Sie sind auf Seite 1von 123

2012

UP L AW BAR REVIEWER

LABOR

LAW
Dean Danilo L. Concepcion Dean, UP College of Law Prof. Concepcion L. Jardeleza Associate Dean, UP College of Law Prof. Ma. Gisella D. Reyes Secretary, UP College of Law Prof. Florin T. Hilbay Faculty Adviser, UP Law Bar Operations Commission 2012 Ramon Carlo F. Marcaida Commissioner Eleanor Balaquiao Mark Xavier Oyales Academics Committee Heads Remy Rose Alegre Sandra M.T. Magalang Labor Law Subject Heads Graciello Timothy Reyes Layout

UP LAW BAR OPERATIONS COMMISSION

2012

UP L AW BAR REVIEWER
BAR OPERATIONS COMMISSION 2012

LABOR

EXECUTIVE COMMITTEE Ramon Carlo Marcaida |Commissioner Raymond Velasco Maria Kriska Chen |Deputy Commissioners Barbie Kaye Perez |Secretary Carmen Cecilia Veneracion |Treasurer Hazel Angeline Abenoja|Auditor COMMITTEE HEADS Eleanor Balaquiao Mark Xavier Oyales | Acads Monique Morales Katleya Kate Belderol Kathleen Mae Tuason (D) Rachel Miranda (D) |Special Lectures Patricia Madarang Marinella Felizmenio |Secretariat Victoria Caranay |Publicity and Promotions Loraine Saguinsin Ma. Luz Baldueza |Marketing Benjamin Joseph Geronimo Jose Lacas |Logistics Angelo Bernard Ngo Annalee Toda|HR Anne Janelle Yu Alyssa Carmelli Castillo |Merchandise Graciello Timothy Reyes |Layout Charmaine Sto. Domingo Katrina Maniquis |Mock Bar Krizel Malabanan Karren de Chavez |Bar Candidates Welfare Karina Kirstie Paola Ayco Ma. Ara Garcia |Events OPERATIONS HEADS Charles Icasiano Katrina Rivera |Hotel Operations Marijo Alcala Marian Salanguit |Day-Operations Jauhari Azis |Night-Operations Vivienne Villanueva Charlaine Latorre |Food Kris Francisco Rimban Elvin Salindo |Transpo Paula Plaza |Linkages

LABOR LAW TEAM 2012 Faculty Editor | Prof. Evelyn (Leo) Battad) Subject Heads| Remy Rose Alegre Sandra M.T. Magalang Contributors| Dana Genevieve Dela Cruz Henry Flordeliza Ricardo Jesus Gutierrez Ann Margaret Lorenzo Ellery Magbato Hannah Camille Marquez PJ Navarro Jill Te Andrew Velasco LAYOUT TEAM 2012 Layout Artists | Alyanna Apacible Noel Luciano RM Meneses Jenin Velasquez Mara Villegas Naomi Quimpo Leslie Octaviano Yas Refran Cris Bernardino Layout Head| Graciello Timothy Reyes

LAW

UP LAW BAR OPERATIONS COMMISSION

LABOR

2012 UP Law Bar Reviewer

LAW

Copyright and all other relevant rights over this material are owned jointly by the University of the Philippines College of Law and the Student Editorial Team. The ownership of the work belongs to the University of the Philippines College of Law. No part of this book shall be reproduced or distributed without the consent of the University of the Philippines College of Law. All Rights reserved.

UP LAW BAR OPERATIONS COMMISSION

LABOR
Labor Law
I. Fundamental Principles and Policies ........ 6 A. Constitutional provisions ................. 6 B. Civil Code ................................... 7 C. Labor Code.................................. 8 II. Recruitment and Placement............... 9 A. Recruitment of Local and Migrant Workers ............................................ 9 TOPIC A-I. DEFINITION OF TERMS .......... 9 TOPIC A-II: ILLEGAL RECRUITMENT ...... 10 TOPIC A-III: PRE-TERMINATION OF ....... 15 CONTRACT OF MIGRANT WORKER ........ 15 TOPIC A-IV: DIRECT HIRING ............... 16 B. Regulation and Enforcement .......... 16 TOPIC B-I. DISQUALIFIED ENTITIES ....... 16 TOPIC B-II. CITIZENSHIP REQUIREMENT . 16 TOPIC B-III. CAPITALIZATION REQUIREMENT ............................... 16 TOPIC B-IV. NON-TRANSFERABILITY OF LICENSE OR AUTHORITY ................... 16 TOPIC B-V. REGISTRATION FEES AND BONDS......................................... 17 TOPIC VI. WORKERS FEES ................. 17 TOPIC B-VII. REPORTS/SUBMISSION ...... 17 TOPIC B-VIII. SUSPENSION ................. 17 TOPIC B-IX. PROHIBITED ACTIVITIES ..... 18 TOPIC X. REMITTANCE OF FOREIGN EXCHANGE EARNING ........................ 18 TOPIC B-XI. REGULATORY AND VISITORIAL POWERS OF THE LABOR SECRETARY ..... 18

III. Labor Standards .............................. 19 TOPIC I. COVERAGE ......................... 19 A. Hours of Work ............................ 20 TOPIC A-I COVERAGE/EXCLUSIONS....... 20 TOPIC A-II NORMAL HOURS OF WORK.... 21 TOPIC A-III. COMPENSABLE HOURS OF WORK ......................................... 21 TOPIC A-IV. MEAL BREAK .................. 24 TOPIC A-V. OVERTIME PAY ................ 24 TOPIC A-VI. NIGHT WORK.................. 26 B. Wages...................................... 26 TOPIC B-I. GENERAL CONCEPT............ 26 TOPIC B-II. WAGE DISTORTION ........... 27 TOPIC B-III. NON-DIMINUTION OF BENEFITS ................................................. 27 TOPIC B-IV. WORKERS PREFERENCE IN CASE OF BANKRUPTCY ..................... 28 TOPIC B-V. LABOR CODE PROVISIONS FOR WAGE PROTECTION ......................... 28 TOPIC B-VI. CRITERIA/FACTORS FOR WAGE SETTING ...................................... 30 C. Rest Day ................................... 31 D. Holidays ................................... 32

TOPIC D-I. EXCLUSIONS FROM COVERAGE ................................................. 32 TOPIC D-II REGULAR HOLIDAYS ........... 33 TOPIC D-III HOLIDAY PAY COMPUTATION 33 TOPIC D-IV. RIGHT TO HOLIDAY PAY .... 34 E. Leaves ..................................... 35 TOPIC E-1. Service Incentive Leave Pay 35 TOPIC E-II. MATERNITY LEAVE ............ 36 TOPIC E-III. PATERNITY LEAVE ............ 37 TOPIC E-IV. PARENTAL LEAVE............. 37 TOPIC E-V. LEAVES FOR VICTIMS OF VIOLENCE AGAINST WOMEN ............... 37 F. Service Charges .......................... 39 TOPIC F-I. COVERAGE ...................... 39 TOPIC F-II. EXCLUSION ..................... 39 TOPIC F-III. DISTRIBUTION ................. 39 TOPIC F-IV. INTEGRATION ................. 39 G. Thirteenth (13th) Month Pay and other bonuses .......................................... 39 TOPIC G-I. COVERAGE ...................... 40 TOPIC G-II. EXCLUSION/EXEMPTIONS FROM COVERAGE.................................... 40 TOPIC G-III. NATURE OF 13TH MONTH PAY ................................................. 40 TOPIC G-IV. 13TH MONTH PAY IN SPECIAL CASES ......................................... 40 TOPIC G-V. COMMISSIONS VIS--VIS 13TH MONTH PAY .................................. 41 TOPIC G-VI. CBA VIS--VIS 13TH MONTH PAY ............................................ 41 H. Women Workers ......................... 41 TOPIC H-I. DISCRIMINATION (ART. 135, LC) ................................................. 41 TOPIC H-II. STIPULATION AGAINSTMARRIAGE (ART. 136, LC) ....... 41 TOPIC H-III. PROHIBITED ACTS (Art. 137, LC) ............................................. 42 TOPIC H-IV. Classification of certain women workers (Art. 138, LC) ........... 43 TOPIC H-V. Anti-Sexual Harassment Act (RA 7877) ..................................... 43 I. Minor Workers (RA 7610, RA 9231) ... 44 J. Employment of Househelpers ......... 45 TOPIC J-I. Definition ....................... 45 TOPIC J-II. BENEFITS ACCORDED HOUSEHELPERS .............................. 45 TOPIC J-III. TERMINATION ................. 45 TOPIC J-IV. RELIEFS FOR UNJUST TERMINATION ................................ 46 K. Employment of Homeworkers ......... 46 TOPIC K-I. Definition ....................... 46 TOPIC K-II. RIGHTS AND BENEFITS ACCORDED HOMEWORKERS ................ 46 TOPIC K-III. CONDITIONS FOR DEDUCTION FROM HOMEWORKERS EARNINGS ........ 46 L. Apprentices and Learners .............. 47

LAW

LABOR
M. Handicapped Workers (RA 7277) Differently-abled Workers .................... 50 TOPIC M-I. DEFINITION OF HANDICAPPED WORKERS.................................... 50 TOPIC M-II. RIGHTS OF DISABLED WORKERS ................................................. 50 TOPIC M-III. PROHIBITIONS ON Discrimination Against Disabled Persons 50 TOPIC M-IV. INCENTIVES FOR EMPLOYERS ................................................. 51 IV. Termination of Employment ............... 51 A. Employer-employee relationship ..... 51 TOPIC A-I. TESTS FOR DETERMINING ER EE RELATIONSHIP ............................... 51 TOPIC A-II. PROBATIONARY EMPLOYMENT ................................................. 52 TOPIC A-III. KINDS OF EMPLOYMENT ..... 54 TOPIC A-IV. JOB CONTRACTING AND LABOR-ONLY CONTRACTING .............. 57 B. Termination of employment ........... 60 TOPIC B-I. SUBSTANTIVE DUE PROCESS . 61 TOPIC B-II. Procedural Due Process ..... 65 TOPIC B-III. RELIEFS FOR ILLEGAL DISMISSAL..................................... 67 C. Retirement Pay Law .................... 69 TOPIC C-I. Coverage ........................ 70 TOPIC C-II. Exclusions from coverage ... 70 TOPIC C-III. Components of retirement pay ............................................ 70 TOPIC C-IV. Retirement pay under RA 7641 vis--vis retirement benefits under SSS and GSIS laws ................................ 70 V. Management Prerogative .................... 70 VI. Social Legislation ............................. 72 A. SSS Law (RA 8282) ....................... 72 1. Coverage ............................... 72 B. GSIS (RA 8291) ........................... 73 1. Coverage ............................... 73 2. Exclusions from coverage ........... 73 3. Benefits ................................ 74 4. Beneficiaries .......................... 75 C. Limited Portability Law (RA 7699).... 75 D. Employees Compensation Coverage and when compensable ....................... 75 VII. Labor Relations Law ........................ 76 A. RIGHT TO SELF-ORGANIZATION ....... 76 a. Who may unionize for purposes of collective bargaining (covered employees/workers) ....................... 76 b. Right To Self-Organization: Basis ..... 78 c. Right to Self-Organization: Extent and Scope.......................................... 79

d. Worker Qualification .................... 79 d. Bargaining Unit .......................... 79 B. Right to Collective Bargaining......... 91 1. Duty to Bargain Collectively ....... 91 2. Mandatory provisions of CBA ....... 97 3. Unfair Labor Practice in Collective Bargaining ................................... 101 4. Unfair Labor Practice (ULP) ....... 102 C. Right to Peaceful Concerted Activities 105 1. Forms of Concerted Activities .... 106 2. Who may declare a strike or lockout 109 3. Requisites of a valid strike ........ 109 4. Requisites of a valid lockout ...... 111 5. Requisites for lawful picketing ... 112 6. Role of Peace Officers during Strike and Picket ........................................ 113

LAW

VIII. Procedure and Jurisdction ..............113 A. Labor Arbiter ............................ 113 B. National Labor Relations Commission (NLRC) ........................................... 114 C. Bureau of Labor Relations (BLR) Med Arbiters ......................................... 115 D. National Conciliation and Mediation Board (NCMB) .................................. 115 E. DOLE regional directors ............... 115 F. DOLE secretary.......................... 116 G. Voluntary Arbitrators .................. 116 H. Court of Appeals ........................ 117 I. Supreme Court .......................... 117 J. Prescription of Actions ................ 117

LABOR LAW REVIEWER

Labor Law

LABOR LAW I. Fundamental Principles and Policies II. Recruitment and Placement III. Labor Standards IV. Termination of Employment V. Management Prerogative VI. Social Legislation VII. Labor Relations Law VIII. Procedure and Jurisdiction

Article II, Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare. Article II, Section 20. The State recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to needed investments. Limits of Social Justice Social justice should be used only to correct an injustice. It must be founded on the recognition of the necessity of interdependence among diverse units of a society, and of the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life. As 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, 2004) Liberty of Contract/Laissez 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, it does not necessarily deprive the State of the power to interfere where the parties do not stand upon an equality, or where the public health demands that one party to the contract shall be protected against himself. (Leyte Land Transportation Co. vs. Leyte Farmers & Workers Union, 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 relied on pure market forces to govern the economy. (Employees Confederation of the Philippines vs. NWPC, 1991) 2. Article III, Secs. 1, 4, 8.

I. Fundamental Principles and Policies


A. Constitutional provisions
1. Article II, Secs. 9, 10, 11, 13, 14, 18, 20. Article II, 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. Article II, Section 10. The State shall promote social justice in all phases of national development. General definition 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. (Calalang vs. Williams, 1940) Welfare State The 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, and in the pledge of protection to labor with specific authority to regulate the relations between landowners and tenants and between labor and capital. (Alalayan vs. National Power Corporation, 1968) Article II, Section 11. The State values the dignity of every human person and guarantees full respect for human rights. Article II, 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. Article II, Section 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women and men.

Article III, 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. Due Process Due process requirements are two-fold substantive (dismissal should be for a valid and authorized cause as provided by law) and procedural (due notice and hearing). (Salaw vs. NLRC, 1991) Labor as Property Right Ones employment is a property right, and the wrongful interference therewith is an actionable wrong. (Sibal vs. Notre Dame of Greater Manila, 1990) Article III, 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

LABOR LAW REVIEWER


assemble and petition the government for redress of grievances. Article III, 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. 3. Art. XIII, Secs. 1, 2, 3, 14. Management and the Constitution: Management Function/Prerogative 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 justice in favor of labor, it is but a recognition of the inherent economic inequality between labor and management. Never should the scale be so tilted if the result is an injustice to the employer. (Phil. Geothermal Inc. vs. NLRC, 1994) This Court held that the employers right to conduct the affairs of his business, According to its own discretion and judgment, is well-recognized. An employer has a free reign and enjoys wide latitude of discretion to regulate all aspects of employment. 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, 2007) 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, 2007) This Court declared that it recognizes the exercise of management prerogatives and it often declines to interfere with the legitimate business decisions of the employer. Xxx However, as expressed in PAL v NLRC, the privilege is not absolute, but subject to exceptions. One of these exceptions is when the Secretary of Labor assumes jurisdiction over labor disputes involving industries indispensable ti the national interest under Article 263(g) of the Labor Code. (University of Immaculate Concepcion Inc v Sec of Labor, 2005) Article XIII, 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.

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. Article XIII, Section 2. The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance. Article XIII, 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 selforganization, 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. 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. (Phil. Airlines Inc. vs. NLRC, 1993)

B. Civil Code
1.Article 1700, New Civil Code Art. 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. Contracts Under the Civil Code, contracts of labor are explicitly subject to the police power of the state

LABOR LAW REVIEWER


because they are not ordinary contracts but are impressed with public interest. Inasmuch as in this particular instance the contract in 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, 1996) Liberal Construction While the terms and conditions of a CBA constitute the law between the parties, it is not however, an ordinary contract to which is applied the principles of law governing ordinary contracts. A CBA, as a labor contract within the contemplation of Article 1700 of the Civil Code of the Philippines which governs the relations between labor and capital, is not merely contractual in nature but impressed with public interest, thus, it must yield to the common good. As such, it must be construed liberally rather than narrowly and technically, and the courts must place a practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and purpose which it is intended to serve. (Cirtek Employees Labor Union-FFW v Cirtek Electronics, 2010) Fair treatment The right of an employer to dismiss an employee differs from and should not be confused with the manner in which such right is exercised. It must not be oppressive and abusive since it affects one's person and property. (General Bank and Trust Co. vs. CA, 1985) 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 Co. vs. Lariosa, 1987) Compliance with law It is also important to emphasize that the return-towork 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. (Sarmiento vs. Tuico, 1988) Employee's compliance and obedience to employer's 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 there from. 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, 1991)

C. Labor Code
1. Article 3 Art. 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. 2. Article 211 Art. 211. Declaration of Policy. A. It is the policy of the State: (a) 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; (b) To promote free trade unionism as an instrument for the enhancement of democracy and the promotion of social justice and development; (c) To foster the free and voluntary organization of a strong and united labor movement; (d) To promote the enlightenment of workers concerning their rights and obligations as union 7 members and as employees; (e) To provide an adequate administrative machinery for the expeditious settlement of labor or industrial disputes; (f) To ensure a stable but dynamic and just industrial peace; and (g) To ensure the participation of workers in decision and policy-making 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) 3. Article 212 Art. 212. Definitions. (a) "Commission" means the National Labor Relations Commission or any of its divisions, as the case may be, as provided under this Code. (b) "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. (c) "Board" means the National Conciliation and Mediation Board established under Executive Order No. 126. (d) "Council" means the Tripartite Voluntary Arbitration Advisory Council established under Executive Order No. 126, as amended.

LABOR LAW REVIEWER


(e) "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. (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 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. (g) "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. (h) "Legitimate labor organization" means any labor organization duly registered with the Department of Labor and Employment, and includes any branch or local thereof. (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. (j) "Bargaining representative" means a legitimate labor organization whether or not employed by the employer. (k) "Unfair labor practice" means any unfair labor practice as expressly defined by the Code. (l) "Labor dispute" includes any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee. (m) "Managerial employee" is one who is vested with the powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rankand-file employees for purposes of this Book. (n) "Voluntary Arbitrator" means any person accredited by the Board as such or any person named or designated in the Collective Bargaining Agreement by the parties to act as their Voluntary Arbitrator, or one chosen with or without the assistance of the National Conciliation and Mediation Board, pursuant to a selection procedure agreed upon in the Collective Bargaining Agreement, or any official that may be authorized by the Secretary of Labor and Employment to act as Voluntary Arbitrator upon the written request and agreement of the parties to a labor dispute. "Strike" means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. "Lockout" means any temporary refusal of an employer to furnish work as a result of an industrial or labor dispute. "Internal union dispute" includes all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by laws of a union, including any violation of the rights and conditions of union membership provided for in 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 self-organization 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 vicinity actually used by picketing strikers in moving to and fro before all points of entrance to and exit from said establishment.

(o) (p) (q)

(r)

(s)

4. Article 255 Art. 255. Exclusive bargaining representation and workers participation in policy and decisionmaking. 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 decisionmaking 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 labormanagement 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. (As amended by Section 22, Republic Act No. 6715, March 21, 1989)

II. Recruitment and Placement


A. Recruitment of Local and Migrant Workers
TOPIC A-I. DEFINITION OF TERMS
License vs. Authority

LABOR LAW REVIEWER


A license is a document issued by the Department of Labor and Employment (DOLE) authorizing a person or entity to operate a private employment agency, while an authority is a document issued by the DOLE authorizing a person or association to engage in recruitment and placement activities as a private recruitment agency. [Art. 13(d) and (f), Labor Code] Private employment agency v. Private recruitment agency Type Definition Requires Private Any person or entity License employment engaged in agency recruitment and placement of workers for a fee Private Any person or Authority recruitment association engaged in agency the recruitment and placement of workers, locally or overseas, without charging, directly or indirectly, any fee Recruitment and placement; defined Labor Code, Art. 13 (b): Recruitment and placement" refers to any act of (C-E-C-T-U-H) (a) canvassing, (b) enlisting, (c) contracting, (d) transporting, (e) utilizing, or (f) hiring procuring workers, And also includes (a) referrals, (b) contract services, (c) promising, or (d) 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. (a) Any of the acts mentioned above constitutes recruitment and placement. (b) The proviso provides for a presumption that a person or entity so described engages in recruitment and placement (See People v. Panis). What constitutes recruitment: 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 Article 13(b) will 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 presumed to be engaged in the act of recruitment and placement. (People v. Panis, 1988) Acts 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, 2006) Promising employment: The Court finds that accused-appellant was engaged in unlawful recruitment and placement activities. The prosecution established that accused-appellant promised three complainants employment as factory workers and he asked them for money in order to process their papers and procure their passports. Relying completely upon such representations, complainants entrusted 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 accusedappellant is not authorized nor licensed by the DOLE 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, 2000)

10

TOPIC A-II: ILLEGAL RECRUITMENT


To determine which law applies, the place of work is the determining factor: (1) If in the Philippines: Labor Code (LC) applies (2) If abroad: Migrant Workers Act (R.A. 8042, as amended by R.A. 10022). Illegal recruitment for Local Workers (Governed by the Labor Code) A. Simple Illegal Recruitment Elements: (1) The person charged with the crime must have undertaken recruitment activities defined under Art. 13(b) or prohibited activities defined under Art. 34; and (2) The said person does not have a license or authority to do so. Profit or lack thereof is immaterial In 1996, LCL had no approved POEA license to recruit. C.F. Sharps accreditation as LCLs new manning agency was still pending approval at that time. Yet it entertained applicants for LCLs vessels, and conducted preparatory interviews. Based on Art. 13 (b), this is a recruitment activity. The fact that C.F. Sharp did not receive any payment during the interviews is of no moment. 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 vs. Espanol, 2007)

LABOR LAW REVIEWER


Accused must give the impression of ability to send complainant abroad It is well-settled that to prove illegal recruitment, it must be shown that appellant gave complainants the distinct impression that she had the power or ability to send complainants abroad for work such that the latter were convinced to part with their money in order to be employed. (People v. Ochoa, 2011) Labor Code, Art. 38. Illegal Recruitment (a) Any recruitment activities, including the prohibited practices enumerated under Article 34 of this Code, to be undertaken by nonlicensees 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. Art. 34. Prohibited practices. It shall be unlawful for any individual, entity, 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, or to make a worker pay 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 this Code. (d) 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; (e) 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; (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; (g) To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized representatives; (h) 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. (i) 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; (j) 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 (k) 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.

11

B.

Offense involving Economic Sabotage (Large-Scale or by a Syndicate)

Illegal recruitment is considered economic sabotage when the commission thereof is attended by the ff. qualifying circumstances: (1) By a syndicate - if carried out by a group of 3 or more persons conspiring and confederating with one another; (2) In large scale - if committed against 3 or more persons individually or as a group. [Art. 38(b), LC] Illegal recruitment by a syndicate (1) The offender undertakes either any activity within the meaning of "recruitment and placement" defined under Article 13(b), or any of the prohibited practices enumerated under Art. 34 of the Labor Code; (2) He has no valid license or authority required by law to enable one to lawfully engage in recruitment and placement of workers; and (3) The illegal recruitment is committed by a group of three (3) or more persons conspiring or confederating with one another. (People v. Gallo, 2010) Illegal recruitment in large scale The acts committed by the accused constituted illegal recruitment in large scale, whose essential elements are the following: (1) The accused engages in acts of recruitment and placement of workers defined under Article 13(b) of the Labor Code or in any prohibited activities under Article 43 of the Labor Code; (2) The accused has not complied with the guidelines issued by the Secretary of Labor and Employment, particularly with respect to the securing of license or an authority to recruit and deploy workers, either locally or overseas; and (3) The accused commits the unlawful acts against three or more persons individually or as a group. Labor Code, Art. 39 (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.

LABOR LAW REVIEWER


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. Three or more complainants must be in a single case 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 cumulated 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. (People vs. Reyes, 1995) Illegal recruitment is different from estafa 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 illegal recruitment may, in addition, be convicted of estafa by false pretenses or fraudulent acts under Article 315, paragraph 2(a) of the Revised Penal Code. In the same manner, a person acquitted of illegal recruitment may be held liable for estafa. Double jeopardy will not set in because illegal recruitment is malum prohibitum, in which there is no necessity to prove criminal intent, whereas estafa is malum in se, in the prosecution of which, proof of criminal intent is necessary. (Rosita Sy vs. People of the Philippines, 2010) One convicted for IR may still be convicted of estafa In People v. Cortez the Court explained that: In this jurisdiction, it is settled that a person who commits illegal recruitment may be charged and convicted separately of illegal recruitment under the Labor Code and estafa under par. 2(a) of Art. 315 of the Revised Penal Code. The offense of illegal recruitment is malum prohibitum where the criminal intent of the accused is not necessary for conviction, while estafa is malum in se where the criminal intent of the accused is crucial for conviction. Conviction for offenses under the Labor Code does not bar conviction for offenses punishable by other laws. Conversely, conviction for estafa under par. 2(a) of Art. 315 of the Revised Penal Code does not bar a conviction for illegal recruitment under the Labor Code. It follows that one's acquittal of the crime of estafa will not necessarily result in his acquittal of the crime of illegal recruitment in large scale, and vice versa. (People v. Ochoa, 2011; People v. Ocden, 2011) Illegal recruitment for Migrant Workers (Governed by R.A. 8042, as amended by, R.A. 10022) A. Simple Illegal Recruitment 1st type: (1) Person charged undertakes any recruitment activity as defined in Art.13 (b) of the Labor Code; and (2) Said person does not have a license or authority to do so. 2nd type: (1) Person charged commits any of the enumerated acts under Sec. 6 of R.A. 8042, as amended by, R.A. 10022. (2) It is immaterial whether he is a holder or not of any license or authority SEC. 6. Definition. - 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 non-licensee 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: (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;

12

LABOR LAW REVIEWER


(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; (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. Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage; and (n) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning agency. 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. In addition to the acts enumerated above, 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 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. 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. In the filing of cases for illegal recruitment or any of the prohibited acts under this section, the Secretary of Labor and Employment, the POEA Administrator or their duly authorized representatives, or any aggrieved person may initiate the corresponding criminal action with the appropriate office. For this purpose, the affidavits and testimonies of operatives or personnel from the Department of Labor and Employment, POEA and other law enforcement agencies who witnessed the acts constituting the offense shall be sufficient to prosecute the accused. In the prosecution of offenses punishable under this section, the public prosecutors of the Department of Justice shall collaborate with the anti-illegal recruitment branch of the POEA and, in certain

13

LABOR LAW REVIEWER


cases, allow the POEA lawyers to take the lead in the prosecution. The POEA lawyers who act as prosecutors in such cases shall be entitled to receive additional allowances as may be determined by the POEA Administrator. The filing of an offense punishable under this Act shall be without prejudice to the filing of cases punishable under other existing laws, rules or regulations. MWA expands the definition of illegal recruitment The amendments to the Labor Code introduced by Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, broadened the concept of illegal recruitment and provided stiffer penalties, especially for those that constitute economic sabotage. (People v. Ocden, 2011)
Law Applicability Acts Punishable Who can be punished

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; (c) 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; (d) 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. B. Illegal Recruitment Involving Migrant Workers

14

Labor Code

Local Workers

Art. 13(b) Art. 34

Nonlicensee Nonlicensee Nonlicensee Licensee/No n-licensee

RA 8042 as amend ed by RA 10022

Migrant Workers

Art. 13(b) Labor Code Enumerated prohibited acts in Section 6

B.

Offense involving Economic Sabotage (Large-Scale or by a Syndicate)

Liabilities and Penalties for Illegal Recruitment A. Illegal Recruitment Involving Workers Local

RA 8042, Sec. 6 (as amended by RA 10022) (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.

Labor Code, Art. 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; (a) 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; (b) 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

LABOR LAW REVIEWER


Common Rules on Liability (1) Employees of a company 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. E.g. 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 Sec. 6 of RA 8042. The terms control, management or direction broadly cover all phases of business operation, including the aspects of administration, marketing and finances, among others. (People vs. Sagayaga, 2004). (2) Local Employment Agency is solidarily liable with foreign principal. Severance of relations between local agent and foreign principal does not affect liability of local recruiter. Private employment agencies are held jointly and severally liable with the foreign-based employer for any violation of the recruitment agreement or contract of employment. This joint and solidary liability imposed by law against recruitment agencies and foreign employers is meant to assure the aggrieved worker of immediate and sufficient payment of what is due him. (Becmen Service Exporter and Promotion, Inc. v. Spouses Cuaresma, G.R. 182978-79, April 7, 2009) (3) 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. (Becmen Service Exporter and Promotion, Inc. v. Spouses Cuaresma, G.R. 182978-79, April 7, 2009) (4) Foreign employer shall assume joint and solidary liability with the employer for all claims and liabilities which may arise in connection with the implementation of the contract, including but not limited to payment of wages, death and disability compensation and repatriation Joint and Several Liability of Agent and Principal, POEA Rules, Book II, Rule II, Sec. 1 (f) Sec. 1. Requirements for Issuance of License.- Every applicant for license to operate a private employment agency or manning agency shall submit a written application together with the following requirements: f. A verified undertaking stating that the applicant: xxx (2) Shall assume full and complete responsibility for all claims and liabilities which may arise in connection with the use of license; (3) Shall assume joint and solidary liability with the employer for all claims and liabilities which may arise in connection with the implementation of the contract, including but not limited to payment of wages, death and disability compensation and repatriation; (4) Shall guarantee compliance with the existing labor and social legislations of the Philippines and of the country of employment of recruited workers; and (5) Shall assume full and complete responsibility for all acts of its officials, employees and representatives done in connection with recruitment and placement; (5) Theory of imputed knowledge - This is a doctrine in agency which states that the principal is chargeable with and bound by the knowledge of or notice to his agent received while the agent was acting as such. Simply put, notice to the agent is notice to the principal. Since the local employment agency is considered the agent of the foreign employer, 11 the principal, knowledge of the former of existing labor and social legislation in the Philippines is binding on the latter. Consequently, notice to the former of any violation thereof is notice to the latter. Common Rules on Illegal Recruitment (Local or Overseas) Venue: A criminal action arising from illegal recruitment shall be filed with the RTC of the province or city: (1) where the offense was committed or (2) where the offended party actually resides at the time of the commission of the offense. (Sec. 9, R.A. 8042 [this part was not amended by R.A. 10022]). Prescriptive Periods: (1) Simple Illegal Recruitment 5 years (2) Illegal Recruitment involving Economic Sabotage 20 years. (Sec. 12, R.A. 8042 [this part was not amended by R.A, 10022]).

15

TOPIC A-III: PRE-TERMINATION OF CONTRACT OF MIGRANT WORKER


Sec. 10, R.A. 8042, as amended by R.A. 10022. 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 employeremployee 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. xxx xxx xxx 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

LABOR LAW REVIEWER


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. Rule before Serrano: 3-month salary rule applies The employment contract involved in the instant case covers a two-year period but the overseas contract worker actually worked for only 26 days prior to his illegal dismissal. Thus, the three months salary rule applies (Flourish Maritime Shipping v. Almanzor, G.R. No. 177948, March 14, 2008). Serrano ruling: invalidated the 3-month salary cap The issue in this case is the constitutionality of the last clause of Sec.10 of RA 8042: Sec. 10. Money Claims. - x x x In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of 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. Court held that said clause is unconstitutional for being an invalid classification, in violation of the equal protection clause. (Serrano v. Gallant Maritime Services, Inc., G.R. No. 167614, March 24, 2009) (1) Travel agencies and sales agencies of airline companies. (Art. 26) (2) Officers or members of the Board of any corporation or members in partnership engaged in the business of a travel agency. (3) Corporations and partnerships, when any of its officers, members of the board or partners, is also an officer, member of the board of partner of a corporation or partnership engaged in the business of a travel agency. (4) Persons, partnerships or corporations which have derogatory records. (5) Any official or employee of the DOLE, POEA, OWWA, DFA and other government agencies directly involved in the implementation of R.A. 8042 as amended and/or any of his/her relatives within the 4th civil degree of consanguinity and affinity. (POEA Rules of 2002).

16

TOPIC B-II. CITIZENSHIP REQUIREMENT


Labor Code, Art. 27. (1) Only Filipino citizens or (2) 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. SEE: POEA Rules, Part II, Rule I, Sec. 1(a)

TOPIC A-IV: DIRECT HIRING


General Rule: No employer may hire a Filipino worker for overseas employment except through the Boards and entities authorized by the Secretary of Labor. (Article 18 of the Labor Code). Exceptions: (1) Members of the diplomatic corps; (2) International organizations; (3) Such other employees as may be allowed by the Sec. of Labor; (4) Name hirees those individuals who are able to secure contracts for overseas employment on their own efforts and representation without the assistance or participation of any agency. Their, hiring nonetheless, has to be processed through the POEA. (Part III, Rule III of the POEA Rules Governing Overseas Employment as amended in 2002)

TOPIC B-III. CAPITALIZATION REQUIREMENT


Labor Code, Art. 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. Based on POEA Rules the following are the substantial capital requirements: (1) Single proprietorships or partnerships with minimum capitalization of P2,000,000. (2) Corporations with minimum paid-up capital of P2,000,000.

TOPIC B-IV. NON-TRANSFERABILITY OF LICENSE OR AUTHORITY


Labor Code, Art. 29. (1) No license or authority shall be used directly or indirectly by any person other than the one in whose favor it was issued or at any place other than that stated in the license or authority, (2) Nor may such license or authority be transferred, conveyed, or assigned to any other person or entity. Any transfer of business address, appointment or designation of any agent or representative including the establishment of additional offices anywhere shall be subject to the prior approval of the Department of Labor. SEE: POEA Rules Part II, Rule II, Sec. 7, 8, and 9.

B. Regulation and Enforcement


NOTE: See also 2002 POEA Rules Governing the Recruitment and Employment of Land-based Overseas Workers

TOPIC B-I. DISQUALIFIED ENTITIES


The following are disqualified from being issued a license:

LABOR LAW REVIEWER


License is a document issued by the DOLE authorizing a person or entity to operate a private employment agency. Authority is a document by the DOLE authorizing a person or association to engage in recruitment and placement activities as private recruitment entity. License Authorize an entity to operate as a private employment agency When a license is given, one is also authorized to collect fees Authority Authorize an entity to operate as a private recruitment entity Does not entitle a private recruitment entity to collect fees. SEE: POEA Rules, Part II, Rule V., Sec. 3 Chargeable Fees The POEA Rules provides that: unless otherwise provided, the principal shall be responsible for the payment of the following: (1) visa fee (2) airfare (3) POEA processing fee (4) OWWA membership fee (Sec. 2, POEA Rules of 2002) Except where the prevailing system in the country where the worker is to be deployed, either by law, policy or practice, does 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 the amount equivalent to one month salary, exclusive of documentation costs. (Part I, Rule V, Sec. 3 of POEA Rules of 2002). Note however, that such fees shall be collected from the hired workers only after he has obtained employment through the facilities of the recruitment agency. (Part I, Rule V, Sec. 2 of POEA Rules of 2002). Refund of Fees - POEA has the power to order refund of illegally collected fees. Implicit in its power to regulate the recruitment and placement activities of all agencies is the award of appropriate relief to the victims of the offenses committed by the respondent agency or contractor. (Eastern Assurance and Surety Corp. v. Secretary of Labor, et. al., G.R. No. 79436-50, January 17, 1990).

17

Enforceability of the license - Licensed agencies are prohibited from conducting any 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. (People vs. Buli-e, 2003) Duration of Validity 4 years (POEA Rules of 2002)

TOPIC B-V. REGISTRATION FEES AND BONDS


Labor Code, Art. 30: The Secretary of Labor shall promulgate a schedule of fees for the registration of all applicants for license or authority. SEE: POEA Rules, Part II, Rule II, Sec. 4 Labor Code, Art. 31: 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. SEE: POEA Rules, Part II, Rule II, Sec. 4 The POEA possesses the power to enforce liability under the cash or surety bonds. To compel the POEA to go to the Insurance Commissioner and to the regular courts of law to enforce the bond would be to collide with the public policy which requires prompt resolutions of claims against private recruitment and placement agencies. (Finaman General Assurance v. Innocencio, G.R. No. 90273-75, Nov. 15, 1989).

TOPIC B-VII. REPORTS/SUBMISSION


Labor Code, Art. 33: Whenever the public interest so requires, the Secretary of Labor and Employment 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. Labor Code, Art. 14: The Secretary of Labor shall have the power and authority: (d) To require any person, establishment, organization or institution to submit such employment information as may be prescribed by the Secretary of Labor.

