Labor Law Reviewer Page 1

LABOR LAW REVIEWER Page 1 of 270
Ateneo Law 2002, 2nd Semester

Atty. Marlon Manuel
LABOR LAW REVIEW LABOR CODE

ATTY. MARLON MANUEL Art. 1. Name of Decree. This Decree shall be known as the
Labor Code of the Philippines.
I. GENERAL PRINCIPLES
Art. 2. Date of effectivity. This Code shall take effect six (6)
CONSTITUTION months after its promulgation. (P.D. 442 was made effective on
November 1, 1974)
Art. XIII, 3.The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full employment Art. 3. Declaration of basic policy.
and equality of employment opportunities for all. The State shall:
It shall guarantee the rights of all workers to self-organizations, - afford protection to labor,
and peaceful concerted activities, including the right to strike in - promote full employment,
accordance with law. They shall be entitled to security of tenure, - ensure equal work opportunities regardless of sex, race or creed,
humane conditions of work, and a living wage. They shall also - and regulate the relations between workers and employers.
participate in policy and decision-making processes affecting their - The State shall assure the rights of workers to:
rights and benefits as may be provided by law. a) self-organization,
b) collective bargaining,
The State shall promote the principle of shared responsibility c) security of tenure, and
between workers and employers and the preferential use of voluntary d) just and humane conditions of work.
modes in settling disputes, including conciliation, and shall enforce
their mutual compliance therewith to foster industrial peace. Art. 4. Construction in favor of labor. All doubts in the
The State shall regulate the relations between workers and implementation and interpretation of the provisions of this Code,
employers, recognizing the right of labor to its just share in the fruits including its implementing rules and regulations, shall be resolved in
of production and the right of enterprises to reasonable returns on favor of labor.
investments, and to expansion and growth.
Art. 5. Rules and regulations. The Department of Labor and
Art. II, 18.The State affirms labor as a primary social economic Employment, and other government agencies charged with the
force. It shall protect the rights of workers and promote their welfare. administration and enforcement of this Code or any of its parts shall
promulgate the necessary implementing rules and regulations. Such
Art. III, 8. The right of the people, including those employed in the rules and regulations shall become effective fifteen (15) days after
public and private sectors, to form unions, associations, or societies for announcement of their adoption in newspapers of general circulation.
purposes not contrary to law shall not be abridged.
Dot Joy Kat Kathy Keith Maita Mica Mau Oliver Pepper Pete Poochy Siel Vern

Atty. Marlon Manuel
Art. 6. Applicability. All rights and benefits granted to workers B. To encourage
under this Code shall, except as may otherwise be provided herein, - a truly democratic method of regulating the relations
apply alike to all workers, whether agricultural or non-agricultural. between the employers and employees by means of
agreements freely entered into through collective bargaining,
Art. 211. Declaration of policy. - no court or administrative agency or official shall have the
A. It is the policy of the State: power to set or fix
- wages,
(a) To promote and emphasize: - rates of pay,
- the primacy of free collective bargaining and negotiations, - hours of work
including voluntary arbitration, mediation and conciliation, - or other terms and conditions of employment,
- as modes of settling labor or industrial disputes; - except as otherwise provided under this Code.
(b) To promote:
- free trade unionism Art. 275. Tripartism and tripartite conferences.
- as an instrument for (a) Tripartism in labor relations is hereby declared a State policy.
- the enhancement of democracy and Towards this end, workers and employers shall, as far as
- the promotion of social justice and development; practicable, be represented in decision and policy-making bodies
(c) To foster: of the government.
- the free and voluntary organization (b) The Secretary of Labor and Employment or his duly authorized
- of a strong and united labor movement; representatives may from time to time
(d) To promote: - call a national, regional, or industrial tripartite conference of
- the enlightenment of workers representatives of government, workers and employers
- concerning their rights and obligations - for the consideration and adoption of voluntary codes of
- as union members and as employees; principles
(e) To provide: - designed to promote
- an adequate administrative machinery - industrial peace based on social justice
- for the expeditious settlement of labor or industrial disputes; - or to align labor movement relations with established
(f) To ensure: priorities in economic and social development.
- a stable but dynamic and just industrial peace; and In calling such conference, the Secretary of Labor and
(g) To ensure: Employment may consult with accredited representatives of workers
- the participation of workers and employers.
- in decision and policy-making processes
- affecting their rights, duties and welfare.

Atty. Marlon Manuel
CIVIL CODE enjoined to effect the policy of the law. to eliminate the causes of industrial
unrest by encouraging and protecting the exercise by employees of their right to
Art. 1700. The relation between capital and labor are not merely self-organization for the purpose of collective bargaining and for the promotion
contractual. They are co impressed with public interest that labor of their moral, social and economic well-being.
contracts must yield to the common good. Therefore, such contracts
The demonstration held by the employees was against alleged abuses of
are subject to the special laws on labor unions, collective bargaining,
some Pasig policemen, not against their employer. Said demonstration was
strikes and lockouts, closed shop, wages, working conditions, hours of
completely an exercise of their freedom of expression in general and of their
labor and similar subjects.
right of assembly and petition for redress of grievances in particular before the
Art. 1701. Neither capital nor labor shall act oppressively against the appropriate government agency. They exercised their civil and political rights for
other, or impair the interest or convenience of the public. their mutual aid and protection from what they believed were police excesses. It
was to the interest of the firm to protect the employees to rally to the defense of
Art. 1702. In case of doubt, all labor legislation and all labor and to take up the cudgels for its employees so that they can report to work free
contracts shall be construed in favor of the safety and decent living for from harassment, vexation or peril and as a consequence perform more
the laborer. efficiently their respective tasks to enhance its productivity as well as profits.
The primacy of human rights-freedom of expression, of peaceful
Art. 1703. No contract which practically amounts to involuntary assembly and of petition for redress of grievances-over property rights, has been
servitude, under any guise whatsoever, shall be valid. sustained.
CASES Philippine Airlines vs. NLRC, 225 SCRA 301
In March 1985, PAL completely revised its Code of Discipline, which was
Phil. Blooming Mills Employees Assoc. vs. PBM, 51 SCRA 189 circulated, immediately implemented and caused the imposition of disciplinary
PBMEO wanted to stage a mass demonstration at Malacanang, against alleged sanctions on some employees. PALEA filed a complaint with the NLRC for
police abuses. PBMEO informed the employer PBM, and told PBM that PBMEO unfair labor practice, because the Code was arbitrarily implemented without prior
did not intend to prejudice PBM. PBM disagreed saying it would prejudice notice and discussion of such with the union. PAL posits that it has the
operations, and said that at least one shift should be present on the day of the prerogative to prescribe rules and regulations regarding employees conduct in
rally. PBM warned that should they fail to report, they would be dismissed carrying out their functions.
because of the no lockout-no strike clause in the CBA. PBMEO went ahead
with the rally and was thus charged with violation of the CBA. The CIR ruled in Labor Arbiter ruled not guilty of ULP, but must provide all employees
favor of PBM. with the new Code to discuss any objectionable items. On appeal, NLRC said
though adopting Rules of Conduct is a mgt. prerogative, it can no longer exclude
Held: The CIR as an agency of the State is under obligation at all times to give labor, and so must let them participate in the review of the Code.
meaning and substance to these constitutional guarantees in favor of the working
man; for otherwise these constitutional safeguards would be merely a lot of Held: The exercise of managerial prerogatives is not unlimited. It is
meaningless constitutional patter. Under the Industrial Peace Act, the CIR is circumscribed by limitations found in law, the CBA, or general principles of fair

Atty. Marlon Manuel
play and justice. Al line must be drawn between management prerogatives contain the certification as required by the Rules. The medical certificate offered
regarding business operations per se and those which affect the rights of by the employer came from its own physician who was not a competent public
employees. In treating the latter, mgt. should see to it that its employees are at health authority, and merely stated the employees disease without more.
least properly informed of its decisions and modes of action. We may surmise that if the required certification was not presented, it
PAL says that by signing the CBA, PALEA in effect recognized PALs was because the disease was not of such a nature or seriousness that it could not
exclusive right to make and enforce company rules and regulations to carry out be cured within a period of six months even with proper treatment. The court
the functions of management without having to discuss the same with PALEA, reaffirms its concern for the lowly worker who, often at the mercy of his
and much less, the latters conformity thereto. Such provision in the CBA may employers, must look up to the law for his protection.
not be interpreted as a cession of employees rights to participate in the
deliberation of matters which may affect their right s and the formulation of LECTURE
policies relative thereto. And one such matter is the formulation of a Code of
Discipline. Industrial peace cannot be achieved if the employees are denied their The management and labor relationship is like a bicycle with a third
just participation in the discussion of matters affecting their rights. The wheel. The third wheel is the government, which does not convert the bicycle
attainment of a harmonious labor-mgt relationship and the then already existing into a tricycle, because it does not intervene in the management-labor
state policy of enlightening workers concerning their rights as employees demand relationship. The government allows management and labor to negotiate and
no less than the observance of transparency in managerial moves affecting determine the terms of the contractual relationship that is, the fixing of wages,
employees rights. et.al. but government sets the minimum standards. This is the only means by
which the government intervenes.
Cebu Royal Plant vs. Deputy Minister of Labor, 153 SCRA 38 However, the relationship between management and labor is not merely
Ramon Pilones handled ingredients in the processing of soft drinks. Later he was contractual. Check the Civil Code Arts. 1700-1703. This emphasizes that the
removed due to pulmonary tuberculosis minimal. He filed for illegal dismissal. relationship is so impressed with public interest. As such, the third wheel only
Regional Director found in favor of employer. However on appeal, the Minister supports and assists the relationship, not to change the relationship but only to
ordered reinstatement, as it was found that he was a permanent employee, and balance a relationship that is inherently imbalanced. An example is the
that the ailment was not certified as incurable within six months as to justify government fixes wage rates in order to avoid abuses against the weaker party.
separation. Also, the Minister said that the employer should have first obtained a
clearance for termination of employment, as required by the regulations then in Although in some aspects of labor relations, the government has no
force. power of intervention at all. Check the Constitutional provisions on voluntary
modes of settling disputes. In this case the governments policy of regulation is
Employer insists he was a probationary employee at the time he was not equivalent to policy of intervention. An example of this is drawing up the
dismissed. It is also argued that the regional directors findings should not be CBA and modes of dispute resolution. In contrast, the government intervenes
disturbed on appeal, since he had direct access to the facts. through issuance of permits to strike, cease and desist orders or return to work
Held: Employee should be reinstated. It is shown that employee continued orders.
working as usual way beyond the six-month period of probation. Hence he was
on permanent status at the time he was dismissed. Also, the record does not

Atty. Marlon Manuel
II. EMPLOYER-EMPLOYEE RELATIONSHIP contractor, if any, shall be paid in accordance with the provisions of
this Code.
LABOR CODE In the event that the contractor or sub-contractor fails to pay
[You can skip these provisions as according to Atty. Manuel, theyre stupid the wages of his employees in accordance with this Code, the
definitions, but in case you want to check it: Art. 97 (b, c, e); Art. 167 (f, employer shall be jointly and severally liable with his contractor or
g) Art. 212 (e, f)*] sub-contractor to such employees to the extent of the work performed
under the contract, in the same manner and extent that he is liable to
Art. 106. Contractor or sub-contractor. Whenever an employer employees directly employed by him.
enters into a contract with another person for the performance of the The Secretary of Labor and Employment may, by appropriate
formers work, the employees of the contractor and of the latters sub- regulations, restrict or prohibit the contracting out of labor to protect
the rights of workers established under this Code. In so prohibiting or
*
Art. 97. Definitions. restricting, he may make appropriate distinctions between labor-only
(b) Employer includes any person acting directly or indirectly in the interest of an
contracting as well as differentiations within these types of contracting,
employer in relation to an employee and shall include the Government and all its and determine who among the parties involved shall be considered the
branches, subdivision and instrumentalities, all government-owned or controlled employer for purposes of this Code, to prevent any violation or
corporations and institutions, or organizations. circumvention of any provision of this Code.
(c) Employee includes any individual employed by an employer.
There is labor-only contracting where the person supplying
(e) Employ includes to suffer or permit to work.
workers to an employer does not have substantial capital or
Art. 167. Definition of terms. investment in the form of tools, equipment, machineries, work
(f) Employer means any person, natural or juridical, employing the services of the premises, among others, and the workers recruited and placed by such
employee. person are performing activities which are directly related to the
(g) Employee means any person compulsorily covered by the GSIS under principal business of such employer. In such cases, the person or
Commonwealth Act numbered one hundred eighty-six, as amended, including intermediary shall be considered merely as an agent of the employer
members of the Armed Forces of the Philippines, and any person employed as who shall be responsible to the workers in the same manner and
casual, emergency, temporary, substitute or contractual; or any person
compulsorily covered by SSS under Republic Act numbered eleven hundred sixty- extent as if the latter were directly employed by him.
one as amended.
Art. 107. Indirect employer. The provisions of the immediately
Art. 212. Definitions. preceding Article shall likewise apply to any person, partnership,
(e) Employer includes any person acting in the interest of an employer, directly or association or corporation which, not being an employer, contracts
indirectly. The term shall not include any labor organization or any of its officers or
agents except when acting as employer.
with an independent contractor for the performance of any work, task,
(f) Employee includes any person in the employ of an employer. The term shall not
job or project.
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 Art. 108. Posting of bond. An employer or indirect employer may
connection with any current labor dispute or because of any unfair labor practice if require the contractor or sub-contractor to furnish a bond equal to the
he has not obtained any other substantially equivalent and regular employment.

Atty. Marlon Manuel
cost of labor under contract, on condition that the bond will answer for Filipinas Broadcasting v. NLRC, 287 SCRA 348
the wages due the employees should the contractor or sub-contractor, Power of control regulate or control employees activities or input, subject to
as the case may be, fail to pay the same. employers supervision.
Art. 109. Solidary liability. - The provisions of existing laws to Insular Life v. NLRC, 287 SCRA 476
the contrary notwithstanding, every employer or indirect employer It is axiomatic that the existence of an employer-employee relationship cannot be
shall be held responsible with his contractor or subcontractor for any negated by expressly repudiating it in the management contract and providing
violation of any provision of this Code. For purposes of determining the therein that the employee is an independent contractor when the terms of the
extent of their civil liability under this Chapter, they shall be agreement clearly shows otherwise.
considered as direct employers.
Caurdanetaan Piece Workers Union v. Laguesma, 286 SCRA 401
DEPARTMENT ORDER NO. 3, SERIES OF 2001 (case where the SC uses Art. 280 to prove er-ee relationship)
Revoked D.O. No. 10 Series of 1997 which liberalizes labor-only
Paid wages directly to employee, wielded power of dismissal, and members of
contracting in certain situations.
union did not possess substantial capital which belies claim that they were
independent contractors.
CASES
Maraguinot v. NLRC, 284 SCRA 539
Aurora Land Projects Corp. v. NLRC, 266 SCRA 48
It is settled that contracting out of labor is allowed only in case of job-
Jurisprudence is firmly settled that whenever the existence of an employer-
contracting. For a contactor to be job-contactor, must have tools, equipment,
employee relationship is in dispute, four elements constitute the reliable yard
machinery, work premises, and other materials necessary to his business, or
stick: (a) selection and engagement of the employee; (b) the payment of wages;
substantial capital or investment.
(c) power of dismissal; (d) the employers power of control over the employees
conduct. It is the so-called control test, that is whether the employer controls As labor-only contracting is prohibited, the law considers the person or
or has reserved the right to control the employee, not only as to the result of the entity engaged in the same, a mere agent or intermediary of the direct employer.
work to be done, but the means and methods by which the same is to be
accomplished, that is the most important index of the existence of the employer- Coca-Cola v. NLRC, May 17, 1999
employee relationship. Although janitorial services may be deemed directly related to the principal
business of employer, as with every business, it is deemed unnecessary in the
Algon Engineering v. NLRC, 280 SCRA 188 conduct of the employers principal business. But this rests on the presumption
Employer-Employee relationship question of fact. Liability for loss of materials that the contractor is a legitimate job-contractor such that the employer-employee
in employees custody and subsequent transfer is indicative of employers power relationship between him and the employee cannot be doubted.
of control.

Atty. Marlon Manuel
Corporal v. NLRC, Oct. 2, 2000; GR 129315 Phil. Fuji Xerox v. NLRC, 254 SCRA 294
(again SC uses Art. 280 of Labor Code in determining er-ee relationship) It is wrong to say that if a task is not directly related to the employers business,
Control- required to report daily and observe definite hours of work, not free to or it falls under what may be considered housekeeping activities, the one
accept employment elsewhere. performing the task is a job contractor. The determination of the existence of an
No longer true that membership in SSS is predicated on the existence of employer-employee relationship is defined by law according to the facts of each
employer-employee relationship as the policy now is to encourage even the self- case, regardless of the nature of the activities involved.
employed to become members. Not substantial capital or investment alone which makes one a job
contractor, but also presence of four-fold test in relation to contractor and
AFP Mutual Benefit v. NLRC, 267 SCRA 47 employee. Also the fact that the contractor was providing specific special
Not all that glitters is control. services (radio/telex operator and janitor) to the employer.
In insurance, exclusivity is not indicative of control as the Insurance
Commission prohibits serving in more than one insurance company. Vinoya v. NLRC, Feb. 2, 2000, GR 126586
From the two aforementioned decisions, it may be inferred that it is not enough
Also, the mere fact that an employee is subject to company rules is not to show substantial capitalization or investment in the form of tools, equipment,
indicative of control if it is not shown that it relates to the means and methods of machineries and work premises, among others, to be considered as an
service rendered and not merely to the end result. The significant factor in independent contractor. In fact, jurisprudential holdings are to the effect that in
determining the relationship of parties is the presence or absence of supervisory determining the existence of an independent contractor relationship, several
authority to control the method and details of performance of the service being factors might be considered such as, but not necessarily confined to, whether the
rendered, and to the degree to which the principal may intervene to exercise such contractor is carrying on an independent business; the nature and extent of the
control. Not every form of control that a party reserves to himself over the work; the skill required; the term and duration of the relationship; the right to
conduct of the other party in relation to the services being rendered may be assign the performance of specified pieces of work; the control and supervision
accorded the effect of establishing an ee-er relationship. of the workers; the power of the employer with respect to the hiring, firing and
payment of the workers of the contractor; the control of the premises; the duty to
Neri v. NLRC, 224 SCRA 717 supply premises, tools, appliances, materials and labor; and the mode, manner
The law does not require both substantial capital and investment in the form of and terms of payment.
tools, equipment, machineries, etc. This is clear from the use of the conjunction
or. If the intention was to require the contractor to prove that he has both Lapanday v. CA, Jan 31, 2000; GR 112139
capital and the requisite investment, then the conjunction and should have been It will be seen from the above provisions that the principal (petitioner) and the
used. contractor (respondent) are jointly and severally liable to the employees for their
While these services (These services range from janitorial, security and wages. The joint and several liability of the contractor and the principal is
even technical or other specific services.) may be considered directly related to mandated by the Labor Code to assure compliance with the provisions therein
the principal business of the employer, nevertheless, they are not necessary in the including the minimum wage. The contractor is made liable by virtue of his
conduct of the principal business of the employer. status as direct employer. The principal, on the other hand, is made the indirect

Atty. Marlon Manuel
employer of the contractors employees to secure payment of their wages should 2) Firing termination and disciplinary measures; however, it is not
the contractor be unable to pay them. Even in the absence of an employer- conclusive because the question of employer-employee relationship may
employee relationship, the law itself establishes one between the principal and arise even before the firing occurs. In cases other than an employment
the employees of the agency for a limited purpose i.e. in order to ensure that the contract, such as a managment contract, the fact that an employer has not
employees are paid the wages due them. fired does not negate the existence of employer-employee relationship.
It is clear also from the foregoing that it is only when contractor pays the 3) Wages as defined in Art. 97 (f) of the Labor Code, it must be
increases mandated that it can claim an adjustment from the principal to cover remuneration capable of being expressed in terms of money, payable by
the increases payable to the security guards. The conclusion that the right of the an employer to an employee for work or services to be done or rendered
contractor (as principal debtor) to recover from the principal as solidary co- 4) Control -
debtor) arises only if he has paid the amounts for which both of them are jointly
and severally liable. The element of control pertains not only to the result of the work to be
done but also control over the manner or method to be employed. There is no
Rosewood Processing v. NLRC, 290 SCRA 408 need for the employer to have actually exercised control, as long as he had the
As to wages, the indirect employers liability to the contractors employees opportunity to do so. Consequently, proof must be given reflecting a
extends only to the period during which they were working for the petitioner, and manifestation of control, such as monitoring the work, letting the employee work
the fact that they were reassigned to another principal ends such responsibility. in the employers premises, as long as the company or employer had the ability
The same rule applies to back wages and separation pay, with the added or power to intervene in the work.
qualification that to make the indirect employer liable, there must be a finding of Control is the primary test. This is because hiring, firing, wages may be
fault or conspiracy in the illegal dismissal. done by an entity separate from the entity that controls the employee. For
example, hiring done by head hunters or transfer of ownership of a company.
LECTURE Thus, although the other factors may be absent, as long as there is control there is
an employer-employee relationship.
It is important to determine the employer-employee relationship in order In the AFP case, the Court emphasized that not all that glitters is
to ascertain what rights and obligations of the parties accrue in such a situation. control! This case was very good in qualifying the principle that rules per se are
The Labor Code attempts to define who is an employer and an employee, but not equivalent to control all the time, for control should be over the means and
miserably fails to do so! Thus, in determining existence of employer-employee conduct of the work, not merely over the result. This case ruled that if the rules
relationship the Code cannot be the basis! As such, jurisprudence is essential and pertain only to the end result, this is not tantamount to control.
must be resorted to, in order to determine the existence of such relationship.
It must be borne in mind however that there are some situations,
Jurisprudence provides a FOUR-WAY or FOUR-FOLD TEST to mutations if you could call it, where the control principle is not applicable, for
determine the existence of employer-employee relationship: instance, in a taxi-operator and taxi-driver relationship. However, the three other
1) Hiring a written agreement is not necessary, and is not a conclusive indicators may be used to determine that there is an employer-employee rel.
test because it can be avoided and confused by the use of subcontracting
agreements or other contracts other than employment contracts.

Atty. Marlon Manuel
Also, exclusivity of service is not conclusive in determining control. That intervenes only with the end result)
is, when the employee is prohibited to work, for instance, insurance agents are
required to maintain exclusive company as required by law. Must all three elements be present in order to be considered a labor-only
contractor? According to Court decisions, the primary determination is if one is a
Must all 4 be passed? No. Not all elements need be present. Hence, the Job contractor or not. Hence, the test to determine whether one is a job or labor
best term to use is the FOUR INDICATORS, because FOUR-FOLD TEST only contractor is to look into the elements of a job contractor. If ALL elements
connotes the need for all four elements to be present. of a job contractor is present AND the contractor qualifies as a job contractor
Now, Art. 280 of the Labor Code provides that an employee is deemed then he is a job contractor. Otherwise he is a labor-only contractor.
regular where the employee has been engaged to perform activities which are In many cases the Court looks into the control factor to determine if one
usually necessary or desirable in the usual business or trade of the employer is a job contractor or not. For instance, if the first two elements are present
(UNOD in UTOB). Remember that UNOD in UTOB cannot be used to (sufficient capital and independent business), but control is exercised by the
determine the existence of employer-employee relationship. It is used only to principal, he is not considered a legitimate job contractor and as such is
determine whether an employee is regular or not, and hence it necessarily considered labor-only. Read the Vinoya case to elucidate the matter, particularly
presupposes that an employer-employee relationship already exists. p. 481, second paragraph.
There is also such a thing as economic condition test, where the [ 2nd paragraph of p. 481:
employee may successfully establish an employer-employee relationship by
From the two aforementioned decisions (referring to the Phil. Fuji Xerox
showing documents like the SSS list and payroll.
and Neri cases), it may be inferred that it is not enough to show
Now let us go to contracting. Article 106 of the LC defines Labor- substantial capitalization or investment in the form of tools, equipment,
only contracting. Labor-only contracting is illegal as compared to job machineries and work premises, among others, to be considered as an
contracting which is allowed. How do we determine whether contracting independent contractor. In fact, jurisprudential holdings are to the effect
that in determining the existence of an independent contractor
is labor only or job? relationship, several factors might be considered such as, but not
JOB CONTRACTING LABOR ONLY CONTRACTING necessarily confined to, whether the contractor is carrying on an
independent business; the nature and extent of the work; the skill
- Has sufficient capital OR investment in - Has no substantial capital AND required; the term and duration of the relationship; the right to assign
machinery or equipment (must be investment the performance of specified pieces of work; the control and supervision
substantial, and machinery/equipment of the workers; the power of the employer with respect to the hiring,
must be directly or intended to be firing and payment of the workers of the contractor; the control of the
related to the job contracted ) premises; the duty to supply premises, tools, appliances, materials and
labor; and the mode, manner and terms of payment.]
- Carries on an independent business - Has no independent business
different from the employers
- Undertakes to perform the job under its - Performs activities directly related to What is the liability of the principal to the employee in cases of illegal
own account and responsibility, free the main business of the principal dismissal?
from the principals control (principal

Atty. Marlon Manuel
- Joint and several with the employer, but with the right to reimbursement III. CLASSES OF EMPLOYEES
from the employer contractor
- Wage differentials only to the extent where the employee performed the LABOR CODE
work under the principal
Art. 280. Regular and casual employment. The provisions of
- Separation pay and backwages, only when the principal has some
written agreement to the contrary notwithstanding and regardless of
relation to the termination (such as when he conspired to terminate) the oral agreements of the parties, an employment shall be deemed to
- The ruling in Rosewood Processing is an obiter and made an unjustified be:
interpretation of Art. 109 of the LC. Rosewood held that monetary awards - REGULAR where the employee has been engaged to perform
given in relation to illegal dismissal is the direct liability of the contractor activities which are usually necessary or desirable in the usual
alone unless the principal conspired with the contractor. However, Art. 109 business or trade of the employer
makes the principal liable in illegal dismissal whether or not there was fault - except where the employment has been fixed for a specific
on his part. PROJECT or undertaking, the completion or termination of which has
been determined at the time of the engagement of the employee
- or where the work or service to be performed is SEASONAL in
nature and the employment is for the duration of the season.
An employment shall be deemed to be CASUAL if it is not covered by the
preceding paragraph;
- provided,
- that any employee who has rendered at least one year of
service,
- whether such service is continuous or broken,
- shall be considered a REGULAR employee with respect to the
activity in which he is employed and his employment shall
continue while such activity exists.
Art. 281. Probationary employment.

Probationary employment
- shall not exceed six months from the date the employee started
working,
- unless it is covered by an apprenticeship agreement stipulating
a longer period.

Atty. Marlon Manuel
The services of an employee who has been engaged on a probationary The primary standard, therefore, of determining a regular employment is
basis may be terminated the reasonable connection between the particular activity performed by the
- for a just cause or employee in relation to the usual business or trade of the employer. The test is
- when he fails to qualify as a regular employee whether the former is usually necessary or desirable in the usual business or trade
a) in accordance with reasonable standards of the employer. The connection can be determined by considering the nature of
b) made known by the employer to the employee at the time of the work performed and its relation to the scheme of the particular business or
his engagement. trade in its entirety. Also, if the employee has been performing the job for at least
An employee who is allowed to work after a probationary period shall one year, even if the performance is not continuous or merely intermittent, the
be considered a regular employee. law deems the repeated and continuing need for its performance as sufficient
evidence of the necessity if not indispensability of that activity to the business.
CASES Hence, the employment is also considered regular, but only with respect to such
activity and while such activity exists.
De Leon V. NLRC, 176 SCRA 615 What determines whether a certain employment is regular or casual is
De Leon was employed by La Tondena as a painter and on the agreement that he not the will and word of the employer, to which the desperate worker often
is considered a casual employee. He was made to clean and oil machines and accedes, much less the procedure of hiring the employee or the manner of paying
other odd jobs when he had no painting job. After more than a year of service, he his salary. It is the nature of the activities performed in relation to the particular
requested to be included in the payroll of regular workers. La Tondena business or trade considering all circumstances, and in some cases the length of
responded by dismissing him. time of its performance and its continued existence.
The Labor Arbiter found that de Leon was illegally dismissed and, in
light of the facts, is considered a regular employee. NLRC reversed. Petition for Aurora Land vs. NLRC, 266 SCRA 48
review with the Supreme Court. Honorio Dagui was hired by Dona Aurora Suntay Tanjangco in 1953 to take
Held: Petition granted, employer must reinstate De Leon as a regular charge of the maintenance and repair of the Tanjangco apartments and residential
maintenance man. buildings. He was to perform carpentry, plumbing, electrical and masonry work.
Upon the death of Dona Aurora Tanjangco in 1982, her daughter, petitioner
Contrary agreements notwithstanding, an employment is deemed regular Teresita Tanjangco Quazon, took over the administration of all the Tanjangco
when the activities performed by the employee are usually necessary or desirable properties. On June 8, 1991, his services was terminated. He filed a complaint
in the usual business or trade of the employer. Not considered regular are the so- for illegal dismissal with the Labor Arbiter.
called project employment the completion or termination of which is more or
less determinable at the time of employment, such as those employed in Petitioners insist that Dagui had never been their employee. Since the
connection with a particular construction project, and seasonal employment establishment of Aurora Plaza, Dagui served therein only as a job contractor.
which by its nature is only desirable for a limited period of time. However, any Dagui had control and supervision of whoever he would take to perform a
employee who has rendered at least one year of service, whether continuous or contracted job. On occasion, Dagui was hired only as a tubero or plumber as
intermittent, is deemed regular with respect to the activity he performed and the need arises in order to unclog sewerage pipes. Every time his services were
while such activity actually exists. needed, he was paid accordingly. It was understood that his job was limited to

Atty. Marlon Manuel
the specific undertaking of unclogging the pipes. In effect, petitioners would like be removed except for valid cause because his services were UNOD in UTOB
the Court to believe that Dagui was an independent contractor, particularly a job and his employment had lasted for 5 years.
contractor, and not an employee of Aurora Plaza. DOLE Regional Director ruled in favor of DA. Secretary of Labor
Held: An employer-employee relationship exists. Section 8, RuleVIII, Book sustained. Office of the President dismissed BS appeal and affirmed SOL
III of the Implementing Rules and Regulations of the Labor Code provide the decision.
essential requisites before one is considered a job contractor. Honorio Dagui Held: Since the entire purpose behind the development of legislation culminating
earns a measly sum of P180.00 a day (latest salary). Ostensibly, and by no stretch in the present Art. 280 of the Labor Code clearly appears to have been, as already
of the imagination can Dagui qualify as a job contractor. observed, to prevent circumvention of the employees right to be secure in his
Whenever the existence of an employment relationship is in dispute, four tenure, the clause in said article indiscriminately and completely ruling out all
elements constitute the reliable yardstick: written or oral agreements conflicting with the concept of regular employment as
the selection and engagement of the employee (hiring); defined therein should be construed to refer to the substantive evil that the Code
the payment of wages (wages); itself has singled out: agreements entered into precisely to circumvent security of
the power of dismissal (firing); and tenure. It should have no application to instances where a fixed period of
the employers power to control the employees conduct (control). employment was agreed upon knowingly and voluntarily by the parties, without
any force, duress or improper pressure being brought to bear upon the employee
It is the so-called control test, whether the employer controls or has and absent any circumstances vitiating his consent, or where it satisfactorily
reserved the right to control the employee not only as to the result of the work to appears that the employer and employee dealt with each other on more or less
be done but also as to the means and methods by which the same is to be equal terms with no moral dominance whatever being exercised by the former
accomplished, which constitute the most important index of the existence of the over the latter. Unless thus limited in its purview, the law would be made to apply
employer-employee relationship. An employer-employee relationship exists to purposes other than those explicitly stated by its framers; it thus becomes
where the person for whom the services are performed reserves the right to pointless and arbitrary, unjust in its effects and apt to lead to absurd and
control not only the end to be achieved but also the means to be used in reaching unintended consequences.
such end.
There was a valid fixed term employment contract. DAs employment
Brent School vs. Zamora, 181 SCRA 702 was terminated upon the expiration of his last contract with BS on 16 July 1976
Brent School, Inc. (BS) employed Doroteo R. Alegre (DA) as athletic without necessity of any notice.
director. The employment contract fixed a specific term for its existence: 5 years Concurring and dissenting opinion (J. Sarmiento): I cannot liken employment
(18 July 1971 to 17 July 1976). 3 subsequent subsidiary agreements reiterated contracts to ordinary civil contracts in which the relationship is established by
the same terms and conditions stipulated in the original contract. stipulations agreed upon.
20 April 1976. DA received copy of report filed by BS with DOLE
advising of the termination of his services effective 16 July1976. The ground: International Catholic Migration Commission v. NLRC, 169 SCRA 606
completion of contract, expiration of the definite period of employment. DA Petitioner engaged the services of private respondent Galang as a
protested, arguing that he had acquired regular employment status and could not probationary cultural orientation teacher for a probationary period of 6 months.

Atty. Marlon Manuel
Three months thereafter, she was informed, orally and in writing , that her right to select his employees that the employer may set or fix a probationary
services were being terminated for her failure to meet the prescribed standards of period within which the latter may test and observe the conduct of the former
petitioner as reflected in the performance evaluation of her supervisors during the before hiring him permanently.
teacher evaluation program she underwent along with other newly-hired Art 281 of the LC gives ample authority to the employer to terminate a
personnel. probationary employee for a just cause or when he fails to qualify as a regular
She subsequently filed a complaint for illegal dismissal, unfair labor employee in accordance with reasonable standards made known by the employer
practice and unpaid wages against petitioner with the then Ministry of Labor and to the employee at the time of his engagement. There is nothing under Art 281 of
Employment, praying for reinstatement with backwages, exemplary and moral the LC that would preclude the employer from extending a regular or permanent
damages. appointment to an employee once the employer finds that the employee is
The labor arbiter dismissed the complaint, but awarded payment for the qualified for regular employment even before the expiration of the probationary
unexpired portion of the agreed period. NLRC affirmed. Petitioner questions the period. Conversely, if the purpose sought by the employer is neither attained nor
award. attainable within the said period, Art 281 does not likewise preclude the
employer from terminating the probationary employment on justifiable causes.
Held: For the petitioner.
The dissatisfaction of the petitioner over the performance of private
A probationary employee, as understood under Art 281 of the Labor respondent Galang is a legitimate exercise of its prerogative to select whom to
Code, is one who is on trial by an employer, during which the employer hire or refuse employment for the success of its program or undertaking. More
determines whether or not he is qualified for permanent employment. A importantly, Galang failed to show that there was unlawful discrimination in the
probationary employment is made to afford the employer an opportunity to dismissal.
observe the fitness of a probationer while at work, and to ascertain whether he
will become a proper and efficient employee. The word probationary, as used Mercado vs. NLRC, 201 SCRA 332
to describe the period of employment, implies the PURPOSE of the term or Petitioners are farm workers who are contending that they are regular farm
period, but not its length. workers of Cruz and other respondents and thus, are entitled to benefits like
Being in the nature of a trial period, the essence of a probationary overtime pay, holiday pay, service incentive leave, ECOLA, 13 th month pay, etc.
period of employment fundamentally lies in the purpose or objective sought to be They claim that they have been working for 12 hours a day the whole
attained by both the employer and the employee during said period. The length year round for almost 19 years (others, for 30 years).
of time is immaterial to determining correlative rights of both in dealing with
each other during said period. While the employer observes the fitness, propriety Respondents deny that petitioners are regular workers since they are only
and efficiency of a probationer to ascertain whether he is qualified for permanent hired to work for six months (during the harvesting of sugar canes) a year and for
employment, the probationer, on the other, seeks to prove to the employer that he the rest of the year, petitioners are allowed to seek employment elsewhere.
has the qualifications to meet the reasonable standards for permanent Petitioners contend that the proviso in the second paragraph of Art. 280
employment. is applicable to their case, and that the Labor Arbiter should have considered
The employer has the right or is at liberty to choose who will be hired them regular by virtue of said proviso.
and who will be denied employment. In that sense, it is within the exercise of the

Atty. Marlon Manuel
Held: They are seasonal workers. Thus, while petitioners mode of compensation was on a per piece basis, the
The first paragraph of Art 280 answers the question of who are regular status and nature of their employment was that of regular employees. Not only
employees. It states that regardless of any written or oral agreement to the did petitioners labor under the control of the respondents as their employer,
contrary, an employee is deemed regular where he is engaged in necessary or likewise did petitioners toil throughout the year with the fulfillment of their quota
desirable activities in the usual business or trade of the employer, except for as supposed basis for compensation.
project employees. A project employee has been defined to be one whose
employment has been fixed for a specific project or undertaking, the completion Caurdanetaan Piece Workers Union v. Laguesma, 286 SCRA 401
or termination of which has been determined at the time of the engagement of the Petitioner union has 92 members working as cargadores of Corfarm. They are
employee, or where the work or service to be performed is seasonal in nature and paid on a piece rate basis. They unload, load and pile sacks of palay from the
the employment is for the duration of the season. warehouse to the cargo trucks and from the truck to the place delivered. Union
filed a petition for certification election, which Corfarm opposed on the ground
The second paragraph demarcates as casual employees, all other that there is no e-e relationship, and that there is only a contractual relationship.
employees who do not fall under the definition of the preceding paragraph.
Policy Instruction No 12 discloses that the concept of regular and casual Held: The workers are regular employees. To determine the existence of an e-e
employees was designed to put an end to casual employment in regular jobs, relation. The four fold test is to be applied: (1) the power to hire, (2) payment of
which has been abused by many employers to prevent so-called casuals from wages, (3) the power to dismiss, (4) the power of controlthe last being the most
enjoying the benefits of regular employees or to prevent casuals from joining important element. Prior to his ruling on Corfarms motion for reconsideration,
unions. The same instructions show that the proviso in the second paragraph was Laguesma ruled as follows:
not designed to stifle small scale businesses nor to oppress agricultural land the existence of an independent contractor relationship is generally
established criteria: (1) whether the contractor is carrying on an independent
owners to further the interests of laborers, whether agricultural or industrial. business; (2) the nature and extent of the work; (3) the skill required; (4) the
What it seeks to eliminate are abuses of employers against their employees and term and duration of the relationship; (5) the right to assign the performance
not, as petitioners would have us believe, to prevent small scale businesses from of a specified piece of work; (6) the control and supervision over the workers;
engaging in legitimate methods to realize profits. Hence the proviso is applicable (7) the payment of the contractors workers; (8) the control of premises; (9)
only to the employees who are deemed casuals but not to the project employees the duty to supply the premises, tools and appliances, materials and
nor the regular employees treated in paragraph one of Art 280. laborers, and the mode and manner and terms of payment.
Corfarm, failed to show by clear and convincing proof that the union has
Labor Congress vs. NLRC, 290 SCRA 509 the substantial capital or investment to qualify as an independent contractor
Three factors lead the Court to conclude that petitioners, although piece-rate under the law. The premises, equipment, and paraphernalia are all supplied by
workers, were regular employees of respondent Empire Foods Corp. First, as to Corfarm. It is only the manpower or labor force which the alleged contractor
the nature of petitioners tasks, their job of repacking snack food was necessary supplies, suggesting the existence of a labor only contracting scheme, which is
or desirable in the usual business of respondents, who were engaged in the prohibited by law.
manufacture and selling of such food products; second, petitioners worked for The petitioners members worked as cargadores, which is directly
respondents throughout the year, their employment not having been dependent on related, necessary and vital to the operations of Corfarm. Their tasks were
a specific project or season; and third, the length of time that petitioners worked. essential in the usual business of Corfarm. The lack of control or the existence of

Atty. Marlon Manuel
waiting time (for the next batch of sacks to load/unload) does not denigrate the Moreover the SC agreed with the labor arbiter that the fact the employee
regular employment of these workers. The continuity of employment is not the was not required to report at a fixed hour or to keep fixed hours of work does not
determining factor, but rather whether the work of the laborer is part of the detract from her status as a regular employee. As petitioner itself, admits, Quinta
regular business or occupation of the employer. was a managerial employee and therefore not covered by the Labor Code
provisions on hours of work.
Maraguinot vs. NLRC, 284 SCRA 539 Whether ones employment is regular is not determined by the number of
VIVA insists that the petitioners, who are cameramen, are project employees of hours one works, but by the nature of the work and by the length of time one has
associate producers who, in turn, act as independent contractors. It is settled that been in that particular job.
the contracting out of labor is allowed only in the case of job contracting.
Assuming that the associate producers are job contractors, they then must be Highway Copra Traders vs. NLRC, 293 SCRA 350
engaged in the business of making motion pictures. As such to be a job contractor [A]n employment is deemed regular when the activities performed by the
under the preceding description, associate producers must have tools, equipment, employee are usually necessary or desirable in the usual business or trade of the
machinery, work premises and other necessary materials to make motion employer. The nature of his work as a general utility man was definitely
pictures. However the associate producers have none of these. necessary and desirable to petitioners business of trading copra and charcoal and
The associate producers of VIVA cannot be considered labor-only regardless of the length of time. The argument of the respondent was only
contractors as they did not supply, recruit nor hire the workers. engaged for a specific task, the completion of which is resulted in the cessation
The employer-employee relationship between petitioners and VIVA can of his employment is untenable. By specific project or undertaking, Article 280
be further established by the control test i.e. the employers power to control of the Labor Code contemplates an activity which is not commonly or habitually
the employees conduct, the most important element is the employers control of performed or such type of work which is not done on a daily basis but only for a
the employees conduct, not only as the result of the work to be done, but also as specific duration of time or until completion in which case the services of an
to the means and methods to accomplish the same. VIVAs control is evident in employee are necessary and desirable in the employers usual business only for
its mandate that the end result must be quality acceptable to the company. The the period of time it takes to complete the project.
means and methods to accomplish the result are likewise controlled by VIVA.
Philippine Federation of Credit Cooperatives vs. NLRC, Dec. 11, 1998
International Pharmaceuticals, Inc. vs. NLRC, 287 SCRA 213 A probationary employee who is engaged to work beyond the probationary
Quinta was employed as Medical Director for the development of the companys period of 6 months or for any length of time set forth by the employer, shall be
herbal medicine department. Their contract had a period of one year. After the considered a regular employee.
contract, she was allowed to continue work until she was terminated.
Villa vs. NLRC, 284 SCRA 105
Held: Quinta became a regular employee. The SC held that although their By entering into such contract of project employment, an employee is deemed to
contract was valid, the fact that after its expiration, petitioner decided to continue understand that his employment is coterminous with the project. Project
her services, she is now entitled to security of tenure. employment contracts are not lopsided agreements in favor of one party. Thus,
the fact that workers work under different project employment contracts for

Atty. Marlon Manuel
several years cannot be made a basis to consider them as regular employees, for employment, as long as the activities are UNOD in UTOB, such employee is
they remain project employees regardless of the number of projects in which already regular.
they have worked. Length of service is not the controlling determinant of the
employment tenure of a project employee. PAL vs. NLRC, 298 SCRA 430
The janitorial service agreement is not a labor-only contracting. There is labor
San Miguel Corporation vs. NLRC, 297 SCRA 277 only contracting where the person supplying workers to an employer does not
An employment is deemed regular when the activities performed by the have substantial capital or investment in the form of tools, equipment, machinery,
employee are usually necessary or desirable in the usual trade or business of the work premises, among others and the workers recruited and placed by such
employer even if the parties enter into an agreement stating otherwise. But persons are performing activities that are directly related to the principal business
considered not regular are the project employment the termination of which is of such employer.
more or less determinable at the time of employment, and seasonal employment Stellar was not engaged in labor only contracting because it has sufficient
which by its nature is only for one season of the year the employment is limited capital form of tools and equipment, like vacuum cleaners, polishers, and
for the duration of the season. Nevertheless, an exception to the exception is substantial capitalization as proven by its financial statements. STELLAR even
made: any employee who has rendered at least one year of service whether has other clients like San Miguel Corporation and etc. Thus PAL is not the
continuous or intermittent with respect to the activity he performed and while employer of the janitors.
such activity actually exists, must be deemed regular.
It must be noted that the respondent was employed only for seven Philippine Tobacco Flue-Curing Corp. vs. NLRC, 300 SCRA 37
months. First he was employed for repair and upgrading of furnaces, upon They are entitled to separation pay. Seasonal workers who work from time to
completion of such , he was terminated. A few days after, two other furnaces time and are temporarily laid off during off-season are not separated from service
required draining/cooling down and emergency repair. Thus he was hired again. in said period, but are merely considered on leave until re-employed.
Upon completion of such second undertaking, he was likewise terminated. He Since they are repeatedly rehired, such is sufficient evidence of the
was not hired for a third time and his two engagements taken together did not necessity and indispensability of services, and is equated to a regular employee.
total one full year. Clearly, he was hired for a specific project that was not within On the contrary, when an employee is rehired every year but may work with
the regular business of the corporation. another, one is not seasonal but a project employee and would naturally end upon
the completion of each project.
Romares vs. NLRC, 294 SCRA 411
There are two kinds of regular employees: those who are engaged to perform The doctrine in Mercado vs. NLRC is inapplicable to the case at bar
activities which are UNOD in UTOB, and those casual employees who have because in Mercado, the seasonal employees were not in the employers regular
rendered at least one year of service, whether continuous or broken, with respect employ. They performed different phases of agricultural work in a given year,
to the activity in which they are employed. and during such periods they could work for others, which they did. They were
free to contract with others even if they were presently working for the employer.
The scheme of rehiring him for a two to three month contract on a
temporary job as a mason is a clear circumvention of the employees right to
security of tenure and to other benefits. Despite the provisions of the contract of

Atty. Marlon Manuel
Rather, the case at bar is pretty much similar to the case of Gaco vs. LECTURE (PART ONE)
NLRC, where the Court likewise ruled that Gaco was a regular employee, due to
his repeated rehiring every season, spanning over fifteen years. It is important to distinguish the classes in order to apply the proper rules
in labor standards, or apply the security of tenure provisions (illegal termination).
Bernardo vs. NLRC, July 12, 1999 It is also important in labor relations, because in a certification election, the
Those who have worked beyond worked beyond 6 months and whose contracts definition of a bargaining unit depends on the classes of employee agreed upon
have been renewed are already regularized. by the parties allowed to join.
The accommodation argument does not change the nature of their The general rule is that all employees are regular employees. The
employment. An employee is regular because of the nature of work and the standard test is that there must be a reasonable connection between the job and
length of service, not because of the mode or even the reason for hiring them. the employers business.
The character of employment is determined not by stipulations in the contract but Regular employee:
by the nature of the work performed. Otherwise no employee can become regular
by the simple expedient of incorporating this condition in the contract of 1. Performs tasks which are UNOD in UTOB; and the word usually is used
employment. Where an employee has been engaged to perform activities which because it does not mean they always have to perform tasks which are
are usually necessary or desirable in the usual business of the employer, such necessary or desirable.
employee is deemed a regular employee and is entitled to security of tenure 2. It also refers to casual employees who have rendered at least one year of
notwithstanding the contrary provisions of his contract of employment. service, whether continuous or broken, with respect to the activity they are
employed.
Imbuido vs. NLRC, GR 114734, 329 SCRA 357 3. Probationary or term employees are also considered regular once they are
The principal test for determining whether an employee is a project employee or allowed to work beyond the term or duration of the project.
a regular employee is whether the project employee was assigned to carry out a
specific project or undertaking, the duration and scope of which were specified at 4. Project employee who has been continuously rehired (Maraguinot case)
the time the employee was engaged for that project. A project employee is one becomes regular for the specific job continuously rehired for
whose employment has been fixed for a specific project or undertaking, the a. The employee is continuously rehired from project to project even with
completion or termination of which has been determined at the time of the gaps of time in between
engagement of the employee or where the work or service to be performed is b. Task is UNOD in UTOB, or else the project ee is considered only a
seasonal in nature and the employment is for the duration of the season. casual ee
In the recent case of Maraguinot, Jr. v. NLRC, we held that [a] project c. Rehired for the same task or nature of task.
employee or a member of a work pool may acquire the status of a regular
A project employee converted to regular employee is still not paid for the
employee when the following concur: 1) There is a continuous rehiring of project
period he does not work. But the employer is required to hire him when the
employees even after [the] cessation of a project; and 2) The tasks performed by
next project requires he particular job he does, or else, the employer is guilty
the alleged project employee are vital, necessary and indispensable to the usual
of illegal termination.
business or trade of the emplyer.

Atty. Marlon Manuel
- Rehired whenever their services are required (e.g. farmworkers)

Project employee: - At the arrival of the season must be rehired, or else the er is guilty of
Those employed for a fixed project or specific task, the completion of which has illegal termination
been determined and made known to the ee at the time of engagement. Two - Allowed to seek work elsewhere while off-season (Mercado case is
kinds: clarified by the Phil Tobacco case).
1. Tasks which are UNOD in UTOB
2. Tasks which are not UNOD in UTOB Probationary Employee:
a. The job must be distinct from the totality of the ers business Hired for 6 months to determine qualification, or capacity as a regular employee,
b. The project must be definite as to its completion though an ee can become regular right away without going through probation
c. Employment terminates with the project, regardless of the period - The employee is given the standards at the time of engagement
(employer must explain, not merely giving document)
A Workpool is not necessary in order to convert the project ee into regular. But
its existence may signify that the proj. ee has become regular if there is - General rule is that it is limited to 6 months, except
continuous rehiring. a. When the qualifications cannot be determined during the 6 months, as
part of company policy
Fixed Term: b. When the ee is the one who asked for the extension
The job is assigned a specific date of expiration even if the job is considered
UNOD in UTOB. The important aspect is that the job is time bound. Casual Employee:
Brent School ruling: requirements for a valid FT employment: - One who does not fall under the definition of a regular, project, seasonal
a. The parties dealt on equal footing (bargaining position) or fixed employee
b. The contract is reasonable, not oppressive - The job is not UNOD in UTOB
c. The employee entered into it voluntarily - Casual converted to regular after rendering more than a year of service
with respect to that activity employed, whether continuous or broken
d. There is no intent to circumvent labor laws
- If broken but has served more than one year already, during the intervals
e. Usually apply to teachers; sadly, it is used in other types of jobs and has been he does not have work due to temporary lay-off, he can look for another
subject of abuse job, but not during the times the er needs him.
- Any doubts must be resolved in favor of regular employment (PFCCI case)
Seasonal Employee:
Hired for a specific period of time during the year, and may be UNOD in UTOB

Atty. Marlon Manuel
LECTURE (PART TWO) despite the termination of the project, he is still made to work. It negates the
essence of project employment. It shows the employees work is needed not
Types of employment only in the specific project.
Remember that the presumption is in favor of regular employment. It 2. Within the project itself, and before the completion of the project, the
may be shown that one is not a regular employee, but proof must be given to employee is given tasks not related at all to the project. Giving the employee
show this. additional work negates again the essence of project employment. It shows
How to determine regular employment? The nature of the work is UNOD again the need of his services is not limited to the project. Even if the extra
in UTOB of the employer, and if a casual is employed for more than one year, he work is not UNOD in UTOB to the main business, he is converted to a
is considered an employee. regular employee.
Probationary employment: 3. The case of Maraguinot. Under multiple succeeding projects, can you have
gaps between each project, and the employee still be converted to regular
probe period is 6 months for the employer to determine the eligibility of the status? YES. But only when the project employee is rehired continuously,
employee. But the period may be shortened or extended. Probe converts to and for the same nature of task. There is a pattern showing that UNOD in
regular after the period imposed has lapsed, and the employee continues to work. UTOB.
It implies that the employee has passed and is eligible for regular employment.
Also, if the terms and conditions of employment are not clearly provided by the Remember that the one year rule in the Code applies only to casual
employer, the standards are not clear then the employee is deemed a regular employment, not to project nor seasonal employees.
employee. This is because the employee has no knowledge of what standards he
or she must meet, and so this should not work to his or her prejudice. If a project employee is converted to a regular employee, when can he
reckon his conversion to regular employment? At the start of the project?
Project employment: According to Sir, there is no clear answer to that. Two possible options: One is to
say that regular employment starts from day one, because it can be analogous to
Project employee is one who works for a specific project or undertaking which is the ground of psychological incapacity under the Family Code. Theoretically it
separate and distinct from the main business of the employer. E.g. the Ateneo should have existed from the very start, even if it manifests much later. Hence,
Law School wants to computerize its records. The employees hired to do such are one theory is that from day one, the work done is UNOD in UTOB, thus regular
project employees. But remember the project or undertaking MAY be within the employee from day one.
regular business of the employer. That is, it may be necessary or desirable to the
main business. But it is considered a project because it is distinguishable as The second option is after showing a series of rehiring, a pattern, only
separate from the main business. then will conversion occur. But it is hard to determine what exact date the regular
employment will be counted should it be counted from the start of the third
There are three instances when the project employee is converted into a project? Or from the second project? Etc. etc. Again, there is no clear-cut
regular employee. formula.
1. A project employee may be converted to regular status when he was
employed for a specific project, the completion of which is determined, but

Atty. Marlon Manuel
Casual Employment: compel the employee to report for work for the next undertaking. If the employee
A casual employee is one whose employment is not UNOD in UTOB, but his is working elsewhere, then the employer can deem the employee as refusing to
term of employment is not made known at the time of the employment, unlike a work, a ground for disciplinary action and termination.
project ee. A casual converts to regular ee if after one year of service, whether REMEMBER: A casual employee becomes regular after completion of
continuous or broken, he still works for the employer. The length of time is an service of one year for the SAME task or nature of tasks. He must complete the
indication that his job is UNOD in UTOB. one year period for the SAME tasks/nature of tasks. So lets say for the second
undertaking he was hired as a driver, but in the first undertaking he was hired as
a waiter, then there is no conversion. The Principle in project or seasonal
Now what if this scenario happens: employment that once a project/seasonal employee is made to do tasks other than
hired hired again hired again
or outside of the work for which he was hired makes him a regular employee,
DOES NOT apply to casual employment.
6 months vacancy 7 months vacancy
6 months
* The codal provisions are very important especially for bar purposes. The cases
are interpretations of the provisions. You must know the provisions first before
regular the cases.
In this case, the employee becomes regular after one year, that is, under
Seasonal Employment:
the second undertaking. Hence he is deemed a regular employee, and so he may
demand to be rehired when there is another available undertaking, even though In this case, conversion occurs similar to project employees. When they
the intervals between jobs may stretch to months. During the second vacancy, the are continuously rehired for the same task/nature of task, they become regular
employee is still considered a regular employee, but since there is no job to do, employees. During off-season, they are temporarily laid off, without pay, but they
the Court considers this a temporary lay-off without pay. Hence he is still a are still considered regular employees.
regular employee who follows the no work, no pay rule. So during off-season, the relationship is still continuous. Regular
The same principle temporary lay off applies to a project and seasonal seasonal employees. Sir uses this term only because the Court used it. But the
employee/employment, who acquires regular employment. Such employee can correct term should be seasonal employees converted to regular employees.
demand that he be rehired for the next casual work. If the company hires Anyway, the hiring must be for the same task/nature of task. If not, there is no
someone else, then it is guilty of illegal termination illegally terminating the pattern for UNOD in UTOB. Except in cases where the employer hires an all
employee converted to regular employee. around person. Obviously, not the same nature of task. But there is still that
pattern showing his services are UNOD in UTOB. So he becomes regular as
During the period that he is temporarily laid off, the worker may seek
well. In the Phil. Tobacco case, the workers were hired season after season after
work elsewhere. This will not negate his conversion to a regular employee in the
season. So obviously they were regular employees.
first company.
Remember our discussion awhile ago, regarding project employees, as to
After the one year, the employee has the right to demand that he be
when to reckon an employee to be regular once there is conversion? The same
rehired for succeeding undertakings. Conversely, management can demand and

Atty. Marlon Manuel
two scenarios apply to seasonal employees. There is also no clear-cut answer to Is the Brent doctrine applicable to any situation? No. It will NOT apply
seasonal employees. But it is easier to defend the first scenario that from day one to a factory and a factory worker. Remember that the people involved in Brent
they were regular, it became manifest only after some time. Use the principle of were the school and an athletic director.
resolving all doubts in favor of labor. Otherwise it will be difficult to defend the Similar to a probationary/project/seasonal employee being made to work
time of conversion. beyond the period/project/season, a fixed term employee made to work beyond
Remember that once an employee is converted to a regular employee, he the fixed term should be considered regular, because it negates the essence of
should enjoy or derive all benefits covered by the CBA that is given to regular fixed term employment. Even if the parties bargained on equal footing. Second,
employees. Now, look at the codal provision. In effect, it says that if one is not is repeatedly rehiring the fixed term employee through fixed term employment
regular, he is project/seasonal. If he is not project/seasonal, he is casual. But there contracts. The element of circumvention in this case is clearly shown. It lacks
is another type of employment created by jurisprudential rule: one of the conditions under the Brent doctrine that the fixed term employment
must be done in good faith. Hence in the second situation the employee should be
deemed regular as well.
Fixed Term employment:
Remember that it is not a general rule that you can fix the term of
Unlike project, where what is fixed is the term of completion of the employment. It is an exceptional case that must be applied in exceptional
project, in Fixed Term, the PERIOD of employment is fixed. The Court clarified circumstances. The general rule is one is a regular employee. Remember the rule
that Fixed term is allowed only if: in statutory construction that exceptions to the general rule must be construed
it was entered into by both parties negotiating on a more-or-less equal strictly. So if you are not sure whether the employee falls under one of the
bargaining position exceptional circumstances, then he should be deemed regular. Is there a problem
the worker should not be coerced with that? There is none because an employer can hire an employee as regular
starting from day one.
the worker should not be deprived of his workers rights as an employee
it must be a good faith agreement, not entered into by the employer to
circumvent the law on regular employment
This is the Brent ruling. The Court upheld this pursuant to provisions on
the Civil Code, that one must respect the terms of a contract entered into by the
parties. Is this correct? Partly yes, essentially no. Yes the CC contains the
provisions recognizing the parties rights to fix the terms of a contract. But the
CC itself says that for employment relationship it is not the CC that applies but
rather the Labor Code. For a contract of employment is not an ordinary contract-
it is so vested with public interest that it should be covered by special provisions.
Even the CC points us back to special laws.

Atty. Marlon Manuel
IV. RIGHT TO SELF-ORGANIZATION - to engage in lawful concerted activities for the same purpose,
or for their mutual aid and protection, subject to the provisions of
A. CONCEPT AND SCOPE Art. 264 of this Code.
Art. 277(c). Miscellaneous provisions.
LABOR CODE ANY employee,
- whether employed for a definite period or not,
Art. 243. Coverage and employees right to self-organization. - shall, beginning on his first day of service,
ALL persons employed in: - be considered an employee
- commercial, industrial, and agricultural enterprises, and - for purposes of membership in any labor union.
- in religious, charitable, medical or educational institutions,
whether operating for profit or not Art. 212. Definitions.
shall have the right to (e) Employer includes
- self organization and to - any person
- form, join, or assist labor organizations of their own choosing - acting in the interest of an employer,
for purposes of collective bargaining. - directly or indirectly.
The term shall not include
- Ambulant, intermittent and itinerant workers,
- any labor organization
- Self-employed people, - or any of its officers or agents
- Rural workers, and - EXCEPT when acting as employer.
- Those without any definite employers
MAY form labor organizations for their mutual aid and protection. (f) Employee includes
- any person
Art. 246. Non-abridgement of right to self-organization. - in the employ of an employer.
IT shall be unlawful to The term shall not be limited to the employees of a particular
- restrain, employer, unless this Code so explicitly states.
- coerce, It shall include
- discriminate against or - any individual whose work has ceased
- unduly interfere - as a result of or in connection with
with employees and workers in their exercise of the right to self- - any current labor dispute
organization. - or because of any unfair labor practice
Such right shall include the right to
- IF he has not obtained any other substantially equivalent and
- form, join, or assist labor organization for the purpose of
regular employment.
collective bargaining through representatives of their own
choosing, and

Atty. Marlon Manuel
OMNIBUS RULES, BOOK V RULE I, SEC. 1 (F,G) RULE II institutions whether operating for profit or not, shall have the right to
self-organization and to form, join or assist labor organizations for
RULE I purposes of collective bargaining; provided, however, that supervisory
Definition of Terms employees shall not be eligible for membership in a labor organization
of the rank-and-file employees but may form, join or assist labor
SECTION 1. Definition of terms. organizations for purposes of collective bargaining if they are a
(f) "Employer" includes any person acting in the interest of an national or a country which grants the same or similar rights to Filipino
employer, directly or indirectly. The term shall not include any workers, as certified by the Department of Foreign Affairs.
labor organization or any of its officers or agents except when For the purpose of this Section, any employee, whether employed for a
acting as employer. definite period or not, shall, beginning on the first day of his service,
(g) "Employees" includes any person in the employ of a particular be eligible for membership in any labor organization
employer. The term shall not be limited to the employees of a
particular employer, unless the Code so explicitly states. It shall SECTION 3. All other workers including ambulant, intermittent and
include any individual whose work has ceased as a result of or in other workers, the self-employed, rural workers and those without any
connection with any current labor dispute or because of any definite employers may form workers associations for their mutual and
unfair labor practice if he has not obtained any other protection and for other legitimate purposes.
substantially equivalent and regular employment.
B. SPECIAL GROUPS OF EMPLOYEES
RULE II
Coverage of the Right to Self-Organization LABOR CODE
SECTION 1. Policy. It is the policy of the State to promote the free 245. Ineligibility of managerial employees to join any labor
and responsible exercise of the right to self-organization through the organization; right of supervisory employees.
establishment of a simplified mechanism for the speedy registration of Managerial employees are not eligible
labor organizations and workers associations, determination or - to join, assist or form
representation status, and resolution of intra- and inter-union - any labor organization.
disputes. Only legitimate or registered labor organization of workers Supervisory employees shall not be eligible
associations shall have the right to represent their members for - for membership in a labor organization of the rank-and-file
collective bargaining and other purposes. employees
- but may join, assist or form separate labor organizations of
SECTION 2. Who may join labor organizations. All persons their own.
employed in commercial, industrial and agricultural enterprises,
including employees of government-owned or controlled corporations 212. Definitions.
without original charters established under the Corporation Code, as (m) Managerial employee is one who is vested with the powers or
well as employees or religious, charitable, medical or educational prerogatives

Atty. Marlon Manuel
- to lay down and execute management policies citing instances wherein these workers recommended the dismissal and hiring of
- and/or to hire, transfer, suspend, lay off, recall, discharge, several workers.
assign or discipline employees. Held: The test of supervisory or managerial status depends on whether a
Supervisory employees are those who, person possesses authority to act in the interest of his employer in the matter
- in the interest of the employer, specified in Article 212 (k) of the Labor Code and Section 1 (m) of its
- effectively recommend such managerial actions Implementing Rules and whether such authority is not merely routinary or
- if the exercise of such authority is not merely routinary or clerical in nature, but requires the use of independent judgment. Thus, where
clerical in nature
such recommendatory powers as in the case at bar, are subject to evaluation,
- but requires the use of independent judgement. review and final action by the department heads and other higher executives of
All employees not falling within any of the above definitions are the company, the same, although present, are not effective and not an exercise of
considered rank-and-file employees for purposes of this Book. independent judgment as required by law.
Subject employees are not managerial employees because as borne by
OMNIBUS RULES, BOOK V
the records, they do not participate in policy making but are given ready policies
to execute and standard practices to observe, thus having little freedom of action.
RULE I
Definition of Terms
United Pepsi-Cola Supervisory Union vs. Laguesma, 288 SCRA 15
SECTION 1. Definition of terms. The company opposed the inclusion of its route managers in the list of members
of the union claiming said employees are managerial employees and should be
(t) "Managerial Employee" is one who is vested with powers or
excluded.
prerogatives to lay down and execute management policies
and/or to hire, transfer, suspend, layoff, recall, discharge, assign Held: A distinction exists between those who have the authority to devise,
or discipline employees. "Supervisory Employee" is one who, in implement and control strategic and operational policies (top and middle
the interest of the employer, effectively recommends managerial managers) and those whose task is simply to ensure that such policies are carried
actions if the exercise of such authority is not merely routinary or out by the rank-and-file employees of an organization (first-level
clerical in nature but requires the use of independent judgment. managers/supervisors). What distinguishes them from the rank-and-file
All employees not failing within the definition of managerial or employees is that they act in the interest of the employer in supervising such
supervisory employees are considered rank-and-file employees, rank-and-file employees.
for purposes of these Rules.
Designations or titles of positions are not controlling. And neither should
it be presumed that just because they are given set benchmarks to observe, they
CASES
are ipso facto supervisors. Adequate control methods which require a delineation
of the functions and responsibilities of managers by means of ready reference
Franklin Baker vs. Trajano, 157 SCRA 416 (1988)
cards as here, have long been recognized in management as effective tools for
A union representing 90 workers of the company filed for a certification election.
keeping businesses competitive.
The company opposed saying that 76 of the workers were managerial employees,

Atty. Marlon Manuel
University of the Philippines Corp. vs. Ferrer-Calleja, 211 SCRA 451 Held: A labor organization composed of both rank-and-file and supervisory
UP protested the inclusion of the academic staff in a labor union composed of employees is no labor organization at all. It cannot, for any guise or purpose, be a
other non-academic rank and file, claiming that they are high level-employees or legitimate labor organization. Not being one, an organization which carries a
at the least, should comprise a separate collective bargaining unit. mixture of rank-and-file and supervisory employees cannot possess any of the
Held: Even assuming arguendo that UP professors discharge policy-determining rights of a legitimate labor organization, including the right to file a petition for
function through the University Council, still such exercise would not qualify certification election for the purpose of collective bargaining. It becomes
them as high-level employees within the context of E.O. 180. Policy- necessary, therefore, anterior to the granting of an order allowing a certification
determining refers to policy-determination in university matters that affect those election, to inquire into the composition of any labor organization whenever the
same matters that may be the subject of negotiation between public sector status of the labor organization is challenged on the basis of Article 245 of the
management and labor. The reason why policy-determining has been laid down Labor Code.
as a test in segregating rank-and-file from management is to ensure that those (The Court held that the union cannot, prior to purging itself of its
who lay down policies in areas that are still negotiable in public sector collective supervisory employee members, attain the status of a legitimate labor
bargaining do not themselves become part of those employees who seek to organization. Not being one, it cannot possess the requisite personality to file a
change these policies for their collective welfare. petition for certification election.)
The policy-determining functions of the University Council refer to
academic matters, i.e., those governing the relationship between the University SPI Technologies vs. DOLE (Minute Resolution), March 8, 1999
and its students, and not the University as an employer and the professors as The company opposed the petition for certification filed by the union alleging
employees. It is thus evident that no conflict of interest results in the professors that the union is not a legitimate labor organization as it represents both
being members of the University Council and being classified as rank-and-file supervisory and rank and file employees, and submitting the names of 19 alleged
employees. supervisory employees.
The basic test in determining the appropriate bargaining unit is that a Held: The record shows that the union is a legitimate labor organization having
unit, to be appropriate, must affect a grouping of employees who have been issued a certificate of registration. Under prevailing rules, once a union
substantial, mutual interests in wages, hours, working conditions and other acquires legitimate status as a labor organization, it continues as such until its
subjects of collective bargaining. The test of the grouping is community or certificate of registration is cancelled or revoked in an independent action for
mutuality of interests. And this is so because the basic test of an asserted cancellation
bargaining units acceptability is whether or not it is fundamentally the Article 245 merely prescribes the requirements for eligibility in joining a
combination which will best assure to all employees the exercise of their union and does not prescribe the grounds for the cancellation of union
collective bargaining rights. registration. In the absence of any independent petition for cancellation of
registration filed against the respondent labor union, it continues to be possessed
Toyota Motor Philippines Corp. vs. Toyota Motor Philippines Labor Union, 268 with legal personality of a legitimate labor organization.
SCRA 573
The company opposed the holding of a certification election because the union
has both rank and file employees and supervisory employees.

Atty. Marlon Manuel
Atlas Lithographic Services vs. Laguesma, 205 SCRA 12 employees in the same company belong to a single union but also where unions
A local union comprised of supervisory employees filed a petition for formed independently by supervisory and rank-and-file employees of a company
certification election which was opposed by the company because such union are allowed to affiliate with the same national federation.
was affiliated with a national federation which has as one of its members the However, such a situation would obtain only where two conditions
union of the companys rank-and-file employees. concur: First, the rank-and-file employees are directly under the authority of
Held: These supervisory employees are allowed to form their own union but supervisory employees. Second, the national federation is actively involved in
they are not allowed to join the rank-and-file union because of conflict of union activities in the company.
interest. The peculiar role of supervisors is such that while they are not The affiliation of two local unions in a company with the same national
managers, when they recommend action implementing management policy or ask federation is not by itself a negation of their independence since in relation to the
for the discipline or dismissal of subordinates, they identify with the interests of employer, the local unions are considered as the principals, while the federation
the employer and may act contrary to the interests of the rank-and-file. is deemed to be merely their agent. This conclusion is in accord with the policy
A conflict of interest nay arise in the areas of discipline, collective that any limitation on the exercise by employees of the right to self-organization
bargaining and strikes. guaranteed in the Constitution must be construed strictly. Workers should be
Members of the supervisory union might refuse to carry out disciplinary allowed the practice of this freedom to the extent recognized in the fundamental
measure against their co-member rank-and-file employees. In the area of law.
bargaining, their interests cannot be considered identical. The needs of one are
different from those of the other. Moreover, in the event of a strikes the national National Association of Trade Unions (NATU) vs. NLRC, 239 SCRA 546
federation might influence the supervisors union to conduct a sympathy strike on The petition for certification election of the union was opposed by the company
the sole basis of affiliation. on the ground that some of the employees included in the list of members were
either managerial or confidential employees.
De La Salle University Medical Center vs. Laguesma, 294 SCRA 141 Held: It is the nature of the employees functions, and not the nomenclature or
The company opposed the petition for certification election on the ground that title given to his job, which determines whether he has rank and file, supervisory,
the federation representing the supervisors union also represents its rank-and-file or managerial status.
employees union. The grave abuse of discretion committed by public respondent is at once
Held: The reason for the segregation of supervisory and rank-and-file apparent. Art. 212, par. (m), of the Labor Code is explicit. A managerial
employees of a company with respect to the exercise of the right to self- employee is (a) one who is vested with powers or prerogatives to lay down and
organization is the difference in their interests. Supervisory employees are more execute management policies, or to hire, transfer, suspend, lay off, recall,
closely identified with the employer than with the rank-and-file employees. If discharge, assign or discipline employees; or (b) one who is vested with both
supervisory and rank-and-file employees in a company are allowed to form a powers or prerogatives. A supervisory employee is different from a managerial
single union, the conflicting interests of these groups impair their relationship employee in the sense that the supervisory employee, in the interest of the
and adversely affect discipline, collective bargaining, and strikes. These employer, effectively recommends such managerial actions, if the exercise of such
consequences can obtain not only in cases where supervisory and rank-and-file managerial authority is not routinary in nature but requires the use of independent

Atty. Marlon Manuel
judgment. It is the nature of the employees functions, and not the nomenclature manner to managerial employees and hence, are likewise privy to sensitive and
or title given to his job, which determines whether he has rank and file, highly confidential records.
supervisory, or managerial status. The dangers sought to be prevented, particularly the threat of conflict of
A confidential employee is one entrusted with confidence on delicate interest and espionage, are not eliminated by non-membership of Metrolabs
matters, or with the custody, handling, or care and protection of the employers executive secretaries or confidential employees in the Union. Forming part of the
property. While Art. 245 of the Labor Code singles out managerial employees as bargaining unit, the executive secretaries stand to benefit from any agreement
ineligible to join, assist or form any labor organization, under the doctrine of executed between the Union and Metrolab. Such a scenario, thus, gives rise to a
necessary implication, confidential employees are similarly disqualified. potential conflict between personal interests and their duty as confidential
In the collective bargaining process, managerial employees are supposed employees to act for and in behalf of Metrolab. They do not have to be union
to be on the side of the employer, to act as its representatives, and to see to it that members to affect or influence either side.
its interests are well protected. The employer is not assured of such protection if Finally, confidential employees cannot be classified as rank and file. As
these employees themselves are union members. Collective bargaining in such a previously discussed, the nature of employment of confidential employees is
situation can become one-sided. It is the same reason that impelled this Court to quite distinct from the rank and file, thus, warranting a separate category.
consider the position of confidential employees as included in the disqualification Excluding confidential employees from the rank and file bargaining unit,
found in Art. 245 as if the disqualification of confidential employees were written therefore, is not tantamount to discrimination.
in the provision. If confidential employees could unionize in order to bargain for
advantages for themselves, then they could be governed by their own motives Sugbuanon Rural Bank vs. Laguesma, 324 SCRA 425
rather than the interest of the employers. Moreover, unionization of confidential The company opposed the unions petition for certification election on the
employees for the purpose of collective bargaining would mean the extension of ground that the members of the union were confidential employees.
the law to persons or individuals who are supposed to act in the interest of the Held: Article 245 of the Labor Code does not directly prohibit confidential
employers. It is not farfetched that in the course of collective bargaining, they employees from engaging in union activities. However, under the doctrine of
might jeopardize that interest which they are duty-bound to protect. necessary implication, the disqualification of managerial employees usually
applies to confidential employees. The confidential employee rule justifies
Metrolab Industries vs. Confesor, 254 SCRA 182 exclusion of confidential employees because in the normal course of their duties
The company asked for the exclusion from the closed shop provision and they become aware of management policies relating to labor relations. It must be
bargaining unit of the rank and file employees of the executive secretaries of its stressed, however, that when the employee does not have access to confidential
managers since such secretaries are confidential employees having access to labor relations information, there is no legal prohibition against confidential
vital labor information. employees from forming, assisting, or joining a union.
Held: Although Article 245 of the Labor Code 20 limits the ineligibility to join,
form and assist any labor organization to managerial employees, jurisprudence San Miguel Corp. Supervisors and Exempt Union vs. Laguesma, 277 SCRA
has extended this prohibition to confidential employees or those who by reason 370
of their positions or nature of work are required to assist or act in a fiduciary The company petitioned for the exclusion of several supervisors from the
bargaining unit on the ground that they were confidential employees. These

Atty. Marlon Manuel
employees handle confidential information which relate to product formulation, technical and internal business operations data which, to our mind, has no
product standards and product specifications. relevance to negotiations and settlement of grievances wherein the interests of a
Held: Confidential employees are those who (1) assist or act in a confidential union and the management are invariably adversarial. Since the employees are
capacity, (2) to persons who formulate, determine, and effectuate management not classifiable under the confidential type, this Court rules that they may
policies in the field of labor relations. The two criteria are cumulative, and both appropriately form a bargaining unit for purposes of collective bargaining.
must be met if an employee is to be considered a confidential employee that Furthermore, even assuming that they are confidential employees, jurisprudence
is, the confidential relationship must exist between the employee and his has established that there is no legal prohibition against confidential employees
supervisor, and the supervisor must handle the prescribed responsibilities relating who are not performing managerial functions to form and join a union.
to labor relations.
Jacinto vs. CA, 281 SCRA 657
An important element of the confidential employee rule is the Several public school teachers incurred unauthorized absences when they
employees need to use labor relations information. Thus, in determining the participated in mass actions. They were preventively suspended and later on
confidentiality of certain employees, a key question frequently considered is the dismissed by the DECS Secretary. The teachers claimed they were merely
employees necessary access to confidential labor relations information. exercising their right to peaceful assembly and petition for redress of grievances.
Granting arguendo that an employee has access to confidential labor Held: As regards the right to strike, the Constitution itself qualifies its exercise
relations information but such is merely incidental to his duties and knowledge with the proviso in accordance with law. This is a clear manifestation that the
thereof is not necessary in the performance of such duties, said access does not state may, by law, regulate the use of this right, or even deny certain sectors such
render the employee a confidential employee. If access to confidential labor right. Executive Order 180 which provides guidelines for the exercise of the right
relations information is to be a factor in the determination of an employees of government workers to organize, for instance, implicitly endorsed an earlier
confidential status, such information must relate to the employers labor relations CSC circular which enjoins under pain of administrative sanctions, all
policies. Thus, an employee of a labor union, or of a management association, government officers and employees from staging strikes, demonstrations, mass
must have access to confidential labor relations information with respect to his leaves, walkouts and other forms of mass action which will result in temporary
employer, the union, or the association, to be regarded a confidential employee, stoppage or disruption of public service, by stating that the Civil Service law
and knowledge of labor relations information pertaining to the companies with and rules governing concerted activities and strikes in the government service
which the union deals, or which the association represents, will not cause an shall be observed.
employee to be excluded from the bargaining unit representing employees of the
union or association. Access to information which is regarded by the employer to It is also settled in jurisprudence that, in general, workers in the public
be confidential from the business standpoint, such as financial information or sector do not enjoy the right to strike.
technical trade secrets, will not render an employee a confidential employee.
Acosta vs. CA, 334 SCRA 486
In the case at bar, the employees in question may not be considered Teachers from different public schools in Metro Manila were administratively
confidential employees merely because they handle confidential data as such charged with grave misconduct and gross neglect of duty when they did not
must first be strictly classified as pertaining to labor relations for them to fall report for work and instead, participated in mass actions. They claimed that they
under said restrictions. The information they handle are properly classifiable as

Atty. Marlon Manuel
never went on strike because they never sought to secure changes or modification of a managerial employee under Art. 245. Because the definition of a managerial
of the terms and conditions of their employment. employee should be applied strictly.
Held: The character and legality of the mass actions which they participated in Theres a prohibition against managerial employees joining or assisting
have been passed upon by this Court as early as 1990 wherein it held that these in union organizing activities, because it is considered interference by
mass actions were to all intents and purposes a strike; they constituted a management. Because they lay down policies. Now as for supervisory
concerted and unauthorized stoppage of, or absence from, work which it was the employees, they are allowed to form or join labor organizations because their
teachers sworn duty to perform, undertaken for essentially economic reasons. power is recommendatory. However it must be effective recommendation. What
does that mean? Since all recommendations of supervisors go up to the manager
LECTURE for a final signature at the very least, it can be said it will always be subject to
review. So when can a recommendation be considered effective?
Is the right to self organization a constitutional right? Can it be taken In the case of a disciplinary action, a supervisor conducted an
away by statute? The right to self organization is a constitutional right. And it investigation, and he exercised discretion and recommended termination after
cannot be taken away by statute. The right to self organization per se is a right of deciding the case, if the manager conducts another investigation, and again
ALL employees, not just rank-and-file or supervisory but even managerial evaluate the evidence submitted by the supervisor, then the supervisors
employees. It is the right to organization for purposes of collective bargaining recommendation is not effective. He should be considered rank-and- file. On the
which is limited by the Labor Code. Hence, only rank and file and supervisory other hand, if the manager merely reviews the supervisors findings and
employees may join, assist, or form labor organizations for purposes of collective recommendations, and determine if the supervisor exercised due discretion, then
bargaining. Art. 243 cannot be read in isolation. It must be read in conjunction the recommendation was effective recommendation. The supervisor holds a
with Art. 245. supervisory position.
What is the right to self-organization? It does not only cover the right to Now a supervisor cannot join the organization of rank-and-file
organize for purposes of collective bargaining and for mutual aid and protection, employees, and vice versa. There is a prohibition on commingling. Does it matter
but also pursuant to Art. 246. Look at Art. 246, it defines what is the right of self- how many prohibited employees happened to join the union? No. The legitimacy
organization.. It extends to the employees right to assert peaceful, concerted of the union is invalidated by even a single employee who commingles with that
means. Hence, to picket peacefully is part of the right to self-organization certain union. Such issue will come up in a petition for certification election
through peaceful, concerted means, and it is beyond the jurisdiction of the regular proceeding. Remember the case of Toyota. The Court said the legitimacy of a
courts. union is nullified the moment there is commingling. What is the legal basis for
Who are managerial employees? Look at Art. 82. If one is a member of a this ruling? Art. 245? But Art. 245 does not mention the effect of nullification in
managerial staff by virtue of Art. 82 you are a managerial employee? Insofar as case of commingling.
one is entitled to certain benefits, one can be considered a managerial employee Remember the Toyota case and Justice Kapunan . SPI Technologies is
excluding him from such benefits, and in this case, managerial employee as a clarification of the Toyota case. It says that Art. 245 relates to the eligibility of
defined by Art. 82. But insofar as the right to self-organization is concerned, he the employees to join. It does not relate to the issue of illegitimacy. In fact, the
may be considered NOT a managerial employee because of the other definition Labor Code does not include as one of the grounds for cancellation of a unions

Atty. Marlon Manuel
registration the commingling of employees in such union. Toyota places a burden departments. Or a union can be organized in such a way where not all rank-and-
on labor unions to determine with exactness who are supervisory or rank-and-file file employees comprise only one union. You can divide them into as many
employees. Instead of Toyota, SPI is a more reasonable interpretation of Art. 245. bargaining units as possible depending on the rules in determining the
Art. 245 bars an employee , and the effect of the violation is for the member to be appropriate bargaining unit.
expelled. In the case of a petition for certification election, the employee is Confidential employees- are those who assist managerial employees and
excluded from voting through inclusion/exclusion proceedings. We do not know by the doctrine of necessary implication are not allowed to join or assist labor
how the Court will reconcile Toyota and SPI. They are irreconcilable. I suggest organizations. They are akin to managerial employees. Three elements that must
for the bar purposes, cite Toyota, then cite SPI. We will not know why the be applied strictly:
examiner asks the question-if he is relying on Toyota or is testing if you know
SPI. So I suggest cite both Toyota then say that there is a recent contrary decision The confidential employees necessary or primary function entails he
in the case of SPI. must have access to vital confidential information or matter related to
labor relations.
The Toyota doctrine says that commingling is a violation of Art. 245, and
results in the nullification of a unions registration. This fatally affects a pending He also must have fiduciary relationship of a confidential nature with the
petition for certification election because it can be filed only by a legitimate labor management employee.
organization. And the manager must have the power to lay down policies relating to
Now in the Atlas case, using Art. 245 of the Code, says that a supervisory labor relations.
union cannot join the federation of the companys rank-and-file union. Hence it Hence a Xerox operator cannot be considered a confidential employee,
extends the prohibition to the federation or conglomerate level. Applying Toyota because although he may photocopy vital labor relations documents, he does not
again, will this affect the federations legitimacy? Yes. This is again not provided enjoy the fiduciary relation.
in Art. 245. Go to the last paragraph of the decision, prior to the dispositive I suggest you try to know the rules on public sector unionism. You can
portion. The company withdrew its opposition to the commingling in the find that in any book. Im not sure if it is included in the bar exams though.
federation. There was no genuine issue left! That is how doctrines in labor are
made year in and year out. A union security agreement is a valid compulsion as a condition for
employment. In compelling him to join a labor organization you are working for
Now in the succeeding case of De La Salle, the commingling per se is his own good. It is done for collective action for labor. It is good for labor. This is
not disallowed. It said the Atlas doctrine is applicable only when: an exception to the right to association, such as lawyers are compelled to join the
The rank-and-file union members are directly under the supervisors IBP.
comprising the supervisory union But who cannot be compelled to be members of the labor union? Those
The federation is actively involved in the negotiations for CBA (which is who are already members of another union. The compulsion to join the union
stupid because this is the primary purpose of a federation) applies to those who are not yet members of another union and are not religious
objectors.
It is possible that there are supervisors in the union who are not
supervising the rank-and-file members of the union in the same federation. They Religious Objectors applies to people who claim that it is prohibited by their
are not really working with each other. For instance, they belong to different religious belief. They can maintain their employment despite the union security

Atty. Marlon Manuel
clause. But religious objectors are not prohibited from joining if they want to , - Employees of an appropriate collective bargaining unit
nor are they prohibited from forming their own union. No state policy or law a) who are not members of the recognized collective bargaining
prohibits this, it is only usually an internal prohibition by the religious group. agent
b) may be assessed a reasonable fee equivalent to the dues and
This is exemplified in the Kapatiran case. The workers were allowed to
other fees paid by members of the recognized collective
form their own union if they wanted to, and even if it would be against their
bargaining agent,
religious belief, the State would still not prohibit them from doing the same.
c) if such non-union members accept the benefits under the
collective agreement:
C. ACQUISITION AND RETENTION OF MEMBERSHIP, UNION SECURITY d) Provided, That the individual authorization required under Art.
AGREEMENTS 242, paragraph (o), of this Code shall not apply to the non-
members of the recognized collective bargaining agent.
LABOR CODE
CASES
Art. 277 (c). Miscellaneous Provisions.
ANY employee, Victoriano vs. Elizalde Rope Workers Union, 59 SCRA 54
- whether employed for a definite period or not, It is clear that the right to join a union includes the right to abstain from joining
- shall, beginning his first day of service, any union. The legal protection granted to such right to refrain from joining is
- be considered an employee withdrawn by operation of law. Where a labor union and an employer have
- for purposes of membership in any labor union. agreed on a closed shop, by virtue of which the employer may employ only
members of the collective bargaining union, and the employees must continue to
Art. 248 (e). Unfair Labor Practices of Employers.
be members of the union for the duration of the contract in order to keep their
- To discriminate in regard to
jobs.
a) wages,
b) hours of work, It is clear, therefore, that the assailed Act, far from infringing the
c) and other terms and conditions of employment constitutional provision on freedom of association, upholds and reinforces it. It
in order to encourage or discourage membership in any labor does prohibit the members of said religious sects from affiliating with labor
organization. unions. It still leaves to said members the liberty and the power to affiliate, or not
to affiliate, with labor unions. If, notwithstanding their religious beliefs, the
- Nothing in this Code or in any other law members of said religious sects prefer to sign up with the labor union, they can
~ shall stop the parties from requiring membership in a recognized do so. If in deference and fealty to their religious faith, they refuse to sign up,
collective bargaining agent as a condition for employment, they can do so, the law does not coerce them to join; neither does the law prohibit
~ except of those employees who are already members of another them from joining, and neither may the employer or labor union compel them to
union at the time of the signing of the collective bargaining join.
agreement.

Atty. Marlon Manuel
Kapatiran sa Meat and Canning Division vs. Ferrer-Calleja, 162 SCRA 367 ART. 231. Registry of unions and file of collective agreements.
This Courts decision in Victoriano vs. Elizalde Rope Workers Union, 59 SCRA
54, upholding the right of members of the IGLESIA NI KRISTO sect not to join The Bureau shall keep a registry of
a labor union for being contrary to their religious beliefs, does not bar the - legitimate labor organizations.
members of that sect from forming their own union. The public respondent The Bureau shall also maintain a file of
correctly observed that the recognition of the tenets of the sect . . . should not - all collective bargaining agreements
infringe on the basic right of self-organization granted by the constitution to - and other related agreements
workers, regardless of religious affiliation. - and records of settlement of labor disputes,
- and copies of orders, and decisions of voluntary arbitrators.
The fact that TUPAS was able to negotiate a new CBA with ROBINA
within the 60-day freedom period of the existing CBA, does not foreclose the The file shall be open and accessible
right of the rival union, NEW ULO, to challenge TUPAS claim to majority (a) to interested parties
status, by filing a timely petition for certification election on October 13, 1987 (b) under conditions prescribed by the Secretary of Labor and
before TUPAS old CBA expired on November 15, 1987 and before it signed a Employment,
new CBA with the company on December 3, 1987. As pointed out by Med- (c) provided that no specific information submitted in confidence
Arbiter Abdullah, a certification election is the best forum in ascertaining the shall be disclosed unless:
- authorized by the Secretary,
majority status of the contending unions wherein the workers themselves can
- or when it is at issue in any judicial litigation
freely choose their bargaining representative thru secret ballot. Since it has not
- -or when public interest or national security so requires.
been shown that this order is tainted with unfairness, this Court will not thwart
the holding of a certification election.
1.
(a) Within thirty (30) days from the execution of a collective
D. LABOR ORGANIZATIONS bargaining agreement,
(b) the parties shall submit copies of the same directly to the Bureau
LABOR CODE or the Regional Offices of the Department of Labor and
Employment for registration ,
Art. 212. Definitions. (c) accompanied with
(g) Labor organization means any union or association of - verified proofs of its posting in two conspicuous places in the
employees which exists in whole or in part for the purpose of place of work
collective bargaining or of dealing with employers concerning - and ratification by the majority of all the workers in the
terms and conditions of employment. bargaining unit.
(h) Legitimate labor organization means any labor organization
2. The Bureau or Regional Offices shall
duly registered with the Department of Labor and Employment
and includes any branch or local thereof.

