed and
colleagues', requests for payment of their his employment shall continue while such activity
separation pay were denied, they filed a exists.
complaint for illegal dismissal with prayer for
separation pay, damages and attorney's fees The provision classifies regular employees into two
before the NLRC. kinds (1) those "engaged to perform activities which
are usually necessary or desirable in the usual
Petitioners alleged that they were regular business or trade of the employer"; and (2) casual
employees who could only be dismissed for just employees who have "rendered at least one year of
and authorized causes. service, whether such service is continuous or broken."
LSGI denied that complainants were regular The NLRC solely relied on the case of Brent v.
employees, asserting that complainants were Zamora, which applies only to cases where it
independent contractors retained by LSGI by appears that the employer and employee are on
reason of their medical skills and expertise. It equal footing with no moral dominance whatever
claimed that complainants were professional being exercised by the former on the latter." It
physicians and dentists on retainer basis, paid on should have no application to instances where a
monthly retainer fees, not regular salaries; LSGI fixed period of employment was agreed upon
had no power to impose disciplinary measures knowingly and voluntarily by the parties, without
upon complainants including dismissal from any force, duress or improper pressure being
employment; and LSGI had no power of control brought to bear upon the employee and absent any
over how complainants actually performed their other circumstances vitiating his consent, or where it
professional services. satisfactorily appears that the employer and
employee dealt with each other on more or less
Issue: equal terms with no moral dominance whatever
being exercised by the former over the latter.
1. WON the petitioners were regular
employees – Yes A fixed-term employment is allowable under the
Labor Code only if the term was voluntarily and
2. WON the petitioners were illegally knowingly entered into by the parties who must have
dismissed from work – Yes dealt with each other on equal terms not one
exercising moral dominance over the other.
Further, a fixed-term contract is an employment

contract, the repeated renewals of which make for a
regular employment.
- 105 -
The uniform one-page Contracts of Retainer signed

by petitioners were prepared by LSGI alone.
Petitioners, medical professionals as they were, were
still not on equal footing with LSGI as they
obviously did not want to lose their jobs that they
had stayed in for fifteen (15) years. There is no
specificity in the contracts regarding terms and
conditions of employment that would indicate that
petitioners and LSGI were on equal footing in
negotiating it. Notably, without specifying what are
the tasks assigned to petitioners, LSGI "may upon
prior written notice to the retainer, terminate [the]
contract should the retainer fail in any way to
perform his assigned job/task to the satisfaction of
La Salle Greenhills, Inc. or for any other just cause."
While vague in its sparseness, the Contract of

Retainer very clearly spelled out that LSGI had the
power of control over petitioners.
Time and again we have held that the power of

control refers to the existence of the power and not
necessarily to the actual exercise thereof, nor is it
essential for the employer to actually supervise the
performance of duties of the employee. It is enough
that the employer has the right to wield that power.
In all, given the following: (1) repeated renewal of

petitioners' contract for fifteen years, interrupted
only by the close of the school year; (2) the necessity
of the work performed by petitioners as school
physicians and dentists; and (3) the existence of
LSGI's power of control over the means and method
pursued by petitioners in the performance of their
job, we rule that petitioners attained regular
employment, entitled to security of tenure who could
only be dismissed for just and authorized causes.
- 106 -
Consequently, petitioners were illegally dismissed

and are entitled to the twin remedies of payment of
separation pay and full back wages.
[Doctrine]
A fixed-term contract is an employment contract, the
repeated renewals of which make for a regular
employment.
PNOC-EDC vs. Buenviaje Facts: Philippine National Oil Company-Energy Yes. Buenviaje was a permanent employee
G.R. Nos. 183200-01 Development Corporation (PNOC-EDC) hired
June 29, 2016 Amelyn Buenviaje (Buenviaje) as Assistant to the Buenviaje was hired as a Marketing Division
then Chairman/President and CEO Sergio A.F. Manager, a position that performs activities that are
Apostol (Apostol), her father. Buenviaje's usually necessary and desirable to the business of
employment contract provided that she will serve PNOC-EDC and is thusly, regular. As an employer,
until June 30, 2004 or co-terminous with the tenure PNOC-EDC has an exclusive management
of Apostol, whichever comes first. prerogative to hire someone for the position, either
on a permanent status right from the start or place
Apostol approved the creation of PNOC-EDC's him first on probation. In either case, the employee's
new Marketing Division composed of thirty (30) right to security of tenure immediately attaches at
positions. Seven (7) of these thirty (30) positions the time of hiring.
were also newly created, one of which was that of
a Marketing Division Manager. Buenviaje assumed As a permanent employee, he may only be validly
this position as early as the time of the creation of dismissed for a just or authorized cause. As a
the Marketing Division. probationary employee, he may also be validly
dismissed for a just or authorized cause, or when he
Apostol filed his Certificate of Candidacy as fails to qualify as a regular employee in accordance
Governor for the province of Leyte, yet continued with reasonable standards made known to him by
to discharge his functions as President in PNOC- the employer at the time of his engagement. Apart
EDC. Buenviaje also continued to perform her from the protection this last ground in the dismissal of
duties as Assistant to the Chairman/President and a probationary employee affords the employee, it is
Marketing Division Manager in PNOC-EDC. also in line with the right or privilege of the
employer to choose who will be accorded with
Paul Aquino (Aquino), the new President of PNOC- regular or permanent status and who will be denied
EDC, appointed Buenviaje to the position of Senior employment after the period of probation. It is
Manager for Marketing Division effective within the exercise of this right that the employers
February 1, 2004. The appointment letter partly may set or fix a probationary period within which it
provides: may test and observe the employee's conduct before
- 107 -
hiring him permanently.

By copy of this letter, HRMD [Human Resources
Management Division] is instructed to amend your Here, PNOC-EDC exercised its prerogative to hire
present employment status from your present Buenviaje as a permanent employee right from the
position as Assistant to the President (co-terminus) start or on February 1, 2004, the effectivity date of
to regular status and as such you will be entitled to her appointment. In her appointment letter, PNOC-
all the rights and privileges granted to your new EDC's President expressly instructed the HRMD to
position under the company's benefit policies amend Buenviaje's status from co-terminous to
subject to existing rules and regulations. This regular. He also informed her that her regular status
appointment is subject to confirmation by your shall be retroactive. Nowhere in the appointment
immediate superior based on your performance letter did PNOC-EDC say that Buenviaje was being
during the next six months. x x x For record hired on probationary status. Upon evaluation on
purposes, please take note that your regular two (2) occasions, PNOC-EDC used a performance
status is retroactive to July 1, 2001. This date will appraisal form intended for permanent managerial
be used for the computation of your service employees, even if the company had a form for
credits, retirement and other company benefits probationary employees. The intention, therefore, all
allowed under company policy. along was to grant Buenviaje regular or permanent
employment.
Pursuant to the instructions in the appointment
letter, Buenviaje affixed her signature to the This intention was clear notwithstanding the clause in
letter, signifying that she has read and understood the appointment letter saying that Buenviaje's
its contents. appointment was subject to confirmation by her
immediate superior based on her performance
In line with PNOC-EDCs policies, Buenviaje was during the next six (6) months. This clause did not
subjected to a performance appraisal during the make her regularization conditional, but rather,
first week of May 2004. She received a effectively informed Buenviaje that her work
satisfactory grade of three (3). In her subsequent performance will be evaluated later on. PNOC-EDC
performance appraisal covering the period of insists that this clause demonstrates that Buenviaje
May 1, 2004 to June 30, 2004, she received an was merely a probationary employee.
unsatisfactory grade of four (4). Thus, Ester Consequently, when she failed to meet the standards
Guerzon, Vice President for Corporate Affairs of set by PNOC-EDC, the latter was well within its
PNOC-EDC, informed Buenviaje that she did not rights to dismiss her.
qualify for regular employment. PNOC-EDC,
through Guerzon, communicated in writing to Apart from the express intention in her appointment
Buenviaje her non-confirmation of appointment as letter, there is substantial evidence to prove that
well as her separation from the company effective Buenviaje was a permanent employee and not a
July 31, 2004. Buenviaje gave her written probationary one.
comments on the results of her second performance
- 108 -
appraisal. In reply, PNOC-EDC sent her two (2) A probationary employee is defined as one who is
more letters reiterating her non-confirmation andon trial by an employer during which the employer
separation from the company. Aquino also issued determines whether or not he is qualified for
a Memorandum to Buenviaje instructing her to permanent employment. In general, probationary
prepare a turnover report before her physical employment cannot exceed six (6) months, otherwise
move-out. the employee concerned shall be considered a
regular employee. It is also indispensable in
Buenviaje responded by filing a complaint before probationary employment that the employer informs
the Labor Arbiter for illegal dismissal. the employee of the reasonable standards that will
be used as a basis for his or her regularization at
Issue: WON Buenviaje is a regular employee. the time of his or her engagement. If the employer
fails to comply with this, then the employee is
considered a regular employee.
In their reply to Buenviaje dated July 28, 2004,

PNOC-EDC reminded Buenviaje that the standards
"were thoroughly discussed with [her] separately
soon alter [she] signed [her] contract, as well as that
which was contained in the job description attached
thereto." PNOC-EDC maintained this position in its
appeal memorandum, asserting that Buenviaje was
apprised of the reasonable standards for
regularization by virtue of the job description
attached to her appointment. They also alleged that
the standards were discussed with Buenviaje prior to
her first and second appraisals. We, however, do
not find these circumstances sufficient to categorize
Buenviaje as a probationary employee.
In Abbott Laboratories, Philippines v. Alcaraz, we

were confronted with the similar question of whether
Alcaraz was sufficiently informed of the reasonable
standards that would qualify her as a regular
employee.
We stress here that the receipt by Buenviaje of her

job description does not make this case on all fours
with Abbott. The receipt of job description and the
- 109 -
company's code of conduct in that case was just one

of the attendant circumstances which we found
equivalent to being actually informed of the
performance standards upon which a probationary
employee should be evaluated. What was
significant in that case was that both the offer sheet
and the employment contract specifically stated that
respondent was being employed on a probationary
status. Thus, the intention of Abbott was to hire
Alcaraz as a probationary employee. This
circumstance is not obtaining in this case.
A copy of this appraisal form, unlike in Abbot, was

not given to Buenviaje at any time prior to, during
the time of her engagement, and the incipient stages
of her employment. A comparison of the job
description and the standards in the appraisal form
reveals that they are distinct. The job description is
just that, an enumeration of the duties and
responsibilities of Buenviaje.
The foregoing, however, invite the question as to

what are the specific qualitative and/or quantitative
standards of PNOC-EDC. With respect to the first
job objective listed above, for instance, one may
ask: "how will PNOC-EDC measure the performance
of Buenviaje as to whether she has adequately set
the overall marketing objectives and directions of
PNOC-EDC, in coordination with PNOC-EDC
Operations, through the Department Managers and
Corporate Service units?". The same is true with the
first duty: "how will PNOC-EDC measure the
performance of Buenviaje as to whether she has
ensured that a survey of potential markets and
customers in relation to newly developed or soon-to-
be-completed power projects are regularly
initiated?".
- 110 -
On the other hand, the appraisal form appraises the

elements of performance, which are categorized into
results-based factors, individual effectiveness and
co-worker effectiveness. Pertinently, the results-
based factors, which are broken down into output
indicators of: 1.) quality, 2.) quantity, 3.) timeliness,
4.) cost effectiveness, 5.)
safety/housekeeping/environmental consciousness,
and 6.) profit objectives, are rated according to
expected outputs or key result areas, performance
standards, and actual accomplishments. Clearly, the
form specifies the performance standards PNOC-
EDC will use, which demonstrates that PNOC-EDC
expected a certain manner, level, or extent by which
she should perform her job. PNOC-EDC knew the job
description and the performance appraisal form are
not one and the same, having specifically used the
latter when it evaluated Buenviaje and not the job
description attached to the appointment letter.
[Doctrine]
A probationary employee is defined as one who is
on trial by an employer during which the employer
determines whether or not he is qualified for
permanent employment. In general, probationary
employment cannot exceed six (6) months, otherwise
the employee concerned shall be considered a
regular employee. It is also indispensable in
probationary employment that the employer informs
the employee of the reasonable standards that will
be used as a basis for his or her regularization at
the time of his or her engagement. If the employer
fails to comply with this, then the employee is
considered a regular employee.
Basan v. Coca-Cola Facts: Petitioners filed a complaint for illegal Yes. The argument of petitioner that its usual
G.R. Nos. 174365-66 dismissal with money claims against respondent business or trade is softdrink manufacturing and that
February 04, 2015 Coca-Cola Bottlers Philippines, alleging that the work assigned to respondent workers as sales
- 111 -
respondent dismissed them without just cause and route helpers so involves merely "postproduction
prior written notice required by law. activities," one which is not indispensable in the
manufacture of its products, scarcely can be
Respondent corporation, however, countered that persuasive. If, as so argued by petitioner company,
it hired petitioners as temporary route helpers to only those whose work are directly involved in the
act as substitutes for its absent regular route production of softdrinks may be held performing
helpers merely for a fixed period in anticipation functions necessary and desirable in its usual business
of the high volume of work in its plants or sales or trade, there would have then been no need for it
offices. As such, petitioners’ claims have no basis to even maintain regular truck sales route helpers.
for they knew that their assignment as route
helpers was temporary in duration. The repeated rehiring of respondent workers and
the continuing need for their services clearly attest to
the necessity or desirability of their services in the
Issue: WON Petitioners are regular employees regular conduct of the business or trade of petitioner
company. The Court of Appeals has found each of
respondents to have worked for at least one year
with petitioner company. While this Court, in Brent
School, Inc. vs. Zamora, has upheld the legality of a
fixed-term employment, it has done so, however,
with a stern admonition that where from the
circumstances it is apparent that the period has been
imposed to preclude the acquisition of tenurial
security by the employee, then it should be struck
down as being contrary to law, morals, good
customs, public order and public policy. The fact that
respondent workers have agreed to be employed
on such basis and to forego the protection given to
them on their security of tenure, demonstrate nothing
more than the serious problem of impoverishment of
so many of our people and the resulting unevenness
between labor and capital.
This court has previously held that route helpers are

necessary and desirable in the usual business or
trade of Coca Cola Philippines, Inc., and are
considered as regular employees entitled to security
of tenure.
- 112 -
Article 280 of the Labor Code, as amended,

provides:
ART. 280. REGULAR AND CASUAL EMPLOYMENT. -

The provisions of written agreement to the contrary
agreement of the parties, an employment shall be
deemed to be regular where the employee has
been engaged to perform activities which are
usually necessary or desirable in the usual business
or trade of the employer, except where the
undertaking, the completion or termination of which
has been determined at the time of the engagement
of the employee or where the work or services to be
performed is seasonal in nature and the employment
is for the duration of the season.

not covered by the preceding paragraph: Provided,
That, any employee who has rendered at least one
year of service, whether such service is continuous or
respect to the activity in which he is employed and
his employment shall continue while such activity
exists.
Thus, pursuant to the Article quoted above, there are

two kinds of regular employees, namely: (1) those
who are engaged to perform activities which are
or trade of the employer; and (2) those who have
rendered at least one year of service, whether
continuous or broken, with respect to the activities in
which they are employed. The former refers to those
employees who perform a particular activity which is
necessary or desirable in the usual business or trade
of the employer, regardless of their length of
- 113 -
service; while the latter refers to those employees

who have been performing the job, regardless of
the nature thereof, for at least a year.
Petitioners, in this case, fall under the first kind of

regular employee above. As route helpers who are
engaged in the service of loading and unloading
softdrink products of respondent company to its
various delivery points, which is necessary or
desirable in its usual business or trade, petitioners
are considered as regular employees. That they
merely rendered services for periods of less than a
year is of no moment since for as long as they were
performing activities necessary to the business of
respondent, they are deemed as regular employees,
irrespective of the length of their service.
The Civil Code has always recognized, and continues

to recognize, the validity and propriety of contracts
and obligations with a fixed or definite period.
Considering, however, the possibility of abuse by

employers in the utilization of fixed-term
employment contracts, this Court, in Brent, laid down
the following criteria to prevent the circumvention of
the employee’s security of tenure:
1) The fixed period of employment was

knowingly and voluntarily agreed upon by
the parties without any force, duress, or
improper pressure being brought to bear
upon the employee and absent any other
circumstances vitiating his consent; or
2) It satisfactorily appears that the

employer and the employee dealt with each
other on more or less equal terms with no
moral dominance exercised by the former or
- 114 -
the latter.
Unfortunately, however, the records of this case is

bereft of any proof which will show that petitioners
freely entered into agreements with respondent to
perform services for a specified length of time
While fixed term employment is not per se illegal or

against public policy, the criteria above must first be
established to the satisfaction of this Court.
Respondent’s act of hiring and re-hiring petitioners
for periods short of the legal probationary period
evidences its intent to thwart petitioner’s security of
tenure, especially in view of an awareness that
ordinary workers, such as petitioners herein, are
never on equal terms with their employers.
[Doctrine]
Under Art 280, there are two kinds of regular
employees, namely: (1) those who are engaged to
perform activities which are usually necessary or
desirable in the usual business or trade of the
employer; and (2) those who have rendered at least
one year of service, whether continuous or broken,
with respect to the activities in which they are
employed. The former refers to those employees
who perform a particular activity which is necessary
or desirable in the usual business or trade of the
employer, regardless of their length of service; while
the latter refers to those employees who have been
performing the job, regardless of the nature thereof,
for at least a year.
Gadia v. Sykes Asia Facts: Sykes Asia is a corporation engaged in Yes, they were project-based employees.
G.R. No. 209499 Business Process Outsourcing (BPO) which provides
January 28, 2015 support to its international clients from various Article 294 of the Labor Code, as amended,
sectors (e.g., technology, telecommunications, retail distinguishes a project-based employee from a
services) by carrying on some of their operations, regular employee as follows:
governed by service contracts that it enters with Art. 294. Regular and casual employment.—The
- 115 -
them. On September 2, 2003, Alltelprovisions of written agreement to the contrary

Communications, Inc. (Alltel), a United States- notwithstanding and regardless of the oral
based telecommunications firm, contracted Sykes agreement of the parties, an employment shall be
Asia’s services to accommodate the needs and deemed to be regular where the employee has
demands of Alltel clients for its postpaid and been engaged to perform activities which are
prepaid services (Alltel Project). Thus, on differentusually necessary or desirable in the usual business
dates, Sykes Asia hired petitioners as customer or trade of the employer, except where the
service representatives, team leaders, and trainers employment has been fixed for a specific project or
for the Alltel Project. undertaking the completion or termination of which
Services for the said project went on smoothly until of the employee or where the work or services to be
Alltel sent two (2) letters to Sykes Asia dated performed is seasonal in nature and the employment
August 7, 2009 and September 9, is for the duration of the season.
2009 informing the latter that it was terminating
all support services provided by Sykes Asia A project employee is assigned to a project which
related to the Alltel Project. In view of this begins and ends at determined or determinable
development, Sykes Asia sent each of the times. Unlike regular employees who may only be
petitioners end-of-life notices,16 informing them of dismissed for just and/or authorized causes under
their dismissal from employment due to the the Labor Code, the services of employees who are
termination of the Alltel Project. Aggrieved, hired as "project[-based] employees" may be
petitioners filed separate complaints17 for illegal lawfully terminated at the completion of the project.
dismissal against respondents Sykes Asia, Chuck The principal test for determining whether particular
Sykes, the President and Chief Operating Officer employees are properly characterised as "project[-
of Sykes Enterprise, Inc., and Mike Hinds and based] employees" as distinguished from "regular
Michael Henderson, the President and Operations employees," is whether or not the employees were
Director, respectively, of Sykes Asia (respondents), assigned to carry out a "specific project or
praying for reinstatement, backwages, 13th month undertaking," the duration (and scope) of which were
pay, service incentive leave pay, night shift specified at the time they were engaged for that
differential, moral and exemplary damages, and project. The project could either be (1) a particular
attorney’s fees. In their complaints, petitioners job or undertaking that is within the regular or usual
alleged that their dismissal from service was unjust business of the employer company, but which is
as the same was effected without substantive and distinct and separate, and identifiable as such, from
procedural due process.18 the other undertakings of the company; or (2) a
particular job or undertaking that is not within the
In their defense, respondents averred that regular business of the corporation. In order to
19
petitioners were not regular employees but merely safeguard the rights of workers against the
project-based employees, and as such, the arbitrary use of the word "project" to prevent
termination of the Alltel Project served as a valid employees from attaining a regular status,
- 116 -
ground for their dismissal.20 In support of their employers claiming that their workers are project[-
position, respondents noted that it was expressly based] employees should not only prove that the
indicated in petitioners’ respective employment duration and scope of the employment was specified
contracts that their positions are "project-based" at the time they were engaged, but also, that there
and thus, "co-terminus to the was indeed a project.
project."21 Respondents further maintained that
they complied with the requirements of procedural For an employee to be considered project-based,
due process in dismissing petitioners by furnishing the employer must show compliance with two (2)
each of them their notices of termination at least requisites, namely that: (a) the employee was
thirty (30) days prior to their respective dates of assigned to carry out a specific project or
dismissal. undertaking; and (b) the duration and scope of
which were specified at the time they were engaged
for such project.
Issue: WON petitioners were merely project-
based employees, and thus, validly dismissed from Sykes Asia adequately informed petitioners of their
service. employment status at the time of their engagement,
as evidenced by the latter’s employment contracts
which similarly provide that they were hired in
connection with the Alltel Project, and that their
positions were "project-based and as such is co-
terminus to the project." The the CA correctly ruled
that petitioners were indeed project-based
employees. The CA correctly stressed that "[t]he law
and jurisprudence dictate that ‘the duration of the
undertaking begins and ends at determined or
determinable times’" while clarifying that "[t]he
phrase ‘determinable times’ simply means capable
of being determined or fixed."
Sykes Asia substantially complied with this requisite

when it expressly indicated in petitioners’
employment contracts that their positions were "co-
terminus with the project."
[Doctrine]
For an employee to be considered project-based,
the employer must show compliance with two (2)
- 117 -
requisites, namely that: (a) the employee was

assigned to carry out a specific project or
undertaking; and (b) the duration and scope of
which were specified at the time they were engaged
for such project.
A. Nate Casket Maker v. Arango Facts: Petitioners Armando and Anely Nate are Yes.
G.R. No. 192282 the owners/proprietors of A. Nate Casket Maker. Art. 280. Regular and Casual Employment. The
October 05, 2016 They employed respondents on various dates as provisions of written agreement to the contrary
carpenters, mascilladors and painters in their
casket-making business from 1998 until their
alleged termination in March 2007. Petitioners deemed to be regular where the employee has
alleged that respondents are pakyaw workers who been engaged to perform activities which are
are paid per job order. Respondents are "stay-in" usually necessary or desirable in the usual business
workers with free board and lodging, but they or trade of the employer, except where the
would "always" drink, quarrel with each other on employment has been fixed for a specific project or
petty things such that they could not accomplish the undertaking the completion or termination of which
job orders on time. Hence, petitioners would then has been determined at the time of the engagement
be compelled to "contract out" to other workers of the employee or where the work or services to be
for the job to be finished. In February 2007 they performed is seasonal in nature and the employment
met with respondents in order to present a
proposed employment agreement which would
change the existing pakyaw system to "contractual An employment shall be deemed to be casual if it is
basis" and would provide for vacation leave and not covered by the preceding paragraph; Provided,
sick leave pay and other benefits given to That, any employee who has rendered at least one
regular employees.
Respondents alleged that they worked from respect to the activity in which he is employed and
Monday to Saturday, from 7:00a.m. to 10:00 his employment shall continue while such activity
p.m., with no overtime pay and any monetary exist.
benefits despite having claimed for such. They
were called by petitioners and were made to sign This provision classifies employees into regular,
a Contract of Employment with the following terms
project, seasonal, and casual. It further classifies
and conditions: (1) they shall be working on regular employees into two kinds: (I) those "engaged
contractual basis for a period of five months; (2) to perform activities which are usually necessary or
renewal of employment contract after such period desirable in the usual business or trade of the
shall be on a case-to-case basis or subject to employer"; and (2) casual employees who have
respondents' performance; (3) petitioners shall "rendered at least one year of service, whether such
- 118 -
reserve the right to terminate their employment service is continuous or broken."

should their performance fall below expectations
or if the conditions under which they were A regular employment, whether it is one or not, is
employed no longer exist; (4) their wages shall be aptly gauged from the concurrence, or the non-
on a piece-rate basis; (5) in the performance of concurrence, of the following factors (a) the manner
their tasks, they shall be obliged to strictly follow
of selection and engagement of the putative
their work schedules; (6) they shall not be eligibleemployee; (b) the mode of payment of wages; (c)
to avail of sick leave or vacation leave, nor the presence or absence of the power of dismissal;
receive 13th month pay and/or bonuses, or any and (d) the presence or absence of the power to
other benefits given to a regular employee. control the conduct of the putative employee or the
Respondents then alleged that when they were power to control the employee with respect to the
adamant and eventually refused to sign the means or methods by which his work is to be
contract, petitioners told them to go home because accomplished. The "control test" assumes primacy in
their employment has been terminated. the overall consideration. Under this test, an
employment relation obtains where work is
Respondents filed a Complaint for illegal dismissal performed or services are rendered under the
and non-payment of separation pay against control and supervision of the party contracting for
petitioners. the service, not only as to the result of the work but
also as to the manner and details of the
Issue: WON respondents who performance desired.
are pakyaw workers and considered regular
workers. There is no dispute that the tasks performed by
respondents as carpenters, painters,
and mascilladors were necessary and desirable in
the usual business of petitioners who are engaged in
the manufacture and selling of caskets. We have to
also consider the length of time that respondents
worked for petitioners, commencing on various dates
from 1998 to 2007. In addition, the power of
control of petitioners over respondents is clearly
present in this case. Respondents follow the steps in
making a casket, as instructed by the petitioners.
They listed the work completed with their signature
and the date finished. The same would be checked
by petitioners as basis for the compensation for the
day. Thus, petitioners wielded control over the
respondents in the discharge of their work.
- 119 -
It should be remembered that the control test merely

calls for the existence of the right to control, and not
necessarily the exercise thereof. It is not essential
that the employer actually supervises the
performance of duties by the employee. It is enough
that the former has a right to wield the
power. Hence, pakyaw workers are considered
regular employees for as long as their employers
exercise control over them. Thus, while respondents'
mode of compensation was on a per-piece basis, the
status and nature of their employment was that of
regular employees.
As regular employees, respondents were entitled to

security of tenure and could be dismissed only for
just or authorized causes and after the observance
of due process. The right to security of tenure is
guaranteed under Article XIII, Section 3 of the 1987
Constitution.
[Doctrine]
A regular employment, whether it is one or not, is
aptly gauged from the concurrence, or the non-
concurrence, of the following factors (a) the manner
of selection and engagement of the putative
employee; (b) the mode of payment of wages; (c)
the presence or absence of the power of dismissal;
and (d) the presence or absence of the power to
control the conduct of the putative employee or the
power to control the employee with respect to the
means or methods by which his work is to be
accomplished. The "control test" assumes primacy in
the overall consideration. Under this test, an
employment relation obtains where work is
performed or services are rendered under the
control and supervision of the party contracting for
the service, not only as to the result of the work but
also as to the manner and details of the
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performance desired.
Project Employees
Poseidon Fishing v. NLRC Facts: Petitioner Poseidon Fishing is a fishing No.

G.R. No. 168052 company engaged in the deep-sea fishing Petitioners lament that fixed-term employment
February 20, 2006 industry. One of its boat crew was private contracts are recognized as valid under the law
respondent Jimmy S. Estoquia. notwithstanding the provision of Article 280 of the
Labor Code. Quoting Brent School Inc. v.
Private respondent was employed by Poseidon Zamora, petitioners are hamstrung on their reasoning
Fishing in January 1988 as Chief Mate. After five that under the Civil Code, fixed-term employment
years, he was promoted to Boat Captain. In 1999, contracts are not limited, as they are under the
petitioners, without reason, demoted respondent to present Labor Code, to those that by their nature
Radio Operator of petitioner Poseidon. As a are seasonal or for specific projects with pre-
Radio Operator, he monitored the daily activities determined dates of completion as they also include
in their office and recorded in the duty logbook those to which the parties by free choice have
the names of the callers and time of their calls. assigned a specific date of termination.
On 3 July 2000, private respondent failed to The entire purpose of Article 280 of the Labor Code
record a 7:25 a.m. call in one of the logbooks. is to prevent circumvention of the employee’s right to
However, he was able to record the same in the be secure in his tenure, the clause in said article
other logbook. Consequently, when he reviewed indiscriminately and completely ruling out all written
the two logbooks, he noticed that he was not able or oral agreements conflicting with the concept of
to record the said call in one of the logbooks so he regular employment as defined therein should be
immediately recorded the 7:25 a.m. call after the construed to refer to the substantive evil that the
7:30 a.m. entry. Around 9:00 o’clock in the Code itself has singled out: agreements entered into
morning of 4 July 2000, petitioner detected the precisely to circumvent security of tenure. It should
error in the entry in the logbook. Subsequently, she have no application to instances where a fixed
asked private respondent to prepare an incident period of employment was agreed upon knowingly
report to explain the said oversight. That same and voluntarily by the parties, without any force,
day, petitioner Poseidon’s secretary, summoned duress or improper pressure being brought to bear
private respondent to get his separation pay. upon the employee and absent any other
However, he refused to accept the amount as he circumstances vitiating his consent, or where it
believed that he did nothing illegal to warrant his satisfactorily appears that the employer and
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immediate discharge from work. employee dealt with each other on more or less
equal terms with no moral dominance whatever
Respondent filed a complaint for illegal dismissal. being exercised by the former over the latter.
Petitioners posited that when the private
respondent was engaged, it was made clear to Brent cited some familiar examples of employment
him that he was being employed only on a "por contracts which may neither be for seasonal work
viaje" or per trip basis and that his employment nor for specific projects, but to which a fixed term is
would be terminated at the end of the trip for an essential and natural appurtenance, i.e., overseas
which he was being hired. As such, the private employment contracts, appointments to the positions
respondent could not be entitled to separation of dean, assistant dean, college secretary, principal,
pay and other monetary claims. and other administrative offices in educational
institutions, and where fixed terms are a necessity
without which no reasonable rotation would be
Issue: WON respondent is a contractual/seasonal possible. Thus, in Brent, the acid test in considering
/project employee. fixed-term contracts as valid is: if from the
circumstances it is apparent that periods have been
imposed to preclude acquisition of tenurial security
by the employee, they should be disregarded for
being contrary to public policy.
In the case under consideration, the agreement has

such an objective - to frustrate the security of tenure
of private respondent- and must be nullified.
Petitioner’s work was necessary and important to the
business of his employer. Such being the scenario
involved, private respondent is considered a regular
employee of petitioner under Article 280 of the
Labor Code, the law in point, which provides:
Art. 280. Regular and Casual Employment. – The

provisions of written agreement to the contrary
deemed to be regular where the employee has
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undertaking the completion or termination of which

of the employee or where the work or services to be

not covered by the preceding paragraph: Provided,
That any employee who has rendered at least one
respect to the activity in which he is employed and
his employment shall continue while such actually
exists.
Moreover, unlike in the Brent case where the period

of the contract was fixed and clearly stated, note
that in the case at bar, the terms of employment of
private respondent as provided was not only vague,
it also failed to provide an actual or specific date or
period for the contract.
The test to determine whether employment is regular

or not is the reasonable connection between the
particular activity performed by the employee in
relation to the usual business or trade of the
employer. And, if the employee has been
performing the job for at least one year, even if the
performance is not continuous or merely intermittent,
the law deems the repeated and continuing need for
its performance as sufficient evidence of the
necessity, if not indispensability of that activity to the
business.
This provision draws a line between regular and

casual employment, a distinction however often
abused by employers. The provision enumerates two
(2) kinds of employees, the regular employees and
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the casual employees. The regular employees consist

of the following:
1) those engaged to perform activities which

are usually necessary or desirable in the
usual business or trade of the employer; and
2) those who have rendered at least one

year of service whether such service is
continuous or broken.
Petitioners assert that deep-sea fishing is a seasonal

industry because catching of fish could only be
undertaken for a limited duration or seasonal within
a given year. Thus, according to petitioners, private
respondent was a seasonal or project employee. No.
The activity of catching fish is a continuous process
and could hardly be considered as seasonal in
nature.
We defined project employees as those workers

hired (1) for a specific project or undertaking, and
(2) the completion or termination of such project has
been determined at the time of the engagement of
the employee. The principal test for determining
whether particular employees are "project
employees" as distinguished from "regular
employees," is whether or not the "project
employees" were assigned to carry out a "specific
project or undertaking," the duration and scope of
which were specified at the time the employees
were engaged for that project. In this case,
petitioners have not shown that private respondent
was informed that he will be assigned to a "specific
project or undertaking."
More to the point, once a project or work pool

employee has been: (1) continuously, as opposed to
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intermittently, re-hired by the same employer for the

same tasks or nature of tasks; and (2) these tasks
are vital, necessary and indispensable to the usual
business or trade of the employer, then the
employee must be deemed a regular employee.
[Doctrine]
We defined project employees as those workers
hired (1) for a specific project or undertaking, and
(2) the completion or termination of such project has
been determined at the time of the engagement of
the employee. The principal test for determining
whether particular employees are "project
employees" as distinguished from "regular
employees," is whether or not the "project
employees" were assigned to carry out a "specific
project or undertaking," the duration and scope of
which were specified at the time the employees
were engaged for that project.
Filipinas Pre-fabricated Building Facts: Respondent avers that he started working The Labor Code defines regular, project and casual
Systems (FilSystems) v. Puente with Petitioner Filsystems, Inc., a corporation employees as follows:
G.R. No. 153832 engaged in construction business, on June 12,
March 18, 2005 1989; that he was initially hired by petitionerART. 280. Regular and Casual Employment. - The
company as an ‘installer’; that he was later provision of written agreement to the contrary
promoted to mobile crane operator and was notwithstanding and regardless of the oral
stationed at the company premises; that his work
was not dependent on the completion or deemed to be regular where the employee has
termination of any project; that since his work was
not dependent on any project, his employment usually necessary or desirable in the usual business
with the [petitioner-]company was continuous and
without interruption for the past ten (10) years;
that in 1999, he was dismissed from his undertaking the completion or termination of which
employment allegedly because he was a project has been determined at the time of the engagement
employee. He filed a pro forma complaint for of the employee or where the work or services to be
illegal dismissal against the petitioner company.
Petitioner however claims that complainant was With particular reference to the construction industry,
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hired as a project employee in the company’s to which Petitioner Filsystems belongs, DOLE Order
various projects; that his employment contracts No. 19, Series of 1993, states:
showed that he was a project worker with specific
project assignments; that after completion of each
2.1 Classification of employees. – The employees in
project assignment, his employment was likewisethe construction industry are generally categorized
terminated and the same was correspondingly as a) project employees and b) non-project
reported to the DOLE. employees. Project employees are those employed
in connection with a particular construction project or
phase thereof and whose employment is co-
Issue: terminous with each project or phase of the project
1. WON Respondent is a project employee to which they are assigned.
– YES xxxxxxxxx
2.2 Indicators of project employment. – Either one or
2. WON he is entitled to reinstatement and more of the following circumstances, among other,
full backwages – YES may be considered as indicators that an employee is
a project employee.
(a) The duration of the specific/identified

undertaking for which the worker is engaged is
reasonably determinable.
(b) Such duration, as well as the specific
work/service to be performed, is defined in an
employment agreement and is made clear to the
employee at the time of hiring.
(c) The work/service performed by the employee is

in connection with the particular project/undertaking
for which he is engaged.
(d) The employee, while not employed and awaiting

engagement, is free to offer his services to any other
employer.
(e) The termination of his employment in the

particular project/undertaking is reported to the
Department of Labor and Employment (DOLE)
Regional Office having jurisdiction over the
workplace within 30 days following the date of his
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separation from work, using the prescribed form on

employees’ terminations/dismissals/suspensions.
(f) An undertaking in the employment contract by the

employer to pay completion bonus to the project
employee as practiced by most construction
companies.
The above-quoted provisions make it clear that a

project employee is one whose "employment has
been fixed for a specific project or undertaking the
completion or termination of which has been
determined at the time of the engagement of the
employee or where the work or services to be
is for the duration of the season." In D.M. Consunji,
Inc. v. NLRC, this Court has ruled that "the length of
service of a project employee is not the controlling
test of employment tenure but whether or not ‘the
undertaking the completion or termination of which
of the employee.’"
In the present case, the contracts of employment of

Puente attest to the fact that he was hired for
specific projects. His employment was coterminous
with the completion of the projects for which he had
been hired. Those contracts expressly provided that
his tenure of employment depended on the duration
of any phase of the project or on the completion of
the construction projects. Furthermore, petitioners
regularly submitted to the labor department reports
of the termination of services of project workers.
Such compliance with the reportorial requirement
confirms that respondent was a project employee.
That his employment contract does not mention
particular dates that establish the specific duration
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of the project does not preclude his classification as

a project employee. This fact is clear from the
provisions of Clause 3.3(a) of Department Order
No. 19, which states:
a) Project employees whose aggregate period of

continuous employment in a construction company is
at least one year shall be considered regular
employees, in the absence of a "day certain" agreed
upon by the parties for the termination of their
relationship. Project employees who have become
regular shall be entitled to separation pay.
A "day" as used herein, is understood to be that which
must necessarily come, although is may not be known
exactly when. This means that where the final
completion of a project or phase thereof is in fact
determinable and the expected completion is made
known to the employee, such project employee may
not be considered regular, notwithstanding the one-
year duration of employment in the project or phase
thereof or the one-year duration of two or more
employments in the same project or phase of the
object.
Respondent’s employment contract provides as

follows:
"x x x employment, under this contract is good only

for the duration of the project unless employee’s
services is terminated due to completion of the phase
of work/section of the project or piece of work to
which employee is assigned:
Evidently, although the employment contract did not

state a particular date, it did specify that the
termination of the parties’ employment relationship
was to be on a "day certain" -- the day when the
phase of work termed "Lifting & Hauling of
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Materials" for the "World Finance Plaza" project

would be completed. Thus, respondent cannot be
considered to have been a regular employee. He
was a project employee.
That he was employed with Petitioner Filsystems for

ten years in various projects did not ipso facto make
him a regular employee, considering that the
definition of regular employment in Article 280 of
the Labor Code makes a specific exception with
respect to project employment. The mere rehiring of
respondent on a project-to-project basis did not
confer upon him regular employment status. "The
practice was dictated by the practical consideration
that experienced construction workers are more
preferred." It did not change his status as a project
employee.
Petitioners claim that respondent’s services were

terminated due to the completion of the
project. There is no allegation or proof, however,
that the World Finance Plaza project -- or the phase
of work therein to which respondent had been
assigned -- was already completed by the date
when he was dismissed. The inescapable
presumption is that his services were terminated for
no valid cause prior to the expiration of the period
of his employment; hence, the termination was
illegal. Reinstatement with full back wages, inclusive
of allowances and other benefits or their monetary
equivalents -- computed from the date of his
dismissal until his reinstatement -- is thus in order.
However, if indeed the project has already been

completed during the pendency of this suit, then
respondent -- being a project employee -- can no
longer be reinstated. Instead, he shall entitled to the
payment of his salary and other benefits
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corresponding to the unexpired portion of his

employment, specifically from the time of the
termination of his employment, until the date of the
completion of the World Finance Plaza project.
[Doctrine]
A project employee is one whose "employment has
been fixed for a specific project or undertaking the
employee or where the work or services to be
is for the duration of the season”. This Court has
ruled that "the length of service of a project
employee is not the controlling test of employment
tenure but whether or not ‘the employment has been
fixed for a specific project or undertaking the
employee.’"
Without a valid cause, the employment of project
employees cannot be terminated prior to expiration.
Otherwise, they shall be entitled to reinstatement
with full back wages. However, if the project or
work is completed during the pendency of the
ensuing suit for illegal dismissal, the employees shall
be entitled only to full back wages from the date of
the termination of their employment until the actual
completion of the project or work.
Leyte Geothermal Power Facts: Among PNOCs geothermal projects is the Yes, they were project employees.
Progressive Employees Union v. Leyte Geothermal Power Project. the PNOC hired
PNOC-EDC and employed hundreds of employees on a In accordance with Article 280 of the Labor Code,
G.R. No. 170351 contractual basis, whereby, their employment was the test to determine whether an individual is a
March 30, 2011 only good up to the completion or termination of project employee lies in setting a fixed period of
the project and would automatically expire upon employment involving a specific undertaking which
the completion of such project. completion or termination has been determined at
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the time of the particular employee's engagement.

Majority of the employees hired by PNOC in its
Leyte Geothermal Power Projects had become In this case, the officers and the members of
members of petitioner. In view of that petitioner Union were specifically hired as project
circumstance, the petitioner demands from the employees for respondents Leyte Geothermal Power
PNOC for recognition of it as the collective Project. Consequently, upon the completion of the
bargaining agent of said employees and for a project or substantial phase thereof, the officers and
CBA negotiation with it, which PNOC refused. the members of petitioner Union could be validly
terminated.
When the project was about to be completed, the
PNOC served Notices of Termination of Contention of Union: the lack of interval in the
Employment upon the employees who are employment contracts its officer and members
members of the petitioner. They staged a strike. negates the latter's status as mere project
employees.
Issue: Were the officers and members of
petitioner Union are project employees of SC: The Union members’ employment for more than
respondent PNOC? a year does not equate to their regular employment.
In Mercado, Sr. v. NLRC, the Court stated that the
proviso in Article 280, deeming all those who had
rendered service for more than one year as regular
employees, only applies to casual employees, and
not project employees.
[Doctrine]
The test to determine whether an individual is a
project employee lies in setting a fixed period of
employment involving a specific undertaking which
completion or termination has been determined at
the time of the particular employee's engagement.
Employment for more than a year does not equate

to regular employment.
The proviso in Article 280, deeming all those who

had rendered service for more than one year as
regular employees, only applies to casual
employees, and not project employees.
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Pasos v. PNCC Facts: 1st hire: Pasos was first hired by PNCC as He was a regular employee. Although he started as
G.R. No. 192394 Clerk II (Accounting) assigned to the NAIA – II a project employee, he eventually became a regular
July 3, 2013 Project. employee of PNCC.
The Contract here states that: Under Article 280 of the Labor Code, a project
• Employment may be terminated at any time employee is one whose "employment has been fixed
for cause as provided for by law and/or for a specific project or undertaking the completion
existing Company Policy or termination of which has been determined at the
• If services are still needed beyond the validity, time of the engagement of the employee or where
the Company shall extend your services. the work or services to be performed is seasonal in
nature and the employment is for the duration of the
• After services are terminated, the employee season."
shall be under no obligation to re-employ with
the Company nor shall the Company be The principal test used to determine whether
obliged to re-employ the employee. employees are project employees is whether or not
the employees were assigned to carry out a specific
His employment was extended beyond the period project or undertaking, the duration or scope of
provided for this project. which was specified at the time the employees were
engaged for that project.
2nd hire: PNCC again hired him as an Accounting
Clerk (Reliever) assigned to the PCSO – Q.I. In this case, Pasos worked continuously for more than
Project. His employment was again extended two years after the supposed three-month duration
beyond the period provided for this project. of his project employment for the NAIA II Project.
While his appointment for said project allowed such
3rd hire: as Accounting Clerk assigned to the SM- extension since it specifically provided that in case
Project. This time, there is no specification of the his "services are still needed beyond the validity of
date when employment will end but it was stated the contract, the Company shall extend his services,"
that it will be "co-terminus with the completion of there was no subsequent contract or appointment
the project." His employment for this project that specified a particular duration for the
supposedly terminated as he was hired again. extension.
4th hire: Accounting Clerk for SM Project (Package While for first three months, petitioner can be
II). considered a project employee of PNCC, his
There was no statement as to the end date of his employment thereafter, when his services were
employment. It eventually ended on Oct. 19, extended without any specification of as to the
2000. duration, made him a regular employee of PNCC.
Despite the termination on October 19, Pasos His status as a regular employee was not affected
claimed that his superior instructed him to report
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the following day, saying that he would again be by the fact that he was assigned to several other
employed for the succeeding SM projects.’ projects and there were intervals in between said
projects since he enjoys security of tenure.
He filed for sick leaves due to Koch’s disease.
After he presented his medical clearance, he was Furthermore, failure of an employer to file
informed that his services were already terminated termination reports after every project completion
on October 19 and he was already replaced due proves that an employee is not a project employee.
to the expiration of his contract.
Records clearly show that PNCC did not report the
Note: his application for sick leaves was not termination of Pasos’ for the NAIA II Project.
formally granted since PNCC’s Project Personnel
Officer told him that he was not entitled as he was Department Order No. 19, or the "Guidelines
not a regular employee. Governing the Employment of Workers in the
Construction Industry," requires employers to submit
Issue: Was he a project employee or a regular a report of an employee’s termination every time an
employee? employee’s employment is terminated due to a
completion of a project.
[Doctrine]
When a project employee’s services are extended
without any specification of as to the duration, it
makes him a regular employee.
The status as a regular employee is not affected by

the fact of being assigned to several other projects
with intervals in between since he enjoys security of
tenure.
Failure of an employer to file termination reports

after every project completion proves that an
employee is not a project employee.
Exodus International Construction Exodus is a duly licensed labor contractor for the No, they are regular employees of Exodus.
v. Biscocho painting of residential houses, condominium units
G.R. No. 166109 and commercial buildings. It entered a contract There are two types of employees in the construction
February 23, 2011 with Dutch Boy for the painting of Pacific Plaza industry:
Towers.
The first is referred to as project employees or
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• Respondent Biscocho was assigned at the those employed in connection with a particular
Imperial Sky Garden from February 8, construction project or phase thereof and such
1999 to February 8, 2000. Respondent employment is coterminous with each project or
Pereda worked in the same project from phase of the project to which they are assigned.
February 8, 1999 to June 17, 2000.
Respondent Mariano (Ferdinand) also The second is known as non-project employees or
worked there from April 12, 1999 to those employed without reference to any particular
February 17, 2000. Afterwards, all of construction project or phase of a project. (regular
them were then transferred to Pacific employees)
Plaza Towers.
The second category is where respondents are
• Respondent Bellita was assigned to work classified. They are regular employees of Exodus.
at a house in Ayala Alabang from May
20, 1999 to December 4, 1999. It is clear from the records of the case that when one
Afterwards he was transferred to Pacific project is completed, respondents were
Plaza Towers. automatically transferred to the next project
awarded to Exodus. There was no employment
• Respondent Bobillo was hired and agreement given to respondents which clearly
assigned at Pacific Plaza Towers on spelled out the duration of their employment, the
March 10, 2000. specific work to be performed and that such is made
clear to them at the time of hiring. It is now too late
They were terminated allegedly because of for Exodus to claim that respondents are project
failure to report to work. They filed a complaint employees whose employment is coterminous with
for illegal dismissal, alleging that some were only each project or phase of the project to which they
orally notified of their dismissal from the service. are assigned.
Exodus contended that they were never dismissed Furthermore, a project employee may acquire the
from the service. Further, granting that they were status of a regular employee when the following
dismissed, their prolonged absences were factors concur:
tantamount to abandonment which is a valid
ground for the termination of their employment. 1. There is a continuous rehiring of project
employees even after cessation of a
Respondents argue that they are regular project; and
employees who, under the law, cannot just be
dismissed from the service without prior notice and 2. The tasks performed by the alleged
without any just or valid cause. "project employee" are vital, necessary
and indispensable to the usual business or
This case reached the SC where the court ruled trade of the employer."
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that: (1) there was no termination done, this was

unsubstantiated by the respondents; (2) Exodus In this case, the evidence on record shows that
failed to prove that there was abandonment of respondents were employed and assigned
work on the part of respondents. Hence, the SC continuously to the various projects of Exodus. As
ordered their reinstatement. painters, they performed activities which were
necessary and desirable in the usual business of
Exodus claims that reinstatement would be highly Exodus, who is engaged in subcontracting jobs for
unfair and unjust as the project was already painting of residential units, condominium and
completed by Exodus. The completion of the commercial buildings. As regular employees,
project left them with no more work to do. Having respondents are entitled to be reinstated without loss
completed their tasks, their positions automatically of seniority rights.
ceased to exist. Consequently, there were no more
positions where they can be reinstated as painters. [Doctrine]
A project employee may acquire the status of a
Issue: Are the respondents project employees? regular employee when the following factors concur:
1. There is a continuous rehiring of project

employees even after cessation of a
project; and
2. The tasks performed by the alleged

"project employee" are vital, necessary
and indispensable to the usual business or
trade of the employer."
DM Consunji v. Gobres Facts: Respondents Gobres et al., worked as No, since if the termination is brought about by the
GR No. 169170 carpenters in the construction projects of petitioner completion of the contract or phase thereof, no prior
August 8, 2010 DM Consunji on several occasions and/or at notice is required.
various times. Their termination from employment
for each project was reported to the Department In this case, respondents were not terminated for just
of Labor and Employment (DOLE). cause under Art. 282 of the LC. Dismissal based on
just causes contemplate acts or omissions attributable
Respondents’ last assignment was at Quad 4- to the employee. Instead, respondents were
Project in Glorietta where they started working on terminated due to the completion of the phases of
September 1, 1998. The Quad 4-Project at work for which their services were engaged.
Glorietta, Ayala, Makati City was estimated to
take two years to finish, but they were dismissed Records show that respondents were dismissed after
within the two-year period. They had no prior the expiration of their respective project
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notice of their termination. They just saw their employment contracts, and due to the completion of
names included in the Notice of Termination posted the phases of work respondents were engaged for.
on the bulletin board at the project premises. Hence, the cited provisions requirements of due
Hence, respondents filed a complaint with the process or prior notice when an employee is
NLRC against petitioner for illegal dismissal. dismissed prior to the completion of the project or
phase thereof do not apply in this case.
Petitioner contends that respondents, being project
employees, are covered by Policy Instruction No. Section 2 (III), Rule XXIII, Book V of the Omnibus
20, as superseded by Department Order No. 19 Rules Implementing the Labor Code provides that if
with respect to their separation or dismissal. the termination is brought about by the completion
Further, respondents were allegedly employed per of the contract or phase thereof, no prior notice is
project undertaken by petitioner and within required.
varying estimated periods indicated in their
respective project employment contracts. Citing the In the case of Cioco, Jr. vs. C.E. Construction
employment record of each respondent, petitioner Corporation, it was explained that completion of the
averred that respondents’ services were work or project automatically terminates the
terminated when their phases of work for which employment, in which case, the employer is, under
their services were engaged were completed or the law, only obliged to render a report to the DOLE
when the projects themselves were completed. on the termination of the employment.
When the case reached the CA, it ruled that Hence, prior or advance notice of termination is not
although respondents were project employees, part of procedural due process if the termination is
they were still entitled to know the reason for their brought about by the completion of the contract or
dismissal and to be heard on whatever claims they phase thereof for which the employee was engaged.
might have. Further, their right to statutory due Petitioner, therefore, did not violate any requirement
process was violated for lack of advance notice of of procedural due process by failing to give
their termination, even if they were validly respondents advance notice of their termination;
terminated for having completed the phases of thus, there is no basis for the payment of nominal
work for which they were hired. Hence, it ordered damages.
petitioner to pay respondents P20,000 each as
nominal damages for lack of advance notice of [Doctrine]
their termination. Section 2 (III), Rule XXIII, Book V of the Omnibus
Rules Implementing the Labor Code provides that if
Issue: Were respondents, as project employees, the termination is brought about by the completion
entitled to nominal damages for lack of advance of the contract or phase thereof, no prior notice is
notice of their dismissal? required.
[Extra Notes] Completion of the work or project automatically
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The Court held that the Agabon vs. NLRC case is terminates the employment, in which case, the
not applicable in the case at bar because it employer is, under the law, only obliged to render a
involved the dismissal of regular employees for report to the DOLE on the termination of the
abandonment of work, which is a just cause for employment.
dismissal under Art. 282 of the LC. Hence, the
employer therein was required to observe the
standard of due process for termination of
employment based on just cause. Since the
employer failed to comply, the Court ordered the
employer to pay the employees nominal damages
for failure to observe procedural due process.
Malicdem v. Marulas Industrial Facts: Malicdem and Flores were first hired by Yes, because they were project employees who
Corp. Marulas Industrial, who were engaged in the have been continuously rehired by the same
G.R. No. 204406 business of manufacturing sacks intended for local employer for the same tasks which are vital,
February 26, 2014 and export markets. necessary, and indispensable to the employer’s
business.
The responsibilities of the petitioners included
bagging of filament yarn, the quality of pp yarn While length of time is not the controlling test for
package and the cleanliness of the workplace project employment, it is vital in determining if the
area. Their employment contracts were for a employee was hired for a specific undertaking or
period of one (1) year. tasked to perform functions vital, necessary and
Every year thereafter, they would sign a indispensable to the usual business of trade of the
Resignation/Quitclaim in favor of Marulas a day employer.
after their contracts ended, and then sign another
contract for one (1) year. The test to determine whether employment is regular
or not is the reasonable connection between the
One day, Flores was told not to report to work particular activity performed by the employee in
and was asked to sign a paper by the HR head to relation to the usual business or trade of the
acknowledge that he completed his contractual employer. If the employee has been performing the
status. Months later, Malicdem was also terminated job for at least one year, even if the performance is
in the same manner. not continuous or merely intermittent, the law deems
the repeated and continuing need for its
Petitioners claim that they have been illegally performance as sufficient evidence of the necessity,
dismissed. Marulas claims that their contracts if not indispensability of that activity to the business.
showed that they were fixed-term employees for
a specific undertaking (to work on a particular SC ruled that there was clearly a deliberate intent
order of a customer for a specific period). The to prevent the regularization of the petitioners:
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expiration of their contracts was the cause of their

dismissal. First, there was no actual project. The only
stipulations in the contracts were the dates of their
LA ruled that there was no illegal dismissal. effectivity, the duties and responsibilities of the
However, the LA ordered Marulas to pay petitioners as extruder operators, the rights and
petitioners their respective wage differentials. obligations of the parties, and the petitioners’
compensation and allowances.
The NLRC granted petitioners’ appeal, adding the
award of payment of 13th month pay, service Second, as in the case of Maraguinot, Jr. v. NLRC, it
incentive leave and holiday pay for three (3) was ruled that a project or work pool employee,
years. who has been: (1) continuously, as opposed to
intermittently, rehired by the same employer for the
The CA ruled that there were no factual or legal same tasks or nature of tasks; and (2) those tasks
bases for the awarding of the backwages, are vital, necessary and indispensable to the usual
separation pay, damages and attorney’s fees. business or trade of the employer, must be deemed
a regular employee. Both factors are present in this
Issue: Were petitioners regular employees case.
entitled to backwages?
Thus, as regular employees, they are entitled to full
backwages and similar entitlements due to their
illegal dismissal.
[Extra Notes]
Under Article 281 of the Labor Code, “an [Doctrine]
employee who is allowed to work after a The test to determine whether employment is regular
probationary period shall be considered a regular or not is the reasonable connection between the
employee.” particular activity performed by the employee in
relation to the usual business or trade of the
When an employer renews a contract of employer. If the employee has been performing the
employment after the lapse of the six-month job for at least one year, even if the performance is
probationary period, the employee thereby not continuous or merely intermittent, the law deems
becomes a regular employee. No employer is the repeated and continuing need for its
allowed to determine indefinitely the fitness of its performance as sufficient evidence of the necessity,
employees. if not indispensability of that activity to the business.
Jamias v. NLRC Facts: Respondent Innodata Philippines, Inc., a Project employees. Art. 280 contemplates three
G.R. No. 159350 domestic corporation engaged in the business of kinds of employees, namely:
March 9, 2016 data processing and conversion for foreign clients, (a) regular employees;
hired the petitioners on various dates and under a (b) project employees; and
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project- based contract for a period of one year. (c) casuals who are neither regular nor project
employees
After their respective contracts expired, petitioners
filed a complaint for illegal dismissal claiming thatThe nature of employment of a worker is determined
Innodata had made it appear that they had been by the factors provided in Art. 280 regardless of
hired as project employees in order to prevent any stipulation in the contract to the contrary. But
them from becoming regular employees. Art. 280 does not preclude an agreement providing
for a fixed term of employment knowingly and
Petitioners maintain that they should be accorded voluntarily executed by the parties.
regular status to the employees because the work
they performed were necessary and desirable to The test to determine whether a particular employee
the business of data encoding, processing and is engaged as a project or regular employee is
conversion. Their positions were: (1) manual editor; whether or not the employee is assigned to carry out
(2) production personnel; (3) type reader; or (4) a specific project or undertaking, the duration or
data encoder. scope of which was specified at the time of his
engagement. There must be a determination of, or a
Issue: Are petitioners are regular or project clear agreement on, the completion or termination of
employees? the project at the time the employee is engaged.
Otherwise put, the fixed period of employment must

be knowingly and voluntarily agreed upon by the
[Extra Notes] parties, without any force, duress or improper
Petitioners’ argument: the nature of employment in pressure being brought to bear upon the employee
Innodata had already been settled in Villanueva v. and absent any other circumstances vitiating his
NLRC and Servidad v. NLRC whereby the Court consent, or it must satisfactorily appear that the
accorded regular status to the employees because employer and employee dealt with each other on
the work they performed were necessary and more or less equal terms with no moral dominance
desirable to the business of data encoding, whatsoever being exercised by the former on the
processing and conversion. latter.
In this case, the contracts of the petitioners indicated

SC: when the facts are essentially different, stare
the one-year duration of their engagement as well
decisis does not apply because a perfectly sound
principle as applied to one set of facts might be as their respective project assignments. There is no
entirely inappropriate when a factual variance is indication that the petitioners were made to sign the
introduced. contracts against their will. Hence, the petitioners
knowingly agreed to the terms of and voluntarily
The Servidad and Villanueva cases involved signed their respective contracts.
contracts that contained stipulations not found in
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the contracts entered by the petitioners. The petitioners could not presume that the fixing of
the one-year term was intended to evade or avoid
the protection to tenure under Article 280 of the
Labor Code in the absence of other evidence
establishing such intention. This presumption must
ordinarily be based on some aspect of the
agreement other than the mere specification of the
fixed term of the employment agreement, or on
evidence aliunde of the intent to evade.
[Doctrine]
Art. 280 does not preclude an agreement providing
for a fixed term of employment knowingly and
voluntarily executed by the parties.
A presumption of intent to evade or avoid the

protection of tenure under Art. 280 of the Labor
Code must be based on some aspect of the
agreement other than the mere specification of the
fixed term of the employment agreement, or on
evidence of intent to evade.
Herma Shipyard, Inc. v. Esguerra Facts: Herma Shipyard, Inc. is a domestic They were project employees.
G.R. No. 208936 corporation engaged in the business of
April 17, 2017 shipbuilding and repair. The respondents were its The principal test in determining whether particular
employees occupying various positions such as employees were engaged as project-based
welder, leadman, pipe fitter, laborer, helper, etc. employees, as distinguished from regular employees,
Respondents filed a complaint for illegal dismissal, is whether they were assigned to carry out a specific
regularization with a prayer for the payment of project or undertaking, the duration and scope of
full back wages against petitioners. They alleged which was specified at, and made known to them, at
that they are regular employees who have been the time of their engagement. It is crucial that the
continuously performing tasks usually necessary employees were informed of their status as project
and desirable in its business. employees at the time of hiring and that the period
of their employment must be knowingly and
They allege that as a condition to their continuous voluntarily agreed upon by the parties, without any
and uninterrupted employment, petitioners made force, duress, or improper pressure being brought to
them sign employment contracts for a fixed period bear upon the employees or any other circumstances
ranging from one to four months to make it vitiating their consent.
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appear that they were project-based employees.

They claim that this scheme to defeat their right to The records of this case reveal that for each and
security of tenure, but in truth there was never a every project respondents were hired, they were
time when they ceased working for Henna adequately informed of their employment status as
Shipyard due to expiration of project-based project--based employees at least at the time they
employment contracts. signed their employment contract They were fully
apprised of the nature and scope of their work
Petitioners argued that respondents were its whenever they affixed their signature to their
project-based employees in its shipbuilding employment contract. Their contracts of employment
projects and that the specific project for which they (mostly written in the vernacular) provide in no
were hired had already been completed. In uncertain terms that they were hired as project-
support, thereof, Herma Shipyard presented based employees whose services are coterminous
contracts of employment, some of which are with the completion of the specific task indicated
written in the vernacular and denominated as therein. All their contracts of employment state
Kasuduang Paglilingkod (Pang-Proyektong clearly the date of the commencement of the specific
Kawani). task and the expected completion date thereof.
They also contain a provision expressly stating that
Issue: Are respondents project-based employees respondents' employment shall end upon the arrival
or regular employees? of the target completion date or upon the completion
of such project
It is settled, however, that project-based employees

may or may not be performing tasks usually
of the employer.
The fact that the job is usually necessary or

desirable in the business operation of the employer
does not automatically imply regular employment;
neither does it impair the validity of the project
employment contract stipulating fixed duration of
employment.
The CA erred in disregarding the project

employment contracts and in concluding that
respondents have become regular employees
because they were performing tasks necessary and
desirable to the business of Henna Shipyard and
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were repeatedly rehired.
The Labor Arbiter and the NLRC, which have

expertise in their specific and specialized jurisdiction,
did not err, much less commit grave abuse of
discretion in holding that respondents were project-
based employees. Their uniform conclusion is
supported by substantial evidence and should,
therefore, be accorded not only respect, but even
finality.
[Doctrine]
It is settled, however, that project-based employees
may or may not be performing tasks usually
of the employer.
The fact that the job is usually necessary or

desirable in the business operation of the employer
does not automatically imply regular employment;
neither does it impair the validity of the project
employment contract stipulating fixed duration of
employment.
Seasonal Employees
Benares v. Pancho Facts: Respondent Hacienda Maasin II is a sugar Yes, they are regular employees. The law
G.R. NO. 151827 cane plantation planted, owned, and managed by provides for three kinds of employees: (1) regular
April 29, 2005 Josefina Benares. employees or those who have been engaged to
perform activities which are usually necessary or
Complainants thru counsel wrote a letter to the desirable in the usual business or trade of the
Regional Director of the DOLE – Bacolod for employer; (2) project employees or those whose
intercession particularly in the matter of wages and employment has been fixed for a specific project or
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other benefits mandated by law. After a routine undertaking, the completion or termination of which
inspection was made, a report and recommendation has been determined at the time of the
was submitted endorsing the case to the Regional engagement of the employee or where the work or
Arbitration Branch NLRC Bacolod for proper hearing service to be performed is seasonal in nature and
and disposition. the employment is for the duration of the season;
and (3) casual employees or those who are neither
Complainants alleged to have been terminated regular nor project employees.
without being paid termination benefits by Benares
in retaliation to what they have done in reporting to Citing jurisprudence, the Court, in Hacienda Fatima,
the DOLE their working conditions vis-à-vis wages condensed the rule that the primary standard for
and other mandatory benefits. They filed a determining regular employment is the reasonable
complaint for illegal dismissal. connection between the particular activity
performed by the employee vis-a-vis the usual
The NLRC held that respondents attained the status trade or business of the employer. This connection
of regular seasonal workers of Had. Maasin II can be determined by considering the nature of the
having worked therein from 1964-1985. The CA work performed and its relation to the scheme of
affirmed the NLRC’s decision with the modification the particular business or trade in its entirety.
that the backwages and other monetary benefits
shall be computed from the time the compensation If the employee has been performing the job for at
was withheld in accordance with Article 279 of the least a year, even if the performance is not
labor Code, as amended by R.A. No. 6715. continuous and merely intermittent, the law deems
repeated and continuing need for its performance
Petitioner argues that respondents were not her as sufficient evidence of the necessity if not
regular employees as they were merely "pakiao" indispensability of that activity to the business.
workers who did not work continuously in the sugar Hence, the employment is considered regular, but
plantation. They performed such tasks as weeding, only with respect to such activity and while such
cutting and loading canes, planting cane points, activity exists.
fertilizing, cleaning the drainage, etc. These functions
allegedly do not require respondents' daily The labor arbiter, the NLRC and the Court of
presence in the sugarcane field as it is not every day Appeals have similarly held that respondents were
that one weeds, cuts canes or applies fertilizer. In regular employees of petitioner. Factual findings of
support of her allegations, petitioner submitted quasi-judicial agencies which have acquired
"cultivo" and milling payrolls. expertise in the matters entrusted to their
jurisdiction are accorded by this Court not only
Issues: Are respondents regular employees of respect but even finality.
Hacienda Maasin II and thus entitled to monetary
claims? [Doctrine]
The primary standard for determining regular
employment is the reasonable connection between
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the particular activity performed by the employee

[Extra Notes] vis-a-vis the usual trade or business of the
They were also found to be illegally dismissed as the employer. This connection can be determined by
burden of the employer to prove that termination considering the nature of the work performed and
was for a just or authorized cause was not its relation to the scheme of the particular business
discharged in this case. or trade in its entirety.
If the employee has been performing the job for at

least a year, even if the performance is not
continuous and merely intermittent, the law deems
repeated and continuing need for its performance
as sufficient evidence of the necessity if not
indispensability of that activity to the business.
Hence, the employment is considered regular, but
only with respect to such activity and while such
activity exists.
Hacienda Bino/Hortencia Starke FACTS: Hacienda Bino is a 236-hectare sugar RULING: No, the farmworkers here are REGULAR
v. Cuenca plantation located at Barangay Orong, Kabankalan EMPLOYEES.
G.R. NO. 150478 City, Negros Occidental, and represented in this
April 15, 2005 case by Hortencia L. Starke, owner and operator of In ruling the case in favor the respondent (farm
the said hacienda. wokers), the SC look into the given facts of the case.
TOPIC: Seasonal Employees The 76 individual respondents were part of the ➢ The disparity in facts between the Mercado
workforce of Hacienda Bino consisting of 220 case and the instant case is best
workers, performing various works, such as exemplified by the fact that the former
cultivation, planting of cane points, fertilization, decision ruled on the status of employment
watering, weeding, harvesting, and loading of of farm laborers, who, as found by the
harvested sugarcanes to cargo trucks. labor arbiter, work only for a definite
period for a farm worker, after which they
During off-milling season, petitioner issued an order offer their services to other farm owners,
that 76 employees who signed the CARP will no considering the area in question being
longer be given a job to the farm because they have comparatively small, comprising of
exercised their claim to the petitioner’s land through seventeen and a half (17') hectares of
agrarian reform program. Incidentally, the workers land, such that the planting of rice and
filed an illegal dismissal before LA where the arbiter sugar cane thereon could not possibly entail
ruled that they were regular employee being a whole year operation. The herein case
necessary to the nature of the business of petitioner. presents a different factual condition as the
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enormity of the size of the sugar hacienda

Petitioner invoked the doctrine of Manalo Sr. v. of petitioner, with an area of two hundred
NLRC, where the SC ruled that farm workers in the thirty-six (236) hectares, simply do not
given set of facts and issue were declared seasonal allow for private respondents to render
employee and not regular employee. work only for a definite period.
Thereafter, NLRC and CA affirmed the decision of The SC also opined the following:
LA. ➢ The primary standard for determining
regular employment is the reasonable
ISSSUE: Whether the farm workers here are connection between the particular activity
seasonal employee? performed by the employee in relation to
the usual trade or business of the employer.
There is no doubt that the respondents
were performing work necessary and
desirable in the usual trade or business of
an employer. Hence, they can properly be
classified as regular employees.
Also, there is no proof that there was repeated

hiring on the part of the Petitioners. With the
burden of proof lies on the Petitioner, she failed to
overcome the presumption of regularity of the
farmworkers here.
Universal Robina Sugar Milling FACTS: RULING: The SC ruled that respondents are
Corp. v. Acibo Respondents were hired on various dates (between REGULAR SEASONAL EMPLOYEE.
G.R. No. 186439 February 1988 and April 1996) and on different
January 15, 2014 capacities i.e., drivers, crane operators, bucket Accordingly, the court stated that, although the
hookers, welders, mechanics, laboratory attendants seasonal employment arrangement involves work
TOPIC: Regular Seasonal and aides, steel workers, laborers, carpenters and that is seasonal or periodic in nature, the
Employee masons, among others. At the start of their respective employment itself is not automatically considered
engagements, the complainants signed contracts of seasonal so as to prevent the employee from
employment for a period of one (1) month or for a attaining regular status.
given season. URSUMCO repeatedly hired the
complainants to perform the same duties and, for To exclude the asserted "seasonal" employee from
every engagement, required the latter to sign new those classified as regular employees, the employer
employment contracts for the same duration of one must show that: (1) the employee must be
month or a given season. performing work or services that are seasonal in
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nature; and (2) he had been employed for the

Respondent claimed the benefits of the regular duration of the season
employee under the CBA. Petitioner contested the
status of the respondent being seasonal employee. Hence, when the "seasonal" workers are
continuously and repeatedly hired to perform the
ISSUE: Whether the respondent is a Regular or same tasks or activities for several seasons or even
Seasonal Employee? after the cessation of the season, this length of time
may likewise serve as badge of regular
employment. The law simply considers these
seasonal workers on leave until re-employed.
In this case, petitioner failed to meet the above test

because of the following:
➢ First, the respondents were made to

perform various tasks that did not at all
pertain to any specific phase of
URSUMCO’s strict milling operations that
would ultimately cease upon completion of
a particular phase in the milling of sugar;
rather, they were tasked to perform duties
regularly and habitually needed in
URSUMCO’s operations during the milling
season.
➢ Second, the respondents were regularly

and repeatedly hired to perform the same
tasks year after year. This regular and
repeated hiring of the same workers (two
different sets) for two separate seasons has
put in place, principally through
jurisprudence, the system of regular
seasonal employment in the sugar industry
and other industries with a similar nature of
operations.
Hence, Respondents were not Seasonal Employee,

but Regular Seasonal worker entitled to the benefit
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of CBA.
Gapayao v. Fulo FACTS: This case involved the death of Jaime Fulo, RULING: Yes there was an ER-EE relationship in this
G.R. No. 193493 the husband of private respondent. The cause of case. Accordingly, the SC held the deceased Jaime
June 13, 2013 death was electrocution. Incidentally, a compromise Fulo is a regular seasonal worker.
agreement was entered into by the parties. The
TOPIC: Regular Seasonal clause of the agreement provides for waiver of a Farm workers generally fall under the definition of
Employee criminal and civil case. Thereafter, Respondent went seasonal employees. We have consistently held that
to SSS to claim the contribution of her husband. seasonal employees may be considered as regular
Unfortunately, she found out that there was no employees. Regular seasonal employees are those
record nor contribution remitted by the petitioner. called to work from time to time. The nature of their
Hence, SSC investigated and concluded that indeed, relationship with the employer is such that during
the deceased employee was a seasonal worker of the off season, they are temporarily laid off; but
the petitioner. An order of payment of the reemployed during the summer season or when
contribution was sent to the petitioner. Which the their services may be needed. They are in regular
latter argued that the deceased was not her employment because of the nature of their job, and
employee and that she cannot be compelled to pay not because of the length of time they have
the contribution. CA affirmed the ruling of SSS. worked.
Hence this present case.
The primary standard, therefore, of determining a
ISSUE: Whether there was an employee employer regular employment is the reasonable connection
relationship in this case? between the particular activity performed by the
employee in relation to the usual business or trade
of the employer. The test is whether the former is
or trade of the employer.
A reading of the records reveals that the deceased

was indeed a farm worker who was in the regular
employ of petitioner. From year to year, starting
January 1983 up until his death, the deceased had
been working on petitioner’s land by harvesting
abaca and coconut, processing copra, and clearing
weeds. His employment was continuous in the sense
that it was done for more than one harvesting
season. Moreover, no amount of reasoning could
detract from the fact that these tasks were
necessary or desirable in the usual business of
- 147 -
petitioner
HENCE, Deceased Jaime Fulo is Regular Seasonal

