Book Five LABOR RELATIONS Title I POLICY AND DEFINITIONS Chapter | POLICY 1. Itis government policy to promote enlightenment of workers regarding their rights and obligations. Does a similar policy exist for employers? 2. Do employees have the right to participate in formulating a code of conduct which they will be obliged to observe? ART. 218 [211]. DECLARATION OF POLICY. — A. It is the policy of the State: (a) To promote and emphasize the primacy of free collective bargaining and negotiations, including voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes; (b) To promote free trade unionism as an instrument for the enhancement of democracy and the promotion of social justice and development; (c) To foster the free and voluntary organization of a strong and united labor movement; (a) To promote the enlightenment of workers concerning their rights and obligations as union members and as employees; (e) Toprovide an adequate administrative machinery for the expeditious settlement of labor or industrial disputes; (f) To ensure a stable but dynamic and just industrial peace; and (g) Toensure the participation of workers in decision and policy-making processes affecting their rights, duties and welfare. B. To encourage a truly democratic method of regulating the relations between the employers and employees by means of agreements freely entered into through collective bargaining, no court or administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work or other 169Art. 218 LABOR RELATIONS terms and conditions of employment, except as otherwise provided under this Code. NOTES Narre oF Lanor RELATIONS The government labor relations policy, declared in this Art. 218, is a focused elaboration of the basic labor policy announced in Art. 3 which, in turn, echoes constitutional mandates. The policy is intended to install industrial democracy centered on collective bargaining, leading to social justice as the end goal. Labor relations is essentially interparty, which means that, basically, the employer and employees themselves must deal with their problems in a manner that mutually suits them best. This is the reason the policy promotes “free” bargaining and negotiation between employers and employees. The law encourages a democratic and selfdevised method of regulating labor- management relations. Free agreement between the parties is the rule; government intervention, the exception. This basic philosophy is reinforced in the last sentence of this article. ‘The inter-party character of labor relations is likewise the reason the policy prefers voluntary instead of compulsory modes of dispute settlement. ‘The government steps in only when the parties themselves fail to reach an agreement to the prejudice of public interest or when one disregards the defined rights of the other. For instance, when the employer busts the union or commits other form of “unfair labor practice” (ULP) or when the union blockades the company gate — in short, when the legal boundaries are transgressed — the injunctive power of the State may be invoked. ‘The legal parameters serve to balance the rights and obligations of the parties, Unquestionably, legal limitations are needed in the industrial setting. But, in fine, labor relations is human relations. It is not a lawyers’ invention and need not be a lawyers’ game. The prescriptions for industrial peace will “naturally” follow if the parties would only adhere to the civil law precept of human relations — “Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.” (Art. 19, Givil Code.) ‘Worker’s PaRriciration The policy about workers’ participation in policy making was applied by the Supreme Court in ruling that employees or their union should be allowed to participate in the formulation of the code of discipline which the employees will, be told to observe. In a Philippine Airlines case, the NLRC directed the company “to share [with the union] the prerogative to formulate a Code of Discipline.” The company, charging NLRC with grave abuse of discretion, elevated the case to the Supreme Court. The Court turned down the employer's appeal 170POLICY Art. 218 It upheld the union’s objection to the implementation of the code which the management had revised without the union’s participation. (Philippine Airlines, August 13, 1993.) The worker's participatory right is again taken up Art. 266 (former 255). Lanor Epucarion Enlightenment of workers concerning their rights and obligations is a State policy. Conducting labor education is an obligation of labor organizations under Art. 249 (former 241). The policy is laudable and indeed necessary. Upon it depends ultimately the attainment of industrial peace. But employers must likewise be enlightened. This need is acknowledged, rather belatedly and faintly, in Art. 291 (h). NOTES 171Chapter I DEFINITIONS ART. 219 [212]. DEFINITIONS. — (a) “Commission” means the National Labor Relations Commission or any of the divisions, as the case may be, as provided under this Code. (b) “Bureau” means the Bureau of Labor Relations and/or the Labor Relations Divisions in the regional offices established under Presidential Decree No. 1, in the Department of Labor. (c) “Board” means the National Conciliation and Mediation Board established under Executive Order No. 126. (a) “Council” means the Tripartite Voluntary Arbitration Advisory Council established under Executive Order No. 126, as amended. (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. (£) “Employee” includes any person in the employ of an employer. The term shall not be limited to the employees of a particular employer, unless this Code so explicitly states. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment. (g) “Labor organization” means any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment. (h) “Legitimate labor organization” means any labor organization duly registered with the Department of Labor and Employment and includes any branch or local thereof. (i) “Company union” means any labor organization whose formation, function or administration has been assisted by any act defined as unfair labor practice by this Code. (j) _ “Bargaining representative” means a legitimate labor organization or any officer or agent of such organization whether or not employed by the employer. (k) “Unfair labor practice” means any unfair labor practice as expressly defined by this Code. (1) “Labor dispute” includes any controversy or matter concerning terms or conditions of employment or the association or representation of 172DEFINITIONS Art. 219 persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee. (m) “Managerial employee” is one who is vested with 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. (a) “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. (0) “Strike” means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. (p) “Lockout” means the temporary refusal of an employer to furnish work as a result of an industrial or labor dispute. (q) “Internal union dispute” includes all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and byJaws of a union, including any violation of the rights and conditions of union membership provided for in this Code. (rt) “Strike-breaker” means any person who obstructs, impedes, or interferes with by force, violence, coercion, threats or intimidation any peaceful picketing by employees during any labor controversy affecting wages, hours or conditions of work or in the exercise of the right of self-organization or collective bargaining. (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. NOTES: Employer-employee relationship is explained at the beginning of Book Ill of this Code. The principles and rulings cited there are equally applicable to Book V. 173NOTES 174Title 0 NATIONAL LABOR RELATIONS COMMISSION Chapter I CREATION AND COMPOSITION 1. What is the NLRC? What does it do? 2. Whatis the composition of the NLRC? 3. What matters does it decide en banc and what in division level? ART. 220 [213].” 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 bancor 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 ticles 220 (213) through 223 [216] are here worded as amended by R.A. No. 9347] ch lapsed into law on July 27, 2006 and took effect on August 26, 2006, “Section 5 of R.A. No. 9347 reads: “Sec. 5. Implementation — The creation of the additional divisions shall be implemented] for a period of not more than three (3) years.” 175Art. 220 LABOR RELATIONS 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 expense. The divisions of the Commission shall have exclusive appellate jurisdiction over cases within their respective territorial jurisdiction. (As amended by R.A. No. 7700 [May 1, 1994] and R.A. No. 9347, effective August 26, 2006). 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 herein. 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 eighth 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 exclusive 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 terms 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 176CREATION AND COMPOSITION Arts, 221-229 (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 operation 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. ART. 221 [214]. 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, 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 R.A. No. 9347, effective August 26, 2006.) ART. 222 [215]. 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, 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 shali 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 bancto a specific arbitration branch preferably in the region where they are residents, and shall be subject to 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. 177Art. 223 LABOR RELATIONS 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 R.A. No. 9347, effective August 26, 2006.) ART, 223 [216]. SALARIES, BENEFITS, AND 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. (As amended by R.A. No. 9347 effective August 26, 2006. NOTES AmenpMents By R.A. No. 9347 Ashere worded, Articles 220 to 223 reflect the amendments made by R.A. No. 9347 which, in accordance with Article VI of the Constitution, lapsed into law on July 27, 2006 without the signature of the President and took effect on August 26, 2006. The law redundantly emphasizes that the NLRC is attached to the DOLE solely for program and policy coordination only.” It also increases the NLRG sions from five to eight and the commissioners from 15 to 24 (including one chairman). It abolishes the executive labor arbiter post while creating that of commission attorney. Lastly, it makes the rank, salary and benefits of the commissioners the same as those of the Court of Appeals justices, and of the labor arbiters as those of RTG judges. ‘Tue NLRC: Overview The National Labor Relations Commission (NLRC) is the principal government agency that hears and decides labor-management disputes. It is the country's labor court. In deciding cases, the NLRC is independent from DOLE. It is attached to the Department of Labor and Employment only for purposes of policy coordination. Although NLRC functions as a court, the law (Art. 227) wants NLRC to be more expeditious and less tied to technical rules than the regular courts. This has to be so because most labor cases involve poor workers, most of whom perhaps survive on hand-to-mouth wage and can hardly afford lawyers’ services. ‘The NLRC has regional arbitration branches or RABs. The labor arbiters are the NLRC representatives in the country’s various regions. Lawyers by 178CREATION AND COMPOSITION Art. 223 profession, the arbiters arbitrate and decide disputes between the parties. An arbiter’s decision may be brought up or appealed to the NLRG division comprising the arbiter’s region. The grounds for appeal are specified in Art. 229, ‘The NLRC acts as a body, either the whole Commission of 24 com sioners or any of the 8 divisions, each with 3 commissioners. The commission acts as a whole (en banc) in four instances: (1) to promulgate rules and regulations governing the hearing and disposition of cases; (2) to formulate policies affecting its administration and operations; (8) to allow cases within the jurisdiction of any division to be heard and decided by another division; and (4) to recommend appointment of a labor arbiter. Outside of these four instances the acts of the commission are done through its divisions, including adjudication of cases. An individual commis- sioner has no adjudicatory power. He, alone, cannot hear and decide a dispute, although he may concur or dissent when his division decides a case. Each division has exclusive appellate jurisdiction over cases appealed from the labor arbiters within their respective territorial jurisdictions. Divisions one to six handle cases from the National Capital Region and other parts of Luzon, while the seventh and eighth divisions handle those from the Vi and Mindanao, respectively. But the NLRG, i.e, its divisions, also possesses original jurisdiction. This pertains to petitions for injunction (Art. 225) and to certified cases. The latter refers to “national interest” labor disputes certified (or referred) to the Commission for compulsory arbitration under Art. 277(g) of the Labor Code. The certification of the case to the NLRC immediately stops the conduct of a strike or lockout even if there is objection to the certification order of the DOLE secretary. The order, to protect the people’s interest, compels the continuation of business operation. Non-compliance with the certification order is considered. an illegal act. Upon the defiant employer, the NLRC may impose payment of backwages, damages, or other relief. Upon the employees, the NLRC division may impose disciplinary action, including dismissal. Criminal prosecution is a further recourse. More on this under Art. 277. 179NOTES 180Chapter II POWERS AND DUTIES 1. What matters fall within the jurisdiction of a labor arbiter? 