TOPIC B-VIII. SUSPENSION


Labor Code, Art. 35: The Secretary 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 Department of Labor, the Overseas Employment Development Board, and the National Seamen Board, or for violation of the provisions of this and other applicable laws, General Orders and Letters of Instructions. The acts prohibited under Article 34 are grounds for suspension or cancellation of license. Note that they

TOPIC VI. WORKERS FEES


Labor Code, Art. 32: 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.

LABOR LAW REVIEWER


likewise constitute illegal recruitment under R.A. 8042 as amended by R.A. 10022. Who can suspend or cancel the license? (1) DOLE Secretary (2) POEA Administrator The power to suspend or cancel any license or authority to recruit employees for overseas employment is concurrently vested with the POEA and the Secretary of Labor. (People v. Diaz, 259 SCRA 441 [1996]). those authorized under this Code and its implementing rules and regulations.

TOPIC X. REMITTANCE OF FOREIGN EXCHANGE EARNING


It shall be mandatory for all Filipino workers abroad to remit a portion of their foreign earnings to their families, dependents, and/or beneficiaries in the country (Art. 22, LC) Under Executive Order No. 857, the amount of ones salary required to be remitted depends on the type or nature of work performed by the employee. The following are the percentages of foreign exchange remittance required from various kinds of migrant workers: (1) Seaman or mariner 80% of their basic salary (2) Workers for Filipino contractors and construction companies 70% (3) Doctors, engineers, teachers, nurses and other professional workers whose contract provide for free board and lodging 70% (4) All other professional workers whose employment contracts do not provide for free board and lodging facilities 50% (5) Domestic and other service workers 50% (6) All other workers not falling under the aforementioned categories 50% (7) Performing artists 50% The following individuals, however, are exempted from the mandatory remittance requirement: (1) The immediate family members, dependents or beneficiaries of migrant workers residing with the latter abroad; (2) Filipino servicemen working within US military installations; (3) Immigrants and Filipino professionals working with the United Nations and its agencies or other specialized bodies.

18

TOPIC B-IX. PROHIBITED ACTIVITIES


Art. 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; (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

TOPIC B-XI. REGULATORY AND VISITORIAL POWERS OF THE LABOR SECRETARY


Regulatory power SEE: Labor Code, Art. 35 Labor Code, Art. 36: 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. Visitorial power SEE: Art. 35 Labor Code, Art. 37: 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 violations of any provisions of this Title.

LABOR LAW REVIEWER

III. Labor Standards


TOPIC I. COVERAGE
General rule Labor Code, Art. 82. The provisions of this Title shall apply to employees in all establishments and undertakings whether for profit or not. xxx Exceptions (NOT Covered): (1) Government employees (Art. 82; Art. 76) (2) Managerial Employees including members of the managerial staff (Art. 82) (3) Field Personnel (Art. 82) (4) Members of the family of the employer who are dependent on him on support (Art. 82); (5) Domestic helpers and persons in personal service of another (Art. 141) (6) Workers who paid by result as determined by DOLE regulation (Art. 82). 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. SEE ALSO: IRR of Labor Code, BK. III, Rule I, Sec. 1-2 (a) Government employees Art. 76: 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. IRR Bk. III Rule I Sec 2a: Exemption. The provisions of this Rule shall not apply to the following persons if they qualify for exemption under the conditions set forth herein: a. Government employees whether employed by the National Government or any of its political subdivisions, including those employed in government-owned and/or controlled corporations xxx Government employees are governed by the Civil Service rules and regulations, not by the Labor Code, particularly on employment conditions. But this exclusion DOES NOT refer to employees of government agencies and government corporations that are incorporated under the Corporation Code. (b) Managerial employees Art. 82: "Managerial Employees" 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. IRR, Bk III, Rule 1, Sec. 2 (b) & (c): Exemption. 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 are covered (by the exemption) if they have the following characteristics: (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) (a)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 (b) execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or (c) execute, under general supervision, special assignments and tasks; and (4) Who do not devote more than 20 percent of their hours worked in a work week to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2) and (3) above. The definition of managerial employees in Article 82 covers more people than that in Article 212 (m) as Article 82 also includes managerial staff. In effect, managerial employees in Article 82 includes supervisors, but Article 212(m) does not. It follows that under Book V, supervisors are allowed to form, join or assist a labor union. Supervisors are not, however, entitled to the benefits under Book III Articles 83 through 96, being part of the exemption of managerial employees as defined in Article 82. (Azucena) (c) Field personnel Art. 82: xxx "Field personnel" shall refer to nonagricultural 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. Field Personnel are those whose performance of their job/service is not supervised by the employer or his representative, the workplace being away from the principal office and whose hours and days

19

LABOR LAW REVIEWER


of work cannot be determined with reasonable certainty. Legal Test: Field personnel The clause "whose time and performance is unsupervised by the employer" did not amplify but merely interpreted and expounded the clause "whose actual hours of work in the field 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 deciding whether or not an EE's actual working hours in the field can be determined with reasonable certainty, query must be made as to whether or not such EE's time and performance is constantly supervised by the employer. (Union of Filipro Employees v. Vivar, 1992) Actual hours work in the field is to be read in conjunction with Rule IV, Book III of the Implementing Rules. Therefore field personnel are EEs whose time and performance is unsupervised by the employer. (Salazar v. NLRC, 1996) 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 principal office of EE. (Auto Bus Transport Systems, Inc. v. Bautista, 2005) The fishermen, although performing non-agricultural work away from petitioners business offices, the fact remains that throughout the duration of their work they are under the effective control and supervision of petitioner through the vessels patron or master. Hence, the fishermen are not field personnel. (Mercidar Fishing Corporation v. NLRC, 1998) (d) Dependent family members 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. Workers who are family members of the employer, and who are dependent on him for their support, are outside the coverage of this Title on working conditions and rest periods. (e) Domestic helpers Art. 141. "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. (f) Persons in personal service of another Bk III, Rule 1, Sec. 2(d) of the IRR: Exemption. The provisions of this Rule shall not apply to the following persons if they qualify for exemption under the conditions set forth herein: xxx Domestic servants and persons in the personal service of another if they perform such services in the employers 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 employers household. Exclusivity of function required Note that the definition contemplates a domestic servant who is employed in the employers home to minister exclusively to the personal comfort and enjoyment of the employers family. (Azucena) Thus, it has been held that the following personnel are NOT domestic employees: (1) House personnel hired by a ranking company official but paid by the company itself to maintain a staff house provided for the official. (Cadiz v. Philippine Sinter Corp, NLRC Case No. 7-1729, cited by Azucena) (2) A family cook, who is later assigned to work as a watcher and cleaner of the employers business establishment, becomes an industrial worker entitled to receive the wages and benefits flowing from such status. (Villa v. Zaragosa and Associates, OP Decision No. 0183, cited by Azucena). (g) Workers Paid by Result Bk III, Rule 1, Sec. 2(e) of the IRR: Exemption. The provisions of this Rule shall not apply to the following persons if they qualify for exemption under the conditions set forth herein: Workers who are paid by results, including those who are paid on piece-work, takay, pakiao or task basis, and other non-time work if their output rates are in accordance with the standards prescribed under Section 8, Rule VII, Book Three of these regulations, or where such rates have been fixed by the Secretary of Labor and Employment in accordance with the aforesaid Section. Philosophy underlying the exclusion of piece workers from the 8-hour 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., v. CIR, 1966)

20

A. Hours of Work
TOPIC A-I COVERAGE/EXCLUSIONS
NOTE: Please see previous section (Coverage) which deals with the general rules of coverage and exclusions for the applicability of the Conditions of Employment provisions in Book III of the Labor Code.

LABOR LAW REVIEWER


TOPIC A-II NORMAL HOURS OF WORK
General Rule: 8-Hour Labor Law Art. 83: The normal hours of work of any employee shall not exceed eight (8) hours a day. The law prescribes a maximum and not a minimum. Thus, part-time work, or a days work less than eight hours, is not prohibited. Exception to the 8-Hour Law: Work Hours of Health Personnel Art. 38: 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. Note: Medical secretaries are also considered clinic personnel. (Azucena) 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. (4) The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered working time either: a. if the imminence of the resumption of work requires the employees presence at the place of work, or b. if the interval is too brief to be utilized effectively and gainfully in the employees own interest. Rest period short duration or coffee break Art. 84, par. 2: Rest periods of short duration during working hours shall be counted as hours worked. IRR Book III, Rule 1, Sec. 7, par. 2: Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time. Preliminary and Postliminary Activities Preliminary (before work) and postliminary (after work) activities are deemed performed during working hours if such activities are controlled or required by the employer and are pursued necessarily and primarily for the employers benefit. Rest period IRR Sec 4 (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. Continuous work The provision of section 1 of Commonwealth Act No. 444, which states that "when the work is not continuous, the time during which the laborer is not working and can leave his working place and can rest completely shall not be counted", finds no application in the present case, where the laborer's work is continuous, and during the time that he is not working he cannot leave and completely rest owing to the place and nature of his work. (State Marine Corporation v. Cebu Seamens Association, 1963) On call IRR, Book III, Rule 1, Sec. 5(b): An employee who is required to remain on call in the employers 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.

21

TOPIC A-III. COMPENSABLE HOURS OF WORK


Art. 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. General principles in determining if time is considered as hours worked According to Book III, Rule 1, Sec. 4, the following principles shall govern in determining whether the time spent by an employee is considered hours worked for purposes of this Rule: (1) 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. (2) 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. (3) 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

LABOR LAW REVIEWER


Inactive due to work interruptions IRR, Book III, Rule 1, Sec. 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. Work interruption due to brownouts Brownouts of short duration, but not exceeding 20 minutes, shall be treated as hours worked, whether used productively by the employees or not. If they last more than 20 minutes, the time may not be treated as hours worked if 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. In this case, the employer may extend the working hours beyond the regular schedule on that day to compensate for the loss of productive man-hours without being liable for overtime pay. (Policy Instruction No. 36, May 22, 1978) Note: The time during which an employee is inactive by reason of work interruptions beyond his control is considered working time, either if the imminence of the resumption of work requires the employees presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the employees own interest. (Book III, Rule 1 Sec. 4-c OR Work after normal hours IRR, Book III, Rule 1, Sec. 4(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 the time spent for such work shall be considered as hours worked if the work was with the knowledge of his employer or immediate supervisor. Lectures, meetings, trainings IRR, Book III, Rule 1, Sec. 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: (1) Attendance is outside of the employees regular working hours; (2) Attendance is in fact voluntary; and (3) The employee does not perform any productive work during such attendance. Note: (1) Attendance in lectures, meetings, and training periods sanctioned by the employer are considered hours worked. (2) Attendance in CBA negotiations or grievance meeting is compensable hours worked. (3) Attendance in hearings in cases filed by the employee is NOT compensable hours worked. (4) Participation in strikes is NOT compensable working time. Compressed Work Week (CWW) NOTE: SEE DOLE Advisory No. 02, Series of 2004 Under the CWW scheme, the normal workday goes beyond eight hours without the corresponding overtime premium. The total hours of work, however, shall not exceed 12 hours a day or 48 hours a week, or the employer is obliged to pay the worker the overtime premium in excess of said work hours. Conditions for CWW (1) The CWW scheme is undertaken as a result of an express and voluntary agreement of 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. (2) In firms using substances, chemicals and processes or operating under conditions where there are airborne contaminants, human carcinogens or noise prolonged exposure to which may pose hazards to employees health and safety, there must be a certification from an accredited health and safety organization or practitioner from the firms safety committee that work beyond eight hours is within threshold limits or tolerable levels of exposure, as set in the OSHS. (3) The employer shall notify DOLE, through the Regional Office having jurisdiction over the workplace, of the adoption of the CWW scheme. The notice shall be in DOLE CWW Report Form attached to this Advisory. (DOLE Advisory No. 02-04). Effects of CWW (1) Unless there is a more favorable practice existing in the firm, work beyond eight hours will not be compensable by overtime premium provided the total number of hours worked per day shall not exceed twelve (12) hours. In any case, any work performed beyond 12 hours a day or 48 hours a week shall be subject to overtime premium. (2) Consistent with Art. 85 of the LC, employees under a CWW scheme are entitled to meal periods of not less than 60 minutes. There shall be no impairment of the right of the employees to rest days as well as to holiday pay, rest day pay or leaves in accordance with law or applicable collective bargaining agreement or company practice. (3) Adoption of the CWW scheme shall in no case result in diminution of existing benefits. Reversion to the normal eight-hour

22

LABOR LAW REVIEWER


workday shall not constitute a diminution of benefits. 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 & dining which he may leave the spot or place of work though not the premises of his employer, is not counted as working time only where the work is broken or is not continuous. (National Development Co. v. CIR, 1962) 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. v. Luzon Marine Department Union, 1957) Waiting time IRR, Book III, Rule 1, Sec. 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. (1) Waiting time spent by the 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. (2) An employee who is required to remain on call in the employers 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. (Sec. 5, Rule I, Book III, Labor Code Implementing Rules and Regulation) Legal test: Whether waiting time constitutes working time depends upon the circumstances of each particular case. The facts may show that the employer was engaged or was waiting to be engaged. The controlling factor is whether waiting time spent in idleness is so spent predominantly for the employers benefit or for the employees. (Azucena citing Armour v. Wantock,) Travel time (1) Travel from home to work An employee who travels from home before his regular workday and returns to his home at the end of the workday is engaged in ordinary home-to-work travel which is NOT worktime except: a. When called to travel during emergency; b. When travel is done through a conveyance furnished by the employer; c. Travel is done under vexing and dangerous circumstances; d. Travel is done under the supervision and control of the employer.

(2) Travel that is all in the days work Time spent by an employee in travel from jobsite to jobsite during the workday, must be counted as hours worked. Where an employee is required to report at a meeting place to receive instructions or to perform other work there, the travel from the designated place to the workplace is part of the days work. (3) Travel away from home - Travel that keeps an employee away from home overnight is travel away from home. Travel away from home is worktime when it cuts across the employees workday. The time is hours worked not only on regular working hours but also during the corresponding hours on non-working days. (Department of Labor Manual). Semestral Break of Private School Teachers Regular full-time teachers are entitled to salary during semestral breaks. These semestral breaks are in the nature of work interruptions beyond the employees control. As such, these breaks cannot be considered as absences within the meaning of the law for which deductions may be made from monthly allowances. (University of the Pangasinan Faculty Union v. University of Pangasinan, No. L-63122, Feb. 20, 1984). Work Hours of Seamen Seamean are required to stay on board of their vessels by the very nature of their duties, and it is for this reason that, in addition to their regular compensation, they are given free living quarters to be on board. It could not have been the purpose of the law to require their employers to pay them overtime pay even when they are not actually working. The correct criterion in determining whether or not sailors are entitled to overtime pay is not, therefore, whether they are on board and cannot leave ship beyond the regular eight working number of hours, but whether they actually rendered service in excess of said number of hours. (Cagampan, et. al. v. NLRC, G.R. Nos. 85122-24, March 2, 1991). Hours worked: Proof of work 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 v. NLRC, 1998) Hours worked: Burden of Evidence When an employer alleges that his employee works less than the normal hours of employment as provided for in the law, he bears the burden of proving his allegation with clear and satisfactory evidence. (Prangan v. NLRC, et. al., G.R. No. 126529, April 15, 1998).

23

LABOR LAW REVIEWER


Conditions for shortened meal breaks upon employees request. (1) The employees voluntarily agree in writing to a shortened meal period of 30 minutes and are willing to waive the overtime pay for such shortened meal period; (2) There will be no diminution whatsoever in the salary and other fringe benefits of the employees existing before the effectivity of the shortened meal period; (3) The work of the employees does not involve strenuous physical exertion and they are provided with adequate coffee breaks in the morning and afternoon. (4) The value of the benefits derived by the employees from the proposed work arrangement is equal to or commensurate with the compensation due them for the shortened meal period as well as the overtime pay for 30 minutes as determined by the employees concerned; (5) The overtime pay of the employees will become due and demandable if ever they are permitted or made beyond 4:30pm; and (6) The effectivity of the proposed working time arrangement shall be of temporary duration as determined by the Secretary of Labor. Jurisprudence: (1) 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 v. Pan-American Employees Association, 1961) (2) The eight-hour work period does not include the meal break. Employees are not prohibited from going out of the premises as long as they return to their posts on time. (Phil. Airlines, Inc. v. NLRC, 1999)

TOPIC A-IV. MEAL BREAK


Regular meal Art. 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. IRR, Book III, Rule 1, Sec. 7: Every employer shall give his employees, regardless of sex, not less than one (1) hour time-off for regular meals, Shorter meal period when allowed (less than 1 hour, but not less than 20 min) IRR, Book III, Rule 1, Sec. 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: (1) Where the work is non-manual work in nature or does not involve strenuous physical exertion; (2) Where the establishment regularly operates not less than sixteen (16) hours a day; (3) 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 (4) Where the work is necessary to prevent serious loss of perishable goods. Synthesis of the Rules General Rule: Meal periods are NOT compensable. Exception: It becomes compensable: (1) Where the lunch period or meal time is predominantly spent for the employers benefit. (Azucena citing 31 Am. Jur. 881; Duka, Labor Laws and Social Legislation) (2) Meal periods of 1 hour is deemed compensable when the employee is on continuous shift. (National Development Co. v. CIR, G.R. No. L-15422, Nov. 30, 1962). (3) Shortened meal period of less than 1 hour (say, 30 minutes) must be compensable. (Sec. 7, Rule I, Book III of the IRR). Note: To shorten meal time to less than 20 minutes is not allowed. If the so-called meal time is less than 20 minutes, it becomes only a REST PERIOD and is considered working time. Exception to the Exemption: Shortened meal breaks upon the employees request NOT compensable. The employees themselves may request that the meal period be shortened so that they can leave work earlier than the previously established schedule. (Drilon: Letter to Kodak Philippines, Nov. 27, 1989; also Cilindro: BWC-WHSD Opinion No. 197, s. 1998).

24

TOPIC A-V. OVERTIME PAY


NOTE: SEE ALSO: IRR of Labor Code, Sec. 7-10 Definition Overtime compensation is additional pay for service or work rendered or performed in excess of eight hours a day by employees or laborers covered by the Eight-hour Labor Law. (National Shipyard and Steel Corp. v. CIR, 1961). Rationale There can be no other reason than that he is made to work longer than what is commensurate with his agreed compensation for the staturily fixed or voluntary agreed hours of labor he is supposed to do. (PNB v. PEMA, 1982). Overtime on ordinary working day 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

LABOR LAW REVIEWER


additional compensation equivalent to his regular wage plus at least twenty-five percent (25%) thereof. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof. Art. 90. Computation of additional compensation. For purposes of computing overtime and other additional remuneration as required by this Chapter, the "regular wage" of an employee shall include the cash wage only, without deduction on account of facilities provided by the employer. Emergency or overtime Art. 89: Any employee may be required by the employer to perform overtime work in any of the following cases: (1) When the country is at war or when any other national or local emergency has been declared by the National Assembly or the Chief Executive; (2) When it is necessary to prevent loss of life or property or in case of imminent danger to public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity; (3) When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer or some other cause of similar nature; (4) When the work is necessary to prevent loss or damage to perishable goods; and (5) Where the completion or continuation of the work started before the eighth hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer. Overtime pay does not preclude night differential pay When the tour of duty of a laborer falls at nighttime [between 10:00pm and 6:00am], the receipt of overtime pay will not preclude the right to night differential pay. The latter is payment for work done during the night while the other is payment for the excess of the regular eight-hour work. (Naric v. Naric Workers Union, 1959). Overtime Rate based on Regular Wage Base of Computation: Regular wage or means regular base pay; it excludes money received in different concepts such as Christmas bonus and other fringe benefits. (Bisig ng Manggagawa ng Philippine Refining Co. v. Philippine Refining Co, G.R. No. L-27761, Sept. 30, 1981). BUT when the overtime work was performed on the employees rest day or on special days or regular holidays (Art. 93 and 94), the premium pay, must be included in the computation of the overtime pay. (See p. 19 of Handbook on Workers Statutory Monetary Benefits, issued by the Bureau of Working Conditions, 2006). Synthesis of Rules (1) Demandable only if the employer had knowledge and consented to the overtime work rendered by the employee. Exception: Express approval by a superior NOT a requisite to make overtime compensable: a. If the work performed is necessary, or that it benefited the company; or b. That the employee could not abandon his work at the end of his eight-hour work because there was no substitute ready to take his place. (Manila Railroad Co. v. CIR, G.R. No. L-4614, July 31, 1952). Note: However, the Court has also ruled that a claim for overtime pay is NOT justified in the absence of a written authority to render overtime after office hours during Sundays and holidays. (Global Incorporated v. Atienza) (2) Compensation for work rendered in excess of the eight (8) normal working hours in a day. a. b. For ordinary days, additional 25% of the basic hourly rate. For rest day/special day/holiday, additional 30% of the basic hourly rate.

25

(3) Not unless a day is a rest day, the given day is considered an ordinary day. (4) Undertime does NOT offset overtime Art. 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. Jurisprudence: (1) NO Waiver of overtime pay - The right to overtime pay cannot be waived. Labor Code (Art. 87) requires that an employee be paid all overtime compensation notwithstanding any 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. (Cruz v. Yee Sing, G.R. No. L-12046. Oct. 1959). Exception: When the waiver of overtime pay is in consideration of benefits and privileges which may be more than what will accrue to them in overtime pay, the waiver MAY be permitted. (Meralco Workers Union v. MERALCo, G.R. No. L11876, May 29, 1959) (2) Composite or Package Pay NOT per se illegal

LABOR LAW REVIEWER


Composite or package pay or all-inclusive salary is an arrangement where the employees salary includes the overtime pay. In other words, the overtime pay is built-in. The conditions for validity of the arrangement are: a. There is a clear written agreement knowingly and freely entered by the employee; and b. The mathematical result shows that the agreed legal wage rate and the overtime pay, computed separately, are equal to or higher than the separate amounts legally due. (Damasco v. NLRC, G.R. No. 115755, December 4, 2000). 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. No work no pay principle GENERAL RULE: a fair days wage for a fair days labor or no work no pay 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 (2009) and Aklan Electric Cooperative, Inc. vs. NLRC (2000) Equal Work for Equal Pay Principle Employees working in the Philippines, if they are performing similar functions and responsibilities under similar working conditions should be paid equally. If an employer accords employees the same position and rank, the presumption is that these employees perform equal work. (International School Alliance of Educators v. Hon. Quisumbing, G.R. No. 128845, June 1, 2000). Coverage/Exclusions The Labor Code Title on wages shall not apply to the following: (Art. 98 and BOOK 3, RULE VII, Sec 3 of the IRR) (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). Facilities v. supplements The distinction between facilities and supplement is relevant because the former are wage-deductible while the latter is not. Simply put, a wage includes facilities. (Art. 97) The IRR definition (IRR Book III Rule 7-A Sec. 5) has 2 components: (1) Facilities are articles or services for the benefit of the employee or his family. This 1st part defines facilities. (2) Facilities shall not include tools of the trade or articles or service primarily for the benefit of the employer or necessary to the conduct of the employers business. This 2nd part is essentially defines what a supplement. Criterion: In determining whether a privilege is a

26

TOPIC A-VI. NIGHT WORK


Art. 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. NOTE: SEE IRR of Labor Code, Book III, Rule II, Sec. 1-6 IRR SEC. 1 This Rule (On night shift differential) covers all employees except: (1) Those of the government and any of its political subdivisions, including government-owned and/or controlled corporations; (2) Those of retail and service establishments regularly employing not more than five (5) workers; (3) Domestic helpers and persons in the personal service of another; (4) Managerial employees as defined in Book Three of this Code; 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.

B. Wages
TOPIC B-I. GENERAL CONCEPT
Definition Art. 97(f) (1) It is 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

LABOR LAW REVIEWER


facility, the criterion is not so much its kind but its PURPOSE (Millares v NLRC & PICOP, 1999). Facilities are items of expense necessary for the laborers and his familys existence and subsistence. (States Marine Corp. v. Cebu Seamen's Assoc., Inc., 1963) Comparison between Facilities and Supplements Category Facilities Supplements Articles or Extra What it is services/items of remuneration or not expense special benefits / much articles or difference services / tools of here the trade For the benefit of For the benefit or the employee and convenience of Purpose his family; for the employer their existence and subsistence Part of wage so it Independent of How is deductible the Wage so not Treated deductible Requirements for deducting value of facilities (1) Customarily furnished by the trade - "Customary" is founded on long-established and constant practice connoting regularity. The receipt of an allowance on a monthly basis does not ipso facto characterize it as regular and forming part of salary because the nature of the grant is a factor worth considering (Millares v. NLRC, 1999) (2) Voluntarily accepted in writing by the employee; and (3) Charged at fair and reasonable value. (Mabeza v. NLRC, 1997) Wages vs. salaries Wages and salary are in essence synonymous. (Songco v. NLRC, 1990) There are slight differences: Wage Paid for skilled or unskilled manual labor Salary Paid to white collar workers and denote a higher grade of employment Not exempt from execution, garnishment or attachment (Gaa vs. CA, 1985) differentiation 4 Elements of wage distortion (1) Existing hierarchy of positions with corresponding salary rates; (2) A significant change in the salary rate of a lower pay class without a concomitant increase in the salary rate of a higher one; (3) The elimination of the distinction between the two levels; and (4) The existence of the distortion in the same region of the country. (Prubankers Assn. v. Prudential Bank and Co., 1999) How to Resolve Organized Establishment (with bargaining representative) (1) Employer and the union shall negotiate to correct the distortions. (2) Disputes shall be resolved through the grievance procedure. (3) If still unresolved, voluntary arbitration. Grievance Procedure (under the CBA) if unresolved VOLUNTARY arbitration Unorganized Establishment (1) ERs and Employees shall endeavor to correct such distortions. (2) Disputes shall be settled through the National Conciliation and Mediation Board. (3) If still unresolved after 10 calendar days of conciliation, it shall be referred to the appropriate branch of the NLRC compulsory arbitration Both the employer and employee cannot use economic weapons. (4) Employer cannot declare a lock-out; Employee cannot declare a strike because the law has provided for a procedure for settling (5) The salary or wage differential does not need to be maintained. (National Federation of Labor v. NLRC, 1994) National Conciliation and Mediation Board if unresolved COMPULSORY arbitration by the NLRC 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 the statutory requirement (Philippine National Bank vs. PEMA, 115 SCRA 507)

27

Not subject to execution, garnishment or attachment except for debts related to necessities (Art. 1708)

TOPIC B-III. NON-DIMINUTION OF BENEFITS TOPIC B-II. WAGE DISTORTION


Definition A situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of GENERAL RULE: prohibition against elimination or diminution of benefits (Art. 100) Requisites If the following are met, then 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 Assn. vs. Prudential Bank and Co., 1999)

LABOR LAW REVIEWER


(2) Practice is consistent and deliberate and (3) Not due to error in the construction or application of a doubtful or difficult question of law. (Globe Mackay Cable vs. NLRC, 1988) (4) The diminution or discontinuance is done unilaterally by the employer. When not applicable: When at least one of the requisites is absent. (1) Mistake in the application of the law (Globe Mackay Cable v. NLRC, G.R. No. 74156, June 29, 1988) (2) Negotiated benefits (Azucena) (3) Reclassification of Positions e.g. loss of some benefits by promotion. (4) Contingent or Conditional Benefits the rule does not apply to a benefit whose grant depends on the existence of certain conditions, so that the benefit is not demandable if those preconditions are absent. Note: Benefits initiated through negotiation between Employee and Employer, e.g. CBA, can only be eliminated or diminished bilaterally. preferred credits (meaning unencumbered property) (3) It must yield to special preferred credits where liens are attached; (4) Covers unpaid wages as well as other monetary claims; and (5) Judicial declaration of insolvency/bankruptcy and filing of claims by workers still required. Republic vs. Peralta (1987): Article 110 of the Labor Code did not sweep away the overriding preference accorded under the scheme of the Civil Code: (1) Tax claims of the government or any subdivision thereof which constitute a lien upon properties of the Insolvent still preferred over wages. (2) The use of the phrase "first preference" in Article 110 indicates that what Article 110 intended to modify is the order of preference found in Art. 2244, which pertains to unencumbered property. (3) Art. 2241 and 2242 pertain to encumbered property and such property shall still remain reserved to its respective lienholder. (4) Exception is if either 2241 (6) or 2242 (3) applies. (5) Primary effect: it moves wages from 2nd priority in 2244 to 1st priority; as if 2244 (2) became 2244 (1). Development Bank of the Philippines vs. NLRC (1995): (1) Art. 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. (2) Requirements of judicial liquidation / declaration of bankruptcy still intact; workers must also file their claims. (3) 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 Art. 110 does not constitute a 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. Rubberworld (Phils.), Inc. vs. NLRC (1999): Preference does not apply when the Employer corporation is under rehabilitation / receivership.

28

TOPIC B-IV. WORKERS PREFERENCE IN CASE OF BANKRUPTCY


Statutory Provisions Labor Code, Art. 110. In the event of bankruptcy or liquidation of an employer's business, his workers shall enjoy first preference as regards their wages and other monetary claims, any provision of law to the contrary notwithstanding. Such unpaid wages and monetary claims shall be paid in full before the claims of the Government and other creditors may be paid. (As amended by R. A. 6715) Civil Code, Art. 1707. The laborer's wages shall be a lien on the goods manufactured or the work done. Civil Code, Art. 2241 (6). 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; Civil Code, Art. 2242 (2) & (3). 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) Credits for services rendered the insolvent by employees, laborers, or household helpers for one year preceding the commencement of the proceedings in insolvency. (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 Jurisprudence Summary (1) It only creates a preference and not a lienso; (2) Worker preference shall apply only to ordinary

TOPIC B-V. LABOR CODE PROVISIONS FOR WAGE PROTECTION


(1) Prohibition against interference in wage disposal (Art. 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.

LABOR LAW REVIEWER


Related Civil Code Provisions Art. 1705. The laborer's wages shall be paid in legal currency. Art. 1706. Withholding of the wages, except for a debt due, shall not be made by the employer. Art. 1707. The laborer's wages shall be a lien on the goods manufactured or the work done. Art. 1708. The laborer's wages shall not be subject to execution or attachment, except for debts incurred for food, shelter, clothing and medical attendance. Art. 1709. The employer shall neither seize nor retain any tool or other articles belonging to the laborer. (2) Prohibition against wage deduction (Art. 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: (1) Employee 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; (2) 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 (3) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment, such as: (a) Employee debt to employer is due and demandable (CC 1706); (b) Attachment or execution in cases of debts incurred for necessities: food, shelter, clothing, medical attendance (CC 1708); (c) Withholding tax; (d) Deductions of a legally established cooperative; (e) Payment to 3rd parties upon written authority by employee; (f) Deductions for loss or damage; (g) SSS, Medicare, Pag-IBIG premiums; (h) Deduction for value meals and other facilities. 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. (Art. 117) or to retaliate against the Employee who filed a complaint. (Art. 118) With Employees consent in Writing (1) SSS Payments (2) PHILHEALTH payments Without Employees consent (1) Workers insurance acquired by the employer (3) Contributions to PAG-IBIG Fund (4) Value of meals and other facilities (5) Payments to third persons with employees consent (6) Deduction of absences (7) Union dues, where check-off is not provided in the CBA. (2) Union dues, where the right to checkoff is recognized by the employer (provided in the CBA) (3) Debts of the employee to the employer that have become due and demandable

29

Rationale: 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. v. Sec. of Labor, 1989) (3) Prohibition against requirement to make deposits for loss or damage (Art 114-115) General Rule: No 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 (2) When such is necessary or desirable determined by the DOLE Secretary appropriate rules and regulations. (Art. 114)

as in

Conditions for the deductions (1) EE is clearly shown to be responsible for the loss or damage; (2) The EE is given ample opportunity to show cause why deduction should not be made; (3) The amount of the deduction is fair and reasonable and shall not exceed the actual loss or damage; and (4) The deduction from the employees wage does not exceed 20% of the employees wages in a week. (Art. 115) Daily Deposits to Cover Shortage in Boundary Illegal The 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 in the remittance of his "boundary." When employee stops working for employer, the alleged purpose for the unauthorized deposits no longer exists. Any balance due must be returned to employee with legal interest. (Five J Taxi vs. NLRC (1994)) (4) Prohibition against withholding of wages (Art. 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.

LABOR LAW REVIEWER


(5) Prohibition against deduction to ensure employment (Art 117) It shall be unlawful to make any deductions from the wages of any employee for the benefit of any employer or his representative or intermediary as consideration of a promise of employment or retention in employment. (6) Prohibition against retaliatory measures (Art 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. This article is similar to Art. 248(f) which classifies as unfair labor practice (ULP) an employers prejudicial act against an employee who gave or is about to give a testimony under the Code. However, they differ on the subject of the testimony. Art. 118 Subject of testimony is wages The employers retaliatory act is unlawful but not ULP (unless the act is intended to impair the right to self-organization of employees) Art. 248(f) Subject is anything under the Code The employers retaliatory act is ULP. support, and such persons are more in need of the exemption than any others. Allowable deductions without employees consent NOTE: Please refer to the exceptions to prohibition against wage deduction in the previous subsection. Attorneys fees and union service fee in labor cases In cases of unlawful withholding of wages, the culpable party may be assessed attorney's fees equivalent to 10% 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 the wages, attorneys fees, which exceed 10% of the amount of wages recovered.

30

TOPIC B-VI. CRITERIA/FACTORS FOR WAGE SETTING


Factors/Criteria in determining regional minimum wages: (Art. 124)(DXCN IS PREQ) (1) Demand for living wages; (2) Wage adjustment vis-a-vis the consumer price index; (3) Cost of living and changes or increases therein; (4) The needs of workers and their families; (5) The need to induce industries to invest in the countryside; (6) Improvements in standards of living; (7) Prevailing wage levels; (8) Fair return of the capital invested and capacity to pay of employers; (9) Effects in employment generation and family income; and (10) Equitable distribution of income and wealth along the imperatives of economic and social development. Procedure for Wage Fixing by Regional Board (Art. 123) (1) Investigate and study pertinent facts, based on criteria set in Art. 124 (2) Conduct public hearings or consultations with notice to employer and employee groups, provinces, city, municipal officials and other interested parties (3) Decide to ISSUE or NOT TO ISSUE a wage order Frequency: 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 EXCEPT: when Congress passes a new law affecting wages or other supervening circumstances Effectivity: If it 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 (4) Appeal wage order to Commission within 10 calendar days; mandatory for the Commission to

(7) Prohibition against False Reporting (Art. 119) It shall be unlawful for any person 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. (8) Prohibition against keeping of employees records in a place than the workplace All employment records of the employees of an employer shall be kept and maintained in or about the premises of the workplace main or branch office or establishment, if any, depending upon where the employees are regularly assigned. The keeping of the employee's records in another place is prohibited. (IRR Book II Rule X Sec. 11) (9) Prohibition against garnishment/execution (Art 1708 of the Civil Code) General Rule: The laborer's wages shall not be subject to execution or attachment Exception: for debts incurred for food, shelter, clothing and medical attendance 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 day's labor for immediate or present

LABOR LAW REVIEWER


decide within 60 calendar days from filing Filing of an appeal DOES NOT STAY order unless appellant files an undertaking with a surety, to guarantee payment of employees if the wage order is affirmed (as amended by RA 6727) Agencies on Wage Studies and Determination National Wages and Productivity Commission Composition: (1) Secretary of Labor and Employment as exofficio Chairman; (2) Director-General of NEDA as ex-officio vicechairman; (3) Two members each from the workers and employers sectors who shall be appointed by the President of the Philippines upon the recommendation of the Sec. of Labor (4) Executive Director of the Commission Secretariat (1) Headed by the Executive Director (2) Two (2) Deputy Directors Powers and Functions of the Commission: (1) To act as the national consultative and advisory body to the President of the Philippines and Congress on matters relating to wages, incomes and productivity; (2) To formulate policies and guidelines on wages, incomes and productivity improvement at the enterprise, industry and national levels; (3) To prescribe rules and guidelines for the determination of appropriate minimum wage and productivity measures at the regional, provincial, or industry levels; (4) To review regional wage levels set by the Regional Tripartite Wages and Productivity Boards to determine if these are in accordance with prescribed guidelines and national development plans; (5) To undertake studies, researches and surveys necessary for the attainment of its functions and objectives, and to collect and compile data and periodically disseminate information on wages and productivity and other related information, including, but not limited to, employment, cost-of-living, labor costs, investments and returns; (6) To review plans and programs of the Regional Tripartite Wages and Productivity Boards to determine whether these are consistent with national development plans; (7) To exercise technical and administrative supervision over the Regional Tripartite Wages and Productivity Boards; (8) To call, from time to time, a national tripartite conference of representatives of government, workers and employers for the consideration of measures to promote wage rationalization and productivity; and (9) To exercise such powers and functions as may be necessary to implement this Act. (Art. 121) Regional Tri-partite Wages and Productivity Boards Composition: (1) Regional Director of DOLE Chairman (2) Regional Director of NEDA Vice Chairman (3) Regional Director of DTI Vice Chairman (4) 2 Members from the employer sector (5) 2 Members from the employee sector (6) Secretariat Tri-partite body 3 sectors are represented: (a) government, (b) employers, and (c) employees. Powers and Functions of the Board: (1) To develop plans, programs and projects relative to wages, incomes and productivity improvement for their respective regions; (2) To determine and fix minimum wage rates applicable in their regions, provinces or industries therein and to issue the corresponding wage orders, subject to guidelines issued by the Commission; (3) To undertake studies, researches, and surveys necessary for the attainment of their functions, objectives and programs, and to collect and compile data on wages, incomes, productivity and other related information and periodically disseminate the same; (4) To coordinate with the other Regional Boards as may be necessary to attain the policy and intention of this Code; (5) To receive, process and act on applications for exemption from prescribed wage rates as may be provided by law or any Wage Order; and (6) To exercise such other powers and functions as may be necessary to carry out their mandate under this Code. (Art. 122)

31

C. Rest Day
NOTE: See IRR of Labor Code Book III, Rule III Every employee regardless of the nature of his work is entitled to at least one whole day every week as his rest day. The rest day or day off shall be determined by the employer. However, in cases where the employee is required by his religious belief to rest on certain days, such belief shall be respected by the employer. 1. Right to weekly rest day Art. 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. 2. Preference of the employee Art. 94 (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

LABOR LAW REVIEWER


as to their weekly rest day when such preference is based on religious grounds. 3. When work on rest day authorized Art. 92. When employer may require work on a rest day. The employer may require his employees to work on any day: a) 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; b) In cases of urgent work to be performed on the machinery, equipment, or installation, 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 loss or damage to perishable goods; e) 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 f) Under other circumstances analogous or similar to the foregoing as determined by the Secretary of Labor and Employment. 2. Premium pay NOTE: SEE DOLE Memorandum Circular 1, Series of 2004. This is important. WHEN WORK PERFORMED On scheduled rest day On Sunday ONLY IF ESTABLISHED rest day No regular work and rest days On any special holiday/special day On any special holiday /special day falling on scheduled rest day On any regular holiday falling on scheduled rest day PREMIUM PAY 30% of regular wage 30% of regular wage 30% of regular wage for work performed on Sundays and holidays 30% of regular wage 50% of regular wage 230% of regular wage favorable to the employees than those provided herein, or be used to diminish any benefit granted to the employees under existing laws, agreements, and voluntary employer practices. Synthesis of the Rules (1) Rest day of not less than 24 consecutive hours after 6 consecutive days of work. (2) No work, no pay principle applies (3) If an employee works on his designated rest day, he is entitled to a premium pay. (4) Premium pay is additional 30% of the basic pay. (5) Employer selects the rest day of his employees (6) However, employer must consider the religious reasons for the choice of a rest day.

