Arts.
226-286, Labor Code (Labor Relations) 1
LABOR CODE OF THE PHILIPPINES
BOOK FIVE
LABOR RELATIONS
TITLE III
BUREAU OF LABOR RELATIONS
Art. 226. Bureau of Labor Relation -- The Bureau
of LaborRelations and the Labor Relations Divisions in
the regional offices of the Department of Labor, 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) working days to act
on laborcases before it, subject to extension by
agreement of the parties.
COMMENT:
- EO No. 126: Transferred the conciliation,
mediation, and voluntary arbitration functions of
the BLR to the National Conciliation and Mediation
Board (NCMB).
- Principal task of BLR is now limited to handling
inter-union and intra-union conflicts, registration
and cancellation of registration of labor
organizations, particularly those involving
federations, national unions or industry unions.
Intra-Union Disputes:
- A controversy between and among union
members.
- Includes grievances from:
o Any violation of the rights and conditions
of union membership;
o Violation or disagreement over any
provision of the unions constitution and
by-laws; or
o Disputes arising from chartering or
affiliation of union.
Case: Ilaw at Buklod Ng Manggagawa vs. NLRC (219
SCRA 536)
FACTS: On December 3, 1986, IBM, the sole and
exclusive bargaining representative of all daily-paid workers
of the Metro Manila plants of San Miguel Corporation,
entered into a collective bargaining agreement with San
Miguel Corporation. Said collective bargaining agreement
was ratified by the general membership. Thereafter, IBM
assessed each member the amount of P1,098.00 to be
deducted from the lump sum of P10,980.00 of which each
employee was to receive under the CBA. Several
employees protested and refused to sign the authorization
slip for the deduction. As a result, the said employees were
expelled from the union. The affected employees then filed
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Atty. Paulino Ungos
a complaint with the Arbitration Branch of the NLRC for
illegal and exorbitant deduction and illegal expulsion.
ISSUE: Does the Arbitration Branch of the NLRC have
jurisdiction?
HELD: NO. The NLRC has no jurisdiction because the
subject matter of the suit is an INTRA-UNION DISPUTE.
This is an intra-union dispute a dispute between the labor
union and its members. Art. 226 of the Labor Code vests
on the BLR the jurisdiction to act on all inter-union or intra-
union disputes.
Inter-Union Disputes:
- A controversy between and among legitimate
labor unions.
Effect of Pendency of Inter-Union or Intra-Union
Disputes
- On the rights and obligations of the PARTIES:
o The rights, relationships and obligations
of the parties-litigants against each other
and other parties-in-interest prior to the
filing of the petition continue to remain
until the finality of the decision.
- On a Petition for Certification Election:
o The pendency of an inter-union or intra-
union dispute or other related labor
relations dispute is not a prejudicial
question to a petition for certification
election.
o Thus, pendency is not a ground for
suspension or dismissal of the petition for
certification election.
Related Labor Relations Disputes:
- Any conflict between a labor union and the
employer or any individual, entity or group that is
not a labor organization or workers association is
a related labor relations disputes.
o Example: Cancellation of union
registration and interpleader.
The National Conciliation and Mediation Board:
- Composed of an Administrator and two (2) Deputy
Administrators and as many Conciliators-
Mediators as the needs of the public service
requires.
- It exercises the following functions:
o Formulate policies, programs, standards,
procedures, manuals of operation, and
guidelines pertaining to effective
mediation and conciliation of labor
disputes;
o Perform preventive mediation and
conciliation functions;
o Coordinate and maintain linkages with
other sectors or institutions and other
government authorities concerned with
matters relative to the prevention and
settlement of labor disputes;
o Formulate policies, plans, programs,
standards, procedures, manuals of

operation and guidelines pertaining to the
promotion of cooperative and non-
adversarial schemes, grievance handling,
voluntary arbitration and other voluntary
modes of dispute settlement;
o Administer the voluntary arbitration
program; maintain/update a list of
voluntary arbitrators; compile arbitration
awards and decisions;
o Provide counselling and preventive
mediation assistance particularly in the
administration of collective agreements;
o Monitor and exercise technical
supervision over the Board programs
being implemented in the regional
offices; and
o Perform such other functions as may be
provided by law or assigned by the
Secretary of Labor and Employment.
Art. 227. Compromise Agreements -- Any compromise
settlement, including those involving labor standard
laws, voluntarily agreed upon by the parties with the
assistance of the Bureau or theregional office of the
Department of Labor, shall be final and binding upon
the parties. The National LaborRelations Commission
or any court, shall not assume jurisdiction over issues
involved therein except in case of non-compliance
thereof or if there is prima facie evidence that the
settlement was obtained through fraud,
misrepresentation, or coercion.
COMMENT:
Compromise Agreement:
- Compromise: A contract whereby the parties by its decision, it unknowingly adjudicated a case which, for all
making reciprocal concessions, avoid a litigation
or put an end to one already commenced.
o The nature of compromise is such
that a party must give up some of
the rights that he has in
consideration of the same act on the
part of the other side.
- Labor Code recognizes compromise settlement as
a mode of settling labor or industrial disputes.
- Parties can validly enter into a compromise not
only on controversies involving labor standards,
but also on other labor disputes.
Conclusiveness of Compromise:
- A compromise is conclusive and binding even if it
is not judicially approved.
- NLRC or any court shall not assume jurisdiction
over issues that have been subject of a
compromise settlement, except in case of non-
compliance thereof or if there is prima facie
evidence that the settlement was obtained through
fraud, misrepresentation, or coercion.
- A compromise cannot later be disowned or set
aside merely because a party has changed his
mind.
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 2
Atty. Paulino Ungos
o However, if the consideration for the
compromise was very much less
than the amount which the employee
was entitled, it may be set aside for
being contrary to law, morals or
public policy.
Case: Olaybar vs. NLRC (237 SCRA 819)
FACTS: Ten (10) employees were terminated by X
Corporation on the ground of retrenchment. Contesting the
legality of their retrenchment, the 10 employees lodged a
complaint for illegal dismissal with the Regional Arbitration
Branch of the NLRC. The Labor Arbiter dismissed the
complaint but ordered X Corporation to pay the 10
employees their respective separation pay. Unsatisfied, the
employees appealed to the NLRC. Pending appeal, the
employees executed separate affidavits stating, among
others, their intention to withdraw their appeal since they
had already received the separation pay decreed in the
decision of the Labor Arbiter. These affidavits were not,
however, submitted to the NLRC. For some inexplicable
reason, neither the 10 employees nor X Corporation
brought to the attention of the NLRC the crucial fact that
they had already amicably settled their dispute. Unaware of
the settlement, the NLRC rendered a decision in favour of
the 10 employees by ordering their reinstatement with back
wages. The employees then moved for the execution of the
NLRC decision which X Corporation opposed on the
ground that the decision has been rendered moot and
academic by the amicable settlement of the case.
ISSUE: Whether or not the NLRC acted correctly in
denying the motion for execution?
HELD: YES. It is true that the NLRC reversed the Labor
Arbiters decision on appeal, but when the NLRC rendered
intents and purposes, had already been closed and
terminated by the parties themselves when they agreed on
a settlement. This is the clear import of the rule that
compromises and settlements have the effect and
conclusiveness of res judicata upon the parties.
Compromise Through Lawyer or Representative:
- A compromise entered into through a lawyer or
representative is conclusive or binding only:
o When the client has expressed his
consent to compromise; or
o When the lawyer or representative is
equipped with a special power of
attorney.
- Without such express consent or special power of
attorney, any compromise entered into by a lawyer
or representative will not bind the party concerned,
unless the latter signs or avails of the benefits
under the compromise agreement.
Case: Jag &Haggar Jeans and Sportswear Corp. vs. NLRC
(241 SCRA 635)
FACTS: A decision was rendered by the NLRC ordering
the reinstatement of 114 employees. The Company filed a
motion of reconsideration. During the pendency of the
motion for reconsideration, the Company and the Union

entered into a compromise agreement whereby the
Company and the Union agreed that the affected
employees will just be paid separation pay. Of the 114
affected employees, 102 availed of the benefits provided
for under the Compromise Agreement. The 12 remaining
employees then moved for the execution of the NLRC
decision. The Company opposed the motion contending
that the Compromise Agreement was deemed ratified by
the union members.
ISSUE: Whether or not the Compromise Agreement
entered into by the company and the Union is binding upon
the employees?
HELD: NO. The Compromise Agreement is not binding
upon the 12 employees who neither signed the
compromise agreement nor availed of its benefits.
Inasmuch as what was being waived under the
Compromise Agreement was the right of the affected
employees to reinstatement, such waiver must be
exercised personally by the employees concerned.
Compromise on a Final Judgment:
- The law does not limit compromises to cases
about to be filed or cases already pending on
court.
- Valid for the parties to enter into a compromise
despite the fact that a final judgment has already
been rendered.
Remedy if the Compromise is Violated:
- The aggrieved party can avail of the following
remedies:
o In case of violation of a Compromise
Agreement, the aggrieved party can:
(a) File the necessary action action or
motion to enforce the compromise;
or
(b) Regard the compromise as
rescinded and insist upon his original
demand.
- In case of violation of a Compromise Judgment:
(a) File a motion for execution, in case
of non-compliance;
(b) File an action to annul the
compromise judgment on the ground
of mistake, fraud, violence,
intimidation, undue influence, or
falsity in the execution of the
compromise embodied in the
judgmentl or
(c) File a petition for relief from
judgment under Rule 38 of the Rules
of Court on the ground that the
judgment was obtained through
fraud, mistake or excusable
negligence.
Reduction of Attorneys Fees Not a Bar to Approval
of Compromise:
- Lawyers rights may not be invoked as a ground submit copies of the same directly to the Bureau or the
for disapproving a compromise.
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 3
Atty. Paulino Ungos
- Lawyer affected can always enforce his right in a
proper proceeding but said right may not be used
to prevent the approval of the compromise.
Quitclaim:
- A quitclaim executed in favour of a company by an
employee amounts to a valid and binding
compromise agreement.
- The current doctrinal policy of the Supreme Court
is that not all waivers and quitclaims are invalid as
against public policy.
- Once an employee executes a quitclaim in favour
of the employer, he is thereby estopped from filing
any further claim against his employer arising from
his employment.
Art. 228. (Repealed by B.P. 130)
Art. 229. Issuance of subpoenas. - The Bureau shall have
the power to require the appearance of any person or the
production of any paper, document or matter relevant to
a labordispute under its jurisdiction, either at the request of
any interested party or at its own initiative.
COMMENT:
Power of the Bureau of Labor Relations to Issue
Subpoena:
- Extends only to matters relevant to the labor
dispute under its jurisdiction.
Art. 230. Appointment of Bureau Personnel. - The
Secretary of Labor and Employment may appoint, in
addition to the present personnel of the Bureau and the
Industrial Relations Divisions, such number of
examiners and other assistants as may be necessary
to carry out the purpose of the Code.
COMMENT:
Authority to Appoint Personnel:
- Authority to the Secretary of Labor and
Employment to appoint personnel as may be
needed by the Bureau of Labor Relations in
carrying out the purposes of the Labor Code.
Art. 231. Registry of Unions and File of Collective
Bargaining Agreements -The Bureau shall keep a
registry of legitimatelabor organizations. The Bureau
shall also maintain a file of all collective bargaining
agreements and other related agreements and records
of settlement of labor disputes and copies of orders
and decisions of voluntary arbitrators. The file shall be
open and accessible to interested parties under
conditions prescribed by the Secretary of Labor and
Employment, provided that no specific information
submitted in confidence shall be disclosed unless
authorized by the Secretary, or when it is at issue in
any judicial litigation, or when public interest or
national security so requires.
Within thirty (30) days from the execution of a
Collective Bargaining Agreement, the parties shall
Regional Offices of the Department of Labor and
Employment for registration, accompanied with

verified proofs of its posting in two conspicuous
places in the place of work and ratification by the
majority of all the workers in the bargaining unit. The
Bureau or Regional Offices shall act upon the
application for registration of such Collective
Bargaining Agreement within five (5) calendar days
from receipt thereof. The Regional Offices shall furnish
the Bureau with a copy of the Collective Bargaining
Agreement within five (5) days from its submission.
The Bureau or Regional Office shall assess the
employer for every Collective Bargaining Agreement a
registration fee of not less than one thousand pesos
(P1,000.00) or in any other amount as may be deemed
appropriate and necessary by the Secretary
of Labor and Employment for the effective and efficient
administration of the Voluntary Arbitration Program.
Any amount collected under this provision shall accrue
to the Special Voluntary Arbitration Fund.
The Bureau shall also maintain a file and shall
undertake or assist in the publication of all final
decisions, orders and awards of the Secretary
of Labor and Employment, Regional Directors and the
Commission.
COMMENT:
Registration of Collective Bargaining Agreements:
- Purpose of Registration:
o To put notice on the existence of such
agreement in order to promote its stable
and undisturbed administration.
- Legal effect of Registration:
o Registration of a collective bargaining
agreement is not essential to its validity.
o Even if not registered, CBA is still valid
and binding between the parties,
regardless of whether or not the same
has been certified by the BLR. (Liberty
Flour Mills Employees vs. Liberty Flour
Mills)
- Registration Procedure:
o An application for registration should be
filed with the Regional Office of the
DOLE which issued the unions certificate
of registration or certificate of creation of
chartered local.
o If the certification of creation of the
chartered local was issued by the BLR,
application shall be field with the
Regional Office of the DOLE which has
jurisdiction over the place where it
principally operates.
o Application for registration of multi-
employer collective bargaining
agreements shall be filed with the BLR.
- Period within which to Register:
o Within thirty (30) days from execution.
- Supporting Documents:
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 4
Atty. Paulino Ungos
o Application shall be accompanied by two
(2) copies of the following documents:
(a) Collective bargaining agreement;
(b) Statement that the collective
bargaining agreement was posted in
at least two (2) conspicuous places
in the establishment for at least five
(5) days before its ratification; and
(c) Statement that the collective
bargaining agreement was ratified by
the majority of the employees in the
bargaining unit.
- Posting of CBA
o The collective bargaining agreement
must be posted within five (5) days prior
to its ratification, in at least two (2)
conspicuous places in the establishment.
o This is a mandatory requirement.
o Purpose: To inform employees in the
bargaining unit of the contents of the
agreement so that they could intelligently
decide on whether to accept the same or
not.(Associated Labor Union vs.
FerrerCalleja)
o If the collective bargaining agreement
was not posted in accordance with the
rules, the application for registration shall
be disapproved.
Remedy from denial of CBA registration:
- Re-Filing:
o If the application for registration was
denied for failure to complete the
registration requirements within the ten-
day period from notice, the remedy is to
re-file the application with complete
supporting documents.
- Appeal:
o If the application for registration is denied
on other grounds, the remedy is to
appeal the order of denial within ten (10)
days from receipt to:
(a) Bureau of Labor Relations if
the order of denial was issued
by the Regional Office of the
DOLE; or
(b) Office of the Secretary of
Labor and Employment if the
order of denial was issued by
the BLR.
Art. 232. Prohibition on Certification Election - 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 except
under Articles 253, 253-A and 256 of this Code.
COMMENT:
The Contract-Bar Principle

- The existence of a duly registered CBA will bar the
holding of a certification election.
- Purpose: To promote stability and fairness in
collective bargaining agreements.
- If there is a duly registered CBA, a petition for
certification election can only be entertained within
the 60-day period prior to the expiration of the 5-
year term of the CBA.
- A petition for certification election field outside of
the 60-day period prior to the expiration of the
term of a duly registered CBA will have to be
dismissed because it will disturb the administration
of duly registered existing CBAs.
Exceptions to the Contract-Bar Principle:
- There are certain type of collective bargaining
agreements which do not fall within the operation
of the contract-bar principle, namely:
(a) Those entered into with a labor organization
which has not been certified as the sole and
exclusive collective bargaining representative
but merely accorded voluntary recognition by
the management despite the existence of
another labor organization seeking
recognition.
(b) Those which are not duly registered with the
Bureau of Labor Relations or the appropriate
regional office of the DOLE.
(c) Those which are incomplete, specifically
those which do not provide for economic
benefits to employees.
(d) Those hastily entered into prior to or during
the sixty-day freedom period.
(e) Those which can no longer foster industrial
peace and stability because of the schism in
the union.
Illustrative Cases:
Associated Labor Union vs. Ferrer-Calleja (173 SCRA 178)
FACTS: On May 7, 1986, ALU demanded that it be
recognized as the sole and exclusive bargaining
representative of the employees of GAW Trading. On May
9, 1986, another union (SPFL), who was also demanding
recognition, staged a strike against GAW Trading. On May
12, 2986, GAW Trading voluntarily recognized ALU as the
sole and exclusive bargaining representative of the
employees. ALU and Gaw Trading signed and executed a
CBA, but the registration was done without the CBA being
posted in at least two (2) conspicuous places in the
establishment five days before its ratification. ALU justified
the omission by saying it could not post the CBA because
of the strike staged by SPFL. On May 28. 1986, SPFL filed
a petition for certification election. ALU sought the dismissal
of the petition by invoking the contract-bar principle.
ISSUE: Will the CBA between ALU and GAW Trading bar
the holding of a certification election?
HELD: NO. The CBA will not bar the holding of a
certification election because it was entered into with the
labor union that was merely accorded voluntary recognition
by the GAW Trading despite the presence of another union
that was also seeking recognition. ALUs standing as an
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 5
Atty. Paulino Ungos
exclusive bargaining representative is dubious. Hence, a
certification election could be properly ordered. Additionally,
the posting requirement was not complied with. Hence, the
CBA is defective. Even if it was registered with the DOLE, it
cannot be considered as duly registered.
Buklod Ng Saulog Transit vs. Cassalla (99 Phil. 16)
FACTS: On December 7, 1953, a petition for certification
election among the employees of Saulog Transit was filed.
Said petition was opposed by the BuklodngSaulog Transit
on the ground that it had already entered into a collective
bargaining agreement with Saulog Transit on July 15, 1953.
One month after the filing of the petition for certification
election, the Buklod Ng Saulog Transit and Saulog Transit
executed a Supplementary Agreement. The Supplementary
Agreement, however, has no clear-cut stipulation on the
rates of pay, wages, hours of work and other conditions of
employment.
ISSUE: Whether or not the collective bargaining agreement
and the supplementary agreement will bar the holding of a
certification election?
HELD: NO. The CBA will not bar the holding of a
certification election because it is incomplete, considering it
does not touch in substantial terms the rates of pay, wages,
hours of work and other terms and conditions of
employment but seeks merely to establish a grievance
procedure for drivers, conductors and inspectors who are
members of Buklod Ng Saulog. Neither can the
supplementary agreement bar the holding of a certification
election for it was entered into after the filing of the petition
for certification election.
Associated Trade Unions vs. Noriel (88 SCRA 96)
FACTS: ATU and Synthetic Marketing had a CBA which
was due to expire on October 31, 1977. The said CBA was
renewed five months and twenty-one days prior to the
expiration of the old CBA. The new CBA was registered
with the BLR. Within the sixty-day freedom period, a
petition for certification election was filed by FFW. ATU
opposed the petition on the ground that it is contract-barred
by virtue of the existence of a duly registered CBA. FFW
assailed the validity of the said CBA on the ground that it
had been executed 5 months and 21 days prior to the
expiration of the old CBA and that it was not ratified by the
members of the bargaining unit.
ISSUE: Whether or not the new CBA will bar the holding of
a certification election?
HELD: NO. The new CBA was hastily and prematurely
entered into precisely for the purpose of avoiding the
holding of a certification election. The new CBA was not yet
in existence when the petition for certification election was
filed. Clearly, the contract-bar principle will not apply.
Firestone vs. Estrella (81 SCRA 49)
FACTS: ALU and Firestone had a CBA which was to be
effective from February 1, 1973 to January 31, 1976. On
February 1, 1974, ALU and Firestone entered into a
Supplementary Agreement extending the life of the CBA for
one (1) year. The extension was neither ratified nor
submitted to the DOLE. On February 10, 1976, ten (10)
days after the original expiry date of the CBA, the Firestone

Tire and Rubber Company Employees Union filed a petition
for certification election. ALU moved for the dismissal of the
petition by invoking the contract-bar principle.
ISSUE: Is the contract-bar principle applicable?
HELD: NO. A collective bargaining agreement does not
operate as a bar to representation proceeding, where it is
shown that because of a schism in the union, the contract
can no longer serve to promote industrial stability and the
direction of the election is in the interest of industrial
stability as well as in the interest of the employees right in
the selection of their bargaining agreement. Basic to the
contract-bar rule is the proposition that the delay of the right
to select representative can be justified only where stability
is deemed paramount. Excepted from the contract-bar rule
are certain types of contracts which do not foster industrial
stability.
Effect of Automatic Renewal Clause:
- A collective bargaining agreement which provides for
automatic renewal in the absence of notice by one of the
contracting parties of intention to alter, modify or terminate
it prior to a specific period preceding the termination will
operate as a bar to certification election.
- This rule does not apply where a contesting union has
given a timely notice to the employer or has seasonably
filed a petition for certification election prior to the specified
date for automatic renewal.
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.
COMMENT:
The Philosophy Behind the Privilege:
- To encourage the parties to make full disclosure of
facts and circumstances without fear in order to
facilitate the settlement of labor disputes in line
with the policy of the State to promote and
emphasize mediation and conciliation as modes of
settling labor or industrial disputes.
TITLE IV
LABOR ORGANIZATIONS
CHAPTER I
REGISTRATION AND CANCELLATION
Art. 234. Requirements of Registration - A federation,
national union or industry or trade union center or an
independent union shall acquire legal personality and
shall be entitled to the rights and privileges granted by
law to legitimate labor organizations upon issuance of
the certificate of registration based on the following
requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the
principal address of the labor organization, the minutes
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 6
Atty. Paulino Ungos
of the organizational meetings and the list of the
workers who participated in such meetings;
(c) In case the applicant is an independent union, the
names of all its members comprising at least twenty
percent (20%) of all the employees in the bargaining
unit where it seeks to operate;
(d) If the applicant union has been in existence for
one or more years, copies of its annual financial
reports; and
(e) Four copies of the constitution and by-laws of the
applicant union, minutes of its adoption or ratification,
and the list of the members who participated in it.
COMMENT:
Labor Organization:
- A 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.
Significance of Registration:
- Registration of a labor organization is necessary
for it to acquire legal personality and enjoy the
rights and privileges enumerated in Art. 242 of the
Labor Code.
Purpose of Registration:
- To protect both labor and public against abuses,
fraud or impostors who pose as organizers,
although not truly accredited agents of the union
they purport to represent.
Constitutionality:
- The law requiring the registration of labor
organizations is not unconstitutional because it is
a valid exercise of the police power.
- Not a limitation on the right of assembly or
association, considering that the right of assembly
or association may be exercised with or without
registration.
Legal Personality of Labor Organizations:
- A labor organization acquires legal personality and
attains the status of legitimacy upon the issuance
in its name of a Certificate of Registration.
- An unregistered labor organization can acquire
legal personality and attain the status of legitimacy
by affiliating with a duly registered Federation or
National Union; becomes a Chartered Local.
- A Chartered Local, therefore, need not be
independently registered.
Effect of Incorporation:
- A labor union organized under the Corporation
Law merely gives it juridical personality before the
regular courts, but it will not entitle such union to
the rights and privileges accorded by law to
legitimate labor organizations.
- Registration with the DOLE makes a labor
organization legitimate.
Registration of Independent Union:
- Independent Union: a labor organization operating
at the enterprise level whose legal personality is
derived through independent registration.

- To register an independent union, an application
for registration should be filed with the Regional
Office of the DOLE where it principally operates.
- The application for registration should be
supported by the following documents:
(a) Name of the applicant labor union,
its principal address, the names of
its officers and their respective
addresses, approximate number of
employees in the bargaining unit
where it seeks to operate, and a
statement that it is not reported as a
chartered local of any federation or
local union;
(b) Minutes of the organizational
meetings and the list of workers who
participated in such meetings;
(c) Names of all its members comprising
at least twenty percent (20%) of the
employees in the bargaining unit;
(d) Annual financial reports if the
applicant has been in existence for
one or more years; and
(e) Constitution and By-Laws, minutes
of its adoption or ratification, and the
list of the members who participated
in it.
Registration of Workers Association:
- Workers Association: An organization of workers
created for the mutual aid and protection of its
members for any legitimate purpose other than
collective bargaining.
- To register a workers association, an application
should be filed with the Regional Office of the
DOLE where it principally operates.
- The application should be supported by the
following documents:
(a) Name of the applicant association,
its principal address, the names of
its officers and their addresses;
(b) Minutes of the organizational
meeting, and the names of the
individual members who participated
therein; and
(c) Constitution and By-Laws to which
must be attached the names of
ratifying members, the minutes of
adoption or ratification of the
constitution and by-laws and the
date when the ratification was made,
unless ratification was done in the
organizational meeting, in which
case such fact shall be reflected in
the minutes of the organizational
meeting.
Change of Name of Labor Organization:
- A Notice of Change of Name shall be filed with the
BLR or the Regional Office of the DOLE where the
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labor organizations certificate of registration or
certificate of creation of a chartered local was
issued.
- The notice of change of name shall be
accompanied by the following documents:
(a) Proof of approval or ratification of
change of name; and
(b) Amended constitution and by-laws.
- The change of name of a labor organization does
not affect its legal personality.
Merger or Consolidation of Labor Organization:
- A Notice of Merger or Consolidation shall be filed
with:
(a) Regional Office of the DOLE that
issued the Certificate of Registration
in case of independent labor
unions and workers associations;
(b) Regional Office of the DOLE that
issued the Certificate of Creation of
Chartered Local in case of
chartered locals; or
(c) Bureau of Labor Relations in case
of federations or national unions.
- Supporting Documents for Merger:
o Notice of merger shall be accompanied
by the following documents:
(a) Minutes of merger convention or
general membership meeting of all
the merging labor organizations, and
list of their respective members who
approved the same; and
(b) Amended constitution and by-laws
and minutes of its ratification, unless
ratification transpired during the
merger convention, which fact shall
be indicated accordingly.
- Supporting Documents for Consolidation:
o Notice of consolidation shall be
accompanied by the following
documents:
(a) Minutes of consolidation convention
of all the consolidating labor
organizations and list of their
respective members who approved
the same; and
(b) Amended constitution and by-laws
and mintues of its ratification, unless
ratification transpired during the
consolidation convention, which fact
shall be indicated accordingly.
- Effect of Merger:
o The legal existence of the absorbed labor
organization ceases, while the legal
existence of the absorbing labor
organization subsists.

o All rights, interests and obligations of the
absorbed labor organizations are
transferred to the absorbing organization.
-Effect of Consolidation:
o The legal existence of the consolidating
labor organization shall cease and a new
labor organization is created.
Remedy:
- Re-Filing of Application
o Re-file application or notice with
complete supporting documents.
Art. 235. Action on the Application - The Bureau shall act
on all applications for registration within thirty (30)
days from filing.
All requisite documents and papers shall be certified
under oath by the secretary or the treasurer of the
organization, as the case may be, and attested to by its
president.
COMMENT:
Significance of the 30-Day Period:
- The BLR shall act on all applications for
registration within thirty (30) days from filing.
- The mere filing of the requisite documents and
papers does not automatically oblige the BLR to
issue a certificate of registration.
- The BLR is duty bound to further check if the
registration requirements under Art. 234 have
been sedulously complied with.
Certification and Attestation of Documents:
- Application for registration and all its supporting
documents are required to be:
(a) Certified under oath by the Secretary
Treasurer of the organization; and
(b) Attested to by the President.
- Both requirements must be strictly complied with.
- Mandatory attestation requirement also applies to
notice of change of name, notice of merger, and
notice of consolidation and all their supporting
documents.
Case: Progressive Development Corporation vs. Secretary
of Labor (205 SCRA 802)
FACTS: KILUSAN filed a petition for certification election
among the rank and file employees of PDC, alleging that it
is a legitimate labor federation. PDC sought the dismissal
of the petition on the ground that the constitution and by-
laws was merely attested to by the union president but it
was not certified under oath by the union secretary or the
union treasurer, hence not acquiring legal personality.
According to the Med-Arbiter, the mere issuance of a
Charter Certificate by the federation was sufficient
compliance with the rules.
ISSUE: Is the Med-Arbiter correct?
HELD: NO. A local chapter will become a legitimate labor
organization only if the required documents and papers are
certified under oath by the secretary or treasurer of the
organization and attested to by its president. Hence PDEU
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 8
Atty. Paulino Ungos
did not acquire legal personality. Consequently, it cannot
file a petition for certification election.
Purpose of Certification and Attestation:
- Preventive measures against the commission of
fraud.
Remedies:
- Mandamus:
o If registration is refused despite
compliance with all the legal
requirements for registration, the remedy
of mandamus can be availed of to
compel the registration of the labor
organization.
- Petition for Cancellation of Registration:
o If the registration is granted, a petition for
cancellation of registration may be filed
on any of the grounds provided for in Art.
239 of the Labor Code.
o The remedy of certiorari is not available
because the act of approving an
application for registration of a labor
organization is not a judicial function but
a ministerial duty.
Art. 236. Denial of Registration; Appeal - The decision of
the Labor Relations Division in the regional office
denying registration may be appealed by the applicant
union to the Bureau within ten (10) days from receipt of
notice thereof.
COMMENT:
Grounds for Denial of Registration:
(a) Falsification or serious irregularities in the
application for registration or its supporting
documents;
(b) Non-compliance with the requirements for
registration, particularly the certification and
attestation requirements; or
(c) Failure to complete the registration requirements
within thirty (30) days from notice.
Remedy From Denial of Registration:
- Appeal:
o If the application for registration is denied
on grounds other than failure to submit
the complete requirements, the remedy is
to appeal the order within ten (10) days
from receipt to the:
(a) Bureau of Labor Relations
if the order of denial was
issued by the Regional
Office of the DOLE; or
(b) Office of the Secretary of
Labor and Employment if
the order of denial was
issued by the BLR.
Art. 237. Additional Requirements For Federation or
National Unions - Subject to Article 238, if the applicant
for registration is a federation or a national union, it

shall, in addition to the requirements of the preceding
Articles, submit the following:
(a) Proof of the affiliation of at least ten (10) locals or
chapters, each of which must be a duly recognized
collective bargaining agent in the establishment or
industry in which it operates, supporting the
registration of such applicant federation or national
union; and
(b) The names and addresses of the companies where
the locals or chapters operate and the list of all the
members in each company involved.
COMMENT:
Federation or National Union:
- A labor organization with at least ten (10) affiliates
or chartered locals, each of which must be a duly
recognized or certified collective bargaining agent.
Registration of Federation or National Union:
- Application for registration should be filed with the
BLR.
- The application should be supported by the
following documents:
(a) Statement indicating the name of the
applicant federation or national
union, its principal address, the
names of its officers and their
respective addresses;
(b) Minutes of the organizational
meetings and the list of workers who
participated in such meetings;
(c) Annual financial reports if the
applicant has been in existence for
one or more years;
(d) Constitution and by-laws, minutes of
its adoption or ratification, and the
list of the members who participated
in it.
(e) Resolution of affiliation of at least ten
(10) legitimate labor organization,
whether independent or chartered
locals, each of which must be a
recognized or certified bargaining
representative on the establishment
where it seeks to operate; and
(f) Names and addresses of the
companions where the affiliates
operates and list of all the members
in each company involved.
Composition of a Federation or National Union:
- Affiliates:
o Independently registered unions, hence,
they have a legal personality of their own,
separate and distinct from that of the
mother union.
Chartered Locals:
- Not independently registered unions their legal
personality is derived from their mother union or
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Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
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federation, upon issuance of a Certificate of
Creation of Chartered Local.
Nature of Relationship Between Federation and Local
Union:
- Principal-agent
- The local union or affiliate is the principal, while
the federation is the agent.
- Principal-agent relationship exists even if the local
union is not independently registered.
Case: Filipino Pipe & Foundry vs. NLRC (318 SCRA 68)
FACTS: NLU, a national federation of labor unions, filed in
behalf of its local chapter, the FPWU-NLU, a notice of strike
signed by the president of the federation. Without waiting
for the outcome of the conciliation conference, FPWU-NLU
staged the strike. Upon petition of the company, the NLRC
declared the strike illegal. NLU claimed that it cannot be
held liable for damages because it is a mere agent of the
local union.
ISSUE: Who is liable for damages, NLU (federation) or
FPWU-NLU (local union)?
HELD: The local union (FPW-NLU) is liable for the
damages sustained by the company as a result of the
illegal strike. As the local union, it is considered as the
principal. Being just an agent, the notice of strike filed by
the NLU is deemed to have been filed by its principal, the
FPWU-NLU. This is so even if FPWU-NLU is not
independently registered.
Case: Elisco-Elirol Labor Union vs. Noriel (80 SCRA 682)
FACTS: Elisco-Elirol Labor Union affiliated itself with the
National Federation of Labor Union (NAFLU). In February
1974, the Elisco-Elirol Labor Union-NAFLU entered into a
collective bargaining agreement with the company. On May
28, 1975, the members of Elisco-Elirol Labor Union-NAFLU
disaffiliated from NAFLU and formed themselves into an
independent union.
ISSUE: Which of the two unions has the right to be
recognized as the collective bargaining representative and
ultimately administer the collective bargaining agreement
NAFLU or Elisco-Elirol Labor Union?
HELD: Elisco-Elirol Labor Union has the right to be
recognized as the collective bargaining representative and
ultimately administer the CBA. As the local union, Elisco-
Elirol Labor Union is the principal party to the CBA. The
disaffiliation of Elisco-Elirol Labor Union from NAFLU did
not create a new union but merely detached the local union
from its mother federation.
Creation of a Chartered Local:
- A duly registered federation or national union may
directly create a chartered local by submitting to
the Regional Office of the DOLE two (2) copies of
the following documents:
(a) Charter Certificate issued by the
federation or national union
indicating the creation or
establishment of the local/chapter;
(b) Names of the local/chapters offices,
their addresses, and the principal
office of the local/chapter;

(c) Constitution and by-laws of the
local/chapter.
- Documents should be certified under oath by the
Secretary or Treasurer of the local/chapter and
attested by its president.
Affiliation of an Independent Union:
- An independent union may affiliate with a
federation or national union by obtaining the
following:
(a) Approval of the majority of the union
members in a general membership
meeting duly called for the purpose;
and
(b) Resolution of affiliation from the
board of directors of the union.
The legal effect of Affiliation:
- When a labor union affiliates with a federation, it
becomes subject to the laws of the federation.
- The constitution and by-laws of the federation
governs the relationship between the federation
and the affiliate or local union.
- An independent union which affiliates with a
federtation or national union does not lose its legal
personality.
Case: Chrysler Philippines vs. Estrella (86 SCRA 338)
FACTS: CPLU is a labor union. Sometime in March 1974,
CPLU affiliated with a labor federation named ALU. During
the affiliation, CPLU-ALU entered into a CBA with CPC.
Thereafter, CPLU disaffiliated from ALU. Subsequently,
CPLU filed a Petition for Direct Certification praying that it
be directly certified as the exclusive collective bargaining
agent of the hourly-paid workers of CPC. CPLU-ALU
sought to dismiss the petition on the ground that CPLU is a
non-existing union since it has been superseded by CPLU-
ALU.
ISSUE: Whether or not CPLU has lost its legal personality
as a labor organization when it affiliated with its mother
union, ALU?
HELD: NO. While it is true that its name was changed to
CPLU-ALU, such change was only a matter of form
designed to convey the idea that CPLU had affiliated with
ALU, but it did not affect the legal personality of the
affiliating union. The only way by which a labor organization
could be disenfranchised is cancellation of its registration.
Case: Adamson & Adamson, Inc., vs. CIR (127 SCRA 268)
FACTS: The Adamson & Adamson, Inc. Salesmen
Association is the union at Adamson & Adamson, Inc. it is
affiliated with the FFW. Subsequently, the supervisors of
Adamson& Adamson organized themselves into a union
named Adamson & Adamson, Inc. Supervisory Union. It is
likewise affiliated with FFW. The rank-and-file employees
also organized themselves into a union named Adamson &
Adamson Independent Workers Union, and affiliated with
the FFW. Adamson & Adamson, Inc. questioned the
affiliation of the unions with FFW, arguing that the affiliation
of the three unions with the same federation transforms
them into one union because the three unions would now
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Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 10
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be governed by the constitution and by-laws of the
federation.
ISSUE: Is the contention valid?
HELD: NO. The three unions remained a basic unit free to
serve the common interest of all its members. The inclusion
of the name FFW after the name of the local unions does
not mean that the local unions cannot stand on their own.
Report of Affiliation:
- The affiliation of an independently registered labor
union with a federation or national union shall be
reported to the Regional Office of the DOLE that
issued its certificate of registration.
- The Report of Affiliation shall be accompanied by
the following documents:
(a) Resolution of the labor unions board
of directors approving the affiliation;
(b) Minutes of the general membership
meeting approving the affiliation;
(c) Total numbers of members
comprising the labor union and the
names of members who approved
the affiliation;
(d) Certificate of affiliation issued by the
federation in favour the
independently registered labor
union; and
(e) Written notice to the employer
concerned if the affiliating union is
the incumbent bargaining agent.
Disaffiliation:
- A local union has the right to disaffiliate from its
mother federation.
- The right of a local union to disaffiliate from the
mother federation is primarily dependent upon the
constitution and by-laws of the federation.
- Proper time for Disaffiliation:
o Generally, during the 60-day freedom
period immediately preceding the
expiration of the CBA.
o Exceptionally, disaffiliation may be
carried out before the onset of the
freedom period, if there is a substantial
shift of allegiance on the part of the
majority of the members of the union.
- Effect of Disaffiliation:
o On the Relationship Between the Local
Union and the Federation Disaffiliation
severs the relationship between the local
union and the mother federation. It
divests the federation of any and all
power to act in representation of the local
union.
o On the Collective Bargaining Agreement
Disaffiliation does not disturb the
enforceability and administration of the
CBA executed by and between an
employer and the federation. The reason
is because the local union continues to
represent the employees notwithstanding
the disaffiliation.

o On the Legal Personality of the Local
Union An independent union that
disaffiliates from its mother federation
does not lose its legal personality
because it has its own registration. A
chartered local that disaffiliates from its
mother federation loses its legal
personality because it has no registration
of its own.
Art. 238. Cancellation of Registration The certificate of
registration of any labor organization, whether national
or local, may be cancelled by the Bureau if it has
reason to believe, after due hearing, that the said labor
organization no longer meets one or more of the
requirements herein prescribed.
COMMENT:
Administrative Cancellation of Registration:
- The certificate of registration of a labor
organization may be cancelled administratively for
failure to submit to the Regional Office of the
DOLE or the BLR which issued its certificate or
registration or certificate of creation of chartered
local the following documents:
(a) Any amendment to its constitution
and by-laws and the minutes of
adoption or ratification of such
amendments;
(b) Annual financial reports;
(c) Updated list of newly-elected
officers, together with the appointive
officers or agents who are entrusted
with the handling of funds;
(d) Updated list of individual members;
(e) Updated list of its chartered locals
and affiliates or member
organizations, CBAs executed and
their effectivity period, including an
updated list of authorized
representatives, agents or
signatories in different regions of the
country, in case of federations or
national unions.
- No certificate of registration shall be
administratively cancelled due to non-compliance
with the reportorial requirements unless:
(a) Non-compliance is for a continuous
period of five (5) years;
(b) The procedural rules were complied
with; and
(c) The labor organization concerned
has not responded to any of the
notices sent or the notices were
returned unclaimed.
Art. 239. Grounds for cancellation of union registration.
The following shall constitute grounds for cancellation
of union registration:
a. Misrepresentation, false statement or fraud in
connection with the adoption or ratification of
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Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
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the constitution and by-laws or amendments
thereto, the minutes of ratification and the list
of members who took part in the ratification;
b. Failure to submit the documents mentioned in
the preceding paragraph within thirty (30) days
from adoption or ratification of the constitution
and by-laws or amendments thereto;
c. Misrepresentation, false statements or fraud in
connection with the election of officers,
minutes of the election of officers, the list of
voters, or failure to submit these documents
together with the list of the newly
elected/appointed officers and their postal
addresses within thirty (30) days from election;
d. Failure to submit the annual financial report to
the Bureau within thirty (30) days after the
closing of every fiscal year and
misrepresentation, false entries or fraud in the
preparation of the financial report itself;
e. Acting as a labor contractor or engaging in the
"cabo" system, or otherwise engaging in any
activity prohibited by law;
f. Entering into collective bargaining agreements
which provide terms and conditions of
employment below minimum standards
established by law;
g. Asking for or accepting attorneys fees or
negotiation fees from employers;
h. Other than for mandatory activities under this
Code, checking off special assessments or
any other fees without duly signed individual
written authorizations of the members;
i. Failure to submit list of individual members to
the Bureau once a year or whenever required
by the Bureau; and
j. Failure to comply with requirements under
Articles 237 and 238.
Grounds for Cancellation of Union Registration
1.1 Fraudulent Acts
May be cancelled on the ground of
MISREPRESENTATION, FALSE STATEMENT or
FRAUD in connection with:
a. Adoption or ratification of the constitution and
by-laws or amendments thereto, the minutes
of ratification and the list of members who
took part in the ratification
b. Election of officers, minutes of the election of
officers, the list of voters; and
c. Preparation of the financial report itself.
1.2 Unlawful Acts

a. Acting as a labor contractor or engaging in
the "cabo" system
b. Entering into collective bargaining
agreements which provide terms and
conditions of employment below minimum
standards established by law;
c. Asking for or accepting attorneys fees or
negotiation fees from employers;
d. Checking off special assessments or other
fees without individual written check- off
authorization, except for mandatory activities
under the Labor Code;
e. Violation of Article 241 of the Labor Code
regarding rights and conditions of
membership in a labor organization.
1.3 Non- compliance with Certain Requirements
a. Failure to submit its constitution and by-laws
or amendments thereto, the minutes of
ratification and the list of members who took
part in the ratification within thirty (30) days
from adoption or ratification.
b. Failure to submit the list of the newly
elected/appointed officers and their postal
addresses within thirty (30) days from
election;
c. Failure to submit the annual financial report to
the Bureau within thirty (30) days after the
closing of every fiscal year.
d. Failure to submit list of individual members to
the Bureau once a year or whenever required
by the Bureau.
e. Failure to comply with requirements under
Articles 234 and 237.
2. Cancellation Procedure
General Rule: The registration of a labor organization
can only be questioned DIRECTLY through a petition
for cancellation of registration. COLLATERAL ATTACK
is not allowed.
EXCEPTION: Administrative cancellation is proper.
2.1 The Proper Party
GENERAL RULE: Any party-in-interest.
EXCEPTION: If the ground for cancellation is based on
a violation of Article 241 of the LC, only members of
the labor organization or workers association
concerned can file the petition for cancellation.
2.2 Form of Petition
The complaint or petition shall be in WRITING,
VERIFIED UNDER OATH and shall contain the
following:
(a) name, address and other personal
circumstances of the complainant(s) or
petitioner(s);
(b) name, address and other personal
circumstances of the respondent(s) or
person(s) charged;
(c) nature of the complaint or petition;
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Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
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(d) facts and circumstances surrounding the
complaint or petition;
(e) cause(s) of action or specific violation(s)
committed;
(f) a statement that the administrative remedies
provided for in the constitution and by-laws
have been exhausted or such remedies are
not readily available to the complainant(s) or
petitioner(s) through no
(g) fault of his/her/their own, or compliance with
such administrative remedies does not apply
to complainant(s) or petitioner(s);
(h) relief(s) prayed for;
(i) certificate of non-forum shopping; and
(j) other relevant matters.
2.3 VENUE
INDEPENDENT UNION, CHARTERED LOCAL, or
WORKERS ASSOCIATION: Regional Office of
DOLE that issued its certificate of creation or
chartered local.
NATIONAL UNION, INDUSTRY UNION, TRADE
UNION CENTERS: Bureau of Labor Relations.
2.4 Appeal
Appealable within TEN (10) days from receipt to the
following agencies:
a. BUREAU OF LABOR RELATIONS: if the
case was decided by the REGIONAL
DIRECTOR of DOLE.
b. SECRETARY OF LABOR AND
EMPLOYMENT: if the case was decided by
the BUREAU OF LABOR RELATIONS in the
exercise of its ORIGINAL JURISDICTION.
2.4 Finality of Decision Rendered on Appeal
Decisions of Sec of Labor and Employment
are FINAL and EXECUTORY
Decisions of BLR in the exercise of its
appellate jurisdiction are FINAL and
EXECUTORY (Not appealable to the Sec of
Labor and Employment)
CASE:
FACTS: ALEU applied for union registration, the
application was approved. Abbott Laboratories filed for
its cancellation of ALEU on the ground that the
application was not signed by atleast 20% of the rank-
and-file employees.
The Regional Director of DOLE ordered the
cancellation of the registration. ALEU appealed to the
BLR, rendered a decision reversing the order of the
Regional Director. Abbot appealed the decision to
Secretary of Labor and Employment, refused due to
lack of jurisdiction.
ISSUE: Whether Sec of Labor and Employment has
jurisdiction?
Held: No. the appellate jurisdiction of the Sec of labor
and Employment is limited only to a review of

cancellation proceedings decided by BLR in the
exercise of its EXLUSIVE and ORIGINAL Jurisdiction.
3. Effect of Cancellation Proceedings
During pendency the labor organization
continues to enjoy all rights accorded to a
legitimate labor organization.
o Can still file for certification
Certificate of election
proceedings be suspended
until the issue have been
resolved. (failure: Grave
abuse of Discretion)
FINAL ORDER of CANCELLATION: strip a
legitimate labor organization of its rights.
Art. 240. Equity of the incumbent. All existing
federations and national unions which meet the
qualifications of a legitimate labor organization
and none of the grounds for cancellation shall
continue to maintain their existing affiliates
regardless of the nature of the industry and the
location of the affiliates.
1. The Import of the Law
Proclaims the right of federation or national
union.
It does not in any way prohibit the disaffiliation
of a local union from a federation or national
union.
CHAPTER II
RIGHTS AND CONDITIONS OF MEMBERSHIP
Art. 241. Rights and conditions of membership in a labor
organization. The following are the rights and
conditions of membership in a labor organization:
a. No arbitrary or excessive initiation fees shall
be required of the members of a legitimate
labor organization nor shall arbitrary,
excessive or oppressive fine and forfeiture be
imposed;
b. The members shall be entitled to full and
detailed reports from their officers and
representatives of all financial transactions as
provided for in the constitution and by-laws of
the organization;
c. The members shall directly elect their officers,
including those of the national union or
federation, to which they or their union is
affiliated, by secret ballot at intervals of five (5)
years. No qualification requirements for
candidacy to any position shall be imposed
other than membership in good standing in
subject labor organization. The secretary or
any other responsible union officer shall
furnish the Secretary of Labor and
Employment with a list of the newly-elected
officers, together with the appointive officers
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or agents who are entrusted with the handling
of funds, within thirty (30) calendar days after
the election of officers or from the occurrence
of any change in the list of officers of the labor
organization; (As amended by Section 16,
Republic Act No. 6715, March 21, 1989)
d. The members shall determine by secret ballot,
after due deliberation, any question of major
policy affecting the entire membership of the
organization, unless the nature of the
organization or force majeure renders such
secret ballot impractical, in which case, the
board of directors of the organization may
make the decision in behalf of the general
membership;
e. No labor organization shall knowingly admit as
members or continue in membership any
individual who belongs to a subversive
organization or who is engaged directly or
indirectly in any subversive activity;
f. No person who has been convicted of a crime
involving moral turpitude shall be eligible for
election as a union officer or for appointment
to any position in the union;
g. No officer, agent or member of a labor
organization shall collect any fees, dues, or
other contributions in its behalf or make any
disbursement of its money or funds unless he
is duly authorized pursuant to its constitution
and by-laws;
h. Every payment of fees, dues or other
contributions by a member shall be evidenced
by a receipt signed by the officer or agent
making the collection and entered into the
record of the organization to be kept and
maintained for the purpose;
i. The funds of the organization shall not be
applied for any purpose or object other than
those expressly provided by its constitution
and by-laws or those expressly authorized by
written resolution adopted by the majority of
the members at a general meeting duly called
for the purpose;
j. Every income or revenue of the organization
shall be evidenced by a record showing its
source, and every expenditure of its funds
shall be evidenced by a receipt from the
person to whom the payment is made, which
shall state the date, place and purpose of such
payment. Such record or receipt shall form
part of the financial records of the
organization.