2. What are the powers of the NLRC? If some of my employees are on strike and they are blocking my factory gate, can the NLRC be of any help? 3. Do the technicalities of court proceedings apply to cases before the labor arbiters? Can | get a non-lawyer friend to handle my case in the labor arbiter's office? ART. 224 [217]. JURISDICTION OF 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 [now 278] of this Code, including questions involving the legality of strikes and lockouts; 6. — Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer- employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) 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 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 181Art. 224 LABOR RELATIONS referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements. NOTES ComPutsory ARBITRATION In labor cases compulsory arbitration is the process of settlement of labor disputes by a government agency that has the authority to investigate and make an award which is binding on all the parties. Itis the Labor Arbiter who is clothed with the original and exclusive authority to conduct compulsory arbitration under Art. 224, Proceedings after a labor arbiter’s decision is brought up to the National Labor Relations Commission cannot be considered as part of the arbitration proceedings. This is because in the appeal stage, the Commission merely reviews the Labor Arbiter’s decision for errors of fact or law. It does not duplicate the proceedings held at the Labor Arbiter’s level. Thus, the clause “pending final resolution of the case by arbitration” should be understood to be limited only to the proceedings before the Labor Arbiter, so that when the latter rendered his decision, the case could be considered finally resolved by arbitration. (See Philippine Airlines, December 22, 1989.) The Commission itself, through any of its divisions, also conducts compulsory arbitration, but only in “national interest cases” certified or referred to it by the DOLE secretary under Art. 277(g). Apprnionat. Cases To the cases mentioned in this article, the following should be added: (1) Money claims arising out of employer-employee relationship or by virtue of any law or contract, involving Filipino workers for overseas deployment, including claims for actual, moral, exemplary and other forms of damages; (2) Wage distortion disputes in unorganized establishments not voluntarily settled by the parties, pursuant to Art. 124 of the Labor Code; (3) Enforcement of compromise agreements when there is non- compliance by any of the parties, pursuant to Art. 233 of the Labor Code; and (4) Other cases as may be provided by law. Lanor ARBITER’S JURISDICTION This Article enumerates the cases falling under “original and exclusive” jurisdiction of labor arbiters. This gives the impression that none but a labor arbiter can hear and decide the six categories of cases listed. But this is not really so. Any or all of these cases can, by agreement of the parties, be presented to and decided with finality by a voluntary arbitrator or panel of voluntary arbitrators. (See Arts. 273 and 274.) ‘The law prefers or gives primacy to voluntary arbitration (Art. 218) instead of compulsory arbitration. And this, in turn, is the reason the law (Art. 182POWERS AND DUTIES Art. 224 273, last paragraph, and Art, 224[c]) forbids a labor arbiter from entertaining a dispute properly belonging to the jurisdiction of a voluntary arbitrator. ‘The cases a labor arbiter can hear and decide are employment+elated. One unifying element runs through all the cases and disputes enumerated in Art. 224. That element is employment connection. But, additionally, as regards money claims, the law applicable to grant the relief sought should likewise be considered. If the principal relief sought will be resolved by applying the Labor Code or other labor relations statute ora collective bargaining agreement, then the case belongs to the labor arbiter. But if the applicable law is the general civil law, the jurisdiction over the dispute belongs to the regular courts, such as the regional trial court. (See San Miguel Corp., May 31, 1988.) Unfair labor practice (ULP) cases belong to labor arbiters. ULP acts are enumerated in Arts. 258 and 259, and, as to gross violation of CBA, in Art. 273. Article 217 includes “termination disputes” among the cases that only a labor arbiter can decide. But Art. 273 gives original and exclusive jurisdiction to voluntary arbitrators over grievances arising from interpretation or enforcement of company personnel policies. Is there conflict between Art. 224 and Art. 273? No. Not all termination disputes involve enforcement or interpretation of personnel policies. If the employee is CBA-covered and terminated for alleged violation of personnel policy, the dispute should be heard by a VA. If the CBA or personnel policy is not involved, the case should be brought to a labor arbiter. Buteven if the employee is not CBA-covered or even if no personnel policy is involved, the parties may, in categorical and unequivocal language, agree to bring the case to a VA. Article 274 allows this option because, as a rule, voluntary rather than compulsory arbitration is the preferred mode of settling labor disputes. Without such categorical agreement, the dismissal dispute not arising from the CBA or personnel policy, should be lodged with a labor arbiter. (See San Miguel Corp., March 15, 1996.) Even a ULP case can, by agreement of the parties, be brought before a voluntary arbitrator. Conporate Dispute If the controversy concerns the election or appointment of directors, trustees, officers or managers of corporations, partnerships or associations, it is the Securities and Exchange Commission, not the labor arbiters, which has jurisdiction. (Dy, October 27, 1986.) This ruling holds true even though the complainant is claiming for backwages, employment benefits, and damages. (Espino, January 5, 1995.) ‘The SEC jurisdiction over corporate disputes, however, has been transferred to the regular courts by the Securities Regulations Code (R.A. No. 8799), signed into law on July 19, 2000. 183Art. 225 LABOR RELATIONS Award of Damages ‘The legislative intent appears clear to allow recovery of moral and other forms of damages, in all cases arising from employer-employee relations, These include instances where an employee has been unlawfully dismissed. The Labor Arbiter may award to the dismissed employee not only the reliefs provided by the labor laws (Art. 293), but also moral and other forms of damages governed by the Civil Code. Moral damages would be recoverable, for example, where the dismissal of the employee was not only effected without authorized cause or due process but also (1) was attended by bad faith or fraud, (2) constituted an act oppressive to labor, or (3) was done in a manner contrary to morals, good customs or public policy. (See Suario, August 25, 1989.) Also within the labor arbiter’s jurisdiction is an employer's claim for actual damages against an employee. The employer's claim, arising as it does from employeremployee relationship and being necessarily connected with the dispute over the employee's dismissal, should be entered asa counterclaim in the illegal dismissal case. The employer’s claim cannot be filed with a regular court. (Bariez, May 9, 2000.) Issuance of Injunction Questions relating to legality of strikes or lockout or any form of work stoppage, including their incidents under Art, 278, fall within the labor arbiter’s jurisdiction. (Sec. 1, Rule V, NLRC Rules of Procedure, 2011.) But the authority of a labor arbiter to issue injunctions as ancillary remedy has been deleted by the NLRC Rules of Procedure. Overseas Workers As mentioned in Book I, R.A. No. 8042 has transferred from the POEA to the labor arbiters the jurisdiction over claims arising from employer- employee relationship involving Filipino workers overseas. Such claims include termination dispute involving an OFW who worked and was dismissed by the employer abroad. (Phil. National Bank, June 21, 2005.) Venue All cases which Labor Arbiters have authority to hear and decide may be filed in the Regional Arbitration Branch having jurisdiction over the workplace of the complainant/petitioner. However, cases involving overseas Filipino workers shall be filed before the Regional Arbitration Branch where the complainant resides or where the principal office of the respondent(s)/ employer is situated, at the option of the complainant. ART. 225 [218]. POWERS OF THE COMMISSION. — The Commission shall have the power and authority: 184POWERS AND DUTIES. Art. 225 (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; (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 Gode; (©) 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 direction 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 (4) 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 of 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 185Art. 225 LABOR RELATIONS or Labor Arbiter in the manner prescribed under Rule 71 of the Revised Rules of Court; and (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 i 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 unless restrained, or have been 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 complainants property will be unavoidable, such a temporary restraining order may be issued upon testimony under oath, sufficient, if sustained, to justify the Commission it g 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 186POWERS AND DUTIES Art. 226 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. ART. 226 [219]. OCULAR INSPECTION. — The Chairman, any Commissioner, Labor Arbiter or their duly authorized representative, 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. NOTES Powers or THE NLRC ‘The powers of the NLRG, expounded in Arts, 225 and 226 may be summed up into: (1) the power to make rules and regulations pertaining to its functions; (2) the power to administer oaths and issue subpoenas and summons; (3) the power to investigate, hear and decide disputes within its jurisdiction; (4) the power to hold persons in contempt; (5) the power to issue restraining orders and injunctions; (6) the power to conduct ocular inspection; and (7) the power to decide appealed cases. Ruts oF PRocepure ‘The hearing and disposition of cases by the NLRC divisions and the labor arbiters are governed by rules of procedure that the NLRC itself devises and promulgates. The most recent set is the “2011 NLRC Rules of Procedure” which was promulgated on May 31, 2011. Its entire text is appended to the Special Labor Laws, 2012 edition. 187Art. 227 LABOR RELATIONS Suppletory Rules In the absence of specific provisions in the NLRC Rules or in applicable Jaws like the Labor Code and its implementing rules, the provisions of the Rules of Court shall be applied in a suppletory character Under the Rules of Court, for instance, when a party is represented by counsel, notices should be made upon the counsel of record at his given address, to which notices of all kinds emanating from the court should be sent. (UERM Employees, August 31, 1989.) But note Art. 230. It requires that copies of decisions to be executed should be furnished to both the party litigant and the counsel. Injuncrive Power An order or writ of injunction commands a person to do or not to do a particular act. Article 295(e) gives exclusive and original jurisdiction to the NLRC to hear and resolve petitions for injunction. But injunctions or restraining orders are frowned upon as a matter of labor relations policy. (See Art. 265) This policy is the reason Art. 225(e) prescribes strict procedure and requisites that must be satisfied before an injunctive writ may issue. Where the trial court [now NLRC] did not follow and observe the procedure in issuing the injunction, the writ is illegal and void, although the court had jurisdiction to issue it. (See Reyes us. Tan, 52 Off. Gaz. 6187; Allied Free Workers’ Union us. Apostol, 54 Off. Gaz. 981; and Associated Watchmen and Security Union vs. United States Lines, 54 Off. Gaz. 7397.) The issuance of a temporary restraining order ex parte, (ie., no notice to the other party) is not per se prohibited. Its issuance, however, should be characterized by care and caution. The law requires that it be clearly justified by considerations of extreme necessity, i.e, when the commission of unlawful acts is causing substantial and irreparable injury to company properties and the company is, for the moment, bereft of an adequate remedy at law. (Bisig ng Manggagawa sa Concrete Aggregates, September 16, 1993.) ART. 227 [221].! 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 itis 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 “Art, 220 is omitted; repealed by BLP. Blg. 130. 188POWERS AND DUTIES Art. 227 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. NOTES Procepurat. RULES In their exercise of adjudicative functions, ie., in hearing and deciding labor-management disputes, administrative agencies like the National Labor Relations Commission and the Labor Arbiters are not bound by strict rules of evidence and of procedures. When confronted with conflicting versions of factual matters, it is for them in the exercise of discretion to determine which party deserves credence on the basis of evidence received. (Gelmart Industries, November 5, 1987.) But there are cardinal primary rights which must be respected in administrative or quasijudicial proceedings. (Ang Tibay, February 27, 1940.) They are enumerated in the comments under Art. 225. ‘A formal or tria-type hearing is not atall times and in all instances essential to due process. Its requirements are satisfied when parties are afforded fair and reasonable opportunity to explain their sides of the controversy. To expedite dispute resolution, the technical rules of evidence under the Rules of Court do not control in labor cases. Labor cases can be decided on the basis of position papers and other documents submitted by the contending parties. Such a procedure substantially complies with the requirements of due process. (Asia World Publishing House, 152 SCRA 219.) It is well-settled doctrine that if doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. It is a time-honored rule that in controversies between a laborer and his master, doubts reasonably arising from the evidence, or in the interpretation of agreements and writing should be resolved in the favor of the laborer. The policy is to extend the doctrine to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and protection to labor. (Nicario, September 17, 1998.) Disissat. oF ComPLanvT BASED ON PRESCRIPTION When the plaintiff's own allegations in the complaint show clearly that the action has prescribed, ive., the time to file the complaint has lapsed, the court may dismiss the case, on the ground of prescription. Thus, even if the employer's motion to dismiss was filed out of time, the labor arbiter may dismiss 189Art. 227 LABOR RELATIONS the complaint because of prescription. (See Pepsi Cola Botiling Company, April 19, 1989.) The NLRC Rules of 2011 state that on or before the date set for the conciliation/mediation conference, the respondent may file a motion to dismiss based only on any of the following grounds: lack of jurisdiction over the subject matter, improper venue, prescription, and forum shopping. Denial of the motion or deferment of its resolution is not appealable Articles 304, 305 and 306 specify the various periods for filing complaints in labor cases. Anaicasie SETTLEMENT Settlement of disputes through compromise is an accepted, even desirable and encouraged practice in courts of law and administrative tribunals, Through compromise, the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced. ‘The NLRC Rules of Procedure requires the labor arbiter to call and preside over a mandatory conciliation and mediation conference 10 try to amicably settle the case, to define and simplify the issues, or thresh out other preliminary matters. The Rules encourage compromise settlements but they have to be approved by the labor arbiter. If the conciliation conference fails, the labor arbiter may proceed to require the parties to file their position papers, with supporting documents, within ten calendar days. The arbiter has the discretion to determine whether there is need for a hearing or conference before he makes his decision. Attorneys and other representatives of parties have authority to bind their clients in all matters of procedure. But they cannot, without a special power of attorney or express consent, enter into a compromise agreement with the opposing party in full or partial discharge of a client's claim. (Section 7, Rule III of the 2011 NLRC Rules of Procedure; see in the book Special Labor Laws, 2012 edition.) Decision oF Lasor ARBITER The Labor Arbiter shall render his decision within thirty (30) calendar days, without extension, after submission of the case by the parties for decision. However, cases involving Overseas Filipino Workers shall be decided within ninety (90) calendar days after the filing of the complaint. ‘The decision shall state the facts of the case, the issues, the applicable laws or rules, and the conclusions with reasons. If the decision calls for reinstatement of a dismissed employee, the employer must comply and submit a report of compliance within ten days from receipt of the decision, even if he intends to appeal the decision. 190POWERS AND DUTIES Art. 228 ART. 228 [222]. APPEARANCES AND FEES. 