32

D. Holidays
NOTE: Art. 94 (c) was superseded by E.O. 203, which was subsequently amended by RA 9177, 9256, and 9492. Holiday pay is a one-day pay given by law to an employee even if he does not work on a regular holiday. This gift of a days pay is limited to each of the eleven regular holidays.

TOPIC D-I. EXCLUSIONS FROM COVERAGE


General Rule: All employees Exceptions: (1) Those of the government and any of the political subdivision, including governmentowned and controlled corporation; (2) Those of retail and service establishments regularly employing less than 10 workers; (3) Domestic helpers and persons in the personal service of another; (4) Managerial employees as defined in Book III (5) 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. (Sec. 1, Rule IV of the IRR) (6) Retail and service establishments regularly employing less than ten (10) workers Art. 94(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 IRR of RA 6727 or the Wage Rationalization Act f) "Retail Establishment" is one principally engaged in the sale of goods to end-users for personal or household use; g) "Service Establishment" is one principally engaged in the sale of service to individuals for their own or household use and is generally recognized as such;

Art. 93(d): Where the collective bargaining agreement or other applicable employment contract stipulates the payment of a higher premium pay than that prescribed under this Article, the employer shall pay such higher rate. IRR Book III, Rule III, Sec. 8: 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. Sec. 9.: Nothing herein shall prevent the employer and his employees or their representatives in entering into any agreement with terms more

LABOR LAW REVIEWER


TOPIC D-II REGULAR HOLIDAYS
RA 9492, Sec. 26: Unless otherwise modified by law, and or proclamation, the following regular holidays and special days shall be observed in the country: Regular Holidays (1) New years Day - January 1 (2) Maundy Thursday - Movable date (3) Good Friday - Movable date (4) Eidul Fitr - Movable date (5) Araw ng Kagitingan- Monday nearest April 9 (Bataan and Corregidor Day) (6) Labor Day - Monday nearest May 1 (7) Independence Day - Monday nearest June 12 (8) National Heroes Day - Last Monday of August (9) Bonifacio Day - Monday nearest November 30 (10) Christmas Day - December 25 (11) Rizal Day - Monday nearest December 30 Nationwide Special Holidays (1) Ninoy Aquino Day - Monday nearest August 21 (2) All Saints Day - November 1 (3) Last Day of the Year - December 31 In the event the holiday falls on a Wednesday, the holiday will be observed on the Monday of the week. If the holiday falls on a Sunday, the holiday will be observed on the Monday that follows. Provided, That for movable holidays, the President shall issue a proclamation, at least six months prior to the holiday concerned, the specific date that shall be declared as a nonworking day Provided, however, The Eidul Adha shall be celebrated as a regional holiday in the Autonomous Region in Muslim Mindanao. Id-ul-Fitr (Eidl Fitr) and Id-ul-Adha (Eidl Adha) have been added to the list of national legal holidays. There should be no distinction between Muslims & non-Muslims as regards to the payment of benefits for Muslim holidays. Wages & other emoluments granted by law to the working man are determined on the basis of the criteria laid down by laws & not on workers faith. Art. 3(3), PD 1083 states that nothing herein shall be construed to operate to the prejudice of a non-Muslim. (San Miguel Corp vs. CA, 2002)

33

TOPIC D-III HOLIDAY PAY COMPUTATION


SEE: Art. 94 Labor Code, Book III, Rule IV of IRR, RA 9424 and DOLE Memorandum Circular 1 Series of 2004 GENERAL RULE: An employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate (Art. 94(b)). According to the LC, IRR and Memo: Work on any regular holiday, 200% of regular daily not exceeding 8 hours wage Work on any regular holiday, if 200% of regular daily it exceeds 8 hours/overtime wage (for the 1st 8 hours) + 30% of hourly rate on said day Work on any regular holiday 200% of regular daily which falls on the scheduled wage + 30% of such rest day, not exceeding 8 amount hours Work on any regular holiday Regular holiday-onwhich falls on scheduled rest rest day rate (200% of day, if it exceeds 8 regular daily wage hours/overtime plus 30% of such amount) + 30% of hourlyrate on said day. Work on special holiday not Regular daily wage + exceeding 8 hours 30% thereof Work on special holiday Regular daily wage + 50% thereof NOTE: (1) According to DOLE Memo Circular 1-04, a special holiday/special day includes the National Special Days, and declared special days such as Special Non-working Holiday, Special Public Holiday and Special National Holiday. Such days are entitled to the rates prescribed above. These days are not the same as a special working holiday. (2) A special working holiday is considered an ordinary working day, so there is no premium pay. Double holiday pay According to DOLE Explanatory Bulletin on Workers Entitlement to Holiday Pay on 9 April 1993, if two holidays fall on the same day:

24

P.D. 1083 (Code of Muslim Personal Laws) SEE: Arts. 169-173 Muslim Holidays Specifically for the Muslim Areas P.D. 1083, in its Book V, Title, recognizes five (5) Muslim Holidays, namely: 1) Amun Jadid (New Year) which falls on the first (1st) day of the lunar month of Muharram; 2) Mauli-un-Nabi (Birthday of the Prophet Muhammad) which falls on the twelfth (12th) day of the third (3rd) lunar month of Rabi-ul-Awwal; 3) Lailatul Isra Wal Mi Rai (Nocturnal Journey and Ascencion of the Prophet Muhammand) which falls on the twenty-seventh (27th) day of the seventh (7th) lunar month of Rajab; 4. Id-ul-Fitr (Hari Raja Pausa) which falls on the first (1st) day of the tenth (10th) lunar month of Shawwal commemorating the end of the fasting season; and 5. Id-ul-Adha (Hari Raha Haji) which falls on the tenth (10th) of the twelfth (12th) lunar month of Dhul-Hijja. Note:

LABOR LAW REVIEWER


(1) If unworked, 200% of basic wage. (2) If worked, 300% of basic wage. (Azucena) Double Holiday Rule for Monthly-paid employees For covered employees whose monthly salaries are computed based on 365 days and for those other employees who are paid using factor 314, or 262, or any other factor which already considers the payment for the 11 regular holidays, NO additional payment is due them. (BWC-WHSD Opinion No. 053, s. 1998). Successive holiday pay According to IRR, Rule IV, Sec. 10, Employee entitled to holiday pay for both days, IF: (1) He is present on day immediately preceding first holiday; or (2) He works on first holiday, which entitles him to pay on second holiday. NOTE: SEE IRR Book III, Rule IV, Sec. 10 Divisors Divisor assumes important role in determining whether or not holiday pay is already computed. (1) Monthly paid employees are not entitled to the holiday pay if their total annual income is divided by 365 days resulting in a wage which is beyond the minimum wage per day because they are considered paid everyday of the year including holidays, rest days, and other non-working days. The 365 days are as follows: 365 days = 300 days ordinary days 51 days rest days 11 days regular holidays 3 days special holidays (2) As a general rule, for a company with a 6day working schedule, the divisor 314 already means that the legal holidays are included in the monthly pay of the employee. The divisor is arrived at by subtracting all Sundays from the total number of calendar days in a year. (3) As a general rule for a company with a 5day working schedule, the divisor 261 means that the holiday pay is already included in the monthly salary of the employee. Sundays Letter of Instruction No. 1087: (1) When a holiday falls on a Sunday, the following Monday will not be considered a holiday unless a proclamation says so. (2) Furthermore as stated in the Wellington case (see below), a legal holiday falling on a Sunday does not create a legal obligation to pay extra, aside from the usual holiday pay, to monthlypaid employees (Azucena). Holidays falling on a Sunday Wellington Investment and Corporation vs. Trajano (1995): Manufacturing Supreme Court ruled that he Regional Director erred in saying that if a holiday fell on Sunday, an extra day of pay was created; thus, an employer should pay twice the amount of holiday pay on that day. In fixing the salary, Wellington simply deducted 51 Sundays from the 365 days normally comprising a year and used the difference, 314, as divisor for determining the monthly salary. The monthly salary thus fixed actually covers payment for 314 days of the year, including regular and special holidays. No provision of law requires any employer to make adjustments in the monthly salary rate set by him to take account of legal holidays falling on Sundays in a given year, otherwise to reckon a year at more than 365 days.

34

Non-working/scheduled rest day IRR, Book III, Rule V, Sec 6 (c): Where the day immediately preceding the holiday is a non-working day in the establishment or the scheduled rest day of the employee, he shall not be deemed to be on leave of absence on that day, in which case he shall be entitled to the holiday pay if he worked on the day immediately preceding the non-working day or rest day. Example, If a holiday falls on Monday, and Sunday is a nonworking day in the establishment or is the scheduled rest day of the employee, the employee shall be entitled to holiday pay if he worked on Saturday (which is the day immediately preceding Sunday, the non-working day or rest day).

TOPIC D-IV. RIGHT TO HOLIDAY PAY


a) In case of absences IRR, Book III, Rule IV, Sec 6(a): All covered employees shall be entitled to the benefit provided herein when they are on leave of absence with pay. Employees who are on leave of absence without pay on the day immediately preceding a regular holiday may not be paid the required holiday pay if he has not worked on such regular holiday. Note: (1) If an employee is on leave of absence with pay on the day immediately preceding a regular holiday, he is entitled to holiday pay. (2) If an employee is on leave of absence without pay on the day immediately preceding a regular holiday, he is not entitled to holiday pay unless he works on such regular holiday. In case of temporary cessation of work IRR, Book III, Rule IV, Sec 7: (a) In cases of temporary or periodic shutdown and temporary cessation of work of an establishment, as when a yearly inventory or when the repair or b)

LABOR LAW REVIEWER


cleaning of machineries and equipment is undertaken, the regular holidays falling within the periods shall be compensated in accordance with this Rule. (b) The regular holiday during the cessation of operation of an enterprise due to business reverses as authorized by the Secretary of Labor may not be paid by the employer. An employee is entitled to holiday pay for the regular holidays falling within the period in cases of temporary shutdowns or cessation of work, when: (1) an annual inventory; or (2) repair or cleaning of machineries and equipment is undertaken. The employer may not pay his employees for the regular holidays during the suspension of work if: the cessation of operation is due to business reverses, and is authorized by the Secretary of Labor. Of teachers, piece workers, seafarers, seasonal workers, etc. SECTION 8. Holiday pay of certain employees. (a) Private school teachers, including faculty members of colleges and universities, may not be paid for the regular holidays during semestral vacations. They shall, however, be paid for the regular holidays during Christmas vacation; (b) Where a covered employee, is paid by results or output, such as payment on piece work, his holiday pay shall not be less than his average daily earnings for the last seven (7) actual working days preceding the regular holiday; Provided, However, that in no case shall the holiday pay be less than the applicable statutory minimum wage rate. (c) Seasonal workers may not be paid the required holiday pay during off-season when they are not at work (d) Workers who have no regular working days shall be entitled to the benefits provided in this Rule. Holiday Pay of Hourly-Paid Faculty Members (1) They are not entitled to payment of holiday pay because they are paid only for work actually done. Since regular holidays are known to both the school and faculty members as no class day; certainly the latter do not expect payment for said unworked holidays. (2) They are entitled to their hourly rate on days declared as special holidays. Be it noted that when a special public holiday is declared, the faculty member paid by the hour is deprived of expected income, and it does not matter that the school calendar is extended in view of the days or hours lost, for their income that could be earned from other sources is lost during the extended days. (3) Similarly, when classes are called off or shortened on account of typhoons, floods, rallies, and the like, these faculty members must likewise be paid, whether or not extensions are ordered. (Jose Rizal College v. NLRC, G.R. No. 65482, Dec. 1, 1987) c) Piece workers Philosophy underlying the exclusion of piece workers from the 8-hour 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 V Coconut Products Ltd., v. CIR, 1966) Seafarers Any hours of work or duty including hours of watchkeeping performed by the seafarer on designated rest days and holidays shall be paid rest day or holiday pay. (Section 11.C, Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels) Seasonal workers Seasonal workers who do not work during off-season are not entitled to pay for the regular holidays occurring during their off-season. Workers assigned to skeleton crews that work during the off-season have the right to be paid on regular holidays falling in that duration.

35

E. Leaves
TOPIC E-1. Service Incentive Leave Pay
Right to service incentive leave Art. 95. Right to service incentive leave. A. Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay. SIL DOES NOT apply to the following employees: (1) Those of the government and any of its political subdivisions, including GOCCs; (2) Domestic helpers and persons in the personal service of another; (3) Managerial employees as defined in Book 3 of this 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 5 days; (7) Those employed in establishments regularly employing less than 10 employees. (Sec. 1, Rule V, Implementing Rules and Regulations). Jurisprudence: (1) Teachers of private school on contract basis are entitled to service incentive leave. (Cebu Institute of Technology v. Ople, 156 SCRA 531). (2) Piece Rate Workers In the case of Makati Haberdashery v. NLRC (G.R. No. 83380-81, Nov. 15, 1989) the Court ruled that piece-rate employees are not entitled to service incentive leave. However, in the case of Labor Congress of

LABOR LAW REVIEWER


the Philippines v. NLRC (G.R. No. 123938, May 21, 1998). Meaning of 1 year of service IRR Book III, Rule V, Sec. 3: The term "at least oneyear service" shall mean service for not less than 12 months, whether continuous or broken, reckoned from the date the employee started working, including authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or policy, or that provided in the employment contract is less than 12 months, in which case said period shall be considered as one year. Court held that petitioners are entitled to service incentive leave. Court concluded that factors led them to conclude that petitioners, although piecerate workers, were regular employees of private respondents. (Labor Congress vs. NLRC, 1998) Entitlement Art. 95 (c): The grant of benefit in excess of that provided herein shall not be made a subject of arbitration or any court or administrative action. IRR Sec. 5 The service incentive leave shall be commutable to its money equivalent if not used or exhausted at the end of the year. The cause of action of an entitled employee to claim his service incentive leave pay accrues from the moment the employer refuses to remunerate its monetary equivalent if the employee did not make use of said leave credits but instead chose to avail of its commutation (into money). Accordingly, if the employee wishes to accumulate his leave credits and opts for its commutation upon his resignation or separation from employment, his cause of action to claim the whole amount of his accumulated service incentive leave shall arise when the employer fails to pay such amount at the time of his resignation or separation from employment. (Auto Bus Transport vs. NLRC, 2005) (b) Exclusions from coverage Art. 95. Right to service incentive leave. B. This provision shall not apply to those (1) who are already enjoying the benefit herein provided, (2) those enjoying vacation leave with pay of at least five days and (3) those employed in establishments regularly employing less than ten employees or (4) in establishments exempted from granting this benefit by the Secretary of Labor and Employment after considering the viability or financial condition of such establishment. (c) Commutable nature of benefit They are not entitled to service incentive leave pay because as piece-rate workers being paid at a fixed amount for performing work irrespective of time consumed in the performance thereof, they fall under one of the exceptions stated in Section 1(d), Rule V, Book III, IRR of Labor Code. (Makati Haberdashery vs. NLRC, 1989)

TOPIC E-II. MATERNITY LEAVE


NOTE: SEE Sec. 14-A of RA 1161 (Social Security Law) as amended by RA 7322 and RA 8282 Coverage Every woman in the private sector, whether married or unmarried, is entitled to the maternity leave benefits. Conditions to entitlement Requisites (1) Employment: A female employee employed at the time of delivery, miscarriage or abortion (2) Contribution: who has paid at least 3 monthly contributions in the 12-month period immediately preceding the semester of her childbirth, or miscarriage. (3) Notice: employee notified 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. Benefit received A daily maternity benefit equivalent to 100% of her average daily salary credit for: (1) 60 days for normal delivery (2) 78 days for caesarean delivery This benefit shall NOT be included in the computation of 13th month pay as it is granted to an employee in lieu of wages which is the basis for computing 13th month. Availment Other conditions (1) Employer shall advance the payment subject to reimbursement by the SSS within 30 days from filing of leave application. (2) Availment 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. (3) Employee may only avail of benefit for the first four (4) deliveries or miscarriages. (4) Sanction: That if an employee should give birth or suffer miscarriage a. without the required contributions 26 having been remitted for her by her ER to the SSS, or b. without the latter having been previously notified by the ER of time of the pregnancy, then the employer shall pay to the SSS damages equivalent to the benefits which said employee member would otherwise have been entitled to.

36

LABOR LAW REVIEWER


TOPIC E-III. PATERNITY LEAVE
Coverage Every married male employee in the private and public sectors shall be entitled to a paternity leave of 7 days with full pay for the first four deliveries of the legitimate spouse with whom he is cohabiting. Conditions to entitlement Requisites (1) Employment (2) Marriage to and cohabitation with his legitimate spouse (3) Delivery of the legitimate spouse (must not exceed fourth delivery) Availment every married male employee in the private and public sectors shall be entitled to a paternity leave of 7 days with full pay for the first four 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. Note: For purposes of this Act, delivery shall include childbirth or any miscarriage. (4) Physical and/or mental incapacity of spouse as certified by a public medical practitioner; (5) Legal separation or de facto separation from spouse for at least one (1) year: Provided that he/she is entrusted with the custody of the children; (6) Declaration of nullity or annulment of marriage as decreed by a court or by a church: Provided, that he/she is entrusted with the custody of the children; (7) Abandonment of spouse for at least one (1) year; (8) Unmarried father/mother who has preferred to keep and rear his/her child/children, instead of having others care for them or give them up to a welfare institution; (9) Any other person who solely provides parental care and support to a child or children: Provided, that he/she is duly licensed as a foster parent by the Department of Social Welfare and Development (DSWD) or duly appointed legal guardian by the court; and (10) Any family member who assumes the responsibility of head of family as a result of the death, abandonment, disappearance, or prolonged absence of the parents or solo parent: Provided, that such abandonment, disappearance, or prolonged absence lasts for at least one (1) year. Conditions to entitlement A solo parent employee shall be entitled to the parental leave under the following conditions: (1) He/she has rendered at least one (1) year of service, whether continuous or broken; (2) He/she has notified his/her employer that he/she will avail himself/herself of it, within a reasonable period of time; and (3) He/she has presented to his/her employer a Solo Parent Identification Card, which may be obtained from the DSWD office of the city or municipality where he/she resides. Availment The parental leave is an additional benefit which shall be for seven (7) working days every year, with full pay, consisting of basic salary and mandatory allowances.

37

TOPIC E-IV. PARENTAL LEAVE


RA 8972 (Solo Parents Welfare Act of 2000) NOTE: SEE Sec. 3(a) for definition of term Solo Parent Section 6. Flexible Work Schedule. - The employer shall provide for a flexible working schedule for solo parents: Provided, That the same shall not affect individual and company productivity: Provided, further, That any employer may request exemption from the above requirements from the DOLE on certain meritorious grounds. Section 7. Work Discrimination. - No employer shall discriminate against any solo parent employee with respect to terms and conditions of employment on account of his/her status. Section 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. Leave benefits granted to a solo parent to enable him/her to perform parental duties and responsibilities where physical presence is required. (Parental Leave for Solo Parents, RA 8972) Coverage Any solo parent or individual who is left alone with the responsibility of parenthood due to: (1) Giving birth as a result of rape or, as used by the law, other crimes against chastity; (2) Death of spouse; (3) Spouse is detained or is serving sentence for a criminal conviction for at least one (1) year;

TOPIC E-V. LEAVES FOR VICTIMS OF VIOLENCE AGAINST WOMEN


Coverage VAWC leave is granted to women employees who are victims of violence, as defined in RA 9262. The leave benefit covers the days that the women employee has to attend to medical or legal concerns. SECTION 3. Definition of Terms.- As used in this Act, (a) "Violence against women and their children" refers to any act or a series of acts committed by any person against a woman who is his wife, former wife, or against a woman with whom the person has or had a sexual or dating relationship, or with whom he has a common child, or against her child whether legitimate or illegitimate, within or without the

LABOR LAW REVIEWER


family abode, which result in or is likely to result in physical, sexual, psychological harm or suffering, or economic abuse including threats of such acts, battery, assault, coercion, harassment or arbitrary deprivation of liberty. It includes, but is not limited to, the following acts: A. "Physical Violence" refers to acts that include bodily or physical harm; B. "Sexual violence" refers to an act which is sexual in nature, committed against a woman or her child. It includes, but is not limited to: a) rape, sexual harassment, acts of lasciviousness, treating a woman or her child as a sex object, making demeaning and sexually suggestive remarks, physically attacking the sexual parts of the victim's body, forcing her/him to watch obscene publications and indecent shows or forcing the woman or her child to do indecent acts and/or make films thereof, forcing the wife and mistress/lover to live in the conjugal home or sleep together in the same room with the abuser; acts causing or attempting to cause the victim to engage in any sexual activity by force, threat of force, physical or other harm or threat of physical or other harm or coercion; Prostituting the woman or child. C. "Psychological violence" refers to acts or omissions causing or likely to cause mental or emotional suffering of the victim such as but not limited to intimidation, harassment, stalking, damage to property, public ridicule or humiliation, repeated verbal abuse and mental infidelity. It includes causing or allowing the victim to witness the physical, sexual or psychological abuse of a member of the family to which the victim belongs, or to witness pornography in any form or to witness abusive injury to pets or to unlawful or unwanted deprivation of the right to custody and/or visitation of common children. D. "Economic abuse" refers to acts that make or attempt to make a woman financially dependent which includes, but is not limited to the following: a) withdrawal of financial support or preventing the victim from engaging in any legitimate profession, occupation, business or activity, except in cases wherein the other spouse/partner objects on valid, serious and moral grounds as defined in Article 73 of the Family Code; deprivation or threat of deprivation of financial resources and the right to the use and enjoyment of the conjugal, community or property owned in common; destroying household property; controlling the victims' own money or properties or solely controlling the conjugal money or properties. Conditions to entitlement RA 9262 (Anti-Violence Against Women and Their Children Act of 2004), Sec. 43: Victims under this Act shall be entitled to take a paid leave of absence up to ten (10) days in addition to other paid leaves under the Labor Code and Civil Service Rules and Regulations, extendible when the necessity arises as specified in the protection order. Any employer who shall prejudice the right of the person under this section shall be penalized in accordance with the provisions of the Labor Code and Civil Service Rules and Regulations. Likewise, an employer who shall prejudice any person for assisting a co-employee who is a victim under this Act shall likewise be liable for discrimination. Implementing Rules and Regulations of RA 9262 Section 42. Ten-day paid leave in addition to other leave benefits. - At any time during the application of any protection order, investigation, prosecution and/or trial of the criminal case, a victim of VAWC who is employed shall be entitled to a paid leave of up to ten (10) days in addition to other paid leaves under the Labor Code and Civil Service Rules and Regulations and other existing laws and company policies, extendible when the necessity arises as specified in the protection order. The Punong Barangay/kagawad or prosecutor or the Clerk of Court, as the case may be, shall issue a certification at no cost to the woman that such an action is pending, and this is all that is required for the employer to comply with the 10-day paid leave. For government employees, in addition to the aforementioned certification, the employee concerned must file an application for leave citing as basis R.A. 9262. The administrative enforcement of this leave entitlement shall be considered within the jurisdiction of the Regional Director of the DOLE under Article 129 of the Labor Code of the Philippines, as amended, for employees in the private sector, and the Civil Service Commission, for government employees. The availment of the ten day-leave shall be at the option of the woman employee, which shall cover the days that she has to attend to medical and legal concerns. Leaves not availed of are noncumulative and not convertible to cash. The employer/agency head who denies the application for leave, and who shall prejudice the victim-survivor or any person for assisting a coemployee who is a victim-survivor under the Act shall be held liable for discrimination and violation of R.A 9262. The provision of the Labor Code and the Civil Service Rules and Regulations shall govern the penalty to be imposed on the said employer/agency head. A victim of VAWC who is employed shall be entitled to a paid leave of up to ten (10) days in addition to other paid leaves under the Labor Code and Civil Service Rules and Regulations and other existing laws and company policies:

38

b)

c)

b)

c) d)

LABOR LAW REVIEWER


(1) At any time during the application of any protection order, investigation, prosecution and/or trial of the criminal case, extendible when the necessity arises as specified in the protection order. (2) Upon the issuance of the Punong Barangay/kagawad or prosecutor or the Clerk of Court, as the case may be, of a certification (at no cost) to the woman that such an action is pending, and this is all that is required for the employer to comply with the 10- day paid leave. (3) For government employees, in addition to the aforementioned certification, the employee concerned must file an application for leave citing as basis R.A. 9262. Availment In addition to other paid leaves under existing labor laws, company policy, and/or collective bargaining agreement, the qualified victim employee shall be entitled to a leave of up to 10 days with full pay, consisting of basic salary and mandatory allowances fixed by the Regional Wage Board, if any. Service charges are distributed in accordance with the following percentage of sharing: (1) Eighty-five percent (85%) for the employees to be distributed equally among them; and The shares shall be distributed to employees not less than once every 2 weeks or twice a month at intervals not exceeding 16 days. (Sec 4, Rule VI, Book 3) (2) Fifteen percent (15%) for the management to answer for losses and breakages and, at the discretion of the management, distribution to managerial employees. (Sec 3, Rule VI, Book 3) Note: The P2,000.00 salary ceiling for entitlement thereto is no longer applicable.

39

TOPIC F-IV. INTEGRATION


Art 96, par. 2: In case service charge is abolished: shares of covered employees shall be considered integrated in their wages. The basis of the amount to be integrated shall be the average monthly share of each employee for the past twelve (12) months immediately preceding the abolition of withdrawal of such charges. (Sec. 5, Rule VI, Book 3, sentence 2) Synthesis of the Rules (1) Service charges must be pooled; (2) Where a restaurant or similar establishment does not collect service charges but has a practice or policy of monitoring and pooling tips given voluntarily by its customers to its employees, the pooled tips should be monitored, accounted for and distributed in the same manner as the services charges. (DOLE Handbook on Workers Statutory Monetary Benefits, 2006 ed., p. 27). (3) The amount collected is divided between the company (15%) and employees (85%); (4) It shall be given twice a month with intervals of not more than 15 days; (5) If discontinued, removed, or stopped, the average share of the employees of their service charge or tips shall be integrated with their basic wage.

F. Service Charges
TOPIC F-I. COVERAGE
Sec 1, Rule VI, Book 3. This rule shall apply only to establishments which collect service charges such as: (1) Hotels, restaurants, lodging houses, night clubs, cocktail lounge, massage clinics, bars, casinos and gambling houses and similar enterprises (2) Including those entities operating primarily as private subsidiaries of the Government Sec 2, Rule VI, Book 3. Shall apply to ALL employees of covered employers (1) Regardless of their positions, designations, or employment status, (2) Irrespective of the method by which their wages are paid

TOPIC F-II. EXCLUSION


Managerial employees or one who is vested with powers or prerogatives to lay down and execute managerial policies and/or hire, transfer, suspend, layoff, recall, discharge, assign or discipline employees or to effectively recommend such managerial actions. All employees not falling within this definition shall be considered rank and file employees.

G. Thirteenth (13th) Month Pay and other bonuses


Revised Guidelines on the Implementation of the 13th Month Pay Law and PD 851 Rationale (1) To further protect the level of real wages from the ravage of world-wide inflation; (2) There has been no increase in the legal minimum wage rates since 1970; (3) The Christmas season is an opportune time for society to show its concern for the plight of the working masses so they may properly celebrate Christmas and New Year.

TOPIC F-III. DISTRIBUTION


Art 96: All service charges collected by hotels, restaurants and similar establishments shall be distributed at the rate of 85% for all covered employees and 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.

LABOR LAW REVIEWER


TOPIC G-I. COVERAGE
General Rule: ALL EMPLOYERS are hereby required to pay all their rank and file employees a 13th month pay not later than Dec 24 of every year, Provided that they have worked for at least one (1) month during a calendar year. equivalent of: a. unused vacation and sick leave credits, b. overtime, c. premium, d. night differential, e. holiday pay and, and f. cost-of-living allowances. Time of payment GENERAL RULE: paid not later than Dec 24 of each year. EXCEPTION: ER may give to his employees half () of the required 13th Month Pay before the opening of the regular school year and the other half on or before the 24th of December every year. The frequency of payment of this monetary benefit may be the subject of agreement between the employer and the recognized CBA of the employees.

40

TOPIC G-II. EXCLUSION/EXEMPTIONS FROM COVERAGE


Exempted Employers: (1) Government, its political subdivisions, including GOCCs except those operating essentially as private subsidiaries of the Government; (2) Employers already paying their employees a 13th month pay or more in a calendar year or its equivalent at the time of this issuance; Equivalent includes: (a) Christmas bonus, mid-year bonus, cash bonuses (b) and other payments amounting to not less than 1/12 of the basic salary (c) but shall NOT INCLUDE cash and stock dividends, cost of living allowances and all other allowances regularly enjoyed by the employee as well a non-monetary benefits. (3) Employers of household helpers and persons in the personal service of another relation to such workers; and (4) Employers of those who are paid on purely commission, boundary or task basis and those who are paid a fixed amount for performing specific work. EXCEPT where the workers are paid on piece-rate basis in which case the employer shall grant the required 13th month pay to such workers. Workers paid on a piece-rate basis: those who are paid a standard amount for every piece or unit of work produced that is more or less regularly replicated, without regard to the time spent in producing the same.

TOPIC G-IV. 13TH MONTH PAY IN SPECIAL CASES


(1) Paid by Results: Employees who are paid on piece work basis are, by law, entitled to the 13th Month Pay. (2) Employees who are paid a fixed or guaranteed wage plus commission are entitled to 13th month pay (not purely commission); the basis for computation shall be both their fixed or guaranteed wage and commission. (3) Those with Multiple Employers: Government Employees working part time in a private enterprise, including private educational institutions, as well as Employees working in two or more private firms, whether on full or part time bases, are entitled to the required 13th Month Pay from all their private Employers regardless of their total earnings from each or all their Employers. (4) Private School Teachers: Private school teachers, including faculty members of universities and colleges, are entitled to the required 13th month pay, regardless of the number of months they teach or are paid within a year, if they have rendered service for at least one (1) month within a year. Overload pay is NOT included in the computation for 13th month pay; overload is not overtime as it is additional work done within the normal shift (Letran Calamba Faculty vs. NLRC, 2008) (5) Resigned or Separated Employee: an Employee who has resigned or whose services were terminated at any time 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 resignation or termination from service. (6) Wage Difference: The difference between the minimum wage and the actual salary received by the Employee cannot be deemed as his 13 th month pay as such difference is not equivalent

TOPIC G-III. NATURE OF 13TH MONTH PAY


Amount and Date of Payment Minimum Amount: 1/12 of the total basic salary earned by an employee within a calendar year for the year 1987 BASE AMOUNT, which is the basic salary shall include: (1) cost of living allowances (COLA) integrated into the basic salary of a covered employee pursuant to EO 178. (2) all remunerations or earning paid by this employer for services rendered. (3) But not the allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary, such as the cash

LABOR LAW REVIEWER


to or of the same import as the said benefit contemplated by law. (JPL Marketing Promotions vs. CA, 2005) (7) Terminated Employees: the payment of the 13th month pay may be demanded by the employee upon the cessation of employeremployee relationship. (Archilles Manufacturing Corp. vs. NLRC, 1995) Additional Rules: (1) Commissions: If the commissions may be properly considered part of the basic salary, then they should be INCLUDED. If they are not an integral part of the basic salary, then they should be EXCLUDED. (Phil. Duplicators Inc. vs. NLRC, 1995) (2) Substitute Payment not allowed: benefits in the form of food or free electricity, assuming they were given, were not a proper substitute for the 13th month pay required by law. Neither may year-end rewards for loyalty and service be considered in lieu of 13th month pay. (Framanlis Farms, Inc. v. MOLE, 1989) (3) 14th Month Pay is not mandated: Employers already paying their employees a 13th month pay or its equivalent are not covered by this Decree. (Kamaya Port Hotel v. NLRC, 1989) sales closed by them. The sales commissions were an integral part of the basic salary structure. They are not overtime payments, or profit sharing payments or any other fringe benefit. (Phil. Duplicators vs. NLRC, 227 SCRA 747; 1995)

41

TOPIC G-VI. CBA VIS--VIS 13TH MONTH PAY


In order to exempt the employer from paying 13 th month pay, a bonus stipulation in the CBA should be general in scope, applicable to all employees, not only a few, for the legal obligation benefits all employees regardless of their designation or employment status so long as they have worked at least one month during the calendar year. (Marcopper Mining Corp. vs. Ople)

H. Women Workers
TOPIC H-I. DISCRIMINATION (ART. 135, LC)
Art. 135. Discrimination prohibited. 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: (1) 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 (2) 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.

