Labor Law II
- (f)
[Quan]
Right to Self-
Organization
Concept and Scope
Article 253, Labor Code. 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:
(1) to self-organization and
(2) 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
Article 257, Labor Code. Non-Abridgment of
Right to Self-Organization. - It shall be unlawful for
any person to restrain, coerce, discriminate against
or unduly interfere with the 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 B.P.
Blg. 70, May 1, 1980).
Article 292 (c), Labor Code. Miscellaneous
Provisions. - (c) Any employee, whether employed
for a definite period or not, shall, beginning on his
first day of service, be considered as an employee
for purposes of membership in any labor union. (As
amended by Sec. 33, Rep. Act No. 6715).
Article 219 (e), Labor Code. Definitions. - (e)
“Employer” includes any person acting in the
interest of an employer, directly or indirectly. The
term shall not include any labor organization or any
of its officers or agents except when acting as
employer.
Article 219 (f), Labor Code. Definitions.
“Employee” includes any person in the employ of
an employer. The term shall not be limited to the
employees of a particular employer, unless the
Code so explicitly states. It shall include any
individual whose work has ceased as a result of or
in connection with any current labor dispute or
because of any unfair labor practice if he has not
obtained any other substantially equivalent and
regular employment.
S.S. Ventures International v. S.S.
Ventures Labor Union, July 23, 2008
SS Ventures Labor Union filed a petition for
certification election in behalf of the rank and file
employees of Ventures which the latter petitioned to
be cancelled on the ground that the Union
deliberately included the names of 82 employees no
longer connected with Ventures in its list of members
who attended the organizational meeting and in the
adoption.ratification of its Constitution and By-Laws.
SC ruled that the right to form, join or assist a union
is specifically protected by Article XIII, Section 3 of
the Constitution, and such right according to Article
III, Section 8 of the Constitution and Article 246 of the
Labor Code shall not be abridged. Once registered
with the DOLE, a union is considered a legitimate
labor organization endowed with the right and
privileges granted by law to such organization.
While a certificate of registration confers a union with
legitimacy with the concomitant right to participate in
or ask for certification election in a bargaining unit,
the registration may be canceled or the union may be
decertified as the bargaining unit, in which case the
union is divested of the status of a legitimate labor
organization. Among the grounds for cancellation is
the commission of any of the acts enumerated in Art.
239(a) of the Labor Code, such as fraud and
misrepresentation in connection with the adoption or
ratification of the union’s constitution and like
documents. The relevancy of the 82 individual's’
active participation in the Union’s organizational
meeting and the signing ceremonies thereafter
comes in only for purposes of determining whether or
not the Union, even without the 82, would still meet
what Art. 234(c) of the Labor Code requires to be
submitted.
NUWHRAIN-Manila Pavilion Hotel
Chapter v. Secretary, July 31, 2009
A certification election was conducted among the
rank and file employees of Holiday Inn Manila. 11
votes were initially segregated because they were
cast by dismissed employees, and thereafter, 6 other
votes were segregated because the employees who
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cast them were already occupying supervisory
positions. Another five other votes were segregated
on the ground that they were cast by the
probationary employees and that based on the CBA,
such employees cannot vote. On appeal to the SOLE,
NUHWRAIN argued that the votes of the probationary
employees should have been opened considering
that a probationary employee’s vote was tallied, and
that HIMPHLU should not be immediately certified as
the bargaining agent as the votes it garnered would
be one less than the majority if the 17 segregated
votes would be opened. SOLE ruled that even if 17
votes were counted, it would not overturn the votes
garnered by HIMPHLU. CA affirmed.
The inclusion of the probationary employees vote was
proper because probationary employees have the
right to vote in the certification election. The votes of
the 6 other probationary employees should also be
counted. In a certification election, all rank and file
employees, whether probationary or permanent, are
entitled to vote which principle is stated in Article
255. Hence, all rank and file have a substantial
interest in the selection of the bargaining
representative as the Code makes no distinction as to
their employment status as basis for eligibility in
supporting the petition for certification election. All
the employees need to be eligible is to belong to a
bargaining unit.
Samahan ng Manggagawa sa Hanjin
Shipyard v. BLR, October 14, 2015
SAMAHAN filed an application for registration of the
name “Samahan ng Mga Manggagawa sa Hanjin
Shipyard” with the DOLE, but Hanjin filed a petition
praying for the cancellation of registration of
SAMAHAN’s association on the ground that its
members did not fall under any of the types of
workers enumerated in the second sentence of Article
243. Hanjin filed a supplemental petition, adding that
the alternative ground that SAMAHAN committed
misrepresentation in connection with the list of
members and/or voters who took part in the
ratification of their constitution and by-laws in its
application for registration. DOLE Regional Director
and CA ruled to cancel.
In the case at bench, the Court cannot sanction the
opinion of the CA that Samahan should have formed
a union for purposes of collective bargaining instead
of a worker’s association because the choice
belonged to it. The right to form or join a labor
organization necessarily includes the right to refuse
or refrain from exercising the said right. It is self-
evident that just as no one should be denied the
exercise of a right granted by law, so also, no one
should be compelled to exercise such a conferred
right. Also inherent in the right to self-organization is
the right to choose whether to form a union for
purposes of collective bargaining or a workers’
association for purposes of providing mutual aid and
protection. There is no provision in the Labor Code
that states that employees with definite employers
may form, join or assist unions only.
NOTE: Labor unions are labor organizations but not
all labor organizations are unions. Employer-
employee relationship is not needed to form a
worker’s association.
Atlas Lithographic Services v.
Laguesma, January 6, 1992
KAMPIL-KATIPUNAN filed, on behalf of the supervisor’s
union, a petition for certification election for it to be
the sole and exclusive bargaining agent of the
supervisory employees. ALSI opposed on the ground
that the former cannot represent the supervisory
employees for CBA purposes because it also
represents the rank and file employees’ union.
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. It is construed to mean that supervisors
shall not be given an occasion to bargain together
with the rank and file against the interests of the
employer regarding the terms and conditions of work.
The Adamson v CIR case relied upon by KAMPIL is
inapplicable because in this case, the rank and file
employees are directly under the supervisors
organized by the same federation and said local
union is actively represented by the national
federation.
Labor Organizations and
Registration of Unions
Article 219 (g), Labor Code. LABOR
ORGANIZATION - means any union or association of
employees which exists in whole or in part for the
purpose of collective bargaining or of dealing with
employers concerning terms and conditions of
employment.
Article 219 (h), Labor Code. LEGITIMATE LABOR
ORGANIZATION - means any labor organization
duly registered with the DOLE, and includes any
branch or local thereof.
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Article 237, Labor Code. Registry of Unions and
File of Collective Bargaining Agreements. - The
Bureau shall keep a registry of legitimate labor
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 not 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 requires.
Within 30 days from the execution of a Collective
Bargaining Agreement, the parties shall submit
copies of the same directly to the Bureau or the
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 CBA within 5
calendar days from receipt thereof. The Regional
Offices shall furnish the Bureau with a copy of the
CBA within 5 days from its submission.
The Bureau or Regional Office shall assess the
employer for every CBA 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 assists in the publication of all final
decisions, order and wards of the Secretary of
Labor and Employment, Regional Directors, and the
Commission. (As amended by Sec. 15, Rep. Act.
No. 6715, March 21, 1989).
Article 240, Labor Code. Requirements of
Registration —A federation, national union or
industry or trade union center or an independent
union shall::
(1) acquire legal personality and
(2) 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 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 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) 4 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.
Article 241, Labor Code. Chartering and
Creation of a Local Chapter — A duly registered
federation or national union may directly create a
LOCAL CHAPTER by issuing a charter certificate
indicating the establishment of the local chapter.
The chapter shall:
(1) acquire legal personality ONLY for
purposes of filing a petition for certification
election FROM the date it was issued a
charter certificate.
(2) be entitled to all other rights and
privileges of a legitimate labor organization
ONLY upon the submission of the following
documents IN ADDITION to its charter
certificate:
(a) The names of the chapter's
officers, their addresses, and the
principal office of the chapter; and
(b) The chapter's constitution and
by-laws: PROVIDED, That
where the chapter's constitution
and by-laws are the SAME as that
of the federation or the national
union, this fact shall be indicated
accordingly.
The additional supporting requirements
shall be certified under oath by the
secretary or treasurer of the chapter AND
attested by its president
Tagaytay Highlands vs. Tagaytay
Highlands Employees Union, January 22,
2003
The Union filed a petition for certification election
before the DOLE Med Arbiter who gave due course to
the petition as the Union is a legitimate labor
federation and its local chapter was duly reported to
DOLE as one of its affiliate locals/chapters. After a
certificate of registration is issued to a union, its legal
personality cannot be subject to collateral attack. It
may be questioned only in an independent petition
for cancellation in accordance with Section 5 of Rule
V, Book IV of the "Rules to Implement the Labor
Code. The inclusion in a union of disqualified
employees is not among the grounds for cancellation,
unless such inclusion is due to misrepresentation,
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false statement or fraud under the circumstances
enumerated in Sections (a) and (c) of Article 239 of
above-quoted Article 239 of the Labor Code.
SMCEU-PTGWO vs. SMPPEU-PDMP,
September 12, 2007
SMC Employees Union is the incumbent bargaining
agent for the regular monthly paid rank and file
employees of the three divisions of SMC for over 20
years. SMC Packaging was registered as a chapter of
the PDMP which issued the former’s charter
certificate. Upon submission of its charter certificate
and other documents, SMC Packaging was issued by
BLR a certificate of creation of local or chapter. SMC
then filed a petition to cancel SMC Packaging’s
registration as it was not a legitimate labor
organization but a trade union center.
The procedure for registration of a local or chapter of
a labor organization is provided in
the Implementing Rules, which enunciates a two-fold
procedure for the creation of a chapter or a local. The
first involves the affiliation of an independent union
with a federation or national union or industry union.
The second involves the direct creation of a local or a
chapter through the process of chartering. In the case
at bar, the Union was not a legitimate labor
organization, having been created via chartering by
PDMP which is a trade union center. The PDMP failed
to comply with the registration requirements to
become a local or chapter. Although PDMP as a trade
union center is a legitimate labor organization, it has
no power to directly create a local or chapter, such as
RESPONDENT. Thus, RESPONDENT cannot be created
under the more lenient requirements for chartering,
but must have complied with the more stringent rules
for creation and registration of an independent union,
including the 20% membership requirement.
Heritage Hotel Manila vs. Piglas-
Heritage, October 30, 2009
HHE filed a petition for certification election which
Heritage Hotel opposed on the ground that HHE
misrepresented itself to be an independent union
when it was actually a local chapter of NUWHRAIN.
Another union, PIGLAS, was formed by rank and file
employees and filed a petition for certification
election, while HHE filed a petition for cancellation of
its own union registration. Heritage Hotel opposed
PIGLAS’ petition on the ground that the new union
members were also those that comprised the old
union so its establishment was a circumvention of the
earlier injunction issued by CA. DOLE denied Heritage
Hotel’s petition to cancel registration because the
discrepancies in the number of members in the
application’s supporting documents were not material
and did not constitute misrepresentation, and that
dual unionism is not a ground for cancelling
registration.
The discrepancies cannot be taken as an indication
that PIGLAS misrepresented the information
contained in the documents submitted. Charges of
fraud should be clearly established by evidence and
surrounding circumstances because once it is proved,
the labor union requires none of the rights accorded
to registered organizations. The Labor Code and
implementing rules do not require that the number of
members appearing on the documents should
completely dovetail. For as long as the documents
and signatures are shown to be genuine and regular
an the constitution and by-laws are ratified, the union
is deemed to have complied with registration
requirements.
Eagle Ridge Golf and Country Club v.
CA, March 18, 2010
Eagle Ridge Employees Union filed a petition for
certification election which Eagle Ridge opposed as
there was a discrepancy in its declaration that it has
30 members when it only had 26 members on the
organizational meeting. The Union contends that the
discrepancies are not real as 4 additional members
did join the union 2 days after the organizational
meeting. When the Union applied for registration,
there were 30 employees so it complied with the 20%
membership requirement under Article 234(c). 20%
of 112 rank and file employees in Eagle Ridge would
require a union membership of at least 22
employees, thus when the certification of registration
was granted, the Union had complied with said
requirement. Furthermore, the admission of new
members is neither prohibited by law nor was it
concealed in its application for registration.
SMCC-SUPER v. Charter Chemical and
Coating Corp., March 16, 2011
The union filed a petition for certification election
among the regular rank and file employees of Charter
Chemical. A motion to dismiss was filed by
respondent on the ground that petitioner is not a
legitimate labor organization. The Supreme Court
ruled that the failure to certify under oath the local
chapter certificate issued by the mother federation
and the list of the members who attended the
organizational meeting is not a ground for the
cancellation of the union’s legal personality. The SC
said that the charter certificate is prepared and
issued by the national union and not the local
chapter, thus is will not make sense to have the local
chapter’s officers certify or attest to a document
which they had no hand in the preparation. It valid
acquired the status of a legitimate labor organization
upon submission of its charter certificate, the names
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of its officers, their address, and its principal office,
and its constitution and by-laws. Regarding the
alleged mixture, the SC said that while there is a
prohibition against mingling of supervisory and rank
and file employees in one labor organization, the
Labor Code does not provide for the effects thereof.
Yokohama Tire Phils. v. Yokohama
Employees Union, March 10, 2010
The union filed a petition for certification election.
YTPI filed for the revocation of the union’s
registration. It was alleged that the union fraudulently
included the signature of a certain Pineda in the
organizational documents and that the union
fraudulently obtained the employees signatures by
making them believe that they were signing a
petition for a 125% increase in the minimum wage.
The SC said that the union did not commit fraud or
misrepresentation for failing to remove Pineda’s
name as the Court gave greater credence to Pineda’s
handwritten statement wherein he made references
to at least 2 meetings he had attended during which
he had signed the organizational documents. YTPI,
being the one which filed the petition, had the burden
of proving that the union committed fraud and
misrepresentation.
Takata Philippines v. BLR and SALAMAT,
June 4, 2014
Takata filed a petition for cancellation of certificate of
union registration of SALAMAT on the ground that it
was guilty of misrepresentation, false statements and
fraud with respect to the number of those who
participated in the organizational meeting. Only 68
attendees signed the attendance sheet of SALAMAT’s
organizational meeting which only comprised 17% of
the total number of the rank and file employees
whom SALAMAt sought to represent, as such it was
alleged that it failed to comply with the 20%
minimum membership requirement.
SALAMAT’s registration should not be cancelled on
the grounds of fraud and misrepresentation. Article
234 of the Labor Code provides for the requirements
of registration and it does not appear from said
provision that the attendees in the organizational
meeting must comprise 20% of the employees in the
bargaining unit. The 20% requirement pertains to the
employees’ membership in the union, and not in the
list of workers who participated in the organizational
meeting. Here, the total number of employees in the
bargaining unit was 396 and 20% of which was about
79 -- SALAMAt, in the document it submitted, showed
the names of 119 employees as union members thus
complying with the requirement. Furthermore, for
fraud and misrepresentation to be grounds for
cancellation of union registration under Article 239,
the nature of such fraud and misrepresentation must
be grave as to vitiate the consent of a majority of
union members.
Eligibility for Memberships;
Special Groups of Employees
Article 255, Labor Code. 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)
Article 219 (m), Labor Code.
MANAGERIAL EMPLOYEE - is one who is vested with
the powers or prerogatives to lay down and
execute management policies and/or to hire,
transfer, suspend, lay-off, recall, discharge, assign
or discipline employees.
SUPERVISORY EMPLOYEES - are those who (in the
interest of the employer) effectively recommend
such managerial actions if the exercise of such
authority is NOT merely routinary or clerical in
nature BUT requires the use of independent
judgment.
All employees NOT falling within any of the above
definitions are considered RANK-AND-FILE
EMPLOYEES for purposes of this Book.
Article 256, Labor Code. Effect of Inclusion as
Members of Employees Outside the Bargaining
Unit. - The inclusion as union members of
employees outside the bargaining unit shall not be
a ground for the cancellation of the registration of
the union. Said employees are automatically
deemed removed from the list of membership of
said union.
Section 1 (hh), Omnibus Rules, Book V, Rule 1
(as amended by DO 40). MANAGERIAL
EMPLOYEE - refers to an employee who is vested
with powers or prerogatives to lay down and
execute management policies or to hire, transfer,
suspend, layoff, recall, discharge, assign or
discipline employees.
Section 1 (xx), Omnibus Rules, Book V, Rule 1
(as amended by DO 40). SUPERVISORY
EMPLOYEE - refers to an employee who (in the
interest of the employer) effectively recommends
managerial actions, and the exercise of such
authority is NOT merely routinary or clerical BUT
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requires the use of independent judgment.
Section 1 (nn), Omnibus Rules, Book V, Rule 1
(as amended by DO 40). RANK-AND-FILE
EMPLOYEE - refers to an employee whose functions
are neither managerial nor supervisory in nature.
Cathay Pacific Steel Corp. v. CA, August
30, 2006
CAPASCO hired Tamondong as Assistant to the
Personnel Manager of its Cainta plant and was later
promoted as Personnel Superintendent. The
supervisory personnel of CAPASCO later formed a
union known as CUSE. Tamondong joined and later
elected as an officer. CAPASCO sent a memo to him
requiring him to discontinue his activities in the
union. However, Tamondong did not listen and thus
was later terminated. CAPASCO contended that he is
considered as a managerial employee. The SC
however ruled that he is not a managerial employee.
Tamondong was not at liberty to lay down and
execute major business and operational policies for
and in behalf of CAPASCO. He does not have the
power to hire, transfer, terminate, or discipline erring
employees of the company. According to the Court,
Tamondong is a supervisory employee. Supervisory
employees are those who effectively recommend
such managerial actions, if the exercise of such
authority is not merely routinary or clerical in nature
but requires the use of independent judgment.
De La Salle University Medical Center v.
Laguesma, August 12, 1999
FFW granted a certification to FFW-DLSUMCCMSUC
recognizing it as its local chapter and also filed on
behalf of the latter, a petition for certification
election. DLSU opposed as it alleged that some of
the employees who signed the petition were
managerial employees and that FFW-DLSUMCCMSUC
was comprised of both rank and file and supervisory
employees. The SC ruled that unions formed
independently by supervisory and rank and file
employees of a company may validly affilitate with
the same federation. The exception is when, as in
Atlas Lithographic v. Laguesma, the rank and file
employees are under the authority of the supervising
employee and the national federation is actively
involved in the union activities of the company. In this
case, although FFW showed active involvement in the
union activities of the company through the filing of
the petition for certification election, DLSU failed to
show that the rank and file employees are under the
authority of the supervisory employees.
Pepsi Cola Products v. Secretary of
Labor, August 10, 1999
The Union filed a petition for certification election to
be the exclusive bargaining agent of the supervisors
of PEPSI which was granted. PEPSI filed a petition to
set aside and revoke charter of the Union as a
supervisor’s union cannot affiliate with a federation
whose members include rank and file employees of
the same company, and that confidential employees
cannot join the labor union of the rank and file.
Although confidential employees are not explicitly
disqualified or mentioned in the Labor Code from
joining or forming any labor organization, the SC
applied the doctrine of necessary implication that
“while Article 245 singles out managerial employees
as ineligible to join, assist, or form andy labor
organization, under the doctrine of necessary
implication, confidential employees are similarly
disqualified”. Route Managers, Chief Checkers and
Warehouse Operations Managers are supervisors,
while Credit and Collection and Accounting Managers
are highly confidential employees. The mere fact that
an employee is designated “manager” does not make
him one.
San Miguel Corp. Supervisors and
Exempt Union v. Laguesma, August 15,
1997
The union filed a petition for certification election
among supervisory and exempt employees of SMC
Magnolia Poultry plants of Cabuyao, San Fernando,
and Otis. The Med-Arbiter granted this and ordered
the conduct of certification among the supervisory
and exempt employees of the 3 plants as one
bargaining unit. SMC Magnolia Poultry said it was an
error for the Med-Arbiter to group the 3 plants. In
addition, there were supervisory levels 3 and above
employees whose positions are confidential who were
included.
The SC said that the supervisory levels 3 and above
employees and the exempt employees are not
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 confidential relationship must exist
between the employees and his supervisor’’). An
important element of the confidential employee rule
is the employees need to use labor relations
information. Thus, in determining the confidentiality
of certain employees, a key question frequently
considered is the employees necessary access to
confidential labor relations information. Access to
confidential information does not in itself render an
employee a confidential employee. The information
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must relate to the employers labor relations policies.
An employee must have access to confidential labor
relations information with respect to the employer,
the union, or the association, to be regarded as a
confidential employee.
SCBEU-NUBE v. Standard Chartered
Bank, April 22, 2008
The bank and the union negotiated for a new CBA but
due to a deadlock, the union filed a notice of strike.
The CBA provisions in dispute are the exclusion of
certain employees from the appropriate bargaining
unit and the adjustment of remuneration for
employees serving in an acting capacity. The union
sought to exclude all managers who are vested with
the right to hire and employees and confidential
employees, Chief Cashiers, Assistant Cashiers,
personnel of Telefax department and HR staff. The SC
held that the disqualification of managerial and
confidential employees from joining a bargaining unit
for rank and file is already well-entrenched in
jurisprudence. As regard the qualification of bank
cashiers as confidential employees, NATU v Torres
already declared that they are confidential
employees. Golden Farms v Ferrer-Calleja also stated
that radio and telegraph operators and accounting
personnel are likewise confidential employees and in
Philipps Industrial Development v NLRC, personnel
staff in which HR staff may be qualified are
confidential employees.
Coastal Subic Bay Terminal v. DOLE,
November 20, 2006
The rank and file union and the supervisory union
filed separate petitions for certification election
insisting that they are legitimate because ALU and
APSOTEU have issued them certificates of charter
respectively. However, Coastal Subic Bay opposed
alleging that the said unions are not legitimate labor
organizations. The Med-Arbiter ruled that ALU and
APOSTEU are one and the same federation having a
common set of officers thus the two unions were in
fact affiliated with only one federation. DOLE
Secretary reversed as both unions have separate
legal personalities. Coasta Bay contends further that
APOSTEU is not properly registered as it secured
registration from DOLE Regional Director (not BLR)
thus the supervisory union cannot attain the status of
a legitimate labor organization.
APOSTEU did not improperly secure registration from
DOLE Regional Director as DO 40-03 provides that
“applications for registration of labor organizations
shall be filed either with the Regional Office or with
the BLR”. Being legitimate, they have the authority to
issue a local charter certificate to the supervisory
union. As to the issue of commingling between ALU
and APOSTEU, both federations have a common set
of officers and actively participate in each other’s
affairs giving rise to possible conflict of interest. As
long as they are affiliated with each other, the unions
do not meet the criteria to attain the status of
legitimate labor organizations and cannot separately
petition for certification election.
NOTE: Does the federation always actively
participate in an enterprise level? NO. The prohibition
applies to supervisor’s union applying for
membership in a national federation the members of
which include local unions of rank and file employees.
For said prohibition to apply, it is not enough that the
supervisory union and rank and file union are
affiliated with a single federation. The supervisors
must have direct authority over the rank and file
employees.
A chartered local union acquires legal personality
once issued a charter certificate by a duly registered
national union or federation. A local union does not
owe its existence to the federation it is affiliated with
as this only gives rise to a contract of agency
whereby the federation is the agent and the local
union is the principal.
Tunay na Pagkakaisa ng Manggagawa sa
Asia Brewery v. Asia Brewery, August 3,
2010
Asia Brewery entered into a CBA with BLMA, the
bargaining representative of the rank and file
employees of ABI. A dispute arose when ABI
management stopped deducting union dues from the
81 employees believing that their membership in
BLMA violated the CBA as 18 of them were QA
Sampling Inspectors, 20 are checkers and the rest are
secretaries. The SC ruled that the 81 employees may
not be excluded from the bargaining unit as ABI failed
to indicate who among the secretaries and clerks had
access to confidential data relating to management
policies and thus are not confidential employees.
With respect to the Sampling Inspectors and Gauge
Machine Technician, they also perform routine and
mechanical tasks preparatory to the delivery of
finished products. While it may be argued that the
quality control extends to the post production phase,
no evidence was presented to prove that these daily
paid checkers actually form part of the Quality
Control Staff who are exposed to confidential
information about the products. Hence, the 20
checkers may not be considered confidential
employees under Quality Control Staff.
7
San Miguel Foods v. SMC Supervisors
and Exempt Union, August 1, 2011
This case is in relation to SMC Supervisors and
Exempt Union v Laguesma wherein the court held
that supervisory employees 3 and 4 and exempt
employees are not to be considered confidential
employees because the same do not not pertain to
labor relations and negotiation and settlement of
grievances so they are allowed to form a bargaining
unit. SMC filed an objection to the petition for
certification election because certain employees,
such as Payroll Master, HR Assistant and Personnel
Assistant, are confidential employees.
Confidential employees are those entrusted with
confidential on delicate or with the custody, handling
or care and protection of the employer’s property.
The criteria to be a confidential employee (1. Assist
or act in a confidential capacity; 2. To persons who
formulate, determine and effectuate management
policies in the field of labor relations) must be met to
be considered one. Accounting personnel is a
confidential employee but such does not apply to a
Payroll master since the nature of his work does not
pertain to company rules and regulations.
Furthermore, the positions of HR Assistant and
Personnel Assistant belong to the category of
confidential employees and thus excluded from the
bargaining unit.
Heritage Hotel v. Secretary, July 23,
2014
NUWHRAIN filed a petition for certification election
seeking to represent the supervisory employees of
Heritage Hotel but the latter filed a petition for
cancellation of certification election on the ground
that membership of NUWHRAIN consisted of
managerial, confidential and rank and file employees
so they had no legal right to file a petition for
certification election pursuant to Toyota Motors v
Toyota Motor Union. Mixed membership is not a
ground for cancelling the union registration, except
when such was done through misrepresentation, false
representation or fraud under the circumstances laid
out in Article 239. Among the amendments of DO 9
was the removal of the requirement of indicating in
the petition for certification election that there was no
co-mingling of rank and file and supervisory
employees in the membership of the labor union
which was prevailing during the pronouncement of
Tagaytay Highlands (mixed membership has no
bearing on legitimacy of registered labor organization
unless the same falls under Article 239). Presently,
mixed membership does not result in the illegitimacy
of the registered union unless the same is due to
Article 239.
Manila Electric Company v. Secretary of
Labor and Employment, May 20, 1991
The union in MERALCO filed a PCE, seeking to
represent the employees. MERALCO opposed saying
that security guards personnel are prohibited from
joining or assisting rank-and-file empees. The Court
ruled that the Implementing Rules of the Labor Code
which sought to disqualify security guards from those
joining labor organizations is null and void, for being
not germane to the object and purposes of the Labor
Code. Under RA 6715, security guards are now
allowed to join labor organizations of the rank-and-file
employees or supervisory employees depending on
their rank.
Benguet Electric Cooperative v. Ferrer-
Calleja, Dec. 29, 1989
BWLU-ADLO filed a petition for certification election
as the exclusive bargaining unit of the rank and file
employees of BENECO, which was opposed by BELU
as it contended that it was certified as the exclusive
bargaining unit of the rank and file employees of
BENECO. BENECO filed a MTD claiming that the
employees sought to be represented by BWLU-ADLO
are not eligible to form, join or assist labor
organizations because they are members and joint
owners of the cooperative. The SC held that the right
to collective bargaining is not available to an
employee of a cooperative who at the same time is a
member and co-owner. With respect to employees
who are neither members or owners of the
cooperative, they are entitled to the rights of self-
organization and collective bargaining. The fact that
the member employees of BENECO do not participate
in the actual management of the cooperative does
not make them eligible to form, assist, or join a labor
organization for the purpose of collective bargaining.
It is the fact of ownership of the cooperative and not
involvement in the management which disqualifies a
member from joining any labor organization in the
cooperative. A cooperative’s owners and members
are the ones who run and operate the business while
the others are its employees.
Kapatiran sa Meat and Canning Division
v. Ferrer-Calleja, June 20, 1988
TUPAS was the sole and exclusive bargaining
representative of the workers in MCD-URC. It filed an
amended notice of strike as a means of pressuring
the company to extend or renegotiate a CBA.
Thereafter, NEW ULO, composed or workers
belonging to INC, registered as a labor union, filed a
petition for certification election at the BLR claiming
that it has the majority of the daily wage rank and file
employees. TUPAS moved to dismiss the petition for
being defective in form and that the members of the
8
NEW ULO were mostly members of the Iglesia ni
Kristo sect which three (3) years previous refused to
affiliate with any labor union. It also accused the
company of using the NEW ULO to defeat TUPAS’
bargaining rights. The right of the members of a
religious sect not to join a labor union for being
contrary to their religious beliefs, does not bar the
members of that sect from forming their own union.
The fact that TUPAS was able to negotiate a new CBA
with ROBINA within the 60-day freedom period of the
existing CBA, does not foreclose the right of the rival
union, NEW ULO, to challenge TUPAS’ claim to
majority status, by filing a timely petition for
certification election on October 13, 1987 before
TUPAS’ old CBA expired on November 15, 1987 and
before it signed a new CBA with the company on
December 3, 1987. This is because a certification
election is the best forum in ascertaining the majority
status of the contending unions wherein the workers
themselves can freely choose their bargaining
representative thru secret ballot.
Acosta v. CA, June 28, 2000
Petitioners are teachers from different public schools
in Metro Manila who, on various dates in September
and October 1990, participated in mass actions by
public school teachers at the Liwasang Bonifacio for
the purpose of petitioning the government for redress
of their grievances. They refused to comply with the
“return to work order” issued by the Secretary of
DECS so they were administratively charged with
misconduct. Furthermore, they contend that their
participation in the mass actions was an exercise of
their constitutional rights to peaceably assemble and
petition the government for redress of grievances and
that they never went on strike because they never
sought to secure changes or modification of the
terms and conditions of their employment.
The ability to strike is not essential to the right of
association. In the absence of statute,
public employees do not have the right to engage in
concerted work stoppages for any purpose. The
“mass actions” in which the petitioners participated
were, for all intents and purposes, a strike as they
constituted a concerted and unauthorized stoppage
of, or absence from work which it was the teachers’
sworn duty to perform, undertaken for essentially
economic reasons. What is being penalized is the
manner in which petitioners exercised their right to
assemble which suspended public service and classes
in public schools in Metro Manila, no matter how
temporary, effectively derailing services to the public,
which is one of the reasons why the right to strike is
denied of government employees. While they may
have valid grievances and noble intentions in staging
the “mass action”, it does not justify their absences
to the prejudice of innocent school children nor does
it legalize an illegal work stoppage.
International Catholic Migration
Commission v. Ferrer-Calleja, Sept. 28,
1990
The unions of ICMC and IRRI (both international
organizations/special agencies recognized by PH)
filed separate petitions for certificate election. ICMC
and IRRI contend that the unions cannot file petitions
for certification election because ICMC and IRRI are
international organizations which have diplomatic
immunities. The SC ruled in ICMC and IRRI’s favor.
There are laws which provide that the said
international organizations enjoy diplomatic
immunities from legal processes in the PH. The grant
of immunity from local jurisdiction to ICMC and IRRI is
clearly necessitated by their international character
and respective purposes. The objective is to avoid the
danger of partiality and interference by the host
country in their internal workings. The exercise of
jurisdiction by the DOLE in these instances would
defeat the very purpose of immunity, which is to
shield the affairs of international organizations, in
accordance with international practice, from political
pressure or control by the host country to the
prejudice of member States of the organization, and
to ensure the unhampered performance of their
functions. However, their immunity from local
jurisdiction does not deprive labor of its basic rights,
as guaranteed by the Constitution. A UN Convention
requires such international organizations to make
provision for appropriate modes of settlement of
disputes arising out of contracts or other disputes of
private character to which the specialized agency is a
party. Moreover, pursuant to the MoA between ICMC
and the PH Government, whenever there is any
abuse of privilege by ICMC, the Government is free to
withdraw the privileges and immunities accorded.
Republic Planters Bank General Services
Employees Union National Association
of Trade Unions v. Laguesma, Nov. 21,
1996
The petitioner union filed a petition for certification
election to determine the sole and exclusive
bargaining representative of all regular employees
outside the bargaining unit of Republic Planters Bank.
The proposed bargaining unit is composed of clerks,
messengers, janitors, plumbers, telex operators,
mailing and printing personnel, drivers, mechanics
and computer personnel. Allegedly, these are regular
employees but are considered as contractual
employees by private respondent. This was opposed
to by the private respondent because the union is
comprised of some 30 employees of Superior
9
Maintenance Services Inc (SMSI) who are assigned to
the bank under a Contract of Services and there is
already a bargaining unit represented by RBEU.
If the union members are not employees, no right to
organize for purposes of bargaining, nor to be
certified as bargaining agent can be recognized.
Since the persons involved are not employees of the
company, they are not entitled to the constitutional
right to join or form a labor organization for purposes
of collective bargaining. As to the certification
election, no petition for certification election may be
entertained if filed outside the 60-day period
immediately before the expiration of the collective
bargaining agreement. The purpose of the prohibition
against the filing of a petition for certification election
outside the so-called freedom period is to ensure
industrial peace between the employer and its
employees during the existence of the CBA. In the
case at bar, the petition for certification election was
filed on January 21, 1991. The collective bargaining
agreement between the duly certified bargaining
agent, Republic Planters Bank Employees Union, and
private respondent was effective from June 30, 1988
to June 30, 1991. It is crystal clear that the filing of
the petition for certification election was premature.
Union Security Clause
Article 259 (e), Labor Code. Unfair labor
practices of employers. It shall be unlawful for an
employer to commit any of the following unfair
labor practice:
xxx
(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;
Union Security, defined
Union security is a generic term for any form of
agreement which imposes upon employees the
obligation to acquire or retain union membership as a
condition affecting employment. The purpose of a
union shop or other union security arrangement is to
guarantee the continued existence of the union
through enforced membership for the benefit of the
workers.
Kinds of Union Security Clause
1. Union shop → all new regular employees are
required to join the union within a certain
period for their continued employment
2. Maintenance of Membership Shop →
employees, who are union members 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.
3. Closed Shop → 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
BPI v. BPI Employees Union, August 10,
2010
The union is the exclusive bargaining agent of the
rank and file employees. FEBTC rank and file
employees, before the merger between BPI and
FEBTC, did not belong to any union. Said Union
invited the FEBTC employees to a meeting, before the
merger, regarding the union shop clause, which in
Section 2 provides that “new employees falling within
the bargaining unit as defined in Article I of this
Agreement, who may hereafter be regularly
employed by the Bank shall, within thirty (30) days
after they become regular employees, join the Union
as a condition of their continued employment. It is
understood that membership in good standing in the
Union is a condition of their continued employment
with the Bank”. Pursuant to merger, FEBTC’s
employees were hired by BPI. The union sent notices
of hearing to the former FEBTC employees who
refused to join and requested BPI to implement the
union security clause to terminate the employment of
such once they refused to attend the hearing. Med-
Arbiter ruled that the FEBTC employees were not
covered by the union security clause since the new
employees who were hired and subsequently
regularized, but were absorbed employees by
operation of law because the former employees of
FEBTC can be considered assets and liabilities of the
absorbed corporation.
10
Non-compliance with a union security clause is a valid
ground for an employee’s dismissal, but
jurisprudence dictates that such a dismissal must still
be done in accordance with due process. There is
nothing in the said provision which requires that a
new regular employee first undergo a temporary or
probationary status before being deemed as such
under the union shop clause of the CBA. All
employees in the bargaining unit covered by a Union
Shop Clause in their CBA with management are
subject to its terms. However, under law and
jurisprudence, the following kinds of employees are
exempted from its coverage:
1. Employees who at the time the union shop
agreement takes effect are bona fide
members of a religious organization which
prohibits its members from joining labor
unions on religious grounds;
2. Employees already in the service and already
members of a union other than the majority
at the time the union shop agreement took
effect;
3. Confidential employees who are excluded
from the rank and file bargaining unit
employees excluded from the union shop by
express terms of the agreement
General Milling Corp. v. Casio, March 10,
2010
IBM Union entered into a CBA with GMC. Under
Section 3 of the CBA, each member should be of good
standing as a condition for his employment or
continued employment. A letter was sent to
respondents charging them with acts inimical to the
interest of the union. Respondents refused to
acknowledge this letter and later ordered the
expulsion of the respondents from the union.
Pressured by the threatened filing of unfair labor
practice, GMC terminated the employment of
respondents through a memorandum. Thus,
respondents filed a notice of strike and later filed for
illegal dismissal. The SC said the dismissal was
procedurally infirmed and thus not valid.
In terminating the employment of an employee by
enforcing the union security clause, the employer
needs only to determine and prove that: (1) the union
security clause is applicable; (2) the union is
requesting for the enforcement of the union security
provision in the CBA; and (3) there is sufficient
evidence to support the decision of the union to expel
the employee from the union. In this case however,
the termination letter made no mention at all of the
evidence supporting the decision to expel
respondents from the union. GMC never alleged nor
attempted to prove that the company actually looked
into the evidence of the of IBM-Local 31 for expelling
respondents. Respondents further did not receive any
other communication from GMC except the first
written notice of termination.
PICOP Resources, Inc. v. Tañeca, August
9, 2010
PRI has a CBA with its collective bargaining agent for
the rank and file employees, NAMAPRI-SPFL.
Contained in their CBA was a union security clause
wherein all employees must be members of the union
at the time of the signing of CBA as a condition for
their continued employment with the company. Later,
Atty. Fuentes sent a letter to the management of PRI
demanding the termination of employees who
allegedly campaigned for, supported, and signed the
Petition for Certification Election of the Federation of
Free Workers Union (FFW) during the effectivity of the
CBA. A memorandum was issued addressed to the
concerned employees requiring them to explain in
writing why their employment should not be
terminated. A number of employees sent their written
explanation while others did not. After evaluation,
Atty. Fuentes advised the management of PRI that the
union found the explanations to be unsatisfactory and
thus ordered for their termination. Respondents then
accused PRI of Unfair Labor Practice claiming their
acts to not be acts of disloyalty.
The SC said that in terminating the employment of an
employee by forcing the union security clause, the
employer needs to determine and prove that: (1) the
union security clause is applicable; (2) the union is
requesting for the enforcement of the union security
provision in the CBA; and (3) there is sufficient
evidence to support the decision of the union to expel
the employee from the union. In this case however,
the third requisite is lacking. The mere signing of the
authorization in support of the Petition for
Certification Election of FFW before the freedom
period is not sufficient ground to terminate the
employment of respondents inasmuch as the petition
itself was actually filed during the freedom period.
Respondents did not resign or withdraw their
membership from the union to which they belong.
Respondents continued to pay their union dues and
never joined FFW. An authorization letter to file a
Petition for Certification Election is different from an
actual Petition for Certification Election. Also, an
existing CBA cannot constitute a bar to a filing of a
petition for certification election. When there is a
representational issue, the status quo provision in so
far as the need to await the creation of a new
agreement will not apply. Otherwise, it will create an
absurd situation where the union members will be
forced to maintain membership by virtue of the union
security clause and support another union when filing
a petition for certification election. If we apply it,
11
there will always be an issue of disloyalty whenever correctly observed that the recognition of the tenets
the employees exercise their right to self- of the sect should not infringe on the basic right of
organization. self-organization granted by the constitution to
workers, regardless of religious affiliation.
Victoriano v. Elizalde Rope Workers
Union, 59 SCRA 54
Victoriano, a member of INC, has been employed in
the Elizalde Rope Company and a member of the
Union which had a collective bargaining agreement
containing a closed shop provision which provides
that “membership in the union shall be required as a
condition of employment for all permanent
employees’ workers covered by this Agreement”. RA
3350 was enacted introducing an amendment to RA
875 which states “but such agreement shall not cover
members of any religious sects which prohibits
affiliation of their members in any such labor
organization”. Being a member of a religious sect that
prohibits the affiliation of its members with any labor
organization, Victoriano resigned. The union wrote a
letter to the company asking it to separate Victoriano
from the service in view of the fact that he was
resigning from the union as a member.

By virtue, therefore, of a closed shop agreement,

before the enactment of Republic Act No. 3350, if any
person, regardless of his religious beliefs, wishes to
be employed or to keep his employment, he must
become a member of the collective bargaining union.
Hence, the right of said employee not to join the
labor union is curtailed and withdrawn. To that all-
embracing coverage of the closed shop arrangement,
Republic Act No. 3350 introduced an exception, when
it added to Section 4 (a) (4) of the Industrial Peace
Act the following proviso: “but such agreement shall
not cover members of any religious sects which
prohibit affiliation of their members in any such labor
organization”. Republic Act No. 3350 merely excludes
ipso jure from the application and coverage of the
closed shop agreement the employees belonging to
any religious sects which prohibit affiliation of their
members with any labor organization. What the
exception provides is that members of said religious
sects cannot be compelled or coerced to join labor
unions even when said unions have closed shop
agreements with the employers; that in spite of any
closed shop agreement, members of said religious
sects cannot be refused employment or dismissed
from their jobs on the sole ground that they are not
members of the collective bargaining union.