Atty. Marlon Manuel
(a) act upon the application for registration of such collective c. The names of all its members comprising at least twenty 20%
bargaining agreement within five (5) calendar days from receipt percent of all the employees in the bargaining unit where it
thereof. seeks to operate;
(b) The Regional Offices shall furnish the Bureau with a copy of the d. If the applicant has been in existence for one or more years,
collective bargaining agreement within five (5) days from its copies of its annual financial reports; and
submission. e. Four copies of the constitution and by-laws of the applicant
(c) The Bureau or Regional Office shall assess the employer for every union, the minutes of its adoption or ratification and the list of
collective bargaining agreement the members who participated in it.
- a registration fee of not less than one thousand pesos
(P1,000.00) or ART. 235. Action on application.
- in any other amount as may be deemed appropriate and The Bureau shall act on all applications for registration within thirty
necessary by the Secretary of Labor and Employment (30) days from filing.
- for the effective and efficient administration of the voluntary All requisite documents and papers shall be
arbitration program. - certified under oath by the Secretary or the treasurer of the
Any amount collected under this provision shall accrue to the organization, as the case may be,
Special Voluntary Arbitration Fund. - and attested to by its president.
ART. 236. Denial of registration; appeal. The decision of the
The Bureau shall also maintain a file, and shall undertake or Labor Relations Division in the regional office denying registration may
assist in the publication, of all final decisions, orders and awards of the be appealed by the applicant union to the Bureau within ten days from
Secretary of Labor and Employment, Regional Directors and the receipt of notice thereof.
Commission.
ART. 237. Additional requirements for federations or
ART. 234. Requirements of registration. Any applicant labor national unions. Subject to Art. 238, if the applicant for
organization, association or group of unions or workers registration is a federation or a national union, it shall, in addition to
- shall acquire legal personality the requirements of the preceding Articles, submit the following:
- and shall be entitled to the rights and privileges granted by law to (a) Proof of the affiliation of at least ten locals or chapters, each of
legitimate labor organizations which must be a duly recognized collective bargaining agent in
- upon issuance of the certificate of registration the establishment or industry in which it operates, supporting
- based on the following requirements: the registration of such applicant federation or national union;
a. Fifty-pesos (P50.00) registration fee;
b. The names of its officers, their addresses, the principal address (b) The names and addresses of the companies where the locals or
of the labor organization, the minutes of the organizational chapters operate and the list of all the members in each
meetings and the list of the workers who participated in such company involved.
meetings;
ART. 238. Cancellation of registration, appeal.

Atty. Marlon Manuel
The certificate of registration of any legitimate labor organization, misrepresentation, false entries or fraud in the preparation of the
whether national or local, financial report itself;
- shall be cancelled by the Bureau
- if it has reason to believe, (e) Acting as a labor contractor or engaging in the cabo system, or
- after due hearing, otherwise engaging in any activity prohibited by law;
- that the said labor organization no longer meets one or more of
the requirements herein prescribed. (f) Entering into collective bargaining agreements which provide
terms and conditions of employment below minimum standard
ART. 239. Grounds for cancellation of union registration. established by law;
The following shall constitute grounds for cancellation of union
registration: (g) Asking for or accepting attorneys fees or negotiation fees from
(a) Misrepresentation, false statement or fraud in connection with the employers;
- adoption or ratification of the constitution and by-laws or
amendments thereto, (h) Other than for mandatory activities under this Code, checking off
- the minutes of ratification, special assessments or any other fees without duly signed
- and the list of members who took part in the ratification; individual written authorizations of the members;
(b) Failure to submit the documents mentioned in the preceding (i) Failure to submit a list of individual members to the Bureau once
paragraph within thirty (30) days from adoption or ratification of a year or whenever required by the Bureau; and
the constitution and by-laws or amendments thereto;
(j) Failure to comply with requirements under Articles 237 and 238.
(c) Misrepresentation, false statement or fraud in connection with
the ART. 240. Equity of the incumbent.
- election of officers, All existing federations and national unions
- minutes of the election of officers - which meet the qualifications of a legitimate labor organization
- and the list of voters, - and none of the grounds for cancellation
or failure to shall continue to maintain their existing affiliates regardless of the
- submit these documents nature of the industry and the location of the affiliates.
- together with the list of the newly elected/appointed officers
and their postal addresses Art. 242. Rights of Legitimate Labor Organizations. A legitimate
- within thirty (30) days from election; labor organization shall have the right:
a) to act as representative of its members for the purpose of
(d) Failure to submit the annual financial report to the Bureau within collective bargaining;
thirty (30) days after the closing of every fiscal year and

Atty. Marlon Manuel
b) to be certified as exclusive representative of all the employees in OMNIBUS RULES, BOOK V
an appropriate collective bargaining unit for purposes of
collective bargaining; RULE I
c) to be furnished by the employer, upon written request, with the Definition of Terms
annual audited financial statements, including the balance sheet
and the profit and loss statement, within thirty (30) calendar SECTION 1. Definition of terms.
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 (h) "Labor Organization" means any union or association of
exclusive bargaining representatives of the employees in the employees which exists in whole or in part for the purpose of
bargaining unit, or within sixty (60) calendar days before the collective bargaining or of dealing with employers concerning
expiration of the existing collective bargaining agreement, or terms and conditions of employment.
during the collective bargaining negotiation;
d) to own property, real or personal, for the use and benefit or the (i) "Legitimate Labor Organization" means any organization defined
labor organization and its members; under letter (h) hereof which is duly registered with the
e) to sue and be sued in its registered name; Department. The term includes a local/chapter directly chartered
f) to undertake all other activities designed to benefit the by a federation or national union which has been duly reported to
organization and its members including cooperative, housing the Department in accordance with Rule \vi, Section 2 of this
welfare and other projects not contrary to law. Book.
Notwithstanding any provision of a general or special law to the (j) "Workers Association" means any association of workers
contrary, the income and properties of legitimate labor organization, organized for the mutual aid and protection of its members or for
including grants, endowments, gifts, donations and contributions they any legitimate purpose other than collective bargaining.
may receive from fraternal and similar organizations, local or foreign, (k) "Independent Union" means any labor organization operating at
which are actually, directly and exclusively used for their lawful the enterprise level whose legal personality is derived through an
purposes, shall be free from taxes, duties and other assessments. The independent action for registration prescribed under Article 234
exemptions provided herein may be withdrawn only by a special law of the Code and Rule II, Section 2 of these Rules. An
expressly repealing this provision. independent union may be affiliated with a federation, national or
industry union, in which case it may also be referred to as an
Art. 277. Miscellaneous Provisions. affiliate.
(a) All unions are authorized to collect reasonable membership fees,
union dues, assessments and fines and other contributions for labor (l) "Local Union/Chapter" means any labor organization operating at
education and research, mutual death and hospitalization benefits, the enterprise level whose legal personality is derived through
welfare fund, strike fund, and credit and cooperative undertakings. the issuance of a charter by a duly registered federation or
national union, subject to the reporting requirement prescribed in
Rule VI, Section 1 of these Rules.

Atty. Marlon Manuel
(m) "National Union/Federation" means any labor organization with at The charter certificate issued by a federation or national union
least ten (10) locals or chapters each of which must be a duly in creating a local/chapter, shall be filed with the Regional Office or the
recognized collective bargaining agent. Bureau within thirty (30) days from the issuance of such charter
(n) "Legitimate Workers Association" means any workers association certificate.
defined under letter (j) hereof which is duly registered with the
Department. SECTION 2. Requirement for registration of labor organizations.
(o) "Industry Union" means any legitimate labor organizations (I) The application for registration of an independent union shall be
operating within an identified industry, organized for collective supported by the following:
bargaining or for dealing with employers concerning terms and (a) The names of its officers, their addresses, the principal
condition of employment within an industry, or for participating address of the labor organization, the minutes of the
in the formulation of social and employment policies, standards organizational meetings and the list of workers who
and programs in such industry, which is duly registered with the participated in such meetings;
Department in accordance with Rule III, Section 2 of these Rules. (b) The number of employees and names of all its members
(p) "Trade Union Center" means any group of registered national comprising at least twenty percent (20%) of the employees
unions or federations organized for the mutual aid and protection in the bargaining unit where it seeks to operate;
of its members, for assisting such members in collective (c) If the applicant union has been in existence for one or more
bargaining, or for participating in the formulation of social and years, two copies of its annual financial reports, unless it
employment policies, standards and programs, which is duly has not collected any amount from the members, in which
registered with the Department in accordance with Rule III, case a statement to this effect shall be included in the
Section 2 of these Rules. application; and
RULE III (d) Four copies of its consitution and by-laws, minutes of its
Registration of Labor Organizations adoption or ratification, and the list of the members who
participated it. However, the list of ratifying members shall
SECTION 1. Where to file applications. The application for be dispensed with where the constitution and by-laws was
registration of any federation, national or industry union or trade union ratified or adopted during the organizational meeting
center shall be filed with the Bureau. Where the application is filed referred to in paragraph (a) above. In such case, the
with the Regional Office, the same shall be immediately forwarded to factual circumstances of the ratification shall be recorded in
the Bureau within forty-eight (48) hours from filing thereof, together the minutes of the organizational meeting.
with all the documents supporting the registration. (II) The application for registration of a federation or national union
The application for registration of an independent union shall be shall, in addition to subparagraphs (a), (c) and (d) of the
filed with and be acted upon by the Regional Office where the immediately preceding paragraph, be supported by:
applicants principal office is located. (a) The resolution of affiliation of at least ten (10)
locals/chapters or affiliates, each of which must be a duly

Atty. Marlon Manuel
recognized or certified bargaining representative in the
establishment where it seeks to operate; and SECTION 2. Requirements for registration. the application for
(b) The names and addresses of the companies where the registration of a workers association shall be supported by the
locals/chapters or affiliates operate and the list of all the following:
members in each company involved. (a) The names of its members, their addresses, the principal office of
(III) The Application for registration of an industry or trade union the applicant, the minutes of its organizational meeting/s, and
center shall be supported by the following: the names of its individual members who attended such
meeting/s;
(a) The list of its member organizations and their respective
presidents and, in the case of an industry union, the (b) A copy of its constitution and by-laws, duly ratified by a majority
industry where the union seeks to operate; of its individual members;
(b) The resolution of membership of each member (c) In the case of any grouping of workers associations, the
organization, approved by the Board of Directors of such requirements under Rule III, Section 2, No. III of these Rules
union; shall apply.
(c) The name and principal address of the applicant, the names RULE V
of its officers and their addresses, the minutes of its Provisions Common to the Registration of Labor Organizations
organizational meeting/s, and the list of member and Workers Association
organizations and their representative who attended such
meeting/s; and SECTION 1. Attestation requirements. The application for
(d) A copy of its constitution and by-laws and minutes of its registration of any labor organization of workers association, including
ratification by a majority of the presidents of the member all the accompanying documents, shall be verified under oath by its
organizations, provided that where ratification was done Secretary or Treasurer as the case may be, and attested to by its
simultaneously with the organizational meeting, it shall be President.
sufficient that the fact or ratification be included in the
minutes of the organizational meeting. SECTION 2. Payment of registration fee. A labor organization or
workers association shall be issued a certificate of registration upon
RULE IV payment of the prescribed registration fee.
Registration of Workers Associations
SECTION 3. Action on applications. The Regional Office or the
SECTION 1. Where to file application. The application for Bureau, as the case may be, shall act on all applications for
registration of a workers association whose place of operation is registration within thirty (30) days from filing thereof, either by
confined to one regional jurisdiction shall be filed directly and acted approving the application and issuing the certificate of registration, or
upon by the Regional Office where it operates. Otherwise, the denying the application for failure of the applicant to comply with the
application shall be filed and acted upon by the Bureau. requirements for registration. When the documents supporting the

Atty. Marlon Manuel
application are not complete or not contain the requisite attestation local/chapter by submitting to the Regional Office or to the Bureau two
requirements, the Regional Office or the Bureau shall, within five (5) (2) copies of the following:
days from receipt of the application, notify the applicant in writing of (a) A charter certificate issued by the federation or national union
the requirements needed to complete the application. Where the indicating the creation or establishment of the local/chapter;
applicant fails to complete the requirements within thirty (30) days
from receipt of notice, the application shall be denied without (b) The names of the local/chapters officer, their addresses, and the
prejudice. principal office of the local/chapter; and
(c) The local/chapters constitution and by-laws; provided that where
SECTION 4. Denial of registration: grounds for appeal. The the local/chapters constitution and by-laws is the same as that
decision of the Regional Office or the Bureau denying the application of the federation or national union, this fact shall be indicated
for registration shall be in writing, stating in clear terms the reasons accordingly.
therefor. A copy thereof shall be furnished the applicant union. The All the foregoing supporting requirements shall be certified
decision may be appealed to the Bureau if the denial is by the Regional under oath by the Secretary or the Treasurer of the local/chapter and
Director, or to the Secretary if the denial is by the Bureau, within ten attested by its President.
(10) days from receipt of notice thereof, on the ground of grave abuse
of discretion or violation of these Rules. SECTION 2. Chartering by a workers association. A duly registered
The appeal shall be filed in the Regional Office or in the Bureau, workers association may likewise charter any of its branches, subject
as the case may be, which shall cause the transmittal of the records to to the filing of the documents prescribed under the immediately
the Bureau or to the Secretary within five (5) calendar days from preceding section.
receipt of the records of the cases.
SECTION 3. Acquisition of legal personality. A local/chapter
SECTION 5. Effect of registration. The labor organization or constituted in accordance with Section 1 of this Rule shall acquire legal
workers association shall be deemed registered and vested with legal personality from the date of filing of the complete documents
personality on the date of issuance of its certificate of registration. enumerated therein. Upon compliance with all the documentary
Such legal personality cannot thereafter be subject to collateral attack; requirements, the Regional Office or Bureau shall issue in favor of the
but maybe questioned only in an independent petition for cancellation local/chapter a certificate indicating that it is in included in the roster
in accordance with these Rules. of legitimate labor organizations.
RULE VI SECTION 4. Affiliation of independent union. An independent union

Chartering and Affiliation of Labor Organizations shall be considered an affiliate of a federation or national or industry
and Workers Associations union upon filing by the latter to the Regional Office of Bureau of two
(2) copies each of verified resolution of affiliation, ratified by a
SECTION 1. Chartering and creation of a local chapter. A duly majority of the members of the former, and a resolution of acceptance
registered federation or national union may directly create a by the latter.

Atty. Marlon Manuel
RULE VII having jurisdiction over the place where the respondent principally
Reporting Requirements of Labor Organizations and Workers operates. Petitions filed against federations, national or industry
Associations unions, trade unions centers, or workers associations operating in
more than one regional jurisdiction, shall be filed with the Bureau.
SECTION 1. Reporting requirement. It shall be the duty of every
legitimate labor organization and workers association to submit to the SECTION 2. Who may file; form and contents of petition. Any
Regional Office or the Bureau two (2) copies of each of the following: party-in-interest may commence a petition for cancellation of
(a) Any amendments to its constitution and by-laws and the minutes registration, except in actions involving violations of Article 241 which
of adoption or ratification of such amendments, within thirty (30) can be commenced only by members of the respondent labor
calendar days from its adoption or ratification; organizations or workers association.
(b) Annual financial reports within thirty (30) calendar days after the The petition shall be under oath and shall state clearly and
close of each fiscal year; concisely the facts and grounds relied upon, accompanied by proof of
service that a copy thereof has been furnished the respondent.
(c) Updated list of newly-elected officers, together with the
appointive officers or agents who are entrusted with the handling SECTION 3. Cancellation of registration; nature and grounds.
of funds, within thirty (30) calendar days after each regular or Subject to the requirement of notice and due process, the registration
special election of officers, or from the occurrence of any change of any legitimate labor organization or workers association may be
in the officers or agents of the labor organizational of workers cancelled by the Bureau or the regional Office upon the filing of an
association; and independent petition for cancellation based on any of the following
(d) Updated list of individual members, locals/chapters, affiliates or grounds:
branches, as the case may be, within thirty (30) calendar days (a) Failure to comply with any of the requirements prescribed under
after the close of each fiscal year. Articles 234, 237 and 238 of the Code;
As understood in these Rules, the fiscal year of a labor (b) Violation of any of the provisions of Article 239 of the code;
organization or workers association shall coincide with the calendar
year, unless a different period is prescribed in its constitution and by- (c) Commission of any of the acts enumerated under Article 241 of
laws. the code: provided, that no petition for cancellation based on this
ground may be granted unless supported by at least thirty
RULE VIII percent (30%) of all the members of the respondent labor
Cancellation of Registration of Labor Organizations and organization or workers association.
Workers Associations
SECTION 4. Action on the petition; appeals. The Regional or
SECTION 1. Venue of action. If the respondent to the petition is a Bureau Director, as the case may be, shall have thirty (30) days from
local/chapter, affiliate, or a workers association with operations submission of the case for resolution within which to resolve the
limited to one region, the petition shall be filed with the Regional Office petition. The decision of the Regional or Bureau Director may be
appealed to the Bureau or the Secretary, as the case may be, within

Atty. Marlon Manuel
ten (10) days from receipt thereof by the aggrieved party on the Although the federation with which the Union is affiliated submitted
ground of grave abuse of discretion or any violation of these Rules. documents purporting to show that the latter had offered books of account to
The Bureau or the Secretary shall have fifteen (15) days from support its (the Unions) application for registration as a legitimate labor
receipt of the records of the case within which to decide the appeal. organization, what had been actually submitted to the BLR by the Union was a
The decision of the Bureau or the Secretary shall be final and mere financial statement, a generous description considering the sheet of paper
executory. in fact submitted by the Union.
Books of account are quite different in their essential nature from
SECTION 5. Revocation of legal personality of local chapter. In financial statements. In generally accepted accounting practice, the former
addition to the grounds for cancellation enumerated in the immediately consist of journals, ledgers and other accounting books (which are registered with
preceding section, a federation, national union or workers association the Bureau of Internal Revenue) containing a record of individual transactions
may be revoke the charter issued to a local/chapter or branch by
wherein monies are received and disbursed by an establishment or entity; entries
serving on the latter a verified notice of revocation, copy furnished the
are made on such books on a day-to-day basis (or as close thereto as is possible).
Bureau, on the ground of disloyalty or such other grounds as may be
Statements of accounts or financial reports, upon the other hand, merely
specified in the constitution and by-laws of the federation, national
summarize such individual transactions as have been set out in the books of
union or workers association. The revocation shall divest the
local/chapter has acquired independent registration in accordance with account and are usually prepared at the end of an accounting period, commonly
these Rules. corresponding to the fiscal year of the establishment or entity concerned.
Statements of account and financial reports do not set out or repeat the
SECTION 6. Effect of cancellation of registration of federation or basic data (i.e., the individual transactions) on which they are based and are,
national union on locals/chapters. The cancellation of registration of therefore, much less informative sources of cash flow information. Books of
a federation or national union shall operate to divest its locals/chapters account are kept and handled by bookkeepers (employees) of the company or
of their status as legitimate labor organizations, unless the agency; financial statements may be audited statements, i.e., prepared by external
locals/chapters are overed by a duly registered collective bargaining independent auditors (certified public accountants).
agreement. In the latter case, the locals/chapters shall be allowed to
register as independent unions, failing which they shall lose their
It is immaterial that the Union, having been organized for less than a year
legitimate status upon the expiration of the collective bargaining before its application for registration with the BLR, would have had no real
agreement. opportunity to levy and collect dues and fees from its members which need to be
recorded in the books of account. Such accounting books can and must be
CASES submitted to the BLR, even if they contain no detailed or extensive entries as yet.
The point to be stressed is that the applicant local or chapter must demonstrate to
Protection Technology, Inc. vs. Sec., 242 SCRA 99 the BLR that it is entitled to registered status because it has in place a system for
Non-submission of such books of account certified by and attested to by the accounting for members contributions to its fund even before it actually receives
appropriate officer is a ground which the employer can invoke legitimately to dues or fees from its members. The controlling intention is to minimize the risk
oppose a petition for certification election filed by the local or chapter concerned. of fraud and diversion in the course of the subsequent formation and growth of
the Union fund.

Atty. Marlon Manuel
basic units of association, free to serve their own and the common interest of all,
Pagpalain Haulers vs. Trajano, 310 SCRA 354 subject to the restraints imposed by the Constitution and By Laws of the
The Labor Code does not require the submission of books of account on order Association, and free also to renounce the affiliation for mutual welfare upon the
for a labor organization to be registered as a legitimate labor organization. This terms laid down in the agreement which brought it into existence.
requirement is found only in the Omnibus Rules (Book V) implementing the The inclusion of the word NATU after the name of the local union THEU
Labor Code, which subsequently was amended by DO9. Department Order No. in the registration with the Department of Labor is merely to stress that the
9, Series of 1997, reduced the requirements needed to be submitted, and has done THEU is NATUs affiliate at the time of the registration. It does not mean that the
away with the submission of books of account as a requisite of registration. But said local union cannot stand on its own. Neither can it be interpreted to mean
as provided by Arts. 241 (h) and (j), a labor organization must still maintain that it cannot pursue its own interests independently of the federation. A local
books of account, but it need not submit them as a requisite for registration. union owes its creation and continued existence to the will of its members and
not to the federation to which it belongs.
Tropical Hut Employees Union vs. Tropical Hut, 181 SCRA 173
The right of a local union to disaffiliate from its mother federation is well-settled. When the local union withdrew from the old federation to join a new
A local union, being a separate and voluntary association, is free to serve the federation, it was merely exercising its primary right to labor organization for the
interest of all its members including the freedom to disaffiliate when effective enhancement and protection of common interests. In the absence of
circumstances warrant. This right is consistent with the constitutional guarantee enforceable provisions in the federations constitution preventing disaffiliation of
of freedom of association. a local union, a local may sever its relationship with its parent.
All employees enjoy the right to self-organization and to form and join There is nothing in the constitution of the NATU or in the constitution of
labor organizations of their own choosing for the purpose of collective bargaining the THEU-NATU that the THEU was expressly forbidden to disaffiliate from the
and to engage in concerted activities for their mutual aid or protection. This is a federation. The alleged non-compliance of the local union with the provision in
fundamental light of labor that derives its existence from the Constitution. In the NATU Constitution requiring the service of three months notice of intention
interpreting the protection to labor and social justice provisions of the to withdraw did not produce the effect of nullifying the disaffiliation for the
Constitution and the labor laws or rules or regulations, We have always adopted following grounds: firstly, NATU was not even a legitimate labor organization, it
the liberal approach which favors the exercise of labor rights. appearing that it was not registered at that time with the Department of Labor,
and therefore did not possess and acquire, in the first place, the legal personality
The locals are separate and distinct units primarily designed to secure to enforce its constitution and laws, much less the right and privilege under the
and maintain an equality of bargaining power between the employer and their Labor Code to organize and affiliate chapters or locals within its group, and
employee-members in the economic struggle for the fruits of the joint productive secondly, the act of non-compliance with the procedure on withdrawal is
effort of labor and capital; and the association of the locals into the national premised on purely technical grounds which cannot rise above the fundamental
union (PAFLU) was in furtherance of the same end. These associations are right of self-organization.
consensual entities capable of entering into such legal relations with their
members. The essential purpose was the affiliation of the local unions into a Pambansang Kapatiran vs. Secretary of Labor, 253 SCRA 96
common enterprise to increase by collective action the common bargaining It is further argued that the CBA has no binding force since it was entered into by
power in respect of the terms and conditions of labor. Yet the locals remained the KAMAPI as a federation and not by the local union. Perusal of the agreement

Atty. Marlon Manuel
proves the signatories for KAMAPI consisted of its national president and of the and protection. So we have workers association on the one hand, and labor
duly elected officers of the local union. Thus the fact that KAMAPI was organizations on the other hand.
particularly mentioned as the bargaining party without specifying the local union Now we concentrate on labor organizations. What are the different types?
cannot strip it of its authority to participate in the bargaining process. The local
union maintains its separate personality despite affiliation with a larger national
federation. Plant level organizations:
The doctrine laid down in Progressive Development Corporation 21 is a Independent unions
mere clarification of the principle enunciated in Liberty Cotton Mills Workers Affiliates
Union v. Liberty Cotton Mills, Inc. 22 Both cases have provided that the mother
Local/Chapters
union acting for and in behalf of its affiliate ha(s) the status of an agent while the
local union remained the basic unit of the association free to serve the common
interest of all its members subject only to the restraints imposed by the Conglomerate of plant level organizations:
Constitution and By-Laws of the association.
National Unions/Federations
ANGLO-KMU vs. Samahan ng mga Manggagawa, 258 SCRA 371 Trade Union Centers
ANGLOs local chapter disaffiliated from ANGLO on the ground that the latter Industry Unions
has committed acts inimical to the interests of the chapter. ANGLO refused to
honor the disaffiliation on the ground that the CBA is still existing, and the
freedom period had not yet set in. How does one become a legitimate labor organization? Under the law,
Article 212 it is one which is registered with the Department. Article 234 says
Held: Pursuant to the right to self-organization, the chapter may disaffiliate any that it acquires rights once it is issued a certificate of registration. Now, an
time from the mother union. This right may not be defeated on the ground that independent union becomes an LLO and acquires legal personality once it is
there was noncompliance with the procedural rules to disaffiliate. Also, it was issued a certificate of registration with the Bureau of Labor Relations. How about
clearly shown that majority of the union members in the chapter supported such a local or chapter? Under the Omnibus Rules, such acquires legal personality
decision. The charge that ANGLO is guilty of acts inimical to the chapters upon issuance of a charter by the federation. It is the federation who submits the
interests is not rebutted. documents to the Bureau. Hence, without need of registration or issuance of a
certificate by the Bureau, the local or chapter becomes an LLO.
LECTURE Does this violate the codal provisions Arts. 212 and 234? No, but once
the federation loses its legal personality, the local or chapter loses its legal
Labor Organizations: personality as well, because its legal personality is hinged on the federations.
Workers associations are a type of organization for the purpose of self- There is no conflict between the Code and Rules. A local or chapter is not
organization but not for the purpose of collective bargaining. Only for mutual aid covered by the registration requirement. It does not violate the definition of a

Atty. Marlon Manuel
legitimate labor organization, because a local does acquire legal personality and not have to repeat the process of submitting the required documents, because the
does become an LLO through the issuance of a charter. federation has already done so. If the DOLE erroneously submits a certificate to
So, when an independent labor organization becomes an affiliate of a an organization that has not submitted all the required documents, a person in
federation, and the federation loses its legal personality (through cancellation of interest (such as management) can file a petition for cancellation of the
its registration), the independent labor organization still retains its legal certificate. Management can also oppose the petition for certification election
personality, because it acquired such through registration with the Bureau. When because of the lack of required documents.
an independent union affiliates, it informs the Bureau of such through submission Why is it required to submit all these documents? To protect the workers
of resolutions of affiliation and acceptance. A local or chapter may independently from fly-by-night unions, or unions that are purely moneymaking unions.
register as an organization subsequent to its becoming a local or chapter. This Thats why all the documents must be attested to by the Secretary and President
converts the chapter into an independent union. The local or chapter is not barred and must be notarized. Remember, what has to be submitted are Financial
from doing that, but a federation may usually stipulate against that and would Statements, not Books of Account. The two are different. Financial statements
cause revocation of the local/chapters charter. are prepared by an accountant and embody detailed financial transactions. Books
However, remember the exception that when the federations registration of Account are the day to day expenses, journals, ledgers. Only in the Rules are
is cancelled, it does not affect the local or chapter if the chapter has an existing Books of Account required to be submitted. The Code does not require it. But by
CBA with the company. They are given the chance to register as an independent virtue of D.O. 9, Books of Account were not required to be submitted anymore.
union and if this is not done, as long as the CBA exists, the chapters legitimacy But books of Account are still subject to inspection by the Department when
exists. It expires only upon expiration of the CBA. This is done to protect the warranted.
employees of the collective bargaining unit. Article 237 requires proof of affiliation of at least ten chapters for a
Now remember the Liberty case is one decided under very peculiar federation. Whats wrong with this? In the first place, no federation can become a
circumstances. The Court ruled as such because of the special circumstances. It federation without locals or chapters. The only way to interpret this provision is it
does not apply as a general rule. Remember the general rule that it is only upon refers to independently registered unions who decide to form a federation as
issuance of a certificate when the union acquires legal personality. The nunc pro affiliates. You cannot have locals/chapters that create a federation, you can only
tunc doctrine was applied in the Liberty case because of the peculiarity of the have a federation creating a local/chapter. The only situation also where a
case. Only in this case did the Court rule that the union acquired legal personality federation can be created by a local/chapter is when two federations merge or
upon the submission of the required documents and so the issuance of certificate form one federation.
of registration should retroact to the filing of the petition of a certification
election. This decision was crucial because a petition for certification election E. CONDITIONS OF MEMBERSHIP AND RIGHTS OF MEMBERS
can only be filed by an LLO.
LABOR CODE
Noticeably the number of required documents to be submitted by
independent unions is much more than those required by a chapter. Obviously, ART. 241. Rights and conditions of membership in a labor
the State favors the creation of locals/chapters. It encourages affiliations for more organization. The following are the rights and conditions of
productivity or greater protection in the workers action. And also, a chapter does membership in a labor organization:

Atty. Marlon Manuel
(a) - No arbitrary or excessive initiation fees - any question of major policy affecting the entire membership of
- shall be required of the members of a legitimate labor the organization,
organization nor - unless the nature of the organization or force majeure renders
- shall arbitrary, excessive or oppressive fine and forfeiture such secret ballot impractical,
be imposed; - in which case the board of directors of the organization may
make the decision in behalf of the general membership.
(b) The members shall be entitled:
- to full and detailed reports (e) No labor organization shall
- from their officers and representatives - knowingly admit as member
- of all financial transactions - or continue in membership
- as provided for in the constitution and by-laws of the any individual who:
organization; - belongs to a subversive organization
- or who is engaged directly or indirectly in any subversive
(c) The members shall: activity;
- directly elect their officers,
- including those of the national union or federation, trade center (d) No person who has been convicted of a crime involving moral
or any similar aggrupation to which their union is affiliated, turpitude shall be eligible for
- by secret ballot at intervals of five (5) years. - election as a union officer or
No qualification requirement for candidacy to any position - for appointment to any position in the union;
shall be imposed other than membership in good standing in
subject labor organization. (g) No officer, agent or member of a labor organization shall
- collect any fees, dues, or other contributions in its behalf or
The secretary or any other responsible union officer shall
- make any disbursement of its moneys or funds
furnish the Secretary of Labor and Employment with a list of
- unless he is duly authorized pursuant to its constitution and by-
- the newly-elected officers,
laws;
- together with the appointive officers or agents who are
entrusted with the handling of funds
(h) Every payment of fees, dues or other contributions by a member
- within thirty (30) calendar days after the election of officers
shall be
or from the occurrence of any change in the list of officers of
the labor organization.
- evidenced by a receipt
- signed by the officer or agent making the collection and
(d) The members shall - entered into the record of the organization to be kept and
- determine by secret ballot, maintained for the purpose;
- after due deliberation,

Atty. Marlon Manuel
(i) The funds of the organization shall not be applied for any - in a written resolution duly authorized by a majority of all
purpose or object other than those: the members at a general membership meeting duly called
- expressly provided by its constitution and by-laws or for the purpose. The minutes of the meeting and the list of
- those expressly authorized by participants and ballots cast shall be subject to inspection by
- written resolution, the Secretary of Labor and Employment or his duly
- adopted by the majority of the members, authorized representatives. Any irregularities in the approval
- at a general meeting duly called for the purpose; of the resolutions shall be a ground for impeachment or
expulsion from the organization;
(j) Every income or revenue of the organization shall be evidenced
by a record showing its source, and every expenditure of its (l) The treasurer of any labor organization and every officer thereof
funds shall be evidenced by a receipt from the person to whom who is responsible for the accounts of such organization or for
the payment is made, which shall state the date, place and the collection, management, disbursement, custody or control of
purpose of such payment. Such record or receipt shall form part the funds, moneys and other properties of the organization, shall
of the financial records of the organization. render to the organization and to its members a true and correct
account of all moneys received and paid by him since he
Any action involving the funds of the organization shall
assumed office or since the last date on which he rendered such
prescribe after three (3) years from the
account and of the balance remaining in his hands at the time of
- date of submission of the annual financial report to the
rendering such account, and of all bonds, securities and other
Department of Labor and Employment
properties of the organization entrusted to his custody or under
- or from the date the same should have been submitted as
his control. The rendering of such account shall be made:
required by law, whichever comes earlier:
- Provided, That this provision shall apply only to a legitimate (1) At least once a year within thirty (30) days after the close
labor organization which has submitted the financial report of its fiscal year;
requirements under this Code: (2) At such other times as may be required by a resolution of
- Provided, further, That failure of any labor organization to the majority of the members of the organization; and
comply with the periodic financial reports required by law and (3) Upon vacating his office.
such rules and regulations promulgated thereunder six (6)
months after the effectivity of this Act shall automatically The account shall be duly audited and verified by affidavit
result in the cancellation of union registration of such labor and a copy thereof shall be furnished the Secretary of Labor and
organization. Employment;
(k) The officers of any labor organization shall not be paid any (m) The books of accounts and other records of the financial activities
compensation other than the salaries and expenses due to their of any labor organization shall be opened to inspection by any
positions officer or member thereof during office hours.
- as specifically provided for in its constitution and by-laws or

Atty. Marlon Manuel
(n) No special assessment or other extraordinary fees may be levied power to hear and decide any reported violation and to mete
upon the members of a labor organization unless: appropriate penalty.
- authorized by a written resolution
- of a majority of all the members Art. 274. Visitorial power. The Secretary of Labor and
- at a general membership meeting duly called for the purpose. Employment or his duly authorized representative is hereby
- The secretary of the organization shall record the minutes of empowered
the meeting including the list of all members present, the a) to inquire into the financial activities of legitimate labor
votes cast, the purpose of the special assessment or fees and organizations
the recipient of such assessment or fees. - upon the filing of a complainant under oath
- The record shall be attested to by the president. - and duly supported by the written consent of at least twenty
percent (20%) of the total membership of the labor
(o) Other than for mandatory activities under the Code, no special organization concerned and
assessment, attorneys fees, negotiation fees or any other b) to examine their books of accounts and other records to
extraordinary fees may be checked off from any amount due an determine compliance or non-compliance with the law
employee without an individual written authorization duly signed c) to prosecute any violations of the law and the union constitution
by the employee. The authorization should specifically state the and by-laws:
amount, purpose and beneficiary of the deduction. Provided, That such inquiry or examination shall not be conducted
during the
(p) It shall be the duty of any labor organization and its officers to - sixty (60) day freedom period
inform its members on the provisions of its - nor within thirty (30) days immediately preceding the date of
- constitution and by-laws, election of union officials.
- collective bargaining agreement,
- the prevailing labor relations system Art. 222. Appearances and fees.
- and all their rights and obligations under existing labor laws. (b) No attorneys fees, negotiation fees or similar charges of any
For this purpose, registered labor organizations may kind arising from any collective bargaining negotiations or
assess reasonable dues to finance labor relations seminars and conclusion of the collective agreement shall be imposed on any
other labor education activities. individual member of the contracting union: Provided, however,
Any violation of the above rights and conditions of That attorneys fees may be charged against union funds in an
membership shall be a ground for cancellation of union amount to be agreed upon by the parties. Any contract,
registration or expulsion of an officer from office, whichever is agreement or arrangement of any sort to the contrary shall be
appropriate. At least thirty (30%) per cent of all the members of null and void.
a union or any member or members specifically concerned may
report such violation to the Bureau. The Bureau shall have the

Atty. Marlon Manuel
OMNIBUS RULES, BOOK V, RULE XIV, XV, XVII, XVIII appropriate. Within ten (10) days from receipt of the assignment, it
shall be mandatory upon such officer to conduct a conciliation
RULE XIV conference and to exert every effort to effect an amicable settlement.
Intra-Union Disputes Where no amicable settlement is reached, the officer concerned
shall use the mandatory conference as a venue to limit the issues, ask
SECTION 1. Complaint; who may file. Any member of a union may clarificatory questions, or convince the parties to agree an a stipulation
file with the Regional Director a complaint for any violation of the of facts. In every case, the officer concerned shall keep minutes of the
constitution and by-laws and the rights and conditions of membership conference signed by and copy furnished the parties.
under Article 241 of the Code. However, if the issue involves the entire
Thereafter, the parties shall be given ten (10) days within
membership of the union, the complaint shall be supported by at least
which to submit their respective position papers addressing all relevant
thirty percent (30%) of the members of the federation,, national
issues and consolidating all their arguments and evidences, after which
union, local/chapter, affiliate or independent union, as the case may
the case shall be deemed submitted for resolution.
be, at the time of the filing thereof. such complaint shall be filed in the
Regional Officer where the union is domiciled. The Regional Director shall have twenty (20) working days from
submission of the case for resolution within which to settle or decide
SECTION 2. Content of complaint. The complaint shall, among the case. The decision shall state the facts and the reliefs granted, if
others, contain the following: any. If the dispute involves a violation of the rights and conditions of
membership enumerated under Article 241 of the Code, the Regional
(a) The person or persons charged;
director, may if specifically prayed for in the complaint and supported
(b) The specific violation/s committed; with substantial evidence, order the cancellation of the registration
(c) The relief/s prayed for; and certificate of the erring union or the expulsion of the guilty party from
the union, whichever is appropriate, provided, however, that no
(d) Other relevant matters.
cancellation shall be ordered unless the complaint is supported by at
Such complaint must be in writing and under oath, and a copy least thirty percent (30%) of the union membership.
thereof served on the respondent.
In addition to the above requirement, the petition on its face SECTION 4. Appeal: finality of decision. The decision of the
must show that the administrative remedies provided for in the Regional Director may be appealed to the Bureau by the aggrieved
constitutional by-laws have been exhausted or such remedies are not party within ten (10) calendar days from receipt thereof, for grave
readily available to the complaining members through no fault of their abuse of discretion or any violation of these Rules.
own.
The appeal shall be under oath, and shall consist of a
memorandum of appeal specifically stating the ground relied upon by
SECTION 3. Procedure. Within twenty-four (24) hours from
the appellant with the supporting arguments and evidence. The appeal
receipt of the complaint, the Regional Director shall immediately
shall be deemed not filed unless accompanied by proof of service of a
assign the case to a Med-Arbiter or appropriate officer of the Labor
copy thereof to the appellee.
Relations Division for conciliation on or hearings, as may be

Atty. Marlon Manuel
Where no appeal is filed within the ten-day period, the decision identifiable parties within the organization or association, each
shall become final and executory, and the Regional Office shall center party shall have the equal representation in the committee.
this fact into the records of the case. b) Upon constitution, the members shall elect the chairman of the
committee from among themselves. In case of disagreement, the
SECTION 5. Where to file appeal. The appellant shall file its reply president shall designate the chairman. In case of an election the
thereto within ten (10) days from receipt of a copy of the appeal. The conduct of which was ordered by the Regional Director, the
Regional Office shall, within five (5) days from receipt of the reply, chairman of the committee shall be a representative of the Labor
forward the entire records of the case to the Bureau. Where no reply is Relations Division of the Regional Office.
received by the regional Office within twenty (20) days when such
reply should have been filed, the Regional Office shall likewise forward SECTION 2. Powers and duties of the committee. Within ten (10)
the entire records of the case to the Bureau. days from its constitution the committee shall, among others, exercise
the following powers and duties:
SECTION 7. Decision of the Bureau final and executory. The
Bureau shall have fifteen (15) calendar days within which to decide the a) Set the date, time and venue of the election;
appeal from receipt of the records of the case. The decision of the b) Prescribe rules on the qualification and eligibility of candidates
Bureau shall be final and executory. and voters;
c) Prepare and post the voters list and the list of qualified
SECTION 8. Execution of the pending appeal. The execution of the candidates;
order of the Regional Director shall automatically be stayed pending
appeal. d) Accredit the authorized representatives of the contending
parties;
RULE XV e) Supervise the actual conduct of the election and canvass the
Election of Officers of Labor Organizations and Workers votes to ensure the sanctity of the ballot;
Associations f) Keep minutes of the proceedings;
SECTION 1. Committee on election: constitution. In the absence g) Be the final arbiter of all election protest;
of any agreement among the members or any provision in the h) Proclaim the winners; and
constitution and by-laws of the labor organization or workers i) Prescribe such other rules as may facilitate the orderly conduct of
association, the following guidelines may be adopted in the election of the election.
officers:
a) Within sixty (60) days before the expiration of the term of the SECTION 3. Counting of votes. As soon as the polls close, the
incumbent offices, the president of the labor organization or committee, shall canvass the votes in the presence of the authorized
workers association shall constitute a committee on election to representatives of the parties; provided, however, that the absence of
be composed of at least three (3) members who are not running such authorized representatives shall not be a ground for us
for any position in the election, provided that if there are suspending the canvassing of ballots.

Atty. Marlon Manuel
RULE XVII
SECTION 4. Protests. At any time prior to the close of election Central Registry of Labor Organizations, Workers Associations
proceedings, any party may file a protest with the committee for any and Collective Bargaining Agreements
violation of the rules prescribed in the election. All protests shall be
entered in the minutes of election proceedings. The committee shall SECTION 1. Forms of registration. Consistent with the policy of the
endeavor to settle or resolve all protests amicably. during or State to promote unionism, the Bureau shall devise or prescribe such
immediately after the close of election proceedings. forms as are necessary to facilitate the process of registration of labor
organizations, workers association and collective bargaining
SECTION 5. Proclamation. Immediately after the canvassing of the agreements or of compliance with all documentary or reporting
ballots, and there being no unresolved protest which, if resolved can requirements prescribed in these Rules.
materially change the results, the committee shall declare the winner
of the election. SECTION 2. Transmittal of records; central registry. The Regional
Any protest left unresolved after the close of the election Office shall, within forty-eight (48) hours from issuance of a certificate
proceedings shall be resolved by the committee within five (5) days. of registration in favor of an independent union or workers
Within this period, the committee may allow the protestant and association, transmit to the Bureau a copy of such certificate,
all oppositors to be heard or to submit their position papers. accompanied by a copy of the documents supporting such registration.
Otherwise, the committee shall resolve the protest on the basis of the The Regional Office shall also transmit to the Bureau a copy of
minutes of the proceedings. every final decision cancelling or revoking the legitimate status of a
Upon resolution of the protest, the committee shall immediately labor organization or workers association, indicating therein the date
proclaim the winners and the later may assume their positions such decision became final.
immediately. In cases of chartering and affiliation under Rule VI or
compliance with the reporting requirements under Rule VII of this
SECTION 6. Protests and petitions for annulment of election results. Book effected directly through the Regional Office, said office shall
Protest or petitions for annulment of the result of an election shall transmit the original set of documents to the Bureau, retaining one set
be filed with and acted upon by the Regional Director in accordance of documents for its file, within forty-eight (48) hours from receipt
with the provisions prescribed in Rule XIV of this Book. No protest or thereof.
petition shall be entertained by the Regional Director unless the issue
raised has been resolved by the committee. RULE XVIII
Administration of Trade Union Funds and Actions Arising
Therefrom
SECTION 1. Right of union to collect dues. The right of the

incumbent bargaining representative to check off and to collect dues

Atty. Marlon Manuel
resulting therefrom shall not be affected by the pendency of a SECTION 5. Period of inquiry or examination. No complaint for
representation case or in intra-union dispute. inquiry or examination of the financial and books of accounts as well
as other records of any legitimate labor organization mentioned in
SECTION 2. Actions arising from Article 241 of the Code. Any Section 3 shall be entertained during the sixty (60) days freedom
action arising from the administration or accounting of union funds period or within thirty (30) days immediately preceding the date of
shall be filed and disposed of as an intra-union dispute in accordance election of union officials. Any complaint so filed shall likewise be
with Rule XIV of this Book. dismissed.
In cases of violation, the Regional or Bureau Director shall
order the responsible officer to render an accounting of funds before SECTION 7. Appeals. The decision of the Regional Director may
the general membership and may, where circumstances warrant/s, be appealed to the Bureau on the ground of grave abuse of discretion
including suspension or expulsing from the union. within ten (10) days from receipt of the parties of a copy thereof.
Where the complaint is directly filed with the Bureau, appeal
SECTION 3. Visitorial power under Article 274. The Regional or from the decision of the Bureau shall be to the Office of the Secretary,
the Bureau Director may inquire into the financial activities of any subject to the requirements prescribed in the immediately preceding
legitimate labor organization and examine their books of accounts and paragraph.
other records to determine compliance with the law and the
organizations constitution and by-laws. Such examination shall be CASES
made upon filing of a complaint under oath, duly supported by the
written consent of at least twenty percent (20%) of the total Tancinco vs. Ferrer-Calleja, 157 SCRA 203
membership of the labor organization concerned, accompanied by Submission of the employees names with the BLR as qualified members of the
proof that the remedies provided for in the immediately preceding union is not a condition sine qua non to enable said members to vote in the
section or in the unions constitution and by-laws have been exhausted election of unions officers. It finds no support in fact and in law. Per public
or otherwise unavailing. Any complaint which does not meet the respondents findings, the April 24, 1986 list consists of 158 union members only
foregoing requirements shall be dismissed outright. wherein 51 of the 56 challenged voters names do not appear. Adopting however
a rough estimate of a total number of union members who cast their votes of
SECTION 4. Venue of financial examination. Where the some 333 and excluding therefrom the 56 challenged votes, if the list is to be the
respondent in the complaint for financial examination is an
basis as to who the union members are then public respondent should have also
independent union, local/chapter, or workers association operating in
disqualified some 175 of the 333 voters.
one regional jurisdiction, the complaint shall be filed in the Regional
office having jurisdiction over respondent. Where the respondent is a It is true that under Article 242(c) of the Labor Code, as amended, only
federation, national union, trade union center or workers association members of the union can participate in the election of union officers. The
operating in more than one regional jurisdiction, the complainant shall question however of eligibility to vote may be determined through the use of the
be filed directly with the Bureau. applicable payroll period and employees status during the applicable payroll
period. The payroll of the month next preceding the labor dispute in case of

Atty. Marlon Manuel
regular employees and the payroll period at or near the peak of operations in case As earlier outlined by petitioners, the Union obviously failed to comply
of employees in seasonal industries. with the requirements of paragraph (n). It held local membership meetings on
In the case before Us, considering that none of the parties insisted on the separate occasions, on different dates and at various venues, contrary to the
use of the payroll period-list as voting list and considering further that the 51 express requirement that there must be a general membership meeting. The
remaining employees were correctly ruled to be qualified for membership, their contention of the Union that the local membership meetings are precisely the
act of joining the election by casting their votes on May 26, 1986 after the May very general meetings required by law is untenable because the law would not
10, 1986 agreement is a clear manifestation of their intention to join the union. have specified a general membership meeting had the legislative intent been to
They must therefore be considered ipso facto members thereof allow local meetings in lieu of the latter.
It submitted only minutes of the local membership meetings when what
Palacol vs. Ferrer-Calleja, 182 SCRA 279 is required is a written resolution adopted at the general meeting. Worse still, the
The principle that employees are protected by law from unwarranted practices minutes of three of those local meetings held were recorded by a union director
that diminish their compensation without their knowledge and consent is in and not by the union secretary. The minutes submitted to the Company contained
accord with the constitutional principle of the State affording full protection to no list of the members present and no record of the votes cast. Since it is quite
labor. evident that the Union did not comply with the law at every turn, the only
The respondent-Union brushed aside the defects pointed out by conclusion that may be made therefrom is that there was no valid levy of the
petitioners in the manner of compliance with the legal requirements as special assessment pursuant to paragraph (n) of Article 241 of the Labor Code.
insignificant technicalities. On the contrary, the failure of the Union to comply Paragraph (o) on the other hand requires an individual written
strictly with the requirements set out by the law invalidates the questioned special authorization duly signed by every employee in order that a special assessment
assessment. Substantial compliance is not enough in view of the fact that the may be validly checked-off. Even assuming that the special assessment was
special assessment will diminish the compensation of the union members. Their validly levied pursuant to paragraph (n), and granting that individual written
express consent is required, and this consent must be obtained in accordance with authorizations were obtained by the Union, nevertheless there can be no valid
the steps outlined by law, which must be followed to the letter. No shortcuts are check-off considering that the majority of the union members had already
allowed. withdrawn their individual authorizations. A withdrawal of individual
The applicable provisions are clear. The Union itself admits that both authorizations is equivalent to no authorization at all. Hence, the ruling in
paragraphs (n) and (o) of Article 241 apply. Paragraph (n) refers to levy while Galvadores that no check-offs from any amounts due employees may be
paragraph (o) refers to check-off of a special assessment. Both provisions must effected without an individual written authorization signed by the employees . . .
be complied with. Under paragraph (n), the Union must submit to the Company a is applicable.
written resolution of a majority of all the members at a general membership
meeting duly called for the purpose. In addition, the secretary of the organization Aldovino vs. NLRC, 298 SCRA 526
must record the minutes of the meeting which, in turn, must include, among The right of a union as a legitimate labor union to represent its members is
others, the list of all the members present as well as the votes cast. expressly guaranteed under Art. 242 of the LC. This right, however does not
deprive its individual members of their concomitant right to file a case in their
own names, nor of their right to withdraw from any case filed by the union in

Atty. Marlon Manuel
their behalf. More importantly, the individual member may seasonably exercise The assailed Resolution lacked the third requirement. Thus, null and
his option to withdraw from the case before its trial, and judgment on the merits void.
are bound by the outcome of the case.
In the present case, it has not been shown that Aldovino and Pimentel Diamonon vs. DOLE, 327 SCRA 283
withdrew from the case undergoing voluntary arbitration, it stands to reason that Diamonon was the National Executive Vice-President of NACUSIP and the Vice
both are bound by the decision rendered thereon. President of the Luzon Chapter for PACIWU. Later on, he learned that he was
removed from both positions, by the National Executive Boards of both unions.
Producers Bank of the Phil. vs. NLRC, Nov. 16, 1998 He sought reconsideration of the decision before the two National Boards. At the
When the retired employees were requesting that their retirement benefits be same time he filed 2 complaints, questioning the validity of his dismissal, and
granted, they were not pleading for generosity but were merely demanding that accusing the unions officers of violations of the constitution, abuse of authority,
their rights, as embodied in the CBA, be recognized. Thus, when an employee and illegal disbursements, with the Med-Arbiter.
has retired but his benefits under the law or CBA have not yet been given, he still Med-Arbiter ruled the removal was invalid, but dismissed the second
retains, for the purpose of prosecuting his claims, the status of an employee case On appeal, the DOLE affirmed the Med-Arbiter, and dismissed the second
entitled to the protection of the LC, one of which is the protection of the labor complaint for failure to exhaust administrative remedies provided in the
union. While the individual complainant are the real party in interest in issues constitution and by-laws of both unions.
involving monetary claims and benefits, the union, however, is not denied its Held: DOLE decision affirmed.
right to sue on behalf of its members.
Diamonon failed to show compliance with Sec. 2, Rule 8 of Book V of
Gabriel vs. Secretary, 328 SCRA 427 the implementing Rules of the Labor Code, which provides that the petitioner
The union officers issued a general membership resolution authorizing check-off must show exhaustion of administrative remedies as provided in the constitution
of attorneys fees, in favor of the lawyers who helped with the CBA negotiations. and by-laws of the union.
The union members refuse to shoulder the fees, and assail the validity of the When the constitution and by-laws of a union provide for the remedies of
resolution. an intra-union dispute, this must be resorted to before judicial recourse is taken to
Held: Resolution invalid as it did not comply with the procedural requisites. administrative or judicial bodies. This is in order to give the grievance machinery
an opportunity to decide the matter, and to prevent unnecessary and premature
Arts. 222 (b) and 241 (o) of the Labor Code state the provisions to be resort to administrative or judicial bodies.
followed for check-off. Art. 241 gives three requisites:
authorization by written resolution of majority of all members of the
collective bargaining unit, at a general meeting called for the purpose;
union secretarys record of the minutes of the meeting;
individual written authorization duly signed by the employee members

Atty. Marlon Manuel
LECTURE otherwise deal with each other in an atmosphere of freedom and
mutual respect,
Remember in terms and conditions of membership, the basic rule is that - disrupt industrial peace
internal matters should be resolved first by the internal rules, the by-laws, before - and hinder the promotion of healthy and stable labor-management
it can be resolved elsewhere (doctrine of exhaustion). Under Art. 241, (n) and (o), relations.
special assessment can be levied, following certain requirements, and collected Consequently, unfair labor practices are not only violations of
following certain requirements. Remember also that levy is different from the civil rights of both labor and management but are also criminal
collection. There cannot be a valid collection without a valid levy. offenses against the State which shall be subject to prosecution and
Requirements of a valid levy: general membership resolution, in a punishment as herein provided.
general meeting called for the purpose, approving the special assessment. A levy - Subject to the exercise by the President or by the Secretary of
is a special assessment, hence it cannot be imposed without the required Labor and Employment of the powers vested in them by Articles
resolution. It cannot be imposed by the officers, even if it is approved by 263 and 264 of this Code,
management. Only after a valid levy, then comes in the collection. Collection - the civil aspects of all cases involving unfair labor practices,
may be done in two ways: direct collection from each member, but that is a which may include claims for actual, moral, exemplary and other
tedious process. The other way is by check-off. Managements cooperation is forms of damages, attorneys fees and other affirmative relief,
needed here. The union submits a document to management, reflecting the list of - shall be under the jurisdiction of the Labor Arbiters. The Labor
collection, the members of the union, and each members authorization to collect. Arbiters shall give utmost priority to the hearing and resolution of
Mgt. will deduct such amounts from each salary and remit the same to the union. all cases involving unfair labor practices. They shall resolve such
You can levy only upon resolution, and you can collect via check-off only upon cases within thirty (30) calendar days from the time they are
individual valid authorization from each member. Check-off is not a matter of submitted for decision.
right. It is something that must be embodied in the CBA in order to obligate Recovery of civil liability in the administrative proceedings shall
management to cooperate. bar recovery under the Civil Code.
No criminal prosecution under this Title may be instituted:
F. UNFAIR LABOR PRACTICES - without a final judgment, finding that an unfair labor practice
was committed, having been first obtained in the administrative
LABOR CODE proceeding referred to in the preceding paragraph.
- During the pendency of such administrative proceeding, the
Art 247. Concept of unfair labor practice and procedure for running of the period of prescription of the criminal offense herein
prosecution thereof . penalized shall be considered interrupted:
Unfair labor practices: - Provided, however, That the final judgment in the
- violate the constitutional right of workers and employees to self- administrative proceedings shall not be binding in the criminal case
organization, nor be considered as evidence of guilt but merely as proof of
- are inimical to the legitimate interests of both labor and compliance with the requirements herein set forth.
management, including their right to bargain collectively and

Atty. Marlon Manuel
- Provided, That the individual authorization required under

Art. 248. Unfair labor practices of employers. It shall be Article 242, paragraph (o), of this Code shall not apply to the
unlawful for an employer to commit any of the following unfair labor non-members of the recognized collective bargaining agent;
practices: (f) To dismiss, discharge or otherwise prejudice or
(a) To interfere with, restrain or coerce employees in the exercise of discriminate against an employee for having given or being about
their right to self-organization; to give testimony under this Code;
(b) To require as a condition of employment that a person or an (g) To violate the duty to bargain collectively as prescribed
employee shall not join a labor organization or shall withdraw by this Code;
from one to which he belongs; (h) To pay negotiation or attorneys fees to the union or its
(c) To contract out services or functions being performed by union officers or agents as part of the settlement of any issue in
members when such will interfere with, restrain or coerce collective bargaining or any other dispute; or
employees in the exercise of their right to self-organization; (i) To violate a collective bargaining agreement.
(d) To initiate, dominate, assist or otherwise interfere with the The provisions of the preceding paragraph notwithstanding,
formation or administration of any labor organization, including only the officers and agents of corporations, associations, or
the giving of financial or other support to it or its organizers or partnerships who have actually participated in, authorized or ratified
officers; unfair labor practices shall be held criminally liable.
(e) To discriminate in regard to wages, hours of work, and other
terms and conditions of employment in order to encourage or Art. 249. Unfair labor practices of labor organizations. It
discourage membership in any labor organization. shall be unfair labor practice for a labor organization, its officers,
Nothing in this Code or in any other law shall stop the agents, or representatives:
parties from requiring membership in a recognized collective (a) To restrain or coerce employees in the exercise of their right to
bargaining agent as a condition for employment, except of those self-organization. However, a labor organization shall have the
employees who are already members of another union at the right to prescribe its own rules with respect to the acquisition or
time of the signing of the collective bargaining agreement. retention of membership;
Employees of an appropriate collective bargaining unit
who are not members of the recognized collective bargaining (b) To cause or attempt to cause an employer to discriminate
agent: - against an employee,
- may be assessed a reasonable fee equivalent to the dues and - including discrimination against an employee with respect to
other fees paid by members of the recognized collective whom membership in such organization has been denied,
bargaining agent, - or to terminate an employee on any ground other than the
- if such non-union members accept the benefits under the usual terms and conditions under which membership or
collective agreement: continuation of membership is made available to other
members;

Atty. Marlon Manuel
(c) To violate the duty or refuse to bargain collectively with the mean flagrant and/or malicious refusal to comply with the
employer, provided that it is the representative of the economic provisions of such agreement.
employees; The Commission, its Regional Offices and the Regional Directors
(d) To cause or attempt to cause an employer to pay or deliver or of the Department of Labor and Employment shall not entertain
agree to pay or deliver any money or other things of value, in the disputes, grievances or matters under the exclusive and original
nature of an exaction, for services which are not performed or jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators
not to be performed, including the demand for a fee for union and shall immediately dispose and refer the same to the grievance
negotiations; machinery or voluntary arbitration provided in the collective bargaining
(e) To ask for or accept negotiation or attorneys fees from agreement.
employers as part of the settlement of any issue in collective CASES
bargaining or any other dispute; or
Insular Life Assurance Co. Employees Association vs. Insular Life Assurance
(f) To violate a collective bargaining agreement.
Co., 37 SCRA 244
The provisions of the preceding paragraph notwithstanding, The company sent letters to each striker stating its recognition of the employees
only the officers, members of governing boards, representatives or right to strike, but should the latter wish to return to work, they may do so. The
agents or members of labor associations or organizations who have letter listed benefits for those who wished to work. Some were persuaded by the
actually participated in, authorized or ratified unfair labor practices letter, but others continued with the strike. There were also occasions where
shall be held criminally liable. management personnel tried to break through the picket lines. The company also
offered free coffee as bribe to abandon the strike. There was also discrimination
Art. 261. Jurisdiction of voluntary arbitrators and panel of
in selecting which employees were rehired.
voluntary arbitrators. The Voluntary Arbitrator or panel of
Voluntary Arbitrators shall have The employers are guilty of ULP. The seemingly innocent letters, when
- original and exclusive jurisdiction to hear and decide all taken together with all the other acts clearly show the intent to interfere with the
unresolved grievances right to collective bargaining. The incentives in the letters as well as threats of
- arising from the interpretation or implementation of the reprisals upon failure to comply cannot be read otherwise than union busting.
Collective Bargaining Agreement Such acts undermine all that the union wishes to do for the benefit of the
- and those arising from the interpretation or enforcement of employees.
company personnel policies referred to in the immediately The test applied to determine whether the individual acts constitute ULP
preceding Article. was totality of conduct. Factors to be taken into consideration are:
- Accordingly, violations of a Collective Bargaining Agreement, - history of relations between employees and employer;
except those which are gross in character, shall no longer be - anti-union bias;
treated as unfair labor practice and shall be resolved as grievances - any other plan of coercion and interference.
under the Collective Bargaining Agreement. For purposes of this
Article, gross violations of a Collective Bargaining Agreement shall

Atty. Marlon Manuel
Manila Hotel Co. vs. Pines Hotel Employees, 47 SCRA 88 Mabeza vs. NLRC, 271 SCRA 670
Whether or not the Pines Hotel incurred losses is of no moment. The fact that A pivotal question in any case where ULP on the part of the employer is alleged,
management granted Christmas bonus to its employees, the same should have is whether or not the employer has exerted pressure, in the form of restraint,
been divided equally as it has been done before. Aside from the Christmas bonus interference or coercion, against his employees right to institute concerted action
of 50% that was allocated to the Manila Hotel employees, some of them were for better terms and conditions of employment. Without doubt, the act of
granted year-end bonus while the Pines Hotel employees did not receive any. compelling employees to sign an instrument indicating that the employer
This is a clear case of discrimination it appearing that there is no union at the observed labor standards provisions of law when he might have not, together
Manila Hotel of Taal Vista Hotel and considering further that lately respondents with the act of terminating or coercing those who refuse to cooperate with the
had always been beset with demands for better living conditions from the employers scheme constitutes ULP. The first act clearly preempts the right of the
complainant union as well as strikes being staged by the union. hotels workers to seek better terms and conditions of employment through
Circumstances showing unfair discrimination of union members where concerted action.
a company contrary to previous practice of dividing equally to all employees a
certain percentage of its net profits as Christmas bonus, allocated 50% only to its Alhambra Industries vs. CIR, 35 SCRA 550
Manila Hotel employees, while Pines Hotel employees, where there exists a labor The petitioner is the successor-in-interest of the old company Alhambra Cigar &
union, did not receive any year end bonus. Cigarette Manufacturing Co, that was found guilty of ULP, and was ordered by
the Court to reinstate the workers and pay backwages. The petitioner refuses to
Sime Darby Pilipinas Inc. vs. NLRC, 289 SCRA 86 comply with the said order (which has never been executed) on the ground that it
The change effected by management with regard to working time is made to made innovations in some of the working organizations formerly under the
apply to all factory employees engaged in the same line of work whether or not Alhambra Cigar & Cigarette Manufacturing Co., which affected the former
they are members of a union. Hence, it cannot be said that the new scheme positions by abolishing them for, legitimate business reasons as explained in said
adopted by management prejudices the right of respondent to self-organization. pleading, Annex L hereof, and there are no substantially equivalent positions for
them to occupy, and praying that the Honorable Court conduct hearings at which
Management is free to regulate, according to its own discretion and the petitioner will introduce evidence in support of these allegations, and that
judgment, all aspects of employment, including hiring, work assignments, after such hearings, the petitioner be declared exempted from reinstating and
working methods, time, place and manner of work, processes to be followed, paying the back wages of the aforesaid employees.
supervision, lay off of workers, and discipline, dismissal and recall of workers.
Further, management retains the prerogative whenever exigencies of the service Held: The basic theory of the Industrial Peace Act is to recognize the right of
so require, to change the working hours of its employees. So long as such self-organization to enable labor unions to bargain collectively and to avoid
prerogative is exercised in good faith and for the advancement of the employers unfair labor practices on the part of labor and management in order to attain
interest and not for the purpose of defeating or circumventing the rights of industrial democracy. The sooner then an inquiry is made into alleged unfair
employees under special laws or under valid agreements, this Court will uphold labor practices and the sooner it is stopped, the better for harmonious labor-
such exercise. management relations. To discourage each party from committing such unfair
labor practices, sanctions are provided for. Here, management was at fault, and
petitioner, as the successor, can be compelled to reinstate and to pay back wages.

Atty. Marlon Manuel
That has not been complied with. If we reopen the case to allow petitioner to the act is intended by management to R/I/C. So the Court has said that, applying
introduce evidence with respondent Court to show why it has not complied with the totality of conduct doctrine it may be shown that mgt. is guilty of ULP even if
the order of reinstatement, we shall in effect be rendering futile the rights of labor the attempt was unsuccessful.
and frustrating the policies of the Industrial Peace Act. Considering the But what if management was really in good faith in doing such act? The
circumstances disclosed, we cannot and should not do so. good faith defense is available to mgt. and it is incumbent upon management to
establish this. Also, the good faith defense is available whether or not the act
LECTURE created an adverse effect. For example, there is a declaration of strike. Then
management announces an across the board wage increase to be released a day
What is ULP? It is a violation of the right to self-organization. Item (a) of before the strike. The act of releasing the bonus will produce an evil effect
Art. 248 is an all-encompassing provision-to interfere, restrain or coerce the right many employees will not go to the strike. A happy employee will not do such a
to self-organization. Does that mean we can do away with subparagraphs (b) to thing! On the outset it seems that management is guilty of ULP. But management
(i)? Are all discriminations ULP? How can discrimination refer to the right to may show that it is in good faith. For instance, that the bonus was actually
self-organization? approved and specific date for release was set in a Board Resolution a year ago,
ULP may be done whether one is a union member or is not a union and that it was coincidental that the intended date of release was the day before
member. But remember violation of a CBA is ULP only if it is a gross violation the strike. Hence, the good faith or bad faith of the employer should be
of the economic provisions. For management to be guilty of ULP it is not considered.
necessary that the interference, coercion or restraint be a successful attempt. Since ULP is illegal, no management employee will do it blatantly, thats
Remember the Insular case. Management was not successful. why it is usually subjective. Thats why we must consider all possible aspects,
What is the test of ULP? Some acts may in fact be innocent in nature. and even go into managements mind to determine whether ULP or not..
Like in the Insular case. Remember the doctrine TOTALITY OF CONDUCT. Now, if the closure of a company is questioned whether it is done in
Look at the acts and circumstances as a whole, not just the single act. In order to good faith or bad faith, the issue is usually resolved in favor of labor. For
show managements intention, one must establish that there is a tendency to purposes of the bar, the theoretical principle of resolving all doubts in favor of
restrain, coerce or interfere with the right to self-organization, in the absence of labor is a good theory to be applied, even though the opposite is what happens in
any clear case of actual interference, restrain or coerce. That management reality. But since the bar is a theoretical exam, then apply the theory .
intended to R/I/C. By looking at the totality of the situation and the
circumstances, it may be shown that ULP is committed. ULP is a violation of the right to self-organization. There is no doubt
about that. But looking at the subparagraphs of Art. 248, specifically subpar. (f),
So, in order to establish ULP, show the totality of the situation and show can it apply to non-union members? Can it apply when it is not related to union
the link between the act itself and the employees right to self-organization. If the activity issues? The case of Mabeza clarifies that. As the Court held there, even
act has a tendency to R/I/C, then in all probability, considering all the without any union or union-organizing activity, the employer CAN commit ULP.
circumstances, management wanted to R/I/C. The act is ULP. For instance, is when an employee is dismissed because he asserts his rights. Art.
It may seem that the test is quite subjective. This is because ULP must be 248 aims to cover any threat of preventing the start of self-organizing activities,
intended to R/I/C and is deliberate. So in many cases it is difficult to prove that specifically when the employees are on the start of a consciousness as to their

Atty. Marlon Manuel
rights and take initial steps to assert these rights. The Court considered these What can the local/chapter do once the mother union loses its
ULP, because these were acts of nipping the bud. The Mabeza case personality? They can register as an independent union to acquire legitimate
harmonizes/relates Art. 248 (f) with 248 (a). Hence, (a) also encompasses (f) = personality. But prior to issuance of the certificate of registration, the union has
ULP. no legitimate personality. Thats why the Rules give that leeway period for the
Now, Art 248 (f) applies only when the employee testifies against the local/chapter to register as an independent union when the mother union loses its
employer, unless he is dismissed for refusing to testify in favor of management. legal personality.
Is the enumeration under Art. 248 exclusive? Actually, it is immaterial to Question 1
say so. Because of the all-encompassing proviso of 248 (a). Can (a) then be left
alone as a definition of ULP? Yes! The other subparagraphs are illustrations of My intended answer is its not ULP. It is merely a correction of an unjust
(a). However, the other subparagraphs are good illustrations, to give us a basis situation. Can you take it to punish the employer for that? The intention may
for conclusion that the specifically stated act is ULP, which is hard to determine have been clear that employer wanted to avoid the formation of a union. From a
looking at (a) alone. (a) is too broad. So if the act does not fall under (b) (i), but business perspective, the formation of a union is costly. The only question at this
may still fall under (a), it is considered an act of ULP. point is should the employer be punished for the correction of a wrong situation,
even though the deepest intent was to avoid any possibility of formation of a
union.
POST-MIDTERMS Essentially ULP is a factual question. The more defensible position in
this case is that the employers act was an act done in good faith. It is not a clear
REVIEW OF THE MIDTERMS QUESTIONS: interference of the right to self-organization. In Mabeza, the employer committed
something wrong against the employee. In this question, nothing wrong was done
Last question against the employees. So I am not saying that Mabeza is not applicable. Its an
The CBA is not registered hence the legal personality of the union is entirely different factual situation. What is looked into is the act complained of as
extinguished. But the CBA is effective even without the exclusive bargaining ULP, not the general business desire not to have a union, which is most often the
agent. The legal personality of the union-exclusive bargaining agent has nothing sentiment of any employer. In this question, there is no clear cut case for ULP if
to do with the effectivity of the CBA. The provision in the Omnibus Rules must what is used is the act in question.
be followed strictly. So, in this case, since there is no exclusive bargaining
agent/representative to act in behalf of the employees, the employees must take Question 3
into their own hands the necessary measures to enact the CBA provisions. For By denying the employee the existence of the er-ee relationship, the
instance, when they seek to file a ULP case against the employer for employer excludes them from the coverage of the CBA on such pretext, that
nonobservance of the CBAs economic provisions, they must do so through a makes a case for ULP. So the labor-only contracting issue will make a case for
class suit with each employee in the bargaining unit made a party. They cannot ULP. Thats Alhambra Industries vs. CIR.
use the employers act as a ground for strike either, because only a legitimate Even if the contractor exercises full control but it does not have enough
labor union may conduct a strike. capital or equipment, there is still labor-only contracting. The contractor is

Atty. Marlon Manuel
merely an agent of the principal, thus the control of the contractor should be V. RIGHT TO COLLECTIVE BARGAINING
considered as exercising control in behalf of the principal.
Is the question of labor-only contracting material to order payment of A. DUTY TO BARGAIN COLLECTIVELY
wages in a case for illegal dismissal? No because the principal is always liable
for nonpayment of wages. LABOR CODE
Question 4 ART. 250. Procedure in collective bargaining. The following

procedures shall be observed in collective bargaining:
The Vanessa case The contract is an ambiguous contract, hence she
should be considered a regular employee. (a) When a party desires to negotiate an agreement, it shall serve a
written notice upon the other party with a statement of its
The project ee turned into an accounting clerk under a prob. Contract proposals. The other party shall make a reply thereto not later
There is no rehiring. She is not considered a regular employee. The rehiring is than ten (10) calendar days from receipt of such notice;
not for another project but for a regular position under a probationary contract. (b) Should differences arise on the basis of such notice and reply,
Maraguinot does not apply. either party may request for a conference which shall begin not
later than ten (10) calendar days from the date of request;
(c) If the dispute is not settled, the Board shall intervene upon
request of either or both parties or at its own initiative and
immediately call the parties to conciliation meetings. The Board
shall have the power to issue subpoenas requiring the
attendance of the parties to such meetings. It shall be the duty
of the parties to participate fully and promptly in the conciliation
meetings the Board may call;
(d) During the conciliation proceedings in the Board, the parties are
prohibited from doing any act which may disrupt or impede the
early settlement of the disputes; and
(e) The Board shall exert all efforts to settle disputes amicably and
encourage the parties to submit their case to a voluntary
arbitrator.
ART. 251. Duty to bargain collectively in the absence of

collective bargaining agreements. In the absence of an
agreement or other voluntary arrangement providing for a more
expeditious manner of collective bargaining, it shall be the duty of the

Atty. Marlon Manuel
employer and the representatives of the employees to bargain In case of a deadlock in the renegotiation of the collective
collectively in accordance with the provisions of this Code. bargaining agreement, the parties may exercise their rights under this
ART. 252. Meaning of duty to bargain collectively. The duty to Code.
bargain collectively means:
the performance of a mutual obligation ART. 254. Injunction prohibited. No temporary or permanent
to meet and convene promptly and expeditiously in good faith injunction or restraining order in any case involving or growing out of
for the purpose of negotiating an agreement with respect to wages, labor disputes shall be issued by any court or other entity, except as
hours of work and all other terms and conditions of employment otherwise provided in Art.s 218 and 264 of this Code.
including proposals for adjusting any grievances or questions
arising under such agreement and executing a contract CASES
incorporating such agreements if requested by either party,
but such duty does not compel any party to agree to a proposal or Kiok Loy v NLRC, 141 SCRA 179
to make any concession. While it is the mutual obligation of labor and management to bargain
collectively, the employer is not under any legal duty to initiate negotiation. The
ART. 253. Duty to bargain collectively when there exists a mechanics of collective bargaining is set in motion only when the following
collective bargaining agreement. When there is a collective jurisdictional pre-conditions are present:
bargaining agreement, the duty to bargain collectively shall also mean
that neither party shall terminate or modify such agreement during its 1. Possession of status of majority representation of the employees
lifetime. representative in accordance with any means of selection or designation
as provided in the Labor Code;
However, either party can serve a written notice to terminate or
modify the agreement at least sixty (60) days prior to its expiration 2. Proof of majority representation; and
date. 3. Demand to bargain.
It shall be the duty of both parties to keep the status quo and When these requisites are present and the company still refuses to submit
to continue in full force and effect the term and conditions of the a counter-proposal, such refusal, if considered in relation to the entire bargaining
existing agreement during the 60-day period and/or until a new process, may indicate bad faith and be regarded as ULP. In this case, the court
agreement is reached by the parties. found the company guilty of ULP where it was shown that it refused to make a
counter proposal, stalled the negotiation by a series of postponements and non-
ART. 253-A. Terms of a collective bargaining appearance at the hearings conducted, and unduly delayed the submission of its
agreement. Any collective bargaining agreement that the parties
financial statements.
may enter into shall, insofar as the representation aspect is concerned,
be for a term of five (5) years. No petition questioning the majority
status of the incumbent bargaining agewhall agree on the duration of
retroactivity thereof.

Atty. Marlon Manuel
Lakas ng Manggagawang Makabayan v Marcelo Enterprises, 118 SCRA 422 whose businesses were completely paralyzed by major strikes cannot resume full
This case involves several issues: operation at once.
When the CBA was about to reach its expiration date, LAKAS requested
for renegotiation with the company and submitted its proposal. It turns out Not all the striking workers were allowed to return to work.
however that several unions were likewise demanding for renegotiation. The Held: It should be noted that only those who refused to fill up the questionnaire
company, instead of submitting a counter proposal to LAKAS, informed the were not readmitted. All those who filled up their respective forms were
union of the existence of the conflicting demands from the other unions and scheduled for work and were readmitted. The stoppage of the employees work
suggested that the unions file the necessary complaint in court to finally was not the direct consequence of the companys act. Their economic loss should
determine who is the authorized representative. LAKAS claims that management not be shifted to the employer.
refused to bargain with it when it did not submit a counter proposal.
Held: Management did not ignore the demand for collective bargaining although LAKAS brought this action in behalf of all employees who were not allowed to
it did not submit a counter proposal. There exists in this case a real issue as to return to work, whether or not they are members of LAKAS.
representation and managements suggestion that the unions file the necessary Held: A labor union cannot bring an action I behalf of employees who are
complaint in view of the fact that there are several unions claiming to represent members of another union even if said employees signed the complaint. The
the employees does not constitute failure or refusal to bargain. proper remedy is to drop the union as party to the action and place the individual
names of the employees instead.
Because of the companys alleged refusal to bargain, LAKAS staged a strike.
Held: Where there exists a legitimate issue as to which of several unions is the San Miguel Corp. Employees Union-PTGWO v Confesor, 262 SCRA 81
legitimate representative of employees, it is ULP for one of the contending SMC was restructured. Two of its divisions were turned into separate distinct
unions to stage a strike and demand that the employer sit down with it for corporations. The union insists on uniting the employees of the 2 new
collective bargaining. corporations into one bargaining unit. The Court ruled that the employees from
the new corporations constituted separate bargaining units for the following
The company asked the striking workers to fill up forms on when they are reasons:
available for work. The union says this is ULP. The company says it merely 1. The workers are employed by two different employers as a
wanted to know when the workers would show up for work so it can come up consequence of incorporation (separate juridical personality)
with a reasonable working schedule. It reasons that the two strikes staged by the 2. The members of a bargaining unit must have mutual interests.
employees resulted in the complete paralysis of the companys business and it Considering the spin-off, the companies will consequently have their
cannot just readmit all returning workers in one big force or as each demanded respective and distinctive concerns in terms of nature of work,
readmission. wages, hours of work and other conditions of employment.
Held: An employer may be justified in requiring a reasonable scheduling of
working hours of returning striking employees and inquiring into their time
availabilities. The Court took judicial cognizance of the fact that companies

Atty. Marlon Manuel
Mindanao Terminal and Brokerage Service Inc. v Roldan-Confesor, 272 SCRA no agreement reached within 6 months from the expiry of the 3 years that follow
161 the execution of the CBA, the law expressly gives the parties, and not anybody
The signing of the agreement is not determinative of the question whether the else, the discretion to fix the effectivity of the agreement. In the absence of a new
agreement was entered into within the 6 months from the expiry of the previous CBA, the parties must maintain the status quo and must continue in full force and
agreement. The point of reckoning is the meeting of the minds. (Marlon: prove effect the terms and conditions of the existing agreement until a new agreement
meeting of the minds through the minutes) is reached.
Samahang Manggagawa sa Top Form Manufacturing-UWP v NLRC, 7 MERALCO v Quisumbing, 326 SCRA 172
September 1998 This is a Motion for Reconsideration of the decision in the immediately
The union claims the benefits of an agreement allegedly entered into during the preceding case.
negotiation, as per the minutes, but was not incorporated in the CBA as written. Held: CBA arbitral awards granted after six months from the expiration of the
Held: The union may not validly claim that the proposal embodied in the last CBA shall retroact to such time agreed upon by both employer and the
minutes of the negotiation forms part of the CBA. The CBA is the law between employees or their union. In the absence of such agreement, the award shall
the parties and compliance therewith is mandated by the law. retroact to the first day after the 6-month period following the last day of the
Note: The minutes is determinative only of the moment when there was a CBA, should there be one, or, in the absence of a CBA, the Secretarys
meeting of the minds. As to what was particularly agreed upon, it is the CBA as determination of the date of retroactivity as part of his discretionary powers over
written which shall control. arbitral awards shall control.
MERALCO Cases MERALCO v Quisumbing, 326 SCRA 172

Facts: A CBA was entered into with a term of 5 years. Nearing its 3 rd year of This is a Motion for Partial Modification of the decision in the immediately
effectivity, the parties met to renegotiate. The remaining 2 years of the CBA, preceding case.
which is the subject of the renegotiation in this case, was for the period 1 Held: The arbitral award shall retroact to the first day after the 6-month period
December 1995 to 30 November 1997. following the expiration of the last day of the CBA. The CBA in this case expired
on 1 December 1997. The first day after the 6-month period is 1 June 1996. The
MERALCO v Quisumbing, 302 SCRA 173 CBA shall be effective from 1 June 1996 to 31 May 1998 (effective for 2 years).
Nearing the 3rd year of the effectivity of the CBA, the parties met to renegotiate.
Unable to come to an agreement during the renegotiation, and there existing the New Pacific Timber & Supply Co. Inc. v NLRC, 328 SCRA 404
imminence of a strike, the Secretary of Labor assumed jurisdiction over the labor Until a new CBA has been executed by and between the parties, they are duty
dispute. The Secretary resolved the issue through an order setting forth the bound to keep the status quo and to continue in full force and effect the terms and
approved economic demands. The effective date of the Secretarys order is in conditions of the existing agreement. The law does not provide for any exception
question. or qualification as to which of the economic provisions of the existing agreement
Held: The date of effectivity shall be as agreed upon by the parties. The law are to retain force and effect. Therefore, it must be understood as encompassing
requires that a CBA be renegotiated within 3 years from its execution. If there is all the terms and conditions in said agreement.

Atty. Marlon Manuel
Further, when a CBA is entered into by a union representing the Each side is represented by a panel, one for the bargaining agent, and for
employees and the employer, even non-member employees are entitled to the management, to bargain collectively. If they fail to meet within ten days, is that a
benefits of the agreement. violation of the right? The law says to meet promptly and expeditiously. If not, it
will be a violation of the duty. It depends on the circumstances for delay. If
LECTURE management failed to submit a counter-proposal on time, or meet on time, and
has no good reason to do so, then it may be a violation.
DUTY TO BARGAIN COLLECTIVELY Now, if they have met promptly and expeditiously, but not in good faith,
You must know the elements of the duty to bargain collectively by heart! it may be a violation. For instance, it manifests bad faith when the management
What is the duty to bargain collectively? sends as panel people who dont know anything about bargaining, not the usual
people who represent management in collective bargaining. Thats why the union
It is the mutual obligation both of the employer and employee to:
usually asks for authorization from the management, that will ensure the union
- meet and convene that whatever the panel says will bind management.
- promptly and expeditiously Example of bad faith management comes to the bargaining table and
- in good faith announces deadlock na tayo on the first day of negotiations.
- negotiate Convening promptly and expeditiously in good faith to negotiate. On the
- the TACOE/ grievance machinery first day, the union usually asks for the moon. Management usually digs deep
deep down. Then each panel adjusts its demands and try to meet in the middle.
- execute a written document (CBA) Hopefully they end up both happy, because they get into a position which is
- respect the CBAnot to terminate or modify the CBA during its better than the minimum demand they were willing to settle on. Sometimes they
lifetime; contract bar rule do, oftentimes they dont-which leads to a deadlock. Thats how negotiations
It is an obligation because it is mandatory-it must be done, otherwise, happen. A lot has to do with psychological warfare.
nonperformance will merit a sanction. A CBA made by labor may be imposed on Remember the Labor Code states that there is no compulsion to agree to
management even without negotiations. Aside from that, management may be a proposal or submit to a concession. The obligation to negotiate is merely an
found guilty of ULP. Also, the LLO may exercise its right to strike. obligation to be flexible and not to give in always to the demand of the other
Meet and convene. What does that mean? Meet in person and face-to- parties. The Code states the negotiations must be as to the TACOE and grievance
face. The bargaining representative has the primary obligation to start the machinery. These two factors are the coverage of the obligations. These are the
bargaining process. How is it started? The bargaining representative submits a mandatory negotiable provisions. Matters over and above that is no longer an
proposal, management submits a counter-proposal, and then they meet and obligation but the parties may negotiate on such matters if they wish to do so,
bargain at the bargaining table. How does a proposal look like? It is in the form though it wouldnt be a violation of the duty if not tackled.
of a draft CBA containing all the provisions labor wants in the CBA. Written agreement. Negotiations must end with a written agreement
Management replies usually by giving a letter saying labors request cannot be which should be registered. Registration is necessary to protect the
granted. That starts the bargaining process. local/chapters legal personality. Also, it is to protect the status of the union as the

Atty. Marlon Manuel
sole and exclusive bargaining agent which status cannot be challenged until after But can the parties renegotiate one year after the effectivity of the CBA?
the lapse of 4 years and 300 days. It may be challenged only within the 60-day Yes. There is no prohibition. Can they renegotiate every year after that? Yes,
freedom period. Otherwise, rival unions may file a petition for certification there is no prohibition. Assuming they renegotiated the non-representation CBA
election anytime. Actually, management itself may ask for registration for the provisions on Jan. 24, 2003- the first year of the CBA. Will that be good until
CBA. In fact, it is mgt. who pays the filing fees. It is also for mgt.s protection, January 24, 2007? Since it is a renegotiation, it is a new agreement. It will be up
because it will ensure industrial peace for at least five years. to the parties if they choose to make the new agreement subsist up to January 24,
What is the term of a CBA? Five years as to representation and three 2007. It is entirely up to them to decide the term of effectivity of the CBAs non-
years as to non-representation provisions are concerned. The three-year period representation provisions. BUT despite whatever term they agree upon, they have
may be shortened by agreement of the parties. to renegotiate in by January 25, 2006 within three years from the last
renegotiation and execution of the CBA.
For example: CBA entered into on January 25, 2002. It will be effective
until January 24, 2007 (representation) and January 24, 2005 (non-representation The overlapping of the terms in representation and non-representation is
provisions). However, the parties may validly agree that the non-representation quite complicated. In the end of the fifth year, there may be a new bargaining
provisions be negotiated on January 24, 2004. The law says the other provisions representative, but the non-representation provisions may have been extended
shall be renegotiated not later than three years. Hence, they may negotiate on the beyond the fifth year. The overlapping according to jurisprudence is to promote
second year. industrial peace. The new representative must respect the non-representation
provisions. So, from 1997 to 1998, it is considered the trial period, an adjustment
*Keep in mind that the duty to renegotiate is different from the period. The new agent cannot demand negotiations kasi may one year pa. Mgt.
effectivity of the economic provisions of the CBA. The law does not limit its wont negotiate as well. But this scenario does not promote industrial peace. The
effectivity, unlike the representation status which the law says it must be for a new agent of course is a rival union and wont be happy with the CBA entered
term of five years. So, the CBA may say the economic provisions shall be valid into between management and the old agent who is a rival union. In fact the CBA
for 5 years, or any number of years, but the union has to demand renegotiation is always an issue in certification electionsPalpak naman ang CBA na yan.
within the three years, anytime within the three year period.
Thats why unions/bargaining agents seek to avoid this scenario-
Now, as long as management can comply with the three-year deadline, sinasabay nila ang effectivity ng non-representation provisions sa representation
then they are not forced to negotiate earlier than three years. What is the practical aspect ng CBA. Ginagawang parehong 5 years. In fact I have not seen a CBA
implication of that? If the union makes a demand one year after CBAs that has extended its non-representation aspects beyond five years. On
effectivity, management can ignore that and such act is not ULP. Management managements side, why will they agree to extend the term of the CBA beyond
still has the remaining two years to comply and mgt. can opt not to renegotiate at the authority of the bargaining agent?
that point. It would be reasonable however to demand renegotiation when nearing
the end of the third year. It is difficult to peg a cut-off point. It depends on the Now, the parties may agree that the modified provisions take effect until
circumstances and the possible reasons of management. But if the parties choose 2009-even beyond the period of representation. Then the bargaining agents
to renegotiate one year after, they may do so - there is no prohibition, but neither status is challenged by a rival union. Such CBA will still be effective, and if the
is it a duty. There is no ULP at this point. rival union wins as the new bargaining agent, they have to respect the CBA. The
new agent can demand renegotiation but it may take effect only after 2009.

Atty. Marlon Manuel
The reckoning point for the three year period for renegotiation is the last not demand. there is no duty If it is not demanded, and the three year period
day of the last negotiations. That should be the interpretiation of execution of lapsed, there is no duty to negotiate anymore. And such act is not ULP
the CBA. Because when you renegotiate, you are executing new provisions. Now for example January 24, 2002, expiration of the CBA. The
My interpretation of renegotiation is that the parties have to reopen union/bargaining agent was not changed. Starting February 1, negotiations
negotiations within three years, not that they have to agree on new provisions started, and ended September 1, 2002. When is the agreement of the parties
within three years. What is the reason for the three year rule? Many economic reckoned? From the meeting of the minds, not at the time of signing. Meeting of
developments can occur within three years. That makes a need to revisit the the minds is when the parties come to an agreement. In the absence of formal
positions of the parties, and to fix the CBA to favor labor. I doubt the CBA can signing, this is proven by the very provisions of the CBA. Remember too that
ever be adjusted to something lower than what labor is already receiving. That only the written provisions of the CBA may be enforced. If the agreed provisions
would be a violation of the non-diminution rule. Such benefits already enjoyed (while at the negotiating table) are not in the written CBA, sorry na lang!! So the
can only be improved, not diminished in the CBA. panel must read the written CBA before agreeing to be bound by it. But what
Many CBAs have annual wage increase plans. So for instance, year usually happens is minamadali ang signing para makuha agad ng union ang
1=P100, year 2=P200, year 3=P300, year 4=P400 and year 5=P500. By the third signing bonus. Management takes advantage of that by removing some
year, they entered into negotiations, they can modify the agreement as to the provisions in the CBA formerly agreed upon.
fourth and fifth year since it has not yet been given. For instance, the company When is the effectivity of the new CBA? Two scenarios:
was hit with the economic recession, and so the parties agree year four and 1. If the meeting of the minds happened within 6 months from expiration of the
five=P100 and P200 instead of the original agreement. Its a valid agreement. It old CBA. So if they entered into the agreement by July 24, 2002 the new
does not go against the non-diminution of benefits rule because it has not yet CBA will take effect, will retroact to January 25, 2002. This is automatically
been given to the workers. It is something the workers do not yet enjoy. operative by law. No agreement between the parties is needed.
When the parties enter into a binding agreement to renegotiate one year 2. If the meeting of the minds happened beyond 6 months, like the above
after, but both mutually agree to defer it to another year, that would be a valid scenario, then the parties will determine when the new CBA will take effect.
agreement. On the other hand, if one of the parties refuse to meet one year later There is no automatic retroactivity. Such will happen only if the parties agree
as originally agreed upon, the other party may declare deadlock. to it. Now, in the absence of any agreement,
Now, when the parties renegotiate, then they agree not to change For instance, nag-deadlock. Nag-strike. The Sec. Of Labor assumed
anything, that is a valid renegotiation. The three years to next renegotiate shall be jurisdiction and imposed a decision-a CBA, on the parties. He did not state a date
reckoned from the execution of the CBA agreeing not to change anything in the when the new CBA shall be effective. As ruled in the three Meralco cases:
old CBA.
1. For example the decision became final June 12, 2002-within the 6 month
If there is no renegotiation within the three years, there is no duty to period. In this case the law automatically operates so the new CBA retroacts
negotiate anymore. The three year period lapses the union loses the right to to the date of the old CBAs expiry.
demand renegotiation. This is much like the rule in Obligations and Contracts. As
soon as one party demands, the other incurs in delay. Hence if there is no 2. If the decision became final beyond the six month period, it retroacts
demand, there is no delay. Management is not incurring in delay if Labor does automatically to the end of the six month period. Generally, the Secretary of

Atty. Marlon Manuel
Labor can decree retroactivity. But the Court said the retroactivity should policy and decision-making processes of the establishment where they
only operate the day after the six month period. So the Secretary can make it are employed insofar as said processes will directly affect their rights,
retroact only starting July 25, 2002 or beyond such date. This ruling of the benefits and welfare.
Court misinterpreted Art. 253-A, thinking that when the law talks of such For this purpose, workers and employers may form labor-
date in the last phrase of the Code, refers to the six month period. management councils: Provided, That the representatives of the
Erroneous! Such date refers to the date of expiry of the old CBA. So I workers in such labor-management councils shall be elected by at
believe there is no reason for the Court to limit the Secretarys power. least the majority of all employees in said establishment.
ART. 256. Representation issue in organized establishments.