Any action involving the funds of the
organization shall prescribe after three (3)
years from the date of submission of the
annual financial report to the Department of
Labor and Employment or from the date the
same should have been submitted as required
by law, whichever comes earlier: Provided,
That this provision shall apply only to a
legitimate labor organization which has
submitted the financial report requirements
under this Code: Provided, further, that failure
of any labor organization to comply with the
periodic financial reports required by law and
such rules and regulations promulgated
thereunder six (6) months after the effectivity
of this Act shall automatically result in the
cancellation of union registration of such labor
organization; (As amended by Section 16,
Republic Act No. 6715, March 21, 1989)
k. The officers of any labor organization shall not
be paid any compensation other than the
salaries and expenses due to their positions
as specifically provided for in its constitution
and by-laws, or in a written resolution duly
authorized by a majority of all the members at
a general membership meeting duly called for
the purpose. The minutes of the meeting and
the list of participants and ballots cast shall be
subject to inspection by the Secretary of Labor
or his duly authorized representatives. Any
irregularities in the approval of the resolutions
shall be a ground for impeachment or
expulsion from the organization;
l. The treasurer of any labor organization and
every officer thereof who is responsible for the
account of such organization or for the
collection, management, disbursement,
custody or control of the funds, moneys and
other properties of the organization, shall
render to the organization and to its members
a true and correct account of all moneys
received and paid by him since he assumed
office or since the last day on which he
rendered such account, and of all bonds,
securities and other properties of the
organization entrusted to his custody or under
his control. The rendering of such account
shall be made:
1. At least once a year within thirty (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.
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 14
Atty. Paulino Ungos
The account shall be duly audited and verified
by affidavit and a copy thereof shall be
furnished the Secretary of Labor.
m. The books of accounts and other records of
the financial activities of any labor
organization shall be open to inspection by
any officer or member thereof during office
hours;
n. No special assessment or other extraordinary
fees may be levied upon the members of a
labor organization unless authorized by a
written resolution of a majority of all the
members in a general membership meeting
duly called for the purpose. The secretary of
the organization shall record the minutes of
the meeting including the list of all members
present, the votes cast, the purpose of the
special assessment or fees and the recipient
of such assessment or fees. The record shall
be attested to by the president.
o. Other than for mandatory activities under the
Code, no special assessments, attorneys fees,
negotiation fees or any other extraordinary
fees may be checked off from any amount due
to an employee without an individual written
authorization duly signed by the employee.
The authorization should specifically state the
amount, purpose and beneficiary of the
deduction; and
p. It shall be the duty of any labor organization
and its officers to inform its members on the
provisions of its constitution and by-laws,
collective bargaining agreement, the prevailing
labor relations system and all their rights and
obligations under existing labor laws.
For this purpose, registered labor organizations may
assess reasonable dues to finance labor relations
seminars and other labor education activities.
Any violation of the above rights and conditions of
membership shall be a ground for cancellation of union
registration or expulsion of officers from office,
whichever is appropriate. At least thirty percent (30%)
of the members of a union or any member or members
specially concerned may report such violation to the
Bureau. The Bureau shall have the power to hear and
decide any reported violation to mete the appropriate
penalty.
Criminal and civil liabilities arising from violations of
above rights and conditions of membership shall
continue to be under the jurisdiction of ordinary
courts.
1. Rights of Union Members
1.1 RIGHT TO RESIGN FROM THE UNION

Any member may leave and cancel his
union membership at ANYTIME.
This right may be restricted by a
CLOSED-SHOP agreement, the
employee concerned must keep his
union membership until the freedom
period.
1.2 RIGHT TO FAIR DEALING
The relationship between the union and the
union member is fiduciary in nature and
arises out of (2) Two factors:
1. The degree of dependence of the
individual employee on the labor
organization;
2. the comprehensive power vested in
the union with respect to the
individual.
Heirs of Teodulo Cruz vs. CIR (30 SCRA 917)
FACTS: The UNION inbehalf of its members file a
complaint against SRM. CIR rendered a decision
ordering SRM to pay the union member the amount of
P423, 756. 74. During the execution stage, SRM
negotiated with the Union for the settlement of the
case in the amount of P110,000.00 the union president
and BOD of the union accepted to offer despite 49
members and 1 board member objected to the
settlement. The CIR approved the settlement.
HELD: the union leadership was recreant in its duty
towards the union members in failing to disclose to the
union member the full situation of their judgment credit
against SRM.
1.3 RIGHT TO INFORMATION
The union is considered agent of its
members, it is under obligation to give the
members as its principal, all information
relevant to union and labor matters.
o Information regarding the provisions
of the constitution and by-laws of the
union,
o Collective bargaining agreement
o The prevailing labor relations system
o All rights and obligation under
existing laws
o Full and detailed reports of all
financial transactions
o Books of accounts and other
financial records shall be open to
inspection during office hours.
1.4 RIGHT TO DETERMINE MAJOR UNION
POLICIES
GENERAL RULE:
Union members have the right to determine by
SECRET BALLOT, any question of MAJOR
POLICY affecting the entire membership
EXCEPTIONS: the nature of the organization or
force majure renders such secret balloting
impractical.
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 15
Atty. Paulino Ungos
The BOD of the organization may make the
decision in behalf of the general membership.
1.5 RIGHT TO ELECT UNION OFFICERS
o Including national union or federation which
their union is affiliated.
1.6 RIGHT TO SEEK INVESTIGATION OF
IRREGULARITIES
o Union member who invokes his right cannot
be considered to have committed misconduct,
negligence or disloyalty, and therefore,
unlawful to expel such member from the
union.
2. Conditions of Union Membership
2.1 Non- membership in subversive Organization
o No union shall knowingly admit as member or
continue membership any individual who is
engaged directly or indirectly in subversive
activity.
2.2 No Arbitrary or Excessive Initiation Fees
2.3 No levy of special assessment without written
resolution
o UNLESS: authorized by a written resolution of
a majority of all the members at a general
membership meeting duly called for the
purpose.
2.3.1 REQUISITES FOR VALID LEVY OF SPECIAL
ASSESSMENT
a. Written resolution by the majority of all the
union members;
b. Written resolution must be passed in a
general membership meeting duly called for
the purpose;
c. The minutes of the meeting, including the list
of all members present, the votes cast, and
the purpose of the special assessment should
be recorded by the secretary of the labor
organization.
d. The record shall be attested to by the
president of the labor organization.
STRICT COMPLIANCE WITH THE
REQUIREMENTS IS REQUIRED. Failure will
invalidate the special assessment. SUBSTANTIAL
COMPLIANCE will not suffice.
2.4 No Check-off without Individual Written
Authorization
General rule: No Special assessment, Attorneys
fees or other extraordinary fees may be checked
off from any amount due to an employee without
an individual written authorization signed by the
employee.
Exception: MANDATORY ACTIVITIES
Labor relation seminars
Labor education activities

PURPOSE: to protect employees from
unwarranted practices that diminishes their
compensation without their consent.
NOTE: Compulsory arbitration of collective bargaining
deadlock is NOT a mandatory activity. It is a judicial
process of settling labor dispute.
PALACOL vs. FERRER- CALLEJA (182 SCRA 710)
Facts: As a result of new CBA, the president of the
Union submitted to the Company the ratification by the
union members of the new CBA and authorization for
the Company to deduct union dues equivalent to
P10.00 every payday or P20.00 every month and, in
addition, 10% by way of special assessment, from the
CBA lump-sum pay granted to the union members.
The purpose of the special assessment sought to be
levied is "to put up a cooperative and credit union;
purchase vehicles and other items needed for the
benefit of the officers and the general membership;
and for the payment for services rendered by union
officers, consultants and others." There was also an
additional proviso stating that the "matter of allocation
... shall be at the discretion of our incumbent Union
President."
This "Authorization and CBA Ratification" was obtained
by the Union through a secret referendum held in
separate local membership meetings on various dates.
The total membership of the Union was about 800. Of
this number, 672 members originally authorized the
10% special assessment, while 173 opposed the
same.
Subsequently however, one hundred seventy (170)
members of the Union submitted documents to the
Company stating that although they have ratified the
new CBA, they are withdrawing or disauthorizing the
deduction of any amount from their CBA lump sum.
Later, 185 other union members submitted similar
documents expressing the same intent. These
members, numbering 355 in all (170 + 185), added to
the original oppositors of 173, turned the tide in favor
of disauthorization for the special assessment, with a
total of 528 objectors and a remainder of 272
supporters.
ISSUE: Can the special assessment be checked- off?
HELD: NO. the majority of the union members have
withdrawn their individual check-off authorization. The
labor code requires written resolution passed by all
members at a general meeting duly called for that
purpose. The failure of the union to comply STRICTLY
invalidates the questioned special assessment.
GALVADORES vs. TRAJANO (144 SCRA 138)
FACTS: the Executive Board of the Union passed a
resolution requesting PLDT to deduct P115.00 per
employee for the legal services extended to the Union
by respondent Counsel. No individual check off
authorization was presented. Respondents Union and
Counsel argue that compulsory arbitration is a
"mandatory activity" and an exception to Article 242(o)
of the Labor Code, and that the Union members
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 16
Atty. Paulino Ungos
approved the questioned deduction in the plebiscite of
January, 1984.
ISSUE: Attorneys fees may be Checked-off?
HELD:
This is not the "mandatory activity" under the Code
which dispenses with individual written authorizations
for check-offs, notwithstanding its "compulsory" nature.
It is a judicial process of settling disputes laid down by
law. Besides, Article 222(b) does not except a CBA,
later placed under compulsory arbitration, from the
ambit of its prohibition. The cardinal principle should be
borne in mind that employees are protected by law
from unwarranted practices that diminish their
compensation without their knowledge and consent.
2.4.2 Check-off during Pendency of Representation
Case
The right to check-off union dues and agency
fess subsists during the pendency of a
petition for certification election or other intra-
union or inter-union disputes.
2.4.3 Withdrawal of Check-off Authorization
Need not be done separately or individually.
Upon withdrawal of authorization the
obligation to check-off ceases.
2.4.4. Check-off Authorization not Required for
Agency Fees
Check-off for agency fees does not apply to
non-union members for having accepted the
benefits provided for in the CBA.
Violation will be tantamount to ULP.
1. Union Officers
3.1 Qualifications of Union Officers
a. He must be an employee of the company
where the union operates.
b. He must be a member in good standing in the
subject labor organization.
c. He has not been convicted of a crime
involving moral turpitude, or if convicted, he
has been granted absolute pardon.
LARAP LABOR UNION vs. VICTORIANO
97 PHIL 435
FACTS: PV ran as a candidate for president,
however, was contested on the ground that he
was not an employee of Philippine Iron Mines.
Nevertheless, PV and his partisans still held a
rump election which resulted in his asserted
majority votes
ISSUE: Is the election of PV valid?
HELD: NO. He was not an employee of Philippine
Iron Mines. Neither he was a member of the
Union.
FLORA vs. OXIMANA
10 SCRA 212

FACTS: X was the president of Benguet-Balatoc
Workers Union. It was later discovered that X was
previously convicted of the crime abusos
dishonestos. When the case was called for a
hearing, the president of the Philippines granted X
full, absolute and plenary pardon for the crime he
committed.
ISSUE: is X qualified to hold position of Union
president?
HELD: YES. X had already been granted an
absolute pardon by the president of the
Philippines.
3.2 Election of Union Officers
The members shall directly elect their
officers including the officers of national
union or federation to which the union is
affiliated by SECRET BALLOT at
intervals of FIVE (5) Years.
Only union members are qualified to
vote.
Submission of employees names with
the BLR as qualified members of the
union is not condition sine qua non to
enable to vote in the election.
The question of elegibility to vote may be
determined through use of the applicable
payroll period and employment status
during the applicable payroll period
o The payroll of the month
preceeding the labor dispute in
case of regular employees.
o Payroll period at or near the
peak operations in case of
employees in seasonal
employees.
GUIDELINES:
In absence of any agreement in the
constitution and by-laws:
(a) within sixty (60) days before the expiration
of the term of the incumbent officers, the
president of the labor organization shall
constitute a committee on election to be
composed of at least three (3) members who
are not running for any position in the
election, provided that if there are identifiable
parties within the labor organization, each
party shall have equal representation in the
committee;
(b) upon constitution, the members shall elect
the chairman of the committee from among
themselves, and case of disagreement, the
president shall designate the chairman;
(c) within ten (10) days from its constitution,
the committee shall, among others, exercise
the following powers and duties:
1) set the date, time and venue of
the election;
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 17
Atty. Paulino Ungos
2) prescribe the rules on the
qualification and eligibility of
candidates and voters;
3) prepare and post the voters' list
and the list of qualified candidates;
4) accredit the authorized
representatives of the contending
parties;
5) supervise the actual conduct of
the election and canvass the votes
to ensure the sanctity of the ballot;
6) keep minutes of the proceedings;
7) be the final arbiter of all election
protests;
8) proclaim the winners; and
9) prescribe such other rules as may
facilitate the orderly conduct of
election.
3.3 Remedy if Officers do not Call for Election of
New officers
The said election can be called or conducted
and the intervention of DOLE is necessary.
At least 30% of the members of the labor
organization may file a petition for the conduct
of election.
The petition shall be filed with the Regional
Office of the DOLE that issued its certificate
of registration or certificate of creation of
chartered local.
In case of Federation, national or industry
unions and trade centers, the petition shall be
filed with the BLR.
3.4 Election Protest
The five day period for filing a protest in a
certification election does not apply to a
protest in an election of union officers.
Election code is not applicable
It must be filed in the regional office of
DOLE where the union is domiciled.
o Filing of protest is not
invalidated when it was filed
with the office of Sec of Labor
and Employment, It has the
inherent power to entertains
petitions filed directly with his
office.
o In case a winning candidate is
disqualified, the candidate who
obtained the second highest
number of votes should not be
declared as the winner.
3.5 Election Attended by Irregularities is Invalid
Rodriguez vs. BLR
The SC invalidated the election because of
the following irregularities:
o Conducted without prior notice to all
voting members

o Held on dates different from those
stated in the notice;
o Conducted in defiance of the TRO
that was issued by the Med-Arbiter;
o Conducted without any ground rules
or guidelines
UST Faculty Union vs. Bitonio
The SC upheld the nullity of the election union officers:
Notice of election was not done in a meeting
duly called for the purpose.
No committee on elections to oversee the
election,
It was not done in secret ballot
3.6 Compensation of Union Officers
GENERAL RULE: Shall not be paid any
compensation
EXCEPTION: Salaries and expenses due to
their positions as specifically provided for in
its constitution and by-laws, or in written
resolution duly authorized by the majority of
all the members in a general membership
meeting duly called for the purpose.
3.7 Expulsion/ impeachment of Union Officers
GROUNDS:
a. violation of the above rights and conditions of
membership in a labor organization as set
forth in ART 241 of the LC.
b. Commission of irregularities in the approval of
the resolution regarding compensation of
union officers.
c. Membership in another labor organization.
d. Culpable violation of the constitution and by-
laws of the union.
THE BLR has the power to expel or remove
union officer from office.
If DOLE is confronted with a petition for
expulsion or impeachment of union officers, it
should decide the case on its merits.
DUYAG vs. INCIONG
98 SCRA 522
FACTS: A complaint for expulsion was filed
against the union president, treasurer and auditor.
The Med- Arbiter ordered the expulsion of the said
union officers, but on appeal the director of BLR
reversed the Med- Arbiters decision.
ISSUE: Whether the BLR has power to expel
union officers?
HELD: The BLR has the power to expel from the
union any officer found guilty of violating any rights
and conditions of membership specified in ART
242 of LC.
2. Union Funds
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 18
Atty. Paulino Ungos
No agent, officer, member may collect fees
unless he is duly authorized under the
constitution and by-laws.
Shall not be applied for any purpose or object
other than those expressly provided by its
constitution and by-laws, or in written
resolution duly authorized by the majority of
all the members in a general membership
meeting duly called for the purpose.
Everything must be evidenced by a receipt
signed by the officer or agent making the
collection and entered into the record.
Every income or revenue shall be evidenced
by a record showing its source
Every expenditure shall be evidenced by
receipt from the person to whom payment is
made which shall state the place and purpose
of such payment.
4.1 Accounting of Union Funds
The treasurer is obliged to render correct
account of all money received and paid
by since he assumed office.
Account shall be duly audited and
verified by affidavit and copy thereof shall
be furnished the Sec of Labor and
Employment.
The rendering of account shall be made:
a. Atleast once a year within 30 days after
the close of its fiscal year.
b. At such other times as may be required
by a written resolution of the majority of
the members
c. Upon vacating his office.
4.2 Request for Examination of Books of Accounts
Request shall not be treated as an intra-union
dispute, in the absence of allegation that a
violation of Art 241 of the LC has been
committed.
The appointment of an audit examiner is not
appealable.
May be filed with the following agencies by
any union member with the written consent of
atleast 20% of the total members;
a. BLR: if involed is a federation, national union
or trade union center.
b. Regional Office of DOLE that issued its
certificate of registration or certificate of
creation of chartered local: involved is an
independent union or chartered local.
4.3 Action for Accounting/ Audit of Union Funds
Petitions for accounting/ audit of union finds
arising from mishandling, misappropriation or
non- accounting shall be resolved by the
Med- Arbiter.
Petition shall be supported by the written
consent of at least 30% of the total union
membership. However not mandatory.

o Rodriguez vs. BLR
The use of the permissive
may in the provision at
once negates the notion
that the assent of 30% is
mandatory.
The report may be made
alternatively by any
member or members
specially concerned.
The assent of 30% is not a
factor in the acquisition of
jurisdiction by the BLR is
furnished by Art 242 of LC
4.4 Appeal
Decision granting the petition for audit is
INTERLUCUTORY, hence NOT appealable.
Decision denying or dismissing the petition for
audit/accounting of union funds may be
appealed within 10 Days to the:
a. BLR: if decision was rendered by the
Regional Director of DOLE
b. Sec of Labor and Employment: if the decision
was rendered by BLR in the exercise of its
original jurisdiction.
4.5 Prescription of Action
Prescribes after 3 years from the
date of submission of the annual
financial report to the DOLE or from
the date the same should have been
submitted as required by law,
whichever comes earlier.
Chapter III
RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS
Art. 242. Rights of legitimate labor organizations. A
legitimate labor organization shall have the right:
To act as the representative of its members for the
purpose of collective bargaining;
To be certified as the exclusive representative of
all the employees in an appropriate bargaining unit
for purposes of collective bargaining;
To be furnished by the employer, upon written
request, with its annual audited financial
statements, including the balance sheet and the
profit and loss statement, within thirty (30)
calendar days from the date of receipt of the
request, after the union has been duly recognized
by the employer or certified as the sole and
exclusive bargaining representative of the
employees in the bargaining unit, or within sixty
(60) calendar days before the expiration of the
existing collective bargaining agreement, or during
the collective bargaining negotiation;
To own property, real or personal, for the use and
benefit of the labor organization and its members;
To sue and be sued in its registered name; and
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 19
Atty. Paulino Ungos
To undertake all other activities designed to
benefit the organization and its members,
including cooperative, housing, welfare and other
projects not contrary to law.
Notwithstanding any provision of a general or
special law to the contrary, the income and the
properties of legitimate labor organizations,
including grants, endowments, gifts, donations
and contributions they may receive from fraternal
and similar organizations, local or foreign, which
are actually, directly and exclusively used for their
lawful purposes, shall be free from taxes, duties
and other assessments. The exemptions provided
herein may be withdrawn only by a special law
expressly repealing this provision.
1. The Right to Act as Collective Bargaining
Representative
Only legitimate labor organization
can represent employees in
collective bargaining.
U.E. Automotive Employees v. Noriel
- In the absence of any fatal defect
to the application for registration,
there is no justification for
withholding petitioner to exercise
fully its right ti freedom of
association.
2. The Right to Request for Audited Financial
Statements
The right is only available to legitimate labor
organizations which have been recognized or
certified as the sole and exclusive collective
bargaining agent of the employees.
o After it has been accorded
recognition by the employer or after
it has been certified as collective
bargaining representatives
o During freedom period.
o During collective bargaining
negotiations.
3. The Right to Sue and Be Sued
Cannot file in behalf of non- union member
even if the non-members signed the
complaint.
Should be brought in its own registered name.
The union members whose benefit the action
has been filed need not joined as party.
National Brewery and Allied Industries labor
Union vs. San Miguel Brewery.
o The union may sue thereon without
joining the members whose benefit
the action has been presented.
Where Collective bargaining process is not
involved and what is at stake are back wages
already earned by the individual workers, the

real party in interest are the individual workers
themselves, Union cannot file complaint in
behalf of them.
Legal Capacity of labor union cannot be
raised for the first time on appeal. (University
of pangasinan faculty union vs. University of
Pangasinan)
4.The Right to tax Exemption
Properties actually, directly and
exclusively used for their lawful purposes
shall be free from taxes, duties and other
assessments.
Title V
COVERAGE
Art. 243. Coverage and employees right to self-
organization. All persons employed in commercial,
industrial and agricultural enterprises and in religious,
charitable, medical, or educational institutions,
whether operating for profit or not, shall have the right
to self-organization and to form, join, or assist labor
organizations of their own choosing for purposes of
collective bargaining. Ambulant, intermittent and
itinerant workers, self-employed people, rural workers
and those without any definite employers may form
labor organizations for their mutual aid and protection.
1. Implications of the Right to Self-
Organization
The right to self-organization carries with it the
right to:
a. choose which union he would join
b. cancel his union membership
anytime
c. abstain from joining a union
B and C are not absolute, Closed Shop
arrangement
Victorias Miling vs. Victorias- Manapla Workers
Organization
9 SCRA 154
FACTS: Victorias Miling co and the free Visayan
Workers union entered into a CBA with a closed- shop
arrangement. During the effectivity 10 employees
resigned from Free Visayan and joined another union.
The company dismissed the 10 employees?
ISSUE: Whether the dismissal valid?
HELD: YES because it was made in pursuance of the
closed- shop situation in CBA.
2. Basic Types of Organizations
a. Labor Organization
Labor Union created for the purpose of
collective bargaining or dealing with
employers concerning terms and
conditions of employment.
b. Workers association
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 20
Atty. Paulino Ungos
For the purpose of mutual aid and
protection of its members or for any other
legitimate purpose other than collective
bargaining.
3. Kinds of Labor Union
a. NATIONAL UNION or
FEDERATION- is a mother labor
organization with atleast 10
locals/chapters or affiliates.
b. LOCAL UNION- operating at the
enterprise level.
c. CHARTERED LOCAL-labor
organization without an independent
registration whose legal personality
is derived from its mother union or
federation upon issuance of a
certificate of creation of chartered
local.
d. AFFLIATE- independent registered
union attached to a national union or
federation.
e. INDEPENDENT UNION- operating
at the enterprise level that acquired
legal personality through
independent registration and is not
affiliated with a national union or
federation.
f. INDUSTRIAL UNION- composed of
workers in a particular industry.
g. CRAFT UNION- composed of
workers engaged in aparticular trade
or occupation of a kind that requires
skill and training.
h. COMPANY- TYPE UNION-
composed of employees in the same
company.
i. COMPANY UNION- the formation,
function or administration of which
has been assisted by any act
defined as ULP.
4. Eligibility of Membership in a Labor
Organization
4.1 Essential Element
Available only to persons who enjoy
employee status.
The existence of employer- employee
relationship is a condition sine qua non
for the exercise of the constitutional
rights to join or form labor organization. (
La Suerte Cigar and Cigarette Factory
vs. Dir of BLR)
4.2 employees Eligible for Membership in a Labor
Organization
Only RANK-AND-FILE and SUPERVISORY
employees in commercial, industrial and
agricultural enterprise
Religious, charitable, medical or educational
institutions whether operating for profit or not
 Arts. 226-286, Labor Code (Labor Relations) 21
Atty. Paulino Ungos

Security Guards may also form or join a labor

union.
Alien employees with valid working permits
may also join or assist labor unions if they are
nationals of a country which grants the same
or similar rights to Filipino workers certified by
DFA.
1.2 employees of government-owned or controlled
corporations with original charters
Accorded the right to self-organization.
They cannot form labor organization
They cannot strike nor can they bargain
collectively.

4.3 When an Employee Qualifies for Union 1.3 Employees of government and controlled
Membership corporation established under corporation law
On the first day of his employment. Same rights and obligation as employees of
private establishments.
5. Eligibility for Membership in a Workers They can form or join labor organization
Association Stage strike and bargain collectively.
All employees, including ambulant, Governed by labor code.
intermittent, self- employed, rural workers.
Managerial employees, but not for collective EXECUTIVE ORDER NO. 180 June 1, 1987
bargaining purposes. PROVIDING GUIDELINES FOR THE EXERCISE OF THE
RIGHT TO ORGANIZE OF GOVERNMENT EMPLOYEES,
6. Freedom of Religion and the Right to self- CREATING A PUBLIC SECTOR LABOR-MANAGEMENT
organization COUNCIL, AND FOR OTHER PURPOSES
Freedom of Religion superior to contract In accordance with the provisions of the 1987 Constitution,
rights. I, CORAZON C. AQUINO, President of the Philippines, do
hereby order:
Art. 244. Right of employees in the public service. I. Coverage
Employees of government corporations Sec. 1. This Executive Order applies to all employees of all
established under the Corporation Code shall have branches, subdivisions, instrumentalities, and agencies, of
the right to organize and to bargain collectively the Government, including government-owned or controlled
with their respective employers. All other corporations with original charters. For this purpose,
employees in the civil service shall have the right employees, covered by this Executive Order shall be
to form associations for purposes not contrary to referred to as "government employees".
law. Sec. 2. All government employees can form, join or assist
employees' organizations of their own choosing for the
1. Employees in the Public Service furtherance and protection of their interests. They can also
A. employees of branches, subdivisions, form, in conjunction with appropriate government
instrumentalities and agencies of the authorities, labor-management committees, works councils
Government and other forms of workers' participation schemes to
B. employees of government-owned or achieve the same objectives.
controlled corporations with original charters Sec. 3. High-level employees whose functions are normally
C. employees of government and controlled considered as policy-making or managerial or whose duties
corporation established under corporation are of a highly confidential nature shall not be eligible to
law. join the organization of rank-and-file government
employees.
1.1 Government Employees Sec. 4. The Executive Order shall not apply to the
Cannot form or join labor members of the Armed Forces of the Philippines, including
organization, but they can form or police officers, policemen, firemen and jail guards.
join an employees organization. II. Protection of the Right to Organize
High- level employees cannot join Sec. 5. Government employees shall not be discriminated
the organization of rank-and-file against in respect of their employment by reason of their
government employees, they must membership in employees' organizations or participation in
form their own association. the normal activities of their organization. Their
Not available to members of Armed employment shall not be subject to the condition that they
Forces of the Philippines, policemen, shall not join or shall relinquish their membership in the
firemen, and jail guards. employees' organizations.
They are not accorded the right to Sec. 6. Government authorities shall not interfere in the
strike and the right to bargain establishment, functioning or administration of government
collectively. Reason: the terms and employees' organizations through acts designed to place
conditions of employment are such organizations under the control of government
governed by law, only congress can authority.
modify. III. Registration of Employees' Organization

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano

Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

Sec. 7. Government employees' organizations shall register
with the Civil Service Commission and the Department of
Labor and Employment. The application shall be filed with
the Bureau of Labor Relations of the Department which
shall process the same in accordance with the provisions of
the Labor Code of the Philippines, as amended.
Applications may also be filed with the Regional Offices of
the Department of Labor and Employment which shall
immediately transmit the said applications to the Bureau of
Labor Relations within three (3) days from receipt thereof.
Sec. 8. Upon approval of the application, a registration
certificate be issued to the organization recognizing it as a
legitimate employees' organization with the right to
represent its members and undertake activities to further
and defend its interest. The corresponding certificates of
registration shall be jointly approved by the Chairman of the
Civil Service Commission and Secretary of Labor and
Employment.
IV. Sole and Exclusive Employees' Representatives
Sec. 9. The appropriate organizational unit shall be the
employers unit consisting of rank-and-file employees
unless circumstances otherwise require.
Sec. 10. The duly registered employees' organization
having the support of the majority of the employees in the
appropriate organizational unit shall be designated as the
sole and exclusive representative of the employees.
Sec. 11. A duly registered employees' organization shall be
accorded voluntary recognition upon a showing that no
other employees' organization is registered or is seeking
registration, based on records of the Bureau of Labor
Relations, and that the said organizations has the majority
support of the rank-and-file employees in the organizational
unit.
Sec. 12. Where there are two or more duly registered
employees' organizations in the appropriate organizational
unit, the Bureau of Labor Relations shall, upon petition,
order the conduct of a certification election and shall certify
the winner as the exclusive representative of the rank-and-
file employees in said organization unit.
D. Terms and Conditions of Employment in Government
Services
Sec. 13. Terms and conditions of employment or
improvements thereof, except those that are fixed by law,
may be the subject of negotiations between duly
recognized employees' organizations and appropriate
government authorities.
VI. Peaceful Concerted Activities and Strikes
Sec. 14. The Civil Service laws and rules governing
concerted activities and strikes in the government service
shall be observed, subject to any legislation that may be
enacted by Congress.
VII. Public Sector Labor-Management Council
Sec. 15. A Public Sector Labor Management Council,
hereinafter referred to as the Council, is hereby constituted
to be composed of the following:
1) Chairman, Civil Service Commission Chairman
2) Secretary, Department of Labor and
Employment Vice Chairman
3) Secretary, Department of Finance Member
4) Secretary, Department of Justice Member
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 22
Atty. Paulino Ungos
5) Secretary, Department of Budget and
Management Member
The Council shall implement and administer the provisions
of this Executive Order. For this purpose, the Council shall
promulgate the necessary rules and regulations to
implement this Executive Order.
VIII. Settlement of Disputes
Sec. 16. The Civil Service and labor laws and procedures,
whenever applicable, shall be followed in the resolution of
complaints, grievances and cases involving government
employees. In case any dispute remains unresolved after
exhausting all the available remedies under existing laws
and procedures, the parties may jointly refer the dispute to
the Council, for appropriate action.
IX. Effectivity
Sec. 17. This Executive Order shall take effect immediately.
Done in the City of Manila, this 1st day of June, in the year
of Our Lord, nineteen hundred and eighty-seven.
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.
Managerial Employees
One who is vested with powers or
prerogatives to lay down and execute
management policies and, or hire transfer,
suspend, lay-off, recall, discharge, assign or
discipline employees.
1.1 Test of managerial status
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. (As amended by Section 18, Republic Act
No. 6715, March 21, 1989)
MANAGERIAL EMPLOYEES
Those vested with powers prerogatives to lay
down and execute management policies and/or
hire, transfer, suspend, lay-off, recall, discharge,
assign or discipline employees
TEST OF MANAGERIAL STATUS
Nature of the employees functions
The designation should be reconciled with the
actual job description of the employee, for it is the
job description that determines the nature of
employment
Whether the employee possesses authority to act
in the interest of his employer

Whether such authority is not merely routinary or
clerical in character but requires the use of
independent judgment
CHARACTERISTICS OF MANAGERIAL RANK
1. Not subject to the rigid observance of regular
office hours
2. Work requires the consistent exercise of discretion
and judgment in the performance
3. Output produced or the result accomplished
cannot be standardized in relation to a given
period of time
4. Manages a customarily recognized department or
subdivision of the establishment, customarily and
regularly directing the work of other employees
therein
5. Has the authority to hire or discharge other
employees or his suggestions and
recommendations as to hiring and discharging,
advancement and promotion or other change o
status of other employees are given particular
weight
6. As a rule, neither paid hourly wages nor subject to
maximum hours of work
EXAMPLE OF MANAGERIAL POSITIONS
1. Captain of a vessel
2. Major patron, minor patron, chief mate and chief
engineer of a vessel
3. Department managers and assistant managers
4. Farm administrator
5. Route manager
6. Accounting manager
7. Personnel officer
RIGHTS OF MANAGERIAL EMPLOYEES TO SELF-
ORGANIZATION
Can form their own association for any legitimate
purpose other than collective bargaining
o Cannot join, form or assist in the
formation of a labor organization
o They have no collective bargaining rights
o REASON: Conflict of interest brought
about by the nature of their position
CONSTITUTIONALITY OF ARTICLE 245
Not unconstitutional
It does not absolutely forbid managerial
employees from exercising their right of
association
o Only prohibits the right to join labor
organizations
SUPERVISORY EMPLOYEES
Those who, in the interest of the employer,
effectively recommend the laying down and
execution of management policies and/or hiring,
transfer, suspension, lay-off, recall, discharge,
assignment or discipline of employees
o The power to recommend should be
effective
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 23
Atty. Paulino Ungos
o The exercise of such authority should not
be merely of a routinary or clerical
nature, but should require the use of
independent judgment
Mere designation is not necessarily indicative of
supervisory status
EXAMPLES OF SUPERVISORY POSITIONS
An employee who exercises general supervision
over a group of executive assistants in performing
a variety of research, performs, administrative and
technical duties, or is given the power to
recommend action on a variety of matters
pertaining to the operation of the business of the
office and performs other duties as may be
assigned to them by the General Manager
The mere fact that the employee also acts as
liaison officer between the Sweepstakes Office
and those of Congress, the Civil Service
Commission and the Office of the President does
not nullify his supervisory status
Foremen
o Chief and often especially-trained
workmen with and commonly are in
charge of a group of employees in an
industrial plant on in construction work
RIGHT OF SUPERVISIORY EMPLOYEES TO SELF-
ORGANIZATION
Accorded the right to form or join a labor
organization BUT not eligible for membership in a
labor organization of rank-and-file employees
o Should form their own separate
organization
o REASON: difference in their interests
The peculiar role of supervisors
is that they act contrary to the
interests of the rank-and-file
whenever they recommend
action implementing
management policy or
whenever they ask for the
discipline or dismissal of
subordinates
Members of the supervisory
union might refuse to carry out
disciplinary measures against
their co-member rank-and-file
employees. In the area of
collective bargaining, their
interest cannot be considered
identical
GENERAL RULE: Mere affiliation of both the
supervisors union and the rank-and-file union with
the same federation is not per se objectionable
EXCEPTIONS:
1. When the rank-and-file employees are
directly under the authority of supervisory
employees

2. When the national federation is actively
involved in union activities in the
company
A labor organization composed of a mixture of
rank-and-file and supervisory employees is no
labor organization at all
o It cannot possess any of the rights of a
legitimate labor organization, including
the right to file a petition for certification
election
RANK AND FILE EMPLOYEES
All employees who are neither managerial nor
supervisory
CONFIDENTIAL EMPLOYEES
Confidential employees are those who:
1. Assist or act in a confidential capacity
2. To persons who formulate, determine,
and effectuate management policies in
the field of labor relations
The two criteria are cumulative
o The confidential relationship must exist
between the employee and his
supervisor; and the supervisor must
handle the prescribed responsibilities
relating to labor relations
KEY QUESTION employees necessary access
to confidential labor relations information
RIGHT OF CONFIDENTIAL EMPLOYEES TO SELF-
ORGANIZATION
Disqualified from joining, forming or assisting in
the formation of a labor organization under the
doctrine of necessary implication
Not directly prohibited by Art. 245 of the Labor
Code
DOCTRINE OF NECESSARY IMPLICATION
o The disqualification accorded to
managerial employees equally applies to
confidential employees
o REASON: In the normal course of their
duties, they become aware of
management policies relating to labor
relations
BROAD RATIONALE: Employees should not be
placed in a position involving a potential conflict of
interests
Management should not be required to handle
labor relations matters through employees who
are represented by the union with which the
company is required to deal with and who in the
normal performance of their duties may obtain
advance information of the companys position
with regard to contract negotiations, the
disposition of grievances, or other labor relations
matters
Confidential employees may become the source
of undue advantage
o May act as spies of either party to a
collective bargaining agreement
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 24
Atty. Paulino Ungos
Confidential employees who do not have access
to labor relations information can form or join a
labor union
EMPLOYEES OF COOPERATIVES
COOPERATIVE
o Organization composed primarily of small
producers and consumers who
voluntarily join together to form business
enterprises which they themselves own,
control, and patronize
EMPLOYEES WHO ARE THEMSELVES
MEMBERS OF THE COOPERATIVE
o No right to form or join a labor
organization
o REASON: They are co-owners of the
cooperative
An owner cannot bargain with
himself
EMPLOYEES WHO ARE NOT MEMBERS OF
THE COOPERATIVE
o Entitled to exercise their rights to self-
organization and collective bargaining
Art. 246. Non-abridgment of Right to Self-Organization. It
shall be unlawful for any person to restrain, coerce,
discriminate against or unduly interfere with
employees and workers in their exercise of the right to
self-organization. Such right shall include the right to
form, join, or assist labor organizations for the purpose
of collective bargaining through representatives of
their own choosing and to engage in lawful concerted
activities for the same purpose for their mutual aid and
protection, subject to the provisions of Article 264 of
this Code. (As amended by Batas Pambansa Bilang 70,
May 1, 1980)
FREEDOM OF ASSOCIATION
Stresses the freedom of association enshrined in
Section 8, Article III of the Constitution
o 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.
As a matter of principle, the right to self-
organization should be subordinated to the
constitutional provision protecting the sanctity of
contracts
The right to engage in concerted activities (which
is an incident of the right to self-organization) is
not absolute
o LIMITATION: Those aimed at compelling
an employer to ignore the clear mandate
of the Labor Code
The right to picket may be regulated at the
instance of third parties or innocent by-standers
if it appears that the inevitable result of its exercise
is to create an impression that a labor dispute with
which they have no connection or interest exists

between them and the picketing union
constitute an invasion of their rights
TITLE VI
UNFAIR LABOR PRACTICES
CHAPTER I
CONCEPT
Art. 247. Concept of Unfair Labor Practice and Procedure
for Prosecution Thereof. Unfair labor practices violate
the constitutional right of workers and employees to
self-organization, are inimical to the legitimate
interests of both labor and management, including
their right to bargain collectively and otherwise deal
with each other in an atmosphere of freedom and
mutual respect, disrupt industrial peace and hinder the
promotion of healthy and stable labor-management
relations.
Consequently, unfair labor practices are not only
violations of the civil rights of both labor and
management but are also criminal offenses against the
State which shall be subject to prosecution and
punishment as herein provided.
Subject to the exercise by the President or by the
Secretary of Labor and Employment of the powers
vested in them by Articles 263 and 264 of this Code,
the civil aspects of all cases involving unfair labor
practices, which may include claims for actual, moral,
exemplary and other forms of damages, attorneys fees
and other affirmative relief, shall be under the
jurisdiction of the Labor Arbiters. The Labor Arbiters
shall give utmost priority to the hearing and resolution
of all cases involving unfair labor practices. They shall
resolve such cases within thirty (30) calendar days
from the time they are submitted for decision.
Recovery of civil liability in the administrative
proceedings shall bar recovery under the Civil Code.
No criminal prosecution under this Title may be
instituted without a final judgment finding that an
unfair labor practice was committed, having been first
obtained in the preceding paragraph. During the
pendency of such administrative proceeding, the
running of the period of prescription of the criminal
offense herein penalized shall be considered
interrupted: Provided, however, that the final judgment
in the administrative proceedings shall not be binding
in the criminal case nor be considered as evidence of
guilt but merely as proof of compliance of the
requirements therein set forth. (As amended by Batas
Pambansa Bilang 70, May 1, 1980 and later further
amended by Section 19, Republic Act No. 6715, March
21, 1989)
UNFAIR LABOR PRACTICES
Refers to those acts listed in Articles 248 and 249
of the Labor Code
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 25
Atty. Paulino Ungos
or Acts that transgress the right of employees to self-
organization
Can be committed only against an employee who
exercises or has exercised his right to self-
organization
o Cannot committed against managerial
employees
REASON: Managerial
employees are not accorded the
right to form or join a labor
organization
DEGREE OF PROOF TO ESTABLISH UNFAIR LABOR
PRACTICE
Substantial evidence
o May be direct or circumstantial
A complaint for unfair labor dispute is no ordinary
labor dispute and therefore, it requires a more
thorough analysis, evaluation and appreciation of
factual and legal issues involved
Employers motive should be taken into account
It is for the Labor Arbiter, in the first instance, to
make the determination to weigh the employers
motive in determining the effect on the employees
of managements otherwise equivocal act
The existence of a valid cause for dismissal will
negate the charge of unfair labor practice because
the idea of dismissal by unfair labor practice is
incompatible with dismissal for just cause
CRIMINAL PROSECUTION
The criminal aspect of unfair labor practice cannot
be prosecuted during the pendency of the
administrative proceedings
o Can only commence when there is a final
judgment in the administrative
proceedings declaring that unfair labor
practice has been committed
Final judgment in the administrative proceedings
is not binding in the criminal case
o Cannot be considered an evidence of
guilt
o Considered as proof of compliance with
the procedural requirements for the filing
of the criminal case
CRIMINAL LIABILITY
o Imposed only upon officers and agents of
corporations, associations or
partnerships and officers, members of
governing boards, representatives or
agents or members of labor
organizations who have actually
participated in, authorized or ratified the
unfair labor practices
COMPROMISE
An unfair labor practice charge can be the subject
of a compromise or amicable settlement
o In line with the declared policy of the
State to promote and emphasize

mediation and conciliation as modes of
settling labor or industrial disputes
If settled through compromise, the criminal aspect
can no longer prosper
ACTS NOT CONSTITUTIVE OF UNFAIR LABOR
PRACTICE
1. Dismissal of an employee pursuant to a Closed-
Shop Agreement
2. Dismissal of an employee responsible for the loss
of the goods consigned to another
3. Dismissal by reason of retrenchment
4. Closure of a department due to losses
5. Dismissal of a supervisor for organizing a labor
union composed of men under his supervision
6. Failure to comply with a reinstatement order
7. Refusal to hire security guards who do not post a
bond
8. Refusal to extend CBA benefit due to an honest
mistake
9. Reduction of working days
10. Exercising the option to retire employees
11. Filing of a petition for cancellation of union
registration
12. Exacting a promise from the strikers not to destroy
company property
13. Requiring returning strikers to fill up forms
1. DISMISSAL OF AN EMPLOYEE PURSUANT TO A
CLOSED-SHOP AGREEMENT
An employer who dismisses an employer for
violating the closed-shop provision of a collective
bargaining agreement does not commit unfair
labor practice
REASON: This is one of the matters on which the
matters on which management and labor can
agree in order to bring about harmonious relations
between them and maintain the cohesion and
integrity of their organization
ANG MALAYANG MANGGAGAWA V. ANG
TIBAY (102 PHIL. 669)
FACTS: Ang Tibay and the National Workers
Brotherhood entered into a CBA stipulating that
the Union may recommend to the employer the
dismissal of any union member for any act of
disloyalty to the union. During its effectivity, 22
members organized another union resulting to
their expulsion from the union and demand from
management that said employees be dismissed
from employement, which Ang Tibay complied
with.
ISSUE: Whether or not Ang Tibay is guilty of
unfair labor practice for dismissing the 22
employees
DECISION: No, Ang Tibay is not guilty of unfair
labor practice for dismissing the 22 employees.
RATIO: The stipulation providing that the
employer may dismiss an employee whenever the
union recommends his separation for disloyalty to
the union is one of the matters on which
management and labor can agree in order to bring
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 26
Atty. Paulino Ungos
about harmonious relations between them and
maintain the cohesion and integrity of their
organization. Ang Tibay merely put in force their
agreement.
2. DISMISSAL OF AN EMPLOYEE RESPONSIBLE FOR
THE LOSS OF THE GOODS CONSIGNED TO ANOTHER
Employer had reasonable grounds to believe that
the employee was the person responsible for the
disappearance and loss of certain valuable goods
consigned to employers customer
Nature of the employees participation rendered
him unworthy of the trust and confidence
demanded by his position
Dismissed not only to punish him and deter a
similar behavior on the part of other employees,
but also to protect the reputation of the company
3. DISMISSAL BY REASON OF RETRENCHMENT
REASON: An employer has the legal right to
reduce its personnel due to losses, lack of work or
reduction in the volume of business
LVN PICTURES EMPLOYEES V. LVN
PICTURES INC. (35 SCRA 147)
FACTS: LVN Pictures Inc. was suffering heavy
losses but continued to operate with the
expectation that it would recoup part of its losses
and investments. In order to avoid immediate
closure of business and lay-off of employees, it
proposed to the Union a change in the payment of
salaries and wages from salary basis to pakiao
basis, and subsequently reduction of salaries paid
to monthly paid workers. Both proposals were
rejected by the Union, leaving LVN no choice but
to close its movie production, resulting in the
termination of all personnel employed in the movie
production.
ISSUE: Whether or not LVN is guilty of unfair
labor practice
DECISION: No
RATIO: LVN incurred losses reducing it to a state
of bankruptcy. An employer has the right to lay-off
or dismiss employees because of losses in the
operation of its business, lack of work, and
considerable reduction in the volume of its
business.
4. CLOSURE OF A DEPARTMENT DUE TO LOSSES
PHIL. AM. EMBROIDERIES V. EMBROIDERY &
GARMENTS UNION (26 SCRA 634)
FACTS: In 1956, the Philippine-American
Embroideries Inc. opened its machine-made
department for scalloping handkerchiefs. From the
time it was opened, the company has been
suffering from losses. In 1958, the workers at the
Machine-Made Department were informed about
the losses incurred by the company. In the last
week of October 1958, the workers at the
department organized themselves into a union,
and n November, the Company received their
collective bargaining proposals. On the same day,

the Company announced the opening of the
closure of the department, dismissing all the
members of the union, but announced the opening
of the Knitting Gloves Department where the
dismissed can file their application for employment
so that they can join the company again. The
dismissed employees collectively offered to return
to work but were refused because the Company
wanted the employees to apply individually.
Despite the closure of the Machine-Made
Department, the company continued to make
scalloped handkerchiefs by transferring the pieces
of machinery to various contractors in the
provinces.
ISSUE: Whether or not Philippine-American
Embroideries Inc. is guilty of unfair labor practices
DECISION: No
RATIO: The closure of the Machine-Made
Department was not an act of discrimination or
means of dismissal but the result of continued
losses in operations, which is justified by law. The
machine-made department had been suffering
financial reverses in its operations. The
employees had been forewarned of its closure
unless the situation improved. The presentation of
the collective bargaining proposals could not have
been the motive for the closure of the department
on the same day. There was then no existing labor
dispute.
5. DISMISSAL OF A SUPERVISOR FOR ORGANIZING A
LABOR UNION COMPOSED OF MEN UNDER HIS
SUPERVISION
A supervisor cannot lawfully organize a labor
union composed of men under his supervision
FORTICH V. COURT OF INDUSTRIAL
RELATIONS (93 SCRA 1)
FACTS: VF was employed as Chief Mechanical
Engineer and Plant Superintendent. He organized
the union and became an active member, which
resulted to his dismissal.
ISSUE: Whether or not the company is guilty of
unfair labor practice
DECISION: No
RATIO: Considering that VF was holding a
supervisory position, he cannot lawfully organize a
labor union composed of men under his
supervision. For having done so, he could be
validly dismissed from without the company being
held liable for unfair labor practice.
6. FAILURE TO COMPLY WITH A REINSTATEMENT
ORDER
ARRASTRE SECURITY ASSOCIATION V. OPLE
(127 SCRA 580)
FACTS: The Arrastre Security Association (ASA)
is composed of security personnel in the arrastre
service at South Harbor and were under the
employ of Guacods Marine Terminal and E.
Razon Inc. After the declaration of martial law, the
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 27
Atty. Paulino Ungos
Commissioner of Customs issued a memorandum
declaring the Customs Police to take over the
function of ASA. Consequently, 350 security
guards of ASA were barred from the customs
area. ASA filed a complaint for unfair labor
practice against Guacods and E. Razon, praying
that the 350 security guards of ASA be reinstated
with full backwages.
ISSUE: Whether or not Guacods and E. Razon
are guilty of unfair labor practice
DECISION: No
RATIO: Since the termination of the employment
of the security guards was caused by a
government directive to turn over ASAs function
to the Customs Police, not the union activities of
the security guards, it cannot be unfair labor
practice.
7. REFUSAL TO HIRE SECURITY GUARDS WHO DO
NOT POST A BOND
It is an exercise of a legitimate right to protect its
interests, especially where the guards in question
had previously abandoned a ship they were
guarding without notice thereby exposing the ship
to losses due to theft and pilferage
ASSOCIATED WATCHMEN V. LANTING (107
PHIL. 275)
FACTS: 38 affiliates of Republic Ships Security
Agency, one of the agencies employed by
Macondray & Co. in guarding ships or vessels
arriving in Manila, belong to the Associated
Watchmen and Security Union. On February 18,
1956, the Associated Watchmen and Security
Union declared a strike against 19 shipping firms
in Manila, but eventually expressed their desire to
return to work and maintain the status quo. They
also pressed for the reinstatement of 47 strikers
who claim to have been discharged. Macondray &
Co. expressed its willingness to employ them on
the condition that the security agency post a bond
to respond for any negligence, misfeasance or
malfeasance in the part of any watchmen, which
the agency refused. Consequently, Macondray did
not employ the watchmen.
ISSUE: Whether or not Macondray & Co. is guilty
of unfair labor practice for refusing the watchmen
of Republic Ships Security Agency who did not
post a bond
DECISION: No
RATIO: The refusal to employ the watchmen was
an exercise of a legitimate right to protect its
interests, especially where the guards in question
had previously abandoned a ship they were
guarding without notice thereby exposing the ship
to losses due to theft and pilferage.
8. REFUSAL TO EXTEND CBA BENEFIT DUE TO AN
HONEST MISTAKE
An error in the interpretation of a CBA without
malice or bad faith does not constitute unfair labor
practice

Honest differences in construction may arise in the
actual application of contractual provisions
SINGAPORE AIRLINES V. NLRC (130 SCRA
472)
FACTS: CM was employed by Singapore Airlines
and became a member of Singapore Airlines
Local Employees Association which has CBA with
Singapore Airlines that grants hospitalization and
maternity benefits to employees. She underwent a
caesarean operation and sought reimbursement of
expenses pursuant to the provision on
hospitalization benefits. Singapore Airlines refused
to reimburse on the ground that its liability in
maternity cases is limited to maternity leave
benefit provision in the CBA which does not allow
reimbursement. CM argued that the maternity
leave benefit under the CBA is separate and
distinct from the hospitalization benefits.
ISSUE: Whether or not Singapore Airlines is guilty
of unfair labor practice
DECISION: No
RATIO: Its refusal was not a willful evasion of its
obligations under the CBA but due to an honest
mistake in the belief that the same is not covered
by the CBA. An error in the interpretation of a CBA
without malice or bad faith does not constitute
unfair labor practice.
9. REDUCTION OF WORKING DAYS
Cannot be regarded as union busting, therefore
not unfair labor practice
10. EXERCISING THE OPTION TO RETIRE EMPLOYEES
Not unfair labor practice
11. FILING OF A PETITION FOR CANCELLATION OF
UNION REGISTRATION
Not per se an unfair labor practice
Will only amount to unfair labor practice if it is
established by substantial evidence that the filing
of the petition for cancellation of union registration
was aimed to oppress the Union
12. EXACTING A PROMISE FROM THE STRIKERS NOT
TO DESTROY COMPANY PROPERTY
Not unfair labor practice
Intended not to discourage union membership but
to ensure peace and order in the employers
premises an act of self-preservation
PAGKAKAISANG ITINAGUYOD V. ANG TIBAY
(20 SCRA 45)
FACTS: The Union declared a strike against Ang
Tibay Inc. but was settled the next day and the
strikers agreed to return to work. When the
strikers returned to work, they were required to
sign a pledge not to damage company property
and not to commit acts of reprisal against union
members who did not join the strike. Ang Tibay
took back the strikers except those who did not
refused to make the pledge.
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 28
Atty. Paulino Ungos
ISSUE: Whether or not Ang Tibay is guilty of
unfair labor practice in requiring the strikers to sign
a pledge as a condition for their re-admission
DECISION: No
RATIO: The exaction by the Company from the
strikers returning to work of a promise not to
destroy company property and not commit acts of
reprisal against union members who did not
participate in the strike cannot be considered as
intended to encourage or discourage membership
in the union as it was actually intended to insure
the maintenance of peace and order in the
company premises.
13. REQUIRING RETURNING STRIKERS TO FILL UP
FORMS
Not unfair labor practice
REASON: The purpose is merely to enable the
company to plan their schedule of work and not to
discriminate against them
LAKAS V. MARCELO ENTERPRISES (118
SCRA 422)
FACTS: LAKAS staged two strikes, the second
one resulting to the complete paralysis of the
business of the Marcelo group of companies.
Subsequently, Lakas advised the management
that all striking workers and employees will return
to work upon the same terms and conditions of
employment before the strike. However, upon their
return, the reporting strikers were required to fill up
a certain form to indicate their availability for work
in order that they may be scheduled. Strikers who
filled up the form were accordingly scheduled for
work, while others refused on the ground that it
constituted screening and insisted that they be
admitted back to work without the requirement.
ISSUE: Whether or not Marcelo is guilty of unfair
labor practice in requiring returning strikers to fill
up a form indicating their availability for work,
despite their unconditional offer to return to work
DECISION: No
RATIO: The requirement was only for purposes of
proper scheduling of the start of work for each
returning striker since the businesses of the
Marcelo group of companies cannot resume
operations at once and in the same state or force
before the strikes that paralyzed their operations.
Chapter II
UNFAIR LABOR PRACTICES OF EMPLOYERS
Art. 248. Unfair labor practices of employers. It shall be
unlawful for an employer to commit any of the
following unfair labor practice:
a. To interfere with, restrain or coerce employees
in the exercise of their right to self-
organization;
b. To require as a condition of employment that a
person or an employee shall not join a labor

organization or shall withdraw from one to
which he belongs;
c. To contract out services or functions being
performed by union members when such will
interfere with, restrain or coerce employees in
the exercise of their rights to self-organization;
d. To initiate, dominate, assist or otherwise
interfere with the formation or administration
of any labor organization, including the giving
of financial or other support to it or its
organizers or supporters;
e. To discriminate in regard to wages, hours of
work and other terms and conditions of
employment in order to encourage or
discourage membership in any labor
organization. Nothing in this Code or in any
other law shall stop the parties from requiring
membership in a recognized collective
bargaining agent as a condition for
employment, except those employees who are
already members of another union at the time
of the signing of the collective bargaining
agreement. Employees of an appropriate
bargaining unit who are not members of the
recognized collective bargaining agent may be
assessed a reasonable fee equivalent to the
dues and other fees paid by members of the
recognized collective bargaining agent, if such
non-union members accept the benefits under
the collective bargaining agreement: Provided,
that the individual authorization required
under Article 242, paragraph (o) of this Code
shall not apply to the non-members of the
recognized collective bargaining agent;
f. To dismiss, discharge or otherwise prejudice
or discriminate against an employee for having
given or being about to give testimony under
this Code;
g. To violate the duty to bargain collectively as
prescribed by this Code;
h. To pay negotiation or 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; or
i. To violate a collective bargaining agreement.
The provisions of the preceding paragraph
notwithstanding, only the officers and agents of
corporations, associations or partnerships who have
actually participated in, authorized or ratified unfair
labor practices shall be held criminally liable. (As
amended by Batas Pambansa Bilang 130, August 21,
1981)
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 29
Atty. Paulino Ungos
INTERFERENCE IN THE RIGHT TO SELF-
ORGANIZATION
TEST OF INTERFERENCE
Whether the employer has engaged in conduct
which it may reasonably be said tends to hinder
the free exercise of the employees right to self-
organization
Success or purpose is not the criterion in
determining whether or not a prohibited act
constitutes unfair labor practice
Subjecting employees to a series of questioning
regarding their membership in the union or their
union activities, in such a way as to hamper the
exercise of free choice on their part, constitutes
interference in the right to self-organization
THE TOTALITY OF CONDUCT DOCTRINE
The culpability of an employers remarks are to be
evaluated not only on the basis of their implicit
implications, but should be appraised against the
background of and in conjunction with collateral
circumstances
ILLUSTRATIVE CASES
INSULAR LIFE ASSURANCE CO. LTD EMPLOYEES V.
INSULAR LIFE (37 SCRA 244)
HELD: For an employer to offer reinstatement to striking
employees individually, when they are represented by a
union, is equivalent to an attempt to break a strike since the
employees thus offered reinstatement are unable to
determine what the consequences of working would be.
Indeed it is unfair labor practice for an employer to conduct
individual solicitation of the employees and urge them to
cease union activity or cease striking
SCOTYS DEPARTMENT STORE V. MICALLER (99
PHIL. 762)
FACTS: X was employed as salesgirl in the Scotys
Department Store. She organized a union among the
employees of the store and affiliated it with the NLU. Later,
NLU sent a petition to the store containing demands. X and
other employees were then called by the management for
questioning about the union and their membership, and
were even threatened that the store would be closed if they
do not dissolve the union. X was later on dismissed from
her employment.
ISSUE: Whether or not the act of subjecting X and her co-
employees to a series of questioning regarding their
membership in the union or their union activities constitutes
unfair labor practice
DECISION: Yes
PHILSTEAM V. PMOG (15 SCRA 174)
FACTS: PHILSTEAM received a set of collective
bargaining proposals from PMOG. Immediately thereafter,
PHILSTEAM, apart from requiring PMOG to prove its
majority representation, started interrogating and
investigating its employees to find out directly from them if
they had joined PMOG r authorized PMOG to represent
them. PMOG was then constrained to declare a strike on

the ground of refusal to bargain and other unspecified
unfair labor practices.
ISSUE: Whether or not PHILSTEAM committed unfair labor
practice in interrogating and investigating its employees to
determine whether they had authorized PMOG to act as
their bargaining agent
DECISION: Yes
RATIO: It interferes with or restrains the exercise of the
employees right to self-organization
VISTRANCO V. CIR (19 SCRA 426)
FACTS: VISTRANCOs workers are supplied by the United
Workers and Farmers Association (UWFA) whose men
have regularly worked as laborers of the Company during
every milling season. On November 11, 1955, the
Company refused to engage the services of 139 workers.
They were told by the Company Branch Manager to sever
their connection with UWFA if they wanted to continue
working with the Company.
ISSUE: Whether or not the Company is guilty of unfair
labor practice
DECISION: Yes
RATIO: The act of refusing the admission of 139 workers
unless they sever their connection with UWFA is
tantamount to restraint or interference with the exercise of
the employees right to self-organization.
JUDRIC CANNING V. INCIONG (115 SCRA 887)
FACTS: X and 5 other employees were employees of
Judric Canning who actively engaged themselves in the
organization of a union by soliciting signatures of
employees. When the Company learned of this activity, it
removed the time cards of the said employees from the
rack, and they were not allowed to work.
ISSUE: Whether or not the Company is guilty of unfair
labor practice
DECISION: Yes
RATIO: By dismissing the employees merely because they
solicited signatures needed for the formation of the union,
the Company in effect interfered with and retaliated against
the employees in the exercise of their right to self-
organization
EAST ASIATIC CO. LTD. V. CIR (16 SCRA 820)
FACTS: X was employed by East Asiatic as Secretary. She
became a member of the Asiatic Employees Union and has
been an active member thereof. After which, she has been
called as inefficient, less efficient than when she was not
yet a member of the union. Eventually, she was advised to
resign allegedly because she had become inefficient
because of union activities. She was warned that if she
does not resign, the Company will terminate her services.
When she showed her reluctance to resign, the Company
dismissed her from employment.
ISSUE: Whether or not the Company is guilty of unfair
labor practice in dismissing X from her employment
DECISION: Yes
RATIO: It was motivated by her union activities. Only after
she joined the Union was she called to account or
reproached for something that under other circumstances
might have been overlooked.
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 30
Atty. Paulino Ungos
VISAYAN BICYCLE V. NLU (14 SCRA 5)
FACTS: X and Y were the Vice President and Secretary of
VIBEMWU which later affiliated with the National Labor
Union through the efforts of its Executive Board headed by
X. When this came to the knowledge of the Company, the
officers responsible for the affiliation were warned that if
they will not withdraw their affiliation, they will be dismissed
from their employment. X and Y were later dismissed from
their employment for figuring a fight with two employees
who were hired only within that week. The dismissal was
effected immediately without conducting an investigation. It
was established that X and Y were provoked by the two
employees into a pre-arranged fight pursuant to the
strategy of the Company to give semblance of a lawful
cause for their dismissal
ISSUE: Whether or not the Company is guilty of unfair
labor practice
DECISION: Yes
RATIO: X and Y were in reality dismissed because of their
union activities and not because of their violation of
company rules against fights in the premises or during
working hours. Furthermore, it has been brought about by
the company itself, thru the recent employment of the two
employees who provoked the fight.
YELLOW DOG CONTRACT
An agreement which requires as a condition of
employment, that the person or employee:
1. Declare that he is not a member of a
labor organization
2. Refrain from joining a labor organization
3. Withdraw his membership in a labor
organization
4. Quit his employment upon joining a labor
organization
An unfair labor practice under Article 248(b) of the
Labor Code, hence, null and void for being
contrary to law and public policy
VELEZ V. PAV WATCHMENS UNION
FACTS: PV, the owner, operator and manager of
the Pablo Velez Special Watchmens Agency
asked X whether he is a member of the PAV
Watchmens Union. When X answered in the
affirmative, PV bade him to resign from the Union
and signed a prepared resignation presented to
him. On another occasion, he told another
employee to resign from the union, else he would
have no work assignment. The employee then
signed four copies of a prepared affidavit
renouncing his membership from the union.
ISSUE: Whether or not PV is guilty of unfair labor
practice
DECISION: Yes
RATIO: He required X and Y to resign from the
Union as a condition for their continued
employment
CONTRACTING OUT SERVICES OR FUNCTIONS
PERFORMED BY UNION MEMBERS
Does not per se constitute unfair labor practice