[SUPRA] Kapatiran sa Meat and Canning

Division v. Ferrer-Calleja, 162 SCRA 367
The right of members of a religious sect not to join a
labor union for being contrary to their religious
beliefs, does not bar the members of that sect from
forming their own union. The public respondent
12
Conditions of Membership and
Rights of Members
Article 250, Labor Code. Right 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 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 SOLE with a
list of the newly-elected officers, together
with the appointive officers or agents who
are entrusted with the handling of funds,
within 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 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: 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 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 SOLE or his
duly authorized representatives. Any
irregularities in the approval of the
resolutions shall be a ground for
impeachment or expulsion from the
13
 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: (1) all moneys
received and paid by him since he assumed
office or since the last day on which he
rendered such account, (2) 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 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. 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: (1) the list of all members
present, (2) the votes cast, (3) the purpose
of the special assessment or fees and (4)
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,
attorney’s fees, negotiation fees or any
other extraordinary fees may be checked
off from any amount due to an employee
WITHOUT an individual written
authorization duly signed by the employee.
The authorization should specifically state
the amount, purpose, and beneficiary of
the deduction; 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, the 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 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.
Article 289, Labor Code. Visitorial Power - The
Secretary of Labor and Employment or his duly
authorized representative is hereby empowered to:
(1) inquire into the financial activities of
legitimate labor organizations
(2) examine their books of accounts and
other records to determine compliance or
non-compliance with the law AND
(3) to prosecute any violations of the law
and the union constitution and by-laws
UPON the filing of a complaint under oath and duly
supported by the written consent of at least 20% of
the total membership of the labor organization
concerned
PROVIDED, That such inquiry or examination shall
NOT be conducted during the 60-day freedom
period NOR within the 30 days immediately
preceding the date of election of union officials. (As
amended by Section 31, Republic Act No. 6715,
March 21, 1989)
Article 228(b), Labor Code. Appearances and
Fees.
xxx
b. NO attorney’s fees, negotiation fees or similar
charges of any kind arising from any collective
bargaining agreement shall be imposed on any
individual member of the contracting union:
PROVIDED, However, that attorney’s fees may be
charged against union funds in an amount to be
agreed upon by the parties.
Any contract, agreement or arrangement of any
sort to the contrary shall be NULL and VOID. (As
amended by Presidential Decree No. 1691, May 1,
14

1980)
Article 259(e), Labor Code. Unfair labor
practices of employers. - It shall be UNLAWFUL for
an employer to commit any of the following UNFAIR
LABOR PRACTICE:
xxx
(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 250, paragraph
(o) of this Code shall not apply to the non-members
of the recognized collective bargaining agent;
NOTE: Please read Omnibus Rules, Book V, Rule XI,
XII, XIII, XVIII, XX, as amended by D.O. 40
Local Unions and Federations
MSMG-UWP v. Ramos, GR 113907,
February 28, 2000
MSMG-UWP is an affiliate of private respondent
federation ULGWP. A local union election was held
wherein the herein petitioners were proclaimed as
winners. The defeated candidates filed for a petition
for impeachment with the national federation but was
dismissed. The local union held a general
membership meeting and several union members
failed to attend thus asking the respondent company
to deduct the union fines from the wages/salaries of
those union members who failed to attend the
general membership meeting. The imposition of the
Php 50 fine became the subject of bitter
disagreement between the Federation and the local
union causing the union’s declaration of
autonomy.The federation then expel the local union
officers from the federation and advised respondent
company about this and demanded their separation
from employment. The federation filed a notice of
strike to compel the employer to effect the
immediate termination of the expelled union officers -
threatened by this, the company terminated the
employees. Petitioners then filed a complaint for
unfair labor practice.
The SC said the company was not justified in
dismissing petitioner employees. A union security
clause embodied in the CBA may be validly enforced
and that dismissals pursuant thereto may likewise be
valid, however this does not eroe the fundamental
requirement of due process. The reason is that the
sanctity and inviolability of contracts cannot override
ones right to due process. The enforcement of union
security clauses is authorized by law provided such
enforcement is not characterized by arbitrariness.
The SC further held that the act of the local union to
disaffiliate was proper. A local union has the right to
disaffiliate from its mother union and declare its
autonomy. A local union, being a separate and
voluntary association, is free to serve the interests of
all its members including the freedom to disaffiliate
or declare its autonomy from the federation to which
it belongs when circumstances warrant, in
accordance with the constitutional guarantee of
freedom of association. The purpose of affiliation by
a local union with a mother federation is to increase
by collective action the bargaining power in respect
of the terms and condition of labor. Thus, a local
union which was affiliated itself with a federation is
free to sever such affiliation anytime and such
disaffiliation cannot be considered disloyalty. In the
absence of specific provisions in the federations
constitution prohibiting disaffiliation or the
declaration of autonomy of a local union, a local may
dissociate with its parent union.
Philippine Skylanders v. NLRC, GR
127374, January 31, 2002
PSEA, a local labor union affiliated with PAFLU, won in
the certification election conducted among rank and
file employees of PSI. PSEA’s rival union, PSEA-WATU,
immediately protested the result of the election
before the Secretary of Labor. PSEA sent PAFLU a
notice of disaffiliation because of PAFLU’s alleged
deliberate and habitual dereliction of duty toward its
members. PSEA then affiliated itself with NCW and
changed its name to PSEA-NCW. PSEA-NCW then
entered into a CBA with petitioner PSI. PAFLU asked
for an audited financial statement from PSI which was
rejected by the latter as PSEA already disaffiliated
itself from PAFLU. PAFLU then filed a complaint for
unfair labor practice.
The SC said that the disaffiliation was valid pending
the settlement of the election protest. This Court has
upheld the right of local unions to separate from their
mother federation on the ground that as separate
15
and voluntary associations, local unions do not owe
their creation and existence to the national federation
to which they are affiliated, but instead, to the will of
their members. There is nothing shown in the records
nor it is claimed by PAFLU that the local union was
expressly forbidden to disaffiliate from the federation
nor were there any conditions imposed for a valid
breakaway.
Cancellation of Registration
NOTE: Please read Omnibus Rules, Book V, Rule XIV-
XV, as amended by D.O. 40-03
Article 245, Labor Code. Cancellation of
registration. - The certificate of registration of any
legitimate labor organization, whether national or
local, may be cancelled by the Bureau, after due
hearing, only on the grounds specified in Article
239 [renumbered 247] hereof.
Article 246, Labor Code. Effect of a petition for
cancellation of registration. - A petition for
cancellation of union registration shall not suspend
the proceedings for certification election nor shall it
prevent the filing of a petition for certification
election.
In case of cancellation, nothing herein shall restrict
the right of the union to seek just and equitable
remedies in the appropriate courts.
Article 247, Labor Code. Grounds for
cancellation of union registration.- The following
may constitute grounds for cancellation of union
registration:
(a) Misrepresentation, false statement or fraud in
connection with the adoption or ratification of the
constitution and by-laws or amendments thereto,
the minutes of ratification, and the list of members
who took part in the ratification;
(b) Misrepresentation, false statements or fraud in
connection with the election of officers, minutes of
the election of officers, and the list of voters;
(c) Voluntary dissolution by the members.
NOTE: Article 247 is for petition for cancellation of
union registration, and not for opposing certification
election.
SAMMA-LIKHA vs. SAMMA Corporation,
March 13, 2009
Petitioner SAMMA-LIKHA filed a petition for
certification election. This was opposed by
respondent claiming among others that petitioner
filed to prove existence as a local chapter and it had
a prohibited mixture of supervisory and rank and file
employees. The petition was dismissed by the Med-
Arbiter due to the lack of legal personality of
petitioner. Thereafter, respondent filed a petition for
cancellation of petitioner’s registration. The charter
certificate of petitioner was eventually revoked on the
ground of prohibited mixture of supervisory and rank
and file employees and non-compliance with the
attestation clause under Art 235 of the Labor Code.
The Acting DOLE secretary reversed the earlier ruling
of the Med Arbiter while this was later reversed by
the CA. The SC ruled that the erroneous inclusion of
one supervisory employee in the union is not a
ground to impugn the legitimacy of a legitimate labor
organization which had the right to file a petition for
certification election. With the certificates of
registration issued in favor of petitioner, they are
clothed with legal personality as a legitimate labor
organizations. Moreover, such legal personality
cannot thereafter be subject to collateral attack, but
may be questioned only in an independent petition
for cancellation of certificates of registration. Even
though the DOLE initially revoked the petitioner’s
charter certificate, petitioner has moved for its
reconsideration of such resolution.
Mariwasa v. Sec. of DOLE, December 21,
2009
SMMSC-Independent was issued a certificate of
registration as a legitimate labor organization by the
DOLE. Mariwasa led a petition for cancellation of
union registration against SMMSC-Independent,
claiming that the latter violated Article 234 for not
complying with the 20% minimum requirement
because of the disaffiliation of 102 employees who
executed affidavits recanting their union membership
after the union filed a petition for certification
election and that it committed misrepresentation in
violation of Article 239. The Labor Code, Article 234
merely requires a 20% minimum requirement during
the application for union registration and does not
mandate that a union maintain the 20% minimum
membership requirement all throughout its existence.
In this case, the total number at the time of
registration was 169 out of 528 rank and file
employees -- which was 32%. As to the allegation of
misrepresentation, the bare fact that two signatures
appeared twice on the list of those who participated
in the organizational meeting would not provide a
valid reason to cancel SMMSC’s certificate of
registration. In this case, the failure of SMMSC to
indicate with mathematical precision the total
number of employees in the bargaining unit is of no
moment as it was able to comply with the 20%
minimum membership requirement .
16
Heritage Hotel Manila v NUWHRAIN-
HHMSC, January 12, 2011
The union filed a petition for certification election but
it was only after 5 years that the pre-election was
made. Heritage Hotel discovered that the union did
not submit its annual financial reports since the year
it was registered thus it filed a petition for
cancellation of the union’s registration on the ground
of failure to submit said annual financial reports and
list of members to the BLR. The SC held that the
union’s registration cannot be cancelled on such
ground. The union had submitted its annual financial
reports and list of members although belatedly, thus
it was considered sufficient compliance as the
Regional Director is given license to treat late filing as
such. The union members belonging to the
bargaining unit should not be deprived of a
bargaining agent because of the negligence of the
union officers who were merely responsible for the
submission of the documents to the BLR.
NOTE: When this case was filed, non-submission of
financial reports was a ground for cancellation, but
presently, it is not one of the grounds under Article
239.
Legend International Resorts Limited v.
Kilusang Manggagawa ng Legenda,
February 23, 2011
The union filed a petition for certification election
which Legend International seeks to dismiss alleging
that the former is not a legitimate labor organization
due to its membership being a mixture of supervisory
and rank and file employees. The union countered
that the certification election should still proceed as it
complied with the required number. At the time the
petition for certification election is filed, the
petitioning union is presumed to possess the legal
personality to file the same. Thus, a certification
election may still be conducted during the pendency
of the cancellation proceedings. There is thus no
basis for Legend’s allegation that the cancellation of
certificate of registration should retroact to the time
of issuance or that it effectively nullified all the
union’s activities. Furthermore, the legitimacy of the
legal personality of a union cannot be collaterally
attacked in a petition for certification election
proceeding. Such legal personality may not be
subject to a collateral attack but only through a
separate action instituted particularly for the purpose
of assailing it.
Republic of the Philippines, represented
by DOLE v. Kawashima Textile, July 23,
2008
KFWU filed with the DOLE Regional Office a petition
for certification election to be conducted but
Kawashima opposed on the ground that KFWU did not
acquire legal personality because its membership of
mixed rank and file and supervisory employees and
failure to submit books of account. In the case at bar,
the union’s membership list contains the names of at
least 27 supervisory employees, the union could not,
prior to purging itself of its supervisory employee
members, attain the status of a legitimate labor
organization. Not being one, it could not have
possessed the requisite personality to file a petition
for certification election based on RA 6716. However,
on June 21, 997, DO no. 9 removed the requirement
that the petition for certification election indicate that
the bargaining unit of rank and file has not mingled
with supervisory employees thus the decision of
DOLE granting the certification election petition was
reinstated. As to the issue of whether an employer
can collaterally attack the legitimacy of a labor
organization by filing a MTD, an employer is a mere
bystander to any petition for certification election
except when it is requested to bargain collectively.
Such proceeding is non-adversarial and merely
investigative, for the purpose is to determine which
organization will represent the employees in their
collective bargaining with the employer. The
employer’s only right in the proceeding is to be
notified and informed.
DHL Phils. United Rank and File
Association v. Buklod ng Manggagawa
ng DHL Phils, July 22, 2004
A certification election was conducted among the
regular rank and file employees of DHL whereby the
contending choices were the petitioner and no union.
BUKLOD filed a petition for the nullification of the
certification election and the officers of the union
were charged with committing fraud and deceit in the
election proceedings as they misrepresented to the
voter-employees that it was an independent union
when it was in fact an affiliate of FFW. The SC held
that the certification election was invalid as a number
of employees were lured by their officers into
believing that the petitioner was an independent
union. The making of false statements or
misrepresentations that interfere with the free choice
of the employees is a valid ground for protest. A
certification election may be set aside for
misstatements made during the campaign, where (1)
a material fact has been misrepresented in the
campaign; (2) an opportunity for reply has been
lacking; (3) the misrepresentation has had an impact
17
on the free choice of the employees participating in
the election. Misrepresentation is likely to have an
impact on their free choice, if it comes from a party
who has special knowledge or is in an authoritative
position to know the true facts.
Asian Institute of Management v. Asian
Institute of Management Faculty
Association, January 23, 2017
Respondent filed a petition for certification election
seeking to represent a bargaining unit in AIM
consisting of 40 faculty members. Petitioner opposed
claiming that respondent’s members are managerial
employees. Later, petitioner filed a petition for
cancellation of respondent’s certificate of registration
on the grounds of misrepresentation in registration
and that respondent is composed of managerial
employees who are prohibited from organizing as a
union. The SC said that petitioner was correct in filing
of a petition for cancellation of respondent's
certificate of registration. Petitioner’s sole ground for
seeking cancellation of respondent’s certificate of
registration - that its members are managerial
employees and for this reason, its registration is thus
patent nullity for being an absolute violation of Art
245 of the Labor Code, which declares that
managerial employees are ineligible to join any labor
organization - is in a sense, an accusation that
respondent is guilty of misrepresentation for
registering under the claim that its members are not
managerial employees.
De Ocampo Memorial Schools, Inc. v.
Bigkis Manggagawa sa De Ocampo
Memorial School, Inc., March 15, 2017
Petitioner filed a petition for cancellation of certificate
registration against BIGKIS based on
misrepresentation false statement, and fraud in
connection with its creation and registration as a
labor union as it shared the same set of officers and
members with another union, LAKAS. Further, there
was an alleged mixture of supervisory
employees/managerial employees with a rank and file
union.
The SC said that for fraud and misrepresentation to
constitute as a ground for cancellation of union
registration, the nature of the fraud and
misrepresentation must be grave and compelling
enough to vitiate the consent of a majority of the
union members. In this case, BIGKIS did not commit
the alleged acts. In its application, even if it has the
same set of officers and members, the applicant
indicated in the portion “description of bargaining
unit” that is composed of “rank and file” and under
the “occupational classification”, it marked “technical
and faculty.” Moreover, while the CA may have ruled
that there is no mutuality or commonality of interests
among the members of BIGKAS, this is not enough
reason to cancel its registration. The only grounds for
cancellation are those found in Art 247 of the Labor
Code. The inclusion in a union of disqualified
employees is not among the grounds for cancellation,
unless such inclusion is due to misrepresentation,
false statement or fraud under the circumstances
enumerated in Sections (a) and (c) of Article 247.
Thus, for purposes of decertifying a union, it is not
enough to establish that the rank and file union
includes ineligible employee in its membership.
Pursuant to paragraph (a) and (b) of Article 247 of the
Labor Code, it must be shown that there was
misrepresentation, false statement or fraud in
connection with: (1) the adoption or ratification of the
constitution and by-laws or amendments thereto; (2)
the minutes of ratification ; the election of officers;
(3) election of officers; (4) the minutes of the election
of officers; and (5) the list of voters.
Bargaining Unit
Bargaining Unit, defined
a group of employees of a given employer, comprised
of all or less than all of the entire body of employees,
which the collective interest of all the employees,
consistent with equity to the employer, indicate to be
the best suited to serve the reciprocal rights and
duties of the parties under the collective bargaining
provisions of the law.
Rule 1, Sec. 1(d), Omnibus Rules, Book V, as
amended by DO 40-03. BARGAINING UNIT -
refers to a group of employees sharing mutual
interests within a given employer unit, comprised
of all or less than all of the entire body of
employees in the employer unit or any specific
occupational or geographical grouping within such
employer unit.
Rule 1, Sec. 1(t), Omnibus Rules, Book V, as
amended by DO 40-03. EXCLUSIVE BARGAINING
REPRESENTATIVE - refers to a legitimate labor
union duly recognized or certified as the sole and
exclusive bargaining representative or agent of all
the employees in a bargaining unit.
San Miguel Corp. v. Laguesma,
September 21, 1994
A petition for certification election was filed by the
union among all regular sales personnel of Magnolia
Dairy Products in the North Luzon Sale Area. SMC
18
opposed claiming that its bargaining history in its
sales offices, plants and warehouses is to have a
separate bargaining unit for each sales office. The
union won the election. SMC argues that its prior
collective bargaining history is the most persuasive
criterion in determining the appropriateness of the
collective bargaining unit. The SC said that the union
represents an appropriate bargaining unit.
A bargaining unit is a "group of employees of a given
employer, comprised of all or less than all of the
entire body of employees, consistent with equity to
the employer, indicate to be the best suited to serve
the reciprocal rights and duties of the parties under
the collective bargaining provisions of the law." The
fundamental factors in determining the appropriate
collective bargaining unit are:
(1) the will of the employees (Globe
Doctrine);
(2) affinity and unity of the employees'
interest, such as substantial similarity of work
and duties, or similarity of compensation and
working conditions (Substantial Mutual
Interests Rule);
(3) prior collective bargaining history; and
(4) similarity of employment status.
The Court held that the existence of a prior collective
bargaining history is neither decisive nor conclusive
in the determination of what constitutes an
appropriate bargaining unit. The test of grouping is
the mutuality or commonality of interests. The
employees sought to be represented must have
substantial mutual interests in terms of employment
and working conditions as evidenced by the type of
work they perform.
University of the Philippines v. Ferrer-
Calleja, July 14, 1992
ONAPUP filed a petition with the BLR for certification
election among all the non-academic employees of
UP but All UP Worker’s Union intervened in the
petition, alleging that its membeship covers both
academic and non-academic personnel and that it
aims to unit all rank and file employees in one union.
Director Calleja, citing EO 180 and Rule IV, Section 1
of the Rules implementing EO 180, ruled that the
appropriate organizational unit should include all rank
and file employees, teaching and non-teaching of UP.
UP thereafter sought exclusion from the
organizational unit certain employees holding
supervisory positions among non-academic personnel
and those with ranks of Assistant Professor. Relevant
laws and the University Charter show that associate
professors, assistant professors and associate high
level employeesare not managerial but are rank and
employees. What is a managerial employee, for
example, is the Dean. Non-academic rank and file
employees of UP shall constitute a bargaining unit to
the exclusion of the academic employees of the
institution who may also organize themselves into a
separate collective bargaining unit as the test in
determining the appropriate bargaining unit is the
mutuality of interest test. Applying this test, teachers
would find almost nothing in common with the non-
academic personnel as regards working conditions,
compensation rates, skills and intellectual pursuits.
Golden Farms v. Secretary, July 26, 1994
PFL filed a petition before the Med-Arbiter praying for
the holding of a certification election among the
monthly paid office and technical rank and file
employees of Golden Farms. It filed a MTD when PFL
failed to show that it was organized as a chapter
within GF’s establishment and that there was already
an existing CBA between the rank and file employees
represented by NFL and GF. PFL opposed, contending
that monthly paid office and technical employees
should be allowed to form a separate bargaining unit
because
The monthly paid office and technical rank-and- file
employees of petitioner Golden Farms enjoy the
constitutional right to self-organization and collective
bargaining. The monthly paid rank-and- file
employees of petitioner primarily perform
administrative or clerical work. In contradistinction,
the petitioner’s daily paid rank-and- file employees
mainly work in the cultivation of bananas in the
fields. It is crystal clear the monthly paid rank-and-
file employees of petitioner have very little in
common with its daily paid rank-and-employees in
terms of duties and obligations. This dissimilarity of
interests warrants the formation of a separate and
distinct bargaining unit for the monthly paid rank-
and-file employees of GF. To rule otherwise would
deny this distinct class of employees the right to self-
organization for purposes of collective bargaining.
Mechanical Department Labor Union sa
PNR v. CIR, August 30, 1968
Philtranco Services Enterprises v. BLR,
June 28, 1989
The Locomotive and Motor Car Crew of the Caloocan
shops are represented by the Union de Maquinistas,
while the workers under the Operations and Shops
Rolling Stocks are represented by the Mechanical
Department Labor Union. Said Rolling Stocks
Maintenance Division seek to be separated from the
rest of the workers of the department and to be
represented by Samahan ng mga Manggagawa sa
Caloocan shops. Thereafter, Samahan filed a petition
calling attention to the fact that there were unions in
the Caloocan shops of the PNR and that no
19
certification election had been held in the last 12
months for which reason a certification election was
needed to determine the proper collective bargaining
representative. Said petition was opposed by the
management and the Mechanical Labor Union as it
had previously been certified as the sole and
exclusive bargaining agent of the employees of PNR’s
mechanical department and that before expiration of
the CBA, a renewal had been negotiated. The CIR
judge held that based on the “Globe” doctrine, the
employees in the Caloocan Shops should be given a
chance to vote on whether their group should be
separated from that represented by the Mechanical
Department Labor Union, and ordered a plebiscite
held for the purpose.
Those in the Caloocan shops, contrary to
Mechanical’s argument that these said workers do
not require different skills from the rest of the workers
in the Mechanical Department, not only have a
community of interest and working conditions but
perform major repairs of railway rolling stock, using
heavy equipment and machineries found in said
shops, while the others only perform minor repairs. It
is easy to understand, therefore, that the workers in
the Caloocan shops require special skill in the use of
heavy equipment and machinery sufficient to set
them apart from the rest of the workers. Said appeal
of Mechanical as to whether the Globe Doctrine is
applicable is premature at best since the result of the
ordered plebiscite among the workers of the Caloocan
shops who desire to form a new bargaining unit may
be adverse to the formation of a separate unit.
Philtranco Service Enterprises Inc v.
BLR, G.R. no. 85343, June 28, 1989
KASAMA KO, a registered labor organization, filed a
petition for certification election with DOLE seeking to
represent all professional and confidential employees
and personnel of Philtranco and that no certification
election has been held in the past 3 years prior to the
filing of the petition. NAMAWU-MIF filed a motion for
intervention alleging that it was the bargaining agent
of the said workers but the Arbiter dismissed said
petition stating that the eligible employees must be
included in the existing bargaining unit.
The Labor Code recognizes two (2) principal groups of
employees, namely, the managerial and the rank and
file groups. Thus, Art. 212 (k) of the Code provides:
“(k) ‘Managerial employee’ is one who is vested with
powers or prerogatives to lay down and execute
management policies and/or to hire, transfer,
suspend, layoff, recall, discharge, assign or discipline
employees, or to effectively recommend such
managerial actions. All employees not falling within
this definition are considered rank and file
employees. It follows that the members of KASAMA
KO who are professional, technical, administrative
and confidential personnel of PHILTRANCO performing
managerial functions are not qualified to join, much
less form a union. Managers by any name may not
join the rank and file union. On the other hand, those
who are rank and file workers may join the existing
bargaining unit instead of organizing another
bargaining unit and compelling the employer to deal
with it. Furthermore, there are no compelling reasons
in this case such as a denial to the KASAMA KO group
of the right to join the certified bargaining unit or
substantial distinctions warranting the recognition of
a separate group of rank and file workers. Precisely,
NAMAWUMIF intervened to make it clear it has no
objections to qualified rank and file workers joining its
union.
Philippine Scout Veterans Security and
Investigation Agency v. Secretary, July
21, 1993
The Union filed a petition for direct certification
election among the rank and file employees of PVSIA,
GVM and ASDA. These said companies filed a single
comment alleging that they have separate and
distinct personalities while PGA Security Agency is
not a business or corporate entity and does not
possess any personality, and filed a mTD on the
ground that the 721 supporting signatures do not
meet the 20% minimum requirement for certification
election as the number of employees total 2,374 and
that there are no implementing rules yet of RA 6715.
Med-Arbiter ruled that the companies should be
deemed as a single entity and bargaining unit for the
purpose of union organizing and the holding of a
certification election.
As to the allegation that the Union failed to meet the
20% requirement that must support the petition,
there was no need for the union to prove the 20%
requirement. Under the amendments of the Labor
Code, when a duly organized labor union files a
petition for certification election, Med-Arbiter has the
duty to automatically conduct an election and has no
discretion on the matter. This is the mandate of
Article 257 which states that: “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. Further, an employer
has nothing to do with a certification election except
when it is requested to bargain collectively.
20
International School Alliance of
Educators v. Quisumbing, June 8, 2000
The School hires both foreign and local heirs but
grants the foreign heirs certain benefits not accorded
to the former, such as housing, transportation,
shipping costs, taxes, salary rate 25% more than
local-hires and home-leave travel allowance. CBA was
held where ISAE contested the difference in salary
rates. Foreign heirs do not belong to the same
bargaining unit as local heirs. The factors in
determining the appropriate collective bargaining unit
are (1) the will of the employees; (2) affinity and unity
of the employees’ interest, such as substantial
similarity of work and duties, or similarity of
compensation and working conditions (3) prior
collective bargaining history; and (4) similarity of
employment status. The basic test of an asserted
bargaining unit’s acceptability is whether or not it is
fundamentally the combination which will best assure
to all employees the exercise of their collective
bargaining rights. It does not appear that foreign-
hires have indicated their intention to be grouped
together with local-hires for purposes of collective
bargaining. Although foreign-hires perform similar
functions under the same working conditions as the
local-hires, foreign-hires are accorded certain benefits
not granted to local-hires. To include foreign-hires in a
bargaining unit with local-hires would not assure
either group the exercise of their respective collective
bargaining rights.
De La Salle v. De La Salle University
Employees’ Association, Apr. 12, 2000
DLSU Union entered into a CBA. During the 60 day
freedom period (before expiration of said CBA), the
Union initiated negotiations with DLSU for a new
collective bargaining agreement which turned out to
be unsuccessful, like the issue of the scope of the
bargaining unit if it should include employees of CSB.
During the freedom period, the parties may not only
renew the existing collective bargaining agreement
but may also propose and discuss modifications or
amendments. Express exclusion of the computer
operator and discipline officers from the bargaining
unit of rank and file employees in the 1986 CBA does
not bar any re-negotiation for the future inclusion of
the said employees in the bargaining unit.
Furthermore, computer operators and discipline
officers are not confidential employees as the
former’s duties are basically clerical and non-
confidential in nature. The employees of the College
of St. Benilde should be excluded from the bargaining
unit of the rank-and- file employees of DLSU because
the two educational institutions have their own
separate juridical personality and no sufficient
evidence was shown to justify the piercing of the veil
of corporate fiction.
[SUPRA] San Miguel Foods v. San Miguel
Corp. Supervisors and Exempt Union,
Aug. 1, 2011
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
interest. Certain factors, such as specific line of work,
working conditions, location of work, mode of
compensation, and other relevant conditions do not
affect or impede their commonality of interest.
Although they seem separate and distinct from each
other, the specific tasks of each division are actually
interrelated and there exists mutuality of interests
which warrants the formation of a single bargaining
unit.
Lepanto Consolidated Mining v. The
Lepanto Capataz Union, February 18,
2013
The Union filed a petition for consent election with
the Industrial Relations Division of the CAR of the
DOLE, proposing to represent 139 capatazes of
Lepanto. Lepanto opposed the petition, contending
that the Union was in reality seeking a certification
election, not a consent election, and would thereby
be competing with the Lepanto Employees Union
(LEU), the current collective bargaining agent, as the
capatezes were already members of the LEU.
Capatezes or foremen are not rank-and file
employees because they are an extension of the
management, and as such they may influence the
rank-and- file workers under them to engage in
slowdowns or similar activities detrimental to the
policies, interests or business objectives of the
employers. were performing functions totally different
from those performed by the rank-and- file
employees, and that the capatazes were supervising
and instructing the miners, mackers and other rank-
and-file workers under them, assessing and
evaluating their performance, making regular reports
and recommending new systems and procedure of
work, as well as guidelines for the discipline of
employees. Hence, Med-Arbiter Lontoc concluded and
affirmed by SC, that the capatazes differed from the
rank-and- file and could by themselves constitute a
separate bargaining unit.
Fulache vs. ABS-CBN Broadcasting
Corporation, G.R. 183810, January 21,
2010
Fulache filed two separate complaints for
regularization and illegal dismissal, alleging that ABS-
21
CBN and the Union executed a CBA but they were
excluded from it. They claim that they had already
rendered more than a year’s service and should be
recognized as regular employees. Only regular
employees who fall under the coverage of the
bargaining unit are therefore entitled to CBA benefits
as a matter of law and contract. SC ruled that Fulache
et al were regular employees as they were engaged
in the performance of activities usually necessary or
desirable in ABS-CBN’s trade of business. As regular
employees, they fall within the coverage of the
bargaining unit and are entitled to benefits as a
matter of law.
Holy Child Catholic School v. HCCS-
TELU-PIGLAS, July 23, 2013
HCCS-TELU-PIGLAS filed a petition for certification
election but such filing was opposed by Holy Child
Catholic School on the grounds that the members of
the union do not belong to the same class of
employees, which included managerial, confidential,
rank and file, teaching and non-teaching personnel,
and that it is an illegitimate labor organization lacking
in personality to file such and inappropriate
bargaining unit for want of community of interest.
In determining the proper collective bargaining unit
and what unit would be appropriate to be the
collective bargaining agency, several factors should
be considered: (1) will of employees (Globe Doctrine);
(2) affinity and unity of employees’ interest, such as
substantial similarity of work and duties, or similarity
of compensation and working conditions; (3) prior
collective bargaining history; and (4) employment
status, such as temporary, seasonal and probationary
employees. We stressed, however, that the test of the
grouping is community or mutuality of interest,
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. The teaching and non-teaching
personnel of the school must form separate
bargaining units. Thus, the order for the conduct of
two separate certification
elections, one involving teaching personnel and the
other involving non- teaching personnel based on the
UP case which prohibited commingling teaching and
non-teaching personnel.
Coca-Cola Bottlers Philippines, Inc. vs.
Ilocos Professional and Technical
Employees Union (IPTEU), September
09, 2015
IPTEU filed a verified petition for certification election
seeking to represent the bargaining unit consisting of
22 rank and file professional and technical employees
of COCA-COLA. The company, however, opposed the
petition as several employees in the IPTEU are
confidential employees, but the petition was granted
by the Med-Arbiter. Thereafter, COCA COLA and IPTEU
mutually agreed to conduct a certification election
and 16 employees voted. COCA-COLA again filed a
protest arguing that the 16 employees were
confidential employees and that there is already the
IMU which represented the rank and file.
Subsequently, IPTEU was proclaimed as the EBR for
the rank and file exempt workers of COCA-COLA. The
Mediator-Arbiter ruled that employees who encounter
or handle trade secrets and financial information are
not automatically classified as confidential
employees. It was admitted that the subject
employees encounter and handle financial as well as
physical production data and other information which
are considered. The SOLE, which the CA affirmed,
likewise held that the questioned voters do not have
access to confidential labor relations information.
The SC defers to the findings of fact of the Mediator-
Arbiter, the SOLE, and CA. An employee must assist
or act in a confidential capacity and obtain
confidential information relating to labor relations
policies. Exposure to internal business operations of
the company is not per se a ground for the exclusion
in the bargaining unit.
Bargaining Agent and
Certification Election
Proceedings
Article 267, Labor Code. 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-
22
management councils shall be elected by at least
the majority of all employees in said establishment.
Article 268, Labor Code. Representation Issue
in Organized Establishments. - In ORGANIZED
establishments, when a verified petition
questioning the majority status of the incumbent
bargaining agent is filed before the DOLE within the
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 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 3 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 2 highest number of votes:
PROVIDED, that the total number of votes
for all contending unions is at least 50% of
the number of votes cast.
At the EXPIRATION of the freedom period, the
employer shall CONTINUE to recognize the
majority status of the incumbent bargaining agent
WHERE NO petition for certification election is filed.
(As amended by Section 23, Republic Act No. 6715,
March 21, 1989)
Article 269, Labor Code. 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. (As amended by Section 24, Republic
Act No. 6715, March 21, 1989)
Article 270, Labor Code. 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 20
working days. The Bureau shall conduct a
certification election WITHIN 20 days in accordance
with the rules and regulations prescribed by the
Secretary of Labor.
Article 271, Labor Code. EMPLOYER as
BYSTANDER — In all cases (whether the petition for
certification election is led by an employer OR a
legitimate labor organization), the employer shall
NOT be considered a party thereto with a
concomitant right to oppose a petition for
certification election.
The employer's participation in such proceedings
shall be LIMITED to:
(1) being notified or informed of petitions of
such nature; and
(2) submitting the list of employees during
the pre-election conference should the
Med-Arbiter act favorably on the petition.
Article 272, Labor Code. 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 SOLE on the ground that the rules and
regulations or parts thereof established by the
SOLE for the conduct of the election have been
violated. Such appeal shall be decided within 15
calendar days. (As amended by Section 25,
Republic Act No. 6715, March 21, 1989)
NOTE: Read Omnibus Rules, Book V, Rule I, Sec. 1 (d,
h, j, o, p, q, t, ll, ss, bbb, a, tt, ww), Rules VI-X, as
amended by D.O. 40, D.O. 40-F-03, series of 2008,
and further amended by D.O. 40-I-15, series of 2015
Duty to Bargain Collectively
Lakas ng Manggagawang Makabayan v.
Marcelo Enterprises, November 19,
1982
Confronted with the problem of whom to recognize as
the bargaining representative of all its workers, the
company asked for proof of authority to represent
MFWU and MACATIFU and apprised LAKAS of the
existing conflicting demands for recognition as
bargaining representative in the units involved. The
company expressed conformity to negotiate as soon
as LAKAS can present evidence of authority and four
conferences were held but LAKAS refused all of the
management’s offers. LAKAS thereafter declared a
strike against all of the Marcelo companies which was
attended by violence. A return to work agreement
was executed whereby Marcelo Companies resumed
operations and strikers went back to work, except
four who chose not to because of the criminal
charges filed against them. LAKAS declared another
strike. Some strikers returned to work and were
requested to indicate their availability for work in
order that they may be scheduled but some refused
to return as they did not want to comply with the
23
requirement Thus, LAKAS filed an unfair labor
practice alleging non-readmission of the
striking members despite unconditional offer to
return to work after the strike.
Marcelo Companies did not ignore the demand for
collective bargaining nor did it refuse to bargain at
all. What it did was apprise LAKAS of the existing
conflicting demands for recognition as bargaining
representative in the units involved and suggested
the settlement of the issue by filing a petition for
certification election. Thus, where the issue of
legitimate representation in dispute is viewed for not
only by one legitimate labor organization but two or
more, there is every ground warranting the holding of
a certification election. Although an employer has the
undoubted right to bargain with a bargaining agent
whose authority has been established, without the
requirement that the bargaining agent be officially
certified by the National Labor Relations Board as
such, if the informally presented evidence leaves a
real doubt as to the issue, the employer has a right to
demand a certification and to refuse to negotiate
until such official certification is presented.
It is essential to the right of a putative bargaining
agent to represent the employees that it be the
delegate of a majority of the employees and,
conversely, an employer is under duty to bargain
collectively only when the bargaining agent
representative of the majority of the employees. A
natural consequence of these principles is that the
employer has the right to demand of the asserted
bargaining agent proof of its representation of its
employees. Having the right to demonstration of this
fact, it is not an unfair labor practice for an employer
to refuse to negotiate until the asserted bargaining
agent has presented reasonable proof of majority
representation.
NOTE: The duty to bargain collectively exists when
there is a certification as to who to bargain with.
National Union of Restaurant Workers
(PTUC) V. C1R, April 30, 1964
A complaint for unfair labor practice was lodged
against the owners of Tres Hermanas
Restaurant on the ground that the company refused
to bargain collectively with the union. The Company
made a counter offer wherein the petitioner would be
accepted if the same would become a company
union. Also, an employee was separated from the
service because he was found to be the organizer and
adviser of the complaining union. SC ruled that the
Company did not refuse to bargain collectively with
the Union. While it is true that it denied the capacity
of the complaining union to bargain collectively with
the respondents this is because they were of the
impression that before a union could have that
capacity, it must first be certified by the Court of
Industrial Relations as the duly authorized bargaining
unit. Thus, the fact that the Company had agreed to
only some of the demands shows that she did not
refuse to bargain collectively with the complaining
union.
Liberty Flour Mills Employees
Employees v. Liberty Flour Mills,
December 29, 1989
Union and Company entered into a CBA. The CBA had
a union shop clause, that employees should maintain
membership in good standing in the Union as a
condition for continued employment in the company.
Later, 2 employees (petitioners) veered away from
the Union and created a New Union. Through New
Union, they filed a petition for Certification Election.
So, Union expelled the 2 employees. While this was
happening, the above-mentioned CBA was certified.
The company then dismissed the 2 employees from
work pursuant to the union shop clause. They filed a
case against their dismissal. The issue here is
whether the 2 employees could be validly dismissed
based on a union shop clause in a CBA that was NOT
yet certified. The Court ruled that the 2 employees
were actually dismissed after certification. But,
assuming arguendo that they were dismissed before
the certification of the CBA, they could still be validly
dismissed. The certification of the collective
bargaining agreement by the BLR is not required to
put a stamp of validity to such contract. Once it is
duly entered into and signed by the parties, a
collective bargaining agreement becomes effective as
between the parties regardless of whether or not the
same has been certified by the BLR.
Colegio de San Juan de Letran v.
Association of Employees and Faculty of
Letran, September 13, 2000
Letran unilaterally suspended CBA re-negotiations
with existing EBR after purportedly receiving
information that another labor organization filed a
petition for certification election. The Court held
Letran is guilty for unfair labor practice for not
fulfilling their duty to collectively bargain. Letran’s
excuse is not a valid ground to suspend CBA
renegotiations. In order to allow the employer to
validly suspend the bargaining process there must be
a valid petition for certification election raising a
legitimate representation issue. Hence, the mere
filing of a petition for certification election does not
ipso facto justify the suspension of negotiation by the
employer. The petition must first comply with the
provisions of the Labor Code and its Implementing
24
Rules. Foremost is that a petition for certification
election must be filed during the 60 day freedom
period. The "Contract Bar Rule" under Section 3, Rule
XI, Book V, of the Omnibus Rules, as based on the
Labor Code, provides that: ". . . If a collective
bargaining agreement has been duly registered in
accordance with the Code, a petition for certification
election or a motion for intervention can only be
entertained within 60 days prior to the expiry date of
such agreement." No petition for certification election
for any representation issue may be filed after the
lapse of the 60 freedom period. The old CBA is
extended until a new one is signed. The rule is that
despite the lapse of the formal effectivity of the CBA
the law still considers the same as continuing in force
and effect until a new CBA shall have been validly
executed. In this case, the petition was filed by the
other union outside the freedom period. As such, the
suspension of negotiations by Letran was invalid.
San Miguel Corporation Employees
Union-PTGWO v. Confesor, September
19, 1996
Union entered into a CBA with SMC. Later, the SMC
informed its employees that the company will
undergo a restructuring. Thus, two corporations were
formed Magnolia and SMF. Notwithstanding the spin-
offs, the CBA still remained in force. During
negotiation, the union insisted that the bargaining
unit of SMC shall still include the employees of the
spun-off corporations, Magnolia and SMF. Also, they
contended that the renegotiated terms of the CBA
shall be effective only for the remaining period of 2
years. SMC however says otherwise. The SOLE ruled
that the employees of SMF and Magnolia are no
longer covered.
The SC ruled that bargaining unit of SMC does not
include the employees of SMF and Magnolia. It ruled
that Magnolia and SMF became distinct entities with
separate juridical personalities. In determining an
appropriate bargaining unit, the test of grouping is
mutuality or commonality of interest. The employees
sought to be represented by the collective bargaining
agent must have substantial mutual interests in
terms of employment and working conditions as
evidenced by the type of work they perform. In this
case, SMC is engaged in the business of beer
manufacturing while Magnolia is involved in the
manufacturing and processing of dairy products and
SMF is involved in the production of feeds and
processing of chicken.
Manila Electric Co. v. Quisumbing,
January 27, 1999
MERALCO and MEWA had an existing CBA from 1992-
1997, and they sought to negotiate the conditions
covering the remaining period from Dec. 1 , 1995 to
Nov. 30, 1997. They failed to agree on the terms
resulting in a deadlock. The Secretary later assumed
jurisdiction over their labor dispute. The Secretary
later issued an order (fixing benefits, wage increases,
and other economic benefits AND also determined
the retroactivity of the CBA) which was opposed by
MERALCO alleging grave abuse of discretion. Court
ruled that the retroactivity of arbitral awards shall
commence at such time as granted by the Secretary.
As provided under the law, if no agreement is reach
within 6 months from the expiry date of the 3-years
that follow the CBA execution, the law expressly gives
the parties, not anybody else, the discretion to fix the
effectivity of the agreement. In case no agreement is
reached, the (1) principle of hold over shall apply,
which provides that “in the absence of a new CBA,
the parties shall 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. The (2) arbitrated CBA may
also take on the nature of a judicial or quasi-judicial
award and may be executed. (READ NEXT CASE)
Manila Electric Co. v. Quisumbing,
February 22, 1999
Motion for reconsideration from previous case; main
issue is whether the grant of arbitral awards are
retroactive. Court ruled that CBA arbitral awards
granted after 6-months from the expiration of the last
CBA shall retroact to such time agreed upon by both
employer and the employees or their union. Absent
agreement for retroactivity, the award shall retroact
to the first day after the 6-month period following the
expiration of the last day of the CBA. In the absence
of a CBA, the Secretary’s determination of the date of
retroactivity as part of his discretionary powers over
arbitral awards shall control. Although an arbitral
award cannot be categorized as an agreement
voluntarily entered into by the parties because it
requires the interference and imposing power of the
State thru the Secretary, the arbitral award can be
considered as an approximation of a CBA which would
otherwise have been entered into by the parties. The
terms or periods (for retroactivity) set forth in the
Labor code pertains to a CBA, there is nothing that
would prevent such rules to apply to an arbitral
award by analogy.
25
New Pacific Timber v. NLRC, March 17,
2000
The union started to negotiate with petitioner
company which was met with resistance. Thus, union
filed a complaint for ULP against the company for
refusal to bargain collectively. The union won its case
against the company before the Executive LA. The
case was then placed under the arbitration branch of
the NLRC for execution. LA ordered the company to
pay benefits, thereafter, the union manifested that it
will no longer appeal this decision of the LA. However,
it filed a petition for relief saying that 186 employees
were wrongfully excluded from receiving benefits who
were entitled under the existing CBA. Company
counters that these employees were not entitled
because they were hired after the terms of the CBA--
saying that the provision for wage increase already
ended in 1984, and that no new CBA was instituted.
Court ruled that the term of the CBA as to its
economic provisions can be extended beyond the
term expressly stipulated in the absence of a new
CBA, or in other words, even beyond its 3-year
period. Art. 253 of the LC directs that the company
(in this case) is duty bound to keep the status quo
and to continue in full force and effect the terms of
the existing CBA until a new CBA is made. Court also
ruled, thus, that the 186 employees hired after the
stipulated term of the CBA are entitled to their
benefits because of the status quo.
Mindanao Terminal and Brokerage
Service. Inc. v. Confesor, May 5, 1997
Company and the union entered into a CBA for a
period of 5 years. On the 3rd year, they met to
renegotiate the provisions of the CBA. They however
failed to resolve some of their differences and thus a
deadlock developed. The union and the company
went back to the bargaining table and eventually
agreed to certain benefits. The company claimed
however that the wage increases which it had agreed
to give to the employees should be creditable as
compliance with future mandated wage increases. In
addition, it mandated that such increases in the
renegotiated terms should not be retroactive. The SC
held that the renegotiated terms are retroactive.
Under the Labor Code, all other terms 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, shall retroact to the day immediately
following such date. If any such agreement is entered
into beyond 6 months, the parties shall agree on the
duration of retroactivity thereof.
Samahang Manggagawa sa Top Form v.
NLRC, September 7, 1998
Petitioner was the certified collective bargaining
representative of all regular rank and file employees
of Top Form. A collective bargaining negotiation was
held. In the minutes of the meeting, an across the
board wage increase was tackled but it was not
stated anymore in the CBA since the union dropped
such proposals relying to the undertakings made by
the officials of the company. The union eventually
requested the implementation of the wage order
however they demanded that the increase be on an
across-the-board basis. The company refused and
eventually implemented a scheme of increase
purportedly to avoid wage distortion. The SC held
that the company did not commit an unfair labor
practice. The Court held that the across-the-board
wage increase is not part of the CBA. It could only be
demandable in law if incorporated in the CBA. The
Minutes only reflects the proceedings and discussions
undertaken in the process of bargaining for worker
benefits. Petitioner union had the right and the
opportunity to insist on the foreseeable fulfilment of
the company’s promise by demanding its
incorporation in the CBA, but they did not. Because
the proposal was never embodied in the CBA, the
promise has remained just that, a promise, the
implementation of which cannot be validly demanded
under the law.
Rivera v. Espiritu, January 23, 2002
PAL pilots affiliated with ALPAP went on a 3 week
strike causing serious losses to the airline company
company. Faced with bankruptcy, PAL adopted a
rehabilitation plan and downsized its labor force.
PALEA went on a strike to protest the retrenchment
measures adopted the airline company. To address
the problems of the airline company, the PAL
management and PALEA reached an agreement in
which shares of stocks will be given to some
employees. The agreement further provides that
PALEA agreed to suspend their CBA for 10 years but
PAL will continue to recognize the said CBA. The SC
said that there is nothing wrong with the agreement.
The SC said there is nothing in Art 253-A which
prohibits parties from waiving or suspending the
mandatory timetables and agreeing on the remedies
to enforce the same. The right to free collective
bargaining after all includes the right to suspend it.
Jurisdictional Requirements
Kiok Loy v. NLRC, January 22, 1986
The Union won and became the exclusive bargaining
agent of the rank and file employees of the company
and thus proposed a CBA but was ignored. This
26
prompted the union to file a notice of strike with the bargaining unit. Furthermore, at the time of the
BLR on the ground of unresolved economic issues in supposed recognition, the Company was obviously
collective bargaining. SC ruled that the company was aware that there were other unions existing in the
guilty to unfair labor practice as the Union had made unit (they even went on strike). The unusual
a request to bargain and that the company did not promptitude in the recognition of ALU by the
act on it. Such inaction and refusal by the company to Company as the exclusive bargaining representative
make a counter proposal may indicate bad faith. of the workers under the fluid and amorphous
While it is a mutual obligation of the parties to circumstances then obtaining, was decidedly
bargain, the employer, however, is not under any unwarranted and improvident.
legal duty to initiate contract negotiation. The
mechanics of collective bargaining is set in motion
only when the following jurisdictional preconditions Bargaining Agent and
are present, namely (which are present in this case):
1. possession of the status of majority Certification Election
representation of the employees’
representative in accordance with any of the
Proceedings
means of selection or designation provided
for by the Labor Code; Certification Election Proceedings
2. proof of majority representation; and
3. a demand to bargain under Article 251, par. SEBA GRANT: Not
(a) of the New Labor Code Unorganized certifi Appealable
Labor Certifi
cation DENY:
to Sec. of
Organization cation Appealable
Labor
Electi
ALU v. Ferrer-Calleja, May 5, 1989 (No EBR in BU)
Organized
Certifi
on
to Secretary
GRANT or
(automaticall
Company had 4 existing labor organizations for their cation of Labor CE)
DENY:
y conduct
Labor 2 OR
Conse
Electi Appealable
rank and file employees, one of which was ALU. ALU Organization MORE
nt
on to
sent a letter to the Company informing it that (has EBR in BU) LOs
Certification Elections Electi Secretary of
majority of its employees authorized ALU as its on Labor
1. DOUBLE MAJORITY RULE
exclusive bargaining representative; and so, the
Company recognized it as such and proceeded to a. 1st Majority: Majority of employees in
bargaining unit voted
negotiate and with them for a CBA. The CBA as
executed and filed with the Ministry of Labor. b. 2nd Majority: Union → has majority of
valid votes cast
Contesting this, the other labor organizations
conducted strikes, and filed a petition for Certification NOTE:
● If NO Double Majority = FAILURE of
Election. The question in this case is whether a
petition for CE is proper considering the existence of Elections
● Includes invalid votes when counting
a CBA (contract bar rule)? The Court held that the
petition is proper, and the contract bar rule cannot be votes for (a)
2. If election is valid (satisfies 1st majority), but
applied, since the mechanics of collecting bargaining
were not set in motion. The mechanics of collective no one won and can do Run-Off → then do
Run-Off
bargaining are set in motion only when the following
jurisdictional preconditions are present, namely, (1) 3. If election is valid, but can’t do Run-off →
after __ number of days, can move for
possession of the status of majority representation by
the employees' representative in accordance with conduct of another CE
4. If election fails, wait for another 6 months
any of the means of selection and/or designation
provided for by the LC; (2) proof of majority before another CE can be conducted
representation; and (3) a demand to bargain under
Article 251, paragraph (a), of the New Labor Code. In Requisites to Conduct Run-Off Elections
this case, the only express recognition of ALU as said 1. Valid election
employees’ bargaining representative in the records 2. 3 or more choices (including no union)
is in the CBA the company and ALU hurriedly entered 3. No one gets majority of valid votes cast
into. Other than that, looking at the content of the the 4. Contending unions got at least 50% of the
letters between ALU and the Company, there was votes cast (including invalid votes)
precipitate haste on the part of the Company in 5. No unresolved challenge or election protest
recognizing ALU, which recognition (as exclusive
bargaining representative) appears to have been ● If all requisites are present, can conduct Run-
based on its own self-serving claim that it had the Off Elections:
support of the majority of the employees in the

