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2019 Labor Law Last Minute Tips (Jurisprudence)

LABOR STANDARDS

(1) Constitutional due process under the Bill of Rights cannot be invoked against the employer. In the absence of governmental interference,
the liberties guaranteed by the Constitution cannot be invoked against acts of private individuals, such as a private employer. (Yrasuegui v.
PAL, Oct. 17, 2008) Page | 1
(2) When government-owned and -controlled corporations covered by the Labor Code. The civil service embraces only those government-
owned or -controlled corporations with original charter. Hence, those without original charter are covered by the Labor Code. (Salenga v.
Court of Appeals, Feb. 1, 2012)

(3) Quantum of proof required in labor cases is substantial evidence. Substantial evidence means that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion. (PNB v. Gregorio, Sept. 18, 2017) Where both parties failed prove their
allegations by substantial evidence, the evidence is in equipoise. In such case, the scales of justice are tilted in favor of labor. (Hubilla v. HSY
Marketing, Jan. 10, 2018)

(4) Rules on foreign law as governing an overseas employment contract. The general rule is that Philippine laws apply even to overseas
employment contracts, pursuant to constitutional provision that the State shall afford full protection to labor, whether local or overseas. As an
exception, the parties may agree that a foreign law shall govern the employment contract, subject to the following requisites:
(i) That it is expressly stipulated in the overseas employment contract that a specific foreign law shall govern. If this is absent or no
foreign law was expressly stipulated in the contract executed in the Philippines, Philippine laws apply consistent with the principle of lex
loci contractus.
(ii) That the foreign law invoked must be proven before the courts pursuant to the Philippine rules on evidence. If this is absent,
Philippine laws apply pursuant to the doctrine of processual presumption, holding that where a foreign law is not pleaded, or even if
pleaded, is not proved, the presumption is that foreign law is the same as domestic law.
(iii)That the foreign law stipulated in the overseas employment contract must not be contrary to law, morals, good customs, public
order and public policy. If this is absent, Philippine laws apply, pursuant to Article 17 of the New Civil Code, which provides that laws
which have for their object, public order, public policy and good customs shall not be rendered ineffective by laws of a foreign country
and by Article 1306 of same Code which provides that parties may stipulate terms provided these are not contrary to law, morals, good
customs, public order, or public policy.
(iv) That the overseas employment contract must be processed through the POEA. If this is absent, Article 18 of the Labor Code is
violated, which provides that no employer may hire a Filipino worker for overseas employment except through boards and entities
authorized by the DOLE Secretary. Said contract cannot therefore be invoked as it is an unexamined foreign law. (Industrial Personnel &
Management Services v. De Vera, Mar. 7, 2016)

(5) Seafarer is a contractual employee, not a regular employee. His employment is contractually fixed for a certain period of time and is
governed by the contract he signs every time he is hired. (Panganiban v. Tara Trading, Oct. 18, 2010)

(6) Phrase “or for three (3) months for every year of the unexpired term, whichever is less” under Section 10, R.A. No. 8042 pertaining
to the amount to which an OFW is entitled when his overseas employment is terminated without just, valid, or authorized cause is
unconstitutional. It violates the equal protection clause of the Constitution, as it introduces a differentiated rule of computation of the money
claims of illegally dismissed OFWs based on their employment periods, in the process singling out one category whose contracts have an
unexpired portion of one year or more and subjecting them to the peculiar disadvantage of having their monetary awards limited to their
salaries for 3 months or for the unexpired portion thereof, whichever is less, but all the while sparing the other category from such prejudice,
simply because the latter's unexpired contracts fall short of one year. Also, in the computation of the monetary benefits of fixed-term employees
who are illegally discharged, it imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts,
but none on the claims of other OFWs or local workers with fixed-term employment. (Serrano v. Gallant Maritime, Mar. 24, 2009)

Reenactment of the foregoing clause in R.A. No. 10022 passed in 2010 does not cure the unconstitutionality. A statute or provision which
was declared unconstitutional is not a law. The nullity cannot be cured by reincorporation or reenactment of the same or a similar law or
provision. A law or provision of law that was already declared unconstitutional remains as such unless circumstances have so changed as to
warrant a reverse conclusion.
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Reliefs entitled to an illegally dismissed OFW. He is entitled to (i) all salaries for the unexpired portion of the contract; and (ii) full
reimbursement of placement fees and deductions made with interest at 12% per annum. (Sameer Overseas v. Cabiles, Aug. 5, 2014)

(7) Solidary liability of corporate officers with the recruitment agency is not automatic, despite Section 10, R.A. No. 8042, as amended,
stating that if the recruitment agency is a juridical being, the responsible corporate officers and directors shall be solidarily liable
with the corporation. To make them solidarily liable with their company, there must be a finding that they were remiss in directing the affairs
of that company, such as sponsoring or tolerating the conduct of illegal activities. (Gagui v. Dejero, Oct. 23, 2013) Page | 2
Solidary liability of domestic employment agent and the principal foreign employer continues during the entire period or duration of
the employment contract, and would not be affected by any substitution, amendment or modification of the contract made either
locally or in a foreign country. This is based on Section 10(2) of R.A. No. 8042, as amended. If either or both of the parties decide to end
the agreement, the responsibilities of such parties towards the contracted employees under the agreement do not at all end, but the same
extends up to and until the expiration of the employment contracts of the employees recruited and employed pursuant to the said recruitment
agreement. (Pentagon International v. Court of Appeals, July 1, 2015)

Local recruitment agency is exempt from any liability arising from the extension of employment abroad, without the knowledge of
such agency, after the expiration of the original contract period, pursuant to the theory of imputed knowledge. This theory ascribes
knowledge of the domestic employment agent to the principal foreign employer, not the other way around. The knowledge of the principal-
foreign employer cannot be imputed to its domestic employment agent. (Sunace International Management v. NLRC, Jan. 25, 2006)

When the license of recruitment agency to recruit land-based overseas Filipino workers, was cancelled for violation of recruitment
laws, its officers and directors are automatically prohibited from engaging in recruiting and placement of land-based overseas Filipino
workers, under POEA Rules and Regulations. The Philippine Overseas Employment Administration (POEA) or the Department of Labor
and Employment (DOLE) order cancelling the license does not even need to state that such officers and directors are disqualified from said
recruitment and placement. (Republic v. Humanlink, Apr. 22, 2015)

(8) Perfection of employment vis-a-vis commencement of employee-employer relation in relation to the POEA Standard Employment
Contract (POEA-SEC). The perfection of the contract, which coincides with the date of execution of the POEA-SEC, occurs when seafarer
and employer agreed on the object and the cause, as well as the rest of the terms and conditions therein. The commencement of the employer-
employee relationship takes places when the seafarer is actually deployed from the point of hire. Whether there is breach of the POEA-SEC
or during the commencement of employer-employee relationship, jurisdiction over claims arising thereunder are cognizable by the Labor
Arbiter pursuant to Section 10, R.A. No. 8042, as amended: “claims arising out of an employer-employee relationship or by virtue of any law
or contract involving Filipino workers for overseas deployment.” (Stolt-Nielsen v. Medequillo, Jan. 18, 2012)

Foregoing rule on the jurisdiction of the Labor Arbiter does not apply if the seafarer and his employer have a Collective Bargaining
Agreement (CBA) stating that any dispute arising in the employment agreement shall be submitted to voluntary arbitration. The CBA
prevails over Section 10, R.A. No. 8042, as amended. The jurisdiction of the voluntary arbitrator is preferred, not only because of the CBA
on the matter but also in recognition of the State’s express preference for voluntary modes of dispute settlement. (Ace Navigation v. Fernandez,
Oct. 10, 2012)

(9) Requisites before injury or illness of a seafarer to be compensable. The requisites are: (i) the injury or illness must be work-related; and
(ii) the work-related injury or illness must have existed during the term of the seafarer’s employment contract. Under the POEA-SEC, an
illness suffered by a seafarer during the term of his contract is disputably presumed to be work-related and compensable. (Dohle-Pidlman
Manning v. Heirs of Gazzingan, June 17, 2015) Notwithstanding the presumption, on due process grounds, the claimant seafarer must still
prove by substantial evidence that his work conditions caused or at least increased the risk of contracting the disease, because compensation
awards cannot rest entirely on bare assertions and presumptions. (Magat v. Interorient, Apr. 4, 2018)

Determination on whether the seafarer suffers from any disability under the POEA-SEC. The seafarer must submit himself to the
company-designated physician within three days from repatriation. If he dispute the assessment, he can exercise his prerogative to seek second
opinion and consult a doctor of his choice. In case of disagreement between the findings of the company-designated physician and seafarer’s
doctor of choice, the employer and seaman may agree jointly to refer the latter to a third doctor whose decision shall be final and binding on
them. (Loadstar International v. Yamson, Apr. 23, 2018) If the seafarer did not demand for the re-examination by a third doctor, after the
findings of company-designated physician and seafarer’s doctor of choice conflict, the finding of the company designated physician is
considered final and binding. (Dohle Philman v. Doble, Oct. 4, 2017) Finally, failure of the seafarer to submit within three days from
repatriation results in the forfeiture of his right to claim disability benefits, except: (i) seafarer is incapacitated to report to the employer upon
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repatriation; and (ii) employer inadvertently or deliberately refused to submit the seafarer to a post-employment medical examination by a
company-designated physician. De Andres v. Diamond H Marine Services, July 12, 2017)