The first decision was the good decision-it was congruent with the codal In organized establishments, when a verified petition questioning
provision stating that only the parties can agree to retroactivity, so the Secretary the majority status of the incumbent bargaining agent is filed before
cannot decree retroactivity if the parties do not as well. But this was reversed in the Department of Labor and Employment within the sixty-day period
the second Meralco case. This case has no basis to say that the decision retroacts before the expiration of a collective bargaining agreement: the Med-
automatically to the end of the six month period. The hard part is an arbitral Arbiter shall automatically order an election by secret ballot when
award can supplant the parties agreement insofar as retroactivity is concerned. the verified petition is supported by:
So the Secretary can decree retroactivity but his freedom to choose the period 1) the written consent
when it retroacts is limited by the decision. 2) of at least twenty-five percent (25%)
3) of all the employees in the appropriate bargaining unit, to
B. BARGAINING UNIT, BARGAINING AGENT AND CERTIFICATION ascertain the will of the employees in the appropriate bargaining
unit.
ELECTION PROCEEDINGS
4) To have a valid election, at least a majority of all eligible voters
in the unit must have cast their votes. The labor union receiving
LABOR CODE
the majority of the valid votes cast shall be certified as the
exclusive bargaining agent of all the workers in the unit.
ART. 255. Exclusive bargaining representation and workers
participation in policy and decision-making. The labor When an election
organization designated or selected by the majority of the employees 1) which provides for three or more choices
in an appropriate collective bargaining unit shall be the exclusive 2) results in no choice receiving a majority of the valid votes cast,
representative of the employee in such unit for the purpose of 3) a run-off election shall be conducted between the labor unions
collective bargaining. However, an individual employee or group of receiving the two highest number of votes:
employees shall have the right at any time to present grievances to 4) Provided, That the total number of votes for all contending
their employer. unions is at least fifty percent (50%) of the number of votes
Any provision of law to the contrary notwithstanding, workers cast.
shall have the right, subject to such rules and regulations as the
Secretary of Labor and Employment may promulgate, to participate in

Atty. Marlon Manuel
At the expiration of the freedom period, the employer shall than all of the entire body of employees in the employer unit or
continue to recognize the majority status of the incumbent bargaining any specific occupation or geographical grouping within such
agent where no petition for certification is filed. employer unit.
(r) "Exclusive Bargaining Representative" means any legitimate
ART. 257. Petitions in unorganized establishments. In any labor organization duly recognized or certified as the sole and
establishment where there is no certified bargaining agent, a exclusive bargaining agent of all the employees in a bargaining
certification election shall automatically be conducted by the Med- unit.
Arbiter upon the filing of a petition by a legitimate labor organization.
(dd) "Consent Election" means the election voluntarily agreed upon by
ART. 258. When an employer may file petition. When the parties, with or without the intervention of the Department,
requested to bargain collectively, an employer may petition the Bureau to determine the issue of majority representation of the workers
for an election. If there is no existing certified collective bargaining in the appropriate collective bargaining unit.
agreement in the unit, the Bureau shall, after hearing, order a (ee) "Run-off Election" refers to an election between the labor unions
certification election. receiving two (2) highest number of votes when a certification
All certification cases shall be decided within 20 working days. election which provides for three (3) or more choices results in
The Bureau shall conduct a certification election within 20 days in no choice receiving a majority of the valid votes cast; provided,
accordance with the rules and regulations prescribed by the Secretary the total number of votes for all contending unions is at least fifty
of Labor and Employment. percent (50%) of the number of votes cast.
(ff) "Election Proceedings" refer to the period during a certification,
ART. 259. Appeal from certification election orders. Any consent or run-off election or election of union officers starting
party to an election may appeal the order or results of the election as from the opening to the closing of the polls, including the
determined by the Med-Arbiter directly to the Secretary of Labor and counting and tabulation of the votes, but excluding the period for
Employment on the ground that the rules and regulations or parts the final determination of the challenged votes and the canvass
thereof established by the Secretary of Labor and Employment for the thereof.
conduct of the election have been violated. Such appeal shall be
decided within fifteen (15) calendar days. (gg) "Organized Establishment" refers to a firm or company where
there exists a recognized or certified exclusive bargaining agent.
OMNIBUS RULES, BOOK V (hh) "Registration Proceedings" refer to the process leading to the
revocation of the legal personality of a labor organization or a
RULE I workers association.
Definition of Terms
SECTION 1. Definition of terms.

(q) "Bargaining Unit" refers to a group of employees sharing mutual
interests within a given employer unit, comprised of all or less

Atty. Marlon Manuel
RULE IX of the members of the bargaining unit supporting the voluntary
Determination or Representation Status recognition; and
(c) A statement that there is no other legitimate labor organization
SECTION 1. Policy. It is the policy of the State to promote free operating within the bargaining unit.
trade unionism through expeditious procedures governing the choice of
an exclusive bargaining representative. The determination of such The joint statement shall be under oath.
exclusive bargaining representative is a non-litigious proceeding and,
as far as practicable, shall be free from technicalities of law and SECTION 2. Effect of voluntary recognition. Within twenty-four
procedure, provided only that in every case, the exclusive bargaining (24) hours upon submission of all the aforementioned documents, the
representative enjoys the majority support of all the employees in the Regional Office shall enter the fact of voluntary recognition into the
bargaining unit. records of the union, copy of such entry immediately furnished the
Bureau. From the time of recording, the union shall enjoy the rights,
SECTION 2. Determination of representation status; models. The privileges and obligations of an exclusive bargaining representative.
determination of an exclusive bargaining representative shall be
through voluntary recognition in cases where there is only one RULE XI
legitimate labor organization operating within the bargaining unit, or Certification of Election
through certification, run-off or consent as provided for in this Book.
SECTION 1. Who may file. Subject to the provisions of this Rule,
RULE X any legitimate labor organization or any employer, when requested to
Voluntary Recognition bargain collectively and the status of the union is in doubt, may file a
petition for certification election.
SECTION 1. Requirements for voluntary recognition. In SECTION 2. Where to file. A petition for certification election may
unorganized establishments, the employer may voluntarily recognize be filed with the Med-Arbiter through the Regional Office which has
the representation status of a union. within thirty (30) days from jurisdiction over the principal office of the employer or where the
recognition, the employer representative and union president shall bargaining unit is principally situated.
submit to the Regional Office a joint statement attesting to the fact of When two or more petitions involving the same bargaining unit
voluntary recognition, which shall also include the following: are filed in one Regional Office, the same shall be automatically
(a) Proof of posting the joint statement of voluntary recognition for consolidated. Where these petitions are filed in different regional
fifteen (15) consecutive days in two (2) conspicuous places of the Offices, the Regional Office which first acquires jurisdiction over the
establishment or bargaining unit where the union seeks to case shall exclude the others, in which case the latter shall endorse
operate; the petition to the former for consolidation.
(b) The approximate number of employees in the bargaining unit, SECTION 3. When to file. In the absence of a collective bargaining
accompanied by the name and signatures of at least a majority agreement duly registered in accordance with Article 231 of the Code,
a petition for certification election may be filed at any time. However,

Atty. Marlon Manuel
no certification election may be filed within one year from the date of a i) that the bargaining unit is unorganized or that there is no
valid certification, consent or run-off election or from the date of registered collective bargaining agreement covering the
voluntary recognition in accordance with Rule X of these Rules; employees in the bargaining unit;
provided, that where an appeal has been filed on the order of the Med- ii) if there exists a duly registered collective bargaining
Arbiter certifying the results of the election, the running of the one- agreement, that the petition is filed within the sixty-day
year period shall be suspended until the decision on the appeal shall freedom period of such agreement; or
have become final and executory.
iii) if another union had been previously certified in a valid
Neither may a representation question be entertained if, before certification, consent or run-off election or voluntary
the filing of a petition for a certification election, the duly recognized or recognized in accordance with Rule X of these Rules, that
certified union has commenced negotiations with the employer in the petition is filed outside the one-year period from such
accordance with Article 250 of the Code within the one-year period certification or run-off election and no appeal is pending
referred to in the immediately preceding paragraph, or a bargaining thereon, or from the time the fact of recognition was
agent is a party had been submitted to conciliation or arbitration or entered into the records of such union.
had become the subject of valid notice of strike or lockout. If a
collective bargaining agreement has been duly registered in (g) In an organized establishment, the signatures of at least twenty-
accordance with Article 231 of the Code, a petition for certification five (25%) percent of all employees in the appropriate bargaining
election or a motion for intervention can only be entertained within unit which shall be attached to the petition at the time of its
sixty (60) days prior to the expiry date of such agreement. filing; and
(h) Other relevant facts
SECTION 4. Form and contents of petition. The petition shall be in When the petition is filed by an employer, it shall contain,
writing and under oath and shall contain, among others, the following: among others:
(a) The name of petitioner, its address, and affiliation if appropriate,, (a) The name, address of the legitimate labor organizations
the date of its registration and number of its certificate of involved;
registration if petitioner is a federation, national union or
independent union, or the date it was reported to the (b) The approximate number of the employees in the appropriate
Department if it is a local/chapter. bargaining unit;
(b) The name, address and nature of the employers business; (c) The approximate number of the employees in the appropriate
bargaining unit;
(c) The description of the bargaining unit;
(d) A description of the bargaining unit; and
(d) The approximate number of employees in the bargaining unit;
(e) Other relevant facts.
(c) The names and addresses of other legitimate labor organizations
in the bargaining unit; SECTION 5. Assignment of the case. Within twenty-four (24)
(f) A statement indicating any of the following circumstances: hours from receipt of the petition, the Regional Director shall assign
the case to a Med-Arbiter, who shall immediately cause the posting of

Atty. Marlon Manuel
the petition in two conspicuous places where the petition seeks to the proceedings. Postponements or continuances shall, as a matter of
operate and the issuance of summons to all parties named in the policy, be discouraged.
petition, indicating the first hearing and ordering the parties to appear In case the contending unions agree to a consent elections, the
therein. Mid-Arbiter shall not issue a formal order calling for the conduct of an
election but shall enter the fact of the agreement in the minutes of the
SECTION 6. Force Intervenor. The incumbent bargaining agent hearing and shall cause the immediate scheduling of the pre-election
shall automatically be one of the choices in the certification election as conference. The minutes of the hearing shall be signed by the parties
forced intervenor. and attested to by the Med-Arbiter.
SECTION 7. Motions for intervention when proper. When a petition SECTION 9. Answer. If the contending unions fail to agree to a
for certification election had been filed in an organized establishment, consent election during the first hearing, the Med-Arbiter shall in the
any legitimate labor organization other than the incumbent bargaining same hearing direct all concerned parties, including the employer, to
agent operating within the bargaining unit may file a motion for simultaneously submit their perspective position papers within a non-
intervention with the Med-Arbiter during the freedom period of the extendible period of ten (10) days. The position papers shall
collective bargaining agreement. the form and contents of the motion specifically address the issues identified during the hearing, and shall
shall be the same as that of a petition for certification election. include all arguments and evidence as the parties may deem relevant
In an unorganized establishment, the motion shall be filed at in the disposition of the case. All arguments not so raised are deemed
any time prior to the finality of the decision calling for a certification waived. Upon the expiration of the ten-day period, the petition shall be
election. The form and contents of the petition shall likewise be the deemed submitted for resolution, with or without position papers
same as that of a petition for certification election. If the motion is submitted by the parties.
found sufficient in form and substance, the Med-Arbiter shall, within
five (5) days from receipt thereof but in any event prior to the holding SECTION 10. Failure to appear despite notice. The failure of any
of the election if such had been scheduled, order the inclusion of the party to appear twice despite notice, whether consecutive or not, shall
movant as one of the choices, and the original decision shall be be deemed a waiver of its right to be heard, in which case, the Med-
amended accordingly. The order of the Med-Arbiter resolving the Arbiter shall proceed to resolve the petition on the basis of available
motion shall not be subject to reconsideration or appeal. Any motion records.
for reconsideration or appeal so filed shall not stay the holding of the
certification or consent election, but nevertheless shall form part of the SECTION 11. Failure action on the petition. The Med-Arbiter shall
records of the case. have twenty (20) working days from submission of the case for
resolution within which to grant or dismiss the petition.
SECTION 8. Hearings: purpose. The Med-Arbiter may conduct I. A decision granting the petition shall state the following:
hearings with the view of (a) arriving at a stipulation of facts; (b) (a) The name of the employer or the establishment;
determining the parties to the election; (c) getting the parties to agree
to a consent election; (d) asking clarificatory questions; and (e) (b) The description of the bargaining unit;
defining or limiting the issues. The Med-Arbiter shall have control of

Atty. Marlon Manuel
(c) The names of the contending unions which shall appear in affected by any amendment, extension or renewal of the
the following order; collective bargaining agreement:
i) Petitioner union or, in case of two or more petitioners, (c) The petition was filed within one (1) year from a valid
in the order in which the petitions were filed; certification, consent or run-off election and no appeal on
ii) Forced intervenor; and the results is pending thereon, or from recording of the fact
of voluntary recognition with the Regional Office.
iii) Other intervenors
(d) A duly recognized or certified union has commenced
The decision shall also include a directive for the employer negotiations with the employer in accordance with Article
to submit within ten (10) days from receipt of the decision, the 250 of the Code within the one-year period referred to in
certified list of employees in the bargaining unit, or where Section 3, rule XI of these Rules, or there exists a
necessary, the payrolls covering the members of the bargaining bargaining deadlock which had been admitted to
unit for the last three (3) months immediately preceding the conciliation or arbitration or had become the subject of a
issuance of the decision. In the event the employer does not valid notice of strike or lockout to which an incumbent or
submit the list or payrolls as the case may be, the union may certified bargaining agent is a party;
submit its own list.
(e) In case of an organized establishment, failure to submit the
In a petition filed by a legitimate labor organization twenty-five percent (25%) support requirement upon the
involving an authorized establishment, the Med-Arbiter shall, filing of the petition; or
pursuant to Article 257 of the Code, automatically order the
conduct of certification election after determining that the (f) Lack of interest or withdrawal on the part of the petitioner;
petition has complied with all the requirements enumerated provided, that where a motion for intervention has been
under Sections 1, 2 and 4 hereof, and that none of the grounds filed during the freedom period, said motion shall be
for dismissal enumerated in the immediately succeeding deemed and disposed of as an independent petition for
paragraph exists. certification election if it complies with all the requisites for
the filing of a petition for certification election as prescribed
II. The Mid-Arbiter shall dismiss the petition on any of the following in Section 4 of these Rules.
grounds:
(a) The petitioner is not listed by the Regional Office or Bureau SECTION 12. Appeal; finality of decision. The decision of the Med-
in its registry of legitimate labor organizations, or that its Arbiter may be appealed to the Secretary for any violation of these
legal personality has been revoked or cancelled with finality Rules Interlocutory orders issued by the Med-Arbiter prior to the grant
in accordance with Rule VIII of these Rules; or denial of the petition, including orders granting motions for
(b) The petition was filed before or after the freedom period of intervention issued after an order calling for a certification election,
a duly registered collective bargaining agreement; shall not be appealable. However, any issue arising therefrom may be
provided, that the sixth-day freedom period based on the raised in the appeal on the decision granting or denying the petition.
original collective bargaining agreement shall not be

Atty. Marlon Manuel
The appeal shall be under oath and shall consist of a for one year from the holding of such consent election, subject to
memorandum of appeal specifically stating the grounds relied upon by Section 17 of these Rules. Where no petition for certification election
the appellant with the supporting arguments and evidence. The appeal had been filed but the parties themselves have agreed to hold a
shall be deemed not filed unless accompanied by proof of service consent election, the results thereof shall not constitute a bar to
thereof to appellee. another certification election, unless the winning union had been
extended voluntary recognition in accordance with Rule X of these
SECTION 13. Where to file appeal. The appellant shall file its Rules.
appeal with the Regional Office where the case originated.
SECTION 17. Failure of election; effects. Where the total number
SECTION 14. Period to reply. The appellee shall file its reply of valid votes cast in a certification or consent election is less than the
thereto within ten (10) calendar days from receipt of a copy of the majority of all the eligible employees in the bargaining unit, there shall
appeal. The Regional Office shall, within five (5) calendar days from be a failure of election. Such failure of election shall not bar the filing
receipt of the reply forward the entire records of the case to the Office of a petition for the immediate holding of another certification or
of the Secretary. consent election.
Where no appeal is filed within the ten-day period, the Med-Arbiter
shall transmit the entire records of the case, entering therein the fact SECTION 18. Effects of early agreements. The representation case
that the decision has become final and executory, to the Regional for shall not be adversely affected by a collective bargaining agreement
appropriate disposition. registered before or during the last sixty (60) days of a subsisting
agreement or during the pendency of the representation case.
SECTION 15. Decision of the Secretary final and executory. The
Secretary shall have fifteen (15) calendar days within which to decide SECTION 19. Motions for inhibitions. No motion for inhibition of
the appeal from receipt of the records of the case. The filing of the the Med-Arbiter shall be entertained from any party unless the same is
appeal from the decision of the Med-Arbiter stays the holding of any verified and based on specific grounds or circumstances directly
certification election. The decision of the Secretary shall be final and related to or arising from the dispute under consideration.
executory. Inhibition shall be discretionary on the Med-Arbiter concerned.
Upon the finality of the decision of the Secretary affirming the Within twenty-four (24) hours from receipt thereof, the Med-Arbiter
decision to conduct a certification election, the entire records of the shall deny the motion, which denial shall not be appealable, or grant
case shall be remanded to the office of origin for implementation of the the same by returning the entire records of the case to the Regional
decision. The implementation shall not be stayed unless restrained by Director, specifically stating his reasons for inhibition.
the appropriate court. Within twenty-four (24) hours from return of the records, the
Regional Director shall assign the case to another Med-Arbiter. Where
SECTION 16. Effects of consent election. Where a petition for there is no other Med-Arbiter in the Regional Office, the Regional
certification election had been filed and, upon the intercession of the Director shall transmit the entire records of the case to the Bureau,
Med-Arbiter, the parties agree to hold a consent election, the results
thereof shall constitute a bar to the holding of a certification election

Atty. Marlon Manuel
which shall immediately assign the case to any Med-Arbiter from any sought to be represented by the petitioner at the time of the
of the Regional Offices or from the Bureau. certification or consent election shall be qualified to vote. A dismissed
employee whose dismissal is being contested in a pending case shall
SECTION 20. Non-availability of Med-Arbiter. Where there is no be allowed to vote in the election.
Med-Arbiter available in the Regional Office by reason of vacancy, In case of disagreement over the voters list over the eligibility
prolonged absence, or excessive volume of workload as determined by of voters, all contested voters shall be allowed to vote. However, their
the Regional Director, the petition shall be disposed of in accordance votes shall be segregated and sealed in individual envelops in
with the last paragraph of the immediately preceding section. The accordance with section 9 of these Rules.
Regional Office shall notify all parties of such action.
SECTION 3. Election conducted during regular business day. The
RULE XII election shall be set during a regular business day of the company
Conduct of Certification Elections unless otherwise agreed upon by the parties. It shall be held within
company premises unless circumstances otherwise require, as
SECTION 1. Pre-election conference. Within twenty-four (24) determined by the election officer.
hours from receipt the Med-Arbiter of the final decision for the conduct
of a certification election, or from the remand of the records of the SECTION 4. Posting of notices. The Regional Office shall cause the
case from the Office of the Secretary, the Regional Director shall posting of notice of election at least five (5) working days before the
assign the case to an election officer for the conduct of a pre-election actual date thereof in two-most conspicuous places in the company
conference. premises. The notice shall contain the date and time of the election,
The pre-election conference shall set the mechanics for the names of all contending unions, the description of the bargaining unit
election and shall determine, among others, the following: (a) the list and the list of eligible voters. The five-day period for posting of notice
of qualified voters; (b) the date, time and place of the election; (c) the and the list of eligible voters may be waived upon the written
names of watchers and representatives; (d) the number and location agreement of the parties.
of polling places or booths; and (e) the number of ballots to be
prepared. SECTION 5. Secrecy and sanctity of the ballot. To ensure the
The failure of any party to appear during the pre-election secrecy of the ballot, the election officer, together with the authorized
conference, despite notice, shall be construed as a waiver to be represententatives of the contending parties, shall before the start of
represented and to question or object to any agreement reached in the actual voting, inspect the polling place, the ballot boxes, and the
said pre-election conference. Nothing herein, however, shall deprive polling booths. After the examination of each ballot box, the election
the non-appearing party of its right to be furnished notices of officer shall seal each with three padlocks. The key to each padlock
subsequent pre-election conferences and to attend the same. shall be kept individually by the election officer, the representative of
the labor organization, and the representative of the employer. If more
SECTION 2. Qualification of voters; inclusion-exclusion proceedings. than one union is involved, the holder of the key for the labor
All employees who are members of the appropriate bargaining unit organization shall be determined by drawing of lots. All keys shall
remain in the possession of the election officer and the representative

Atty. Marlon Manuel
during the entire proceedings and until all the controversies concerning (a) That there is no employer-employee relationship between the
the opening of the ballot box shall have been resolved. Where the voter and the company; and
representative of the employer or labor organization is not present or (b) That the voter is nota member of the appropriate bargaining unit
has lost a key at the time of the opening of the ballot box, the election which petitioner seeks to represent.
officer shall have the authority to break open the box. the
circumstances under which this authority is exercised shall be reflected When a vote is properly challenged, the election officer shall
in the minutes of the proceedings. place the ballot in an envelope which shall be sealed in the presence of
the voter and the representatives of the parties. The election officer
SECTION 6. Preparation of ballots. For the guidance of the voters, shall indicate on the envelope the voters name, the party challenging
ballots shall be prepared in Filipino and English with a translation in the voter, and the ground for the challenge. The sealed envelope shall
the local dialect, if necessary. then be signed by the election officer and the representatives of all the
parties. The election officer shall vote all challenges in the minutes of
SECTION 7. Marking of votes. The voter must put a cross (X) or a the election and shall be responsible for consolidating all envelopes
check () mark in the square opposite the name of the union of his containing the challenged votes. The envelopes shall be opened and
choice. If only one union is involved, the voter shall make his cross or the question of eligibility shall be passed upon only if the number of
check mark in the square indicating "yes" or "no". segregated voters will materially alter the results of the election.
If a ballot is torn, marked, defaced, or left unfilled in such a SECTION 10. On-the-spot question. The election officer may rule
manner as to create doubt or confusion or to identify the voter, it shall on any question relating to and raised during the conduct of the
be considered spoiled. If the voter inadvertently spoils a ballot, he election. In no case, however, shall the election officer rule on any of
shall return it to the election officer who shall destroy it and give him the grounds for challenge specified in the immediately proceeding
another ballot. section.
SECTION 8. Keeping of minutes. The election officer shall keep SECTION 11. Protest; when perfected. Any party-in interest may
minutes of the entire proceedings, including therein all events and file a protest based on the conduct or mechanics of the election. Such
circumstances relevant to the election. Upon completion of the entire protests shall be recorded in the minutes of the proceedings. Protests
proceedings, the representatives of the parties shall assign the not so raised are deemed waived.
minutes and be furnished copies thereof. Where the representatives
are not present or refuse to sign the minutes, this fact shall be duly The protesting party must formalize its protest with the Med-
noted by the election officer. Arbiter, with specific grounds, arguments and evidence therefor, within
five (5) days after the close of the proceedings. If not recorded in the
SECTION 9. Challenging of votes. An authorized representative of minutes and formalized within the prescribed period, the protest shall
any of the contending parties may challenge a vote before it is be deemed dropped.
deposited in the ballot box only on any of the following grounds:
SECTION 12. Canvassing of votes; when election is valid. As soon
as the polls close, the votes cast shall be counted and tabulated by the

Atty. Marlon Manuel
election officer in the presence of the representatives of the parties. change the result, only the Med-Arbiter can proclaim and certify the
Upon completion of the canvassing, the election officer shall give each winner. In such cases, the election officer shall, immediately after the
representative a copy of the minutes of the election including the lapse of five (5) days from completion of canvass, return the records
results thereof. The ballots and the tally sheets shall be sealed in an of the case to the Med-Arbiter, together with the minutes and the
envelope and signed by the election officer and by the representative results of the election.
of the contending parties and shall remain under the custody of the The Med-Arbiter shall have twenty (20) days within which to issue an
election officer. order certifying the result of the election. Any protest, eligibility issue,
The union which obtained a majority of the valid votes cast or such other questions that may have been raised during the election
shall be certified as the sole and exclusive bargaining agent of all the proceedings shall likewise be disposed of by the Med-Arbiter in the
workers in the appropriate bargaining unit. However, in an order to same order.
have a valid election, at least a majority of all eligible voters in the
appropriate bargaining unit must have cast their votes. SECTION 15. Appeal; finality of decision. The decision of the Med-
Arbiter may be appealed to the Secretary within ten (10) days from
SECTION 13. Proclamation and certification of results by election receipt by the parties of a copy thereof, only on the grounds of
officer; when proper. Upon completion of the canvass there being a violation of Section 9 hereof or of serious errors of fact or law in the
valid election, the election officer shall proclaim and certify as winner resolution of a protest.
the union which obtained a majority of the valid votes cast under any The appeal shall be under oath and shall consist of a
of the following conditions: memorandum of appeal specifically stating the grounds relied upon by
a) No protest had been filed or, even if one was filed, the same was the appellant with the supporting arguments and evidence. The appeal
not perfected within the five-day period for perfection of the shall be deemed not filed unless accompanied by proof of service
protest; thereof to appellee. The decisions of the Secretary on the appeal shall
be final and executory.
b) No challenge of eligibility issue was raised or even if one was Where no appeal is filed within the ten-day period, the decisions shall
raised, the resolution of the same will not materially change the become final and executory and the Med-Arbiter shall enter this fact
result. into the records of the case.
For this purpose, the election officer shall immediately issue the
corresponding certification, copy furnished all parties, which shall form SECTION 16. Where to file appeal. The appellant shall file its
part of the records of the case. The winning union shall have the appeal with the Regional Office where the case originated.
rights, privileges and obligations of a duly certified collective
bargaining representative from the time the certification is issued. The SECTION 17. Period to reply. The appellee shall file reply thereto
proclamation and certification so issued shall not be appealable. within ten (10) days from receipt of a copy of the appeal. The Regional
Office shall, within five (5) days from receipt of the reply, forward the
SECTION 14. Proclamation and certification by Med-Arbiter; when entire records of the case to the Office of the Secretary. Where no
proper. When a protest has been perfected or any challenge or reply is received by the Regional Office shall likewise forward the
eligibility issue has been raised, which if resolved, can materially entire records of the case to the Office of the Secretary.

Atty. Marlon Manuel
The fundamental factors in determining the appropriate collective

SECTION 18. Motion to postpone does not stay election. The filing bargaining unit are:
of a motion to postpone shall not stay the holding of the election.
1. The will of the employees (Globe Doctrine)
RULE XIII 2. Affinity and unity of the employees interest (Substantial Mutual
Run-Offs Interest Rule)
3. Prior collective bargaining history
SECTION 1. Run-off election. When an election which provides for
three (3) or more choices results in no choice receiving a majority of
4. Similarity of employment status
the valid votes cast, and no objections or challenges have been However, the court has ruled that prior collective bargaining history
presented which, if sustained, can materially change the results, the is neither decisive nor conclusive in the determination of what constitutes an
election office shall motu proprio conduct a run-off election within five appropriate bargaining unit. The test of grouping is commonality or
(5) calendar days from the close of the election proceedings between mutuality of interest.
the labor union receiving the two highest number of votes; provided,
that the total number of votes for all contending unions is at least fifty International School Alliance of Educators v Quisumbing, 333 SCRA 13
percent (50%) of the number of votes cast. The International School employs 2 kinds of teachers: foreign hires and local
The voters list to be used in the run-off election shall be the same hires. The foreign hires enjoy greater benefits than local hires. The issue is
as that used in the first election. The ballots in the run-off election whether local hires and foreign hires could be part of a single bargaining unit.
shall provide as choices the unions receiving the highest number of the Held: Foreign hires do not belong to the same bargaining unit as local hires. It
votes cast. The union receiving the greater number of valid votes cast does not appear that foreign hires have indicated their intention to be grouped
shall be certified as the winner, subject to the applicable provisions of with local hires. The collective bargaining history of the school also shows that
Rule XII of this Book.
these groups were always treated separately. Foreign hires have limited tenure;
local hires have security of tenure. Although foreign hires perform similar
CASES
functions under the same working conditions as the local hires, they are accorded
certain benefits not accorded to local hires. These benefits, such as housing,
San Miguel Corporation v Laguesma, 236 SCRA 595 transportation, shipping costs, taxes and home leave travel allowance, are
The regular sales personnel (55 in all) of Magnolia Dairy Products, employed in reasonably related to their status as foreign hires, and justify their exclusion from
different sales offices in the North Luzon Area, wish to form one bargaining unit. the bargaining unit.
The company insists that each of the sales offices in should be considered as a
separate bargaining unit so that negotiations would be more expeditious. De La Salle University v De La Salle University Employees Association, 330
Held: The Court allowed all the employees to be part of a single bargaining unit SCRA 363
saying that it is not the convenience of the employer that constituted the The employees of DLSU and the College of St. Benilde wish to form one
determinative factor in forming an appropriate bargaining unit (and 55 na nga bargaining unit.
lang sila).

Atty. Marlon Manuel
Held: DLSU and CSB, although affiliated, are two separate juridical Held: The IRR provides that the representation case shall not be adversely
personalities. The employees of the two schools are effectively employees of two affected by a collective agreement submitted before or during the last 60 days of
different employers and thus cannot form one bargaining unit. There is no a subsisting agreement or during the pendency of the representation case. As the
evidence in this case to justify the piercing of the veil of corporate fiction. new CBA was entered into at the time when the representation case was still
pending, it follows that it cannot be recognized as the final agreement between
Philippine Telegraph and Telephone Corp. v Laguesma, 223 SCRA 454 the employer and its employees.
PT&Ts rank and file employees are already represented by a certified bargaining
agent. The supervisory employees seek to be represented. Philippine Fruits and Vegetables Industries, Inc. v Torres, 211 SCRA 95
Held: Since no certified bargaining agent represents the supervisory employees, A certification election was conducted in the PFVII. Employees who were
PT&T is deemed an unorganized establishment with respect to such supervisory already dismissed, albeit illegally, took part in the elections.
employees even if the company is already deemed and organized establishment Held: Employees who have been improperly laid off but who have a present,
with respect to ots rank and file employees are already organized. unabandoned rights to or expectation of re-employment, are eligible to vote in
An employer has no standing to question a certification election since it the certification elections. Thus, if the dismissal is under question, the employees
is the sole concern of the workers, unless the former filed the certification concerned are still qualified to vote.
election itself pursuant to Art. 258 of the Labor Code.
PVFII filed a protest with the Med-Arbiter. It is argued that the protest was filed
Port Workers Union of the Philippines v Laguesma, 207 SCRA 329 beyond the reglamentary. To determine the timeliness of the filing of the protest,
Union 1 is the certified bargaining representative. During the freedom period, it must be determined when the close of election proceedings occur.
Union 2 and Union 3 filed their respective petitions for certification election. Held: The close of election proceedings refers to that period from the closing of
Union 2 submitted the consent signatures (25% of the employees in the the polls to the counting of the ballots and the tabulation of the votes. It does not
bargaining unit) 11 days after it filed its petition. Union 3 submitted its consent include the period for the final determination of challenged votes and canvass
signatures 35 days after it filed its own petition. Union 1 filed a motion to dismiss thereof which could take a very long period.
both petitions for failing to comply with the IRR which states that (t)he 25%
requirement shall be satisfied upon the filing of the petition, otherwise the Samahang Manggagawa ng Permex v Secretary of Labor, 286 SCRA 692
petition shall be dismissed. Held: Motion denied. The Labor Code does not An employer does not have the power to declare a union as the exclusive
require the consent signatures to be filed simultaneously with the petition for representative of its workers for the purpose of collective bargaining. Direct
certification election. certification (by the employer) has been discontinued as a method of selecting the
A new CBA was ratified before any certification election was held. exclusive bargaining agents of workers.
Union 1 claims that the overwhelming ratification of the CBA is an affirmation
of their membership (?) in the bargaining agent, rendering the representation Oriental Tin Can Labor Union v Secretary of Labor and Employment, 294
issue moot and academic and conclusively barring the holding of a certification SCRA 640
election. Union 1 is the certified bargaining representative. Union 2 filed a petition for
certification election during the freedom period. A protest was filed by the

Atty. Marlon Manuel
employer alleging that some of the employees who originally signed the petition was entered into. Filsystems now claims that the existence of a CBA bars the
had already withdrawn in writing their membership from the union. holding of a certification election.
Held: Once the required percentage requirement is has been reached, the Held: An appeal seasonably filed stays the decision of the med-arbiter, therefore
employees withdrawal from union membership taking place after the filing of the appeal filed by SAMAFIL stops the holding the any certification election.
the petition for certification election does not affect the petition. Accordingly, there exists an unresolved representation case (SAMAFILs petition
which was pending appeal) at the time the CBA was entered into between FWU
The protest was filed by the employer. and Filsystem. Such CBA cannot and will not prejudice SAMAFILs pending
Held: Certification elections are exclusively the concern of employees, hence, representation case or render it moot.
the employer lacks the legal personality to challenge the same.
National Federation of Labor v Secretary of Labor (287 SCRA 599)
A new CBA was entered into between the employer and Union 1 during the The company and 3 labor unions filed a protest against the results of a
freedom period and was registered 3 days after the expiration of the old CBA. certification election due to irregularities in the conduct of the elections (no
Held: If a CBA has been registered, a petition for certification election or a notice, flying voters, disfranchisement, etc. parang national elections). The
motion for intervention can only be entertained within 60 days prior to the expiry protests were dismissed for being filed more 5 days after the election was
of the agreement. However, when the CBA was prematurely signed during the conducted.
freedom period and a petition for certification election was filed during the Held: The complaint in this case was that a sufficient number of employees were
aforesaid freedom period, the petition gives rise to a representation case that must not able to vote because they were not properly notified of the date of the
be resolved even though a new CBA has been entered into. elections. They could not therefore have filed their protests within 5 days for the
reason that they did know that an election took place.
Samahan ng mga Manggagawa sa Filsystems v Secretary of Labor and
Employment, 290 SCRA 680 The company filed a protest.
SAMAFIL-NAFLU-KMU is a registered labor union It filed a petition for Held: It is not improper for the employer to show interest in the conduct of the
certification election. Filsystems, the employer, filed a protest questioning the election. The manner in which the election was held could make the difference
status of SAMAFIL as a legitimate labor organization for lack of proof of between industrial strife and industrial harmony in the company. What the
affiliation with NAFLU-KMU. employer is prohibited from doing is to interfere with the conduct of the
Held: The failure of an independently registered labor union to prove its certification election for the purpose of influencing its outcome. But certainly, an
affiliation with a labor federation cannot affect its right to file a petition for employer has an abiding interest in seeing to it that the election is clean, peaceful,
certification election as an independent union. (independent nga e) orderly and credible.
The petition for certification election was dismissed by the med-arbiter and an
appeal was filed. Meanwhile, FWU, another union in the company, filed its own
petition for certification election. The petition was granted. FWU won and a CBA

Atty. Marlon Manuel
C. BARS TO CERTIFICATION ELECTION for dismissal enumerated in the immediately succeeding
paragraph exists.
OMNIBUS RULES, BOOK V II. The Mid-Arbiter shall dismiss the petition on any of the following
grounds:
RULE XI
(a) The petitioner is not listed by the Regional Office or Bureau
Certification of Election
in its registry of legitimate labor organizations, or that its
SECTION 11. Failure action on the petition. The Med-Arbiter shall
legal personality has been revoked or cancelled with finality
have twenty (20) working days from submission of the case for
in accordance with Rule VIII of these Rules;
resolution within which to grant or dismiss the petition.
(b) The petition was filed before or after the freedom period of
I. A decision granting the petition shall state the following:
a duly registered collective bargaining agreement;
(a) The name of the employer or the establishment; provided, that the sixth-day freedom period based on the
(b) The description of the bargaining unit; original collective bargaining agreement shall not be
affected by any amendment, extension or renewal of the
(c) The names of the contending unions which shall appear in
collective bargaining agreement:
the following order;
(c) The petition was filed within one (1) year from a valid
i) Petitioner union or, in case of two or more petitioners,
certification, consent or run-off election and no appeal on
in the order in which the petitions were filed;
the results is pending thereon, or from recording of the fact
ii) Forced intervenor; and of voluntary recognition with the Regional Office.
iii) Other intervenors (d) A duly recognized or certified union has commenced
The decision shall also include a directive for the employer negotiations with the employer in accordance with Article
to submit within ten (10) days from receipt of the decision, the 250 of the Code within the one-year period referred to in
certified list of employees in the bargaining unit, or where Section 3, rule XI of these Rules, or there exists a
necessary, the payrolls covering the members of the bargaining bargaining deadlock which had been admitted to
unit for the last three (3) months immediately preceding the conciliation or arbitration or had become the subject of a
issuance of the decision. In the event the employer does not valid notice of strike or lockout to which an incumbent or
submit the list or payrolls as the case may be, the union may certified bargaining agent is a party;
submit its own list. (e) In case of an organized establishment, failure to submit the
In a petition filed by a legitimate labor organization twenty-five percent (25%) support requirement upon the
involving an authorized establishment, the Med-Arbiter shall, filing of the petition; or
pursuant to Article 257 of the Code, automatically order the (f) Lack of interest or withdrawal on the part of the petitioner;
conduct of certification election after determining that the provided, that where a motion for intervention has been
petition has complied with all the requirements enumerated filed during the freedom period, said motion shall be
under Sections 1, 2 and 4 hereof, and that none of the grounds deemed and disposed of as an independent petition for

Atty. Marlon Manuel
certification election if it complies with all the requisites for
the filing of a petition for certification election as prescribed CASES
in Section 4 of these Rules.
Capitol Medical Center Alliance of Concerned Employees v Laguesma, 267
RULE XVI SCRA 503
Registration of Collective Bargaining Agreement In January 1993, Union 1 was the certified as the exclusive bargaining agent of
SECTION 3. Term of representation status of agreement; contract- the rank and file employees of Capitol Medical Center (CMC). CMC questioned
bar rule. The representation status of the incumbent exclusive the validity of Union 1s certification through a series of petitions and a number
bargaining representative which is a party to a duly registered
of judicial and administrative proceedings. This had the effect of delaying the
collective bargaining agreement shall be for a term of five (5) years.
commencement of negotiations for a CBA. Due to the continued refusal of CMC
No petition questioning the majority status of the incumbent exclusive
to negotiate, Union 1 filed a notice of strike and subsequently staged a strike.
bargaining representative shall be entertained by the Department
Meanwhile, in March 1994, Union 2 filed a petition for certification election,
outside the sixty-day period immediately before the date of expiry of
such five-year term. claiming that Union 1 has not commenced the negotiations for a CBA and 1 year
has already elapsed since the last certification election.
All other provisions of said agreement shall, as a matter of
right, be renegotiated not later than three (3) years after its Held: Even if one year has already elapsed since the time of declaration of a
execution. Any agreement on such other provisions entered into within final certification result, no certification election may be had where the delay in
six (6) months from the date of expiry of such provisions shall retroact forging a CBA could not be attributed to the fault of the union which won the
to the day immediately following such date. If any such provisions are earlier certification election. The SC held that a situation where a CBA could not
entered into beyond six months, the parties shall agree on the be concluded due to the failure of one party to willingly perform its duty to
duration of retroactivity. In case of a deadlock in the renegotiation of bargain collectively is similar in nature to a bargaining deadlock for which no
the agreement, the parties may exercise their rights under the Code. certification election could be held.
In case of renegotiation, all requirements for registration prescribed
under the two immediately proceeding sections shall be complied with, ALU v Ferrer-Calleja, 173 SCRA 178
whichever is applicable, except payment of the registration fee. The employer, upon the representation of Union 1 that it is the exclusive
bargaining agent, entered into negotiations with the said union. Six days before a
SECTION 4. Exception to contract-bar rule. Notwithstanding its CBA was to be signed by Union 1 and the employer, Union 2 staged a strike. The
registration, a collective bargaining agreement shall not constitute a strike was staged after Union 2 failed to convince the employer to recognize it as
bar to a certification election where it is found in appropriate the real exclusive bargaining agent. Union 2 then filed a petition for certification
proceedings before the Regional Director that any of the following election. Union 1 opposed on the ground that there is an existing CBA, hence the
conditions exist: contract bar rule applies.
a) The agreement contains provisions lower than the standards
fixed by law; or Held: Contract bar rule does not apply for the following reasons:
b) The documents supporting its registration are falsified, fraudulent 1. In the case at bar, the court found that the ratification of the CBA was
or tainted with misrepresentation. irregular for 2 reasons: (1) the failure to post the same in at least 2

Atty. Marlon Manuel
conspicuous places, and (2) the lack of any showing that it was actually Progressive Development Corp. v Secretary of Labor, 271 SCRA 593
ratified by a majority of the employees in the bargaining unit. For the 1. The propriety of a labor organizations registration could be assailed directly
contract bas rule to apply, the CBA must not only be registered but also through cancellation proceedings in accordance with Articles 238 ad 239 of
validly ratified. the Labor Code, or indirectly by challenging its petition for the issuance of
2. The prompt recognition by the employer of Union 1s standing as the an order for certification election.
exclusive bargaining agent was misplaced and the failure to properly 2. The Med-Arbiter should look into the merits of the petition for cancellation
determine with legal certainty whether the union enjoyed majority of a unions registration before issuing an order calling for certification
representation may be a ground to nullify the certification of that union as the elections. Where the legal personality of a union is seriously challenged, it
sole bargaining agent. (I think this is merely an obiter ) would be more prudent for the Med-Arbiter to grant the request for
suspension of the proceedings in the certification election case until the issue
United CMC Textile Workers Union v BLR, 128 SCRA 316 of legality of the unions registration shall have been resolved.
The Med-Arbiter granted a petition for certification election filed by Union 2
despite the pendency of a ULP case filed against Union 1, the certified bargaining Samahang Manggagawa sa Permex v Secretary, 286 SCRA 692
agent, for being company-dominated. An employer does not have the power to declare a union as the exclusive
Held: The pendency of a formal charge of company domination is a prejudicial bargaining agent of its workers for the purpose of collective bargaining. Direct
question that bars proceedings for a certification election. certification previously allowed under the Labor Code had been discontinued as a
method of selecting the exclusive bargaining agent of workers. Certification
National Union of Bank Employees v Minister of Labor, 110 SCRA 274 election has been found to be the most effective method for determining
The med-arbiter granted Unions petition for certification election. The employer representation in a bargaining unit for the reason that it is not enough that a union
filed a motion to suspend the holding of the certification election on the ground has the support of majority of the employees. It is equally important that
that there is a pending proceeding for the cancellation of the registration of the everyone in the bargaining unit be given the opportunity to express himself.
Union for allegedly engaging in prohibited and unlawful activities in violation of
the Labor Code. LECTURE
Held: Motion to suspend denied for the following reasons: What is a bargaining unit and what is a bargaining agent? You must
1. A certification election may be ordered despite the pendency of a petition to know the difference. How should the proper bargaining unit be determined? By
cancel the unions registration certificate. (Doctrine: Registration certificate mutuality of interests - thats the major consideration to determine the
valid until nullified) appropriate unit. It is the set of employees that can be served by bargaining
2. The petition to cancel Unions registration certificate was evidently intended negotiations and can be covered by collective bargaining activities. The set of
to delay the holding of the certification election. In this case, the petition was employees that have mutual interest should be included in the same bargaining
filed only after the Med-Arbiter has granted Unions petition for certification unit. Who makes the initial determination as to who shall comprise the
election. bargaining unit, and when is that determination made? It is made by the
employees themselves at the time of organization of a labor organization. You

Atty. Marlon Manuel
have to make the determination of the bargaining unit that the union intends to done by secret ballot. It is done by signature campaign, by openly asking
represent in the future. If it is a big company, in organizing the union, one has to employees to sign the document of voluntary recognition which is initiated by the
determine first if for purposes of collective bargaining, the bargaining unit wants union and the employer. So it is totally different from the certification election
to represent a particular geographical unit, or a particular group of employees provided in the law and rules. As far as Im concerned, I will challenge the
belonging to the same geographical unit because it will be needed in the validity of that mode of selecting the bargaining agent. But as far as the RULES
registration procedure. are concerned, we have two modes of selecting the sole and exclusive bargaining
The Supreme Court in the case of International School vs. Quisumbing representative.
said that giving foreign employees a salary rate higher than or different from the Certification Election
basic salary rate of Filipino employees doing the same job, having the same 1. Petition for Certification Election
skills, having the same seniority level, is discriminatory. After saying that,
however, the Court said they should belong to different bargaining units! Why is How is a certification election proceeding started? By filing a petition for
that odd? After saying that it is discriminatory, the Court allowed the company or certification election with the Med-Arbiter, through the Regional Office where
the union to commit discriminatory acts by saying that the foreigners should not the bargaining unit is located. Who can file the petition? The legitimate labor
be included in the same bargaining unit as the Filipino employees, then organization. Also the employer, when he is asked to bargain collectively, and the
management in effect is given the permission to give a set of benefits to the union is not the exclusive bargaining agent. When the employer is not the
foreign employees different from the benefits given to the Filipino employees petitioner, he is merely a bystander to the certification election proceedings,
covered in the bargaining unit. meaning that he cannot intervene in the proceedings. HE cannot oppose the
petition. He cannot participate in the conferences leading to the decision of the
Voluntary Recognition Med-Arbiter. He can only intervene in the inclusion/exclusion of voters, that such
How is the bargaining agent determined? Through certification election person is not a member of the bargaining unit. But the principle that he is merely
and voluntary recognition. Is voluntary recognition in the law? It is not found in a bystander is more theoretical than practical. His intervention is usually
the law. It is only provided in the rules. It is of doubtful validity, to say the least. honored, not only by the Med-Arbiter or by the Secretary of Labor but even by
Why, because it is akin to a direct certification made by the DOLE. We have the Supreme Court. You have read many cases where the Court allowed the
cases saying that direct certification cannot be done even if there is only one employer to question all sorts of things. And that is a variation of the principle
union and there is no rival union asking for direct certification. The Court said laid down by the SC itself against undue intervention by the employer in
that it is not the democratic way of selecting the representative for purposes of certification election proceedings. What is the reason for the rule or principle that
collective bargaining in the bargaining unit. The most democratic way, according the employer be regarded as a mere bystander? Because the certification election
to the Court, is to select the bargaining agent through secret ballot in a is a procedure for the employees alone and it is pursuant to the rule that favors
certification election supervised by the DOLE. That is not the case in direct establishments to be unionized.
certification where the decision is done not by the employees themselves but by Procedure. When can a petition be filed? At any time if there is no
the DOLE. That decision on direct certification can be applied to voluntary existing CBA. But if there is an existing CBA, it must be filed within 60 days
recognition mode now contained in the rules, as amended in 1997. It was only in prior to the expiration of such CBA, called the freedom period. Remember that
1997 that that mode was introduced. Whats the basic problem with that? Its the representation issue has a set period pegged/fixed by law at 5 years. It cannot
very transparent insofar as the decision of the employees are concerned. It is not

Atty. Marlon Manuel
be advanced or changed by the parties. Any attempt to do so will be a direct establishment must respect the freedom period. In unorganized establishments,
violation of the Labor Code, which has a categorical provision that the there is no mention of the 25% signature support requirement.
representation aspect shall be good for 5 years. After the petition is filed, the Med-Arbiter may either grant or deny the
What are the requirements for filing the petition? Names, addresses of petition. There cannot be a case where the Med-Arbiter will not decide the
the union, its members, the 25% signature requirement, description of the union, petition, except in consent elections. Before, there was a clear difference between
the number of members, description of the bargaining unit which is done by a certification election and a consent election. In one case the Court said (and this
stating the set of employees (r&f/supervisory), statement of jurisdictional facts to was asked in the bar exams a few years ago) that in a certification election, what
show that the petition is not barred by anything that will effectively bar a petition is being decided is the issue of who among the contending unions will be the sole
for certification election. The 25% signature support is NOT mandatory in the and exclusive bargaining representative of the employees covered in the
sense that the Med-Arbiter may hold the election even without such, but the labor bargaining unit while in the consent election the only issue is majority
organization must submit it later. This is according to jurisprudence. Does this representation-who has majority support. The rules however now give us a
have a basis in law? The Labor Code in Art. 256 makes the role of the Med- confused definition of consent election. It will call an election conducted because
Arbiter merely ministerial when the petition is complete-he must grant the of the parties agreement to the conduct of the election, a consent election. Which
petition. Meaning that when it is not complete such as when there is no 25% should not be the case because that election will still be for the sole purpose of
signature, the Med-Arbiters role becomes discretionary-he may choose to grant determining the sole and exclusive bargaining representative, and will be
the petition or not. equivalent to a certification election. In short, the consent election as per the rules
Is there a conflict between the LC and the Rules? The Rules make it call it should not be consent election, following the distinction earlier made by
mandatory to dismiss the petition lacking requirements. On the surface the LC the Court. The Rules will now give us two types of consent election one with
and the Rules do not seem conflicting. But the tenor of the LC the law gives the the supervision of the DOLE and without the supervision of the DOLE. We dont
Med-Arbiter the discretion to still grant the petition despite the lack of know how the SC will later on rule on this definition, again it is another
requirement. The Rules do not give the Med-Arbiter the discretion. So we follow innovation of the 1997 Department Order.
the LC of course. And the LC view is the one supported by jurisprudence. This is Who is an intervenor?
one of the defects of the 1997 Department Order.
ORGANIZED ESTABLISHMENTS UNORGANIZED ESTABLISHMENTS
If there is a union in a company is the company automatically organized?
The incumbent bargaining agent or any Any LLO in the bargaining unit
No because what makes a company unorganized is the absence of a certified
other LLO in the BU
bargaining agent. Now a company may be organized with respect to its rank-and-
file employees, for example, and at the same time be unorganized with respect to Motion for intervention must be filed Anytime before finality of the decision
its supervisory employees. Just because there is a union that is a certified within freedom period (this only
bargaining agent in that company then the company is organized. Is it material to applies to other LLOs, not to the
determine if the company is organized? Yes, because of the difference in incumbent representative who is
procedure and the treatment of organized and unorganized establishments. From considered a forced intervenor)
the moment of the petition there is already a difference. An organized

Atty. Marlon Manuel
2. Hearing and Conference Now as to the issue of inclusion/exclusion of voters, the procedure provided by
Certification election proceedings are not supposed to be adversarial in the law solves the problem only if management is in good faith, but not if
nature. They are honesty proceedings, even in the Rules, in order to determine management is in bad faith. If management questions the eligibility of a
the will of the bargaining unit. What should be resolved in the pre-election substantial number of employees, for instance 80 employees, such votes which
proceedings? A determination/stipulation of facts to determine who the parties will be segregated may materially alter the results of the election, but the issue of
are, and if the Med-Arbiter could get the parties to agree to a consent election, eligibility will takes 3-5 years to be resolved by the M-A, Secretary, CA and SC.
clarificatory questions and a final list of voters. But how is a list of voters The challenge of voters may be done in pre-election and even during election day
finalized? The Med-Arbiter shall order the employer to get a list of voters and itself. If management challenges practically all active union members votes, then
usually it is based on the payroll three months prior to the order granting the management validly prevents the finality of the elections.
certification election.
When there is a disagreement on the exclusion or inclusion of voters, Bars to Certification Election
they will still be allowed to vote but their votes shall be segregated. Each vote A petition for certification election may be filed anytime except when
shall be placed in a separate envelope. Why is there a need for them in a separate there exists the following:
envelope? Because it may be necessary to determine if each challenged voter, is
eligible to vote. And it cannot be done if all the segregated votes are placed in 1. Contract bar when a CBA has been registered in accordance with Art. 231,
one ballot box and are mixed or collected in only one box. It will be hard to a petition for certification election can be entertained only within 60 days
determine which vote was cast by which voter. This issue of eligibility is one that before expiration of such CBA.
will delay the case for years. In my experience if there is an issue on the list of 2. One-Year bar a petition may not be filed within one year from the date of a
voters, the representation officer is not a lawyer, and he would give the case back valid certification, consent or run-off election or voluntary recognition. The
to the Med-Arbiter, who will rule on the issue. And that decision can take years, one-year period shall be suspended when an appeal has been filed with the
and it goes to the Secretary of Labor, then to the CA and the SC, and back again Med-Arbiter regarding the results of the election.
to the Med-Arbiter. By that time you have a new set of employees, and this 3. Deadlock bar when there occurs a bargaining deadlock wherein the
would be used to attack the eligibility of voters, going through the same vicious certified bargaining has become the subject of a strike or lockout, or which
cycle over again. That happened in one case I handled. has been submitted to conciliation or arbitration.
There are other possibilities of delaying the process before the Med- 4. Negotiation bar may not be filed if before such petition is filed,
Arbiter decides the case. And when the Med-Arbiter does, counting the steps negotiations have already commenced between the employer and the duly
before the decision is final, will give you an idea of how management can delay registered/certified union in accordance with Art. 250)
the proceedings. It may be appealed to the Secretary, then up to the CA and then
to the SC. Assuming that each step takes one year, then it goes to the SC and is A CBA is valid even if it is not registered with the DOLE. But it is
given to the Med-Arbiter, there are at least 3 years before the decision is given required to protect the union from a challenge. Unless the CBA is registered with
back to the Med-Arbiter before the election proceedings can start. the DOLE, other rival unions are not barred from challenging the bargaining
agent-union anytime. Thus, the existence of a CBA does not necessarily mean a
bar unless such CBA is registered.

Atty. Marlon Manuel
Now, the right of an exclusive bargaining agent to file a petition for The periods given in the Rules for the Med-Arbiter to follow when an
certification election, that right is suspended by a third party in a petition for issue is decided upon are hardly followed.
cancellation. But what deprives it of its right to file a petition for certification If a deadlock occurs but the union does not do anything, does not act
election is a final decision canceling its registration not the filing, not the upon it, it cannot be a bar for a certification election. You are not covered by the
pendency of the petition for cancellation. This goes against many Supreme Court one-year bar to certification election, because there is no CBA yet. A petition for
decisions which say that the union retains its legitimate personality unless there is certification election can be filed if the union has not acted upon the deadlock,
a final decision canceling its registration. meaning walang notice of strike submitted, or has not been submitted to
For instance, the election are conducted, a winner emerges. But there is a compulsory arbitration proceedings.
protest. How is a protest made? If it pertains to the conduct of the elections, it is What are the other bars to a certification election? The negotiation bar.
placed in the minutes, and formalized by filing a protest with the Med-Arbiter. So This is a problematic provision. It says that as long as negotiations started, then
it is ascertained in the minutes if a protest was filed. Under the Rules, if there are that bars a petition for certification election. Basta nagsimula ang negotiations
no protests in the minutes, there is nothing that will prevent the certification of within the first year that serves as a bar. What if negotiations are delayed? For
the winner. The Rules authorize the representation officer, the head of the instance, three years have passed they are still negotiating. It still serves as a bar
election committee, before whom the pre-election conference and election because negotiations commenced on the first year. It is an absurd situation.
proceedings were conducted, to immediately certify the winner as the sole and
exclusive bargaining representative. But in reality that is not done, instead Now the Certification Election Day itself. What are the requirements?
binabalik sa Med-Arbiter. They let the Med-Arbiter issue the certification. Kasi 1. Must be on a regular business day
daw baka may magprotesta. Eh wala ngang nagprotesta eh. Its so frustrating to 2. Within company premises
see the Department not following the very rules it issues!!!
*There is no prohibition to conducting a certification election during a strike,
What is meant by termination of election proceedings? This is important outside the premises of the company and near a picket line.
for purposes of protest, because it should be filed, it should be formalized within
five days from the termination of the election. But before this may be done it Failure of election happens when the votes cast are less than majority of
must be in the minutes. What is the reckoning point of termination? IT is the end the number of eligible voters in the bargaining unit. This will not bar another
of canvassing of votes, which happens end of election day itself. Not the end of petition for certification election. An election bar presumes there was a valid
the decision on the segregated votes that will alter the results of the election. It election. A failure of election can prompt a petition for another election. Does it
does not include the time the challenged votes are resolved. go through the same process of the original petition for certification election
again? The Rules state that they can ask an immediate holding of another
When there is a challenge on the inclusion of a voter, the challenge is merely election. Immediate should be construed to mean a reasonable time. Personally,
formalized. I need not formalize the challenge in five days it is not considered I think this should not extend beyond six months. So all they have to do is file a
an election protest. In the nature of a challenge, and in the nature of an election petition for immediate holding of another election, which does not go through the
protest, the Rules do not say that the challenge is in the nature of an election steps followed in a petition for certification election. And the Med-Arbiter does
protest. not have discretion to deny the petition for immediate holding, since he already
previously ruled in favor of conducting an election.

Atty. Marlon Manuel
The Rules does not say who should file the petition for immediate In order to have a RUN-OFF election on the other hand, the basis is that
holding, so that means even an intervenor can be the one to file it. The problem is the unions must collectively get AT LEAST 50% of ALL VOTES CAST. Hence,
the Rules do not bar the filing of a petition for certification election prior to filing include the spoiled votes in the tally.
of a petition for immediate holding. To my mind, the petition for certification
election should not be entertained, because the first certification election has not
yet been resolved with finality. The second petition for certification election For example: 100 eligible voters, 3 contending unions
should be considered as a motion for intervention which is filed out of time.
Look at Rule 11 Section 17. The first sentence of Section 17 must be SCENARIO 1:
ignored!!! Its a totally erroneous statement!! The issue of the validity of votes Union A 5 Union C got majority of valid
cast is NOT material in the failure of election. Only the number of votes cast is Union B 20 votes cast, so C wins, no run-off
material it does not matter whether these are valid or not. For instance out of one Union C 35 election
hundred eligible voters, 60 cast their votes but only 30 are valid, there is NO No Union 0
failure of elections. It is a valid election. spoiled - 40
Are there grounds to suspend a petition for certification election? The
Progressive Development case. That is if the legal personality of a labor union is SCENARIO 2:
questioned, it is a prejudicial question which warrants suspension of the election. No union got majority of the
Union A 5
Union B 0 valid votes cast. No union wins.
Run-Off Election Union C 34
Now, when is there a run-off election? No Union 41
spoiled 20
1. There is a valid election meaning at least majority of the eligible voters
must have cast their votes SCENARIO 3:
2. There are at least 2 contending unions the Rules state there must be at least Union A 4
Union B 1 Not one of the choices won because none got
3 choices, meaning one of the choices is no union majority of the valid votes cast. No run-off because
Union C 35
3. No choice got majority of the valid votes cast hence no winner emerged No Union 40 100 votes were cast, and the unions got only 40.
4. The contending unions collectively got at least 50% of the total votes cast Spoiled 20
*Keep in mind, that in order to WIN the election, the union must get MAJORITY OF
THE VALID VOTES cast. Hence the basis is the votes cast, minus the spoiled *But in this scenario, there was a valid election! This is a valid certification
votes. election which bars a petition for certification for one year.
** No choice is not tantamount to No Union. Keep that in mind!!!

Atty. Marlon Manuel
SCENARIO 4: D. ADMINISTRATION OF AGREEMENT

Total votes cast = 80 out of 100. No winner,
Union A 4 because no one got 41 votes. Run-off will
Union B 1 LABOR CODE
happen between A anc C because the total votes
Union C 35 for the union is at least 50% of the votes cast
No Union 40 ART. 231. Registry of unions and file of collective agreements.
Spoiled 0 The Bureau shall keep a registry of
- legitimate labor organizations.
The Bureau shall also maintain a file of
SCENARIO 5: - all collective bargaining agreements
A=20 Run-off will happen between A, - and other related agreements
B=10 B and C. - and records of settlement of labor disputes,
C=10 - and copies of orders, and decisions of voluntary arbitrators.
No Union=40 The file shall be open and accessible
Spoiled=0 to interested parties
under conditions prescribed by the Secretary of Labor and Employment,
SCENARIO 6 provided that no specific information submitted in confidence shall be
A=15 Run-off election between A and B only. disclosed unless:
B=15 According to Atty. Manuel, the objective is to - authorized by the Secretary,
C=10 get the 2 highest unions, which in this case is A - or when it is at issue in any judicial litigation
No Union=40 and B. -or when public int\erest or national security so requires.
Within thirty (30) days from the execution of a collective bargaining agreement,
*What if there are segregated votes? The determination of result may be affected the parties shall submit copies of the same directly to the Bureau or the
by the segregated votes, whether to have a run-off or not. Regional Offices of the Department of Labor and Employment for
*The objective of the run-off election is to eliminate no union as a choice, since it registration ,
did not win anyway, and there is favored partiality towards organization and accompanied with
having a bargaining agent. - verified proofs of its posting in two conspicuous places in the place of work
*If there is failure of run-off election, get an immediate holding for run-off again. - and ratification by the majority of all the workers in the bargaining unit.
Take note of the Sanyo case. It explains Benguet substitutionality doctrine.
The Bureau or Regional Offices shall
act upon the application for registration of such collective bargaining
agreement within five (5) calendar days from receipt thereof.

Atty. Marlon Manuel
The Regional Offices shall furnish the Bureau with a copy of the collective
bargaining agreement within five (5) days from its submission. SUBSTITUTIONARY DOCTRINE
The Bureau or Regional Office shall assess the employer for every collective Where there occurs a shift in the employees union allegiance after the
bargaining agreement a execution of a CBA, the employees may change their agent, but the CBA, which
- registration fee of not less than one thousand pesos (P1,000.00) is still subsisting, continues to bind the employees up to its expiration date
- 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 Sanyo Philippines Workers Union-PSSLU Local Chapter No. 109 v Cazinares,
program. 211 SCRA 361
- Any amount collected under this provision shall accrue to the Special The CBA between Union and Sanyo contained a union security clause.
Voluntary Arbitration Fund. Subsequently, Union cancelled the membership of a number of employees for
various reasons. The union then submitted the names these employees to the
The Bureau shall also maintain a file, and shall undertake or assist in the employer recommending their dismissal, claiming that the said employees
publication, of all final decisions, orders and awards of the Secretary of Labor refused to submit themselves to the unions grievance investigation committee.
and Employment, Regional Directors and the Commission. Sanyo ordered the preventive suspension of the employees following this
recommendation. The company received no further information on whether or
CASES not said employees appealed the cancellation of their respective memberships.
Hence it considered them dismissed. The dismissed employees filed a complaint
Benguet Consolodated v BCI Employees and Workers Union, 23 SCRA 465 for illegal dismissal.
Union 1 forged a CBA with the employer with a no-strike, no-lockout clause. Held: There is illegal dismissal. The law authorizes the enforcement of a union
Subsequently, but during the effectivity of the CBA, Union 2 was certified as the security clause in the CBA provided that such enforcement is not characterized
new bargaining agent. Union 2 filed a notice of strike and did stage a strike. The by arbitrariness and always with due process. Sanyo failed in these two
employer invokes the no-strike clause in the CBA against Union 2. aspects.
Held: The clause does not bind Union 2 on the basis of the substitutionary
doctrine. Although the substitutionary doctrine provides that the employees The employees in this case filed the complaint for illegal dismissal with the
cannot revoke a validly executed CBA by the simple expedient of changing their NLRC. Union claims that the NLRC has no jurisdiction because the dispute
bargaining agent, this is subject to certain exceptions, to wit: relates to implementation of the CBA (specifically the union security clause) and
is subject to grievance machinery and voluntary arbitration.
1. To negotiate with management for the shortening of the CBA
Held: NLRC has jurisdiction. The parties to the CBA are the union and the
2. Personal undertakings
company, hence, only disputes involving the union and the company against each
The undertaking of Union 1 not to strike is personal in nature and does other shall be referred to the grievance machinery or voluntary arbitrators. In this
not bind any union other than Union 1. A new collective bargaining agent does case, the union and the employer are united as to the dismissal of the employees.
not automatically assume the personal undertakings of the deposed union.

Atty. Marlon Manuel
There exists no grievance between them that could be brought to a grievance Sundowner Development Corp. v Drilon, 180 SCRA 14
machinery. Hotel Mabuhay, Inc., due to financial difficulties, sold all its assets and personal
properties to Sundowner. (blablabla, strike, complaint, strike, dispute a lot of
MERALCO v Quisumbing, 302 SCRA 173 events immaterial to the issue) This case was subsequently filed by the Union
(I cant find anything in this case directly related to certification election bar. representing the rank and file employees of Mabuhay. This case involves several
Here are the rest of the doctrines enunciated in the case. You might find issues, all of which revolve about the singular issue of whether or not Sundowner
something useful.) may be compelled to absorb the employees of Mabuhay.
The Secretary of labor assumed jurisdiction over the dispute between Held: NO. As a general rule, there is no law requiring a bona fide purchaser of
MERALCO and the Union. The Secretary resolved the labor dispute through an assets of an ongoing concern to absorb in its employ the employees of the latter.
order containing the CBA to be adopted by MERALCO and the Union. The order The rule is that, unless expressly assumed, labor contracts such as employment
is here being assailed. contracts and CBAs are not enforceable against the transferee of an enterprise,
Held: When the Secretary of Justice assumes jurisdiction over a dispute, he labor contracts being in personam and thus binding only the parties thereto.
cannot just adopt the middle-ground approach (by finding the midway point (Implied from the obiter in the last sentence that when there is a bone fide
between the demands of the company and the demands of the union). This transfer of interest over an enterprise the CBA entered into with the transferor
approach is too simplistic that it fails to recognize and take into consideration does not bind the transferee: there exists no contract bar to the filing of a petition
that the parties may already be at the limits of the wage levels they can afford. for certification election since there is actually no CBA with respect to the
As a rule, bonus is not a demandable and enforceable obligation. It may transferee/new employer.)
nevertheless be granted on equitable considerations as when the giving of such
bonus has been the companys long and regular practice. Marlon: it must be
proven that the giving of the bonus has become a company policy.
A signing bonus is justified by, and is the consideration paid for, the
goodwill that existed in the negotiations that culminated in the signing of the
CBA. Without the goodwill, the signing bonus cannot be justified and any order
for such payment amounts to a grave abuse of discretion on the part of the
Secretary of Labor.
The Secretary cannot include a closed shop security clause since the
Union never demanded for the same.
PRINCIPLE OF HOLD OVER

In the absence of a new CBA, the parties must maintain the status quo and must
continue in full force and effect the terms and conditions of the existing
agreement until a new agreement is reached.

Atty. Marlon Manuel
VI. RIGHT TO STRIKE AND OTHER PEACEFUL to be recognized and respected. However, no labor union may strike and no
CONCERTED ACTIVITIES employer may declare a lockout on grounds involving inter-union and
intra-union disputes.
LABOR CODE (c) In cases of bargaining deadlocks, the duly certified or recognized
bargaining agent may file a notice of strike or the employer may file a
Art. 212. Definitions. notice of lockout with the Department at least thirty (30) days before the
(o) Strike means any temporary stoppage of work by the concerted action of intended date thereof. In cases of unfair labor practice, the period of notice
employees as a result of an industrial or labor dispute. shall be fifteen (15) days and in the absence of a duly certified or
(p) Lockout means the temporary refusal of an employer to furnish work as recognized bargaining agent, the notice of strike may be filed by any
a result of an industrial or labor dispute. legitimate labor organization in behalf of its members. However, in case of
dismissal from employment of union officers duly elected in accordance
(q) Internal union dispute includes all disputes or grievances arising from with the union constitution and by-laws, which may constitute union
any violation of or disagreement over any provision of the constitution and busting where the existence of the union is threatened, the 15-day cooling-
by-laws of a union, including any violation of the rights and conditions of off period shall not apply and the union may take action immediately.
union membership provided for in this Code.
(d) The notice must be in accordance with such implementing rules and
(r) Strike breaker means any person who obstructs, impedes, or interferes regulations as the Secretary of Labor and Employment may promulgate.
with by force, violence, coercion, threats or intimidation any peaceful
picketing by employees during any labor controversy affecting wages, (e) During the cooling-off period, it shall be the duty of the Department to
hours or conditions of work or in the exercise of the right of self- exert all efforts at mediation and conciliation to effect a voluntary
organization or collective bargaining. settlement. Should the dispute remain unsettled until the lapse of the
requisite number of days from the mandatory filing of the notice, the labor
(s) Strike area means the establishment, warehouses, depots, plants or union may strike or the employer may declare a lockout.
offices, including the sites or premises used as run-away shops, of the
employer struck against, as well as the immediate vicinity actually used by (f) A decision to declare a strike must be approved by a majority of the total
picketing strikers in moving to and fro before all points of entrance to and union membership in the bargaining unit concerned, obtained by secret
exit from said establishment. (As amended by RA 6715) ballot in meetings or referenda called for that purpose. A decision to
declare a lockout must be approved by majority of the board of directors of
Art. 263. Strikes, picketing and lockouts. the corporation or association or of the partners in a partnership, obtained
by secret ballot in a meeting called for that purpose. The decision shall be
(a) It is the policy of the State to encourage free trade unionism and free valid for the duration of the dispute based on substantially the same
collective bargaining. grounds considered when the strike or lockout vote was taken. The
(b) Workers shall have the right to engage in concerted activities for purposes Department may, at its own initiative or upon the request of any affected
of collective bargaining or for their mutual benefit and protection. The party, supervise the conduct of the secret balloting. In every case, the union
right of legitimate labor organizations to strike and picket and of or the employer shall furnish the Department the results of the voting at
employers to lockout, consistent with the national interest, shall continue

Atty. Marlon Manuel
least seven days before the intended strike or lockout, subject to the jurisdiction over the same or certify it to the Commission for compulsory
cooling-off period herein provided. arbitration. For this purpose, the contending parties are strictly enjoined to
(g) When, in his opinion, there exists a labor dispute causing or likely to cause comply with such orders, prohibitions and/or injunctions as are issued by
a strike or lockout in an industry indispensable to the national interest, the the Secretary of Labor and Employment or the Commission, under pain of
Secretary of Labor and Employment may assume jurisdiction over the immediate disciplinary action, including dismissal or loss of employment
dispute and decide it or certify the same to the Commission for compulsory status or payment by the locking-out employer of backwages, damages and
arbitration. Such assumption or certification shall have the effect of other affirmative relief, even criminal prosecution against either or both of
automatically enjoining the intended or impending strike or lockout as them.
specified in the assumption or certification order. If one has already taken The foregoing notwithstanding, the President of the Philippines
place at the time of assumption or certification, all striking or locked out shall not be precluded from determining the industries that, in his opinion,
employees shall immediately return to work and the employer shall are indispensable to the national interest, and from intervening at any time
immediately resume operations and readmit all workers under the same and assuming jurisdiction over any labor dispute in such industries in order
terms and conditions prevailing before the strike or lockout. The Secretary to settle or terminate the same.
of Labor and Employment or the Commission may seek the assistance of (h) Before or at any stage of the compulsory arbitration process, the parties
law enforcement agencies to ensure compliance with this provision as well may opt to submit their dispute to voluntary arbitration.
as with such orders as he may issue to enforce the same.
(i) The Secretary of Labor and Employment, the Commission or the voluntary
In line with the national concern for and the highest respect arbitrator or panel of voluntary arbitrators shall decide or resolve the
accorded to the right of patients to life and health, strikes and lockouts in dispute within thirty (30) calendar days from the date of the assumption of
hospitals, clinics and similar medical institutions shall, to every extent jurisdiction or the certification or submission of the dispute, as the case
possible, be avoided, and all serious efforts, not only by labor and may be. The decision of the President, the Secretary of Labor and
management but government as well, be exhausted to substantially Employment, the Commission or the voluntary arbitrator or panel of
minimize, if not prevent, their adverse effects on such life and health, voluntary arbitrators shall be final and executory ten (10) calendar days
through the exercise, however legitimate, by labor of its right to strike and after receipt thereof by the parties. (As amended by RA 6715)
by management to lockout. In labor disputes adversely affecting the
continued operation of such hospitals, clinics or medical institutions, it Art. 264. Prohibited activities.
shall be the duty of the striking union or locking-out employer to provide
and maintain an effective skeletal workforce of medical and other health (a) No labor organization or employer shall declare a strike or lockout without
personnel, whose movement and services shall be unhampered and first having bargained collectively in accordance with Title VII of this
unrestricted, as are necessary to insure the proper and adequate protection Book or without first having filed the notice required in the preceding
of the life and health of its patients, most especially emergency cases, for Article or without the necessary strike or lockout vote first having been
the duration of the strike or lockout. In such cases, therefore, the Secretary obtained and reported to the Department.
of Labor and Employment may immediately assume, within twenty four No strike or lockout shall be declared after assumption of jurisdiction by the
(24) hours from knowledge of the occurrence of such a strike or lockout, President or the Secretary or after certification or submission of the dispute

Atty. Marlon Manuel
to compulsory or voluntary arbitration or during the pendency of cases balloting on the improved offer of the employer on or before the 30th day of the
involving the same grounds for the strike or lockout. strike. When at least a majority of the union members vote to accept the
Any worker whose employment has been terminated as a consequence of an improved offer, the striking workers shall immediately return to work and the
unlawful lockout shall be entitled to reinstatement with full backwages. employer shall thereupon readmit them upon the signing of the agreement.
Any union officer who knowingly participates in an illegal strike and any In case of a lockout, the Department of Labor and Employment shall also
worker or union officer who knowingly participates in the commission of conduct a referendum by secret balloting on the reduced offer of the union on or
illegal acts during a strike may be declared to have lost his employment before the 30th day of the lockout. When at least a majority of the board of
right: Provided, That mere participation of a worker in a lawful strike shall directors or trustees or the partners holding the controlling interest in the case of
not constitute sufficient ground for termination of his employment, even if a partnership vote to accept the reduced offer, the workers shall immediately
a replacement had been hired by the employer during such lawful strike. return to work and the employer shall thereupon readmit them upon the signing
(b) No person shall obstruct, impede or interfere with by force, violence, of the agreement. (As amended by RA 6715)
coercion, threats or intimidation any peaceful picketing by employees
during any labor controversy or in the exercise of the right of self- Art. 266. Requirement for arrest and detention. Except on grounds of
organization or collective bargaining or shall aid or abet such obstruction national security and public peace, no union members or union organizers may
or interference. be arrested or detained for union activities without previous consultations with
the Secretary of Labor and Employment.
(c) No employer shall use or employ any strike-breaker nor shall any person
be employed as a strike-breaker. OMNIBUS RULES, BOOK V
(d) No public official or employee, including officers and personnel of the
New Armed Forces of the Philippines or the Integrated National Police, or RULE XXII
armed persons, shall bring in, introduce or escort in any manner, any Picketing, Strikes and Lockouts
individual who seeks to replace strikers in entering or leaving the premises
of a strike area, or work in place of the strikers. The police force shall keep SECTION 1. Grounds for strike and lockout. A strike or lockout
out of the picket lines unless actual violence or other criminal acts occur may be declared in cases of bargaining deadlocks and unfair labor
therein: Provided, That nothing herein shall be interpreted to prevent any practices. Violations of collective bargaining agreements, except
public officers from taking any measure necessary to maintain peace and flagrant and/or malicious refusal to comply with its economic
order, protect life and property, and/or enforce the law and legal order. provisions, shall not be considered unfair labor practices and shall not
be strikeable. No strike or lockout may be declared on grounds
(e) No person engaged in picketing shall commit any act of violence, coercion involving inter-union and intra-union disputes or on issues brought to
or intimidation or obstruct the free ingress to or egress from the employers voluntary or compulsory arbitration.
premises for lawful purposes, or obstruct public thoroughfares.
SECTION 2. Who may declare a strike or lockout. A certified or
Art. 265. Improved offer balloting. In an effort to settle a strike, the duly recognized bargaining representative may declare a strike in
Department of Labor and Employment shall conduct a referendum by secret cases of bargaining deadlocks and unfair labor practices. The employer

Atty. Marlon Manuel
may declare a lockout in the same cases. In the absence of a certified filed and the party concerned shall be so informed by the regional
or duly recognized bargaining representative, any legitimate labor branch of the Board.
organization in the establishment may declare a strike out but only on
grounds of unfair labor practices. SECTION 5. Disclosure of information. In collective bargaining, the
parties shall, at the request of either of them, make available such up-
SECTION 3. Notice of strike or lockout. In cases of bargaining to-date financial information on the economic situation of the
deadlocks, a notice of strike or lockout shall be filed with the regional undertaking, which is normally submitted to relevant government
branch of the Board at least thirty (30) days before the intended date agencies, as is material and necessary for meaningful negotiations.
thereof, a copy of said notice having been served on the other party Where the disclosure of some of this information could be prejudicial
concerned. In cases of unfair labor practice, the period of notice shall to the undertakings, its communication may be made condition upon a
be fifteen (15) days. However, in case of unfair labor practice involving commitment that it would be regarded as confidential to the extent
the dismissal from employment of any union officer duly elected in required. The information to be made available may be agreed upon
accordance with the union is threatened, the fifteen-day cooling-off between the parties to collective bargaining.
period shall not apply and the union may take action immediately after
the strike vote is conducted and the results thereof submitted to the SECTION 6. Conciliation. Upon receipt of the notice, the regional
appropriate regional branch of the Board. branch of the Board shall exert all efforts at mediation and conciliation
to enable the parties to settle the dispute amicably. The regional
SECTION 4. Contents of notice. The notice shall state, among branch of the Board may, upon consultation, recommend to the parties
others, the names and addresses of the employer and the union that the notice be treated as a preventive mediation case. It shall also
involved, the nature of the industry to which the employer belongs, encourage the parties to submit the dispute to voluntary arbitration.
the number of union members and the workers in the bargaining unit, During the proceedings, the parties shall not do any act which
and such other relevant data as may facilitate the settlement of the may disrupt or impede the early settlement of the dispute. The are
dispute, such as a brief statement or enumeration of all pending labor obliged, as part of their duty bargain collectively in good faith, to
disputes involving the same parties. participate fully and promptly in the conciliation meetings called by the
In cases of bargaining deadlocks, the notice shall, as far as regional branch of the Board. The regional branch of the Board shall
practicable. further state the unresolved issues in the bargaining have the power to issue subpoenas requiring the attendance of the
negotiations and be accompanied by the written proposals of the parties to the meetings.
union, the counter-proposals of the employer and the proof of a Information and statements given at conciliation proceedings
request for conference to settle the differences. In cases of unfair labor shall be treated as privileged communications. Conciliation and similar
practices, the notice shall, as far as practicable, state the acts officials shall not testify in any court or body regarding any matter
complained of and the efforts taken to resolve the dispute amicably. taken up at conciliation proceedings conducted by them.
Any notice which does not conform with the requirements of
this and the foregoing sections shall be deemed as not having been SECTION 7. Strike or lockout vote. A decision to declare a strike
must be approved by a majority of majority of the union membership

Atty. Marlon Manuel
in the bargaining unit concerned obtained by secret ballot in meeting reduced offer, the workers shall immediately return to work and the
of referenda called for the purpose. A decision to declare a lockout employer shall thereupon readmit them upon the signing of the
must be approved by a majority of the board of directors of the agreement.
employer, corporation or association or the partners in a partnership
obtained by a secret ballot in a meeting called for the purpose. SECTION 10. Hiring of replacements. The mere participation of a
The regional branch of the Board may, at its own initiative or worker in a lawful strike shall not constitute sufficient ground for
upon request of any affected party, supervise the conduct of the secret termination of his employment even if a replacement had been hired
balloting. In every case, the union or the employer shall furnish the by the employer during such lawful strike. But any union officer who
regional branch of the Board the notice of meetings referred to in the knowingly participates in the commission of illegal acts during a strike
preceding paragraph at least twenty-four (24) hours before such may be declared to have lost his employment status.
meetings as well as the results of the voting at least seven (7) days
before the intended strike or lockout, subject to the cooling-period SECTION 11. Prohibitions regarding the employment of
provided in this Rule. replacements. No public official or employee, including officers and
personnel of the Armed Forces of the Philippines or the Philippine
SECTION 8. Declaration of strike or lockout. Should the dispute National Police, or any armed person shall
remain unsettled after the lapse of the requisite number of days from (a) Bring in, introduce or escort, in any manner, any individual who
the filing of the notice of strike or lockout and for the results of the seeks to replace strikes in entering or leaving the premises of a
election required in the preceding section, the labor union may strike strike area or
or the employer may lock out its workers. The regional branch of the (b) Work in place of the strikers.
Board shall continue mediating and conciliating.
Nothing herein shall be interpreted to prevent aforementioned
SECTION 9. Improved offer balloting. In case of a strike, the officials, employees or peace officers from taking any measure
regional branch of the Board shall, at its own initiative or upon the necessary to maintain peace and order and/or protect life and
request of any affected party, conduct a referendum by secret property.
balloting on the improved offer of the employer on or before the 30th
day of strike. When at least a majority of the union members vote to SECTION 12. Peaceful picketing. Workers shall have the right to
accept the improved offer, the striking workers shall immediately peaceful picketing. No person engaged in picketing shall commit any
return to work and the employer shall thereupon readmit them upon act of violence, coercion or intimidation or obstruct the free ingress to
the signing of the agreement. or agrees for the employers premises for lawful purposes, or obstruct
public thoroughfares.
In case of lockout, the regional branch of the Board shall also
conduct a referendum by secret balloting on the reduced offer of the No person shall obstruct, impede or interfere with by force,
union on or before 30th day of the lockout. When at least a majority violence, coercion, threats or intimidation, any peaceful picketing by
of the board of directors or trustees or the partners holding the workers during any labor controversy or in the exercise of the right to
controlling interest in the case of partnership vote to accept the self-organization for collective bargaining or shall aid or abet such
obstruction or interference. No employer shall use or employ any

Atty. Marlon Manuel
person to commit acts nor shall any person be employed for such before the intended date thereof or 15 days in case of unfair labor practice;
purpose. (2) strike vote approved by a majority of the total union membership in the
bargaining unit concerned, obtained by secret ballot in a meeting called for
SECTION 13. Injunctions. No court or entity shall enjoin any that purpose; (3) notice given to the Dept. of the results of the voting at
picketing, strike or lockout, except as provided Article 218 and 263 of least 7 days before the intended strike. These requirements are mandatory.
the Code.
In none of the numerous pleadings filed by the Union has it been
The Commission shall have the power to issue temporary shown that a strike vote had been taken before declaring a strike. As
restraining orders in such cases but only after due notice and hearing between the Co. and the Union, the latter is in a better position to present
and in accordance with its rules. The reception of evidence for the proof of such fact. The Unions failure to do so raises the strong
application of a writ of injunction may be delegated by the Commission probability that there was no strike vote taken. The statement that there
to any Labor Arbiter who shall submit his recommendations to the
was in the Secretarys order is contrary to evidence in the record.
Commission for its consideration and resolution.
2. Even assuming that there was a vote taken, the SC agrees that the Union
Any ex parte restraining order issued by the Commission, or its
nevertheless failed to observe the required seven- day strike ban from the
Chairman or Vice-Chairman where the Commission is not in session
date the strike vote should have been reported to the DOLE up to the time
and as prescribed by its rules, shall be valid for a period not exceeding
20 days. the Union staged the strike.
The importance of the strike vote and reporting of the results to
SECTION 14. Criminal prosecution. The regular courts shall have the DOLE cannot be gainsaid as it is the Union itself that the law seeks to
jurisdiction over any criminal action under Article 272 of the Code. protect by ensuring that the majority of its members voted in favor of the
strike. Consequently, good faith cannot be invoked by the Union in this
CASES case.
3. The strike declared by the Union was attended by pervasive and
First City Interlink Transportation Co., Inc. vs. Roldan- Confesor, 272 SCRA widespread violence. The acts of violence committed were not mere
124 isolated incidents which could normally occur during any strike.
Nagkakaisang Manggagawa ng Fil Transit- NFL went on strike twice after Nevertheless, we are constrained to uphold the Secretarys ruling that
several failed conciliation conferences with Fil Transit(business name of First responsibility for these illegal acts must be on an individual and not
City Interlink). The company claims that the strikes held were illegal since a) no collective basis. Therefore, although the strike was illegal, only the union
strike vote had been obtained before the strike was called and b) assuming there officers and criminal acts against the employer are deemed to have lost
was, the result of strike vote was not reported to the DOLE. Thus, Co. refused to their employment status. Union members who were merely instigated to
comply with the return-to-work order. DOLE granted backwages. participate in the illegal strike should be treated differently.
Held:
1. Pursuant to Art. 263(c)(f), the requisites for a valid strike are as follows:
(1) a notice of strike filed with the Department of Labor at least 30 days

Atty. Marlon Manuel
Lapanday Workers Union vs. NLRC, 248 SCRA 95 as they should not be compensated for services skipped during the illegal
The Union filed a notice of strike with the National Conciliation and Mediation strike.
Board(NCMB), accusing the Co. of ULP (coercion of employees, intimidation of
union officers and union- busting). During the pendency of a conciliation National Union of Workers in Hotels, Restaurants & Allied Industries vs.
conference called by the NCMB, a director of the Union was gunned down by a NLRC, 287 SCRA 192
man later identified to be an alleged member of the new security forces of the Co. Due to unheeded demands, a faction of the Union proclaimed itself as the Interim
For failing to report for work and complying with the quota system adopted by Union Junta. This Junta requested from the Hotel the conduct of a special
management, the Co. filed charges against the Union for illegal strike, ULP and election of officers which was disallowed. A notice of strike was filed by the
damages. A strike was conducted among the members of the Union. The result Junta before the NCMB alleging ULP against the Co. The NCMB dismissed said
of the strike was then submitted to the NCMB. 2 days later, the Union struck. notice on the ground that the imputed ULP acts were mere conflicts between two
Held: sets of union officers or intra- union disputes, and, being categorized as non-
strikeable acts, they fall under DOLE jurisdiction.
1. Some of the limitations on the exercise of the right of strike are provided
for in paragraphs (c) and (f) of Article 263 of the LC. They provide for the Held:
procedural steps to be followed before staging a strike filing of notice of 1. Generally, a strike based on a non- strikeable ground is an illegal strike.
strike, taking of strike vote, and reporting of the strike to DOLE. The 7 Corollarily, a strike grounded on ULP is illegal if no such acts actually
day waiting period is intended to give DOLE an opportunity to verify exist. As an exception, even if no ULP acts are committed by the ER, if
whether the projected strike really carries the imprimatur of the majority of the EEs believe in good faith that ULP acts exist soa s to constitute a valid
the union members. Strike is usually the last weapon of labor to compel ground to strike, the strike held pursuant to such belief may be legal,
capital to concede to its bargaining demands or to defend itself against although subsequently, such allegations of ULP were found to be
ULPs of management. In addition, a majority vote assures the Union it groundless.
will go to war against management with the strength derived from unity Mere claim of good faith would not justify the holding of a strike
and hence, with better chance to succeed. under the exception. In addition, the circumstances must have warranted
2. In the case at bar, we rule that the strike conducted by the union is plainly such belief. Moreover, failure of the Junta to comply with the prohibition
illegal as it was held within the 7- day waiting period provided by par. f of to strike by dismissal of their notice is reflective of bad faith.
Art. 263. The haste in holding the strike prevented DOLE from verifying 2. As such, their discharge by the ER was lawful especially in this case where
whether it carried the approval of the majority of the union members. such wildcat strike was an attempt to undermine the Unions position as
3. We affirm the penalty of dismissal meted only to the leaders of the illegal the exclusive bargaining representative, and was therefore, an unprotected
strike, esp. the Union officers who served as major players. They cannot activity.
claim good faith to exculpate themselves having admitted knowledge of
the law on strike, including its procedure. Members who were merely Philtread Workers Union vs. Confesor, 269 SCRA 393
instigated to participate are entitled to reinstatement but not to backwages PTWU filed a notice of strike on grounds of ULP. The Co. filed a notice of
lockout and a petition to declare the work slowdowns staged by the Union illegal.

Atty. Marlon Manuel
After a failure in conciliation, the company declared a company- wide lockout assumption of jurisdiction by the secretary and the issuance of a return-to-
which resulted in the dismissal of 80 Union members, which in turn brought work order had become the only way of breaking the deadlock.
about a notice of strike being filed by the Union in self- defense. In exercise of 2. The regional trial court was without jurisdiction over the subject matter of
his power under Art. 263 (g), the Sec. of Labor certified the case for compulsory the case filed by the students. That the regular courts have no jurisdiction
arbitration to the NLRC enjoining the strike and issued a return-to work order over labor disputes and to issue injunctions against strikes is well-settled.
which is being questioned by the Union.
Held: Art. 263 (g) does not violate the rights of workers to strike. It was a St. Scholasticas College vs. Torres, 210 SCRA 565
valid exercise of police power of the State and is pursuant to the Secretarys work Workers and teachers at the St. Scholasticas College formed for the first time, a
of maintaining industrial peace. The rights granted by the Constitution are not labor union. They filed a petition for CE to which the school objected. The
absolute. They are still subject to the limitation of not being exercised arbitrarily. teacher struck. Upon petition of the school, the DOLE Sec. assumed jurisdiction
The Labor Code vests upon the Secretary discretion as to which and ordered the teachers to return to work twice. For refusing to comply with
industries are indispensable to national interest. The co. supplies 22% of the tire such orders, the school dismissed the teachers.
products in the country and employs about 700 people. Any work disruption Held: The dismissal of the teachers was valid. The assumption of jurisdiction
thereat will certainly prejudice the employment and livelihood of their workers by the secretary over labor disputes involving academic institutions was already
and their dependents, which will aggravate the already worsening unemployment upheld in PSBA vs. Noriel.
situation in the country and discourage foreign and domestic investors from Art. 263 (g) provides that if a strike has already taken place at the time of
further investing in the country. Thus, upon such determination of the Secretary, assumption, all striking employees shall immediately return to work. This means
he will assume jurisdiction over the dispute of said industry. The intervention of a return to work order is immediately effective and executory notwithstanding
the Secretary was necessary to settle the labor dispute. No GAD on his part. the filing of a MfR. Under Art. 264, all workers who knowingly participate in an
illegal strike are deemed to have lost their employment status. Not only union
PSBA-Manila vs. Noriel, 164 SCRA 402 officers but union members can be dismissed when they knowingly participate in
A complaint for ULP and declaration of illegality of strike was filed by PSBA an illegal strike. It is presumed that when a striking worker insists on the strike
against the union. The DOLE Sec. assumed jurisdiction and enjoined the parties when told by the Sec. to return to work, they have forfeited their right to be
to maintain status quo (for the EEs to return to work and for the Co. to accept all readmitted.
returning employees under the same terms prior to the strike.). During the
pendency of these cases, some students filed a complaint before the RTC to Sarmiento vs. Tuico, 162 SCRA 676
enjoin the company and the union from continuing with their picket which the Asian Transmission Corporation dismissed Catalino Sarmiento who was the Vice
RTC dismissed. President of Bisig ng Asian Transmission Labor Union. The company dismissed
Held: him for allegedly carrying a deadly weapon within company premises. The
1. The facts and the law fully support the acting secretarys assumption of union filed a notice of strike claiming ULP. SOLE assumed jurisdiction and
jurisdiction. It may be added that due to PSBAs intransigent refusal to certified the case to NLRC. NLRC issued a return-to work order. All this
attend the conciliation conferences called after the union struck, happened while criminal complaints were pending against the workers for
staging an illegal strike.

