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University of Cebu Cebu College of Law UCLASS Bar Operations Labor Law Society

LABOR LAW BAR NOTES 2012


by: Chairperson: Aubrey Mae M. Paronda Members: Hermelito Bulala Rilven Christian Virtudazo Camille Bono Vincent Isles Jaime Bernardo Tumulak

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References: Law Textbooks, Codes, Reviewers, Notes, Compilations, Articles and Internet Sources

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Section 10. The State shall promote social justice in all phases of national development.

I: FUNDAMENTAL PRINCIPLES AND POLICIES The following are the topics covered: 1. Definition and Classification 2. Constitutional Provisions on Labor 3. Civil law provisions on labor 4. The Labor Code I. Fundamental Principles and Policies 1. Definition: Labor Law is the law governing the rights and duties of the employer and employees: a. with respect to the terms and conditions, and b. with respect to labor disputes arising from collective bargaining respecting terms and conditions Classification: a. Labor Legislation/Welfare Legislation is intended to benefit all persons not only workers. It provides benefits in case of contingencies or for other needs in order that we may have decent and adequate living. b. Labor Standards Law sets out the minimum terms, conditions, and benefits of employment, which employers must provide or comply with and to which the employees are entitled to as a matter of legal right. c. Labor Relations Law defines the status, rights, duties and the Institutional mechanisms that govern the individual and collective interactions of employers, employee's or their representatives. d. It intends to stabilize the relations of the employee's and their employers, adjust differences between them through the encouragement of collective bargaining, and settle labor disputes through conciliation, mediation and arbitration. 2. Constitutional Provisions on Labor:
Article II Declaration of Principles and State Policies Section 9. The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.

Section 11. The State values the dignity of every human person and guarantees full respect for human rights. Section 13. The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs. Section 14. The State recognizes the role of women in nationbuilding, and shall ensure the fundamental equality before the law of women and men. Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare. Section 20. The State recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to needed investments.

a. General Definition: i. Social Justice is "neither communism, nor despotism, nor atomism, nor anarchy," but the Humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated. Social justice means the promotion of the welfare of all the people, the adoption by the Government of measures calculated to insure economic stability of all the competent elements of society, through the maintenance of a proper economic and social equilibrium in the interrelations of the members of the community, constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally, through the exercise of powers underlying the existence of all governments on the time-honored principle of salus populi est suprema lex. (Calalang vs. Williams, 70 Phil. 726 [1940]) Welfare State concept is found in the constitutional clause on the promotion of social justice to ensure the well-being and economic security of all the people, as well as the pledge of protection to labor with the specific authority to regulate the relations between landowners and tenants and between labor and capital. (Alalayan vs. National Power Corporation, 24 SCRA 172 [1968]) Limits of Social Justice. Social Justice should be used only to correct an injustice. As the eminent Justice Jose P. Laurel observed, social justice must be founded on the recognition of the necessity of interdependence among diverse units of a society and of the protection

ii.

iii.

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Liberty of Contract/Laissex Faire. The prohibition to impair the obligation of contracts is not absolute and unqualified. In spite of the constitutional prohibition and the fact that both parties are of full age and competent to contract does not necessarily deprive the State of the power to interfere where the parties do not stand upon equality, or where the public health demands that one party to the contract shall be protected against himself. (Leyte Land Transportation Company, Inc. vs Leyte Farmers and Laborers Union, G.R. No. L-1377, May 12, 1948) The Constitution is primarily a document of social justice, and although it has recognized the importance of the private sector, it has not embraced fully the concept of laissez faire or otherwise, relied on pure market forces to govern the economy (Employers Confederation of the Philippines vs. National Wages and Productivity Commission, G.R. No. 96169, September 24, 1991)
Article III Bill of Rights: Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws. Section 4. No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the government for redress of grievances. Section 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged.

that should be equally and evenly extended to all groups as a combined force in our social and economic life. As interdependent and indispensable partners in nation-building, labor and management need each other to foster productivity and economic growth; hence, the need to weigh and balance the rights and welfare of both the employee and employer. (Agabon vs NLRC, G.R. No. 158693, November 17, 2004) b. Social Justice and Human Rights: N.B.: i. it is incorrect to say that self-organization is limited in purpose to CBA. ii. it is incorrect to say that ambulant, intermittent and itinerant workers, self-employed people, rural workers and those without any definite employers [who may form labor organizations for their mutual aid and protection] do not have the right to self-organization. They too are covered by the injunction that It shall be unlawful for any person to restrain, coerce, discriminate against or unduly interfere with (said) employees in their exercise of the right to self-organization. (at least on concerted activities) Self-organization is a fundamental right guaranteed by the Philippine Constitution and the Labor Code. Employees have the right to form, join or assist labor organizations for the purpose of collective bargaining or for their mutual aid and protection. The constitutional right to selforganization is better understood in the context of ILO Convention No. 87 (Freedom of Association and Protection of Right to Organize), to which the Philippines is a signatory. (UST Faculty Union v. Bitonio, Jr., G.R. No. 131235, November 16, 1999, 318 SCRA 185) Workers and employers, without distinction whatsoever, shall have the right to establish and, subject only to the rules of the organization concerned, to job organizations of their own choosing without previous authorization; (Standard Chartered Bank Employees Union (NUBE) v. Confesor, G.R. No. 114974, June 16, 2004, 432 SCRA 308, 320-321) and that workers' organizations shall have the right to draw up their constitution and rules and to elect their representatives in full freedom, free from any interference from public authorities. (UST Faculty Union v. Bitonio, Jr., supra)

c. Due Process: Under the Labor Code, as amended, the requirements for the lawful dismissal of an employee by his employer are two-fold: the substantive and the procedural. Not only must the dismissal be for a valid or authorized cause as provided by law (Articles 279, 281, 282-284, New Labor Code), but the rudimentary requirements of due process notice and hearing must also be observed before an employee may be dismissed. One does not suffice; without their concurrence, to terminate would, in the eyes of the law, be illegal. (Salaw vs. NLRC, G.R. No. 90786 September 27, 1991) d. Labor as Property Right: One's employment, profession, trade or calling is a "property right", and the wrongful interference therewith is an actionable wrong. The right is considered to be property within the protection of a constitutional guaranty of due process of law.

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justice in favor of labor, it is but a recognition of the inherent economic inequality between labor and management. The intent is to balance the scale of justice; to put the two parties on relatively equal positions. There may be cases where the circumstances warrant favoring labor over the interests of management but never should the scale be so tilted if the result is an injustice to the employer. (Phil. Geothermal Inc. vs. NLRC, G.R. No. 106370 September 8, 1994) 2. This Court held that the employers right to conduct the affairs of his business, according to its own discretion and judgment, is wellrecognized. An employer has a free reign and enjoys wide latitude of discretion to regulate all aspects of employment, including the prerogative to instill discipline in its employees and to impose penalties, including dismissal, upon erring employees. This is a management prerogative, where the free will of management to conduct its own affairs to achieve its purpose takes form. (Torreda vs. Toshiba, G.R. No. 165960, February 8, 2007) 3. But, like other rights, there are limits thereto. The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which the right is exercised. (Tinio vs. CA, G.R. No. 171764, June 8, 2007) 3. Civil Law Provision on Labor:
Article 1700. The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.

(Sibal vs. Notre Dame of Greater Manila, G.R. No. 75093 February 23, 1990)
Article XIII: Section 1. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments. Section 2. The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance. Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace. The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns to investments, and to expansion and growth. Section 14. The State shall protect working women by providing safe and healthful working conditions, taking into account their maternal functions, and such facilities and opportunities that will enhance their welfare and enable them to realize their full potential in the service of the nation.

e. Participation in Decision-Making Process: Verily, a line must be drawn between management prerogatives regarding business operations per se and those which affect the rights of the employees. In treating the latter, management should see to it that its employees are at least properly informed of its decisions or modes action. Indeed, industrial peace cannot be achieved if the employees are denied their just participation in the discussion of matters affecting their rights. (PAL vs. NLRC, G.R. No. 85985 August 13, 1993) f. Management and the Constitution: Management Function/Prerogative: 1. The law in protecting the rights of the employees authorizes neither oppression nor self-destruction of the employer. It should be made clear that when the law tilts the scale of

a.

Contracts. And under the Civil Code, contracts of labor are explicitly subject to the police power of the State because they are not ordinary contracts but are impressed with public interest.[20]Inasmuch as in this particular instance the contract is question would have been deemed in violation of pertinent labor laws, the provisions of said laws would prevail over the terms of the contract, and private respondent would still be entitled to overtime pay. (PAL Employees Savings and Loan Assn., Inc. vs. NLRC, G.R. No. 105963., August 22, 1996)

b. Fair Treatment. The employer's right to dismiss his employee, however, differs from, and should not be confused with the manner in

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To foster the free and voluntary organization of a strong and united labor movement; To promote the enlightenment of workers concerning their rights and obligations as union members and as employees; To provide an adequate administrative machinery for the expeditious settlement of labor or industrial disputes; To ensure a stable but dynamic and just industrial peace; and To ensure the participation of workers in decision and policymaking processes affecting their rights, duties and welfare. To encourage a truly democratic method of regulating the relations between the employers and employees by means of agreements freely entered into through collective bargaining, no court or administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work or other terms and conditions of employment, except as otherwise provided under this Code. (As amended by Section 3, Republic Act No. 6715, March 21, 1989)

which the right is exercised. It must not be oppressive and abusive since it affects ones person and property. (General Bank and Trust Co. vs. CA, G.R. No. L-42724, April 9, 1985) c. Mutual Obligation. The employer's obligation to give his workers just compensation and treatment carries with it the corollary right to expect from the workers adequate work, diligence and good conduct. (Firestone Tire and Rubber Company of the Philippines vs. Lariosa, G.R. No. 70479, February 27, 1987)

d. Compliance with Law. It is also important to emphasize that the return-to-work order not so much confers a right as it imposes a duty; and while as a right it may be waived, it must be discharged as a duty even against the worker's will. ( People vs. Tuico, G.R. No. 75271-73 June 27, 1988) e. Employees compliance and obedience to the employers orders. The lack of a written or formal designation should not be an excuse to disclaim any responsibility for any damage suffered by the employer due to his negligence. The measure of the responsibility of an employee is that if he performed his assigned task efficiently and according to the usual standards, then he may not be held personally liable for any damage arising therefrom. Failing in this, the employee must suffer the consequences of his negligence if not lack of due care in the performance of his duties. (PCIB vs. Jacinto, G.R. No. 92742, May 6, 1991)

Article 212 . Definitions: "Commission" means the National Labor Relations Commission or any of its divisions, as the case may be, as provided under this Code. "Bureau" means the Bureau of Labor Relations and/or the Labor Relations Divisions in the regional offices established under Presidential Decree No. 1, in the Department of Labor. "Board" means the National Conciliation and Mediation Board established under Executive Order No. 126. "Council" means the Tripartite Voluntary Arbitration Advisory Council established under Executive Order No. 126, as amended. "Employer" includes any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers or agents except when acting as employer. "Employee" includes any person in the employ of an employer. The term shall not be limited to the employees of a particular employer, unless the Code so explicitly states. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment. "Labor organization" means any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment. "Legitimate labor organization" means any labor organization duly registered with the Department of Labor and Employment, and includes any branch or local thereof. "Company union" means any labor organization whose formation, function or administration has been assisted by any act defined as unfair labor practice by this Code. "Strike-breaker" means any person who obstructs, impedes, or interferes with by force, violence, coercion, threats, or intimidation any peaceful picketing affecting wages, hours or conditions of work or in the exercise of the right of selforganization or collective bargaining. "Strike area" means the establishment, warehouses, depots, plants or offices, including the sites or premises used as runaway shops, of the employer struck against, as well as the immediate

4. The Labor Code


Article 3. Declaration of basic policy: The State shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed and regulate the relations between workers and employers. The State shall assure the rights of workers to selforganization, collective bargaining, security of tenure, and just and humane conditions of work. Article 211. Declaration of Policy: It is the policy of the State: To promote and emphasize the primacy of free collective bargaining and negotiations, including voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes; To promote free trade unionism as an instrument for the enhancement of democracy and the promotion of social justice and development

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vicinity actually used by picketing strikers in moving to and fro before all points of entrance to and exit from said establishment. (As amended by Section 4, Republic Act No. 6715, March 21, 1989) Article 255. Exclusive bargaining representation and workers participation in policy an d decision-making: The labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual employee or group of employees shall have the right at any time to present grievances to their employer. Any provision of law to the contrary notwithstanding, workers shall have the right, subject to such rules and regulations as the Secretary of Labor and Employment may promulgate, to participate in policy and decision-making processes of the establishment where they are employed insofar as said processes will directly affect their rights, benefits and welfare. For this purpose, workers and employers may form labor-management councils: Provided, That the representatives of the workers in such labor-management councils shall be elected by at least the majority of all employees in said establishment. (As amended by Section 22, Republic Act No. 6715, March 21, 1989)

The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of workers. Any of the acts mentioned in the basic rule in Article 13(b) win constitute recruitment and placement even if only one prospective worker is involved. The proviso merely lays down a rule of evidence that where a fee is collected in consideration of a promise or offer of employment to two or more prospective workers, the individual or entity dealing with them shall be deemed to be engaged in the act of recruitment and placement. (People vs. Panis, 142 SCRA 664, 1986). .

Principle of Codetermination: It is a joint responsibility of the employer and the employee to establish terms and conditions of employment. In establishing such terms and conditions of employment, the employer and the employee must take into consideration existing laws and regulations.
Study Guide Questions: 1. What is labor law and what does it aim to achieve? 2. What are the constitutional mandates pertaining to labor and labor-management relations? 3. Do Philippine labor laws meet international labor standards? 4. Are Philippine labor laws pro-labor?

II.RECRUITMENT AND PLACEMENT The following are the topics covered: 1. Recruitment of Local and Migrant Workers 2. Regulation and Enforcement II. Recruitment and Placement: 1. Recruitment of Local and Migrant Workers: a. Recruitment and Placement; defined:
Labor Code, Article 13 (b) "Recruitment and placement" refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not: Provided, That any person or entity which, in any manner, offers or promises for a fee, employment to two or more persons shall be deemed engaged in recruitment and placement.

The Court finds that accused-appellant was engaged in unlawful recruitment and placement activities. The prosecution clearly established that accused-appellant promised the three complainants - Benny Maligaya, Angeles Javier and Leodigario Maullon employment in Taiwan as factory workers and that he asked them for money in order to process their papers and procure their passports. Relying completely upon such representations, complainants entrusted their hard-earned money to accused-appellant in exchange for what they would later discover to be a vain hope of obtaining employment abroad. It is not disputed that accused-appellant is not authorized[11] nor licensed by the Department of Labor and Employment to engage in recruitment and placement activities. The absence of the necessary license or authority renders all of accused-appellants recruitment activities criminal. (People vs. Saulo, G.R. No. 125903., November 15, 2000) .

i.

It should be noted that the definition of recruitment and placement in Art. 13(b), does not make any of the eleven (11) acts enumerated therein illegal per se. What makes it a case of illegal recruitment is when any of said recruitment activities are undertaken by non-licensees or nonholders of authority. [Art. 38(a)] Such that an employee, who introduces an applicant to owner-employer agency, committed an act of referral, a recruitment activity. There is an illegal recruitment when one gives the impression of having the ability to send a

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d. Illegal Recruitment, Article 38(Local), Sec. 6, Migrant Workers Act, RA 8042: Illegal Recruitment; defined:
Labor Code, Article 38 (a) Any recruitment activities, including the prohibited practices enumerated under Article 34 of this Code, to be undertaken by non-licensees or non-holders of authority, shall be deemed illegal and punishable under Article 39 of this Code. The Department of Labor and Employment or any law enforcement officer may initiate complaints under this Article. For definition of recruitment activities, see Article 13 (b) For definition of prohibited practices, see Article 24

ii.

iii.

worker abroad. (People vs. Goce, 247 SCRA 780, 789 (1995)) A non-licensee means a person, corporation or entity to which the labor secretary has not issued a valid license or authority to engage in recruitment and placement; or whose license or authority has been suspended, revoked, or cancelled by the POEA or the labor secretary. A licensee authorizes a person or an entity to operate a private employment agency, while authority is given to those engaged in recruitment and placement activities. (Rodolfo vs. People, G.R. No. 146964, August 10, 2006) When a person or entity, in any manner, offers or promises for a fee employment to two or more persons, that person or entity shall be deemed engaged in recruitment and placement. (People vs. Laogo, G.R. No. 176264, January 10, 2011) b. Act of referral: The act of referral, which is included in recruitment, is "the act of passing along or forwarding of an applicant for employment after an initial interview of a selected applicant for employment to a selected employer, placement officer or bureau." Petitioners admission that she brought private complainants to the agency whose owner she knows and her acceptance of fees including those for processing betrays her guilt. (Rodolfo vs. People, G.R. No. 146964, August 10, 2006) c. Presence of elements of crime:

Migrant Workers and Overseas Filipino Act of 1995 (RA 8042), Section 6:
Migrant Workers and Overseas Filipino Act of 1995 (RA 8042), Section 6 For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, procuring workers and includes referring, contact services, promising or advertising for employment abroad, whether for profit or not, when undertaken by a non-license or non-holder of authority contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines. Provided, that such non-license or non-holder, who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be deemed so engaged.

RA No. 10022, an act amending Migrant Workers and Overseas Filipino Act of 1995 (RA 8042):
RA No. 10022, an act amending Migrant Workers and Overseas Filipino Act of 1995 (RA 8042) Section 5. For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or advertising for employment abroad, whether for profit or not, when undertaken by nonlicensee or non-holder of authority contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines: Provided, That any such non-licensee or non-holder who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be deemed so engaged. It shall likewise include the following acts, whether committed by any person, whether a nonlicensee, non-holder, licensee or holder of authority

In December 1996, LCL had no approved POEA license to recruit. C.F. Sharps accreditation as LCLs new manning agency was still pending approval, yet it entertained applicants for LCLs vessels, and conducted interviews. According to Art. 13 (b) of the Labor Code, the conduct of preparatory interviews is a recruitment activity. The fact that C.F. Sharp did not receive any payment during the interviews is of no moment. From the language of Article 13(b), the act of recruitment may be "for profit or not." Notably, it is the lack of the necessary license or authority, not the fact of payment, that renders the recruitment activity of LCL unlawful. (C.F. Sharp Crew Management, Inc. vs. Espanol, G.R. No. 155903, September 14, 2007)

License vs. Authority:


Labor Code, Article 13 (d) License means any document issued by the Department of Labor authorizing a person or entity to operate a private employment agency. (f) "Authority" means a document issued by the Department of Labor authorizing a person or association to engage in recruitment and placement activities as a private recruitment entity

. .

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Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers, RECRUITMENT AND PLACEMENT And includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not. Document issued by DOLE authorizing a person/entity to operate a private feecharging agency [Art. 13(c) and (d), LC] Document authorizing a person/association to engage in recruitment and placement activities as a private recruitment entity, i.e., not for a fee. [Art. 13(f)]

A non-licensee means a person, corporation or entity to which the labor secretary has not issued a valid license or authority to engage in recruitment and placement; or whose license or authority has been suspended, revoked, or cancelled by the POEA or the labor secretary. A licensee authorizes a person or an entity to operate a private employment agency, while authority is given to those engaged in recruitment and placement activities. [Rodolfo vs. People, G.R. No. 146964, August 10, 2006]

LICENSE

When a person or entity, in any manner, offers or promises for a fee employment to two or more persons, that person or entity shall be deemed engaged in recruitment and placement. [People vs. Laogo, G.R. No. 176264, January 10, 2011, Villarama, J.]

AUTHORITY

Essential elements of illegal recruitment:

When offender is a non-holder of authority a. It should be noted that the definition of recruitment and placement in Art. 13(b), does not make any of the eleven (11) acts enumerated therein illegal per se. What makes it a case of illegal recruitment is when any of said recruitment activities are undertaken by non-licensees or nonholders of authority. [Art. 38(a)] Such that an employee, who introduces an applicant to owneremployer agency, committed an act of referral, a recruitment activity. There is an illegal recruitment when one gives the impression of having the ability to send a worker abroad. [People vs. Goce, 247 SCRA 780, 789 (1995)]. The offender is a non-holder of authority to lawfully engage in recruitment and placement of workers. b. Offender undertakes any of the infractions in Article 13 (b) in the Labor Code, Section 6 of RA 8042 and Section 5 of RA 10022. When offender is a holder of authority 1. The offender is a holder of authority to lawfully engage in recruitment and placement of workers. 2. Offender undertakes any of the infractions in Section 6 of RA 8042 and Section 5 of RA 10022.

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Simple Illegal Recruitment:
Labor Code, Article 13 There is illegal recruitment when a non-holder of a license commits the following acts: 1. canvassing, 2. enlisting, 3. contracting, 4. transporting, 5. utilizing, 6. hiring or 7. procuring workers 8. referrals, 9. contract services, 10. promising or 11. advertising for employment, locally or abroad,

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"(h) To fail to submit reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor and Employment; "(i) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the Department of Labor and Employment; "(j) For an officer or agent of a recruitment or placement agency to become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of travel agency; "(k) To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations, or for any other reasons, other than those authorized under the Labor Code and its implementing rules and regulations; "(l) Failure to actually deploy a contracted worker without valid reason as determined by the Department of Labor and Employment; "(m) Failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of deployment, in cases where the deployment does not actually take place without the worker's fault. xxx; and "(n) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning agency.

Illegal recruitment may be committed when a non-licensee or a non-holder of authority performs any of the 11 acts of recruitment and placement under Art. 13(b) of the Labor Code. While Art. 34 makes a distinction between: 1. Prohibited practices when committed by a licensee or holder of authority; and 2. Illegal recruitment when such prohibited practices were committed by a non-licensee or non-holder of authority.

A non-licensee can be guilty of 24 illegal recruitment acts: 1. 11 acts under Art. 13(b) 2. 14 illegal recruitment acts under Sec. 5, RA 10022 3. A licensee can be liable only for 14 illegal recruitment/prohibited acts (under Sec. 5, RA 1022), UNLESS he conspires with a non-licensee in the commission of any of the illegal acts in Art. 13(b).

RA No. 10022, an act amending Migrant Workers and Overseas Filipino Act of 1995 (RA 8042):
Section 5. xxx It shall likewise include the following acts, whether committed by any persons, whether a non-licensee, non-holder, licensee or holder of authority. "(a) To charge or accept directly or indirectly any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to make a worker pay or acknowledge any amount greater than that actually received by him as a loan or advance; "(b) To furnish or publish any false notice or information or document in relation to recruitment or employment; "(c) To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under the Labor Code, or for the purpose of documenting hired workers with the POEA, which include the act of reprocessing workers through a job order that pertains to nonexistent work, work different from the actual overseas work, or work with a different employer whether registered or not with the POEA; "(d) To include or attempt to induce a worker already employed to quit his employment in order to offer him another unless the transfer is designed to liberate a worker from oppressive terms and conditions of employment; "(e) To influence or attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency or who has formed, joined or supported, or has contacted or is supported by any union or workers' organization; "(f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines;

Employees/Other Officers Liabilities: In People vs. Cabais, an employee of a company or corporation engaged in illegal recruitment may be held liable as principal, together with his employer, if it is shown that he actively and consciously participated in illegal recruitment. Moreover, in this case the appellant was both the APSC VicePresident-Treasurer and the Assistant General Manager. She was a high corporate officer who had direct participation in the management, administration, direction and control of the business of the corporation, and is thus liable under Section 6 of RA 8042. The terms "control, management or direction" used in the last paragraph of Section 6 of Republic Act No. 8042 broadly cover all phases of business operation. They include the aspects of administration,

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marketing and finances, among others. (People vs. Sagayaga, G.R. No. 143726, February 23, 2004) Illegal Recruitment in large scale:

Illegal recruitment is a matter of evidence. (People vs. Panis, 142 SCRA 664 (1986))

Labor Code, Article 38 b. Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage and shall be penalized in accordance with Article 39 hereof. c. Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction, enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons individually or as a group. RA No. 10022, an act amending Migrant Workers and Overseas Filipino Act of 1995 (RA 8042) m. xxx Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage; xxx "Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring or confederating with one another. It is deemed committed in large scale if committed against three (3) or more persons individually or as a group.

Illegal recruitment as economic sabotage:


Labor Code, Article 38 b. Illegal recruitment when committed 3. by a syndicate or 4. in large scale shall be considered an offense involving economic sabotage and shall be penalized in accordance with Article 39 hereof. c. Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction, enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons individually or as a group.

Illegal recruitment vs. Estafa:


Revised Penal Code Art. 315. Swindling (estafa). Any person who shall defraud another by any of the means mentioned hereinbelow shall be punished by: xxx the fraud be committed by any of the following means: 1. With unfaithfulness or abuse of confidence, namely: xxx xxx xxx (b) By misappropriating or converting, to the prejudice of another, money, goods, or any other personal property received by the offender in trust or on commission, or for administration, or under any other obligation involving the duty to make delivery of or to return the same, even though such obligation be totally or partially guaranteed by a bond; or by denying having received such money, goods, or other xxx xxx xxx 2. By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with the commission of the fraud: (a) By using fictitious name, or falsely pretending to possess power, influence, qualifications, property, credit, agency, business or imaginary transactions, or by means of other similar deceits.

Recruitment in Large Scale vs. Syndicate: LARGE SCALE 3 or more victims SYNDICATE 3 or more conspirators

There were fourteen (14) other cases of Illegal Recruitment filed and/or pending against accused and her husband in different courts of Manila. These cases cannot be taken into account for the purpose of Art. 38(b). When the Labor Code speaks of illegal recruitment "committed against three (3) or more persons individually or as a group," it must be understood as referring to the number of complainants in each case who are complainants therein, otherwise, prosecutions for single crimes of illegal recruitment can be cummulated to make out a case of large scale illegal recruitment. In other words, a conviction for large scale illegal recruitment must be based on a finding in each case of illegal recruitment of three or more persons whether individually or as a group.

Moreover, even it Blanza and Garcia had been illegally recruited so as to make the number of persons Bar Operations illegally 2012: recruited Ace the four Bar,and Racemake the Car! the crime that of illegal recruitment on a large scale, since this was not alleged in the information and this is the more serious offense which includes that which

Illegal recruitment and estafa are entirely different offenses and neither one necessarily includes or is necessarily included in the other. A person who is convicted of For illegal recruitment may,Use in addition, Private and Personal Only 10be convicted of estafa under Article 315, paragraph 2(a) of the RPC. In the same manner, a person acquitted of illegal recruitment may be held liable

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solidarily liable with the corporation or partnership for the aforesaid claims and damages. "Such liabilities shall continue during the entire period or duration of the employment contract and shall not be affected by any substitution, amendment or modification made locally or in a foreign country of the said contract.

Local employment agency: Local Agency is solidarily liable with foreign principal for unpaid salaries of a worker recruited. Before recruiting, the agency is required to submit a document with the principal or foreign-based employer for any of the violations of the recruitment agreement, and the contracts employment. Republic Act No. 8042 provides for the joint and solidary liability of private recruitment agencies with their foreign principals in any and all money claims against them. Such provision is automatically incorporated by law in the contract for overseas employment and is a condition precedent for its approval. This is to afford the OFWs immediate and sufficient payment of what is due them. Moreover, such obligation is not coterminous with the agreement between the local agent and its foreign principal so that if either or both of the parties decide to end the agreement, the responsibilities of such parties towards the contracted employees under the agreement do not at all end, but the same extends up to and until the expiration of the employment contracts of the employees recruited and employed pursuant to the said recruitment agreement. Thus, to allow petitioners to simply invoke the immunity from suit of its foreign principal or to wait for the judicial determination of the foreign principals liability before petitioner can be held liable renders the law on joint and solidary liability inutile. (ATCI Overseas Corporation, et al. vs. Ma. Josefa Echin, G.R. No. 178551. October 11, 2010)

Any recruitment activities to be undertaken by non-licensee or non-holder of contracts shall be deemed illegal and punishable under Art. 39 of the Labor Code. Absence of money or any valuable consideration as payment for services of the recruiter still considers the recruitment illegal under Art. 13(b) of the Labor Code as recruitment maybe for profit or not. (People vs. Jamilosa, 512 SCRA 340 (2007))

Liabilities:
RA 8042, Section 6 (Paragraph 3) "The persons criminally liable for the above offenses are the principals, accomplices and accessories. In case of juridical persons, the officers having ownership, control, management or direction of their business who are responsible for the commission of the offense and the responsible employees/agents thereof shall be liable. RA No. 10022, an act amending Migrant Workers and Overseas Filipino Act of 1995 (RA 8042) Section 7. Section 10 of Republic Act No. 8042, as amended, is hereby amended to read as follows: "SEC. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damage. Consistent with this mandate, the NLRC shall endeavor to update and keep abreast with the developments in the global services industry. "The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. This provision shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval. The performance bond to de filed by the recruitment/placement agency, as provided by law, shall be answerable for all money claims or damages that may be awarded to the workers. If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and

Joint and Several Liability of Agent and Principal, POEA Rules, Book II, Rule II, Section 1(f) Requirements for Issuance of LicenseEvery applicant for license to operate a manning agency shall submit a written application together with the following requirements: a. A verified undertaking stating that the applicant shall: xxx 7. Assume full and complete responsibility for all claims and liabilities which may arise in connection with the use of the license; 8. Assume joint and solidary liability with the employer for all claims and liabilities which may arise in connection with the

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10022 (RA 10022) amended Section 10 of the Migrant Workers Act, and once again reiterated the provision of awarding the unexpired portion of the employent contract or three (3) months for every year of the unexpired term, whichever is less. Nevertheless, since the termination occurred on January 1999 before the passage of the amendatory RA 10022, the Supreme Court applied RA 8042, without touching on the constitutionality of Section 7 of RA 10022. The declaration in March 2009 of the unconstitutionality of the clause or for three months for every year of the unexpired term, whichever is less in RA 8042 shall be given retroactive effect to the termination that occurred in January 1999 because an unconstitutional clause in the law confers no rights, imposes no duties and affords no protection. The unconstitutional provision is inoperative, as if it was not passed into law at all. (Skippers United Pacific, Inc. and Skippers Maritime Services, Inc. Ltd. vs. Nathaniel Doza, et al., G.R. No. 175558. February 8, 2012.) Rules on Repatriation of Overseas Workers: 1. Without fault of the worker, his repatriation shall be borne by the local agency and/or principal over the: a. worker and his personal belongings; b. remains of the deceased worker and his personal belongings [Sec. 15, par. 1, RA 8042] 2. Repatriation due to the fault of migrant worker shall be borne by the migrant worker. [Sec. 15, par. 1, RA 8042] 3. Repatriation in cases of war, epidemic, disasters/calamities, or other similar events shall be borne by OWWA, without prejudice to reimbursement by the principal or local agency. [Sec. 15, par.2, RA 8042] 4. Repatriation of underage migrant worker shall be mandatory upon discovery, done by the responsible officers of the foreign service where the underage migrant worker is found. [Sec. 16, RA 8042] 5. Repatriation of seafarer POEA Memo Circular No. 55-96 provides that a seaman can be repatriated without cause if the vessel arrives at a convenient port within 3 months before the expiration of his contract, BUT only upon payment of: a. all his earned wages; b. leave pay for the entire contract; For Private and Personal Use Only 12 IF c. termination pay of 1 month basic salary, seaman has at least 10 months original contract. [PCL Shipping Phils. vs. NLRC, G.R. No. 153031, December 14, 2006, Austriaimplementation of the employment contract, including but not limited to wages, death and disability compensation and their repatriation; 9. Guarantee compliance with the applicable labor, social and maritime legislations of the Philippines, and applicable regulations of the flag state and international maritime bodies such as the International Maritime Organization (IMO) and the International Labor Organization (ILO); 10. Assume full and complete responsibility for all acts of its officials, employees and representatives done in connection with recruitment and placement; xxx

Severance of relations between local agent and foreign principal does not affect liability of local recruiter.

Foreign employer: a. Theory of Imputed Knowledge: The so-called theory of imputed knowledge, that is, knowledge of the agent is knowledge of the principal. [New Life vs. CA, G.R. No. 94071 March 31, 1992] For the liability of the agent to attach, this theory states that the agent knew of and consented to the extension of period of employment. Otherwise, the liability of the recruitment agency shall expire from the termination of the worker's original contract. (Sunace International Management vs. NLRC, G.R. No. 161757, January 25, 2006) Pretermination of contract of migrant worker: 1. If the contract is for a fixed term and the employee is dismissed without just cause, he is entitled to the payment of his salaries corresponding to the unexpired portion of his contract. (Anderson vs. NLRC, 252 SCRA 116) 2. The Migrant Workers Act provides that salaries for the unexpired portion of the employment contract or three (3) months for every year of the unexpired term, whichever is less, shall be awarded to the overseas Filipino worker, in cases of illegal dismissal. However, in 24 March 2009, Serrano v. Gallant Maritime Services and Marlow Navigation Co. Inc. (G.R. No. 167614), the Court, in an En Banc Decision, declared unconstitutional the clause or for three months for every year of the unexpired term, whichever is less and awarded the e ntire unexpired portion of the employment contract to the overseas Filipino worker. On 8 March 2010, however, Section 7 of Republic Act No.

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POEA Rules, Part II, Rule I, Section 1 Xxx b. A minimum capitalization of Two Million Pesos (P2,000,000.00) in case of a single proprietorship or partnership and a minimum paid-up capital of Two Million Pesos (P2,000,000.00) in case of a corporation; Provided that those with existing licenses shall, within four years from effectivity hereof, increase their capitalization or paid up capital, as the case may be, to Two Million Pesos (P2,000,000.00) at the rate of Two Hundred Fifty Thousand (P250,000.00) every year; xxx

Direct hiring:
Labor Code, Article 18 General Rule: Ban on direct-hiring. No employer may hire a Filipino worker for overseas employment except through the Boards and entities authorized by the Secretary of Labor. Exemption: Direct-hiring by members of the diplomatic corps, international organizations and such other employers as may be allowed by the Secretary of Labor is exempted from this provision. POEA Rules, Part III, Rule III, Section 8 Ban on Direct Hires. No foreign principal or employer may hire a Filipino worker for overseas employment except through the boards and entities authorized by the Secretary. Direct hiring by members of the diplomatic corps, international organizations and such other employers as may be allowed by the Secretary is exempt from this provision.

c. Duration:
POEA Rules, Part II, Rule II Section 5. Provisional License. Applicants for new license shall be issued a provisional license which shall be valid for a limited period of one (1) year within which the applicant should be able to comply with its undertaking to deploy 50 seafarers to its new principal. The license of a complying agency shall be upgraded to a full license entitling them to another three years of operation. Non-complying agencies will be notified of the expiration of their license. Section 6. Validity of the License. Except in case of a provisional license, every license shall be valid for four (4) years from the date of issuance unless sooner cancelled, revoked or suspended for violation of applicable Philippine law, these rules and other pertinent issuances. Such license shall be valid only at the place/s stated therein, subject to the conditions of the subsequent paragraph, and when used by the licensed person, partnership or corporation.

2. Regulation and Enforcement: a. Citizenship:


Labor Code, Article 27 1. Only Filipino citizens 2.or corporations, partnerships or entities at least seventy-five percent (75%) of the authorized and voting capital stock of which is owned and controlled by Filipino citizens shall be permitted to participate in the recruitment and placement of workers, locally or overseas. POEA Rules, Part II, Rule I, Section 1 Only those who possess the following qualifications may be permitted to engage in the business of recruitment and placement of Filipino seafarers: a. Filipino citizens, partnerships or corporations at least seventyfive percent (75%) of the authorized and voting capital stock of which is owned and controlled by Filipino citizens; xxx

Even if Josefina was licensed to recruit workers for overseas employment, her authority to do so ceased when the license of her agency, RSI, was suspended and when it eventually expired. Moreover, licensed agencies are prohibited from conducting any provincial recruitment, job fairs or recruitment activities of any form outside of the address stated in the license, acknowledged branch or extension office, without securing prior authority from the POEA. RSI could recruit only in Mandaluyong but had no branch or extension office in Baguio. (People vs. Buli-e, G.R. No. 123146., June 17, 2003)

d. Registration Fees and Bonds: b. Capitalization:


Labor Code, Labor Code, Article 28 All applicants for authority to hire or renewal of license to recruit are required to have such substantial capitalization as determined by the Secretary of Labor. Article 30. Registration fees.The Secretary of Labor shall promulgate a schedule of fees for the registration of all applicants for license or authority.

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The above-mentioned placement and documentation costs are the only authorized payments that may be collected from a hired worker. No other charges in whatever form, manner or purpose, shall be imposed on and be paid by the worker without prior approval of the POEA. Such fees shall be collected from a hired worker only after he has obtained employment through the facilities of the recruitment agency. Article 31. Bonds. All applicants for license or authority shall post such cash and surety bonds as determined by the Secretary of Labor to guarantee compliance with prescribed recruitment procedures, rules and regulations, and terms and conditions of employment as may be appropriate. POEA Rules, Part II, Rule II, Section 4 Payment of Fees and Posting of Bonds. Upon approval of the application, the applicant shall pay a license fee of Fifty Thousand Pesos (P50,000.00). It shall submit an escrow agreement in the amount of One Million Pesos (P1,000,000.00), confirmation of escrow deposit with a reputable bank and a surety bond of One Hundred Thousand Pesos (P100,000.00) from a bonding company acceptable to the Administration and accredited with the Insurance Commission. Agencies with existing licenses shall, within four years from effectivity hereof, increase their Escrow Deposit to One Million Pesos (P1,000,000.00) at the rate of One Hundred Seventy-Five Thousand (P175,000.00) pesos per year. The bonds and escrow shall answer for all valid and legal claims arising from violations of the conditions for the grant and use of the license and/or contracts of employment. The bonds and escrow shall likewise guarantee compliance with the provisions of these rules and pertinent Philippine laws and all liabilities which the Administration may impose. The surety bonds shall include the condition that notice to the principal is notice to the surety and that any final and executory judgment against the principal in connection with matters falling under POEAs/NLRCs jurisdiction shall be binding and conclusive on the surety. The surety bonds shall cover the validity period of the license.

f. Reports/Submission:
Labor Code Article 33. Reports on employment status. Whenever the public interest requires, the Secretary of Labor may direct all persons or entities within the coverage of this Title to submit a report on the status of employment, including job vacancies, details of job requisitions, separation from jobs, wages, other terms and conditions and other employment data. Article 14. Employment promotion. The Secretary of Labor shall have the power and authority: Xxx To require any person, establishment, organization or institution to submit such employment information as may be prescribed by the Secretary of Labor.

g. Suspension:
Article 35. Suspension and/or cancellation of license or authority. The Minister of Labor shall have the power to suspend or cancel any license or authority to recruit employees for overseas employment for violation of rules and regulations issued by the Ministry of Labor, the Overseas Employment Development Board, or for violation of the provisions of this and other applicable laws, General Orders and Letters of Instructions.

e. Workers fees:
Labor Code Article 32. Fees to be paid by workers. Any person applying with a private fee-charging employment agency for employment assistance shall not be charged any fee until he has obtained employment through its efforts or has actually commenced employment. Such fee shall be always covered with the appropriate receipt clearly showing the amount paid. The Secretary of Labor shall promulgate a schedule of allowable fees. POEA Rules, Part V, Rule II, Section 3 Section 3. Fees/Costs Chargeable to the Workers. Except where the prevailing system in the country where the worker is to be deployed, either by law, policy or practice, do not allow the charging or collection of placement and recruitment fee, a landbased agency may charge and collect from its hired workers a placement fee in an amount equivalent to one month salary, exclusive of documentation costs. Documentation costs to be paid by the worker shall include, but not limited to, expenses for the following: a. Passport b. NBI/Police/Barangay Clearance c. Authentication d. Birth Certificate e. Medicare f. Trade Test, if necessary g. Inoculation, when required by host country h. Medical Examination fees In the event that the recruitment agency agrees to perform documentation services, the worker shall pay only the actual cost of the document which shall be covered by official receipts.

Remittance of foreign exchange earnings:


Labor Code, Article 22 It shall be mandatory for all Filipino workers abroad to remit a portion of their foreign exchange earnings to their families, dependents, and/or beneficiaries in the country in accordance with rules and regulations prescribed by the Secretary of Labor. POEA Rules, Book III, Rule VIII All overseas Filipino workers are required to remit a portion of their foreign exchange earnings ranging from 50% to 80%, depending on the workers kind of job, to their families, dependents and/or beneficiaries.

The following are the percentages of foreign exchange remittance required from various kinds of migrant workers: a) Seamen or mariners: Seventy (70) percent of basic salary; b) Workers of Filipino contractors and construction companies: Seventy (70) percent of basic salary;

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5. To influence or to attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency; 6. To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines; 7. To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized representatives; 8. To fail to file reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor. 9. To substitute or alter employment contracts approved and verified by the Department of Labor from the time of actual signing thereof by the parties up to and including the periods of expiration of the same without the approval of the Secretary of Labor; 10. To become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of a travel agency; and 11. To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations other than those authorized under this Code and its implementing rules and regulations.

c) Doctors, engineers, teachers, nurses and other professional workers whose contract provide for free board and lodging: Seventy (70) percent of basic salary; d) All other professional workers whose employment contracts do not provide for free board and lodging facilities: Fifty (50) percent of basic salary; e) Domestic and other service workers: Fifty (50) percent of basic salary; f) All other workers not falling under the aforementioned categories: Fifty (50) percent of basic salary.
Resolution No. 1-83, Inter-Agency Committee for Implementation of E.O. 857 The following individuals, however, are exempted from the mandatory remittance requirement: The immediate family members, dependents or beneficiaries of migrant workers of migrant workers residing with the latter abroad; Filipino servicemen working within US military installations; Immigrants and Filipino professionals working with the United Nations and its agencies or other specialized bodies.

Prohibited activities: Any undertaking pursuant to recruitment of a person, corporation or entity: a. which has not been issued a valid license or authority to engage in recruitment and placement by the Secretary of Labor, or b. whose license or authority has been suspended, revoked or cancelled by the POEA or the Secretary of Labor
Labor Code, Article 34 Prohibited practices. It shall be unlawful for any individual, entity, licensee, or holder of authority: 1. To charge or accept, directly or indirectly, any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay any amount greater than that actually received by him as a loan or advance; 2. To furnish or publish any false notice or information or document in relation to recruitment or employment; 3. To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under this Code. 4. To induce or attempt to induce a worker already employed to quit his employment in order to offer him to another unless the transfer is designed to liberate the worker from oppressive terms and conditions of employment;

RA No. 10022, an act amending Migrant Workers and Overseas Filipino Act of 1995 (RA 8042) xxx it shall also be unlawful for any person or entity to commit the following prohibited acts: "(1) Grant a loan to an overseas Filipino worker with interest exceeding eight percent (8%) per annum, which will be used for payment of legal and allowable placement fees and make the migrant worker issue, either personally or through a guarantor or accommodation party, postdated checks in relation to the said loan; "(2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to avail of a loan only from specifically designated institutions, entities or persons; "(3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino worker after the latter's employment contract has been prematurely terminated through no fault of his or her own; "(4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo health examinations only from specifically designated medical clinics, institutions, entities or persons, except in the case of a seafarer whose medical examination cost is shouldered by the principal/shipowner; "(5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo training, seminar, instruction or schooling of any kind only from specifically designated institutions, entities or persons, except fpr recommendatory trainings mandated by principals/shipowners where the latter shoulder the cost of such trainings; "(6) For a suspended recruitment/manning agency to engage in any kind of recruitment activity including the processing of pending workers' applications; and "(7) For a recruitment/manning agency or a foreign principal/employer to pass on the overseas Filipino worker or

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deduct from his or her salary the payment of the cost of insurance fees, premium or other insurance related charges, as provided under the compulsory worker's insurance coverage.

Regulatory and visitorial powers of the Labor Secretary:


Labor Code Article 35. Suspension and/or cancellation of license or authority. The Minister of Labor shall have the power to suspend or cancel any license or authority to recruit employees for overseas employment for violation of rules and regulations issued by the Ministry of Labor, the Overseas Employment Development Board, or for violation of the provisions of this and other applicable laws, General Orders and Letters of Instructions. Article 36. Regulatory power. The Secretary of Labor shall have the power to restrict and regulate the recruitment and placement activities of all agencies within the coverage of this Title and is hereby authorized to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of this Title. Article 37. Visitorial Power. The Secretary of Labor or his duly authorized representatives may, at any time, inspect the premises, books of accounts and records of any person or entity covered by this Title, require it to submit reports regularly on prescribed forms, and act on violation of any provisions of this Title.

Any person who is neither a licensee nor a holder of authority under this Title found violating any provision thereof or its implementing rules and regulations shall, upon conviction thereof, suffer the penalty of imprisonment of not less than four years nor more than eight years or a fine of not less than P20,000 nor more than P100,000 or both such imprisonment and fine, at the discretion of the court; If the offender is a corporation, partnership, association or entity, the penalty shall be imposed upon the officer or officers of the corporation, partnership, association or entity responsible for violation; and if such officer is an alien, he shall, in addition to the penalties herein prescribed, be deported without further proceedings; In every case, conviction shall cause and carry the automatic revocation of the license or authority and all the permits and privileges granted to such person or entity under this Title, and the forfeiture of the cash and surety bonds in favor of the Overseas Employment Development Board or the National Seamen Board, as the case may be, both of which are authorized to use the same exclusively to promote their objectives.

RA No. 10022, an act amending Migrant Workers and Overseas Filipino Act of 1995 (RA 8042) Section 6. Section 7 of Republic Act No. 8042, as amended, is hereby amended to read as follows: "SEC. 7. Penalties. "(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less than twelve (12) years and one (1) day but not more than twenty (20) years and a fine of not less than One million pesos (P1,000,000.00) nor more than Two million pesos (P2,000,000.00). "(b) The penalty of life imprisonment and a fine of not less than Two million pesos (P2,000,000.00) nor more than Five million pesos (P5,000,000.00) shall be imposed if illegal recruitment constitutes economic sabotage as defined therein. "Provided, however, That the maximum penalty shall be imposed if the person illegally recruited is less than eighteen (18) years of age or committed by a non-licensee or non-holder of authority. "(c) Any person found guilty of any of the prohibited acts shall suffer the penalty of imprisonment of not less than six (6) years and one (1) day but not more than twelve (12) years and a fine of not less than Five hundred thousand pesos (P500,000.00) nor more than One million pesos (P1,000,000.00). "If the offender is an alien, he or she shall, in addition to the penalties herein prescribed, be deported without further proceedings. "In every case, conviction shall cause and carry the automatic revocation of the license or registration of the recruitment/manning agency, lending institutions, training school or medical clinic." Section 7. Section 10 of Republic Act No. 8042, as amended, is hereby amended to read as follows: "SEC. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damage. Consistent with this mandate, the NLRC shall endeavor to update and keep abreast with the developments in the global services industry.

The Supreme Court declared Art. 38, par. (c) unconstitutional and null and void, stating that only a judge may issue warrants of search and arrest. [Hortencia Salazar vs. Tomas D. Achacoso and Ferdie Marquez, G.R. No. 81510, March 14, 1990]

Penalties for illegal recruitment:

Labor Code Article 35. Suspension and/or cancellation of license or authority. The Minister of Labor shall have the power to suspend or cancel any license or authority to recruit employees for overseas employment for violation of rules and regulations issued by the Ministry of Labor, the Overseas Employment Development Board, or for violation of the provisions of this and other applicable laws, General Orders and Letters of Instructions. Article 39. Penalties. The penalty of life imprisonment and a fine of One Hundred Thousand Pesos (P1000,000.00) shall be imposed if illegal recruitment constitutes economic sabotage as defined herein; Any licensee or holder of authority found violating or causing another to violate any provision of this Title or its implementing rules and regulations shall, upon conviction thereof, suffer the penalty of imprisonment of not less than two years nor more than five years or a fine of not less than P10,000 nor more than P50,000, or both such imprisonment and fine, at the discretion of the court;

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Who revokes/cancels license: DOLE Regional Director BLE copy furnished of all Orders for Database OVERSEAS RECRUITMENT AGENCY Where to file: POEA Director of Licensing & Regulatory Office (LRO), which office is under the wing of the Deputy Administrator for Adjudication and Employment Regulation. Who issues license: POEA Director of LRO Who revokes/cancels license: POEA Director of LRO EXCEPT, in case of ILLEGAL RECRUITMENT: 1 Under the POEA Rules on Overseas Land-based Employment (2002), both the POEA Administrator and DOLE Regional Director has the power to issue a CLOSURE ORDER against an erring overseas recruitment and manning agency. 2 BUT, Under the new Omnibus Rules Implementing RA 10022 (amendment to RA 8042), it is the POEA Administrator who has the authority to issue a CLOSURE ORDER upon preliminary finding of guilt against an overseas recruitment agency. [Sec. 11] HOWEVER, Prior to the issuance of a CLOSURE ORDER, an investigation takes place whereby the POEA Administrator may issue a preventive suspension upon the recommendation of the POEA Director of LRO. [Sec. 9, Omnibus Rules implementing RA 10022] Closure Order may be lifted upon filing a Motion before the POEA Director of LRO, which motion shall be resolved by the POEA Administrator. [Sec. 18, Omnibus Rules Implementing RA 10022] Criminal Complaints involving Migrant Workers: ILLEGAL RECRUITMENT AS ECONOMIC SABOTAGE: Categories: Illegal recruitment by a syndicate - if carried out by a group of three or more persons conspiring and/or confederating with one another.
"The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. This provision shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval. The performance bond to de filed by the recruitment/placement agency, as provided by law, shall be answerable for all money claims or damages that may be awarded to the workers. If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages. "Such liabilities shall continue during the entire period or duration of the employment contract and shall not be affected by any substitution, amendment or modification made locally or in a foreign country of the said contract. "Any compromise/amicable settlement or voluntary agreement on money claims inclusive of damages under this section shall be paid within thirty (30) days from approval of the settlement by the appropriate authority. "In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, or any unauthorized deductions from the migrant worker's salary, the worker shall be entitled to the full reimbursement if his placement fee and the deductions made with interest at twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less. "In case of a final and executory judgement against a foreign employer/principal, it shall be automatically disqualified, without further proceedings, from participating in the Philippine Overseas Employment Program and from recruiting and hiring Filipino workers until and unless it fully satisfies the judgement award. "Noncompliance with the mandatory periods for resolutions of case provided under this section shall subject the responsible officials to any or all of the following penalties: "(a) The salary of any such official who fails to render his decision or resolution within the prescribed period shall be, or caused to be, withheld until the said official complies therewith; "(b) Suspension for not more than ninety (90) days; or "(c) Dismissal from the service with disqualification to hold any appointive public office for five (5) years. "Provided, however, That the penalties herein provided shall be without prejudice to any liability which any such official may have incured under other existing laws or rules and regulations as a consequence of violating the provisions of this paragraph."