Guidelines on the 120/240-day period in seafarer disability claims. The guidelines are:
(a) The company-designated physician must issue a final medical assessment on the seafarer’s disability grading within a period of 120 days
from the time the seafarer reported to him;
(b) If the company-designated physician fails to give his assessment within the period of 120 days, without any justifiable reason, then the Page | 3
seafarer’s disability becomes permanent and total;
(c) If the company-designated physician fails to give his assessment within the period of 120 days with a sufficient justification, e.g. seafarer
required further medical treatment or was uncooperative, then the period of diagnosis and treatment shall be extended to 240 days. The
employer has burden to prove that the company-designated physician has sufficient justification to extend the period; and
(d) If the company-designated physician still fails to give his assessment within the extended period of 240 days, then the seafarer’s disability
becomes permanent and total, regardless of any justification. (Jebsens Maritime v. Rapiz, Jan. 11, 2017)

When the seafarer has the right to pursue an action for total and permanent disability benefits.
(a) The company-designated physician failed to issue a declaration as to his fitness to engage in sea duty or disability even after the lapse of
the 120-day period and there is no indication that further medical treatment would address his temporary total disability, hence, justify
an extension of the period to 240 days;
(b) 240 days had lapsed without any certification being issued by the company-designated physician;
(c) The company-designated physician declared that he is fit for sea duty within the 120-day or 240-day period, as the case may be, but his
physician of choice and the third doctor chosen are of a contrary opinion;
(d) The company-designated physician acknowledged that he is partially permanently disabled but other doctors who he consulted, on his
own and jointly with his employer, believed that his disability is not only permanent but total as well;
(e) The company-designated physician recognized that he is totally and permanently disabled but there is a dispute on the disability grading;
(f) The company-designated physician determined that his medical condition is not compensable or work-related under the POEA-SEC but
his doctor-of-choice and the third doctor found otherwise and declared him unfit to work;
(g) The company-designated physician declared him totally and permanently disabled but the employer refuses to pay him the corresponding
benefits; and
(h) The company-designated physician declared him partially and permanently disabled within the 120-day or 240-day period but he remains
incapacitated to perform his usual sea duties after the lapse of the said periods. (C.F. Sharp Crew Management v. Taok, July 18, 2012)

When a pre-existing illness compensable. An illness is pre-existing if (i) the advice of a medical doctor on treatment was given for such
continuing illness or condition; or (b) seafarer had been diagnosed and has knowledge of such illness or condition but failed to disclose the
same during the pre-employment medical examination, and such cannot be diagnosed during said examination. Generally, a pre-existing
nature of seafarer’s illness bars compensation. Exception is when said illness was aggravated due to his working conditions. (Atienza v.
Orophil Shipping, Aug. 7, 2017)

(10) Exception to the rule under POEA-SEC that for a seafarer to be entitled to death benefits, he must have suffered a work-related death
during the term of his contract. The death occurred after the employment contract on account of work-related illness, subject to these
conditions: (i) seafarer’s work must involve the risks described therein; (ii) diseases was contracted as a result of seafarer’s exposure to the
described risks; (iii) diseases was contracted within a period of exposure and under such other factors necessary to contract it; and (iv) no
notorious negligence on the part of the seafarer. (Magsaysay Maritime v. De Jesus, Aug. 30, 2017)

(11) The one-year prescriptive period under the POEA-SEC to file claims arising thereunder is invalid. The Labor Code, providing for a
prescriptive period of three (3) years from the time the cause of action accrued, covers all money claims arising from employer-employee
relationship, including OFW claims. The Labor Code prevails, it being more favorable to the seafarers and more in accord with the State’s
declared policy to afford full protection to labor. (Southeastern Shipping v. Navarra, June 22, 2010)

Heirs of a missing seaman may file their claim for death compensation benefits within the three-year period fixed by law from the
time the seaman has been presumed dead. Thus, if the seafarer went missing under danger of death, he can be presumed dead after four
years pursuant to Article 391 of the Civil Code and the running of the prescription period to claim death benefits commences therefrom.
(Pantollano v. Korphil Ship Maangement, Mar. 30, 2011)

(12) A person who is a holder of a license can be held liable for illegal recruitment. Performance of prohibited acts, whether holder or not of a
license, is considered illegal recruitment; example is failing to reimburse expenses by the workers in connection with documentation for
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purposes of deployment, in cases where the deployment does not actually take place without worker’s fault under Section 6 of R.A. No. 8042
(People v. Molina, June 1, 2016)

Failure to present receipts in proving payments by the victims to illegal recruiter not fatal to prosecution of illegal recruitment. What
is essential is the witnesses had positively shown through their respective testimonies that the accused is the one involved in the prohibited
recruitment. (People v. Abat, Mar. 16, 2011)
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Money is immaterial to the prosecution for illegal recruitment. The definition of illegal recruitment includes the phrase “whether for profit
or not.” (People v. Mateo, Apr. 22, 2015)

Illegal recruitment when considered an offense involving economic sabotage. Illegal recruitment when committed by a syndicate or in
large scale shall be considered an offense involving economic sabotage. Illegal recruitment is deemed committed by a syndicate if carried out
by a group of three or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction
scheme, or enterprise. Illegal recruitment is deemed committed in large scale if committed against three or more persons individually or as a
group. (People v. Tolentino, July 1, 2015)

A person can be charged and convicted separately with estafa and illegal recruitment. The offense of illegal recruitment is malum
prohibitum where the criminal intent of the accused is not necessary for conviction, while estafa is malum in se where the criminal intent of
the accused is crucial for conviction. (People v. Daud, June 2, 2014) Thus, the two offenses are entirely distinct from each other not only from
their being punished under different statutes but also from their elements being different. (People v. Bayker, Feb. 10, 2016)

(13) The apprenticeship agreement is invalid if they are already regular employees. Employees who are already rendering service to the
company and who perform tasks that are usually necessary and desirable in usual business or trade of employer cannot be made to undergo
apprenticeship.

Employees who completed the apprenticeship agreement and are already working in the company cannot be required to undergo a
purported second apprenticeship agreement for a second skill which was not mentioned in the agreement itself. With the expiration of
the first agreement and their retention as employees, the employer recognized the completion of their training and their acquisition of a regular
employee status. (Atlanta Industries v. Sebolino, Jan. 26, 2011)

(14) Four-fold test to determine the existence of employer-employer relationship explained. The four-fold test is: (i) the selection and
engagement of the employee; (ii) the payment of wages; (iii) the power of dismissal; and (iv) the employer’s power to control the employee
on end to be achieved and the means and methods by which the work is accomplished. The last element, the so-called control test, is the most
important element. (Tenazas v. R. Villegas Taxi Transport, Apr. 2, 2014) The control test merely calls for the existence of the right to control,
and not necessarily the exercise thereof. It is not essential that the employer actually supervises the performance of duties by the employee. It
is enough that the former has a right to wield the power. (Alba v. Espinosa, Aug. 9, 2017)

Economic dependence test as a test to determine employer-employee relationship explained. The existing economic conditions prevailing
between the parties can help in determining the existence of an employer-employee relationship. The proper standard of economic dependence
is whether the worker is dependent on the alleged employer for his continued employment in that line of business. (Francisco v. NLRC, Aug.
31, 2006)

(15) Absent any valid extension of probationary period, an employee who was suffered to work for more than the legal period of six
months, or the period set forth by employer, of probationary employment shall, by operation of law, becomes a regular employee.
Thus, an employee who received a commendable rating during his probationary period of six months and was allowed to work after said
period becomes a regular employee. (Umali v. Hobbywing Solutions, Mar. 14, 2018)

(16) Activities of project employees may or may not be usually necessary or desirable in the usual business or trade of the employer. A
project could refer to a particular job or undertaking that is within the regular or usual business of the employer company, but which is distinct
and separate, and identifiable as such, from the other undertakings of the company; such undertaking begins and ends at determined or
determinable times. An example is a particular construction project of a construction company. A project could also refer to a particular job
or undertaking that is not within the regular business of the corporation. This must also be identifiably separate from the ordinary business
operations, and begins and ends at determined or determinable times. (E. Ganzon, Inc. v. Ando Jr, Feb. 20, 2017)
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Mere fact, however, that the construction workers, or any other purported project employees, worked on projects that were time-
bound did not automatically characterize them as project employees. They are regular employees if: (i) continuously, as opposed to
intermittently, rehired by the same employer for the same tasks or nature of tasks; and (ii) these tasks are vital, necessary and indispensable to
the usual business or trade of employer. (Alba v. Espinosa, Aug. 9, 2017) Nonetheless, they are indeed project employees if: (i) employment
has been fixed for a specific project or undertaking; and (ii) completion of the specific project or undertaking has been determined at the time
of the engagement of the employee. (Minsola v. New City Builders, Jan. 31, 2018)
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Project employment is different from fixed-term employment. The former requires a project and satisfies the two foregoing requisites. In
the latter, the duration is agreed upon by the parties, which may be any day certain, understood to be "that which must necessarily come
although it may not be known when." The decisive determinant in the latter is not the activity that the employee is called upon to perform but
the day certain agreed upon by the parties for the commencement and termination of the employment relationship.