Worker.
Magis Young Achievers’ Learning FACTS: This case stemmed from a resignation of RULING: The probationary period of respondent
Center v. Manalo probationary principal of the petitioner’s school. was 3 years contrary to the argument of petitioner.
G.R. No. 178835 Accordingly, the resignation as Principal was Accordingly, the SC ruled into the nature of the
February 13, 2009 accepted; however, the Board of Director of the employment to wit:
Petitioner terminated the respondent as a teacher of
Topic: Probationary Employment the institution. Incidentally, she filed an illegal For "academic personnel" in private schools,
dismissal before the LA. She invoked that petitioner colleges and universities, probationary employment
cannot terminate her because what she resigned for is governed by Section 92 of the 1992 Manual of
was her principal position and her teaching position. Regulations for Private Schools15 (Manual), which
Hence, the probationary period of 3 years in reads:
private school should subsist. Petitioner argued that
according to her contract, the probationary period Section 92. Probationary Period. – Subject in all
has already lapsed (from April 1, 2002 to March 3, instances to compliance with the Department and
2003). school requirements, the probationary period for
academic personnel shall not be more than three (3)
LA ruled in favor of petitioner. consecutive years of satisfactory service for those in
NLRC and CA ruled in favor of Respondent. the elementary and secondary levels, six (6)
Hence this present case consecutive regular semesters of satisfactory service
for those in the tertiary level, and nine (9)
ISSUE: Whether Respondent probationary consecutive trimesters of satisfactory service for
employment have already lapsed albeit no relief those in the tertiary level where collegiate courses
should have been granted to her by the CA. are offered on a trimester basis
It is important that the contract of probationary

employment specify the period or term of its
effectivity. The failure to stipulate its precise
duration could lead to the inference that the
contract is binding for the full three-year
probationary period
In this case, respondent was terminated even though

she has not yet completed her probationary period.
Accordingly, the evidence of 1 year probationary
- 148 -
contract was tainted with doubt. Hence, Article

1702 provides that in case of doubt, it should be
resolved in favor of the labor.
St. Mary’s University v. CA FACTS: Private Respondent Marcelo Donelo started RULING: Private respondent was not a regular.
G.R. NO. 157788 teaching on a contractual basis at St. Mary's Accordingly, the SC reiterated the argument of LA
March 08, 2005 University in 1992. In 1995, he was issued an to wit:
appointment as an Assistant Professor I. Later on, he
was promoted to Assistant Professor III. He taught Section 45 of the 1992 Manual of Regulations for
TOPIC: Probationary Employment until the first semester of school year 1999-2000 Private Schools provides that full-time academic
in Private Schools when the school discontinued giving him teaching personnel are those meeting all the following
assignments. For this, respondent filed a complaint requirements:
for illegal dismissal against the university. XXX
e. Who are not teaching full-time in any
Petitioner on the other hand argued that respondent other educational institution.
only taught twice with more than 18 units. Hence, All teaching personnel who do not meet the
most of his rendered service, his status was merely a foregoing qualifications are considered
part-time employee. LA ruled in favore of the part-time
Petitioner:
A perusal of the various orders of the then
The Labor Arbiter held that only full-time teachers Department of Education, Culture and Sports
with regular loads of at least 18 units, who have prescribing teaching loads shows that the regular
satisfactorily completed three consecutive years of full-time load of a faculty member is in the range
service qualify as permanent or regular employees of 15 units to 24 units a semester or term,
depending on the courses taught. Part-time
NLRC and CA reversed the decision of LA and held instructors carry a load of not more than 12 units.
the private respondent has already attained regular
status. The evidence on record reveals that, except for
four non-consecutive terms, respondent generally
ISSUE: Whether Private respondent was a regular carried a load of twelve units or less from 1992 to
employee. 1999. There is also no evidence that he performed
other functions for the school when not teaching.
These give the impression that he was merely a
part-time teacher.
Since there is no showing that respondent worked

on a full-time basis for at least three years, he
could not have acquired a permanent status.
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Mercado v. AMA Computer FACTS: This case involves a fixed term contract of RULING: Petitioners were not validly dismissed. The
College teaching load of the Petitioners which started on SC discussed the concept of “FIXED TERM
G.R. No. 183572 May 25, 1998. Accordingly the clause provides: EMPLOYEE WHICH OVERLAPS THE
April 13, 2010 PROBATIONARY PERIOD OF ART. 281 OF LC”
➢ POSITION. The TEACHER has agreed to
accept a non-tenured appointment to work ➢ The school, however, cannot forget that its
TOPIC: Fixed Term Employee in the College of xxx effective xxx to xxx system of fixed-term contract is a system
overlapping the Probationary or for the duration of the last term that the that operates during the probationary
period of LC. TEACHER is given a teaching load based on period and for this reason is subject to
the assignment duly approved by the the terms of Article 281 of the Labor
DEAN/SAVP-COO. Code. Unless this reconciliation is made,
the requirements of this Article on
Incidentally, the contract was terminated because the probationary status would be fully
petitioners failed to meet the standard score of negated as the school may freely choose
performance evaluation. Which was presented to not to renew contracts simply because
her on SY 2000-2001. their terms have expired. The inevitable
effect of course is to wreck the scheme
Petitioners argued that they were illegally dismissed. that the Constitution and the Labor Code
LA – Ruled that they were illegally dimissed on the established to balance relationships
ground of Art. 281 of LC between labor and management.
NLRC – Ruled that the rule on private school should Given the clear constitutional and statutory
apply (3 year probationary period) intents, we cannot but conclude that in a situation
where the probationary status overlaps with a
➢ Despite this observation, the NLRC affirmed fixed-term contract not specifically used for the
the LA's finding of illegal dismissal since the fixed term it offers, Article 281 should assume
petitioners were terminated on the basis of primacy and the fixed-period character of the
standards that were only introduced near contract must give way.
the end of their probationary period.
If the school were to apply the probationary
The NLRC ruled that the new screening standards (as in fact it says it did in the present
guidelines for the school year 2000-20001 case), these standards must not only be reasonable
cannot be imposed on the petitioners and but must have also been communicated to the
their employment contracts since the new teachers at the start of the probationary period, or
guidelines were not imposed when the at the very least, at the start of the period when
petitioners were first employed in 1998. they were to be applied. These terms, in addition to
According to the NLRC, the imposition of the those expressly provided by the Labor Code,
new guidelines violates Section 6(d) of Rule would serve as the just cause for the termination of
- 150 -
I, Book VI of the Implementing Rules of the the probationary contract. As explained above, the
Labor Code, which provides that "in all details of this finding of just cause must be
cases of probationary employment, the communicated to the affected teachers as a matter
employer shall make known to the of due process.
employee the standards under which he will Hence in this case, the probationary condition was
qualify as a regular employee at the time not given to the petitioner prior to the stipulation of
of his engagement. the contract.
CA – Reversed and state that probationary period is

applicable.
Hence this case.
ISSUE: Whether the Petitioners were validly

dismissed?
Colegio del Santisimo Rosario v. FACTS: Petitioner Colegio del Santisimo Rosario RULING: No, the CA did not acted with grave
Rojo (CSR) hired respondent as a high school teacher on abuse of discretion.
G.R. No. 170388 probationary basis for the school years 1992-1993,
September 04, 2013 1993-19947 and 1994-1995. In Mercado v. AMA Computer College-Paraque
City, Inc.,we had occasion to rule that cases dealing
TOPIC: Probationary Employee CSR, through petitioner Sr. Zenaida S. Mofada, OP with employment on probationary status of teaching
(Mofada), decided not to renew respondent’s personnel are not governed solely by the Labor
services Code as the law is supplemented, with respect to
the period of probation, by special rules found in
Respondent filed a Complaint10 for illegal dismissal. the Manual of Regulations for Private Schools (the
He alleged that since he had served three Manual).
consecutive school years which is the maximum
number of terms allowed for probationary With regard to the probationary period, Section
employment, he should be extended permanent 92 of the 1992 Manual provides
employment. Citing paragraph 75 of the 1970
Manual of Regulations for Private Schools (1970 Section 92. Probationary Period. Subject in all
Manual), respondent asserted that “full- time instances to compliance with the Department and
teachers who have rendered three (3) consecutive school requirements, the probationary period for
years of satisfactory services shall be considered academic personnel shall not be more than three (3)
permanent. consecutive years of satisfactory service for those in
the elementary and secondary levels, six (6)
On the other hand, Petitioner argued that consecutive regular semesters of satisfactory service
probationary period under the cited law was 36 for those in the tertiary level, and nine (9)
- 151 -
months. Also petitioner argued that it did not consecutive trimesters of satisfactory service for
dismissed the respondent, rather his probationary those in the tertiary level where collegiate courses
contract merely expired and was not renewed are offered on a trimester basis.
From LA to CA, the decision was in favor of However, this scheme "of fixed-term contract is a
respondent. It was also cited that the 3 consecutive system that operates during the probationary
year of probation in private school is should be the period and for this reason is subject to Article 281
school year. of the Labor Code," which provides-
x x x The services of an employee who has been

ISSUE: Whether CA erred in declaring that there engaged on a probationary basis may be
was an illegal dismissal in this case? terminated for a just cause or when he fails to
qualify as a regular employee in accordance with
reasonable standards made known by the
employer to the employee at the time of his
engagement. An employee who is allowed to work
after a probationary period shall be considered a
regular employee.
Hence, Respondent was illegally dismissed.
Conditional Employees
Sagun v. ANZ Global Services FACTS: In this case, petitioner was an employee of RULING: Yes, he was validly dismissed because his
and Operations HSBC when he applied and later on hired by the employment was subject to employment condition
G.R. No. 220399 Respondent. He was hired as Customer Service which is “background investigation”.
August 22, 2016 Officer. However his employment was subject to
several condition which includes background The SC stated that: In this case, the Court agrees
investigation. When he tendered his resignation to with the finding of the CA that there was already a
HSBC, and went back to ANZ, to submit his pre- perfected contract of employment when petitioner
employment requirements, he found out that his signed ANZ's employment offer and agreed to the
contract was withdrew because of the material terms and conditions that were embodied therein.
inconsistencies to the information he submitted to the Nonetheless, the offer of employment extended to
ANZ. This includes his position to his former company. petitioner contained several conditions before he
may be deemed an employee of ANZ. Among
- 152 -
Asserting that his employment contract had already those conditions for employment was the
been perfected upon his acceptance of the offer on "satisfactory completion of any checks (e.g.
June 8, 2011, and as such, was already deemed an background, bankruptcy, sanctions and reference
employee of ANZ who can only be dismissed for checks) that may be required by ANZ."
cause, petitioner filed a complaint for illegal Accordingly, petitioner's employment with ANZ
dismissal with money claims against ANZ, Cruzada, depended on the outcome of his background check,
and Alcaraz (respondents) before the NLRC. which partakes of the nature of a suspensive
condition, and hence, renders the obligation of the
From LA to CA, the court ruled that there was would-be employer, i.e., ANZ in this case,
Employee-Employer relationship since his conditional
employment was still subject for condition.
Here, the subject employment contract required a
ISSUE: Whether the petitioner was validly dismissed? satisfactory completion of petitioner's background
check before he may be deemed an employee of
ANZ. Considering, however, that petitioner failed to
explain the discrepancies in his declared
information and documents that were required from
him relative to his work experience at Siemens,
namely: (a) that he was only a Level 1 and not a
Level 2 Technical Support Representative that
conducts troubleshooting for both computer
hardware and software problems; and (b) that he
was found to have been terminated for cause and
not merely resigned from his post, that rendered his
background check unsatisfactory, ANZ's obligations
as a would-be employer were held in suspense and
thus, had yet to acquire any obligatory force. 45
To reiterate, in a contract with a suspensive
condition, if the condition does not happen, the
obligation does not come into effect. Thus, until and
unless petitioner complied with the satisfactory
background check, there exists no obligation on the
part of ANZ to recognize and fully accord him the
rights under the employment contract. In fact,
records also show that petitioner failed to report
for work on or before July 11, 2011, which was
also a suspensive condition mandated under sub-
paragraph 4 of Schedule 1 of the contract.
- 153 -
Consequently, no employer-employee relationship

was said to have been created between petitioner
and ANZ under the circumstances, and the dismissal
of the farmer's complaint for illegal termination
from work, as held by the NLRC, was correctly
sustained by the CA.
- 154 -
RIGHT TO SELF-ORGANIZATION
Concept and Scope
Philippine Constitution, Art. III, Sec. 8; Art. XIII, Sec. 3
Labor Code: Arts. 218, 219, 290
Labor Code: Arts. 253; 257; 292 (c); 219 (e, f)
Omnibus Rules, Book V, Rule I to Rule II, as amended by D.O. 40, series of 2003

S.S. Ventures International v. S.S Facts: No, the Union’s registration should not be
Ventures Labor Union Ventures is a PEZA-registered export firm with cancelled. The evidence presented by Ventures
GR No. 161690 principal place of business at Bataan Export Zone, which were mostly undated written statements
July 3, 2008 Mariveles, Bataan. On the other hand, S.S. Ventures submitted by Ventures on March 20, 2001, or seven
Labor Union (Union) is a labor organization months after it filed its petition for cancellation of
registered with the DOLE under Certificate of registration, partake of the nature of withdrawal of
Registration No. RO300-00-02-UR-0003. union membership executed after the Union's filing
of a petition for certification election on March 21,
On March 21, 2000, the Union filed with DOLE- 2000. We have already ruled before that the
Region III a petition for certification election in employees' withdrawal from a labor union made
behalf of the rank-and-file employees of Ventures. before the filing of the petition for certification
On August 21, 2000, Ventures filed a Petition to election is presumed voluntary, while withdrawal
cancel the Union's certificate of registration based after the filing of such petition is considered to be
on the grounds set forth in Art. 239(a) of the Labor involuntary and does not affect the same. Since a
Code: withdrawal from union membership done after a
petition for certification election has been filed does
(1) The Union deliberately and maliciously included not vitiate such petition, is it not but logical to
the names of more or less 82 former employees no assume that such withdrawal cannot work to nullify
longer connected with Ventures in its list of members the registration of the union. This Court rules that the
who attended the organizational meeting and in the affidavits of retraction of the 82 members had no
adoption/ratification of its constitution and by-laws; evidentiary weight.
and the Union forged the signatures of these 82
former employees to make it appear they took part Moreover, after a labor organization has filed the
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in the organizational meeting and adoption and necessary registration documents, it becomes
ratification of the constitution; mandatory for the BLR to check if the requirements
(2) The Union maliciously twice entered the under Art. 234 of the Labor Code have been
signatures of three persons namely: Mara Santos, sedulously complied with. If the union's application is
Raymond Balangbang, and Karen Agunos; infected by falsification and like serious
(3) No organizational meeting and ratification irregularities, especially those appearing on the
actually took place; and face of the application and its attachments, a union
(4) The Union's application for registration was not
should be denied recognition as a legitimate labor
supported by at least 20% of the rank-and-file organization. Prescinding from these considerations,
employees of Ventures. the issuance to the Union of Certificate of
Registration No. RO300-00-02-UR-0003
In its supplemental reply memorandum filed on necessarily implies that its application for
March 20, 2001, Ventures cited other instances of registration and the supporting documents thereof
fraud and misrepresentation, claiming that the are prima facie free from any vitiating irregularities.
"affidavits" executed by 82 alleged Union members
show that they were deceived into signing paper As to the inclusion of 82 individuals to the list of
minutes or were harassed to signing their participants in the January 9, 2000 organizational
attendance in the organizational meeting. Ventures meeting, Ventures submits that the 82, being no
added that some employees signed the "affidavits" longer connected with the company, should not have
denying having attended such meeting. been counted as attendees in the meeting and the
ratification proceedings immediately afterwards.
Issue: The assailed inclusion of the said 82 individuals to
Should the registration of the Union be cancelled? the meeting and proceedings adverted to is not
really fatal to the Union's cause for the allegations
of falsification of signatures or misrepresentation
with respect to these individuals are without
basis. The Court need not delve into the question of
whether these 82 dismissed individuals were still
Union members qualified to vote and affix their
signature on its application for registration and
supporting documents. Suffice it to say that, the
procedure for acquiring or losing union membership
and the determination of who are qualified or
disqualified to be members are matters internal to
the union and flow from its right to self-
organization.
Lastly, the relevancy of the 82 individuals' active
- 156 -
participation in the Union's organizational meeting

and the signing ceremonies thereafter comes in only
for purposes of determining whether or not the
Union, even without the 82, would still meet what
Art. 234(c) of the Labor Code requires to be
submitted.
In its union records on file with this Bureau,

respondent union submitted the names of 542
members. This number easily complied with the 20%
requirement, be it 1,928 or 2,202 employees in the
establishment. Even subtracting the 82 employees
from 542 leaves 460 union members, still within
440 or 20% of the maximum total of 2,202 rank-
and-file employees.
Whatever misgivings the Ventures may have with

regard to the 82 dismissed employees is better
addressed in the inclusion-exclusion proceedings
during a pre-election conference. The issue
surrounding the involvement of the 82 employees is
a matter of membership or voter eligibility. It is not
a ground to cancel union registration.
[Doctrine]
The right to form, join, or assist a union is specifically
protected by Art. XIII, Section 3 of the Constitution
and such right, according to Art. III, Sec. 8 of the
Constitution and Art. 246 of the Labor Code, shall
not be abridged. Once registered with the DOLE, a
union is considered a legitimate labor organization
endowed with the right and privileges granted by
law to such organization. While a certificate of
registration confers a union with legitimacy with the
concomitant right to participate in or ask for
certification election in a bargaining unit, the
registration may be canceled or the union may be
decertified as the bargaining unit, in which case the
- 157 -
union is divested of the status of a legitimate labor

organization. Among the grounds for cancellation is
the commission of any of the acts enumerated in Art.
239(a) of the Labor Code, such as fraud and
misrepresentation in connection with the adoption or
ratification of the union's constitution and like
documents. To decertify a union, it is not enough to
show that the union includes ineligible employees in
its membership. It must also be shown that there was
misrepresentation, false statement, or fraud in
connection with the application for registration and
the supporting documents, such as the adoption or
ratification of the constitution and by-laws or
amendments thereto and the minutes of ratification
of the constitution or by-laws, among other
documents.
NUWHRAIN-Manila Pavilion Facts: Yes, employees on probationary status at the

Hotel Chapter v. Secretary A certification election was conducted among the time of the certification elections are allowed to
G.R. No. 181531 rank-and-file employees of Holiday Inn Manila vote.
July 31, 2009 Pavilion Hotel (the Hotel) with the following results:
EMPLOYEES IN VOTERS’ LIST = 353 [Doctrine]
In a certification election, all rank and file
TOTAL VOTES CAST = 346 employees in the appropriate bargaining unit,
whether probationary or permanent are entitled to
NUWHRAIN-MPHC = 151 vote. This principle is clearly stated in Art. 255 of
the Labor Code which states that the "labor
HIMPHLU = 169 organization designated or selected by the majority
of the employees in an appropriate bargaining unit
NO UNION = 1
shall be the exclusive representative of the
SPOILED = 3 employees in such unit for purposes of collective
bargaining." Collective bargaining covers all
SEGREGATED = 22 aspects of the employment relation and the
resultant CBA negotiated by the certified union
In view of the significant number of segregated binds all employees in the bargaining unit. Hence,
votes, the contending unions, NUWHRAIN-MPHC all rank and file employees, probationary or
and HIMPHLU referred the case back to Med- permanent, have a substantial interest in the
Arbiter Calabocal to decide which among those selection of the bargaining representative. The
votes would be opened and tallied. Six other votes
- 158 -
were segregated because the employees who cast Code makes no distinction as to their employment
them were already occupying supervisory status as basis for eligibility in supporting the
positions at the time of the election. Still five other petition for certification election. The law refers to
votes were segregated on the ground that they "all" the employees in the bargaining unit. All they
were cast by probationary employees and, need to be eligible to support the petition is to
pursuant to the existing Collective Bargaining belong to the "bargaining unit."
Agreement (CBA), such employees cannot vote.
Moreover, Rule II, Sec. 2 of Department Order No.
Issue: 40-03, series of 2003 provides:
Are employees on probationary status at the time of
the certification elections allowed to vote? Section 2. Who may join labor unions and workers'
associations. - All persons employed in commercial,
industrial and agricultural enterprises, including
employees of government owned or controlled
corporations without original charters established
under the Corporation Code, as well as employees
of 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 unions for purposes of collective
bargaining… For purposes of this section, any
employee, whether employed for a definite period
or not, shall beginning on the first day of his/her
service, be eligible for membership in any labor
organization.
The provision in the CBA disqualifying probationary

employees from voting cannot override the
Constitutionally-protected right of workers to self-
organization, as well as the provisions of the Labor
Code and its Implementing Rules on certification
elections and jurisprudence thereon.
A law is read into, and forms part of, a contract.

Provisions in a contract are valid only if they are not
contrary to law, morals, good customs, public order
or public policy.
- 159 -
In addition, the following relevant sections in Rule XI

provides:
Section 5. Qualification of voters; inclusion-exclusion.

- All employees who are members of the
appropriate bargaining unit sought to be
represented by the petitioner at the time of the
issuance of the order granting the conduct of a
certification election shall be eligible to vote…
xxx
Section 13. Order/Decision on the petition. - Within

ten (10) days from the date of the last hearing, the
Med-Arbiter shall issue a formal order granting the
petition or a decision denying the same…
xxx
Section 21. Decision of the Secretary. - The

Secretary shall have fifteen (15) days from receipt
of the entire records of the petition within which to
decide the appeal. The filing of the memorandum of
appeal from the order or decision of the Med-
Arbiter stays the holding of any certification
election.
The decision of the Secretary shall become final and

executory after ten (10) days from receipt thereof
by the parties. No motion for reconsideration of the
decision shall be entertained.
In light of the immediately-quoted provisions, and

prescinding from the principle that all employees
are, from the first day of their employment, eligible
for membership in a labor organization, it is evident
that the period of reckoning in determining who
shall be included in the list of eligible voters is, in
- 160 -
cases where a timely appeal has been

filed from the Order of the Med-Arbiter, the date
when the Order of the SOLE, whether affirming or
denying the appeal, becomes final and executory.
During the pendency of the appeal, the employer

may hire additional employees. To exclude the
employees hired after the issuance of the Med-
Arbiter’s Order but before the appeal has been
resolved would violate the guarantee that every
employee has the right to be part of a labor
organization from the first day of their service.
In the present case, records show that the

probationary employees were included in the list of
employees in the bargaining unit submitted by the
Hotel on May 25, 2006 in compliance with the
directive of the Med-Arbiter after the appeal and
subsequent motion for reconsideration have been
denied by the SOLE, rendering the Med-Arbiter’s
August 22, 2005 Order final and executory 10
days after the March 22, 2007 Resolution (denying
the motion for reconsideration of the January 22
Order denying the appeal), and rightly so. Because,
for purposes of self-organization, those employees
are, in light of the discussion above, deemed
eligible to vote.
Even if the Implementing Rules gives the SOLE 20

days to decide the appeal from the Order of the
Med-Arbiter, experience shows that it sometimes
takes months to be resolved. To rule then that only
those employees hired as of the date of the
issuance of the Med-Arbiter’s Order are qualified
to vote would effectively disenfranchise employees
hired during the pendency of the appeal. More
importantly, reckoning the date of the issuance of
the Med-Arbiter’s Order as the cut-off date would
- 161 -
render inutile the remedy of appeal to the

SOLE.1av
Samahan ng Manggagawa sa Facts: Yes, the right to form a workers' association is not
Hanjin Shipyard v. BLR Samahan, through its authorized representative, exclusive to ambulant, intermittent and itinerant
G.R. No. 211145 Alfie Alipio, filed an application for registration of workers.
October 14, 2015 its name "Samahan ng Mga Manggagawa sa Hanjin
Shipyard" with the DOLE. The DOLE Regional Office Expressed in the highest law of the land is the right
No. 3 (DOLE-Pampanga), issued the corresponding of all workers to self-organization.
certificate of registration in favor of Samahan.
Hanjin filed a petition7 with DOLE-Pampanga Section 3, Article XIII of the 1987 Constitution states:
praying for the cancellation of registration of Section 3. … It shall guarantee the rights of all
Samahan's association on the ground that its workers to self-organization.
members did not fall under any of the types of
workers enumerated in the second sentence of And Section 8, Article III of the 1987 Constitution
Article 243 (now 249). also states:
Section 8. The right of the people, including those
Hanjin opined that only ambulant, intermittent, employed in the public and private sectors, to form
itinerant, rural workers, self-employed, and those unions, associations, or societies for purposes not
without definite employers may form a workers' contrary to law shall not be abridged.
association.
In relation thereto, Article 3 of the Labor Code
Samahan argues that the right to form a workers' provides:
association is not exclusive to intermittent, ambulant Article 3. … The State shall assure the rights of
and itinerant workers. While the Labor Code allows workers to self-organization, collective
the workers "to form, join or assist labor bargaining, security of tenure, and just and
organizations of their own choosing" for the purpose humane conditions of work.
of collective bargaining, it does not prohibit them
from forming a labor organization simply for As Article 246 (now 252) of the Labor Code
purposes of mutual aid and protection. All members provides, the right to self-organization includes the
of Samahan have one common place of work, right to form, join or assist labor organizations for
Hanjin Shipyard. Thus, there is no reason why they the purpose of collective bargaining through
cannot use "Hanjin Shipyard" in their name. representatives of their own choosing and to
engage in lawful concerted activities for the same
Hanjin counters that Samahan failed to adduce purpose for their mutual aid and protection.
sufficient basis that all its members were employees
of Hanjin or its legitimate contractors, and that the In view of the revered right of every worker to self-
use of the name "Hanjin Shipyard" would create an organization, the law expressly allows and even
- 162 -
impression that all its members were employess of encourages the formation of labor organizations.
HHIC.
The real aim is employee participation in whatever
Issues: form it may appear, bargaining or no bargaining,
1. Is the right to form a worker’s association union or no union. Any labor organization which may
exclusive to ambulant, intermittent and itinerant or may not be a union may deal with the employer.
workers? This explains why a workers' association or
2. Does the removal of the word "Hanjin Shipyard" organization does not always have to be a labor
from the association's name infringe on Samahan's union and why employer-employee collective
right to self-organization? interactions are not always collective bargaining.
To further strengthen employee participation, Article

255 (now 261) of the Labor Code mandates that
workers shall have the right 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
LMCs.
A cursory reading of the law demonstrates that a

common element between unionism and the
formation of LMCs is the existence of an employer-
employee relationship. Where neither party is an
employer nor an employee of the other, no duty to
bargain collectively would exist. In the same
manner, expressed in Article 255 (now 261) is the
requirement that such workers be employed in the
establishment before they can participate in policy
and decision making processes.
In contrast, the existence of employer-employee

relationship is not mandatory in the formation of
workers' association. What the law simply requires
is that the members of the workers' association, at
the very least, share the same interest. The very
definition of a workers' association speaks of
"mutual aid and protection."
- 163 -
The right to form or join a labor organization

necessarily includes the right to refuse or refrain
from exercising the said right. It is self-evident that
just as no one should be denied the exercise of a
right granted by law, so also, no one should be
compelled to exercise such a conferred right. Also
inherent in the right to self-organization is the right
to choose whether to form a union for purposes of
collective bargaining or a workers' association for
purposes of providing mutual aid and protection.
Hanjin posits that the members of Samahan have

definite employers, hence, they should have formed
a union instead of a workers' association. The Court
disagrees. There is no provision in the Labor Code
that states that employees with definite employers
may form, join or assist unions only.
The Court cannot subscribe either to Hanjin's position

that Samahan's members cannot form the
association because they are not covered by the
second sentence of Article 243 (now 249), to wit:
Article 243. … 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.
Further, Article 243 should be read together with

Rule 2 of Department Order (D.O.) No. 40-03,
Series of 2003, which provides:
Section 2. Who may join labor unions and workers'
associations. – … All other workers, including
ambulant, intermittent and other workers, the self-
employed, rural workers and those without any
definite employers may form labor organizations
for their mutual aid and protection and other
- 164 -
legitimate purposes except collective bargaining.
Clearly, there is nothing in the foregoing

implementing rules which provides that workers, with
definite employers, cannot form or join a workers'
association for mutual aid and protection. Section 2
thereof even broadens the coverage of workers
who can form or join a workers' association.
[Doctrine]
Right to self-organization includes right to form a
union, workers' association and labor management
councils.
More often than not, the right to self-organization

connotes unionism. Workers, however, can also form
and join a workers' association as well as labor-
management councils (LMC).
[Answer to Issue No. 2]

No, the removal of the word "Hanjin Shipyard" from
the association's name does not infringe on Samahan's
right to self-organization.
As there is no provision under our labor laws which

speak of the use of name by a workers' association,
the Court refers to the Corporation Code, which
governs the names of juridical persons. Section 18
thereof provides:
No corporate name may be allowed by the

Securities and Exchange Commission if the proposed
name is identical or deceptively or confusingly
similar to that of any existing corporation or to any
other name already protected by law or is patently
deceptive, confusing or contrary to existing laws…
Further, Section 9, Rule IV of D.O. No. 40-03, Series
- 165 -
of 2003 explicitly states:
The change of name of a labor organization shall

not affect its legal personality. All the rights and
obligations of a labor organization under its old
name shall continue to be exercised by the labor
organization under its new name.
Thus, in the directive of the BLR removing the words

"Hanjin Shipyard," no abridgement of Samahan's
right to self-organization was committed.
[Doctrine]
The policy underlying the prohibition in Section 18 is
the avoidance of fraud upon the public which would
have occasion to deal with the entity concerned, the
evasion of legal obligations and duties, and the
reduction of difficulties of administration and
supervision over corporations.
For the same reason, it would be misleading for the

members of Samahan to use "Hanjin Shipyard" in its
name as it could give the wrong impression that all
of its members are employed by Hanjin.
Holy Child Catholic School v. Facts: Yes, the certification of election can be conducted.
HCCS-TELU-PIGLAS A petition for certification election was filed by HCCS-
G.R. No. 179146 TELU-PIGLAS. HCCS raised that members of HCCS- HCCS appears to have confused the concepts of
July 23, 2013 TELU-PIGLAS do not belong to the same class; it is not membership in a bargaining unit and membership in
only a mixture of managerial, supervisory, and rank- a union. In emphasizing the phrase "to the exclusion
and-file employees – as three (3) are vice-principals, of academic employees" stated in U.P. v. Ferrer-
one (1) is a department head/supervisor, and eleven Calleja, HCCS believed that the petitioning union
(11) are coordinators – but also a combination of could not admit academic employees of the
teaching and non-teaching personnel – as twenty- university to its membership. But such was not the
seven (27) are non-teaching personnel. It insisted that, intention of the Supreme Court.
for not being in accord with Article 245 of the Labor
Code, HCCS-TELU-PIGLAS is an illegitimate labor
In the same manner, the teaching and non-teaching
organization lacking in personality to file a petition for
certification election. personnel of petitioner school must form separate
- 166 -
bargaining units. Thus, the order for the conduct of

Issue: two separate certification elections, one involving
Can the certification of election be conducted? teaching personnel and the other involving non-
teaching personnel. It should be stressed that in the
subject petition, HCCS-TELU-PIGLAS sought the
conduct of a certification election among all the
rank-and-file personnel of HCCS. Since the decision
of the Supreme Court in the U.P. case prohibits us
from commingling teaching and non-teaching
personnel in one bargaining unit, they have to be
separated into two separate bargaining units with
two separate certification elections to determine
whether the employees in the respective bargaining
units desired to be represented by private
respondent.
[Doctrine]
A bargaining unit is a group of employees sought to
be represented by a petitioning union. Such
employees need not be members of a union seeking
the conduct of a certification election. A union
certified as an exclusive bargaining agent
represents not only its members but also other
employees who are not union members.
Labor Organizations and Registration of Unions and Chartering

Labor Code: Arts. 219 (g, h), 237, 240-251, 292 (a)
Omnibus Rules, Book V, Rule 1, Sec. 1 (a, h-p, w, cc, ee, ff, jj, kk, zz, ccc), Rule III-V, XIV-XV, as amended by D.O. 40-03, as further amended by D.O.
40-B
Labor Code: Arts. 240, 241, 245, 246, 247, 248, 252
D.O. No. 40-F-03 series of 2008 (Implementing Rules for R.A. 9481 amendments)
- 167 -

Sa Facts: Yes, SMPEEU-PDMP is required to submit the
San Miguel Corporation SMCEU-PTGWO s the incumbent bargaining agent number of employees and names of all its
Employees Union-Philippine for the bargaining unit comprised of the regular members comprising at least 20% of the
Transport and General Workers monthly-paid rank and file employees of the three employees of the bargaining unit.
Orgaization (SMCEU-PTGWO) v. divisions SMC. On the other hand, SMPEEU-PDMP is
San Miguel Packaging Products registered as a chapter of PDMP. In compliance with As will be noted later in Issue No. 4 of this digest,
Employees Union-Pambansang registration requirements, SMPEEU-PDMP submitted although PDMP as a trade union center is a
Diwa ng Manggagawang Pilipino the requisite documents to the BLR for the purpose legitimate labor organization, it has no power to
(SMPEEU-PDMP) of acquiring legal personality. Upon submission of its directly create a local or chapter. Thus, SMPPEU-
GR No. 171153 charter certificate and other documents, SMPEEU- PDMP cannot be created under the more lenient
September 12, 2007 PDMP was issued Certificate of Creation of Local or requirements for chartering, but must have complied
Chapter PDMP-01 by the BLR on 6 July with the more stringent rules for creation and
1999. Thereafter, SMPEEU-PDMP filed with the registration of an independent union, including the
Med-Arbiter of the DOLE-NCR, three separate 20% membership requirement.
petitions for certification election to represent the
three divisions of SMC. [Doctrine]
A legitimate labor organization is defined as "any
SMCEU-PTGWO filed with the DOLE-NCR a petition labor organization duly registered with the
seeking the cancellation of SMPEEU-PDMP’s Department of Labor and Employment, and
registration and its dropping from the rolls of includes any branch or local thereof." The mandate
legitimate labor organizations. In its petition, of the Labor Code is to ensure strict compliance with
SMCEU-PTGWO accused SMPEEU-PDMP of the requirements on registration because a
committing fraud and falsification, and non- legitimate labor organization is entitled to specific
compliance with registration requirements in rights under the Labor Code, and are involved in
obtaining its certificate of registration. It raised activities directly affecting matters of public interest.
allegations that SMPEEU-PDMP violated Articles Registration requirements are intended to afford a
239(a), (b) and (c) and 234(c) of the Labor Code. measure of protection to unsuspecting employees
Moreover, SMCEU-PTGWO claimed that PDMP is who may be lured into joining unscrupulous or fly-
not a legitimate labor organization, but a trade by-night unions whose sole purpose is to control
union center, hence, it cannot directly create a local union funds or use the labor organization for
or chapter. illegitimate ends.
SMCEU-PTGWO posits that SMPEEU-PDMP is Article 234 of the Labor Code provides that
required to submit a list of members comprising at an independent labor organization acquires
least 20% of the employees in the bargaining unit legitimacy only upon its registration with the BLR. It
before it may acquire legitimacy, citing Article is emphasized that the requirements provided
therein pertains to the registration of an
- 168 -
234(c) of the Labor Code. independent labor organization, association or

group of unions or workers.
SMCEU-PTGWO also insists that the 20%
requirement for registration of SMPEEU-PDMP must However, the creation of a branch, local or chapter
be based not on the number of employees of a is treated differently. It was held that when an
single division, but in all three divisions of the unregistered union becomes a branch, local or
company in all the offices and plants of SMC since chapter, some of the aforementioned requirements
they are all part of one bargaining unit. SMCEU- for registration are no longer necessary or
PTGWO refers to Section 1, Article 1 of the CBA. compulsory. Whereas an applicant for registration
of an independent union is mandated to submit,
SMCEU-PTGWO thus maintains that respondent, in among other things, the number of employees and
any case, failed to meet this 20% membership names of all its members comprising at least 20% of
requirement since it based its membership on the the employees in the bargaining unit where it seeks
number of employees of a single division only, to operate, as provided under Article 234 of the
namely, the SMPP. Labor Code and Section 2 of Rule III, Book V of the
Implementing Rules, the same is no longer required
of a branch, local or chapter. The intent of the law
Issues:
in imposing less requirements in the case of a branch
1. Is SMPEEU-PDMP required to submit the number
or local of a registered federation or national union
of employees and names of all its members
is to encourage the affiliation of a local union with a
comprising at least 20% of the employees of the
federation or national union in order to increase the
bargaining unit where it seeks to operate?
local union's bargaining powers respecting terms
2. Did SMPEEU-PDMP obtained its Certificate of
and conditions of labor.
Registration through fraud and misrepresentation?
3. Can the legal personality of the PDMP be subject
[Answer to issue no. 2]
of collateral attack?
No, SMPEEU-PDMP did not obtain its Certificate of
4. Can PDMP directly create a local or a chapter, it
Registration through fraud and misrepresentation.
being a trade center?
The records of the case are devoid of such evidence
showing fraud and misrepresentation on the part of
SMPEEU-PDMP in securing its certificate of
registration.
[Doctrine]
A direct challenge to the legitimacy of a labor
organization based on fraud and misrepresentation
in securing its certificate of registration is a serious
allegation which deserves careful scrutiny.
- 169 -
Allegations thereof should be compounded with

supporting circumstances and evidence. Furthermore,
this Court is not a trier of facts, and this doctrine
applies with greater force in labor cases. Findings
of fact of administrative agencies and quasi-judicial
bodies, such as the BLR, which have acquired
expertise because their jurisdiction is confined to
specific matters, are generally accorded not only
great respect but even finality.

No, PDMP’s legal personality cannot be subject of
collateral attack.
PDMP was registered as a trade union center and

issued Registration Certificate No. FED-11558-LC
by the BLR on 14 February 1991. Until the
certificate of registration of PDMP is cancelled, its
legal personality as a legitimate labor organization
subsists. Once a union acquires legitimate status as a
labor organization, it continues to be recognized as
such until its certificate of registration is cancelled or
revoked in an independent action for cancellation.
[Doctrine]
Article 212 (h) of the Labor Code, as amended,
defines a legitimate labor organization as "any
labor organization duly registered with the DOLE,
and includes any branch or local thereof." On the
other hand, a trade union center is any group of
registered 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, and
is duly registered with the DOLE in accordance with
Rule III, Section 2 of the Implementing Rules.
- 170 -
The Implementing Rules stipulate that a labor

organization shall be deemed registered and
vested with legal personality on the date of
issuance of its certificate of registration. Once a
certificate of registration is issued to a union, its
legal personality cannot be subject to collateral
attack. It may be questioned only in an independent
petition for cancellation in accordance with Section
5 of Rule V, Book V of the Implementing Rules.

No, PDMP, a trade union, cannot directly create a
local or chapter.
Since under the pertinent status and applicable

implementing rules, the power granted to labor
organizations to directly create a chapter or local
through chartering is given to a federation or
national union, then a trade union center is without
authority to charter directly.
[Doctrine]
PD No. 442, better known as the Labor Code, was
enacted in 1972. Incidentally, the term trade union
center was never mentioned under Presidential
Decree No. 442, even as it was amended by
Republic Act No. 6715. The term trade union
center was first adopted in the Implementing Rules,
under Department Order No. 9.
Department Order No. 9 mentions two labor

organizations either of which is allowed to directly
create a local or chapter through chartering – a
duly registered federation or a national union.
RA No. 9481 further amends the Labor Code

provisions on Labor Relations. Article 234 now
includes the term trade union center, but
- 171 -
interestingly, the provision indicating the procedure

for chartering or creating a local or chapter,
namely Article 234-A, still makes no mention of a
"trade union center." Therefore, since under the
pertinent status and applicable implementing rules,
the power granted to labor organizations to
directly create a chapter or local through chartering
is given to a federation or national union, then a
trade union center is without authority to charter
directly.
The Heritage Hotel Manila v. Facts: No, PIGLAS union did not commit fraud and
Pinag-Isang Galing at Lakas ng In 2000, rank and file employees of petitioner misrepresentation in its application for union
mga Manggagawa sa Heritage Heritage Hotel Manila (petitioner company) formed registration.
Manila (PIGLAS-HERITAGE) the HHE union. Subsequently, the HHE union filed a
G.R. No. 177024 petition for certification election that petitioner Except for the evident discrepancies as to the
October 30, 2009 company opposed. The Court of Appeals issued a number of union members involved as these
writ of injunction against the holding of the HHE appeared on the documents that supported the
union’s certification election. The decision of the union’s application for registration, petitioner
Court of Appeals became final when the HHE union company has no other evidence of the alleged
withdrew the petition for review that it filed with this
misrepresentation. But those discrepancies alone
Court. cannot be taken as an indication that respondent
misrepresented the information contained in these
In 2003, certain rank and file employees of documents.
petitioner company held a meeting and formed
another union called the PIGLAS union. Thereafter, The discrepancies in the number of union members
the members of the first union, the HHE union, or employees stated in the various supporting
adopted a resolution for its dissolution. The HHE documents that respondent PIGLAS union submitted
union then filed a petition for cancellation of its to labor authorities can be explained. While it
union registration. appears in the minutes of the December 10, 2003
organizational meeting that only 90 employees
In 2004, PIGLAS union filed a petition for responded to the roll call at the beginning, it cannot
certification election that petitioner company also be assumed that such number could not grow to 128
opposed. The Med-Arbiter granted the petition for as reflected on the signature sheet for attendance.
certification election. The meeting lasted 12 hours from 11:00 a.m. to
11:00 p.m. There is no evidence that the meeting
hall was locked up to exclude late attendees.
Petitioner company filed a petition to cancel the
- 172 -
union registration of respondent PIGLAS union. The At any rate, the Labor Code and its implementing
company claimed that the documents submitted with rules do not require that the number of members
the union’s application for registration bore the appearing on the documents in question should
following false information: completely dovetail. For as long as the documents
and signatures are shown to be genuine and
(a) The List of Members showed that the regular and the constitution and by-laws
PIGLAS union had 100 union members; democratically ratified, the union is deemed to have
complied with registration requirements.
(b) The Organizational Minutes said that 90
employees attended the meeting on Petitioner company claims that PIGLAS union was
December 10, 2003; required to submit the names of all its members
comprising at least 20 percent of the employees in
(c) The Attendance Sheet of the meeting of the bargaining unit. Yet the list it submitted named
December 10, 2003 bore the signature of only 100 members notwithstanding that the
127 members who ratified the union’s signature and attendance sheets reflected a
Constitution and By-Laws; and membership of 127 or 128 employees. This
omission, said the company, amounted to material
misrepresentation that warranted the cancellation of
(d) The Signature Sheet bore 128
the union’s registration.
signatures of those who attended that
meeting.
But, as the labor authorities held, this discrepancy is
immaterial. A comparison of the documents shows
Petitioner company alleged that the
that, except for six members, the names found in the
misrepresentation was evidenced by the
subject list are also in the attendance and signature
discrepancy in the number of union members
sheets. Notably, the bargaining unit that respondent
appearing in the application and the list as well as
PIGLAS union sought to represent consisted of 250
in the number of signatories to the attendance and
employees. Only 20 percent of this number or 50
signature sheets. The minutes reported that only 90
employees were required to unionize. Here, the
employees attended the meeting.
union more than complied with such requirement.
Issue:
Did PIGLAS union commit fraud and
misrepresentation in its application for union [Doctrine]
registration? The charge that a labor organization committed
fraud and misrepresentation in securing its
registration is a serious charge and deserves close
scrutiny. It is serious because once such charge is
proved, the labor union acquires none of the rights
accorded to registered organizations. Consequently,
- 173 -
charges of this nature should be clearly established

by evidence and the surrounding circumstances.
Eagle Ridge Golf & Country Club Facts: No, EREU did not commit fraud in its application.
v. CA At least 20% of Eagle Ridge’s rank-and-file
G.R. No. 178989 employees had a meeting where they organized A scrutiny of the records fails to show any
March 18, 2010 themselves into an independent labor union, named misrepresentation, false statement, or fraud
"Eagle Ridge Employees Union" (EREU or committed by EREU to merit cancellation of its
Union), elected a set of officers, and ratified their registration.
constitution and by-laws. Thereafter, EREU formally
applied for registration and filed BLR Reg. Form No. First. The Union submitted the required documents
I-LO, s. 1998 before the DOLE Regional Office IV attesting to the facts of the organizational meeting
which granted the same. on December 6, 2005, the election of its officers,
and the adoption of the Union’s constitution and by-
The EREU then filed a petition for certification laws. It submitted before the DOLE Regional Office
election in Eagle Ridge. Eagle Ridge opposed this with its Application for Registration and the duly
petition, followed by its filing of a petition for the filled out BLR Reg. Form No. I-LO, s. 1998, the
cancellation of EREU’s registration certificate following documents, to wit:
ascribing misrepresentation, false statement, or
fraud to EREU in connection with the adoption of its (a) the minutes of its organizational meeting
constitution and by-laws, the numerical composition showing 26 founding members who elected
of the Union, and the election of its officers. its union officers by secret ballot;
Eagle Ridge alleged that the EREU declared in its
(b) the list of rank-and-file employees of
application for registration having 30 members,
Eagle Ridge who attended the
when the minutes of its December 6, 2005
organizational meeting and the election of
organizational meeting showed it only had 26
officers with their individual signatures;
members. The misrepresentation was exacerbated
by the discrepancy between the certification issued
by the Union secretary and president that 25 (c) the list of rank-and-file employees who
members actually ratified the constitution and by- ratified the union’s constitution and by-laws
laws on December 6, 2005 and the fact that 26 showing the very same list as those who
members affixed their signatures on the documents, attended the organizational meeting and
making one signature a forgery. the election of officers with their individual
signatures except the addition of four
Finally, Eagle Ridge contended that five employees employees without their signatures, i.e.,
who attended the organizational meeting had Cherry Labajo, Grace Pollo, Annalyn
manifested the desire to withdraw from the union. Poniente and Rowel Dolendo;
- 174 -
The five executed individual affidavits (d) the union’s constitution and by-laws as
or Sinumpaang Salaysay, attesting that they arrived approved on December 6, 2005;
late at said meeting which they claimed to be
drinking spree; that they did not know that the (e) the list of officers and their addresses;
documents they signed on that occasion pertained to
the organization of a union; and that they now (f) the list of union members showing a total
wanted to be excluded from the Union. The of 30 members; and
withdrawal of the five, Eagle Ridge maintained,
effectively reduced the union membership to 20 or
(g) the Sworn Statement of the union’s
21, either of which is below the mandatory minimum
elected president and secretary. All the
20% membership requirement under Art. 234(c) of
foregoing documents except the sworn
the Labor Code.
statement of the president and the
secretary were accompanied by
Issue:
Certifications by the union secretary duly
Did EREU commit fraud in its application?
attested to by the union president.
Second. The members of the EREU totalled 30

employees when it applied for registration. The
Union thereby complied with the mandatory
minimum 20% membership requirement under Art.
234(c).
Third. The Union has sufficiently explained the

discrepancy between the number of those who
attended the organizational meeting showing 26
employees and the list of union members showing
30. The difference is due to the additional four
members admitted two days after the
organizational meeting as attested to by their duly
accomplished Union Membership forms.
Consequently, the total number of union members,
as of December 8, 2005, was 30, which was
truthfully indicated in its application for registration
on December 19, 2005.
Fourth. Eagle Ridge assails the inclusion of the

additional four members allegedly for not
- 175 -
complying with what it termed as "the sine qua

non requirements" for union member applications
under the Union’s constitution and by-laws,
specifically Sec. 2 of Art. IV. We are not
persuaded. Any seeming infirmity in the application
and admission of union membership, most especially
in cases of independent labor unions, must be
viewed in favor of valid membership.
In this case, when the Union said that the four

employee-applicants had been admitted as union
members, it is enough to establish the fact of
admission of the four that they had duly signified
such desire by accomplishing the membership form.
The fact, as pointed out by Eagle Ridge, that the
Union, owing to its scant membership, had not yet
fully organized its different committees evidently
shows the direct and valid acceptance of the four
employee applicants rather than deter their
admission—as erroneously asserted by Eagle
Ridge.
Fifth. The difference between the number of 26

members, who ratified the Union’s constitution and
by-laws, and the 25 members shown in the
certification of the Union secretary as having
ratified it, is, a typographical error. It was an
insignificant mistake committed without malice or
prevarication. The list of those who attended the
organizational meeting shows 26 members, as
evidenced by the signatures beside their
handwritten names. Thus, the certification’s
understatement by one member, while not factual,
was clearly an error, but neither a misleading one
nor a misrepresentation of what had actually
happened.
Sixth. The allegations in the six affidavits of
- 176 -
retraction have no probative value and at the very

least cannot outweigh the rebutting attestations of
the duly re-affirmed affidavits presented by the
Union.The DOLE Regional Director and the BLR OIC
Director obviously erred in giving credence to the
affidavits of retraction, but not according the same
treatment to the supporting affidavits.
The six affiants of the affidavits of retraction were

not presented in a hearing before the Hearing
Officer (DOLE Regional Director), as required under
the Rules Implementing Book V of the Labor Code
covering Labor Relations. It is settled that affidavits
partake the nature of hearsay evidence, since they
are not generally prepared by the affiant but by
another who uses his own language in writing the
affiant’s statement, which may thus be either omitted
or misunderstood by the one writing them. In the
instant case, it is required for affiants to re-affirm
the contents of their affidavits during the hearing of
the instant case for them to be examined by the
opposing party, i.e., the Union. For their non-
presentation and consonant to the above-quoted
rule, the six affidavits of retraction are inadmissible
as evidence against the Union in the instant case.
Seventh. The fact that six union members, indeed,

expressed the desire to withdraw their membership
through their affidavits of retraction will not cause
the cancellation of registration on the ground of
violation of Art. 234(c) of the Labor Code requiring
the mandatory minimum 20% membership of rank-
and-file employees in the employees’ union.
Twenty percent (20%) of 112 rank-and-file

employees in Eagle Ridge would require a union
membership of at least 22 employees (112 x 205
= 22.4). When the EREU filed its application for
- 177 -
registration on December 19, 2005, there were

clearly 30 union members. Thus, when the certificate
of registration was granted, there is no dispute that
the Union complied with the mandatory 20%
membership requirement.
With the withdrawal of six union members, there is

still compliance with the mandatory membership
requirement under Art. 234(c), for the remaining 24
union members constitute more than the 20%
membership requirement of 22 employees.
Eighth. Finally, it may not be amiss to note, given

the factual antecedents of the instant case, that
Eagle Ridge has apparently resorted to filing the
instant case for cancellation of the Union’s certificate
of registration to bar the holding of a certification
election. This can be gleaned from the fact that the
grounds it raised in its opposition to the petition for
certification election are basically the same grounds
it resorted to in the instant case for cancellation of
EREU’s certificate of registration. This amounts to a
clear circumvention of the law and cannot be
countenanced.
[Doctrine]
Before their amendment by Republic Act No.
9481 on June 15, 2007, the then governing Art.
234 (on the requirements of registration of a labor
union) and Art. 239 (on the grounds for cancellation
of union registration) of the Labor Code
respectively provided as follows:
ART. 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
- 178 -
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
workers who participated in such
meetings;
(c) 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;
xxxx
(e) Four copies (4) 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.
xxxx
ART. 239. GROUNDS FOR CANCELLATION OF

UNION REGISTRATION. –– The following shall
constitute grounds for cancellation of union
registration:
(a) Misrepresentation, false statements 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
- 179 -
who took part in the ratification;
xxxx
(c) Misrepresentation, false statements or

fraud in connection with the election of
officers, minutes of the election of officers,
the list of voters, or failure to submit these
documents together with the list of the
newly elected/appointed officers and their
postal addresses within thirty (30) days
from election.
Samahanag Manggagawa sa Facts: No, SMCC-SUPER’s charter certificate need not be
Charter Chemical Solidarity of SMCC-SUPER filed a petition for certification certified under oath.
Unions in the Philippines for election among the regular rank-and-file employees
Empowerment and Reforms of the respondent company. The latter filed an Section 1, Rule VI of the Implementing Rules of Book
(SMCC-SUPER) v. Charter Answer with Motion to Dismiss on the ground that V, as amended by D.O. No. 9, series of 1997 does
Chemical and Coating petitioner union is not a legitimate labor require that a charter certificate be under oath.
Corporation organization because of (1) failure to comply with However, in San Miguel Corporation v. Mandaue
G.R. No. 169717 the documentation requirements set by law, and (2) Packing Products Plants-San Miguel Corporation
March 16, 2001 the inclusion of supervisory employees within Monthlies Rank-and-File Union-FFW, which was
petitioner union. decided under the auspices of D.O. No. 9, Series of
1997, we ruled that it was not necessary for the
Issue: charter certificate to be certified and attested by
1. Does SMCC-SUPER’s charter certificate needed to the local/chapter officers, since it does not make
be certified under oath? sense to have the local/chapters officers certify or
2. Does the mingling of supervisory employees with attest to a document which they had no hand in the
rank and file employees nullify the legal personality preparation of. In accordance with this ruling,
of SMCC-SUPER? SMCC-SUPER’s charter certificate need not be
executed under oath.

No, the mingling of supervisory employees with
rank and file employees did not nullify SMCC-
SUPER’s legal personality.
While there is a prohibition against the mingling of
- 180 -
supervisory and rank-and-file employees in one

labor organization, the Labor Code does not
provide for the effects thereof. Thus, the Court held
that after a labor organization has been registered,
it may exercise all the rights and privileges of a
legitimate labor organization. Any mingling
between supervisory and rank-and-file employees
in its membership cannot affect its legitimacy for
that is not among the grounds for cancellation of its
registration, unless such mingling was brought about
by misrepresentation, false statement or fraud
under Article 239 of the Labor Code.
[Doctrine]
The right to file a petition for certification election is
accorded to a labor organization provided that it
complies with the requirements of law for proper
registration. The inclusion of supervisory employees
in a labor organization seeking to represent the
bargaining unit of rank-and-file employees does
not divest it of its status as a legitimate labor
organization.
Yokohama Tire Phil. vs. Facts: NO, YEU did not commit fraud and
Yokohama Employees Union Yokohama Employees Union (YEU) is the labor misrepresentation.
G.R. No. 163532 organization of the rank-and-file employees of
March 12, 2010 Yokohama Tire Philippines, Inc. (YTPI). It is registered The findings of the CA that YEU did not commit
as a legitimate labor union. fraud or misrepresentation when it did not remove
Pineda’s signature from the list of employees who
YEU filed before the Regional Office a petition for supported YEU’s application for registration and
certification election. YTPI filed for the revocation of
whether YEU conducted an election of its officers
YEU’s registration on the ground that it violated Artare questions of fact which are not reviewable by
239(a) of the Labor Code, saying that YEU the Supreme Court absent any finding of grave
committed fraud and misrepresentation [when it abuse of discretion.
included the signature of a certain Ronald O.
Pineda in the organizational documents and Likewise, the Supreme Court upheld the ruling of the
- 181 -
declared that it conducted an election of officers CA that YTPI had the burden of proving that YEU
when it never actually did, among others]. committed fraud and misrepresentation. YTPI, being
the one which filed the petition for the revocation of
The Regional Office held that YEU committed YEU’s registration, had the burden of proving that
misrepresentation. YEU committed fraud and misrepresentation. YTPI
had the burden of proving the truthfulness of its
YEU appealed said decision to the Bureau of Labor accusations—that YEU fraudulently failed to remove
Relations (BLR). The BLR reversed. Pineda’s signature from the organizational
documents and that YEU fraudulently
YTPI filed a petition for certiorari before the Court misrepresented that it conducted an election of
of Appeals. The CA denied the same and held that officers.
BLR did not commit grave abuse of discretion.
Hence, the present petition. [Doctrine]
The charge that a labor organization committed
Issue: fraud and misrepresentation in securing its
Whether or not YEU committed fraud and registration is a serious charge and deserves close
misrepresentation. scrutiny. It is serious because once such charge is
proved, the labor union acquires none of the rights
accorded to registered organizations. Consequently,
charges of this nature should be clearly established
by evidence and the surrounding circumstances.
Takata (Philippines) Corporation Facts: NO, SALAMAT did not commit fraud and
vs. Bureau of Labor Relations and Petitioner Takata Phils. Filed with the DOLE a misrepresentation.
SALAMAT Petition for Cancellation of Certificate of Union
G.R. No. 196276 Registration of Samahang Lakas Manggagawa ng Petitioner’s charge that respondent committed
June 4, 2014 Takata (SALAMAT) on the ground that the latter is misrepresentation and fraud in securing its
guilty of misrepresentation, false statement, and certificate of registration is a serious charge and
fraud with respect to the number of those who must be carefully evaluated. Allegations thereof
participated in the organizational meeting, the should be compounded with supporting
adoption and ratification of its Constitution and By- circumstances and evidence. The Court found no
Laws, and in the election of its officers. evidence on record to support petitioner’s
accusation.
Petitioner contended that during the organizational
- 182 -
meeting of SALAMAT, only 68 attendees signed the On the allegation of failure to comply with the 20%
attendance sheet which is only 17% of the total membership requirement:
number of 396 regular rank-and-filed employees; It does not appear in Article 234(b) of the Labor
thus, it failed to comply with the 20% minimum Code that the attendees in the organizational
membership requirement, that the 119 union meeting must comprise 20% of the employees in the
members were actually only 117; and that the total bargaining unit. In fact, even the Implementing Rules
number of employees was 470 and not 396 as and Regulations of the Labor Code does not so
SALAMAT claimed. provide. It is only under Article 234(c) that requires
the names of all its members comprising at least
DOLE Regional Director granted the petition for twenty percent (20%) of all the employees in the
cancellation of SALAMAT’s certificate of registration. bargaining unit where it seeks to operate. Clearly,
the 20% minimum requirement pertains to the
The BLR reversed said decision. The CA denied the employees’ membership in the union and not to
petition for certiorari filed by Takata Phils and the list of workers who participated in the
affirmed the decision of the BLR. Hence, this petition organizational meeting. Indeed, Article 234(b) and
for review. (c) provide for separate requirements, which must
be submitted for the union’s registration, and which
Issue: respondent did submit. Here, the total number of
WHETHER OR NOT SALAMAT committed fraud and employees in the bargaining unit was 396, and
misrepresentation. 20% of which was about 79. Respondent submitted
a document entitled “Pangalan ng Mga Kasapi ng
Unyon” showing the names of 119 employees as
union members, thus respondent sufficiently
complied even beyond the 20% minimum
membership requirement.
Respondent also submitted the attendance sheet of

the organizational meeting which contained the
names and signatures of the 68 union members who
attended the meeting. Considering that there are
119 union members which are more than 20% of all
the employees of the bargaining unit, and since the
law does not provide for the required number of
- 183 -
members to attend the organizational meeting, the

68 attendees which comprised at least the majority
of the 119 union members would already constitute
a quorum for the meeting to proceed and to validly
ratify the Constitution and By-laws of the union.
There is, therefore, no basis for petitioner to
contend that grounds exist for the cancellation of
respondent’s union registration. For fraud and
misrepresentation to be grounds for cancellation of
union registration under Article 239 of the Labor
Code, the nature of the fraud and misrepresentation
must be grave and compelling enough to vitiate the
consent of a majority of union members.
On the allegation that the 119 union members were

actually only 117
Petitioner claims that in the list of members, there

was an employee whose name appeared twice and
another employee who was merely a project
employee. Such could not be considered a
misrepresentation in the absence of showing that
respondent deliberately did so for the purpose of
increasing their union membership. In fact, even if
those two names were not included in the list of
union members, there would still be 117 members
which was still more than 20% of the 396 rank-and-
file employees.
On the allegation that the total number of employees

was 470 and not 396
The Supreme Court held that the 117 union
- 184 -
members comprised more than the 20%

membership for SALAMAT’s registration. It cited the
case of Mariwasa Siam Ceramics vs. Sec. of DOLE:
“xxx The alleged failure of respondent to

indicate with mathematical precision the total
number of employees in the bargaining unit is of no
moment, especially as it was able to comply with
the 20% minimum membership requirement.”
Petition for review is DENIED.
[Doctrine]
For fraud and misrepresentation to be grounds for
cancellation of union registration under Article 239 of
the Labor Code, the nature of the fraud and
misrepresentation must be grave and compelling
enough to vitiate the consent of a majority of union
members.
AIM vs. AIM Faculty Association Facts: In Holy Child Catholic School vs. Hon. Sto. Tomas, the
G.R. No. 207971 Respondent Asian Institute of Management FacultyCourt has held that “i]n case of alleged inclusion of
January 23, 2017 Association (AIMFA) is a labor organization disqualified employees in a union, the proper
composed of members of the AIM faculty. AIMFA procedure for an employer like petitioner is to
filed a petition for certification election seeking to
directly file a petition for cancellation of the union’s
represent a bargaining unit in AIM consisting ofcertificate of registration due to misrepresentation,
forty (40) faculty members. false statement or fraud under the circumstances
enumerated in Art. 239 of the Labor Code, as
Petitioner Asian Institute Management (AIM) amended.
opposed the petition claiming that respondent’s
members are managerial employees who are On the basis of thus ruling, it can be said that
prohibited from organizing as a union. petitioner was correct in filing a petition for
cancellation of AIMFA’s certificate of registration.
COURTS’ DECISIONS Petitioner’s sole ground for seeking cancellation of
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respondent’s certificate of registration — that its

On the petition for certification election (filed by members are managerial employees and for this
AIMFA): reason, its registration is thus a patent nullity for
being an absolute violation of Article 245 of the
The Med-Arbiter denied the petition for certification Labor Code which declares that managerial
election on the ground that AIM’s faculty members employees are ineligible to join any labor
are managerial employees. The Secretary of the organization — is, in a sense, an accusation that
Department of Labor however, reversed the same. respondent is guilty of misrepresentation for
The SOLE thus remanded the case to DOLE for the registering under the claim that its members are not
conduct of a certification election among the managerial employees.
members of AIM.
However, the issue of whether AIMFA’s members are
The CA granted the petition for certiorari filed by managerial employees is still pending resolution by
AIM. The CA ruled that AIMFA’s members are way of petition for review on certiorari in G.R. No.
managerial employees and AIMFA is not a 197089. Hence, the resolution of the issue cannot be
legitimate labor organization; thus, SOLE committed preempted until it is determined with finality in said
grave abuse of discretion by giving due course to case.
AIMFA’s petition for certification election.
The case is ordered consolidated with G.R. No.
AIMFA then instituted a Petition for review on 197089.
Certiorari before the SC [docketed as G.R. No.
197089]. [Doctrine]
In case of alleged inclusion of disqualified employees
On the petition for cancellation of AIMFA’s in a union, the proper procedure for an employer like
certificate of registration (filed by AIM): petitioner is to directly file a petition for cancellation
of the union’s certificate of registration due to
The DOLE granted the petition for cancellation of misrepresentation, false statement or fraud under the
AIMFA’s certificate of registration and ordered its circumstances enumerated in Art. 239 of the Labor
delisting from the roster of legitimate labor Code, as amended.
organizations. The Bureau of Labor Relations (BLR)
reversed the same and ordered AIMFA’s retention in
the roster of legitimate labor organizations. The BLR
held that the grounds relied upon in the petition for
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the cancellation of registration are not among the

grounds authorized under Art. 239 of the Labor
Code, and that respondent’s members are not
managerial employees.
The CA denied the petition for certiorari filed by

AIM on this matter. According to the CA, AIM did not
allege any specific act of fraud or
misrepresentation committed by AIMFA. AIM sought
to cancel the registration of AIMFA based on Art.
245 of the Labor Code on the ineligibility of
managerial employees to form or join unions.
Unfortunately for the petitioner, even assuming that
there is a violation of Art. 245, such violation will not
result in the cancellation of the certificate of
registration of a labor organization.
The Motion for Recon having been denied, the AIM

filed the present petition.
Issue:
Whether or not the CA erred in validating AIMFA’s
certificate of registration despite the fact that its
members are all managerial employees who are
disqualified from joining, assisting, or forming a
labor organization.
Eligibility for Membership; Special Groups of Employees

Labor Code: Arts. 255, 212 (m), 256; Dept. Order No. 40-F-03, series of 2008; Omnibus Rules, Book V, Rule I, Sec. 1 (hh), (nn), (xx), as amended by
D.O. 40
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Cathay Pacific Steel Corp. vs. CA Facts: NO, the CA did not commit grave abuse of
Cathay Pacific Steel Corp. (CAPASCO) hired discretion in ruling that Tamondong was not a
G.R. No. 164561 private respondent managerial employee.
Article 212(m) of the Labor Code, as amended,
August 30, 2006 Tamondong as Assistant to the Personnel Manager differentiates supervisory employees from
for its Cainta Plant. In June 1996, the supervisory managerial employees, to wit: supervisory
personnel of CAPASCO launched a move to employees are those who, in the interest of the
organize a union among their ranks [later known as employer, effectively recommend such managerial
private respondent CUSE]. Tamondong actively actions, if the exercise of such authority is not
involved himself in the formation of the union and merely routinary or clerical in nature but requires
was even elected as one of its officer. the use of independent judgment; whereas,
managerial employees are those who are vested
In view of such participation of Tamondong,
with powers or prerogatives to lay down and
CAPASCO, through a memo terminated his
execute management policies and/or hire, transfer,
employment on the ground of loss of trust and
suspend, lay off, recall, discharge, assign or
confidence, citing his union activities as acts
discipline employees. Thus, from the foregoing
constituting serious disloyalty to the Company.
provision of the Labor Code, it can be clearly
Tamondong challenged his dismissal for being inferred that private respondent Tamondong was
illegal and as an act involving unfair labor practice; just a supervisory employee. Private respondent
he filed a Complaint for Illegal Dismissal and Unfair Tamondong did not perform any of the functions of
labor Practice before the NLRC. a managerial employee as stated in the definition
given to it by the Code. Hence, the Labor Code
CAPASCO on the other hand, contended that provisions regarding disqualification of a
Tamondong was considered a managerial managerial employee from joining, assisting or
employee by virtue of his position as Personnel forming any labor organization does not apply to
Superintendent and the functions actually performed herein private respondent Tamondong. Being a
by him. supervisory employee of CAPASCO, he cannot be
prohibited from joining or participating in the union
The Acting Labor Arbiter ruled in favor of activities of private respondent CUSE, and in
Tamondong and found CAPASCO guilty of unfair making such a conclusion, the Court of Appeals did
labor practice and illegal dismissal. On appeal, the not act whimsically, capriciously or in a despotic
NLRC modified the decision and dismissed the manner, rather, it was guided by the evidence
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complaint for illegal dismissal and unfair labor submitted before it. Thus, given the foregoing
practice. findings of the Court of Appeals that private
respondent is a supervisory employee, it is indeed
Upon a Petition for Certiorari under Rules 65 of the an unfairlabor practice on the part of petitioner
Rules of Court filed by respondents before the CA, CAPASCO to dismiss him on account of his union
the CA reinstated the decision of the LA. activities, thereby curtailing his constitutionally
guaranteed right to self-organization.
Hence, the present petition for Certiorari under Rule
65. Petition is DISMISSED.
Issue: [Doctrine]
WHETHER OR NOT the CA committed grave abuse
of discretion in holding that Tamondong was not a Supervisory employees are those who, in the interest
managerial employee. 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; whereas,
managerial employees are those who are vested
with powers or prerogatives to lay down and
execute management policies and/or hire, transfer,
suspend, lay off, recall, discharge, assign or
discipline employees.
San Miguel Corporation Supervisors Facts: 1. The supervisory employees 3 and 4 and the
and Exempt Employees Union vs. exempt employees of the company are NOT
Laguesma Petitioner San Miguel Corporation Supervisors and confidential employees.
Exempt Employees Union filed before the DOLE a
G.R. 110399 Petition for Certification Election among the Confidential employees are those who (1) assist or
supervisors and exempt employees of the SMC act in a confidential capacity, (2) to persons who
Aug. 15, 1997 Magnolia Poultry Products Plants of Cabuyao, San formulate, determine, and effectuate management
Fernando, and Otis. policies in the field of labor relations. The two
criteria are cumulative, and both must be met if an
The Med-Arbiter ordered the conduct of certification
employee is to be considered a confidential
election among supervisors and exempt employees
employee—that is, the confidential relationship must
of the SMC Magnolia Poultry Products Plants of
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Cabuyao, San Fernando, and Otis as one exist between the employee and his supervisor, and
bargaining unit. the supervisor must handle the prescribed
responsibilities relating to labor relations.
SMC filed a Notice of Appeal pointing out the Med-
Arbiter’s error in grouping together all three The exclusion from bargaining units of employees
separate plants into one bargaining unit and in who, in the normal course of their duties, become
including the supervisory levels 3 and above whose aware of management policies relating to labor
positions are confidential in nature. relations is a principal objective sought to be
accomplished by the “confidential employee rule.”
Public respondent Undersecretary Laguesma The broad rationale behind this rule is that
granted SMC’s appeal. However, on a motion for employees should not be placed in a position
reconsideration, he reversed and directed the involving a potential conflict of interests.
conduct of separate certification elections among “Management should not be required to handle
the supervisors ranked as supervisory levels 1 to 4 labor relations matters through
(S3 and S4) and the exempt employees in each of
the three plants [in Cabuyao, San Fernando, and employees who are represented by the union with
Otis]. which the company is required to deal and who in
the normal performance of their duties may obtain
SMC filed a Motion for Recon. Laguesma granted advance information of the company’s position with
the motion and modified his earlier decision . He regard to contract negotiations, the disposition of
ruled that S3 and S4 Supervisors and the so-called grievances, or other labor relations matters.
exempt employees are admittedly confidential
employees and therefore, they are not allowed to In this case, the confidential information handled by
form, join or assist a labor union for purposes of questioned employees relate to product formulation,
collective bargaining. Consequently, they are not product standards, and product specification which
allowed to participate in the certification election. by no means relate to labor relations. They may not
be considered as confidential employees merely
Hence, the present petition for certiorari. because they handle “confidential data” as such
must first be strictly classified as pertaining ro labor
Issues:
relations for them to fall under said restrictions. The
1. Whether or not Supervisory employees 3 and 4 information they handle are properly classifiable as
and the exempt employees of the company are technical and internal business operations data
considered confidential employees, hence ineligible which has no relevance to negotiations and
settlement of grievances wherein the interests of a
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from joining a union. unions and the management are invariably

adversarial. Thus, they may appropriately form a
2. If they are not confidential employees, do the bargaining unit for purposes of collective
employees of the three plants constitute an bargaining. Furthermore, even assuming that they
appropriate single bargaining unit. are confidential employees, jurisprudence has
established that there is no legal prohibition against
confidential employees who are not performing
managerial functions to form and join a union.
2. The employees of the three plants constitute an

appropriate single bargaining unit.
An appropriate bargaining unit may be defined as

“a group of employees of a given employer,
comprised of all or less than all of the entire body
of employees, which the collective interest of all the
employees, consistent with equity to the employer,
indicate to be best suited to serve the reciprocal
rights and duties of the parties under the collective
bargaining provisions of the law.”
A unit to be appropriate must effect a grouping of

employees who have substantial, mutual interests in
wages, hours, working conditions and other subjects
of collective bargaining
It is readily seen that the employees in the instant

case have community or mutuality of interests,”
which is the standard in determining the proper
constituency of a collective bargaining unit. It is
undisputed that they all belong to the Magnolia
Poultry Division of San Miguel Corporation.
The fact that the three plants are located in three
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different places, namely, in Cabuyao, Laguna, in

Otis, Pandacan, Metro Manila, and in San
Fernando, Pampanga is immaterial. Geographical
location can be completely disregarded if the
communal or mutual interests
of the employees are not sacrificed. The distance

among the three plants is not productive of
insurmountable difficulties in the administration of
union affairs.
The assailed order is SET ASIDE and the Order of

the Med-Arbiter is REINSTATED.
[Doctrine]
Confidential employees are those who (1) assist or

act in a confidential capacity, (2) to persons who
formulate, determine, and effectuate management
policies in the field of labor relations. The two
criteria are cumulative, and both must be met if an
employee is to be considered a confidential
employee—that is, the confidential relationship must
exist between the employee and his supervisor, and
the supervisor must handle the prescribed
responsibilities relating to labor relations.
Standard Chartered bank Facts: NO, the CA did not commit error in deciding not
Employees Union (SCBEU-NUBE) Petitioner Union and Standard Chartered Bank had to revise the scope of the exclusions from the
vs. Standard Chartered Bank a deadlock during the negotiations for a new bargaining unit.
Collective Bargaining Agreement, thus petitioner Whether or not the employees sought to be
G.R. No. 161933 union filed a Notice of Strike prompting the SOLE to excluded from the appropriate bargaining unit are
assume jurisdiction over the labor dispute. confidential employees is a question of fact, which is
April 22, 2008
not a proper issue in a petition for review under
- 192 -
Rule 45 of the Rules of Court, especially so in this

case where the petitioner failed to controvert with
The Secretary of the DOLE, in resolving the dispute, evidence the findings of the Secretary and the CA.
issued an order whereby it directed the petitioner
union and the Bank to execute their CBA While Article 245 of the Labor Code limits the
incorporating the agreements and dispositions ineligibility to join, form and assist any labor
reached by the parties during the course of organization to managerial employees,
negotiations and conciliation. [It appears that in the jurisprudence has extended this prohibition to
decision of the Secretary, certain employees were confidential employees or those who by reason of
excluded from the appropriate bargaining unit]. their positions or nature of work are required to
assist or act in a fiduciary manner to managerial
The CA affirmed the decision of the Secretary. employees and hence, are likewise privy to sensitive
Hence, the present petition for review on certiorari. and highly confidential records.
CONTENTION OF PETITIONER UNION: In this case, the question that needs to be answered
is whether the Bank’s Chief Cashiers and Assistant
Petitioner union contested the list of employees that
Cashiers, personnel of the Telex Department and HR
were excluded by the Secretary. It sought the
staff are confidential employees, such that they
exclusion of only the following employees from the
should be excluded.
appropriate bargaining unit - all managers who are
vested with the right to hire and fire employees, [Chief and Assistant] Bank Cashiers: National
confidential employees, those with access to labor Association of Trade Unions (NATU) —Republic
relations materials, Chief Cashiers, Assistant Planters Bank Supervisors Chapter v. Torres declared
Cashiers, personnel of the Telex Dept. and one that bank cashiers are confidential employees
Human Resource staff. The rest of those not having control, custody and/or access to
mentioned should not have been excluded. confidential matters, e.g., the branch’s cash position,
statements of financial condition, vault combination,
Issue:
cash codes for telegraphic transfers, demand drafts
Whether or not the CA erred in deciding that there
and other negotiable instruments, pursuant to Sec.
was no basis for revising the scope of the exclusions
1166.4 of the Central Bank Manual regarding joint
from the appropriate bargaining unit under the
custody, and therefore, disqualified from joining or
CBA.
assisting a union; or joining, assisting or forming any
other labor organization.
Personnel of Tex Dept: Golden Farms, Inc. vs. Ferrer-
- 193 -
Calleja stated that “confidential employees such as

accounting personnel, radio and telegraph
operators who, having access to confidential
information, may become the source of undue
advantage. Said employee(s) may act as spy or
spies of either party to a collective bargaining
agreement.”
HR staff: Philips Industrial Development, Inc. v.