Notes: Licensing of and Administrative Complaints against Recruitment Agencies: LOCAL RECRUITMENT AGENCY Where to file: DOLE Regional Office Who issues license: DOLE Regional Director Illegal recruitment in large scale if committed against three or more persons individually or as a group.

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Art. 82. xxx but not to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations.

1. When only one complainant filed individual complaints, there is no illegal recruitment in large scale BUT the three conspiring recruiters can be held guilty of illegal recruitment by a syndicate. [People vs. Hernandez, K. Reichl, and Y.G. de Reichl, G.R. Nos. 141221-36, March 7, 2002.] 2. Where illegal recruitment is proved but the elements of large scale or syndicate are absent, the accused can be convicted only of simple illegal recruitment. 3. VENUE: The RTC of the province or city where the offense was committed or where the offended party actually resides at the time of the commission of the offense.

i. Government employees:
(Article 276, Labor Code) The terms and conditions of employment of all government employees, including employees of government-owned and controlled corporations, shall be governed by the Civil Service Law, rules and regulations.

ii. Managerial employees:


(Article 82, Labor Code)

III: LABOR STANDARDS The following are the topics covered: 1. Hours of Work 2. Wages 3. Rest Days 4. Holidays 5. Leaves 6. Service Charges 7. 13th Month Pay and other Bonuses 8. Women Workers 9. Minor Workers 10. Employment of Househelpers 11. Employment of Homeworkers 12. Apprentices and Learners 13. Handicapped Workers

Refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff. (Omnibus Rules Implementing the Labor Code, Book III Rule 1, Section 2) The provisions of this Rule shall not apply to the following persons if they qualify for exemption under the conditions set forth herein: (b) Managerial employees, if they meet all of the following conditions: (1) Their primary duty consists of the management of the establishment in which they are employed or of a department or sub-division thereof. (2) They customarily and regularly direct the work of two or more employees therein. 3) They have the authority to hire or fire employees of lower rank; or their suggestions and recommendations as to hiring and firing and as to the promotion or any other change of status of other employees, are given particular weight. (c) Officers or members of a managerial staff if they perform the following duties and responsibilities: (1) The primary duty consists of the performance of work directly related to management policies of their employer; (2) Customarily and regularly exercise discretion and independent judgment; and (3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof; or (ii) execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or (iii) execute, under general supervision, special assignments and tasks. (4) Who do not devote more than 20 percent of their hours worked in a work week to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2) and (3) above.

III. Labor Standards: 1. Hours of Work: a. Coverage/Exclusions: Covered


Labor Code Art. 82. The provisions of this Title shall apply to employees in all establishments and undertakings whether for profit or not. Omnibus Rules Implementing the Labor Code, Book III Rule 1 Section 1. General statement on coverage. - The provisions of this Rule shall apply to all employees in all establishments and undertakings, whether operated for profit or not.

Not covered
Labor Code

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NOTES: For purposes of the exemption, managerial employees are those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision. [Pearanda vs. Baganga Plywood Corp., G.R. No. 159577, May 3, 2006]

UCLASS Bar Operations: Labor Law Society


(c) execute under general supervision special assignments and tasks; 4. who do NOT devote more than 20% of their hours of work in a week to activities which are not directly and closely related to management of the establishment. [Pearanda vs. Baganga Plywood Corp., supra, citing Section 2(c), Rule I, Book III of the Omnibus Rules and Regulations] An employee tasked to supervise the engineering section of the plant, and whose work involved overseeing the operation of the machines and the performance of the workers in said section, is considered part of the managerial staff. His functions require the use of discretion and independent judgment to ensure the proper functioning of the plant. The term FOREMAN implies that he was the representative of management over the workers, and the operation of the department. [Pearanda vs. Baganga Plywood Corp., supra] Likewise, an employee with powers of supervisor/manager is part of the managerial staff. [Quebec vs. NLRC, 301 SCRA 627 (1999)]

A purported manager whose function is simply to carry out the companys orders, plans and policies is not a managerial employee. If their functions, duties and responsibilities do not bear relation with the management of the establishment, nor participate in the formulation of its policies, nor in the hiring and firing of its employees, then they are NOT managerial employees. [NAWASA vs. NWSA Consolidated Unions, 11 SCRA 766 (1964)]

Managerial employee is not required to report at a fixed hour or to keep fixed hours of work. [International Pharmaceuticals, Inc. Vs. NLRC, 287 SCRA 213 (1998)]

A Vice President/Plant Manager is a managerial employee, and therefore excluded from the coverage of Title I, Book III, of the Labor Code. [John McLeod vs. NLRC, G.R. No. 146667, January 23, 2007]

N.B.: Managers and members of managerial staff are NOT entitled to: a. Overtime pay [Art. 87; Salazar vs. NLRC, supra] b. Service incentive leave pay [Art. 95(b]; Quebec vs. NLRC, supra] c. Holiday pay (Art. 94)

Includes managerial staff While not considered as managerial employees, officers and members of the managerial staff are likewise exempted from the coverage of Article 82. Managerial staff are those with the following duties and responsibilities: 1. primary duty consists of the performance of work directly related to management policies of the employer; 2. customarily and regularly exercise discretion and independent judgment; 3. (a) regularly and directly assist a proprietor/managerial employee, whose primary duty consists of the management of the establishment; OR (b) execute under general supervision work along specialized or technical lines requiring special training, experience or knowledge; OR

iii. Field Personnel:


(Article 82, Labor Code) Refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty.

Tests: Field Personnel The clause "whose time and performance is unsupervised by the employer" did not amplify but merely interpreted and expounded the clause Forhours Private Personal 19 "whose actual ofand work in the Use fieldOnly cannot be determined with reasonable certainty." The former clause is still within the scope and purview of Article 82 which defines field personnel. Hence, in

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these regulations, or where such rates have been fixed by the Secretary of Labor and Employment in accordance with the aforesaid Section.

The philosophy underlying the exclusion of piece workers from the Eight-Hour Labor Law is that said workers are paid depending upon the work they do "irrespective of the amount of time employed" in doing said work. (Red vs. Coconut Products Ltd., vs. CIR, G.R. No. L-21348, June 30, 1966)

b. Normal Hours of Work: If required to be at specific places at specific times, employees including drivers cannot be said to be field personnel despite the fact that they are performing work away from the principal office of the employee. (Auto Bus Transport System, Inc. vs. Bautista, G.R. No. 156367. May 16, 2005)
Labor Code Article 83. Normal hours of work. The normal hours of work of any employee shall not exceed eight (8) hours a day.

Hours Worked
Article 84. Hours worked shall include (a) all time during which an employee is required to be on duty or to be at a prescribed workplace; and (b) all time during which an employee is suffered or permitted to work. Section 3. The following shall be considered as compensable hours worked: (a) All time during which an employee is required to be on duty or to be at the employer's premises or to be at a prescribed work place; and (b) All time during which an employee is suffered or permitted to work.

iv. Dependent family members v. Domestic helpers


(Article 141, Labor Code) "Domestic or household service" shall mean service in the employers home which is usually necessary or desirable for the maintenance and enjoyment thereof and includes ministering to the personal comfort and convenience of the members of the employers household, including services of family drivers.

Principles in determining hours worked


Omnibus Rules Implementing the Labor Code, Book III Rule 1, Sec. 4 The following general principles shall govern in determining whether the time spent by an employee is considered hours worked for purposes of this Rule: (a) All hours are hours worked which the employee is required to give his employer, regardless of whether or not such hours are spent in productive labor or involve physical or mental exertion. (b) An employee need not leave the premises of the work place in order that his rest period shall not be counted, - it being enough that he stops working, may rest completely and - may leave his work place, to go elsewhere, whether within or outside the premises of his work place. (c) If the work performed was necessary, or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent for such work shall be considered as hours worked, if the work was with the knowledge of his employer or immediate supervisor.

vi. Persons in service of another


(Omnibus Rules Implementing the Labor Code, Book III Rule 1, Section 2) (d) Domestic servants and persons in the personal service of another if they perform such services in the employer's home which are usually necessary or desirable for the maintenance and enjoyment thereof, or minister to the personal comfort, convenience, or safety of the employer as well as the members of his employer's household.

vii. Piece workers


(Omnibus Rules Implementing the Labor Code, Book III Rule 1, Section 2) (e) Workers who are paid by results, including those who are paid on piece-work, "takay," "pakiao" or task basis, and other nontime work if their output rates are in accordance with the standards prescribed under Section 8, Rule VII, Book Three of

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(d) The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered working time either - if the imminence of the resumption of work requires the employee's presence at the place of work or - if the interval is too brief to be utilized effectively and gainfully in the employee's own interest

Rest Period
Labor Code Article 84. Rest periods of short duration during working hours shall be counted as hours worked. Omnibus Rules Implementing the Labor Code, Book III Rule 1 Section 7. xxx Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time.

a. Exceptions: (i) Health Personnel


Labor Code Article 83. Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours, in which case, they shall be entitled to an additional compensation of at least thirty percent (30%) of their regular wage for work on the sixth day. For purposes of this Article, "health personnel" shall include resident physicians, nurses, nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic personnel.

Waiting time
Omnibus Rules Implementing the Labor Code, Book III Rule 1, Section 5. (a) Waiting time spent by an employee shall be considered as working time if waiting is an integral part of his work or the employee is required or engaged by the employer to wait.

On call
Omnibus Rules Implementing the Labor Code, Book III Rule 1, Section 5. (b) An employee who is required to remain on call in the employer's premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose shall be considered as working while on call. An employee who is not required to leave word at his home or with company officials where he may be reached is not working while on call.

(ii) Compressed Work Week


DOLE Advisory no. 2 series of 2009 In a compressed workweek scheme, the normal workweek is reduced to less than six days, but the total work hours per week remain at 48 hours. The normal workday is increased to more than 8 hours but not exceeding 12 hours, without corresponding overtime premium.

Lectures, meetings and trainings


Omnibus Rules Implementing the Labor Code, Book III Rule 1, Section 6 Attendance at lectures, meetings, training programs, and other similar activities shall not be counted as working time if all of the following conditions are met: (a) Attendance is outside of the employee's regular working hours; (b) Attendance is in fact voluntary; and (c) The employee does not perform any productive work during such attendance.

Valid conditions of a compressed workweek scheme


Department Advisory No. 02, series of 2004 (Advisory No. 2-04) a. The compressed workweek scheme is undertaken as a result of an express and voluntary agreement of the majority of the covered employees or their duly authorized representatives. This agreement may be expressed through collective bargaining or other legitimate workplace mechanisms of participation, such as labor management councils, employee assemblies, or referenda. b. In business establishments using substances, chemicals and processes, or operating under conditions where there are airborne contaminants, human carcinogens or noise, the prolonged exposure to which may pose hazards to the employees health and safety, there must be a certification from an accredited health and safety organization or practitioner or from the business establishments safety committee, that work beyond eight hours is within threshold limits or tolerable levels of

Continuous work: And considering the established fact that the work of Severino Pepito was continuous, and during the time he was not working, he could not leave and could not completely rest, because of the place and nature of his work, the provisions ofthe sec. 1, of Bar Operations 2012: Ace the Bar, Race Car! Comm. Act No. 444, which states "When the work is not continuous, the time during which the laborer is not working and can leave his working

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exposure as set forth in the Occupational Safety and Health Standards (OSHS). c. The employer notifies the field office of the DOLE regional office having jurisdiction over the workplace of the implementation of the compressed workweek scheme.

When basic contract does not include overtime pay A contract of employment, which provides for a weekly wage for a specified number of hours, sufficient to cover both the statutory minimum wage and overtime compensation, if computed on the basis of the statutory minimum wage, and which makes no provision for a fixed hourly rate or that the weekly wage includes overtime compensation, does not meet the requirements of the Act. (Manila Terminal Co., G.R. No. L-4148, July 16, 1952) Entitlement to overtime pay must first be established by proof that said overtime work was actually performed, before an employee may avail of said benefit. (Lagatic vs. NLRC, G.R. No. 121004. January 28, 1998)

b. Work interruption due to brownouts

Policy Instruction No. 36 (May 22, 1978) Brown-outs of short duration not exceeding twenty (20) minutes - compensable hours worked. Brown-outs running for more than twenty (20) minutes may not be treated as hours worked provided any of the following conditions are present: a.The employees can leave their workplace or go elsewhere whether within or without the work premises; or The employees can use the time effectively for their own interest. Omnibus Rules Implementing the Labor Code, Book III Rule 1, Section 4 (d) The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered working time either if the imminence of the resumption of work requires the employee's presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the employee's own interest.

c. Meal Break Regular meal Built-in compensation Written contracts with a "built-in" overtime pay in the ten-hour working day and that their basic monthly pay was adjusted to reflect the higher amount covering the guaranteed two-hour extra time whether worked or unworked are valid. (Engineering Equipment Inc. vs. Minister of Labor, G.R. No. L-64967 September 23, 1985)
Labor Code Article 85. Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of every employer to give his employees not less than sixty (60) minutes time-off for their regular meals. Omnibus Rules Implementing the Labor Code, Book III Rule 1, Section 7 Section 7. Every employer shall give his employees, regardless of sex, not less than one (1) hour time-off for regular meals

Shorter meal periods Proof of Work


Omnibus Rules Implementing the Labor Code, Book III Rule 1, Section 7

A meal period of not less than twenty (20) minutes may be given by the employer provided that such shorter meal period is credited as compensable hours worked of the employee: Where the work is non-manual work in nature or does not involve strenuous physical exertion; Where the establishment regularly operates not less than sixteen (16) hours a day; In case of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer; and

Where the work is necessary to prevent serious loss of perishable goods.

During meal period where the laborers are required to stand by for emergency work or where said meal hour is not one of complete rest, such period is considered overtime. (Pan-American Airways vs. Pan-American Employees Association, G.R. No. L-16275, February 23, 1961)

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(a) Waiting time spent by an employee shall be considered as working time if waiting is an integral part of his work or the employee is required or engaged by the employer to wait.

The eight-hour work period does not include the meal break. Nowhere in the law may it be inferred that employees must take their meals within the company premises. Employees are not prohibited from going out of the premises as long as they return to their posts on time.(Philippine Airlines vs. NLRC, G.R. No. 132805, February 2, 1999)

The thirty (30)-minute assembly is a deeplyrooted, routinary practice of the employees, and the proceedings attendant thereto are not infected with complexities as to deprive the workers the time to attend to other personal pursuits. (Arica vs. NLRC, G. R. No. 78210, February 28, 1989)

Travel Time d. Idle time, waiting time, commuting time, travel time, whether part of hours of work or not Idle time The idle time that an employee may spend for resting and during which he may leave the spot or place of work though not the premises2 of his employer, is not counted as working time only where the work is broken or is not continuous. (National Development Co. vs. CIR, G.R. No. L-15422, November 30, 1962) The fact that he picks up employees of Philnor at certain specified points along EDSA in going to the project site and drops them off at the same points on his way back from the field office going home to Marikina, Metro Manila is not merely incidental to petitioner's job as a driver. On the contrary, said transportation arrangement had been adopted, not so much for the convenience of the employees, but primarily for the benefit of the employer, herein private respondent. Since the assigned task of fetching and delivering employees is indispensable and consequently mandatory, then the time required of and used by petitioner in going from his residence to the field office and back, that is, from 5:30 a.m. to 7:00 a.m. and from 4:00 p.m. to around 6:00 p.m., which the labor arbiter rounded off as averaging three hours each working day, should be paid as overtime work. (Rada v. NLRC, G. R. No. 96078, 9 January 1992)

A laborer need not leave the premises of the factory, shop or boat in order that his period of rest shall not be counted, it being enough that he "cease to work", may rest completely and leave or may leave at his will the spot where he actually stays while working, to go somewhere else, whether within or outside the premises of said factory, shop or boat. If these requisites are complied with, the period of such rest shall not be counted. (Luzon Stevedoring Co. vs. Luzon Marine Department Union, G.R. No. L-9265 April 29, 1957)

There are special circumstances where employees, who although considered to be on forced leave during the semestral break, such as full-time professors in a university, are still entitled to compensation. Professors and teachers, during this period of time, are nevertheless burdened with correcting papers, evaluating students, meeting deadlines, and submitting grading reports within a given period, such that the semestral break could not be used effectively for the teacher's own purposes, and thus, should be considered as compensable hours worked. [University of Pangasinan Faculty Union vs. University of Pangasinan, 127 SCRA 691, 699 (1984)]

Waiting Time
Omnibus Rules Implementing the Labor Code, Book III Rule 1, Section 5.

On another note, the meaning and scope of the term workplace determine whether the time

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be paid an additional compensation equivalent to the rate for the first eight hours on a holiday or rest day plus at least thirty (30%) percent thereof.

spent within work premises is considered hours worked. (a) A worker confined within the premises of a boat or a factory shop need not leave said premises in order to enjoy his rest period, it being enough that he (1) cease to work, (2) may rest completely, and (3) leave or may leave, at his will, the spot where he actually stays while working, or to go somewhere else. In such cases, the period of rest shall not be counted as hours worked. [Luzon Stevedoring vs. Luzon Marine Department Union, G.R. No. L9265, April 29, 1957] (b) A worker who continues to report for work at the employer's previous workplace may not be compensated, if he is aware that the employer's workplace has been transferred to another area. [Aklan Electric Cooperative vs. NLRC, 323 SCRA 258 (2000)] (c) A worker who is required to assemble at a designated area at least 30 minutes prior to the start of their scheduled working hours is not compensated when he is not subject to the absolute control of the employer during this 30-minute assembly time. [Arica vs. NLRC, 170 SCRA 776 (1989)] A driver who is also required to pick up other employees at certain specified points on his way to the workplace, and likewise drops them off on his way home is entitled to overtime compensation, since the assigned task of fetching and delivering employees to the worksite is primarily for the benefit of the employer. [Rada vs. NLRC, 205 SCRA 69 (1992)] RA 10028, (approved on March 16, 2010)

Overtime work is actually the lengthening of hours developed to the interests of the employer and the requirements of his enterprise. It follows that the wage or salary to be received must likewise be increased, and a special additional amount must be added to serve either as encouragement or inducement. Wage, on the other hand, is the remuneration or earnings, however designated, capable of being expressed in terms of money, which is payable by an employer to an employee for work done. Thus, for purposes of computing overtime compensation, regular wage includes all payments which the parties have agreed shall be received during the work week. Extra, temporary and contingent compensation unrelated to work done or service rendered should not be part of the computation. [PNB vs. PEMA, G.R. No. L-30279, July 30, 1982]

Undertime not offset by overtime


Labor Code Article 88. Undertime work on any particular day shall not be offset by overtime work on any other day. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation required in this Chapter.

BUT,

If a worker should incur in undertime during his regular daily work, it should not be set off by his overtime, for that would place the schedule of working hours dependent on the employee. NAWASA vs. NWSA Consolidated Unions, 11 SCRA 766 (1964)

Waiver of overtime pay Article 88 of the Labor Code requires that an employee be paid overtime compensation notwithstanding agreement to work for a lesser wage. Consequently, such an agreement or waiver will not prevent an employee from recovering the difference between the wages paid the employee and the overtime compensation he or she is entitled to receive.

See:

e. Overtime Work
Art. 87. Overtime Work.Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work an additional compensation equivalent to his regular wage plus at least twenty-five (25%) percent thereof. Work performed beyond eight hours on a holiday or rest day shall

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Section 6. Relation to agreements. - Nothing in this Rule shall justify an employer in withdrawing or reducing any benefits, supplements or payments as provided in existing individual or collective agreements or employer practice or policy. Labor Code Article 86. Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten oclock in the evening and six oclock in the morning.

For instance, the generally observed workweek of 6 days is shortened to 5 days, but prolonging the working hours from Monday-Friday without the employer being obliged to pay overtime premium compensation for work performed in excess of 8 hours on weekdays, in exchange for the benefits that will accrue to employees. (Bisig Manggagawa sa Tryco, et al. vs. NLRC, G.R. No. 151309, October 15, 2008)

c. Night Work
Omnibus Rules Implementing the Labor Code, Book III Rule 2 (Night Shift Differential) Section 1. Coverage. - This Rule shall apply to all employees except: (a) Those of the government and any of its political subdivisions, including government-owned and/or controlled corporations; (b) Those of retail and service establishments regularly employing not more than five (5) workers; (c) Domestic helpers and persons in the personal service of another; (d) Managerial employees as defined in Book Three of this Code; (e) Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof. Section 2. Night shift differential. - An employee shall be paid night shift differential of no less than ten per cent (10%) of his regular wage for each hour of work performed between ten o'clock in the evening and six o'clock in the morning. Section 3. Additional compensation. - Where an employee is permitted or suffered to work on the period covered after his work schedule, he shall be entitled to his regular wage plus at least twenty-five per cent (25%) and an additional amount of no less than ten per cent (10%) of such overtime rate for each hour or work performed between 10 p.m. to 6 a.m. Section 4. Additional compensation on scheduled rest day/special holiday. - An employee who is required or permitted to work on the period covered during rest days and/or special holidays not falling on regular holidays, shall be paid a compensation equivalent to his regular wage plus at least thirty (30%) per cent and an additional amount of not less than ten (10%) per cent of such premium pay rate for each hour of work performed. Section 5. Additional compensation on regular holidays. - For work on the period covered during regular holidays, an employee shall be entitled to his regular wage during these days plus an additional compensation of no less than ten (10%) per cent of such premium rate for each hour of work performed.

Night-shift work is more onerous and burdensome, and thus deserves more remuneration than their day time counterparts. There is no dispute that ordinary and regular normal work is performed in the daytime, and that night work is exceptional and is only justified in unavoidable circumstances necessary for the business of the employer. [Shell Company vs. NLU, 81 Phil. 315 (1948)]

d. CBA provision vis--vis overtime work If a particular rule in computing overtimepay is provided in the CBA, this rule will prevail. (Shell Oil Workers Union vs. Shell Oil Co., 70 SCRA 223)

Rule on Computation of Overtime Pay 1. Basis for computation

Law Based on regular wage [Bisig ng Manggagawa sa PRC, supra]

CBA As provided therein [PNB vs. PEMA, supra]

If CBA is silent Apply the law again [PNB vs. PEMA, supra]

Cash Wage is the regular wage used in computing night shift and overtime work

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[the only premium standards in Chapter I, Title I, Book III of the Labor Code] [limited only to night shift and OT (Arts. 86 & 90) By cash wage, facilities provided by the employer shall not be included, meaning only cash wage shall be used in computing OT and NSDP [unlike Art. 97 (f) where wage includes fair and reasonable value xxx of board and lodging, or other facilities customarily furnished by the employer to the employee. Longevity pay is not included in the computation of overtime pay [PNB vs. PEMA, supra]. It is not part of regular wages, but a form of gratuity. 2. Work Hour is 8:00 A.M. To 4:00 P.M. OT has to be computed on a 24-hour work day schedule 3. The basis of OT claim is permitted to work, otherwise not demandable. [Manila Jockey, supra]

Exception: When the laborer was able, willing and ready to work but was illegally locked out, suspended or dismissed, or otherwise illegally prevented from working. ( Sugue v. Triumph International (Phils.) Inc., G.R. Nos. 164804 and 164784, January 30, 2009; Aklan Electric Cooperative Incorporated (AKELCO) v. NLRC [G.R. 121439, January 25, 2000) b. Coverage/Exclusions
Labor Code, Article 98; Omnibus Rules Implementing the Labor Code, Book III Rule VII Chapter I Sec. 1 This Title (Wage) shall not apply to the following: 1.Farm tenancy or leasehold; 2.Household or domestic helpers, including family drivers and other persons in the personal service of another; 3.Homeworkers engaged in needlework 4.Workers in registered cottage industries who actually work at home; 5.Workers in registered cooperatives when so recommended by the Bureau of Cooperative Development upon approval of the Secretary of Labor 6.Workers in registered barangay micro business enterprise (RA 9178)

2. Wages: General Concept


Labor Code, Article 97 (f) 1. the remuneration or earnings, however designated, capable of being expressed in terms of money, 2.whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, 3.which is payable by an employer to an employee 4.under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and 5. includes the fair and reasonable value, as determined by the Secretary of Labor and Employment, of board, lodging, or other facilities customarily furnished by the employer to the employee. 6."Fair and reasonable value" shall not include any profit to the employer, or to any person affiliated with the employer

Employees are entitled to be paid the minimum wage regardless whether they are regular or nonregular employees, except for those employees enumerated in Section 3, Rule VII of the Omnibus Rules implementing the Labor Code. [SLL International Cables Specialist, et al. vs. NLRC, et al., G.R. No. 172161, March 2, 2011, Mendoza, J.]

a. "No work no pay" principle General Rule: A fair days wage for a fair days labor or nor work no pay. The general no work, no pay rule should prevail with respect to employees wages during the suspension period, subject to existing CBA terms on leave credits and similar benefits of employees. The suspension was due to environmental causes that can affect the health and safety of those within the vicinity of Marcopper, particularly its employees. [National Mines and Allied Bar Operations 2012: Ace the Bar, Race the Car! Workers Union (NAMAWU) vs. Marcopper Mining Corporation, G.R. No. 174641, November 11, 2008]

Cooperatives Still Exempted from Minimum Wage Law In view of the foregoing, we hold that cooperatives may still be exempted from the statutory minimum wage. [Benguet Electric Cooperative v. FerrerCalleja, G.R. No. 79025, December 29, 1989]

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c. Facilities vs supplements
IRR Book III Rule VII Section 5 Facilities are articles or services for the benefit of the employee or his family. Facilities shall not include tools of the trade pr articles or service primarily for the benefit of the employer or necessary to the conduct of the employers business. NB: The second paragraph is essentially the definition of a supplement.

UCLASS Bar Operations: Labor Law Society

In determining whether a privilege is a facility, the criterion is not so much its kind but its purpose. (Millares vs. NLRC and PICOP, 305 SCRA 500 (1999))

Facilities are items of expense necessary for the laborers and his familys existence and subsistence. (States Marine Corp. vs. Cebu Seamen's Association, Inc., L-12444, February 28,1963) The benefit or privilege given to the employee which constitutes an extra remuneration above and over his basic or ordinary earning or wage is supplement; [State Marine Corp. vs. Cebu Seamen's Association, Inc., 7 SCRA 294 (1963); (1988 Bar, XIIb)] and when said benefit or privilege is part of the laborers' basic wages, it is a facility. The distinction lies not so much in the kind of benefit or item given, but in the purpose for which it is given. [SLL International Cables Specialist, et al. vs. NLRC, et al., G.R. No. 172161, March 2, 2011, Mendoza, J.] So, if they are not so furnished, the laborer would spend and pay for them just the same. [Atok-Big Wedge Assn. vs. Atok-Big Wedge Co., (97 Phil. 294)]

Although it is quite easy to comprehend board and lodging, it is not so with facilities. Thus, Sec. 5, Rule VII, Book III, of the Rules Implementing the Labor Code gives meaning to the term as including articles or services for the benefit of the employee or his family but excluding tools of the trade or articles or service primarily for the benefit of the employer or necessary to the conduct of the employer's business. The Staff/Manager's allowance may fall under lodging but the transportation and Bislig allowances are not embraced in facilities on the main consideration that they are granted as well as the Staff/Manager's allowance for respondent PICOP's benefit and convenience, i.e., to insure that petitioners render quality performance. In determining whether a privilege is a facility, the criterion is not so much its kind but its purpose. [States Marine Corporation vs. Cebu Seamen's Association, Inc., No. L-12444, 28 February 1963, 7 SCRA 294] That the assailed allowances were for the benefit and convenience of respondent company was supported by the circumstance that they were not subjected to withholding tax. [Liduvino M. Millares, et al. vs. NLRC, et al., G.R. No. 122827, March 29, 1999, 2nd Division, Bellosillo, J.]

An employer cannot simply deduct from the employee's wages the value of the board and lodging without satisfying the ff. requisites: (1) proof that such facilities are customarily furnished by the trade/business of the employer; (2) voluntary acceptance in writing by the employees of the deductible facilities; and (3) proof of the fair and reasonable value of the facilities charged. Facilities and Supplements distinguished [S.I.P. Food House, supra; SLL International, supra] Category Facilities What it is As Articles or services/ (not much diffence) items of expense Purpose For the benefit of the employee and his family; for their existence and subsistence

Supplements Extra remuneration or special benefits/ articles or services/ tools of the trade For the benefit or convenience of the employer

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How treated

UCLASS Bar Operations: Labor Law Society


Part of wage so it is deductible Independent of the wage so not deductible

Requirements for deducting vale of facilities The free board and lodging SIP furnished the employees cannot operate as a set-off for the underpayment of their wages. It was held in Mabeza v. National Labor Relations Commission that the employer cannot simply deduct from the employees wages the value of the board and lodging without satisfying the following requirements: (1) proof that such facilities are customarily furnished by the trade; (2) voluntary acceptance in writing by the employees of the deductible facilities; and (3) proof of the fair and reasonable value of the facilities charged. It is clear from the records that SIP failed to comply with these requirements. (S.I.P. Food House and Mr. and Mrs. Alejandro Pablo Vs. Restituto Batolina, et al., G.R. No. 192473, October 11, 2010.) d. Wages vs. salaries Wages and salary are in essence synonymous. (Songco, et al. vs. National Labor Relations Commission. G.R. Nos. 50999-51000, March 23, 1990) The distinction between salary and wage in Gaa was for the purpose of Article 1708 of the Civil Code which mandates that, [t]he laborers wage shall not be subject to execution or attachment, except for debts incurred for food, shelter, clothing and medical attendance. In labor law, however, the distinction appears to be merely semantics. Paramount and Evangelista may have involved wage earners, but the petitioner in Espejo was a General Manager with a monthly salary of P9,000.00 plus privileges. That wage and salary are synonymous has been settled in Songco v. NLRC. [Equitable Banking Corp v. Ricardo Sapac, 490 SCRA 381 (2006)]

e. Wage Distortion The concept of wage distortion assumes an existing grouping or classification of employees which establishes distinctions among such employees on some relevant or legitimate basis. This classification is reflected in a differing wage rate for each of the existing classes of employees. While Art. 124 provides for Grievance Machinery which ends up in Voluntary Arbitration, (organized establishments) and NCMB conciliations which eventually maybe referred to Compulsory Arbitration by Labor Arbiter, such are not the only valid ways with which a wage distortion may be corrected. A CBA increase which re-establishes the wage gap, or a unilateral grant by the employer which also restores said gap are valid wage distortion correction schemes. [National Federation of Labor vs. NLRC, 234 SCRA 311, 322323] Definition
Labor Code, Article 124

Wages Paid for skilled or unskilled manual labor Not subject to execution, garnishment or attachment except for debts related to necessities (Article 1708)

Salaries Paid to white collar workers and denote a higher grade of employment Not exempt from execution, garnishment or attachment. (Gaa v. Court of Appeals, L44169, December 3, 1985)

Wages are defined as remuneration or earnings, however, designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for service rendered or to be rendered. [Chavez v. NLRC, G.R. No. 146530, January 17, 2005]

A wage distortion shall mean a situation where an increase in prescribed wage results in the elimination of severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation.

NOTES:

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Wages are defined as remuneration or earnings, however, designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for service rendered or to be rendered. [Chavez v. NLRC, G.R. No. 146530, January 17, 2005] The distinction between salary and wage in Gaa was for the purpose of Article 1708 of the Civil Code which mandates that, [t]he laborers wage shall not be subject to execution or attachment, except for debts incurred for food, shelter, clothing and medical attendance. In labor law, however, the distinction appears to be merely semantics. Paramount and Evangelista may have involved wage earners, but the petitioner in Espejo was a General Manager with a monthly salary of P9,000.00 plus privileges. That wage and salary are synonymous has been settled in Songco v. NLRC. [Equitable Banking Corp v. Ricardo Sapac, 490 SCRA 381 (2006)]

4. The existence of the distortion in the same region of the country. (Prubankers Association vs. Prudential Bank and Trust Company, G.R. No. 131247, January 25, 1999)

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How to Resolve 1. Organized establishment (with bargaining representative) -employer and the union shall negotiate to correct the distortions -disputes shall be resolved through the grievance procedure -if still unresolved, voluntary arbitration. 2. Unorganized establishment -ERs and Employees shall endeavor to correct such distortions -disputes shall be settled through the National Conciliation and Mediation Board -If still unresolved after 10calendar days of conciliation, it shall be referred to the appropriate branch of the NLRC compulsory arbitration 3. Both employer and employee cannot use economic weapons -employer cannot declare a lock-out; employee cannot declare a strike because the law has provided for a procedure for settling -the salary or wage differential does not need to be maintained. (National Federation of Labor vs. NLRC, G.R. No. 103586 July 21, 1994)

f. CBA vis--vis Wage Orders CBA creditability In determining an employees regular wage, the pertinent stipulations in the CBA are controlling, provided the result is not less than statutory requirement. (PNB vs. PEMA, L-30279 July 30, 1982)

(P.I. Manufacturing, Incorporated vs. P.I. Manufacturing Supervisors and Foreman Association and the National Labor Union, G.R. No. 167217, February 4, 2008) There is wage distortion based on the prevailing rates of the supervisors and foremen (before the increase in wages based on the CBA). If RA 6640 would be implemented, the gaps existing between and among the wage rates of all the employees of petitioner would have been substantially altered and reduced. In the present case, only three (3) of the union members are receiving wages below P100.00, thus For Private and Personal Use Only to29 entitled to the increase. To direct petitioner grant an across-the-board increase to all of them would be harsh and unfair to the employer. However, due to the CBA provision, providing for

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Labor Law Bar Notes


University of Cebu College of Law UCLASS Bar Operations: Labor Law Society

Diminution of Benefits; Negative Definition Since under the CBA, overtime pay was not given to each employee consistently, deliberately and unconditionally, but as compensation for additional services rendered, the employer's change of schedule which is not prohibited by the CBA, resulting in lesser overtime work, does not constitute a diminution of benefits under Art. 100 of the Labor Code [Manila Jockey Club Employees Labor Union-PTGWO vs. Manila Jockey Club, Inc., 517 SCRA 707, 712-713, March 7, 2007] Rationale for Art. 100: Employees are protected by law from unwarranted practices that diminish an employee's compensation without his knowledge and consent [Pacific Banking Corporation vs. Clave, 128 SCRA 112] The prohibition against elimination or diminution of benefits set out in Article 100 of the Labor Code is specifically concerned with benefits already enjoyed at the time of the promulgation of the Labor Code. Article 100 does not purport to apply to situations arising after the promulgation date of the Labor Code. Even assuming arguendo that Article 100 applies to the case at bar, the same does not prohibit a union from offering and agreeing to reduce wages and benefits of the employees. In Rivera v. Espiritu, this Court

g. Non-diminution of benefits Diminution of Benefits, defined. Diminution of benefits is the unilateral withdrawal by the employer of benefits already enjoyed by the employees. [TSPIC Corporation vs. TSPIC Employees Union (FFW), G.R. 163419, Feb. 13, 2008]

General Rule: Prohibition against elimination or diminution of benefits. (Labor Code, Article 100)

Requisites If the following are met, the employer cannot remove or reduce benefits: 1. Ripened company policy: Benefit is founded on a policy which has ripened into a practice over a long period. (Prubankers Association Bar Operations 2012: theCo. Bar,1990) Race the Car! vs. Prudential BankAce and 2. Practice is consistent and deliberate. 3. Not due to error in the construction or application of a doubtful or difficult question of

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ruled that the right to free collective bargaining includes the right to suspend it. (Insular Hotel Employees Union-NFL vs. Waterfront Insular Hotel Davao, G.R. No. 174040-41, September 22, 2010 h. Workers preference in case of bankruptcy
Labor Code, Article 110 In the event of bankruptcy or liquidation of an employers business, his workers shall enjoy first preference as regards their wages and other monetary claims, any provisions of law to the contrary notwithstanding. Such unpaid wages and monetary claims shall be paid in full before claims of the government and other creditors may be paid. (As amended by Section 1, Republic Act No. 6715, March 21, 1989) New Civil Code Article 1707. The laborer's wages shall be a lien on the goods manufactured or the work done. Article 2241. With reference to specific movable property of the debtor, the following claims or liens shall be preferred: (6) Claims for laborers' wages, on the goods manufactured or the work done; Article 2242. With reference to specific immovable property and real rights of the debtor, the following claims, mortgages and liens shall be preferred, and shall constitute an encumbrance on the immovable or real right: (2) For the unpaid price of real property sold, upon the immovable sold; (3) Claims of laborers, masons, mechanics and other workmen, as well as of architects, engineers and contractors, engaged in the construction, reconstruction or repair of buildings, canals or other works, upon said buildings, canals or other works;

(Development Bank of the Philippines vs. NLRC, G.R. No. 108031 March 1, 1995) Article 110 of the Labor Code cannot be viewed in isolation but must be read in relation to the Civil Code scheme on classification and preference of credits. Requirements of judicial liquidation/ declaration of bankruptcy still intact; workers must also file their claims. A preference applies only to claims which do not attach to specific properties. A lien creates a charge on a particular property. The right of first preference as regards unpaid wages recognized by Article 110 does not constitute lien on the property of the insolvent debtor in favor of workers. It is but a preference of credit in their favor, a preference in application.

Jurisprudence Summary It only creates a preference and not a lien so; Worker preference shall apply only to ordinary preferred credits (meaning unencumbered property) It must yield to special preferred credits where liens are attached; Covers unpaid wages as well as other monetary claims; and Judicial declaration of insolvency/bankruptcy and filing of claims by workers still required

Republic vs. Peralta (G.R. No. L-56568 May 20, 1987) Article 110 of the Labor Code did not sweep away the overriding preference accorded under the scheme of the Civil Code:

Rubberworld (Phils.), Inc., vs. NLRC (1999) Preference does not apply when the employer corporation is under rehabilitation/receivership.

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Tax claims of the government or any subdivision thereof which constitute alien upon properties of the Insolvent still preferred over wages.

Labor Law Bar Notes


University of Cebu College of Law UCLASS Bar Operations: Labor Law Society
General rule: No employer shall require his worker to make deposits from which deductions shall be made for the reimbursement of loss of or damage to tools, materials, or equipment supplied by the employer. Exception: 1. Recognized industry practice or

i. Labor Code provisions for wage protection


Labor Code, Article 112 No employer shall limit or otherwise interfere with the freedom of any employee to dispose of his wages. He shall not in any manner force, compel, or oblige his employees to purchase merchandise, commodities or other property from any other person, or otherwise make use of any store or services of such employer or any other person. Prohibition against wage deduction (Article 113) General rule: No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees. Exceptions: In cases where the worker is insured with his consent by the employer, and the deduction is to recompense the employer for the amount paid by him as premium on the insurance; For union dues, in cases where the right of the worker or his union to check-off has been recognized by the employer or authorized in writing by the individual worker concerned; and In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment, such as: Employees debt to employer is due and demandable (Civil Code Article 1706); Attachment or execution in cases of debts incurred for necessities: food, shelter, clothing, medical attendance (Civil Code Article 1708); Withholding tax; Deductions of a legally established cooperative; Payment to 3rd parties upon written authority by employee; Deductions for loss or damage; SSS, Medicare, Pag-IBIG premiums. It shall be unlawful to make any deduction from the wages of any Employee for the benefit of the Employer as consideration of a promise of employment or retention in employment (Article 117, Labor Code) Or to retaliate against the employee who filed a complaint. (Article 118, Labor Code) Article 222 of the Labor Code requires an individual written authorization as a prerequisite to wage deductions. Prohibition seeks to protect the employee against unwarranted practices that would diminish his compensation without his knowledge and consent. (Radio Communication of the Phil. Inc., vs. Sec. of Labor, 1989) Prohibition against requirement to make deposits for loss or damage (Article 114-115, Labor Code)

2. When such is necessary or desirable as determined by the Secretary of Labor and Employment in appropriate rules and regulations. 3. Deductions from the deposits of an employee for the actual amount of the loss or damage can be made provided that the: - EE has been heard thereon, - His responsibility has been clearly shown, - Fair and reasonable deduction which should not exceed 20% of the employees weekly wages.

Five J Taxi vs. NLRC, 235 SCRA 556, 562 (1994) a) This article providing the rule on deposits for loss or damage to tools, materials or equipment supplied by the employer does not apply to or permit deposits to defray any deficiency which the taxi driver may incur the remittance of his boundary. b) When employee stops working for employer, the alleged purpose for the unauthorized deposits no longer exists. c) Any balance due must be returned to employee with legal interest.
Labor Code Prohibition against withholding of wages (Article 116) - It shall be unlawful for any person, directly or indirectly, - to withhold any amount from the wages of a worker or - induce him to give up any part of his wages by force, stealth, intimidation, threat or by any other means whatsoever without the workers consent. Prohibition against deduction to ensure employment (Article 117) - It shall be unlawful to make any deduction from the wages of any employee - for the benefit of the employer or his representative or intermediary - as consideration of a promise of employment or retention in employment. Prohibition against retaliatory measures (Article 118) - It shall be unlawful for an employer - to refuse to pay or reduce the wages and benefits, discharge or - in any manner discriminate against any employee who has filed any complaint or instituted any proceeding under this Title or has testified or is about to testify in such proceedings. Prohibition against false reporting (Article 119) - It shall be unlawful for any person

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Article 1708 of the New Civil Code to operate in favor of any but those who are laboring men or women in the sense that their work is manual. Persons belonging to this class usually look to the reward of a days labor for immediate or present support, and such persons are more in need of the exemption than any others. - to make any statement, report, or record filed or kept pursuant to the provisions of this Code - knowing such statement, report or record to be false in any material respect.

Special Steel Products, Inc. vs. Lutgardo Villareal, et al., G.R. No. 143304, July 8, 2004 Petitioner contends that as a guarantor, it could legally withhold respondent Villareals monetary benefits as a preliminary remedy pursuant to Article 2071 of the Civil Code, as amended. As to respondent So, petitioner, citing Article 113 of the Labor Code, as amended, in relation to Article 1706 of the Civil Code, as amended, maintains that it could withhold his monetary benefits being authorized by the memorandum he signed. Article 116 of the Labor Code, as amended, provides:
ART. 116. Withholding of wages and kickbacks prohibited. It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages (and benefits) of a worker or induce him to give up any part of his wages by force, stealth, intimidation, threat or by any other means whatsoever without the workers consent.

j. Allowable deductions without employees consent Note: Please refer to the exceptions to prohibition against wage deduction in the previous subsection. k. Attorneys fees and union service fee in labor cases
Labor Code Article 111 In cases of unlawful withholding of wages, the culpable party may be assessed attorneys fees equivalent to ten percent of the amount of wages recovered. It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of wages, attorneys fees which exceed ten percent of the amount of wages recovered.

The above provision is clear and needs no further elucidation. Indeed, petitioner has no legal authority to withhold respondents 13th month pay and other benefits. What an employee has worked for, his employer must pay. Thus, an employer cannot simply refuse to pay the wages or benefits of its employee because he has either defaulted in paying a loan guaranteed by his employer; or violated their memorandum of agreement; or failed to render an accounting of his employers property.

NOTES: court; a) Extraordinary concept awarded by

IRR Book II Rule X Section 11 Prohibition against keeping of employees records in a place than the workplace - All employment records of the employees shall be kept and maintained by the employer in or about the premises of the work place - main or branch office of the establishment, if any, depending upon where the employees are regularly assigned. - The keeping of the employee's records in another place is prohibited. Civil Code (Article 1708) General Rule: The laborers wages does shall not be subject to execution or attachment. Exception: for debts incurred for food, shelter, clothing and medical attachment.

10% against culpable party for unlawful w/holding of wages; * Art. 111(a) is extraordinary attorney's fees. It does not require proof that the employer acted with malice or bad faith in withholding the wage. Proof that lawful wages were not paid is enough [PAL Shipping Phils., Inc., et al. vs. NLRC, et al. [G.R. 153031, Dec. 14, 2006] b) Ordinary concept paid by client to a lawyer as reasonable compensation; 10% for lawyer in recovery of wages cases. * The award of attorney's fees, though not prayed for, is sanctioned by law and must be upheld [Marivel Trading, Inc. vs. NLRC, 525 SCRA 708, 733 (2007). Rules: (1)In actions for (1) recovery of wages or (2) where an employee was forced to litigate and thus incurred expenses to protect his rights and

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-EXCEPT: when Congress passes a new law affecting wages or other supervening circumstances If decides to ISSUE a wage order, the wage order takes effect after 15 days from complete publication in at least 1 newspaper of general circulation in the region Appeal wage order to Commission within 10 calendar days; mandatory for the Commission to decide within 60 calendar days from filing filing of the appeal does not stay the order unless the person appealing such order shall file an undertaking with a surety or sureties satisfactory to the Commission for the payment to the employees affected by the order of the corresponding increase, in the event such order is affirmed. (As amended by Republic Act No. 6727, June 9, 1989) interests, a maximum award of ten percent (10%) of the monetary award by way of attorney's fees is legally and morally justifiable under Art. 111 of the Labor Code. Xxx Forced to litigate recovery of wages basics of attorneys fees (Rutaquio vs. NLRC, (Oct. 19, 1999); Marsaman Manning Agency vs. NRLC, (Aug. 25, 1999) (2)No attorneys fees when complaint is represented by PAO. (Lambo vs. NLRC, G.R. No. 111042, Oct. 26, 1999, 317 SCRA 420) (3)Non-Lawyers Not Entitled to Attorney's Fees l. Criteria/Factors for Wage Setting
Labor Code Article 124 The regional minimum wages to be established by the Regional Board shall be as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for the health, efficiency and general well-being of the employees within the framework of the national economic and social development program. In the determination of such regional minimum wages, the Regional Board shall, among other relevant factors, consider the following: a. The demand for living wages; b. Wage adjustment vis--vis the consumer price index; c. The cost of living and changes or increases therein; d. The needs of workers and their families; e. The need to induce industries to invest in the countryside; f. Improvements in standards of living; g. The prevailing wage levels; h. Fair return of the capital invested and capacity to pay of employers; i. Effects on employment generation and family income; and j. The equitable distribution of income and wealth along the imperatives of economic and social development.

3. Rest Day
IRR Book III Rule III Section 1. General statement on coverage. - This Rule shall apply to all employers whether operating for profit or not, including public utilities operated by private persons. Section 2. Business on Sundays/Holidays. - All establishments and enterprises may operate or open for business on Sundays and holidays provided that the employees are given the weekly rest day and the benefits as provided in this Rule. Section 3. Weekly rest day. - Every employer shall give his employees a rest period of not less than twenty-four (24) consecutive hours after every six consecutive normal work days. Section 4. Preference of employee. - The preference of the employee as to his weekly day of rest shall be respected by the employer if the same is based on religious grounds. The employee shall make known his preference to the employer in writing at least seven (7) days before the desired effectivity of the initial rest day so preferred. Where, however, the choice of the employee as to his rest day based on religious grounds will inevitably result in serious prejudice or obstruction to the operations of the undertaking and the employer cannot normally be expected to resort to other remedial measures, the employer may so schedule the weekly rest day of his choice for at least two (2) days in a month. Section 5. Schedule of rest day. (a) Where the weekly rest is given to all employees simultaneously, the employer shall make known such rest period by means of a written notice posted conspicuously in the work place at least one week before it becomes effective. (b) Where the rest period is not granted to all employees simultaneously and collectively, the employer shall make known to the employees their respective schedules of weekly rest through written notices posted conspicuously in the work place at least one week before they become effective. Section 6. When work on rest day authorized. - An employer may require any of his employees to work on his scheduled rest day for the duration of the following emergencies and exceptional conditions: (a) In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other

Procedure for Wage Fixing by Regional Board (Labor Code Article 123) investigate and study all pertinent facts; and based on the standards and criteria set in Article 124 conduct public hearings/consultations, giving notices to employees and employers groups, provincial, city and municipal officials and other interested parties. Decide to ISSUE or NOT TO ISSUE a wage order -wage orders issued may not be disturbed for 12 months from effective date; -this serves as a bar for petitions for wage hikes as well

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any benefit granted to the employees under existing laws, agreements, and voluntary employer practices. disaster or calamity, to prevent loss of life or property, or in cases of force majeure or imminent danger to public safety; (b) In case of urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer; (c) In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures; (d) To prevent serious loss of perishable goods; (e) Where the nature of the work is such that the employees have to work continuously for seven (7) days in a week or more, as in the case of the crew members of a vessel to complete a voyage and in other similar cases; and (f) When the work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon. No employee shall be required against his will to work on his scheduled rest day except under circumstances provided in this Section: Provided, However, that where an employee volunteers to work on his rest day under other circumstances, he shall express such desire in writing, subject to the provisions of Section 7 hereof regarding additional compensation. Section 7. Compensation on rest day/Sunday/holiday. (a) Except those employees referred to under Section 2, Rule I, Book Three, an employee who is made or permitted to work on his scheduled rest day shall be paid with an additional compensation of at least 30% of his regular wage. An employee shall be entitled to such additional compensation for work performed on a Sunday only when it is his established rest day. (b) Where the nature of the work of the employee is such that he has no regular work days and no regular rest days can be scheduled, he shall be paid an additional compensation of at least 30% of his regular wage for work performed on Sundays and holidays. (c) Work performed on any special holiday shall be paid with an additional compensation of at least 30% of the regular wage of the employees. Where such holiday work falls on the employee's scheduled rest day, he shall be entitled to additional compensation of at least 50% of his regular wage. (d) The payment of additional compensation for work performed on regular holiday shall be governed by Rule IV, Book Three, of these regulations. (e) Where the collective bargaining agreement or other applicable employment contract stipulates the payment of a higher premium pay than that prescribed under this Section, the employer shall pay such higher rate. Section 8. Paid-off days. - Nothing in this Rule shall justify an employer in reducing the compensation of his employees for the unworked Sundays, holidays, or other rest days which are considered paid-off days or holidays by agreement or practice subsisting upon the effectivity of the Code. Section 9. Relation to agreements. - Nothing herein shall prevent the employer and his employees or their representatives in entering into any agreement with terms more favorable to the employees than those provided herein, or be used to diminish

a. Right to weekly rest day


Labor Code Article 91 (a) It shall be the duty of every employer, whether operating for profit or not, to provide each of his employees a rest period of not less than twenty-four (24) consecutive hours after every six (6) consecutive normal work days.

b. Preference of the employee


Labor Code Article 91 (b) The employer shall determine and schedule the weekly rest day of his employees subject to collective bargaining agreement and to such rules and regulations as the Secretary of Labor and Employment may provide. However, the employer shall respect the preference of employees as to their weekly rest day when such preference is based on religious grounds.

c. When work on rest day authorized


Labor Code Article 92 The employer may require his employees to work on any day: In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life and property, or imminent danger to public safety; In cases of urgent work to be performed on the machinery, equipment, or installation, to avoid serious loss which the employer would otherwise suffer; In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures; To prevent loss or damage to perishable goods; Where the nature of the work requires continuous operations and the stoppage of work may result in irreparable injury or loss to the employer; and Under other circumstances analogous or similar to the foregoing as determined by the Secretary of Labor and Employment.