UNFAIR LABOR PRACTICE only when it
interferes with, restrains or coerces employees in
the exercise of their right to self-organization
ORGANIZING, ASSISTING OR SUPPORTING A LABOR
ORGANIZATION
Unfair labor practice
Includes giving of financial or other support to it or
its organizers or supporters
COMPANY UNION or COMPANY-DOMINATED
UNION
o A labor organization, the formation or
administration of which has been initiated
or assisted by the employer
COMPANY-TYPE UNION
o A kind of labor organization composed of
employees in the same company
INDICATIONS OF A COMPANY-DOMINATED UNION
1. Several employees were forced by the officers of
the company into joining a union
2. No union member had been dismissed by the
company despite the alleged retrenchment policy
which resulted to the dismissal of other employees
who are officers and members of another union
3. After dismissing the members of the union on the
ground of retrenchment, the company engaged
the services of several laborers
PREJUDICIAL QUESTION
A complaint for unfair labor practice charging the
one or more unions participating in the certification
election are being aided or controlled by the
employer, may be considered a prejudicial
question in a certification election proceeding
The unfair labor practice case should first be
decided before conducting the certification
election
REASON: To prevent the selection of a company-
dominated union
DISESTABLISHMENT
An order requiring an employer to withdraw its
recognition of a company-dominated union as the
employees collective bargaining agent and a
bona fide and sufficient communication to the
employees of such withdrawal of recognition
DISMISSAL OR DISCRIMINATION BECAUSE OF
TESTIMONY
It is unfair labor practice to dismiss, discharge, or
otherwise prejudice or discriminate against an
employee for having given or being about to give
testimony under the Labor Code
Testimony should relate to matters involving the
exercise of the right to self-organization
o E.g. testimony in another unfair labor
practice case or certification election
proceeding
REASON: Unfair labor practice is a transgression
of the right of employees to self-organization
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 31
Atty. Paulino Ungos
Art. 248(f) equally applies to the dismissal of an
employee whose brother has given or is about to
give testimony against an employer
This is in line with the spirit and purpose of the law
to assure the absolute freedom of employees to
establish labor organizations and prefer charges
before the proper organs of the Government for
violation of our labor laws
PACC FACTORY WORKERS UNION V. PHIL.
AM. CIGAR (7 SCRA 375)
FACTS: X filed a complaint for unfair labor
practice against Philippine American Cigarette
Mfg. Co. Upon learning that a case has been filed,
the manager of the Company advised the
president of the Union that if X will not withdraw
his charge, his brother, Y will be dismissed. X did
not withdraw the case, hence, the company
dismissed Y from his employment
ISSUE: Whether or not the company is guilty of
unfair labor practice
DECISION: Yes
RATIO: It is true that the one dismissed was Y,
the brother of the employee who filed the case
against the Company, but this does not mean that
the Company is no longer guilty of unfair labor
practice. If dismissal of an employee who files a
case against his employer constitutes unfair labor
practice, with greater reason should it be when the
employer dismisses an employee by reason of the
case filed by his brother.
ITUGON-SUYOC MINES VS. BALDO (12 SCRA
599)
FACTS: B who was employed by Itugon-Suyoc
Mines as miner was given a 30-day notice of
termination on the ground that his services were
no longer needed by the company. When this was
served, there was pending certification election
case filed by Sangilo-Itogon Workers Union, of
which B was a member. B then brought the matter
of separation to the grievance committee. While
the case was pending in the committee, the Plant
Engineer asked B not to testify in the hearing of
the certification election case so that he would be
reinstated to his job. B testified against the
Company resulting in the dropping of his plea for
reinstatement
ISSUE: Whether or not the Company is guilty of
unfair labor practice
DECISION: Yes
RATIO: Considering that Bs case was pending
before the grievance committee when he was
asked not to testify, and soon after he had testified
adversely to the Company, his case was dropped
by the grievance committee. It can be concluded
that the Company had much to do with the
dropping of the case, and thus B was never
reinstated to his work. B has also not committed
any serious offense that would warrant his
dismissal from service.

H.G. HENARES & SONS V. NLU (3 SCRA 765)
FACTS: F requested another employee to take
over his shift in order to enable him to testify, as
he did testify, in the unfair labor practice case filed
against the Company by one of its employees.
The arrangement was without the Companys prior
approval. When Fs immediate superior learned of
the unauthorized exchange of shift, he was
recommended for dismissal which was approved.
F was dismissed while the other employee was
merely suspended.
ISSUE: Whether or not the Company was guilty of
unfair labor practice
DECISION: Yes
RATIO: There is more reason to believe that F
was dismissed from work because he testified
unfavorably against the Company in another unfair
labor practice case, as he was dismissed barely
three days after he testified. It is hardly convincing
to say that this trivial infraction could have been
the immediate cause of his discharge. His action
does not by itself show any wanton disregard of
the company rules.
VIOLATION OF THE DUTY TO BARGAIN
COLLECTIVELY
DUTY TO BARGAIN COLLECTIVELY
The performance of a mutual obligation to meet
and convene promptly and expeditiously in good
faith for the purpose of negotiating an agreement
with respect to wages, hours of work and all other
terms and conditions of employment including
proposals for adjusting any grievances or
questions arising under such agreement and
executing a contract incorporating such
agreement if requested by either party, but such
duty does not compel any party to make any
concession
Neither party to the collective bargaining
agreement shall terminate nor modify such
agreement during its lifetime
o Either party can serve a written notice to
terminate or modify the agreement at
least 60 days prior to its expiration
o Both parties must keep the status quo
and 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
ESSENTIAL ELEMENTS OF THE DUTY TO BARGAIN
Employer-employee relationship
WITHOUT EMPLOYER-EMPLOYEE
RELATIONSHIP no duty to bargain
o Refusal to bargain is not unfair labor
practice
WITH EMPLOYER-EMPLOYEE RELATIONSHIP
the duty to bargain collectively will arise only if
the labor organization which seeks to collectively
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 32
Atty. Paulino Ungos
bargain represents the majority of the employees
in the bargaining unit
o Without proof of majority representation,
the employer can validly refuse to
collectively bargain
Negotiating or attempting to negotiate with
INDIVIDUAL employees in connection with
changes in the collective bargaining agreement is
a violation of the duty to bargain collectively
o REASON: An employer is bound to
bargain, not individually, but collectively
and only with the certified collective
bargaining agent of the employees
Dismissing union members in order to ensure the
defeat of the union in the certification election is a
violation of the duty to bargain
o REASON: It is a scheme to avoid
bargaining with the union
ILLUSTRATIVE CASES
INSULAR LIFE ASSURANCE CO. LTD. EMPLOYEES V.
INSULAR LIFE (37 SCRA 244)
FACTS: The Insular Life Assurance Co Ltd. Employees
Association submitted to the Company its proposals for the
renewal of the collective bargaining agreement. Collective
bargaining negotiations were conducted but a deadlock
ensued, resulting to a strike. The following day, the
Company sent letters to individual strikers offering them
reinstatement with promise of comfortable cots, free coffee
and occasional movies, overtime pay and arrangements for
their families.
ISSUE: Whether or not the Company violated its duty to
bargain collectively
DECISION: Yes
RATIO: It is unfair labor practice for an employer operating
under a collective bargaining agreement to negotiate or
attempt to negotiate with his employees individually in
connection with changes in the agreement. The basis is
that although the Union is on strike, the employer is still
under obligation to bargain with the Union as the
employees bargaining representative.
SAMAVIM V. NORIEL (98 SCRA 507)
FACTS: SAMAVIM requested the Via Mare Catering
Services to enter into a collective bargaining with it. Instead
of acceding to the request, Via Mare terminated the
services of four union members. SAMAVIM then filed a
Notice of Strike on the ground of harassment of union
members. Conciliation meetings were held by the Bureau
of Labor Relations but Via Mare refused to negotiate a
collective bargaining agreement. As a result of conciliation
efforts, the parties agreed to hold a consent election among
the employees to determine whether the employees desire
to be represented by a Union. Before the parties could
meet to set the date of election, Via Mare terminated 73
union members and employed other persons to replace
them.
ISSUE: Whether or not Via Mare violated its duty to bargain
collectively, so as to be held liable for unfair labor practice
DECISION: Yes

RATIO: The dismissal of the union members is highly
suspect as a means to frustrate the intention of Via Mare
not to bargain collectively with SAMAVIM.
PAYING NEGOTIATION FEES OR ATTORNEYS FEES
TO THE UNION
Unfair labor practice
VIOLATION OF THE COLLECTIVE BARGAINING
AGREEMENT
Must be gross in character
A simple violation of the collective bargaining
agreement is considered an ordinary grievance to
be resolved under the grievance machinery
provided for in the collective bargaining agreement
MEANING OF GROSS VIOLATION
Flagrant and/or malicious refusal to comply with
the ECONOMIC PROVISIONS of the collective
bargaining agreement
VIOLATION ARISING FROM AN HONEST MISTAKE
Not unfair labor practice
REASON: Honest differences in construction may
arise in the actual application of a contractual
provision, particularly if the stipulation is
susceptible to varying interpretation
DISCRIMINATION
One is denied privileges given to the other under
identical or similar conditions
Not unfair labor practice per se
Becomes unfair labor practice only when it is
intended to encourage or discourage membership
in any labor organization
Does not have to be against a specific employee
or employees but may be in favor of a union
ILLUSTRATIVE CASES
WISE AND CO., INC. V. WISE & CO., INC. EMPLOYEES
UNION (178 SCRA 536)
FACTS: Wise & Co. introduced a profit sharing scheme for
its managers and supervisors. When the Union learned
about the scheme, it requested Management to extend
such benefit to their members, but Management denied the
request on the ground that it had to adhere strictly to the
collective bargaining agreement. In the meantime, the
Management and the Union sat down to negotiate the
renewal of the collective bargaining agreement. The
negotiations resulted in a deadlock. Thereafter, the
Management distributed the profit sharing benefit not only
to managers and supervisors but also to all non-union rank-
and-file employees.
ISSUE: Whether or not the grant of profit sharing benefits
to employees not covered by the collective bargaining
agreement is discriminatory against employees who are
covered by the collective bargaining agreement
DECISION: No
RATIO: The situation covered by the collective bargaining
agreement is different and distinct from the employees not
covered by the collective bargaining agreement. Unlike the
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 33
Atty. Paulino Ungos
union employees, the non-union employees do not derive
and enjoy the benefits under the collective bargaining
agreement. There can be no discrimination where the
employees concerned are not similarly situated.
RIZAL CEMENT V. MADRIGAL (10 SCRA 831)
FACTS: The Rizal Cement Workers Union staged a strike
at the plant of the Company in Biangonan, Rizal. The
following day, the warehouseman at the Bodega Tanque
received a call from the Manager of the Company informing
him that the Union has staged a strike at the Binangonan
Plant and advising him to take precautionary measures in
protecting the properties of the company stored at the
Bodega Tanque because the strikers caused damage to
the factory in Binangonan and sabotage may occur. For
this reason, he was advised by the manager to request the
members of the Union to stay meanwhile outside the
premises of the Bodega Tanque. Thus, when the workers
arrived for work, the other members of the Union were not
allowed to enter the gate. Only non-union members were
allowed to enter.
ISSUE: Whether or not the Company is guilty of unfair
labor practice by discrimination
DECISION: No
RATIO: The refusal on the part of the Company to allow
the union members to work and the requirement that they
stay out of the premises in the meantime was borne out of
the Companys justified apprehension and fear that
sabotage might be committed in the warehouse where the
products, machinery and spare parts were stored, as has
been the case in Binangonan. It has never been shown that
the act of the Company was intended to induce the union
members to renounce their union membership or as a
deterrent for non-members to affiliate therewith, nor as a
retaliatory measure for activities in the union or in the
furtherance of the cause of the union.
INSULAR LIFE ASSURANCE CO. LTD. V. INSULAR
LIFE (37 SCRA 244)
FACTS: The Insular Life Assurance Co. Ltd. Employees
Association went on strike. Because of the writ of
preliminary injunction as well as the ultimatum of the
Company for the strikers to return to their jobs or else be
replaced, the striking employees called off their strike and
returned to work. However, before readmitting the strikers,
the Company required them to secure clearances from the
City Fiscals Office. They were also screend by a
management committee. The screening committee initially
rejected 83 strikers with pending criminal charges.
However, all non-strikers with pending criminal charges
which arose from the violent incident during the strike were
readmitted immediately without being required to secure
clearances from the City Fiscals Office. When practically
all strikers had secured clearances from the fiscals office,
the Company readmitted some but refused t admit 34
strikers who were most active in the strike, on the ground
that the acts were inimical to the interest of the Company.
ISSUE: Whether or not the Company is guilty of unfair
labor practice by discrimination
DECISION: Yes

RATIO: It did not merely discriminate against all the strikers
in general they separated the active from the less active
unionists on the basis of their militancy, or lack of it, on the
picket lines. Discrimination undoubtedly exists where the
union activity of the hired strikers had been less prominent
than that of the strikers who were denied reinstatement.
UNION SECURITY AGREEMENTS
The legal basis for entering into a union security
arrangement is Article 248(e) of the Labor Code
TYPES OF UNION SECURITY AGREMENTS
1. CLOSED SHOP
o The employer binds himself to hire only
members of the contracting union who
must continue to remain members in
good standing to keep their jobs
2. UNION SHOP
o The employer is allowed to hire non-
members of the contracting union on
condition that they should join the
contracting union within a specified
period of time and must continue to
remain members in good standing to
keep their jobs
3. MAINTENANCE OF MEMBERSHIP
o Requires those who are members of the
contracting union at the time of the
execution of the collective bargaining
agreement to maintain their membership
in good standing during the lifetime of the
collective bargaining agreement as a
condition of continued employment
4. AGENCY SHOP
o Does not require union membership but
only support from the employees within
the bargaining unit in the form of agency
fees, as a condition of continued
employment
5. PREFERENTIAL HIRING
o The members of the contracting union
are given preference in engagement, all
circumstances being equal, and for them
to maintain their membership in good
standing during the lifetime of the
collective bargaining agreement as a
condition of continued employment
LIMITATIONS
A closed shop agreement cannot be enforced
against:
1. Employees who are already members of
another union at the time of the signing of the
collective bargaining agreement
2. Employees whom the union refused
admission to membership without any
reasonable ground therefor
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 34
Atty. Paulino Ungos
3. Employees who are members of religious
sects which prohibit their members from
joining a labor organization
CONSTRUCTION OF UNION SECURITY AGREEMENTS
Strictly construed and any doubt must be resolved
against its existence
The stipulation to that effect must be clear and
unequivocal as to leave no room for doubt thereon
Applies to closed shop, union shop and
maintenance of membership agreement
BINDING EFFECT
A union security arrangement is binding even if
the employees are not aware of such an
agreement
ENFORCEMENT
To justify the dismissal of an employee pursuant
to a closed shop stipulation, the validity of said
stipulation must first be shown
To dismiss an employee for breach of a union
security arrangement, the employer should not
merely rely on the request of the union. The
employer should conduct an investigation of its
own because the employee sought to be
dismissed is entitled to due process of law
AGENCY SHOP
Article 248(e)
Applies only to non-union members who belong to
the collective bargaining unit
Can be enforced only if and when the union
covered by the bargaining unit accepts the
benefits under the collective bargaining
agreement.
Individual check-off authorization is not required to
check-off agency fees
CHAPTER 3
UNFAIR LABOR PRACTICES OF LABOR
ORGANIZATIONS
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 rights to self-organization.
However, a labor organization shall have the
right to prescribe its own rules with respect to
the acquisition or retention of membership.
(b) To cause or attempt to cause an employer to
discriminate against an employee, including
discrimination such organization has been
denied or to terminate an employee on any
ground other than the usual terms and
conditions under which membership is made
available to other members;

(c) To violate the duty, or refuse to bargain
collectively with the employer, provided it is
the representative of the employees;
(d) To cause or attempt to cause an employer to
pay or deliver or agree to pay or deliver any
money or other things of value, in the nature of
an exaction, for services which are not
performed, including the demand for fee for
union negotiations;
(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; or
(f) To violate a collective bargaining agreement
The provisions of the preceding paragraph
notwithstanding, only the officers, members of
governing boards, representatives or agents or
members of labor organizations who have actually
participated in, authorized or ratified unfair labor
practices shall be held criminally liable.
COMMENT:
1. Coercion/Restraint on the Right to Self-
Organization
This is exemplified by a labor organization who
recommends the dismissal from employment of an
employee who cancels his membership with the union
during the freedom period. During the freedom period,
a union member is free to exercise his right to self-
organization. He may therefore resign from the
contracting union or join another union of his choice
without being subjected to sanctions. The reason is
that the union security agreement is deemed
suspended during the freedom period.
A labor organization also commits unfair labor
practice if it expels a union member who initiates a
petition for audit of union funds considering that union
members are entitled to a full and detailed reports from
their officers of all financial transactions.
MD Transit v. De Guzman
7 SCRA 726
FACTS: 3 members of the MD-CAM Local 3 PTGWO
secured the signatures of their co-employees to a
petition to the DOLE for an audit of the mutual aid fund
of the Union. The petition for audit was granted and
took place on October 27, 1958, where it was
discovered that the mutual aid fund was short of P22k.
The matter was referred to the City Fiscal of Quezon
City for appropriate action. The President of the Union
suspended the 3 members and several days later, the
BOD expelled them from the Union. Is the Union guilty
of ULP?
HELD: The Union is guilty of ULP. The suspension and
subsequent expulsion of the union members is ULP
because it was motivated by the charges they preferred
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 35
Atty. Paulino Ungos
against the officers of the Union which led to the
discovery of the shortage in the Mutual Aid Fund.
2. Causing an Employer to Discriminate Against an
Employee
It is unfair labor practice for a labor organization,
its officers, agents or representatives to:
(a) Cause or attempt to cause an employer to
discriminate against an employee;
(b) Discriminate against an employee with
respect to whom membership in such
organization has been denied; or
(c) Terminate an employee on any ground other
than the usual terms and conditions under
which membership is made available to other
members.
Salunga v. Court of Industrial Relations
21 SCRA 216
FACTS: S tendered his resignation from the Union. The
Union transmitted the resignation letter to the company
with a request for implementation of the close-shop
agreement. Upon being informed by the Company that
his resignation would result in the termination of his
employment, S wrote the Union a letter withdrawing his
resignation. The Union refused to honor the withdrawal
because of S critical attitude towards certain measures
taken by the Union. Instead, the Union pressed the
company to dismiss S on the basis of the closed-shop
agreement. The Company was then constrained to
dismiss S. Is the Union guilty of ULP?
HELD: The Union is guilty of ULP. The Union cannot
validly invoke the close-shop agreement to justify the
dismissal of S whom it refused to re-admit as member
without any reasonable ground. Having been denied
readmission into the Union and having been dismissed
from service owing to an unfair labor practice on the
part of the Union, S is entitled to reinstatement as
member of the Union and as employee.
3. Violation of the Duty to Bargain Collectively
It is ULP on the part of a labor organization, its
officers, agents or representatives to violate the duty to
bargain collectively or refuse to bargain collectively with
the employer, provided it is the representative of the
employees.
If there is a pending representation issue, it is ULP
on the part of a labor organization to stage a strike to
compel the management to sit down with it for collective
bargaining.
LakasngManggagawangMakabayan v. Marcelo
Enterprises
HELD: The court held that there existed no duty to
bargain collectively with complainant LAKAS on the part
of said companies. Proceeding from this basis, it follows
that all acts instigated by complainant LAKAS such as

the filing of the Notice of Strike on June 13, 1967 and
the two strikes of September 4, 1967 and November 7,
1967 were calculated, designed and intended to compel
the respondent Marcelo Companies to recognize or
bargain with it notwithstanding that it was an uncertified
union, or in case of respondent Marcelo Tire and
Rubber Corporation, to bargain with it despite the fact
that the MUEWA of PaulinoLazaro was already certified
as the sole bargaining agent in said respondent
company. These concerted activities executed and
carried into effect at the instigation and motivation of
LAKAS are all illegal and violative of the employers
basic right to bargain collectively only with the
representative supported by the majority of its
employees in each of the bargaining units.
4. Featherbedding
Featherbedding is the act of causing or attempting
to cause an employer to pay or deliver any money or
other things of value for services which were not
performed or not to be performed.
5. Demanding/Accepting Negotiation Fees
It is ULP for a labor organization, its officers
agents, or representatives 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.
If the labor organization asks an employer to give
negotiation fees or attorneys fees, then it is guilty of
ULP, regardless of whether the proposal was accepted
by the employer. If the employer agrees to the proposal
and gives negotiation or attorneys fees to the labor
organization, then it is equally guilty of ULP under Art.
248(h).
If the labor organization did not ask for negotiation
fees or attorneys fees, but nevertheless accepted such
fees from an employer, then it is likewise guilty of ULP
under Art. 249(e), while the employer would be guilty
under Art. 248(h).
6. Violation of Collective Bargaining Agreement
It is ULP for a labor organization, its officers,
agents or representatives to violate a CBA.
To constitute ULP, the breach of CBA must be
gross in character, i.e., flagrant and/or malicious refusal
to comply with the economic provisions of the CBA.
Thus, a strike staged by a labor organization in violation
of the no-strike stipulation in the CBA is not ULP but it
will be adjudged as an illegal strike.
TITLE VII
COLLECTIVE BARGAINING AND ADMINISTRATION
OF AGREEMENTS
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 36
Atty. Paulino Ungos
ART. 250. Procedure in Collective Bargaining. The
following procedures shall be observed in collective
bargaining:
(a) When a party desires to negotiate an
agreement, it shall serve a written notice
upon the other party with a statement of
its proposals. The other party shall
make a reply thereto not later than 10
calendar days from receipt of such
notice.
(b) Should differences arise on the basis of
such notice and reply, either party may
request for a conference which shall
begin not later than 10 calendar days
from the date of request.
(c) If the dispute is not settled, the Board
shall intervene upon request of either or
both parties or at its own initiative and
immediately call the parties to
conciliation meetings. The Board shall
have the power to issue subpoenas
requiring the attendance of the parties
to such meetings. It shall be the duty of
the parties to participate fully and
promptly in the conciliation meetings
the Board may call.
(d) During the conciliation proceedings in
the Board, the parties are prohibited
from doing any act which may disrupt or
impede the early settlement of the
disputes; and
(e) The Board shall exert all efforts to settle
disputes amicably and encourage the
parties to submit their case to a
voluntary arbitrator.
COMMENT:
1. Collective Bargaining
The term collective bargaining denotes in
common usage as well as in legal terminology,
negotiations toward a CBA. Collective bargaining
is one of the democratic frameworks under the
Labor Code designed to stabilize the relation
between labor and management and to create a
climate of sound and stable industrial peace.
Collective bargaining is not equivalent to
an adversarial litigation where rights and
obligations are delineated and remedies applied. It
is simply a process of finding a reasonable
solution to a conflict and harmonizing opposite
positions into a fair and reasonable compromise.
In the absence of grave abuse of
discretion, the disposition of the labor agency will
not be disturbed in a certiorari proceeding.
2. The Collective Bargaining Process
The collective bargaining process
technically starts when the employees within an

appropriate bargaining unit organize themselves
into a labor organization.
After obtaining registration with the
DOLE, the labor organization either requests the
employer for voluntary recognition or files a
petition for certification election.
After, the labor organization serves its
written proposals to the employer, after which the
employer submits its written counterproposals
within 10 days from receipt of the proposals.
Collective bargaining negotiations then
follow.
2.1 Jurisdictional Preconditions of Collective
Bargaining
(a) proof of majority representation on the
part of the labor organization.
(b) voluntary recognition by the employer
or certification of the labor organization
as the collective bargaining
representative of the employees
covered by the bargaining unit; and
(c) Demand to bargain under Art. 250(a) of
the Labor Code.
3. Multi-Employer Bargaining
Legitimate labor organizations and
employers may agree in writing to come together
for collective bargaining purposes under the
following conditions:
(a) The legitimate labor organizations
must be incumbent exclusive
bargaining agents;
(b) The employers must have counterpart
legitimate labor organizations who are
incumbent bargaining agents; and
(c) The legitimate labor organizations of
employer units must consent to multi-
employer bargaining.
Each employer or concerned labor
organization shall express in writing its willingness
or unwillingness to participate in multi-employer
bargaining, addressed to its exclusive bargaining
agent or employer. Negotiations may commence
only with regard to employers and labor
organizations that consent to participate in multi-
employer bargaining.
3.1. Pre-Requisites of Multi-Employer Bargaining
Legitimate labor organizations who desire to
collectively negotiate with the employers shall execute
among themselves awritten agreement containing the
following:
(a) Names of the labor unions who desire to
avail of multi-employer bargaining;
(b) Names of each labor union in the employer
unit;
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 37
Atty. Paulino Ungos
(c) Statement that each of the labor unions are
the incumbent exclusive bargaining agents of
their respective employer units;
(d) Duration of the collective bargaining
agreements, if any, between each labor
organization and their respective employers.
3.2 Procedure
Legitimate labor unions who desire to bargain with
multi-employers shall send a written notice to each
employer concerned. The written notice shall be
accompanied by any of the following documents:
(a) written agreement among the labor
organizations as regards their desire for
multi-employer bargaining; or
(b) certificates of registration of the federation,
national union or industry union.
Employers who desire to engage in multi-employer
bargaining shall send to each of their counterpart
legitimate labor unions a written notice indicating the
following:
(a) Names of employers who desire to avail of
multi-employer bargaining;
(b) Their corresponding legitimate labor
organizations;
(c) Statement that each corresponding legitimate
labor organization is an exclusive bargaining
agent;
(d) The duration of the current collective
bargaining agreement, if any, of each
employer with the counterpart legitimate labor
organization.
4. Remedies in Case of Deadlock
(a) Call upon the National Conciliation
and Mediation Board to assist them
in arriving at an amicable
settlement;
(b) Submit the matter for compulsory
arbitration by filing a complaint with
the National Labor Relations
Commission;
(c) Submit the matter for resolution by a
coluntary arbitrator; or
(d) Declare a strike or lockout.
Art. 251. Duty to Bargain Collectively in the Absence of
Collective Bargaining Agreement. In the absence of an
agreement or other voluntary arrangement providing
for a more expeditious manner of collective bargaining,
it shall be the duty of the employer and the
representative of the employees to bargain collectively
in accordance with the provisions of this Code.
COMMENT:
1. The Duty to Bargain Collectively A
Mutual Obligation
One of the major aims of the law is to
make the process of collective bargaining on
of the most effective means for ensuring
harmonious labor-management relations. It

should be noted, however, that while the duty
to bargain collectively is a mutual obligation
of both employer and employees, the
employer is not under obligation to initiate the
collective bargaining negotiations.
2. Essential Elements of the Duty to Bargain
Collectively
The duty to bargain collectively arises
only when the union which seeks to
represent the collectively bargaining unit is:
(a) a legitimate labor organization
(b) composed of employees of the
supposed employer; and
(c) chosen or designated by the majority
of the employees within the
bargaining unit as their collective
bargaining representative.
2.1. Union Must Be a Legitimate Labor
Organization
If the labor organization is not registered
with the DOLE, the duty to bargain collectively
does not exist because the labor organization
does not have the legal personality to act as the
collective bargaining representative.
2.2. Union Must be Composed of Employees
The duty to bargain collectively arises
only between employer and its employees.
Where neither party is an employer nor an
employee of the other, the duty to bargain
collectively does not exist.
Singer Sewing Machine Company v. Drilon
193 SCRA 270
The court finds that since private respondents 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. Accordingly, there is o constitutional
and legal basis for their union to be granted their
petition for direct certification.
Allied Free Workers v. Cia. Maritima
19 SCRA 258
FACTS: MARITIMA is a local corporation
engaged in the shipping business. It entered into
an ARRASTRE AND STEVEDORING
CONTRACT with AFWU, a legitimate labor
organization. MARITIMA complained of
unsatisfactory and inefficient service by the
laborers. To remedy the situation, AFWU was
forced to hire extra laborers. AFQU then
presented to MARITIMA a written proposal for a
CBA. MARITIMA did not reply. Thereafter, AFWU
filed a petition praying that it be certified as the
sole and exclusive bargaining agent. MARITIMA
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 38
Atty. Paulino Ungos
terminated the contract with AFWU. AFWU filed a
complaint for ULP for refusal to bargain. Is
MARITIMA duty bound to bargain with AFWU?
HELD: Under the law, the duty to bargain
collectively arises only between the employer and
its employees. Where neither party is an employer
nor an employee of the other, no such duty would
exist. MARITIMA was not the employer of the
workers of AFWU. Under the ARRASTRE AND
STEVEDORING CONTRACT, AFWU was an
independent contractor of MARITIMA.
2.3 Union Must Be Recognized or Certified as
Bargaining Agent
If the union has not been designated or
selected by the majority of the employees in the
bargaining unit as their collective bargaining
representative, the duty to bargain does not exist.
If two or more unions claim to hold the
majority of the employees in the bargaining unit,
the duty to bargain does not exist until the issue
on majority representation is finally settled.
3. No Duty to Bargain With Minority
The duty to bargain does not exist with
regard to a minority group of employees. Neither
does the duty to bargain exist with regard to
individual employees.
It should be noted, however, that while
the law prohibits individual bargaining or
bargaining with a minority group of employees,
there is no prohibition against an employer sitting
down with an individual employee or a group of
employees for the purposes of hearing and
discussing their grievances.
ART. 252. Meaning of the 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 agreements 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.
COMMENT:
1. The Essence of the Duty to Bargain
Collectively
The duty to bargain collectively does not
impose upon the employer the obligation to
initiate contract negotiation. Neither does it
compel the parties to agree to a proposal or
to make any concession, much less to reach
an agreement. All that is required is for the
parties to approach the negotiations with an

open mind and exert reasonable effort to
reach a common ground of agreement.
Proposals, if unacceptable, should be
matched with counterproposals.
To offer the union a contract saying
Take it or leave it is not in consonance with
good faith bargaining. Feigning negotiations
through empty gestures is not bargaining in
good faith.
2. The Philosophy of Collective
Responsibility
An employer who bargains in good faith
is entitled to rely on the promises and
agreements of the union representatives with
whom he must deal under the compulsion of
law and contract.
ART. 253. Duty to Bargain Collectively When There Exists
a Collective Bargaining Agreement. When there exists 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 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.
COMMENT:
1. Duty to Bargain After Execution of CBA
The duty to bargain does not end with
the execution of the CBA. It is a continuous
process. This does not mean, however, that
either party can ask for modification of the
collective bargaining agreement at any time
during its effectivity.
The continuous process means that the
parties, during the term of the agreement, are
mutually obliged to meet and confer promptly
and expeditiously and in good faith for the
purpose of adjusting any grievance or
question arising under the CBA.
After the execution of the CBA, the duty
to bargain collectively obliges the parties:
(a) not to terminate or
modify the CBA
during its lifetime;
(b) to ask for modification
of the CBA only
during the 60-day
period prior to its
expiration date; and
(c) to observe the terms
and conditions of the
CBA during the 60-
day period and until a
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 39
Atty. Paulino Ungos
new agreement is
reached.
2. The Freedom Period
The freedom period is the 60-day
period prior to the expiration of the collective
bargaining agreement.
It is called the freedom period because
it is the time when the bargaining agent can
validly serve notice to renegotiate the
existing CBA.
It is the time when a union member can
validly resign from the union and the time for
a local union to disaffiliate from its mother
federation without being subjected to
sanctions.
It is also the time for challenging the
majority status of the incumbent collective
bargaining agent through a petition for
certification election.
3. The Hold-Over Principle
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 until a new agreement is reached.
ART. 253-A. Terms of a Collective Bargaining Agreement. -
Any Collective Bargaining Agreement that the parties
may enter into shall, insofar as the representation
aspect is concerned, be for a term of 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 60-day period immediately before
the date of expiry of such five year term of the CBA. All
other provisions of the CBA shall be renegotiated not
later than 3 years after its execution. Any agreement on
such other provisions of the CBA entered into within 6
months from the date of 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 effectivity
thereof. In case of a deadlock in the renegotiation of
the CBA, the parties may exercise their rights under
this Code.
COMMENT:
1. Collective Bargaining Agreement
Collective bargaining agreement is a
contract by and between an employer and
the collective bargaining representative of the
employees within an appropriate bargaining
unit, concerning wages, hours of work, and
all other terms and conditions of
employment. It is the law of the plant.

The primary purpose of the CBA is the
stabilization of labor-management relations in
order to create a climate of a sound and
stable industrial peace.
2. Coverage of a Collective Bargaining
Agreement
A CBA applies to and is binding on all
employees covered by the collective
bargaining unit whether they be union
members or not. To accord the benefits
under the CBA only to union members
without any valid reason would constitute
undue discrimination against non-members.
3. Construction of a Collective Bargaining
Agreement
A CBA is not an ordinary contract but
one impressed with public interest. As such it
must be construed liberally rather than
narrowly and technically.
Only provisions embodied in the CBA
may be interpreted or enforced. The Minutes
of the Collective Bargaining Negotiations
cannot be invoked because it does not form
part of the CBA. The Minutes merely reflects
the proceedings and discussions undertaken
in the collective bargaining process.
4. Term of a Collective Bargaining
Agreement
The term of a CBA, insofar as the
representation aspect is concerned, is 5
years reckoned from the date of its effectivity.
During the 6-year period, the majority status
of the incumbent collective bargaining agent
cannot be challenged except during the last
60 days of the 5-year period.
5. Renegotiation Within the 5-Year Period
Except the representation status of the
incumbent bargaining agent, all provisions of
the CBA, whether economic or non-
economic, may be renegotiated not later than
3 years after its execution.
5.1. Effectivity of the Renegotiated
Agreement
The effectivity of the renegotiated CBA
will depend upon the following situations:
(a) If the parties are able to come to an
agreement within 6 months from
rd
expiry of the 3 year of the CBA,
the effectivity of the renegotiated
agreement shall retroact to the day
immediately following the expiry of
rd
the 3 year.
(b) If the agreement was arrived at after
6 months of negotiations, the
parties not anybody else are
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 40
Atty. Paulino Ungos
given the discretion to fix the
effectivity thereof.
(c) If 6 months have elapsed and the
negotiations result in a deadlock,
and to resolve the impasse, the
matter is submitted for arbitration,
the effectivity of the renegotiated
CBA shall be the date when the
arbitrator renders his final decision.
Manila Electric v. Quisumbing
302 SCRA 173
FACTS: On September 7, 1995, MEWA informed
MERALCO of its intention to re-negotiate the terms and
conditions ofhteir existing 1992-1997 CBA covering the
remaining period of 2 years starting December 1, 1995 to
November 30, 1997. Negotiations proceeded but it resulted
in a deadlock. MEWA filed a notice of strike against
MERALCO. The Secretary of Labor and Employment
assumed jurisdiction over the disputes and on December
28, 1996, an Order was issued resolving the controversies.
The effectivity of the CBA was set to retroact to December
1, 1995. Was the Secretary of Labor and Employment
correct in retroacting the effectivity of the renegotiated
CBA?
HELD: There is no sufficient legal ground to justify
the retroactive application of the renegotiated agreement.
Significantly the law does not specifically cover the situation
where 6 months have elapsed but no agreement has been
reached with respect to effectivity. The parties must
maintain the status quo and must continue in full force and
effect the terms and conditions of the existing agreement
until a new agreement is reached. Another legal principle
that should apply is that in the absence of an agreement
between the parties, then an arbitrated collective
bargaining agreement takes on the nature of any judicial or
quasi-judicial award; it operates and may be executed only
retrospectively unless there are legal justifications for its
retroactive application. The agreement should be effective
for a term of 2 years counted from December 28, 1996
(Date when the Sec of DOLE denied the parties motion for
reconsideration) up to December 27, 1999.
6. Ratification of Collective Bargaining
Agreement
The CBA will be deemed ratified if it is
approved by the majority of the employees
covered by the bargaining unit. Without
ratification the CA cannot be registered.
Ratification of a CBA does not validate a
void election of union officers because what
the membership ratified were the terms of the
new CBA and not the issue of union
leadership.
7. Ten-Year Suspension of CBA Valid
Under exceptional conditions, the parties
can agree to suspend their CBA. The right to

free collective bargaining includes the right to
suspend it.
Rivera v. Espirity
G.R. No. 135547, January 23, 2002
FACTS: On June 5, 1998, the Airline Pilots Association of
the Philippines (ALPAP) composed of pilots of Philippine
Airlines, Inc. (PAL) went on a 3-week strike, causing
serious losses to the financially beleaguered flag carrier.
Faced with bankruptcy, PAL adopted a rehabilitation plan
and downsized its labor force by more than one-third.
On July 22, 1998, the Phiilippine Airlines
Employees Association (PALEA), composed of ground
employees of PAL went on strike to protest the reduction of
personnel which affected 1,899 union members. The strike
ended 4 days later, when PAL and PALEA agreed to a
more systematic reduction in PALs work force and the
payment of separation benefits to all retrenched
employees.
7. 10-year suspension of CBA
v The parties can agree to suspend their CBA under
exceptional circumstances
The right to free Collective Bargaining (CB)
includes the right to suspend it
SC upheld the validity of an agreement to suspend
the CBA for 10 years in the case of Rivera v.
Espiritu (Jan. 23, 2002)
FACTS:
- PAL was suffering from a difficult financial
situation in 1998. It was faced with bankruptcy and
was forced to adopt a rehabilitation plan and
downsized its labor force by more than 1/3.
- PAL pilots went on a three-week strike in June
1998. PALEA (PAL Employees Association) went
on a four-day strike to protest retrenchment
measures in July 1998.
- President Estrada issued A.O. No. 16, creating an
Inter-Agency Task Force (Task Force) to address
PALs problems. Espiritu, then Sec of Finance,
was chairman of the Task Force. Task Force was
empowered to summon all parties concerned for
conciliation, mediation for the purpose of arriving
at a total and complete solution of the problem.
- PAL management submitted to the Task Force an
offer by Lucio Tan, which was subsequently
rejected.
- PAL then informed the Task Force that
rehabilitation was no longer feasible and there
was no alternative but to close shop.
- PAL ceased operations on Sep 23, 1998.
- PALEA board wrote President Estrada to seek his
intervention on Sep 25, 1998. PALEA offered a
10-year moratorium on strikes and similar actions
and a waiver of some of the economic benefits in
the existing CBA. Tan, however, rejected this
counter-offer.
- PALEA board again wrote the President on Sep
28, 1998. Among others, it proposed the
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 41
Atty. Paulino Ungos
suspension of the PAL-PALEA CBA for a period of
ten years, subject to certain conditions.
- PALEA members accepted such terms through a
referendum on Oct 2, 1998.
- PAL resumed domestic operations on Oct 7, 1998.
- Seven officers and members of PALEA filed
instant petition to annul the Sep 27, 1998
agreement entered into between PAL and PALEA.
ISSUE/S: WON CBA negotiations may be suspended for
10 years?
HELD:
- The primary purpose of CBA is the stabilization of
labor-management relations in order to create a
climate of sound and stable industrial peace.
Hence, in construing a CBA, courts must be
practical and realistic and give due consideration
to the context in which it was negotiated and the
purpose which it is intended to serve.
- The assailed PAL-PALEA agreement was the
result of voluntary collective bargaining
negotiations undertaken in the light of the severe
financial situation faced by the employer, with the
peculiar and unique intention of not merely
promoting industrial peace at PAL, but preventing
the latter's closure.
- There is no conflict between said agreement and
Article 253-A of the Labor Code. Article 253-A has
a two-fold purpose. One is to promote industrial
stability and predictability. Inasmuch as the
agreement sought to promote industrial peace at
PAL during its rehabilitation, said agreement
satisfies the first purpose of Article 253-A. The
other is to assign specific timetables wherein
negotiations become a matter of right and
requirement. Nothing in Article 253A, prohibits the
parties from waiving or suspecting the mandatory
timetables and agreeing on the remedies to
enforce the same.
- It was PALEA, as the exclusive bargaining agent
of PAL 's ground employees, that voluntarily
entered into the CBA with PAL. It was also PALEA
that voluntarily opted for the 10-year suspension
of the CBA. Either case was the union's exercise
of its right to collective bargaining. The right to free
collective bargaining, after all, includes the right to
suspend it.
- The acts of public respondents in sanctioning the
10-year suspension of the PAL-PALEA CBA did
not contravene the protection to labor policy of
the Constitution. The agreement afforded full
protection to labor; promoted the shared
responsibility between workers and employers;
and they exercised voluntary modes in settling
disputes, including conciliation to foster industrial
peace.
**
Article 254. Injunction prohibited. No temporary or
permanent injunction or restraining order in any case

involving or growing out of labor disputes shall be
issued by any court or other entity, except as
otherwise provided in Articles 218 and 264 of this
Code. (As amended by Batas Pambansa Bilang 227, June
1, 1982).
1. No-injunction Policy
v GR: Injunction not favoured in law considering that it
generally has not proved to be an effective means of
settling labor disputes.
Policy of the State: encourage the parties to use
non-judicial process of:
Negotiation
Compromise
Mediation &
Arbitration
v EXCEPTION: Injunctions may be issued only in cases
of extreme necessity based on legal grounds, after due
considerations/hearing and when all efforts at
conciliation are exhausted.
2. When Injunction in Labor Disputes May Issue
v In case of actual or threatened commission of any
prohibited or unlawful acts, or when necessary to
require the performance of a particular act, which if not
restrained or performed forthwith, may cause grave or
irreparable damage to any party or render ineffectual
any decision in favour of such party; or
v In case of a labor dispute causing or likely to cause a
strike or lockout in an industry indispensable to
national interest.
3. Who May Issue Injunction in Labor Disputes
v Only by the ff. Can issue such:
NLRC
In ordinary disputes
Cases arising from violation of Art. 264, LC
Sec. Of Labor and Employment in labor dispute
causing or likely to cause a strike or lockout in an
industry indispensable to the national interest.
v Ordinary courts cannot issue injunction in cases
involving or growing out of a labor dispute
Civil court cannot issue such injunction to restrain
execution of a final and executor judgement of the
NLRC; Nor such civil court can enjoin striking EEs
from obstructing the free ingress/egress of an
establishment
Case: Associated Labor Union (ALU) v. Borromeo
(166 S 99)
FACTS:
- As a result of a strike staged by ALU, Belyca
Corp. filed with the RTC a complaint for injunction
alleging that the strikers obstructed the free
ingress/egress to the establishment, preventing
workers of Belyca farms from attending to the
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 42
Atty. Paulino Ungos
hogs (7, 500) and fowls (8, 000) which are
maintained and could be killed if not attended to.
- Judge immediately issued a TRO
ISSUE/S: WON the issuance of the TRO by RTC judge is
proper
HELD: Issuance of TRO was improper. Courts of law have
no jurisdiction to act on labor cases or various incidents
arising therefrom. Fact that poultry and piggery required
close care and attention does not warrant the RTC judges
assumption of jurisdiction. It does not confer on him the
competence he did not have. Jurisdiction is conferred by
law and not by demands of emergency.
**
Article 255. Exclusive bargaining representation and
workers participation in policy and decision-making.
The labor organization designated or selected by the
majority of the employees in an appropriate collective
bargaining unit shall be the exclusive representative of
the employees in such unit for the purpose of
collective bargaining. However, an individual employee
or group of employees shall have the right at any time
to present grievances to their employer.
Any provision of law to the contrary notwithstanding,
workers shall have the right, subject to such rules and
regulations as the Secretary of Labor and Employment
may promulgate, to participate in policy and decision-
making processes of the establishment where they are
employed insofar as said processes will directly affect
their rights, benefits and welfare. For this purpose,
workers and employers may form labor-management
councils: Provided, That the representatives of the
workers in such labor-management councils shall be
elected by at least the majority of all employees in said
establishment. (As amended by Section 22, Republic Act
No. 6715, March 21, 1989).
1. Right of EEs to participate in Policy and Decision-
Making
v Such right extends only to matters that directly affect
their rights, benefits and welfare.
Right not extend to matters pertaining to business
operations/management aspect of the business
nor to matters covered by CBA or those failing
within traditional areas of CB
v Right can be exercised thru a Labor-management
council to be formed jointly by the ER and the EEs.
Unionized establishments Ees representatives
to council shall be nominated by the exclusive
bargaining representative.
NON -Unionized establishments Ees
representatives to council shall be elected directly
by the Ees at large.
v Case: PAL v. NLRC (225 S 301)
FACTS:

- PAL completely revised its 1966 code of discipline
and thereafter circulated such among the EEs and
immediately implemented. PALEA challenged
such on the ground that it was done withour prior
notice and hearing but PAL claimed that it was a
prerogative of the management and thus, theres
no need to discuss such with the union.
ISSUE/S: WON PAL may be compelled to share with the
union (PALEA) or its Ees its prerogative of formulating a
code of discipline
HELD: A close scrutiny of the objectionable provisions of
the Code reveals that they are not purely business-oriented
nor do they concern the management aspect of the
business of the company. The provisions of the Code
clearly have repercusions on the employee's right to
security of tenure. The implementation of the provisions
may result in the deprivation of an employee's means of
livelihood which, as correctly pointed out by the NLRC, is a
property right. In view of these aspects of the case which
border on infringement of constitutional rights, we must
uphold the constitutional requirements for the protection of
labor and the promotion of social justice, for these factors,
according to Justice Isagani Cruz, tilt "the scales of justice
when there is doubt, in favor of the worker". 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. PAL
asserts that all its employees have been furnished copies
of the Code. Public respondents found to the contrary,
which finding, to say the least is entitled to great respect.
Such provision in the collective bargaining agreement may
not be interpreted as cession of employees' rights to
participate in the deliberation of matters which may affect
their rights and the formulation of policies relative thereto.
And one such mater is the formulation of a code of
discipline. Indeed, industrial peace cannot be achieved if
the employees are denied their just participation in the
discussion of matters affecting their rights.
2. Collective Bargaining Unit (CBU)
2.1. Definition
v CBU refers to a group of EEs sharing mutual interests
within a given ER unit, comprised of all or less than all
the entire body of EEs in the ER unit or any specific
occupational or geographical grouping within such ER
unit
2.2. Appropriate Bargaining Unit (ABU)
v ABU a group of EEs of a given ER, comprised of all
or less than all the entire body of EEs, which the
collective interest of all the EEs, consistent with equity
to the ER, indicate to the best suited to serve the
reciprocal rights and duties of the parties under the CB
provisions of law.
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 43
Atty. Paulino Ungos
v To be considered appropriate it must effect a
grouping of EEs who have substantial, mutual interests
in wages, hrs. Of work, working conditions and other
subjects of collective bargaining.
v Bargaining unit (BU) composed of a mixture of rank-
and-file and supervisory EEs not ABU!
No mutuality of interest between supervisory and
Rank-and-file EEs considering that the former,
while in the performance of their functions,
become alter ego of management in the making
and implementing of key decisions at sub-
managerial level.
v BU composed of EEs with entirely different working
conditions, hrs. Of work, rates of pay, categories of
positions and employment status not ABU!
v CASES:
Phil. Phosphate v. Torres (231 S335)
FACTS:
- PMPI sought to be certified as sole and exclusive
CBAgent of superintendents, professionals
(engineers, analysts, mechanics, accountants,
nurses, midwives, etc.), technical and confidential
EEs of PHILPHOS.
- Such appropriateness was challenged because it
includes professional, technical and confidential
EEs.
ISSUE/S:WON proposed BU is an ABU
HELD: Not an ABU! No community of interest between the
supervisiors and the professional/technical EEs. Quite
obviously, these professional/technical employees cannot
effectively recommend managerial actions with the use of
independent judgment because they are under the
supervision of superintendents and supervisors. Because it
is unrefuted that these professional/technical employees
are performing non-supervisory functions, hence
considered admitted, they should be classified, at least for
purposes of this case, as rank and file employees.
Consequently, these professional/technical employees
cannot be allowed to join a union composed of supervisors.
Conversely, supervisory employees cannot join a labor
organization of employees under their supervision but may
validly form a separate organization of their own. This is
provided in Art. 245 of the Labor Code, as amended by
R.A. No. 6715
Toyota Motor Corp. v. TMCPLU (268 S 573)
FACTS: Respondent filed a petition for certificate election
praying that it be certified as sole and exclusive Bargaining
representative of EEs composed of rank-&-file and
supervisory EEs of petitioner. But such petition was
challenged on the ground of appropriateness of the BU
since supervisory and rank-&file were lumped together.
ISSUE/S: WON the BU is an ABU

HELD: No. Because supervisory and rank-&file were
lumped/mixed together. No mutuality or unity of interests in
the BU of such mixture.
Belyca Corp. v. Ferrer-Calleja (168 S 184)
FACTS: ALU sought to be certified as the sole and
exclusive bargaining representative of all the workers in the
integrated business of Belyca Corp comprising piggery,
poulty, agricultural crops, supermarket and cinemas
ISSUE/S: WON the BU composed of , poulty, agricultural
crops, supermarket and cinemas is an ABU
HELD: No. It is beyond question that the employees of the
livestock and agro division of petitioner corporation perform
work entirely different from those performed by employees
in the supermarts and cinema. Among others, the noted
difference are: their working conditions, hours of work,
rates of pay, including the categories of their positions and
employment status. As stated by petitioner corporation in
its position paper, due to the nature of the business in
which its livestock-agro division is engaged very few of its
employees in the division are permanent, the overwhelming
majority of which are seasonal and casual and not regular
employees (Rollo, p. 26). Definitely, they have very little in
common with the employees of the supermarts and
cinemas. To lump all the employees of petitioner in its
integrated business concerns cannot result in an
efficacious bargaining unit comprised of constituents
enjoying a community or mutuality of interest.
2.3. Fixing the ABU
v Labor laws did not provide criteria for fixing ABU (apart
from the descriptive word in Art. 255 appropriate)
v Baic test of BUs acceptability: WON it is fundamentally
the combination which will best assure to all EEs the
exercise of their CB rights.
v Rothenbergs fundamental factors:
(1) will of employees (Globe Doctrine);
The express will/desire of the EEs may be
considered in determining the ABU
It sanctions the holding of series of elections,
not for the purpose of determining the
CBAgent but for the specific purpose of
permitting the EEs in each of the several
categories to selct the group which chooses
as the CBU.
Case: Kapisanan v. Yard Crew Union (109
Phil. 1143)
FACTS: Kapisanan filed a petition praying that it be
certified as the exclusive Bargaining Agent in Manila
Railroad Co. (MRR). CIR promulgated a decision declaring
3 units appropriate: engine crew, train crew and the unit of
all the rest of the company (to which Kapnisanan was
certified). Both Kapisanan and MRR opposed the
separation of the units. CIR thus issued an order to hold a
plebiscite among the 3 grps. To determine WON they
desire to be separated from the unit of all the rest of the co.
personnel.
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 44
Atty. Paulino Ungos
ISSUE/S: Is the order of the CIR contrary to law?
HELD: No. "the desires of the employees" is one of the
factors in determining the appropriate bargaining unit. The
respondent Court was simply interested "in the verification
of the evidence already placed on record and submitted
wherein the workers have signed manifestations and
resolutions of their desire to be separated from Kapisanan."
Certainly, no one would deny the respondent court's right of
full investigation in arriving at a correct and conclusive
finding of fact in order to deny or grant the conclusive
findings of fact in order to deny or grant the petitions for
certification election. On the contrary, all respondent court,
or any court for that matter, to investigate before acting, to
do justice to the parties concerned. And one way of
determining the will or desire of the employees is what the
respondent court had suggested: a plebiscite carried by
secret ballot. A plebiscite not to be conducted by the
Department of Labor, as contemplated in a certification
election under Sec. 12 of the Magna Charter of Labor, R.A.
No. 875, but by the respondent court itself. As well as
observed by the respondent court, "the votes of workers
one way or the other, in these cases will not by any chance
choose the agent or unit which will represent them anew,
for precisely that is a matter that is within the issues raised
in these petitions for certification".
(2) affinity and unity of employee's interest, such
as substantial similarity of work and duties or
similarity of compensation and working conditions;
(Community of interest rule)
The proper Bargaining unit may be fixed on
the basis of the affinity and the unity of the
EEs interest, such as substantial similarity of
work and duties or similarity of compensation
and working conditions.
Cases
Alhambra Cigar v. Kapisanan (107 S 23)
FACTS: Alhambra Employees' Association (AEA) filed a
petition praying that it be certified as the sole and exclusive
bargaining agent for all the employees in the administrative,
sales and dispensary departments. Alhambra Cigar and
Kapisanan Ng Manggagawa sa Alhambra (FOITAF)
opposed the petition on the ground that the unit sought to
be represented by AEA is not an appropriate CBU since it
is the employer unit which is the appropriate CBU and not
the smaller unit sought by the AEA
ISSUE/S: WON the separate bargaining unit composed of
EEs in the administrative, sales and dispensary
departments would constitute an appropriate CBU
HELD: The SC held that the employees in the
administrative, sales and dispensary departments can form
their own bargaining unit separate and distinct from those
involved in the production and maintenance. They have a
community of interest which justifies their formation or
existence as a separate appropriate collective bargaining
unit. The existing CBA covers only those in the production
and maintenance.