National Labor Relations Commission, the Court
designated personnel staff, in which human
resources staff may be qualified, as confidential
employees because by the very nature of their
functions, they assist and act in a confidential
capacity to, or have access to confidential matters
of, persons who exercise managerial functions in the
field of labor relations.
The petitioner union failed to buttress its claim the

foregoing employees are not confidential
employees. Petitioner did not even bother to state
the nature of the duties and functions of these
employees, depriving the Court of any basis on
which it may be concluded that they are indeed
confidential employees. As found by the lower
courts:
Petitioner failed to show that the employees

sought to be removed from the list of exclusions
are actually rank and file employees who are not
managerial or confidential in status and should,
accordingly, be included in the appropriate
- 194 -
bargaining unit.
Absent any proof that Chief Cashiers and

Assistant Cashiers, personnel of the Telex
department and one (1) HR Staff have mutuality
of interest with the other rank and file employees,
then they are rightfully excluded from the
appropriate bargaining unit.
Petition is DENIED.
[Doctrine]
While Article 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
employees and hence, are likewise privy to sensitive
and highly confidential records.
Coastal Subic Bay Terminal, Inc. Facts: YES, the rank-and-file union and the supervisory
vs. DOLE Coastal Subic Bay Terminal, Inc Rank-and-File Union union were engaged in comingling.
(CSBTI-RFU) and Coastal Subic Bay Terminal, Inc. Supervisory employees are not eligible for
G.R. No. 157117 Supervisory Union (CSBTISU) filed separate petitions membership in a labor union of rank-and-file
for certification election. employees. The supervisory employees are allowed
Nov. 20, 2006
to form their own union but they are not allowed to
The rank-and-file union (CSBTI-RFU) insists that it is a join the rank-and-file union because of potential
legitimate labor organization having been issued a conflicts of interest. Further, to avoid a situation
charter certificate by the Associated Labor Union where supervisors would merge with the rank-and-
(ALU), while the supervisory union (CSBTISU) was file or where the supervisors’ labor union would
- 195 -
issued a charter certificate by the Associated represent conflicting interests, a local supervisors’
Profession, Supervisory, Office and Technical union should not be allowed to affiliate with the
Employees Union (APSOTEU). national federation of unions of rank and- file
employees where that federation actively
Petitioner Coastal Subic Bay Terminal, Inc. (CSBTI) participates in the union activity within the company.
opposed both petitions for certification election Thus, the limitation is not confined to a case of
alleging that the rank-and-file union and supervisors wanting to join a rank-and-file union.
supervisory union were not legitimate labor The prohibition extends to a supervisors’ local union
organizations. applying for membership in a national federation
the members of which include local unions of rank-
The Med-Arbiter dismissed the petitions holding that
and-file employees.
ALU and APSOTEU are one and the same
federation having a common set of officers, in In De La Salle University Medical Center and College
effect, the supervisory and the rank-and-file unions of Medicine v. Laguesma, we reiterated the rule that
were affiliated with only one federation. for the prohibition to apply, it is not enough that the
supervisory union and the rank-and-file union are
The SOLE on appeal reversed the said decision,
affiliated with a single federation. In addition, the
ruling that CSBTISU and CSB-RFU have separate
supervisors must have direct authority over the rank-
legal personalities to file their petitions for
and-file employees.
certification election. It further ruled that ALU and
APSOTEU are separate and distinct labor unions In the instant case, the national federations that
having separate certificates of registration from the exist as separate entities to which the rank-and-file
DOLE. and supervisory unions are separately affiliated
with, do have a common set of officers. In addition,
On appeal, the CA affirmed the decision of the
APSOTEU, the supervisory federation, actively
SOLE and held that there was no grave abuse of
participates in the CSBTI-SU while ALU, the rank-
discretion on the part of SOLE. The motion for
and-file federation, actively participates in the
reconsideration was likewise denied. Hence, the
CSBTI-RFU, giving occasion to possible conflicts of
present petition for review on certiorari.
interest among the common officers of the
Issue: federation of rank-and-file and the federation of
supervisory unions. For as long as they are
Whether or not the rank-and-file union and the affiliated with the APSOTEU and ALU, the
supervisory union were engaged in comingling. supervisory and rank-and-file unions both do not
meet the criteria to attain the status of legitimate
- 196 -
labor organizations, and thus could not separately

petition for certification elections.
The purpose of affiliation of the local unions into a

common enterprise is to increase the collective
bargaining power in respect of the terms and
conditions of labor. When there is commingling of
officers of a rank-and-file union with a supervisory
union, the constitutional policy on labor is
circumvented. Labor organizations should ensure the
freedom of employees to organize themselves for
the purpose of leveling the bargaining process but
also to ensure the freedom of workingmen and to
keep open the corridor of opportunity to enable
them to do it for themselves.
Petition is GRANTED.
[Doctrine]
Supervisory employees are not eligible for

membership in a labor union of rank-and-file
employees. The supervisory employees are allowed
to form their own union but they are not allowed to
join the rank-and-file union because of potential
conflicts of interest.
- 197 -
Tunay na Pagkakaisa ng Facts: The secretaries/clerks and checkers are eligible for
Manggagawa sa Asia Brewery Bisig at Lakas ng Mangagawa sa Asia-Independent inclusion in the bargaining unit, while the Sampling
vs. Asia Brewery (BLMA-INDEPENDENT) was the exclusive bargaining Inspectors/Inspectresses and the Gauge Machine
G.R. No. 162025 representative of Asia Brewery, Inc.’s (ABI) rank- Techician are ineligible.
Aug. 3, 2010 and-file employees.
The renegotiated CBA between BLMA- Although Article 245 of the Labor Code limits the
INDEPENDENT and ABI stated that certain positions ineligibility to join, form and assist any labor
shall be excluded from the bargaining unit, which organization to managerial employees,
included Purchasing and Quality Control Staff and jurisprudence has extended this prohibition to
Confidential and Executive Secretaries. confidential employees or those who by reason of
A dispute arose between BLMA-INDEPENDENT and assist or act in a fiduciary manner to managerial
ABI when the latter stopped deducting union dues employees and hence, are likewise privy to sensitive
from 81 employees, with positions of (1) QA and highly confidential records. Confidential
Sampling Inspectors/Inspectress and Machine employees are thus excluded from the rank-and-file
Gauge Technician who formed part of Quality bargaining unit.
Control Staff, (2) checkers , and (3)
secretaries/clerks, believing that their membership in The rationale for their separate category and
the union violated the CBA. Hence, BLSMA- disqualification to join any labor organization is
INDEPENDENT lodged a complaint. similar to the inhibition for managerial employees
because if allowed to be affiliated with a Union,
The Voluntary Arbitrator sustained BLMA- the latter might not be assured of their loyalty in
INDEPENDENT, ruling that the position of subject view of evident conflict of interests and the Union
employees qualify under the rank-and-file category can also become company-denominated with the
because their functions are merely routinary and presence of managerial employees in the Union
clerical. membership. Having access to confidential
information, confidential employees may also
On appeal, the CA reversed the VA and held that
become the source of undue advantage. Said
the 81 employees cannot validly become members
employees may act as a spy or spies of either
of the union as their membership is violative of the
party to a collective bargaining agreement.
CBA.
In Philips Industrial Development, Inc. v. NLRC, this
Meanwhile, a certification election was held wherein
Court held that “division secretaries, all Staff of
petitioner Tunay na Pagkakaisa ng Manggagawa
- 198 -
sa Aisa won. As the incumbent bargaining General Management, Personnel and Industrial
representative of ABI’s rank-and-file employees Relations Department, Secretaries of Audit, EDP and
claiming interest in the outcome of the case, Financial Systems” are confidential employees not
petitioner filed with the CA an omnibus motion for included within the rank-and-file bargaining unit.
reconsideration of the decision and intervention, with
attached petition signed by the union officers. BothIn Pier Arrastre & Stevedoring Services, Inc. v.
motions were denied by the CA. Roldan-Confesor, the Court declared that legal
secretaries who are tasked with, among others, the
Issue: typing of legal documents, memoranda and
correspondence, the keeping of records and files,
Whether or not the 81 employees are correctly the giving of and receiving notices, and such other
excluded from and are not eligible for inclusion in duties as required by the legal personnel of the
the bargaining unit. corporation, fall under the category of confidential
employees and hence excluded from the bargaining
unit composed of rank-and-file employees. Also
considered having access to “vital labor
information” are the executive secretaries of the
General Manager and the executive secretaries of
the Quality Assurance Manager, Product
Development Manager, Finance Director,
Management System Manager, Human Resources
Manager, Marketing Director, Engineering
Manager, Materials Manager and Production
Manager.
In this case, perusal of the job descriptions of the

secretaries/clerks reveals that their assigned duties
and responsibilities involve routine activities of
recording and monitoring, and other paper works
for their respective departments while secretarial
tasks such as receiving telephone calls and filing of
office correspondence appear to have been
commonly imposed as additional duties. Respondent
failed to indicate who among the numerous
- 199 -
secretaries/clerks have access to confidential data

relating to management policies that could give rise
to potential conflict of interest with their Union
membership. Thus, the secretaries/clerks, numbering
about forty (40), are rank-and-file employees and
not confidential employees.
With respect to the Sampling

Inspectors/Inspectresses and the Gauge Machine
Technician, there seems no dispute that they form
part of the Quality Control Staff who, under the
express terms of theCBA, fall under a distinct
category and are thus excluded.
The twenty checkers are also not confidential

employees. The job description of the checkers
showed that they perform routine and mechanical
tasks preparatory to the delivery of the finished
products. No evidence was presented by the
respondent to prove that these daily-paid checkers
actually form part of the company’s Quality Control
Staff who as such “were exposed to sensitive, vital
and confidential information about [company’s]
products” or “have knowledge of mixtures of the
products, their defects, and even their formulas”
which are considered ‘trade secrets. Hence, the 20
checkers may not be considered confidential
employees.
Petition is GRANTED.
[Doctrine]
Although Article 245 of the Labor Code limits the

ineligibility to join, form and assist any labor
- 200 -
organization to managerial employees,

jurisprudence has extended this prohibition to
confidential employees or those who by reason of
employees and hence, are likewise privy to sensitive
and highly confidential records. Confidential
employees are thus excluded from the rank-and-file
bargaining unit.
- 201 -
San Miguel Foods, Inc. vs. San Facts: [Answer to issue]

Miguel Corporation Supervisors
and Exempt Union Pursuant to the decision in G.R. No. 110399, the NO, the CA did not commit error in holding that
DOLE conducted pre-election conferences. Hoewver, the Payroll Master is not a confidential employee.
G.R. No. 146206 | August 1, 2011 there was a discrepency in the list of eligible voters
submitted by SMC and respondent union.
Confidential employees are defined as those who
(1) assist or act in a confidential capacity, in regard
The Med-Arbiter directed to proceed with the (2) to persons who formulate, determine, and
conduct of certification election. effectuate management policies in the field of labor
relations. The two criteria are cumulative, and both
must be met if an employee is to be considered a
confidential employee—that is, the confidential
Petitioner SMC however, questioned the eligibility to
relationship must exist between the employee and
vote of some of its employees on the grounds,
his supervisor, and the supervisor must handle the
among others, that such employees are confidential
prescribed responsibilities relating to labor
employees.
relations. The exclusion from bargaining units of
employees who, in the normal course of their duties,
become aware of management policies relating to
Subsequently, a certification election was conducted labor relations is a principal objective sought to be
and the respondent union won. The Med-Arbiter accomplished by the “confidential employee rule”.
then issued an Order stating that respondent union is
certified to be the exclusive bargaining agent of the
supervisors and exempt employees of petitioner
A confidential employee is one entrusted with
SMC’s Magnolia Poultry Products Plants in Cabuyao,
confidence on delicate, or with the custody, handling
San Fernando, and Otis.
or care and protection of the employer’s property.
However, such fact does not apply to the position of
Payroll Master and the whole gamut of employees
The DOLE Undersecretary affirmed the Order of the who, as perceived by petitioner, has access to
Med-Arbiter. The CA affirmed with modification salary and compensation data. The CA correctly
stating that those holding the positions of Human held that the position of Payroll Master does not
Resource Assistant and Personnel Assistant are involve dealing with confidential labor relations
excluded from the bargaining unit. It also appears information in the course of the performance of his
- 202 -
that the CA did not exclude the position of Payroll functions. Since the nature of his work does not
Master as contended by the petitioner. pertain to company rules and regulations and
confidential labor relations, it follows that he canno
tbe excluded from the subject bargaining unit.
Issue:
Whether or not the CA erred in not excluding the As to the positions of Human Resource Assistant and
position of Payroll Master in the definition of a Personnel Assistant, the CA correctly ruled that they
confidential employee. are excluded from the bargaining unit. As Human
Resource Assistant, the scope of one’s work
necessarily involves labor relations, recruitment and
selection of employees, access to employees’
personal files and compensation package, and
human resource management. As regards a
Personnel Assistant, one’s work includes the
recording of minutes for management during
collective bargaining negotiations, assistance to
management during grievance meetings and
administrative investigations, and securing legal
advice for labor issues from the petitioner’s team of
lawyers, and implementation of company programs.
Therefore, in the discharge of their functions, both
gain access to vital labor relations information which
outrightly disqualifies them from union membership.
[Doctrine]
Confidential employees are defined as those who

(1) assist or act in a confidential capacity, in regard
(2) to persons who formulate, determine, and
effectuate management policies in the field of labor
relations. The two criteria are cumulative, and both
must be met if an employee is to be considered a
confidential employee—that is, the confidential
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relationship must exist between the employee and

his supervisor, and the supervisor must handle the
prescribed responsibilities relating to labor
relations.
Heritage Hotel v. Secretary Facts: No, co-mingling is not a ground for

GR No. 172132 In 1995, respondent NUWHRAIN-HHMSC filed dismissing a petition for certification election.
July 23, 2014 a petition for certification election, seeking to
represent all the supervisory employees of In both Toyota Motor and Dunlop Slazenger, the
Heritage Hotel Manila. The petitioner filed its Court was convinced that the concerned labor
opposition but was denied. unions were comprised by mixed rank-and-file
and supervisory employees. In Toyota Motor,
The certification election proceeded as the employer submitted the job descriptions of
scheduled, and NUWHRAINHHMSC obtained the concerned employees to prove that there
the majority vote of the bargaining unit. The were supervisors in the petitioning union for
petitioner filed a protest insisting on the rank-and-file employees. In Dunlop Slazenger,
illegitimacy of NUWHRAIN-HHMSC. the Court observed that the labor union of
supervisors included employees occupying
The petitioner timely appealed to the DOLE positions that apparently belonged to the rank-
Secretary. It contended that a labor union of and-file. In both Toyota Motor and Dunlop
mixed membership of supervisory and rank- Slazenger, the employers were able to adduce
and-file employees had no legal right to substantial evidence to prove the existence of
petition for the certification election pursuant to the mixed membership.
the pronouncements in Toyota Motor and Dunlop
Slazenger Based on the records herein, however, the
petitioner failed in that respect. To recall, it
DOLE Secretary denied the appeal. Petitioner raised the issue of the mixed membership in its
elevated the matter to the CA. comment on the list of members submitted by
NUWHRAIN-HHMSC, and in its protest. In the
CA ruled denied the petitioner for certiorari comment, it merely identified the positions that
with this disquisition: were either confidential or managerial but did
Tagaytay Highlands proclaims, in the light of not present any supporting evidence to prove
Department Order 9, that after a certificate of or explain the identification. In the protest, it
registration is issued to a union, its legal only enumerated the positions that were
personality cannot be subject to a collateral allegedly confidential and managerial, and
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attack. It may be questioned only in an identified two employees that belonged to the
independent petition for cancellation. In fine, rank-and-file but did not offer any description
Toyota and Dunlop Slazenger are a spent force. to show that the positions belonged to different
Since Tagaytay Highlands was handed down employee groups.
after these two cases, it constitutes the latest
expression of the will of the Supreme Court and
Worth reiterating is that the actual functions of
supersedes or overturns previous rulings an employee, not his job designation,
inconsistent with it. determined whether the employee occupied a
managerial, supervisory or rank-and-file
Issue: position. As to confidential employees who
Whether the mixture or co-mingling of were excluded from the right to self-
employees in a union was a ground for organization, they must (1) assist or act in a
dismissing a petition for the certification confidential capacity, in regard (2) to persons
election. who formulated, determined, and effectuated
management policies in the field of labor
relations. In that regard, mere allegations sans
substance would not be enough, most especially
because the constitutional right of workers to
self-organization would be compromised.
At any rate, the members of NUWHRAIN-

HHSMC had already spoken, and elected it as
the bargaining agent.
What is important is that there is an

unmistakable intent of the members of [the]
union to exercise their right to organize. We
cannot impose rigorous restraints on such right if
we are to give meaning to the protection to
labor and social justice clauses of the
Constitution.
[Doctrine]
Worth reiterating is that the actual functions of
an employee, not his job designation,
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determined whether the employee occupied a

managerial, supervisory or rank-and-file
position. As to confidential employees who
were excluded from the right to self-
organization, they must (1) assist or act in a
confidential capacity, in regard (2) to persons
who formulated, determined, and effectuated
management policies in the field of labor
relations. In that regard, mere allegations sans
substance would not be enough, most especially
because the constitutional right of workers to
self-organization would be compromised.
Union Security Clause

Labor Code: Art. 259 (e)
BPI v. BPI EMPLOYEES UNION Facts: YES, the Union Shop Clause of the CBA covers the
G.R. No. 164301 BSP approved the Articles of Merger executed former FEBTC employees who were
August 10, 2010 on by and between BPI, petitioner, and FEBTC. hired/employed by BPI during the effectivity of
This Article and Plan of Merger was approved the CBA.
by the Securities and Exchange Commission.
All employees in the bargaining unit covered
Pursuant to the Article and Plan of Merger, all by a Union Shop Clause in their CBA with
the assets and liabilities of FEBTC were management are subject to its terms. However,
transferred to and absorbed by BPI as the under law and jurisprudence, the following
surviving corporation. FEBTC employees, kinds of employees are exempted from its
including those in its different branches across coverage, namely,
the country, were hired by petitioner as its own 1. employees who at the time the union
employees, with their status and tenure shop agreement takes effect are bona
recognized and salaries and benefits fide members of a religious
organization which prohibits its members
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maintained. from joining labor unions on religious

grounds;
Respondent "Union," is the exclusive bargaining 2. employees already in the service and
agent of BPI's rank and file employees in already members of a union other
Davao City. The former FEBTC rank-and-file than the majority at the time the union
employees in Davao City did not belong to any shop agreement took effect;
labor union at the time of the merger. Prior to 3. confidential employees who are
the effectivity of the merger, respondent Union excluded from the rank and file
invited said FEBTC employees to a meeting bargaining unit;
regarding the Union Shop Clause (Article II, 4. employees excluded from the union
Section 2) of the existing CBA between shop by express terms of the
petitioner BPI and respondent Union. agreement.
After the meeting, some of the former FEBTC When certain employees are obliged to join a
employees joined the Union, while others particular union as a requisite for continued
refused. Later, however, some of those who employment, as in the case of Union Security
initially joined retracted their membership. Clauses, this condition is a valid restriction of
Respondent Union then sent notices to the the freedom or right not to join any labor
former FEBTC employees who refused to join, as organization because it is in favor of
well as those who retracted their membership, unionism. This Court, on occasion, has even held
and called them to a hearing regarding the that a union security clause in a CBA is not a
matter. When these former FEBTC employees restriction of the right of freedom of association
refused to attend the hearing, the president of guaranteed by the Constitution.
the Union requested BPI to implement the Union
Shop Clause of the CBA and to terminate their Moreover, a closed shop agreement is an
employment pursuant thereto. agreement whereby an employer binds himself
to hire only members of the contracting union
After two months of management inaction on who must continue to remain members in good
the request, respondent Union informed standing to keep their jobs. It is "the most
petitioner BPI of its decision to refer the issue of
prized achievement of unionism." It adds
the implementation of the Union Shop Clause of membership and compulsory dues. By holding
the CBA to the Grievance Committee. However, out to loyal members a promise of employment
the issue remained unresolved at this level and in the closed shop, it wields group solidarity.
so it was subsequently submitted for voluntary
arbitration by the parties. Indeed, the situation of the former FEBTC
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employees in this case clearly does not fall

Voluntary Arbitrator: ruled in favor of within the first three exceptions to the
petitioner BPI's interpretation that the formerapplication of the Union Shop Clause discussed
FEBTC employees were not covered by the earlier. No allegation or evidence of religious
Union Security Clause of the CBA between the exemption or prior membership in another union
Union and the Bank on the ground that the said or engagement as a confidential employee was
employees were not new employees who were presented by both parties. The sole category
hired and subsequently regularized, but were therefore in which petitioner may prove its
absorbed employees "by operation of law" claim is the fourth recognized exception or
because the "former employees of FEBTC can whether the former FEBTC employees are
be considered assets and liabilities of the excluded by the express terms of the existing
absorbed corporation. CBA between petitioner and respondent. As can
be gleaned from the existing CBA between the
The CA reversed the VA’s decision. petitioner and respondent, there is no express
term that excludes the absorbed FEBTC
Issue: Employees from being covered by a Union
Whether or not the former FEBTC employees that Shop Clause in aforementioned CBA with the
were absorbed by petitioner upon the merger BPI management and be subjected to its terms.
between FEBTC and BPI should be covered by the
Union Shop Clause found in the existing CBA
between petitioner and respondent Union.
The rationale for upholding the validity of union
shop clauses in a CBA, even if they impinge
upon the individual employee's right or
freedom of association, is not to protect the
union for the union's sake. Laws and
jurisprudence promote unionism and afford
certain protections to the certified bargaining
agent in a unionized company because a strong
and effective union presumably benefits all
employees in the bargaining unit since such a
union would be in a better position to demand
improved benefits and conditions of work from
the employer. This is the rationale behind the
State policy to promote unionism declared in
the Constitution.
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[Doctrine]
"Union security" is a generic term which is
applied to and comprehends "closed shop,"
"union shop," "maintenance of membership" or
any other form of agreement which imposes
upon employees the obligation to acquire or
retain union membership as a condition
affecting employment. There is union shop when
all new regular employees are required to join
the union within a certain period for their
continued employment. There is maintenance of
membership shop when employees, who are
union members as of the effective date of the
agreement, or who thereafter become
members, must maintain union membership as a
condition for continued employment until they
are promoted or transferred out of the
bargaining unit or the agreement is
terminated. A closed-shop, on the other hand,
may be defined as an enterprise in which, by
agreement between the employer and his
employees or their representatives, no person
may be employed in any or certain agreed
departments of the enterprise unless he or she
is, becomes, and, for the duration of the
agreement, remains a member in good
standing of a union entirely comprised of or of
which the employees in interest are a part. It is
the policy of the State to promote unionism to
enable the workers to negotiate with
management on the same level and with more
persuasiveness than if they were to individually
and independently bargain for the
improvement of their respective conditions.
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Dissenting opinion
Carpio J:
To further strengthen the powers of a union, the
State has allowed the inclusion of union security
clauses, including a “union shop” (the type of union
security clause involved in this case), in collective
bargaining agreements (CBA). In a “union shop,”
employees who are not union members at the time
of signing of the contract need not join the union, but
all workers hired thereafter must join—non-
members may be hired, but to retain employment
must become union members after a certain period;
In a “closed shop,” only union members can be hired
by the company and they must remain union
members to retain employment in the company; A
closed shop is so harsh that it must be strictly
construed and that doubts must be resolved against
it.
Brion J:
An intrinsic distinction exists between the absorbed
employees and those who are hired as immediate
regulars, which distinction cannot simply be
disregarded—those who are immediately hired as
regulars acquire their status through the voluntary
act of hiring done within the effective term or
period of the Collective Bargaining Agreement
(CBA), while the absorbed employees merely
continued the employment they started with the
absorbed corporation; Absorbed employees are
neither “new” employees nor employees who
became regular only during the term of the
Collective Bargaining Agreement (CBA) in the way
that newly regularized employees become so.
Ultimately, the absorbed employees are best

recognized for what they really are—a sui generis
group of employees whose classification will not be
- 210 -
duplicated until Bank of the Philippine Islands (BPI)

has another merger where it would be the surviving
corporation and no provision would be made to
define the situation of the employees of the merged
constituent corporation.
BPI v. BPI EMPLOYEES UNION Facts: Yes, the absorbed FEBTC employees fell within
G.R. No. 164301 BPI moves for reconsideration of the decision dated the definition of "new employees" under the
October 19, 2011 August 10, 2010, holding that former employees of Union Shop Clause.
the FEBTC "absorbed" by BPI pursuant to the two
banks’ merger in 2000 were covered by the Union By upholding the automatic assumption of the non-
Shop Clause in the then existing CBA of BPI with surviving corporations existing employment contracts
respondent Union. by the surviving corporation in a merger, the Court
strengthens judicial protection of the right to security
Petitioner insists that the parties to the CBA clearly of tenure of employees affected by a merger and
intended to limit the application of the Union Shop avoid confusion regarding the status of their various
Clause only to new employees who were hired as benefits. However, it shall be noted that nothing in
non-regular employees but later attained regular the Resolution shall impair the right of an employer
status at some point after hiring. FEBTC employees to terminate the employment of the absorbed
cannot be considered new employees as BPI merely employees for a lawful or authorized cause or the
stepped into the shoes of FEBTC as an employer right of such an employee to resign, retire or
purely as a consequence of the merger. otherwise sever his employment, whether before or
after the merger, subject to existing contractual
It contends that the absorbed FEBTC employees obligations.
should be considered "a sui generis group of
employees whose classification will not be Although by virtue of the merger BPI steps into the
duplicated until BPI has another merger where it shoes of FEBTC as a successor employer as if the
would be the surviving corporation." former had been the employer of the latter’s
employees from the beginning it must be
Petitioner propounds that the Union Shop Clause emphasized that, in reality, the legal consequences
should be strictly construed since it purportedly of the merger only occur at a specific date, i.e.,
curtails the right of the absorbed employees to upon its effectivity which is the date of approval of
abstain from joining labor organizations. the merger by the SEC. Thus, the court observed in
the Decision that BPI and FEBTC stipulated in the
The Union, in turn, adverts to the discussion in the Articles of Merger that they will both continue their
August 10, 2010 Decision regarding the voluntary respective business operations until the SEC issues
nature of the merger between BPI and FEBTC, the the certificate of merger and in the event no such
lack of an express stipulation in the Articles of certificate is issued, they shall hold each other
- 211 -
Merger regarding the transfer of employment blameless for the non-consummation of the merger.
contracts to the surviving corporation, and the
consensual nature of employment contracts as valid From the plain, ordinary meaning of the terms of the
bases for the conclusion that former FEBTC Union Shop Clause, it covers employees who (a)
employees should be deemed new employees. It enter the employ of BPI during the term of the CBA;
argues that the creation of employment relations (b) are part of the bargaining unit (defined in the
between former FEBTC employees and BPI (i.e., BPI’s CBA as comprised of BPI’s rank and file employees);
selection and engagement of former FEBTC and (c) become regular employees without
employees, its payment of their wages, power of distinguishing as to the manner they acquire their
dismissal and of control over the employees’ regular status. Consequently, the number of such
conduct) occurred after the merger, or to be more employees may adversely affect the majority status
precise, after the SEC approval of the merger. of the Union and even its existence itself, as already
amply explained in the Decision.
Issue:
Whether or not the "absorbed" FEBTC employees Indeed, there are differences between (a) new
fell within the definition of "new employees" under employees who are hired as probationary or
the Union Shop Clause. temporary but later regularized, and (b) new
employees who, by virtue of a merger, are
absorbed from another company as regular and
permanent from the beginning of their employment
with the surviving corporation. It bears reiterating
here that these differences are too insubstantial to
warrant the exclusion of the absorbed employees
from the application of the Union Shop Clause.
Again, it is worthwhile to highlight that a contrary

interpretation of the Union Shop Clause would dilute
its efficacy and put the certified union that is
supposedly being protected thereby at the mercy
of management. For if the former FEBTC employees
had no say in the merger of its former employer
with another bank, as petitioner BPI repeatedly
decries on their behalf, the Union likewise could not
prevent BPI from proceeding with the merger which
undisputedly affected the number of employees in
the bargaining unit that the Union represents and
may negatively impact on the Union’s majority
status. In this instance, we should be guided by the
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principle that courts must place a practical and

realistic construction upon a CBA, giving due
consideration to the context in which it is negotiated
and purpose which it is intended to serve.
[Doctrine]
It is more in keeping with the dictates of social
justice and the State policy of according full
protection to labor to deem employment contracts
as automatically assumed by the surviving
corporation in a merger, without break in the
continuity of their employment, and even in the
absence of an express stipulation in the articles of
merger or the merger plan.
A contrary interpretation of the Union Shop Clause

would dilute its efficacy and put the certified union
that is supposedly being protected thereby at the
mercy of management.
General Milling Corporation v. Facts: No, respondents were not legally terminated.
Casio The Labor Union IBM Local 31 was the sole and
G.R. No. 149552 exclusive bargaining agent of the rank and file In terminating the employment of an employee by
March 10, 2010 employees of GMC in Lapu-Lapu City. In 1991, enforcing the union security clause, the employer
IBM-Local 31, through its officers and board needs only to determine and prove that:
2. The union security clause is applicable;
members, entered into a CBA with GMC. The 2. The union is requesting for the enforcement
CBA a union security provision. of the union security provision in the CBA;
and
Casio, et al. were regular employees of GMC with 2. There is sufficient evidence to support the
length of service varying from eight to 25 years. decision of the union to expel the employee
Casio was elected IBM-Local 31 President for a from the union.
three-year term, while his co-respondents were
union shop stewards. In the present case, the CBA between GMC and
IBM-Local 31 included a maintenance of
In a letter, Gabiana, the IBM RD for Visayas and membership and closed shop clause as can be
Mindanao, furnished Casio, et al. with copies of the gleaned from Sections 3 and 6 of Article II. IBM-
Affidavits of GMC employees, charging Casio, et al. Local 31, by written request, can ask GMC to
- 213 -
with "acts inimical to the interest of the union." terminate the employment of the employee/worker
who failed to maintain its good standing as a union
Casio, et al. refused to acknowledge receipt of member. Here, the IBM-Local 31, through Gabiana,
Gabiana’s letter. twice requested GMC to terminate the employment
of Casio, et al. as a necessary consequence of their
Pino, et al., as officers and members of the IBM- expulsion from the union.
Local 31, issued a Resolution expelling Casio, et al.
from the union. It is the third requisite - that there is sufficient
evidence to support the decision of IBM-Local 31 to
expel Casio, et al. - which appears to be lacking in
Gabiana then wrote a letter to the GMC VP for
this case.
Engineering and Plant Administration, informing the
company of the expulsion of Casio, et al. from the
It is apparent from the aforequoted letter that GMC
union. She likewise requested that Casio, et al. "be
terminated the employment of Casio, et al. relying
immediately dismissed from their work for the
upon the Resolution expelling Casio, et al. from IBM-
interest of industrial peace in the plant."
Local 31; Gabiana's letters demanding that GMC
terminate the employment of Casio, et al. on the
Pressured by the threatened filing of a suit for basis of the closed shop clause in the CBA; and the
unfair labor practice, GMC acceded to Gabiana’s threat of being sued by IBM-Local 31 for unfair
request to terminate the employment of Casio, et al. labor practice. The letter made no mention at all of
the evidence supporting the decision of IBM-Local
Issue: 31 to expel Casio, et al. from the union. GMC never
Whether or not respondents Casio, et al were alleged nor attempted to prove that the company
legally terminated by the enforcement of the union actually looked into the evidence of IBM-Local 31
security clause. for expelling Casio, et al. and made a
determination on the sufficiency thereof. Without
such a determination, GMC cannot claim that it had
terminated the employment of Casio, et al. for just
cause.
The failure of GMC to make a determination of the

sufficiency of evidence supporting the decision of
IBM-Local 31 to expel Casio, et al. is a direct
consequence of the non-observance by GMC of
procedural due process in the dismissal of
employees.
[Doctrine]
- 214 -
In terminating the employment of an employee by

enforcing the union security clause, the employer
needs only to determine and prove that: (1) the
union security clause is applicable; (2) the union is
requesting for the enforcement of the union security
provision in the CBA; and (3) there is sufficient
evidence to support the decision of the union to
expel the employee from the union. These requisites
constitute just cause for terminating an employee
based on the union security provision of the CBA.
PICOP v. TANECA Facts: No, respondents were illegally terminated.

G.R. No. 160828 Respondents were regular rank-and-file
August 9, 2010 employees of PRI and bona fide members [See Doctrine]
of NAMAPRI-SPFL, which is the collective As to the first requisite, there is no question that
bargaining agent for the rank-and-file the CBA between PRI and respondents included
employees of petitioner PRI. a union security clause, specifically, a
maintenance of membership as stipulated in
PRI has a CBA with NAMAPRI-SPFL for a period Sections 6 of Article II, Union Security and
of five (5) years. The CBA contained union Check-Off. Following the same provision, PRI,
security provisions.1 upon written request from the Union, can indeed
terminate the employment of the employee who
Atty. Fuentes sent a letter to the management of failed to maintain its good standing as a union
PRI demanding the termination of employees member.
who allegedly campaigned for, supported and
signed the Petition for Certification Election of Secondly, it is likewise undisputed that
the FFW during the effectivity of the CBA. NAMAPRI-SPFL, in two (2) occasions demanded
from PRI, in their letters dated May 16 and 23,
NAMAPRI-SPFL considered said act of 2000, to terminate the employment of
campaigning for and signing the petition for respondents due to their acts of disloyalty to
1 Section 6. Maintenance of membership.

6.1 All employees within the appropriate bargaining unit who are members of the UNION at the time of the signing of this AGREEMENT shall, as a condition of continued employment by the COMPANY, maintain their membership in
the UNION in good standing during the effectivity of this AGREEMENT.
6.2 Any employee who may hereinafter be employed to occupy a position covered by the bargaining unit shall be advised by the COMPANY that they are required to file an application for membership with the UNION within thirty
(30) days from the date his appointment shall have been made regular.
6.3 The COMPANY, upon the written request of the UNION and after compliance with the requirements of the New Labor Code, shall give notice of termination of services of any employee who shall fail to fulfill the condition
provided in Section 6.1 and 6.2 of this Article, but it assumes no obligation to discharge any employee if it has reasonable grounds to believe either that membership in the UNION was not available to the employee on the same
terms and conditions generally applicable to other members, or that membership was denied or terminated for reasons other than voluntary resignation or non-payment of regular union dues. Separation under the Section is
understood to be for cause, consequently, the dismissed employee is not entitled to separation benefits provided under the New Labor Code and in this AGREEMENT.
- 215 -
certification election of FFW as an act of the Union.

disloyalty and a valid basis for termination for
a cause in accordance with its Constitution and However, as to the third requisite, we find that
By-Laws, and the terms and conditions of the there is no sufficient evidence to support the
CBA, specifically Article II, Sections 6.1 and 6.2 decision of PRI to terminate the employment of
on Union Security Clause. the respondents.
Mr. Trugillo requested the management of PRI PRI alleged that respondents were terminated
to investigate those union members who signed from employment based on the alleged acts of
the Petition for Certification Election of FFW disloyalty they committed when they signed an
during the existence of their CBA. NAMAPRI- authorization for the Federation of Free
SPFL, likewise, furnished PRI with machine copy Workers (FFW) to file a Petition for
of the authorization letters which contained the Certification Election among all rank-and-file
names and signatures of employees. employees of PRI. It contends that the acts of
respondents are a violation of the Union
Atty. Boniel issued a memo addressed to the Security Clause, as provided in their Collective
concerned employees to explain in writing Bargaining Agreement.
within 72 hours why their employment should
not be terminated due to acts of disloyalty as The SC was not convinced.
alleged by their Union.
The SC was in consonance with the Court of
After evaluation, Atty. Fuentes advised the Appeals when it held that the mere signing of
management of PRI that the Union found the the authorization in support of the Petition for
member's explanations to be unsatisfactory. He Certification Election of FFW on March 19, 20
reiterated the demand for termination, but only and 21, or before the "freedom period," is not
of 46 member-employees, including sufficient ground to terminate the employment
respondents. of respondents inasmuch as the petition itself
was actually filed during the freedom period.
PRI served notices of termination for causes to Nothing in the records would show that
the 31 out of the 46 employees whom respondents failed to maintain their
NAMAPRIL-SPFL sought to be terminated on the membership in good standing in the Union.
ground of "acts of disloyalty" committed Respondents did not resign or withdraw their
against it when respondents allegedly membership from the Union to which they
supported and signed the Petition for belong. Respondents continued to pay their
Certification Election of FFW before the union dues and never joined the FFW.
- 216 -
"freedom period" during the effectivity of the

CBA. Significantly, petitioner's act of dismissing
respondents stemmed from the latter's act of
Respondents maintained that their acts of signing an authorization letter to file a petition
signing the authorization signifying support to for certification election as they signed it
the filing of a Petition for Certification Election outside the freedom period. However, we are
of FFW was merely prompted by their desire to constrained to believe that an "authorization
have a certification election among the rank- letter to file a petition for certification election"
and-file employees of PRI with hopes of a CBA is different from an actual "Petition for
negotiation in due time; and not to cause the Certification Election." Likewise, as per records,
downfall of NAMAPRI-SPFL. it was clear that the actual Petition for
Certification Election of FFW was filed only on
Respondents asserted that the act of PRI, May 18, 2000. Thus, it was within the ambit of
Wilfredo Fuentes and Atty. Boniel in giving in to the freedom period which commenced from
the wishes of the Union in discharging them on March 21, 2000 until May 21, 2000. Strictly
the ground of disloyalty to the Union amounted speaking, what is prohibited is the filing of a
to interference with, restraint or coercion of petition for certification election outside the 60-
respondents’ exercise of their right to self- day freedom period. This is not the situation in
organization. this case. If at all, the signing of the
authorization to file a certification election was
merely preparatory to the filing of the petition
Issue: for certification election, or an exercise of
Whether there was just cause to terminate the respondents’ right to self-organization.
employment of respondents.
[Doctrine]
In terminating the employment of an employee
by enforcing the union security clause, the
employer needs to determine and prove that:
(1) the union security clause is applicable; (2)
the union is requesting for the enforcement of
the union security provision in the CBA; and (3)
there is sufficient evidence to support the
decision of the union to expel the employee
from the union. These requisites constitute just
cause for terminating an employee based on
- 217 -
the union security provision of the CBA.
VICTORIANO V. ELIZALDE ROPE Facts: [Answer to issue]

WORKERS UNION Benjamin Victoriano, a member of the religious No, Republic Act No. 3350 is not
G.R. No. L-25246 sect known as the Iglesia ni Cristo, had been in unconstitutional.
September 12, 1974 the employ of the Elizalde Rope Factory, Inc.
since 1958. As such employee, he was a What was the purpose sought to be achieved
member of the Elizalde Rope Workers' Union by Republic Act No. 3350? Its purpose was to
which had with the Company a collective insure freedom of belief and religion, and to
bargaining agreement containing a closed shop promote the general welfare by preventing
provision. discrimination against those members of
religious sects which prohibit their members
Under Section 4(a), paragraph 4, of Republic from joining labor unions, confirming thereby
Act No. 875, prior to its amendment by their natural, statutory and constitutional right to
Republic Act No. 3350, the employer was not work, the fruits of which work are usually the
precluded "from making an agreement with a only means whereby they can maintain their
labor organization to require as a condition of own life and the life of their dependents. It
employment membership therein, if such labor cannot be gainsaid that said purpose is
organization is the representative of the legitimate.
employees
The questioned Act also provides protection to
However, the provision was later amended by members of said religious sects against two
the enactment of Republic Act No. 3350, which aggregates of group strength from which the
reads: … “but such agreement shall not cover individual needs protection. The individual
members of any religious sects which prohibit employee, at various times in his working life, is
affiliation of their members in any such labor confronted by two aggregates of power -
organization”. collective labor, directed by a union, and
collective capital, directed by management. The
Being a member of a religious sect that union, an institution developed to organize
prohibits the affiliation of its members with any labor into a collective force and thus protect the
labor organization, Victoriano presented his individual employee from the power of
resignation to the Union. In turn, the Union asked collective capital, is, paradoxically, both the
the Company to dismiss Victoriano from the champion of employee rights, and a new source
service in view of the fact that he was resigning of their frustration. Moreover, when the Union
from the Union as a member. This prompted interacts with management, it produces yet a
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Victoriano to file an action to enjoin the third aggregate of group strength from which
Company and the Union from dismissing him. the individual also needs protection - the
collective bargaining relationship.
Union contends that the Act is unconstitutional
for impairing the obligation of its contract, The aforementioned purpose of the
specifically, the "union security clause" amendatory law is clearly seen in the
embodied in its Collective Bargaining Explanatory Note to House Bill No. 5859, which
Agreement with the Company, by virtue of later became Republic Act No. 3350, as
which "membership in the union was required as follows:
a condition for employment for all permanent
employees workers. It would be unthinkable indeed to refuse
employing a person who, on account of his
Issue: religious beliefs and convictions, cannot accept
Whether or not Republic Act N0. 3350 is membership in a labor organization although he
unconstitutional for impairing the obligations of possesses all the qualifications for the job. This is
contracts. tantamount to punishing such person for believing
in a doctrine he has a right under the law to
believe in. The law would not allow discrimination
to flourish to the detriment of those whose
religion discards membership in any labor
organization. Likewise, the law would not
commend the deprivation of their right to work
and pursue a modest means of livelihood, without
in any manner violating their religious faith
and/or belief.
It cannot be denied, furthermore, that the

means adopted by the Act to achieve that
purpose - exempting the members of said
religious sects from coverage of union security
agreements - is reasonable.
It may not be amiss to point out here that the

free exercise of religious profession or belief is
superior to contract rights. In case of conflict,
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the latter must, therefore, yield to the former.

The Supreme Court of the United States has
also declared on several occasions that the
rights in the First Amendment, which include
freedom of religion, enjoy a preferred position
in the constitutional system. Religious freedom,
although not unlimited, is a fundamental
personal right and liberty, and has a preferred
position in the hierarchy of values. Contractual
rights, therefore, must yield to freedom of
religion. It is only where unavoidably necessary
to prevent an immediate and grave danger to
the security and welfare of the community that
infringement of religious freedom may be
justified, and only to the smallest extent
necessary to avoid the danger.
[Doctrine]
In order to determine whether legislation
unconstitutionally impairs contract obligations,
no unchanging yardstick, applicable at all times
and under all circumstances, by which the
validity of each statute may be measured or
determined, has been fashioned, but every case
must be determined upon its own circumstances.
Legislation impairing the obligation of contracts
can be sustained when it is enacted for the
promotion of the general good of the people,
and when the means adopted to secure that
end are reasonable. Both the end sought and
the means adopted must be legitimate, i.e.,
within the scope of the reserved power of the
state construed in harmony with the
constitutional limitation of that power.
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KAPATIRAN SA MEAT AND Facts: No, Respondent did not act in excess of her
CANNING DIVISION V. FERRER- The petitioner, seeks a review of the resolution jurisdiction.
CALLEJA of public respondent Pura Ferrer-Calleja,
G.R. No. 82914 Director of the BLR, dismissing its appeal from This Court's decision in Victoriano vs. Elizalde
June 20, 1988 the Order of the Med-Arbiter Rasidali C. Rope Workers' Union, upholding the right of
Abdullah ordering a certification election to be members of the IGLESIA NI KRISTO sect NOT to
conducted among the regular daily paid rank join a labor union for being contrary to their
and file employees/workers of Universal religious beliefs, does not bar the members of
Robina Corporation-Meat and Canning Division that sect from forming their own union.
to determine which of the contending unions:
a) TUPAS; The fact that TUPAS was able to negotiate a
b) NEW ULO; and new CBA with ROBINA within the 60-day
c) No union. freedom period of the existing CBA, does not
shall be the bargaining unit of the daily wage foreclose the right of the rival union, NEW ULO,
rank and file employees in the Meat and to challenge TUPAS' claim to majority status, by
Canning Division of the company. filing a timely petition for certification election
on October 13, 1987 before TUPAS' old CBA
From 1984 to 1987 TUPAS was the sole and expired on November 15, 1987 and before it
exclusive collective bargaining representative signed a new CBA with the company on
of the workers in the Meat and Canning Division December 3, 1987.
of the Universal Robina Corporation, with a 3-
year collective bargaining agreement (CBA). As pointed out by Med-Arbiter Abdullah, a
"certification election is the best forum in
Within the freedom period of 60 days prior to ascertaining the majority status of the
the expiration of its CBA, TUPAS filed an contending unions wherein the workers
amended notice of strike as a means of themselves can freely choose their bargaining
pressuring the company to extend, renew, or representative thru secret ballot." Since it has
negotiate a new CBA with it. not been shown that this order is tainted with
unfairness, this Court will not thwart the holding
The NEW ULO, composed mostly of workers of a certification election.
belonging to the IGLESIA NI KRISTO sect,
registered as a labor union. [Doctrine]
The right of members of the Iglesia ni Kristo sect
TUPAS staged a strike. ROBINA obtained an not to join a labor union for being contrary to
injunction against the strike, resulting in an their religious beliefs does not bar the members
- 221 -
agreement to return to work and for the parties of that sect from forming their own union.
to negotiate a new CBA.
The next day, NEW ULO, claiming that it has

"the majority of the daily wage rank and file
employees numbering 191," filed a petition for
a certification election at the BLR.
TUPAS moved to dismiss the petition for being

defective in form and that the members of the
NEW ULO were mostly members of the Iglesia
ni Kristo sect which three (3) years previous
refused to affiliate with any labor union. It also
accused the company of using the NEW ULO to
defeat TUPAS' bargaining rights.
ISSUE:
Whether or not the public respondent acted in
excess of her jurisdiction and with grave abuse
of discretion in affirming the Med-Arbiter's
order for a certification election.
Cancellation of Registration
Labor Code: Arts. 245, 246, 247; Rule VIII
Omnibus Rules, Book V, Rule XIV-XV, as amended by D.O. 40-03

SAMMA-LIKHA vs. SAMMA Facts: 1. No. Requirement of Certificate of Non-
Corporation SAMMA-LIKHA filed a petition for certification Forum Shopping is not required in a
G.R. No. 167141 election DOLE. It claimed that: (1) it was a local Petition for Certification Election.
March 13, 2009 chapter of the LIKHA Federation, a legitimate
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labor organization registered with the DOLE; The requirement for a certificate of non-forum
(2) it sought to represent all the rank-and-file shopping refers to complaints, counter-claims,
employees of respondent Samma Corporation; cross-claims, petitions or applications where
(3) there was no other legitimate labor contending parties litigate their respective
organization representing these rank-and-file positions regarding the claim for relief of the
employees; (4) respondent was not a party to complainant, claimant, petitioner or applicant.
any collective bargaining agreement and (5) no A certification proceeding, even though
certification or consent election had been initiated by a "petition," is not a litigation but
conducted within the employer unit for the last an investigation of a non-adversarial and fact-
12 months prior to the filing of the petition. finding character.
Respondent moved for the dismissal of the Such proceedings are not predicated upon an
petition arguing that (1) LIKHA Federation allegation of misconduct requiring relief, but,
failed to establish its legal personality; (2) rather, are merely of an inquisitorial nature.
petitioner failed to prove its existence as a The Board's functions are not judicial in nature,
local chapter; (3) it failed to attach the but are merely of an investigative character.
certificate of non-forum shopping and (4) it had The object of the proceedings is not the decision
a prohibited mixture of supervisory and rank- of any alleged commission of wrongs nor
and-file employees. asserted deprivation of rights but is merely the
determination of proper bargaining units and
Med-arbiter ordered the dismissal of the the ascertainment of the will and choice of the
petition on the following grounds: (1) lack of employees in respect of the selection of a
legal personality for failure to attach the bargaining representative. The determination
certificate of registration purporting to show its of the proceedings does not entail the entry of
legal personality; (2) prohibited mixture of remedial orders to redress rights, but culminates
rank-and-file and supervisory employees and solely in an official designation of bargaining
(3) failure to submit a certificate of non-forum units and an affirmation of the employees'
shopping. expressed choice of bargaining agent.
Petitioner moved for reconsideration. Acting

Secretary, treating the MR as an appeal, 2. Yes, petitioner had legal personality.
rendered a decision reversing the order of the LIKHA was granted legal personality as a
med-arbiter. federation under certificate of registration no. x
x x. Subsequently, petitioner as its local chapter
Meanwhile, the RD of DOLE issued a resolution was issued its charter certificate no. x x x. With
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revoking the charter certificate of petitioner as certificates of registration issued in their favor,
local chapter of LIKHA Federation on the they are clothed with legal personality as
ground of prohibited mixture of supervisory legitimate labor organizations.
and rank-and-file employees and non-
compliance with the attestation clause under Such legal personality cannot thereafter be
paragraph 2 of Article 235 of the Labor Code. subject to collateral attack but may be
Petitioner moved for the reconsideration of this questioned only in an independent petition for
resolution cancellation of certificate of registration. Unless
petitioner’s union registration is cancelled in
Respondent filed a petition for certiorari in the independent proceedings, it shall continue to
CA. It ruled that Administrative Circular No. 04- have all the rights of a legitimate labor
94 which required the filing of a certificate of organization, including the right to petition for
non-forum shopping applied to petitions for certification election.
certification election. It also found that
petitioner had no legal standing to file the Furthermore, the grounds for dismissal of a
petition for certification election because itspetition for certification election based on the
members were a mixture of supervisory and lack of legal personality of a labor
rank-and-file employees organization are the following: (a) petitioner is
not listed by the Regional Office or the Bureau
Issues: of Labor Relations in its registry of legitimate
1. Whether a certificate for non-forum labor organizations or (b) its legal personality
shopping is required in a petition for has been revoked or cancelled with finality in
certification election. accordance with the rules.
2. Whether petitioner had the legal
personality to file the petition for As mentioned, respondent filed a petition for
certification election. cancellation of the registration of petitioner on
December 14, 2002. In a resolution dated April
14, 2003, petitioner’s charter certificate was
revoked by the DOLE. But on May 6, 2003,
petitioner moved for the reconsideration of this
resolution. Neither of the parties alleged that
this resolution revoking petitioner’s charter
certificate had attained finality.
[Doctrine]
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FORUM SHOPPING. The requirement for a

certificate of non-forum shopping refers to
complaints, counter-claims, cross-claims, petitions
or applications where contending parties
litigate their respective positions regarding the
claim for relief of the complainant, claimant,
petitioner or applicant. A certification
proceeding, even though initiated by a
"petition," is not a litigation but an investigation
of a non-adversarial and fact-finding
character.
LEGAL PERSONALITY. A local/chapter

constituted in accordance with Section 1 of this
Rule shall acquire legal personality from the
date of filing of the complete documents
enumerated therein. Upon compliance with all
the documentary requirements, the Regional
Office or Bureau of Labor Relations shall issue
in favor of the local/chapter a certificate
indicating that it is included in the roster of
legitimate labor organizations. Such legal
personality cannot thereafter be subject to
collateral attack, but may be questioned only in
an independent petition for cancellation of
certificate of registration.
MARIWASA SIAM CERAMICS, Facts: No, the legitimacy of respondent as a labor

INC v. SECRETARY OF THE On May 2005, respondent SMMSC- organization must be affirmed.
DEPARTMENT OF LABOR AND Independent was issued a Certificate of
EMPLOYMENT Registration as a legitimate labor organization While it is true that the withdrawal of support
G.R. No. 183317 by the Department of Labor and Employment. may be considered as a resignation from the
December 21, 2009
union, the fact remains that at the time of the
On June 2005, petitioner Mariwasa Siam union’s application for registration, the affiants
Ceramics, Inc. filed a Petition for Cancellation were members of respondent and they
- 225 -
of Union Registration against respondent, comprised more than the required 20%
claiming that the latter violated Article 234 of membership for purposes of registration as a
the Labor Code for not complying with the 20% labor union. Article 234 of the Labor Code
requirement, and that it committed massive merely requires a 20% minimum membership
fraud and misrepresentation in violation of during the application for union registration. It
Article 239 of the same code. does not mandate that a union must maintain
the 20% minimum membership requirement all
The petitioner insists that respondent failed to throughout its existence.
comply with the 20% union membership
requirement for its registration as a legitimate Respondent asserts that it had a total of 173
labor organization because of the disaffiliation union members at the time it applied for
from the total number of union members of 102 registration. Two names were repeated in
employees who executed affidavits recanting respondent’s list and had to be deducted, but
their union membership. the total would still be 171 union members.
Further, out of the four names alleged to be no
Issue: longer connected with petitioner, only two
Whether the private respondent union failed to names should be deleted from the list since
comply with the 20% membership requirement Diana Motilla and T.W. Amutan resigned from
and whether it committed misrepresentation, petitioner only after respondent’s registration
fraud or false statement. had already been granted. Thus, the total union
membership at the time of registration was
169. Since the total number of rank-and-file
employees at that time was 528, 169
employees would be equivalent to 32% of the
total rank-and-file workers complement, still
very much above the minimum required by law.
For the purpose of de-certifying a union such as

respondent, it must be shown that there was
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; or, in
connection with the election of officers, the
minutes of the election of officers, the list of
- 226 -
voters, or failure to submit these documents

together with the list of the newly elected-
appointed officers and their postal addresses
to the BLR.
The bare fact that two signatures appeared

twice on the list of those who participated in the
organizational meeting would not, to our mind,
provide a valid reason to cancel respondent’s
certificate of registration. The cancellation of a
union’s registration doubtless has an impairing
dimension on the right of labor to self-
organization. For fraud and misrepresentation
to be grounds for cancellation of union
registration under the Labor Code, the nature
of the fraud and misrepresentation must be
grave and compelling enough to vitiate the
consent of a majority of union members.
In this case, we agree with the BLR and the CA
that respondent could not have possibly
committed misrepresentation, fraud, or false
statements. The alleged failure of respondent to
indicate with mathematical precision the total
number of employees in the bargaining unit is
of no moment, especially as it was able to
comply with the 20% minimum membership
requirement.
Even if the total number of rank-and-file
employees of petitioner is 528, while
respondent declared that it should only be 455,
it still cannot be denied that the latter would
have more than complied with the registration
requirement.
[Doctrine]
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For fraud and misrepresentation to be grounds

for cancellation of union registration under the
Labor Code, the nature of the fraud and
misrepresentation must be grave and
compelling enough to vitiate the consent of a
majority of union members.
Heritage Hotel Manila (Grand Facts: No, failure to comply with reportorial
Plaza Hotel Corp.) v. On October 11, 1995, respondent filed with requirements should not necessarily lead to
NUWHRAIN-HHMSC the DOLE a petition for certification election. the cancellation of union registration.
G.R. No. 178296 The Med-Arbiter granted the petition and
January 12, 2011 ordered the holding of a certification election. Article 238 and 239 [old provisions]2 of the
On appeal, the DOLE Secretary affirmed the Labor Code gives the Regional Director ample
Med-Arbiter’s order and remanded the case to discretion in dealing with a petition for
the Med-Arbiter for the holding of a cancellation of a union’s registration,
preelection conference. Petitioner filed a motion particularly, determining whether the union still
for reconsideration, but it was denied. meets the requirements prescribed by law. It is
sufficient to give the Regional Director license to
Subsequently, petitioner discovered that treat the late filing of required documents as
respondent had failed to submit to the BLR its sufficient compliance with the requirements of
annual financial report for several years and the law. After all, the law requires the labor
the list of its members since it filed its organization to submit the annual financial
registration papers in 1995. Consequently, report and list of members in order to verify if
petitioner filed a Petition for Cancellation of it is still viable and financially sustainable as an
Registration of respondent, on the ground of the organization so as to protect the employer and
non-submission of the said documents. Petitioner employees from fraudulent or fly-by-night
prayed that respondent’s Certificate of unions. With the submission of the required
Creation of Local/Chapter be cancelled, and its documents by respondent, the purpose of the
name be deleted from the list of legitimate law has been achieved, though belatedly.
labor organizations. It further requested the
2 ART. 238. CANCELLATION OF REGISTRATION; APPEAL

The certificate of registration of any legitimate labor organization, whether national or local, shall be canceled by the Bureau if it has reason to believe, after due hearing, that the said labor organization no longer meets one or
more of the requirements herein prescribed.
ART. 239. GROUNDS FOR CANCELLATION OF UNION REGISTRATION.
The following shall constitute grounds for cancellation of union registration:
(d) Failure to submit the annual financial report to the Bureau within thirty (30) days after the closing of every fiscal year and misrepresentation, false entries or fraud in the preparation of the financial report itself;
(i) Failure to submit list of individual members to the Bureau once a year or whenever required by the Bureau.
- 228 -
suspension of the certification election We cannot ascribe abuse of discretion to the

proceedings. Regional Director and the DOLE Secretary in
denying the petition for cancellation of
Petitioner posits that once it is determined that respondent’s registration. The union members
a ground enumerated in Article 239 of the and, in fact, all the employees belonging to the
Labor Code is present, cancellation of appropriate bargaining unit should not be
registration should follow; it becomes the deprived of a bargaining agent, merely
ministerial duty of the Regional Director to because of the negligence of the union officers
cancel the registration of the labor who were responsible for the submission of the
organization, hence, the use of the word "shall." documents to the BLR.
Petitioner points out that the Regional Director
has admitted in its decision that respondent Labor authorities should, indeed, act with
failed to submit the required documents for a circumspection in treating petitions for
number of years; therefore, cancellation of its cancellation of union registration, lest they be
registration should have followed as a matter accused of interfering with union activities. In
of course. resolving the petition, consideration must be
taken of the fundamental rights guaranteed by
Nevertheless, the certification election pushed Article XIII, Section 3 of the Constitution, i.e., the
through. Respondent emerged as the winner. rights of all workers to self-organization,
collective bargaining and negotiations, and
Issue: peaceful concerted activities. Labor authorities
Whether the failure to comply with the statutory should bear in mind that registration confers
requirements of filing financial reports and the upon a union the status of legitimacy and the
list of its members is sufficient ground for the concomitant right and privileges granted by
cancellation of registration of the respondent as law to a legitimate labor organization,
a labor union. particularly the right to participate in or ask for
certification election in a bargaining unit. Thus,
the cancellation of a certificate of registration is
the equivalent of snuffing out the life of a labor
organization. For without such registration, it
loses - as a rule - its rights under the Labor
Code.
It is worth mentioning that the Labor Code’s

provisions on cancellation of union registration
- 229 -
and on reportorial requirements have been

recently amended by R.A. No. 948, which
lapsed into law on May 25, 2007 and became
effective on June 14, 2007. The amendment
sought to strengthen the workers’ right to self-
organization and enhance the Philippines’
compliance with its international obligations as
ILO Convention No. 87, pertaining to the non-
dissolution of workers’ organizations by
administrative authority. Thus, R.A. No. 9481
amended Article 239.
R.A. No. 9481 also inserted in the Labor Code
Article 242-A, which provides that failure to
comply with the reportorial requirements shall
not be a ground for cancellation of union
registration but shall subject the erring officers
or members to suspension, expulsion from
membership, or any appropriate penalty.
It is undisputed that appellee failed to submit

its annual financial reports and list of individual
members in accordance with Article 239 of the
Labor Code. However, the existence of this
ground should not necessarily lead to the
cancellation of union registration. Article 239
recognizes the regulatory authority of the State
to exact compliance with reporting
requirements. Yet there is more at stake in this
case than merely monitoring union activities and
requiring periodic documentation thereof.
The more substantive considerations involve the

constitutionally guaranteed freedom of
association and right of workers to self-
organization. Also involved is the public policy
- 230 -
to promote free trade unionism and collective

bargaining as instruments of industrial peace
and democracy. An overly stringent
interpretation of the statute governing
cancellation of union registration without regard
to surrounding circumstances cannot be allowed.
Otherwise, it would lead to an unconstitutional
application of the statute and emasculation of
public policy objectives. Worse, it can render
nugatory the protection to labor and social
justice clauses that pervades the Constitution
and the Labor Code.
Moreover, submission of the required documents

is the duty of the officers of the union. It would
be unreasonable for this Office to order the
cancellation of the union and penalize the
entire union membership on the basis of the
negligence of its officers.
At any rate, we note that on 19 May 2000,
appellee had submitted its financial statement
for the years 1996-1999. With this submission,
appellee has substantially complied with its
duty to submit its financial report for the said
period. To rule differently would be to
preclude the union, after having failed to meet
its periodic obligations promptly, from taking
appropriate measures to correct its omissions.
For the record, we do not view with favor
appellee’s late submission. Punctuality on the
part of the union and its officers could have
prevented this petition.
[Doctrine]
Failure to file financial reports and list of union
- 231 -
members shall not be a ground for cancellation

of union registration but shall subject the erring
officers or members to suspension, expulsion
from membership, or any appropriate penalty.
LEGEND INTERNATIONAL Facts: No, it’s legal personality cannot be collaterally

RESORTS LIMITED vs. KILUSANG Petitioner KML filed with Med-Arbitration Unit of the attacked. Based on the foregoing jurisprudence, it is
MANGGAGAWA NG LEGENDA DOLE a Petition for Certification Election. Petitioner clear that a certification election may be conducted
(KML- INDEPENDENT alleged that it is a legitimate labor organization. during the pendency of the cancellation
G.R. No. 169754 However, respondent Legend moved to dismiss the proceedings. This is because at the time the petition
February 23, 2011 petition alleging that KML is not a legitimate labor for certification was filed, the petitioning union is
organization because its membership is a mixture of presumed to possess the legal personality to file the
rank-and-file and supervisory employees in same. There is therefore no basis for LEGENDs
violation of Art. 245 of the Labor Code. KML assertion that the cancellation of KMLs certificate of
argued that even if 41 of its members are indeed registration should retroact to the time of its issuance
supervisory employees and therefore excluded from or that it effectively nullified all of KMLs activities,
its membership, the certification election could still including its filing of the petition for certification
proceed because the required number of the total election and its demand to collectively bargain.
rank and file employees necessary for certification
purposes is still sustained. KML also claimed that its In Laguna Autoparts Manufacturing Corporation v.
legitimacy as a labor union could not be collaterally Office of the Secretary, Department of Labor and
attacked in the certification election proceedings but Employment, the Court ruled that such legal
only through a separate and independent action for personality may not be subject to a collateral attack
cancellation of union registration. but only through a separate action instituted
particularly for the purpose of assailing it.
Med-Arbiter ruled in favor of Petitioner. KML
appealed to Sec. of DOLE which reversed the The legal personality of a legitimate labor
decision of the Med- Arbiter stating that KMLs organization x x x cannot be subject to a collateral
legitimacy as a union could not be collaterally attack. The law is very clear on this matter. x x x
attacked, citing Section 5, Rule V of Department The Implementing Rules stipulate that a labor
Order No. 9, series of 1997. In a Resolution dated organization shall be deemed registered and
August 20, 2002, the Office of the Secretary of vested with legal personality on the date of
DOLE denied LEGENDs motion for reconsideration. It issuance of its certificate of registration. Once a
opined that Section 11, paragraph II (a), Rule XI of certificate of registration is issued to a union, its
Department Order No. 9 requires a final order of legal personality cannot be subject to a collateral
cancellation before a petition for certification attack. In may be questioned only in an
election may be dismissed on the ground of lack of independent petition for cancellation in accordance
legal personality. with Section 5 of Rule V, Book V of the
- 232 -
Implementing Rules.
Issue:
Whether the legal personality of KML can be [Doctrine]
collaterally attacked An order to hold a certification election is proper
despite the pendency of the petition for cancellation
of the registration certificate of the respondent
union. The rationale for this is that at the time the
respondent union filed its petition, it still had the
legal personality to perform such act absent an
order directing the cancellation.
REPUBLIC OF THE PHILIPPINES, Facts: (1) No, it is not a ground for the dismissal of the
represented by DOLE v. KFWU (Kawashima Free Workers Union) filed with petition. The Court held that after a labor
KAWASHIMA TEXTILE DOLE Regional Office No. IV, a Petition for organization has been registered, it may exercise
GR No. 160352 Certification Election to be conducted in the all the rights and privileges of a legitimate labor
July 23, 2008 bargaining unit composed of 145 rank-and-file organization. Any mingling between supervisory
employees of respondent. and rank-and-file employees in its membership
cannot affect its legitimacy for that is not among the
Respondent-company filed a Motion to Dismiss the grounds for cancellation of its registration, unless
petition on the ground that KFWU did not acquire such mingling was brought about by
any legal personality because its membership of misrepresentation, false statement or fraud under
mixed rank-and-file and supervisory employees Article 239 of the Labor Code. All said, while the
violated Article 245 of the Labor Code, and its latest issuance is R.A. No. 9481, the 1997 Amended
failure to submit its books of account contravened Omnibus Rules, as interpreted by the Court in
the ruling of the Court in Progressive Development Tagaytay Highlands, San Miguel and Air
Corporation v. Secretary, Department of Labor and Philippines, had already set the tone for it. Toyota
Employment. and Dunlop no longer hold sway in the present
altered state of the law and the rules.
Med-Arbiter Bactin found KFWU’s legal personality Consequently, the Court reverses the ruling of the
defective and dismissed its petition for certification CA and reinstates that of the DOLE granting the
election, stating that, Since petitioner’s members are petition for certification election of KFWU.
mixture of rank and file and supervisory employees,
petitioner union, at this point in time, has not (2) No, employer cannot attack the legitimacy of
attained the status of a legitimate labor a labor organization by filing a motion to
organization. Petitioner should first exclude the dismiss. Except when it is requested to bargain
supervisory employees from it membership before it collectively, an employer is a mere bystander to
can attain the status of a legitimate labor any petition for certification election; such
organization. proceeding is non-adversarial and merely
- 233 -
Respondent filed with DOLE Regional Office No. IV investigative, for the purpose thereof is to
a Petition for Cancellation of Charter/Union determine which organization will represent the
Registration of KFWU,13 the final outcome of which,employees in their collective bargaining with the
unfortunately, cannot be ascertained from the employer. The choice of their representative is the
records. exclusive concern of the employees; the employer
cannot have any partisan interest therein; it cannot
KFWU appealed to the DOLE which granted the interfere with, much less oppose, the process by
appeal; ordered the case be remanded to the filing a motion to dismiss or an appeal from it; not
office of origin for the immediate conduct of even a mere allegation that some employees
certification election xxx CA reversed. MR denied. participating in a petition for certification election
Hence, this petition. are actually managerial employees will lend an
employer legal personality to block the certification
election. The employer’s only right in the proceeding
Issues: is to be notified or informed thereof.
(1) Whether or not a mixed membership of rank-
and-file and supervisory employees in a union is a The amendments to the Labor Code and its
ground for the dismissal of a petition for implementing rules have buttressed that policy even
certification election. more.
(2) Whether an employer like respondent may [Doctrine]
collaterally attack the legitimacy of a labor The inclusion in a union of disqualified employees is
organization by filing a motion to dismiss the latter’s not among the grounds for cancellation of union
petition for certification election. registration, unless such inclusion is due to
misrepresentation, false statement or fraud under
the circumstances enumerated in Sections (a) and (c)
of Article 239 of the Labor Code
DHL PHILS. UNITED RANK AND Facts: A certification election was conducted among No, it is not valid. Another election should be made.
FILE ASSOCIATION v. BUKLOD the regular rank and file employees in the main Under Section 13 of the Rules Implementing Book V
NG MANGAGAWA NG DHL office and the regional branches of DHL Philippines (Labor Relations) of the Labor Code, as amended,
PHILS. Corporation. The contending choices were petitioner the election officer’s authority to certify the results
G.R. No. 152094 and “no union.” On the basis of the results of the of the election is limited to situations in which there
July 22, 2004. certification election, with petitioner receiving 546 has been no protest filed; or if there has been any,
votes and “no union” garnering 348 votes, the it has not been perfected or formalized within five
election officer certified the former as the sole and days from the close of the election proceedings.
exclusive bargaining agent of the rank and file
employees of the corporation. The circumstances in the present case show that the
employees did not sleep on their rights. Hence,
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Thereafter, Respondent Buklod ng Manggagawa ng their failure to follow strictly the procedural
DHL Philippines Corporation (BUKLOD) filed with the technicalities regarding the period for filing their
Industrial Relations Division of the DOLE a Petitionprotest should not be taken against them. Mere
for the nullification of the certification election. The
technicalities should not be allowed to prevail over
officers of petitioner were charged with committing the welfare of the workers. What is essential is that
fraud and deceit in the election proceedings, they be accorded an opportunity to determine
particularly by misrepresenting to the voter- freely and intelligently which labor organization
employees that it was an independent union, when it shall act on their behalf. Having been denied this
was in fact an affiliate of the Federation of Free opportunity by the betrayal committed by
Workers (FFW). petitioner’s officers in the present case, the
employees were prevented from making an
This misrepresentation was supposedly the basis for intelligent and independent choice.
their selection of petitioner in the certification
election. Allegedly supporting this claim was the The making of false statements or
fact that those whom it had misled allegedly misrepresentations that interfere with the free choice
withdrew their membership from it and subsequently of the employees is a valid ground for protest. A
formed themselves into an independent union. The certification election may be set aside for
latter union, BUKLOD, was issued a Certificate of misstatements made during the campaign, where 1)
Registration by DOLE. a material fact has been misrepresented in the
campaign; 2) an opportunity for reply has been
Issue: Whether the certification election is valid. lacking; and 3) the misrepresentation has had an
impact on the free choice of the employees
participating in the election.
[Doctrine]
The making of false statements or
misrepresentations that interfere with the free choice
of the employees is a valid ground for protest.
ASIAN INSTITUTE OF Facts: Yes, the petition is proper. In Holy Child Catholic
MANAGEMENT v. ASIAN Petitioner Asian Institute of Management (AIM) is a School v. Hon. Sto. Tomas, the Court declared that
INSTITUTE OF MANAGEMENT duly registered non-stock, non-profit educational “[i]n case of alleged inclusion of disqualified
FACULTY ASSOCIATION institution. Respondent Asian Institute of employees in a union, the proper procedure for an
G.R. No. 207971 Management Faculty Association (AFA) is a labor employer like petitioner is to directly file a petition
January 23, 2017 organization composed of members of the AIM for cancellation of the union’s certificate of
faculty, duly registered under Certificate of registration due to misrepresentation, false
Registration. On May 16, 2007, AFA filed a petition statement or fraud under the circumstances
for certification election seeking to represent a enumerated in Article 239 of the Labor Code, as
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bargaining unit at AIM consisting of 40 faculty amended.”

members. AIM opposed the petition claiming that On the basis of the ruling in the above cited case, it
the members are neither rank-and-file nor can be said that petitioner was correct in filing a
supervisory, but managerial employees. On July 11, petition for cancellation of respondent’s certificate
2007, AIM filed a petition for cancellation of AFA’s of registration.
certificate of registration on the grounds of
misrepresentation in registration and that they are AIM’s sole ground for seeking cancellation of
composed of managerial employees who are respondent’s certificate of registration — that its
prohibited from organizing as a union. On August members are managerial employees and for this
30,2007, the Med-Arbiter issued an order denying reason, its registration is thus a patent nullity for
the petition for certification election on the ground being an absolute violation of Article 245 of the
that AIM’s faculty members are managerial Labor Code which declares that managerial
employees. The Order was appealed by AFA employees are ineligible to join any labor
before the Labor Secretary and was reversed. organization — is, in a sense, an accusation that
respondent is guilty of misrepresentation for
In another order, the DOLE-NCR RD granted the registering under the claim that its members are not
petition of AIM for cancellation of the certificate of managerial employees.
registration of AFA and ordered the delisting from
the roster of legitimate labor organizations. AFA However, the issue of whether respondent’s
appealed before the Bureau of Labor Relations members are managerial employees is still pending
where it reversed the same and ordered retention resolution by way of petition for review on
of AFA in the roster. AIM appealed both orders to certiorari in G.R. No. 197089, which is the
the CA and the CA ruled that with regard to petition culmination of all proceedings in DOLE Case No.
for certification election, the bargaining unit with NCR-OD-M-0705-007 — where the issue relative
AIM sought to be represented is composed of to the nature of respondent’s membership was first
managerial employees who are not eligible to join, raised by petitioner itself and is there fiercely
assist, or form a labor organization. AFA is not a contested.
legitimate labor organization that may conduct a
certification election. With regard to the petition for The resolution of this issue cannot be preempted;
cancellation of certificate of registration, there is no until it is determined with finality in G.R. No.
grave abuse of discretion on the part of the Bureau 197089, the petition for cancellation of
of Labor Relations. The grounds for cancellation respondent’s certificate of registration on the
under the Labor Code are exclusive. No other grounds alleged by petitioner cannot be resolved.
grounds is acceptable except for the 3 grounds As a matter of courtesy and in order to avoid
under Article 239. conflicting decisions, the SC resolved to await the
resolution of the petition in G.R. No. 197089.
Issue:
[Doctrine]
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Whether or not the petition for cancellation is the In case of alleged inclusion of disqualified
proper remedy filed in this case. employees in a union, the proper procedure for an
employer like petitioner is to directly file a petition
for cancellation of the union’s certificate of
registration due to misrepresentation, false
statement or fraud under the circumstances
enumerated in Article 239 of the Labor Code, as
amended.
DE OCAMPO MEMORIAL Facts: No, it should not be revoked.