Atty. Marlon Manuel
Held: There can be no question that the SOLE acted correctly in certifying the dismissal, reinstatement can be the only outcome (but was infeasible here so sep.
labor dispute to the NLRC. The return-to-work order issued by the NLRC was pay na lang).
equally valid as a statutory part and parcel of the certification order issued by the
SOLE. It was merely an implementation of the law and a reiteration of the Telefunken Semiconductors Employees Union- FFW vs. SOLE, 283 SCRA
SOLEs directive. The law itself provides that such assumption or certification 145
shall have the effect of automatically enjoining the impending strike. If one has After striking Ees refused to comply with an RWO of the SOLE, violence
already taken place at the time of assumption or certification, all striking or erupted in their picket lines. Complaints for threats, defamation, illegal detention
locked out employees shall immediately return to work and the employer shall and physical injuries against the strikers for stoning the service bus ferrying non-
immediately readmit them. striking Ees. The Ees were eventually terminated. The Union now questions the
The legality of the order is also not affected by the pendency of the exclusion of union officers, shop stewards and those with pending crim cases in
determination of the legality of the strike. It is, therefore, not correct to say that the SOLE order for the ER to accept striking EEs.
the return-to-work order may be enforced only if the strike is illegal, for the Held: We cannot see how the SOLE arrived at his decision of excluding Union
purpose precisely is to maintain the status quo while the determination is being officers, et al. It may be true that the workers struck after the SOLE assumed
made. jurisdiction over the case and that they may have failed to immediately return to
work even after issuance of the RWO, making their strike illegal (for an RWO is
Reformist Union of R.B. Liner vs. NLRC, 266 SCRA 713 immediately effective). But the liability of each of the union officers and the
The Union struck. The SOLE assumed jurisdiction and certified the case to workers, if any, has yet to be determined. This is evident as the DOLE has yet to
NLRC. Case was dismissed after the two parties reached an agreement that hear and receive evidence on the matter. Thus, excluding the specified workers
included the holding of CE. The winner of the CE made CBA proposals but the w/o first determining whether they knowingly committed illegal acts would be
co. refused to bargain so the Union filed a ULP case again while the co. tantamount to dismissal without due process of law = GAD.
countered with a case seeking to declare the strike illegal. Strike declared illegal As to the issue of the enforcement of the Writ of Execution for the
and Ees deemed to have lost employment for participating. implementation of the RWO, no legal impediment existed to such as the said
Held: The co. can no longer contest the legality of the strike held by the union issue was not raised to the SC and has thus become final.
before the agreement as it was even the one which sought compulsory arbitration
to resolve the issue. By acceding to the peaceful settlement brokered by the Telefunken Semiconductors Ees Union- FFW vs. CA, GR 1430313-14,
NLRC, the co. waived the issue of the illegality of the strike which was already December 18, 2000
resolved. The very nature of compulsory arbitration, that of a compromise SOLE issued an Assumption Order after te Union filed a notice of strike. Union
agreement, makes the settlement binding on the parties. It could no longer be still struck. SOLE then issued an RWO along with directive on the Co. to
reviewed by the Labor Arbiter, much less by the NLRC as the Code provides that reinstate all striking workers except union officers, shop stewards, and those
decisions in compulsory arbitration proceedings shall be final and executory 10 with pending criminal charges while the resolution on the legality of the strike
calendar days after receipt by the parties. was pending. SOLE subsequently declared the strike illegal on the basis of
As regards the illegal lockout alleged, the co. was culpable. Since there position papers and evidence submitted by the Co. only since theUnin refused to
was no defiance of the SOLEs RWO and there being no cause to decree the Ees adduce evidence on the ground of insufficiency of the prosecutions evidence.

Atty. Marlon Manuel
Held: The office of a pet. for review on certio (R45) requires only questions of 2. On the basis of the general rule that strikers arent entitled to backwages,
law. The factual findings of quasi- judicial agencies, like DOLE, when supported the award of backwages to the 114 EEs is deleted. The principle of no
by substantial evidence are entitled to great respect in view of their expertise. work, no pay applies.
The need to determine the individual liabilities of the striking workers, the union
officers and members alike, was correctly dispensed with by the Sec. of Labor Association of Independent Unions in the Phils. vs. NLRC, 305 SCRA 219
after ha gave sufficient opportunity to the striking workers to cease and desist Casual EEs were excluded from membership with the bargaining rep. A strike
from continung with ther picket. was staged by a union formed by casual employees seeking regularization during
It is clear from Art. 263 (g) that the moment the SOLE assumes which they perpetrated illegal acts like coercing non- striking ees to not report
jurisdiction over a labor dispute in an industry indispensabe to national interest, for work. Union filed cases for ULP and illegal lockout. The Co. sought
such assumption shall have the effect of automatically enjoining the intended or injunction and declaration of illegal strike. Strike held illegal and union officers
impending strike. It was not even necessary for the SOLE to issue another order to have lost employment status.
directing them to return to work. The mere issuance of an assumption order Held:
automatically arries with it an RWO, even if the directive to return to work is not 1. The strike staged was in the nature of a union-recognition-strike which is
expressly stated in the assumption order. Regularity of the service having been calculated to compel the ER to recognize ones union, and not the other
established, the strike is deemed illgal for having been staged in knowing contending group, as the bargaining representative despite teh striking
defiance of the assumption and retur-to work orders. unions doubtful majority status to merit voluntary recognition and lack of
formal certification as the exclusive rep.
Philippines Inter- Fashion, Inc. vs. NLRC, 117 SCRA 659
After being informed by the Co. of the an intended retrenchment, about 200 EEs 2. The strike was illegal. The right to strike is never meant to oppress or
went to DOLE during their breaktime. On their 2 nd visit, the SOLE issued to destroy the ER. The law provides limits such as the prohibited activities
them an RWO. Upon their return to Co. premises, they were made to stay in the under Art. 264, particularly (e): commission of acts of violence, coercion,
canteen only on the pretext that the machines needed repair. Nonetheless, they intimidation, etc. Even if a strike is valid because its objective is lawful, it
were paid their wages for the days they werent allowed to work. Co. applied for may still be declared invalid where the means employed are illegal.
clearance to terminate EEs who participated in the alleged walk out 3. It follows, therefore, that dismissal of the union officers of the striking
Held: union was justified and valid as a consequence of the illegality of the strike
staged by them in accordance with Art. 264 (a):knowing participation in an
1. There was no clear and unequivocal waiver by the ER of its right to pursue illegal strike.
the case for illegal strike against the 114 EEs who werent reinstated. It
actually pursued its application for their dismissal. However, in view of 4. No illegal lockout. It was the EEs who voluntarily stopped working
the undisputed findings of illegal strike and illegal lockoout, both parties because of their strike.
are in pari delicto and such situation warrants the restoration of the status
quo ante (i.e., before the illegal strike and lockout) through reinstatement
of the 114 EEs.

Atty. Marlon Manuel
MSF Tire and Rubber, Inc. vs. CA, August 5, 1999 Held:
SOLE assumed jurisdiction over Union and Co. dispute. Pending resolution, the 1. There are allowable standards to freedom of speech such as the overriding
Co. entered into a Memorandunm of Agreement with Siam Tyre Public Co. considerations of national security and preservation of democratic
where the equipment and plant of Philtread (the Co.) were to be sold to MSF, Inc. institutions. As regards to the right to strike, the Constitution itself
and its land to Sucat Land Corp. MSF asked the Union to desist from picketing qualifies its exercise with the proviso in accordance with law, which is a
and upon the latters refusal, filed a complaint for injunction with the RTC. manifestation of the States right to regulate its use or even deny certain
Union moved to dismiss on the ground that MSF, being a mere alter ego of sectors such right. EO180 enjoins under pain of administrative sanctions,
Philtread, was not an innocent bystander and therfore not entitled to injunction. all govt officers and EEs from staging strikes, demonstrations, mass
Held: leaves, walkouts, and other forms of mass action that will result in
1. The right to picket is not absolute. The courts are authorized to confine or temporary work stoppage or disruption of public service. Jurisprudence is
localize the sphere of the demonstration to the parties to the labor dispute, also clear in holding that workers in the public sector do not enjoy the right
including those with related interest, and to insulate establishments or to strike.
persons with no industrial connection or having interest totally foreign to 2. Strike means any temporary stoppage of work by the concerted action of
the context of the dispute. The right may be regulated at the instance of EEs as a result of an industrial or labor dispute. In this case, the teachers
3Ps or innocent bystanders when the exercise of the right would were not penalized for the exercise of their right to assemble peacefully
constitute an invasion of their rights. and to petition the govt. for redress but of conduct prejudicial to the best
2. Said innocent bystander must, however, satisfy the court that it is entirely interest of the service for having absented themselves without prior
different from, without any connection whatsoever to, either party to the authority from their schools which led to deprivation of students of
dispute. In the transaction bet/ Philtread and Siam, Philtrad remains 20% education. Had they availed themselves of their free timenot the DECS,
owner of MSF and 60% owner of Sucat Land. MSF not an innocent the CSC nor the SCcould have held them liable for the valid exercise of
bystander. (Court refused to apply doctrine of piercing saying that it is the their constitutionally guaranteed rights.
innocent bystander rule which is applicable.) 3. No backwages for suspension was justified. Decision of the Sec.
confirming dismissal of an EE under his jurisdiction is executory even
Jacinto vs. CA, GR 124540, November 14, 1997 pending appeal thereof. It was the Secs final judgment which were
Public teachers staged a mass action for the purpose of pressuring govt. to carried out.
grant their demands. DECS Sec. Cario issued an RWO. Upon their refusal,
Cario issued formal charges & preventive suspension orders against them for Acosta vs. CA, GR 132088, June 28, 2000
gross misconduct, found guilty by the CSC. He found them guilty and ordered Public school teachers didnt report for work and instead staged mass actions at
their dismissal. CA said the mass action was for all intents and purposes a strike Liwasang Bonifacio. For refusal to comply with DECS SEC. Carios RWO,
which civil service employees, like these public teachers, did not have a right to. they were charged with gross neglect of duty, etc. The Sec. Found them guilty
after an investigation and ordered their dismissal from the service.

Atty. Marlon Manuel
Held: The basis of the right to strike is the Constitution and the Labor Code.
1. Jacinto vs. CA, Mla. Public School Teachers Assoc vs. Laguio constitute However, remember that:
stare decisis from which the Court finds no reason to deviate. 1. This pertains only to the private sector employees.
2. Since dismissal orders remain valid and effective until modified or set 2. There can never be a strike if there is no legitimate union in the company
aside, the intervening period during which an EE is not permitted to work 3. The right to strike should be exercised only after the exercise of the right
cannot be argued as amounting to unjustified suspension. Preventive to self-organization
suspension not a penalty. Moreover, after full ventilation of their case
before the Merit Systems Protection Board (MSPB), the CSC and the CA, Thus, one can strike even before filing a petition for certification
they cannot no w allege denial of due process to justify claim for election. One can strike the moment one becomes a legitimate labor organization.
backwages. Appeal is curative of supposed denial.
Grounds for Strike
LECTURE
1. Bargaining deadlock obviously only the LLO bargaining agent may file
for notice for strike under this ground
Strikes
What is a strike? Any temporary stoppage of work through concerted 2. ULP any LLO can initiate in the absence of a bargaining agreement
action of the workers because of a labor dispute. To be considered a strike, the 3. Union busting the officers of the union are terminated in bad faith
stoppage of work must be the result of a labor dispute. Assuming you have a 4. No ULP when the union believed in good faith that there is ULP
stoppage of work, the proximate or remote cause of such must be due to a labor despite a finding to the contrary later on
dispute, and the stoppage must be through concerted effort of the workers.
There are three elements:
Requisites for a strike
1. Stoppage of work
1. CBA (collective bargaining agreement) deadlock or ULP (unfair labor
2. Concerted action of the employees practice) these are the ONLY grounds for a valid strike
3. A labor dispute 2. Notice of strike filed with the NCMB Regional Office and the employer
Without the concurrence of the three elements, there is no strike. 30 or 15 (if ULP) days before the intended date thereof
For example: 3. Efforts of the NCMB at conciliation and mediation through the
conciliator
1. Stoppage of work because the machinery shut down due to a technical
problem 4. File notice with the NCMB regarding the strike vote to be conducted 24
hours after notice
2. Stoppage of work because of a labor dispute and because of a
commotion in the negotiations room, the workers out of their own 5. Report of the strike vote
initiative stopped work, with not concerted efforts

Atty. Marlon Manuel
The strike vote is done in order to determine whether to proceed with the 7-day period must be counted after the 30/15 day ban. But thats wrong because
strike, under the grounds raised in the notice of strike. The earliest it can be filed thats not in the law.
is simultaneous with the notice of strike. If the first strike vote fails, can a second There are two views regarding cases of union busting:
strike vote be conducted again? There is no prohibition under the law to allow
this. View 1 the 15 day period is dispensed with, but the 7-day ban must still be
followed, or
View 2 this is an emergency situation where the 7 day period should not be
*A common mistake is to think the Med-Arbiter has something to do with strikes. made to apply as well. The reason why the 15-day period is dispensed with in
No. His only function is to act upon and decide petitions for certification election union busting is because of the exigency of the situation, and if the 7day period is
and nothing else. to be made to apply, it only defeats the purpose of removing the 15-day period.
Who can file a notice of strike? Illegality of Strikes

If bargaining deadlock is the cause, the bargaining agent When is a strike illegal? When it is attended with any of the following:
If ULP, both bargaining agent and, to Sirs mind =) other LLOs as well. Art. 1. Procedural requirements are not complied with
263 (c) is not a clear prohibition that any LLO can file a notice only in cases
where there is no bargaining agent. Besides, in reality, the minority union is 2. Non-strikeable grounds
usually the victim of ULP! 3. Use of violence such will be considered illegal only if it is pervasive
The importance of notice of strike is that, aside from the fact that it and widespread. Isolated acts will not affect the legality of the strike.
should be filed, it also initiates the conciliation process, and the day of strike is 4. Use of strikebreaker e.g. use of police force to stop the strike
reckoned from the day the notice of strike is filed. Also, the strike cannot be conducted with the use of violence, force or
*Union busting as a ground to strike may be so, when the existence of the union intimidation or blockage of the ingress/egress of the premises and public
is threatened: thoroughfares
In such a case, there is a dismissal of a DULY ELECTED officer of a union
In this situation, the cooling off period does not apply Effect of illegal strike
After the cooling-off period, the earliest time a strike may be conducted 1. Union officer will be terminated if he knowingly participated in an illegal
is right after such cooling-off period. Noticeably, the law does not give an expiry strike
date for a notice of strike. It does not state a maximum period between filing the 2. Union member must knowingly participated in the commission of the
notice and conducting the strike. illegal acts for him to be terminated
The law also does not give any period within which to submit the report If prohibited or unlawful acts are committed by the strikers, can
of the strike vote. However, the law states the strike may be held only seven days injunction issue? YES, but only against the prohibited activities, not against the
after the report of the strike vote is filed. Now the NCMB manual states that the strike.

Atty. Marlon Manuel
A strike without valid ground is not tantamount to an illegal strike, if the During the strike, no work=no pay except if the employee returned
workers believed in good faith that there was valid ground to strike. But this voluntarily and the employer refused to get them back. The employer can hire
belief must be based on actual circumstances justifying the belief. replacements while the strike is ongoing. After the strike, the temporary
employees can be terminated for redundancy.
INNOCENT BYSTANDER DOCTRINE
Persons affected by the strike or picket, who are not parties to the dispute, and
whose interests are completely foreign, may file before the regular courts for a
civil case of injunction. The acts complained of are prohibited acts that may be
committed either by the LLO or the employer.
Assumption of Jurisdiction
*Secretary of Labor or president may assume jurisdiction which are
indispensable to the national interest (may be motu propio or upon request)
Assumption Order the Secretary of Labor intervenes and decides the case/issue,
not even to conciliate/mediate
Certification Order Secretary certifies the NLRC to arbitrate
It depends on the Secretary of Labor whether the case should be a case for
issuance of an AO or CO, but usually if there is a bargaining deadlock, an
AO is issued. If it is a ULP= CO.
When the Secretary assumes jurisdiction, the employee must return to
work and the employer is required to accept them back, and follow the status quo
ante the strike. No order is needed, it automatically operates.
The general rule is that in no case can there be a wholesale dismissal of
all strikers if there is an illegal strike. The exception is when there is an
assumption/certification order but the employees refuse to obey such order
despite notice. The employees refusal to return, despite having been duly
notified of the Secretarys assumption of jurisdiction, is a ground for termination.
However, not all the employees who defied the assumption order or
participated in an illegal strike may be terminated at once. Each employee must
be judged on their individual culpability (due process pa rin!!!).

Atty. Marlon Manuel
VII. RIGHT TO SECURITY OF TENURE the time his compensation was withheld from him up to time of his
actual reinstatement. (As amended by RA 6715)
LABOR CODE
ART. 282. Termination by employer. An employer may
Art. 277. Miscellaneous Provisions. terminate an employment for any of the following just causes:
(a) Serious misconduct or willful disobedience by the employee of
(b) Subject to the constitutional right of workers to security of tenure the lawful orders of his employer or representative in connection
and their right to be protected against dismissal except for a just with his work;
or authorized cause and without prejudice to the requirement of (b) Gross and habitual neglect by the employee of his duties;
notice under Article 283 of this Code, the employer shall furnish (c) Fraud or willful breach by the employee of the trust reposed in
the workers whose employment is so sought to be terminated a him by his employer or duly authorized representative;
written notice containing a statement of the cause for (d) Commission of a crime or offense by the employee against the
termination and shall afford the latter ample opportunity to be person of his employer or any immediate member of his family or
heard and to defend himself with the assistance of his his duly authorized representative; and
representative if he so desires in accordance with company rules (e) Other causes analogous to the foregoing.
and regulations promulgated pursuant to guidelines set by the
Department of Labor and Employment. Any decision taken by ART. 283. Closure of establishment and reduction of personnel.
employer shall be without prejudice to the right of the worker to The employer may also terminate the employment of any employee
contest the validity or legality of his dismissal by filing a due to the installation of labor-saving devices, redundancy,
complaint with the regional branch of the National Labor retrenchment to prevent losses or the closing or cessation of operation
Relations Commission. The burden of proving that the of the establishment or undertaking unless the closing is for the
termination was for a valid or authorized cause shall rest on the purpose of circumventing the provisions of this title, by serving a
employer. The Secretary of Labor and Employment may suspend written notice on the workers and the Department of Labor and
the effects of the termination pending resolution of the dispute in Employment at least one (1) month before the intended date thereof.
the event of a prima facie finding by the appropriate official of In case of termination due to the installation of labor-saving devices or
the Department of Labor and Employment before whom such redundancy, the worker affected thereby shall be entitled to a
dispute is pending that the termination may cause a serious labor separation pay equivalent to at least one (1) month pay or to at least
dispute or is in implementation of a mass lay-off. (As amended one (1) month pay for every year of service, whichever is higher. In
by RA 6715) case of retrenchment to prevent losses and in cases of closures or
cessation of operations of establishment or undertaking not due to
ART. 279. Security of Tenure. In cases of regular employment, serious business losses or financial reverses, the separation pay shall
the employer shall not terminate the services of an employee except be equivalent to one (1) month pay or at least one-half (1/2) month
for a just cause or when authorized by this Title. An employee who is pay for every year of service, whichever is higher. A fraction of at least
unjustly dismissed from work shall be entitled to reinstatement six (6) months shall be considered one (1) whole year.
without loss of seniority rights and to his backwages computed from

Atty. Marlon Manuel
Art. 284. Disease as ground for termination. An employer may Art. 287. Retirement. Any employee may be retired upon
terminate the services of an employee who has been found to be reaching the retirement age established in the collective bargaining
suffering from any disease and whose continued employment is agreement or other applicable employment contract.
prohibited by law or is prejudicial to his health as well as the health of In case of retirement, the employee shall be entitled to receive
his co-employees: Provided, That he is paid separation pay equivalent such retirement benefits as he may have earned under existing laws
to at least one month salary or to one-half month salary for every year and any collective bargaining or other agreements: Provided, however,
of service, whichever is greater, a fraction of at least six months being That an employees retirement benefits under any collective bargaining
considered as one whole year. and other agreements shall not be less than those provided herein.
Art. 285. Termination by employee. In the absence of a retirement plan or agreement providing for
(a) An employee may terminate without just cause the employee- retirement benefits of employees in the establishment, an employee
employer relationship by serving a written notice on the upon reaching the age of sixty (60) years or more, but not beyond
employer at least one month in advance. The employer upon sixty-five (65) years which is hereby declared the compulsory
whom no such notice was served may hold the employee liable retirement age, who has served at least five (5) years in the said
for damages. establishment, may retire and shall be entitled to retirement pay
(b) An employee may put an end to the relationship without serving equivalent to at least one-half (1/2) month salary for every year of
any notice on the employer for any of the following just causes: service, a fraction of at least six (6) months being considered as one
(1) Serious insult by the employer or his representative on the whole year.
honor and person of the employee; Unless the parties provide for broader inclusions, the term one
(2) Inhuman and unbearable treatment accorded the employee half (1/2) month salary shall mean fifteen (15) days plus one-twelfth
by the employer or his representative; (1/12) of the 13th month pay and the cash equivalent of not more
(3) Commission of a crime or offense by the employer or his than five (5) days of service incentive leaves.
representative against the person of the employee or any of Retail, service and agricultural establishments or operations
the immediate members of his family; and employing not more than ten (10) employees or workers are
(4) Other causes analogous to any of the foregoing. exempted from the coverage of this provision.
Art. 286. When employment not deemed terminated. The bona Violation of this provision is hereby declared unlawful and
fide suspension of the operation of a business or undertaking for a subject to the penal provisions under Article 288 of this Code.
period not exceeding six months, or the fulfillment by the employee of
a military or civic duty shall not terminate employment. In all such
cases, the employer shall reinstate the employee to his former position
without loss of seniority rights if he indicates his desire to resume his
work not later than one month from the resumption of operations of
his employer or from his relief from the military or civic duty.

Atty. Marlon Manuel
OMNIBUS RULES, BOOK V employee reasonable opportunity within which to explain
his side.
RULE XXIII (b) A hearing or conference during which the employee
Termination of Employment concerned, with the assistance of counsel if the employee
so desires, is given opportunity to respond to the charge,
SECTION 1. Security of tenure. present his evidence or rebut the evidence presented
(a) In cases of regular employment, the employer shall not of against him; and
regular employment, the employer shall not terminated the (c) A written notice termination, the foregoing notices shall be
services of an employee except for just or authorized causes as served on the employees last known address.
provided by law, and subject to the requirements of due process.
II. For termination of employment as based on authorized causes
(b) The foregoing shall also apply in cases of probationary defined in Article 283 of the Code, the requirements of due
employment; provided, however, that in such cases, termination process shall be deemed complied with upon service of a written
of employment due to failure of the employee to qualify in notice to the employee and the appropriate Regional Office of the
accordance with the standard of the employer made known to Department at least thirty (30) days before the effectivity of the
the form at the time of engagement may also be a ground for termination, specifying the ground or grounds for termination.
termination of employment.
III. If the termination is brought about by the completion of the
(c) In cases of project employment or employment covered by contract or phase thereof, no prior notice is required. If the
legitimate contracting or subcontracting arrangements, no termination is brought about by the failure of an employee to
employee shall be dismissed prior to the completion of the meet the standards of the employer in the case of probationary
project or phase thereof for which the employee was engaged, or employment, it shall be sufficient that a written notice is served
prior to the expiration of the contract between the principal and the employee within a reasonable time from the effective date of
contractor, unless the dismissal is for just or authorized cause termination.
subject to the requirements of due process or prior notice, or is
brought about by by the completion of the phase of the project SECTION 3. Rights to contest dismissal. Any decision taken by
or contract for which the employee was engaged. the employer shall be without prejudice to the right of the worker to
contest the validity or legality of his dismissal by filing a complaint
SECTION 2. Standards of due process; requirements of notice. In with the Regional Branch of the Commission.
all cases of termination of employment, the following standards of due
process shall be substantially observed. SECTION 4. Period to decide. Cases involving the dismissal of a
I. For termination of employment based on just causes as defined worker shall be decided by the Labor Arbiter within twenty (20)
in Article 282 of the Code: working days from the date of submission of such cases for decision.
(a) A written notice served on the employee specifying the
SECTION 5. Reinstatement pending hearing. The Secretary may
ground or grounds for termination, and giving to said
suspend the effects of the termination pending resolution of the case

Atty. Marlon Manuel
in the event of a prima facie finding that the termination may cause a OMNIBUS RULES, BOOK VI
serious labor dispute or is in implementation of a mass lay-off.
RULE I
SECTION 6. Certification of employment. A dismissed worker shall Termination of Employment and Retirement
be entitled to receive, or request, a certificate from the employer
specifying the dates of his engagement and termination of his SECTION 2. Security of tenure.
employment and the type or types of work on which he is employed.
(a) In cases of regular employment, the employer shall not
terminate the service of an employee except for just or
SECTION 7. Report of dismissal. The employer shall submit a
authorized causes as provided by law, and subject to the
monthly report to the Regional Office having jurisdiction over the place
requirements of due process.
of work all dismissals effected by it during the month, specifying
therein the names of the dismissed workers, the reasons for their (b) The foregoing shall also apply in cases of probationary
dismissal, the dates of commencement and termination of employment; provided, however, that in such cases, termination
employment, the positions last held by them and such other of employment due to failure of the employee to qualify in
information as may be required by the Department for policy guidance accordance with the standards of the employer made known to
and statistical purposes. the former at the time engagement may also be a ground for
termination of employment.
SECTION 8. Preventive suspension. The employer may place the (c) In cases of employment covered by contracting or subcontracting
worker concerned under preventive suspension if has continued arrangement, no employee shall be dismissed prior to the
employment poses a serious and imminent threat to the life or expiration of the contract between the principal and contractor or
property of the employer or of his co-workers. subcontractor as defined in Rule VIII-A, Book III of these Rules,
unless the dismissal is for just or authorized cause, or is brought
SECTION 9. Period of suspension. No preventive suspension shall about by the completion of the phase of the contract for which
last longer than thirty (30) days. The employer shall thereafter the employee was engaged, but in any case, subject to the
reinstate the worker in his former or in a substantially equivalent requirements of due process or prior notice.
position or the employer may extend the period of suspension
(d) In all cases of termination of employment, the following
provided that during the period of extension, he pays the wages and
standards of due process shall be substantially observed:
other benefits due to the worker. In such case, the worker shall not be
bound to reimburse the amount paid to him during the extension if the For determination of employment based on just causes as
employer decides, after completion of the hearings, to dismiss the defined in Article 282 of the Labor Code:
worker. (i) A written notice served on the employee specifying the
ground or grounds for termination, and giving said
employee reasonable opportunity within which to explain
his side.

Atty. Marlon Manuel
(ii) A hearing or conference during which the employee 1. On due process, there is no denial of due process where a party was
concerned, with the assistance of counsel if he so desires is afforded an opportunity to present his side. Also, the procedure by which
give opportunity to respond to the charge, present his issues are resolved based on position papers, affidavits and other
evidence, or rebut the evidence presented against him. documentary evidence is recognized as not violative of such right.
(iii) A written notice of termination served on the employee, 2. Now, on the merits. The determination of the legality of the dismissal
indicating that upon due consideration of all the hinges on the issue of whether or not there is substantial evidence to prove
circumstances, grounds have been established to justify his that the antecedent facts which culminated in the marriage between
termination. petitioner and her student constitute immorality and or grave misconduct.
For termination of employment as defined in Article 283 of There is, however no direct evidence on record which proves the charges
the Labor Code, the requirement of due process shall be deemed of immorality and grave misconduct by petitioner. It would seem quite
complied with upon service of a written notice to the employee obvious that the avowed policy of the school in rearing and educating
and the appropriate Regional Office of the Department of Labor children is being unnecessarily bannered to justify the dismissal of
and Employment at least thirty days before effectivity of the petitioner. This policy, however, is not at odds with and should not be
termination, specifying the ground or grounds for termination. capitalized on to defeat the security of tenure granted by the Constitution
If the termination is brought about by the completion of a to labor. In termination cases, the burden of proving just and valid cause
contract or phase thereof, or by failure of an employee to meet for dismissing an employee rests on the employer and his failure to do so
the standards of the employer in the case of probationary would result in a finding that the dismissal is unjustified. The charge
employment, it shall be sufficient that a written notice is served against petitioner not having been substantiated, we declare her dismissal
the employee within a reasonable time from the effective date of as unwarranted and illegal.
termination.
CASES Mabeza vs. NLRC, 271 SCRA 670

Norma Mabeza contends that she was made to sign by the hotels management an
A. JUST CAUSES instrument attesting to the latters compliance with minimum wage and other
labor standard provisions of law. She refused to swear to the instrument however.
Chua-Qua vs. Clave, 189 SCRA 117 She was chided by management for her refusal to swear the affidavit. She went
Love has its reasons which reason itself does not know on LOA but when she returned, she was not accepted. Filed case for illegal
Petitioner is a teacher in Tay Tung High School in Bacolod. She has been dismissal.
teaching for 13 years when the dispute arose because a student, one Booby Qua, Held:
was assigned to remedial instructions after class. Because of this, they fell in
1. It is settled that in termination cases the employer bears the burden of
love and eventually got married. Tay Tung dismissed her on the ground of
proof to show that the dismissal is for just cause, the failure of which
immorality or grave misconduct.
would mean that the dismissal is not justified and the employee is entitled
Held: to reinstatement.

Atty. Marlon Manuel
2. The claim of abandonment by the employer cannot be sustained as for dismissal imposed on him in relation to lesser sanctions previously meted by PAL
abandonment to arise, there must be concurrence of two things: 1) lack of on its other employees. We are solely concerned here with the sufficiency of the
intention to work; and 2) the presence of overt acts signifying the evidence surrounding Pinuelas dismissal. Besides, Pinuelas examples do not
employees intention not to work. The fact that she returned after her LOA involve a plane with a scheduled flight. A mere delay on petitioners flight
negates an intention to abandon. schedule due to aircraft damage entails problems like hotel accommodations for
3. Loss of confidence as a just cause for dismissal was never intended to its passengers, re-booking, the possibility of law suits, and payment of special
provide employers with a blank check for terminating their employees. landing fees not to mention the soaring costs of replacing aircraft parts. All told,
Such a vague, all-encompassing pretext as loss of confidence, if Pinuelas gross negligence which called for dismissal is evident.
unqualifiedly given the seal of approval by this Court, could readily reduce
to barren form the words of the constitutional guarantee of security of Salaw vs. NLRC, 202 SCRA 7
tenure. Having this in mind, loss of confidence should ideally apply only to Espero Santos Salaw was employed by Associated Bank as a credit investigator-
cases involving employees occupying positions of trust and confidence or appraiser. The police extorted a confession from to the effect that he sold some
to those situations where the employee is routinely charged with the care foreclosed properties by the bank, the proceeds of which he shared with a co-
and custody of the employers money or property. To the first class belong employee.
managerial employees, i.e., those vested with the powers or prerogatives to After a hearing, he was dismissed for alleged serious misconduct or
lay down management policies and/or to hire, transfer, suspend, lay-off, willful disobedience and fraud or willful breach of the trust reposed on him.
recall, discharge, assign or discipline employees or effectively recommend Held:
such managerial actions; and to the second class belong cashiers, auditors,
property custodians, etc., or those who, in the normal and routine exercise 1. Under the Labor Code, an amended, the requirements for the lawful
of their functions, regularly handle significant amounts of money or dismissal of an employee by his employer are two-fold: the substantive
property. Evidently, an ordinary chambermaid who has to sign out for linen and the procedural. Not only must the dismissal be for a valid or
and other hotel property from the property custodian each day and who has authorized cause as provided by law (Articles 279, 281, 282-284, New
to account for each and every towel or bedsheet utilized by the hotels Labor Code), but the rudimentary requirements of due process notice of
guests at the end of her shift would not fall under any of these two classes hearing must also be observed before an employee may be dismissed.
of employees for which loss of confidence, if ably supported by evidence, One does not suffice; without their concurrence, the termination would, in
would normally apply. the eyes of the law, be illegal.
2. The inviolability of notice and hearing for a valid dismissal of an employee
PAL vs. NLRC, 194 SCRA 139 can not be over-emphasized. Those twin requirements constitute essential
Nathaniel Pinuela was ground equipment and tug operator for PAL. He was 5 elements of due process in cases of employee dismissal. The requirement
years employed when incident occurred. He was towing a plane which crashed of notice is intended to inform the employee concerned of the employers
into a bridge causing damage to the plane. After investigation, he was dismissed. intent to dismiss him and the reason for the proposed dismissal; on the
Held: Pinuela was comparing with other sanctions imposed by PAL on other other hand, the requirement of hearing affords the employee the
erring employees. The SC said: Lastly, Pinuela should not compare the penalty of opportunity to answer his employers charges against him and accordingly

Atty. Marlon Manuel
to defend himself therefrom before dismissal is effected. Neither one of Held:

these two requirements can be dispensed with without running afoul of the 1. Right not waived. Mere failure on the part of Mallare to explain his actions
due process requirement of the Constitution. after the incident is not a waiver.
3. The investigation of petitioner Salaw by the respondent Banks 2. The failure of petitioner to give private respondent the benefit of a hearing
investigating committee violated his constitutional right to due process, in before he was dismissed constitutes an infringement of his constitutional
as much as he was not given a chance to defend himself, as provided in right to due process of law and equal protection of the laws.
Rule XIV, Book V of the Implementing Rules and Regulations of the
Labor Code governing the dismissal of employees. Section 5 of the said 3. HOWEVER, when Mallare was granted his rights to present his side
Rule requires that the employer shall afford the worker ample opportunity before the Labor arbiter, it was found that his dismissal was indeed for just
to be heard and to defend himself with the assistance of his representative, cause.The policy of ordering the reinstatement to the service of an
if he so desires. Here petitioner was perfunctorily denied the assistance of employee when it appears he was not afforded due process, although his
counsel during the investigation to be conducted by the PDIC (not the Phil. dismissal was found to be for just and authorized cause should be re-
Dep. Ins. Corp, this is what they call their internal discipline board). No examined. It will be highly prejudicial to the interests of the employer to
reasons were proffered which vitiated the denial with irregularity and impose on him the services of an employee who has been shown to be
unfairness. Significantly, the dismissal of the petitioner from his guilty of the charges that warranted his dismissal from employment.
employment was characterized by undue haste. The law is clear that even 4. HOWEVER AGAIN, Wendys must nevertheless be held to account for
in the disposition of labor cases, due process must not be subordinated to failure to extend to private respondent his right to an investigation before
expediency or dispatch. Otherwise, the dismissal of the employee will be causing his dismissal. It must be imposed a sanction for its failure to give a
tainted with illegality. formal notice and conduct an investigation as required by law before
4. In Santos v. NLRC (G.R. No. 76721, September 21, 1987, 154 SCRA dismissing petitioner from employment. Tama na ang P1000 na parusa.
166), the SC held that the normal consequences of a finding that an
employee has been illegally dismissed are, firstly, that the employee Serrano vs. NLRC, 323 SCRA 445, 331 SCRA 331
becomes entitled to reinstatement to his former position without loss of Ruben Serrano was hired as security checker to apprehend shop-lifters. In view
seniority rights and, secondly, the payment of backwages corresponding to of retrenchment by Isetann, he was laid-off. Serrano filed a case for illegal
the period from his illegal dismissal up to actual reinstatement. dismissal, he alleges lack of due process.
Held:
Wenphil vs. NLRC, 170 SCRA 69 1. The SC felt that the ruling in WenPhil was defective since its effect was to
Roberto Mallare was hired by Wendys as a crew member at its Cubao Branch. sanction the policy of dismiss now, pay later. What employers would do
Mallare had an altercation with a co-employee (near the salad bar), Job is dismiss now without due process, then pay the fine (Isang Libo lang
Barrameda, as a result of which he was suspended and subsequently dismissed. It naman). But to return to the pre-Wenphil doctrine that the dismissal is void
is claimed by Wendys that Mallare waived the right to investigation, hearing, would be uncalled for, because it is unjust to require one to keep in his
etc. employ, a worker who is guilty. The proper doctrine would be to abolish
the fine altogether and simply consider the dismissal as merely ineffectual

Atty. Marlon Manuel
for failure to comply with the requirements set forth by law. Thus, the 2. The Bank has not established nor presented sufficient basis for the
effect of this is to grant the employee backwages counted from the time he dismissal of petitioners from service on the ground of serious misconduct.
was ineffectively dismissed. Misconduct is improper or wrong conduct. It is the transgression of some
2. On due process, the SC said thru Justice Mendoza that denial of due established and definite rule of action, a forbidden act, a dereliction of
process cannot be invoked against an employer as the provisions on the duty, willful in character, and implies wrongful intent and not mere error in
Bill of Rights is a limitation against Government power. Atty. Manuel judgment. The misconduct to be serious within the meaning of the Act
interprets this as an erosion of the rights of workers (actually lahat, must be of such a grave and aggravated character and not merely trivial or
remember his example on Ateneo?) to due process which cannot be unimportant. Such misconduct, however serious, must, nevertheless, be in
invoked against private individuals. But MY READING of the ruling was connection with the employees work to constitute just cause for his
that Mendozas statement was only to justify the upholding of a dismissal separation.
obtained without due process. A violation of the rights of an individual by
another private individual would entitle one to damages under the civil Escobin vs. NLRC, 289 SCRA 48
code, which the SC in Wenphil awarded. But since this was deemed PEFTOK is a watchman and protective agency while UP-NDC is a corp. which is
ineffective, the SC adopted the ineffective doctrine and awarded full the owner/possessor of lands in Basilan. The petitioners are guards hired to worl
backwages. in guarding the plantation. Later, they were dismissed by PISI for insubordination
and grave misconduct, as a result of their refusal to ring the bell in the evening
Cosep vs. NLRC, 290 SCRA 704 while on duty in the premises of the plantation. But it was revoked upon
Alma Cosep, et. al. were regular employees of Premiere Development Bank at its intervention of Congressman. What the agency did was to transfer them to
Guadalupe Branch. When one of her co-employees was suspended on alleged Manila. Petitioners did not report to Manila. Dismissed again for disobedience.
malversation of money belonging to its clients, petitioners wrote an open letter Held:
which criticized private respondents handling of the case. Bank sent to each 1. Disobedience, to be a just cause for termination, must be willful or
petitioner a memorandum dismissing them from the service effective intentional, willfulness being characterized by a wrongful and perverse
immediately, on the ground that they undermined the interest of the bank. mental attitude rendering the employees act inconsistent with proper
Held: subordination. A willful or intentional disobedience of such rule, order or
1. For there be willful disobedience of the employers lawful orders, as a just instruction justifies dismissal only where such rule, order or instruction is
cause for dismissal of an employee, the concurrence of at least two (2) (1) reasonable and lawful, (2) sufficiently known to the employee, and (3)
requisites is needed: the employees assailed conduct must have been connected with the duties which the employee has been engaged to
willful or intentional, the willfulness being characterized by a wrongful discharge.
and perverse attitude; and the order violated must have been reasonable, 2. First, it was grossly inconvenient for petitioners, who were residents and
lawful, made known to the employee and must pertain to the duties which heads of families residing in Basilan, to commute to Manila. Second,
he had been engaged to discharge. petitioners were not provided with funds to defray their transportation and
living expenses. The right to transfer employees from one office to another
provided there is no demotion in rank or diminution of salary, benefits

Atty. Marlon Manuel
and other privileges is judicially recognized as a prerogative inherent in satisfactorily rebut this accusation, his only defense being self-serving
the employers right to effectively control and manage the enterprise. But denials.
this principle is not at issue here. The issue is whether petitioners alleged 2. It is the prerogative of management, in the interest of effective operations,
disobedience constituted a just and valid cause to dismiss them. It is to transfer employees in good faith, if it means better operations.
obvious to us that the dismissal was effected with mala fides, as it was
intended to punish petitioners for their refusal to heed their employers 3. The twin requirements of notice and hearing constitute the essential
unreasonable directive. elements of due process. Due process of law simply means giving
opportunity to be heard before judgment is rendered. In fact, there is no
3. Abandonment, as a just and valid cause for dismissal, requires a deliberate, violation of due process even if no hearing was conducted, where the party
unjustified refusal of an employee to resume his work, coupled with a clear was given a chance to explain his side of the controversy. What is frowned
absence of any intention of returning to his work. No evidence was upon is the denial of the opportunity to be heard.
presented to establish that petitioners relinquished their jobs.
4. Constructive discharge is an involuntary resignation resorted to when Caoile vs. NLRC, 299 SCRA 76
continued employment is rendered impossible, unreasonable or unlikely; Caoile was hired by Coca-Cola as an Electronic Data Processing Supervisor. He
when there is a demotion in rank and/or a diminution in pay; or when a was later dismissed on the ground of loss of trust and confidence for his
clear discrimination, insensibility or disdain by an employer becomes involvement in an anomalous encashment of check payments made by a
unbearable to the employee. In this particular case, petitioners were not contractor.
constructively dismissed; they were actually dismissed without just and Held: Law and jurisprudence have long recognized the right of employers to
valid cause. dismiss employees by reason of loss of trust and confidence. In the case of
supervisors or personnel occupying positions of responsibility, loss of trust and
Autobus Workers vs. NLRC, 291 SCRA 219 confidence justifies termination. This ground is premised from the fact that an
Ricardo E. Escanlar worked with Autobus as a Cutting Machine Operator. He employee concerned holds a position of trust and confidence. This situation holds
was later elected President of the Autobus Workers Union (AWU), the union for where a person is entrusted with confidence on delicate matters, such as custody,
the rank and file employees. He was transferred to another division and he handling, or care of the employers property. It must also be work-related.
allegedly used profane or obscene language against his manager in the division.
After investigation, Escanlar was dismissed on gross misconduct. Judy Phils. vs. NLRC, 289 SCRA 755
Held: Virginia Antiola was employed by petitioner Judy Philippines as an assorter of
1. Misconduct is improper or wrong conduct. It is the transgression of some baby infant dresses. Virginia Antiola was directed by her supervisor, to sort out
established and definite rule of action, a forbidden act, a dereliction of baby infant dresses pursuant to an instruction sheet. She was subsequently made
duty, willful in character, and implies wrongful intent and not mere error in to explain her erroneous assortment and packaging of 2,680 dozens of infant
judgment. The misconduct must be of such a grave and aggravated wear. She was dismissed for negligence.
character and not merely trivial or unimportant. The charge of serious Held: Article 282(b) of the Labor Code requires that . . . such neglect must not
misconduct finds ample support in the record. Petitioner failed to only be gross, it should be Gross and habitual neglect in character. There is no

Atty. Marlon Manuel
doubt that Antiola was negligent, nonetheless, her wrongdoing does not warrant Held:
dismissal inasmuch as dismissal is the ultimate penalty that can be meted to an 1. Having an extra-marital affair is an affront to the sanctity of marriage,
employee. which is a basic institution of society. Even our Family Code provides that
husband and wife must live together, observe mutual love, respect and
Del Monte vs. NLRC, 287 SCRA 71 fidelity. As a teacher, petitioner serves as an example to his pupils,
Procesa Alsola was a packer paid by the hour in Del Monte Cagayan de Oro. For especially during their formative years and stands in loco parentis to them.
incurring a total of 57 days of absences without permission, she was sent a total Consequently, it is but stating the obvious to assert that teachers must
of 17 show-cause letters requiring her to explain her absences. Hence, she was adhere to the exacting standards of morality and decency. There is no
dismissed after failure to show cause. dichotomy of morality. A teacher, both in his official and personal conduct,
Held: must display exemplary behavior. He must freely and willingly accept
1. The rule is that an employers power to discipline its workers may not be restrictions on his conduct that might be viewed irk-some by ordinary
exercised in an arbitrary manner as to erode the constitutional guarantee of citizens. In other words, the personal behavior of teachers, in and outside
security of tenure. Here, the company did not follow its own procedure the classroom, must be beyond reproach. Accordingly, teachers must abide
when instead of reprimanding and following the scales of penalties in by a standard of personal conduct which not only proscribes the
successive violations of rules, what they did was to dismiss her outright. commission of immoral acts, but also prohibits behavior creating a
suspicion of immorality because of the harmful impression it might have
2. Abandonment, as a just and valid ground for termination, means the on the students. From the foregoing, it seems obvious that when a teacher
deliberate, unjustified refusal of an employee to resume his employment. engages in extra-marital relationship, especially when the parties are both
The burden of proof is on the employer to show a clear and deliberate married, such behavior amounts to immorality, justifying his termination
intent on the part of the employee to discontinue employment. The intent from employment.
cannot be lightly inferred or legally presumed from certain equivocal acts.
For abandonment to be a valid ground for dismissal, two (2) elements must 2. Having concluded that immorality is a just cause for dismissing petitioner,
be proved: the intention of an employee to abandon, coupled with an overt it is imperative that the private respondent prove the same. Since the
act from which it may be inferred that the employee has no more intent to burden of proof rests upon the employer to show that the dismissal was for
resume his work. In the case at bar, these elements were not established. a just and valid cause, the same must be supported by substantial evidence.
Here it was, so dismissal affirmed.
Santos, Jr. vs. NLRC, 287 SCRA 117
Santos, a married man, was employed as a teacher by Hagonoy Institute. Libres v. NLRC, 307 SCRA 675
Likewise working as a teacher for Hagonoy was Mrs. Arlene T. Martin, also Libres was put under investigation then was suspended for sexually harassing a
married. In the course of their employment, the couple fell in love. Thereafter, secretary. The findings were that he touched a female subordinates hand and
rumors regarding the couples relationship spread, especially among the faculty shoulder, caressed her nape and told other people that it was the girl who had
members and school officials. What Hagonoy did was to advise Martin to take a hugged and kissed him or that she responded to the sexual advances. He
LOA which Martin did not do. Based on her refusal, she was dismissed. questioned the suspension.

Atty. Marlon Manuel
Held: Before R.A. 7877 (An Act Declaring Sexual Harassment Unlawful in the ALU-TUCP v. NLRC, 302 SCRA 708
Employment, Education or Training Environment and for Other Purposes) was in Felizardo was caught by a security guard bringing out company property. He was
effect, the Labor Arbiters had to rely on the common connotation of sexual dismissed for dishonesty and theft of company property. The union questioned
harassment as it is generally understood by the public. It also relied upon the the dismissal.
Managerial Evaluation Committee Report (MEC) defining sexual harassment. It Held: In this case, there is no question of Felizardos guilt. He stole a pair of
said that sexual harassment is an unwelcome or uninvited sexual advance, boots, a drinking container and 15 hamburger patties. The question is whether
request for sexual favors and other verbal or physical conduct of sexual nature, dismissal is an appropriate penalty. The employer has the inherent right to
and that such conduct unreasonably interferes with the individuals performance discipline, including that of dismissing its employees for just causes. That right
at work, or creates an intimidating, hostile or offensive work environment. The is, however, subject to reasonable regulation. The court here decided that
court agreed that Libres, by his actions, had sexually harassed the secretary. As a dismissal was not proportionate to the gravity of the offense. Considering the
managerial employee, he is bound by more exacting work ethics. He failed to value of the articles stolen and the fact that he had no previous record during his
live up to his standard of responsibility when he succumbed to his moral employment, he should not have been terminated.
perversity. And when such moral perversity is perpetrated against his
subordinate, he proves a justifiable ground for his dismissal for lack of trust and VH Manufacturing, Inc. v. NLRC, GR 130957, January 19, 2000
confidence. It is the right and duty of every employer to protect its employees Gamido was allegedly caught sleeping on the job. He was terminated for
from oversexed superiors. violation of company rules which provide for a penalty of separation for sleeping
during work hours. He questioned the decision.
Aparente v. NLRC, 331 SCRA 82
Aparente, while driving a truck belonging to his employer, sideswiped a 10-year Held: Not a valid termination. In termination disputes, the burden of proof is
old girl, injuring her. He did not have a drivers license. He was put under always on the employer to prove that the dismissal was for a just and valid cause.
investigation by the company and then dismissed for having violated company The records show that the allegation that Gamido was sleeping was not
rules and regulations for blatant disregard of control procedures. He filed a case substantiated by any convincing evidence other than the bare allegation of the
for illegal dismissal. company. Also, sleeping on the job is not always a valid ground for dismissal.
The court has only allowed termination of security guards whose duty
Held: Lawful termination. In order that an employer may dismiss an employee necessitates that they be awake and watchful at all times. While an employer
on the ground of willful disobedience, there must be concurrence of two enjoys a wide latitude of discretion in the promulgation of policies, rules and
requisites: the employees assailed conduct must have been willful or intentional, regulations, these directives must always be fair and reasonable, and the
the willfulness being characterized by a wrongful and perverse attitude; and the corresponding penalties must be commensurate to the offense involved and to the
order violated must have been reasonable, lawful, made known to the employee degree of the infraction. Here, the dismissal under the circumstances appears to
and must pertain to the duties which he had been engaged to discharge. These be too harsh a penalty.
requisites are present in this case. Driving a company car without a license and
even concealment of such fact warrants dismissal as it is a violation of the Jo v. NLRC, GR 121605, February 2, 2000
companys rules and regulations. Mejila, a barber, got into an altercation with a co-barber. He reported the
incident to the labor department, which investigated the matter and called several

Atty. Marlon Manuel
conferences for mediating the problem. Mejila did not attend the meetings but Dela Cruz v. NLRC, 268 SCRA 458
turned over his keys to the barber shop, took all his belongings and began Dela Cruz was barred from the premises of the employer/company and was
working for another barber shop. He then filed a complaint for illegal dismissal. handed a memorandum of her lay-off allegedly due to a cost-saving program.
Held: There was abandonment, not illegal dismissal. To constitute Upon her return to work, she was put under investigation for unauthorized
abandonment, there must be concurrence of the intention to abandon and some possession of company property, equipment and supply punishable by outright
overt acts from which it may be inferred that the employee concerned has no dismissal (bag). She was termiated for dishonesty. She filed a complaint for
more interest in working. There must be a clear, deliberate and unjustified illegal dismissal.
refusal to resume employment and a clear intention to sever the employer- Held: The temporary lay-off was not valid. There should be good faith. In this
employee relationship on the part of the employee. Here, such elements are case, there was none. The company said it was for cost-cutting. However, the
present. court noted that Dela Cruz was the only one laid-off. It was a sham.
In termination cases, the burden of proving just and valid cause for
Farrol v. CA, GR 133259, February 10, 2000 dismissing an employee rests upon the employer, and the latters failure to do so
Farrol, a cashier, was dismissed for having cash shortage. It was due to the results in a finding that the dismissal is unjustified. Although the alleged defense
violation of a company circular which requires daily and up-to-date preparation of dela Cruz against the accusations against her were weak, the employer must
of statistical reports and depositing of cash collections twice a day. He requested still show that the allegations are real. Akin to a criminal case, the employers
that he be reinstated, then after a while, manifested that he was willing to settle cause stands or falls on the strength of is evidence, not on the weakness of the
the case. When the company denied the request, he sued for illegal dismissal. employees defense. Here, the company was not able to show that dela Cruz had
Held: Illegal dismissal. It cannot be presumed that when there is shortage, there violated the rules and that there was dishonesty on her part.
is a corresponding breach of trust. Cash shortages in a cashiers work may An employer may terminate an employee due to loss of trust and
happen, and when there is no proof that the same was deliberately done for a confidence. However, the loss must be based not on ordinary breach by the latter
fraudulent or wrongful purpose, it cannot constitute breach of trust so as to render of the trust reposed on him, but on willful breach. A breach is willful if it is done
the dismissal from work invalid. Assuming that there was breach of trust and intentionally, knowingly and purposely, without justifiable cause, as
confidence, it was only the first infraction. Although the employer has the distinguished from an act done carelessly, thoughtlessly, heedlessly or
prerogative to discipline or dismiss its employee, such prerogative cannot be inadvertently. It must rest on substantial grounds and not on the employers
exercised wantonly, but must be controlled by substantive due process and arbitrariness, whims, caprices or suspicion, It should be genuine and not
tempered by the fundamental policy of protection to labor enshrined in the simulated. Nor should it appear as a mere afterthought to justify earlier action
constitution. Infractions committed by an employee should merit only the taken in bad faith or a subterfuge for causes which are improper, illegal or
corresponding sanctions demanded by the circumstances. The penalty must be unjustified. Here, the employee was not a managerial employee. Trust and
commensurate with the act, conduct or omission imputed to the employee and confidence only applies to such employees.
imposed in connection with the employers disciplinary authority. Here, a lighter
penalty would have been more just considering it was just his first offense. MSMG-UWP v. Ramos, GR 113907, February 28, 2000
An intra-union dispute arose out of disputes from the election of union officers.
Several officers were dismissed from the union for acts of disloyalty and inimical

Atty. Marlon Manuel
to the interest and violative of the constitution and by-laws of the union. Since Samson v. NLRC, 330 SCRA 460
the union has a closed-shop agreement in the CBA, the company terminated the Samson was dismissed from work due to utterances of obscene, insulting and
ousted union members. offensive words, referring to or directed against the companys management
Held: While a company may validly dismiss employees expelled by the union committee.
for disloyalty under the union security clause of the CBA, the dismissal should Held: Invalid dismissal. The company argued that the actuation of Samson
not be done hastily and summarily thereby eroding the employees right to due constituted gross misconduct warranting his dismissal. The court however said
process, self-organization and security of tenure. The enforcement of union- that misconduct is improper or wrong conduct. It is the transgression of some
security clauses is authorized by law provided such enforcement is not established and definite rule of action, a forbidden act, a dereliction of duty,
characterized by arbitrariness and always with due process. There must always willful in character, and implies wrongful intent and not mere error in judgment.
be a separate hearing conducted by the company before the expelled union The misconduct to be serious must be of such grave and aggravated character and
members are dismissed by the company. not merely trivial and unimportant. Such misconduct, however serious, must
nevertheless, be in connection with the employees work to constitute just cause
Deles v. NLRC, 327 SCRA 540, G.R. 121348 for his separation.
Deles was the shift supervisor of employer FPIC, and was tasked to oversee the In this case, the alleged misconduct of Samson, when viewed in its
entire pipeline operation in the employers terminal. One day, the quality of fuel context, is not of such serious and grave character as to warrant his dismissal.
delivered to FCPIs pipelines suffered severe downgrading of quality. Deles was The utterances were made during an informal Christmas gathering of the
placed under preventive suspension. It was found that the mishap occurred due companys district sales managers. There was probably a little bit of drinking
to the fact that his subordinate failed to correctly execute his orders, and he was going on. Employees should be allowed wider latitude to freely express their
found to have tampered with the pipeline equipment as well. He was dismissed sentiments during these kinds of occasions.
for loss of confidence.
The outbursts were not pointed to any senior employees and were not
Held: Valid dismissal. The ground of loss of trust and confidence applies because intended to malign any person from the management. It was just a reaction on a
Deles holds a position of trust and confidence. certain case involving the company. The court did not consider it a case were
The delicate nature of the business shows that the company has to utter lack of respect for superiors was patent.
exercise extraordinary diligence in conducting its operations. In this light, Deles
is tasked to perform kay functions and is bound by exacting work ethic. His Phil. Aeolus v. NLRC, April 28, 2000
position requires the full trust and confidence of his employer in every exercise Rosalinda Cortez was the company nurse. She was dismissed for serious
of managerial discretion He tampered with very sensitive equipment which misconduct and gross and habitual negligence, due to the following infractions
exposed the complex and adjacent communities to the danger of a major disaster she committed:
that could be caused by tank explosions and conflagration. Throwing a stapler and hurling invectives at the plant supervisor
For losing some P1,500 entrusted by the plant supervisor to her, to be
given to the CLMC Department
For asking a co-employee to punch her time card

Atty. Marlon Manuel
For failing to process the ATM applications of 9 co-employees relationship. The second element is the more determinative factor, being
Held: Illegal dismissal. manifested by overt acts.
Misconduct complained of must be: Here, Turing cannot be said to have abandoned his work. No proof of
overt acts showing clearly his intention to abandon his work. Upon learning he
Serious had been dismissed, he filed an illegal dismissal case. The court has ruled in so
In relation to the performance of her duties many cases that a timely filing of an illegal dismissal case negates abandonment
Showing the employee unfit to continue working for the employer. of work.
The acts committed against the plant supervisor were not in relation to Icawat v. NLRC, GR 133573, June 20, 2000
her duties as a nurse, and were done because of the sexual advances made by the Yape, a driver, lost his drivers license. He sought his employers permission to
horny asshole supervisor. go on leave to secure a new one. When he got his new license, he reported for
The punching of the time card was done in good faith because at that work but was informed that a new driver had already taken his place. He filed a
time she was made to do an errand, and was immediately corrected when became case for illegal dismissal.
known. Thus the company did not suffer. It was her first infraction during the Held: Illegal dismissal. To constitute abandonment, two elements must concur :
five-year service in the company. (1) the failure to report for work or absence without valid or justifiable reason,
The money was not lost as she remitted it to the company personnel-in- and (2) a clear intention to sever the employer-employee relationship, with the
charge as evidence by a receipt. second element as the more determinative factor and being manifested by some
The failure to open an ATM account was not part of her duties and so overt acts. Mere absence is not sufficient. To prove abandonment, the employer
does not support the allegation of gross and habitual negligence. must show that the employee deliberately and unjustifiably refused to resume his
employment without any intention of returning. Here, no such intention was
Metro Transit v. NLRC, 307 SCRA 747 manifested. After getting his license, he immediately reported for work. Plus,
Turing was dismissed for abandonment of work. He was always absent without upon learning of his dismissal, he filed a case for illegal dismissal. A charge of
leave allegedly because of domestic problems (iniwan ng asawa). He questioned abandonment is totally inconsistent with the immediate filing of a complaint for
the dismissal. illegal dismissal.
Held: Illegal dismissal. For abandonment of work to be a just and valid cause
Leonardo v. NLRC, 333 SCRA 589
for dismissal, there must be a deliberate and unjustified refusal on the part of an
Fuerte, allegedly not meeting his sales quota, was transferred to another company
employee to resume his employment. The burden of proof is on the employer to
plant which resulted in the withdrawal of his supervisors allowance. He
show an unequivocal intent on the part of the employee to discontinue
protested his transfer and subsequently filed a case for illegal termination.
employment. To warrant a finding of abandonment, there must be evidence not
only of the failure of an employee to report for work or his absence without valid Held: Illegal dismissal. Fuertes act of staying off work are not indicative of
or justifiable reason, but also of his intention to sever the employer-employee abandonment. To constitute such a ground for dismissal there must be (1) failure
to report to work or absence without valid or justifiable reason; and (2) a clear
intention, as manifested by some overt acts, to sever the employer-employee

Atty. Marlon Manuel
relationship. Again, the filing of a complaint for illegal dismissal is inconsistent financial losses which in fact has compelled the company to resort to
with a charge of abandonment. retrenchment.
Redundancy in an employers personnel force DOES NOT necessarily or
OSS Security v. NLRC, 325 SCRA 157 even ordinarily refers to duplication of work. That no other person was holding
Legaspi, a lady guard, was transferred by her employer due to a complaint filed the same position that an employee held prior to the termination of his services,
by the building administrator of the last place she was assigned to. Upon her does NOT show that his position had not become redundant. (in a well organized
transfer, she did not report for duty at her new assignment. She then filed a corp. hardly would there be any duplication of work/ 2 persons doing the same
complaint for constructive dismissal. work)
Held: No illegal dismissal. The transfer of an employee ordinarily lies with Redundancy , for the purposes of the Labor Code, exists where the
within the ambit of management prerogatives. However, a transfer amounts to services of an employee are in excess of what is reasonably demanded by the
constructive dismissal when the transfer is unreasonable, inconvenient, or actual requirements of the enterprise. A position is redundant where it is
prejudicial to the employee, and it involves demotion in rank or diminution of superfluous, and superfluity of a position(s) may be the outcome of a number of
salaries, benefits and other privileges. Here, there is no record that the transfer factors like over-hiring of workers, decreased volume of business, or dropping of
was anything but done in good faith, without grave abuse of discretion, and in the a particular product line or service activity previously manufactured or
best interest of the business enterprise. There was no constructive dismissal. undertaken by the enterprise.
Lopez Sugar v. FFW, 189 SCRA 179

B. AUTHORIZED CAUSES Lopez Sugar filed an application to retrench (27) and retire (56) some of its
employees to prevent losses due to major economic problems. It is doing so in
Wiltshire File Co. v. NLRC, 193 SCRA 665 exercise of its privilege under its CBA.
A Sales Manager after returning from a (business and pleasure) trip abroad was
terminated by Wiltshire Co. He tried to get an explanation but he was left with Union contests the application saying that it is violative of security of
letter merely handed to him by the Security Guard. The letter justifies his tenure of its members and that to justify retrenchment, there should be serious
dismissal on the ground of redundancy. business reverses it must be actual, real and amply supported by sufficient and
convincing evidence.
The Sales Manager in his complaint before the L.A. for illegal dismissal
alleges that his position cannot be redundant because nobody in the company was Court has enumerated four standard of justification of retrenchment:
then performing the same duties. The Co. in its answer invokes that termination 1. The losses expected should be substantial and not merely de minimis in
was a cost cutting measure as company had experienced unusually low volume of extent.
orders and that it was forced to rotate employees in order to save the company 2. The substantial loss apprehended must be reasonable imminent, and such
because of its continued experience of financial losses. imminence can be perceived objectively and in good faith by the employer.
After review of records (audited financial losses), court found that co 3. Because the consequential nature of retrenchment, it must, be reasonably
was indeed suffering from serious financial losses. While letter of termination necessary and likely to effectively prevent the expected losses. The
used the word redundant, the letter also referred to the company having incurred

Atty. Marlon Manuel
employer should have taken other measures prior or parallel to retrenchment employee relationship. In this case, employees reported for work after the factory
to forestall losses. (i.e., cut other costs than labor costs) was burned, but the company informed them to wait for the resumption of
4. The alleged losses if already realized, and the expected imminent looses operations.
sought to be forestalled, must be proven by sufficient and convincing The companys contention that while the strike was in progress, the
evidence. factory building was razed by fire, was not sustained by the SC because such
Whether an employer would imminently suffer serious or substantial alleged serious business losses sustained by company form the fire were not
losses for economic reasons is essentially a question of fact for the L.A. and substantiated by competent evidence. Financial statements audited by
NLRC to determine. In this case, no audited financial statements were showing independent external auditors constitute the normal method of proof of the profit
financial condition of petitioner corporation were presented. Company made a and loss performance of a company.
passing reference to cast reduction measures it had allegedly undertaken. It Although the fire caused losses to company, it failed to show how such
failed to specify the cost reduction measures actually undertaken in goodfaith. It fire so affected the companys financial health that it had to close shop. To
asked some 110 casual workers to register after reducing its workforce. exempt an employer from the payment of separation pay, he or she must
establish by sufficient and convincing evidence that the losses were serious,
Del Mar Domestice Ent. v. NLRC, 282 SCRA 602 substantial and actual.
Complainants were dismissed by the Company during the strike for alleged
abandonment of work. The complainants protets that they were only verbally Sebuguero v. NLRC, 248 SCRA 532
informed that their services were no longer needed and that they were considered 38 regular employees of GTI Sportswear were given temporary lay-off notices
dismissed from work. They now seek moral and exemplary damamges. due to aleged lack of work and havy losses cause by the cancellation of orders
Company invokes that the strike was in gross violation of CBA from abroad and by the garments embargo of 1990.
provision. It also claimed that during the height of the strike, a fire of SC: Article 283 of the Labor Code which covers retrenchment speaks of
undtermined origin razed to the ground about 70% of the companys premises permanent retrenchment as opposed to temporary lay-off as in this case. There is
rendering the factory useless and inoperable. no specific provision of law which treats of a temporary retrenchment or lay-off
The Labor Arbiter and NLRC ruled that the employees are entitled to and provides for the requisites in effecting it or a period or duration therefor
separation pay. Company claims that employees are not entitled to separation pay To remedy this situation, Art. 286 may be applied but only by analogy to
because the abandoned their work. set a specific period that employees may remain temporarily laid-off or in
SC: Ees entitled to Separation Pay because (1) No abandonment - Ees floating status. Six months is the period set by law that the operation of a
have no intent to sever employement and (2) Serious Business Losses Not proven business or undertaking may be suspended thereby suspending the employment
by company. of the employees concerned.
Abandonment as a valid cause for termination requires a deliberate, The temporary lay-off wherein the employees likewise cease to work
unjustified refusal of the employee to resume his employment. Failure to report should also not last longer than 6 months. After six months, the employees
for work or absence without valid or justifiable reason does not constitute should either be recalled to work or permanently retrench following the
abandonment if not coupled with a clear intention to sever the employer-

Atty. Marlon Manuel
requirements of the law, and that failing to comply with this could be tantamount more than the number needed for the operation of the business. Retrenchment is,
to dismissing the employees. in many ways, a measure of last resort when other less drastic means have been
Under Art 283 of the Labor Code, there are 3 basic requirements for a tried and found to be inadequate.
valid retrenchment: Retrenchment, in contrast to redundancy, is an economic ground to
1. Retrenchment is necessary to prevent losses and such losses are proven. reduce the number of employees. In order to be justified, the termination of
employment by reason of retrenchment must be due to business losses or reverses
2. Written notice to the employees and to the DOLE at least one month prior to which are serious, actual and real. Not every loss incurred or expected to be
the intended date of retrenchment; incurred by the employer will justify retrenchment, since, in the nature of things,
3. Payment of separation pay equivalent to one month pay or at least month the possibility of incurring losses is constantly present, in greater or lesser
pay for every year of service. Whichever is higher. degree, in carrying on the business operations. Retrenchment is normally
Lack of written notice to employees and to DOLE does not make resorted by management during periods of business reverses and economic
retrenchment illegal such that they are entitled to the payment of backwages and difficulties occasioned by such events as recession, industrial depression, or
separation pay in lieu of reinstatement as they contend. It merely makes seasonal fluctuations.
retrenchment defective.
Somerville Stainless Steel Corp. v. NLRC, 287 SCRA 420
Illegal retrenchment is when it is not proven that theres imminent and The law recognizes the companys right to retrench employees when made
actual serious losses or substantial losses this entitles employees to necessary or compelled by economic factors that would otherwise endanger its
reinstatement and backwages. stability or existence. Retrenchment is only a measure of last resort when other
less drastic means have been tried and found to be inadequate.
Edge Apparel v. NLRC, 286 SCRA 302
Article 284 provides that an employer would be authorized to terminate the Anino vs. NLRC, 290 SCRA 489
services of an employee found to be suffering from any disease if the employees Retrenchment is resorted to by an employer because of losses in the operation of
continued employment is prohibited by law or is prjudicial to his health or tho the business occasioned by lack of work and considerable reduction in the volume of
health of his fellow employees. business. It is a management prerogative consistently recognized and affirmed
The installation of labor-saving devices contemplates the installation of by this Court, subject only to faithful compliance with the substantive and
machinery to effect economy ad efficiency in the its method of production. procedural requirements laid down by law and jurisprudence.
Redundancy exists where the services of an employee are in excess of To justify retrenchment, the following requisites must be complied with:
what whould reasonably be demanded by the actual requirements of the (a) the losses expected should be substantial and not merely de minimis in
enterprise. A position is redundant when it is superfluous, and superfluity of a extent; (b) the substantial losses apprehended must be reasonably imminent; (c)
position or positions chould be the result of a number of factors, such as the the retrenchment must be reasonably necessary and likely to effectively prevent
overhiring of workers, a decrease in the volume of business or the dropping of a the expected losses; and (d) the alleged losses, if already incurred, and the
particular line or service previoulsy manyfactured or undertaken by the expected imminent losses sought to be forestalled must be proved by sufficient
enterprise. An employer has no legal obligation to keep on the payroll employees and convincing evidence.

Atty. Marlon Manuel
In a nutshell, the law recognizes a companys right to retrench bonuses and salaries, going on reduced time, improving manufacturing
employees when made necessary or compelled by economic factors that would efficiencies, trimming of marketing and advertising costs---have been tried and
otherwise endanger its stability or existence.[R]etrenchment is only a found wanting. Lastly, but certainly not the least important, alleged losses if
measure of last resort when other less drastic means have been tried and found to already realized, and the expected imminent losses sought to be forestalled, must
be inadequate. be proved by sufficient and convincing evidence.
Retrenchment must be implemented in a just and proper manner. As held
Philippine Tuberculosis Society, Inc. V. National Labor Union, 294 SCRA 567 in Asiaworld Publishing House, Inc. v. Ople: there must be fair and reasonable
[Retrenchment is] an act of the employer of dismissing employees because of criteria to be used in selecting employees to be dismissed, such as: (a) less
losses in the operation of a business, lack of work, and considerable reduction in preferred status; (b) efficiency rating (c) seniority.
the volume of his business, a right consistently recognized and affirmed by this
Court. Phil. Tobacco Flue-Curing and Redrying Corp. vs. NLRC, Dec. 10, 1998
However, the employers prerogative to layoff employees is subject to Art. 283 of the Labor Code also requires the employer to furnish both the
certain limitations set forth in Lopez Sugar Corporation v. Federation of Free employee and DOLE a written Notice of Closure at least one month prior to
Workers as follows: Firstly, the losses expected should be substantial and not closure. True, in the present case the Notices of Termination were given to the
merely de minimis in extent. Itf the loss purportedly sought to be forestalled by employees on August 3, 1994, and the intended date of closure was September
retrenchment is clearly shown to be insubstantial and inconsequential in 15, 1994. However, the employees were in fact not allowed to work after August
character, the bonafide nature of the retrenchment would appear to be seriously in 3, 1994. Therefore, the termination notices to the employees were given in
question. Secondly, the substantial loss apprehended must be reasonably violation of the requisite one-month prior notice under Art. 283 of the Labor
imminent, as such imminence can be perceived objectively and in good faith by Code.
the employer. There should, in other words, be a certain degree of urgency for the
retrenchment, which is after all a drastic recourse with serious consequences for This Court has previously ruled in Manila Hotel Company v. CIR that
the livelihood of the employees retired or otherwise laid off. Because of the seasonal workers who are called to work from time to time and are temporarily
consequential nature of retrenchment, it must, thirdly, be reasonably necessary laid off during off-season are not separated form service in said period, but are
and likely to effectively prevent the expected losses. The employer should have merely considered on leave until re-employed, viz.: The nature of their
taken other measures prior or parallel to retrenchment to forestall losses, i.e., cut relationshipx x x is such that during off season they are re-employed, or when
other costs than labor costs. An employer who, for instance, lays off substantial their services may be needed. They are not strictly speaking separated from the
numbers of workers while continuing to dispense fat executive bonuses and service but are merely considered as on leave of absence without pay until they
perquisites or so-called golden parachutes can scarcely claim to be retrenching are re-employed.
in good faith to avoid losses.
Valdez vs. NLRC, 286 SCRA 87
To impart the constitutional meaning to the constitutional policy of Under Art. 286 of the Labor Code, the bona fide suspension of the operation of a
providing full protection to labor, the employers prerogative to bring down business or undertaking for a period not exceeding 6 months shall not terminate
labor costs by retrenching must be exercised essentially as measure of last resort, employment. Consequently, when the bona fide suspension of the operation of a
after less drastic means---e.g., reduction of both management and rank and file business or undertaking exceeds 6 months, then the employment of the employee

Atty. Marlon Manuel
shall be terminated. By the same token and applying said rule by analogy, if the A floating status requires dire exigency of the employers bona fide
employee was forced to remain without work or assignment for a period suspension of operation, business or undertaking. In security services, this
exceeding 6 months, then he is in effect constructively dismissed. happens when the clients that do not renew their contracts with a security agency
The so-called floating status of an employee should last only for a are more than those that do and the new ones that the agency gets.
legally prescribed period of time. When that floating status of an employee
lasts for more than 6 months, he may be considered to have been illegally Asian Alcohol Corp vs. NLRC, 305 SCRA 416
dismissed from service. Thus, he is entitled to the corresponding benefits for his The condition of business losses is normally shown by audited financial
separation, and this would apply to the two types of work suspension heretofore documents like yearly balance sheets and profit and loss statements as well as
noted, that is, either of the entire business or of specific component thereof. annual income tax returns. It is our ruling that financial statements must be
prepared and signed by independent auditorsIt is necessary that the employer
Resignation is inconsistent with the filing of a complaint of illegal also show that its losses increased through a period of time and that the condition
dismissal. of the company is not likely to improve in the near future.
Resignation is defined as the voluntary act of an employee who finds himself in a
situation where he believes that personal reasons cannot be sacrificed in favor of Redundancy exists when the service capability of the work force is in
the exigency of the service, and, that he has no other choice but to disassociate excess of what is reasonably needed to meet the demands on the enterprise. A
himself from his employment. Resignation is a formal pronouncement of redundant position is one rendered superfluous by any number of factors, such as
relinquishment of an office. It must be made with the intention of relinquishment overhiring of workers, decreased volume of business, dropping of particular
the office accompanied by an act of relinquishment. product line previously manufactured by the company or phasing out of a service
activity priorly undertaken by the business. Under these conditions, the employer
Sentinel Security Agency, Inc. vs. NLRC, 295 SCRA 123 has no legal obligation to keep in its payroll more employees than are necessary
Being sidelined temporarily is a standard stipulation in employment contracts, as for the operation of its business.
the availability of assignment for security guards is primarily dependent on the Requisites for the implementation of a redundancy program:
contracts entered into by the agency with third parties. Most contracts for 1. Written notice served on both the employees and the DOLE at least one
security services, as in this case, stipulate that the client may request the month prior to the intended date of retrenchment;
replacement of the guards assigned to it. In security agency parlance, being
placed off detail or on floating status means waited to be posted. This 2. Payment of separation pay equivalent to at least one month pay or at
circumstance is not equivalent to dismissal, so long as such status does not least month pay for every year of service, whichever is higher;
continue beyond a reasonable time. 3. Good faith in abolishing the redundant positions; and
Abandonment, as a just and valid cause for termination, requires a 4. Fair and reasonable criteria in ascertaining what positions are to be
deliberate and unjustified refusal of an employee to resume his work, coupled declared redundant and accordingly abolished
with a clear absence of any intention of returning to his or her work.
Abandonment has recently been ruled to be incompatible with constructive Chniver Deco vs. NLRC, GR 122876, February 17, 2000
dismissal. The company relocated from Makati to Batangas, in view of the expiration of its
lease of the land in Makati. It was informed by the employees that they did not

Atty. Marlon Manuel
want to work in Batangas. The company told them to report at the new site within C. CONSEQUENCES OF DISMISSAL
seven days lest they be considered to have lost interest in their work, and will be
replaced. Employees filed for illegal dismissal. Labor arbiter and NLRC found Capili v NLRC, 270 SCRA 488
that dismissal was not illegal, but awarded separation pay, which the company Facts: Upon assumption of ownership and operation of public utility jeepneys,
contests. The company says that the employees should be deemed to have Capili required the drivers to sign individual contracts of lease of the jeeps to
voluntarily resigned from their jobs, and the transfer of business is not formalize their lessor-lessee relationship. However, having gathered the
tantamount to closure nor retrenchment. impression that the signing of the contract of lease was a condition precedent
Held: Separation pay awarded. The transfer of business amounts to a cessation of before they could continue driving for Capili, all the drivers stopped plying their
the business in Makati. Art. 283 of the Labor Code pertains to both complete assigned routes. Thereafter, they filed a complaint for illegal dismissal and
cessation of all business operations and the cessation of only a part of the prayed for the grant of separation pay.
companys business. This exercise of management prerogative to transfer is due Held: The drivers are not entitled to separation pay. The legal basis for the
to a reason beyond the companys control, but still it must pay to afford the award of separation pay is clearly provided by Art. 279 of the Labor Code which
employees some relief. states that the remedy for illegal dismissal is reinstatement without loss of
seniority rights plus backwages. However, there may be instances where
NFL V. NLRC, 327 SCRA 158 reinstatement is not a viable remedy as where the relations between employer and
Petitioners are employees of Patalon Coconut Estate (PCE)in Zamboanga City. employee have been so severely strained that it is no longer advisable to order
Due to the passage of the Comprehensive Agrarian Reform Law, the PCE was reinstatement or where the employee decides not to be reinstated. In such events,
awarded to PEARA, a cooperative accredited by the Dept. of Agraraian Reform, the employer will instead be ordered to pay separation pay. But the award of
and of which the petitioners are members and co-owners. As a result, the separation pay cannot be justified solely because of the existence of strained
employers shut down the operation of PCE but did not award any separation pay. relations between the employer and the employee. It must be given to the
Held: Petitioners NOT entitled to separation pay. The closure envisaged by Art. employee only as an alternative to reinstatement emanating from illegal
283 of the Labor Code is one pursuant to a unilateral and voluntary act of the dismissal. When there is no illegal dismissal, even if the relations are strained,
employer. Art. 283 does not contemplate a situation where the closure of the separation pay has no legal basis. In the case at bar, there was no dismissal at all.
business is forced upon the employer and ultimately for the benefit of the
employees. Bustamante v NLRC, 265 SCRA 61
Facts: In this case, the company is questioning the decision of the Court granting
Hence, no separation pay is awarded where the closure was due to the act backwages to its illegally dismissed employees computed from the time of their
of the government, a compulsory acquisition for purposes of agrarian reform, illegal dismissal up to the date of their reinstatement. The company is insisting
where the petitioners themselves are made the agrarian lot beneficiaries. that salary earned elsewhere by the employees should be deducted from the
award of backwages.
Held: The SC held that backwages to be awarded to an illegally dismissed
employee should not as a general rule, be diminished or reduced by the earnings
derived by him elsewhere during the period of his illegal dismissal. The

Atty. Marlon Manuel
underlying reason for this ruling is that the employee, while litigating the Held: The Supreme Court held that the dismissal is still illegal despite the fact
legality/illegality of his dismissal, must still earn a living to support himself and that it is based on an authorized cause. This is because of the employers failure
his family while full backwages have to be paid by the employer as part of the to observe the requirement of due process in effecting the dismissal. However,
price or penalty he has to pay for illegally dismissing his employee. The clear the Supreme Court held that the employee is still not entitled to reinstatement
legislative intent of the amendment in RA 6715 is to give more benefits to because of the presence of the authorized cause. But the Court awarded full
workers than was previously given them under the Mercury Drug rule or the backwages from the time of dismissal up to the finality of the decision plus
deduction of earnings elsewhere rule. A closer adherence to the legislative separation pay.
policy behind RA 6715 points to full backwages as meaning exactly that, i.e.,
without deducting from backwages the earnings derived elsewhere by the Reahs Corp. v NLRC, 271 SCRA 247
concerned employee during the period of his illegal dismissal. Thus, petitioners Facts: Reahs Corporation closed its business allegedly due to poor business. Its
are entitled to their full backwages, inclusive of allowances and other benefits or employees filed a case for illegal dismissal and demanded for separation pay. The
their monetary equivalent, from the time their actual compensation was withheld Labor Arbiter dismissed the case for illegal dismissal but upheld the claims for
from them up to the time of their actual reinstatement. separation pay. Reahs Corporation is contending that Art. 283 exempts
establishments from payment of separation pay when the closure of the business
Wenphil Corp. v NLRC, 170 SCRA 69 is due to serious business losses or financial reverses.
Facts: Mallare was dismissed after having an altercation with a co-employee. Held: The dismissed employees are entitled to separation pay. The grant of
The petitioner company failed to give Malare the benefit of a hearing before he separation pay, as an incidence of termination of employment under Art. 283, is a
was dismissed. statutory obligation on the part of the employer and a demandable right on the
Held: The Supreme Court held that although the dismissal of Mallare is part of the employee, except only where the closure or cessation of operations
warranted as it was based on a just cause provided by the labor code, such was due to serious business losses or financial reverses and there is sufficient
dismissal is still considered as illegal because of the failure of the petitioner proof of this fact or condition. In the absence of such proof of serous business
company to observe due process in effecting such dismissal. However, the losses or financial reverses, the employer closing his business is obligated to pay
employee should not be reinstated because of non-compliance with the his employees and workers their separation pay. In the case at bar, the
procedural requirements. The employer cannot be forced to retain the services of corporations alleged serious business losses and financial reverses were not
an employee who has committed a just cause for dismissal. But there must be a amply shown or proved.
penalty for violation of the right to procedural due process. The Supreme Court
awarded damages in the amount of P1,000 in this case. Asionics Phils. v NLRC, 290 SCRA 164
Facts: Asionics Phils. implemented a company-wide retrenchment affecting 105
Serrano v NLRC, GR 117040, January 27, 2000 & May 4, 2000 employees from a workforce that totaled 304. Among the employees who were
Facts: The employee in this case was dismissed for an authorized cause. dismissed were Boaquina and Gayola. They joined Lakas Union which staged a
However, the requirement of due process was not observed by the employer in strike against Asionics Phils. The Labor Arbiter declared the strike illegal, but
effecting the dismissal. declared that the separation pay of the striking members as valid under the
company-wide retrenchment program. The company is contending that the

Atty. Marlon Manuel
striking employees should not be entitled to separation pay because of their he was separated from work up to his actual reinstatement. The purpose of the
involvement in the strike which was declared illegal. reinstatement is to restore the employee to the state or condition from which he
Held: The employees are entitled to separation pay. The termination of has been removed or separated. Backwages aim to replenish the income that was
employment of the striking employees was due to the retrenchment policy lost by reason of the unlawful dismissal. In the case at bar, records show that
adopted by the company and not because of their union activities. It should private respondent was not illegally dismissed while working in the Middle East
suffice to say that the retrenchment of the employees has, in fact, preceded the project of the petitioner. His overseas assignment was a specific project and for a
declaration of strike. definite period. Thus, when private respondent prayed for reinstatement, he
meant reinstatement to his position as a regular member of petitioners work
The Court also held that Frank Yih, the President and majority pool. If private respondent were given local assignments after his stint abroad, he
stockholder of the company cannot be held personally liable as nothing on record would have received the local wage. This is the loss which backwages aim to
is shown that he has acted in bad faith or with malice in carrying out the restore.
retrenchment program of the company.
Dela Cruz v NLRC, Nov. 20, 1998
PNCC v NLRC, 286 SCRA 329 Facts: The petitioner in this case is questioning the decision of the Labor Arbiter
Facts: The private respondent in this case is a carpenter who is part of a regular and NLRC refusing the award of backwages to the latter despite a finding of
work pool of the petitioner company. Sometime in 1979, private respondent illegal dismissal.
worked in petitioners project in the Middle East, with a salary of $2.20 per hour.
Upon completion of the project in 1984, private respondent returned to the Held: The Labor Arbiter and the NLRC committed grave abuse of discretion in
Philippines. Petitioner then failed to give him work in its local projects. refusing to award backwages to petitioner simply because the latter did not ask
Thereafter, private respondent sued for illegal dismissal. NLRC ordered the for such relief in his complaint. The award of backwages resulting from the
reinstatement of private respondent to his former position and the payment of his illegal dismissal of an employee is a substantive right. Failure to claim
backwages for 3 years. This order was affirmed by the SC which ordered the case backwages in a complaint for illegal dismissal has been held to be a mere
to be remanded to the Labor Arbiter for the computation of backwages. Petitioner procedural lapse which cannot defeat a right granted under substantive law.
is now questioning the basis of the computation of the backwages (in computing
the backwages, NLRC used private respondents salary rate in the Middle East). Quijano v Mercury Drug Corp, 292 SCRA 109
It claimed that private respondents backwages should not be based on his salary Facts: Quijano was a warehouseman of Mercury Drug. He has been working for
abroad since his overseas employment contract was for a definite term and that the company for 8 yrs. Records show that his working performance was good
the project covered by the said contract had been completed in 1984. It submitted during this entire period. Sometime in 1990, he exposed the existence of a five-
its own computation of private respondents backwages based on the latters local six loan system in their workplace operated by some of its officers. He then
wage rate at the time of his transfer to the overseas project. incurred the ire of Altavano, the companys manager, who operated usurious
transactions. Quijano was charged with violations of company policies.
Held: The basis of computation of private respondents backwages should have Thereafter, he was terminated. He filed an illegal dismissal case against the
been the local wage rate at the time of his transfer to the overseas project and not company. The Labor Arbiter ruled that Quijano was indeed illegally dismissed
his overseas rate. An illegally dismissed employee is usually reinstated to his and ordered the latters reinstatement. On appeal, the NLRC affirmed the finding
former position without loss of seniority rights and paid backwages from the time

Atty. Marlon Manuel
of illegal dismissal, but ordered that Quijano be given separation pay in lieu of started working, including authorized absences and paid regular holidays unless
reinstatement. Quijano is now questioning the decision of the NLRC with regard the working days in the establishment as a matter of practice or policy, or that
to the order of payment of separation pay in lieu of reinstatement. provided in the employment contracts, is less than 12 months, in which case said
Held: Quijano should be reinstated. Well-entrenched is the rule that an illegally period shall be considered as one year. It is commutable to its money equivalent
dismissed employee is entitled to reinstatement as a matter of right. Case law, if not used or exhausted at the end of the year. Thus, to limit the award to three
however, developed that where reinstatement is not feasible, expedient or years is to unduly restrict such right. Since a service incentive leave is clearly
practical, as where reinstatement would only exacerbate the tension and strained demandable after one year of service or its equivalent period, and it is one of the
relations between the parties, or where the relationship between the employer and benefits which would have accrued if an employee was not otherwise illegally
employee has been unduly strained by reason of their irreconcilable differences, dismissed, it is fair and legal that its computation should be from the date of
it would be more prudent to order payment of separation pay instead of illegal dismissal up to the date of reinstatement.
reinstatement. The doctrine of strained relations, however, should be strictly
applied so as not to deprive an illegally dismissed employee of his right of Equitable v NLRC, 273 SCRA 352
reinstatement. In the case at bar, the companys charges of misbehavior against Facts: Atty. Sadac was appointed vice-president for the legal department of the
Quijano cannot serve as basis to justify the latters dismissal, let alone his non- petitioner bank. He was also designated as the banks general counsel. Sometime
reinstatement. The antagonism was caused substantially, if not solely, by the later, nine of the lawyers of the banks legal department addressed a letter to the
misdeeds of the companys superiors. The Arbiter found that the charges against chairman of the board of directors of the bank accusing Atty. Sadac of abusive
Quijano were false and were merely filed by his superiors against him to punish conduct, inefficiency, mismanagement and indecisiveness. The charge was
him for exposing their usurious loan operations. Hence, to deny Quijano investigated and on the basis of the findings, a memo was sent to Atty. Sadac
reinstatement due to the strained relations with his accusers whose charges asking him to voluntarily resign. He asked for a full hearing but was not granted.
were found to be false would result in rewarding the accusers and penalizing Thus, he filed a complaint against the bank for illegal dismissal and damages.
Quijano. Held: There was illegal dismissal in this case. The dismissal was without just
cause and there was no notice and hearing. However, the Supreme Court held
Fernandez v NLRC, 289 SCRA 433 that Atty. Sadac is not entitled to moral and exemplary damages. Moral damages
Facts: In his decision, the labor arbiter granted varying amounts of service are recoverable when the dismissal of an employee is attended by bad faith or
incentive leave pay to the petitioners based on the length of their tenure (the fraud or constitutes an act oppressive to labor, or is done in a manner contrary to
shortest was six years and the longest was thirty-three years). The solicitor good morals, good customs or public policy. Exemplary damages may be
general recommended that the award of service incentive leave be limited to awarded if the dismissal is effected in a wanton, oppressive or malevolent
three years. manner. In this case, the Court is of the considered view that petitioners have not
Held: The award of service incentive leave should not be limited to three years. motivated by malice or bad faith nor have they acted in wanton, oppressive or
The clear policy of the Labor Code is to grant service incentive leave pay to malevolent manner such as to warrant a judgment against them for moral and
workers in all establishments, subject to a few exceptions. Service incentive exemplary damages. Malice or bad faith implies a conscious and intentional
leave is a right which accrues to every employee who has served within 12 design to do a wrongful act for a dishonest purpose or moral obliquity; it is
months, whether continuous or broken reckoned from the date the employee different from the negative idea of negligence in that malice or bad faith

Atty. Marlon Manuel
contemplates a state of mind affirmatively operating with furtive design or ill Phil. Aeolus v NLRC, 331 SCRA 237
will. Facts: Cortez filed a case of illegal dismissal against the petitioner company. In
her complaint, she also prayed for damages in the event that the illegality of her
Millares v NLRC, 305 SCRA 500 dismissal is sustained.
Facts: In this case, petitioners were retrenched to prevent losses. They are now Held: The Supreme Court held that Cortez was indeed illegally dismissed and
contending the decision of the NLRC holding that the Staff/Managers that she is entitled to moral and exemplary damages. Anxiety was gradual in
transportation and Bislig allowances did not form part of the salary base used in Cortezs five-year employment. It began when her plant manager showed an
computing the separation pay of petitioners. obvious partiality for her which went out of hand when he started to make it clear
Held: The Supreme Court held that the decision of the NLRC is correct. that he would terminate her services if she would not give in to his sexual
Separation pay when awarded to an illegally dismissed employee in lieu of advances. Sexual harassment is an imposition of misplaced superiority which
reinstatement or to a retrenched employee should be computed based not only on is enough to dampen an employees spirit in her capacity for advancement. It
the basic salary but also on the regular allowances that the employee had been affects her sense of judgment; it changes her life. If for this alone Cortez should
receiving. The Supreme Court, however, held that the disputed allowances were be adequately compensated. Thus, for the anxiety, the seen and unseen hurt that
not regularly received by the petitioners in this case. The receipt of an allowance she suffered, petitioners should also be made to pay her moral damages, plus
on a monthly basis does not ipso facto characterize it as regular and forming part exemplary damages, for the oppressive manner with which petitioners effected
of salary because the nature of the grant is a factor worth considering. The her dismissal from the service, and to serve as a forewarning to lecherous officers
Supreme Court agree with the observation of the Office of the Solicitor General and employers who take undue advantage of their ascendancy over their
that the subject allowances were temporarily, not regularly, received by employees.
petitioners because:
1. In the case of the housing allowance, once a vacancy occurs in the company- PNCC v NLRC, 307 SCRA 218
provided housing accommodations, the employee concerned transfers to the Facts: Private respondents in this case were dismissed for serious misconduct.
company premises and his housing allowance is discontinued He is now contending that he is entitled to separation pay and mid-year bonus.
2. The transportation allowance is in the form of advances for actual Held: The Supreme Court held that they are not entitled to separation pay and
transportation expenses subject to liquidation and given only to employees mid-year bonus. An employee who is dismissed for just cause is generally not
who have personal cars entitled to separation pay. In some cases, however, the Court awards separation
pay to a legally dismissed employee on the grounds of equity and social justice.
3. The Bislig allowance is given to Division Managers and corporate officers This is not allowed, though, when the employee has been dismissed for serious
assigned in Bislig, Surigao del Norte. Once the officer is transferred outside misconduct or some other cause reflecting on his moral character. Likewise,
Bislig, the allowance stops private respondents are not entitled to the mid-year bonus they are claiming. The
Thus, the petitioners continuous enjoyment of the disputed allowances Supreme Court does not agree with the Solicitor Generals contention that private
was based on contingencies the occurrence of which wrote finis to such respondents have already earned their mid-year bonus at the time of their
enjoyment. dismissal. A bonus is a gift from the employer and the grant thereof is a

Atty. Marlon Manuel
management prerogative. Petitioner may not be compelled to award a bonus to reinstatement) equivalent to at least one month pay, or one moth pay for every
private respondents whom it found guilty of serious misconduct. year of service, whichever is higher. It must be stressed that the separation pay
being awarded tot he Lubat group is due to illegal dismissal; hence, it is different
Philippine Tobacco Flue-Curing v NLRC, 300 SCRA 37 from the amount of separation pay provided for in Article 283 in case of
Facts: There are two groups of employees in this case, namely, the Lubat group retrenchment to prevent losses or in case of closure or cessation of the
and the Luris group. The Lubat group is composed of petitioners seasonal employers business, in either of which the separation pay is equivalent to at least
employees who were not rehired for the 1994 tobacco season. At the start of that one (1) month or one-half (1/2) month pay for every year of service, whichever is
season, they were merely informed that their employment had been terminated at higher. With regard to the claim of the Luris group, the Supreme Court held that
the end of the 1993 season. They claimed that petitioners refusal to allow them the amount of separation pay which seasonal workers should receive is one-half
to report for work without mention of any just or authorized cause constituted (1/2) their respective average monthly pay during the last season they worked
illegal dismissal. In their Complaint, they prayed for separation pay, backwages, multiplied by the number of years they actually rendered service, provided that
attorneys fees and moral damages. On the other hand, the Luris group is made they worked for at least six months during a given year.
up of seasonal employees who worked during the 1994 season. On August 3,
1994, they received a notice informing them that, due to serious business losses, D. PREVENTIVE SUSPENSION; CONSTRUCTIVE DISMISSAL
petitioner planned to close its Balintawak plant and transfer its tobacco
processing and redrying operations to Ilocos Sur. Although the closure was to be Philippine Airlines, Inc. v. NLRC, 292 SCRA 40
effective Sept. 15, 1994, they were no longer all9owed to work starting August 4, PAL preventively suspended Castro for grave misconduct after government
1994. Instead, petitioner awarded them separation pay computed according to the authorities apprehended him for violating a CB Circular. An investigation was
following formula: conducted and after 3 years & 6 months of suspension, PAL issued a resolution
total no. of days actually worked x daily rate x 15 days finding him guilty but nonetheless reinstating him explaining that the period
within which he was out of work shall serve as his penalty for suspension. Upon
total no. of working days in one year reinstatement, Castro filed a claim against PAL for backwages and salary
In their Complaint, they claimed that the computation should be based increases granted under the CBA covering the period of his suspension.
not on the above mathematical equation, but on the actual number of years Issue: Whether an employee who has been preventively suspended beyond the
served. In addition, they contended that they were illegally dismissed, and thus maximum 30-day period is entitled to backwages and salary increases granted
they prayed for backwages. under the CBA during the period of his suspension.
Held: The Supreme Court held that the Lubat group was indeed illegally Held: YUP. Under 3 & 4, Rule XIV of the Omnibus Rules, a preventive
dismissed. The seasonal workers who are temporarily laid off during off-season suspension shall not exceed 30 days, after which the employee must be reinstated
are not separated from service but merely considered on leave. Thus, petitioner to his former position. If the suspension is extended, the employee shall be
should be responsible for the reinstatement of the Lubat group and the payment entitled to his salaries and other benefits that may accrue to him during the period
of their backwages. However, since reinstatement is no longer possible as of such suspension.
petitioner has already closed its Balintawak plant, respondent members of the
said group should instead be awarded normal separation pay (in lieu of

Atty. Marlon Manuel
Manila Doctors Hospital v. NLRC, 135 SCRA 262 position as would deprive the employer of this prerogative. A transfer using this
Macatubal, admitting his guilt for the loss of x-ray films at the Manila Doctors prerogative is not tantamount to constructive dismissal if such is not
Hospital (MDH), implicated co-employees Cantor and Pepito. MDH suspended unreasonable, inconvenient, or prejudicial, or if it does not involve a demotion in
the latter and filed an application with the NLRC for clearance to terminate them. rank, or a diminution of salaries, benefits and other privileges.
Issue: Whether there was justification for the preventive suspension of Cantor
and Pepito. Singa Ship Management Phils. v. NLRC, 288 SCRA 692
Sangil worked on board the cruise vessel Crown Odyssey. A heated argument
Held: NONE. Preventive suspension can only be imposed if the continued with a Greek steward resulted to an altercation where Sangil suffered a scalp
employment of the employee poses a serious and imminent threat to the life or injury. While Sangil was confined in a nearby hospital, the ship left without him.
property of the employer or his co-employees. Any preventive suspension before The affidavit he executed before the Philippine Consul revealed that the Greek
the filing of the application for clearance shall be considered working days and crew continuously ridiculed and even threatened him. He was then, repatriated.
shall be duly paid if the continued presence of the employee concerned does not
pose a serious threat to the life and property of the employer or of his co- Issue: Whether there was constructive dismissal.
employees. Here, there was no such threat. It was only Macatubal who admitted Held: YUP. Constructive dismissal exists when there is a quitting because
responsibility for the loss and in fact, the fiscals office ordered the dismissal of continued employment is rendered impossible, unreasonable or unlikely. It does
the case filed against Cantor and Pepito. Notwithstanding, MDH withheld the not always involve diminution; an act of clear discrimination, insensibility, or
salaries of the latter. Thus, the latter are entitled to 50% of backwages from time disdain by an employer may become so unbearable on the part of the employee
of suspension to finality of decision. that it could foreclose any choice by him except to forego his continued
employment.
Phil. Japan Active Carbon Corp. v. NLRC, 171 SCRA 164 Here, Sangil quit because he feared for his life and his fear was well
Olga, an Executive Secretary to the Executive VP and General Manager was founded. The intense undercurrent between the Filipinos and the Greeks that
transferred to the Production Department as Production Secretary. Said transfer could erupt into violence at the slightest provocation was apparent. Also, Sangil
was neither with reason or notice, nor however was it with a change in salary and could not get any protection from the Greek ship captain, not even the slightest
workload. assurance of safety from him. Thus, Sangils decision to leave was not voluntary
Issue: Whether Olga was constructively dismissed. but impelled by the legitimate desire for self-preservation.
Held: Nope. A constructive discharge is a quitting because continued
employment is rendered impossible, unreasonable, or unlikely; as, an offer Leonardo v. NLRC, 333 SCRA 589
involving a demotion in rank and a diminution in pay. Here, Olgas assignment as At Reynaldos Marketing Corporation, Fuerte was a supervisor receiving P122 a
Production Secretary was not unreasonable as it did not involve a demotion in day, augmented by a weekly supervisors allowance. Fuerte was later transferred
rank (her rank was still that of a dept. secretary) nor a change in workplace (the to the Sucat plant for failure to meet his sales quota and his allowance was
office is in the same building) nor a diminution in pay, benefits, and privileges. withdrawn. He thus filed a complaint for illegal dismissal.
It is the employers prerogative to move its employees where they will be Issue: Whether there was constructive dismissal.
most useful. Security of tenure does not give an employee a vested right to his

Atty. Marlon Manuel
Held: NOPE. An employer acts well within its rights in transferring an employee According to the Rules, the burden is on the employer, not the employee, to
as it sees fit provided there is no demotion in rank or diminution in pay. The two justify dismissal with a certificate from public authority that the disease is not
circumstances are deemed badges of bad faith, and thus constitutive of curable within 6 months. Hence for failure of the employer to present one,
constructive dismissal. dismissal was not valid.
Here, although the transfer was undertaken beyond the parameters
above-mentioned, the employer does not deny that it was really demoting Fuerte F. RETIREMENT
but, for cause. It should be borne in mind that the right to demote an employee
also falls within the category of management prerogatives. An employer is REPUBLIC ACT NO. 7641
entitled to impose productivity standards for its workers, and in fact, non- AN ACT AMENDING ARTICLE 287 OF PRESIDENTIAL DECREE
compliance may be visited with a penalty even more severe than demotion. NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR
CODE OF THE PHILIPPINES, BY PROVIDING FOR RETIREMENT
PAY TO QUALIFIED PRIVATE SECTOR EMPLOYEES IN THE
E. DISEASE
ABSENCE OF ANY RETIREMENT PLAN IN THE ESTABLISHMENT
Tan v. NLRC, 271 SCRA 216 Sec. 1. Article 287 of Presidential Decree No. 442, as
Ibutnandi was dismissed because he failed to present a medical certificate from a amended, otherwise known as the Labor Code of the Philippines, is
government doctor certifying that he was already cured of pulmonary hereby amended to read as follows:
tuberculosis (PTB), hence, already fit to work.
Art. 287. Retirement. Any employee may be retired upon
Issue: Whether Ibutnandi was validly dismissed. reaching the retirement age established in the collective bargaining
Held: NOPE. It undeniable that Ibutnandi became afflicted with PTB and that agreement or other applicable employment contract.
under Art. 284 of the Labor Code, an employer may terminate the services of his In case of retirement, the employee shall be entitled to receive
employee found to be suffering from any disease and whose continued such retirement benefits as he may have earned under existing laws
employment is prohibited by law or is prejudicial to his health as well as to that and any collective bargaining agreement and other agreements:
of his co-employees. However, the fact that an employee is suffering from such a Provided, however, That an employees retirement benefits under any
disease does not ipso facto make him a sure candidate for dismissal. collective bargaining and other agreements shall not be less than
It is only where there is a prior certification from a competent public those provided herein.
authority that the disease is of such nature or at such stage that it cannot be cured In the absence of a retirement plan or agreement providing for
within 6 months even with proper medical treatment that the employee could be retirement benefits of employees in the establishment, an employee
validly terminated. upon reaching the age of sixty (60) years or more, but not beyond
sixty-five (65) years which is hereby declared the compulsory
Here, there is absolutely nothing to show that the employer obtained such
retirement age, who has served at least five (5) years in the said
certification. Rather, it was Ibutnandi who presented a certificate from a doctor establishment, may retire and shall be entitled to retirement pay
certifying that he was already fit to return to work. The employer rejected this equivalent to at least one-half (1/2) month salary for every year of
and insisted that Ibutnandi present one issued by a government physician.