Criteria that fixed-term employment is not in circumvention of the law on security of tenure. The criteria are (i) the fixed period of
employment was knowingly and voluntarily agreed upon by the parties without any force, duress, or improper pressure being brought to bear
upon the employee and absent any other circumstances vitiating his consent; or (ii) it satisfactorily appears that the employer and the employee
dealt with each other on more or less equal terms with no moral dominance exercised by the former or the latter. (GMA Network v. Pabriga,
Nov. 27, 2013) Fixed-term employment is not per se illegal or contrary to public policy. (E. Ganzon, Inc. v. Ando Jr, Feb. 20, 2017)

(17) Capatazes or foremen who supervise and instruct miners, and other rank-and-file employees under them, assess and evaluate their
performance, make regular reports and recommend new systems and procedure of work, as well as guidelines for the discipline of
employees, are not rank-and-file employees. They are an extension of the management, and as such they may influence the rank-and-file
workers under them to engage in slowdowns or similar activities detrimental to the policies, interests or business objectives of the employers.
Consequently, they could form their own union. (Lepanto Consolidated v. Lepanto Capataz Union, Feb. 18, 2013)

(18) Private school teachers are not exclusively governed by the Labor Code. The Manual of Regulations for Private Schools suppletorily
applies. Thus, for employment on probationary status of full time teachers, the probationary period shall not exceed more than three
consecutive years of satisfactory service in elementary/secondary levels, six regular semesters in tertiary level, or nine consecutive trimesters,
if collegiate courses are offered on a trimester basis. After which, they become regular or permanent employees. (Colegio del Santisimo
Rosario v. Rojo, Sept. 4, 2013)

(19) When labor-only contracting exists. It exists when any of the two elements are present: (i) the contractor does not have substantial capital
or investment which relates to the job, work or service to be performed and the employees recruited, supplied or placed by such contractor or
subcontractor are performing activities which are directly related to the main business of the principal; or (ii) the contractor does not exercise
the right to control the performance of the work of the contractual employee. Failure to register as contractor with the DOLE raises a disputable
presumption of engaging labor-only contracting. (Manila Memorial Park v. Lluz, Feb. 3, 2016) (Per D.O. No. 174-17, substantial capital refers
to paid-up capital of at least P5 Million for corporations; or net worth of P5 Million for single proprietorship). A finding that a contractor is a
“labor-only” contractor is equivalent to declaring that there is an employer-employee relationship between the principal and the employees of
the supposed contractor, and the labor-only contractor is considered as a mere agent of the principal, the real employer. (Petron Corporation
v. Caberte, June 15, 2015)

Trilateral relationship explained. In legitimate contracting, there exists a trilateral relationship under which there is a contract for a specific
job, work or service between the principal and the contractor or subcontractor, and a contract of employment between the contractor or
subcontractor and its workers. Hence, there are three parties involved in these arrangements, the principal which decides to farm out a job or
service to a contractor or subcontractor, the contractor or subcontractor which has the capacity to independently undertake the performance of
the job, work or service, and the contractual workers engaged by the contractor or subcontractor to accomplish the job, work or service. Manila
Memorial Park v. Lluz, Feb. 3, 2016)

Bilateral relationship explained. It is where the independent contractor himself, possessing unique skills and talents that set them apart from
ordinary employees, performs the work for the principal. (Fuji Television v. Espiritu, Dec. 3, 2014) Examples are: (i) newspaper columnist
hired because of skill and unique viewpoint as feminist advocate where the newspaper has no control over her (Orozco v. Court of Appeals,
Aug. 13, 2008); (ii) masiador (takes bets from gamecock owners and orders start of cockfight) and sentenciador (oversees proper gaffing of
fighting cocks, determine their physical condition and capabilities, and eventually declares result of cockfight) who perform their duties free
from direction of control of principal (Semblante v. Court of Appeals, Aug. 15, 2011); and (iii) basketball referee whose skills and independent
judgment are required and cannot be possibly controlled by hiring part (Bernarte v. PBA, Sept. 14, 2011)
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Management can farm out activities which are core to its business. Management prerogative covers farming out of activities, regardless
of whether such activity is peripheral or core in nature. (Aliviado v. Procter and Gamble, June 6, 2011)

(20) Facilities and supplements distinguished. Facilities are items of expense necessary for the laborer's and his family's existence and subsistence
so that by express provision of law, they form part of the wage and when furnished by the employer are deductible therefrom, since if they are
not so furnished, the laborer would spend and pay for them just the same. Supplements constitute extra remuneration or special privileges or
benefits given to or received by the laborers over and above their ordinary earnings or wages. The real difference lies on the purpose why it Page | 6
was given by the employer. If it is primarily for the employee’s gain, then the benefit is a facility; if its provision is mainly for the employer’s
advantage, then it is a supplement.

Requisites before the value of facilities can be deducted from the employees’ wages. The requisites are: (i) proof must be shown that such
facilities are customarily furnished by the trade; (ii) the provision of deductible facilities must be voluntarily accepted in writing by the
employee; and (iii) the facilities must be charged at fair and reasonable value. (Our Haus Realty v. Parian, Aug. 6, 2014)

(21) When the non-diminution rule found in Article 100 of the Labor Code prohibiting employers from eliminating or reducing the benefits
received by their employees applies. This applies only when the benefit is based on an express policy, a written contract, or has ripened into
a practice. (Wesleyan University-Philippines v. Wesleyan University-Philippines Faculty and Staff Association, Mar. 12, 2014)

Requisites for existence of diminution of benefits. The requisites are: (i) the grant or benefit is founded on a policy or has ripened into a
practice over a long period of time; (ii) the practice is consistent and deliberate; (iii) the practice is not due to error in the construction or
application of a doubtful or difficult question of law; and (iv) the diminution or discontinuance is done unilaterally by the employer. (Supreme
Steel Corporation v. Nagkakaisang Manggagawa ng Supreme Independent Union, Mar. 28, 2011) If the practice is due to error in construction
or application of a doubtful or difficult question of law, yet said error is not corrected immediately after its discovery, rule on non-diminution
of benefits applies. (Wesleyan University-Philippines v. Wesleyan University-Philippines Faculty and Staff Association, Mar. 12, 2014)

Requisites to determine existence of company practice. The requisites are (i) the giving of the benefit is done over a long period of time,
and (ii) it has been made regularly, consistently and deliberately. It requires an indubitable showing that the employer agreed to continue
giving the benefit knowing fully well that the employees are not covered by any provision of the law or agreement requiring payment thereof.
(Vergara v. Coca-cola Bottlers, Apr. 1, 2013)

(22) When and when not “bonus” demandable. Generally, a "bonus," which is a gratuity or act of liberality given in addition to what is ordinarily
received by or strictly due the recipient, is not demandable. It is demandable when promised by the employer and expressly agreed upon by
the parties. (Lepanto Ceramics v. Lepanto Ceramics Employees Association, Mar. 2, 2010)

(23) Except overtime pay, employer has burden of proof to show that holiday pay, service incentive leave pay, and 13th month pay was
paid. For these benefits, the relevant laws mandate the payment. In case of overtime pay, the employee must first prove that he worked beyond
the normal working hours. After having proven such, the burden is on the employer to prove that he paid the employee overtime pay. (Pigcaulan
v. Security and Credit Investigation, Jan. 16, 2012)

(24) Wage distortion defined. It is a situation where an increase in prescribed wage rates results in the elimination or severe contraction of
intentional quantitative differences in wage or salary rate between and among employee groups of an establishment as to effectively obliterate
the distinction embodied in such wage structure based on skills, length of service or other logical bases of differentiation. Its elements are: (i)
existing hierarchy of positions with corresponding salary rates; (ii) significant change in the salary rate of a lower pay class without a
concomitant increase in the salary rate of a higher one; (iii) elimination of the distinction between two levels; and (iv) existence of distortion
in the same region of the country. Thus, where the wage adjustments was due to increase in hiring rates of employees subsequently hired, and
not due to wage order, no wage distortion exists. (Philippine Geothermal, Inc. Employees Union v. Chevron, Jan. 24, 2018)

(25) Employee’s availment of free legal services of the Public Attorney’s Office (PAO) does not prevent the award of attorney’s fees upon
the successful conclusion of the litigation. If attorney’s fees are awarded, the same goes to the PAO as token recompense to them for their
provision of free legal services to litigants who have no means of hiring a private lawyer. (Alva v. High Capacity Security, Nov. 8, 2017)

(26) Retirement at the age below the legal retirement age allowed if agreed by the employee. A retirement plan giving the employer the option
to retire its employees below the ages provided by law must be assented to and accepted by the latter; otherwise, it amounts to deprivation of
property without due process of law. (Cercado v. Uniprom, Oct. 13, 2010) Mere mention of a retirement plan in the letter of appointment does
not sufficiently inform an employee of the contents thereof, and as such, the same cannot be treated that the employee assented thereto. (Laya
Jr. v. Philippine Veterans Bank, Jan. 10, 2018)
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Computation of retirement pay. Unless the parties provide for broader inclusions, the retirement pay is equal to half-month’s pay per year
of service, where half month pay is computed as 15 days plus 1/12th of the 13th month pay (30 days / 12 = 2.5 days) and the cash equivalent
of not more than 5 days service incentive leaves, for a total of 22.5 days.