SCHOOLS, INC. v. BIGKIS Petitioner De Ocampo Memorial Schools, a domestic The respondents did not violate any regulation for
MANGGAGAWA sa DE OCAMPO corporation duly-organized and existing under the them to have grounds for cancelation of their Union
MEMORIAL SCHOOL, INC. laws of the Philippines filed a Petition for Registration. BMDOMSI Union was able to testify to
G.R. No. 192648 Cancellation of Certificate of Registration with the the court that there were no misrepresentation,
March 15, 2017 Department of Labor and Employment - National mixed membership and inappropriate bargaining
Capital Region against respondent Bigkis unit in their union. The CA ruled the according to
Manggagawa ng De Ocampo Memorial School, Inc. Article 247 of the Labor Code provides: Art. 247.
dated March 4, 2004. Stating in the petition the Grounds for Cancellation of Union Registration. The
grounds of revocation of registration 1.) following may constitute grounds for cancellation of
Misrepresentation of declaring the officers and union registration:
members 2.) Mixed membership of rank file 3.)
Inappropriate bargaining unit. A Comment- 1.) Misrepresentation, false statement or fraud in
Opposition was then filed by BMDOMSI, denying connection with the adoption or ratification of the
De Ocampo's allegations and claiming that the constitution and by-laws or amendments thereto, the
latter only wants to impede the formation of the minutes of ratification, and the list of members who
union. took part in the ratification;
A decision of Acting Regional Director Ciriaco A. 2.)Misrepresentation, false statements or fraud in

Lagunzad III of the DOLE-NCR ruled that BMDOMSI connection with the election of officers, minutes of
committed misrepresentation by making it appear the election of officers, and the list of voters;
that the bargaining unit is composed of faculty and
technical employees, dated July 26, 2004. 3.) Voluntary dissolution by the members.
The respondents then filed an appeal to Bureau of For fraud and misrepresentation to constitute
Labor Relations. On December 29, 2004, a decision grounds for cancellation of union registration under
was released by BLR reversing the Regional the Labor Code, the nature of the fraud and
Director's finding of misrepresentation, false misrepresentation must be grave and compelling
statement or fraud in BMDOMSI’s application for enough to vitiate the consent of a majority of union
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registration. members. De Ocampo insists that “by conveniently

disregarding” BMDOMMC’s existence during the
According to BLR the petitioner failed to present filing of its application, despite having the same set
proof to support its allegation of mixed membership of officers and members, BMDOMSI “had
within respondent union. Certiorari was filed by the misrepresented facts, made false statements and
petitioner to the CA seeking to annul and set aside committed fraud in its application for union
the BLR Decision as well as the Resolution dated registration for alleging facts therein which they
January 24, 2005 denying its motion for [know] or ought to have known to be false.” The SC
reconsideration. CA affirmed the Decision of the agrees with the BLR and the CA that BMDOMSI did
BLR. It ruled that there was no misrepresentation, not commit fraud or misrepresentation in its
false statement or fraud in the application for application for registration. In the form “Report of
registration. The respondents were able to Creation of Local Chapter” filed by BMDOMSI, the
substantiate that there have been no applicant indicated in the portion “Description of the
misrepresentation as the members appearing in the Bargaining Unit” that it is composed of “Rank-and-
minutes of the general membership meeting File” and under the “Occupational Classification,” it
BMDOMSI Union, and the list of members who marked “Technical” and “Faculty.”
attended the meeting and ratified the union
constitution and by-laws, are in truth employees of While the CA may have ruled that there is no
the school, though some service the hospital. mutuality or commonality of interests among the
members of BMDOMSI, this is not enough reason to
Although, the CA observed that the members of the cancel its registration. The only grounds on which the
union, who are from academic, non-academic, and cancellation of a union’s registration may be sought
general services, do not perform work of the same are those found in Article 247 of the Labor Code. In
nature and these factors dictate the separation of Tagaytay Highlands International Golf Club
the categories of employees for purposes of Incorporated v. Tagaytay Highlands Employees
collective bargaining, the CA reasoned that such Union-PTGWO, 395 SCRA 699 (2003), we ruled
lack of mutuality and commonality of interest of the that “[t]he inclusion in a union of disqualified
union members is not among the grounds for employees is not among the grounds for
cancellation of union registration under Article 247 cancellation, unless such inclusion is due
of the Labor Code. misrepresentation, false statement or fraud under
the circumstances enumerated in Sections (a) and (c)
Issue: of Article [247] x x x of the Labor Code.” Thus, for
Whether or not De Ocampo Bigkis Manggagawa purposes of decertifying a union, it is not enough to
ng De Ocampo Memorial School, Inc. Union establish that the rank-and-file union includes
Registration should be revoked. ineligible employees in its membership. Pursuant to
paragraphs (a) and (b) of Article 247 of the Labor
Code, it must be shown that there was
misrepresentation, false statement or fraud in
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connection with: (1) the adoption or ratification of

the constitution and bylaws or amendments thereto;
(2) the minutes of ratification; (3) the election of
officers; (4) the minutes of the election of officers;
and (5) the list of voters. Failure to submit these
documents together with the list of the newly
elected-appointed officers and their postal
addresses to the BLR may also constitute grounds for
cancellation, lack of mutuality of interests, however,
is not among said grounds.
[Doctrine]
The only grounds on which the cancellation of a
union’s registration may be sought are those found
in Article 247 of the Labor Code.
ATLAS LITOGRAPHIC SERVICES Facts: No, private respondent is disqualified from

v. LAGUESMA In July 1990, the supervisory, administrative affiliating with a national federation of labor
G.R. No. 96566 personnel, production, accounting and confidential organizations which includes the petitioner's
January 6, 1992 employees of Atlas Lithographic Services, Inc.(ALSI) rank-and-file employees.
affiliated with Kaisahan ng Manggagawang The factual issues in the Adamson case are different
Pilipino, a national labor organization. The local from the present case. First, the rank-and-file
union adopted the name ALSI-SAPPACEA-KAMPIL ( employees in the Adamson case are not directly
Atlas Lithographic Services, Inc. Supervisory, under the supervisors who comprise the supervisors'
Administrative, Personnel, Production, Accounting union. In the case at bar, the rank-and-file
and Confidential Employees Association). employees are directly under the supervisors
Thereafter, Respondent KAMPIL-KATIPUNAN filed organized by one and the same federation.
a certification election so that it can be the sole Second, the national union in the Adamson case did
not actively represent its local chapters. In the
bargaining agent of the supervisory employees. present case, the local union is actively represented
However, petitioners opposed the certification by the national federation. In fact, it was the
election claiming that under Article 245 of the national federation, the KAMPIL-KATIPUNAN, which
Labor Code, the private respondent cannot initially filed a petition for certification in behalf of
represent the supervisory employees for collective the respondent union. Thus, if the intent of the law is
bargaining purposes because the private to avoid a situation where supervisors would merge
respondent also represents the rank-and-file with the rank-and-file or where the supervisors'
employees' union. On the other hand, private labor organization would represent conflicting
interests, then a local supervisors' union should not
respondent contended that despite affiliation with
- 239 -
a national federation, the local union does not lose be allowed to affiliate with the national federation
its personality which is separate, and distinct from of union of rank-and-file employees where that
the national federation. It applies the 1984 federation actively participates in union activity in
Adamson Case that interprets the right of a the company
supervisor’s union to affiliate under the Industrial The prohibition against a supervisors' union joining a
Act. local union of rank-and-file is replete with
jurisprudence. The Court emphasizes that the
Issue: limitation is not confined to a case of supervisors
wanting to join a rank-and-file local union. The
Whether or not, under Article 245 of the Labor prohibition extends to a supervisors' local union
Code, a local union of supervisory employees may applying for membership in a national federation
be allowed to affiliate with a national federation of the members of which include local unions of rank-
labor organizations of rank-and-file employees and and-file employees. The intent of the law is clear
which national federation actively represents its especially where, as in the case at bar, the
affiliates in collective bargaining negotiations with supervisors will be co-mingling with those employees
the same employer of the supervisors and in the whom they directly supervise in their own
implementation of resulting collective bargaining bargaining unit.
agreements.
Supervisors are not prohibited from forming their
own union. What the law prohibits is their
membership in a labor organization of rank-and-
file employees (Art. 245, Labor Code) or their
joining a national federation of rank and-file
employees that includes the very local union which
they are not allowed to directly join.
DE LA SALLE UNIVERSITY Facts: Yes, they may validly affiliate with the same
MEDICAL CENTER v. LAGUESMA The Federation of Free Workers (FFW), a national national federation.
G.R. No. 102084 federation of labor unions, issued a certificate to Supervisory employees have the right to self-
August 12, 1998 DLSUMCCM Supervisory Union Chapter recognizing organization as do other classes of employees save
it as a local chapter. FFW filed on behalf of the only managerial ones. The Constitution states that
union a petition for certification election among the “the right of the people, including those employed
supervisory employees of DLSUMCCM. This in the public and private sectors, to form unions,
petition was opposed by DLSUMCCM on the associations or societies for purposes not contrary to
grounds that several employees who signed the law, shall not be abridged.” Conformably with the
petition for certification election were managerial constitutional mandate, Art. 245 of the Labor Code
employees and that the Union was composed of now provides for the right of supervisory employees
- 240 -
both supervisory and rank and file employees in the to self-organization, subject to the limitation that
company and that the act of supervisory employees they cannot join an organization of rank-and-file
in affiliating with FFW to who the rank and file employees: Supervisory employees shall not be
employees are also affiliated is violative of Article eligible for membership in a labor organization of
245 of the Labor Code. the rank-and-file employees but may join, assist or
form separate labor organizations of their own.
Issue:
Whether unions formed independently by The reason for the segregation of supervisory and
supervisory and rank and file employees of a rank-and-file employees of a company with respect
company may validly affiliate with the same to the exercise of the right to self-organization is
national federation the difference in their interests. Supervisory
employees are more closely identified with the
employer than with the rank-and-file employees. If
supervisory and rank-and-file employees in a
company are allowed to form a single union, the
conflicting interests of these groups impair their
relationship and adversely affect discipline,
collective bargaining, and strikes.
These consequences can obtain not only in cases

where supervisory and rank-and-file employees in
the same company belong to a single union but also
where unions formed independently by supervisory
and rank-and–file employees of a company are
allowed to affiliate with the same national
federation.
Atlas Lithographic Services Inc. v. Laguesma: To

avoid a situation where supervisors would merge
with the rank-and-file or where the supervisors’
labor organization would represent conflicting
interests, then a local supervisors’ union should not
be allowed to affiliate with a national federation of
unions of rank - and-file employees where that
federation actively participates in union activities in
the company. It was explained in that case however
that such a situation would obtain only where two
conditions concur: (1) The rank-and-file employees
- 241 -
are directly under the authority of supervisory

employees. (2) The national federation is actively
involved in union activities in the company.
In this case, although DLSUMCCMSUC and another
union composed of rank-and-file employees of
DLSUMCCM are indeed affiliated with the same
national federation, the FFW, DLSUMCCM has not
presented any evidence showing that the rank-and-
file employees composing the other union are
directly under the authority of the supervisory
employees.
The fact that the two groups of workers are
employed by the same company and the fact that
they are affiliated with a common national
federation are not sufficient to justify the conclusion
that their organizations are actually just one. Their
immediate professional relationship must be
established. The fact that the petition for
certification election in this case was filed by the
FFW on behalf of the local union, while showing
active involvement by the FFW in union activities at
the company, is by itself insufficient to justify a
finding of violation of Art. 245 since there is no
proof that the supervisors who
compose the local union have direct authority over
the rank-and-file employees composing the other
local union which is also affiliated with the FFW.
[Doctrine]
Supervisory employees have the right to self-
organization as do other classes of employees save
only managerial ones.
TAGAYTAY HIGHLANDS v. Facts: No, the CA was correct in affirming the decision
TAGAYTAY HIGHLANDS October 16, 1997 Tagaytay Highlands Employees of the DOLE.
EMPLOYEES UNION – PTGWO Union(THEU), Philippine Transport and General The statutory authority for the exclusion of
G.R. No. 142000 Workers Organization (PTGWO), Local Chapter supervisory employees in a rank-and-file union, and
January 22, 2003 No. 776, a legitimate labor organization said to vice-versa, is Article 245 of the Labor Code, to wit:
- 242 -
represent majority of the rank-and-file employees

of THIGCI, filed a petition for certification election Article 245. Ineligibility of managerial employees
before the DOLE Mediation-Arbitration Unit, to join any labor organization; right of supervisory
Regional Branch No. IV. employees.—Managerial employees are not
eligible to join, assist or form any labor
November 27, 1997, petitioner filed a petition organization. Supervisory employees shall not be
opposing the filing of certification election because eligible for membership in a labor organization of
the list of union members submitted by it was the rank-and-file employees but may join, assist or
defective and fatally flawed as it included the form separate labor organizations of their own.
names and signatures of supervisors, resigned,
terminated and absent without leave (AWOL) While above-quoted Article 245 expressly
employees, as well as employees of The Country prohibits supervisory employees from joining a
Club, Inc., a corporation distinct and separate from rank-and-file union, it does not provide what
THIGCI; and that out of the 192 signatories to the would be the effect if a rank-and-file union counts
petition, only 71 were actual rank-and-file supervisory employees among its members, or
employees of THIGCI. Also, some of the signatures vice-versa.
in the list of union members were secured through
fraudulent and deceitful means, and submitted Moreover, the petition fails since after a certificate
copies of the handwritten denial and withdrawal of of registration is issued to a union, its legal
some of its employees from participating in the personality cannot be subject to collateral attack. It
petition. may be questioned only in an independent petition
for cancellation in accordance with Section 5 of Rule
The union asserted that it complied with all the V, Book IV of the “Rules to Implement the Labor
requirements for valid affiliation and inclusion in the Code” (Implementing Rules) .
roster of legitimate labor organizations pursuant to
DOLE Department Order No. 9, series of 1997, on The inclusion in a union of disqualified employees is
account of which it was duly granted a Certification not among the grounds for cancellation, unless such
of Affiliation by DOLE on October 10, 1997; and inclusion is due to misrepresentation, false statement
that Section 5, Rule V of said Department Order or fraud under the circumstances enumerated in
provides that the legitimacy of its registration Sections (a) and (c) of Article 239 of above-quoted
cannot be subject to collateral attack, and for as Article 239 of the Labor Code.
long as there is no final order of cancellation, it
continues to enjoy the rights accorded to a THEU, having been validly issued a certificate of
legitimate organization. Therefore, the Med-Arbiter registration, should be considered to have already
should, pursuant to Article 257 of the Labor Code acquired juridical personality which may not be
and Section 11, Rule XI of DOLE Department Order assailed collaterally.
No. 09, automatically order the conduct of a
certification election. As for petitioner’s allegation that some of the
- 243 -
signatures in the petition for certification election

On January 28, 1998, DOLE Med-Arbiter ordered were obtained through fraud, false statement and
the holding of a certification election. Further, DOLE misrepresentation, the proper procedure is, as
set aside the Resolution dismissing the petition for reflected above, for it to file a petition for
certification election. MFR denied. cancellation of the certificate of registration, and
not to intervene in a petition for certification
CA denied THIGCI’s Petition for Certiorari and election.
affirmed the DOLE Resolution of dismissal. It held
that while a petition for certification election is an [Doctrine]
exception to the innocent bystander rule, hence, the While above-quoted Article 245 expressly prohibits
employer may pray for the dismissal of such petition supervisory employees from joining a rank-and-file
on the basis of lack of mutuality of interests of the union, it does not provide what would be the effect
members of the union as well as lack of employer- if a rank-and-file union counts supervisory
employee relationship and petitioner failed to employees among its members, or vice-versa.
adduce substantial evidence to support its
allegations
Issue:
Whether the CA erred holding that supervisory
employees and non-employees could simply be
removed from appellees roster of rank-and-file
membership instead of resolving the legitimacy of
respondent union status.
- 244 -
BARGAINING UNIT
Bargaining Unit
Omnibus Rules, Book V, Rule I, Sec. 1 (d, t), as amended by D.O. 40-03

San Miguel, Corp. vs. Laguesma Facts: Yes, they form one single bargaining unit. While
September 21, 1994 prior collective bargaining history is considered in
San Miguel Corp. Supervisors and Exempt determining the appropriate collective bargaining
Employees Union represent the supervisory and unit, the controlling test is the mutuality or
exempt employees of the San Miguel Corporation commonality of interest among the employees
Magnolia Poultry Division in 3 different plants: represented in terms of employment and working
Cabuyao, San Fernando, and Otis. The union filed conditions. In this case, the regular sales personnel in
for a certification election with the DOLE. San the north Luzon area have the same duties and
Miguel Corporation (corporation) opposed on the responsibilities, and substantially similar
grounds that: a) the union included confidential compensation and working conditions. Thus,
employees, ineligible to form or join a union; and b) petitioner cannot insist that its prior collective
the 3 plants should not be considered a single bargaining history is the most persuasive criterion in
bargaining unit. The DOLE held that these determining the appropriateness of the bargaining
employees are confidential employees who, like unit.
managerial employees, are ineligible to form or join
a union. The DOLE also ordered a separate Fundamental factors in determining the appropriate
certification election for each plants. collective bargaining unit are: 1) will of the
employees; 2) substantial mutual interests; 3) prior
collective bargaining history; and 4) similarty of
Issue: Whether the three plants constitute an employment status. Out of these, the test of
appropriate single bargaining unit grouping is mutuality or commonality of interests in
terms of employment and working conditions.
De La Salle v. De La Salle Facts: Yes, they shall be excluded. The Court also affirms
University Employees’ the findings of the voluntary arbitrator that the
Association DLSU Union entered into a 1986 CBA. During the employees of the College of St. Benilde should be
Apr. 12, 2000 60-day freedom period (before expiration of said excluded from the bargaining unit of the rank-and-
CBA), the Union initiated negotiations with DLSU for file employees of Dela Salle University, because the
a new collective bargaining agreement which turned two educational institutions have their own separate
out to be unsuccessful. Another issue in the juridical personality and no sufficient evidence was
- 245 -
negotiations was the scope of the bargaining unit, if shown to justify the piercing of the veil of corporate
it should include employees of CSB. According to the fiction.
Solicitor General, the employees of the College of
St. Benilde should have been included in the [No doctrine in the original re: BU]
bargaining unit of the rank-and-file employees of
the University. The Solicitor General came to this
conclusion after finding "sufficient evidence to justify
the Unions proposal to consider the University and
the CSB as only one entity because the latter is but
a mere integral part of the University".
Issue: Whether the employees of the College of St.

Benilde should be excluded from the bargaining unit
of the rank-and- file employees of DLSU
International School Alliance of Facts: No, they shall be excluded. foreign hires do not
Educators v. Quisumbing belong to the same bargaining unit as the local
June 1, 2000 The International School is a domestic educational hires. A bargaining unit is “a group of employees of
institution established to enable the dependents of a given employer, comprised of all or less than all
foreign diplomatic personnel and other temporary of the entire body of employees, consistent with
residents. Pursuant to PD 732, the School is equity to the employer indicate to be the best
authorized to employ its own teaching personnel suited to serve the reciprocal rights and duties of
selected by it either locally or abroad. Accordingly, the parties under the collective bargaining
the School hires both local and foreign teachers. provisions of the law.” It does not appear that
However, the foreign hires receive more salary than foreign-hires have indicated their intention to be
the local hires, because according to the school, the grouped together with local-hires for purposes of
foreign hires experience a “dislocation factor” and collective bargaining. The collective bargaining
has limited tenure. During the negotiations for a new history in the School also shows that these groups
collective bargaining agreement, the Union were always treated separately. To include
contested the difference in salary rates. This caused foreign-hires in a bargaining unit with local-hires
a deadlock between the parties. The union filed a would not assure either group the exercise of their
notice of strike, but ultimately, the DOLE resolved respective collective bargaining rights.
the conflict in favor of the School. DOLE is of the
opinion that the local hires receive the same benefits The factors in determining the appropriate collective
as the foreign hires. bargaining unit are: a. The will of the employees
(Globe Doctrine); b. The affinity and unity of the
employees’ interest, such as substantial similarity of
- 246 -
Issue: Whether the foreign-hires can be in the same work and studies, or similarity of compensation and
bargaining unit with the local-hires working conditions (Substantial Mutual Interests
Rule); c. Prior collective bargaining history; and d.
Similarity of employment status. 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.
San Miguel Foods v. San Miguel Facts: Yes, it can encompass different types of work.
Corp. Supervisors and Exempt Court affirms the finding of the CA that there should
Union DOLE-NCR conducted pre-election conferences be only one bargaining unit for the employees in
Aug. 10, 2011 where discrepancies as to the list of eligible voters Cabuyao, San Fernando, and Otis of Magnolia
arose. there was a discrepancy in the list of eligible Poultry Products Plant involved in dressed chicken
voters that the SMF and SMCS & EU submitted. SMF processing and Magnolia Poultry Farms engaged in
challenged the eligibility to vote of some employees live chicken operations. Certain factors, such as
on the grounds that some are confidential specific line of work, working conditions, location of
employees, while some are employees engaged in work, mode of compensation, and other relevant
live chicken operations and/orwork in a different conditions do not affect or impede their
plant inconsistent with the ruling in SMCS & EU v. commonality of interest. Although they seem
Laguesma, which is limited to dressed chicken separate and distinct from each other, the specific
processing in Poultry plants in Cabuyao, San tasks of each division are actually interrelated and
Fernando, and Otis. Med-Arbiter issued Resolution there exists mutuality of interests which warrants the
directing parties to appear for opening of formation of a single bargaining unit.
segregated ballots. Since 97% voted Yes, the Med-
Arbiter issued the Order certifying SMCS&EU to be An appropriate bargaining unit is defined as a
the exclusive bargaining agent of the Magnolia group of employees of a given employer,
Poultry Products Plants in Cabuyao, San Fernando, comprised of all or less than all of the entire body
and Otis. Acting DOLE Undersecretary affirmed the of employees, which the collective interest of all the
Order with modification that 4 employees be employees, consistent with equity to the employer,
excluded from the bargaining unit because 2 are indicate to be best suited to serve the reciprocal
members of Magnolia Poultry Processing Plants rights and duties of the parties under the collective
Monthly Employees Union, while the other 2 are bargaining provisions of the law. The basic test of
employees of San Miguel Corporation, which is a an asserted bargaining units acceptability is
separate and distinct entity from petitioner. CA whether or not it is fundamentally the combination
affirmed which will best assure to all employees the exercise
of their collective bargaining rights.
- 247 -
Issue: Whether the bargaining unit can expand to

include employees in a different line of work
and/or employees in a different location
Holy Child Catholic School v. Facts: No, since the concept of a union is different from
HCCS-TELU-PIGLAS a bargaining unit, and a mixture of bargaining
July 23, 2013 The School Union filed a petition for certification units in one union does not equate to dismissal.
election to be the exclusive bargaining agent for The Court ruled that indeed teaching and non-
Holy Child Catholic School. The school opposed this teaching personnel are two separate bargaining
stating that (1) there is commingling in the union, and units. However, such does not equate to dismissing
(2) the union is illegitimate because it is an the petition for certification election. The school
inappropriate bargaining unit for the members appears to have confused the concept of a union,
consists of both teaching and non-teaching and that of a bargaining unit. Since there is a
personnel. The Med-Arbiter dismissed the petition prohibition of commingling teaching and non-
for certification election stating that there should be teaching personnel in one bargaining unit, they have
2 bargaining units: one for teaching, and one for to be separated into two separate bargaining units
non-teaching personnel. The SOLE agreed with here with two separate certification elections to
being 2 bargaining units present, but ordered 2 determine whether the employees in the respective
certification elections (one for each unit). bargaining units desired to be represented by the
school union.
Issue: Whether the certification election is A bargaining unit is a group of employees sought to
dismissible on the ground of improper mixture of be represented by a petitioning union. Such
teaching and non-teaching personnel employees need not be members of a union seeking
the conduct of a certification election. Meanwhile, a
union certified as an exclusive bargaining agent
represents not only its members but also other
employees who are not union members.
Lepanto Consolidated Mining v. Facts: Yes, since the capatazes are not rank-and-file
The Lepanto Capataz Union employees. The capatazes were performing
February 18, 2013 Lepanto Capataz Union (Union for brevity) filed for functions totally different from those performed by
a petition for consent election with the Industrial the rank-and-file employees, and that the
Relations Division of DOLE CAR to represent 139 capatazes were “supervising and instructing the
capatazes of Lepanto. Lepanto opposed the petition miners, mackers and other rank-and-file workers
arguing that the capatazes were already members under them, assess[ing] and evaluat[ing] their
of the LEU, the current EBR. The med-arbiter ruled performance, mak[ing] regular reports and
that the capatazes could form a separate recommend[ing] new systems and procedure of
- 248 -
bargaining unit for they are not rank-and file work, as well as guidelines for the discipline of
employees and ordered for a certification election. employees.” Hence, Med-Arbiter Lontoc concluded,
This was affirmed by the DOLE Secretary. On the the capatazes “differ[ed] from the rank-and-file
day of the certification election, Lepanto opposed and [could] by themselves constitute a separate
and a hearing was conducted. The med-arbiter then bargaining unit.”
ruled certifying the Union as the sole and exclusive
bargaining agent of all capatazes of Lepanto. In any event, we affirm that capatazes or foremen
DOLE Secretary affirmed the med-arbiter. are not rank-and-file employees because they are
an extension of the management, and as such they
may influence the rank-and-file workers under them
Issue: Whether the capatezes could form their own to engage in slowdowns or similar activities
union independently from the rank and file detrimental to the policies, interests or business
objectives of the employers.
Coca-Cola Bottlers Philippines, Facts: No, the technical and professional employees
Inc. vs. Ilocos Professional and form part of a different bargaining unit. As proven
Technical Employees Union IPTEU (Labor Union 1) filed for certification election by the certification of the IMU President as well as
(IPTEU) seeking to represent 22 rank and file professional the CBAs executed between IMU and CCBPI, the 22
September 09, 2015 and technical employees of CCBPI Ilocos Norte. The employees sought to be represented by IPTEU are
employer, CCBPI, then prayed for the denial of the not IMU members and are not included in the CBAs
certification election, arguing the employees are due to reclassification of their positions. If these
confidential in nature. However, the certification documents were false, the IMU should have
election was still conducted. The CCBPI protested manifested its vigorous opposition.
and challenged the 16 votes raising that: those
votes are from employees who are confidential and [No general doctrine in the original re: BU]
are already members and being represented by an
existing union, IMU. Med-Arbiter denied the protest
on the 16 votes and held that the 16 employees are
no longer covered by the existing CBAs.
Issue: Whether there is already a bargaining agent

to represent the rank-and-file professionals and
technical employees
Erson Ang Lee Doing Business as Facts: Yes, the 3 employers being deemed by the law as
Super Lamination v. SMSLS- one single entity. The 3 companies were engaged
NAFLU-KMU In this case, there are 3 Unions, respectively working in the same business and were operated & hired
- 249 -
November 21, 2016 for 3 different corporate entities duly registeredemployees through a common human resource
with the SEC. The 3 Unions filed on the same day, department. Also, the workers of all 3 companies
petitions for Certification Election in their respective
were constantly rotated & periodically assigned to
workplaces. This was opposed by the 3 companies, all 3, to perform the same or similar tasks. The
as represented by one counsel, claiming that there is
common human resource department also imposed
a lack of employer-employee relationship between disciplinary sanctions and directed the daily
the companies and the bargaining units. This is performance of all the members of Unions. Super
because the oppositions, although separately filed,
Lamination included in its payroll & SSS registration,
each argued that the employees sought to be not only its own employees but that of the 2 other
represented by the corresponding union were companies. Ang Lee admitted that it was Super
actually employees of the other 2 companies. Lamination that issued & signed the identification
Initially, the petitions were denied, but the Secretary
cards of the employees who were working for the
of Labor found out that the 3 companies were sister
other 2 companies. Lastly, the 3 companies were all
companies which had a common human resource represented by the same counsel, and interposed
department, which effectively rotated the workers the same arguments. In the present case, there was
among the 3 companies, thus engaging in a work- communal interest among the rank-and-file
pooling scheme. The Secretary of Labor ruled that employees of the three companies based on the
they should be considered as one bargaining unit finding that they were constantly rotated to all
three companies, and that they performed the same
or similar duties whenever rotated. Aside from
Issue: Whether the rank & file employees of Super geographical location, their employment status and
Lamination, Express Lamination, and Express Coat working conditions were so substantially similar as
constitute an appropriate bargaining unit to justify a conclusion that they shared a community
of interest.
While there is no prohibition on the mere act of

engaging in a work-pooling scheme as sister
companies, that act will not be tolerated, and the
sister companies' separate juridical personalities will
be disregarded, if they use that scheme to defeat
the workers' right to collective bargaining. The
employees' right to collectively bargain with their
employers is necessary to promote harmonious
labor-management relations in the interest of sound
and stable industrial peace.
- 250 -
BARGAINING AGENT & CERTIFICATION ELECTION PROCEEDINGS

Labor Code: Arts. 267-272
Omnibus Rules, Book V, Rule I, Sec. 1 (d, h, j, o, p, q, t, ll, ss, bbb, a, tt, ww), Rules VI-X, as amended by D.O. 40, D.O. 40-F-03, series of 2008, and
further amended by D.O. 40-I-15, series of 2015
Duty to Bargain Collectively

Lakas ng Manggagawang Facts: No, LAKAS had never been the bargaining
Makabayan v. Marcelo representative of any and all of the local unions
Enterprises The Marcelo Companies, composed of six then existing in the respondent Marcelo
November 19, 1982 independent enterprises and each represented by Companies. The acts instigated by complainant
local unions which were all affiliated with Philippine LAKAS such as the filing of the Notice of Strike and
Social Security Labor Union (PSSLU), received letters the other strikes were calculated, designed and
from their local unions and also from LAKAS (which intended to compel the respondent Marcelo
claimed that a local union was affiliated therewith) Companies to recognize or bargain with it
requesting for negotiation of new collective notwithstanding that it was an uncertified union, or
bargaining agreements. Confronted with the in the case of respondent Marcelo Tire, to bargain
problem of whom to recognize as the bargaining with it despite the fact that the MUEWA of Paulino
unit, Marcelo suggested to all to settle the question Lazaro was already certified as the sole bargaining
by filing a petition for certification election before agent in said respondent company. These concerted
the Court of Industrial Relations. PSSLU and LAKAS, activities executed and carried into effect at the
interpreting the same as refusal to negotiate, filed instigation and motivation of LAKAS are illegal and
notices of strike which were later withdrawn. violative of the employer's basic right to bargain
Eventually, bargaining negotiations were made, collectively only with the representative supported
subject to LAKAS being able to show proof of by the majority of its employees in each of the
authority to represent the employees, but after bargaining units.
LAKAS received a copy of management's draft of
the bargaining agreement, LAKAS, without filing the Although an employer has the undoubted right to
required notice, declared a strike completely bargain with a bargaining agent whose authority
paralyzing Marcelo. has been established, without the requirement that
the bargaining agent be officially certified by the
National Labor Relations Board as such, if the
Issue: Whether Marcelo Companies had a duty to informally presented evidence leaves a real doubt
collectively bargain with LAKAS as to the issue, the employer has a right to demand
- 251 -
a certification and to refuse to negotiate until such

official certification is presented.
Lakas ng Manggagawang Facts: No, LAKAS had never been the bargaining
Makabayan v. Marcelo representative of any and all of the local unions
Enterprises The Marcelo Companies, composed of six then existing in the respondent Marcelo
November 19, 1982 independent enterprises and each represented by Companies. The acts instigated by complainant
local unions which were all affiliated with Philippine LAKAS such as the filing of the Notice of Strike and
Social Security Labor Union (PSSLU), received letters the other strikes were calculated, designed and
from their local unions and also from LAKAS (which intended to compel the respondent Marcelo
claimed that a local union was affiliated therewith) Companies to recognize or bargain with it
requesting for negotiation of new collective notwithstanding that it was an uncertified union, or
bargaining agreements. Confronted with the in the case of respondent Marcelo Tire, to bargain
problem of whom to recognize as the bargaining with it despite the fact that the MUEWA of Paulino
unit, Marcelo suggested to all to settle the question Lazaro was already certified as the sole bargaining
by filing a petition for certification election before agent in said respondent company. These concerted
the Court of Industrial Relations. PSSLU and LAKAS, activities executed and carried into effect at the
interpreting the same as refusal to negotiate, filed instigation and motivation of LAKAS are illegal and
notices of strike which were later withdrawn. violative of the employer's basic right to bargain
Eventually, bargaining negotiations were made, collectively only with the representative supported
subject to LAKAS being able to show proof of by the majority of its employees in each of the
authority to represent the employees, but after bargaining units.
LAKAS received a copy of management's draft of
the bargaining agreement, LAKAS, without filing the Although an employer has the undoubted right to
required notice, declared a strike completely bargain with a bargaining agent whose authority
paralyzing Marcelo. has been established, without the requirement that
the bargaining agent be officially certified by the
National Labor Relations Board as such, if the
Issue: Whether Marcelo Companies had a duty to informally presented evidence leaves a real doubt
collectively bargain with LAKAS as to the issue, the employer has a right to demand
a certification and to refuse to negotiate until such
official certification is presented.
National Union of Restaurant Facts: No, there was no refusal to bargain. They
Workers (PTUC) V. C1R accepted some demands but refused the others,
April 30, 1964 PTUC (Union) filed a complaint for unfair labor and even left open other demands for future
practice (ULP) against the owners of Tres Hermanas discussion. In the letter containing the Union’s
Restaurant (Company), particularly Mrs. Felisa demands, one of the owners of the Company made
Herrera (one of the owners) on the grounds of 1) marks indicating the demands to which she did not
- 252 -
refusal to bargain with the Union 2) the Company agree with, demands to which she was amenable,
made a counterproposal saying they would only and demands to which she was open for future
bargain with Union if the Union became a company discussion. This indicates that the Company did not
union, and 3) one employee named Martion Briones refuse to bargain. As to the 2nd ground, it was
was separated from service allegedly because he found that the Company did not refuse to bargain
was an organizer and adviser of the Union. The just because it believed that the Union had no
Court of Industrial Relations found for the company.capacity to bargain for not being a duly authorized
bargaining unit (Union was not certified by the CIR;
another Union was claiming to be the authorized
Issue: Whether the Company refused to bargain bargaining unit). They still did so, despite harboring
with the Union for submitting counter-proposals and this belief, as indicated
not being open to all the demands of the Union
There is no refusal to bargain on the part of a
Company that does not agree with all the demands
of a Union. The fact that a Company is willing to
bargain with the Union anent some, albeit not all,
demands, indicates the willingness to enter into a
bargaining agreement.
Liberty Flour Mills Employees Facts: No, there was no illegal dismissal. The CBA was
Association vs. Liberty Flour Mills concluded in 1975 and subsequently certified on
December 29, 1989 Respondents Philippine Labor Alliance Council April 1975. Thus, when the petitioners were
(PLAC) and Liberty Flour Mills, Inc. entered into a dismissed, the CBA was already effective. Clearly,
three-year collective bargaining agreement the petitioners disaffiliated from PLAC and
providing for a daily wage increase. Additionally, rendered themselves subject to dismissal under the
the parties agreed to establish a union shop by union shop clause in the CBA.
imposing "membership in good standing for the
duration of the CBA as a condition for continued It is the policy of the State to promote unionism to
employment" of workers. Petitioners Evaristo and enable the workers to negotiate with management
Biascan, after organizing the union Federation of on the same level and with more persuasiveness
National Democratic Labor Unions, filed with the than if they were to individually and independently
Bureau of Labor Relations a petition for certification bargain for the improvement of their respective
election among the rank-and-file employees of the conditions. To this end, the Constitution guarantees
respondent company. PLAC then expelled the two to them the rights "to self-organization, collective
for disloyalty and demanded their dismissal by the bargaining and negotiations and peaceful
respondent company. Petitioner argues that they concerted actions including the right to strike in
were only exercising the right to self-organization accordance with law." The law has sanctioned
as guaranteed by the Constitution stipulations for the union shop and the closed shop
- 253 -
as a means of encouraging the workers to join and

support the labor union of their own choice as their
Issue: Whether Evarista and Biascan were illegally representative in the negotiation of their demands
dismissed. and the protection of their interest vis-a-vis the
employer.
Colegio De San Juan De Letran Facts: Yes, when it devised ways and means in order to
vs. Association of Employees and prevent the negotiation. Petitioner's actuation
Faculty of Letran Eleonor Ambas emerged as the newly elected show a lack of sincere desire to negotiate
September 13, 2000 President of the respondent union. He wanted to rendering it guilty of unfair labor practice.
continue the renegotiation of the CBA, but the Petitioner's utter lack of interest in bargaining with
petitioner opposed the same, alleging that the CBA the union is obvious in its failure to make a timely
was already prepared for signing. However, when reply to the proposals presented by the latter.
the CBA was sent to the union members for signing, More than a month after the proposals were
they rejected it. Thus, the parties agreed to submitted by the union, petitioner still had not made
disregard the unsigned CBA and to start negotiation any counterproposals. This inaction on the part of
on a new five-year CBA. The union submitted its petitioner prompted the union to file its second
proposals to petitioner, which notified the union that notice of strike on March 13, 1996. Petitioner could
the same was submitted to its Board of Trustees. only offer a feeble explanation that the Board of
Both parties discussed the ground rules for the CBA Trustees had not yet convened to discuss the matter
renegotiations. Unfortunately, the negotiations as its excuse for failing to file its reply. This is a
stopped after receiving information that a new clear violation of Article 250 of the Labor Code
group of employees had filed a petition for governing the procedure in collective bargaining
certification of election.
The "duty to bargain collectively" under Article 252
of the Labor Code requires both parties of the
Issue: Whether petitioner is guilty of unfair labor performance of the mutual obligation to meet and
practice by refusing to bargain with the union when convene promptly and expeditiously in good faith
it unilaterally suspended the ongoing negotiations for the purpose of negotiating an agreement. In
for a new CBA Kiok Loy vs. NLRC, the company's refusal to make
counterproposal to the union's proposed CBA is an
indication of its bad faith. Where the employer did
not even bother to submit an answer to the
bargaining proposals of the union, there is a clear
evasion of the duty to bargain collectively.
San Miguel Corporation Facts: The effectivity of the renegotiated terms of the
Employees Union-Ptgwo vs. CBA shall be for three (3) years. Article 253-A is a
- 254 -
Confesor Petitioner union entered into a CBA with respondent new provision. states that the CBA has a term of five
September 19, 1996 San Miguel Corporation (SMC), effective on June (5) years instead of three years, before the
30, 1989 and for a term of 5-years. On the fifth amendment of the law as far as the representation
year of the CBA, the parties renegotiated for it in aspect is concerned. All other provisions of the CBA
accordance with the terms of the CBA and the Labor shall be negotiated not later than three (3) years
Code. Negotiations started, with the both parties after its execution. The "representation aspect"
submitting their proposals and counterproposals. refers to the identity and majority status of the union
During the negotiations, petitioner insisted that the that negotiated the CBA as the exclusive bargaining
bargaining unit of SMC should also include representative of the appropriate bargaining unit
employees Magnolia and SMFI; and that the concerned. "All other provisions" simply refers to the
renegotiated terms of the CBA shall be effective rest of the CBA, economic as well as non-economic
only for the remaining period of two years. provisions, except representation.
However, Respondent contends that the employees
of Magnolia and SMFI were no longer part of the The framers of the law wanted to maintain industrial
SMC bargaining unit. Thus, the CBA should only be peace and stability by having both management
effective for three more years in accordance with and labor work harmoniously together without any
the Labor Code. disturbance. Thus, no outside union can enter the
establishment within five (5) years and challenge the
status of the incumbent union as the exclusive
Issue: Whether the duration of the renegotiated bargaining agent. Likewise, the terms and conditions
terms of the CBA is to be effective for three years of employment (economic and non-economic) cannot
or for only two years be questioned by the employers or employees
during the period of effectivity of the CBA. The CBA
is a contract between the parties and the parties
must respect the terms and conditions of the
agreement.
Manila Electric Co. vs. Facts: Yes, the Secretary acted arbitrarily and
Quisumbing whimsically. As a rule, affordability, or capacity to
January 27, 1999 Petitioner and respondent employee union re- pay should be considered but cannot be the sole
negotiated the terms of its CBA for the remaining yardstick in determining the wage award,
two years. However, the parties failed to arrive in especially in a public utility like MERALCO. In
terms acceptable to both. Later, the petitioner considering a public utility, the decision maker must
sought to enjoin the striking employees to go back to always consider the public interest aspects of the
work. Later, the Labor Secretary granted Espanol to case; MERALCOs income and the amount of money
conduct conciliation conferences between the available for operating expenses - including labor
parties. The economic and political demands of the costs - are subject to State regulation.
respondent were granted.
- 255 -
A collective bargaining dispute requires

consideration and proper balancing of the interests
Issue: Whether the Labor Secretary committed of the parties to the dispute and of those who might
grave abuse of discretion in granting all the be affected by the dispute. The best way in
economic and political demands of the union approaching this task holistically is to consider the
available objective facts, including, where
applicable, factors such as the bargaining history of
the company, the trends and amounts of arbitrated
and agreed wage awards and the companies
previous CBAs, and industry trends in general.
New Pacific Timber vs. NLRC Facts: Yes, the benefits under the CBA should be
March 17, 2000 extended to those who only became such after it
The NFL was the sole and exclusive bargaining expired; to exclude them would constitute undue
representative for the rank and file employees of discrimination. No new agreement was entered
petitioner. When it started to negotiate for better between the parties pending appeal of the decision
terms and conditions of employment, petitioner in the NLRC. Consequently, the employees from to
showed its resistance and refused to bargain the year 1985 (after expiration of the CBA)
collectively. Later, the LA ordered the company to onwards would be deprived of a substantial amount
recognize the CBA submitted by NFL. However, of monetary benefits if the terms and conditions of
several employees of petitioners claim they were the CBA were not to remain in force and effect
wrongfully excluded from the benefits under the which runs counter to the intent of the Labor Cod to
CBA. curb labor unrest and promote industrial peace.
Article 253 is clear that until a new CBA has been

Issue: Whether the employees hired after the term executed by and between the parties; they are
of the CBA are parties to the agreement and may duly bound to keep the status quo and to continue in
claim benefits thereunder. full force and effect the terms and conditions of the
existing agreement.
Mindanao Terminal And Facts: Yes, "The issues raised by the notice of strike on
Brokerage Service. Inc. vs. wages had been settled and said notice is thus
Confesor Petitioner and respondent entered into a CBA for a terminated." It would therefore seem that at that
May 5, 1997 period of 5-years. On the third year of the CBA, the point, there was already a meeting of the minds of
parties met to renegotiate some of its provisions, the parties. he fact that no agreement was then
including wage increase, vacation and sick leaves, signed is of no moment.
among others. However, the parties were unable to
meet a settlement and reached a deadlock. Later, Art. 253-A refers merely to an "agreement" which,
- 256 -
the company announced its retrenchment program, according to Black’s Law Dictionary is "a coming
prompting the union to file a notice of strike. together of minds; the coming together in accord of
two minds on a given proposition." "Agreement" and
"contract," are indeed similar, although the former is
Issue: Whether the wage increase sought by the broader than the latter because an agreement may
union can retroact to the fourth and fifth years of not have all the elements of a contract. As in the
their CBA case of contracts, however, agreements may be oral
or written. Hence, even without any written evidence
of the Collective Bargaining Agreement made by
the parties, a valid agreement existed in this case
from the moment the minds of the parties met on all
matters they set out to discuss.
Samahang Manggagawa Sa Top Facts: No, the across-the-board wage increase is not
Form vs. NLRC part of the parties CBA. Even in the minutes of their
September 7, 1998 Petitioner was the certified collective bargaining meeting reflects the possibility of applying the
representative of all regular rank and file across-the-board wage scheme, the fact that it was
employees of private respondent Top Form not incorporated in the CBA renders it useless. The
Manufacturing Philippines, Inc. During the minutes only serve as a guide to what happened
negotiation of their CBA, the parties agreed to during the meeting. To start with, if there was
discuss unresolved economic issues. The RTWPB-NCR indeed a promise or undertaking on the part of
issued a wage order, increasing the per day salary private respondent to obligate itself to grant an
of workers. This prompted the union to request the automatic across-the-board wage increase,
implementation of said wage orders. However, they petitioner union should have requested or
demanded that the increase be on an across-the- demanded that such “promise or undertaking” be
board basis. Private respondent refused to accede incorporated in the CBA. After all, petitioner union
to that demand. Instead, it implemented a scheme of has the means under the law to compel private
increases purportedly to avoid wage distortion. respondent to incorporate this specific economic
proposal in the CBA.
Issue: Whether respondent committed an unfair The duty to bargain, under Article 252 of the Labor
labor practice for refusing to grant an across-the Code, includes “executing a contract incorporating
board wage increase. such agreements if requested by either party.”
Rivera vs. Espiritu Facts: Yes, CBA negotiations may be suspended for 10
January 23, 2002 years. The assailed PAL-PALEA agreement was the
PAL pilots affiliated with the Airline Pilots result of voluntary collective bargaining negotiations
Association of the Philippines (ALPAP) went on a undertaken in the light of the severe financial
- 257 -
three-week strike, causing serious losses to thesituation faced by the employer, with the peculiar
financially beleaguered flag carrier. Thus, it was
and unique intention of not merely promoting
forced to adopt a rehabilitation plan and industrial peace at PAL but preventing the latter’s
downsized its labor force. PALEA went on a four-closure. Article 253-A has a two-fold purpose. One
day strike to protest retrenchment measures, to no
is to promote industrial stability and predictability.
avail. PALEA wrote the President of PAL, proposing
Inasmuch as the agreement sought to promote
the suspension of the PAL-PALEA CBA for a periodindustrial peace at PAL during its rehabilitation, said
of ten years agreement satisfies the first purpose of Article 253-
A. The other is to assign specific timetables wherein
negotiations become a matter of right and
Issue: Whether negotiations over the CBA may be requirement. Nothing in Article 253-A, prohibits the
suspended for 10 years parties from waiving or suspending the mandatory
timetables and agreeing on the remedies to enforce
the same.
Jurisdictional Requirements
Kiok Loy v. NLRC, Facts: No, the Union has a valid cause to complain
January 22, 1986 against its Company’s disregard of, and failure to
Pambansang Kilusang Paggawa, a legitimate late live up to, what is enjoined by the Labor Code. It
labor federation, won and was certified by the has been indubitably established that (1)
Bureau of Labor Relations as the sole and exclusive respondent Union was a duly certified bargaining
bargaining agent of the rank-and-file employees of agent; (2) it made a definite request to bargain,
Sweden Ice Cream Plant. It furnished its employer accompanied with a copy of the proposed
two copies of its proposed CBA and requested a Collective Bargaining Agreement, to the Company
counterproposal. However, neither request was not only once but twice which were left unanswered
heard by the company. This prompted the union to and unacted upon; and (3) the Company made no
file a "Notice of Strike” on the ground of unresolved counter proposal whatsoever all of which
economic issues in collective bargaining. The NLRC conclusively indicate lack of a sincere desire to
rules that the employer company is guilty of negotiate.
unjustified refusal to bargain.
Collective bargaining is a mutual responsibility of
the employer and the Union and is characterized as
Issue: Whether the NLRC acted in excess of its a legal obligation. While it is a mutual obligation of
jurisdiction or with grave abuse of discretion the parties to bargain, the employer, however, is
- 258 -
amounting to lack of jurisdiction in rendering the not under any legal duty to initiate contract
challenged decision negotiation. The mechanics of collective bargaining
is 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; and (3) a demand to bargain under
Article 251, par. (a).
ALU v. Ferrer-Calleja Facts: No, the subject CBA is defective. The mechanics of
GR No. L-77282 collective bargaining are set in motion only when
May 5, 1989 Petitioner ALU, through a letter dated May 7, 1986, the following jurisdictional preconditions are
informed GAW Trading, Inc. that majority of the present, namely, (1) possession of the status of
latter's employees have authorized ALU to be their majority representation by the employees'
sole and exclusive bargaining agent (SEBA), and representative; (2) proof of majority representation;
requested a conference with GAW for the execution and (3) a demand to bargain. The standing of ALU
of an initial Collective Bargaining Agreement (CBA). as SEBA is dubious, to say the least. The only
ALU received a letter dated May 12th from GAW, express recognition of ALU as SEBA in the records is
which letter set the meeting on the same date. The in the CBA. There was precipitate haste on the part
following day, May 13th, ALU transmitted to GAW of GAW in recognizing ALU, which recognition
copies of the proposed CBA. 2 days later, ALU and appears to have been based on the self-serving
GAW executed the CBA. claim of ALU that it had the support of the majority
of the employees in the bargaining unit. At the time
In the meantime, on May 9th, 2 unions in the of the supposed recognition, GAW was obviously
company (SPFL and NAMGAW) went on strike after aware that there were other unions existing in the
it failed to get the management of GAW Trading unit. Respondent company's letter is dated May 12,
Inc. to sit for a conference respecting its demands 1986 while the two other unions, went on strike
presented at 11: A.M. on the same day in an effort earlier on May 9, 1986. An additional infirmity of
to pressure GAW Trading Inc. to make a turnabout the collective bargaining agreement involved was
of its standing recognition of ALU as the sole and the failure to post the same in at least two (2)
exclusive bargaining representative of its conspicuous places in the establishment at least five
employees. After the signing of the CBA, one of the days before its ratification. Also, about 64% of the
striking unions filed a petition for certification workers who "ratified" the CBA now strongly
election. repudiate the alleged negotiation and ratification
of the CBA.
Med-Arbiter ruled for the holding of a certification
- 259 -
election in all branches of GAW Trading Inc. as to [Doctrine]

which ALU filed a Motion for Reconsideration. The mechanics of collective bargaining are set in
motion only when the following jurisdictional
Bureau of Labor Relations granted ALU's appeal preconditions are present, namely, (1) possession of
(Motion for Reconsideration) and set aside the the status of majority representation by the
questioned Med-Arbiter Order on the ground that employees' representative; (2) proof of majority
the CBA has been effective and valid and the representation; and (3) a demand to bargain.
contract bar rule applicable.
Issue:
Whether the contract bar rule applies.
Bargaining Agent and Certification Election Proceedings

Republic Facts: No, the PCE cannot be dismissed. The key to the
vs. closure that petitioner seeks could have been
Kawashima KFWU filed with DOLE Regional Office No. IV, a Republic Act (R.A.) No. 9481, Sections 8 and 9.
GR No. 160352 Petition for Certification Election to be conducted in However, R.A. No. 9481 took effect only on June
July 23, 2008 the bargaining unit composed of 145 rank-and-file 14, 2007; hence, it applies only to labor
employees of respondent. representation cases filed on or after said date. As
the petition for certification election subject matter
Respondent-company filed a Motion to Dismiss the of the present petition was filed by KFWU on
petition on the ground that KFWU did not acquire January 24, 2000, R.A. No. 9481 cannot apply to
any legal personality because its membership of it. But then, on June 21, 1997, the 1989 Amended
mixed rank-and-file and supervisory employees Omnibus Rules was further amended by Department
violated Article 245 of the Labor Code, and its Order No. 9, series of 1997 (1997 Amended
failure to submit its books of account contravened Omnibus Rules).
the ruling of the Court in Progressive Development
Corporation v. Secretary, Department of Labor and In the case at bar, as respondent union’s
Employment. membership list contains the names of at least
twenty-seven (27) supervisory employees in Level
Med-Arbiter Bactin found KFWU’s legal personality Five positions. However, in the amendment, the
defective and dismissed its petition for certification requirement under Sec. 2(c) of the 1989 Amended
election, stating that, Since petitioner’s members are Omnibus Rules – that the petition for certification
mixture of rank and file and supervisory employees, election indicate that the bargaining unit of rank-
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petitioner union, at this point [in] time, has not and-file employees has not been mingled with
attained the status of a legitimate labor supervisory employees – was removed. Hence, it
organization. Petitioner should first exclude the cannot be a ground for the dismissal of a PCE.
supervisory employees from its membership before
it can attain the status of a legitimate labor No, an employer cannot collaterally attack the
organization. Respondent filed with DOLE Regional legal personality of the union. The choice of their
Office No. IV a Petition for Cancellation of representative is the exclusive concern of the
Charter/Union Registration of KFWU, the final employees; the employer cannot have any partisan
outcome of which, unfortunately, cannot be interest therein; it cannot interfere with, much less
ascertained from the records. oppose, the process by filing a motion to dismiss or
an appeal from it; not even a mere allegation that
KFWU appealed to the DOLE which granted the some employees participating in a petition for
appeal; ordered the case be remanded to the certification election are actually managerial
office of origin for the immediate conduct of employees will lend an employer legal personality
certification election xxx CA reversed. MR denied. to block the certification election. The employer’s
Hence, this petition. only right in the proceeding is to be notified or
informed thereof. The amendments to the Labor
Code and its implementing rules have buttressed
Issues: that policy even more.
(1) whether a mixed membership of rank-and-file [Doctrine]

and supervisory employees in a union is a ground
for the dismissal of a petition for certification After a labor organization has been registered, it
election; and may exercise all the rights and privileges of a
(2) whether the legitimacy of a duly registered legitimate labor organization. Any mingling
labor organization can be collaterally attacked in a between supervisory and rank-and-file employees
petition for a certification election through a motion in its membership cannot affect its legitimacy for
to dismiss filed by an employer such as Kawashima that is not among the grounds for cancellation of its
Textile Manufacturing Phils., Inc. registration, unless such mingling was brought about
by misrepresentation, false statement or fraud
St. James School of Quezon City Facts: Yes, the election is valid. The members of
v. Samahang Manggagawa sa St. Samahang Manggagawa are employees in the
James PCE filed by the Union was granted and it was Tandang Sora campus. Under its constitution and
GR No. 151326 conducted on June 26, 1999 in the office of the by-laws, Samahang Manggagawa seeks to
November 23, 2005 DOLE in Intramuros. The total eligible voters were represent the motor pool, construction and
149, and out of this, 84 voted. The school filed a transportation employees of the Tandang Sora
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protest challenging the 84 employees who voted. campus. Thus, the computation of the quorum should
Petitioner alleged that they had 179 rank and file be based on the rank and file motor pool,
employees and none of those voted in the said construction and transportation employees of the
election. Further, the petitioner argued that those Tandang Sora campus and not on all the employees
who voted were not their regular employees but in St. James’ five campuses. x x x
rather the construction workers of their contractor,
Arch. Bacoy. The motor pool, construction and transportation
employees of the Tandang Sora campus had 149
Med-Arb. Tomas Falconitin held in favor of the qualified voters at the time of the certification
petitioner. Holding that at the time of the election election. Hence, the 149 qualified voters should be
the 84 who voted were no longer the employees of used to determine the existence of a quorum. Since
the petitioner. The respondent appealed to the a majority or 84 out of the 149 qualified voters
Secretary of Labor, which reversed the decision of cast their votes, a quorum existed in the certification
the Arbiter. election.
It held that union sought to represent the non-
teaching staff of the petitioner. The Med-Arb erred [Doctrine]
in including all the employees of the petitioner
whether teaching or non-teaching. Also, the list All employees who are members of the appropriate
submitted by the petitioner contained only the bargaining unit sought to be represented by the
administrative, teaching, and officer personnel. petitioner at the time of the certification or consent
election shall be qualified to vote.
Issue:
Whether the certification election is valid.
DHL Phils. United Rank and File Facts: No, another certification election should be held.
Association v. Buklod ng Under Section 13 of the Rules Implementing Book V
Manggagawa ng DHL Phils. A certification election was conducted among the (Labor Relations) of the Labor Code, as amended,
GR No. 152094 regular rank and file employees in the main office the election officer’s authority to certify the results
July 22, 2004 and the regional branches of DHL Philippines of the election is limited to situations in which there
Corporation. DHL-URFA-FFW won. has been no protest filed; or if there has been any,
it has not been perfected or formalized within five
Thereafter, Respondent Buklod filed with the days from the close of the election proceedings.
Industrial Relations Division of the DOLE a Petition
for the nullification of the certification election. The The circumstances in the present case show that the
officers of petitioner were charged with committing employees did not sleep on their rights. Hence,
fraud and deceit in the election proceedings, their failure to follow strictly the procedural
particularly by misrepresenting to the voter- technicalities regarding the period for filing their
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employees that it was an independent union, when it protest should not be taken against them. Mere
was in fact an affiliate of the Federation of Free technicalities should not be allowed to prevail over
Workers (FFW). the welfare of the workers. What is essential is that
they be accorded an opportunity to determine
This misrepresentation was supposedly the basis for freely and intelligently which labor organization
their selection of petitioner in the certification shall act on their behalf. Having been denied this
election. Allegedly supporting this claim was the opportunity by the betrayal committed by
fact that those whom it had misled allegedly petitioner’s officers in the present case, the
withdrew their membership from it and subsequently employees were prevented from making an
formed themselves into an independent union. The intelligent and independent choice.
latter union, BUKLOD, was issued a Certificate of
Registration by DOLE. [Doctrine]
Issue: The making of false statements or

misrepresentations that interfere with the free choice
Whether the certification election is valid. of the employees is a valid ground for protest. A
certification election may be set aside for
misstatements made during the campaign, where 1)
a material fact has been misrepresented in the
campaign; 2) an opportunity for reply has been
lacking; and 3) the misrepresentation has had an
impact on the free choice of the employees
participating in the election.
Samma-Likha vs. Samma Corp. Facts: No, a certificate for non-forum shopping is not
GR No. 167141 required. A certification proceeding, even though
March 13, 2009 SAMMA-LIKHA filed a petition for certification initiated by a “petition,” is not a litigation but an
election. Respondent moved for the dismissal of the investigation of a non-adversarial and fact-finding
petition arguing that (1) LIKHA Federation failed to character.
establish its legal personality; (2) petitioner failed
to prove its existence as a local chapter; (3) it failed
to attach the certificate of non-forum shopping and No, it should not be dismissed outright. Unless its
(4) it had a prohibited mixture of supervisory and union registration is cancelled in independent
rank-and-file employees. proceedings, it shall continue to have all the rights
of a legitimate labor organization, including the
Med-arbiter ordered the dismissal. Acting Secretary right to petition for certification election.
Manuel G. Imson, treating the motion for
reconsideration as an appeal, rendered a decision Respondent filed a petition for cancellation of the
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reversing the order of the med-arbiter. He ruled registration of the union. In a resolution, Union A’s
that the legal personality of a union cannot be charter certificate was revoked by the DOLE. The
collaterally attacked but may only be questioned in union moved for the reconsideration of this
an independent petition for cancellation of resolution. Neither of the parties alleged that this
registration. resolution revoking the union’s charter certificate
had attained finality. Hence, the SC ordered the
Issue: case to be remanded.
1. Whether a certificate for non-forum

shopping is required in a petition for [Doctrine]
certification election
2. Whether the PCE should be dismissed The grounds for dismissal of a petition for
certification election based on the lack of legal
personality of a labor organization are the
following: (a) petitioner is not listed by the Regional
Office or the Bureau of Labor Relations in its
registry of legitimate labor organizations or (b) its
legal personality has been revoked or cancelled
with finality in accordance with the rules.
Chris Garments Corporation v. Facts: No, it is not barred by res judicata. The elements of
Hon. Patricia A. Sto Tomas and res judicata are: (1) the first judgment is final; (2)
Chris Garments Workers Union- In 2002, CGW filed a petition for certification court had jurisdiction over the subject matter and the
PTGWO election. CGW sought to represent CGC’s rank-and- parties; (3) judgment on the merits; and (4) identity
GR No. 167426 file employees not covered by its Collective of parties, subject matter, and causes of action. The
January 12, 2009 Bargaining Agreement (CBA) with Super, the 4th element is missing. In this case, the SOLE
certified bargaining agent of the rank-and-file dismissed the first petition as it was filed outside the
employees. Med-Arbiter dismissed the petition for 60-day freedom period. At that time therefore, the
being filed by non-employees and before the union has no cause of action since they are not yet
freedom period. The Secretary affirmed the legally allowed to challenge openly and formally
decision of the Med-Arbiter. While she held that the the status of SMCGC-SUPER as the SOBA of the
union members are employees and not contractors bargaining unit. Such dismissal, however, has no
as the Med-Arbiter held, she ruled that the petition bearing in the instant case since the third PCE was
could not be entertained except during the 60-day filed well within the 60-day freedom period.
freedom period. In 2003, CGW filed a second Otherwise stated, there is no identity of causes of
petition for certification election. The Med-Arbiter action to speak of since in the first petition, the union
dismissed the petition on the ground that it was has no cause of action while in the third, a cause of
barred by a prior judgment. Secretary of Labor action already exists for the union as they are now
and Employment affirmed. In 2004, within the 60- legally allowed to challenge the status of SMCGC-
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day free period, CGW filed a third petition for SUPER as exclusive bargaining representative.
certification election. Med-Arbiter dismissed the
petition ruling that it was barred by a prior [Doctrine]
judgment. On appeal, the Secretary of Labor and
Employment granted the petition. Outside the 60-day free period, the union has no
cause of action given that it is only within the 60-
Issue: day period that they are legally allowed to
Is the case barred by res judicata or conclusiveness challenge the status of their current bargaining
of judgment? agent as their exclusive bargaining representative.
National Union of Workers in Facts: Yes, they should be allowed to vote. In a