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 negotiations or conclusion of the collective 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. (a) NonJawyers may appear NOTES: The obligation to pay the attorney's fees belongs to the union and cannot be shunted to the individual workers as their direct responsibility. (Bank of the Philippine Islands, [and two companion cases] March 31, 1989.) So categorical is this intent that the law also makes it clear that any agreement to the contrary shall be null and void ab initio, (Ibid.) The 10% negotiation fee which covers attorney's fees, agency and the like is based on the amount of backwages receivable under the CBA which is beyond what the law grants. (Cebu Institute of Technology, April 15, 1988.) The union president, a non-lawyer, is not entitled to attorney's fees due a lawyer who negotiated the CBA. An agreement where the union officer shares the lawyer’s fee is immoral and violates Canon 34 of Legal Ethics: “No division of fees for legal services is proper, except with another lawyer based upon a division of service or responsibility.” (Amalgamated Laborers, 22 SCRA 1266 [1968].) ‘NONLAWYER Under the 2011 NLRC Rules, Section 6, Rule III, a nonlawyer may appear before the Commission or Labor Arbiter only if: a, he represents himself as party to the case; b. he represents a legitimate labor organization, which is a party to the case; c. he represents a member or members of a legitimate labor organization existing in the employer's establishment who are parties to the case; d. _heisduly accredited member of any legal aid office duly recognized by the Department of Justice or Integrated Bar of the Philippines. ¢. he is the owner or president of a corporation or establishment which is a party to the case. He needs to present: (1) a certification under oath that he is so authorized, and (2) a copy of the resolution of the board of directors of the corporation granting him such authority. 191NOTES 192NOTES 193Chapter III APPEAL 1. Onwhat grounds may | appeal a labor arbiter's decision? 2. If | still lose in the NLRC itself, can | bring the case to the Supreme Court? or to the Secretary of Labor? ART. 229 [223]. 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 (a) _Ifserious errors in the finding 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. 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 194APPEAL, Art. 229 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. NOTES “Appeal” means the elevation by an aggrieved party of any decision, order or award ofa lower body toa higher body, by means of a pleading which includes the assignment or enumeration of errors, the supporting arguments and the reliefs or assistance prayed for. REQUISITES FOR PERFECTION OF APPEAL If an appeal is not “perfected” it means that it failed to observe some technical/procedural requirements, for which reason it may be dismissed or rejected. The following are the requisites for perfection of appeal from the Labor Arbiter to the NLRG (Division). The appeal should be: 1. filed within the reglementary period; 2. verified by appellant himself in accordance with Sec. 4, Rule 7 of the Rules of Court; 3. _ inthe form ofa memorandum of appeal in three legibly typewritten copies which shall state the grounds relied upon, the supporting arguments, the relief prayed for and the date the appellant received the appealed decision, resolution or order. The appeal memorandum should be accompanied by a certificate of non-forum shopping, proof of service on the other party, proof of payment of the appeal fee, and cash or surety bond. A mere notice of appeal without complying with the other requisites shall not stop the running of the 10-day period for perfecting an appeal. Within 10 days after receiving the appeal memorandum, the appellee may file his answer. Prriops ‘The 10-day period provided in Art. 229 refers to ten (10) calendar days, not working days. This means that Saturdays, Sundays and Legal Holidays are included in counting the 10-day period. Where the 10th day is a Sunday or Legal Holiday, the appeal can be filed on the next business day. (SM Agri and General Machineries, January 9, 1989.) If the tenth day to perfect an appeal from the decision of the Labor Arbiter to the NLRC falls on a Saturday, Sunday or holiday, the appeal shall be made on the next working day. (Aquino, September 3, 1993 and NLRC Rules of 2005.) 195Art. 229 LABOR RELATIONS The payment of the appeal fee is nota mere technicality but isan essential requirement in the perfection of an appeal. However, where the fee had been paid belatedly, the broader interest of justice and the desired objective in deciding the case on the merits demand that the appeal be given due course. (CW. Tan Mfg., February 10, 1989.) Rules of technicality must yield to the broader interests of substantial justice. The dismissal of an appeal on purely technical grounds is frowned upon. (Modern Fishing, May 6, 1988.) PERrection oF APPEAL REQUIRES PostiNG OF BOND ON TIME As tated in this article, the appeal from the Labor Arbiter’s decision is not perfected if cash or surety bond is not posted within the 10-day appeal period. This is clear also in Sections 4 and 6, Rule VI of the 2011 Rules of Procedure of the NLRC and the rule is reiterated by the Supreme Court in Borja Estate vs. Ballad (G.R. No. 152550), decided on June 8, 2005. The Court said: “As there was no appeal bond filed together with the Appeal Memorandum within the 10-day period provided by law for the perfection of appeal, it follows that no appeal from the decision of the Labor Arbiter had been perfected. Accordingly, the Decision of the Labor Arbiter became final and executory upon the expiration of the reglementary period..., It bears stressing that the bond is sine gua non to the perfection of appeal from the labor arbiter’s monetary award.” A motion to reduce the bond may be filed on meritorious grounds, but, meantime, a bond in a reasonable amount in relation to the monetary award should be posted with the appeal, otherwise, the motion does not stop the running of the period to perfect an appeal. (Sec. 6, Rule VI, the 2011 Rules of Procedure of the NLRC) See al Stolt-Nielsen, December 13, 2005. Errect oF ApPeaL From AnsreR TO NLRG Once the appeal is filed, the Labor Arbiter loses jurisdiction over the case — it’s out of his hands. All motions/ pleadings shall thereafter be addressed to and filed with the Commission. (Sec. 9, Rule VI, NLRC Rules of 2011.) The perfection of appeal to the NLRC shall stay (or suspend) the execution of the decision of a Labor Arbiter. However, if the decision includes an order of reinstatement of a dismissed employee, the Labor Arbiter shall immediately issue a partial writ of execution even pending appeal. The writ (order or instruction) shall direct the employer to immediately reinstate the dismissed employee either actually or only in the payroll and to pay the corresponding salaries as a consequence of the reinstatement. Within ten days from receipt of the decision the employer should submit to the arbiter a report of compliance; otherwise, he may be cited for contempt. (See Section 18, Rule Vand Section 9, Rule XI, NLRG Rules, 2011.) 196APPEAL Art. 229 In actual reinstatement the employee goes back to work; in payroll reinstatement he does not work but still gets paid regularly. Issues on ArreaL; RemEpies The Commission shall, in cases of perfected appeals, limit itself to reviewing those issues which are raised on appeal. Those which are not raised shall be final and executory, é,, ready for implementation. The issues raised ‘on appeal, however, shall be open for review, that is, the NLRC is legally authorized to decide or take action on the questions brought up on appeal. (Roche Philippines, October 5, 1989.) Extraordinary Remedies The topics below will continue tracking down the appeal procedure from the Labor Arbiter to the Commission, But at this point we need to take a brief look at a significant new rule introduced in the 2011 NLRC Rules of Procedure. Itis Rule XII, entitled “Extraordinary Remedies,” following the Supreme Court ruling in Triad Security vs. Ortega, G.R. No. 160871, February 6, 2006. New Rule XII allows a party to file with the Commission a petition assailing not just the order of the labor arbiter but his alleged abuse of discretion. In the petition the labor arbiter, in a nominal capacity, will be a co-respondent with the other party litigant. The petition, which should be filed within ten calendar days from receipt of the assailed order or resolution, may be entertained by the Commission if it is based on any of the following grounds: a. If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter. D. If serious errors in the findings of facts are raised which, if not corrected, would cause grave or irreparable damage to the petitioner. c. Ifa party, by fraud, accident, mistake or excusable negligence, has been prevented from taking an appeal. d.— Ifmade purely on a question of law, or fe. If the order or resolution will cause injustice if not rectified. The petition may seek an order to suspend or stop the execution of the labor arbiter’s order or resolution. The Commission may require the petitioner to put upa bond. (The entire 2011 NLRC Rules of Procedure is reproduced in the book Special Labor Laws, 2012 edition.) ConciLiaTion aND MEDIATION Even at the appeal stage of a labor arbiter’s decision, amicable settlement is a preferred mode. The 2011 Rules of Procedure of the NLRC (Rule VII, Section II) states: In the exercise of its exclusive original and appellate jurisdiction, the Commission may exert all efforts towards the amicable settlement of a labor dispute. 197Art. 229 LABOR RELATIONS The settlement of cases on appeal, to be valid and binding between the parties, shall be made before the Commissioner or his authorized representative. NLRC Decision ‘The decision of the Commission shall be final and executory after ten calendar days from receipt by the parties. The losing party, however, is not without recourse. Under the 2011 Rules of the National Labor Relations Commission, a party is allowed to file a motion for reconsideration of any order, resolution or decision of the Commission based on palpable or patent errors, provided that the motion is under oath and filed within ten (10) calendar days from receipt of the order, resolution or decision. (Pure Foods, March 21, 1989.) ‘A party who failed to appeal on time from the decision of Labor Arbiter may still file a motion for reconsideration of the NLRC decision. (Sadol, June 13, 1990.) ‘Aparty may file only one motion for reconsideration (Section 15, Rule VIL of the 2011 NLRC Rules of Procedure). The NLRC Rules do not allow a second motion for reconsideration. If NLRC entertains such a motion, it violates its own rules and therefore commits grave abuse of discretion. (Jardin, February 23, 2000.) PETITION FOR Cerrionar: wir THe Court OF APPEALS If the motion for reconsideration fails and there are merits in pursuing the case, the party may also seasonably avail itself of the special civil action for certiorari under Rule 65 of the Rules of Court. The action is allowed, in general, if the tribunal, board or officer exercising judicial functions has acted without or in excess of its jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction. An extraordinary remedy, a petition for certiorari is available only and restrictively in truly exceptional cases. The sole office of certiorariis the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction. It does not include correction of the NLRC’s evaluation of the evidence or of its factual findings. Such findings are generally accorded not only respect but also finality. (Odango, June 10, 2004.) Where to File Petition; the St. Martin Ruling From the NLRG, the case may go to the Court of Appeals. The Supreme Court has ruled in the St. Martin case that both the Supreme Court and the Court of Appeals have the power to review NLRC decisions. However, the petition for writ of certiorari should initially be filed with the Court of Appeals, in line with the principle of hierarchy of courts. (St. Martin, September 16, 1998.) 198APPEAL Art, 229 Furthermore, in National Federation of Labor (NFL), March 10, 1999, the Supreme Court held that challenges against rulings of the labor secretary and those acting on his behalf, like the director of labor relations, shall be acted upon by the Court of Appeals, which has concurrent jurisdiction with the Supreme Court over petitions for certiorari. Effect on NLRC's Decision A petition for certiorari filed with the Court of Appeals or the Supreme Court shall not stay (or suspend) the execution of the assailed decision of the NLRC unless a restraining order is issued by the Court of Appeals or the Supreme Court. (Sec. 4, Rule XI, NLRC Rules, 2011.) This is in contrast to the case of appeal from the labor arbiter to NLRC where, as we have seen, the appeal suspends the execution of the arbiter’s decision, except the reinstatement of an employee. (Section 9, Rule VI, and Section 3, Rule XI, 2011 NLRC Rules of Procedure.) Certified True Copy of NERC Decision Numerous decisions issued by the Supreme Court emphasize that in appeals under Rule 45 and in special civil actions for certiorari under Rule 65 in relation to Rules 46 and 56, what is required to be certified is the copy of the questioned judgment, final order or resolution. Since the Labor Arbiter's decision is not the questioned ruling, it does not have to be certified. What needs to be certified is the NLRC Decision. (OSM Shipping, March 5, 2003.) Finpines oF Facts, Frat, Quasi-judicial agencies like the National Labor Relations Commission have acquired expertise because their jurisdiction is confined to specific matters, Hence, their findings of facts are generally accorded not only respect but at times even finality if such findings are supported by substantial evidence. (Manila Mandarin, September 21, 1987.) Exceptions However, the Supreme Court has never hesitated to exercise its corrective powers and to reverse administrative decisions in the following cases: (1) the conclusion is a finding grounded on speculations, surmises and conjectures; (2) the inferences made are manifestly mistaken, absurd or impossible; (3) there is a grave abuse of discretion; (4) there is a misapprehension of facts; (5) the court (or quasi-judicial body] in arriving at its findings went beyond the issues of the case and the same are contrary to the admissions of the parties or the evidence presented; (6) where respondent commission has sustained irregular procedures and through the invocation of summary methods, including rules ‘on appeal, has affirmed an order which tolerates a violation of due process; 199Art. 230 LABOR RELATIONS and (7) where the rights of a party were prejudiced because the administrative findings, conclusions or decisions were in violation of constitutional provisions, in excess of statutory authority, or jurisdiction, made upon irregular procedure, vitiated by fraud, imposition or mistake, not supported by substantial evidence adduced at the hearing or contained in the records or disclosed to the parties, or arbitrary, or capricious. (Industrial Timber January 20, 1989,) Regarding compromise agreements and quitclaims the provisions of and the notes to Art. 233 are pertinent. ART. 230 [224]. 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 Labor Arbiters and voluntary arbitrators, including the imposition of administrative fines which shall not be less than P500.00 nor more than 10,000.00. NOTES Execunion A decision or order of the NLRC or a labor arbiter that finally disposes of a case is enforced by an order (or writ) of execution. A copy of such decision or order should have been furnished to the parties and their counsels or authorized representatives. At this stage the period for appeal has passed and no appeal had been properly filed, or the appeal itself had been decided and the decision has become “final and executory.” A writ of execution is issued upon motion of the winning party or upon the initiative of the labor arbiter or the NLR division that issued the decision or order. From the date the decision or order became final and executory, the winning party has five years within which to file a motion for execution. If not executed within that period, the judgment will become dormant and may only be enforced through an independent action within ten years from finality of the decision. 