27
 ○ The 2 unions who got the 2 highest
votes will compete with each other
for the most votes in the elections
○ No more “no union” as an option in
this election
FOR EXAMPLE: 200 ELIGIBLE VOTERS IN THE
BARGAINING UNIT → you need at least 101
A 40 Valid Election → 50% + 1 of BU
(40+30+20+80+30) = 101
B 30 Majority of Valid Votes Cast →
50% + 1 of VVC (40+30+20+80) =
C 20 86
X 80 X union did not get majority votes,
union so run-off. If X union got 86, then no
run-off.
SPOIL 30
ED For Run-Off to Apply→ 50% + 1
of 200 = 101 BUT 40+30+20 = 90
SO NO RUN-OFF
Re-run Elections
- Election conducted to break a tie between
contending unions (including “no union”)
- Also refers to an election conducted after a
failure of election has been declared by the
election officer and/or affirmed by the
mediator-arbiter (conducted within 6 months
after failure of elections)
A 50 1. First, Run-off A, B, C
2. Second, if there is still a tie,
B 50 A and B
C 60
X 5
union
Republic of the Philippines, represented
by DOLE, v. Kawashima Textile, July 23,
2008
KFWU filed PCE to be conducted in the bargaining
unit composed of rank-and-file employees of
respondent. Attached to its petition are a Certificate
of Creation of Local/Chapter stating that KFWU
submitted a Charter Certificate issued to it by the
national federation PH Transport & General Workers
Organization (PTGWO). Kawashima filed a petition on
the ground that KFWU did not acquire any legal
personality because its membership of mixed rank-
and-file and supervisory employees violated Article
245 of the Labor Code, and its failure to submit its
books of account.
The inclusion in a union of disqualified employees is
not among the grounds for cancellation of union
registration, unless such inclusion is due to
misrepresentation, false statement or fraud under the
circumstances enumerated in Sections (a) and (c) of
Article 239 of the Labor Code. Except when it is
requested to bargain collectively, an employer is a
mere bystander to any petition for certification
election. The employer’s participation in such
proceedings shall be limited to: (1) being notified or
informed of petitions of such nature; and (2)
submitting the list of employees during the pre--
election conference should the MedArbiter act
favorably on the petition.
NOTE: Commingling is not a ground for cancellation
as provided by RA 6715.
St. James School of Quezon City v.
Samahang Manggagawa sa St. James,
November 23, 2005
The members of Samahang Manggagawa are
employees in the Tandang Sora campus. Under its
constitution and by-laws, Samahang Manggagawa
seeks to represent the motor pool, construction and
transportation employees of the Tandang Sora
campus. Thus, the computation of the quorum should
be based on the rank and file motor pool,
construction and transportation employees of the
Tandang Sora campus and not on all the employees
in St. James’ five campuses. x x x The motor pool,
construction and transportation employees of the
Tandang Sora campus had 149 qualified voters at the
time of the certification election. Hence, the 149
qualified voters should be used to determine the
existence of a quorum. Since a majority or 84 out of
the 149 qualified voters cast their votes, a quorum
existed in the certification election.
Coastal Subic Bay Terminal v. DOLE,
November 20, 2006
The petitioner contends that applying by analogy, the
doctrine of piercing the veil of corporate fiction,
APOSTEU and ALU are the same federation. Private
respondents disagree. First, as earlier discoursed,
once a labor union attains the status of a legitimate
labor organization, it continues as such until its
certificate of registration is cancelled or revoked in an
independent action for cancellation. In addition, the
legal personality of a labor organization cannot be
collaterally attacked. Thus, when the personality of
the labor organization is questioned in the same
manner the veil of corporate fiction is pierced, the
action partakes the nature of a collateral attack.
Hence, in the absence of any independent action for
cancellation of registration against either APSOTEU or
28
ALU, and unless and until their registrations are
cancelled, each continues to possess a separate legal
personality. The CSBTI-RFU and CSBTI-SU are
therefore affiliated with distinct and separate
federations, despite the commonalities of APSOTEU
and ALU.
Under the rules implementing the Labor Code, a
chartered local union acquires legal personality
through the charter certificate issued by a duly
registered federation or national union, and reported
to the Regional Office in accordance with the rules
implementing the Labor Code. A local union does not
owe its existence to the federation with which it is
affiliated. It is a separate and distinct voluntary
association owing its creation to the will of its
members. Mere affiliation does not divest the local
union of its own personality, neither does it give the
mother federation the license to act independently of
the local union. It only gives rise to a contract of
agency, where the former acts in representation of
the latter. Hence, local unions are considered
principals while the federation is deemed to be
merely their agent. As such principals, the unions are
entitled to exercise the rights and privileges of a
legitimate labor organization, including the right to
seek certification as the sole and exclusive bargaining
agent in the appropriate employer unit.
DHL Phils. United Rank and File
Association v. Buklod ng Manggagawa
ng DHL Phils., July 22, 2004
Petitioner argues that the CA gravely erred in
rendering that the withdrawal of a great majority of
the members of petitioner provided a compelling
reason to conduct a certification election anew in
order to determine, once and for all, which union
reflected their choice, considering that no protest or
challenge had been formalized within five days, or
raised during the election proceedings and entered in
the minutes thereof. Petitioner adds that respondent
did not file any protest, either, against the alleged
fraud and misrepresentation by the former’s officers
during the election. We disagree. When the
medarbiter admitted and gave due course to
respondent’s Petition for nullification of the election
proceedings, the election officer should have deferred
issuing the Certification of the results thereof. Section
13 of the Implementing Rules cannot strictly be
applied to the present case.
Respondent’s contention is that a number of
employees were lured by their officers into believing
that petitioner was an independent union. Since the
employees had long desired to have an independent
union that would represent them in collective
bargaining, they voted “yes” in favor of petitioner.
Having been misled, a majority of them eventually
disaffiliated themselves from it and formed an
independent union, respondent herein, which
thereafter protested the conduct of the election.
Having been formed just after such exercise by the
defrauded employees who were former members of
petitioner, respondent could not have reasonably
filed its protest within five days from the close of the
election proceedings. The circumstances in the
present case show that the employees did not sleep
on their rights. Hence, their failure to follow strictly
the procedural technicalities regarding the period for
filing their protest should not be taken against them.
Mere technicalities should not be allowed to prevail
over the welfare of the workers. What is essential is
that they be accorded an opportunity to determine
freely and intelligently which labor organization shall
act on their behalf. Having been denied this
opportunity by the betrayal committed by petitioner’s
officers in the present case, the employees were
prevented from making an intelligent and
independent choice.
Sugbuanon Rural Bank, Inc. v
Laguesma, February 2, 2000
One of the rights of a legitimate labor organization
under Article 242(b) of the Labor Code is the right to
be certified as the exclusive representative of all
employees in an appropriate bargaining unit for
purposes of collective bargaining. Having complied
with the requirements of Art. 234, it is our view that
respondent union is a legitimate labor union. Article
257 of the Labor Code mandates that a certification
election shall automatically be conducted by the
MedArbiter upon the filing of a petition by a
legitimate labor organization. Nothing is said therein
that prohibits such automatic conduct of the
certification election if the management appeals on
the issue of the validity of the union’s registration. On
this score, petitioner’s appeal was correctly
dismissed.
Sta. Lucia East Commercial Corporation
v. Hon. Secretary of Labor, August 14,
2009
CLUP instituted a petition for certification election
among rank and file employees of SLECC and its
affiliates. This was dismissed by the Med-Arbiter, thus
the union re-organized as CLUP-SLECCWA limiting
their membership to rank and file employees of
SLECC only. The new union then filed with the DOLE a
petition for certification election. A motion to dismiss
was filed by SLECC alleging that it has voluntarily
recognized SMSLEC as exclusive bargaining agent of
its rank and file employees and that collective
bargaining negotiations already commenced between
29
them. The Med-Arbiter dismissed the petition, which
was however reversed by the SOLE and later affirmed
by the CA.
The SC said that the union’s certification should not
be cancelled for representing the wrong bargaining
unit. The union initially had a problem because they
are a legitimate labor organization but represented a
non-appropriate bargaining unit. When the union
subsequently re-registered limiting its members to
rank and file employees of SLECC, SLECC cannot now
ignore that the union was a legitimate labor
organization. Representing the wrong bargaining unit
is not a ground for cancellation unless it was
attended by misrepresentation, false statement, or
fraud. The Court further held that the recognition of
SMSLEC by SLECC was not valid. An employer may
voluntarily recognize the representation status of a
union in an unorganized establishments. However,
SLECC is not an unorganized establishment when it
voluntarily recognized SMSLEC as its exclusive
bargaining representative.
NOTE: Voluntary recognition and SEBA certification is
only allowed in unorganized unions.
[SUPRA] Samma–Likha v. Samma
Corporation, March 13, 2009
The erroneous inclusion of one supervisory employee
in the union is not a ground to impugn the legitimacy
of a legitimate labor organization which had the right
to file a petition for certification election. With the
certificates of registration issued in favor of
petitioner, they are clothed with legal personality as a
legitimate labor organizations. Moreover, such legal
personality cannot thereafter be subject to collateral
attack, but may be questioned only in an
independent petition for cancellation of certificates of
registration. Even though the DOLE initially revoked
the petitioner’s charter certificate, petitioner has
moved for its reconsideration of such resolution.
Chris Garments Corporation v. Hon.
Patricia A. Sto Tomas and Chris
Garments Workers Union-PTGWO,
January 12, 2009
The union filed a petition for certification election
with the Med-Arbiter. The union sought to represent
petitioner’s rank and file employees not covered by
its CBA with SMCGC-SUPER. Petitioner moved to
dismiss the petition arguing that it has an existing
CBA with SMCGC-SUPER which bars any petition for
certification prior to the 60 day freedom period. It
also argued that the union members are not its
regular employees since they are direct employees of
qualified and independent contractors. The petition
was intially dismissed claiming that there was not
employer-employee relationship between the parties
as admitted by the union that the members are
agency employees. When the union filed a second
petition for certification election, it was dismissed
stating that it was barred by prior judgment. On its
third petition for certification election, the SOLE
granted the petition subject to the usual pre-election
conference. When the case eventually reached the
SC, the SC held that the case was not barred by res
judicata. It ruled that there was no identity of parties,
subject matter, and causes of action. In this case, the
SOLE dismissed the first petition as it was filed
outside the 60 day freedom period. During that time,
the union has no cause of action since they are not
yet legally allowed to challenge openly and formally
the status of SMCGC-SUPER. The dismissal has not
bearing in the case since the third petition was filed
within the 60 day freedom period.
[SUPRA] National Union of Workers in
Hotels, Restaurants and Allied
Industries- Manila Pavilion Hotel Chapter
v. Secretary of Labor, July 31, 2009
Under the so-called “double majority rule” for there
to be a valid certification election, majority of the
bargaining unit must have voted and the winning
union must have garnered majority of the valid votes
cast; Majority is 50% + 1.—As to whether HIMPHLU
should be certified as the exclusive bargaining agent,
the Court rules in the negative. It is well- settled that
under the so-called “double majority rule,” for there
to be a valid certification election, majority of the
bargaining unit must have voted AND the winning
union must have garnered majority of the valid votes
cast. From the Court’s ruling that all the probationary
employees’ votes should be deemed valid votes while
that of the supervisory employees should be
excluded, it follows that the number of valid votes
cast would increase—from 321 to 337.
Art. 256 of the Labor Code provides that the union
obtaining the majority of the valid votes cast by the
eligible voters shall be certified as the sole and
exclusive bargaining agent of all the workers in the
appropriate bargaining unit. This majority is 50% + 1.
Hence, 50% of 337 is 168.5 + 1 or at least 170.
Furthermore, period of reckoning in determining who
shall be included in the list of eligible voters is in
cases where a timely appeal has been filed from the
Order of the MedArbiter, the date when the Order of
the Secretary of Labor and Employment, whether
affirming or denying the appeal, becomes final and
executory. The provision in the CBA disqualifying
probationary employees from voting cannot override
the Constitutionally- protected right of workers to self
organization, as well as the provisions of the Labor
30
Code and its Implementing Rules on certification
elections and jurisprudence.
[SUPRA] Eagle Ridge Golf and Country
Club v. CA, March 18, 2010
hen the Union applied for registration, there were 30
employees so it complied with the 20% membership
requirement under Article 234(c). 20% of 112 rank
and file employees in Eagle Ridge would require a
union membership of at least 22 employees, thus
when the certification of registration was granted, the
Union had complied with said requirement.
Furthermore, the admission of new members is
neither prohibited by law nor was it concealed in its
application for registration.
[SUPRA] PICOP Resources, Inc. v.
Tañeca, August 9, 2010
At the expiration of the freedom period (60 days from
the termination of CBA), the employer shall continue
to recognize the majority status of the incumbent
bargaining agent where no petition for certification
election is filed. While it is incumbent for the
employer to continue to recognize the majority status
of the incumbent bargaining agent even after the
expiration of the freedom period, they could only do
so when no petition for certification election was filed.
representative.The provision for status quo is
conditioned on the fact that no certification election
was filed during the freedom period. In the instant
case, a petition for certification election was already
ordered by the Med Arbiter so that at the expiration
of the freedom period, PRI’s obligation to recognize
NAMAPRI-APFL as the incumbent bargaining agent
does not hold true when petitions for certification
election were filed like this case. Moreover, the last
sentence of Article 253 which provides for automatic
renewal pertains only to the economic provisions of
the CBA. When there is a representational issue, the
status quo provision in so far as the need to await the
creation of a new agreement will not apply.
[SUPRA]Legend International Resorts v.
Kilusang Manggagawa ng Legend,
February 23, 2011
An order to hold a certification election is proper
despite the pendency of the petition for cancellation
of the registration certificate of the respondent union.
The rationale for this is that at the time the
respondent union filed its petition, it still had the legal
personality to perform such act absent an order
directing a cancellation. Thus, The cancellation of
KMLs certificate of registration should not retroact to
the time of its issuance. The legitimacy of the legal
personality of KML cannot be collaterally attacked in
a petition for certification election, but may be
questioned only in an independent petition for
cancellation based on Section 5, Rule V of the
Implementing Rules of Book V.
Bars to Certification Election
NOTE: Please read Omnibus Rules, Book V, Rule VIII,
Sections 14-15, Rule XVII, Section 7 as amended by
D.O. 40-03
Article 238, Labor Code. 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.
(As amended by Sec. 15, Rep. Act. No. 6715, March
21, 1989).
WHAT ARE THE BARS?
1. CONTRACT BAR RULE - provides that while a
valid and registered CBA is subsisting, the
Bureau is not allowed to hold an election
contesting the majority status of the
incumbent union.
2. CERTIFICATION YEAR BAR RULE OR ELECTION
BAR RULE - provides that no petition for a CE
may be filed within one year from the date of
a valid certification, consent, or run-off
election. Thus if an election had been held
but not one of the unions won, a PCE may be
filed again but only after 12 mos. The same
ban shall apply even if “NO UNION” won in
the previous election. The purpose of this bar
is to give a chance to the union to conclude a
CBA with the employer within 1-year. If the 1-
year lapsed and no CBA was concluded BUT
without the fault of the union, then the bar
still applies.
3. DEADLOCK BAR RULE - that a PCE can only be
entertained if there is no pending bargaining
deadlock submitted to conciliation or
arbitration or had become the subject of a
valid notice of strike or lockout. The principal
purpose is to ensure stability in the
relationship of the workers and the
management.
Collective Bargaining
NOTE: Please read Omnibus Rules, Book V, Rule I,
Section 1 (d, h, j, t, bbb), Rules XVI-XVII, as amended
by D.O. 40-03; and
Omnibus Rules, Book V, Rules XIX-XXI, as amended by
D.O. 40-03;
31
Article 261, Labor Code. 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 ten (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 ten (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.
Article 262, Labor Code. Duty to bargain
collectively in the absence of collective bargaining
agreements. - In the absence of an agreement or
other voluntary arrangement providing for a more
expeditious manner of collective bargaining, it shall
be the duty of employer and the representatives of
the employees to bargain collectively in
accordance with the provisions of this Code.
Article 263, Labor Code. Meaning of duty to
bargain collectively. - The duty to bargain
collectively means the performance of a mutual
obligation to meet and convene promptly and
expeditiously in good faith for the purpose of
negotiating an agreement with respect to wages,
hours of work and all other terms and conditions of
employment including proposals for adjusting any
grievances or questions arising under such
agreement and executing a contract incorporating
such agreements if requested by either party but
such duty does not compel any party to agree to a
proposal or to make any concession.
Article 264, Labor Code. Duty to bargain
collectively when there exists a collective
bargaining agreement. - When there is a collective
bargaining agreement, the duty to bargain
collectively shall also mean that neither party shall
terminate nor modify such agreement during its
lifetime. However, either party can serve a written
notice to terminate or modify the agreement at
least sixty (60) days prior to its expiration date. It
shall be the duty of both parties to keep the status
quo and to continue in full force and effect the
terms and conditions of the existing agreement
during the 60-day period and/or until a new
agreement is reached by the parties.
Article 265, Labor Code. 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 five (5) years. No petition
questioning the majority status of the incumbent
bargaining agent shall be entertained and no
certification election shall be conducted by the
Department of Labor and Employment outside of
the sixty-day period immediately before the date of
expiry of such five-year term of the Collective
Bargaining Agreement. All other provisions of the
Collective Bargaining Agreement shall be
renegotiated not later than three (3) years after its
execution.
Any agreement on such other provisions of the
Collective Bargaining Agreement entered into
within six (6) months from the date of expiry of the
term of such other provisions as fixed in such
Collective Bargaining Agreement, shall retroact to
the day immediately following such date. If any
such agreement is entered into beyond six months,
the parties shall agree on the duration of
retroactivity thereof. In case of a deadlock in the
renegotiation of the Collective Bargaining
Agreement, the parties may exercise their rights
under this Code.
Article 266, Labor Code. 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.
Article 237, Labor Code. Registry of unions and
file of collective bargaining agreements. - The
Bureau shall keep a registry of legitimate labor
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
32
Collective Bargaining Agreement, the parties shall
submit copies of the same directly to the Bureau or
the 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.
Article 219(n), Labor Code. Definitions -
(n) "Voluntary Arbitrator" means any person
accredited by the Board as such or any person
named or designated in the Collective Bargaining
Agreement by the parties to act as their Voluntary
Arbitrator, or one chosen with or without the
assistance of the National Conciliation and
Mediation Board, pursuant to a selection procedure
agreed upon in the Collective Bargaining
Agreement, or any official that may be authorized
by the Secretary of Labor and Employment to act
as Voluntary Arbitrator upon the written request
and agreement of the parties to a labor dispute.
Article 273, Labor Code. 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.
Article 274, Labor Code. 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 the
Grievance Machinery or Voluntary Arbitration
provided in the Collective Bargaining Agreement.
Article 275, Labor Code. 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.
Article 292, Labor Code. Miscellaneous
provisions. -
(f) A special Voluntary Arbitration Fund is hereby
established in the Board to subsidize the cost of voluntary
33
arbitration in cases involving the interpretation and
implementation of the Collective Bargaining Agreement,
including the Arbitrator’s fees, and for such other
related purposes to promote and develop voluntary
arbitration. The Board shall administer the Special
Voluntary Arbitration Fund in accordance with the
guidelines it may adopt upon the recommendation of the
Council, which guidelines shall be subject to the approval
of the Secretary of Labor and Employment. Continuing
funds needed for this purpose in the initial yearly amount
of fifteen million pesos (P15,000,000.00) shall be provided
in the 1989 annual general appropriations acts.
The amount of subsidy in appropriate cases shall
be determined by the Board in accordance with
established guidelines issued by it upon the
recommendation of the Council.
The Fund shall also be utilized for the operation of
the Council, the training and education of Voluntary
Arbitrators, and the Voluntary Arbitration Program.
(g) The Ministry shall help promote and gradually
develop, with the agreement of labor organizations
and employers, labor-management cooperation
programs at appropriate levels of the enterprise
based on the shared responsibility and mutual
respect in order to ensure industrial peace and
improvement in productivity, working conditions
and the quality of working life.
(h) In establishments where no legitimate labor
organization exists, labor-management committees
may be formed voluntarily by workers and
employers for the purpose of promoting industrial
peace. The Department of Labor and Employment
shall endeavor to enlighten and educate the
workers and employers on their rights and
responsibilities through labor education with
emphasis on the policy thrusts of this Code.
Union of Filipro Employees v. Nestle
Phils., March 3, 2008
The Union and Nestle negotiated for a new CBA but
failed to reach agreement after 15 meetings. The
Union argues that Nestle’s refusal to bargain on a
very important CBA economic provision constitutes
unfair labor practice. The Court held that the purpose
of collective bargaining is the reaching of an
agreement resulting in a contract binding on the
parties; but the failure to reach an agreement after
negotiations have continued for a reasonable period
does not establish a lack of good faith. The duty to
bargain does not include the obligation to reach an
agreement. Here, Nestle never refused to bargain
collectively with the union. The corporation simply
wanted to exclude the Retirement Plan from the
issues to be taken up during CBA negotiations, on the
postulation that such was in the nature of a
unilaterally granted benefit.
PAL v. PALEA, March 12, 2008
PAL and PALEA entered into a CBA. The agreement
provides for the 13th month bay and the Christmas
bonus of rank and file employees. Prior to the
payment, PAL released a guideline to which it
provides the eligibility of an employee for the benefit.
However, PALEA assailed the implementation of the
guideline. It was alleged by PALEA that all employees,
regular as well as non-regular must be paid their 13th
month pay. PALEA filed a labor complaint for unfair
labor practice. The complaint interposed that cut-off
period for regularization should not be used as
parameter for the granting of 13th month pay. The SC
held that the CBA between the parties clearly reveals
that Art. 1, Section 3 of the said agreement made its
provisions applicable to all employees, without
distinguishing whether regular or not, in the
bargaining unit. The CBA extends to the laborers and
employees in the collective bargaining agreement,
including those who do not belong to the chosen
bargaining labor organization. Otherwise there would
be discrimination. Hence, the benefits of the CBA
should be given to all employees who are members of
the bargaining unit, not necessarily of the labor
organization designated as the bargaining unit.
San Miguel Foods v. San Miguel
Corporation Employees Union, October
5, 2007
Union filed a case for ULP against the Company for
violating the CBA, specifically in violating the Job
Security provision by committing wanton
discrimination in matters of promotion within the
FInance Department and in violating the Grievance
Machinery provision by not immediately acting upon
the complaint the union filed. The Company
questions the jurisdiction of the LA or the NLRC in
hearing the case, reasoning that the issues raised in
the case are grievance issues. The Court ruled in
favor of the Union, and held that the LA/NLRC can
hear this case. It held that for a ULP case to be
cognizable by the LA, and the NLRC to exercise its
appellate jurisdiction, the allegations in the complaint
should show prima facie the concurrence of 2 things,
namely:
(1) gross violation of the CBA; AND
(2) the violation pertains to the economic
provisions of the CBA.
In this case, the Union charges the Company to have
violated the grievance machinery provision in the
CBA. The grievance machinery provision in the CBA is
not an economic provision, however, hence, the
second requirement for a LA to exercise jurisdiction of
a ULP is not present. However, the Union likewise
charges the Company to have violated the Job
Security provision in the CBA, specifically the
34
seniority rule. Since the seniority rule in the
promotion of employees has a bearing on salary and
benefits, it may, following a liberal construction of
Article 261 of the Labor Code, be considered an
economic provision of the CBA. This charge is a gross
or flagrant violation of the seniority rule under the
CBA. And so, it is a ULP over which the LA has
jurisdiction.
Capitol Medical Center v. Trajano, June
30, 2005
Capital Medical Center argues that its petition for
cancellation of the Union’s certificate of registration
involved a prejudicial question to be settled first
before the Secretary of Labor could order the parties
to bargain collectively. The Court held in the negative.
Pendency of a petition for cancellation does not
preclude collective bargaining. Unless the certificate
of registration and its status as the certified
bargaining agent are revoked, Capitol Medical Center
is duty bound to collectively bargain with the Union.
Reason for this ruling: the Union still has legal
personality.
Standard Chartered Bank Employees
Union v. Confesor, June 16, 2004
Before the commencement of negotiations, the Union
suggested that the bank lawyers should be excluded
from the negotiating team. The Bank agreed but also
suggested that the President of the Union be
excluded from the Union’s negotiating panel.
However, the President was retained as member.
Both parties failed to agree on some economic
provisions, thus, the Union declared a deadlock. The
Bank filed a case of ULP against the Union. However,
the Union argues that the company’s interference in
the choice of the bargaining panel is tantamount to
ULP. Court held that it is NOT ULP because it does not
show that the suggestion to exclude the President
was an anti-union conduct.
ULP is committed when the ER interferes in the
selection of its negotiators or coerces the Union to
exclude from its panel of negotiators a representative
of the Union, and if it can be inferred that the ER
adopted the said act to yield adverse effects on the
free exercise to right to self-organization or on the
right to collective bargaining of the EEs.
General Milling Corporation v. CA,
February 11, 2004
The GMC and the union executed a CBA. A day before
the expiration of the CBA, the union sent a proposal.
A counter-proposal was not given by the company
claiming that it receive withdrawals from union
members on account of religious affiliation. The
company said there is no basis for negotiation
because the union lost its legal personality on
account of disaffiliation or resignation of union
members. The SC said that the company should have
entered into collective bargaining with the union. The
law mandates that the representation provisions of
the CBA last for 5 years. The relationship between
labor and management should be undisturbed until
the last 60 days of the 5th year. When the union
requested for a renegotiation of the economic terms
of the CBA, it was still the certified collective
bargaining agent of the workers since it was seeking
renegotiation within 5 years from the date of
effectivity of the CBA. The union’s proposal was
submitted within the prescribed 3 year period from
the date of effectivity of the CBA. GMC has no valid
reason to refuse to negotiate in good faith with the
union. For refusing to send a counter-proposal to the
union and to bargain anew on the economic terms of
the CBA, the company committed an unfair labor
practice. MC’s failure to make a timely reply to the
proposals presented by the union is indicative of its
utter lack of interest in bargaining with the union.
Halagueña, et al., and other flight
attendants of Philippine Airlines v.
Philippine • Airlines, October 2, 2009
Female flight attendants, employed under PAL,
argued that the provision on compulsory retirement
for females is discriminatory (55 y/o: Females; 60 y/o:
Males). They filed a special civil action for declaratory
relief with the RTC to question the constitutionality of
SEc. 144, Part A of the CBA. RTC held that it has
jurisdiction over the case; however, the CA reversed
it. Thus, Halaguena, et. al. filed this case before SC,
arguing that the RTC has jurisdiction over this case.
SC held that the RTC has jurisdiction because the
issue of constitutionality of the CBA provision is
incapable of pecuniary estimation - exclusively
cognizable by the RTC. Also, this dispute is between
PAL and the female flight attendants, not the Union.
Thus, referral to the grievance machinery and
voluntary arbitration would not serve the best
interest of Halaguena, et. al.
PASSI v. Boclot, September 28, 2007
Boclot claims that he has attained the status of a
regular employee pursuant to the CBA provision
which states that the company agrees to convert to
regular status all incumbent probationary or casual
employees and workers who have served the
company for an accumulated service term of
employment of not less than 6 months. Court held
that he has attained regular status based on the CBA,
and not on the Labor Code.
35

FVCLUPTGWO v. Sama-Samang
Nagkakaisang Manggagawa Sa FVC-
Solidarity Of Independent And General
Labor Organizations (SANAMA-FVC-
SIGLO), November 27, 2009
At the end of the 3rd year of the CBA, FVC (the union)
and the company re-negotiated and agreed to extend
the duration of the CBA to 4 more months: original is
Jan. 30, 2003 and now it is May 31, 2003. Then,
another Union, Sanama, filed a petition for
certification election with the DOLE 9 days before Jan.
30, 2003. FVC argues that its exclusive bargaining
representation status should be in accord with the
term of its CBA and that such status can only be
challenged within 60 days before the expiration of
said term. Court held that even if there is an
agreement, the exclusive bargaining status if
effective for only 5 years. Although said amendment
in the CBA is legal, it will have no effect on FVC’s
representation status which will be only up to Jan. 30,
2003. Representation status is a legal matter not for
the workplace parties to agree upon.
RFM Corporation v. KAMPI-NAFLU-KMU,
February 4, 2009
Sec. 3 of their CBA provides that the company agrees
to make payment to all daily paid employees, in
respect of any of the days enumerated hereunto if
declared as special holidays by the national
government. Now, during the 1st year of the
effectivity of the CBA, Dec. 31, which fell on a Sunday
(rest day) was declared by the national government
as a special holiday. The Union claimed payment
invoking Sec. 3 but RFM refused, saying that Dec. 31
was NOT compensable since it was a rest day.
Court held that if the terms of a CBA are clear and
have no doubt upon the intention of the contracting
parties, as in this case, the literal meaning thereof
shall prevail. Thus, as daily-paid employees must be
paid their regular salaries on the holidays which are
so declared by the national government, regardless of
whether they fall on rest days. The CBA is the law
between the parties, hence, they are obliged to
comply with its provisions.
[SUPRA] Fulache v. ABS-CBN, GR No.
183810, January 21, 2010
Petitioners claim to be regular employees of ABS CBN
and, thus, are entitled to the CBA benefits. The CBA
expressly provides that regular rank-and-file
employees are its coverage. Court held that they are
regular employees as their functions are necessary
and indispensable in the business of the company.
Thus, are regular rank-and-file employees, they fall
within the CBA coverage under the CBA’s express
terms, and are entitled to its benefits.
Employees Union of Bayer v. Bayer
Phils., December 6, 2010
A group of employees dissented from Union 1 which
was the EBR of Bayer, and made their own union
(Union 2) with the support of majority of Union 1’s
members. This resulted to a conflict between Union 1
and Union 2. Bayer, then, became confused as to
which union they should remit the union dues. In the
end, they remitted this to Union 2. Bayer also signed
a new CBA with Union 2, despite the existence of
their current CBA with Union 1. And so, Union 1 filed a
case for ULP against Bayer. The Court held that Bayer
is guilty of ULP. It must be remembered that a CBA is
entered into in order to foster stability and mutual
cooperation between labor and capital. An employer
should not be allowed to rescind unilaterally its CBA
with the duly certified bargaining agent it had
previously contracted with, and decide to bargain
anew with a different group if there is no legitimate
reason for doing so and without first following the
proper procedure. If such behavior would be
tolerated, bargaining and negotiations between the
employer and the union will never be truthful and
meaningful, and no CBA forged after arduous
negotiations will ever be honored or be relied upon.
The Court also defined an intra-union dispute.
Accordingly, this 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. The case against Bayer by Union 1 is not an
intra-union dispute. It is a ULP, so the LA has
jurisdiction over the same. However, the case against
Union 2 is an intra-union dispute; and was correctly
dismissed for lack of jurisdiction.
The Court also ruled that, despite the issue being
moot and academic since the Company later on
recognized Union 1 as the EBR of its R&F employees,
the complaint should still not be dismissed. A
legitimate labor organization cannot be construed to
have abandoned its pending claim against the
employer by returning to the negotiating table to
fulfill its duty to represent the interest of its
members, except when the pending claim has been
expressly waived or compromised in its subsequent
negotiations with the management. Also, Bayer’s
later action did not obliterate the fact that the
management of Bayer had withdrawn its recognition
of Union 1 and supported Union 2.
36

General Milling Corp. Independent Labor
Union v. General Milling, June 15, 2011
The CA here imposed to the employer the proposed
CBA of the union, stating that the provision of such
agreement will take effect in the remaining two years
of the old CBA (to expire in 1993). Thereafter the
union asked for a computation of their benefits before
the Executive LA. The union questioned the exclusion
of beneficiaries made by the Executive LA, given that
she excluded new employees hired after Nov. 30,
1993. Court ruled that the computation was proper,
stating that the covered employees should be limited
only to those who were employed by GMC. So those
hired after the expiration of the two year period
should be excluded from the computation, pursuant
to the ruling of the CA. The grievance procedure of
the CBA also provided for those who are covered by
the CBA, which served as basis for the Executive LA
in its exclusion of beneficiaries.
Malayan Employees Association v.
Malayan Insurance Co., February 2,
2010
A provision in the CBA allows union officials to avail of
union leaves with pay for 90 days per year for
purposes of attending grievance meetings and other
union activities. The company issued a rule requiring
prior notice and prior approval by the department
heads before members can avail. This was placed
without any objection from the union until an officer’s
file for leave was disapproved. He still took his leave
but he was eventually suspended from work. Court
held that this regulation was accepted by the union,
and the rule on its face is not unreasonable,
oppressive nor violative of the CBA terms. The union
members have also willingly applied for approval as
the rule requires. The rule cannot be removed except
with the company’s consent, or by negotiation and
express agreement in future CBAs.
Santuyo v. Remerco Garments, March
22, 2010
Petitioners were questioning the legality of RGMI’s
adoption of new salary scheme. The labor arbiter
assumed jurisdiction over the case and rendered a
decision granting the claims of the union. RGMI
appealed to the NLRC which reversed the LA.
However, the CA reversed the NLRC and held that the
Labor Arbiter had no jurisdiction over the complaint.
SC held that the LA did NOT have jurisdiction over the
complaint. Under Art. 217 of the Labor Code, cases
arising from the interpretation or implementation of
CBAs and those arising from the interpretation or
enforcement of company personnel policies shall be
disposed of by the LA by referring the same to the
grievance machinery and voluntary arbitration as
may be provided in said agreements. Thus, the LA
should have referred the matter to the grievance
machinery provided in the CBA.
Insular Hotel Employees Union v.
Waterfront Insular Hotel, September 22,
2010
If the individual members of the Union have no
authority to file the case, does the federation to
which the local union is affiliated have the standing to
do so? On this note, Coastal Subic Bay Terminal, Inc.
v. Department of Labor and Employment, 507 SCRA
300 (2006), is enlightening, thus: x x x A local union
does not owe its existence to the federation with
which it is affiliated. It is a separate and distinct
voluntary association owing its creation to the will of
its members. Mere affiliation does not divest the local
union of its own personality, neither does it give the
mother federation the license to act independently of
the local union. It only gives rise to a contract of
agency, where the former acts in representation of
the latter. Hence, local unions are considered
principals while the federation is deemed to be
merely their agent. x x x Based on the foregoing, this
Court agrees with approval with the disquisition of
the CA when it ruled that NFL had no authority to file
the complaint in behalf of the individual employees.
Petitioners have not been duly authorized to
represent the union. In Atlas Farms v. NLRC: X x x
Pursuant to Art 260, the parties to a CBA shall name
or designate their respective representatives to the
grievance machinery and if the grievance is unsettled
in that level, it shall automatically be referred to the
voluntary arbitrators designated in advance by
parties to a CBA.
The CBA recognizes that DIHFEU-NFL is the exclusive
bargaining representative of all permanent
employees. The inclusion of the word "NFL" after the
name of the local union merely stresses that the local
union is NFL's affiliate. It does not, however, mean
that the local union cannot stand on its own. The
local union owes its creation and continued existence
to the will of its members and not to the federation to
which it belongs.
Cirtek Employees Labor Union v. Cirtek
Electronics, November 15, 2010
The Secretary of Labor (SoL) resolved the CBA
deadlock by awarding a wage increase of from P6.00
to P10.00 per day effective Jan. 1, 2004 and from
P9.00 to P15.00 per day effective Jan. 1, 2005 and
adopting all other benefits as embodied in the MOA.
37
SC held that the SoL may resolve all issues involved
in the controversy including the award of wage
increases and benefits, pursuant to Art. 263(g), LC.
While an arbitral award cannot per se be categorized
as an agreement voluntarily entered into by the
parties because it requires the intervention and
imposing power of the State thru the SoL when he
assumes jurisdiction, the arbitral award can be
considered an approximation of a CBA which would
otherwise have been entered into by the parties,
hence, it has the force and effect of a valid contract
obligation.
Eastern Telecoms v. Eastern Telecoms
Employees Union, February 8, 2012
Respondent union has a CBA with petitioner
corporation. The agreement is about to expire in
2004, with a side agreement signed on 2001. The
company deferred the payment of the 14th, 15th,
and 16th month bonuses because of the deteriorating
financial status. The deferment was opposed by the
union claiming that bonuses are mandated in the side
agreement and that the grant of bonuses has ripened
into company practice. On the other hand, the
company held that the grant of bonus is conditional
and based on the successful business performance
and the availability of company profits. The SC held
that the company is liable. A reading of the CBA side
agreement reveals that the giving of the bonuses
were without qualification. The said provision does
not state that the subject bonuses shall be made to
depend on the company’s financial standing or the
payment was contingent upon the realization of
profits. By virtue of its incorporation in the CBA side
agreements, the grant of the bonuses has become
more than just an act of generosity on the part of the
company but a contractual obligation it has
undertaken. Considering that the company had been
continuously suffering huge losses from 2000 to
2002, its business losses in the year 2003 were not
exactly unforeseen or unexpected. Thus, it cannot be
said that the difficulty in complying with its obligation
was manifestly beyond the contemplation of the
parties.
PNCC Skyway Traffic Management &
Security Division Workers Organization
v. PNCC Skyway Corp., February 17,
2010
In the CBA between PNCC and its Union, there was a
provision on VL which states that the company would
schedule the VLs of the employees, taking into
consideration their preference. There was also a
provision on their employees’ Security License,
saying that the employees would responsible for the
costs in renewing the same. Later, PNCC released a
Memorandum which scheduled the employees’ VLs.
The Court ruled that PNCC has the sole discretion to
schedule the vacation leave of the Union. If the terms
of a CBA are clear and leave no doubt upon the
intention of the contracting parties, the literal
meaning of its stipulation shall prevail. In fine, the
CBA must be strictly adhered to and respected if its
ends have to be achieved, being the law between the
parties. The rule of construction, that labor contracts
should be construed in favor of the laborer, does not
benefit the Union because, as stated, there is no
room for interpretation.
However, the Court ruled that PNCC has to pay for
the costs of their employees’ renewal of their
Security Licenses. This is because, while the CBA
states that the expenses for the renewal of licenses
must be on the personal account of the employee,
the 1994 Revised Rules and Regulations
Implementing R.A. No. 5487 provides that this is the
primary responsibility of the company. As such, PSC
should be liable for the same. Although it is a rule
that a contract freely entered into between the
parties should be respected, since a contract is the
law between the parties, there are, however, certain
exceptions to the rule, specifically Art. 1306 of the
Civil Code, which provides: The contracting parties
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.
Supreme Steel v. Nagkakaisang
Manggagawa sa Supreme, March 28,
2011
Union filed a notice of strike with the National
Conciliation and Mediation Board against petitioner
for alleged violations of their CBA which prohibited
contracting-out labor or the hiring of contractual
employees. Petitioner admitted that it hired
temporary employees, due to increase of job orders
from abroad, but claimed that the same was a
management prerogative
It is a familiar and fundamental doctrine in labor law
that the CBA is the law between the parties and
compliance therewith is mandated by the express
policy of the law. If the terms of a CBA are clear and
there is no doubt as to the intention of the
contracting parties, the literal meaning of its
stipulation shall prevail. Moreover, the CBA must be
construed liberally rather than narrowly and
technically and the Court must place a practical and
realistic construction upon it. Any doubt in the
interpretation of any law or provision affecting labor
should be resolved in favor of labor. Jurisprudence
recognizes the right to exercise management
38
prerogative. Labor laws also discourage interference
with an employer’s judgment in the conduct of its
business. For this reason, the Court often declines to
interfere in legitimate business decisions of
employers. The law must protect not only the welfare
of employees, but also the right of employers.
However, the exercise of management prerogative is
not unlimited. Managerial prerogatives are subject to
limitations provided by law, collective bargaining
agreements, and general principles of fair play and
justice.
Wesleyan University v. Wesleyan
University Faculty and Staff Association,
March 12, 2014
A memorandum providing guidelines on the
implementation of vacation and sick leave credits and
vacation leave commutation was issued by Wesleyan
University. The respondent’s president wrote a letter
to the petitioner’s president informing him that it was
not amenable to the unilateral changes and that said
guidelines were violative of of the CBA. Like any other
contract, a CBA has the force of law between the
parties and should be complied with in good faith.
Unilateral changes for suspensions in the limitation of
the provisions of the CBA cannot be allowed without
the consent of both parties.
Philippine Airlines v. Hassaram, June 5,
2017
Under the CBA, Hassaram may claim two separate
plans: (a) the amount of P5,000 for every year of
service under the PAL-ALP AP Retirement Plan; and
(b) an equity equivalent to 240% of his gross monthly
salary for every year of employment pursuant to the
Plan. In contrast, Article 287 would entitle a retiring
pilot to the equivalent of only 22.5 days of his
monthly salary for every year of service.
Art. 287 is applicable only to a situation where (l)
there is no CBA or other applicable employment
contract providing for retirement benefits for an
employee, or (2) there is a CBA or other applicable
employment contract providing for retirement
benefits for an employee, but it is below the
requirement set by law. The rationale for the first
situation is to prevent the absurd situation where an
employee, deserving to receive retirement benefits, is
denied them through the nefarious scheme of
employers to deprive employees of the benefits due
them under existing labor laws. On the other hand,
the second situation aims to prevent private
contracts from derogating from the public law.
Unfair Labor Practices
Article 258, Labor Code. 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, attorney’s 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.
Article 259, Labor Code. 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 with-draw from one to which
he belongs;
(c) To contract out services or functions being
performed by union members when such will
39
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 attorney’s 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.
Article 260, Labor Code. Unfair labor practices
of labor organizations. - It shall be unfair labor
practice for a labor organization, its officers, agents
or representatives:
(a) To restrain or coerce employees in the exercise
of their right to self-organization. However, a labor
organization shall have the right to prescribe its
own rules with respect to the acquisition or
retention of membership;
(b) To cause or attempt to cause an employer to
discriminate against an employee, including
discrimination against an employee with respect to
whom membership in such organization has been
denied or to terminate an employee on any ground
other than the usual terms and conditions under
which membership or continuation of membership
is made available to other members;
(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 or
not to be performed, including the demand for fee
for union negotiations;
(e) To ask for or accept negotiation or attorney’s 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 associations or organizations
who have actually participated in, authorized or
ratified unfair labor practices shall be held
criminally liable.
Article 274, Labor Code. 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 the
Grievance Machinery or Voluntary Arbitration
provided in the Collective Bargaining Agreement.
[SUPRA] Employees Union of Bayer
Phils. v. Bayer Phils., December 6, 2010
Bayer is guilty of ULP. A CBA is entered into in order
to foster stability and mutual cooperation between
labor and capital. An employer should not be allowed
to rescind unilaterally its CBA with the duly certified
bargaining agent it had previously contracted with,
and decide to bargain anew with a different group if
there is no legitimate reason for doing so and without
first following the proper procedure. If such behavior
would be tolerated, bargaining and negotiations
40
between the employer and the union will never be
truthful and meaningful, and no CBA forged after
arduous negotiations will ever be honored or be relied
upon.
Prince Transport v. Garcia, January 12,
2011
In order to block the continued formation of the
union, PTI caused the transfer of all union members
and sympathizers to one of its sub-companies, Lubas
Transport (Lubas). Despite the transfer, the schedule
of bus drivers and conductors, their company IDs
were issued by PTI. The daily time records, tickets
and reports were also filed at the PTI office; and all
claims for salaries were transacted thereto. Later, the
business of Lubas deteriorated because of the refusal
of PTI to maintain and repair the units being used -
which resulted to the virtual stoppage of its
operations and respondents' loss of employment.
Respondents transfer of work assignments to Lubas
was designed by petitioners as a subterfuge to foil
the formers right to organize themselves into a union.
Under Article 248 (a) and (e) of the Labor Code, an
employer is guilty of unfair labor practice if it
interferes with, restrains or coerces its employees in
the exercise of their right to self-organization or if it
discriminates 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.
Indeed, evidence of petitioners' unfair labor practice
is shown by the established fact that, after
respondents' transfer to Lubas, petitioners left them
high and dry insofar as the operations of Lubas was
concerned. The Court ruled that petitioners withheld
the necessary financial and logistic support such as
spare parts, and repair and maintenance of the
transferred buses until only two units remained in
running condition. This left respondents virtually
jobless.
Manila Mining Employees Corp. v.
Manila Mining, September 29, 2010
MMC was compelled by the DENR to temporarily shut
down its mining operations due to its failure to secure
an Environmental Compliance Certificate, resulting in
the temporary lay-off of more than 400 employees in
the mine site.
The lay-off is neither illegal nor can it be considered
as unfair labor practice. Unfair labor practice cannot
be imputed to MMC since, as ruled by the Court of
Appeals, the call of MMC for a suspension of the CBA
negotiations cannot be equated to “refusal to
bargain.”
For a charge of unfair labor practice to prosper, it
must be shown that the employer was motivated by
ill-will, bad faith or fraud, or was oppressive to labor.
The employer must have acted in a manner contrary
to morals, good customs, or public policy causing
social humiliation, wounded feelings or grave anxiety.
While the law makes it an obligation for the employer
and the employees to bargain collectively with each
other, such compulsion does not include the
commitment to precipitately accept or agree to the
proposals of the other. All it contemplates is that both
parties should approach the negotiation with an open
mind and make reasonable effort to reach a common
ground of agreement.
The Union based its contention on the letter request
by MMC for the suspension of the collective
bargaining negotiations until it resumes operations.
Verily, it cannot be said that MMC deliberately
avoided the negotiation. It merely sought a
suspension and in fact, even expressed its willingness
to negotiate once the mining operations resume.
There was valid reliance on the suspension of mining
operations for the suspension, in turn, of the CBA
negotiation. The Union failed to prove bad faith in
MMC’s actuations.
Central Azucarera de Bais Employees
Union v. Central Azucarera de Bais, Nov.
17, 2010
For a charge of unfair labor practice to prosper, it
must be shown that CAB was motivated by ill will,
“bad faith, or fraud, or was oppressive to labor, or
done in a manner contrary to morals, good customs,
or public policy, and, of course, that social
humiliation, wounded feelings or grave anxiety
resulted x x x” in suspending negotiations with
CABEU-NFL. Notably, CAB believed that CABEU-NFL
was no longer the representative of the workers. It
just wanted to foster industrial peace by bowing to
the wishes of the overwhelming majority of its rank
and file workers and by negotiating and concluding in
good faith a CBA with CABELA.” Such actions of CAB
are nowhere tantamount to anti-unionism, the evil
sought to be punished in cases of unfair labor
practices.
Furthermore, basic is the principle that good faith is
presumed and he who alleges bad faith has the duty
to prove the same. By imputing bad faith to the
actuations of CAB, CABEU-NFL has the burden of
proof to present substantial evidence to support the
allegation of unfair labor practice. Apparently,
CABEU-NFL refers only to the circumstances
mentioned in the letter-response, namely, the
execution of the supposed CBA between CAB and
41
CABELA and the request to suspend the negotiations,
to conclude that bad faith attended CAB’s actions.
The Court is of the view that CABEU-NFL, in simply
relying on the said letter-response, failed to
substantiate its claim of unfair labor practice to rebut
the presumption of good faith.
Moreover, as correctly determined by the LA, the
filing of the complaint for unfair labor practice was
premature inasmuch as the issue of collective
bargaining is still pending before the NCMB.
BPI Employees Union-Davao v. BPI, July
24, 2013
In essence, the primordial issue in this case is
whether or not the act of BPI to outsource the
cashiering, distribution and bookkeeping functions to
BOMC is in conformity with the law and the existing
CBA. Particularly in dispute is the validity of the
transfer of twelve (12) former FEBTC employees to
BOMC, instead of being absorbed in BPI after the
corporate merger. The Union claims that a union shop
agreement is stipulated in the existing CBA. It is
unfair labor practice for employer to outsource the
positions in the existing bargaining unit, citing the
case of Shell Oil Workers’ Union v. Shell Company of
the Philippines, Ltd.. The Union’s reliance on the Shell
Case is misplaced. The rule now is covered by Article
261 of the Labor Code. Article 261 provides
Jurisdiction of Voluntary Arbitrators or panel of
Voluntary Arbitrators.—x x x Accordingly, violations of
a Collective Bargaining Agreement, except those
which are grossin 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. Clearly,
only gross violations of the economic provisions of
the CBA are treated as ULP. Otherwise, they are mere
grievances.
Pepsi Cola Products v. Molon et al.,
February 18, 2013
Pepis adopted a company wide retrenchment
program were 6 elected officers and 29 active
members of ALU were dismissed. ALU filed a notice of
strike alleging unfair labor practice. Eventually, a
return to work order was issued. The Company and
the union eventually executed an agreement wherein
the union will receive 100% separation pay and they
were made to sign a quitclaim. Despite suh,
complaints for illegal dismissal were still filed. The SC
ruled that the retrenchment program was valid.
Retrenchment was defined as the termination of
employment initiated by the employer through no
fault of the employee and without prejudice to the
latter, resorted by management during periods of
business recession, industrial depression, or seasonal
malfunctions or during lulls over shortage of
materials. The prerogative of an employer to retrench
its employees must be exercised only as a last resort,
considering that it will lead to the loss of the
employee’s livelihood. The following are the
requirements for retrenchment:
(a) The retrenchment is reasonably necessary ad
likely to prevent business losses and done in
good faith;
(b) The employer served written notice to both to
the employees and the DOLE at least 1
month prior to the intended date of
retrenchment;
(c) The employer pays the employees separation
pay;
(d) It is done in good faith for the advancement
of its interes and not to defeat or circumvent
the employees’ right to security of tenure;
and
(e) The employer used fair and reasonable
criteria in ascertaining who would be
dismissed and who would be retained among
the employees.
Royal Plant Workers Union v. Coca Cola
Bottlers, April 15, 2013
Union filed a case against Coke (company). They
claimed that the company’s act of taking away the
chairs it has provided the employees since 1974 was
invalid. The Court ruled that Coke’s act was valid. The
chairs were not removed indiscriminately. The
removal of the chairs was compensated by a
reduction of the operating hours and an increase of
the break period. The decision to remove the chairs
was done with good intentions as Coke wanted to
avoid instances of operators sleeping on the job while
in the performance of their duties and responsibilities
and because of the fact that the chairs were not
necessary considering that the operators constantly
move about while working. Hence, Coke’s exercise of
its management prerogative was made in good faith
without doing any harm to the workers’ rights. It did
not violate labor laws since there is no law that
requires employers to provide chairs for bottling
operators. It also did not violate their CBA. The CBA
between the Union and Coke contains no provision
whatsoever requiring the management to provide
chairs for the operators in the
production/manufacturing line while performing their
duties and responsibilities. Also, their CBA expressly
provides that benefits and/or privileges, not expressly
given therein but which are presently being granted
by the company and enjoyed by the employees, shall
be considered as purely voluntary acts by the
42
management and that the continuance of such
benefits and/or privileges, no matter how long or how
often, shall not be understood as establishing an
obligation on the company’s part. Since the matter of
the chairs is not expressly stated in the CBA, it is
understood that it was a purely voluntary act on the
part of Coke and the long practice did not convert it
into an obligation or a vested right in favor of the
Union.
Goya v. Goya Employees Union, January
21, 2013
Goya hired contractual employees from PESO
Resources Development Corporation. This prompted
Union to request for a grievance conference on the
ground that the contractual workers do not belong to
the categories of employees stipulated in their CBA
and contrary to the union security clause embodied in
it. The Union argued that Goya is guilty of ULP for
gross violation of the CBA.
Goya’s act of contracting out/outsourcing is
within the purview of management prerogative.
Both did not say, however, that such act is a valid
exercise thereof. Obviously, this is due to the
recognition that the CBA provisions agreed upon
by Goya and the Union delimit the free exercise
of management prerogative pertaining to the
hiring of contractual employees. A collective
bargaining agreement is the law between the parties.
A collective bargaining agreement or CBA refers to
the negotiated contract between a legitimate labor
organization and the employer concerning wages,
hours of work and all other terms and conditions of
employment in a bargaining unit. As in all contracts,
the parties in a CBA may establish such stipulations,
clauses, terms and conditions as they may deem
convenient provided these are not contrary to law,
morals, good customs, public order or public policy.
Thus, where the CBA is clear and unambiguous, it
becomes the law between the parties and compliance
therewith is mandated by the express policy of the
law.
T&H Shopfitters v. T&H Shopfitters
Workers Union, February 26, 2014
ULP relates to the commission of acts that transgress
the workers’ right to organize. As specified in now
Article 257 and now Article 258 of the Labor Code,
the prohibited acts must necessarily relate to the
workers’ right to self–organization. In the case of
Insular Life Assurance Co., Ltd. Employees
Association – NATU v. Insular Life Assurance Co. Ltd.,
this Court had occasion to lay down the test of
whether an employer has interfered with and coerced
employees in the exercise of their right to self–
organization, that is, whether the employer has
engaged in conduct which, it may reasonably be said,
tends to interfere with the free exercise of
employees’ rights; and that it is not necessary that
there be direct evidence that any employee was in
fact intimidated or coerced by statements of threats
of the employer if there is a reasonable inference that
anti–union conduct of the employer does have an
adverse effect on self–organization and collective
bargaining.
The questioned acts of petitioners: 1) sponsoring a
field trip to Zambales to the exclusion of union
members, before the election; 2) the active campaign
by the sales officer of petitioners against the union
prevailing as a bargaining agent during the field trip;
3) escorting its employees after the field trip to the
polling center; 4) the continuous hiring of
subcontractors performing their functions; 5)
assigning union members to the site to work as grass
cutters; and 6) the enforcement of work on a
rotational basis for union members, all reek of
interference on the part of petitioners.
The various acts of petitioners reasonably support an
inference that such were all orchestrated to restrict
respondents’ free exercise of their right to self–
organization. Petitioners’ undisputed actions prior and
immediately before the scheduled certification
election, while seemingly innocuous, unduly meddled
in the affairs of its employees in selecting their
exclusive bargaining representative.
Mendoza v. Officers of MWEU, January
25, 2016
Mendoza was a member of the MWEU consisting of
rank and file employees within Manila Water
Company. MWEU informed Mendoza that the union
was unable to fully deduct the increased P200 union
dues from his salary due to lack of the required
check-off authorization from him and that his failure
to pay the union dues would result in sanctions.
Consequently, MWEU scheduled an election of
officers and Mendoza filed his certificate of candidacy
for VP, but was disqualified for not being a member in
good standing on account of his suspension. Due to
his continued non-payment of union dues, he was
expelled from the union. During the freedom period,
Mendoza joined a new union, WATER-AFWC, wherein
he was elected Union President. LA dismissed
Mendoza’s complaint for ULP (wherein he claims that
he was suspended and expelled by MWEU illegally as
a result of the denial of his right to appeal his case to
the general membership assembly in accordance with
the union’s constitution and by-laws) against MWEU
on the ground that the complaint covers intra-union
disputes which CA, LA, NLRC do not have jurisdiction,
43
and that Mendoza failed to provide substantial
evidence on MWEU officers’ violations.
MWEU officers are guilty of ULP. While it is true that
some of the causes of action fall constitute intra-
union cases cognizable by the BLR, the charge of ULP
falls within the exclusive jurisdiction of the LA based
on Article 217. MWEU’s Constitution and By-Laws are
clear that when Mendoza received the letter
informing him of the suspension, he immediately filed
a written appeal that went unheeded; thereafter,
when he was charged for the third time and expelled,
his timely appeal was still unacted upon. As the
officers did not act on his two appeals, he was thus
suspended and deprived of his right to run for the VP
position and forced to join another union.
Strikes, Lockouts &
Concerted Actions
Read Omnibus Rules, Book V, Rule XXII, as amended
by D.O. 40-03, and further amended by D.O. 40-A,
D.O. 40-G-03 (2010), and D.O. 40-H-13 (2013)
Article 219(o), Labor Code.
(o) "Strike" means any temporary stoppage of work
by the concerted action of employees as a result of
an industrial or labor dispute.
Article 219(p), Labor Code.
(p) "Lockout" means any temporary refusal of an
employer to furnish work as a result of an industrial
or labor dispute.
Article 219(q), Labor Code.
(q) "Internal union dispute" includes all disputes or
grievances arising from any violation of or
disagreement over any provision of the constitution
and by laws of a union, including any violation of
the rights and conditions of union membership
provided for in this Code.
Article 219(r), Labor Code.
(r) "Strike-breaker" means any person who
obstructs, impedes, or interferes with by force,
violence, coercion, threats, or intimidation any
peaceful picketing affecting wages, hours or
conditions of work or in the exercise of the right of
self-organization or collective bargaining.
Article 219(s), Labor Code.
(s) "Strike area" means the establishment,
warehouses, depots, plants or offices, including the
sites or premises used as runaway shops, of the
employer struck against, as well as the immediate
vicinity actually used by picketing strikers in
moving to and fro before all points of entrance to
and exit from said establishment.
Article 266, Labor Code. 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.
Article 278, Labor Code. 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 their mutual benefit and
protection. The right of legitimate labor
organizations to strike and picket and of employers
to lockout, consistent with the national interest,
shall continue to be recognized and respected.
However, no labor union may strike and no
employer may declare a lockout on grounds
involving inter-union and intra-union disputes.
(c) In case of bargaining deadlocks, the duly
certified or recognized bargaining agent may file a
notice of strike or the employer may file a notice of
lockout with the Ministry at least 30 day before the
intended date thereof. In cases of unfair labor
practice, the period of 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 that
purpose. A decision to declare a lockout must be
approved by a majority of the board of directors of
the corporation or association or of the partners in
44
a partnership, obtained by secret ballot in a
meeting called for that purpose. The decision shall
be valid for the duration of the dispute based on
substantially the same grounds considered when
the strike or lockout vote was taken. The 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 intended or impending strike or
lockout as specified in the assumption or
certification order. If one has already taken place at
the time of 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 for 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 workforce 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 immediate 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 of
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.
(i) The Secretary of Labor and Employment, the
Commission or the voluntary arbitrator shall decide
or resolve the dispute, as the case may be. The
decision of the President, the Secretary of Labor
and Employment, the Commission or the voluntary
arbitrator shall be final and executory ten (10)
calendar days after receipt thereof by the parties.
Article 279, Labor Code. Prohibited activities. -
(a) No labor organization or employer shall declare
a strike or lockout without first having bargained
collectively in accordance with Title VII of this Book
or without first having filed the notice required in
the preceding Article or without the necessary
strike or lockout vote first having been obtained
and reported to the Ministry.
No strike or lockout shall be declared after
assumption of jurisdiction by the President or the
Minister or after certification or submission of the
dispute to compulsory or voluntary arbitration or
during the pendency of cases involving the same
grounds for the strike or lockout.
Any worker whose employment has been
terminated as a consequence of any unlawful
lockout shall be entitled to reinstatement with full
backwages. Any union officer who knowingly
participates in an illegal strike and any worker or
union officer who knowingly participates in the
commission of illegal acts during a strike may be
declared to have lost his employment status:
Provided, That mere participation of a worker in a
lawful strike shall not constitute sufficient ground
for termination of his employment, even if a
replacement had been hired by the employer
during such lawful strike.
(b) No person shall obstruct, impede, or interfere
with, by force, violence, coercion, threats or
intimidation, any peaceful picketing by employees
during any labor controversy or in the exercise of
the right to self-organization or collective
bargaining, or shall aid or abet such obstruction or
interference.
45