UP v. Ferrer-Calleja (211 S 451)
FACTS: ONAPUP filed a petition for certification election
among the non-academic EEs of UP; thereafter another
union (all UP workers union) intervened in the proceedings
alleging that its membership covers both academic and
non-academic personnel and it aims to unite all UP rank-&-
file EEs in 1 union. UP expressed its view that there should
be separate unions.
ISSUE/S: WON it is proper to create separate bargaining
units for academic and non-academic EEs
HELD: In the case at bar, the University employees may,
as already suggested, quite easily be categorized into two
general classes:
one, the group composed of employees whose functions
are non-academic, i.e., janitors, messengers, typists,
clerks, receptionists, carpenters, electricians, grounds-
keepers, chauffeurs, mechanics, plumbers;
two, the group made up of those performing academic
functions, i.e., full professors, associate professors,
assistant professors, instructors who may be judges or
government executives and research, extension and
professorial staff.
Not much reflection is needed to perceive that the
community or mutuality of interests which justifies the
formation of a single collective bargaining unit is wanting
between the academic and non-academic personnel of the
university. It would seem obvious that teachers would find
very little in common with the University clerks and other
non-academic employees as regards responsibilities and
functions, working conditions, compensation rates, social
life and interests, skills and intellectual pursuits, cultural
activities, etc. On the contrary, the dichotomy of interests,
the dissimilarity in the nature of the work and duties as well
as in the compensation and working conditions of the
academic and non-academic personnel dictate the
separation of these two categories of employees for
purposes of collective bargaining. The formation of two
separate bargaining units, the first consisting of the rank-
and-file non-academic personnel, and the second, of the
rank-and-file academic employees, is the set-up that will
best assure to all the employees the exercise of their
collective bargaining rights.
(3) prior collective bargaining history; and
It is also a factor but not a decisive factor
It can be disregarded/brushed aside in the ff
cases (and thus, only the prevailing factors
should control the determination of the
bargaining unit):
Where circumstances had been so
altered
Where the reciprocal relationship of the
ER and particular bargaining agent has
been so changed that the past mutual
experience can no longer be considered
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 45
Atty. Paulino Ungos
as a reliable guide to the present
determination of the bargaining unit
CASE:NAFTU v. Mainit Lumber (192
S 598)
Even if for several years, the sawmill and the logging
division have always been treated as separate units in the
company (MALDECO), a single unit can still be created in
the basis of community of interests rule. Moreover, while
the existence of a bargaining history is a factor that may be
reckoned with in determining the appropriate bargaining
unit, the same is not decisive or conclusive. Other factors
must be considered. The test of grouping is community or
mutuality of interests. This is so because "the basic test of
an asserted bargaining unit's acceptability is whether or not
it is fundamentally the combination which will best assure to
all employees the exercise of their collective bargaining
rights." Certainly, there is a mutuality of interest among the
employees of the Sawmill Division and the Logging
Division. Their functions mesh with one another. One group
needs the other in the same way that the company needs
them both. There may be difference as to the nature of their
individual assignments but the distinctions are not enough
to warrant the formation of a separate bargaining unit.
(4) employment status, such as temporary,
seasonal and probationary employees (Similarity
of employment status rule)
This rule requires that temporary, seasonal
and probationary employees be grouped as 1
category and treat them separately from
permanent employees.
Case: PLASLU v. CIR (110 Phil. 176)
FACTS: AWA and PLASLU are contending unions. CIR
ordered to hold a certification election to determine which
will be the sole bargaining agent of the ER (San Carlos
Milling Co.) PLASLU question 242 ballots on the ground
that they were cast by stevedores and piece-rate workers
who were employed on casual/day to day basis, who could
not properly be included in the bargaining unit it seeks to
represent
ISSUE/S: Is PLASLU correct?
HELD: Yes. CIR shouldve excluded the 242 votes cast by
by stevedores and piece-rate workers who were employed
on casual/day to day basis, who could not properly be
included in the bargaining unit PLASLU seeks to represent.
Note that these temporary workers had a work of different
nature from those labourers permitted to vote; they have no
reasonable basis for continued or renewed employment for
any appreciable substantial time- not to mention the nature
of work they perform they cannot be considered to have
such mutuality of interest as to justify in the bargaining unit
composed of regular EEs.
2.4 The One Company-One Union Policy
v GR: LC discourages proliferation of unions in an
establishment, unless circumstances otherwise require
RATIO: greater mutual benefits which the parties
could derive, especially in case of EES whose

bargaining strength could undeniably be enhanced
by their unity and solidarity but diminished by their
disunity, division and dissension.
Mere fact that certain group of EEs perform
functions different from the other EEs does not
warrant the formation of a separate bargaining unit
Variety of tasks is to be expected
It would not be in the interest of sound labor-
management relations if each group of EEs
assigned to a specialized function or section
would decide to break away from their fellow-
workers and form their own separate
bargaining unit - this could only lead to
confusion, discord and labor strife, there
being no substantial differences in their
functions.
v EXCEPTIONS
(1) When supervisory EES organize themselves
into a bargaining unit separate and distinct from
bargaining unit of rank-&-file EES (basis: art. 245,
LC prohibitjng the supervisory EEs from joining
rank-&-file EEs)
(2) Where the ER unit has to give way to other
bargaining units, like craft unit, plant unit or
subdivision unit. (e.g. In Airline company cabin
attendants and pilots different from ground
personnel; In Educational institution teaching
and non-teaching personnel)
(3) When a certain class of EEs are excluded from
the coverage of the bargaining unit. (Ratio:
separate bargaining unit must be formed so as not
to unduly deprive them of the right to collectively
bargain; e.g. exclusion of the daily paid EEs from
bargaining unit of those monthly paid.)
CASES:
Knitjoy Manufacturing, Inc. v. Ferrer-Calleja (214 S 174)
FACTS: CFW is the certified CR of daily-paid rank-&-file
EEs of Knitjoy. While later and CFW were negotiating for
renewal of their CBA, KMEU filed a petition for certification
election among the monthly-paid rank-&-file EEs of knitjoy.
CFW challenged such.
ISSUE/S: WON monthly-paid rank-&-file EEs of Knitjoy can
constitute an ABU separate and distinct from existing unit
composed of daily-paid rank-&-file EEs
HELD: Yes. There can be separate bargaining unit on the
basis of this. The regular monthly-paid rank-&-file EEs of
Knitjoy were never included in the scope of the bargaining
unit of the daily-paid rank-&-file EEs of Knitjoy
San Miguel Corp. EEs Union v. Confessor (262 S 81)
FACTS: SMCEA is the collective bargaining agent of the
rank-&-file EEs of SMC in its 4 operating divisions (beer,
packaging, feeds & livestock, Magnolia and agri-business).
The last 2 divisions became 2 separate and distinct
corporations Magnolia Corp and San Miguel Foods Corp.
SMCEA insisted that bargaining unit should still include the
EEs of the spun-off corporations. SMC claimed that EEs
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 46
Atty. Paulino Ungos
who moved to Magnolia Corp., can no longer be included
because they automatically cease to be EEs of SMC.
ISSUE/S: WON the bargaining unit at SMC should include
the EEs of Magnolia Corp. and San Miguel Foods, Inc.
HELD: No. There are 2 distinct corporations in the case at
bar. Indubitably, therefore, Magnolia and the feeds and
livestock divisions became distinct entities with separate
juridical personalities. Thus, cannot be joined in a single
bargaining unit.
2.5. Separate Bargaining Units for Every Corporation
v 2 corporations cannot be treated as a single bargaining
unit.
RATIO: 2 companies are distinct entities with
separate juridical personalities
Not a justification for piercing the corporate
veil:
Mere fact that their business are related
and that some of EEs of 1 corp. were
original EEs of the other
Mere fact that some EEs of 1 corporation
are the same persons manning and
providing auxiliary services to other corp.
and that physical plants, offices are
situated in same compound
3. THE CBAgent
v 3 modes of determining CBAgent:
Voluntary Recognition
Certification Election
Run-off Election
3.1 Voluntary Recognition
v Is the process by which legitimate labor organization is
acknowledged by the ER as the exclusive bargaining
agent in a unit
v It is proper only in Unorganized establishments with 1
legitimate labor organization operating within the
bargaining unit.
3.1.1. Notice of Voluntary Recognition
v It is required of the ER and the union to submit, within
30 days from recognition, a NOTICE OF VOLUNTARY
RECOGNITION tot he regional office of the DOLE
which issued the unions certificate of registration or
certificate of creation of chartered local.
v Documentary requirements accompanying the notice
(which shall be certified under oath by the ER and
President of the Labor Union):
A. A joint statement under oath of voluntary
recognition attesting to the fact of voluntary
recognition
B. Certificate of posting of the joint statement of
voluntary recognition for 15 consecutive days in at

least 2 conspicuous places in the establishment or
bargaining unit where the union seeks to operate
C. Statement on the approximate number of
employees in the bargaining unit, accompanied by
the names of those who support the voluntary
recognition comprising of at least a majority of the
members of the bargaining unit
D. A statement that the labor union is the only
Legitimate Labor Organization (LLO) operating
within the BU
3.1.2. Recording of Voluntary Recognition
v Fact of Voluntary Recognition shall be recorded in the
roster of LLO by the Labor Relations Division of the
Regional Office of the DOLE
Upon such recording, the recognized labor union
shall enjoy rights, privileges and obligations of an
existing bargaining agent.
Entry of voluntary recognition shall bar the filing of
petition for certification election by any labor
organization for a period of 1 year from date of
entry of voluntary recognition
Upon expiration of the 1 year period, any LLO may
file petition for certification election in the same
bargaining unit, UNLESS a collective bargaining
agreement was executed and registered with the
DOLE
3.2. Certification Election
v Is the process of determining through secret ballot the
sole and exclusive CBrepresentative of the EEs in an
appropriate bargaining unit.
Can be done through:
Order of DOLE
Agreement of parties (called Consent
Election)
3.3. Run-Off Election
v If none of the contenders in a certification election (with
atleast 3 choices) obtains a majority of the valid votes
cast, the labor unions receiving 2 highest number of
votes shall be subjected to an election to determine
which of them should be the CBrepresentative.
3.3.1. Conditions for Holding a Run-off Election
v Conditions:
(a) Certification Election should have at least 3
choices
(b) None of the choices obtained a majority of the
valid votes cast
(c) Total # of votes for ALL contending unions is at
least 50 % of the numbers votes cast
(d) There are no challenged ballots, which can
materially alter the results
v Only 2 labor unions receiving the highest # of votes
can participate in a run-off election
v no union shall not be a choice of a run-off election shall continue to recognize the majority status of the
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 47
Atty. Paulino Ungos
v Labor union that garners majority of the valid votes
cast shall be the exclusive collective bargaining agent
of the EEs covered by the bargaining unit.
3.4 Scope of Representation
v CBAgent represents not only union members but
also non-union members within the bargaining unit.
Since it voluntarily assumes the responsibility of
representing all the EEs in the bargaining unit.
4. The Substitutionary Doctrine
v In cases where the contract-bar principle is not
applicable (as when the CBA was not duly registered)
the EEs may change their CBAgent, but the CBA
continues to bind them up to the expiration date.
v The doctrine: EEs cannot revoke a validly executed
CBA by the simple expedient of changing their
bargaining agent.
The new agent is obliged to respect the CBA,
although it could negotiate for the shortening of
the life of the said agreement.
**
Article 256. Representation Issue in Organized
Establishments. - In organized establishments, when a
verified petition questioning the majority status of the
incumbent bargaining agent is filed by any legitimate
labor organization including a national union or
federation which has already issued a charter
certificate to its local chapter participating in the
certification election or a local chapter which has been
issued a charter certificate by the national union or
federation before the Department of Labor and
Employment within the sixty (60)-day period before the
expiration of the collective bargaining agreement, the
Med-Arbiter shall automatically order an election by
secret ballot when the verified petition is supported by
the written consent of at least twenty-five percent
(25%) of all the employees in the bargaining unit to
ascertain the will of the employees in the appropriate
bargaining unit. To have a valid election, at least a
majority of all eligible voters in the unit must have cast
their votes. The labor union receiving the majority of
the valid votes cast shall be certified as the exclusive
bargaining agent of all the workers in the unit. When an
election which provides for three or more choices
results in no choice receiving a majority of the valid
votes cast, a run-off election shall be conducted
between the labor unions receiving the two highest
number of votes: Provided, That the total number of
votes for all contending unions is at least fifty percent
(50%) of the number of votes cast. In cases where the
petition was filed by a national union or federation, it
shall not be required to disclose the names of the local
chapters officers and members.
At the expiration of the freedom period, the employer

incumbent bargaining agent where no petition for
certification election is filed. (As amended by Section 23,
Republic Act No. 6715, March 21, 1989 and Section 10,
Republic Act No. 9481 which lapsed into law on May 25,
2007 and became effective on June 14, 2007).
1. Purpose of Certification Election
v To ascertain the wishes of the majority of the EEs in
the bargaining unit on whether to be represented by a
labor organization and which labor organization.
Intended to give EEs true representation in their
collective bargaining with their ER
2. Significance of Certificate Election
v It is the fairest and most effective way of determining
which labor organization can truly represent the
working force in the ABU.
Thru such, EEs are given the opportunity to make
known their choice on who shall represent them in
CB
Freedom to form labor organizations would be
rendered nugatory if EEs could not choose their
own leaders to speak on their behalf and to
bargain for them.
3. Nature of the Certification Proceedings
v Not a litigation in the sense the term is commonly
understood where conventional rules of evidence are
strictly observed.
v It is an investigation of non-adversary, fact-finding
character in which the Med-Arbiter plays the part of a
disinterested investigator seeking merely to ascertain
the desires of EEs as to the matter of their
representation, especially so where the petition for
certification election and the claim of majority
representation are uncontested.
When adversarial? 2 rival unions claim prior to the expiry date of an existing CBA and a petition
representation, hence, it has to be decided
according to lawful evidence.
4. Venue of Certification Proceedings
v Filed with the Regional Office of the DOLE which
issued the petitioning unions certificate of registration
or certificate of creation of chartered local.
5. Who May File A Petition For Certification Election
v GR: LLO can file
v EXCEPTION: ER can also file when it is requested by
a LLO to bargain collectively.
6. The Proper Time for Filing a Petition for Certification
v Absence of CBA or if CBA has not been duly
registered in accordance with Art. 231, LC
Such may be filed anytime
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 48
Atty. Paulino Ungos
v If there is a duly registered CBA
Petition for Certification Election can be filed only
during the freedom period (60 days prior to expiry
of such agreement)
Cases:
Associated Labor Unions v. Ferrer-Calleja (179 S 127)
FACTS: ALU had a CBA with PASAR due to expire on April
1, 1987. On March 23, 1987, NAFLU filed a petition for
certification election. ALU sought dismissal on the ground
that it failed to present necessary signatures. Med-Arbiter
dismissed and NAFLU appealed. During the pendency of
appeal, ALU and PASAR executed a new CBA. Then ALU
sought to dismiss the appeal on the grounds that there is a
new CBA; but instead of dismissing appeal, BLR ordered a
certification election.
ISSUE/S:WON it was proper for BLR to order Certification
Election despite a new CBA was entered by ALU and
PASAR
HELD: It was proper. Petition filed within the 60 days
freedom period and hence, merely filing within that time is a
sufficient basis for ordering certification election. Mere fact
that CBA has already ratified and EEs are already enjoying
benefits under CBA does not alter the situation. More so
because the CBA was not yet in existence when the
petition for certification election was filed.
NACUSIP v. Ferrer-Calleja (205 S 478)
FACTS: NFSW and DSR Milling Co.s 3 year CBA expired
on Nov. 14, 1987. They renewed such. On Dec. 5, 1988,
NACUSIP filed a petition for certification election. NSFW
sought the dismissal of such
ISSUE/S: WON petition should be dismissed since such
was filed outside the freedom period
HELD: Yes. Petition for Certification Election in organized
establishments can only be entertained within the 60 days
filed after freedom period should be dismissed outright.
United Aluminum Fabricators v. Drilon (211 S 104)
FACTS: United and UAFW had a CBA which expired on
April 29, 1989. During freedom period (April 3, 1989), the
two renegotiated and executed a new CBA. After the lapse
of 69 days from expiry of the former CBA, KAMPIL filed a
petition for certification election. United moved to dismiss.
Med-Arbiter dismissed but Sec. Of Labor and Employment
ordered the holding of certification election.
ISSUE/S: WON secretary was correct
HELD: No. 69 days after the expiry was beyond the
freedom period set by law.
7. Form and Contents of Petition

v Petition for certification shall be in writing and verified
by the president of the petitioning union.
v Allegations need to be contained:
(a) the name of petitioner, its address, and affiliation if
appropriate, the date and number of its certificate of
registration. If the petition is filed by a federation or national
union, the date and number of the certificate of registration
or certificate of creation of chartered local;
(b) the name, address and nature of employer's business;
(c) the description of the bargaining unit;
(d) the approximate number of employees in the bargaining
unit;
(e) the names and addresses of other legitimate labor
unions in the bargaining unit;
(f) a statement indicating any of the following
circumstances:
1) that the bargaining unit is unorganized or that
there is no registered collective bargaining
agreement covering the employees in the
bargaining unit;
2) if there exists a duly registered collective
bargaining agreement, that the petition is filed
within the sixty-day freedom period of such
agreement; or
3) if another union had been previously
recognized voluntarily or certified in a valid
certification, consent or run-off election, that the
petition is filed outside the one-year period from
entry of voluntary recognition or conduct of
certification or run-off election and no appeal is
pending thereon.
(g) in an organized establishment, the signature of at least
twenty-five percent (25%) of all employees in the
appropriate bargaining unit shall be attached to the petition
at the time of its filing; and
(h) other relevant facts.
8. Intervention
Labor unions with substantial interest in the
certification election have the right to intervene
and take part in the certification proceedings.
Intervention is done by filing a MOTION FOR
INTERVENTION with the Med-Arbiter assigned to
the case.
Organized establishment: filed during freedom
period
Unorganized establishment: filed at any time prior
to the decision of the Med-Arbiter.
Incumbent CBA automatically becomes a forced
intervenor.
GR: Forms and contents of a motion for
intervention shall be the same as petition for
Certification election,
o It need not be supported by the written
consent of 25% of the employees within
the bargaining unit.
o The 25% consent applies only to
petitions for certification election.
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 49
Atty. Paulino Ungos
9. The By- Stander Principle
GR: In certification proceeding, the employer is a
mere by- stander because the proceeding is the
sole concern of workers.
EXP: When the employer files a petition for
certification election pursuant to Art 258 of the LC
because it was requested to bargain collectively.
o After the filing of the petition, the role of
the employer ceases.
When the employer invokes certain valid
defenses.
10. Employers Defenses
a. Lack of employer- employee relationship;
b. Lack of legal personality on the part of the
petitioning union;
c. Lack of 25% written consent;
d. Inappropriate bargaining unit;
e. Contract bar rule;
f. Voluntary recognition bar rule;
g. Election bar rule;
h. Negotiation bar rule; and
i. Deadlock bar rule.
10.1 Lack of Employer- Employee Relationship
Failure to establish E-E relationship means
ineligibility to file and vote for certification election.
Singer Sewing Machine Company v. Drilon:
o Private respondent are not employees of
the company, they are not entitled to the
constitutional right to join and form a
labor organization for purposes of CB.
10.2 Lack of Legal Personality on the Part of the Union
A labor union lacks legal personality:
a. If it is not registered with the DOLE; or
b. If its registration has been cancelled by virtue of a
final judgment.
Only legitimate labor organization may file for
certification.
During the pendency of application for registration,
al LO may be allowed to file petition for
certification election.
U.E. Automotive Employees v. Noriel (74 SCRA
72)
o In absence of any fatal defect to the
application for registration, there is no
justification for withholding it from
petitioner to enable it to exercise fully its
constitutional right to freedom of
association.
Cancelled registration by virtue of final judgment,
loses legal personality, hence it cannot file a
petition for CE.

o Mere pendency of the cancellation
proceeding does not disqualify LO from
filing a petition for certification election
because during pendency the legal
personality subsists.
10.3 Lack of 25% Consent Requirement
Organized establishment: petition must be
supported by written consent of at least 25% of all
the employees in the bargaining unit.
o If the CE is supported by the written
consent of 25% of the employees within
the bargaining unit, it is MANDATORY on
the part of the Med-Arbiter to order a CE.
(Art. 256)
Failure to submit 25% written consent is a ground
for dismissal.
The 25% requirement should not be applied
strictly; prima facie showing of compliance will
suffice.
However, if the written consent falls short of the
25%, it is no longer mandatory, but discretionary
on the part of the med- Arbiter to call a CE.
10.3.1 Effect of Withdrawal of Consent
Before filing of petition for CE: the Med- Arbiter
may not order the holding of CE.
La Suerte Cigar and Cigarette Factory v. Dir of
Labor Relations:
o Withdrawals made before the filing of the
petition are presumed voluntary, unless
there is convincing proof to the contrary.
o Withdrawals made after the filing are
deemed involuntary.
After filing of petition for CE: the Med- Arbiter can
still order the holding of CE.
George & Peter Linea Inc. v. ALU:
o Withdrawal of 80% of the membership
which the union claims to be involuntary,
the best forum to determine if there was
undue pressure exerted upon employees
to retract their membership is the CE
itself.
Effect of Withdrawal of Consent
- If the withdrawal or retraction of consent was
made before the filing of the petition for
certification election, the Med-Arbiter may not
order the holding of a certification election.
Case: La Suerte Cigar and Cigarette Factory vs. Director of
Bureau of Labor Relations (123 SCRA 679)
HELD: xxx whether or not the withdrawal of 31 union
members from NATU affected the petition for certification
election insofar as the 30% requirement is concerned, We
reverse the Order of respondent Director of the Bureau of
Labor Relations, it appearing undisputably that the 31 union
members had withdrawn their support to the petition before
the filing of said petition. It would be otherwise if the
withdrawal was made after the filing of the petition for it
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 50
Atty. Paulino Ungos
would then be presumed that the withdrawal was procured
through duress, coercion or for valuable consideration. In
other words, the distinction must be that withdrawals made
before the filing of the petition are presumed voluntary,
unless there is convincing proof to the contrary, whereas
withdrawals made after the filing of the petition are deemed
involuntary.
- If the withdrawal or retraction of consent was
made after the filing of the petition for certification
election, the Med-Arbiter can still order the holding
of a certification election.
Case: George & Peter Lines Inc. vs. ALU (134 SCRA 82)
HELD: xxx Certification election is the best and most
appropriate means of ascertaining the will of the employees
as to their choice of an exclusive bargaining
representative Even if the withdrawals of the employees
concerned were submitted after the Petition for the Direct
Certification had been filed the doubt as to the majority
representation has arisen, and it is best to determine the
true sentiment of the employees through a certification
election.
- Reason for distinction:
o If the withdrawal or retraction is made
before the filing of the petition, the
names of employees supporting the
petition are supposed to be held secret to
the opposite party.
o When the withdrawal or retraction is
made after the petition is filed, the
employees who are supporting the
petition become known to the opposite
party since their names are attached to
the petition at the time of filing.
Inappropriate Bargaining Unit
- A bargaining unit is not an appropriate bargaining
unit:
a) If it fragments the employer unit;
b) If the composition thereof is a
mixture of rank-and-file and
supervisory employees, or a mixture
of supervisory and managerial
employees;
c) If it is composed of managerial
employees; or
d) If it is composed of members of a
cooperative
- If the bargaining unit sought to be represented by
the petitioning union is not an appropriate
bargaining unit, the employer can move for the
dismissal of the petition for certification election.
The Contract-Bar Rule
- If there is a duly registered collective bargaining
agreement, no petition questioning the majority
status of the incumbent bargaining agent shall be
entertained.
- No certification election shall be conducted
outside of the sixty-day period immediately before
the expiry of the five-year term of the collective
bargaining agreement.
The Voluntary Recognition Bar Rule

- Voluntary recognition duly entered in the roster of
legitimate labor organization shall bar the filing of
a petition for certification election for a period of
one (1) year from the date of entry of voluntary
recognition.
o An employer can ask for the dismissal of
a petition for certification election filed
within one (1) year from entry of
voluntary recognition.
- Upon expiration of the one-year period, any
legitimate labor organization may file a petition for
certification election in the same bargaining unit
represented by the voluntarily recognized union,
unless a collective bargaining agreement between
the employer and the voluntarily recognized labor
union has been executed and registered.
The Election-Year Bar Rule
- No petition for certification election may be filed
within one (1) year from the date of a valid
certification election, consent election or run-off
election.
- In case of appeal, the running of the one-year
period is suspended until the decision on the
appeal has become final and executory.
Case: R. Transport Corp. vs. Laguesma (227 SCRA
826)
FACTS: CLOP filed a petition for certification election
but the same was dismissed by the Med-Arbiter
because the bargaining unit sought to be represented
did not include all the eligible employees but only
drivers, conductors and conductresses to the exclusion
of the inspectors, dispatchers, mechanics and washer
boys. CLOP rectified its mistake by filing a second
petition for certification election, which included all the
rank-and-file employees of the company. The
Company moved for the dismissal of the second
petition on the ground that it was filed within one (1)
year from the dismissal of the first petition.
ISSUE: Whether or not CLOP was barred from filing
the second petition for certification election?
HELD:NO. CLOP was not barred from filing the
second petition for certification election. The one-year
prohibition imposed by the election-year bar rule does
not apply because no certification election was ever
conducted. The first petition was merely dismissed
because of certain defects. The election-year bar rule
will apply only when there is actual conduct of election.
The Negotiation-Bar Rule
- No representation question may be entertained if,
within the one-year period from the date of entry of
voluntary recognition, certification election, or run-
off election, the duly recognized or certified union
has commenced negotiations with the employer in
accordance with Article 250 of the Labor Code.
Case: KAMPIL vs. Trajano( 201 SCRA 453)
FACTS: By virtue of a Resolution of the Bureau of Labor
Relations dated February 27, 1981, NAFLU was declared
as the exclusive bargaining representative of all the rank-
and-file workers of Viron Garments. Four (4) years had
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 51
Atty. Paulino Ungos
lapsed without any collective bargaining agreement being
entered into between NAFLU and Viron.
ISSUE: Can another labor organization file a petition for
certification election?
HELD: YES. A petition for certification election can be filed
by another union. The one-year period during which the
certified union is required to negotiate with the employer
has long expired.
The Deadlock-Bar Rule
- No representation question may be entertained if,
before the filing of a petition for certification
election, 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.
o Purpose: To ensure stability in the
relationship of the workers and the
management.
Case: NACUSIP vs. Trajano (208 SCRA 18)
FACTS: NACUSIP is the certified bargaining representative
of the rank-and-file employees of Calinog Refinery
Corporation. A collective bargaining deadlock ensued
between it and the corporation, for which they agreed to
submit the deadlock for compulsory arbitration. A month
after the deadlock was submitted for compulsory
arbitration, FUR filed a petition for certification election
alleging that about 45% of the employees had joined FUR;
and that while NACUSIP had been certified as the sole and
exclusive bargaining representative, it had been unable to
conclude a collective bargaining agreement despite the
lapse of more than one year.
ISSUE: Will the petition prosper?
HELD: NO. The petition will not prosper because when
FUR filed the petition for certification election, a bargaining
deadlock was already submitted for arbitration. Under the
deadlock-bar principle, a petition for certification election
can only be entertained if there is no bargaining deadlock
submitted to conciliation or arbitration or had become the
subject of a valid notice of strike or lockout.
QUESTIONS PERTAINING TO VALIDITY OF
REGISTRATION
v QUESTIONS THAT CANNOT BE RAISED IN A
MOTION TO DISMISS THE PETITION FOR
CERTIFICATION ELECTION
1. Validity of the registration of the collective
bargaining agreement
2. Validity of the unions registration
v REMEDY File an independent petition for
cancellation of registration with the Regional
Director of the Department of Labor and
Employment
v PENDING RESOLUTION OF THE PETITION
FOR CANCELLATION OF REGISTRATION
o The proper party can ask for the
suspension of the certification election
proceedings
v It would have been more prudent for the Med-
Arbiter and public respondent to have granted

petitioners request for the suspension of
proceedings in the certification election case until
the issue of the legality of the Unions registration
shall have been resolved. Grave abuse of
discretion. (Progressive Development Corporation
Pizza Hut v. Laguesma)
EFFECT OF UNFAIR LABOR PRACTICE CHARGE
v GENERAL RULE A complaint for unfair labor
practice file against the union will not affect the
holding of a certification election
o REASON: It should not be allowed to
lend itself as a means to prevent a truly
free expression of the will of the labor
group as to the organization that will
represent it
v EXCEPTION A complaint for unfair labor
practice charging a labor organization to be
company-dominated
o REASON: If there is a union dominated
by the company to which some of the
workers belong, an election among the
workers and the employees of the
company would not reflect the true
sentiment and wishes of the said workers
and employees from the standpoint of
their welfare and interest
v An unfair labor practice complaint charging a labor
organization to be company dominated is a
prejudicial question in a petition for a certification
election
o Must first be decided before ordering a
certification election
o May render the election process nugatory
if the company-dominated union wins
and would later on be decertified
EFFECT OF STRIKE
v None. Certification election is still valid
CONDUCT OF CERTIFICATION ELECTION
QUALIFIED VOTERS
v All employees covered by the appropriate
bargaining unit at the time of issuance of the order
granting the holding of a certification election
v Probationary employees
v Strikers
o REASON They continue to enjoy
employee status during the strike
o EXCEPTION They are declared to
have lost their employee status
v Employee dismissed from work but has contested
the legality of dismissal in a forum of appropriate
jurisdiction at the time of issuance of the order for
the conduct of a certification election
o EXCEPTION His dismissal was
declared valid in a final judgment at the
time of the holding of the certification
election
v Members of Iglesia ni Kristo
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 52
Atty. Paulino Ungos
o No law, administrative rule or precedent
prescribes forfeiture of the right to vote
by reason of neglect to exercise the right
in the past certification elections
o The fact Iglesia ni Kristo members are
forbidden by their religious belief from
forming, joining or assisting labor
organizations does not disqualify them
from voting in a certification election
SEGREGATION OF VOTES
v In case of disagreement over the voters list or
over the eligibility of voters, all contested voters
shall be allowed to vote
o Their ballots shall be segregated and
sealed in individual envelopes
NOTICE OF ELECTION
v Election Officer to cause posting of notice of
election at least ten (10) days before the actual
date of election in two most conspicuous places in
the company premises
v CONTENTS OF THE NOTICE
1. Date and time of election
2. Names of all contending unions
3. Description of the bargaining unit
v Cannot be waived by the contending union or
employer
v One day deficiency will not nullify the election if a
substantial number of employees voted
accordingly on the election day
CHALLENGING OF VOTES
v The authorized representative of any of the
contending unions and the employer may
challenge a vote before the ballot is deposited in
the ballot box
v Grounds
v When a vote is properly challenged
o Election Officer to place the ballot in an
envelope and seal in the presence of the
voter and representative of the
contending unions and employer
o Indicate voters name
o Envelope to be signed by the Election
Officer and representatives of all
contending unions and employer
o Election Officer to note all the challenges
in the minutes of the election and
consolidate all the envelopes of the
challenged votes
o Envelopes hall be opened and the
question of elegibility shall be passed
only if the number of segregated voters
will materially alter the results of the
election

Election Protest
v Any party-in-interest may file a protest based on
the conduct or mechanics of the election.
- The protest must be recorded in the
minutes of the proceedings.
- Protests not so raised are deemed
WAIVED.
v A Labor Organization which did not take part in
the certification election cannot file a protest.
v The protesting party must:
- Formalize its protest with the Med-Arbiter
- With specific grounds, arguments and
evidence therefor
- Within five (5) days after the close of the
election proceedings. [The phrase close
of the election proceedings refers to that
period from the closing of the polls to the
counting and tabulation of votes].
The PROTEST shall be DEEMED
DROPPED, IF the protest is not recorded in
the minutes of the proceedings or if not
formalized within the prescribed period.
v A certification election may be declared invalid if
certain irregularities were committed during the
election. BUT a mere general allegation of duress
is not sufficient to invalidate a certification election.
Example of Irregularities:
If the workers of the night shift and afternoon
shift were not able to vote
The secrecy of ballots was not safeguarded
The election supervisors were remiss in their
duties and were apparently intimidated by a
union representative and the participating
unions were overzealous in wooing the
employees to vote in their favorby resorting to
such tactics as giving free tricycle rides and
T-shirts.
Failure of Election
- is present when LESS THAN a majority
of all eligible voters have cast their votes.
- it shall not bar the filing of a motion for
the immediate holding of another
certification/consent election within six (6)
months from the declaration of failure of
election.
Proclamation
The Med-Arbiter shall proclaim the union which
obtained the majority of the valid votes cast if the following
conditions are met:
a. No protest has been filed, OR if one was filed, the
same was not perfected within the 5 day period for
perfection of the protest;
b. No challenge or eligibility issue was raised, OR if
one was raised, the resolution of the same will not
materially change the result.
-In a certification election, the authority of the Med-Arbiter
or election officer is LIMITED to certifying the winner as the
sole and exclusive bargaining agent.
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 53
Atty. Paulino Ungos
Direct Certification
- This is no longer allowed as a method of
selecting the exclusive bargaining agent.
- The present law affirms the superiority of
certification election over direct
certification.
ART. 257. Petitions in unorganized establishments.- In any
establishment where there is no certified bargaining
agent, a certification election shall automatically be
conducted by the Med-Arbiter upon the filing of a
petition by a legitimate labor organization.
COMMENT:
1. Unorganized Establishment
- is a firm or company where there is no
certified or recognized collective
bargaining agent for a particular
bargaining unit.
2. Certification Election in Unorganized
Establishment
- The mere filing of a petition for
certification election by a legitimate labor
organization is enough to order the
holding of a certification election.
ART. 258. When an employer may file petition. - When
requested to bargain collectively, an employer may
petition the Bureau for an election. If there is no
existing certified collective bargaining agreement in
the unit, the Bureau shall, after hearing, order a
certification election.
All certification cases shall be decided within twenty
(20) working days.
The Bureau shall conduct a certification election within
twenty (20) days in accordance with the rules and
regulations prescribed by the Secretary of Labor.
COMMENT:
Employer as Petitioner
- If a legitimate labor organization requests
an employer to bargain collectively there
are 2 options available to the employer,
namely:
a. Voluntarily recognize the
representation status of the labor
organization; or
b. File a petition for certification
election.
Case: Ilaw at Buklod Ng Manggagawa v. Ferrer-
Calleja(182 SCRA 561)
FACTS: On September 7, 1987, IBM requested San Miguel
Corporation (SMC) for voluntary recognition as the sole and
exclusive bargaining representative of all monthly and daily
paid employees of the Calasiao Sales Office. SMC denied
the request. Instead, it filed a petition on the ground that it
did not ask SMC to bargain collectively with it.
HELD: IBMs request for voluntary recognition as
bargaining representative was in effect a request to bargain

collectively. Hence, SMCs petition for certification election
was proper under Article 258 of the Labor Code.
ART. 259. Appeal from certification election orders.- Any
party to an election may appeal the order or results of
the election as determined by the Med-Arbiter directly
to the Secretary of Labor and Employment on the
ground that the rules and regulations or parts thereof
established by the Secretary of Labor and Employment
for the conduct of the election have been violated.
Such appeal shall be decided within fifteen (15)
calendar days.
COMMENT:
Remedy From a Decision in a Petition for Certification
Election
In Unorganized Establishments
a. Order Dismissing a Petition for Certification
Election
- may be appealed to the Office of the
Secretary of Labor and Employment
within ten (10) days from receipt thereof.
b. Order Granting a Petition for Certification
Election
- is NOT appealable.
- any issue arising therefrom may be
raised by means of protest on the
conduct and results of the certification
election.
HOWEVER, under certain EXCEPTIONAL SITUATIONS,
appeal may be resorted to if the Med-Arbiter orders the
holding of a certification election despite the:
a. Lack of employer-employee relationship with the
members of the bargaining unit;
b. Lack of legal personality on the part of the
petitioning union either because it is not listed in
the registry of legitimate unions or because its
registration has been cancelled; or
c. Improper composition of the bargaining unit.
In Organized Establishments
The ORDER DISMISSING or GRANTING the Petition for
Certification Election
- may be appealed to the Office of the
Secretary of Labor and Employment
within ten (10) days from receipt.
Form of Appeal
- under oath
- shall consist of a memorandum of appeal
- specifically stating the grounds for appeal
- supporting arguments and evidence
Where to File Appeals
- in the Regional Office of the Department
of Labor and Employment where the
petition originated.
Effect of Appeal
- the filing of appeal STAYS the holding of
certification election
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 54
Atty. Paulino Ungos
Title VII-A
GRIEVANCE MACHINERY AND VOLUNTARY
ARBITRATION
ART. 260.Grievance machinery and voluntary arbitration.-
The parties to a Collective Bargaining Agreement shall
include therein provisions that will ensure the mutual
observance of its terms and conditions. They shall
establish a machinery for the adjustment and
resolution of grievances arising from the interpretation
or implementation of their Collective Bargaining
Agreement and those arising from the interpretation or
enforcement of company personnel policies.
All grievances submitted to the grievance machinery
which are not settled within seven (7) calendar days
from the date of its submission shall automatically be
referred to voluntary arbitration prescribed in the
Collective Bargaining Agreement.
For this purpose, parties to a Collective Bargaining
Agreement shall name and designate in advance a
Voluntary Arbitrator or panel of Voluntary Arbitrators,
or include in the agreement a procedure for the
selection of such Voluntary Arbitrator or panel of
Voluntary Arbitrators, preferably from the listing of
qualified Voluntary Arbitrators duly accredited by the
Board. In case the parties fail to select a Voluntary
Arbitrator or panel of Voluntary Arbitrators, the Board
shall designate the Voluntary Arbitrator or panel of
Voluntary Arbitrators, as may be necessary, pursuant
to the selection procedure agreed upon in the
Collective Bargaining Agreement, which shall act with
the same force and effect as if the Arbitrator or panel of
Arbitrators has been selected by the parties as
described above.
COMMENT:
Grievance
- is a dispute or controversy between an
employer and the collective bargaining
agent, individual employee or group of
employees, arising from interpretation or
implementation of the collective
bargaining agreement or interpretation or
enforcement of company personnel
policies.
Grievance Machinery
- where grievances are processed which
the parties to a collective bargaining
agreement are required to establish
under Article 260 of the Labor Code.
If NO Grievance Machinery provided in the Collective
Bargaining Agreement
- the parties are required to create, within
ten (10) days from signing of the
collective bargaining agreement, a
grievance committee to be composed of
at least two(2) representatives from the
members of the bargaining unit(which
shall be designated by the union) and at
least two(2) from the employer.

Grievance Procedure
The following procedures shall be observed, UNLESS a
different procedure is prescribed in the collective bargaining
agreement:
a. - An employee shall present his grievance or
complaint orally or in writing to the shop steward.
- Upon receipt thereof, the shop steward shall
verify the facts and determine whether or not the
grievance is valid.
b. - if the grievance is VALID, the shop steward shall
immediately bring the complaint to the employees
immediate supervisor.
- the shop steward, the employee and his
immediate supervisor shall exert efforts to settle the
grievance at their level.
c. if No settlement is reached, the grievance shall
be referred to the grievance committee which shall have
ten (10) days to decide the case.
Grievance Handling - Part of the Collective Bargaining
Process
- it is a continuous process
- the duty to bargain collectively imposes
upon the parties during the term of their
agreement to meet and confer promptly
and expeditiously ad in good faith for the
purpose of adjusting any grievance or
question arising under such agreement.
Voluntary Arbitration
- is a system whereby the parties agree to
refer their dispute to an impartial third
person for a final and binding resolution,
UNLIKE in compulsory arbitration in
which the third party is appointed by the
government.
ART.261.Jurisdiction of Voluntary Arbitrators or Panel of
Voluntary Arbitrators.- The Voluntary Arbitrator or panel
of Voluntary Arbitrators shall have original and
exclusive jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or
implementation of the Collective Bargaining Agreement
and those arising from the interpretation or
enforcement of company personnel policies referred to
in the immediately preceding article. Accordingly,
violations of a Collective Bargaining Agreement,
except those which are gross in character, shall no
longer be treated as unfair labor practice and shall be
resolved as grievances under the Collective Bargaining
Agreement. For purposes of this article, gross
violations of Collective Bargaining Agreement shall
mean flagrant and/or malicious refusal to comply with
the economic provisions of such agreement.
The Commission, its Regional Offices and the Regional
Directors of the Department of Labor and Employment
shall not entertain disputes, grievances or matters
under the exclusive and original jurisdiction of the
Voluntary Arbitrator or panel of Voluntary Arbitrators
and shall immediately dispose and refer the same to
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 55
Atty. Paulino Ungos
the Grievance Machinery or Voluntary Arbitration
provided in the Collective Bargaining Agreement.
COMMENT:
Voluntary Arbitrator
- is a person accredited as such by the
National Conciliation and Mediation
Board;or
- any person chosen or designated by the
parties in the collective bargaining
agreement;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 who 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, whose function
is to resolve the disputes submitted to it
by the parties.
Jurisdiction of Voluntary Arbitrators
Original and Exclusive Jurisdiction
a. unresolved grievance arising from interpretation or
implementation of a collective bargaining
agreement;
b. unresolved grievance arising from interpretation or
enforcement of company personnel policies;
c. disputes arising from wage distortion caused by
the application any wage order in organized
establishments; and
d. disputes arising from interpretation and
implementation of the productivity incentive
programs under RA No. 6971
Jurisdictional Preconditions
A voluntary arbitrator can acquire jurisdiction over
the foregoing disputes only when the following conditions
have been complied with:
a. the dispute has been brought to the grievance
machinery for resolution;
b. the grievance machinery failed to resolve the
dispute; and
c. the parties agree to submit the dispute for
voluntary arbitration.
Jurisdiction Over Termination Disputes
General Rule:
Disputes over the validity of dismissal or severance of
employment do not fall within the jurisdiction of voluntary
arbitrators BUT within the original and exclusive jurisdiction
of the Labor Arbiter.
Exception:
Disputes over the validity of dismissal or severance of
employment will fall within the jurisdiction of voluntary
arbitrators only when the issue pertains to interpretation or

implementatation of a collective bargaining agreement or
company personnel policy.
Case involving interpretation or implementation of
collective bargaining agreemen or company personnel
policies vs. case involving termination
Where the dispute is just in the interpretation,
implementation or enforcement stage, it may
be referred to the GRIEVANCE MACHINERY
set up in the collective bargaining agreement
OR to VOLUNTARY ARBITRATION.
Where there was already actual termination,
i.e., violation of rights, it is already cognizable
by the LABOR ARBITER.
CASE: Sanyo Philippines Workers Union v. Canizares
211 SCRA 361
FACTS:PSSLU had an existing collective bargaining with
Sanyo Philippines, Inc. which contains a union security
clause. On account of anti-union activities, disloyalty and
for joining another union, PSSLU expelled twelve (12)
employees from the Union. As a result, PSSLU
recommended the dismissal of said employees pursuant to
the aforequoted union security clause in the CBA. Sanyo
approved the recommendation and considered the said
employees dismissal. The dismissed employees filed with
the Arbitration Branch of the NLRC a complaint for illegal
dismissal. PSSLU maintained that the jurisdiction belonged
to the voluntary arbitrator.
ISSUE: Whether or not the voluntary arbitrator has
jurisdiction over the case.
HELD: The voluntary arbitrator has no jurisdiction over the
case. There is no grievance between the union and
management which could be brought to the grievance
machinery. The dispute is between PSSLU and Sanyo, on
the one hand, and the dismissed union members, on the
other hand. The dispute, therefore, does not involve
interpretation or implementation of a collective bargaining
agreement.
CASE: Pantranco North Express Inc. v. NLRC 259
SCRA 161
FACTS: X, who was a member of Pantranco Employees
Association-PTGWO, was employed by PNEI as bus
conductor. He continued in the employ of PNEI until August
12, 1989, when he was retired at the age of 52 and after
having rendered 25 years of service. The basis of his
retirement was the compulsory retirement provision in the
collective bargaining agreement between PNEI and the
Pantranco Employees Association-PTGWO. Claiming that
his retirement was tantamount to dismissal, X filed with the
Arbitration Branch of the NLRC a complaint for illegal
dismissal. PNEI challenged the jurisdiction of the Labor
Arbiter on the ground that the dispute concerns a provision
of the CBA and its interpretation, the jurisdiction of which
falls under the voluntary arbitrator.
ISSUE: Whether or not the voluntary arbitrator has
jurisdiction over the case.
HELD:The voluntary arbitrator has no jurisdiction over the
case. No dispute exists between the Union and PNEI, so as
to create a grievance, because both have previously
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 56
Atty. Paulino Ungos
agreed the compulsory retirement of X as embodied in the
CBA. It was only X on his own who questioned the
compulsory retirement. Thus, this case is properly
denominated as termination dispute which comes under
the original and exclusive jurisdiction of labor arbiters.
CASE: Maneja v. NLRC 290 SCRA 603
FACTS: X was employed as Telephone Operator of Manila
Midtown Hotel. She was dismissed from her employment
for committing the following violations of Offenses Subject
to Disciplinary Actions (OSDA), namely: falsifying official
documents and culpable carelessness-negligence or failure
to follow specific instructions or established procedures. X
filed a complaint for dismissal with the Arbitration Branch of
the NLRC. The Hotel challenged the jurisdiction of the
Labor Arbiter on the ground that the case falls within the
jurisdictional ambit of the grievance procedure and
voluntary arbitration under the CBA.
ISSUE: Whether or not the Labor Arbiter has jurisdiction.
HELD: The Labor Arbiter has jurisdiction. The dismissal of
X does not call for the interpretation or enforcement of
company personnel policies but is a termination dispute
which comes under the jurisdiction of the Labor Arbiter.
ART. 262.Jurisdiction over other labor disputes.- The
Voluntary Arbitrator or panel of Voluntary Arbitrators,
upon agreement of the parties, shall also hear and
decide all other labor disputes including unfair labor
practices and bargaining deadlocks.
COMMENT:
The Import of the Phrase all other labor disputes
- May include termination disputes,
provided that the parties conform to the
submission of termination disputes to
voluntary arbitration.
- There is a need for an express stipulation
in the collective bargaining agreement
that the termination disputes should be
resolved by a Voluntary Arbitrator or
Panel of Voluntary Arbitrators,
considering that termination disputes fall
within a special class of disputes that are
generally within the exclusive original
jurisdiction of Labor Arbiters by express
provision of law.
- Without such express stipulation, the
phrase all disputes should be construed
as limited to the areas of conflict
traditionally within the jurisdiction of
Voluntary Arbitrators, i.e., disputes
relating to contract-interpretation,
contract-implementation, or interpretation
or enforcement of company personnel
policies.
- Termination disputes not falling within
any of these categories should then be
considered as a special area of interest
governed by a specific provision of law.