200APPEAL, Art. 230 If the decision or order has been properly appealed, it is not final and cannot be executed, But an order to reinstate an illegally dismissed employee, even if appealed, is immediately executory, as explained under Art. 229. Injunction Acainst NLRC From 4 ReGutar Court Precedents (or previous court decisions) abound confirming the rule that regular courts (eg, regional trial courts) have no jurisdiction to act on labor cases or their incidents including the execution of decisions, awards or order. Jurisdiction to try and decide such cases pertains exclusively to the proper labor official under the Department of Labor and Employment. To hold otherwise is to sanction split jurisdiction which is obnoxious to the orderly administration of justice. (Deltaventures Resources, March 9, 2000.) [However,] the general rule that no court has the power to interfere by injunction with the judgments or decrees of another court with concurrent or coordinate jurisdiction possessing equal power to grant injunctive relief, applies only when no third-party claimant is involved. (Traders Royal Bank vs. Intermediate Appellate Court, 133 SCRA 141 [1984].) When a third-party, ora stranger to the action, asserts a claim over the property levied upon, the claimant may vindicate his claim by an independent action in the proper civil court which may stop the execution of the judgment ‘on property not belonging to the judgment debtor. (Yupangeo Cotton Mills, fanuary 16, 2002.) A separate civil action for recovery of ownership of the property would not constitute interference with the powers or processes of the Arbiter and the NLRC which rendered the judgment to enforce and execute upon the levied properties. The property levied upon being that of a stranger is not subject to levy. Thus, a separate action for recovery, upon a claim and prima facie showing of ownership by the petitioner, cannot be considered as interference. ({bid.) In other words, an action for recovery of property is an exception to the rule that the execution of an NLRC order or decision cannot be stopped by a regular court. Third Party Claim Under the NLRC Rules of 2011 Under Rule XI of the NLRC Rules of 2011, a third party claim should be filed within five days from the last day of posting or publication of the notice of execution sale; otherwise, the claim is forever barred. The third party claimant has to file with the commission or labor arbiter an affidavit stating his title to the property or right to possess it with supporting evidence. Receipt of such claim automatically suspends the execution over the property. The third party claimant may be required to post a bond equal to the amount of his claim; the party seeking the execution may file a counter-bond. The labor arbiter shall resolve the third party claim within ten working days following the submission of the claim for resolution, 201Art. 231 LABOR RELATIONS ART. 231 [225]. 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. 202Title I BUREAU OF LABOR RELATIONS 1. What cases may be brought to the Bureau of Labor Relations? May a labor case be settled through compromise between the parties? Are there formalities to observe to make the compromise valid? 3. May the parties validly agree on a wage lower than the legal minimum? ART, 232 [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 itiative 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. ‘The Bureau shall have fifteen (15) working days to act on labor cases before it, subject to extension by agreement of the parties. NOTES A “Med-Arbiter” (short for mediator-arbitrator) refers to an officer in the DOLE Regional Office or in the Bureau of Labor Relations authorized to hear and decide representation cases, inter/intra-union disputes and related labor relations disputes, except cancellation of union registration cases. Representation cases refer to the proceedings intended to determine which one, among rival unions, should be officially designated or certified as the exclusive representative of the employees in bargaining collectively with their employer. “Inter-Union Dispute” refers to any conflict between and among legitimate labor unions involving representation questions for purposes of collective bargaining or to any dispute between legitimate labor unions. “Intra-Union Dispute” refers to any conflict between and among members of a union, It may involve grievances arising from any violation of the rights and conditions of membership, violation of or disagreement over any provision own ii 203Art. 233 LABOR RELATIONS of the union’s constitution and by-laws, or disputes arising from chartering or affiliation of union. If the dispute is between unions, it is inter-union; “intra” if confined to a union. Under D.O. No. 40-03 (issued in March 2003 to replace D.O. No. 9 of 1997) the long list of inter/intra-union disputes include cancellation of union registration, audit of union funds, violation of union members’ rights and oth- er disputes between unions or between a union and its members. A complaint involving intra/inter-union dispute may be filed by a legitimate labor organiza- tion (LLO) or its members. Where the issue, however, involves the entire mem- bership, the complaint shall be supported by at least 30% of the membership. But D.O. No. 40-03 in the same Rule XI recognizes a second category called “other related labor relations disputes.” These include any conflict between a labor union and the employer or any individual, entity or group that is not a labor organization or workers’ association; such dispute include cancellation of registration of a labor organization and interpleader. This writer believes that the “related labor relations dispute” cannot mean any conflict between a labor union and employer. It has to be related to inter-or intra-union disputes; otherwise, BLR will be invading the jurisdictional domains of the labor arbiter/NLRC, the DOLE regional director, the NCMB, or of a voluntary arbitrator. In inter/intra-union dispute the complaint may be filed by a union or union members; in a “related labor relations dispute” the complaint may be filed by a party-in-interest who is not necessarily a union or union member. Whether the dispute is of the first or the second category, the complaint, if it involves an independent union, a chartered local, or a workers’ association, shall be filed with the DOLE Regional Office where the labor organization is registered. But if the complaint involves a federation or an industry/national union, it shall be filed with the BLR itself. Appeal ‘The decision of the Med-Arbiter and Regional Director under this article may be appealed to the Bureau by any of the parties within ten (10) days from receipt thereof, copy furnished the opposing party. The decision of the Bureau Director in the exercise of his original jurisdiction may be appealed to the Office of the Secretary by any party within the same period, with notice to the opposing party. ART. 233 [227]. COMPROMISE AGREEMENTS. — Any compromise settlement, including those involving labor standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the regional office of the Department of Labor, shall be final and binding upon the parties. The National Labor Relations Commission or any court shall not assume jurisdiction 204BUREAU OF LABOR RELATIONS, Art. 233 over issues involved therein except in case of noncompliance thereof or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion. NOTES Compromise; RELease aND QUITCLAIM A compromise is a contract where the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced. (Art. 2028, Civil Code.) Dispute resolution through compromise is a pervading philosophy of Philippine labor laws. This is emphasized in Art. 238 and it conforms with the statement of basic policy in Art. 218(a) and the second paragraph of Art. 227. Compromise agreements involving labor standards cases must be reduced to writing and signed in the presence of the Regional Director or his duly authorized representative. (Atilano us. Dela Cruz, G.R. No. 82488, February 28, 1990.) The law looks with disfavor upon quitclaims and releases by employees who are inveigled or pressured into signing them by unscrupulous employers seeking to evade their legal responsibilities. On the other hand, there are legitimate waivers that represent a voluntary settlement of a laborer’s claims that should be respected by the courts as the law between the parti In Periquet vs. NLRC (186 SCRA 724 [1990]), the Cour declares: Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of mind. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to annul the questionable transaction. But where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration for quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking. A judgment rendered in accordance with a compromise agreement is not appealable and is immediately executory, unless a motion is filed to Set aside the agreement on the ground of fraud, mistake, or duress, in which case an appeal may be taken against the order denying the motion. (Master Tours, 219 SCRA 321; United Housing Corp., 181 SCRA 285.) “Dire necessity” is not an acceptable ground for annulling the releases, especially if it is not shown that the employees had been forced to execute them, or that the considerations for the quitclaims were unconscionably low and that the employees had been tricked into accepting them. (See Veloso, August 5, 1991.) 205Arts. 234-236 LABOR RELATIONS Summing up, a compromise agreement may be valid and binding only if the agreement is voluntarily entered into and represents a reasonable settle- ment of the claims. It may be invalidated if the amount purportedly received by the complainant is unreasonably lower than what is legally due. Furthermore, the “compromise settlement” should be executed with the assistance of the Bureau of Labor Relations or the Regional Office of the DOLE pursuant to Art. 233 of the Labor Code. The law believes the worker is protected if DOLE representative assists him. A compromise agreement by union officers must be authorized by the union members. The authority must be produced in evidence. Each laborer must authorize the union officers to enter into a compromise before the laborer’s right may be affected. (Kaisahan ng mga Manggagawa sa La Campana, 133 SCRA 220 [1984].) See further discussion under Art. 250. ART. 228. (Repealed by Batas Pambansa Big. 130) INDORSEMENT OF CASES TO LABOR ARBITERS. ART. 234 [229]. ISSUANCE OF SUBPOENAS. — The Bureau shall have the power to require the appearance of any person or the production of any paper, document or matter relevant to a labor dispute under its jurisdiction either at the request of any interested party or at its own initiative. ART. 235 [230]. APPOINTMENT OF BUREAU PERSONNEL. — The Secretary of Labor and Employment may appoint, in addition to the present personnel of the Bureau and the Industrial Relations Divisions, such number of examiners and other assistants as may be necessary to carry out the purposes of this Code. ART. 236 [231]. REGISTRY OF UNIONS AND FILE OF COLLECTIVE 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 shalll be disclosed unless authorized by the Secretary, or when it is at issue in any judicial litigation or when public interest or national security so requires. Within thirty (30) days from the execution of a Collective Bargaining Agreement, the parties shall 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 206BUREAU OF LABOR RELATIONS Arts. 237-238 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 (1,000.00) 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. ART. 237 [232]. PROHIBITION ON CERTIFICATION ELECTION. — The Bureau shall not entertain any petition for certification election or any other action which may disturb the administration of duly registered existing collective bargaining agreements affecting the parties except under Articles 253, 253-4 and 256 of this Code. NOTES Article 287 speaks of the “contract-bar rule” which means 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. The existence of the CBA does not allow, that is, it bars, the holding of the inter-union electoral contest. The election is legally allowed, says Art. 267, only during the “freedom period” which refers to the last 60 days of the fifth year of a CBA. (See Arts. 264 and 267.) The objective of the rule, obviously, is to minimize union “politicking” until the proper time comes. Contract bar is further explained under Arts. 267 and 268. ART. 238 [233]. PRIVILEGED COMMUNICATION. — Information and statements made at conciliation proceedings shall be treated as privileged communication and shall not be used as evidence in the Commission. Conciliators and similar officials shall not testify in any court or body regarding any matters taken up at conciliation proceedings conducted by them. NOTES “Privileged communication” is any statement of such privacy that the law exempts the person receiving the information from the duty to disclose it. Like the communication from client to attorney or from penitent to priest, information or statements made in conciliation or mediation meetings are treated, according to this Article, as privileged communication. They cannot be revealed nor used as evidence. 207208 NOTESNOTES 209Title IV LABOR ORGANIZATIONS Chapter | REGISTRATION AND CANCELLATION 1. How do | organize my fellow workers into a union? 2. _ If the business firm where we are working is new and small — less than one year old and with less than 50 employees — can we unionize? 3. May the registration of a union be cancelled? Who may initiate such action and on what grounds? ART. 239 [234]. REQUIREMENTS OF REGISTRATION. — A federation, national union or industry or trade union center or an independent union shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration based on the following requirements: (a) Fifty pesos (P50.00) registration fee; (b) The names of its officers, their addresses, the principal address of the labor organization, the minutes of the organizational meetings and the list of the workers who participated in such meetings; (©) Incase the applicant is an independent union, the names of all its members comprising at least twenty percent (20%) of all the employees in the bargaining unit where it seeks to operate; () If the applicant union has been in existence for one or more years, copies of its annual financial reports; and (e) Four copies of the constitution and by-laws of the applicant union, minutes of its adoption or ratification, and the list of the members who participated in it. NOTES As here worded, the Article incorporates the amendments made by RA. No. 9481 (“An Act Strengthening the Workers’ Constitutional Right to Self-organization”) which lapsed into law on May 25, 2007, without the President's signature. Published on May 30, 2007, it took effect on June 14, 2007. 210REGISTRATION AND CANCELLATION Art. 240 The twenty percent initial membership is required only if the applicant is, an independent union, not a chapter created by a federation. ART. 240 [234-4]. CHARTERING AND CREATION OF ALOCAL 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 acquire legal personality only for purposes of filing a petition for certification election from the date it was issued a charter certificate. The chapter shall be entitled to all other rights and privileges of alegitimate 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. (This article is inserted as an amendment by R.A. No. 9481 effective June 14, 2007.) NOTES Derinrri0Ns The workers’ right to selforganization is guaranteed under the Constitution and the Labor Code. It is defined in Art. 256. Every employee, even temporary ones, except as provided in Art. 254, is eligible for union membership beginning on the employee’s first day of work. “Labor Organization” means any union or association of employees in the private sector which exists in whole or in part for the purpose of collective bargaining or for dealing with employers concerning terms and conditions of employment. (Implementing Rules, Book V, Rule I, Sec. Ic], as amended by D.O. No, 40-03, effective March 15, 2003.) The existence of employer-employee relationship is essential for the exercise of the right of self-organization for purposes of collective bargaining. Absence of such relationship affects the legality of the union itself. (La Suerte Cigar & Cigarette Factory, 123 SCRA 679 [1983]). “Legitimate Labor Organization” means any labor organization in the private sector registered or reported with the Department in accordance with Rules III and IV of these Rules (i.e., D.O. No. 40-03). “Workers’ Association” means an association of workers’ organized for the mutual aid and protection of its members or for any legitimate purpose other than collective bargaining. 