TOPIC G-V. COMMISSIONS VIS--VIS 13TH MONTH PAY


The so-called commissions paid to or received by medical representatives of Boie-Takada Chemicals or by the rank-and-file employees of Philippine Fuji Xerox Co., were excluded from the term basic salary because these were paid to the medical representatives and rank-and-file employees as productivity bonuses. These have no clear direct or necessary relation to the amount of work actually done by each individual employee. More generally, a bonus is an amount granted and paid ex gratia to an employee. If an employer cannot be compelled to pay a productivity bonus to its employees, it should follow that such productivity bonus, when given, should not be deemed to fall within the basic salary of employees when the time comes to compute their 13th month pay (Boie Takada v de la Serna, 228 SCRA 329; 1993) The decision in Boie Takada and the doctrine enunciate in this case in fact co-exist with the other. The two cases present quite different factual situations (although the same word commissions was used or invoked) the legal characterizations of which must accordingly differ. In the instant case, there is no question that the sales commission earned by the salesmen who make or close a sale of duplicating machines constitute part of the compensation or remuneration paid to salesmen for serving as salesmen, and hence as part of the wage or salary of petitioners salesmen. It appears that petitioner pays its salesmen a small fixed or guaranteed wage; the greater part of the salesmens wages or salaries being composed of the sales or incentive commissions earned on actual

TOPIC H-II. STIPULATION AGAINSTMARRIAGE (ART. 136, LC)


Art. 136. Stipulation against marriage. 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. Bona fide occupational qualification exception When the employer can prove that the reasonable demands of the business require a distinction based on marital status and there is no better available or

LABOR LAW REVIEWER


acceptable policy which would better accomplish the business purpose, an ER may discriminate against an EE based in the identity of the EEs spouse. (Star Paper Corp. vs. Simbol, 2006) The Court sustained the validity of employer policy prohibiting an employee from having a personal or marital relationship with an employee of a competitor. The prohibition was reasonable under the circumstances because relationships of such nature might compromise the interests of the company. (Duncan Association of Detailmen vs. Glaxo Wellcome, 2004) members of the family operating the establishment or undertaking; andUnder other analogous cases exempted by the Secretary of Labor and Employment in appropriate regulations. NOTE: Art 130 and 131 have been repealed already by R.A. 10151 (June 21, 2011). Articles 130 and 131 are cited here just for your information. (b) Discrimination (Art 135, RA 9710) Art. 135. Discrimination prohibited. 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: (1) 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 (2) 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) (c) Stipulation against marriage (Art 136) See previous section (d) Discharge to prevent enjoyment of benefits [Art 137(a)(1)] Art. 137. Prohibited acts. (a) It shall be unlawful for any employer: (1) 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; (e) Discharge on account of pregnancy [Art 137(a)(2)] Art 137. Prohibited acts. (a) It shall be unlawful for any employer: (2) To discharge such woman on account of her pregnancy, while on leave or in confinement due to her pregnancy; or (f) Discharge on account of testimony [Art 137(a)(3)]

42

TOPIC H-III. PROHIBITED ACTS (Art. 137, LC)


(a) Nightwork/ Exception (Art 130-131) No more nightwork prohibition under R.A. 10151. NOTE: Art 130 and 131 have been repealed already by R.A. 10151 (June 21, 2011). Articles 130 and 131 are cited here just for your information. Art. 130. Nightwork prohibition. No woman, regardless of age, shall be employed or permitted or suffered to work, with or without compensation: In any industrial undertaking or branch thereof between ten oclock at night and six oclock in the morning of the following day; or In any commercial or non-industrial undertaking or branch thereof, other than agricultural, between midnight and six oclock in the morning of the following day; or In any agricultural undertaking at nighttime unless she is given a period of rest of not less than nine (9) consecutive hours. Art. 131. Exceptions. The prohibitions prescribed by the preceding Article shall not apply in any of the following cases: (1) In cases of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other disasters or calamity, to prevent loss of life or property, or in cases of force majeure or imminent danger to public safety; (2) In case of urgent work to be performed on machineries, equipment or installation, to avoid serious loss which the employer would otherwise suffer; (3) Where the work is necessary to prevent serious loss of perishable goods; (4) Where the woman employee holds a responsible position of managerial or technical nature, or where the woman employee has been engaged to provide health and welfare services; (5) Where the nature of the work requires the manual skill and dexterity of women workers and the same cannot be performed with equal efficiency by male workers. (6) Where the women employees are immediate

a.

LABOR LAW REVIEWER


Art. 137. Prohibited acts. (a) It shall be unlawful for any employer: (3) To discharge or refuse the admission of such woman upon returning to her work for fear that she may again be pregnant. [Book III, Rule XII, Sec 13(d)] It shall be unlawful for any employer: to discharge any woman or child or any other employee for having filed a complaint or having testified or being about to testify under the Code (g) Expulsion of Women faculty/ female student due to pregnancy outside of marriage (Sec 13c RA 9710 Magna Carta of Women) c) Expulsion and non-readmission of women faculty due to pregnancy outside of marriage shall be outlawed. No school shall turn out or refuse admission to a female student solely on the account of her having contracted pregnancy outside of marriage during her term in school. i. impair the employees rights or privileges under existing labor laws; or ii. result in an intimidating, hostile, or offensive environment for the employee. (2) Education or Training environment. In an education or training environment, sexual harassment is committed: a. Against one who is under the care, custody or supervision of the offender b. Against one whose education, training, apprenticeship or tutorship is entrusted to the offender; c. When the sexual favor is made a condition to the giving of a passing grade, or the granting of honors and scholarships, or the payment of a stipend, allowance or other benefits, privileges, or considerations; or d. When the sexual advances result in an intimidating, hostile or offensive environment for the result, trainee or apprentice. Persons who may be liable (1) Any employer, employee, manager, supervisor, agent of the employer, teacher, instructor, professor, coach, trainer or any other person, regardless of whether the demand, request for requirement for submission is accepted by the object of said act having authority, influence or moral ascendancy over another in a work or training or education environment, who demands, requests or otherwise requires any sexual favor from another, (2) Any person who directs or induces another to commit any act of sexual harassment as herein defined. OR (3) Any person who cooperates in the commission by another without which it would NOT have been committed, shall also be held liable under this Act Role of the employer or Head of Office The Employer or Head of Office shall have the duty: (1) to prevent the commission of such acts and (2) to lay down the procedure for the resolution, settlement or prosecution of committed acts. He shall be solidarily liable for damages: (1) if he is informed of such acts by the offended party and (2) no immediate action is taken thereon. Independent Action for Damages The victim of work, education or training-related sexual harassment can institute a separate and independent action for damages and other affirmative relief. Sanctions (1) Criminal: imprisonment of 1 month to mos. Or fine of P10k to P20k or both Prescription of such action is in 3 years. (2) Termination

43

TOPIC H-IV. Classification of certain women workers (Art. 138, LC)


Art. 138. Any woman who is permitted or suffered to work with or without compensation in any night club, cocktail lounge, massage clinic, bar or similar establishment, 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 EE of such establishments for purposes of labor and social legislation.

TOPIC H-V. Anti-Sexual Harassment Act (RA 7877)


NOTE: SEE RA 7877: Anti-Sexual Harassment Act of 1995 Unlawful Forms of Sexual Harassment (1) Employment or Work Related a. The sexual favor is made as a condition i. in the hiring or in the employment, re-employment or continued employment of said individual or ii. in granting said individual favorable compensation, terms, conditions, promotions, or privileges, or iii. in the refusal to grant the sexual favor results in limiting, segregating or classifying the EE which in any way would discriminate, deprive or diminish employment opportunities or otherwise adversely affect said employee; b. The above acts would either:

LABOR LAW REVIEWER


As a managerial employee, petitioner is bound by more exacting work ethics. When such moral perversity is perpetuated against his subordinate, he provides a justifiable ground for his dismissal for lack of trust and confidence. It is the right, nay the duty of every employer to protect its employees from oversexed superiors. (Libres v. NLRC, 1999) Cortezs plant manager manifested a special liking for her, so much so that she was receiving special treatment from him who would oftentimes invite her "for a date," which she would as often refuse. On many occasions, he would make sexual advances - touching her hands, putting his arms around her shoulders, running his fingers on her arms and telling her she looked beautiful. The special treatment and sexual advances continued during her employment for four (4) years but eventually, he made her understand that if she would not give in to his sexual advances he would cause her termination from the service; and he made good his threat when he started harassing her. Public respondent appears baffled why it took private respondent more than four years to expose William Chua's alleged sexual harassment. The gravamen of the offense in sexual harassment is not the violation of the employee's sexuality 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. Not many women are made of the stuff that can endure the agony and trauma of a public, even corporate, scandal. If petitioner corporation had not issued the third memorandum that terminated the services of private respondent, we could only speculate how much longer she would keep her silence. Perhaps, to private respondent's mind, for as long as she could outwit her employer's ploys she would continue on her job and consider them as mere occupational hazards. (Phil. Aelous Automotive United Corp. v. NLRC, 2000) Legal Basis: Art. 139(a) of the Labor Code and Sec. 12 to 16 of RA 7610 as amended by RA 7658 and RA 9231 EXCEPTIONS (1) Child works directly under the sole responsibility of his parents or legal guardian and where only members of the ERs family are employed, provided: (a) his employment does NOT endanger his life, safety, health and morals, (b) nor impairs his normal development, and (c) the parent or legal guardian shall provide the said minor child with the prescribed primary and/or secondary education; [Sec. 12 of RA 7610 as amended by RA 7658] (2) childs employment or participation in public entertainment or information through cinema, theater, radio or television is essential, provided that: [Sec. 12 of RA 7610 as amended by RA 7658] (a) employment does NOT involve ads or commercials promoting alcohol, tobacco and its by-products or violence [Sec. 14 of RA 7610] (b) the employment contract is concluded by the childs parents or guardian, and approved by DOLE (c) The ER shall ensure the protection, health, safety and morals of the child (d) The ER shall institute measures to prevent the childs exploitation or discrimination taking into account the system and level of remuneration, and the duration and arrangement of working time (e) The ER shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing program for training and skills acquisition of the child. [Sec. 12 of RA 7610 as amended by RA 7658] Employment of Children from 15 to 18 - allowed but restricted to non-hazardous undertakings. The following are HAZARDOUS workplaces: (1) Nature of the work exposes the workers to dangerous environmental elements, contaminants or working conditions; (2) construction work, logging, fire-fighting, mining, quarrying, blasting, stevedoring, dock work, deep sea fishing, and mechanized farming; (3) manufacture or handling of explosives and other pyrotechnic products; (4) exposure to or use of heavy power-driven machinery or equipment; (5) exposure to or use of power-driven tools (IRR Book III Rule XII Sec. 3)

44

I. Minor Workers (RA 7610, RA 9231)


Constitutional basis Art II, Sec. 13 of the 1987 Constitution 1) 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. 2) It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs. GENERAL RULE: Children below 15 shall NOT be employed

REGULATION OF WORKING HOURS OF A CHILD

LABOR LAW REVIEWER


Quantity Age Bracket Below 15 y 15 to below 18 Daily Max 4 hours 8 hours Weekly Max 20 hours 40 hours Minimum wage rates shall be equivalent to the basic cash wages plus lodging, food and medical attendance. (Art. 143-144; Civil Code Art. 1689) Time and Manner of Payment: Wages shall be paid directly to the househelper to whom they are due at least once a month. No deductions therefrom shall be made by the employer unless authorized by the househelper himself or by existing laws. (Book III, Rule XIII, Sec. 9) Right against assignment to non-household work at a wage rate lower than that mandated for agricultural or non-agricultural enterprises depending on the case. (Art 145) Opportunity for education if househelper is below 18 years (Art 146; NCC 1691) (1) ER shall provide for at least elementary education; (2) cost shall be part of the EEs compensation UNLESS otherwise agreed upon. Just and humane treatment (Art 147; NCC 1694) The employer shall treat the househelper in a just and humane manner. In no case shall physical violence be used upon the househelper (Art. 147) Board, lodging and medical attendance shall be furnished by employer (Art 148; NCC 1690) Household work - Non-hazardous work for persons between 15-18 years old. (DO 4-99 Sec. 4) Contract for Domestic Service shall NOT exceed 2 years but renewable annually [Art 142; NCC1692] Hours of Work - House helpers shall NOT be required to work more than ten hours a day. [NCC 1695] Vacation with Pay - Shall be allowed 4 paid vacation days per month [NCC 1695] Funeral Expenses In case of death of the house helper: (1) The head of the family shall bear the funeral expenses (2) If the house helper has no relatives in the place where the head of the family lives, with sufficient means. [NCC 1696] Employment Certification ER shall give the househelper a written statement of the nature and duration of the service and his or her efficiency and conduct as househelper upon severance. [Art 151; NCC 1699] Employment Records The employer may keep such records as he may deem necessary to reflect the actual terms and conditions of employment of his househelper, which the latter shall authenticate by signature or thumbmark upon request of the employer. [Art 152] In case of termination

45

Night work prohibition Age Bracket Below 15 y 15 to below 18

Prohibited Hours 8 pm to 6 am (10 hrs) 10 pm to 6 am (8 hrs)

EMPLOYMENT OF THE CHILD IN PUBLIC ENTERTAINMENT NOTE: Please refer to the second exception in the preceding subsection. PROHIBITION OF EMPLOYING MINORS IN CERTAIN UNDERTAKINGS AND IN CERTAIN ADVERTISEMENTS NOTE: Please refer to the second exception.

J. Employment of Househelpers
TOPIC J-I. Definition
Art. 141: This Chapter shall apply to all persons rendering services in households for compensation. "Domestic or household services" shall mean service in the ER's 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 ER's household, including services of family drivers. IRR Rule XII Sec1b (b) The term househelper as used herein is synonymous to the term domestic servant and shall refer to any person, whether male or female, who renders services in and about the employers home and which services are usually necessary or desirable for the maintenance and enjoyment thereof, and ministers exclusively to the persona comfort and enjoyment of the employers family. The term `househelper' is synonymous to the term `domestic servant' and shall refer to any person, whether male or female, who renders services in and about the ER's home and which services are usually necessary or desirable for the maintenance and enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of the ER's family. A househelper or a laundry woman, as well as a gardener, driver, or a houseboy who work in the staff house of a company are NOT househelpers. The criterion is not the nature of the work but the personal comfort and enjoyment of the family of the employer in the home of said employer. (Apex Mining Co. v. NLRC, 1991)

TOPIC J-II. BENEFITS ACCORDED HOUSEHELPERS


Compensation

TOPIC J-III. TERMINATION

(1) Fixed- Security of tenure

LABOR LAW REVIEWER


Termination prior to contract expiry must be for just cause, if the duration of the household service is NOT determined either by stipulation or by the nature of the service, the ER or the househelper may give notice to put an end to the relationship five days before the intended termination of the service. [Art 149; NCC 1697] If the period for household service is fixed, the house helper has a right against termination before the expiration of the term, except for a just cause. (2) Not fixed- Indemnity for unjust termination of service [Art 150; NCC 1698] If the duration of the household service is not fixed either by stipulation or by the nature of the service, the employer or the house helper may give notice to end, the relationship five days before the intended termination. (Rule XII, Book III Sec. 10-17 IRR)

TOPIC K-II. RIGHTS AND BENEFITS ACCORDED HOMEWORKERS


(1) Right to form, join or assist organizations (Sec 3, Rule XIV, Book III). (2) Right to acquire legal personality and the rights and privileges granted by law to legitimate labor organizations upon issuance of the certification of registration (Sec 4, Rule XIV, Book III) (3) Immediate payment upon ERs receipt of finished goods or articles (Sec 6, Rule XIV, Book III) (4) SSS, MEDICARE and ECC premium contributions shall be deducted from their pay and shall be remitted by ER/contractor/subcontractor to the SSS (Sec 6, Rule XIV, Book III) (5) ER may require homeworker to redo work improperly executed without additional pay (Sec 9a, Rule XIV, Book III) (6) ER need not pay homeworker for any work done on goods or articles not returned due to homeworkers fault (Sec 9b, Rule XIV, Book III) (7) If subcontractor/contractor fails to pay homeworker, ER is jointly and severally liable with the former to the homeworker for his/her wage (Sec 11, Rule XIV, Book III) (8) ER shall assist the homeworkers in the maintenance of basic safe and healthful working conditions at the homeworkers place of work. (Sec 11, Rule XIV, Book III) (9) Homework prohibited in the ff: (10) explosives, fireworks and articles of like character; (11) drugs and poisons; and (12) other articles, the processing of which requires exposure to toxic substances. (Sec 13, Rule XIV, Book III) Regional Office shall provide technical assistance to registered homeworkers organizations (Sec 14, Rule XIV, Book III)

46

TOPIC J-IV. RELIEFS FOR UNJUST TERMINATION


If unjustly dismissed, the house helper is entitled to be paid the compensation already earned plus that for 15 days by way of indemnity.

K. Employment of Homeworkers
TOPIC K-I. Definition
Note: DO 5, DOLE (February 4, 1992), is now Rule XIV, Book III of the IRRI. Sec. 1, Rule XIV, Book III: [Homeworker] applies to any person who performs industrial homework for an employer, contractor, or sub-contractor. Sec. 2(a), Rule XIV, Book III: Industrial homework (1) Is a system of production under which work for an ER or contractor is carried out by a homeworker at his/her home. (2) Materials may or may not be furnished by the ER or contractor. (3) Decentralized form of production, where there is ordinarily very little supervision or regulation of methods of work. Definition of employer Art. 155: The employer means any person who (1) Acts as a contractor delivers or causes to be delivered any goods, articles, or materials to be processed or fabricated in or about a home and thereafter to be returned or to be disposed of or distributed in accordance with ERs direction; or (2) Sells any goods, articles, or materials to be processed or fabricated in or about a home and then rebuys them after. Note: Sec 2(d), Rule XIV, Book III is substantially similar to the above.

TOPIC K-III. CONDITIONS FOR DEDUCTION FROM HOMEWORKERS EARNINGS


Sec. 8, Rule XIV, Book III: Deduction - No deduction from the homeworkers earnings for the value of materials lost, destroyed or damaged unless: (1) Homeworker is clearly shown to be responsible for loss or damage (2) Reasonable opportunity to be heard (3) Amount of deduction is fair and reasonable, and does not exceed actual loss or damage (4) Deduction does not exceed 20% of homeworkers weekly earnings

LABOR LAW REVIEWER

L. Apprentices and Learners


APPRENTICES Definition Art. 58: An apprentice is a worker who is covered by a written apprenticeship agreement with an individual employer. Apprenticeship means practical training on the job supplemented by related theoretical instruction. An Apprenticeable occupation means any trade, form of employment or occupation which requires more than three (3) months of practical training on the job supplemented by related theoretical instruction. Note: Art. 58 has been superseded by Section 4 (j), (k), (l), (m) of RA 7796 quoted below: RA 7796, Sec. 4: (j)"Apprenticeship" training within employment with compulsory related theoretical instruction involving a contract between an apprentice and an employer on an approved apprenticeable occupation. (k)Apprentice" is a person undergoing training for an approved apprenticeable occupation during 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. Apprenticeable occupation RA 7796, Sec. 4(m): Apprenticeable Occupation is an occupation officially endorsed by a tripartite body and approved to be apprenticeable by the authority. The act of filing the proposed apprenticeship program with the DOLE is a preliminary step towards its final approval, and does not instantaneously give rise to an employer-apprentice relationship. It must be duly approved by the Minister of Labor and Employment. Hence, since the apprenticeship agreement between petitioner and respondent has no force and effect, respondent's assertion that he was hired not as an apprentice but as a delivery boy deserves credence. (Nitto Enterprises vs. NLRC, 1995) Qualifications RA 7160, Sec. 12 as amended by RA 7658, Sec. 1: Children below fifteen (15) years of age shall not be employed except: (1) When a child works directly under the sole responsibility of his parents or legal guardian and where only members of the employer's family are employed: Provided, however, That his employment neither endangers his life, safety, health and morals, nor impairs his normal development: Provided, further, That

the parent or legal guardian shall provide the said minor child with the prescribed primary and/or secondary education; o (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 approval of the Department of Labor and Employment: and Provided, 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 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 child, a work permit from the Department of Labor and Employment which shall ensure observance of the above requirements. The Department of Labor and Employment shall promulgate rules and regulations necessary for the effective implementation of this Section. Art. 59: Qualifications of Apprentice: (b) Possess vocational aptitude and capacity for appropriate tests; and (c) Possess the ability to comprehend and follow oral and written instructions. Integrating both the abovementioned provisions then the qualifications of an apprentice are as follows: (1) At least 15 years of age (as amended by R.A. 7610), provided that if he is below 18 years, he shall not be eligible for hazardous occupation; (2) Possess vocational aptitude and capacity for appropriate tests; (3) Possess the ability to comprehend and follow oral and written instructions. (Art. 59 of the LC, as amended by R.A. 7610). Allowed employment SEE: RA 7769, Sec. 4 (m) above LC Art. 60: Only employers in the highly technical industries may employ apprentices and only in apprenticeable occupations approved by the Secretary of Labor and Employment. Employment of Apprentices: When applicable: (1) Only employers in highly technical industries may employ apprentices; and

34

47

LABOR LAW REVIEWER


(2) Only in apprenticeable occupations approved by the Secretary of Labor. (Art. 60) Terms and conditions LC Art. 61: Apprenticeship agreements, including the wage rates of apprentices, shall conform to the rules issued by the Secretary of Labor and Employment. The period of apprenticeship shall not exceed six months. Apprenticeship agreements providing for wage rates below the legal minimum wage, which in no case shall start below 75 percent of the applicable minimum wage, may be entered into only in accordance with apprenticeship programs duly approved by the Secretary of Labor and Employment. The Department shall develop standard model programs of apprenticeship. Note: Wage Order No. NCR-14, May 16, 2008 also provides that the wages of apprentices and learners shall in no case be less than seventy-five percent (75%) of the applicable minimum wage rates. LC Art. 72: The Secretary of Labor and Employment may authorize the hiring of apprentices without compensation whose training on the job is required by the school or training program curriculum or as requisite for graduation or board examination. Enforcement LC Art. 65: Upon complaint of any interested person or upon its own initiative, the appropriate agency of the Department of Labor and Employment or its authorized representative shall investigate any violation of an apprenticeship agreement pursuant to such rules and regulations as may be prescribed by the Secretary of Labor and Employment. LC Art. 66: The decision of the authorized agency of the Department of Labor and Employment may be appealed by any aggrieved person to the Secretary of Labor and Employment within five (5) days from receipt of the decision. The decision of the Secretary of Labor and Employment shall be final and executory. LC Art. 67: No person shall institute any action for the enforcement of any apprenticeship agreement or damages for breach of any such agreement, unless he has exhausted all available administrative remedies. LC Art. 71: An additional deduction from taxable income of one-half (1/2) of the value of labor training expenses incurred for developing the productivity and efficiency of apprentices shall be granted to the person or enterprise organizing an apprenticeship program: Provided, That such program is duly recognized by the Department of Labor and Employment: Provided, further, That such deduction shall not exceed ten (10%) percent of direct labor wage: and Provided, finally, That the person or enterprise who wishes to avail himself or itself of this incentive should pay his apprentices the minimum wage. Summary of Rules: What are the features of Apprenticeship Training? (1) The apprentice must be paid not less than 75% of the prescribed minimum salary (Art. 61); Exception: The employer MAY NOT pay any wage if the apprenticeship training is: a. part of the school curriculum, b. a requirement for graduation, or c. a requirement for board examination (Art. 72) (2) The apprenticeship agreement must be approved by the DOLE Secretary (without such one shall be deemed a regular employee) (Nitto Enterprises v. NLRC, G.R. No. 114337, Sept. 29, 1995); (3) The employer is not compelled to continue ones employment upon termination of apprenticeship; (4) One-half (1/2) of the value of labor training expenses incurred for developing the productivity and efficiency of apprentices of the training cost is deducted from the employers income tax but it shall not exceed 10% of direct labor wage (Art. 71) Requisites of the deduction: a. Apprenticeship program must be duly approved by the DOLE; b. Deduction shall NOT exceed 10% of direct labor wage; c. Employer must pay his apprentices the minimum wage. Working scholars there is no employer-employee relationship between students on one hand, and schools, colleges or universities on the other, where there is written agreement between them under which the former agree to work for the latter in exchange for the privilege to study free of charge, provided, the students are given real opportunities, including such facilities as may be reasonable and necessary to finish their chosen courses under such agreement. (Sec. 14, Rule X, IRR)LEARNERS Definition RA 7796, Sec. 4: "Learners" refers to persons hired as trainees in semi-skilled and other industrial occupations which are non-apprenticeable. Learnership programs must be approved by the authority. Art. 73, sentence 2: [Occupations] which may be learned through practical training on the job in a relatively short period of time which shall not exceed three (3) months. Allowed employment LC Art. 74: Learners may be employed when no experienced workers 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.

48

LABOR LAW REVIEWER


When learners may be hired (1) No experienced workers are available; (2) The employment of learners being necessary to prevent the curtailment of employment opportunities; and (3) The employment will neither create unfair competition in terms of labor costs nor impair working standards. Terms and conditions of employment LC Art. 75. Any employer desiring to employ learners shall enter into a learnership agreement with them, which agreement shall include: (1) The names and addresses of the learners; (2) The duration of the learnership period, which shall not exceed three (3) months; (3) The wages or salary rates of the learners which shall begin at not less than seventy-five percent (75%) of the applicable minimum wage; and (4) A commitment to employ the learners if they so desire, as regular employees upon completion of the learnership. All learners who have been allowed or suffered to work during the first two (2) months shall be deemed regular employees if training is terminated by the employer before the end of the stipulated period through no fault of the learners. (5) The learnership agreement shall be subject to inspection by the Secretary of Labor and Employment or his duly authorized representative. LC Art. 76: Learners employed in piece or incentive-rate jobs during the training period shall be paid in full for the work done. LC Art. 77: Any violation of this Chapter or its implementing rules and regulations shall be subject to the general penalty clause provided for in this Code. Summary of Rules What are the features of Learnership? (1) The duration of learnership shall not exceed 3 months (Art. 73); (2) If the learnership of 3 months is completed, the employer may be compelled to continue with the services of the learner as a regular employee (Art. 75[d]); (3) There is a commitment from the employer to employ the learners if they so desire, as regular employees upon completion of the learnership (Art. 75[d]); (4) If the learner is dismissed from service without just and valid cause and without due process after 2 months of service, he will be deemed as regular employee; and (5) The wages or salary rates of the learners which shall begin at not less than 75% of the applicable minimum wage. Distinctions between Learnership and Apprenticeship Apprenticeship Learnership Highly technical Semi-skilled industrial industries occupations Practical training Practical training supplemented by related whether or not such theoretical instruction practical training is supplemented by theoretical instructions Apprenticeable Non-apprenticeable occupations approved by occupations the SOLE Written apprentice Learnership agreement agreement ratified by the appropriate committees More than three months, Shall not exceed 3 shall not exceed six months months (1) The person is at least (1) When no fifteen (15) years of experienced age, provided those workers are who are at least available; fifteen (15) years of (2) The employment of age but less than learners is eighteen (18) may be necessary to eligible for prevent curtailment apprenticeship only of employment in non-hazardous opportunities; and occupation; (3) The employment (2) The person is does not create physically fit for the unfair competition occupation in which in terms of labor he desires to be costs or impair or trained; lower working (3) The person possesses standards. vocational aptitude and capacity for the particular occupation as established through appropriate tests; and (4) The person is able to comprehend and follow oral and written instructions Wage rate shall begin at Wage rate shall begin at not less than 75% of the not less than 75% of the min wage min wage No Learners in compensation if piecework shall SOLE authorizes, be paid in full as OJT is for the work required by the done. school - A commitment to employ the learners if they so desire, as regular employees upon completion of the learnership. - All learners who have been allowed or suffered to work during the first two (2) months shall be deemed regular 1.

49

LABOR LAW REVIEWER


employees if training is terminated by the employer before the end of the stipulated period through no fault of the learners. Deductibility of of training costs incurred, provided: Program is duly recognized by DOLE Deduction shall not exceed 10% of direct labor wage Payment of minimum wage to apprentices development persons. shall be reserved for disabled

iii. Sheltered employment RA 7277, Sec. 6: 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 inclinations to ensure a good working atmosphere and efficient production. iv. Apprenticeship opportunity RA 7277, Sec. 7: 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. v. Wages Sec 7 of Wage Order No. NCR-14, May 16, 2008: All qualified handicapped workers shall receive the full amount of the minimum wage rate prescribed herein. In this light, the Magna Carta for Disabled Persons mandates that a qualified disabled EE should be given the same terms and conditions of employment as a qualified able-bodied person. Since the Magna Carta accords them the rights of qualified ablebodied persons, they are thus covered by Article 280 of the Labor Code. In the present case, the handicap of petitioners (deaf-mutes) is NOT a hindrance to their work. The eloquent proof of this statement is the repeated renewal of their employment contracts. (Bernardo v. NLRC, 1999)

50

M. Handicapped Workers (RA 7277) Differently-abled Workers


TOPIC M-I. DEFINITION OF HANDICAPPED WORKERS
RA 7277, Sec. 4: (a) Disabled Persons are those suffering from restriction or different abilities, as a result of a mental, physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human being (b) Impairment is any loss, diminution or aberration of psychological, physiological, or anatomical structure or function (c) Disability shall mean: 1.) physical or mental impairment that substantially limits one or more psychological, physiological or anatomical function of an individual or activities of such individual; 2.) a record of such an impairment; 3.) or being regarded as having such an impairment (d) Handicap refers to a disadvantage for a given individual, resulting from an impairment or a disability, that limits or prevents the function or activity, that is considered normal given the age and sex of the individual.

TOPIC M-III. PROHIBITIONS ON Discrimination Against Disabled Persons


RA 7277, SEC. 32. Discrimination of 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 compensation, job training and other terms, conditions and privileges of employment. The following constitute acts of discrimination: (1) Limiting, segregating or classifying a disabled job applicant in such a manner that adversely affects his work opportunities (2) 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 related for the position in question and are consistent

TOPIC M-II. RIGHTS OF DISABLED WORKERS


i. Equal opportunity for employees RA 7277, Sec. 5 (par. 1): No disabled person shall be denied access to opportunities for suitable employment. A qualified disabled EE 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 ii. Reserved contractual positions RA 7277, Sec. 5 (par. 2): 5% of all casual, emergency and contractual positions in the DSWD; DOH, DepEd; and other government agencies, offices or corporations engaged in social

LABOR LAW REVIEWER


with business necessity; (3) Utilizing standards, criteria, or methods of administration that: a. have the effect of discrimination on the basis of disability; or b. perpetuate the discrimination of others who are the subject to common administrative control. (4) Providing less compensation, such as salary, wage or other forms of remuneration and fringe benefits, to qualified disabled employee, by reason of his disability, than the amount to which a non-disabled person performing the same work is entitled; (5) 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; (6) Re-assigning or transferring a disabled employee to a job or position he cannot perform by reason of his disability; (7) 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 the disabled persons; (8) 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 test purports to measure, rather than the impaired sensory, manual or speaking skills of such applicant or employee, if any; and (9) Excluding disabled persons from membership in labor unions or similar organizations. RA 7277, SEC. 33. Employment Entrance Examination.- Upon an offer of employment, a disabled applicant may be subjected to medical examinations, on the following occasions: (a) all entering employees are subjected to such an examination regardless of disability; (b) Information obtained during the medical condition or history of the applicant is collected and maintained on separate forms and in separate medical files and is treated as a confidential medical record; Provided, however, That: (1) supervisors and managers may be informed regarding necessary restrictions on the work or duties of the employees and necessary accommodations: (2) first aid and safety personnel may be informed, when appropriate, if the disability might require emergency treatment; (3) government officials investigating compliance with this Act shall be provided relevant information on request; and (4) the results of such examination are used only in accordance with this Act.

51

TOPIC M-IV. INCENTIVES FOR EMPLOYERS


Tax incentives for employment of disabled persons RA 7277, Sec. 8 (b): Private entities that employ disabled persons who meet the required skills or qualifications, either as regular employee, apprentice or learner, shall be entitled to an additional deduction, from their gross income, equivalent to 25% of the total amount paid as salaries and wages to disabled persons: Provided, however, That such entities present proof as certified by the Department of Labor and Employment and the Department of Health as to his disability, skills, and qualifications. Tax incentives for construction of disabledfriendly facilities RA 7277, Sec. 8 (c): Private entities that improve or modify their physical facilities in order to provide reasonable accommodation for disabled persons shall also be entitled to an additional deduction from their net taxable income, equivalent to 50% of the direct costs of the improvements or modifications. This Section, however, does NOT apply to improvements or modifications or facilities required under BP 344.

IV. Termination of Employment


A. Employer-employee relationship
TOPIC A-I. TESTS FOR DETERMINING ER EE RELATIONSHIP
The existence or absence of ER-EE relationship is a question of law and a question of fact, each in its defined sense. The recognition of the existence of ER-EE relationship is not dependent upon the agreement of the parties. The characterization of the law prevails over that in the contract. In this sense, the existence of an EE-ER relationship is a matter of law. (Tabas et.al. v. California Manufacturing Co., et. Al., G.R. No. 80680, January 26, 1989). The conclusion that an EE-ER relationship depends upon the facts of each case. In this sense, it is a question of fact. (SSS v. CA, G.R. No. 100388, Dec. 14, 2000).