(c) No employer shall use or employ any strike-
breaker, nor shall any person be employed as a
strike-breaker.
(d) No public official or employee, including officers
and personnel of the New Armed Forces of the
Philippines or the Integrated National Police, or
armed person, shall bring in, introduce or escort in
any manner, any individual who seeks to replace
strikers in entering or leaving the premises of a
strike area, or work in place of the strikers. The
police force shall keep out of the picket lines unless
actual violence or other criminal acts occur therein:
Provided, That nothing herein shall be interpreted
to prevent any public officer from taking any
measure necessary to maintain peace and order,
protect life and property, and/or enforce the law
and legal order.
(e) No person engaged in picketing shall commit any act of
violence, coercion or intimidation or obstruct the free
ingress to or egress from the employer’s premises for
lawful purposes, or obstruct public thoroughfares.
Article 280, Labor Code. 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.
Article 281, Labor Code. 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.
Bukluran ng Manggagawa sa Clothman
Knitting v. CA, January 17, 2005
Respondent company decided to temporarily shut-
down its operations. However, while company’s
service truck was about to deliver fabric petitioners
approached the truck and blocked its way. As a result,
the driver of the service truck decided to return to the
respondent’s compound. Later that day, the group
staged a picket in front of company’s compound,
carrying placards with slogans (Containing: “Ibalik
ang pasok sa Finishing Department; “Huwag mong
ipitin ang mid-year, 13th month pay ng mga
manggagawa sa CKC”, etc.). Respondent filed a
petition to declare the strike illegal.
A strike is any temporary stoppage of work by the
concerted action of employees as a result of an
industrial or labor dispute. A labor dispute includes
any controversy or matter concerning terms or
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.
The petitioner union, its officers, members and
supporters staged a strike. In order for a strike to be
valid, the following requirements laid down in
paragraphs (c) and (f) of Article 263 of the Labor
Code must be complied with: (a) a notice of strike
must be filed; (b) a strike-vote must be taken; and (c)
the results of the strike-vote must be reported to the
DOLE. It bears stressing that these requirements are
mandatory, meaning, non-compliance therewith
makes the strike illegal. The evident intention of the
law in requiring the strike notice and strike-vote
report is to reasonably regulate the right to strike,
which is essential to the attainment of legitimate
policy objectives embodied in the law.
Steel Corporation v. SCP Employees
Union, April 16, 2008
SCPEU-NAFU filed a notice of strike based in refusal
to bargain. The Union staged the strike to compel SCP
to recognize it as the collective bargaining agent, as
the employees’ bargaining representative to work out
a CBA despite the striking union’s doubtful majority
status to merit voluntary recognition and lack of
formal certification as the exclusive representative in
the bargaining unit. The certification election that
was conducted where SCPEU-NAFLU emerged as
winner, not having been recognized as valid, it has no
authority to represent the RF-EE of SCP. Thus, it could
not ask SCP to bargain with it.
The Court ruled that The strike is a legitimate weapon
in the human struggle for a decent existence. It is
considered as the most effective weapon in
protecting the rights of the employees to improve the
terms and conditions of their employment. But to be
valid, a strike must be pursued within legal bounds.
The right to strike as a means for the attainment of
46
social justice is never meant to oppress or destroy
the employer. The law provides limits for its exercise.
Here, the strike is illegal for (1) it is a union-
recognition- strike which is not sanctioned by labor
laws; (2) it was undertaken after the dispute had
been certified for compulsory arbitration; and (3) it
was in violation of the Secretary’s return-to- work
order.
Even if this Court were to uphold the validity of
respondent’s purpose or objective in staging a strike,
still, the strike would be declared illegal for having
been conducted in utter defiance of the Secretary’s
return-to-work order and after the dispute had been
certified for compulsory arbitration. Although
ostensibly there were several notices of strike
successively filed by respondent, these notices were
founded on substantially the same grounds—
petitioner’s continued refusal to recognize it as the
collective bargaining representative.
The powers granted to the Secretary under Article
263(g) of the Labor Code have been characterized as
an exercise of the police power of the State, aimed at
promoting the public good. When the Secretary
exercises these powers, he is granted “great breadth
of discretion” to find a solution to a labor dispute. The
most obvious of these powers is the automatic
enjoining of an impending strike or lockout or its
lifting if one has already taken place.
The moment the Secretary of Labor assumes
jurisdiction over a labor dispute in an industry
indispensable to national interest, such assumption
shall have the effect of automatically enjoining the
intended or impending strike. It was not even
necessary for the Secretary of Labor to issue another
order directing a return to work. The mere issuance of
an assumption order by the Secretary of Labor
automatically carries with it a return-to-work order,
even if the directive to return to work is not expressly
stated in the assumption order.
Biflex Phils. v. Filflex Industrial &
Manufacturing Corp., Dec. 19, 2006
In response to the accelerating prices of oil the labor
sector conducted a welga ng bayan where the
petitioner unions led by their officers took part of by
conducting a work stoppage which lasted for 3
weeks. Respondents filed a petition to declare illegal
the said work stoppage of petitioners because they
did not comply with certain procedural requirements
under the Labor Code which are (1) Filing of a Notice
of Strike and (2) Securing a Strike Vote and (3)
Submission of the report of the Strike Vote to the
DOLE. Petitioner Unions retaliated by claiming that
after the end of the welga ng bayan, their members
were illegally locked out as a result of their taking
part in said event. Also they allege that as to their
putting up of tents, tables and chairs in front of the
main gate of the company premises, this was for the
benefit of their members who reported every morning
to see if the management would allow them to work.
Stoppage of work due to welga ng bayan is in the
nature of a general strike, an extended sympathy
strike. It affects numerous employers including those
who do not have a dispute with their employees
regarding their terms and conditions of employment.
Employees who have no labor dispute with their
employer but who, on a day they are scheduled to
work, refuse to work and instead join a welga ng
bayan commit an illegal work stoppage.
Even if petitioners’ joining the welga ng bayan were
considered merely as an exercise of their freedom of
expression, freedom of assembly or freedom to
petition the government for redress of grievances,
the exercise of such rights is not absolute. For the
protection of other significant state interests such as
the “right of enterprises to reasonable returns on
investments, and to expansion and growth”
enshrined in the 1987 Constitution must also be
considered, otherwise, oppression or self-destruction
of capital in order to promote the interests of labor
would be sanctioned. And it would give imprimatur to
workers’ joining demonstrations/rallies even before
affording the employer an opportunity to make the
necessary arrangements to counteract the
implications of the work stoppage on the business,
and ignore the novel “principle of shared
responsibility between workers and employers”
aimed at fostering industrial peace. There being no
showing that petitioners notified respondents of their
intention, or that they were allowed by respondents,
to join the welga ng bayan, their work stoppage is
beyond legal protection.
Even assuming arguendo that in staging the strike,
petitioners had complied with legal formalities, the
strike would just the same be illegal, for by blocking
the free ingress to and egress from the company
premises, they violated Article 264(e) of the Labor
Code which provides that “[n]o person engaged in
picketing shall … obstruct the free ingress to or
egress from the employer’s premises for lawful
purposes, or obstruct public thoroughfares.” In fine,
the legality of a strike is determined not only by
compliance with its legal formalities but also by the
means by which it is carried out.
Bascon & Cole v. CA, February 5, 2004
Petitioners were employees of MCCH and members of
the NAMA-MCCH, a labor union of MCCH employees.
NAMA-MCCH asked MCCH to renew their Collective
47
Bargaining Agreement (CBA) which was set to expire.
The National Labor Federation (NFL) opposed the
move by NAMA-MCCH who was their local affiliate.
NAMA-MCCH staged a series of mass actions inside
MCCH's premises. They marched around the hospital
putting up streamers, placards and posters. The
means of ingress to and egress from the hospital
were blocked. Employees and patients, including
emergency cases, were harassed, according to MCCH
management, which also complained that mass
actions held inside the hospital had created an
atmosphere of animosity and violence, aggravating
the condition of ailing patients
The Court held that while a union officer can be
terminated for mere participation in an illegal strike,
an ordinary striking employee, like petitioners herein,
must have participated in the commission of illegal
acts during the strike. There must be proof that they
committed illegal acts during the strike. But proof
beyond reasonable doubt is not required. Substantial
evidence, which may justify the imposition of the
penalty of dismissal, may suffice.
In this case, the Court of Appeals found that
petitioners' actual participation in the illegal strike
was limited to wearing armbands and putting up
placards. There was no finding that the armbands or
the placards contained offensive words or symbols.
Thus, neither such wearing of armbands nor said
putting up of placards can be construed as an illegal
act.
In fact, they are within the mantle of constitutional
protection under freedom of speech. Evidence on
record shows that various illegal acts were committed
by unidentified union members in the course of the
protracted mass action AFTER petitioners were
terminated (emphasis supplied by author). And we
commiserate with MCCH, patients, and third parties
for the damage they suffered.
But we cannot hold petitioners responsible for acts
they did not commit. The law, obviously solicitous of
the welfare of the common worker, requires, before
termination may be considered, that an ordinary
union member must have knowingly participated in
the commission of illegal acts during a strike.
Toyota Motor Phils. Corp. Workers
Association v. Toyota Motor Phils, Oct.
19, 2007
Union submitted its CBA proposals to Toyota but the
latter refused to bargain pending its appeal. The
Union then filed a notice of strike. Union officers and
members failed to render the required overtime work,
and instead marched to and staged a picket. Due to
the deliberate absence of a considerable number of
employees Toyota experienced lack of manpower
resulting in huge losses. Subsequently, Toyota
terminated 227 employees. The terminated
employees allegedly abandoned their work.This
resulted to another rally within Toyota’s premises as
the strikers barricaded the entrances of Toyota
preventing non-strikers from going to work.
The Court ruled that the protest actions undertaken
by the Union officials and members are not valid and
proper exercises of their right to assemble but are
illegal strikes in breach of the Labor Code. The
Union’s position is weakened by the lack of permit
from the City of Manila to hold “rallies.” Cloaked as
demonstrations, they were in reality temporary
stoppages of work perpetrated through the concerted
action of the employees who deliberately failed to
report for work on the convenient excuse that they
will hold a rally at the BLR and DOLE offices.
It is obvious that the concerted actions were
undertaken without satisfying the prerequisites for a
valid strike under Art. 263 of the Labor Code. The
Union failed to comply with the following
requirements: (1) a notice of strike filed with the
DOLE 30 days before the intended date of strike, or
15 days in case of unfair labor practice; (2) strike
vote approved by a majority of the total union
membership in the bargaining unit concerned
obtained by secret ballot in a meeting called for that
purpose; and (3) notice given to the DOLE of the
results of the voting at least seven days before the
intended strike.
These requirements are mandatory and the failure of
a union to comply with them renders the strike illegal.
The evident intention of the law in requiring the strike
notice and the strike-vote report is to reasonably
regulate the right to strike, which is essential to the
attainment of legitimate policy objectives embodied
in the law. As they failed to conform to the law, the
strikes were illegal.
NUWHRAIN Dusit Hotel Nikko Chapter v.
CA, November 11, 2008
The Union submitted its CBA negotiation proposals to
the Hotel, however they failed to arrive at an
agreement. The Union filed a Notice of Strike on the
ground of bargaining deadlock. The mediation was
also unsuccessful and a Strike Vote was conducted by
the Union where they decided to stage a strike. The
Union held a General Assembly where some members
sported closely cropped or clean shaven heads. The
following day, more male Union members followed
suit. They were prevented by the Hotel from entering
its premises for violation of the Hotel’s grooming
48
standards.The Union thereafter staged a picket
outside the Hotel premises, where later on other
members were also prevented from entering the
Hotel, thus lacking manpower in the Hotel forcing
them to temporarily cease operations in 3
restaurants.
Art. 212(o) of the Labor Code defines a strike as “any
temporary stoppage of work by the concerted action
of employees as a result of an industrial or labor
dispute.” In Toyota Motor Phils. Corp. Workers
Association (TMPCWA) v. National Labor Relations
Commission, 537 SCRA 171 (2007), we cited the
various categories of an illegal strike, to wit: Noted
authority on labor law, Ludwig Teller, lists six (6)
categories of an illegal strike, viz.:
(1) [when it] is contrary to a specific prohibition of
law, such as strike by employees performing
governmental functions; or
(2) [when it] violates a specific requirement of law[,
such as Article 263 of the Labor Code on the
requisites of a valid strike]; or
(3) [when it] is declared for an unlawful purpose, such
as inducing the employer to commit an unfair labor
practice against nonunion employees; or
(4) [when it] employs unlawful means in the pursuit
of its objective, such as a widespread terrorism of
nonstrikers [for example, prohibited acts under Art.
264(e) of the Labor Code]; or
(5) [when it] is declared in violation of an existing
injunction[, such as injunction, prohibition, or order
issued by the DOLE Secretary and the NLRC under
Art. 263 of the Labor Code]; or
(6) [when it] is contrary to an existing agreement,
such as a nostrike clause or conclusive arbitration
clause.
Regarding the Union officers and members’ liabilities
for their participation in the illegal picket and strike,
Art. 264(a), paragraph 3 of the Labor Code provides
that “[a]ny union officer who knowingly participates
in an illegal strike and any worker or union officer
who knowingly participates in the commission of
illegal acts during a strike may be declared to have
lost his employment status x x x.” The law makes a
distinction between union officers and mere union
members. Union officers may be validly terminated
from employment for their participation in an illegal
strike, while union members have to participate in
and commit illegal acts for them to lose their
employment status. Thus, it is necessary for the
company to adduce proof of the participation of the
striking employees in the commission of illegal acts
during the strikes.
Capitol Medical Center v. NLRC, April 26,
2005
Union filed a Notice of Strike.Petitioner then filed a
Letter before the Board requesting that the notice of
strike be dismissed, because the Union had
apparently failed to furnish the Regional Branch of
the NCMB with a copy of a notice of the meeting
where the strike vote was conducted.. Thereafter, the
officers and members of the Union staged a strike.
Petitioner then filed a petition before the NLRC to
declare the strike illegal. LA: sided with petitioner
that strike was illegal—because no voting had taken
place; no notice of such voting was furnished to the
NCMB at least 24-hours prior to the intended holding
of the strike vote.
The Court found that the Union failed to comply with
the 24-hour notice requirement to the Board before it
conducted the alleged strike vote meeting. This
rendered the strike ILLEGAL. The illegality of the
strike is further bolstered by the fact that the alleged
meeting never took place (meaning, it doesn’t have
the blessing of majority of the union membership).
Union failed to comply with Sec. 10, Rule XXII which
provides that:… a decision to declare a strike must be
approved by a majority of the total union
membership in a BU concerned obtained by secret
ballot in meetings or referenda called for the
purpose…The regional branch of the Board 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 employer shall furnish the
regional branch a notice of meetings…at least 24-
hours before such meetings, as well as the results of
the voting at least 7-days before the intended strike
In National Federation of Labor v. NLRC, the Court
enumerated the notices required by Art. 263 of the
Labor Code and the Rules:
1. A notice of strike, w/ the required contents,
should be filed with the DOLE, specifically the
Regional Branch of the Board, copy furnished
the employer;
2. A cooling-off period must be observed
between the filing of notice and the actual
strike 30-days in case of bargaining deadlock;
and 15-days in case of unfair labor practice.
3. Before a strike is actually commenced, a
strike vote should be taken by secret
balloting, with a 24-hour prior notice to the
Board
4. The result of the strike vote should be
reported to the Board at least 7-days before
the intended strike or lockout, subject to the
cooling-off period
49
The requirement of giving notice of the conduct of a
strike vote to the Board at least 24-hours before the
meeting is designed to (a) inform the Board of the
intent of the union to conduct a strike vote; (b) give
the Board ample time to decide on whether or not
there is a need to supervise the conduct of strike vote
to prevent any acts of violence and/or irregularities;
and (c) should the Board decide on its own initiative
or upon request of an interested party including the
employer, to supervise the strike vote, to give it
ample time to prepare deployment of required
personnel. Until and unless the Board is notified at
least 24-hours of the unions decision to conduct a
strike vote, and the date, place, and time thereof, the
Board cannot determine for itself whether to
supervise a strike vote meeting or not. Failure of a
union to comply with the requirements of giving
notice to the Board at least 24-hours prior to the
holding of a strike vote meeting will render the
subsequent strike ILLEGAL.
Trans-Asia Shipping Lines-Unlicensed
Crews Employees Union v. CA, July 7,
2004
Unions of R&F and supervisory employees filed
separate notices of strike with the NCMB against
respondent for ULP. To avert work stoppage, Sec.
Laguesma intervened and issued the order certifying
the labor dispute to the NLRC for compulsory
arbitration and enjoining the strike. Despite the order,
petitioners went on strike, paralyzing the operations
of the employer. Sec. Laguesma was constrained to
issue an order directing all striking workers to return
to work within 12 hours and for the company to
accept them back under the same terms and
conditions prevailing before the strike.
The powers granted to the Secretary of Labor under
Article 263 (g) of the Labor Code have been
characterized as an exercise of the police power of
the State, with the aim of promoting public good.
When the Secretary exercises these powers, he is
granted “great breadth of discretion” in order to find
a solution to a labor dispute. The most obvious of
these powers is the automatic enjoining of an
impending strike or lockout or the lifting thereof if one
has already taken place. Assumption of jurisdiction
over a labor dispute, or as in this case the
certification of the same to the NLRC for compulsory
arbitration, always co-exists with an order for workers
to return to work immediately and for employers to
readmit all workers under the same terms and
conditions prevailing before the strike or lockout.
Case law recognizes the employer’s right to transfer
or assign employees from one area of operation to
another. This right, however, is not absolute but
subject to limitations imposed by law. Article 263 (g)
of the Labor Code constitutes one such limitation
provided by law. To reiterate, Article 263 (g) of the
Labor Code constitutes an exception to the
management prerogative of hiring, firing, transfer,
demotion and promotion of employees. And to the
extent that Article 263 (g) calls for the admission of
all workers under the same terms and conditions
prevailing before the strike, the respondent is
restricted from exercising its generally unbounded
right to transfer or reassign its employees. The
respondent is mandated, under the said order, to
issue embarkation orders to the employees to enable
them to report to their ship assignments in
compliance with the Order of the Secretary of Labor.
Manila Diamond Hotel Employees Union
v. CA, Secretary, December 16, 2004
Union filed a petition for CE, which was dismissed.
After a few months, the Union sent a letter to the
Hotel informing it of its desire to negotiate for a CBA.
The Hotel informed the Union that it can’t recognize
the latter as the employee’s bargaining agent since
its petition for certification election had been
dismissed. The Union announced that it was taking a
strike vote, they filed a notice of strike for the Hotel’s
alleged refusal to bargain. The NCMB summoned both
parties and held a series of dialogues.
The Union, however, staged a strike against the
Hotel. The Hotel claims that the strike was illegal and
it had to dismiss some employees for their
participation in the allegedly illegal concerted activity.
The Union, on the other hand, accused the Hotel of
illegally dismissing the workers. Then Secretary
Trajano assumed jurisdiction over the labor dispute.
He issued an Order directing the striking employees
to return to work. However, the Hotel refused to
accept them, modifying the order issued by Secretary
Trajano. Instead of an actual return to work, Acting
Secretary Espaol directed that the strikers be
reinstated only in the payroll.
The Court ruled that there is no showing that the
facts called for payroll reinstatement as an
alternative remedy. A strained relationship between
the striking employees and management is no reason
for payroll reinstatement in lieu of actual
reinstatement.
As a general rule, the State encourages an
environment wherein employers and employees
themselves must deal with their problems in a
manner that mutually suits them best. Article 263,
paragraph (g) of the Labor Code, which allows the
Secretary of Labor to assume jurisdiction over a labor
dispute involving an industry indispensable to the
50
national interest, provides an exception: (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 intended or impending
strike or lockout as specified in the assumption or
certification order. If one has already taken place at
the time of 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 Court pointed out that the law uses the precise
phrase of “under the same terms and conditions,”
revealing that it contemplates only actual
reinstatement. This is in keeping with the rationale
that any work stoppage or slowdown in that particular
industry can be inimical to the national economy.
Philcom Employees Union v. Phil. Global
Communications, July 17, 2006
While CBA negotiations were ongoing, PEU filed a
Notice of Strike due to perceived unfair labor practice
and bargaining deadlock. While the union and the
company officers and representatives were meeting,
the remaining union officers and members staged a
strike at the company premises, barricading the
entrances and egresses thereof and setting up a
stationary picket at the main entrance of the building.
Then Acting Labor Secretary Trajano issued an Order
assuming jurisdiction over the dispute, enjoining any
strike or lockout, directing the parties to cease from
committing any act that may exacerbate the
situation, directing the striking workers to return to
work within twenty-four (24) hours from receipt of the
Secretary’s Order and for management to resume
normal operations, as well as accept the workers
back under the same terms and conditions prior to
the strike.
The issue is WON the Secretary properly took
cognizance of the issue on the alleged illegal strike
even though it was not properly submitted to the
Secretary for resolution. (YES)
The Secretary properly took cognizance of the issue
on the legality of the strike. As correctly pointed out,
since the very reason of the Secretary’s assumption
of jurisdiction was PEUs declaration of the strike, any
issue regarding the strike is not merely incidental to,
but is essentially involved in, the labor dispute itself.
The powers granted to the Secretary under Article
263(g) of the Labor Code have been characterized as
an exercise of the police power of the State, with the
aim of promoting public good. When the Secretary
exercises these powers, he is granted great breadth
of discretion in order to find a solution to a labor
dispute. The most obvious of these powers is the
automatic enjoining of an impending strike or lockout
or its lifting if one has already taken place. In this
case, the Secretary assumed jurisdiction over the
dispute because it falls in an industry indispensable
to the national interest. It is of no moment that PEU
never acquiesced to the submission for resolution of
the issue on the legality of the strike. PEU cannot
prevent resolution of the legality of the strike by
merely refusing to submit the issue for resolution. It is
also immaterial that this issue, as PEU asserts, was
not properly submitted for resolution of the Secretary.
The authority of the Secretary to assume jurisdiction
over a labor dispute causing or likely to cause a strike
or lockout in an industry indispensable to national
interest includes and extends to all questions and
controversies arising from such labor dispute. The
power is plenary and discretionary in nature to enable
him to effectively and efficiently dispose of the
dispute.
Nissan Motors v. Secretary, June 21,
2006
Notice of Strike was filed by the Union due to
collective bargaining deadlock. DOLE assumed
jurisdiction and issued an order directing any party to
cease and desist for committing any act that might
exacerbate the situation. Oder had been violated so
DOLE thereafter ordered dismissal of union officers
and recall dismissal of EEs.
While the employer is authorized to declare a union
officer who participated in an illegal strike as having
lost his employment, his/its option is not as wide with
respect to union members or workers for the law
itself draws a line and makes a distinction between
union officers and members/ordinary workers. An
ordinary striking worker or union member cannot, as
a rule, be terminated for mere participation in an
illegal strike; there must be proof that he committed
illegal acts during the strike. And lest it be forgotten,
the law invests the Secretary of Labor and
Employment the prerogative of tempering the
consequence of the defiance to the assumption order.
The Secretary may thus merely suspend rather than
dismiss the employee involved.
FEU-NRMF v. FEU-NRMFEA-AFW, October
16, 2006
Union filed notice of strike on the ground of deadlock.
A strike vote was conducted, and after the expiration
51
of the thirty day cooling of period and seven day
strike ban, union staged a strike. Before the strike,
union offered skeletal force of nursing and health
personnel who will man the hospital’s operation for
duration of strike but the hospital refused to accept.
FEUNRMF filed a Petition for the Assumption of
Jurisdiction (AJO) or for Certification of Labor Dispute
with the NLRC. Secretary of Labor granted the
petition and an Order assuming jurisdiction over the
labor dispute was issued, thereby prohibiting any
strike. The copy of the AJO was not served to the
respondent because there no union officer was
around. Instead the copy was posted in several
conspicuous places within the premises of the
hospital. Striking employees continued to strike
claiming that they did not know about the AJO order.
Under the NLRC Revised Rules of Procedure, service
of copies of orders should be made by the process
server either personally or through registered mail.
Merely posting copies of the AJO does not satisfy the
rigid requirement for proper service. Needless to say,
the manner of service made by the process server
was invalid and irregular. Respondent union could not
therefore be adjudged to have defied the said Order
since it was not properly apprised thereof. The
affidavits presented by the petitioner FEU-NRMF and
relied upon by the Labor Arbiter and the NLRC, in
arriving at the conclusion that the respondent union
committed illegal acts during the strike, could not be
given probative value by this Court as the adverse
party was not given a chance to cross-examine the
affiants. Accordingly, the strike conducted by the
respondent union was valid under the circumstances.
For a strike to be valid, the following requisites must
concur: (1) the thirty-day notice or the fifteen-day
notice, in case of unfair labor practices; (2) the two-
thirds (2/3) required vote to strike done by secret
ballot; and (3) the submission of the strike vote to the
DOLE at least seven days prior to the strike. In
addition, in case of strikes in hospitals, it shall be the
duty of the striking employees to provide and
maintain an effective and skeletal workforce of
medical and other health personnel in order to insure
the proper and adequate protection of the life and
health of its patients. These procedural requirements,
along with the mandatory cooling off and strike ban
periods had been fully observed by the respondent
union.
Pilipino Telephone Corporation v. PILTEA,
June 22, 2007
Union filed a notice of strike on the ground of union
busting and mass promotion of its officers and
members during the CBA negotiations. On the same
day, union staged a strike. SC held that strike was
illegal. One of the procedural requirements for the
strike to be valid is the observance of the seven-day
strike ban. Here, the strike was done on the same day
when the notice has been filed. The Union violated
the seven-day strike ban. This requirement should be
observed to give the DOLE an opportunity to verify
whether the projected strike really carries the
approval of the majority of the union members. Also,
there was no union busting to warrant the non
observance of the cooling off period. To constitute
union busting, there must be a dismissal and the
existence of union must be threatened by such
dismissal. Here, notice of strike merely assailed mass
promotion. Promotion is different from dismissal.
Club Filipino v. Bautista, July 13, 2009
Union made several demands for negotiation but the
company refused to do so. Union filed notice of strike
on the ground of bargaining deadlock. Two weeks
after, the company formally responded to the
demands of the union. In cases of bargaining
deadlocks, the notice shall, as far as practicable,
further state the unresolved issues in the bargaining
negotiations and be accompanied by the written
proposals of the union, the counter-proposals of the
employer and the proof of a request for conference to
settle differences. In cases of unfair labor practices,
the notice shall, as far as practicable, state the acts
complained of, and efforts taken to resolve the
dispute amicably. Any notice which does not conform
with the requirements of this and the foregoing
section shall be deemed as not having been filed and
the party concerned shall be so informed by the
regional branch of the Board.
Here, the union could not have attached the counter
proposal of the company in the notice of strike as
there was no such counter proposal. One cannot give
what he does not have. Indeed, compliance with the
requirement was impossible because no counter-
proposal existed at the time the union filed a notice
of strike. Hence, strike staged was legal.
Soriano Aviation v. Employees
Association of A. Soriano Aviation, August
14, 2009
CBA contains “no strike, no lockout” clause. During
the holiday, members of the union refused to render
OT work. Company treated it as a violation of the CBA
so it gave 30-day suspension to the said EE’s. Union
went on a strike. Strike is invalid when the employed
means was illegal. The union members repeated
name-calling, harassment and threats of bodily harm
directed against company officers and non-striking
employees and more significantly, the putting up of
placards, banners and streamers with vulgar
52
statements imputing criminal negligence to the
company come within the puri ew of illegal acts.
Hence the strike was illegal.
Jackbilt Industries v. Jackbilt Employees
Union, March 20, 2009
Due to crisis, Jackbilt decided to temporarily stop its
business compelling its EEs to go on leave for 6
months. So the union went on strike. NLRC ordered
the union to refrain from preventing access to
Jackbilt’s property but the union, as found by the
investigating labor arbiter, violated the order because
on various occasions, it stopped and inspected
private vehicles from entering and exiting the
company’s premises. Hence, NLRC issued writ of
preliminary injunction against the union. Union were
dismissed so they filed for ULP but company said that
the dismissal was valid because the union conducted
an illegal strike.
Company is correct. The use of unlawful means in the
course of a strike renders such strike illegal.
Therefore, strike was ipso facto illegal. The filing of a
petition to declare the strike illegal was thus
unnecessary. Here, NLRC already found that union
committed illegal acts by preventing the free entry
into and exit from Jackbilt’s compound.
Alcantara & Sons v. CA, GR G.R. No.
155109, September 29, 2010
The CBA has no strike and no lockout provisions.
Parties entered into a deadlock so Union filed a notice
of strike. Union conducted a strike vote and majority
favored it. The Union reported the strike vote to the
DOLE. After the observance of the mandatory cooling-
off period, they went on strike. LA: Union’s strike is
illegal; Union officers should be deemed to have
forfeited their employment; and Union members,
finding no proof that they actually committed illegal
acts during the strike, should be reinstated.
The SC held that Union committed an illegal strike. A
strike may be regarded as invalid although the labor
union has complied with the strict requirements for
staging one as provided in Article 263 of the Labor
Code when the same is held contrary to an existing
agreement, such as a no strike clause or conclusive
arbitration clause. Here, the CBA between the parties
contained a "no strike, no lockout" provision 2)Union
members should also be terminated because of their
illegal acts of threatening, coercing and intimidating
non-strikers, obstructing the free ingress and egress
from the company premises and resisted and defied
the implementation of the writ of preliminary
injunction. But they are given financial assistance
because the records fail to disclose any past
infractions committed by the dismissed Union
members.
PHIMCO Industries, Inc. v. PILA, August
11, 2010
Parties end up with a collective bargaining deadlock.
PILA then staged a strike preventing-through force,
intimidation and coercion- the ingress and egress of
non-striking EE’s into and from company premises.
Strike is illegal. Despite the validity and compliance
of procedural requirements, strike could still be held
illegal if the means employed is illegal. The means
become illegal when they come within this
prohibition: “no person engaged in picketing shall
commit any act of violence, coercion, or intimidation
or obstruct the free ingress to or egress from
premises…”
Solidbank Corporation v. Gamier,
November 15, 2010
Union declared a deadlock and filed a notice of
strike. DOLE ordered the union to refrain from
committing any acts that might exacerbate the
situation. But still, the union protested by holding a
rally in from of the office of secretary of labor. EE’s
did not work for 3 days.
SC ruled that the rally violated the order of DOLE.
Strike is any temporary stoppage of work by
concerted action of EEs as a result of labor dispute.
The term “strike” shall comprise not only concerted
work stoppages, but also slowdowns, mass leaves,
sitdowns, attempts to damage, destroy or sabotage
plant equipment and facilities and similar activities.
Thus, the fact that the conventional term “strike” was
not used by the striking employees to describe their
common course of action is inconsequential, since
the substance of the situation, and not its
appearance, will be deemed to be controlling.
Escario v. NLRC, September 27, 2010
The petitioners were regular employees of PINA and
were part of the union. All the officers and members
of the union walked out of PINA's premises to go to
the barangay office to support Canete, an officer of
the union charged with oral defamation by PINA's
officers. Due to the walk-out, PINA preventively
suspended all officers of the Union and thereafter
terminated them. The union filed a notice of strike,
claiming that PINA was guilty of union busting
through the constructive dismissal of its officers. PINA
also filed a complaint for ULP and abandonment of
work against the union . LA ruled that strike was
illegal, and was affirmed by NLRC and CA.
53
There are two causes for the dismissal of an
employee, namely unlawful lockout, and participation
in an illegal strike. The third paragraph of Art 264(a)
authorizes the award of full backwages only when the
termination of employment is a consequence of an
unlawful lockout. On the consequences of an illegal
strike, the provision distinguishes between a union
officer and a union member participating in an illegal
strike. A union officer who knowingly participates in
an illegal strike is deemed to have lost his
employment status, but a union member who is
merely instigated or induced to participate in the
illegal strike is more benignly treated. With respect to
backwages, the principle of a day’s wage for a fair
day’s labor remains as the basic factor in determining
the award. 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. Under the principle of a fair day’s wage for a
fair day’s labor, the petitioners were not entitled to
the wages during the period of the strike (even if the
strike might be legal), because they performed no
work during the strike.
Bagong Pagkakaisa ng Manggagawa sa
Triumph v. Secretary, July 5, 2010
The union and Triumph had an existing which expired
so they entered into re-negotiations but the same
resulted in a deadlock. A notice of strike was filed by
the union and the company filed a notice of lockout
for ULP due to the union's work slow-down. The
Secretary of Labor issued a return to work order,
wherein some employees attempted to return but
were prevented by the striking workers. The
company informed NCMB that it was willing to accept
all returning employees so the striking employees
returned to work but 20 union officers were still not
allowed entry. They were served a notice of
termination.
Under the law, the Labor Secretary's assumption of
jurisdiction over the dispute or its certification to the
National Labor Relations Commission for compulsory
arbitration shall have the effect of automatically
enjoining the intended or impending strike or lockout
and 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 before
the strike or lockout. Thus, the Union’s defiance of the
order of the Secretary of Labor made the strike
illegal. They were also liable for leading and
instigating slowdown (during the CBA negotiations), a
form of strike undertaken by the union without
complying with the mandatory legal requirements of
a strike notice and strike vote.
Fadriquelan v. Monterey Foods, June 8,
2011
The CBA between the company and the union expired
so when the same resulted in a deadlock, the union
filed a notice of strike with the NCMB. Said company
filed with the DOLE a petition for assumption of
jurisdiction over the dispute in view of the dire effects
on the meat industry. Thereafter, the union filed a
second notice of strike before the NCMB on the
ground that the company committed ULP. It filed a
third notice of strike on the claim that company
engaged in union busting and illegal dismissal of
union officers. No strike shall be declared after the
Secretary of Labor has assumed jurisdiction over a
labor dispute. A strike conducted after such
assumption is illegal and any union officer who
knowingly participates in the same may be declared
as having lost his employment. it. The ordinary
worker cannot be terminated for merely participating
in the strike. There must be proof that he committed
illegal acts during its conduct. On the other hand, a
union officer can be terminated upon mere proof that
he knowingly participated in the illegal strike.
In this case, identity and participations of Eguna,
Malaluan, Alonso, Dimaano, Mayuga, Rizaldo, Suico,
Escamillas, and Bautroin the slowdowns were
properly established. These officers simply refused to
work or they abandoned their work to join union
assemblies. In termination cases, the dismissed
employee is not required to prove his innocence of
the charges against him. The burden of proof rests
upon the employer to show that the employees
dismissal was for just cause. The employers failure to
do so means that the dismissal was not justified.
Here, the company failed to show that all 17 union
officers deserved to be dismissed.
Magdala Multipurpose & Livelihood v.
KMLMS, October 19, 2011
KMLMS filed a notice of strike on March 5, 2002 but
only acquired its legal personality when its
registration as an independent labor organization was
granted on April 9, 2002. On May 6, 2002, it staged a
strike where everal prohibited acts were committed
by its members. Magdala filed a petition to declare
the strike illegal and that the officers and members of
the union who participated be declared to have lost
their employment status. There is no question that
the strike was illegal because when the union had
filed a notice of strike and conducted a strike-vote, it
had not yet acquired legal personality and thus could
not legally represent the union and its members.
54
Thus, the mandatory notice of strike and the conduct
of the strike-vote report were ineffective for having
been filed and conducted before KMLMS acquired
legal personality and the failure of the union to
comply with the same renders the strike illegal.
Furthermore, the the striking workers committed acts
of (1) interference by obstructing the free ingress to
or egress from petitioners’ compound and (2)
coercion and intimidation. union. For union officers,
knowingly participating in an illegal strike is a valid
ground for termination of their employment. But for
union members who participated in a strike, their
employment may be terminated only if they
committed prohibited and illegal acts during the
strike and there is substantial evidence or proof of
their participation,
Automotive Engine Rebuilders v.
Progresibong Unyon, July 13, 2011;
January 16, 2013
The union filed a PCE before the DOLE and the
company submitted all its employees for drug testing.
Those who refused were threatened with dismissal.
The results of the drug test came out and the 7
employees were found positive for illegal drugs. AER
issued a memorandum suspending these employees
from work. Out of the 7 employees, only 2 were
allowed to return. As they were securing their medical
certificates, they were shocked to receive a letter
from AER charging them with insubordination and
absence without leave. The union tried to prevent the
transfer of machines which prompted AER to issue a
memorandum accusing those involved of gross
insubordination, and work stoppage. They were
denied entry into company premises so the affected
workers staged a picket and filed a complaint for ULP.
The workers should be reinstated including those who
tested positive for illegal drugs despite both parties
being in pari delicto. AERs fault is obvious from the
fact that a day after the union filed a PCE before the
DOLE, it hit back by requiring all its employees to
undergo a compulsory drug test. Although AER
argues that the drug test was applied to all its
employees, it was silent as to whether the drug test
was a regular company policy and practice in their 35
years in the business. Moreover, AER failed to show
proof that the drug test conducted on its employees
was performed by an authorized drug testing center.
Like management, the union and the affected
workers were also at fault for resorting to a concerted
work slowdown and walking out of their jobs of
protest for their illegal suspension.
Lastly, there was no proof that the workers
deliberately abandoned their jobs. Abandonment is
totally inconsistent with the immediate filing of a
complaint for illegal dismissal. In pari delicto doctrine
in labor cases warrants the restoration of the status
quo ante and bringing the parties back to the
respective positions before the illegal strike and
illegal lockout. In the case at bar, since both AER and
the union are at fault or in pari delicto, they should be
restored to their respective positions prior to the
illegal strike and illegal lockout. Nonetheless, if
reinstatement is no longer feasible, the concerned
employees should be given separation pay up to the
date set for the return of the complaining employees
in lieu of reinstatement.
Naranjo v. Biomedica Health Care,
September 19, 2012
5 employees of Biomedica Health were absent for
personal reasons for one day but when they returned
to work the next day, they were not allowed to enter
the premises. Biomedica issued notices to the
petitioners, accusing them of conducting an illegal
strike and directed them to explain why they should
not be dismissed. The petitioners failed to submit
their written explanation thus Biomedica served
notices of termination. SC ruled that petitioners were
not afforded procedural due process as Biomedica
failed to quote said provisions of the company policy
as to adequately inform them of the nature of the
charges against them. Moreover, the period of 24
hours alloted to petitioners to answer the notice were
insufficient as employees should be given a
reasonable opportunity to file a response to the
notice. No hearing was also set. In addition,
petitioners were also denied substantive due process
as Biomedica failed to even establish that petitioners
indeed violated company rules, failing to even
present a copy of the rules and to prove that
petitioners were made aware of such regulations.
Petitioners did not stage a mass leave nor did they go
on strike. Only 5 were absent and for personal
reasons so there was no intent to go on strike. Thus,
an ordinary striking worker cannot be terminated for
mere participation in an illegal strike. There must be
proof that he committed illegal acts during a
strike."
VCMC v. Yballe, January 15, 2014
The President of the Union expressed the union's
desire to renew the existing CBA but VCMC told her to
first secure the endorsement of the legal counsel of
the Federation which is the EBR of the hospital's
employees. Legal counsel of the Federation informed
the hospital that the proposal submitted by Nava was
never referred to the Federation. Due to the conflict
between the Federation and the Union, the hospital
temporarily suspended collection of union fees. Union
membership was also suspended on the ground of
serious violations of the Constitution and By-Laws.
Thus, several union members launched a series of
55
mass actions. DOLE issued certifications that there is
nothing in the records that Union is a registered LLO.
The Union filed a notice of strike but was denied for
want of personality but they still conducted a strike
vote and more strikes. officers. A worker merely
participating in an illegal strike may not be
terminated from employment. It is only when he
commits illegal acts during a strike that he may be
declared to have lost employment status. In contrast,
a union officer may be terminated from employment
for knowingly participating in an illegal strike or
participates in the commission of illegal acts during a
strike. Yballe et al. are not entitled to back wages. 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; but for this
exception to apply, it is required that the strike be
legal, which is not the case here.
Tabangao Shell Refinery Employees
Association v. Pilipinas Shell, April 7,
2014
Union and the company started re-negotiations for a
new CBA wherein the union proposed a 20% annual
across the board basic salary increase. After several
meetings, they failed to reach an amicable
settlement. During the cooling period, the union
members unanimously voted for the holding of a
strike. Thus, the company filed a Petition for
Assumption of Jurisdiction with the Sec. of Labor and
Employment. The union, then, filed a pet. for
certiorari, alleging that the issue is ULP in the form of
bad faith in bargaining and not the CBA deadlock. In
the meantime, the union filed a complaint for ULP
before the NLRC. SOLE held that there was already a
deadlock although the ground for the 1 st Notice of
Strike was ULP for bargaining in bad faith. The
existence of bad faith and deadlock are both
Questions of Fact and evidentiary. “The Secretary of
the DOLE has been explicitly granted by Article
263(g) of the Labor Code the authority to assume
jurisdiction over a labor dispute causing or likely to
cause a strike or lockout in an industry indispensable
to the national interest, and decide the same
accordingly. The power of the Secretary of Labor and
Employment to assume jurisdiction over this dispute
includes and extends to all questions and
controversies arising from the said dispute, such as,
but not limited to the union’s allegation of bad faith
bargaining. It also includes and extends to the
various unresolved provisions of the new CBA such as
compensation.
PMI Faculty and Employees Union v. PMI
Colleges, June 19, 2016
The union filed a notice of strike with the NCMB
against the school for gross violations of several CBA
provisions. It also filed a second notice of strike for
the same violation. On the last day of the cooling off
and strike vote period, they were not allowed to enter
company premises so the union staged a premature
strike. School filed a petition to declare strike illegal
for failure of the union to comply with the valid
requirements of a strike. NLRC is incorrect in
admitting the belatedly filed CD which in itself
already raises doubts as to its credibility. The School’s
explanation for its belated filing was that it took a
long time to take the depositions of the personnel of
the studio(Studio is in Tagbilaran) who took the
footage. This explanation is unacceptable as they
have member of the school’s management(School is
in Bohol) who is a lawyer who can take the
Deposition. In sum, the CD is not credible should not
have been given much consideration.
The Hongkong Shanghai Banking
Corporation Employees Union v. NLRC,
January 11, 2016
HSBC announced its implementation of a job
evaluation program. The Union demanded the
suspension of such because it was an unfair labor
practice. The Union’s concerted activities lasted for
11 months. The Union Officers and Members walked
out and blocked the entry and exit. HSBC filed for a
petition for habeas corpus on behalf of its officials
and employees whom they airlifted to enable them to
leave the bank premises. It also filed a complaint to
declare the strike illegal and thereafter terminated
the individual petitioners. Strike was illegal for failure
of the Union to file the notice of strike with the DOLE;
to observe the cooling-off period; and to submit the
results of the strike vote to the NCMB pursuant to
Article 263 of the Labor Code. Article 264(e) of the
Labor Code expressly enjoined the striking workers
engaged in picketing from committing any act of
violence, coercion or intimidation, or from obstructing
the free ingress into or egress from the employer’s
premises for lawful purposes, or from obstructing
public thoroughfares.
While Article 264 authorizes the termination of the
union officers and EEs, it does not remove from the
EEs their right to due process. Regardless of their
actions during the strike, the EEs remain entitled to
an opportunity to explain their conduct and why they
should not be penalized. The failure by HSBC to
strictly observe the twin-notice requirements resulted
in illegal dismissal. HSBC should be held liable for two
types of illegal dismissal- the first type was made
56
without both substantive and procedural due process,
while the other was based on a valid cause but lacked
compliance with procedural due process. To the first
type belonged the dismissal of the 18 EEs, while the
second type included the rest of the petitioners.
Security of Tenure
Read D.O. 147-15
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

Article 292(b), Labor Code.