Agreement of the Parties is Necessary to Confer
Jurisdiction
- The jurisdiction of the voluntary arbitrator
over the dispute(particular labor dispute)
is acquired upon receipt of the
Submission Agreement duly signed by
both parties(express and specific
agreement).
- HOWEVER, even WITHOUT an express
agreement between the parties, no one
can arrogate into the powers of Voluntary
Arbitrators the original and exclusive
jurisdiction of Labor Arbiters over unfair
labor practices, termination disputes, and
claims for damages.
CASE: San Miguel Corporation v. NLRC 255 SCRA 133
FACTS:SMC terminated the services of several
mechanics, machinists, and carpenters on the ground of
redundancy. As a result, the Union filed with the Arbitration
Branch of the NLRC a complaint for unfair labor practice
and illegal dismissal against SMC. SMC moved for the
dismissal of the complaint on the ground that the Labor
Arbiter has no jurisdiction over the subject matter of the
complaint. SMCs thesis is that the dispute as to the
termination of the union members and the unfair labor
practice should be settled by voluntary arbitration, and not
by the labor arbiter following the provision of the CBA,
which ought to be treated as the law between the parties.
Additionally, SMC theorized that since the Union
questioned the discharges, the main question is whether
SMC had the prerogative to effect the discharges on the
ground of redundancy, and this necessarily calls for the
interpretation or implementation of Article III (Job Security)
in relation to Article IV (Grievance Machinery) of the CBA.
HELD: SMCs contention is not meritotious because:
a. There is no agreement whatsoever between SMC
and the Union that would state in unequivocal
language that they conform to the submission of
termination disputes and unfair labor practice to
voluntary arbitration.
b. SMC cannot validly invoke Section 2, Article III to
show that the dispute is proper subject of
grievance because the Union did not exercise its
right to seek reconsideration of SMCs move to
terminate the services of the employees
concerned.
c. There is no connection whatsoever between
SMCs management prerogative to effect the
discharges and the interpretation or
implementation of Article III and IV of the CBA.
Hence, the Union acted well within its right in filing the
complaint for illegal dismissal with the Labor Arbiter.
The termination disputes are matters falling under the
original and exclusive jurisdiction of the Labor Arbiter.
ART. 262-A. Procedures.- The Voluntary Arbitrator or
panel of Voluntary Arbitrators shall have the power to
hold hearings, receive evidences and take whatever
action is necessary to resolve the issue or issues
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 57
Atty. Paulino Ungos
subject of the dispute, including efforts to effect a
voluntary settlement between parties.
All parties to the dispute shall be entitled to attend the
arbitration proceedings. The attendance of any third
party or the exclusion of any witness from the
proceedings shall be determined by the Voluntary
Arbitrator or panel of Voluntary Arbitrators. Hearing
may be adjourned for cause or upon agreement by the
parties.
Unless the parties agree otherwise, it shall be
mandatory for the Voluntary Arbitrator or panel of
Voluntary Arbitrators to render an award or decision
within twenty (20) calendar days from the date of
submission of the dispute to voluntary arbitration.
The award or decision of the Voluntary Arbitrator or
panel of Voluntary Arbitrators shall contain the facts
and the law on which it is based. It shall be final and
executory after ten (10) calendar days from receipt of
the copy of the award or decision by the parties.
Upon motion of any interested party, the Voluntary
Arbitrator or panel of Voluntary Arbitrators or the
Labor Arbiter in the region where the movant resides,
in case of the absence or incapacity of the Voluntary
Arbitrator or panel of Voluntary Arbitrators, for any
reason, may issue a writ of execution requiring either
the sheriff of the Commission or regular courts or any
public official whom the parties may designate in the
submission agreement to execute the final decision,
order or award.
COMMENT:
Scope of Arbitration Awards
- The power and authority of voluntary
arbitrators to decide a case is limited to
those matters which have been
submitted to them for arbitration.
Judicial Review of Arbitration Awards
- Decisions or awards of voluntary
arbitrations are appealable to the Court
of Appeals.
- The state of our present law relating to
voluntary arbitration provides that the
award or decision of the Voluntary
Arbitrator x xx shall be final and
executory after 10 calendar days from
receipt of the copy of the award or
decision by the parties, while the
decisions,awards, or orders of the Labor
Arbiters are final and executory unless
appealed to the Commission by any or
both parties within 10 calendar days from
receipt of such decisions, awards, or
orders.
- Hence, while there is an express mode of
appeal from the decision of labor arbiter,
RA No. 6715 is silent with respect to an
appeal from the decision of a voluntary
arbitrator.

Power to Enforce Arbitration Awards
- The Voluntary Arbitrator has the power
to:
a. Issue writ of execution
b. May require the sheriff of the NLRC
or the regular courts or any public
official whom the parties may
designate in the submission
agreement, to execute the arbitration
award.
- In the ABSENCE of Voluntary Arbitrator
or in case of his INCAPACITY, the
motion for issuance of writ of execution
may be filed with the Labor Arbiter in the
region having jurisdiction over the
workplace.
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 voluntary arbitration
including the Voluntary Arbitrators fee. The fixing of
fee of Voluntary Arbitrators, whether shouldered
wholly by the parties or subsidized by the Special
Voluntary Arbitration Fund, shall take into account the
following factors:
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; and
e. Fees provided for in the Revised Rules of
Court.
COMMENT:
Voluntary Arbitrators Fee and Arbitration Cost
- Unless the parties agree otherwise, the
cost of voluntary arbitration proceedings
and voluntary arbitrators fee shall be
shared EQUALLY by the parties.
- If their funds is INSUFFICIENT, they may
avail of the subsidy under the Special
Voluntary Arbitrators Fund.
Title VIII
Strikes and Lockouts and Foreign Involvement in Trade
Union Activities
CHAPTER I
Strikes and Lockouts
Art. 263. Strikes, Picketing and Lockouts. (a) It is the
policy of the State to encourage free trade unionism
and free collective bargaining.
(b) Workers shall have the right to engage in concerted
activities for purposes of collective bargaining or for
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 58
Atty. Paulino Ungos
their mutual benefit and protection. The right of
legitimate labor organizations to strike and picket and
of employers to lock-out, consistent with the national
interest, shall continue to be recognized and
respected. However, no labor union may strike and no
employer may lockout on grounds involving inter-
union and intra-union disputes.
(c) In cases of bargaining deadlocks, the duly certified
or recognized bargaining agent may file a notice of
strike or the employer may file a notice of lockout with
the Ministry at least 30 days before the intended date
thereof. In cases of unfair labor practice, the period
notice shall be 15 days and in the absence of a duly
certified or recognized bargaining agent, the notice of
strike may be filed by any legitimate labor organization
in behalf of its members. However, in case of dismissal
from employment of union officers duly elected in
accordance with the union constitution and by-laws,
which may constitute union busting where the
existence of the union is threatened, the 15-day cooling
off period shall not apply and the union may take
action immediately.
(d) The notice must be in accordance with such
implementing rules and regulations as the Minister of
labor and Employment may promulgate.
(e) 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.
(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 the purpose. A
decision to declare a lockout must be approved by the
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 the
purpose. The decision shall be valid for the duration of
the dispute based on substantially the same grounds
considered when the strike or lockout vote was taken.
The Ministry may, at its own initiative or upon the
request of any affected party, supervise the conduct of
the secret balloting. In every case, the union or the
employer shall furnish the Ministry the results of the
voting at least seven days before the intended strike or
lockout, subject to the cooling-off period herein
provided.
(g) When, in his opinion, there exists a labor dispute
causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the
Secretary of Labor and Employment may assume
jurisdiction over the dispute and decide it or certify the
same to the Commission for compulsory arbitration.

Such assumption or certification shall have the effect
of automatically enjoining the impending strike or
lockout as specified in the assumption or certification
order. If one has already taken place at the time of the
assumption or certification, all striking or locked out
employees shall immediately return to work and the
employer shall immediately resume operations and
readmit all workers under the same terms and
conditions prevailing before the strike or lockout. The
Secretary of Labor and Employment or the
Commission may seek the assistance of law
enforcement agencies to ensure compliance with this
provision as well as with such orders as he may issue
to enforce the same.
In line with the national concern and the
highest respect accorded to the right of patients to life
and health, strikes and lockouts in hospitals, clinics
and similar medical institutions shall, to every extent
possible, be avoided, and all serious efforts, not only
by labor and management but government as well, be
exhausted to substantially minimize, if not prevent,
their adverse effects on such life and health, through
the exercise, however legitimate, by labor of its right to
strike and by management to lockout. In labor disputes
adversely affecting the continued operation of such
hospitals, clinics or medical institutions, it shall be the
duty of the striking union or locking-out employer to
provide and maintain an effective skeletal force of
medical and other health personnel, whose movement
and services shall be unhampered and unrestricted, as
are necessary to insure the proper and adequate
protection of the life and health of its patients, most
especially emergency cases, for the duration of the
strike or lockout. In such cases, therefore, the
Secretary of Labor and Employment may immediately
assume, within twenty-four (24) hours from knowledge
of the occurrence of such a strike or lockout,
jurisdiction over the same or certify it to the
Commission for compulsory arbitration. For this
purpose, the contending parties are strictly enjoined to
comply with such orders, prohibitions and/or
injunctions as are issued by the Secretary of Labor and
Employment or the Commission, under pain of
disciplinary action, including dismissal or loss of
employment status or payment by the locking out
employer of backwages, damages and other affirmative
relief, even criminal prosecution against either or both
them.
The foregoing notwithstanding, the President
of the Philippines shall not be precluded from
determining the industries that, in his opinion, are
indispensable to the national interest, and from
intervening at any time and assuming jurisdiction over
any such labor dispute in order to settle or terminate
the same.
(h) Before or at any stage of the compulsory arbitration
process, the parties may opt to submit their dispute to
voluntary arbitration.
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 59
Atty. Paulino Ungos
(i) The Secretary of Labor and Employment, the
Commission or the voluntary arbitrator shall decide or
resolve the dispute, as the case may be. The decision
of the President, the Secretary of Labor and
Employment, the Commission or the voluntary
arbitrator shall be final and executor ten (10) calendar
days after receipt thereof by the parties.
COMMENT
1. Right to Engage in Concerted Activities
Workers shall have the right to engage in
concerted activities for purposes of collective bargaining or
for their mutual benefit and protection. The more common
forms of concerted activities are: a.) strikes; b.) picketing;
and c.) boycotts.
2. Strike
Strike is any temporary stoppage of work by the
concerted action of employees as a result of an industrial or
labor dispute.
The requisites of a strike are as follows:
a.) temporary; and
1
b.) the result of a labor dispute.
Mass resignation of employees in protest of the
dismissal of an employee is not a strike because the
stoppage of work, although resulting from a labor dispute,
is not temporary. The refusal of employees to work for the
purpose of joining a mass demonstration to protest police
abuses likewise does not constitute a strike.
CASES
ALPAP vs. CIR
76 SCRA 274
The members of ALPAP staged a strike against PAL, the
result of which the President of the Philippines certified the
labor dispute to the Court of Industrial Relations. The CIR
then issued a return-to-work order. The strikers returned to
work except for two, one of whom was Capt. FG. PAL
terminated his services. In reaction, a substantial majority
of ALPAP members threatened to resign en masse, which
they eventually did. Later on 21 pilots filed a petition
praying for readmittance or at least be allowed to retire with
benefits, stating that the mass resignation was a strike.
Issue: W/N the mass resignation was a strike.
Held: NO. The law defines strike as any temporary
stoppage of work by the concerted action of employees
resulting from an industrial dispute. A strike means only a
temporary stoppage of work. What the pilots contemplated
was evidently a permanent cut-off of employment
relationship with their employer, PAL.
1
Labor dispute is 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.

PBMEO vs. Philippine Blooming Mills
51 SCRA 189
PBMEO decided to stage a mass demonstration at the
Malacaang to protest the abuses of the Pasig police.
Workers from the first, second and third shifts were to
participate. PBM objected against the utilization of the
workers in the first shift, but PBMEO still included these
workers among the protestants. The Company filed a
complaint against PBMEO for the violation of the No Strike-
No Lockout clause of the CBA.
Issue: W/N the mass demonstration is a strike.
Held: NO. Although there was temporary stoppage of work,
there was no labor dispute involved. The mass
demonstration was not directed against the employer but
against the police. This was an exercise of the workers
freedom of expression.
Gold City vs. NLRC
245 SCRA 628
Employees of Gold City who were members of the MLU-
FFW stopped working, walked out and gathered in a mass
th
action to protest regarding wages, 13 month pay and
hazard pay. Gold City filed a complaint for illegal strike.
Issue: W/N the mass action was a strike or a mere protest
action?
Held: THE ACTION WAS A STRIKE. The cessation of
work resulted from a labor dispute. The employees stopped
working precisely to press for wages and benefits.
The law does not favor strikes because of their
disturbing and pernicious effects upon social order and
public interest. The employer company is on the defensive
and wants the strike stopped and the strikers back to work
so as to resume and continue production. Because of this
threat or danger of loss to the company, frequently it gives
in to the demands of the strikers just so it can maintain the
continuity of production.
2.1 Kinds of Strikes.
In general:
a.) Unfair labor strike
b.) Economic strike
Unfair labor strike is a concerted activity staged as a result
of the employers unfair labor practice. To be considered
as unfair labor strike, it is not necessary that the employer
should actually commit an unfair labor practice. It is enough
that the strikers believe in good faith that the employer has
committed ULP.
Economic strike is a concerted activity staged to force
wage or other concessions from the employer which he is
not required by law to grant.
An economic strike may subsequently turn into a ULP strike
if in the process, the employer commits ULP against the
strikers.
2.2 Forms of Strikes
By Manner of Execution
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 60
Atty. Paulino Ungos
a.) Walk-out a form of strike where the
employees leave their workplace and establish themselves
outside the plant and refuse access to the owners and
other employees who want to work.
b.) Sit-down a form of strike where the strikers
establish themselves within the plant, stop its production
and refuse access to the owners and other employees who
want to work.
c.) Slowdown a form of strike where strikers
merely retard production
d.) Mass leave a form of strike where the strikers
take time-off from work simultaneously.
e.) Wildcat a strike staged without the sanction
or authorization of the union.
As To The Employer Directed Against
a.) Primary strike directed against the employer
because of a labor dispute with him.
b.) Secondary strike directed against the
employer connected by product or employment with alleged
unfair labor conditions or practices. (E.g., where a
manufacturer engages in ULP and the employees of its
distributors stage a strike against it.)
c.) Sympathy strike a strike staged to make
common cause with other strikers in other establishments
or companies, without the existence of any dispute
between the striking employees and their employer. There
need not be a connection of product or employment in this
kind of strike.
d.) General strike directed against all the
employers, participated in by the workmen irrespective of
the employers for whom they are working.
e.) Particular strike directed solely against the
strikers employer.
2.3 Requisites of a Valid Strike
a.) It should be staged by a certified or duly
recognized collective bargaining representative or in the
absence thereof, by a legitimate labor organization;
b.) It should be declared only on grounds specified
by law;
c.) It should comply with the requirements
prescribed by law.
2.3.1 Employees in Unorganized Establishments
cannot Strike
Only a certified or duly recognized collective
bargaining representative can declare a strike, whether an
economic or ULP strike. In the absence of a duly certified
or recognized collective bargaining representative, a
legitimate labor organization in the establishment can
declare a strike but ONLY on grounds of ULP. Employees
of establishments without unions cannot strike.
2.3.2 Legal Grounds for Declaring a Strike
2
a.) Collective bargaining deadlock
2
Collective bargaining deadlock the situation between the labor
and management of the company where there is failure in the
collective bargaining negotiations resulting in a stalemate. There is

3
b.) Unfair labor practice
Any strike founded on other grounds is illegal.
2.3.3 Legal Requirements of a Strike
a.) Notice of strike
b.) Strike vote
c.) Strike vote report
Failure to comply with any of these requirements will render
the strike illegal.
2.4 Notice of Strike
Filed with the Regional Branch of the National Conciliation
and Mediation Board and served to the company, at least:
a.) 30 days before the intended date of strike if
the ground for strike is based on collective bargaining
deadlock
b.) 15 days before the intended date of strike if
the ground for strike is based on ULP.
2.5 Cooling-off Period
Cooling-off Period is the span of time allotted by law for the
parties to settle their disputes in a peaceful manner before
declaring a strike.
a.) 30 days from filing of the notice of strike if the
ground for the strike is CBD
b.) 15 days from filing of the notice of strike if the
ground for strike is ULP
Observance of the cooling-off period is mandatory. Strikes
which violate the cooling-off period are illegal.
Exception: When in case of ULP involving the dismissal
from employment of a union officer duly elected which may
constitute union busting and the existence of the union is
threatened, the 15-day cooling-off period need not be
observed and the union may strike after the strike vote is
conducted and reported to the regional branch of the
NCMB.
2.6 Strike Vote
The decision to declare a strike must be approved
by the majority of the total union membership in the
bargaining unit concerned, through secret ballot in a
meeting or referendum called for the purpose.
The purpose of the strike vote is to ensure that the
intended strike is a majority decision. A strike declared
without the approval of a majority of the total union
membership is illegal.
The decision to declare a strike shall be valid for
the duration of the dispute based on substantially the same
grounds considered when the strike vote was taken.
2.7 Strike Vote Report
a deadlock when there is a complete blocking or stoppage
resulting from the action of equal and opposed forces.
3
ULP are those enumerated in Arts 248 and 249. Violations of the
collective bargaining agreement is considered ULP only if it is
flagrant and/or malicious refusal to comply with the economic
provisions of the CBA.
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 61
Atty. Paulino Ungos
The report is filed with the regional branch of the
NCMB at least 7 days before the intended strike.
The purpose of the report is to give assurance that
a strike vote has been taken and also to enable the majority
of the union members to take the appropriate remedy
before it is too late, if such report turns out to be false.
2.8 7-Day Strike Ban
This is the 7-day period reckoned from the
submission of the strike vote report. The union cannot
strike during this period. This is a reasonable exercise of
police power. In computing the period, the first day shall be
excluded and the last day included.
2.9 Declaration of Strike
The union may go on strike if after the lapse of the
cooling-off period and the 7-day strike ban, if the dispute
remains unsettled. The NCMB shall continue mediating and
conciliating.
2.10 Strikes in Medical Institutions
Strikes in medical institutions are strongly
discouraged because of their effects on the life and health
of patients. Should a strike be declared, the union must
provide and maintain an effective skeletal workforce whose
movement and services shall be unhampered and
unrestricted. The Secretary of Labor and Employment may
immediately assume jurisdiction over the dispute or certify it
to compulsory arbitration within 24 hours from knowledge of
the occurrence of the strike.
2.11 Return-to-Work Order
Strikers are bound to immediate comply with the
RTWO issued by the Secretary even if an MR has been
filed. A RTWO is immediately executor. It is a matter of
obligation. Strikers who defy a RTWO may be declared to
have lost their employment status. This does not violate the
constitutional provision against involuntary servitude.
2.12 Employment Status of Strikers
The mere participation of a worker in a lawful
strike is not a ground for termination of employment, even if
the employer had hired a replacement during such lawful
strike.
2.13 Reinstatement of Strikers
General Rule: Striking employees are entitled to
reinstatement, whether or not the strike was the
consequence of the employers ULP.
Exceptions:
a.) Union officers who knowingly participate in an
illegal strike;
b.) Union officers or members who knowingly
participate in the commission of illegal acts during the
strike;
c.) Strikers who defy a RTWO
2.14 Wages During Strike

General Rule: Strikers are not entitled to their wages during
the period of the strike even if the strike is legal, following
the concept of a fair days wage for a fair days labor.
Exceptions:
Backwages may be awarded:
a.) When the supposed strikers did not strike but
were locked out;
b.) Where the strikers voluntarily and
unconditionally offered to return to work, but the employer
refused to accept the offer without justifiable reason
2.15 Legality of a Strike
a.) If the purpose is lawful and the means
employed are lawful, the strike is LEGAL.
b.) If declared for both a legal and illegal purpose,
the strike is ILLEGAL in its entirety.
c.) If the purpose is lawful but the means
employed are unlawful, the strike is ILLEGAL.
A strike is not rendered illegal by the mere fact
that the demands of the union are unreasonable. The
legality of a strike does not depend upon the
reasonableness of the demands. If the demands cannot be
granted, they should be rejected. Also, the mere fact that
the demands of the union were rejected does not make the
strike illegal.
A strike staged in good faith that the management
committed ULP is not illegal. It suffices if such belief in
good faith is entertained by labor as the inducing factor for
staging a strike. An unsubstantiated claim of good faith is
not enough; it should be supported by factual basis.
However, the requirements of the notice of strike
and the strike vote must still be complied with, else the
strike will be declared illegal even if the union acted on
good faith on the belief that management committed ULP.
2.16 Illegal Strike
The following strikes have been held illegal:
a.) Strike staged on grounds other than those prescribed by
law{a.) CBD and b.) ULP}
Arica vs. Minister of Labor
137 SCRA 267
xxx Section 1 of PD 823 states: However, any legitimate
labor union may strike and any employer may lock out in
establishments not covered by General Order No. 5 only on
grounds of unresolved economic issues in collective
bargaining, in which case the union or the employer shall
file a notice with the BLR at least 30 days before the
intended strike or lockout. xxx
The Union went on strike not on grounds of unresolved
economic issues in collective bargaining. The Union struck
against the alleged ULP of the management for not paying
50% of the signing bonus; the Unions strike cannot be a
ULP strike or an economic strike. The strike was illegal.
b.) Strike staged without complying with any of the legal
requirements of the strike {a.) notice of strike; b.) strike vote
and c.) strike vote report; a strike is illegal without
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 62
Atty. Paulino Ungos
complying with any of these requirements even if the
deficiency is only for one day}
Reliance Surety vs. NLRC
193 SCRA 365
The strike in question was illegal, for failure of the strikers
to comply with the legal strike requirements: a.) as to the
15-day notice; b.) as to the 2/3 required vote to strike done
by secret ballot; c.) as to the submission of the strike vote
to the DOLE at least 7 days prior to the strike.
c.) Strike declared before the lapse of the cooling-off period
or the 7-day strike ban {The requirement of the cooling-off
period AND the 7-day strike ban is mandatory. The strike
vote may be taken and reported within the cooling-off
period.}
NFSW vs. Ovejera
114 SCRA 354
The NFSW declared the strike 6 days after a strike notice,
i.e., before the lapse of the mandatory cooling-off period. It
also failed to file with the MOLE before launching the strike
a report on the strike vote when the report should have
been filed at least 7 days before the intended strike. The
strike is illegal.
d.) Strike declared after the Secretary of Labor and
Employment has assumed jurisdiction over the dispute or
certified the same for compulsory arbitration {This is a
violation of Art 264 (a) of the Labor Code.}
Union of Filipro vs. Nestle
192 SCRA 396
A strike undertaken despite the issuance by the Secretary
of Labor of an assumption or certification order becomes a
prohibited activity and thus illegal, pursuant to the second
paragraph of Art 264 of the Labor Code, as amended.
e.) Strike declared after the notice of strike has been
converted into preventive mediation {This is illegal because
the notice of strike has ceased to be such upon its
conversion; hence, it is as if no notice of strike has been
filed.}
PAL vs. Secretary of Labor
193 SCRA 223
The NCMB declared the notice of strike as appropriate for
preventive mediation. The declaration was not moved for
reconsideration or set aside by the PALEA. This dropped
the case from the docket of notice of strikes as provided in
Rule 41 of NCMB rules, as if there was no notice of strike.
During the pendency of preventive mediation, no strike
could be legally declared.
f.) Strike carried out with the use of force, violence, physical
injuries, sabotage and unnecessary obscene language
{This is illegal because it is violative of Art 264(e) of the
Labor Code. The Constitution also only guarantees
peaceful concerted activities.}
Liberal Labor Union vs. Philippine Can Co.
91 Phil. 72

The strikers, particularly the top officials of the union, all
committed coercion, force, intimidation, violence with
physical injuries, sabotage and used unnecessary and
obscene language. A strike under these circumstances
cannot be justified in a regime of law.
g.) Strike staged in violation of the no-strike stipulation of a
CBA {A strike will be illegal for violation of a no-strike
stipulation only if it is an economic strike. If the strike is
based on ULP, the no-strike stipulation is not violated.}
Philippine Metal Foundries vs. CIR
90 SCRA 135
The strike declared by the Union was not considered a
violation of the no-strike clause of the CBA because it was
due to ULP committed by the employer.
h.) Strike staged without giving the employer ample time to
consider and act on the demands of the union {Illegal
because of unreasonableness.}
INSUREFCO Paper vs. INSUREFCO
95 Phil. 761
The walkout was declared premature because it was done
without giving the General Manager or the BoD of the
company reasonable time within which to consider and act
on the demands submitted by the Union. The strike staged
by the Union was unfortunate, ill-considered, considering
the great damage caused to the business of the refinery
resulting from the complete paralyzation of its operations.
The strike was rightly declared illegal.
i.) Strike without exhausting or availing of the grievance
machinery under the CBA {The illegality of such a strike will
be declared even if management failed to do its duty in
connection with the formation of the grievance committee.
A Union is duty bound to exhaust all available means within
its reach before resorting to force.}
Liberal Labor Union vs. Philippine Can Co.
91 Phil. 72
The strike staged on March 14, 1949 was illegal. The main
purpose of the parties for adopting a procedure in the
settlement of disputes is to prevent a strike. Even if the
management failed to do its duty in connection with forming
the grievance committee, still the union did not have the
right to declare a strike for its duty is to exhaust all available
means within its reach before resorting to force.
j.) Strike staged without first resorting to pacific means
provided by law {Illegal because it is unreasonable.}
National Labor Union vs. Philippine Match Factory
70 Phil. 300
When the petitioners declared a strike even before the
outcome of the investigation had been announced and
without previously resorting to the pacific means provided
by law, they have acted unreasonably.
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 63
Atty. Paulino Ungos
k.) Strike declared to correct wage distortion {Strike is not
the remedy prescribed by law to correct wage distortion.}
Ilaw at Buklod ng Manggagawa vs. NLRC
198 SCRA 586
The legislative intent that solution of the problem of wage
distortion shall be sought by voluntary negotiation or
arbitration and not by strikes, lockouts or other concerted
activities of the employees or management, is made clear
in the IRR of RA 6727. The Union was thus prohibited to
declare and hold a strike or otherwise engage in non-
peaceful concerted activities for the settlement of its
controversy with SMC in respect of wage distortions, or for
that matter; any other issue involving or relating to wages,
hours of work, conditions of employment and/or employee
relations.
l.) Strike staged to compel an employer to negotiate a
collective bargaining agreement during the pendency of a
petition for certification election {This is illegal because
during the pendency of a certification election proceeding,
the duty to bargain collectively does not exist.}
LAKAS vs. Marcelo
118 SCRA 422; 449
There was a legitimate representation issue confronting
respondent company. There was no duty to collectively
bargain with LAKAS. All the acts instigated by LAKAS such
as filing the notice of strike and the two strikes of
September 4, 1967 and November 7, 1967 were
calculated, designed and intended to compel respondent to
recognize or bargain with it notwithstanding that it was an
uncertified union.
m.) Strike staged by a minority union to compel the
employer to bargain with it despite the existence of a
certified bargaining agent {This is illegal because no labor
dispute can exist between an employer and a minority
union.}
n.) Strike declared for trivial, unjust or unreasonable
purpose {Illegal because of its unlawful purpose.}
o.) Strike on a simple violation of the CBA {An LO cannot
strike on a simple violation of the CBA because such
violation does not constitute ULP.}
p.) Strike on grounds involving inter-union or intra-union
disputes {This is illegal because this violates Art 263(b) of
the Labor Code. Only gross violations of the CBA are
treated as ULP.}
q.) Strike declared without first having bargained
collectively {Illegal because it violates Art 264(a) of the
Labor Code.}
2.16 Sanction for Illegal Strike
The Current Doctrine

An Illegal strike does not automatically warrant the
wholesale dismissal of strikers. Only the following strikers
can be penalized with loss of employment status:
a.) Union officers who knowingly participate in an
illegal strike;
b.) Union officers or members who knowingly
participate in the commission of illegal acts during a strike.
Illegal acts include violence, physical injuries,
coercion, intimidation, possession of deadly weapon,
obstruction of the free ingress to and egress from the
employers premises and defiance of RTWO or
assumption/certification order.
The law is permissive upon granting to the
employer the option of declaring a union officer who
participated in an illegal strike and any striker who
committed illegal acts during the strike as having lost their
employment status.
If the strike is illegal, the employer cannot be
restrained or enjoined from imposing the appropriate
sanctions against the union officers who knowingly
participated in the illegal strike and against any striking
employee who committed illegal acts during the strike.
CASE
PAL vs. Secretary of Labor and Employment
193 SCRA 223
PALEA filed with the NCMB a notice to strike on the
grounds of CBD and ULP. It was found that the real issues
involved: a.) determination of the minimum entry rate; b.)
wage adjustment; c.) retroactive pay. PALEA was informed
that the issues were appropriate only for preventive
mediation. PALEA went ahead to conduct a strike vote.
PAL filed with the Secretary of Labor a petition for
assumption of jurisdiction, which was not acted upon soon
enough. PALEA was able to strike. Then the Secretary
declared the strike valid and admonished PAL against
taking retaliatory measures against the strikers.
Issue: W/N the Secretary could rule on the validity of the
strike and prevent PAL from taking retaliatory action
against the erring strikers.
Held: NO on both accounts. Art 263 of the Labor Code only
authorizes the Secretary to rule on the issues involved in
the labor dispute and not the legality or illegality of the
strike that occurred. This jurisdiction is vested with the
Labor Arbiters. Also, since the strike was illegal, PAL had
the right to take disciplinary action against its guilty
employees.
2.17 Liability for Damages Arising from an Illegal Strike
The best evidence obtainable must be presented
to hold the union and the strikers liable for damages. Actual
or compensatory damages cannot be presumed, but must
be duly proved.
The local union and not the federation are liable
for damages resulting from an illegal strike. This is because
the local union is the principal and the federation is a mere
agent of the union.
2.18 Injunction Against Strikes
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 64
Atty. Paulino Ungos
General Rule: A strike cannot be enjoined even if it may
appear to be illegal.
Exceptions:
a.) If a strike is declared against an industry
indispensable to national interest, wherein the Secretary of
Labor may assume jurisdiction or certify the dispute for
compulsory arbitration. The assumption or certification
automatically enjoins the strike;
b.) If the strike is staged by employees who are
not accorded the right to strike or employees of
government-owned or controlled corporations with original
charters;
c.) If the strike is staged because of an intra-union
or inter-union dispute.
2.19 The Innocent Bystander Doctrine
The doctrine provides that the right to strike and
picket may be regulated at the instance of third parties or
innocent bystanders if it appears that the inevitable result of
its exercise is to create an impression that a labor dispute
to which they have no connection or interest exists between
them and the picketing union or constitute an invasion of
their rights.
The courts can confine or localize the sphere of
communication or the demonstration to the parties to the
labor dispute, including those with related interest and to
insulate establishments or persons with no industrial
connection or having interest totally foreign to the context of
the dispute.
Requisites
1.) Rule 58 of the Rules of Court on Preliminary Injunction
- That the applicant is entitled to the relief
demanded, and the whole part of such relief consists in
restraining the commission or continuance of the act or acts
complained of, or in requiring the performance of an act or
acts, either for a limited period or perpetually;
- That the commission, continuance or non-
performance of the act or acts complained of during the
litigation would probably work injustice to the applicant; or
- That a party, court, agency or a person is doing,
threatening, or is attempting to do, or is procuring or
suffering to be done, some act or acts probably in violation
of the rights of the applicant respecting the subject of the
action or proceeding, and tending to render the judgment
ineffectual.
2.) The applicant is entirely different from, without any
connection whatsoever to, either party to the dispute
3.) Its interests are totally foreign to the context thereof.
CASES
MSF Tire & Rubber vs. CA
311 SCRA 784
PTWU declared a strike against PHILTHREAD. Thereafter,
PHILTHREAD entered into an agreement with Siam Tyre.
PHILTHREADs plant was sold to MSF Tire, 80% of which
is owned by Siam Tyre and 20% owned by PHILTHREAD.
The land on which the plant was located was sold to Sucat
Land, 60% of which was owned by PHILTHREAD and 40%

by Siam Tyre. MSF then asked the Union to desist from
picketing. MSF filed a complaint for Injunction, invoking the
innocent bystander doctrine.
Issue: W/N MSF Tire is entitled to an Injunction?
Held: NO. The contract of sale and transactions between
PHILTHREAD and Siam Tyre reveals a legal relation
between them. MSF has close ties to PHILTHREAD. MSF
cannot be considered an innocent bystander.
PAFLU vs. Cloribel
27 SCRA 465
Metrobank and Galang were lessees of Wellington
Building. PAFLU declared a strike and picketed the
premises of Metrobank. Wellington complained that the
picketers were blocking the common passageway of the
building. Thereafter Wellington and Galang filed a
complaint for Injunction.
Issue: W/N Wellington and Galang are entitled to an
Injunction?
Held: YES. There exists no labor dispute between PAFLU,
Wellington and Galang. The strike was against Metrobank,
an entity entirely different and separate and without any
connection whatsoever with Wellington and Galang.
Liwayway Publications vs. Permanent Concrete
Workers
108 SCRA 161
Petitioner is a sublessee of the premises of Permanent
Concrete. The employees of Permanent Concrete declared
a strike and the strikers picketed, stopped and prohibited
petitioner from entering the compound. Petitioner thus filed
for an Injunction.
Issue: W/N Liwayway is entitled to an Injunction
Held: YES. There is no connection whatsoever between
the strikers and Liwayway Publications apart from the fact
that Liwayway is a sublessee of the employer.
3. Picketing
Picketing is the marching to and fro before the premises of
an establishment involved in a dispute, generally
accompanied by the carrying and display of a sign, placard
or banner bearing statements in connection with the
dispute.
Picketing is a freedom guaranteed by the
Constitution. If peacefully carried out, it cannot be enjoined
even in the absence of employer-employee relationship.
But the courts can confine or localize the demonstrations to
the disputants and insulate establishments with no
industrial connection or interest to the dispute.
3.1 Injunction Against Picketing
General Rule: Picketing cannot be enjoined because it is
part of the freedom of speech.
Exceptions:
a.) If necessary to protect the rights of third parties
or innocent bystanders;
b.) If the picketing is carried out through the use of
illegal means;
c.) If the picketing is carried out through the use of
violence or illegal acts.
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 65
Atty. Paulino Ungos
4. Boycott
Boycott is a combination formed for the purpose of
restricting the market of an individual or group of
individuals.
a.) Primary boycott one which is applied directly and
alone to the offending person by withdrawing from him all
business relations on the part of the organization that
initiated the boycott.
b.) Secondary boycott a combination to exercise coercive
pressure upon the customers of an employer, actual or
prospective, in order to cause them to or withhold or
withdraw patronage from him through fear of loss or
damage to themselves should they deal with him.
- Usually held to be illegal because of the principle
that one not a party to an industrial strife cannot, against
his will, be made an ally of one of the parties for the
purpose of accomplishing the destruction of the other.
5. Lockout
Lockout is the temporary refusal of an employer to furnish
work as a result of an industrial or labor dispute.
Requisites:
The refusal to furnish work must be:
a.) Temporary; and
b.) The result of a labor dispute.
The refusal of an employer to accept the offer of
the strikers to return to work pending resolution of the
legality of the strike does not constitute lockout.
A strike cannot be converted into a lockout by the
mere expedient filing of a notice of offer to return to work
during the pendency of a labor dispute.
5.1 Lockout vs. Shut-down
Lockout Shut-down
- In a lock out, the - In a shut-down, the
plant continues to plant ceases to
operate. operate.
- A shut-down is the
willful act of the
employer himself
following a
complete lockout.
All shutdowns are lockouts, but not all lockouts constitute
shutdowns.
5.2 Requisites of a Valid Lockout
a.) It should be declared only on grounds specified
by law; and
b.) It should comply with the requirements
prescribed by law.
5.3 Legal Grounds for Declaring a Lockout
a.) Collective bargaining deadlock (CBD)
b.) Unfair labor practice (ULP)
5.4 Legal Requirements of a Lockout
a.) Notice of lockout;

b.) Lockout vote;
c.) Lockout vote report
5.5 Notice of Lockout
Filed with the NCMB and served to the union, at least:
a.) 30 days before intended date if the ground is
CBD
b.) 15 days before the intended date if the
ground is ULP
5.6 Cooling-off Period
a.) 30 days from the filing of notice of lockout for
CBD
b.) 15 days from filing the notice of lockout for
ULP
5.7 Lockout Vote
The decision to declare a lockout must be
approved by the majority of the BoD, in case of a
corporation, or the partners in the case of a partnership,
through secret ballot in a meeting called for the purpose.
The employer shall furnish the regional branch of
the NCMB the notice of meeting at least 24 hours before
the holding of such meeting. The NCMB may also
supervise the secret balloting at its own initiative or upon
instance of any affected party.
5.8 Lockout Vote Report
The employer must report the results of the voting
at least 7 days before the intended lockout.
5.9 7-day Lockout Ban
The 7-day period is reckoned from the submission
of the lockout vote report. Observance is mandatory.
5.10 Declaration of Lockout
The employer may declare a lockout if after the
cooling-off period and the 7-day lockout ban, the dispute
remains unsettled. The NCMB shall continue mediating and
conciliating.
5.11 Lockout in Medical Institutions
The employer must provide and maintain an
effective skeletal workforce of medical and health
personnel whose movement and services shall be
unhampered and unrestricted.
The Secretary may immediately assume
jurisdiction over the dispute or certify the same for
compulsory arbitration within 24 hours from knowledge of
the occurrence of the lockout.
5.12 Illegal Lockouts
a.) Lockouts on grounds other than those prescribed by law
b.) Lockouts without complying with any of the legal
requirements
c.) Lockout before the lapse of the cooling-off period or the
7-day lockout ban
d.) Lockout declared after the Secretary of Labor and
Employment has assumed jurisdiction over the dispute or
certified the same for compulsory arbitration
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 66
Atty. Paulino Ungos
e.) Lockout declared without first having bargained
collectively
5.13 Sanction for Illegal Lockout
An employer guilty of illegal lockout may be held
liable for backwages.
6. National Interest Disputes
When, in his opinion, there exists a labor dispute
causing or likely to cause a strike or lockout in an industry
indispensable to the national interest, the Secretary may
assume jurisdiction over the dispute and decide it or certify
the same to the NLRC for compulsory arbitration.
Recommendation of the Undersecretary is not a
condition.
The Secretary may assume jurisdiction over a
labor dispute or certify it for compulsory arbitration even if
there is no actual strike or lockout. The existence of a labor
dispute likely to cause a strike or lockout is enough basis
for the Secretary to assume jurisdiction or to issue a
certification.
Such powers are not undue delegation of
legislative power. It is not an interference with the workers
right to strike. It simply regulates such right.
6.1 Extent of Authority
General Rule:
- Encompasses only the issues in the dispute.
- Cannot rule on the legality of the strike; this
authority and power is with the original and exclusive
jurisdiction of the Labor Arbiter.
- Cannot restrain the employer from taking
disciplinary action against the strikers.
Exception
(Contrast of International Pharmaceutical and the Philippine
Airlines case)
- Before the Secretary may take cognizance of an
issue which falls within the jurisdiction of the Labor
Arbiters, the same must be involved in the labor
dispute itself, or otherwise submitted to him for
resolution. (This is the ruling in the PAL case.
Otherwise, the general rule, the ruling in
International Pharmaceutical, applies.)
- This is one instance where the Secretary
exercises concurrent jurisdiction with the Labor
Arbiter.
6.2 Constitutionality of Article 263(g) of the LC
Articles 263(g) was enacted pursuant to the police
power of the State. The police power need not be expressly
conferred by the Constitution.
6.3 Industries Indispensable to the National Interest
The law does not define industries indispensable
to the national interest. The President and the Secretary of
Labor and Employment have unlimited discretion to
determine such industries. The courts cannot review this
exercise of discretion.
 Arts. 226-286, Labor Code (Labor Relations) 67
Atty. Paulino Ungos

a.) Airline Company

b.) Educational Institutions Art. 264. Prohibited activities. (a) No labor
c.) Drug Company organization or employer shall declare a strike or
d.) Medical Institution lockout without first having bargained collectively in
e.) Export-Oriented Enterprise accordance with Title VII of this Book or without first
f.) Tire Manufacturing Company having filed the notice required in the preceding Article
g.) Mining Company or without the necessary strike or lockout vote first
h.) Brokerage Firm having been obtained and reported to the Ministry.

6.3 Enforcement of Assumption/Certification Orders No strike or lockout shall be declared after

- Such orders are immediately executory and are to be assumption of jurisdiction by the President or the
strictly complied with even during the pendency of an MR Minister or after certification or submission of the
or a petition questioning its validity. dispute to compulsory or voluntary arbitration or
- Upon issuance, the striking workers must therefore cease during the pendency of cases involving the same
and desist from any and all acts that undermine the grounds for the strike or lockout.
authority of the Secretary regardless of the validity of their
claims or motives. Any worker whose employment has been
terminated as a consequence of any unlawful lockout
6.4 Effect of Defiance of Assumption/ Certification shall be entitled to reinstatement with full backwages.
Orders Any union officer who knowingly participates in an
- An assumption/certification order automatically carries a illegal strike and any worker or union officer who
RTWO even if the directive to return to work is not knowingly participates in the commission of illegal
expressly stated in the order. acts during a strike may be declared to have lost his
- Strikers commit an illegal act if they defy the order. employment status: Provided, That mere participation
Consequently, they may be declared to have lost their of a worker in a lawful strike shall not constitute
employment status. sufficient ground for termination of his employment,
- The moment a worker defies an assumption/certification even if a replacement had been hired by the employer
order, he is deemed to have abandoned his employment. during such lawful strike.
The worker may then be validly replaced.
(b) No person shall obstruct, impede, or interfere
CASE with, by force, violence, coercion, threats or
intimidation, any peaceful picketing by employees
St. Scholasticas College vs. Torres during any labor controversy or in the exercise of the
210 SCRA 565 right to self-organization or collective bargaining, or
NAFTEU filed a Notice of Strike against SSC on the ground shall aid or abet such obstruction or interference.
of collective bargaining deadlock. The Secretary assumed
jurisdiction over the dispute. Instead of returning to work, (c) No employer shall use or employ any strike-
the Union filed an MR for the assumption order. The MR breaker, nor shall any person be employed as a strike-
was denied, but the strikers did not comply with the breaker.
directive to return to work.
Issue: W/N SSC can be compelled to accept the strikers (d) No public official or employee, including
who defied the directive. officers and personnel of the New Armed Forces of the
Held: NO. By defying the directive for them to return the Philippines or the Integrated National Police, or armed
work, the strikers were deemed to have abandoned their person, shall bring in, introduce or escort in any
employment. manner, any individual who seeks to replace strikers in
entering or leaving the premises of a strike area, or
Liability for Staging Illegal Liability for Defying work in place of the strikers. The police force shall
Strike Assumption/ keep out of the picket lines unless actual violence or
Certification Order other criminal acts occur therein: Provided, That
- Loss of employment - Loss of employment nothing herein shall be interpreted to prevent any
status is imposed on status is imposed upon all public officer from taking any measure necessary to
union officers who strikers, regardless of the maintain peace and order, protect life and property,
knowingly legality of the strike. and/or enforce the law and legal order. (As amended by
participated n he Executive Order No. 111, December 24, 1986)
strike.
- Loss of employment (e) No person engaged in picketing shall commit
is imposed on union any act of violence, coercion or intimidation or
officers or members obstruct the free ingress to or egress from the
who committed employers premises for lawful purposes, or obstruct
illegal acts during public thoroughfares. (As amended by Batas
the strike. Pambansa Bilang 227, June 1, 1982)
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

1. Limitations on the right to strike or lockout:
A strike or lockout cannot be declared:
A. Without first having bargained collectively
B. Without first having filed the notice of
strike/lockout
C. Without the necessary strike or lockout vote
first having been obtained reported to the
DOLE
D. After the SOLE assumes jurisdiction or
certifies the dispute to compulsory or
voluntary arbitration
E. During the pendency of cases involving the
same grounds for the strike or lockout.
2. Limitations on the right to picket:
Persons or employees engaged in picketing are
forbidden from:
A. committing any act of violence, coercion or
intimidation
B. obstructing the free ingress to and egress from the
employers premises and
C. Obstructing public thoroughfares.
Removal of Illegal Blockade:
v Obstruction in public properties, such as streets,
sidewalks, alleys, may be summarily removed by
the local governments, through their respective
law enforcement authorities without consulting
with the DOLE, because these obstructions are
considered as nuisance per se. Obstructions in
points of egress and ingress of private properties
during a labor dispute may be removed only in
accordance with proper orders issued by the
Office of the SOLE or by the NLRC or its
arbitration branches. They cannot be summarily
demolished by law enforcement authorities.
3. Employment of Strike, Breakers Prohibited
v A strike-breaker is a person who obstructs,
impedes, or interferes with by force, violence,
coercion, threats, or intimidation any peaceful
picketing by employees during any labor
controversy affecting wages, hours or conditions
of work or in the exercise of the right to self-
organization or collective bargaining. Employment
of strike breakers is prohibited under Article 264
(c) of the Labor Code.
4.) Escorting of Replacements
v Article 264 (d) prohibits public officers of
personnel of the Armed Forces of the Philippines,
PNP or any armed person from bringing in or
escorting any individual in entering or leaving the
premises of a strike area to replace striking
employees.
v Prohibition only extends to: the escorting of
individuals in entering or leaving the strike area to
replace the striking employees. If the person
escorted will not replace the strikers, Article 264
(d) is NOT violated.
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 68
Atty. Paulino Ungos
v Example: If the persons escorted are non-striking
employees, no violation is committed because
non-striking employees have the right to enter the
company premises and work, and they will work
not as replacements but as non-striking
employees.
v Likewise, Article 264(d) is not violated if the
escorting of replacements was done beyond the
premises of the strike area.
v What the law prohibits is the escorting of
replacements WITHIN the striking area.
v Striking area - the establishment, warehouses,
depots, plants or offices, sites or premises used
as runaway shops and the immediate vicinity
actually used by the picketing strikers in moving to
and from before all points of entrance to and exit
from said establishment.
ROLE OF POLICE PERSONNEL IN LABOR DISPUTES
v The PNP may be called upon to perform the
limited role of enforcing the laws and legal orders
of duly constituted authorities and maintaining
peace and order to protect life and property during
strikes, lockouts and other labor disputes.
v The peace keeping personnel should not be
stationed in the picket or confrontation line, but in
such place as their presence may deter the
commission of criminal acts from either side. They
should maintain themselves at a distance of 50
meters from the picket line, except, if the 50-m
radius includes a public thoroughfare, in which
case, they may station themselves in such public
thoroughfare for the purpose of insuring the free
flow of traffic.
SERVICE of LAWFUL ORDERS OR WRITS
v The primary concern of the representative of
DOLE, sheriff or representative of the government
agency issuing the order. The role of police is only
supportive. Only when specifically stated and
requested in the order or writ should police
personnel enforce such orders or writs.
REMEDIES
v For violation of Article 264 (a), remedy is TO FILE
with the arbitration branch of the NLRC a
PETITON TO DECLARE THE STRKE OR
LOCKOUT ILLEGAL.
v For violation of Article 264 b, c, d and e - FILE A
PETITON FOR INJUNCTION WITH THE NLRC.
v Criminal action may be filed for any violation of
Article 264 , the penalties of which are set forth in
Art. 272 of the Labor Code.
Art. 265. Improved offer balloting. In an effort to
settle a strike, the Department of Labor and
Employment shall conduct a referendum by secret
ballot on the improved offer of the employer on or
before the 30th day of the strike. When at least a
majority of the union members vote to accept the
improved offer the striking workers shall immediately

return to work and the employer shall thereupon
readmit them upon the signing of the agreement.
In case of a lockout, the Department of Labor and
Employment shall also conduct a referendum by secret
balloting on the reduced offer of the union on or before
the 30th day of the lockout. When at least a majority of
the board of directors or trustees or the partners
holding the controlling interest in the case of a
partnership vote to accept the reduced offer, the
workers shall immediately return to work and the
employer shall thereupon readmit them upon the
signing of the agreement. (Incorporated by Section 28,
Republic Act No. 6715, March 21, 1989)
1.) Referendum on Improved Offer
v Improved offer balloting - a referendum
conducted by the DOLE wherein the strikers vote
by secret ballots on whether to accept the
improved offer of management.
2.) Referendum on Reduced Offer
v Reduced offer balloting - a referendum
conducted by the DOLE wherein the BOD or
trustees or the partners holding the controlling
interest in the case of partnership, vote by secret
ballot on whether to accept the reduced offer of
the strikers.
Art. 266. Requirement for arrest and detention.
Except on grounds of national security and public
peace or in case of commission of a crime, no union
members or union organizers may be arrested or
detained for union activities without previous
consultations with the Secretary of Labor.
1.) Arrest or Detention of Union Officers/Members
GENERAL RULE: union officers, members or
organizers cannot be arrested or detained for
union activities without previous consultations with
the SOLE.
v Consultation is not necessary if the arrest is
made:
A. on grounds of national security and
public peace or
B. In case of commission of a crime
v Thus, any person who obstructs the free ingress
to and egress from the employers premises or
who obstructs public thoroughfares may be
arrested without such consultation. Similarly, any
person who shall have in his possession deadly
weapons such as knives, bolos, blunt or pointed
instruments and firearms or explosives may be
arrested and charged accordingly in court without
consultation with the SOLE/
2.) Filing of Criminal Cases
v Before filing a criminal case relating to or arising
out of a labor dispute, clearance must first be
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 69
Atty. Paulino Ungos
obtained from the DOLE or office of the President.
An injunction order issued in a labor case is
considered as compliance with the clearance
requirement.
Chapter II
ASSISTANCE TO LABOR ORGANIZATIONS
Art. 267. Assistance by the Department of Labor.
The Department of Labor, at the initiative of the
Secretary of Labor, shall extend special assistance to
the organization, for purposes of collective bargaining,
of the most underprivileged workers who, for reasons
of occupation, organizational structure or insufficient
incomes, are not normally covered by major labor
organizations or federations.
Art. 268. Assistance by the Institute of Labor and
Manpower Studies. The Institute of Labor and
Manpower Studies shall render technical and other
forms of assistance to labor organizations and
employer organizations in the field of labor education,
especially pertaining to collective bargaining,
arbitration, labor standards and the Labor Code of the
Philippines in general.
1.) Labor education
v It is the duty of every legitimate labor organization
to implement a labor education program for its
members on their rights and responsibilities as
unionists and as employees.
v It is mandatory for every labor organization to
conduct seminars and similar activities on existing
labor laws, collective agreements, company rules
and regulations and other relevant matters. The
union seminars and similar activities may be
conducted independently or in cooperation with
the DOLE or other labor educational institutions.
Chapter II
ASSISTANCE TO LABOR ORGANIZATIONS
Art. 267. Assistance by the Department of Labor.
The Department of Labor, at the initiative of the
Secretary of Labor, shall extend special assistance to
the organization, for purposes of collective bargaining,
of the most underprivileged workers who, for reasons
of occupation, organizational structure or insufficient
incomes, are not normally covered by major labor
organizations or federations.
Art. 268. Assistance by the Institute of Labor and
Manpower Studies. The Institute of Labor and
Manpower Studies shall render technical and other
forms of assistance to labor organizations and
employer organizations in the field of labor education,
especially pertaining to collective bargaining,
arbitration, labor standards and the Labor Code of the
Philippines in general.