When employee receives a retirement pay equivalent to 15 days only, and not 22.5 days of salary. If the employee is exempted by law
from receiving 13th month pay and service incentive leave, such as a taxi driver paid on the “boundary” system basis, then these shall not be Page | 7
included in the computation of retirement pay. (Serrano v. Severino Santos, Aug. 9, 2010)

Part-time employees are entitled to retirement benefits, even if the company policy and the CBA grant retirement benefits only to
full-time employees. Under the law, only government employees and employees of retail, service, and agricultural establishments regularly
employing not more than 10 employees are not covered by retirement. Part-time employees are not among those specifically exempted from
the law. (Dela Salle Araneta v. Bernardo, Feb. 13, 2017)

(27) When the collection of both retirement benefits and separation pay upon severance from employment allowed. This is allowed if
provided in the company’s retirement plan and/or CBA.

Retirement benefits and separation pay distinguished. Retirement benefits are a form of reward for an employee’s loyalty and service to
an employer and are earned under existing laws, CBAs, employment contracts and company policies. Separation pay is that amount which an
employee receives at the time of his severance from employment, designed to provide the employee with the wherewithal during the period
he is looking for another employment and is recoverable only in instances enumerated under Article 283 (closure of establishment and
reduction of personnel) and 284 (disease as a ground for termination) of the Labor Code or in illegal dismissal cases when reinstatement is
not feasible. (Goodyear v. Angus, Nov. 12, 2014)

(28) Proportionality rule in termination of employment explained. The penalty must be commensurate with the act or omission imputed to the
employee and must be imposed in connection with the disciplinary authority of the employer. Hence, dismissal of employees for minor and
negligible offenses may be considered illegal dismissal (Malcaba v. ProHealth Pharma, June 6, 2018) But, an employee may be legally
dismissed for serious misconduct for taking one used packing tape where she admitted that she will use it for personal benefit, and there was
several cases of theft, vandalism, and loss of company and employees’ property when the incident involving the employee transpired, for
which the employer previously issued two memoranda implementing an intensive inspection procedure and reminding all those caught will
be dealt with accordingly. (Nagkakaisang Lakas ng Manggagawa sa Keihin v. Keihin, Aug. 9, 2010)

(29) Requisites for misconduct or improper behavior to be a just cause for dismissal. The requisites are: (i) it must be serious; (ii) it must
relate to the performance of the employee’s duties; and (iii) it must show that the employee has become unfit to continue working for the
employer. (The Coffee Bean and Tea Leaf v. Arenas, Mar. 11, 2015) Two employees caught having sexual intercourse during office hours
within company premises can be legally dismissed on this ground. (Imasen vs Alcon, Oct. 22, 2014) So is an employee uttering obscene,
insulting or offensive words against his superior. (Sterling Paper v. KMM-Katipunan, Aug. 2, 2017)

(30) Requisites for neglect of duty to be a just cause for dismissal. The requisites are: (i) it must be gross; and (ii) it must be habitual. Gross
neglect entails want of care in the performance of one’s duties, while habitual neglect imparts repeated failure to perform such duties for a
period of time, depending on the circumstances. (Casco v. NLRC, Feb. 19, 2018) Requisite of habituality is not required if the neglect leads
to employer’s loss involving substantial amount, e.g. delivery boy who did not lock the steering wheel of employer’s motorcycle, causing it
to be carnapped, is validly dismissed on ground of neglect of duty, even if it is his first infraction. (LBC v. Mateo, June 9, 2009)

(31) Requisites for willful breach of trust or loss of confidence to be a just cause for dismissal. The requisites are: (i) the employee must be
holding a position of trust and confidence; and (ii) the act complained against would justify the loss of trust and confidence. (Wesleyan
University v. Reyes, July 30, 2014)

Two classes of employees vested with trust and confidence. In the first class belong the managerial employees or those vested with the
powers or prerogatives to lay down management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees or effectively recommend such managerial actions. In the second class belong the fiduciary rank-and-file or those who in the
normal and routine exercise of their functions regularly handle significant amounts of money or property, and are thus classified as occupying
positions of trust and confidence. Cashiers, auditors, property custodians, and bus conductor are some of the employees in the second class.
(Lagahit v. Pacific Concord, Jan. 13, 2016; Mapili v. Philippine Rabbit, July 27, 2011) For the first class, the mere existence of a basis for
believing that such employee has breached the trust of his employer would suffice for his dismissal on ground of loss of trust and confidence.
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For the second class, loss of trust and confidence requires proof of involvement; mere uncorroborated assertions and accusations by the
employer would not suffice. (Alaska Milk Corporation v. Ponce, July 26, 2017)

Criminal conviction is not a condition sine qua non for the dismissal of an employee on the ground of breach of trust. Sufficient
evidence to show that the employee has been guilty of a breach of trust, or that his employer has ample reason to distrust him, is enough.
(Concepcion v. Minex Import, Jan. 24, 2012)
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(32) Requisites of a valid retrenchment. The requisites are: (i) it is reasonably necessary and likely to prevent business losses which, if already
incurred, are not merely de minimis, but substantial, serious and real, or only if expected, are reasonably imminent as perceived objectively
and in good faith by the employer; (ii) the employer serves written notice to both the employee/s concerned and the DOLE at least a month
before the intended date of retrenchment; (iii) payment of separation pay equivalent to at least one month pay for every year of service; (iv)
the prerogative is exercised in good faith; and (v) the employer uses fair and reasonable criteria in ascertaining who would be retrenched or
retained. The losses must be supported by the submission of financial statements duly audited by independent external auditors.

Requisites of a valid redundancy. The requisites are: (i) written notice served on both the employees and the DOLE at least one month prior
to the intended date of termination of employment; (ii) payment of separation pay equivalent to at least one month pay for every year of
service; (iii) good faith in abolishing the redundant positions; and (iv) fair and reasonable criteria in ascertaining what positions are to be
declared redundant and accordingly abolished. (PNB v. Dalmacio, July 5, 2017) No valid redundancy if the employer after, effecting the
redundancy program, hired additional employees for the positions declared redundant. (Abbott Laboratories v. Torralba, Oct. 11, 2017)

(33) Substantive and procedural requisites before an employee is validly dismissed on ground of disease. The substantive requisites are: (i)
an employee has been found to be suffering from any disease; (ii) his continued employment is prohibited by law or prejudicial to his health,
as well as to the health of his co-employees; and (iii) a competent public health authority issues a medical certificate that the disease is of such
nature or at such a stage that it cannot be cured within a period of six months even with proper medical treatment. The procedural requisites
are: (i) the notice to apprise the employee of the ground for which his dismissal is sought; and (ii) the notice informing the employee of his
dismissal, to be issued after the employee has been given opportunity to answer and to be heard on his defense. (Deoferio v. Intel Technology,
June 18, 2014)

(34) Employer may opt not to require the dismissed employees to report for work during the 30-day notice period in cases of closure. It is
within the employer’s discretion in light of various business reasons, especially when there is no more work to be done. (PNCC Skyway v.
Secretary of Labor, Apr. 19, 2016)

(35) Employer may withhold terminal pay and benefits pending the employee’s return of its properties and completing the required
clearances. Clearance procedures are instituted to ensure that the properties, real or personal, belonging to the employer but are in the
possession of the separated employee, are returned to the employer before the employee’s departure. The return of the property’s possession
became an obligation on the part of the employees when the employer-employee relationship ceased. (Milan v. NLRC, Feb. 4, 2015)

(36) A non-teaching personnel is illegally dismissed by a Catholic educational institution if the ground is “disgraceful and immoral
conduct” under the Manual of Regulations for Private Schools for engaging in pre-marital sexual relations, getting pregnant out of
wedlock, and subsequently marrying the father of her child. The determination of whether a conduct is disgraceful or immoral involves a
two-step process: first, a consideration of the totality of the circumstances surrounding the conduct; and second, an assessment of the said
circumstances vis-à-vis the prevailing norms of conduct, i.e., what the society generally considers moral and respectable. When the law speaks
of immoral or, necessarily, disgraceful conduct, it pertains to public and secular morality, not to religious one. No law penalizes an unmarried
mother by reason of her sexual conduct or proscribes the consensual sexual activity between two unmarried persons; neither does such situation
contravenes any fundamental state policy enshrined in the Constitution. The pregnancy out of wedlock is not a disgraceful or immoral conduct
since the personnel and the father of the child have no impediment to marry each other. (Leus v. St. Scholastica, Jan. 28, 2015)