211Art. 240 LABOR RELATIONS “Legitimate Workers’ Association” means any workers’ association which is duly registered with the Department. D.O. No. 40-03 anp 40-B-03 ‘The definitions above are taken from Department Order No. 40-03, which was issued on February 17, 2003 and took effect on March 15, 2003, to replace D.O. No. 9 of 1997. D.O. No. 40-03 now constitutes the entire Rules Implementirtg Book V of the Labor Code (Part II of this work). It has been amended by six department orders, the latest of which is D.O. No. 40-G-03 issued in March 2010. The department orders introduced a number of changes to the implementing rules of Book V in view of the amendments to the Labor Code made by R.A. No. 9481 in 2007. In this work the Implementing Rules of Book Five (Labor Relations) reflect those most recent changes. “L.L.O.” Notevery labor organization isa union; for instance, aworker’sassociation is nota union, So also, not every union isa legitimate labor organization (LLO). Itis the fact of being registered with the Department of Labor and Employment that makes a labor organization “legitimate” in the sense that it is clothed with legal personality to deal with the employer in representation of its members. It thereby acquires the rights enumerated in Art. 250. Nonregistration does not make the labor organization “illegitimate” or illegal since freedom of association is constitutionally guaranteed. But the unregistered organization does not possess the rights mentioned in Art. 250. Creation and Registration Methods Article 289 specifies five requirements for issuance of the certificate of registration of an applicant labor organization, association or group of unions. The Implementing Rules, as modified by D.O. No. 40-03, segregate the requirements for: (a) independent union, (b) local/chapter, (c) federation or national union, and (d) workers’ association. It also provides for mergers or consolidation of union. A union at the enterprise level may be created either by (a) independent registration or (b) chartering. Independent registration is obtained by the union organizers in an enterprise through their own action instead of through issuance of a charter by a federation or national union. The union thus created and registered has a legal personality of its own and is called an independent union. But it may affiliate with a federation, national or industry union, in which case it may also be called an affiliate. Chartering takes place when a duly registered federation or national union issues a charter to a union in an enterprise and registers the charter with the Regional Office or the Bureau of Labor Relations. The union recipient of 212REGISTRATION AND CANCELLATION Art. 240 she charter is called a chapter, local or chartered local. It has no legal personality of its own as long as it has not availed itself of independent registration. The charter certificate issued by a federation or national union, together with supporting documents evidencing the establishment of such local/chapter, is Sled with the DOLE regional office. Applications for registration of independent unions, chartered locals, and workers’ association are filed with the Labor Relations Division of the DOLE Regional Office where the applicant union principally operates. For federations and national unions the applications, although received at the regional offices, are filed with and processed by the national office of the Bureau of Labor Relations itself because they operate in more than one region. A denial of registration by the DOLE Regional Director is appealable to the BLR Director and from there to the Court of Appeals. A denial of an application filed with and denied by the BLR is appealable to the DOLE Secretary and from there to the CA if certiorari is justifiable. Registration Requirements for an Independent Labor Union The application for registration of an independent labor union shall be accompanied by the following documents: (1) the name of the applicant labor union, its principal address, the name of its officers and their respective addresses, approximate number of employees in the bargaining unit where it seeks to operate, with a statement that it is not reported as a chartered local of any federation or national union; (2) the minutes of the organizational meeting(s) and the employees who participated in the said meeting (s); (8) the name of all its members comprising at least 20% of the employees in the bargaining unit; (4) the annual financial reports if the applicant has been in existence for one or more years, unless it has not collected any amount from the members, in which case a statement to this effect shall be included in the application; (5) the applicant's constitution and by-laws, minutes of its adoption or ratification, and the list of the members who participated in it. The list of ratifying members shall be dispensed with where the constitu- tion and by-laws was ratified or adopted during the organizational meeting. In such a case, the factual circumstances of the ratification shall be recorded in the minutes of the organizational meeting(s). of Twenty percent of “C.B.U.” No minimum or maximum number of members is required to register an independent union, but at least twenty percent (20%) of the collective 213Arts, 241-242 LABOR RELATIONS bargaining unit (CBU) should sign up as members of the applicant union, ‘The law promotes unionization, so twenty percent of any number is deemed enough. (This 20 percent requirement does not apply to a chapter created by a federation or national union.) “Bargaining unit” refers to the group of employees which the labor union will represent in dealing or bargaining with the employer. It is that cluster of jobs or positions that politically supports within the company the labor organization applying for registration. Bargaining unit, in other words, is the people represented by the representative union which therefore is called the bargaining agent. Ina school, for example, the teachers make up one bargaining unit and the non-teachers another unit. Each unit will be represented by only ‘one union even if there are rival unions. The employees are the principal, the union is the agent. “Bargaining unit” is explained further under Art. 266. Unton By-Laws A union's constitution and by-laws (CBL) governs the relationship between and among its members. As in the interpretation of contracts, if the terms are clear and leave no doubt as to the intention of the parties, the literal meaning of the stipulation in the CBL shall control. (Johnson and Johnson Labor Union, February 21, 1989.) But, of course, the union's constitution and by-laws cannot disregard the laws. Under Art. 291, for instance, any employee, whether employed for a definite period or not, shall, beginning on his first day of service, be considered an employee for purposes of membership in any labor union. The Supreme Court has reiterated the basic right of employees — even temporary employees — to form or join a labor organization. (Pamantasan ng Lungsod ng Maynila, February 21, 1995.) ART, 241 [235]. ACTION ON APPLICATION. — The Bureau shall act on all applications for registration within thirty (30) days from filing. All requisite documents and papers shalll be certified under oath by the secretary or the treasurer of the organization, as the case may be, and attested to by its president. NOTES The documents required to accompany an application for union registra- tion must be true and correct. Misrepresentation, false statements, or fraud are grounds for cancellation or denial of registration. Article 246 lists the grounds for cancellation of registration, ART. 242 [236]. DENIAL OF REGISTRATION; APPEAL. — The decision of the Labor Relations Division in the regional office denying registration may be appealed by the applicant union to the Bureau within ten (10) days from receipt of notice thereof. 214REGISTRATION AND CANCELLATION Art. 243 NOTES AppLicaTion, DENIAL, AND APPEAL Because an independent union or a local chapter operates at the enterprise level, it applies for registration at the DOLE Regional Office where the union principally operates. If its application is denied by the regional director, the denial may be appealed to the BLR director. If still denied by the latter, the denial is appealable directly to the CA. Because a national union or a federation operates in more than one region, it applies for registration directly with the BLR which is a national office, although the application is received at the DOLE regional office. If the BLR director denies the application, the denial is appealable to the DOLE secretary and then to the CA. ART, 243 [237]. ADDITIONAL REQUIREMENTS FOR FEDERATIONS OR NATIONAL UNIONS. — If the applicant for registration is a federation or a national union, it shall, in addition to the requirements of the preceding Articles, submit the followin; (a) Proof of the affiliation of at least ten (10) locals or chapters, each of which must be a duly recognized collective bargaining agent in the establishment or industry in which it operates, supporting the registration of such applicant federation or national union; and (b) The names and addresses of the companies where the locals or chapters operate and the list of all the members in each company involved. NOTES The opening phrase “Subject to Article 238” is deleted because Art, 288, on Conditions for Registration of Federations or National Unions has been repealed by Executive Order No. 111 FEDERATION OR NATIONAL UNION Originally, a grouping of local unions was called a national union while a grouping of national unions was called a federation. But the unions themselves do not group in this manner, and Art. 243 anyway mentions the same requirements for registering a federation or a national union; thus the distinction between the two has vanished. . The registration requirements for a federation or national union are the same as those for an independent union, except that (a) the 20% minimum membership is not required and instead, (b) it should have as affiliates at least ten local unions, each of which is a bargaining agent in its enterprise. Under D.O. No. 40-03, the reason for registering a federation or national union is similar to that for a local union, namely, to bargain or to deal with employers about employment conditions. In addition, since it operates on large scale, a national union or federation may participate in the formulation 215Art. 243 LABOR RELATIONS of “social and employment policies, standards, and programs.” National unions are members of the National Tripartite Industrial Peace Council (NTIPC). CuartereD Locat Since it is state policy to foster a strong and united labor movement, the Jaw allows federations or national unions to create chapters through issuance of charters. The local union created in an enterprise is thus called a “chartered local or a chapter.” To facilitate the growth of locals, their creation must be simple and easy; hence, unlike an independent union, a chartered local can be registered even without the twenty percent minimum membership. It can even adopt as its own the constitution and by-laws of its mother union, Even the submission of books of accounts, which previously was a registration requirement, has been done away with. By means of chartering, therefore, an enterprise can be unionized silently and quickly. Whether such administrative short cut is wise or unwise, fair or unfair, is itself a highly charged issue. REVOCATION OF CHARTER The federation or national union may revoke the charter issued to the local or chapter. The revocation is done by serving on the local or chapter a verified notice of revocation, copy furnished the Bureau of Labor Relations, on the ground of disloyalty or such other grounds as may be specified in the constitution and by-laws of the federation. The revocation will divest the local/ chapter of its legal personality upon receipt of the notice by the Bureau, unless in the meantime the local/chapter has acquired independent registration. (Implementing Rules, Book V, Rule VIII, Sec. 5.) The charters granted by the Federation are the sources and fountain of the rights and obligations of the workers’ unions within the Federation. (I. Herbert Rothenberg, Rothenberg in Labor Relations, p. 9.) AFFILIATION /DISAFFILIATION An independent union who wants to affiliate with a federation or national union submits the issue to its members. If majority of them vote affirmatively, a resolution or request to affiliate is presented to the chosen federation or national union. If the latter accepts the affiliation, it offers a contract of affiliation, The relationship between the “mother” and “daughter” unions is therefore contractual, binding both sides. The “mother” assists in bargaining with the employer or manning a picket line. The “daughter” in turn remits part of the union dues, usually fifty percent. Affiliation by a duly registered union with a national union or federation does not cause the local union to lose its legal personality. Despite affiliation, the local union remains the basic unit free to serve the common interest of all its members. (Adamson & Adamson, 127 SCRA 268 [1984].) 216REGISTRATION AND CANCELLATION Art. 243 an the affiliate disaffiliate? Yes, but the terms of the contract of affiliation have to be observed. It is believed that disaffiliation cannot absolutely be prohibited, but it can be restricted by the contract of affiliation. The restriction may refer to the number of votes needed to authorize the disaffiliation or it may refer to the time the disaffiliation may be done. It may specify, for example, that three-fourths vote is needed or that the disaffiliation may take place only within the “freedom period.” Despite contract restrictions the Court has ruled that the right of a local union to disaffiliate from its mother union is well-settled. In one case the Court stated that when the local union withdrew from the old federation to join a new federation, it was merely exercising its primary right to self-organization for the effective enhancement and_ protection of common interests. In the absence of enforceable provisions in the federation’s constitution preventing disaffiliation of a local union, a local may sever its relationship with its parent. (People’s Industrial and Commercial Employees, March 15, 1982.) While it is true that a local union is free to serve the interest of all its members and enjoys the freedom to disaffiliate, such right to disaffiliate may be exercised and is thus considered a protected labor activity only when warranted. by circumstances. Generally, a labor union may disaffiliate from the mother union to form a local or independent union only during the 60-day freedom period immediately preceding the expiration of the GBA. (Tanduay Distillery, 149 SCRA 470 [1987].) However, even before the onset of the freedom period (and despite the closed-shop provision in the CBA between the mother union and management) disaffitiation may still be carried out, but such disaffiiation must be effected by a majority of the members in the bargaining unit, (Volkschel Labor Union, 137 SCRA 42 [1985].) But, it is submitted, the contract of affiliation may require a bigger vote as a prerequisite to disaffiliation. In the absence of a prohibition in the contract of affiliation, a local union may disaffiliate from the federation, even while there is a pending protest filed by the federation against the election of the officers of the local union. (Phil Skylanders, Inc., G.R. No. 127374, January 31, 2002.) When a union which is not independently registered disaffiliates from the federation, it is not entitled to the rights and privileges granted to a legitimate labor organization. It cannot file a petition for certification election. (Villar April 20, 1983.) Neither can it bargain with the employer nor stage a strike. When a local union disaffiliates from a national union or federation, the latter ceases to be entitled to check-off dues. The employees’ check-off authorization, even if declared irrevocable, is good only as long as they remain members of the union. A local union which has validly withdrawn from its affiliation with the parent association and which continues to represent the employees of an employer is entitled to the check-off dues under @ collective bargaining contract. (Volkschel Labor Union, 137 SCRA 42 [1985}.) 