LABOR LAW REVIEWER


The four-fold test is composed of four elements. This test is the yardstick to determine employeremployee relationship: (1) selection and engagement of the employee; (2) payment of wages; (3) power of dismissal; and (4) employers power to control the employees conduct with respect to the means and methods by which the work is to be accomplished. (Brotherhood Labor Unity Movement of the Philippines et. al. v. Zamora, G.R. No. 48645, Jan. 7, 1987). Power to control is the most important element. (Sonza v. ABS-CBN Broadcasting Corp, G.R. No. 138051, June 10, 2004) The control test calls merely for the existence of the right to control and not the actual exercise of the right. (Zanotte Shoes v. NLRC, G.R. No. 100665, Feb. 13, 1995) Not every form of control will have the effect of establishing ER-EE relationship. The line should be drawn between: (1) Rules that merely serve as guidelines towards the achievement of mutually desired results without dictating the means or methods to be employed in attaining it. These aim only to promote the result. In such case, NO EE-ER relationship exists. (2) Rules that control or fix the methodology and bind or restrict the party hired to the use of such means. These address both the result and the means used to achieve it and hence, EE-ER relationship exists. (Insurance Life v. NLRC, G.R. No. 84484, Nov. 15, 1989) Economic Dependence Test two-tiered approach. (1) First Tier: Control Test (refer to the FourFold Test) (2) Second Tier: The underlying economic realities of the activity or relationship. (Sevilla v. Court of Appeals). The benchmark of economic reality in analyzing possible employment purposes ought to be the economic dependence of the worker on his employer. The standard of economic dependence is whether the worker is dependent on the alleged employer for his continued employment in that line of business. (Francisco v. NLRC, G.R. No. 170087, Aug. 31, 2006). 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. IRR, Book VI, Rule 1, Sec. 6(d): In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as regular employee at the time of his engagement. Where no standards are made known to the employee at the time of engagement, he shall be deemed a regular employee. Not to exceed six (6) months from the date the employee started working, unless covered by an apprenticeship agreement stipulating a longer period. Definition A probationary employee is one who is on trial by an employer during which the employer determines whether or not he is qualified for permanent employment (International Catholic Migration Comm. vs. NLRC, 1989) Termination - Can only be terminated for: (1) Just causes; or (2) Failure to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of engagement. Note: The probationary employee is entitled to substantial and procedural due process before termination. Limitations to termination (1) It must be exercised accordance with the specific requirements of the contract (2) If a particular time is prescribed, the termination must be within such time and if formal notice is required, then that form must be used; (3) The employers dissatisfaction must be real and in good faith, not feigned so as to circumvent the contract or the law; (4) There must be no unlawful discrimination in the dismissal. (Manila Hotel Corporation v. NLRC, G.R. No. 53453, January 22, 1986). Purposes (1) Observance Period for employer to determine if employee is qualified and for employee to demonstrate to the ER his skills (2) Restrictive- As long as the termination was made before the expiration of the six-month probationary period, the employer has a right to sever the employer-employee relationship Indeed, the employer has the right or is at liberty to choose as to who will be hired and who will be declined. It is within the exercise of this right to select his employees that the employer may set or

52

TOPIC A-II. PROBATIONARY EMPLOYMENT


Art. 281. Probationary Employment Probationary employment shall not exceed 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

LABOR LAW REVIEWER


fix a probationary period within which the latter may test and observe the conduct of the former before hiring him permanently. The right of a laborer to sell his labor to such persons as he may choose is, in its essence, the same as the right of an employer to purchase labor from any person whom it chooses. The employer and the employee have thus an equality of right guaranteed by the Constitution. (Grand Motors Corp. vs. MOLE, 1984) Duration Petitioner claims that under the terms of his contract, his probationary employment was only for five months as indicated by the remark "Please be informed that after five months, your performance shall be evaluated and any adjustment in salary shall depend on your work performance." The argument lacks merit. As correctly held by the labor arbiter, the appointment contract also stated in another part that petitioners employment status was "probationary (6 mos.)." The five-month period referred to the evaluation of his work. (Alcira vs. NLRC, 2004) Generally, the probationary period of employment is limited to six (6) months. The exception to this general rule is when the parties to an employment contract may agree otherwise, such as when the same is established by company policy or when the same is required by the nature of work to be performed by the employee. In the latter case, there is recognition of the exercise of managerial prerogatives in requiring a longer period of probationary employment, such as in the present case where the probationary period was set for eighteen (18) months, i.e. from May, 1980 to October, 1981 inclusive, especially where the employee must learn a particular kind of work such as selling, or when the job requires certain qualifications, skills, experience or training. (Busier vs. Leogardo, 1984) Honasan was certainly under observation during her three-week on-the-job training. If her services proved unsatisfactory then, she could have been dropped as early as during that period. But she was not. On the contrary, her services were continued, presumably because they were acceptable, although she was formally placed this time on probation. Even if it be supposed that the probation did not end with the three-week period of on-the-job training, there is still no reason why that period should not be included in the stipulated six-month period of probation. Honasan was accepted for on-the-job training on April 15, 1991. Assuming that her probation could be extended beyond that date, it nevertheless could continue only up to October 15, 1991, after the end of six months from the earlier date. Under this more lenient approach, she had become a regular employee of Holiday Inn and acquired full security of tenure as of October 15, 1991. (Holiday Inn Manila vs. NLRC, 1993) Paras started reporting for work on May 27, 1996. The employers unanimously agreed that his performance was unsatisfactory. On November 26, 1996, he received a Notice of Termination dated November 25, 1996, Applying Article 13 of the Civil Code, the probationary period of six (6) months consists of one hundred eighty (180) days. As clearly provided for in the last paragraph of Article 13, in computing a period, the first day shall be excluded and the last day included. Thus, the one hundred eighty (180) days commenced on May 27, 1996, and ended on November 23, 1996. By the time Paras received the letter he was already a regular employee of the petitioner under Article 281 of the Labor Code. (Mitsubishi Motors vs. Chrysler Union, 2004) To reiterate, the rule summarized as follows: on duration may be

53

General Rule: Probationary employment shall not exceed six (6) months from the date the employee started working. Exceptions: (1) When the parties to an agreement contract otherwise: (2) When the same is established by company policy; (3) When the same is required by the nature of the work performed by the employee; and (4) When it is covered by an apprenticeship agreement stipulating a longer period Question: May the employer and the employee validly agree to extend the probationary period beyond 6 months? If the extension was ex gratia, an act of liberality on the part of his employer affording him a second chance to make good after having initially failed to prove his worth as an employee. Such an act cannot now unjustly be turned against said employers account to compel it to keep on its payroll one who could not perform according to its work standards. (Mariwasa Manufacturing v. Leogardo, G.R. No. 74246, Jan. 26, 1989). Criteria for regularization must be disclosed In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee. Conversely, an employer is deemed to substantially comply with the rule on notification of standards if he apprises the employee that he will be subjected to a performance evaluation on a particular date after his hiring. (Alcira vs. NLRC, 2004) Regular Status After Probation When the bank renewed the contract after the lapse of the six-month probationary period, the employees thereby became regular employees. No employer is allowed to determine indefinitely the fitness of its employees. (Bernardo vs. NLRC, 1999)

LABOR LAW REVIEWER


Absorbed employees The private respondents could not be considered probationary employees because they were already well-trained in their respective functions. As stressed by the Solicitor General, while private respondents were still with the CCAS they were already clerks. Respondent Gelig had been a clerk for CCAS for more than ten (10) years, while respondent Quijano had slightly less than ten (10) years of service. They were, therefore, not novices in their jobs but experienced workers. (Cebu Stevedoring Co., Inc. vs. Regional Director, 1988) Double probation There is no basis for subjecting an employee to a new probationary or temporary employment where he had already become a regular employee when he was absorbed by a sister company. (A Prime Security Services, Inc. vs. NLRC, 2000) Termination and salary A probationary employee enjoys only a temporary employment status. This means that he is terminable at any time, permanent employment not having been attained in the meantime. The employer could well decide he no longer needed the probationary employees services or his performance fell short of expectations, etc. As long as the termination was made before the termination of the six-month probationary period, the employer was well within his rights to sever the employeremployee relationship. A contrary interpretation would defect the clear meaning of the term probationary. (De la Cruz, Jr. vs. NLRC, 2004) Private school teachers The provisions of Article 280 of the Labor Code are not applicable to the present case especially with respect to the issue of respondent's acquisition of security of tenure. It is settled that questions respecting a private school teachers entitlement to security of tenure are governed by the Manual of Regulations for Private Schools and not the Labor Code. (Paragraph 75 of the 1970 Manual) (Aklan College vs. Guarino, 2007) (2) if the employee has been performing the job for at least a year. (Pangilinan vs. Gen. Milling Corp., 2004) (i) Reasonable connection rule: Standard of determination The primary standard in determining 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 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. The repeated and continuing need for the performance of the job has been deemed sufficient evidence of the necessity, if not indispensability of the activity to the business. In the case at bar, continuous and repeated rehiring, some for nearly two decades, of these bill collectors indicate the necessity and desirability of their services, as well as the importance of the role of bill collectors in the MWSS. (Lopez vs. MWSS, 2005) Hiring for an extended period Where the employment of project employees is extended long after the supposed project has been finished, the employees are removed from the scope of project employees and considered regular employees. (Audion Electric Co., Inc. vs. NLRC, 1999) Repeated renewal of contract Beta Electric Corp. vs. NLRC, 1990 The petitioner cannot rightfully say that since the private respondent's employment hinged from contract to contract, it was "temporary", depending on the term of each agreement. Under the Labor Code, an employment may only be said to be "temporary" "where: (1) [it] has been fixed for a specific undertaking, the completion of or termination of which has been determined at the time of the engagement of the employee or (2) where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. Quite to the contrary, the private respondent's work, that of "typist-clerk" is far from being "specific" or "seasonal", but rather, one "where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business." And under the Code, where one performs such activities, he is a regular employee, "[t]he provisions of written agreement to the contrary notwithstanding It is true that in Biboso vs Victorias Milling Company, Inc. we recognized the validity of contractual stipulations as to the duration of employment. But we cannot apply it here because clearly, the contract-to-contract arrangement given to the private respondent was but an artifice to prevent her from acquiring security of tenure and to frustrate constitutional decrees. Length of time involved

54

TOPIC A-III. KINDS OF EMPLOYMENT a) Regular employment


Regular employment is not synonymous with permanent employment, because there is no such thing as a permanent employment. Any employee may be terminated for just cause. A regular employee is one who is engaged to perform activities which are necessary and desirable in the usual business or trade of the employer as against those which are undertaken for a specific project or are seasonal. There are two separate instances whereby it can be determined that an employment is regular: (1) if the particular activity performed by the employee is necessary or desirable in the usual business or trade of the employer; and,

LABOR LAW REVIEWER


Length of time not controlling, merely serves as a badge of regular employment. (Maraguinot vs. NLRC, 1998) construction companies. (Samson v. NLRC, G.R. No. 11366, Feb. 1, 1996). SEE Policy No. 2 of 1997 and D.O. 19 of 1993 Samson vs. NLRC (1996): When the present action for regularization was filed on November 5, 1989 and during the entire period of petitioner's employment with private respondent prior to said date, the rule in force then was Policy Instruction No. 20, which required the employer company to report to the nearest Public Employment Office the fact of termination of a project employee as a result of the completion of the project or any phase in which he is employed. Furthermore, Department Order No. 19, which was issued on April 1, 1993, did not totally dispense with the notice requirement. Instead, it made provisions and considered it (i.e. the notice) as one of the "indicators" that a worker is a project employee.

b) Project employment
Employment fixed on a specific project or undertaking, completion or termination of which is determined at the time of engagement of the employee. Must have been forewarned of the nature/scope and duration of the project. Whether or not the project has a direct relation to the business of the ER is not important, BUT: EE must be informed of the nature and duration of project project and principal business of ER are two separate things no attempt to deny security of tenure to the worker Test of project employment The principal test for determining whether employees are properly characterized as "project employees," as distinguished from "regular employees," is whether or not the project employees were assigned to carry out a "specific project or undertaking," the duration and scope of which were specified at the time the employees were engaged for that project. As defined, project employees are those workers hired: (1) for a specific project or undertaking, and (2) the completion or termination of such project or undertaking has been determined at the time of the engagement of the employee. (PNOC Energy Devt Corp vs. NLRC, 2007) (i) Indicators of project employment (1) The duration of the specific/identified undertaking for which the worker is engaged is reasonably determinable; (2) Such duration, as well as the specific work/service to be performed, is defined in an employment agreement and is made clear to the employee at the time of the hiring; (3) The work/service to be performed by the employee is in connection with the particular project/undertaking for which he is engaged; (4) The employee, while not employed and awaiting engagement, is free to offer his services to any other employer; (5) The termination of his employment in the particular project/undertaking is reported to the DOLE Regional Office having jurisdiction over the workplace within 30 days following the date of his separation from work, using the prescribed form on employees terminations /dismissals /suspensions; (6) An undertaking in the employment contract by the employer to pay completion bonus to the project employee as practiced by most

55

39
Work pool employee A project EE or a member of a work pool may acquire the status of a regular employee when the following concur: (1) There is a continuous rehiring of project employees even after cessation of a project; and (2) The tasks performed by the alleged project employee are vital, necessary, and indispensable to the usual business or trade of the employer. However, the length of time during which the EE was continuously rehired is not controlling, but merely serves as a badge of regular employment. A work pool may exist although the workers in the pool do not receive salaries and are free to seek other employment during temporary breaks in the business, provided, that the worker shall be available when called to report for a project. Although primarily applicable to regular seasonal workers, this set-up can likewise be applied to project workers insofar as the effect of temporary cessation of work is concerned. (Maraguinot vs. NLRC, 1998) Members of a work pool from which a construction company draws its project employees, if considered employees of the construction company while in the work pool, are non-project employees, or employees for an indefinite period. If they are employed in a particular project, the completion of the project or any phase thereof will not mean severance of the employer-employee relationship. (Aguilar Corp. vs. NLRC, 1997) Rationale for project employment If a project has already been completed, it would be unjust to require the employer to maintain them in the payroll while they are doing absolutely nothing except waiting until another project is begun, if at all. In effect, these stand-by workers would be enjoying the status of privileged retainers, collecting payment for work not done, to be

LABOR LAW REVIEWER


disbursed by the employer from profits not earned. (De Ocampo vs. NLRC, 1990) Examples of project employment Private respondents, as well as the other 30 workers, were needed as additional hands for the renovation work and not for ordinary upkeep and maintenance. The erection of the fire escape and other small jobs after the renovation cannot be deemed maintenance but more of casual work. (Phil. Jai-Alai and Amusement Corp. vs. Clave, 1983) The corporation does not construct vessels for sale or otherwise which will demand continuous production of ships and will need regular workers. It merely accepts contracts for ship-building or for repair of vessels from third parties. It is only on occasion when it has work contract of this nature that it hires workers to do the job which, needless to say, lasts only for less than a year or longer. Completion of their work or project automatically terminates their employment. (Sandoval Shipyards, Inc. vs. NLRC, 1985) Petitioner was engaged to perform data encoding and keypunching, and her employment was fixed for a specific project or undertaking the completion or termination of which had been determined at the time of her engagement. [This] may be observed from the series of employment contracts between petitioner and private respondent, all of which contained a designation of the specific job contract and a specific period of employment. (Imbuido vs. NLRC, 2000) Employer obligation to make standards known The law is clear that in all cases involving employees engaged on probationary' basis, the employer shall make known to the employee at the time he is hired, the standards by which he will qualify as a regular employee. Nowhere in the employment contract executed between petitioner and respondent Grulla is there a stipulation that the latter shall undergo a probationary period for three months before he can quality as a regular employee. There is also no evidence on record showing that the respondent Grulla had been apprised of his probationary status and the requirements which he should comply in order to be a regular employee. In the absence of these requisites, there is justification in concluding that respondent Grulla was a regular employee at the time he was dismissed by petitioner, and as such cannot be done without just and authorized cause. (A. M. Oreta and Co., Inc. vs. NLRC, 1989) Specified period The Court has upheld the legality of fixed-term employment. It ruled that the decisive determinant in term employment should not be the activities that the employee is called upon to perform but the day certain agreed upon by the parties for the commencement and termination of their employment relationship. But, this Court went on to say that where from the circumstances it is apparent that the periods have been imposed to preclude acquisition of tenurial security by the employee, they should be struck down or disregarded as contrary to public policy and morals. (Purefoods Corp. vs. NLRC, 1987) Continuous rehiring Despite the insistence of petitioner that they were project employees, the facts show that as masons, carpenters and fine graders in petitioners various construction projects, they performed work which was usually necessary and desirable to petitioners business which involves construction of roads and bridges. It is not enough that an employee is hired for a specific project or phase of work. There must also be a determination of, or a clear agreement on, the completion or termination of the project at the time the employee was engaged. This second requirement was not met in this case. (Chua vs. Court of Appeals, 2004) The fact that the workers have been employed with the company for several years on various projects, the longest being nine (9) years, did not automatically make them regular employees considering that the definition of regular employment in Article 280 of the Labor Code, makes specific exception with respect to project employment. The re-hiring of petitioners on a project-to-project basis did not confer upon them regular employment status. The practice was dictated by the practical consideration that experienced construction workers are more preferred. It did not change their status as project employees. (C.E. Construction Corp vs. Cioco, 2004) (1) Circumstances that Make a Project Employee Regular (Maraguinot vs. NLRC, 1998) (2) Work Pool Employee

56

c) Seasonal employment
Work or services to be performed are seasonal in nature, employment is for the duration of the season. No continuing need for the worker. Regular Seasonal Employees After One Season Regular seasonal employees are those called to work from time to time. The nature of their relationship with the employer is such that during off season they are temporarily laid off but during summer season they are reemployed, or when their services may be needed. They are not, strictly speaking, separated from the service but are merely considered as on leave of absence without pay until they are reemployed. Their employment relationship is never severed but only suspended. As such those employees can be considered as in the regular employment of the employer. (Manila Hotel Co. v. CIR, G.R. No. L-18875, Sept. 30, 1963). Hacienda Bino vs. Cuenca (2005): For respondents to be excluded from those classified as regular employees, it is not enough that they

LABOR LAW REVIEWER


perform work or services that are seasonal in nature. They must have been employed only for the duration of one season. While the records sufficiently show that the respondents work in the hacienda was seasonal in nature, there was, however, no proof that they were hired for the duration of one season only. In fact, the payrolls, submitted in evidence by the petitioners, show that they availed the services of the respondents since 1991. Absent any proof to the contrary, the general rule of regular employment should, therefore, stand. The disparity in facts between the Mercado Sr., vs. NLRC case case and the instant case is best exemplified by the fact that the farm laborers, work only for a definite period for a farm worker, after which they offer their services to other farm owners. In Mercado, although respondent constantly availed herself of the petitioners services from year to year, it was clear from the facts therein that they were not in her regular employ. In other words, they worked for respondent, but were nevertheless free to contract their services with other farm owners. St. Theresas School vs. NLRC (1998): Article 280 of the Labor Code does not proscribe or prohibit an employment contract with a fixed period provided the same is entered into by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstance vitiating consent. (1) It does not necessarily follow that where the duties of the employee consist of activities usually necessary or desirable in the usual business of the employer, the parties are forbidden from agreeing on a period of time for the performance of such activities. There is thus nothing essentially contradictory between a definite period of employment and the nature of the employee's duties. (2) It goes without saying that contracts or employment govern the relationship of the parties. In this case, private respondent's contract provided for a fixed term of nine (9) months, from June 1, 1991 to March 31, 1992. Such stipulation, not being contrary to law, morals, good customs, public order and public policy, is valid, binding and must be respected. However, the Court upholds the principle that where from the circumstances it is apparent that periods have been imposed to preclude acquisition of tenurial security by the employee, they should be disregarded for being contrary to public policy. (Servidad vs. NLRC, 1999) (i)Requisites for validity Fixed-period employees/ term employment This arrangement does NOT circumvent Security of Tenure when: (1) Knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure or any other circumstances vitiating his consent; OR (2) The employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter. Brent Doctrine (Brent School v. Zamora, 1990; Romares v. NLRC, 1998; Medenilla v. Phil. Veterans Bank, 2000) (3) If a 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 the employment contract. (Medenilla v. Phil. Veterans Bank, 2000)

57

d) Casual employment
When not regular, project or seasonal employee. Requirements to become Regular employees: (1) one (1) year service, continuous or broken (2) with respect to activity employed (3) employment shall continue while such activity exists Nature of work What determines regularity or casualness is not the employment contract, written or otherwise, but the nature of the job. If the job is usually necessary or desirable to the main business of the employer, then employment is regular. (A. M. Oreta and Co., Inc. vs. NLRC, 1989) One-year service Tabas vs. California Marketing Co., Inc. (1989): The fact that the petitioners have been hired on a "temporary or seasonal" basis merely is no argument either. As held in Philippine Bank of Communications v. NLRC, a temporary or casual employee, under Article 281 of the Labor Code, becomes regular after service of one year, unless he has been contracted for a specific project. And we cannot say that merchandising is a specific project for the obvious reason that it is an activity related to the day-to-day operations of California. The records show that the petitioners had been given an initial six month contract, renewed for another six months. Accordingly, under Article 281 of the Code, they had become regular employees of California and had acquired a secure tenure. Hence, they cannot be separated without due process of law.

TOPIC A-IV. JOB CONTRACTING AND LABORONLY CONTRACTING


NOTE: These provisions should be read in conjunction with the latest Department Order regulating contracting and subcontracting, D.O. 18-A, Series of 2011 (November 14, 2011). Substantial capital refers to paid-up capital stocks/shares of at least P3,000,000 in the case of corporations, partnerships and cooperatives; in case of

e) Fixed term employment

LABOR LAW REVIEWER


single proprietorship, a net worth of at least P3,000,000. (Sec 3, D.O. 18-A-11) A Service Agreement ensures compliance with all the rights and benefits under Labor Laws. (Sec. 4, D.O. 18-A-11) Service agreement refers to the contract between the principal and contractor containing the terms and conditions governing the performance or completion of a specific job, work or service being farmed out for a definite or predetermined period. Mafinco vs. Ople (1976): When an independent contractor and not an employee: We recognize that contracting out is not unlimited; rather, it is a prerogative that management enjoys subject to well-defined legal limitations. As we have previously held, the company can determine in its best business judgment whether it should contract out the performance of some of its work for as long as the employer is motivated by good faith, and (1) the contracting out must not have been restored to circumvent the law or (2) must not have been the result of malicious or arbitrary action. (Manila Electric Co. v. Quisumbing, 1999) We perceive at the outset the disposition of the NLRC that janitorial services are necessary and desirable to the trade or business of petitioner CocaCola. But this is inconsistent with our pronouncement in Kimberly Independent Labor Union v. Drilon where the Court took judicial notice of the practice adopted in several government and private institutions and industries of hiring janitorial services on an independent contractor basis. In this respect, although janitorial services may be considered directly related to the principal business of an employer, as with every business, we deem them unnecessary in the conduct of the employers principal business. (Coca-Cola Bottlers Phil. Inc. vs. NLRC, 1999) Trilateral Relationship in contracting arrangements. There are three parties involved: (1) Principal who decides to farm out a job, work or service to a contractor; (2) Contractor who has the capacity to independently undertake the performance of the job, work, or service; and (3) Contractual workers engaged by the contractor to accomplish the job, work or service. (Sec. 3 D.O. 18-A-11) In legitimate contracting the exists: (1) An ER-EE relationship between the contractor and the employees it engaged to perform the specific job, work or service being contracted (2) A contractual relationship between the principal and the contractor as governed by the provisions of the CC. Note: In the event of any violation of any provisions of the LC (including failure to pay wages) there exists a solidary liability on the part of the principal and the contractor for purposes of enforcing the provisions of the LC and other social legislation, to the extent of the worked performed under the employment contract. (Sec. 5, D.O. 18-A-11) 1. When is there job contracting?

58

Art. 106 (par. 1 and 2): 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. Art 107: The provisions of the immediately preceding article shall likewise apply to any person, partnership, association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project. Art. 109: The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers. 2. When is there labor-only contracting?

Art 106 (par. 4): 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. DO No. 18-02, Section 5: Labor-only contracting is hereby declared prohibited. For this purpose, laboronly contracting shall refer to an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal, and any of the following elements are present: (1) The contractor or subcontractor does not have substantial capital or investment which relates

LABOR LAW REVIEWER


to the job, work or service to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal; or (2) The contractor does not exercise the right to control over the performance of the work of the contractual employee "Substantial capital or investment" refers to capital stocks and subscribed capitalization in the case of corporations, tools, equipment, implements, machineries and work premises, actually and directly used by the contractor or subcontractor in the performance or completion of the job, work or service contracted out. The "right to control" shall refer to the right reserved to the person for whom the services of the contractual workers are performed, to determine not only the end to be achieved, but also the manner and means to be used in reaching that end. Art. 109. The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers. Examples Aboitiz Haulers vs. Dimapatoi (2006): The allegation of petitioner that Grigio is an independent job contractor is without basis. The respondents, as checkers, were employed to check and inspect cargo, a task which is clearly necessary for the petitioners business of forwarding and distributing cargo. Grigio did not undertake the performance of its service contract according to its own manner and method, free from the control and supervision of its principal. The work activities, shifts, and schedules of the respondents, including time allowed for "recess" were set under the Written Contract of Services. This clearly indicates that these matters, which consist of the means and methods by which the work is to be accomplished, were not within the absolute control of Grigio. Petitioners allegation that Grigio retained control by providing supervisors to monitor the performance of the respondents cannot be given much weight. Instead of exercising their own discretion or referring the matter to the officers of Grigio, its supervisors were obligated to refer to petitioners supervisors any discrepancy in the performance of the respondents. Lastly, the law casts the burden on the contractor to prove that it has substantial capital, investment, tools etc. In this case, neither Grigio nor the petitioner was able to present any proof that Grigio had substantial capital. Lakas vs. Burlingame (2007): No proof was adduced to show F. Garils capitalization. The work of the promo-girls was marketing and selling, and thus directly related to the principal business or operation of Burlingame. Finally, F. Garil did not undertake the performance of its service contract according to its own manner and method, free from the control and supervision of Burlingame. Based on the contract, F. Garil was responsible in the hiring process only with respect to the screening, testing and pre-selection of the personnel it provided to Burlingame. Actual hiring itself was done through the deployment of personnel to establishments by Burlingame. The contract also stipulated that Burlingame shall pay F. Garil a certain sum per worker. F. Garil merely served as conduit in the payment of wages to the personnel. The interpretation would have been different if the payment was for the job, project, or services rendered during the month and not on a per worker basis. The Court has taken judicial notice of the practice of employers who do not issue payslips directly to employees. Under current practice, a third person, usually the purported contractor (service or manpower placement agency), assumes the act of paying the wage. The contract also provides that any personnel found to be inefficient, troublesome, uncooperative and not observing the rules and regulations set forth by Burlingame shall be reported to F. Garil and may be replaced upon request. Corollary to this circumstance would be the exercise of control and supervision by Burlingame over workers supplied by F. Garil in order to establish the nature of undesirable personnel. 3. Conditions that must concur in legitimate job contracting

59

Job contracting is permissible only if the following conditions are met: (1) the contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and (2) the contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of the business. (Lakas vs. Burlingame Corp., 2007) Factors to determine existence of independent contractor relationship Mafinco vs. Ople (1976): (1) Whether the contractor is carrying on an independent business

LABOR LAW REVIEWER


(2) Whether the work is part of the employers general business. (3) The nature and extend of the work. (4) The skill required. (5) The terms and duration of the relationship. (6) The right to assign the performance of the work to another. (7) The control and supervision of the work and the employers powers with respect to the hiring, firing and payment of salaries. (8) The duty to supply premises, tools, and appliances. 4. Effects of finding that there is laboronly contracting Citing Eagle Security Agency vs. NLRC--In the case at bar, it is beyond dispute that the security guards are the employees of EAGLE (contractor.) That they were assigned to guard the premises of PTSI (principal) pursuant to the latters contract with EAGLE and that neither of these two entities paid their wage and allowance increases under the subject wage orders are also admitted. Thus, the application of the aforecited provisions of the Labor Code on joint and several liability of the principal and contractor is appropriate. The solidary liability of PTSI and EAGLE, however, does not preclude the right of reimbursement from his co-debtor by the one who paid [See Article 1217, Civil Code]. It is with respect to this right of reimbursement that petitioners can find support in the aforecited contractual stipulation.

60

Art. 107: The provisions of the immediately preceding article shall likewise apply to any person, partnership, association, or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project. Art. 108: An employer or indirect employer may require the contractor or subcontractor to furnish a bond equal to the cost of labor under contract, on condition that the bond will answer for the wages due the employees should the contractor or subcontractor, as the case may be, fail to pay the same. Art. 109: The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers. If found to be labor-only contractor, it is equivalent to finding that there exists an employer-employee relationship between the owner of the project and the employees of the labor-only contractor since that relationship is defined and prescribed by the law itself. (Industrial Timber Corporation vs. NLRC, 1997) In legitimate job contracting, no employer-employee relation exists between the principal and the job contractor's employees. The principal is responsible to the job contractor's employees only for the proper payment of wages. But in labor-only contracting, an employer-employee relation is created by law between the principal and the labor-only contractor's employees, such that the former is responsible to such employees, as if he or she had directly employed them. (PAL vs. NLRC, 1998) The only time the indirect employer may be made solidarily liable with the contractor is when the contractor fails to pay his employees their wages and other benefits claimed. (Landazares vs. Amethyst Security, 2003) Eparwa Security, University (2006): Inc. vs Liceo de Cagayan

B. Termination of employment
SECURITY OF TENURE
Definition Right not be removed from ones job without valid cause and valid procedure. (Kiamco v. NLRC, 1999) Art. 279: in case of regular employment, the employer shall not terminate the services of an employee except for a. just cause (Art. 282) b. authorized cause (Art. 283-284) Nature It is a constitutionally protected right (Art. XIII Sec. 3, 1987 Constitution); it cannot be blotted out by an employment contract. It does not give the Employee an absolute right to his position; when a transfer is not unreasonable, nor inconvenient, nor prejudicial to an employee; and it does not involve a demotion in rank or diminution of his pay, benefits, and other privileges, the employee may not complain that it amounts to constructive dismissal. (Lanzadares vs. Amethyst Security, 2003) A finding of illegal dismissal entitles the Employee to: (1) reinstatement without loss of seniority rights and privileges, and (2) full backwages inclusive of allowances and to benefits or their monetary equivalent from the time withheld up to actual reinstatement (Art. 279) Separation pay in lieu of reinstatement: Doctrine of Strained Relations: If reinstatement is not feasible, expedient or practical, as where there is strained relations between the parties, particularly where the; illegally dismissed employee held a managerial or key position. (Quijano vs. Mercury Drug Corp., 1998) Coverage 1987 Constitution: all workers (Art. XIII Sec. 3)

LABOR LAW REVIEWER


Labor Code: regular employees (Art. 279) in all establishments or undertakings, whether for profit or not (Art. 278), except government and its political subdivisions including government owned or controlled corporations or GOCCs (IRR Book VI Rule I Sec. 1) Security of tenure extends to non regular Employees (Kiamco vs. NLRC, 1999) Contract Employees limited extent; secured during the period their respective contracts of employment remain in effect. (Labajo vs. Alejandro, 1988) Probationary Employees limited extent; additional limitations on power of Employer to terminate: o must be exercised in accordance with the specific requirements of the contract; o dissatisfaction of the Employer must be real and in good faith, not feigned so as to circumvent the contract or the law; Project/seasonal Employees limited extent; secured for the duration of the limited period of their employment Managerial Employees may be dismissed upon loss of confidence; entitled to security of tenure (Maglutac vs. NLRC, 1990). An employee cannot be arbitrarily dismissed at any time, and without cause as reasonably established in an appropriate investigation. (Inter Orient Maritime Enterprises, Inc. vs. NLRC, 1994) Fixed-period Employees / Term Employment: this arrangement does NOT circumvent Security of Tenure when: (a) knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure or any other circumstances vitiating his consent; OR (b) Brent Doctrine: the employer and the employee dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter. (Brent School v. Zamora, 1990; Romares v. NLRC, 1998; Medenilla v. Phil. Veterans Bank, 2000) (c) If a 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 the employment contract. (Medenilla v. Phil. Veterans Bank, 2000) Conflict with management prerogatives Management prerogatives (1) Discipline (San Miguel v. NLRC, 1980) (2) Right to dismiss or otherwise impose disciplinary sanctions upon an employee for just and valid cause, pertains in the first place to the employer, as well as the authority to determine the existence of said cause in accordance with the norms of due process. (Makati Haberdashery, Inc. v. NLRC, 1989) (3) To Demote (Petrophil vs. NLRC, 1986) (4) To Dismiss it is a measure of self protection (Reyes vs. Ministry of Labor, 1989) Requisites for the validity of management prerogative affecting security of tenure (1) Exercised in good faith for the advancement of the Employer's interest, and (2) NOT for the purpose of defeating or circumventing the rights of the Employees under special laws or under valid agreements (San Miguel vs. Ople, 1989)

61

TOPIC B-I. SUBSTANTIVE DUE PROCESS


Dismissal for any of the just or authorized causes under Arts. 282 284

a) JUST CAUSES
No written notice to employer required (i) Serious misconduct or willful disobedience Misconduct improper or wrongful conduct 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. (Dept of Labor Manual, Sec. 4343.01; Hayuan Restaurant vs. NLRC, 2006) Requisites (1) Serious to be serious, misconduct must be: a. of such grave and aggravated character b. in connection with the employee's work. (Lakpue Drug, Inc. vs. Belga, 2005) (2) Shows that the Employee has become unfit to continue working for the Employer. (Philippine Aeolus Automotive United Corp. vs. NLRC) Willful disobedience: Requisites: (1) The employees assailed conduct has been willful or intentional, the willfulness being characterized by a wrongful and perverse attitude; and (2) The order violated must have been: a. Reasonable and lawful; b. Made known to the employee; and c. In connection to the duties which he has been engaged to discharge. (Acesite Corp. v. NLRC, G.R. No. 152308, January 26, 2005). (ii) Gross and habitual neglect of duties Gross negligence is want of even slight care, acting or omitting to act in a situation where there is a duty to act, not inadvertently but willfully and

LABOR LAW REVIEWER


intentionally with a conscious indifference to consequences insofar as other persons may be affected. (Tres Reyes v. Maxim's Tea House, 2003) Habitual neglect implies repeated failure to perform one's duties for a period of time, depending upon the circumstances. (Chua v. NLRC, 2005) Requisites (1) Neglect of duty must be both gross and (2) Habitual (iii) Fraud or willful breach of trust (loss of trust and confidence) Requisites (1) Committed against the Employer or his representative; (2) willful since fraud implies wrongful intent; (3) EE concerned holds a position of trust and confidence; and (Mabeza vs. NLRC, 1997) (4) Act complained of must be work-related i.e. it must show the employee concerned to be unfit to continue working for the employer. Proof beyond reasonable doubt not necessary Uniwide Sales Warehouse Club v. NLRC (2008) (1) It is sufficient that there is some basis for such loss of confidence such as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct; (2) And the nature of his participation therein renders him unworthy of the trust and confidence demanded of his position Loss of confidence: managerial/confidential vs. rank-and-file employees Managerial Rank-and-file Substantial evidence Proof of involvement in reasonable ground to the alleged events in believe Employees guilt; question required; mere mere existence of a basis uncorroborated for the belief (Etcuban assertions and vs. Sulpicio Lines, 2005) accusations are not enough (Etcuban Employment for a long vs. Sulpicio Lines, 2005) time is counted against the Employee (Salvador v. Phil. Mining Service Corp., 2003) General rule: trust and Except: when rank-andconfidence is restricted file position is reposed to MANAGERIAL with trust and Employees (Fujitsu confidence (Coca-Cola Computer Products Corp. vs. NLRC, 1989) e.g. care v. CA, 2005) and custody of property (iv) Abandonment of employment; elements that must concur Abandonment is the deliberate and unjustified refusal of an Employee to resume his employment. (Nueva Ecija Electric Cooperative v. NLRC, 2005) Requisites: (1) Failure to report to work or absence w/o valid reason; (2) Clear intent to sever the employer-employee relationship via overt acts (Floren Hotel v. NLRC, 2005) Cannot be lightly inferred, much less legally presumed from certain equivocal acts such as interim employment (Hacienda Dapdap v. NLRC, 1998)

62

45

(v) Termination of employment pursuant to a union security clause

Art. 283 and 284 are not exhaustive; other authorized causes are: total and permanent disability, disease incurable in 6 mos, valid application of union security clause, expiry of term employment period, completion of project, failure in probation, etc (vi) 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. 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. (Merin v. NLRC, 2008)

b) Authorized causes
(1) Recognized right Uichico v. NLRC (1997): The law recognizes the right of every business entity to reduce its workforce if the same is made necessary by compelling economic factors which would endanger its existence or stability. The fundamental law itself guarantees, even during the process of tilting the scales of social justice towards workers and employees, the right of enterprises to reasonable returns of investment and to expansion and growth. Art. 283 and 284 are not exhaustive; other authorized causes are: total and permanent disability, disease incurable in 6 mos, valid application of union security clause, expiry of term employment period, completion of project,

LABOR LAW REVIEWER


failure in probation, etc Apprehended losses are reasonably (I)mminent, can be perceived objectively and in good faith; Retrenchment must be reasonably (N)ecessary to prevent the expected lossesmeasure of last resort; and Expected or actual losses must be proved by (S)ufficient and convincing evidence. (Lopez Sugar Corp. v. Federation of Free Workers, 1990)

In computing separation pay, a fraction of at least six (6) months shall be considered as one (1) year. (Art. 283)

63

(i) Redundancy, retrenchment and closure


Redundancy Dusit School Nikko v. NUWHRAIN (2005): 1) [redundancy] exists where the service capability of the workforce is in excess of what is reasonably needed to meet the demands of the business enterprise; 2) a reasonably redundant position is one rendered superfluous by any number of factors, such as overhiring of workers, decreased volume of business, dropping of a particular product line previously manufactured by the company, or phasing out of service activity previously undertaken by the business Entitlement Employee is entitled to separation pay of 1 month pay or 1 month pay per year of service, whichever is higher Redundancy does not refer to duplication of work. That no other person was holding the same position which the dismissed employee held prior to the termination of his services does not show that his position had not become redundant. (Escareal v. NLRC, 1992) Financial loss is not a requisite. (Escareal v. NLRC, 1992) Creation of positions with functions related or similar to those of the abolished functions does not necessarily invalidate the declaration of redundancythe old and new positions were different and the declaration was not maliciously motivated. (Santos v. CA, 2001) Employers good faith in implementing a redundancy program is not necessarily put in doubt by the availment of services of an independent contractor. (Asian Alcohol Corp. v. NLRC, 1999) Retrenchment Retrenchment is the termination of employment effected by management during periods of business recession, industrial depressions, seasonal fluctuations, lack of work or considerable reduction in the volume of the employers business. (AMA Computer College v. Ely Garcia, 2008) Entitlement: Employee is entitled to separation pay of 1 month pay or 1/2 month pay per year of service, whichever is higher General standards for when retrenchment is preventive rather than curative (SINS) Losses expected are (S)ubstantial and not merely de minimis in extent;

Reduction of work days may be considered constructive retrenchment (International Hardware v. NLRC, 1989) Temporary retrenchment or temporary cessation or suspension of operations (Art. 286) A specific period that employees may remain temporarily laid-off or in floating status. The temporary lay-off or bona fide suspension of operations of a business or undertaking wherein the employees likewise cease to work should not last longer than 6 months. After 6 months, the employees should either be recalled to work or permanently entrenched following the requirements of the law, and that failing to comply with this would be tantamount to dismissing the employees and the employer would thus be liable for such dismissal. (International Hardware v. NLRC, 1989) Closure Employer may close or cease his business operations or undertaking even if he is not suffering from serious business losses or financial reverses, as long as he pays his employees their termination pay in the amount corresponding to their length of service. (Catatista v. NLRC, 1995) It includes both the complete cessation of all business operations and the cessation of only part of a companys business (Coca-Cola Bottlers, Inc. v. NLRC, 1991) (b) Requirements Must de bona fide or in good faith (a) Procedural steps required At least 1 month before the intended date of termination, Employer is to serve written notice to: (1) Affected employees; and (2) DOLE (Art. 283) (b) Requirements for valid Retrenchment/redundancy Requisites: Redundancy (1) Written notice served on both the Employees and the DOLE at least 1 month prior to the intended date; (2) Payment of separation pay equivalent to one month pay or one month pay for every year of service, whichever is higher; (3) Good faith in abolishing the redundant positions; and