4. Holidays Note: RA No. 9492 (Approved on July 27, 2007) a) Regular Holidays New years Day Maundy Thursday

January 1 Movable date

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Good Friday Eidul Fitr Araw ng Kagitingan (Bataaan and Corregidor Day) Labor Day Independence Day National Heroes Day Bonifacio Day Christmas Day Rizal Day b) Nationwide Special Holidays: Ninoy Aquino Day All Saints Day Last Day of the Year

UCLASS Bar Operations: Labor Law Society


Movable date Movable date Monday nearest April 9 Monday nearest May 1 Monday nearest June 12 Last Monday of August Monday nearest November 30 December 25 Monday nearest December 30 Monday nearest August 21 November 1 December 31

a. Right to holiday pay


Art. 94. Right to Holiday Pay. (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers; (b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; and (c) As used in this Article, holiday includes: New Year's Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth of December and the day designated by law for holding a general election.

Azucena: Regular Holidays 1) IF Holiday is the employee's Regular Workday, and unworked 100% If worked: 1st 8 hours 200% (the given hourly rate) excess of 8 hours plus 30% of hourly rate 2) IF Holiday is employee's Rest Day, and unworked 100% If worked: 1st 8 hours plus 30% of 200% (the given hourly rate) excess of 8 hours plus 30% of hourly rate for the day Special Day 1) IF unworked, no pay shall accrue unless otherwise provided in a CBA, or established company practice to grant wages on this given day 2) IF worked: 1st 8 hours plus 30% of the daily rate (100%) excess of 8 hours plus 30% of hourly rate on that day 3) IF it falls on employee's Rest Day, and worked 1st 8 hours plus 50% of the daily rate of 100%

holiday pay is a statutory benefit demandable under the law. Since a worker is entitled to the enjoyment of ten paid regular holidays, the fact that two holidays fall on the same date should not operate to reduce to nine the ten holiday pay benefits a worker is entitled to receive. [Asian Transmission Corporation vs. Court of Appeals, G.R. No. 144664, March 15, 2004]

In case of absences on leave of absence with pay the day before with pay on leave of absence without pay without pay day before holiday is non-working day apply (a) & (b)

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excess of 8 hours plus 30% of hourly rate on that day Special Working Holiday: The employee is entitled only to his basic rate, if worked. No premium pay accrues on this day, but considered as ordinary working day.

In case of temporary cessation of work temporary periodic closure with pay closure due to business reverses WITHOUT PAY

Of teachers, piece workers, seafarers, seasonal workers, etc. On the issue of holiday pay, however, two (2) contradictory views exist in jurisprudence: (1) In Labor Congress vs. NLRC, (290 SCRA 509) the Supreme Court held that piecerate workers are granted holiday pay based on Section 8(b), Rule IV, Book III. The argument is that the Omnibus Rules implementing the Labor Code exclude certain employees from receiving benefits such as night differential pay, holiday pay, service incentive leave pay, and 13th month pay, i.e., field personnel and other employees whose time and performance is unsupervised by the employer, including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of time consumed in the performance thereof. BUT that piece-rate workers do not fall under this group. (2) In Makati Haberdashery, Inc. vs. NRLC, (179 SCRA 448) on the other hand, piecerate workers are NOT entitled to holiday pay, pursuant to Section 1(e), Rule IV, Book III. The Supreme Court in said case reasoned that since piece-rate workers are not entitled to service incentive leave pay, because they fall under one of the exceptions in Section 1(d), Rule V, Book III of the Implementing Rules, they being paid at a fixed amount for performing work irrespective of time consumed, for this same reason, thus, they are not entitled to holiday pay as well. HOWEVER,

In the case of Lambo vs. NLRC, [317 SCRA 421 (1999)] the Supreme Court recognized that there are two categories of employees paid by results: (1) those whose time and performance are supervised by the employer where an element of control and supervision over the manner work is to be performed, especially if worker performs his work in the company premises; and (2) those whose time and performance are unsupervised the employer's control is over the result of the work only. a. Both classes of workers are paid per unit accomplished. Piece-rate payment is generally practiced in garment factories where work is done in the company premises, while payment on pakyao and takay basis is commonly observed in the agricultural industry, such as in sugar plantations where the work is performed in bulk or in volumes difficult to quantify. [Lambo vs. NLRC, supra at 426]

Petitioners Lambo, et. al. belong to the first category, i.e., supervised employees. However, the Court further held The awards for overtime pay, holiday pay and 13th month pay are in accordance with our finding that petitioners are regular employees [ibid., at 431-433] forgetting that Art. 82 excluded workers who are paid by results from the coverage of Title I, Book III of the Labor Code which includes overtime work (Art. 87) and holiday pay (Art. 94). In short, what the S.C. should have held is Lambo, et. al. are employees, their work being supervised (control); but they are not entitled to overtime pay and holiday pay due to Art. 82, Labor Code.

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b. Exclusions from coverage Government employees, including those in chartered corporation. Rental/Service establishments with less than 10 employees. Those exempted from coverage of title (Domestic, etc.) V/L (as SIL) are among those incomes intended as replacements for regular income that depend on days worked. [Davao Integrated Port Stevedoring Services vs. Abarquez, 220 SCRA 197] The vacation leave privilege was not intended to serve as additional salary, but as a non-monetary benefit. To give the employees the option not to consume it with the aim of converting it into cash at the end of the year would defeat the very purpose of the vacation leave. [PNCC Skyway, supra] VSEV: This rule is proof that SIL does not have to depend on authorized absences for an employee to be entitled thereto.

5. Leaves: a. Service Incentive Leave Pay The basis of the grant of Service Incentive Leave to qualified employees is found in Article 95 of the Labor Code. Section 2, Rule V, Book III of the Omnibus Rules contains the rules and regulations for the implementation this right. Right to service incentive leave Every employee (subject to the exceptions below) who has rendered at least one year of service is entitled to yearly service incentive leave of five days with pay. At least one year of service Meaning The term at least one-year service means service for not less than 12 months, whether continuous or broken. The 12-month period shall be reckoned from the date the employee started working, including authorized absences and paid regular holidays. However, where the operation of the establishment as a matter of practice or policy, or that provided in the employment contract, is less than 12 months, such period shall be considered as one year.

Grant of V/L and S/L is not a standard of law, but a prerogative of management. [Virginia Sugue vs. Triumph Intl. Phils., Inc., G.R. No. 164804, Jan. 30, 2009] Exclusions from coverage The following employees are excluded from entitlement to SIL under the Labor Code (but they may be entitled to the same or similar benefits if so provided under other laws, or collective bargaining agreement or employment contract): 1. Those of the government and any of its political subdivisions, including government-owned and controlled corporations;

Grant of leave benefits in excess of what is provided here shall NOT be subject of arbitration or any court action. VSEV: Computation of 1 year includes holidays authorized absences [Secs. 2 & 3, Rule V, Book Bar Operations 2012: Acethose the Bar, Race the Car III] I think even on AWOL as this subjects him to separate penalty. 1. It is here where absence is considered

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2. Domestic helpers and persons personal service of another; in the

(b) The full payment shall be advanced by the employer within thirty (30) days from the filing of the maternity leave application; (c) That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits provided by this Act for the same period for which daily maternity benefits have been received; (d) That the maternity benefits provided under this section shall bepaid only for the first four (4) deliveries or miscarriages; (e) That the SSS shall immediately reimburse the employer of one hundred percent (100%) of the amount of maternity benefits advanced to the employee by the employer upon receipt of satisfactory proof of such payment and legality thereof; and (f) That if an employee member should give birth or suffer miscarriage without the required contributions having been remitted for her by her employer to the SSS, or without the latter having been previously notified by the employer of the time of the pregnancy, the employer shall pay to the SSS damages equivalent to the benefits which said employee member would otherwise have been entitled to.

3. Managerial employees as defined in Book Three of the Labor Code; 4. Field personnel and other employees whose performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof; 5. Those who are already enjoying the benefit herein provided; 6. Those enjoying vacation leave with pay of at least five days; and 7. Those employed in establishments regularly employing less than ten employees. (Omnibus Rules) Commutable nature of benefit Under the Omnibus Rules, the unused service incentive leave is commutable to its money equivalent at the end of the year. [N.B. Not found in the LC.]

Availment The maternity benefits provided under this section shall bepaid only for the first four (4) deliveries or miscarriages; c. Paternity Leave RA 8187 grants paternity leave of 7 days with full pay to all married male employees in the private and public sectors. Paternity leave is available only for the first four deliveries of the legitimate spouse with whom the husband is cohabiting. The purpose of paternity leave is to enable the husband to lend support to his wife during the period of recovery and/or in the nursing of the newly-born child. Coverage

b. Maternity Leave RA 8282 (SSS Law) Coverage


SEC. 14-A. Maternity Leave Benefit. A female member who has paid at least three (3) monthly contributions in the twelvemonth period immediately preceding the semester of her childbirth or miscarriage shall be paid a daily maternity benefit equivalent to one hundred percent (100%) of her average daily salary credit for sixty (60) days or seventy-eight (78) days in case of caesarian delivery, xxx

SECTION 2. xxx every married male employee in the private and public sectors shall be entitled to a paternity leave of seven (7) days with full pay for the first four (4) deliveries of the legitimate spouse with whom he is cohabiting. The male employee applying for paternity leave shall notify his employer of the pregnancy of his legitimate spouse and the expected date of such delivery.

Conditions to entitlement Paternity Leave Benefits 1) Married male employee in private or public sector 2) An employee at the time of delivery

Conditions to entitlement
SEC. 14-A. Maternity Leave Benefit. xxx, subject to the following conditions: (a) That the employee shall have notified her employer of her pregnancy and the probable date of her childbirth, which notice shall be transmitted to the SSS in accordance with the rules and regulations it may provide;

3) Cohabiting with his spouse at the time of delivery (includes childbirth, miscarriage or abortion)

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4) Has applied for paternity leave within a reasonable period from expected delivery 5) His wife gave birth or suffered a miscarriage. [Sec. 3, Revised Implementing Rules of RA 8187] Availment church decree, and your child is in your custody. You are a parent left solo or alone with the responsibility of parenthood because your spouse abandoned you for at least one year. You are a parent left solo or alone with the responsibility of parenthood because your spouse is detained or is serving sentence for a crime for at least one year. You are an unmarried mom or dad who has preferred to keep and rear your child yourself, instead of having others care for them or give them up to a welfare institution. You solely provide parental care and support to a child or children. You assume the responsibility of head of the family as a result of the death, abandonment, disappearance or prolonged absence of the children's parents or solo parent. You are a victim of rape and/or other crimes against chastity, have given birth to a child as a result and have decided to keep and raise your child. Conditions to entitlement Conditions for Availment 1. Solo parent has rendered at least 1 year of service (continuous or broken) 2. has notified employer of the availment within a reasonable time; and 3. has presented a Solo Parent Identification Card to the employer. Availment Parental leave is not convertible to cash unless otherwise provided in CBA.
Sec. 8. Parental Leave. - In addition to leave privileges under existing laws, parental leave of not more than seven (7) working days every year shall be granted to any solo parent employee who has rendered service of at least one (1) year.

Notification: A married male employee shall be entitled to PL by filing the requisite leave application form within a reasonable period prior to the expected delivery. Availment: The paternity benefits may be enjoyed by the qualified male employee on the days immediately before, during and after childbirth or miscarriage of his legitimate spouse. Validation Requirement: Any employee availing the paternity benefits may be required to furnish the necessary documents (e.g. marriage certificate, birth certificate of the newly born child, medical certificate, etc.) [Sections 3-5 of the Paternity Leave Act of 1996]

d. Parental Leave Parental Leave (for Solo Parents) RA 8972 grants a solo parent employee parental leave of not more than 7 working days every year. Coverage Considered Solo Parent: You are a parent left alone with the responsibility of parenthood because of the death of your spouse. You are a parent left alone with the responsibility of parenthood because of any physical and/or mental incapacity of your spouse as certified by a public medical practitioner. You are a parent left alone with the responsibility of parenthood because you have legally separated from your spouse or because you have been separated for at least one year and your child is in your custody. You are a parent left alone with the responsibility of parenthood because your marriage was annulled by a court or a

e. Leaves for victims of violence against women RA 9262 Coverage

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Leave available to an Employee (not only for women) who are victims of violence, either physical, sexual or psychological. Inc. vs. Court of Appeals, 338 SCRA 70] Distribution All service charges collected by Hotels, restaurants and similar establishments shall be distributed at the rate of:

Conditions to entitlement 1. A requirement to apply for the battered woman leave is a certification obtained from the Barangay Captain or Kagawad or prosecutor or the clerk of court that an action based on R. A. 9262 has been filed and is pending. 2. The use of the ten-day leave is at the option of the employee. 3. It shall be used for the days that she need to attend to medical and legal concerns. 4. Leaves not availed of are non-cumulative and not convertible to cash. Indeed, the battered woman leave is useful for victims of violence. Lastly, this law is only applicable in the Philippines. Availment Leave of up to ten days in addition to other paid leaves under the Labor Code, or other laws.

85% - for all covered employees 15% - for management [Managerial employee under Art. 212(M), as implied in Sec. 2, Rule VI, Bk, III] Supervisors are considered as rank-andfile per Sec. 2, Rule VI, as they are not managerial in Art. 212(M) In case the service charge is abolished, the share of the covered employee shall be considered integrated in their wages

Integration Azucena: TIPS are handled similarly as service charges. If a restaurant or similar establishment does not collect service charges, but has a practice or policy of monitoring and pooling the tips given by customers, the pooled tips should be accounted for and distributed in the same manner as the service charges. In many restaurants, a waiter must drop in a tip box the tips he received; otherwise, he commits tip pocketing, a serious offense of dishonesty that may cost him his job. 7. Thirteenth (13th) Month Pay and other bonuses Concept: Benefit a 13th month pay for employees whose salary was not more than P1,000. Exemption, Sec. 2 those already paying equivalent. Implementing Rules dated December 22, 1975 provided for who are covered vs. whose who are not covered, issued by then Sec. Blas Ople.

6. Service Charges
Art. 96. Service Charges. All service charges collected by hotels, restaurants and similar establishments shall be distributed at the rate of eighty-five percent (85%) for all covered employees and fifteen percent (15%) for management. The share of the employees shall be equally distributed among them. In case the service charge is abolished, the share of the covered employees shall be considered integrated in their wages.

Coverage Article 96 and its implementing rule (Rule VI, Book III), apply only to establishments collecting service charges, such as hotels, restaurants, lodging houses, night clubs, cocktail lounges, massage clinics, bars, casinos, and gambling houses, and similar enterprises, including those entities operating primarily as private subsidiaries of the government. [Sec. 1, Rule VI, Book III]

Exclusion Tip, not normally part of salary, it being paid by customer [Ace Navigation Co.,

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a) August 13, 1986, President Corazon C.


Aquino issued Memorandum Order 28 1987

b) Drilon guideline, issued on November 16,


Basic Feature removed of ceiling (P1,000)

No. 88, 13th month pay has mandatory effect only on all rank and file employees [Serafin Quebec, Jr. vs. NLRC, et al., G.R. No. 123184, January 22, 1999 Nature of 13th month pay Notwithstanding therefore the absence of any contractual agreement, the payment of a thirteenth-month pay being a statutory grant, compliance with the same is mandatory and is deemed incorporated in the CBA. [Philippine Airlines, Inc. vs. NLRC and Airline Pilots Association of the Philippines, etc., G.R. No. 114280, July 26, 1996] Food, etc., Not Substitute for 13th Month Pay

When payment is made before opening of regular school year; Coverage 1. all rank and file employees 2. regardless of their employment status; and designation or on or before December 24

3. irrespective of the method by which their wages are paid, provided they have worked for at least 1 month during a calendar year, became covered employees. (1 mo. is qualifying requirement. Include regular benefits only after one has qualified). 1 month here is not necessarily 30 worked days. I should be calendar month, so that those who worked only for 20 days, for being daily paid employee, is entitled. Otherwise, the 1 year would be short of 48 days (if 6 working days) on short of 96 days (if 5 working days a year). Who are covered -a) Commission paid employees? 1) Purely commission NO 2) Guaranteed wage + commission YES [PACIWU (TUCP) vs. NLRC, 247 SCRA 256, 260 (1995)] b) Gov't. employees on part time Private employment YES c) Private school teachers YES, regardless of months taught - Provided taught at least 1 month Exclusion/Exemptions from coverage Managerial employees are not entitled to 13th month pay as per Memorandum Order

Where an employer pays less than 1/12 of the employee's basic salary, the employer shall pay the difference. [Framanlis Farms, Inc. vs. Minister of Labor, G.R. Nos. 72616-17, March 8, 1989] Proportionate 13th Month Pay Thus, if he worked only from January up to September, his proportionate 13th month pay should be equivalent to 1/12 of the total basic salary he earned during that period. [International School of Speech vs. NLRC and M.C. Mamuyac, G.R. No. 112658, March 18, 1995] 13th month pay is a Nonstrikeable Issue Difference on how to compute the 13th month pay does not justify a strike; in other words, it is a nonstrikeable issue and a strike held on that ground is an illegal strike. Commissions vis--vis 13th month pay If the commissions may properly be considered part of the basic salary, they should be included in computing the 13th month pay. If the commissions are not integral part of the basic salary, then they should be excluded. What commissions are part of the salary and what commissions are not, are illustrated respectively in the Philippine Duplicators' and the Boie-Takeda's types of commission. That of Philippine

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Duplicators is wage or sales percentage type which should be included in the 13th month pay computation, while that of Boie-Takeda is profit-sharing or bonus type which may be excluded. vs Rules: Managerial employees are not entitled to 13th month pay as per Memorandum Order No. 88, 13th month pay has mandatory effect only on all rank and file employees. [Serafin Quebec, Jr. vs. NLRC, et al., G.R. No. 123184, January 22, 1999] Piece rate workers are entitled to 13th month pay [Mark Roche International and/or Edmundo Dayot vs. NLRC, et al., G.R. No. 123825, August 31, 1999]. Christmas gift is not christmas bonus, milling bonus, amelioration bonus, yearend productivity bonus. It cannot therefore be considered as equivalent of 13th month pay. [UST Faculty Union vs. NLRC, 190 SCRA 215, Oct. 2, 1990] 13th month pay and other similar benefits is an exclusion from the gross income, provided it must not be more than P30,000.00. The Secrtary of Finance, however, may increase the ceiling of P30,000.00, upon recommendation of the Commissioner, after considering, among others, the effect or the same of the inflation rate at the end of the taxable year. [Sec. 32(7), NIRC] An employee who has been separated from service before the time for payment of the 13th month pay is entitled to this monetary benefit in proportion to the length of time he worked during the year, reckoned from the time he started working during the calendar year up to the time of his separation. [Basay vs. Hacienda Consolacion, G.R. No. 175532, April 19, 2010, Del Castillo, J.]

the 13th month pay of the bus drivers and conductors who are paid a fixed or guaranteed minimum wage in case their commissions be less than the statutory minimum, and commission only in case where the same is over and above the statutory minimum, must be equivalent to one-twelfth (1/12) of their total earnings during the calendar year. [Phil. Agricultural Commercial and Industrial Workers Union (PACIWU)-TUCP vs. NLRC and Vallacar Transit, Inc., G.R. No. 107994, August 14, 1995)]

CBA vis--vis 13th month pay But if the CBA did provide for a bonus in graduated amounts depending on the length of service of the employee, the intention is clear that the bonus provided in the CBA was meant to be in addition to the legal requirement. [Universal Corn Products vs. NLRC, G.R. No. 60337, August 21, 1987] Ruling: The bonus under the CBA is an obligation by the contract between the management and workers while the 13th month pay is mandated by law. Under the circumstances, the 7-day bonus is in addition to the legal requirement. But as it is, the provision for the continued payment of a year-end bonus was incorporated in the CBA without any qualification, from which the only logical conclusion that could be derived is that PAL intended to give the members of ALPAP a year-end bonus in addition to its obligation to grant a thirteenth-month pay. [Philippine Airlines, Inc. (PAL) vs. NLRC & Airline Pilots Association of the Philippines (ALPAP), etc., G.R. No. 114280, July 26, 1996]

8. Women Workers a. Discrimination (Art. 135, LC)

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1. Sexual harassment is an imposition of misplaced superiority which is enough to dampen an employee's spirit in her capacity for advancement. It affects her sense of judgment, it changes her life. If for this alone, private respondent should be adequately compensated [Phil. Aeolus, Infra] The gravamen of the offense in sexual harassment is not the violation of the employee's sexually but the abuse of power by the employer. Any employee, male or female, may rightfully cry foul provided the claim is well substantiated. Strictly speaking, there is no time period within which he or she is expected to complain through the proper channels. The time to do so may vary depending upon the needs, circumstances, and more importantly, the emotional threshold of the employee [Philippine Aeolus Automotive United Corp., et al. vs. NLRC, et al., G.R. No. 124617, April 28, 2000, Second Division, Bellosillo, J.] 2. Persons who may be liable for harassment Any person who directs or induces another to commit any act of sexual harassment as defined in the law, or who cooperates in the commission thereof by another without which it would not have been committed, shall also be held liable under the law. [Section 3, Republic Act No. 7877] sexual

It shall be unlawful for any employer to discriminate against any woman employee with respect to terms and conditions of employment solely on account of her sex. The following are acts of discrimination: Payment of a lesser compensation, including wage, salary or other form of remuneration and fringe benefits, to a female employees as against a male employee, for work of equal value; and Favoring a male employee over a female employee with respect to promotion, training opportunities, study and scholarship grants solely on account of their sexes. Criminal liability for the willful commission of any unlawful act as provided in this Article or any violation of the rules and regulations issued pursuant to Section 2 hereof shall be penalized as provided in Articles 288 and 289 of this Code: Provided, That the institution of any criminal action under this provision shall not bar the aggrieved employee from filing an entirely separate and distinct action for money claims, which may include claims for damages and other affirmative reliefs. The actions hereby authorized shall proceed independently of each other. (As amended by Republic Act No. 6725, May 12, 1989)

b. Stipulation against marriage (Art. 136, LC)


It shall be unlawful for an employer to require as a condition of employment or continuation of employment that a woman employee shall not get married, or to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage.

c. Prohibited Acts (Art. 137, LC)


It shall be unlawful for any employer: To deny any woman employee the benefits provided for in this Chapter or to discharge any woman employed by him for the purpose of preventing her from enjoying any of the benefits provided under this Code. To discharge such woman on account of her pregnancy, or while on leave or in confinement due to her pregnancy; To discharge or refuse the admission of such woman upon returning to her work for fear that she may again be pregnant.

3. Sexual Harassment in a Work-Related Employment Environment committed when:

or

d. Classification of certain women workers (Art. 138, LC)


Any woman who is permitted or suffered to work, with or without compensation, in any night club, cocktail lounge, massage clinic, bar or similar establishments under the effective control or supervision of the employer for a substantial period of time as determined by the Secretary of Labor and Employment, shall be considered as an employee of such establishment for purposes of labor and social legislation.

e. Anti-Sexual Harassment Act (RA 7877)

(1) the sexual favor is made as a condition in the hiring, or in the employment, re-employment or continued employment of said individual or in granting said individual favorable compensation, terms, conditions, promotions, or privileges; or the refusal to grant the sexual favor results in limiting, segregating or classifying the employee which in any way would discriminate, deprive or diminish employment opportunities or otherwise adversely affect said employee. (2) the above acts would impair the employee's rights or privileges under existing labor laws; or

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(3) the above acts would result in an intimidating, hostile, or offensive environment for the employee. [Section 3 (a), Republic Act No. 7877]
o'clock in the evening and six o'clock in the morning of the following day."

b. Employment of the child in public entertainment


Sec. 12. Employment of Children. - Children below fifteen (15) years of age shall not be employed except: xxx 2) Where a child's employment or participation in public entertainment or information through cinema, theater, radio or television is essential: Provided, The employment contract is concluded by the child's parents or legal guardian, with the express agreement of the child concerned, if possible, and the approval of the Department of Labor and Employment: and Provided, That the following requirements in all instances are strictly complied with: cd (a) The employer shall ensure the protection, health, safety, morals and normal development of the child; (b) The employer shall institute measures to prevent the child's exploitation or discrimination taking into account the system and level of remuneration, and the duration and arrangement of working time; and (c) The employer shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing program for training and skills acquisition of the requirements.

9.Minor Workers (RA 7678, RA 9231)


Sec. 2. Employment of Children - Children below fifteen (15) years of age shall not be employed except: 1) When a child works directly under the sole responsibility of his/her parents or legal guardian and where only members of his/her family are employed: Provided, however, That his/her employment neither endangers his/her life, safety, health, and morals, nor impairs his/her normal development: Provided, further, That the parent or legal guardian shall provide the said child with the prescribed primary and/or secondary education; or 2) Where a child's employment or participation in public entertainment or information through cinema, theater, radio, television or other forms of media is essential: Provided, That the employment contract is concluded by the child's parents or legal guardian, with the express agreement of the child concerned, if possible, and the approval of the Department of Labor and Employment: Provided, further, That the following requirements in all instances are strictly complied with: (a) The employer shall ensure the protection, health, safety, morals and normal development of the child; (b) The employer shall institute measures to prevent the child's exploitation or discrimination taking into account the system and level of remuneration, and the duration and arrangement of working time; and (c) The employer shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing program for training and skills acquisition of the child. In the above-exceptional cases where any such child may be employed, the employer shall first secure, before engaging such child, a work permit from the Department of Labor and Employment which shall ensure observance of the above requirements. For purposes of this Article, the term "child" shall apply to all persons under eighteen (18) years of age."

c. Prohibition of employing minors in certain undertakings and in certain advertisements


Sec. 14. Prohibition on the Employment of Children in Certain Advertisements. - No child shall be employed as a model in any advertisement directly or indirectly promoting alcoholic beverages, intoxicating drinks, tobacco and its byproducts, gambling or any form of violence or pornography.

10. Employment of Househelpers:


Art. 141. Coverage. This Chapter shall apply to all persons rendering services in households for compensation. xxx xxx xxx

a. Definition
"Domestic or household service" shall mean service in the employers home which is usually necessary or desirable for the maintenance and enjoyment thereof and includes ministering to the personal comfort and convenience of the members of the employers household, including services of family drivers.

a. Regulation of working hours of a child


Sec. 2-A. Hours of Work of a Working Child. - Under the exceptions provided in Section 12 of this Act, as amended: A child below fifteen (15) years of age may be allowed to work for not more than twenty (20) hours a week: Provided, That the work shall not be more than four (4) hours at any given day; A child fifteen (15) years of age but below eighteen (18) shall not be allowed to work for more than eight (8) hours a day, and in no case beyond forty (40) hours a week; No child below fifteen (15) years of age shall be allowed to work between eight o'clock in the evening and six o'clock in the morning of the following day and no child fifteen (15) years of age but below eighteen (18) shall be allowed to work between ten

b. Benefits accorded househelpers


Art. 143. Minimum wage. (a) Househelpers shall be paid the following minimum wage rates: (b) Eight hundred pesos (P800.00) a month for househelpers in Manila, Quezon, Pasay, and Caloocan cities and municipalities of Makati, San Juan, Mandaluyong, Muntinlupa, Navotas, Malabon, Paraaque, Las Pias, Pasig, Marikina, Valenzuela, Taguig and Pateros in Metro Manila and in highly urbanized cities; (c) Six hundred fifty pesos (P650.00) a month for those in other chartered cities and first-class municipalities; and

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(d) Five hundred fifty pesos (P550.00) a month for those in other municipalities. Provided, That the employers shall review the employment contracts of their househelpers every three (3) years with the end in view of improving the terms and conditions thereof. Provided, further, That those househelpers who are receiving at least One thousand pesos (P1,000.00) shall be covered by the Social Security System (SSS) and be entitled to all the benefits provided thereunder. (As amended by Republic Act No. 7655, August 19, 1993) SEC. 6. Payment for homework.Immediately upon receipt of the finished goods or articles, the employer shall pay the homeworker or the contractor or subcontractor, as the case may be, for the work performed less corresponding homeworkers share of SSS, MEDICARE and ECC premium contributions which shall be remitted by the contractor/subcontractor or employer to the SSS with the employers share. However, where payment is made to a contractor or subcontractor, the homeworker shall likewise be paid immediately after the goods or articles have been collected from the workers.

c. Conditions for deduction from homewokers earnings c. Termination


Art. 150. Service of termination notice. If the duration of the household service is not determined either in stipulation or by the nature of the service, the employer or the househelper may give notice to put an end to the relationship five (5) days before the intended termination of the service. SEC. 8. Deductions.No employer, contractor, or subcontractor shall make any deduction from the homeworkers earnings for the value of materials which have been lost, destroyed, soiled or otherwise damaged unless the following conditions are met: (a) the homeworker concerned is clearly shown to be responsible for the loss or damage; (b) the homeworker is given reasonable opportunity to show cause why deductions should not be made; (c) the amount of such deduction is fair and reasonable and shall not exceed the actual loss or damage; and (d) the deduction is made at such rate that the amount deducted does not exceed 20% of the homeworkers earnings in a week

d. Reliefs for unjust termination


Art. 149. Indemnity for unjust termination of services. If the period of household service is fixed, neither the employer nor the househelper may terminate the contract before the expiration of the term, except for a just cause. If the househelper is unjustly dismissed, he or she shall be paid the compensation already earned plus that for fifteen (15) days by way of indemnity. If the househelper leaves without justifiable reason, he or she shall forfeit any unpaid salary due him or her not exceeding fifteen (15) days.

12. Apprentices and Learners: RA 7796 TESDA


SEC. 4. xxx Definition of Terms. As used in this Act: xxx xxx (j) Apprenticeship training within employment with compulsory related theoretical instructions involving a contract between an apprentice and an employer an established period assured by an apprenticeable occupation; (k) Apprentice is a person undergoing for an approved apprenticeable occupation during an established period assured by an apprenticeship agreement; (l) Apprenticeship Agreement is a contract wherein a prospective employer binds himself to train the apprentice who in turn accepts the terms of training for a recognized apprenticeable occupation emphasizing the rights, duties and responsibilities of each party; (m) Apprenticeable Occupation is an occupation officially endorsed by a tripartite body and approved for apprenticeship by the Authority; (n) Learners refer to persons hired as trainees in semi skilled and other industrial occupation which are nonapprenticeable. Learnership programs must be approved by the Authority [TESDA]. (p) Dual system/Training refers to a delivery system of quality technical and vocational education which requires training to be carried out alternately in two venues: In school and in the production plant. In-school training provides the trainee the theoretical foundation, basic training, guidance and human formation, while in-plant training develops his skills and proficiency in actual work conditions as it continue to inculcate personal discipline and work values;

11. Employment of Homeworkers:


ART. 153. Regulation of Industrial Homeworkers. The employment of industrial homeworkers and field personnel shall be regulated by the Government through appropriate regulations issued by the Secretary of Labor to ensure the general welfare and protection of homeworkers and field personnel the industries employing them.

a. Definition DO No. 5 Regulations on Employment of Homeworkers


Section 2 a. Industrial Homework is a system of production under which work for an employer or contractor is carried out by a homeworker at his/her home. Materials may or may not be furnished by the employer or contractor. It differs from regular factory production principally in that, it is a decentralized form of production where there is ordinarily very little supervision or regulation of methods of work. b. Industrial Homeworker means a worker who is engaged in industrial homework.

b. Rights and benefits accorded homeworkers

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The Labor Code defines an apprentice as a worker who is covered by a written apprenticeship agreement with an employer. One of the objectives of Title II (Training and Employment of Special Workers) of the Labor Code is to establish apprenticeship standards for the protection of apprentices. [Century Canning Corporation v. Court of Appeals, G.R. No. 152894, August 17, 2007].

BUT, A prior approval obtained from DOLE (now transferred to TESDA) is a preliminary step towards its final approval Thus, pending final approval of the apprenticeship program upon a persons assumption of work does not instantaneously give rise to employer-employee relationship. [Century Canning Corporation v. Court of Appeals, supra] Republic Act No. 7796, which created TESDA, has transferred the authority over apprenticeship of the DOLE to the TESDA. RA 7796 emphasizes TESDAs approval of the apprenticeship program as a prerequisite for the hiring of apprentices. [Century Canning Corporation v. Court of Appeals, supra] The requisite TESDA approval of the apprenticeship program prior to the hiring of apprentices was further emphasized by the DOLE with the issuance of Department Order No. 68-04 on 18 August 2004 xxx, which provides the guidelines in the implementation of the Apprenticeship and Employment Program of the government, [and which] specifically states that no enterprise shall be allowed to hire apprentices unless its apprenticeship program is registered and approved by TESDA. [Century Canning Corporation v. Court of Appeals, supra] There is no valid apprenticeship if: (1) the agreement submitted to TESDA was made long after the workers started undergoing apprenticeship; (2) the work performed by the apprentice was different from those allegedly approved by TESDA; (3) the workers undergoing apprenticeship are already skilled workers; or (4) the workers were required to continue undergoing

HOWEVER,

In order to be an apprentice, the apprenticeship program the worker agreed to undergo should first be approved by the DOLE (now transferred to TESDA) before he can be hired as an apprentice. Otherwise, the person hired will be considered a regular employee. [Century Canning Corporation v. Court of Appeals, supra]
a. Apprentice A person undergoing an approved apprenticeable occupation within a particular period provided for in the apprenticeship agreement. [Sec. 4(k), ibid.] an occupation officially endorsed by a tripartite body and approved by the Authority. [Sec. 4(m), ibid.] a contract wherein a prospective employer binds himself to train the terms of training for a recognized apprenticeable occupation emphasizing the rights, duties and responsibilities of each party. [Sec. 4(l), ibid.] a participant in a vocational, administrative, or technical training program established for the purpose of acquiring and developing job-related skills. [Sec. 4(i), ibid.] a person hired as a trainee in semi-skilled and other industrial occupation which are non-apprenticeable. [Sec. 4(n), ibid.] BUT, learnership program must be approved by the Authority. [ibid.]

Apprenticeable Occupation

Apprenticeship Agreement

b. Trainee (w/ or w/o pay)

c. Learner

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apprenticeship beyond six months. [Atlanta Industries, Inc., et al. vs. Sebolino, et al., G.R. No. 187320, January 26, 2011, Brion, J. While the employer may argue that there is a need to train its employees through apprenticeship, this phase should not be more than six months, and upon expiration of the agreement, the retention of the employees for all intents and purposes, makes them regular employees. A second apprenticeship for a second skill not mentioned in the apprenticeship agreement is a violation of the Labor Code. [Atlanta Industries, supra] Distinctions between Learnership and Apprenticeship
Labor Code ART. 58. Definition of Terms. As used in this Title: (a) An apprentice is a worker who is covered by a written apprenticeship agreement with an individual employer or any of the entities recognized under this Chapter [Ch.1, Title II] ART. 73. Learners defined.Learners are persons hired as trainees in semi-skilled and other industrial occupations which are non-apprenticeable and which may be learned through practical training on the job in a relatively short period of time which shall not exceed three (3) months. ART. 74. When learners may be hired.Learners may be employed when no experienced worker, are available, the employment of learners is necessary to prevent curtailment of employment opportunities, and the employment does not create unfair competition in terms of labor costs or impair or lower working standards.

Period of training

APPRENTICESHIP not to exceed six months [Art. 61, LC]

Type of Work

Highly technical work in an Industry [Art. 60, LC] At least 14 years of age with vocational aptitude and capacity, and ability to comprehend and follow oral and written instructions [Art. 59, LC] Not less than 75% of applicable minimum wage, [Art. 61, LC] EXCEPT if training is required by the school or training program, or requisite for graduation or board examination. [Art. 72, LC]

Qualificatio ns

LEARNERSHIP Not to exceed three (3) months [Art. 75, LC] Semi-skilled and other Industrial work [Art. 73, LC] When no experienced worker is available in the industry [Art. 74, LC]

Salary

Not less than 75% of applicable minimum wage, [Art. 75, LC] EXCEPT for learners in piecework, where salary shall be paid in according to the minimum wage imposed. [Art. 76, LC]

13. Handicapped Workers (RA 7277 IMPLEMENTING RULES AND REGULATIONS OF THE MAGNA CARTA FOR DISABLED PERSONS): a. Definition of "handicapped workers" A handicapped worker is a disadvantaged for a given individual, resulting from impairment or a disability, that limits or prevents the function or activity, that is considered normal given the age and sex of the handicapped individual. b. Rights of disabled workers
Sec. 5. Equal Opportunity for Employment. No disable person shall be denied access to opportunities for suitable employment. A qualified disabled employee shall be subject to the same terms and conditions of employment and the same compensation, privileges, benefits, fringe benefits, incentives or allowances as a qualified able bodied person. Five percent (5%) of all casual emergency and contractual positions in the Departments of Social Welfare and Development; Health; Education, Culture and Sports; and other government agencies, offices or corporations engaged in social development shall be reserved for disabled persons. Sec. 6. Sheltered Employment If suitable employment for disabled persons cannot be found through open employment as provided in the immediately preceding Section, the State shall endeavor to provide it by means of sheltered employment. In the placement of disabled persons in sheltered employment, it shall accord due regard to the individual qualities, vocational goals and

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inclinations to ensure a good working atmosphere and efficient production. Sec. 7. Apprenticeship. Subject to the provisions of the Labor Code as amended, disabled persons shall be eligible as apprentices or learners: Provided, That their handicap is not as much as to effectively impede the performance of job operations in the particular occupation for which they are hired; Provided, further, That after the lapse of the period of apprenticeship, if found satisfactory in the job performance, they shall be eligible for employment.

c. Prohibitions on discrimination against disable persons


Sec. 32. Discrimination on Employment. No entity, whether public or private, shall discriminate against a qualified disabled person by reason of disability in regard to job application procedures, the hiring, promotion, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment. The following constitute acts of discrimination: (a) Limiting, segregating or classifying a disabled job applicant in such a manner that adversely affects his work opportunities; (b) Using qualification standards, employment tests or other selection criteria that screen out or tend to screen out a disabled person unless such standards, tests or other selection criteria are shown to be job-related for the position in question and are consistent with business necessity; (c) Utilizing standards, criteria, or methods of administration that: (1) have the effect of discrimination on the basis of disability; or (2) perpetuate the discrimination of others who are subject to common administrative control. (d) Providing less compensation, such as salary, wage or other forms of remuneration and fringe benefits, to a qualified disabled employee, by reason of his disability, than the amount to which a non-disabled person performing the same work is entitled; (e) Favoring a non-disabled employee over a qualified disabled employee with respect to promotion, training opportunities, study and scholarship grants, solely on account of the latter's disability; (f) Re-assigning or transferring a disabled employee to a job or position he cannot perform by reason of his disability; (g) Dismissing or terminating the services of a disabled employee by reason of his disability unless the employer can prove that he impairs the satisfactory performance of the work involved to the prejudice of the business entity: Provided, however, That the employer first sought to provide reasonable accommodations for disabled persons; (h) Failing to select or administer in the most effective manner employment tests which accurately reflect the skills, aptitude or other factor of the disabled applicant or employee that such tests purports to measure, rather than the impaired sensory, manual or speaking skills of such applicant or employee, if any; and (i) Excluding disabled persons from membership in labor unions or similar organizations.

IV. TERMINATION OF EMPLOYMENT The following are the topics covered: 5. Employer- Employee Relationship 6. Termination of Employment 7. Retirement Pay Law IV. Termination of Employment 1. Employer- Employee Relationship Employer
Art. 212(e), LC Includes any persons acting in the interest of an employer, directly or indirectly. Excludes labor organization or any of its officers or agents Except, when acting as an employer. Art. 97(b) Includes any person acting directly or indirectly in the interest of an employer in relation to an employee. [cf. Art. 106, LC] Includes the government and all its branches, subdivision and instrumentalities, all GOCCs, as well as non-profit private institutions, or organizations. Since a corporation is an artificial person, it is the officer (manager) who is presumed to be 'the employer as he acts in the interest of the employer. In dismissal cases, the officer is solidarily liable with the corporation. [NYK International Knitwear Corporation vs. NLRC, 397 SCRA 607]

d. Incentives for employers


Sec. 8. Incentives for Employers. (a) To encourage the active participation of the private sector in promoting the welfare of disabled persons and to ensure gainful employment for qualified disabled persons, adequate incentives shall be provided to private entities which employ disabled persons.

Employee
Art. 212(f) Includes any person in the employ of an employer. Includes any individual whose work has ceased as a result or in connection with any current labor dispute or because of any ULP if he has not obtained any other substantially equivalent and regular employment. Art. 97(c)

Where a disabled is qualified to do the work of an able-bodied, Art. 280 applies. In such case, security of tenure is NOT subject to Art. 80(c) of the Labor Code where (c) the duration of employment period be agreed upon by the Bar Operations 2012: should Ace the Bar, Race the Car parties, NOR to Art. 80(b) thereof where her salary rate shall not be less than 75% of the applicable legal minimum wage. She will be treated as if she

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agency relationship is NOT an employee. [Sevilla vs. Court of Appeals, 160 SCRA 171] An insurance agent who is paid on purely commission basis is NOT an employee. [Grepalife vs. Judico, December 21, 1989] BUT, An insurance agent who is paid with salary plus commission is an employee. [Grepalife vs. Judico, December 21, 1989] BUT, An insurance agent who does not have any license to work as an insurance agent is NOT an employee. [Grepalife vs. NLRC, 150 SCRA 601, 608 (1987)] STILL, absence of license should not be considered a legal obstacle as what applies here is the Labor Code, and not the Insurance Code. [Grepalife vs. NLRC, 187 SCRA 694 (1990)] Dismissal The allegation that a person was legally dismissed for abandonment admits of a fact that said person was an employee. [R. Transport vs. Ejandra, supra] Likewise, an allegation that the employee's position was found redundant to justify his dismissal, notwithstanding the employer allegation of a valid job contracting. [Fulache, supra] On the other hand, direct application for employment to the principal upon the termination of the service contract between the alleged employer and the principal, clearly shows that employment relationship exists between the employees and the job contractor. [S.I.P. Food House, et al. vs. Batolina, et al., G.R. No. 192473, October 11, 2010, Brion, J.] Control Among the 4 principal tests used in the determination of an EER, the so-called control test is commonly regarded as the most crucial and determinative indicator. Such element is present 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

Includes any individual employed by an employer.

EER is basically a question of fact. [127 SCRA 454 (1984); Traders Royal Bank vs. NLRC, 321 SCRA 467 (1999); Mandaue Galleon Trade, Inc. vs. Andales, G.R. No. 159668, March 7, 2008; TAPE, Inc. vs. Servaa, G.R. No. 167648, January 28, 2008]

EXCEPT in, (1) Article 106 -labor-only contracting [Filsystems vs. NLRC, 418 SCRA 404 (2003)]; (2) Article 138 -Massage/GRO; (3) Article 155 -Homeworkers a. Four-fold Test 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 power to control the employee's conduct. Selection/Hiring Hiring has not presented so much question. Payment of Wages A person paid by result is NOT an employee. [Continental Marble Corporation vs. NLRC, 161 SCRA 151, 158] A bus driver paid on commission basis is an employee. Commission is part of wage as defined in Art. 97(f), LC. [R. Transport vs. Ejandra, May 20, 2004] BUT, A salesman who is paid 3% commission of his gross sales is not an employee, even if commission is part of wage under Art. 97(f). Commission as a form of remuneration, may be availed of by both an employee or non- employee. [Abante vs. La Madrid Bearing Parts Corp., May 28, 2004] Likewise, one who receives 4% commission from proceeds solicited out of their principal-

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to be used in reaching that end. [Abante vs. La Madrid, supra] BUT, Not every form of control that the hiring party reserves to himself over the conduct of the party hire in relation to the services rendered maybe accorded the effect of establishing an EER. Company rules designed to promote the result create no EER Only those rules that are intended to address both the result and the means used to achieve it establish EER. [Insular Life Assurance vs. NLRC, 179 SCRA 459, 464-65 (1989), citing Mafinco Trading Corp. vs. Ople, 70 SCRA 139; Investment Planning Corp. vs. SSS, 21 SCRA 924; Sara vs. NLRC, 166 SCRA 625, 630; Tongko vs. Manulife, 570 SCRA 503, 518, November 7, 2008, citing Insular Life Assurance Co., Ltd vs. NLRC, 431 SCRA 583, 604 (2004); Manila Electric Company vs. Benamira, G.R. No. 145271, July 14, 2005; Arsenio T. Mendiola vs. Court of Appeals, G.R. No. 159333, July 31, 2006] 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. [Tongko vs. The Manufacturers Life Insurance Co. (Phils.), Inc., et al., G.R. No. 167622, January 25, 2011, Brion, J.] The concept of control in an insurance agency must be understood outside the context of an employer-employee relationship, since the kind of control wielded is only as to the desired results and according to Insurance Code norms. [Tongko vs. The Manufacturers Life Insurance Co. (Phils.), Inc., G.R. No. 167622, June 29, 2010, Brion, J.] NOTE: The Grepalife case wherein the agent brothers appointed as zone supervisor and district manager were considered as employees of Grepalife, because of the presence of the element of control in their contract of engagement, a fact which is not attendant in the Tongko case. The Insular Life case is neither in point, since in the Tongko case no other contract was presented apart from the Agency Agreement executed at the beginning of engagement, and was never superseded by any other agreement even when COMMENT: I likewise disagree with the ponencia in Tongko. Work performed and required of the alleged insurance agent as concurrent branch/unit manager, which is beyond the provisions of the Agency Agreement he previously executed with the insurance company give rise to work that establishes employer-employee relationship. In Justice Velasco's dissenting opinion, he opined thus: the mere fact that no management contract (as in Insular Life case) was reduced into writing does not make the duties and undertaking performed by a branch manager still within the sphere of the 'Agency Agreement'. the complainant became an area manager of Manulife. [Tongko, June 2010, supra]

Secondary Tests SSS registration as employee. [Flores vs. Funeraria Nuestro, 160 SCRA 568; Bautista vs. Inciong, 158 SCRA 665; Corporal vs. NLRC, 341 SCRA 658 (2000)]. A company physician who billed professional fees every month, who never complained since 1981 that he was not covered by SSS, who was subjected to 10% withholding tax not as employee but as professional fee, whose relationship is terminable at will by either parties, and who was not subjected to control of company is NOT an employee. [Phil. Global Communications, Inc. vs. Ricardo de Vera, G.R. No. 157214, June 7, 2005] Withholding Tax (W-2) Payment of ECC (State Insurance Fund) under Arts. 168, Labor Code, which is compulsory upon all employers and their employees not over sixty (60) years of age [also, Art. 183(a), L.C.; in fact 183 (c) of L.C. Requires the employer to pay the employee contribution]. Pag-Ibig Fund Employment Contract Under the Omnibus Rules Implementing the Labor Code, one of the requirements for the issuance of an employment permit is an employment contract. (Section 5, Rule XIV)

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[Pacific Consultants International Asia, Inc. vs. Schonfeld, G.R. No. 166920, February 19, 2007] Not Proof of EER ID cards, even with employee's name, if used on to obtain entrance. [Lopez vs. Bodega City, 532 SCRA 56 (2007)] A solitary petty cash voucher. A public corporation's ownership of stocks in a private corporation does not create employeremployee relationship between the public corporation and the employees of the private corporation. [Hugo, et al. vs. Light Rail Transit Authority, G.R. No. 181866, March 18, 2010, Carpio Morales, J.] Cases If the parties themselves practically agreed on every terms and conditions of the workers services in the company, it negates the element of control in their relationship, and thereby negating the existence of EER. [Philippine Global Communications, Inc. vs. de Vera, G.R. No. 157214, June 7, 2005, Garcia, J.]

Where a person who works for another performs his job more or less at his own pleasure, in the manner he sees fit, not subject to definite hours or conditions of work, and is compensated according to the result of his efforts and not the amount thereof, no employer-employee relationship exists. In our jurisdiction, the benchmark of economic reality in analyzing possible employment relationships for purposes of applying the Labor Code ought to be the economic dependence of the worker on his employer. [Wilhelmina S. Orozco vs. The Honorable Court of Appeals, Philippine Daily Inquirer, and Leticia Jimenez Magsanoc, G.R. No. 155207, August 13, 2008]

It is a standard stipulation in security service agreements that the client may request the replacement of the guards to it. Service-oriented enterprises [Manila Electric Company vs. Benamira, et al., G.R. No. 145271, July 14, 2005, Austria-Martinez, J.]

Under the boundary-hulog scheme incorporated in the Kasunduan, a dual juridical relationship was created between petitioner and respondent: that of employer-employee and vendor-vendee. The Kasunduan did not extinguish the employeremployee relationship of the parties extant before the execution of said deed. [Villarama, Jr. vs. Court of Appeals, G.R. No. 165881, April 19, 2006, Callejo, Sr., J.]