217Arts. 244-246 LABOR RELATIONS ‘Sunstrrutionary Docrrine The “substitutionary doctrine” holds that the employees cannot revoke the validly executed collective bargaining contract with their employer by the simple expedient of changing their bargaining agent. If Union A, for example, negotiated a five-year CBA with the employer but later was replaced by Union B, Union B must respect the contract. The employees cannot renege on the collective baigaining contract by changing their bargaining agent. But the latter may negotiate with management for the shortening of the CBA period. (Elisco-Elirol Labor Union, December 29, 1977.) Affiliation /disaffiliation is an affair between the parent and the daughter union. The employer is not involved and should not be adversely affected. ‘The CBA continues to bind the members of the new or disaffiliated and independent union up to the CBA’s expiration date. (Associated Workers Union, July 30, 1990.) ART. 244 [238]. CANCELLATION OF REGISTRATION; APPEAL. — 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 hereof. (As amended by R.A. No. 9481.) ART. 245 [238A]. EFFECT OF A PETITION FOR CANCELLATION OF REGISTRATION. — A petition for cancellation of union registration shall not suspend the proceedings on certification election nor shall it prevent the filing of a petition for certification election. Incase of cancellation, nothing herein shall restrict the right of the union to seek just and equitable remedies in the appropriate courts. (This new article is an amendment inserted by R.A. No. 9481, effective June 14, 2007.) ART. 246 [239]. GROUNDS FOR CANCELLATION OF UNION REGISTRA- TION. — 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; (>) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers and the list of voters; (©) Voluntary dissolution by the members. 218REGISTRATION AND CANCELLATION Art. 246 NOTES: Previously numbered 289, this Art. 246 as amended is further amended by Sec. 5 of RA. 9481, effective June 14, 2007. It reduces to three the ten grounds’ for cancellation of union registration. CANCELLATION Cancellation of registration means that the union isno longer a legitimate labor organization. Its juridical personality as well as its statutory rights and privileges are suspended, but the cancellation does not invalidate an otherwise valid CBA which the union has entered into before the cancellation of its certificate. Holding an illegal strike has adverse consequences to the strikers, particularly the officers, but cancellation of their union registration is not one of those consequences. In other words, having held an illegal strike is not a reason to cancel a union’s registration. (Itogon-Suyoc Mines, August 30, 1968.) Similarly, the failure of a union to secure the renewal of its permit from the labor department will not cause the dismissal of the case it filed, if at the time it filed the petition it had juridical personality and the respondent court “Prior to RA, No. 9481, Art. 289 read! as follows: ART. 239, GROUNDS FOR CANCELLATION OF UNION REGISTRATION. — The following shall constitute grounds for cancellation of union registration: (a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification; (b) Failure to submit the documents mentioned in the preceding paragraph within thirty (80) days from adoption or ratification of the constitution and by-laws or amendments thereto; (©) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of officers, the list of voters, or failure to submit these documents together with the list of the newly elected/appointed officers and their postal addresses within thirty (30) days from election; (@)_ Failure to submit the annual financial report of the Bureau within thirty (30) days after the closing of every fiscal year and misrepresentation, false entries or fraud in the preparation of the financial report itself (e) Acting as a labor contractor or engaging in the “cabo” system, 6r otherwise engaging in any activity prohibited by law; (Entering into collective bargaining agreements which provide terms and conditions of employment below minimum standards established by law; (g) Asking for or accepting attorney's fees or negotiation fees from employers; (h) Other than for mandatory activities under this Code, checking off special assessments or any other fees without duly signed individual written authorizations of the members; (Failure to submit list of individual members to the Bureau once a year or whenever required by the Bureau; and () Failure to comply with requirements under Articles 287 and 288. 219Art. 246 LABOR RELATIONS had acquired jurisdiction over the case. (Philippine Land Air-Sea Labor Union [PLASLU], 93 Phil. 47, September 17, 1953.) Wuo May Seek CANCELLATION; WHERE Any party-in-interest may commence a petition for cancellation of reg- istration, except in actions involving violations of Art. 249 which can be commenced only by the members. Thirty percent of the members should support the action against the union, although any member or members specially concerned may also report any violation by the union or a union officer. Is the employer a proper party to seek cancellation of a union’s registra- tion? Yes, such petitions have been filed by employers based on such grounds as lack of required documents, unlawful composition of union membership, or lack of 20% support of the bargaining unit. (See respectively Progressive Develop- ment Conp., February 4, 1992; Toyota Motors, February 19, 1997; and Abbot Laborato- ries, January 26, 2000.) Petitions to cancel the registration of a local/chapter, affiliate or workers association operating within only one region should be filed with the DOLE. Regional Office. Petitions against federations, national or industry unions, trade union centers or workers’ associations operating in more than one region should be filed with the Bureau of Labor Relations. Cancellation ordered by a Regional Office is appealable to the Bureau of Labor Relations and from there, if proper, to the Court of Appeals. Cancellation ordered by the Bureau itself is appealable to the office of the DOLE Secretary, not directly to the CA. (Note that this route is the same asin denial of application for registration.) UNExPLAINED DELETIONS Engaging in the “cabo” system was a reason to cancel a union’s registration. (Cabo” is a union that acts like a labor-only contractor because it gathers and supplies workers to an employer.) But this ground of union cancellation has been deleted by R.A. No, 9481 (effective June 14, 2007) and no explanation has been given for the deletion. ‘Two other important grounds of union cancellation have also been deleted, namely (1) “entering into collective bargaining agreements which provide terms and conditions of employment below minimum standards established by law"; and (2) “asking for or accepting attorney's fees or negotiation fees from employers.” Both these acts are reprehensible and no well-meaning union should ever do them. But, strangely, R.A. No. 9481, supposed to “strengthen” the right to sel-organization, deleted them, Neither are they listed in Art. 249 as violations of the rights of members. 220PRATION AND CANCELLATION Arts, 247-248 ART, 247 [239-A]. VOLUNTARY CANCELLATION OF REGISTRATION. — The registration of a legitimate labor organization may be cancelled by the organization itself. Provided, That at least two-thirds of its general membership votes in a meeting duly called for that purpose to dissolve the organization; Provided, further, That an application to cancel registration is thereafter submitted by the board of the organization, attested to by the president thereof. NOTES Under this amended Article (which used to be 239-) two-thirds of the members can decide to have their union’s registration cancelled, but their decision can be rendered ineffectual by the board of the union and its president. The Article states that the decision of the two-thirds membership to dissolve the union has to be followed by an application for cancellation to be submitted by the board. If the board neglects or refuses to submit the application to cancel the union’s registration, then the members’ desire to cancel their union’s registration will be defeated. If this happens, it will mean a minority disregarding the will of the majority. Itwill amount toa mockery of the members’ right to decide major policy questions, as recognized in Art. 249(d). Indeed, this is a strange way for R.A. No. 9481 to “strengthen” the workers’ right to self-organization. ART. 248 [240]. EQUITY OF THE INCUMBENT. — All existing federations and national unions which meet the qualifications of a legitimate labor organization and none of the grounds for cancellation shall continue to maintain their existing affiliates regardless of the nature of the industry and the location of the affiliates. 221222 NOTES,NOTES 223NOTES 224Chapter II RIGHTS AND CONDITIONS OF MEMBERSHIP 1. If some of my fellow workers are organizing a union, can | refuse to join it? Who are qualified to become union officers? As aunion officer, what are my responsibilities? As a.union member, what are my rights? Does the law limit the amounts of dues and assessments collectible from union members? aaeon ART. 249 [241]. RIGHTS AND CONDITIONS OF MEMBERSHIP IN A LABOR ORGANIZATION. — The following are the rights and conditions of membership in a labor organization: (a) No arbitrary or excessive initiation fees shall be required of the members of a legitimate labor organization nor shall arbitrary, excessive or oppressive fine and forfeiture be imposed; (b) The members shall be entitled to full and detailed reports from their officers and representatives of all financial transactions as provided for in the constitution and by-laws of the organization; (c) The members shall directly elect their officers in the local union, including those of the national union or federation, trade center or any similar aggrupation, to which they or their local union is affiliated, by secret ballot at intervals of five (5) years. No qualification requirement for candidacy to any position shall be imposed other than membership in good standing in subject labor organization. The secretary or any other responsible union officer shall furnish the Secretary of Labor and Employment with a list of the newly-elected officers, together with the appointive officers or agents who are entrusted with the handling of funds within thirty (30) calendar days after the election of officers or from the occurrence of any change in the list of officers of the labor organization; (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; 225Art. 249 LABOR RELATIONS (e) No labor organization shall knowingly admit as member or continue in membership any individual who belongs to a subversive organization or who is engaged directly or indirectly in any subversive activity; (£) 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 shalll collect any fees, dues, or other contributions in its behalf or make any disbursements 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; The funds of the organization shall not be applied for any purpose or object other than those expressly provided by its constitution and by-laws or those expressly authorized by written resolution adopted by the majority of the members at a general meeting duly called for the purpose; (j) Every income or revenue of the organization shall be evidenced by a record showing its source, and every expenditure of its funds shall be evidenced by a receipt from the person to whom the payment is made, which shall state the date, place and purpose of such payment. Such record or receipt shall form part of the financial records of the organization. Any action involving the funds of the organization shall prescribe after three (3) years from the date of submission of the annual financial report to the Department of Labor and Employment or from the date the same should have been submitted as required by law, whichever comes earlier; Provided, ‘That this provision shall apply only to a legitimate labor organization which has submitted the financial report requirements under this Code; Provided, ‘further, That failure of any labor organization to comply with the periodic financial reports required by law and such rules and regulations promulgated thereunder six (6) months after the effectivity of this Act shall automatically result in the cancellation of union registration of such labor organization. (k) The officers of any labor organization shall not be paid any compensation other than the salaries and expenses due to their positions as specifically provided for in its constitution and by-laws, or in a written resolution duly authorized by a majority of all the members at a general membership meeting duly called for the purpose. The minutes of the meeting and the list of participants and ballots cast shall be subject to inspection by the Secretary of Labor and Employment or his duly authorized representatives. Any irregularities in the approval of the resolutions shall be a ground for impeachment or expulsion from the organization. 