1.) Trade Union Activities of Aliens
Aliens and foreign organizations are prohibited
from engaging to all forms of trade union activities.
However, alien employees with valid working permits
issued by the DOLE may exercise the right to self-
organization and join or assist labor organization, if
they are nationals of a country which grants the same
or similar rights to Filipino workers, as certified by the
DFA.
2) Trade Union Activities
1. Organization, formation, and administrator of labor
organizations;
2. Negotiation and administration of collective
bargaining agreements
3. All forms of concerted union action
4. Organizing, managing, or assisting union
conventions, ,meetings, rallies, referenda, teach-
ins, seminars, conferences and institutes
5. Any form of participation or involvement in
representation proceedings, representation
elections, consent elections, union elections and
6. Other activities or actions analogous to the
foregoing.
Art. 270. Regulation of foreign assistance. (a) No foreign
individual, organization or entity may give any
donations, grants or other forms of assistance, in cash
or in kind, directly or indirectly, to any labor
organization, group of workers or any auxiliary thereof,
such as cooperatives, credit unions and institutions
engaged in research, education or communication, in
relation to trade union activities, without prior
permission by the Secretary of Labor.
"Trade union activities" shall mean:
(1) organization, formation and
administration of labor organization;
(2) negotiation and administration of
collective bargaining agreements;
(3) all forms of concerted union action;
(4) organizing, managing, or assisting
union conventions, meetings, rallies,
referenda, teach-ins, seminars,
conferences and institutes;
(5) any form of participation or
involvement in representation
proceedings, representation elections,
consent elections, union elections;
and
(6) other activities or actions analogous
to the foregoing.
(b) This prohibition shall equally apply to foreign
donations, grants or other forms of assistance, in cash
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 70
Atty. Paulino Ungos
or in kind, given directly or indirectly to any employer
or employers organization to support any activity or
activities affecting trade unions.
(c) The Secretary of Labor shall promulgate rules
and regulations to regulate and control the giving and
receiving of such donations, grants, or other forms of
assistance, including the mandatory reporting of the
amounts of the donations or grants, the specific
recipients thereof, the projects or activities proposed
to be supported, and their duration.
v Prior permission from the SOL is required before a
foreign individual, organization or entity can give
donations, grants or other forms of assistance, in
cash or in kind to any labor organization or any
auxiliary thereof.
v Legitimate L.O. should make a disclosure of
donations, donors and their purposes in their
annual financial reports.
Art. 271. Applicability to farm tenants and rural workers. -
The provisions of this Title pertaining to foreign
organizations and activities shall be deemed applicable
likewise to all organizations of farm tenants, rural
workers, and the like: Provided, That in appropriate
cases, the Secretary of Agrarian Reform shall exercise
the powers and responsibilities vested by this Title in
the Secretary of Labor.
1.) Regulatory Body for Farm Tenants
v The regulatory functions with respect to foreign
assistance for farm tenants and rural workers shall
be exercised by the Secretary of Agrarian Reform.
Chapter IV
PENALTIES FOR VIOLATION
Art. 272. Penalties. (a) Any person violating any
of the provisions of Article 264 of this Code shall be
punished by a fine of not less than one thousand
pesos (P1,000.00) nor more than ten thousand pesos
(P10,000.00) and/or imprisonment for not less than
three months nor more than three (3) years, or both
such fine and imprisonment, at the discretion of the
court. Prosecution under this provision shall preclude
prosecution for the same act under the Revised Penal
Code, and vice versa.
(b) Upon the recommendation of the Minister of
Labor and Employment and the Minister of National
Defense, foreigners who violate the provisions of this
Title shall be subject to immediate and summary
deportation by the Commission on Immigration and
Deportation and shall be permanently barred from re-
entering the country without the special permission of
the President of the Philippines. (As amended by
Section 16, Batas Pambansa Bilang 130 and Section 7,
Batas Pambansa Bilang 227)
1.) Offenses Penalized Under 272
Art. 272 of the labor code penalizes the following

violations of ART. 264:
1. Declaring a strike or lockout without having first
bargained collectively
2. Declaring a strike or lockout without complying
with the legal requirements
3. Declaring a strike or lockout after an assumption
or certification order has been issued or after the
dispute has been submitted to compulsory
voluntary arbitration or during the pendency of
cases involving the same grounds for the strike or
lockout;
4. Obstructing or interfering with by force, violation,
coercion, threats or intimidation any peaceful
picketing during any labor controversy or aiding or
abetting such obstruction or interference
5. Using or employing strike-breakers
6. Brining in, introducing or escorting on the part of
an armed person, public officer, personnel of the
AFP or PNP, any person who seeks to replace
strikers, in entering or leaving the premises of a
strike area
7. Committing acts of violence, coercion or
intimidation while engaged in picketing.
8. Obstructing the free ingress to and egress from
the employers premises while engaged in
picketing and
9. Obstructing public thoroughfares
BOOK SIX
POST EMPLOYMENT
Title I
TERMINATION OF EMPLOYMENT
Art. 278. Coverage. The provisions of this Title shall
apply to all establishments or undertakings, whether
for profit or not.
Expanded Coverage of the Law on Dismissal
Under the previous law, the provisions of the
Labor Code on termination of the employment are
extended to employees of entitites which are not
operated for profit or gain, such as educational,
medical, religious, or charitable institutions and
organizations.
Purpose: to extend the employees of such entitites
the same rights and benefits granted to workers of
industrial and commercial enterprises.
Art. 279. Security of tenure. In cases of regular
employment, the employer shall not terminate the
services of an employee except for a just cause or
when authorized by this Title. An employee who is
unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation
was withheld from him up to the time of his actual
reinstatement. (As amended by Section 34, Republic
Act No. 6715, March 21, 1989)
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 71
Atty. Paulino Ungos
Security of Tenure Construed
Employee shall not terminate the services of an
employee except for a just or authorized cause.
Security of tenure is an act of social justice. It is
intended to protect an employee against any
arbitrary and unjust deprivation of his job.
Coverage
Security of tenure is principally intended to protect
employees who are holding regular employment.
However, this does not mean that employees who
are holding non-regular employment, such as
project employees, seasonal employees or fixed
term employees are not entitled to security of
tenure. They are entitled to security of tenure
although in a qualified manner, in the sense that
they cannot be terminated without just cause prior
to the completion of the project, season or term of
employment.
Probationary employees are also entitled to
security of tenure, in a sense that during their
probationary employment, they cannot be
dismissed except for just cause or authorized
cause.
Managerial employees are likewise entitled to
security of tenure although they are subject to
stricter norm or discipline than ordinary rank-and-
file employees.
Even casual employees who have rendered at
least 1 year of service are accorded the right to
security of tenure in the sense that their
employment cannot be terminated without just
cause, as long as the activity in which they are
employed exists.
Extent of the Rights
Security of tenure protects an employee not only
against arbitrary or unjust dismissal, but also
against other personnel actions, which are
calcuteed to force an employee to give up his
employment without valid reason.
Limitation
Security of tenure is not a guarantee of perpetual
employment because our law, while affording
protection to the employee does not authorize
oppression or destruction of an employer. It has
been held that while security of tenure is
constitutionally guaranteed, it cannot be used to
deprive an employer of its prerogatives. The law is
solicitous of the welfare of the employees, but is
also protects the right of an employer to exercise
what are clearly management prerogatives.
Managerial Prerogatives
An owner of a business enterprise is given
considerable leeway in managing his business
because it is deemed important to society as a
whole that he should succeed. The exercise of
managerial prerogatives belongs solely to the

employer. The employer is free to determine,
according to his own discretion and business
judgment, all aspects of employment, including
hiring, work assignment., working methods, time,
place and manner of work, tools to be used,
processes to be followed, etc.
These prerogatives of management can be
availed of without liability provided 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 or under valid
agreements and provided further that such
prerogatives are not exercised in a malicious,
harsh, oppressive, vindictive, or wanton manner or
out of malice or spite.
The Labor Code does not authorize the NLRC or
the Labor Arbiter to interfere with or substitute
their judgment for that of the employer in the
conduct of his business.
NATIONAL LABOR UNION VS. INSULAR YEBANA
TOBACCO CORPORATION
National Labor Relations Act was not intended to empower
the National Labor Relations Board to substitute its
judgment for that of the employer in the conduct of its
business and did not deprive the employer of the right to
select or dismiss his employees for any cause except
where the employee was actually discriminated against
because of his union activities or affliation. It did not
authorize the Board to absolve employees from compliance
with reasonable regulations for their government and
guidance.
It is within their power to inquire on whether or not
the exercise of managerial prerogatives was
tainted with bad faith or grave abuse of discretion.
Thus, if the Labor Artbiter, the NLRC or the higher
courts find that the penalty of dismissal is grossly
disproportionate, harsh or too severe, they may
reduce the sanction to a lighter penalty. This can
be done by ordering the reinstatement of the
employee without backwages or with limited
backwages, and the period he was out of work or
the period not covered by the backwages will be
considered as the penalty. However, in the
absence of bad faith or grave abuse of discretion,
the exercise by the employer of is inherent
prerogatives should be upheld.
The Prerogatives to choose whom to hire
The right to select and appoint employees is the
prerogative of an employer-- the privilege of
management because such right inheres in the
conduct and operation of the business by the
employer.
Corollary to this right is the prerogative to place
new employees on probationary status. The
employer has the right or is at liberty to choose
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 72
Atty. Paulino Ungos
whom to hire that the employer may set or fix a
probationary period in order to test and observe
the conduct of the employee before hiring them
permanently.
The prerogative to promote employees
Promotion - advancement from one position to
another with an increase in duties and
responsibilities and usually accompanied by an
increase in salary.
Essence of promotion : the advancement from one
position to another with an increase in duties and
responsibilities, and usually accompanied by an
increase in a salary.
Usually - not all promotions may be accompanied
by a corresponding salary increase,
nothwithstanding the increase in duties and
responsibilites of the employee.
Promotion of employees to supervisory,
managerial or executive positions rests upon the
discretion of the management because such
positions are offices that can be held by persons
who have the trust of the corporation and its
officers.
A promotion that is manifestly beneficial to the
employee should not give rise to a gratuitous
speculation that such a promotion was made
simply to deprive the union of membership of the
promoted employee, who after all appears to have
accepted the promotion.
An employee has the right to decline a promotion.
There is no law that compels an employee to
accept a promotion. An employee cannot be
subjected to disciplinary action if he refuses to
accept the promotion.
However, the moment an employee accepts a
promotion to a managerial position or to an office
requiring full trust and confidence, he gives up
some of the rigd guarantees available to ordinary
workers. Upon promotion, he would now be
subjected to stricter norm of discipline than
ordinary rank-and-file emplyees.
Dosch vs. NLRC
FACTS:
HD was the resident manager of northwest airlines in the
Philippines. He was promoted to the position of Director-
International Sales and he was to hold office at the
Northwests general office in USA. HD declined the
promotion for personal reasons. He made it known that he
preffered to remain as manager in the Philippines. As a
result, Northwest considered him resigned, although later
on, Northwest took the position that HD was guilty of
insubordination. Is HD guilty of subordination?
HELD: No, HD is not guilty of subordination. While
northwest has the prerogative to promote an employee, HD
also has the right to decline the promotion and he cannot
be punished for it. There is no law that compels an
employee to accept a promotion. A manage in a private
concern has the right to be secure in his position, to decline

a promotion where, although the promotion carries an
increase in salary and rank but results in his transfer to a
new place of assignment or station away from his family.
(F) Dismissal for soliciting signatures to form a union
Case: JUDRIC CANNING V. INCIONG
FACTS: NP and other 5 EEs of JCC were found to have
solicited membership in a union yet to be organized. JCC
removed timecards from rack- hence, EEs could not work
anymore and thus they filed a complaint for ULP and illegal
dismissal
ISSUE/S: WON JCC is guilty of dismissal by ULP
HELD: Under Article 248(a) of the Labor Code of the
Philippines, "to interfere with, restrain, or coerce employees
in their exercise of the right to self-organization" is an unfair
labor practice on the part of the employer. Paragraph (d) of
said Article also considers it an unfair labor practice for an
employer "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. In this particular case, the private respondents
were dismissed or their services were terminated, because
they were soliciting signatures in order to form a union
within the plant. Consequently, dismissal is illegal.
(G) Dismissal for refusing to join the union favoured by
the employer
Case: PROGRESSIVE DEVT. CORP. V. CIR
FACTS: ACEA (legit. Labor org/LLO) formally informed
PDC of its existence and sent also its CB proposals. But
supervisors of PDC assisted in the formation of another
union (PEU) and persuaded members of ACEA to transfer
to such. ACEA members were not given work schedules,
working days lessened until they were dismissed from
service. PDC contended that ACEA members were not
dismissed but simply they had no work to do- since they
were just casuals/temporary EEs whose services depended
upon availability of work.
ISSUE/S: WON PDCs contention has merit
HELD: This contention is without merit. As testified to by
President of the Progressive Employees Union, their
members were also casual employees but are now
regulars. This fact shows that the casual status of the
members of ACEA could not have been the cause of their
dismissals. Moreover, as testified to by Concordia Araiza, a
witness for petitioners, it was the Personnel Manager who
was in charge of assigning ushers and usherettes every
time there were scheduled shows; and that while the
Araneta Coliseum maintained only such number of ushers,
usherettes and janitors, if their services were needed, every
time there was a scheduled show or during show days, the
Coliseum hired additional personnel. 11 It is, therefore,
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 73
Atty. Paulino Ungos
clear that the services of the members of the ACEA were
also needed, their casual status notwithstanding.
It appears that the individual complainants, during show
days, were always scheduled to work until June 1962 when
they were not included in the schedule anymore.12 This
virtually amounted to dismissal, without prior notice. Their
not being included in the list of schedule since June 1962
could only be the result of petitioners' earlier threat of
dismissal should said complainants refuse to heed
petitioners' admonition for them to resign from the ACEA.
There is reason to believe that had the individual
complainants agreed to resign from the ACEA and to
transfer to the PEU, they would not have been separated
from their work and would even have been made
permanent employees. Thus, a Mrs. Concordia Araiza who
was a casual employee of the petitioner corporation, upon
her suspension for four (4) hours on representation of the
ACEA, became a permanent employee after she handed
her resignation from the ACEA Union personally to Jose E.
Belmonte, the General Manager of the Progressive
Development Corporation.
From the facts of record, it is clear that the individual
complainants were dismissed because they refused to
resign from the Araneta Coliseum
Employees Association and to affiliate with the Progressive
Employees Union which was being aided and abetted by
the Progressive Development Corporation.
7. Remedy for Illegal or Unjust Dismissal
- Complaint for Illegal Dismissal (ID) filed with Labor
Arbiter (LA) only recourse available to EE who is
illegally or unjustly dismissed
- Art. 277 as the basis
- Petition for injunction NOT THE REMEDY
o It is not a cause of action in itself but only
a provisional remedy- adjunct to the main
suit.
o Art. 218 emphasizes that the power of
the NLRC to issue injunctive writ
originates from any labor dispute
Without a complaint filed of ID
before the LA, there is no labor
dispute
- Case: PAL Inc. v. NLRC
FACTS: FP and GC were flight stewards of PAL who were
dismissed because of currency smuggling. Instead of filing
a complaint for ID before the LA, they directly filed with the
NLRC a petition for injunction praying PAL to be enjoined
from dismissing them and to reinstate them to their former
position. NLRC issued injunction.
ISSUE/S: WON NLRC is correct
HELD: No. Power of the NLRC to issue an injunctive writ
originates from any labor dispute. Without a complaint

filed of ID before the LA, there is no labor dispute. This
case, theres no complaint.
8. Relief for unjust or illegal dismissal
8.1. Migrant Workers (MW)
- Those MW unjustly/illegally dismissed is entitled
to:
o Full reimbursement of his placement fee
with 12% interest per annum
o Salaries for the unexpired portion of his
employment contract, or 3 mos. Salary
for every yeas of the unexpired term,
whichever is less.
- Choice of which amount to award an illegally
dismissed MW (WON his salaries for unexpired
term, whichever is less, comes into play when
employment contract has a term of atleast 1 year.
o Evident from words for every year of the
unexpired term which follows the words
salaries xxx for 3 months.
o To say that worker is only entitled to 3
mos. Salary simply because it is lesser
amount is to completely
disregard/overlook some words used in
statute while giving effect to some
This is contrary to well-
established rule in legal
hermeneutics that in interpreting
a statute, care should be taken
that every part or word thereof
be given effect since the
lawmaking body is presumed to
know the meaning of the words
employed by statute and to
have used them advisedly.
8.2. Locally employed workers (LEW)
- If unjustly or illegally dismissed, is entitled to:
o Reinstatement without loss of seniority
rights and other privileges
o Backwages, inclusive of allowances, and
to his other benefits or their monetary
equivalent computed from time his
compensation was withheld from him up
to the time of actual reinstatement
o Moral and exemplary damages if
dismissal was tainted with malice/BF
o Separation pay, under certain conditions
9. Reinstatement
- Relief separate and distinct from Backwages
o Usually is a concomitant of Backwages;
but the two are not necessarily
complements nor award of one is a
condition precedent to an award of the
other
- Simply means, restores the lost position (while
Backwages restores lost income)
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 74
Atty. Paulino Ungos
9.1. Meaning of reinstatement
- Restoration to state from which one has been
removed/separated
- Return to position from which he was removed
- NO reinstatement in cases:
o To a position EE which never occupied
o To a permanent position of an originally
temporary EE
- A reinstated EE may be required to undergo
physical/medical examination in order to
determine fitness to work but such should not be a
precondition for reinstatement
- Case: Phil-Am Drug v. CIR
FACTS: AC was employed by PADC as sales supervisor.
He was one of the 40 EES terminated because of business
losses. Dismissal upheld by CIR but the validity was upon
the condition that PADC terminated EEs should be given
first priority should it thereafter employ addtl personnel. FG
was appointed branch manager in place of another
dismissed, AF. AC contested such and claimed that he
should be given first priority. Lower court ruled in favor of
AC.
ISSUE/S: WON PADC can be compelled to appoint AC as
branch manager
HELD: No. ACs position when he was terminated is a
sales supervisor and thus he cannot claim to be appointed
as branch manager even though there is preferential hiring.
Because such privilege does not carry with it the right to be
appointed to higher position.
- Case: San Miguel Brewery vs. Santos
FACTS: Temporary guard of petitioner was recommended
by union to be hired but instead of hiring him, petitioner
dismissed him. Union filed a complaint for ULP against
company. Lower court find ULP and ordered company to
reinstate temporary guard as permanent guard
ISSUE/S: WON lower court was correct
HELD: No. On the date of his separation from service,
guard was occupying position of temporary guard. In order
to be reinstated (restoration to a state from which he was
generally removed), he must be reinstated to his former
position- temporary guard.
9.2 Meaning of Reinstatement without loss of seniority
rights
- That upon reinstatement, EE is to be treated in
matters involving rank, position and continuity of
employment as though he has not been absent
from work.

9.3. Alternative Relief if reinstatement is no longer
possible
- Cases where reinstatement is no longer possible:
o Position no longer exist at time of
reinstatement
EE should be given substantially
equivalent position
o Position previously occupied by EE is
already filled up
EE should be given substantially
equivalent position
To insist on
reinstatement would
merely compound the
injustice- ER to
terminate the services
of the new hire who
replaced the illegally
dismissed EE just for
latter to assume former
position
- Cases where reinstatement is rendered
impossible and Substantially equivalent position is
not available REMEDY: separation pay in lieu
of reinstatement
o ER has closed down business
o ER undertook reorganization resulting to
abolition of position previously occupied
by EE
o ER undertook retrenchment measures or
drastic reduction of personnel
- UNFEASIBLE reinstatement EE dismissed has
reached retirement age of 60
o Relief separation pay is not available
o EE entitled only to Backwages up to time
when he reached retirement age plus
retirement pay
- Case: Philippine Engineering Corp. V. CIR
FACTS: Petitioner is engaged with purchase, sale and
installation and repair of machinery and maintained a
machine at Raon Quiapo. But on 1965, such operation
machine closed down and was dismantled and transferred
resulting to termination of 57 EEs, mostly mechanics and
mechanic helpers. Union filed complaint for ULP and lower
court ordered for reinstatement of 57 EEs
ISSUE/S: WON lower court was correct in ordering
reinstatement of 57 EEs
HELD: No. ACs Reinstatement presupposes that the
previous position from which one has been removed still
exists, or that there is an unfilled position more or less of
similar nature as the one previously occupied by the EE.
With machine shop being dismantled and transferred, some
sold, dismissed EEs could not be returned for
reinstatement becomes impossible.
9.4. Propriety of Reinstatement
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 75
Atty. Paulino Ungos
- Relief is available only to EEs who is
unjustly/illegally dismissed.
o If not, as when severance of employment
was brought by abandonment/refusal to
work, reinstatement cannot be properly
ordered.
9.5. Effect of Employment Elsewhere
- Unjustly dismissed EE cannot be denied the right
to reinstatement simply because he has obtained
employment elsewhere
o RATIO: dismissed EE cannot be
expected to remain idle while his claim is
pending adjustment, particularly if he has
dependents looking to him for
sustenance. If ever he obtained
employment elsewhere, it was out of
necessity rather than choice. It would be
against all justice and equity to force EE
to choose between starvation and loss of
reinstatement.
- As long as reinstatement order had not been
carried out, dismissed EE is free to seek
employment anywhere including in a foreign
country.
o His departure from Philippines cannot be
considered as waiver of his rights to
reinstatement
o Bare fact of his being actually employed
elsewhere in any capacity cannot affect
his right to reinstatement, for option on
whether to return to his employment or
not, is upon EE to decide. If he opts to
return, he has to be reinstated, if refuses
to return/imposes uncalled for conditions,
then and only then would his rights to
reinstatement cease.
9.6. Circumstances that preclude reinstatement
- Transfer of Business Ownership
o If ER sells business during pendency of
ID case and EE is adjudged to have been
illegally dismissed reinstatement is
precluded
o Reason: New owner/buyer is not obliged
to absorb the EEs of old owner/seller
Unless there is an expressed
assumption of liabilities by the
new owner
- Business reverses
o If between time of wrongful discharge
and proposed order of reinstatement,
ERs commercial or financial
circumstances have changed, ER (even
if guilty of ULP) cannot be compelled to
reinstate such # of EEs as may exceed
his needs under the altered conditions
 Arts. 226-286, Labor Code (Labor Relations) 76
Atty. Paulino Ungos

o Reason: ER cannot be compelled by an reinstatement, temporary EE

order of reinstatement to give should vacate his post this
employment to greater # of persons that period of uncertainty should not
economic operations of business be allowed to continue
required. indefinitely
o But even though reinstatement is not Cases:
possible, such condition does not justify NASSCO v. CIR EE
refusal or denying Backwages guilty of laches
- Abolition of Position because action for
o Position of ID EE has already been reinstatement was filed
abolished, or theres no substantially after lapse of 17 mos.
equivalent position reinstatement Gutierrez v. Bachrach
cannot be carried out Motor Co. action for
- Closure of business reinstatement barred
o Reinstatement presupposes that the by laches since it ws
previous position from which one has filed only after lapse of
been removed still exists, or that there is 17 mos.
an unfilled position more or less of similar Litton Mills Workers
nature as the one previously occupied by Union v. Litton Mills
the EE Inc. 5-year delay was
o If establishment closed its operations held to be barred by
reinstatement impossible laches.
- Incapacity of EE
o Fairness dictates that ER should not be - Prescription
compelled to reinstate an EE who is no o Action for reinstatement filed after 4
longer physically fit for the job from which years from date of dismissal will be
he was illegally ousted. barred by prescription
- Attainment of Retirement Age - When complaint merely prays for separation pay
o EE held to be ID cannot be reinstated if o When EE merely prays for separation
he has reached retirement age of 60 y/o pay, he forecloses his right to
- Conviction in Criminal case reinstatement
o If EE was dismissed for offense - Strained Relations
constituting a crime (e.g. theft of o Even if dismissal is found to be
company property) and dismissal was unjust/illegal, reinstatement should not be
held unjust, consequence of which he ordered anymore if the relationship
was reinstated, subsequent conviction between the parties has become so
will preclude his reinstatement and strained and ruptured as to preclude a
(payment of Backwages) harmonious working relationship
Reason: subsequent conviction o Instead, EE should be afforded
is a supervening event that separation pay
rendered unjust and inequitable This way, EE is spared the
the reinstatement of EE and agony of having to work anew
conviction affirmed the with his ER under the
existence of a valid ground for atmosphere of antipathy and
the dismissal antagonism while ER does not
- Laches have to endure the continued
o If reinstatement is not demanded within services of an EE whom it has
reasonable time, such will be barred. lost confidence
o This is to give justice to ER too; to allow o Reinstatement is not practical for EE who
the management to conduct its business is no longer welcome and imposing the
and affairs, considering the dismissal and EEs position in the company where he is
possibility of the dismissed EE resorting no longer welcome would only poison
to court action to vindicate his right to their relations to their mutual prejudice
continue his employment irritations would only recur if unwanted
E.g. within reasonable time, say EE has to be tolerated by the reluctant
1 year, management may keep ER
the post vacant by not filling it This is not conducive to
or cover it with temporary EE, industrial peace
giving the latter to understand o Case: Equitable Banking Corp. v. NLRC:
that should the management be While the Court agrees with private respondent that
later ordered to make execution pending appeal may be ordered by the NLRC it
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

is equally true, however, that where the dismissed
employee's reinstatement would lead to a strained relation
between the employer and the employee or to an
atmosphere of antipathy and antagonism, the exception to
the twin remedies of reinstatement and payment of
backwages can be invoked and reinstatement, which might
become anathema to industrial peace, could be held back
pending appeal.
9.7. When to Invoke Doctrine of Strained Relations
- Such matter of strained relations should be raised
and proved before the LA
o UNLESS: strained relations arose after
the filing of the case, as when
antagonistic feelings that stemmed from
the filing of the complaint deepened
during the 8-year pendency of the case
- Such doctrine should not be applied
indiscriminately since every labor dispute
invariably results in strained relations
o Mere filing of complaint for ID does not
by itself justify the application of the
doctrine of strained relations
o Where differences of the ER with EE are
neither personal nor physical much less
serious in nature does not by itself
justify the application of the doctrine of
strained relations
Otherwise, reinstatement can
never be possible because
some hostility is engendered
between the parties as a result
of their disagreement
9.8. Remedy for Refusal to comply with reinstatement
order
- Remedy for refusal to comply with a final order of
reinstatement is not a separate action for ID but a
motion for issuance of writ of execution
o If ER still, despite issuance of writ,
refuses to comply remedy is contempt
proceeding (not additional Backwages)
- Case: Christian Literature v. NLRC
FACTS: Petitioner filed an application for clearance to
dismiss LDR on ground of incompetence. Pending
resolution, LDR was placed under preventive suspension.
Labor Arbiter (LA) rendered decision ordering
reinstatement of LDR with 3 years Backwages. Decision
became final and executor and hence a writ of execution
was issued. Petitioner complied except for the
reinstatement part. After 5 mos, lapse, LDR filed motion for
issuance of Alias Writ of Execution (reinstatement,
th
Backwages, allowances and 13 mo. Pay from date of
dismissal up to present). LA issued such aside from the 3
year Backwages that has been satisfied.
ISSUE/S: WON LDR is entitled to additional backwages
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 77
Atty. Paulino Ungos
HELD: No. LDR is not entitled to additional Backwages
because that would in effect amend the decision sought to
be enforced. Once judgement has become final and
executor, it may no longer be amended, modified or
altered. It must be noted that decision sought to be
enforced merely awarded 3 years Backwages. Said award
has already been fully satisfied. CLC refused to reinstate
LDR and the remedy of such is not the grant of alias writ of
execution for additional/continuing Backwages because
that would have no basis in the decision sought to be
reinforced. Remedy must be contempt proceedings.
- Case: Medina v. Consolidated Broadcasting
System
o SC held that unjustified refusal of an ER
to reinstate an illegally dismissed EE
entitles the EE to Backwages, effective
from the date the ER failed to reinstate
despite an executor writ of execution
served upon him.
o Ruling here is quite in apparent conflict
with Christian Literature v. NLRC which
involved refusal to comply with
reinstatement order that has become
final and executory (whereas in Medina,
such involved refusal to comply with
reinstatement order pending appeal)
o SC held thus:
Petitioners would have us rule on whether or not the refusal
of the private respondent to reinstate them would make it
liable to pay their salaries pursuant to Republic Act No.
6715:
Article 223 of the Labor Code, as amended by Republic Act
6715, pertinently provides:
In any event. the decision of the labor Arbiter reinstating a
dismissed or separated employee insofar as the
reinstatement aspect is concerned, shall immediately be
executory, even pending appeal. The employee shall either
be admitted back to work under the same terms and
conditions prevailing prior to his dismissal or separation or,
at the option of the employer, merely reinstated in the
payroll. The posting of the bond shall not stay the execution
for reinstatement provided herein. (Emphasis supplied)
xxx
Petitioners construe the above paragraph to mean that the
refusal of the employer to reinstate an employee as
directed in an executory order of reinstatement would make
it liable to pay the latter's salaries. This interpretation is
correct. Under Article 223 of the Labor Code as amended,
an employer has two options in order for him to comply with
an order of reinstatement, which is immediately executory,
even pending appeal. Firstly, he can admit the dismissed
employee back to work under the same terms and
conditions prevailing prior to his dismissal or separation or
to a substantially equivalent position if the former position is
already filled up as we have ruled in Union of Supervisors

(RB) NATU vs. Sec. of Labor, 128 SCRA 442 [1984]; and
Pedroso vs. Castro, 141 SCRA 252 [1986]. Secondly, he
can reinstate the employee merely in the payroll. Failing to
exercise any of the above options, the employer can be
compelled under pain of contempt, to pay instead the
salary of the employee. This interpretation is more in
consonance with the constitutional protection to labor
(Section 3, Art. XIII, 1987 Constitution). The right of a
person to his labor is deemed to be property within the
meaning of constitutional guaranty that no one shall be
deprived of life, liberty and property without due process of
law. Therefore, he should be protected against any
arbitrary and unjust deprivation of his job (Bondoc vs.
People's Bank and Trust Co., Inc., 103 SCRA 599 [1981]).
The employee should not be left with any remedy in case
the employer unreasonably delays reinstatement.
Therefore, we hold that the unjustified refusal of the
employer to reinstate an illegally dismissed employee
entitles the employee payment of his salaries, effective
from the date the employer failed to reinstate despite an
executory writ of execution served upon him. Such ruling is
in accord with the mandate of the new law awarding full
backwages until actual reinstatement (Article 279 of the
Labor Code as amended.)
10. Backwages
- It is not the principal cause of action in an illegal
dismissal case
- Merely one of the reliefs extended to an EE who is
unjustly dismissed
- In illegal dismissal case Principal cause of
action is the unlawful deprivation of ones
employment by the employer in violation of the
right of security of tenure
10.1 Meaning of Backwages
- A form of relief that restores the income that was
lost by reason of unlawful dismissal
- RATIO: an EE whose dismissal is found to be
illegal is considered as not having left his office so
that he is entitled to all the rights and privileges
that accrue to him by virtue of the office that he
held
10.2 Distinction between Backwages and Unpaid
wages
- Backwages compensation which an EE would
have earned had he not be unjustly dismissed
- Unpaid wages compensation for services
already rendered by the withheld by the ER
10.3 Amount of Backwages that may be awarded
- Art. 279 of the LC provides that an unjustly
dismissed EE is entitled to full Backwages from
time his compensation was withheld up to the time
of his actual reinstatement
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 78
Atty. Paulino Ungos
o This must not mean that unjustly
dismissed EE is auto-entitled to full
Backwages
o LA and NLRC have discretion to
determine how much Backwages should
be awarded taking into account the facts
and circumstances of each case
o Note that dismissal could be illegal or
unjust because the EE was dismissed:
On grounds specifically
prohibited by law (Art. 118,
248(f) and 286 of LC)
Without any cause whatsoever
(EE not committed an offense)
Without just cause (EE
committed an offense but
penalty of dismissal was not
commensurate)
10.4 Full Backwages
- Entitles EE who was dismissed on grounds
specifically prohibited by law
o Under Art. Art. 118, 137, 248(f) and 286
of LC
o Ratio: EE should not have been
dismissed in the first place
- Entitles EE who was dismissed without any cause
o Ratio: EE does not deserve any penalty
considering he has not committed any
offense
10.5. Limited Backwages
- In situation where EE was dismissed without just
cause like EE committed an offense and the
penalty of dismissal was found to be too harsh, full
Backwages should not be awarded because that
would in effect absolve the EE from his
wrongdoing
- Awarded also when there is delay in filing of the
complaint of ID (e.g. 2 years lapse)
o Period of delay in instituting the action for
reinstatement may be deducted from
liability for Backwages
o A ruling that would permit a dismissed
laborer to earn back wages for all time, or
for a very long period of time, is not only
unjust to the employer but the same
would foster indolence on the part of the
laborers. The laborer is not supposed to
be relying on a court judgment for his
support, but should do everything a
reasonable man would do; he should find
employment as soon as an employment
has been lost, especially when the
employment has to depend on a
litigation. He should try to minimized the
loss that may be caused to the employer
by looking for other work in which he can
be employed

10.6 No Backwages
- Backwages may not be awarded in any of the
following circumstances:
o GF on part of ER as e.g.
ER honestly believed that
dismissal was the proper
penalty for offense committed,
reinstatement without
Backwages would be
appropriate relief
When ER honestly believed that
it could dismiss EE based on a
closed shop provision of the
CBA
o Cessation of employment brought about
neither by dismissal nor abandonment
Where the EEs failure to work respondent to abandon his work and then immediately file
was caused neither by his
abandonment nor by dismissal,
burden of eco. Loss is not
rightfully shifted to ER
Each party must bear
his own loss and
hence, ER not to be
liable for bckwages.
Case: Chong Guan v. NLRC
FACTS: JC was employed by CGT as Sales Manager. A
customer who borrowed the telephone directory
accidentally dropped it on the top of glass of the stores
showcase causing it to break- but JC covered up for the
customer. CGT owner got angry and hurled unprintable
words and invectives and told JC lumayas ka rito. Hence,
JC did not report to work anymore. JC filed a complaint for
ID. Defense of CGT was that it expressed its willingness to
accept JC back to work but it was the latter who stopped.
LA ruled reinstatement without Backwages.
ISSUE/S: WON LA was correct in not awarding backwages
HELD: Yes. the Court is convinced that private respondent
was never dismissed by the petitioner. Even if it were true
that Mariano Lim ordered private respondent to go and that
at that time he intended dismiss private respondent, the
record is bereft of evidence to show that he carried out this
intention. Private respondent was not even notified that he
had been dismissed. Nor was he prevented from returning
to his work after the incident. The only thing that is
established from the record, and which is not disputed by
the parties, is that private respondent did not return to his
work after his heated argument owners. Moreover,
petitioner has consistently manifested its willingness to
reinstate private respondent to his former position. This
negates any intention on petitioner's part to dismiss private
respondent. Petitioner first expressed its willingness to
reinstate private respondent during the initial hearing of the
case before the Labor Arbiter. Therefore, considering the
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 79
Atty. Paulino Ungos
Court's finding that private respondent was never dismissed
by the petitioner, the award of three years backwages was
not proper. Backwages, in general are granted on grounds
of equity for earnings which a worker or employee has lost
due to his illegal dismissal from work. Where the employee
was not dismissed and his failure to work was not due to
the employer's fault, the burden of economic loss suffered
by the employee should not be shifted to the employer. In
this case, private respondent's failure to work was due to
the misunderstanding between the petitioner's
management and private respondent. As correctly
observed by the Labor Arbiter, private respondent must
have construed the October 28 incident as his dismissal so
that he opted not to work for many days thereafter and
instead filed a complaint for illegal dismissal. However,
there was no intent to dismiss private respondent since the
petitioner is willing to reinstate him. Nor was there an intent
to abandon on the part of private respondent since he
immediately filed a complaint for illegal dismissal soon after
the October 28 incident. It would be illogical for private
an action seeking his reinstatement.
o Cessation of employment due to EEs
refusal to work
If cessation of employment was
not caused by dismissal but by
EEs refusal to work, ER should
not be held liable for
Backwages.
E.g. EE who stops
working because of her
erroneous belief that
she was being
harassed and
persecuted
Case: Dangan v. NLRC
FACTS: AD was employed by TFC as Purchasing Clerk.
On may 1, 1980, she was promoted as secretary to the
manger of financial services department. In 1981, her boss
resigned as clerk-typist in Logistics department. After 3
mos., she was pulled out of the Logistics department and
temporarily assigned as billing clerk in the accounting
department. After ADs maternity leave, TFC transferred
her to Bicutan as Secretary to Technical Senior Manager.
AD viewed this as demotion- that she was harassed for
being the secretary of the finance manager whom the
management hated. Complaint for illegal demotion was
filed and AD told the management that she will not report
for work until case has been decided and terminated.
NLRC ordered reinstatement but without Backwages.
ISSUE/S: WON NLRC was correct in not awarding
backwages
HELD: Yes. the employer cannot be compelled to pay her
backwages during a period when she was not working
because of a sincere but mistaken belief that she was
being harassed and persecuted for having worked as
private secretary to an executive who resigned. The
 Arts. 226-286, Labor Code (Labor Relations) 80
Atty. Paulino Ungos

petitioner has the option of accepting a reassignment to the price/penalty he has to

respondent's Bicutan offices without any backwages. pay for illegally
Otherwise, she may avail herself of the separation pay to dismissing his EE.
which an employee laid off due to retrenchment is entitled
under the law. 10.8. Computation of Backwages of Irregular Workers

10.7. Determination of amount due the EE - Only fair way to fix Backwages of irregular
workers, like piece-rate/seasonal, would be to
- How should the amount due to EE be determined? determine what these workers would have
o Deduction of earning elsewhere normally earned had they not been dismissed,
doctrine using basis for that purpose the wages actually
Earnings obtained by the EE earned by other irregular workers doing the same
elsewhere should be deducted kind of work who have not been dismissed.
from Backwages awarded to EE o Considering such workers do not work
pursuant to the principle that continuously throughout the year, it
EEs should not be permitted to would not be fair to fix their Backwages
enrich themselves at the as if they had worked without
expense of their ER and also interruption, otherwise, they would be
because of the laws abhorrence receiving compensation greater than
for double compensation those actually earned by other irregular
o Mercury drug doctrine workers who were not separated from
Doctrine after the Deduction of service
earning elsewhere doctrine was
discarded 10.9 Circumstances that forestall the running of
Enunciated in the case of Backwages
Mercury Drug v. CIR
The Backwages due an illegally - Death
dismissed EE is fixed at a o EE dies during pendency of case,
certain amount (usually 3 years Backwages cannot extend beyond time
where the case is not of death
terminated sooner) without o Ratio: worker can only earn wages only
deduction or qualification when alive
such formula was a realistic, - Physical/mental Incapacity
reasonable, and mutually o EE becomes physically/mentally
beneficial solution for it incapacitated during pendency of case,
relieve(s) the employees from Backwages will extend only up to the
proving their earnings during date of such incapacity because a worker
their lay-offs and the employer can earn wages only when not totally and
from submitting counter-proofs, permanently incapacitated
and thus obviate(s) the twin - Attainment of retirement age
evils of idleness on the part of o Backwages cannot go beyond the
the employees and attrition and retirement age
undue delay in satisfying the - Permanent closure of establishment
award on the part of the o Backwages cannot go beyond the date of
employer. permanent closure of business
o Bustamante doctrine - Temporary closure of establishment
Backwages to be awarded to an o Backwages cannot accrue in this case
illegally dismissed EE should E.g. plant did not operate
not, as GR, be because of electrical power
diminished/reduced by the interruptions/lack of
earnings derived by him materials/machine repair
elsewhere during the period of - Confinement in Prison
his illegal dismissal o Backwages cannot accrue during the
Ratio: EE while time when EE was confined in prison (for
litigating the matter of such worker could not possibly render
his dismissal, must still service to ER and could not earn salary
earn a living to support while under detention)
himself and family, - Re-Employment of the dismissed EE
while full bacwages o Once dismissed EE is re-employed, right
have to be paid by the to Backwages auto-ceases, otherwise
ER as part of the double compensation would result.
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

10. 10 Other Benefits
- Art. 279, LC provides an EE who is unjustly
dismissed shall be entitled to his full Backwages,
inclusive of allowances, and to his other benefits
or their monetary equivalent
- Other benefits include:
o Transportation and emergency
allowances
o Vacation leave or Service Incentive leave
th
o 13 month pay
- Other benefits DO NOT include:
o Facilities that are used only during official
tour of duty and not for private or
personal purpose- uniform, shoes,
helmets, and ponchos
o Benefits that are enjoyable only if
approved by the ER, such as free trip
passes.
Reason: because the grant
thereof is not a matter of right
but subject to discretion of the
ER
11. Separation Pay (SP)
- Intended to provide the EE money during period in
which he will be looking for another employment
- Distinct fromBackwages (which is designed to
restore income that was lost by reason of unjust
dismissal)
11.1 Concept of SP
- An aid given to an EE upon his separation from
service so that he may have something on which
to fall back when he loses his means of livelihood.
- Amount designed to provide him with the
wherewithal during the period that he is looking for
employment.
11.2 Purpose of SP
- a social legislation, to alleviate the difficulties
which confront a dismissed employee thrown into
the streets to face the harsh necessities of life. It is
for this reason that the said statute compels the
employer to dole out money, reasonable under
circumstances, to cushion the adverse effects of
sudden separation from employment. This gives
the employee a leeway, commensurate to his
years of service, to tide him and his family over in
the meantime that he goes job hunting. To one
who has been accustomed to a certain type of job
in one company, adjustment to other job
opportunities becomes a problem. Advanced age,
too, may reduce him to a low priority in the labor
market
11.3 When SP is Proper
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 81
Atty. Paulino Ungos
- Awarded to EEs who are terminated by reason of:
o Redundancy
o Installation of labor-saving devices
o Retrenchment
o Closure of establishment not due to
serious business losses
o Disease
o Lay-off/suspension of operations for
more that 6 mos.
- If EE have been unjustly dismissed, is SP proper?
o Exceptional circumstances entitling such
EE to SP:
If the reinstatement of the EE
has been rendered impossible
by supervening events (such as:
closure of
establishment,
sale/transfer of
business ownership,
abolition of position
reduction of personnel
physical incapacity of
EE)
If the reinstatement of the EE is
no longer feasible
Doctrine of Strained
Relations
No substantially
equivalent position is
available
- If EE was dismissed for a just and valid cause, is
he entitled to SP?
o GR: Such worker is not entitled
o EXCEPTION: SC held that SP may be
awarded as measure of social justice
even if the dismissal is found to be valid
and justified, but only in those instances
where EE was validly dismissed for a
cause other than serious misconduct or
offenses reflecting on his moral
character.
Case: Phil. Long Distance
Telephone Company v. NLRC
xxx henceforth separation pay shall be allowed as a
measure of social justice only in those instances where the
employee is validly dismissed for causes other than serious
misconduct or those reflecting on his moral character.
Where the reason for the valid dismissal is, for example,
habitual intoxication or an offense involving moral turpitude,
like theft or illicit sexual relations with a fellow worker, the
employer may not be required to give the dismissed
employee separation pay, or financial assistance, or
whatever other name it is called, on the ground of social
justice.
A contrary rule would, as the petitioner correctly argues,
have the effect, of rewarding rather than punishing the
erring employee for his offense. And we do not agree that
the punishment is his dismissal only and that the separation

pay has nothing to do with the wrong he has committed. Of
course it has. Indeed, if the employee who steals from the
company is granted separation pay even as he is validly
dismissed, it is not unlikely that he will commit a similar
offense in his next employment because he thinks he can
expect a like leniency if he is again found out. This kind of
misplaced compassion is not going to do labor in general
any good as it will encourage the infiltration of its ranks by
those who do not deserve the protection and concern of the
Constitution
- EE resigned from employment, is he entitled to
SP?
o GR: NO
o EXCEPTION: it is stipulated in the
employment contract, CBA or established
employer practice/policy
- EE retires from employment, entitled to SP?
o GR: NO
He is only entitled to retirement
pay, which is different for SP.
Retirement result of a
bilateral act of parties, a
voluntary agreement between
ER and EEs whereby latter after
reaching a certain age agrees
and/or consents to sever his
employment with the former.
Dismissal refers to unilateral
act of ER in terminating the
services of an EE.
12. Damages
- Damages, specifically moral and exemplary
damages in unjust dismissal are reliefs prescribed
not by the Labor Code but by the Civil Code.
- Entitlement thereto should be established along
the principles established by the Civil Code.
- It is not enough for an employee to just prove that
he was dismissed without just or due process.
Additional facts must be pleaded and proven to
warrant the grant of moral damages.
- The employee should prove that his dismissal was
attended by bad faith or fraud, or constituted an
act contrary to morals, good customs or public
policy, and of course, that social humiliation,
wounded feelings, grave anxiety, and similar injury
resulted therefrom.
- With regard to exemplary damages, the employee
should prove that his dismissal was effected in a
wanton, oppressive or malevolent manner.
Philippine Airlines, Inc. vs. NLRC
Held: Not every employee who is illegally dismissed or
suspended is entitled to damages. As a rule, moral
damages are recoverable only where the dismissal of the
employee was attended by bad faith or fraud, or committed
an act oppressive to labor, or was done in a manner
contrary to morals, good customs or public policy. Bad faith
does not simply mean negligence or bad judgment. It
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 82
Atty. Paulino Ungos
involves a state of mind dominated by ill will or motive. It
implies a conscious and intentional design to do a wrongful
act for a dishonest purpose or some moral obliquity. The
person claiming moral damages must prove the existence
of bad faith by clear and convincing evidence for the law
always assumes good faith.
13. Relief When There is Neither Dismissal nor
Abandonment
- If the employee stops working without him being
dismissed and without any intention on his part to
abandon his employment, the only relief that could
be accorded to the employee would be
reinstatement.
- The employee would be entitled neither to back
wages nor to separation pay. Under this situation,
each party must bear his own loss.
Leonardo vs. NLRC
FACTS: AF was employed by RMC as supervisor.
RMC informed AF that he would be transferred to the
Sucat Plant because of his failure to meet his sales
quota and that his supervisors allowance would be
withdrawn. AF reported for work at the Sucat Plant.
However, stopped reporting for work and filed a
complaint for illegal dismissal on the premise that his
transfer was violative of his security of tenure. RMC
claimed that it never terminated the services of AF. It
merely demoted AF pursuant to company policy.
NLRC, finding that AF was not dismissed, ordered his
reinstatement but without backwages. Was the NLRC
correct?
HELD: The NLRC was correct because the demotion
of AF was valid and justified. An employer, RMC is
entitled to impose productivity standards for its
workers, and in fact, non-compliance may be visited
with a penalty even more severe than demotion. But
the mere fact that AF did not report for work after his
demotion should not be construed as abandonment,
considering that he immediately filed a complaint for
illegal dismissal. The filing of a complaint for illegal
dismissal is inconsistent with the idea of abandonment.
Accordingly, given that AF may not be deemed to have
abandoned his job and neither was he dismissed, the
NLRC did not err in ordering his reinstatement without
backwages. In a case where the employees failure to
work was occasioned neither by his abandonment nor
by a termination, the burden of economic loss is not
rightfully shifted to the employer; each party must bear
his own loss.
14. Liability of Corporate Officers
- General rule: Corporate officers cannot be held
personally or solidarily liable with the corporation
for backwages, damages or other money claims of
employees, even if they were impleaded in the
complaint.
- Obligations incurred by them, acting as such
corporate agents, are not heirs but the direct
accountabilities of the corporation they represent.