LABOR LAW REVIEWER


(4) Fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished. The following are usually considered in redundancy: position itself, nature of the services performed by the employee, and necessity of such position. (Edge Apparel v. NLRC, 1998) Requisites: Retrenchment Necessary to prevent or minimize losses and such losses are proven; There must be 1 month written notice to the DOLE and the employee; Separation pay is paid; Exercised in good faith the prerogative was exercised for the advancement of the employers interest and not to defeat or circumvent the employees right to security of tenure; and Fair and reasonable criteria in ascertaining who will be affected (c) Criteria in selecting employees for dismissal Fair and reasonable criteria in ascertaining who will be affected: (1) preferred status (e.g. temporary, casual or regular Employees), (2) efficiency (3) physical fitness, (4) age, (5) financial hardship, or (6) seniority. (Asian Alcohol Corp. v. NLRC, 1999) (d) Standards to be followed Table: Comparison of Retrenchment, Redundancy and Closure Retrenchment Reduction of personnel usually due to poor financial returns so as to cut down on costs of operations in terms of salaries and wages Resorted to primarily to avoid or minimize business losses Redundancy The service of an Employee is in excess of what is required by an enterprise Closure The reversal of the fortune of the employer whereby there is a complete cessation of business operations and/or actual locking-up of the doors of the establishment, usually due to financial losses Aims to prevent further financial drain upon the Employer (a) Requisites 1) Employee has been found to be suffering from any disease; 2) His continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees; 3) Payment of separation pay; 4) A medical certification by a competent public health authority that the disease cannot be cured w/in 6 months even with proper medical treatment (IRR Book VI. Rule I. Sec. 8) Medical certification cannot be dispensed with (Manlyl Express, Inc. v. Payong, 4 7 2005) It must be issued by a competent public health authority and not the company physician (Cebu Royal Plant v. Deputy Minister of Labor, 1987 JUST CAUSES Serious Misconduct REQUISITES Serious - Grave and aggravated character, - In connection with work; and Shows that Employee is unfit to work for Employer. Willful conduct wrongful and perverse attitude; and Order violated must be: Reasonable, Lawful, Sufficiently known to Employee, In connection to the duties. Neglect must be both gross and habitual. Loss of Confidence - Committed against the Employer or his representative (direct); - willful since fraud implies wrongful intent; - EE concerned holds a position of trust and confidence (Mabeza vs. NLRC, 1997); - Act complained of must be work-related. Additional Guidelines - NOT simulated; - NOT used as a subterfuge; - NOT arbitrarily asserted; and - genuine, NOT a mere afterthought (Vitarich v. NLRC, 1999; Coca-Cola Bottlers, Phils., Inc. v. Kapisanan ng Malayang Manggagawa sa Coca-Cola, 2005)

64

Willful Disobedience

Gross and Habitual Neglect Fraud or Willful Breach of Trust

(ii) Disease or illness


Entitlement: Employee is entitled to separation pay of 1 month pay or month pay per year of service, whichever is higher

LABOR LAW REVIEWER


JUST CAUSES Commission of a crime or offense against Employer REQUISITES Crime against the Employer, Immediate member of employers family, or Employers duly authorized representative; and Conviction or prosecution NOT required. Due to a voluntary and/or willful act or omission by Employee (Nadura vs. Benguet Consolidated, 1962) REQUISITES - 1 month written notice to DOLE and Employee - separation pay equivalent to one month pay or one month pay for every year of service, whichever is higher - 1 month written notice to DOLE and Employee - separation pay equivalent to one month pay or one month pay for every year of service, whichever is higher; - Good faith in abolishing the redundant positions; and - Fair and reasonable criteria in choosing those affected (Asian Alcohol Corp. v. NLRC, 1999), such as but not limited to: - preferred status (e.g. temporary, - casual or regular Employees)efficiency, or - seniority. (Panlilio v. NLRC, 1997; Golden Thread Knitting Industries, Inc. v. NLRC, 1999) Basic Requisites: N N S G F Necessary to prevent or minimize losses and such losses are proven 1 month written notice to DOLE and the Employees Separation pay equivalent to at least one month pay or at least 1/2 month pay for every year of service, whichever is higher; Exercise is in good faith; and Fair and reasonable criteria in ascertaining who will be affected preferred status (e.g. temporary, casual or regular Employees) efficiency, physical fitness, age, financial hardship, or seniority. (Asian Alcohol Corp. v. NLRC, 1999)

65

Analogous auses

AUTHORIZED CAUSES Installation of Labor Saving Devices

Redundancy

Closure or Cessation of Operations

Disease

Retrenchment

General Standards: S I N S for when retrenchment is preventive rather than curative Losses expected are substantial and not merely de minimis in extent; Apprehended losses are reasonably imminent; Retrenchment must be reasonably necessary to prevent the expected losses; and Expected or actual losses must be proved by sufficient and convincing evidence. (Lopez Sugar Corp. vs. Federation of Free Workers, 1990) Must be done in good faith (bona fide) 1 month written notice to DOLE and Employee Separation pay equivalent to one month pay or 1/2 month pay for every year of service, whichever is higher. Employee is suffering from any disease; His continued employment is prohibited by law or is prejudicial to his health as well as as to the health of his co-employees. (Art. 284) Separation pay equivalent to at least one month pay or at least 1/2 month pay for every year of service, whichever is higher; and Medical certification by a competent public health authority that the disease cannot be cured within 6 mos even with proper medical treatment. (IRR Book VI Rule I Sec. 8)

TOPIC B-II. Procedural Due Process


Procedural Due Process - Employee must be given notice with adequate opportunity to be heard before he/she is notified of his/her actual dismissal for Cause. (Fujitsu v. CA, 2005) ER may NOT substitute the required prior notice & opportunity to be heard with the mere payment of 30 days' salary. (PNB v. Cabanag, 2005)

LABOR LAW REVIEWER


(a) Procedure to be observed in termination cases Basis for termination Requirements Just cause Art. 282 1. Notice specifying the grounds for which dismissal is sought 2. Hearing or opportunity to be heard 3. Notice of the decision to dismiss (Art. 277(b)) Authorized Cause Notice to: Arts. 283 & 284 1. Employee, & 2. DOLE at least 1 month prior to the effectivity of the separation Consequences for non-compliance Situation Effect Just or Dismissal valid Authorized Cause + Due Process No Just or Authorized Cause + Due Process Dismissal invalid Liability of ER No liability * separation pay if for authorized cause Reinstatement + Full Backwages * if reinstatement NOT possible = separation pay Reinstatement + Full Backwages * if reinstatement NOT possible = separation pay Liable for damages due to non-compliance with procedural req'ts *separation pay if for authorized cause Notice must be individual, not collective. (Shoppers Gain Supermart vs. NLRC, 1996); Voluntary arbitration satisfies notice requirement for authorized causes (Revidad vs. NLRC, 1995)

66

Hearing A formal or trial type hearing is not at all times and in all instances essential to due process; it is enough to that the parties are afforded fair and reasonable opportunity to explain their side of the controversy. (Mendoza vs. NLRC, 1991) Summary proceeding may be conducted; written explanations, affidavits, position papers or other pleadings may be used as well; what is essential is the ample opportunity to be heard. (Homeowners Savings and Loan Assoc. Inc. vs. NLRC, 1996) No formal hearing necessary when the Employee already admitted his responsibility for the act he was accused of. (Magos v. NLRC, 1998) Burden of Proof Upon the employer. Employer must comply with due process requirements before any termination is done. (Gothong Lines, Inc. v. NLRC, 1999) Unsubstantiated suspicions and baseless conclusions by employers are not legal justification for dismissing employees. (Maranaw Hotel and Resort Corp. v. NLRC, 1999) Degree of Proof Substantial evidence; proof beyond reasonable doubt not required. (Manila Electric Co., Inc. v. NLRC, 1991) Prescription Period An action for reinstatement by reason of illegal dismissal is one based on an injury which may be brought within 4 years from the time of dismissal. (Art. 1146 of the Civil Code) (c) Agabon doctrine Prior to 1989 Wenphil Corp. v. NLRC, 1989 - Belated Due Process Rule Serrano v. NLRC, 2000 Illegal dismissal Dismissal is valid (NO reinstatement and backwages) BUT Employer to indemnify Employee for damages Dismissal is valid. EE is entitled to the payment of full backwages - Computed from the time of dismissal until the Court finds the dismissal to be for just cause. Dismissal is valid (NO reinstatement and backwages) BUT Employer to indemnify Employee in the form of nominal damages indemnity stiffer than Wenphil Corp. vs.

52

No Just or Authorized Cause + No Due Process

Dismissal invalid

Just or Authorized Cause + No Due Process

Dismissal valid

(b) Guiding Principles in connection with the hearing requirements in dismissal cases Right to counsel A very basic requirement of substantive due process; it has to be observed. Indeed, the rights to counsel and to due process of law are two of the fundamental rights guaranteed by the 1987 Constitution to any person under investigation, be the proceeding administrative, civil, or criminal. (Salaw v. NLRC, 1991) Notice Notice not needed when Employee consented to the retrenchment or voluntarily applied for one. (International Hardware Inc. vs. NLRC, 1989)

Current rule: Agabon v. NLRC, 2004

LABOR LAW REVIEWER


NLRC to discourage the practice of dismiss now, pay later. Computation: SP as a statutory requirement is computed by integrating the basic salary with regular allowances employee has been receiving (Planters Products Inc. v. NLRC, 1989); allowances include transportation and emergency living allowances (Santos v. NLRC, 1987) Commissions may not be included since they must be earned by actual market transactions by employee (Soriano v. NLRC, 1989) A dismissed employee who has accepted separation pay is not necessarily estopped from challenging the validity of his or her dismissal. Neither does it relieve the employer of legal obligations. (Anino v. NLRC, 1998) (i) Strained Relation rule If reinstatement is not feasible, expedient, or practical, as where there is strained relations between the parties, particularly where the illegally dismissed employee held a managerial or key position (Quijano v. Mercury Drug Corp. 1998) Quijano v. Mercury Drug Corp. (1998) (a) Where reinstatement is not feasible, expedient or practical, (b) As where reinstatement would only exacerbate the tension and strained relations between the parties (c) Or where the relationship between the employer and employee has been unduly strained by reason of their irreconcilable differences, particularly where the illegally dismissed employee held a managerial or key position in the company (d) It would be more prudent to order payment of separation pay instead of reinstatement (c) Backwages Definition (1) According to St. Theresas School of Novaliches Foundation v. NLRC (1998): ) earnings lost by a worker due to his illegal dismissal; a form of relief that restores the income lost by reason of such unlawful dismissal; (2) it is not private compensation or damages; nor is it a redress of a private right; (3) but, rather, in the nature of a command to the employer to make a public reparation for illegally dismissing an employee. Effect of failure to order A plain error which may be rectified, even if employee did not bring an appeal regarding the matter (Aurora Land v. NLRC, 1997) (i) Components of the amount of backwages Computation (1) Without deduction for their earnings elsewhere during the layoff (Bustamante v. NLRC, 1996)

TOPIC B-III. RELIEFS FOR ILLEGAL DISMISSAL


(a) Reinstatement aspect Definition: restoration of an employee who was unjustly dismissed to the position from which he was removed, that is, to his status quo ante dismissal (Santos vs. NLRC, 1987) Note: an offer by Employer to re-employ the Employee did not cure the vice of earlier arbitrary dismissal. (Ranara v. NLRC, 1992) Alternative: In lieu of reinstatement, Employee is entitled to separation pay of 1 month pay per year of service. (Gaco vs. NLRC, 1994) General Rule: reinstatement is a matter of right to an illegally dismissed Employee. Exceptions: Closure of business (Retuya vs. Dumarpa, 2003) Economic business conditions: The reinstatement remedy must always be adapted to economic-business conditions. (Union of Supervisors, etc. v. Sec. of Labor, 1984) EEs unsuitability (Divine World High School vs. NLRC, 1986) EEs Retirement/Coverage (Espejo vs. NLRC, 1996) (1) Doctrine of Strained Relations (i) Immediately executory Art. 223 is clear that an award for reinstatement shall be immediately executory even pending appeal and the posting of a bond by the employer shall not stay the execution for reinstatement. Reinstatement ordered by Labor Arbiter is selfexecutory; reinstatement ordered by NLRC is not and, though immediately executory, still requires writ of execution. (Panuncillo vs. CAP Phil. Inc., 2007) (ii) Actual reinstatement (iii) Payroll reinstatement (b) Separation pay in lieu of Reinstatement Separation pay Kinds (1) SP as a statutory requirement for authorized causes (2) SP as financial assistance found in the next section (3) SP in lieu of reinstatement where reinstatement is not feasible; and (4) SP as a benefit in the CBA or company policy

67

LABOR LAW REVIEWER


(2) Awards including salary differentials are not allowed (Insular Life Assurance Co. v. NLRC, 1987) (3) The salary base properly used should be the basic salary rate at the time of dismissal plus the regular allowances; allowances include: Emergency cost of living allowances (ECOLA), transportation allowances, 13th month pay (Paramount Vinyl Product Corp. v. NLRC, 1990) Also included are vacation leaves, service incentive leaves, and sick leaves (4) The effects of extraordinary inflation are not to be applied without an official declaration thereof by competent authorities (Lantion v. NLRC, 1990) (d) Constructive dismissal The ff. constitute constructive dismissal: (1) Bona fide suspension of the operation of a business or undertaking exceeding 6 months (Valdez v. NLRC, 1998) (2) Floating status of more than 6 months (Agro Commercial Security Services v. NLRC, 1989) An involuntary resignation is resorted to 1) when continued employment is rendered impossible, unreasonable, or unlikely; 2) when there is a demotion in rank and/or a diminution in pay; 3) or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee. (Phil. Wireless, Inc. v. NLRC, 1998) If an employee was forced to remain without work or assignment for a period exceeding 6 months, then he is in effect constructively dismissed (Valdez v. NLRC, 1998) (e) Preventive Suspension Definition It is a disciplinary measure for the protection of the company's property pending investigation of any alleged malfeasance or misfeasance committed by the employee. The employer may place the worker concerned under preventive suspension if his continued employment poses a serious and imminent threat to the life or property of the employer or of his co-workers. (PAL v. NLRC, 1998) Preventive suspension is limited to 30 days; any more than that amounts to constructive dismissal. (Pido vs. NLRC, 2007) (f) Quitclaims Generally, deeds of release, waiver or quitclaims cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal since quitclaims are looked upon with disfavor and are frowned upon as contrary to public policy. Where, however, the person making the waiver has done so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as being a valid and binding undertaking. The requisites for a valid quitclaim are: 1) there was no fraud or deceit on the part of any of the parties; 2) the consideration for the quitclaim is credible and reasonable; and 3) the contract is not contrary to law, public order, public policy, morals, or good customs or prejudicial to a 3rd person with a right recognized by law. (Soriano, Jr. v. NLRC, 2007) (g) TERMINATION OF EMPLOYMENT BY EMPLOYEE Termination by Employee with Just Cause no written notice to Employer required; the following are just causes: S I C A (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 family members of his family; and (4) Other causes analogous to any of the foregoing. (Art 285 (b)) Termination by Employee without Just Cause (1) EE to serve written notice on Employer at least 1 month in advance. (Art 285(a)) (2) Effect of failure to serve notice: Employer may hold Employee liable for damages. (Art 285(a)) Resignation Definition The voluntary act of an Employee who finds himself in a situation in which he believes that personal reasons cannot be sacrificed in favor of the exigency of the service and he has no other choice but to dissociate himself from his employment. (Oriental Shipmanagement Co. vs. CA, 2006) Requisites (1) Unconditional (Azcor Manufacturing, Inc. vs. NLRC, 1999) (2) Intention to relinquish a portion of the term of office accompanied by an act of relinquishment. (Azcor Manufacturing, Inc. vs. NLRC, 1999); (3) No valid resignation where it was made without proper discernment (Metro Transit Organization, Inc. vs. NLRC, 1998) (4) Voluntary (5) Acceptance of Employer necessary to make the resignation effective. (Shie Jie Corp./Seastar Ex-im Corp. vs. National Federation of Labor, 2005; Reyes v. CA, 2003) Resignations once accepted and being the sole act of the employee, may not be withdrawn without the consent of the employer. (Intertrod Maritime, Inc. v. NLRC, 1991) Rule: Filing of an illegal dismissal case is inconsistent with resignation. (Valdez v. NLRC, 1998) Except when the filing of an illegal dismissal case by respondent was evidently a mere afterthought: it

68

LABOR LAW REVIEWER


was filed not because Employee wanted to return to work but to claim separation pay and back wages. (Willi Hahn Enterprises vs. Maghuyop, 2004) No Termination Circumstances that shall NOT terminate employment: (1) Bona fide suspension of the operation of a business or undertaking NOT exceeding 6 months; OR (2) Fulfillment by the Employee of a military or civic duty. (Art 286) Employer shall reinstate the Employee to his former position without loss of seniority rights if Employee indicates his desire to resume to work not later than 1 month from the resumption of operations of his Employer or from relief from the military or civic duty. (Art 286) Employer-Employee relationship deemed SUSPENDED in case of suspension of operation, unless suspension is for the purpose of defeating the rights of the Employees, or mandatory fulfillment of military or civic duty. (Bk VI, Rule I, Sec 12, Omnibus Rules) Guidelines on Imposition of Dismissal and other penalties Must not be exercised wantonly, but must be controlled by substantive due process and tempered by the fundamental policy of protection to labor enshrined in the Constitution (Farrol v. CA, 2000) The penalty must be commensurate with the act, conduct or omission imputed to the employee and imposed in connection with the employers disciplinary authority (Farrol v. CA, 2000) Policies, rules and regulations on work-related activities of the employees must always be fair and reasonable (VH Manufacturing, Inc. v. NLRC, 2000; St. Michaels Institute v. Santos, 2001) Employers are allowed a wider latitude of discretion in terminating the employment of managerial personnel or those of similar rank performing functions which by their nature require the employers trust and confidence, than in the case of ordinary rank-and-file employees. (Etcuban, Jr. v. Sulpicio Lines, Inc. 2005) Substantial evidence is sufficient as basis for the imposition of any disciplinary action upon the employee 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 sixtyfive (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. An underground mining employee upon reaching the age of fifty (50) years or more, but not beyond sixty (60) years which is hereby declared the compulsory retirement age for underground mine workers, who has served at least five (5) years as underground mine worker, may retire and shall be entitled to all the retirement benefits provided for in this Article. 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 provided under Article 288 of this Code. Nothing in this Article shall deprive any employee of benefits to which he may be entitled under existing laws or company policies or practices. (As amended by Republic Act No. 8558). RA 7641 is undoubtedly a social legislation. The law has been enacted as a labor protection measure and as a curative statute that absent a retirement plan devised by, an agreement with, or a voluntary grant from, an employer can respond, in part at least, to the financial well-being of workers during their twilight years soon following their life of labor. There should be little doubt about the fact that the law can apply to labor contracts still existing at the time the statute has taken effect, and that its benefits can be reckoned not only from the date of the law's enactment but retroactively to the time said employment contracts have started. (Enriquez Security Services, Inc. v. Cabotaje, 2006) Pursuant thereto, this Court imposed 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 Corp. v. Cabanella, 2008)

69

C. Retirement Pay Law


Labor Code, 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 employee's retirement benefits under any collective bargaining and other agreements shall not be less than those provided herein.

LABOR LAW REVIEWER


TOPIC C-I. Coverage
All employees in the private sector, regardless of their position, designation, or status, and irrespective of the method by which their wages are paid (Sec 1, RA 7641) The only exceptions are: (1) employees covered by the Civil Service Law; (2) domestic helpers and persons in the personal service of another, and (3) employees in retail, service and agricultural establishments or operations regularly employing not more than ten employees The minimum retirement pay due covered employees shall be equivalent to one-half month salary for every year of service, a fraction of at least six (6) months being considered as one whole year. The benefits under this law are other than those granted by the SSS or the GSIS.

70

V. Management Prerogative
This Court held that the employers right to conduct the affairs of his business, According to its own discretion and judgment, is well-recognized. An employer has a free reign and enjoys wide latitude of discretion to regulate all aspects of employment. 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, 2007)

TOPIC C-II. Exclusions from coverage


R.A. No. 7641, otherwise known as "The Retirement Pay Law," only applies in a situation where (1) there is no collective bargaining agreement or other applicable employment contract providing for retirement benefits for an employee; or (2) there is a collective bargaining agreement or other applicable employment contract providing for retirement benefits for an employee, but it is below the requirements set for by law. The reason for the first situation is to prevent the absurd situation where an employee, who is otherwise deserving, is denied retirement benefits by the nefarious scheme of employers in not providing for retirement benefits for their employees. The reason for the second situation is expressed in the Latin maxim pacta privata juri publico derogare non possunt. Private contracts cannot derogate from the public law. (Oxales v. Unilab, 2008)

A. Discipline
The employers right to conduct the affairs of his business, according to its own discretion and judgment, includes 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. The only criterion to guide the exercise of its management prerogative is that the policies, rules and regulations on work-related activities of the employees must always be fair and reasonable and the corresponding penalties, when prescribed, commensurate to the offense involved and to the degree of the infraction. (Consolidated Food Corporation vs. NRLC, 1999) (St. Michaels Institute vs. Santos, 2001) Right to dismiss or otherwise impose disciplinary sanctions upon an employee for just and valid cause, pertains in the first place to the employer, as well as the authority to determine the existence of said cause in accordance with the norms of due process. (Makati Haberdashery, Inc. v. NLRC, 1989)

TOPIC C-III. Components of retirement pay


IRR, Book VI, Rule II, Section 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. x x x; (b) The cash equivalent of not more than five (5) days of service incentive leave; (c) One-twelfth of the 13th month pay due an employee; (d) All other benefits that the employer and employee may agree upon that should be included in the computation of the employees retirement pay.

B. Transfer of employees
Westin Phil. Plaza Hotel v. NLRC (1999): (1) An Employees right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. (2) The Employer has the right to transfer or assign Employees from one area of operation to another, or one office to another or in pursuit of its legitimate business interest, (3) provided there is no demotion in rank or diminution of salary, benefits and other privileges and not motivated by discrimination or made in bad faith, or effected as a form of punishment or demotion without sufficient cause.

TOPIC C-IV. Retirement pay under RA 7641 vis--vis retirement benefits under SSS and GSIS laws
RA 7641 mandates payment of retirement benefits. All private sector employees regardless of their position, designation or status and irrespective of the method by which their wages are paid are entitled to retirement benefits upon compulsory retirement at the age of sixty-five (65) or upon optional retirement at sixty (60) or more but not 65.

LABOR LAW REVIEWER


Bisig ng Manggagawa sa TRYCO v. NLRC (2008) This prerogrative extends to the managements right to regulate, according to its own discretion and judgment, all aspects of employment, including the freedom to transfer and reassign employees from one are to another in order to meet the requirements of the business is, therefore, not general constitutive of constructive dismissal. Thus, the consequent transfer of Trycos personnel, assigned to the Production Department was well within the scope of its management prerogative. When the transfer is not unreasonable, or inconvenient, or prejudicial to the employee, and it does not involve a demonition in rank or diminution of salaries, benefits, and other privileges, the employee may not complain that it amounts to a constructive dismissal. With regard to the private respondents claim for the mid-year bonus, it is settled doctrine that a grant of a bonus is a prerogative, not an obligation of the employer. The matter of giving a bonus over and above the workers lawful salaries and allowances is entirely dependent on the financial capability of the employer to give it. (KimberlyClark Philippines, Inc. vs. Dimayuga, 2009)

71

E. Change of working hours


Further, management retains the prerogative, whenever exigencies of the service so require, to change the working hours of its employees. So long as such prerogative 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 under valid agreements, this Court will uphold such exercise. (Sime Darby Pilipinas Inc. v. NLRC, 1998)

C. Productivity standard
The employer has the right to demote and transfer an employee who has failed to observe proper diligence in his work and incurred habitual tardiness and absences and indolence in his assigned work. (Petrophil Corporation vs. NLRC, 1986) In the consolidated cases of Leonardo vs. NLRC [G. R. No. 125303, June 16, 2000] and Fuerte vs. Aquino [G. R. No. 126937, June 16, 2000], the employer claimed that the employee was demoted pursuant to a company policy intended to foster competition among its employees. Under this scheme, its employees are required to comply with a monthly sales quota. Should a supervisor such as the employee fail to meet his quota for several consecutive months, he will be demoted, whereupon his supervisors allowance will be withdrawn and be given to the individual who takes his place. When the employee concerned succeeds in meeting the quota again, he is re-appointed supervisor and his allowance is restored. The Supreme Court held that this arrangement is an allowable exercise of company rights since an employer is entitled to impose productivity standards for its workers. In fact, non-compliance may be visited with a penalty even more severe than demotion.

F. Marital discrimination
In the recent case of Duncan Association of Detailman-PTGWO and Pedro Tecson v. Glaxo Wellcome Philippines, Inc., we passed on the validity of the policy of a pharmaceutical company prohibiting its employees from marrying employees of any competitor company. We held that Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information from competitors. We considered the prohibition against personal or marital relationships with employees of competitor companies upon Glaxos employees reasonable under the circumstances because relationships of that nature might compromise the interests of Glaxo. In laying down the assailed company policy, we recognized that Glaxo only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and procedures. (Star Paper Corp. vs. Simbol, 2006)

G. Post-employment ban
In cases where an employee assails a contract containing a provision prohibiting him or her from accepting competitive employment as against public policy, the employer has to adduce evidence to prove that the restriction is reasonable and not greater than necessary to protect the employers legitimate business interests. The restraint may not be unduly harsh or oppressive in curtailing the employees legitimate efforts to earn a livelihood and must be reasonable in light of sound public policy. (Rivera v Solidbank, 2006)

D. Grant of Bonus
A bonus is "a gratuity or act of liberality of the giver which the recipient has no right to demand as a matter of right" (Aragon vs. Cebu Portland Cement Co., 61 O.G. 4597). "It is something given in addition to what is ordinarily received by or strictly due the recipient." The granting of a bonus is basically a management prerogative which cannot be forced upon the employer "who may not be obliged to assume the onerous burden of granting bonuses or other benefits aside from the employee's basic salaries or wages" (Kamaya Point Hotel vs. National Labor Relations Commission, Federation of Free Workers and Nemia Quiambao, G.R. No. 75289, August 31, 1989). (Traders Royal Bank vs. NLRC, 1990)

H. Limitations in its exercise


The right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them. Managerial prerogatives, however, are subject to limitations provided by law, collective bargaining agreements, and general principles of fair play and

LABOR LAW REVIEWER


justice. (The Philippine American Life and General Insurance Co. v. Gramaje, 2004) Management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations. This Court has upheld a company s management prerogatives so long as they are 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 and valid agreementsI (Courts emphasis) (Marival Trading v. NLRC, 2007) 1) 2) 3) 4) 5) Employment purely casual and not for the purpose of occupation or business of the employer; Service performed on or in connection with an alien vessel by an employee if he is employed when such vessel is outside the Philippines; Service performed in the employ of the Philippine Government or instrumentality or agency thereof; Service performed in the employ of a foreign government or international organization, or their wholly-owned instrumentalities; and Services performed by temporary and other employees which may be excluded by SSS regulation. Employees of bona fide independent contractors shall not be deemed employees of the employer engaging the services of said contractors.

72

VI. Social Legislation


A. SSS Law (RA 8282)
1. Coverage
1) Compulsory (1) Employers as defined above; (2) Employees not over 60 years including domestic helpers with at least P1,000 monthly pay; and (3) Self-employed as may be determined by the Commission, but not limited to: i. Self-employed professionals ii. Partners and single proprietors of businesses iii. Actors and actresses, directors, scriptwriters, and news correspondents who do not fall within the definition of the term employee under Section 8 (d) iv. Professional athletes, coaches, trainers and jockeys v. Individual farmers and fishermen Voluntary (1) Spouses who devote full time to managing household and family affairs, unless they are also engaged in other vocation or employment (which is subject of compulsory coverage); (2) OFWs recruited by foreign-based employers; (3) Employees (previously under compulsory coverage) already separated from employment or those self-employed (also under compulsory coverage) with no realized income for a given month, who chose to continue with contributions to maintain right to full benefit. NOTE: Foreign governments, international organizations or their wholly owned instrumentality employing workers in the Philippines may enter into an agreement with the Philippine government to include their employees in the SSS except those already covered by their civil service retirement system.

b. Benefits
Monthly pension Computation of monthly pension: the monthly pension shall be the highest of the following amounts: (1) P300 + [20% x (ave. monthly credit)] + [2% x (ave. monthy credit) x (# of cash credited years of service in excess of 10 years)]; or (2) 40% x (ave. monthly credit); or (3) P1,000; provided, that the monthly pension shall in no case be paid for an aggregate amount of less than 60 months. (4) Notwithstanding the abovementioned, minimum pension is P1,200 for members with at least 10 years credit service, P2,400 for those with 20 years. Dependents pension a. b. c. Paid when member dies, retires or with permanent total disability; Paid to each child conceived on or prior to contingency, but not exceeding 5, beginning with the youngest and preferring the legitimate; Amount is either P250 or 10% of the monthly pension as computed above, whichever is higher.

2)

Retirement benefits Eligibility requirements 1) 120 monthly contributions; 2) Age a. 65 years old; or b. a member who has reached 60 years may also avail if he is already separated from employ-ment or has ceased to be selfemployed. Benefit entitlement to monthly pension from retirement until death. Lump Sum Alternative Member may opt to receive his first 18 monthly pensions in lump sum but such is discounted at a preferential rate of interest.

a. Exclusions from coverage

LABOR LAW REVIEWER


To those ineligible to the 60 year old with less than 120 monthly contributions who is no longer employed or self-employed, and who is not continuing contributions independently, he is entitled to a lump sum equal to his total contributions paid. Permanent disability benefits a) Eligibility requirement: 36 monthly contributions prior to the semester of disability; same as death benefit; only difference is that the pension is paid directly to the member. In case the permanently disabled member dies, it would be given the same treatment as a retiree dying. (see section B-5 above). For permanent partial disability, the pension is not lifetime. (e.g. loss of thumb entitles member to only 10 months of pension, while loss of arm 50 months). It shall be paid in lump sum if the period is less than 12 months. For multiple partial disabilities, they shall be additive when related or deteriorating the percentage shall be equal to the number of months the partial disability is entitled to divided by 75 months. (e.g. loss of sight in one eye 25/75; loss of arm 50/75; if both occur due to same cause, then 25/75 + 50/75 = 100% so treated as if it were permanent total disability. (3) At least 3 months of contributions in the 12 month period immediately before the semester of sickness or injury has been paid; (4) All company sick leaves with pay for the current year has been used up; (5) Maximum of 120 days per 1 calendar year (so maximum permissible for the same sickness and confinement is 240 days for 2 consecutive years); (6) The employer has been notified, or, if a separated, voluntary or self-employed member, the SSS directly notified within 5 days of confinement; (7) Notice to employer or SSS not needed when confinement is in a hospital; notice to employer not required as well when Employee became sick or injured while working or within premises of the employer. Benefit: daily cash allowance paid for the number of days a member is unable to work due to sickness or injury equivalent to 90% x (average daily salary credit) Maternity leave benefits (limited only to first four deliveries or miscarriage)

73

b) c)

Note: All of these benefits are tax-exempt.

c. Beneficiaries
1) Primary Dependent spouse until remarriage (see above); Dependent children (legitimate, legitimated, legally adopted, and illegitimate) (see above); illegitimate children are entitled only to 50% of the share of legitimate children unless there are no legitimate children, in which case, they get 100%.

Death benefits Eligibility requirement: 36 monthly contributions prior to the semester of death. Benefit monthly pension to primary or secondary beneficiaries. To those ineligible lump sum benefit which shall be the higher between the two: (monthly pension) x 12; or (monthly pension) x (# of monthly contributions) Funeral benefits P12,000 in cash or in kind, upon death of member Loan Social Security Commission Resolution No. 669. Moreover, several SSS-issued circulars such as Circular No. 21-P and No. 52 pertain to the treatment of salary loans, sometimes providing for more flexible payment terms or condonation for delinquent payers; Santiago v. CA and SSS, GR # L-39949 (1984) resolved an issue involving the treatment of salary loan repayments; SSS website also shows loans

2) Secondary shall only receive when the primary beneficiaries are absent Dependent parents 3) Others shall only receive when the primary and secondary beneficiaries are absent Any other person designated by member as his/her secondary beneficiary.

B. GSIS (RA 8291)


All public sector employees below the compulsory retirement age of 65, irrespective of employment status.

1. Coverage

Sickness benefits Eligibility requirements and other conditions (1) Inability to work due to sickness or injury (2) Confined for at least 4 days either in a hospital or elsewhere with SSS approval;

2. Exclusions from coverage


AFP and PNP; Members of the Judiciary and Constitutional Commissions who are covered only by life insurance as they have separate retirement schemes;

LABOR LAW REVIEWER


Contractual employees with no employeremployee relationship with the agency they serve. contributions, in addition to the monthly income benefit, he shall receive an additional cash payment of 18 times basic monthly pension. To the ineligible If member has rendered at least 3 years of service, then he shall receive cash payment equal to 100% of ave. monthly compensation for each year of service (essentially total amount of contributions made) or P12,000 whichever is higher. Partial Disability Paid according to GSIS prescribed schedule (this is similar to the scheme used by SSS; refer to section II subsection D-3 above); member availing of permanent partial disability must satisfy condition E.1.a. above regarding the disability not being due to his own fault and either E.1.b.i. or E.1.b.ii. regarding employment status and services rendered. Death Benefits When member dies, the primary beneficiaries are entitled to only one of the following: a) Survivorship pension (check G.1 above) If he was in the service when he died; or Even if separated from the service, he has at least 3 years of service and has paid 36 monthly contributions within the 5 years immediately preceding death; or Even if separated from the service, he has paid 180 monthly contributions prior to death. b) Survivorship pension plus cash payment of 100% ave. monthly compensation for every year of service (so essentially, pension plus total contributions made) If he was in the service when he died; and With 3 years of service. c) Cash payment equivalent to 100% ave. monthly compensation for each year of service he paid contributions or P12,000 whichever is higher With 3 years of service; and He has failed to qualify in the prior 2 schemes. Funeral benefits Fixed by GSIS rules and regulations (currently at P20,000) Entitled to this are the following: (1) Active member; (2) Member separated from service but still entitled to funeral benefit; (3) Pensioner; (4) Retiree who at the time of retirement was of pensionable age but opted to retire under RA 1616. Loan GSIS website provides for this Temporary disability benefits (similar to sickness) Eligibility requirements and other conditions: (1) Employee must be in service at the time of disability; or

3. Benefits
Monthly pension The amount shall be: a) 37.5% x (revalued ave. monthly compensation) b) Plus 2.5 x (revalued ave. monthly compensation) x (years in service in excess of 15 years). The monthly pension shall not exceed 90% of the average monthly compensation. It shall not be less than P2,400 for those with 20 years of service and not less than P1,300 for everyone else.

74

Retirement benefits Eligibility requirements (1) 15 years service; (2) 60 years of age; and (3) Not receiving pension benefit from permanent total disability. Note: Retirement is compulsory for employees 65 years of age who have rendered at least 15 years of service; if employee has less than 15 years of service, he may be allowed to continue in accordance with civil service laws. Benefit: choice between 60 x (basic monthly pension) lump sum payment at the time of retirement plus basic monthly pension payable monthly for life after expiry of the 5-year guaranteed period which is already covered by the lump sum; or Cash payment equivalent to 18 x (basic monthly pension) plus monthly pension for life immediately but with no 5-year guarantee Permanent disability benefits Eligibility requirements for Permanent Total Disability (1) Disability not due to employees own grave misconduct, notorious negligence, habitual intoxication, or willful intention to kill himself or another; (2) Employee is: in service at the time of disability; or b) even if separated, he has paid at least 36 monthly contributions within the 5-year period immediately prior to disability or has paid a total of at least 180 monthly contributions prior to disability; and (3) Member is not enjoying old-age retirement benefit. Benefit for Permanent Total Disability Monthly income benefit for life equal to basic monthly pension This is effective from date of disability; If member is in service at the time of disability and he has paid at least 180 monthly

LABOR LAW REVIEWER


if separated, he has rendered at least 3 years of service and paid at least 6 monthly contributions in the 12 month period immediately prior to disability; (2) All sick leave credits including CBA sick leaves for the current year has been used up; and (3) Maximum of 120 days per 1 calendar year (so maximum permissible for the same sickness and confinement is 240 days for 2 consecutive years). Benefit 75% of the current daily compensation for every day or fraction thereof of disability or P70 whichever is higher. Separation benefits Eligibility requirements (1) 60 years of age, or separation from service with at least 3 years but not over 15 years served (2) Below 60 years of age, but at least 15 years of service rendered. Benefit (1) For 60 years of age or separated from service with 3 to 15 years of service: cash payment of 100% of ave. monthly compensation for each year of service (so essentially, the total amount of all contributions paid) or P12,000 whichever is higher. (2) Below 60 years of age and at least 15 years of service: cash payment equivalent to 18 x (monthly pension) at the time of resignation or separation plus an old-age pension benefit equal to basic monthly pension. Unemployment benefits Sec 11 Eligibility requirements a) Employee separated from service due to abolition of his office or position; and b) Employee has been paying integrated contributions for at least 1 year prior to separation. Benefit Monthly cash payments of 50% of average monthly compensation for a duration which is proportional to years rendered, ranging from 2 months to 6 months. Survivorship benefits Beneficiaries are entitled to the following: Basic survivorship pension which is 50% of basic monthly pension; and Dependent childrens pension not exceeding 50% of the basic monthly pension. Life insurance benefits Note: Judiciary and Constitutional Commissions are entitled to life insurance only. Dependent children (legitimate, legitimated, legally adopted, and illegitimate) but RA 8291 does not distinguish share of legitimate and illegitimate children.