(37) Employee can be dismissed for failure to comply with the standards of productivity prescribed by the employer. It will amount to gross
inefficiency, a cause analogous to a just cause. "Gross inefficiency" is closely related to "gross neglect"; both involve specific acts of omission
on the part of the employee resulting in damage to the employer or to his business. Examples: (i) a teacher who failed to measure up to the
standards of teaching Filipino classes (International School v. ISAE, Feb. 5, 2014); (ii) human resources director who, on two occasions, gave
wrong information about leave and holiday pay resulting in confusion in computation of salaries and wages (Reyes-Rayel v. Philippine Luen
Thai Holdings, July 11, 2012); and (iii) machine operator who failed to follow work standards (Realda v. New Age Graphics, Apr. 25, 2012)
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College professors who failed to comply with the requirement to Commission on Higher Education to obtain master’s degree may be
validly dismissed, notwithstanding stipulation in the CBA that they acquired tenure by default. Such stipulation/waiver has no effect
because it is contrary to law. (Son v. UST, Apr. 18, 2018)

(38) In abandonment, the employee failed to report for work without any valid and justifiable reason and that he had a clear intention to
sever employment relationship by some overt act. Mere absence or failure to report for work is not tantamount to abandonment. (Vilma v.
NII Enterprises, Nov. 22, 2017) So is mere failure to report for work after notice to return, especially where the employee inquired several Page | 9
times as to his employment status but was not entertained. (Litex Glass v. Sanchez, Apr. 22, 2015)

Consequences if there is no abandonment and no illegal dismissal. The remedy is reinstatement without backwages. If reinstatement is
impossible due to strained relations and that the employee already found another employment, each party must bear his own loss, thus, placing
them on equal footing. (Pu-od v. Ablaze Builders, Nov. 20, 2017)

(39) Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in
favor of the exigency of the service, and one has no other choice but to dissociate oneself from employment. It is a formal pronouncement
or relinquishment of an office, with the intention of relinquishing the office accompanied by the act of relinquishment. (Bilbao v. Saudi
Arabian Airlines, Dec. 14, 2011) Resignation is a defense in an action for illegal dismissal when the employer proves clearly, positively, and
convincingly that the resignation was voluntary; the employer cannot simply rely on the weakness of the employee's evidence. (D.M. Consunji
Corporation v. Bello, July 29, 2013)

(40) When and when not the employee is constructively dismissed. Constructive dismissal exists when an employer’s act of clear discrimination,
insensibility or disdain becomes so unbearable on the part of the employee so as to foreclose any choice on his part except to resign from such
employment. (Gan v. Galderma, Jan. 17, 2013)
(a) Constructively dismissed: Employer committed unsubstantiated reduction of work hours on the pretext of allegedly forestalling losses.
(Intec Cebu v. Court of Appeals, June 22, 2016)
(b) Constructively dismissed: Employer tore into pieces the employee’s time card. This can be considered as an outright and symbolic
termination of employment relationship. (Ang v. San Joaquin, Aug. 7, 2013)
(c) Constructively dismissed: Another employee is soon appointed to a position which the employer claims has been abolished, while the
employee who had to vacate the same is transferred against her will to a position which does not exist in the corporate structure. (Ico v.
Systems Technology Institute, July 9, 2014)
(d) Not constructively dismissed: After employer shouted “Kung ayaw mo na ng ginagawa mo, we can manage!” the employee tendered
a resignation letter containing words of gratitude. (Rodriguez v. Park n Ride, Mar. 20, 2017)
(e) Not constructively dismissed: An employee, who after violating company protocols, was granted by the employer a chance to resign
and save face rather than smear his employment record. (Cosue v. Ferritz Integrated, July 24, 2017)
(f) It depends: Transfers from one area/place/branch to another. It may or may not constitute constructive dismissal, depending on whether
it is a valid exercise of management prerogative or done to simply prejudice an employee. (Chateau Royale v. Balba, Jan. 18, 2017)
(g) It depends: Security guard placed on temporary off-detail is valid if due to agency’s client decision not to renew the service contract and
no post is available for the relieved security guard. If the floating status lasts for more than six months, the employee is considered
constructively dismissed. (Padilla v. Airborne Security, Nov. 22, 2017)

(41) Dismissal based on the contractual stipulation that the employer may dismiss the employee on “other grounds” is not valid. The term
“other grounds” is all-encompassing and makes the employee susceptible to arbitrary dismissal. (Gopio v. Bautista, June 6, 2018)

(42) Management prerogative explained. Management is free to regulate, according to its own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, time, place, and manner of work, processes to be followed, supervision
of workers, working regulations, transfer of employees, work suspension, lay-off of workers and discipline, dismissal and recall of workers.
(a) Valid exercise of management prerogative: Removal of chairs for bottling operators done in good faith. The chairs were removed
pursuant to an efficiency program to avoid instances of operators sleeping on the job and taking into consideration the duty of operators
to move constantly while working. (Royal Plant Workers’ Union v. Coca-cola Bottlers, Apr. 15, 2013)
(b) Invalid exercise of management prerogative: Indefinite suspension of an human resource officer due to unwed pregnancy until
she marries her boyfriend. No showing that marriage or no-marriage qualification is justified as a “bona fide occupational qualification”
with the following requisites: (i) employment qualification is reasonably related to the essential operation of the job involved; and (ii)
factual basis for believing that all or substantially all persons meeting the qualification would be unable to property perform the duties of
the job. (Capin-Cadiz v. Brent Hospital, G.R. No. 187417, Feb. 24, 2016)
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(43) Renaming the corporation does not constitute cessation of business and not a valid ground for termination of employment. The
changing of the name of a corporation is no more the creation of a corporation than the changing of the name of a natural person is begetting
of a natural person. There is a change of name only, and not a change of being. (Zuellig Freight v. NLRC, July 22, 2013)

(44) When a dismissed employee entitled to moral and exemplary damages. A dismissed employee is entitled to moral damages when the
dismissal is attended by bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to good morals, good
customs or public policy. Exemplary damages may be awarded if the dismissal is effected in a wanton, oppressive or malevolent manner. Page |
(Leus v. St. Scholastica, Jan. 28, 2015)
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(45) Doctrine of strained relations explained. Payment of separation pay is an acceptable alternative to reinstatement when the latter option is
no longer desirable or viable. Such payment liberates the employee from what could be a highly oppressive work environment. It releases the
employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust. Strained relations must be
demonstrated as a fact to be adequately supported by evidence. (Fernandez Jr v. Manila Electric Company, June 25, 2018)

(46) Financial assistance can be awarded in termination of employment on grounds of equity and social justice. It shall not be given, however,
to validly terminated employees, whose offenses are iniquitous or reflective of some depravity in their moral character. When the employee
commits an act of dishonesty, depravity, or iniquity, the grant of financial assistance is misplaced compassion. It is tantamount not only to
condoning a patently illegal or dishonest act, but an endorsement thereof. (Apacible v. Multimed Industries, May 30, 2011)

(47) Guidelines in the computation of backwages.

(a) When reinstatement is ordered: Backwages is computed from the time of dismissal until employee’s actual reinstatement.
(b) When separation pay is ordered in lieu of reinstatement, which is disputed, or the employee prayed for payment of separation of
pay, which is not disputed: Backwages is computed from the time of dismissal until the finality of the decision ordering separation pay.
(c) When separation pay is ordered after the finality of the decision ordering the reinstatement by reason of a supervening event
that makes the award of reinstatement no longer possible: Backwages is computed from the time of dismissal until the finality of the
decision ordering separation pay. (U-Bix Corporation v. Hollero, July 13, 2015)

Base figure in computing the award of backwages determined. The base figure is the employee’s basic salary plus regular allowances and
benefits received at the time of dismissal, unqualified by any wage and benefit increases granted in the interim. (BPI Employees Union v. BPI,
Sept. 21, 2011)

(48) An employee who prevailed in his action for money claims, such as payment of backwages, 13th month pay, is entitled at the discretion
of the court to legal interest on the amount claimed from the time it became legally due him until entry of judgment. Legal interest for
obligations not constituting a loan or forbearance of money is one that may be imposed not as a matter of right but at the discretion of the
court. This form of interest is not mandatory but discretionary in nature. (Lim v. HMR Philippines, Aug. 4, 2014)

(49) Requisites of a valid quitclaim. The requisites are: (i) there was no fraud or deceit on the part of any of the parties; (ii) the consideration for
the quitclaim is sufficient and reasonable; and (iii) the contract is not contrary to law, public order, public policy, morals or good customs, or
prejudicial to a third person with a right recognized by law. An invalid quitclaim is ineffective in barring recovery of the full measure of a
worker's rights, and the acceptance of benefits therefrom does not amount to estoppel. (Arlo Aluminum v. Pinon Jr., July 5, 2017)