226RIGHTS AND CONDITIONS Art. 249 OF MEMBERSHIP (1) The treasurer of any labor organization and every officer thereof who is responsible for the account of such organization or for the collection, management, disbursement, custody or control of the funds, moneys and other properties of the organization, shall render to the organization and to its members a true and correct account of all moneys received and paid by him since he assumed office or since the last day on which he rendered such account, and of all bonds, securities and other properties of the organization entrusted to his custody or under his control. The rendering of such account shall be made: (1) At least once a year within thirty (30) days after the close of its fiscal year; (2) At such other times as may be required by a resolution of the majority of the members of the organization; and (3) Upon vacating his office. The account shall be duly audited and verified by affidavit and a copy thereof shall be furnished the Secretary of Labor and Employment. (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 at a general membership meeting duly called for the purpose. The secretary of the organization shall record the minutes of the meeting including the list of all members present, the votes cast, the purpose of the special assessment or fees and the recipient of such assessment or fees. The record shall be attested to by the president. (o) Other than for mandatory activities under the Code, no special assessments, 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, 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 officer from office, whichever is appropriate. At least thirty percent (30%) of all the members of a union or any member or members specially concerned may report such 227Art. 249 LABOR RELATIONS 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. NOTES Ricuts oF Mewners A labor union is supposed to be an instrument of industrial democracy. Ihas to be an exemplar of honest and democratic and responsible leadership. Itis conceived upon the principle of inverted pyramid whose base, consisting of the members, is above the officers. The officers’ authority, even their tenure in office, as well as the policy and major decisions of the organization, all are passed upon by the membership. In a labor union, the members — not the officers or directors — are the governing body. Just as the High Court has stricken down unjust exploitation of laborers by oppressive employers, so will it strike down their unfair treatment by their own unworthy leaders. Fair dealing is equally demanded of unions as well as of employers in their dealings with employees. (Heirs of Cruz, 30 SCRA 917.) The rights and conditions of membership laid down in Art. 249 may be summarized as follow: Political right — the member's right to vote and be voted for, subject to lawful provisions on qualifications and disqualifications. Deliberative and decisionmaking right — the member's right to participate in deliberations on major policy questions and decide them by secret ballot. Rights over money matters — the member's right against excessive fees; the right against unauthorized collection of contributions or unauthorized disbursements; the right to require adequate records of income and expenses and the right of access to financial records; the right to vote on officers’ compensation; the right to vote on proposed special assessments and be deducted a special assessment only with the member's written authorization. Right to information — the member's right to be informed about the organization’s constitution and by-laws and the collective bargaining agreement and about labor laws. ‘These are rights of union members. As employees, the union members retain the right to directly present grievances to the employer at any time. This right is protected in Art. 266, last sentence of the first paragraph. Complaint; who may file Any union member may file with the Regional Director a complaint for any violation of the constitution and by-laws or of the rights and conditions 228RIGHTS AND CONDITIONS. Art. 249 OF MEMBERSHIP of membership under Art. 249. However, if the issue involves the entire membership of the union, the complaint should be supported by at least thirty percent (30%) of the members of the union. The complaint may be filed in the Regional Office where the union is domiciled, (Implementing Rules, Book V, Rule XIV, Sec. 1.) Violation of Art. 249 may serve as basis of a petition for the cancellation of the union’s registration or to expel an officer. The article states that 30% of the members may report the violation. But the Supreme Court has ruled that the 30 percent is not mandatory. Any member specially concerned may report the violation. (Verceles, February 15, 2005.) “Union Account Examiners” are officers of the Bureau or in the Regional Offices assigned to conduct an audit of the books of accounts of a legitimate labor organization or workers’ association. Union Orricers The Implementing Rules require that within sixty (60) days before the expiration of the term of the incumbent officers, the president of the labor organization or workers’ association shall constitute a committee on election. It should be composed of at least three (3) members who are not running for any position in the election, If there are identifiable parties within the organization or association, each party shall have equal representation in the committee. The election of union officers should be held in accordance with the provisions of the union’s constitution and by-laws (CBL). For instance, an assembly composed of members and non-members of the union (although members of the bargaining unit) cannot “suspend” the constitution and by- laws of the union and then and there elect a new set of officers to replace the incumbents. Such election which does not conform with the union's CBL is null and void, and it is not validated by negotiating and signing a collective bargaining agreement with the employer. (UST Faculty Union, November 16, 1999.) The BLR correctly voided the election. In the election of union officers, only the union members can vote; non- union members cannot, even though they are part of the bargaining unit (Ibid.) The Implementing Rules, before the 1997 amendments, used to provide that a union officer in a company should be an employee of that company. The present Rules are silent on this point. But the requirement remains, as may be deduced from Art. 249(c), second sentence. A person who has been convicted by final sentence of a crime involving moral turpitude cannot be elected asa union officer or appointed to any position in the union (Art. 249, paragraph [f].) A “crime involving moral turpitude” is one characterized by “an act of baseness, vileness or depravity in the private or social duties which a man owes his fellowmen, or to society in general, contrary 229Art. 249 LABOR RELATIONS to accepted and customary rule of right and duty between man and man, or conduct contrary to justice, honesty, modesty, or good morals.” (Tak, 106 Phil. 730.) Paragraph (c) of this Article specifies five-year term of union officers. “Term of Office” refers to the fixed period of five (5) years during which the duly elected officers of a labor organization shall discharge the functions of their office. In impeachment of a union officer, due process must be followed. (Litton Mills Employees, 167 SCRA. 804 [1988].) Just as an officer is entitled to due process, so also is a member. In one case, the Court explicitly ruled that a member of a labor union may be expelled only for a valid cause and by following the procedure outlined in the constitution and by-laws of the union. (Kapisanan ng mga Manggagawa, 101 Phil. Reports 18.) res Attorney's fees may not be deducted or checked-off from any amount due to an employee without his written consent except for mandatory activities under the Code. (Vengeo, May 5, 1989.) Even negotiation fee in collective bargaining is an obligation of the union and not of a particular member. (Art. 228[b].) Paragraph (n) of this Article refers to “levy” while paragraph (0) refers to “check-off” of a special assessment. Levy means imposition of a certain amount. “Check-off” is an arrangement authorizing the employer to deduct from an employee's pay at prescribed periods the amounts due the union for fees, or assessments. The authorization must specify the amount, purpose and beneficiary of the deduction, In short, check-off means collecting an amount through salary deduction, Both provisions in paragraph (n) and paragraph (0) must be complied with. Under paragraph (n), the Union must submit to the company a written resolution of a majority of all the members at a general membership meeting duly called for the purpose. Paragraph (0), in addition, requires an individual written authorization duly signed by every employee in order that a special assessment may be validly collected from the employee's pay. The failure of the Union to comply strictly with the requirements set out by the law invalidates the questioned special assessment. Substantial compliance is not enough in view of the fact that the special assessment will diminish the compensation of the union members. Their express consent is required, and this consent must be obtained in accordance with the steps outlined by law, which must be followed to the letter. No shortcuts allowed. (Palacol, February 26, 1990.) 230RIGHTS AND CONDITIONS. Art. 249 OF MEMBERSHIP An employer who collects a special assessment without being armed with the required general assembly resolution and the written authorizations from each of the union members may be charged with making illegal deductions from the employees’ salary. 231Chapter III RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS 1. Isevery legitimate labor organization a bargaining represent- ative of employees? 2. Is an employer obliged to furnish confidential data or information to the union? ART. 250 [242]. RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS. — A legitimate labor organization shall have the right: (a) To act as the representative of its members for the purpose of collective bargaining; (b) To be certified as the exclusive representative of all the employees in an appropriate collective bargaining unit for purposes of collective bargaining; (c) To be furnished by the employer, upon written request, with its annual audited financial statements, including the balance sheet and the profit and loss statement, within thirty (30) calendar days from the date of receipt of the request, after the union has been duly recognized by the employer or certified as the sole and exclusive bargaining representative of the employees in the bargaining unit, or within sixty (60) calendar days before the expiration of the existing collective bargaining agreement, or during the collective bargaining negotiation; (a) To own property, real or personal, for the use and benefit of the labor organization and its members; (e) To sue and be sued in its registered name; and (£) To undertake all other activities designed to benefit the organization and its members, including cooperative, housing welfare and other projects not contrary to law. Notwithstanding any provision of a general or special law to the contrary, the income and the properties of legitimate labor organizations, including grants, endowments, gifts, donations and contributions they may receive from fraternal and similar organizations, local or foreign, which are actually, directly and exclusively used for their lawful purposes, shall be free from taxes, duties and other assessments. The exemptions provided herein may be withdrawn only by a special law expressly repealing this provision. 232RIGHTS OF LEGITIMATE LABOR Art, 250 ORGANIZATIONS NOTES The opening of this Article is loosely worded. Not every legitimate labor organization (LO) possesses the rights mentioned in this Article. The right to represent employees in collective bargaining is true only for the union of the majority members of the bargaining unit. The right does not attach to a minority union although it is an LO. Similarly, the right to be certified as exclusive bargaining representative is true only for the union that won in a certification or consent election. The losing union has no representational status and cannot be certified as bargaining representative, although the union is an LO. AUTHORITY OF THE UNION A registered labor union has the requisite personality to sue on behalf of its members for their individual money claims. (La Carlota, May 19, 1975.) But the authority of the union to waive or quitclaim all or part of the judgment award in favor of the individual workers cannot be lightly presumed. It must be expressly granted, and the employer, as judgment debtor, must deai in all good faith with the union as the agent of the individual workers. The court, for its part, should verify the extent of the authority of the union leadership to execute any compromise or settlement. (Heirs of Cruz, 30 SCRA 917 [1969].) A judgment based on a compromise agreement authorized by the members does not bind the individual members or complainants who are not parties to it. (Kaisahan ng mga Manggagawa, 33 SCRA 220.) Thus, a compromise agreement, which waives the complainants’ claims for reinstatement and backwages, does not bind the complainants who neither consented to nor ratified such agreement. This is true even if the majority (257 out of 262) of the complainants conformed with the agreement and even if the agreement was signed by the union officers and its counsel. Even the labor arbiter’s decision based on such compromise agreement does not constitute res judicata (settled case) upon the objecting minority. (Golden Donuts, January 19, 2000.) Union Registration, Unclear In one case, it is not clear from the record whether the union is a registered organization. But considering that it filed a petition for certification election and such petition was granted on appeal by the labor undersecretary, the Court ruled that the union had the personality to sue in its own name to challenge the ULP acts committed by the employer. The union could institute the action in its representative capacity. (Me-Shurn Corp., January 11, 2005.) 233,Art, 251 LABOR RELATIONS Union MERGER oR CoNsoLIDATION ‘Together with multi-employer bargaining, union merger and consolida- tion are new concepts (in the Philippines) introduced by D.O. No. 40-03. “Merger” of labor organizations is the process where a labor organization absorbs another, resulting in the cessation of the absorbed labor organization's existence and the continued existence of the absorbing labor organization; thatis, if Union A absorbs Union B, Union A remains and Union B disappears Another name of merger is “absorption.” “Consolidation” of unions refers to the creation or formation of a new union arising from the unification of two or more unions; that is, if Union A and Union B consolidate themselves, both of them disappear and Union Cis born. Another name for consolidation is “amalgamation.” One effect of merger is to transfer to the absorbing organization all the rights, interest and obligations of the absorbed organization. In consolidation, the newly created labor organization acquires all the rights, interest and obligations of the consolidating labor organizations. (Sec. 10, Rule IV, D.O. No. 40-03.) The notice of merger or consolidation of local unions and of workers’ associations shall be filed with the DOLE Regional Office where the organi- zation is registered or with the BLR in case of federation or national union. ‘The notice of merger/consolidation shall be accompanied by the minutes of merger/consolidation convention and the amended constitution and by- laws and the minutes of its ratification. ART, 251 [242-4]. REPORTORIAL REQUIREMENTS. — The following are documents required to be submitted to the Bureau by the legitimate labor organization concerned. (a) Its constitution and by-laws, or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification of the constitution and by-laws within thirty (30) days from adoption or ratification of the constitution and byaws or amendments thereto; (b) Its list of officers, minutes of the election of officers, and list of voters within thirty (30) days from election; (c) Its annual financial report within (30) days after the close of every fiscal year; and (d) Its list of members at least once a year or whenever required by the Bureau. Failure to comply with the above requirements shall not be a ground for cancellation of union registration but shall subject the erring officers or mem- bers to suspension, expulsion from membership, or any appropriate penalty. (This article is inserted by R.A. No. 9481, effective June 14, 2007.) 234NOTES 235236 NOTESTitle V COVERAGE 1. Do employees in non-profit non-governmental institutions have the right to unionize? 2. Whatare the legally recognized purposes of self-organization of workers? 