Atty. Marlon Manuel
service, a fraction of at least six (6) months being considered as one started. However, two circumstances must concur: (1) the claimant was still the
whole year. employers employee at the effectivity of the statute; (2) the claimant complies
Unless the parties provide for broader inclusions, the term with the requirements for eligibility under the statute for such retirement benefits.
one-half (1/2) month salary shall mean fifteen (15) days plus one- Here, only the second circumstance exists. Prior to the effectivity of RA 7641,
twelfth (1/12) of the 13th month pay and the cash equivalent of not Federico already severed his employment with PVSIA when he tendered his
more than five (5) days of service incentive leaves. letter of resignation. In fact the issue before the NLRC was not the existence of
Retail, service and agricultural establishments or operations the employer-employee relationship between the parties; rather, considering the
employing not more than (10) employees or workers are exempted cessation of his service, whether he was entitled to monetary awards.
from the coverage of this provision.
Aquino v. NLRC, 206 SCRA 118
Violation of this provision is hereby declared unlawful and
Petitioners services were terminated on the ground of retrenchment. They
subject to the penal provisions provided under Article 288 of this
receivd separation pay double than required by the Labor Code. Later, they
Code.
demanded retirement benefits invoking the retirement plan of the company.
Sec. 2. Nothing in this Act shall deprive any employee of Issue: Whether receipt of separation pay precludes a claim for retirement
benefits to which he may be entitled under existing laws or company benefits.
policies or practices. Held: Not necessarily. Provided the CBA does not contain a provision
prohibiting the receipt of both termination and retirement pay, an employee is
Sec. 3. This Act shall take effect fifteen (15) days after its entitled to both. Here, both the CBA and the Retirement Plan contain no such
complete publication in the Official Gazette or in at least two (2)
prohibition. Hence, petitioners should get retirement benefits in addition to
national newspapers of general circulation, whichever comes earlier.
separation pay. Although the company paid separation pay double than that
required by law, this generosity does not excuse it from paying retirement
Approved: December 9, 1992
benefits because petitioners are not pleading for generosity but are demanding
their rights embodied in the CBA. When the employer signed the CBA, it
PSVSIA v. NLRC, 271 SCRA 209
recognized the rights of the workers and did not merely concede certain
Federico worked for PVSIA as a security guard for 23 years. When he turned 60,
privileges to them out of generosity.
he tendered his letter of resignation citing as his reasons his physical disability
to perform his duties and desire to spend the rest of his life in the province. He
Producers Bank v. NLRC, 298 SCRA 517
later sought termination pay corresponding to his years of service, or retirement
Producers Bank was placed under a conservator. The banks employees then
pay. PVSIA rejected Federicos claim.
demanded from the conservator the implementation of the CBA provisions on
Issue: Whether Federico is entitled to the benefits of RA 7641. retirement. The bank objected and a deadlock ensued. The employees filed a
Held: NO. R.A 7641, enacted as a labor protection measure and as a curative complaint for ULP and violations of the CBA. The bank countered that the
statute, applies to labor contracts still existing at the time the statute took effect. employees have already retired thus, there was no more employer-employee
Its benefits can be reckoned retroactively to the time the employment contract relationship and therefore, the employees had no personality to sue.

Atty. Marlon Manuel
Issues: retire at age 60 or more but not beyond 65 provided he has served at least 5 years
1. Whether the conservator can refuse to implement the CBA provisions on in the establishment concerned. That prerogative is exclusively lodged in the
retirement. employee.
By accepting the retirement benefits, Capili is deemed to have opted to retire
2. Whether the employees have no personality to sue. under the 3rd paragraph of Art. 287. Thereunder, he could choose to retire upon
Held: NO to both. age 60, provided it is before the age 65. It is worth noting his statement that he
1. A conservator cannot post-facto repudiate perfected transactions in violation had long been unjustly denied of his retirement benefits since Aug 18,1993. He
of the non-impairment clause of the Constitution. He can only revoke was entitled to retirement benefits as early as that date but was denied thereof
contracts that are deemed to be defective. Since he cannot rescind valid without justifiable reason. This could only mean that he has already acceded to
contracts, and since the CBA is the law between the parties; the conservator his retirement, effective on such date - when he reached the age of 60.
cannot disallow the implementation of the CBA provisions on retirement
considering that the ideals of social justice and labor protection are Progressive Development Corp. (PDC) v. NLRC, 344 SCRA 512
guaranteed not only by the Labor Code but also by the Constitution. PDCs retirement plan provides that any participant with twenty years of service,
regardless of age, may be retired at his option or at the option of the company.
2. Retirement does not in itself affect employment status, especially when it Pursuant to the plan, a number of employees were retired.
involves the rights and benefits due to an employee. The retirement scheme
is part of the employment package and the benefits therefrom constitute a Issue: Whether the retirement program of the company is valid.
continuing consideration for services rendered as well as an inducement for Held: Yes. The retirement plan under which the employees were retired is valid
remaining with the employer. Thus, when an employee has retired but his for it forms part of the employment contract of the company. In fact, the Bureau
benefits under the law or the CBA have not yet been given, he still retains, of Working Conditions of the DOLE recognized the validity of the plan. The
for the purpose of prosecuting his claims, the status of an employee entitled retirement plan now forms part of the employment contract since it is made
to protection under the Labor Code. known to the employees and accepted by them, and such plan has an express
provision that the company has the choice to retire an employee regardless of
Capili v. NLRC, 273 SCRA 576 age, with twenty years of service, said policy is within the bounds contemplated
Capili, a school instructor was informed by his employer that under the schools by the Labor Code. In addition, a number of employees had availed of the plan
retirement plan, it could retire him, arguing that the employee has the option only since its effectivity; thus the plan has already been part of the employment
in the absence of a retirement plan. contract of the company.
Issue: Whether an instructor of a private educational institution may be
compelled to retire at the age of 60 years. G. RESIGNATION
Held: Article 287 of the Labor Code provides for two types of retirement:
Metro Transit Organization v. NLRC, 284 SCRA 308
compulsory at the age of 65; and optional, which is primarily determined by the
Garcia, a station teller at Metro Transit, left work for a few weeks to look for his
CBA, employment contract, or employers retirement plan. In the absence of any
missing family. Upon his return (he didnt find his family), he was advised by
provision on optional retirement in a CBA, etc., an employee may optionally
Metro to resign. Still weighed down by his serious family problem, he at once

Atty. Marlon Manuel
prepared a resignation letter then left again to look for his family. Later, his the employer of his basic right to choose whom to employ. An employer is
resignation was accepted. free to regulate, according to his own discretion and judgement, all aspects of
Issue: Whether there was valid resignation. employment, including hiring.
Held: Metro Transit could have settled the problem of its employee and avoided LECTURE
litigation had it listened judiciously to the Garcias explanation for his absences.
The objectives of social justice can be realized only if employers in appropriate Termination of Employee
situations extend their hand to their employees in dire need of help. The
reinstatement of Garcia is in keeping with established jurisprudence. A Substantial requirements
termination without cause entitles a worker to reinstatement.
What is the difference between just causes and authorized causes?
Philippines Today, Inc. v. NLRC, 267 SCRA 202 An authorized cause has nothing to do with acts allegedly committed by the
Alegre filed for a leave of absence citing medical reasons, which were not employee. A just cause has something to do with and is precisely because of an
proved. He also wrote a memorandum containing all his grievances. He cleared act allegedly committed by the employee. This in turn will be used by the
his desk of personal belongings, did not report back for work, and expressly employer as a ground for termination.
manifested his intention to resign. He, however, was not deprived of his chance
to return to work. Just causes
Issues: Serious Misconduct. A willful misconduct is not always serious. A misconduct
1. Whether Alegre resigned. is not necessarily a ground for termination. If it is not serious, the misconduct
2. Whether he can unilaterally withdraw his resignation. will not justify termination.
Held:
Willful Disobedience. It must be willful disobedience. It is characterized by a
1. Yes. The facts establish that Alegre resigned.
perverse attitude. That the employee deliberately disobeyed the employer. Thus
2. No. Resignations, once accepted may not be withdrawn without the consent if the employer issues an ambiguous order and the employee disobeyed the
of the employer. If withdrawal is accepted, the employee retains his job. If employer because he could not understand the order, that disobedience cannot be
not, the employee cannot claim illegal dismissal. An employer cannot a just cause for termination. There must be an intent to defy a lawful order of the
backtrack on his resignation at his whim and without the conformity of his employer. The order must be related to his work.
employer.
A resigned employee who wants his job back has to re-apply True or False. As long as there is gross misconduct or willful disobedience
therefor, and he shall have the status of a stranger who cannot unilaterally committed by an employee, there is valid ground for termination.
demand an appointment. He cannot arrogate unto himself the same position False. The serious misconduct or willful disobedience must be committed by an
which he earlier decided to leave. To allow him to do so would be to deprive employee in relation to his work.

Atty. Marlon Manuel
Can an employee possibly commit a series of serious misconduct and yet not be grounds. And the exceptions should be construed strictly and unless you fall
terminated by the employer? under one exception, then you cannot be considered as an exception. Of course,
Yes. It must be in connection with his work or must affect his work. we are discussing a case here which is different from the other cases involving
exceptions because in this case we have a catch-all provision, saying that it may
Serious misconduct must be in relation to his work. It can be a fight which was include other cases not specifically mentioned.
committed inside the premises but outside office hours. If the fight has nothing
to do with the work of the employees and if that fight did not interrupt, did not Gross misconduct and willful disobedience are two different grounds even if they
disrupt the work and did not affect the working relationship of the employees in are stated in one sentence. So you do not need an order before you can have
the performance of their job, then such misconduct will not amount to a valid serious misconduct.
ground for termination. But it is a misconduct. And it is serious, it injured. But
you have to be careful with examples and illustration. It is not necessary that the Gross and habitual negligence. Negligence means failure to exercise the
misconduct be committed within the premises of the employer. The validity of diligence required of the job and it is without regard to the consequences of your
the ground for termination based on misconduct is not determined by the place of action. Should the negligence be work-related? Yes, it must be neglect of duties.
commission but by the effect of the misconduct on the work of the employee. It Duties of an employee, not the duties of a good father or husband. So your
can be committed outside the premises of the company, it can be committed negligence which is not work-related will not be a ground for termination.
outside office hours, but it can still affect the work of the employee or his
performance of the job. The negligence has to be gross and habitual. It should be a serious negligence
Why should the misconduct be related or in connection with the performance of and must not be based on an isolated act but should be habitual in character.
the work? Because you are terminating the employee because he is no longer fit Habitual means that theres a pattern of the negligent act.
to work and can no longer function effectively. And that is your reason for
termination. So if the misconduct of the employee, however serious in character, Should the first offense of neglect of duties which is gross in character be subject
if it has nothing to do, and it does not affect the performance of the work of the of disciplinary action? Yes. But not termination. We are not saying that the first
employee, it will not affect the employer-employee relationship and therefore the offense should be go unnoticed by the employer. We are not condoning the
employer should not have anything to do with that misconduct. That will not offense of the employee which is connected to his work which is gross
justify termination. Thus it has the work or affect the performance of the work. negligence in the performance of his duties. It should not go unpunished. What
Even willful disobedience. It must affect the performance of the work. In short we are saying however is that the punishment could not amount to termination in
if the disobedience pertains to an order which has nothing to do with the that first instance. Because the law says that the negligence should not only be
performance of the work, then that disobedience, no matter how deliberate in gross but also habitual. The law is clear. It says gross and habitual neglect. You
character even if it amounts to defiance, has nothing to do with the performance do not see that in misconduct. The misconduct only has gross. There is no
of the work and therefore has nothing to do with the employer-employee qualification that the misconduct should be also habitual.
relationship. And therefore cannot justify termination by the employer. You
have to go back to the rationale why a particular ground is allowed to justify There is no formula for habituality. You have to look at the circumstances. It can
termination. Remember that the general rule is you cannot terminate an be justified in some cases and not justified in other cases. The justification will
employee, these should be considered as the exceptions these are the only also depend on the seriousness of the negligence. If the negligence is so serious

Atty. Marlon Manuel
and it was penalized the first time, the second offense may justify termination. In
short, management is not required to wait for a third offense. But what is clear is Sleeping on the job is a sin of omission. In short, its not bad to sleep. Its not a
that the first offense is not a valid ground for termination if the ground is misbehavior. But because you are sleeping, you are not doing your job. So the
negligence. act of sleeping is a positive act which means that you cannot do something else.
And therefore, I dont think it can be considered a gross misconduct. If it can be
What is different between misconduct and negligence? We have to distinguish considered a misconduct at all. In short, the act of sleeping will not be a
between misconduct and negligence because misconduct is a ground for justification for termination at the first instance, even if youre a security guard
dismissal at the first instance. because it is negligence and not misconduct.
Misconduct is a sin of commission. While negligence is a sin of omission. In
misconduct you do something. But in negligence you failed to do something If youre only job is to make sure that all equipment are turned off and to make
which is required of you. Remember that difference, because in some cases, the sure that nothing is left on which will cause an accident and you failed to do that,
court seemed to have confused the two grounds. Minsan negligence lang, the result is so gross, it can be akin to misconduct. Are we saying that that
sinasabing misconduct. And that is very important, because a single act of negligence is misconduct and are we confusing negligence with misconduct?
negligence cannot be a ground for termination. So if you treat an act of No. We are going to the last item, which is analogous. We are not saying that
negligence as an act of misconduct, then the conclusion will be to terminate. In this particular act of negligence is equivalent to misconduct. We are saying that
short, the termination will be valid. But it should not be. Because the this is analogous to the first cause which is misconduct.
misconduct is not really a misconduct but mere negligence which although
serious, if not habitual, is not a ground for termination. Again, its very important While it is good to distinguish between gross misconduct from gross and habitual
to note the difference because in some case, mere negligence may appear to be a negligence, some extraordinary cases may fall under the analogous reasons item,
misconduct and in fact in particular decisions, the court will confuse negligence in which case a negligent act could be considered a misconduct. But that doesnt
with misconduct. mean that we will equate in all cases, negligence with misconduct.
Some cases are examples of that particular ground, I assigned a case of sleeping Fraud or willful breach by employee of the trust reposed on him by the employee.
while on duty. Its a very good example of how you should treat each particular Fraud is always willful. It should always be deliberate thats why there is no
ground for termination because sleeping while on duty is a ground for need for the adjective willful in fraud.
termination for some employees and not a ground for termination for some other
employees. Kung security guard ka at natutulog ka while on duty, it can be a Loss of trust and confidence is one of the most abused ground for termination.
ground for termination. However, if you are not a security guard, if youre a
factory worker and nakatulog ka while on duty, that may not justify termination The waiter example. Can a waiter be fired on the ground of loss of trust and
according to the decision. So what is the rationale of that? You always have to confidence? What if the waiter eats the food he is supposed to serve?
go back to the effect of the cause on the performance of the job. If the cause does Is your primary consideration in hiring the waiter your determination that that
not have an effect or has a limited effect on the performance of the job, it should waiter will not eat the food? NO, that is not the primary reason for hiring the
not justify termination. It will justify a disciplinary action which is not waiter. There is no trust reposed on the waiter that that waiter will not eat the
termination. food that he is supposed to serve. If there is no trust, there can be no breach.

Atty. Marlon Manuel
Because the basis is breach of trust. So when can that waiter be terminated for But we have to be careful about that. In one case, the court said theres a
breach of trust? In no case can the waiter be terminated for breach of trust difference between the treatment of managerial employees and ordinary
because in no case is trust reposed on the waiter. employees. For managerial employees, it would seem that the ground of breach
of confidence, you dont need to point to a particular misconduct, particularly to
Is the ground of loss of trust and confidence applicable to all employees? No, a particular act of the managerial employee. In short, suspicion which is
only to employees to whom the employer has reposed his trust and confidence. grounded on factual circumstances may be enough. I repeat, suspicion which is
based on factual circumstances will justify the termination of a managerial
Why do you say that the employer repose trust and confidence to a cashier and employee. Why? Because while there is no misconduct which is clearly shown,
not to a factory employee? Because the cashier handles amounts of money of the but there is breach of trust and confidence. However, the court said, that cannot
employer. Those employees who are primarily in charge of handling company be applied to non-managerial employee. Meaning for non-managerial
funds, company money or property. employees, you must show a particular act of breach of trust and confidence. So
in that case, for managerial employees, you will find value in using breach of
Theres a difference between the handling of a cashier of the money and the trust instead of misconduct. Because an act or a set of facts will or may justify
handling of the waiters. The waiters handling company assets will be temporary breach of trust but not misconduct for a particular managerial employee. So
and will not be the main function of that particular employee as opposed to a when it comes to that managerial employee, you will terminate him not because
cashier whose main function is to handle and to account for company funds. of serious misconduct but due to breach of trust which you can prove with other
Who else can be under that category? A warehouse person for example. An factual circumstances.
officer in charge of the custody of the warehouse where you have the supplies
and the raw materials of the management, I think that employee can be I think the category recited by Mr. Ariston (wowee, sikat!) can also be considered
terminated for breach of trust. But ordinary employees who are performing jobs as part of that set of employees which can be terminated for breach of trust. Lets
which are not primarily handling or in custody of company property or assets say a secretary who handles confidential information and confidential documents
cannot be terminated for breach of trust and confidence. It has to be either and mishandles such documents, it can also be applied. Again, it has to be
misconduct or any other ground but not breach of trust and confidence. Why? applied strictly and you have to show the circumstances showing a clear breach
Because there can be no breach if there is no trust reposed, no trust or confidence of trust.
reposed in the employee.
So the only employees you can terminate for breach are managerial employees
Why is there need for breach of trust as a ground? Why cant it just fall under and employees whose jobs primarily consists in handling company properties and
serious misconduct? company funds.
Serious misconduct must be a positive act. It must be shown that the employee
clearly committed something. In breach of trust, that positive act may not be Again, be careful about the terms. Take note of the term used, its willful breach.
clearly committed. And yet who have grounds to terminate an employee because Willful breach is entirely different from simple loss of trust and confidence. How
of a particular breach of trust and confidence. is it different? When you say willful breach, you are referring to a particular act
of an employee. If you simply say loss of trust or confidence, its simply the
employer losing trust and confidence in the employee. Its not the ground

Atty. Marlon Manuel
contemplated by the law. The ground mentioned is not simply loss of trust which
is subjective on the part of the employer, but breach of trust which is a positive What if the employee says something to the employer which is tantamount to oral
act on the part of the employee. defamation? Can the employee be terminated based on that?
Depending on the gravity of what he said. Which will take us now to the
According to the decision of the Court, for managerial employees, mere qualification that even if you have one of these things, even if you have a ground
circumstantial evidence may be enough. But for cashiers, or rank and file under Article 282. It does not automatically mean that termination is the proper
employees, you have to prove the acts constituting the breach of trust. In short, remedy of the employer. Even if it can be considered serious misconduct, the
the actual evidence of the positive act of the employee which can be considered court in many cases will say, you have to look at the circumstances, for example,
as a willful breach of trust. In short, madali kang matanggal if youre a length of service, the effect of that serious misconduct, the value of the property
managerial employee. involved (if property was lost because of serious misconduct). And the court said
that penalty should be commensurate to the offense committed. The term
Commission of a crime. Is there need for an actual case? No. The minimum offense committed will certainly refer to the offenses enumerated under Article
requirement of the law is the commission. And can you say that something is 282. What Im saying is that the mere existence of an offense that fall under
committed even before you file the case? Yes, of course. The employer does not Article 282 will not justify termination, if a penalty less severe will already be
have the responsibility to file a criminal case first or even to file it after or even sufficient. So hindi basta pumasok kayo under the definition, you will terminate.
report it to the police before terminating an employee who has committed an
offense against the employer. You dont need a case. You certainly dont need a Other causes analogous to the foregoing. While I said that this means have some
conviction before you can do that. A mere commission of an offense against the leeway in considering other causes, again the causes must be analogous to those
employer will justify termination. items specifically stated in subparagraphs. The term analogous should likewise
be construed narrowly. You cannot simply state that this is analogous to
We can use offense and crime interchangeably here. This is not a penal law, the subparagraph (a) or subparagraph (b), it has to be strictly construed. And unless
term crime against the person of the employer should not be interpreted as an you can show a relation between that particular offense and the offenses which
offense against the person (as opposed to offenses against the chastity or liberty). are specifically allowed to be ground for termination, then you cannot justify
I dont think that we have to place the technical meaning it has in criminal cases. termination. Let me give you some examples, the court has allowed in some
Ill give you an example: If an employee committed an offense, lets say acts of cases, the employer to terminate employees based on the employees violated of
lasciviousness against the daughter of the employer, that will not fall under the employers Code of Conduct. But the offenses enumerated in the Code of
serious misconduct unless its work-related. But it should fall under this case. Conduct must not be remote from the nature of the offenses enumerated under
And I dont think the employee can raise the defense that I did not commit a Article 282. So the employer is not limited to a, b, c, d. The employer can
crime against persons. impose additional causes but those causes and the validity of those causes as
justification for termination will be judged on the basis of whether they are on the
This ground is not work-related. The work-related qualification no longer same in thrust as a, b, c, d.
applies to subparagraph (d). Nakita mo sa labas yung employer mo, sinaksak
mo. You cannot claim hey, thats not work-related. I dont think you can do Procedural requirements. Three steps:
that.

Atty. Marlon Manuel
1. First notice A notice to the employee of the intent of the employer to How is it different from redundancy?
dismiss Redundancy is not the result of the installation of labor-saving device. Is there a
Also known as a show cause letter value for knowing the difference between labor-saving device or redundancy?
Contents:
a. Ground relied upon Assuming you have this situation where the installation of labor-saving device
b. Facts which constitute the ground resulted in employees services being redundant meaning you dont need the
Cannot simply say that this is the second serious offense group of employees anymore because you have installed a labor-saving device.
since January 22, 2002 Will the employee be terminated due to installation of labor-saving device or
c. Giving the employee the opportunity to prepare and explain his redundancy? Is there any difference in the consequences or the procedure of
side terminating due to labor-saving device and redundancy?
d. Intention of the employer to dismiss
It has to be clear in the letter. Simply asking the employee to If the installation of labor-saving device will mean that a group of employees will
explain in writing the incident that happen in a particular no longer be required, I dont think that there is any reason to think about the
date and a particular place. That is not a show cause letter. difference of installation of labor-saving device and redundancy. Termination
Its a show cause letter because the employee is required to due to installation of labor-saving device or redundancy will have the same
show cause why he or she should not be dismissed from the effect. The procedure will be the same. The separation pay will be the same.
employment. It is not simply an explanation of an incident. But not all redundancy will be the effect of installation of labor-saving device.
The employee must justify why he must not be terminated You can have redundancy which is the result of dropping one product in the
by management and unless you have that, the show cause production line. You dont need that production line anymore. So while you
letter is insufficient. You have to notify the employee in havent installed a labor-saving device, that is still redundancy.
advance that that explanation letter is so important because it
could cause him or her his employment. In redundancy, the employee terminated cannot claim that the termination is
2. A hearing to give the employee an opportunity to be heard invalid because he or she was the only one occupying that particular position at
Not really adversarial but employee may have a the time of termination. We are not referring to positions only, we are referring
lawyer with him if he wants services of the employees. And services may no longer be necessary even if
3. Second notice a notice of dismissal youre the only person occupying that particular position. Di mo puedeng
sabihin na ako lang yung may ganun na trabaho sa kumpanya. Di nga
Authorized causes kailangan yung trabaho mo na yun e. Therefore, you are redundant.
Redundancy is not simply duplication. The services of the redundant employee
Automation or labor-saving devices should be in excess of the needs or the requirements of the business of the
Because of the installation of labor-saving devices, you no longer need the employer.
services of employees.

Atty. Marlon Manuel
I have 15 employees doing a particular job. Then I hire a group of employees it is in the nature of exemplary damages. Hence it is not compensating for
through a subcontractor. Then I terminate the first 15 because of redundancy. Is anything, rather it is penalizing the employer for something. If it were
that valid? compensatory in nature, then earnings elsewhere should mitigate the damages or
No. Because the services are not redundant because you still need a group of the liability of the employer, because you need not compensate the employee.
employees to provide that service. But the Court in Serrano made a statement The employee did not lose anything during that period. In fact he earned
appearing to justify that. That the hiring of contractual employees and something during that period. Hence whatever earned elsewhere is immaterial in
terminating regular employees because they are no longer need. Small item of computing the amount to be paid as backwages.
Serrano. But Serrano has other portions which claim infamy. We know Serrano
because of something else, not that. 2. If reinstatement is impossible, separation pay should be given.
If reinstatement no longer possible, due to factual circumstances or strained
Retrenchment. relations, separation pay to be reckoned from the date he was hired in the
Termination of employee to prevent further losses involved in the company. company until finality of decision. Instead of reinstatement, he should be paid an
amount equivalent to one-month pay for every year of service (this rate is based
Different from redundancy. Retrenchment pertains to prevention of loss. In on jurisprudence. It is not in the law). Remember, this is the formula to be
redundancy, there is no qualification that you are terminating the employees applied as long as it is found that at the point of termination, such was illegal. So,
because you are losing money. There is no connection between redundancy and if the employer alleges lawful dismissal on the ground of just or authorized
loss. causes, but it is later proven that termination is illegal as the ground does not
exist, he is entitled to reinstatement. If impossible, then in lieu of that, separation
Is there value in determining the difference between retrenchment and pay equal to 1 month for every year of service. Dont confuse the formulas for
redundancy? The effect of retrenchment and redundancy as to separation pay is separation pay for termination due to authorized causes and illegal termination.
different. In retrenchment, the employer pays less thus he has to prove loss For instance a company closes in 1990 due to business losses. The workers (e.g.
before he can terminate due to retrenchment. who were hired in 1980) dont believe that and file a case, where eventually the
Supreme Court finds that the closure was fraudulent. The Court cannot order
What are the remedies of an illegally dismissed worker? reinstatement due to the fact of closure, but it can order the company to pay
separation pay worth 1 month salary for every year of service. Case is final as of
1. Reinstatement/separation pay and payment of backwages March 1, 2002. The company must pay separation pay from 1980 up to 2002, and
Payment of full backwages from the time actually illegally dismissed until backwages from 1990 up to 2002. The separation pay is supposed to replace the
actual reinstatement, or if reinstatement is not possible, up to the finality of the employees right to continue working. IT is similar to retirement pay. On the
decision. Full backwages means all allowances he should have received. Basic other hand, backwages is supposed to answer for compensation he should have
rule in computing backwages, whatever he should have received had he not been received had he not been dismissed illegally.
illegally terminated.
Now in the above example, if the employer paid the month rate per yr. of
In the case of Bustamante the Court said it is a penalty for the employer, and service, following the rules on authorized causes, then he is obligated to pay only
since it is a penalty, then it is not in the nature of compensatory damages. Rather the difference (another mo. per yr. of service) if the Court finds the closure

Atty. Marlon Manuel
illegal. But since this is an illegal dismissal claim, malamang hindi tinanggap ng what was missing in the law to avoid injustice to the worker. Otherwise, the
employees ang month for every year of service separation pay, as they are worker will not have a remedy in case reinstatement is not possible.
contesting its validity. I would personally advise them not to receive it. Such act
on their part would be cited by the employer to show that the termination is valid. Now strained relations means the relations would not be workable-avoid the
restoration of relations when the restoration would not be good for both parties. It
As a general rule, a waiver/quitclaim signed by the employees cannot bar applies only to those positions held in trust and confidence-managerial
their right to question the validity of termination and reap whatever amount due employees. This ground cannot apply to rank and file employees. And filing a
them if found to be illegally terminated. The employees will not be estopped case, litigation cannot be invoked to justify strained relations.
from questioning the legality of termination even if they sign waivers or receive
separation pay. But if I were counsel for the workers, I would advise them not to Remember to merit full credit you must answer, that the employee is entitled
receive separation payments and sign under such quitclaim. It would be an to reinstatement to the former or an equivalent position, without loss of seniority
additional issue to be threshed out, but still, such fact of receipt/acceptance would rights, and full backwages.
not estop the workers from questioning the legality of the quitclaim or their
dismissal. Without loss of seniority rights means that if by 2002, he would have
rendered 22 years of service had he not been terminated in 1990, then when he
Lets say eventually the courts find that there was a valid dismissal due to returns in 2002, he should be given the same seniority level as if he has not
authorized causes. The worker is entitled to such separation pay even if he stopped working. So assuming that because of the render of 22 years of service,
refused to receive it in the beginning. He is not barred from claiming what is due he should have been given a car by the company, when he is reinstated in 2002,
him. he is entitled to that car. However, insofar as salaries are concerned, if the
company has a salary scale that takes into consideration a job weighing scale
Now, remember it is the award of full amount of backwages that serves as a (looks at the seniority level vis--vis the rate), at the time of reinstatement he
penalty to the employer. The separation pay on the other hand, is given as a form should be placed on the level he should have been had he not been terminated.
of remedy to the employee, since reinstatement is impossible already. But, promotions he could have gotten will not be applicable UNLESS it operates
automatically because of the number of years worked. Usually promotions take
The rate of separation pay should be based on the rate he should have been into consideration a lot of factors. Same with benefits-if these should have
receiving as of finality of judgment. In the above example, it would be as of attached automatically, as long as the employee rendered a certain number of
2002. The point of this is because his years of service is being counted up to years of service, then the reinstated employee is entitled to it.
2002. It should be treated as if the employee is being reinstated and he is retiring. All this is hinged on the phrase as if the employee had not been dismissed.
Be careful, contrary to this jurisprudential rule, some decisions will tell you the This same operative phrase in backwages applies in reinstatement.
rate should be as of the time when he was terminated, which is wrong.
These remedies are applicable to a fixed term employment. For example we
All of this, separation pay in lieu of reinstatement, is purely jurisprudential have a valid fixed term contract good for ten years, then the employee is illegally
ruling. The only remedy provided in the Labor Code is pure reinstatement. But dismissed on the fifth year. Litigation lasted beyond the ten-year term of the
the SC recognized the situation where this may be impossible, and so it supplied contract, but the Court found in favor of the employee. Thus, the employee is

Atty. Marlon Manuel
entitled to backwages. The backwages should be computed for good for five Serrano bad? It is good as it increased the benefits of a dismissed worker who
years only. Now, reinstatement is impossible because the term has expired. So cannot be reinstated because there is just/authorized cause to dismiss him, but it
there is no award of separation pay in lieu of reinstatement. Then the present is bad because it removed the right of a worker to procedural due process-the
salaries of his contemporaries may be taken into consideration if the raise in their procedural rights prior to termination.
salaries are purely attributable to length of service and no other factors.
Serrano did not say the dismissal is illegal. Worse it says the employee is
Payroll reinstatement where the employer implements the reinstatement not entitled to due process at all, because it involves private parties. Justice
order by paying the employee his salaries pending appeal, but he does not let the Mendoza in this case says such right may be invoked only in relations against the
employee report for work. Government. It argued using the Constitutional provisions, not the Labor Code
provisions! Your bar chairmans forte is Constitution. To a person who is good at
In such a case, the employee may look for other work if he chooses to do so, using a hammer, every problem is looked at as a nail. This case is a perfect
following the Bustamante doctrine. example. So you cannot invoke due process using Serrano. Serrano is more of a
Consti case but has repercussions beyond that. However, this is penned by J.
If a collective bargaining agreement gives automatic raises then this must Mendoza, so dont attack this case in your bar exams ^_^.
be included in the payment of backwages. It covers everything one should If at the time of finality of judgment, the employer-corporation has been
receive had he not been illegally terminated. dissolved, who becomes liable to pay backwages? In some cases the Court
pierced the veil of corporate fiction, and allowed the employee to seek relief
A probationary employee should be considered past the probationary against the corporations officers, because the employee did not have any other
period and so entitled to the same principle under Bustamante. He should be available remedy.
considered a regular employee otherwise the backwages will not run, and the
employer would be able to defeat the rights of an illegally dismissed employee. CLASS NOTES
Even without action, or evaluation on the part of an employer, the mere lapse of
time makes a probie employee converted to regular. The employer should be Illegal dismissal case is filed with the Labor Arbiter of the NLRC. Remember
made to bear the cost for removing the opportunity of the employee to convert to that codal provision that proper interpretations of company policies shall be
regular ee under ordinary circumstances. This is premised under the idea that coursed through the voluntary arbitrator. However, if for example, an employee
management illegally took the opportunity away because the dismissal was is dismissed because of the application of the companys code of conduct, and so
illegal. This means the employer was unable to show any cause to terminate the there is a dispute as to the proper interpretation and application of such, it is still
probationary period. within the jurisdiction of the Labor Arbiter because it is mainly a termination
dispute which is under the jurisdiction of the LA.
Now Serrano complicates matters. Under the Wenphil doctrine, the lack A Labor Arbiters immediate reinstatement order is not final pending
of procedural due process makes the dismissal illegal, and awards damages appeal, however it is immediately executory. There is no need to issue a writ of
because of this. However Serrano says the lack of procedural due process makes execution. Thus, pending appeal the employer must implement the ruling. If it is
the dismissal merely INEFFECTUAL, and so the termination is effective only not followed, file a motion to cite the employer in contempt, if he refuses to
upon finality of the decision, hence the employee is awarded backwages. Why is implement the order. BUT REMEMBER, the Labor Code refers only to the LAs

Atty. Marlon Manuel
reinstatement order as immediately executory, and nothing else. So for instance, VIII. RIGHT TO HUMANE CONDITIONS OF WORK
the LA says the dismissal was valid, then on appeal the NLRC says illegal
dismissal-reinstate, such order is not immediately executory. A. PRE-EMPLOYMENT
Now lets take a little stroll down remedial law lane as applied to illegal
dismissal cases ^_^: LABOR CODE
1. file with the Labor Arbiter
2. then appeal to Secretary of Labor Art. 12. Statement of objectives. It is the policy of the State:
3. then to the Court of Appeals under Rule 65
(a) To promote and maintain a state of full employment through
4. file a Motion for Reconsideration improved manpower training, allocation and utilization;
5. then to the Supreme Court under Rule 45.
The same procedure applies to strike cases and voluntary arbitrators decisions. (b) To protect every citizen desiring to work locally or overseas by
securing for him the best possible terms and conditions of
There a two instances where the Labor Arbiter has no jurisdiction over employment;
termination disputes: (c) To facilitate a free choice of available employment by persons
1) when the parties submit the question of illegal dismissal to voluntary seeking work in conformity with the national interest;
arbitration (d) To facilitate and regulate the movement of workers in conformity
2) when the dismissal has become basis for filing a notice of strike, and the with the national interest;
Secretary of Labor assumed jurisdiction, the Secretary acquires jurisdiction over (e) To regulate the employment of aliens, including the
the termination dispute as well establishment of a registration and/or work permit system;
When the voluntary arbitration decision is final, it may be challenged (f) To strengthen the network of public employment offices and
rationalize the participation of the private sector in the
before the Court of Appeals under Rule 65, because it is the only mode or remedy
recruitment and placement of workers, locally and overseas, to
available, as stated in the DBP case (Im not sure if this case is in the syllabus,
serve national development objectives; aisa dc
but Sir cites this as recent case doctrine). One cannot file under Rule 43, because
the Labor Code says the Voluntary Arbitrators decision is a final decision. (g) To insure careful selection of Filipino workers for overseas
employment in order to protect the good name of the Philippines
abroad.
Art. 13. Definitions.

(a) Workers means any member of the labor force, whether
employed or unemployed.
(b) Recruitment and placement refers to any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring or procuring
workers, and includes referrals, contract services, promising or

Atty. Marlon Manuel
advertising for employment, locally or abroad, whether for profit (b) To furnish or publish any false notice or information or document
or not: Provided, That any person or entity which, in any in relation to recruitment or employment;
manner, offers or promises for a fee employment to two or more (c) To give any false notice, testimony, information or document or
persons shall be deemed engaged in recruitment and placement. commit any act or misrepresentation for the purpose of securing
(c) Private employment agency means any person or entity a license or authority under this Code;
engaged in the recruitment and placement of workers for a fee
which is charged, directly or indirectly, from the workers or (d) To induce or attempt to induce a worker already employed to
employers or both. quit his employment in order to offer him to another unless the
transfer is designed to liberate the worker from oppressive terms
(d) License means a document issued by the Department of Labor and conditions of employment;
authorizing a person or entity to operate a private employment
agency. (e) To influence or to attempt to influence any person or entity not
to employ any worker who has not applied for employment
(e) Private recruitment entity means any person or association through his agency;
engaged in the recruitment and placement of workers, locally or
overseas, without charging, directly or indirectly, any fee from (f) To engage in the recruitment or placement of workers in jobs
the workers or employers. harmful to public health or morality or to the dignity of the
Republic of the Philippines;
(f) Authority means a document issued by the Department of
Labor authorizing a person or association to engage in (g) To obstruct or attempt to obstruct inspection by the Secretary of
recruitment and placement activities as a private recruitment Labor or by his duly authorized representatives;
entity. (h) To fail to file reports on the status of employment, placement
(g) Seaman means any person employed in a vessel engaged in vacancies, remittance of foreign exchange earnings, separation
maritime navigation. from jobs, departures and such other matters or information as
may be required by the Secretary of Labor;
(h) Overseas employment means employment of a worker outside
the Philippines. (i) To substitute or alter employment contracts approved and
verified by the Department of Labor and Employment from the
(i) Emigrant means any person, worker or otherwise, who time of actual signing thereof by the parties up to and including
emigrates to a foreign country by virtue of an immigrant visa or the periods of expiration of the same without the approval of the
resident permit or its equivalent in the country of destination. Secretary of Labor.
Art. 34. Prohibited practices. It shall be unlawful for any (j) To become an officer or member of the Board of any corporation
individual, entity, licensee or holder of authority: engaged in travel agency or to be engaged directly or indirectly
in the management of a travel agency;
(a) To charge or accept directly or indirectly any amount greater
than that specified in the schedule of allowable fees prescribed (k) To withhold or deny travel documents from applicant workers
by the Secretary of Labor, or to make a worker pay any amount before departure for monetary or financial considerations other
greater than that actually received by him as a loan or advance;

Atty. Marlon Manuel
than those authorized under this Code and its implementing rules the office or premises and seizure of documents, paraphernalia,
and regulations. properties and other implements used in illegal recruitment
activities and the closure of companies, establishments and
Art. 35. Suspension and/or cancellation of license or authority. entities found to be engaged in the recruitment of workers for
The Secretary of Labor shall have the power to suspend or cancel overseas employment, without having been licensed or
any license or authority to recruit employees for overseas employment authorized to do so.
for violation of rules and regulations issued by the Secretary of Labor,
the Overseas Employment Development Board, and the National Art. 39. Penalties.
Seamen Board, or for violations of the provisions of this and other (a) The penalty of life imprisonment and a fine of One Hundred
applicable laws, General Orders and Letters of Instructions. Thousand Pesos (P100,000) shall be imposed if illegal
recruitment constitutes economic sabotage as defined herein:
Art. 38. Illegal Recruitment. (b) Any licensee or holder of authority found violating or causing
(a) Any recruitment activities, including the prohibited practices another to violate any provision of this Title or its implementing
enumerated under Article 34 of this Code, to be undertaken by rules and regulations shall, upon conviction thereof, suffer the
non-licensees or non-holders of authorities shall be deemed penalty of imprisonment of not less than two years nor more
illegal and punishable under Article 39 of this Code. The Ministry than five years or a fine of not less than P10,000 nor more than
of Labor and Employment or any law enforcement officer may P50,000 or both such imprisonment and fine, at the discretion of
initiate complaints under this Article. the court;
(c) Any person who is neither a licensee nor a holder of authority
(b) Illegal recruitment when committed by a syndicate or in large under this Title found violating any provision thereof or its
scale shall be considered an offense involving economic sabotage implementing rules and regulations shall, upon conviction
and shall be penalized in accordance with Article 39 hereof. thereof, suffer the penalty of imprisonment of not less than four
Illegal recruitment is deemed committed by a syndicate if carried out years nor more than eight years or a fine of not less than
by a group of three (3) or more persons conspiring and/or P20,000 nor more than P100,000 or both such imprisonment and
confederating with one another in carrying out any unlawful or fine, at the discretion of the court;
illegal transaction , enterprise or scheme defined under the first (d) If the offender is a corporation, partnership, association or entity,
paragraph hereof. Illegal recruitment is deemed committed in the penalty shall be imposed upon the officer or officers of the
large scale if committed against three (3) or more persons corporation, partnership, association or entity responsible for
individually or as a group. violation; and if such officer is an alien, he shall, in addition to
(c) The Minister of Labor and Employment or his duly authorized the penalties herein prescribed, be deported without further
representatives shall have the power to cause the arrest and proceedings;
detention of such non-licensee or non-holder of authority if after (e) In every case, conviction shall cause and carry the automatic
investigation it is determined that his activities constitute a revocation of the license or authority and all the permits and
danger to national security and public order or will lead to further privileges granted to such person or entity under this Title, and
exploitation of job-seekers. The Minister shall order the search of the forfeiture of the cash and surety bonds in favor of the

Atty. Marlon Manuel
Overseas Employment Development Board or the National program rests solely on the assurance that the dignity and
Seamen Board, as the case may be, both of which are authorized fundamental human rights and freedoms of the Filipino citizen
to use the same exclusively to promote their objectives. shall not, at any time, be compromised or violated. The State,
therefore, shall continuously create local employment
RA 8042 (MIGRANT WORKERS AND OVERSEAS FILIPINO ACT OF opportunities and promote the equitable distribution of wealth
1995) and the benefits of development.
(d) The State affirms the fundamental equality before the law of
REPUBLIC ACT NO. 8042 women and men and the significant role of women in nation-
AN ACT TO INSTITUTE THE POLICIES OF OVERSEAS building. Recognizing the contribution of overseas migrant
EMPLOYMENT AND ESTABLISH A HIGHER STANDARD OF women workers and their particular vulnerabilities, the State
PROTECTION AND PROMOTION OF THE WELFARE OF MIGRANT shall apply gender sensitive criteria in the formulation and
WORKERS, THEIR FAMILIES AND OVERSEAS FILIPINOS IN implementation of policies and programs affecting migrant
DISTRESS, AND FOR OTHER PURPOSES workers and the composition of bodies tasked for the welfare of
migrant workers.
Sec. 1. Short Title. - This Act shall be known and cited as the
(e) Free access to the courts and quasi-judicial bodies and adequate
Migrant Workers and Overseas Filipinos Act of 1995.
legal assistance shall not be denied to any person by reason of
poverty. In this regard, it is imperative that an effective
Sec. 2. Declaration of Policies.
mechanism be instituted to ensure that the rights and interest of
(a) In the pursuit of an independent foreign policy and while distressed overseas Filipinos, in general, and Filipino migrant
considering national sovereignty, territorial integrity, national workers, in particular, documented or undocumented, are
interest and the right to self-determination paramount in its adequately protected and safeguarded.
relations with other states, the State shall, at all times, uphold
(f) The right of Filipino migrant workers and all overseas Filipinos to
the dignity of its citizens whether in country or overseas, in
participate in the democratic decision-making processes of the
general, and Filipino migrant workers, in particular.
State and to be represented in institutions relevant to overseas
(b) The State shall afford full protection to labor, local and overseas, employment is recognized and guaranteed.
organized and unorganized, and promote full employment and
(g) The State recognizes that the ultimate protection to all migrant
equality of employment opportunities for all. Towards this end,
workers is the possession of skills. Pursuant to this and as soon
the State shall provide adequate and timely social, economic and
as practicable, the government shall deploy and/or allow the
legal services to Filipino migrant workers.
deployment only of skilled Filipino workers.
(c) While recognizing the significant contribution of Filipino migrant
(h) Non-governmental organizations, duly recognized as legitimate,
workers to the national economy through their foreign exchange
are partners of the State in the protection of Filipino migrant
remittances, the State does not promote overseas employment
workers and in the promotion of their welfare. The State shall
as a means to sustain economic growth and achieve national
cooperate with them in a spirit of trust and mutual respect.
development. The existence of the overseas employment

Atty. Marlon Manuel
(i) Government fees and other administrative costs of recruitment, (c) It has concluded a bilateral agreement or arrangement with the
introduction, placement and assistance to migrant workers shall government protecting the rights of overseas Filipino workers;
be rendered free without prejudice to the provision of Section 36 and
hereof. (d) It is taking positive, concrete measures to protect the rights of
Nonetheless, the deployment of Filipino overseas workers, migrant workers.
whether land-based or sea-based, by local service contractors and
manning agencies employing them shall be encouraged. Appropriate Sec. 5. Termination or Ban on Deployment. - Notwithstanding
incentives may be extended to them. the provisions of Section 4 hereof, the government, in pursuit of the
national interest or when public welfare so requires, may, at any time,
Sec. 3. Definitions. - For purposes of this Act: terminate or impose a ban on the deployment of migrant workers.
(a) Migrant worker refers to a person who is to be engaged, is
engaged or has been engaged in a remunerated activity in a II. ILLEGAL RECRUITMENT
state of which he or she is not a legal resident; to be used
interchangeably with overseas Filipino worker. Sec. 6. Definition. - For purposes of this Act, illegal
recruitment shall mean any act of canvassing, enlisting, contracting,
(b) Gender-sensitivity shall mean cognizance of the inequalities transporting, utilizing, hiring, or procuring workers and includes
and inequities prevalent in society between women and men and referring, contract services, promising or advertising for employment
a commitment to address issues with concern for the respective abroad, whether for profit or not, when undertaken by a non-licensee
interests of the sexes. or non-holder of authority contemplated under Article 13(f) of
(c) Overseas Filipinos refers to dependents of migrant workers and Presidential Decree No. 442, as amended, otherwise known as the
other Filipino nationals abroad who are in distress as mentioned Labor Code of the Philippines: Provided, That any such non-licensee or
in Sections 24 and 26 of this Act. non-holder who, in any manner, offers or promises for a fee
employment abroad to two or more persons shall be deemed so
I. DEPLOYMENT engaged. It shall likewise include the following acts, whether
committed by any person, whether a non-licensee, non-holder,
Sec. 4. Deployment of Migrant Workers. - The State shall licensee or holder of authority:
deploy overseas Filipino workers only in countries where the rights of (a) To charge or accept directly or indirectly any amount greater
Filipino migrant workers are protected. The government recognizes than that specified in the schedule of allowable fees prescribed
any of the following as a guarantee on the part of the receiving by the Secretary of Labor and Employment, or to make a worker
country for the protection and the rights of overseas Filipino workers: pay any amount greater than that actually received by him as a
(a) It has existing labor and social laws protecting the rights of loan or advance;
migrant workers; (b) To furnish or publish any false notice or information or document
(b) It is a signatory to multilateral conventions, declarations or in relation to recruitment or employment;
resolutions relating to the protection of migrant workers;

Atty. Marlon Manuel
(c) To give any false notice, testimony, information or document or than those authorized under the Labor Code and its
commit any act of misrepresentation for the purpose of securing implementing rules and regulations;
a license or authority under the Labor Code; (l) Failure to actually deploy without valid reason as determined by
(d) To induce or attempt to induce a worker already employed to the Department of Labor and Employment; and
quit his employment in order to offer him another unless the (m) Failure to reimburse expenses incurred by the worker in
transfer is designed to liberate a worker from oppressive terms connection with his documentation and processing for purposes
and conditions of employment; of deployment, in cases where the deployment does not actually
(e) To influence or attempt to influence any person or entity not to take place without the workers fault. Illegal recruitment when
employ any worker who has not applied for employment through committed by a syndicate or in large scale shall be considered an
his agency; offense involving economic sabotage.
(f) To engage in the recruitment or placement of workers in jobs Illegal recruitment is deemed committed by a syndicate if
harmful to public health or morality or to the dignity of the carried out by a group of three (3) or more persons conspiring or
Republic of the Philippines; confederating with one another. It is deemed committed in large scale
(g) To obstruct or attempt to obstruct inspection by the Secretary of if committed against three (3) or more persons individually or as a
Labor and Employment or by his duly authorized representative; group.
(h) To fail to submit reports on the status of employment, placement The persons criminally liable for the above offenses are the
vacancies, remittance of foreign exchange earnings, separation principals, accomplices and accessories. In case of juridical persons,
from jobs, departures and such other matters or information as the officers having control, management or direction of their business
may be required by the Secretary of Labor and Employment; shall be liable.
(i) To substitute or alter to the prejudice of the worker, employment Sec. 7. Penalties. -
contracts approved and verified by the Department of Labor and
Employment from the time of actual signing thereof by the (a) Any person found guilty of illegal recruitment shall suffer the
parties up to and including the period of the expiration of the penalty of imprisonment of not less than six (6) years and one
same without the approval of the Department of Labor and (1) day but not more than twelve (12) years and a fine of not
Employment; less than Two hundred thousand pesos (P200,000.00) nor more
than Five hundred thousand pesos (P500,000.00).
(j) For an officer or agent of a recruitment or placement agency to
become an officer or member of the Board of any corporation (b) The penalty of life imprisonment and a fine of not less than Five
engaged in travel agency or to be engaged directly or indirectly hundred thousand pesos (P500,000.00) nor more than One
in the management of a travel agency; million pesos (P1,000,000.00) shall be imposed if illegal
recruitment constitutes economic sabotage as defined herein.
(k) To withhold or deny travel documents from applicant workers
before departure for monetary or financial considerations other Provided, however, That the maximum penalty shall be
imposed if the person illegally recruited is less than eighteen (18)

Atty. Marlon Manuel
years of age or committed by a non-licensee or non-holder of contract for overseas employment and shall be a condition precedent
authority. for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be
Sec. 8. Prohibition on Officials and Employees. - It shall be answerable for all money claims or damages that may be awarded to
unlawful for any official or employee of the Department of Labor and the workers. If the recruitment/placement agency is a juridical being,
Employment, the Philippine Overseas Employment Administration the corporate officers and directors and partners as the case may be,
(POEA), or the Overseas Workers Welfare Administration (OWWA), or shall themselves be jointly and solidarily liable with the corporation or
the Department of Foreign Affairs, or other government agencies partnership for the aforesaid claims and damages.
involved in the implementation of this Act, or their relatives within the Such liabilities shall continue during the entire period or
fourth civil degree of consanguinity or affinity, to engage, directly or duration of the employment contract and shall not be affected by any
indirectly in the business of recruiting migrant workers as defined in substitution, amendment or modification made locally or in a foreign
this Act. The penalties provided in the immediate preceding paragraph country of the said contract.
shall be imposed upon them.
Any compromise/amicable settlement or voluntary agreement
Sec. 9. Venue. - A criminal action arising from illegal on money claims inclusive of damages under this section shall be paid
recruitment as defined herein shall be filed with the Regional Trial within four (4) months from the approval of the settlement by the
Court of the province or city where the offense was committed or appropriate authority.
where the offended party actually resides at the time of the In case of termination of overseas employment without just,
commission of the offense: Provided, That the court where the criminal valid or authorized cause as defined by law or contract, the worker
action is first filed shall acquire jurisdiction to the exclusion of other shall be entitled to the full reimbursement of his placement fee with
courts: Provided, however, That the aforestated provisions shall also interest at twelve percent (12%) per annum, plus his salaries for the
apply to those criminal actions that have already been filed in court at unexpired portion of his employment contract or for three (3) months
the time of the effectivity of this Act. for every year of the unexpired term, whichever is less.
Noncompliance with the mandatory periods for resolutions of
Sec. 10. Money Claims. - Notwithstanding any provision of law cases provided under this section shall subject the responsible officials
to the contrary, the Labor Arbiters of the National Labor Relations to any or all of the following penalties:
Commission (NLRC) shall have the original and exclusive jurisdiction to
hear and decide, within ninety (90) calendar days after the filing of the (a) The salary of any such official who fails to render his decision or
complaint, the claims arising out of an employer-employee relationship resolution within the prescribed period shall be, or caused to be,
or by virtue of any law or contract involving Filipino workers for withheld until the said official complies therewith;
overseas deployment including claims for actual, moral, exemplary and (b) Suspension for not more than ninety (90) days; or
other forms of damages. (c) Dismissal from the service with disqualification to hold any
The liability of the principal/employer and the appointive public office for five (5) years.
recruitment/placement agency for any and all claims under this section
shall be joint and several. This provision shall be incorporated in the

Atty. Marlon Manuel
Provided, however, That the penalties herein provided shall be III. SERVICES
without prejudice to any liability which any such official may have
incurred under other existing laws or rules and regulations as a Sec. 14. Travel Advisory/Information Dissemination. - To give
consequence of violating the provisions of this paragraph. utmost priority to the establishment of programs and services to
prevent illegal recruitment, fraud and exploitation or abuse of Filipino
Sec. 11. Mandatory Periods for Resolution of Illegal migrant workers, all embassies and consular offices, through the
Recruitment Cases. - The preliminary investigations of cases under this Philippine Overseas Employment Administration (POEA), shall issue
Act shall be terminated within a period of thirty (30) calendar days travel advisories or disseminate information on labor and employment
from the date of their filing. Where the preliminary investigation is conditions, migration realities and other facts; and adherence of
conducted by a prosecution officer and a prima facie case is particular countries to international standards on human and workers
established, the corresponding information shall be filed in court within rights which will adequately prepare individuals into making informed
twenty-four (24) hours from the termination of the investigation. If and intelligent decisions about overseas employment. Such advisory
the preliminary investigation is conducted by a judge and a prima facie or information shall be published in a newspaper of general circulation
case is found to exist, the corresponding information shall be filed by at least three (3) times in every quarter.
the proper prosecution officer within forty-eight (48) hours from the
date of receipt of the records of the case. Sec. 15. Repatriation of Workers; Emergency Repatriation
Fund. - The repatriation of the worker and the transport of his
Sec. 12. Prescriptive Periods. - Illegal recruitment cases under personal belongings shall be the primary responsibility of the agency
this Act shall prescribe in five (5) years: Provided, however, That which recruited or deployed the worker overseas. All costs attendant
illegal recruitment cases involving economic sabotage as defined to repatriation shall be borne by or charged to the agency concerned
herein shall prescribe in twenty (20) years. and/or its principal. Likewise, the repatriation of remains and
transport of the personal belongings of a deceased worker and all
Sec. 13. Free Legal Assistance; Preferential Entitlement Under costs attendant thereto shall be borne by the principal and/or the local
the Witness Protection Program. - A mechanism for free legal agency. However, in cases where the termination of employment is
assistance for victims of illegal recruitment shall be established within due solely to the fault of the worker, the principal/employer or agency
the Department of Labor and Employment including its regional shall not in any manner be responsible for the repatriation of the
offices. Such mechanism must include coordination and cooperation former and/or his belongings.
with the Department of Justice, the Integrated Bar of the Philippines, The Overseas Workers Welfare Administration (OWWA), in
and other non-governmental organizations and volunteer groups. coordination with appropriate international agencies, shall undertake
The provisions of Republic Act No. 6981 to the contrary the repatriation of workers in cases of war, epidemic, disaster or
notwithstanding, any person who is a victim of illegal recruitment shall calamities, natural or man-made, and other similar events without
be entitled to the Witness Protection Program provided thereunder. prejudice to reimbursement by the responsible principal or agency.
However, in cases where the principal or recruitment agency cannot be
identified, all costs attendant to repatriation shall be borne by the
OWWA.

Atty. Marlon Manuel
For this purpose, there is hereby created and established an For this purpose, the Technical Education and Skills
emergency repatriation fund under the administration, control and Development Authority (TESDA), the Technology Livelihood Resource
supervision of the OWWA, initially to consist of One hundred million Center (TLRC), and other government agencies involved in training
pesos (P100,000,000.00), which shall be taken from the existing fund and livelihood development shall give priority to returnees who had
controlled and administered by the OWWA. Thereafter, such fund shall been employed as domestic helpers and entertainers.
be provided for in the General Appropriations Act from year to year:
Provided, That the amount appropriated shall in no case be less than Sec. 18. Functions of the Re-placement and Monitoring
One hundred million pesos (P100,000,000.00), inclusive of outstanding Center. - The Center shall provide the following services:
balances. (a) Develop livelihood programs and projects for returning Filipino
migrant workers in coordination with the private sector;
Sec. 16. Mandatory Repatriation of Underage Migrant
Workers. - Upon discovery or being informed of the presence of (b) Coordinate with appropriate private and government agencies in
migrant workers whose actual ages fall below the minimum age the promotion, development, re-placement and the full utilization
requirement for overseas deployment, the responsible officers in the of their potentials;
foreign service shall without delay repatriate said workers and advise (c) Institute, in cooperation with other government agencies
the Department of Foreign Affairs through the fastest means of concerned, a computer-based information system on skilled
communication available of such discovery and other relevant Filipino migrant workers which shall be accessible to all local
information. recruitment agencies and employers, both public and private;
(d) Provide a periodic study and assessment of job opportunities for
Sec. 17. Establishment of Re-placement and Monitoring returning Filipino migrant workers; and
Center. - A re-placement and monitoring center is hereby created in
the Department of Labor and Employment for returning Filipino (e) Develop and implement other appropriate programs to promote
migrant workers which shall provide a mechanism for their the welfare of returning Filipino migrant workers.
reintegration into the Philippine society, serve as a promotion house
for their local employment, and tap their skills and potentials for Sec. 19. Establishment of a Migrant Workers and other
national development. Overseas Filipinos Resource Center. - Within the premises and under
the administrative jurisdiction of the Philippine Embassy in countries
The Department of Labor and Employment, the Overseas where there are large concentrations of Filipino migrant workers, there
Workers Welfare Administration, and the Philippine Overseas shall be established a Migrant Workers and Other Overseas Filipinos
Employment Administration shall, within ninety (90) days from the Resource Center with the following services:
effectivity of this Act, formulate a program that would motivate
migrant workers to plan for productive options such as entry into (a) Counselling and legal services;
highly technical jobs or undertakings, livelihood and entrepreneurial (b) Welfare assistance including the procurement of medical and
development, better wage employment, and investment of savings. hospitalization services;

Atty. Marlon Manuel
(c) Information, advisory and programs to promote social integration Sec. 20. Establishment of a Shared Government Information
such as post-arrival orientation, settlement and community System for Migration. - An inter-agency committee composed of the
networking services and activities for social interaction; Department of Foreign Affairs and its attached agency, the
(d) Institute a scheme of registration of undocumented workers to Commission on Filipinos Overseas, the Department of Labor and
bring them within the purview of this Act. For this purpose, the Employment, the Philippine Overseas Employment Administration, the
Center is enjoined to compel existing undocumented workers to Overseas Workers Welfare Administration, the Department of Tourism,
register with it within six (6) months from the effectivity of this the Department of Justice, the Bureau of Immigration, the National
Act, under pain of having his/her passport cancelled; Bureau of Investigation, and the National Statistics Office shall be
established to implement a shared government information system for
(e) Human resource development, such as training and skills migration. The inter-agency committee shall initially make available to
upgrading; itself the information contained in existing data bases/files. The
(f) Gender sensitive program and activities to assist particular needs second phase shall involve linkaging of computer facilities in order to
of women migrant workers; allow free flow data exchanges and sharing among concerned
(g) Orientation program for returning worker and other migrants; agencies.
and The inter-agency committee shall convene to identify existing
(h) Monitoring of daily situations, circumstances and activities data bases which shall be declassified and shared among member
affecting migrant workers and other overseas Filipinos. agencies. These shared data bases shall initially include, but not be
limited to, the following information:
The establishment and operations of the Center shall be a joint
undertaking of the various government agencies. The Center shall be (a) Masterlists of Filipino migrant workers/overseas Filipinos
open for twenty-four (24) hours daily including Saturdays, Sundays classified according to occupation/job category, civil status, by
and holidays, and shall be staffed by Foreign Service personnel, country/state of destination including visa classification;
service attaches or officers who represent other Philippine government (b) Inventory of pending legal cases involving Filipino migrant
agencies abroad and, if available, individual volunteers and bona fide workers and other Filipino nationals, including those serving
non-government organizations from the host countries. In countries prison terms;
categorized as highly problematic by the Department of Foreign Affairs (c) Masterlist of departing/arriving Filipinos;
and the Department of Labor and Employment and where there is a
concentration of Filipino migrant workers, the government must (d) Statistical profile on Filipino migrant workers/overseas
provide a lawyer and a social worker for the Center. The Labor Filipinos/tourists;
Attache shall coordinate the operation of the Center and shall keep the (e) Blacklisted foreigners/undesirable aliens;
Chief of Mission informed and updated on all matters affecting it. (f) Basic data on legal systems, immigration policies, marriage laws
The Center shall have a counterpart 24-hour information and and civil and criminal codes in receiving countries particularly
assistance center at the Department of Foreign Affairs to ensure a those with large numbers of Filipinos;
continuous network and coordinative mechanism at the home office.

Atty. Marlon Manuel
(g) List of labor and other human rights instruments where receiving IV. GOVERNMENT AGENCIES
countries are signatories;
(h) A tracking system of past and present gender disaggregated Sec. 23. Role of Government Agencies. - The following
cases involving male and female migrant workers; and government agencies shall perform the following to promote the
welfare and protect the rights of migrant workers and, as far as
(i) Listing of overseas posts which may render assistance to applicable, all overseas Filipinos:
overseas Filipinos, in general, and migrant workers, in particular.
(a) Department of Foreign Affairs - The Department, through its
Sec. 21. Migrant Workers Loan Guarantee Fund. - In order to home office or foreign posts, shall take priority action or make
further prevent unscrupulous illegal recruiters from taking advantage representation with the foreign authority concerned to protect
of workers seeking employment abroad, the OWWA, in coordination the rights of migrant workers and other overseas Filipinos and
with government financial institutions, shall institute financing extend immediate assistance including the repatriation of
schemes that will expand the grant of pre-departure loan and family distressed or beleaguered migrant workers and other overseas
assistance loan. For this purpose, a Migrant Workers Loan Guarantee Filipinos;
Fund is hereby created and the revolving amount of One hundred (b) Department of Labor and Employment - The Department of Labor
million pesos (P100,000,000.00) from the OWWA is set aside as a and Employment shall see to it that labor and social welfare laws
guarantee fund in favor of participating government financial in the foreign countries are fairly applied to migrant workers and
institutions. whenever applicable, to other overseas Filipinos including the
grant of legal assistance and the referral to proper medical
Sec. 22. Rights and Enforcement Mechanism Under centers or hospitals:
International and Regional Human Rights Systems. - The Department (b.1) Philippine Overseas Employment Administration - Subject to
of Foreign Affairs is mandated to undertake the necessary initiative deregulation and phase-out as provided under Sections 29 and
such as promotions, acceptance or adherence of countries receiving 30 herein, the Administration shall regulate private sector
Filipino workers to multilateral convention, declaration or resolutions participation in the recruitment and overseas placement of
pertaining to the protection of migrant workers rights. The workers by setting up a licensing and registration system. It
Department of Foreign Affairs is also mandated to make an shall also formulate and implement, in coordination with
assessment of rights and avenues of redress under international and appropriate entities concerned, when necessary, a system for
regional human rights systems that are available to Filipino migrant promoting and monitoring the overseas employment of Filipino
workers who are victims of abuse and violation and, as far as workers taking into consideration their welfare and the domestic
practicable and through the Legal Assistant for Migrant Workers Affairs manpower requirements.
created under this Act, pursue the same on behalf of the victim if it is
legally impossible to file individual complaints. If a complaints (b.2) Overseas Workers Welfare Administration - The Welfare officer or
machinery is available under international or regional systems, the in his absence, the coordinating officer shall provide the Filipino
Department of Foreign Affairs shall fully apprise the Filipino migrant migrant worker and his family all the assistance they may need
workers of the existence and effectiveness of such legal options. in the enforcement of contractual obligations by agencies or
entities and/or by their principals. In the performance of this

Atty. Marlon Manuel
function, he shall make representation and may call on the (d) To administer the legal assistance fund for migrant workers
agencies or entities concerned to conferences or conciliation established under Section 25 thereof and to authorize
meetings for the purpose of settling the complaints or problems disbursements therefrom in accordance with the purposes for
brought to his attention. which the fund was set up; and
(e) To keep and maintain the information system as provided in
V. THE LEGAL ASSISTANT FOR MIGRANT WORKERS AFFAIRS Section 20.
Sec. 24. Legal Assistant for Migrant Workers Affairs. - There is The Legal Assistant for Migrant Workers Affairs shall have
hereby created the position of Legal Assistant for Migrant Workers authority to hire private lawyers, domestic or foreign, in order to assist
Affairs under the Department of Foreign Affairs who shall be primarily him in the effective discharge of the above functions.
responsible for the provision and overall coordination of all legal
assistance services to be provided to Filipino migrant workers as well Sec. 25. Legal Assistance Fund. - There is hereby established
as overseas Filipinos in distress. He shall have the rank, salary and a legal assistance fund for migrant workers, hereinafter referred to as
privileges equal to that of an undersecretary of said Department. the Legal Assistance Fund, in the amount of One hundred million pesos
(P100,000,000.00) to be constituted from the following sources:
The said Legal Assistant for Migrant Workers Affairs, shall be
appointed by the President and must be of proven competence in the Fifty million pesos (P50,000,000.00) from the Contingency
field of law with at least ten (10) years of experience as a legal Fund of the President;
practitioner and must not have been a candidate to an elective office Thirty million pesos (P30,000,000.00) from the Presidential
in the last local or national elections. Social Fund; and
Among the functions and responsibilities of the aforesaid Legal Twenty million pesos (P20,000,000.00) from the Welfare Fund
Assistant are: for Overseas Workers established under Letter of Instruction No. 537,
(a) To issue the guidelines, procedures and criteria for the provision as amended by Presidential Decree Nos. 1694 and 1809.
of legal assistance services to Filipino migrant workers; Any balances of existing funds which have been set aside by
(b) To establish close linkages with the Department of Labor and the government specifically as legal assistance or defense fund to help
Employment, the POEA, the OWWA and other government migrant workers shall, upon effectivity of this Act, be turned over to,
agencies concerned, as well as with non-governmental and form part of, the Fund created under this Act.
organizations assisting migrant workers, to ensure effective
coordination and cooperation in the provision of legal assistance Sec. 26. Uses of the Legal Assistance Fund. - The Legal
to migrant workers; Assistance Fund created under the preceding section shall be used
exclusively to provide legal services to migrant workers and overseas
(c) To tap the assistance of reputable law firms and the Integrated Filipinos in distress in accordance with the guidelines, criteria and
Bar of the Philippines and other bar associations to complement procedures promulgated in accordance with Section 24(a) hereof. The
the governments efforts to provide legal assistance to our expenditures to be charged against the Fund shall include the fees for
migrant workers; the foreign lawyers to be hired by the Legal Assistant for Migrant

Atty. Marlon Manuel
Workers Affairs to represent migrant workers facing charges abroad, In host countries where there are Philippine consulates, such
bail bonds to secure the temporary release of workers under consulates shall also constitute part of the country-team under the
detention, court fees and charges and other litigation expenses. leadership of the ambassador.
In the implementation of the country-team approach, visiting
VI. COUNTRY-TEAM APPROACH Philippine delegations shall be provided full support and information.
Sec. 27. Priority Concerns of Philippine Foreign Service Posts. VII. DEREGULATION AND PHASE-OUT
- The country-team approach, as enunciated under Executive Order
No. 74, series of 1993, shall be the mode under which Philippine Sec. 29. Comprehensive Deregulation Plan on Recruitment
embassies or their personnel will operate in the protection of the Activities. - Pursuant to a progressive policy of deregulation whereby
Filipino migrant workers as well as in the promotion of their welfare. the migration of workers becomes strictly a matter between the
The protection of the Filipino migrant workers and the promotion of worker and his foreign employer, the DOLE, within one (1) year from
their welfare, in particular, and the protection of the dignity and the effectivity of this Act, is hereby mandated to formulate a five-year
fundamental rights and freedoms of the Filipino citizen abroad, in comprehensive deregulation plan on recruitment activities taking into
general, shall be the highest priority concerns of the Secretary of account labor market trends, economic conditions of the country and
Foreign Affairs and the Philippine Foreign Service Posts. emerging circumstances which may affect the welfare of migrant
workers.
Sec. 28. Country -Team Approach. - Under the country-team
approach, all officers, representatives and personnel of the Philippine Sec. 30. Gradual Phase-out of Regulatory Functions. - Within a
government posted abroad regardless of their mother agencies shall, period of five (5) years from the effectivity of this Act, the DOLE shall
on a per country basis, act as one country-team with a mission under phase-out the regulatory functions of the POEA pursuant to the
the leadership of the ambassador. In this regard the ambassador may objectives of deregulation.
recommend to the Secretary of the Department of Foreign Affairs the
recall of officers, representatives and personnel of the Philippine VIII. PROFESSIONAL AND OTHER HIGHLY-SKILLED FILIPINOS
government posted abroad for acts inimical to the national interest ABROAD
such as, but not limited to, failure to provide the necessary services to
protect the rights of overseas Filipinos. Sec. 31. Incentives to Professionals and Other Highly-Skilled
Upon receipt of the recommendation of the ambassador, the Filipinos Abroad. - Pursuant to the objective of encouraging
Secretary of the Department of Foreign Affairs shall, in the case of professionals and other highly-skilled Filipinos abroad especially in the
officers, representatives and personnel of other departments, endorse field of science and technology to participate in, and contribute to
such recommendation to the department secretary concerned for national development, the government shall provide proper and
appropriate action. Pending investigation by an appropriate body in adequate incentives and programs so as to secure their services in
the Philippines, the person recommended for recall may be placed priority development areas of the public and private sectors.
under preventive suspension by the ambassador.