Article 157 of the Labor Code clearly and unequivocally allows employers in non-hazardous establishments to engage on retained basis the service of a dentist or physician. Nowhere does the law provide that the physician or dentist so engaged thereby becomes a regular employee. The very phrase that they may be engaged on retained basis, revolts against the idea that this engagement gives rise to an employer-employee relationship. [Philippine Global Communications, Inc. vs. de Vera, G.R. No. 157214, June 7, 2005, Garcia, J.]

An owner-member of a cooperative can be its own employee. [Republic of the Philippines, represented by Social Security System and Social Security Commission vs. Asiapro Cooperative, G.R. No. 172107, November 23, 2007]

Concept of Whole Economic Activity

An employee occupies no office and generally is employed not by the 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. [Easycall Bar Operations 2012: Ace the Inc. Bar, Race Car G.R. No. Communications Phils., vs. the King, 145901, December 15, 2005, Corona, J.]

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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 employers business; (2) the extent of the workers investment in equipment and facilities; (3) the nature and degree of control exercised by the employer; (4) the workers 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. (Angelina Francisco v. NLRC, G..R No. 170087, August 31, 2006) The presumption is that when the work is 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. The Court will peruse beyond any such agreement to examine the facts that typify the parties actual relationship. (ABSCBN Broadcasting Corporation v. Nazareno, G.R. No. 164156, September 26, 2006)

Art. 281. Probationary employment. Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be 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.

Definition

PROBATIONARY EMPLOYEE

Refers to one who, for a given period of time, is being observed and evaluated to determine whether he is qualified for permanent employment. [Woodridge School vs. Pe Benito, 570 SCRA 164, October 29, 2008] A phase in employment where the employer is afforded the opportunity to observe the fitness of a probationary employee while at work, and to ascertain whether he will become an efficient and productive employee. [ Magis Young Achievers' Learning Center vs. Manalo, G.R. No. 178835, February 13, 2009; Philippine Daily Inquirer, Inc. vs. Magtibay, Jr., G.R. No. 164532, July 27, 2007]

PROBATIONARY EMPLOYMENT

Doctrine of Apparent Authority In general, a hospital is not liable for the negligence of an independent contractor-physician. There is, however, an exception to this principle. The hospital may be liable if the physician is the ostensible agent of the hospital. This exception is also known as the doctrine of apparent authority. [Rogelio P. Nograles v. Capitol Medical Center, G.R. No. 142625, December 19, 2006; Professional Services, Inc. vs. CA, G.R. Nos. 126297, 126467, and 127590, February 2, 2010, Corona, J.] The doctrine of apparent authority is a species of the doctrine of estoppel. Estoppel rests on the rule: Whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to believe a particular thing true, and to act upon such belief, he cannot, in any litigation arising out of such declaration, act or omission, be permitted to falsify it. [Rogelio P. Nograles v. Capitol Medical Center, supra] b. Probationary Employment Rules Period of Probation While there is no statutory cap on the minimum term of probation, the law sets a maximum trial period during which the employer may test the fitness and efficiency of the employee. [Magis Young Achievers' vs. Manalo, supra] The computation of probationary period is made on a calendar date basis to be reckoned from the date of appointment, NOT on a 30-days per month basis as provided for in Art. 13, Civil Code. [Alcira vs. NLRC, 431 SCRA 508 (June 9, 2004) citing CALS Poultry Supply vs. Roco, 385 SCRA 479, 488 (2002)] BUT, An employer, under exceptional circumstances, can extend a probationary period of employment, such as when the same is established by company policy, or when it is required by the nature of the

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work, provided such extension was agreed upon by the parties, and exercised before the expiration of the original period of probation. [San Miguel Corporation vs. Caroline C. Del Rosario, 477 SCRA 604 (December 13, 2005), citing Buiser vs. Leogardo, 216 Phil. 144, 150 (1984)] In fact, length of time is immaterial in determining the correlative rights of both parties in dealing with each other during probationary period. [Philippine Daily Inquirer vs. Magtibay, Jr., supra] 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. [Magis Young Achievers' vs. Manalo, supra] Nature of Probation The provision on employment on probationary status under the Labor Code is a primary example of the fine balancing of interests between labor and management. Employment on probationary status affords management the chance to fully scrutinize the true worth of hired personnel before the full force of the security of tenure guarantee comes into play. Management is given the opportunity to reject during the probationary period hirees who fail to meet its own adopted but reasonable standards. [Mercado vs. AMA Computer College, supra] The employee knows from the very start that he will be under close observation and his performance of his assigned duties and functions would be under continuous scrutiny by his superiors. [Philippine Daily Inquirer vs. Magtibay, Jr., supra] Standards under which a probationary employee will qualify as a regular employee shall be made known to him at the time of engagement. Otherwise, he shall be deemed a regular employee. [Clarion Printing House, Inc. vs. NLRC, 461 SCRA 272, 298-95 (2005)] Evaluation is made before expiration of the probationary period. [Alcira vs. NLRC, supra] In the absence of any evaluation, one cannot conclude that the employee failed to meet the standards for probationary employment. [Dusit Hotel Nikko vs. Gatbonton, 489 SCRA 671, 677 (2006)] And when he is allowed to work after a probationary period, he shall be considered regular. [Art. 281, LC cited in Philippine National Bank vs. Cabansag, 460 SCRA 514 (2005)] A probationary employee enjoys security of tenure while on probation. He can be dismissed only for a just cause OR when he fails to qualify for regular employment. [Athenna International Manpower Services, Inc. vs. Villanos, 456 SCRA 355 (2004)] BUT, A probationary employee does not enjoy a permanent status. Probationary employees enjoy temporary employment status. This means that they are terminable anytime. The employer could well decide if he no longer needed the probationary's service or his performance fell short of expectations.[Espina vs. CA, 519 SCRA 327, 350 (2007); Jennifer Fabello Pasamba vs. NLRC, G.R. No. 168421, June 8, 2007] HOWEVER, In the case of PAL vs. Pascua, regularization is NOT a management prerogative. The employer cannot just put its employees in part-time regularization instead of full-time regularization, especially if only full-time regular employees are covered by CBA and entitled to its benefits. [PAL vs. Pascua, G.R. No. 143258, August 15, 2003, Quisumbing, J.] A regular employee cannot be subjected to a new probationary employment by a sister company of the employer. [A' Prime Security Services, Inc. vs. NLRC, G.R. No. 107320, January 19, 2000] c. Kinds of Employment
Art. 280. Regular and casual employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral 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 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 service to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is 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 broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

NOTES: 3 Categories of Employees under Art. 280

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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. [Thelma Dumpit-Murillo versus Court of Appeals, et al., G.R. No. 164652, June 8, 2007] And the signing of a contract of temporary employment at the time when the employee already attained or is about to attain regular employment status under the CBA is an indication of an employer's illegal intent. [Philex Mining Corp. vs. NLRC, 312 SCRA 119 (1999)] Example: (a) janitorial and messengerial services in an aquaculture business, only after rendering 1 year of service. [SMC vs. Aballa, 461 SCRA 392 (June 28, 2005)] Length of service provides a fair yardstick for determining when an employee initially hired on a temporary basis becomes a permanent one, entitled to security and benefits of regularization. [William Uy Construction Corp. vs. Trinidad, G.R. No. 183250, March 10, 2010, Abad, J.] By nature of work Employee performs work that is usually necessary and desirable in the usual business or trade of the employer. [Caparoso vs. CA, 516 SCRA 30 (February 15, 2007)] The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. [Pier 8 Arrastre & Stevedoring Services, Inc., et al. versus Jeff B. Boclot, G.R. No. 173849, September 28, 2007] A continuing need for respondents' services is sufficient evidence of the necessity and indispensability of their services to petitioner's business. [Glory Philippines, Inc. vs. Vergara, G.R. No. 176627, August 24, 2007] Necessity or desirability is tied up to employer's usual business. [Magsalin vs. NOWM, G.R. No. 148492, May 9, 2003] What determines whether a certain employment is regular or otherwise is not the will or word of the employer, but the business, taking into account all the circumstances, and in some cases the length of time of its performance and its continued existence. [ABS-CBN Broadcasting

(1) regular employees or those whose work is necessary or desirable to the usual business of the employer; (2)project employees or those 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 performed is seasonal in nature and the employment is for the duration of the season; and (3)casual employees or those who are neither regular nor project employees. [Rowell Industrial Corporation vs. Court of Appeals, 517 SCRA 691, March 7, 2007, citing Pangilinan vs. General Milling Corporation, G.R. No. 149329, 12 July 2004, 434 SCRA 159, 169; Pedy Caseres, et al. vs. Universal Robina Sugar Milling Corp., et al., G.R. No. 159343, September 28, 2007; Glory Philippines, Inc. vs. Buenaventura B. Vergara, G.R. No. 176627, August 24, 2007] (1) Regular employment Regular Employment Regular employees may be classified into: (1) regular employees by nature of work; and (2) regular employees by years of service. [Rowell Industrial Corporation vs. CA, supra] By years of service A casual employee who has rendered at least one (1) year of service, whether continuous or broken is a regular employee. The status of regular employment under this category attaches to the casual worker on the day immediately after the end of his first year of service as such casual employee. [Kay Products, Inc. vs. Court of Appeals, 464 SCRA 544 (July 28, 2005)] He shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. [Kasapian ng Malayang Manggagawa sa Coca-Cola (Kasamma-CCO)-CFW Local 245 vs. Court of Appeals, 487 SCRA 487, 508 (2006)] Article 281 of the Labor Code also considers a regular employee as one who is allowed to work after a probationary period. [Pier 8 Arrastre & Stevedoring Services, Inc., et al. versus Jeff B. Boclot, G.R. No. 173849, September 28, 2007]

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Corporation v. Nazareno, G.R. No. 164156, September 26, 2006] Examples (a) production assistants of ABS-CBN [ABSCBN Broadcasting Corp. vs. Nazareno, 503 SCRA 204, 229 (2006)] (b) worker in the shrimp processing of the aquaculture business of SMC [SMC vs. Aballa, supra] (c) piece-rate workers when: (1) their work as tailors was necessary or desirable in the usual business of private respondent, which is engaged in the tailoring business; (2) they worked throughout the year, their employment not being dependent on a specific project or season; and (3) they have worked for more than one year. [Avelino Lambo, et al. vs. NLRC, G.R. No. 111042, October 26, 1999] Issuance of a regular appointment is not necessary. [Efren Paguio vs. NRLC, G.R. No. 147816, May 9, 2003] Article 280 should not be interpreted as a way as to deprive employers of the right and prerogative to choose their own workers if they have sufficient basis to refuse an employee a regular status. Management has rights which should also be protected. [Rowell Industrial Corporation vs. Court of Appeals, 517 SCRA 691 (March 7, 2007)] Where a disabled is qualified to do the work of an able-bodied, Art. 280 applies. In such case, security of tenure is NOT subject to Art. 80(c) of the Labor Code where (c) the duration of employment period should be agreed upon by the parties, NOR to Art. 80(b) thereof where her salary rate shall not be less than 75% of the applicable legal minimum wage. She will be treated as if she is able-bodied guaranteed by Arts. 280, 281, 282, 283, 286, 277(b), 279 of the Code. [Maritess Bernardo vs. NRLC, July 12, 1999, and cited laws] Reasonable connection rule The primary standard, therefore, of determining a regular employment is the reasonable connection 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 usually necessary or desirable in the usual 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 particular business or trade in its entirety. Also, 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. Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists. [De Leon vs. NLRC, G.R. No. 70705, August 21, 1989 Employee performs work that is usually necessary and desirable in the usual business or trade of the employer. [Caparoso vs. CA, 516 SCRA 30 (February 15, 2007)] The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. [Pier 8 Arrastre & Stevedoring Services, Inc., et al. versus Jeff B. Boclot, G.R. No. 173849, September 28, 2007] A continuing need for respondents' services is sufficient evidence of the necessity and indispensability of their services to petitioner's business. [Glory Philippines, Inc. vs. Vergara, G.R. No. 176627, August 24, 2007] Necessity or desirability is tied up to employer's usual business. [Magsalin vs. NOWM, G.R. No. 148492, May 9, 2003] What determines whether a certain employment is regular or otherwise is not the will or word of the employer, but the business, taking into account all the circumstances, and in some cases the length of time of its performance and its continued existence. [ABS-CBN Broadcasting Corporation v. Nazareno, G.R. No. 164156, September 26, 2006] (2) Project employment PROJECT - refers to a job/undertaking within the regular or usual business of the employer, but which is distinct and separate and identifiable from the undertakings of the company. Such job/undertaking begins and ends at determined or determinable times. [Integrated Contractors & Plumbing Works, Inc. vs. NLRC, 466 SCRA 265 (August 9, 2005); Dacuital, et al. vs. LM. Camus Engineering Corporation, et

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al., G.R. No. 176748, September 1, 2010, Nachura, J.] Indicators of project employment Principal Test for Project Employment (a)Whether one is assigned to carry out a specific project or undertaking, the duration and scope of which are specified at the time of engagement for a project. (b)Duration of work to be performed must be defined in the employment contract, and (c)Terms and conditions of employment must be made clear to the employee at the time of hiring. [Abesco Construction and Development Corp. vs. Alberto Ramirez, April 10, 2006; Dacuital, et al., supra; Leyte Geothermal Power Progressive Employees Union-ALU-TUCP vs. PNOC-EDC, G.R. No. 170351, March 30, 2011, Nachura, J.] Points to consider in Project Employment (1) Employees drawn from a work pool are not necessarily employees by reason of that fact alone for members of a work pool can either be project or regular employees. [Abesco, supra, citing Raycor Aircontrol Systems, Inc. vs. NLRC, 330 Phil. 306 (1996); ALU-TUCP vs. NLRC, 234 SCRA 678 (1994)] (2) Manual services or those for special skills like those of carpenters or masons, are, as a rule, unschooled. But this fact alone is not a valid reason for bestowing special treatment on them or for invalidating a contract of employment. [Villa vs. NLRC, 284 SCRA 105, (1998)] (3) Employees who are hired for carrying out a separate job, distinct from the other undertakings of the company, the scope and duration of which has been determined and made known to the employees at the time of the employment, are properly treated as project employees. [Hanjin Heavy Industries and Construction Co., Ltd., Hak Kon Kim and/or Jhunie Adahar versus Felicito Ibaez, et al., G.R. No. 170181, June 26, 2008] (4) 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 completion or termination of which has been determined at the time of the engagement of the employee. [PNOCEnergy Development Corporation versus NLRC, et al., G.R. No. 169353, April 13, 2007]

(5) A "day" as used herein, is understood to be that which must necessarily come, although it 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. [Hanjin Heavy Industries and Construction Co. Ltd., Hak Kon Kim and/or Jhunie Adajar vs. Felicito Ibaez, et al., G.R. No. 170181, June 26, 2008] (6) The absence of a written contract does not by itself grant regular status to respondents, but is evidence that respondents were informed of the duration and scope of their work and their status as project employees.[Hanjin Heavy Industries and Construction Co., Ltd., vs. Felicito Ibaez, et al., supra] (7) When a project employee is dismissed, such dismissal must still comply with the substantive and procedural requirements of due process. Employers who hire project employees are mandated to state and prove the actual basis for the employee's dismissal once its veracity is challenged. [Gregorio S. Saberola vs. Ronald Suarez and Raymundo Lirasan, Jr., G.R. No. 151227, July 14, 2008] (3) Seasonal employment In the case of Mercado, Sr. v. NLRC, the farm workers, after performing their designated task in the farm or at the end of the season for which they were hired, their employment relationship with the company is considered severed, and are free to look for work from other farms, are considered as seasonal workers under Art. 280 of the Labor Code. [HIND SUGAR CO., INC. vs. HON. COURT OF INDUSTRIAL RELATIONS, ET AL., G.R. No. L-13364 July 26, 1960, 108 Phil 1026] And if the employer give preference to its former employees and laborers in hiring workers every season, as in workers in a work pool, they should be considered as regular seasonal workers insofar as the effect of temporary cessation of work is concerned. These workers, however, do not receive salaries and are free to seek other employment during temporary breaks in the business. [Integrated Contractors & Plumbing Works, Inc. vs. NLRC, August 9, 2005] BUT,

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In a case where the employer failed to prove that its farm workers worked only for the duration of one particular season, but have been serving the employer for several years already, these farm workers should be regarded as regular not seasonal employees. [Hacienda Fatima, et al. vs. National Federation of Sugarcane Workers-Food and General Trade, G.R. No. 149440, January 28, 2003] (4) Casual employment
Art. 280. Regular and casual employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral 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 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 service to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is 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 broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

Cruz vs. Maersk Filipinas Crewing, Inc., et al., G.R. No. 172038, April 14, 2008] Seafarers; employment contract; perfection stage vs. commencement stage An employment contract, like any other contract, is perfected at the moment (1) the parties come to agree upon its terms; and (2) concur in the essential elements thereof: (a) consent of the contracting parties, (b) object certain which is the subject matter of the contract, and (c) cause of the obligation. The object of the contract was the rendition of service by Fantonial on board the vessel for which service he would be paid the salary agreed upon. In this case, the employment contract was perfected on January 15, 2000 when it was signed by the parties who entered into the contract in behalf of their principal. However, the employment relationship never commenced since Fantonial was not allowed to leave on January 17, 2000 and go on board the vessel M/V AUK in Germany on the ground that he was not yet declared fit to work on the day of his scheduled departure. But, even if no employer-employee relationship commenced, there was, contemporaneous with the perfection of the employment contract, the birth of certain rights and obligations, the breach of which may give rise to a cause of action against the erring party. (Bright Maritime Corporation (BMC) / Desiree P. Tenorio vs. Ricardo B. Fantonial, G.R. No. 165935, February 8, 2012.) Requisites for validity Guidelines for Fixed-Term Employment c. (1) that 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; [E. Ganzon, Inc. vs. NLRC, et al., G.R. No. 123769, December 22, 1999] d. (2) it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former on the latter. [Rowell Industrial Corporation vs. Court of Appeals, 517 SCRA 691 (March 7, 2007), citing PNOCEDC vs. NLRC, G.R. No. 97747, 31 March 1993, 220 SCRA 695, 699; Caparoso vs. Court of Appeals, 516 SCRA 30 (February 15, 2007)] e. (3) Stipulations, clauses, terms, and conditions should not be contrary to law, morals, good

casual employees or those who are neither regular nor project employees. [Pangilinan vs. General Milling Corporation, G.R. No. 149329, 12 July 2004, 434 SCRA 159, 169]

(5) Fixed term employment Fixed-Term Employment Some workers perform tasks which are necessary or desirable without being hired as an employee (such as an independent contractor) [Philippine Global Communications, Inc. vs. De Vera, supra] In fact, Article 280 does not proscribe or prohibit an employment contract with a fixed period, [Rowell Industrial Corp. vs. Court of Appeals, 517 SCRA 691 (March 7, 2007)] provided it is not intended to circumvent the employee's security of tenure. [Labayog vs. M.Y. San Biscuits, Inc., 494 SCRA 486, 491 (2006); Caparoso vs. Court of Appeals, 516 SCRA 30 (2007)] It is an accepted maritime industry practice that the employment of seafarers is for a fixed period only. Seafarers cannot stay for a long and indefinite period of time at sea as limited access to shore activity during their employment has been shown to adversely affect them. [Dante D. Dela

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customs, public order, or public policy. [Alberto P. Oxales vs. United Laboratories, Inc., G.R. No. 152991, July 21, 2008] Miguel Purefoods Company, Inc.) vs. NLRC and Lolita Neri, G.R. No. 172241, November 20, 2008; Randy Almeda vs. Asahi Glass Philippines, Inc., G.R. No. 177785, September 3, 2008] In legitimate job contracting, the law creates an employer-employee relationship between the employer and the contractors employees only for a limited purpose, i.e., to ensure that the employees are paid their wages. The 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. [Coca-Cola Bottlers Phils., Inc. vs. Alan M. Agito, et al., G.R. No. 179546, February 13, 2009; 7k Corporation vs. NLRC, G.R. No. 148490, November 22, 2006] Substantial capital or investment refers to capital stocks and subscribed capitalization in the case of corporations, tools, equipments [sic], 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. [Manaya v. Alabang Country Club, Inc., G.R. No. 168988, June 19, 2007] 2. When is there "labor-only contracting"?
Art. 106. Contractor or subcontractor. Whenever an employer enters into a contract with another person for the performance of the formers work, the employees of the contractor and of the latters subcontractor, if any, shall be paid in accordance with the provisions of this Code. xxx xxx xxx 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 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.

d. Job contracting and Labor-only contracting NOTE: The presumption is that a contractor is a laboronly contractor unless such contractor overcomes the burden of proving that it has substantial capital, investment, tools and the like. [7k Corporation v. NLRC, G.R. No. 148490, November 22, 2006; Coca-Cola Bottlers Phils., Inc. vs. Alan M. Agito, et al., G.R. No. 179546, February 13, 2009] 1.When is there "job contracting"?
Art. 106. Contractor or subcontractor. Whenever an employer enters into a contract with another person for the performance of the formers work, the employees of the contractor and of the latters subcontractor, if any, shall be paid in accordance with the provisions of this Code. In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him. The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the contracting-out of labor to protect the rights of workers established under this Code. In so prohibiting or restricting, he may make appropriate distinctions between labor-only contracting and job contracting as well as differentiations within these types of contracting and determine who among the parties involved shall be considered the employer for purposes of this Code, to prevent any violation or circumvention of any provision of this Code. 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 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.

Permissible Job Contracting Permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees to put out or farm out with the contractor or subcontractor the performance or completion of a specific job, work or service within a definite or predetermined period regardless of whether such job, work or service is to be performed or completed within or outside the premises of the principal. [Purefoods Corporation (now San

Labor-only contracting is an arrangement wherein the contractor merely acts as an agent in recruiting and supplying the principal employer with workers for the purpose of circumventing labor law provisions setting down the rights of employees. It is not condoned by law. [Coca-Cola Bottlers Phils., Inc. vs. Alan M. Agito, et al., G.R. No. 179546, February 13, 2009; Almeda vs. Asahi Glass, supra] Where labor-only contracting exists, the Labor Code itself establishes an employer-employee relationship between the employer and the employees of the 'labor-only' contractor in order to prevent a circumvention of

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labor laws. Here, the contractor is considered merely an agent of the principal employer. [Aliviado, et al. vs. Procter & Gamble Phils., Inc., G.R. No. 160506, March 9, 2010, Del Castillo, J.] 3. Conditions that must concur in legitimate job contracting The existence of an independent and permissible contractor relationship is generally established by considering the following determinants: whether the contractor is carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of a specified piece of work; the control and supervision of the work to another; the employers power with respect to the hiring, firing and payment of the contractors workers; the control of the premises; the duty to supply the premises, tools, appliances, materials and labor; and the mode, manner and terms of payment. [Jeromie D. Escasinas and Evan Rigor Singco vs. Shangri-Las Mactan Island Resort, G.R. No. 172199, February 27, 2009; Purefoods Corporation (now San Miguel Purefoods Company, Inc.) vs. NLRC and Lolita Neri, G.R. No. 172241, November 20, 2008; Lakas sa Industriya ng Kapatirang Haligi ng Alyansang-Pinagbuklod ng Manggagawang Promo sa Burlingame vs. Burlingame Corporation, G.R. No. 162833, June 15, 2007] 4. Effects of finding that there is labor-only contracting Labor-only contracting would give rise to: (1) the creation of an employer-employee relationship between the 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. [Coca-Cola Bottlers Phils., Inc. vs. Alan M. Agito, et al., supra]

Suspension is a disciplinary measure that is imposed for violation by the employee of a reasonable rule of conduct prescribed by the employer and made known to the employee. [Anonas Construction and Industrial Supply Corporation vs. NLRC, G.R. No. 164052, October 17, 2008] Substantive Due Process
Labor Code Art. 279. Security of tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. (As amended by Section 34, Republic Act No. 6715, March 21, 1989)

Notes: Security of tenure is a paramount right of every employee that is held sacred by the constitutional guarantees as an act of social justice. The right of every employee to security of tenure is all the more secured by the Labor Code by providing that the employer shall not terminate the services of an employee, except for a just cause or when authorized by law. [Julito Sagales vs. Rustans Commercial Corporation, G.R. No. 166554, November 27, 2008] However, in the case of private school teachers, their entitlement to security of tenure is governed by the Manual of Regulations for Private Schools and not the Labor Code. [Aklan College Incorporated vs. Rodolfo P. Guarino, G.R. No. 152949, August 14, 2007] Transfer of Ownership; Simulated sale In transfer of ownership, the sale or disposition must be motivated by good faith as a condition for exemption from liability. A change of ownership done in bad faith, or used to defeat the rights of labor, apart from making the successor-employer liable for the transgressions of its predecessoremployer, the displaced employees shall be deemed absorbed. [Peafrancia Tours and Travel Transport, Inc. vs. Joselito P. Sarmiento, et al., G.R. No. 178397, October 20, 2010, Nachura, J.] More, if there is a charge of simulated sale, transfer of ownership shall be deemed void, as if

2. Termination of Employment: Dismissal Connotes permanent severance or complete separation of the worker from the service on the initiative of the employer regardless of the reasons therefor. [Industrial & Transport Equipment, Inc. vs. Tomas Tugade, et al., G.R. No. 158539, January 15, 2009]

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no sale transpired, and no closure of business that will operate as cause for the dismissal of the displaced employees. [Peafrancia Tours and Travel Transport, Inc. vs. Joselito P. Sarmiento, et al., G.R. No. 178397, October 20, 2010, Nachura, J.] A. Just Causes
Labor Code Art. 282. Termination by employer. An employer may terminate an employment for any of the following causes: a. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; b. Gross and habitual neglect by the employee of his duties; c. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; d. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and e. Other causes analogous to the foregoing.

Requisites: Elements of Serious Misconduct For serious misconduct be a just cause for dismissal: a. it must be serious; b. it must relate to the performance of the employees duties; and c. it must show that the employee has become unfit to continue working for the employer. [Philippine Aeolus Automotive United Corp. vs. NLRC, G.R. No. 124617, April 28, 2000; Premiere Development vs. Mantal, supra; Solid Development Corporation Workers Association vs. Solid Development Corporation, G.R. No. 165995, August 14, 2007] Insubordination, as a just cause for the dismissal of an employee, requires the concurrence of at least two requisites: (1) the employee's assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and 92) the order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been engaged to discharge. [Grandteq Industrial Steel Products, Inc., et al. vs. Annaliza M. Estrella, G.R. No. 192416, March 23, 2011, Nachura, J.] Elements of Willful Disobedience Disobedience to be a just cause for dismissal envisages the concurrence of at least two requisites: a. the employees assailed conduct must have been willful or intentional, the willfulness being characterized by a wrongful and perverse attitude; and b. the order violated must have been reasonable and lawful, made known to the employee, and must pertain to the duties which he has been engaged to discharge. [Westin Philippine Plaza Hotel vs. NLRC, G.R. No. 121621, May 3, 1999, Quisumbing, J.; Cosmos Bottling Corporation vs. Nagrama, Jr., G.R. No. 164403, March 4, 2008]

1. Serious misconduct or willful disobedience


Art. 282. Termination by employer. An employer may terminate an employment for any of the following causes: a. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;

Serious Misconduct An improper and wrong conduct; A transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. For misconduct to be considered serious, it must be of such grave and aggravated character and not merely trivial or unimportant. [Austria vs. NLRC, August 16, 1999; Premiere Development Bank vs. Mantal, 485 SCRA 234, 239-40 (2006); Echeveria vs. Venutek Medika, Inc., 516 SCRA 72 (2007); The Peninsula Manila vs. Alipio, infra] Dishonesty A form of serious misconduct and fraud, or breach of trust. [Lansangan vs. Amkor Technology Philippines, Inc., G.R. No. 177026, January 30, 2009] Willful Disobedience

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2. Gross and habitual neglect of duties
Art. 282. Termination by employer. An employer may terminate an employment for any of the following causes: xxx xxx xxx (b) Gross and habitual neglect by the employee of his duties;

dismissing an employee for gross and habitual neglect of duties, the employer must be able to identify what specific duties the employee violated and whether the violations were gross and habitual. [Benjamin vs. Amellar Corporation, G.R. No. 183383, April 5, 2010, Carpio Morales, J.] An allegation of failure of an employee to conduct monthly physical inventory of the outlet's merchandise is not gross neglect, if inventory preparation does not fall within the employee's tasks who is merely tasked to assist the clerk. [Kulas Ideas & Creations, et al. vs. Alcoseba and Arao-Arao, G.R. No. 180123, February 18, 2010, Carpio Morales, J. Absenteeism Even assuming that respondent's absenteeism constitutes willful disobedience, such offense does not warrant respondent's dismissal. Not every case of insubordination or willful disobedience by an employee reasonably deserves the penalty of dismissal. There must be a reasonable proportionality between the offense and the penalty. [Philippine Long Distance Telephone Company vs. Joey B. Teves, G.R. No. 143511, November 15, 2010, Peralta, J.] While management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers, pursuant to company rules and regulations, however, such management prerogatives must be exercised in good faith for the advancement of the employer's interest and not for the purpose of defeating or circumventing the rights of the employees under special laws and valid agreements. Nevertheless, it may terminate an employee only for a just cause, his prerogative to dismiss must be exercised without abuse of discretion. Its implementation should be tempered with compassion and understanding. [Philippine Long Distance Telephone Company vs. Joey B. Teves, G.R. No. 143511, November 15, 2010, Peralta, J.] 3. Fraud or willful breach of trust (loss of trust and confidence)
Art. 282. Termination by employer. An employer may terminate an employment for any of the following causes: xxx xxx xxx (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; xxx xxx xxx

Abandonment the deliberate and unjustified refusal of an employee to resume his employment, without any intention of returning. It is a form of neglect of duty. [Sugue vs. Triumph International (Phils.), Inc., infra] Gross Negligence The want or absence of even slight care or diligence amounting to a reckless disregard of the safety of a person or property. In evinces a thoughtless disregard of consequences without exerting any effort to avoid them. [Metro Transit Organization, Inc. vs. NLRC, October 17, 1996; Philippine Aeolus United Corporation vs. NLRC, supra] Habitual Neglect The repeated failure to perform ones duties for a period of time. [Chua vs. NLRC, G.R. No. 146780, March 11, 2005 citing JEB & Associates vs. NLRC, 254 SCRA 457 (1996)] Tardiness/Absenteeism Habitual tardiness and absenteeism are forms of neglect of duty. Lack of initiative, diligence, and discipline to come to work on time everyday exhibit the employees deportment towards work, which is inimical to the general productivity and business of the employer. [R.B. Michael Press vs. Galit, G.R. No. 153510, February 13, 2008] Requisites: Habitual Neglect Under Article 282 of the Labor Code, gross and habitual neglect by the employee of his duties is a sufficient and legal ground to terminate employment. Gross negligence connotes want of care in the performance of one's duties. Habitual neglect implies repeated failure to perform one's duties for a period of time, depending upon the circumstances. [Carlos V. Valenzuela vs. Caltex Philippines, Inc., G.R. Nos. 169965-66, December 15, 2010, Villarama, Jr., J.] In

Loss Of Confidence

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and protection of the employer's property. The betrayal of this trust is the essence of the offense for which an employee is penalized. [Lima Land, Inc. vs. Cuevas, G.R. No. 169523, June 16, 2010, Peralta, J.] In the absence of any malicious intent or fraud, an employee's negligence or carelessness is not a justifiable ground for the employer's loss of trust and confidence, for the breach conceived of here should be founded on a dishonest, deceitful or fraudulent act. [Lima Land, Inc. vs. Cuevas, supra] Requisites Guidelines for Dismissal (1) There must be an actual breach; [Salas vs. Aboitiz One, Inc, G.R. NO. 178236, June 27, 2008] (2) The loss of confidence must not be simulated; (3) It should not be used as a subterfuge for causes which are illegal, improper, or unjustified; (4) It may not be arbitrarily asserted in the face of overwhelming evidence to the contrary (5) It must be genuine, not a mere afterthought to justify earlier action taken in bad faith; [Tolentino vs. PLDT, G.R. No. 160404, June 8, 2005; Weh Yueh Restaurant vs. Jayona, G.R. No. 159448, December 16, 2005; Perez vs. PT&T, G.R. No. 152048, April 7, 2009] (6) The employee involved holds a position of trust and confidence [Molina vs. Pacific Plans, Inc., G.R. No. 165476, March 10, 2006, 484 SCRA 498] (7) proof beyond reasonable doubt need not be established to prove loss of trust and confidence, as reasonable ground is enough. [P.J. Lhuillier, Inc. vs. NLRC, G.R. No. 158758, April 29, 2005; Norsk Hydro (Phils.), Inc. vs. Rosales, Jr., G.R. No. 162871, January 31, 2007] (8) must be grounded on facts clearly and convincingly established by the employer proving the facts and incidents upon which the loss of confidence was based [Philippine Aeolus Automotive United Corporation vs. NLRC, 311 SCRA 237, 247 (2000)] mere uncorroborated assertions and accusations will not be sufficient; [Uniwide Sales Warehouse Club vs. NLRC, G.R. No. 154503, February 29, 2008; Metro Eye Security, Inc. vs. Salsona, G.R. No. 167637, September 28, 2007] and (9) breach of trust and confidence as ground for dismissal must be related to the performance of the duties of the employee such as would show unfitness to continue working for the employer. [Blue Dairy Corp. vs. NLRC, G.R. No. 129843,

When the employer has reasonable ground to believe the employee is responsible for the misconduct, and the nature of his participation renders him unworthy of the trust and confidence demanded by his position. [Caete, Jr. vs. NLRC, G.R. No. 130425, September 30, 1999; Tolentino vs. PLDT, G.R. No. 160404, June 8, 2005] Applies only to an employee who holds a position of responsibility or trust and confidence, or a person invested with confidence on delicate matters. [Sanchez vs. NLRC, G.R. No. 124348, August 1999; Cruz vs. Coca-Cola Bottlers Phils., Inc., G.R. No Breach Of Trust A willful violation of the trust. A breach is willful if it is done intentionally, knowingly, and purposely without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly, or inadvertently. [Pastor Dionisio Austria vs. NLRC, G.R. No. 124382, August 16, 1999; PNCC vs. Mandagan, G.R. No. 160965, July 21, 2008] BUT, Loss of trust and confidence can be based on gross negligence [School of the Holy Spirit of Quezon City vs. Taguiam, G.R. No. 165565, July 14, 2008] Rationale The basic premise for dismissal on this ground is that the employee concerned holds a position of trust. [Caeda vs. PAL, G.R. No. 152232, February 26, 2007] An employer cannot be compelled to continue the employment of an employee who is guilty of acts inimical to the interest of the employer and which justifies the loss of confidence in the employee. [Philippine Military Veterans Security and Investigation Agency vs. CA, G.R. No. 139159, January 31, 2006; Divine Word College of San Jose vs. Aurelio, G.R. No. 163706, March 29, 2007] Loss of trust and confidence is premised on the fact that an employee concerned holds a position where greater trust is placed by management and from whom greater fidelity to duty is correspondingly expected. This includes managerial personnel entrusted with confidence on delicate matters, such as custody, handling or care

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September 14, 1999; Rentokil (Initial) Philippines vs. Sanchez, G.R. No. 176219, December 23, 2008] 4. Abandonment of employment; Elements that must concur Elements of Abandonment 1. failure to report for work or absence without valid or justifiable reason; 2. clear intention to sever the employer-employee relationship [Sugue vs. Triumph International (Phils.), Inc., G.R. No. 164804, January 30, 2009; Fe La Rosa vs. Ambassador Hotel, G.R. No. 177059, March 13, 2009] 3. employer should have reported such fact to the nearest Regional Office of DOLE in accordance with Rule XXIII, Section 7, Book V, DO 9-97 [R. Transport Corporation vs. Ejandra, G.R. No. 155264, May 6, 2005] The operative act that will ultimately put an end to this relationship is the dismissal of the employee after complying with the procedure prescribed by law. [Kams International, Inc. vs. NLRC, G.R. No. 128806, September 28, 1999; Floren Hotel vs. NLRC, G.R. o. 155264, May 6, 2005] Presumption: A complaint for illegal dismissal negates allegation of abandonment. [Big AA Manufacturer vs. Antonio, G.R. No. 160854, March 3, 2006, 484 SCRA 33] Mere failure to report for work is not enough to amount to abandonment of work. Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. [Exodus Intentional Construction Corporation, et al. vs. Guillermo Biscocho, et al., G.R. No. 166109, February 23, 2011, Del Castillo, J.] BUT, If employer alleges that employee was never even dismissed, the presumption does not hold. [Abad vs. Roselle Cinema, 485 SCRA 262, 272 (2006)] BECAUSE, Sometimes the complaint for illegal dismissal is only made as leverage to gain monetary benefits. [Arc-Men Food Industries Corp. vs. NLRC, May 7, 1997] THUS,

The rule is that an employee must positively prove first that he was indeed dismissed before the burden of the employer under Article 277(b) applies. 5. Termination of employment pursuant to a Union Security Clause Another cause for termination is dismissal from employment due to the enforcement of the union security clause in the CBA. [Alabang Country Club, Inc., vs. NLRC, G.R. No. 170287, February 14, 2008] Termination of employment by virtue of a union security clause embodied in a CBA is recognized and accepted in our jurisdiction. This practice strengthens the union and prevents disunity in the bargaining unit within the duration of the CBA. By preventing member disaffiliation with the threat of expulsion from the union and the consequent termination of employment, the authorized bargaining representative gains more numbers and strengthens its position as against other unions which may want to claim majority representation. [Alabang Country Club, Inc., vs. NLRC, G.R. No. 170287, February 14, 2008] Dismissal of an employee by the company pursuant to a labor union's demand in accordance with a union security agreement does not constitute unfair labor practice. [NUWHRAIN-Manila Pavilion Hotel Chapter vs. NLRC, et al., G.R. No. 179402, September 30, 2008] The rights of an employee to be informed of the charges against him and to reasonable opportunity to present his side in a controversy with either the company or his own union are not wiped away by a union security clause or a union shop clause in a collective bargaining agreement. An employee is entitled to be protected not only from a company which disregards his rights but also from his own union the leadership of which could yield to the temptation of swift and arbitrary expulsion from membership and hence dismissal from his job. [General Milling Corporation vs. Casio, et al. and Pino, et al., G.R. No. 149552, March 10, 2010, Leonardo-de Castro, J.] 6. Totality of infractions doctrine The totality of infractions or the number of violations committed during the period of employment shall be considered in determining the penalty to be imposed upon an erring employee.

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The offenses committed by petitioner should not be taken singly and separately. Fitness for continued employment cannot be compartmentalized into tight little cubicles of aspects of character, conduct and ability separate and independent of each other. While it may be true that petitioner was penalized for his previous infractions, this does not and should not mean that his employment record would be wiped clean of his infractions. After all, the record of an employee is a relevant consideration in determining the penalty that should be meted out since an employee's past misconduct and present behavior must be taken together in determining the proper imposable penalty. Despite the sanctions imposed upon petitioner, he continued to commit misconduct and exhibit undesirable behavior on board. [Brendo D. Merin vs. National Labor Relations Commission, et al., G.R. No. 171790, October 17, 2008 Exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. A position is redundant where it is superfluous, and superfluity of a position/s may be the outcome of a number of facts, such as over hiring of employees, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. [Coats Manila Bay, Inc. vs. Ortega, G.R. No. 172628, February 13, 2009] Retrenchment One of the ways of terminating employment to preserve the viability of the business. [Eastridge Golf Club, Inc. vs. Eastridge Golf Club, Inc., Labor Union-SUPER, G.R. No. 166760, August 22, 2008] Termination of employment initiated by the employer through no fault of the employees, and without prejudice to the latter, resorted to by management during periods of business recession, industrial depression, or seasonal fluctuations or during lulls occasioned by lack of orders, shortage of materials, conversion of the plant for a new production program or the introduction of new methods or more efficient machinery, or of automation. [Mobilia Products, Inc. vs. Demecillo, G.R. No. 170669, February 4, 2009; AMA Computer College vs. Garcia, infra] It is a means of last resort, and justified only when all other less drastic means have been tried and found insufficient. [FASAP vs. PAL, infra] Closure Complete or partial cessation of the operations and/or shutdown of the establishment of the employer. It is carried out to either stave off the financial ruin or promote the business interest of the employer. [Eastridge Golf Club, Inc. vs. Eastridge Golf Club, Inc., Labor Union-SUPER, G.R. No. 166760, August 22, 2008]

B. Authorized Causes
Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.

Definitions Installation Of Labor-Saving Device Streamlining of personnel structure through the installation of machineries and equipment, or introduction of new methods for purposes of achieving maximum profitability of employers business. [Agustilo vs. CA, G.R. No. 142875, September 7, 2001] Redundancy

Redundancy, Retrenchment and Closure Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. A position is redundant if it is superfluous. [Coca-Cola Bottlers Philippines,

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Inc. vs. Angel U. Del Villar, G.R. No. 163091, October 6, 2010, Leonardo-de Castro, J.] Two (2) Types of Closure (1) Due to business losses or reverses; and NOT due to losses [JAT General Services vs. NLRC, G.R. No. 148340, January 26, 2004, Quisumbing, J.] (2) Closure or cessation of business operations is allowed even if the business is not undergoing economic losses. Just as no law forces anyone to go into business, no law can compel anybody to continue in it. It would be stretching the intent and spirit of the law if we were to unjustly interfere with the managements prerogative to close or cease its business operations, just because said business operations are not suffering any loss or simply to provide the workers continued employment. [Manatad vs. PT&T, supra; Espina vs. CA, G.R. No. 164582, March 28, 2007] Procedural steps required
Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking xxx, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.

the notice requirement of labor laws on company closure does not amount to a patently unlawful act. [Carag vs. NLRC, 520 SCRA 25 (2007)] A written notice that is short of the 30 days prior to notice rule will constitute substantial compliance if the period not covered is compensated even if unworked. [Kasapian ng Malayang Manggagawa sa Coca-Cola vs. CA, 487 SCRA 487, 510-11 (2006), citing Serrano vs. NLRC, 331 SCRA 331 (2000)] In fact, the 1-Month Notice Rule is NOT required when: retrenchment due to financial reverses was already known to the employees during voluntary arbitration. [Revidad vs. NLRC, June 27, 1995] (2) employee consented to the retrenchment [Ismael Santos vs. CA, July 5, 2001, citing Wiltshire vs. NLRC (1991)] (3) voluntary retrenchment [International Hardware, Inc. vs. NLRC, August 10, 1989] (4) no notice due to consented termination rule applies not only to retrenchment, but also to ILS, redundancy and closure. [DOLE Phils., Inc. vs. NLRC, September 13, 2001] There is no law or rule that requires an employer to furnish an employee to be retrenched copies of documents on evaluating employees. The law only requires that the (1)

NOTES: 1-Month Notice Rule If an employee consented to his retrenchment or voluntarily applied for retrenchment, the required previous notice to the DOLE is not necessary as the employee thereby acknowledged the existence of a valid cause for termination of his employment. [Mobilia Products, Inc. vs. Demecillo, supra] Mere failure to comply with

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employer serve a written notice of the retrenchment on the employee concerned and the DOLE at least one month before the intended date of retrenchment. [Mendros, Jr. vs. Mitsubishi, supra] Where retrenchment undertaken by the employer is bona fide, the same will not be invalidated for its failure to serve prior notice on the employees and the DOLE. The employer shall only be liable to pay nominal damages at a reasonable rate of P50,000.00 for each employee. [Eastridge Golf Club, Inc., supra] Payment of Separation Pay under Article 283 The amount of separation pay must be computed from the time the employee commenced employment until the cessation of operations of the employers business. [JAT General Services vs. NLRC, supra] Computation of separation pay is: Salary + Regular Allowances = Separation Pay [Millares vs. NLRC, 305 SCRA 500-512 (1999)] Under Sec. 10, Rule I, Book VI, Omnibus Rules, the computation of termination pay of an employee under Art. 283 shall be based on his latest salary rate, unless the same was reduced by the employer to defeat the intention of the Code, in which case, the basis of computation shall be the rate before its deduction. BUT, Car and insurance benefits should not be included in the computation of separation pay as they are benefits granted only during the course of employment. [Dr. Pedrito F. Reyes vs. CA, G.R. No. 154448, August 15, 2003, YnaresSantiago, J.] Requirements for valid retrenchment/redundancy Requisites for Valid Redundancy Program 1. good faith on the part of the employer in abolishing the redundant position; and fair and reasonable criteria in ascertaining what positions are to be declared redundant, and accordingly abolished. [AMA Computer College vs. Garcia, G.R. No. 166703, April 14, 2008] Requisites for Valid Retrenchment (a)the retrenchment is necessary to prevent losses and such losses are proven; (b)written notice to the employees and to DOLE at least one (1) month prior to the intended date of retrenchment; (c)payment of separation pay equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. [AMA Computer College, Inc. vs. Garcia, supra; Manatad vs. PT&T, G.R. No. 172363, March 7, 2008; TPI Philippines Cement Corp vs. Cajucom VIII, 483 SCRA 494, 502-03 (2006)] (d) the employer exercised its prerogative to retrench in good faith; and (e) it uses fair and reasonable criteria ascertaining who would be retrenched or retained. [Mendros, Jr. vs. Mitsubishi Motors Phils. Corporation (MMPC), G.R. No. 169780, February 16, 2009] (f) the employer must first exhaust all other means to avoid further losses without retrenching its employees. [FASAP vs. PAL, G.R. No. 178083, July 22, 2008] Requisites for Valid Closure (a) the closure/cessation of business is bona fide its purpose is to advance the interest of the employer and not to defeat or circumvent the rights of employees under the law or a valid agreement; (b) a written notice was served on the employees and the DOLE at least one month before the intended date of closure/cessation of business; and (c) IN CASE OF CLOSURE NOT DUE TO FINANCIAL LOSSES, that the employees affected have been give separation pay equivalent to month pay for every year of service or one month pay, whichever is higher. [Eastridge Golf Club, Inc., supra] Redundancy The ground of redundancy does not require the exhibition of proof of losses or imminent losses. [Coats Manila Bay, Inc. vs. Ortega, supra]

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Criteria in selecting employees for dismissal Fair and reasonable criteria in ascertaining who will be affected: Preferred status (e.g. temporary, casual or regular employee) Efficiency Physical fitness Age Financial hardship, or Seniority. (Asian Alcohol Corp. vs. NLRC (1999)) Andrada vs. NLRC, G.R. No. 173231, December 28, 2007] Although when the law uses the phrase retrenchment to prevent losses, it simply means that the employer may retrench before the losses anticipated are actually sustained or realized. [TPI Philippines Cement Corp. vs. Cajucom VII, supra] BUT, If alleged losses are already realized, and the expected imminent losses sought to be forestalled, the employer must prove by sufficient and convincing evidence that retrenchment is the most viable solution. Any less exacting standard of proof would render too easy the abuse of this ground for termination of services of employees, as scheming employers might be merely feigning business losses or reverses to ease out employees. [FASAP vs. PAL, supra; Mendros, Jr. vs. Mitsubishi Motors Phils. Corp., supra] Financial statements that will show the financial condition of the company are pieces of evidence that may justify, among others, the enforcement of its retrenchment program. [Bernadeth Londonio, et al. vs. Bio Research, Inc., et al.,G.R. No. 191459, January 17, 2011, Carpio Morales, J.] Financial statements must be prepared and signed by independent auditors, otherwise, they may be assailed as self-serving. [FASAP vs. PAL, supra] Disease or illness
Art. 284. Disease as ground for termination. An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued

Standards to be followed The wisdom or soundness of abolishing a position for being redundant is not subject to the discretionary review of the labor arbiter and the NLRC, provided there is no violation of the law and no showing that it was prompted by an arbitrary or malicious act [AMA Computer College vs. Garcia, supra] because it is an exercise of business judgment on the part of the employer. [Smart Communications, Inc. vs. Astorga, G.R. Nos. 148132, 151079, 151372, January 28, 2008; Nelson A. Culili vs. Eastern Telecommunications Philippines, Inc., et al., G.R. No. 165381, February 9, 2011, Leonardode Castro, J.] Rule on Proof of Losses Adequate, credible and persuasive evidence of dire financial straits from drastic business losses must be presented by the employer. [Filipinas (PreFabricated Bldg.) Systems Filsystems, Inc. vs. Gatlabayan, 487 SCRA 673 (2006)] (1) Losses incurred must be substantial and not de minimis; (2) Losses are actual or reasonably imminent; (3) The retrenchment is reasonably necessary and is likely to be effective in preventing the expected losses; and (4) The alleged losses, if already incurred, or the expected imminent losses sought to be forestalled, are proven by sufficient and convincing evidence. [AMA Computer College, Inc. vs. Garcia, supra;

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employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees: Provided, That he is paid separation pay equivalent to at least one (1) month salary or to one-half (1/2) month salary for every year of service, whichever is greater, a fraction of at least six (6) months being considered as one (1) whole year. labor dispute or is in implementation of a mass lay-off. (As amended by Section 33, Republic Act No. 6715, March 21, 1989)

Procedure to be observed in termination cases The law mandates that the burden of proving the validity of the termination of employment rests with the employer. Failure to discharge this evidentiary burden would necessarily mean that the dismissal was not justified and, therefore, illegal. Unsubstantiated suspicions, accusations, and conclusions of employers do not provide for legal justification for dismissing employees. [Century Canning Corporation, et al. vs. Vicente Randy R. Ramil, G.R. No. 171630, August 8, 2010, Peralta, J.] The employer is bound to furnish the employee concerned with two (2) written notices before termination of employment can be legally effected. One is the notice apprising the employee of the particular acts or omissions for which his dismissal is sought and this may loosely be considered as the proper charge. The other is the notice informing the employee of the management's decision to sever his employment. However, the decision must come only after the employee is given a reasonable period from receipt of the first notice within which to answer the charge. The requirement of notice is not a mere technicality but a requirement of due process to which every employee is entitled. [Erector Advertising Sign Group, Inc. vs. NLRC, G.R. No. 167218, July 2, 2010, Peralta, J.] This rule applies also to seafarers on board a vessel. However, under paragraph D, Section 17 of the Revised Standard Employment Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels, the Ship Master is excused from furnishing a seafarer with the required notice of dismissal if doing so will prejudice the safety of the crew and the vessel, as in cases of mutiny. BUT just the same, a complete report should be sent to the manning agency, supported by substantial evidence of the findings. [NFD International Manning Agents vs. NLRC, G.R. No. 165389, October 17, 2008] REMEMBER, Article 277(b) recognizes the right to due process of all workers, without distinction as to the cause of their termination, thus, none should be construed. [Suico vs. NLRC, G.R. Nos. 146762, 153584, 163793, January 30, 2007]