- This is so because a corporation is invested by
law with a personality of its own, separate and
distinct from that of its stockholders and officers
who manage and run its affairs.
- Exception: corporate directors and officers can
be held personally or solidarily liable with the
corporation for backwages, damages or other
money claims of employees:
a) If the corporate officer acted in bad faith;
or
b) If the corporation is no longer existing
and unable to satisfy the judgment in
favor of the employee, in which case, the
officers should be held liable for acting on
behalf of the corporation.
- Usually, solidary liability is imposed upon the
highest and most ranking officer of the
corporation.
- In Aurora Land Projects vs. NLRC, solidary
liability was imposed upon the
Administrator/Manager, he being the most ranking
officer of the corporation at the time of the
dismissal of the employee.
- In Naguiat vs. NLRC, solidary liability was
imposed upon the President of the corporation, he
being the highest ranking officer who actively
managed the business.
- Solidary liability, however, does not extend to the
Vice President, unless the VP happens to be the
highest ranking officer, as when the President of
the corporation is the complainant himself.
- To justify solidary liability, it must be shown that
the officers of the corporation deliberately or
maliciously designed to evade the financial
obligation of the corporation to its employees, or a
showing that the officers indiscriminately stopped
its business to perpetrate an illegal act, as a
vehicle for the evasion of existing obligations, in
circumvention of statutes, and to confuse
legitimate issues.
A.C. Ransom Labor Union vs. NLRC
FACTS: The employees of RANSOM went on strike that
was lifted after 15 days. Notwithstanding the lifting of the
strike, RANSOM refuse to reinstate 22 strikers, prompting
the said strikers to file a complaint for ULP. The lower court
ordered the reinstatement of the 22 strikers with
backwages. In the meantime, ROSARIO corporation was
organized and RANSOM closed down its business. Several
motions for execution were filed to enforce the award of
backwages, but all of them could not be implemented for
failure to find leviable assets of RANSOM. In its last motion
for execution, the UNION asked that the officers and
agents of RANSOM be held personally liable for the
backwages. The LA granted the motion and ordered the
issuance of a writ of execution against RANSOM and its 7
officers and directors.
HELD: The Labor Arbiter is correct. Under Art. 212 C of the
Labor Code, the term employer is defined as any person as officers of the company and have acted only as such
acting in the interest of an employer, directly or indirectly.
Since RANSOM is an artificial person, it must have an
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 83
Atty. Paulino Ungos
officer who can be presumed to be the employer, being the
person acting in the interest of RANSOM. The corporation
is the employer only in the technical sense. The
responsible officer of an employer corporation can be held
personally liable for non-payment of backwages. If the
policy of the law were otherwise, the corporation employer
can have devious ways for evading payment of backwages.
In the instant case, it would appear that RANSOM,
foreseeing the possibility of being held liable for backwages
to the 22 strikers, organized ROSARIO to replace
RANSOM, with the latter to be eventually phased out if the
22 strikers win their case. RANSOM actually ceased
operations after the decision of the lower court was
promulgated against RANSOM. In the absence of definite
proof as to who is the officer of RANSOM directly
responsible to pay the backwages of the 22 strikers, it
should be presumed that it is the President of the
corporation who can be deemed the chief operation officer.
Yuseco vs. Simmons
FACTS: HZY was employed by the National City Bank of
New York, a foreign banking corporation doing business in
the Philippines pursuant to a contract of employment which
stipulates: I understand that I am being hired as a single
female employee. In the event of my marriage you may
terminate this employment in which case I shall be entitled
to no other benefits except my salary through the last day
on which I worked. HZY intended to marry soon. She
submitted a resignation letter. Thereafter, HZY filed a
complaint for damages against the Manager of the Bank
alleging that the manager forced her to resign in
implementation of the aforementioned illegal and immoral
agreement. The trial Court dismissed the complaint on the
ground that HZY was not an employee of the Manager, but
of the Bank, hence the cause of action should have been
directed against the Bank. Was the trial Court correct?
HELD: The trial court was correct. HZY does not have the
right to compel the Manager of the Bank to pay damages
by reason of her separation. Admittedly, the Manager
merely acted as agent of the Bank. There is no allegation
that the Manager exceeded his power. Therefore, her
remedy should have been to sue the Bank. Such reasoning
is in line with well-known principles of agency. The agent
who acts as such is not personally liable to the party with
whom he contracts, unless he expressly binds himself or
exceeds the limits of his authority. The principal must
comply with all the obligations which the agent may have
contracted within the scope of his authority.
Mindanao Motor Line Inc. vs. CIR
xxx respondents Enrique Ponce and Jesus Moraga who
were included as such should not be made solidarily
responsible for the payment of backwages, together with
their employer, the Mindanao Motor Line Inc., for it clearly
appears from the record that they were merely agents who
acted within the scope of their corporate positions as
resident manager and general manager, respectively, of
the aforesaid company. Since they were impleaded merely
within the scope of their authority, if any one should be held
responsible for the consequences of their acts as such

officers, it is their employer, unless of course, it is shown
that they have acted negligently or in bad faith. It is a well-
known principle of law that an agent who acts in behalf of a
disclosed principal within the scope of his authority cannot
be held liable to third persons.
ART 280. Regular and casual employment. The
provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement
of the parties, an employment shall be deemed to be
regular where the employee has been engaged to
perform activities which are usually necessary or
desirable in the usual business or trade of the
employer, except where the employment has been
fixed for a specific project or undertaking the
completion or termination of which has been
determined at the time of the engagement of the
employee or where the work or service to be performed
is seasonal in nature and the employment is for the
duration of the season.
An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: Provided, That
any employee who has rendered at least one year of
service, whether such service is continuous or broken,
shall be considered a regular employee with respect to
the activity in which he is employed and his
employment shall continue while such activity exists.
COMMENT:
1. Significance of the Law
- Article 280 reinforces the Constitutional mandate
to protect the interest of labor.
- Its language evidently manifests the intent to
safeguard the tenurial interest of the worker who
may be denied the rights and benefits due a
regular employee by virtue of lopsided
agreements with the economically powerful
employer who can maneuver to keep an employee
on temporary or casual status for as long as
convenient.
- To carry out this objective, the law generally
considers an employment as regular when the
activities performed by the employee are usually
necessary or desirable in the usual business or
trade of the employer, contrary agreements
notwithstanding.
- This is significant because under Article 279 of the
Labor Code, in cases of regular employment,
the employer cannot terminate the services of an
employee except for a just cause or for an
authorized cause.
2. Construction of Article 280
- Article 280 should not be interpreted in such a way
as to deprive employers of the right and
prerogative to choose their own workers if they
have sufficient basis to refuse an employee a
regular status.
- Considering that Article 280 is intended to prevent
circumvention of the employees right to be secure
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 84
Atty. Paulino Ungos
in his employment, the clause in the said article
indiscriminately and completely ruling out all
written or oral agreements in conflict with the
concept of regular employment should be
construed to refer only to the substantive evil the
Labor Code itself has singled out agreements
entered into precisely to circumvent security of
tenure.
- It should have no application to instances where a
fixed period of employment was agreed upon
knowingly and voluntarily by the parties, without
force, duress or improper pressure being brought
to bear upon the employee and absent any other
circumstance vitiating his consent, or where it
appears that the employer and employee dealt
with each other on more or less equal terms with
no moral dominance whatever being exercised by
the former over the latter.
Pantranco North Express vs. NLRC
FACTS: In 1971, PNEI hired RP as driver. In 1973, RP
was dismissed from his employment for being absent
without leave for 107 calendar days. 15 years after his
dismissal, RP reappeared and implored PNEI to
reconsider his dismissal that PNEI initially denied. But
due to insistent appeals by RP, PNEI eventually
acceded and hired him as driver, but on contractual
bases for 1 month. PNEI did not renew the
employment contract because of RPs involvement in a
vehicular mishap in Nueva Vizcaya. Is the employment
contract valid?
HELD: The employment contract is valid. It should be
noted that the re-hiring of RP was merely an act of
generosity on the part of PNEI and not because PNEI
was impressed with the credentials of RP. What Article
280 seeks to prevent is the practice of some
unscrupulous and covetous employers who wish to
circumvent the law that protects lowly workers from
capricious dismissal from their employment. The said
provision, however, should not be interpreted in such a
way as to deprive employers of the right and
prerogative to choose their own workers if they have
sufficient basis to refuse an employee a regular status.
In the present case, the services of RP was validly
terminated 15 years before he was re-hired as
contractual driver for just 1 month. Definitely, his re-
hiring cannot be construed to mean that RP reacquire
his former permanent status.
3. Article 280 Not a Test of Employer-Employee
Relationship.
- Article 280 merely establishes the classification of
employment it is not the yardstick for
determining the existence of an employment
relationship.
- The existence of EER should be established along
the four-fold test laid down in Viana vs. Al-
Lagadan, to wit:
a) Selection and engagement
b) Payment of wages
c) Power of dismissal

d) Power to control the employees conduct
4. Classification of Employment
- Article 280 classifies employment into 3 types:
a) regular or permanent
b) non-regular or temporary
c) casual
5. Regular or Permanent Employment
- An employment is deemed regular where the
employee has been engaged to perform activities
that are usually necessary or desirable in the
usual business or trade of the employer
- As to whether or not an employment is regular
should be determined neither by the employment
contract nor by the nomenclature given to it by the
employer, but by the nature of the job.
- The primary standard in determining whether an
employment is regular or not, is the reasonable
connection between the particular activity
performed by the employee in relation to the usual
business or trade of the employer. 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. If
the job is usually necessary or desirable to the
main business of the employer, then the
employment is, as a general rule, regular.
- In some cases, repeated rehiring and the
continuing need for the employees service may
indicate that the activity is usually necessary or
desirable in the usual business or trade of the
employer.
Pure Foods Corporation vs. NLRC
FACTS: PFC is a corporation engaged in the export of
canned tuna fish. Employees performed the task of
receiving, skinning, loining, packing and casing-up of tuna
fish. Upon expiration of the 5-month contract, the said
employees were terminated and replaced with another set
of employees. Claiming that they were regular employees
who cannot be dismissed without just cause, the affected
employees filed a complaint for illegal dismissal with the
NLRC. PFC claimed that the complainants were non-
regular employees because they were employed for a
specific period, hence they are estopped from questioning
their separation from service because they had expressed
their conformity with the 5-month duration of their
employment contracts. Are the complainants regular
employees?
HELD: The complainants held regular employment,
considering that the activities they performed were usually
necessary or desirable in the business or trade of PFC
which was the processing and canning of tuna fish for
export. The mere fact that they were hired on a 5-month
contract basis does not mean that their employment was
for a specific project or undertaking. The term specific
project or undertaking contemplates an activity which is
not commonly or habitually performed or such type of work
which is done on a daily basis but only for a specific
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 85
Atty. Paulino Ungos
duration of time or until completion. The fact that PFC
repeatedly and continuously hired workers to do the same
kind of work as that performed by those whose contracts
had expired indicates that the said employees were not
hired for a specific project or undertaking only. The scheme
of PFG was apparently designed to prevent the terminated
employees from attaining the status of regular employees.
It was a clear circumvention of the employees right to
security of tenure and to other benefits. The 5-month period
should be struck down or disregarded as contrary to public
policy and morals. To uphold the contractual arrangement
would in effect permit PFC to avoid hiring permanent or
regular employees by simply hiring them on a temporary or
casual basis.
Baguio Country Club vs. NLRC
FACTS: BCC is a recreational establishment certified by
the DOLE as entertainment service establishment. It
employed JC on a day-to-day basis in various capacities as
laborer and dishwasher for a period of 10 months.
Thereafter, JC was hired as gardener and rehired for 1
month and 20 days and his services were thereafter
terminated. JC challenged the validity of the termination of
his employment. He argued that he could not be dismissed
without just cause because he was holding a regular
employment. On the other hand, BCC maintained that JC
was a contractual employee whose employment was for a
fixed and specific period as evidenced by the contracts of
employment. Was JC a regular employee?
HELD: Considering that JC was repeatedly re-hired to
perform tasks ranging from dishwashing and gardening, he
held regular employment. Such repeated rehiring and the
continuing need for his services are sufficient evidence of
the necessity and indispensability of his service to BCCs
business or trade. The law demands that the nature and
entirety of the activities performed by the employee be
considered. It is not tenable to argue that the
aforementioned tasks of JC are not necessary as a
recreational establishment, just as it cannot be said that
only those who are directly involved in providing
entertainment service may be considered as necessary
employees. Otherwise, there would be no need for the
regular maintenance section of the company. It is of no
moment that JC was told when he was hired that his
employment would only be on a day-to-day basis for a
temporary period may be terminated at any time subject to
the companys discretion. Precisely, the law overrides such
conditions which are prejudicial to the interest of the
worker.
Beta Electric Corporation vs. NLRC
FACTS: LP was hired by BEC as clerk typist III for a period
of 1 month. Her employment contract was extended 5 times
for 1-month each. BEC terminated the services of LP. On
the same day she went to the Labor Arbiter on a complaint
for illegal dismissal. BEC argued that LP was merely hired
on a temporary basis for the purpose of meeting the
seasonal or peak demands of the business, hence, hence
she may be terminated at will after the accomplishment of
her task. Was LP a regular employee?

HELD: LP was a regular employee. The fact that her
employment has been on a contract-to-contract basis
cannot alter the regular character of her employment
because contracts cannot override the mandate of the law.
Hence, by operation of law, she has become a regular
employee. BEC cannot rightfully say that since LPs
employment hinged from contract-to-contract, ergo, it was
temporary. Under the Labor Code, an employment may
only be said to be temporary where [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 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, LPs work
is far from being specific or seasonal but rather, one
which is usually necessary or desirable in the usual
business or trade of BEC.
6. Non-Regular or Temporary Employment
- General rule: an employment is deemed regular
where the employee has been engaged to perform
activities that are usually necessary or desirable in
the usual business or trade of the employer.
- Exceptions:
a. Project employment
b. Seasonal employment
c. Fixed-term employment
- The activities performed by the employee are
usually necessary or desirable in the usual
business or trade of the employer, but the law
does not consider them a regular employment
because the engagement of the employee is only
for a limited period.
6.1 Project Employment
- Project employment is a job that is confined to a
specific project or undertaking, the completion or
termination of which has been determined at the
time of the engagement of the employee,
regardless of the number of years that it would
take to finish the undertaking.
- The mere fact that the employment of employees
engaged to perform a specific project has gone
beyond 1 year does not detract from, or legally
dissolve, their status as project employees.
- The term specific project or undertaking
contemplates:
a. An activity which is not commonly or
habitually performed
b. A type of work which is done on a daily
basis but only for a specific duration of
time until completion.
- The term project could refer to one or the other
of at least 2 distinguishable types of activities:
a. A project could refer to a particular job or
undertaking that is within the regular or
usual business of the employer, but
which is distinct and separate, and
identifiable as such, from the other
undertakings of the company. Example:
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 86
Atty. Paulino Ungos
construction of a residential
condominium.
b. A project could also refer to a particular
job or undertaking that is not within the
regular business of the employer. Such
job or undertaking must also be
identifiably separate and distinct from the
ordinary or regular business operations of
the employer. Example: Five-year
expansion program of the National Steel
Corporation.
- Length of service is not the controlling test of
project employment.
- The test of project employment is whether or not
the engagement of the employee has been fixed
for a specific project or undertaking, the
completion or termination of which has been
determined at the time of the engagement of the
employee.
- The proviso any employee who has rendered at
least one year of service shall be considered a
regular employee relates only to casual
employment and not to project employment.
- In project employment, the duration of
employment is coterminous with the work to which
the employee was assigned. Once the project is
completed, the employment terminates.
- The employees affected cannot compel the
employer to keep them in the payroll because it is
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.
- If the employment of project employees is
terminated by reason of completion, they are not
entitled to separation pay.
6.2. Seasonal Employment
- Seasonal employment is a job that is limited to the
duration of particular season.
- Example: additional department store employees
during Christmas.
- The employment of seasonal employees is co-
terminus with the duration of the season.
- However, if the same employees are repeatedly
engaged every season, they become regular
seasonal employees, in which case, they cannot
be terminated without just cause.
- During off-season, the employment of regular
seasonal employees is not severed but merely
suspended.
- The fact that during off-season, the regular
seasonal employees are able to get employment
elsewhere does not by itself cut their employment
relations. Neither can the fact of subjecting them
to medical examinations at the beginning of each
season make them new employees, because such
medical examination is nothing but a mere
precautionary measure for the benefit of both the
employer and employee.

6.3. Fixed-Term Employment
- Temporary employment is not limited to those by
nature seasonal or for specific projects with pre-
determined dates of completion.
- It also includes those to which the parties by free
choice have assigned a specific date of
termination.
- In an employment for a fixed period, the
determining factor is not the activity that the
employee is called upon to perform but the day
certain agreed upon by the parties.
- A day certain means that which must necessarily
come, although it may not be known when.
- If there is no intent to circumvent the law, the
validity of the temporary employment should be
upheld.
- By way of resume, employment contracts for a
fixed period cannot be said to be in circumvention
of security of tenure:
a. If the fixed period of employment was
knowingly and voluntarily agreed upon by
the parties without any force, duress or
improper pressure being brought to bear
upon the employee and without any other
circumstances vitiating consent.
b. If it satisfactorily appears that the
employer and employee dealt with each
other on more or less equal terms with no
moral dominance whatever being
exercised by the former on the latter.
- Example: overseas employment contracts,
appointments to the positions of dean, assistant
dean, college secretary, principal, and other
administrative offices in educational institutions.
- DOLE implicitly recognizes through its Policy
Instructions No. 8 that certain company officials
may be elected for what would amount to fixed
periods, at the expiration of which they would have
to step down, because the stockholders or the
board of directors for one reason or another did
not reelect them.
Brent School vs. Zamora
FACTS: DA was engaged by Brent School as Athletic
Director under a contract which fixed a specified term of 5
years. 3 months before the expiration of the stipulated
period, Brent School advised DA that his employment will
be terminated on the expiration date of the employment
contract. DA protested the termination of his employment.
He argued that although his contract did stipulate that the
th
same would terminate on the 5 year, he could not be
dismissed because he had acquired the status of a regular
employee considering that his services were necessary and
desirable in the usual business of his employer and that he
has already served for 5 years. Is DA correct?
HELD: DA is not correct. Considering that there is an
employment contract validly entered into without any
indication that it was intended to deny DA his right to
security of tenure, the employment of DA was validly
terminated. The expiration of the employment contract
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 87
Atty. Paulino Ungos
automatically terminated the employment of DA without the
necessity of notice.
Philippine Village Hotel vs. NLRC
FACTS: PVH closed down its operations due to serious
financial and business reverses. As a result, the services of
its employees were terminated. Thereafter, the Union filed
a complaint for separation pay, ULP and illegal lockout.
NLRC upheld the validity of the closure after finding the
losses suffered by PVH to be actual, genuine and of such
magnitude as to validly terminate the services of the
employees. However, the NLRC directed PVH to give them
priority in the hiring of personnel should the operations
resume. After almost 3 years, PVH decided to have a 1-
month dry-run operation to ascertain the feasibility of
resuming its business operations. PVH hired the workers
whose employments were terminated for 1 month. After
which, PVH terminated their services. They claimed that
their employment could not be terminated because they
were regular employees. Is the contention correct?
HELD: The contention is not correct. Their engagement
was only for a period of 1 month, which they voluntarily and
knowingly agreed. The fact that they were required to
render services usually necessary or desirable in the
operation of the business during the 1-month dry-run
operation does not in any way impair the temporary nature
of their employment. In a fixed-term employment, the
decisive determinant is not the activities that the employee
is called upon to perform, but the day certain agreed upon
by the parties day certain being understood to be that
which must necessarily come although it may not be known
when.
Panaligan vs. General Milling Corporation
FACTS: GMC is engaged in the production and sale of
livestock and poultry. It employs hundreds of employees,
some on a regular basis and others on a casual basis, as
emergency workers. On different dates, GMC employed
emergency workers at its poultry plant under separate
temporary/ casual contracts of employment for a period of
5 months. Upon expiration of their respective contract, their
services were terminated. Claiming that they are regular
employees because the work they performed was usually
necessary or desirable in the usual business of GMC, the
said workers filed a complaint for illegal dismissal. Were the
workers regular employees?
HELD: The employment of said workers is non-regular.
While their employment was necessary in the usual
business of GMC, they were employed on a mere
temporary basis, since their employment was limited to a
fixed period. There was no illegal dismissal when their
services were terminated upon the expiration of their
contracts. Lack of notice is of no consequence, because
when the contract specifies the period of its duration, it
terminates on the expiration of such period.
7. Casual Employment
- Casual employment is a job wherein the activities
performed by the employee are not usually

necessary or desirable in the usual business or
trade of the employer.
- Casual means occasional, coming without
regularity.
- Example: In a sawmill, if a power unit running the
mill gets out of order and a mechanic is contracted
to fix the engine, the work of the mechanic would
be considered as casual because the reparation of
the mill is not the actual business of the sawmill
but the sawing of lumber.
- A person hired to repair and paint a building being
leased by a company engaged in leasing buildings
is not a casual employee because the job is
usually necessary or desirable in the business of
leasing buildings.
7.1. Casual Employment on Regular Status
- A casual employee who has rendered at least 1
year of service, whether such service is
continuous or broken, is considered a regular
employee with respect to the activity in which he is
employed.
- The regular status attaches to the casual
employee on the day immediately after the end of
the first year of service.
- The significance of this is that his employment
cannot be terminated without just cause while
such activity exists.
8. Article 280 vis--vis Article 106
- Article 106 applies to employees hired through a
contractor.
- Article 280 applies to employees directly hired by
an employer.
DEPARTMENT ORDER NO. 19
(Series of 1993)
GUIDELINES GOVERNING THE EMPLOYMENT OF
WORKERS IN THE CONTRUCTION INDUSTRY
In the interest of stabilizing and promoting harmonious EER
in the construction industry and in order to ensure the
protection and welfare of workers employed therein, the
following guidelines are hereby issued for all concerned:
Section 1. Coverage
- This issuance shall apply to all operations and
undertakings in the construction industry and its
subdivisions, namely:
1. General building construction
2. General engineering construction
and
3. Special trade construction
4. To companies and entities involved
in demolition works
5. To those falling within the
construction industry as determined
by the Secretary of Labor and
Employment
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Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
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Section 2. Employment Status
2.1 Classification of employees
a. project employees those employed in
connection with a particular construction
project or phase thereof and whose
employment is coterminous with each
project or phase of the project to which
they are assigned.
b. non-project employees those employed
without reference to any particular
construction project or phase of a project.
c.
2.2 Indicators of project employment
a. The duration of the specific/ identified
undertaking for which the worker is
engaged in reasonably determinable.
b. Such duration, as well as the specific
work/service to be performed, is defined
in an employment agreement and is
made clear to the employee at the time of
hiring.
c. The work/service performed by the
employee is in connection with the
particular project/ undertaking for which
he is engaged.
d. The employee, while not employed and
awaiting engagement, is free to offer his
services to any other employer.
e. The termination of his employment 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.
f. An undertaking in the employment
contract by the employer to pay
completion bonus to the project employee
as practiced by most construction
companies.
2.3 Project completion and rehiring of workers
a. The employees of a particular project are
not separate from work at the same time.
b. Upon completion of the project or a
phase thereof, the project employee may
be rehired for another undertaking
provided that such rehiring conforms with
the provisions of law and this issuance. In
this case, the last day of service in the
preceding project should be indicated in
the employment agreement.
2.4 Types of non-project Employees
a. Probationary employees
b. Regular employees
c. Casual employees
2.5 Contracting and subcontracting
Section 3. Conditions of Employment

3.1 Security of Tenure
3.2 Project employees not entitled to separation
pay if services are terminated as a result of the
completion of the project or any phase thereof.
3.3 Project employees entitled to separation pay
a. Project employees whose aggregate
period of continuous employment in a
construction company is at least 1 year in
the absence of a day certain agreed
upon.
b. If the project or phase of the project has
not yet been completed and his services
are terminated without just cause or
authorized cause, and there is no
showing his services are unsatisfactory,
the project employee is entitled to
reinstatement with backwages to his
former position or substantially equivalent
position. If reinstatement is no longer
possible, the employee is entitled to his
salaries for the unexpired portion of the
agreement.
3.4 Completion of the project
- project employees who are separated
from work as a result of completion are
entitled to the pro-rata completion bonus
if there is undertaking for the grant of
such bonus.
- based on industry practice which is at
least month salary for 12 months
service.
3.5 Statutory Benefits
- monetary and non-monetary
3.6 Payment by results
- based of not less than the minimum
wage applicable in the region.
Section 4. Preventive Suspension
- Project employees may be preventively
suspended if their continued employment poses a
serious and imminent threat to the life or property
of the employer or of their co-workers.
- Shall not last longer than 15 days.
- May extend period provided that during the period
of extension, he pays the wages and other
benefits due to the worker.
- Notice to the employee to hold a fact- finding
investigation
Section 5. Self-Organization and Collective Bargaining
- The Department encourages the formation of
trade unions provided that the formation or
activities of a recognized trade union will not
prejudice existing bargaining units.
- Trade union refer to a combination of worker of
the same trade or of several allied trades, for the
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 89
Atty. Paulino Ungos
purpose of securing by united action the most
favorable conditions regarding wages, hours of
labor and other terms and conditions of
employment for its members.
Section 6. Liabilities/Responsibilities of the Employer
and the Workers
6.1 Requirements of labor and
social legislation
- The construction company and the general
contractor and/or subcontractor shall be
responsible for the workers in its employ on
matters of compliance with the existing laws and
regulations.
- The prime/general contractor shall exercise sound
judgment and discretion in contracting out projects
to ensure compliance with labor standards
- Project and non-project employees shall observe
the requirements of labor and social legislations
and reasonable company rules and regulations on
matters pertaining to their obligations.
6.2 Implementation of safety and health
standards
- Regional Offices shall strictly enforce the
Occupational Safety and Health Standards
particularly Rule 1005 on Duties of Employers,
Workers and Others Persons, Rule 1410 on
Construction Safety.
6.3 Wage Increases
- The wage rates shall be borne by the principals or
clients of the construction contractors and the
contracts shall be deemed amended accordingly.
- The wage rates shall depend on the skills or level
of competence of such employee as determined
by NMYCT Trade and Standards subscribed to by
the Philippine Construction Industry under the 5
Year Construction Manpower Development Plan
date Nov 1991
Section 7. Effect on Existing Issuances and
Agreements
Department Order No. 19 series of 1993 applies only to the
construction industry and not to general services
contractor.
ART 281. Probationary employment. Probationary
employment shall not exceed six (6) months from the
date the employee started working, unless it is covered
by an apprenticeship agreement stipulating a longer
period. The services of an employee who has been
engaged on a probationary basis may be terminated for
a just cause or when he fails to qualify as a regular
employee in accordance with reasonable standards
made known by the employer to the employee at the
time of his engagement. An employee who is allowed
to work after a probationary period shall be considered
a regular employee.
Art. 281. Probationary Employment. - Probationary
employmentshall not exceed six (6) months from the
date the employee started working, unless it is covered

by an apprenticeship agreement stipulating a longer
period. The services of an employee who has been
engaged on a probationary basis may be terminated for
a just cause or when he fails to qualify as a regular
employee in accordance with reasonable standards
made known by the employer to the employee at the
time of his engagement. An employee who is allowed
to work after a probationary period shall be considered
a regular employee.
COMMENT:
Concept of Probationary Employment
- A situation where the employee upon his
engagement is made to undergo a trial period
during which the employer determines his fitness
to qualify for regular employment, based on
reasonable standards made known to him at the
time of engagement.
- Employment contract or appointment paper should
expressly and specifically state that the
engagement of the employee is on probationary
basis
- Purpose of probationary employment: To allow the
employer to test the working habits and other
personal traits of the employee with respect to his
fitness for regularization in its company.
- Prerogative of an employer to place new
employees on probation.
o Prerogative an incident of the employers
inherent right to choose whom to hire and
whom to decline.
Duration of Probationary Employment of Ordinary
Employees
- Generally: Probationary period of employment of
ordinary employees is limited to six (6) months.
- Exceptions:
(a) When the parties to an employment contract
or collective bargaining agreement agree on a
longer period;
(b) When a longer probationary period is
established by company policy; or
(c) When a longer period is required by the
nature of work.
Case: Buiser vs. Leogardo (131 SCRA 151)
FACTS: B was hired by GDTC as Sales Representative
whose job was to solicit advertisements for inclusion in a
telephone directory. In her employment contract, B was
placed on probationary status for a period of eighteen (18)
months. B maintained that her 18-month probationary
employment is not valid, considering that the Labor Code
fixes the probationary employment as six (6) months.
ISSUE: Is the 18-month probationary employment of B
valid?
HELD: YES. While the Labor Code sets the probationary
period of employment at six (6) months, the parties to an
employment contract may validly agree on a longer period,
such as when the same is established by company policy
or when the same is required by the nature of work is to be
performed by the employee. In the latter case, there is a
recognition of the exercise of managerial prerogatives in
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 90
Atty. Paulino Ungos
requiring a longer period of probationary employment,
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. In the case at
bar, it has been shown that GTDC needs at least 18
months to determine the character and selling capabilities
of B as sales representative. Moreover, the 18-month
probationary period is recognized by the CBA.
- Where the work for which the employee has been
engaged is learnable or apprenticeable in
accordance with the standards prescribed by the
DOLE, the period of probationary employment
shall be limited to the authorized learnerhsip or
apprenticeship period.
o Upon graduation or upon completion of
the learning period, an apprentice or
learner may not be put under
probationary employment in the same
companyin which they trained.
In another company: may be
placed on probationary status
for six (6) months.
Case: Holiday Inn Manila vs. NLRC (226 SCRA 417)
FACTS: EH applied for employment with HIM. On April 15,
1991, EH was accepted for on-the-job training as a
telephone operator for a period of three weeks. On May 13,
1991, after completing her training, she was employed on a
probationary basis for a period of six (6) months ending
November 12, 1991. On November 8, 1991, four (4) days
before the expiration of the stipulated deadline, HIM
terminated her probationary employment on the ground that
her performance had not come up to the standards.
Claiming that she was not a probationary employee but a
regular employee, EH then filed a complaint for illegal
dismissal.
ISSUE: Whether or not EH was a probationary employee or
a regular employee at the time of her dismissal?
HELD: EH was already a regular employee at the time of
her dismissal. She had already undergone probationary
employment during her on-the-job training. Thus, when
her services were continued after her training, HIM in effect
recognized that she had passed probation and was
qualified to be a regular employee. Her services were
continued, presumably because they were acceptable,
although she was formally placed this time on probation. In
effect, therefore, EH was placed on probation twice, first
during her 3-week on-the-job training and second during
another period of six (6) months. Her probation clearly
exceeded the period of six months prescribed by the Labor
Code.
Duration of Probationary Employment of Teachers
- The standards set or promulgated jointly by the
Department of Education and the Department of
Labor and Employment shall be applied by the
Department of Labor and Employment.
- The probationary period for teaching and
academic non-teaching personnel are as follows
(DOLE-DECS-CHED-TESDA Order No. 1, 1996):

(a) For elementary and secondary level
-- three (3) consecutive school
years of satisfactory service;
(b) For tertiary and graduate level six
consecutive semesters of
satisfactory service;
(c) For tertiary level on trimester service
nine (9) consecutive trimesters of
satisfactory service.
- The School, as employer, is the one who is to set
the standards and determine whether or not the
services of an employee are satisfactory.
- It is the right of the employer to shorten the
probationary period if he is not impressed with the
services of the employee.
- This prerogative is in accordance with academic
freedom and constitutional autonomy which give
educational institution the right to choose who
should teach.
Case: Cagayan Capitol College vs. NLRC (188 SCRA 658)
FACTS: X was initially hired by C College as probationary
instructor on a 10-month contract basis which ended on
March 31, 1982. Upon expiration of the said contract, he re-
applied and was given a new contract commencing on
June 1, 1982 and ending March 31, 1983. Thereafter, he
re-applied for employment and was given a contract for a
fixed period starting June 1, 1983 to March 31, 1984. Upon
mutual agreement, the contract was extended to include
the summer of 1984 up to May 31, 1984 which is still part of
the school year 1983-1984. Upon expiration of said period
X sent a letter re-applying for employment with the School.
His application, however, was turned down because of
various complaints from his students. X filed a complaint for
illegal dismissal, claiming that C College had no right to
reject his employment on the ground that he had become a
regular employee. C College argued that there was no
illegal dismissal because it merely terminated the
probationary employment of X for failure to qualify for
regular employment.
ISSUE: Whether or not the termination of Xs employment
is valid.
HELD: YES. The termination of Xs employment is valid.
His employment did not automatically become regular and
permanent because his services during the probationary
period were not satisfactory.
- With regard to teaching or academic personnel,
only those employed on full-time basis can acquire
regular or permanent status.
- Part-time teaching or academic personnel are not
eligible for regular or permanent employment even
if they have satisfactorily completed the required
number of years, semesters or trimesters of
probationary employement.
Extension of Probationary Employment
- Can be extended to give the employee a chance
to improve.
- Such extension should be done on or before the
expiration of the prescribed period otherwise the
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 91
Atty. Paulino Ungos
employee will automatically become a regular
employee by operation of law.
Case: Mariwasa Manufacturing Inc. vs. Leogardo (169
SCRA 465)
FACTS: JAD was engaged by MMI as general utility
worker on probationary status for a period of six (6)
months. Upon expiration of the probationary period,
MMI informed JAD that his work was unsatisfactory
and had failed to meet the required standards. To give
him a chance to improve his performance and qualify
for regular employment, instead of dispensing with his
service then and there, with his written consent MMI
extended his probation period for another three (3)
months. His performance, however did not improve
and on that account MMI terminated the employement
of JAD at the end of the extended period.
ISSUE: Whether or not the 6-month probationary
period of employment may be validly extended by
agreement of the employer and employee?
HELD: YES. The extension of the 6-month
probationary employment was valid. The extension of
JADs probation was an act of liberality on the part of
MMI in order to afford him a chance to make good after
having initially failed to prove his worth as an
employee. Such an act cannot now unjustly be turned
against MMIs account to compel it to keep on its
payroll one who could not perform according to its
work standards. By voluntarily agreeing to an
extension of the probationary period, JAD in effect
waived any benefit attaching to the completion of the
said period if he still failed to make the grade during
the period of extension. There is nothing in the law
which by any fair interpretation prohibits such a waiver.
Termination of Probationary Employment
- The services of an employee who has been
engaged on a probationary basis may be
terminated for:
(a) Any of the causes enumerated in
Articles 282, 283 and 284 of the
Labor Code; or
(b) Failure to qualify as a regular
employee in accordance with
reasonable standards made known
by the employer at the time of his
engagement.
- It is not necessary that the entire probationary
period be exhausted before the employment could
be terminated.
o Termination may be done even before
the expiration of the probationary period.
Case: Manila Electric Co. vs. NLRC (178 SCRA 198)
FACTS: RM was hired by MERALCO as messenger on
probationary status for five (5) months. In the course of his
employment, RM demonstrated a performance that was not
satisfactory. Because of this, MERALCO terminated the
probationary employment of RM on the fourth month.
ISSUE: Whether or not the dismissal was valid.

HELD: YES. RM was neglectful of his duties. He frequently
played hookey, taking the rest of the day off and not
returning to the office after having performed his errands.
The fact that the dismissal was effected one (1) month
before the expiration of his probationary employment does
not invalidate the dismissal. The provision of Article 280 of
the Labor Code that probationary employment shall not
exceed six (6) months means that the probationary
employee may be dismissed for cause anytime before the
expiration of six (6) months after hiring. If after working less
than six months, he is found to be unfit for the job, he can
be dismissed. But if he continues to be employed longer
than six months, he ceases to be a probationary employee
and becomes a regular or permanent employee.
Case: International Catholic Migration Commission vs.
NLRC (169 SCRA 606)
FACTS: On January 24, 1983, ICMC engaged the services
of BG as cultural orientation teacher on probationary status
for a period of six (6) months. Three (3) months thereafter,
ICMC terminated the employment of BG for failure to meet
the prescribed standards as reflected in the performance
evaluation. Thereafter, BG filed a complaint for illegal
dismissal against ICMC. The Labor Arbiter upheld the
validity of the dismissal but ordered ICMC to pay BG her
salaries for the unexpired portion of her probationary
employment on the ground that the six-month probationary
employment was for a definite period which the employer
should exhaust in order to give the employees the
opportunity to meet the required standards.
ISSUE: Whether or not BG is entitled to salaries for the
unexpired portion of her probationary employment?
HELD: NO. The legal basis of the Labor Arbiter is
erroneous. A probationary employee may be dismissed for
cause anytime before the expiration of six months after
hiring. A probationary employee is one who is on trial by an
employer during which the employer determines whether or
not he is qualified for regular employment. A probationary
appointment is made to afford the employer an opportunity
to observe the fitness of a probationer while at work, and to
ascertain whether he will become a proper and efficient
employee. The word probationary as used to describe the
period of employment, implies the purpose of the term or
period, but not its length.
Limitations on the Right to Terminate a Probationary
Employment
- The power of an employer to terminate a
probationary employment is subject to the
following limitations:
(a) It must be exercised in accordance with the
specific requirements of the contract.
(b) The dissatisfaction of the employer must be
real and in good faith, not feigned so as to
circumvent the contract or the law; and
(c) There must be no unlawful discrimination in
the dismissal.
Policy Instructions No. 11: Summary (pg. 545)
TO: All Regional Directors
SUBJECT: PROBATIONARY EMPLOYMENT
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 92
Atty. Paulino Ungos
Under the Labor Code, six (6) months is the general
probationary period, but the probationary period is actually
the period needed to determine fitness for the job. This
period, for lack of a better measurement, is deemed to be
the period needed to learn the job.
Thus, if the job is apprenticeable then the probationary
period is the apprenticeship period, which may be six (6)
months, less than six (6) months, or more than six (6)
months, depending upon the nature of the job.
The probationary employment of professors, instructors
and teachers shall be subject to standards established by
the Department of Education and Culture.
For purposes of determining regular employment, the
probationary period served or rendered shall be considered
part of the service rendered.
The purpose of this policy is to protect the worker and at
the same time enable the employer to make a meaningful
employee selection.
Art. 282. Termination by Employer. - An employer may
terminate an employment for any of the following
causes:
(a) Serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or
representative in connection with his work;
(b) Gross and habitual neglect by the employee of his
duties;
(c) Fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized
representative;
(d) Commission of a crime or offense by the employee
against the person of his employer or any immediate
member of his family or his duly authorized
representatives; and
(e) Other causes analogous to the foregoing.
COMMENT:
Serious Misconduct
- Misconduct: improper or wrong conduct.
o The transgression of some established
and definite rule of action, a forbidden
act, a dereliction of duty, wilful in
character, and implies a wrongful intent
and not a mere error of judgment.
- To constitute a just cause for dismissal, the
misconduct must be:
(a) Serious; and
(b) Related to or in connection with the
employees work.
Misconduct Must Be Serious
- If not serious, it will merely warrant a penalty
lesser than dismissal.
- The utterance of a slightly disrespectful language
is a misconduct that is not serious so as to call for
the imposition of the penalty of dismissal.
Case: Samson vs. NLRC (330 SCRA 460)
FACTS: During the informal Christmas party of SPCs
Sales and Marketing Division on December 17, 1993, RFS
was heard to have uttered, Si EDT (referring to the

General Manager and President of the company) bullshit
yan, while making the dirty finger gesture. RFS likewise
told his co-employees that the forthcoming national sales
conference would be very bloody one. For this, RFS was
dismissed from his employment on the ground of serious
misconduct.
ISSUE: Whether or not RFS is guilty of serious misconduct
to warrant his dismissal from service?
HELD: NO. The misconduct of RFS is not of such serious
and grave character as to warrant his dismissal. First, RFS
made the alleged offensive utterances and obscene
gesture during an informal Christmas gathering of the
companys district sales managers and marketing staff. The
gathering was just a casual get-together of employees.
Employees should be allowed wider latitude to express
their sentiments during these kinds of occasions which are
beyond the disciplinary authority of the employer. Second,
RFS outburst was in reaction to the decision of the
management in the Cua Lim case. Admittedly, using the
words bullshit and making lewd gesture to express his
dissatisfaction over said management decision were clearly
in bad taste but these acts were not intended to malign or
cast aspersion on the person of the president and general
manager of the company.
- The Samson vs. NLRC case should be
distinguished from the following cases where the
use of insulting and offensive language was held
to constitute serious misconduct justifying the
employees dismissal.
(a) In de la Cruz vs. NLRC, the dismissed
employee shouted saying angpagka-
professional mo! and putanginamo at
the companys physician when the latter
refused to give him a referral slip.
(b) In Autobus Workers Union vs. NLRC, the
dismissed employee called his supervisor
gagoka and taunted the latter by saying
bakitanong gusto mo, tang ina mo.
- In these cases, the dismissed employees were
held guilty of serious misconduct because they
personally subjected their respective superiors to
the foregoing verbal abuses. The utter lack of
respect for their superiors was patent.
(c) In Asian Design & Manufacturing
Corporation vs. Deputy Minister of Labor,
the dismissed employee made false
statements against the foreman (his
superior).
(d) In Reynolds Philippines Corporation vs.
Eslava, the dismissed employee
circulated several letters to the members
of the companys board of directors
calling the executive vice-president and
general manager a big fool, anti-
Filipino and accusing him of
mismanagement.
- In these cases, the dismissed employees were
held guilty of serious misconduct because they
made false and malicious statements against their
superiors.
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 93
Atty. Paulino Ungos
Misconduct Must Be in Connection with Employees
Work
- The act complained of must be related to the
performance of the duties of the employee such
as would show him to be thereby unfit to continue
working with the employer.
Case: Aris Philippines vs. NLRC (238 SCRA 59)
FACTS: Inside the canteen of the company, EB, a
canteen helper, questioned AS about his use of
somebody elses identification card. AS flared up and
said: Walakangpakialam! Kung gusto mo,
itaponkoitongmgapagkainninyo. Forthwith, he began
smashing some food items on display for sale at the
canteen and then slapped EB which caused her to fall.
ISSUE: Whether or not the dismissal is valid?
HELD: NO. Although the misconduct committed by AS
was serious, still it was not in connection with his work.
In order to constitute a just cause for dismissal, the
acts complained of must be related to the performance
of the duties of the employee such as would show him
to be thereby unfit to continue working for the
employer. The penalty of dismissal is, therefore,
excessive.
- A series of irregularities when put together may
constitute serious misconduct.
- Fitness for continued employment cannot be
compartmentalized into tight cubicles of aspects of
character, conduct and ability separate and
independent of each other.
Examples of Serious Misconduct
- The following offenses have been held as serious
misconduct:
(a) Assaulting an agent of a person in authority
committed by a security guard.
(b) Assaulting a co-employee
(c) Drunken and disorderly and pugnacious
behaviour.
(d) Fighting within company premises.
(e) Instigating labor unrest.
Willful Disobedience
- Wilful or intentional disobedience thereof, as a
general rule, justifies the peremptory dismissal of
the employee.
- In order that disobedience to employers order can
constitute a valid cause for dismissal, the following
requisites must be complied with:
(a) The disobedience must be wilful or
intentional;
(b) The order must be reasonable and
lawful;
(c) The order must be known to the
employee; and
(d) The order must pertain to or must be
in connection with the duties which
the employee had been engaged to
discharge.
Disobedience Must be Willful

- Wilfulness of disobedience is characterized by a
wrongful and perverse mental attitude rendering
the employees act inconsistent with proper
subordination.
- Disobedience must be done intentionally,
knowingly and purposely, without justifiable
excuse.
Order Must be Reasonable
- Reasonableness pertains to the kind or character
of directives and commands and to the manner in
which they are made.
- Example: A directive prohibiting employees from
using company vehicles for private purpose
without authority from management is a
reasonable order. However, a directive
transferring an employee to a position that is non-
existent is an unreasonable order.
Order Must be Lawful
- An order is lawful if it is not contrary to law,
morals, good customs, public policy or public
order.
- A directive obliging employees to purchase goods
from the store owned by the employer is an
unlawful order because it is contrary to Art. 112 of
the Labor Code.
o Hence, refusal on the part of the
employee to comply with said directive
does not constitute wilful disobedience.
Order Must be Known to the Employee
- An employee cannot be expected to comply with
an unknown order.
Order Must be in Connection with the Duties of the
Employee
- If the order is not connected with the nature of the
employees engagement, refusal to obey will not
constitute wilful disobedience.
Illustrative Cases of Willful Disobedience
(a) Refusal to obey a transfer order
Homeowners Savings & Loan Association vs. NLRC (262
SCRA 406)
FACTS: X was employed as Branch Accountant of the
HSLA-San Carlos City (Pangasinan) Branch. She was
transferred to the HSLA-Urdaneta (Pangasinan) Branch
because of the exigency to uplift the operational efficiency
of the branch. However, after citing many reasons, X first
requested the deferment of her new assignment, but
eventually refused to transfer alleging that the new
assignment would entail additional expenses and physical
exhaustion as Urdaneta is too far away to commute
everyday. This prompted HSLA to terminate Xs
employment on the ground of wilful disobedience.
ISSUE: Is X guilty of wilful disobedience?
HELD: YES. Xs refusal to obey the transfer order
constitutes wilful disobedience of a lawful order of her
employer, and therefore, a valid cause for her dismissal.
Castillo vs. CIR (39 SCRA 76)
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 94
Atty. Paulino Ungos
FACTS: X was employed as lobby boy of a theatre. He was
transferred by the floor manager of the theatre from the day
shift to the night shift, and at the same time was assigned
from Esquire Theater to the Savoy Theater pursuant to the
standard practice of rotating employees from one shift to
another. X disliked the new assignment because he did not
report for work anymore. After three days, X was dismissed
from his employment for insubordination and abandonment
of work.
ISSUE: Is X guilty of insubordination and abandonment?
HELD: YES. His dismissal was justified.
Isabelo vs. NLRC (276 SCRA 141)
FACTS: X, Y & Z were workers at the cocoa plantation of
UCPI in Balabagan, Lanaodel Sur. They were directed to
transfer to the other project sites at Maguindanao and
Sultan Kudarat to augment the undermanned workforce
thereat. As a matter of policy, UCPI offered to grant them
relocation allowances, relocation expense and living
quarters with their family at the transfer site. They refused
to obey the transfer order, for which reason, UCPI
dismissed them from service.
ISSUE: Is the dismissal valid?
HELD: YES.Because X, Y and Z are guilty of wilful
disobedience. It is perfectly within the prerogative of UCPI
to transfer its employees to other sites in order to augment
the workforce therein. Their dismissal was justified.
(b) Refusal to comply with an order requiring that food
requirements should be bought from a single
source.
St. Lukes Hospital vs. Minister (116 SCRA 240)
FACTS: X was Chief Dietician of SLHI. As such, she was
tasked with the responsibility of purchasing the food
supplies of SLHI. To meet its mounting financial problems,
SLHI adopted a policy of purchasing its foodstuffs from
SFS only. X was directed to comply with this policy.
However, X refused to obey the instruction and continued
to purchase food supplies from the old suppliers. As a
result, SLHI dismissed X for insubordination.
ISSUE: Is X guilty of subordination?
HELD: YES. By and large, it is clear that her reaction was
one of resistance rather than dutiful obedience, which
subordinates owe to orders of superiors. Her dismissal is,
valid and justified.
(c) Repeated disregard by a bank employee of an
office order against temporary overdrafts and
drawings against uncollected deposits.
Associated Citizens Bank vs. Ople (103 SCRA 130)
FACTS: CBTC through its President, issued an office order
directing that all temporary overdrafts, whether secured or
unsecured by assignment of deposits, should be phased
out by April 15, 1975. In disregard of the said order, X, the
manager of CBTC-Ayala Branch, allowed the current
account of CV to be overdrawn by P574,962.51 because
the checks deposited were dishonoured. For violating the
office order, CBTC dismissed X from his employment.
ISSUE: Whether or not the dismissal is valid?
HELD: YES. The violation by X of the office order against
temporary overdrafts is insubordination. Hence, his
dismissal was valid.

Gross and Habitual Neglect of Duty
- Gross: glaringly noticeable usually because of
inexcusable badness or objectionableness.
- Habitual: connotes more than just a single or
isolated act.
- Reason for authorizing the termination of an
employee on the ground of gross and habitual
neglect of duty is because of the reciprocal
obligations entailed in an employer-employee
relationship.
o i.e. for the employer to give a just wage
and a just treatment and for the
employee to render good work, diligence
and good behaviour.
- The obligation to give just compensation and
treatment carries with it the corollary right to
expect from the employee adequate work,
diligence and good behaviour.
Neglect Not the Same as Negligence
- Neglect: indicates that a person has not done
that which it was his duty to do it does not
indicate the reason for this failure.
- Negligence: a subjective state of the mind
o Indicates a particular reason why the
man has failed to do his duty, namely
because he has not kept the
performance of the duty in his mind as he
ought to have done.
Damage not Essential
- Not necessary for the employer to show that he
has suffered damage or prejudice as a result of
the employees neglect of his duties.
o It is enough that the act tends to damage
or prejudice the employer.
Illustrative Cases of Gross and Habitual Neglect of
Duty
(a) Prolonged absences
Philippine Geothermal vs. NLRC (236 SCRA 371)
FACTS: On May 31, 1989, X, who was employed as Steam
Test Operator, was accidentally injured when the steam-
pressured chicksan swivel joint assembly exploded while
he was checking a geothermal well. As a result, X was
confined in a hospital from May 31, 1989 to June 3, 1989.
On July 29, 1989, X was certified by the doctor to be fit to
return to work with the qualification that he could only
perform light work. On November 13, 1989, X was again
examined by a doctor who certified that he can go back to
his previous job on the sixth month. Despite this
certification, X did not report for work and by the end of
1989, he had used 10 days of vacation leave, 18 days of
sick leave, 15 days of WCA leave and 4 days of emergency
leave. On December 28, 1989, the doctor certified that Xs
injury had completely healed and that he could return to his
pre-injury work.
On the basis of the doctors finding, PGI directed X to
report for work. But instead of reporting for work, X sent a
note to PGI stating to wait for the doctors medical
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 95
Atty. Paulino Ungos
certificate. Notwithstanding the medical findings, X
continued to incur numerous absences. He did not report
for work in the months of January and February 1990.
Thus, on February 7, 1990, PGI sent another letter to X
directing him to report for work with warning that failure to
do so would subject him to disciplinary action. Still, X did
not report for work, prompting PGI to send another letter
with a final warning that failure to do so will result in the
termination of his employment. Still X failed to report for
work; neither did he inform PGI of the reasons for his
continued absences. Hence, PGI was constrained to
terminate the employment of X.
ISSUE: Whether or not the dismissal of X was valid and
justified?
HELD: YES. X is guilty of gross and habitual neglect of
duty.
(b) Delivering newly approved credit cards on five (5)
occasions to a person hardly known to the
employee.
Citibank N.A. vs. Gatchalian (240 SCRA 212)
FACTS: X was employed by Citibank as clerk-typist. Thirty-
one (31) applications for credit cards of alleged APBCI
employees were approved by Citibank and the
corresponding new and unsigned credit cards were issued.
On five (5) separate occasions, upon request of Y, X
personally picked up the new and unsigned credit cards
issued to seven APBCI employees. Yet at that time, she
had not personally met nor previously seen Y. On the mere
description over the telephone, X delivered the credit cards
to Y.
It turned out that the credit card applications of the alleged
APBCI employees were fictitious. Some of the credit cards
were used to purchase goods from various establishments
worth P200,000.00. Hence, Citibank dismissed X for gross
and habitual neglect of duty.
ISSUE: Is X guilty of gross and habitual neglect of duty?
HELD: YES. It was proved that she picked up the newly
approved credit cards on five (5) separate occasions and
delivered them to Y and the latters messenger. Certainly,
these repetitive acts bespeak of habituality.
(c) Repeated and numerous infractions in the
handling of monies.
Allied Banking Corporation vs. NLRC (156 SCRA 789)
FACTS: X was employed as teller of ABC Bank. During the
last six months of her employment, X was found to have
committed the following offenses:
(1) Incurring a series of shortages;
(2) Incurring a long string of overages;
(3) Violation of the procedures requiring verification of
drawers signature and approval of authorized
officers prior to payment of checks presented for
encashment over the counter; and
(4) Failure to observe instructions of superiors to
report to the Central Bank Cash Units.
For committing the foregoing offenses, ABC Bank
dismissed X from service.
ISSUE: Is the dismissal valid?
HELD: YES. The repeated and numerous infractions
committed by her in handling monies entrusted to her

cannot be considered minor. Taking into account the nature
of the tellers job, the infractions are too numerous to be
ignored or treated lightly.
D. Repeated anomalous transactions
NASUEFCO v. NLRC (286 SCRA 478)
FACTS: Pabiona was appointed as Sugar Accountant-
Bookkeeper. She was tasked to maintain records of all
transactions pertaining to the Raw and Refined Sugar
Exchange Program, validate Raw Sugar
Quedans submitted by Exchange participants prior to
issuance of the Refined Sugar Delivery
Orders and prepare and issue Refined Sugar Delivery
Orders only after validation procedures have been properly
complied with. When the books of NASUREFCO were
audited in 1990 anomalous and irregular transactions were
uncovered in the Raw Sugar Movement Report.
After the formal investigation, NASUREFCO terminated the
services of Pabiona for willful violation of company policies,
gross and habitual neglect of duties, and willful breach of
trust.
ISSUE: Is SP Guilty of gross and habitual neglect of duty?
HELD: Pabionas neglect of duty was gross. As her
position related to money matters, she was expected and
required to be extra vigilant in the performance of
her job as it involved the financial interest of the
company. She was also habitually remiss in her duties.
he fact that NASUREFCO did not suffer losses from the
anomalies committed by Pabiona because of timely
discovery does not excuse the latter as she was very much
aware that her acts would be greatly prejudicial to
NASUREFCO.
4. FRAUD
Is the knowing misrepresentation of the truth
Concealment of a material fact to induce another
to act to his or her detriment.
To constitute a just cause for dismissal, the fraud
must be:
a. Committed against the employer; and
b. In connection with the employees work.
Fraud committed against third person
without connection whatsoever with work
will not justify the dismissal of an
employee.
Philippine Airlines v. NLRC (328 SCRA 273)
FACTS: X was employed as load controller. X
reflected a lighter weight of baggage Cominero's
ticket to make it appear that the same was within
the allowable level. Cominero's excess baggage
was pooled with other passengers with lesser
baggage weight or no baggage at all.
ISSUE: Whether X is guilty of Fraud?
HELD: Yes. That private respondent attempted to
deprive petitioner of its lawful revenue is already
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 96
Atty. Paulino Ungos
tantamount to fraud against the company, which
warrants dismissal from the service. It must be
stressed that actual defraudation is not necessary
in order that an employee may be held liable.
5. WILLFUL BREACH OF TRUST
Breach is willful if it is done intentionally,
knowingly and purposely, without justifiable
excuse.
To constitute a valid cause for dismissal, the
breach of trust must be:
a. Willful; and
b. Related to the performance of the
employees functions.
The basic premise for the dismissal on the ground
of willful breach of trust is that employee
concerned holds a position of trust and
confidence.
An employee holds a position of trust and
confidence if he is entrusted with responsibility
involving:
a. Delicate matters
b. Where the employees has access to the
employers property in the form of articles
or merchandise for sale.
There must be basis for dismissal, mere suspicion
or simple apprehension of danger or prejudice is
note enough.
Proof beyond reasonable doubt is not required, it
is enough that there is reasonable grounds.
Guidelines for the application of the doctrine of
loss of confidence:
a. Loss of confidence should not be
simulated;
b. It should not be used as subterfuge for
causes which are improper, illegal or
unjustified;
c. It may not be arbitrarily asserted in the
face of over whelming evidence to the
contrary; and
d. It must be genuine, not mere afterthought
to justify earlier action taken in bad faith.
5.1 POSITIONS OF TRUST AND CONFIDENCE
The following have been held as positions of
trust and confidence:
a. Bank teller;
b. Cashier
c. Credit and collection supervisor
d. District sales supervisor
e. Salesman
f. Vice president for marketing
g. General manager
h. Warehouseman
i. Miner
j. Teachers
5.2 ILLUSTRATIVE CASES
A. Engaging in business competitive with that of the
employer

ELIZALDE INTL V. CA (103 SCRA 247)
FACTS: X was a salesman of Y Co. During the term of his
employement X formed an entity which sold competitive
product of Tanduay Rhum. Y Co. dismissed X for willful
breach of trust.
ISSUE: Is X guilty of willful breach of trust?
HELD: Engaging in a business in competition with
petitioner was not only an act of disloyalty but more
specifically a willful breach of the trust reposed in him by
petitioner as his employer, which is a just cause for
termination. it was the duty of Celestino Galan to promote
and sell the products of petitioner, which duty is
incompatible with his undisclosed ownership of a company,
found to be the source of the new product with the label
"TDY RHUM" manufactured by the Mabuhay Distillery Inc.,
distributed and sold in Cebu, in competition with the
Tanduay Rhum" distributed by petitioner.
B. Rendering services to a business rival
ABS-CBN Employees Union v. NLRC (276 SCRA 123)
FACTS: A, a camera man of ABS-CBN did not report for
the taping of an ABS- CBN production, because he
rendered service to another television station PTV4.
ABS_CBN terminated X on the ground of disloyalty and
willful breach of trust.
ISSUE: is X guilty of willful breach of trust?
HELD: Yes. He is guilty of disloyalty and serious
misconduct of willful breach of trust.
C. Using a chit already paid by one customer as a
means to pocket the payment of another customer.
Baguio Country Club v. NLRC (118 SCRA 557)
FACTS: X, who was employed as bartender pocketed the
payment of the customer and to conceal his misconduct, X
utilized the chit that was already paid by another customer.
ISSUE:Is X guilty of willful breach of trust?
HELD: X is guilty of willful breach of trust, dismissal valid.
D. Using double or fictitious requisition slips as a
means to withdraw company materials.
PLDT v. NLRC (129 SCRA 1630
We agree with the petitioner that private respondent Sevilla
is guilty of acts inimical to the interests of his employer. The
records show that Sevilla took advantage of his position as
Cable Splicer Headcrew (Sj-5) to withdraw company
properties which should never have been issued to him on
the strength of double and/or fictitious requisition slips. The
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 97
Atty. Paulino Ungos
petitioner had valid and legitimate reasons to lose its
confidence in respondent Sevilla and to order his dismissal.
E. Failure to return service firearm
DI Security Services v. NLRC (264 SCRA 458)
FACTS: X was employed as security guard. He was issued
a service firearm which he failed to turn over to his
employer at the end of his duty. When asked to explain the
whereabout of the firearm, X claimed that he gave it to the
shift-in-charge, which was denied under oath. X was
dismissed.
ISSUE: Is the dismissal valid?
HELD: Yes, constitute dishonesty which calls for the
corresponding penalty of dismissal.
F. Failure to return cash bond for unreasonable length
of time.
San Miguel Corporation v. NLRC (125 SCRA 805)
FACTS: REBOLOS figured in a vehicular collision. A
Criminal case was filed against REBOLOS for Reckless
Imprudence resulting in Damage to Property. A bail bond in
the amount of P7,000.00 being needed, SMC furnished the
amount in cash. REBOLOS posted the cash bond in his
name. The case was dismissed on November 22, 1977
when the insurance company paid for the damage
sustained. Sometime in May 1978, or six months after,
REBOLOS withdrew the cash bond without informing nor
remitting the amount to SMC. REBOLOS retained the
amount for one year and three months. He was dismissed.
ISSUE: Is the dismissal valid?
HELD: that there was, indeed, breach of trust and
confidence by REBOLOS. It was incumbent upon him to
have returned the amount of P7,000.00 upon withdrawal
knowing that it constituted company funds put up on his
behalf only because he was an employee and was driving a
company vehicle at the time of the accident. He was
accountable for those funds. Instead, he clung to the
amount for the long period of one year and three months
for reasons of his own. The fact that he returned the
amount to SMC upon demand does not exculpate nor
mitigate the delay. REBOLOS' act in withdrawing the cash
bond and retaining the same for one year and three months
and merging it with his family funds without justifiable
reason constitutes willful breach of the trust resposed on
him.
G. Fomenting distrust and discontent in the company
Reynolds Phils v. Eslava (137 SCRA 259)
FACTS: Three anonymous letters were received by W. W.
Dunkum, Jr., Reynolds' executive vice-president and
general manager, and the members of its board of
directors. The first letter called Dunkum a "big fool",

criticized his alleged unfairness in giving salary increases
and. The second letter was of the same tenor as the first.
The third letter informed Reynolds' president, chairman and
board of directors that the company was headed for
destruction because of the "mismanagement, inefficiency,
lack of planning and foresight, petty favoritism, dictatorial
policies, one-man rule, contemptuous attitude to labor, anti-
Filipino utterances and activities of Mr. Dunkum, etc." The
letter was written by the personnel manager of the
company. He was dismissed.
ISSUE: Is X guilty of willful breach of trust?
HELD: Yes. The company had reason to lose confidence in
X because of his misfeasance and malfeasance. His
misconduct amounts to breach of trust.
H. Pilferage
Philippine Airlines v. NLRC (279 SCRA 553)
FACTS: X and two other station loaders were ordered to
handle the loading of cargoes and pieces of baggage in
PAL Flight bound for Manila. The SG allegedly noticed
private respondent taking something from one of the loaded
baggage and wrapping the same in his PAL service polo
shirt. He allegedly threw something into a nearby canal
which, when later retrieved, turned out to be a lady's wallet.
X was dismissed.
ISSUE: Is the dismissal valid?
HELD: Yes. The act of taking a wallet of a passenger is
tantamount to breach of trust.
I. Theft of company property.
Firestone v. Lariosa (148 SCRA 187)
FACTS: X was about to leave the company premises
Lariosa submitted himself to a routine check by the security
guards at the west gate. He was frisked by Security Guard
while his personal bag was inspected sixteen [16] wool
flannel swabs, all belonging to the company, were found
inside his bag, tucked underneath his soiled clothes.
ISSUE: is the dismissal valid?
HELD: There is no gainsaying that theft committed by an
employee constitutes a valid reason for his dismissal by the
employer.
J. QUALIFIED THEFT
United South Dockhandlers v. NLRC (267 SCRA 401)
FACTS: X ordered his subordinates to load the lamp posts
into a cargo truck and had them delivered to Adelfa
Homeowners Association. X admitted he took the subject
lamp posts and manifested that it was unnecessary to
conduct an investigation. He returned the lamp posts upon
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 98
Atty. Paulino Ungos
USDI's demand. On May 25, 1993, he received his letter of
dismissal.
ISSUE Is X guilty of willful breach of trust?
HELD: YES. He occupied a position of trust and
confidence. Petitioner relied on him to protect the
properties of the company. X betrayed this trust when he
ordered the subject lamp posts to be delivered to the Adelfa
Homeowners' Association. The offense he commits
involves moral turpitude.
K. Violation by a bank cashier of Sec 38 of the Banking
Act regarding loans to bank officers and directors.
Monte de Piedad v. minister of labor (122 SCRA 444)
FACTS: It appears that Mendiola was maintaining a
personal savings account of P4,000 with the bank's Fugoso
Branch. On May 30, 1978 she deposited to her account a
check payable to herself amounting to P4,000 thereby
increasing her outstanding balance to P8,000. On June 1,
1978 she withdrew from her account the amount of P5,000
even before her check for P4,000 could be cleared. On
June 5, 1978 her check for P4,000 was dishonored, which
resulted in an overdrawing of P1,000. However, instead of
immediately debiting her savings account she looked for
the drawer who replaced the dishonored check on June 8,
1978.
ISSUE: guilty of willful breach?
HELD: Yes. Guilty of willful breach.
L. Concealment by bank manager of true balance of
customers account.
Dela Cruz v. NLRC (210 SCRA 680)
FACTS: X was the branch manager of Y bank. He picked
up a cash deposit of 200,000, he did not count the money,
alleging it was not practicable. Later, the teller discovered
that the money was short of 5,000. To conceal the
shortage, X directed to offset the amount to another client
of the bank.
ISSUE: is X guilty of willful breach of trust?
HELD: X is guilty of breach of trust.
M. Repeated and numerous infractions by a bank teller in
handling funds.
Allied bank v. NLRC (156 SCRA 789)
FACTS: X was employed as a teller off Y Bank. She was
found guilty of a. incurring a series of shortages; b.
incurring a long string of overages; c. violation of
procedures and d. failure to observe instructions of
superiors to report to the CBU.
ISSUE: Is the dismissal valid?