Hotels, Restaurants and Allied certification election, all rank and file employees in
Industries- Manila Pavilion Hotel A certification election was conducted on June 16, the appropriate bargaining unit, whether
Chapter v. Secretary of Labor 2006 among the rank-and-file employees of probationary or permanent are entitled to vote. This
GR No. 181531 Holiday Inn Manila Pavilion Hotel (the Hotel). In principle is clearly stated in Art. 255 of the Code
July 31, 2009 view of the significant number of segregated votes, makes no distinction as to their employment status as
contending unions, NUHWHRAINMPHC, and Holiday basis for eligibility in supporting the petition for
Inn Manila Pavillion Hotel Labor Union (HIMPHLU), certification election. The law refers to “all” the
referred the case back to Med-Arbiter Calabocal to employees in the bargaining unit. All they need to
decide which among those votes would be opened be eligible to support the petition is to belong to the
and tallied. Eleven (11) votes were initially “bargaining unit.” For purposes of this section (Rule
segregated because they were cast by dismissed II, Sec. 2 of Department Order No. 40-03, series of
employees, albeit the legality of their dismissal was 2003), any employee, whether employed for a
still pending before the CA. Six other votes were definite period or not, shall beginning on the first
segregated because the employees who cast them day of his/her service, be eligible for membership
were already occupying supervisory positions at the in any labor organization. The period of reckoning
time of the election. Still five other votes were in determining who shall be included in the list of
segregated on the ground that they were cast by eligible voters is, in cases where a timely appeal
probationary employees and, pursuant to the has been filed from the Order of the Med-Arbiter,
existing CBA, such employees cannot vote. The MA the date when the Order of the Secretary of Labor
and the SOLE held that held that the probationary and Employment, whether affirming or denying the
employees cannot vote, as at the time the Med- appeal, becomes final and executory.
Arbiter issued on August 9, 2005 the Order
granting the petition for the conduct of the The provision in the CBA disqualifying probationary
certification election, the six probationary employees from voting cannot override the
employees were not yet hired, hence, they could not Constitutionally-protected right of workers to self-
vote. organization.
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Issues: No, it did not obtain majority. Prescinding from the

Court’s ruling that all the probationary employees’
(1) Whether employees on probationary status at votes should be deemed valid votes while that of
the time of the certification elections should be the supervisory employees should be excluded, it
allowed to vote follows that the number of valid votes cast would
(2) Whether HIMPHLU was able to obtain the increase – from 321 to 337. Hence, the majority
required majority for it to be certified as the would be 168.5 + 1 or at least 170. HIMPHLU
exclusive bargaining agent. obtained 169 while petitioner received 151 votes.
[Doctrine]
In a certification election, all rank and file

employees in the appropriate bargaining unit,
whether probationary or permanent are entitled to
vote
Under the “double majority rule,” for there to be a

valid certification election, majority of the
bargaining unit must have voted AND the winning
union must have garnered majority of the valid
votes cast.
Eagle Ridge Golf and Country Facts: Yes. The members of the Union totaled 30
Club v. CA employees when it applied on December 19, 2005
GR No. 178989 At least 20% of Eagle Ridge's rank-and-file for registration. The Union thereby complied with
March 18, 2010 employees had a meeting where they organized the mandatory minimum 20% membership
themselves into an independent labor union, named requirement under Art. 234 (c). Also, the Union has
"Eagle Ridge Employees Union" (EREU or Union), sufficiently explained the discrepancy between the
elected a set of officers, and ratified their number of those who attended the organizational
constitution and by-laws. Thereafter, they formally meeting showing 26 employees and the list of union
applied for registration before the DOLE which was members showing 30. The difference is due to the
later on issued to them. Subsequently, petitioner additional four members admitted two days after
filed for cancellation of the Union’s registration. the organizational meeting as attested to by their
Petitioner alleged that EREU declared in its duly accomplished Union Membership forms. Lastly,
application for registration having 30 members, the fact that six union members, indeed, expressed
when the minutes of its December 6, 2005 the desire to withdraw their membership through
organizational meeting showed it only had 26 their affidavits of retraction will not cause the
members. Moreover, petitioner contended that five cancellation of registration on the ground of
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employees who attended the organizational violation of Art. 234 (c) of the Labor Code requiring
meeting had manifested, through their individual the mandatory minimum 20% membership of rank-
affidavits, the desire to withdraw from the union. and-file employees in the employees' union. When
Thus, the union membership reduced to 20 or 21, the EREU filed its application for registration on
either of which is below the mandatory minimum December 19, 2005, there were clearly 30 union
20% membership requirement under Art. 234 (c) of members. Thus, when the certificate of registration
the Labor Code. Reckoned from 112 rank-and-file was granted, there is no dispute that the Union
employees of Eagle Ridge, the required number complied with the mandatory 20% membership
would be 22 or 23 employees. The DOLE RD ruled requirement
in favor of the petitioner which was affirmed by the
BLR. On MR, the BLR set aside the previous rulings [Doctrine]
and ruled in favor of the Union. Petitioner went to Art. 234[c] requires the list of names of all the union
the CA but to no avail, thus this petition. members of an independent union comprising at
least 20% of the bargaining unit. This should not be
Issue: equated with the list of workers who participated in
the organizational meetings (Art.234 [b]).
Whether there was bona fide compliance with the
registration requirements A withdrawal from union membership done after a
petition for certification election has been filed does
not vitiate such petition.
PICOP Resources, Inc. v. Tañeca Facts: No, they may not be dismissed. The mere signing
GR No. 160828 of the authorization in support of the PCE of FFW on
August 9, 2010 NAMAPRI-SPFL sent a letter to the management March 19, 20 and 21, or before the “freedom
demanding the termination of employees who period,” is not sufficient ground to terminate the
allegedly campaigned for, supported and signed employment of respondents inasmuch as the petition
the PCE of FFW during the effectivity of the CBA. itself was actually filed during the freedom period.
NAMAPRI-SPFL considered said act of campaigning Nothing in the records would show that respondents
for and signing as acts of disloyalty and a valid failed to maintain their membership in good
basis for termination for a cause. The management standing in the Union. Respondents did not resign or
sent letters to the concerned employees to explain in withdraw their membership from the Union to which
writing why their employment should not be they belong. Respondents continued to pay their
terminated due to acts of disloyalty as alleged by union dues and never joined the FFW.
their Union. After evaluation the Union found the
member's explanations to be unsatisfactory and so Moreover, PRI anchored their decision to terminate
they reiterated the demand for termination. respondents’ employment on Article 253 of the
Labor Code meaning that they are still bound by
PRI served notices of termination for causes to the the Union Security Clause of the CBA even after the
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31 out of the 46 employees on the ground of “acts expiration of the CBA. SC ruled against such
of disloyalty”. argument. Applying Art 256 LC, it can be said that
while it is incumbent for the employer to continue to
LA declared the respondents’ dismissal to be illegal recognize the majority status of the incumbent
and ordered PRI to reinstate them. NLRC reversed. bargaining agent even after the expiration of the
CA reinstated the decision of the LA. freedom period, they could only do so when no
petition for certification election was filed.
Issue: Moreover, the last sentence of Article 253 which
provides for automatic renewal pertains only to the
Whether the employees may be dismissed for “acts economic provisions of the CBA and does not include
of disloyalty” representational aspect of the CBA.
[Doctrine]
Applying Art 256 LC, it can be said that while it is
incumbent for the employer to continue to recognize
the majority status of the incumbent bargaining
agent even after the expiration of the freedom
period, they could only do so when no petition for
certification election was filed.
Legend International Resorts v. Facts: Yes, Legend was able to appeal on time. Records
Kilusang Manggagawa ng show that (in the cancellation of registration case)
Legend On 2001, KML filed a certification election before LEGEND has timely filed on September 6, 2002 a
GR No. 169754 the Med-Arbiter in Pampanga. LEGEND opposed petition for certiorari before the Court of Appeals
February 23, 2011 the petition by saying that there was a commingling which was docketed as CA-G.R. SP No. 72659
of supervisory and rank-and-file and that KML assailing the March 26, 2002 Decision of the Bureau
committed acts of fraud and misrepresentation as to of Labor Relations.
the participants of the general membership meeting.
KML claimed its legitimacy as a labor union and that No, the cancellation of the certificate of
it cannot be collaterally attacked in the certification registration cannot retroact to the date of its
election. The Med-Arbiter denied the petition for issuance. A certification election may still be
certification election. Secretary of labor reversed conducted during the pendency of the cancellation
and set aside Med-Arbiter’s decision. CA affirmed proceedings. This is because at the time the petition
Secretary’s decision. CA ruled that LEGEND failed for certification was filed, the petitioning union is
to timely appeal the BLR’s decision on the certificate presumed to possess the legal personality to file the
of registration and that KML is a legitimate labor same. There is therefore no basis for LEGEND’s
organization hence it has the legal personality to assertion that the cancellation of KML’s certificate of
file a certification election registration should retroact to the time of its issuance
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or that it effectively nullified all of KML’s activities,

Issue: including its filing of the petition for certification
election and its demand to collectively bargain.
Whether Legend was able to appeal on time Also, the legitimacy of the legal personality of KML
cannot be collaterally attacked in a petition for
In the case of an affirmative answer to the certification election proceeding.
preceding question, whether the cancellation of
KML’s certificate of registration should retroact to [Doctrine]
the time of its issuance and therefore KML has no
legal personality to file a certification election A certification election may still be conducted during
the pendency of the cancellation proceedings.
Samahang Manggagawa sa Facts: 1. No, the mixture of rank-and-file and

Charter Chemical Solidarity of supervisory
Unions in the Philippines for Petitioner union SMCC-SUPER filed a petition for employees in petitioner union does not nullify its
Empowerment and Reforms certification election among the regular rank-and- legal personality as a legitimate labor
(SMCC-SUPER) v. Charter file employees of Charter Chemical and Coating organization and had the right to file the subject
Chemical Corporation. The company sought the dismissal of petition for certification election. While the Court
(G.R. No. 169717, March 16, the petition, alleging that the petitioner union is not agreed that petitioner union consisted of both rank-
2011) a legitimate labor organization because of (1) and-file and supervisory employees, , the inclusion
failure to comply with the documentation of the aforesaid supervisory employees in petitioner
requirements set by law, and (2) the inclusion of union does not divest it of its status as a legitimate
supervisory employees within petitioner union. The labor organization. Citing its decision in Republic v
Med-Arbiter dismissed the petition for certification Kawashima, the Court said that by virtue of
election, ruling that the petitioner is not a legitimateDepartment Order No. 9, series of 1997 (1997
labor organization. The DOLE sustained the dismissal Amended Omnibus Rules), the requirement under
of the petition for certification election but reversed Sec. 2(c) of the 1989 Amended Omnibus Rules -
itself on motion for reconsideration of the union. The that the petition for certification election indicate
CA set aside the DOLE’s ruling, stating that the that the bargaining unit of rank-and-file employees
petitioner union failed to comply with the has not been mingled with supervisory employees -
documentation requirements under the Labor Code was removed.
and that the union consisted of both rank-and-file
and supervisory employees. The applicable law and rules in the instant case are
the same as those in Kawashima because the present
Issues: 1. Whether the mixture of rank-and-file and petition for certification election was filed in 1999
supervisory employees in petitioner union will nullify when D.O. No. 9, series of 1997, was still in effect.
its legal personality as a legitimate labor Hence, Kawashima applies with equal force here.
organization.
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2. No, the respondent company cannot attack the

2. Whether the respondent company can attack the legal personality of petitioner union in the
legal personality of the union in certification election certification election proceedings.
proceedings.
Citing Kawashima, the Court said: “Except when it is
requested to bargain collectively, an employer is a
mere bystander to any petition for certification
election; such proceeding is non-adversarial and
merely investigative, for the purpose thereof is to
determine which organization will represent the
employees in their collective bargaining with the
employer. The choice of their representative is the
exclusive concern of the employees; the employer
cannot have any partisan interest therein; it cannot
interfere with, much less oppose, the process by
filing a motion to dismiss or an appeal from it; not
even a mere allegation that some employees
participating in a petition for certification election
are actually managerial employees will lend an
employer legal personality to block the certification
election. The employer's only right in the proceeding
is to be notified or informed thereof.”
Heritage Hotel Manila v. Facts: No, the company’s petition for cancellation for
Secretary of Labor and registration based on mixed membership shall
Employment Respondent National Union of Workers in Hotel not justify the suspension of the proceedings of
(G.R. No. 172132, July 23, 2014) Restaurant and Allied Industries-Heritage Hotel the certification election. Basic in the realm of labor
Manila Supervisors Chapter (NUWHRAIN-HHMSC) union rights is that the certification election is the
filed a petition for certification election. The sole concern of the workers, and the employer is
petitioner filed its opposition, but the opposition was deemed an intruder as far as the certification
deemed denied by the Med-Arbiter. The petitioner election is concerned. Thus, the petitioner lacked the
then filed a petition for the cancellation of legal personality to assail the proceedings for the
NUWHRAIN-HHMSC’s registration as a labor union certification election, and should stand aside as a
and a petition seeking either the dismissal or the mere bystander who could not oppose the petition,
suspension of the proceedings. But the certification or even appeal the Med-Arbiter’s orders relative to
election still proceeded, with respondent union the conduct of the certification election.
obtaining the majority vote of the bargaining unit.
The petitioner filed a protest insisting on the Under the long established rule, too, the filing of the
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illegitimacy of NUWHRAIN-HHMSC. petition for the cancellation of NUWHRAIN-

HHMSC’s registration should not bar the conduct of
The Med-Arbiter ruled that the petition for the the certification election. In that respect, only a final
cancellation of union registration was not a bar to order for the cancellation of the registration would
the holding of the certification election. The DOLE have prevented NUWHRAIN-HHMSC from
Secretary affirmed the decision of the Med-Arbiter. continuing to enjoy all the rights conferred on it as a
The CA affirmed the decision of the DOLE legitimate labor union, including the right to the
Secretary. petition for the certification election. This rule is now
enshrined in Article 238-A of the Labor Code, as
Issue: Whether the petition for the cancellation of amended by Republic Act No. 948.
union registration based on mixed membership of
supervisors and managers in a labor union, and the
non-submission of reportorial requirements to the
DOLE justify the suspension of the proceedings for
the certification elections.
Republic v. Namboku Peak, Inc. Facts: No, the Secretary of Labor does not have the legal
(G.R. No. 169745, July 18, 2014) standing to file the petitions. The Secretary of
Philippine Aircraft Loaders and Cargo Employees Labor is not the real party-in interest vested with
Association Solidarity of Unions in the Philippines for personality to file the present petitions. A real
Empowerment and Reforms (PALCEA-SUPER) filed a party-in-interest is the party who stands to be
Petition for direct certification election before the benefited or injured by the judgment in the suit, or
Med-Arbiter seeking to represent the rank-and-file the party entitled to the avails of the suit.40 As thus
employees of Namboku. Namboku opposed the defined, the real parties-in-interest in these cases
petition claiming that the members of the PALCEA- would have been PALCEA-SUPER and PJWU-SUPER.
SUPER are project employees and thus cannot It would have been their duty to appear and
represent the regular rank-and-file employees. The defend the ruling of the Secretary of Labor for they
Med-Arbiter held that the members of PALCEA- are the ones who were interested that the same be
SUPER are regular employees of Namboku and sustained. Of course, they had the option not to
ordered the conduct of certification election. pursue the case before a higher court, as what they
Namboku appealed the Med-Arbiter’s Order to the did in these cases. As to the Secretary of Labor, she
Secretary of Labor but the Secretary denied the was impleaded in the Petitions for Certiorari filed
appeal. Namboku filed a petition for Certiorari before the CA as a nominal party because one of
before the CA. As to Phil-Japan’s petition, the Med- the issues involved therein was whether she
Arbiter also allowed PJWU-SUPER to conduct a committed an error of jurisdiction. But that does not
certification election. But when Phil-Japan appealed make her a real party-in-interest or vests her with
to the Secretary of Labor, it was told that at its authority to appeal the Decisions of the CA in case
appeal will not be acted upon pursuant to Section it reverses her ruling.
- 271 -
17, Rule VIII of Department Order No. 40-03 and

that the certification election will proceed Here, both cases emanated from the petitions for
accordingly. Phil-Japan then filed a petition for certification election filed with the Med-Arbiter and
certiorari before the CA. The CA reversed the subsequently appealed to the Secretary of Labor.
Secretary’s decision and declared that the members She had occasion to hear the parties’ respective
of PALCEA-SUPER are project employees and contentions and rule thereon. As the officer who
nullified Section 17, Rule VIII of Department Order rendered the decision now subject of these cases,
No. 40-03 for being in conflict with Article 259 of the Secretary of Labor should have remained
the Labor Code. The Secretary filed the present impartial and detached from the time the cases
petitions for certiorari. reached her until the same were being scrutinized
on appeal.
Issue: Whether the Secretary of Labor has the legal
standing to file the petitions. [The case does not specifically discuss a BA or CE
issue.]
T&H Shopfitters Corp/Gin Queen Facts: Yes, the petitioners meddled in the affairs of its
Corp. v. T&H Shopfitters Corp/Gin employees in selecting their exclusive bargaining
Queen Corp Workers Union Respondent union and its officers filed an unfair representative.
(G.R. No. 191714, February 26, labor practice complaint by way of union busting
2014) and illegal lockout against petitioners. Respondents In the case of Insular Life Assurance Co., Ltd.
alleged that a day after they discussed the Employees Association – NATU v. Insular Life
formation of a union with other employees, they Assurance Co. Ltd., this Court had occasion to lay
were barred from entering the factory premises and down the test of whether an employer has
ordered to transfer to the company’s warehouse. interfered with and coerced employees in the
DOLE issued a certificate of registration in favor of exercise of their right to self–organization, that is,
the THS-GQ union. THS-GQ Union then filed a whether the employer has engaged in conduct
petition for certification election, which was granted. which, it may reasonably be said, tends to interfere
Before the election, the union officers and members with the free exercise of employees’ rights; and that
were made to work as grass cutters in the new it is not necessary that there be direct evidence that
office site and in a field trip for employees, a sales any employee was in fact intimidated or coerced
officer of the petitioners campaigned against the by statements of threats of the employer if there is
union. Due to extreme pressure exerted by a reasonable inference that anti–union conduct of
petitioner, the votes for “no union” prevailed. The the employer does have an adverse effect on self–
THS-GQ Union filed its protest with respect to the organization and collective bargaining.
certification election proceedings.
The questioned acts of petitioners, namely: 1)
The Labor Arbiter dismissed the respondents’ sponsoring a field trip to Zambales for its
complaint. The NLRC reversed the LA’s decision, employees, to the exclusion of union members,
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finding that petitioners committed ULP in interfering before the scheduled certification election; 2) the
with the exercise of the employees’ right to self– active campaign by the sales officer of petitioners
organization. The CA affirmed the NLRC’s decision. against the union prevailing as a bargaining agent
during the field trip; 3) escorting its employees
Issue: Whether the petitioners meddled in the after the field trip to the polling center; 4) the
affairs of its employees in selecting their exclusive continuous hiring of subcontractors performing
bargaining representative. respondents’ functions; 5) assigning union members
to the Cabangan site to work as grass cutters; and
6) the enforcement of work on a rotational basis for
union members, all reek of interference on the part
of petitioners.
Indubitably, the various acts of petitioners, taken

together, reasonably support an inference that,
indeed, such were all orchestrated to restrict
respondents’ free exercise of their right to self–
organization. The Court is of the considered view
that petitioners’ undisputed actions prior and
immediately before the scheduled certification
election, while seemingly innocuous, unduly meddled
in the affairs of its employees in selecting their
exclusive bargaining representative. In Holy Child
Catholic School v. Hon. Patricia Sto. Tomas, the Court
ruled that a certification election was the sole
concern of the workers, save when the employer
itself had to file the petition x x x, but even after
such filing, its role in the certification process ceased
and became merely a bystander. Thus, petitioners
had no business persuading and/or assisting its
employees in their legally protected independent
process of selecting their exclusive bargaining
representative. The fact and peculiar timing of the
field trip sponsored by petitioners for its employees
not affiliated with THS–GQ Union, although a
positive enticement, was undoubtedly extraneous
influence designed to impede respondents in their
quest to be certified. This cannot be countenanced.
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Hijo Resources Corp. v. Mejares Facts: No, the Labor Arbiter is not bound by the ruling of
G.R. No. 208986, January 13, the Med-Arbiter regarding the existence or non-
2016 Private respondents were among the complainants existence of employer-employee relationship
represented by NAMABDJERA-HRC who filed with between the parties in the certification election
the NLRC an illegal dismissal case against petitioner case. Here, the Med-Arbiter's order in this case
HRC. Complainants were working under contractor- dismissing the petition for certification election on
growers and they subsequently formed their union the basis of non-existence of employer-employee
NAMABDJERA-HRC. NAMABDJERA-HRC filed a relationship was issued after the members of the
petition for certification election. After the union was respondent union were dismissed from their
formed, the contractor-growers filed a notice of employment. The purpose of a petition for
cessation of business operations. As a result, the certification election is to determine which
complainants’ employment was terminated. They organization will represent the employees in their
then filed a case for ULP, illegal dismissal and collective bargaining with the employer. The
illegal deduction. respondent union, without its member-employees,
was thus stripped of its personality to challenge the
The Med-Arbiter dismissed the petition for Med-Arbiter's decision in the certification election
certification election on the ground that there was no case. Thus, the members of the respondent union
employer-employee relationship between were left with no option but to pursue their illegal
complainants and petitioner. The complainants did dismissal case filed before the Labor Arbiter. To
not appeal the Med-Arbiter’s decision with regard dismiss the illegal dismissal case filed before the
to the certification election but pursued the illegal Labor Arbiter on the basis of the pronouncement of
dismissal case. The LA denied HRC’s motion to the Med-Arbiter in the certification election case
dismiss. The NLRC ruled that the Med-Arbiter’s that there was no employer-employee relationship
decisions and orders have, upon their finality, the between the parties, which the respondent union
force and effect of a final judgment. The CA could not even appeal to the DOLE Secretary
reversed the NLRC’s decision. because of the dismissal of its members, would be
tantamount to denying due process to the
complainants in the illegal dismissal case.
Issue: Whether the Labor Arbiter, in the illegal
dismissal case, is bound by the ruling of the Med-
Arbiter regarding the existence or non-existence of
parties in the certification election case.
Ren Transport Corp. v. NLRC Facts: Yes, SMART remains the exclusive bargaining
(G.R. No. 188020, June 27, 2016) agent of the rank-and-file employees of Ren
Samahan ng Manggagawa sa Ren Transport Transport. It bears stressing that Ren Transport had
(SMART) is a registered union and has an existing a duty to bargain collectively with SMART. Under
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CBA with Petitioner. The 60-day freedom period of Article 263 in relation to Article 267 of the Labor
the CBA passed without a challenge to SMART’s Code, it is during the freedom period — or the last
majority status as bargaining agent. When SMART 60 days before the expiration of the CBA — when
sent its bargaining proposals to Ren Transport, the another union may challenge the majority status of
latter failed to reply to their demand. DOLE was the bargaining agent through the filing of a petition
then informed that majority of the members of for a certification election. If there is no such petition
SMART wants to form another union, Ren Transport filed during the freedom period, then the employer
Employees Association. SMART contested the "shall continue to recognize the majority status of
disaffiliation before DOLE. During the pendency of the incumbent bargaining agent where no petition
the disaffiliation dispute, Ren Transport stopped the for certification election is filed."
remittance to SMART of the union dues that had
been checked off from the salaries of union workers No petition for certification election challenging the
as provided under the CBA. Further, Ren Transport majority status of SMART was filed during the
voluntarily recognized RTEA as the sole and freedom period, which was from November 1 to
exclusive bargaining agent of the rank-and-file December 31, 2004 — the 60-day period prior to
employees of their company. SMART filed a the expiration of the five-year CBA. SMART
complaint for ULP against Ren Transport. therefore remained the exclusive bargaining agent
of the rank-and-file employees.
The LA found Ren Transport guilty of acts of unfair
labor practice, stating that since the disaffiliation Given that SMART continued to be the workers'
issue remained pending, SMART continued to be the exclusive bargaining agent, Ren Transport had the
certified collective bargaining agent. NLRC affirmed corresponding duty to bargain collectively with the
the LA’s ruling. The CA modified the NLRC’s ruling former. Ren Transport's refusal to do so constitutes
by deleting the award of moral damages to an unfair labor practice.
SMART.
Consequently, Ren Transport cannot avail itself of
Issue: Whether or not SMART remains the exclusive the defense that SMART no longer represents the
bargaining agent of the rank-and-file employees of majority of the workers. The fact that no petition for
Ren Transport. certification election was filed within the freedom
period prevented Ren Transport from challenging
SMART'S existence and membership.
Sta. Lucia East Commercial Corp. Facts: No, the voluntary recognition of SLECC of SMSLEC
vs. Secretary of Labor Confederated Labor Union of the Philippines (CLUP), could not bar CLUP-SLECCWA's petition for
(G.R. No. 162355, August 14, in behalf of its chartered local, instituted a petition certification election. The employer may voluntarily
2009) for certification election among the regular rank- recognize the representation status of a union in
and-file employees of Sta. Lucia East Commercial unorganized establishments. SLECC was not an
Corporation and its Affiliates. Med-Arbiter Bactin unorganized establishment when it voluntarily
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ordered the dismissal of the petition due to recognized SMSLEC as its exclusive bargaining
inappropriateness of the bargaining unit. CLUP-Sta.representative on 20 July 2001. CLUP-SLECC and
Lucia East Commercial Corporation and its Affiliates
its Affiliates Workers Union filed a petition for
Workers Union (CLUP-SLECC and AWU) appealed certification election on 27 February 2001 and this
the order of dismissal to the Secretary of Labor. The
petition remained pending as of 20 July 2001. Thus,
Secretary affirmed the dismissal of the petition. SLECC's voluntary recognition of SMSLEC on 20 July
2001, the subsequent negotiations and resulting
CLUP-SLECC and AWU then reorganized and re- registration of a CBA executed by SLECC and
registered as CLUP-Sta. Lucia East Commercial SMSLEC are void and cannot bar CLUP-SLECCWA's
Corporation Workers Association (CLUP-SLECCWA). present petition for certification election.
CLUP-SLECCWA claimed that no certification
election has been held among them within the last
12 months prior to the filing of the petition, and
while there is another union registered with DOLE-
Regional Office covering the same rank-and-file
employees (SMSLEC), it has not been recognized as
the exclusive bargaining agent of SLECC's
employees.
SLECC moved to dismiss CLUP-SLECCWA’s petition,

as it has voluntarily recognized SMSLEC as the
exclusive bargaining agent of its regular rank-and-
file employees, and that collective bargaining
negotiations already commenced between them. A
CBA between SMSLEC and SLECC was ratified by
its rank-and-file employees and registered with
DOLE-Regional Office. CLUP-SLECCWA assailed the
validity of the voluntary recognition of SMSLEC by
SLECC and their consequent negotiations and
execution of a CBA.
The Med-Arbiter dismissed CLUP-SLECCWA's
petition for direct certification on the ground of
contract bar rule. The Secretary of Labor set aside
the Med-Arbiter’s decision and held that the
subsequent negotiations and registration of a CBA
executed by SLECC with SMSLEC could not bar
CLUP-SLECCWA's petition. The CA affirmed the
Secretary’s ruling.
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Issue: Whether the voluntary recognition of SLECC

of SMSLEC will bar the petition of CLUP-SLECCWA
for certification election.
Coastal Subic Bay Terminal, Inc. Facts: No, the supervisory and the rank-and-file unions
v. DOLE cannot file separate petitions for certification
(G.R. No. 157117, November 20, Coastal Subic Bay Terminal, Inc. Rank-and-File Union election. Under Article 245 of the Labor Code,
2006) (CSBTI-RFU) and Coastal Subic Bay Terminal, Inc. supervisory employees are not eligible for
Supervisory Union (CSBTI-SU) filed separate membership in a labor union of rank-and-file
petitions for certification election. The rank-and-file employees. The supervisory employees are allowed
union insists that it is a legitimate labor organizationto form their own union but they are not allowed to
having been issued a charter certificate by the join the rank-and-file union because of potential
Associated Labor Union (ALU), and the supervisory conflicts of interest. Further, to avoid a situation
union by the Associated Professional, Supervisory, where supervisors would merge with the rank-and-
Office and Technical Employees Union (APSOTEU). file or where the supervisors’ labor union would
Petitioner CSBTI opposed both petitions for represent conflicting interests, a local supervisors’
certification election alleging that the rank-and-file union should not be allowed to affiliate with the
union and supervisory union were not legitimate national federation of unions of rank-and-file
labor organizations. The Med-Arbiter dismissed both employees where that federation actively
petitions, ruling that the ALU and APSOTEU are one participates in the union activity within the company.
and the same federation having a common set of Thus, the limitation is not confined to a case of
officers and thus, the supervisory and the rank-and- supervisors wanting to join a rank-and-file union.
file unions were in effect affiliated with only one The prohibition extends to a supervisors’ local union
federation. The Secretary of Labor set aside the applying for membership in a national federation
decision of the Med-Arbiter, stating that CSBTI-SU the members of which include local unions of rank-
and CSBTI-RFU have separate legal personalities to and-file employees.
file their separate petitions for certification election.
The CA affirmed the Secretary’s decision. Here, the national federations that exist as
separate entities to which the rank-and-file and
Issue: Whether the supervisory and the rank-and- supervisory unions are separately affiliated with, do
file unions can file separate petitions for certification have a common set of officers. In addition,
election. APSOTEU, the supervisory federation, actively
participates in the CSBTI-SU while ALU, the rank-
and-file federation, actively participates in the
CSBTI-RFU, giving occasion to possible conflicts of
interest among the common officers of the
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federation of rank-and-file and the federation of

supervisory unions. For as long as they are
affiliated with the APSOTEU and ALU, the
supervisory and rank-and-file unions both do not
meet the criteria to attain the status of legitimate
labor organizations, and thus could not separately
petition for certification elections.
California Manufacturing Corp. v. Facts: No, the said requirement is not required for the
Laguesma certification election to push through. CMC’s
(G.R. No. 157117, November 20, A petition for certification election among the insistence on the 25% subscription requirement, is
2006) supervisors of California Manufacturing Corporation clearly immaterial. The same has been expressly
(CMC) was filed by the Federation of Free Workers deleted by Section 24 of Republic Act No. 6715
(FFW) — California Manufacturing Corporation and is presently prescribed only in organized
Supervisors Union Chapter (CALMASUCO). CMC establishments, that is, those with existing
alleged among others, that the petition for the bargaining agents. Compliance with the said
holding of a certification election should be denied requirement need not even be established with
as it is not supported by the required twenty-five absolute certainty. The Court has consistently ruled
percent (25%) of all its supervisors. The Med-Arbiter that "even conceding that the statutory requirement
ordered the conduct of a certification election. DOLE of 30% (now 25%) of the labor force asking for a
affirmed the Med-Arbiter’s order. certification election had not been strictly complied
with, the Director (now the Med-Arbiter) is still
empowered to order that it be held precisely for
Issue: Whether the 25% subscription requirement is the purpose of ascertaining which of the contending
needed for the conduct of certification election for labor organizations shall be the exclusive collective
CMC supervisors. bargaining agent (Atlas Free Workers Union
(AFWU)-PSSLU Local v. Noriel, G.R. No. L-51905,
May 26, 1981, 104 SCRA 565). The requirement
then is relevant only when it becomes mandatory to
conduct a certification election. In all other instances,
the discretion, according to the rulings of this
Tribunal, ought to be ordinarily exercised in favor
of a petition for certification (National Mines and
Allied Workers Union (NAMAWU-UIF) v. Luna, Et
Al., G.R. No. L-46722, June 15, 1978, 83 SCRA
607).
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Bars to Certification Election

Labor Code: Arts. 238
Omnibus Rules, Book V, Rule VIII, Sections 14-15, Rule XVII, Section 7, as amended by D.O. 40-03
- 279 -
COLLECTIVE BARGAINING
Collective Bargaining
Labor Code: Arts. 261-266, 258-260, 274; Omnibus Rules, Book V, Rule I, Sec. 1 (d, h, j, t, bbb), Rules XVI-XVII, as amended by D.O. 40-03
Labor Code: Arts. 237, 219 (n), 273-275 (b), 292 (f,g,h); Omnibus Rules, Book V, Rule XIX, XXI, as amended by D.O. 40-03

Union of Filipro Employees v. Facts: UFE-DFA-KMU was the sole and exclusive No. The Court is not convinced that Nestlé’s "refusal
Nestle Philippines bargaining agent of the rank-and-file employees of to bargain on a very important CBA economic
GR No. 158930-31 Nestlé belonging to the latter’s Alabang and provision constitutes unfair labor practice.
March 3, 2008 Cabuyao plants. On 4 April 2001, as the existing The duty to bargain collectively is mandated by
collective bargaining agreement (CBA) between Articles 252 and 253 of the Labor Code.
Nestlé and UFE-DFA-KMU was to end on 5 June Obviously, the purpose of collective bargaining is
2001, the Presidents of the Alabang and Cabuyao the reaching of an agreement resulting in a contract
Divisions of UFE-DFA-KMU informed Nestlé of their binding on the parties; but the failure to reach an
intent to "open [our] new Collective Bargaining agreement after negotiations have continued for a
Negotiation for the year 2001-2004 x x x as early reasonable period does not establish a lack of
as June 2001." In response thereto, Nestlé informed good faith. The statutes invite and contemplate a
them that it was also preparing its own collective bargaining contract, but they do not
counterproposal and proposed ground rules to compel one. The duty to bargain does not include
govern the impending conduct of the CBA the obligation to reach an agreement.
negotiations.
For a charge of unfair labor practice to prosper, it
In another letter to the UFE-DFA-KMU (Cabuyao must be shown that Nestlé was motivated by ill will,
Division only), Nestlé reiterated its stance that
"bad faith, or fraud, or was oppressive to labor, or
"unilateral grants, one-time company grants, done in a manner contrary to morals, good customs,
company-initiated policies and programs, which or public policy, and, of course, that social
include, but are not limited to the Retirement Plan,
humiliation, wounded feelings, or grave anxiety
Incidental Straight Duty Pay and Calling Pay resulted x x x" in disclaiming unilateral grants as
Premium, are by their very nature not proper subjects
proper subjects in their collective bargaining
of CBA negotiations and therefore shall be excluded
negotiations. While the law makes it an obligation
therefrom." for the employer and the employees to bargain
Dialogue between the company and the union collectively with each other, such compulsion does
thereafter ensued. not include the commitment to precipitately accept
or agree to the proposals of the other. All it
Nestlé requested the National Conciliation and contemplates is that both parties should approach
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Mediation Board (NCMB), Regional Office No. IV, the negotiation with an open mind and make
Imus, Cavite, to conduct preventive mediation reasonable effort to reach a common ground of
proceedings between it and UFE-DFA-KMU owing to agreement.
an alleged impasse in said dialogue; i.e., that Herein, the union merely bases its claim of refusal to
despite fifteen (15) meetings between them, the bargain on a letter written by Nestlé where the
parties failed to reach any agreement on the latter laid down its position that "unilateral grants,
proposed CBA. one-time company grants, company-initiated policies
Conciliation proceedings proved ineffective, though, and programs, which include, but are not limited to
and the UFE-DFA-KMU filed a Notice of Strike on 31 the Retirement Plan, Incidental Straight Duty Pay and
October 2001 with the NCMB, complaining, in Calling Pay Premium, are by their very nature not
essence, of a bargaining deadlock pertaining to proper subjects of CBA negotiations and therefore
economic issues, i.e., "retirement (plan), panel shall be excluded therefrom." But as we have stated
composition, costs and attendance, and CBA". in this Court’s Decision, said letter is not tantamount
Second Notice of Strike was filed by the union, this to refusal to bargain. In thinking to exclude the
time predicated on Nestlé’s alleged unfair labor issue of Retirement Plan from the CBA negotiations,
practices, that is, bargaining in bad faith by setting Nestlé, cannot be faulted for considering the same
pre-conditions in the ground rules and/or refusing to benefit as unilaterally granted, considering that
include the issue of the Retirement Plan in the CBA eight out of nine bargaining units have allegedly
negotiations. The result of a strike vote conducted agreed to treat the Retirement Plan as a
by the members of UFE-DFA-KMU yielded an unilaterally granted benefit. This is not a case
overwhelming approval of the decision to hold a where the employer exhibited an indifferent
strike. attitude towards collective bargaining, because the
Secretary of the DOLE, Hon. Patricia A. Sto. Tomas negotiations were not the unilateral activity of the
ordered assumed jurisdiction, enjoing any strike or bargaining representative. Nestlé’s desire to settle
lockout but the petitioner union proceeded their the dispute and proceed with the negotiation being
strike. Nestlé and UFE-DFA-KMU filed their evident in its cry for compulsory arbitration is proof
respective position papers. Nestlé addressed enough of its exertion of reasonable effort at good-
several issues concerning economic provisions of the faith bargaining.
CBA as well as the non-inclusion of the issue of the In the case at bar, Nestle never refused to bargain
Retirement Plan in the collective bargaining collectively with UFE-DFA-KMU. The corporation
negotiations. simply wanted to exclude the Retirement Plan from
the issues to be taken up during CBA negotiations,
Issue: Whether or not Nestle is guilty of ULP when it on the postulation that such was in the nature of a
considers same economic benefits such as the unilaterally granted benefit. An employer’s
retirement benefits as unilaterally granted and steadfast insistence to exclude a particular
therefore excluded from the CBA Negotiation. substantive provision is no different from a
bargaining representative’s perseverance to include
one that they deem of absolute necessity. Indeed,
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an adamant insistence on a bargaining position to

the point where the negotiations reach an impasse
does not establish bad faith. [fn24 p.10] It is but
natural that at negotiations, management and labor
adopt positions or make demands and offer
proposals and counterproposals. On account of the
importance of the economic issue proposed by UFE-
DFA-KMU, Nestle could have refused to bargain
with the former – but it did not. And the
management’s firm stand against the issue of the
Retirement Plan did not mean that it was bargaining
in bad faith. It had a right to insist on its position to
the point of stalemate.
[Doctrine]
It is but natural that at negotiations, management
and labor adopt positions or make demands and
offer proposals and counterproposals. Thus, when
Nestle simply wanted to exclude the Retirement
Plan from the issues to be taken up during CBA
negotiations, on the postulation that such was in the
nature of a unilaterally granted benefit, does not
constitute unfair labor practice and does not violate
the right of the union to collectively bargain.
PAL v. PALEA Facts: On 6 February 1987, the parties entered into No. A cursory reading of the 1986-1989 CBA of
GR No. 142399 a CBA covering the period of 1986-1989, to be the parties herein will instantly reveal that Art. I,
March 12, 2008 applied, thus: Sec. 3 of said agreement made its provision
applicable to all employees in the bargaining unit.
Section 3 – Application The particular section specifically defined the scope
of application of the CBA, thus:
All the terms and conditions of employment of
employees within the bargaining unit are embodied Section 3 – Application. All the terms and conditions
in this Agreement, and the same shall govern the of employment of employees within the bargaining
relationship between the Company and such unit are embodied in this Agreement, and the same
employees. On the other hand, all such benefits shall govern the relationship between the Company
and/or privileges as are not expressly provided for and such employees. On the other hand, all such
in this Agreement but which are now being accorded benefits and/or privileges as are not expressly
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in accordance with the PAL Personnel Policies and provided for in this Agreement but which are now
Procedures Manual, shall be deemed also part and being accorded in accordance with the PAL
parcel of the terms and conditions of employment, Personnel Policies and Procedures Manual, shall be
or of this Agreement. deemed also part and parcel of the terms and
conditions of employment, or of this Agreement
Part of said agreement required petitioner PAL to without distinguishing between regular and non-
pay its rank and file employees the following regular employees. As succinctly put by respondent
bonuses: in its Memorandum:
Section 4 – 13th Month Pay (Mid-year Bonus) All employees in PAL are entitled to the same
benefit as they are within the same collective
A 13th month pay, equivalent to one month’s current bargaining unit and the entitlement to such benefit
basic pay, consistent with the existing practice shall spills over to even non-union members.
be paid in advance in May.
It is a well-settled doctrine that the benefits of a
Section 5 – Christmas Bonus CBA extend to the laborers and employees in the
collective bargaining unit, including those who do
The equivalent of one month’s current basic pay as not belong to the chosen bargaining labor
of November 30, shall be paid in December as a organization. Otherwise, it would be a clear case of
Christmas bonus. Payment may be staggered in two discrimination.
(2) stages. It is distinctly understood that nothing
herein contained shall be construed to mean that the Hence, to be entitled to the benefits under the CBA,
Company may not at its sole discretion give an the employees must be members of the bargaining
additional amount or increase the Christmas bonus. unit, but not necessarily of the labor organization
designated as the bargaining agent.
On 22 April 1988, prior to the payment of the 13th
month pay (mid-year bonus), petitioner PAL A "bargaining unit" has been defined as a group of
released a guideline implementing the aforequoted employees of a given employer, comprised of all or
provision, to wit: (1) Eligibility: a) Ground employees less than all of the entire body of employees, which
in the general payroll who are regular as of April the collective interest of all the employees,
30, 1988; b) Other ground employees in the consistent with equity to the employer, indicates to
general payroll, not falling within category a) be the best suited to serve the reciprocal rights and
above shall receive their 13th Month Pay on or duties of the parties under the collective bargaining
before December 24, 1988; (2) Amount a) For provisions of the law. At this point, the allegation of
category a) above, one month basic salary as of petitioner PAL that the non-regular employees do
April 30, 1988; (b) Employees covered under 1 b) not belong to the collective bargaining unit and are
above shall be paid not less than 1/12 of their thus not covered by the CBA is unjustified and
basic salary for every month of service within the unsubstantiated. It is apparent to us that petitioner
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calendar year; (3) Payment Date: May 9, 1988 for PAL excludes certain employees from the benefits of
category 1 a) above the CBA only because they have not yet achieved
regular status by the cut-off date, 30 April 1988.
Respondent assailed the implementation of the There is no showing that the non-regular status of
foregoing guideline on the ground that all the concerned employees by said cut-off date
employees of PAL, regular or non-regular, must be sufficiently distinguishes their interests from those of
paid their 13th month pay. In fact, in a letter, the regular employees so as to exclude them from
respondent PALEA, informed petitioner PAL that the the collective bargaining unit and the benefits of the
following regular employees failed to receive their CBA.
13th Month Pay as of the date of the
correspondence. In response thereto, petitioner PAL A collective bargaining agreement refers to a
informed respondent PALEA that rank and file negotiated contract between a legitimate labor
employees who were regularized after 30 April organization and the employer concerning wages,
1988 were not entitled to the 13th month pay as hours of work and all other terms and conditions of
they were already given their Christmas bonuses on employment in a bargaining unit. As in all other
9 December 1988 per the Implementing Rules of contracts, the parties to a CBA may establish such
Presidential Decree No. 851. Disagreeing with stipulations, clauses, terms and conditions as they
petitioner PAL, respondent PALEA filed a labor may deem convenient, provided these are not
complaint for unfair labor practice against contrary to law, morals, good customs, public order
petitioner PAL before the NLRC. or public policy. Thus, where the CBA is clear and
unambiguous, it becomes the law between the
Issue: Whether or not the Court of Appeals parties, and compliance therewith is mandated by
committed reversible error in affirming the order of the express policy of the law.
the NLRC for the payment of the 13th month pay or
mid-year bonus to its employees regularized after [Doctrine]
April 30, 1988. The benefits of a CBA extend to the laborers and
employees in the collective bargaining unit,
including those who do not belong to the chosen
bargaining labor organization. Otherwise, it would
be a clear case of discrimination.
Fulache v. ABS-CBN Facts: The petitioners are questioning the CBA Yes. Under these terms, the petitioners are members
GR No. 183810 executed between ABS-CBN and the ABS-CBN of the appropriate bargaining unit because they
January 21, 2010 Rank-and-File Employees Union (Union) because are regular rank-and-file employees and do not
under such agreement, they are only considered as belong to any of the excluded categories.
temporary and not regular employees. The Specifically, nothing in the records shows that they
petitioners claimed that they should be recognized are supervisory or confidential employees; neither
as regular employees of ABS-CBN because they are they casual nor probationary employees. Most
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had already rendered more than a year of service importantly, the labor arbiter’s decision of January
in the company so they should be entitled to the 17, 2002 – affirmed all the way up to the CA level
benefits of a regular employee. – ruled against ABS-CBN’s submission that they are
independent contractors. Thus, as regular rank-and-
Instead of salaries, ABS-CBN pointed out that file employees, they fall within CBA coverage under
petitioners were “talents” who are paid pre- the CBA’s express terms and are entitled to its
arranged considerations called “talent fees” taken benefits.
from the budget of a particular program and There is no merit in ABS-CBN’s arguments that the
subject to a ten percent (10%) withholding tax. petitioners are not entitled to CBA benefits because:
Talents do not undergo probation. Their services (1) they did not claim these benefits in their position
are engaged for a specific program or production, paper; (2) the NLRC did not categorically rule that
or a segment thereof. Their contracts are the petitioners were members of the bargaining
terminated once the program, production or unit; and (3) there was no evidence of this
segment is completed. membership. To further clarify what was stated
above, CBA coverage is not only a question of
ABS-CBN alleged that the petitioners’ services were fact, but of law and contract.
contracted on various dates by its Cebu station as
independent contractors/off camera talents, and so Being regular employees, petitioners are entitled to
they are not entitled to regularization. the benefits provided under the CBA in addition to
reinstatement without loss of seniority rights with full
The Labor Arbiter rendered his decision holding that backwages and all other benefits from the time
the petitioners were regular employees of ABS- they were dismissed up to the date of their actual
CBN, not independent contractors, and are entitled reinstatement.
to the benefits and privileges of regular employees
[Doctrine]
ABS-CBN appealed the ruling to the NLRC, claiming CBA coverage is not only a question of fact, but of
that the petitioners were independent contractors, law and contract. From the factual finding that the
not regular employees. workers are regular employees flows legal effects
touching on the terms and conditions of the
While the appeal of the regularization case was petitioners’ regular employment, specifically, their
pending, ABS-CBN dismissed the petitioners when entitlement to CBA benefits.
the latter refused to sign resignation letters from the
company and undertake new contracts of
employment with service contractor, Able Services.
Petitioners responded by filing a complaint for
illegal dismissal.
Issue: Whether or not the petitioners are entitled to
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the benefits under the CBA.
San Miguel Foods v. San Miguel Facts: Respondent, San Miguel Corporation No. As for the alleged ULP committed under Article
Corporation Employees Union Employees Union-PTWGO, was the sole bargaining 248(i), for violation of a CBA, this Article is
GR No. 168569 agent of all the monthly paid employees of qualified by Article 261 of the Labor Code.
October 5, 2007 petitioner San Miguel Foods, Incorporated (SMFI). In The case of Silva v. NLRC instructs that for an unfair
1992, some employees of SMFI's Finance labor practice case to be cognizable by the Labor
Department, through the Union, brought a grievance Arbiter, and the NLRC to exercise its appellate
against Finance Manager Gideon Montesa, for jurisdiction, the allegations in the complaint should
discrimination, favoritism, unfair labor practices, show the concurrence of two things, namely: (1)
harassment, promoting divisiveness and sectarianism gross violation of the CBA; and (2) the violation
before SMFI Plant Operations Manager George pertains to the economic provisions of the CBA.
Nava in accordance with Step 1 of the grievance
machinery adopted in the CBA forged by SMFI and In this case, the Union charges SMFI to have violated
the Union. the grievance machinery provision in the CBA.
However, the grievance machinery provision in the
At the grievance meeting, SMFI informed the Union CBA is not an economic provision. Hence, the second
that it planned to address the grievance through a requirement for a Labor Arbiter to exercise
work management review. Hence, it asked the jurisdiction of a ULP is not present.
finance personnel to give it their attention and
cooperation. However, the work management [Doctrine]
review was not completed by March 1993, For an unfair labor practice case to be cognizable
prompting the Union to elevate the grievance to by the Labor Arbiter, and the NLRC to exercise its
Step 2. appellate jurisdiction, the allegations in the
complaint should show the concurrence of two things,
Almost nine months after the grievance meeting was namely: (1) gross violation of the CBA; and (2) the
held, SMFI rendered a "Decision on Step 1 violation pertains to the economic provisions of the
Grievance" stating that it was still in the process of CBA.
completing the work management review. Hence,
the Union's requests could not be granted.
The Union thereupon filed a complaint before the

NLRC against SMFI, its President Amadeo Veloso,
and its Finance Manager Montesa for unfair labor
practice and unjust discrimination in matters of
promotion. It prayed that SMFI be ordered to
promote the therein named employees with the
corresponding pay increases or adjustment including
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payment of salary differentials plus attorney's fees,

and to cease and desist from committing the same
unjust discrimination in matters of promotion.
Issue: Whether or not SMFI’s alleged violation of

the CBA constitutes unfair labor practice.
Capitol Medical Center v. Trajano Facts: On October 2, 1997, respondent union, (1) No. Pendency of a petition for cancellation
GR No. 155690 through its president Jaime N. Ibabao, sent of union registration does not preclude
June 30, 2005 petitioner a letter requesting a negotiation of their collective bargaining. If a certification
Collective Bargaining Agreement (CBA). In its reply election may still be ordered despite the
dated October 10, 1997, petitioner, challenging the pendency of a petition to cancel the union’s
union’s legitimacy, refused to bargain with registration certificate. more so should the
respondent. Subsequently or on October 15, 1997, collective bargaining process continue
petitioner filed with the Bureau of Labor Relations despite its pendency. We must emphasize
(BLR), Department of Labor and Employment, a that the majority status of the respondent
petition for cancellation of respondent’s certificate Union is not affected by the pendency of
of registration. the Petition for Cancellation pending
against it. Unless its certificate of
Respondent filed with the National Conciliation and registration and its status as the certified
Mediation Board (NCMB), National Capital Region, bargaining agent are revoked, the Hospital
a notice of strike, alleging that refusal to bargain is, by express provision of the law, duty
amounts to ULP. On December 4, 1997, former bound to collectively bargain with the
Labor Secretary Leonardo A. Quisumbing, now Union.
Associate Justice of this Court, issued an Order
assuming jurisdiction over the labor dispute and (2) Yes. The discretion to assume jurisdiction
ordering all striking workers to return to work and may be exercised by the Secretary of
the management to resume normal operations. Labor and Employment without the necessity
of prior notice or hearing given to any of
Petitioner then filed a motion for reconsideration but the parties. The rationale for his primary
was denied in an Order dated April 27, 1998. On assumption of jurisdiction can justifiably rest
June 23, 1998, petitioner filed with this Court a on his own consideration of the exigency of
petition for certiorari assailing the Labor Secretary’s the situation in relation to the national
Orders. We referred the petition to the Court of interests.
Appeals for its appropriate action and disposition.
[Doctrine]
Meantime, on October 1, 1998, the Regional The pendency of a petition for cancellation of union
Director, in NCR-OD-9710-006-IRD, issued an registration does not preclude collective bargaining.
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Order denying the petition for cancellation of

respondent union’s certificate of registration. Said
decision by the regional director was affirmed by
the Director of the Bureau of Labor Relations in a
resolution dated December 29, 1998, dismissing the
appeal of the petitioner hospital from the said
DOLE-NCR’s decisión.
On September 20, 2001, the Appellate Court
rendered a Decision affirming the Orders of the
Secretary of Labor. Finally, the petition for
certiorari was dismissed in a decision dated January
11, 2001. The motion for reconsideration which was
subsequently filed was denied on March 23, 2001.
Issues: (1) Whether or not a petition for

cancellation of a union’s registration is a prejudicial
question; (2) Whether or not the SOLE can exercise
his powers under Article 263 (g) of the Labor Code
without observing the requirements of due process.
Standard Chartered Bank Facts: Standard Bank is a foreign banking No. In order to show that the employer committed
Employees Union v. Confesor corporation doing business in the Philippines. The ULP under the Labor Code, substantial evidence is
GR No. 114974 exclusive bargaining agent of the rank-and-file required to support the claim. The circumstances that
June 16, 2004 employees of the Bank is the Standard Chartered occurred during the negotiation do not show that the
Bank Employees Union (the Union). The Bank and the suggestion made by Diokno to Divinagracia is an
Union signed a five-year collective bargaining anti-union conduct from which it can be inferred that
agreement (CBA) with a provision to renegotiate the the Bank consciously adopted such act to yield
terms thereof on the third year. Prior to the adverse effects on the free exercise of the right to
expiration of the three-year period but within the self-organization and collective bargaining of the
sixty-day freedom period, the Union initiated the employees, especially considering that such was
negotiations. undertaken previous to the commencement of the
negotiation and simultaneously with Divinagracias
The Union, through its President, Eddie L. suggestion that the bank lawyers be excluded from
Divinagracia, sent a letter containing its its negotiating panel.
proposals covering political provisions and thirty-
four (34) economic provisions. Included therein was The records show that after the initiation of the
a list of the names of the members of the Unions collective bargaining process, with the inclusion of
negotiating panel. The Union suggested to the Banks Umali in the Unions negotiating panel, the
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Human Resource Manager and head of the negotiations pushed through. The complaint was
negotiating panel, Cielito Diokno, that the bank made only on after a deadlock was declared by
lawyers should be excluded from the negotiating the Union.
team. The Bank acceded. Meanwhile, Diokno
suggested to Divinagracia that Jose P. Umali, Jr., the It is clear that such ULP charge was merely an
President of the National Union of Bank Employees afterthought. The accusation occurred after the
(NUBE), the federation to which the Union was arguments and differences over the economic
affiliated, be excluded from the Unions negotiating provisions became heated and the parties had
panel. However, Umali was retained as a member become frustrated. It happened after the parties
thereof. started to involve personalities. As the public
respondent noted, passions may rise, and as a
The parties met and set the ground rules for the result, suggestions given under less adversarial
negotiation. Diokno suggested that the negotiation situations may be colored with unintended
be kept a family affair. Due to an impasse, Union meanings. Such is what appears to have happened
declared a DEADLOCK and filed a Notice of Strike. in this case.
The Bank, on the other hand, filed a complaint for
unfair labor practice. The Secretary of Labor
assume jurisdiction and dismissed both complaints. [Doctrine]
Hence, this petition for Certiorari. The duty to bargain does not compel either party to
agree to a proposal or require the making of a
Issue: Whether or not the Union was able to concession. Hence, the parties’ failure to agree did
substantiate its claim of unfair labor practice not amount to ULP under Article 248(g) for violation
against the Bank arising from the latter’s alleged of the duty to bargain
interference with its choice of negotiator, surface
bargaining, making bad faith non-economic
proposals, and refusal to furnish the Union with
copies of the relevant data.
General Milling Corporation v. Facts: In its two plants located at Cebu City and Yes. The law mandates that the representation
Court of Appeals Lapu-Lapu City, petitioner employed 190 workers. provision of a CBA should last for five years. The
GR No. 146728 They were all members of private respondent relation between labor and management should be
February 11, 2004 General Milling Corporation Independent Labor undisturbed until the last 60 days of the fifth
Union. On April 28, 1989, petitioner and the union year. Hence, it is indisputable that when the union
concluded CBA which included the issue of requested for a renegotiation of the economic terms
representation effective for a term of three years. of the CBA on November 29, 1991, it was still the
The day before the expiration of the CBA, the union certified collective bargaining agent of the workers,
sent petitioner a proposed CBA, with a request that because it was seeking said renegotiation within 5
years from the date of effectivity of the CBA on
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a counterproposal be submitted within ten days. December 1, 1988. The union’s proposal was also
submitted within the prescribed 3-year period from
However, petitioner had received collective and the date of effectivity of the CBA, albeit just before
individual letters from workers who stated that they the last day of said period. It was obvious
had withdrawn from their union membership, on that GMC had no valid reason to refuse to
grounds of religious affiliation and personal negotiate in good faith with the union. For refusing
differences. Believing that the union no longer had to send a counterproposal to the union and to
standing to negotiate a CBA, petitioner did not send bargain anew on the economic terms of the CBA,
any counterproposal. the company committed an unfair labor practice
On December 16, 1991, petitioner wrote a letter to
the union’s officers, Rito Mangubat and Victor [Doctrine]
Lastimoso. The letter stated that it felt there was no The law mandates that the representation provision
basis to negotiate with a union which no longer of a CBA should last 5 years. Where the company
existed, but that management was nonetheless refuses to send a counterproposal to the union and
always willing to dialogue with them on matters of to bargain anew on the economic terms of the CBA,
common concern and was open to suggestions on it commits an unfair labor practice.
how the company may improve its operations. In
answer, the union officers wrote a letter dated
December 19, 1991 disclaiming any massive
disaffiliation or resignation from the union and
submitted a manifesto, signed by its members,
stating that they had not withdrawn from the union.
The NLRC held that the action of petitioner in not

negotiating was unfair labor practice.
Issue: Whether or not the petitioner should have

entered into collective bargaining with the union.
FVC Labor Union-Philippine Facts: The petitioner signed a five-year CBA with No. The root of the controversy can be traced to a
Transport and General Workers the company from February 1, 1998 to January 30, misunderstanding of the interaction between a
Organization v. Sama-Samang 2003. At the end of the 3rd year of the five-year union’s exclusive bargaining representation status in
Nagkakaisang Manggagawa sa term and pursuant to the CBA, the petitioner and the a CBA and the term or effective period of the CBA.
FVC-Solidarity of Independent company entered into the renegotiation of the CBA
and General Labor Organizations and modified, among other provisions, the CBA’s The Court held the petitioner’s position to be correct,
GR No. 176249 duration. Article XXV, Section 2 of the renegotiated but only with respect to the original five-year term
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November 27, 2009 CBA provides that “this re-negotiation agreement of the CBA which, by law, is also the effective
shall take effect beginning February 1, 2001 and period of the union’s exclusive bargaining
until May 31, 2003” thus extending the original representation status. While the parties may agree
five-year period of the CBA by four (4) months. to extend the CBA’s original five-year term together
with all other CBA provisions, any such amendment
9 days before the January 30, 2003 expiration of or term in excess of five years will not carry with it
the originally-agreed five-year CBA term (and four a change in the union’s exclusive collective
[4] months and nine [9] days away from the bargaining status. As per Article 253-A, the
expiration of the amended CBA period), the exclusive bargaining status cannot go beyond five
respondent filed before the DOLE a petition for years and the representation status is a legal
certification election for the same rank-and-file unit matter not for the workplace parties to agree upon.
covered by the FVCLU-PTGWO CBA. The petitioner In other words, despite an agreement for a CBA
moved to dismiss the petition on the ground that the with a life of more than five years, either as an
certification election petition was filed outside the original provision or by amendment, the bargaining
freedom period or outside of the sixty (60) days union’s exclusive bargaining status is effective only
before the expiration of the CBA on May 31, 2003. for five years and can be challenged within sixty
days prior to the expiration of the CBA’s first five
The petitioner has taken the view that its exclusive years.
representation status should fully be in step with the
term of the CBA and that this status can be In the present case, the CBA was originally signed
challenged only within 60 days before the for a period of five years, i.e., from February 1,
expiration of this term. Thus, when the term of the 1998 to January 30, 2003, with a provision for the
CBA was extended, its exclusive bargaining status renegotiation of the CBA’s other provisions at the
was similarly extended so that the freedom period end of the 3rd year of the five-year CBA term.
Thus, prior to January 30, 2001 the workplace
for the filing of a petition for certification election
should be counted back from the expiration of the parties sat down for renegotiation but instead of
amended CBA term. confining themselves to the economic and non-
economic CBA provisions, also extended the life of
the CBA for another four months, i.e., from the
Issue: Whether or not the negotiated extension of original expiry date on January 30, 2003 to May
the CBA term has a legal effect on the petitioner’s 30, 2003.
exclusive bargaining representation status?
The negotiated extension of the CBA term has no
legal effect on the petitioner’s exclusive bargaining
representation status which remained effective only
for five years ending on the original expiry date of
January 30, 2003. Thus, sixty days prior to this
date, or starting December 2, 2002, the respondent
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could properly file a petition for certification

election. Its petition, filed on January 21, 2003 or 9
days before the expiration of the CBA and of
petitioner’s exclusive bargaining status, was
seasonably filed.
[Doctrine]
The law allows a challenge to the exclusive
representation status of a collective bargaining
agent through the filing of certification election
petition only within 60 days from the expiration of
the five-year CBA.
RFM Corporation v. KAMPI- Facts: Yes. Daily-paid employees are entitled to

NAFLU-KMU Petitioner RFM Corporation (RFM) is a domestic payment of their regular salaries during a special
GR No. 162324 corporation engaged in flour-milling and animal holiday, even if unworked, even if they fell on
February 4, 2009 feeds manufacturing. rest days.
Sometime in 2000, its Flour Division and SFI Feeds If the terms of a CBA are clear and have no doubt
Division entered into collective bargaining upon the intention of the contracting parties, as in
agreements (CBAs) with their respective labor the herein questioned provision, the literal meaning
unions, the Kasapian ng Manggagawang thereof shall prevail. That is settled. As such, the
Pinagkaisa-RFM (KAMPI-NAFLU-KMU) for the Flour daily-paid employees must be paid their regular
Division, and Sandigan at Ugnayan ng salaries on the holidays which are so declared by
Manggagawang Pinagkaisa-SFI (SUMAPI-NAFLU- the national government, regardless of whether they
KMU) for the Feeds Division (respondents). fall on rest days.
The CBAs, which contained similar provisions, were Holiday pay is a legislated benefit enacted as part
effective for five years, from July 1, 2000 up to of the Constitutional imperative that the State shall
June 30, 2005. afford protection to labor. Its purpose is not
merely "to prevent diminution of the monthly income
Sec. 3, Art. XVI of each of the CBAs reads: of the workers on account of work interruptions. In
Section. 3. Special Holidays with Pay – The other words, although the worker is forced to take a
COMPANY agrees to make payment to all rest, he earns what he should earn, that is, his
daily paid employees, in respect of any of holiday pay."
the days enumerated hereunto if declared
as special holidays by the national The CBA is the law between the parties, hence, they
government: are obliged to comply with its provisions. Indeed, if
a) Black Saturday petitioner and respondents intended the provision in
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b) November 1 question to cover payment only during holidays

c) December 31 falling on work or weekdays, it should have been so
The compensation rate shall be the regular rate. incorporated therein.
Any work beyond eight (8) hours shall be paid the Petitioner maintains, however, that the parties failed
standard ordinary premium. to foresee a situation where the special holiday
would fall on a rest day. The Court is not
During the first year of the effectivity of the CBAs in persuaded. The Labor Code specifically enjoins that
2000, December 31 which fell on a Sunday was in case of doubt in the interpretation of any law or
declared by the national government as a special provision affecting labor, it should be interpreted in
holiday. favor of labor.
Respondents claimed payment of their members’ [Doctrine]

salaries, invoking the above-stated CBA provision. If the terms of a CBA are clear and have no doubt
Petitioner refused the claims for payment, averring upon the intention of the contracting parties, as in
that December 31, 2000 was not compensable as it the herein questioned provision, the literal meaning
was a rest day. The controversy resulted in a thereof shall prevail.
deadlock, drawing the parties to submit the same
for voluntary arbitration.
Issue: Whether or not the daily-paid employees

must be paid their regular salaries on the
holidays which are so declared by the national
government, regardless of whether they fall on
rest days
Facts: Yes, the acts of the company constituted an unfair

Employees Union of Bayer v. Petitioner Employees Union of Bayer labor practice. When an employer proceeds to
Bayer Phils. Philippines (EUBP) is the exclusive bargaining agent negotiate with a splinter union despite the
GR No. 162943 of all rank-and-file employees of Bayer Philippines existence of its valid CBA with the duly certified
December 6, 2010 (Bayer), and is an affiliate of the Federation of Free and exclusive bargaining agent, the former
Workers (FFW). In 1997, EUBP, headed by its indubitably abandons its recognition of the latter
president Juanito S. Facundo (Facundo), negotiated and terminates the entire CBA.
with Bayer for the signing of a collective bargaining
agreement (CBA). During the negotiations, EUBP It must be remembered that a CBA is entered into in
rejected Bayer’s 9.9% wage-increase proposal order to foster stability and mutual cooperation
resulting in a bargaining deadlock. Subsequently, between labor and capital. An employer should not
EUBP staged a strike, prompting the Secretary of be allowed to rescind unilaterally its CBA with the
the Department of Labor and Employment (DOLE) to duly certified bargaining agent it had previously
- 293 -
assume jurisdiction over the dispute. contracted with, and decide to bargain anew with a
different group if there is no legitimate reason for
Pending the resolution of the dispute, respondent doing so and without first following the proper
Avelina Remigio (Remigio) and 27 other union procedure. If such behavior would be tolerated,
members, without any authority from their union bargaining and negotiations between the employer
leaders, accepted Bayer’s wage-increase proposal. and the union will never be truthful and meaningful,
EUBP’s grievance committee questioned Remigio’s and no CBA forged after arduous negotiations will
action and reprimanded Remigio and her allies. ever be honored or be relied upon.
DOLE Secretary issued an arbitral award ordering This is the reason why it is axiomatic in labor
EUBP and Bayer to execute a CBA retroactive to relations that a CBA entered into by a legitimate
January 1, 1997 and to be made effective until labor organization that has been duly certified as
December 31, 2001. The said CBA was registered the exclusive bargaining representative and the
on July 8, 1998 with the Industrial Relations Division employer becomes the law between them.
of the DOLE-National Capital Region (NCR). Additionally, in the Certificate of Registration issued
by the DOLE, it is specified that the registered CBA
Barely six months from the signing of the new CBA, serves as the covenant between the parties and has
during a company-sponsored seminar, Remigio the force and effect of law between them during
solicited signatures from union members in support the period of its duration. Compliance with the terms
of a resolution containing the decision of the and conditions of the CBA is mandated by express
signatories to: (1) disaffiliate from FFW, (2) rename policy of the law primarily to afford protection to
the union as Reformed Employees Union of Bayer labor and to promote industrial peace. Thus, when a
Philippines (REUBP), (3) adopt a new constitution valid and binding CBA had been entered into by
and by-laws for the union, (4) abolish all existing the workers and the employer, the latter is
officer positions in the union and elect a new set of behooved to observe the terms and conditions
interim officers, and (5) authorize REUBP to thereof bearing on union dues and representation. If
administer the CBA between EUBP and Bayer. The the employer grossly violates its CBA with the duly
said resolution was signed by 147 of the 257 local recognized union, the former may be held
union members. A subsequent resolution was also administratively and criminally liable for unfair
issued affirming the first resolution. labor practice.
Both groups seeking recognition from Bayer and Respondents cannot claim good faith to justify their
demanding remittance of the union dues collected acts. They knew that Facundo’s group represented
from its rank-and-file members. the duly-elected officers of EUBP. Moreover, they
were cognizant of the fact that even the DOLE
Remigio’s splinter group wrote Facundo, FFW and Secretary himself had recognized the legitimacy of
Bayer informing them of the decision of the majority EUBP’s mandate by rendering an arbitral award
of the union members to disaffiliate from FFW. This ordering the signing of the 1997-2001 CBA
- 294 -
was followed by another letter informing Facundo, between Bayer and EUBP. Respondents were
FFW and Bayer that an interim set of REUBP likewise well-aware of the pendency of the intra-
executive officers and board of directors had been union dispute case, yet they still proceeded to turn
appointed, and demanding the remittance of all over the collected union dues to REUBP and to
union dues to REUBP. Remigio also asked Bayer to effusively deal with Remigio. The totality of
desist from further transacting with EUBP. Facundo, respondents’ conduct, therefore, reeks with anti-
meanwhile, sent similar requests to Bayer requesting EUBP animus.
for the remittance of union dues in favor of EUBP
and accusing the company of interfering with purely [Doctrine]
union matters. An employer should not be allowed to rescind
unilaterally its Collective Bargaining Agreements
Bayer responded by deciding not to deal with (CBA) with the duly certified bargaining agent it
either of the two groups, and by placing the union had previously contracted with, and decide to
dues collected in a trust account until the conflict bargain anew with a different group if there is no
between the two groups is resolved. legitimate reason for doing so and without first
following the proper procedure.
EUBP filed a complaint for unfair labor practice
(first ULP complaint) against Bayer for non-
remittance of union dues.
While the first ULP case was still pending and

despite EUBP’s repeated request for a grievance
conference, Bayer decided to turn over the collected
union dues amounting to ₱254,857.15 to
respondent Anastacia Villareal, Treasurer of REUBP.
Aggrieved by the said development, EUBP lodged

a complaint on March 4, 1999 against Remigio’s
group before the Industrial Relations Division of the
DOLE praying for their expulsion from EUBP for
commission of "acts that threaten the life of the
union."
Labor Arbiter Jovencio Ll. Mayor, Jr. dismissed

the first ULP complaint for lack of jurisdiction. The
Arbiter explained that the root cause for Bayer’s
failure to remit the collected union dues can be
traced to the intra-union conflict between EUBP and
- 295 -
Remigio’s group
Petitioners filed a second ULP complaint against

herein respondents. Three days later, petitioners
amended the complaint charging the respondents
with unfair labor practice committed by organizing
a company union, gross violation of the CBA and
violation of their duty to bargain. Petitioners
complained that Bayer refused to remit the
collected union dues to EUBP despite several
demands sent to the management. They also
alleged that notwithstanding the requests sent to
Bayer for a renegotiation of the last two years of
the 1997-2001 CBA between EUBP and Bayer, the
latter opted to negotiate instead with Remigio’s
group.
On even date, REUBP and Bayer agreed to sign a

new CBA. Remigio immediately informed her allies
of the management’s decision.
In response, petitioners immediately filed an urgent

motion for the issuance of a restraining
order/injunction before the National Labor Relations
Commission (NLRC) and the Labor Arbiter against
respondents. Petitioners asserted their authority as
the exclusive bargaining representative of all rank-
and-file employees of Bayer and asked that a
temporary restraining order be issued against
Remigio’s group and Bayer to prevent the
employees from ratifying the new CBA. Later,
petitioners filed a second amended complaint to
include in its complaint the issue of gross violation of
the CBA for violation of the contract bar rule
following Bayer’s decision to negotiate and sign a
new CBA with Remigio’s group.
- 296 -
Issue: Whether the act of the management of

Bayer in dealing and negotiating with Remigio’s
splinter group despite its validly existing CBA
with EUBP can be considered unfair labor
practice?
General Milling Corporation- Facts: Yes, the imposed CBA has full force and effect
Independent Labor Union v. On 28 April 1989, GMC and the Union entered into even though it was not agreed upon by the Union
General Milling Corporation a collective bargaining agreement (CBA) which and the company.
GR No. 183122 provided, among other terms, the latter’s
June 15, 2011 representation of the collective bargaining unit for a Anent its period of effectivity, Article XIV of the
three-year term made to retroact to 1 December imposed CBA provides that "(t)his Agreement shall
1988. be in full force and effect for a period of five (5)
years from 1 December 1991, provided that sixty
On 29 November 1991 or one day before the (60) days prior to the lapse of the third year of
expiration of the subject CBA, the Union sent a draft effectivity hereof, the parties shall open
CBA proposal to GMC, with a request for counter- negotiations on economic aspect for the fourth and
proposals from the latter. In view of GMC’s failure fifth years effectivity of this Agreement."
to comply with said request, the Union commenced
the complaint for unfair labor practice. Considering that no new CBA had been, in the
meantime, agreed upon by GMC and the Union, we
SC in a decision dated 11 February 2004 rendered find that the CA correctly ruled in CA-G.R. CEB-SP
by the Court’s then Second Division, the CA’s 30 No. 02226 that, pursuant to Article 253 of the
January 1998 decision and 26 October 2000 Labor Code, the provisions of the imposed CBA
resolution were affirmed. continues to have full force and effect until a new
CBA has been entered into by the parties.
With the ensuing finality of the foregoing decision,
the Union filed a motion for issuance of a writ of Article 253 mandates the parties to keep the status
execution, to enforce the claims of the covered quo and to continue in full force and effect the terms
employees which it computed in the sum of and conditions of the existing agreement during the
P433,786,786.36 and to require GMC to produce 60-day period prior to the expiration of the old
said employee’s time cards for the purpose of CBA and/or until a new agreement is reached by
computing their overtime pay, night shift the parties. In the same manner that it does not
differentials and labor standard benefits for work provide for any exception nor qualification on which
rendered on rest days, legal holidays and special economic provisions of the existing agreement are
holidays. to retain its force and effect, the law does not
distinguish between a CBA duly agreed upon by the
However, GMC opposed said motion on the ground, parties and an imposed CBA like the one under
- 297 -
among other matters, that the bargaining unit no consideration.

longer exist in view of the resignation, retrenchment,
retirement and separation from service of workers [Doctrine]
who have additionally executed waivers and Article 253 of the Labor Code mandates the parties
quitclaims acknowledging full settlement of their to keep the status quo and to continue in full force
claims; that the covered employees have already and effect the terms and conditions of the existing
received salary increases and benefits for the agreement during the 60-day period prior to the
period 1991 to 1993; and, that aside from the expiration of the old Collective Bargaining
aforesaid supervening events which precluded the Agreement.
enforcement thereof, the decision rendered in the
case simply called for the execution of a CBA
incorporating the Union’s proposal, not the outright
computation of benefits thereunder.
Issue: Whether the imposed CBA has full force

and effect considering that it was not agreed upon
by the Union and GMC?
Malayan Employees Association- Facts: No.