Requisites Requisites for Valid Dismissal under Art. 284 The employer must adduce: (a) That the employee is suffering from a disease that is: (1) prohibited by law; (2) prejudicial to his health; or (3) prejudicial to his co-employees (b) A certification from a competent public authority that the disease of the employee is incurable within a period of 6 months even with proper treatment. [Duterte vs. Kingswood Trading Co., Inc., G.R. No. 160325, October 4, 2007] (c) Payment of separation pay of one (1) month salary or one-half (1/2) month salary for every year of service, whichever is higher, and a fraction of at least 6 months is considered as one (1) year. [Crayons Processing, Inc. vs. Pula, G.R. No. 167727, July 30, 2007] Procedural Due Process
Art. 277. Miscellaneous provisions. xxx xxx xxx (b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. The Secretary of the Department of Labor and Employment may suspend the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious

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Under Article 264, union officers, while terminable for knowingly participating in an illegal strike are, as in other termination cases, entitled to the due process protection under Art. 277(b) of the Labor Code. Nothing in Art. 264 authorizes an immediate dismissal of a union officer for participating in an illegal strike. The act of dismissal is not intended to happen ipso facto, but rather as an option that can be exercised by the employer and after compliance with the notice requirements for terminating an employee. [Stanford Marketing Corp. vs. Julian, G.R. No. 145496, February 24, 2004] BUT, In Biflex vs. Filflex Industrial, the Supreme Court held that dismissals under Article 264 can be immediately resorted to, as an exercise of management prerogative. [Biflex vs. Filflex Industrial, G.R. No. 155679, December 19, 2006] Guiding Principles in connection with the hearing requirements in dismissal cases The essence of due process is an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one's side. A formal or trial type hearing is not at all times and in all instances essential to due process, the requirements of which are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the controversy. Neither is it necessary that the witnesses be cross-examined by counsel for the adverse party. [Philippine Long Distance Telephone Company vs. Eusebio M. Honrado, G.R. No. 189366, December 8, 2010, Del Castillo, J.] An employee is not deprived of procedural due process if he chose not to present his side at the administrative hearing, and in fact avoided the investigation into the charges against him by filing his illegal dismissal complaint ahead of the scheduled hearing, as he was given the opportunity to be heard. [Technol Eight Philippines Corporation vs. NLRC, G.R. No. 187605, April 13, 2010, Brion, J.] Reasonable opportunity under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. The notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice. [Lima Land, Inc. vs. Cuevas, G.R. No. 169523, June 16, 2010, Peralta, J.] BUT, It is not enough for an employer to allege in the first written notice to the employee acts of non compliance without any specificity, as such allegation is too general and can encompass just about any malfeasance. The employer must make a detailed narration of the facts and circumstances that would serve as bases to terminate the employee which in turn will allow the latter to explain his side and why he should not be dismissed. [Benjamin vs. Amellar Corporation, G.R. No. 183383, April 5, 2010, Carpio Morales, J.] ALSO, The mere fact that the notices were sent to respondents after the filing of the labor complaint does not, by itself, establish that the same was a mere afterthought. The surrounding circumstances of this case adequately explain why the requirements of procedural due process were satisfied only after the filing of the labor complaint. [New Puerto Commercial, et al. vs. Rodel Lopez, et al., G.R. No. 169999, July 26, 2010, Del Castillo, J.] Agabon doctrine Effect of Non-compliance with Due Process Requirement Where the dismissal is for a just cause, the lack of procedural due process should not nullify the dismissal, or render it illegal or ineffectual. The employer should, however, indemnify the employee for the violation of his statutory rights, such as when the management did not follow or exhaust the grievance procedure under the employment contract prior to dismissal. [DMA Shipping Philippines, Inc. vs. Henry Cabillor, G.R. No. 155389, February 28, 2005; Philemploy Serices and Resources vs. Rodriguez, 486 SCRA 302, 317 (2006)] The indemnity to be imposed should be stiffer to discourage the abhorrent practice of dismiss now, pay later scheme, and should depend on the facts

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of each case, taking into special consideration the gravity of the due process violation of the employer. [Agabon, vs. NLRC, 442 SCRA 573, 616-17 (2004); LBC Domestic Franchise Co. vs. Florido, G.R. No. 162577, August 17, 2007] The indemnity shall be in the form of nominal damages, which the Supreme Court fixed at a rate of P30,000.00 per employee. [Agabon vs. NLRC, supra] BUT, Where the dismissal is based on an authorized cause, the sanction should be stiff as the dismissal process was initiated by the employers exercise of his management prerogative. Several factors are taken into account: (1) the authorized cause invoked, whether it was a retrenchment or a closure or cessation of operation of the establishment due to serious business losses or financial reverses or otherwise; (2) the number of employees to be awarded; (3) the capacity of the employers to satisfy the awards, taken into account their prevailing financial status as borne by the records; and (4) whether there was a bona fide attempt to comply with the notice requirements as opposed to giving no notice at all. [Talam vs. NLRC, G.R. No. 175040, April 6, 2010, Brion, J., citing Jaka Food Processing] STILL, A bona fide suspension of the employers operation of a business or undertaking for a period not exceeding six (6) months does not amount to termination of employment, but only a temporary displacement of employees. The paramount consideration should be the dire exigency of the business of the employer that compels it to put some of its employees temporarily out of work. [Pido vs. NLRC, G.R. No. 169812, February 23, 2007] BUT, If the operation of the business is resumed within six months, it shall be the duty of the employer to reinstate his employees to their former positions without loss of seniority rights. [Lagonoy Bus Co., Inc. vs. CA, G.R. No. 165598, August 14, 2007] PROVIDED, That the employee should indicate his desire to resume his work not later than one (1) month from resumption of operation/undertaking; or relief from military or civic duty. [Eagle Star Security Services, Inc. vs. Bonifacio L. Mirando, G.R. No. 179512, July 30, 2009] Constructive dismissal occurs when there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely as when there is a demotion in rank or diminution in pay or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee leaving the latter with no other option but to quit. [The University of the Immaculate Conception, et al. vs. NLRC, et al., G.R. No. 181146, January 26, 2011, Carpio, J.] A complaint for constructive dismissal filed prior to the employee's resumption of work has no basis, and must be dismissed for want of cause of action. [The University of the Immaculate Conception, et al. vs. NLRC, et al., G.R. No. 181146, January 26, 2011, Carpio, J.] When Off-detailing becomes Constructive Dismissal Temporary off-detail or floating status is the period of time when security guards are in between assignments or when they are made to wait after being relieved from a previous post until they are transferred to a new one. It takes place when the security agency's clients decide not to renew their contracts with the agency,

If the execution of a decision becomes impossible, unjust or too burdensome, modification of the decision is necessary in order to harmonize the disposition with the prevailing circumstances. [Industrial Timber Corporation vs. Ababon, 480 SCRA 171, 187 (2006)]
NOTES: Constructive Dismissal: Termination by reason of a bonafide suspension of operation of a business or undertaking that exceeds six months. Otherwise stated, if the employee was forced to remain without work or assignment for a period exceeding six months, then he is in effect constructively dismissed. INVERSELY,

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resulting in a situation where the available posts under its existing contracts are less than the number of guards in its roster. It also happens in instances where contracts for security services stipulate that the client may request the agency for the replacement of the guards assigned to it even for want of cause. [Bebina G. Salvaloza vs. NLRC, et al., G.R. No. 182086, November 24, 2010, Nachura, J.] HOWEVER, An employee who was placed on temporary offdetail on the ground of poor performance and inefficiency, allegations of which were never made known to him, and instead was given to various assignments amounts to constructive dismissal. Assignment to different posts despite repeated errors and poor performance is considered condonation, which the employer cannot invoke to justify placing the employee on temporary offdetail. [Bebina G. Salvaloza vs. NLRC, et al., G.R. No. 182086, November 24, 2010, Nachura, J.] Preventive Suspension: Preventive suspension is imposed on an employee under investigation if he poses a serious threat to the life and property of the employer and of his coworkers. [Gatbonton vs. NLRC, G.R. No. 146779, January 23, 2006, 479 SCRA 416] The rule on preventive suspension is found in Secs. 8 and 9, Rule XXIII, DO 19, June 21, 1997. As a general rule, the employee is not entitled to wages during the period of a valid preventive suspension. However, if preventive suspension is found to be without basis, the employer is required to pay the illegally suspended employee his backwages for the period of his suspension. [Maricalum Mining vs. Decorion, infra] REMEMBER that Preventive suspension pending investigation is not a penalty. If the investigation is not finished and a decision is not rendered within that period, the suspension will be lifted and the respondent will automatically be reinstated. [The Board of Trustees of the Government Service Insurance System, et al. vs. Albert M. Velasco, et al., G.R. No. 170463, February 2, 2011, Carpio, J.] Preventive suspension lasts only for a period of 30 days, and beyond this period, such suspension may amount to constructive dismissal. [Maricalum Mining Corp. vs. Decorion, 487 SCRA 182 (2006)] HOWEVER, There are cases where a violation of the 30-day suspension period may entail payment of indemnity of P1,000.00 [JRS Business Corp. vs. NLRC, G.R. No. 108891, July 17, 1995] or P3,000.00 [Pepsi-Cola Distributors vs. NLRC, G.R. No. 106831, May 6, 1997] While another view is that the period exceeding 30 days shall be compensable, [Carlos V. Valenzuela vs. Caltex Philippines, Inc., G.R. Nos. 169965-66, December 15, 2010, Villarama, Jr., J.] thus, the extension will not give rise to constructive dismissal. The preventive suspension beyond 30 days shall be upheld provided the employee's wages and benefits are paid in the interim. [Genesis Transport Service, Inc. vs. Unyon ng Malayang Manggagawa ng Genesis Transport, G.R. No. 182114, April 5, 2010, Carpio Morales, J.] An employee who was preventively suspended pending an investigation is treated like an employee on approved vacation leave without pay. The period of preventive suspension shall effectively interrupt the continuity of his government service. [The Board of Trustees of the Government Service Insurance System, et al. vs. Albert M. Velasco, et al., G.R. No. 170463, February 2, 2011, Carpio, J.] Imposition of preventive suspension does not amount to termination of employment. Preventive suspension is justified where the employee's continued employment poses a serious and imminent threat to life or property or of the employee's co-workers, and does not amount to illegal dismissal. [Jose P. Artificio vs. NLRC, et al., G.R. No. 172988, July 26, 2010, Perez, J.]

It is a measure intended to enable the disciplining authority to investigate charges against respondent by preventing the latter from intimidating or in any way influencing witnesses against him. [Mandapat vs. Add Force Personnel Services, Inc., G.R. No. 180285, July 6, 2010, Perez, J.]

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Quitclaims: Quitclaims executed by employees are given effect when: (1) the employee voluntarily executes the quitclaim; (2) no fraud or deceit on the part of the parties; (3) the consideration is credible and reasonable; and (4) contract in not contrary to law, morals, public policy or good customs. [Goodrich Manufacturing Corporation vs. Ativo, et al, G.R. No. 188002, February 1, 2010, Villarama, J.] 2010 Bar Question Consideration received in a quitclaim is credible and reasonable if the amount is not grossly inadequate vis-a-vis what the employee should receive in full. [Goodrich Manufacturing Corporation vs. Ativo, et al, G.R. No. 188002, February 1, 2010, Villarama, J.]
benefits under any collective bargaining and other agreements shall not be less than those provided therein. In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year. Unless the parties provide for broader inclusions, the term one-half (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. Retail, service and agricultural establishments or operations employing not more than ten (10) employees or workers are exempted from the coverage of this provision. Violation of this provision is hereby declared unlawful and subject to the penal provisions under Article 288 of this Code.

Termination of employment by employee:


Art. 285. Termination by employee. (a) An employee may terminate without just cause the employee-employer relationship by serving a written notice on the employer at least one (1) month in advance. The employer upon whom no such notice was served may hold the employee liable for damages. (b) An employee may put an end to the relationship without serving any notice on the employer for any of the following just causes: 1. Serious insult by the employer or his representative on the honor and person of the employee; 2. Inhuman and unbearable treatment accorded the employee by the employer or his representative; 3. Commission of a crime or offense by the employer or his representative against the person of the employee or any of the immediate members of his family; and 4. Other causes analogous to any of the foregoing.

Retirement is the result of a bilateral act of the parties, a voluntary agreement between the employer and the employee whereby the latter, after reaching a certain age, agrees to sever his or her employment with the former. RA 7641 pegs the age for compulsory retirement at 65 years, while the minimum age for optional retirement is set at 60 years. An employer is, however, free to impose a retirement age earlier than the foregoing mandates. [Lourdes A. Cercado vs. Uniprom, Inc., G.R. No. 188154, October 13, 2010, Nachura, J.] Retirement (as amended by RA 7641, Dec. 9. 1992) a) Retire under existing CBA; in absence thereof b) Retire under law rendered at least 5 yrs. Service, and age 60 yrs. old optional age 65 yrs. old compulsory Benefits

3. Retirement Pay Law:


Art. 287. Retirement. Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: Provided, however, That an employees retirement

1. for those paid on boundary basis of computation is average daily income [R & E Transport, Inc.] mo./yr. of service, a fraction of 6 mos. = 1 yr. 2. unless more beneficially agreed upon by the parties -1/2 month shall mean/include: a) 15 days/year b) 1/12 of 13th mo. pay

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c) Cash equivalent of not more than 5 days The retirement age is primarily determined by the existing agreement or employment contract. Absent an agreement, retirement age shall be fixed by law at the age of 65 years, while the minimum age for optional retirement is set at 60 years. Article 287 of the Labor Code applies only to a situation where (1) there is no CBA or other applicable employment contract providing for retirement benefits; or there is a CBA or other applicable employment contract providing for retirement benefits, but it is below the requirement set by law. The rationale is to prevent the absurd situation where an employee is denied retirement benefits through the nefarious scheme of employers to deprive employees of the benefits due them under existing labor laws. [Amelia R. Obusan vs. Philippine National Bank, G.R. No. 181178, July 26, 2010, Nachura, J.] However, the company retirement plans must not only comply with the standards set by existing labor laws, but they should also be accepted by the employees to be commensurate to their faithful service to the employer within the requisite period. Due process only requires that notice of the employer's decision to retire an employee be given to the employee. [Amelia R. Obusan vs. Philippine National Bank, G.R. No. 181178, July 26, 2010, Nachura, J.] Unlike in the case of Jaculbe, the retirement plan of PNB was solely and exclusively funded by PNB, and no financial burden is imposed on the employees for their retirement benefits. [Amelia R. Obusan vs. Philippine National Bank, G.R. No. 181178, July 26, 2010, Nachura, J.] 2. Constitutional Provisions on Labor: Retirement pay, on the other hand, presupposes that the employee entitled to it has reached the compulsory retirement age or has rendered the required number of years as provided for in the collective bargaining agreement (CBA), the employment contract or company policy, or in the absence thereof, in Republic Act No. 7641 or the Retirement Law. [Motorola Philippines, Inc. vs. Ambrosio, G.R. No. 173279, March 30, 2009] The receipt of retirement benefits does not bar the retiree from receiving separation pay. Separation pay is a statutory right designed to provide the employee with the wherewithal during the period that he/she is looking for another employment. On the other hand, retirement benefits are intended to help the employee enjoy the remaining years of his life, lessening the burden of worrying about his financial support, and are a form of reward for his loyalty and service to the employer. [Santos vs.

SIL

A retirement plan giving the employer the option to retire its employees below the ages provided by law must be assented to and accepted by the latter, without which, the exercise of such option will amount to deprivation of property without due process of law. [Lourdes A. Cercado vs. Uniprom, Inc., supra] Implied knowledge of the existence of the retirement plan does not amount to voluntary acceptance of all the provisions set forth therein. The law demands more than a passive acquiescence on the part of the employees, considering that an employer's early retirement age option involves a concession of the former's constitutional right to security of tenure. [Lourdes A. Cercado vs. Uniprom, Inc., supra] It must be explicit, voluntary, free, and uncompelled. While an employer may unilaterally retire an employee earlier than the legally permissible ages under the Labor Code, this prerogative must be exercised pursuant to a mutually instituted early retirement plan. Otherwise stated, only the implementation and execution of the option may be unilateral, but certainly not the adoption and institution of the retirement plan containing such option. Without the voluntary and explicit assent of at least the majority of its employees, the option to unilaterally retire an employee is not valid. [Lourdes A. Cercado vs. Uniprom, Inc., G.R. No. 188154, October 13, 2010, Nachura, J.] An employee's claim under the Early Retirement Program of a corporation is mooted when he avails of the optional retirement under Article 287 of the Labor Code, and accepted the benefits. Acceptance of said benefits means that the employee opted to retire under Article 287. [Korean Air Co., Ltd vs. Yuson, G.R. No. 170369, June 16, 2010, Carpio, J.] Coverage
RA 7641 or the Retirement Pay Law shall apply to all employees in the private sector, regardless of their position, designation or status and irrespective of the method by which their wages are paid. They shall include part-time employees, employees of service and other job contractors and domestic helpers or persons in the personal service of another. [Labor Advisory on Retirement Pay Law, October 24, 1996]

Compulsory retirement age

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Servier Philippines, Inc., G.R. No. 166377, November 28, 2008] EXCEPT, When the Retirement Plan of the employer bars the employee from claiming additional benefits on top of that provided for in the Plan. [Santos vs. Servier Philippines, Inc., supra] The Retirement Pay Law only applies in a situation where: (1) there is no collective bargaining agreement or other applicable employment contract; or (2) there is a CBA or other applicable employment contract, but it is below the requirements set for by law. [Oxales vs. United Laboratories, G.R. No. 152991, July 21, 2008] There are two (2) essential requisites in order that R.A. 7641 may be given retroactive effect: (1) the claimant for retirement benefits was still in the employ of the employer at the time the statute took effect; and (2) the claimant had complied with the requirements for eligibility for such retirement benefits under the statute. [Universal Robina Sugar Milling Corporation (URSUMCO) vs. Caballeda, G.R. No. 156644, July 28, 2008] An employer is free to impose a retirement age less than 65 for as long as it has the employees consent. [Alpha C. Jaculbe vs. Silliman University, G.R. No. 156934, March 16, 2007] An employee who has rendered at least 20 years of service may retire under RA 1616, and receive a retirement gratuity of 1 month salary for every year of service. MC No. 26-96, on the other hand, provides for the computation of the separation benefit applicable to permanent officials who are not qualified to retire under any existing law and those who are qualified to retire. Those who are not qualified, as long as they served for more than a year, may avail of the gratuity corresponding to their length of service. As for those employees who are qualified to retire, they may only receive a separation pay equivalent to the difference between the incentive package and the retirement benefit under any existing law. [Metropolitan Waterworks and Sewerage System vs. Gabriel Advincula, et al., G.R. No. 179217, February 2, 2011, Carpio, J.] When PNB was privatized, its personality as a government-owned corporation ceased, and all the employees therein are deemed retired. The separated employees are entitled to all the benefits accruing to them, after PNB cleared them of any accountability, absent PNB's findings of pending administrative case against them. [Ang vs. Philippine National Bank, G.R. No. 178762, June 16, 2010, Abad, J.] BUT, Employees who were offered appointments and absorbed by the private concessionaires after privatization are never separated from service by virtue of the reorganization pursuant to RA 8041. [Metropolitan Waterworks and Sewerage System vs. Advincula, et al., G.R. No. 179217, February 2, 2011, Carpio, J.] COMMENT: In both cases, some employees were absorbed by the company after privatization took effect. However, these two cases treated the subsequent appointment of the employees concerned differently, in that, one considered the absorbed employees as retired from government service and entitled to retirement benefits, whereas the other treated the absorbed employees as never separated, their service uninterrupted. Exclusions from coverage
The law does not cover employees of retail, service and agricultural establishments or operations employing not more than (10) employees or workers and employees of the National Government and its political subdivisions, including Governmentowned and/or controlled corporations, if they are covered by the Civil Service Law and its regulations. [Labor Advisory on Retirement Pay Law, supra; Sec. 2, Rules Implementing the New Retirement Law]

Components of retirement pay


Rules Implementing the New Retirement Law SEC. 5. Retirement Benefits. 5.1. In the absence of an applicable agreement or retirement plan, an employee who retires pursuant to the Act shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year. 5.2. Components of One-half (1/2) Month Salary.For the purpose of determining the minimum retirement pay due an employee under this Rule, the term one -half month salary shall include all the following: (a) Fifteen (15) days salary of the employee based on his latest salary rate. As used herein, the term salary includes all remunerations paid by an employer to his employees for services rendered during normal working days and hours, whether such payments are fixed or ascertained on a time, task, piece or commission basis, or other method of calculating the same, and includes the fair and reasonable value, as determined by the Secretary of Labor and Employment, of food, lodging or

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other facilities customarily furnished by the employer to his employees. The term does not include cost of living allowances, profit-sharing payments and other monetary benefits which are not considered as part of or integrated into the regular salary of the employees; (b) The cash equivalent of not more than five (5) days of service incentive leave; (c) One twelfth of the 13th month pay due the employee; (d) All other benefits that the employer and employee may agree upon that should be included in the compensation of the employees retirement pay. 5.3. One-half month salary of employees who are paid by results.For covered workers who are paid by results and do not have a fixed monthly rate, the basis for determination of the salary for fifteen days shall be their average daily salary (ADS), subject to the provisions of Rule VII-A, Book III of the Rules Implementing the Labor code on the payment of wages of workers whoa re paid by results. The ADS is the average salary for the last twelve (12) months reckoned from the date of their retirement, divided by the number of actual working days in that particular period. Art. 287. Retirement. Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: Provided, however, That an employees retirement benefits under any collective bargaining and other agreements shall not be less than those provided therein. In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year. Unless the parties provide for broader inclusions, the term one-half (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. Retail, service and agricultural establishments or operations employing not more than ten (10) employees or workers are exempted from the coverage of this provision. Violation of this provision is hereby declared unlawful and subject to the penal provisions under Article 288 of this Code. SSS Law SEC. 12-B. Retirement Benefits. (a) A member who has paid at least one hundred twenty (120) monthly contributions prior to the semester of retirement; and who (1) has reached the age of sixty (60) years and is already separated from employment or has ceased to be self-employed (2) has reached the age of sixty (65) years, shall be entitled for as long as he lives to the monthly pension: Provided, That he shall have the option to receive his first eighteen (18) monthly pensions in lump sum discounted at the preferential rate of interest to be determined by the SSS. (b) A covered member who is sixty (60) years old at retirement and who does not qualify for pension benefits under paragraph (a) above, shall be entitled to a lump sum benefit equal to the total contributions paid by him and on his behalf: Provided, That he is separated from employment and is not continuing payment of contributions to the SSS on his own. (c) The monthly pension shall be suspended upon the reemployment or resumption of self-employment of a retired employee who is less than sixty-five (65) years old. He shall again be subject to Section Eighteen and his employer to Section Nineteen of this Act. (d) Upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be entitled to receive the monthly pension: Provided, That if he has no primary beneficiaries and he dies within sixty (60) months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the five-yearguaranteed period, excluding the dependents pension. (e) The monthly pension of a member who retires after reaching sixty (60) shall be the higher of either: (1) the monthly pension computed at the earliest time he could have retired had he been separated from employment or ceased to be selfemployed plus all adjustments thereto; or (2) the monthly pension computed at the time when he actually retires.

Republic Act No. 7641 amended Article 287 of the Labor Code by providing for retirement pay to qualified private sector employees in the absence of any retirement plan in the establishment. Even a bus conductor paid on commission basis falls within the coverage of RA 7641 if no retirement scheme was adopted in the establishment he is working. Thus, his retirement pay should include the cash equivalent of the 5day service incentive leave and 1/12 of the 13th month pay. [Rodolfo J. Serrano vs. Severino Santos Transit, et al., G.R. No. 187698, August 9, 2010, Carpio Morales, J.]

Rules on Retirement vs. Separation Pay under Art. 283 1. If there is no prohibition in the CBA/retirement plan against double recovery of both the retirement pay and separation pay under the law - the employee can get both. [Aquino vs. NLRC, 206 SCRA 118 (1992)] 2. Otherwise, the employee can only get either. [Carlos F. Solomon, et al. vs. Associate of International Shipping Lines, Inc., G.R. No. 156317, April 26, 2005; Ma. Isabel T. Santos vs. Servier Phils., Inc., G.R. No. 166377, November 28, 2008] Retirement pay under RA 7641 vis--vis retirement benefits under SSS and GSIS laws
Labor Code

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government service; and (2) to permit them to retire from service with relative security, not only for those who have retained their vigor, but more so for those who have been incapacitated by illness or accident. A retiree, after receiving retirement benefits under one law, but later on was discovered not qualified thereunder is not all throughout disqualified to receive retirement benefits under any other existing retirement law. This does not amount to double retirement nor does it amount to conversion of retirement mode. The conversion under the law is one that is voluntary choice made by the retiree. On the other hand, in a case where retiree was later on discovered to be disqualified to receive retirement benefits under one law, his receipt of retirement benefits based on another retirement law is not conversion, because it is not a voluntary choice of the retiree, but a consequence of his disqualification. In this case, retired prosecutors of the National Prosecution Service, pursuant to RA 10071, is not entitled to receive the benefits granted to all those who retired prior to the effectivity thereof. Rules On Double Recovery 1. If CBA/Retirement Plan prohibits double recovery of separation pay and retirement benefit then grant only one benefit, whichever is greater. 2. If CBA/Retirement Plan contains no prohibition, grant both. [Aquino vs. NLRC, 206 SCRA 118, 122-123 (1992)] 3. Same is true with retirement plan vs. CBA. [Aquino, supra, citing BLTB Co. vs. CA, 71 SCRA 470; see also Salomon vs. Association of International Shipping Lines, Inc., 457 SCRA 254, 262 (2005)] 4. If CBA does not require payment of retirement pay in addition to retrenchment pay, then no double recovery. Retirement under the CBA is subject to judicial review and nullification. A CBA, as a labor contract, is not merely contractual in nature but impressed with public interest. It can be nullified for being contrary to law, public morals, or public policy. [Cainta Catholic School vs. Cainta Catholic School Employees Union, 489 SCRA 468, 485 (2006)]

GSIS Law SEC. 13. Retirement Benefits. (a) Retirement benefits shall be: (1) the lump sum payment as defined in this Act payable at the time of retirement plus an old-age pension benefit equal to the basic monthly pension payable monthly for life, starting upon expiration of the five-year (5) guaranteed period covered by the lump sum; or (2) cash payment equivalent to eighteen (18) months of his basic monthly pension plus monthly pension for life payable immediately with no five-year (5) guarantee. (b) Unless the service is extended by appropriate authorities, retirement shall be compulsory for an employee at sixty-five (65) years of age with at least fifteen (15) years of service: Provided, That if he has less than fifteen (15) years of service, he may be allowed to continue in the service in accordance with existing civil service rules and regulations. SEC. 13-A. Conditions for Entitlement.A member who retires from the service shall be entitled to the retirement benefits enumerated in paragraph (a) of Section 13 hereof: Provided, That: (1) he has rendered at least fifteen (15) years of service; (2) he is at least sixty (60) years of age at the time of retirement; and (3) he is not receiving a monthly pension benefit from permanent total disability.

The provision as of the date of his retirement which qualifies the term primary beneficiaries was nullified by the Supreme Court for violating the due process and equal protection clauses of the Constitution. [Dycaico vs. SSS, G.R. No. 161357, November 30, 2005]

CASE: Government Service Insurance System vs. Fernando P. De Leon, G.R. No. 186560, November 17, 2010, Nachura, J. The inflexible rule in our jurisdiction is that social legislation must be liberally construed in favor of the beneficiaries. Retirement laws should be liberally construed in favor of the retiree, because their objective is to provide for the retiree's sustenance and even comfort when he no longer has the capability to earn a livelihood. All doubts must be resolved in favor of the retiree to achieve their humanitarian purpose. Retirement benefits are a form of reward for an employee's loyalty and service to the employer, and are intended to help the employee enjoy the remaining years of his life, lessening the burden of having to worry about his financial support or upkeep. A pension partakes of the nature of retained wages of the retiree for a dual purpose: (1) to entice competent people to enter the

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no excuse that his conduct was unintentional and innocent. A. Discipline Except as limited by special laws, an employer is free to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place, and manner of work, tools to be used, process to be followed, supervision of workers, working regulations, transfer of employees, lay-off workers and the discipline, dismissal and recall of work. [NLR v. Insular La Yebana Co. (1961)] B. Transfer of employees Unless there are instances which directly point to interference by the company with the employees right to self-organization, the transfer of an employee should be considered within the bounds allowed by law, e.g. where despite his transfer to a lower position, his original rank and salary remained undiminished. [Rubberworld Phils., Inc. et al. v. NLRC (1989)] C. Productivity standard As a general concept, poor performance is equivalent to inefficiency and incompetence in the performance of official duties. Under Art. 282 of the LC, an unsatisfactory rating can be a just cause for dismissal only if it amounts to gross and habitual neglect of duties. Thus, the fact that an employees performance is found to be poor or unsatisfactory does not necessarily mean that the employee is grossly and habitually negligent of his duties. Gross negligence implies a want or absence of or failure to exercise slight care of diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. [Universal Staffing Services, Inc. v. NLRC, 559 SCRA 221] D. Grant of Bonus There is unfair and unjust discrimination in the granting of salary adjustments where the evidence shows that (a) the management paid the employees of the unionized branch; (b) where salary adjustments were granted to employees of one of its non-unionized branches although it was losing in its operations; and (c) the total salary adjustments given every ten of its unionized employees would not even equal the salary adjustments given one employee in the non-

Retirement laws are liberally construed in favor of the persons intended to be benefited.

HOWEVER, When the employers retirement plan precludes employees, whose services were terminated for cause, from availing retirement benefits, such cannot be granted for lack of consensual and statutory basis for the grant of retirement benefits. [Divina S. Lopez vs. National Steel Corporation, G.R. No. 149674, Feb. 16, 2004 (423 SCRA 109)] Voucher records amounts disbursed Clearance indicates the

is a certification clearing an employee of any accountability. [Tiu vs. Pasaol, April 30, 2003, Quisumbing, J.]

MANAGEMENT PREROGATIVE: MANAGEMENT PREROGATIVE except as otherwise limited by special laws, an employer is free to regulate, according to his own description and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, tools to be used, 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. As long as the companys exercise of the same is exercised in good faith for the advancement of the employers interest, and not for the purpose of defeating or circumventing the rights of the employees under special laws or valid agreements, the courts will uphold them. [Capitol Mediacal Center, Inc. v. Meris, (2005)]

The law on ULP is not intended to deprive the employer of his fundamental right to prescribe and enforce such rules as he honestly believes to be necessary to the proper, productive and profitable operation of his business. Where, however, an employer does violate the Act and is found guilty of the commission of ULP, it is

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unionized branch. [Manila Hotel Company v. Pines Hotel Employees Assn. and CIR (1972)] E. Change of working hours Except as limited by special laws, an employer is free to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner of work, tools to be used, processes to be followed, supervision of workers, workin regulations, transfer of employees, work supervision, lay-off of workers and discipline, dismissal and recall of workers. [SMB Sales v. Oples, 8 Feb. 1989] F. Marital discrimination
Art. 136. STIPULATION AGAINST MARRIAGE It is unlawful for an employer to require as a condition of employment or continuation of employment that: A woman employee shall not get married; To stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated; or To actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage.

pursuing his occupation, and thus being prevented from supporting himself and his family. In determining whether the contract is reasonable or not, the trial court should consider the following factors: (a) whether the covenant protects a legitimate business interest of the employer; (b) whether the covenant creates an undue burden on the employee; (c) whether the covenant is injurious to the public welfare; (d) whether the time and territorial limitations contained in the covenant are reasonable; and (e) whether the restraint is reasonable from the standpoint of public policy. We are not impervious of the distinction between restrictive covenants barring an employee to accept a post-employment competitive employment or restraints on trade in employment contracts and restraints on post-retirement plans either incorporated in employment contracts or in CBA between the employer and the union of employees, or separate from said contracts or CBA which provide that an employee who accepts post retirement competitive employment will forfeit retirement and other benefits or will be obliged to restitute the same to the employer. The strong weight of authority is that forfeitures for engaging in subsequent competitive employment included in pension and retirement plans are valid even though unrestricted in time or geography. A restriction in the contract which does not preclude the employee from engaging in competitive activity, but simply provides for the loss or rights or privileges if he does so is not in restraint of trade.

G. Post-employment ban Rivera v. Solidbank (2006) Undeniably, petitioner retired under the SRP and received and certain sum of money from respondent. However, petitioner is not proscribed, by waiver or estoppels, from assailing the postretirement competitive employment ban since under Art. 1409 NCC, those contracts whose cause, object or purpose is contrary to law, morals, good customs public order or public policy are inexistent or void from the beginning. Estoppels cannot give validity to an act that is prohibited by law or one that is against public policy. Respondent, as employer, is burdened to establish that a restrictive covenant barring an employee from accepting a competitive employment after retirement or resignation is not an unreasonable or oppressive, or in undue or unreasonable restraint of trade, thus, unenforceable for being repugnant to public policy. There are two principal grounds on which the doctrine is founded that a contract in restraint of trade is void as against public policy. One is, the injury to the public by being deprived of the restricted partys industry; and the other is the injury to the party himself by being precluded from

A post-retirement competitive employment restriction is designed to protect the employer against competition by former employees who may retire and obtain retirement or pension benefits and, at the same time, engage in competitive employment. H. Limitations in its exercise So long as a companys prerogatives are exercised in good faith and for the advancement of the employers interest and not for the purpose of defeating or circumventing rights of the employees under special laws or under valid agreements, the SC will uphold them.

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Nonetheless, while it is true that the parties to a contract may establish any agreements, terms, and conditions that may deem convenient, they should not be contrary to law, morals, good customs, public order or public policy. The relations between capital and labor are not merely contractual, impressed as they are with so much public interest that the same should yield to the common good. [Phil. Telegraph and Telephone Co. v. NLRC, 23 May 1997]

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VI. SOCIAL LEGISLATION The following are the topics covered: 1. SSS Law (RA 8282) 2. GSIS Law (RA 8291) 3. Limited Portability Law (RA 7699) 4. Employees Compensation Coverage and when compensable

WHO ARE COVERED

SOCIAL SECURITY ACT OF 1997 (RA 8282) EMPLOYER any person, natural or juridical, domestic or foreign who carries on in the Philippines any trade, business, industry undertaking or activity of any kind and uses the services of another person who is under his orders as regards employment. EXEMPT EMPLOYER government and any of its political subdivisions, branches and instrumentality, including GOCC. EMPLOYEE any person who performs services for an employer who receives compensation for such services, where there is EER. SELF-EMPLOYED considered both employer and employee

GOVERNMENT SERVICE INSURANCE ACT OF 1997 (RA 8291) EMPLOYER the national government, its political subdivisions, branches or instrumentality, including GOCCs, and financial institutions with original charters, the Constitutional Commissions and the judiciary.

DEPENDENTS

CONDITIONS FOR CHILD TO BE CONSIDERED DEPENDENT

EMPLOYEE any person receiving compensation while in service of an employer as defined herein, whether by election or appointment. Legal spouse entitled for support; Child, whether legitimate, legitimated, legally adopted or illegitimate; Parents dependent for support Unmarried; -doNot gainfully employed; -doHas not reached 21 years of age; Not over age of majority; OR OR *age of majority. Incapable of supporting himself either physically or mentally prior to *21 years of age Legal, dependent spouse until remarriage; AND Dependent children.

BENEFICIARIES 1.PRIMARY

Dependent spouse until remarriage; AND Dependent legitimate or legitimated or legally adopted and illegitimate children.

2.SECONDARY

Dependent parents AND

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Dependent parents; Absent primary and secondary beneficiaries, any other person designated by member as secondary beneficiary As to DEATH BENEFITS, if no beneficiary qualifies under the Act, benefits shall be paid to legal heirs in accordance with the law of succession. Monthly pension Dependents pension Retirement Death Permanent disability Funeral Sickness Maternity (ONLY 1st four deliveries OR miscarriages) Loan grant Legitimate descendants subject to restrictions on dependent children, legitimate descendants.

3.OTHERS

BENEFITS

ALL members Life insurance Retirement Disability Survivorship Separation Unemployment JUDICIARY Life insurance ONLY ALL TAX EXEMPT h. Any employee over 60 years old if he had been paying contributions prior to the age of 60 and has not been compulsorily retired i. An employee who is coverable by both GSIS and SSS shall be compulsorily covered by both Systems. Grounds for Compensability a. For the injury and the resulting disability or death to be compensable, the injury must be the result of accident arising out of and in the course of the employment. b. For the sickness and resulting disability or death to be compensable, the sickness must be the result of and occupational disease listed under the Annex of the IR dealing with occupational diseases with the conditions set therein satisfied. Otherwise, proof must be shown that the risk of contracting the disease is increased by the working conditions.

Limited Portability Law (RA 7699): Provisions of any general or special law or rules and regulations to the contrary notwithstanding, a covered worker who transfers employment from one sector (i.e, private/public) to another or is employed in both sectors shall have his credible services or contributions in both the SSS and GSIS credited to his service or contribution record in each of the Systems and shall be tatalized for purposes of old-age, disability, survivorship and other benefits in case the covered member does not qualify for such benefits in either or both Systems without totalization. Overlapping periods of membership shall be credited only once for purposes of totalization. All contributions paid by such member personally, and those that were paid by his employers to both Systems shall be considered in the processing of benefits which he can claim from either or both Systems. The amount of benefits to be paid by on System shall be in proportion to the number of contributions actually remitted to the System. Employees Compensation Coverage and when compensable Coverage f. Every employer g. Every employee not over 60 years old

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Art. 245. Ineligibility of Managerial Employees to join any Labor Organization; Right of Supervisory Employees. Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own.

VII. LABOR RELATIONS LAW The following are the topics covered: 1. Right to Self-organization 2. Right to Collective Bargaining 3. Right to Peaceful and Concerted Activities

Why cant supervisors join a union of rankand-file? This policy of segregation is founded on fairness to the employer and the employees themselves. It will be detrimental to the employer if the supervisors and the rank-and-file, as members of only one union, could take a common stand against the employer (Azucena). What is the Effect of Mixed Membership? As stated in Article 245-A the employees that should not have been included in membership are automatically deemed removed from the list of membership. Note: The rank and file union and the supervis ors union operating the same establishment may join the same federation or national union. (Art. 245). c. Aliens

1. Right to Self-organization Who may unionize for purposes of collective bargaining a. All Employees (General Rule) Right to Self-Organization: Coverage
Art. 243. All employees of all kind of employers public or private, profit or non-profit, commercial or religious.

Employee: Definition
Art. 212 (f). Employee includes: Any person in the employ of an employer; The term shall not be limited to the employees of a particular employer, unless this code explicitly states; It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment.

Rank-and-File Employees: Definition


IRR Book V Rule 1 Sec. 1: (nn) Rank-and-File Employee refers to an employee whose functions are neither managerial nor supervisory in nature.

Art. 269. Prohibition against Aliens; Exceptions General Rule. They are strictly PROHIBITED from engaging directly or indirectly in all forms of trade union activities. Exception. Aliens working in the country who: - Have valid permits issued by DOLE; - Reciprocity: That said aliens are nationals of a country which grants the same or similar rights to Filipino workers. e. Security Guards

Art. 244 now allows employees of non-profit organizations to join, form and/or assist labor organizations. (FEU-Dr. Nicanor Reyes Medical Foundation, Inc. v. Trajano, 1992) b.Government Corporate Emplotees (Corporations created under the Corporation Code)
Art. 244. Right of Employees in the Public Service. Employees of government corporations established under the corporation code shall have the right to organize and to bargain collectively with their respective employers.

The security guards and other personnel employed by the security service contractor shall have the right: To form, join, or assist in the formation of a labor organization of their own choosing for purposes of collective bargaining and To engage in concerned activities which are not contrary to law including the right to strike.(D.O. No.14 Series of 2001 Guidelines Governing the Employment and Working Conditions of Security Guards and Similar Personnel in the Private Security Industry)

c. Supervisory Employees
Art. 212 (m). Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the uses of independent judgment.

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In December 1986, President Corazon Aquino issued EO No.111 which eliminated the provision on the disqualification of security guards and with that security guards were thus free to join a rank and file organization. Under the old rule, security guards were barred from joining labor organizations of the rank-and-file but under RA 6715, they may now freely join a labor organization with the rank-and-file or the supervisory union, depending on their rank. (Manila Electric Co. v. Sec. of Labor, 1991) By the very nature of their functions, they assist and act in confidential capacity to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations. (Thus there is fiduciary and confidential relationship between manager and employer.) It is not far-fetched that in the course of CB, they might jeopardize that interest which they are duty bound to protect. (Metrolab Industries Inc. v. Roldan-Confessor, 1996) Nomenclature not Controlling: Function Test Who cannot form, join or assist labor organizations a. Managerial Employees and Confidential Employees Functional Test
Art. 212 (m) Managerial Employee is one who is vested with powers or prerogatives to: (1) lay down and execute management policies, AND/OR (2) to hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees. Art. 245. Ineligibility of Managerial Employees to Join any Labor Organization; Right of Supervisory Employees Managerial employees are NOT eligible to join, assist or form any labor organization; Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own. Art. 245-A. Effect of inclusion as Members of Employees Outside the Bargaining Unit. The inclusion as union members of employees outside the bargaining unit shall not be a ground for the cancellation of the registration of the union. Said employees are automatically deemed removed from the list of membership of said union.

The mere fact that an employee is designated manager does not ipso facto make him one. Designation should be reconciled with the actual job description of the employee. (Paper Industries Corp. of the Philippines v. Laguesma, 2000) b. Employee-Member of Cooperative The right to collective bargaining is not available to an employee of a cooperative who at the same time is a member and co-owner thereof. Exclusion: Fact of Ownership Controlling The fact of ownership of the cooperative and not the involvement in the management thereof, which disqualifies a member from joining any labor organization within the cooperative. Exclusion: Rationale They cannot invoke the right to collective bargaining for certainly an owner cannot bargain with himself or his co-owners. (Benguet Electric Cooperative v. Ferrer-Calleja) c. Employees of International Organizations International organizations are endowed with some degree of international legal personality. They are granted jurisdictional immunity. A certification election cannot be conducted in an international organization which the Philippine Government has granted immunity from local jurisdiction.

Confidential Employees: (Nature of Access Test)


Confidential employees are those who: Assist or act in a confidential capacity (integral part of the job) Formulate, determine, and effectuate management policies in the field of labor relations. Note: These two criteria are cumulative, both must be met if an employee is to be considered as confidential. Even if an employee has access to confidential labor relations information BUT such is merely incidental to his duties and knowledge hereof is NOT necessary in the performance of such duties, said access does not render the employee a confidential employee. (San Miguel Corp. Supervisors v. Laguesma, 1997)

Exclusion of Confidential Employees: Rationale Employees should not be placed in a position involving a potential conflict of interests.

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(International Catholic Migration Commission v. Calleja, 1990) d. Non-Employees Since the persons involved are not employees of the company, they are not entitled to the constitutional right to join or form a labor organization for purposes of collective bargaining. (Republic Planters v. Laguesma, 1996) Respondents are found not to be employees of the company, they are not entitled to the constitutional right to join or form a labor organization for purposes of collective bargaining. Citing La Suerte Cigar and Cigarette Factory v. Director of Bureau of Labor Relations the court here reiterated, The question of whether employer-employee relationship exists is a primordial consideration before extending labor benefits under the workmens compensation, social security, medicare, termination pay and labor relations law. Failure to establish this juridical relationship between the union members and the employer affects the legality of the union itself. (Singer Sewing Machine Co. v. Drilon, 1993)
Art. III, Sec. 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged. Art. XIII, Sec. 3. The state shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment opportunities for all. It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. 2. Labor Code Art. 243. Coverage and Employees Right to Self-Organization All persons employed in commercial, industrial and agricultural enterprises and in religious, charitable, medical, or educational institutions, whether operating for profit or not, shall have the right to self-organization and to form, join or assist labor organizations of their own choosing for purposes of collective bargaining. Ambulant, intermittent, and itinerant workers, self-employed people, rural workers and those without any definite employers may from labor organizations for their mutual aid and protection.

Right to Self-Organization: A Fundamental Right Self-organization is a fundamental right guaranteed by the Philippine Constitution and the Labor Code. Employees have the right to form, join or assist labor organizations for the purpose of collective bargaining or for their mutual aid and protection. Whether employed for a definite period or not, any employee shall be considered as such, beginning on his first day of service, for purposes of membership in a labor union. (UST Faculty Union v. Bitonio)

e. Members of the Armed Forces of the Philippines, Policemen, Police Officers, Firemen and Jail Guards (E.O. 180, Sec. 4) f. High-level or managerial government employees (E.O. 180, Sec. 3) High-level employee is one whose functions are normally considered policy determining, managerial or one whose duties are highly confidential in nature.

Right to Self-Organization: Extent and Scope


Art. 246: Non-abridgement of Right to Self-Organization. It shall be lawful for any person to restrain, coerce, discriminate against or unduly interfere with employees and workers in their exercise of the right to self-organization.

Managerial Functions: 1) Effectively recommend managerial actions; 2) Formulate or execute management policies and decisions; or 3) Hire, transfer, suspend, lay-off, recall, dismiss, assign, or discipline employees. Right to Self-Organization: Basis
1. 1987 Constitution

Right to Self-Organization: Scope 1. Right to form, join and assist labor organizations of their own choosing for the purpose of collective bargaining through representatives (Art. 246); 2. Right to engage in lawful concerted activities for the same purpose or for their mutual aid and protection (Art. 246);

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3. Right not to exercise it, the right NOT to join, affiliate with, or assist any union, and to disaffiliate or resign from a labor organization, is subsumed in the right to join, affiliate with, or assist any union, and to maintain membership therein. It is selfevident 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. (Reyes v. Trajano, 1992) In the very recent case of Heritage Hotel Manila v. PIGLAS-Heritage, GR No.177024, October 30, 2009, the Supreme Court reiterated the rule that the right of any person to join an organization also includes the right to leave that organization and join another one. Right to withdraw from the organization: the right of the employees to selforganization is a compelling reason why their withdrawal from the cooperative must be allowed. As pointed out by the union, the resignation of the member-employees is an expression of their preference for union membership over that of membership in the cooperative. (Central Negros Electric Cooperative v. Sec. of Labor, 1991) compensation and working conditions; 3) Prior CB history; 4) Employment status i.e. temporary, seasonal, and probationary. (UP v. Ferrer-Calleja, 1992 citing Democratic Labor Association v. Cebu Stevedoring Co.) Community or Mutuality of Interests Fundamental Test: The basic test of an asserted bargaining units ACCEPTABILITY is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their CB rights. This is related to the policy of the law in ensuring the right to collective bargain. (UP v. Ferrer-Calleja, 1992)

Mutuality of Interests: Rationale There are greater chances of success for the collective bargaining process. The bargaining unit is designed to maintain the mutuality of interest among the employees in such unit. Reason to dissolve, change or expand a certain bargaining unit: When THE INTEREST BETWEEN GROUPS HAS CHANGED OVER TIME.

Art. 277. Miscellaneous Provisions Any employee, whether employed for a definite period or not, shall, beginning on his first day of service, be considered as an employee for purposes of membership in any labor union. To become a union member, an employee must, as a rule, not only signify the intent to become one, but also take some positive steps to realize that intent. (UST Faculty Union v. Bitonio, 1999)

Collective Bargaining History The existence of a prior collective bargaining history is neither decisive nor conclusive in the determination of what constitutes an appropriate bargaining unit. (San Miguel Corp. v. Laguesma, 1994)

Geography Location Geography and location only play a significant role if: 1. The separation between the camps and the different kinds of work in each all militate in favor of the system of separate bargaining units; 2. When the problems and interests of the workers are peculiar in each camp or department; 3. The system of having one collective bargaining unit in each camp has operated satisfactorily in the past. (Benguet Consolidated Inc. and Balatok Mining Co. v. Bobok Lumberjack Association, 1958).