Atty. Marlon Manuel
IX. MISCELLANEOUS PROVISIONS process to address Filipino migrant concerns, two (2) sectoral
representatives for migrant workers in the House of Representatives
Sec. 32. POEA and OWWA Board; Additional Memberships. - shall be appointed by the President from the ranks of migrant workers:
Notwithstanding any provision of law to the contrary, the respective Provided, That at least one (1) of the two (2) sectoral representatives
Boards of the POEA and the OWWA shall, in addition to their present shall come from the women migrant workers sector: Provided, further,
composition, have three (3) members each who shall come from the That all nominees must have at least two (2) years experience as a
women, sea-based and land-based sectors respectively, to be migrant worker.
appointed by the President in the same manner as the other members.
Sec. 35. Exemption from Travel Tax and Airport Fee. - All laws
Sec. 33. Report to Congress. - In order to inform the to the contrary notwithstanding, the migrant worker shall be exempt
Philippine Congress on the implementation of the policy enunciated in from the payment of travel tax and airport fee upon proper showing of
Section 4 hereof, the Department of Foreign Affairs and the proof of entitlement by the POEA.
Department of Labor and Employment shall submit to the said body a
semi-annual report of Philippine foreign posts located in countries Sec. 36. Non-increase of Fees; Abolition of Repatriation Bond.
hosting Filipino migrant workers. The report shall include, but shall - Upon approval of this Act, all fees being charged by any government
not be limited to, the following information: office on migrant workers shall remain at their present levels and the
(a) Masterlist of Filipino migrant workers, and inventory of pending repatriation bond shall be abolished.
legal cases involving them and other Filipino nationals including
those serving prison terms; Sec. 37. The Congressional Migrant Workers Scholarship
Fund. - There is hereby created a Congressional Migrant Workers
(b) Working conditions of Filipino migrant workers; Scholarship Fund which shall benefit deserving migrant workers and/or
(c) Problems encountered by the migrant workers, specifically their immediate descendants below twenty-one (21) years of age who
violations of their rights; intend to pursue courses or training primarily in the field of science
(d) Initiatives/actions taken by the Philippine foreign posts to and technology. The initial seed fund of Two hundred million pesos
address the problems of Filipino migrant workers; (P200,000,000.00) shall be constituted from the following sources:
(e) Changes in the laws and policies of host countries; and (a) Fifty million pesos (P50,000,000.00) from the unexpended
Countrywide Development Fund for 1995 in equal sharing by all
(f) Status of negotiations on bilateral labor agreements between the Members of Congress; and
Philippines and the host country.
(b) The remaining One hundred fifty million pesos
Any officer of the government who fails to report as stated in (P150,000,000.00) shall be funded from the proceeds of Lotto
the preceding section shall be subject to administrative penalty. draws.
Sec. 34. Representation in Congress. - Pursuant to Section The Congressional Migrant Workers Scholarship Fund as herein
5(2), Article VI of the Constitution and in line with the objective of created shall be administered by the DOLE in coordination with the
empowering overseas Filipinos to participate in the policy making Department of Science and Technology (DOST). To carry out the

Atty. Marlon Manuel
objectives of this section, the DOLE and the DOST shall formulate the RULES AND REGULATIONS IMPLEMENTING THE MIGRANT
necessary rules and regulations. WORKERS AND OVERSEAS FILIPINOS ACT OF 1995
Sec. 38. Appropriation and Other Sources of Funding. - The Pursuant to the authority vested by law on the Secretary of
amount necessary to carry out the provisions of this Act shall be Labor and Employment, the following implementing Rules and
provided for in the General Appropriations Act of the year following its regulations are hereby promulgated:
enactment into law and thereafter.
I. GENERAL POLICY STATEMENT
Sec. 39. Migrant Workers Day. - The day of signing by the
President of this Act shall be designated as the Migrant Workers Day Section 1. Declaration of Policies.
and shall henceforth be commemorated as such annually. (a) In the pursuit of an independent foreign policy and while
considering national sovereignty, territorial integrity, national
Sec. 40. Implementing Rules and Regulations. - The interest and the right self-determination paramount in its
departments and agencies charged with carrying out the provisions of relations with other states, the State shall, at all times, uphold
this Act shall, within ninety (90) days after the effectivity of this Act, the dignity of its citizens whether in the country or overseas, in
formulate the necessary rules and regulations for its effective general, and the Filipino migrant workers, in particular.
implementation.
(b) The State shall afford full protection to labor, local and overseas,
Sec. 41. Repealing Clause. - All laws, decrees, executive organized and unorganized, and promote full employment and
orders, rules and regulations, or parts thereof inconsistent with the equality of employment opportunities for all. Towards this end,
provisions of this Act are hereby repealed or modified accordingly. the State shall provide adequate and timely social, economic and
legal services to Filipino migrant workers.
Sec. 42. Separability Clause. - If, for any reason, any section (c) While recognizing the significant contribution of Filipino migrant
or provision of this Act is held unconstitutional or invalid, the other workers to the national economy through their foreign exchange
sections or provisions hereof shall not be affected thereby. remittances, the State does not promote overseas employment
as a means to sustain economic growth and achieve national
Sec. 43. Effectivity Clause. - This Act shall take effect after development. The existence of the overseas employment
fifteen (15) days from its publication in the Official Gazette or in at program rests solely on the assurance that the dignity and
least two (2) national newspapers of general circulation whichever fundamental human rights and freedoms of the Filipino citizen
comes earlier. shall not, at any time, be compromised or violated. The State,
therefore, shall continuously create local employment
Approved: June 7, 1995 opportunities and promote the equitable distribution of wealth
OMNIBUS RULES IMPLEMENTING RA 8042 and the benefits of development.
(d) The State affirms the fundamental equality before the law of
women and men and the significant role of women in nation-

Atty. Marlon Manuel
building. Recognizing the contribution of women migrant workers (c) Overseas Filipinos refers to migrant, workers, other Filipino
and their particular vulnerabilities, the State shall apply gender nationals and their dependents abroad.
sensitive criteria in the formulation and implementation of (d) Document migrant Workers refers to:
policies and programs affecting migrant workers and the
composition of bodies tasked for the welfare of migrant workers. (1) those who possess valid passports and visas or permits to
stay in the host country and whose contracts of
(e) Free access to the courts and quasi-judicial bodies and adequate employment have been processed by the POEA if required
legal assistance shall not be denied to any person by reason of by law or regulation; or
poverty. In this regard, it is imperative that an effective (2) those registered by the Migrant Workers and Other
mechanism be instituted to ensure that the rights and interest of Overseas Filipinos Resource Center or by the Embassy.
distressed overseas Filipinos, in general, and Filipino migrant
workers, in particular, documented or undocumented, are (e) Undocumented Migrant Workers refers to those who do not fall
adequately protected and safeguarded. under paragraph (d) herein.
(f) The right of Filipino migrant workers and all overseas Filipinos to (f) Gender Sensitivity means cognizance of the inequalities and
participate in the democratic decision-making process of the inequalities prevalent in society between women and men and a
State and to be presented in institutions relevant to overseas commitment to address issues with concern for the respective
employment is recognized and guarantee. interest of the sexes.
(g) The State recognizes that the ultimate protection to all migrant (g) Non-Government Organizations (NGOs) refers of non-
workers is the possession of skills. governmental organizations which are duly registered with
appropriate Philippine government agencies.
(h) Non-governmental organizations, duly recognized as legitimate,
are partners of the State in the protection of Filipino migrant (h) Skilled Workers refers to those who have obtained an
workers and in the promotion of their welfare. The State shall academic degree or sufficient experience in the job for which
cooperate with them in the spirit of trust and mutual respect. they are applying, as may be determined by the Secretary.
(i) Underage Migrant Workers refers to those who are below 18
II. DEFINITION OF TERMS years or below the minimum age requirement for overseas
employment as determined by the Secretary.
Section 2. Definitions. (j) Employment Agency refers to ant person, partnership or
(a) Migrant worker refers to a person who is to be engaged, is corporation duly licensed by the Secretary to engage inn the
engaged or has been engaged in a remunerated activity in a recruitment and placement of workers for overseas employment
State of which he or she is not a legal resident; to be used for a fee which is charged, directly or indirectly, from the workers
interchangeably with Overseas Filipino Workers; or employers or both.
(b) Legal Resident means a person who has obtained permanent (k) Manning Agency refers to any person, partnership or
residency status in accordance with the law of the host country. corporation duly licensed by the Secretary to engage in the

Atty. Marlon Manuel
recruitment and placement of seafarers for vessels plying (a) The country has existing labor and social laws protecting the
international waters and for related maritime activities. rights of migrant workers in substantial conformity with UN
(l) Service Contractor refers to any person, partnership or Conventions;
corporation duly licensed by the secretary to recruit workers for (b) The country is a signatory to UN multilateral conventions,
its accredited projects or contracts overseas. declaration or resolutions relating to the protection of migrant
(m) Labor Code refers to Presidential Decree No. 442, as workers;
amended. (c) The country has concluded bilateral agreement or arrangement
(n) Secretary refers to the Secretary of Labor and Employment. with the Philippine Government on the protection of the rights of
Overseas Filipino Workers; and
(o) Act refers to the Migrant Workers and Overseas Filipinos Act
of 1995, to be used interchangeably with the R.A. 8042. (d) The host country is taking positive, concrete measures to protect
the rights of migrant workers consistent with relevant UN
(p) DOLE refers to the Department of Labor and Employment. Conventions.
(q) POEA refers to, the Philippines Overseas employment The POEA shall process overseas employment contracts only for
Administration. countries meeting any of the above criteria, as determined by the
(r) OWWA refers to the Overseas Workers Welfare Administration. Secretary.
(s) NLRC refers to the national Labor Relations Commission.
Section 4. Deployment of Skilled Workers As soon as
(t) BLE refers to the Bureau of Local Employment. adequate mechanisms for determination of skills are in place and
(u) TESDA refers to the Technical Education and Skills consistent with national interest, the Secretary shall allow the
Development Authority. deployment only of skilled Filipino workers.
(v) DFA refers to the Department of Foreign Affairs.
Section 5. Ban on Deployment. Not with standing the
(w) DOJ refers to the Department of Justice. provisions of Sections 3 and 4 of these Rules, the Secretary, in pursuit
(x) DOST refers to the Department of Science and Technology. of the national interest or when public welfare so requires, may, at any
time, terminate or impose ban on the deployment of migrant workers.
III. DEPLOYMENT
Section 6. Travel Advisory The POEA shall publish, at least
Section 3. Guarantee of Migrant Workers Rights The once a month, a Travel Advisory in a newspapers of general
Secretary shall deploy or allow the deployment of Filipino migrant circulation. The Basis of this shall be the travel advisories from the
workers only in countries where their rights are protected, recognizing DFA relative to labor and employment conditions, migration realities
any of the following as a guarantee for the protection of the rights of and other facts, as well as a adherence of particular countries to
migrant workers: international standards on human and workers rights which will
adequately individuals into making informed and intelligent decisions
about overseas employment

Atty. Marlon Manuel
The POEA may undertake other programs or resort to other The migrant workers are exempt from the payment of travel
modes of information and dissemination campaign, such as the tax and airport fee upon proper showing of Overseas Employment
conduct of nationwide, comprehensive and sustainable Pre- Certificate issued by the POEA.
Employment Orientation Seminars.
VI. ILLEGAL RECRUITMENT
IV. REGULATION OF PRIVATE SECTOR PARTICIPATION
Section 9. Definition. For purpose of the Act, illegal
Section 7. Role of POEA. Subject deregulation and phase- recruitment shall mean any act of canvassing, enlisting, contracting,
out as provided under Section 29 and 30 of the Act, the POEA shall transporting, utilizing, hiring, or procuring workers and includes
continue to regulate private sector participation in the recruitment and referring, contract services, promising or advertising for employment
overseas placement of workers through its licensing and registration abroad, whether for profit or not, when undertaken by a non-licensee
system pursuant to its Rules and Regulations on Overseas or non-holder of authority contemplated under Article 13 (f) of the
Employment. Labor Code of the Philippines: Provided, That any such non-licensee or
POEA shall formulate and implement, in coordination with non-holder-holder who, in any manner, offers or promises for fee
appropriate entities concerned when necessary, a system for employment abroad to two or more shall be deemed so engaged.
promoting and monitoring the overseas employment of Filipino It shall like wise include the following acts committed by any
workers taking into consideration their welfare and the domestic person whether or not a holder of a license or authority:
manpower requirements. (a) To charge or accept directly or indirectly any amount greater
The POEA shall come up with a package of incentives for than that specified in the schedule of allowable fees prescribed
deserving manning agencies and service contractors, along with the by the Secretary, or to make a worker per recruiter or its agents
policy that the deployment of workers by such entries shall be any amount greater than that actually loaned or advanced to
encouraged. him;
(b) To furnish or publish any false notice or information or document
V. FEES AND OTHER COSTS in relation to recruitment or employment;
Section 8. Government Fees and Administrative costs. All (c) To give any false notice, testimony, information or document or
fees for services being charged by any government office on migrant commit any act of misrepresentation for the purpose of securing
workers as of 7 June 1995 shall not be increased. All other services a license or authority under the Labor Code;
rendered by the DOLE and other government agencies in connection (d) To induce or attempt to induce a worker already employed to
with the recruitment, introduction and placement of and assistance to quit his employment in order to offer him another unless the
migrant workers shall be rendered free. The administrative cost transfer is designed to liberate a worker from oppressive terms
thereof shall not be become by the worker. and conditions of employment;

Atty. Marlon Manuel
(e) To influence or attempt to influence any person or entity not to
employ any worker who has not applied for employment through Section 10. Crime Involving Economic Sabotage Illegal
his agency; recruitment when committed by a syndicate or in large scale shall be
(f) To engage in the recruitment or placement of workers in jobs considered an offense involving economic sabotage. Illegal recruitment
harmful to public health or morality or to the dignity of the is deemed committed by a syndicate if carried out by a group of three
Republic of the Philippines as may be prohibited by law or duly (3) or more persons conspiring or confederating with one another, It is
constituted authority; deemed committed in large scale if committed against three (3) or
more persons individually or as a group.
(g) To obstruct or attempt to obstruct inspection by the Secretary or
by his/her duly authorized representative; Section 11. Persons Responsible The person criminally
(h) to fail to submit reports on the status of employment, placement liable for the above offenses are the principals, accomplices and
vacancies, remittances of foreign exchange earnings, separation accessories. In case of juridical persons, the officers having control,
from jobs, departures and such other matters or information as management or direction of their business shall be liable.
may be required by the Secretary under penalty of law;
(i) To substitute or latter to the prejudice of the worker, Section 12. Independent Administrator Action. The
employment contracts approved and verified by the DOLE from, institution of the criminal action is without prejudice to any
the time of actual signing thereof by the parties up to and administrative action against the licensee or holder of authority
including the period of the expirations of the same without the cognizable by the POEA which could proceed independently of the
approval of the DOLE; criminal action.
(j) For an officer or agent of a recruitment or placement agency to VII. PROHIBITION ON GOVERNMENT PERSONNEL
become officer or member of the Board of any corporation
engaged in travel agency or to be engaged directly or indirectly Section 13. Disqualification. The following personnel shall
in the management of a travel agency; be prohibited from engaging directly or indirectly in the business or
(k) To withhold or deny travel documents from applicant workers recruitment of migrant workers:
before departure for monetary or financial considerations other (a) Any official or employee of the DOLE , POEA, OWWA, DFA, DOJ
than those authorized under the Labor Code and its and other government agencies involved in the implementation
implementing rules and regulations; of this Act, regardless of the status of his/her employment; and
(l) To fail to actually deploy without valid reason as determined by (b) Any of his/her relatives within the fourth civil degree of
the DOLE; consanguinity or affinity.
(m) To fail to reimburse expenses incurred by the worker in Any government official or employee found to be violating this
connection with his documentation and processing for purposes Section shall be charged administratively: according to Civil Service
of deployment, in case where the deployment does not actually Rules and Regulations without prejudice to criminal prosecution.
take place without the workers fault.

Atty. Marlon Manuel
The government agency concerned shall monitor and initiate, Section 17. Action on the Complaint/Report. Where the
upon its initiative or upon the petition of any private individual, action complaint/report alleges that illegal recruitment activities are on-
against erring officials and employees, and/or their relatives. going, surveillance shall be conducted and if such activities are
confirmed, issuance of closure order may be recommended to the
VIII. ANTI-ILLEGAL RECRUITMENT PROGRAMS POEA Administrator through the Director of the Licensing and
Regulation Office (Director-LRO). If sufficient basis for criminal action
Section 14. POEA Programs. The POEA shall adopt policies is found, the case shall be immediately forwarded to the appropriate
and procedures, prepare and implement programs the eradication of office for such action.
illegal recruitment activities such as, but not limited to the following:
(a) Providing legal assistance to victims of illegal recruitment and Section 18. Surveillance The POEA and/or designated
related cases which are administrative or criminal in nature; official in the DOLE regional offices may on his own conduct initiative
conduct surveillance on the alleged illegal recruitment activities.
(b) Prosecution of illegal recruiter;
Within two (2) days from the termination of surveillance, a
(c) Special operations such as surveillance of persons and entities report supported by an affidavit, shall be submitted to the Director-
suspected to be engaged in illegal recruitments; and LRO or the Regional Director concerned, as the case may be.
(d) Information and education campaign.
Whenever necessary, the POEA shall coordinate with other Section 19. Issuance of Closure Order. The Secretary or
appropriate entities in the implementing of said programs. the POEA Administrator of the DOLE Regional Director of the
appropriate regional office outside The National Capital Region, or their
Section 15. Legal Assistance. The POEA shall provide free duly authorized representatives, may conduct an ex parte preliminary
legal service to victims of illegal recruitment and related cases which examination to determine whether the activities of a non-licensee
are administrative or criminal in nature in the form of legal advice constitute a danger to national security and public order or will lead to
assistance in the preparation of complaints and supporting documents, further exploration of job seekers. For this purpose, the Secretary, the
institution of criminal actions and whatever necessary, provide POEA Administrator or the Regional Director concerned or their duly
counselling assistance during preliminary investigation and hearings. authorized representatives, may examine personally the complainants
and/or witness in the form of searching questions and answers and
Section 16. Receiving of Complaints for Illegal Recruitment. shall take their testimony under oath. The testimony of the
Victims of illegal recruitment and related cases which are complainants and/or witnesses shall be reduced in writing and signed
administrative or criminal in nature may file with the POEA a report of by them.
complaint in writing and under oath for assistance purposes. If upon them preliminary examination or surveillance, the
In regions outside the National Capital Region , complaints and Secretary, POEA Administrator or DOLE Regional Director is satisfied
reports involving illegal recruitment may be filed with the appropriate that such danger or exploitation exists, a written order may be issued
regional office of the POEA or DOLE. for the closure of the establishment being used for illegal recruitment
activity.

Atty. Marlon Manuel
In case of a business establishment whose license or permit to to lift which does not comform with the requirements herein set forth
operate a business was issued by the local government, the Secretary, shall be denied outrightly.
the POEA Administrator or the Regional Director concerned shall
likewise recommend to the granting authority the immediate Section 24. Who May File. The motion to lift a closure order
cancellation/revocation of the license or permit to operate its business. may be filed only by the following:
(a) The owner of the buildings or his duly authorized
Section 20. Implementation of Closure Order. Closure representatives;
order shall be served upon the offender or the person in charge of the
establishment subject thereof. The closure shall be affected by sealing (b) The building administrator or his duly authorized representative;
the establishment and posting as notice of such closure in bold letters (c) The person or entity against whom the closure order was issued
at a conspicuous place in the premises of the establishment. Whether and implemented or the duly authorized representative; or
necessary, the assistance and support of the appropriate law (d) Any other person or entity legitimately operating within the
enforcement agencies may be requested for this purpose. premises closed/padlocked whose operations/activities are
distinct from the recruitment activities of the person/entity
Section 21. Report on Implementation. A report on the subject of the closure order.
implementation of the closure order executed under oath, stating the
details of the proceedings undertaken shall be submitted to the Section 25. Grounds for Lifting/Re-Operating. Lifting of the
Director-LRO or the Regional Director concerned, as the case may be, closure order and/or re-opening of the office closed or padlocked may
within two (2) days from the date of implementation. be granted on any of the following grounds;
Section 22. Institution of Criminal Action. The Secretary, (a) That is not the subject of the closure order;
the POEA Administrator or the Regional Director concerned, or their (b) That the contract of lease with the owner of the building or the
duly authorized representatives, or any aggrieved person, may initiate building administrator bas already been cancelled or terminated.
the corresponding criminal action with the appropriate office. The request to re-open shall be duly supported by an affidavit of
Where a complaint is filed with the a POEA and the same is undertaking either of the owner of the building or the building
proper for preliminary investigation, it shall file the corresponding administrator that the same will not be leased rented to any
complaint with the appropriate officer, with the supporting documents. person/entity for recruitment purposes without the necessary
license from the POEA;
Section 23. Motion to Lift A Closure Order. A motion to lift (c) That the office is shared by a person/entity not involved in illegal
a closure order which has already been implemented may be recruitment activities, whether directly or indirectly;
entertained only when filed with the Licensing and Regulations Office (d) Any other ground that the POEA may consider as valid and
(LRO) within ten (10) calendar days from the date of implementation meritorious.
thereof. The Motion shall clearly state the grounds upon which it is
based, attaching thereto the documents in support thereof. A motion

Atty. Marlon Manuel
Lifting of a closure order is without prejudice to the filing of a
criminal complaint with the appropriate office against the person X. MIGRANT WORKERS LOAN GUARANTEE FUND
alleged to have conducted illegal recruitment activities.
Section 30. Definitions.
Section 26. Appeal. The order of the POEA Administrator (a) Pre-Departure Loans. refers to loans granted to departing
denying the motion to lift may be appealed to the Secretary within ten migrant workers covered by new contracts to satisfy their pre-
(10) days from service or receipt thereof. departure requirements such as payments for
placement/processing fees, airplane fare, subsistence allowance,
Section 27. Re-Padlocking of Office. Where a re-opened cost of clothing and pocket money.
office was subsequently confirmed to be used for illegal recruitment
activities, a new closure order shall be issued which shall not be (b) Family Assistance Loans. refers to loans granted to currently
subject to a motion to lift. employed migrant workers or their eligible dependents/families
in the Philippines to tide them over during emergency situations.
IX. PRE-EMPLOYMENT AND DISCIPLINARY ACTION CASES (c) Guarantee Agreement. refers to a contract between the
participating financial institution and OWWA whereby the latter
Section 28. Jurisdiction of the POEA. The POEA shall pledges to pay a loan obtained by a migrant worker from the
exercise original and exclusive jurisdiction to hear and decide: former in the case the worker defaults.
(a) all cases, which are administrative in character, involving or (d) GFIs. refers to government financial institutions.
arising out of violations of rules and regulations relating to
licensing and registration of recruitment and employment Section 31. Loan Guarantee Fund. The Migrant Workers
agencies or entities; and Loan Guarantee Fund is hereby established:
(b) disciplinary actions cases and other cases, which are (a) to prevent any recruiter from taking advantage of workers
administrative in character, involving employers, principals, seeking employment abroad by expanding the grant of Pre-
contracting partners and Filipino migrant workers. Departure and Family Assistance Loans to covered migrant
workers;
Section 29. Venue. The cases mentioned in Section 27(a) (b) to established and operate a guarantee system in order to
of this Rule, may be filed with the POEA Adjudication Office or the provide guarantee cover on the pre-departure and family
DOLE/POEA regional office of the place where the complainant applied assistance loans of migrant workers who lack or have insufficient
or was recruited, at the option of the complainant. The office with collaterals or securities; and
which with which the complaint was first filed shall take cognizance of
the case. (c) to ensure the participation of GFIs in extending loan assistance to
needy migrant workers who are to be engaged for a remunerated
Disciplinary action cases and other special cases, as mentioned activity abroad.
in the preceding Section, shall be filed with the POEA Adjudication
Office.

Atty. Marlon Manuel
Section 32. Coverage and Scope. All departing migrant migrant workers and/or their immediate descendants who intend to
workers who need financial assistance to pay or satisfy their pre- pursue course or training primarily in the field of science and
departure expenses may avail of the Pre-Departure Loans. technology, as defined by the DOST.
Currently employed migrant workers or their eligible
dependents who need emergency financing assistance may avail of the Section 37. Sources of Fund. The initial seed Fund of Two
Family Assistance Loan. hundred million pesos (P200,000,00.00) shall be constituted from the
following sources:
Section 33. Administration of the Fund. Pursuant to Section (a) Fifty million pesos (P50,000,000.00) from the unexpended
21 of the Act, the amount of One hundred million pesos Countrywide Development Fund for 1995 in equal sharing by all
(P100,000,000.00) from the Capital Funds of OWWA shall constitute Members of Congress; and
the Migrant Workers Loan Guarantee Fund. The Fund, which shall be (b) The remaining One hundred fifty million pesos
administered by the OWWA, shall be used exclusively to guarantee the (P150,000,000.00) shall be funded from the proceeds of Lotto
repayment of pre-Departure and Family Assistance Loans granted by draws.
participating GFIs.
All existing revolving existing revolving funds earmarked for the Section 38. Creations of the Scholarship Fund Committee.
Pre-Departure and Family Assistance Loans shall revert back to There is hereby created a Scholarship Fund to be composed of
OWWAs Capital Fund. representatives from the DOLE, DOST, POEA, OWWA, TESDA and two
(2) representatives of migrant workers to be appointed by the
Section 34. Financing Scheme. The OWWA shall initiate Secretary.
arrangements with GFIs to implement mutually agreed financing
schemes, that will expand the Pre-Departure and Family Assistance Section 39. Functions of the Scholarship Fund Committee.
Loans. (a) To set the coverage, criteria and standards of admission to the
Scholarship Program;
Section 35. Guarantee Agreement. No loan shall be
considered covered by a guarantee unless a Guarantee Agreement has (b) To determine the amount of availment;
been prepared and approved by both the participating financial (c) To monitor and evaluate the program;
institution and the OWWA. (d) To identify/accredit training and testing institutions; and
XI. CONGRESSIONAL MIGRANT WORKERS SCHOLARSHIP (e) To perform such other functions necessary to attain the purpose
PROGRAM of the Fund.
Section 36. Establishment of the Congressional Migrant Section 40. Implementing Agency. The OWWA shall be the
Workers Scholarship Fund. There is hereby created a Congressional Secretariat of the Scholarship Fund Committee. As such, it shall
Migrant Workers Scholarship Fund which shall benefit deserving administer the Scholarship Program, in coordination with the DOST.

Atty. Marlon Manuel
XII. MIGRANT WORKERS AND OTHER OVERSEAS FILIPINOS (j) Seeing to it that labor and social welfare laws in the host country
RESOURCE CENTER are fairly applied to migrant workers and other overseas
Filipinos; and
Section 41. Establishment of Filipinos Resource Center. A (k) Conciliation of dispute arising from employer-employee
Migrant Workers and Overseas Filipinos Resource Center (Filipinos relationship.
Resource Center) shall be established in countries where there are at
least 20,000 migrant workers or when necessary. Section 43. Personnel. Each Filipinos Resource Center shall
All Filipinos Resource Centers shall be deemed part of the be staffed by a minimum of four (4) personnel composed of the
premises of the Philippine Embassy or Mission subject to the laws of following:
the host country. (a) Labor Attache (1)
Section 42. Services. The Filipinos Resource Center shall (b) Foreign Service Officer or Staff from DFA (1)
provide the following services: (c) Welfare Officer (1)
(a) Counseling and legal assistance; (d) Coordinating Officer (1)
(b) Welfare assistance including the procurement of medical and An Interpreter may be retained when necessary (local hire).
hospitalization services. In countries deemed highly problematic, a lawyer, a social
(c) Information, advisory and programs to promote social integration worker and other personnel may be deployed by the concerned
such as post-arrival orientation, settlement and community government agency upon the recommendation of the Chief of Mission.
networking services and activities for social interaction;
(d) Registration of undocumented workers; Section 44. Administration. The Labor Attache shall
manage the operation of the Filipino Resource Center and shall keep
(c) Implementation of the Voluntary Membership Program of OWWA; the Chief of Mission informed and updated on all matters affecting it.
(f) Human resource development, such as training and skills
upgrading; Section 45. Round-the Clock operations. The Filipinos
(g) Gender-sensitive programs and activities to assist particular Resource Center shall operate on a 24-hour basis including Saturdays,
needs of migrant workers; Sundays and holidays. The Filipinos Resource Center shall link up with
its counterpart 24-hour Information and Assistance Center at the DFA
(h) Orientation program for returning workers and other overseas to ensure a continuous network and coordinative mechanism.
Filipinos;
(i) Monitoring of daily situations, circumstances and activities Section 46. Budget. The costs of establishment,
affecting migrant workers and other overseas Filipinos; maintenance and operation of Filipinos Resource Center, including the
costs of services and programs not specially funded the Act, shall be
source from the general Appropriations Act shall be included in the
annual budget of DOLE.

Atty. Marlon Manuel
However, the salaries and allowances of overseas personnel Section 50. Repatriation Procedure. When a need for
shall be source from their respective agencys budget. repatriation arises and the foreign employer fails to provide for its
cost, the responsible personnel at site shall simultaneously notify
XIII. ENFORCEMENT OF CONTRACTUAL OBLIGATIONS OWWA and the POEA of such need. The POEA shall notify the agency
concerned of the need for repatriation. The agency shall provide the
Section 47. Role of OWWA. The welfare Officers, or in his plane ticket or the prepaid ticket advise (PTA) to the Filipinos Resource
absence, the Coordinating Officer Resources Center shall make proper Center or to the appropriate Philippine Embassy; and notify POEA of
representations with the employer/principal and/or agency as the case such compliance. The POEA shall inform OWWA of the agency.
may be, through conciliation meetings or conferences for the purpose
of enforcing contractual obligations concerning migrant workers. For Section 51. Action an Non-Compliance. If the employment
this purpose, the officer may enlist the assistance of the OWWA Home agency fails to provide the ticket or PTA within 48 hours from receipt
Office. of the notice, the POEA shall suspend the license of the agency or
impose such sanctions as it may deem necessary. Upon notice from
XIV. REPATRIATION OF FILIPINO MIGRANT WORKERS the POEA, OWWA shall advance the costs of repatriation with
resources to the agency or principal. The administrative sanctions shall
Section 48. Primary for Repatriation. The repatriation of not be lifted until the agency reimburses the OWWA of the cost of
the worker, or his/her remains; and transport of his/her personal repatriation with legal interest.
effects shall be the primary responsibility of the principal or agency
which recruited or deployed him/her abroad. All costs attendant Section 52. Emergency Repatriation. The OWWA., in
thereto shall be borne by the principal or the agency concerned. coordination with the DFA, and in appropriate situations with
international agencies, shall undertake the repatriation of workers in
Section 49. Repatriation of Workers. The Primary case of war, epidemic, disaster or calamities, natural or man-made,
responsibility to repatriate entails the obligation on the part of the other similar events without prejudice to reimbursement by the
principal or agency to advance the cost of plane fare and to responsible principal or agency within sixty (60) days of notice.
immediately repatriate the worker should the need for it arise, without
a prior determination of the cause of the termination of the workers Section 53. Mandatory Repatriation of Underage Migrant
employment. However, after the worker has returned to the country, Workers. The responsible officer at the foreign service post shall
the principal or agency may recover the cost of repatriation from the immediately cause the repatriation of Filipino migrant workers. The
worker if the termination of employment was due solely to his/her costs of repatriation shall be the primary responsibility of the agency
fault. and/or principal.
Every contract for overseas employment shall provide for the
primary responsibility of agency to advance the cost of plane fare, and Section 54. Other Cases of Repatriation. Where the
the obligation of the worker to refund the cost thereof in case his/her principal or agency of the worker cannot be identified, cannot be
fault is determined by the Labor Arbiter. located or had ceased operations, and the worker is in need and

Atty. Marlon Manuel
without means, the OWWA personnel at jobsite, in coordination with be incorporated in the contract for overseas employment and shall be
the DFA, shall cause the repatriation. a condition be a condition precedent for its approval. The
performances bond to be filed by the requirement/placement agency,
Section 55. Chargeability of Costs. All costs attendant to as provided by law, shall be answerable for all money claims or
repatriation borne by the OWWA are chargeable to the Emergency damages that may be awarded to the workers.
Repatriation Fund provided in the Act, without prejudice to the OWWA If the recruitment/placement agency is a juridical being, the
requiring the agency/employer or the worker to reimburse the cost of corporate officers and directors and partners as the case may be, shall
repatriation, as the case may be. themselves be jointly and solidarily liable with the corporation or
partnership for the aforesaid claims and damages.
Section 56. Prohibition on Bonds and Deposits. In no case
shall an employment agency require any bond or cash deposits from Such liabilities shall continue during the entire period or
the worker of guarantee performance under the contract or his/her duration of the employment contract and shall contract and shall not
repatriation. be affected by any substitution, amendment or modification made
locally or a foreign country of the said contract.
Section 57. Abolition of Mandatory Repatriation Bond.
Pursuant to Section 36 of R.A. 8042, the mandatory repatriation bond Section 61. Compromise Agreement. Any compromise,
is abolished as of 7 June 1995. amicable settlement or voluntary agreement on money claims inclusive
of damages under this Rule shall be paid within four (4) months from
XV. MONEY CLAIMS the approval of the settlement by the appropriate authority.
Section 58. Jurisdiction of the Labor Arbiters. The Labor XVI. RE-PLACEMENT AND MONITORING CENTER
Arbiters of the NLRC shall have the original and exclusive jurisdiction
to hear and decide all claims arising out of employer-employee Section 62. Re-Placement and Monitoring center. A Re-
relationship or by virtue of any law or contract involving Filipino Placement and Monitoring Center (Center) is hereby created in the
workers for overseas deployment including claims for actual, moral, DOLE for returning Filipino migrant workers which shall:
exemplary and other forms of damages, subject to the rules and (a) provide a mechanism for the reintegration into the Philippine
procedures of the NLRC. society;
(b) serve as a promotion houses for their local employment; and
Section 59. Pending Cases. All unresolved money claims
pending at POEA as of 15 July 1995 shall be referred to NLRC for (c) tap their skills and potentials for national development.
disposition. The Center shall be under the administrative supervision and
control of the Secretary.
Section 60. Solidary Liability. The liability of the The Center, while serving the needs of returning migrant
principal/employer and the requirement/placement agency on any and workers, shall likewise provide support to related programs in the
all claims under this Rule shall be joint and solidary. This liability shall Filipinos Resource Centers.

Atty. Marlon Manuel
science and technology, to participate in and contribute to
Section 63. Secretariat. A Secretariat shall be created to be national development.
composed of technical staff from, but not limited to, the OWWA, POEA,
TESDA and BLE; and shall be headed by a Program Manager to be Section 66. Funding for the Center.
designated by the Secretary. The Secretariat shall be the coordinating (a) Funds necessary for the establishment and initial implementation
and monitoring body of the Center. of them programs or services of the Center shall be sourced from
of the participating agencies as may be determined by the
Section 64. Participation of Government, Private Sector and Secretary.
NGOs. The DOLE, in pursuit of the objectives and functions of the
Center, may request the participation of other government agencies, (b) Funds for the operation of the Center shall come from the
the private sector and non-government organizations. Each General Appropriations Act and shall be integrated into the
participating entity shall identify and development programs or annual budget of the DOLE.
services related to reintegration for the attainment of the Centers
objectives. A Memorandum of Agreement (MOA) shall be entered into XVII. MIGRANT WORKERS DAY
by the participating entries to define their respective roles.
Section 67. Commemoration. The DOLE shall lead and
Section 65. Functions of the Center. The Center shall enlist the cooperation of other government agencies in the
provided the following services: commemoration of a Migrant Workers; in of every year.
(a) Develop livelihood programs and projects for returning Filipino XVIII.MISCELLANEOUS PROVISIONS
migrant workers in coordination with the private sector;
(b) Coordinate with appropriate private and government agencies in Section 68. Additional Members of the POEA AND OWWA
the promotions, development, re-placement and the full Boards. The POEA and OWWA Boards shall have at least (3)
utilization of the potentials of returning migrant workers; additional members each to come from the women, sea-based sectors,
(c) Institute, in cooperation with other government agencies and land-based sectors, and to be appointed by the President.
concerned, a computer-based information system on skilled
Filipino migrant workers which shall accessible to all local Section 69. Reports to Congress. The DOLE shall submit to
recruitment agencies and employers, both public and private; Congress the required reports under Section 33 of the Act on or before
the last day of the Quarter following the reporting period.
(d) Provide a periodic study and assessment of Job opportunities for
returning Filipino migrant workers; Section 70. Repealing Clause. All Department Orders,
(e) Develop and implement other appropriate programs to promote Circulars and Regulations inconsistent with these Rules and
the welfare of returning Filipino migrant workers; and Regulations are hereby repealed or amended accordingly.
(f) In coordination with DOST, provide incentives for professionals
and other highly-skilled Filipinos abroad, especially in the field of

Atty. Marlon Manuel
Section 71. Effectivity. The provisions of these Rules and c. Agency A private employment or a manning agency as defined
Regulations shall take effect fifteen days (15) after publication in two herein.
(2) newspapers of general circulation. d. Allotee any person named or designated by the overseas
contract workers as the recipient of his remittance to the
Done in the City of Tagaytay, for Manila, this 5th day of Philippines.
October 1995.
e. Balik-Mangagawa (Vacationing Worker) a landbased contract
1991 POEA RULES: BOOK I, RULES I - II worker who is on a vacation or on an emergency leave and who
is returning to the same worksite to resume his employment.
RULE I f. Beneficiary the person/s to whom compensation benefits due
GENERAL STATEMENT OF POLICY under an overseas employment contract are payable by operation
of law or those to whom proceeds of a life or accident insurance
It shall be the policy of the Administration to: are likewise payable.
a. Promote and develop overseas employment opportunities in g. Center the POEA Regional Center in Cebu and such other
cooperation with relevant government institutions and the private regional centers as may hereinafter be established.
sector; h. Code the Labor Code of the Philippines as amended.
b. Establish the environment conducive to the continued operations i. Collective Bargaining Agreement the negotiated contract
of legitimate, responsible and professional private agencies; between a legitimate labor organization and the employer
c. Afford protection to Filipino workers and their families, promote concerning wages, hours of work and all other terms and
their interests and safeguard their welfare; and conditions of employment in a bargaining unit, including
mandatory provisions for grievance and arbitration machineries.
d. Develop and implement programs for the effective monitoring of
returning contract workers promoting their re-training and re- j. Contract Worker any person working or who has worked
employment of their smooth re-integration into the mainstream overseas under a valid employment contact.
of the national economy. k. Department the Department of Labor and Employment (DOLE).
l. Directorate the executive body of the Administration composed
RULE II
of its Administrator, Deputy Administrators and Directors as
DEFINITION OF TERMS
defined herein.
For purposes of these Rules, the following terms are defined as m. Director-LRO the Director of the Licensing and Regulation
follows: Office.
a. Administration the Philippine Overseas Employment n. Director-PSO the Director of the Pre-Employment Services
Administration (POEA). Office.
b. Administrator the Administrator of the POEA. o. Director-AO the Director of the Adjudication Office.

Atty. Marlon Manuel
p. Director WEO the Director of the Welfare and Employment aa. Non-Licensee any person, partnership or corporation who has
Office. not been issued a valid license to engage in recruitment and
q. Employer any person, partnership or corporation, whether local placement, or whose license has been suspended, revoked or
or foreign, directly engaging the services of Filipino workers cancelled.
overseas. bb. One-Stop Processing Center an inter-agency servicing body
r. Foreign Exchange (Forex) Earnings the earnings in terms of US designed to facilitate the documentation of contract workers.
dollars (US$) or any other acceptable foreign currency of cc. Overseas Employment employment of a worker outside the
overseas workers and agencies. Philippines including employment on board vessels plying
s. Governing Board the policy-making body of the Administration. international waters, covered by a valid employment contract.
t. Government-to-Government Hiring recruitment and placement dd. Philippine Shipping Company any person, partnership or
of Filipino workers by foreign government ministries or corporation registered under the laws of the Philippines and duly
instrumentalities through the Administration. accredited to engage in overseas shipping activities by the
Maritime Industry Authority (MARINA).
u. Job Fair an activity conducted outside of an agencys authorized
business address whereby applicants are oriented on ee. Philippine Registered Vessel vessels duly registered in the
employment opportunities and benefits provided by foreign Philippines.
principals and employers. ff. Placement Fee the amount charged by a private employment
v. License a document issued by the Secretary authorizing a agency from a worker for its services in securing employment.
person, partnership or corporation to operate a private gg. Principal any foreign person, partnership or corporation hiring
employment agency or a manning agency. Filipino workers through an agency.
w. Manning Agency any person, partnership or corporation duly hh. Private Employment Agency any person, partnership or
licensed by the Secretary to recruit seafarers for vessel plying corporation engaged in the recruitment and placement of workers
international waters and for related maritime activities. for a fee which is charged, directly or indirectly, from the workers
x. Manning Agreement an agreement entered into by and or employees or both.
between the principal and the licensed manning agency defining ii. Recruitment Agreement the agreement entered into by and
the responsibilities of both parties with respect to the between the foreign principal and the licensed private
employment of ship personnel for their enrolled vessels. employment agency defining the responsibilities of both parties
y. Commission the National Labor Relation Commission. with respect to the employment of workers for their overseas
projects.
z. Name Hire a worker who is able to secure employment
overseas on his own without the assistance or participation of jj. Recruitment and Placement any act of canvassing, enlisting,
any agency. contracting, transporting, utilizing, hiring or procuring workers
and includes referrals, contract services, promising or advertising
for employment, locally or abroad, whether for profit or not;

Atty. Marlon Manuel
provided, that any person or entity which, in any manner, offers CASES
or promises for a fee employment to two or more persons shall
be deemed engaged in recruitment and placement. People vs. Senoron, 267 SCRA 278
kk. Regional Director the head of the Regional Offices of the Ilano recruited Virtucio and his companions to work abroad. They were given job
Department. application forms, which they filled up as told. Senoron failed to send Virtucio and
ll. Regional Extension Unit the field offices of the Administration in his companions abroad. Thus, a case for illegal recruitment was filed against her.
designated regions in the Philippines. Senoron alleges that there is nothing on record, which says that the placement fees
received by Ilano from them were turned over to her.
mm. Regional labor Center (RLC) the regional field office of the
Administration. Issue: Whether Senoron was guilty of illegal recruitment.
nn. Regional Offices the regional office of the Department of Labor Held: Yes. Illegal recruitment is defined under Article 38(a), of the Labor Code,
and Employment. as amended, as (a)ny recruitment activities, including the prohibited practices
enumerated under Article 34 of this Code, to be undertaken by non-licensees or
oo. Remittance the amount or portion of the foreign exchange
nonholders of authority. Article 13 (b) of the Code defines recruitment and
earnings sent by the worker to the Philippines.
placement as (A)ny act of canvassing, enlisting, contracting, transporting,
pp. Secretary the Secretary of Labor and Employment. utilizing, hiring or producing workers and includes referrals, contract services,
qq. Service Fee the amount charged by a licensee from its foreign promising or advertising for employment, locally or abroad, whether for profit or
employer-principal as payment for actual services rendered in not: Provided, that any person or entity which in any manner, offer or promises for
relation to the recruitment and employment of workers for said a fee employment to two or more persons shall be deemed engaged in recruitment
principal. and placement.
rr. Valid Employment Contract a written agreement entered into To prove illegal recruitment two elements must be shown, namely:
by and between the employer and/or the local agency and the
1. The person charged with the crime must have undertaken recruitment
overseas contract worker containing the terms and conditions of
employment that are in consonance with the master employment activities, or any of the activities enumerated in Article 34 of the Labor Code,
contract as approved by the Administration. as amended; and
ss. Verification the action of labor attach or any other officer 2. Said person does not have a license or authority to do so.
designated by the Secretary of Labor and Employment in the Contrary to appellants mistaken notion, it is not the issuance or signing of
Philippine Embassy or Consulate, in reviewing employment receipts for the placement fees that makes a case for illegal recruitment, but rather
documents of Filipino nationals with the view to establish the the undertaking of recruitment activities without the necessary license or authority.
existence of the employing company, its ability to hire workers at
Senoron made a distinct impression that she had the ability to send
the prescribed rates, at desirable working conditions consistent
applicants to work abroad. She, however, does not possess any license or authority
with the standards prescribed by the Administration and terms
and conditions prevailing in the country of employment.
to recruit which fact was confirmed by the duly authenticated certification.

Atty. Marlon Manuel
Darvin vs. CA, 292 SCRA 534 on him for support, domestic helpers, persons in the personal service
Toledo claims that, Darvin told her that by giving P150,000.00, she could of another and workers who are paid by results as determined by the
immediately leave for the US without appearance before the US Embassy. Thus, Secretary of Labor in appropriate regulations.
she gave Darvin the amount. When after a week, there was no word from Darvin, As used herein, managerial employees refer to those whose
Toledo went to her residence to inquire about any development but could not find primary duty consists of the management of the establishment in
Darvin. Toledo then filed a complaint against Darvin. which they are employed or of a department or subdivision thereof,
Issue: Whether Darvin was guilty of illegal recruitment. and to other officers or members of the managerial staff.
Held: No. To uphold the conviction of accused-appellant, two elements need to Field personnel refer to non-agricultural employees who
be shown: regularly perform their duties away from the principal place of
business or branch office of the employer and whose actual hours of
1. The person charged with the crime must have undertaken recruitment work in the field cannot be determined with reasonable certainty.
activities; and
2. The said person does not have a license or authority to do so. OMNIBUS RULES, BOOK III
It is not disputed that Darvin does not have a license or authority to engage in
recruitment activities. RULE I
Hours of Work
To prove that she was engaged in recruitment activities as to commit the
crime of illegal recruitment, it must be shown that she gave Toledo the distinct SECTION 1. General Statement on Coverage. The provisions of
impression that she had the power or ability to send her abroad for work such that this Rule shall apply to all employees in all establishments and
the latter was convinced to part with her money in order to be so employed. There undertakings, whether operated for profit or not, except to those
is no sufficient evidence to prove that Darvin offered a job to Toledo. By specifically exempted under Section 2 hereof.
themselves, procuring a passport, airline tickets and foreign visa for another
individual, without more, can hardly qualify as recruitment activities. Aside from SECTION 2. Exemption. The provisions of this Rule shall not apply
the testimony of Toledo, there is nothing to show that Darvin engaged in to the following persons if they qualify for exemption under the
recruitment activities. conditions set forth herein:
(a) Government employees whether employed by the National
B. LABOR STANDARDS; COVERAGE Government or any of its political subdivision, including those
employed in government-owned and/or controlled corporations;
LABOR CODE (b) Managerial employees, if they meet all of the following
conditions:
Art. 82. Coverage. The provision of this Title shall apply to
employees in all establishments and undertakings, whether for profit (1) Their primary duty consists of the management of the
or not, but not to government employees, managerial employees, field establishment in which they are employed or of a
personnel, members of the family of the employer who are dependent department or sub-division thereof.

Atty. Marlon Manuel
(2) They customarily and regularly direct the work of two or work if their output rates are in accordance with the standards
more employees therein. prescribed under Section 8, Rule VII, Book Three of these
(3) They have the authority to hire or fire employees of lower regulations, or where such rates have been fixed by the
rank; or their suggestions and recommendations as to Secretary of Labor and Employment in accordance with the
hiring and firing and as to the promotion or any other aforesaid Section.
change of status of other employees, are given particular (f) Non-agricultural field personnel if they regularly perform their
weight. duties away from the principal or branch office or place of
(c) Officers or members of a managerial staff if they perform the business of the employer and whose actual hours of work in the
following duties and responsibilities: field cannot be determined with reasonable certainty.
(1) The primary duty consists of the performance of work

CASES
directly related to management policies of their employer;
(2) Customarily and regularly exercise discretion and Mercidar Fishing Corp. vs. NLRC, 297 SCRA 440
independent judgment; and A ships quartermaster for Mercidar complained that he was constructively
(3) (i) Regularly and directly assist a proprietor or a managerial dismissed when he was refused new assignments. He alleged that he was sick
employee whose primary duty consists of the management and has gone on leave without pay but that when he returned to work, he was
of the establishment in which he is employed or subdivision not reinstated. Mercidar alleges that it was the complainant who abandoned his
thereof; or (ii) execute under general supervision work work.
along specialized or technical lines requiring special
The labor arbiter ordered reinstatement and payment of incentive leave
training, experience, or knowledge; or (iii) execute, under
pay. Mercidar appealed to the NLRC saying that the complainant is not entitled
general supervision, special assignments and tasks; and
to service incentive leave pay because he is a field personnel thus not entitled to
(4) Who do not devote more than 20 percent of their hours it. Since the work of complainant is performed away from its principal place of
worked in a work week to activities which are not directly business, it has no way of verifying his actual hours of work on the vessel.
and closely related to the performance of the work
described in paragraphs (1), (2) and (3) above. Issue: Whether the complainant is part of field personnel who are not entitled
to service incentive leave pay.
(d) Domestic servants and persons in the personal service of another
if they perform such services in the employers home which are Held: No. The complainant is not within the definition of filed personnel, thus
usually necessary or desirable for the maintenance and he is entitled to service incentive leave pay.
enjoyment thereof, or minister to the personal comfort, Art. 82. Coverage. The provisions of this title (Working Conditions
convenience, or safety of the employer as well as the members and Rest Periods) shall apply to employees and undertakings whether for profit
of his employers household. or not, but not to government employees, field personnel, members of the family
(e) Workers who are paid by results, including those who are paid on of the employer who are dependent on him for support, domestic helpers,
piece-work, "takay," "pakiao" or task basis, and other non-time

Atty. Marlon Manuel
persons in the personal service of another, and workers who are paid by results employee. Moreover, it is claimed by petitioner that she was not required to
as determined by the Secretary of Labor in appropriate regulations. keep fixed hours of work, thus she couldnt have been a regular employee.
Field personnel shall refer to non-agricultural employees who Issue: Whether Quinta became a regular employee.
regularly perform their duties away from the principal place of business or Held: Yes. The SC held that although their contracts were valid, the fact that
branch office of the employer and whose actual hours of work in the field cannot after its expiration petitioner decided to continue her services, she is now
be determined with reasonable certainty. entitled to security of tenure.
The phrase whose actual hours of work in the filed cannot be Moreover, the fact that the employee was not required to report at a
determined with reasonable certainty in Art. 82 means field personnel and other fixed hour or to keep fixed hours of work does not detract from her status as a
employees whose time and performance is unsupervised by the employer. regular employee. As petitioner itself admits, Quinta was a managerial employee
The aforementioned rule did not add another element to the Labor Code and therefore not covered by the Labor Code provisions on hours of work.
definition of field personnel. The clause whose time and performance is Neither does the fact that Quinta was teaching full time at the Cebu
unsupervised by the employer did not amplify but merely interpreted and Doctors College negate her regular status since this fact does not affect the
expounded the clause whose actual hours of work in the field cannot be nature of her work. Whether ones employment is regular is not determined by
determined with reasonable certainty. The former clause is still within the the number of hours one works, but by the nature of the work and by the length
scope and purview of Article 82, which defines field personnel. Hence, in of time one has been in that particular job.
deciding whether or not an employees actual working hours in the field can be
determined with reasonable certainty, query must be made as to whether or not Labor Congress of the Phils. v NLRC, 290 SCRA 509
such employees time and performance is constantly supervised by the LCP is the exclusive bargaining representative of the employees of Empire Food
employer. Products. A MOA was entered into by the employees and the company. Later,
In the case at bar, during the entire course of their fishing voyage, the employees, represented by LCP, filed a complaint for ULP, union busting,
fishermen employed by petitioner have no choice but to remain on board its violation of the MOA and for underpayment of wages.
vessel. Although they perform non-agricultural work away from petitioners The labor arbiter and the NLRC held that there was no underpayment of
business offices, the fact remains that throughout the duration of their work they wages nor were they entitled to other benefits because the employees were
are under the effective control and supervision of petitioner through the vessels pakiao workers and paid on the basis of their output subject to the limitation
patron or master. that the payment conformed with the minimum wage rate to an 8-hour workday.
Being pakiao workers, they are not entitled to any other benefits to which
International Pharmaceuticals, Inc. v NLRC, 287 SCRA 313 regular workers are entitled to receive.
Petitioner employed Quinta as Medical Director for the development of its
herbal medicine department. Their contract had a period of 1 year. After the Issue: Whether the employees are piece rate workers which make them not
contract, Quinta was allowed to continue working until she was terminated. She entitled to other benefits being given to regular employees.
filed a case for illegal dismissal. Petitioner claims that she was only a project Held: Petitioners are entitled to holiday pay, premium pay, 13 th month pay and
service incentive leave. There are 3 factors which led the court to conclude that

Atty. Marlon Manuel
petitioners, although piece rate workers, were regular employees of private if their output rates are in accordance with the standards prescribed under Sec. 8,
respondents. First, as to the nature of petitioners tasks, their job of repacking Rule VII, Book III, of these regulations, or where such rates have been fixed by
snack food was necessary or desirable in the usual business of private the Secretary of Labor in accordance with the aforesaid section, are not entitled
respondents, who were engaged in the manufacture and selling of such food to receive overtime pay. Private respondents did not allege adherence to the
products; second, petitioners worked for private respondents throughout the standards set forth in Sec. 8 or with the rates prescribed by the Secretary of
year, their employment not having been dependent on a specific project or Labor. As such, petitioners are beyond the ambit of exempted persons and are
season; and third, the length of time that petitioners worked for private therefore entitled to overtime pay.
respondents. Thus, while petitioners mode of compensation was on a per piece
basis the status and nature of their employment was that of regular employees. C. Hours of Work
The Rules Implementing the Labor Code exclude certain employees
from receiving benefits such as nighttime pay, holiday pay, service incentive LABOR CODE
leave and 13th month pay, inter alia, field personnel and other employees whose
time and performance is unsupervised by the employer, including those who are Art. 83. Normal hours of work. The normal hours of work of any
engaged on task or contract basis, purely commissions basis, or those who are employee shall not exceed eight in a day.
paid a fixed amount for performing work irrespective of the time consumed in Health personnel in cities or municipalities with a population of
the performance thereof. Plainly, petitioners as piece-rate workers do not fall at least one million (1,000,000) or in hospitals or clinics with a bed
within this group. Not only did petitioners labor under the control of private capacity of at least one hundred (100) shall hold regular office hours
respondents as their employer, likewise did petitioners toil throughout the year for eight (8) hours a day, for five (5) days a week, exclusive of time
with the fulfillment of their quota as supposed basis for compensation. Further, for meals, except where the exigencies of the service require that
in Section 8(b), Rule IV, Book III, piece workers are specifically mentioned as such personnel work for six (6) days or forty-eight (48) hours, in
being entitled to holiday pay. which case they shall be entitled to an additional compensation of at
least thirty (30%) percent of their regular wage for work on the sixth
In addition, the Revised Guidelines on the Implementation of the 13 th day. For purposes of this Article, health personnel shall include:
Month Pay Law, in view of the modifications to P.D. No. 851 by Memorandum resident physicians, nurses, nutritionists, dieticians, pharmacists,
Order No. 28, clearly exclude employer of piece rate workers from those social workers, laboratory technicians, paramedical technicians,
exempted from paying the 13th month pay. psychologists, midwives, attendants and all other hospital or clinic
The Revised Guidelines as well as the Rules and Regulations identify personnel.
those workers who fall under the piece-rate category as those who are paid a
standard amount for every piece or unit of work produced that is more or less Art. 84. Hours worked. Hours worked shall include (a) all time
regularly replicated, without regard to the time spent in producing the same. during which an employee is required to be on duty or to be at a
prescribed workplace, and (b) all time during which an employee is
As to overtime pay, the rules, however, are different. According to Sec suffered or permitted to work.
2(e), Rule I, Book III of the Implementing Rules, workers who are paid by
Rest periods of short duration during working hours shall be
results including those who are paid on piece-work, takay, pakiao, or task basis,
counted as hours worked.

Atty. Marlon Manuel
accidents, fire, flood, typhoon, earthquake, epidemic or other
Art. 85. Meal periods. Subject to such regulations as the disaster or calamity;
Secretary of Labor may prescribe, it shall be the duty of every (c) When there is urgent work to be performed on machines,
employer to give his employees not less than sixty minutes time-off installation or equipment, in order to avoid serious loss or
for their regular meals. damage to the employer or some other cause of similar nature;
Art. 86. Night shift differential. Every employee shall be paid a (d) When the work is necessary to prevent loss or damage to
night shift differential of not less than ten (10%) percent of his perishable goods;
regular wage for each hour of work performed between ten oclock in (e) Where the completion or continuation of the work started before
the evening and six oclock in the morning. the eight (8th) hour is necessary to prevent serious obstruction
or prejudice to the business or operations of the employer.
Art. 87. Overtime work. Work may be performed beyond eight (8) Any employee required to render overtime work under this
hours a day provided that the employee is paid for the overtime work, Article shall be paid the additional compensation required in this
an additional compensation equivalent to his regular wage plus at Chapter.
least twenty-five (25%) percent thereof. Work performed beyond
eight hours on a holiday or rest day shall be paid an additional Art. 90. Computation of additional compensation. For purposes of
compensation equivalent to the rate for the first eight hours on a computing overtime and other additional remuneration as required by
holiday or rest day plus at least 30 percent thereof. this Chapter, the regular wage of an employee shall include the cash
wage only, without deduction on account of facilities provided by the
Art. 88. Undertime not offset by overtime. Undertime work on any employer.
particular day shall not be offset by overtime work on any other day.
Permission given to the employee to go on leave on some other day OMNIBUS RULES, BOOK III
of the week shall not exempt the employer from paying the additional
compensation required in this Chapter. RULE I
Hours of Work
Art. 89. Emergency overtime work. Any employee may be
required by the employer to perform overtime work in any of the SECTION 3. Hours worked. The following shall be considered as
following cases: compensable hours worked:
(a) When the country is at war or when any other national or local (a) All time during which an employee is required to be on duty or to
emergency has been declared by Congress or the Chief be at the employers premises or to be at a prescribed work
Executive; place; and
(b) When it is necessary to prevent loss of life or property or in case (b) All time during which an employee is suffered or permitted to
of imminent danger to public safety due to an actual or work.
impending emergency in the locality caused by serious

Atty. Marlon Manuel
SECTION 4. Principles in determining hours worked. The following leave word at his home or with company officials where he may
general principles shall govern in determining whether the time spent be reached is not working while on call.
by an employee is considered hours worked for purposes of this Rule:
(a) All hours are hours worked which the employee is required to SECTION 6. Lectures, meetings, training programs. Attendance at
give his employer, regardless of whether or not such hours are lectures, meetings, training programs, and other similar activities shall
spent in productive labor or involve physical or mental exertion. not be counted as working time if all of the following conditions are
met:
(b) An employee need not leave the premises of the work place in
order that his rest period shall not be counted, it being enough (a) attendance is outside of the employees regular working hours;
that he stops working, may rest completely and may leave his (b) attendance is in fact voluntary; and
work place, to go elsewhere, whether within or outside the (c) the employee does not perform any productive work during such
premises of his work place. attendance.
(c) If the work performed was necessary, or it benefited the
employer, or the employee could not abandon his work at the SECTION 7. Meal and Rest Periods. Every employer shall give his
end of his normal working hours because he had no replacement, employees, regardless of sex, not less than one (1) hour time-off for
all time spent for such work shall be considered as hours worked, regular meals, except in the following cases when a meal period of not
if the work was with the knowledge of his employer or immediate less than twenty (20) minutes may be given by the employer provided
supervisor. that such shorter meal period is credited as compensable hours
(d) The time during which an employee is inactive by reason of worked of the employee:
interruptions in his work beyond his control shall be considered (a) Where the work is non-manual work in nature or does not
working time either if the imminence of the resumption of work involve strenuous physical exertion;
requires the employees presence at the place of work or if the (b) Where the establishment regularly operates not less than sixteen
interval is too brief to be utilized effectively and gainfully in the (16) hours a day;
employees own interest.
(c) In case of actual or impending emergencies or there is urgent
SECTION 5. Waiting time. work to be performed on machineries, equipment or installations
to avoid serious loss which the employer would otherwise suffer;
(a) Waiting time spent by an employee shall be considered as and
working time if waiting is an integral part of his work or the
employee is required or engaged by the employer to wait. (d) Where the work is necessary to prevent serious loss of perishable
goods.
(b) An employee who is required to remain on call in the employers
premises or so close thereto that he cannot use the time Rest periods or coffee breaks running from five (5) to twenty
effectively and gainfully for his own purpose shall be considered (20) minutes shall be considered as compensable working time.
as working while on call. An employee who is not required to

Atty. Marlon Manuel
SECTION 8. Overtime pay. Any employee covered by this Rule (a) When the country is at war or when any other national or local
who is permitted or required to work beyond eight (8) hours on emergency has been declared by Congress or the Chief
ordinary working days shall be paid an additional compensation for the Executive;
overtime work in the amount equivalent to his regular wage plus at (b) When overtime work is necessary to prevent loss of life or
least twenty-five percent (25%) thereof. property, or in case of imminent danger to public safety due to
actual or impending emergency in the locality caused by serious
SECTION 9. Premium and overtime pay for holiday and rest day accident, fire, floods, typhoons, earthquake, epidemic or other
work. disaster or calamities;
(a) Except employees referred to under Section 2 of this Rule, an (c) When there is urgent work to be performed on machines,
employee who is permitted or suffered to work on special installations, or equipment, in order to avoid serious loss or
holidays or on his designated rest days not falling on regular damage to the employer or some other causes of similar nature;
holidays, shall be paid with an additional compensation as
premium pay of not less than thirty percent (30%) of his regular (d) When the work is necessary to prevent loss or damage to
wage. For work performed in excess of eight (8) hours on special perishable goods;
holidays and rest days not falling on regular holidays, an (e) When the completion or continuation of work started before the
employee shall be paid an additional compensation for the 8th hour is necessary to prevent serious obstruction or prejudice
overtime work equivalent to his rate for the first eight hours on a to the business or operations of the employer; or
special holiday or rest day plus at least thirty percent (30%) (f) When overtime work is necessary to avail of favorable weather or
thereof. environmental conditions where performance or quality of work is
(b) Employees of public utility enterprises as well as those employed dependent thereon.
in non-profit institutions and organizations shall be entitled to the In cases not falling within any of these enumerated in this
premium and overtime pay provided herein, unless they are Section, no employee may be made to work beyond eight hours a day
specifically excluded from the coverage of this Rule as provided against his will.
in Section 2 hereof.
(c) The payment of additional compensation for work performed on SECTION 11. Computation of additional compensation. For
regular holidays shall be governed by Rule IV, Book Three, of purposes of computing the additional compensation required by this
these Rules. Rule, the "regular wage" of an employee shall include the cash wage
only, without deduction, on account of facilities provided by the
SECTION 10. Compulsory overtime work. In any of the following employer.
cases, an employer may require any of his employees to work beyond
eight (8) hours a day, provided that the employee required to render
overtime work is paid the additional compensation required by these
regulations:

Atty. Marlon Manuel
RULE I-A (b) The size of the population of the city or municipality shall be
Hours of Work of Hospital and Clinic Personnel determined from the latest official census issued by the Bureau
of the Census and Statistics.
SECTION 1. General statement on coverage. This Rule shall apply
to: SECTION 4. Personnel covered by this Rule. This Rule applies to
(a) all hospitals and clinics, including those with a bed capacity of all persons employed by any private or public hospital or clinic
less than one hundred (100) which are situated in cities or mentioned in Section 1 hereof, and shall include, but not limited to,
municipalities with a population of one million or more; and resident physicians, nurses, nutritionists, dieticians, pharmacists,
social workers, laboratory technicians paramedical technicians,
(b) all hospitals and clinics with a bed capacity of at least one psychologists, midwives, and attendants.
hundred (100), irrespective of the size of the population of the
city or municipality where they may be situated. SECTION 5. Regular working hours. The regular working hours of
any person covered by this Rule shall not be more than eight (8) hours
SECTION 2. Hospitals or clinics within the meaning of this Rule. in any one day nor more than forty (40) hours in any one week.
The terms "hospitals" and "clinics" as used in this Rule shall mean a
place devoted primarily to the maintenance and operation of facilities For purposes of this Rule a "day" shall mean a work day of
for the diagnosis, treatment and care of individuals suffering from twenty-four (24) consecutive hours beginning at the same time each
illness, disease, injury, or deformity, or in need of obstetrical or other calendar year. A "week" shall mean the work of 168 consecutive
medical and nursing care. Either term shall also be construed as any hours, or seven consecutive 24-hour work days, beginning at the same
institution, building, or place where there are installed beds, or cribs, hour and on the same calendar day each calendar week.
or bassinets for twenty-four (24) hours use or longer by patients in the
treatment of disease, injuries, deformities, or abnormal physical and SECTION 6. Regular working days. The regular working days of
mental states, maternity cases or sanitorial care; or infirmaries, covered employees shall not be more than five days in a work week.
nurseries, dispensaries, and such other similar names by which they The work week may begin at any hour and on any day, including
may be designated. Saturday or Sunday, designated by the employer.
Employers are not precluded from changing the time at which
SECTION 3. Determination of bed capacity and population. the work day or work week begins, provided that the change is not
(a) For purposes of determining the applicability of this Rule, the intended to evade the requirements of this Rule.
actual bed capacity of the hospital or clinic at the time of such
determination shall be considered, regardless of the actual or bed SECTION 7. Overtime work. Where the exigencies of the service
occupancy. The bed capacity of hospital or clinic as determined so require as determined by the employer, any employee covered by
by the Bureau of Medical Services pursuant to Republic Act No. this Rule may be scheduled to work for more than five (5) days or
4226, otherwise known as the Hospital Licensure Act, shall prima forty (40) hours a week, provided that the employee is paid for the
facie be considered as the actual bed capacity of such hospital or overtime work an additional compensation equivalent to his regular
clinic. wage plus at least thirty percent (30%) thereof, subject to the

Atty. Marlon Manuel
provisions of this Book on the payment of additional compensation for basis, or those who are paid a fixed amount for performing work
work performed on special and regular holidays and on rest days. irrespective of the time consumed in the performance thereof.
SECTION 8. Hours worked. In determining the compensable SECTION 2. Night shift differential. An employee shall be paid
hours of work of hospital and clinic personnel covered by this Rule, the night shift differential of no less than ten per cent (10%) of his regular
pertinent provisions of Rule 1 of this Book shall apply. wage for each hour of work performed between ten oclock in the
evening and six oclock in the morning.
SECTION 9. Additional compensation. Hospital and clinic
personnel covered by this Rule, with the exception of those employed SECTION 3. Additional compensation. Where an employee is
by the Government, shall be entitled to an additional compensation for permitted or suffered to work on the period covered after his work
work performed on regular and special holidays and rest days as schedule, he shall be entitled to his regular wage plus at least twenty-
provided in this Book. Such employees shall also be entitled to five per cent (25%) and an additional amount of no less than ten per
overtime pay for services rendered in excess of forty hours a week, or cent (10%) of such overtime rate for each hour or work performed
in excess of eight hours a day, whichever will yield the higher between 10 p.m. to 6 a.m.
additional compensation to the employee in the work week.
SECTION 10. Relation to Rule I. All provisions of Rule I of this SECTION 4. Additional compensation on scheduled rest day/special
Book which are not inconsistent with this Rule shall be deemed holiday. An employee who is required or permitted to work on the
applicable to hospital and clinic personnel. period covered during rest days and/or special holidays not falling on
regular holidays, shall be paid a compensation equivalent to his
RULE II regular wage plus at least thirty (30%) per cent and an additional
Night Shift Differential amount of not less than ten (10%) per cent of such premium pay rate
for each hour of work performed.
SECTION 1. Coverage. This Rule shall apply to all employees
except: SECTION 5. Additional compensation on regular holidays. For
(a) Those of the government and any of its political subdivisions, work on the period covered during regular holidays, an employee shall
including government-owned and/or controlled corporations; be entitled to his regular wage during these days plus an additional
compensation of no less than ten (10%) per cent of such premium
(b) Those of retail and service establishments regularly employing rate for each hour of work performed.
not more than five (5) workers;
(c) Domestic helpers and persons in the personal service of another; SECTION 6. Relation to agreements. Nothing in this Rule shall
(d) Managerial employees as defined in Book III of this Code; justify an employer in withdrawing or reducing any benefits,
supplements or payments as provided in existing individual or
(e) Field personnel and other employees whose time and collective agreements or employer practice or policy.
performance is unsupervised by the employer including those
who are engaged on task or contract basis, purely commission

Atty. Marlon Manuel
CASES National Semiconductor Dist. Ltd., v NLRC, 291 SCRA 348
Santos filed a case against NSC for unpaid night shift differential among others.
Caltex Regular Employees v Caltex Phils. Inc. , 247 SCRA 398 NSC contends that Santos was not able to substantiate his claim that he was not
The union and Caltex entered into a CBA. While it was in effect, the union paid his night shift differential pay.
instituted a complaint for ULP against Caltex alleging violation of Annex B of Issue: Who has the burden of proving a claim for night shift differential pay,
the 1985 CBA. Union charged Caltex when the latter compensated work the worker who claims not to have been paid night shift differentials or the
performed on the first 2 hours of Saturday, an employees day of rest, at employer in custody of pertinent documents that would prove the fact of
regular rate, when it should be paying at day of rest or day off rates. Caltex, payment of the same?
on the other hand, maintained that the 1985 CBA provided only 1 day of rest,
which is Sunday. Held: The employer. The fact that Santos neglected to substantiate his claim
for night shift differentials is not prejudicial to his cause. After all, the burden of
Labor Arbiter ruled that the employees had been given 2 days of rest. proving payment rests on NSC. Santos allegation of non-payment of this
On appeal, the NLRC held that CBA granted only one day of rest, i.e., Sunday. benefit, to which he is by law entitled, is a negative evidence unless it is an
Issue: Whether the CBA provides for 2 days of rest, pursuant to Annex B of essential part of his main cause of action. It must be noted that his main cause of
the said CBA. action is his illegal dismissal, and the claim for night shift differential is but an
Held: No. The intention of the parties to the 1985 CBA was to provide the incident of the protest against such dismissal. Thus, the burden of proving that
employees with only 1 day of rest. Article III of the CBA provides that Caltex payment of such benefit has been made rests upon the party who will suffer if no
and Union had agreed to pay day of rest rates for work performed on an evidence at all is presented by either party.
employee s one day of rest. The use of one describing the phrase day of For sure, Santos cannot adequately prove the fact of non-payment of
rest emphasizes such intention. night shift differentials since the pertinent employee files, payrolls, records,
Annex B cannot be construed as modifying or altering the terms remittances, and other similar documents---which will show that he rendered
expressed in the body of the CBA. Hence, the annex was intended to serve only night shift work; the time he rendered services; and, the amount owed as night
as a company-wide guide for work performed by all its employees. The second shift differentials --- are not in his possession but in the custody and absolute
day-off rates therefore are applicable only to personnel of the Manila Office, control of NSC.
which consisted of other groups, or categories of employees
Prangan vs. NLRC, 289 SCRA 142
Furthermore, looking into the bargaining agreements prior to 1985, Prangan was hired for security services by Masagana Security Services Corp
Article III, provided that only work on an employees one day of rest shall be and was assigned to Cat House Bar and Restaurant until the latters closure.
paid on the basis of day of rest rates. This further emphasizes the real intention Prangan filed a complaint against Masagana for underpayment and non-payment
of the parties to the 1985 CBA. of wages and other benefits. Masagana rejected the claim and alleged that it is a
mere agent and the real liability is attached with Cat House, as direct employer.

Atty. Marlon Manuel
The labor arbiter ordered payment but Prangan was not satisfied with refer to the practice of prospecting for clients through the telephone directory.
the amount the labor arbiter having concluded that he had worked only 4 hours Cityland requires the submission of daily progress reports on the same.
and not 12 hours a day. Cityland issued a written reprimand to Lagatic for his failure to submit
Issue: How does one determine the actual number of hours worked by an cold call reports. Lagatic claimed that the same was an honest omission brought
employee? about by his concentration on other aspects of his job. Cityland found said
Held: There is no dispute that matters concerning an employees actual hours excuse inadequate and suspended him for 3 days, with similar warning. Lagatic
of work are within the ambit of management prerogative. However, when an again failed to submit cold call reports. He was verbally reminded to submit the
employer alleges that his employee works less than the normal hours of same. Instead of complying with said directive, he wrote a note, TO HELL
employment as provided for in the law, he bears the burden of proving his WITH COLD CALLS! WHO CARES? and exhibited the same to his co-
allegation with clear and satisfactory evidence. employees. To worsen matters, he left the same lying on his desk where
everyone could see it.
Prangan never made nor submitted any daily time record with the
company considering the fact that he was assigned to a single post and that the Held: An employee may be validly dismissed for violation of a reasonable
daily time records he allegedly submitted with the company are all falsified and company rule or regulation adopted for the conduct of the company business. An
his signature appearing therein forged. employer cannot rationally be expected to retain the employment of a person
whoselack of regard for his employers ruleshas so plainly and completely
Masagana hardly bothered to controvert his assertion, much less bolster been bared.
its own contention. As employer, Masagana has unlimited access to all relevant
documents and records on the hours of work of Prangan. Yet, even as it insist Willful disobedience requires the concurrence of at least two requisites:
that Prangan only worked for 4 hours and not 12, no employment contract, the employees assailed conduct must have been willful or intentional, the
payroll, notice of assignment or posting, cash voucher or any other convincing willfulness being characterized by a wrongful and perverse attitude; and the
evidence which may attest to the actual hours of work of Prangan was even order violated must have been reasonable, lawful, made known to the employee
presented. Instead, what Masagana offered as evidence was only Prangans and must pertain to the duties which he had been engaged to discharge.
daily time record, which the latter categorically denied ever accomplishing, The requirement of a hearing is complied with as long as there was an
much less signing. opportunity to be heard, and not necessarily that an actual hearing be conducted.
Another consideration which militates against Masaganas claim is the Lagatic had an opportunity to be heard as he submitted a letter reply to the
fact that both the personnel data sheet of Prangan duly signed by the formers charge. There is no necessity for a formal hearing where an employee admits
operation manager and the attendance sheets of Cat House Bar and Restaurant, responsibility for an alleged misconduct.
showed that Prangan worked from 7:00 p.m. to 7:00 a.m. daily. Additionally, there is no law which requires employers to pay
commissions, and when they do so, as stated in the letter-opinion of the DOLE
Lagatic vs. NLRC, 285 SCRA 251 dated February 19, 1993, there is no law which prescribed a method for
Lagatic was employed in May 1986 by Cityland as a marketing specialist. He computing commissions. The determination of the amount of commissions is the
was tasked with making client calls and cold calls, among others. Cold calls result of collective bargaining negotiations, individual employment contracts or
established employer practice. Sine the formula for the computation of

Atty. Marlon Manuel
commissions was presented to and accepted by Lagatic, such prescribed formula D. Rest Periods and Holidays
is in order. As to the allegation that said formula diminishes the benefits being
received by him whenever there is a wage increase, it must be noted that his LABOR CODE
commissions are not meant to be in a fixed amount. In fact, there was no
assurance that he would receive any commission at all. Non-diminution of CHAPTER II
benefits, as applied here, merely means that the company may not remove the Weekly Rest Periods
privilege of sales personnel to earn a commission, not that they are entitled to a
fixed amount thereof. Art. 91. Right to weekly rest day.
It is Citylands practice to offset rest day or holiday work with (a) It shall be the duty of every employer, whether operating for
equivalent time on a regular workday on the ground that the same is authorized profit or not, to provide each of his employees a rest period of
by DO 21, Series of 1990. Said D.O. was misapplied in this case which it not less than twenty-four consecutive hours after every six
involves the shortening of the workweek from 6 days to 5 days but with consecutive normal work days.
prolonged hours on those 5 days. Under this scheme, non-payment of overtime (b) The employer shall determine and schedule the weekly rest day
premiums was allowed in exchange for longer weekends for employees. In the of his employees, subject to collective agreement and to such
instant case, Lagatics workweek was never compressed. Instead, he claims rules and regulations as the Secretary of Labor and Employment
payment for work over and above his normal 5 days of work in a week. may provide. However, the employer shall respect the
Applying by analogy the principle that overtime cannot be offset by under time, preference of employees as to their weekly rest day when such
to allow offsetting would prejudice the worker. He would be deprived of the preference is based on religious grounds.
additional pay for the rest day work he has rendered and which is utilized to
offset his equivalent time off on regular workdays. To allow Cityland to do so Art. 92. When employer may require work on a rest day. The
would be to circumvent the law on payment of premiums for the rest they day employer may require his employees to work on any day:
and holiday work. (a) In case of actual or impending emergencies caused by serious
Notwithstanding the foregoing discussion, Lagatic failed to show his accidents, fire, flood, typhoon, earthquake, epidemic or other
disaster or calamity to prevent loss of life and property or
entitlement to overtime and rest day pay due, to the lack of sufficient evidence
imminent danger to public safety;
as to the number of days and hours when he rendered overtime and rest day
work. Entitlement to overtime pay must first be established by proof that said (b) In cases of urgent work to be performed on the machinery,
overtime work was actually performed, before an employee may avail of said equipment or installation to avoid serious loss which the
benefit. To support his allegations, Lagatic submitted in evidence minutes of employer would otherwise suffer;
meetings wherein he was assigned to work on weekends and holidays at (c) In the event of abnormal pressure of work due to special
Citylands housing projects. Said minutes do not prove that he actually worked circumstances, where the employer cannot ordinarily be
on said dates. expected to resort to other measures;
(d) To prevent loss or damage to perishable goods;

Atty. Marlon Manuel
(e) Where the nature of the work requires continuous operations CHAPTER III
and the stoppage of work may result in irreparable injury or loss Holidays, Service Incentive Leaves and Service Charges
to the employer; and Art. 94. Right to holiday pay.
(f) Under other circumstances analogous or similar to the foregoing (a) Every worker shall be paid his regular daily wage during regular
as determined by the Secretary of Labor and Employment. holidays, except in retail and service establishment regularly
employing less than ten workers;
Art. 93. Compensation for rest day, Sunday or holiday work. (b) The employer may require an employee to work on any holiday
(a) Where an employee is made or permitted to work on his but such employee shall be paid a compensation equivalent to
scheduled rest day, he shall be paid an additional compensation twice his regular rate; and
of at least thirty (30%) percent of his regular wage. An (c) As used in this Article, holiday includes: New Years Day,
employee shall be entitled to such additional compensation for Maundy Thursday, Good Friday, the ninth of April, the first of
work performed on Sunday only when it is his established rest May, the twelfth of June, last Sunday of August, first of
day. November, the thirtieth of November, the twenty-fifth and the
(b) When the nature of the work of the employee is such that he thirtieth of December, thirty-first of December, and the day
has no regular workdays and no regular rest days can be designated by law for holding a general election. [Superseded
scheduled, he shall be paid an additional compensation of at by Exec. Order 203]
least thirty (30%) percent of his regular wage for work
performed on Sundays and holidays. EXECUTIVE ORDER NO. 203
(c) Work performed on any special holiday shall be paid an PROVIDING A LIST OF REGULAR HOLIDAYS AND SPECIAL DAYS
additional compensation of at least thirty (30%) percent of the TO BE OBSERVED THROUGHOUT THE PHILIPPINES AND FOR
regular wage of the employee. Where such holiday work falls on OTHER PURPOSES
the employees scheduled rest day, he shall be entitled to an
additional compensation of at least fifty (50%) percent of his WHEREAS, a Cabinet Assistance Secretariat Committee was
regular wage. constituted to review all existing public holidays;
WHEREAS, there are too many holidays being observed which
(d) Where the collective bargaining agreement or other applicable
has caused confusion among the public.
employment contract stipulates the payment of a higher
NOW, THEREFORE, I, CORAZON C. AQUINO, President of the
premium pay than that prescribed under this Article, the
Philippines, do hereby order:
employer shall pay such higher rate.
Sec. 1. Unless otherwise modified by law, order or
proclamation, the following regular holidays and special days shall be
observed in this country:

Atty. Marlon Manuel
A. Regular Holidays OMNIBUS RULES, BOOK III
New Years Day - January
RULE III
Maundy Thursday - Movable date Weekly Rest Periods
Good Friday - Movable date
Araw ng Kagitingan (Bataan SECTION 1. General statement on coverage. This Rule shall apply
to all employers whether operating for profit or not, including public
and Corregidor Day) - April 9 utilities operated by private persons.
Labor Day - May 1
Independence Day - June 12 SECTION 2. Business on Sundays/Holidays. All establishments
and enterprises may operate or open for business on Sundays and
National Heroes Day - Last Sunday of August
holidays provided that the employees are given the weekly rest day
Bonifacio Day - November 30 and the benefits as provided in this Rule.
Christmas Day - December 25
SECTION 3. Weekly rest day. Every employer shall give his
Rizal Day - December 30
employees a rest period of not less than twenty-four (24) consecutive
B. Nationwide Special Days hours after every six consecutive normal work days.
All Saints Day - November 1
SECTION 4. Preference of employee. The preference of the
Last Day of the Year - December 31
employee as to his weekly day of rest shall be respected by the
employer if the same is based on religious grounds. The employee
Sec. 2. Henceforth, the terms legal or regular holiday and
shall make known his preference to the employer in writing at least
special holiday, as used in laws, orders, rules and regulations or
seven (7) days before the desired effectivity of the initial rest day so
other issuances shall now be referred to as regular holiday and
preferred.
special day, respectively.
Where, however, the choice of the employee as to his rest day
Sec. 3. All laws, orders, issuances, rules and regulations or based on religious grounds will inevitably result in serious prejudice or
parts thereof inconsistent with this Executive Order are hereby obstruction to the operations of the undertaking and the employer
repealed or modified accordingly. cannot normally be expected to resort to other remedial measures, the
employer may so schedule the weekly rest day of his choice for at
Sec. 4. This Executive Order shall take effect immediately. least two (2) days in a month.
Done in the City of Manila, this 30th day of June, in the year of SECTION 5. Schedule of rest day.
Our Lord, nineteen hundred and eighty-seven. (a) Where the weekly rest is given to all employees simultaneously,
the employer shall make known such rest period by means of a written

Atty. Marlon Manuel
notice posted conspicuously in the work place at least one week before work on his rest day under other circumstances, he shall express such
it becomes effective. desire in writing, subject to the provisions of Section 7 hereof
(b) Where the rest period is not granted to all employees regarding additional compensation.
simultaneously and collectively, the employer shall make known to the
employees their respective schedules of weekly rest through written SECTION 7. Compensation on rest day/Sunday/holiday.
notices posted conspicuously in the work place at least one week (a) Except those employees referred to under Section 2, Rule I, Book
before they become effective. III, an employee who is made or permitted to work on his
scheduled rest day shall be paid with an additional compensation
SECTION 6. When work on rest day authorized. An employer may of at least 30% of his regular wage. An employee shall be
require any of his employees to work on his scheduled rest day for the entitled to such additional compensation for work performed on a
duration of the following emergencies and exceptional conditions: Sunday only when it is his established rest day.
(a) In case of actual or impending emergencies caused by serious (b) Where the nature of the work of the employee is such that he
accident, fire, flood, typhoon, earthquake, epidemic or other has no regular work days and no regular rest days can be
disaster or calamity, to prevent loss of life or property, or in scheduled, he shall be paid an additional compensation of at
cases of force majeure or imminent danger to public safety; least 30% of his regular wage for work performed on Sundays
(b) In case of urgent work to be performed on machineries, and holidays.
equipment or installations to avoid serious loss which the (c) Work performed on any special holiday shall be paid with an
employer would otherwise suffer; additional compensation of at least 30% of the regular wage of
(c) In the event of abnormal pressure of work due to special the employees. Where such holiday work falls on the employees
circumstances, where the employer cannot ordinarily be scheduled rest day, he shall be entitled to additional
expected to resort to other measures; compensation of at least 50% of his regular wage.
(d) To prevent serious loss of perishable goods; (d) The payment of additional compensation for work performed on
regular holiday shall be governed by Rule IV, Book III, of these
(e) Where the nature of the work is such that the employees have to regulations.
work continuously for seven (7) days in a week or more, as in
the case of the crew members of a vessel to complete a voyage (e) Where the collective bargaining agreement or other applicable
and in other similar cases; and employment contract stipulates the payment of a higher
premium pay than that prescribed under this Section, the
(f) When the work is necessary to avail of favorable weather or employer shall pay such higher rate.
environmental conditions where performance or quality of work is
dependent thereon. SECTION 8. Paid-off days. Nothing in this Rule shall justify an
No employee shall be required against his will to work on his employer in reducing the compensation of his employees for the
scheduled rest day except under circumstances provided in this unworked Sundays, holidays, or other rest days which are considered
Section: Provided, However, that where an employee volunteers to

Atty. Marlon Manuel
paid-off days or holidays by agreement or practice subsisting upon the For this purpose, the monthly minimum wage shall not be less
effectivity of the Code. than the statutory minimum wage multiplied by 365 days divided by
twelve.
SECTION 9. Relation to agreements. Nothing herein shall prevent
the employer and his employees or their representatives in entering SECTION 3. Holiday Pay. Every employer shall pay his employees
into any agreement with terms more favorable to the employees than their regular daily wage for any worked regular holidays.
those provided herein, or be used to diminish any benefit granted to As used in the rule, the term "holiday" shall exclusively refer
the employees under existing laws, agreements, and voluntary to: New Years Day, Maundy Thursday, Good Friday, the ninth of April,
employer practices. the first of May, the twelfth of June, the fourth of July, the thirtieth of
November, the twenty-fifth and thirtieth of December and the day
RULE IV designated by law for a general election or national referendum or
Holidays With Pay plebiscite.
SECTION 1. Coverage. This rule shall apply to all employees SECTION 4. Compensation for holiday work. Any employee who is
except: permitted or suffered to work on any regular holiday, not exceeding
(a) Those of the government and any of the political subdivision, eight (8) hours, shall be paid at least two hundred percent (200%) of
including government-owned and controlled corporation; his regular daily wage. If the holiday work falls on the scheduled rest
(b) Those of retail and service establishments regularly employing day of the employee, he shall be entitled to an additional premium pay
less than ten (10) workers; of at least 30% of his regular holiday rate of 200% based on his
regular wage rate.
(c) Domestic helpers and persons in the personal service of another;
(d) Managerial employees as defined in Book III of the Code; SECTION 5. Overtime pay for holiday work. For work performed
(e) Field personnel and other employees whose time and in excess of eight hours on a regular holiday, an employee shall be
performance is unsupervised by the employer including those paid an additional compensation for the overtime work equivalent to
who are engaged on task or contract basis, purely commission his rate for the first eight hours on such holiday work plus at least
basis, or those who are paid a fixed amount for performing work 30% thereof.
irrespective of the time consumed in the performance thereof. Where the regular holiday work exceeding eight hours falls on the
scheduled rest day of the employee, he shall be paid an additional
SECTION 2. Status of employees paid by the month. Employees compensation for the overtime work equivalent to his regular holiday-
who are uniformly paid by the month, irrespective of the number of rest day for the first 8 hours plus 30% thereof. The regular holiday
working days therein, with a salary of not less than the statutory or rest day rate of an employee shall consist of 200% of his regular daily
established minimum wage shall be paid for all days in the month wage rate plus 30% thereof.
whether worked or not.

Atty. Marlon Manuel
SECTION 6. Absences. semestral vacations. They shall, however, be paid for the regular
(a) All covered employees shall be entitled to the benefit provided holidays during Christmas vacation;
herein when they are on leave of absence with pay. Employees (b) Where a covered employee, is paid by results or output, such as
who are on leave of absence without pay on the day immediately payment on piece work, his holiday pay shall not be less than his
preceding a regular holiday may not be paid the required holiday average daily earnings for the last seven (7) actual working days
pay if he has not worked on such regular holiday. preceding the regular holiday; Provided, However, that in no
(b) Employees shall grant the same percentage of the holiday pay as case shall the holiday pay be less than the applicable statutory
the benefit granted by competent authority in the form of minimum wage rate.
employees compensation or social security payment, whichever (c) Seasonal workers may not be paid the required holiday pay
is higher, if they are not reporting for work while on such during off-season when they are not at work.
benefits. (d) Workers who have no regular working days shall be entitled to
(c) Where the day immediately preceding the holiday is a non- the benefits provided in this Rule.
working day in the establishment or the scheduled rest day of
the employee, he shall not be deemed to be on leave of absence SECTION 9. Regular holiday falling on rest days or Sundays.
on that day, in which case he shall be entitled to the holiday pay (a) A regular holiday falling on the employees rest day shall be
if he worked on the day immediately preceding the non-working compensated accordingly.
day or rest day.
(b) Where a regular holiday falls on a Sunday, the following day shall
SECTION 7. Temporary or periodic shutdown and temporary be considered a special holiday for purposes of the Labor Code,
cessation of work. unless said day is also a regular holiday.
(a) In cases of temporary or periodic shutdown and temporary SECTION 10. Successive regular holidays. Where there are two
cessation of work of an establishment, as when a yearly (2) successive regular holidays, like Holy Thursday and Good Friday,
inventory or when the repair or cleaning of machineries and an employee may not be paid for both holidays if he absents himself
equipment is undertaken, the regular holidays falling within the from work on the day immediately preceding the first holiday, unless
period shall be compensated in accordance with this Rule. he works on the first holiday, in which case he is entitled to his holiday
(b) The regular holiday during the cessation of operation of an pay on the second holiday.
enterprise due to business reverses as authorized by the
Secretary of Labor and Employment may not be paid by the SECTION 11. Relation to agreements. Nothing in this Rule shall
employer. justify an employer in withdrawing or reducing any benefits,
supplements or payments for unworked holidays as provided in
SECTION 8. Holiday pay of certain employees. existing individual or collective agreement or employer practice or
(a) Private school teachers, including faculty members of colleges policy.
and universities, may not be paid for the regular holidays during

Atty. Marlon Manuel
CASES provisions bearing on the point, otherwise to reckon a year at more than 365
days.
Wellington Investment and Manufacturing Corp vs. Trajano, 245 SCRA 561
A routine inspection was conducted by a Labor Enforcement Officer of the Building Care Corp. vs. NLRC, 268 SCRA 666
Wellington Flour Mills. The officer drew up a report, in which he set forth his Complainant alleged that his wages, 13 th month pay and service incentive leave
finding of non-payment of regular holidays falling on a Sunday for monthly pay were unpaid; that he was not paid for work rendered during legal holidays.
paid employees. Wellington asserted that it pays its monthly-paid employees a Held: Indeed, if petitioner wanted to prove its payment of holiday pays and
fixed compensation using the 314 factor, which undeniably covers and already salary differentials, it could have easily presented proofs of such monetary
includes payment for all the working days in a month as well as all the 10 benefits. But it did not. The burden of proof in this regard belongs to the
unworked regular holidays within a year. employer, not to the employee.
Issue: Whether a monthly-paid employee, receiving a fixed monthly
compensation, is entitled to an additional pay aside from his usual holiday pay, E. WAGES
whenever a regular holiday falls on a Sunday.
Held: Every worker should, according to the Labor Code, be paid his regular LABOR CODE
daily wage during regular holidays, except in retail and service establishments
regularly employing less than (10) workers; this, of course, even if the worker Art. 97. Definition. As used in this Title:
does no work on these holidays. The regular holidays include: New Years Day, (a) Person means an individual, partnership, association,
Maundy Thursday, Good Friday, and the 9th of April, the 1st of May, the 12th of corporation, business trust, legal representative or any
June, the 4th of July, the 13th of November, the 25th of December, and the day organized group of persons.
designated by law for holding a general election (or national referendum or (b) Employer includes any person acting directly or indirectly in
plebiscite). the interest of an employer in relation to an employee and shall
The monthly salary in Wellington, which is, based on the so-called 314 include the Government and all its branches, subdivisions and
factor accounts for all 365 days of a year; with the exception only of 51 instrumentalities, all government-owned or controlled
Sundays. The respondents theory that there was an increase of three (3) corporations and institutions, as well as non-profit private
working days resulting from regular holidays falling on Sundays; hence institutions or organizations.
Wellington should pay for 317 days, instead of 315 days would make each of (c) Employee includes any individual employed by an employer.
the year in question (1988, 1989, 1990), a year of 368 days. Pursuant to this (d) Agriculture includes farming in all its branches and among
theory, no employer opting to pay his employees by the month would have any other things includes the cultivation and tillage of soil, dairying,
basis to determine the number of days in a year for which compensation should the production, cultivation, growing and harvesting of any
be given to his work force. There is no provision of law requiring any employer agricultural and horticultural commodities, the raising of
to make such adjustments in the monthly salary rate set by him to take account livestock or poultry, and any practices performed by a farmer on
of legal holidays falling on Sundays in a given year, or contrary, to the legal a farm as an incident to or in conjunction with such farming
operations, but does not include the manufacturing or

Atty. Marlon Manuel
processing of sugar, coconuts, abaca, tobacco, pineapples or Art. 101. Payment by results. The Secretary of Labor shall
other farm products. regulate the payment of wages by results, including pakyao,
(e) Employ includes to suffer or permit to work. piecework and other non-time work, in order to ensure the payment
of fair and reasonable wage rates, preferably through time and motion
(f) Wage paid to any employee shall mean the remuneration or studies or in consultation with representatives of workers and
earnings, however designated, capable of being expressed in employers organizations.
terms of money, whether fixed or ascertained on a time, task,
piece, or commission basis, or other method of calculating the CHAPTER III
same, which is payable by an employer to an employee under a Payment of Wages
written or unwritten contract of employment for work done or to
be done or for services rendered or to be rendered and includes Art. 102. Forms of payment. No employer shall pay the wages
the fair and reasonable value, as determined by the Secretary of of an employee by means of promissory notes, vouchers, coupons,
Labor, of board, lodging or other facilities customarily furnished tokens, tickets, chits or any object other than legal tender, even when
by the employer to the employee. Fair and reasonable value expressly requested by the employee.
shall not include any profit to the employer or to any person
affiliated with the employer. Payment of wages by check or money order shall be allowed
when such manner of payment is customary on the date of effectivity
Art. 98. Application of Title. This Title shall not apply to farm of this Code or is necessary because of special circumstances as
tenancy or leasehold, domestic service and persons working in their specified in appropriate regulations to be issued by the Secretary of
respective homes in needlework or in any cottage industry duly Labor or as stipulated in a collective bargaining agreement.
registered in accordance with law.
Art. 103. Time of payment. Wages shall be paid at least once
CHAPTER II every two (2) weeks or twice a month at intervals not exceeding
Minimum Wage Rates sixteen (16) days. If on account of force majeure or circumstances
beyond the employers control, payment of wages on or within the
Art. 99. Regional Minimum Wages. The minimum wage rates for time herein provided cannot be made, the employer shall pay the
agricultural and non-agricultural employees and workers in each and wages immediately after such force majeure or circumstances have
every region of the country shall be those prescribed by the Regional ceased. No employer shall make payment with less frequency than
Tripartite Wages and Productivity Boards. [ As amended by RA 6727]. once a month.
The payment of wages of employees engaged to perform a
Art. 100. Prohibition against elimination or diminution of benefits. task which cannot be completed in two weeks shall be subject to the
Nothing in this Book shall be construed to eliminate or in any way following conditions in the absence of a collective bargaining
diminish supplements, or other employee benefits being enjoyed at agreement or arbitration award:
the time of the promulgation of this Code. (1) That payments are made at intervals not exceeding sixteen
days, in proportion to the amount of work completed; and

Atty. Marlon Manuel
(2) That final settlement is made upon completion of the work. In the event that the contractor or sub-contractor fails to pay
the wages of his employees in accordance with this Code, the
Art. 104. Place of payment. Payment of wages shall be made at employer shall be jointly and severally liable with his contractor or
or near the place of undertaking, except as otherwise provided by sub-contractor to such employees to the extent of the work performed
such regulations as the Secretary of Labor may prescribe under under the contract, in the same manner and extent that he is liable to
conditions to ensure greater protection of wages. employees directly employed by him.
The Secretary of Labor and Employment may, by appropriate
Art. 105. Direct payment of wages. Wages shall be paid directly regulations, restrict or prohibit the contracting out of labor to protect
to the workers to whom they are due, except: the rights of workers established under this Code. In so prohibiting or
(a) In cases of force majeure rendering such payments impossible restricting, he may make appropriate distinctions between labor-only
or under other special circumstances to be determined by the contracting and job contracting as well as differentiations within these
Secretary of Labor in appropriate regulations, in which case the types of contracting, and determine who among the parties involved
worker may be paid through another person under written shall be considered the employer for purposes of this Code, to prevent
authority given by the worker for the purpose; or any violation or circumvention of any provision of this Code.
(b) Where the worker has died, in which case the employer may pay There is labor-only contracting where the person supplying
the wages of the deceased worker to the heirs of the latter workers to an employer does not have substantial capital or
without the necessity of intestate proceedings. The claimant, if investment in the form of tools, equipment, machineries, work
they are all of age, shall execute an affidavit attesting to their premises, among others, and the workers recruited and placed by
relationship to the deceased and the fact that they are his heirs, such person are performing activities which are directly related to the
to the exclusion of all other persons. If any of the heirs is a principal business of such employer. In such cases, the person or
minor, the affidavit shall be executed on his behalf by his natural intermediary shall be considered merely as an agent of the employer
guardian or next of kin. The affidavit shall be presented to the who shall be responsible to the workers in the same manner and
employer who shall make payment through the Secretary of extent as if the latter were directly employed by him.
Labor or his representative. The representative of the Secretary
of Labor shall act as referee in dividing the amount paid among Art. 107. Indirect employer. The provisions of the immediately
the heirs. The payment of wages under this Article shall absolve preceding Article shall likewise apply to any person, partnership,
the employer of any further liability with respect to the amount association or corporation which, not being an employer, contracts
paid. with an independent contractor for the performance of any work, task,
job or project.
Art. 106. Contractor or sub-contractor. Whenever an employer
enters into a contract with another person for the performance of the Art. 108. Posting of bond. An employer or indirect employer may
formers work, the employees of the contractor and of the latters require the contractor or sub-contractor to furnish a bond equal to the
sub-contractor, if any, shall be paid in accordance with the provisions cost of labor under contract, on condition that the bond will answer
of this Code.