FFW and Rodolfo Mangalino v. The Union is the exclusive bargaining agent of the
Malayan Insurance Company, rank-and-file employees of the company. A While it is true that the union and its members have
Inc. provision in the union's collective bargaining been granted union leave privileges under the CBA,
GR No. 181357 agreement (CBA) with the company allows union the grant cannot be considered separately from the
February 2, 2010 officials to avail of union leaves with pay for a total other provisions of the CBA, particularly the
of "ninety-man" days per year for the purpose of provision on management prerogatives where the
attending grievance meetings, Labor-Management CBA reserved for the company the full and
Committee meetings, annual National Labor complete authority in managing and running its
Management Conferences, labor education business. We see nothing in the wordings of the
programs and seminars, and other union activities. union leave provision that removes from the
company the right to prescribe reasonable rules
The company issued a rule in November 2002 and regulations to govern the manner of availing of
requiring not only the prior notice that the CBA union leaves, particularly the prerogative to require
expressly requires, but prior approval by the prior approval. Precisely, prior notice is expressly
department head before the union and its members required under the CBA so that the company can
can avail of union leaves. The rule was placed into appropriately respond to the request for leave. In
effect in November 2002 without any objection this sense, the rule requiring prior approval only
from the union until a union officer, Mangalino, filed made express what is implied in the terms of the
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union leave applications in January and February, CBA.

2004. His department head disapproved the
applications because the department was In any event, any doubt in resolving any
undermanned at that time. interpretative conflict is settled by subsequent
developments in the course of the parties'
Despite the disapproval, Mangalino proceeded to implementation of the CBA, specifically, by the
take the union leave. He said he believed in good establishment of the company regulation in
faith that he had complied with the existing November 2002 requiring prior approval before
company practice and with the procedure set forth the union leave can be used. The union accepted this
in the CBA. The company responded by suspending regulation without objection since its promulgation
him for one week and, thereafter, for a month, for (or more than a year before the present dispute
his second offense in February 2004. arose), and the rule on its face is not unreasonable,
oppressive, nor violative of CBA terms.
The union raised the suspensions as a grievance issue
and went through all the grievance processes, No letter from the union complaining about the
including the referral of the matter to the company's unilateral change in policy or any request for a
president, Yvonne Yuchengco. After all internal meeting to discuss this policy appears on record.
remedies failed, the union went to the National The union and its members have willingly applied
Conciliation and Mediation Board for preventive for approval as the rule requires. Even Mangalino
mediation. himself, in the past, had filed applications for union
leave with his department manager, and willingly
complied with the disapproval without protest. Thus,
Issue: Whether the grant of union leaves when Mangalino asserted his right to take a leave
privileges under the CBA can be considered without prior approval, the requirement for prior
separately from the other provisions of the CBA? approval was already in place and established,
and could no longer be removed except with the
company's consent or by negotiation and express
agreement in future CBAs.
The "prior approval" policy fully supported the

validity of the suspensions the company imposed on
Mangalino. As an employee, Mangalino had the
clear obligation to comply with the management
disapproval of his requested leave while at the
same time registering his objection to the company
regulation and action. That he still went on leave, in
open disregard of his superior's orders, rendered
Mangalino open to the charge of insubordination,
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separately from his absence without official leave.
[Doctrine]
While it is true that the union and its members have
been granted union leave privileges under the CBA,
the grant cannot be considered separately from the
other provisions of the CBA.
Santuyo v. Remerco Garments Facts: No.

Manufacturing Inc. From 1992 to 1994, due to a serious industrial
GR No. 174420 dispute, the Kaisahan ng Manggagawa sa Remerco Petitioners clearly and consistently questioned the
March 22, 2010 Garments Manufacturing Inc.-KMM Kilusan (union) legality of RGMI’s adoption of the new salary
staged a strike against respondent Remerco scheme (i.e., piece-rate basis), asserting that such
Garments Manufacturing, Inc. (RGMI). Because the action, among others, violated the existing CBA.
strike was subsequently declared illegal, all union Indeed, the controversy was not a simple case of
officers were dismissed. illegal dismissal but a labor dispute involving the
manner of ascertaining employees’ salaries, a
Employees who wanted to sever their employment matter which was governed by the existing CBA.
were paid separation pay while those who wanted With regard to the question of jurisdiction over the
to resume work were recalled on the condition that subject matter, Article 217(c) of the Labor Code
they would no longer be paid a daily rate but on a provides:
piece-rate basis. Petitioners, who had been
employed as sewers, were among those recalled. Article 217. Jurisdiction of Labor Arbiters
and the Commission. x x x x x x x x x (c)
Without allowing RGMI to normalize its operations, Cases arising from the interpretation or
the union filed a notice of strike in the National implementation of collective bargaining
Conciliation and Mediation Board (NCMB) on August agreements and those arising from the
8, 1995. According to the union, RGMI conducted a interpretation or enforcement of company
time and motion study and changed the salary personnel policies shall be disposed of by
scheme from a daily rate to piece-rate basis without the Labor Arbiter by referring the same to
consulting it. RGMI therefore not only violated the the grievance machinery and voluntary
existing collective bargaining agreement (CBA) but arbitration as may be provided in said
also diminished the salaries agreed upon. It agreements.
therefore committed an unfair labor practice.
This provision requires labor arbiters to refer cases
On November 11, 1995, while the union and RGMI involving the implementation of CBAs to the
were undergoing conciliation in the NCMB, RGMI grievance machinery provided therein and to
transferred its factory site. On November 13, 1995, voluntary arbitration. Moreover, Article 260 of the
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the union went on strike and blocked the entry to Labor Code clarifies that such disputes must be
RGMI’s (new) premises. In an order dated referred first to the grievance machinery and, if
November 21, 1995, the Secretary of Labor unresolved within seven days, they shall
assumed jurisdiction pursuant to Article 263(g) of the automatically be referred to voluntary arbitration.
Labor Code and ordered RGMI’s striking workers to
return to work immediately. The Secretary of the Labor assumed jurisdiction over
the labor dispute between the union and RGMI and
The Secretary of Labor held that RGMI did not lock resolved the same in his September 18, 1996 order.
out its employees inasmuch as it informed them of Article 263(g) of the Labor Code gives the
the transfer of the worksite. However, he did not Secretary of Labor discretion to assume jurisdiction
rule on the legality of the strike. over a labor dispute likely to cause a strike or a
lockout in an industry indispensable to the national
Furthermore, the Secretary of Labor found that the interest and to decide the controversy or to refer
employees would receive higher wages if they were the same to the NLRC for compulsory arbitration. In
paid on a piece-rate rather than on a daily rate doing so, the Secretary of Labor shall resolve all
basis. Hence, the new salary scheme would be more questions and controversies in order to settle the
advantageous to the employees. dispute. His power is therefore plenary and
discretionary in nature to enable him to effectively
In an order dated September 18, 1996, the and efficiently dispose of the issue.
Secretary of Labor ordered all employees to return
to work and RGMI to pay its employees their The Secretary of Labor assumed jurisdiction over the
unpaid salaries (from September 25, 1995 to controversy because RGMI had a substantial
October 14, 1995) on the piece-rate basis. Neither number of employees and was a major exporter of
the union nor RGMI appealed the aforementioned garments to the United States and Canada. In view
order. of these considerations, the Secretary of Labor
resolved the labor dispute between the union and
On October 18, 1995, while the conciliation RGMI in his September 18, 1996 order. Since
proceedings between the union and respondent neither the union nor RGMI appealed the said
were pending, petitioners filed a complaint for order, it became final and executory. Settled is the
illegal dismissal against RGMI and respondent rule that unions are the agent of its members for the
Victoria Reyes, accusing the latter of harassment. purpose of securing just and fair wages and good
working conditions. Since petitioners were part of
Respondents, on the other hand, moved to dismiss the bargaining unit represented by the union and
the complaint in view of the pending conciliation members thereof, the September 18, 1996 order of
proceedings (which involved the same issue) in the the Secretary of Labor applies to them.
NCMB. Moreover, alleged violations of the CBA Furthermore, since the union was the bargaining
should be resolved according to the grievance agent of petitioners, the complaint was barred
procedure laid out therein. Thus, the labor arbiter under the principle of conclusiveness of judgments.
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had no jurisdiction over the complaint. The parties to a case are bound by the findings in a
previous judgment with respect to matters actually
raised and adjudged therein. Hence, the labor
Issue: Whether the Labor Arbiter had jurisdiction? arbiter should have dismissed the complaint on the
ground of res judicata.
[Doctrine]
Article 217 of the Labor Code requires labor
arbiters to refer cases involving the implementation
of Collective Bargaining Agreements (CBAs) to the
grievance machinery provided therein and to
voluntary arbitration.
Insular Hotel Employees Union- Facts: None because of lack of personality of petitioners
NFL v. Waterfront Hotel Davao Employer filed a notice of suspension of operations to file the case before the NCMB.
GR No. 174040-41 that it will suspend its operations for 6 months due to
September 22, 2010 severe and serious business losses. As to individual members, only a certified or duly
recognized bargaining agent may file a notice or
President of the local union intimated their desire to request for preventive mediation (Section 3, Rule IV
help to reopen the hotel by reducing their benefits of the NCMB Manual of Procedure).
and retirements, and downsizing the number of rank
and file employees by issuing a Memorandum of It is curious that even Cullo himself admitted, in a
Agreement. (MOA) number of pleadings, that the case was filed not by
the Union but by individual members thereof.
Employer resumed its operations. The national union Clearly, therefore, the NCMB had no jurisdiction to
through its officials filed a notice of mediation for entertain the notice filed before it. Even though
Diminution of wages and other benefits through respondent signed a Submission Agreement, it had,
unlawful Memorandum of Agreement before the however, immediately manifested its desire to
NCMB. withdraw from the proceedings after it became
apparent that the Union had no part in the
The Local Union, representatives of National union complaint.
and employer were called by NCMB.
As to National Federation, a local union does not
Local union contented that (1) The persons who filed owe its existence to the federation with which it is
the instant complaint in the name of the Insular Hotel affiliated. It is a separate and distinct voluntary
Employees Union-NFL have no authority to represent association owing its creation to the will of its
the Union. (2) It did not also issue resolution members. Mere affiliation does not divest the local
authorizing either the representatives of the national union of its own personality, neither does it give the
- 302 -
union nor the national union itself to file the notice of mother federation the license to act independently
mediation with the NCMB. of the local union. It only gives rise to a contract of
agency, where the former acts in representation of
the latter. Hence, local unions are considered
Issue: Whether the NCMB and Voluntary principals while the federation is deemed to be
Arbitrators had jurisdiction over the complaint? merely their agent.
[Doctrine]
Only a certified or duly recognized bargaining
agent may file a notice or request for preventive
mediation.
Cirtek Employees Labor Union- Facts: No, the Sec. did not commit grave abuse of
Federation of Free Workers v. Prior to the 3rd year of the CBA, the parties discretion.
Cirtek Electronics, Inc. renegotiated its economic provisions but failed to
GR No. 190515 reach a settlement, particularly on the issue of wage It is well-settled that the Secretary of Labor, in the
November 15, 2010 increases. Petitioner (CELU) thereupon declared a exercise of his power to assume jurisdiction under
bargaining deadlock and filed a Notice of Strike the Labor Code, may resolve all issues involved in
with the National Conciliation and Mediation Board- the controversy including the award of wage
Regional Office. Respondent (CEI), upon the other increases and benefits. While an arbitral award
hand, filed a Notice of Lockout cannot per se be categorized as an agreement
voluntarily entered into by the parties because it
as amicable settlement of the CBA was deadlocked, requires the intervention and imposing power of the
petitioner went on strike on June 20, 2005. By State thru the Secretary of Labor when he assumes
Order dated June 23, 2005, the Secretary of Labor jurisdiction, the arbitral award can be considered
assumed jurisdiction over the controversy and issued an approximation of a collective bargaining
a Return to Work Order which was complied with. agreement which would otherwise have been
entered into by the parties, hence, it has the force
Before the Secretary of Labor could rule on the and effect of a valid contract obligation.
controversy, the parties entered into a Memorandum
of Agreement (MOA) providing for daily wage Here, even though the arbitral award was higher
increases of P6.00 per day effective January 1,
than that which was purportedly agreed upon in the
2004 and P9.00 per day effective January 1, MOA is of no moment. For the Secretary, in
2005. The MOA was submitted to the Sec. of
resolving the CBA deadlock, is not limited to
Labor. considering the MOA as basis in computing the
wage increases. He could, as he did, consider the
On March 16, 2006, the Secretary of Labor financial documents submitted by respondent as
resolved the CBA deadlock by awarding a wage well as their bargaining histories.
- 303 -
increase of from P6.00 to P10.00 per day effective

January 1, 2004 and from P9.00 to P15.00 per It bears noting that since the filing and submission of
day effective January 1, 2005, and adopting all the MOA did not have the effect of divesting the
other benefits as embodied in the MOA. Secretary of his jurisdiction, or of automatically
disposing the controversy, then neither should the
Respondent filed a petition for certiorari claiming provisions of the MOA restrict the Secretary’s
that the Sec. committed grave abuse of discretion leeway in deciding the matters before him.
for awarding a higher amount than in the MOA. CA
agrees with respondent. While the terms and conditions of a CBA constitute
the law between the parties, it is not, however, an
ordinary contract to which is applied the principles
Issue: Whether the Sec. of Labor committed grave of law governing ordinary contracts. A CBA, as a
abuse of discretion in awarding higher wages not labor contract within the contemplation of Article
in the MOA? 1700 of the Civil Code of the Philippines which
governs the relations between labor and capital, is
not merely contractual in nature but impressed with
public interest, thus, it must yield to the common
good.
[Doctrine]
It is well-settled that the Secretary of Labor, in the
exercise of his power to assume jurisdiction under
the Labor Code, may resolve all issues involved in
the controversy.
Eastern Telecoms v. Eastern Facts: Yes.

Telecoms Employees Union ETPI is a corporation engaged in the business of
GR No. 185665 providing telecommunications facilities, particularly The grant of a bonus is basically a management
February 8, 2012 leasing international date lines or circuits, regular prerogative which cannot be forced upon the
landlines, internet and data services, employing employer who may not be obliged to assume the
approximately 400 employees. onerous burden of granting bonuses or other
benefits aside from the employee’s basic salaries or
ETEU is the certified exclusive bargaining agent of wages. A bonus, however, becomes a demandable
the company’s rank and file employees with a or enforceable obligation when it is made part of
strong following of 147 regular members. It has an the wage or salary or compensation of the
existing collective bargaining agreement with the employee.
company.
Whether or not a bonus forms part of wages
- 304 -
The labor dispute was a spin-off of the company’s depends upon the circumstances and conditions for
plan to defer payment of the 2003 14th, 15th and its payment. If it is additional compensation which
16th month bonuses due to allege continuing the employer promised and agreed to give without
deterioration of company’s financial position. any conditions imposed for its payment, such as
success of business or greater production or output,
The union strongly opposed the deferment in then it is part of the wage. But if it is paid only if
payment of the bonuses by filing a preventive profits are realized or if a certain level of
mediation complaint with the NCMB, the purpose of productivity is achieved, it cannot be considered
which complaint is to determine the date when the part of the wage. Where it is not payable to all but
bonus should be paid. only to some employees and only when their labor
becomes more efficient or more productive, it is only
Considering the agreement forged between the an inducement for efficiency, a prize therefore, not
parties, the said agreement was reduced to a a part of the wage.
Memorandum of Agreement.
In the case at bench, it is indubitable that ETPI and
The union requested that the President of the ETEU agreed on the inclusion of a provision for the
company should be made a signatory to the grant of 14th, 15th and 16th month bonuses in the
agreement, however, the latter refused to sign. In 1998-2001 CBA Side Agreement as well as in the
addition to such a refusal, the company made a 2001-2004 CBA Side Agreement, which was signed
sudden turnaround in its position by declaring that on September 3, 2001. The provision, which was
they will no longer pay the bonuses until the issue is similarly worded, states:
resolved through compulsory arbitration.
Employment-Related Bonuses
ETEU filed a Notice of Strike on the ground of unfair The Company confirms that the 14th, 15th and 16th
labor practice for failure of ETPI to pay the bonuses month bonuses (other than the 13th month pay) are
in gross violation of the economic provision of the granted.
existing CBA.
A reading of the above provision reveals that the
Issue: Whether ETPI is liable to pay 14th, 15th and same provides for the giving of 14th,15th and 16th
16 month bonuses?
th month bonuses without qualification. There were no
conditions specified in the CBA Side Agreements for
the grant of the benefits contrary to the claim of
ETPI that the same is justified only when there are
profits earned by the company. Said provision does
not state that the subject bonuses shall be made to
depend on the ETPI’s financial standing or that their
payment was contingent upon the realization of
profits. Neither does it state that if the company
- 305 -
derives no profits, no bonuses are to be given to the

employees. Indeed, if ETPI and ETEU intended that
the subject bonuses would be dependent on the
company earnings, such intention should have been
expressly declared in the Side Agreements or the
bonus provision should have been deleted
altogether. Verily, by virtue of its incorporation in
the CBA Side Agreements, the grant of 14th, 15th
and 16th month bonuses has become more than just
an act of generosity on the part of ETPI but a
contractual obligation it has undertaken. Moreover,
the continuous conferment of bonuses by ETPI to the
union members from 1998 to 2002 by virtue of the
Side Agreements evidently negates its argument
that the giving of the subject bonuses is a
management prerogative.
ETPI also cannot insist on business losses as a basis

for disregarding its undertaking. ETPI appears to be
well aware of its deteriorating financial condition
when it entered into the 2001-2004 CBA Side
Agreement with ETEU and obliged itself to pay
bonuses to the members of ETEU. Considering that
ETPI had been continuously suffering huge losses
from 2000 to 2002, its business losses in the year
2003 were not exactly unforeseen or unexpected.
Besides, mere pecuniary inability to fulfill an
engagement does not discharge a contractual
obligation. Contracts, once perfected, are binding
between the contracting parties. Obligations arising
therefrom have the force of law and should be
complied with in good faith. ETPI cannot renege
from the obligation it has freely assumed when it
signed the 2001-2004 CBA Side Agreement.
Granting arguendo that the CBA Side Agreement

does not contractually bind petitioner ETPI to give
the subject bonuses, nevertheless, the Court finds
- 306 -
that its act of granting the same has become an

established company practice such that it has
virtually become part of the employees’ salary or
wage. A bonus may be granted on equitable
consideration when the giving of such bonus has
been the company’s long and regular practice. To
be considered a "regular practice," the giving of the
bonus should have been done over a long period of
time, and must be shown to have been consistent
and deliberate. The test or rationale of this rule on
long practice requires an indubitable showing that
the employer agreed to continue giving the benefits
knowing fully well that said employees are not
covered by the law requiring payment thereof.
The records show that ETPI, aside from complying

with the regular 13th month bonus, has been further
giving its employees 14th month bonus every April
as well as 15th and 16th month bonuses every
December of the year, without fail, from 1975 to
2002 or for 27 years whether it earned profits or
not. The considerable length of time ETPI has been
giving the special grants to its employees indicates
a unilateral and voluntary act on its part to continue
giving said benefits knowing that such act was not
required by law. Accordingly, a company practice
in favor of the employees has been established and
the payments made by ETPI pursuant thereto
ripened into benefits enjoyed by the employees.
[Doctrine]
Mere pecuniary inability to fulfill an engagement
does not discharge a contractual obligation.
Contracts, once perfected, are binding between the
contracting parties. Obligations arising therefrom
have the force of law and should be complied with
in good faith.
- 307 -
PNCC Skyway Traffic Facts: Yes.

Management & Security Division Petitioner PNCC Skyway Corporation Traffic
Workers Organization v. PNCC Management and Security Division Workers' The rule is that where the language of a contract is
Skyway Corp. Organization (PSTMSDWO) is a labor union duly plain and unambiguous, its meaning should be
GR No. 171231 registered with the DOLE. Respondent PNCC determined without reference to extrinsic facts or
February 17, 2010 Skyway Corporation is a corporation duly aids. The intention of the parties must be gathered
organized and operating under and by virtue of the from that language, and from that language alone.
laws of the Philippines. Stated differently, where the language of a written
contract is clear and unambiguous, the contract must
On November 15, 2002, petitioner and respondent be taken to mean that which, on its face, it purports
entered into a Collective Bargaining Agreement to mean, unless some good reason can be assigned
(CBA) incorporating the terms and conditions of their to show that the words used should be understood in
agreement which included vacation leave and a different sense.
expenses for security license provisions.
In the case at bar, the contested provision of the
Article VIII, Section 1 (b) of the CBA, the pertinent CBA is clear and unequivocal. Article VIII, Section 1
provisions of the CBA relative to vacation leave and (b) of the CBA categorically provides that the
sick leave that the company shall schedule the scheduling of vacation leave shall be under the
vacation leave of employees during the year taking option of the employer. The preference requested
into consideration the request of preference of the by the employees is not controlling because
employees. Any unused vacation leave shall be respondent retains its power and prerogative to
converted to cash and shall be paid to the consider or to ignore said request.
employees on the first week of December each
year." Thus, if the terms of a CBA are clear and leave no
doubt upon the intention of the contracting parties,
Petitioner objected to the implementation of the said the literal meaning of its stipulation shall prevail.
memorandum. It insisted that the individual members RFM Corporation-Flour Division and SFI Feeds
of the union have the right to schedule their vacation Division v. Kasapian ng Manggagawang
leave. It opined that the unilateral scheduling of the Pinagkaisa-RFM (KAMPI-NAFLU-KMU) and
employees' vacation leave was done to avoid the Sandigan at Ugnayan ng Manggagawang
monetization of their vacation leave in December Pinagkaisa-SFI (SUMAPI-NAFLU-KMU)G.R. No.
2004. 162324, February 4, 2009.In fine, the CBA must be
strictly adhered to and respected if its ends have to
Petitioner also demanded that the expenses for the be achieved, being the law between the parties.
required in-service training of its member security The parties cannot be allowed to change the terms
guards, as a requirement for the renewal of their they agreed upon on the ground that the same are
license, be shouldered by the respondent. However, not favorable to them.
the respondent did not accede to petitioner's
- 308 -
demands and stood firm on its decision to schedule There is, thus, no basis for the Voluntary Arbitrator
all the vacation leave of petitioner's members. to interpret the subject provision relating to the
Due to the disagreement between the parties, schedule of vacation leaves as being subject to the
petitioner elevated the matter to the DOLE-NCMB discretion of the union members. There is simply
for preventive mediation. For failure to settle the nothing in the CBA which grants the union members
issue amicably, the parties agreed to submit the this right.
issue before the voluntary arbitrator.
It must be noted the grant to management of the
Respondent filed a motion for reconsideration, which right to schedule vacation leaves is not without good
the voluntary arbitrator denied. Aggrieved, reason. Indeed, if union members were given the
respondent filed a Petition for Certiorari with unilateral discretion to schedule their vacation
Prayer for Temporary Restraining Order and/or leaves, the same may result in significantly crippling
Writ of Preliminary Injunction with the CA, and the the number of key employees of the petitioner
CA annulled and setting aside the decision and manning the toll ways on holidays and other peak
order of the voluntary arbitrator. The CA ruled that seasons, where union members may wittingly or
since the provisions of the CBA were clear, the unwittingly choose to have a vacation. Put another
voluntary arbitrator has no authority to interpret the way, the grant to management of the right to
same beyond what was expressly written. schedule vacation leaves ensures that there would
Petitioner filed a motion for reconsideration, which always be enough people manning and servicing
the CA denied Hence, the instant petition. the toll ways, which in turn assures the public plying
the same orderly and efficient toll way service.
Issue: Whether the management has sole
discretion to schedule the vacation leave of the Indeed, the multitude or scarcity of personnel
petitioner? manning the tollways should not rest upon the option
of the employees, as the public using the skyway
system should be assured of its safety, security and
convenience.
Although the preferred vacation leave schedule of

petitioner's members should be given priority, they
cannot demand, as a matter of right, that their
request be automatically granted by the
respondent. If the petitioners were given the
exclusive right to schedule their vacation leave then
said right should have been incorporated in the
CBA. In the absence of such right and in view of the
mandatory provision in the CBA giving respondent
the right to schedule the vacation leave of its
- 309 -
employees, compliance therewith is mandated by

law.
In the grant of vacation leave privileges to an

employee, the employer is given the leeway to
impose conditions on the entitlement to and
commutation of the same, as the grant of vacation
leave is not a standard of law, but a prerogative of
management. Sobrepe, Jr. v. Court of Appeals, 345
Phil. 714. It is a mere concession or act of grace of
the employer and not a matter of right on the part
of the employee. Thus, it is well within the power
and authority of an employer to impose certain
conditions, as it deems fit, on the grant of vacation
leaves, such as having the option to schedule the
same.
[Doctrine]
The Collective Bargaining Agreement (CBA) must be
strictly adhered to and respected if its ends have to
be achieved, being the law between the parties.
Supreme Steel v. Nagkakaisang Facts: Yes.

Manggagawa sa Supreme Respondent filed a notice of strike with the National
GR No. 185556 Conciliation and Mediation Board (NCMB) on the Upon the well-established precepts, SC sustained
March 28, 2011 ground that petitioner violated 11 provisions of the the CA’s findings and conclusions on all the issues,
CBA. except the issue pertaining to the denial of the
COLA under Wage Order to the employees who
The parties failed to settle their dispute. are not minimum wage earners.
Consequently, the Secretary of Labor certified the
case to the NLRC for compulsory arbitration 1. Denial to four employees of the CBA- provided
wage increase
In the NLRC, 8/11 provisions were decided in
Respondent’s favor whereas 2 (denial of paternity The wording of the CBA on general wage increase
leave benefit and discrimination of union members) cannot be interpreted any other way: The CBA
were decided in favor of petitioner, while the issue increase should be given to all employees "over and
on visitor’s free access to company premises was above" the amount they are receiving, even if that
deemed settled during the mandatory conference. amount already includes an anniversary increase.
- 310 -
Stipulations in a contract must be read together, not

in isolation from one another.
Issue: Whether petitioner violated the CBA
provisions? Consideration of Article XIII, Section 2 (non-crediting
provision), bolsters such interpretation. Section 2
states that "[a]ll salary increase granted by the
company shall not be credited to any future
contractual or legislated wage increases." Clearly
then, even if petitioner had already awarded an
anniversary increase to its employees, such increase
cannot be credited to the "contractual" increase as
provided in the CBA, which is considered "separate
and distinct."
Petitioner claims that it has been the company

practice to offset the anniversary increase with the
CBA increase. It however failed to prove such
material fact.
2. Failure to provide shuttle service
Petitioner’s excuse in not providing a shuttle service

to its employees is unacceptable. Petitioner simply
says that it is difficult to implement the provision. It
relies on the fact that "no time element [is] explicitly
stated [in the CBA] within which to fulfill the
undertaking. We cannot allow petitioner to
dillydally in complying with its obligation and
take undue advantage of the fact that no period is
provided in the CBA. Petitioner should recondition
the company vehicle at once, lest it be charged with
and found guilty of unfair labor practice.
3-5. Denial of (a) reimbursement for the first-aid

medicines by employee when he was injured during
the company sportsfest and the transportation cost
incurred in going to the hospital, (b) payment of the
wages of certain employees during the time they
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spent at the grievance meetings, and (c) payment of

the employees’ wages during the brownout.
Petitioner gave a narrow construction to the

wording of the CBA.As previously stated, the CBA
must be construed liberally rather than narrowly
and technically. It is the duty of the courts to place a
practical and realistic construction upon the CBA,
giving due consideration to the context in which it is
negotiated and the purpose which it is intended to
serve. Absurd and illogical interpretations should be
avoided. A CBA, like any other contract, must be
interpreted according to the intention of the parties.
a)The concerned employees were not seeking

hospitalization benefits under Article VIII, Section 1
of the CBA, but under Section 4 thereof; hence,
confinement in a hospital is not a prerequisite for
the claim. Petitioner should reimburse the first aid
medicines; after all, it is the duty of the employer to
maintain first- aid medicines in its premises.
Similarly, it reimburse the transportation cost
incurred in going to the hospital. The Omnibus Rules
Implementing the Labor Code provides that, where
the employer does not have an emergency hospital
in its premises, the employer is obliged to transport
an employee to the nearest hospital or clinic in case
of emergency.
b) The intention of the parties is obviously to

compensate the employees for the time that they
spend in a grievance meeting as the CBA provision
categorically states that the company will pay the
employee "a paid time-off for handling of
grievances, investigations, labor-management
conferences." It does not make a qualification that
such meeting should be held during office hours or
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within the company premises.

c)The employees should also be compensated for
the time they were prevented from working due to
the brownout. The CBA enumerates some of the
instances considered as "emergencies" and these
are "typhoons, flood earthquake, transportation
strike." The CBA does not exclusively enumerate the
situations which are considered "emergencies."
Obviously, the key element of the provision is that
employees "who have reported for work are unable
to continue working" because of the incident. It is
therefore reasonable to conclude that brownout or
power outage is considered an "emergency"
situation.
6. Contracting-out labor
Petitioner, in effect, admits having hired
"temporary" employees, but it maintains that it was
an exercise of management prerogative,
necessitated by the increase in demand for its
product.
The exercise of management prerogative is not
unlimited. Managerial prerogatives are subject to
limitations provided by law, collective bargaining
agreements, and general principles of fair play and
justice. The CBA is the norm of conduct between the
parties and, as previously stated, compliance
therewith is mandated by the express policy of the
law.
The CBA is clear in providing that temporary
employees will no longer be allowed in the
company except in the Warehouse and Packing
Section. Petitioner is bound by this provision. It
cannot exempt itself from compliance by invoking
management prerogative. Management
prerogative must take a backseat when faced with
a CBA provision. If petitioner needed additional
personnel to meet the increase in demand, it could
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have taken measures without violating the CBA.
7. Illegal Dismissal
Madayag’s dismissal was illegal. It is already
settled that the burden to prove the validity of the
dismissal rests upon the employer. Dismissal based
on Article 284 of the Labor Code is no different.
The law is unequivocal: the employer, before it can
legally dismiss its employee on the ground of
disease, must adduce a certification from a
competent public authority that the disease of which
its employee is suffering is of such nature or at such
a stage that it cannot be cured within a period of
six months even with proper treatment.
8 Non-implementation of COLA in Wage Order

Nos. RBIII-10 and 11
Whether the COLA under Wage Order Nos. RBIII-

10 and 11 should be implemented across the
board, we hold a different view from that of the
CA. No diminution of benefits would result if the
wage orders are not implemented across the board,
as no such company practice has been established.
CA arrived at its ruling by relying on the fact that

there was no ambiguity in the wording of the wage
order as to the employees covered by it. From this,
the CA concluded that petitioner actually made no
error or mistake, but acted voluntarily, in granting
the COLA to all its employees. It therefore took
exception to the Globe Mackay case which,
according to it, applies only when there is a
doubtful or difficult question involved.
The CA failed to note that Globe Mackay primarily
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emphasized that, for the grant of the benefit to be

considered voluntary, "it should have been
practiced over a long period of time, and must be
shown to have been consistent and deliberate." The
fact that the practice must not have been due to
error in the construction or application of a doubtful
or difficult question of law is a distinct requirement.
Here, the implementation of the COLA under Wage

Order No. RBIII-10 across the board only lasted for
less than a year, it cannot be considered as having
been practiced "over a long period of time." While
it is true that jurisprudence has not laid down any
rule requiring a specific minimum number of years in
order for a practice to be considered as a
voluntary act of the employer, under existing
jurisprudence on this matter, an act carried out
within less than a year would certainly not qualify
as such. Hence, the withdrawal of the COLA Wage
Order No. RBIII-10 from the salaries of non-minimum
wage earners did not amount to a "diminution of
benefits" under the law.
In the same way that we required petitioner to

prove the existence of a company practice when it
alleged the same as defense, at this instance, we
also require respondent to show proof of the
company practice as it is now the party claiming its
existence. Absent any proof of specific, repetitive
conduct that might constitute evidence of the
practice, we cannot give credence to respondent’s
claim.
[Doctrine]
CBA is the law between the parties and compliance
therewith is mandated by the express policy of the
law. If the terms of a CBA are clear and there is no
doubt as to the intention of the contracting parties,
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the literal meaning of its stipulation shall prevail.

Moreover, the CBA must be construed liberally
rather than narrowly and technically and the Court
must place a practical and realistic construction
upon it. Any doubt in the interpretation of any law
or provision affecting labor should be resolved in
favor of labor
Managerial prerogatives are subject to limitations

provided by law, collective bargaining agreements,
and general principles of fair play and justice.
PNCC Skyway Traffic Facts: Petitioner PNCC Skyway Corporation Traffic Yes, the management has sole discretion to
Management & Security Management and Security Division Workers' schedule the vacation leave of the petitioner. Where
Division Workers Organization Organization (PSTMSDWO) and respondent PNCC the language of a written contract is clear and
v. PNCC Skyway Corp. Skyway Corporation entered into a Collective unambiguous, the contract must be taken to mean that
GR No. 171231 Bargaining Agreement (CBA) incorporating the which, on its face, it purports to mean, unless some
February 17, 2010 terms and conditions of their agreement which good reason can be assigned to show that the words
included vacation leave and expenses for security used should be understood in a different sense.
license provisions.
In the case at bar, the contested provision of the CBA
Article VIII, Section 1 (b) of the CBA, the pertinent is clear and unequivocal. The CBA categorically
provisions of the CBA relative to vacation leave and provides that the scheduling of vacation leave shall be
sick leave states that the company shall schedule the under the option of the employer. The preference
vacation leave of employees during the year taking requested by the employees is not controlling because
into consideration the request of preference of the respondent retains its power and prerogative to
employees. Any unused vacation leave shall be consider or to ignore said request.
converted to cash and shall be paid to the
employees on the first week of December each There is, thus, no basis for the Voluntary Arbitrator to
year. interpret the subject provision relating to the schedule
of vacation leaves as being subject to the discretion of
Petitioner objected to the implementation of the said the union members. There is simply nothing in the CBA
memorandum. It insisted that the individual members which grants the union members this right.
of the union have the right to schedule their vacation
leave. It opined that the unilateral scheduling of the It must be noted the grant to management of the right
employees' vacation leave was done to avoid the to schedule vacation leaves is not without good
monetization of their vacation leave in December reason. Indeed, if union members were given the
2004. Petitioner also demanded that the expenses unilateral discretion to schedule their vacation leaves,
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for the required in-service training of its member the same may result in significantly crippling the
security guards, as a requirement for the renewal of number of key employees of the petitioner manning
their license, be shouldered by the respondent. the toll ways on holidays and other peak seasons,
However, the respondent did not accede to where union members may wittingly or unwittingly
petitioner's demands and stood firm on its decision choose to have a vacation. Put another way, the grant
to schedule all the vacation leave of petitioner's to management of the right to schedule vacation
members. leaves ensures that there would always be enough
people manning and servicing the toll ways, which in
Due to the disagreement between the parties, turn assures the public plying the same orderly and
petitioner elevated the matter to the DOLE-NCMB efficient toll way service.
for preventive mediation. For failure to settle the
issue amicably, the parties agreed to submit the Indeed, the multitude or scarcity of personnel manning
issue before the voluntary arbitrator. Respondent the tollways should not rest upon the option of the
filed a motion for reconsideration, which the employees, as the public using the skyway system
voluntary arbitrator denied. Aggrieved, respondent should be assured of its safety, security and
filed a Petition for Certiorari with Prayer for convenience.
Temporary Restraining Order and/or Writ of
Preliminary Injunction with the CA, and the CA [Doctrine]
annulled and setting aside the decision and order of The CBA must be strictly adhered to and respected if
the voluntary arbitrator. The CA ruled that since the its ends have to be achieved, being the law between
provisions of the CBA were clear, the voluntary the parties. The parties cannot be allowed to change
arbitrator has no authority to interpret the same the terms they agreed upon on the ground that the
beyond what was expressly written. Petitioner filed same are not favorable to them.
a motion for reconsideration, which the CA denied
Hence, the instant petition.
Issue: Whether or not the management has sole

discretion to schedule the vacation leave of the
petitioner.
Supreme Steel v. Nagkakaisang Facts: Respondent Nagkakaisang Manggagawa ng Yes, the CA partly erred in affirming the NLRC
Manggagawa ng Supreme Supreme Independent Union (NMS-IND-APL) filed a decision. The CBA is the law between the parties and
Independent Union (NMS-IND- notice of strike with the National Conciliation and compliance therewith is mandated by the express
APL) Mediation Board (NCMB) on the ground that policy of the law. If the terms of CBA are clear and
GR No. 185556 petitioner violated certain provisions of the CBA. there is no doubt as to the intention of the contracting
March 28, 2011 Respondent alleged eleven CBA violations, parties, the literal meaning of its stipulation shall
enumerated as follows: (1) denial to four employees prevail. Moreover, the CBA must be construed
of the CBA- provided wage increase, (2) liberally rather than narrowly and technically and the
- 317 -
contracting-out labor, (3) failure to provide shuttle Court must place a practical and realistic construction
service, (4) refusal to answer for medical expenses upon it. Any doubt in the interpretation of any law or
incurred by three employees, (5) failure to comply provision affecting labor should be resolved in favor
with time-off provision, (6) visitors free access to of labor. Upon these well-established precepts, the
company premises, (7) failure to comply with CAs findings and conclusions on all the issues are
reporting time-off provision, (8) dismissal of an sustained, except the issue pertaining to the denial of
employee supposedly due to disease, (9) denial of the COLA under Wage Order No. RBIII-10 and 11 to
paternity leave benefit to two employees, (10) the employees who are not minimum wage earners,
discrimination and harassment, and (11) non- which respondent avers as a diminution of benefits.
implementation of COLA in Wage Order Nos. RBIII-
10 and 11. Here, the implementation of the COLA under Wage
Order No. RBIII-10 across the board only lasted for
Out of the eleven issues raised by respondent, eight less than a year, it cannot be considered as having
were decided in its favor; two (denial of paternity been practiced "over a long period of time." While it
leave benefit and discrimination of union members) is true that jurisprudence has not laid down any rule
were decided in favor of petitioner; while the issue requiring a specific minimum number of years in order
on visitors free access to company premises was for a practice to be considered as a voluntary act of
deemed settled during the mandatory conference. the employer, under existing jurisprudence on this
Petitioners appeal to the CA was dismissed. matter, an act carried out within less than a year
would certainly not qualify as such. Hence, the
According to the CA, petitioner failed to show that withdrawal of the COLA Wage Order No. RBIII-10
the NLRC committed grave abuse of discretion in from the salaries of non-minimum wage earners did
finding that it violated certain provisions of the CBA. not amount to a "diminution of benefits" under the law.
With regard to wage increase, The CA concluded
that, based on the wording of the CBA, which uses [Doctrine]
the words "general increase" and "over and The CBA is the law between the parties and
above," it cannot be said that the parties have compliance therewith is mandated by the express
intended the anniversary increase to be given in lieu policy of the law. If the terms of CBA are clear and
of the CBA wage increase. The CA declared that there is no doubt as to the intention of the contracting
the withdrawal of the COLA under Wage Order parties, the literal meaning of its stipulation shall
No. RBIII-10 from the employees who were not prevail.
minimum wage earners amounted to a diminution of
benefits because such grant has already ripened
into a company practice. Based on the principle of
liberal construction of the CBA, the CA likewise
sustained the NLRCs rulings on the issues pertaining
to medical expenses, the shuttle service, time-off for
attendance in grievance meetings/hearings, and
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time-off due to brownouts. Finally, the CA affirmed

the NLRCs finding that Madayags dismissal was
illegal. It emphasized that the burden to prove that
the employees disease is of such nature or at such
stage that it cannot be cured within a period of six
months rests on the employer, who failed to prove
such.
Issue: Whether or not the CA erred in affirming the
decision of the NLRC.
- 319 -
Wesleyan University v.
Wesleyan University Faculty Facts: The parties signed a 5-year CBA. WUP No, the one-retirement policy and the Memrandum
and Staff Association issued a Memorandum providing guidelines on the is not valid. The Non-Diminution Rule prohibits
GR No. 181806 implementation (Changes) of vacation and sick employers from eliminating or reducing the benefits
March 12, 2014 leave credits as well as vacation leave commutation. received by their employees. This rule, however,
Respondent Union wrote a letter to the WUP applies only if the benefit is based on an express
President informing him that respondent is not policy, a written contract, or has ripened into a
amenable to the unilateral changes made by WUP. practice. (Art. 100, LC) To be considered a practice, it
It questioned the guidelines for being violative of must be consistently and deliberately made by the
existing practices and the CBA, specifically Sections employer over a long period of time. An exception is
1 and 2, Article XII of the CBA, to wit: when the practice is due to error in the construction or
application of a doubtful or difficult question of law.
SECTION 1. VACATION LEAVE.—All regular and The error, however, must be corrected immediately
non- tenured rank-and-file faculty and staff who after its discovery; otherwise, the rule on Non-
are entitled to receive shall enjoy fifteen (15) days Diminution of Benefits would still apply.
vacation leave with pay annually.
1. 1.1 All unused vacation leave after the second
year of service shall be converted into cash and be The practice of giving two retirement benefits to
paid to the entitled employee at the end of each petitioner’s employees is supported by substantial
school year to be given not later than August 30 of evidence. Here, the union was able to present
each year. substantial evidence in the form of affidavits to
support its claim that there are two retirement plans.
SECTION 2. SICK LEAVE.—All regular and non- Based on the affidavits, petitioner has been giving
tenured rank-and-file faculty and staff shall enjoy two retirement benefits as early as 1997. Petitioner,
fifteen (15) days sick leave with pay annually. on the other hand, failed to present any evidence to
refute the veracity of these affidavits. Petitioner’s
A Labor Management Committee (LMC) Meeting assertion that there is only one retirement plan as the
was held during which petitioner advised CBA Retirement Plan and the PERAA Plan are one and
respondent to file a grievance complaint on the the same is not supported by any evidence. In fact,
implementation of the vacation and sick leave petitioner’s assertion is negated by the announcement
policy. In the same meeting, petitioner announced its it made during the LMC Meeting on February 8, 2006
plan of implementing a one-retirement policy, which regarding its plan of implementing a “one-retirement
was unacceptable to respondent. plan.” For if it were true that petitioner was already
implementing a one-retirement policy, there would
Petitioner contends that there is only one retirement have been no need for such announcement.
plan as the CBA Retirement Plan and the PERAA
Plan are one and the same. There is no established Equally damaging is the letter-memorandum entitled
company practice or policy of giving two retirement “Suggestions on the defenses we can introduce to
justify the abolition of double retirement policy,”
- 320 -
benefits to its employees. Assuming, without prepared by the petitioner’s legal counsel. On the
admitting, that two retirement benefits were allegation that that such practice (two retirement
released, these were done by mere oversight or plans) is illegal or unauthorized and that the benefits
mistake as there is no Board Resolution authorizing were erroneously given by the previous
their release. administration, no evidence was presented to support
this. The retired employees of petitioner have nothing
Respondent belies the claims of petitioner and to lose or gain in this case as they have already
asserts that there are two retirement plans as the received their retirement benefits. Thus, they have no
PERAA Retirement Plan, which has been reason to perjure themselves.
implemented for more than 30 years, is different
from the CBA Retirement Plan. As to the The Memorandum dated August 16, 2005 is contrary
Memorandum dated August 16, 2005, respondent to the existing CBA. Sections 1 and 2 of Article XII of
asserts that it is arbitrary and contrary to the CBA the CBA provide that all covered employees are
and existing practices as it added qualifications or entitled to 15 days sick leave and 15 days vacation
limitations which were not agreed upon by the leave with pay every year and that after the second
parties. year of service, all unused vacation leave shall be
converted to cash and paid to the employee at the
Issue: Whether or not the one-retirement policy end of each school year, not later than August 30 of
and the Memrandum is valid. each year. The Memorandum dated August 16, 2005,
however, states that vacation and sick leave credits
are not automatic as leave credits would be earned
on a month-to- month basis. Considering that the
Memorandum dated August 16, 2005 imposes a
limitation not agreed upon by the parties nor stated in
the CBA, it must be struck down.
[Doctrine]
Unilateral changes or suspensions in the
implementation of the provisions of the CBA, cannot be
allowed without the consent of both parties.
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SONEDCO Workers Free Labor Facts: Universal Robina Corporation Sugar Division - Yes, petitioners are entitled to the wage increase
Union v. URC Southern Negros Development Corporation (URC- and other economic benefits. Since the 2009 CBA
GR No. 220383 SONEDCO) and Philippine Agricultural Commercial did not include the years 2007 and 2008, the alleged
October 5, 2016 and Industrial Workers Union (PACIWU-TUCP), then purpose of the waivers, which was to prevent double
the exclusive bargaining representative of URC- compensation, was already served. It would be unfair
SONEDCO's rank-and-file employees, entered into for the employees to still not receive the benefits for
a Collective Bargaining Agreement (CBA) effective 2007 and 2008 simply because they refused to sign
until 2006. Under the 2002 CBA, rank-and-file a waiver that was already moot. However, there is no
employees were entitled to a wage increase of need for the continuation of the wage increase for
P14.00/day for 2002 and P12.00/day for the 2007 and 2008 since the 2009 CBA contains wage
succeeding years until 2006. After the 2002 CBA increase provisions for 2009 to 2013.
was signed, a certification election was conducted.
SONEDCO Workers Free Labor Union won and As explained in Samahang Manggagawa sa Top
replaced PACIWU-TUCP as the exclusive Form Manufacturing v. NLRC, if a proposal is not
bargaining representative. URC-SONEDCO printed in the collective bargaining agreement, it
consistently refused to negotiate a new collective cannot be demanded. The CBA is the law between the
bargaining agreement with SONEDCO Workers contracting parties — the collective bargaining
Free Labor Union, despite several demands from representative and the employer-company.
SONEDCO Workers Free Labor Union, allegedly Compliance with a CBA is mandated by the expressed
due to the 2002 CBA, which it signed with PACIWU- policy to give protection to labor, in the same vein,
TUCP. CBA provisions should be "construed liberally rather
than narrowly and technically, and the courts must
With no collective bargaining agreement in effect, place a practical and realistic construction upon it,
URC-SONEDCO informed the rank-and-file giving due consideration to the context in which it is
employees that they would be granted the negotiated and purpose which it is intended to serve."
following economic benefits: Wage increase of
P16.00/day effective January 1, 2007; Group life This is founded on the dictum that a CBA is not an
insurance of P50,000.00 coverage/year; ordinary contract but one impressed with public
Emergency leave in lieu of bereavement leave, up interest. It goes without saying, however, that only
to five (5) days per year; and Cash loan in lieu of provisions embodied in the CBA should be so
emergency loan of P5,000.00, payable in 11 interpreted and complied with. Where a proposal
months. raised by a contracting party does not find print in the
CBA, it is not a part thereof and the proponent has no
URC-SONEDCO asked the employees who wished claim whatsoever to its implementation. If petitioners
to avail themselves of these-benefits to sign an wanted the wage increase for 2007 and 2008 to be
acknowledgment receipt/waiver (2007 waiver), carried on, the proper recourse would have been to
which stated that in the event that a subsequent CBA demand that this be included in the 2009 CBA.
is negotiated between Management and Union, the
- 322 -
new CBA shall only be effective January 1, 2008. [Doctrine]

URC-SONEDCO claimed that the 2007 waiver was Where a proposal raised by a contracting party does
designed to avoid and/or prevent double not find print in the CBA, it is not a part thereof and
compensation. Several SONEDCO Workers Free the proponent has no claim whatsoever to its
Labor Union members refused to sign the 2007 implementation.
waiver. Hence, they did not receive the benefits
given to other members of the bargaining unit who
had done so.
A certification election was conducted. SONEDCO

Workers Free Labor Union won again and
proceeded to negotiate a new CBA, which became
effective January 1, 2009 to December 31, 2013
(2009 Collective Bargaining Agreement).
SONEDCO Workers Free Labor Union and its
members who refused to sign the 2007 and 2008
waivers filed a complaint for unfair labor practices
against URC-SONEDCO. They argued that the
requirement of a waiver before the release of the
wage increase violated their right to self-
organization, collective bargaining, and concerted
action.
Issue: Whether or not the petitioners, who refused

to sign the 2007 and 2008 waivers, are entitled to
the wage increase and other economic benefits as a
continuing employee benefit notwithstanding the
2009 CBA.
- 323 -
UNFAIR LABOR PRACTICES

Collective Bargaining
Labor Code: Arts. 258-260, 274

Employees Union of Bayer Facts: Petitioner Employees Union of Bayer Yes, it is considered as a ULP. A CBA entered
Phils. v. Bayer Phils. Philippines (EUBP) is the exclusive bargaining agent into by a legitimate labor organization that has
GR No. 162943 of all rank-and-file employees of Bayer Philippines, been duly certified as the exclusive bargaining
December 6, 2010 and is an affiliate of the Federation of Free representative and the employer becomes the
Workers (FFW). EUBP negotiated with Bayer for the law between them. Additionally, in the Certificate
signing of a CBA. EUBP rejected Bayer's 9.9%
wage-increase proposal resulting in a bargaining
of Registration issued by the DOLE, it is specified
deadlock. EUBP staged a strike, prompting the that the registered CBA serves as the covenant
Secretary of the DOLE to assume jurisdiction over between the parties and has the force and effect
the dispute. Pending the resolution of the dispute, of law between them during the period of its
respondent Remigio and 27 other union members, duration. Thus, when a valid and binding CBA
without any authority from their union leaders, had been entered into by the workers and the
accepted Bayer's wage-increase proposal. 6 months employer, the latter is behooved to observe the
from the signing of the new CBA, Remigio solicited terms and conditions thereof bearing on union
signatures from union members in support of a dues and representation. If the employer grossly
resolution containing the decision of the signatories violates its CBA with the duly recognized union,
to: (1) disaffiliate from FFW; (2) rename the union the former may be held administratively and
as Reformed Employees Union of Bayer Philippines
(REUBP); (3) adopt a new constitution and by-laws
criminally liable for unfair labor practice.
for the union; (4) abolish all existing officer positions
in the union and elect a new set of interim officers; Respondents cannot claim good faith to justify
and (5) authorize REUBP to administer the CBA their acts. When an employer proceeds to
between EUBP and Bayer. The said resolution was negotiate with a splinter union despite the
signed by 147 of the 257 local union members. existence of its valid CBA with the duly certified
and exclusive bargaining agent, the former
EUBP filed a complaint for unfair labor practice indubitably abandons its recognition of the latter
(first ULP complaint) against Bayer for non- and terminates the entire CBA. They knew that
remittance of union dues. While the first ULP case Facundo's group represented the duly-elected
was still pending and despite EUBP's repeated officers of EUBP. Moreover, they were cognizant
request for a grievance conference, Bayer decided
of the fact that even the DOLE Secretary himself
- 324 -
to turn over the collected union dues to respondent had recognized the legitimacy of EUBP's mandate
Anastacia Villareal, Treasurer of REUBP. by rendering an arbitral award ordering the
signing of the 1997-2001 CBA between Bayer
Petitioners filed a second ULP complaint against and EUBP.
herein respondents. Petitioners complained that
Bayer refused to remit the collected union dues to
EUBP despite several demands sent to the [Doctrine]
management. Notwithstanding the requests sent to When a valid and binding CBA had been entered into
Bayer for a renegotiation of the last two years of by the workers and the employer, the latter is
the 1997-2001 CBA between EUBP and Bayer, the behooved to observe the terms and conditions thereof
latter opted to negotiate instead with Remigio's bearing on union dues and representation. If the
group. employer grossly violates its CBA with the duly
recognized union, the former may be held
Issue: Whether or not the act of the management of administratively and criminally liable for unfair labor
Bayer in dealing and negotiating with Remigio's practice.
splinter group despite its validly existing CBA with
EUBP is considered to be anunfair labor practice.
Prince Transport v. Garcia Facts: Respondents alleged that they were Yes, PTI is guilty of ULP. The Court ruled that
GR No. 167291 employees of Prince Transport, Inc. (PTI) respondents’ transfer of work assignments to Lubas
January 12, 2011 Respondents were hired either as drivers, was designed by petitioners as a subterfuge to foil
conductors, mechanics or inspectors, except for the former’s right to organize themselves into a union.
respondent Diosdado Garcia (Garcia), who was Under Article 248 (a) and (e) of the Labor Code, an
assigned as Operations Manager; in addition to employer is guilty of unfair labor practice if it
their regular monthly income, respondents also interferes with, restrains or coerces its employees in
received commissions equivalent to 8 to 10% of the exercise of their right to self-organization or if it
their wages. The said commissions were reduced to discriminates in regard to wages, hours of work and
7 to 9%. This led respondents and other employees other terms and conditions of employment in order to
of PTI to hold a series of meetings to discuss the encourage or discourage membership in any labor
protection of their interests as employees; these organization.
meetings led petitioner Renato Claros, who is the
president of PTI, to suspect that respondents are Indeed, evidence of petitioners' unfair labor
about to form a union; he made known to Garcia practice is shown by the established fact that,
his objection to the formation of a union; in after respondents' transfer to Lubas, petitioners
December 1997, PTI employees requested for a
cash advance, but the same was denied by
left them high and dry insofar as the operations
management which resulted in demoralization on of Lubas was concerned. The Court finds no error
the employees' ranks. in the findings and conclusion of the CA that
petitioners "withheld the necessary financial and
logistic support such as spare parts, and repair
- 325 -
Later, PTI acceded to the request of some, but not and maintenance of the transferred buses until
all, of the employees; the foregoing circumstances only two units remained in running condition." This
led respondents to form a union for their mutual aid left respondents virtually jobless.
and protection; in order to block the continued
formation of the union, PTI caused the transfer of all
union members and sympathizers to one of its sub- [Doctrine]
companies, Lubas Transport (Lubas); despite such
transfer, the schedule of drivers and conductors, as Under Article 248 (a) and (e) of the Labor Code,
well as their company identification cards, were an employer is guilty of unfair labor practice if it
issued by PTI; the daily time records, tickets and interferes with, restrains or coerces its employees
reports of the respondents were also filed at the PTI in the exercise of their right to self-organization
office; and, all claims for salaries were transacted or if it discriminates in regard to wages, hours of
at the same office; later, the business of Lubas work and other terms and conditions of
deteriorated because of the refusal of PTI to employment in order to encourage or discourage
maintain and repair the units being used therein, membership in any labor organization.
which resulted in the virtual stoppage of its
operations and respondents' loss of employment.
Petitioners, on the other hand, denied the material

allegations of the complaints contending that herein
respondents were no longer their employees, since
they all transferred to Lubas at their own request;
petitioners have nothing to do with the management
and operations of Lubas as well as the control and
supervision of the latter's employees; petitioners
were not aware of the existence of any union in
their company and came to know of the same only
in June 1998 when they were served a copy of the
summons in the petition for certification election
filed by the union; that before the union was
registered on April 15, 1998, the complaint subject
of the present petition was already filed; that the
real motive in the filing of the complaints was
because PTI asked respondents to vacate the
bunkhouse where they (respondents) and their
respective families were staying because PTI
wanted to renovate the same.
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The Labor Arbiter ruled that petitioners are not

guilty of unfair labor practice in the absence of
evidence to show that they violated
respondents’ right to self-organization. NLRC
affirmed the same upon appeal. CA reversed
the decision finding Prince Transport guilty of
ULP.
Issue: Whether or not PTI is guilty of ULP by

transferring the employees to Lubas Transport.
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Manila Mining Employees Facts: Manila Mining Corp. (MMC) is a No, MMC was not guilty of ULP. The lay-off is
Corp. v. Manila Mining Corp. corporation engaged in large-scale mining for neither illegal nor can it be considered as unfair
GR Nos. 178222-23 gold and copper ore. MMC is required by law labor practice. Despite all efforts exerted by
September 29, 2010 to maintain a tailings containment facility to MMC, it did not succeed in obtaining the consent
store the waste material generated by its of the residents of the community where the
mining operations. Consequently, MMC tailings pond would operate, one of the conditions
constructed several tailings dams to treat and imposed by DENR-EMB in granting its application
store its waste materials. One of these dams for a permanent permit. It is precisely MMC's
was Tailings Pond No. 7 (TP No. 7), which was faultless failure to secure a permit which caused
constructed in 1993 and was operated under a the temporary shutdown of its mining
permit issued by the Department of Environment operations. Unfair labor practice cannot be
and Natural Resources (DENR), through its imputed to MMC since, as ruled by the CA, the
Environmental Management Bureau (EMB) in call of MMC for a suspension of the CBA
Butuan City, Agusan del Norte. negotiations cannot be equated to "refusal to
bargain."
Eleven (11) rank – and – file employees of
MMC formed a union and filed with the
Department of Labor and Employment (DOLE) For a charge of unfair labor practice to prosper,
all the requirements for its registration, and it must be shown that the employer was motivated
thereafter acquired its legitimate registration by ill-will, bad faith or fraud, or was oppressive
status. Subsequently, it submitted letters to to labor. The employer must have acted in a
MMC relating its intention to bargain manner contrary to morals, good customs, or
collectively. The Union submitted its Collective public policy causing social humiliation, wounded
Bargaining Agreement (CBA) proposal to MMC. feelings or grave anxiety. While the law makes
it an obligation for the employer and the
Upon expiration of the tailings permit, DENR- employees to bargain collectively with each
EMB did not issue a permanent permit due to other, such compulsion does not include the
the inability of MMC to secure an Environmental commitment to precipitately accept or agree to
Compliance Certificate (ECC). An essential the proposals of the other. All it contemplates is
component of an ECC is social acceptability or that both parties should approach the negotiation
the consent of the residents in the community to with an open mind and make reasonable effort to
allow TP No. 7 to operate, which MMC failed reach a common ground of agreement.
to obtain. Hence, it was compelled to
temporarily shut down its mining operations, The Union based its contention on the letter
resulting in the temporary lay-off of more than request by MMC for the suspension of the
collective bargaining negotiations until it resumes
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400 employees in the mine site. operations. Verily, it cannot be said that MMC
deliberately avoided the negotiation. It merely
Petitioner challenged the validity of their lay- sought a suspension and in fact, even expressed
off on the averment that MMC was not suffering its willingness to negotiate once the mining
from business losses. They alleged that MMC operations resume. There was valid reliance on
did not want to bargain collectively with the the suspension of mining operations for the
Union, so that instead of submitting their suspension, in turn, of the CBA negotiation. The
counterproposal to the CBA, MMC decided to Union failed to prove bad faith in MMC's
terminate all union officers and active actuations.
members. The Union insists that MMC is guilty
of unfair labor practice when it unilaterally [Doctrine]
suspended the negotiation for a CBA. The
Union avers that the lay-off and subsequent For a charge of unfair labor practice to prosper,
termination of complainants were due to the it must be shown that the employer was motivated
formation of the union at MMC. by ill-will, bad faith or fraud, or was oppressive
to labor. The employer must have acted in a
Respondents justified the temporary lay-off as manner contrary to morals, good customs, or
bona fide in character and a valid management public policy causing social humiliation, wounded
prerogative pending the issuance of the permit to feelings or grave anxiety.
continuously operate TP No. 7. With respect to the
charge of unfair labor practice, MMC avers that it
merely deferred responding to the Union's letter-
proposal until the resumption of its mining
operations. It went to claim further that the
employment relationship between the parties was
suspended at the time the request to bargain was
made.
Issue: Whether or not the MMC was guilty of

Unfair Labor Practice when it laid-off active
members of the petitioner union.
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Central Azucarera de Bais Facts: Respondent Central Azucarera De Bais, No, CAB was not guilty of ULP. The concept of
Employees Union v. Central Inc. (CAB) is a corporation duly organized and unfair labor practice is provided in Article 247 of
Azucarera de Bais existing under the laws of the Philippines. It is the Labor Code which states:
GR No. 186605 represented by its President, Antonio Steven L.
November 17, 2010 Chan (Chan), in this proceeding. CABEU-NFL is Article 247. Concept of Unfair Labor Practice and
a duly registered labor union and a certified Procedure for Prosecution thereof. -- Unfair labor
bargaining agent of the CAB rank-and-file practices violate the constitutional right of workers
employees, represented by its President, and employees to self-organization, are inimical
Pablito Saguran (Saguran). CABEU-NFL sent to the legitimate interests of both labor and
CAB a proposed Collective Bargaining management, including their right to bargain
Agreement (CBA) seeking increases in the daily collectively and otherwise deal with each other in
wage and vacation and sick leave benefits of an atmosphere of freedom and mutual respect,
the monthly employees and the grant of leave disrupt industrial peace and hinder the promotion
benefits and 13th month pay to seasonal of healthy and stable labor-management
workers. relations.
CAB responded with a counter-proposal to the x x x

effect that the production bonus incentive and
special production bonus and incentives be The Labor Code, likewise, enumerates the acts
maintained. In addition, respondent CAB constituting unfair labor practices of the
agreed to execute a pro-rated increase of employer, thus:
wages every time the government would
mandate an increase in the minimum wage. Article 248. Unfair Labor Practices of
CAB, however, did not agree to grant Employers.––It shall be unlawful for an employer
additional and separate Christmas bonuses. to commit any of the following unfair labor
practice:
CAB received an Amended Union Proposal sent
by CABEU-NFL reducing its previous demand x x x
regarding wages and bonuses. CAB, however,
maintained its position on the matter. Thus, the (g) To violate the duty to bargain collectively as
collective bargaining negotiations resulted in a prescribed by this Code.
deadlock. On account of the impasse, “CABEU-
NFL filed a Notice of Strike with the National For a charge of unfair labor practice to prosper,
Conciliation and Mediation Board (NCMB). The it must be shown that CAB was motivated by ill
NCMB then assumed conciliatory-mediation will, “bad faith, or fraud, or was oppressive to
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jurisdiction and summoned the parties to labor, or done in a manner contrary to morals,
conciliation conferences.” good customs, or public policy, and, of course,
that social humiliation, wounded feelings or grave
In its June 2, 2005 Letter sent to CAB (letter- anxiety resulted x x x” in suspending
request), CABEU-NFL requested copies of CAB’s negotiations with CABEU-NFL. Notably, CAB
annual financial statements from 2001 to 2004 believed that CABEU-NFL was no longer the
and asked for the resumption of conciliation representative of the workers. It just wanted to
meetings. foster industrial peace by bowing to the wishes of
CAB send a letter (letter response) to NCMB the overwhelming majority of its rank and file
stating that the declared purpose of the workers and by negotiating and concluding in
requested conciliation meeting has already good faith a CBA with CABELA.” Such actions of
been rendered moot and academic because: CAB are nowhere tantamount to anti-unionism, the
evil sought to be punished in cases of unfair labor
the Union which Mr. Saguran purportedly practices.
represents has already lost its majority status
by reason of the disauthorization and Furthermore, basic is the principle that good faith
withdrawal of support thereto by more than is presumed and he who alleges bad faith has the
90% of the rank and file employees in the duty to prove the same. By imputing bad faith to
bargaining unit of Central sometime in January, the actuations of CAB, CABEU-NFL has the burden
2005, and the workers themselves, acting as of proof to present substantial evidence to
principal, after disauthorizing the previous support the allegation of unfair labor practice.
agent CABEU-NFL have organized themselves Apparently, CABEU-NFL refers only to the
into a new Union known as Central Azucarera circumstances mentioned in the letter-response,
de Bais Employees Labor Association (CABELA) namely, the execution of the supposed CBA
and after obtaining their registration certificate between CAB and CABELA and the request to
and making due representation that it is a duly suspend the negotiations, to conclude that bad
organized union representing almost all the faith attended CAB’s actions. The Court is of the
rank and file workers in the Central, had view that CABEU-NFL, in simply relying on the
concluded a new collective bargaining said letter-response, failed to substantiate its
agreement with the Central. The aforesaid CBA claim of unfair labor practice to rebut the
had been duly ratified by the rank and file presumption of good faith.
workers constituting 91% of the collective
bargaining unit. It alleges that the request for [Doctrine]
further conciliation conference will serve no For a charge of unfair labor practice to prosper,
lawful and practical purpose. it must be shown that Company was motivated by
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ill will, bad faith, or fraud, or was oppressive to