HELD: YES, the acts committed amounts to willful breach
of trust.
N. Misappropriation of Company Funds
San Miguel Corporation v. NLRC (128 SCRA 180)
FACTS: X, who was employed as budget clerk, received
form acting plant cashier the total amount of 278,805.43 for
him to remit. X failed to remit.
ISSUE: is the dismissal valid?
HELD: yes, breached of trust and confidence reposed in
him by his employer.
O. Repeated incurrence of cash shortage
Piedad v. Lanao Electric Cooperative
FACTS: X was a bill collector. It was discovered that Xs
collections were short, later he remitted the shortage to the
cashier.
ISSUE: Is the dismissal valid?
HELD: YES.
P. Engaging in an anomalous scheme to cover up past
due accounts.
Gonzales v. NLRC (355 SCRA 195)
FACTS: His dismissal stemmed from alleged irregularities
attributed to him as Route Manager and concurrently as
dealer of Pepsi Cola products. His dealership contract with
PCPPI started in 1990. Under the said contract, petitioner
was extended by PCPPI a credit line of P300,000.006
payable in thirty (30) days. On November 25, 1992,
petitioner as proprietor of RR Store purchased Pepsi Cola
products on credit amounting to P116,182.00. The credit
transaction was covered by Charge Invoice No. 365508. To
cover this transaction, petitioner Gonzales issued a post-
dated check in the amount of P116,182.00 payable on
December 25, 1992. Petitioner calculated that his
receivables from respondent PCPPI by way of "concession"
amounted to P109,766.00. In another vain effort to undo
the damage he had done, petitioner on December 31, 1992
issued a third post-dated check dated January 15, 1993,
now covered with the supposed post-dated check receipt
which, however, was signed by the petitioner himself and
not by the Sales Office Manager who has the sole authority
to issue the same.
ISSUE: Is X guilty of willful breach of trust?
HELD: YES. Private respondent PCPPI has sufficiently
shown that petitioner has become unworthy of the trust and
confidence demanded of his position. Petitioner betrayed
his employer's trust and confidence when he instigated the
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 99
Atty. Paulino Ungos
issuance by his subordinate salesman of an official receipt
for his post-dated check on December 22, 1992 whereby
he (petitioner) could have evaded payment to private
respondent PCPPI of his debt amounting to P116,182.00.
These acts committed by petitioner adversely reflected on
his integrity. As Route Manager he disregarded the private
respondent company's rules and regulation prohibiting the
issuance of official receipt for post-dated check payment
unless the same is done by the Sales Office Manager.
6. COMMISSION OF A CRIME
Commission of a crime is a ground for
dismissal if it is committed by an employee
against the person of the:
a. Employer;
b. Immediate member of his family, or
c. Authorized representative of the
employer
Prior conviction is not required- mere
commission of the crime is enough justify the
dismissal.
7. ANALOGOUS CAUSES
The offense must have an element similar to
those found in the specific just causes
enumerated under Art 282 of LC.
Analogous causes contemplate an act that is
due to voluntary or willful act of employee.
Illness is not analogous because it is neither
voluntary nor willful.
Conviction of a crime involving moral
turpitude is not analogous to commission of a
crime by the employee or to fraud and willful
breach of trust.
7.1 ILLUSTRATIVE EXAMPLE OF ANALOGOUS CAUSES
a. Gross inefficiency
Is closely related to gross
neglect
b. Inflicting or attempting to inflict bodily
injury on the job site on company time
c. Unreasonable behavior, quarrelsome,
bossy and difficult to deal with
Is closely related to just causes
enumerated in Art 282 of the
LC.
Cathedral School of Technology v. NLRC (214 SCRA
551)
FACTS: On January 29, 1988, private respondent formally
applied for and was appointed to the position of library aide
with a monthly salary of P1,171.00. It was at around this
time, however, that trouble developed. The sisters began
receiving complaints' from students and employees about
private respondent's difficult personality and sour
disposition at work.
Before the opening of classes, or more specifically on June
2, 1989, private respondent was summoned to the Office of
the Directress by herein petitioner Sister Apolinaria

Tambien, RVM, shortly after the resignation of the school's
Chief Librarian, Heraclea Nebria, on account of
irreconcilable differences with said respondent, for the
purpose of clarifying the matter. Petitioner also informed
private respondent of the negative reports received by her
office regarding the latter's frictional working relationship
with co-workers and students and reminded private
respondent about the proper attitude and behavior that
should be observed in the interest of peace and harmony in
the school library.
Private respondent resented the observations about her
actuations and was completely unreceptive to the advice
given by her superior. She reacted violently to petitioner's
remarks and angrily offered to resign, repeatedly saying,
"OK, I will resign. I will resign." Thereafter, without waiting
to be dismissed from the meeting, she stormed out of the
office in discourteous disregard and callous defiance of
authority.
ISSUE: Whether the dismissal is valid?
HELD: YES. Her unreasonable behavior and unpleasant
deportment is analogous to the other just causes
enumerated in ART 282 of the LC.
8. OTHER VALID CAUSES FOR DISMISSAL
a. Violation of company rules and
regulations;
b. Breach of union security arrangements;
c. Participation in an illegal strike;
d. Commission of illegal acts during a strike;
e. Defiance of return-to-work order in a
strike; and
f. Sexual harassment
8.1 Violation of company rules and regulations;
An employer has the right to promulgate rules and
regulations and punish employees violating the
same.
Despite the employees right to self organization,
the employers still retains his inherent right to
discipline his employees, his normal prerogative to
hire or dismiss them.
Whether or not dismissal is an appropriate penalty
for violation of company rules and regulations will
depend upon the surrounding facts and
circumstances of each case.
Factors such as gravity of the offense, position
occupied, and habitualness would have to be
considered.
In the case of Stanford Microsystems, Inc. v.
NLRC:
The imposable penalty is suspension for
not more than 30 days, but the SC
upheld appropriateness of the penalty of
dismissal by the employer because the
gravity of the offense.
The following violations of the company rules have
been held to constitute valid cause for dismissal:
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 100
Atty. Paulino Ungos
A. VIOLATION OF THE RULE AGAINST
SLEEPING WHILE ON DUTY
OSCO Workers fraternity labor union v. Ormoc
Sugar Co. (1 SCRA21)
FACTS:X was caught sleeping while on duty. He was
warned that repetition will result in his dismissal. on the
next month, X was again caught sleeping.
HELD: Dismissal is valid.
B. VIOLATION OF THE RULE PROHIBITING
DRINKING LIQUOR ON COMPANY TIME AND
COMPANY PREMISES AND ENGAGING IN AN
ADULTEROUS ACT OF SEXUAL
INTERCOURSE WITH A MARRIED FEMALE
SECURITY GUARD ON COMPANY TIME AND
IN COMPANY PREMISES.
Standard Microsystems v. NLRC (157 SCRA 410)
FACTS: X was employed as security coordinator. X
allowed two female SG to come inside the security
office and drinks with them. X also had sexual
intercourse with on of the female SG on the top of the
desk of the security head.
ISSUE: is the dismissal proper?
HELD: Yes. No employer may rationally be expected
to continue in employment a person whose lack of
morals, respect and loyalty to his employer.
C. VIOLATION OF SAFETY RULES.
Northern Motors v. NLU (102 SCRA 958)
FACTS: it is company policy that smoking is prohibited.
It has been proved and is not disputed that Alcantara
was an experienced painter and, having worked with
the petitioner for some time, he knew that smoking in a
painting booth is extremely hazardous.
ISSUE: Is the dismissal Valid?
HELD: YES. Such smoking has been shown to be
dangerous, because the painting booth contained
inflammable dusts and materials and there were
painters who could proceed to take up a spray gun and
paint without warning, thereby multiplying the danger
of conflagration from any flame. Indeed, the petitioner
insisted in the rule against smoking in the painting
booth to protect the very lives of its employees,
especially those in the painting booth.
D. VIOLATION OF RULES AGAINST
ABSENTEEISM.
Manila Electric Co. vs. NLRC (263 SCRA 531)
FACTS: After such administrative investigation was
conducted by petitioner, it concluded that private
respondent was found to have grossly neglected his duties
by not attending to his work as lineman from Aug. 2, 1989
to September 19, 1989 without notice to his superiors.
ISSUE: Valid dismissal?

HELD: Yes. An employee's habitual absenteeism without
leave, which violated company rules and regulations is
sufficient cause to justify termination from service.
E. VIOLATION OF AIRCRAFT PARKING
PROCEDURE
Philippine Airlines Inc., v. NLRC (194 SCRA 139)
FACTS: On or about 12:55 in the afternoon, the aircraft
was towed from the PAL technical center to Bay 16 area at
the NAIA. While the Boeing 747 was being towed, the
airplane collided with the bridge at Bay 16 causing damage
to the plane's left landing light and the left wing flop and
scratching its No. 2 engine. Consequently, on June 1,
1985, Pinuela was placed under preventive suspension and
was charged administratively. After investigation by the
PAL Administrative Board, he was dismissed from the
service effective July 1, 1985.
The Labor Tribunal opined that "Pinuela could not be
blamed for the accident as he relied on the signal of the
headsetman (Camina) who still signaled to him despite the
fact that the nose of the aircraft being towed was about to
overshoot the yellow line and the aircraft wing was about to
hit the airbridge."
ISSUE: valid dismissal?
HELD: YES. towing an aircraft is a group activity
necessitating group coordination. This is explicit in
petitioner's Engineering and Maintenance Manual which
states, "that the tug operator must undertake and/or
continue on towing/pushing procedure only when positive
visual contact with all guidemen is possible." The use of,
"all necessary guidemen" indicates plurality or group
coordination. Thus, instead of relying solely on the signals
of Camina, Pinuela should have also checked with the
other ground crew personnel.
F. VIOLATION OF THE RULE PROHIBITING
PILOTS FROM DRINKING LIQUOR PRIOR TO A
FLIGHT.
Philippine Airlines, Inc. v. NLRC (124 SCRA 538)
FACTS: The charge of petitioners against Gempis was
serious misconduct (abuse of authority) for forcing
First Officers A. Barcebal and J. Ranches to drink on
February 27, 1980, at 10:30 in the evening at the
coffee shop of the Triton Hotel at Cebu, six (6) bottles
of beer each, within thirty minutes. Unable to consume
the bottles of beer within the time limit set by private
respondent Salvador Gempis, the two pilots were
ordered to stand erect and were hit on the stomach by
private respondent. The petition alleged that the
incident occurred with the full knowledge of private
respondent that the two (2) affected co-pilots have
flight duties the next day with initial assignments as
early as 0710 H (7:10 a.m.) and as late as 1200H
(12:00 p.m.).
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 101
Atty. Paulino Ungos
HELD: Dismissal is valid. Needless to state, a pilot
must be sober all the time for he may be called upon to
fly a plane even before his regular scheduled hours,
otherwise so many lives will be in danger if he is drunk.
It would be unjust for an employer like herein petitioner
PAL to be compelled to continue with the employment
of a person whose continuance in the service is
obviously inimical to its interests.
G. VIOLATION OF THE RULE REQUIRING THAT
THE TICKET- BOOTH OF THE THEATER
SHOULD BE CLOSED AT ALL TIMES AS A
PRECAUTION AGAINST HOLD-UPS
Castillo v. CIR (39 SCRA 76)
FACTS: Mayfair theater has a standing instruction that
ticket booth should be closed all the time. X was
caught leaving the ticket booth open.
HELD: The dismissal is valid. X violated company
policy.
8.2 BREACH OF UNION SECURITY ARRANGEMENT.
The recognition of this ground is set forth in ART
248
a. Nothing in this Code or in any other law
shall stop the parties from requiring
membership in a recognized collective
bargaining agent as a condition for
employment, except those employees
who are already members of another
union at the time of the signing of the
collective bargaining agreement.
8.2.1 LIMITATIONS
A. Employees who are already members of another
union at the time of the signing of the CBA cannot
be dismissed for refusing to join the contracting
union.
B. Employees who refuse to join the contracting
union because of prohibition imposed by their
religion cannot likewise be dismissed.
C. If it was the contracting union itself who refused to
accept the employee as its member, the union
cannot validly ask for the dismissal of the
employee.
D. If the employee resigns from the contracting union
during freedom period, the union cannot validly
ask for the dismissal of the employee.
8.3 PARTICIPATION IN AN ILLEGAL STRIKE
Any union officer or worker who knowingly
participates in illegal strike may be declared to
have lost his employment

8.4 COMMISSION OF ILLEGAL ACTS DURING A
STRIKE
Any union officer or worker who knowingly
participates in the commission of illegal acts
during a strike may be declared to have lost his
employment
8.5 DEFIANCE OF RETURN-TO-WORK ORDER
If the strikers do not return to work, an illegal act is
committed.
8.6 SEXUAL HARASSMENT
Is committed by an employer, employee,
manager, supervisor, or agent of the employer
who, having authority, influence or moral
ascendancy over another, demands, requests or
otherwise requires any sexual favor from another,
regardless of whether the demand, request or
requirement is accepted.
Sexual harassment is committed:
a. The sexual favor is made as a condition
in the hiring or in the employment, re-
employment or continued employment of
said individual, or in granting said
individual favorable compensation, terms,
conditions, promotions, or privileges; or
the refusal to grant the sexual favor
results in limiting, segregating or
classifying the employee which in any
way would discriminate, deprive or
diminish employment opportunities or
otherwise adversely affect said
employee;
b. The above acts would impair the
employees rights or privileges under
existing labor laws; or
c. The above acts would result in an
intimidating, hostile, or offensive
environment for the employee.
The power emanates from the fact that the
superior can remove the subordinate from the
workplace if the latter would refuse his amorous
advances.
The act of an assistant manager in touching a
females subordinate hand, massaging her
shoulder and caressing her nape, was considered
as sexual harassment.
VILLARAMA VS. NLRC (236 SCRA 283)
FACTS: X, a Materials Manager invited Y and the other
female employees of the Materials Department to a dinner.
After taking them to dinner, Y thought that X would bring
her home, but instead brought her to a motel. Because of
this, Y resigned. The employer conducted an investigation
and required an explanation from X. for failure to submit, X
was terminated.
ISSUE: W/n the dismissal was valid and justified
HELD: YES. As a managerial employee, X is bound by a
more exacting work ethics. He failed to live up to this higher
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 102
Atty. Paulino Ungos
standard of responsibility when he succumbed to his moral
perversity. And when such moral perversity is perpetrated
against his subordinate, he provides a justifiable ground for
his dismissal for lack of trust and confidence.
ADDITIONAL CAUSES FOR TERMINATING SCHOOL
PERSONNEL
1. Gross inefficiency and incompetence in the
performance of his duties, such as, but not
necessarily limited to habitual and inexcusable
absences and tardiness from his classes, willful
abandonment of employment or assignment
2. Negligence in keeping school or student records,
or tampering with or falsification of the same
3. Conviction of a crime, or an attempt on or a
criminal act against the life of any school official,
personnel, or student, or upon the property or
interest of the school
4. Notoriously undesirable
5. Disgraceful or immoral conduct
6. Selling tickets or the collecting of any contributions
in any form or for any purpose or project
whatsoever, whether voluntary or otherwise, from
pupils, students and school personnel, except
membership fees of pupils and students in:
a. Red Cross
b. Girl Scouts of the Philippines
c. Boy Scouts of the Philippines
7. In the event of phasing out, closure or cessation of
the educational program or course or the school
itself
8. Other causes analogous to the foregoing as may
be provided by Secretary of Education, Technical
Education and Skills Development Authority
(TESDA), or in the school rules or in a collective
bargaining agreement
REPUBLIC ACT No. 7877
AN ACT DECLARING SEXUAL HARASSMENT
UNLAWFUL IN THE EMPLOYMENT, EDUCATION OR
TRAINING ENVIRONMENT, AND FOR OTHER
PURPOSES.
Be it enacted by the Senate and House of Representatives
of the Philippines in Congress assembled:
Section 1. Title. - This Act shall be known as the "Anti-
Sexual Harassment Act of 1995."
Section 2. Declaration of Policy. - The State shall value the
dignity of every individual, enhance the development of its
human resources, guarantee full respect for human rights,
and uphold the dignity of workers, employees, applicants
for employment, students or those undergoing training,
instruction or education. Towards this end, all forms of
sexual harassment in the employment, education or
training environment are hereby declared unlawful.
Section 3. Work, Education or Training -Related, Sexual
Harassment Defined. - Work, education or training-related
sexual harassment is committed by an employer,
employee, manager, supervisor, agent of the employer,
teacher, instructor, professor, coach, trainor, or any other
person who, having authority, influence or moral
ascendancy over another in a work or training or education

environment, demands, requests or otherwise requires any
sexual favor from the other, regardless of whether the
demand, request or requirement for submission is accepted
by the object of said Act.
(a) In a work-related or employment environment,
sexual harassment is committed when:
(1) The sexual favor is made as a
condition in the hiring or in the
employment, re-employment or
continued employment of said individual,
or in granting said individual favorable
compensation, terms of conditions,
promotions, or privileges; or the refusal to
grant the sexual favor results in limiting,
segregating or classifying the employee
which in any way would discriminate,
deprive ordiminish employment
opportunities or otherwise adversely
affect said employee;
(2) The above acts would impair the
employee's rights or privileges under
existing labor laws; or
(3) The above acts would result in an
intimidating, hostile, or offensive
environment for the employee.
(b) In an education or training environment, sexual
harassment is committed:
(1) Against one who is under the care,
custody or supervision of the offender;
(2) Against one whose education,
training, apprenticeship or tutorship is
entrusted to the offender;
(3) 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 consideration; or
(4) When the sexual advances result in
an intimidating, hostile or offensive
environment for the student, trainee or
apprentice.
Any person who directs or induces another to
commit any act of sexual harassment as herein
defined, or who cooperates in the commission
thereof by another without which it would not have
been committed, shall also be held liable under
this Act.
Section 4. Duty of the Employer or Head of Office in a
Work-related, Education or Training Environment. - It shall
be the duty of the employer or the head of the work-related,
educational or training environment or institution, to prevent
or deter the commission of acts of sexual harassment and
to provide the procedures for the resolution, settlement or
prosecution of acts of sexual harassment. Towards this
end, the employer or head of office shall:
(a) Promulgate appropriate rules and regulations
in consultation with and joint1y approved by the
employees or students or trainees, through their
duly designated representatives, prescribing the
procedure for the investigation of sexual
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 103
Atty. Paulino Ungos
harassment cases and the administrative
sanctions therefor.
Administrative sanctions shall not be a bar to
prosecution in the proper courts for unlawful acts
of sexual harassment.
The said rules and regulations issued pursuant to
this subsection (a) shall include, among others,
guidelines on proper decorum in the workplace
and educational or training institutions.
(b) Create a committee on decorum and
investigation of cases on sexual harassment. The
committee shall conduct meetings, as the case
may be, with officers and employees, teachers,
instructors, professors, coaches, trainors, and
students or trainees to increase understanding
and prevent incidents of sexual harassment. It
shall also conduct the investigation of alleged
cases constituting sexual harassment.
In the case of a work-related environment, the
committee shall be composed of at least one (1)
representative each from the management, the
union, if any, the employees from the supervisory
rank, and from the rank and file employees.
In the case of the educational or training
institution, the committee shall be composed of at
least one (1) representative from the
administration, the trainors, instructors, professors
or coaches and students or trainees, as the case
may be.
The employer or head of office, educational or
training institution shall disseminate or post a copy
of this Act for the information of all concerned.
Section 5. Liability of the Employer, Head of Office,
Educational or Training Institution. - The employer or head
of office, educational or training institution shall be solidarily
liable for damages arising from the acts of sexual
harassment committed in the employment, education
or training environment if the employer or head of office,
educational or training institution is informed of such acts
by the offended party and no immediate action is taken.
Section 6. Independent Action for Damages. - Nothing in
this Act shall preclude the victim of work, education or
training-related sexual harassment from instituting a
separate and independent action for damages and other
affirmative relief.
Section 7. Penalties. - Any person who violates the
provisions of this Act shall, upon conviction, be penalized
by imprisonment of not less than one (1) month nor more
than six (6) months, or a fine of not less than Ten thousand
pesos (P10,000) nor more than Twenty thousand pesos
(P20,000), or both such fine and imprisonment at the
discretion of the court.
Any action arising from the violation of the provisions of this
Act shall prescribe in three (3) years.
Section 8. Separability Clause. - If any portion or provision
of this Act is declared void or unconstitutional, the
remaining portions or provisions hereof shall not be
affected by such declaration.
Section 9. Repealing Clause. - All laws, decrees, orders,
rules and regulations, other issuances, or parts thereof

inconsistent with the provisions of this Act are hereby
repealed or modified accordingly.
Section 10. Effectivity Clause.- This Act shall take effect
fifteen (15) days after its complete publication in at least
two (2) national newspapers of general circulation.
Approved: February 14, 1995
(Sgd.) FIDEL V. RAMOS
President of the Philippines
Art. 283. Closure of establishment and reduction of
personnel. The employer may also terminate the
employment of any employee due to the installation of
labor-saving devices, redundancy, retrenchment to
prevent losses or the closing or cessation of operation
of the establishment or undertaking unless the closing
is for the purpose of circumventing the provisions of
this Title, by serving a written notice on the workers
and the Ministry of Labor and Employment at least one
(1) month before the intended date thereof. In case of
termination due to the installation of labor-saving
devices or redundancy, the worker affected thereby
shall be entitled to a separation pay equivalent to at
least his one (1) month pay or to at least one (1) month
pay for every year of service, whichever is higher. In
case of retrenchment to prevent losses and in cases of
closures or cessation of operations of establishment or
undertaking not due to serious business losses or
financial reverses, the separation pay shall be
equivalent to one (1) month pay or at least one-half
(1/2) month pay for every year of service, whichever is
higher. A fraction of at least six (6) months shall be
considered one (1) whole year.
ECONOMIC JUSTIFICATIONS FOR TERMINATING AN
EMPLOYMENT
1. Installation of labor saving devices
2. Redundancy
3. Retrenchment to prevent losses
4. Closing or cessation if operation of the
establishment
v Grounds for terminating an employment that are
not attributable to the fault of the employee
v Although the employee is not at fault, the law
nevertheless authorizes the termination of
employment in recognition of certain business
realities, particularly, the prerogative of every
business concern to institute appropriate
measures to ensure increased productivity,
economic viability and competitiveness
INSTALLATION OF LABOR SAVING DEVICE
v Right of the employer to effect more economy and
efficiency in its method of production
v Employers right to follow economic policies that
would insure profit to itself
o PURPOSE: To mechanize or modernize
its business even in the process, it
results in the dismissal of a number of
employees
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 104
Atty. Paulino Ungos
REDUNDANCY
v The services of an employee are in excess of
what is reasonably demanded by the actual
requirements of the enterprise
v A position is superfluous
o FACTORS:
o Overhiring of workers
o Decreased volume of business
o Dropping of a particular product line or
service activity previously manufactured
or undertaken by the enterprise
v Exercise of business judgment, the wisdom or
soundness of which is beyond the discretionary
view of the labor courts
v Does not necessarily refer to duplication of work
v Can exist even if there is no other person holding
the same position as that held by the employee
declared to be redundant
v REASON: An employer cannot be compelled to
give employment to a greater number of person
than the economic operations of his business
requires
REQUISITES OF A VALID REDUNDANCY PROGRAM
1. Good faith in abolishing the redundant positions
2. Faith and reasonable criteria in ascertaining what
positions are to be declared redundant and
accordingly abolished
3. Written notice served in both the employees and
the Department of Labor and Employment (DOLE)
at least one (1) month prior to the intended date of
termination
v The employers good faith in implementing a
redundancy program is not necessarily destroyed
by the engagement of an independent contractor
to replace the services of the terminated
employees
RETRENCHMENT
v Reduction of personnel due to actual or
anticipated losses, lack of work, or reduction in the
volume of business
v Retrenchment to prevent losses
o Art. 283, Labor Code
o An employer can adopt retrenchment
measures even before the anticipated
losses are actually sustained
o Resorted to by an employer primarily to
avoid or minimize business losses
o The lawmaker did not intend that the
losses shall have in fact materialized
before adopting retrenchment measures
v Potential losses that are speculative cannot justify
retrenchment
THE FOUR STANDARDS OF RETRENCHMENT
(Substantive Requirements of Retrenchment)
1. The expected losses should be substantial and
not merely de minimis in extent
 Arts. 226-286, Labor Code (Labor Relations) 105
Atty. Paulino Ungos

2. That substantial loss apprehended must be REQUISITES OF VALID CLOSURE

reasonably imminent, as such imminence can be 1. The closure of business must be bona fide in
perceived objectively and in good faith by the character
employer 2. A written notice must be served upon the
3. It must be reasonably necessary and likely to employees and the DOLE at least one month
effectively prevent the expected loss. It must be before the intended date of closure
resorted to as a means of last resort, after less 3. The employer must give separation pay to the
drastic means, have been tried and found wanting employees, if the closure was not due to serious
or insufficient business losses
4. The alleged losses already realized and the
expected imminent losses sought to be RELOCATION OF PLANT
forestalled, must be proven by sufficient and v Relocation of plant may amount to closure
convincing evidence
PROCEDURAL REQUIREMENT
REQUISITES OF VALID RETRENCHMENT v The employer should serve a written notice at
1. That the retrenchment is reasonably necessary least once (1) month in advance to the:
and likely to prevent losses which, if already 1. Affected employees
incurred, are not merely de minimis but 2. Department of Labor and
substantial, serious, actual and real, or if only Employment
expected, are reasonably imminent as perceived v Must be served personally upon the employee
objectively and in good faith by the employer concerned
2. That the employer exercises its prerogative to v The mere posting of the notice of termination of
retrench employees in good faith for the employment on the employees bulletin board
advancement of its interest and not to defeat or does not substantially comply with the statutory
circumvent the employees right to security of requirement
tenure v One month = thirty (30) days
3. That the employer used fair and reasonable v FAILURE TO COMPLY Subject the employer to
criteria in ascertaining who would be dismissed sanction in the nature of indemnification or
and who would be retained among the employees, penalty, the amount of which will depend on the
such as: facts of each case and the gravity of the omission
a. Less preferred status, i.e., whether they committed by the employer
are temporary, casual, regular, or
managerial employees PURPOSE OF NOTICE
b. Efficiency v To obviate abrupt and arbitrary dismissal and to
c. Seniority enable the employee to survive while he is looking
d. Physical fitness for another job
e. Age v EMPLOYEE to give him some to prepare for the
f. Financial hardship for certain workers eventual loss of his job
4. That the employer served written notice both to v DOLE opportunity to ascertain the veracity of the
the employee and the Department of Labor and alleged cause for termination
Employment at least one month prior to the
intended date of retrenchment AMOUNT OF SEPARATION PAY
5. That the employer pays the retrenched employees v At least one (1) month pay or the following
separation pay amount, whichever is higher
1. ONE (1) MONTH PAY FOR EVERY
v Must be proved by clear and convincing evidence YEAR OF SERVICE
a. Installation of labor-saving
CLOSURE OF ESTABLISHMENT device
v Permanent closure b. Redundancy
v Temporary closure legal effect is governed by 2. ONE-HALF () MONTH PAY FOR
Art. 286 of the Labor Code EVERY YEAR OF SERVICE
v The right to close the entire establishment carries a. Retrenchment to prevent
with it the right to close a part thereof, hence, losses
closure may be TOTAL or PARTIAL b. Closure of establishment
v Can be exercised even if the employer is not NOT due to serious
suffering from serious business losses or financial business losses
reverses v NO SEPARATION PAY Closure of
v Must be done in good faith or with no intent to establishment due to losses
lockout its employees as a means to coercing
them to its demands

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano

Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos

PHILOSPHY BEHIND THE GRANT OF SEPARATION
PAY
v To enable the employee to have something on
which to fall back when he loses his job
COMPUTATION OF SEPARATION PAY
v The latest salary shall be used
o EXCEPTION latest salary was reduced
by the employer to defeat the intention of
the Labor Code
o Salary rate before deduction shall be
used
v SEASONAL EMPLOYEES one-half of their
respective average monthly pay during the last
season multiplied by the number of years they
actually rendered service
o SEPARATION PAY = of average
monthly pay last season X number of
years they actually rendered service
o Worked at least 6 months
Art. 284. Disease as ground for termination. An
employer may terminate the services of an employee
who has been found to be suffering from any disease
and whose continued employment is prohibited by law
or is prejudicial to his health as well as to the health of
his co-employees: Provided, That he is paid separation
pay equivalent to at least one (1) month salary or to
one-half (1/2) month salary for every year of service,
whichever is greater, a fraction of at least six (6)
months being considered as one (1) whole year.
CONDITIONS FOR TERMINATING AN EMPLOYMENT
DUE TO ILLNESS
1. That the continued employment of the sick
employee is prohibited by law or is prejudicial to
his health or to the health of his co-employees
2. That there is a certification from a competent
PUBLIC health authority that the disease is of
such nature or at such stage that it cannot be
cured within a period of six (6) months even with
proper medical unit
v The mere fact that an employee is suffering from a
disease does not ipso facto make him a sure
candidate for dismissal
v The required medical certificate cannot be
dispensed with
Art. 285. Termination by employee. (a) An employee
may terminate without just cause the employee-
employer relationship by serving a written notice on
the employer at least one (1) month in advance. The
employer upon whom no such notice was served may
hold the employee liable for damages.
(b) An employee may put an end to the relationship
without serving any notice on the employer for any of
the following just causes:
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 106
Atty. Paulino Ungos
1. Serious insult by the employer or his
representative on the honor and person of the
employee;
2. Inhuman and unbearable treatment accorded
the employee by the employer or his
representative;
3. Commission of a crime or offense by the
employer or his representative against the
person of the employee or any of the
immediate members of his family; and
4. Other causes analogous to any of the
foregoing.
TERMINATION OF EMPLOYMENT BY THE EMPLOYEE
1. Voluntary resignation
2. Constructive resignation (abandonment of
employment)
3. Involuntary resignation (constructive dismissal)
VOLUNTARY RESIGNATION
v Formal renouncement or relinquishment of an
office
v Voluntary act of severing an employment relation
at the initiative of the employee who finds himself
in a situation where he believes that personal
reasons cannot be sacrificed in favor of the
exigency of service that he has no other choice
but to dissociate himself from his employment
v Must be unconditional and WITH INTENT to
operate as such
v There must be an INTENTION TO RELINQUISH a
portion of the terms of the office accompanied by
an act of relinquishment
v Can be inferred from the wordings of the letter or
memorandum
v Inferred from the actuations of the employee
PHILIPPINES TODAY V. NLRC (267 SCRA 202, 215)
v Incendiary words and sarcastic remarks negate
alleged desire to improve relations
v Allegres choice of words and the way of
expression betray his allegation that the
memorandum was simply an opportunity to open
the eyes of Belmonte to the work environment in
petitioners newspaper with the end of persuading
her to take a hand at improving said environment.
Apprising his employer (or top-level) management
of his frustrations in his job is certainly not done in
an abrasive, offensive and disrespectful manner.
A cordial or, at the very least, civil attitude,
according due deference to ones superiors, is still
observed, especially among high-ranking
management officers. Here, respondent Alegre
was anything but respectful and polite. His
memorandum is too affrontive, combative and
confrontational. It certainly causes resentment,
even when read by an objective reader.

JOHN CLEMENTS CONSULTANTS, INC. V. NLRC (157
SCRA 635)
FACTS: X sent a telex message to the President of the
company advising of his desire to discuss terms of his
separation from employment even by telex. Thereafter, X
and the President met whereupon X reiterated his desire to
resign. The President, however, advised him to first take a
2-week leave to meditate on his future with the company.
When his leave ended, X again met with the President and
for the third time expressed his wish to resign irrevocably.
His resignation was then accepted, and he was told that a
written communication was expected and should state that
it would be effective immediately, conformably with the
usual practice. Unaccountably, X did not submit any
resignation letter. Thus, the President issued a
memorandum announcing the resignation of X. Three
months later, X filed a complaint for illegal dismissal.
ISSUE: W/n X was dismissed from his employment
HELD: NO. He resigned voluntarily, his offer to resign
being unconditional and irrevocable.
RESIGNATION BECAUSE OF THREAT TO FILE
CRIMINAL ACTION
v The voluntariness of resignation is not negated by
the fact that the resignation was brought about by
the threat of the employer to file criminal action for
estafa against the employee who has
misappropriated company funds.
v A threat to enforce ones claim through competent
authority, if the claim is just or legal, does not
vitiate consent.
CALLANTA V. NLRC (225 SCRA 526)
FACTS: During a spot audit, VC was found to have
incurred a tentative shortage. When he was showed the
spot audit report, VC was handed a readymade resignation
letter and he was made to sign the same, otherwise an
estafa case will be filed against him. On the basis of this
threat, he tendered his resignation. He filed a complaint for
illegal dismissal seven (7) months after.
ISSUE: W/N the resignation of VC was voluntary
HELD: YES. There is no showing that his resignation was
obtained by means of coercion and intimidation. The threat
of his employer to file an estafa case against him does not
constitute intimidation because such threat is not an unjust
act, but rather a valid and legal act to enforce a claim.
RESIGNATION AS ALTERNATIVE TO DISMISSAL
v The voluntariness of resignation is not negated by
the fact that the employer persuades an employee
to resign instead of being dismissed for cause
v If a result of reorganization, the employee is given
the option to resign or be terminated with
separation pay, and the employee chooses to
resign, the resignation is still voluntary
SAMANIEGO V. NLRC (198 SCRA 111)
FACTS: Because of serious financial crisis, the
management resolved to reorganize by streamlining its
operations and eliminating middle management positions.
The management gave the affected employees the
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 107
Atty. Paulino Ungos
following option: (a) termination of employment with
separation pay or (b) voluntary resignation with terms more
financially advantageous than the first option. X chose the
second option and signed the company-prepared
resignation letters. Accordingly, he was paid the benefits
under the second option. Later on, X changed his mind
saying that he received the benefits under protest, and
thereafter filed a complaint for illegal dismissal.
ISSUE: W/N the resignation of X was voluntary
HELD: YES. Notwithstanding the intended reorganization
of the company, the affected employees were given the
option to resign from the company with corresponding
benefits attending such option. X and the other affected
employees opted for resignation on account of these
negotiated benefits. In termination cases, the employee is
not afforded any option; the employee is dismissed and his
only recourse is to institute a complaint for illegal dismissal
against his employer, assuming that there are valid
grounds for doing so. In this particular case, X and the
other affected employees were given the option to resign. It
was the option they chose. Thus, there is no illegal
dismissal to speak of.
SICANGCO V. NLRC (235 SCRA 96)
FACTS: The Company informed RS that his position will be
declared redundant. He was assured of benefits due him
under the law. He did not protest. In fact, he negotiated for,
and was able to get, higher separation benefits. In
accordance with his agreement with the company and
before the declared redundancy of his position took effect,
RS tendered his resignation. Accordingly, the company
paid him separation benefits. Thereafter, he filed a
complaint for illegal dismissal.
ISSUE: W/N the resignation of RS was voluntary
HELD: YES. He resigned from his employment after he
was informed that his position has become redundant.
There is no indication that he was coerced into resigning
from the company. There is nothing illegal with the practice
of allowing an employee to resign instead of being
separated for just cause, so as not to smear his
employment.
ONE MONTH NOTICE
v An employee who intends to voluntarily resign
from his employment should give his employer a
written notice (resignation letter) at least one (1)
month in advance
v WITHOUT 1-MONTH NOTICE employer can
hold him liable for damages
v The employer cannot compel him to render
service during the period as it amounts to
involuntary servitude.
PURPOSE OF THE ONE-MONTH NOTICE
v To enable the employer to look for a replacement
and therefore, prevent a disruption of work
WAIVER OF THE ONE-MONTH RULE
v The one-month notice may be waived by the
employer

v The rule requiring an employee to stay or
complete the 30-day period prior to the effectivity
of his resignation is discretionary on the part of the
employer
PHIMCO INDUSTRIES V. NLRC (273 SCRA 286)
FACTS: On August 14, 1991, RC tendered his letter of
resignation to take effect on August 30, 1991. During the
15-day period, he continued to report for work. In the
meantime, no action was taken by the company with
respect to his letter of resignation. After the lapse of the 15-
day period, the Human Resources Manager directed RC,
who was already in the US, to explain why he did not
observe the 30-day notice requirement. Thereafter, the
company terminated his services for failure to observe the
30-day notice. It also forfeited his separation benefits.
ISSUE: W/N RC is entitled to separation benefits
HELD: YES. While RC failed to comply with company rules
and regulations regarding resignation, he did not outrightly
disregard the same. Before the expiration of the 15-day
period, he still reported for work. Significantly, the fact that
his letter of resignation was acted only after he had left for
the US opens avenues for speculations and suspicions.
While he continued to work to await the acceptance of his
resignation, he was not even informed of the status thereof
or that he had to stay for fifteen (15) days more. Evidently,
there was bad faith in the manner his resignation was
resolved. The rule of requiring an employee to stay or
complete the 30-day period prior to the effectivity of his
resignation becomes discretionary on the part of
management as an employee who intends to resign may
be allowed a shorter period before his resignation becomes
effective. In the instant case, the non-compliance with the
period should not be used by management as a subterfuge
to avoid the payment of separation (resignation) benefits
due the employee.
EFFECT OF ACCEPTANCE OF RESIGNATION
v Resignation may not be withdrawn without the
consent of the employer.
v The moment an employee resigns and his
resignation is accepted, he no longer has any right
to the job
v IF EMPLOYEE CHANGES HIS MIND he must
ask for approval of the withdrawal of his
resignation from his employer
o EMPLOYER ACCEPTS employee
retains his job
o EMPLOYER DOES NOT ACCEPT
employee cannot claim illegal dismissal
REASON: Employer has the
right to determine who his
employees will be
v This is in recognition of the contractual nature of
employment which requires mutuality of consent
between the parties. An employment contract is
CONSENSUAL and VOLUNTARY
v A resigned employee who desires to take his job
back has to re-apply therefor, and he shall have
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 108
Atty. Paulino Ungos
the status of a stranger who cannot unilaterally
demand an appointment.
ENTITLEMENT TO SEPARATION PAY
v GENERAL RULE: An employee who voluntarily
resigns from his employment is not entitled to
separation
v EXCEPTION:
1. Stipulation in the employment
contract
2. Collective bargaining agreement
3. Sanctioned by established employer
practice or policy
CONSTRUCTIVE RESIGNATION (Abandonment of
Employment)
v Deliberate, unjustified refusal of an employee to
resume his work
v Voluntary act of the employee akin to voluntary
recognition
v Employee just quits his employment without notice
v When an employee his employment, there is
constructive resignation
2.7 Entitlement to Separation Pay
General Rule: An employee who voluntarily resigns from
his employment is not entitled to separation pay.
Exception:
- When stipulated in the employment contract
- When stipulated in the CBA
- If sanctioned by established employer practice or
policy.
3. Constructive Resignation (Abandonment of
Employment)
Abandonment of Employmentis the deliberate, unjustified
refusal of an employee to resume his work. When an
employee abandons his employment, there is constructive
resignation. The difference between abandonment of
employment and voluntary resignation is that the employee
quits his employment without notice.
3.1 Elements of Abandonment of Employment
a.) Absence without notice, permission or justifiable reason
b.) Intent to sever the employer-employee relationship.
Mere absence does not by itself indicate abandonment of
employment. There must be overt acts unerringly pointing
to the fact that the employee does not want to work
anymore.
Intent can be inferred from the following:
a.) Failure of the employee to comply with notices or
directives for him to report for work;
b.) Failure to report for work within a reasonable time after
expiration of leave of absence without pay;
c.) Failure to report for work despite disapproval of
application for indefinite leave of absence;
d.) Prolonged absences without justifiable reason

General Rule: Intent to abandon is negated by the
immediate filing of a complaint for illegal dismissal.
Exception: When the complaint for illegal dismissal does
not pray for reinstatement, but only for separation pay.
3.2 Abandonment and Absence Without Leave (AWOL)
Abandonment AWOL
- There is no - There is intent to
intention to return return to work.
to work.
The issue of whether or not an employee abandoned his
employment is a question of fact. The burden is on the
employer to show clear and deliberate intent on the part of
the employee to discontinue employment without intention
of returning.
An employee can still be sanctioned for absence without
leave, in the event abandonment is not proven.
4. Involuntary Resignation (Constructive Dismissal)
Involuntary resignationis a situation where an employee is
constrained to quit his job because continued employment
is rendered impossible, unreasonable or unlikely; when
there is a demotion in rank, diminution in pay or when a
clear discrimination, insensibility or disdain by an employer
becomes unbearable to the employee.
Grounds Under Art 285(b)
a.) Serious insult by the employer or his representative on
the honor and person of the employee;
b.) Inhuman and unbearable treatment accorded the
employee by the employer or his representative;
c.) Commission of a crime or offense by the employer or his
representative against the person of the employee or any of
the immediate members of his family; and
d.) Other causes analogous to any of the foregoing.
4.1 Serious Insult Upon the Honor and Person of the
Employee
Where an employee who quits his employment after being
demoted without just cause.
CASES
Jarcia Machine Shop vs. NLRC
266 SCRA 97
AT was employed at JMS for 16 years. On January 11,
1993 he absented himself from work to take care of his
children. When he returned the next day, he was informed
that he was under suspension and the employer forthwith
insulted him. AT tried several times to return to work, but he
was met with the same circumstances. AT was constrained
to quit his employment.
Issue: W/N AT was constructively dismissed?
Held: YES. AT was constructively dismissed because he
was forced to quit his employment as a result of his
demotion without just cause.
Gaco vs. NLRC
230 SCRA 260
X was employed as Production Recorder in Orient Leaf
Tobacco Corporation. She held this position for 14 years.
Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano
Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos
Arts. 226-286, Labor Code (Labor Relations) 109
Atty. Paulino Ungos
Then on April 1990 she returned for her working season but
found another employee occupied her position. She had
been demoted to the position of Picker.
Issue: W/N X was constructively dismissed?
Held: YES. Demotion without justifiable cause is
tantamount to constructive dismissal.
4.2 Inhuman and Unbearable Treatment
Where an employee quits his employment because of a
legitimate desire for self-preservation.
CASE
Singa Ship Management Phils.vs. NLRC
288 SCRA 692
MS worked on the vessel Crown Odyssey, which had
Greek and Filipino crewmembers. There were hostilities
between the Greeks and Filipinos on board. The Greek
deck steward, constraining him to leave his employment,
subjected MS to several intimidation and scuffles.
Issue: W/N there was illegal dismissal?
Held: YES. MS quit his employment because he feared for
his life and his fear was well-founded.
4.3 Commission of a Crime
Where the employer or his representative commits rape,
physical injuries, mutilation, abortion, infanticide, homicide,
murder, parricide, etc. against the employee or the
immediate members of his family.
4.4 One-Month Notice Not Required
The employee can leave his employment immediately.
4.5 Relief for Constructive Dismissal
The appropriate relief is separation pay plus indemnities in
the form of nominal damages or back wages.
Reinstatement is not a proper relief because of strained
relations between the parties.
ART.286.When Employment Not Deemed Terminated.
The bona fide suspension of the operation of a
business or undertaking for a period not exceeding six
(6) months, or the fulfillment by the employee of a
military or civic duty shall not terminate employment.
In all such cases, the employer shall reinstate
the employee to his former position without loss of
seniority rights if he indicates his desire to resume his
work not later than one (1) month from the resumption
of operations of his employer or from his relief from
the military or civic duty.
COMMENT
1. Suspension of Business Operations
The standard by which to judge the validity of the exercise
of the prerogative to lay-off or suspend business operations
is good faith. If done in bad faith, the employment
relationship is deemed uninterrupted. The affected
employees are entitled to their wages during the lay-off.
Some grounds for lay-off
a.) Lack of work
b.) Lack of materials
 Arts. 226-286, Labor Code (Labor Relations) 110
Atty. Paulino Ungos

c.) Reduction in volume of business

d.) Losses in business operations
e.) Repair and cleaning of machinery
f.) Year-end inventory

If the lay-off exceeds 6 months, constructive dismissal

ensues. The employees would be entitled to separation
pay, except when there are serious business losses.

1.1 Temporary Off-Detail/Floating Status

Temporary Off-Detailin security parlance means waiting to
be posted. The inactivity should not exceed six months, or
the security agency is liable for constructive dismissal.

CASES
Agro Commercial Security vs. NLRC
175 SCRA 790
Agro is a service corporation which provided security and
janitorial services. Subsequently, Agros contracts with
clients were terminated because of sequestration by the
PCGG. The employees were put under floating status.
Issue: W/N being under floating status amounts to
constructive dismissal?
Held: NO. Being put under floating status does not per se
amount to dismissal. But if it continues beyond 6 months,
then it can be considered as such.

Valdez vs. NLRC

286 SCRA 87
NELBUSCO hired V as driver. Subsequently the bus driven
by V suffered from faulty air-conditioning. V was told to wait
as the air-conditioning of the bus was repaired. Several
months later, V discovered that the bus he was previously
driving was assigned a new route as an ordinary bus under
a new driver.
Issue: W/N there was constructive dismissal?
Held: YES. The floating status of V lasted beyond six
months, hence he can be considered dismissed from
service.
2. Fulfillment of Military or Civic Duty
The workers employment is deemed suspended even if the
service rendered to military or civic duties exceed six
months.
Requisites:
a.) The employee must signify his desire to resume work
not later than 1 month from his relief from said military or
civic duty.

The payment of wages and benefits shall be subject to

special laws, decrees and to applicable individual or
collective bargaining agreement and voluntary employer
practice or policy.

Addie Celerian * Amor Venenoso * Draei Dumalanta * Ellan Cipriano

Ingrid Prado * Mary Ang * Rica Casiquin * Sam Santos