2. Bargaining unit: (a) Test to determine the constituency of an appropriate bargaining unit (W-A-P-E) 1) Will of the Employees (Globe Doctrine); 2) Affinity and unity of Employees interest, such as substantial similarity of works and duties or similarity of

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Size Composition It bears noting that the goal of the DOLE is geared towards a single employer wide unit which is more to the broader and greater benefit of the employees working force. The philosophy is to avoid fragmentation of the bargaining unit so as to strengthen the employees bargaining power with the management. To veer away from such goal would be contrary, inimical and repugnant to the objectives of a strong and dynamic unionism. (Philippine Diamond Hotel and Resort, Inc. v. Manila Diamond Hotel and Employees Union, 2006) Since the confidential employees are very few in number and are by practice and tradition identified with the supervisors in their role as representatives of management vis--vis the rank and file employees, such identity of interest has allowed their inclusion in the bargaining of supervisors for purposes of collective bargaining in turn as employees in relation to the company as their employer. This identity of interest logically calls for their inclusion in the same bargaining unit and at the same time fulfills the laws objective of insuring to them the full benefit of their right to self organization and to collective bargaining, which could hardly be accomplished if the respondent associations membership were to be broken up into five separate ineffective tiny units. Creating fragmentary units would not serve the interests of industrial peace. The breaking up of bargaining units into tiny units will greatly impair their organizational value. (Filoil Refinery Corporation v. Filoil Supervisory and Confidential Employees Union, 1972) of the agencies command, control, and communication systems indicate their unitary corporate personality. (Philippine Scouts Veterans v. Torres) Principles in determining whether to establish separate bargaining units: (Indophil Textile Mills Workers Union v. Calica, 1992; Diatagon Labor Federation v. Ople, 1980) 1. The existence of a bonafide business relationship between the 2 companies is not proof of being a single corporate entity, especially when the services provided by the other company are merely auxiliary. 2. The fact that there are as many bargaining units as there are companies in a conglomeration of companies is a positive proof that a corporation is endowed with a legal personality DISTINCTLY ITS OWN, independent and separate from other corporations. 3. Separate legitimate purposes militate against treating one corporation as an adjunct or alter ego of the other. 4. The fact that the businesses are related, that some of the employees are the same persons working in the other company and the physical plants, offices and facilities are in the same compound are NOT sufficient to justify piercing the corporate veil. In Umali vs. CA, legal corporate entity is disregarded only if it is sought to hold the officers and stockholders directly liable for a corporate debt or obligation. Spun-off corporations The transformation of companies is a management prerogative and business judgment which the courts cannot look into unless it is contrary to law, public policy or morals. If, considering the spinoffs, the companies would consequently have their respective and distinctive concerns in terms of nature of work, wages, hours of work, and other conditions of employment. The nature of their products and scales of business may require different skills, volumes of work, and working conditions which must necessarily be commensurate by different compensation packages. (San Miguel Union v. Confesor, 1996) Unit Severance and Globe Doctrine Globe Doctrine: Concept

Corporate Entities GENERAL RULE: Two companies having separate juridical personalities shall NOT be treated as a single bargaining unit. EXCEPTION: Pervasive Unitary Aspect of Management Doctrine The cross-linking

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A practice designated as the Globe Doctrine, which sanctions the holding of a series of elections, not for the purpose of allowing the group receiving an overall majority of votes to represent all employees, but for the specific purpose of permitting the employees in each of the several categories to select the group which each chooses as a bargaining unit. (Kapisanan ng mga Manggagawa sa Manila Road Co. v. Yard Crew Union, 1960) A group of employees of a given employer comprised of all or less than all of the entire body of employees, which the collective interests of all the employees indicate to be best suited to serve reciprocal rights and duties of the parties consistent with equity to the employer. (Belyca Corporation v. Calleja, 1988)

Appropriate Bargaining Unit: Function An ELECTORAL DISTRICT It marks the boundaries of those who may participate in a certification election. An ECONOMIC UNIT They are group of employees with community of interests. A SOVEREIGN BODY It selects the sole and exclusive bargaining agent.

Globe Doctrine: Rationale Highly skilled workers have to separate to increase their market value. It is best explained in the context of a market place and the demand of employment on such market place. The GLOBE DOCTRINE usually applies to employees with rare skills or highly technical ones.

Effect of Prior Agreement Prior agreement as to the inclusion or exclusion of workers in 3 bargaining unit or prohibition from forming their own agreed upon by the corporation with the previous bargaining representatives can never bind subsequent federations. (General Rubber & Footwear Corp. v. BLR, 1987) RATIONALE: It is a curtailment of the right to self-organization. During the freedom period, the parties may not only renew the existing collective bargaining agreement but may also propose and discuss modifications or amendments thereto. (DLSU v. DLSUEA, 2000)

Voluntary Recognition
Book V, Rule 1, Sec. 1 (bbb) Voluntary Recognition refers to the process by which a legitimate labor union is recognized by the employer as the exclusive bargaining representative or agent in a bargaining unit, reported with the Regional office in accordance to Rule VII, Sec 2 of these Rules. Conditions: a. Unorganized establishments; b. Only one union asking for recognition; c. The members of the bargaining unit did not object to the projected recognition of the union.

Requirements
Book V Rule VII Sec. 2 The notice of voluntary recognition shall be accompanied by the original copy and two (2) duplicate copies of the following documents: a. A joint statement under oath of voluntary recognition attesting to the fact of voluntary recognition; b. Certificate of posting of the joint statement of voluntary recognition for fifteen (15) consecutive days in at least two (2) conspicuous places in the establishment or bargaining unit where the union seeks to operate; c. The approximate number of employees in the bargaining unit, accompanied by the names of those who support the voluntary recognition comprising at least majority of the members of the bargaining unit; and d. A statement that the labor union is the only legitimate labor organization operating within the bargaining unit. All accompanying documents of the notice for voluntary recognition shall be certified under oath by the employer representative and president of the recognized labor union.

Art. 255. Exclusive Bargaining and Workers participation in the policy and decision making General Rule: The labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be the exclusive representative of the employees in such a unit for the purpose of collective bargaining. Exception: However, an individual employee or group of employees shall have the right at any time to present grievances to their employer. Any provision of law to the contrary notwithstanding, workers shall have the right, to participate in the policy and decision-making processes of the establishment where they are employed insofar as said processes will directly affect their rights, benefits and welfare. For this purpose, workers and employers may form labor-management councils: Provided, that the representatives of the workers in such labormanagement councils shall be elected by at least the majority of all employees in said establishment.

Appropriate Bargaining Unit: Defined

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an official designation of bargaining units and an affirmation of the employees expressed choice of bargaining agent. (Young Men Labor Union Stevedores v. CIR, 1965) Implications Technical rules and objections should not hamper the correct ascertainment of the labor union that has the support and confidence of the majority of the workers and is thus entitled to represent them in bargaining for the terms and conditions of their employment. (Port Workers Union v. DOLE, 1992) It is the most DEMOCRATIC and most efficacious/effective way. (Samahang Manggagawa sa Permex v. Secretary of Labor, 1998) It is a STATUTORY POLICY. (Balyca Corporation v. Ferre-Calleja, 1998) Thus it should not be circumvented. There should be no obstacle in conducting the certification election. (George & Peter Lines, Inc. v. Associated Labor Union, 1985) Certification election is the fairest and most effective way of determining which labor organization can truly represent the working force. It is a fundamental postulate that the will of the majority given expression in an honest election with freedom on the aprt of the voters to make their choice, is controlling. (PLUM Federation of Industrial and Agrarian Workers v. Noriel, 1978)

Certification election The certification election is the best method of determining the will of the workers on the crucial question of who shall represent them in their negotiations with the management for a collective bargaining agreement that will best protect and promote their interests. It is essential that there be no collusion against this objective between an unscrupulous management and a union covertly supporting it while professing its loyalty to labor, or at least that the hopes of labor be not frustrated because of its representation by a union that does not enjoy its approval and support. It is therefore sound policy that any doubt regarding the real representation of the workers be resolved in favor of the holding of the certification election. This is preferable to the suppression of the voice of the workers through the prissy observance of technical rules that will exalt procedure over substantial justice. (Port Workers Union of the Philippines v. Laguesma, 1992)

Purpose The purpose of a certification election is precisely the ascertainment of the wishes of the majority of the employees in the appropriate bargaining unit: to be or not to be represented by a labor organization, and in the affirmative case, by which particular labor organization. (Reyes v. Trajano, 1992)

Nature of proceeding/ effect of private agreement It is not litigation, but a mere investigation of a non-adversary character. The object of the proceedings is merely the determination of proper bargaining units and the ascertainment of the will and choice of the employees in respect of the selection of the bargaining representative. The determination of the proceeding does not entail the entry of remedial orders or redress of rights, but culmination solely in

Who may vote? All employees whether union members or not, as long as they belong to the appropriate bargaining unit can vote.

Note: Certification election is different from a union election. The objective of a union election is to elect union officers. Thus, in union elections onlu union members can vote. In an unorganized establishment

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Article 257 A petition shall be filed by a legitimate labor organization. Upon filing of the petition, the MED-Arbiter shall AUTOMATICALLY conduct a certification election. Filing of petition is by A LEGITIMATE labor organization . It cannot be an unregistered labor organization. This is best read in relation to Art. 242 which enumerates the rights granted to a legitimate labor organization and one of those rights granted to a legitimate labor organization and one of those rights is the right to be chosen as the exclusive bargaining representative. This is one way the law encourages union registration. Venue: BLR Regional Office which issued the petitioning unions certificate of registration or certificate of creation of chartered local.

A rival union does not have authority to verify the signatures in the substantial support requirement. Only the department of labor has authority to verify. (Todays Knitting Free Workers Union v. Noriel, 1977)

Effects of Withdrawal of Signatures Before the filing The withdrawal is presumed voluntary and it would affect the propriety of the petition. After the filing The withdrawal is presumed to be involuntary and not was procured through duress, coercion, or for a valuable consideration. (Oriental Tin Can Labor Union v. Secretary of Labor, 1998)

In an organized establishment
Article 256 1. A petition questioning the majority status shall be filed by a legitimate labor organization (including mother union and local chapter). 2. Requisites for petition: - Verified - Filed within the 60-day period before expiration of CBA (freedom period) - Supported by written consent of at least 25% of ALL employees in the bargaining unit.

Substantial Support Rule Rationale: In organized establishments, the incumbent sole bargaining agent should not be easily replaced for that would disturb industrial stability. To justify the disturbance, it must appear that at least a substantial number seeks to have a new exclusive bargaining unit. Note: A union that is merely filing a MOTION FOR INTERVENTION in a CE filed by another union need NOT present substantial support. The substantial support is only needed when filing for a petition for certification election.

3. If the petition is filed by a national union or federation, it shall not be required to disclose the names of the llocal chapters officers and members. 4. Med-Arbiter shall automatically order an election. 5. Requisites for election: - By secret ballot - At least majority of ALL eligible voters in the unit must have cast their votes. 6. Labor union receiving MAJORITY of the valid votes cast shall be certified as the exclusive bargaining agent of all workers in the unit.

Election process and procedure (Book V Rule VIII, IRR) Who may file?
SECTION 1 1. Any legitimate labor organization may file a petition for certification election. 2. When requested to bargain collectively, an employer may file a petition for certification election with the Regional Office. 3. If there is no existing registered collective bargaining agreement in the bargaining unit, the Regional Office shall, after hearing, order the conduct of a certification election.

Discretionary Rule If you strictly follow the letter of the law it would seem to be mandatory. However, if the petition does not comply with the substantial support requirement, the BLR may exercise its discretion in determining whether or not a certification election must be conducted. (Scout Albano Memorial College v. Noriel, 1978)

Where to file?
SECTION 2. Regional Office of which issued the petitioning unions certificate of registration/certificate of creation of chartered local. - The petition shall be heard and resolved by the Med-Arbiter. - Where two or more petitions involving the same bargaining unit are filed in one Regional Office, the same shall be automatically consolidated with the Med-Arbiter who first acquired jurisdiction. - Where the petitions are filed in different Regional Offices, the Regional Office in which the petition was first filed shall exclude others; in which case, the latter shall indorse the petition to the former for consolidation.

When to file?

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SECTION 3. A petition for certification election may be filed anytime, except: a. When a fact of voluntary recognition has been entered or a valid certification, consent or run-off election has been conducted within the bargaining unit within one (1) year prior to the filing of the petition for certification election. - Where an appeal has been filed from the order of the Med-Arbiter certifying the results of the election, the running of the one year period shall be suspended until the decision on the appeal has become final and executory. b. When the duly certified union has commenced and sustained negotiations in good faith with the employer in accordance with Article 250 of the Labor Code within the one year period referred to in the immediately preceding paragraph; c. When a bargaining deadlock to which an incumbent or certified bargaining agent is a party had been submitted to conciliation or arbitration or had become the subject of a valid notice of strike or lockout; d. When a collective bargaining agreement between the employer and a duly recognized or certified bargaining agent has been registered, the petition may be filed only within sixty (60) days prior to its expiry. 5. such other matters as may be relevant for the final disposition of the case

Order (Sec 13, as amended by D.O. 40-F-03 Series of 2008, Nov. 8, 2008) Order/Decision on the Petition Book V Rule VIII Sec 13 Who: the Med-Arbiter shall formally issue a ruling granting or denying the petition. When: Within ten (10) days from the last hearing Except: in an organized establishment where the grant of petition can only be made after the lapse of the freedom period. The ruling for the conduct of certification election shall state the following: a. the name of the employer or the establishment; b. a description of the bargaining unit; c. a statement that none of the grounds for dismissal enumerated in the succeeding paragraph exists; d. the names of the contending labor unions which shall appear in the following order: the petitioner unions in the order of the date of filing of their respective petitions; the forced intervenor; and No union; e. to afford an individual an informed choice where a local/chapter is one of the contending unions, a directive to an unregistered local/chapter to personally submit to the election office its certificate of creation at least five (5) working days before the actual conduct of the certification election. Non-submission of this requirement as certified by the election officer shall disqualify the local/chapter from participating in the certification election; and f. directive to the employer and the contending union(s) to submit within ten (10) days from receipt of the order; the certified list of employees in the bargaining unit, or where necessary, the payrolls covering the members of the bargaining unit for the last three (3) months prior to the issuance of the order. Certification Election MECHANICS a. Posting of Notice Book V Rule IX Sec. 6, IRR:
Who: Election Officer shall cause the posting What: notice of election

Forced Intervenor
Book V Rule VIII Sec. 7. The incumbent bargaining agent shall automatically be one of the choices in the certification election as forced intervenor.

Motion for Intervention


Book V Rule VIII Sec. 8. a. In an organized establishment: Any legitimate labor union other than the incumbent bargaining agent operating within the bargaining unit may file a motion for intervention with the Med-Arbiter. When to file: during the freedom period of the collective bargaining agreement. The form and contents of the motion shall be the same as that of a petition for certification election. b. In an unorganized establishment When to file: The motion shall be filed at anytime prior to the decision of the Med-Arbiter. The form and contents shall likewise be the same as that of a petition for certification election. The motion for intervention shall be resolved in the same decision issued in the petition for certification election.

Preliminary Conference; hearing


Book V Rule VIII Sec. 9 Who: The Med-Arbiter shall conduct a preliminary conference and hearing When: within the ten (10) days from receipt of the petition to determine the following: 1. the bargaining unit to be represented; 2. the contending labor unions; 3. possibility of a consent election; 4. the existence of anuy opf the bars to certification election under Section 3 of this rule; and

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Where: 2 conspicuous places in company premises When: at least 10 days before actual election Contents and Notice: Date and Time of election; Names of all contending unions; Description of the bargaining unit; List of eligible and challenged Voters. The posting of the notice of election, the information required to be included therein and the duration of the posting cannot be waived by the contending unions or the employer.

to vote by reason of neglect to exercise the right in past cases. (Reyes v. Trajano, 1992) e. Challenge Voter An employer has no standing to question a certification election since this is the sole concern of the workers but may question the inclusion of any disqualified employee in the certification election during the exclusion-inclusion proceedings before the representation officer. (Philippine Telephone & Telegraph Co. v. Laguesma, 1993)

b. Voting List and Voters The basis of determining voters may be agreed upon by the parties (i.e. the use of payroll). (Acoje Workers Union v. NAMAWU, 1963)

f. Voting Day IRR, Book V Rule IX Sec. 2. The election shall be set on a regular business day.

c. All Employees entitled to vote All rank-and-file employees in the appropriate bargaining unit. The Code makes no distinction as to their employment status. All they need to be eligible to support the petition is to belong to a bargaining unit. (Airtime Specialists, Inc. v. Director of BLR, 1990) Employees who have been improperly laid off but who have a present, unabandoned right to or expectation elections. If the dismissal is under question, employees concerned could still qualify to vote in the elections. (Philippine Fruits v. Torres, 1992)

Organized v. Unorganized Establishment


Art. 256: Organized Existing, has one VERIFIED No petition for Certification election EXCEPT within 60 days before the expiration of the collective bargaining agreement (See Art 253 & 253-A) Take note how SC inter preted the term WITHIN. What is the rationale of freedom period in Organized establishments, why is there none in unorganized establishments? It has something to do with industrial peace. Substantial Support Rule Must be duly supported by 25% of ALL THE MEMBERS OF THE APPROPRIATE BARGAINING NO substantial support rule. Why? Intention of law is bring in the union, to implement policy behind Art. 257: Unorganized None No need to be verified Not applicable. No freedom period. Can file petition anytime.

Bargaining agent Petition filed Freedom Period

Rationale for Non-Distinction Policy Collective bargaining covers all aspects of the employment relation and the resultant CBA binds all employees in the bargaining unit. All rank and file employees, probationary or permanent, have a substantial interest in the selection of the bargaining representative. (Reyes v. Trajano, 1992)

d. Effect of Non-participation in previous election Failure to take part in previous elections is no bar to the right to participate in future elections. No law, administrative rule or precedent prescribes forfeiture of the right

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UNIT. Percentage base: all members of an appropriate bargaining unit. What is intent and purpose of law for requiring the substantial support rule? Law wants to know the intention of the employees. If they really want a CE, since they already have a bargaining unit. Art. 211 (a).

General Rule: The Bureau shall not entertain any petition for certification election or any other action which may disturb the administration of duly registered existing collective bargaining agreements affecting the parties. (Art. 232 sec. 15 of RA 6715) Exceptions: Art. 253, 253-A and 256 of this Code (60 day freedom period) Freedom Period The last 60n days in a Collective Bargaining Agreement (CBA) is referred to as the freedom period when rival union representation can be entertained during the existence of a CBA. It is during this particular period when the majority status of the incumbent bargaining agent can be challenged. (Tanduay Distillery Labor Union v. NLRC, 1987) The purpose of the prohibition against the filing of a petition for certification election outside the so-called freedom period is to ensure industrial peace between the employer and its employees during the existence of the CBA. (Republic Planters Bank Union v. Laguesma, 1996) The premature renewal of a CBA cannot bar the holding of a certification election by virtue of a bona fide petition filed within the freedom period if the clear intention was to frustrate the constitutional right of the employees to self-organization. (Associated Labor Union v. Calleja, 1989)

EMPLOYER as initiating party An employer may file a petition ONLY when it is requested to bargain collectively.

Art. 258, par. 1. When an employer may file petition? When requested to bargain collectively, an employer may petition the Bureau for an election. If there is no existing certified collective bargaining agreement in the unit, the Bureau shall, after hearing, order a certified election.

Art. 258-A Employer as by-stander. In all cases, whether the petition for certification election is filed by an employer or a legitimate labor organization, the employer shall not be considered a party thereto with the concomitant right to oppose a petition for certification election. The employer participation is such proceedings shall be limited to:

One-Year Ban Rule


Book V, Rule VIII, Sec. 3 (a). Within 1 year from fact that voluntary recognition has been entered, or time of valid certification, consent or run-off election has been conducted. Reckoning period: If APPEALED, date when decision is final and executory. Book V, Rule VIII, Sec. 14 (d) [formerly sec 14 (c) as amended by D.O. 40-F-03 Series of 2008, Novemebre 8, 2008]. From the date of recording of voluntary recognition or from valid certification, consent, run0off election where no appeal on the results of election is pending.

a.

Being notified or informed of petitions of such nature; and b. Submitting the list of employees during the pre-election conference should the Med-Arbiter act favorably on the petition. Employer is a TOTAL STRANGER in the process of Certification Election. Employer has NO STANDING to file a MOTION TO DISMISS. (PT&T v. Laguesma, 1993) Rules prohibiting the filing of petition for certification election

Negotation Bar Rule

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Book V, Rule VIII, Sec. 3 (b): When to file A petition for certification election my be filed anytime, EXCEPT: When the duly certified union has commenced and sustained negotiations in good faith with the employer. In accordance with Art 250 of the Labor Code Within one year period referred to in the immediate paragraph. Sec 14 (e) [formerly sec 14 (d) as amended by D.O. 40-F-03 Series of 2008, November 8, 2008] The Med-Arbiter may dismiss a petition on any of the following grounds: xxx xxx xxx Where a duly certified union has commenced and sustained negotiations in accordance with Art. 250 of the Labor Code within the one-year period referred to in Section 14 of this Rule or xxx xxx xxx

employees of the company would not reflect the true sentiment and wishes of the said workers and employees because the votes of the members of the dominated union would not be free. Such charge of company domination is a prejudicial question that until decided, shall suspend or bar proceedings for certification election. If it were a labor organization objecting to the participation in a certification election of a company-dominated union, as a result of which a complaint for an unfair labor practice case against the employer was filed, and when the court finds that said union is employer-dominated in the unfair labor practice case, the union selected would be decertified and the whole election proceedings would be rendered useless and nugatory. There would be an impairment of the integrity of the collective bargaining process if a companydominated union were allowed to participate in a certification election. (United CMC Textile Workers Union v. BLR, 1984)

Contract Bar Rule


Book V, Rule VIII, Sec. 3 (d). When a collective bargaining agreement between the employer and a duly recognized or certified bargaining agent has been registered in accordance with Art 231 of the Labor Code. Where such collective bargaining agreement is registered, the petition may be filed only within sixty (60) days prior to its expiry. Book V, Rule VIII, Sec. 14 (a) (as amended by D.O. 40-F03 Series of 2008, November 8, 2008): The petitioning union or national union/federation is not listed in the Departments registry of legitimate labor unions or that its registritation certificate has been cancelled with finality in accordance with Rule XIV of these rules.

Contract Bar Rule Applied: Extended CBA No petition for CE may be filed after the lapse of the 60 day freedom period. The old CBA is extended until a new one is filed. the

Requirements for validity of certification election Voting Turnout For the election to be valid, majority of all eligible voters must have cast their votes. (Art. 256)

The purpose is to ensure stability in relationship of the workers and the company.

Suspension of Election: Prejudicial Question Rule Formal charge of ULP against the employer for establishing a company union triggers suspension. (B.F. Goodrich Philippines Marikina v. B.F. Goodrich Confidential and Salaried Employees Union) Note: The ONLY party who could ask for the suspension of the CE is the labor union which filed a complaint for ULP against the employer.

Eligible Voter: Defined


Book V, Rule 1, Sec. 1 (q). Eligible voter refers to a voter belonging to the appropriate bargaining unit that is the subject of a petition for certification election.

Failure of Election Where the number of votes cast in a certification election is less than the majority of the number of eligible voters; AND there are NO material challenged votes.

Suspension of Election: Rationale If there is a union dominated by the company, to which some of the workers belong, an election among workers and

Boo V, kRule IX, sec. 17

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The election office shall declare a failure of election in the minutes of the election proceeding.

Failure of Election: Effect


Book V, Rule IX sec 18 It shall NOT bar the filing of a motion for the immediate holding of another certification or consent election within six (6) months from the date of the declaration of failure of election.

Protests not so raised are deemed waived. (Jisscor Indeoendent Union v. Torres, 1993)

Appeal from Certification Election (Art. 259)


- Appealable: Order of Med-Arbiter - Where to Appeal: with the Secretary of Labor - Ground The rules and regulations or parts established by the Secretary of Labor for the conduct of election have been violated. Period for decision: 15 calendar days

Valid Election: Certification of designated majority union


Arts. 255, 256: The labor union designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining. Book V Rule IX Sec 15 (as amended by D.O. 40 F-03 Series of 2008, November 8, 2008) The union which obtained a majority of the valid votes cast shall be certified as the sole and exclusive bargaining agent of all the employees in the appropriate bargaining unit within five (5) days from the day of the election, provided no protest is recorded in the minutes of the election. Sec. 19 (as amended by D.O. 40 F-03 Series of 2008, November 8, 2008) When: Within twenty-four (24) hours from final canvass of votes, there being a valid election. Who: the Election officer shall transmit What: the records of the case to the Med-Arbiter who shall, within the same period from receipt of the minutes and result of election. Issue an order proclaiming the results of the election and Certifying the union which obtained a majority of the valid votes cast as the sole and exclusive bargaining agent on the subject bargaining unit under any of the following conditions: No protest was filed or even if one was filed, the same was not perfected within the five day period for perfection of the protest. No challenge or eligibility issue was raised or, even if one was raised, the resolution of the same will not materially change the results of the election. xxxx

Annulment General allegation of duress is not sufficient to invalidate a certification election; it must be shown by competent and credible proof. (United Employees Union of Gelmart Inc. v. Noriel, 1975)

Irregularities that may invalidate certification election: Inability of workers to vote; Failure to safeguard secrecy of the ballot; Intimidation of election supervisors; and Neglect in performance of duties. (Confederation of Citizens Labor Union v. Noriel, 1982)

Run-off election Requirements a. Valid election took place because majority of the CBU members voted; b. The election provides for 3 or more choices. E.g. Union A, Union B, and No Union, thus there are at least two union candidates; c. No Choice receives a majority of the valid votes cast; d. The total number of votes for all contending unions is at least 50% of the total number of votes cast; e. There is no unresolved challenge of voter or election protest; f. The run-off election shall be conducted between the labor unions receiving the two highest number of votes. Run-Off Election: Illustration The CBU has 100 members and eighty of which voted. Union A=30; Union B=15; Union C=15 and No Union=20. There were no valid votes. Since none got

Protests and other questions arising from conduct of certification election Requirements in order that a protest filed would prosper a. The protest must be filed with the representation officer and made of record in the minutes of the proceedings before the close of election proceedings, AND b. The protest must be formalized before the Med-Arbiter within five (5) days after the close of the election proceedings.

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the majority of the 80 valid votes and the contending unions obtained 60 votes, which even exceed one-half a run-off election is proper. The run-off will be between the labor unions receiving the two highest number of votes. The rematch is NOT between two unions but between two highest votes. Thus the run-off will be among Union A, B and C (Azucena) At the expiration of the freedom period, the employer shall continue to recognize the majority status of incumbent bargaining agent, where no petition for certification election is filed. Choice: Yes Union or No Union 2nd Level of Choice: If Yes Union wins, WHICH union? (UST Faculty Union v. Bitonio, 1999) Conduct Ordered by the DOLE. Voluntarily agreed upon by the parties, with or without intervention from DOLE.

Re-run election
Book V, Rule IX sec. 18 A motion for the immediate holding of another certification or consent election can be filed within six (6) months from the date of the declaration of failure of election.

Affiliation and disaffiliation of the local union from the mother union Affiliation: Purpose and Nature of Relations
ART. 211: Declaration of Policy (c) To foster the free and voluntary organization of a strong and united labor movement

Consent election Voluntarily agreed upon by the parties, during the preliminary conference after the receipt of petition for certification election

Book V Rule VIII Sec 10 (as amended by DO 40 F-03 Series of 2008, Nov. 8, 2008) The contending unions may agree to the holding of an election. In which case, it shall be called a consent election. The MedArbiter shall for with call for the consent election reflecting the parties agreement and the call in the minutes of the conference.

Purpose The sole essence of affiliation is to increase, by collective action, the common bargaining power of local unions for the effective enhancement and protection of their interests. Admittedly, there are times when without succor and support local unions may find it hard, unaided by other support groups, to secure justice for themselves. (Phil Skylanders v. NLRC, 2002)

Certification election v. Consent Election Certification Election Aimed at determining the sole and exclusive bargaining agent of all employees in an appropriate bargaining unit for purpose of collective bargaining. 1st Level of Consent Election Merely to determine the issue of majority representation of all the workers in the appropriate collective bargaining unit.

Purpose

Nature of Relationship (Agency) The mother union, acting for and in behalf of its affiliate, had the status of an agent while the local remained the basic unit of the association, free to serve common interest of all its members, subject only to restraints imposed by the constitution and by the by-laws of the

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association. The same is true even if the local is not a legitimate labor organization. (Filipino Pipe and Foundry Corp v. NLRC, 1998) Effect of Affiliation Locals remain the basic units of association, free to serve their own and the common interests of all. Inclusion of FFW in the registration is merely to stress that they are its affiliates at the time of registrations. It does not mean that said local unions cannot stand on their own. Affiliation does not mean they lost their own legal personality (Adamson v. CIR, 1984) In Toyota Motor Philippines Corporation v. Toyota Motor Philippines Corporation Labor Union and the Secretary of Labor and Employment (GR No. 121084, February 19, 1997), it was held that a labor organization composed of both rank and file and supervisory employees is no labor organization at all. Hence, it is not a legitimate labor organization. Consequently, because it carries a mixture of rank and file and supervisory employees, it cannot possess any of the rights of a legitimate labor organization, including the right to file a petition for certification election for the purpose of collective bargaining. This ruling was, however, abandoned in Tagaytay Highlands International Golf Club v. Tagaytay Highlands Employees Union, GR No. 142000, January 22, 2003 where the Court stated that the inclusion in a union of disqualified employees is not among the grounds for cancellation, unless such inclusion is due to misrepresentation, false statement or fraud. In Republic of the Philippines v. Kawashima Textile Marketing Philippines, GR No. 160352, July 23, 2008, the Tagaytay ruling was reiterated.
ART. 245-A. Effect of Inclusion as Members of Employees outside the Bargaining Unit The inclusion as members of employees outside the bargaining unit shall not be a ground for the cancellation of the registration of the union. Said employees are automatically deemed removed from the list of membership of said union.

Definition: Independent Union/Local Union


Book V Rule 1 Sec. 1 (w) Independent Union a labor organization operating at the enterprise level that required legal personality through independent registration under Art. 234 of the Labor Code and Rule III Sec. 2-A of the IRR.

Definition: Chartered Local (Local Chapter)


Book V Rule 1 Sec. 1 (i) Chartered Local a labor organization in the private sector operating at the enterprise level that acquired legal personality through the issuance of a charter certificate by a duly registered federation or national union, and reported to the Regional Office in accordance with Rule III Sec. 2E of the IRR.

Definition: Affiliate
Book V Rule 1 Sec. 1 (a) Affiliate an independent union affiliated with a federated, national union or a chartered local which was subsequently granted independent registration but did not disaffiliate from its federation, reported to the Regional Office and the Bureau in accordance with Rule III Secs. 6 and 7 of the IRR.

Definition: National Union or Federation


Book V Rule 1 Sec. 1 (kk) National Union or Federation a group of legitimate labor unions in a private establishment organized for collective bargaining or for dealing with employers concerning terms and conditions of employment for their member union or for participating in the formulation of social and employment policies, standards and programs, registered with the BLR in accordance with Rule III Sec. 2-B of the IRR.

Local Union Disaffiliation/Mass Disaffiliation Nature of Right of Disaffiliation A local union being a separate and voluntary association, is free to serve the interests of all its members. It has the right to disaffiliate or declare its autonomy from the federation to which it belongs when circumstances warrant, in accordance with the constitutional guarantee of freedom of association, and such disaffiliation cannot be considered disloyalty. (Malayang Samahan ng mga Manggagawa v. Ramos, 2000)

Supervisor/Rank and File Union Affiliation


ART. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank and file employees but may join, assist or form separate labor organizations of their own.

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The locals are separate and distinct units primarily designed to secure and maintain an equally of bargaining power between the employer and their employeemembers; and the association of the locals into the national union was in furtherance of the same end. These associations are consensual entities capable of entering into such legal relations with their member. The essential purpose was the affiliation of the local unions into a common enterprise to increase by collective action the common bargaining power in respect of the terms and conditions of labor. (Tropical Hut Employees Union v. Tropical Hut Food Market, Inc. 1990) Local unions remain the basic units of association, free to serve their own interests subject to the restraints imposed by the constitution and by-laws of the national federation, and free also to renounce the affiliation upon the terms laid down in the agreement which brought such affiliation into existence. (Phil. Skylanders Inc. v. NLRC, 2002) in the absence of a new agreement. Until a new CBA has been executed by and between the parties, they are duty bound to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreements. The law does not provide for an exception nor qualification as to which of the economic provisions of the existing agreements are to retain force and effect, therefore it encompasses all provisions. The New CBA is given PROSPECTIVE effect generally since 253 and 253-A provides for an automatic renewal clause in existing CBAs. PURPOSE: To avoid creating a gap during which no agreement would govern. It is better for industrial peace if effectivity of the CBA is longer. (New Pacific Timber and Supply Co. Inc. v. NLR, 2000)

Union dues and special assessments Union does are defined as payments to meet the unions general and current obligations. The payment must be regular, periodic, and uniform. Special assessments are payments for a special purpose, especially if required only for a limited time. (Azucena)

Disaffiliation: Must be by a Majority Decision


Disaffiliation is a major policy question. Thus, it shall be made by a ,majority decision of the entire membership, after due deliberation, by secret ballot, unless, the nature of the organization or force majeure renders such secret ballot impractical, in which case, the board of directors of the organization may make the decision. (Art. 241 [d])

A. Union Funds Rights/Conditions of membership in a Labor Organization ART. 241 (b) Members are entitled to full/detailed financial transaction reports (g) Collection of any fees, dues or other contributions in behalf of the labor org. or any disbursement of its money/funds allowed if duly authorized by CBL (h) Payment of fees, dues or other contributions by member shall be evidenced by a receipt signed by the officer or agent making the collection and entered into the record of the org (i) Funds of the orig shall not be applied for any purpose or object other than those expressly provided by the CBL or authorized by written resolution adopted by the majority of the members at a general meeting duly called for the purpose. (j) Every income or revenue of the orig shall be evidenced by a record showing its source, and every expenditure of its funds shall be evidenced by a receipt. (l) The treasurer shall render account (duly audited and verified by affidavit and a copy thereof shall be furnished the Secretary of Labor) 1. At least once a year within 30 days after the close of its fiscal year; 2. At such other times as may be required by a resolution of the majority of the members of the organization; and 3. Upon vacating his office. (m) Books of accounts and other records of the financial activities of any labor org shall be open to inspection by any officer or member thereof during office hours.

Disaffiliation: Effect on Legal Status If union is independently registered it retains its legal personality. If union is a chartered local it loses its legal personality.

Substitutionary doctrine Disaffiliation; effect on existing CBA. The CBA shall subsist until expiration. The new bargaining agent is bound to respect the CBA. The terms of an existing CBA, particularly its economic provisions, can be extended beyond the 3 year period prescribed by law

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(n) No special assessment or other extraordinary fees may be levied upon the members of a labor org unless authorized by a written resolution of a majority of all the members of a general membership meeting duly called for the purpose. (o) Other than for mandatory activities under the Code, no special assessments, atty.s fees, negotiation fees or any other extraordinary fees may be checked off from any amount due to an employee without an individual written authorization duly signed by the Employee. The authorization should specifically state the amount, purpose and beneficiary of the deduction. Note: Secretary of Labor or his duly authorized representative may inquire into financial activities of legitimate labor organizations UPON filing of complaint under oath and supported by written consent of at least 20% of total membership, Provided, such inquiry shall not be conducted during (60)-day freedom period nor within the thirty (30) days immediately preceding the date of election of union officials. (Art. 274) B. Source of Payment Attorneys Fees, Special Assessments ART. 222 (b) Attorneys fees, negotiation fees o r similar charges of any kind arising from any collective bargaining negotiations or conclusion of the collective agreement shall NOT be imposed on individual member of contracting union, but may be charged against union funds in an amount to be agreed upon by the parties. Any contract, agreement or arrangement of any sort to the contrary shall be null and void.

Duty to bargain collectively Kiok Loy ruling a) While it is a mutual obligation, the employer is not under any legal duty to initiate contract negotiation. b) The mechanics of collective bargaining is set in motion when the following are present: 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, Proof of majority representation and Demand to bargain under Article 251, par. (a) of the New LaborCode General Concepts: Duty to Bargain: Constitutional Policies
1987 Constitution. Art. XIII, Sec. 3 The State shall guarantee the rights of workers to collective bargaining and negotiations. The State shall promote the principle of shared responsibilities between workers and employers and the preferential use of voluntary modos in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.

Requirements for validity (check off) 1. Authorization by written resolution of majority of ALL the members at the general membership meeting called for that purpose; 2. Secretarys record of the minutes of the meetings attested to by the president; 3. Individual written authorization for checkoff duly signed by the employees concerned. Note: There must be strict and full compliance with the requisites. NO SHORTCUTS. Substantial compliance is not enough. (Palacol v. Ferrer-Calleja)

Duty to Bargain: Statutory Policy


Labor Code, Art 211 (a). To promote and emphasize the primacy of FREE COLLECTIVE BARGAINING and negotiations, including voluntary arbitration, mediation and conciliation, as modes of setting labor or industrial disputes.

Jurisdiction over Check-Off disputes The Bureau of Labor Relations has jurisdiction to hear, decide and to mete out punishment any reported violation under Article 24.1

Collective Bargaining: Definition Collective bargaining which is defined as negotiations towards a collective agreement is one of the democratic frameworks under the New Labor Code, designed to stabilize the relation between labor and management and to create a climate of sound and stable industrial peace. It is a mutual responsibility of the employer and the Union and is characterized as a legal obligation. So much so that Article 249, par (g) of the Labor Code makes it an unfair labor practice for an employer to refuse to meet

Agency fees [Agency fee] is an amount, equivalent to union dues, which a non-union member pays to the union because he benefits from the CBA negotiated by the union. (Azucena) Requisites for assessment Right to Collective Bargaining

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and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work, and all other terms and conditions of employment. (Kiok Loy v. NLRC, 1986) Collective Bargaining: Nature and Purpose The institution of collective bargaining is a prime manifestation of industrial democracy at work. The two parties to the relationship, labor and management, make their own rules by coming to terms to govern themselves in matters that really count. (United Employees Union of Gelmart Industries v. Noriel, 1975) Collective Bargaining: Waiver of Right The right to free collective bargaining includes the right to suspend it. (Rivera v. Espiritu, 2000) of them, make available such up-to-date financial information on the economic situation of the undertaking, which is normally submitted to relevant government agencies, as is material and necessary for meaningful negotiations. Where the disclosure of some of this information could be prejudicial to the undertaking, its communication may be made condition upon a commitment that it would be regarded as confidential to the extent required. The information to be made available may be agreed upon between the parties to collective bargaining.

Collective Bargaining Deadlock: Definition The situation between the labor and the management of the company where there is failure in the collective bargaining negotiations resulting in a stalemate. It is a ground for strike or lockout. {IRR, Book V, Rule XXII, Sec. 1 of the Labor Code}. (San Miguel Corp. v. NLRC, 1999)

Duty to Bargain: Meaning


Art. 252. Meaning of duty to bargain collectively. The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreement and executing a contract incorporating such agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any concession. Art. 253. Duty to bargain collectively when there exists a collective bargaining agreement. When there is a collective bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate nor modify such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties.

Collective Bargaining: Procedure


Art. 251. Duty to bargain collectively in the absence of collective bargaining agreements. In the ABSENCE of a) an agreement or b) other VOLUNTARY ARRANGEMENT providing for a MORE EXPEDITIOUS manner of collective bargaining, it shall be the duty of the employer and the representatives of the employees to bargain collectively in accordance with the provisions of this Code. Private Procedure: Expediency as a Requirement The Labor Code authorizes parties to provide for their own procedures in Collective Bargaining but it must be more EXPEDITIOUS than that provided in Art. 250. If they are unable to agree they must follow procedure in the labor code. (Art. 250) Private Procedure: Rationale It is the policy of the state to promote the primacy of FREE collective bargaining. (Art. 211a) B. Labor Code Procedure (Art. 250) Party desiring to bargain collectively shall serve written notice on other party with statement of proposals. Reply by other party within 10 calendar days from receipt of notice. If dispute not settled, National Conciliation Mediation Board (NCMB) shall intervene on request or motu propio & call parties to conciliation meetings.

Rights of the Parties during Bargaining


Art. 242 (c) Right of legitimate labor organization to be furnished by the employer with annual audited financial statements, including the balance sheet and profit and loss statement, upon request.

Book V Rule information

XVI

Sec.

2.

Disclosure

The parties shall, at the request of either

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Art. 253. Duty to bargain collectively when there exists a collective bargaining agreement. When there is a collective bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate nor modify such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties. Art. 233. Privileged Communication Information and statements made at conciliation proceedings shall be treated as privileged communication and shall not be used as evidence in the Commission. Conciliators and similar officials shall not testify in any court or body regarding any matters taken up at conciliation proceedings conducted by them.

Note: Whenever a party serves a written notice upon the employer making demands, the latter shall reply not later than 10 days. However, this condition is merely procedural, and non-compliance cannot be deemed to be an act of ULP. (National Union of Restaurant Workers v. CIR, 1964) Compare with: More than a month after the proposals were submitted, the employer has not make any counterproposals. The companys refusal to make a counter-proposal to the unions 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. The employers actuations show a lack of sincere desire to negotiate, rendering it guilty of unfair labor practice. (Colegio de San Juan de Letran v. Association, 2000)

In Nissan Motors Philippines Inc. v. Secretary of Labor and Employment, GR 158190-91, June 21, 2006, the Supreme Court reversed the award made by the Secretary based on the revelation of the NCMB Administrator that was sourced from the confidential position given him by the Company. The reason for this was Article 233 which prohibits the use in evidence of confidential information given during conciliation proceedings. And in Pentagon Steel Corporation v. Court of Appeals, GR No. 174141, June 26, 2009, the Supreme Court mentioned the two-fold justification for the exclusionary rule as follows: First, since the law favors the settlement of controversies out of court, a person is entitled to buy his or her peace without danger of being prejudiced in case his or her efforts fail; hence, any communication made toward that end will be regarded as privileged. Indeed, if every offer to buy peace could be used as evidence against a person who presents it, many settlements would be prevented and unnecessary litigation would result, since no prudent person would dare offer or entertain a compromise if his or her compromise position could be exploited as a confession of weakness. Second, offers for compromise are irrelevant because they are not intended as admissions by the parties making them. A true offer of compromise does not, in legal contemplation, involve an admission on the part of a defendant that he or she is legally liable, or on the part of a plaintiff, that his or her claim is groundless or even doubtful, since it is made with a view to avoid controversy and save the expense of litigation. It is the distinguishing mark of an offer of compromise that it is made tentatively, hypothetically, and in contemplation of mutual concessions.

Failure to reply as indicia of bad faith GMCs failure to make a timely reply to the proposal sent by the union is indicative of its utter lack of interest in bargaining with the union. Its excuse that it felt the union no longer represented the workers was mainly dilatory as it turned out to be utterly baseless. GMCs refusal to make a counter-proposal 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. It is guilty of ULP. (General Milling Corp. v. CA, 2004)

Conciliation/Preventive Mediation

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Board Intervention
Art. 250 (c) If the dispute is not settled, the Board shall intervene upon request of either or both parties or at its own initiative and immediately call the parties to conciliation meetings. Art. 250. Procedure in collective bargaining. The following procedure shall be observed in collective bargaining: When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of its proposals. The other party shall make a reply thereto not later than ten (10) calendar days from receipt of such notice; Should differences arise on the basis of such notice and reply, either party may request for a conference which shall begin not later than ten (10) calendar days from the date of request. If the dispute is not settled, the Board shall intervene upon request of either or both parties or at its own initiative and immediately call the parties to conciliation meetings. The Board shall have the power to issue subpoenas requiring the attendance of the parties to such meetings. It shall be the duty of the parties to participate fully and promptly in the conciliation meetings the Board may call; During the conciliation proceedings in the Board, the parties are prohibited from doing any act which may disrupt or impede the early settlement of the disputes; and The Board shall exert all efforts to settle disputes amicably and encourage the parties to submit their case to a voluntary arbitrator. EO 251, Sec. 4. Section 22 of Executive Order No. 126 is hereby amended to read as follows: Sec. 22. National Conciliation and Mediation Board

The Board shall be composed of: a) Administrator, and b) 2 Deputy Administrators The Administrators and the Deputy Administrators shall be appointed by the President upon recommendation of the Secretary of Labor and Employment. There shall be as many ConciliatorsMediators as the needs of the public service require, who shall have at least three (3) years of experience in handling labor relations and who shall be appointed by the Secretary.

National Conciliation and Madiation Board Overview A National Conciliation and Mediation Board, herein referred to as the Board, is hereby created and which shall absorb the conciliation mediation and voluntary arbitration functions of the Bureau of Labor of Relations. It shall be an attached agency under the administrative supervision of the Secretary of Labor and Employment. The Board shall have its main office in Metropolitan Manila and its Administrators shall exercise supervision over Conciliators-Mediators and all its personnel. Branches It shall establish as many branches as there are administrative regions in the country, with a many Conciliator-Mediators as shall be necessary for its effective operation. Each branch of the Board shall be headed by an Executive Conciliator-Mediator. Composition

Functions Formulate policies, programs, standards, procedures, manuals of operation and guidelines pertaining to effective mediation and conciliation of labor disputes; Perform preventive mediation and conciliation functions; Coordinate and maintain linkages with other sectors of institutions, and other government authorities concerned with matters relative to the prevention and settlement of labor disputes; Formulate policies, plans, programs, standards, procedures, manuals of operation and guidelines pertaining to the promotion of cooperative and nonadversarial schemes, grievance handling, voluntary arbitration and other voluntary modes of dispute settlements; Administer the voluntary arbitration program; maintain/update a list of voluntary arbitrations; compile arbitration awards and decisions; Provide counseling and preventive mediation assistance particularly in the administration of collective agreement ; awards and decisions; Monitor and exercise technical supervision over the Board programs being implemented in the regional offices; and Perform such other functions as may be provided by law or assigned by the Secretary. Tripartite Council Voluntary Arbitration Advisory

A Tripartite Voluntary Arbitration Advisory Council is hereby created and attached to the National Conciliation and Mediation Board. The Tripartite Voluntary Arbitration Advisory Council shall advise the National

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Conciliation Board on matters pertaining to the promotion of voluntary arbitration as the preferred mode of dispute settlement. Composition a) Administrator of the National Conciliation and Mediation Board as Chairman, b) 1 other member from the government, c) 2 members representing labor, and d) 2 other members representing management. Appointment The members shall be appointed by the President to serve for a term of 3 years. The Chairman and Members thereof shall serve without compensation. mandatory subjects of collective bargaining; and it is no answer to the charge of refusal to bargain in good faith that the insistence on the disputed clause was not the sole cause of the failure to agree or that agreement was not reached with respect to other disputed clauses. (Samahang Manggagawa sa Top Form v. NLRC, 1998) Collective Bargaining Agreement CBA: Definition
Art. 250, 252 A contract executed upon request of either the employer or the exclusive bargaining representative incorporating the agreement reached after negotiations with respect to wages, hours of work and all other terms and conditions of employment, including proposals for adjusting any grievances or questions arising under such agreement.

CBA: Impressed with Public Policy A CBA, as a labor contract with the contemplation of Article 1700 of the Civil Code 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. (Davao Integrated Port Stevedoring Services v. Abarquez, 1993)

Bargainable Issues
Art 252 xxx xxx xxx for the purpose of negotiating an agreement with respect to wages, hours of work, and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement. xxx xxx xxx

Test for Mandatory Bargainable Issues: NEXUS Between the Nature of Employment and the Nature of the Demand. The other terms and conditions of employment to become a mandatory bargainable issue must have a connection between the proposal and the nature of the work. Importance of determining whether an issue is a mandatory bargaining issue or only a permissive bargaining issue: The question as to what are mandatory and what are merely permissive subjects of collective bargaining is of significance on the right of a party to insist on his position to the point of stalemate. A party may refuse to enter into a collective bargaining contract unless it includes a desired provision as to a matter which is a mandatory subject of collective bargaining. But a refusal to contract unless the agreement covers a matter which is not a mandatory subject is in substance a refusal to bargain about matters which are

CBA: Effect of Sub-standard Contract This was deleted as a ground for cancellation of registration by RA 9481. But it is nonetheless prohibited to enter into sub-standard contract. An incomplete CBA cannot be a bar to an election certification.

CBA: Registration
Art. 231. Registry of unions and file of CBAs General Rule: The file shall be open and accessible to interested parties. Exceptions: No specific information submitted in confidence shall be disclosed unless: Authorized by the Secretary of Labor; or When it is at issue in any judicial litigation when public interest or national security so requires.

CBA: Beneficiaries

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All workers in a CBU. When a collective bargaining contract is entered into by the union representing the employees and the employer, even the non-member employees are entitled to the benefits of the contract. (New Pacific Timber and Supply v. NLRC, 2000) To accord its benefits only to members of the union without any valid reason would constitute undue discrimination against non-members.
POLITICAL ASPECT: Any Collective Bargaining Agreement that the parties may enter into shall, insofar as the representation aspect is concerned be for a term of five (5) years. No petition questioning the majority status of the incumbent bargaining agent shall be entertained and no certification election shall be conducted by the DOLE outside of the sixty-day period immediately before the date of the expiry of such five year term of the Collective Bargaining Agreement. ECONOMIC ASPECT: All other provisions of the CBA shall be renegotiated not later than three (3) years after its execution. Any agreement on such other provisions of the CBA entered into within six months from the expiry of the term of such other provisions as fixed in such CBA, shall retroact to the day immediately following such date. If any such agreement is entered into beyond six months, the parties shall agree on he duration of the retroactivity thereof. In case of a deadlock in the renegotiation of the CBA, the parties may exercise their rights under this Code.

CBA Interpretation, Administration and Enforcement Nature of Interpretation Contract and Contract

CBA Effectivity If it is the first ever CBA, the effectivity date is whatever date the parties agree on. If it is renegotiated CBA, the effectivity date depends upon the duration of conclusion. If it is concluded within 6 months from the expiry date, the new CBA will retroact to the date following the expiry date (Illustration: expiry date: December 13; effectivity date: December 14). If the renegotiated CBA is concluded beyond 6 months from the expiry date, the matter of retroaction and effectivity is left with the parties.

The terms and conditions of a collective bargaining contract constitute the law between the parties. (Mactan Workers Union v. Aboitiz, 1972) Those who are entitled to its benefits can invoke its provisions. In the event that an obligation therein imposed is not fulfilled, the aggrieved party has the right to go to court for redress. (Babcock-Hitachi (Phils) v. Babcock-Hitachi, 2005)

Contract Interpretation: Interpretation Tools A CBA, just like any other contract, is respected as the law between the contracting parties and compliance in good faith is mandated. Similarly, the rules embodied in the Civil Code on the proper interpretation of contracts can very well govern.