(50) In cases of termination, the "ample opportunity to be heard" standard in the Labor Code prevails over the "hearing or conference"
requirement in the implementing rules and regulations. Thus, procedural due process requires:
(a) First written notice. It contains (i) detailed narration of facts and circumstances that serves as basis for the charge; (ii) specific causes
or grounds for termination; (iii) company rules violated or which ground under Article 282 is the charged premised upon; and (iv) a
directive that the employee is given an opportunity to submit written explanation within a reasonable period, which must be at least five
calendar days from receipt.
(b) Ample opportunity to be heard. The "ample opportunity to be heard" means any meaningful opportunity, verbal or written, given to
the employee to answer the charges against him and submit evidence in support of his defense, whether in a hearing, conference or some
other fair, just and reasonable way. A formal hearing or conference becomes mandatory only when requested by the employee in writing
or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances justify it.
(c) Written notice of termination. If termination is justified, this contains (i) all circumstances involving the charge against the employees
have been considered; and (ii) grounds have been established to justify severance of employment. (Distribution and Control v. Santos,
July 10, 2017)
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Stipulation that the employer is given the right to terminate employment contract by paying one month salary in lieu of notice is
invalid. The stipulation contravenes the Labor Code provision on two-notice requirement and undermines security of tenure. (Gopio v.
Bautista, June 6, 2018)

Failure to afford procedural due process warrants payment of indemnity in the form of nominal damages, which amount is subject
to sound discretion of the court taking into account the relevant circumstances. If the dismissal is based on a just cause under Article 282
but the employer failed to comply with the notice requirement, the sanction to be imposed upon him should be tempered because the dismissal Page |
process was, in effect, initiated by an act imputable to the employee. If the dismissal is based on an authorized cause under Article 283 but the
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employer failed to comply with the notice requirement, the sanction should be stiffer because the dismissal process was initiated by the
employer’s exercise of his management prerogative. (Samar-Med v. NLRC, July 15, 2013; Jaka Food Processing v. Pacot, Mar. 28, 2005)

Nominal damages is adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be
vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him. This is intended not to
penalize the employer but to vindicate or recognize the employee's right to statutory due process which was violated by the employer. (Agabon
v. NLRC, Nov. 17, 2004)

(51) Contractual due process is the due process prescribed by the employer itself in its company rules and regulations or code of discipline.
Having prescribed the same, the employer is contractually bound to adhere to and observe it. (Abbott Laboratories v. Alcaraz, July 23, 2013)

(52) Assistance of counsel in termination cases is not indispensable. Exception is when the employee himself requests for counsel or when he
manifests that he wants a formal hearing on the charges against him. (Lopez v. Alturas Group, Apr. 11, 2011)

(53) In increased risk theory in compensation proceedings, e.g. claim for compensation from GSIS, there must be a reasonable proof that
the employee’s working condition increased his risk of contracting the disease, or that there is a connection between his work and the
cause of the disease. Only a reasonable proof of work-connection, not direct causal relation, however, is required to establish compensability
of a non-occupational disease. Probability, and not certainty, is the yardstick. (GSIS v. Besitan, Nov. 23, 2011)

(54) What the spouse needs to prove to claim death benefits as a primary beneficiary under the Social Security Law. Spouse must prove
two factors: (i) that he is the legitimate spouse; and (ii) he is dependent upon the member for support. (Social Security Commission v. Favila,
Mar. 28, 2011)

LABOR RELATIONS

(55) Union, workers’ association, and labor management council (LMC) explained. A union refers to any labor organization in the private
sector organized for collective bargaining and for other legitimate purpose, while a workers’ association is an organization of workers formed
for the mutual aid and protection of its members or for any legitimate purpose other than collective bargaining. Workers and employers may
form LMC, which is based on the Labor Code provision mandating that workers shall have the right to participate in policy and decision-
making processes of the establishment where they are employed insofar as said processes will directly affect their rights, benefits, and welfare.
A common element between unionism and LMC is the existence of employer-employee relationship. This is not mandatory in the formation
of workers’ association. What the law simply requires is that the members thereof share the same interest. The very definition of a workers'
association speaks of mutual aid and protection.

Employees with definite employers may form a workers’ association for mutual aid and protection instead of a union. While Article
243 provides that ambulant, intermittent and itinerant workers, and those without any definite employers may form labor organizations for
mutual aid and protection, the law does not restrict said right to form workers’ association to them. The option to form or join a union or
workers’ association lies with the workers themselves, and whether they have definite employers or not. (Samahan ng Manggagawa sa Hanjin
v. BLR, Oct. 14, 2015)

(56) Bargaining unit defined. A bargaining unit is group of employees of a given employer, comprised of all or less than all of the entire body of
employees, which the collective interests of all the employees, consistent with equity to the employer, indicated to be best suited to serve
reciprocal rights and duties of the parties under the collective bargaining provisions of the law.

Tests to determine the proper collective bargaining unit. The tests are: (i) will of employees (Globe Doctrine); (ii) affinity and unity of
employees' interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions; (iii) prior
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collective bargaining history; and (iv) employment status, such as temporary, seasonal and probationary employees. (Holy Child Catholic
School v. Sto. Tomas, July 23, 2013)

(57) Confidential employees defined. Confidential employees are defined as those who assist or act in a confidential capacity, in regard to persons
who formulate, determine, and effectuate management policies in the field of labor relations.

Confidential employees should be excluded from the rank-and-file bargaining unit. The rationale for their separate category and Page |
disqualification to join any labor organization is similar to the inhibition for managerial employees. If allowed to be affiliated with a union, a
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confidential employee might not be assured of loyalty in view of evident conflict of interests and the union can also become company-
denominated with the presence of such employee in the union membership. (San Miguel Foods v. San Miguel Corporation, Aug. 1, 2011)

(58) Employees of cooperative who is also a member of said cooperative cannot collectively bargain with the said employer cooperative.
An owner cannot bargain with himself or his co-owners. For cooperatives with employees who are not members or co-owners thereof, they
are entitled to exercise the rights of all workers to organization, collective bargaining, and negotiations. (Republic v. Asiapro Cooperative,
Nov. 23, 2007)

Inclusion of supervisory employees in a labor organization seeking to represent the bargaining unit of rank-and-file employees does
not divest it of its status as a legitimate labor organization. Any mingling between supervisory and rank-and-file employees in its
membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration, unless such mingling was brought
about by misrepresentation, false statement or fraud. (Samahang Manggagawa sa Charter Chemical v. Charter Chemical, Mar. 16, 2011) This
is true even if those is allegedly mingled are managerial employees. (Asian Institute of Management v. Asian Institute of Management Faculty
Association, Jan. 23, 2017)

(59) Failure to submit annual financial reports is not a ground for cancellation of union registration. R.A. No. 9481, which amended the
Labor Code, removed said ground and provided only three grounds for cancellation of union registration: (a) misrepresentation, false
statements or fraud in connection with adoption or ratification of constitution and by-laws; (b) misrepresentation, false statements, frauds, in
connection with election of officers; and (c) dissolution by members. (Heritage Hotel v. NUWHRAIN-HHMSC, Jan. 12, 2011)

(60) The 20% minimum employees requirement pertains to Article 234(c), requiring that in case of independent union, the names of all its
members comprising of at least 20% of all employees in the bargaining unit where it seeks to operate must be submitted, and not to
Article 234(b), requiring the submission of minutes of organizational meetings and list of workers who participated in such meeting.
It does not appear in Article 234 (b) of the Labor Code that the attendees in the organizational meeting must comprise 20% of the employees
in the bargaining unit. In fact, even the Implementing Rules and Regulations does not so provide. (Takata v. BLR, June 4, 2014)

(61) Charter certificate is not required to be certified under oath by the local union’s secretary or treasurer and attested to by its president.
Considering that the charter certificate is prepared and issued by the national union and not the local/chapter, it does not make sense to have
the local/chapter’s officers certify or attest to a document which they had no hand in the preparation of. (Samahang Manggagawa sa Charter
Chemical v. Charter Chemical, Mar. 16, 2011)

(62) Bystander rule explained. Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for certification
election; such proceeding is non-adversarial and merely investigative, for the purpose thereof is to determine which organization will represent
the employees in their collective bargaining with the employer. The choice of their representative is the exclusive concern of the employees.
It cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal from it. Not even a mere allegation that some
employees participating in a petition for certification election are actually managerial employees will lend an employer legal personality to
block the certification election. The employer's only right in the proceeding is to be notified or informed thereof. (Heritage Hotel Manila v.
Secretary of Labor, July 23, 2014)

(63) Signing of a petition for certification election outside the freedom period, which was filed during the freedom period, is not union
disloyalty. What is prohibited is the filing of a petition for certification election outside the 60-day freedom period. The signing of the
authorization to file a certification election was merely preparatory to the filing of the petition for certification election, or an exercise of right
to self-organization. (Picop Resources v. Tañeca, Aug. 9, 2010)

(64) Certificate of non-forum shopping is not required in a petition for certification election. A certification proceeding, even though initiated
by a "petition," is not a litigation but an investigation of a non-adversarial and fact-finding character. (SAMMA-LIKHA v. SAMMA
Corporation, Mar. 13, 2009)
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Legitimacy of the legal personality of a union cannot be collaterally attacked in a petition for certification election. Union legal
personality must be attacked in a separate direct action instituted particularly for the purpose of assailing it. (Legend International Resorts v.
Kilusang Manggagawa ng Legenda, Feb. 23, 2011)