Reacting from the letter-response of CAB, labor, or done in a manner contrary to morals,
CABEU-NFL filed a Complaint for Unfair Labor good customs, or public policy, and, of course,
Practice for the former’s refusal to bargain with that social humiliation, wounded feelings or grave
it. anxiety resulted in suspending negotiations with
the Union.
Issue: Whether or not respondent CAB was
guilty of acts constituting unfair labor practice
by refusing to bargain collectively.
BPI EMPLOYEES UNION- Facts: BOMC, a subsidiary of BPI, was primarily YES. In the present case, the alleged violation of the
DAVAO v. BPI engaged in providing and/or handling support union shop agreement in the CBA, even assuming it
GR No. 174912 services for banks and other financial institutions. A was malicious and flagrant, is not a violation of an
July 24, 2013 service agreement between BPI and BOMC was economic provision in the agreement. It failed to
initially implemented in BPI’s Metro Manila branches. take into consideration its recognition of the bank’s
Not a single BPI employee was displaced and those exclusive rights and prerogatives, likewise provided in
performing the functions, which were transferred to the CBA, which included the hiring of employees,
BOMC, were given other assignments. The Manila promotion, transfers, and dismissals for just cause and
chapter of BPI Employees Union (BPIEU-Metro the maintenance of order, discipline and efficiency in
Manila-FUBU) then filed a complaint for ULP. It was its operations.
rule that the employees were neither demoted nor It is incomprehensible how the “reduction of positions in
were their salaries, benefits and other privileges the collective bargaining unit” interferes with the
diminished. employees’ right to self-organization because the
The service agreement was likewise implemented in employees themselves were neither transferred nor
Davao City. Later, a merger between BPI and Far dismissed from the service. In the case at hand, the
East Bank and Trust Company (FEBTC) took effect union has not presented even an iota of evidence that
with BPI as the surviving corporation. Consequently, petitioner bank has started to terminate certain
12 former FEBTC employees were transferred to employees, members of the union. In fact, what
BOMC to complete the latter’s service complement. appears is that the Bank has exerted utmost diligence,
BPI Davao’s rank and file collective bargaining care and effort to see to it that no union member has
agent, BPI Employees Union-Davao City-FUBU been terminated. In the process of the consolidation or
(Union), objected to the transfer contending that the merger of the two banks which resulted in increased
functions rightfully belonged to the BPI employees diversification of functions, some of these non-banking
and that the Union was deprived of membership of functions were merely transferred to the BOMC
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former FEBTC personnel who, by virtue of the without affecting the union membership.
merger, would have formed part of the bargaining [Doctrine]
unit represented by the Union pursuant to its union Only gross violations of the economic provisions of the
shop provision in the CBA. CBA are treated as ULP. Otherwise, they are mere
BPI invoked management prerogative stating that grievances. In the present case, the alleged violation
the creation of the BOMC was to preserve more of the union shop agreement in the CBA, even
jobs and to designate it as an agency to place assuming it was malicious and flagrant, is not a
employees where they were most needed. On the violation of an economic provision in the agreement. It
other hand, the Union charged that while BOMC failed to take into consideration its recognition of the
employees perform BPI functions, they were beyond bank’s exclusive rights and prerogatives, likewise
the bargaining unit’s coverage. In contracting out provided in the CBA, which included the hiring of
FEBTC functions to BOMC, BPI effectively deprived employees, promotion, transfers, and dismissals for just
the union of the membership of employees handling cause and the maintenance of order, discipline and
said functions as well as curtailed the right of those efficiency in its operations.
employees to join the union.
Issue: Whether the act of BPI to outsource the
cashiering, distribution and bookkeeping functions to
BOMC is in conformity with the law and the existing
CBA
PEPSI-COLA PRODUCTS v. Facts: Petitioner is a domestic corporation engaged NO, the Court finds it difficult to attribute any act of
MOLON, ET AL. in the manufacturing, bottling and distribution of soft union busting or ULP on the part of Pepsi
GR No. 175002 drink products. In view of its business, Pepsi operates considering that it retrenched its employees in good
February 18, 2013 plants all over the Philippines, one of which is faith. Pepsi tried to sit-down with its employees to
located in Sto. Niño, Tanauan, Leyte (Tanauan arrive at mutually beneficial criteria which would have
Plant). Respondents, on the other hand, are members been adopted for their intended retrenchment. Further,
of the Leyte Pepsi-Cola Employees Union-Associated the fact that Pepsi’s rightsizing program was
Labor Union (LEPCEU-ALU), a legitimate labor implemented on a company-wide basis dilutes
organization composed of rank-and-file employees respondents’ claim that Pepsi’s retrenchment scheme
in Pepsi's Tanauan Plant, duly registered with the was calculated to stymie its union activities, much less
Department of Labor and Employment (DOLE) diminish its constituency. Therefore, absent any
Regional Office No. 8. perceived threat to LEPCEU-ALU’s existence or a
In 1999, Pepsi adopted a company-wide violation of respondents’ right to self-organization – as
retrenchment program denominated as Corporate demonstrated by the foregoing actuations –Pepsi
Rightsizing Program. To commence with its program, cannot be said to have committed union busting or
it sent a notice of retrenchment to the DOLE as well ULP.
as individual notices to the affected employees [Doctrine]
informing them of their termination from work. Unfair labor practice refers to acts that violate the
Subsequently, Pepsi notified the DOLE of the initial workers' right to organize. The prohibited acts are
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batch of forty-seven (47) workers to be retrenched. related to the workers' right to self-organization and
Among these employees were six (6) elected to the observance of a CBA. Without that element, the
officers and twenty-nine (29) active members of the acts, no matter how unfair, are not unfair labor
LEPCEU-ALU, including herein respondents. They practices. The only exception is Article 248(f) [now
later file notice of strike thereafter DOLE Sec take Article 257(f)].
jurisdiction and issued return to work.
Issue: Whether or not the acts of Pepsi amounted to
union busting or ULP
ROYAL PLANT WORKERS Facts: Under the employ of each Coca-Cola bottling YES, there is a valid management prerogative and
UNION v. COCA COLA plant are bottling operators. In Cebu City, there are the rights of the Union under any labor law were
BOTTLERS 20 bottling operators who work for its Bottling Line not violated. There is no law that requires employers
GR No. 198783 1 while there are 12-14 bottling operators who to provide chairs for bottling operators. The Labor
April 15, 2013 man its Bottling Line 2. All of them are members of Code, specifically Article 132 thereof, only requires
the Union. In 1974, the bottling operators of then employers to provide seats for women. No similar
Bottling Line 2 were provided with chairs upon their requirement is mandated for men or male workers. It
request. In 1988, the bottling operators of then must be stressed that all concerned bottling operators
Bottling Line 1 followed suit and asked to be in this case are men. In the present controversy, it
provided also with chairs. Their request was likewise cannot be denied that Coca-Cola removed the
granted. Sometime in September 2008, the chairs operators’ chairs pursuant to a national directive
provided for the operators were removed pursuant launched to enable the Union to perform their duties
to a national directive of Coke. This directive is in and responsibilities more efficiently. The chairs were
line with the "I Operate, I Maintain, I Clean" not removed indiscriminately. They were carefully
program of Coke for bottling operators, wherein studied with due regard to the welfare of the
every bottling operator is given the responsibility to members of the Union. The removal of the chairs was
keep the machinery and equipment assigned to him compensated by: a) a reduction of the operating hours
clean and safe. The program reinforces the task of of the bottling operators from a two-and-one-half (2
bottling operators to constantly move about in the 1⁄2)-hour rotation period to a one-and-a- half (1 1⁄2)
performance of their duties and responsibilities. hour rotation period; and b) an increase of the break
The Union initiated the grievance machinery of the period from 15 to 30 minutes between rotations.
CBA. Even after exhausting the remedies contained Apparently, the decision to remove the chairs was
in the grievance machinery, the parties were still at done with good intentions as Coca-Cola wanted to
a deadlock with petitioner still insisting on the avoid instances of operators sleeping on the job while
removal of the chairs and respondent still against in the performance of their duties and responsibilities
such measure. Both parties availed of the and because of the fact that the chairs were not
conciliation/mediation proceedings before the necessary considering that the operators constantly
NCMB. Arbitration Committee ruled for Union, CA move about while working. In short, the removal of the
reversed. Union was saying that the removal of the chairs was designed to increase work efficiency.
chairs is not a valid exercise of management Hence, Coca-Cola’s exercise of its management
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prerogative, is a violation of labor law, violation of prerogative was made in good faith without doing
CBA and violation of Art. 100 any harm to the workers’ rights.
Issue: Whether or not the removal of chairs is a [Doctrine]
valid management prerogative Management is free to regulate, according to its own
discretion and judgment, all aspects of employment,
including hiring, work assignments, working methods,
time, place, and manner of work, processes to be
followed, supervision of workers, working regulations,
transfer of employees, work supervision, lay-off of
workers, and discipline, dismissal and recall of
workers. The exercise of management prerogative,
however, is not absolute as it must be exercised in
good faith and with due regard to the rights of labor.
BANKARD v. NLRC Facts: Bankard Employees Union filed before the NO, aside from the bare allegations of the Union,
GR No. 171664 NCMB its first Notice of Strike, alleging commission nothing in the records strongly proves that Bankard
March 6, 2013 of unfair labor practices by petitioner Bankard, Inc., intended its program, the MRP, as a tool to
to wit: 1) job contractualization; 2) drastically and deliberately reduce union
outsourcing/contracting-out jobs; 3) manpower membership. There was no proof that the program
rationalizing program; and 4) discrimination. was meant to encourage the employees to
The Union declared a CBA bargaining deadlock disassociate themselves from the Union or to restrain
and filed its second Notice of Strike, alleging them from joining any union or organization. There
bargaining in bad faith on the part of Bankard. was no showing that it was intentionally implemented
Despite two certification orders issued by the Labor to stunt the growth of the Union or that Bankard
Secretary enjoining them from conducting a strike or discriminated, or in any way singled out the union
lockout and from committing any act that would members who had availed of the retirement package
exacerbate the situation, the Union went on strike. under the MRP.
The Union alleged that contractualization started in True, the program might have affected the number of
Bankard in 1995 in the Records Communications union membership because of the employees’
Management Division, particularly in the mailing voluntary resignation and availment of the package,
unit, which was composed of two (2) employees and but it does not necessarily follow that Bankard indeed
fourteen (14) messengers. They were hired as purposely sought such result. It must be recalled that
contractual workers to perform the functions of the the MRP was implemented as a valid cost-cutting
regular employees who had earlier resigned and measure, well within the ambit of the so-called
availed of the Manpower Rationalization Program management prerogatives. Bankard contracted an
(MRP). According to the Union, there were other independent agency to meet business exigencies. In
departments in Bankard utilizing messengers to the absence of any showing that Bankard was
perform work load considered for regular motivated by ill will, bad faith or malice, or that it was
employees, like the Marketing Department, Voice aimed at interfering with its employees’ right to self-
- 335 -
Authorizational Department, Computer Services organize, it cannot be said to have committed an act
Department, and Records Retention Department. The of unfair labor practice. Bankard merely validly
Union contended that the number of regular exercised its management prerogative. Not shown to
employees had been reduced substantially through have acted maliciously or arbitrarily, no act of ULP
the management scheme of freeze-hiring policy on can be imputed against it.
positions vacated by regular employees on the [Doctrine]
basis of cost-cutting measures and the introduction The prohibited acts considered as ULP relate to the
of a more drastic formula of streamlining its regular workers’ right to self-organization and to the
employees through the MRP. As a result, the number observance of a CBA. It refers to “acts that violate the
of union members was reduced, and the number of workers’ right to organize. Without that element, the
contractual employees, who were never eligible for acts, even if unfair, are not ULP. Thus, an employer
union membership for lack of qualification, may only be held liable for unfair labor practice if it
increased. can be shown that his acts affect in whatever manner
Issue: Whether or not Bankard committed acts the right of his employees to self-organize.
considered as ULP
GOYA v. GOYA EMPLOYEES Facts: Petitioner Goya hired contractual employees NO, having the right of management prerogative is
UNION from Peso Resources Development Corporation to different from its valid exercise. The right to exercise
GR No. 170054 perform temporary and occasional services in its management prerogative is limited by the CBA. The
January 21, 2013 factory in Marikina. For failing to settle amicably engagement of PESO is not in keeping with the intent
with the Voluntary Arbitrator, they submitted for and spirit of the CBA. It must, however, be stressed
resolution the issue on whether Goya is guilty of that the right of management to outsource parts of its
unfair labor acts by engaging the services of PESO operations is not totally eliminated but is merely
under the CBA, laws, and jurisprudence. Union limited by the CBA. Given the foregoing, the
argued that the hiring of contractual employees is in Company’s engagement of PESO for the given
gross violation of the CBA tantamount to unfair purpose is indubitably a violation of the CBA.
labor practice since the work of the contractual Section 4, Article I (on categories of employees) of the
workers were previously assigned to regular CBA between the Company and the Union must be
workers and union members. This according to the read in conjunction with its Section 1, Article III (on
union violates Section 4, Article I of the CBA where it union security). Both are interconnected and must be
would not be possible to anymore hire probationary given full force and effect. Evidently, this case has one
and casual employees. of the restrictions—the presence of specific CBA
The company argued that: 1) Contracting provisions. To reiterate, the CBA is the norm of
arrangements are allowed by law and within Conduct between the parties and compliance
management prerogative, 2) Contracting did not therewith is mandated by the express policy of the
prejudice the union since no single employee was law.
terminated nor were the work hours nor bargaining [Doctrine]
unit were affected, and 3) Section 4 Article I of the The exercise of management prerogative is not
CBA provided for the definition of the categories of unlimited; it is subject to the limitations found in law,
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employees and does not put a limitation on the collective bargaining agreement or the general
company's right to engage the services of job principles of fair play and justice.
contractors.
Issue: Whether or not contracting out of services
from PESO was a valid exercise of management
prerogative
MENDOZA v. OFFICERS OF Facts: Mendoza was a member of the Manila YES, the executive board committed ULP. Union 1’s
MANILA WATER EMPLOYEES Water Employees Union (Union 1). In April 2007, constitution and by-laws clearly state that in cases of
UNION the union, through Cometa (Union secretary) sent a suspension and termination, the member has 3 and 7
GR No. 201595 letter to Mendoza informing him that the union could days respectively to file an appeal to the executive
January 25, 2016 no deduct the increased P200 union fee because he board which will be heard by the general membership
failed to give a check off authorization, and to pay assembly. Here, Mendoza was illegally suspended for
his union dues. In May 2007, Quebral (First VP and the second time, and thereafter unlawfully expelled
Treausurer) informed Borela (President) through a from union 1 due to the executive board’s failure to
letter that Mendoza and several others failed to act on his written appeals. Because of their inaction,
pay the union dues in violation of Sec. 1(g) Art. IX of Mendoza was unceremoniously suspended,
the union’s constitution and by-laws. Thus, the disqualified and deprived of his right to run for the
President referred the charge to the union grievance position of union 1’s Vice President in the election of
committee for investigation. officers, expelled from union 1, and forced to join
After a hearing, the committee recommended that another union, union 2. For these, the executive board
Mendoza be suspended for 30 days which the is guilty of unfair labor practices under Article 249(a)
executive board unanimously approved. Thereafter, and (b) -- that is, violation of Mendoza’s right to self-
a letter was sent to Mendoza informing him of his organization, unlawful discrimination, and illegal
suspension. Mendoza filed a letter stating his termination of his union membership.
intention to appeal to the general membership [Doctrine]
assembly, but the executive board did not act on it. Article 247 of the Labor Code states that the civil
In August 2007, Mendoza was again suspended for aspects of all cases involving unfair labor practices,
failure to pay union dues, which he again appealed, which may include claims for actual, moral, exemplary
but was unheaded. During his suspension, the and other forms of damages, attorney’ss fees and
elections for union officers took place. He filed a other affirmative relief, shall be under the jurisdiction
petition to run was Vice President, but was of the Labor Arbiters.
disqualified for not being a member of good
standing because of his suspension. In October
2007, he was again notified of his failure to pay
union dues, but this time his penalty was expulsion.
(Note that in all 3 suspensions and the expulsion, it
was always after the EB unanimously approved the
recommendation of the grievance committee). Again
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he filed an appeal to the executive board, but it

was unheeded.
Mendoza thereafter joined union 2. Other union 1
members wanted to join union 2, but they were
threatened that if they did so, they would not get
benefits from the new CBA. In union 1’s proposed
CBA, a provision stated that in the event of
retrencement, non-union 1 members shall be
removed first, and that only union 1 members would
receive a bonus. Mendoza filed a complaint with the
LA for unfair labor practice (his illegal termination
from union 1 for non-payment of dues) and for
unlawful interference, coercion, and violation of the
rights of the employees to self-organization because
of the CBA which contained provisions discriminatory
against non- union 2 members.
Issue: Whether or not the executive board
committed ULP
CEPALCO v. CEPALCO Facts: Petitioner CEPALCO and respondent NO, Labor-only contracting is considered as a form
EMPLOYEES LABOR UNION- CEPALCO Employee’s Labor Union-Associated Labor of ULP when the same is devised by the employer
ASSOCIATED UNION Unions-Trade Union Congress of The Philippines to “interfere with, restrain or coerce employees in
GR No. 211015 (TUCP) entered into a Contract for Meter Reading the exercise of their rights to self-organization. The
June 20, 2016 Work where CESCO undertook to perform need to determine whether or not the contracting out
CEPALCO’s meter-reading activities. As a result, of services (or any particular activity or scheme
several employees and union members of CEPALCO devised by the employer for that matter) was
were relieved, assigned and floating positions and intended to defeat the workers’ right to self-
replaced with CESCO workers, prompting organization is impelled by the underlying concept of
respondent to file a complaint for ULP against ULP.
petitioner. Respondent alleged that when CEPALCO
engaged CESCO to perform its meter-reading The Court has ruled that the prohibited acts considered
activities, its intention was to evade its as ULP relate to the workers' right to self-organization
responsibilities under the CBA and labor laws and and to the observance of a CBA. It refers to "acts that
that it would ultimately result in the dissipation of violate the workers' right to organize." Without that
respondent’s membership in CEPALCO. Thus, element, the acts, even if unfair, are not ULP. Thus, an
respondent claimed that CEPALCO’s act of employer may only be held liable for unfair labor
contracting out services, which used to be part of the practice if it can be shown that his acts affect in
functions of the regular union members, is violative whatever manner the right of his employees to self-
of Article 259(c) of the Labor Code. It further organize.
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averred that for engaging in labor-only contracting,

the workers placed by CESCO must be deemed CEPALCO’s contracting arrangements with CESCO did
regular rank-and-file employees of CEPALCO, and
not amount to ULP. This is because respondent was not
that the Contract for Meter Reading Work be able to present any evidence to show that such
declared null and void. arrangements violated CEPALCO’s workers’ right to
Petitioners averred that CESCO is an independent
self- organization, which, as above mentioned,
job contractor and that the contracting out of the
constitutes the core of ULP.
meter-reading services did not interfere with
[Doctrine]
CEPALCO’s regular workers’ right to self-organize,
Labor-only contracting is considered as a form of
denying that none of respondent’s members was put
unfair labor practice (ULP) when the same is devised
on floating status. by the employer to “interfere with, restrain or coerce
employees in the exercise of their rights to self-
Issue: Whether or not CEPALCO’s contracting organization.”
arrangements with CESCO amounted to ULP
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STRIKES, LOCKOUTS, & CONCERTED ACTIONS
Labor Code: Articles 219 (o-s), 278-281, 266

Omnibus Rules, Book V, Rule XXII, as amended by D.O. 40-03, and further amended by D.O. 40-A, D.O. 40-G-03 (2010), and D.O. 40-H-13 (2013)
Case Title + GR Num + Date Facts + Issue Held + Doctrine

Facts: Held:
BUKLURAN NG MANGGAGAWA SA In the year 2001, the rank-and-file employees at the Company Strike, defined
CLOTHMAN KNITTING v CA banded together and formed the petitioner union. In reaction
thereto, the Company gathered the employees and advised A strike is any temporary stoppage of work by the concerted
GR 158158. them not to listen to outsiders. action of employees as a result of an industrial or labor
January 17, 2005. dispute. A labor dispute includes any controversy or matter
J. Callejo, Sr. Meanwhile, another group of rank-and-file employees also concerning terms or conditions of employment or the association
formed their union. or representation of persons in negotiating, fixing, maintaining,
changing or arranging the terms and conditions of employment,
The Company issued a Memo informing its employees that a regardless of whether the disputants stand in the proximate
temporary shutdown in one of its division (Dyeing and Finishing relation of employer and employee.
Division) will be effected for one week. Unable to solve its
financial problems, the Company scheduled to resume the The members and the supporters of the petitioner union, thru
operation until further notice. concerted action, caused a temporary stoppage of work as a
result of an industrial dispute. The blockade of the delivery of
For the reduced dyeing and finishing needs, the Company trucks and the attendance of employees from the other
brought the textiles to its sister company. While the Company’s departments of the Company meant work stoppage. The
service truck was on its way to deliver fabrics in Bulacan, some placards that the picketers caused to be displayed arose from
members and officers of the petitioner Union approached the matters concerning terms or conditions of employment as well as
truck and blocked its way. As a result, the driver of the service the association or representation of persons in negotiating,
truck decided to return to the Company’s compound. Later that fixing, maintaining, changing or arranging the terms and
day, the group staged a picket in front of the Company’s conditions of employment.
compound carrying with them placards and slogans.
Strike is invalid
The Company filed a petition to declare the strike illegal
before the arbitration on the following grounds: In order for a strike to be valid, the following requirements must
be met—
(1) no strike vote was conducted and the cooling-off period was (a) a notice of strike must be filed;
not observed; (b) a strike-vote must be taken; and
(2) no notice of strike was filed; and (c) results of the strike-vote must be reported to the DOLE.
(3) reason for the picket is a non-strikeable issue.
These requirements are mandatory, meaning, non-
The LA declared the strike illegal and the employment status of compliance therewith makes the strike illegal. The evident
the union officers who participated therein as terminated. It intention of the law in requiring the strike notice and strike-vote
found that the continued decline in job orders prompted the report is to reasonably regulate the right to strike, which is
Company to reduce the working day which further led to its essential to the attainment of legitimate policy objectives
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decision to temporarily stop the operation in the said Division. embodied in the law.
The whole company did not cease to operate and that it was
only the workers in the shutdown Division who were affected by
the temporary lay-off. Thus, when the Company conducted a Doctrine: In order for a strike to be valid, the following
picket in front of the company’s premises, the whole business requirements must be met—
operations of the respondent was affected. (a) a notice of strike must be filed;
(b) a strike-vote must be taken; and
ARGUMENT OF THE UNION: They did NOT stage a strike, much (c) results of the strike-vote must be reported to the DOLE.
more an illegal strike. They explain that a strike means work
stoppage. Considering that the Dyeing and Finishing Division These requirements are mandatory, meaning, non-compliance
was shutdown, it could not have caused a work stoppage. The therewith makes the strike illegal. The evident intention of the
union members merely picketed in front of the Company’s law in requiring the strike notice and strike-vote report is to
factory to urge it to open and order the resumption of the reasonably regulate the right to strike, which is essential to the
operations in the said division. attainment of legitimate policy objectives embodied in the law.
Issue/s:
1. Whether there is a strike.
2. Whether the strike is valid.
STEEL CORPORATION v SCP EMPLOYEES Facts: Held:

UNION This case involves two contending union—FUEL-GAS Union and (Note that at this juncture, NAFLU was held to be NOT the SEBA
respondent NAFLU. is already settled. CA is therefore correct not to compel the
GR 169829-30. Company not to bargain with it.)
April 16, 2008.
J. Azcuna FUEL-GAS filed for petition for certification election where
respondent NAFLU intervened and sought to be one of those to The strike is illegal
be voted for. This was denied by the Med-Arbiter.
The strike staged by NAFLU is patently illegal for the following
The consent election for the FUEL-GAS however turned out to be reasons—
a failure because majority did not cast their vote. For this (1) it is a union-recognition-strike which is not sanctioned by
reason, an election protest was filed claiming irregularities in labor laws;
the certification election. This was denied. NAFLU on the other (2) it was undertaken after the dispute had been certified for
hand filed another PCE again which was granted this time. The compulsory arbitration; and
Company and the FUEL-GAS both appealed to the SOLE. (3) it was in violation of the Secretary’s return-to-work order.
NAFLU’s notices of strike were founded on the Company’s

The Undersecretary ordered the conduct of certification election continued refusal to bargain with it. It thus staged the strike to
with FUEL-GAS, NAFLU and No Union as the choices. compel petitioner to recognize it as the collective bargaining
Unsatisfied, the Company and FUEL-GAS appealed before the agent, making it a union-recognition strike. As its legal
CA. During the pendency of the appeal, FUEL-GAS participated designation implies, this kind of strike is calculated to compel
in the election without prejudice to the subsequent decision of the employer to recognize one’s union and not other contending
the CA. NAFLU won the certification election. FUEL- GAS filed groups, as the employees’ bargaining representative to work
yet another election protest. out a collective bargaining agreement despite the striking
union’s doubtful majority status to merit voluntary recognition
By this time, the CA came up with a decision ordering the and lack of formal certification as the exclusive representative
conduct of certification election excluding now the NAFLU. in the bargaining unit.
Aggrieved by this decision, NAFLU appealed to the DOLE and
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at the same time, filed a manifestation before the CA that since Extent of Secretary’s power (this is essential to determine the
they already won the certification election, their win should be validity of termination of those who participated in the illegal
considered as a bar for another certification election. CA strike)
denied this.
When the Secretary exercises these powers, he is granted
DOLE on the other hand, resolving the appeal, declared NAFLU “great breadth of discretion” to find a solution to a labor
as the SEBA. A motion for reconsideration was filed by FUEL- dispute. The most obvious of these powers is the automatic
GAS and the Company. Thereafter, NAFLU sent CBA proposals enjoining of an impending strike or lockout or its lifting if one
to the Company. The latter hold in abeyance any action to the has already taken place.
proposed CBA in view of the pending MR.
The moment the Secretary of Labor assumes jurisdiction over a
NAFLU dissatisfied with the abeyance filed a Notice to Strike on labor dispute in an industry indispensable to national interest,
the ground of ULP for refusal to bargain. The dispute was such assumption shall have the effect of automatically enjoining
certified by the NLRC for compulsory arbitration. the intended or impending strike. It was NOT even necessary
for the Secretary of Labor to issue another order directing a
The NLRC ruled that the Company has to obligation to return to work. The mere issuance of an assumption order by the
recognize NAFLU as SEBA. Thus, complaint for ULP will not lie. Secretary of Labor automatically carries with it a return-to-
work order, even if the directive to return to work is not
expressly stated in the assumption order.
NAFLU filed a MR and another notice of strike alleging refusal
to bargain and union busting. This was dismissed and NAFLU
was enjoined from holding a strike. A third Notice of Strike A return-to-work order imposes a duty that must be discharged
however was again filed and without awaiting for the more than it confers a right that may be waived. While the
resolution, the Union staged a strike. The Labor Secretary workers may choose not to obey, they do so at the risk of
certified the dispute to the NLRC and directed the employees to severing their relationship with their employer. Returning to
return to work. NAFLU did not heed the order of the Secretary work in this situation is not a matter of option or voluntariness
for which reason they were dismissed. but of obligation. The worker must return to his job together
with his co-workers so that the operations of the company can
be resumed and it can continue serving the public and
Now acting on the certified case, the NLRC ordered the promoting its interest.
reinstatement of the employees who were dismissed in The Union therefore cannot, for instance, ignore return-to-work
connection with the strike. orders, citing unfair labor practices on the part of the company,
to justify their action.
The CA partially granted the appeal. It affirmed the
reinstatement of the union officers and upholding the earlier NAFLU, in the instant case, after the assumption of jurisdiction
decision that NAFLU is NOT the duly-elected SEBA. As a result, and certification of the dispute to the NLRC for compulsory
it cannot compel the Company to collectively bargain with arbitration, filed notices of strike and staged the strike
NAFLU. obviously contrary to the provisions of labor laws. Worse, it
filed not one but several notices of strike which resulted in two
ARGUMENT OF THE COMPANY: certified cases which were earlier consolidated.
Its refusal to bargain was based on the CA’s earlier decision to Termination of those engaged in Illegal strike
conduct another certification election. NAFLU never denied that
its purpose for holding the strike was to force it to recognize the The law makes a distinction between union members and union
latter over the other union. Since the strike is a union- officers.
recognition-strike, it is illegal.
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As a general rule, a worker merely participating in an illegal

The Labor Code expressly prohibits the declaration of a strike strike may not be terminated from employment. The exception
over an issue that is pending arbitration between the parties. is when he commits illegal acts during a strike that he may be
Since the labor dispute in the first certified case was still declared to have lost employment status.
pending compulsory arbitration at the time of the strike.
With respect to the union officers, for knowingly participating in
Petitioner also contends that the union officers who participated an illegal strike or participating in the commission of illegal acts
in the illegal strike are all deemed to have lost their during a strike, the law provides that a union officer may be
employment. terminated from employment. The law grants the employer the
It also maintains that it was an error on the part of CA to affirm option of declaring a union officer who participated in an
NLRC’s decision ordering the reinstatement of the employees illegal strike as having lost his employment. It possesses the right
which were dismissed in connection with the strike. The and prerogative to terminate the union officers from service.
termination of the employees was due to their refusal to comply
with the return-to-work order issued by the Labor Secretary, Rationale of the Strike
NOT to their alleged participation in an illegal strike.
The strike is a legitimate weapon in the human struggle for a
Issue/s: decent existence. It is considered as the most effective weapon
1. Whether the strike is illegal. in protecting the rights of the employees to improve the terms
2. If so, should the participating union officers or and conditions of their employment. But to be valid, a strike
members therein be terminated? must be pursued within legal bounds. The right to strike as a
means for the attainment of social justice is never meant to
oppress or destroy the employer. The law provides limits for its
exercise.
Doctrine:
As a general rule, a worker merely participating in an illegal
strike may not be terminated from employment. The exception
is when he commits illegal acts during a strike that he may be
declared to have lost employment status.
With respect to the union officers, for knowingly participating in

an illegal strike or participating in the commission of illegal acts
during a strike, the law provides that a union officer may be
terminated from employment. The law grants the employer the
option of declaring a union officer who participated in an
illegal strike as having lost his employment. It possesses the right
and prerogative to terminate the union officers from service.
BIFLEX PHILS. LABOR UNION v FILFLEX Facts: Held:

INDUSTRIAL & MANUFACTURING CORP The labor sector staged a general strike known as “welga ng No, employees who have no labor dispute with their employer
bayan” to protest the accelerating prices of oil. On even date, but who, on a day they are scheduled to work, refuse to work
GR 155679. the two Petitioner-Unions led by their union officers staged a and instead join a welga ng bayan commit an illegal work
December 19, 2006. work stoppage which lasted for several days prompting the stoppage.
J. Carpio-Morales Company to file a petition to declare the work stoppage illegal
for failure to comply with procedural requirements.
- 343 -
The Company resumed their operations. Petitioner- Unions There being no showing that the Unions notified the Company of
claiming that they were illegally locked out by the Company their intention to join the welga ng bayan, their work stoppage is
assert that aside from the fact that the welga ng bayan beyond legal protection.
rendered it difficult to get a ride and the apprehension that
violence would erupt between those participating in the welga If there was illegal lockout, why, indeed, did not petitioners file
and the authorities, the Company workers were prevented from a protest with the management or a complaint therefor against
reporting for work. the Company? As the LA observed, “the inaction of the Union
betrays the weakness of their contention for normally a locked-out
Petitioner-Unions assert that respondents were “slighted” by the union will immediately bring management before the bar of
workers’ no-show, and as a punishment, the workers as well as justice.”
petitioners were barred from entering the company premises. Even assuming that they complied with the legal procedures, the
same would be illegal for by blocking the free ingress to and
ARGUMENT OF THE COMPANY: egress from the company premises. Under the Labor Code, no
person engaged in picketing shall xxx obstruct the free ingress
to or egress from the employer’s premises for lawful purposes,
Maintain that the work stoppage was illegal since the following or obstruct public thoroughfares.
requirements for the staging of a valid strike were not complied
with: (1) filing of notice of strike; (2) securing a strike vote, and
(3) submission of a report of the strike vote to the DOLE. The legality of a strike is determined not only by compliance
with its legal formalities but also by the means by which it is
carried out.
The LA ruled in favor of the Company which thereupon
terminated the employment of the Petitioner-Unions. The NLRC
reversed the same holding that there was no strike to speak of Doctrine:
as no labor or industrial dispute existed between the parties. Even assuming that they complied with the legal procedures, the
same would be illegal for by blocking the free ingress to and
The appellate court reinstated the order of the LA. It discredited egress from the company premises. Under the Labor Code, no
the Unions’ claim of having been illegally locked out, given their person engaged in picketing shall xxx obstruct the free ingress
failure to even file a letter of protest or complaint with the to or egress from the employer’s premises for lawful purposes,
management, and their failure to comply with the legal or obstruct public thoroughfares.
requirements of a valid strike.
The legality of a strike is determined not only by compliance
with its legal formalities but also by the means by which it is
Issue/s: carried out.
Whether the strike is valid.
BASCON v CA Facts: Held:

GR 144899.
February 5, 2004.
J. Quisumbing The petitioners in the present case are regular employees of the No, the law, obviously solicitous of the welfare of the common
hospital and members of the local union. worker, requires, before termination may be considered, that
The instant controversy arose from the intra-union dispute an ordinary union member must have knowingly participated in
between the local Union and its mother union. The local chapter the commission of illegal acts during a strike.
asked the Hospital to renew their CBA which was about to While a union officer can be terminated for mere participation
expire. This was opposed by the federation. Mindful of the in an illegal strike, an ordinary striking employee, like
apparent intra-union dispute, the Hospital decided to defer the petitioners herein, must have participated in the commission of
CBA negotiations until there was a determination as to which of illegal acts during the strike. There must be proof that they
- 344 -
said unions had the right to negotiate a new CBA. committed illegal acts during the strike. But proof beyond
Believing that their Union was the SEBA, the members and reasonable doubt is not required. Substantial evidence, which
agents of the local union staged a series of mass actions inside may justify the imposition of the penalty of dismissal, may
the Hospital. They marched around the hospital putting up suffice.
streamers, placards and posters. In this case, the CA found that petitioners’ actual participation in
The DOLE issued two (2) certifications stating that the local union the illegal strike was limited to wearing armbands and putting
was not a registered labor organization. This finding however up placards. There was no finding that the armbands or the
did not deter them from filing a notice of strike. Said notice was placards contained offensive words or symbols. Thus, neither
however disregarded by the NCMB for want of legal such wearing of armbands nor said putting up of placards can
personality of the union. be construed as an illegal act. In fact, per se, they are within
Meanwhile, the management received reports that petitioners the mantle of constitutional protection under freedom of speech.
participated in the local union’s mass actions. The Union Evidence on record shows that various illegal acts were
members including petitioners, explained that wearing committed by unidentified union members in the course of the
armbands and putting up placards was their answer to the protracted mass action. But petitioner cannot be made liable to
management’s illegal refusal to negotiate with them. This the same for they were already terminated during the illegal
resulted to the petitioner’s termination due to gross act complained of transpired.
insubordination.
Another mass action was staged by the Union. The means of
ingress to and egress from the hospital were blocked.
Employees and patients, including emergency cases, were Doctrine:
harassed.
CASE PROPER: While a union officer can be terminated for mere participation
Petitioners filed a case for illegal dismissal. They denied having in an illegal strike, an ordinary striking employee, like
participated in said mass actions or having received the petitioners herein, must have participated in the commission of
notices (1) enjoining them from wearing armbands and putting illegal acts during the strike. There must be proof that they
up placards. They admit, however, to wearing armbands for committed illegal acts during the strike. But proof beyond
union identity while nursing patients as per instruction of their reasonable doubt is not required. Substantial evidence, which
union leaders. may justify the imposition of the penalty of dismissal, may
The LA held that petitioners were justly dismissed because they suffice.
actually participated in the illegal mass action. This was
reversed by the NLRC holding that—first, wearing of armbands
while nursing patients, is a constitutional right, which cannot be
curtailed if peacefully carried out. Second, it ruled that the
placards complained of by the Hospital did not contain indecent
or libelous remarks.
The appellate court stressed that petitioners’ gross
insubordination constituted unlawful acts undertaken in
conjunction with an illegal mass concerted action akin to an
illegal strike.
Issue/s:
Whether petitioners were validly terminated for allegedly
participating in an illegal strike.
- 345 -
TOYOTA MOTOR PHILS. CORP. Facts: Held:

WORKERS ASSOCIATION v TOYOTA The Med-Arbiter certified the Union as the SEBA of all the Nature of the 1st strike
MOTOR PHILS. Company’s rank-and-file employees. The Company challenged
the same in appeal before the Secretary. The fact that the conventional term ‘strike’ was not used by the
GRS 158786 & 158789. striking employees to describe their common course of action is
October 19, 2007. inconsequential, since the substance of the situation and not its
J. Velasco, Jr. In the meantime, the Union submitted its CBA proposals to the
Company, the latter however refused to negotiate in view of its appearance, will be deemed controlling.
pending appeal. Consequently, the Union filed their first notice
of strike (1st strike) based on the Company’s refusal to bargain. The term “strike” has been elucidated to encompass not only
The Union officers and members failed to render the required concerted work stoppages, but also slowdowns, mass leaves,
overtime work, and instead marched to and staged a picket in sitdowns, attempts to damage, destroy, or sabotage plant
front of the BLR office in Intramuros, Manila. The Union, in a equipment and facilities, and similar activities.
letter of the same date, also requested that its members be
allowed to be absent to attend the hearing and instead work Thus, the first protest actions undertaken by the Union officials
on their next scheduled rest day. This request however was and members are not valid and proper exercises of their right
denied by the Company. to assemble and ask government for redress of their complaints,
but are illegal strikes in breach of the Labor Code.
Despite denial of the Union’s request, more than 200 employees
staged mass actions in front of BLR and DOLE offices, to protest Shrouded as demonstrations, they were in reality temporary
the partisan and anti-union stance of the Company. Due to the stoppages of work perpetrated through the concerted action of
deliberate absence of a considerable number of employees, the employees who deliberately failed to report for work on
the Company experienced acute lack of manpower in its the convenient excuse that they will hold a rally at the BLR and
manufacturing and production lines, and was unable to meet its DOLE offices in Intramuros, Manila The purported reason for
production goals resulting in huge losses. For this reason, the these protest actions was to safeguard their rights against any
Company required them to submit their explanation and why abuse which the Med-Arbiter may commit against their cause.
they should not be terminated. However, the Union failed to advance convincing proof that the
Med-Arbiter was biased against them.
In response thereto, the Union answered that their refusal to
work on their scheduled work time for two consecutive days was 2nd strike, valid at the onset, but became invalid
simply an exercise of their constitutional right to peaceably
assemble and to petition the government for redress of
grievances. A legal strike, even though compliant with the legal
The union filed another Notice of strike (2nd strike) for alleged requirement, will be illegal when unlawful means employed.
union busting amounting to ULP.
Here, Union barricaded the gates of the Company’s plants and
Meanwhile, the Company proceeded with the termination of blocked the free ingress to and egress from the company
those who attended the mass actions. In reaction to the dismissal premises. Other employees, customers, and other people having
of its union members and officers, the Union went on strike. The business with the company were intimidated and were refused
Union intensified its strike by barricading the gates of the entry to the plants.
Company’s plants. The strikers prevented workers who reported
for work from entering the plants. 3rd strike in violation of the Secretary’s order
The Company took photographs and video footages of those Once the DOLE Secretary assumes jurisdiction over the labor
who participated in the strike. dispute and certifies the case for compulsory arbitration with
the NLRC, the parties have to revert to the status quo ante (the
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CASE PROPER: state of things as it was before).

The Company filed a petition to declare the strike illegal with
the NLRC. The Secretary assumed jurisdiction over the labor The argument of the Union that the third rally could not be
dispute and issued an Order certifying the labor dispute to the considered strikes, as the participants were the dismissed
NLRC. It directed all striking workers to return to work and employees who were on payroll reinstatement, and hence, there
ordered the Company to accept the returning employees under is no work stoppage—is untenable.
the same terms and conditions obtaining prior to the strike or at
its option, put them under payroll reinstatement.
It is explicit from this directive that the Union and its members
shall refrain from engaging in any activity that might
Despite the issuance of the DOLE Secretary’s certification exacerbate the tense labor situation in the Company, which
Order, several payroll-reinstated members of the Union staged certainly includes concerted actions. This was not heeded by the
a protest rally (3rd strike) bearing placards and streamers in Union and the individual respondents who staged illegal
defiance of the said Order. concerted actions in contravention of the Order of the DOLE
Secretary that no acts should be undertaken by them to
ARGUMENT OF THE UNION: aggravate the “already deteriorated situation.”
Contends that the first protests or rallies conducted are not Rule on vicarious liability does NOT apply in termination of union
within the ambit of strikes as defined in the Labor Code, since members
they were legitimate exercises of their right to peaceably
assemble and petition the government for redress of The rule on vicarious liability of a union member was
grievances. abandoned and it is only when a striking worker “knowingly
participates in the commission of illegal acts during a strike” that
Issue/s: he will be penalized with dismissal.
Whether the mass actions committed by the Union on different
occasions are illegal strikes. – YES. No precise meaning was given to the phrase “illegal acts.” It
may encompass a number of acts that violate existing labor or
criminal laws, such as the following—
(1) 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;
(2) Commission of crimes and other unlawful acts in carrying
out the strike; and
(3) Violation of any order, prohibition, or injunction issued by
the DOLE Secretary or NLRC in connection with the assumption
of jurisdiction/certification Order.
This enumeration is NOT exclusive and it may cover other

breaches of existing laws.
When there is an illegal strike
(1) Contrary to a specific prohibition of law;

(2) Violates a specific requirement of law;
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(3) When it is declared for unlawful purpose;

(4) When it employed unlawful means in the pursuit of its
objective;
(5) Declared in violation of an injunction; or
(6) Contrary to an existing agreement.
Doctrine:
Once the DOLE Secretary assumes jurisdiction over the labor
dispute and certifies the case for compulsory arbitration with
the NLRC, the parties have to revert to the status quo ante (the
state of things as it was before).
NUWHRAIN DUSIT HOTEL NIKKO Facts: Held:

CHAPTER v CA The Union filed a Notice to Strike on December 20, 2001, on The settled rule is that in the assumption of jurisdiction cases, the
the ground of bargaining deadlock. The conciliation proceeding Secretary should impose actual reinstatement. The payroll
GR 163942. being unsuccessful, a strike vote was conducted by the Union on reinstatement is a departure from the rule, and special
November 11, 2008. January 14, 2002, on which it was decided that the Union circumstances which make actual reinstatement impracticable
J. Velasco, Jr. would wage a strike. must be shown.
Soon thereafter, the Union held a general assembly at its office It is obviously impracticable for the Hotel to actually reinstate
located in the Hotel’s basement, where some members sported the employees who shaved their heads or cropped their hair
closely cropped hair or cleanly shaven heads—violative of because this was exactly the reason they were prevented from
Hotel’s grooming policy. The next day, or on January 18, 2002, working in the first place. Further, as with most labor disputes
more male Union members came to work sporting the same hair which have resulted in strikes, there is mutual antagonism,
style. The Hotel prevented these workers from entering the enmity, and animosity between the union and the management.
premises due to the said violation. Payroll reinstatement, most especially in this case, would have
been the only avenue where further incidents and damages
In view of the Hotel’s action, the Union staged a picket outside could be avoided.
the Hotel premises. Later, other workers were also prevented
from entering the Hotel causing them to join the picket. For this Strike is illegal—both in the conduct and requirements
reason the Hotel experienced a severe lack of manpower which
forced them to temporarily cease operations in three
restaurants. The Union failed to observe the mandatory 30day cooling-off
After requiring the Union to submit their explanation, the Hotel period and the seven-day strike ban before it conducted the
proceeded to terminate some of the Union officers and strike on January 18, 2002.
members. Following this, the Union staged another strike where
the Union officials and members unlawfully blocked the ingress The 30-day cooling-off period should have been until January
and egress of the Hotel premises. 19, 2002. On top of that, the strike vote was held on January
14, 2002 and was submitted to the NCMB only on January 18,
CASE PROPER: 2002; therefore, the 7-day strike ban should have prevented
them from holding a strike until January 25, 2002. The
concerted action committed by the Union on January 18, 2002
The Secretary assumed jurisdiction over the labor dispute and which resulted in the disruption of the Hotel’s operations clearly
certified the case to the NLRC for compulsory arbitration. violated the above-stated mandatory periods.
Pursuant to the Secretary’s Order, the Hotel, issued a
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Memorandum directing some of the employees to return to Moreover, the Union committed illegal acts as the officers and
work, while advising others not to do so, as they were placed members formed human barricades and obstructed the
under payroll reinstatement. driveway of the Hotel. There is no merit in the Union’s argument
that it was not its members but the Hotel’s security guards and
Meanwhile, after due proceedings, the NLRC held that the the police officers who blocked the driveway, as it can be seen
January 18 concerted action was an illegal strike in which that the guards and/or police officers were just trying to secure
illegal acts were committed by the Union; and that the strike the entrance to the Hotel.
violated the “No Strike, No Lockout” provision of the CBA. The
NLRC explained that the strike which occurred on January 18 The Union is bargaining in bad faith
was illegal because it failed to comply with the mandatory 30-
day cooling-off period and the seven-day strike ban. The Rule prohibits the commission of any act which will disrupt
or impede the early settlement of the labor disputes that are
ARGUMENT OF THE UNION: under conciliation.
According to the Union, there is no legal basis for allowing Since the bargaining deadlock is being conciliated by the
payroll reinstatement in lieu of actual or physical reinstatement. NCMB, the Union’s action to have their officers and members’
heads shaved was manifestly calculated to antagonize and
embarrass the Hotel management and in doing so effectively
Issue/s: disrupted the operations of the Hotel and violated their duty to
1. Whether the Union has the authority to allow payroll bargain collectively in good faith.
reinstatement in lieu of actual or physical reinstatement.
2. Whether the strike is valid.
Effect of illegal strike to the Union officers and members
The Union officers may be dismissed but there is a room for

leniency with respect to the Union members.
Union members who participated in an illegal strike but were

not identified to have committed illegal acts are entitled to be
reinstated to their former positions but WITHOUT backwages.
Doctrine:
The settled rule is that in the assumption of jurisdiction cases, the
Secretary should impose actual reinstatement. The payroll
reinstatement is a departure from the rule, and special
circumstances which make actual reinstatement impracticable
must be shown.
SORIANO AVIATION v EMPLOYEES Facts: Held:

ASSOCIATION OF A. SORIANO The Company is engaged in providing transportation of guests As regards the first strike
AVIATION to and from Amanpulo and El Nido resorts in Palawan. It has a
CBA with the Union containing a “No-Strike, No-Lock-out” Having been grounded on a non-strikeable issue and without
GR 166879. clause.
August 14, 2009. complying with the procedural requirements, then the same is a
J. Carpio-Morales violation of the “No Strike-No Lockout Policy” in the existing
During the legal holiday which also happen to be the peak CBA.
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season for the Company, some members of the Union refused to

render overtime work. The Company treated the refusal as a Here, the first strike or the mechanics’ refusal to work on three
concerted action which is a violation of the No-Strike, No-Lock- (3) consecutive holidays was prompted by their disagreement
out” clause in the CBA. It thus meted the workers a 30- day with the management-imposed new work schedule.
suspension. As regards the second strike
The Company thereafter filed a complaint for illegal strike As a “No Strike-No Lockout” provision in the Collective
which was later dismissed without prejudice to its refiling should Bargaining Agreement (CBA) is a valid stipulation but may be
settlement be unavailing. The settlement however became futile, invoked only by employer when the strike is economic in nature
thus, the Union filed a Notice of Strike attributing to the or one which is conducted to force wage or other concessions
Company the following—(1) union busting; and (2) illegal from the employer that are not mandated to be granted by the
dismissal of union officers among others. The Union eventually law. It would be inapplicable to prevent a strike which is
went on strike. grounded on unfair labor practice.
Meanwhile, pursuant to its reservation, the Company filed a In the present case, the Union believed in good faith that
Motion to Re-Open the Case. petitioner committed unfair labor practice when it went on strike
on account of the 30day suspension meted to the striking
The LA ruled in favor of the Company and declared that the mechanics, dismissal of a union officer and perceived union-
newly implemented workshift schedule was a valid exercise of busting, among others.
management prerogative and the refusal of herein individual
respondents to work on three consecutive holidays was a form The second strike became invalid
of protest by the Union, hence, deemed a concerted action. The
LA also noted that the Union failed to comply with the Be that as it may, the Court holds that the second strike became
procedural requirements, hence, the strike was considered invalid due to the commission of illegal action in its course. Even
illegal. if the purpose of a strike is valid, the strike may still be held
illegal where the means employed are illegal.
Eight months into the “second strike” the Company filed a
complaint against the Union praying for the declaration as The Union members’ repeated name-calling, harassment and
illegal of the strike on account of their alleged pervasive and threats of bodily harm directed against company officers and
widespread use of force and violence and for the loss of their non-striking employees and, more significantly, the putting up of
employment. placards, banners and streamers with vulgar statements
imputing criminal negligence to the company, which put to doubt
NOTE: The second strike was in duration of eight months because reliability of its operations, come within the purview of illegal
it was staged in a sporadic or non-continuous manner. acts.
Continuous violence not required
The LA declared again the second strike illegal taking judicial
notice of the earlier decision where the Union went on the “first That the alleged acts of violence were committed in nine non-
strike” on a non-strikeable issue ─ the questioned change of consecutive days during the almost eight months that the strike
work schedule, it violated the “No Strike, No-Lockout” clause in was on-going does not render the violence less pervasive or
the CBA and, in any event, the Union failed to comply with the widespread to be excusable. Nowhere in the Labor Code which
requirements for a valid strike. It also held that the Union requires that violence must be continuous or that it should be for
deliberately resorted to the use of violent and unlawful acts in the entire duration of the strike.
the course of the “second strike,” hence, the individual
respondents were deemed to have lost their employment. The NOTE: While the strike is the most preeminent economic weapon
NLRC affirmed the same. of workers to force management to agree to an equitable sharing
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of the joint product of labor and capital, it exerts some

The appellate court reversed noting that almost eight months disquieting effects not only on the relationship between labor and
had already elapsed from the commencement of the strike and, management, but also on the general peace and progress of
in the interim, the alleged acts of violence were committed only society and economic well-being of the State.
during nine non-consecutive days.
Doctrine:
Issue/s: The Union members’ repeated name-calling, harassment and
Whether the strike staged by the Union is illegal due to the threats of bodily harm directed against company officers and
alleged commission of illegal acts and violation of the “No non-striking employees and, more significantly, the putting up of
Strike-No Lockout” clause of the CBA. placards, banners and streamers with vulgar statements
imputing criminal negligence to the company, which put to doubt
reliability of its operations, come within the purview of illegal
acts.
RAMIREZ v POLYSON INDUSTRIES Facts: Held:

The Company here is engaged in plastic manufacturing. The There is a strike on installment plan
GR 207898. Union asked for it to be voluntarily recognized but the
October 19, 2016. Company refused and opted for certification election. Following A “strike on the installment plan” is a willful reduction in the rate
J. Peralta such refusal, the Union warned that it would show its force. of work by concerted action of workers for the purpose of
restricting the output of the employer, in relation to a labor
The Company received orders from its client, and hence, dispute; as an activity by which workers, without a complete
required its employees to render overtime work. Five (5) of the stoppage of work, retard production or their performance of
employees manifested their desire to render overtime, but three duties and functions to compel management to grant their
(3) of them did not do so. This resulted to the cancellation of the demands.
order. When the management asked the workers, two (2) of the
employees stated that they were pressured and threatened by Such slowdown is generally condemned as inherently illicit and
their Union officers. unjustifiable, because while the employees “continue to work
and remain at their positions and accept the wages paid to them,”
After evaluation, the management informed complainants that it they at the same time “select what part of their allotted tasks
has decided to terminate their employment on the ground that they care to perform of their own volition or refuse openly or
they instigated an illegal concerted activity resulting in losses to secretly, to the employer’s damage, to do other work”; in other
the company. words, they “work on their own terms.”
For their part, complainant contend that their termination is not Essence of this kind of strike
because they induced or threatened their co- employees not to
render overtime work but because they established a union In this scheme, workers do not quit their work but simply reduce
which sought to become the exclusive bargaining agent of the the rate of work in order to restrict the output or delay the
rank-and-file employees. production of the employer. It has been held that while a
cessation of work by the concerted action of a large number of
ARGUMENT OF THE COMPLAINANT: employees may more easily accomplish the object of the work
stoppage than if it is by one person, there is, in fact no
fundamental difference in the principle involved as far as the
They are not guilty of “illegal concerted activity” as they claim number of persons involved is concerned, and thus, if the act is
that this term contemplates a “careful planning of a considerable the same, and the purpose to be accomplished is the same,
number of participants to insure that the desired result is attained.” there is a strike, whether one or more than one have ceased to
- 351 -
Nothing in the law requires that a slowdown be carefully work.

planned and that it be participated in by a large number of Fixed number of employees not required to constitute work
workers. stoppage
Issue/s: It is NOT necessary that any fixed number of employees should

Whether the complainant is guilty of illegal concerted activity. – quit their work in order to constitute the stoppage a strike, and
YES. the number of persons necessary depends in each case on the
peculiar facts in the case and no definite rule can be laid down.
In the instant case, complainants engaged in slowdown when
they induced two of their coworkers to quit their scheduled
overtime work and they accomplished their purpose when the
slowdown resulted in the delay and restriction in the output.
Doctrine:
A “strike on the installment plan” is a willful reduction in the rate
of work by concerted action of workers for the purpose of
restricting the output of the employer, in relation to a labor
dispute; as an activity by which workers, without a complete
stoppage of work, retard production or their performance of
duties and functions to compel management to grant their
demands.
CAPITOL MEDICAL CENTER v NLRC Facts: Held:
After having been directed by the Court to negotiate a CBA A union intending to stage a strike is MANDATED to notify the
GR 147080. with the Union, the latter requested for a meeting to discuss NCMB of the meeting for the conduct of strike vote, at least
April 26, 2005. matters pertaining to a negotiation for a CBA with the Hospital. twenty-four (24) hours prior to such meeting. Unless the NCMB is
J. Callejo, Sr. The management however rejected the proposed meeting notified of the date, place and time of the meeting of the union
alleging that the Union was not a legitimate one. Thus, the members for the conduct of a strike vote, the NCMB would be
Hospital filed a petition for the Union’s cancellation of unable to supervise the holding of the same, if and when it
registration. decides to exercise its power of supervision.
Instead of filing a motion with the SOLE for the enforcement of The following are the notices required by the Labor Code and
the resolutions affirmed by the Court, the Union filed a Notice to the Implementing Rules, which include the 24-hour prior notice to
Strike on the ground of refusal to bargain. the NCMB.
The Hospital filed a letter with the NCMB requesting that the (1) A notice of strike, with the required contents, should be filed
notice of strike be dismissed— the Union had apparently failed with the DOLE, specifically the Regional Branch of the NCMB,
to furnish the Regional Branch of the NCMB with a copy of a copy furnished the employer of the union;
notice of the meeting where the strike vote was conducted. (2) A cooling-off period must be observed between the filing
of notice and the actual execution of the strike thirty (30) days
The Union to the NCMB the Minutes of the alleged strike vote in case of bargaining deadlock and fifteen (15) days in case of
purportedly held at the parking lot in front of the Hospital’s unfair labor practice. However, in the case of union busting
premises. It appears that 178 out of the 300 union members where the union’s existence is threatened, the cooling-off period
participated therein. need not be observed;
(3) Before a strike is actually commenced, a strike vote should be
taken by secret balloting, with a 24-hour prior notice to NCMB.
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The Union went on strike. For its part, the Hospital filed a The decision to declare a strike requires the secret-ballot
petition with the NLRC to declare the strike illegal. To support approval of majority of the total union membership in the
their claim, it attested the affidavits of the following witnesses— bargaining unit concerned.
(4) The result of the strike vote should be reported to the
(1) The overseer of the parking lot across the Hospital where NCMB at least seven (7) days before the intended strike or
the alleged voting strike was held; lockout, subject to the cooling-off period.
(2) The security personnel who likewise attested to the fact that
no secret balloting took place at the said parking lot; and In this case, the Union failed to comply with the 24-hour prior
(3) The 17 employees who declared that they were not notice requirement to the NCMB before it conducted the
members of any union, and yet were asked to sign documents alleged strike vote meeting. As a result, the petitioner
purporting to be a strike vote attendance and unnumbered complained that no strike vote meeting ever took place and
strike vote ballots. averred that the strike staged by the respondent union was
illegal.
In the meantime, the petition for the cancellation of union
registration was denied. In a parallel development, the LA Majority Vote required to stage a strike
declared the strike illegal after making a finding that no voting
had taken place. No notice of such voting was furnished to the Note that under the Labor Code, no labor organization shall
NCMB at least twenty-four (24) hours prior to the intended declare a strike unless supported by a majority vote of the
holding of the strike vote. It likewise gave credence to the members of the union obtained by secret ballot in a meeting
affidavits executed by the witnesses. called for that purpose. The requirement is mandatory and the
failure of a union to comply therewith renders the strike illegal.
This was reversed by the NLRC and affirmed by the CA. the The union is thus mandated to allege and prove compliance with
NLRC explained that the Union is NOT mandated to furnish the the requirements of the law.
NCMB with such notice before the strike vote was conducted.
The Union failed to prove the existence of a parking lot in front
ARGUMENT OF THE HOSPITAL: of the hospital other than the parking lot across from it. Indeed,
the affidavits executed by the Hospital’s witnesses was not
rebutted by the Union.
The use of the word “shall” in the rules, the Hospital avers,
indubitably indicates the mandatory nature of the respondent
Union’s duty to submit the said notice of strike vote. NOTE: The purpose of the strike vote is to ensure that the
decision to strike broadly rests with the majority of the union
members in general and not with a mere minority, and at the
Issue/s: same time, discourage wildcat strikes, union bossism and even
Whether the submission of notice to strike vote is merely corruption.
directory and NOT mandatory. A strike vote report submitted to the NCMB at least seven days
prior to the intended date of strike ensures that a strike vote
was, indeed, taken. In the event that the report is false, the
seven-day period affords the members an opportunity to take
the appropriate remedy before it is too late.
The 15 to 30-day cooling-off period is designed to afford the

parties the opportunity to amicably resolve the dispute with the
assistance of the NCMB conciliator/mediator, while the seven-
day strike ban is intended to give the DOLE an opportunity to
verify whether the projected strike really carries the imprimatur
- 353 -
of the majority of the union members.
The requirement of giving notice of the conduct of a strike vote

to the NCMB at least 24 hours before the meeting for the said
purpose is designed to—
(a) inform the NCMB of the intent of the union to conduct a

strike vote;
(b) give the NCMB ample time to decide on whether or not
there is a need to supervise the conduct of the strike vote to
prevent any acts of violence and/or irregularities attendant
thereto; and
(c) should the NCMB decide on its own initiative or upon the
request of an interested party including the employer, to
supervise the strike vote, to give it ample time to prepare for
the deployment of the requisite personnel, including peace
officers if need be.
Unless and until the NCMB is notified at least 24 hours of the

union’s decision to conduct a strike vote, and the date, place,
and time thereof, the NCMB cannot determine for itself whether
to supervise a strike vote meeting or not and insure its peaceful
and regular conduct. The failure of a union to comply with the
requirement of the giving of notice to the NCMB at least 24
hours prior to the holding of a strike vote meeting will render
the subsequent strike staged by the union illegal.
Doctrine:
A union intending to stage a strike is MANDATED to notify the
NCMB of the meeting for the conduct of strike vote, at least
twenty-four (24) hours prior to such meeting. Unless the NCMB is
notified of the date, place and time of the meeting of the union
members for the conduct of a strike vote, the NCMB would be
unable to supervise the holding of the same, if and when it
decides to exercise its power of supervision.
TRANS-ASIA SHIPPING LINES- Facts: Held:

UNLICENSED CREWS EMPLOYEES UNION Two unions filed a separate notices of strike against the Case law recognizes the employer’s right to transfer or assign
v CA Company on the ground of ULP. Acting thereon and to avert employees from one area of operation to another. This right
any work stoppage, the Secretary intervened and issued an however, is not absolute but subject to limitations imposed by
GR 145428. Order certifying the labor dispute to the NLRC for compulsory law. Article 263 (g) of the Labor Code constitutes one such
July 7, 2004. arbitration thereby enjoining any strike or lock-out. limitation provided by law.
J. Callejo, Sr.
Despite the aforesaid order, the petitioners went on strike When a labor dispute has in fact occurred and a general
paralyzing the Company’s operations. The Secretary was thus injunction has been issued restraining the commission of
- 354 -
constrained to reiterate its order directing all striking workers to disruptive acts, management prerogatives must always be
return to work and for the Company to accept them back under exercised consistently with the statutory objective.
the same terms and conditions prevailing before the strike.
To reiterate, Article 263 (g) of the Labor Code constitutes an
On even date, some striking workers were dismissed for alleged exception to the management prerogative of hiring, firing,
violation of the cease-and-desist directive in the order by transfer, demotion and promotion of employees. And to the
waging an illegal strike. The Union manifested their desire to extent that Article 263 (g) calls for the admission of all workers
comply with the back-to-work order provided that the Company under the same terms and conditions prevailing before the strike,
reinstate the said dismissed employees. They also demanded the respondent is restricted from exercising its generally
the Company to issue “embarkation orders” to the positions they unbounded right to transfer or reassign its employees.
held prior to the strike before they lift the pickets and
barricades. The Company refused claiming that the assignment The order simply means that the employees should be returned
of an employee to a post is purely a management prerogative. to their ship assignments as before they staged their strike. The
Company is mandated, under the said order, to issue
The bone of contention between the petitioners, on the one embarkation orders to the employees to enable them to report
hand, and the respondent, on the other, hinged on the proper to their ship assignments in compliance with the Order of the
interpretation of the phrase “for the company to accept them Secretary of Labor.
back under the same terms and conditions prevailing before the
strike.”
Doctrine:
ARGUMENT OF THE UNION: To reiterate, Article 263 (g) of the Labor Code constitutes an
exception to the management prerogative of hiring, firing,
Said phrase must be construed to mean that they be reinstated transfer, demotion and promotion of employees. And to the
to their former assignments. extent that Article 263 (g) calls for the admission of all workers
under the same terms and conditions prevailing before the strike,
the respondent is restricted from exercising its generally
ARGUMENT OF THE COMPANY: unbounded right to transfer or reassign its employees.
Refers only to their salary grades, rank and seniority, but

cannot encompass the usurpation of management’s prerogative
to determine where its employees are to be assigned nor to
determine their job assignments.
Issue/s:
What is the correct interpretation of the phrase “under the same
terms and conditions prevailing before the strike?”
MANILA DIAMOND HOTEL EMPLOYEES Facts: Held:

UNION v CA DOLE dismissed the certification election filed by the Union but it No, a strained relationship between the striking employees and
did not stop them from trying to negotiate for the collective management is no reason for payroll reinstatement in lieu of
GR 140518. bargaining with the Hotel management. The latter responded actual reinstatement. Labor disputes naturally involve strained
December 16, 2004. that it cannot recognize the Union as the employees’ bargaining relations between labor and management, and that in most
J. Azcuna agent since its petition for certification election had been earlier strikes, the relations between the strikers and the non-strikers
dismissed by the DOLE. will similarly be tense.
- 355 -
The Union replied stating that they were not giving the Hotel a A voluntary mode, instead of compulsory mode of dispute
notice to bargain, but that they were merely asking for the settlement is the general rule. The exception is when the
Hotel to engage in collective bargaining negotiations with the Secretary of Labor assumed jurisdiction over a labor dispute
Union for its members only and not for all the rank and file involving an industry indispensable to the national interest. This
employees of the Hotel. provision is viewed as an exercise of the police power of the
State. A prolonged strike or lockout can be inimical to the
The Union announced that it was taking a strike vote. A Notice national economy and, therefore, the situation is imbued with
of Strike was thereafter filed with the NCMB for alleged public necessity and involves the right of the State and the
refusal to bargain. The NCMB summoned both parties and held public to self-protection
a series of dialogues but the Union staged a strike against the
Hotel. The assumption order of the Secretary is a means to be used by
the State to protect itself from an emergency or crisis. It is not
The Secretary assumed jurisdiction and issued a return-to-work for labor, nor is it for management.
order and the Hotel to accept them back under the same terms
and conditions prevailing prior to the strike. Doctrine:
Payroll reinstatement in lieu of actual reinstatement is a
The Union received the aforesaid Order and its members departure from the rule in these cases and there must be
reported for work the next day. The Hotel, however, refused to showing of special circumstances rendering actual reinstatement
accept the returning workers and instead filed a Motion for impracticable. None appears to have been established in this
Reconsideration of the Secretary’s Order. The Acting Secretary case.
modified the order and issued instead payroll reinstatement
instead of actual return to work. This was affirmed by the CA.
Issue/s:
Whether the payroll reinstatement is a valid order under the
circumstances.
PHILCOM EMPLOYEES UNION v PHIL. Facts: Held:

GLOBAL COMMUNICATIONS While negotiation for the CBA is ongoing, the Union, in a Yes, since the very reason of the Secretary’s assumption of
perceived ULP, filed a Notice of Strike. The Company jurisdiction was the Union’s declaration of the strike, any issue
GR 144315. suspended the negotiation for this reason which prompted the regarding the strike is not merely incidental to, but is essentially
July 17, 2006. Union to file another Notice of Strike on the ground of involved in, the labor dispute itself.
J. Carpio bargaining deadlock.
The authority of the Secretary to assume jurisdiction over a
In the conciliation proceeding before the NCMB, the parties labor dispute causing or likely to cause a strike or lockout in an
agreed to maintain the status quo during the pendency of the industry indispensable to national interest includes and extends
proceedings. to all questions and controversies arising from such labor
dispute. The power is plenary and discretionary in nature to
While the union and the company officers and representatives enable him to effectively and efficiently dispose of the dispute.
were meeting, the remaining union officers and members staged
a strike at the company premises, barricading the entrances In this case, the Secretary assumed jurisdiction over the dispute
and egresses thereof and setting up a stationary picket at the because it falls in an industry indispensable to the national
main entrance of the building. The following day, the company interest. Besides, it was the Company’s petition that the
- 356 -
immediately filed a petition for the Secretary to assume Secretary immediately assumed jurisdiction over the labor
jurisdiction over the labor dispute. dispute. If petitioner’s notices of strike were what prompted the
assumption of jurisdiction, the Secretary would have issued the
Acting Labor Secretary issued an Order assuming jurisdiction assumption order as early as those dates.
over the dispute, enjoining any strike or lockout and directed
the striking employees to return to work and for management to NOTE: The Union could not have validly anchored its defiance to
resume normal operations, as well as accept the workers back the return-to-work orders on the motion for reconsideration that it
under the same terms and conditions prior to the strike. had filed on the assumption of jurisdiction order. A return-to-
The Union did not heed the Secretary’s Order. Thereafter, the work order is immediately effective and executory despite the
Company dismissed these employees for abandonment of work filing of a motion for reconsideration. It must be strictly complied
in defiance of the return-to-work order. The Union filed an MR with even during the pendency of any petition questioning its
assailing among others the authority of the Secretary to assume validity.
jurisdiction over the labor dispute.
Doctrine:
ARGUMENT OF THE UNION: The authority of the Secretary to assume jurisdiction over a
labor dispute causing or likely to cause a strike or lockout in an
The Secretary cannot rule on the issue of the strike since there industry indispensable to national interest includes and extends
was no petition to declare the same illegal. They assert that to all questions and controversies arising from such labor
when the Company submitted its position paper where it raised dispute. The power is plenary and discretionary in nature to
the issue of the legality of the strike, the Union timely opposed enable him to effectively and efficiently dispose of the dispute.
the same.
Secretary’s assumption of jurisdiction over the labor dispute was
based on the two notices of strike that the Union filed with the
NCMB. The Union asserts that only the issues on ULP and
bargaining deadlock should be resolved in the present case. To
include the issue on the legality of the strike despite its
opposition would convert the case into a petition to declare the
strike illegal.
ARGUMENT OF THE COMPANY:
It was precisely due to the strike suddenly staged by the union

that the dispute was assumed by the Labor Secretary. Hence,
the case would necessarily include the issue of the legality of
the strike.
Issue/s:
Whether the Company may rule on the issue of legality of strike
absent any petition pertaining to the same.
NISSAN MOTORS v SECRETARY Facts: Held:

GR 158190-91.
June 21, 2006. A labor dispute between the Company and Union was Yes, an ordinary striking worker or union member cannot, as a
J. Garcia triggered by a collective bargaining deadlock which resulted in rule, be terminated for mere participation in an illegal strike;
- 357 -
filing of four (4) notices of strike. The DOLE issued an order there must be proof that he committed illegal acts during the
assuming jurisdiction over the dispute. In it, the DOLE Secretary strike.
expressly enjoined any strike or lockout and directed the
parties to cease and desist from committing any act that might The law invests the Secretary of Labor and Employment the
exacerbate the situation, and for the Union to refrain from prerogative of tempering the consequence of the defiance to
engaging in any disruptive activity. the assumption order. The Secretary may thus merely suspend
rather than dismiss the employee involved.
Eventually, the DOLE Secretary issued a decision which
contained names of union officers and members whom the The following circumstances justifies a less drastic penalty for
Company dismissed for defying the directives contained in the ordinary striking workers: a) the employees who engaged in
assumption order as they engaged in the deliberate work slowdown actually reported for work and continued to occupy
slowdown. their respective posts, or, in fine, did not abandon their jobs; b)
The Secretary eventually modified the same decision deleting they were only following orders of their leaders; and c) no
from the list of dismissed Union officers the names of three (3) evidence has been presented to prove their participation in the
employees previously identified. This was affirmed by the CA. commission of illegal activities during the strike.
ARGUMENT OF THE COMPANY: Besides, the Company also exacerbated the emerging volatile
atmosphere despite the Secretary’s order veritably enjoining
Workers who defy and contravene the [DOLE’s] assumption of the parties to respect the status quo prevailing when she
jurisdiction and/or return-to-work orders are deemed to have assumed jurisdiction over the dispute. Foremost of these
committed an illegal act and, as consequence thereof, have lost exacerbating acts is the en masse termination of most of the
their employment status. Union members, albeit it may be conceded that the employer
has the prerogative of imposing disciplinary sanctions against
The Company faults the CA for effectively ordering, like the assumption-order-defying employees.
public respondent Secretary, the reinstatement of the 140 rank-
and-file Union members who waged a work slowdown True, any worker who participates in a strike or otherwise
notwithstanding the assumption of jurisdiction order. engages in any prohibited act in defiance of the assumption
The Secretary having ruled that the dismissal is valid, the order may be meted the penalty of loss of employment status.
dismissal of the 140 rank-and-file Union members should have But as correctly pointed out by the public respondent Secretary,
also been upheld, given the Secretary’s categorical factual however, the law itself authorizes the graduation of penalties.
determination about the Union having engaged in work
slowdown which, under the circumstances it was undertaken,
viewed as constituting an illegal strike. Doctrine:
The law invests the Secretary of Labor and Employment the
prerogative of tempering the consequence of the defiance to
Issue/s: the assumption order. The Secretary may thus merely suspend
Whether the Secretary in modifying its decision reinstating the rather than dismiss the employee involved.
Union members engaged in illegal activity during the strike is
valid.
FEU-NRMF v FEU-NRMFEA-AFW Facts: Held:

GR 168362.
October 16, 2006. Petitioner FEU-NRMF, a medical institution, rejected the Union’s No valid service was effected
J. Chico-Nazario demands and proposed to maintain the same provisions of the
old CBA. It reasoned that due to financial constraints, it cannot An Order issued by the Secretary of Labor assuming jurisdiction
- 358 -
afford to accede to a number of their demands. over the labor dispute is not a final judgment for it does not
dispose of the labor dispute with finality. Consequently, the rule
The negotiation having failed, the Union filed a Notice of Strike on service of summons and orders, and not the proviso on
before NCMB on the ground of bargaining deadlock. All the service of decisions and final awards, governs the service of the
procedural requirements were complied. Before the strike was Assumption of Jurisdiction Order.
conducted, the Union offered a skeletal force of nursing and
health personnel who will man the hospital’s operation for the Under the NLRC Revised Rules of Procedure, service of copies
duration of the strike. For reasons unknown to the Union, the of orders should be made by the process server either
management failed or refused to accept the offer. personally or through registered mail. However, due to the
urgent nature of the Assumption of Jurisdiction Order and the
FEU filed a Petition for the Assumption of Jurisdiction or for public policy underlying the injunction carried by the issuance of
Certification of Labor Dispute with the NLRC. Acting on the the said Order, service of copies of the same should be made in
petition, the Secretary issued an order assuming jurisdiction over the most expeditious and effective manner, without any delay,
the labor dispute, thereby prohibiting any strike or lockout ensuring its immediate receipt by the intended parties as may
whether actual or impending, and enjoining the parties from be warranted under the circumstances. Accordingly, in this case,
committing any acts which may exacerbate the situation. personal service is the proper mode of serving the Assumption
of Jurisdiction Order.
However, the NLRC process server, certified that, he attempted
to serve a copy of the said order but since no one was around Let it be recalled that the process server merely posted copies
at the strike area, he just posted copies of the said Order at of the Assumption of Jurisdiction Order in conspicuous places in
several conspicuous places within the premises of the hospital. the hospital. Such posting is not prescribed by the rules, nor is it
Claiming that they had no knowledge that the Secretary even referred to when the said rules enumerated the different
modes of effecting substituted service, in case personal service
is impossible by the absence of the party concerned.
already assumed jurisdiction over the pending labor dispute as
they were not able to receive a copy of the Order striking
employees continued holding a strike. For this reason, they were Strike complied with the procedural requirement
dismissed by FEU for the alleged defiance of the said Order.
For a strike to be valid, the following requisites must concur: (1)
Both the LA and NLRC affirmed the illegality of the strike and the thirty-day notice or the fifteen-day notice, in case of unfair
the consequent dismissal of the union officers. This was reversed labor practices; (2) the two-thirds (2/3) required vote to strike
by the CA finding that no personal service was validly effected done by secret ballot; and (3) the submission of the strike vote
by the process server that could bind the striking employees. to the Department of Labor and Employment at least seven
days prior to the strike. In addition, in case of strikes in
hospitals, clinics and medical institutions, it shall be the duty of
Issue/s: the striking employees to provide and maintain an effective
and skeletal workforce of medical and other health personnel in
1. Whether the service of the Assumption of Jurisdiction order to insure the proper and adequate protection of the life
Order was validly effected by the process server so and health of its patients.
as to bind the respondent union and hold them liable
for the acts committed subsequent to the issuance of These procedural requirements, along with the mandatory
the said Order. cooling off and strike ban periods had been fully observed by
2. Whether the strike is valid considering that the the respondent union.
institution is an hospital.
Doctrine:
Under the NLRC Revised Rules of Procedure, service of copies
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of orders should be made by the process server either

personally or through registered mail. However, due to the
urgent nature of the Assumption of Jurisdiction Order and the
public policy underlying the injunction carried by the issuance of
the said Order, service of copies of the same should be made in
the most expeditious and effective manner, without any delay,
ensuring its immediate receipt by the intended parties as may
be warranted under the circumstances. Accordingly, in this case,
personal service is the proper mode of serving the Assumption
of Jurisdiction Order.
PILIPINO TELEPHONE CORPORATION v Facts: Held:

PILTEA The CBA between the Union and the Company was due to
expire so the former submitted to the latter proposals for the No, procedural requirements for a valid strike CANNOT be
GR 160058. renegotiation aspects of their CBA. As there was a standstill on
June 22, 2007. dispensed with even if the striking workers believed in good
several issues, the parties submitted their dispute to the NCMB faith that the company was committing acts of unfair labor
CJ. Puno for preventive mediation. practice.
With the enactment of RA 6715, the requirements as to the
The Union filed its first notice of strike due to the alleged acts of filing of a notice of strike, strike vote, and notice given to the
“restraint and coercion of union members and interference with DOLE are mandatory in nature.
their right to self-organization.” The Company filed a petition
for Consolidated Assumption of Jurisdiction with the Office of Here, the subject strike defied the assumption order of the
the Secretary. Secretary. The second notice of strike was based on
substantially the same grounds as the first notice of strike. The
Another notice of strike was filed by the Union alleging union Union and its officers and members alleged that the mass
busting and mass promotion of union members during the CBA promotion of the union officers and members and the non-
negotiation allegedly aimed at excluding them from the remittance of the deducted contingency fees were the reasons
bargaining unit during the CBA negotiation. On the same day, for their concerted activities which annoyed the Company
the Union went on strike. compelling it to commit acts of ULP, eventually leading to the
Union’s filing of the first notice of strike. Clearly then, the issues
The Secretary ordered a return-to-work order which was which were made as grounds for the second notice of strike, viz,
complied with by the Union. Following this, the Company filed a the mass promotion of the union members and officers and the
petition to declare the Union’s second strike illegal. This was non-remittance of the deducted contingency fees, were already
acted favorably by the LA and the NLRC as this was existing when the Secretary of Labor assumed jurisdiction over
undertaken despite the issuance of an assumption or the entire labor dispute between the Company.
certification order by the Secretary and it suffers from the
procedural defects. There is no union busting
Note that at this juncture, there was also a finding of ULP
against the Company. To constitute union busting there must be—
(1) dismissal from employment of union officers duly elected in
ARGUMENT OF THE UNION: accordance with the union constitution and by-laws; and
(2) existence of the union must be threatened by such dismissal.
Maintain that their second strike was legal. They allege that the In the present case, the second notice of strike filed by the
Company was guilty of union busting. The finding that the Union merely assailed the “mass promotion” of its officers and
company was guilty of ULP precludes the ruling that the strike members during the CBA negotiations. Surely, promotion is
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was illegal and that the Union was in bad faith in conducting the different from dismissal. Promotion which is manifestly beneficial
strike. to an employee should not give rise to a gratuitous speculation
that it was made to deprive the union of the membership of the
benefited employee.
Issue/s:
Whether union busting is a valid defense to dispense with the
procedural requirement of strike.
Doctrine:
Procedural requirements for a valid strike CANNOT be
dispensed with even if the striking workers believed in good
faith that the company was committing acts of unfair labor
practice.
With the enactment of RA 6715, the requirements as to the

filing of a notice of strike, strike vote, and notice given to the
DOLE are mandatory in nature.
CLUB FILIPINO v BAUTISTA Facts: Held:

GR 168406.
July 13, 2009. The Union after a series of attempt to negotiate with the No, in cases of bargaining deadlocks, the notice shall, as far as
J. Corona Company, filed a Notice of Strike on the grounds of bargaining practicable, further state the unresolved issues in the bargaining
deadlock and failure to bargain. It was only then that the negotiations and be accompanied by the written proposals of
company formally responded to the demands of the union when the union, the counter-proposals of the employer and the proof
it submitted the first part of its economic counterproposal; the of a request for conference to settle differences.
second part followed after some weeks.
In the instant case, the union cannot be faulted for its omission.
The Union conducted a strike vote under the supervision of the The union could not have attached the counterproposal of the
DOLE. In response to the company’s counterproposal, the union company in the notice of strike it submitted to the NCMB as
sent the company its improved proposal, but the company there was no such counter-proposal. To recall, the union filed a
refused to improve on its offer. This prompted the union to notice of strike after several requests to start negotiations
pursue the strike. proved futile. It was only after two weeks, when the company
formally responded to the union by submitting the first part of
The Company filed before the NLRC a petition to declare the its counter-proposal. Worse, it took the company another three
strike illegal. The company further prayed that all union officers weeks to complete it by submitting the second part of its
who participated in the illegal strike be considered separated counter-proposal. This was almost a year after the expiration
from the service. Both the LA and the NLRC ruled that the strike of the CBA sought to be renewed.
in procedurally infirm because the Union failed to attach its
written CBA proposal and the company’s counterproposal to The Implementing Rules use the words “as far as practicable.” In
the notice of strike and to provide proof of a request for a this case, attaching the counter-proposal of the company to the
conference to settle the dispute. Thus, the notice of strike was notice of strike of the union was not practicable. It was absurd
deemed not to have been filed and the strike illegal. As a to expect the union to produce the company’s counter-proposal
consequence, all the officers of the union were deemed which it did not have. One cannot give what one does not have.
terminated from service. Indeed, compliance with the requirement was impossible
because no counter-proposal existed at the time the union filed
This was reversed by the CA ratiocinating that the LA’s ruling a notice of strike. The law does not exact compliance with the
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was based on the “flimsy technicality” that conveniently booted impossible.

out the union officers from the company.
Dismissal of the Union officers invalid
Issue/s:
Any union officer who knowingly participates in an illegal strike
Whether the failure to attach the counter-proposal to the notice and any worker or union officer who knowingly participates in
of strike is fatal to the legality of the Notice of Strike. the commission of illegal acts during a strike may be declared
to have lost his employment status.
Mere finding of the illegality of the strike should not be

automatically followed by the wholesale dismissal of the strikers
from employment.
Note that the verb “participates” is preceded by the adverb

“knowingly.” This reflects the intent of the legislature to require
“knowledge” as a condition sine qua non before a union officer
can be dismissed from employment for participating in an
illegal strike. The provision is worded in such a way as to make
it very difficult for employers to circumvent the law by
arbitrarily dismissing employees in the guise of exercising
management prerogative.
Doctrine:
In cases of bargaining deadlocks, the notice shall, as far as
practicable, further state the unresolved issues in the bargaining
negotiations and be accompanied by the written proposals of
the union, the counter-proposals of the employer and the proof
of a request for conference to settle differences.
JACKBILT INDUSTRIES v JACKBILT Facts: Held:

EMPLOYEES UNION Due to the adverse effects of the Asian economic crisis on the No, as argued by the Company, the filing of a petition to
construction industry, the Company decided to temporarily stop declare the strike illegal was unnecessary since the NLRC in its
GR 171618-19. its business compelling most of its employees to go on leave for earlier decision had already found that respondent committed
March 13, 2009. six months. illegal acts in the course of the strike.
J. Corona
The principle of conclusiveness of judgment under the Rules of
The Union protested the temporary shutdown. Because its CBA Court, holds that the parties to a case are bound by the
with the Company was expiring during the period of the findings in a previous judgment with respect to matters actually
shutdown, the Union claimed that the Company halted raised and adjudged therein.
production to avoid its duty to bargain collectively. The
shutdown was allegedly motivated by anti-union sentiments. Since the Union was found in the decision of the NLRC to have
prevented the free entry into and exit of vehicles from
The Union went on strike. Its officers and members picketed petitioner’s compound, respondent’s officers and employees
petitioner’s main gates and deliberately obstructing the ingress
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and egress of the premises. The Company thereafter sought to clearly committed illegal acts.
enjoin (TRO) the Union which was granted by the NLRC. The
reports of both the implementing officer and the investigating
labor arbiter revealed that the Union engaged in the illegal Doctrine:
acts during the strike. The use of unlawful means in the course of a strike renders such
strike illegal, Therefore, pursuant to the principle of
conclusiveness of judgment, the strike was ipso facto illegal. The
Meanwhile, petitioner sent individual memoranda to the officers filing of a petition to declare the strike illegal was thus
and members of respondent who participated in the strike unnecessary. It also follows that the dismissal is in order.
ordering them to explain why they should not be dismissed for
committing illegal acts in the course of a strike. This was ignored
by the Union. As a consequence, they were dismissed and was
barred from entering the business premises.
Aggrieved, the Union filed a complaint for illegal dismissal,

runaway shop, ULP, and refusal to bargain.
In view of its earlier findings that illegal activities were

undertaken by the Union, the NLRC ruled that the Company
validly dismissed the Union’s officers and members. Now acting
on the complaint of the Union, the LA found that there is illegal
dismissal because the Company did not file a petition to
declare the strike illegal before terminating the Union officers
and its members.
ARGUMENT OF THE COMPANY:
The filing of a petition to declare the strike illegal was

unnecessary since the NLRC, in its earlier decision had already
found that respondent committed illegal acts in the course of the
strike.
Issue/s:
Whether the filing of a petition with the labor arbiter to
declare a strike illegal is a condition sine qua non for the valid
termination of employees who commit an illegal act in the
course of such strike.
ALCANTARA & SONS v CA Facts: Held:

GR 155109.
September 29, 2010. The Company and the Union entered into a CBA that bound A strike may be regarded as invalid although the labor union
J. Abad them to hold no strike and no lockout in the course of its life. At has complied with the strict requirements when the same is held
some point the parties began negotiating the economic contrary to an existing agreement, such as a no strike clause or
provisions of their CBA but this ended in a deadlock, prompting conclusive arbitration clause.
the Union to file a notice of strike. Conciliation efforts failed.
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Thus, after observing the procedural requirements, the Union Here, the CBA between the parties contained a “no strike, no
staged a strike. lockout” provision that enjoined both the Union and the
During the strike, the Company filed a TRO with the NLRC to Company from resorting to the use of economic weapons
enjoin the strikers from committing illegal acts during the strike. available to them under the law and to instead take recourse to
This was acted favorably but several attempts to implement the voluntary arbitration in settling their disputes.
writ failed. Only the intervention of law enforcement units made
such implementation possible. No law or public policy prohibits the Union and the Company
from mutually waiving the strike and lockout maces available to
Thereafter, The Company filed a petition to declare the strike them to give way to voluntary arbitration.
illegal citing its violation of the no strike, no lockout clause in
their CBA. For their part, the Union made a counter-claim for Order of reinstatement immediately executory
ULP, and illegal dismissal among others.
The decision of Labor Arbiter reinstating a dismissed employee
The LA declared the strike illegal for violating the CBA, as a shall immediately be executory pending appeal, cannot but
consequence Union officers should be deemed to have forfeited apply to ALL terminations irrespective of the grounds on which
their employment with the Company. It however found no proof they are based.
against the Union members.
Here, although the LA failed to act on the terminated Union
Both parties appealed before the NLRC. The Company assailed members’ motion for reinstatement pending appeal, the
the reinstatement of the Union members while the Union Company had the duty under the Labor Code to immediately
questioned the declaration of illegality of strike. However, the reinstate the affected employees even if it intended to appeal
NLRC affirmed the LA but ruled in affirmative the dismissal of from the decision ordaining such reinstatement. The Company’s
the Union members as well. The CA reinstated the LA’s decision. failure to do so makes it liable for accrued backwages.
(Hanggang dito lang yung relevant facts, pero if ever itanong
ung order of reinstatement vis a vis illegal strike, then proceed)
Acquittal in the criminal complaint not a bar to labor complaint
In finding illegal activity was undertaken during the strike, the
NLRC took notice of the criminal complaint filed in various courts The mere fact that the criminal complaints against the
involving the same officers and members. The court in these terminated Union members were subsequently dismissed for one
criminal cases however ordered their acquittal. reason or another does not extinguish their liability under the
Labor Code. Nor does such dismissal bar the admission of the
affidavits, documents, and photos presented to establish their
Note that during the pendency of the appeal, the Union identity and guilt during the hearing of the petition to declare
members filed a motion for reinstatement but the LA belatedly the strike illegal.
acted on it. This was reversed by the CA because the ground of
reinstatement is not applicable in cases of illegal strike.
The technical grounds that the Union interposed for denying
admission of the photos are also not binding on the NLRC.
Issue/s:
Whether the strike is valid.
Doctrine:
A strike may be regarded as invalid although the labor union
has complied with the strict requirements when the same is held
contrary to an existing agreement, such as a no strike clause or
conclusive arbitration clause.
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PHIMCO INDUSTRIES, INC. v. PILA Facts: Held:

GR 170830.
August 11, 2010. The Union went on Notice of Strike on the ground of bargaining Nature of picketing
J. Brion deadlock. All procedural requirements were complied with. The
Company filed before the NLRC a TRO to enjoin the strikers To strike is to withhold or to stop work by the concerted action
from preventing—through force, intimidation and coercion—the of employees as a result of an industrial or labor dispute. The
ingress and egress of non-striking employees into and from the work stoppage may be accompanied by picketing by the
company premises. striking employees outside of the company compound. While a
strike focuses on stoppage of work, picketing focuses on
Then Acting Labor Secretary assumed jurisdiction over the labor publicizing the labor dispute and its incidents to inform the
dispute and ordered all striking employees (except those public of what is happening in the company struck against. A
already terminated) to return to work. The Union ended their picket simply means to march to and from the employer’s
strike on the same day. premises, usually accompanied by the display of placards and
other signs making known the facts involved in a labor dispute.
The Company filed a petition to declare the strike illegal. They It is a strike activity separate and different from the actual
alleged that they were prevented ingress and egress as the stoppage of work.
Union formed a human barricade. The Union countered that
they complied with all the legal requirements for the staging of Protected picketing does not extend to blocking ingress to and
the strike, they put up no barricade, and conducted their strike egress from the company premises. That the picket was moving,
peacefully, in an orderly and lawful manner, without incident. was peaceful and was not attended by actual violence may not
free it from taints of illegality if the picket effectively blocked
The LA ruled that the strike is illegal. He observed that it was entry to and exit from the company premises.
not enough that the picket of the strikers was a moving picket,
since the strikers should allow the free passage to the entrance In the instant case, while the picket was moving, it was
and exit points of the company premises. Thus, the LA declared maintained so close to the company gates that it virtually
that the Union officers and members have lost their employment constituted an obstruction, especially when the strikers joined
status. hands, or were moving in circles, hand-to-shoulder, as shown by
This was reversed by the NLRC and CA. Both relied instead on the photographs, that, for all intents and purposes, blocked the
the Union’s evidence showing that the union conducted a free ingress to and egress from the company premises.
peaceful moving picket.
The obstructive nature of the picket was aggravated by the
Issue/s: placement of benches, with strikers standing on top, directly in
Whether the moving picket in the present case constitute illegal front of the open wing of the company gates, clearly
act during strike. - YES. obstructing the entry and exit points of the company compound.
Intimidation
Force threatened is the equivalent of force exercised. There

may be unlawful intimidation without direct threats or overt acts
of violence. Words or acts which are calculated and intended
to cause an ordinary person to fear an injury to his person,
business or property are equivalent to threats.
The manner in which the respondent union officers and members
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conducted the picket in the present case had created such an

intimidating atmosphere that non-striking employees and even
company vehicles did not dare cross the picket line, even with
police intervention. Those who dared cross the picket line were
stopped.
NOTE: Police intervention and participation are, as a rule,

prohibited acts in a strike, but we note this intervention solely as
indicators of how far the union and its members have gone to
block ingress to and egress from the company premises.
Doctrine:
To strike is to withhold or to stop work by the concerted action
of employees as a result of an industrial or labor dispute. The
work stoppage may be accompanied by picketing by the
striking employees outside of the company compound. While a
strike focuses on stoppage of work, picketing focuses on
publicizing the labor dispute and its incidents to inform the
public of what is happening in the company struck against. A
picket simply means to march to and from the employer’s
premises, usually accompanied by the display of placards and
other signs making known the facts involved in a labor dispute.
It is a strike activity separate and different from the actual
stoppage of work.
SOLIDBANK COR. v GAMIER Facts: Held:

The CBA negotiation resulted in a deadlock between Solidbank Yes, the fact that the conventional term “strike” was not used by
GR 159460. and the Union. The latter filed a Notice of Strike. During the the striking employees to describe their common course of
November 15, 2010. collective bargaining negotiations, some Union members staged action is inconsequential, since the substance of the situation,
J. Villarama, Jr. a series of mass actions. In view of the impending actual strike, and not its appearance, will be deemed to be controlling.
then Secretary of Labor assumed jurisdiction over the labor
dispute. The assumption order directed the parties “to cease and The term “strike” shall comprise not only concerted work
desist from committing any and all acts that might exacerbate the stoppages, but also slowdowns, mass leaves, sitdowns, attempts
situation.” to damage, destroy or sabotage plant equipment and facilities
and similar activities.
The Secretary resolved all economic and non- economic issues.
Dissatisfied with the Secretary’s ruling, the Union officers and CA patently erred in concluding that the concerted mass actions
members decided to protest the same by holding a rally infront staged by respondents cannot be considered a strike but a
of the Office of the Secretary in Intramuros, Manila, legitimate exercise of the respondents’ right to express their
simultaneous with the filing of their motion for reconsideration. dissatisfaction with the Secretary’s resolution of the economic
issues in the deadlocked CBA negotiations with petitioners. It
An overwhelming majority of employees, including the individual must be stressed that the concerted action of the respondents
respondents, joined the “mass leave” and “protest action” at the was not limited to the protest rally infront of the DOLE Office.
DOLE office while the bank’s provincial branches followed suit The Union also picketed the Head Office of Solidbank. About
and “boycotted regular work.” The union members also picketed 712 employees, including those in the provincial branches,
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the bank’s Head Office. boycotted and absented themselves from work in a concerted
fashion for three continuous days that virtually paralyzed the
As a result of the employees’ concerted actions, Solidbank’s employer’s banking operations. Considering that these mass
business operations were paralyzed. Solidbank’s president actions stemmed from a bargaining deadlock and an order of
issued a memorandum declaring that the bank is prepared to assumption of jurisdiction had already been issued by the
take back employees who will report for work. “provided these Secretary of Labor to avert an impending strike, there is no
employees were/are not part of those who led or instigated or doubt that the concerted work abandonment/boycott was the
coerced their co-employees into participating in this illegal act.” result of a labor dispute.
Out of the 712 employees who took part in the three- day work
boycott, a total of 513 returned to work and were accepted by Clearly, respondents knowingly violated the aforesaid provision
the bank. The remaining 199, including respondent Garnier, by holding a strike in the guise of mass demonstration
insisted on defying the directive. simultaneous with concerted work abandonment/boycott.
Liabilities of the Union officers/members
After rendering their explanation, respondents were dismissed.
With respect to respondents who are union officers, the validity
CASE PROPER: of their termination cannot be questioned. Being fully aware
that the proceedings before the Secretary of Labor were still
pending as in fact they filed a motion for reconsideration, they
Note that the respondents here filed a complaint for illegal cannot invoke good faith as a defense.
dismissal while the Union filed also a similar complaint for ULP.
Hence, there is a separate complaint which was resolved
separately. This resulted to the conflicting findings when that the For the rest of the individual respondents who are union
mass action cannot be considered a strike but a freedom of members, the rule is that an ordinary striking worker cannot be
expression and on one hand, there is also this ruling that it is an terminated for mere participation in an illegal strike. There must
illegal strike. be proof that he or she committed illegal acts during a strike. In
all cases, the striker must be identified. But proof beyond
reasonable doubt is not required. Substantial evidence
Issue/s: available under the attendant circumstances, which may justify
Whether the protest rally and concerted work the imposition of the penalty of dismissal, may suffice. Liability
abandonment/boycott staged by the respondents is a strike for prohibited acts is to be determined on an individual basis
violative of the Secretary’s order.
The Bank have not adduced evidence on such illegal acts
committed by each of the individual respondents who are union
members. Instead, it simply point to their admitted participation
in the mass actions which they knew to be illegal, being in
violation of the Secretary’s assumption order. However, the acts
which were held to be prohibited activities are the following:
“... where the strikers shouted slanderous and scurrilous words

against the owners of the vessels; where the strikers used
unnecessary and obscene language or epithets to prevent other
laborers to go to work, and circulated libelous statements against
the employer which show actual malice; where the protestors used
abusive and threatening language towards the patrons of a place
of business or against co-employees, going beyond the mere
attempt to persuade customers to withdraw their patronage;
where the strikers formed a human cordon and blocked all the
- 367 -
ways and approaches to the launches and vessels of the vicinity of

the workplace and perpetrated acts of violence and coercion to
prevent work from being performed; and where the strikers shook
their fists and threatened non-striking employees with bodily harm
if they persisted to proceed to the workplace. x x x”
The dismissal of herein respondent-union members are therefore

unjustified in the absence of a clear showing that they
committed specific illegal acts during the mass actions and
concerted work boycott.
Doctrine:
The term “strike” shall comprise not only concerted work
stoppages, but also slowdowns, mass leaves, sitdowns, attempts
to damage, destroy or sabotage plant equipment and facilities
and similar activities.
ESCARIO v NLRC Facts: Held:

GR 160302.
September 27, 2010. Petitioner Escario, along with others, are members of the Union No, award of backwages can be accorded only to employees
J. Bersamin who walked out of their job and went to the barangay office to unjustly dismissed—that is, the employer dismisses the employee
show their support to their Union officer who was accused with without observing due process, either substantive or procedural.
oral defamation against the Company officers. The proceedings With respect to backwages, the principle of a “fair day’s wage
in the barangay resulted in a settlement, and the officers and for a fair day’s labor” remains as the basic factor in determining
members of the Union all returned to work thereafter. the award thereof. If there is no work performed by the
employee there can be no wage or pay unless, of course, the
The Company terminated those who participated in the walk- laborer was able, willing and ready to work but was illegally
out. It then filed a complaint for ULP assailing that the illegal locked out, suspended or dismissed or otherwise illegally
walk-out constitute as such. The Company also prayed for the prevented from working. For this exception to apply, it is
lost of the employment status of the petitioners. required that the strike be legal.
This compelled the union to wage a strike. The Company Under the principle of a fair day’s wage for a fair day’s labor,
retaliated by charging the petitioners with ULP and the petitioners were not entitled to the wages during the period
abandonment of work. NLRC issued a TRO enjoining the Union of the strike (even if the strike might be legal), because they
to cease and desist from barricading and obstructing the performed no work during the strike.
business premises.
As a general rule, backwages are granted to indemnify a
The LA ruled that the strike was illegal. NLRC sustained the dismissed employee for his loss of earnings during the whole
same but reversed the finding insofar that there is an period that he is out of his job. Considering that an illegally
abandonment of work. CA affirmed the same and ordered the dismissed employee is not deemed to have left his employment,
reinstatement of the petitioners to their former positions without he is entitled to all the rights and privileges that accrue to him
backwages while the Union officers are deemed to have lost from the employment.
their employment status. The appellate court in denying the
grant of backwages explained that the only instance under NOTES: Backwages are NOT granted to employees participating
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Article 264 (illegal strike) when a dismissed employee would be in an illegal strike simply accords with the reality that they do not
reinstated with full backwages was when he was dismissed by render work for the employer during the period of the illegal
reason of an illegal lockout. strike.
There are two causes for the dismissal of an employee who
ARGUMENT OF THE PETITIONER: engaged in the prohibited act during the strike, that is: (a)
unlawful lockout; and (b) participation in an illegal strike, the
third paragraph of Article 264(a) authorizes the award of full
Posit that under Article 264 when a dismissed employee would backwages only when the termination of employment is a
be reinstated with full backwages was when he was dismissed consequence of an unlawful lockout.
by reason of an illegal lockout. They argue that the finding of
no abandonment equated to a finding of illegal dismissal in The petitioners were terminated for joining a strike that was later
their favor. Hence, they were entitled to full backwages. declared to be illegal. The NLRC ordered their reinstatement or, in
lieu of reinstatement, the payment of their separation pay,
Issue/s: because they were mere rank-and-file workers whom the Union’s
Whether the petitioners are entitled to the backwages. officers had misled into joining the illegal strike. They were not
unjustly dismissed from work.
Doctrine:
With respect to backwages, the principle of a “fair day’s wage
for a fair day’s labor” remains as the basic factor in determining
the award thereof. If there is no work performed by the
employee there can be no wage or pay unless, of course, the
laborer was able, willing and ready to work but was illegally
locked out, suspended or dismissed or otherwise illegally
prevented from working. For this exception to apply, it is
required that the strike be legal.
BAGONG PAGKAKAISA NG Facts: Held:

MANGGAGAWA SA TRIUMPH v
SECRETARY
Arising from the bargaining deadlock, the Company filed a As regards the jurisdiction of the Secretary
GR 167401. Notice of Lock-out for ULP due to the union’s alleged work
July 5, 2010. slowdown. Three days later, the Union went on strike. Article 263(g) is both an extraordinary and a preemptive
J. Brion power to address an extraordinary situation—a strike or
The Secretary assumed jurisdiction and issued a return to work lockout in an industry indispensable to the national interest. This
order. Several employees attempted to return to work but the grant is NOT limited to the grounds cited in the notice of strike
strike persisted preventing the entry to the company premises. or lockout that may have preceded the strike or lockout; NOR is
it limited to the incidents of the strike or lockout that in the
The Secretary issued yet another return-to-work order. The meanwhile may have taken place. As the term “assume
Company extended the implementation of return-to-work order jurisdiction” connotes, the intent of the law is to give the Labor
without prejudice to whatever legal action it may take against Secretary full authority to resolve all matters within the dispute
the striking employees. that gave rise to or which arose out of the strike or lockout; it
includes and extends to all questions and controversies arising
from or related to the dispute, including cases over which the
When the striking employees returned to work, some of the labor arbiter has exclusive jurisdiction.
Union officers and the shop steward were not allowed entry into
the company premises. They were directed instead to explain
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why they should not be dismissed. In the present case, what the Labor Secretary refused to rule
upon was the dismissal from employment that resulted from the
The Union officers asked the Secretary to cite the company for strike. Article 264 significantly dwells on this exact subject
contempt and to issue a reinstatement order. The Secretary matter by defining the circumstances when a union officer or
ordered the reinstatement of the Union officers which the member may be declared to have lost his employment. It was
Company complied but it only reinstated the said officers in its an issue that arose from the strike and was, in fact, submitted to
payroll. Again, they received another identical letter and was the Labor Secretary, through the union’s motion for the issuance
eventually dismissed for the alleged illegal activities prior (work of an order for immediate reinstatement of the dismissed
slowdown) and during the strike (blocking the ingress and officers and the company’s opposition to the motion.
egress).
Thus, the dismissal issue was properly brought before the Labor
CASE PROPER: Secretary.
The Union and its officers filed a petition before the Secretary Dismissal of the Union officers valid
to cite the Company for contempt and that a reinstatement
order be issued. They claimed that the Company violated the The Labor Secretary’s assumption of jurisdiction over the dispute
return-to-work order when they were put into preventive or its certification to the NLRC for compulsory arbitration shall
suspension pending the investigation and their reinstatement have the effect of automatically enjoining the intended or
only to the payroll. impending strike or lockout and all striking or locked out
employees shall immediately return to work and the employer
The Secretary ruled that the legality of the union officers’ shall immediately resume operations and readmit all workers
dismissal properly falls within the original and exclusive under the same terms and conditions before the strike or
jurisdiction of the labor arbiter. Elevating the case to the CA, the lockout.
Union argued that its officers should have been reinstated in the The Union and its officers, as well as the workers defied the
absence of substantial evidence supporting the charges against Labor Secretary’s assumption of jurisdiction, especially the
them. The CA faulted the Secretary for not ruling on the accompanying return-to-work order twice. Consequently, it
dismissal of the union officers. It took exception to the Labor constitutes a valid ground for dismissal.
Secretary’s view that the dismissal question is within the
exclusive jurisdiction of the labor arbiter. The appellate court Any union officer who knowingly participates in an illegal strike
held that the Secretary has jurisdiction over all questions and and any worker or union officer who knowingly participates in
controversies arising from an assumed dispute, including cases the commission of illegal acts during a strike may be declared
over which the labor arbiter has exclusive jurisdiction. It pointed to have lost his employment status.
out that the dismissal and issue of bargaining deadlock and
strike are intertwined. The CA did not remand the case to the The union officers were answerable not only for resisting the
Secretary in the interest of justice. Labor Secretary’s assumption of jurisdiction and return-to-work
orders; they were also liable for leading and instigating the
Finally, the CA concluded that the dismissal of the Union officers work slowdown, a form of strike undertaken by the union
is invalid (except with one officer named Trinidad) because the without complying with the mandatory legal requirements of a
Company failed to adduced proof of their illegal activities strike notice and strike vote. These acts are similarly prohibited
during the strike. activities.
ARGUMENT OF THE UNION: Power of employer to dismiss employees in case of illegal strike
The union seeks a reversal of the dismissal of Trinidad. It argues The law, in using the word ‘may,’ grants the employer the
that she was dismissed for alleged illegal acts based solely on option of declaring a union officer who participated in an
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the self-serving affidavits executed by officers of the company; illegal strike as having lost his employment.
the strike had not been declared illegal for the company had
not initiated an action to have it declared illegal. Despite the receipt of an order from the SOLE to return to their
respective jobs, the Union officers and members refused to do
ARGUMENT OF THE COMPANY: so and defied the same. Consequently, then, the strike staged
by the Union is a prohibited activity. The absence of a case to
The Secretary has no authority to decide the legality or declare the strike illegal is of no moment.
illegality of strikes or lockouts, jurisdiction over such issue having
been vested on the labor arbiters. His authority over a labor
dispute encompasses only the issues, not the legality or illegality
of any strike that may have occurred in the meantime. It points
out that before the Labor Secretary can take cognizance of an Doctrine:
incidental issue such as a dismissal question, it must first be Article 263(g) is both an extraordinary and a preemptive
properly submitted to him. power to address an extraordinary situation—a strike or
lockout in an industry indispensable to the national interest. This
grant is NOT limited to the grounds cited in the notice of strike
Issue/s: or lockout that may have preceded the strike or lockout; NOR is
it limited to the incidents of the strike or lockout that in the
1. Whether the Secretary has jurisdiction to decide on the meanwhile may have taken place. As the term “assume
legality of the strike and the consequent dismissal of the Union jurisdiction” connotes, the intent of the law is to give the Labor
officers. – YES. Secretary full authority to resolve all matters within the dispute
2. Whether a petition to declare the strike illegal is necessary that gave rise to or which arose out of the strike or lockout; it
before the employer may imposed disciplinary action to its includes and extends to all questions and controversies arising
striking employees. – NO. from or related to the dispute, including cases over which the
labor arbiter has exclusive jurisdiction.
FADRIQUELAN v MONTEREY FOODS Facts: Held:

GR 178409.
June 8, 2011. The Union filed a Notice of Strike due to bargaining deadlock. Yes, no strike shall be declared after the Secretary of Labor
J. Abad To head-off the same, the Company filed with the DOLE a has assumed jurisdiction over a labor dispute. A strike
petition for assumption of jurisdiction over the dispute in view of conducted after such assumption is illegal and any union officer
its dire effects on the meat industry. The Secretary assumed who knowingly participates in the same may be declared as
jurisdiction over the dispute and enjoined the union from holding having lost his employment.
any strike. It also directed the union and the company to desist
from taking any action that may aggravate the situation. Here, what is involved is a slowdown strike. Unlike other forms
of strike, the employees involved in a slowdown do not walk out
A second notice of strike was filed now on the basis of alleged of their jobs to hurt the company. They need only to stop work
ULP on the part of the Company. The Company sent notices to or reduce the rate of their work while generally remaining in
the union officers, charging them with intentional acts of their assigned post.
slowdown. Six days later, the company sent new notices to the
union officers, informing them of their termination from work for The Union held a slowdown strike at the company’s farms
defying the DOLE Secretary’s assumption order. despite the fact that the DOLE Secretary already assumed
jurisdiction over their labor dispute. They simultaneously
The Secretary included the union’s second notice of strike in his stopped work at the company’s Batangas and Cavite farms at
earlier assumption order. But, on the same day, the union filed a 7:00 a.m.
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third notice of strike based on allegations that the company had

engaged in union busting and illegal dismissal of union officers. Union officer must be identified for the validity of the dismissal
Likewise, the Secretary subsumed these petition under the first
and second notice of strike.
The participating union officers have to be properly identified.
Here, the witnesses did not say that the Union officers took part
The DOLE upheld the validity of the dismissal and was affirmed in the work slowdown. Yet, these officers gave no credible
by the CA. excuse for being absent from their respective working areas
during the slowdown.
Issue/s: With respect to the Fadriquelan, Cavite Union President, his

Whether the dismissal of the Union officers is valid. dismissal cannot be sustained because he even directed the
Union not to do anything which might aggravate the situation.
This clearly shows that his dismissal was mainly based on his
being the union president.
The Court sustains the validity of the termination of the rest of

the union officers. The identity and participations of the rest of
the officers in the slowdowns were properly established. These
officers simply refused to work or they abandoned their work
to join union assemblies.
NOTE: The union of course argues that it merely held assemblies

to inform members of the developments in the CBA negotiation,
not protest demonstrations over it. But as the CA correctly
observed, if the meetings had really been for the stated reason,
why did the union officers and members from separate company
farms choose to start and end their meetings at the same time and
on the same day? And if they did not intend a slowdown, why did
they not hold their meetings after work. There is no allegation that
the company prevented the union from holding meetings after
working hours.
Doctrine:
No strike shall be declared after the Secretary of Labor has
assumed jurisdiction over a labor dispute. A strike conducted
after such assumption is illegal and any union officer who
knowingly participates in the same may be declared as having
lost his employment.
MAGDALA MULTIPURPOSE & Facts: Held:

LIVELIHOOD COOPERATIVE v KMLMS The Union filed a Notice of Strike and conducted its strike-vote. Only the duly certified or recognized bargaining agent may
However, it is only thereafter that it acquired legal personality file a notice of strike or the employer may file a notice of
GR 191138-39. when its registration as an independent labor organization was lockout. In absence of a duly certified or recognized bargaining
October 19, 2011. granted. Subsequent to this, it became officially affiliated as a agent, the notice of strike may be filed by any legitimate labor
J. Velasco, Jr.
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local chapter of the federation. organization in behalf of its members.
Now a legitimate labor organization, it staged a strike where There is no question that the strike was illegal, first, when the
several prohibited and illegal acts were committed by its Union filed the notice of strike, it had not yet acquired legal
participating members. personality and, thus, could not legally represent the eventual
union and its members. And second, similarly when the Union
On the ground of lack of valid notice of strike, ineffective conducted the strike-vote, there was still no union to speak of,
conduct of a strike-vote and commission of prohibited and since the Union only acquired legal personality as an
illegal acts, the Cooperative filed a petition to declare the independent LLO only on the day after it conducted the strike-
strike illegal. The latter also prayed for the lost of employment vote.
status of the officers and members who knowingly participated
in the illegal conducts during the strike. Consequently, the mandatory notice of strike and the conduct of
the strike-vote report were ineffective for having been filed
Both the LA and the NLRC ruled that the strike is illegal and and conducted before Union acquired legal personality as an
declared 41 workers to have lost their employment. The LLO.
decision is based on the ground 41 workers to have lost their
employment. The CA affirmed with modification declaring an Doctrine:
additional seven (7) union members to have forfeited their Only the duly certified or recognized bargaining agent may
employment status. file a notice of strike or the employer may file a notice of
lockout. In absence of a duly certified or recognized bargaining
The Cooperative still appealed on this decision insisting that all agent, the notice of strike may be filed by any legitimate labor
those who participated in the conduct of illegal strike should be organization in behalf of its members.
dismissed as well because the appellate court found no
substantial evidence to support the claim against the rest of the
strikers.
Issue/s:
Whether the Union complied with the mandatory requirements
for the conduct of a valid strike. – NO.
AUTOMOTIVE ENGINE REBUILDERS v Facts: Held:

PROGRESIBONG UNYON
GR 160192. A day after the Union filed a petition for certification election, Yes, neither party came to court with clean hands.
July 13, 2011. the Company hit back by requiring all its employees to undergo
J. Mendoza a compulsory drug test. It was applied to all the employees. Both parties are in pari delicto and such situation warrants the
Prior to this, there has been no history of drug test and the restoration of the status quo ante and bringing the parties back
company rule is silent regarding the matter. to the respective positions before the illegal strike and illegal
lockout. This means that the contending parties must be brought
The Company also moved its machines to its another office back to their respective positions before the controversy; that is,
across the street. Sensing that management was going to before the strike.
engage in a runaway shop, the Union tried to prevent the
transfer of the machines which prompted the Company to issue This means that the contending parties must be brought back to
a memorandum accusing those involved of gross insubordination, their respective positions before the controversy; that is, before
work stoppage and other offenses. the strike, that the petition must be granted insofar as it seeks
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the setting aside of the award of backwages to the concerned

Affected workers were denied entry to the Company’s employees ordered reinstated on the basis of the general rule
premises. Because of this, the affected workers staged a picket that strikers are not entitled to backwages.
in front of company premises hoping that management would
accept them back to work. The strike lasted for only a day. In the present case, both the Company and the Union are at
When their picket proved futile, they filed a complaint for fault or in pari delicto, they should be restored to their
unfair labor practice (illegal lockout) among others. respective positions prior to the illegal strike and illegal lockout.
Nonetheless, if reinstatement is no longer feasible, the
The Company for its part filed a complaint for ULP against the concerned employees should be given separation pay up to the
Union charging them with illegal strike and engaging in date set for the return of the complaining employees in lieu of
prohibited acts during the strike. The concerned employees reinstatement.
occupied the Company’s premises for several hours, thus, Outright dismissal NOT valid on mere finding of illegal strike
disrupting the work of the other employees and its services to its
clients. A mere finding of the illegality of a strike does not
automatically warrant a wholesale dismissal of the strikers from
When the case reached the appellate court, it directed the their employment and that a premature or improvident strike
reinstatement of the dismissed employees but without should not be visited with a consequence so severe as dismissal
backwages. It also made a finding that BOTH parties are guilty where a penalty less punitive would suffice.
of ULP.
Here, the Company engaged in the runaway shop when it
ARGUMENT OF THE UNION: began pulling out machines from the main its main building on
the pretext that the main building was undergoing renovation.
Certainly, the striking workers would have no reason to run and
The penalty of outright dismissal against the employees enter the premises where the machine is transferred to cause
charged with illegal strike was grossly disproportionate to their the return of the machines to the main building. The Company
offense. committed another infraction when it refused to admit back
those employees who were not included in its complaint against
ARGUMENT OF THE COMPANY: the union. Therefore, there is no convincing proof that they
deliberately abandoned their jobs.
Dismissed employees are not entitled to backwages or even
reinstatement because their separation from work was valid due In any event, the penalty of dismissal imposed by the Company
to their unlawful activities and willful disobedience. against the striking employees, who, by the way, only staged a
one-day walkout, was too severe. It must also be noted that
there were no injuries during the brief walkout. Neither was
Issue/s: there proof that the striking workers inflicted harm or violence
Whether the reinstatement of the complaining employees but upon the other employees.
without backwages is just and proper.
To the Court’s mind, the complaining workers temporarily
walked out of their jobs because they strongly believed that
management was committing an unfair labor practice. They had
no intention of hurting anybody or steal company property.
Doctrine:
Both parties are in pari delicto and such situation warrants the
restoration of the status quo ante and bringing the parties back
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to the respective positions before the illegal strike and illegal

lockout. This means that the contending parties must be brought
back to their respective positions before the controversy; that is,
before the strike.
NARANJO v BIOMEDICA HEALTH CARE Facts: Held:

GR 193789.
September 19, 2012. The five (5) petitioners were former employees of respondent Petitioners did NOT stage mass leave
J. Velasco, Jr. Biomedica. On the same date, the petitioners, along with two
(2) other employees, ―were all absent for various personal The term “Mass Leave” has been left undefined by the Labor
reasons. Code. Plainly, the legislature intended that the term’s ordinary
Reasons: Loose bowel movement, check-up, not feeling well, sense be used. “Mass” is defined as “participated in, attended
migraine (Eto lagi reason ni Ipapo pag absent sa work), and for by, or affecting a large number of individuals; having a large-
Naranjo, he had to attend a meeting at his child’s school. scale character.” While the term “Leave” is defined as “an
authorized absence or vacation from duty or employment usually
Notably, these are the same employees who filed a letter- with pay.” Thus, the phrase “mass leave” may refer to a
complaint against Biomedica for underpayment and non- simultaneous availment of authorized leave benefits by a large
payment of government-mandated benefits. Later that day, number of employees in a company.
petitioners reported for work after receiving text messages for
them to proceed to Biomedica. They were, however, refused Going on leave or absenting one’s self from work for personal
entry and told to start looking for another workplace. reasons when they have leave benefits available is an
employee’s right.
They were issued a notice of preventive suspension which
eventually led to their dismissal. The Company accused the Moreover, a mass leave involves a large number of people or
petitioners of having conducted an illegal strike. It apparently in this case, workers. Here, the five (5) petitioners were absent
likened the ‘mass’ leave as illegal strike. on the same day. The records are bereft of any evidence to
establish how many workers are employed in Biomedica. There
The LA found that, indeed, petitioners engaged in a mass leave is no evidence on record that 5 employees constitute a
akin to a strike. He added that, assuming that petitioners were substantial number of employees of Biomedica. And, as earlier
not aware of the company policies on illegal strikes, such mass stated, it is incumbent upon Biomedica.
leave can sufficiently be deemed as serious misconduct. This was
reversed by the NLRC. On appeal, the CA reinstated the The Company did not submit a copy of the CBA or a company
decision of the LA. memorandum or circular showing the authorized sick or vacation
leaves which petitioners can avail of. Neither is there any
Issue/s: document to show the procedure by which such leaves can be
Whether petitioners’ absence from work on the same day is a enjoyed. Absent such pertinent documentary evidence, the Court
mass leave constituting illegal strike. – NO. can only conclude that the availment of petitioners of their
respective leaves was authorized, valid and in accordance with
the company or CBA rules on entitlement to and availment of
such leaves.
Having failed to show that there was a mass leave, the Court
concludes that there were only individual availment of their
leaves by petitioners and they cannot be held guilty of any
wrongdoing, much less anything to justify their dismissal from
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employment.
Petitioners did NOT go on strike
The Labor Code defines a strike as any temporary stoppage of

work by the concerted action of employees as a result of any
industrial or labor dispute. “Concerted” is defined as “mutually
contrived or planned” or “performed in unison.”
In the instant case, the 5 petitioners went on leave for various

reasons. Petitioners were in different places to attend to their
personal needs or affairs. They did not go to the company
premises to petition Biomedica for their grievance. To
demonstrate their good faith in availing their leaves, petitions
reported for work and were at the company premises in the
afternoon after they received text messages asking them to do
so. This shows that there was NO intent to go on strike.
It is erroneous therefore to liken the alleged mass leave to an
illegal strike.
NOTE: There was an allegation here that petitioner convinced the

other two (2) employees not to report for work. Their affidavit
however was not given weight by the Court.
Doctrine:
The term “Mass Leave” has been left undefined by the Labor
Code. Plainly, the legislature intended that the term’s ordinary
sense be used. “Mass” is defined as “participated in, attended
by, or affecting a large number of individuals; having a large-
scale character.” While the term “Leave” is defined as “an
authorized absence or vacation from duty or employment usually
with pay.” Thus, the phrase “mass leave” may refer to a
simultaneous availment of authorized leave benefits by a large
number of employees in a company.
VCMC v YBALLE Facts: Held:

GR 196156.
January 15, 2014. As an offshoot of the case decided by the Court in Abaria v With respect to backwages, the principle of a “fair day’s wage
J. Villarama, Jr. NLRC, the Court found therein that the Union has no legal for a fair day’s labor” remains as the basic factor in
personality as it was not a registered labor organization. determining the award thereof. If there is no work performed
Therefore, their strike was declared illegal and the consequent by the employee there can be no wage or pay unless, of
termination of the Union officers and members who knowingly course, the laborer was able, willing and ready to work but
participated therein were held valid. was illegally locked out, suspended or dismissed or otherwise
illegally prevented from working. For this exception to apply, it
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The complainants in the present case are staff nurses and is required that the strike be legal.
midwives of the Hospital who actively joined and were believed
to have took part in committing illegal acts during the strike. Note that the Union here lacks legal personality, the strike
Although the CA did not give credence on the attempt of the therefore is illegal. Hence, backwages cannot be awarded to
complainants to disassociate themselves with the erring Union, the complainants herein. With respect to the reinstatement, the
the CA however found that complainants cannot be considered alternative relief for union members who were dismissed for
to have committed illegal acts since their participation was having participated in an illegal strike is the payment of
limited to the wearing of arm bands. The appellate court also separation pay in lieu of reinstatement under the following
awarded full backwages and ordered reinstatement. circumstances:
(a) when reinstatement can no longer be effected in view of the

passage of a long period of time or because of the realities of
Issue/s: the situation;
With the SC affirming the illegality of dismissal, the crux of (b) reinstatement is inimical to the employer’s interest;
controversy that remains to be resolved is whether the award of (c) reinstatement is no longer feasible;
full backwages and reinstatement is proper. (d) reinstatement does not serve the best interests of the parties
involved;
(e) employer is prejudiced by the workers’ continued
employment;
(f) facts that make execution unjust or inequitable have
supervened; or
(g) strained relations between the employer and employee.
Considering that 15 years had lapsed from the onset of this

labor dispute, and in view of strained relations that ensued,
separation pay without back wages is the appropriate relief.
Doctrine:
With respect to backwages, the principle of a “fair day’s wage
for a fair day’s labor” remains as the basic factor in
determining the award thereof. If there is no work performed
by the employee there can be no wage or pay unless, of
course, the laborer was able, willing and ready to work but
was illegally locked out, suspended or dismissed or otherwise
illegally prevented from working. For this exception to apply, it
is required that the strike be legal.
TABANGAO SHELL REFINERY Facts: Held:

EMPLOYEES ASSOCIATION v PILIPINAS Both the Union and the Company cannot come up with the As a matter of necessity, the Secretary’s authority to assume
SHELL agreement pertaining to the economic provision of the CBA, jurisdiction over a labor dispute causing or likely to cause a
specifically, as to the matter of compensation. The Union filed a strike or lockout in an industry indispensable to the national
GR 170007. Notice of Strike alleging bad faith bargaining on the part of interest, and decide the same accordingly includes questions
April 7, 2014. J. the company. During the cooling off period, the Union incidental to the labor dispute; that is, issues that are
Leonardo-De Castro conducted the necessary strike vote where it reached a necessarily involved in the dispute itself, and not just to that
unanimous vote in favor of staging a strike. ascribed in the Notice of Strike or otherwise submitted to him
- 377 -
for resolution.
Upon being aware of this development, the company filed a
Petition for Assumption of Jurisdiction with the Secretary of In this case, the labor dispute between the union and the
Labor which the latter granted. company concerned the unresolved matters between the parties
in relation to their negotiations for a new CBA. The power of
The Secretary ruled that the Company is not guilty of the Secretary of Labor to assume jurisdiction over this dispute
bargaining in bad faith and also proceed to decide on the includes and extends to all questions and controversies arising
matter of the wage increase and other economic issues of the from the said dispute, such as, but not limited to the union’s
proposed CBA. The Union questioned the Secretary’s assumption allegation of bad faith bargaining. It also includes and extends
of jurisdiction over the labor dispute on the ground that the to the various unresolved provisions of the new CBA such as
Secretary erred in assuming jurisdiction over the ‘CBA’ case compensation or whether or not there was deadlock in the
when it is not the subject matter of the notice of strike because negotiations.
the case was all about “bargaining in bad faith”.
As there is already an existing controversy on the matter of
Simply put, the Union contends that the Secretary should not wage increase, the Secretary need not wait for a deadlock in
have touched the issue of the CBA as there was no deadlock at the negotiations to take cognizance of the matter. That is the
that time, and should have limited the assumption of jurisdiction significance of the power of the Secretary to assume jurisdiction
to the charge of ULP for bargaining in bad faith. The Union over a labor dispute causing or likely to cause a strike or
refused to recognize the existence of deadlock because the lockout in an industry indispensable to the national interest.
CBA contains a provision requiring the consent of both parties
recognizing that there is indeed a deadlock. It also claimed that Doctrine:
deadlock and ULP through bad faith bargaining cannot co- As a matter of necessity, the Secretary’s authority to assume
exists on the premise that the deadlock presupposes both jurisdiction over a labor dispute causing or likely to cause a
parties are bargaining in good faith. strike or lockout in an industry indispensable to the national
interest, and decide the same accordingly includes questions
Issue/s: incidental to the labor dispute; that is, issues that are
Whether the assumption of jurisdiction of the Secretary is limited necessarily involved in the dispute itself, and not just to that
to the subject matter of the strike. – NO. ascribed in the Notice of Strike or otherwise submitted to him
for resolution.
University of San Agustin Employees’ Facts: Held:

Union-FFW (USAEU-FFW) v Court of Respondent University of San Agustin (University). Petitioner is Yes, Union was remiss in continuing with the strike despite
Appeals the duly recognized collective bargaining unit for teaching and the AJO served and posted by the Sheriff. SC gave credence
non-teaching rank-and-file personnel of the University while to the Sheriff's report unequivocally stating that the union
GR 169632 other individual petitioners are its officers. officers refused to receive the AJO when served the morning of
March 28, 2006 the strike. The Union resolution should not be allowed to
In 2000 parties entered into a 5-year CBA, including economic circumvent the standard operating procedure of the Office of
provisions raising the salary for 3 years. CBA also contained a the Undersecretary for Labor Relations which considers AJOs as
"no strike, no lockout" clause and grievance machinery duly served upon posting of copies thereof on designated
procedure to resolve management-labor disputes, including a places.
voluntary arbitration mechanism should grievance fail to settle
dispute. When the SOLE assumes jurisdiction over a labor dispute in an
industry indispensable to national interest or certifies the same
For year 2004-2005, no agreement was reached in the to the NLRC for compulsory arbitration, such assumption or
negotiations in the manner of computing the Tuition Incremental certification shall have the effect of automatically enjoining the
- 378 -
Proceeds. They went for mediation but to no avail prompting intended or impending strike or lock-out. Moreover, if one had
the Union to declare a bargaining deadlock. Union then filed a already taken place, all striking workers shall immediately
notice of strike before the National Conciliation and Mediation return to work and the employer shall immediately resume
Board (NCMB) opposed by the University citing the No Strike, operations and readmit all workers under the same terms and
No Lockout provision of the CBA. NCMB failed to act conditions prevailing before the strike or lockout.
accordingly and strike went on.
AJO was served at 8:45 a.m. of September 19, 2003. The
September 18, 2003 the Secretary of Labor assumed strikers then should have
jurisdiction over the labor dispute, enjoining any strike or returned to work immediately. However, they persisted with
lockout, ordering cease and desist from such acts. September their refusal to receive the AJO and waited for their union
19, the union staged a strike, the Union vice president refused president to receive the same at 5:25 p.m. The
to receive the Assumption of Jurisdiction Order (AJO) citing that Union’s defiance of the AJO was evident in the sheriff’s report.
under union resolution, only the union president only person
authroized to do so. Sheriff explained that even if she does not The alleged "well settled practice" 24-hour return to work has
receive it, it still is considered as served. Union went ahead with no basis in law nor jurisprudence. NCMB also failed to perform
the Strike despite the posted copies of the AJO. its duty for inaction on the University's motion to refer dispute to
voluntary arbitration which forced the University to submit to the
Union asserts a "well-settled practice" that the SOLE always jurisdiction of the SOLE.
gives twenty-four hours to the striking workers to return to work.
NCMB, under its very own Manual of Procedures in the
SOLE decision dismissed the petition to declare the strike as Settlement and Disposition of Conciliation and Preventive
illegal and resolved the economic issues. Mediation Cases should have declared the motion to strike as
not duly filed since there was a no strike, no lockout provision in
Issue/s: the CBA and referred to voluntary arbitration.
Whether the strike was illegal. - YES
Doctrine:
If a strike has already taken place at the time of assumption of
jurisdiction 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
lock-out.
HSBC EMPLOYEES UNION v NLRC Facts: Held:

GR 156635.
January 11, 2016. The present case started when the Bank announced its Procedural requirement MANDATORY; CANNOT be relaxed
J. Bersamin implementation of a job evaluation program (JEP) with
accompanying salary scale providing for the minimum and The procedural requirements are mandatory, such that
maximum pay the employee could receive per salary level. The noncompliance therewith by the union will render the strike
Union demanded the suspension of JEP which it labeled as ULP. illegal.
The Union without complying with the procedural requirements Petitioners neither filed the notice of strike with the DOLE, nor
staged a concerted action which persisted for eleven (11) observed the cooling-off period, nor submitted the result of the
months. The strike was also attended with illegal activities. strike vote. Moreover, although the strike vote was conducted,
Subsequently, the Bank filed a complaint to declare the strike the same was done by open, not secret, balloting.
illegal. In the meantime, the Bank issued return-to- work notices
- 379 -
to the striking employees. Those who did not comply were

terminated. Accordingly, the petitioners’ plea for the revisit of the doctrine
to the effect that the compliance was mandatory was entirely
The LA declared the strike illegal due to procedural infirmities. unwarranted. It is significant to remind that the doctrine has not
He concluded that because of the illegality of the strike the been established by judicial declaration but by congressional
Union members and officers were deemed to have lost their enactment.
employment status. When the case reached the CA, the decision
was reversed declaring the dismissal of some of the Union Good faith not a defense
members unlawful for failure of the Bank to accord procedural
due process – the twin notice requirement, (1) right to be
informed of the nature of accusation in writing and (2) right to The petitioners’ disregard of the procedural requirements for
explain their side in writing. conducting a valid strike negated their claim of good faith. The
petitioners should entirely bear the consequence of their
noncompliance with the legal requirements.
The appellate court also deleted the award for indemnity and
instead granted backwages.
Wholesale termination unwarranted
ARGUMENT OF THE UNION:
As a general rule, the mere finding of the illegality of the strike
does not justify the wholesale termination of the strikers from
(1) There must be prior showing that the Union members their employment. The responsibility for the illegal strike is
participated in the illegal strike before they could be individual instead of collective.
terminated;
(2) They could not be dismissed on the ground of
insubordination or abandonment of work since their Mere moral support not constitutive of proof of participation
participation in the concerted activity is a constitutional right;
(3) Their participation is out of sincere belief that the Bank The officers may be deemed terminated from their employment
committed ULP, hence, in good faith. upon a finding of their knowing participation in the illegal
(4) The Court must revisit the doctrine to the effect that the strike, but the members of the union shall suffer the same fate
compliance with the procedural requirement would render the only if they are shown to have knowingly participated in the
strike illegal. commission of illegal acts during the strike.
ARGUMENT OF THE BANK: Mere extending of moral support to the strikers does not
constitute proof of participation in the strike absence of a
At this juncture, the concern of the Bank is only with respect to showing of any overt participation by him in the illegal strike.
the declaration that the dismissal of some of the Union members Fermin, one of the Union officer, was not present throughout the
are illegal. For their part, the refusal to comply with the return- strike. Therefore, he should not be deemed to have lost its
to-work order is a just cause for termination. employment status.
Constitutional right cannot be defeated by employer’s directive

Issue/s:
Employees right to exercise their right to concerted activities
1. Whether the strike is illegal. – YES. should not be defeated by the directive of the Bank for them to
2. If so, whether the dismissal of the Union members are report back to work. Any worker who joined the strike did so
validly effectuated. – NO. precisely to assert or improve the terms and conditions of his
work. Otherwise, the mere expediency of issuing the return to
work memorandum could suffice to stifle the constitutional right
- 380 -
of labor to concerted actions. Such practice would vest in the

employer the functions of a strike breaker.
Union should be accorded Procedural due process
While the Labor Code authorizes the termination of the union

officers and employees, it does not remove from the employees
their right to due process. Regardless of their actions during the
strike, the employees remain entitled to an opportunity to
explain their conduct and why they should not be penalized.
Authorizes the termination of the union officers and employees,

it does not remove from the employees their right to due
process. Regardless of their actions during the strike, the
employees remain entitled to an opportunity to explain their
conduct and why they should not be penalized.
The return-to-work order did not fully apprise the strikers of the
ground under the Labor Code that they had supposedly
violated. It also thereby deprived them the ample opportunity
to explain and justify their actions. The second notice merely
ratified the hasty and unilateral decision to terminate the
petitioners without the benefit of a notice and hearing. Hence,
this notice should be struck down for having violated the right of
the affected employees to due process.
Illegal strikers not entitled to backwages, but only to Nominal

Damages
The award of backwages is subject to the settled policy that

when employees voluntarily go on strike, no backwages during
the strike shall be awarded.
As regards reinstatement, the lapse of 22 years since the strike
now warrants the award of separation pay in lieu of
reinstatement, the same to be equivalent of one (1) month for
every year of service.
The employer should be nonetheless liable for noncompliance

with procedural due process by paying indemnity in the form of
nominal damages amounting to P30,000. (Agabon Doctrine –
under this principle, even if there is a just cause for termination
but the employer failed to observed procedural due process,
nominal damages shall lie.)
Doctrine:
- 381 -
The procedural requirements are mandatory, such that

noncompliance therewith by the union will render the strike
illegal.
While the Labor Code authorizes the termination of the union

officers and employees, it does not remove from the employees
their right to due process. Regardless of their actions during the
strike, the employees remain entitled to an opportunity to
explain their conduct and why they should not be penalized.
PMI FACULTY AND EMPLOYEES UNION Facts: Held:

v PMI COLLEGES The Union filed a Notice of Strike against the PMI on grounds of There was a substantial compliance in the cooling-off period
gross violation of CBA. The Secretary certified the dispute to the
GR 211526. NLRC for compulsory arbitration. The Union filed a second
June 29, 2016. The declaration of the strike a day before the completion of the
notice of strike allegedly over the same CBA violation. PMI filed cooling-off and strike vote periods was but a reaction to PMI’s
J. Brion a motion to dismiss the petition and to refer the same to locking out the officers and members of the Union.
voluntary arbitration claiming that the Union failed to exhaust
administrative remedies before resorting to a 2nd notice of
strike. The Union does not deny that it staged the strike on the 21st
day after the filing of the strike notice and the submission of the
strike vote, a day earlier than the 22 days required by law (15
The Union alleged that while waiting for the expiration of the days strike notice, plus 7 days strike vote period).
15day cooling-off period and/or the completion of the 7- day
strike vote period, its members religiously reported for duty. On
the last day of the cooling-off and strike vote periods, the Union It, however, maintained that it was left with no choice but to go
officers and members reported for work but they were on strike a day earlier because the respondent had barred its
allegedly not allowed entry to the school premises. officers and members from entering the school premises. The
Court found no reason for the officers to throw away all their
preparations for a lawful strike on the very last day, had they
In protest of what it considered a lockout by the PMI, the Union not been pushed to act by the respondent’s closing of the gates
staged a strike on the same day. PMI reacted with a Petition to
Declare the Strike Illegal, also filed on the same day. The
Secretary assumed jurisdiction over the dispute through an Video footage cannot be given credence
order and directed the strikers to return to work, and the school
to resume operations. All doubts in the implementation and interpretation of the
provisions of this Code, including its implementing rules and
The LA considered the staging of the strike one day earlier not regulations, shall be resolved in favor of labor. This principle
sufficient for a declaration of illegality as the Union were has been extended by jurisprudence to cover doubts in the
illegally locked out. The NLRC reversed found the strike to be evidence presented by the employer and the employee.
illegal for having failed to comply with the requisites of a valid
strike. Thus, the Union officers serving and acting as such during The much belated submission of the video footage puts in
the period of the illegal strike are deemed to have lost their question the authenticity and, therefore, the credibility of the
employment status. The NLRC was not persuaded by the Union’s footage. Why was the footage not presented to the labor
claim that its premature strike was precipitated by PMI’s refusal arbiter, considering that the respondent reserved the right to
to admit the members and officers of the Union inside the school adduce additional evidence, documentary and testimonial, in
premises when they reported for work. It also allowed the the resolution of the case? Why did it take more than a year to
presentation of a CD containing a video where it was showed present it when the footage was taken on the first day of the
- 382 -
that the entry and exit of the school premises did not appear to strike? The inordinate delay in the submission of the compact
be restricted. Note that this video was presented in the NLRC disc cannot but generate negative speculations on why it took
proceedings 15 months after the alleged lock-out. Neither it so long for the respondent to introduce it in evidence.
was examined by the Union.
Doctrine:
The CA dismissed the appeal of the Union purely on technical There was a substantial compliance in the cooling-off period The
grounds. declaration of the strike a day before the completion of the
cooling-off and strike vote periods was but a reaction to PMI’s
Issue/s: locking out the officers and members of the Union.
1. Whether the strike is valid despite falling short of one
day before the cooling off period expires. – YES.
2. Whether the video footage is a credible proof. – NO.
GUAGUA NATIONAL COLLEGES v Facts: Held:
GUAGUA NATIONAL COLLEGES
FACULTY LABOR UNION
The Union filed a Notice of Strike on the ground of ULP due to The Secretary correctly certified the dispute for compulsory
GR 204693. bargaining in bad faith on the part of the management arbitration
July 13, 2016. following its series of attempt to delay the signing of the new
J. Del Castillo CBA. This is so because of the management’s noncommittal It is settled that a “no strike, no lockout” provision in the CBA
attitude towards the negotiation of the CBA and its attempt to may only be invoked by an employer when the strike is
deprived employees of the existing benefits. economic in nature or one which is conducted to force wage or
other agreements from the employer that are not mandated to
The Management moved to dismiss the notice of strike and refer be granted by law. It is NOT applicable when the strike is
the dispute to the grievance machinery and voluntary grounded on unfair labor practice.
arbitration pursuant to their “no strike, no lockout” policy in the
existing CBA. It argued that bad faith bargaining, violation of Here, while respondents enumerated four grounds in their notice
duty to bargain, and gross violations of CBA all come within the of strike, the facts of the case reveal that what primarily
definition of “grievance” under their CBA. impelled them to file said notice was their perception of bad
faith bargaining and violation of the duty to bargain
Since the NCMB had not yet acted on the motion of the collectively by the management – charges which constitute ULP.
Company, it urged the Secretary of Labor to assume jurisdiction
over the dispute which the latter granted. The Secretary The Union cannot be faulted into believing that the
certified the case for compulsory arbitration. management was bargaining in bad faith and had no genuine
intention to comply with its duty to bargain collectively since it
It is in this juncture that the management argued that while they denied arriving at an agreement with the Union not once but
requested for the Secretary to assume jurisdiction, it stressed twice. This belief in good faith prompted them to file a notice of
that its participation in the compulsory arbitration proceeding strike. Clearly, respondents’ intention was to protest what they
should therefore not be construed as a waiver of its position perceived to be acts of ULP on the part of the management
that jurisdiction over the dispute rests with the voluntary through the exercise of their right to strike enshrined in the
arbitrator in view of the parties’ agreement in the CBA. Constitution and not to circumvent the “no strike, no lockout”
clause and the grievance machinery and voluntary arbitration
The management opined that Union circumvent the CBA and provision of the CBA.
their agreement to resolve conflicts through voluntary
arbitration by the simple [expedient] of filing a notice of strike. Jurisdiction of voluntary arbitrator
- 383 -
FURTHER ARGUMENT OF THE MANAGEMENT: Only disputes arising from interpretation or implementation of
the parties’ CBA, or from the interpretation or enforcement of
Although not expressly mentioned, the CBA contained a “catch- company personnel policies fall within the original and exclusive
all provision” that “all other dispute” shall be referred to the jurisdiction of the voluntary arbitrator or panel of voluntary
grievance machinery or voluntary arbitration. arbitrators.
The NLRC upheld its jurisdiction. It ruled that their authority does
not include the power to amend the Secretary’s Order. To
accede to a referral of the labor dispute to the grievance Special class of disputes must be Expressly stipulated
machinery and ultimately to voluntary arbitration is equivalent
to amending said Order. With respect to the merits of the case, While the phrase “all other labor dispute” or its variant “any
it found that the totality of the conduct of the management other matter or dispute” may include unfair labor practices, it is
reeks of bad faith. The NLRC also held that the management imperative, however, that the agreement between the union
failed to abide by its duty to the Secretary’s order to maintain and the company states in unequivocal language that the
the status quo and to continue in full force and effect the terms parties conform to the submission of unfair labor practices to
and conditions of their existing agreement when it withdrew the voluntary arbitration.
employee’s benefits. The CA affirmed the same.
There is a need for an express stipulation in the CBA that unfair
Issue/s: labor practices should be resolved in the ultimate by the
Whether the subject labor dispute should have been ordered voluntary arbitrator or panel of voluntary arbitrators since the
submitted to voluntary arbitration by the Secretary of Labor same fall within a special class of disputes that are generally
and Employment pursuant to the parties’ CBA and not certified within the exclusive original jurisdiction of the Labor Arbiter by
to the NLRC for compulsory arbitration. express provision of the law.
Absent such express stipulation, the phrase ‘all disputes’ [or “any
other matter or dispute” for that matter] should be construed as
limited to the areas of conflict traditionally within the jurisdiction
of Voluntary Arbitrators, i.e.,
(a) disputes relating to contract interpretation,

(b) contract implementation, or
(c) interpretation or enforcement of company personnel
policies. [Unfair labor practices cases]
— not falling within any of these categories — should then be
considered as a special area of interest governed by a specific
provision of law.
Doctrine:
Only disputes arising from interpretation or implementation of
the parties’ CBA, or from the interpretation or enforcement of
company personnel policies fall within the original and exclusive
jurisdiction of the voluntary arbitrator or panel of voluntary
arbitrators.
- 384 -

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LABOR LAW REVIEW – JD4202 (2020)

Atty. Ryan Jeremiah Quan

Issue: Whether or not Petitioners are regular

"Live on Five." On September 30, 1999, after four status.

[Doctrine] According to jurisprudence, we said that

The “power of control” was defined as “[the] right

As to how the elements in the four-fold test are

Identification cards, cash vouchers, social security

If the employee has been performing the job for

As cameramen/editors and reporters, it appears

regular business of the employer and when the

ABS-CBN directly paid SONZA his monthly

All the talent fees and benefits paid to

SONZA were the result of negotiations that

SONZA’s talent fees, amounting to ₱317,000

The payment of talent fees directly to SONZA

For violation of any provision of the

During the life of the Agreement, ABS-CBN

SONZA admits that even after ABS-CBN

SONZA assails the Labor Arbiter’s

as an admission that he is not an employee of

Since there is no local precedent on whether a

Several factors favor classifying Alberty

and modeling; taught with the drama

Third, WIPR could not assign Alberty

specifically provided that WIPR hired

Applying the control test to the present case,

First, SONZA contends that ABS-CBN exercised

SONZA’s argument is misplaced. ABS-CBN

The Agreement required SONZA to attend only

We find that ABS-CBN was not involved in the

SONZA claims that ABS-CBN’s power not to

broadcast SONZA’s show but ABS-CBN must

Clearly, ABS-CBN’s right not to broadcast

In Vaughan, et al. v. Warner, et al., the United

SONZA further contends that ABS-CBN

programs. However, the equipment, crew and

A radio broadcast specialist who works under

Second, SONZA urges us to rule that he was

The Agreement stipulates that SONZA shall

CBN. The code of conduct imposed on SONZA

In any event, not all rules imposed by the hiring

Further, not every form of control that a party

Logically, the line should be drawn

between rules that merely serve as

The Vaughan case also held that one could still

Lastly, SONZA insists that the "exclusivity

This argument is futile. Being an exclusive talent

The hiring of exclusive talents is a widespread

and accepted practice in the entertainment

employees of the PBA. Their respective contracts of

[Doctrine] The line should be drawn between rules

Logically, the line should be drawn between rules

Consulta failed to show that she had to report for

Finally, Pamana paid Consulta not for labor she

[Doctrine] Court explained the scope of the power

reserves to himself over the conduct of the party

the complaint. such power.

The complainant is a Doctor of Medicine, and

presumably, a well-educated person. Yet, the

The labor arbiter added the indicia, not disputed by

Clearly, the elements of an employer-employee

monthly professional fees. It simply runs against the