GENERAL RULE: If the terms of the contract are clear, the literal meaning of the stipulations shall control. EXCEPTION: If the words appear to be contrary to the evident intention of the parties, the latter shall prevail over the former. (Kimberly Clark Phils v. Lorredo, 1993) Contract Effectivity, Duration and Renewal
Art. 253-A. Terms of a CBA

Art 253-A serves as the guide in determining when the CBA at bar is to take effect. It provides that the representation aspect of the CBA is to be for aterm of 5 years. All other provisions of the CBA shall be renegotiated not later than 3 years after its execution. Any agreement on such other provision of the CBA entered into within 6 months from the date of expiry of the term of such other provisions as fixed in such Collective Bargaining Agreement shall retroact to the day immediately following such date. If such agreement is entered into beyond 6 months, the parties shall agree on the duration of the effectivity thereof. If no agreement is reached within 6 months from the expiry date of the 3 years that follow the CBA execution, the law expressly gives the parties not anybody else the discretion to fix the effectivity of the agreement. The law does not specifically cover the situation where 6 months have elapsed but no agreement has been reached with respect to effectivity. In this eventually, any provision of law should then apply. (Manila Electric Co. v. Quisumbing, 1999) CBA Duration

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Political Aspect (representation) 5 years. This refers to the identity and majority status of the collective bargaining agent that negotiated the CBA. Non-political aspect 3 years. This refers to other provisions in the CBA, economic or otherwise other than representational or political. Hold Over Principle
Art. 253. In the absence of a new CBA, the parties must maintain the status quo and must continue in full force and affect the terms and conditions of the existing agreement during the sixty (60) day period and/or until a new agreement is reached. In this manner, the law prevents the existence of a gap in the relationship between the collective bargaining parties.

them. Nor is the transferee liable for past unfair labor practices of the previous owner. Exception: i. When the liability therefore is assumed by the new employer under the contract of sale, or ii. When liability arises because of the new owners participation in thwarting or defeating the rights of the employees. The most that the transferee may do, for reasons of public policy and social justice, is to give preference to the qualified separated employees in the filing of vacancies in the facilities of the purchaser. (Manlimos v. NLRC, 1995) Mandatory provisions of CBA Grievance Procedure
Art. 260. Grievance Machinery and Voluntary Arbitration The parties to a Collective Bargaining Agreement shall include therein: Provisions that will ensure the mutual observance of its terms and conditions. A machinery for the adjustment and resolution of grievances arising from: The interpretation or implementation of their CBA; and Those arising from the interpretation or enforcement of company personnel policies. All grievances submitted to the grievance machinery which are not settled within 7 calendar days from the date of its submission shall automatically be referred to voluntary arbitration prescribed in the CBA.

Arbitrated CBA In the absence of an agreement between the aprties, an arbitrated CBA takes on the nature of any judicial or quasi-judicial award. It operates and may be executed only prospectively unless there are legal justifications for its retroactive application. (Manila Electric Company v. Quisumbing, 1999) CBA in this case, on the other hand, is part of an arbitral award. As such, it may be made retroactive to the date of expiration of the previous agreement. Therefore, in the absence of a specific provision of law prohibiting retroactivity of the effectivity of arbitral awards issued by the Secretary of Labor pursuant to Art. 263 (g), the latter is deemed vested with plenary and discretionary powers to determine the effectivity thereof. (Manila Central Line Corporation v. Manila Central Line Free Workers Union, 1998)

Grievances arising from the interpretation or implementation of the CBA are subjects of the grievance procedure. (Navarro III v. Damasco, 1995) It should be remembered that a grievance procedure is part of the continuous process of collective bargaining. It is intended to promote a friendly dialogue between labor and management as a means of maintaining industrial peace. (Master Iron Labor Union v. NLRC, 1993) No particular setup for a grievance machinery is required by law. Art. 260 of, as incorporated by RA 6715, only mandates that the parties to the CBA establish a machinery to settle problems

CBA and Third Party Applicability Labor contracts such as employment contracts and CBAs are not enforceable against a transferee of an enterprise, labor contracts being in personam, is binding only between the parties. (Sundowner Development Corporation v. Drilon, 1989)

General Rule: An innocent transferee of a business establishment has no liability to the employees of the transferor to continue employing

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arising from interpretation or implementation of their collective bargaining agreement and those arising from the interpretation or enforcement of company personnel policies. (Caltex Refinery Employees Association v. Brillantes, 1997) Voluntary Arbitration Voluntary Arbitration: Procedure
Art. 260. Grievance Machinery and Voluntary Arbitration xxx xxx xxx Parties to a CBA shall: Name and designate in advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, OR Include in the agreement a procedure for the selection of such Voluntary Arbitrator or panel of Voluntary Arbitrators preferably from the listing of qualified Voluntary Arbitrators duly accredited by the Board. In case the parties fail to select a Voluntary Arbitrator or panel of Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be necessary, pursuant to the selection Voluntary Arbitrator or panel of Arbitrators procedure agreed upon in the CBA, which shall act with the same force and effect as if he has been selected by the parties as described above. Art. 255. However, an individual employee or group of employees shall have the right at any time to present grievances to their employer. (1987 Constitution, Art. XIII, Sec. 3) xxx The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.

Promotion Establishing Machinery Dispute Settlement Collective Bargaining Agreement and Time Frame

Art. 260. Grievance Machinery and Voluntary Arbitration The parties to a Collective Bargaining Agreement shall include therein provisions that will ensure the mutual observance of its terms and conditions. They shall establish a machinery for the adjustment and resolution of grievances arising from the interpretation of their Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies. All grievances submitted to the grievance machinery which are not settled within 7 month calendar days from the date of its submission shall automatically be referred to voluntary arbitration prescribed in the Collective Bargaining Agreement. Xxx Executive Order 251, Sec. 4: Sec. 4. Section 22 of Executive Order No. 126 is hereby amended to read as follows: Sec. 22. National Conciliation and Mediation Board. A National Conciliation and Mediation Board, herein referred to as the Board, is hereby created and which shall absorb the conciliation mediation and voluntary arbitration functions of the Bureau of Labor of Relations in accordance with Section 29 (c) hereof Xxx A Tripartite Voluntary Arbitration Advisory Council is hereby created and attached to the National Conciliation and Mediation Board. The Tripartite Voluntary Arbitration Advisory Council shall advise the National Conciliation Board on matters pertaining to the promotion of voluntary arbitration as the preferred mode of dispute settlement.

Voluntary Arbitration: Features The stipulation to refer all future disputes to an arbitrator or to submit an ongoing dispute to one is valid. Being part of a contract between the parties, it is binding and enforceable in court in case one of them neglects, fails or refuses to arbitrate. Going a step further, in the event that they declare their intention to refer their difference to arbitration first before taking court action, this constitutes a condition precedent, such that where a suit has been instituted prematurely, the court shall suspend the same and the parties shall be directed forthwith to proceed to arbitration. A court action may likewise be proper where the arbitrator has not been selected by the parties. (Chung Fu Industries v. CA, 1992)

Voluntary Arbitration: Arbitrable Issues Disputes covered in Voluntary Arbitration: General Rule (Art. 261): Those unresolved grievances arising from the interpretation or implementation of the CBA; Also, those arising from the interpretation or enforcement of company personnel policies; Gross violations of CBA provision. Exception (Art. 262): If parties agree, VA may hear and decide all other labor disputes including ULP and bargaining deadlock.

Voluntary Arbitration: Basis and Rationale

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For purposes of this article, gross violations of CBA shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement. Rights Disputes and Interests Disputes: Distinguished Rights disputes: Claim for violation of a specific right (Arising from a contract, ex: CBA or company policies). Voluntary Arbitrator has original and exclusive jurisdiction over these matters. Interest Disputes: These ponder on the question what should be included in the CBA. Strictly speaking, the parties may choose a voluntary arbitrator to decide on terms and conditions of employment, but that is impracticable because it will be a value judgment of the arbitrator and not the parties. Voluntary Arbitrator Selection
Art. 260. How Voluntary Arbitrator is selected As stated in CBA (or selection procedure of a VA), preferably from a list of qualified VAs accredited by NCMB; If parties fail to select, the Board (NCMB) shall select VA pursuant to selection procedure as stated in CBA. Art. 260 xxx For this purpose, parties to s zcollective Bargaining Agreement shall name and designate in advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, Or include in the agreement the procedure for he selection of such Volunay Arbitrator or panel of voluntary Arbitrators, preferably from the listing of qualified Voluntay Arbitrators duly accredited by the Board. In case the parties fail to select a Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrators, as may be deemed necessay, pursuant to the selection procedure agreed upon in the Collective Bargaining Agreement, which shall act with same force and effect as if the Arbitrator or panel of Arbitrators has been selected by the parties as prescribed.

what the parties did in this case. After the Board failed to resolve the bargaining deadlock between parties, the union filed a petition for compulsory arbitration in the Arbitration Branch of the NLRC. Petitioner joined the petition and the case was submitted for decision. Although the unions petition was for compulsory arbitration, the subsequent agreement of petitioner to submit the matter for arbitration in effect made the arbitration a voluntary one. The essence of voluntary arbitration, after all is that it is by agreement of the parties, rather than compulsion of law, that a matter is submitted for arbitration. It does not matter that the person chosen as arbitrator is a labor arbiter who, under Art. 217 of the Labor Code, is charged with the compulsory arbitration of certain labor cases. There is nothing in the law that prohibits these labor arbiters from also acting as voluntary arbitrators as long as the parties agree to have him hear and decide their dispute. (Manila Central Line Free Workers Union v. Manila Central Line Corporation, 1998) Voluntary Arbitration: Procedure
Art. 262-A. Procedures The voluntary Arbitrators or panel of Voluntary Arbitrators shall have the power to hold hearings, receive evidences and take whatever action is necessary to resolve the issue or issues subject of dispute, including efforts to effect a voluntary settlement between parties. All parties to the dispute shall be entitled to attend the arbitration proceedings. The attendance of any third party or the exclusion of any witness from the proceedings shall be determined by the Voluntary Arbitrators. Hearing may be adjourned for a cause or upon agreement by the parties. Unless the parties agreed otherwise, it shall be mandatory for the Voluntary Arbitrators or panel of Voluntary Arbitrators to render an award or decision within twenty (20) calendar days from the date of submission of the dispute to voluntary arbitration. The award or decision shall contain the facts and the law on which it is based. It shall be final and executory after ten (10) calendar days from receipt of the copy of the award or its decision by the parties. Upon motion of any interested party, the Voluntary Arbitrator or panel of Voluntary Arbitrators or the Labor Arbiter in the region where the movant resides, in case of the absence or incapacity of the voluntary arbitrator or panel of voluntary arbitrators for any reason, may issue a writ of execution requiring wither the Sheriff of the Commission or regular Courts or any public official whom the parties may designate in the submission agreement to execute the final decision, order, or award.

Indeed, the Labor Code formerly provided that if the parties in collective bargaining fail to reach an agreement, the Bureau of Labor Relations should call them to conciliation meetings and, if its efforts were not successful, certify the dispute to a labor arbiter for compulsory arbitration. But this was changed by RA No. 6715 which took effect on March 21, 1989. Art. 250 (e) of the Labor Code now provides that if effects of conciliation fail, the Board shall encourage the parties to submit their case to a voluntary arbitrator. This is

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Awards and Orders
Art. 262-A xxx The award or decision shall contain the facts and the law on which it is based. It shall be final and executory after ten (10) calendar days from receipt of the copy of the award or its decision by the parties. Upon motion of any interested party, the Voluntary Arbitrator or panel of Voluntary Arbitrators or the Labor Arbiter in the region where the movant resides, in case of the absence or incapacity of the voluntary arbitrator or panel of voluntary arbitrators for any reason, may issue a writ of execution requiring the sheriff of the Commission or regular Courts or any public official whom the parties may designate in the submission agreement to execute the final decision, order or award.

conclusive becomes part and parcel of the CBA. Viewed in this sense, which we are fully convinced is most consistent with the principles of collective bargaining, the subsequent or supervening facts referred to by the Solicitor General consisting of acts of none other than the respondent Minister may not be invoked to alter, modify, reform, much less abrogate, the new terms, so to speak, of the award of the arbitrator. To do otherwise would violate the prescription of the Constitution against impairment of the obligation of contracts. We hold that regardless of any law anterior or posterior to the Arbitrators award, the collective bargaining agreement in this case has been correspondingly amended in a manner that is unalterable, immovable and immutable like the rock of Gibraltar, during the lifetime of the said collective bargaining agreement. (Citibank Employees Union v. MOLE, 1980) Finality and Execution of Awards
Art. 262-A: Award or decision of the voluntary arbitrator shall be final and executory after 10 days from receipt of the copy of the award or decision by the parties.

Petitioner-companys objection to the authority of the Voluntary Arbiter to direct the commutation of the unenjoyed portion of the sick leave with pay benefits of intermittent workers in his decision is misplaced. Article 261 of the Labor Code is clear. The questioned directive of the herein public respondent is the necessary consequence of the exercise of his arbitral power as Voluntary Arbitrator under Article 261 of the Labor Code to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement. We, therefore, find that no grave abuse of discretion was committed by public respondent in issuing the award (decision). Moreover, his interpretation of Sections 1 and 3, Article VIII of the 1989 CBA cannot be faulted with and is absolutely correct. (Davao Integrated v. Abarquez, 1993)

The award of the arbitrator in this case is not to be equated with a judicial decision. In effect, when in relation to a controversy as to working conditions, which necessarily include the amount of wages, allowances, bonuses, overtime pay, holiday pay, etc., the parties submit their differences to arbitration, they do not seek any judicial pronouncement technically as such: They are merely asking the arbitrator to fix for them what would be the fair and just condition or term regarding the matter in dispute that should govern further collective bargaining relations between them. Stated differently, the arbitrators award when stipulated by the parties to be

When the parties submitted their grievances to arbitration, they expressly agreed that the decision of the Voluntary Arbitrator would be final, executory, and unappealable. In fact, even without this stipulation, the first decision had already become so by virtue of Article 263 of the Labor Code making voluntary arbitration awards or decisions final and executory. (Imperial Textile Miles, etc. Calica, 1992) In the case of The Consolidated Bank & Trust Corporation (SOLIDBANK) v. Bureau of Labor Relations, et. al., the Court held that the Voluntary Arbitrator lost jurisdiction over the case submitted to him the moment he rendered his decision. Therefore, he could no longer entertain a motion for reconsideration of the decision for its reversal or modification. Thus by modifying the original award, respondent arbitrator exceeded his authority as such, a fact he was well aware of, as shown by his previous Resolution of Inhibition

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wherein he refused to act on the Unions motion for reconsideration of the award or decision. It is a hornbook rule that once a judgment has become final and executory, it may no longer be modified in any respect, even if the modification is meant to be an erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be made by the court rendering it or by the highest court of the land, as what remains to be done is the purely ministerial enforcement or execution of the judgment. The doctrine of finality of judgment is grounded on fundamental considerations of public policy and sound practice that at the risk of occasional errors, the judgment of adjudicating bodies must become final and executory on some definite date fixed by law. In the more recent case of DBP v. NLRC, the Supreme Court reiterated that the doctrine of immutability of final judgment is adhered to by necessity notwithstanding occasional errors that may result thereby, since litigations must somehow come to an end for otherwise, it would be even more intolerable than the wrong and injustice it is designed to correct. Rule VII, Section 1 of the Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings provides the key. Therein, what constitutes the voluntary arbitrators decision (and, by extension, that of the Panel of voluntary arbitrators) is defined with precision, to wit: Sec. 1. Decision Award The final arbitral disposition of issue/s submitted to voluntary arbitration is the decision. The disposition may take the form of a dismissal of a claim or grant of specific remedy, either by way of prohibition of particular acts or specific performance of particular acts. In the latter case the decision is called an Award. In herein case, the Decision of the Panel was in the form of a dismissal of petitioners complaint. Naturally, this dismissal was contained in the main decision and not in the dissenting opinion. Thus, under Section 6, Ruule VI of the same guidelines implementing Article 262-A of the Labor Code, this Decision, as a matter of course, would become final and executory after ten (10) calendar days from receipt of copies of the decision by the parties even without receipt of the dissenting opinion unless, in the meantime, a motion for reconsideration or a petition for review to the Court of Appeals under Rule 43 of the Rules of Court is filed within the same 10-day period. (Coca-Cola v. Coca-Cola, 2005) Appeal The Jurisdiction conferred by law on a voluntary arbitrator or a panel of such arbitrators is quite limited compared to the original jurisdiction of the labor arbiter and the appellate jurisdiction of the NLRC for that matter. The state of our present law relating to voluntary arbitration provides that the award or decision of the Voluntary Arbitrator xxx shall be final and executory after ten (10) calendar days from receipt of the copy of the award or ecision by the parties, while the decision, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decision, awards or orders. Hence, while there is an express mode of appeal from the decision of a labor arbiter, RA 6715 is silent with respect to an appeal from the decision of a voluntary arbitrator. (Luzon Development Bank v. Association of Luzon Development Employees, 1995) Assuming arguendo that the voluntary arbitrator or the panel of voluntary arbitrators may not strictly be considered as a quasi-judicial agency, board or commission, still both he and the panel are comprehended within the concept of a quasi-judicial instrumentality. A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should likewise be appealable to the Court of Appeals, in line with the procedure outlined in Revised Administrative Circular No. 195, just like those of the quasi-judicial agencies, boards and commissions enumerated therein. This would be in furtherance of, and consistent with, the original purpose of Circular No. 1-91 to provide a uniform procedure for the appellate review of adjudications of all quasi-judicial entities 18 not expressly

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excepted from the coverage of Sec. 9 of BP 129 by either the Constitution or another statute. In effect, this equates the award or decision of the voluntary arbitrator with that of the regional trial court. Consequently, in a petition for certiorari from that award or decision, the Court of Appeals must be deemed to have concurrent jurisdiction with the Supreme Court. As a matter of policy, this Court shall henceforth remand to the Court of Appeals petitions of this nature for proper disposition. Costs
Art. 262-B. Cost of Voluntary Arbitration and Voluntary Arbitrators fee The parties to a Collective Bargaining Agreement shall provide therein a proportionate sharing scheme on the cost of the voluntary arbitration including the Voluntary Arbitrators fee. The fixing of the fee of the Voluntary Arbitrators, whether shouldered wholyy by the parties or subsidized by the special voluntary arbitration fund, shall take into account the following factors: Nature of the case Time consumed in hearing the case Professional Standing of the Voluntary Arbitrator Capacity to Pay of the Parties

GMCs failure to make a timely reply to the proposals presented by the union is indicative of its utter lack of interest in bargaining with the union. Its excuse that it felt the union no longer represented the workers, was mainly dilatory as it turned out to be utterly baseless. We hold that GMCs refusal to make a counter-proposal to the unions proposal for CBA negotiation 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. Failing to comply with the mandatory obligation to submit a reply to the unions proposals, GMC violated its duty to bargain collectively, making it liable for unfair labor practice. Perforce, the Court of Appeals did not commit grave abuse of discretion amounting to lack or excess of jurisdiction in finding that GMC is, under the circumstances, guilty of unfair labor practice. (General Milling Corp. v. CA, 2004)

No Strike-No Lockout Clause A no strike, no lock-out provision in the CBA is a valid stipulation although the clause may be invoked by an employer only when the strike is economic in nature or one which is conducted to force wage or other concessions from the employer that are not mandated to be granted by the law itself. It would be inapplicable to prevent a strike which is grounded on unfair labor practice. (Panay Electric Co. v. NLRC, 1995; Malayang Samahan ng mga Manggagawa sa Greenfield v. Ramos, 2000) The stipulation is VALID but not absolute.

(b) Refusal to bargain


Of employers Art. 248 (g) To violate the duty to bargain collectively as prescribed by this Code; Of labor organizations Art. 249 (c) To violate the duty, or refuse to bargain collectively with the employer, provided it is the representative of the employees; Art. 251. Duty to bargain collectively in the absence of collective bargaining agreements. In the absence of an agreement or other voluntary arrangement providing for a more expeditious manner of collective bargaining, it shall be the duty of employer and the representatives of the employees to bargain collectively in accordance with the provisions of this Code. Art. 252. Meaning of duty to bargain collectively. The duty to bargain collectively means the performance of a mutual obligation To meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect To wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreements if requested by either party but

Labor Management Council ULP in Collective Bargaining (a) Bargaining in bad faith

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such duty does not compel any party to agree to a proposal or to make any concession. Art. 250. Procedure in collective bargaining. The following procedures shall be observed in collective bargaining: When a party desires to negotiate an agreement, it shall serve a written notice upon the other party with a statement of its proposals. The other party shall make a reply thereto not later than ten (10) calendar days fro receipt of such notice; Should differences arise on the basis of such notice and reply, either party may request for a conference which shall begin not later than ten (10) calendar days from the date of request. If the dispute is not settled, the Board shall intervene upon request of either or both parties or at its own initiative and immediately call the parties to conciliation meetings. The Board shall have the power to issue subpoenas requiring the attendance of the parties to such meetings. It shall be the duty of the parties to participate fully and promptly in the conciliation meetings the Board may call; During the conciliation proceedings in the Board, the parties are prohibited from doing any act which may disrupt or impede the early settlement of the disputes; and The Board shall exert all efforts to settle disputes amicably and encourage the parties to submit their case to a voluntary arbitrator.

the union. In explaining its failure to reply, the school merely offered a feeble excuse that its Board of Trustees had not yet convened to discuss the matter. Clearly, its actuation showed a lack of sincere desire to negotiate. (Colegio de San Juan de Letran v. Association, 2000) (c) Individual bargaining It is an unfair labor practice for an employer operating under a CBA to negotiate with his employees individually. That constitute interference because the company is still under obligation to bargain with the union as the bargaining representative. (The Insukar Life Assurance Co. Ltd. Employees Assn. v. Insular Life Assurance Co. Ltd, 1971)

(d) Blue sky bargaining Sky high economic demands or making exaggerated or unreasonable proposals are indicative of blue-sky bargaining. (Standard Chartered Bank Employees Union v. Confesor, 2004)

GMCs failure to make a timely reply to the proposals presented by the union is indicative of its utter lack of interest in bargaining with the union. Its excuse that it felt the union no longer represented the workers, was mainly dilatory as it turned out to be utterly baseless. We hold that GMCs refusal to make a counter-proposal to the unions proposal for CBA negotiation 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. Failing to comply with the mandatory obligation to submit a reply to the unions proposals, GMC violated its duty to bargain collectively, making it liable for unfair labor practice. Perforce, the Court of Appeals did not commit grave abuse of discretion amounting to lack or excess of jurisdiction in finding that GMC is, under the circumstances, guilty of unfair labor practice. (General Milling Corp. v. CA, 2004) The school is guilty of unfair labor practice when it failed to make a timely reply to the proposals of the union more than one month after the same were submitted by

(e) Surface bargaining Surface bargaining is defined as going through the motions of negotiating, without any real intent to reach an agreement. It violates the Acts requirement that parties negotiate in good faith. It is prohibited because, as one commentator explained: The bargaining status of a union can be destroyed by going through the motions of negotiating almost as easily as by bluntly withholding recognitionAs long as there are unions weak enough to be talked to death, there will be employers who are tempted to engage in the forms of collective bargaining without the substance. (K-MART Corporation v. NLRC, 1980 626 F.2d 704)

Unfair Labor Practice:


Unfair Labor Practice (ULP): Definition Art. 212 (k) Unfair labor practice any unfair labor practice as expressly defined by the Code.

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Art. 247 Unfair labor practices violate the constitutional right of workers and employees to self-organization. These are inimical to the legitimate interests of both labor and management, including their right to bargain collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect, disrupt industrial peace and hinder the promotion of healthy and stable labor-management relations. Unfair Labor Practices are not only violations of the civil rights of both labor and management but are also criminal offenses.

Purpose of the Policy against ULP Protection of right to self-organization and/or collective bargaining 1. The employee is not only protected from the employer but also from labor organization 2. Employer is also protected from ULP committed by a labor organization 3. The public is also protected because it has an interest in continuing industrial peace. Unfair labor practice refers to acts that violate the workers right to organize. The prohibited acts are related to the workers right to self-organization and to the observance of a CBA. Without that element, the acts, no matter how unfair, are not unfair labor practices. The only exception is Art. 248 (f) [i.e. to dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under this Code.] (Philcom Employees Union v. Philippine Global, 2006) Relationship

The Labor Code does not undertake the impossible task of specifying in precise and unmistakable language each incident which constitutes an unfair labor practice. Rather, it leaves to the court the work of applying the laws general prohibitory language in light of infinite combinations of event which may be charged as violative of its terms. (HSBC Employee Union v. NLRC, 1997)

ULP: Not Cured by Estoppel The eventual signing of the CBA does not operate to estop the parties from raising unfair labor practice charges against each other. (Standard Chartered Bank Union v. Confesor, 2004)

1. ULP of Employers Specific Acts a)Interference/Restraint/ Coercion


Art. 248. It shall be unlawful for an employer to commit any of the following unfair labor practice: (a)To interfere with, restrain or coerce employees in the exercise of their right to self-organization;

b)Non-union Membership or Withdrawal from Membership as Condition of Employment


Art. 248 (b). To require as a condition of employment that a person or an employee shall not join a labor organization or shall withdraw from one to which he belongs; This particular provision signifies what is known as a yellow dog contract. A typical yellow dog contract embodies the following stipulations: A representative by the employee that he is not a member of a labor organization A promise by the employee that he will not join a union A promise by the employee that upon joining a labor organization, he will quit his employment.

ULP: Employer-Employee Required

An unfair labor practice may be committed only within the context of an employeremployee relationship (American President Lines v. Clave, 1982) Exception: Yellow Dog Condition: To require as a condition of employment that a person or an employee shall not join a labor organization or shall withdraw from one to which he belongs. (Art 248 [b])

c)Company Dominated Union


Art 248 (d). To initiate, dominate, assist or otherwise interfere with the formation, function or administration of any labor organization, including the giving of financial or other support to it or its organizers or supporters; Art. 212 (i) Company union means any labor organization whose formation, function or administration has been assisted by any act defined as unfair labor practice by this Code.

ULP: Statutory Construction

d) Discrimination Encourage/Discourage Unionism

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Art. 248 (e) GENERAL RULE: It shall be unlawful to discriminate in regard to wages, hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. EXCEPTION: Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment. EXCEPTION TO THE EXCEPTION: Those employees who are already members of another union at the time of the signing of the collective bargaining agreement. Different kinds of (Azucena, 2010) Union Security Clause

Employees of an appropriate bargaining unit who are not members of the recognized collective bargaining agent may be assessed a reasonable fee equivalent to the dues and other fees paid by members of the recognized collective bargaining agent, if such non-union members accept the benefits under the collective bargaining agreement: Provided, that the individual authorization required under Article 242, paragraph (o) of this Code shall not apply to the non-members of the recognized collective bargaining agent; UNION SECURITY CLAUSE is a stipulation in the CBA whereby the management recognizes that the membership of employees in the union which negotiated the said agreement should be maintained and continued as a condition for employment or retention of employment. Its purpose is to safeguard and ensure the continued existence of the union. CLOSED-SHOP 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 which the employees in interests are part of. (Del Monte v. Saldivar, 2007)

1. Closed shop agreement Only union members can be hired by the company and they must remain as members to retain employment in the company. 2. Union shop agreement Non-members may be hired, but to retain employment must become union members after a certain period. The requirement applies to present and future employees. 3. Agency shop agreement an agreement whereby employees must either join the union or pay to the union as exclusive bargaining agent a sum equal to that paid by the members; 4. Maintenance of membership agreement no employee is compelled to join the union, but all present or future must, as a condition of employment, remain in good standing in the union. 5. Modified union shop agreement employees who are not union members at the time of signing the contract need not join the union, but all hired workers thereafter must join. Under the Labor Code, a dismissal may only be effected for any just or authorized causes as provided by the said law. A dismissal based on a union security clause of company CBA is not enumerated as one of the just or authorized causes in the Labor Code. But jurisprudence recognized that it is a State policy to promote unionism to enable workers to negotiate with management on an even level playing field and with more persuasiveness than if they were individually and separately bargain with the employer. For this reason, the law has allowed stipulations for union shop and closed shop as a means of encouraging workers to join and support the union of their choice in the protection of their rights and interests vis--vis the employer. Even though the law recognizes union shop agreement as valid, yet it cannot be used as a means to guarantee to the union an unmitigated discretion in terminating the employment status on an employee-member. Therefore, the requirements laid down by the law in determining whether or not an employee was validly terminated must still be

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followed even if it is based on a closedshop provision of a CBA, i.e. the substantive as well as the procedural due process requirements. (Del Monte v. Saldivar, 2007) e)Retaliation for Testimony against Employer
Art. 248 (f) To dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under this Code;

organization, ULP is committed. The subjection by the company of union to nullification and its participation in soliciting membership for a completing union is also ULP act. (Philippine Steam Navigation Co. v. Philippine Marine Officers Guild, 1965) Speech Indeed, it is an unfair labor practice for an employer operating under a collective bargaining agreement to negotiate or to attempt to negotiate with his employees individually in connection with changes in the agreement. And the basis of the prohibition regarding individual bargaining with the strikers is that although the union is on strike, the employer is still under obligation to bargain with the union as the employees bargaining representative. This is tantamount to an illegal act of interference. The sending of letter containing promises of benefits to the individual employees in order to entice them to return to work is not protected by the free speech provision of the Constitution. The same is true with letters containing threats to obtain replacements for the striking employees in the event they do not report to work on a certain date. The free speech protection under the Constitution is inapplicable where the expression of opinion by the employer or his agent contains promise of benefits, threats or reprisals. (Insular Life Assurance Co. Employees Association v. Insular Life Assurance Co. Ltd., 1971)

f)Exaction-Featherbedding (ULP of Organizations. See next sub topic)

Labor

g)Contracting out to discourage unionism


Art 248 (c) To contract out services or functions being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their rights to selforganization; The act of an employer in having certain services or functions being performed by union members contracted out is NOT per se an unfair labor practice act. It is only when the contracting out of the services or functions being performed by union members will interfere with, restrain or coerce employees in the exercise of their right to self-organization that it shall be unlawful and shall constitute ULP act. (Sec . 6 (f) DOLE Department Order No. 18-02, Series of 2002)

Interrogation Questioning of employees concerning union membership and activities and disparaging remarks by supervisory employees made in such a way as to hamper the exercise of free choice on the part of the employees, have been uniformly condemned as an unfair labor practice. (Scotys Department Store v. Micaller, 1956) An employer is not denied the privilege of interrogating its employees as to their union affiliation, provided the same is for a legitimate purpose and assurance is given by the employer that no reprisals would be taken against unionists. Nonetheless, any employer who engages in interrogation does so with notice that he risks a finding of unfair labor practice if the circumstances are such that his interrogation restrains or interfere with employees in the exercise of their rights to self-organization. When the interrogation and investigation by the companys supervisory officials of the employees in such a way that it hampers the exercise of their right to self-

Espionage As regards espionage, it is said that picketing is inherently explosive. As pointed out by one author, The picket line is an explosive front, charged with the emotions and fierce loyalties of the unionmanagement dispute. It is marked by colorful name-calling, intimidating threats or sporadic fights between the pickets and those who pass the line. It has been held in a great number of decisions that espionage by the employer of union

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activities, or surveillance thereof, are such instances of interferences, restraint or coercion of employees in connection with their right to organize, form and join unions as to constitute unfair labor practice. Nothing is more calculated to interfere with, restrain, or coerce employees in the exercise of their right to self-organization than such activity even where no discharge results. The information obtained by means of espionage is invaluable to the employer and can be used in a variety of cases to break a union. The unfair labor practice is committed whether espionage is carried on by a professional labor spy or detective, by officals or supervisory employees of the employer, or by fellow employees acting at the request or direction of the employer or an ex-employee. (Insular Life Assurance Company Employees Association v. Insular Life Assurance Company Ltd., 1971) h)Violate duty to bargain or the bargaining agreement
Art. 248 (h) To pay negotiation or attorneys fees to the union or its officers or agents as part of the settlement of any issue in collective bargaining or any other dispute;

b) Discrimination Encourage/Discourage Unionism


Art. 249 (b) To cause or attempt to cause an employer to discriminate against an employee, including discrimination against an employee with respect to whom membership in such organization has been denied or to terminate an employee on any ground other than the usual terms and conditions under which membership or continuation of membership is made available to other members;

UNION SECURITY CLAUSE is a stipulation in the CBA whereby the management recognizes that the membership of employees in the union which negotiated the said agreement should be maintained and continued as a condition for employment or retention of employment. Its purpose is to safeguard and ensure the continued existence of the union.

c)Exaction-Featherbedding
Art. 249 (d) To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other things of value, in the nature of an exaction, for services which are not performed or not to be performed, including the demand for fee for union negotiations.

d)VIOLATE DUTY to bargain or the CBA


Art. 249 (c) To violate the duty, or refuse to bargain collectively with the employer, provided it is the representative of the employees; (f) To violate a collective bargaining agreement

2. ULP of Labor Organizations a)Interference/Restraint/Coercion


Art. 249. Unfair Labor Practices of Labor Organizations. It shall be unfair labor practice for a labor organization, its officers, agents or representatives: To restrain or coerce employees in the exercise of their right to self-organization. However, a labor organization shall have the right to prescribe its own rules with respect to the acquisition or retention of membership; Art. 248 (a) interfere, restraint, coerce Art. 249 (a) restraint, coerce

e)PAY Negotiation/Attys disputes

Fees

to

settle

Art. 249 (e) To ask for or accept negotiation or attorneys fees from employers as part of the settlement of any issue in collective bargaining or any other dispute;

3. Right to Peaceful Concerted Activities: Basis Constitution Art. XIII. Sec. 3. The state shall guarantee the rights of all workers to: 1. self-organization 2. collective bargaining and negotiations, and 3. peaceful concerted activities, 4. including the right to strike in accordance with law. Statutory Art. 263 1. Workers shall have the right to engage in concerted activities:

Interfere not included in Art. 249 because any act of a labor organization amount to interference to a right to selforganization Arts. 248 (a) and 249 (a) are the general grant of protection. All other cases of ULP enumerated under the said provisions are derivative of Arts. 248 (a) and 249 (a).

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For purposes of collective bargaining; or b. For their mutual benefit and protection. 2. The right of legitimate labor organizations to strike and picket and of employers to lockout, consistent with the national interest, shall continue to be recognized and respected 3. However, no labor union may strike and no employer may declare a lockout on grounds involving inter-union and intraunion disputes. Art. 246. It shall be unlawful for any person to: 1. Restrain 2. Coerce 3. Discrimination Against or Unduly Interfere with Employees and Workers in their Exercise of the Right to Self-Organization Right to self-organization shall include the right to: 1. form 2. join, or 3. assist labor organizations i. for the purpose of collective bargaining ii. through representatives of their own choosing, and 4. to engage in lawful concerted activities for the same purpose for their mutual aid and protection. Right to Engage in Concerted Activities: Limitations The strike is a powerful weapon of the working class. Precisely because of this, it must be handled carefully, like a sensitive explosive, lest it blow up in the workers own hands. Thus, it must be declared onlt after the most thoughtful consultation among them, conducted in the only way allowed, that is, peacefully, and in every case conformably to reasonable regulation. Any violation of the legal requirements and strictures will render the strike illegal, to the detriment of the very workers it is supposed to protect. (Batangas Laguna Tayabas Bus Co. v. NLRC, 1992) a. 1. Strike International Covenant: on Economic, Social and Cultural Rights. ART. 8: The States Parties to the present Covenant undertake to ensure: (d) The right to strike, provided that it is exercised in conformity with the laws of the particular country. Definition Art. 212 (o) Strike: Any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. 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. (Samahang Manggagawa v. Sulpicio Lines, 2004) The right to strike is a constitutional and legal right of the workers as employers have the right to lockout, all within the context of labor relations and collective bargaining. Subject to the enactment by Congress of amendments or a new law on labor relations, the provisions of existing laws shall govern the exercise of those rights.

Strike: A Coercive Measure A strike is a coercive measure resorted to by laborers to enforce their demands. The idea behind a strike is that a company engaged in a profitable business cannot afford to have its production or activities interrupted, much less, paralyzed. (Philippine Can Co v. CIR, 1950) 2. Who may declare a strike or lockout?
Book V, Rule XXII, Sec. 6 1. Certified or duly recognized bargaining representative 2. Employer 3. In the absence of certified or duly recognized bargaining representative, any legitimate labor organization in the establishment, but only grounds of ULP.

3. Requisites for a valid strike Strike: Procedural requirements

1. Forms of Concerted Activities

The procedural requirements are mandatory. Failure to comply with the following requirements makes the strike illegal. Consequently, the officers of the union who participated therein are deemed to have lost their employment.

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a) Effort to bargain
Art 264 (a): 1) No labor organization or employer shall declare a strike or lockout without first having bargained collectively in accordance with Title VII of this Book.. If conciliation/mediation fails, the parties shall be encouraged to submit their dispute for voluntary arbitration.

b) Filling of notice of intention to strike


Art 264 (c), (d): 1) In case of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or the employer may file a notice of lockout with the department at least 30 days before the intended date thereof. 2) In case of unfair labor practice, the period of notice shall be 15 days 3) In the absence of a duly certified of duly certified or recognized bargaining agent, the notice of strike may be filed by any legitimate labor organization in behalf of its members 4) The notice must be in accordance with such implementing rules and regulations as the Secretary may promulgate.

The procedural requirements are mandatory, meaning, non-compliance therewith makes the strike illegal. The evident intention of the law in requiring the strike notice and strike-vote report is to reasonably regulate the right to strike. (Stamford Marketing Corp v. Julian, 2004) Aside from the mandatory notices embedded in Art. 263, paragraphs (c) and (f) of the Labor Code, 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 NCMD would be unable to supervise the holding of the same, if and when it decided to exercise its power of supervision. The requirement of giving notice of the conduct of a strike vote to the NCMD 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 tine 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 (Capitol Medical Center, Inc, v. NLRC, 2005) (c) Observance of cooling-off periods

Book V Rule XXII Sec.8: Contents of notice (3NS) 1) Names and addresses of the employer and the union involved 2) Nature of the industry to which the employer belongs 3) Number of union members and of workers in the bargaining unit. 4) Such other relevant data as may facilitate the settlement of the dispute. Additional Requirements In case of bargaining deadlocks:(UPCP) 1) Statement of unresolved issues in the bargaining negotiations 2) Written Proposals of the union 3) Counterproposals of the employer 4) Proof of a request for conference to settle the differences. In case of ULP: 1) Statement of Acts complained of 2) Efforts taken to resolve the dispute amicably. In case the notice does not conform with the requirements, the regional branch of he NMCB shall inform the concerned party of such fact. Book V Rule XXII Sec.9 Action on Notice: Upon receipt of a valid notice of strike or lockout, the NCM, through its conciliator-Mediators, shall call the parties to a conference the soonest possible time in order to actively assist them to explore all possibilities for amicable settlement. The Conciliator- Mediator may suggest/offer proposal as an alternative avenue for the resolution of their disagreement/conflict which may not necessarily bind the parties.

Art. 263 (c), (e): 1) In case of dismissal from employment of union officers duly elected in accordance with the union constitution and by-laws, which may constitute union busting, where the existence of the union is threatened, the 15-day cooling-off period shall not apply and the union may take action immediately. 2) During the cooling-off period, it shall be the duty of the Ministry to exert efforts at mediation and conciliation to effect a voluntary settlement. Should the dispute remain unsettled until the lapse of the requisite number of days from the mandatory filing of the notice, the labor union may strike or the employer may declare a lockout.

The purpose of the cooling-off period is to provide an opportunity for mediation and conciliation. The waiting period, on the other hand, is intended to provide opportunity for the members of the union

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or the management to take the appropriate remedy in case the strike of lockout vote report is false or inaccurate. The observance of both periods must be complied with, although a labor union may take a strike vote and report the same within the statutory cooling-off period. The cooling-off and 7-day strike ban provisions of law constitute a valid exercise of police power of the State. (National Federation of Sugar Workers vs. Ovejera, 1982) The 7-day strike ban is a distinct and separate requirement from the cooling-off period prescribed by law. The latter cannot be substituted for the former. Both periods are mandatory. (Gold City Integrated Port Service, Inc. vs. NLRC, 1995) The language of the law leaves no room for doubt that the cooling-off period and the seven-day strike ban after the strike-vote report were intended to be mandatory and in case of union busting where the existence of the union is threatened, it is only the 15-day cooling-off period that may be dispensed with. (Sukhothai Cuisine & Restaurant v CA, 2006) d) Strike vote
Art. 263 (f): A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit concerned, obtained by secret ballot in meetings or referenda called for that purpose. A decision to declare a lockout must be approved by a majority of the board of directors of the corporation or association or of the partners in a partnership, obtained by secret ballot in a meeting called for that purpose. The decision shall be valid for the duration of the dispute based on substantially the same grounds considered when the strike or lockout vote was taken. The department may, at it own initiative or upon the request of any affected party, supervise the conduct of the secret balloting. In every case, the union or the employers shall furnish the Department the result of the voting at least 7 days before the intended strike or lockout, subject to the cooling-off period herein provided.

Query: If the strike vote was reported within the cooling-off period, how should the 7-day period be computed? There are at least 2 interpretations: 1) The cooling-off period and the 7-day period are mutually exclusive. Thus, in the case of Capitol Medical Center v. NLRC, the Court held that when the strike vote is conducted within the cooling-off period, the 7-day requirement shall be counted from the day following the expiration of the cooling off period. 2) The cooling-off period and the 7-day requirement may coexist. After all, the purpose of the 7-day requirement is to give time for the DOLE to verify if the projected strike is supported by the majority. There is no reason to add it to the cooling-off period.

Strike: Test of Legality Legal strike Purpose and Means Test There must be concurrence between the validity of the purpose of the strike and the means of conducting it. A strike is a legitimate weapon in the universal struggle for existence. It is considered as the most effective weapon in protecting the rights of the employees to improve the terms and conditions of their employment. But to be valid, a strike 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. Among such limits are the prohibited activities under Art. 264, particularly paragraph (e), which states that no person engaged in picketing shall: commit any act of violence, coercion, or intimidation or obstruct the free ingress to or ingress from the employers premises for lawful purpose or obstruct public thoroughfares. (Association of Independent unions in the Philippines (AIUP), et. Al. v NLCR, 1999) Even if the strike is valid because its objective or purpose is lawful, the strike may still be declared invalid where the means employed are illegal. (Phil. Diamond Hotel and Resort, Inc. v. Manila Diamond Hotel Employees Union, 2006)

e) Strike Vote Report The result of the strike or lockout voting should be reported to the NCMB at least 7 days before the intended strike or lockout. The seven-day period is intended to give the DOLE an opportunity to verify whether the projected strike has the approval of the majority of the union members.

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Acts of violence in this jurisdiction, when committed in carrying on a strike are not to be overlooked in determining its legality or illegality. To overlook these acts of violence would encourage abuses and terrorism and subvert the purpose of the law which provides for arbitration and peaceful settlement of disputes. If a strike is unjustified as when it is declared for trivial, unjust or unreasonable purpose, the employer may not be compelled to reinstate the strikers to their employment. More so, when the strike is carried on illegally. (Philippine Marine Officers Guild v. Cia. Martima, 1968) Guidelines and Balancing of Interest 1. A strike otherwise valid, if violent in character, may be placed beyond the pale. 2. Care is to be taken especially where an unfair labor practice is involved, to avoid stamping it with illegality just because it is tainted by such acts. To avoid rending illusory the recognition of the right to strike, responsibility in such a case should be individual and not collective. 3. A different conclusion would be called for if the existence of force while the strike lasts is pervasive and widespread, consistently and deliberately resorted to as a matter of policy. It could be reasonably concluded then that even if justified as to ends, it becomes illegal because of the means employed. 4. This is not by any means to condone the utilization of force by labor to attain its objectives. It is only to show awareness that in labor conflicts, the tension that fills the air as well as the feeling of frustration and bitterness could break out in sporadic acts violence. 5. If there be in this case a weighing of interests in the balance, the ban the law impose on unfair labor practices by management that could provoke a strike and its requirement that it be conducted peaceably, it would be, to repeat, unjustified, considering all the facts disclosed, to stamp the strike with illegality. It is enough that individual liability be incurred by those guilty of such acts of violence that call for loss of employee status. Such an approach is reflected in our decisions. (Shell Oil Workers Union v. Shell Co. of the Phils, 1971) Defense: Good faith-Strike GENERAL RULE: A strike based on non-strikeable grounds is illegal EXCEPTION: Where employees believe in good faith that ULP acts exist so as to constitute a valid ground strike Although rejecting the argument that PNOC and it subsidiaries were guilty of discrimination, the NLRC reiterated the policy enunciated in several labor cases that a strike does not automatically carry the stigma of illegality even if no unfair labor practice were committed by the employer. It suffices if such a belief in good faith is entertained by labor as the inducing factor for staging a strike, The presumption of legality prevails even it the allegation of unfair labor practice is subsequently found to be untrue, provided that the union and its members believed in good faith in the truth of such averment. (PNOC Dockyard v. NLRC, 1998) In the instant case, petitioners believed in good faith that dismissing them upon request by the federation, respondent company was guilty of unfair labor practice in that it violated the petitioners right to self-organization. The strike was staged to protest respondent companys act of dismissing the union officers. Even if the allegations of unfair labor practice are subsequently found out to be untrue, the presumption of legality of the strike prevails. (Malayang Samahan ng mga Manggagawa sa Greenfield v. Ramos,2000) Caveat: Good Faith-Strike requires Rational Basis A mere claim of good faith would not justify the holding of a strike under the aforesaid exception as, in addition thereto, the circumstances must have warranted such belief. It is, therefore, not enough that the union believed that the employer committed acts of ULP when the circumstances clearly negate even a prima facie showing to sustain such belief. (Interwood Employees Assoc. V. Intl Hardwood, 1956) Caveat: Good Faith-Strike requires compliance with procedural Requirements Even if the union acted in good faith in the belief that the company was committing an unfair labor practice, if no notice of strike and strike vote were conducted, the said strike is illegal. (First City Interlink Transportation v. Roldan-Confesor) Employer Lockout

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Lockout: Definition
Art. 212(p). Lockout: the temporary refusal of an employer to furnish work as a result of an industrial or labor dispute. 1) No labor organization or employer shall declare a strike or lockout without first having bargained collectively in accordance with Title VII of this Book

Lockout: Grounds
Art 263 (c): Strikes, picketing and lockouts Bargaining Deadlocks : In case of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strikes or the employer may file a notice of lockout with the Department at least 30 days before the intended date thereof ULP: a) In cases of unfair labor practice, the period of notice shall be 15 days b) In the absence of a duly certified or recognized bargaining agent, the notice strike may be filed by any legitimate labor organization in behalf of its members. c) In case of dismissal from employment of union officers duly elected in accordance with the union constitution and by-laws, which me constitute union busting, where the existence of the union is threatened, the 15-day cooling-off period shall not apply and the union may take action immediately.

b) Filing of notice intention


Art. 263 (c), (d): 1) In case of bargaining deadlocks, the duly certified or recognized bargaining agent may file a notice of strike or the employer may file a notice of lockout with the Department at least 30 days before the intended date hereof. 2) In case of unfair labor practice, the period of notice shall be 15 days. 3) In the absence of a duly certified or recognized bargaining agent, the notice of strike may be filed by any legitimate labor organization in behalf of its members. 4) The notice must be in accordance with such implementing rules and regulations as the Secretary may promulgate. Book V Rule XXII Sec. 8: Contents of Notice (3NS) 1. Names and addresses of the employer and the union involved 2. Nature of the industry to which the employer belongs 3. Number of union members and of workers in the bargaining unit 4. Such other relevant data as may facilitate the settlement of the dispute. Additional Requirements In cases of bargaining deadlocks: (UPCP) 1. Statement of Unresolved issues in the bargaining negotiations 2. Written Proposal of the union 3. Counterproposals of the employer 4. Proof of a request for conference to settle the differences. In cases of ULP: 1. Statement of Acts complained of 2. Efforts taken to resolve the dispute amicably. In case the notice the notice does not conform with the requirements, the regional branch of the NMCB shall inform the concerned party of such fact.

Lockout: Prohibitions
Art. 263 (b), last sentence: No Labor union may strike and no employer may declare a lockout on grounds involving inter-union and intra-union disputes.

Art. 264 (a):


1) No labor organization or employer shall declare a strike or lockout without first having: a) Bargained collectively in accordance with Title VII of this Book, or b) Filed the notice required in the preceding Article or without the necessary strike or lockout vote first having been obtained and reported to the Department. 2) No strike or lockout shall be declared after assumption of jurisdiction by the President or the Secretary or after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for the strike or lockout. 3) Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: PROVIDED, that mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike.

Book V Rule XXVII Sec. 9 Action on Notice Upon receipt of a valid notice of strike or lockout, the NCMB, through its Conciliator-Mediators, shall call the parties to a conference the soonest possible time in order to actively assist them to explore all possibilities for amicable settlement. The Conciliator-Mediator may suggest/offer proposals as an alternative avenue for the solution of their disagreement/conflict which may not necessarily bind the parties. If conciliation/mediation fails, the parties shall be encouraged to submit their disputes for voluntary arbitration.

4. Requisites for a valid lockout Lockout: Procedural Requirements a) Effort to bargain


Art. 264 (a):

Effect of Illegal Lockout


Art. 264 (a), par. 3, 1 st sentence Any worker whose employment has been terminated as a consequence of any unlawful lockout shall be entitled to reinstatement with full backwages.

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question, was included. It was due to a former official of plaintiff appellants bank who thereafter named as President of the Philippine National Bank. Should there be an automatic attitude of condemnation for such incident? If the realistic observation of Justice Frankfurter in Milk Wagon Drivers Union of Chicago v. Meadowmoor Dairies be heeded that labor disputes give rise to strong response, then the decision reached by the lower court becomes even more acceptable. It is a fact of industrial life, both in the Philippines as in the United States, that in the continuing confrontation between labor and management, it is far from likely that the language employed would be, both courteous and polite. Such being the case, there is no affront either to reason or to the law in the complaint for libel being dismissed. In placing reliance on the constitutional right of freedom of expression, this Court once again makes manifest its adherence to the principle first announced by Justice Malcolm as ponente in the leading case of United States v. Bustos. In no uncertain terms, it made clear that the judiciary, in deciding suits for libel, must ascertain whether or not the alleged offending words may be embraced by the guarantees of free speech and free press. It cannot be too often said that Bustos was promulgated as far back as March 8, 1918. (PCIB V. Philnabank Employees, 1981) Curtailment Peaceful picketing cannot be restrained because the same is part of the freedom of speech. However, petitioner fails to realize that the questioned July 16, 1965 order of the Court of Industrial Relations did not refer to peaceful picketing. In Mortera (supra), where the therein questioned order partly declared that picketing under any guise and form is hereby prohibited, this Court ruled that the order of the Court of Industrial Relations prohibiting picketing must be understood to refer only to illegal picketing, that is, picketing through the use of illegal means. In this case, the questioned restraining order should also be taken as limited to the lifting of the lines which constituted illegal picketing especially so because it expressly stated that the petitioner union and its officers, agents or sympathizers are hereby directed to call off the strike declared on July 17,1965, and to lift the picket lines established in and around the premises of respondent companys various offices and installation xxx The persons manning the picket lines in these places are hereby enjoined from impeding and interfering with implementation of this Order as well as from interfering in any manner with the operations of respondent. (Free Telephone Workers Union v. PLDT Co., 1982)

Picketing: Picketing: Definition


NCMB Manual of Procedure for Conciliation and Preventive Mediation Cases. Sec. 1: Definition of Terms Picketing the right of workers to peacefully march to and fro before an establishment involved in a labor dispute generally accompanied by the carrying and display of signs, placards and banners intended to inform the public about the dispute.