Probationary employees can vote in certification election, even if disqualified by the CBA. All rank and file employees, probationary or
permanent, have a substantial interest in the selection of bargaining representative. The provision in the CBA disqualifying them from voting Page |
cannot override the constitutionally-protected right of workers to self-organization. (NUWHRAIN-Manila Pavilion Hotel v. Secretary of
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Labor, July 31, 2009)

Labor Arbiter is not bound by the findings of a Med-Arbiter of the Bureau of Labor Relations (BLR) of the existence of an employer-
employee relationship between the parties in a petition for certification election. The BLR has the original and exclusive jurisdiction to all
inter-union and intra-union conflicts, decide all disputes, grievances or problems arising from or affecting labor-management relations in all
workplaces whether agricultural or non-agricultural. In the exercise of this jurisdiction over labor-management relations, the Med-Arbiter has
the authority to determine the existence of an employer-employee relationship between the parties. The Labor Arbiter, however, is not bound
by the med-arbiter’s decision in the certification election case. Said decision, by the very nature of that proceeding, does not foreclose all
further disputes between the parties as to the existence or non-existence of an employer-employee relationship. (Hijo Resources v. Mejares,
Jan. 13, 2016)

(65) The existing CBA governs during the 60-day period prior to the expiration of the existing CBA or until a new agreement is reached
by the parties. Parties are 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 prior to the expiration of the old CBA and/or until a new agreement is reached by the parties. (GMC-Independent
Labor Union v. General Milling Corporation, June 15, 2011)

(66) “Union security” explained. "Union security" is a generic term which is applied to and comprehends a form of agreement which imposes
upon employees the obligation to acquire or retain union membership as a condition affecting employment. It includes:
(a) Union shop: When all new regular employees are required to join the union within a certain period for their continued employment.
(b) Maintenance of membership shop: When employees, who are union members as of the effective date of the agreement, or who
thereafter become members, must maintain union membership as a condition for continued employment until they are promoted or
transferred out of the bargaining unit or the agreement is terminated.
(c) Closed-shop: An enterprise in which, by agreement between the employer and his employees or their representatives, no person may be
employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement,
remains a member in good standing of a union entirely comprised of or of which the employees in interest are a part.

Requisites before an employer dismisses an employee under the union security clause: The requisites are: (i) the union security clause is
applicable; (ii) the union is requesting the enforcement of the union security provision in the CBA; and (iii) there is sufficient evidence to
support the decision of the union to expel the employee from the union. (Ergonomic Systems v. Enaje, Dec. 13, 2017) Hence, an employer
cannot summarily dismiss employees expelled by the union under the union security clause. (BPI v. BPI Employees Union-Davao Chapter,
Oct. 19, 2011)

(67) A corporation cannot invoke its merger with another corporation as a valid ground to exempt its "absorbed employees" from the
coverage of a union shop clause contained in its existing CBA with its own certified labor union. Without the union shop clause, the
company can jeopardize the majority status of the certified union by excluding from union membership all new employees whom the
corporation will "absorb" in future mergers and all new employees whom the corporation hires from the beginning of their employment. In
this manner, the corporation can increase the number of members of the collective bargaining unit and if this increase is not accompanied by
a corresponding increase in union membership, the certified union may lose its majority status and render it vulnerable to attack by another
union who wishes to represent the same bargaining unit. (BPI v. BPI Employees Union-Davao Chapter, Aug. 10, 2010)

(68) A union can commit unfair labor practice (ULP). Labor organizations, like a union, can commit ULP, under Article 249. Thus, where the
union violated its own by-laws and constitution by not acting on the appeals of a suspended member, which led to his another suspension and
eventual expulsion from the union, is guilty of restraining an employee in the exercise of right to self-organization, which is a ULP under said
provision. (Mendoza v. Officers of Manila Water Employees Union, Jan. 25, 2016)

(69) Strike and picket defined. Strike is a temporary stoppage of work by the concerted action of employees as a result of an industrial or labor
dispute. The term "strike" encompasses not only concerted work stoppages, but also slowdowns, mass leaves, sit-downs, attempts to damage,
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destroy or sabotage plant equipment and facilities, and similar activities. Meanwhile, picketing involves merely the Mar.ing to and fro at the
premises of the employer, usually accompanied by the display of placards and other signs making known the facts involved in a labor dispute.
(Santa Rosa Coca-Cola Plant Employees Union v. Coca-cola Bottlers Phils., Jan. 24, 2007)

(70) Procedural requirements for a valid strike. They are: (a) notice of strike filed with DOLE at least 30 days before the intended date thereof,
or 15 days in case of ULP; (b) observance of cooling-off period, which is 30 days if case of bargaining deadlock, 15 days in case of ULP,
except union busting where there is no cooling-off period to be observed; (c) a strike vote approved by the majority of the total union Page |
membership in the bargaining unit concerned, obtained by secret ballot in a meeting called for that purpose; (d) notice of results of voting at
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least seven days before the intended strike given to DOLE; (e) observance of seven-day strike ban. Striking employees cannot claim good
faith when they failed to comply with procedural requirements for a strike. (HSBC Employees Union v. NLRC, Jan. 11, 2016)

A strike compliant with the legal requirements may be declared illegal if held contrary to an existing agreement, such as the “no
strike, no lockout” clause under the CBA. No law or public policy prohibits the union and the company from mutually waiving the strike
and lockout available to them to give way to voluntary arbitration. (C. Alcantara and Sons v. Court of Appeals, Sept. 29, 2010)

(71) Rules on termination of employment of striking employees. A strike staged without compliance with the requirements of the Labor Code
is illegal, and may cause the termination of the employment of the participating union officers and members. The liability, however, for the
illegal strike is individual, not collective. To warrant the termination of an officer of the labor organization on that basis, the employer must
show that the officer knowingly participated in the illegal strike. An ordinary striking employee cannot be terminated based on his participation
in the illegal strike, for the employer must further show that the employee committed illegal acts during the strike. (Hongkong & Shanghai
Bank v. NLRC, Jan. 11, 2016)

(72) Employees participating in illegal strike are not entitled to backwages. They do not render work for the employer during the period of the
illegal strike. The principle of "fair day’s wage for a fair day’s labor" remains as the basic factor in determining the award thereof. If there is
no work performed by the employee there can be no wage or pay unless, of course, the laborer was able, willing and ready to work but was
illegally locked out, suspended or dismissed or otherwise illegally prevented from working. (Olisa v. Escario, Sept. 27, 2010)

(73) The assumption or certification order by the DOLE Secretary in an industry indispensable to national interest has the effect of
automatically enjoining the intended or impending strike or lockout. If one has already taken place, all striking workers shall immediately
return to work, and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing
before the strike or lockout. (YSS Employees Union v. YSS Laboratories, Dec. 4, 2009)

(74) Intra-union dispute explained. It refers to any conflict between and among union members, including grievances arising from any violation
of the rights and conditions of membership, violation of or disagreement over any provision of the union’s constitution and by-laws, or disputes
arising from chartering or disaffiliation of the union. (Mendoza v. Officers of Manila Water Employees Union, Jan. 25, 2016)

Jurisdiction over intra-union disputes. The Bureau of Labor Relations and the Regional Directors of DOLE have concurrent jurisdiction
over inter-union and intra-union disputes. Such disputes include the conduct or nullification of election of union and workers’ association
officers. (Montaño v. Verceles, July 26, 2010)

(75) No jurisdictional limit as to the amount of claim that the DOLE Secretary may award in inspection cases pursuant to the visitorial
and enforcement power under Article 128. The jurisdiction of DOLE Secretary in inspection cases is not affected by the amount of claim
involved. (Tiger Construction v. Abay, Feb. 26, 2010)

Requisites of “exception clause” found under paragraph 2, Article 128 where, pursuant to visitorial and enforcement power, the
DOLE Secretary or his duly authorized representatives shall issue writs of execution, to the appropriate authority for the enforcement
of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises
issues supported by documentary proofs which were not considered in the course of inspection. The elements are the following: (a) that
the employer contests the findings of the labor regulations officer and raises issues thereon; (b) that in order to resolve such issues, there is a
need to examine evidentiary matters; and (c) that such matters are not verifiable in the normal course of inspection. (Meteoro v. Creative
Creatures, July 13, 2009)

DOLE Secretary has the power to determine the existence of employee-employer relationship under its visitorial and enforcement
power under Article 128. No limitation in the law was placed upon the power of the DOLE to determine the existence of an employer-
employee relationship. If the DOLE makes a finding that there is an existing employer-employee relationship, it takes cognizance of the
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matter, to the exclusion of the National Labor Relations Commission (NLRC). The DOLE would have no jurisdiction only if the employer-
employee relationship has already been terminated, or it appears, upon review, that no employer-employee relationship existed in the first
place. (People’s Broadcasting v. Secretary of Labor, Mar. 6, 2012)