75

2) Secondary shall only receive when the primary beneficiaries are absent Dependent parents Legitimate descendants, subject to the restrictions on dependent children. (See Annex B for Comparison between the SSS law and the GSIS Law)

C. Limited Portability Law (RA 7699)


Coverage (1) Workers who transfer employment from one sector to another; or (2) Those employed in both sectors (public and private). Process The covered worker shall have his credible services or contributions in both Systems credited to his service or contribution record in each of the Systems and shall be totalized 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: Provided, however, That overlapping periods of membership shall be credited only once for purposes of totalization (Sec. 3) Totalization shall refer to the process of adding up the periods of creditable services or contributions under each of the Systems, for purposes of eligibility and computation of benefits (Sec. 2e). Note: Overlapping periods of membership in case of those employed in both sectors at once are to be counted only ONCE for purposes of totalization. Why? To be able to satisfy eligibility requirements of benefits provided for by either SSS or GSIS.

D. Employees Compensation Coverage and when compensable


Coverage Sec. 2. Scope (a) Every employer shall be covered. (b) Every employee not over sixty (60) years of age shall be covered. (c) An employee over sixty (60) years of age shall be covered if he had been paying contributions to the System prior to age sixty (60) and has not been compulsorily retired.

4. Beneficiaries
1) Primary Dependent spouse until remarriage;

LABOR LAW REVIEWER


(d) An employee who is coverable by both the GSIS and SSS shall be compulsorily covered by both Systems. Sec. 5. Foreign Employment (a) Filipinos working abroad in the service of an employer as defined in Section 3 hereof shall be covered by the System, and entitled to the same benefits as are provided for employees working in the Philippines. Sec. 6. Effectivity (b) Coverage of employees shall take effect on the first day of employment. When compensable Grounds: (1) 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. (2) For the sickness and the resulting disability or death to be compensable, the sickness must be the result of an occupational disease listed under Annex A of these Rules with the conditions set therein satisfied, otherwise, proof must be shown that the risk of contracting the disease is increased by the working conditions. Limitation: No compensation shall be allowed to the employee or his dependents when the injury, sickness, disability, or death was occasioned by any of the following: (1) his intoxication; (2) his willful intention to injure or kill himself or another; or (3) his notorious negligence (4) As otherwise provided by law. (2) The term shall not be limited to the employees of a particular employer, unless this code explicitly states. (3) 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 I Sec. 1: (nn) Rank-and-File Employee refers to an employee whose functions are neither managerial nor supervisory in nature. 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) (1) Government Corporate Employees (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. 1987 Constitution, Art. IX-B, Sec. 2 (5) 5. The right to self-organization shall not be denied to government employees. E.O. 180, Sec. 2 All government employees can form, join, or assist employees organizations of their own choosing for the furtherance and protection of their interests. They can also form, in conjunction with appropriate government authorities, labor-management committees, work councils and other forms of workers participation schemes to achieve the same objectives. (2) 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 use of independent judgment. 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.

76

VII. Labor Relations Law


A. Right to Self-organization B. Right to Collective Bargaining C. Right to Peaceful Concerted Activities

A. RIGHT TO SELF-ORGANIZATION
a. Who may unionize for purposes of collective bargaining (covered employees/workers)
(a) All Employees (General Rule) Right to Self-Organization: Coverage General Rule: ALL employees of all kind of employers public or private, profit or non-profit, commercial or religious. (Art. 243) Employee: Definition Who is an employee? Art. 212(f). Employee includes: (1) Any person in the employ of an employer.

63

LABOR LAW REVIEWER


Why cant supervisors join a union of rank-andfile? 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). Supervisory employees, while in the performance of supervisory functions, become the alter ego of the management in the making and the implementing of key decisions. It would be difficult to find unity or mutuality of interests in a bargaining unit consisting of a mixture of rank-and-file and supervisory employees. (Toyota Motor Phil. Corp. v Toyota Motor Phil. Corp. Labor Union, 1997) 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 supervisors union operating the same establishment may join the same federation or national union. (Art. 245). (3) Aliens 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: (1) Have valid permits issued by DOLE (2) Reciprocity: That said aliens are nationals of a country which grants the same or similar rights to Filipino workers IRR, Book V, Rule II, Sec. 2, Par. 1, 3rd sentence Alien employees with valid working permits issued by the Department may exercise the right to selforganization and join or assist labor unions for purposes of collective bargaining if they are nationals of a country which grants the same or similar rights to Filipino workers, as certified by the Department of Foreign Affairs. (4) Security Guards 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) In Dec 1986, President 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-andfile or the supervisory union, depending on their rank. (Manila Electric Co. v.Sec. of Labor, 1991) (1) Who cannot form, join, or assist labor organizations 1. Managerial Employees and Confidential Employees Who are managerial employees? (Functional Test) Art. 212 (m) Managerial Employee 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 1) Managerial employees are NOT eligible to join, assist or form any labor organization. 2) Supervisory employees shall not be eligible for membership in a labor organization of the rank-andfile 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. Confidential Employees: (Nature of Access Test) Confidential employees are those who: (1) assist or act in a confidential capacity (integral part of the job) (2) to persons who 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. By the very nature of their functions, they assist and act in a confidential capacity to, or have access to

77

LABOR LAW REVIEWER


confidential matters of, persons who exercise managerial functions in the field of labor relations. {Thus there is a 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. RoldanConfessor, 1996) The disqualification of managerial and confidential employees from joining a bargaining unit for rank and file employees is already well-entrenched in jurisprudence. While Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor organization to managerial employees, jurisprudence has extended this prohibition to confidential employees or those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner to managerial employees and hence, are likewise privy to sensitive and highly confidential records. (Standard Chartered Bank Employees Union v SCB, 2008) Nomenclature not Controlling: Function Test 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 Indurstries Corp. of the Philippines. v. Laguesma ,2000) 2. Employee-Member of Cooperative 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 workmen's 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) 5. Members of the Armed Forces of the Philippines, Policemen, Police Officers, Firemen and Jail Guards (E.O. 180, Sec. 4) High-level or managerial employees (E.O. 180, Sec. 3) government

78

6.

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) BUT Employees who withdrew their membership from the cooperative are entitled to form or join a labor union for the negotiations of a CBA. (CENECO v DOLE, 1991) 3. Employees of International Organizations

High-level Employee: Definition Is one whose functions are normally considered policy determining, managerial or one whose duties are highly confidential in nature. 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.

b. Right To Self-Organization: Basis


(1) 1987 Constitution 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 SelfOrganization (1) 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

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 Phil. Government has granted immunity from local jurisdiction. (International Catholic Migration Commission v. Calleja, 1990) 4. Non-Employees

LABOR LAW REVIEWER


labor organizations of their own choosing for purposes of collective bargaining. (2) Ambulant, intermittent, and itinerant workers, self-employed people, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection. 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. 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) 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) The BLR correctly observed that the :recognition of the tenets of the [INC] sect xxx should not infringe on the basic right to self-organization granted by the constitution to workers, regardless of religious affiliation. (Kapatiran sa Meat and Canning Division v Calleja, 1988)

79

d. Worker Qualification
Art. 277. Miscellaneous Provisions c. 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. 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. 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) (2) Executive Order No. 180 See previous page

c. Right to Self-Organization: Extent and Scope


ART. 246: Non-abridgment of Right to SelfOrganization It shall be unlawful for any person to restrain, coerce, discriminate against or unduly interfere with employees and workers in their exercise of the right to self-organization. Right to Self-Organization: Scope The right to self organization shall also include: (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); (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, G.R. 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 self-organization is a compelling reason why their withdrawal from the cooperative must be allowed. As pointed out by the union, the

d. Bargaining Unit (1) Test to determine the constituency of an appropriate bargaining unit

(W-A-P-E) (1) Will of the Employees (Globe Doctrine) (2) Affinity & unity of Employees interest, such as substantial similarity of works and duties or similarity of compensation & working conditions (3) Prior CB history (4) Employment status i.e. temporary, seasonal, & probationary. (UP v. Ferrer-Calleja, 1992 citing Democratic Labor Assoc v. Cebu Stevedoring Co.) Community or Mutuality of Interests FUNDAMENTAL TEST: [T]he 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 Interest: 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

LABOR LAW REVIEWER


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 6 6 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 spin-offs, 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 [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 over all 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) 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

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 Assn.,1958) 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. (Phil. 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 interest of industrial peace. The breaking up of bargaining units into tiny units will greatly impair their organizational value. (Filoil Refinery Corp. v Filoil Supervisory and Confidential Employees Union, 1972) 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 of the

80

LABOR LAW REVIEWER


DOCTRINE usually applies to employees with rare skills or highly technical ones. CBA Coverage When there has been a factual determination by the Labor Arbiter that the petitioners were regular employees, said employees shall fall within the coverage of the bargaining unit and are therefore entitled to CBA benefits as a matter of law and contract. (Farley Fulache, et a. v ABS-CBN, 2010) Effect of Prior Agreement Prior agreement as to the inclusion or exclusion of workers in a bargaining unit or prohibition from forming their own union 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 selforganization. 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) Effect of Including Employees Outside the Bargaining Unit / Mixture of RAF and Supervisory Employees 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. Definition and role of law 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 labor-management councils shall be elected by at least the majority of all employees in said establishment. Bargaining Unit: Defined Book V, Rule 1, Sec1(d) Definition of TermsBargaining Unit refers to a group of employees sharing mutual interests within a given employer unit, comprised of all or less than all of the entire body of employees in the employer unit or any specific occupational or geographical grouping within such employer unit. Appropriate Bargaining Unit: Defined 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 Corp. vs 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 a group of employees with community of interests. A SOVEREIGN BODY. It selects the sole and exclusive bargaining agent.

81

(2) Voluntary recognition


Definition 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 (1) Unorganized establishment; (2) Only one union asking for recognition; (3) The members of the bargaining unit did not 67 object to the projected recognition of the union. (a) 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: (1) A joint statement under oath of voluntary recognition attesting to the fact of voluntary recognition (2) 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; (3) The approximate number of employees in the bargaining unit, accompanied by the names of those who support the voluntary recognition comprising at least a majority of the members of the bargaining unit; and (4) A statement that the labor union is the only legitimate labor organization operating within the bargaining unit.

LABOR LAW REVIEWER


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. The employer may voluntarily recognize the representation status of a union in unorganized establishments. In this case, however, the company [SLECC] was not an unorganized establishment when it voluntarily recognized SMSLEC as its exclusive bargaining representative. Prior to the voluntary recognition, another union [CLUP-SLECC] has already filed a petition for certification election. Thus, the companys voluntary recognition of SMSLEC is void. (SLECC v Sec. of Labor, 2009) 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 Sec. of Labor, 1998) It is a STATUTORY POLICY. (Belyca Corp. v. FerrerCalleja, 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 part of the voters to make their choice, is controlling. (PLUM Federation of Industrial and Agrarian Workers v Noriel, 1978) 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 only union members can vote. Procedure (a) Certification election in an unorganized establishment (Art. 257) (1) A petition shall be filed by a legitimate labor organization. (2) 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 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. (b) Certification election in an organized establishment (Art. 256) A petition questioning the majority status shall be filed by a legitimate labor organization (including mother union and local chapter)

82

(3) 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 nonadversary 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 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

LABOR LAW REVIEWER


Requisites for petition: (1) Verified (2) Filed within the 60-day period before expiration of CBA (freedom period) (3) 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. (Port Workers Union v DOLE, 1992) 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) 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 Signature Eagle Ridge Golf and Country Club v CA and EREU (2010): Citing S.S. Ventures International, Inc. v S.S. Venture Labor Union, the Court said that the employees withdrawal from a labor union made before the filing of the petition for certification election is presumed voluntary, while withdrawal after the filing of such petition is considered to be involuntary and does not affect the petition. Hence, such withdrawal cannot work to nullify the registration of the union. (1) 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 and Employment , 1998) (2) If the petition is filed by a national union or federation, it shall not be required to disclose the names of the local chapters officers and members. (3) Med-Arbiter shall automatically order an election. (4) Requisites for election: o by secret ballot o at least majority of ALL eligible voters in the unit must have cast their votes. WHERE to file? SEC. 2 (5) 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? SEC. 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) 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. Regional Office which issued the petitioning union's 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 all others; in which case, the latter shall indorse the petition to the former for consolidation. A petition for certification election may be filed anytime, except: (1) 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; (2) when the duly certified union has commenced and sustained negotiations in good faith with

83 69

WHEN to file? SEC. 3

LABOR LAW REVIEWER


the employer in accordance with Article 250 of the Labor Code within the one year period referred to in the immediately preceding paragraph; (3) 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; (4) when a collective bargaining agreement between the employer and a duly recognized or certified bargaining agent has been registered in accordance with Article 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. 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: [A]ny 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: [T]he 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 for intervention shall be resolved in the same decision issued in the petition for certification election. The requisite written consent representing substantial support of the workers in the bargaining unit [as required in Art. 256] applies to petitioners for certification ONLY, and NOT to motions for intervention.(PAFLU v Calleja, 1989) Preliminary Conference; hearing Book V Rule VIII Sec9 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 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: (1) the name of the employer or the establishment; (2) A description of the bargaining unit; (3) a statement that none of the grounds for dismissal enumerated in the succeeding paragraph exists; (4) the names of the contending labor unions which shall appear in the following order: a. the petitioner unions in the order of the date of filing of their respective petitions; b. the forced intervenor; and c. No union; (5) 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 offcver shall disqualify the local/chapter from participating in the certification election; and (6) 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 Where: 2 conspicuous places in company premises When: at least 10 days before actual election Contents of Notice:

84

70

LABOR LAW REVIEWER


a) Date and Time of election; b) Names of all contending unions; c) Description of the bargaining unit d) 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. 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) 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 of reemployment, are eligible to vote in certification elections. If the dismissal is under question, employees concerned could still qualify to vote in the elections. (Philippine Fruits v Torres, 1992) 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 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. (Phil. Telephone & Telegraph Co. v Laguesma, 1993) f) Voting Day IRR, Book V Rule IX Sec. 2. The election shall be set on a regular business day. Organized v. Unorganized Establishment Art. 256: Art. 257: ORGANIZED UNORGANIZED Bargaining Existing, has one None agent Petition filed Freedom Period Has to be a VERIFIED petition 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 interpreted 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 Must be duly supported by 25% of ALL THE MEMBERS OF THE APPROPRIATE BARGAINING 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 agent. No need to be verified Not applicable. No freedom period. Can file petition anytime.

85

Substantial support rule

NO substantial support rule. WHY? Intention of law is to bring in the union, to implement policy behind Art. 211a.

71

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 certification 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

LABOR LAW REVIEWER


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: a. being notified or informed of petitions of such nature; and b. submitting the list of employees during preelection conference should the Med-Arbiter act favorably on the petition. The employer is not a party to a certification election, which is the sole or exclusive concern of the workers. The only instance when the employer may be involved in that process is when it is obliged to file a petition for certification election on its workers request to bargain collectively pursuant to Art. 258. (Hercules Industries, Inc. v Sec. of Labor, 1992) 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) A companys interference in the CE creates a suspicion that it intends to establish a company union. (Oriental Tin Can Labor Union v. Secretary of Labor, 1998) (c) Rules prohibiting the filing of petition for certification election 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 60 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 socalled freedom period is to ensure industrial peace between the employer and its employees during the existence of the CBA. (Republic Planters Bank Unionv. 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) One-Year Bar 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, Nov. 8, 2008)]. [F]rom the date of recording of voluntary recognition or from valid certification, consent, run-off election where no appeal on the results of election is pending. Negotiation Bar Rule Book V, Rule VIII, Sec 3 (b): When to file A petition for certification election may be filed anytime, EXCEPT: o When the duly certified union has commenced and sustained negotiations in good faith with the employer o in accordance with Art 250 of the Labor Code o 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, Nov. 8, 2008] The Med-Arbiter may dismiss a petition on any of the following grounds: xxx xxx xxx e) 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 Deadlock Bar Rule Book V, Rule VIII, Sec. 3 (c). A petition for certification election may be filed anytime, EXCEPT: 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; Book V, Rule VIII, Sec. 14 (e), as amended by DO40-F-03. The Med-Arbiter may dismiss a petition on any of the following grounds: xxx xxx xxx e) Xxx where there exists a bargaining deadlock which has been submitted to conciliation or arbitration or has become the subject of a valid notice of strike or lockout where an incumbent or certified bargaining agent is a party; A deadlock is defined as the counteraction of things producing entire stoppage; a state of inaction or of neutralization caused by the opposition of persons or of factions (as in government or voting body); standstill. (Divine World University v Sec of Labor and Employment, 1992)

86

LABOR LAW REVIEWER


Collective Bargaining Deadlock is defined as the situation between the labor and the management of the company where there is failure in the collective bargaining negotiations resulting in a stalemate. (SMC v NLRC, 1999) There is no bargaining deadlock where there is failure to exhaust all the steps in the grievance machinery. (SMC v NLRC, 1999) Contract Bar Rule (Art. 232) 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-F-03 Series of 2008, Nov. 8, 2008)]: a) The petitioning union or national union/federation is not listed in the Departments registry of legitimate labor unions or that its registration certificate has been cancelled with finality in accordance with Rule XIV of these rules. Contract Bar Rule Applied: Extended CBA (Colegio de San Juan de Letran v Assoc., 2000) 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 purpose is to ensure stability in the 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 Phils. 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. 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 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) (d) Requirements for validity certification election of

87

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

7 2 Voter: Defined Eligible 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. Book V, Rule IX sec 17 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. 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-F03 Series of 2008, Nov. 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, Nov. 8, 2008)(1) When: Within twenty-four (24) hours from final canvass of votes, there being a valid election (2) Who: the Election officer shall transmit (3) What: the records if the case to the Med-Arbiter who shall, within the same period from receipt of the minutes and result of election, (i) issue an order proclaiming the results of the election and (ii) certifying the union which obtained a

LABOR LAW REVIEWER


majority of the valid votes cast as the sole and exclusive bargaining agent on the subject bargaining unit under any of the following conditions: (a) 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; (b) 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. xxx xxx xxx (e) Protests and Other Questions Arising from Conduct of Certification Election Requirements in order that a protest filed would prosper (1) 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 (2) The protest must be formalized before the MedArbiter within five (5) days after the close of the election proceedings. Protests not so raised are deemed waived. (Jisscor Independent Union v Torres, 1993) Appeal from Certification Election (Art. 259) i. Appealable: Order of Med-Arbiter ii. 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. iv. Period for decision: 15 calendar days 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 Inv. 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) Effect of Petition for Cancellation of Trade Union Registration Certification election can be conducted despite pendency of a petition to cancel the union registration certificate. For the fact is that at the time the union, whose registration certificate is sought to be cancelled, filed its petition for certification, it still had legal personality to perform such act absent an order directing its cancellation. (Samahan ng mga Manggagawa v Laguesma, 1997)

(4) Run-off election


(a) Requirements (1) valid election took place because majority of the CBU members voted (2) 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 (3) No Choice receives a majority of the valid votes cast; (4) The total number of votes for all contending unions is at least 50% of the total number of votes cast. (5) There is no unresolved challenge of voter or election protest; (6) The run-off election shall be conducted between the labor unions receiving the two highest number of votes.

88

73

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 invalid votes. Since none got 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.

(5) 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.

(6) Consent election


Voluntarily agreed upon by the parties, during the preliminary conference after the receipt of petition for certification election Book V RVIII Sec 10 (as amended by DO 40-F-03 Series of @008, 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 Med-Arbiter shall forwith call for the consent election reflecting the parties agreement and the call in the minutes of the conference.

LABOR LAW REVIEWER


Certification election v. consent election Certification Consent election Election Purpose Aimed at Merely to determining the determine the sole and exclusive issue of bargaining agent of majority all employees in an representation appropriate of all the bargaining unit for workers in the the purpose of appropriate collective collective bargaining bargaining unit 1st Level of Choice: Yes Union or No Union 2nd Level of Choice: If Yes Union wins, WHICH union. (UST Faculty Union v. Bitonio, 1999) Ordered by the DOLE cannot stand on their own. Affiliation does not mean they lost their own legal personality (Adamson v. CIR ,1984). 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. 2-E 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. 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. 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. In Toyota Motor Philippines Corp. v. Toyota Motor Philippines Corp. Labor Union and the Secretary of Labor and Employment (G.R. 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.

89

Conduct

Voluntarily agreed upon by the parties, with or w/o intervention from DOLE

(7) Affiliation and disaffiliation of local union to mother union


A. 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 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) 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 the common interest of all its members, subject only to restraints imposed by the constitution and by the by-laws of the 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 interest 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

74

LABOR LAW REVIEWER


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, G.R. 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 Phils., G.R. No. 160352, G.R. No. 160352, July 23, 2008, the Tagaytay ruling was reiterated. B. Local Union Disaffiliation/ Mass Disaffiliation If union is a chartered local It losses its legal personality. (a) 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 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)

90

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 vs. Ramos, 2000) The locals are separate and distinct units primarily designed to secure and maintain an equality of bargaining power between the employer and their employee-members; 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 vs. 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 vs. NLRC, 2002) 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]) Disaffiliation: Effect on Legal Status If union is independently registered It retains its legal personality.

(8) Union dues and special assessments


Union Dues and Special Assesments: Distinguished Union dues 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) A. Union Funds Rights/Conditions Organization of Membership in a Labor

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 org 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 org 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)

LABOR LAW REVIEWER


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 (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 Employeee. The authorization should specifically state the amount, purpose and beneficiary of the deduction. Note: Sec of Labor or his duly authorized representative may inquire into financial activities of legitimate labor orgs 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 The system of check-off is primarily for the benefit of the Union, and only indirectly, for the individual employees. (Marino v Gamilla, 2009) Note: There must be strict and full compliance with the requisites. NO SHORTCUTS. Substantial compliance is not enough. (Palacol v. FerrerCalleja) Although the law does not prescribe a particular form for the written authorization for the levy or check-off of special assessments, the authorization must embody the genuine consent of the union. In this case, since the authorization of the check-off and the ratification of the MOA are embodied in one document, there was no way for the union member to separate his/her consent to the ratification from the authorization. This constitutes unsatisfactory compliance. (Marino v Gamilla, 2009) The Office of the President has no jurisdiction to make adjudication on the attorneys fees. (Pacific Banking Corp. v Clave, 1984) Union funds [not withheld portion of compensation of employees] should be used for the payment of attorneys fees. It is the union, not the employees, who is obligated to the attorney. (Pacific Banking Corp. v Clave, 1984) 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

91

(9) 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)

76

ART. 222 (b) Attorneys fees, negotiation fees or 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. (a) Requirements for validity (checkoff) (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. A check-off is a process or device whereby the employer, on agreement with the Union, recognized as the proper bargaining representative, or on prior authorization from the employees, deducts union dues or agency fees from the latters wages and remits them directly to the Union. (Marino v Gamilla, 2009)

B. Right to Collective Bargaining


1. Duty to Bargain Collectively a) Kiok Loy v. NLRC (1986) ruling
(1) While it is a mutual obligation, the employer is not under any legal duty to initiate contract negotiation. (2) 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 Labor Code

LABOR LAW REVIEWER


The duty to bargain collectively means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any concession. 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. 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 XVI Sec 2. Disclosure information A. The parties shall, at the request of either 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. B. 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. I of the Labor Code]. (San Miguel Corp. v. NLRC, 1999) Bargaining Procedure: (Book V, Rule XVI) A. Private 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

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 modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace. Duty to Bargain: Statutory Policy Labor Code, Art 211 A It is the policy of the State: (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. Book V Rule XVI Sec. 1. Policy It is the policy of the State to promote and emphasize the primacy of free and responsible exercise of the right to self-organization and collective bargaining, either through single enterprise level negotiations or through the creation of a mechanism by which different employers and recognized certified labor unions in their establishments bargain collectively. 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 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) Duty to Bargain: Meaning Art. 252. Meaning of duty to bargain collectively.

92

77

LABOR LAW REVIEWER


of the employees to bargain collectively accordance with the provisions of this Code. in 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. vs. CA , 2004) Conciliation/Preventive Mediation 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. In Nissan Motors Philippines Inc. v. Secretary of Labor and Employment, G.R. 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, G.R. 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, sine 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. Board Intervention

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

93

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 proprio & call parties to conciliation meetings

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. 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 vs. CIR, 1964) Compare with: More than a month after the proposals were submitted, the employer has not made any counter-proposals. 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 vs. Association, 2000)

LABOR LAW REVIEWER


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 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 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. Composition 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 Conciliators-Mediators 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. 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 non-adversarial 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 counselling 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 Voluntary Arbitration Advisory Council 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. Composition (1) Administrator of the National Conciliation and Mediation Board as Chairman, (2) 1 other member from the government, (3) 2 members representing labor, and (4) 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.

94

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. National Conciliation and Mediation 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.

LABOR LAW REVIEWER


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 Mandatory Issues (Art. 252) (1) Wages (2) Hours of work (3) All other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement Permissive Issues: Unilateral benefits extended by the employer (cf., Union of Filipro Employees-Drug v. Nestle, 2008) A collective bargaining agreement refers to the negotiated contract between a legitimate labor organization and the employer concerning wages, hours of work and all other terms and conditions of employment in a bargaining unit, including mandatory provisions for grievances and arbitration machineries. As in all other contracts, the parties in a CBA may establish such stipulations, clauses, terms and conditions as they may deem convenient provided they are not contrary to law, morals, good customs, public order or public policy. (Manila Fashions v. NLRC, 1996) 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 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 Book V Rule I Sec. 1 (j) Collective Bargaining Agreement or CBA refers to the contract between a legitimate labor union and the employer concerning wages, hours of work, and all other terms and conditions of employment in a bargaining unit. 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. (cf. Art. 250, 252) CBA: Impressed with Public Policy A CBA, as a labor contract within the contemplation of Article 1700 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) CBA: Effect of Sub-standard Contract This was deleted as a ground for cancellation of registration by R.A. 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: a. authorized by the Secretary of Labor; or b. when it is at issue in any judicial litigation when public interest or national security so requires. Note: Refer to Book V Rule XVII Sec. 1-3 for the venue of filing, the requirements for registration, and the payment of registration fee. CBA: Beneficiaries All workers in a CBU. When a collective bargaining contract is entered into by the union representing the employees and the employer, even the nonmember 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. CBA Interpretation, Enforcement Administration and

95

Nature of Contract and Contract Interpretation

LABOR LAW REVIEWER


The terms and conditions of a collective bargaining contract constitute the law between the parties. (Mactan Workers Union vs. 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 (Art. 1700) 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 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 the 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 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. 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 a term 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 eventuality, any provision of law should then apply. (Manila Electric Co. v. Quisumbing, 1999)

96

80

CBA Duration 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 effect 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. The last sentence of Article 253, which provides for automatic renewal pertains only to the economic provisions of the CBA, and does not include representational aspect of the CBA. An existing existing CBA cannot constitute a bar to a filing of petition for certification election. When there is a representational issue, the status quo provision insofar as the need to await the creation of a new agreement will not apply. Otherwise, it will create an absurd situation where the union members will be forced to maintain membership by virtue of the union security clause existing under the CBA and, thereafter, support another union when filing a petition for certification election. If we apply it, there will always be an issue of disloyalty whenever the employees exercise their right to selforganization. The holding of a certification election is a statutory policy that should not be circumvented, or compromised. (PICOP Resources, Inc. v. Taneca et. al., 2010) Arbitrated CBA In the absence of an agreement between the parties, 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

LABOR LAW REVIEWER


justifications for its retroactive application. (Manila Electric Company vs. 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 Corp. v. Manila Central Line Free Workers Union, 1998) CBA and 3rd 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. As a general rule, there is no law requiring a bona fide purchaser of the assets of an on-going concern to absorb in its employ the employees of the latter. However, although the purchaser of the assets or enterprise is not legally bound to absorb in its employ the employees of the seller of such assets or enterprise, the parties are liable to the employees if the transaction between the parties is colored or clothed with bad faith. (Sundowner Devt. Corp. v Drilon, 1989) General Rule: An innocent transferee of a business establishment has no liability to the employees of the transferor to continue employing them. Nor is the transferee liable for past unfair labor practices of the previous owner. Exception: (1) when the liability therefore is assumed by the new employer under the contract of sale, or (2) when liability arises because of the new owner's 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 filling of vacancies in the facilities of the purchaser. (Manlimos v. NLRC, 1995) grievances arising from: a) the interpretation or implementation of their CBA; and b) those arising from the interpretation or enforcement of company personnel policies. 3) 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. 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 R.A. 6715, only mandates that the parties to the CBA establish a machinery to settle problems 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) (b) Voluntary Arbitration Voluntary Arbitration: Procedure Art. 260. Grievance Machinery and Voluntary Arbitration xxx xxx xxx 1) Parties to a CBA shall: a) Name and designate in advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, OR b) 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. 2) In case the parties fail to select a Voluntary 81 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 the 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 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

97

2. Mandatory provisions of CBA


(a) Grievance Procedure Art. 255. Exclusive Bragaining Representation and Workers Participation in Policy and DecisionMaking xxx However, an individual employee or group of employees shall have the right at any time to present grievances to their employer. xxx Art. 260. Grievance Machinery and Voluntary Arbitration The parties to a Collective Bargaining Agreement shall include therein: 1) Provisions that will ensure the mutual observance of its terms and conditions. 2) A machinery for the adjustment and resolution of

LABOR LAW REVIEWER


arbitrate. Going a step further, in the event that they declare their intention to refer their differences 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: Basis and Rationale 1987 Constitution. Art. XIII, Sec. 3 x x x 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 - 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 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 Distinguished and Interest Disputes:

98

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 1) As stated in CBA (or selection procedure of a VA), preferably from a list of qualified VAs accredited by NCMB 2) If parties fail to select, the Board (NCMB) shall select VA pursuant to selection procedure as stated in CBA Art. 260 x x x. For this purpose, parties to a Collective Bargaining Agreement shall name and designate in advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, or include in the agreement the 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 Arbitrators, the Board shall designate the Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure agreed 82 upon in the Collective Bargaining Agreement, which shall act with the same force and effect as if the Arbitrator or panel of Arbitrators has been selected by the parties as prescribed. 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 arbitrarion. But this was changed by R.A.No. 6715 which took effect on March 21, 1989.

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: Arbitrable Issues Disputes covered in Voluntary Arbitration: General Rule (Art. 261):

LABOR LAW REVIEWER


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 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 Corp., 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 Arbitrator or panel of 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. 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. Petitioner-company's objection to the authority of the Voluntary Arbitrator 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 arbitrator's award when stipulated by the parties to be 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 collective bargaining inserted by virtue of the award of the arbitrator. To do otherwise would violate the prescription of the

99

LABOR LAW REVIEWER


Constitution against impairment obligation of contracts. of 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, Rule VII 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 x x x shall be final and executory after ten (10) calendar days from receipt of the copy of the award or decision 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 decisions, awards, or orders." Hence, while there is an express mode of appeal from the decision of a labor arbiter, Republic Act No. 6715 is silent with respect to an appeal from the decision of a voluntary arbitrator. (Luzon Development Bank v. Assoc of Luzon Devt 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 "quasijudicial 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. 1-95, 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 entities18 not expressly excepted from the coverage of Sec. 9 of B.P. 129 by

84

We hold that regardless of any law anterior or posterior to the Arbitrator's 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. When the parties submitted their grievance 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 wherein he refused to act on the Union's 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

100

LABOR LAW REVIEWER


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 wholly by the parties or subsidized by the special voluntary arbitration fund, shall take into account the following factors: a. Nature of the case b. Time consumed in hearing the case c. Professional Standing of the Voluntary Arbitrator d. Capacity to Pay of the parties. (c) 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. (d) Labor Management Council Art. 255. Exclusive Bargaining Representation and Workers Participation in Policy and DecisionMaking x x x 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 decisionmaking 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 labormanagement 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. 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. Court of Appeals, 2004) (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 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 from receipt of such notice;

101

85

3.

Unfair Labor Practice in Collective Bargaining

(a) Bargaining in bad faith

LABOR LAW REVIEWER


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. (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 Act's 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 recognition As 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. (KMART Corporation v NLRB, 1980 626 F.2d 704 )

102

4. Unfair Labor Practice (ULP)


Unfair Labor Practice (ULP): Definition Art. 212 (k) Unfair labor practice - any unfair labor practice as expressly defined by the Code. 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. Phil. Global , 2006) ULP: Employer-Employee Relationship Required An unfair labor practice may be committed only within the context of an employer-employee 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

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. Court of Appeals , 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 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 constitutes interference because the company is still under obligation to bargain with the union as the bargaining representative. (The Insular 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)

86

LABOR LAW REVIEWER


withdraw from one to which he belongs. (Art 248 [b]) ULP: Statutory Construction 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 law's general prohibitory language in light of infinite combinations of events 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) 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 Assn. v. Insular Life Assurance Co. Ltd, 1971) 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 namecalling, 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 activities, or surveillance thereof, are such instances of interference, 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 officials 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 Co. Employees Assn. v. Insular Life Assurance Co. Ltd, 1971) Economic Coercion Concerted Activities The demonstration held by the petitioners before the Malacanang was against the alleged abuses of some Pasig policemen, not against their employer. Said demonstration was purely and completely an exercise of their freedom of expression in general and of their right to assembly and petition for redress of grievances in particular before appropriate governmental agency, the Chief Executive, again the officers of the municipality of Pasig. They exercised their civil and political rights for their mutual aid and protection from what they believed were police excesses. As a matter of fact, it was the duty of the company to protect Union and its members from harassment of local police officers.

103

88

(a) 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; Interrogation Questioning of employees concerning union membership and activities and disparaging remarks by supervisory employees made in such away as to hamper the exercise of free choice on the part of the employees, have been uniformly condemned as an unfair labor practice. (Scotys Dept. 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 interferes with employees in the exercise of their rights to selforganization. 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-organization, ULP is committed. The subjection by the company of union to vilification and its participation in soliciting membership for a competing union is also ULP act. (Phil. Steam Navigation Co. v. Phil. 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

LABOR LAW REVIEWER


Acts of ULP in this case are: Refusal of the Company to permit all its employees and workers to join the mass demonstration against alleged police abuses and the subsequent separation of the eight petitioners from the service. (Philippine Blooming Mills Employees Organization v. Philippine Blooming Mills, Co., 1973) 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 of which the employees in interest are part of. (Del Monte v. Saldivar , 2007) Different kinds of Union Security Clause (Azucena, 2010) (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 Nonmembers 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 complelled 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 ands 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 followed even if it is based on a closed-shop provision of a CBA, i.e. the substantive as well as the procedural due process requirements. (Del Monte v. Saldivar, 2007)

104

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: (1) a representation by the employee that he is not a member of a labor organization (2) a promise by the employee that he will not join a union (3) a promise by the employee that upon joining a labor organization, he will quit his employment

c) Company Dominated Union


Art. 248 (d) To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization, including the giving of financial or other support to it or its organizers or supporters; 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.

d) Discrimination Unionism

Encourage/Discourage

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. 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 nonunion 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 nonmembers of the recognized collective bargaining agent; UNION SECURITY CLAUSE is a stipulation in the CBA whereby the management recognizes that the

87

LABOR LAW REVIEWER


interference to a right to self-organization

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;

Arts. 248(a) and 249(a) are the general grant of protection. All other cases of ULP enumerated under the said provisions are derivatives of Arts. 248(a) and 249 (a).

105

f) Exaction-Featherbedding (ULP of Labor Organizations. See next sub topic) 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 self-organization; 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 selforganization that it shall be unlawful and shall constitute ULP act. [Sec. 6 (f) DOLE Department Order No. 18-02, Series of 2002]

2) 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.