Atty. Marlon Manuel
for the wages due the employees should the contractor or sub- property from the employer or from any other person or otherwise
contractor, as the case may be, fail to pay the same. make use of any store or services of such employer or any other
person.
Art. 109. Solidary liability. The provisions of existing laws to the
contrary notwithstanding, every employer or indirect employer shall Art. 113. Wage deduction. No employer, in his own behalf or in
be held responsible with his contractor or subcontractor for any behalf of any person, shall make any deduction from the wages of his
violation of any provision of this Code. For purposes of determining employees except:
the extent of their civil liability under this Chapter, they shall be (a) In cases where the worker is insured with his consent by the
considered as direct employers. employer, and the deduction is to recompense the employer for
the amount paid by him as premium on the insurance;
Art. 110. Worker preference in case of bankruptcy. In the event
of bankruptcy or liquidation of an employers business, his workers (b) For union dues, in cases where the right of the worker or his
shall enjoy first preference as regards their wages and other union to check off has been recognized by the employer or
monetary claims, any provision of law to the contrary authorized in writing by the individual worker concerned; and
notwithstanding. Such unpaid wages and monetary claims shall be (c) In cases where the employer is authorized by law or regulations
paid in full before the claims of the Government and other creditors issued by the Secretary of Labor.
may be paid. (As amended by R. A. 6715)
Art. 114. Deposits for loss or damage. No employer shall require
Art. 111. Attorneys fees. his worker to make deposits from which deduction shall be made, for
(a) In cases of unlawful withholding of wages the culpable party the reimbursement of loss of or damage to tools, materials or
may be assessed attorneys fees equivalent to ten percent of the equipment supplied by the employer, except when the employer is
amount of wages recovered. engaged in such trades, occupations or business where the practice of
making deductions or requiring deposits is a recognized one, or is
(b) It shall be unlawful for any person to demand or accept, in any necessary or desirable as determined by the Secretary of Labor in
judicial or administrative proceedings for the recovery of the appropriate rules and regulations.
wages, attorneys fees which exceed ten percent of the amount
of wages recovered. Art. 115. Limitations. No deduction from the deposits of an
employee for the actual amount of the loss or damage shall be made
CHAPTER IV unless the employee has been heard thereon, and his responsibility
Prohibitions Regarding Wages has been clearly shown.
Art. 112. Non-interference in disposal of wages. No employer Art. 116. Withholding of wages and kickbacks prohibited. It shall
shall limit or otherwise interfere with the freedom of any employee to be unlawful for any person, directly or indirectly, to withhold any
dispose of his wages. He shall not in any manner force, compel or amount from the wages of a worker or induce him to give up any part
oblige his employees to purchase merchandise, commodities or other

Atty. Marlon Manuel
of his wages by force, stealth, intimidation, threat or by any other (b) To formulate policies and guidelines on wages, incomes and
means whatsoever without the workers consent. productivity improvement at the enterprise, industry and
national levels;
Art. 117. Deduction to ensure employment. It shall be unlawful to (c) To prescribe rules and guidelines for the determination of
make any deduction from the wages of any employee for the benefit appropriate minimum wage and productivity measures at the
of the employer or his representative or intermediary as consideration regional, provincial or industry levels;
of a promise of employment or retention in employment.
(d) To review regional wage levels set by the Regional Tripartite
Art. 118. Retaliatory measures. It shall be unlawful for an Wages and Productivity Boards to determine if these are in
employer to refuse to pay or reduce the wages and benefits, accordance with prescribed guidelines and national development
discharge or in any manner discriminate against any employee who plans;
has filed any complaint or instituted any proceeding under this Title or (e) To undertake studies, researches and surveys necessary for the
has testified or is about to testify in such proceedings. attainment of its functions and objectives, and to collect and
compile data and periodically disseminate information on wages
Art. 119. False reporting. It shall be unlawful for any person to and productivity and other related information, including, but
make any statement, report or record filed or kept pursuant to the not limited to, employment, cost-of-living, labor costs,
provisions of this Code knowing such statement, report or record to investments and returns;
be false in any material respect. (f) To review plans and programs of the regional Tripartite Wages
and Productivity Boards to determine whether these are
CHAPTER V consistent with national development plans;
Wage Studies, Wage Agreements and Wage Determination
(g) To exercise technical and administrative supervision over the
Art. 120. Creation of the National Wages and Productivity Regional Tripartite Wages and Productivity Boards;
Commission. There is hereby created a National Wages and (h) To call, from time to time, a national tripartite conference of
Productivity Commission, hereinafter referred to as the Commission, representatives of government, workers, and employers for the
which shall be attached to the Department of Labor and Employment consideration of measures to promote wage rationalization and
(DOLE) for policy and program coordination. (As amended by RA productivity; and
6727) (i) To exercise such powers and functions as may be necessary to
implement this Act.
Art. 121. Powers and Functions of the Commission. The
Commission shall have the following powers and functions: The Commission shall be composed of the Secretary of Labor
and Employment as ex-officio chairman, the Director-General of the
(a) To act as the national consultative and advisory body to the National Economic and Development Authority (NEDA) as ex-officio
President of the Philippines and Congress on matters relating to vice-chairman, and two (2) members each from workers and
wages, incomes and productivity; employers sectors who shall be appointed by the President of the

Atty. Marlon Manuel
Philippines upon recommendation of the Secretary of Labor and the corresponding wage orders, subject to guidelines issued by
Employment to be made on the basis of the list of nominees the Commission;
submitted by the workers and employers sectors, respectively, and (c) To undertake studies, researches, and surveys necessary for the
who shall serve for a term of five (5) years. The Executive Director of attainment of their functions, objectives and programs and to
the Commission shall also be a member of the Commission. collect and compile data on wages, incomes, productivity and
The Commission shall be assisted by a Secretariat to be other related information and periodically disseminate the same;
headed by an Executive Director and two (2) Deputy Directors, who (d) To coordinate with the other Regional Boards as may be
shall be appointed by the President of the Philippines, upon necessary to attain the policy and intention of this Code;
recommendation of the Secretary of Labor and Employment.
(e) To receive, process and act on applications for exemption from
The Executive Director shall have the same rank, salary, prescribed wage rates as may be provided by law or any Wage
benefits and other emoluments as that of a Department Assistant Order; and
Secretary, while the Deputy Directors shall have the same rank,
salary, benefits and other emoluments as that of a Bureau Director. (f) To exercise such other powers and functions as may be
The members of the Commission representing labor and management necessary to carry out their mandate under this Code.
shall have the same rank, emoluments, allowances and other benefits Implementation of the plans, programs and projects of the
as those prescribed by law for labor and management representatives Regional Boards referred to in the second paragraph, letter (a) of this
in the Employees Compensation Commission. (As amended by RA Article, shall be through the respective regional offices of the
6727) Department of Labor and Employment within their territorial
jurisdiction; Provided, however, That the Regional Boards shall have
Art. 122. Creation of Regional Tripartite Wages and Productivity technical supervision over the regional office of the Department of
Boards. There is hereby created Regional Tripartite Wages and Labor and Employment with respect to the implementation of said
Productivity Boards, hereinafter referred to as Regional Boards in all plans, programs and projects.
regions, including autonomous regions as may be established by law. Each Regional Board shall be composed of the Regional
The Commission shall determine the offices/headquarters of the Director of the Department of Labor and Employment as chairman,
respective Regional Boards. the Regional Directors of the National Economic and Development
The Regional Boards shall have the following powers and Authority and Department of Trade and Industry as vice-chairman
functions in their respective territorial jurisdiction: and two (2) members each from workers and employers sectors who
(a) To develop plans, programs and projects relative to wages, shall be appointed by the President of the Philippines, upon
incomes and productivity improvement for their respective recommendation of the Secretary of Labor and Employment, to be
regions; made on the basis of the list of nominees submitted by the workers
and employers sectors, respectively, and who shall serve for a term of
(b) To determine and fix minimum wage rates applicable in their five (5) years.
respective regions, provinces or industries therein and to issue
Each Regional Board to be headed by its chairman shall be
assisted by a Secretariat. (As amended by RA 6727)

Atty. Marlon Manuel
(b) Wage adjustment vis-a-vis the consumer price index;
Art. 123. Wage Order. Whenever conditions in the region so (c) The cost of living and changes or increases therein;
warrant, the Regional Board shall investigate and study all pertinent
facts; and based on the standards and criteria herein prescribed, shall (d) The needs of workers and their families;
proceed to determine whether a Wage Order should be issued. Any (e) The need to induce industries to invest in the countryside;
such Wage Order shall take effect after fifteen (15) days from its (f) Improvements in standards of living;
complete publication in at least one (1) newspaper of general
circulation in the region. (g) The prevailing wage levels;
In the performance of its wage-determining functions, the (h) Fair return of the capital invested and capacity to pay of
Regional Board shall conduct public hearings/consultations, giving employers;
notices to employees and employers groups, provincial, city and (i) Effects in employment generation and family income; and
municipal officials and other interested parties. (j) The equitable distribution of income and wealth along the
Any party aggrieved by the Wage Order issued by the Regional imperatives of economic and social development.
Board may appeal such order to the Commission within ten (10) The wages prescribed in accordance with the provisions of this
calendar days from the publication of such order. It shall be Title shall be the standard prevailing minimum wages in every region.
mandatory for the Commission to decide such appeal within sixty (60) These wages shall include wages varying with industries, provinces or
calendar days from the filing thereof. localities if in the judgment of the Regional Board conditions make
The filing of the appeal does not operate to stay the order such local differentiation proper and necessary to effectuate the
unless the person appealing such order shall file with the Commission, purpose of this Title.
an undertaking with a surety or sureties satisfactory to the Any person, company, corporation, partnership or any other
Commission for the payment to the employees affected by the order entity engaged in business shall file and register annually with the
of the corresponding increase, in the event such order is affirmed. (As appropriate Regional Board, Commission and the National Statistics
amended by RA 6727) Office an itemized listing of their labor component, specifying the
names of their workers and employees below the managerial level,
Art. 124. Standards/Criteria for Minimum Wage Fixing. The including learners, apprentices and disabled/handicapped workers
regional minimum wages to be established by the Regional Board who were hired under the terms prescribed in the employment
shall be as nearly adequate as is economically feasible to maintain the contracts, and their corresponding salaries and wages.
minimum standards of living necessary for the health, efficiency and
general well-being of the employees within the framework of the Where the application of any prescribed wage increase by
national economic and social development program. In the virtue of a law or Wage Order issued by any Regional Board results in
determination of such regional minimum wages, the Regional Board distortions of the wage structure within an establishment, the
shall, among other relevant factors, consider the following: employer and the union shall negotiate to correct the distortions. Any
dispute arising from wage distortions shall be resolved through the
(a) The demand for living wages; grievance procedure under their collective bargaining agreement and,

Atty. Marlon Manuel
if it remains unresolved, through voluntary arbitration. Unless Art. 125. Freedom to bargain. No Wage Order shall be
otherwise agreed by the parties in writing, such dispute shall be construed to prevent workers in particular firms or enterprises of
decided by the voluntary arbitrator or panel of voluntary arbitrators industries from bargaining for higher wages with their respective
within ten (10) calendar days from the time said dispute was referred employer.
to voluntary arbitration.
In cases where there are no collective agreements or Art. 126. Prohibition Against Injunction. No preliminary or
recognized labor unions, the employers and workers shall endeavor to permanent injunction or temporary restraining order may be issued
correct such distortions. Any dispute arising therefrom shall be settled by any court, tribunal or other entity against any proceedings before
through the National Conciliation and Mediation Board and, if it the Commission or the Regional Boards. (As amended by RA 6727)
remains unresolved after ten (10) calendar days of conciliation, shall
be referred to the appropriate branch of the National Labor Relations Art. 127. Non-diminution of Benefits. No Wage Order issued by
Commission (NLRC). It shall be mandatory for the NLRC to conduct any Regional Board shall provide for wage rates lower than the
continuous hearings and decide the dispute within twenty (20) statutory minimum wage rates prescribed by Congress. (As amended
calendar days from the time said dispute is submitted for compulsory by RA 6727)
arbitration.
CASES
The pendency of a dispute arising from a wage distortion shall
not in any way delay the applicability of any increase in prescribed
wage rates pursuant to the provisions of law or Wage Order.
Iran v. NLRC, 289 SCRA 433
The statutory definition of wage in Art. 97(f) explicitly includes commissions.
As used herein, a wage distortion shall mean a situation where While commissions are incentives or forms of encouragement to inspire
an increase in prescribed wage rates results in the elimination or employees to put a little more industry on the jobs particularly assigned to them,
severe contraction of intentional quantitative differences in wage or still these commissions are direct remuneration for services rendered. In fact,
salary rates between and among employee groups in an
commissions have been defined as the recompense, compensation or reward of
establishment as to effectively obliterate the distinctions embodied in
an agent, salesman, executor, etc., when the same is calculated as a percentage
such wage structure based on skills, length of service, or other logical
on the amount of his transactions or on the profit to the principal. The nature of
bases of differentiation.
the work of a salesman and the reason for such type of remuneration for services
All workers paid by result, including those who are paid on piecework, rendered demonstrate clearly that commissions are part of a salesmans wages.
takay, pakyaw, or task basis, shall receive not less than the
prescribed wage rates per eight (8) hours of work a day, or a Thus, the commissions earned by private respondents in selling
proportion thereof for working less than eight (8) hours. softdrinks constitute part of the compensation paid to drivers/salesmen and truck
helpers for serving as such and hence must be considered as part of the wages
All recognized learnership and apprenticeship agreements shall
paid them.
be considered automatically modified insofar as their wage clauses are
concerned to reflect the prescribed wage rates. (As amended by RA The NLRC asserts that the inclusion of commissions in the computation
6727) of wages would negate the practice of granting commissions only after an

Atty. Marlon Manuel
employee has earned the minimum wage or over. While such practice does exist,
its prevalence is questionable. Judicial notice was taken of the fact that some Samahang Manggagawa sa Top Form v. NLRC, 295 SCRA 171
salesmen do not receive any basic salary at all but depend entirely on While the employer granted the increases mandated by the wage order, they
commissions and allowances or commissions alone. Such a structure might be refused to grant it across-the-board. Such refusal was aggravated by the fact that
established based on the assumption that the salesmen would thereby be moved prior to the issuance of said wage orders, the employer allegedly promised at the
to work harder to increase their sales commissions but it does not detract from CBA conferences to implement any government-mandated wage increases on an
the character of such commissions as part of wages. across-the-board basis. Such promise was contained in the minutes of the
negotiation but not in the CBA.
Cagayan Sugar Milling Co. v. Secretary, 284 SCRA 150 Held: There was no ULP in refusing to grant the increases across the board. The
Wage Order No. RO2-02 provided for an increase in the minimum wage rates CBA is the law between the parties and proposals not a part thereof cannot be
for Region II. More than a year later, the Regional Board passed Wage Order claimed.
RO2-02-A amending the earlier wage order and providing instead for an across-
the-board increase in wages of employees in Region II, retroactive to the date of The fact that the company had once upon a time granted an across-the-
effectivity of Wage Order RO2-02. Petitioner assails the validity of Wage Order board increase does not make that single instance an established company
RO2-02-A on the ground that it was passed without the required public practice.
consultation and newspaper publication. Petitioners contention on the issue of wage distortion and the resulting
Held: Wage Order RO2-02-A is invalid. allegation of discrimination are anchored on its dubious position that the
employers promise to grant an across-the-board increase reflected in the
In wage-fixing, factors such as fair return of capital invested, the need to induce minutes is an enforceable part of the CBA. The issue of whether or not a wage
industries to invest in the countryside and the capacity of employers to pay are, distortion exists is a question of fact that is within the jurisdiction of the quasi-
among others, taken into consideration. Hence, our legislators provide for the judicial tribunals. The LA and the NLRC have found that there was no wage
creation of Regional Tripartite Boards composed of representatives from the distortion.
government, the workers, and the employers to determine the appropriate wage
rates per region. Article 123 of the LC also provides that in the performance of Nasipit Lumber Company v. NWPC, 289 SCRA 667
wage determining functions, the Regional Board shall conduct public hearings Petitioners contend that the National Wages and Productivity Commission
and consultations, giving notices to interested parties. Moreover, it mandates (NWPC) gravely abused its discretion in overturning the Regional Tripartite
that the wage order shall take effect only after publication in a newspaper of Wages and Productivity Boards (RTWPB) approval of their application for
general circulation in the region. It is a fundamental rule, borne out of a sense of exemption from a wage order. They argue that under Article 122 (e) of the LC,
fairness, that the public is first notified of a law or wage order before it can be the RTWPB has the power act on applications for exemption from prescribed
held liable for violation thereof. In the case at bar, it is indisputable that there rates. They also maintain that no law expressly requires the approval of the
was no public consultation or hearing conducted prior to the passage of RO2-02- NWPC for the effectivity of the RTWPBs Guideline No. 3.
A. Neither was it published in a newspaper of general circulation as attested in
the minutes of the meeting of the Regional Wage Board that the non-publication Held: Power to prescribe guidelines lodged in the NWPC, not the RTWPB. The
was by consensus of all the board members. LC, as amended by RA 6727 (the Wage Rationalization Act), grants the NWPC

Atty. Marlon Manuel
the power to prescribe rules and guidelines for the determination of appropriate
wages in the country. Hence, guidelines issued by the RTWPB without the Sentinel Security Agency, Inc. v. NLRC, 295 SCRA 171
approval, or worse, contrary to those promulgated by the NWPC are ineffectual, Complainants-employees of Sentinel Security Agency, Inc. were previously
void, and cannot be the source of rights and privileges. assigned to guard the premises of PhilAm. PhilAm subsequently sent notice that
While the RTWPB has the power to fix minimum wage rates under the Agency was again awarded the contract of security services together with a
Article 122 (b) of the LC, such orders are subject to the guidelines prescribed by request to replace all the security guards in the companys offices in Cebu and
the NWPC. To allow RTWPB Guideline No. 3 to take effect without the other places. Upon compliance of the Relief and Transfer Order issued by the
approval of the NWPC is to arrogate unto the RTWPB a power vested in the in Agency (ordering replacement of the complainants as guards of PhilAm and
the NWPC by Article 121 of the Labor Code, as amended. The law cannot be their re-assignment to other clients), the complainants reported but were never
broadened by a mere administrative issuance. Article 122 (e) of the Labor Code given new assignments allegedly because, as the Agency told them, they were
cannot be construed to enable the RTWPB to decide applications for exemption already old. This prompted the complainants to file illegal dismissal cases
on the basis of its own guidelines which were not reviewed and approved by the demanding payment of separation pay, as well as other labor standard benefits.
NWPC for the simple reason that the statutory grant of powers should not be Held: Illegal dismissal. Complainants entitled to reinstatement (or separation
extended by implication beyond what may be necessary for their just and pay) and back wages. However, PhilAm cannot be held liable for separation pay
reasonable execution. and backwages since it is not responsible for the dismissal. It is however
solidarily liable with the Agency for the service incentive leave pay. In
Philippine Air Lines, Inc. v. NLRC, November 9, 1998 Rosewood, the Court explained that, notwithstanding the service contract
STELLAR hired workers to perform janitorial and maintenance services for between the client and the security agency, the two are solidarily liable for the
PAL. When their agreement expired, PAL called for the bidding of its janitorial proper wages prescribed by the Labor Code, pursuant to Articles 106, 107, and
requirements. STELLAR exerted efforts to maintain its contract with PAL 109 thereof. Under these provisions, the indirect employer is solidarily liable for
which, in the meantime, allowed STELLARs employees to continue working the workers wages, in the same manner and extent that it is liable to its direct
on PAL premises. However, PAL subsequently informed STELLAR in a formal employees. This liability covers SIL pay of the complainants during the time
letter that the service agreement would no longer be renewed. Alleging that they they were posted at the Cebu branch of PhilAm. As service had been rendered,
were illegally dismissed, the individual employees filed a case against PAL and the liability has accrued.
STELLAR for illegal dismissal and for payment of separation pay.
Held: There was permissible job contracting and the employees, for the duration Prubankers Assoc. v. Prudential Bank & Trust Company, January 25 1999
of their employ, were not employees of PAL but of STELLAR. In legitimate job The RTWPB of Region V issued W.O. # V-03, which provided for a Cost of
contracting, no ER-EE relation exists between the principal and the contractors Living Allowance (COLA) to workers in the private sector. Subsequently, the
employees. The principal is responsible to the job contractors employees only RTWPB of Region VII issued W.O. # VII-03, which directed the integration of
for the proper payment of wages. But in labor-only contracting, an employer- COLA into the basic pay of all workers. Prubankers Association then demanded
employee relation is created by law between the principal and the labor-only from Prudential Bank that it extend the application of the wage orders to its
contractors employees, such that the former is responsible to such employees, employees outside Regions V and VII, claiming that the regional
as if he or she had directly employed them. implementation of the said orders created a wage distortion in the wage rates.

Atty. Marlon Manuel
Held: No wage distortion. regions of the country. A disparity in wages between employees holding similar
Wage distortion presupposes an increase in the compensation of the position but in different regions does not constitute wage distortion. It is the
lower ranks in an office hierarchy without a corresponding raise for those hierarchy of positions and the disparity of their corresponding wages and other
higher-tiered employees in the same region of the country, resulting in the emoluments that are sought to be preserved by the concept of wage distortion.
elimination or severe diminution of the distinction between the 2 groups. Such Put differently, a wage distortion arises when a wage order engenders wage
distortion does not arise when a wage order gives employees in 1 branch higher parity between employees in different rungs of the organizational ladder of the
compensation than that given to their counterpart in other regions occupying the same establishment. It bears emphasis that wage distortion involves a parity in
same pay scale, who are not covered by said wage order. the salary rates of different pay classes which, as a result, eliminates the
distinction between the different ranks in the same region.
Where a significant change occurs at the lowest level of positions in
terms of basic wage without a corresponding change in the other level in the The difference in wages between employees in the same pay scale in
hierarchy of positions, negating as a result thereof the distinction between one different regions is not the mischief sought to be banished by the law. The Wage
level of position from the next higher level, and resulting in a party between the Rationalization Act recognizes existing regional disparities in the cost of living.
lowest level and the next higher level or rank, between new entrants and old Petitioner also avers that the implementation of the Wage Order in only
hires, there exists a wage distortion. one region violates the equal-pay-for-equal-work principle. This is not correct.
Wage distortion involves four elements: The law mandates that wages in every region must be set by the particular wage
board of that region, based on the prevailing situation therein. Necessarily, the
1. An existing hierarchy of positions with corresponding salary rates; wages in different regions will not be uniform.
2. A significant change in the salary rate of a lower pay class without a 13 provides that the minimum wage rates of workers working in
concomitant increase in the salary rate of a higher one; branches or agencies of establishments in or outside of the NCR shall be those
3. The elimination of the distinction between the two levels; applicable in the place where they are sanctioned. The last part of the sentence
4. The existence of the distortion in the same region of the country. was omitted by petitioner in its argument. Given the entire phrase, it is clear that
the statutory provision does not support petitioners view that the
In the present case, it is clear that no distortion resulted from the establishment includes all branches and offices in different regions.
implementation of the subject Wage Orders in the covered branches. In the said
branches, there was an increase in the salary rates of all pay classes. International School Alliance v. Quisumbing, GR 123619, June 8, 2000
Furthermore, the hierarchy of positions based on skills, length of service, and When negotiations for a new CBA were held, International School Alliance of
other logical bases of differentiation was preserved. In other words, the Educators contested the difference in salary rates between the foreign and local
qualitative difference between different pay classes remained the same in all the hires an issue which, along with the issue of whether foreign-hires should be
branches of the affected region. Put differently, the distinction between Pay included in the appropriate BU, caused a deadlock between the parties.
Class 1 and Pay Class 2, for example, was not eliminated as a result of the
implementation of the two Wage Orders in the said region. Held: Practice of according higher salaries to foreign hires illegal.
A wage parity between employees in different rungs is not at issue here, Discrimination, particularly in terms of wages, is frowned upon by the
but wage disparity between employees in the same rung but located in different Labor Code. Article 135, for example, prohibits and penalizes the payment of

Atty. Marlon Manuel
lesser compensation to a female employee against a male employee for work of RULES AND REGULATIONS IMPLEMENTING PRESIDENTIAL
equal value. Article 248 declares it unfair labor practice for an employer to DECREE NO. 851
discriminate in regard to wages in order to encourage or discourage membership
in any labor organization. By virtue of the powers vested in me by law, the following rules
and regulations implementing Presidential Decree No. 851 are hereby
If an employer accords employees the same position and rank, the
issued for the guidance of all concerned.
presumption is that they perform equal work.
Sec. 1. Payment of 13-month Pay - All employers covered by
F. THIRTEENTH-MONTH PAY Presidential Decree No. 851, hereinafter referred to as the Decree,
shall pay to all their employees receiving a basic salary of not more
PRESIDENTIAL DECREE NO. 851 than P1,000 a month a thirteenth-month pay not later than December
REQUIRING ALL EMPLOYERS TO PAY THEIR EMPLOYEES A 13TH 24 of every year.
MONTH PAY
Sec. 2. Definition of certain terms - As used in this issuance.
WHEREAS, it is necessary to further protect the level of real
wages from the ravage of world-wide inflation; a) Thirteenth-moth pay shall mean one twelfth (1/12) of the basic
WHEREAS, there has been no increase in the legal minimum salary of an employee within a calendar year;
wage rates since 1970; b) Basic salary shall include all remunerations or earnings paid by
WHEREAS, the Christmas season is an opportune time for an employer to an employee for services rendered but may not
society to show its concern for the plight of the working masses so include cost-of-living allowances granted pursuant to Presidential
they may properly celebrate Christmas and New Year. Decree No. 525 or Letter of Instructions No. 174, profit-sharing
NOW, THEREFORE, I, FERDINAND E. MARCOS, by virtue of the payments, and all allowances and monetary benefits which are
powers vested in me by the Constitution do hereby decree as follows: not considered or integrated as part of the regular or basic salary
Sec. 1. All employers are hereby required to pay all their of the employee at the time of the promulgation of the Decree on
employees receiving a basic salary of not more than P1,000 a month, December 16, 1975.
regardless of the nature of their employment, a 13th-month pay not
later than December 24 of every year. Sec. 3. Employers covered - The Decree shall apply to all
employers except to:
Sec. 2. Employers already paying their employees a 13th- a) Distressed employers, such as (1) those which are currently
month pay or its equivalent are not covered by this Decree. incurring substantial losses or (2) in the case of non-profit
institutions and organizations, where their income, whether from
Sec. 3. This Decree shall take effect immediately. donations, contributions, grants and other earnings from any
source, has consistently declined by more than forty (40%)
Done in the City of Manila, this 16th day of December 1975. percent of their normal income for the last two (2) years, subject
to the provision of Section 7 of this issuance;

Atty. Marlon Manuel
b) The Government and any of its political subdivisions, including wages are paid, provided that they have worked for at least one
government-owned and controlled corporations, except those month during the calendar year.
corporations operating essentially as private subsidiaries of the
Government; Sec. 5. Option of covered employers - A covered employer
c) Employers already paying their employees 13-month pay or may pay one-half of the 13th-month pay required by the Decree
more in a calendar year of its equivalent at the time of this before the opening of the regular school year and the other half on or
issuance; before the 24th day of December of every year.
d) Employers of household helpers and persons in the personal In any establishment where a union has been recognized or
service of another in relation to such workers; and certified as the collective bargaining agent of the employees therein,
the periodicity or frequency of payment of the 13th month pay may be
e) Employers of those who are paid on purely commission, the subject of agreement.
boundary, or task basis, and those who are paid a fixed amount
for performing a specific work, irrespective of the time consumed Nothing herein shall prevent employers from giving the benefits
in the performance thereof, except where the workers are paid provided in the Decree to their employees who are receiving more
on piece-rate basis in which case the employer shall be covered than One Thousand (P1,000) Pesos a month or benefits higher than
by this issuance insofar as such workers are concerned. those provided by the Decree.
As used herein, workers paid on piece-rate basis shall refer to Sec. 6. Special feature of benefit - The benefits granted under
those who are paid a standard amount for every piece or unit of work this issuance shall not be credited as part of the regular wage of the
produced that is more or less regularly replicated, without regard to employees for purposes of determining overtime and premium pay,
the time spent in producing the same. fringe benefits, as well as premium contributions to the State
The term its equivalent as used in paragraph c) hereof shall Insurance Fund, social security, medicare and private welfare and
include Christmas bonus, mid-year bonus, profit-sharing payments and retirement plans.
other cash bonuses amounting to not less than 1/12th of the basic
salary but shall not include cash and stock dividends, cost of living Sec. 7. Exemption of Distressed employers - Distressed
allowances and all other allowances regularly enjoyed by the employers shall qualify for exemption from the requirement of the
employee, as well as non-monetary benefits. Where an employer pays Decree upon prior authorization by the Secretary of Labor. Petitions for
less than 1/12th of the employees basic salary, the employer shall pay exemptions may be filed within the nearest regional office having
the difference. jurisdiction over the employer not later than January 15, 1976. The
regional offices shall transmit the petitions to the Secretary of Labor
Sec. 4. Employees covered - Except as provided in Section 3 within 24 hours from receipt thereof.
of this issuance, all employees of covered employers shall be entitled
to benefit provided under the Decree who are receiving not more than Sec. 8. Report of compliance - Every covered employer shall
P1,000 a month, regardless of their position, designation or make a report of his compliance with the Decree to the nearest
employment status, and irrespective of the method by which their regional labor office not later than January 15 of each year.

Atty. Marlon Manuel
The report shall conform substantially with the following form: SUPPLEMENTARY RULES AND REGULATIONS IMPLEMENTING
P.D. NO. 851
REPORT ON COMPLIANCE WITH PD NO. 851
1. Name of establishment To insure uniformity in the interpretation, application and
2. Address enforcement of the provisions of P.D. No. 851 and its implementing
3. Principal product or business regulations, the following clarifications are hereby made for the
4. Total employment information and guidance of all concerned:
5. Total number of workers benefited
6. Amount granted per employee 1. Contractors and Subcontractors, including Security and Watchman
7. Total amount of benefits granted Agencies, are exempt for the year 1975 subject to the following
8. Name, position and tel. no. of person giving information conditions:
a) that the contracts of such enterprises were entered into before
Sec. 9. Adjudication of claims - Non-payment of the December 16, 1975;
thirteenth-month pay provided by the Decree and these rules shall be
treated as money claims cases and shall be processed in accordance b) that such enterprises have complied with all labor standards
with the Rules Implementing the Labor Code of the Philippines and the laws during the year;
Rules of the National Labor Relations Commission. c) that the contract cannot really accommodate 13-month pay or
its equivalent; and
Sec. 10. Prohibition against reduction or elimination of d) that the contract does not provide for cost escalation clause.
benefits - Nothing herein shall be construed to authorize any employer
to eliminate, or diminish in any way, supplements, or other employee This exemption is without prejudice on the part of the workers
benefits or favorable practice being enjoyed by the employee at the to negotiate with their employers or to seek payment thereof by filing
time of promulgation of this issuance. appropriate complaints with the Regional Offices of the Department of
Labor.
Sec. 11. Transitory Provision - These rules and regulations
shall take effect immediately and for purposes of the 13-month pay for 2. Private school teachers, including faculty members of colleges and
1975, the same shall apply only to those who are employees as of universities, are entitled to 1/12 of their annual basic pay
December 16, 1975. regardless of the number of months they teach or are paid within a
year.
Manila, Philippines, 22 December 1975.
3. New establishments operating for less than one year are not
covered except subsidiaries or branches of foreign and domestic
corporations.

Atty. Marlon Manuel
4. Overtime pay, earnings and other remunerations which are not a) A certified true copy of the income tax returns for the last two
part of the basic salary shall not be included in the computation of (2) years;
the 13-month pay. b) A certified copy of the financial reports for the last two (2)
years filed with the Government entities, such as the
5. In view of the lack of sufficient time for the dissemination of the Securities and Exchange Commission, Department of Trade,
provisions of P.D. No. 851 and its Rules and the unavailability of Department of Industries and Board of Investments;
adequate cash flow due to the long holiday season, compliance and
reporting of compliance with this Decree are hereby extended up to c) A detailed sworn statement of the actual monthly losses not
March 31, 1976 except in private schools where compliance for covered by the report required under paragraph (b) above and
1975 may be made not later than 30 June 1976. such other proofs or documents as may be required by the
Chairman, Wage Commission to establish such exemption.
6. Nothing herein shall sanction the withdrawal or diminution of any casia
compensation, benefits or any supplements being enjoyed by the
employees on the effective date of this issuance. 2. The Chairman, Wage Commission and the duly designated staff,
shall evaluate all petitions for exemption and make appropriate
Manila, January 16, 1976 recommendations within 20 working days from receipt of the
petition to the Secretary of Labor.
ADMINISTRATIVE ORDER NO. 2 SERIES OF 1976
3. Whenever a petition for exemption has been filed, and complaint
In the interest of public service and efficiency, more particularly for non-compliance shall be held in abeyance pending the
to facilitate the disposition of cases involving petitions for exemption, disposition or resolution of the petition for exemption.
complaints, enforcement and implementation of P.D. No. 851 and its
implementing rules and regulations, the following guidelines shall be II. Complaint, enforcement and/or implementation -
followed:
1. All complaints for non-payment of the 13th-month pay shall be
I. Petition for exemption - filed with the Field Services Division of the Regional Office
concerned. The Regional Director shall direct the said Division to
1. The Regional Office concerned shall transmit immediately the conduct an inspection and investigation in connection with the
petition for exemption to the Chairman, Wage Commission with complaint filed.
Comments and recommendations, if any.
2. The Field Service Division of the Regional Office concerned shall
The petition shall contain a sworn statement on the inability see to it that all covered employees comply with PD No. 851.
to implement the Decree and the reasons therefore and shall be
accompanied by the following documents and statements: The Regional Director shall submit a monthly progress
report of compliance with the Decree.

Atty. Marlon Manuel
The reports of the Regional Offices shall be submitted to the commission are also entitled to the mandated 13 th month pay, based on their total
LSS and BLS, and shall contain the following: earnings during the calendar year, i.e., on both their fixed and guaranteed wage
a) The total number of establishments; and commission.
b) Total number of workers benefited; and Therefore, every employee receiving a commission in addition to a
fixed or guaranteed wage or salary, is entitled to a 13 th month pay. It is
c) Total amount of benefits paid.
immaterial whether the employees concerned are paid a guaranteed wage plus
3. The Regional Office shall compile, analyze and evaluate compliance commission or a commission with guaranteed wage inasmuch as the bottom line
reports and update the listing of establishments on the basis of the is that they receive a guaranteed wage.
reports submitted. In this case, while the bus drivers and conductors are considered by the
Any prior order, circular, instruction or memorandum or parts company as being compensated on a commission basis, they are not paid purely
thereof, inconsistent herewith are hereby revoked. by what they receive as commission. The company admitted that they are
This Order shall take effect immediately. automatically entitled to the basic minimum pay mandated by law in case the
commissions they earned be less than the basic minimum pay. Evidently
Manila, 9 January 1976. therefore, the commissions form part of their wage or salary. The label is not
controlling. It is the nature of the renumeration and the purpose for which the
CASES 13th month pay was given to alleviate the plight of the working masses who are
receiving low wages that controls.
PACIWU v. NLRC, 247 SCRA 256
PACIWU instituted a complaint with NLRC for payment of 13 th month pay in Philippine Duplicators, Inc. v. NLRC, 241 SCRA 380
behalf of the drivers and conductors of respondent companys Visayan Philippine Duplicators was ordered by the LA to pay its employees 13 th month
operation. It maintained that although said employees are compensated on a pay computed on the basis of their fixed wages plus sales commission. It
purely commission basis as described in their CBA, they are automatically appealed to the SC which dismissed the petition. Meantime, the SC, through
entitled to the basic minimum pay mandated by law including 13 th month pay. another division, rendered a decision in two cases which had questioned the
On the other hand, the employer contends that since they are compensated on validity of the provision in the Guidelines implementing MO No. 28 which
commission basis, they are not entitled to 13th month pay. stated: Employees who are paid a fixed or guaranteed wage plus commission
Held: Entitled to 13th month pay. are also entitled to the mandated 13th month pay, based on their total earning
during the calendar year, i.e., on both their fixed and guaranteed wage and
In 1975, PD 851 (13th Month Pay Law) was promulgated and contained a commission. In these cases, the SC Second Division declared said section null
provision that employers of those who are paid on purely commission, and void; in other words, commissions should not be included in determining
boundary, or task basis are not covered. In 1986, Pres. Aquino issued a Memo the 13th month pay. Learning about the ruling, Philippine Duplicators went up
Order which required all employers to pay all their rank-and-file employees a again to the SC.
13th month pay. In connection with this, a MOLE Explanatory Bulletin was
issued providing that employees who are paid a fixed or guaranteed wage plus Held: Still denied.

Atty. Marlon Manuel
The sales commissions were an integral part of the basic salary structure of excluded in computing the 13th month pay. However, sales commissions, which
Philippine Duplicators employees-salesmen. These commissions are not are effectively an integral portion of the basic salary structure of an employee,
overtime payments, nor profit-sharing payments, nor any other fringe benefit. shall be included in determining his 13th month pay.
Thus, the salesmens sales commissions, comprising a pre-determined percent of
the selling price of the goods sold by each salesman, were properly included in G. BONUS
the term basic salary for purposes of computing their 13 th month pay.
In contrast, the so-called commissions in the other case which were paid Cases
to med. reps. and the rank and file are excluded from the term basic salary
because these were paid as productivity bonuses (i.e., additional monetary Manila Banking Corp. v. NLRC, 279 SCRA 602
benefits not properly included in the term basic salary; bonuses generally tied Private respondents filed a complaint against Manilabank and its receiver with
to the productivity, or capacity for revenue production, of a corporation; such the arbitration branch of the NLRC claiming entitlement to additional benefits
bonuses closely resemble profit-sharing payments and have no clear, direct, or alleged to have accrued from 1984 to their effective dates of termination. Such
necessary relation to the amount of work actually done by each employee). claim to the entitlement of the foregoing benefits was based on Manilabanks
alleged practice, policy, and tradition of awarding said benefits. They contended
If an employer cannot be compelled to pay a productivity bonus to his that the policy has ripened into property rights in their favor.
employees, it should follow that such productivity bonus, when given, should
not be deemed to fall within the basic salary of employees when the time Manilabank argued that the additional benefits sought are without basis
comes to compute their 13th month pay. since the same are conferred by management only when it deems necessary to
do so. The award of the said benefits is in the nature of a management
Additional payments made to employees, to the extent they partake of prerogative which, it contended, can be withheld by management upon a clear
the nature of profit-sharing payments, are properly excluded from the ambit of showing that the company is not in a position to grant them either because of
the term basic salary for purposes of computing the 13 th month pay due to financial difficulties or circumstances which do not warrant conferment of such
employees. benefits.
The Rules implementing PD No. 851 sought to clarify the scope of Held: A bonus is a gratuity or act of liberality of the giver of which the
items excluded in the computation of the 13th month pay; viz.: Overtime pay, recipient has no right to demand as a matter of right. It is something given in
earnings and other renumerations which are not part of the basic salary shall addition to what is ordinarily received by or strictly due the recipient. The
not be included in the computation of the 13th month pay. granting of a bonus is basically a management prerogative.
We observe that the term basic salary is cast in open ended and It is evident that the bank was operating on net losses before its eventual
apparently circular terms: Other renumerations which are not part of the basic closure in 1987 and liquidation in 1988. Clearly, there was no success in
salary. However, what particular types of earnings and renumeration are or are business or realization of profits to speak of that would warrant the conferment
not properly included or integrated in the basic salary are questions to be of additional benefits sought by private respondents. No company should be
resolved on a case to case basis, in the light of the specific and detailed facts of compelled to act liberally and confer upon its employees additional benefits over
each case. In principle, where these earnings and renumeration are closely akin and above those mandated by law when it is plagued by economic difficulties
to fringe benefits, overtime pay, or profit-sharing payments, they are properly and financial losses.

Atty. Marlon Manuel
Dissent: The general rule is that a bonus is a gratuity or act of liberality of the fifteen (15%) percent for management. The share of the employees
giver of which the recipient has no right to demand as a matter of right. A bonus, shall be equally distributed among them. In case the service charge is
however, is demandable and enforceable when it is made part of the wage or abolished, the share of the covered employees shall be considered
salary or compensation of the employee. Whether or not a bonus forms part of integrated into their wages.
wages depends upon the circumstances or conditions for its payment. If it is an
additional compensation which the employer promised and agreed to give Omnibus Rules, Book III
without any conditions imposed for its payment, such as success of business or
greater production of output, then it is part of the wage. But if it is paid only if RULE V
profits are realized or a certain amount of productivity achieved, it cannot be Service Incentive Leave
considered part of the wages.
SECTION 1. Coverage. This rule shall apply to all employees
H. Service Charge and Service Incentive Leave except:
(a) Those of the government and any of its political subdivisions,
Labor Code including government-owned and controlled corporations;
(b) Domestic helpers and persons in the personal service of another;
Art. 95. Right to service incentive leave.
(c) Managerial employees as defined in Book III of this Code;
(a) Every employee who has rendered at least one year of service
(d) Field personnel and other employees whose performance is
shall be entitled to a yearly service incentive leave of five days
unsupervised by the employer including those who are engaged
with pay.
on task or contract basis, purely commission basis, or those who
(b) This provision shall not apply to those who are already enjoying are paid a fixed amount for performing work irrespective of the
the benefit herein provided, those enjoying vacation leave with time consumed in the performance thereof;
pay at least five days and those employed in establishments
(e) Those who are already enjoying the benefit herein provided;
regularly employing less than ten employees or in
establishments exempted from granting this benefit by the (f) Those enjoying vacation leave with pay of at least five days; and
Secretary of Labor after considering the viability or financial (g) Those employed in establishments regularly employing less than
condition of such establishment. ten employees.
(c) The grant of benefit in excess of that provided herein shall not
be made a subject of arbitration or any court of administrative SECTION 2. Right to service incentive leave. Every employee who
action. has rendered at least one year of service shall be entitled to a yearly
service incentive leave of five days with pay.
Art. 96. Service charges. All service charges collected by
hotels, restaurants and similar establishments shall be distributed at SECTION 3. Definition of certain terms. The term "at least one-
the rate of eighty-five (85%) percent for all covered employees and year service" shall mean service for not less than 12 months, whether
continuous or broken reckoned from the date the employee started

Atty. Marlon Manuel
working, including authorized absences and paid regular holidays such managerial actions. All employees not falling within this definition
unless the working days in the establishment as a matter of practice or shall be considered rank-and-file employees.
policy, or that provided in the employment contract is less than 12
months, in which case said period shall be considered as one year. SECTION 3. Distribution of Service Charges. All service charges
collected by covered employers shall be distributed at the rate of 85%
SECTION 4. Accrual of benefit. Entitlement to the benefit for the employees and 15% for the management. The 85% shall be
provided in this Rule shall start December 16, 1975, the date the distributed equally among the covered employees. The 15% shall be
amendatory provision of the Code took effect. for the disposition by management to answer for losses and breakages
and distribution to managerial employees at the discretion of the
SECTION 5. Treatment of benefit. The service incentive leave management in the latter case.
shall be commutable to its money equivalent if not used or exhausted
at the end of the year. SECTION 4. Frequency of distribution. The shares referred to
herein shall be distributed and paid to the employees not less than
SECTION 6. Relation to agreements. Nothing in the Rule shall once every two (2) weeks or twice a month at intervals not exceeding
justify an employer from withdrawing or reducing any benefits, sixteen (16) days.
supplements or payments as provided in existing individual or
collective agreements or employers practices or policies. SECTION 5. Permanency of service charges. In case the service
charges is abolished, the share of covered employees shall be
RULE VI considered integrated in their wages. The basis of the amount to be
Service Charges integrated shall be the average monthly share of each employee for
the past twelve (12) months immediately preceding the abolition of
SECTION 1. Coverage. This rule shall apply only to withdrawal of such charges.
establishments collecting service charges such as hotels, restaurants,
lodging houses, night clubs, cocktail lounge, massage clinics, bars, SECTION 6. Relation to agreements. Nothing in this Rule shall
casinos and gambling houses, and similar enterprises, including those prevent the employer and his employees from entering into any
entities operating primarily as private subsidiaries of the Government. agreement with terms more favorable to the employees than those
provided herein, or be used to diminish any benefit granted to the
SECTION 2. Employees covered. This rule shall apply to all employees under existing laws, agreement and voluntary employer
employees of covered employers, regardless of their positions, practice.
designations or employment status, and irrespective of the method by
which their wages are paid except to managerial employees. SECTION 7. This rule shall be without prejudice to existing, future
As used herein, a "managerial employee" shall mean one who is collective bargaining agreements.
vested with powers or prerogatives to lay down and execute Nothing in this rule shall be construed to justify the reduction or
management policies and/or to hire, transfer, suspend, lay-off, recall, diminution of any benefit being enjoyed by any employee at the time
discharge, assign, or discipline employees or to effectively recommend of effectivity of this rule.

Atty. Marlon Manuel
CASE To limit the award to 3 years is to unduly restrict such right. The law
indeed does not prohibit its commutation. Since SIL is clearly demandable after
Fernandez v. NLRC, 285 SCRA 149 one year of service whether continuous or broken or its equivalent period,
Petitioners alleged that they demanded from Lhuillier an increase in their and it is one of the benefits which would have accrued if an employee was not
salaries since business was good and she was evading taxes by making false otherwise illegally dismissed, it is fair and legal that its computation should be
entries in her records of account; that she became angry and threatened them up to the date of reinstatement as provided under Section 279 of the Labor Code.
that something would happen to their employment if they would report her to
the BIR; that shortly thereafter, she suspected them of stealing jewelry from the
pawnshop; that she then verbally informed them not to report for work; and that I. MATERNITY LEAVE AND PATERNITY LEAVE
4 days later, they filed the complaint. The LA said they were illegally dismissed
and granted varying amounts of service incentive leave pay to the petitioners LABOR CODE
based on the length of their tenure (which varried from 6 to 33 years). While
recommending that the LAs decision be reinstated substantially, the OSG Art. 133. Maternity leave benefits.
recommended that the award of SIL be limited to 3 years because Article 291 (a) Every employer shall grant to any pregnant woman employee,
provides that all money claims arising from employer-employee relations who has rendered an aggregate service of at least six (6)
accruing during the effectivity of this Code shall be filed within 3 years from the months for the last twelve (12) months, maternity leave of at
time the cause of action accrued; otherwise they shall be forever barred. least two (2) weeks prior to the expected date of delivery and
Petitioners counter that Article 291 speaks clearly on the prescription another four (4) weeks after normal delivery or abortion, with
of filing [an] action upon monetary claims within 3 years from the time the full pay based on her regular or average weekly wages. The
cause of action accrued, but it is not a prescription of a period of time for the employer may require from any woman employee applying for
computation of monetary claims. maternity leave the production of a medical certificate stating
that delivery will probably take place within two weeks.
Held: The clear policy of the LC is to grant SIL pay to workers in all
establishments, subject to a few exceptions. The IRR provides that [e]very (b) The maternity leave shall be extended without pay on account of
illness medically certified to arise out of the pregnancy, delivery,
employee who has rendered at least one year of service shall be entitled to a
abortion or miscarriage, which renders the woman unfit for
yearly SIL of five days with pay. SIL is a right which accrues to every
work, unless she has earned unused leave credits from which
employee who has served within 12 months, whether continuous or broken
such extended leave may be charged.
reckoned from the date the employee started working, including authorized
absences and paid regular holidays unless the working days in the establishment (c) The maternity leave provided in this Article shall be paid by the
as a matter of practice or policy, or that provided in the employment contracts, is employer only for the first four deliveries by a woman employee
less than 12 months, in which case said period shall be considered as one year. after the effectivity of this Code.
It is also commutable to its money equivalent if not used or exhausted at the end
of the year. In other words, an employee who has served for one year is entitled
to it. He may use it as leave days or he may collect its monetary value.

Atty. Marlon Manuel
R.A. 1161, AS AMENDED time of the pregnancy, the employer shall pay to the SSS
damages equivalent to the benefits which said employee would
Sec. 14-A. Maternity Leave Benefit. - A covered female otherwise have been entitled to, and the SSS shall in turn pay
employee who has paid at least three monthly maternity contributions such amount to the employee concerned.
in the twelve-month period preceding the semester of her childbirth,
abortion or miscarriage and who is currently employed shall be paid a REPUBLIC ACT NO. 8187
daily maternity benefit equivalent to one hundred percent (100%) of AN ACT GRANTING PATERNITY LEAVE OF SEVEN (7) DAYS
her present basic salary, allowances and other benefits or the cash WITH FULL PAY TO ALL MARRIED MALE EMPLOYEES IN THE
equivalents of such benefits for sixty (60) days subject to the following PRIVATE AND PUBLIC SECTORS FOR THE FIRST FOUR (4)
conditions: DELIVERIES OF THE LEGITIMATE SPOUSE WITH WHOM HE IS
COHABITING AND FOR OTHER PURPOSES
(a) That the employees shall have notified her employer of her
pregnancy and the probable date of her childbirth which notice
Be it enacted by the Senate and House of Representatives of the
shall be transmitted to the SSS in accordance with the rules and
Philippines in Congress assembled:
regulations it may provide;
(b) That the payment shall be advanced by the employer in two SECTION 1. Short Title. - This Act shall be known as the
equal installments within thirty (30) days from the filing of the Paternity Leave Act of 1996.
maternity leave application;
(c) That in case of caesarian delivery the employee shall be paid the SECTION 2. Notwithstanding any law, rules and regulations to
daily maternity benefit for seventy-eight (78) days. the contrary, every married male employee in the private and public
sectors shall be entitled to a paternity leave of seven (7) days with
(d) That payment of daily maternity benefits shall be a bar to the
full pay for the first four (4) deliveries of the legitimate spouse with
recovery of sickness benefits provided by this Act for the same
whom he is cohabiting. The male employee applying for paternity
compensable period of sixty (60) days for the same childbirth,
leave shall notify his employer of the pregnancy of his legitimate
abortion, or miscarriage;
spouse and the expected date of such delivery.
(e) That the maternity benefits provided under this Section shall be
For purposes, of this Act, delivery shall include childbirth or any
paid only for the first four deliveries after March 13, 1973;
miscarriage.
(f) That the SSS shall immediately reimburse the employer of one
hundred percent (100%) of the amount of maternity benefits SECTION 3. Definition of Term. - For purposes of this Act,
advanced to the employee by the employer upon receipt of Paternity Leave refers to the benefits granted to a married male
satisfactory proof of such payment and legality thereof; and employee allowing him not to report for work for seven (7) days but
(g) That if an employee should give birth or suffer abortion or continues to earn the compensation therefor, on the condition that his
miscarriage without the required contributions having been spouse has delivered a child or suffered a miscarriage for purposes of
remitted for her by her employer to the SSS, or without the enabling him to effectively lend support to his wife in her period of
latter having been previously notified by the employer of the recovery and/or in the nursing of the newly-born child.

Atty. Marlon Manuel
J. MISCELLANEOUS
SECTION 4. The Secretary of Labor and Employment, the
Chairman of the Civil Service Commission and the Secretary of Health CASES
shall, within thirty (30) days from the effectivity of this Act, issue such
rules and regulations necessary for the proper implementation of the More Maritime Agencies, Inc. v. NLRC, 307 SCRA 189
provisions hereof. Petitioners were ordered by the POEA and the NLRC to pay Homicillada
disability and medical benefits for the injury he sustained when, on board the
SECTION 5. Any person, corporation, trust, firm, partnership, MV Rhine, he was directed to open and clean the main engine as well as the first
association or entity found violating this Act or the rules and and second cylinders of the air trunk. Petitioners protested that Homicilladas
regulations promulgated thereunder shall be punished by a fine not
injury was a result of a chronic condition (slipped-disc) and, as such, they could
exceeding Twenty-five thousand pesos (P25,000) or imprisonment of
not be made accountable for it.
not less than thirty (30)days nor more than six (6) months.
Held: Compensable. Even assuming that the ailment was contracted prior to his
If the violation is committed by a corporation, trust or firm,
partnership, association or any other entity, the penalty of
employment, this would not exculpate petitioners from liability. Compensability
imprisonment shall be imposed on the entitys responsible officers, of an ailment does not depend on whether the injury or disease was pre-existing
including, but not limited to, the president, vice-president, chief at the time of the employment but rather if the disease or injury is work-related
executive officer, general manager, managing director or partner or aggravated his condition. It is safe to presume that, at the very least, the
directly responsible therefor. arduous nature of Homicilladas employment had contributed to the aggravation
of his injury, if indeed it was pre-existing at the time of his employment.
SECTION 6. Nondiminution Clause. - Nothing in this Act shall
be construed to reduce any existing benefits of any form granted Philippine Telegraph and Telephone Company v. NLRC, 272 SCRA 596
under existing laws, decrees, executive orders, or any contract PT&T invokes alleged concealment of civil status and defalcation of company
agreement or policy between employer and employee. funds as grounds to fire de Guzman who in turn argues that what motivated
PT&T to terminate her was her having contracted marriage during her
SECTION 7. Repealing Clause. - All laws, ordinances, employment, which is prohibited in its company policies. She claims that she
rules, regulations, issuances, or parts thereof which are was discriminated against and that such a proscription was outlawed by Article
inconsistent with this Act are hereby repealed or modified accordingly. 136.
Held: PT&Ts policy of not accepting or considering as disqualified from
SECTION 8. Effectivity. - This Act shall take effect (15) days
work any woman worker who contracts marriage runs afoul of the test of
from its publication in the Official Gazette or in at least two (2)
discrimination. Contrary to its assertion that it dismissed de Guzman on account
newspapers of national circulation.
of dishonesty, the record shows that it was principally because of the policy that
Approved: June 11, 1996 married women are not qualified for employment.
It would be worthwhile to reflect upon the rationalization of Zialcita, et al vs.
Philippine Air Lines, a decision that emanated from the Office of the President.

Atty. Marlon Manuel
There, a policy of Philippine Air Lines requiring that prospective flight XI. DISPUTE SETTLEMENT
attendants must be single and that they will be automatically separated from the
service once they marry, was declared void, it being violative of the clear LABOR CODE
mandate in Article 136 of the Labor with regard discrimination against married
women. CHAPTER VI
Administration and Enforcement
Art. 128. Visitorial and enforcement power.

(a) The Secretary of Labor and Employment or his duly authorized
representatives, including labor regulation officers, shall have
access to employers records and premises at any time of the
day or night whenever work is being undertaken therein, and
the right to copy therefrom, to question any employee and to
investigate any fact, condition or matter which may be
necessary to determine violations or which may aid in the
enforcement of this Code and of any labor law, wage order or
rules and regulations issued pursuant thereto.
(b) Notwithstanding the provisions of Articles 129 and 217 of this
Code to the contrary, and in cases where the relationship of
employer-employee still exists, the Secretary of Labor and
Employment or his duly authorized representatives shall have
the power to issue compliance orders to give effect to the labor
standards provisions of this Code and other labor legislation
based on the findings of labor employment and enforcement
officers or industrial safety engineers made in the course of
inspection. The Secretary or his duly authorized representatives
shall issue writs of execution to the appropriate authority for the
enforcement of their orders, except in cases where the employer
contests the findings of the labor employment and enforcement
officer and raises issues supported by documentary proofs which
were not considered in the course of inspection.
An order issued by the duly authorized representative of
the Secretary of Labor and Employment under this article may
be appealed to the latter. In case said order involves a monetary

Atty. Marlon Manuel
award, an appeal by the employer may be perfected only upon Art. 129. Recovery of wages, simple money claims and other
the posting of a cash or surety bond issued by a reputable benefits. Upon complaint of any interested party, the Regional
bonding company duly accredited by the Secretary of Labor and Director of the Department of Labor and Employment or any of the
Employment in the amount equivalent to the monetary award in duly authorized hearing officers of the Department is empowered,
the order appealed from. (As amended by RA 7730) through summary proceeding and after due notice, to hear and decide
(c) The Secretary of Labor may likewise order stoppage of work or any matter involving the recovery of wages and other monetary
suspension of operations of any unit or department of an claims and benefits, including legal interest, owing to an employee or
establishment when non-compliance with the law or person employed in domestic or household service or househelper
implementing rules and regulations poses grave and imminent under this Code, arising from employer-employee relations: Provided,
danger to the health and safety of workers in the workplace. That such complaint does not include a claim for reinstatement:
Within twenty-four hours, a hearing shall be conducted to Provided, further, That the aggregate money claims of each employee
determine whether an order for the stoppage of work or or househelper do not exceed five thousand pesos (P5,000). The
suspension of operations shall be lifted or not. In case the Regional Director or hearing officer shall decide or resolve the
violation is attributable to the fault of the employer, he shall pay complaint within thirty (30) calendar days from the date of the filing
the employees concerned their salaries or wages during the of the same. Any sum thus recovered on behalf of any employee or
period of such stoppage of work or suspension of operation. househelper pursuant to this Article shall be held in a special deposit
account by, and shall be paid, on order of the Secretary of Labor and
(d) It shall be unlawful for any person or entity to obstruct, impede, Employment or the Regional Director directly to the employee or
delay or otherwise render ineffective the orders of the Secretary househelper concerned. Any such sum not paid to the employee or
of Labor or his duly authorized representatives issued pursuant househelper, because he cannot be located after diligent and
to the authority granted under this Article, and no inferior court reasonable effort to locate him within a period of three (3) years, shall
or entity shall issue temporary or permanent injunction or be held as a special fund of the Department of Labor and Employment
restraining order or otherwise assume jurisdiction over any case to be used exclusively for the amelioration and benefit of workers.
involving the enforcement orders issued in accordance with this
Article. Any decision or resolution of the Regional Director or hearing
officer pursuant to this provision may be appealed on the same
(e) Any government employee found guilty of violation of, or abuse grounds provided in Article 223 of this Code, within five (5) calendar
of authority under this Article shall, after appropriate days from receipt of a copy of said decision or resolution, to the
administrative investigation, be subject to summary dismissal National Labor Relations Commission which shall resolve the appeal
from the service. within ten (10) calendar days from the submission of the last pleading
(f) The Secretary of Labor may, by appropriate regulations require required or allowed under its rules.
employers to keep and maintain such employment records as The Secretary of Labor and Employment or his duly authorized
may be necessary in aid of his visitorial and enforcement powers representative may supervise the payment of unpaid wages and other
under this Code. monetary claims and benefits, including legal interest, found owing to

Atty. Marlon Manuel
any employee or househelper under this Code. (As amended by RA exclusive appellate jurisdiction over cases within their respective
6715) territorial jurisdiction.
The concurrence of two (2) Commissioners of a division shall
TITLE II - National Labor Relations Commission be necessary for the pronouncement of a judgment or resolution.
Whenever the required membership in a division is not complete and
CHAPTER I the concurrence of two (2) Commissioners to arrive at a judgment or
Creation and Composition resolution cannot be obtained, the Chairman shall designate such
number of additional Commissioners from the other divisions as may
Art. 213. National Labor Relations Commission. There shall be be necessary.
a National Labor Relations Commission which shall be attached to the
Department of Labor and Employment for program and policy The conclusions of a division on any case submitted to it for
coordination only, composed of a Chairman and fourteen (14) decision shall be reached in consultation before the case is assigned
members. to a member for the writing of the opinion. It shall be mandatory for
the division to meet for purposes of the consultation ordained therein.
Five (5) members each shall be chosen from among the A certification to this effect signed by the Presiding Commissioner of
nominees of the workers and employers organizations, respectively. the division shall be issued, and a copy thereof attached to the record
The Chairman and the four (4) remaining members shall come from of the case and served upon the parties.
the public sector, with the latter to be chosen from among the
recommendees of the Secretary of Labor and Employment. The Chairman shall be the Presiding Commissioner of the first
division, and the four (4) other members from the public sector shall
Upon assumption into office, the members nominated by the be the Presiding Commissioners of the second, third, fourth and fifth
workers and employers organizations shall divest themselves of any divisions, respectively. In case of the effective absence or incapacity
affiliation with or interest in the federation or association to which of the Chairman, the Presiding Commissioner of the second division
they belong. shall be the Acting Chairman.
The Commission may sit en banc or in five (5) divisions, each The Chairman, aided by the Executive Clerk of the Commission,
composed of three (3) members. The Commission shall sit en banc shall have administrative supervision over the Commission and its
only for purposes of promulgating rules and regulations governing the regional branches and all its personnel, including the Executive Labor
hearing and disposition of cases before any of its divisions and Arbiters and Labor Arbiters.
regional branches and formulating policies affecting its administration
and operations. The Commission shall exercise its adjudicatory and all The Commission, when sitting en banc, shall be assisted by the
other powers, functions, and duties through its divisions. Of the five same Executive Clerk, and, when acting thru its divisions, by said
(5) divisions, the first and second divisions shall handle cases coming Executive Clerk for its first division and four (4) other Deputy
from the National Capital Region and the third, fourth and fifth Executive Clerks for the second, third, fourth and fifth divisions,
divisions, cases from other parts of Luzon, from the Visayas and respectively, in the performance of such similar or equivalent functions
Mindanao, respectively. The divisions of the Commission shall have and duties as are discharged by the Clerk of Court and Deputy Clerks
of Court of the Court of Appeals. (As amended by RA 6715)

Atty. Marlon Manuel
vacancy shall come from the nominees of the sector which nominated
Art. 214. Headquarters, branches and provincial extension units. the predecessor. The Executive Labor Arbiters and Labor Arbiters shall
The Commission and its First, Second, and Third divisions shall have also be appointed by the President, upon recommendation of the
their main offices in Metropolitan Manila, and the fourth and fifth Secretary of Labor and Employment, and shall be subject to the Civil
divisions in the cities of Cebu and Cagayan de Oro, respectively. The Service Law, rules and regulations.
Commission shall establish as many regional branches as there are The Secretary of Labor and Employment shall, in consultation
regional offices of the Department of Labor and Employment, sub- with the Chairman of the Commission, appoint the staff and employees
regional branches or provincial extension units. There shall be as many of the Commission, and its regional branches as the needs of the
labor Arbiters as may be necessary for the effective and efficient service may require, subject to the Civil Service Law, rules and
operation of the Commission. Each regional branch shall be headed by regulations, and upgrade their current salaries, benefits and other
an Executive Labor Arbiter. (As amended by RA 6715) emoluments in accordance with law. (As amended by RA 6715)
Art. 215. Appointment and qualifications. The Chairman and Art. 216. Salaries, benefits and other emoluments. The
other Commissioners shall be members of the Philippine Bar and must Chairman and members of the Commission shall receive an annual
have been engaged in the practice of law in the Philippines for at least salary at least equivalent to, and be entitled to the same allowances
fifteen (15) years, with at least five (5) years experience or exposure and benefits as, those of the Presiding Justice and Associate Justices of
in the field of labor-management relations, and shall preferably be the Court of Appeals, respectively. The Executive Labor Arbiters shall
residents of the region where they are to hold office. The Executive receive an annual salary at least equivalent to that of an Assistance
Labor Arbiters and Labor Arbiters shall likewise be members of the Regional Director of the Department of Labor and Employment and
Philippine Bar and must have been engaged in the practice of law in shall be entitled to the same allowances and benefits as that of a
the Philippines for at least seven (7) years, with at least three (3) Regional Director of said Department. The Labor Arbiters shall receive
years experience or exposure in the field of labor-management an annual salary at least equivalent to, and be entitled to the same
relations: Provided, however, that incumbent Executive Labor Arbiters allowances and benefits as, that of an Assistant Regional Director of
and Labor Arbiters who have been engaged in the practice of law for at the Department of Labor and Employment. In no case, however, shall
least five (5) years may be considered as already qualified for be the provision of this Article result in the diminution of existing
purposes of reappointment as such under this Act. salaries, allowances and benefits of the aforementioned officials. (As
The Chairman and the other Commissioners, the Executive amended by RA 6715)
Labor Arbiters and Labor Arbiters shall hold office during good
behavior until they reach the age of sixty-five (65) years, unless CHAPTER II
sooner removed for cause as provided by law or become incapacitated Powers and Duties
to discharge the duties of their office.
The Chairman, the Division Presiding Commissioners and other Art. 217. Jurisdiction of Labor Arbiters and the Commission.
Commissioners shall all be appointed by the President, subject to (a) Except as otherwise provided under this Code, the Labor Arbiters
confirmation by the Commission on Appointments. Appointment to any shall have original and exclusive jurisdiction to hear and decide,

Atty. Marlon Manuel
within thirty (30) calendar days after the submission of the case Art. 218. Powers of the Commission. The Commission shall
by the parties for decision without extension, even in the have the power and authority:
absence of stenographic notes, the following cases involving all (a) To promulgate rules and regulations governing the hearing and
workers, whether agricultural or non-agricultural: disposition of cases before it and its regional branches, as well as
(1) Unfair labor practice cases; those pertaining to its internal functions and such rules and
(2) Termination disputes; regulations as may be necessary to carry out the purposes of this
Code;
(3) If accompanied with a claim for reinstatement, those cases
that workers may file involving wages, rate of pay, hours of (b) To administer oaths, summon the parties to a controversy, issue
work and other terms and conditions of employment; subpoenas requiring the attendance and testimony of witnesses
or the production of such books, papers, contracts, records,
(4) Claims for actual, moral, exemplary and other forms of statements of accounts, agreements, and others as may be
damages arising from the employer-employee relations; material to a just determination of the matter under
(5) Cases arising from any violation of Article 264 of this Code, investigation, and to testify in any investigation or hearing
including questions involving the legality of strikes and conducted in pursuance of this Code;
lockouts; and (c) To conduct investigation for the determination of a question,
(6) Except claims for Employees Compensation, Social matter or controversy within its jurisdiction, proceed to hear and
Security, Medicare and maternity benefits, all other claims determine the disputes in the absence of any party thereto who
arising from employer-employee relations, including those has been summoned or served with notice to appear, adjourn its
of persons in domestic or household service, involving an hearings to any time and place, refer technical matters or
amount exceeding five thousand pesos (P5,000.00), accounts to an expert and to accept his report as evidence after
whether or not accompanied with a claim for reinstatement. hearing of the parties upon due notice, direct parties to be joined
(b) The Commission shall have exclusive appellate jurisdiction over in or excluded from the proceedings, correct, amend, or waive
all cases decided by Labor Arbiters. any error, defect or irregularity, whether in substance or in form,
give all such directions as it may deem necessary or expedient in
(c) Cases arising from the interpretation or implementation of the determination of the dispute before it, and dismiss any
collective bargaining agreements and those arising from the matter or refrain from further hearing or from determining the
interpretation or enforcement of company personnel policies shall dispute or part thereof, where it is trivial or where further
be disposed of by the Labor Arbiter by referring the same to the proceedings by the Commission are not necessary or desirable;
grievance machinery and voluntary arbitration as may be and
provided in said agreements. (As amended by RA 6715)
(d) To hold any person in contempt direct 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

Atty. Marlon Manuel
Labor Arbiter as to obstruct or interrupt the proceedings before or have been committed and will be continued unless
the same, including disrespect toward said officials, offensive restrained, but no injunction or temporary restraining order
personalities toward others, or refusal to be sworn or to answer shall be issued on account of any threat, prohibited or
as a witness, or to subscribe an affidavit or deposition when unlawful act, except against the person or persons,
lawfully required to do so, may summarily adjudged in direct association or organization making the threat or committing
contempt by said officials and punished by fine not exceeding the prohibited or unlawful act or actually authorizing or
five hundred pesos (P500) or imprisonment not exceeding five ratifying the same after actual knowledge thereof;
(5) days, or both if it be the Commission or a member thereof, or (2) That substantial and irreparable injury to complainants
by a fine not exceeding one hundred pesos (P100) or property will follow;
imprisonment not exceeding one (1) day, or both if it be a Labor
Arbiter. (3) That, as to each item of relief to be granted, greater injury
will be inflicted upon complainant by the denial of relief
The person adjudged in direct contempt by a Labor than will be inflicted upon defendants by the granting of
Arbiter may appeal to the Commission and the execution of the relief;
judgment shall be suspended pending the resolution of the
appeal upon the filing of subject person of a bond on condition (4) That complainant has no adequate remedy at law; and
that he will abide by and perform the judgment of the (5) That the public officers charged with the duty to protect
Commission should the appeal be decided against him. Judgment complainants property are unable or unwilling to furnish
of the Commission on direct contempt is immediately executory adequate protection.
and unappealable. Indirect contempt shall be dealt with by the Such hearing shall be held after due and personal notice
Commission or Labor Arbiter in the manner prescribed under thereof has been served, in such manner as the Commission
Rule 71 of the Revised Rules of Court; and shall direct, to all known persons against whom relief is sought,
(e) To enjoin or restrain any actual or threatened commission of any and also to the Chief Executive and other public officials of the
or all prohibited or unlawful acts or to require the performance of province or city within which the unlawful acts have been
a particular act in any labor dispute which, if not restrained or threatened or committed charged with the duty to protect
performed forthwith, may cause grave or irreparable damage to complainants property: Provided, however, That if a complainant
any party: Provided, That no temporary or permanent injunction shall also allege that, unless a temporary restraining order shall
in any case involving or growing out of a labor dispute as defined be issued without notice, a substantial and irreparable injury to
in this Code shall be issued except after hearing the testimony of complainants property will be unavoidable, such a temporary
witnesses, with opportunity for cross-examination, in support of restraining order may be issued upon testimony under oath,
the allegations of a complaint made under oath, and testimony in sufficient, if sustained, to justify the Commission in issuing a
opposition thereto, if offered, and only after a finding of fact by temporary injunction upon hearing after notice. Such a
the Commission, to the effect: temporary restraining order shall be effective for no longer than
(1) That prohibited or unlawful acts have been threatened and twenty (20) days and shall become void at the expiration of said
will be committed and will be continued unless restrained, twenty (20) days. No such temporary restraining order or

Atty. Marlon Manuel
temporary injunction shall be issued except on condition that Art. 220. Compulsory Arbitrators. The Commission or any Labor
complainant shall first file an undertaking with adequate security Arbiter shall have the power to seek the assistance of other
in an amount to be fixed by the Commission sufficient to government officials and qualified private citizens to act as compulsory
recompense those enjoined for any loss, expense or damage arbitrators on cases referred to them and to fix and assess the fees of
caused by the improvident or erroneous issuance of such order such compulsory arbitrators, taking into account the nature of the
or injunction, including all reasonable costs, together with a case, the time consumed in hearing of the case, the professional
reasonable attorneys fee, and expense of defense against the standing of the arbitrators, the financial capacity of the parties, and
order or against the granting of any injunctive relief sought in the the fees provided in the Rules of Court. (Repealed by Sec. 16, BP Blg.
same proceeding and subsequently denied by the Commission. 130).
The undertaking herein mentioned shall be understood to
constitute an agreement entered into by the complainant and the Art. 221. Technical rules not binding and prior resort to amicable
surety upon which an order may be rendered in the same suit or settlement. In any proceeding before the Commission or any of the
proceeding against said complainant and surety, upon a hearing Labor Arbiters, the rules of evidence prevailing in courts of law or
to assess damages, of which hearing complainant and surety equity shall not be controlling, and it is the spirit and intention of this
shall have reasonable notice, the said complainant and surety Code that the Commission and its members and the Labor Arbiters
submitting themselves to the jurisdiction of the Commission for shall use every and all reasonable means to ascertain the facts in each
that purpose. But nothing herein contained shall deprive any case speedily and objectively, without regard to technicalities of law or
party having a claim or cause of action under or upon such procedure, all in the interest of due process. In any proceeding before
undertaking from electing to pursue his ordinary remedy by suit the Commission or any Labor Arbiter, the parties may be represented
at law or in equity: Provided, further, That the reception of by legal counsel but it shall be the duty of the Chairman, any Presiding
evidence for the application of a writ of injunction may be Commissioner or Commissioner or any Labor Arbiter to exercise
delegated by the Commission to any of its Labor Arbiters who complete control of the proceedings at all stages.
shall conduct such hearings in such places as he may determine Any provision of law to the contrary notwithstanding, the Labor Arbiter
to be accessible to the parties and their witnesses and shall shall exert all efforts towards the amicable settlement of a labor
submit thereafter his recommendation to the Commission. (As dispute within his jurisdiction on or before the first hearing. The same
amended by RA 6715) rule shall apply to the Commission in the exercise of its original
jurisdiction. (As amended by RA 6715)
Art. 219. Ocular inspection. The Chairman, any Commissioner,
Labor Arbiter or their duly authorized representatives may at any time Art. 222. Appearances and fees.
during working hours conduct an ocular inspection on any (a) Non-lawyers may appear before the Commissioner or any Labor
establishment, building, ship or vessel, place or premises, including Arbiter only:
any work, material, implement, machinery, appliance or any object 1. If they represent themselves; or
therein, and ask any employee, laborer or any person as the case may
be for any information or data concerning any matter or question 2. If they represent their organization or members thereof.
relative to the object of the investigation.

Atty. Marlon Manuel
(b) No attorneys fees, negotiation fees or similar charges of any terms and conditions prevailing prior to his dismissal or separation or,
kind arising from any collective bargaining negotiations or at the option of the employer, merely reinstated in the payroll. The
conclusion of the collective agreement shall be imposed on any posting of a bond by the employer shall not stay the execution for
individual member of the contracting union: Provided, however, reinstatement provided herein.
That attorneys fees may be charged against union funds in an To discourage frivolous or dilatory appeals, the Commission or
amount to be agreed upon by the parties. Any contract, the Labor Arbiter shall impose reasonable penalty, including fines or
agreement or arrangement of any sort to the contrary shall be censures, upon the erring parties.
null and void.
In all cases, the appellant shall furnish a copy of the
CHAPTER III memorandum of appeal to the other party who shall file an answer not
Appeal later than ten (10) calendar days from receipt thereof.
The Commission shall decide all cases within twenty (20)
Art. 223. Appeal. Decisions, awards, or orders of the Labor calendar days from receipt of the answer of the appellee. The decision
Arbiter are final and executory unless appealed to the Commission by of the Commission shall be final and executory after ten (10) calendar
any or both parties within ten (10) calendar days from receipt of such days from receipt thereof by the parties.
decisions, awards, or orders. Such appeal may be entertained only on Any law enforcement agency may be deputized by the
any of the following grounds: Secretary of Labor and Employment or the Commission in the
(a) If there is prima facie evidence of abuse of discretion on the part enforcement of decisions, awards, or orders. (As amended by RA
of the Labor Arbiter; 6715)
(b) If the decision, order or award was secured through fraud or
coercion, including graft and corruption; Art. 224. Execution of decisions, orders, or awards.
(c) If made purely on questions of law; and (a) The Secretary of Labor and Employment or any Regional Director,
the Commission or any Labor Arbiter or Med-Arbiter, or the
(d) If serious errors in the findings of facts are raised which would voluntary arbitrator or panel of voluntary arbitrators may, motu
cause grave or irreparable damage or injury to the appellant. propio or on motion of any interested party, issue a writ of
In case of a judgment involving a monetary award, an appeal execution on a judgment within five (5) years from the date it
by the employer may be perfected only upon the posting of a cash or becomes final and executory, requiring a sheriff or a duly
surety bond issued by a reputable bonding company duly accredited by deputized officer to execute or enforce final decisions, orders or
the Commission in the amount equivalent to the monetary award in awards of the Secretary of Labor and Employment or Regional
the judgment appealed from. Director, the Commission, or the Labor Arbiter or Med-Arbiter, or
In any event, the decision of the Labor Arbiter reinstating a voluntary arbitrator or panel of voluntary arbitrators. In any
dismissed or separated employee, insofar as the reinstatement aspect case, it shall be the duty of the responsible officer to separately
is concerned, shall immediately be executory, even pending appeal. furnish immediately the counsel of record and the parties with
The employee shall either be admitted back to work under the same copies of said decisions, orders or awards. Failure to comply with

Atty. Marlon Manuel
the duty prescribed herein shall subject such responsible officer Art. 254. Injunction prohibited. No temporary or permanent
to appropriate administrative sanctions. injunction or restraining order in any case involving or growing out of
(b) The Secretary of Labor and Employment, and the Chairman of labor disputes shall be issued by any court or other entity, except as
the Commission may designate special sheriffs and take any otherwise provided in Articles 218 and 264 of this Code. (As amended
measure under existing laws to ensure compliance with their by BP Blg. 227)
decisions, orders or awards and those of Labor Arbiters and
voluntary arbitrators or panel of voluntary arbitrators, including TITLE VII-A
the imposition of administrative fines which shall not be less than Grievance Machinery and Voluntary Arbitration
five hundred pesos (P500.00) nor more than ten thousand pesos
(P10,000.00). (As amended by RA 6715). Art. 260. Grievance machinery and voluntary arbitration. The
parties to a collective bargaining agreement shall include therein
Art. 225. Contempt powers of the Secretary of Labor and provisions that will ensure the mutual observance of its terms and
Employment. In the exercise of his powers under this Code, the conditions. They shall establish a machinery for the adjustment and
Secretary of Labor and Employment may hold any person in direct or resolution of grievances arising from the interpretation or
indirect contempt and impose the appropriate penalties therefor. implementation of their collective bargaining agreement and those
arising from the interpretation or enforcement of company personnel
TITLE III policies.
Bureau of Labor Relations All grievances submitted to the grievance machinery which are
not settled within seven (7) calendar days from the date of its
Art. 226. Bureau of Labor Relations. The Bureau of Labor submission shall automatically be referred to voluntary arbitration
Relations and the Labor Relations Divisions in the regional offices of prescribed in the collective bargaining agreement.
the Department of Labor and Employment shall have original and For this purpose, parties to a collective bargaining agreement
exclusive authority to act, at their own initiative or upon request of shall name and designate in advance a voluntary arbitrator or panel of
either or both parties, on all inter-union and intra-union conflicts, and voluntary arbitrators, or include in the agreement a procedure for the
all disputes, grievances or problems arising from or affecting labor- selection of such voluntary arbitrator or panel of voluntary arbitrators,
management relations in all workplaces whether agricultural or non- preferably from the listing of qualified Voluntary Arbitrators duly
agricultural, except those arising from the implementation or accredited by the Board. In case the parties fail to select a Voluntary
interpretation of collective bargaining agreements which shall be the Arbitrator or panel of Voluntary Arbitrators, the Board shall designate
subject of grievance procedure and/or voluntary arbitration. the Voluntary Arbitrator or panel of Voluntary Arbitrators, as may be
The Bureau shall have fifteen (15) calendar days to act on labor necessary, pursuant to the selection procedure agreed upon in the
cases before it, subject to extension by agreement of the parties. (As collective bargaining agreement, which shall act with the same force
amended by RA 6715) and effect as if the voluntary arbitrator or panel of voluntary
arbitrators have been selected by the parties as described above. (As
added by RA 6715)

Atty. Marlon Manuel
All parties to the dispute shall be entitled to attend the
Art. 261. Jurisdiction of voluntary arbitrators and panel of arbitration proceedings. The attendance of any third party or the
voluntary arbitrators. The Voluntary Arbitrator or panel of Voluntary exclusion of any witness from the proceedings shall be determined by
Arbitrators shall have original and exclusive jurisdiction to hear and the voluntary arbitrator or panel of voluntary arbitrators. Hearings
decide all unresolved grievances arising from the interpretation or may be adjourned for cause or upon agreement by the parties.
implementation of the Collective Bargaining Agreement and those Unless the parties agree otherwise, it shall be mandatory for
arising from the interpretation or enforcement of company personnel the voluntary arbitrator or panel of voluntary arbitrators to render an
policies referred to in the immediately preceding Article. Accordingly, award or decision within twenty (20) calendar days from the date of
violations of a Collective Bargaining Agreement, except those which submission of the dispute to voluntary arbitration.
are gross in character, shall no longer be treated as unfair labor
practice and shall be resolved as grievances under the Collective The award or decision of the Voluntary Arbitrator or panel of
Bargaining Agreement. For purposes of this Article, gross violations of Voluntary Arbitrators shall contain the facts and the law on which it is
a Collective Bargaining Agreement shall mean flagrant and/or based. It shall be final and executory after ten (10) calendar days from
malicious refusal to comply with the economic provisions of such receipt of the copy of the award or decision by the parties.
agreement. Upon motion of any interested party, the voluntary arbitrator or
The Commission, its Regional Offices and the Regional Directors panel of voluntary arbitrators or the Labor Arbiter in the region where
of the Department of Labor and Employment shall not entertain the movant resides, in case of the absence or incapacity of the
disputes, grievances or matters under the exclusive and original voluntary arbitrator or panel of voluntary arbitrators for any reason,
jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators may issue a writ of execution requiring either the sheriff of the
and shall immediately dispose and refer the same to the grievance Commission or regular courts or any public official whom the parties
machinery or voluntary arbitration provided in the collective bargaining may designate in the submission agreement to execute the final
agreement. (As added by RA 6715) decision, order or award. (As added by RA 6715)
Art. 262. Jurisdiction over other labor disputes. The voluntary Art. 262-B. Cost of Voluntary Arbitration and Voluntary Arbitrators
arbitrator or panel of voluntary arbitrators, upon agreement of the fee. The parties to a Collective Bargaining Agreement shall provide
parties, shall also hear and decide all other labor disputes including therein a proportionate sharing scheme on the cost of Voluntary
unfair labor practices and bargaining deadlocks. (As added by RA Arbitration including the Voluntary Arbitrators fee. The fixing of fee of
6715) Voluntary Arbitrators or panel of Voluntary Arbitrators, whether
shouldered wholly by the parties or subsidized by the Special
Art. 262-A. Procedures. The voluntary arbitrator or panel of Voluntary Arbitration Fund, shall take into account the following
voluntary arbitrators shall have the power to hold hearings, receive factors:
evidences and take whatever action is necessary to resolve the issue (a) Nature of the case;
or issues subject of the dispute, including efforts to effect a voluntary (b) Time consumed in hearing the case;
settlement between parties.
(c) Professional standing of the voluntary arbitrator;

Atty. Marlon Manuel
(d) Capacity to pay of the parties; and personnel, whose movement and services shall be unhampered
(e) Fees provided for in the Revised Rules of Court. (As added by RA and unrestricted, as are necessary to insure the proper and
6715) adequate protection of the life and health of its patients, most
especially emergency cases, for the duration of the strike or
Art. 263. Strikes and Lockouts. lockout. In such cases, therefore, the Secretary of Labor and
Employment may immediately assume, within twenty four (24)
(g) When, in his opinion, there exists a labor dispute causing or hours from knowledge of the occurrence of such a strike or
likely to cause a strike or lockout in an industry indispensable to lockout, jurisdiction over the same or certify it to the Commission
the national interest, the Secretary of Labor and Employment for compulsory arbitration. For this purpose, the contending
may assume jurisdiction over the dispute and decide it or certify parties are strictly enjoined to comply with such orders,
the same to the Commission for compulsory arbitration. Such prohibitions and/or injunctions as are issued by the Secretary of
assumption or certification shall have the effect of automatically Labor and Employment or the Commission, under pain of
enjoining the intended or impending strike or lockout as specified immediate disciplinary action, including dismissal or loss of
in the assumption or certification order. If one has already taken employment status or payment by the locking-out employer of
place at the time of assumption or certification, all striking or backwages, damages and other affirmative relief, even criminal
locked out employees shall immediately return to work and the prosecution against either or both of them.
employer shall immediately resume operations and readmit all
workers under the same terms and conditions prevailing before The foregoing notwithstanding, the President of the
the strike or lockout. The Secretary of Labor and Employment or Philippines shall not be precluded from determining the industries
the Commission may seek the assistance of law enforcement that, in his opinion, are indispensable to the national interest,
agencies to ensure compliance with this provision as well as with and from intervening at any time and assuming jurisdiction over
such orders as he may issue to enforce the same. any labor dispute in such industries in order to settle or
terminate the same.
In line with the national concern for and the highest
respect accorded to the right of patients to life and health, (h) Before or at any stage of the compulsory arbitration process, the
strikes and lockouts in hospitals, clinics and similar medical parties may opt to submit their dispute to voluntary arbitration.
institutions shall, to every extent possible, be avoided, and all (i) The Secretary of Labor and Employment, the Commission or the
serious efforts, not only by labor and management but voluntary arbitrator or panel of voluntary arbitrators shall decide
government as well, be exhausted to substantially minimize, if or resolve the dispute within thirty (30) calendar days from the
not prevent, their adverse effects on such life and health, date of the assumption of jurisdiction or the certification or
through the exercise, however legitimate, by labor of its right to submission of the dispute, as the case may be. The decision of
strike and by management to lockout. In labor disputes the President, the Secretary of Labor and Employment, the
adversely affecting the continued operation of such hospitals, Commission or the voluntary arbitrator or panel of voluntary
clinics or medical institutions, it shall be the duty of the striking arbitrators shall be final and executory ten (10) calendar days
union or locking-out employer to provide and maintain an after receipt thereof by the parties. (As amended by RA 6715)
effective skeletal workforce of medical and other health

Atty. Marlon Manuel
TITLE IX
Special Provisions Art. 274. Visitorial power. The Secretary of Labor and
Employment or his duly authorized representative is hereby
Art. 273. Study of labor-management relations. The Secretary empowered to inquire into the financial activities of legitimate labor
of Labor and Employment shall have the power and it shall be his duty organizations upon the filing of a complainant under oath and duly
to inquire into: supported by the written consent of at least twenty percent (20%) of
(a) The existing relations between employers and employees in the the total membership of the labor organization concerned and to
Philippines; examine their books of accounts and other records to determine
compliance or non-compliance with the law and to prosecute any
(b) The growth of associations of employees and the effect of such violations of the law and the union constitution and by-laws: Provided,
associations upon employer-employee relations; That such inquiry or examination shall not be conducted during the
(c) The extent and results of the methods of collective bargaining in sixty (60) day freedom period nor within thirty (30) days immediately
the determination of terms and conditions of employment; preceding the date of election of union officials. (As amended by RA
(d) The methods which have been tried by employers and 6715)
associations of employees for maintaining mutually satisfactory
relations; Art. 275. Tripartism and tripartite conferences.
(e) Desirable industrial practices which have been developed through (a) Tripartism in labor relations is hereby declared a State policy.
collective bargaining for settling differences; Towards this end, workers and employers shall, as far as
practicable, be represented in decision and policy-making bodies
(f) The possible ways of increasing the usefulness and efficiency of of the government.
collective bargaining for settling differences; cda
(b) The Secretary of Labor and Employment or his duly authorized
(g) The possibilities for the adoption of practical and effective representatives may from time to time call a national, regional,
methods of labor-management cooperation; or industrial tripartite conference of representatives of
(h) Any other aspects of employer-employee relations concerning the government, workers and employers for the consideration and
promotion of harmony and understanding between the parties; adoption of voluntary codes of principles designed to promote
and industrial peace based on social justice or to align labor
(i) The relevance of labor laws and labor relations to national movement relations with established priorities in economic and
development. social development. In calling such conference, the Secretary of
Labor and Employment may consult with accredited
The Secretary of Labor and Employment shall also inquire into representatives of workers and employers. (As amended by RA
the causes of industrial unrest and take all the necessary steps within 6715)
his powers as may be prescribed by law to alleviate the same, and
shall from time to time recommend the enactment of such remedial
legislation as in his judgment may be desirable for the maintenance
and promotion of industrial peace.