(b) Subject to the constitutional right of workers to
Article 298, Labor Code. Closure of
security of tenure and their right to be protected
establishment and reduction of personnel.- The
against dismissal except for a just and authorized
employer may also terminate the employment of
cause and without prejudice to the requirement of
any employee due to the installation of labor-
notice under Article 283 of this Code, the employer
saving devices, redundancy, retrenchment to
shall furnish the worker whose employment is
prevent losses or the closing or cessation of
sought to be terminated a written notice containing
operation of the establishment or undertaking
a statement of the causes for termination and shall
unless the closing is for the purpose of
afford the latter ample opportunity to be heard and
circumventing the provisions of this Title, by
to defend himself with the assistance of his
serving a written notice on the workers and the
representative if he so desires in accordance with
Ministry of Labor and Employment at least one (1)
company rules and regulations promulgated
month before the intended date thereof. In case of
pursuant to guidelines set by the Department of
termination due to the installation of labor-saving
Labor and Employment. Any decision taken by the
devices or redundancy, the worker affected thereby
employer shall be without prejudice to the right of
shall be entitled to a separation pay equivalent to
the worker to contest the validity or legality of his
at least his one (1) month pay or to at least one (1)
dismissal by filing a complaint with the regional
month pay for every year of service, whichever is
branch of the National Labor Relations Commission.
higher. In case of retrenchment to prevent losses
The burden of proving that the termination was for
and in cases of closures or cessation of operations
a valid or authorized cause shall rest on the
of establishment or undertaking not due to serious
employer. The Secretary of the Department of
business losses or financial reverses, the
Labor and Employment may suspend the effects of
separation pay shall be equivalent to one (1)
the termination pending resolution of the dispute in
month pay or at least one-half (1/2) month pay for
the event of a prima facie finding by the
every year of service, whichever is higher. A
appropriate official of the Department of Labor and
fraction of at least six (6) months shall be
Employment before whom such dispute is pending
considered one (1) whole year.
that the termination may cause a serious labor
dispute or is in implementation of a mass lay-off.

Article 299, Labor Code. Disease as ground for

termination. - An employer may terminate the
Article 294, Labor Code. Security of tenure. - In
services of an employee who has been found to be
cases of regular employment, the employer shall
suffering from any disease and whose continued
not terminate the services of an employee except
employment is prohibited by law or is prejudicial to
for a just cause or when authorized by this Title. An
his health as well as to the health of his co-
employee who is unjustly dismissed from work shall
employees: Provided, That he is paid separation
be entitled to reinstatement without loss of
pay equivalent to at least one (1) month salary or
seniority rights and other privileges and to his full
to one-half (1/2) month salary for every year of
backwages, inclusive of allowances, and to his
service, whichever is greater, a fraction of at least
other benefits or their monetary equivalent
six (6) months being considered as one (1) whole
computed from the time his compensation was
year.
withheld from him up to the time of his actual
reinstatement.

Article 300, Labor Code. Termination by

employee. - (a) An employee may terminate
Article 297, Labor Code. Termination by
without just cause the employee-employer
employer. - An employer may terminate an
relationship by serving a written notice on the
employment for any of the following causes:
employer at least one (1) month in advance. The
(a) Serious misconduct or willful
employer upon whom no such notice was served
disobedience by the employee of the lawful
may hold the employee liable for damages.
orders of his employer or representative in
connection with his work;
(b) An employee may put an end to the relationship
(b) Gross and habitual neglect by the

57
without serving any notice on the employer for any
of the following just causes:
1. Serious insult by the employer or his
representative on the honor and person of the
employee;
2. Inhuman and unbearable treatment accorded
the employee by the employer or his
representative;
3. Commission of a crime or offense by the
employer or his representative against the person
of the employee or any of the immediate members
of his family; and
4. Other causes analogous to any of the foregoing.
Article 301, Labor Code. 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.
Article 302, Labor Code. Retirement. - Any
employee may be retired upon reaching the
retirement age established in the collective
bargaining agreement or other applicable
employment contract.
In case of retirement, the employee shall be entitled to
receive such retirement benefits as he may have earned
under existing laws and any collective bargaining
agreement and other agreements: Provided, however,
That an employee’s retirement benefits under any
collective bargaining and other agreements shall not be
less than those provided therein.
In the absence of a retirement plan or agreement
providing for retirement benefits of employees in
the establishment, an employee upon reaching the
age of sixty (60) years or more, but not beyond
sixty-five (65) years which is hereby declared the
compulsory retirement age, who has served at
least five (5) years in the said establishment, may
retire and shall be entitled to retirement pay
equivalent to at least one-half (1/2) month salary
for every year of service, a fraction of at least six
(6) months being considered as one whole year.
Unless the parties provide for broader inclusions,
the term one-half (1/2) month salary shall mean
fifteen (15) days plus one-twelfth (1/12) of the 13th
month pay and the cash equivalent of not more
than five (5) days of service incentive leaves.
Retail, service and agricultural establishments or
operations employing not more than ten (10)
employees or workers are exempted from the
coverage of this provision.
Violation of this provision is hereby declared
unlawful and subject to the penal provisions under
Article 288 of this Code.
Just Causes
Salas v Aboitiz One, June 27, 2008
Salas was tasked with monitoring and maintaining
the availability and supply of Quickbox needed by
Aboitiz in its day-to- day operations. However, Salas
had run out of large quickbox, hampering the
business operations. Aboitiz then wrote Salas a
memorandum requiring him to explain in writing why
he should not be disciplinarily dealt with for his (i)
failure to monitor the stock level of Large Quickbox
which led to inventory stock out; and (ii) failure to
report to his immediate superior the Large Quickbox
problem when the stock level was already critical. An
administrative hearing was conducted. Aboitiz sent
him a decision notice, terminating him for loss of
trust and confidence. Salas then requested for a
reconsideration of the decision through a letter,
asking if he could instead avail of the early retirement
plan, having worked for Aboitiz for ten years already
but this was denied. Claiming termination without
cause, Salas filed
with the Labor Arbiter a complaint against Aboitiz for
illegal dismissal. Aboitiz responded that there was
valid termination, asserting that Salas was dismissed
for just cause and with due process, Salas having
willfully breached his duty when he ran out of Large
Quickbox, justifying the termination of his
employment.
Gross negligence connotes want or absence of or
failure to exercise slight care or diligence, or the
entire absence of care. To warrant removal from
service, the negligence should not merely be gross,
but also habitual. Although it was Salas' duty to
monitor and maintain the availability and supply of
Quickbox, records show that Salas had made a
requisition as early as May 21, 2003, even making
several follow- ups. If there is anything that Salas can
be faulted for, it is his failure to promptly inform his
immediate
supervisor of the non-delivery of the requisitioned
items. Nevertheless, such failure did not amount to
gross neglect of duty or to willful breach of trust,
which would justify his dismissal from service.
Moreover, there appears nothing to suggest that
Salas’ position was a highly or even primarily
confidential position, so that he can be removed for
loss of trust and confidence by the employer.
Aboitiz’s reliance on the past offenses of Salas for his
eventual dismissal is likewise unavailing. The correct
58
rule has always been that such previous offenses
may be used as valid justification for dismissal from
work only if the infractions are related to the
subsequent offense upon which the basis of
termination is decreed.
RB Michael Press v Galit, February 13,
2008
Galit was employed by RB Michael Press as an offset
machine operator. He was ordered to render OT
service to comply with a job order deadline but
refused. The following day, he reported to work but
the company told him not to work and return in the
afternoon for the hearing. He was thereafter
terminated so he filed a complaint for illegal dismissal
and money claims. For willful disobedience to be a
valid cause for dismissal, these two elements must
concur: (1) the employee’s assailed conduct must
have been willful, that is, characterized by a wrongful
and perverse attitude; and (2) the order violated
must have been reasonable, lawful, made known to
the employee, and must pertain to the duties which
he had been engaged to discharge.In the present
case, there is no question that petitioners’ order for
respondent to render overtime service to meet a
production deadline complies with the second
requisite. The fact that respondent refused to provide
overtime work despite his knowledge that there is a
production deadline that needs to be met, and that
without him, the offset machine operator, no further
printing can be had, shows his wrongful and perverse
mental attitude; thus, there is willfulness.
Under the twin notice requirement, the employees
must be given two (2) notices before his employment
could be terminated: (1) a first notice to apprise the
employees of their fault, and (2) a second notice to
communicate to the employees that their
employment is being terminated. Not to be taken
lightly of course is the hearing or opportunity for the
employee to defend himself personally or by counsel
of his choice. In view of the lack of due process,
termination of respondent was railroaded in serious
breach of his right to due process. And as a
consequence of the violation of his statutory right to
due process and following Agabon, petitioners are
liable jointly and solidarily to pay nominal damages.
San Miguel Corporation v NLRC, April
16, 2008
According to the company's policy on employee
conduct, it punishes falsification of company records
with discharge for the first offense if the offender
himself or somebody else benefits from the
falsification. During investigation, Ibias testified that
his absences were sick leaves and denied the
falsification charge but still, he was dismissed. Ibias
filed an illegal dismissal case against SMC. The SC
held that SMC failed to prove the falsification charge
against Ibias. The testimonies presented against Ibias
were uncorroborated and self-serving. As to
unauthorized absences, Ibias confessed that some of
his absences were without permission. The dismissal
of Ibias was well within the purview of petitioner’s
management prerogative. SMC was acting within its
right as employer when it dismissed Ibias. An
employer has the prerogative to prescribe reasonable
rules and regulation necessary for the proper conduct
of its business, to provide certain disciplinary
measures, and to assure that the same are complied
with.
LBC Express v. Mateo, June 9, 2009
Mateo was tasked to deliver and pick up packages
from LBC to its customers and was assigned a
Kawasaki motorcycle. He parked said vehicle and
switched off the engine but took the key with him, but
did not lock the steering wheel. When he returned,
the vehicle was gone. The management issued him a
notice of termination which led to im filing a
complaint for illegal dismissal. Mateo was
undisputedly negligent when he left the motorcycle
along Burke Street in Escolta, Manila without locking
it despite clear, specific instructions to do so. He
deliberately did not heed the employers very
important precautionary measure to ensure the
safety of company property. The memorandum
directing Mateo to be present for
investigation clearly provided the reasons or grounds
for Mateo's investigation. As stated there, the
grounds were the alleged carnapping of the
motorcycle and the alleged pilferage of a package.
Nothing could be clearer. What the law merely
requires is that the employee be informed of the
particular acts or omissions for which his dismissal is
sought. that. Mateo was thereafter given the
opportunity to explain his side and was handed the
requisite second notice (of termination). Thus,
procedural due process was complied with.
Genuino v. NLRC, December 4, 2007
Genuino was employed by Citibank as Treasury Sales
Division Head. She was sent a letter that she was
under preventive suspension and after investigation,
her employment was terminated on the ground of
serious misconduct, commission of a crime against
the bank and willful breach of the trust reposed upon
her. SC held that she was dismissed for just cause but
without the observance of due process. The first
written notice to be served on the employees should
contain the specific causes or grounds for termination
against them, and a directive that the employees are
given the opportunity to submit their written
explanation within a reasonable period. Reasonable
59
opportunity should be construed as a period of at
least five (5) calendar days from receipt of the notice
to give the employees an opportunity to study the
accusation against them. After serving the first
notice, the employers should schedule and conduct a
hearing or conference. After determining that
termination of employment is justified, the employers
shall serve the employees a written notice of
termination. Here, the letters sent by Citibank did not
identify the particular acts / omissions allegedly
committed by Genuino. The first notice informing the
employee of the charges should neither be pro-forma
nor vague. It should set out clearly what the
employee is being held liable for.
Bughaw v. Treasure Island, March 28,
2008
An employee of Treasure Island was caught in
flagrante delicto while in possession of shabu and
implicated Bughaw in said crime. Three letters were
sent terminating his employment for using illegal
drugs within company premises. Bughaw filed for
illegal dismissal. The requirements for the lawful
dismissal of an employee are twofold, the substantive
and the procedural aspects. Not only must the
dismissal be for a just or authorized cause, the
rudimentary requirements of due process — notice
and hearing— must, likewise, be observed before an
employee may be dismissed. The charge of drug
abuse inside the company's premises and during
working hours against petitioner constitutes serious
misconduct, which is one of the just causes for
termination. Furthermore, the burden on respondent
to present clear and unmistakable proof that
petitioner was duly served a copy of the notice of
termination but he refused receipt. Where the
dismissal is for just cause, as in the instant case, the
lack of statutory due process should not nullify the
dismissal or render it illegal or ineffectual. However,
the employer should indemnify the employee for the
violation of his right to procedural due process.
Moreno v. San Sebastian College, March
28, 2008
Moreno was a member of the permanent college
faculty who was terminated for her unauthorized
external teaching engagements. In order to
constitute serious misconduct which will warrant the
dismissal of an employee under paragraph (a) of
Article 282 of the Labor Code, it is not sufficient that
the act or conduct complained of has violated some
established rules or policies. It is equally important
and required that the act or conduct must have been
performed with wrongful intent. SSC-R merely
anchored Moreno’s alleged bad faith on the fact that
she had full knowledge of the policy that was violated
and that it was relatively easy for her to secure the
required permission before she taught in other
schools. Thus, it failed to prove that misconduct was
induced by wrongful intent. Also, one of the
provisions therein categorically stated
that should a violation of any of the terms and
conditions thereof be committed, the penalty that will
be imposed would either be suspension or dismissal
from employment. Thus, contrary to its position from
the beginning, SSC-R clearly had the discretion to
impose a lighter penalty of suspension and was not at
all compelled to dismiss Moreno under the
circumstances, just because the Faculty Manual said
so.
Janssen Pharmaceutica v. Silayro,
February 26, 2008
Silayro was terminated for granting unauthorized
premium goods to and from customers and
dishonesty in accomplishing the DCR. In termination
cases, the burden of proof rests with the employer to
show that the dismissal is for just and valid cause.
Failure to do so would necessarily mean that the
dismissal was not justified and therefore was illegal.
Dishonesty is a serious charge, which the employer
must adequately prove, especially when it is the basis
for termination. In this case, petitioner had not been
able to identify an act of dishonesty,
misappropriation, or any illicit act, which the
respondent may have committed in connection with
the erroneously reported product samples. No willful
violation was committed but only a failure to exercise
a standard of care. The superficial compliance with
two notices and a hearing in this case cannot be
considered valid where these notices were issued and
the hearing made before an offense was even
committed.
Suico v. NLRC, January 30, 2007
In all three cases, notices were sent to the
complainants in order for them so submit a written
and notarized explanation for their actions and why
they should not be terminated. However, they did not
submit any written explanation but only gave a letter
informing the company that they are electing the
their right to a formal hearing. Nevertheless, because
the complainants did not submit a written
explanation, the company considered this as a waiver
of their right to a hearing and dismissed them for
serious misconduct.
PLDT violated the requirements of due process under
the Labor Code when it dismissed said employees
without heeding their request for the conduct of a
formal hearing as provided for under PLDT Systems
Practice and prior to submission of their respective
answers to the charges against them. The first
notices sent to Suico, et al. set out in detail the
60
nature and circumstances of the violations imputed to
them, required them to explain their side and
expressly warned them of the possibility of their
dismissal should their explanation be found wanting.
The last notices informed Suico, et al. of the decision
to terminate their employment and cited the
evidence upon which the decision
was based. These two notices would have sufficed
had it not been for the existence of Systems Practice
No. 94016. Under Systems Practice No. 94016, PLDT
granted its employee the alternative of either filing a
written answer to the charges or requesting for
opportunity to be heard and defend himself with the
assistance of his counsel or union representative, if
he so desires. Suico, et al. exercised their option
under Systems Practice No. 94016 by requesting that
a formal hearing be conducted. PLDT is bound to
comply with the Systems Practice.
Perez & Doria v. PT&T, April 7, 2009
Acting on an alleged unsigned letter, the company
conducted an investigation on Perez and Doria
(shipping clerk and supervisor respectively) regarding
anomalous transactions in the Shipping section when
they jacked up the value of the freight costs and the
duplicates of the shipping docs allegedly showed
traces of tampering. Petitioners were placed in
preventive suspension for 30 days, extended another
30 days before they were dismissed.
The SC held that they were dismissed without just
cause and w/o due process. Petitioners failed to
establish loss of trust and confidence because they
relied on bare allegations. Willful breach by the
employee of the trust reposed in him by his employer
or duly authorized representative is a just cause for
termination. However, confidence should not be
simulated. It should not be used as a subterfuge for
causes which are improper, illegal, or unjustified. The
burden of proof rests on the employer to establish
that the dismissal was for a just cause in view of the
security of Tenure under the Constitution and the
Labor Code.
Bacolod-Talisay Realty v. Dela Cruz, April
30, 2009
Dela Cruz was dismissed on charges of payroll
padding, selling canepoints w/o the consent of
management and misappropriating proceeds.
Investigation revealed that there were farm workers
whose names were entered into the payroll even
though they have not rendered service and while
Dela Cruz said he would return the money, he did not.
The SC held that Bacolod Talisay was able to establish
with substantial evidence that just cause existed for
termination of employment. The acts committed
constitute willful breach of the trust reposed in him
by the employer and his a ground for termination.
SAMASAH-NUWHRAIN v. VA Magsalin,
June 6, 2011
Angelito Caragdag, a waiter and a director of the
union, was dismissed due to: (1) refused to be
frisked; (2) barged in while his immediate supervisor
was about to counsel 2 staff members; (3) He left his
work assignment during official hours w/o permission.
Voluntary Arbitrator found his dismissal legal but
granted him financial assistance of 100K. The SC held
that the grant of severance compensation shall be
allowed only when the cause of the dismissal is other
than serious misconduct or for causes which reflect
adversely on the employee’s moral character.
Lopez v. Alturas Group of Companies,
April 11, 2011
Lopez, a truck driver, wa dismissed for smuggling
scrap iron using the company’s truck. Company filed
a case for qualified theft. On the other hand, Lopez
sued for illegal dismissal. Two Facets of Dismissal: (1)
legality of the act of dismissal (substantive due
process); (2) legality of the manner of dismissal
(procedural due process). As to substantive,
petitioner was entrusted with the company’s goods
and property, and its handling and protection. Hence,
even if he did not occupy a managerial position, he
can be said to e holding a position of responsibility. As
to procedural, he was given opportunity to explain his
side when he was informed of the charges against
him and required to submit written explanation which
he complied. That there was no hearing is of no
moment.
Concepcion v. Minex Import
Corporation, January 24, 2012
Concepcion was the supervisor of Minex’s kiosk. One
weekend their total sales reached P50K so petitioner
wrapped the amount in a bag and deposited it in the
drawer. The next day, money was gone. She reported
the incident to her Manager who came with two
policemen who arrested her. The RTC found probable
cause in the THEFT case filed against her. The
conviction of an employee in a criminal case is not
indispensable to warrant his dismissal by his
employer. If there is 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, it
cannot justly deny to the employer the authority to
dismiss such employee.
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Prudential Guarantee & Assurance
Labor Union v. NLRC, June 13, 2012
The company conducted an on-the-spot security
check in the IT department beginning with Vallota’s
(Junior Programmer and Union BOD) computer. They
found a folder named “MAA”. Sensing that Vallota
was being singled out, the Union insisted that all the
computers be checked. She was eventually
dismissed. The SC held that to be a valid ground for
dismissal, loss of trust and confidence must be based
on willful breach of trust and founded on clearly
established facts. A breach is willful if it is done
intentionally, knowingly and purposely without
justifiable excuse, as distinguished from an act done
carelessly, thoughtlessly, heedlessly or inadvertently.
It must rest on substantial grounds and not on the
employer’s arbitrariness, whims, caprices, or
suspicion; otherwise, the employee would remain
eternally at the mercy of the employer. Further, in
order to constitute a just cause, the act complained
of must be work-related and show that the employee
is unfit to continue working for the employer.
Cosmos Bottling Co. v. Fermin, June 20,
2012
Wilson Fermin was accused of stealing his fellow
employee’s phone which was found in his locker.
Thereafter, Braga, the owner of the phone, withdrew
his complaint and believed that it was a prank but the
company still dismissed him. Theft committed against
a co-employee is considered as a case analogous to
SERIOUS MISCONDUCT for which the penalty of
dismissal from service may be meted out to the
erring employee.
Sampaguita Auto Transport v. NLRC &
Sagad, January 30, 2013
Sagad was hired as a bus driver. An evaluator was
deployed in guise of a passenger to observe driver’s
work performance and results lead to him being a
reckless driver. Conductors were also asked to
comment on Sagad’s work and it was revealed that
he cheats by way of an unreported early bus trip, and
was involved in a hit-n-run accident.
The irregularities or infractions committed by Sagad
in connection with his work constitutes serious
misconduct or at the very least, conduct analogous to
serious misconduct. He also committed breach of
trust and confidence of his employer.
Dongon v. Rapid Movers, August 28,
2013
Tanduay’s security guard called the attention of
Dongon (truck helper leadman) for Villaruz (driver)
was not wearing his ID. Dongon reassured the guard
that he will secure a special permission from the
management but instead, he lent his ID to Villaruz to
be able to obtain clearance for the release of the
goods they will deliver to clients. The SC held that
willfulness must be attended by a wrongful and
perverse mental attitude rendering the employee’s
act inconsistent with proper subordination. It is
implied that in every act of willful disobedience, the
erring employee obtains undue advantage
detrimental to the business interest of the employer.
In this case, petitioner’s motive in lending his
company ID to Villaruz was to benefit the company.
Thus, his dismissal was plainly unwarranted.
Alilem Credit Cooperative v. Bandiola,
February 25, 2013
Petitioner’s BOD received a letter from a certain
Napoleon reporting the alleged immoral conduct and
unbecoming behavior of respondent for his illicit
relationship with Thelma, Napoleon’s sister. They
both denied the allegation. Petitioner’s investigation
revealed that they were having an extra-marital
affair. Engaging in illicit marital affairs is a ground for
termination of employment not only under the law
but even under the Personnel Policy of the petitioner.
Cavite Apparel v. Marquez, February 6,
2013
Michelle was dismissed for HABITUAL ABSENTEEISM
for being AWOL on 3 different occasions despite
showing of medical certificates. But the SC held that
her absences are not habitual. Neglect of duty, to be
a ground for dismissal, must be both gross and
habitual. GROSS NEGLIGENCE implies ant of care in
the performance of one’s duties. HABITUAL NEGLECT
imparts repeated failure to perform one’s duties for a
period of time, depending on the circumstances.
Here, 4 absences in her 6 years of service cannot be
considered gross and habitual neglect of duty,
especially so since the absences were spread out
over a 6-month period.
Esguerra v. Valle Verde, June 13, 2012
Esguerra was hired as Cost Control Supervisor. The
management found out that proceeds which had
been remitted to the accounting department for an
event were lacking. Also, there were unauthorized
charges of food on one of the participants. The SC
held that as Cost Control Supervisor, she had the
duty to remit to the accounting department the cash
sales proceeds from every transaction she was
assigned to. This is not a routine task any employee
can perform Thus, Esguerra occupies a position of
trust and confidence. Any breach of the trust imposed
upon her can be a valid ground for dismissal.
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Leus v. St. Scholastica’s College-
Westgrove, January 28, 2015
Cheryll Santos Leus was hired as Assistant to the
Director of the Lay Apostolate and Community
Outreach Directorate. Leus and her boyfriend
conceived a child out of wedlock. She was asked to
resign but she refused. Leus and her boyfriend got
married. She was dismissed for serious misconduct.
The fact of Leus’ pregnancy out of wedlock, without
more, is not enough to characterize the petitioner’s
conduct as disgraceful or immoral. The totality of the
circumstances surrounding the conduct alleged to be
disgraceful or immoral must be assessed against the
prevailing norms of conduct. It is not the totality of
the circumstances surrounding the conduct per se
that determine whether the same is disgraceful or
immoral, but the conduct that is generally accepted
by society as respectable or moral.
Saudi Arabian Airlines v. Rebesencio,
January 14, 2015
Respondents (flight attendants) were separated from
service on for being pregnant despite having
processed their maternity leaves. Saudia asked them
to resign but they refused. They received a letter
which had the word “RESIGNATION”. Constructive
dismissal is the cessation of work because continued
employment is rendered impossible, unreasonable or
unlikely, as an offer involving a demotion in rank or a
diminution in pay and other benefits. It is tantamount
to involuntary resignation due to harsh, hostile, and
unfavorable conditions set by the employer. The
gauge is whether a reasonable person in the
employee’s position would feel compelled to give up
his employment under the prevailing circumstances.
Capin-Cadiz v. Brent Hospital and
Colleges, February 24, 2016
Petitioner was subject to an indefinite suspension due
to her alleged immoral act of engaging in premarital
sexual relations and getting pregnant in the process.
Also, as a condition for her reinstatement, she must
marry her boyfriend. She was illegally dismissed.
[Same doctrine as Leus v. St. Scho]
Puncia v. Toyota Shaw, June 28, 2016
Puncia was tasked to sell 7 vehicles monthly as quota
but for 2 months he was only able to sell 1. A hearing
was conducted but he failed to attend such despite
due notice. Toyota dismissed him on the ground of
insubordination for his failure to attend the scheduled
hearing and justify his absence. Puncia’s repeated
failure to perform his duties (reaching his quota) falls
under the concept of gross inefficiency. In this
regard,case law instructs that “gross inefficiency” is
analogous to “gross neglect of duty”, a just cause of
dismissal under Art. 297 of the LC.
PJ Lhuillier, Inc. v. Camacho, February
22, 2017
Camacho brought along an unauthorized person, a
non-employee during the QTP operation (pull-out of
foreclosed items). Camacho explained that he
requested his mother’s personal driver to drive him to
Pangasinan.He was dismissed for it was a clear
violation of an established company policy designed
to safeguard the pawnshop against robberies and
untoward incidents.
The SC upheld his dismissal. He was primarily
responsible for administering and controlling the
operations of branches in his assigned area, ensuring
cost efficiency, manpower productivity. He was also
responsible for monitoring the overall security and
integrity in the area, including branch personnel
safety. It can be deduced that Camacho held a
managerial position and enjoyed full trust and
confidence of his superiors. His act was without
justification. The fact that an employer did not suffer
pecuniary damage will not obliterate the
respondent’s betrayal of trust and confidence
reposed in him by his employer.
Alaska Milk Corporation v. Ponce, July
26, 2017
Ponce (Director for Engineering Services) was
dismissed for his abrasive behavior towards his
colleagues, his failure to provide updates on several
engineering works, and for soliciting official receipts
from colleagues in exchange for 5% rebate of the
value of receipts given to him. The SC held that
soliciting ORs in exchange of a 5% cash rebate is an
act inimical to the company’s interests because
Ponce will be reimbursed for expenses he did not
incur. They consider such act a fraudulent
representation sufficient to erode its trust and
confidence.
Allan John Uy Reyes v. Global Beer
Below Zero, Inc., October 4, 2017
Petitioner was late for work because his son was sick.
VP for Operations Vinson Co say won’t listen to his
explanation and told him not to report to work
anymore. Petitioner did not report to work on the
following days and waited for further instructions.
Vinson asked petitioner to resign but he refused. He
filed for illegal dismissal. Respondent claims that
petitioner was not dismissed and that he simply
stopped reporting to work.
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Abandonment requires deliberate, unjustified refusal
of the employee to resume his employment, without
intention of returning. For abandonment to exist, two
factors must be present: (1) failure to report for work
or absence w/o valid or justifiable reason; (2) a clear
intention to sever employer-employee relationship
with the second element as the more determinative
factor being manifested by some overt acts. In this
case, no such abandonment was proven.
Authorized Causes
Andrada v. NLRC, December 28, 2007
Employees were terminated based on retrenchment.
Court held that there was NO valid retrenchment.
Retrenchment is an exercise of management’s
prerogative to terminate the employment of its
employees en masse, to either minimize or prevent
losses, or when the company is about to close or
cease operations for causes not due to business
losses. It is an authorized cause. The requirements
are that:
(1) It is undertaken to prevent losses, which are
not merely de minimis, but substantial,
serious, actual, and real, or if only expected,
are reasonably imminent as perceived
objectively and in good faith by the employer;
(2) The employer serves written notice both to
the employees and the DOLE at least one
month prior to the intended date of
retrenchment; and
(3) The employer pays the retrenched employees
separation pay equivalent to one month pay
or at least month pay for every year of
service, whichever is higher. The Court later
added the requirements that the employer
must use fair and reasonable criteria in
ascertaining who would be dismissed and x x
x retained among the employees and that the
retrenchment must be undertaken in good
faith. Except for the written notice to the
affected employees and the DOLE, non-
compliance with any of these requirements
render[s] the retrenchment illegal.
In the present case, Company failed to show its
financial condition prior to and at the time it enforced
its retrenchment program. Another authorized cause
is redundancy. It exists when the number of
employees is in excess of what is reasonably
necessary to operate the business. Here, Company
did not even bother to illustrate or explain in detail
how and why it considered petitioners positions
superfluous or unnecessary.
Manatad v. PT&T, March 7, 2008
Employee was dismissed based on retrenchment.
Court held that it was a VALID retrenchment. Firstly,
the losses expected should be substantial and not
merely de minimis in extent. Secondly, the
substantial loss apprehended must be reasonably
imminent, as such imminence can be perceived
objectively and in good faith by the employer. thirdly,
be reasonably necessary and likely to effectively
prevent the expected losses. Lastly, alleged losses if
already realized, and the expected imminent losses
sought to be forestalled, must be proved by sufficient
and convincing evidence. In the case at bar,
respondent experienced serious financial crises as
shown in the financial statements audited by
independent auditors, SGV & Co. and Alba Ledesma &
Co. It is unlikely therefore that respondent was just
feigning business losses in order to ease out
employees. In fact, even granting arguendo that
respondent was not experiencing losses, it is still
authorized by Article 283 of the Labor Code to cease
its business operations. Explicit in the said provision
is that closure or cessation of business operations is
allowed even if the business is not undergoing
economic losses.
Linton Commercial v. Hellera, October
10, 2007
Workers filed a Complaint for illegal reduction of
workdays with the NLRC. They pointed out that Linton
implemented the reduction of work hours without
observing Article 283 of the Labor Code, which
required submission of notice thereof to DOLE one
month prior to the implementation of reduction of
personnel. Linton had failed to establish enough
factual basis to justify the necessity of a reduced
workweek and present adequate, credible and
persuasive evidence that it was indeed suffering, or
would imminently suffer, from drastic business losses.
for retrenchment to be justified, any claim of actual
or potential business losses must satisfy the following
standards:
(1) the losses incurred are substantial and not
de minimis;
(2) the losses are actual or reasonably
imminent;
(3) retrenchment is reasonably necessary and
is likely to be effective in preventing expected
losses; and
(4) the alleged losses, if already incurred, or
the expected imminent losses sought to be
forestalled, are proven by sufficient and
convincing evidence.
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AMA Computer College v. Garcia, April
14, 2008
Employees were dismissed based on redundancy.
Court held that there was ILLEGAL DISMISSAL.
Redundancy exists when the service capability of the
workforce is in excess of what is reasonably needed
to meet the demands of the business. Requisites are:
1) Good faith if ER in abolishing the redundant
position; and
2) Fair and reasonable criteria in ascertaining
what positions are to be declared redundant
and accordingly abolished.
There must be adequate proof of such redundancy; it
is not enough to allege that company has become
overmanned. Also, there was no proof that
reasonable criteria was applied. Some criteria are:
- Less preferred status (e.g. temporary EE)
- Efficiency
- Seniority
GSWU-NAFLU-KMU v. NLRC, October 17,
2006
Employees were terminated due to serious business
losses. EEs filed a suit for illegal dismissal, ULP &
money claims. They argued, among others, that the
notice requirement was not complied with. Court held
that The mere posting on the company bulletin
board does not, meet the requirement under
Article 283 of serving a written notice on the
workers. The purpose of the written notice is to
inform the employees of the specific date of
termination or closure of business operations, and
must be served upon them at least one month before
the date of effectivity to give them sufficient time to
make the necessary arrangements. To meet the
foregoing purpose, service of the written notice
must be made individually upon each and every
employee of the company.
Also, Court held that EEs are entitled to separation
pay when there was retrenchment to prevent losses
or in cases of closure, BUT NOT due to losses or
financial reverses.
Dickinson Philippines v. NLRC,
November 15, 2005
EE was terminated based on redundancy. Court held
that he was ILLEGALLY DISMISSED. The principal
reason why respondent’s position was declared
redundant is the fact that he was the highest paid
employee. The Company’s main purpose in
terminating [respondent] was to cut down expenses
and it did so by dismissing him in one fell swoop,
camouflaging its malice by using the ground of
redundancy. Thus was violated the Company rule that
the decision to terminate must not be based on
salary.
There is no clear proof that respondent’s services are
in excess of the Company’s reasonable demands and
requirements; and that there is no other alternative
available to the Company except to dismiss
respondent. The superfluity of [respondents] position
has not been established. There has been no previous
over-hiring of employees. On the contrary, the
Company had already terminated nine (9) employees.
There is no proof of decreased volume of business.
Court explained that a position is superfluous as an
outcome of diff. Factors: over-hiring of workers,
decrease in volume of business, dropping of a
particular product line/service activity.
PT & T v. NLRC, April 15, 2005
PT&T realized that it needed to undertake measures
against losses to prevent the company from going
bankrupt, particularly by reducing its workforce from
2,500 to 900 employees. It decided to implement a
temporary retrenchment of some employees
dubbed as Temporary Staff Reduction Program
(TSRP) lasting for not more than five and a half (5)
months. EEs now question this.
Court held that there was NO valid retrenchment
program. First, PT&T sufficiently complied with its
burden to prove that it incurred substantial losses to
warrant the exercise of the extreme measure of
retrenchment to prevent the company from totally
going under. However, while an employer may have a
valid ground for implementing a retrenchment
program, it is not excused from complying with the
required written notice served both to the employee
concerned and the DOLE at least one month prior to
the intended date of retrenchment. The purpose of
this requirement is not only to give employees some
time to prepare for the eventual loss of their jobs and
their corresponding income, look for other
employment and ease the impact of the loss of their
jobs but also to give the DOLE the opportunity to
ascertain the verity of the alleged cause of
termination. Compliance with the one-month notice
rule is mandatory regardless of whether the
retrenchment is temporary or permanent. This was
not complied with.
Oriental Petroleum v. Fuentes, October
14, 2005
EEs were terminated due to retrenchment.
Retrenchment was allegedly based on serious
financial losses of the company. Court held that it was
invalid for failure to comply with substantive and
procedural requirements. Retrenchment being a
measure of last resort, they should have been able to
65
demonstrate that it expected no abatement of its
losses in the coming years; that petitioner was not
able to prove that retrenchment was resorted to only
after less drastic means have been tried and found
wanting. Also, as regards the rule that reasonable
criteria be used in effecting retrenchment, such as
but not limited to: (a) less preferred status (e.g.,
temporary employee); (b) efficiency; and (c)
seniority, Oriental failed to demonstrate its
transparency and good faith in the implementation of
its decision to retrench respondents. Moreover, with
more reason should the retrenchment in this case be
held invalid, considering that petitioner utterly failed
to show that it had any standard at all in selecting the
employees to be retrenched.
FASAP v. PAL, July 22, 2008 and October
2, 2009
PAL applied Section 112 of the PAL-FASAP CBA in
retrenching cabin crew personnel: that retrenchment
shall be based on the individual employee’s efficiency
rating and seniority. PAL determined the cabin crew
personnel efficiency ratings through an evaluation of
the individual cabin crew member’s overall
performance for the year 1997 alone, it did not
consider their performance during the previous years.
The burden falls upon the employer to prove
economic or business losses with sufficient
supporting evidence. Its failure to prove these
reverses or losses necessarily means that the
employee’s dismissal was not justified. Any claim of
actual or potential business losses must satisfy
certain established standards before any reduction of
personnel becomes legal. These are:
(1) That retrenchment is reasonably
necessary and likely to prevent business
losses which are substantial, serious, actual
or real;
(2) That the employer served written notice
both to the employees and to the DOLE at
least 1 month prior to the intended date of
retrenchment;
(3) That the employer pays the retrenched
employees separation pay equivalent to 1
month pay or at least ½ month pay for every
year of service, whichever is higher;
(4) That the employer exercises its
prerogative to retrench employees in good
faith for the advancement of its interest and