3) 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

h) Violate duty to bargain or the bargaining agreement


Art. 248 (g) To violate the duty to bargain collectively as prescribed by this Code; (i) To violate a collective bargaining agreement

4) 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

i) Pay Negotiation/Attys Fees to settle disputes


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;

5) PAY Negotiation/Attys Fees to settle disputes


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;

(b) ULP of Labor Organizations

1) 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: (a) To restrain or coerce employees in the exercise of their right to self-organization. However, a labor organization shall have the right to prescribe its own rules with respect to the acquisition or retention of membership; Note the difference between the wordings of Art. 248(a) and Art. 249(a). Art. 248 (a) interfere, restraint, coerce Art. 249(a) restraint, coerce interfere not included in Art. 249 because any act of a labor organization amounts to

C. Right to Peaceful Concerted Activities


Right to Engage in 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.

LABOR LAW REVIEWER


Workers shall have the right to engage in concerted activities: a. 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. However, no labor union may strike and no employer may declare a lockout on grounds involving interunion and intra-union disputes. Constitution In accordance with law Labor Code Consistent with National Interest 1) 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 Art. 246. It shall be unlawful for any person to: (1) Restrain, (2) Coerce, (3) Discriminate Against Or (4) Unduly Interfere With Employees And Workers In Their Exercise Of The Right To SelfOrganization. Right to self-organization shall include the right to: form, (1) join, or (2) assist labor organizations 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. (Phil. Can Co. v. CIR, 1950) Strike: Effect on work relationship Although during a strike the worker renders no work or service and receives no compensation, yet his relationship as an employee with his employer is not severed or dissolved. (Elizalde Rope Factory, Inc. v. SSS, 1972) Strike: Economic Burden GENERAL RULE: Striking employees are not entitled to the payment of wages for un-worked days during the period of the strike pursuant to the principle of No work- No pay. EXCEPTION: The parties are not precluded from entering into an agreement to the contrary. On the other hand, when strikers abandon the strike and apply for reinstatement despite the existence of valid grounds but the employer either: a) refuses to reinstate them or b) imposes upon their reinstatement new conditions, such act would constitute unfair labor practices. The strikers, who refuse to accept the new conditions and are consequently refused reinstatement, are entitled to the losses of pay they may have suffered by reason of the employers discriminatory acts from the time they were refused reinstatement. Strikes: Forms (1) LEGAL STRIKE one called for a valid purpose and conducted through means allowed by law. (2) ILLEGAL STRIKE one staged for a purpose not recognized by law, or if for a valid purpose, conducted through means not sanctioned by law. (3) ECONOMIC STRIKE one staged by workers to force wage or other economic concessions from the employer which he is not required by law to grant (Consolidated Labor Association of the Phil. v. Marsman and Company 1964)

106

i. for the purpose of collective bargaining ii. through representatives of their own choosing, and (3) 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 only 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, G.R. No. 101858, Aug. 21, 1992)

1. Forms of Concerted Activities a. 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

LABOR LAW REVIEWER


(4) ULP STRIKE called against a company's unfair labor practice to force the employer to desist from committing such practices. (5) SLOWDOWN STRIKE one by which workers, without a complete stoppage of work, retard production or their performance of duties and functions to compel management to grant their demands (Ilaw at Buklod ng Manggagawa v. NLRC, 1991) (6) WILD-CAT STRIKE one declared and staged without filing the required notice of strike and without the majority approval of the recognized bargaining agent. (7) SIT DOWN STRIKE one wherein workers take over possession of the property of such business to cease production and to refuse access to owners. (8) SYMPATHETIC STRIKE one in which the striking workers have no demands of their own, but strike to make common cause with other strikers in other establishments. Strike: Conversion It is possible for a strike to change its character from an economic to a ULP strike. In the instant case, initially, the strike staged by the Union was meant to compel the Company to grant it certain economic benefits set forth in its proposal for collective bargaining. However, the strike changed its character from the time the Company refused to reinstate complainants because of their union activities after it had offered to admit all the strikers and in fact did readmit the others. It was then converted into an unfair labor practice strike. (Consolidated Labor Assoc. of the Phil. v. Marsman and Company, 1964) Non-conversion: Strike to lockout A strike CANNOT be converted into a pure and simple lockout by the mere expedient filing before the trial court a notice of offer to return to work during the pendency of the labor dispute between the union and the employer. (Rizal Cement Workers Union v. CIR, 1962) Strike: Grounds Book V Rule XXII Sec. 5. Grounds for Strike or Lockout: A strike or lockout may be declared in cases of: a) Bargaining deadlocks b) ULP. Violations of collective bargaining agreements, except flagrant and/or malicious refusal to comply with its economic provisions, shall not be considered ULP and shall not be strikeable. No strike or lockout may be declared: a) On grounds involving inter-union and intra union disputes, or b) Without first having filed a notice of strike or lockout, or c) Without the necessary strike or lockout vote having been obtained and reported to the NCMB, or d) After assumption by 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. Allowable strikes 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 strike 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 of 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 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.

107

b. Employer Lockout
Lockout: Definition Art. 212(p). Lockout: the temporary refusal of an employer to furnish work as a result of an industrial or labor dispute. 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 strike 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 of 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 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. Lockout: Prohibitions Art. 263 (b), last sentence:

96

LABOR LAW REVIEWER


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. 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 question, was included. It was due to a former official of plaintiff appellant's bank who was 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 emotional 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 picket lines which constituted illegal picketing especially so because it expressly stated that the petitioner union and its officers, agents or symphatizers "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 company's various offices

108

c. Picketing
Picketing: Definition NCMB Manual of Procedures 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: Limitation Picketing, like other freedom of expression in general, has limits. To the extent that 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 Bank 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?"

LABOR LAW REVIEWER


and installations 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) settlement of the dispute. Additional Requirements In cases 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 cases 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 the 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 NCMB, through its ConciliatorMediators, 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 resolution of their disagreement/conflict which may not necessarily bind the parties. If conciliation/mediation fails, the parties shall be encouraged to submit their dispute for voluntary arbitration. 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 NCMB would be unable to supervise the holding of the same, if and when it decides to exercise its power of supervision. The requirement of giving notice of the conduct of a strike vote to the NCMB at least 24 hours before the meeting for the said purpose is designed to: (1) Inform the NCMB of the intent of the union to conduct a strike vote; (2) Give the NCMB ample time to decide on whether or not there is a need to supervise the conduct of the strike vote to prevent any acts of violence and/or irregularities attendant thereto; and (3) Should the NCMB decide on its own initiative or upon the request of an interested party including the employer, to

109

2. Who may declare a strike or lockout


Striking party 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 on grounds of ULP.

3. Requisites of a valid strike


Strike: Procedural requirements 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. (1) 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... (2) Filing of notice of intention to strike 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 thereof. 2) In cases 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. 5) 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

LABOR LAW REVIEWER


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) (3) Observance of cooling-off periods 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 all efforts at mediation and conciliation to effect a voluntary settlement. Should the dispute remain unsettled until the lapse of the requisite number of days from the mandatory filing of the notice, the labor union may strike or the employer may declare a lockout. 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 or the management to take the appropriate remedy in case the strike or 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) 4) Strike vote considered when the strike or lockout vote was taken. The Department may, at its own initiative or upon the request of any affected party, supervise the conduct of the secret balloting. In every case, the union or the employer shall furnish the Department the results of the voting at least 7 days before the intended strike or lockout, subject to the cooling-off period herein provided. 5) Strike Vote Report

110
92

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. 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 egress from the employer's premises for lawful purposes or

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

LABOR LAW REVIEWER


- obstruct public thoroughfares. (Association of Independent Unions Philippines (AIUP), et. al. v NLRC, 1999)
in the Although rejecting the argument that PNOC and its 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 if 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 in 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 a strike vote were conducted, the said strike is illegal. (First City Interlink Transportation v. Roldan-Confesor)

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) 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. Maritima, 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 rendering 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 of violence. (5) If there be in this case a weighing of interests in the balance, the ban the law imposes 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 recent 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 the employees believe in good faith that ULP acts exist so as to constitute a valid ground to strike.

111

4. Requisites of a valid lockout


Lockout: Procedural Requirements 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... b) Filing of notice of 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

LABOR LAW REVIEWER


notice of lockout with the Department at least 30 days before the intended date thereof. (2) In cases 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 Proposals 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 does not conform with the requirements, the regional branch of the 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 NCMB, through its ConciliatorMediators, 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 resolution of their disagreement/conflict which may not necessarily bind the parties. If conciliation/mediation fails, the parties shall be encouraged to submit their dispute for voluntary arbitration. Effect of Illegal Lockout Art. 264 (a), par. 3, 1st sentence Any worker whose employment has been terminated as a consequence of any unlawful lockout shall be entitled to reinstatement with full backwages. 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 bystander," 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 and 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 selforganization 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, 94 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 Manggagawa (IBM) v. NLRC, 1991)

112

95

5. Requisites for lawful picketing

LABOR LAW REVIEWER


6. 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 person a) 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 strikers. The police force shall keep out of the picket lines unless actual violence or other criminal acts occur therein: Provided, That nothing herein shall be interpreted to prevent any public officer from taking any measure necessary to maintain peace and order, protect life and property, and/or enforce the law and legal order. B. Arrest and Detention of Law Violators Art. 266 1) GENERAL RULE: No union members or union organizers 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 b) if he has financial or pecuniary interest therein. (3) 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; (4) Claims for actual, moral, exemplary and other forms of damages arising from the employeremployee relations; (5) Cases arising from any violation of Art. 264 of this Code, including questions involving the legality of strikes and lockouts; (6) 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) regardless of whether accompanied with a claim for reinstatement. (Art. 217) (7) Money claims arising out of employer-employee relationship or by virtue of any law or contract, involving claims for actual, moral, exemplary an other forms of damages, as well as employment termination of OFWs; (8) Wage distortion disputes in unorganized establishments not voluntarily settled by the parties. (Art. 124) (9) Enforcement of compromise agreements when there is non-compliance by any of the parties. (Art. 227) (10) Other cases as may be provided by law. Exclusive and Original Jurisdiction subject to Articles 261 and 262 A case under Art 217 may be lodged instead with a voluntary arbitrator. The policy of the law is to give primacy to voluntary modes of settling dispute. Jurisdiction on Money Claims A money claim arising from ER-EE relations, excepting SSS, ECC/Medicare claims, is within the jurisdiction of a labor arbiter if: (1) The claim, regardless of amount, is accompanied with a claim of reinstatement; or (2) The claim exceeds P5,000, whether or not there is a claim for reinstatement. Note: The money claim must arise from law or contracts other then CBA. Money arising from an implementation of the CBA Voluntary Arbitrator or Panel of Voluntary Arbitrators have jurisdiction Money claims which does not arise from ER-EE relations Regular Courts have jurisdiction. Nature of Proceeding: Non-litigious. The Labor Arbiter is not bound by the technical rules of procedure. The Labor Arbiter shall use every and all reasonable means to ascertain the facts in each speedily and objectively. (Art. 221)

113

VIII. Procedure and Jurisdction


A. Labor Arbiter B. National Labor Relations Commission (NLRC) C. Bureau of Labor Relations (BLR) Med-Arbiters D. National Conciliation and Mediation Board E. DOLE Regional Directors F. DOLE Secretary G. Voluntary Arbitrators H. Court of Appeals I. Supreme Court J. Prescription of Actions

A. Labor Arbiter
a. Jurisdiction

Except as otherwise provided under the Code the Labor Arbiters shall original and exclusive jurisdiction to hear and decide: (1) Unfair labor practices cases; (2) Termination disputes;

LABOR LAW REVIEWER


Employer-employee relationship is a jurisdictional requisite, absent of which, the NLRC has no jurisdiction to hear and decide the case. (HawaiianPhilippine Company v. Gulmatico) Venue: Regional Arbitration Branch (RAB) having jurisdiction over the workplace of the complainant or petitioner. Workplace place or locality where the employee is regularly assigned at the time the cause of action arose. In the case of field employees, ambulant or itinerant workers, their workplace is (a) where they are regularly assigned or (b) where they are supposed to regularly receive their salaries and wages or work instructions from, and report the results of their assignment to their employers. Some Rules on Venue (1) Where 2 or more Regional Arbitration Branches have jurisdiction over the workplace of the complainant, that first which acquired jurisdiction over the case shall exclude others. (2) When venue is not objected to before the filing of position papers, such issue shall be deemed waived. (3) Venue of an action may be transferred to a different Regional Arbitration Branch upon written agreement of the parties or upon order of the LA in meritorious cases and on motion of the proper party. (4) Cases involving overseas Filipino workers may be filed before the RAB having jurisdiction over the place where the complainant resides or where the principal office of any of the respondents is situated. b. Effect of self-executing reinstatement on backwages order of NLRC divisions Original Jurisdiction: over petitions for injunction or temporary restraining order under Art. 218 (e). Exclusive Appellate Jurisdiction: over all cases decided by labor arbiters (Art 217[b]) and the DOLE regional directors under Art 129. Period of Appeal (2005 NLRC Rules of Procedure) From Labor Arbiter to NLRC: Decisions and resolutions of the Labor Arbiter shall be final and executory unless appealed to the Commission by any or both parties within (10) calendar days from receipt thereof From Regional Director to NLRC pursuant to Art. 129: Decisions and resolutions of the Regional Director shall be final and executory unless appealed within 5 days from receipt thereof. Note: If the 5th or 10th day falls on a Saturday, Sunday, or a holiday, the last day shall shall be the next working day. Grounds of Appeal (1) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter or Regional Director; (2) If the decision, resolution or order was secured through fraud or coercion, including graft and corruption; (3) If made purely on questions of law; and/or (4) If serious errors in the findings of fact are raised which, if not corrected, would cause grave or irreparable injury to the appellant b. Effect of NLRC reversal of Labor Arbiters order of reinstatement

114

An order for reinstatement entitles an employee to receive his accrued backwages from the moment the reinstatement order was issued up to the date when the same was reversed by a higher court without fear of refunding what he had received. (Garcia v. Philippine Airlines, Inc., G.R. No.164856, January 20, 2009) c. Requirements to perfect appeal to NLRC

1 0 4if the order of reinstatement of the Labor Even Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court.
On the other hand, if the employee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the employee is not required to reimburse whatever salary he received for he is entitled to such, more so if he actually rendered services during the period. (Garcia v. Philippine Airlines, Inc., 2009) c. Requirements to perfect appeal to Court of Appeals

(1) The appeal should be filed within the reglementary period; (2) The Memorandum of Appeal should be under oath; (3) The appeal fee should be paid; (4) There should be posting of cash or surety bond, if judgment involves monetary award; and (5) There should be proof of service to the adverse party.

B. National Labor Relations Commission (NLRC)


a. Jurisdiction

Requisites for Perfection of Appeal (1) The appeal shall be: Filed within the reglementary period; Verified by the appellant himself in accordance with Section 4, Rule 7 of the Rules of Court; In the form of a memorandum of appeal which shall state the grounds relied upon and the arguments in support thereof,

LABOR LAW REVIEWER


the relief prayed for, and with a statement of the date the appellant received the appealed decision, resolution or order; In three (3) legibly typewritten or printed copies; and Accompanied by (a) proof of payment of the required appeal fee; (b) posting of a cash or surety bond as provided in Section 6 of the 2005 NLRC Rules, (c) a certificate of non-forum shopping; and (d) proof of service upon the other parties. (2) A mere notice of appeal without complying with the other requisites aforestated shall not stop the running of the period for perfecting an appeal. (3) The appellee may file with the Regional Arbitration Branch or Regional Office where the appeal was filed, his answer or reply to appellants memorandum of appeal, not later than 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 answer or reply within the said period may be construed as a waiver on his part to file the same. (4) 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.

D. National Conciliation and Mediation Board (NCMB)


a. Conciliation vs. Mediation

115

Conciliation An ADR mode of intervention by a neutral third party, the Conciliator-Mediator, wherein the CM takes an active role in assisting parties by trying to keep disputants talking, facilitating other procedural niceties, carrying messages back and forth between the parties Mediation An ADR mode of intervention by a neutral third party, the Conciliator-Mediator, wherein the CM advises the parties or offers solutions or alternatives to the problems with the end in view of assisting them towards voluntarily reaching their own mutually acceptable settlement of the dispute. b. Preventive Mediation

Preventive mediation case refers to the potential or brewing labor dispute which is the subject of a formal or informal request for conciliation and mediation assistance sought by either or both parties in order to remedy, contain or prevent its degeneration into a full blown dispute through amicable settlement.

E. DOLE regional directors


1. Small money claims Art. 129. Recovery of wages, simple money claims and other benefits. 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, owing to an employee or person employed in domestic or household service or househelper under this Code, arising from employer-employee relations: Provided, That such complaint does not include a claim for reinstatement: Provided, further, That the aggregate money claims of each employee or househelper do not exceed five thousand pesos (P5,000). The Regional Director or hearing officer shall decide or resolve the complaint within thirty (30) calendar days from the date of the filing of the same. Any sum thus recovered on behalf of any employee or househelper pursuant to this

C. Bureau of Labor Relations (BLR) Med Arbiters


a. Jurisdiction (Original and Appellate) Art. 226: The Bureau of Labor Relations and the Labor Relations Divisions in the regional offices of the Department of Labor and Employment shall have original and exclusive authority to act, at their own initiative or upon request of either or both parties, on all inter-union and intra-union conflicts, and all disputes, grievances or problems arising from or affecting labor-management relations in all workplaces whether agricultural or non-agricultural, except those arising from the implementation or interpretation of collective bargaining agreements which shall be the subject of grievance procedure and/or voluntary arbitration. The Bureau shall have fifteen (15) calendar days to act on labor cases before it, subject to extension by agreement of the parties. Appellate Jurisdiction BLR has the power to review the decision of the Regional Director Decisions rendered through its appellate power are final and executory. Hence, the remedy of the aggrieved party is to seasonably avail of the special civil action of certiorari under Rule 65 of the Rules of Court.

LABOR LAW REVIEWER


Article shall be held in a special deposit account by, and shall be paid, on order of the Secretary of Labor and Employment or the Regional Director directly to the employee or househelper concerned. Any such sum not paid to the employee or househelper, because he cannot be located after diligent and reasonable effort to locate him within a period of three (3) years, shall be held as a special fund of the Department of Labor and Employment to be used exclusively for the amelioration and benefit of workers. Article 274. Visitorial power. The Secretary of Labor and Employment or his duly authorized representative is hereby empowered to inquire into the financial activities of legitimate labor organizations upon the filing of a complaint under oath and duly supported by the written consent of at least twenty percent (20%) of the total membership of the labor organization concerned and to examine their books of accounts and other records to determine compliance or non-compliance with the law and to prosecute any violations of the law and the union constitution and by-laws: Provided, That such inquiry or examination shall not be conducted during the sixty (60)-day freedom period nor within the thirty (30) days immediately preceding the date of election of union officials. (As amended by Section 31, Republic Act No. 6715, March 21, 1989) 1. Power to suspend effects of termination Article 277 (b): 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 labor dispute or is in the implementation of a mass lay-off.

116

xxx The Secretary of Labor and Employment or his duly authorized representative may supervise the payment of unpaid wages and other monetary claims and benefits, including legal interest, found owing to any employee or househelper under this Code.

F. DOLE secretary
1. Visitorial and enforcement powers Article 128. Visitorial and enforcement power. The Secretary of Labor and Employment or his duly authorized representatives, including labor regulation officers, shall have access to employers records and premises at any time of the day or night whenever work is being undertaken therein, and 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 this Code and of any labor law, wage order or rules and regulations issued pursuant thereto. Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection. (As amended by Republic Act No. 7730, June 2, 1994). 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.

G. Voluntary Arbitrators
1. Submission Agreement Written agreement jointly submitted by parties to the voluntary arbitrator which contains: The parties statement/agreement to submit to arbitration, The issues to be resolved, The agreement to abide by the decision or award, the conduct of proceedings, payment of arbitrator's fees, etc. 2. Rule 43, Rules of Court 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 Court of Appeals. RULE 43, Appeals From the Court of Tax Appeals and Quasi-Judicial Agencies to the Court of Appeals Section 1. Scope. This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil Service Commission, Central Board of Assessment Appeals, Securities and Exchange Commission, Office of the President, Land Registration Authority, Social Security Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer, National Electrification Administration,

LABOR LAW REVIEWER


Energy Regulatory Board, National Telecommunications Commission, Department of Agrarian Reform under Republic Act No. 6657, Government Service Insurance System, Employees Compensation Commission, Agricultural Invention Board, Insurance Commission, Philippine Atomic Energy Commission, Board of Investments, Construction Industry Arbitration Commission, and voluntary arbitrators authorized by law. (n) said claim is filed with the System within three (3) years from the time the cause of action accrued. (As amended by Section 5, Presidential Decree No. 1921) 1. Money claims Art. 291. Money claims. All money claims arising from employer-employee relations accruing during the effectivity of 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. The Labor Code has no specific provision on when a monetary claim accrues. Thus, again the general law on prescription applies. Article 1150 of the Civil Code provides that Article 1150. The time for prescription for all kinds of actions, when there is no special provision which ordains otherwise, shall be counted from the day they may be brought. The day the action may be brought is the day a claim started as a legal possibility. In the present case, the day came when petitioner learned of Asiakonstrukts deduction from his salary of the amount of advances he had received but had, by his claim, been settled, the same having been reflected in his payslips, hence, it is assumed that he learned of it at the time he received his monthly paychecks. (Anabe v Asian Const, et al., 2009) 2. Illegal dismissal

117

H. Court of Appeals
1. Rule 65, Rules of Court

I. Supreme Court
Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed appeals from the NLRC to the Supreme Court are interpreted and hereby declared to mean and refer to petitions for certiorari under Rule 65. Consequently, all such petitions should hence forth be initially filed in the Court of Appeals in strict observance of the doctrine on the hierarchy of courts as the appropriate forum for the relief desired. (St. Martin Funeral Home vs. NLRC, 1998) 1. Rule 45, Rules of Court

RULE 45, Appeal by Certiorari to the Supreme Court Section 1. Filing of petition with Supreme Court. A party desiring to appeal by certiorari from a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition shall raise only questions of law which must be distinctly set forth. (1a, 2a) 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, 2001) Since the Court of Appeals had jurisdiction over the petition under Rule 65, any alleged errors committed by it in the exercise of its jurisdiction would be errors of judgment which are reviewable by timely appeal and not by a special civil action of certiorari. If the aggrieved party fails to do so within the reglementary period, and the decision accordingly becomes final and executory, he cannot avail himself of the writ of certiorari, his predicament being the effect of his deliberate inaction. (Tirazona v Phil EDS Techno-Service Inc, 2009)

In illegal dismissal cases, the employee concerned is given a period of four years from the time of his dismissal within which to institute a complaint. This is based on Article 1146 of the New Civil Code which states that actions based upon an injury to the rights of the plaintiff must be brought within four years. (Victory Liner, Inc. v Race, 2007) Article 1146. The following actions must be instituted within four years: (1) Upon an injury to the rights of the plaintiff;

J. Prescription of Actions
Article 201. Prescriptive period. No claim for compensation shall be given due course unless

LABOR LAW REVIEWER


(2) Upon a quasi-delict; However, when the action arises from or out of any act, activity, or conduct of any public officer involving the exercise of powers or authority arising from Martial Law including the arrest, detention and/or trial of the plaintiff, the same must be brought within one (1) year. (As amended by PD No. 1755, Dec. 24, 1980.) 3. Unfair labor practice Art. 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. Article 247. Concept of unfair labor practice and procedure for prosecution thereof. (last par.) No criminal prosecution under this Title may be instituted without a final judgment finding that an unfair labor practice was committed, having been first obtained in the preceding paragraph. During the pendency of such administrative proceeding, the running of the period of prescription of the criminal offense herein penalized shall be considered interrupted: Provided, however, that the final judgment in the administrative proceedings shall not be binding in the criminal case nor be considered as evidence of guilt but merely as proof of compliance of the requirements therein set forth. (As amended by Batas Pambansa Bilang 70, May 1, 1980 and later further amended by Section 19, Republic Act No. 6715, March 21, 1989) 4. Offenses penalized by the Labor Code and IRR issued pursuant thereto Art. 290. Offenses. Offenses penalized under this Code and the rules and regulations issued pursuant thereto shall prescribe in three (3) years. 5. s Prescriptive period of illegal recruitment case

118

Section 7. Prescription. Illegal recruitment cases under this Rule shall prescribe in five (5) years; Provided, however, that illegal recruitment cases involving economic sabotage shall prescribed in twenty (20) years. (RA 8042)

LABOR LAW REVIEWER

ANNEX A
CAUSE Serious Misconduct TERMINABLE EXAMPLES Teacher pressuring colleague to change a failing grade to a passing one plus misrepresentation. (Padilla vs. NLRC, 1997) Obscene, insulting or offensive words against superior. (Asian Design and Manufacturing vs. Hon. Deputy Minister of Labor, 1986) Sleeping in post, gross insubordination, dereliction of duty, challenging a superior to a fight. (Luzon Stevedoring vs. CIR, 1965) Immorality / Immoral Conduct: conduct which is so willful, flagrant or shameless as to show indifference to the opinion of good and respectable members of the community; such conduct must be grossly immoral so corrupt as to constitute a crime or so unprincipled as to be reprehensible to a high degree or committed under such scandalous or revolting circumstances as to shock the common decency. (Narag vs. Narag, 1998); to be a valid cause for dismissal, the immoral act must render incapable performance of duties/services or calculated at injuring employers business. When a teacher engages in extramarital relationship, especially when the parties are both married. (Santos v. NLRC, 1998) Willful Disobedience Violation of Company Rules: Company policies and regulations, unless shown to be grossly oppressive or contrary to law, are generally valid and binding on the parties and must be complied with until finally revised or amended, unilaterally or preferably through negotiation, by competent authority. (Aparente, Sr. v. NLRC, 2000) Disobeying a Valid Order to Transfer - test of validity: Not unreasonable Not inconvenient Not prejudicial No demotion in rank No diminution in salary, privileges or benefits (Blue Dairy vs. NLRC, 1999) - Mere inconvenience does not necessarily invalidate a transfer order; unreasonable inconvenience makes the order invalid. (Homeowners Savings and Loan Assoc. vs. NLRC, 1996) - Reasonableness pertains to the character of orders and to the manner NON-TERMINABLE EXAMPLES Borrowing Money: as a general rule, it is neither dishonest, nor immoral, nor illegal, much less criminal (Medical Doctors, Inc. [Makati Medical Center] v. NLRC) except it becomes a serious misconduct when reprehensible behavior such as the use of a trust relationship as a leverage for borrowing money is involved. (Pearl S. Buck Foundation, Inc. v. NLRC, 1990) Love: teacher falling in love with student without a showing that the former took advantage of her position to court her student. Yielding to this gentle and universal emotion is not to be so casually equated with immorality. The deviation of the circumstances of their marriage from the usual societal pattern cannot be considered as a defiance of contemporary social mores (Chua-Qua v. Clave, 1990)

119

50
Assertion of employees right not to be made to work outside of what he had been hired to do. (Tierra International Production Corp. v. NLRC, 1996) Refusing a promotion, since promotion is in the nature of a gift or reward. (PT&TC vs. CA, 2003) Disobeying an Invalid Order to Transfer: an invalid transfer amounts to constructive dismissal; it is invalid when it fails test of validity. (refer to the adjacent column for the test)

LABOR LAW REVIEWER


CAUSE TERMINABLE EXAMPLES in which they are made. (Escobin vs. NLRC, 1998) Habitual tardiness and absenteeism (Manila Electric Co. v. NLRC, 1996) Abandonment the deliberate and unjustified refusal of an Employee to resume his employment. (Nueva Ecija Electric Cooperative v. NLRC, 2005) Requisites: failure to report to work or absence w/o valid reason Clear intent to sever EmployeeER relationship via overt acts. (Labor v NLRC, 1995; Floren Hotel v. NLRC, 2005; Leonardo v. NLRC, 2000) o CANNOT be lightly inferred, much less legally presumed from certain equivocal acts such as interim employment. (Hacienda Dapdap v. NLRC, 1998) Bank Employee delivered newly approved credit cards to a total stranger without verification protocol. NON-TERMINABLE EXAMPLES

Gross and Habitual Neglect

Simple negligence (RDS Trucking v. NLRC, 1998) or unsatisfactory performance (Oreta vs. NLRC, 1989) Mere involvement in an accident, absent any showing of fault or recklessness on the part of the Employee, is NOT a valid ground for dismissal. (Paguio Transport Corp. v. NLRC, 1998) Filing a complaint of illegal dismissal is inconsistent with abandonment; Except when Employee prays for separation pay instead of reinstatement (Jo vs. NLRC, 2000) No Abandonment: - Mere absence from work (Mendoza v. NLRC, 1999) - Going home to have dinner; employees do not need to take their meals within the company premises. (PAL v. NLRC, 1999) - Leaving his workplace to relieve himself (Dimabayo v. NLRC, 1999) Employee is not in a position of trust and confidence.

120

Fraud or Willful Breach of Trust

Commission of a crime or offense against Employer

Analogous Causes

Dishonesty: Custodian of petty cash fund reimbursed another employee for services the latter did not render. (Naguit v. NLRC, 2003) Falsification of time cards. (San Miguel vs. NLRC, 1989) Theft of company property. (Firestone Tire and Rubber Co. vs. Lariosa, 1987) Theft; the employee here was convicted after she won her case for illegal dismissal. In view of the employees conviction, the decision of the NLRC which had already become final and executory calling for her reinstatement and the payment of back wages should not now be enforced. Otherwise, she would in effect be undeservedly rewarded when she should instead be punished for her offense. (Sampaguita Garments Corp. v. NLRC, 1994) Quarrelsome Bossy: an Employee's attitude problem is a valid ground for dismissal, equivalent to loss of trust and confidence; an Employee who cannot get along with his fellow co-EEs is detrimental to the company for he can upset and restrain the working environment. (Heavylift Manila, Inc. v. CA) Conviction Moral Turpitude: Violation of a company rule prohibiting the infliction of harm or physical injury against any person under the particular circumstances provided for in the same rule may be deemed analogous to serious

51

Probable Cause: Although after preliminary investigation probable cause has been found and the accused has been detained, this is NOT legal basis for immediate termination of employment. (Standard Electric Manufacturing Corp. v. Standard Electric Union, 2005) Conviction Moral Turpitude: Conviction of a crime involving moral turpitude is not one of these justifiable causes. Not under fraud/willful breach since the crime was unrelated

LABOR LAW REVIEWER


CAUSE TERMINABLE EXAMPLES misconduct. (Oania v. NLRC, 1995) Gross inefficiency is closely related to gross neglect for both involve specific acts or omission on the part of the employee resulting in damage to the employer or to his business. (Lim v. NLRC, 1996) Past Offenses: Previous offenses may be so used as valid justification for dismissal from work only if the infractions are related to the subsequent offense upon which basis the termination of employment is decreed. (Stellar Industrial Service, Inc. v. NLRC, 1996; La Carlota Planters Assn. v. NLRC, 1998) Professional Training / Residency Training: a residency or resident physician position in a medical specialty is never a permanent one. Residency connotes training and temporary status. It is the step taken by a physician right after post-graduate internship (and after hurdling the Medical Licensure Examinations) prior to his recognition as a specialist or sub-specialist in a given field. right to security of tenure only to the extent that they periodically make the grade.(Felix v. Buenaseda, 1995) NON-TERMINABLE EXAMPLES to the performance of the employee's function. Not under commission of crime since it was not directed at Employer or his family or representative. Analogous causes must have an element similar to those found in the specific just cause enumerated under Article 282. Clearly lacking in the ground invoked by petitioner is its relation to his work or to his employer. (IRRI v. NLRC, 1993) In IRRI v. NLRC (1993), homicide outside IRRI (employer) complex after office hours and against a nonIRRI employee. Courtesy Resignation Resignation must be voluntary. Adding the word "courtesy" did not change the essence of resignation. That courtesy resignations were utilized in government reorganization did not give private respondent the right to use it as well in its own reorganization and rehabilitation plan. (Batongbacal vs. Associated Bank, 1988)

121

CRIMINAL LAW REVIEWER ANNEX B: COMPARISON BETWEEN SSS AND GSIS


Enabling law SSS RA 1161 as amended by RA 8282: Social Security Act of 1997 Employer any person, natural or juridical, domestic or foreign, who carries on in the Philippines any trade business, industry, undertaking, and uses the services of another person who is under his orders as regards the employment, except those considered as employer under the GSIS. A self-employed person shall be both employer and employee at the same time. Employee any person who performs services for an employer in which either or both mental and physical efforts are used and who receives compensation for such services, where there is an employeremployee relationship; also, a selfemployed person who is both employee and employer at the same time Self-employed any person whose income is not derived from employment, including, but not limited to: self-employed professionals; partners and single proprietors of businesses; actors, directors, scriptwriters, news correspondents not considered as employees under the above definition; athletes, coaches, trainers, jockeys; and individual farmers and fishers. Dependents: Legal spouse entitled by law to receive support; Child unmarried, not gainfully employed, and below 21 or Child over 21 if he or she became permanently incapacitated and incapable of self-support, physically or mentally,; child may be legitimate, legitimated, legally adopted, or illegitimate; Parent who is receiving regular support. Beneficiaries Primary Dependent spouse until remarriage (see above); Dependent children (see above); illegitimate children are entitled only to 50% of the share of legitimate children unless there are no legitimate children, in which case, they get 100%. Secondary shall only receive when the primary beneficiaries are absent: Dependent parents Other any other person designated by the member as his/her secondary beneficiary. Compensation all actual remuneration for employment, including living allowance, as well as the cash value of any remuneration paid in any medium other than cash except that portion already above the max salary credit under Sec. 18 of the Act. GSIS RA 8291 amending PD 1146

12 2

Employer National government, its political subdivisions, branches, agencies or instrumentalities, including government-owned or controlled corporations and financial institutions with original charters (GOCCs); constitutional commissions; and judiciary Employee any person receiving compensation while in service of an employer whether by election or appointment, irrespective of status of appointment; baranggay officials; and sangguniang officials Note: No counterpart for self-employed.

Definition Terms

of

Same except that a child here is below 18

Same except that RA 8291 does not distinguish share of legitimate and illegitimate children

Compensation basic pay received excluding per diems, bonuses, overtime, honoraria, allowances and other emoluments not integrated into the basic pay under existing laws.

CRIMINAL LAW REVIEWER


Compulsory Employers as defined above; Employees not over 60 years including household helpers with at least P1,000 monthly pay; and Self-employed. Voluntary Spouses who devote full time to managing household and family affairs; OFWs recruited by foreign-based employers; Employees already separated from employment or those self-employed with no realized income for a given month, who chose to continue with contributions to maintain right to full benefit. Note: Foreign governments, international organizations or their wholly owned instrumentality employing workers in the Philippines may enter into an agreement with the Philippine government to include their employees in the SSS except those already covered by their civil service retirement system. Employer: 1st day of operation Employee: 1st day at work Self-employed: upon registration with SSS a) Monthly pension b) Dependents pension c) Retirement benefits d) Permanent disability benefits e) Death benefits f) Funeral benefits g) Loan Social Security Commission Resolution No. 669. Moreover, several SSS-issued circulars such as Circular No. 21-P and No. 52 pertain to the treatment of salary loans, sometimes providing for more flexible payment terms or condonation for delinquent payers; Santiago v. CA and SSS, GR # L-39949 (1984) resolved an issue involving the treatment of salary loan repayments; SSS website also shows loans h) Sickness benefits i) Maternity leave benefits (1) Employers contribution, and (2) Employees obligation to pay contribution both cease at the end of the month of separation; (3) EE shall be credited with all contributions paid on his behalf and entitled to all benefits set forth by the law. Social Security Commission CA (Rule 43; questions of law and fact) SC (Rule 45; questions of law only) 20 years

Public sector employees below the compulsory retirement age of 65. Exceptions: a. AFP and PNP; b. Members of the Judiciary and Constitutional Commissions who are covered only by life insurance as they have separate retirement schemes; c. Contractual employees with no employee-employer relationship with the agency they serve.

12 3

Coverage

Effective Date of Coverage

Summary Benefits

of

a) b) c) d) e) f) g) h) i) j) k)

Monthly pension Retirement benefits Permanent disability benefits Death Benefits Funeral benefits Loan GSIS website provides for this Temporary disability benefits (similar to sickness) Separation benefits Unemployment benefits Sec 11 Survivorship benefits Life insurance benefits

Note: Judiciary and Constitutional Commissions are entitled to life insurance only. Continued membership for the unemployed member; and entitlement to whatever benefits he has qualified to in the event of any compensable contingency. GSIS CA (Rule 43) SC (Rule 45); appeal does not stay execution. 4 years

Effects of separation from employment Dispute Settlement Prescriptive Period