(76) Guide to determine whether the Labor Arbiters or the Regional Trial Courts have jurisdiction over controversies involving dismissal
of a corporate officer. First, a person’s status as director and stockholder does not automatically convert his dismissal as an intra-corporate
dispute. Second, in order to determine whether a dispute constitutes an intra-corporate controversy or not, two elements must be considered, Page |
namely: (i) the status or relationship of the parties; and (ii) the nature of the question that is the subject of their controversy. (Matling Industries
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v. Coros, Oct. 13, 2010)

Nature of the controversy test explained. The controversy must not only be rooted in the existence of an intra-corporate relationship, but
must as well pertain to the enforcement of the parties’ correlative rights and obligations under the Corporation Code and the internal and intra-
corporate regulatory rules of the corporation. If the relationship and its incidents are merely incidental to the controversy or if there will still
be conflict even if the relationship does not exist, then no intra-corporate controversy exists. (Cosare v. Broadcom Asia, Feb. 5, 2014)

(77) Non-compete clause/non-involvement proviso/good will clause/post-employment ban is valid, even if being in restraint of trade, as
long as there are reasonable limitations as to time, trade, and place. Parties to a contract may establish such stipulations, clauses, terms
and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. (Tiu
v. Platinum Plans, Feb. 28, 2007)

Regular courts, not labor courts, have jurisdiction over post-employment ban controversies. There is no reasonable causal connection
with the employer-employee relationship. A provision on post-employment ban is an undertaking effective after the cessation of the
employment, and as such, considered a civil dispute. (Portillo v. Lietz, Oct. 10, 2012)

(78) Regular courts have jurisdiction if the cause of action is based on quasi-delict or tort, which has no reasonable causal connection with
any of the claims involving employee-employer relationship. Thus, a complaint alleging that due to the continued and prolonged exposure
to textile dust seriously inimical to his health, the employee suffered work-contracted disease which is now irreversible and incurable, and
deprived him of job opportunities, involves quasi-delict that regular courts have jurisdiction. (Indophil v. Adviento, Aug. 4, 2014) But, Labor
Arbiter has jurisdiction over claim for damages by employer against the union, which is the exclusive bargaining agent of the employees, as
a result of illegal strike, there being reasonable causal connection between the claim asserted and employee-employer relations. (PAL v.
ALPAP, Feb. 26, 2018)

(79) Regular courts, not labor courts, have jurisdiction to rule on the constitutionality of labor contracts, such as CBA. Where principal
relief sought is to be resolved not by reference to the Labor Code or a collective bargaining agreement but by the general civil law, the
jurisdiction over the dispute belongs to the regular courts of justice and not to labor courts. (Halagueña v. PAL, Oct. 2, 2009)

(80) NLRC has no appellate jurisdiction to review on appeal cases decided by the POEA on matters pertaining to disciplinary actions
involving overseas contract workers. DOLE Secretary has jurisdiction in accordance with his power of supervision and control under
the Revised Administrative Code of 1987. (Eastern Mediterranean Maritime v. Surio, Aug. 23, 2012)

(81) An employee cannot bring grievable issues to voluntary arbitration without the participation of the bargaining union. It is the
bargaining union or agent which is party to the CBA, which contains the provision on voluntary arbitration. (Tabigue v. International Copra
Export Corporation, Dec. 23, 2009)

(82) A voluntary arbitrator can assume jurisdiction over termination disputes by agreement by parties. Voluntary arbitrators, upon
agreement of parties, may hear and decide all other labor disputes, pursuant to Article 262. (7K Corporation v. Albarico, June 26, 2013)

(83) Labor Code provision providing ten-day period to file an appeal from the Voluntary Arbitrator’s decision to the Court of Appeals
prevails over the Rule 43 of the Rules of Court providing for a fifteen-day period to file such an appeal. The Labor Code confers
substantive right, which cannot be diminished, increased, or modified by the Rules of Court. NYK-Fil Ship v. Dabu, Sept. 13, 2017)

(84) The DOLE Secretary does not assume the role of voluntary arbitrator once he assumes jurisdiction over a labor dispute. By assuming
jurisdiction over a case involving an industry imbued with public interest, the provisions of Article 264 became applicable, any representation
to the contrary or that he is deciding the case in his capacity as a voluntary arbitrator notwithstanding. (Philtranco Service Enterprises v.
Philtranco Workers Union, Feb. 26, 2014)
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(85) Labor Arbiter’s order for the reinstatement of an employee found illegally dismissed is immediately executory even during the
pendency of the employer’s appeal from the decision. The employer must reinstate the employee – either by physically admitting him under
the conditions prevailing prior to his dismissal, and paying his wages; or, at the employer’s option, merely reinstating the employee in the
payroll until the decision is reversed by the higher court. The illegally dismissed employee is not even required to apply for and the Labor
Arbiter need to issue a writ of execution to trigger the employer’s duty to reinstate.
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The employee is not required to return the wages he had received prior to the reversal of the Labor Arbiter’s decision even if a higher
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court reverses the Labor Arbiter’s decision. After the Labor Arbiter’s decision is reversed by a higher tribunal, the employer’s duty to
reinstate the dismissed employee is effectively terminated. This means that an employer is no longer obliged to keep the employee in the
actual service or in the payroll. The employee is not required to return the wages that he had received prior to the reversal of the decision.

An employee is barred from collecting the accrued wages if shown that the delay in enforcing the reinstatement pending appeal was
without fault on the part of the employer. The tests that must be satisfied are: (i) actual delay or the fact that the order of reinstatement
pending appeal was not executed prior to its reversal; and (ii) the delay must not be due to the employer’s unjustified act or omission. If the
delay is due to the employer’s unjustified refusal, the employer may still be required to pay the salaries notwithstanding the reversal of the
Labor Arbiter’s decision. (Bergonio v. South East Asian, Apr. 21, 2014)

Similar to that of the Labor Arbiter’s, the Voluntary Arbitrator’s order of reinstatement is immediately executory, regardless of the
filing of a motion for reconsideration or appeal. As the Constitution gives preference to voluntary arbitration over other dispute settlement
devices, the reinstatement order by the Voluntary Arbitrator should have the same authority, force and effect as that of the reinstatement order
by the Labor Arbiter not only to encourage parties to settle their disputes through this mode, but also to enforce the constitutional mandate to
protect labor, to provide security of tenure, and to enhance social justice. (Baronda v. Court of Appeals, Oct. 14, 2015)

(86) Guidelines in the filing and acceptance of motions to reduce appeal bond.
(a) The filing of a motion to reduce appeal bond shall be entertained by the NLRC subject to the following conditions: (i) there is meritorious
ground; and (ii) a bond in a reasonable amount is posted;
(b) For purposes of compliance with condition (a)(ii), the motion shall be accompanied by the posting of a provisional cash or surety bond
equivalent to ten percent (10%) of the monetary award subject of the appeal, exclusive of damages and attorney's fees;
(c) Compliance with the foregoing conditions shall suffice to suspend the running of the 10-day reglementary period to perfect an appeal
from the Labor Arbiter's decision to the NLRC;
(d) The NLRC retains its authority and duty to resolve the motion to reduce bond and determine the final amount of bond that shall be posted
by the appellant, still in accordance with the standards of meritorious grounds and reasonable amount; and
(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds the amount of the provisional bond, the
appellant shall be given a fresh period of ten days from notice of the NLRC order within which to perfect the appeal by posting the
required appeal bond. (Mcburnie v. Ganzon, Oct. 17, 2013)
(f) No hard and fast rule in determining whether the additional bond to be posted is reasonable in relation to the judgment award. It is up to
the NLRC. The decision to reduce the amount of appeal bond, however, is not a blanket power to the NLRC, because the discretion is
not unbridled and is subject to strict guidelines because Article 223 is a rule of jurisdiction that affords little leeway for liberal
interpretation. (Sara Lee Philippines v. Macatlang, June 4, 2014)

Submission of a Deed of Assignment and passbook in lieu of cash or surety bond is not substantial compliance on the rules on the
posting of bond. The Labor Code and the rules requires posting of only cash or surety bond to perfect the appeal. Deed of Assignment and
passbook is neither cash nor surety bond. (Mindanao Times v. Confesor, Feb. 5, 2010) For the same reason, a bank certification will not
suffice. (Quirante v. Oroport Cargo, Dec. 2, 2015) A Deed of Assignment stating that the entire amount is under the full control of the bank
and payable to the DOLE Regional Office in tandem with Letter Agreement and Cash Voucher, however, has been treated as good as cash.
(People’s Broadcasting v. Secretary of Labor, May 8, 2009)

(87) Filing of a motion for reconsideration of the decision of the DOLE Secretary, or any labor tribunal, is a pre-requisite to filing a Rule
65 petition for certiorari, even if such government agency prohibits the filing thereof. While a government office may prohibit altogether
the filing of a motion for reconsideration with respect to its decisions or orders, the fact remains that certiorari inherently requires the filing of
a motion for reconsideration, which is the tangible representation of the opportunity given to the office to correct itself. Unless it is filed, there
could be no occasion to rectify. (Philtranco Service Enterprises v. Philtranco Workers Union, Feb. 26, 2014)

By: Atty. Ronel U. Buenaventura αφß2006A, 10th Place 2015 Bar. May the GAOTU bless you.

-o0o-