not to defeat or circumvent the employees’
right to security of tenure; and,
(5) That the employer used fair and
reasonable criteria in ascertaining who would
be dismissed and who would be retained
among the employees, such as status,
efficiency, seniority, physical fitness, age, and
financial hardship for certain workers.
SC said that PAL failed to comply with element 1, 4
and 5. Because First, the fact that PAL underwent
corporate rehabilitation does not automatically justify
the retrenchment of its cabin crew personnel. Second,
the hiring of new employees and subsequent rehiring
of "retrenched" employees constitute bad faith.
Lastly, by discarding the cabin crew personnel’s
previous years of service and taking into
consideration only 1 year’s worth of job performance
for evaluation, PAL did away the concept of seniority,
loyalty and past efficiency, and treated all cabin
attendants as if they were on equal footing, with no
one more senior than the other.
General Milling Corp. v. Viajar, January
30, 2013
GMC terminated EEs based on redundancy. Court held
that there was no sufficient basis. There is no
showing that GMC made an evaluation of the existing
positions and their effect to the company. Neither did
GMC exert efforts to present tangible proof that it was
experiencing business slow down or over hiring. .On
the other hand, the respondent presented proof that
the petitioner had been hiring new employees while it
was firing the old ones, negating the claim of
redundancy.
Am-Phil Food v. Padilla, October 1, 2014
EE was retrenched due to serious business losses. He
argued that there are 6 contractual employees while
he was a regular employee with good evaluation
record. Moreover, Am-Phil was still hiring new
employees. Court held that there was NO valid
retrenchment for noncompliance with substantive
and procedural requirements.
● Am-Phil’s audited financial statements were
deemed unworthy of consideration for they
were not presented when the evidence in
chief were considered by the LA.
● Did not serve a written notice w/ DOLE 1
month before intended date of retrenchment.
● While it is true that Am-Phil gave Padilla
separation pay, compliance with none but
one (1) of the many requisites for a valid
retrenchment does not absolve Am-Phil of
liability.
SPI Technologies v. Mapua, April 7, 2014
Mapua was terminated due to redundancy. Court held
that she was illegally dismissed. SPI did not even
bother to differentiate the two positions allegedly
redundant. Furthermore, on the assumption that the
functions of a Marketing Communications Manager
are different from that of a Corporate Development
66
Manager, it was not even discussed why Mapua was
not considered for the position. Also, it is quite
peculiar that two kinds of notices were served to
Mapua, thereby causing confusion as regards the
effectivity of Mapua’s termination. Hence, SPI must
shoulder the consequence of causing the confusion
brought by the variations of termination letters given
to Mapua.
PNCC Skyway Corporation v. Secretary
of Labor and Employment, February 6,
2018
PSC served termination letters to its employees 3
days before the full transfer of its operation that will
lead it its closure of operation. It also served a notice
of termination to DOLE. Court held that PSC did not
comply with the procedural requirements, i.e. it did
not serve the written notice to the employees and to
the DOLE at least 1 month before the intended
date of cessation of business operations.
Purpose of this requirement is to give employees time
to prepare for the eventual loss of their jobs, as well
as DOLE, the opportunity to ascertain the veracity of
alleged cause of termination.
Manggagawa ng Komunikasyon sa
Pilipinas v. Philippine Long Distance
Telephone Co., April 19, 2017
PLDT terminated employees based on redundancy,
thus, the Union filed a notice of strike. Court held that
termination was valid. Redundancy is backed up by
substantial evidence that the services of employees
are in excess of what is required by the company.
PLDT presented data on the decreasing volume of
received calls by the Operator Services Center for
years 1996-2002. There was a 72% reduction of
demand calls due to growth of wireless
communication.
Constructive Dismissal/
Preventive Suspension
Maricalum v. Decorion, April 12 2006
Decorion was a regular employee of Maricalum. He
failed to attend a meeting called by the Supervisor,
thus, he was placed under preventive suspension for
insubordination. He was placed under disciplinary
suspension for 6 months which would include the
period of his preventive suspension. The Court held
that his preventive suspension was INVALID for
exceeding the 30-day allowable period of suspension.
Thus, this amounts to constructive dismissal.
Uniwide Sales v. NLRC, February 29,
2008
Kawada, was terminated on the grounds of violation
of company rules, abandonment of work, and loss of
trust and confidence. She received successive
memoranda accusing her of different infractions. The
Court held that Kawada was NOT constructively
dismissed. Constructive dismissal is the cessation of
work because continued employment is rendered
impossible, unreasonable or unlikely; when there is
demotion in rank, or diminution in pay or both; or
when a clear discrimination, insensibility, or disdain
by an ER becomes unbearable to the EE.
The test of constructive dismissal is whether a
reasonable person in the EE’s position would have felt
compelled to give up his position under the
circumstances. It is an act amounting to dismissal but
made to appear as if it were not. Kawada’s bare
allegations of constructive dismissal without
corroborating evidence cannot be given credence.
Norkis Trading v. Genilo, February 11,
2008
Genilo was appointed as Credit and Collection
Manager of Magna Financial Services Group, Norki’s
sister company. A special audit team found out that
Genilo forwarded the monthly collection reports of
the NICs under his supervision without checking the
veracity of the same. He was placed under 15 days
suspension without pay and allowances. Then, he was
appointed as Marketing Assistant. He failed a case for
illegal suspension and constructive dismissal, inter
alia. Court held that he was constructively
dismissed. The transfer an EE is prerogative of
management, provided that:
1) There is no demotion in rank of diminution of
salary, benefits and other privileges; and
2) The action is not motivated by discrimination,
made in bad faith, or effected as a form of
punishment or demotion without sufficient
cause.
In this case, there was a reduction in his duties and
responsibilities which amounted to a demotion
tantamount to constructive dismissal.
Fungo v. Lourdes School, July 27, 2007
Fungo questioned the dismissal of her husband from
the same school by using the documents from the
filing cabinet that was entrusted to her by the School
Treasurer. Thus, the School Treasurer compelled
Fungo to tender her resignation within 30 minutes,
otherwise, she will not receive her separation pay.
The Court held that Fungo was constructively
dismissed. Her act of retrieving the document did not
67
constitute a breach of trust and confidence since she
did not show the documents any other person except
to the School Treasurer himself. Fungo was made to
resign against her will with threat. Clearly, her
consent was vitiated.
The University of the Immaculate
Conception v. NLRC, January 26, 2011
Axalan (the EE) attended a seminar, then, she was
asked to explain why she should not be dismissed for
AWOL. She answered that she held online classes
while she attended the seminar so she could not be
considered absent. Then, Axalan attended another
seminar in Baguio. The Dean wrote to her again
informing her that 2nd attendance was subjected to a
2nd charge of AWOL. She was suspended for 6
months for each charge. Court held that there is NO
constructive dismissal as Axalan promptly resumed
teaching after the expiration of the suspension
period. Thus, Axalan cannot claim that she was left
with no choice but to quit, a crucial element in a
finding constructive dismissal.
Robinsons Galleria/Robinsons
Supermarket Corp. v. Sanchez, January
19, 2011
Ranchez was a probationary employee of Robinsons
Galleria for a period of 5 months. 2 weeks after she
was hired, she reported to her supervisor a loss of
cash amounting to P20 299. The operations manager
of the supermarket ordered that Ranchez be stripped-
search but it yielded nothing. Manuel reported the
matter to the police and she was constrained to
spend 2 weeks in jail. She later filed a complaint for
illegal dismissal thereafter, petitioner sent a notice of
termination. The SC held that Ranchez was illegally
dismissed. A probationary enjoys security of tenure.
Aside from the just and authorized causes of
termination, an additional ground is added for
dismissal of probationary employees i.e. failure to
qualify as a regular employee in accordance with
reasonable standards made known by the employer.
In this case, Ranchez was not afforded due process.
The haphazard manner in the investigation left
responded to cry foul. The company already pre-
judge her guilt without proper investigation and
instantly reported her to the police.
Dreamland Hotel v. Johnson, March 12,
2014
Dreamland Hotel was looking for a resort manager.
Johnson applied and was eventually hired. He gave a
loan of Php 100, 000 for the completion of the hotel.
At the start of his employment, the hotel was not yet
done. He eventually asked for his salary but was not
given and he was forced to resign. The Supreme
Court held that there existed constructive dismissal.
There is constructive dismissal when there is
cessation of works because continued employment is
rendered impossible or unlikely as an offer involving a
demotion or diminution in pay. It is impossible for him
to continue working for an employer who does not
pay his, salaries. The law grants 2 remedies to an
illegally dismissed employee; reinstatement with
back wages or separation pay with backwages. As
there are already strained relations between the
parties, then separation pay with back wages is
proper.
Intec Cebu, Inc. v. CA, June 22, 2016
Respondents were hired a production workers of
Intec. In 2005, their working days were reduced from
6 days to 24 days. Respondents eventually found out
that contractual workers are hired instead to perform
their tasks. They were subsequently terminated thus
filed for a complaint for illegal dismissal. The
Supreme Court ruled that there exists constructive
dismissal. There was no reason to implement cost
cutting measure in the form of reduction of
employees. At the time it was implemented, the
company was still earning based on its numbers for
2006. The hiring of new workers necessarily entailed
costs. In his case, there was no proof submitted that
the newly hired employees were performing work
different from the regular workers.
Sumifru (Philippines) Corporation v.
Baya, April 17, 2017
Baya was employed by AMSFC as a supervisor where
he joined the union of supervisors AMSKARBEMCO. He
was reassigned to DFC, the sister company of AMSFC.
During the transfer, Baya remained an active
member of the union while being a member of DFC’s
supervisory union. 220 ha of the 513 ha banana
plantation of AMSFC were covered by the
comprehensive agrarian reform law. In order to
ventur a possible business, the beneficiaries were
made to choose which group they wanted to belong,
AMSKARBEMCO or SAFFPAI (pro-company
beneficiaries association). The result yielded that
they were more inclined to join the first union. AMSFC
later learned that the first union choose another
corporation to enter into a business with. Thus, when
baya returned to AMSFC, he was given a rank and file
position. The SC held that in constructive dismissal
cases, the employer had the burden of proving that
the transfer and demotion of an employee are for a
valid and legitimate grounds such as genuine
business necessity. Both DFC and AMSFC were both
aware that there was already a lack of supervisory
position, yet they still ordered Baya’s return.
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Union Security Clause
Alabang Country Club v. NLRC, February
14, 2008
ACC and the union entered into a CBA which provided
a union shop clause. A new set of officers were
elected. During the audit, the new officers discovered
that there were irregularities in the recorded entries,
unaccounted expenses and disbursements and
uncollected loans. After explaining their side, the old
set of officers were dismissed from the union because
of malversation of union funds. The union demanded
from the corporation to terminate the old officers
because of the union shop clause, thus they were
dismissed. The Supreme Court held that the
termination was valid. Under the Code, an employee
may be validly terminated based on: (1) just causes;
(2) authorized causes; (3) disease; and (4)
resignation. Another form of termination is the
enforcement of the union security clause. To enforce
the clause, 3 things are needed to be proven: (1) the
union security clause is applicable; (2) the union is
requesting for the enforcement of the union security
provision; and (3) there is sufficient evidence to
support the union’s decision to expel the employee
from the union. In this case, all are present as the
language of the CBA which declared that members
must maintain their membership in good standing as
condition sine qua non or their continued
employment is unequivocal.
Inguillo v. First Philippine Scales, June 5,
2009
FSPI and the union entered into a CBA for 5 years.
During the lifetime of the CBA, petitioners joined
another union, NLM which is an affiliate of NLM-
Katipunan. NLM Katipunan filed an intra-union dispute
against the union and the company. NLM members
were ordered to return Php 90, 000 of union dues
erroneously collected from the members. The order
was not followed and later the executive board of the
union addressed a petition to the company seeking
termination of petitioners for disloyalty. Later, the
petitioners were terminated so they filed for illegal
dismissal. The Supreme Court held that the
termination because of the union security clause.
Under the Code, an employee may be validly
terminated based on: (1) just causes; (2) authorized
causes; (3) disease; and (4) resignation. Another form
of termination is the enforcement of the union
security clause. Under their CBA, it I clear that the
petitioners must remain a member in good standing
for continued employment. To enforce the clause, 3
things are needed to be proven: (1) the union
security clause is applicable; (2) the union is
requesting for the enforcement of the union security
provision; and (3) there is sufficient evidence to
support the union’s decision to expel the employee
from the union. In this case, all requisites were met
by the company.
General Milling Corp. v. Casio, March 10,
2010
Casio et al were regular employees of petitioner.
Officers and members of the union issued a resolution
expelling them from the union because of acts
inimical to public interest. The union threatened the
company that if they do not expel the respondent,
they will file a ULP case against the company. Thus
the company dismissed them. The Supreme Court
held that the dismissal was not valid. Under the Code,
an employee may be validly terminated based on: (1)
just causes; (2) authorized causes; (3) disease; and
(4) resignation. Another form of termination is the
enforcement of the union security clause. To enforce
the clause, 3 things are needed to be proven: (1) the
union security clause is applicable; (2) the union is
requesting for the enforcement of the union security
provision; and (3) there is sufficient evidence to
support the union’s decision to expel the employee
from the union. In this case however, there was no
sufficient evidence to support the termination of the
respondents.
Disease
Crayons Processing v. Pula, July 30,
2007
Pula was employed by petitioner as a preparation
machine operator. Eventually, he suffered a heart
attack and was advised to take a leave of absence for
3 months. Following the angiogram, he was
considered fit to work but 13 days later, he suffered
dizziness and was advised to take a LOA for 1 month.
When he returned, he was forced to resign as he was
not given any reassignment and was given financial
aid instead. The SC held that the termination was not
valid. For a dismissal based on disease to prosper, 2
requisites must concur: (1) the employee must be
suffering from a disease which cannot be cured within
6 months and his continued employment is prohibited
by law or prejudicial to his health or the health of his
co-employees; and (2) a certification to that effect
must be issued by a competent public health
authority. According to the SC, the certification is
required as in the case of its absence, the
characterization or even diagnosis of the disease
would primarily be shaped according to the interests
of the parties rather than the studied analysis of the
appropriate medical professionals.
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Villaruel v. Yeo Han Guan, June 1, 2011
Villaruel was an employee respondent. During the
course of his employment, he got sick and was
hospitalized for 2 months. When he reported for work,
he was no longer permitted to go back to work
because of his sickness. He was given separation pay
amounting to Php 15, 000. Villaruel argued that it is
not enough and that the separation pay should be
computed from his first day of employment which is
on June 1963. The Supreme Court said that
respondent did not actually terminate Villaruel: first,
the only cause of action in petitioner’s original
complaint is that he was offered a very low
separation pay; second, there was no allegation of
illegal dismissal; and third, there was no prayer for
reinstatement. It was petitioner who initiated the
severance of his employment relations with
respondent as he never intended to return to his
employment with respondent on the found that his
health is falling. Villaruel in effect resign. Resignation
is defined as a voluntary at of an employee who finds
himself in a situation where he believes that personal
reasons cannot be sacrificed in favor of the exigency
of the service and he has no other choice but to
disassociate himself from his employment. As he
resigned, he is not entitled to separation pay.
However, the SC granted financial assistance as a
measure of social and compassionate justice and as
an equitable concession.
Padillo v. Rural Bank of Nabunturan,
January 21, 2013
Padillo was employed by respondents as its SA
Bookkeeper. He suffered a mild stroke which
consequently impaired his ability to effectively pursue
his work. He wrote a letter addressed to respondent
expressing desire to avail of an early retirement
package, however this request remain unheeded. Not
having claimed his retirement benefits, Padillo filed
for recovery of unpaid benefits. According to the SC,
as it is petitioner who voluntary retired, the provisions
on termination on the ground of disease is not
applicable thus his claim for separation pay must be
denied. The applicable provisions therefore are those
stated under the Labor Code concerning retirement.
In the absence of any applicable agreement, an
employee must: (1) retire when he is at least 60
years of age; and (2) serve at least 5 years in the
company to entitle him to a retirement benefit of at
least ½ month salary for every year of service with a
fraction of 6 months being considered as a whole
year. These requirements are cumulative in nature.
Padillo in this case is only 55 years old so he cannot
claim for retirement benefits, without prejudice to the
proceeds under the Philam Life Plan. Nonetheless,
financial aid was granted by the SC.
Deoferio v. Intel Technology, June 18,
2014
Intel employed Deoferio and was assigned in the US.
He was later repatriated to the Philippines after he
was diagnosed for major depression with psychosis.
He underwent a series of medical and psychiatric
treatment after his confinement. At the PGH, Dr. Lee
concluded that the psychotic symptoms are not
curable within a period of 6 months and will
negatively affect his work and social relation with his
co-workers. Thus Intel chose to terminate him and he
later filed for illegal dismissal. The SC ruled that the
termination was valid. Dr. Lee’s report substantially
proves that Deoferio was suffering from
schizophrenia, which is not curable within 6 months
even with proper treatment. Moreover, this was
substantiated by the unusual and bizarre acts that
Deoferio committed while at Intel’s employ.
Temporary Suspension of
Operations/ Floating Status
Manila Mining Corp. Employees
Association v. Manila Mining Corp.,
September 29, 2010
MMC constructed several tailings dams to treat and
store its waste materials. After the expiration of the
tailings permit, the DENR-EMB did not issue a
permanent permit due to the inability of MMC to
secure an Environmental Clearance Certificate (ECC).
It was compelled to temporarily shut down its
operations and lay-off more than 400 employees.
MMC also called for the suspension of the negotiation
of the CBA with the union. According to the SC, the
lay-off was valid. MMC’s faultless failure to secure a
permit cause the shutdown as it did not succeed in
obtaining the consent of all residents in the
community. Thus, it is apparent that the suspension
of the operations was not due to its fault nor was it
necessitated by financial reasons. MMC’s suspension
of the negotiation cannot also be equated to a refusal
to bargain.
Nippon Housing v. Leynes, August 3,
2011
Nippon hired Leynes for the position of property
manager. Leynes had a misunderstanding with Engr.
Cantuba regarding the extension of the latter’s
working hours. Nippon allowed Cantuba to report to
work despite misunderstandings. Because of her
disappointment, she submitted a letter asking for an
emergency leave of absence because she needs to
coordinate with her lawyer regarding her resignation
letter. Later, she sent another letter expressing her
70
intention to return. However, a substitute was already
hired thus she was under floating status. The SC held
that the alleged termination was actually valid. The
hiring of a substitute was brought about by Leynes’
own rash announcement of her intention to resign.
She only had herself to blame for precipitately setting
in motion the events which led to a hiring of her
replacement.
SKM Art Corp. v. Bauca, November 27,
2013
SKM informed the 23 respondents that it will suspend
operations for 6 months because of a fire incident.
Respondents said that there was a discrimination in
choosing the workers to be laid off. According to the
SC, the suspension was valid. Under Art 286 of the
Labor Code. The bona fide suspension of the
operations of a business or undertaking for a period
not exceeding 6 months shall not terminate
employment. 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 1 month from the resumption of operations.
However, SKM failed to recall the employees after 6
months thus considered the employment already
terminated and therefore respondents were illegally
dismissed.
Exocet Security v. Serrano, September
29, 2014
Exocet assigned respondent as a close-in security
personnel for one of JG summits corporate officers.
After 8 years, respondent was reassigned as close-in
security for Lance Gokongwei. He was later relieved
by JG Summit and was not given any reassignment by
Exocet for more than 6 months. He thus filed for
illegal dismissal. According to the SC, respondent was
not constructively dismissed. While there is no
provision in the Code which governs “floating status”
or temporary “off-detail” of security guards, this
situation was considered by the SC as form of
temporary retrenchment or lay-off. The concept has
been defined as that period of time when security
guards are in between assignments or when they are
made to wait after being relieved from a previous
post until they are transferred to a new one. It takes
place when the security agency’s clients decide not
to renew their contracts with the agency, resulting in
a situation where the available posts under its
existing contracts are less than the number of guards
in its roster. The placement of the employee on a
floating status should not last for more than six
months. After six months, the employee should be
recalled for work, or for a new assignment; otherwise,
he is deemed terminated.
The security guard’s right to security of tenure does
not give him a vested right to the position as would
deprive the company of its prerogative to change the
assignment of, or transfer the security guard to, a
station where his services would be most beneficial to
the client. Respondent’s lack of assignment for more
than 6 months cannot be attributed to Exocet. On the
contrary, records show that one month after
Respondent was relieved, Exocet had already offered
a position in the general security service because
there were no available clients requiring positions for
VIP security.
Spectrum Security Services, Inc. v.
Grave, June 7, 2017
Spectrum employed and posted respondents security
guards at the premises of Ibiden Co. Later, the
security guards were issued notices “to return to
unit” directing them to report to its head office and to
update their documents for re-assignment because of
an action plan spectrum sought to implement.
However, the guards did not heed to such order.
According to the guards, the action plan amounted to
a constructive dismissal and it was the agency’s
retaliation for their bringing complaints to recover
unpaid holiday pay and 13th month pay. According to
the SC, the guards have actually abandoned their
works and had severed their employment relationship
themselves. After the lay-off period of 6 months, the
employers should either recall the affected security
guards to work or consider them permanently
retrenched pursuant to the requirements of the law;
otherwise, the employers would be held to have
dismissed them, and would be liable for such
dismissals.Despite having been notified of the need
for them to appear before the petitioner's head office
to update their documents for purposes of reposting,
the respondents refused to receive the notices, and
did not sign the same, without first knowing the
contents of the memo.
Illegal Strike
Jackbilt Industries v. Jackbilt Employees
Union, March 20, 2009
Article 264(e) of the Labor Code prohibits any person
engaged in picketing from obstructing the free
ingress to and egress from the employer’s premises.
Since the Union was found to have prevented the free
entry into and exit of vehicles from Jackbilt’s
compound, Union officers and employees clearly
committed illegal acts in the course through a strike.
The use of unlawful means in the course of a strike
renders such strike illegal. Therefore, strike was ipso
facto illegal. The filing of a petition to declare the
strike illegal was thus unnecessary. Article 264 of the
Labor Code further provides that an employer may
71
terminate employees found to have committed illegal
acts in the course of a strike. Petitioner clearly had
the legal right to terminate respondents officers and
employees.
Escario v. NLRC, September 27, 2010
As a general rule, backwages are granted to
indemnify a dismissed employee for his loss of
earnings during the whole period that he is out of his
job. Considering that an illegally dismissed employee
is not deemed to have left his employment, he is
entitled to all the rights and privileges that accrue to
him from the employment. However, back wages are
not granted to employees participating in an illegal
strike as it simply accords with the reality that they
do not render work for the employer during the
period of the illegal strike. The principle of a fair day's
wage for a fair day’s labor remains as the basic factor
in determining the award thereof. If there is no work
performed by the employee there can be no wage or
pay unless, of course, the laborer was able, willing
and ready to work but was illegally locked out,
suspended or dismissed or otherwise illegally
prevented from working. Thus, under the principle of
a fair day's wage for a fair day's labor, the petitioners
were not entitled to the wages during the period of
the strike (even if the strike might be legal), because
they performed no work during the strike.
Abaria v. NLRC, December 7, 2011
(relate to Bascon v. CA, February 5,
2004)
The local chapter president wrote to MCCHI
expressing desire to renew CBA. Atty. Alforque,
representative of NFL, found out about this and
according to him, this was never referred to NFL, the
mother federation. Thus, the collection of the union
fees was later temporarily suspended by the
company. Nava, the local chapter president,
protested this and claims to negotiate with them
directly instead of NFL. Thus, NFL sought to suspend
Nava with several others. The group later launched a
series of mass actions such as wearing of black and
red armbands. Later, they were dismissed. According
to the SC, the hospital cannot be guilty of ULP as
alleged by Nava’s group as the local chapter was not
a legitimate labor organization as it was never
registered and never certified by majority of the rank
and file hospital employees to represent them in the
CBA. Thus, being not registered, it cannot exercise
rights given to a legitimate labor organization.
Therefore, the strike is illegal as it cannot represent
the rights of its members having no legal personality.
Moreover, they have committed illegal acts by
blocking the ingress and egress of the hospital and
infliction of violence and intimidation to non-
participants.
PHIMCO Industries v. PHIMCO Industries
Labor Association, August 11, 2010
PHIMCO filed a petition to declare the strike of its
union illegal, alleging that the strikers prevented
entrance and exit to and from the company
compound via a virtual human blockade (moving
picket) and real physical obstructions (like benches or
makeshift structures). The Supreme Court ruled that
the strike was illegal. Here, the union fully satisfied
the procedural requirements [ (a) a notice of strike be
filed with the DOLE 30 days before the intended date
thereof OR 15 days, in case of ULP; (b) a strike vote be
approved by a majority of the total union membership in the
bargaining unit concerned, obtained via a secret ballot; and
(c) a notice be given to the DOLE of the results of said
voting at least 7 days before the actual strike ], but the
strike herein was still illegal because it was
accompanied by illegal means employed, such as
when the strikers herein blocked the free ingress and
engross from PHIMCO premises via actual violence
and patent intimidation while picketing. The said
illegal acts were established by pictures submitted by
PHIMCO clearly showed that though the picket was
moving, it was not peaceful because did effectively
obstruct the entry and exit points of the company
premises on various occasions. Thus, under Art.
279(e), the picketing carried on w/ violence, coercion
or intimidation, such as in this case, is unlawful.
VCMC v. Yballe, January 15, 2014
The president of a union (local affiliate of the
Federation which was the EBR of VCMC) (note that
this union is not a registered labor union) wrote to
VCMC, expressing their desire to renew the existing
CBA and their proposals to amend the same. VCMC
refused to bargain with them, explaining that the EBR
of their rank and file employees was the Federation,
not them. In the end, this resulted to the Union's
officers and its members to launch a series of mass
actions (wearing black and red armbands/headbands;
marching around the hospital premises; putting up
placards, posters, streamers). As a result of this,
VCMC dismissed them. Included amongst the
dismissed union members are herein respondents,
Yballe, et al.
The Court ruled that the strike was illegal for having
been conducted by a union which does not have the
legal personality to conduct one. Not being a
registered labor union, their Notice of Strike was
deemed not filed by the NCMB for want of legal
personality. But, the Court held that, despite the
illegal strike, Yballe, et al., as mere union members
who participated in the same, were still illegally
dismissed. In the Decision dated Dec. 7, 2011 (Abaria
case), the Court declared as invalid the dismissal of
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Hospital employees who participated in the illegal
strike conducted by Union which is not a legitimate
labor organization. Since there was no showing that
the union members committed any illegal act during
the strike (their participation limited only to wearing
armbands), they may not be deemed to have lost
their employment status by their mere participation
in the illegal strike. On the other hand, the union
leaders who conducted the illegal strike despite
knowledge that Union is not a duly registered labor
union were declared to have been validly terminated
by Hospital.
Suspension
Caong v. Regualos, January 26, 2011
Caong was employed as jeepney drivers under a
boundary agreement (drivers were required to pay a
specified amount to the jeepney owner, the excess of
which will be kept by the driver). There were
deficiencies in their boundary payments, so they
were barred from driving the jeepneys pending their
payment of the arrears. As such, Caong filed a case
for illegal dismissal against the jeepney owner. The
Court held that he was not illegally dismissed. All the
lower courts uniformly declared that Caong was not
dismissed from employment but merely suspended
pending payment of his arrears. Suspension was not
to sever the ER-EE relationship and it only dragged on
because Caong refused to pay the arrears.
Suspension cannot be categorized as dismissal,
considering that there was no intent on the part of
Regualos to sever the ER-EE relationship between him
and Caong. In fact, it was made clear that Caong
could put an end to the suspension if he only paid his
recent arrears.
Also, due process is simply the opportunity to be
heard. Since this is not a case of termination of
employment (just suspension), the twin-notice rule is
not necessary. The meeting conducted by Regualos
served as sufficient notice to Caong.
Montinola v. PAL, September 8, 2014
Montinola, a flight attendant employed by PAL, was
suspended for 1 year by PAL on the ground that she
committed violations of PAL's company policy.
Allegedly, these violations stem from a report they
received from the customs officials of Honolulu, which
states that she and her fellow crew members pilfered
a number of goods from the aircraft of PAL. Montinola
now questions the validity of her suspension and asks
to be granted moral and exemplary damages in
connection to the same. The Court ruled that
Montinola was illegally suspended. Security of tenure
of workers is a statutorily protected, and
constitutionally guaranteed right. Thus, any
deprivation of this right must be attended by due
process of law. This means that any disciplinary
action which affects employment must pass due
process scrutiny in both its substantive and
procedural aspects. Suspension from work is prima
facie a deprivation of this right (of security of tenure).
Thus, termination and suspension from work must be
reasonable to meet the constitutional requirement of
due process of law. It will be reasonable if it is based
on just or authorized causes enumerated in the Labor
Code. On the other hand, in order to comply with
procedural due process, the twin-notice rule must be
complied with. In this case, PAL denied Montinola
substantive due process. Just cause has to be
supported by substantial evidence. PAL was unable to
substantiate its claim.
Montinola is entitled to her claim of damages. Illegally
suspended employees, similar to illegally dismissed
employees, are entitled to moral damages when their
suspension was attended by bad faith or fraud,
oppressive to labor, or done in a manner contrary to
morals, good customs, or public policy.
Retirement
Cercado v. Uniprom, October 13, 2010
Uniprom implemented a company-wide early
retirement program for a number of its employees,
one of which was Cercado. Cercado rejected
Uniprom's offered early retirement package.
However, Uniprom, under the power given by their
retirement plan, still decided that Cercado was to
retire, and effected the same. Cercado then filed a
complaint for illegal dismissed against Uniprom.
The Court ruled that Cercado did not validly retire.
Retirement is the result of a bilateral act of the
parties, a voluntary agreement between the
employer and the employee whereby the latter, after
reaching a certain age, agrees to sever his or her
employment with the former. Article 302 of the Labor
Code, as amended by R.A. No. 7641, pegs the age for
compulsory retirement at 65 years, while the
minimum age for optional retirement is set at 60
years. An employer is, however, free to impose a
retirement age earlier than the foregoing mandates
as a valid exercise of MP. It is axiomatic that 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, its adhesive imposition will amount to a
deprivation of property without due process of law.
Acceptance by the employees of an early retirement
age option must be explicit, voluntary, free, and
uncompelled. While an employer may unilaterally
73
retire an employee earlier than the legally
permissible ages under the Labor Code, this
prerogative must be exercised pursuant to a mutually
instituted early retirement plan. In other words, only
the implementation and execution of the option may
be unilateral, but not the adoption and institution of
the retirement plan containing such option. For the
option to be valid, the retirement plan containing it
must be voluntarily assented to by the employees or
at least by a majority of them through a bargaining
representative.
Cercado did not accept or consent to the plan. CA
only deemed her to do so. However, implied
knowledge, regardless of duration, cannot equate to
the voluntary acceptance required by law in granting
an early retirement age option to an employer. The
law demands more than a passive acquiescence on
the part of employees, considering that an
employer’s early retirement age option involves a
concession of the former’s constitutional right to
security of tenure.
Consequences of Dismissal
Composite Enterprises v. Caparoso,
August 8, 2007
Caparoso filed a complaint for illegal dismissal
against Composite. LA ruled in favor of Caparoso,
finding that they were illegally dismissed. The NLRC
reversed this. Composite, now, questions the
decisions/orders of the lower tribunals, specifically on
whether the order for their reinstatement can be
changed to an order for payment of separation pay
instead, on the ground that Caparoso's position is no
longer available as the company is undergoing
retrenchment.
The Court ruled that the order for the reinstatement
of Caparoso should be followed. Reinstatement is the
restoration to a state or condition from which one has
been removed or separated. The intent of the law in
making a reinstatement order immediately executory
is much like a return-to-work order (i.e ., to restore
the status quo in the workplace in the meantime that
the issues raised and the proofs presented by the
contending parties have not yet been finally
resolved). It is a legal provision which is fair to both
labor and management because while execution of
the order cannot be stayed by the posting of a bond
by the employer, the workers also cannot demand
their physical reinstatement if the employer opts to
reinstate them only in the payroll. Payment of
separation pay as a substitute for reinstatement is
allowed only under exceptional circumstances, viz :
(1) when reasons exist which are not
attributable to the fault or are beyond the
control of the employer, such as when the
employer — who is in severe financial strait,
has suffered serious business losses, and has
ceased operations — implements
retrenchment, or abolishes the position due
to the installation of labor-saving devices;
(2) when the illegally dismissed employee has
contracted a disease and his reinstatement
will endanger the safety of his co-employees;
or,
(3) where a strained relationship exists
between the employer and the dismissed
employee
None of the above are availing in this case. As for the
claim of retrenchment, although it is a recognized
management prerogative, it is still subject to faithful
compliance with the substantive and procedural
requirements laid down by law and jurisprudence.
Here, these requirements were not complied with, or,
if it was complied with, there was no proof of such
compliance.
Sagum v. CA, May 26, 2005
Sagum was illegally dismissed, however the CA
denied her reinstatement. Instead, it ordered for the
employer to just pay her separation pay, citing
"strained relations". The Court ruled that the CA erred
in denying Sagum's reinstatement based on alleged
strained relations. The existence of strained relations
is a factual finding and should be initially raised,
argued and proven before the Labor Arbiter. Nowhere
was the issue of strained relations raised in ER’s
pleadings before the LA and the NLRC. As a rule, no
strained relations should arise from a valid and legal
act of asserting one's right; otherwise, an employee
who asserts his right could be easily separated from
the service by merely paying his separation pay on
the pretext that his relationship with his employer
had already become strained.
Agabon v. NLRC, November 17, 2004
Agabon, et al. were dismissed by their employer for
abandonment of work; and so, they filed a case for
illegal dismissal. The Court ruled that Agabon, et al.
were validly dismissed for a just cause (abandonment
of work). Abandonment is the deliberate and
unjustified refusal of an employee to resume his
employment. It is a form of neglect of duty, hence, a
just cause for termination of employment by the
employer. For a valid finding of abandonment, these
two factors should be present: (1) the failure to report
for work or absence without valid or justifiable
reason; and (2) a clear intention to sever ER-EE
relationship, with the second as the more
determinative factor. Agabon, et al. were frequently
absent since they were subcontracted for another
74
company. Subcontracting for another company
violation against ER violation
clearly showed the intention to sever the ER-EE
relationship. (technically, due to his Initiated by ER's exercise of
acts) EE initiated the his management
dismissal process prerogative
However, the ER in this case did not comply with
procedural due process (twin notice rule); and so, Payment of separation pay Payment of separation pay
they are should pay nominal damages (PhP 30K). The is NOT required is required
omnibus rules contemplate four possible situations
when an employee is dismissed:
Based on the above, SC held that:
(1) the dismissal is for a just cause (Art. 297),
(1) if the dismissal is based on a just cause (Art. 297)
for an authorized cause (Art. 298), or for
but the ER failed to comply with the notice
health reasons (Art. 299), and due process
requirement, the sanction to be imposed upon him
was observed;
should be TEMPERED because the dismissal process
(2) the dismissal is without just or authorized
was, in effect, initiated by an act imputable to the
cause but due process was observed;
employee; and
(3) the dismissal is without just or authorized
(2) if the dismissal is based on an authorized cause
cause and there was no due process; and
(Art. 298) but the employer failed to comply with the
(4) the dismissal is for just or authorized
notice requirement, the sanction should be STIFFER
cause but due process was not observed.
because the dismissal, process was initiated by the
employer's exercise of his management prerogative.
This case is under 4th situation. Under the 4th
situation, the dismissal should be upheld. While the
Also, Court held here that the CA erred when it
procedural infirmity cannot be cured, it should not
ordered Jaka to pay separation pay. In previous
invalidate the dismissal. However, the employer
jurisprudence, the SC held that the general rule is
should be held liable for noncompliance with the
that separation pay is required to be given to EEs in
procedural requirements of due process. As such,
all cases of business closure/cessation of operations
citing Wenphil v. NLRC, the court ruled that where the
by ER. The exception to this is when the closure of
employer had a valid reason to dismiss an employee
business / cessation of operations is due to serious
but did not follow the due process requirement, the
business losses or financial reverses; duly proved, in
dismissal may be upheld but the employer will be
which case, the right of affected EEs to separation
penalized to pay an indemnity (nominal damages) to
pay is lost for obvious reasons. The exception should
the employee [Belated Due Process Rule].
be applied in this case.