3. _ How does “managerial employee” under Art. 245 differ from “managerial employee” under Art. 827 4. May confidential employees join a union? ART. 252 [243]. COVERAGE AND EMPLOYEES’ RIGHT TO SELF- ORGANIZATION. — All persons employed in commercial, industrial, and agricultural enterprises and in religious, charitable, medical, or educational institutions whether operating for profit or not, shall have the right to self- organization and to form, join, or assist labor organizations of their own choosing for purposes of collective bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural workers and those without any definite employers may form labor organizations for their mutual aid and protection. NOTES This Article mentions two rights: the right to self-organize and the right to form, join or assist labor organization. “Organizing” is frequently equated with “unionizing” but the two are not the same. All persons may organize for a lawful purpose, but to say that all persons may form labor unions is not accurate, There are many persons whom the law and court decisions do not allow to form or join labor organizations for purposes of collective bargaining. Examples: managers and others specifically disqualified by law or court rulings. Even employees of traditionally nonprofit organizations like religious, charitable, medical, or educational institutions may unionize. This policy is a significant departure from that of the Industrial Peace Act (1958) which not allow employees of non-profit firms to unionize. ART. 258 [244]. RIGHT OF EMPLOYEES IN THE PUBLIC SERVICE. — Employees of government corporations established under the Corporation Code shall have the right to organize and to bargain collectively with their respective employers. 237Art. 253 LABOR RELATIONS All other employees in the civil service shall have the right to form associations for purposes not contrary to law. NOTES Government Eurtovers; “C.N.A.” Government employees may organize, may unionize, and may negotiate collective negotiation agreements (CNA) or memorandum of agreement (MOA) with their employers. Their organizations have to be registered with the Civil Service Commission and the DOLE. The governing law on this and related matters is Executive Order No. 180, issued in 1987. The Executive Order applies to “government employees,” referring to employees of all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or -controlled corporations with original charters from Congress. However, the Executive Order does not apply to members of the Armed Forces, including police officers, policemen, firemen and jail guards. High-level employees doing policy-making, managerial, or confidential duties are not eligible to join the rank-and-file organization. For employees of government corporations incorporated under the Corporation Code and registered with the Securities and Exchange Commis- sion, the governing labor relations law is the Labor Code, not E.O. 180. The right of Government employees to deal and negotiate with their respective employers is not quite as extensive as that of private employees. Excluded from negotiation by government employees are the “terms and conditions of employment that are fixed by aw. "Only those terms and conditions not otherwise fixed by law are negotiable. Employees and officers of SSS are not entitled to the signing bonus provided for in collective negotiation agreement because the process of collective negotiations in the public sector does not encompass terms and conditions of employment requiring the appropriation of public funds. (SSS vs, Commission on Audit, G.R. No. 149240, July 11, 2000.) The Court reminds the Social Security Commission that the SSS fund is not their money. Executive Order No. 180 concedes to government employees, like their counterparts in the private sector, the right to engage in concerted activities, including the right to strike, However, the executive order further states that those activities must be exercised in accordance with law, i.e., subject both to “Civil Service Law and rules” and “any legislation that may be enacted by Congress.” Tealso states that “the resolution of complaints, grievances, and cases involving government employees” is not ordinarily left to collective bargaining or other related concerted activities, but to “Civil Service Law and labor laws and proce dures whenever applicable,” In case “any dispute remains unresolved after ex- hausting all available remedies under existing laws and procedures, the parties may jointly refer the dispute to the (Public Sector Labor Management) Council for appropriate action.” 238COVERAGE Arts. 254-255 Memorandum Circular No. 6 of the Civil Service Commission, issued on April 21, 1987 enjoins strikes by government officials and employees. (Arizala, September 14, 1990.) ‘To sum up, government employees covered by E.O. No. 180 may organize, even unionize, and negotiate employment conditions not fixed by law. But they cannot strike. ART. 254 [245]. INELIGIBILITY OF MANAGERIAL EMPLOYEES TO JOIN ANY LABOR ORGANIZATION; RIGHT OF SUPERVISORY EMPLOYEES. — Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in the collective bargaining unit of the rank-and-file employees but may join, assist or form separate collective bargaining units and /or legitimate labor organizations of their own. The rank-and-file union and the supervisors’ union operating within the same establishment may join the same federation or national union. (Note: This Article 254 as amended is further amended by Sec. 8 of R.A. No. 9481, effective June 14, 2007.) Art. 255 [245-A]. EFFECT OF INCLUSION AS MEMBERS OF EMPLOYEES OUTSIDE THE BARGAINING UNIT. — The inclusion as union members of employees outside the bargaining unit shall not be a ground for the cancellation of the registration of the union. Said employees are automatically deemed removed from the list of membership of said union. (Note: This amendatory article is inserted by R.A, No. 9481, effective June 14, 2007.) NOTES ‘SUPERVISORS AND MANAGERS “Managerial employee” and “supervisor” are differentiated in Art, 219(m). One is a decision-maker, the other a recommender. The power to decide and do managerial acts is separated from the power to recommend those managerial acts, such as laying down policy, hiring or dismiss- ing employees, and so on. A supervisor has the power only to recommend while amanagerial employee has the power to decide and do those acts. They pertain to either policy decisions or people (personnel) decisions. . The powers of the position, not the title, make the position-holder a manager or a supervisor. But to make one a supervisor, the power to recommend must not be merely routinary or clerical in nature; it should require the use of independent judgment. In other words, the recommendation is: (1) discretionary or judg- mental (not clerical), (2) independent (not a dictation of someone else), and (3) effective (given particular weight in making the management decision). If these qualities are lacking or, worse, if the power to recommend is absent, then the person is not really a supervisor but a rank-and-file employee and therefore belongs or may join a rank-and-file organization. 239Art. 255 LABOR RELATIONS Similarly, a so-called manager, regardless of impressive title, is not really a manager in the eyes of the law, if he does not possess managerial powers to make policy decisions or people decisions (to lay down and execute management policies and/or to hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees). If he can only recommend the exercise of any of these powers, he is a supervisor, hence, may join, assist or form a supervisors’ organization, Worse, if he cannot even recommend those acts, the way a supervisor does, then he is not even a supervisor but a rank-and-file employee, regardless of position title, perquisites, or seniority. Therefore, he belongs or should belong to a rank-and-file organization, The prohibition of unionization of managerial employees does not violate the Philippine Constitution, (United Pepsi-Cola, March 25, 1998.) Segregation Article 254 allows supervisory employees to form, join, or assist separate labor organizations of their own, but they are not eligible for membership in a labor organization of the rank-and-file employees. Before R.A. No. 9481 took effect on June 14, 2007, it was ruled that a supervisors’ union could not affiliate with the same federation as that of the rankand-file union. (Atlas Lithographic, January 6, 1992.) It was further ruled that a union whose membership included supervisors and rank-and-file employees was not and could not become a legitimate labor organization. It could not petition for a certification election. It could not ask to be recognized as the bargaining representative of employees, and it could not strike. (Toyota Motor; February 19, 1997.) The above rulings in Adas Lithographic and Toyota are no longer true because of the last sentence of Art. 254 and amendatory Art. 255, both added by R.A. No. 9481 CONFIDENTIAL EMPLOYEES Confidential employees do not constitute a distinct category for purpos- s of organizational right. Confidentiality may attach to a managerial or non- managerial position, hence, by itself is not enough basis of exclusion from union coverage. However, in Philips Industrial Development vs. NLRC (G.R. No. 88957, June 25, 1992), the court sustained the exclusion of confidential rank-and-file employees from the rank-and-file union. Applying the “doctrine of necessary implication” (which states that what is implied in a statute is as much a part thereof as that which is expressed), the court extended to confidential employees the prohibition against managers’ membership in un- ions. Confidential and managerial employees are, as it were, birds of the same feather. Said the Court: By the nature of their functions, they assist and act in a confidential capacity to, or have access to confidential matters of persons who exercise 240COVERAGE Art. 255 managerial functions in the field of labor relations. As such, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union equally applies to them. [Emphasis supplied] The ineligibility of confidential employees, enunciated in Philips, is entrenched in the 1995 case of Pier 8 Arrastre vs. Confesor and General Maritime and Stevedores Union (G.R. No. 119854, February 18, 1995) where the Court observed that legal secretaries, though neither managers nor supervisors, are confidential employees. “Thus, to them applies our holding in the case of Philips Industrial Deu, Inc. vs. NLRC (210 SCRA 339 [1992]).” In Metrolab Industries vs, Roldan-Confesor, et al, G.R. No. 108855, February 28, 1996, the Court excluded the confidential employees not only from union membership but from the rank-and-file bargaining unit itself. Hence, the union security clause in the CBA requiring payment of agency fee or compulsory union membership does not apply to the confidential staff. Notevery position that management labels as “confidential” automatically becomes disqualified from union membership. The legal definition must be applied; otherwise, the employer can easily decimate or reduce the union membership. In unionization context, confidential employees are limited to those who (1) assist or act in a confidential capacity, (2) to persons who formulate, determine, and effectuate management policies in the field of labor relations. The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee — that is, the confidential relationship must exist between the employee and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. (San Miguel Corp. Supervisors and Exempt Union, et al. us. Hon. Laguesma, etal, GR. No, 110399, August 15, 1997.) When the employee does not have access to confidential labor relations information, there is no legal prohibition against confidential employees from forming, assisting, or joining a union. (Sugbuanon Rural Bank, February 2, 2000.) Securrry Guarps Security guards used to be barred from joining a labor organization of the rank-and-file, The disqualification has been removed. They may join a labor organization of the rank-and-file or that of the supervisory union, depending on their rank. (Manila Electric, May 20, 1991.) Coop MeMners An employee of a cooperative who is also a member and co-owner cannot invoke the right to collective bargaining, for certainly an owner cannot bargain with himself or his co-owners In cooperatives, however, with employees who are not members or co- owners thereof, such employees are entitled to exercise the rights of workers 241Art. 256 LABOR RELATIONS to self-organization, collective bargaining, and other rights enshrined in the Constitution and existing laws. (San Jose Electric, May 31, 1989.) But even as regards the employees who are members of the cooperative, their incapacity to bargain does not stop them from forming their organization which is not a union. Its purpose is not to collectively bargain with the cooperative but to extend aid and protection to its members. The capacity of such an association to sue the cooperative which forcibly required members to sign applications for retirement, resignation or separation was upheld in Nueva Ecija I Electric, January 24, 2000. INTERNATIONAL ORGANIZATION A certification election cannot be conducted in an international organization which the Philippine Government has granted immunity from local jurisdiction. Examples of such international organizations are the International Rice Research Institute (IRRI) and the International Catholic Migration Commission (ICMC). The grant of such immunity is a political question whose resolution by the Executive Branch of Government is conclusive upon the Courts. (International Catholic, 190 SCRA 130 [1990].) Reuicious Onjecrors Under the Industrial Peace Act — the labor relations law before the passage of the Labor Code — persons whose religion forbade membership in labor unions (¢g., Iglesia ni Kristo), could not be compelled into union membership. This “exemption” was embodied in a law (R.A. No. 3350, enacted on June 18, 1961) whose constitutionality was upheld by the Supreme Court in Victoriano, September 12, 1974. In the case Ebralinag, March 1, 1993, the Court, in exempting Jehovah Wimesses from compulsory participation in flag ceremony, supported its decision by citing the religious objectors’ exemption from compulsory union membership. Clearly, as late as 1993, the Court acknowledges the existence or justification of the exemption granted by R.A. 3350 in 1961. ART. 256 [246]. NON-ABRIDGMENT OF RIGHT TO SELF. ORGANIZATION. — It shall be unlawful for any person to restrain, coerce, discriminate against or unduly interfere with employees and workers in their exercise of the right to self-organization, Such right shall include the right to form, join, or assist labor organizations for the purpose of collective bargaining through representatives of their own choosing and to engage in lawful concerted activities for the same purpose or for their mutual aid and protection, subject to the provisions of Article 264 [now 278] of this Code. 242COVERAGE, Art. 256 NOTES: The right to self-organization is a pillar of industrial democracy. So basic and vital is this right that the Constitution and the Code zealously protect its exercise. The organization does not always have to be a union, it may only be an association. And the purpose does not have to be collective bargaining, it may just be for mutual help. Whether an association or a union, independent or affiliated, an employees’ organization is needed in the workplace. It transforms the weakness of the individual into strength of the group. It solidifies, making the individuals an entity with a collective voice the management cannot easily ignore. The law protects it because it is a device to check authoritarianism in a private enterprise and to diffuse wealth created by combined efforts of hired hands. The right to organize carries with it the right to engage in group action. But the group action by a non-union cannot be a work stoppage. Only a union may resort to work stoppage, subject to legal conditions and requirements. These are detailed in Arts. 277 to 279. The right to organize, says this Article, should not be abridged or curtailed. Any act intended to weaken or defeat the right is regarded by law as an offense, which is technically called “unfair labor practice” (ULP). Article 256 captures the essence of unfair labor practice. The next three articles elaborate on the concept. 243,244 NOTES