Picketing: Limitations Picketing, like other freedom of expression in general, have limits. To the extent it is an instrument of coercion rather than of persuasion, it cannot rightfully be entitled to the protection associated with free speech. Equally so, there can be no indiscriminate ban on the freedom to disseminate the facts of a labor dispute and to appeal for public sympathy, which is the aim of peaceful picketing, without a transgression of the Constitution, sufficient to oust a court of jurisdiction, even on the assumption that it was originally possessed of such a competence. (Security Bank Employees Union v. Security Bank and Trust Co.,1968) Picketing and libel laws There is a unique aspect to this action for libel against the Philippine National Employees Association. It was filed by plaintiff PCIB as a result of placards and signboards along the PNB building in Escolta, Manila, containing the following: PCIB BAD ACCOUNTS TRANSFERRED TO PNB-NIDC? There was a labor controversy resulting in a strike, fortunately lasting only for one day. The labor union made use of its constitutional right to picket. From the time of Mortera vs. CIR, a 1947 decision this Court has been committed to the view that peaceful picketing is part of the freedom of speech guarantee of the Constitution. The latest case in point where such a principle was reaffirmed expressly is Associated Labor Union v. Gomez, a 1980 decision. There is no mention of the other placards but it is not unlikely that to bolster its claim, mention was likewise made and in bold letters at that of such alleged failing of its management. That was the aim and intent as found by the lower court. That could not very well be disputed by plaintiff-appellant. Unfortunately, the offending imputation, but in the form of a

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5. Requisites for lawful picketing Regulation/restrictions, innocent third party rule and liabilities While peaceful picketing is entitled to protection as an exercise of free speech, the courts are not without power to confine or localize the sphere of communication or the demonstration to the parties of the labor dispute, including those with related interest and to insulate establishments or persons with no industrial connection or having interest foreign to the context of the dispute. Liwayway Publishing Co. v. Permanent Concrete Workers Union (1981): Thus, the right may be regulated at the instance of third parties or innocent bystanders if: 1) it appears that the inevitable result of its exercise is to create an impression that a labor dispute with which they have no connection or interest exists between them, and 2) the picketing union or constitute an invasion of their rights. Regulation: Rationale Mere innocent bystanders are entitled to seek protection of their rights from the courts and the courts may, accordingly, legally extend the same. The picket is merely regulated to protect the rights of third parties. If the law fails to afford said protection, men will endeavor to safeguard their rights by their own might, take the law in their own hands, and commit acts which lead to breaches of the law. This should not be allowed to happen. An innocent bystanders, who seeks to enjoin a labor strike, must satisfy the court that aside from the grounds specified in Rule 58 of the Rules of Court, it is entirely different from, without any connection whatsoever to, either party to the dispute and, its interests are totally foreign to the context thereof. (MSF Tire Rubber Inc. v. CA, 1999) Absence of Employer-Employee Relationship: Effect Picketing, peacefully carried out, is not illegal even in the absence of employer-employee relationship, for peaceful picketing is a part of the freedom of speech guaranteed by the Constitution. (De Leon v. National Labor Union. 1957) Prohibited Activities
Art. 264 (b): No person shall: a) Obstruct, impede, or interfere with, by force, violence, coercion, threats or intimidation, any peaceful picketing by employees during any labor controversy or in the exercise of the right to self-organization or collective bargaining, or b) Aid or abet such obstruction or interference.

Slowdown A slowdown is inherently illicit and unjustifiable because while the employees continue to work, they, at the same time, select what part of their duties they perform. In essence, they work on their own terms. (Ilaw at Buklod ng Manggaagawa (IBM) v. NLRC, 1991) Role of Peace Officers during Strike and Picket A. Escorting

Art. 264 (d) No public official or employee, including officers and personnel of the AFP or the Integrated National Police, or armed persona) shall bring in, introduce or escort in any manner, b) any individual who seeks to replace strikers in entering or leaving the premises of a strike area, or work in place of the strikes. The police force shall keep out of the picket lines unless actual violence or other criminal acts occur therein: Provided, That nothing herein shall be interpreted to prevent any public officer from taking any measure necessary to maintain peace and order protect life and property, and/or enforce the law and legal order.

B.
Art. 266

Arrest and Detention of Law Violators

1) GENERAL RULE: No union members or union organizes may be arrested or detained for union activities without previous consultations with the Secretary of Labor. 2) EXCEPTION: a) On grounds of national security and public peace, or b) In case of commission of a crime

CONFLICT OF INTEREST: 1) Insofar as practicable, no officer of the law shall be allowed to render services in connection with a strike or lockout: a) if there is question or complaint as regards his relationship by affinity or consanguinity to any official/leader of the parties in the controversy or

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b) if he has financial or pecuniary interest therein. 6. Assumption of jurisdiction by the Secretary of Labor or Certification of the Labor dispute to the NLRC for compulsory arbitration Compulsory Arbitration: Definition and Nature of Dispute Compulsory Arbitration is by mandate of law. While voluntary arbitration is by agreement of parties. What is the type of dispute subject to compulsory arbitration? Labor disputes in industry indispensable to the national interest. Who is initiating party? Initiated by the Secretary of Labor or the President. Note: the NLRC has no authority to initiate. The NLRC only comes into the picture when the secretary of labor or the President certifies the case to them. 7. Nature of Assumption Order or Certification Order Requisites for Compulsory Arbitration
Art. 263 (g) there exists a LABOR DISPUTE causing of likely to cause a STRIKE OR LOCK-OUT in an INDUSTRY INDISPENSABLE TO THE NATIONAL INTERESTS The Secretary of Labor and Employment MAY: 1) Assume jurisdiction over the dispute and decide it OR 2) Certify the same to the Commission (NLRC) for COMPULSORY ARBITRATION

AND the employer shall IMMEDIATELY resume operations and READMIT all workers under the SAME terms and conditions prevailing before the strike or lock-out.

Note: the Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to sure the compliance with this provision (Art. 263, g) as well as with such orders as he may issue to enforce the same.
Art. 263(g) on strikes/lockouts in medical institutions: In labor disputes adversely affecting the continued operation of such hospitals, clinics or medical institutions, 1) It shall be the DUTY of striking union or locking out employer to provide and maintain an EFFECTIVE SKELETAL WORKFORCE of medical and other health personnel, 2) Whose movement and services shall be unhampered and unrestricted, as are necessary to insure the proper and adequate protection of the life and health of its patients, most especially emergency cases, for the duration of the strike or lockout. The Secretary of Labor and Employment may IMMEDIATELY assume, within twenty four (24) hours from knowledge of the occurrence of such a strike or lockout, jurisdiction over the same or certify it to the Commission for compulsory arbitration.

Assumption and certification orders are executor in character and are to be strictly complied with by the parties even during the pendency of any petition questioning their validity. The authority given to the Secretary of Labor aims to arrive at a peaceful and speedy solution to labor disputes, without jeopardizing national interests. EFFECT of Assumption or Certification of SOLE If the parties are yet to go on strike or lockout: AUTOMATICALLY enjoining the intended or impending strike or lock-out as specified in the assumption or certification order If one has already taken place at the time of assumption or certification, All striking or lock-out employees shall IMMEDIATELY RETURN TO WORK

Proceedings on appeal before the NLRC en banc cannot be considered as part of the arbitration proceeding. In its broad sense, arbitration is the reference of a dispute to an impartial third person, chosen by the parties or appointed by statutory authority to hear and decide the case in controversy Chan Linte v. Law Union and Rock, Inc. Co., 42 Phil. 548 (1921)]. When the consent of one of the parties is enforced by statutory provisions, the proceeding is referred to as compulsory arbitration. In labor cases, compulsory arbitration is the process of settlement of labor disputes by a government agency which has the authority to investigate and to make an award which is binding on all the parties. Under the Labor Code, it is the Labor Arbiter who is clothed with the authority to conduct compulsory arbitration on cases involving termination disputes [Article 217, Pres. Decree No. 442, as amended]. When the labor Arbiter renders his decision, compulsory arbitration is deemed terminated because by then the hearing and determination of the controversy has ended. (PAL v. NLRC, 1989) The production and publication of telephone directories, which is the principal activity of GTE, can scarcely be described as an industry affecting the national interest. GTE is a publishing firm chiefly dependent on the marketing and sale of advertising space for its not inconsiderable

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revenues. Its services, while of value, cannot be deemed to be in the same category of such essential activities as the generation or distribution of energy or those undertaken by banks, hospitals, and export-oriented industries. It cannot be regarded as playing as vital a role in communication as other mass media. The small number of employees involved in the dispute, the employers payment of P10 million in income tax alone to the Philippine government, and the fact that the top officers of the union were dismissed during the conciliation process, obviously do not suffice to make the dispute in the case at bar one adversely affecting the national interest. (GTE Directories Corp. v. GTE Directories Corp. Employees Union, 1991) Compulsory arbitration is a system whereby the parties to a dispute are compelled by the government to forego their right to strike and are compelled to accept the resolution of their dispute through arbitration by a third party. The essence of arbitration remains since a resolution of a dispute is arrived at by resort to a disinterested third party whose decision is final and binding on the parties, but in compulsory arbitration, such a third party is normally appointed by the government. (Luzon Development Bank v. Association of Development Bank Employees, 1995) A cursory reading of the above provision shows that when the Secretary of Labor assumes jurisdiction over a labor dispute in an industry indispensable to national interest or certifies the same to the NLRC for compulsory arbitration, such assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout. Moreover, if one had already taken place, all striking workers shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The powers granted to the Secretary of Labor under Article 263 (g) of the Labor Code have been characterized as an exercise of the police power of the State, with the aim to promoting public good: When the Secretary exercise these powers, he is granted great breadth of discretion in order t o find a solution to a labor dispute. The most obvious of these powers is the automatic enjoining of an impending strike or lockout or lifting thereof if one has already taken place. The maritime industry is indubitably imbued with national interest. Under the circumstances, the Labor Secretary correctly intervened in the labor dispute between the parties to this case by certifying the same to the NLRC for compulsory arbitration. (Trans-Asia Shipping Lines, Inc. v. CA, 2004) In the present case, there is no showing that the facts called for payroll reinstatement as an alternative remedy. A strained relationship between the striking employees and management is no reason for payroll reinstatement in lieu of actual reinstatement Petitioner correctly points out that labor disputes naturally involve strained relations between labor and management, and that in most strikes, the relations between the strikers and the non-strikers will similarly be tense. Nevertheless, the government must still perform its function and apply the law, especially if, as in this case, national interest is involved. GENERAL RULE: Voluntary Arbitration (Article XIII, Section 3 of the Constitution; Art. 211) EXCEPTION: Assumption of jurisdiction by Sec. of Labor [Art. 263 (g)] Even in the exercise of his discretion under Article 236(g), the Secretary must always keep in mind the purpose of the law. Time and again, this Court has held that when an official bypasses the law on the asserted ground of attaining a laudable objective, the same will not be maintained if the intendment or purpose of the law would be defeated. (Manila Diamond Hotel Employees Union v. CA, 2004) Compulsory Arbitration: Rationale The purpose of a presidential certification is nothing more than to bring about soonest, thru arbitration by the industrial court, a fair and just solution of the differences between an employer and his workers regarding the terms and conditions of work in the industry concerned which in the opinion of the President involves the national interest, so that the damage such employerworker dispute might cause upon the national interest may be minimized as much as possible, if not totally averted by avoiding the stoppage of work as a result of a strike or lockout or any lagging of the activities of the industry or the possibility of these contingencies which might cause detriment to such national interest. This is the foundation of that courts jurisdiction in what may be termed as a certification case. Naturally, if the employer and the workers are able to arrive at an amicable settlement by free and voluntary collective bargaining preferably thru a labor union, before the court is able to use its good offices, it is but in consonance with the objective of the Industrial Peace Act to promote unionism and free

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collective bargaining that the court should step out of the picture and declare its function in the premises at an end, except as it may become necessary to determine whether or not the agreement forged by the parties is not contrary to law, morals or public policy. (Manila Cordage Company v. CIR, 1971) The very nature of a return-to-work order issued in a certified case lends itself to no other construction. The certification attests to the urgency of the matter, affecting as it does an industry indispensable to the national interest. The order is issued in the exercise of the courts compulsory power of arbitration, and therefore must be obeyed until set aside. To say that its effectivity must await affirmance on a motion for reconsideration is not only to emasculate it but indeed to defeat its import, for by then the deadline fixed for the return to work would, in the ordinary course, have already passed and hence can no longer be affirmed insofar as time element is concerned. (National Federation of Labor v. MOLE, 1983) The very purpose of compulsory arbitration is to call a halt to a pending strike by requiring that the status quo prior to its declaration be preserved. The Solicitor General was correct when he stated that by assuming jurisdiction over the labor dispute, the Acting Secretary of Labor merely provided for a formal forum for the parties to ventilate their positions with the end in view of settling the dispute. As contented by the SolGen, there can be no such unconstitutional application (of BPI 227) because all that Minister has done is to certify the labor dispute for arbitration and thereafter jurisdiction over it. He has not rendered any decision; he has not favored one party over the other. (Phil. School of Business Administration v. Noriel, 1988)
LABOR DISPUTE of NATIONAL INTEREST (DETERMINED BY Sec. of Labor or President) Sec. of Labor may assume jurisdiction over the case and resolve it Sec. of Labor may certify the case to the NLRC for compulsory arbitration

When the Secretary exercises the powers granted by Article 263(g) of the labor Code, he is indeed granted great breadth of discretion. However, the application of this power is not without limitation, lest the Secretary would be above the law. As Article 263(g) is clear and unequivocal in stating that ALL striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit ALL workers under the same terms and conditions prevailing before the strike or lockout, then the unmistakable mandate must be followed by the Secretary. (PLDT v. Manggagawa ng Komunikasyon sa Pilipinas, 2005) Role of NLRC Corollary, the NLRC was thereby charged with the task of implementing the certification order for compulsory arbitration. As the implementing body, its authority did not include the power to amend the Secretarys order. Nature of Authority When sitting in a compulsory arbitration certified to by the Secretary of Labor, the NLRC is: not sitting as a judicial court but as an administrative body charged with the duty to implement the order of the Secretary. Jurisdiction over the Issues Necessarily, this authority to assume jurisdiction over the said labor dispute must include and extend to questions and controversies arising therefrom, including cases over which the labor arbiter has exclusive jurisdiction. An issue that is not part of the dispute may be ruled on a compulsory arbitration case if it was submitted by the parties. The submission of an incidental issue of a labor dispute, in assumption and/or certification cases, to the Secretary of Labor and Employment for his resolution is thus one of the instances referred to whereby the latter may exercise concurrent jurisdiction together with the Labor Arbiters. Effect of Assumption/Certification Order Effect of Assumption/Certification pursuant to Art. 263 (g): Order all

Process Initiation: Certification of Dispute Process Initiation: Initiating Party a) Secretary DOLE b) President

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1) Strike/Lockout automatically enjoined 2) Striking/Locked Out employees shall immediately return to work 3) Employer shall resume operations and readmit all workers Assumption Order carries with it a Return-to Work Order When the labor Secretary assumes jurisdiction over a labor dispute in an industry indispensable to the national interest, such assumption shall have the effect of automatically enjoining any intended or impending strike. It is clear from Art. 263 that the moment the Secretary of Labor assumes jurisdiction over a labor dispute in an industry indispensable to national interest, such assumption shall have the effect of automatically enjoining the intended or impending strike. The rationale of this prohibition is that once jurisdiction over the labor dispute has been properly acquired by the competent authority, that jurisdiction should not be interfered with by the application of the coercive processes of a strike. (Telefunken SemiConductor Employees Union v. CA, 2000) 8. Effect of defiance of Assumption or Certification Orders
Art. 263 (g) xxx For this purpose the contending parties are STRICTLY ENJOINED to comply with such orders, prohibitions and/or inunctions as are issued by the Secretary of Labor and Employment or the Commission, under pain immediate disciplinary action, including dismissal or loss of employment status or payment by the lacking-out employer of back wages, damages and other affirmative relief, even criminal prosecution against either or both of them.

precisely is to maintain the status quo while the determination is being made. Return-to-Work Order Mandatory Returning to work in this situation is not a matter of option or voluntariness but of obligation. The worker must return to his job together with his coworkers so the operations of the company can be resumed and it can continue serving the public and promoting its interest. This extraordinary authority given to the Secretary of Labor is aimed at arriving at a peaceful and speedy solution to labor disputes, without jeopardizing national interests. Regardless therefore of their motives, or the validity of their claims, the striking workers must cease and/or desist from any and all acts that tend to, or undermine this authority of the Secretary of Labor, once an assumption and/or certification order is issued. They cannot for instance, ignore return-to-work orders, citing unfair labor practices on the part of the company, to justify their action. (Manila Hotel Employees Assn. v. Manila Hotel Corp., 2007) Awards and Orders
Art. 263. Strikes, picketing and lockouts (i). The Secretary of Labor and Employment, the Commission or the voluntary arbitrator shall decide or resolve the dispute, as the case may be. The decision of the President, the Secretary of Labor and Employment, the Commission or the voluntary arbitrator shall be final and executory ten (10) calendar days after receipt thereof by the parties.

Return-to-Work order NOT a violation of the right against involuntary servitude So imperative is the order in fact that it is not even considered violative of the right against involuntary servitude, as this Court held in Kaisahan ng Mga Manggagawa sa Kahoy v. Gotamco Sawmills. The worker can of course give up his work, thus severing his with the company, if he does not want to obey the order, but the order must obeyed if he wants to retain his work even if his inclination is to strike. One other point that must be underscored is that the return-to-work order is issued pending the determination of the legality or illegality of the strike. It is not correct to say that it may be enforced only if the strike is legal and may be disregarded if the strikes is illegal, for the purpose

Art. 277 (i). To ensure speedy labor justice, the periods provided in this Code within which decisions or resolutions of labor relations cases or matters should be rendered shall be mandatory. For this purpose, a case or matter shall be deemed submitted for decision or resolution upon the filing of the last pleading or memorandum required by the rules of the Commission or by the Commission itself, or the Labor Arbiter, or the Director of the Bureau of Labor Relations or Med-Arbiter, or the Regional Director. Upon expiration of the corresponding period, a certification stating why a decision or resolution has not been rendered within the said period shall be issued forthwith by the Chairman of the Commission, the Executive Labor Arbiter, or the Director of the Bureau of Labor Relations or Med-Arbiter, or the Regional Director, as the case may be, and a copy thereof served upon the parties. Despite the expiration of the applicable mandatory period, the aforesaid officials shall, without prejudice to any liability which may have been incurred as a consequence thereof, see to it that the case or matter shall be decided or resolved without any further delay.

The company is therefore right in dismissing the subject Union officers in accordance with Article 264 (a) of the Labor Code, for participating in illegal strike in defiance of the assumption of

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jurisdiction order by the Labor Secretary. However, the members of the Union should not be as severely punished. Dismissal is a harsh penalty as surely they were only following orders from their officers. Besides, there is no evidence that they engaged or participated in the commission of illegal activities during the said strike. They should thus be reinstated to their former positions, but without backwages. Their action which resulted in prejudice to the Company cannot however go unpunished. For the injury that they have collectively inflicted on the company, they should be disciplined. A one month suspension is a reasonable disciplinary measure which should be deemed served during the time they out of their jobs (sic). (Nissan Motors Phils., Inc. v. Sec. of Labor, 2006) Option Submit case to Voluntary Arbitration after Certification Art. 263 (h). Before or at any stage of the compulsory arbitration process, the parties may opt to submit their dispute to voluntary arbitration. 9. Illegal Strike Basis of illegality Noted authority on labor law, Ludwig Teller, lists six (6) categories of an illegal strike, viz.: 1. When it is contrary to a specific prohibition of law, such as strike by employees performing governmental functions: or When it violates a specific requirement of llaw, such as Article 263 of the Labor Code on the requisites of a valid strike]; or When it is declared for an unlawful purpose, such as including the employer to commit an unfair labor practice against non-union employees; or When it employs unlawful means in the pursuit of its objective, such as a widespread terrorism of non-strikers [for example, prohibited acts under Art. 264(e) of the Labor Code]; or When it is declared in violation of an existing injunction, such as injunction, prohibition, or order issued by the DOLE Secretary and the NLRC under Art. 263 of the Labor Code]; or When it is contrary to an existing agreement, such as a no-strike clause or conclusive arbitration clause. (Manila Diamond Hotel Employees Union v. CA, 2007) 2) Any union member Steel Corp. of the Phils. V SCP Employees Union National Federation of Labor Unions (2008): The strike undertaken by the officers of respondent union is patently illegal for the following reasons: it is a union-recognition-strike which is not sanctioned by labor laws; it was undertaken after the dispute had been certified for compulsory arbitration; and it was in violation of the Secretarys return-to-work order.
Art. 263 (g), 2nd paragraph: Strikes and lockouts in hospitals, clinics and similar medical institutions shall, to every extent possible, be avoided and all serious efforts shall be exhausted to substantially minimize, if not prevent, their adverse effects.

(a) Liability of officers of the unions Art. 264 (a), 3rd paragraph: Persons 1) Any union officer Punishable Acts Knowingly participates, authorizes or ratifies an illegal strike Knowingly participates in commission of illegal acts during a strike Punishable Penalty Termination of employment

Termination employment

of

2. 3.

Query: Is the filing of a petition with the Labor Arbiter to declare a strike illegal condition sine qua non for the valid termination of employees who commit illegal acts in the course of such strike? Answer. No. The use of unlawful means in the course of a strike renders the strike illegal. Pursuant to the principle of conclusiveness of judgment, the said strike was ipso facto illegal. The filing of a petition to declare the strike illegal was thus petition to declare the strike illegal was thus unnecessary (Jackbilt Industries, Inc. v Jackbilt Employees Workers Union-NAFLUKMU, 20 March 2009) Exception: If however, a complaint for illegal strike is formally filed and is pending in the NLRC, the employer must desist from dismissing outright

4.

5.

6.

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the union officers involved. See PNOC Dockyard and Engineering Corp. v. NLRC. 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. (Santa Rosa Coca-Col Plant Employees Union v. Coca-cola Bottlers Phils., Inc., 2007) (b) Liability of ordinary workers Note: also refer to the table under the preceding subsection. Article 264 of the Labor Code, in providing for the consequences of an illegal strike, makes a distinction between union officers and members who participated thereon. Thus, knowingly participating in an illegal strike is a valid ground for termination from employment of a union officer. The law, however, treats differently mere union members. Mere participation in an illegal strike is not a sufficient ground for termination of the services of the union members. The Labor Code protects an ordinary, rank-and-file union member who participated in such a strike from losing his job, provided that he did not commit an illegal act during the strike. Thus, absent any clear, substantial and convincing proof of illegal acts committed during an illegal strike, an ordinary striking worker or employee may not be terminated from work. With respect to union officers, however, there is no dispute they could be dismissed for participating in an illegal strike. Union officers are duty-bound to guide their members to respect the law. Nonetheless, as in other termination cases, union officers must be given the required notices for terminating an employment, i.e., notice of hearing to enable them to present their side, and notice of termination, should their explanation prove unsatisfactory. Nothing in Article 264 of the Labor Code authorizes an immediate dismissal of a union officer for participating in an illegal strike. The act of dismissal is not intended to happen ipso facto but rather as an option that can be exercised by the employer and after compliance with the notice requirements for terminating an employee. (Stanford Marketing Corp. v. Julian, 2004) It is necessary for the company to adduce proof of the participation of the striking employees in the commission of illegal acts during the strikes. (Toyota Motor Phils. Corp. Workers Association [TMPCWA], 2007) Union members who participated in illegal strike but were not identified to have committed illegal acts are entitled to ne reinstated to their former positions but without backwages. (Philippine Diamond Hotel and Resort, Inc. [Manila Diamond Hotel] v. Manila Diamond Hotel Employees Union, 2006) Effect of assumption/certification order
Art.264. No strike or lockout shall be declared after assumption of jurisdiction by the President or the Secretary or after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for the strike of lockout.

A strike that is held despite the issuance by the SOLE of an assumption or certification order, becomes a prohibited activity pursuant to Article 264. As the Court ruled in Union of Filipino Employees. V. Nestle Philippines, Inc (1990). Under Article 264(a) of the said code, once an assumption certification order is issued by the SOLE, strikes are enjoined or if one has already taken place, all strikes shall immediately return to work. ( Grand Boulevard Hotel v. Grand Labor Organization, 2004)
Art. 263(g): REQUISITES FOR ASSUMPTION/CERTIFICATION OF SOLE (Secretary of Labor): 1) Labor dispute causing or likely to cause a strike or lockout 2) In an industry indispensable to the national interest. OPTION OF THE SOLE: 1) Assume jurisdiction over the dispute and decide it or, 2) Certify the dispute to the NLRC for compulsory arbitration. EFFECT OF ASSUMPTION OR CERTIFICATION: 1) Automatically enjoin the intended or impending strike or lockout as specified in the assumption or certification order. 2) If a strike or lockout has already taken place at the time of assumption or certificationa) all striking or locked out employees shall immediately return to work, and b) the employer shall readmit all workers under the same terms and conditions prevailing before the strike or lockout. 3) The SOLE may seek the assistance of law enforcement agencies to ensure the compliance with this provision as well as with such orders as the may issue to enforce the same.

The powers granted to the Secretary under Article 263(g) have been characterized as an exercise of the police power of the State. When the Secretary exercises these powers, he is granted great breath of discretion to find a solution to a labor dispute. The most obvious of these powers is the automatic enjoining of an impending strike or lockout or its lifting if one has already taken place. A return-to-work order imposes a duty that must be discharged more that it confers a right that may be waved. While the workers may choose not to obey, they do so at the risk of severing their relationship with their employer. (Philcom

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Employees Union v. Philippine Global Communications and Philcom Corporation, 2006) The moment the Secretary of Labor assumes jurisdiction over a labor dispute in an industry indispensable to national interest, such assumption shall have or impending strike. It was not even necessary for the Secretary of Labor to issue another order directing a return a return to work. The mere issuance of an assumption order by the Secretary of Labor automatically carries wit it a return-to-work order, even if the directive to return to work is not expressly stated in the assumption order. (Telefunken Semiconductors Employees Unon v. Court of Appeals, 1997) Employment of strike breakers
Art. 264 (c). No employer shall use or employ any strikebreaker, nor shall any person be employed as a strike-breaker.

no-strike clause in a CBA is applicable only to economic strikes. Corollarily, if the strike is founded on an unfair labor practice of the employer, a strike declared by the union cannot be considered a violation of the no-strike clause. (Master Iron Labor Union vs. NLRC, 1993) 10. Injunctions GENERAL RULE
Art. 254. Injunction prohibited. No temporary or permanent injunction or restraining order in any case involving or growing out of labor disputes shall be issued by any court or other entity, except as otherwise provided in Article 218 and 264 of this Code.

EXCEPTIONS Art. 218(e) This article talks about the substantial and procedural rights from issuing an injunction. An injunction may be issued by the NLRC, not against the strike oBUT it may be issued against an illegal act in a strike which may cause substantial and irreparable damage to the property of a person. (Pls refer to succeeding subsection) o Art. 264 This provision talks about the prohibited activities in a strike, lock-out or picket which may be enjoined by an injunction.
Art. 264. Prohibited activities. (a) No labor organization or employer shall a strike or lockout without first having bargained collectively in accordance wit Title VII or this Book or without first having filed the notice required in the preceding Article or without the necessary strike or lockout vote first having been obtained and reported to the Department No strike or lockout shall be declared after assumption of jurisdiction by the President or the Secretary or after certification or submission of the dispute to compulsory or voluntary arbitration or during the pendency of cases involving the same grounds for the strike of lockout. Any worker whose employment has been terminated as a consequence of an unlawful lockout shall be entitled to reinstatement with full backwages. Any union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment right: Provided, That mere participation of a worker in lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike. (b) No person shall obstruct, impede or interfere with by force, violence, coercion, threats or intimidation any peaceful picketing by employees during any labor controversy or in the exercise of the right of self-organization or collective bargaining or shall aid or abet such obstruction or interference. ( c) No employer shall use or employ any strike breaker nor shall person be employed as a strike breaker. (d) No public official or employee, including officers and personnel of the New Armed Force of the Philippines or the Integrated National Police, or armed persons, shall bring in, introduce or

Art. 2129R0. Strike-breaker a) Means any person who obstructs, impedes, or interferes with by force, violence, coercion, threats, or intimidation b) any peaceful picketing affecting wages, hours or conditions of work or in the exercise of the right of self-organization or collective bargaining.

Improved offer balloting and strikes


Art. 265. Improved offer balloting Strikes: 1) In an effort to settle a strike, the DOLE shall conduct a referendum by secret ballot in the improved offer of the employer on or before the 30th day of the strike. When at least a majority of the union members vote to accept the improved offer the striking workers shall immediately return to work and the employer shall thereupon readmit them upon the signing of the agreement. Lockouts: 2) In case of a lockout, the DOLE shall also conduct a referendum by secret balloting on the reduced offer of the union on or before the 30th day of the lockout. When at least a majority of the board of directors or the partners holding the controlling interest in the case of a partnership vote to accept the reduced offer, the workers shall immediately return to work and the employer shall thereupon readmit them upon the signing of the agreement.

(c) Waiver of illegality of strike [J]urisprudence has enunciated that [no-strike provision in the CBA] only bars strikes which are economic in nature, but not strikes grounded on unfair labor practices. (San Miguel Corp. vs. NLRC, 2003) As this Court has held in Philippine Metal Foundries, Inc. vs. CIR (90 SCRA 135 [1979]), a

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escort in any manner, any individual who seeks to replace strikers in entering or leaving the premises of a strike area, or other criminal acts occur therein: Provided, That nothing herein shall be interpreted to prevent any public officers from taking any measure necessary to maintain peace and order, protect life and property, and/or enforce the law and legal order. (e) No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the free ingress to or egress from the employers premises for lawful purposes, or obstruct public thoroughfares.

(a) Requisites for Labor Injunctions Article 218. Powers of the Commission. The Commission shall have the power and authority:
To enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts or to require the performance of a particular act in any labor dispute which, if not restrained or performed forthwith, may cause grave or irreparable damage to any party or render ineffectual any decision in favor of such party: Provided, That no temporary or permanent injunction in any case involving or growing out of a labor dispute as defined in this Code shall be issued except after hearing the testimony of witnesses, with opportunity for cross-examination, in support of the allegations of a complaint made under oath, and testimony in opposition thereto, if offered, and only after a finding of fact by the Commission, to the effect: That prohibited or unlawful acts have been threatened and will be committed and will be continued unless restrained, but no injunction or temporary restraining order shall be issued on account of any threat, prohibited or unlawful act, except against the person or persons, association or organization making the threat or committing the prohibited or unlawful act or actually authorizing or ratifying the same after actual knowledge thereof; That substantial and irreparable injury to complainants property will follow; That as to each item of relief to be granted, greater injury will be inflicted upon complainant by the denial of relief than will be inflicted upon defendants by the granting of relief; That complainant has no adequate remedy at law; and That the public officers charged with the duty to protect complainants property are unable or unwilling to furnish adequate protection. xxx

of communication or the demonstration to the parties to the labor dispute, including those with related interest, and to insulate establishments or persons with no industrial connection or having interest totally foreign to the context of the dispute. Thus the right may be regulated at the instance of third parties or "innocent bystanders" if it appears that the inevitable result of its exercise is to create an impression that a labor dispute with which they have no connection or interest exists between them and the picketing union or constitute an invasion of their rights. In one case decided by this Court, we upheld a trial court's injunction prohibiting the union from blocking the entrance to a feed mill located within the compound of a flour mill with which the union had a dispute. Although sustained on a different ground, no connection was found between the two mills owned by two different corporations other than their being situated in the same premises. It is to be noted that in the instances cited, peaceful picketing has not been totally banned but merely regulated. And in one American case, a picket by a labor union in front of a motion picture theater with which the union had a labor dispute was enjoined by the court from being extended in front of the main entrance of the building housing the theater wherein other stores operated by third persons were located.(Philippine Association of Free Labor Unions (PAFLU) vs Cloribel, G R No L 25878 March 28 1969) VIII. PROCEDURE AND JURISDICTION The following are the topics covered: 3. Labor Arbiter 4. National Labor Relations Commission (NLRC) 5. Bureau of Labor Relations (BLR) Med Arbiters 6. National Conciliation and Mediation Board (NCMB) 7. DOLE Regional Directors 8. DOLE Secretary 9. Voluntary Arbitrators 10. Court of Appeals 11. Supreme Court 12. Prescription of Actions

(b) "Innocent Bystander Rule" The right to picket as a means of communicating the facts of a labor dispute is a phase of the freedom of speech guaranteed by the constitution. If peacefully carried out, it cannot be curtailed even in the absence of employeremployee relationship. The right is, however, not an absolute one. While peaceful picketing is entitled to protection as an exercise of free speech, we believe that courts are not without power to confine or localize the sphere

1. Labor Arbiter a. Jurisdiction


Original and exclusive jurisdiction to hear and decide the following cases involving all workers, whether agricultural or nonagricultural: Unfair labor practice cases;

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Termination disputes; If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment; Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement (Article 217, Labor Code, as amended). Original and exclusive jurisdiction over money claims arising out of employer-employee relationship or by virtue of any law or contract, involving Filipino workers for overseas deployment, including claims for actual, moral, exemplary and other forms of damages (Section 10, Republic Act No. 8042, as amended by Republic Act No. 10022). Wage distortion disputes in unorganized establishments not voluntarily settled by the parties pursuant to Republic Act No. 6727. Enforcement of compromise agreements when there is noncompliance by any of the parties or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation or coercion (Article 227, Labor Code, as amended). Other cases as may be provided by law. The cases enumerated may instead be submitted to a voluntary arbitrator by agreement of the parties under Art. 262. The law refers voluntary over compulsory arbitration. Concurrent with NLRC Contempt cases. Cases Referred to Grievance Machinery and Voluntary Arbitration Disputes on the interpretation or implementation of the CBA; and Disputes on the interpretation or enforcement of company personnel policies.

c. Requirements to perfect appeal to NLRC


Sec. 4, NLRC Rules of Procedure 2011 a. The appeal shall be: (1) filed within the reglementary period provided in Section 1 of this Rule; (2) verified by the appellant himself/herself in accordance with Section 4, Rule 7 of the Rules of Court, as amended; (3) in the form of a memorandum of appeal which shall state the grounds relied upon and the arguments in support thereof, the relief prayed for, and with a statement of the date the appellant received the appealed decision, award or order; (4) in three (3) legibly typewritten or printed copies; and (5) accompanied by: i) proof of payment of the required appeal fee and legal research fee; ii) posting of a cash or surety bond as provided in Section 6 of this Rule; and iii) proof of service upon the other parties. b) A mere notice of appeal without complying with the other requisites aforestated shall not stop the running of the period for perfecting an appeal. c) The appellee may file with the Regional Arbitration Branch or Regional Office where the appeal was filed, his/her answer or reply to appellant's memorandum of appeal, not later than ten (10) calendar days from receipt thereof. Failure on the part of the appellee who was properly furnished with a copy of the appeal to file his/her answer or reply within the said period may be construed as a waiver on his/her part to file the same. d) Subject to the provisions of Article 218 of the Labor Code, once the appeal is perfected in accordance with these Rules, the Commission shall limit itself to reviewing and deciding only the specific issues that were elevated on appeal.

b. Effect of self-executing order of reinstatement on backwages The decision of the Labor Arbiter ordering the reinstatement of a dismissed or separated employee shall be immediately executor insofar as the reinstatement aspect is concerned and the posting of an appeal bond by the employer shall not stay such execution. There is no need for a motion for the issuance of a writ of execution on the reinstatement order as it is self-executory. (Pioneer Texturizing Corp. vs. NLRC, G.R. No. 118651, October 16, 1997)

It is clear from the NLRC Rules of Procedure that appeals must be verified and certified against forum-shopping by the parties-in-interest themselves. The purpose of verification is to secure an assurance that the allegations in the pleading are true and correct and have been filed in good faith. In the case at bar, the parties-in-interest are petitioner Salenga, as the employee, and respondent Clark Development Corporation as the employer. A corporation can only exercise its powers and transact its business through its board of directors and through its officers and agents when authorized by a board resolution or its bylaws. The power of a corporation to sue and be sued is exercised by the board of directors. The physical acts of the corporation, like the signing of documents, can be performed only by natural persons duly authorized for the purpose by corporate bylaws or by a specific act of the board. Absent the requisite board resolution, neither Timbol-Roman nor Atty. Mallari, who signed the Memorandum of Appeal and Joint Affidavit of Declaration allegedly on behalf of respondent corporation, may be considered as the appellant and employer referred to by the NLRC Rules of Procedure. As such, the NLRC had no jurisdiction

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to entertain the appeal. (Antonio B. Salenga, et al. vs. Court of Appeals, et al., G.R. No. 174941, February 1, 2012.) 2. National Labor Relations Commission (NLRC) a. Jurisdictions
Exclusive and Original Cases certified to it by the Secretary of Labor, as well as petitions which seek to enjoin or restrain any actual or threatened commission of prohibited or unlawful acts in any labor disputes (Article 218, Labor Code, as amended). Injunction cases under Articles 128 and 264; and Contempt cases Appellate Decisions, awards or orders of the Labor Arbiters appealed to the Commission through its Divisions, with the First, Second, Third, Fourth, Fifth and Sixth handling cases from the National Capital Region and other parts of Luzon; the Seventh and Eighth, handling cases from the Visayas and Mindanao, respectively (Article 217, Labor Code, as amended). Decisions of Regional Directors or hearing officers on simple money claims not exceeding P5,000 appealed to the Commission (Article 129, Labor Code, as amended).

employer has the right to require the dismissed employee on payroll reinstatement to refund the salaries s/he received while the case was pending appeal, or it can be deducted from the accrued benefits that the dismissed employee was entitled to receive from his/her employer under existing laws, collective bargaining agreement provisions, and company practices. However, if the employee was reinstated to work during the pendency of the appeal, then the employee is entitled to the compensation received for actual services rendered without need of refund.( Citibank vs. NLRC, G.R. Nos. 142732-33 and 142753-54, December 4, 2007) c. Requirements to perfect appeal to Court of Appeals As held in the case of St. Martin Funeral Home of NLRC (GR 130866. September 16, 1998), the way to review the NLRCs decision is through the special civil action of certiorari under Rule 65, to the Court of Appeals. Thus the 1997 Rules of Procedure should be observed, to wit: 1. The petition for certiorari must be filed not later than 60 days from notice of the judgment, order or resolution. If a motion for new trial or reconsideration is timely filed, whether it is required or not, the 60 day period shall be counted from denial of such motion. 2. The petition should be accompanied by a certified true copy of the NLRC decision and by a sworn certification of non forum shopping as well as copies of all relevant pleadings and documents. 3. In observance of the hierarchy of courts principle, the petition must be filed in the first instance with the CA. 3. Bureau of Labor Relations (BLR) Med Arbiters a. Jurisdiction (Original and Appellate)
Exclusive and Original Jurisdiction (Art. 226, Labor Code) To act on its own initiative or upon request of either or both parties on all: Inter-union conflicts Intra-union conflicts Other related labor relations disputes Other related labor relations disputes (Sec. 2, Rule XI, D.O. 4003)

Under Article 218 the Labor Code, the NLRC (and the labor arbiters) may hold any offending party in contempt, directly or indirectly, and impose appropriate penalties in accordance with law. The penalty for direct contempt consists of either imprisonment or fine, the degree or amount depends on whether the contempt is against the Commission or the labor arbiter. The Labor Code, however, requires the labor arbiter or the Commission to deal with indirect contempt in the manner prescribed under Rule 71 of the Rules of Court. Rule 71 of the Rules of Court does not require the labor arbiter or the NLRC to initiate indirect contempt proceedings before the trial court. This mode is to be observed only when there is no law granting them contempt powers. As is clear under Article 218(d) of the Labor Code, the labor arbiter or the Commission is empowered or has jurisdiction to hold the offending party or parties in direct or indirect contempt. Robosa, et al., therefore, have not improperly brought the indirect contempt charges against the respondents before the NLRC. (Federico S. Robosa, et al. vs. National Labor Relations Commission (First Division), et al., G.R. No. 176085, February 8, 2012.) b. Effect of NLRC reversal of Labor Arbiters order of reinstatement If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for dismissal is valid, then the

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Shall include any conflict between a labor union and the employer or any individual, entity or group that is not a labor organization or workers' association. This includes: cancellation of registration of unions and workers associations; and a petition for interpleader. E.O. 251 of 1987 removed from the jurisdiction of the BLR all labor-management disputes. The effect of E.O. 251 is to transfer to the NCMB the mediation, concillation, and arbitration functions of the BLR. The parties may by agreement settle their differences by submitting their case to a voluntary arbitrator rather than taking the case to the BLR. Appellate Jurisdiction The decision of the Med-Arbiter and Regional Director may be appealed to the Bureau by any of the parties within ten (10) days from receipt thereof, copy furnished the opposing party. The decision of the Bureau Director in the exercise of his/her original jurisdiction may be appealed to the Office of the Secretary by any party within the same period, copy furnished the opposing party. (Sec. 16, Rule XI, D.O. 40-03) In petitions for cancellation of union registration, if filed with the Regional Office, the appeal is with the BLR Director whose decision shall be final and executor. If the petition for cancellation is filed directly with the BLR, the appeal is with the Secretary of Labor whose decision shall be final and executor.

(f) Provide counselling and preventive mediation assistance particularly in the administration of collective agreements; (g) Monitor and exercise technical supervision over the Board programs being implemented in the regional offices; and (h) Perform such other functions as may be provided by law or assigned by the Secretary a. Conciliation vs. Mediation Conciliation Refers to the process where a disinterested third party meets with management and labor at their request or otherwise, during a labor dispute or in a collective bargaining conferences, and, by cooling tempers, aids in reaching an agreement.

Mediation A third party dispute then disputants to cannot make decision. studies each side of the makes proposals for the consider. But a mediator an award or render a

4. National Conciliation and Mediation Board (NCMB) Created by virtue of E.O. 126 (January 31, 1987) It absorbed the conciliation, mediation and voluntary arbitration functions of the Bureau of Labor Relations. Functions: (a) Formulate policies, programs, standards, procedures, manuals of operation and guidelines pertaining to effective mediation and conciliation of labor disputes; (b) Perform preventive mediation and conciliation functions; (c) Coordinate and maintain linkages with other sectors or institutions, and other government authorities concerned with matters relative to the prevention and settlement of labor disputes; (d) Formulate policies, plans, programs, standards, procedures, manuals of operation and guidelines pertaining to the promotion of cooperative and non-adversarial schemes, grievance handling, voluntary arbitration and other voluntary modes of dispute settlement; (e) Administer the voluntary arbitration program; maintain/update a list of voluntary arbitrations; compile arbitration awards and decisions;

b. Preventive Mediation Undertaken when the issues raised are not proper subjects of notices of strike or lockout. E.g. dismissal of union officer or protest regarding the conduct of certification election. (Pasyll vs NLRC, GR No. 24823, July 28,199)

5. DOLE Regional Directors a. Small money claims Upon complaint of any interested party, the Regional Director of the Department of Labor and Employment or any of the duly authorized hearing officers of the Department is empowered through summary proceeding and after due notice, to hear and decide any matter involving the recovery of wages and other monetary claims and benefits, including legal interest, provided: a) That the aggregate money claims of each employee or househelper does not exceed Five thousand pesos (P5,000.00). b) The claim is presented by an employee or person employed in domestic or household service or househelper c) The claim arises from EER; and

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d) The claimant does not seek reinstatement. 6. DOLE Secretary a. Visitorial and Enforcement Powers Visitorial Power Power of the Secretary of Labor or any of his duly authorized representative to have access to employers records and premises at any time of the day or night whenever work is undertaken therein: Includes the right to copy therefrom, to question any employee and investigate any fact condition or matter which may be necessary to determine violations or which may aid in the enforcement of the Code and of any labor law, wage order or rules and regulations. Enforcement of power (as amended by RA 7730) Power of the Labor Secretary to compel the employer to comply with labor standards upon finding of violations discovered in the course of the exercise of the visitorial power. The decision of a Voluntary Arbitrator or panel of Voluntary Arbitrators is appealable by ordinary appeal under Rule 43 of the Rules of Civil Procedure directly to the CA. In Sime Darby Pilipinas, Inc. v. Deputy Administrator Magsalin,G.R. No. 90426, December 15, 1989, the Supreme Court ruled that the voluntary arbitrator had plenary jurisdiction and authority to interpret the agreement to arbitrate and to determine the scope of his own authority subject only, in a proper case, to the certiorari jurisdiction of this Court. It was also held in that case that the failure of the parties to specifically limit the issues to that which was stated allowed the arbitrator to assume jurisdiction over the related issue. In Ludo & Luym Corporation v. Saornido, G.R. No. 140960, January 20, 2003, the Supreme Court recognized that voluntary arbitrators are generally expected to decide only those questions expressly delineated by the submission agreement; that, nevertheless, they can assume that they have the necessary power to make a final settlement on the related issues, since arbitration is the final resort for the adjudication of disputes. Thus, the Supreme Court ruled that even if the specific issue brought before the arbitrators merely mentioned the question of whether an employee was discharged for just cause, they could reasonably assume that their powers extended beyond the determination thereof to include the power to reinstate the employee or to grant back wages. In the same vein, if the specific issue brought before the arbitrators referred to the date of regularization of the employee, law and jurisprudence gave them enough leeway as well as adequate prerogative to determine the entitlement of the employees to higher benefits in accordance with the finding of regularization. Indeed, to require the parties to file another action for payment of those benefits would certainly undermine labor proceedings and contravene the constitutional mandate providing full protection to labor and speedy labor justice. (Manila Pavilion Hotel, etc. vs. Henry Delada, G.R. No. 189947, January 25, 2011.) 8. Court of Appeals a. Rule 65, Rules of Court The special civil action of certiorari should be initially filed in the CA in strict observance of the doctrine on the hierarchy of courts as the appropriate forum for relief desired. (St. Martin Funeral Home vs. NLRC, 1998) 9. Supreme Court

b. Power to suspend effects of termination The Secretary of Labor may provisionally order reinstatement in the event of prima facie finding that the dismissal may cause a serious labor dispute as in a strike or lock-out, or is in implementation of mass lay-off.

7. Voluntary Arbitrators a. Submission Agreement Written agreement jointly submitted by parties to the voluntary arbitrator which contains: 1. The parties statement/agreement to submit to arbitration 2. The issues to be resolved 3. The agreement to abide by the decision or award, the conduct of proceedings, payment of arbitrators fees, etc. b. Rule 43, Rules of Court

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a. Rule 45, Rules of Court Appeal from CA to SC should be under Rule 45 (Petition for Review on Certiorari) and not Rule 65 (Special Civil Action for Certiorari). (Sea Power Shipping Enterprises, Inc. vs. CA, G.R. No. 138270, June 28, 2011) As a general rule, the Supreme Court is not a trier of facts and a petition for review on certiorari under Rule 45 of the Rules of Court must exclusively raise questions of law. Moreover, if factual findings of the National Labor Relations Commission and the Labor Arbiter have been affirmed by the Court of Appeals, the Supreme Court accords them the respect and finality they deserve. It is well-settled and oft-repeated that findings of fact of administrative agencies and quasi-judicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only respect, but finality when affirmed by the Court of Appeals.Nevertheless, the Supreme Court will not hesitate to deviate from what are clearly procedural guidelines and disturb and strike down the findings of the Court of Appeals and those of the labor tribunals if there is a showing that they are unsupported by the evidence on record or there was a patent misappreciation of facts. Indeed, that the impugned decision of the Court of Appeals is consistent with the findings of the labor tribunals does not per se conclusively demonstrate the correctness thereof. By way of exception to the general rule, the Supreme Court will scrutinize the facts if only to rectify the prejudice and injustice resulting from an incorrect assessment of the evidence presented. (Timoteo H. Sarona vs. National Labor Relations Commission, Royale Security Agency, et al., G.R. No. 185280, January 18, 2011)
this Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be forever barred. All money claims accruing prior to the effectivity of this Code shall be filed with the appropriate entities established under this Code within one (1) year from the date of effectivity, and shall be processed or determined in accordance with the implementing rules and regulations of the Code; otherwise, they shall be forever barred. Workmens compensation claims accruing prior to the effectivity of this Code and during the period from November 1, 1974 up to December 31, 1974, shall be filed with the appropriate regional offices of the Department of Labor not later than March 31, 1975; otherwise, they shall forever be barred. The claims shall be processed and adjudicated in accordance with the law and rules at the time their causes of action accrued.

b. Illegal dismissal Under the New Civil Code, an action for illegal dismissal prescribes in 4 years from the accrual of cause of action. c. Unfair labor practice
Article 290. Offenses. Offenses penalized under this Code and the rules and regulations issued pursuant thereto shall prescribe in three (3) years. All unfair labor practice arising from Book V shall be filed with the appropriate agency within one (1) year from accrual of such unfair labor practice; otherwise, they shall be forever barred.

d. Offenses penalized by the Labor Code and IRR issued pursuant thereto
Article 290. Offenses. Offenses penalized under this Code and the rules and regulations issued pursuant thereto shall prescribe in three (3) years.

Prescriptive period of illegal recruitment cases: Under RA 10022, amending RA 8042, llegal recruitment cases shall prescribe in five (5) years; provided, however, that illegal recruitment cases involving economic sabotage shall prescribed in twenty (20) years.

10. Prescription of Actions a. Money claims


Article 291. Money claims. All money claims arising from employer-employee relations accruing during the effectivity of

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