Jaka Food Processing v. Pacot, March 28, Industrial Timber v. Ababon, March 30,
2005 2006
EEs were dismissed by Jaka because Jaka was in dire
ITC ceased its business operations; however, they
financial straits. However, the dismissal was effected
failed to comply with procedural due process (no
without due process (no notice). The Court ruled that
notice). The Court ruled that the employees were
the employees were validly dismissed for the reason
validly dismissed for an authorized cause (cessation
of retrenchment (under an authorized cause). The
of business operations). In this case, there was a valid
Statement of Income and Deficit of Jaka to prove its
authorized cause considering the closure or cessation
alleged losses was prepared by an independent
of ITC’s business which was done in good faith and
auditor, SGV & Co. It convincingly showed that the
due to circumstances beyond ITC’s control.
corporation was in dire financial straits, which the EEs
failed to dispute.
Although the closure was done in good faith and for
valid reasons, SC finds that ITC did not comply with
However, since Jaka failed to comply with procedural
the notice requirement. ITC gave final notice to its
due process, they are required to pay nominal
workers of its closure on the same day closure was to
damages.The amount of nominal damages to be paid
take effect (instead of the 1 month notice required by
in this case is PhP50K. The amount here (50K) is
law). While the Court ruled that the sanction should
higher than the Abagon case (30K) because this case
be stiffer in a dismissal based on authorized cause
involves dismissal for an authorized cause, while
(Art. 298) (as the dismissal process was initiated by
Abagon involves dismissal for a just cause
the ER’s management prerogative) where the
JUST CAUSE (297) AUTHORIZED CAUSE employer failed to comply with the notice
(298)
requirement than a dismissal based on just cause
EE is guilty of some EE did not commit any (Art. 282) with the same procedural infirmity;
however, in instances where the execution of a
75
decision becomes impossible, unjust, or too
burdensome, modification of the decision becomes
necessary in order to harmonize the disposition with
the prevailing circumstances. In the determination of
the amount of nominal damages which is addressed
to the sound discretion of the court, several factors
are taken into account:
(1) the authorized cause invoked (whether it
was a retrenchment or a closure or cessation
of operations or otherwise);
(2) the number of employees to be awarded;
(3) the capacity of the employers to satisfy
the awards, taking into account their
prevailing financial status as borne by the
records;
(4) the employer's grant of other termination
benefits in favor of the employees; and
(5) whether there was a bona fide attempt to
comply with the notice requirements as
opposed to giving no notice at all.
Considering the circumstances in this case, SC
reduced the nominal damages from 50K to 10K.
Sangwoo Phil. v. Sangwoo Phils.
Employees Union, Dec. 9, 2013
ER closed its business due to serious economic losses
and financial reversion, posting notices regarding said
closure in conspicuous places of their office. ER also
offered to separation benefits in the amount of 1/2 of
the EE's monthly pay for every year of service. Most
of the employees accepted this offer; however, some
minority of the EEs refused the offer. The question
here is WON the minority EEs are entitled separation
pay and WON the notice requirement of Art. 298 was
complied with.
The Court ruled that the minority EEs are not entitled
to separation benefits. Closure of business, as an
authorized cause for termination of employment,
aims to prevent further financial drain upon an
employer who cannot pay anymore his employees
since business has already stopped. In such a case,
the employer is generally required to give separation
benefits to its employees, unless the closure is due to
serious business losses. The case of Galaxie was
cited, wherein the Court held that Art. 297 does not
obligate an employer to pay separation benefits when
the closure is due to serious losses. To require an
employer to be generous when it is no longer in a
position to do so, in our view, would be unduly
oppressive, unjust, and unfair to the employer. Ours
is a system of laws, and the law in protecting the
rights of the working man, authorizes neither the
oppression nor the self-destruction of the employer.
Perforce, without any cogent reason to deviate from
the findings on the validity of SPI's closure, the Court
thus hold that the ER is not obliged to give separation
benefits to the minority employees pursuant to Art.
297 as interpreted in the case of Galaxie. As such, SPI
should not be directed to give financial assistance
amounting to PhP15K to each of the minority
employees based on the Formal Offer of Settlement.
If at all, such formal offer should be deemed only as a
calculated move on the ER's part to further minimize
the expenses that it will be bound to incur should
litigation drag on, and not as an indication that it was
still financially sustainable. However, since the Union
chose not to accept, said offer did not ripen into an
enforceable obligation on the part of SPI from which
financial assistance could have been realized by the
minority employees.
Also, the Court ruled that the ER was unable to
comply with the notice requirement, when it merely
posted various copies of its notice of closure in
conspicuous places within the business premises. As
earlier explained, the ER was required to serve
written notices of termination to its employees, which
it, however, failed to do. So, while the ER had a valid
ground to terminate its employees (closure of
business), its failure to comply with the proper
procedure for termination renders it liable to pay the
employee nominal damages.
Equitable Banking v. Sadac, June 8,
2006
Issue here is WON salary increases should be part of
an EE's backwages. The Court ruled that it should
not. Art. 294 (security of tenure) mandates that an
EE’s full back wages shall be inclusive of allowances
and other benefits OR their monetary equivalent. A
salary increase CANNOT be interpreted as an
allowance or a benefit. Salary increases are not akin
to allowances or benefits, and cannot be confused
with either. The term allowances is sometimes used
synonymously with emoluments, as indirect or
contingent remuneration, which may or may not be
earned, but which is sometimes in the nature of
compensation, and sometimes in the nature of
reimbursement. Allowances and benefits are granted
to the EE separate from, and in addition to the wage
or salary. In contrast, salary increases are amounts
which are added to the EE's salary as an increment
thereto for varied reasons deemed appropriate by the
employer. Salary increases are not separate grants by
themselves but once granted, they are deemed part
of the EEs salary. To extend the coverage of an
allowance or a benefit to include salary increases
would be to strain both the imagination of the Court
and the language of law.
The base figure to be used in the computation of
backwages due to an EE should include the (1) basic
76
salary, and (2) regular allowances that he had been
receiving (such as the emergency living allowances
and the 13th month pay mandated under the law) at
the time of his dismissal.
Carlos v. CA, August 28, 2007
The main issue raised here is when the period for
computation of backwages and separation pay is
supposed to end? This question was squarely
addressed in Gaco v. NLRC where it was held that in
such circumstance, the computation shall be up to
the time of finality of this Court's decision.
Apparently, the justification is that along with the
finality of this Court's decision, the issue of illegal
dismissal is finally laid to rest. Parenthetically, in this
case, the award for separation pay equivalent to one-
month pay for every year of service shall be
computed from the time the EEs were illegally
separated from their employment up to the finality of
this Court's Decision.
Tomas Claudio Memorial College v. CA,
February 16, 2004
EE was dismissed by the College, since the EE was
arrested by the police for violating the Dangerous
Drugs Act. Due to his dismissal, the EE filed a
complaint against the College. In the end, it was held
that he was validly dismissed. The issue now is WON
a legally dismissed EE is entitled to the payment of
backwages during the period he was detained by the
police? The College argues that it is absurd for them
to pay backwages to the EE while the latter was in
jail, as the EE would thereby be enriching himself at
the expense of the College. The Court held that the
EE should be granted backwages, even if he was
validly dismissed. The payment of backwages is
generally granted on the ground of equity. It is a form
of relief that restores the income that was lost by
reason of the unlawful dismissal; the grant thereof is
intended to restore the earnings that would have
accrued to the dismissed employee during the period
of dismissal until it is determined that the termination
of employment is for a just cause. It is not private
compensation or damages but is awarded in
furtherance and effectuation of the public objective of
the Labor Code. Nor is it a redress of a private right
but rather in the nature of a command to the
employer to make public reparation for dismissing an
employee either due to the former's unlawful act or
bad faith.
The normal consequences of a finding that an
employee has been illegally dismissed are: (1) that
the employee becomes entitled to reinstatement to
his former position without loss of seniority rights;
and (2) the payment of backwages corresponding to
the period from his illegal dismissal up to actual
reinstatement. Though the grant of reinstatement
commonly carries with it an award of backwages, the
inappropriateness or non-availability of one does not
carry with it the inappropriateness or non-availability
of the other.
The award of backwages is not conditioned on the
EE’s ability or inability to, in the interim, earn any
income. While it may be true that the EE was
detained in Criminal Case No. 5137, the Prosecutor
found no probable cause for the detention of the EE
and resolved to dismiss the case. The private
respondent has not yet been convicted by final
judgment in Criminal Case No. 5251. Indeed, he is
presumed innocent until his guilt is proved beyond
reasonable doubt.
Chronicle Securities v. NLRC, November
25, 2004
EE was illegally dismissed. The question here is WON
the computation for backwages and separation pay
was proper (computed from dismissal until finality of
judgment for illegal dismissal)? The Court held that
the computation was improper, considering that the
ER (a broadsheet publisher) closed their publication
business years before the finality of the judgment.
ER's closure of their newspaper business was made
on legal and valid grounds. It was never resorted to
as a means to deprive the EE of the opportunity to be
reinstated to his former position. To allow the
computation of the backwages due the EE to be
based on a period beyond their closure would be an
injustice to the ER. Court's power to exact retribution
from erring employers for cases of illegal dismissal
should not go beyond what is recognized as just and
fair under the circumstances.
Intercontinental Broadcasting v.
Benedicto, July 20, 2006
EE (marketing manager) was illegally dismissed by
the ER. Now, the ER questions the computation for
backwages and commission granted to the EE, since
they were computed from the time of his dismissal
until the finality of the decision on illegal dismissal
(when EE already reached 68 years old, three years
beyond the mandatory retirement age). The Court
ruled that the computation for backwages and
commission was incorrect. EE was entitled to
backwages only up to the time he reached 65 years
old, the compulsory retirement age under the law.
When EE was illegally dismissed on Oct. 11, 1994, he
was already 64 years old. He turned 65 years old on
Dec. 1, 1994 at which age he was deemed to have
retired. Since backwages are granted on grounds of
equity for earnings lost by an employee due to his
illegal dismissal, EE was entitled to backwages only
for the period he could have worked had he not been
77
illegally dismissed (from time of dismissal until he
reached the compulsory retirement age).
EE was also entitled to commission only until the time
he reached 65 years old. commissions are given to
employees only if the ER receives income. EEs, as a
reward, receive a percentage of the earnings of the
ER, which they, through their efforts, helped produce.
Commissions are also given in the form of incentives
or encouragement so that EEs will be inspired to put
a little more industry into their tasks. Commissions
can also be considered as direct remunerations for
services rendered. All these different concepts of
commissions are incongruent with the claim that an
EE can continue to receive them indefinitely after
reaching his mandatory retirement age. EE's right to
the commissions was coterminous with his
employment; and, in this case, this ended when he
reached the compulsory retirement age.
Velasco v. NLRC, June 26, 2006
EE was illegally dismissed. However, in this case,
NLRC only awarded the EE separation pay, in lieu of
reinstatement, without backwages. The issue now
raised is WON separation pay, in lieu of
reinstatement, is proper and WON NLRC erred in not
granting EE backwages. The Court ruled that, in this
case, separation pay in lieu of reinstatement is
proper. The accepted doctrine is that separation pay
may avail in lieu of reinstatement if reinstatement is
no longer practical or in the best interest of the
parties. Likewise, separation pay in lieu of
reinstatement may be awarded if the employee
decides not to be reinstated. In this case, EE opted to
seek separation pay in lieu of reinstatement.
The Court ruled that the EE is correct in saying that
he is entitled to backwages, notwithstanding the
award of separation pay. It was grievous error
amounting to GAD on the part of the NLRC to have
considered an award of separation pay as equivalent
to the aggregate relief constituted by reinstatement
plus payment of backwages under Art. 294. The grant
of separation pay was a proper substitute only for
reinstatement; it could not be an adequate substitute
for both reinstatement and backwages.
PCIB v. Abad, February 28, 2005
EE was validly dismissed for loss of trust and
confidence (just cause) by the Bank. However, lower
tribunals still granted him separation pay. The Bank is
now questioning the grant of separation pay despite
the valid dismissal based on a just cause. The Court
ruled that the grant of separation pay is proper in this
case, despite valid dismissal. The award of separation
pay is required for dismissals due to causes specified
under Articles 298 (authorized cause) and 299 (due
to disease), as well as for illegal dismissals in which
reinstatement is no longer feasible. On the other
hand, an employee dismissed for any of the just
causes enumerated under Article 299 is not, as a
rule, entitled to separation pay. As an exception,
allowing the grant of separation pay or some other
financial assistance to an employee dismissed for just
causes is based on equity and social justice. The
Court, in the case of San Miguel v. Lao, made a the
test on when separation pay may be awarded.
Accordingly, it may be awarded provided that the
dismissal does not fall under either of two
circumstances:
(1) there was serious misconduct, or
(2) the dismissal reflected on the employees
moral character. In this case, the dismissal in
the present case was due to loss of trust and
confidence, not serious misconduct.
When EE violated the policy of the Bank, there was no
indication that his actions were perpetrated for his
self-interest or for an unlawful purpose. On the
contrary, and as the facts indicate his actions were
motivated by a desire to accommodate a valued
client of the bank.
Bago v. NLRC, April 4, 2007
LA ruled that the EE was illegally dismissed. This led
to the payroll reinstatement of the EE. The ruling of
the LA was overturned by the NLRC, which found that
the EE was validly dismissed for loss of trust and
confidence. As a result, the payroll reinstatement of
the EE was discontinued. The main issue in this case
is WON herein unilaterally discontinuation of the EE's
payroll reinstatement was valid. The Court ruled that
the EE's claim that ER "unilaterally withheld her
payroll reinstatement" after the NLRC reversed on the
LA's decision has no merit. Article 229, para. 6 of the
Labor Code provides that the decision of the NLRC on
appeals from decisions of the LA "shall become final
and executory after 10 calendar days from receipt
thereof by the parties." That the Court of Appeals
may take cognizance of and resolve a petition for
certiorari for the nullification of the decisions of the
NLRC on jurisdictional and due process considerations
does not affect the statutory finality of the NLRC
Decision. Also, in this case, there is no showing that
the CA issued a TRO to enjoin the execution of the
NLRC decision, as affirmed by its Resolution. The CA
or SC, also, did not overturn the Resolution of the
NLRC, so the NLRC's Resolution here became final
and executory, which was a valid basis for the
discontinuance of the payroll reinstatement.
Panuncillo v. CAP Phils., February 9,
2007
Issue was whether petitioner is entitled to back
wages from the date her compensation was withheld
78
pursuant to NLRC decision (reinstating her), until it
was reversed. The Court held no. An order of
reinstatement is immediately executory if it was from
the LA. NLRC decisions however are different as it
needs to issue a writ of execution based on Art. 224.
If the requirements of Art. 224 were to govern, then
the executors nature of a reinstatement order or
award contemplated by Art. 223 will be unduly
circumscribed and rendered ineffectual. Thus,
Panuncillo here is not entitled to collect any
backwages from the time NLRC decision became final
and executors up to the time it was reversed. In sum,
while under the 6th paragraph of Art. 223 of the LC,
the decision of the NLRC becomes final and executors
after the lapse of 10 calendar days from receipt
thereof by parties, the adverse party is not precluded
from assailing it via Petition for Certiorari under Rule
65 before the CA, and then to the SC via a petition for
review under Rule 45. If during the pendency of the
review, no order is issued by the courts enjoining the
execution of a decision of the LA or NLRC which is
favorable to the employee, the LA or NLRC must
exercise extreme prudence and observe judicial
courtesy when circumstances so warrant.
The order of reinstatement is incompatible with the
finding that the dismissal is for a valid cause, or
finding of guilt. Where the totality of the evidence
was sufficient to warrant the dismissal of the
employee, the law warrants their dismissal without
making any distinction between a first offender and a
habitual delinquent. Art. 223 of the LC is clear that
the employee, who is ordered reinstated must be
accepted back to work under the same terms and
conditions prevailing prior to their dismissal or
separation. The decision of the LA reinstating a
dismissed or separated employee, insofar as the
reinstatement aspect is concerned, shall immediately
be executors, even pending appeal. An order to
reinstate an employee, even to a position one rank
lower which was formerly held by petitioner was thus
erroneous.
Garcia v. Philippine Airlines, January 20,
2009
EE were dismissed for violating company’s code of
discipline. Issue was whether they may collect their
wages during the period between the LA’s
reinstatement pending appeal and the NLRC’s
decision overturning it--NO. SC affirms that even if
the order of reinstatement of the LA is reversed on
appeal, it is obligatory on the part of the employer to
reinstate and pay the wages of the dismissed
employee during the period of appeal until reversal
by the higher court. This settles that the LA’s order of
reinstatement is immediately executory and the
employer has to either (1) re-admit them to work or
(2) to reinstate them in the payroll, and that failing to
exercise either of the 2 options will require the
employer to pay the employee’s salaries.
However, after the LA’s decision is reversed by a
higher tribunal, the EE may be barred from collecting
the accrued wages, if it is shown that the delay in
enforcing the reinstatement pending appeal was
without the fault on the part of the ER. The test here
is twofold: (1) there must be actual delay or the fact
that the order of reinstatement pending appeal was
not executed period to its reversal; and (2) the delay
must not be due to the ER’s unjustified act or
omission. If the delay is due to the employer’s
unjustified refusal, the ER may still be required to pay
the salaries notwithstanding the reversal of the LA’s
decision. HOWEVER, in this case, PAL was not made
to pay since it was still under receivership, thus its
obligation to pay did not attach. In sum, the
obligation to pay employees salaries upon the failure
of the employer to exercise the alternative options
under Art. 223 is not a hard and fast rule, considering
the inherent constraints of corporate rehabilitation.
PAL v. Paz, November 26, 2014
EE conducted a strike to which DOLE issued a return
to work order. The return of the EE was delayed thus
they were barred entry by the company in their
workplace. They sued for illegal dismissal with the LA
which ruled in their favor. The LA ordered
reinstatement and payment of full backwages from
date of strike to actual reinstatement. NLRC however
reversed. Notwithstanding this, EE’s moved for the
issuance of a writ of execution with the LA for the
reinstatement salaries. Issue is whether the EE’s are
entitled to this reinstatement salaries. The Court held
no, due to the corporate rehabilitation that PAL is
undergoing.
The rule is that the EE is entitled to reinstatement
salaries notwithstanding the reversal of the LA
decision granting him said relief. However, as
enunciated in the Garcia v. PAL case, after the LA’s
decision is reversed by a higher tribunal, the EE may
be barred from collecting accrued wages if it is shown
that the delay in enforcing the reinstatement pending
appeal was without fault on the part of the ER. [See
also twofold test in previous case]. A scrutiny of this
case however shows that the delay in reinstating the
EE was not due to PAL’s unjustified refusal to abide by
the reinstatement order and payment of salaries, but
because of the constraints of corporate rehabilitation.
Thus, all claims of payment against PAL are
suspended.
79
Islriz v.Capada, January 31, 2011
EE were illegally dismissed, LA ordered
reinstatement. NLRC set aside LA decision upon
appeal but also ordered reinstatement but without
backwages--this decision became final and executory.
Issue is whether EE may collect their wages during
the period between the LA order of reinstatement
pending appeal and the NLRC resolution overturning
the LA. Court ruled in the affirmative. Even if the
order of reinstatement of the LA is reversed on
appeal, it is obligatory on the part of the ER to
reinstate and pay the wages of the dismissed EE
during the period of appeal until reversal by the
higher court or tribunal. It is also settled that LA’s
order of reinstatement is immediately executory and
the employer has to either re-admit them to work
under same terms and conditions prevailing prior to
their dismissal, or to reinstate them in the payroll.
Failure to exercise either option in the alternative will
esquire the ER to pay the EE’s salaries.
After reversal of LA’s decision, EE is barred from
collecting accrued wages, if it is shown that the delay
in enforcing the reinstatement pending appeal was
without fault on the part of the ER. [See twofold test
in previous case]. 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 LA’s decision. Applying the two-fold
test in the case at bar, ER failed to reinstate or effect
payroll reinstatement of EE until the decision was
overturned--as such there was actual delay of
reinstatement. There was also a finding that the
delay is due to the unjustified act or omission of the
ER. The Garcia v. PAL doctrine cannot apply in the
case at bar, as Islriz here is not undergoing
rehabilitation or any analogous situation which would
justify the non-exercise of the two options
(reinstatement or payroll reinstatement).
Lansangan v. Amkor Technology
Philippines, January 30, 2009
EE’s were terminated for extremely serious offenses
as defined in their code of discipline, prompting the
former to file illegal dismissal complaints. LA
dismissed but ordered reinstatement. NLRC deleted
reinstatement. CA affirmed finding of guilt of EE, but
ordered to pay EE back wages without qualification
and deduction from the date of LA decision up to
NLRC decision. The Court affirms the CA decision in
limiting the payment of backwages up until the NLRC
decision only. Art. 223 and the Roquero case finds no
application in the case at bar, as they both pertain to
a situation where the dismissed or separated
employee is given an interim relief while the case for
illegal dismissal is pending. It does not apply when
there is no finding of illegal dismissal as in the case at
bar. The dismissal in this case was found to be valid
and as such the EE’s are not entitled to full
backwages.
Palteng v. UCPB, February 27, 2009
EE was found to have committed several offenses
under the company’s discipline code. She was made
to explain, and claimed that she made an honest
mistake. She was later dismissed with forfeiture of all
benefits. She then filed a complaint for illegal
dismissal, seeking reinstatement with full backwages,
or in the alternative, payment of separation pay with
full backwages. The Court ruled that she was not
entitled to backwages but only to separation pay.
Court stated that an employee who is illegally
dismissed from work is entitled to reinstatement
without loss of seniority rights as well as full
backwages, inclusive of allowances and to other
benefits or their monetary equivalent computed from
the time compensation was withheld up to actual
reinstatement. HOWEVER, in the event that
reinstatement is no longer possible, EE may be given
separation pay instead. Reinstatement and payment
of backwages are distinct and separate reliefs. The
award of one does not bar the other. Backwages may
be awarded without reinstatement, and
reinstatement may be ordered without awarding
backwages.
Alcantara & Sons v. CA, September 29,
2010
The petitioner company and the Union entered into a
CBA that bound them to hold no strike and no lockout
in the course of its life. There was a deadlock
pertaining to the economic provisions prompting the
union to file a notice of strike. Some union members
filed a claim for illegal dismissal when the company
tried to enjoin them from striking.. Issues are whether
the terminated members are entitled to backwages
on account of company’s refusal to reinstate them
(pending appeal by the parties from LA decision); and
whether the terminated members are entitled to
accrued backwages and separation pay. The Court
held yes to both. In the first issue, Court held that
although the LA failed to act on the terminated
members’ motion for reinstatement pending appeal,
the company had the duty under Art. 223 to
immediately reinstate the affected EE’s. As to the
second, the Court awarded the accrued backwages
and separation pay in furtherance of the laws policy
of compassionate justice and equity--despite the
members being dismissed validly. (In sum, Court is
saying that since their grievance is understandable +
they don’t have any past infractions, the award is
proper)
80
Aboc v. Metrobank, December 13, 2010
EE participated in the lending activity of his boss.
Bank dismissed EE, prompting the latter to file a
complaint for illegal dismissal. LA ruled in EE’s favor--
Bank reinstated him as per LA’s order. NLRC reversed
LA decision, holding that EE was guilt of serious
misconduct and breach of trust and loss of
confidence. NLRC also ordered bank to pay EE
reinstatement wages. Issue is whether CA erred in
affirming NLRC? Court held that CA, NLRC is correct.
There was just causes for EE’s dismissal (serious
misconduct and breach of trust and loss of
confidence). As to the monetary award for
reinstatement, the Court held that it was warranted
as provided under Art. 223 [LA decision being
immediately executory as to reinstatement/payroll
reinstatement] in the case at bar, bank had already
reinstated EE in its payroll. Since bank chose payroll
reinstatement for EE, the Court held that EE then
became a reinstated regular EE. Being a regular EE,
he was restored to his previous position without loss
of seniority rights and other privileges.
Prince Transport v. Garcia, January 12,
2011
ER wanted to block the formation of a Union by the
EE’s so he transferred union members to a sub-
company. Said sub-company deteriorated due to the
fault of the ER. Thus EEs filed a complaint for illegal
dismissal and unfair labor practice. Issue is whether
the order to reinstate EE was valid considering that
the issue of reinstatement was never brought before
the CA, and EE never questioned the award of
separation pay. Court held in the affirmative stating
that the complaints were clear that EEs were seeking
reinstatement. Rule 7, Sec. 2 of ROC provides that a
pleading shall specify the relief sought but may add
other reliefs as may be deemed just and equitable.
Thus, a court can grant the relief warranted by the
allegation and the proof even if it is not specifically
sought.
Robinsons Galleria/Robinsons
Supermarket Corp. v. Ranchez, January
19, 2011
EE was a probationary EE who was accused of
stealing from the supermarket. She then filed a case
for illegal dismissal after being terminated. Issue is
whether she was illegally terminated to which Court
ruled in the affirmative. As a probationary EE, she
enjoys security of tenure and may only be terminated
for a just and authorized cause, while also according
the EE due process. These were not accorded to her,
thus she was illegally dismissed. Under Art. 279 of
the LC, an EE who was unjustly or illegally, or
constructively dismissed is entitled to: (1) either
reinstatement, if viable, or separation pay, if
reinstatement is no longer viable; and (2) backwages.
These two reliefs are separate and distinct from each
other and are awarded conjunctively. However, due to
the strained relations of the parties, the payment of
separation pay was considered proper. Also, being a
probationary EE, she is entitled to separation pay and
back wages. The backwages should be reckoned from
the time of her constructive dismissal until the date
of the termination of employment.
The computation should not cover the entire period
from the time her compensation was withheld up to
the time of her actual reinstatement. This is because
EE was a probationary EE, and the lapse of her
probationary employment without her appointment
as a regular effectively severed the EE-ER
relationship between the parties.
Pfizer v. Velasco, March 9, 2011
EE was handed a suspension due to a series of
violations of company rules. She filed a complaint for
illegal suspension. EE was later terminated from her
employment to which she filed a complaint for illegal
dismissal. LA and NLRC both ordered reinstatement
with backwages. CA reversed but ordered company to
pay wages from the fate of LA decision up to CA
decision. Issue is whether company is required to pay
wages from the said time period. Court held yes,
citing Art. 223 stating that “an EE entitled to
reinstatement shall either be admitted back or payroll
reinstatement. It also entitles the EE to receive his
accrued backwages from the moment of order of
reinstatement up to the date when the same was
reversed by a higher court.
“Reinstatement” is understood to mean restoration to
a state or condition from which one has been
removed or separated. Company in the case at bar
did not reinstate EE nor reinstated her in its payroll,
as ordered by LA. Foreseeably, an ER may circumvent
the immediately enforceable reinstatement order of
the LA by crafting return-to-work directives that are
ambiguous or meant to be rejected by the EE, and
then disclaim liability for backwages due to non-
reinstatement by capitalizing on the EE’s refusal to
work. In sum, the option of the ER to effect actual or
payroll reinstatement must be exercised in GF. In
sum, the Court also reiterated that reinstatement
pending appeal necessitates that it must be
immediately self-executory without need of a writ of
execution.
Luna v. Allado Construction, May 30,
2011
EE filed a complaint for illegal dismissal when he was
not given any work after refusing to accept
81
reassignment. LA dismissed complaint, deemed that
EE resigned but ER still needs to pay money by way
of financial assistance NLRC reversed, ruling that EE
was illegally dismissed and should be paid separation
pay. CA sustained LA ruling. Issue is whether EE was
illegally dismissed to which the Court held no--BUT,
the financial assistance is only proper. As a general
rule, financial assistance is allowed only in instances
where the EE is validly dismissed for causes other
than serious misconduct or those reflecting on his
moral character. Also, the Court has ruled before that
where there is no dismissal to speak of, an award of
financial assistance is not in order. But, as an
exception, financial assistance may be extended as a
measure of social justice and exceptional
circumstances, and as an equitable concession. In the
case at bar, there appears to be no infraction
committed by EE in all his years of service, thus the
financial assistance is only proper.
Villaruel v. Yeo Han Guan, June 1, 2011
EE was not allowed to return to work due to his
illness. According to ER, EE was asked to report for
work but he did not show up. LA ruled in favor of EE
and ordered payment of separation benefits but in
the CA, the latter deleted the award of separation
pay. Issue is whether EE was dismissed and whether
he is entitled to separation pay. Court ruled that EE
was not dismissed but voluntarily resigned. EE was
the one who initiated the severance of his
employment relations when he said in his pleadings
that he never intended to return to work due to his
failing health. “Resignation” is defined as the
voluntary act of an EE who finds himself in a situation
where he believes that personal reasons cannot be
sacrificed in favor of the exigency of the service, and
he has no other choice but to disassociate himself
from his employment.
As to the issue of separation pay, the rule is that an
EE who voluntarily resigns from employment is not
entitled to separation pay, except when it is
stipulated in the employment contract or CBA, or it is
sanctioned by established ER practice or policy. By
way of exception, the Court has allowed grants of
separation pay to stand as a measure of social
justice. There is no provision in the LC which grants
separation pay to voluntarily resigning EEs. Since EE
was not terminated from his work, and is deemed to
have resigned, he is not entitled to separation pay
under the LC. However, the Court granted him
financial assistance for having served ER over 30
years, and having no infractions.
Nacar V. Gallery Frames, August 13,
2013
EE was awarded backwages and separation pay
which became final and executory with the SC. EE
later asked for recomputation as he alleged that his
backwages should be computed from the time of his
illegal dismissal until the finality of the SC decision
(May 2002) with interest. The LA denied the motion
saying that the reckoning point should be from the
time EE was illegally dismissed (January 1997) until
the decision of the LA (October 1998). LA reasoned
that said date should be the reckoning point because
EE did not appeal hence as to EE, the decision
became final and executory. Court held that this as
incorrect--the computation should be from the LA
decision up to the SC decision (May 2002). There are
two parts to a decision when it comes to illegal
dismissal: (1) ruling that EE was illegally dismissed--
which is immediately final even if ER appeals--but will
be reversed if ER wins on appeal; and (2) ruling on
the award of backwages and/or separation pay. For
backwages, it will be computed from the date of
illegal dismissal until the date of the decision of the
LA. But if ER appeals, then the date shall be extended
until the date when the appellate court’s decision
shall become final.
Integrated Microelectronics v. Pionilla,
August 28, 2013
EE was found to have violated company rules by
letting another person use his ID. He admitted to his
violation and was dismissed. He filed a complaint for
illegal dismissed with the LA who ruled in his favor.
NLRC reversed but CA affirmed LA decision. ISSUE
before the SC was whether or not the award of
reinstatement and full backwages to EE is excessive
and unfair. Court ruled in the affirmative. As a general
rule, an illegally dismissed EE is entitled to
reinstatement (or separation pay if reinstatement is
not viable) and payment of full backwages. In certain
cases, however, the Court has carved out an
exception to the foregoing rule and thereby ordered
the reinstatement of the employee without
backwages on account of the following: (a) the fact
that dismissal of the EE would be too harsh of a
penalty and (b) that the ER was in good faith in
terminating the EE. IN THE CASE AT BAR, Court
observed that dismissal was too harsh of a penalty to
be imposed against EE and that ER was in good faith
when it dismissed EE. Since these circumstances
trigger the application of the exception to the rule on
back wages, the Court ruled that backwages must be
deleted, notwithstanding the illegality of his
dismissal.
82
United Tourist Promotion v. Kemplin,
February 5, 2014
Kemplin served as President for petitioner company.
He was terminated by the company for the expiration
of his contract and for his inhuman treatment of his
subordinates. Kemplin filed a case for illegal dismissal
which the LA ruled in his favor. ISSUE before the
Court is whether or not KEMplin was illegally
dismissed and whether he should be reinstated.
COURT HELD that Kemplin was illegally dismissed
because due process was not accorded to him plus
there was no violation that would warrant his
dismissal. As to the reinstatement issue, the COURT
RULED that it is not proper, applying the doctrine of
strained relations. Under the doctrine of strained
relations, payment of separation pay is considered an
acceptable alternative to reinstatement when the
latter option is no longer desirable or viable. Doctrine
of strained relations also applies with EE decides not
to be reinstated and demands separation pay.
International School v. ISAE, February 5,
2014
EE was terminated for allegedly failing to improve on
her performance as an instructor. She alleged that
she was being asked to teach a class that she was
not trained to teach. EE was later dismissed. She then
filed a complaint for illegal dismissal. LA, NLRC, and
CA all declared that EE was illegally dismissed. ISSUE
is whether EE was really illegally dismissed and
whether she is entitled to separation pay. COURT
HELD that she was not illegally dismissed and found
her to be negligent with her duties and guilty of gross
inefficiency(i.e. recurring problems in her lesson plan
that was not resolved). The COURT HELD as to
separation pay that it was proper to grant it to EE in
view of the length of her service with the school and
having no record of infraction.
University of Pangasinan v. Fernandez,
November 12, 2014
EEs filed illegal dismissal case against petitioner
school which they won through an SC decision
(2005). This SC ruling became final and executory
thus they sought for its execution. EEs moved for
recomputation from the date of the LA decision up to
the 2005 SC decision. Petitioner school questioned
amount arrived at by the recomputation. ISSUE is if
the computation of backwages and benefits should
be reckoned from the LA decision up to the 2005 SC
decision. COURT RULED in the affirmative. That the
amount of award increased is a consequence of ERs
continued recourse against the illegal dismissal
decision. Art. 279 provides for the consequences of
illegal dismissal in no uncertain terms, qualified only
by jurisprudence in its interpretation of when
separation pay in lieu of reinstatement is allowed.
When that happens (when separation pay is allowed
in lieu of reinstatement), the finality of the illegal
dismissal decision becomes the reckoning point
instead of the reinstatement that the law decrees. In
allowing separation pay, the final decision effectively
declares that the employment relationship ended so
that separation pay and back wages are to be
computed up to that point.
The recomputation is not violative of the principle of
immutability of a final and executory judgment
because it is a natural consequence of an illegal
dismissal decision. Recomputation of the
consequences of illegal dismissal upon execution of
the decision does not constitute as an alteration or
amendment of the final decision being implemented.
The illegal dismissal ruling stands; only the
computation of monetary consequences of the
dismissal is affected and this is not a violation of the
principle of immutability of final judgments.
Wenphil Corporation v. Abing, April 7,
2014
LA ruled that EEs were illegally dismissed by
petitioner--ordered reinstatement with payment of
back wages from date of termination until date of
actual reinstatement. Parties agreed to payroll
reinstatement while on appeal. NLRC ordered
payment of separation pay instead of reinstatement.
CA reversed NLRC which was affirmed by SC whose
decision became final and executory. EEs filed for
recomputation, alleging that there was a ruling of
illegal dismissal by the LA thus under the law, they
were entitled to backwages from LA decision until the
NLRC reversed. ISSUE before the Court is whether EEs
are entitled to reinstatement and backwages. COURT
HELD in the affirmative--because orders of
reinstatement are immediately executory, the ER has
the obligation to reinstate and pay the wages of the
dismissed EE during the period of appeal until
reversal of higher court. In case of payroll
reinstatement, EE is not obligated to return or
reimburse the salary he received because it will run
counter to the immediate excretory nature of the
order of reinstatement. Court also stated that
reinstatement and backwages can be awarded
simultaneously as reliefs available to an illegally
dismissed employee.
As to the reckoning period, the period for computing
the backwages due to the EEs during period of appeal
should end on the date that a higher court reversed
the labor arbitration ruling of illegal dismissal.
83
PNCC Skyway Corporation v. Secretary
of Labor and Employment, April 19,
2016
PSC was a subsidiary of PNCC to operate the Skyway.
PNCC then entered into a Toll Operation Agreement,
whereby the operation and management of the
Skyway would be transferred from PSC to SOMCO. A
transition period of 5 1/2 months was provided
commencing on the date of signing of the ASTOA
until December 31, 2007, during which period, PSC
continued to operate the Skyway. Accordingly, PSC
issued termination letters to its employees and filed a
notice of closure, stating that it shall cease to operate
and maintain the Skyway, and that the services of the
employees would be consequently terminated
effective January 31, 2008. PSC stated in the notices
of termination to the employees (as well as in the
notice to the DOLE) that the dismissal of the
employees would take effect on January 31, 2008,
when it admitted that it actually ceased to operate
and maintain the Skyway upon its turnover to SOMCO
on December 31, 2007. As such, PSC fixed the
termination date at January 31, 2008 only to make it
appear that it was complying with the one-month
notice requirement. The Court Ruled that the mere
fact that PSC turned over the operation and
management of the Skyway to SOMCO and ceased
business operations on December 31, 2007, should
not be taken to mean that the FSC employees were
ipso facto terminated on the same date. The
employees were notified that despite the cessation of
its operations on December 31, 2007 – which, as a
consequence thereof, would result in the
needlessness of their services – the effective date of
their termination from employment would be on
January 31, 2008. As a rule, notice of the eventual
closure of establishment is a “personal right of the
employee to be personally informed of his [or her]
proposed dismissal as well as the reasons therefor.”
The reason for this requirement is to “give the
employee some time in prepare for the eventual loss
of his [or her] job.”
C.I.C.M. Mission Seminaries v. Perez,
January 18, 2017
This is an offshoot from an illegal dismissal case. The
LA recognized Perez’s right to receive payment of
backwages and separation pay in lieu of
reinstatement. The decision became final and
executory. Then Perez filed for a Writ of Execution. In
10 July 2014, the LA ruled that the cash bond was
insufficient. CICM appealed to the NLRC. In the
meantime, LA issued a writ of execution that would
garnish the amount from CICM’s bank account. CICM
moved for the quashal of such writ, and it was
granted, but the amount still stands. ISSUE: What
should be the legal basis for the computation of the
backwages? The Court ruled that backwages and
separation pay should be computed from the time of
dismissal until the finality of the decision ordering the
separation pay. The rule is, if the LA's decision, which
granted separation pay in lieu of reinstatement, is
appealed by any party, the employer-employee
relationship subsists and until such time when
decision becomes final and executory, the employee
is entitled to all the monetary awards awarded by the
LA.
United Coconut Chemicals, Inc. v.
Almores, July 12, 2017
UCCI hired the respondent as its Senior Utilities
Inspector, and eventually became a member of the
Union until his expulsion. He then filed a complaint
for illegal dismissal in the NLRC. ISSUE: how should
backwages be computed? The determination of the
salary base for the computation of backwages
requires simply an application of judicial precedents
defining the term "backwages." An unqualified award
of backwages means that the employee is paid at the
wage rate at the time of his dismissal. Furthermore,
the award of salary differentials is not allowed, the
established rule being that upon reinstatement,
illegally dismissed employees are to be paid their
backwages without deduction and qualification as to
any wage increases or other benefits that may have
been received by their co-workers who were not
dismissed or did not go on strike. The base figure to
be used in reckoning full backwages is the salary rate
of the employee at the time of his dismissal. The
amount does not include the increases or benefits
granted during the period of his dismissal because
time stood still for him at the precise moment of his
termination, and move forward only upon his
reinstatement. Hence, the respondent should only
receive backwages that included the amounts being
received by him at the time of his illegal dismissal but
not the benefits granted to his co-employees after his
dismissal.
Appeal Bond
McBurnie v. Ganzon, EGI-Managers, Inc.,
October 17, 2013
Sara Lee v. Macatlang, June 4, 2014
Balite v. SS Ventures, February 4, 2015
Dispute Settlement
Article 128, Labor Code. Visitorial and
84
enforcement power. - (a) The Secretary of Labor
and Employment or his duly authorized
representatives, including labor regulation officers,
shall have access to employer's records and
premises at any time of the day or night whenever
work is being undertaken therein, and the right to
copy therefrom, to question any employee and
investigate any fact, condition or matter which may
be necessary to determine violations or which may
aid in the enforcement of this Code and of any
labor law, wage order or rules and regulations
issued pursuant thereto.
(b) Notwithstanding the provisions of Articles 129
and 217 of this Code to the contrary, and in cases
where the relationship of employer-employee still
exists, the Secretary of Labor and Employment or
his duly authorized representatives shall have the
power to issue compliance orders to give effect to
the labor standards provisions of this Code and
other labor legislation based on the findings of
labor employment and enforcement officers or
industrial safety engineers made in the course of
inspection. The Secretary or his duly authorized
representatives shall issue writs of execution to the
appropriate authority for the enforcement of their
orders, except in cases where the employer
contests the findings of the labor employment and
enforcement officer and raises issues supported by
documentary proofs which were not considered in
the course of inspection. (As amended by Republic
Act No. 7730, June 2, 1994).
An order issued by the duly authorized
representative of the Secretary of Labor and
Employment under this Article may be appealed to
the latter. In case said order involves a monetary
award, an appeal by the employer may be
perfected only upon the posting of a cash or surety
bond issued by a reputable bonding company duly
accredited by the Secretary of Labor and
Employment in the amount equivalent to the
monetary award in the order appealed from. (As
amended by Republic Act No. 7730, June 2, 1994).
(c) The Secretary of Labor and Employment may
likewise order stoppage of work or suspension of
operations of any unit or department of an
establishment when non-compliance with the law
or implementing rules and regulations poses grave
and imminent danger to the health and safety of
workers in the workplace. Within twenty-four hours,
a hearing shall be conducted to determine whether
an order for the stoppage of work or suspension of
operations shall be lifted or not. In case the
violation is attributable to the fault of the employer,
he shall pay the employees concerned their
salaries or wages during the period of such
stoppage of work or suspension of operation.
(d) It shall be unlawful for any person or entity to
obstruct, impede, delay or otherwise render
ineffective the orders of the Secretary of Labor and
Employment or his duly authorized representatives
issued pursuant to the authority granted under this
Article, and no inferior court or entity shall issue
temporary or permanent injunction or restraining
order or otherwise assume jurisdiction over any
case involving the enforcement orders issued in
accordance with this Article.
(e) Any government employee found guilty of
violation of, or abuse of authority, under this Article
shall, after appropriate administrative
investigation, be subject to summary dismissal
from the service.
(f) The Secretary of Labor and Employment may, by
appropriate regulations, require employers to keep
and maintain such employment records as may be
necessary in aid of his visitorial and enforcement
powers under this Code.
Article 129, Labor Code. Recovery of wages,
simple money claims and other benefits. - Upon
complaint of any interested party, the Regional
Director of the Department of Labor and
Employment or any of the duly authorized hearing
officers of the Department is empowered, through
summary proceeding and after due notice, to hear
and decide any matter involving the recovery of
wages and other monetary claims and benefits,
including legal interest, owing to an employee or
person employed in domestic or household service
or househelper under this Code, arising from
employer-employee relations: Provided, That such
complaint does not include a claim for
reinstatement: Provided further, That the
aggregate money claims of each employee or
househelper does not exceed Five thousand pesos
(P5,000.00). The Regional Director or hearing
officer shall decide or resolve the complaint within
thirty (30) calendar days from the date of the filing
of the same. Any sum thus recovered on behalf of
any employee or househelper pursuant to this
Article shall be held in a special deposit account by,
and shall be paid on order of, the Secretary of
Labor and Employment or the Regional Director
directly to the employee or househelper concerned.
Any such sum not paid to the employee or
househelper because he cannot be located after
diligent and reasonable effort to locate him within a
period of three (3) years, shall be held as a special
fund of the Department of Labor and Employment
to be used exclusively for the amelioration and
benefit of workers.
Any decision or resolution of the Regional Director
or hearing officer pursuant to this provision may be
appealed on the same grounds provided in Article
223 of this Code, within five (5) calendar days from
receipt of a copy of said decision or resolution, to
the National Labor Relations Commission which
shall resolve the appeal within ten (10) calendar
days from the submission of the last pleading
required or allowed under its rules.
The Secretary of Labor and Employment or his duly
authorized representative may supervise the
85
payment of unpaid wages and other monetary
claims and benefits, including legal interest, found
owing to any employee or househelper under this
Code.
Article 220, Labor Code. National Labor
Relations Commission. - There shall be a National
Labor Relations Commission which shall be
attached to the Department of Labor and
Employment solely for program and policy
coordination only, composed of a Chairman and
twenty-three (23) Members.
Eight (8) members each shall be chosen only from
among the nominees of the workers and employers
organizations, respectively. The Chairman and the
seven (7) remaining members shall come from the
public sector, with the latter to be chosen
preferably from among the incumbent Labor
Arbiters.
Upon assumption into office, the members
nominated by the workers and employers
organizations shall divest themselves of any
affiliation with or interest in the federation or
association to which they belong.
The Commission may sit en banc or in eight (8)
divisions, each composed of three (3) members.
The Commission shall sit en banc only for purposes
of promulgating rules and regulations governing
the hearing and disposition of cases before any of
its divisions and regional branches and formulating
policies affecting its administration and operations.
The Commission shall exercise its adjudicatory and
all other powers, functions, and duties through its
divisions. Of the eight (8) divisions, the first,
second, third, fourth, fifth and sixth divisions shall
handle cases coming from the National Capital
Region and other parts of Luzon; and the seventh
and eighth divisions, cases from the Visayas and
Mindanao, respectively: Provided, That the
Commission sitting en banc may, on temporary or
emergency basis, allow cases within the jurisdiction
of any division to be heard and decided by any
other division whose docket allows the additional
workload and such transfer will not expose litigants
to unnecessary additional expenses. The divisions
of the Commission shall have exclusive appellate
jurisdiction over cases within their respective
territorial jurisdiction.
The concurrence of two (2) Commissioners of a
division shall be necessary for the pronouncement
of a judgment or resolution. Whenever the required
membership in a division is not complete and the
concurrence of two (2) Commissioners to arrive at
a judgment or resolution cannot be obtained, the
Chairman shall designate such number of
additional Commissioners from the other divisions
as may be necessary.
The conclusions of a division on any case
submitted to it for decision shall be reached in
consultation before the case is assigned to a
member for the writing of the opinion. It shall be
mandatory for the division to meet for purposes of
the consultation ordained therein. A certification to
this effect signed by the Presiding Commissioner of
the division shall be issued, and a copy thereof
attached to the record of the case and served upon
the parties.
The Chairman shall be the Presiding Commissioner
of the first division, and the seven (7) other
members from the public sector shall be the
Presiding Commissioners of the second, third,
fourth, fifth, sixth, seventh and eight divisions,
respectively. In case of the effective absence or
incapacity of the Chairman, the Presiding
Commissioner of the second division shall be the
Acting Chairman.
The Chairman, aided by the Executive Clerk of the
Commission, shall have administrative supervision
over the Commission and its regional branches and
all its personnel, including the Labor Arbiters.
The Commission, when sitting en banc, shall be
assisted by the same Executive Clerk, and, when
acting thru its Divisions, by said Executive Clerk for
its first division and seven (7) other Deputy
Executive Clerks for the second, third, fourth fifth,
sixth, seventh and eighth divisions, respectively, in
the performance of such similar or equivalent
functions and duties as are discharged by the Clerk
of Court and Deputy Clerks of Court of the Court of
Appeals.
The Commission and its eight (8) divisions shall be
assisted by the Commission Attorneys in its
appellate and adjudicatory functions whose term
shall be coterminous with the Commissioners with
whom they are assigned. The Commission
Attorneys shall be members of the Philippine Bar
with at least one (1) year experience or exposure in
the field of labor-management relations. They shall
receive annual salaries and shall be entitled to the
same allowances and benefits as those falling
under Salary Grade twenty-six (SG 26). There shall
be as many Commission Attorneys as may be
necessary for the effective and efficient operations
of the Commission but in no case more than three
(3) assigned to the Office of the Chairman and each
Commissioner.
No Labor Arbiter shall be assigned to perform the
functions of the Commission Attorney nor detailed
to the office of any Commissioner. (As amended by
Section 1, Republic Act No. 9347 [July 27, 2006]
and as previously amended by Republic Act No.
7700 and Section 5, Republic Act No. 6715).
Article 221, Labor Code. Headquarters, Branches
and Provincial Extension Units. - The Commission
and its first, second, third, fourth, fifth and sixth
divisions shall have their main offices in
Metropolitan Manila, and the seventh and eighth
divisions in the cities of Cebu and Cagayan de Oro,
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respectively. The Commission shall establish as
many regional branches as there are regional
offices of the Department of Labor and
Employment, sub-regional branches or provincial
extension units. There shall be as many Labor
Arbiters as may be necessary for the effective and
efficient operation of the Commission. (As
amended by Section 2, Republic Act No. 9347 [July
27, 2006] and previously amended by Section 6,
Republic Act No. 6715 [March 21, 1989]).
Article 222, Labor Code. Appointment and
Qualifications. - The Chairman and other
Commissioners shall be members of the Philippine
Bar and must have been engaged in the practice of
law in the Philippines for at least fifteen (15) years,
with at least five (5) years experience or exposure
in the field of labor-management relations, and
shall preferably be residents of the region where
they shall hold office. The Labor Arbiters shall
likewise be members of the Philippine Bar and must
have been engaged in the practice of law in the
Philippines for at least ten (10) years, with at least
five (5) years experience or exposure in the field of
labor-management relations.
The Chairman and the other Commissioners and
the Labor Arbiters shall hold office during good
behavior until they reach the age of sixty-five (65)
years, unless sooner removed for cause as
provided by law or become incapacitated to
discharge the duties of their office; Provided,
however, That the President of the Republic of the
Philippines may extend the services of the
Commissioners and Labor Arbiters up to the
maximum age of seventy (70) years upon the
recommendation of the Commission en banc.
The Chairman, the Division Presiding
Commissioners and other Commissioners shall all
be appointed by the President. Appointment to any
vacancy in a specific division shall come only from
the nominees of the sector which nominated the
predecessor. The Labor Arbiters shall also be
appointed by the President, upon recommendation
of the Commission en banc to a specific arbitration
branch, preferably in the region where they are
residents, and shall be subject to the Civil Service
Law, rules and regulations: Provided, that the Labor
Arbiters who are presently holding office in the
region where they are residents shall be deemed
appointed thereat.
The Chairman and the Commission, shall appoint
the staff and employees of the Commission, and its
regional branches as the needs of the service may
require, subject to the Civil Service Law, rules and
regulations, and upgrade their current salaries,
benefits and other emoluments in accordance with
law. (As amended by Section 3, Republic Act No.
9347 [July 27, 2006] and as previously amended by
Section 7, Republic Act No. 6715 [March 21, 1989]).
Article 223, Labor Code. Salaries, benefits and
other emoluments. – The Chairman and
members of the Commission shall have the same
rank, receive an annual salary equivalent to, and
be entitled to the same allowances, retirement and
benefits as, those of the Presiding Justice and
Associate Justices of the Court of Appeals,
respectively. Labor Arbiters shall have the same
rank, receive an annual salary equivalent to and be
entitled to the same allowances, retirement and
other benefits and privileges as those of the judges
of the regional trial courts. In no case, however,
shall the provision of this Article result in the
diminution of the existing salaries, allowances and
benefits of the aforementioned officials.
Article 224, Labor Code. Article. 217. Jurisdiction
of the Labor Arbiters and the Commission. - (a)
Except as otherwise provided under this Code, the
Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide, within thirty (30)
calendar days after the submission of the case by
the parties for decision without extension, even in
the absence of stenographic notes, the following
cases involving all workers, whether agricultural or
non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for
reinstatement, those cases that workers
may file involving wages, rates of pay,
hours of work and other terms and
conditions of employment;
4. Claims for actual, moral, exemplary and
other forms of damages arising from the
employer-employee relations;
5. Cases arising from any violation of
Article 264 of this Code, including
questions involving the legality of strikes
and lockouts; and
6. Except claims for Employees
Compensation, Social Security, Medicare
and maternity benefits, all other claims
arising from employer-employee relations,
including those of persons in domestic or
household service, involving an amount
exceeding five thousand pesos (P5,000.00)
regardless of whether accompanied with a
claim for reinstatement.
(b) The Commission shall have exclusive appellate
jurisdiction over all cases decided by Labor
Arbiters.
(c) Cases arising from the interpretation or
implementation of collective bargaining
agreements and those arising from the
interpretation or enforcement of company
personnel policies shall be disposed of by the Labor
Arbiter by referring the same to the grievance
machinery and voluntary arbitration as may be
provided in said agreements.
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Article 225, Labor Code. Powers of the
Commission. - The Commission shall have the
power and authority:
(a) To promulgate rules and regulations governing
the hearing and disposition of cases before it and
its regional branches, as well as those pertaining to
its internal functions and such rules and regulations
as may be necessary to carry out the purposes of
this Code; (As amended by Section 10, Republic Act
No. 6715, March 21, 1989).
(b) To administer oaths, summon the parties to a
controversy, issue subpoenas requiring the
attendance and testimony of witnesses or the
production of such books, papers, contracts,
records, statement of accounts, agreements, and
others as may be material to a just determination
of the matter under investigation, and to testify in
any investigation or hearing conducted in
pursuance of this Code;
(c) To conduct investigation for the determination
of a question, matter or controversy within its
jurisdiction, proceed to hear and determine the
disputes in the absence of any party thereto who
has been summoned or served with notice to
appear, conduct its proceedings or any part thereof
in public or in private, adjourn its hearings to any
time and place, refer technical matters or accounts
to an expert and to accept his report as evidence
after hearing of the parties upon due notice, direct
parties to be joined in or excluded from the
proceedings, correct, amend, or waive any error,
defect or irregularity whether in substance or in
form, give all such directions as it may deem
necessary or expedient in the determination of the
dispute before it, and dismiss any matter or refrain
from further hearing or from determining the
dispute or part thereof, where it is trivial or where
further proceedings by the Commission are not
necessary or desirable; and
(d) To hold any person in contempt directly or
indirectly and impose appropriate penalties
therefor in accordance with law.
A person guilty of misbehavior in the presence of or
so near the Chairman or any member of the
Commission or any Labor Arbiter as to obstruct or
interrupt the proceedings before the same,
including disrespect toward said officials, offensive
personalities toward others, or refusal to be sworn,
or to answer as a witness or to subscribe an
affidavit or deposition when lawfully required to do
so, may be summarily adjudged in direct contempt
by said officials and punished by fine not exceeding
five hundred pesos (P500) or imprisonment not
exceeding five (5) days, or both, if it be the
Commission, or a member thereof, or by a fine not
exceeding one hundred pesos (P100) or
imprisonment not exceeding one (1) day, or both, if
it be a Labor Arbiter.
The person adjudged in direct contempt by a Labor
Arbiter may appeal to the Commission and the
execution of the judgment shall be suspended
pending the resolution of the appeal upon the filing
by such person of a bond on condition that he will
abide by and perform the judgment of the
Commission should the appeal be decided against
him. Judgment of the Commission on direct
contempt is immediately executory and
unappealable. Indirect contempt shall be dealt with
by the Commission or Labor Arbiter in the manner
prescribed under Rule 71 of the Revised Rules of
Court; and (As amended by Section 10, Republic
Act No. 6715, March 21, 1989).
(e) To enjoin or restrain any actual or threatened
commission of any or all prohibited or unlawful acts
or to require the performance of a particular act in
any labor dispute which, if not restrained or
performed forthwith, may cause grave or
irreparable damage to any party or render
ineffectual any decision in favor of such party:
Provided, That no temporary or permanent
injunction in any case involving or growing out of a
labor dispute as defined in this Code shall be
issued except after hearing the testimony of
witnesses, with opportunity for cross-examination,
in support of the allegations of a complaint made
under oath, and testimony in opposition thereto, if
offered, and only after a finding of fact by the
Commission, to the effect:
(1) That prohibited or unlawful acts have been
threatened and will be committed and will be
continued unless restrained, but no injunction or
temporary restraining order shall be issued on
account of any threat, prohibited or unlawful act,
except against the person or persons, association
or organization making the threat or committing
the prohibited or unlawful act or actually
authorizing or ratifying the same after actual
knowledge thereof;
(2) That substantial and irreparable injury to
complainant's property will follow;
(3) That as to each item of relief to be granted,
greater injury will be inflicted upon complainant by
the denial of relief than will be inflicted upon
defendants by the granting of relief;
(4) That complainant has no adequate remedy at
law; and
(5) That the public officers charged with the duty to
protect complainant's property are unable or
unwilling to furnish adequate protection.
Such hearing shall be held after due and personal notice
thereof has been served, in such manner as the
Commission shall direct, to all known persons against
whom relief is sought, and also to the Chief Executive and
other public officials of the province or city within which the
unlawful acts have been threatened or committed, charged
with the duty to protect complainant’s property:
Provided, however, that if a complainant shall also allege
that, unless a temporary restraining order shall be issued
without notice, a substantial and irreparable injury to
complainant’s property will be unavoidable, such a
temporary restraining order may be issued upon testimony
under oath, sufficient, if sustained, to justify the
88
Commission in issuing a temporary injunction upon
hearing after notice. Such a temporary restraining order
shall be effective for no longer than twenty (20) days and
shall become void at the expiration of said twenty (20)
days. No such temporary restraining order or temporary
injunction shall be issued except on condition that
complainant shall first file an undertaking with adequate
security in an amount to be fixed by the Commission
sufficient to recompense those enjoined for any loss,
expense or damage caused by the improvident or
erroneous issuance of such order or injunction, including
all reasonable costs, together with a reasonable attorney's
fee, and expense of defense against the order or against
the granting of any injunctive relief sought in the same
proceeding and subsequently denied by the Commission.
The undertaking herein mentioned shall be
understood to constitute an agreement entered
into by the complainant and the surety upon which
an order may be rendered in the same suit or
proceeding against said complainant and surety,
upon a hearing to assess damages, of which
hearing, complainant and surety shall have
reasonable notice, the said complainant and surety
submitting themselves to the jurisdiction of the
Commission for that purpose. But nothing herein
contained shall deprive any party having a claim or
cause of action under or upon such undertaking
from electing to pursue his ordinary remedy by suit
at law or in equity: Provided, further, That the
reception of evidence for the application of a writ of
injunction may be delegated by the Commission to
any of its Labor Arbiters who shall conduct such
hearings in such places as he may determine to be
accessible to the parties and their witnesses and
shall submit thereafter his recommendation to the
Commission.
Article 226, Labor Code. Ocular inspection. - The
Chairman, any Commissioner, Labor Arbiter or their
duly authorized representatives, may, at any time
during working hours, conduct an ocular inspection
on any establishment, building, ship or vessel,
place or premises, including any work, material,
implement, machinery, appliance or any object
therein, and ask any employee, laborer, or any
person, as the case may be, for any information or
data concerning any matter or question relative to
the object of the investigation.
Article 227, Labor Code. Technical rules not
binding and prior resort to amicable settlement. - In
any proceeding before the Commission or any of
the Labor Arbiters, the rules of evidence prevailing
in courts of law or equity shall not be controlling
and it is the spirit and intention of this Code that
the Commission and its members and the Labor
Arbiters shall use every and all reasonable means
to ascertain the facts in each case speedily and
objectively and without regard to technicalities of
law or procedure, all in the interest of due process.
In any proceeding before the Commission or any
Labor Arbiter, the parties may be represented by
legal counsel but it shall be the duty of the
Chairman, any Presiding Commissioner or
Commissioner or any Labor Arbiter to exercise
complete control of the proceedings at all stages.
Any provision of law to the contrary
notwithstanding, the Labor Arbiter shall exert all
efforts towards the amicable settlement of a labor
dispute within his jurisdiction on or before the first
hearing. The same rule shall apply to the
Commission in the exercise of its original
jurisdiction
Article 228, Labor Code. Appearances and Fees.
- (a) Non-lawyers may appear before the
Commission or any Labor Arbiter only:
1. If they represent themselves; or 2. If they
represent their organization or members thereof.
(b) No attorney's fees, negotiation fees or similar charges
of any kind arising from any collective bargaining
agreement shall be imposed on any individual member of
the contracting union: Provided, However, that
attorney’s fees may be charged against union funds in
an amount to be agreed upon by the parties. Any contract,
agreement or arrangement of any sort to the contrary shall
be null and void.
Article 229, Labor Code. Appeal. - Decisions,
awards, or orders of the Labor Arbiter are final and
executory unless appealed to the Commission by
any or both parties within ten (10) calendar days
from receipt of such decisions, awards, or orders.
Such appeal may be entertained only on any of the
following grounds:
(a) If there is prima facie evidence of abuse of
discretion on the part of the Labor Arbiter;
(b) If the decision, order or award was secured
through fraud or coercion, including graft and
corruption;
(c) If made purely on questions of law; and
(d) If serious errors in the findings of facts are
raised which would cause grave or irreparable
damage or injury to the appellant.
In case of a judgment involving a monetary award,
an appeal by the employer may be perfected only
upon the posting of a cash or surety bond issued by
a reputable bonding company duly accredited by
the Commission in the amount equivalent to the
monetary award in the judgment appealed from.
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 a bond by the employer
shall not stay the execution for reinstatement
provided herein.
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To discourage frivolous or dilatory appeals, the
Commission or the Labor Arbiter shall impose
reasonable penalty, including fines or censures,
upon the erring parties.
In all cases, the appellant shall furnish a copy of
the memorandum of appeal to the other party who
shall file an answer not later than ten (10) calendar
days from receipt thereof.
The Commission shall decide all cases within
twenty (20) calendar days from receipt of the
answer of the appellee. The decision of the
Commission shall be final and executory after ten
(10) calendar days from receipt thereof by the
parties.
Any law enforcement agency may be deputized by
the Secretary of Labor and Employment or the
Commission in the enforcement of decisions,
awards or orders.
Article 230, Labor Code. Execution of decisions,
orders or awards. - (a) The Secretary of Labor and
Employment or any Regional Director, the
Commission or any Labor Arbiter, or Med-Arbiter or
Voluntary Arbitrator may, motu proprio or on
motion of any interested party, issue a writ of
execution on a judgment within five (5) years from
the date it becomes final and executory, requiring a
sheriff or a duly deputized officer to execute or
enforce final decisions, orders or awards of the
Secretary of Labor and Employment or regional
director, the Commission, the Labor Arbiter or med-
arbiter, or voluntary arbitrators. In any case, it shall
be the duty of the responsible officer to separately
furnish immediately the counsels of record and the
parties with copies of said decisions, orders or
awards. Failure to comply with the duty prescribed
herein shall subject such responsible officer to
appropriate administrative sanctions.
(b) The Secretary of Labor and Employment, and
the Chairman of the Commission may designate
special sheriffs and take any measure under
existing laws to ensure compliance with their
decisions, orders or awards and those of the Labor
Arbiters and voluntary arbitrators, including the
imposition of administrative fines which shall not
be less than P500.00 nor more than P10,000.00.
Article 231, Labor Code. Contempt powers of the
Secretary of Labor. - In the exercise of his powers
under this Code, the Secretary of Labor may hold
any person in direct or indirect contempt and
impose the appropriate penalties therefor.
Article 232, Labor Code. Bureau of Labor
Relations. - The Bureau of Labor Relations 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 labor cases before it, subject to extension by
agreement of the parties.
Article 273, Labor Code. 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.
Article 274, Labor Code. 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
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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 the
Grievance Machinery or Voluntary Arbitration
provided in the Collective Bargaining Agreement.
Article 275, Labor Code. 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.
Article 276, Labor Code. 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 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.
Article 277, Labor Code. Cost of voluntary
arbitration and Voluntary Arbitrator's fee. - The
parties to a Collective Bargaining Agreement shall
provide therein a proportionate sharing scheme on
the cost of voluntary arbitration including the
Voluntary Arbitrator's 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.
Article 278(g), Labor Code.
(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 intended or impending strike or
lockout as specified in the assumption or
certification order. If one has already taken place at
the time of 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 for 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 workforce 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
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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 immediate 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 of
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.
Article 278(h), Labor Code.
(h) Before or at any stage of the compulsory
arbitration process, the parties may opt to submit
their dispute to voluntary arbitration.
Article 278(i), Labor Code.
(i) The Secretary of Labor and Employment, the
Commission or the voluntary arbitrator shall decide
or resolve the dispute, as the case may be. The
decision of the President, the Secretary of Labor
and Employment, the Commission or the voluntary
arbitrator shall be final and executory ten (10)
calendar days after receipt thereof by the parties.
Article 303, Labor Code. Penalties. - Except as
otherwise provided in this Code, or unless the acts
complained of hinge on a question of interpretation
or implementation of ambiguous provisions of an
existing collective bargaining agreement, any
violation of the provisions of this Code declared to
be unlawful or penal in nature shall be punished
with a fine of not less than One Thousand Pesos
(P1,000.00) nor more than Ten Thousand Pesos
(P10,000.00) or imprisonment of not less than
three months nor more than three years, or both
such fine and imprisonment at the discretion of the
court.
In addition to such penalty, any alien found guilty
shall be summarily deported upon completion of
service of sentence.
Any provision of law to the contrary
notwithstanding, any criminal offense punished in
this Code, shall be under the concurrent jurisdiction
of the Municipal or City Courts and the Courts of
First Instance.
Article 304, Labor Code. Who are liable when
committed by other than natural person. - If the
offense is committed by a corporation, trust, firm,
partnership, association or any other entity, the
penalty shall be imposed upon the guilty officer or
officers of such corporation, trust, firm, partnership,
association or entity.
Article 305, Labor Code. Offenses. - Offenses
penalized under this Code and the rules and
regulations issued pursuant thereto shall prescribe
in three (3) years.
All unfair labor practice arising from Book V shall be
filed with the appropriate agency within one (1)
year from accrual of such unfair labor practice;
otherwise, they shall be forever barred.
Article 306, Labor Code. Money claims. - All
money claims arising from employer-employee
relations accruing during the effectivity of this Code
shall be filed within three (3) years from the time
the cause of action accrued; otherwise they shall
be forever barred.
All money claims accruing prior to the effectivity of
this Code shall be filed with the appropriate entities
established under this Code within one (1) year
from the date of effectivity, and shall be processed
or determined in accordance with the
implementing rules and regulations of the Code;
otherwise, they shall be forever barred.
Workmen's compensation claims accruing prior to
the effectivity of this Code and during the period
from November 1, 1974 up to December 31, 1974,
shall be filed with the appropriate regional offices
of the Department of Labor not later than March
31, 1975; otherwise, they shall forever be barred.
The claims shall be processed and adjudicated in
accordance with the law and rules at the time their
causes of action accrued.
Article 307, Labor Code. Institution of money
claims. - Money claims specified in the immediately
preceding Article shall be filed before the
appropriate entity independently of the criminal
action that may be instituted in the proper courts.
Pending the final determination of the merits of
money claims filed with the appropriate entity, no
civil action arising from the same cause of action
shall be filed with any court. This provision shall not
apply to employees compensation case which shall
be processed and determined strictly in accordance
with the pertinent provisions of this Code.
92
Single Entry Approach
Read Republic Act no. 10396 and DO 151-16
Secretary / Regional Director
People’s Broadcasting v. Secretary, May
8, 2009 and March 6, 2012
May 8, 2009: Respondent filed a complaint against
Bombo Radyo for illegal deduction, non-payment of
service incentive leave, 13th month pay, premium
pay for holiday and rest day and illegal diminution of
benefits, delayed payment of wages and non-
coverage of SSS, PAG-IBIG and Philhealth before the
DOLE. Bombo Radyo denied that there is an
employer-employee relationship with the respondent
since respondent is a drama talent hired on a per
drama "participation basis." DOLE ruled that
respondent is an employee of petitioner Bombo
Radyo and that the former is entitled to his money
claims. Upon appeal to CA, Bombo Radyo reiterated
its claim and added that the case was beyond the
jurisdiction of the DOLE and should have been
considered by the labor arbiter because respondent
Juenzan’s claim exceeded P5,000.00. CA ruled that
the DOLE Secretary had the power to order and
enforce compliance with labor standard laws
irrespective of the amount of individual claims
because the limitation imposed by Article 29 of the
Labor Code had been repealed by RA No. 7730.
ISSUE: Does the NLRC and not the DOLE Secretary,
has jurisdiction over respondent’s claim? HELD:
Clearly the law accords a prerogative to the NLRC
over the claim when the employer-employee
relationship has terminated or such relationship has
not arisen at all. In the second situation especially,
the existence of an employer-employee relationship is
a matter which is not easily determinable from an
ordinary inspection, because the elements of such a
relationship are not verifiable from a mere ocular
examination. The existence of an employer-employee
relationship is a statutory prerequisite to and a
limitation on the power of the Secretary of Labor. The
rationale underlying this limitation is to eliminate the
prospect of competing conclusions of the Secretary of
Labor and the NLRC, on a matter of questions of fact
and law, which is best resolved by the quasi-judicial
body, NRLC, rather than an administrative official of
the executive branch of the government.Therefore,
since evidence offered puts in doubt the existence of
employer-employee relationship, DOLE should have
referred respondent Juezan to the NLRC for the proper
dispensation of his claims.
March 6, 2012: SC said that no limitation in the law
was placed upon the power of the DOLE to determine
the existence of an employer-employee relationship.
No procedure was laid down where the DOLE would
only make a preliminary finding, and that the power
was primarily held by the NLRC. The DOLE, in
determining the existence of an employer-employee
relationship, can use the elements to determine the
existence of an employment relationship.[1] The use
of this test is not solely limited to the NLRC. The DOLE
Secretary, or his or her representatives, can utilize
the same test, even in the course of inspection,
making use of the same evidence that would have
been presented before the NLRC. Also, there is still a
threshold amount set by the Labor Code when money
claims are involved, in that if it is PhP 5,000 and
below, the jurisdiction is with the regional director of
the DOLE, and if the amount involved exceeds PhP
5,000, the jurisdiction is with the labor arbiter.
However, despite the wording of the Code, this would
only apply in the course of regular inspections
undertaken by the DOLE. In conclusion, if a complaint
is brought before the DOLE to give effect to the labor
standards provisions of the Labor Code or other labor
legislation, and there is a finding by the DOLE that
there is an existing employer-employee relationship,
the DOLE exercises jurisdiction to the exclusion of the
NLRC. If the DOLE finds that there is no employer-
employee relationship, the jurisdiction is with the
NLRC. If a complaint is filed with the DOLE, and it is
accompanied by a claim for reinstatement, the
jurisdiction is with the Labor Arbiter, under Article
217(3) of the Labor Code. If a complaint is filed with
the NLRC, and there is still an existing employer-
employee relationship, the jurisdiction is with DOLE.
[1] (1) The selection and engagement of the
employee; (2) the payment of wages; (3) the power
of dismissal; and (4) the employer’s power to control
the employee’s conduct.
Republic of the Philippines v. Namboku
Peak, July 18, 2014
Can the Secretary of Labor file a petition for review
on certiorari against the ruling of the CA, which
reversed it? The Secretary of Labor is a nominal party
because of her decision but she is not the real party
in interest vested with personality to file the present
petitions. A real party-in-interest is the party who
stands to be benefited or injured by the judgment in
the suit, or the party entitled to the avails of the suit.
The real party in interest would have been the unions
to appear and defend the ruling of the Secretary of
Labor. Only real parties-in-interest who participated in
the litigation of the case before the CA can avail of an
appeal by certiorari.
93

South Cotabato Communications
Corporation v. Hon. Sto. Tomas, June 15,
2016
DOLE conducted a Complaint Inspection at the
premises of DXCP Radio Station, owned by petitioner.
The inspection yielded a finding of violations of labor
standards.[1] Consequently, DOLE issued a Notice of
Inspection Result directing the petitioner to effect
restitution and correction of the alleged violations.
However, due to petitioner’s failure to comply, DOLE
scheduled Summary Investigation. However,
petitioner failed to appear despite due notice. Thus,
DOLE Regional Director directed petitioners to pay
private respondents their claim for wage differentials
among other monetary claims. ISSUE: Does the DOLE
have jurisdiction despite not having established yet
EER relationship? HELD: While the existence of an
employer-employee relationship is a statutory
prerequisite to and a limitation on the power of the
Secretary of Labor, one which the legislative branch
is entitled to impose, like the NLRC, the DOLE has the
authority to rule on the existence of an employer-
employee relationship between the parties,
considering that the existence of an employer-
employee relationship is a condition sine qua non for
the exercise of its visitorial power. Nevertheless, it
must be emphasized that without an employer-
employee relationship, or if one has already been
terminated, the Secretary of Labor is without
jurisdiction to determine if violations of labor
standards provision had in fact been committed, and
to direct employers to comply with their alleged
violations of labor standards.
[1] Labor standards violations: Underpayment of
wages and 13th month pay, non-payment of the 5
days SIL, non-payment of Rest Day Premium Pay and
Holiday Premium Pay, non-remittance of SSS
Contributions, and some employees are paid on
commission basis aside from their allowances.
Bureau of Labor Relations
Diokno v. Cacdac, July 4, 2007
In interpreting Article 226[1], BLR has the original and
exclusive jurisdiction on all inter-union and intra-
union conflicts. An intra-union dispute is defined,
under Section z, Rule I of Implementing Rules Book V,
as referring to any conflict between and among union
members, and includes all disputes or grievances
arising from any violation of or disagreement over
any provision of the constitution and by-laws of a
union, including cases arising from chartering or
affiliation of labor organizations or from any violation
of the rights and conditions of union membership
provided for in the Code. The controversy in the case
at bar is an intra-union dispute as it involves a
dispute within FLAMES and the issue is propriety of
disqualification of private respondents Daya et al.
Even as the dispute involves allegations that private
respondents Daya, et al., sought the help of non-
members of the union in their election campaign to
the detriment of FLAMES, the same remains as one
which involves the grievance over the constitution
and bylaws of a union. Thus, petition is within
cognizance of BLR.
[1]ART. 226. BUREAU OF LABOR RELATIONS. The
Bureau of Labor Relations 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
nonagricultural, except those arising from the
implementation or interpretation of collective
bargaining agreements which shall be the subject of
grievance procedure and/or voluntary arbitration.
Labor Arbiter
Jaguar Security v. Sales, April 22, 2008
Can a labor contractor file a reimbursement claim
against its principal before the Labor Arbiter/NLRC?
HELD: The contractor cannot claim reimbursement
from the principal through a cross-claim filed with the
labor court, because the claim is within the realm of
civil law and jurisdiction over the case belongs to the
regular courts. While the resolution of the issue
involves the application of labor laws, reference to
the labor code was only for the determination of the
solidary liability of the petitioner to the respondent
where no employer-employee relation exists. In this
case, there is no employer-employee relationship
between Jaguar and Delta Milling. In its cross-claim,
Jaguar is not seeking any relief under the Labor Code
but merely reimbursement of the monetary benefits
claims awarded and to be paid to the guard
employees. There is no labor dispute involved in the
cross-claim against Delta Milling. Rather, the cross-
claim involves a civil dispute between petitioner and
Delta Milling.
Pioneer Concrete Philippines v. Todaro,
June 8, 2007
As to the question of jurisdiction, this Court has
consistently held that where no employer-employee
relationship exists between the parties and no issue
94
is involved which may be resolved by reference to the
Labor Code, other labor statutes or any collective
bargaining agreement, it is the Regional Trial Court
that has jurisdiction. In the present case, no
employer-employee relationship exists between
petitioners and respondent. In fact, in his complaint,
private respondent is not seeking any relief under the
Labor Code, but seeks payment of damages on
account of petitioners' alleged breach of their
obligation under their agreement to employ him. It is
settled that an action for breach of contractual
obligation is intrinsically a civil dispute. In the
alternative, respondent seeks redress on the basis of
the provisions of Articles 19 and 21 of the Civil Code.
Hence, it is clear that the present action is within the
realm of civil law, and jurisdiction over it belongs to
the regular courts.
Tegimenta Chemical Phils. v. Buensalida,
June 17, 2008
A party having more than one cause of action against
the other party arising out of the same relationship
shall include all of them in one complaint or petition.
As stated earlier, however, the inclusion of
respondents cause of action for constructive illegal
dismissal in the Davao case could not have been
possible since the same arose only after the latter
case was filed. At the time of the filing of the Davao
case, respondent could not have yet claimed that
petitioner committed acts that would amount to
constructive illegal dismissal. Thus, the
aforementioned rule has no application in this case.
Milan v. NLRC, February 4, 2015
The NLRC has jurisdiction to determine, preliminarily,
the parties’ rights over a property, when it is
necessary to determine an issue related to rights or
claims arising from an employer-employee
relationship. Article 217 provides that the Labor
Arbiter, in his or her original jurisdiction, and the
NLRC, in its appellate jurisdiction, may determine
issues involving claims arising from employer-
employee relations. Claims arising from an employer-
employee relationship are not limited to claims by an
employee. Employers may also have claims against
the employee, which arise from the same
relationship. Article 217 of the Labor Code also
applies to employers’ claim for damages, which
arises from or is connected with the labor issue. Thus:
Whereas this Court in a number of occasions had
applied the jurisdictional provisions of Article 217 to
claims for damages filed by employees, we hold that
by the designating clause “arising from the employer-
employee relations” Article 217 should apply with
equal force to the claim of an employer for actual
damages against its dismissed employee, where the
basis for the claim arises from or is necessarily
connected with the fact of termination, and should be
entered as a counterclaim in the illegal dismissal
case. In this case, Petitioners’ claim that they have
the right to the immediate release of their benefits as
employees separated from respondent Solid Mills is a
question arising from the employer-employee
relationship between the parties. Thus, there is
jurisdiction.
Indophil v. Adviento, August 4, 2014
Not all claims involving employees can be resolved
solely by labor courts, specifically when the law
provides otherwise. The Court formulated the
“reasonable causal connection rule”, wherein if there
is a reasonable causal connection between claim
asserted and EE-ER relations, the case is within the
jurisdiction of the labor courts; and in the absence
thereof, its is the regular courts that have jurisdiction.
Indeed, jurisprudence has evolved the rule that
claims for damaged under Art 217(a)(4) LC, to be
cognizable by LA, must have a reasonable causal
connection with any of the claims provided for in the
article. Only of there is such a connection with other
claims can a claim for damages be considered as
arising from EE-ER relationship. In this case, such
connection is nil. Adviento’s claim for damages is
specifically grounded on Indophil’s gross negligence
to provide a safe, healthy and workable environment
for its EEs – a case of quasi-delict – hence, within the
ambit of regular court’s jurisdiction. Adviento alleged
that due to continued and prolonged exposure to
textile dust seriously inimical to his health, he
suffered work-contracted disease which is now
irreversible and incurable, and deprived him of job
opportunities. Clearly, injury and damages were
suffered by Adviento, an element of quasi-delict. It
also bears stressing that the respondent is not
praying for any relief under LC. He neither claims for
reinstatement nor backwages or separation pay
resulting from illegal dismissal. The cause of action
herein pertains to consequence of Indophil’s omission
which led to a work-related disease suffered by
respondent, causing harm or damage to his person.
Such cause of action is within the realm of Civil Law,
and jurisdiction over controversy belongs to regular
courts. Where the resolution of dispute requires
expertise, not in labor management relations nor in
wage structures and other terms and conditions of
employment, but rather in application of general civil
law, such claim falls outside the area of competence
of expertise ordinarily ascribed to LA and NLRC. RTC
has jurisdiction over subject matter of Adviento’s
complaint praying for moral damages, exemplary
damages, compensatory damages, anchored on
Indophil’s alleged gross negligence in failing to
provide a safe and healthy working environment.
95
Am-Phil Food Concepts v. Padilla,
October 1, 2014
From the provisions of the 2002 Rules, it is clear that
a supplemental rejoinder is not a pleading which a
labor arbiter is duty-bound to accept. Even following
changes to the NLRC Rules of Procedure in 2005 and
2011, a rejoinder has not been recognized as a
pleading that labor arbiters must necessarily admit.
The 2005 and 2011 NLRC Rules of Procedure only go
so far as to recognize that a reply “may” be filed by
the parties. Thus, Labor Arbiter Chuanico was under
no obligation to grant Am-Phil’s motion for leave to
admit supplemental rejoinder and, hereby, consider
the supplemental rejoinder’s averments and annexes.
That Am-Phil had to file a motion seeking permission
to file its supplemental rejoinder (i.e., motion for
leave to file) is proof of its own recognition that the
labor arbiter is under no compulsion to accept any
such pleading and that the supplemental rejoinder’s
admission rests on the labor arbiter’s discretion. The
requirements of due process in labor cases before a
Labor Arbiter is satisfied when the parties are given
the opportunity to submit their position papers to
which they are supposed to attach all the supporting
documents or documentary evidence that would
prove their respective claims, in the event that the
Labor Arbiter determines that no formal hearing
would be conducted or that such hearing was not
necessary.
Pentagon Steel Corp. v. CA, June 26,
2009
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.
Supra Multi-Services v. Tambunting,
August 3, 2016
As regards a managerial employee, the mere
existence of a basis for believing that such employee
has breached the trust of his employer would suffice
for his dismissal. Hence, in the case of managerial
employees, proof beyond reasonable doubt is not
required, it being sufficient that there is some basis
for such loss of confidence, such as when the
employer has reasonable ground to believe that the
employee concerned is responsible for the purported
misconduct, and the nature of his participation
therein renders him unworthy of the trust and
confidence demanded by his position.
Malayan Insurance Company v.
Alibudbud, April 20, 2016
Alibudbud was dismissed from Malayan due to
redundancy. Malayan demanded that she surrender
the possession of the car to the company however
she refused. Malayan instituted a Complaint for
replevin and/or sum of money before the RTC and
prayed for the seizure of the car.
Does the RTC have jurisdiction? Yes. A careful study of
the case would reveal that the RTC correctly took
cognizance of the action for replevin contrary to the
pronouncement of the CA. Replevin is an action
whereby the owner or person entitled to repossession
of goods or chattels may recover those goods or
chattels from one who has wrongfully distrained or
taken, or who wrongfully detains such goods or
chattels. It is designed to permit one having right to
possession to recover property in specie from one
who has wrongfully taken or detained the property.
The term may refer either to the action itself, for the
recovery of personalty, or to the provisional remedy
traditionally associated with it, by which possession
of the property may be obtained by the plaintiff and
retained during the pendency of the action. The
present action involves the parties' relationship as
debtor and creditor, not their "employer-employee"
relationship. Malayan's demand for Alibudbud to pay
the 50% company equity over the car or, to surrender
its possession, is civil in nature. The trial court's
ruling also aptly noted the Promissory Note and Deed
of Chattel Mortgage voluntarily signed by Alibudbud
to secure her financial obligation to avail of the car
being offered under Malayan's Car Financing Plan.
Clearly, the issue in the replevin action is separate
and distinct from the illegal dismissal case. Even the
illegal dismissal case she heavily relied upon in
moving for the suspension of the replevin action was
settled in favor of Malayan which was merely found to
have validly exercised its management prerogative in
order to improve its company sales.
Voluntary Arbitration
Negros Metal Corp. v. Lamayo, August
25, 2010
The employee was terminated due to using a
different grinder, which was allegedly prohibited. He
filed for illegal dismissal. The company argued that it
should be dismissed bc the LA did not have
jurisdiction since under their CBA, the matter should
have first been submitted before the company’s
grievance machinery. The particular section being
invoked by the company states that “the parties
96
hereto agree on principle that all disputes between
labor and management may be settled through
friendly negotiations that the parties have the same
interest in the continuity of work until all points in
dispute shall have been discussed and settled”.
Under Art. 217, it is clear that a labor arbiter has
original and exclusive jurisdiction over termination
disputes. On the other hand, under Article 261, a
voluntary arbitrator has original and exclusive
jurisdiction over grievances arising from the
interpretation or enforcement of company policies. As
a general rule then, termination disputes should be
brought before a labor arbiter, except when the
parties, under Art. 262, unmistakably express that
they agree to submit the same to voluntary
arbitration. In the present case, the CBA provision on
grievance machinery being invoked by petitioner
does not expressly state that termination disputes
are included in the ambit of what may be brought
before the company's grievance machinery.
Albert Teng Fish Trading v. Pahagac,
November 17, 2010
As the owner of the business (Albert Teng Fish
Trading), he claims that he customarily enters into
joint venture agreements with master fishermen
(maestros) who are skilled and are experts in deep
sea fishing. The respondents were hired by the
maestros as checkers to determine the volume of the
fish caught. They filed a case for illegal dismissal
claiming that an EE-relationship existed. The VA
declared that there was no EE relationship. Thus, they
filed a MR but this was denied by the VA who argued
that Sec. 6, Rule VII of the 1989 Procedural Guidelines
in the Conduct of Voluntary Arbitration Proceedings
(1989 Procedural Guidelines) does NOT provide the
remedy of a motion for reconsideration to the party
adversely affected by the VAs order or decision.
VA’s decision is subject to a MR. Article 262-A of the
Labor Code does not prohibit the filing of a motion for
reconsideration. Notably, Article 262-A deleted the
word “unappealable” from Article 263. The deliberate
selection of the language in the amendatory act
differing from that of the original act indicates that
the legislature intended a change in the law, and the
court should endeavor to give effect to such intent. In
a number of cases, SC ruled that this change means
that the decision may still be reconsidered by the
Voluntary Arbitrator on the basis of a motion for
reconsideration duly filed during that period. These
rulings fully establish that the absence of a
categorical language in Article 262-A does not
preclude the filing of a motion for reconsideration of
the VAs decision within the 10-day period.
Manila Pavilion v. Delada, January 25,
2012
Delada was originally the Head Waiter of the
Rotisserie, MPH’s fine dining restaurant, but was later
reassigned as Head Waiter of MPH’s other restaurant.
He declined the transfer and asked for a grievance
meeting pursuant to the CBA. MPH told Delada to
report to his new assignment temporarily, without
prejudice to the resolution of the grievance, but he
refused. Thus, MPH initiated administrative
proceedings against him, and later sent him several
memoranda requiring him to explain why he should
not be penalized for serious misconduct, willful
disobedience, gross insubordination, gross and
habitual neglect of duties and willful breach of trust.
While Delada’s complaint concerning the validity of
his transfer was pending before the Panel of
Voluntary Arbitrators (PVA), MPH continued with the
disciplinary action against him for his refusal to report
to his new post.
The voluntary arbitrator had plenary jurisdiction and
authority to interpret the agreement to arbitrate and
to determine the scope of his own authority—subject
only, in a proper case, to the certiorari jurisdiction of
this Court. In Ludo & Luym Corporation v. Saornido,
Court recognized that voluntary arbitrators are
generally expected to decide only those questions
expressly delineated by the submission agreement;
nevertheless, they can assume that they have the
necessary power to make a final settlement on the
related issues, since arbitration is the final resort for
the adjudication of disputes. Pursuant to the
aforecited doctrines, the PVA was authorized to
assume jurisdiction over the related issue of
insubordination and willful disobedience of the
transfer order. Nevertheless, the doctrine is
inapplicable here. The VAs assumed jurisdiction over
the related issues and made rulings on the matter,
while here, PVA did not make a ruling on
insubordination & willful disobedience.
Honda Cars v. Honda Cars Technical
Specialists and Supervisors, November
19, 2014
A CBA was entered. The union members had a
transport allowance of P3,300 a month. The same
parties entered into a MOA whereby the
transportation allowance will be converted to a
gasoline allowance; the amount of unused gasoline
will be converted into cash subject to whatever tax
may be applicable. Being income tax on
compensation, it was subject to withholding tax and
therefore the company deducted this from the union
members’ salaries. The jurisdiction of the Voluntary
Arbitrator is limited to labor disputes which the Labor
97
Code defines as “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.” The
issue on the taxability of the gas allowance and
propriety of the withholding tax are clearly tax
matters and do not in any way involve labor disputes.
PHILEC v. CA, December 10, 2014
Respondents were members of the exclusive
bargaining representative of Philec’s RNF EEs. They
were selected for promotion and were required to
undergo training. EEs were to be given an allowance.
EEs claimed that the training allowance did not
conform to Article X of their CBA. Philec contends that
they applied Modified SGV pay grades to avoid salary
distortion.
The Voluntary Arbitrator did not gravely abuse its
discretion. The Voluntary Arbitrator correctly awarded
training allowances based on the amounts and
formula of the CBA. Moreover, there being no appeal
seasonably filed in this case, Voluntary Arbitrator’s
decision became final and executory after 10
calendar days from PHILEC’s receipt of the resolution
denying its motion for partial reconsideration. Since
the office of a Voluntary Arbitrator or a panel of
Voluntary Arbitrators is considered a quasi-judicial
agency, this court concluded that a decision or award
rendered by a Voluntary Arbitrator is appealable
before the Court of Appeals. Under Section 9 of the
Judiciary Reorganization Act of 1980, the Court of
Appeals has the exclusive original jurisdiction over
decisions or awards of quasi-judicial agencies and
instrumentalities. Article 262-A of the Labor Code
provides that the award or decision of the Voluntary
Arbitrator “shall be final and executory after ten (10)
calendar days from receipt of the copy of the award
or decision by the parties.”
Baronda v. CA, October 14, 2015
Baroda was employed as a truck driver and was
found guilty of negligence and was subsequently
terminated. He filed a case against the VA who then
declared that Baroda was dismissed illegally and
entitled to reinstatement. Baronda filed a motion for
the issuance of the writ of execution and insisting on
being entitled to backwages and other benefits.
HIDECO opposed the motion and stated that the VA
actually ruled Baroda to be liable to pay actual
damages. The first motion was denied on the ground
that the decision did not award any backwages.
Baronda again filed another motion for execution
praying that a writ of execution requiring HIDECO to
pay to him. The second motion was granted. HIDECO
filed a petition for certiorari in the CA which was
granted in its favor.
The proper remedy was to appeal to the CA by
petition for review under Rule 43 of the Rules of Court
whose Section 1 specifically provides: Section 1. 
Scope.—This Rule shall apply to appeals from
judgments or final orders of the, X X X X voluntary
arbitrators authorized by law. On account of Article
262-A of the Labor Code, the period to appeal was
necessarily 10 days from receipt of the copy of the
award or decision of the Voluntary Arbitrator or panel
of Voluntary Arbitrators; otherwise, the order would
become final and immutable, because only a timely
appeal or motion for reconsideration could prevent
the award or decision from attaining finality and
immutability. Also, the Voluntary Arbitrator’s order of
reinstatement of the petitioner was immediately
executory. Although the timely filing of a motion for
reconsideration or of an appeal forestalls the finality
of the decision or award of the Voluntary Arbitrator,
the reinstatement aspect of the Voluntary Arbitrator’s
decision or award remains executory regardless of
the filing of such motion for reconsideration or
appeal.
NLRC; Decision; Finality; Rule
65 Petition
Jordan v. Grandeur Security, June 18,
2014
Jordan filed for illegal dismissal. Company denied the
allegation and claimed that claimed that it reassigned
Jordan from QC to Taguig and the latter abandoned
his work. The LA (May 27, 2008) held that Jordan had
merely been transferred to another workplace. Thus,
the LA ordered Grandeur Security to "reinstate"
Jordan in employment. However, on Dec 2010, the LA
pronounced the proceedings terminated on the
ground Jordan’s waiver of his right to be reinstated
despite receiving a letter from the company. The
NLRC set aside the Dec 2010 order and held that
Jordan is entitled to backwages and separation pay.
The CA nullified the ruling of the NLRC.
The NLRC gravely abused its discretion in
substantively altering the dispositive part of the May
27, 2008 decision. The CA correctly ruled that the
NLRC acted outside of its jurisdiction in replacing the
LA’s return to work order. The NLRC’s judgments
ordering Grandeur Security to pay backwages,
separation pay, and attorney’s fees are unwarranted,
unprecedented, and arbitrary. These, in effect,
vacated the May 27, 2008 decision which already
found the continued existence of Jordan’s
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employment. To the point of being repetitive, we
reiterate that backwages and separation pay are
mere consequences of illegal dismissal.
Sarona v. NLRC, January 18, 2012
Pet., hired as a security guard, was asked to resign by
for applying to another company. During his floating
status, he was assigned twice in two different
companies. However, his assignment was
subsequently cancelled which led to the filing of the
complaint. The LA held that he was illegally
dismissed. NLRC affirmed and res. to the CA and paid
Sarona the award. Upon reaching the SC, the res.
claims that petitioner is barred from questioning the
manner by which his backwages and separation pay
were computed. Pet. countered that despite the
satisfaction of the award, this does not preclude the
SC from modifying the decision when it is tainted with
grave abuse of discretion or issued without
jurisdiction.
The finality of the NLRC’s decision does not preclude
the filing of a petition for certiorari under Rule 65 of
the ROC. That the NLRC issues an entry of judgment
after the lapse of 10 days from the parties’ receipt of
its decision will only give rise to the prevailing party’s
right to move for the execution thereof, but will not
prevent the CA from taking cognizance of a petition
for certiorari on jurisdictional and due process
considerations. Furthermore, if the NLRC’s decision or
resolution was reversed and set aside for being
issued with grave abuse of discretion by way of a
petition for certiorari to the CA or to the Court by way
of an appeal from the decision of the CA, it is
considered void ab initio and, thus, had never
become final and executory.
Metro Transit Organization v. PIGLAS
NFWU-KMU, April 14, 2008
Petitioner entered into an operations agreement with
the LRTA. A CBA was entered by the pet and the
union. Later, Piglas won the CE and negotiated a new
CBA with higher benefits. However, due to a
deadlock, they staged a strike and the SOLE assumed
jurisdiction and rendered a return to work order. The
striking ees refused to heed the order and the LRTA
informed the pet. that the LRTA would take over the
operations which prompted the company to dismiss
the respondents. LA ruled that there was illegal
dismissal and the NLRC dismissed the appeal for
failing to post the required bond. The CA also
dismissed the petition for Certiorari for the failure to
file a MR.
The settled rule is that a motion for reconsideration is
a condition sine qua non for the filing of a petition for
certiorari. Its purpose is to grant an opportunity for
the court to correct any actual or perceived error
attributed to it by the re-examination of the legal and
factual circumstances of the case. The rationale of
the rule rests upon the presumption that the court or
administrative body which issued the assailed order
or resolution may amend the same, if given the
chance to correct its mistake or error. As a rule, the
Court of Appeals, in the exercise of its original
jurisdiction, will not take cognizance of a petition for
certiorari under Rule 65, unless the lower court has
been given the opportunity to correct the error
imputed to it. The Court of Appeals correctly ruled
that petitioners failure to file a motion for
reconsideration against the assailed Resolution of the
NLRC rendered its petition for certiorari before the
appellate court as fatally defective.
PHILTRANCO v. PWU-AGLO, February 26,
2014
Pet. retrenched its employees. The union staged a
strike claiming that the company engaged in unfair
labor practices. The case was thereafter referred to
the DOLE Secretary who ruled in favor of the union.
Pet. filed for a MR while the res. initiated a partial
appeal. The SOLE declined to rule on both prayers
citing a DOLE regulation which provided that
voluntary arbitrators’ decisions, orders, resolutions or
awards shall not be the subject of motions for
reconsideration. Petitioner then filed before the CA an
original Petition for Certiorari (R.65). CA dismissed
and claimed that a petition for review (R.43) is the
proper remedy.
Rule 65 is the proper remedy in assailing the decision
of the Secretary of Labor. It has long been settled that
the remedy of an aggrieved party in a decision or
resolution of the Secretary of Labor is to timely file a
motion for reconsideration as a precondition for any
further or subsequent remedy, and then seasonably
file a special civil action for certiorari under Rule 65 of
the 1997 Rules on Civil Procedure. The only way by
which a labor case may reach the Supreme Court is
through a petition for certiorari under Rule 65 of the
Rules of Court alleging lack or excess of jurisdiction or
grave abuse of discretion. Such petition may be filed
within a reasonable time from receipt of the
resolution denying the motion for reconsideration of
the NLRC decision.
Appeal
Prince Transport v. Garcia, January 12,
2011
The Pres. of the company suspected that a union was
about to be formed and made known to Garcia his
objection. In order to block the formation of a new
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union, the respondent ees were transferred to the
sub-company which was later forced to cease
operations because of the lack of support from the
parent company. Company denied that the
respondents were their ees. The LA ruled in favor of
the company and upon reaching the NLRC, it affirmed
the LA and denied the MR filed by the ees which led
to the filing of a R.65 petition. CA then ruled in favor
of the ees. Pet alleges that the CA should not have
given due course to the petition as they failed to file
an appeal to the NLRC.
The Court held that the proper vehicle for such review
is a special civil action for certiorari under Rule 65 of
the said Rules, and that the case should be filed with
the CA in strict observance of the doctrine of
hierarchy of courts. Moreover, it is already settled
that under Section 9 of Batas Pambansa Blg. 129, as
amended by Republic Act No. 7902, the CA - pursuant
to the exercise of its original jurisdiction over
petitions for certiorari - is specifically given the power
to pass upon the evidence, if and when necessary, to
resolve factual issues. The CA can grant the petition
for certiorari if it finds that the NLRC, in its assailed
decision or resolution, made a factual finding not
supported by substantial evidence. It is within the
jurisdiction of the CA, whose jurisdiction over labor
cases has been expanded to review the findings of
the NLRC.
Unilever v. Rivera, June 3, 2013
Rivera was employed as the manager of sales
activities in her area and was also supervising the
third party service provider for the company’s
activation projects. The internal auditor of the pet.
conducted a random audit and found out that there
were fictitious billings and fabricated receipts from
the third party under the instructions of Rivera. The
company found Rivera guilty of serious breach of the
company’s Code of Business Principles compelling it
to sever their professional relations but was allowed
retirement benefits. LA dismissed the complaint and
the NLRC affirmed but concluded that she is entitled
to separation pay. The CA deleted the award of
retirement benefits. However, due to social justice,
she was awarded separation pay. The pet. now
questions the awarding of affirmative reliefs despite
the failure of Rivera to file a pet for certiorari to
question the NLRC resolutions.
Rivera did not appeal the March 31, 2009 ruling of
the NLRC disallowing the award of separation pay to
her. It was Unilever who elevated the case to the CA.
It is axiomatic that a party who does not appeal, or
file a petition for certiorari, is not entitled to any
affirmative relief. Due process prevents the grant of
additional awards to parties who did not appeal.
Hence, it was erroneous for the CA to grant an
affirmative relief because it was inconsistent with the
doctrine that a party who has not appealed cannot
obtain from the appellate court any affirmative relief
other than the ones granted in the appealed decision.
Appeal Bond
McBurnie v. Ganzon, EGI-Managers, Inc.,
October 17, 2013
LA found that there was illegal dismissal. Company
filed a notice of appeal with a memorandum
containing a motion to reduce bond averring that it
was encountering difficulty in raising the bond and
paying for the partial bond. The NLRC granted the
motion holding that there was substantial
compliance. The CA reversed and claimed that the
failure to post the required bond in an amount
equivalent to the monetary judgment impeded the
perfection of the appeal and rendered the LA decision
final and executory. The bond may be reduced upon
motion by the employer, this is subject to the
conditions: a) the motion to reduce the bond shall be
based on meritorious grounds and b) a reasonable
amount in relation to the monetary award is posted
by the appellant, otherwise the filing of the motion to
reduce bond shall not stop the running of the period
to perfect an appeal. The rule that the filing of a
motion to reduce bond shall not stop the running of
the period to perfect an appeal is not absolute. The
Court may relax the rule under exceptional
circumstances.
If the NLRC does eventually grant the motion for
reduction after the reglementary period has elapsed,
the correct relief would be to reduce the cash or
surety bond already posted by the employer within
the 10-day period. As the Court remains firm on the
importance of appeal bonds in appeals from
monetary awards of LAs, we stress that the NLRC,
pursuant to Section 6, Rule VI of the NLRC Rules of
Procedure, shall only accept motions to reduce bond
that are coupled with the posting of a bond in a
reasonable amount.
Sara Lee v. Macatlang, June 4, 2014 and
January 14, 2015
Aris Phil. permanently ceased operations which led
the ees to file a case for illegal dismissal. The LA
found the dismissal illegal and awarded monetary
benefits amounting to 3B. The corp. filed a notice of
appeal to with a motion to reduce the appeal bond.
They posted a bond of 4.5 M. The NLRC required
them to post an additional 4.5 M. The ees then filed a
petition for review before the CA insisting that the
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appeal was not perfected due to failure of the
Corporations to post the correct amount of the bond.
The fact that the amount of 10% of the award is not a
permissible bond but is only such amount that shall
be deemed reasonable in the meantime that the
appellant’s motion is pending resolution by the
Commission. The actual reasonable amount yet to be
determined is necessarily a bigger amount. In an
effort to strike a balance between the constitutional
obligation of the state to afford protection to labor on
the one hand, and the opportunity afforded to the
employer to appeal on the other, the Court in that
case considered the appeal bond in the amount of
P725M which is equivalent to 25% of the monetary
award sufficient to perfect the appeal. (2014 case
doctrine)
The Corporations should have followed the direction
of the Court and filed the additional amount
requested by the Courts for the perfection of the
appeal so that the NLRC may proceed to try the
merits of the case for illegal dismissal. The 10%
requirement pertains to the reasonable amount which
the NLRC would accept as the minimum of the bond
that should accompany the motion to reduce bond in
order to suspend the period to perfect an appeal
under the NLRC rules. The 10% is based on the
judgment award and should in no case be construed
as the minimum amount of bond to be posted in
order to perfect appeal. Should the NLRC, after
considering the merit of the Motion to Reduce Appeal
Bond, determine that a greater amount or the full
amount of the bond needs to be posted by the
appellant, then the party shall comply accordingly.
(2015 case doctrine)
Balite v. SS Ventures, Feb. 2015
Balite et. al were all dismissed. There was a case for
illegal dismissal. The Labor Arbiter in favored Balite et
al., and charged SS Ventures for illegal dismissal for
failing to comply with the procedural and substantive
requirement in terminating and awarded monetary
awards. The SS Ventures, however, instead of filing
the required appeal bond equivalent to the total
amount of the monetary award which is P490,308.00,
respondents filed a Motion to Reduce the Appeal
Bond to P100,000.00. Upon reaching the CA, there
was a relaxation of the rule on the appeal bound
because even if the amount of the appeal bond
posted was not equivalent to the monetary award,
the respondents were able to sufficiently prove their
incapability to post the required amount of bond.
With the employer’s demonstrated good faith in filing
the motion to reduce the bond on demonstrable
grounds coupled with the posting of the appeal bond
in the requested amount, as well as the filing of the
memorandum of appeal, the right of the employer to
appeal must be upheld. This is in recognition of the
importance of the remedy of appeal, which is an
essential part of our judicial system and the need to
ensure that every party litigant is given the amplest
opportunity for the proper and just disposition of his
cause freed from the constraints of technicalities.
Hacienda Valentin-Balabag v. Secretary,
February 11, 2008
Workers filed with the DOLE Bacolod a request for
payroll inspection of Hacienda Valentin Balabag.
DOLE conducted an inspection and issued a notice of
inspection report, finding Yanson liable and directed
the owner of the Hacienda to pay. Yanson filed with
the Sec. of Labor a verified appeal and posted a
bond.
In case said order by the DOLE involves a monetary
award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued
by a reputable bonding company duly accredited by
the Secretary of Labor in an amount equivalent to the
monetary award in the order appealed from. When
Yanson filed her verified appeal and supplement to
the verified appeal, the Secretary of Labor rejected
the appeal for insufficiency of the appeal bond. The
posting of the proper amount of the appeal bond
under Article 128(b) is mandatory (based on the
usage of “only” in relation to requirements) for the
perfection of an appeal from a monetary award in
labor cases.
Execution; Updating of Award
Nacar v. Gallery Frames, August 13,
2013
Nacar filed a case against the company for being
dismissed without cause. LA found the company
guilty. It then appealed all the way to the SC but the
SC affirmed the ruling of the LA and it became final
on May 27, 2002. After the finality of the SC decision,
Nacar filed a motion before the LA for re-computation
as he alleged that his backwages should be
computed from the time of his illegal dismissal until
the finality of the SC decision with interest. LA denied
the motion claiming that it should be computed from
the time of his illegal dismissal until the decision of
the LA because Nacar did not appeal hence as to him,
that decision became final and executory.
There are two parts of a decision when it comes to
illegal dismissal cases. The second part is the ruling
on the award of backwages and/or separation pay. For
backwages, it will be computed from the date of
illegal dismissal until the date of the decision of the
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Labor Arbiter. But if the employer appeals, then the
end date shall be extended until the day when the
appellate court’s decision shall become final. Hence,
as a consequence, the liability of the employer, if he
loses on appeal, will increase – this is just but a risk
that the employer cannot avoid when it continued to
seek recourse against the Labor Arbiter’s decision.
University of Pangasinan v. Fernandez,
November 12, 2014
The res. filed a case for illegal dismissal. Upon
reaching the SC, it ruled that the res. were indeed
illegally dismissed. The case became final and
executory. Subsequently, the res. filed for the re-
computation of their award to include backwages
from the date of the decision of the LA until the
finality of the decision. The LA denied the claim
stating that the decision rendered by the CA
reinstating the decision of LA Gambito was declared
final and executory by no less than the Supreme
Court of the Philippines by its issuance of a final entry
of Judgment which amounts to the doctrine of
immutability of judgment.
No essential change is made by a re-computation as
this step is a necessary consequence that flows from
the nature of the illegality of dismissal declared in
that decision. A re-computation (or an original
computation, if no previous computation has been
made) is a part of the law—specifically, Article 279 of
the Labor Code and the established jurisprudence on
this provision—that is read into the decision. By the
nature of an illegal dismissal case, the reliefs
continue to add on until full satisfaction, as expressed
under Article 279 of the Labor Code. The re-
computation of the consequences of illegal dismissal
upon execution of the decision does not constitute an
alteration or amendment of the final decision being
implemented. The illegal dismissal ruling stands; only
the computation of monetary consequences of this
dismissal is affected and this is not a violation of the
principle of immutability of final judgments. . Article
279 provides for the consequences of illegal dismissal
in no uncertain terms, qualified only by jurisprudence
in its interpretation of when separation pay in lieu of
reinstatement is allowed. When that happens, the
finality of the illegal dismissal decision becomes the
reckoning point instead of the reinstatement that the
law decrees
Metroguards Security v. Hilongo, March
9, 2015
LA entitled res. to backwages and separation pay for
being illegally dismissed. On appeal, NLRC reversed
the ruling. CA reinstated LA decision. MR denied.
Petitioner no longer appealed to the SC. Res. filed a
motion asking that the CA’s resolution be interpreted
to include the amount of the award as stated in the
LA’s decision and additional award computed until
the date the CA denied petitioner’s motion for
reconsideration which the CA granted. Case was then
remanded to the LA. However, the CA resolution had
confirmed that the amount of P170,520.31 awarded
by the LA is sufficient and that there’s no need to
compute for additional monetary awards.
By the nature of an illegal dismissal case, the reliefs
continue to add up until full satisfaction, as expressed
under Article 279 of the Labor Code. The
recomputation of the consequences of illegal
dismissal upon execution of the decision does not
constitute an alteration or amendment of the final
decision being implemented. The illegal dismissal
ruling stands; only the computation of monetary
consequences of this dismissal is affected, and this is
not a violation of the principle of immutability of final
judgments.
Miscellaneous
Masmud v. NLRC, February 13, 2009
(attorney’s fees)
Masmud filed a complaint against the company for
non-payment of permanent disability benefits,
medical expenses, sickness allowance, moral and
exemplary damages, and attorney’s fees. Masmud
agreed to pay to Att. Go, his counsel, attorney’s fees
on a contingent basis, as follows: 20% of total
monetary claims and 10% in case of appeal. It was
likewise agreed that any award of attorney’s fees
shall pertain to respondent’s law firm as
compensation.
LA rendered a Decision granting the monetary claims.
Masmud paid only the amount equivalent to 20% of
the award as attorney’s fees, thus, leaving a balance
of 10%, plus the award pertaining to the counsel as
attorney’s fees. Masmud manifested that Atty. Go’s
claim for attorney’s fees of 40% of the total monetary
award was null and void based on Article 111 of the
Labor Code which provides 10% of the amount of the
wages recovered.
There are two concepts of Attorney’s Fees. In the
ordinary sense, attorney’s fees represent the
reasonable compensation paid to a lawyer by his
client for the legal services rendered to the latter,
while in extraordinary sense, attorney’s fees may be
awarded by the court as indemnity for damages to be
paid by the losing party to the prevailing party, and
the amount is payable not to the lawyer but to the
client, unless they have agreed that the award shall
pertain to the lawyer as additional compensation or
as part thereof.
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Article 111 of the Labor Code deals with the
extraordinary concept of attorney’s fees—it regulates
the amount recoverable as attorney’s fees in the
nature of damages sustained by and awarded to the
prevailing party and may not be used as the standard
in fixing the amount payable to the lawyer by his
client for the legal services he rendered.
In this case, we apply the ordinary concept of
attorney’s fees, or the compensation that Atty. Go is
entitled to receive for representing Evangelina, in
substitution of her husband, before the labor tribunals
and before the court. Contrary to Masmud’s
proposition, Article 111 of the Labor Code deals with
the extraordinary concept of attorney’s fees. It
regulates the amount recoverable as attorney’s fees
in the nature of damages sustained by and awarded
to the prevailing party. It may not be used as the
standard in fixing the amount payable to the lawyer
by his client for the legal services he rendered.
Arriola v. Pilipino Star Ngayon, August
13, 2014 (prescription)
George Arriola was a column writer for the newspaper
Pilipino Star Ngayon and he filed a case for illegal
dismissal averring that he was arbitrarily dismissed
when his column was removed from publication by
Pilipino Star. The newspaper company claimed that
Arriola abandoned his work because he went to work
for a rival newspaper. Article 291 of the Labor Code
does not cover “money claims” consequent to an
illegal dismissal such as backwages. It also does not
cover claims for damages due to illegal dismissal.
These claims are governed by Article 1146 of the Civil
Code which should be filed in 4 years. Further, in an
illegal dismissal case, the claim for backwages, the
money claim, is just but one of the reliefs that an
employee prays before the arbiter. As such, Arriola’s
claim for backwages is still filed within the
prescriptive period of four years. However, Arriola’s
case must still be dismissed because it was
established that he in fact abandoned his work. The
removal of a certain column does not ipso facto mean
the removal of the columnist.
Montero v. Times Transport, March 16,
2015 (prescription)
Petitioners were dismissed from service on Oct. 26,
1997 and Nove. 24, 1997. Some of the petitioners
filed several complaints on May 14, 1998 but the case
was withdrawn on March 4, 1999. 4 years later,
several complaints for ULP, illegal dismissal were filed
against TTCI on June 2002. In defense, TTCI asserted
that the petitioners’ cause of action had already been
barred by prescription because the complaints were
filed only on June 2002 or after almost five years from
the date of their dismissal. SC held that the
prescriptive period continues even after the
withdrawal of the case as though no action has been
filed at all. Thus, it has prescribed. While the filing of
the said case could have interrupted the running of
the four-year prescriptive period, the voluntary
withdrawal of the petitioners effectively cancelled the
tolling of the prescriptive period within which to file
their illegal dismissal case, leaving them in exactly
the same position as though no labor case had been
filed at all. The running of the four-year prescriptive
period not having been interrupted by the filing of
NLRC RAB-I-01-1007, the petitioners’ cause of action
had already prescribed in four years after their
cessation of employment on Oct. 26, 1997 and Nov.
24, 1997. Consequently, when the petitioners filed
their complaint for illegal dismissal, separation pay,
retirement benefits, and damages in 2002, their
claim, clearly, had already been barred by
prescription
Phil. Carpet Manufacturing Corp. v.
Tagyamon, December 11, 2013
(quitclaim)
PCMC's employees were affected by the company's
retrenchment and voluntary retirement program
which was effected because of less demand in the
market of the products. The respondents received a
memorandum of dismissal stating that they were
going to be retrenched. PCMC contends that
retrenchment was a necessary management
prerogative, but the respondents claim that they were
illegally dismissed and that their signing of a
quitclaim is not a bar to the pursuit of an illegal
dismissal case. As the ground for termination of
employment was illegal, the quitclaims are deemed
illegal as the employees’ consent had been vitiated
by mistake or fraud. The law looks with disfavor upon
quitclaims and releases by employees pressured into
signing by unscrupulous employers minded to evade
legal responsibilities. The circumstances show that
petitioner’s misrepresentation led its employees,
specifically respondents herein, to believe that the
company was suffering losses which necessitated the
implementation of the voluntary retirement and
retrenchment programs, and eventually the execution
of the deeds of release, waiver and quitclaim.
Economic necessity constrained respondents to
accept petitioners’ monetary offer and sign the deeds
of release, waiver and quitclaim. That respondents
are supervisors and not rank-and- file employees
does not make them less susceptible to financial
offers, faced as they were with the prospect of
unemployment. The Court has allowed supervisory
employees to seek payment of benefits and a
manager to sue for illegal dismissal even though, for
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a consideration, they executed deeds of quitclaims
releasing their employers from liability.

Am-Phil Food Concepts v. Padilla,

October 1, 2014 (quitclaim)
Padilla was informed by Am-Phil of a retrenchment
program because of serious adverse business
conditions that would affect him and 2 other
employees. Am-Phil gave him 2 options: be
retrenched with severance pay; or be transferred as a
waiter (a demotion). Am-Phil eventually sent him a
memorandum notifying him of his retrenchment and
was paid separation pay. Padilla also executed a
quitclaim and release in favor of Am-Phil. According
to the SC, Padilla was illegally dismissed despite the
quitclaim. Accordingly, there is no credible
explanation offered as to why the financial
statements were not presented when the evidence in
chief was being considered by the labor arbiter. It
follows that there is no clear and convincing evidence
to sustain the substantive ground on which the
supposed validity of Padilla’s retrenchment rests. As a
rule, deeds of release or quitclaim cannot bar
employees from demanding benefits to which they
are legally entitled or from contesting the legality of
their dismissal.

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