Atty. Marlon Manuel
Art. 277. Miscellaneous Provisions. Art. 291. Money claims. All money claims arising from
(b) Subject to the constitutional right of workers to security of tenure employer-employee relations accruing during the effectivity of this
and their right to be protected against dismissal except for a just Code shall be filed within three years from the time the cause of action
or authorized cause and without prejudice to the requirement of accrued; otherwise they shall be forever barred.
notice under Article 283 of this Code, the employer shall furnish All money claims accruing prior to the effectivity of this Code
the workers whose employment is so sought to be terminated a shall be filed with the appropriate entities established under this Code
written notice containing a statement of the cause for within one year from the date of such effectivity, and shall be
termination and shall afford the latter ample opportunity to be processed or determined in accordance with implementing rules and
heard and to defend himself with the assistance of his regulations of the Code; otherwise they shall be forever barred.
representative if he so desires in accordance with company rules Workmens compensation claims accruing prior to the effectivity
and regulations promulgated pursuant to guidelines set by the of this Code and during the period from November 1, 1974 up to
Department of Labor and Employment. Any decision taken by December 31, 1974, shall be filed with the appropriate regional offices
employer shall be without prejudice to the right of the worker to of the Department of Labor and Employment not later than March 31,
contest the validity or legality of his dismissal by filing a 1975; otherwise they shall be forever barred. These claims shall be
complaint with the regional branch of the National Labor processed and adjudicated in accordance with the law and rules at the
Relations Commission. The burden of proving that the time their causes of action accrued.
termination was for a valid or authorized cause shall rest on the
employer. The Secretary of Labor and Employment may suspend Art. 292. Institution of money claims. Money claims specified in
the effects of the termination pending resolution of the dispute in the immediately preceding Article shall be filed before the appropriate
the event of a prima facie finding by the appropriate official of entity independently of the criminal action that may be instituted in
the Department of Labor and Employment before whom such the proper courts.
dispute is pending that the termination may cause a serious labor
dispute or is in implementation of a mass lay-off. (As amended Pending the final determination of the merits of money claims
by RA 6715) filed with the appropriate entity, no civil action arising from the same
cause of action shall be filed with any court. This provision shall not
TITLE II apply to employees compensation cases which shall be processed and
Prescription of Offenses and Claims determined strictly in accordance with the pertinent provisions of this
Code.
Art. 290. Offenses. Offenses penalized under this Code and the
rules and regulations issued pursuant thereto shall prescribe in three
years.
All unfair labor practices arising from Book V shall be filed with
the appropriate agency within one year from accrual of such unfair
labor practice; otherwise, they shall be forever barred.

Atty. Marlon Manuel
EXECUTIVE ORDER NO. 126, AS AMENDED BY EXECUTIVE ORDER NOW, THEREFORE, I, CORAZON C. AQUINO, by the powers
NO. 251 vested in me by the sovereign will of the Filipino People and the
Freedom Constitution, do hereby order:
EXECUTIVE ORDER NO. 126
REORGANIZING THE MINISTRY OF LABOR AND EMPLOYMENT SEC. 1. Title. This Executive Order shall otherwise be known
AND FOR OTHER PURPOSES as the Reorganization Act of the Ministry of Labor and Employment.
RECALLING that the reorganization of the government is SEC. 2. Reorganization. The Ministry of Labor and
mandated expressly in Article II, Section I (a), and Article III of the Employment, hereinafter referred to as Ministry, is hereby
Freedom Constitution; reorganized, structurally and functionally in accordance with the
provisions of this Executive Order.
HAVING IN MIND that pursuant to Executive Order No. 5
(1986), it is directed that necessary and proper changes in the
SEC. 3. Declaration of Policy. It is the declared policy of the
organizational and functional structures of the government, its
State to afford protection to labor, promote full employment, ensure
agencies and instrumentalities, be effected in order to promote
equal work opportunities regardless of sex, race, or creed, and
efficiency and effectiveness in the delivery of public services;
regulate the relations between workers and employers. The State shall
CONSIDERING that it has become necessary to introduce assure the rights of the workers to self-organization, collective
critical structural and functional changes in the Ministry of Labor and bargaining, security of tenure, and just and human conditions of work.
Employment to make it more responsive to the urgent demands of
national economic recovery; SEC. 4. Mandate and Objectives. The Ministry shall be the
BELIEVING that the same Ministry has to streamline its primary policy, programming, coordinating and administrative entity of
operations by rationalizing its functions, structure and organization to the Executive Branch of the government in the field of labor and
make it more efficient and effective in undertaking its principal mission employment. It shall assume primary responsibility for:
of translating the declared policy of the state on labor into meaningful (a) The promotion of gainful employment opportunities and the
program on employment promotion, manpower development and optimization of the development and utilization of the countrys
utilization, advancement of workers welfare, provision for a decent manpower resources;
living wage and other just and humane conditions of work and
(b) The advancement of workers welfare by providing for just and
promotion of sound and stable industrial harmony as essential
humane working conditions and terms of employment;
components of national economic recovery and development;
(c) The maintenance of industrial peace by promoting harmonious,
RECOGNIZING that women and rural workers have a vital role
equitable, and stable employment relations that assure equal
in nation-building, the same Ministry has to create, promote and
protection for the rights of all concerned parties.
develop the conditions for their full utilization, including their
protection and welfare.
SEC. 5. Powers and Functions. In pursuit of its mandate, the
Ministry shall have the following powers and functions:

Atty. Marlon Manuel
(a) Formulate and recommend policies, plans and programs for Minister of Labor and Employment, hereinafter referred to as the
manpower development, training, allocation, and utilization; Minister, who shall be appointed by the President and who shall have
(b) Protect and promote the interest of every citizen desiring to work supervision and control over the Ministry. For such purposes, the
locally or overseas by securing for him the most equitable terms Minister shall have the following powers and functions:
and conditions of employment, and by providing social and (a) Advise the President on the promulgation of
welfare services; executive/administrative orders, other regulative issuances and
(c) Regulate the employment of aliens, including the establishment legislative proposals on matters pertaining to labor and
of a registration and/or work permit system for such aliens; employment;
(d) Formulate general guidelines concerning wage and income (b) Formulate policies, guidelines, rules and regulations and other
policy; issuances necessary to carry out Ministry policies, plans,
programs and projects;
(e) Recommend necessary adjustments in wage structures with a
view to developing a wage system that is consistent with national (c) Issue orders, directives, rules and regulations and other
economic and social development plans; issuances to carry out labor and employment policies, plans,
programs and projects;
(f) Provide for safe, decent, humane and improved working
conditions and environment for all workers, particularly women (d) Provide overall direction, supervision, and control over all offices
and young workers; under the Ministry to ensure effective and efficient
implementation of its policies, plans, programs and projects;
(g) Maintain harmonious, equitable and stable labor relations system
that is supportive of the national economic policies and (e) Coordinate with other government offices, labor, organizations,
programs; employers associations, and any other group to carry out the
mandate of the Ministry;
(h) Uphold the right of workers and employers to organize and to
promote free collective bargaining as the foundation of the labor (f) Evaluate the policy, plans, programs and project accomplishment
relations system; of the Ministry;
(i) Provide and ensure the fair and expeditious settlement and (g) Prepare reports for the President and for the public;
disposition of labor and industrial disputes through collective (h) Delegate authority for the performance of any function to officers
bargaining, grievance machinery, conciliation, mediation, and employees of the Ministry;
voluntary arbitration, compulsory arbitration as may be provided (i) Exercise such other powers and functions as may be provided by
by law, and other modes that may be voluntarily agreed upon by law or assigned by the President.
the parties concerned.
Sec. 7. Office of the Secretary. The Office of the Secretary shall
SEC. 6. Minister of Labor and Employment. The authority and consist of the Secretary and his immediate staff. In addition, there is
responsibility for the exercise of the mandate of the Ministry and for hereby created in the Office of the Secretary a Joint RP-US Lab or
the discharge of its powers and functions shall be vested in the Committee Staff Unit which shall provide technical and other necessary

Atty. Marlon Manuel
services to the Philippine panel in the Joint Labor Committee created Within his functional area of responsibility, an Assistant Minister shall
under the RP-US Base Labor Agreement and for other special projects. assist the Minister and Deputy Ministers in the formulation,
The Unit who shall be headed by a Head Executive Assistant who shall determination and implementation of laws, policies, plans, programs
be assisted by five (5) Staff Assistants. (As amended by E.O. No. 251) and projects on labor and shall oversee the day-to-day administration
and supervision of the constituent units of the Ministry.
SEC. 8. Deputy Minister. The Minister shall be assisted by not
more than four (4) Deputy Ministers who shall be appointed by the SEC. 10. Structural Organization. The Ministry shall consist of
President upon the recommendation of the Minister. The Minister is the Ministry proper comprising the Office of the Minister, the Office of
hereby authorized to delineate and assign the respective functional the Deputy and Assistant Ministers, the Services and the Staff
areas of responsibility of the Deputy Ministers, provided, that such Bureaus, and its Regional Offices.
responsibility shall be with respect to the mandate and objectives of
the Ministry; and provided, further, that no Deputy Minister shall be SEC. 11. Planning Service. The Planning Service shall provide
assigned primarily administrative responsibilities. Within his functional the Ministry with efficient, effective and economical services relating to
area of responsibility, a Deputy Minister shall have the following planning, programming, project development and evaluation, and the
functions: development and implementation of a management information
(a) Advise and assist the Minister in the formulation and system.
implementation of the Ministrys policies, plans, programs and
projects; SEC. 12. Administrative Service. The Administrative Service
shall provide the Ministry with efficient, effective and economical
(b) Oversee the operational activities of the Ministry; services relating to records, management, supplies, equipment,
(c) Coordinate the programs and projects of the Ministry for efficient collections, disbursements, building administration and maintenance,
and effective administration; security and custodial work.
(d) Serve as deputy for the Minister;
SEC. 13. Human Resource Development Service. The Human
(e) Perform, when so designated, the power and functions of the Resource Development Service shall provide the Ministry with a
Minister, during the latters absence or incapacity; and program and corresponding projects that shall make available training,
(f) Perform such other functions as may be provided by law or education and development opportunities needed to upgrade the levels
assigned by the Minister to promote the efficiency and of competence and productivity of Ministry managers and personnel. It
effectiveness in the delivery of public services. shall absorb the powers and functions of the Administrative Service in
relation to the development and administration of personnel programs
SEC. 9. Assistant Ministers. The Minister shall likewise be including selection and placement, development, performance
assisted by not more than four (4) Assistant Ministers who shall be evaluation, employee relations and welfare.
appointed by the President upon the recommendation of the Minister.
The Minister is hereby authorized to delineate and assign the SEC. 14. Financial Management Service. The Financial and
respective areas of functional responsibility of the Assistant Ministers. Management Service shall be responsible for providing the Ministry

Atty. Marlon Manuel
with efficient, effective and economical services relating to budgetary, likewise be responsible for providing answers to queries from the
financial, management improvement and internal control matters. public regarding the Ministrys policies, rules, regulations, programs,
activities and services.
SEC. 15. Legal Service. The Legal Service shall provide legal
advice and service to Ministry officers and employees; prepare SEC. 18. Bureaus. The following staff bureaus of the Department
informative or clarificatory opinions on labor laws, rules and are hereby retained and shall continue to have the same functions,
regulations for uniform interpretation thereof; answer legal queries except as otherwise provided herein:
from the public; assist the Office of the Solicitor General in suits (a) Bureau of Local Employment;
involving the Ministry or its officers or employees or act as their
principal counsel in all actions taken in their official capacity or other (b) Bureau of Women and Minors, which hereby renamed as the
causes before judicial or administrative bodies. Bureau of Women and Young Workers;
(c) Bureau of Rural Workers;
SEC. 16. International Labor Affairs Service. The International (d) Bureau of Labor Relations, which shall continue to perform its
Labor Affairs Service shall be responsible for monitoring the present functions except those to be absorbed by the National
observance and implementation of all obligations, courtesies, and Mediation and Conciliation Board as provided under Sec. 29 (c)
facilities required by international labor affairs, particularly the hereof; and
International Labor Organization, the Conference of Asian Pacific Labor
Ministries, the ASEAN Labor Ministers Meeting of which the Philippines (e) Bureau of Working Conditions. (As amended by E.O. 251)
is a member, and related international labor standards and
agreements reached in various international labor forums, treaties, SEC. 19. Attached Agencies. The following agencies shall
and other multilateral, bilateral or multi-bilateral agreements in the continue to be attached to the Ministry for policy and program
area of labor and employment; provide staff support and policy coordination and administrative supervision:
guidelines to the Minister in the supervision, monitoring and reporting (a) National Wages Council;
of the activities of the Philippine overseas labor officers assigned in
different countries; serve as the instrumentality of the Ministry for (b) Philippine Overseas Employment Administration;
technical cooperation, programs and activities with other countries and (c) Employees Compensation Commission which is hereby
international institutions. reorganized to include the Executive Director of the ECC as an
ex-officio member of the Commission; asia dc
SEC. 17. Information and Publication Service. The Information and (d) The National Manpower and Youth Council;
Publication Service shall be responsible for promoting rapport and
understanding between the Ministry and the public through the (e) The National Labor Relations Commission;
development of public relations programs and the dissemination of (f) The Welfare Fund for Overseas Workers Administration which is
accurate and updated information on labor and employment, by means hereby renamed as the Overseas Workers Welfare
of publications and media coverages of special events and related Administration;
matters on the Ministrys policies, plans, programs, and projects; shall (g) Maritime Training Council; and

Atty. Marlon Manuel
(h) National Maritime Polytechnic Foundation. SEC. 21. Bureaus of Labor and Employment Statistics. A
Bureau of Labor and Employment Statistics is hereby created and shall
SEC. 20. Institute For Labor Studies. There is hereby created an absorb the functions of the Labor Statistics Service which is hereby
Institute for Labor Studies, hereinafter referred to as the Institute, abolished in accordance with Sec. 29 (b). The Bureau shall have the
which shall attached to the Department of Labor and Employment for following functions:
policy and program coordination and administrative supervision. The (a) Formulate, develop and implement plans and programs on the
Institute shall absorb the research and publication functions of the labor statistical system in order to provide the government with
Institute of Labor and Manpower Studies which is hereby abolished in timely, accurate and reliable data on labor and employment;
accordance with Sec. 29(b) of this Executive Order. The Institute, to
be headed by an Executive Director, assisted by a Deputy Executive (b) Conduct nationwide surveys and studies which will generate
Director, shall have the following functions: trends and structures on labor and employment;
(a) Undertake research and studies in all areas of labor and (c) Develop and prescribe uniform statistical standards,
manpower policy and administration. nomenclatures and methodologies for the collection, processing,
presentation and analysis of labor and employment data;
(b) Review the rationale of existing legislation and regulations and
analyze the cost involved in the implementation of such (d) Establish appropriate mechanisms for the coordination of all
legislation against the benefits expected to be derived; statistical activities in the Ministry and for collaboration with
other government and private agencies including international
(c) Study and develop innovative and indigenous approaches research organizations in the conduct of surveys and studies in
towards the promotion harmonious and productive labor- the area of labor and employment;
management relations, and the improvement of workers welfare
services; (e) Disseminate statistical information and provide statistical
services/advice to the users by establishing a data bank and
(d) Develop and undertake research programs and projects in issuing the Bureaus statistical materials and research findings;
collaboration with other national agencies to enhance the
Departments capability to participate in national decision and (f) Develop and undertake programs and projects geared towards
policy making; the enhancement of the technical competence of the Ministry on
theories, techniques and methodologies for the improvement of
(e) Enter into agreements with international or bilateral agencies for the labor statistical system;
the carrying out of the foregoing functions;
(g) Monitor and exercise technical supervision over the statistical
(f) Expand the scope of its research interests into other countries units in the Ministry and its agencies; and
and regions;
(h) Perform such other functions as may be provided by law or
(g) Publish its research studies for dissemination to government as assigned by the Minister.
well as to all concerned parties; and
(h) Perform such other functions as may be provided by law or SEC. 22. National Conciliation and Mediation Board. A National
assigned by the Secretary. (As amended by E.O. 251) Conciliation and Mediation Board, herein referred to as the Board, is

Atty. Marlon Manuel
hereby created and which shall absorb the conciliation mediation and (e) Administer the voluntary arbitration program; maintain/update a
voluntary arbitration functions of the Bureau of Labor of Relations in list of voluntary arbitrations; compile arbitration awards and
accordance with Sec. 29 (c) hereof. The Board shall be composed of decisions;
an Administrator and two (2) Deputy Administrators. It shall be an (f) Provide counselling and preventive mediation assistance
attached agency under the administrative supervision of the Secretary particularly in the administration of collective agreement; awards
of Labor and Employment. and decisions;
The Administrators and the Deputy Administrators shall be (g) Monitor and exercise technical supervision over the Board
appointed by the President upon recommendation of the Secretary of programs being implemented in the regional offices; and
Labor and Employment. There shall be as many Conciliators-Mediators
as the needs of the public service require, who shall have at least (h) Perform such other functions as may be provided by law or
three (3) years of experience in handling labor relations and who shall assigned by the Secretary.
be appointed by the Secretary. A Tripartite Voluntary Arbitration Advisory Council is hereby
The Board shall have its main office in Metropolitan Manila and created and attached to the National Conciliation and Mediation Board.
its Administrators shall exercise supervision over Conciliators- The Tripartite Voluntary Arbitration Advisory Council shall advise the
Mediators and all its personnel. It shall establish as many branches as National Conciliation Board on matters pertaining to the promotion of
there are administrative regions in the country, with a many voluntary arbitration as the preferred mode of dispute settlement.
Conciliator-mediators as shall be necessary for its effective operation. The Tripartite Voluntary Arbitration Advisory Council shall
Each branch of the Board shall be headed by an Executive Conciliator- consist of the Administrator of the National Conciliation and Mediation
Mediator. Board as Chairman, one other member from the government, two
The Board shall have the following functions: members representing labor, and two other members representing
management. The members shall be appointed by the President to
(a) Formulate policies, programs, standards, procedures, manuals of serve for a term of three (3) years. The Chairman and Members
operation and guidelines pertaining to effective mediation and thereof shall serve without compensation. (As amended by E.O. 251)
conciliation of labor disputes;
(b) Perform preventive mediation and conciliation functions; SEC. 23. Transfer. The National Productivity Commission is
(c) Coordinate and maintain linkages with other sectors of hereby transferred from the National Economic Development Authority
institutions, and other government authorities concerned with and attached to the Ministry in accordance with Sec. 29 (c) hereof.
matters relative to the prevention and settlement of labor The Commission shall primarily deal with productivity promotion and
disputes; enhancement, education and training, coordination/monitoring,
funding and the conduct of special and policy studies directly related to
(d) Formulate policies, plans, programs, standards, procedures, its activities. It shall have the Minister of Trade and Industry as
manuals of operation and guidelines pertaining to the promotion Chairman and the Minister of Labor and Employment as Vice-
of cooperative and nonadversarial schemes, grievance handling, Chairman.
voluntary arbitration and other voluntary modes of dispute
settlements;

Atty. Marlon Manuel
Sec. 24. Regional Offices, District Offices and Provincial Extension Those separated from the service shall receive the retirement benefits
Units. The Department is hereby authorized to establish, operate to which they may be entitled under existing laws, rules and
and maintain such Department-wide Regional Offices, District Offices regulations. Otherwise, they shall be paid the equivalent of one-month
and Provincial Extension Units in each of the administrative regions of basic salary for every year of service, or the equivalent nearest
the country, insofar as necessary to promote economy and efficiency fraction thereof favorable to them on the basis of the highest salary
in the delivery of its services. Each Regional Office shall be headed by received, but in no case shall such payment exceed the equivalent of
a Regional Director who shall have supervision and control thereof. 12 months salary.
The Regional Director, whenever necessary, shall be assisted by an No court or administrative body shall issue any writ or
Assistant Regional Director. A Regional Office shall have, within its preliminary injunctions or restraining order to enjoin the
regional areas, the following functions: separation/replacement of any officer or employee affected under this
(a) Implement laws, policies, plans, programs, projects, rules and Executive Order.
regulations of the Department;
(b) Provide economical, efficient and effective service to the people; SEC. 26. Prohibition Against Reorganizational Change. No
change in the reorganization herein prescribed shall be valid except
(c) Coordinate with regional offices of other departments and upon prior approval of the President for the purpose of promoting
agencies; efficiency and effectiveness in the delivery of public services.
(d) Coordinate with local government units;
(e) Perform such other functions as may be provided by law or SEC. 27. Funding. Funds needed to carry out the provisions of
assigned by the Secretary. (As amended by E.O. 251) this Executive Order shall be taken from funds available in the
Ministry.
SEC. 25. New Structure and Pattern. Upon approval of this SEC. 28. Implementing Authority of Minister. The Minister shall
Executive Order, the officers and employees of the Ministry shall in a issue such rules, regulations and other issuances as may be necessary
holdover capacity, continue to perform their respective duties and to ensure the effective implementation of the provisions of this
responsibilities and receive the corresponding salaries and benefits Executive Order.
unless in the meantime they are separated from government service
pursuant to Executive Order No. 17 (1986) or Article III of the SEC. 29. Transitory Provisions. In the abolition/transfer of
Freedom Constitution. entity/functions as prescribed in the Executive Order, the following
The new position structure and staffing pattern of the Ministry rules shall be provided:
shall be approved and prescribed by the Minister for the Ministry within (a) Any transfer of entities shall include the functions,
one hundred twenty (120) days from the approval of this Executive appropriations, funds, records, equipment, facilities, other
Order and the authorized positions created thereunder shall be filled properties, assets, and liabilities and of the transferred entity as
with regular appointments by him or by the President as the case may well as the personnel thereof as may be necessary, who shall, in
be. Those incumbents whose positions are not included therein or who a holdover capacity, continue to perform their respective duties
are not reappointed shall be deemed separated from the service.

Atty. Marlon Manuel
and responsibilities and receive the corresponding salaries and other assets as well as the personnel of the entity from which
benefits unless in the meantime they are separated from such functions have been transferred that are necessary to the
government service pursuant to Executive Order No. 17 (1986) proper discharge of such transferred functions. The liabilities, if
or Article III of the Freedom Constitution. Those personnel from any, which have been incurred in connection with the discharge
the transferred entity whose positions are not included in the of the transferred functions shall be allocated in accordance with
new position structure and staffing pattern approved by the the Auditing Code and the pertinent laws, rules and regulations.
Minister or who are not reappointed shall be entitled to the Such personnel shall, in a holdover capacity, continue to perform
benefits provided in the second paragraph of Sec. 25 hereof. their respective duties and responsibilities and receive the
(b) Any transfer of functions which results in the abolition of the corresponding salaries and benefits unless in the meantime they
entity that has exercised such transferred functions shall include are separated from government service pursuant to Executive
as may be necessary, to the proper discharge of the transferred Order No. 17 (1986) or Article III of the Freedom Constitution.
functions, the appropriations, funds, records, equipment, Any such personnel whose position is not included in the new
facilities, other assets, and personnel of the entity from which position structure and staffing pattern approved by the Minister
such functions have been transferred. The remaining or who is not reappointed shall be entitled to the benefits
appropriations and funds shall revert to the General Fund and the provided in the second paragraph of Sec. 25 hereof.
remaining records, equipment, facilities and other assets shall be (d) In case of the abolition of an entity which does not result in the
allocated to such appropriate units as the Minister shall transfer of its functions to another entity, the appropriations and
determine or otherwise shall be disposed of, in accordance with funds of the abolished entity shall revert to the General Fund,
the Auditing Code and other pertinent laws, rules and while the records, equipment, facilities and other assets thereof
regulations. The liabilities, if any, of the abolished entity shall be shall be allocated to such appropriate units as the Minister shall
treated likewise in accordance with the Auditing Code and other determine or otherwise shall be disposed of in accordance with
pertinent laws, rules and regulations. Incumbents of the the Auditing Code and other pertinent laws, rules and
abolished entity shall, in a holdover capacity continue to perform regulations. The liabilities, if any, of the abolished entity shall be
their respective duties and responsibilities and receive the treated in accordance with the Auditing Code and other pertinent
corresponding salaries and benefits unless in the meantime they laws, while the personnel thereof shall be entitled to the benefits
are separated from government service pursuant to Executive provided in the second paragraph of Sec. 25 hereof.
Order No. 17 (1986) or Article III of the Freedom Constitution.
Any such personnel whose position is not included in the new SEC. 30. Change of Nomenclatures. In the event of the
position structure and staffing pattern approved by the Minister adoption of a new Constitution which provides for a presidential form
or who is not reappointed shall be entitled to the benefits of government, the Ministry shall be called Department of Labor and
provided in the second paragraph of Sec. 25 hereof. Employment and the titles of Minister, Deputy Minister, and Assistant
(c) Any transfer of functions which does not result in the abolition of Minister shall be changed to Secretary, Undersecretary, and Assistant
the entity that has exercised such transferred functions shall Secretary, respectively.
include the appropriations, funds, records, equipment, facilities,

Atty. Marlon Manuel
SEC. 31. Notice or Consent Requirement. If any Held: YES. Following Servando v. Sec. of Labor and Employment, the enactment
reorganizational change herein authorized is of such substance or of R.A. No. 7730, amending Art. 138(b) LC did away with the rule that the
materiality as to prejudice third persons with rights recognized by law visitorial powers of the SOLE to order and enforce compliance with labor
or contract such that notice to or consent of creditors is required to be standards laws cannot be exercised where the individual claim exceeds P5,000.
made or obtained pursuant to any agreement entered into with any of
such creditors, such notice or consent requirement shall be complied St. Martin Funeral Homes v. NLRC, 295 SCRA 494
with prior to the implementation of such reorganizational change. The remedy of an aggrieved party from a decision by the NLRC is to timely file a
motion for reconsideration as a precondition for any further or subsequent
SEC. 32. Separability Clause. Any portion or provision of this remedy, and then seasonably file a petition for certiorari under Rule 65 to the
Executive Order that may declared unconstitutional shall not have the Court of Appeals. Bottom-line rationale: SC had to divest its dockets of labor
effect of nullifying other portions or provisions hereof as long as such
cases. N.B. From the CA you go to the SC via Rule 45.
remaining portions can still subsist and be given effect in their
entirety.
NFL v. Laguesma, 304 SCRA 405
The Med-Arbiter dismissed ANGLO-KMUs petition for certification election on
SEC. 33. Repealing Clause. All laws, ordinances, rules,
regulations, other issuances or parts thereof, which are inconsistent the ground that the submission of the documents evidencing the due creation of a
with this Executive Order, are hereby repealed or modified accordingly. local was made after the lapse of the freedom period. SOLE set aside Med-
Arbiters resolution. NFL now before SC via Rule 65.
SEC. 34. Effectivity. This Executive Order shall take effect Held: SC did not rule on the merits; rather it applied the St. Martin ratio and
immediately upon its approval. referred the case to the CA. Specifically, the SC observed that the LC and its IRR
generally do not provide for any mode of reviewing the decision of the SOLE,
APPROVED in the City of Manila, Philippines, this 31st day of January, except for 2 instances where there is specific mention of a remedy from a SOLE
in the year of Our Lord, nineteen hundred and eighty-seven decision: (1) Sec. 15, Rule IX, Book V, IRRSOLE decision on appeal from the
Med-Arbiters decision on a petition for certification election shall be final and
A. JURISDICTION; PROCEDURE executory, but the implementation of the SOLEs decision affirming the Med-
Arbiters decision to conduct a certification election shall not be stayed unless
Guico, Jr. v. Quisumbing, 298 SCRA 667 restrained by the appropriate court; (2) Sec. 5, Rule V, Rules on the Disposition
Pursuant to Art. 128 LC, the DOLE-Regional Director inspected Copylandia of Labor Standards Cases in Regional Officesthe filing of a petition for
Services & Trading finding these violations as regards 21 copier operators: certiorari before the SC shall not stay the decision of the [appealed] order or
underpayment of wages and 13th month pay and no service incentive leave pay. decision unless the aggrieved party secures a temporary restraining order from
Copylandia argues that the Regional Director has no jurisdiction over the the Court. SC finds that it is procedurally feasible and practicable that petitions
complaint because the individual monetary claims of the employees exceeded for certiorari under Rule 65 against the decisions of the SOLE rendered under the
P5000 and under Art. 129 LC and the IRR jurisdiction is with the Labor Arbiter. LC and its IRR be filed initially in the CA. Thus, SC reads the appropriate
Issue: Whether the Regional Director has jurisdiction court in no. (1) to refer to the CA; while no. (2) cannot be read to mean that the

Atty. Marlon Manuel
petition can only be filed with the SC, rather it should be read in relation to the Vivero v. CA, 344 SCRA 268
pertinent laws on the concurrent original jurisdiction of the SC and CA in Rule The CBA between AMOSUP (union) and Hanseatic Shipping required that
65 petitions. unresolved disputes after recourse to grievance machinery shall be referred to a
Volunatry Arbitration Committee. Vivero, an AMOSUP member, was repatriated
Maneja v. NLRC, 290 SCRA 603 by Hanseatic. Vivero filed a complaint for illegal dismissal. Grievance
Manila Midtown Hotel dismissed Maneja for dishonesty thereby violating proceedings were held in vain, thus Vivero filed a complaint with the POEA.
company policies. Maneja filed a complaint for illegal dismissal. The Labor Pending POEA case, Hanseatic moved to dismiss due to lack of jurisdiction
Arbiter found for Manejait assumed jurisdiction under Art. 217 despite because Vivero failed to refer the case to a Voluntary Arbitration Committee
acknowledging that under the Art 217(c) matters involving the implementation pursuant to the CBA. The case eventually ended up with the NLRC pursuant to
and interpretation of existing company policies falls within the ambit of RA 8042. The LA dismissed the complaint for want of jurisdictionCBA
grievance procedure under the CBA, then, if unresolved, subject to voluntary provided for referral to a Voluntary Arbitration Committee should grievance
arbitration. NLRC dismissed the case for lack of jurisdiction of the LA; voluntary committee fail to settle the dispute and Art. 261 LC mandates original and
arbitration should have been conducted. exclusive jurisdiction of voluntary arbitrators. NLRC set aside LA decision,
Issue: Whether the LA has jurisdiction holding that referral to arbitration is voluntary. CA reversed.
Held: YES. Pursuant to Art. 217 LC, termination cases fall under the original and Issue: Whether the NLRC is deprived of jurisdiction over illegal dismissal cases
exclusive jurisdiction of the LA. Art. 217(c) should be read in conjunction with whenever a CBA provides for grievance machinery and voluntary arbitration
Art. 261 which grants to voluntary arbitrators the original and exclusive proceedings.
jurisdiction to hear and decide all unresolved grievances arising from the Held: NO. CA DECISION SET ASIDE; CASE REMANDED TO LA. Following SMC v.
interpretation and implementation of the CBA and those arising from the NLRCs construction of the phrase all other disputes in Art. 262, it is not
interpretation or enforcement of company personnel policies. In this case, sufficient to merely say that parties to the CBA agree on the principle that all
Manejas termination is not an unresolved grievance. Morevoer, Manejas disputes should first be submitted to a voluntary arbitrator. There is a need for
dismissal does not fall within the phrase grievances arising from the an express stipulation in the CBA that illegal termination disputes should be
interpretation and implementation of the CBA and those arising from the resolved by a voluntary arbitrator or panel of voluntary arbitrators, since the
interpretation or enforcement of company personnel policies because only same fall within a special class of disputes that are generally within the exclusive
disputes involving the union and company shall be referred to the grievance original jurisdiction of LAs. Absent such express stipulation, all disputes
machinery or voluntary arbitrators. Here, the union neither objected nor dissented should be construed as limited to areas of conflict traditionally within the
to the dismissal. Following Sanyo Phils. Workers Union-PSSLU v. Canizares, jurisdiction of voluntary arbitratorsdisputes relating to contract-interpretation,
since there has been an actual termination, the matter falls within the jurisdiction contract-implementation, or interpretation or enforcement of company personnel
of the LA. Manejas dismissal does not call for the interpretation or enforcement policies. Illegal termination disputes does not fall under any of these categories.
of company personnel policies but is a termination dispute under the LAs In this case, while the parties did agree to make termination disputes the
jurisdiction. proper subject of voluntary arbitration, such submission remains discretionary
upon the parties. The CBA provisions on Job Security (Sec. 4, Art. XVII) use the
word may, thereby showing the intention of the parties to submit illegal

Atty. Marlon Manuel
termination dispute to the jurisdiction of the LA, rather than to a voluntary arbitration and of shortening the arbitration process by rendering the arbitral
arbitrator. Vivero validly exercised his option to submit his case to a LA when he award non-appealable to the NLRC. The result is that a voluntary arbitral award
filed his complaint with the proper government agency. may be modified and set aside only upon the same grounds on which a decision
Where under the CBA, both Union and the employer are responsible for of the NLRC itself may be modified or set aside by the SC.
selecting an impartial arbitrator or for convening an arbitration committee, yet
neither made a move towards this end, the employee should not be deprived of Luzon Devt Bank v. Association of LDB Employees, 249 SCRA 162
his legitimate recourse because of the refusal of both Union and employer to This case is the precursor to St. Martin. SC discussed arbitration within the labor
follow the grievance procedure. Here AMOSUP did not inform Vivero of his law context: compulsory vs. voluntary, voluntary arbitrator under Art. 261/262,
option to settle the case through voluntary arbitration, and Hanseatic did not LC vs. Labor Arbiter under Art. 217. Pertinently, SC notes that while there is an
timely invoke the provision in their CBA requiring the referral of their express mode of appeal from the decision of a LA (i.e., NLRC under Art. 228),
unresolved disputes to a VA once it becomes apparent that the grievance RA 6715 is silent with respect to an appeal from the decision of a VA. Past
machinery failed to resolve it prior to the filing of the case before the proper practice has equated the VA with the NLRC or the CA in that certiorari to the SC
tribunal. is the remedy. Now, the SC views this illogical and imposes an unnecessary
burden upon it. Under the rulings in Volkschel Labor Union v. NLRC and
Sime Darby Pilipinas, Inc. v. Magsalin, 180 SCRA 177 Oceanic Bic Division v. Romero, it follows that the VA enjoys in law the status of
Sime Darby and SDEA executed a CBA that provides for the grant of a quasi-judicial agency but independent of, and apart from, the NLRC since his
performance bonus. Sime Darby told SDEA that it could not grant the decisions are not appealable to the latter. More accurately, a VA is comprehended
performance bonus for 1988-89 because the workers performance does not within the concept of a quasi-judicial instrumentality whose decisions fall under
justify the award. In a conciliation meeting, both parties agreed to submit the the exclusive appellate jurisdiction of the CA under RA 7902, amending BP 129.
dispute to voluntary arbitration, specifically stating that they were submitting the Moreover, the SC reads Sec 22 of the Arbitration Law as equating the award or
issue of performance bonus to voluntary arbitration and that the decision and decision of the voluntary arbitrator with that of the RTC. Consequently, in a
award of the voluntary arbitrator shall be respected and implemented by the petition for certiorari from that award or decision, the CA must be deemed to
parties as final and executory. Voluntary Arbitrator granted an award declaring have concurrent jurisdiction with the SC. Thus, as a matter of policy, the SC shall
SDEA entitled to a performance bonus equal to 75% of the members monthly henceforth remand to the CA petitions of this nature for proper disposition.
basic pay. VA found that the grant of performance bonus was mandatory.
Villaruel v. NLRC, 284 SCRA 399
N.B.: the issues raised concern grave abuse of discretion on the part of the VA for Guarino was master baker of spouses Villaruels bakery and earns P40/day. After
passing upon the question of both the propriety of granting a performance bonus he asked for a P10 increase the Villaruels told him to no longer report for work.
and the amount thereof; and for awarding 75% performance bonus. To both Guarino filed a complaint for illegal dismissal. LA dismissed the complaint
issues, the SC held no. However, the important part is the prefatory note of the finding that there is no employer-employee relationship between the two, giving
Court. It stressed that the award of a VA is final and executory after 10 calendar credence to the Villaruels claim that Guarino is not an employee but a partner.
days from receipt of the award by the parties (Art. 262-A, LC). But certiorari NLRC reversed, finding Guarino a regular employee.
under Rule 65 will lie in appropriate cases. The LA and its IRR thus clearly
reflect the important public policy of encouraging recourse to voluntary

Atty. Marlon Manuel
Issue: Whether NLRC committed GAD in finding that Guarino is a regular Commercial Bank & Trust Co. entered into a CBA with its union. During the
employee and that he did not abandon the partnership and in directing payment time for re-negotiation, CBTC suspended negotiations. Eventually CBTC merged
of salary differentials et al. with BPI. Union filed a case against CBTC and BPI for specific performance and
Held: NO. The petition essentially raises a factual issue. SCs jurisdiction under damages with the CFI alleging, inter alia, that BPI induced CBTC to violate its
Rule 65 does not include correction of the NLRCs evaluation of the evidence but existing CBA. CFI dismissed for lack of jurisdiction.
is confined to issues of jurisdiction or grave abuse of discretion. An abuse of Issue: Whether regular courts may take cognizance of claims for damages arising
discretion does not necessarily follow because there is a reversal by the NLRC of from a labor controversy.
a decision of the LA. Neither does the mere variance in the evidentiary Held: NO. This case is a ULP controversy within the original and exclusive
assessment of the NLRC and that of the LA warrant another full review of the jurisdiction of the LA and the exclusive appellate jurisdiction of the NLRC. The
facts. In this case, NLRCs ruling is supported by substantial evidence. claim against BPI consists mainly of the civil aspect of the ULP charge referred
to under Art. 247. The act complained of falls under the broad scope of ULP
Manila Central Line Corp. v. MCL Free Workers Union-NFL, 290 SCRA 690 under Art. 248(a) & (g). Since it involves collective bargainingwhether it
Due to a bargaining deadlock and after failure to resolve the same with the aid of involved an accompanying violation of the Civil Codeit may rightly be
the NCMB, the union petitioned for compulsory arbitration. LA rendered a categorized as ULP. The civil implications thereof do not defeat its nature as a
decision embodying provisions of a new CBA. NLRC denied employers appeal. fundamental labor offense. The fact that BPI was not the employer when the act
Before SC, employer aver that NLRC erred in upholding the jurisdiction of the was committed does not abate a recourse to the LA. It should be noted that BPI
LA, contending that the policy of the law now is to encourage resort to assumed all the assets and liabilities of CBTC.
conciliation and voluntary arbitration.
Held: Art. 262, LC provides that upon agreement of the parties, the VA shall also San Jose v. NLRC, 294 SCRA 336
hear and decide all other labor disputes including ULP and bargaining deadlocks. San Jose filed with the LA a case for money claim (underpayment of retirement
This is what the parties did in this case. After the NCMB failed to resolve the benefits) against Ocean Terminal Services, Inc. LA decided in his favor. NLRC
deadlock, the union petitioned for compulsory arbitration. Although the unions reversed on jurisdictional grounds, arguing that since San Joses claim is based
petition was for compulsory arbitration, the subsequent agreement of petitioner on the CBA thus arising from an interpretation or implementation for a CBA, the
to submit the matter for arbitration in effect made the arbitration a voluntary one. LA lacks jurisdiction over the case under Art. 217(c), LC.
The essence of voluntary arbitration, after all, is that it is by agreement of the Issue: Whether the NLRC erred in dismissing the case
parties, rather than compulsion of law, that a matter is submitted for arbitration. It
does not matter that the person chosen as arbitrator is a labor arbiter who is Held: NO. (N.B. please refer to the Code) An analysis of Arts. 217, 261 and 262
charged with the compulsory arbitration of certain labor cases. There is nothing indicates that:
in the law that prohibits these labor arbiters from also acting as voluntary 1. The jurisdiction of the LA and VA or Panel of VAs over cases enumerated in
arbitrators as long as the parties agree to have him hear and decide their dispute. these articles can possibly include money claims in one form or another.
2. The cases where the LA has original and exclusive jurisdiction are
National Union of Bank Employees v. Lazaro, 157 SCRA 123 enumerated in Art. 217 and that of the VA or Panel of VAs in Art. 261.

Atty. Marlon Manuel
3. The original and exclusive jurisdiction of LA s is qualified by an exception, substitution of claim for backwages with claim for actual damages in the latter.
i.e., Art. 217(c) and Art. 262. The original and exclusive jurisdiction of the These are telltale signs that respondents claim for damages is intertwined with
LA under Art. 217(c) for money claims is limited only to those arising from their having been separated from their employment without just cause and, thus,
statutes or contracts other than a CBA. has a reasonable causal connection with their employer-employee relations with
4. The jurisdiction of VA or Panel of VAs is provided for in Arts. 261 and 262. SMC. Accordingly, jurisdiction lies with the LA under Art. 217, para. 4.
From the foregoing, the NLRC correctly ruled that the LA had no Lapanday Agricultural Devt Corp. v CA, 324 SCRA 39
jurisdiction over San Joses money claim-underpayment of retirement benefits, as Commando Security Services and Lapanday entered into a Guard Service
the controversy involved an issue arising from the interpretation or Contract. Commando demanded that the contract be upgraded in compliance
implementation of a provision of the CBA. It is the VA or Panel of VAs who has with 2 wage orders increasing the minimum wage, Lapanday refused. The
jurisdiction. contract expired without the implementation of the wage orders. Commando filed
a complaint with RTC which ruled in its favor. CA affirmed. Lapanday, inter
SMC v. Ectuban, 319 SCRA 704 alia, assails jurisdiction of regular courts.
Claiming poor sales performance, SMC encouraged its Mandaue City Brewery
regular employees, including respondents, to avail of the retrenchment program, Issue: Whether RTC has jurisdiction
which the latter did in 1981, 1982 and 1983. In 1985, respondents learned that Held: YES. In its complaint Commando is not seeking any relief under the Labor
SMC had never really been in distress but was growing in sales during the time Code but seeks payment of a sum of money and damages on account of
of the retrenchment and that it hired new employees. In 1986, they filed a Lapadays alleged breach of its obligation under their contract. The action is
complaint to annul the retrenchment program. LA dismissed due to prescription. within the realm of civil law, hence regular courts have jurisdiction. While the
NLRC affirmed. In 1993, respondents filed with RTC a complaint for damages resolution of the issue involves the application of labor laws, reference to the
against SMC. SMC moved to dismiss, RTC granted, arguing that the complaint is labor code was only for the determinations of the solidary liability of Lapanday
a labor dispute. CA reversed to Commando where no employer-employee relationship exists. In the cases
Issue: Whether RTC has jurisdiction enumerated in Art. 217, an employer-employee relationship is an indispensable
jurisdictional requirement, and there is none in this case. (N.B. on the merits,
Held: NO. Under the REASONABLE CAUSAL CONNECTION RULE, if there is a Commando lost because in order for Lapanday to be liable the former should
reasonable causal connection between the claim asserted and the employer- have actually paid the adjusted wages of the guards. This it did not, thus it had no
employee relations, then the case is within the jurisdiction of our labor courts. In cause of action.)
the absence of such nexus, it is the regular courts that have jurisdiction. In this
case, while respondents insist that their action is for the declaration of nullity of Abbot Laboratories Phils., Inc. v. Abbot Labs Employees Union, 323 SCRA
their contract of termination, what is inescapable is that fact that it is really an 392
action for damages emanating from employer-employee relations. First, their Abbot filed for the cancellation of certificate of registration of ALEU due to
claim for damages is grounded on SMCs deceptiona case of illegal dismissal. procedural infirmities. Regional Director-BLR cancelled. ALEU appealed to
Second, the prayer and allegations in their LA complaint and RTC complaint are SOLE, who referred the matter to the BLR Director, who reversed. Abbot
almost identical, save for the exclusion of prayer for reinstatement and appealed to SOLE. SOLE refused to act on the ground that it had no jurisdiction

Atty. Marlon Manuel
to review the decision of the BLR on appeals in cancellation cases emanating implementing the writ. The complaint was in effect a motion to quash the writ of
from the Regional Offices. execution of a decision rendered on a case properly within the jurisdiction of the
Issue: Whether SOLE can review BLR decisions rendered in its appellate LA, to wit: Illegal Dismissal and Unfair Labor Practice. Considering the factual
jurisdiction over decisions of the Regional Director in cases involving setting, it is then logical to conclude that the subject matter of the third party
cancellation of certificates of registration of labor unions claim is but an incident of the labor case, a matter beyond the jurisdiction of
RTCs. Precedents abound confirming the rule that said courts have no
Held: NO. Pursuant to Rule VIII, Book V, IRR, the appellate jurisdiction of the jurisdiction to act on labor cases or various incidents arising therefrom, including
SOLE is limited only to a review of cancellation proceedings decided by the the execution of decisions, awards or orders. Jurisdiction to try and adjudicate
BLR in the exercise of its exclusive and original jurisdictions. The SOLE has no such cases pertains exclusively to the proper labor official concerned under the
jurisdiction over decisions of the BLR rendered in exercise of its appellate power DOLE. To hold otherwise is to sanction split jurisdiction which is obnoxious to
to review the decision of the Regional Director in a petition to cancel the unions the orderly administration of justice. Petitioner failed to realize that by filing its
certificate of registration, said decision being final and unappealable. The remedy third-party claim with the deputy sheriff, it submitted itself to the jurisdiction of
of an aggrieved party is to seasonably avail of Rule 65. the NLRC acting through the LA. It failed to perceive the fact that what it is
really controverting is the decision of the LA and not the act of the deputy sheriff
Deltaventures Resources, Inc. v. Cabato, 327 SCRA 521 in executing said order issued as a consequence of said decision rendered.
LA found that respondents were illegally dismissed, ordering Green Mountain
Farm, Roberto Ongpin and Almus Alabe to pay the former various amounts. SC Baez v. Valdevilla, 331 SCRA 584
denied appeal. Respondents moved for issuance of writ of execution, which LA Petitioner filed a complaint for illegal dismissal against Oro Mktg., Inc. LA ruled
granted. The Sheriff levied on real property owned by Ongpin and scheduled its in his favor. NLRC affirmed. SC dismissed Oros petition for certiorari. Later,
public auction. A month before the auction, Deltaventures filed a third-party Oro filed a complaint for damages against petitioner with the RTC. Petitioner
claim asserting ownership over the property. LA suspended auction. Later, moved to dismiss on the ground of lack of jurisdiction over the subject matter of
Deltaventures filed with RTC a complaint for injunction and damages, with a the action, res judicata, splitting of causes of action, and forum-shopping. RTC
prayer for the issuance of a TRO against the Sheriff. RTC Judge issued TRO. denied.
Eventually, RTC ruled that it cannot enjoin the execution of a decision of the
NLRC, with which it is of equal rank. Issue: Whether RTC has jurisdiction
Issue: Whether RTC may take cognizance of petitioners complaint and Held: NO. Presently, and as amended by R.A. 6715, the jurisdiction of Labor
consequently provide the injunctive relief sought Arbiters and the NLRC in Article 217 is comprehensive enough to include claims
for all forms of damages arising from the employer-employee relations.
Held: NO. Petitioner filed the third-party claim before the court a quo by reason Whereas this Court in a number of occasions had applied the jurisdictional
of a writ of execution issued by the NLRC-CAR Sheriff against a property to provisions of Article 217 to claims for damages filed by employees, we hold that
which it claims ownership. Ostensibly the complaint before the trial court was for by the designating clause arising from the employer-employee relations Article
the recovery of possession and injunction, but in essence it was an action 217 should apply with equal force to the claim of an employer for actual damages
challenging the legality or propriety of the levy vis-a-vis the alias writ of against its dismissed employee, where the basis for the claim arises from or is
execution, including the acts performed by the LA and the Deputy Sheriff necessarily connected with the fact of termination, and should be entered as a

Atty. Marlon Manuel
counterclaim in the illegal dismissal case. There is no mistaking the fact that court: (1) is one to which the parties may conveniently resort to; (2) is in a
Oros claim against petitioner for actual damages arose from a prior employer- position to make an intelligent decision as to the law and the facts; (3) has or is
employee relationship. In the first place Oro would not have taken issue with likely to have power to enforce its decision. These conditions are unavailing in
petitioners doing business of his own had the latter not been concurrently its this case. Re (1): all the incidents of the case occurred outside the Phil; Palace
employee. Second, and more importantly, to allow RTC to proceed with the and MHICL are not Phil. nationals, nor are they doing business in the Phil.; the
instant action for damages would be to open anew the factual issue of whether main witnesses are non-residents. Re (2): no intelligent decision can be made as
petitioners installment sale scheme resulted in business losses and the to the law governing the employment conract as such was perfected in a foreign
dissipation of Oros property. soil; NLRC cannot determine the facts surrounding the dismisal as all acts
Clearly, respondent courts taking jurisdiction over the instant case would complained of took place in Beijing. Re (3) even assuing NLRC properly reaches
bring about precisely the harm that the lawmakers sought to avoid in amending a decision, it would not have any binding effect against Palace because
the Labor Code to restore jurisdiction over claims for damages of this nature to jurisdiction over it has not been acquired. This is not to say the Phil. courts and
the NLRC. This is, of course, to distinguish from cases of actions for damages agencies have no power to solve controversies involving foregn employers nor
where the employer-employee relationship is merely incidental and the cause of that we do not have power over an employment contract executed in a foreign
action proceeds from a different source of obligation. Thus, the jurisdiction of country. If Santos were an overseas conract worker, a Philippine forum,
regular courts was upheld where the damages, claimed for were based on, specifically the POEA, not the NLRC, would protect him. He is not an overseas
malicious prosecution, or breach of contract, as when the claimant seeks to contract worker, a fact which he admits. Even assuming that NLRC was proper
recover a debt from a former employee or seeks liquidated damages in forum, NLRC decision cannot be sustained on the meritsMHC is not liable
enforcement of a prior employment contract. being a separate entity; no emplyer-employee relationship between Santos and
MHICL.
Manila Hotel Corp. v. NLRC, 343 SCRA 1
Santos, a printer, transferred from Mazoon Printing Press, Oman to Palace Hotel, B. PROCEDURE
Beijing. Less than a year later, he was terminated due to business reversals
allegedly brought about by the Tiannamen Square massacre. Santos filed Maricalum Mining Corp. vs. NLRC, 298 SCRA 378
complaint for illegal dismissal with the NLRC, naming as respondents Manila The certificate of non-forum shopping as provided by this Court Circular 04-94 is
Hotel Corp.(MHC), Manila Hotel Intl Co., Ltd (MHICL), Palace Hotel and its mandatory and should accompany pleadings filed before the NLRC. Court
GM [N.B. under a management contract MHICL trained the personnel of Palace, Circular No. 04-94 is clear and needs no further interpretation.
MHC owns 50% of MHICL; they are the petitioners]. Palace and its GM were The NLRC is a quasi-judicial agency, hence, initiatory pleadings filed
not served with summons. LA ruled for Santos. NLRC reversed for want of before it should be accompanied by a certificate of non-forum-shopping.
jurisdiction, enjoining Santos to file his complaint with the POEA; but eventually
reconsidered, ruling for Santos. Philtranco Service Enterprise, Inc. vs. NLRC, 288 SCRA 585
Issue: Whether NLRC has jurisdiction Sec. 1, Rule IV of the 1990 NLRC Rules additionally provides that, for
purposes of venue, workplace shall be understood as the place or locality where
Held: NO. Under the rule of forum non conveniens, a Phil. court or agency may the employee is regularly assigned when the cause of action arose.
assume jurisdiction over the case if it chooses to do so provided that the Phil

Atty. Marlon Manuel
From the foregoing, it is obvious that the filing of the complaint with the is discretionary on the labor arbiter and the parties cannot demand it as a
National Capital Region Arbitration Branch was proper, Manila being considered matter of right. More often than not, a litigant may be heard more
as part of Nievas workplace by reason of his plying the Legaspi City-Pasay City creditably through pleadings than through oral arguments. In
route. administrative proceedings, technical rules of procedure and evidence are
It should be noted that a petition for certiorari under Rule 65 of the Rules not strictly applied; administrative due process cannot be fully equated
of Court will prosper only if there is a showing of grave abuse of discretion or an with due process in its strict judicial sense. Due process was designed to
act without or in excess of jurisdiction on the part of the National Labor afford an opportunity to be heard, and an actual verbal hearing need not
Relations Commission. It does not include an inquiry as to the correctness of the always be held. The necessity of conducting a hearing is addressed to the
evaluation of evidence which was the basis of the labor official or officer in
sound discretion of the labor arbiter.
determining his conclusion. It is not for this Court to re-examine conflicting
evidence, re-evaluate the credibility of witnesses, nor substitute the findings of These rules equally apply to cases filed with the Philippine Overseas
fact of an administrative tribunal which has gained expertise in its special field. Employment Administration Adjudication Office. Sec. 6 of Rule III, Book VII of
the POEA Rules and Regulations of 1991 categorically states that proceedings
Vinta Maritime Co., Inc vs. NLRC, 284 SCRA 656 before a POEA hearing officer is non-litigious, although they are still subject to
Issue: Rendering the assailed resolution and decisions without a full-blown trial the requirements of due process. Under the POEA Rules in force at the time the
on the merits complaint was filed, summary judgments in which the pleadings, affidavits
and evidence submitted are sufficient to render a decision are allowed under
Held: Trial is Not Indispensable in Administrative Due Process
Sec. 4. Where the parties fail to agree on an amicable settlement and summary
Petitioners claim that Respondent Commission gravely abused its discretion in judgment is not appropriate, a judgment based on position papers may be
upholding the POEAs decision, which was based on the position papers and resorted to under Section 5. Where there are complicated factual issues involved
documents submitted by the parties in view of a motion for trial which remained which cannot be resolved through such means, the hearing officer may direct the
unacted upon. They insist that a hearing was an indispensable condition before a parties to submit suggested written clarificatory questions to be propounded to
judgment could be rendered in this case. the party concerned.
We do not agree. Although bound by law and practice to observe due
process, administrative agencies exercising quasi-judicial powers are nonetheless Tabang vs. NLRC, 266 SCRA 462
free from the rigidity of certain procedural requirements. We agree with the findings of the NLRC that it is the SEC which has jurisdiction
over the case at bar. The charges against herein private respondent partake of the
As applied to these proceedings, due process requires only an nature of an intra-corporate controversy. Similarly, the determination of the rights
opportunity to explain ones side In labor cases, this Court has consistently of petitioner and the concomitant liability of private respondent arising from her
held that due process does not necessarily mean or require a hearing, but ouster as a medical director and/or hospital administrator, which are corporate
simply an opportunity or a right to be heard. The requirements of due offices, is an intra-corporate controversy subject to the jurisdiction of the SEC.
process are deemed to have been satisfied when parties are given the Contrary to the contention of petitioner, a medical director and a hospital
opportunity to submit position papers. The holding of an adversarial trial administrator are considered as corporate officers under the by-laws of

Atty. Marlon Manuel
respondent corporation. Section 2(i), Article I thereof states that one of the Held: (on the issue of evidence)
powers of the Board of Trustees is (t)o appoint a Medical Director, In the instant case, there is no dispute that matters concerning an employees
Comptroller/Administrator, Chiefs of Services and such other officers as it may actual hours of work are within the ambit of management prerogative. When an
deem necessary and prescribe their powers and duties. employer alleges that his employee works less than the normal hours of
The president, vice-president, secretary and treasurer are commonly employment as provided for in the law, he bears the burden of proving his
regarded as the principal or executive officers of a corporation, and modern allegation with clear and satisfactory evidence.
corporation statutes usually designate them as the officers of the corporation. The NLRC relied solely on the supposed daily time records submitted by
However, other offices are sometimes created by the charter or by-laws of a the employer. But this is not substantial evidence to prove Prangan worked only
corporation, or the board of directors may be empowered under the by-laws of a four hours a day. Prangan asserted that his signature in the DTRs were forged.
corporation to create additional offices as may be necessary. This was hardly controverted by the employer, who did not even try to submit
It has been held that an office is created by the charter of the employment contracts, payrolls, notice of assignment, cash vouchers or any other
corporation and the officer is elected by the directors or stockholders. On the convincing evidence.
other hand, an employee usually occupies no office and generally is employed
not by action of the directors or stockholders but by the managing officer of the Rubberworld, vs .NLRC, April 14, 1999
corporation who also determines the compensation to be paid to such employee. Presidential Decree 902-A, as amended, provides that upon the
In the case at bar, considering that herein petitioner, unlike an ordinary appointment of a management committee, rehabilitation receiver, board or body
employee, was appointed by respondent corporations Board of she is deemed an pursuant to this Decree, all actions for claims against corporations, partnerships,
officer of the corporation. Perforce, Section 5(c) of Presidential Decree No. 902- or associations under management or receivership pending before any court,
A, which provides that the SEC exercises exclusive jurisdiction over tribunal, board or body shall be suspended accordingly. Such suspension is
controversies in the election or appointment of directors, trustees, officers or intended to give enough breathing space for the management committee or
managers of corporations, partnerships or associations, applies in the present rehabilitation receiver to make the business viable again, without having to divert
dispute. Accordingly, jurisdiction over the same is vested in the SEC, and not in attention and resources to litigations in various fora. Among the actions
the Labor Arbiter or the NLRC. suspended are those for money claims before labor tribunals, like the National
Labor Relations Commission (NLRC) and the labor arbiters.
Prangan vs. NLRC, 289 SCRA 142 Labor Claims Included In Suspension Order
Prangan was hired for security services by Masagana Security Services Corp The law is clear: upon the creation of a management committee or the
and was assigned to Cat House Bar and Restaurant until the latters closure. appointment of a rehabilitation receiver, all claims for actions shall be
Prangan filed a complaint against Masagana for underpayment and non- suspended accordingly. No exception in favor of labor claims is mentioned in
payment of wages and other benefits. Masagana rejected the claim and alleged the law. Since the law makes no distinction or exemptions, neither should this
that it is a mere agent and the real liability is attached with Cat House, as direct Court. Ubi lex non distinguit nec nos distinguere debemos. Allowing labor cases
employer. to proceed clearly defeats the purpose of the automatic stay and severely
encumbers the management committees time and resources. The said committee

Atty. Marlon Manuel
would need to defend against these suits, to the detriment of its primary and liquidation, of petitioner-corporation. Hence, the preference of credit granted to
urgent duty to work towards rehabilitating the corporation and making it viable workers or employees under Article 110 of the Labor Code is not applicable.
again. To rule otherwise would open the floodgates to other similarly situated
claimants and forestall if not defeat the rescue efforts. Besides, even if the NLRC Alemars Sibal and Sons, Inc., vs. NLRC, GR 114761, Jan. 19, 2000
awards the claims of private respondents, as it did, its ruling could not be Facts: In 1985, Labor Arbiter rendered a decision ordering Penalosa to pay
enforced as long as the petitioner is under the management committee. private respondent separation pay equivalent to one-half () month pay for every
In Chua v. National Labor Relations Commission, we ruled that labor year of service. At the hearing held in 1988, petitioner and private respondent
claims cannot proceed independently of a bankruptcy liquidation proceeding, agreed to the computation of the separation pay. Thus, Labor Arbiter Jose de
since these claims would spawn needless controversy, delays, and confusion. Vera directed petitioner to pay the agreed amount of P20,736.53 representing
With more reason, allowing labor claims to continue in spite of a SEC suspension 10% of the total amount of the separation pay due the complainants on May 16,
order in a rehabilitation case would merely lead to such results. 1988.
Article 217 of the Labor Code should be construed not in isolation but in On June 10, 1988, the Rehabilitation Receiver of petitioner submitted a
harmony with PD 902-A, according to the basic rule in statutory construction that Manifestation with Motion, alleging that petitioner was not yet in a position to
implied repeals are not favored. Indeed, it is axiomatic that each and every statute comply with the directive of Labor Arbiter de Vera for the reason that it was still
must be construed in a way that would avoid conflict with existing laws. True, under Rehabilitation Receivership by virtue of the order of the Securities and
the NLRC has the power to hear and decide labor disputes, but such authority is Exchange Commission (SEC) dated August 1, 1984. Thus, it sought deferment of
deemed suspended when PD 902-A is put into effect by the Securities and such payment until the SEC will issue an order formally approving the
Exchange Commission. rehabilitation of petitioner and allowing complainants to file their claims with the
Rehabilitation Receiver.
PALABOK: Preference in Favor of Workers in Case of Bankruptcy or Held: We note that at the time this petition had been filed on May 4, 1994,
Liquidation petitioner had been placed under rehabilitation receivership. Jurisprudence has
The preferential right of workers and employees under Article 110 of the Labor established that a stay of execution may be warranted by the fact that a petitioner
Code may be invoked only upon the institution of insolvency or judicial corporation has been placed under rehabilitation receivership. However, it is
liquidation proceedings. Indeed, it is well-settled that a declaration of undisputed that on March 5, 1997, the Securities and Exchange Commission
bankruptcy or a judicial liquidation must be present before preferences over issued an order approving the proposed rehabilitation plan of petitioner and
various money claims may be enforced. But debtors resort to preference of placing it under liquidation pursuant to Presidential Decree 902-A. Subject to the
credit giving preferred creditors the right to have their claims paid ahead of control of the SEC, the liquidator was ordered to wind up the affairs of the
those of other claimants only when their assets are insufficient to pay their corporation, continue to manage the corporation for purposes of liquidation in
debts fully. The purpose of rehabilitation proceedings is precisely to enable the order to protect the interest of its creditors and avoid dissipation, loss, wastage, or
company to gain a new lease on life and thereby allow creditors to be paid their destruction of the remaining assets and other properties of the corporation and to
claims from its earnings. In insolvency proceedings, on the other hand, the ensure orderly payment of claims against such corporation in accordance with
company stops operating, and the claims of creditors are satisfied from the assets applicable laws.
of the insolvent corporation. The present case involves the rehabilitation, not the

Atty. Marlon Manuel
Thus, petitioner pointed out that the SECs order suspending all claims correctly. Petitioners premature invocation of public respondents intervention
against it pending before any other court, tribunal or body was pursuant to the is fatal to his cause of action.
rehabilitation receivership proceedings. Such order was necessary to enable the Evidently, when petitioner brought before the DOLE his complaint charging
rehabilitation receiver to effectively exercise its powers free from any judicial or private respondents with unauthorized and illegal disbursement of union funds,
extra-judicial interference that might unduly hinder the rescue of the distressed he overlooked or deliberately ignored the fact that the same is clearly dismissible
company. Since receivership proceedings have ceased and petitioners for non-exhaustion of administrative remedies
rehabilitation receiver and liquidator, has been given the imprimatur to proceed
with corporate liquidation, the cited order of the Securities and Exchange C. Appeal; Judicial Review
Commission has been rendered functus officio. Thus, there is no legal
impediment for the execution of the decision of the Labor Arbiter for the Mebuhay Devt Industries vs. NLRC, 288 SCRA 1
payment of separation pay. MENDOZA, J p: (BAR EXAMINER!)
Considering that petitioners monetary obligation to private respondent is Art. 223 of the Labor Code, which provides:
long overdue and that petitioner has signified its willingness to comply with such Appeal. Decisions, awards, or orders of the Labor Arbiter are final and
obligation by entering into an agreement with private respondent as to the executory unless appealed to the Commission by any or both parties within ten
amount and manner of payment, petitioner can not delay satisfaction of private (10) calendar days from receipt of such decisions, awards, or orders.
respondents claim. However, due to events subsequent to the filing of this Indeed, as already stated, a copy of the Labor Arbiters decision was
petition, private respondent must present its claim with the rehabilitation receiver served on private respondents counsel on August 18, 1989 but they filed an
and liquidator of petitioner, subject to the rules on preference of credits. appeal memorandum only on August 30, 1989 and paid the appeal fees only on
September 1, 1989. As a rule, the perfection of an appeal in the manner and
Diamonon vs. DOLE, GR 108951, Mar. 7, 2000 within the period prescribed by law is jurisdictional and failure to perfect an
When the Constitution and by-laws of both unions dictated the remedy for intra- appeal as required by law renders the judgment final and executory. There may
union dispute, such as petitioners complaint against private respondents for be exceptional cases, however, where, as pointed out in City Fair Corporation v.
unauthorized or illegal disbursement of unions funds, this should be resorted to NLRC, greater injustice may occur if an appeal is not given due course than if the
before recourse can be made to the appropriate administrative or judicial body, reglementary period to appeal were strictly followed. In such cases, proceedings
not only to give the grievance machinery or appeals body of the union the before such agencies as the NLRC need not adhere strictly to technicalities to
opportunity to decide the matter by itself, but also to prevent unnecessary and attain substantial justice.
premature resort to administrative or judicial bodies. Thus, a party with an
administrative remedy must not merely initiate the prescribed administrative In the case at bar, the NLRC was justified in giving Art. 223 of the Labor
procedure to obtain relief, but also pursue it to its appropriate conclusion before Code a liberal application because, as will presently be shown, there is no clear
seeking judicial intervention. This rule clearly applies to the instant case. The evidence to prove that private respondents were liable for the loss of
underlying principle of the rule on exhaustion of administrative remedies rests on merchandise. In addition, petitioners did not oppose private respondents appeal
the presumption that when the administrative body, or grievance machinery, as in or question the jurisdiction of the NLRC until an adverse judgment was rendered
this case, is afforded a chance to pass upon the matter, it will decide the same against them. Petitioners were thus estopped to deny the jurisdiction of the
NLRC

Atty. Marlon Manuel
Philippine Scout Veterans Security and Investigation Agency, Inc. vs. NLRC, via a special power of attorney) refused to see their counsel, and delay in
December 4, 1998 contacting the other petitioners.
Article 221 of the Labor Code provides that in any proceeding before the Issue: Whether certiorari lies despite petitioners failure to move for
Commission or any of the Labor Arbiters, the rules of evidence prevailing in reconsideration
courts of law or equity shall not be controlling. It is the spirit and intention of the
Code that the Commission and its members as well as the Labor Arbiters use all Held: NO. It is settled that the filing of a motion for reconsideration of the order,
reasonable means to ascertain the facts in each case speedily and objectively, resolution or decision of the tribunal, board or office is, subject to well-
without regard to technicalities of law or procedure, all in the interest of due recognized exceptions, a condition sine qua non to the institution of a special
process. civil action for certiorari. The rationale therefor is that the law intends to afford
the tribunal, board or office an opportunity to rectify the errors and mistakes it
Clearly, respondent NLRC committed grave abuse of discretion by may have lapsed into before resort to the courts of justice can be had. Petitioners
strictly applying procedural technicalities in the case before it, in complete explanation concerning their failure to move for reconsideration is not sufficient
disregard of established policy of the Labor Code and jurisprudence. In affirming justification for dispensing with the requirement. In fact, it is not even among the
the doctrine that the Commission and the Labor Arbiters may avail themselves of recognized exceptions to the above rule. Certiorari cannot be resorted to as a
all reasonable means to speedily ascertain the facts of a controversy, we uphold shield from the adverse consequences of petitioners own omission to file the
the power of respondent NLRC to consider even on appeal such other and required motion for reconsideration. It is worth stressing that certiorari will lie
additional documentary evidence from the parties if only to support their only if there is no appeal nor any other plain, speedy and adequate remedy in the
contentions. This is in accord with the well settled doctrine that rules of ordinary course of law against the acts of the NLRC. In the instant case, the
procedure and evidence should not be applied in a very rigid and technical sense remedy expressly provided by law was a motion for reconsideration, which was
in labor cases and that technicality should not be allowed to stand in the way of not only expected to be but would actually have provided an adequate and more
equitably and completely resolving the rights and obligations of the parties. speedy remedy than the present petition for certiorari. Also, Sec. 2, pars. (a), (b)
and (c), Rule VIII, of the New Rules of Procedure of the NLRC specifically
Alcosero vs. NLRC, 288 SCRA 129 provides for the finality of the decision of the Commission after the lapse of the
Petitioners Alcosero et al. wrote DOLE Regional Director presenting their claims 10-day reglementary period. Thus, without the required motion for
for unpaid wages and 13th month pay against Apex Mining Co., Inc. for 1990. In reconsideration nothing prevented the resolution of the NLRC from becoming
a conference before the LA, Apex did not contest some of the collectibles final and executory. Petitioners cannot now, by an overdue strategy, question the
presented by petitioners. LA ordered Apex to pay. Eventually, Apex did, with correctness of the resolution.
petitioners signing corresponding receipts and quitclaims. Later petitioners
submitted another certificate of net collectibles for the years 1991 and 1992, with PNCC V. NLRC, 292 SCRA 266
added claims for vacation and sick leave pay, and uniform allowances. LA ruled Petitioner did not file a motion for reconsideration stating that it was not aware of
for petitioners. NLRC reversed. Petitioners went to the SC via Rule 65, without the appeal interposed by private respondents, as it was not furnished a copy of
previously filing a motion for reconsideration of the NLRC decision. One of the private respondents memorandum of appeal. Instead, petitioner directly filed this
petitioners explained such omission: Alcosero (who was deputized by the others petition for certiorari.

Atty. Marlon Manuel
After a careful examination of the records, the Court fully agrees with in the judgment appealed from for the appeal to be perfected, may be considered
the Solicitor Generals view that the proceedings before the NLRC were tainted a jurisdictional requirement, nevertheless, adhering to the principle that
with due process violation. It appears that petitioner was not a participant in the substantial justice is better served by allowing the appeal on the merits threshed
appeal interposed by private respondents. Apparently, such non-participation was out by the NLRC, the Court finds and so holds that the foregoing requirement of
never petitioners choice as the record is bereft of any indication that petitioner the law should be given a liberal interpretation.
was ever informed or notified of private respondents appeal. There is no proof Then too, in Oriental Mindoro Electric Cooperative, Inc. v. National
that petitioner was furnished a copy of private respondents Memorandum of Labor Relations Commission (246 SCRA 801 [1995]), we held: The intention of
Appeal, nor was it required to comment thereon. No reference is made the lawmakers to make the bond an indispensable requisite for the perfection of
whatsoever in the NLRC Decision to any argument, position or comment raised an appeal by the employer is underscored by the provision that an appeal by the
by petitioner in response to the appeal. That petitioner was denied due process is employer may be perfected only upon the posting of a cash or surety bond. The
well-substantiated. word only makes it perfectly clear, that the lawmakers intended the posting of
The NLRCs grave omission to afford petitioner a chance to be heard on a cash or surety bond by the employer to be the exclusive means by which an
appeal is a clear violation of its constitutional right and has the effect of employers appeal may be perfected. The requirement is intended to discourage
rendering its judgment null and void. employers from using an appeal to delay, or even evade, their obligation to
It is a cardinal rule in law that a decision or judgment is fatally defective satisfy their employees just and lawful claims. Considering, however, that the
if rendered in violation of a party-litigants right to due process current policy is not to strictly follow technical rules but rather to take into
account the spirit and intention of the Labor Code, it would be prudent for us to
Petitioners non-filing of a motion for reconsideration of the NLRCs look into the merits of the case, especially since petitioner disputes the allegation
decision is understandable considering that it was deprived of due process. The that private respondent was illegally dismissed.
Court has ruled that a motion for reconsideration may be dispensed with prior to
commencement of an action for certiorari where the decision is a patent nullity Biogenerics vs. NLRC, Sept.8, 1999
or where petitioner was deprived of due process. The requirement of a cash or surety bond for the perfection of an appeal from a
Labor Arbiters monetary award is jurisdictional; non-compliance therewith is
UERM vs. National Labor Relations Commission, 269 SCRA 70 fatal and renders the award final and executory. Corollarilly, failure to file a
The applicable law is Article 223 of the Labor Code, as amended by Republic motion for reconsideration of a resolution of the National Labor Relations
Act No. 6715, which provides: In case of a judgment involving a monetary Commission (NLRC) as a requisite sine qua non in pursuing any further relief or
award, an appeal by the employer may be perfected only upon the posting of a subsequent remedy likewise gives a stamp of finality to the resolution.
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 We have ruled that the implementing rules of respondent NLRC are
appealed from. We have given a liberal interpretation to this provision. unequivocal in requiring that a motion for reconsideration of the order, resolution
or decision of respondent Commission should be seasonably filed as a
In YBL (Your Bus Line) v. NLRC , 190 SCRA 164 (1990) we ruled: . . . precondition for pursuing any further or subsequent recourse, otherwise, the
that while Article 223 of the Labor Code, as amended by Republic Act No. 6715, order, resolution or decision would become final and executory after ten (10)
requiring a cash or surety bond in the amount equivalent to the monetary award calendar days from receipt thereof. 9 Obviously, the rationale therefor is that the

Atty. Marlon Manuel
law intends to afford the NLRC an opportunity to rectify such errors or mistakes D. EXECUTION
it may have committed before resort to courts of justice can be had. This merely
adopts the rule that the function of a motion for reconsideration is to point out to Pioneer Texturing vs. NLRC, 280 SCRA 806
the court the error it may have committed and to give it a chance to correct itself. Pioneer argues that an order for reinstatement is not self-executory; that there
Subsequent issuance by the NLRC of the questioned Resolution dated 5 June must be a writ of execution which may be issued by the NLRC or by the Labor
1995 was, therefore, a mere surplusage sought only to formalize the finality of Arbiter motu proprio or on motion of an interested party. Further that even if a
the order. On the other hand, the motion for reconsideration thereon by writ of execution was issued, a timely appeal coupled by the posting of
petitioners was futile and belated as there was already a final judgment. appropriate supersedeas bond, effectively forestalled and stayed execution of the
It is obvious that since no appeal bond was posted by petitioners, no reinstatement order of the Labor Arbiter. As supporting authority, petitioners
appeal was perfected from the decision of the Labor Arbiter, for which reason the emphatically cite and bank on the case of Maranaw Hotel Resort Corporation
decision sought to be appealed to the NLRC had in the meantime become final (Century Park Sheraton Manila) v. NLRC , 238 SCRA 190.
and executory and therefore immutable. Complainant de Jesus, maintains that petitioner should have reinstated
Appeals from decisions of the Labor Arbiter are governed by the her immediately after the decision of the Labor Arbiter since the law mandates
provisions of Rule VI of the New Rules of Procedure of the NLRC Thus it is that an order for reinstatement is immediately executory. An appeal, she says,
clear that the appeal from any decision, award or order of the Labor Arbiter to the could not stay the execution of a reinstatement order for she could either be
NLRC shall be made within ten (10) calendar days from receipt of such decision, admitted back to work or merely reinstated in the payroll without need of a writ
award or order, and must be under oath, with proof of payment of the required of execution. De Jesus argues that a writ of execution is necessary only for the
appeal fee accompanied by a memorandum of appeal. In case the decision of the enforcement of decisions, orders, or awards which have acquired finality. In
Labor Arbiter involves a monetary award, the appeal is deemed perfected only effect, de Jesus is urging the Court to re-examine the ruling laid down in
upon the posting of a cash or surety bond also within ten (10) calendar days from Maranaw.
receipt of such decision in an amount equivalent to the monetary award. The Issue: Whether or not an order for reinstatement needs a writ of execution.
mandatory filing of a bond for the perfection of an appeal is evident from the Held: Article 223 of the Labor Code, as amended by R.A. No. 6715 pertinently
aforequoted provision that the appeal may be perfected only upon the posting of provides:
cash or surety bond. It is not an excuse that the over P2 million award is too
much for a small business enterprise, like the petitioner company, to shoulder. ART. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are
The law does not require its outright payment, but only the posting of a bond to final and executory unless appealed to the Commission by any or both parties
ensure that the award will be eventually paid should the appeal fail. What within ten (10) calendar days from receipt of such decisions, awards, or orders.
petitioners have to pay is moderate and reasonable sum for the premium for such Such appeal may be entertained only on any of the following grounds:
bond. xxx xxx xxx
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

Atty. Marlon Manuel
his dismissal or separation or, at the option of the employer, merely reinstated in the petitioners Co Tuan, et al., were levied upon. Upon learning of such levy, the
the payroll. The posting of a bond by the employer shall not stay the execution petitioners filed an Urgent Motion to Quash the Writ of Execution, claiming that
for reinstatement provided herein. they hold valid and lawful title to the said properties. The motion was granted
The amendment introduced by R.A. No. 6715 employs the phrase shall and complainants appealed to the NLRC asking that the Labor Arbiter be ordered
immediately be executory without qualification. As a rule, shall when used in to implead the petitioners as respondents, and praying that the sale between the
a statute, is mandatory. An appeal or posting of bond, by plain mandate of the petitioners and Buda Enterprises, be declared void. The NLRC directed the Labor
law, could not even forestall nor stay the executory nature of an order of Arbiter to implead the petitioners and to conduct a hearing to determine whether
reinstatement. the sale of the land was made to avoid the payment of their claims. The Labor
Arbiter issued an order holding that his Office was incompetent to determine
In conformity with the executory nature of the reinstatement order, Rule whether fraud tainted the questioned sale.
V, Section 16 (3) of the New Rules of Procedure of the NLRC strictly requires
the Labor Arbiter to direct the employer to immediately reinstate the dismissed Complainants again appealed such decision, contending that the Labor
employee. Arbiter gravely abused its discretion in ignoring the directives of the Commission
to implead the petitioners and conduct a hearing. On appeal, the NLRC ruled that
A closer examination shows that the necessity for a writ of execution the Labor Arbiter erred in not impleading the petitioners.
under Article 224 applies only to final and executory decisions which are not
within the coverage of Article 223. Article 224 states that the need for a writ of Aggrieved, petitioners have come to this Court, theorizing that NLRC is
execution applies only within five (5) years from the date a decision, an order or incompetent to determine the legality of the sale between the petitioners and the
award becomes final and executory. It can not relate to an award or order of respondent company, the task being judicial in nature.
reinstatement still to be appealed or pending appeal which Article 223 Held: The Petition was granted.
contemplates. The provision of Article 223 is clear that an award for A government functionary like the respondent labor arbiter is
reinstatement shall be immediately executory even pending appeal and the incompetent to make a determination of the issue on hand. The task is judicial
posting of a bond by the employer shall not stay the execution for reinstatement. and the proceedings must be adversary. In a long line of cases, this Court has
The legislative intent is to make an award of reinstatement immediately pronounced that the power of the court, or the NLRC, for that matter, to execute
enforceable, even pending appeal. To require the application for and issuance of a its judgment extends only to properties unquestionably belonging to the judgment
writ of execution as prerequisites for the execution of a reinstatement award debtor. Therefore, if the property under levy does not belong to the judgment
would certainly betray and run counter to the very object and intent of Article debtor in the NLRC case, it could not be validly levied upon by the sheriff for the
223, i.e., the immediate execution of a reinstatement order. The reason is simple. satisfaction of the judgment therein. Even upon a mere prima facie showing of
An application for a writ of execution and its issuance could be delayed for ownership by the third party claimant, if the third party claim does not involve
numerous reasons. nor grows out of, a labor dispute, a separate action for injunctive relief against
such levy may be maintained in court.
Co Tuan vs. NLRC, 289 SCRA 415
Judgment was rendered for the complainant CLUP against respondent Buda
Enterprises. A writ of execution was issued and 5 parcels of land allegedly
belonging to Buda Enterprises but later found to be registered under the names of

Atty. Marlon Manuel
SGS Far East Ltd. Vs. NLRC, 286 SCRA 335 ministerial duty of the court to issue the execution. The general rule, however,
A complaint for underpayment of wages and violation of labor standard laws, cannot be applied where the writ of execution is assailed as having varied the
was filed by Philippine Social Security Labor Union Federation (PSSLU) and decision. In the case at bar, petitioners have vigorously assailed the correctness of
thirteen (13) of its members. The case was amicably settled when the parties the computation of the Labor Arbiter. They also alleged it has materially altered
executed a compromise agreement where the 13 complainants will be paid the decision of first arbiter. If petitioners are correct, they are entitled to the
P50,000.00 and there shall be no change in the terms and conditions governing remedy of appeal to the NLRC. The NLRC is vested with authority to look into
the employment of all the 13 complainants in this case. Thus, the NLRC Case the correctness of the execution of the decision and to consider supervening
was dismissed. events that may affect such execution.
3 years later, 4 of the complainants filed a Manifestation and Motion
alleging that violated the August 4, 1982 Compromise Agreement. Petitioner IMIDC vs. NLRC, 331 SCRA 640
SGS filed a Motion to Dismiss alleging that Labor Arbiter had no jurisdiction to In September 1984, a complaint with the Department of Labor and Employment,
decide private respondents Motion and Manifestation which raised a cause of against INIMACO for payment of separation pay and unpaid wages. Judgment
action not covered by the Compromise Agreement. The Labor Arbiter rendered was rendered in favor of complainants. The Labor Arbiter issued an Alias Writ of
judgment ordering respondents to pay the four (4) individual complainants Execution. Petitioner filed a Motion to Quash Alias Writ of Execution and Set
P20,129.43 each; to reinstate them with backwages for three (3) years. Aside Decision, 3 alleging the alias writ of execution altered and changed the
SGS appealed to the NLRC. The NLRC reversed the Labor Arbiter and tenor of the decision by changing the liability of therein respondents from joint to
ruled that the latter had no jurisdiction and that private respondents should file a solidary, by the insertion of the words AND/OR between Antonio
new case. Private respondents filed a Petition for Certiorari before the SC who Gonzales/Industrial Management Development Corporation and Filipinas Carbon
resolved that Labor Arbiter had jurisdiction to decide the claims of private and Mining Corporation, et al. The Labor Arbiter denied the motion.
respondents. Issue: The only issue in this petition is whether petitioners liability pursuant to
The case was referred to a different labor arbiter for execution. The the Decision of the Labor Arbiter dated March 10, 1987, is solidary or not.
Labor Arbiter required the parties to submit their respective computations of the Held: The SC ruled that petitioner INIMACOs liability is not solidary but
monetary award given in the decision of first Labor Arbiter. Private respondents merely joint and that the respondent NLRC acted with grave abuse of discretion
computation reached P4,806,052.41. The computation of petitioners merely in upholding the Labor Arbiters Alias Writ of Execution and subsequent Orders
totalled P298,552.48. The Labor Arbiter issued a writ of execution for the to the effect that petitioners liability is solidary. Well-entrenched is the rule that
amount of P4,806,052.41. Petitioners appealed the writ to the NLRC. But the solidary obligation cannot lightly be inferred. In the dispositive portion of the
NLRC dismissed it holding it has no jurisdiction because this was merely the Labor Arbiter, the word solidary does not appear. It is already a well-settled
implementation of a SC decision. doctrine in this jurisdiction that, when it is not provided in a judgment that the
Held: The SC held that NLRC gravely abused its discretion in refusing to defendants are liable to pay jointly and severally a certain sum of money, none of
assume jurisdiction over the appeal of the petitioners. Its refusal is based on the them may be compelled to satisfy in full said judgment. The dispositive part of a
general rule that after a decision has become final, the prevailing party becomes decision or order is the controlling factor as to settlement of rights of the parties.
entitled as a matter of right to its execution, that it becomes merely the Once a decision or order becomes final and executory, it is removed from the
power or jurisdiction of the court which rendered it to further alter or amend it. It

Atty. Marlon Manuel
thereby becomes immutable and unalterable and any amendment or alteration Under Rule 39, Section 6, 1964 Revised Rules of Court, a judgment may
which substantially affects a final and executory judgment is null and void for be executed on motion within five (5) years from the date of its entry or from the
lack of jurisdiction, including the entire proceedings held for that purpose. An date it becomes final and executory. After the lapse of such time, and before it is
order of execution which varies the tenor of the judgment or exceeds the terms barred by the statute of limitations, a judgment may be enforced by action. This
thereof is a nullity. rule applies to the case as the Rules of Court are applicable to labor cases in a
suppletory capacity.
Tag Fibers vs. NLRC, 344 SCRA 2000 In this particular case, the of the Labor Arbiter became final. Hence, the
Petitioner Tag Fibers, Inc. absorbed respondents from its predecessors, Smith Labor Arbiter had no jurisdiction when he set a conference on March 23, 1993.
Bell and Company as regular and permanent employees until they were all The conference could no longer be lawfully convoked. When the NLRC issued
terminated because of company losses. Later petitioner Tag Fibers, Inc. re-hired the resolution ordering the petitioner to pay separation pay from February 1983
respondents Ricardo Abanes and twenty (20) others effective on the day after the to June 1993, it modified its own final judgment, and worse, acted without
termination of their employment as piece-rate workers. When petitioners learned jurisdiction. The finality of a decision is a jurisdictional event that cannot be
that respondents filed a complaint for violation of the Minimum Wage Law made to depend on the convenience of a party.
petitioners prohibited them from working. Respondents filed with the Labor
Arbiter a complaint for illegal dismissal. The Labor Arbiter rendered a decision E. INJUNCTION
ordering Tag Fibers to reinstate complainants to their respective former positions
without loss of seniority rights and privileges and to pay P10,858.68. The PAL vs. NLRC, 287 SCRA 672
petitioners paid respondents the full amount of the monetary award of Can the National Labor Relations Commission (NLRC), even without a
P10,858.68, but refused to reinstate the respondents. Consequently, the issue of complaint for illegal dismissal filed before the labor arbiter, entertain an action
reinstatement was set for a conference between the parties. for injunction and issue such writ enjoining petitioner Philippine Airlines, Inc.
Respondents filed a motion to direct petitioners to pay them backwages from enforcing its Orders of dismissal against private respondents, and ordering
in view of petitioners refusal to reinstate them. The Labor Arbiter issued a petitioner to reinstate the private respondents to their previous positions?
resolution finding that strained relationship existed between the employer and Private respondents are flight stewards of the petitioner. Both were
employees and resolved to grant respondents the sum of P27,300.00 each or a dismissed from the service. Aggrieved by said dismissal, private respondents
total of P573,300, in the concept of separation pay of P2,730.00 each per year of filed with the NLRC a petition for injunction praying that PAL be ordered to
service from February 1983 to June 1993 reinstate petitioners to their former positions pending the hearing of this case.
Issue: Petitioners contend that the monetary aspect of the judgment dated Injunction was granted by the NLRC.
January 11, 1985 has been satisfied and the Labor Arbiters authority to enforce Hence, the present recourse.
judgment is merely ministerial; hence, the Labor Arbiter cannot modify or vary
the final and executory decision of the NLRC. Held: In labor cases, Article 218 of the Labor Code empowers the NLRC
Held: The petition is meritorious. (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

Atty. Marlon Manuel
grave or irreparable damage to any party or render ineffectual any decision in Nieves Confesor assumed jurisdiction over the labor dispute and certified it for
favor of such party. compulsory arbitration. She enjoined the Union from striking and Philtread from
From the foregoing provisions of law, the power of the NLRC to issue an locking out members of the Union.
injunctive writ originates from any labor dispute upon application by a party. It On December 9, 1994, during the pendency of the labor dispute,
is an essential requirement that there must first be a labor dispute between the Philtread entered into a Memorandum of Agreement with Siam Tyre wherein
contending parties before the labor arbiter. In the present case, there is no labor Philtreads plant and equipment would be sold to a new company petitioner MSF
dispute between the petitioner and private respondents as there has yet been no Tire and Rubber, Inc., 80% of which would be owned by Siam Tyre and 20% by
complaint for illegal dismissal filed with the labor arbiter by the private Philtread, while the land on which the plant was located would be sold to another
respondents against the petitioner. company, 60% of which would be owned by Philtread and 40% by Siam Tyre.
The petition for injunction directly filed before the NLRC is in reality an This was done and the Union was informed of the purchase of the plant
action for illegal dismissal. This is clear from the allegations in the petition which by MSF. MSF then asked the Union to desist from picketing outside its plant and
prays for; reinstatement of private respondents; award of full backwages, moral to remove the banners, streamers, and tent which it had placed outside the plants
and exemplary damages; and attorneys fees. As such, the petition should have fence.
been filed with the labor arbiter who has the original and exclusive jurisdiction to As the Union refused MSFs request, a complaint for injunction with
hear and decide the case. damages was filed against the Union before the Regional Trial Court of Makati.
The jurisdiction conferred by the foregoing legal provision to the labor The Union moved to dismiss the complaint alleging lack of jurisdiction on the
arbiter is both original and exclusive, meaning, no other officer or tribunal can part of the trial court. It insisted that the parties were involved in a labor dispute
take cognizance of, hear and decide any of the cases therein enumerated. On the and that MSF, being a mere alter ego of Philtread, was not an innocent
other hand, the NLRC shall have exclusive appellate jurisdiction over all cases bystander.
decided by labor arbiters as provided in Article 217(b) of the Labor Code. In The motion to dismiss was denied and injunctive relief granted. The
short, the jurisdiction of the NLRC in illegal dismissal cases is appellate in nature Union filed a petition for certiorari and prohibition before the Court of Appeals.
and, therefore, it cannot entertain the private respondents petition for injunction The appellate court rendered a decision granting the Unions petition and
which challenges the dismissal orders of petitioner. Article 218(e) of the Labor ordering the trial court to dismiss the civil case for lack of jurisdiction. Hence,
Code does not provide blanket authority to the NLRC or any of its divisions to this petition for review.
issue writs of injunction, considering that Section 1 of Rule XI of the New Rules
of Procedure of the NLRC makes injunction only an ancillary remedy in ordinary Issue: Petitioner asserts that its status as an innocent bystander with respect to
labor disputes. Thus, the NLRC exceeded its jurisdiction when it issued the the labor dispute between Philtread and the Union entitles it to a writ of
assailed Order granting private respondents petition for injunction and ordering injunction from the civil courts and that the appellate court erred in not upholding
the petitioner to reinstate private respondents. its corporate personality as independent of Philtreads.
Held: The innocent bystander rule is as follows:
MSF vs. CA, 311 SCRA 785 The right to picket as a means of communicating the facts of a labor
A labor dispute arose between Philtread and its Union, as a result of which dispute is a phase of the freedom of speech guaranteed by the constitution. The
picketing was done outside the gate of Philtreads plant. Secretary of Labor

Atty. Marlon Manuel
right is, however, not an absolute one. While peaceful picketing is entitled to Deltaventures vs. Cabato, 327 SCRA 521
protection as an exercise of free speech, we believe the courts are not without A decision was rendered by Executive Labor Arbiter declaring the respondents
power to confine or localize the sphere. guilty of Illegal Dismissal and Unfair Labor Practice and ordering them to pay
Thus the right may be regulated at the instance of third parties or the complainants. The Sheriff proceeded to enforce the writ by levying upon a
innocent bystanders if it appears that the inevitable result of its exercise is to real property, registered in the name of Roberto Ongpin. A month before the
create an impression that a labor dispute with which they have no connection or scheduled auction sale of the real property, herein petitioner filed before the
interest exists between them and the picketing union or constitute an invasion of Commission a third-party claim asserting ownership over the property. Petitioner
their rights. Thus, an innocent bystander, who seeks to enjoin a labor strike, then filed with the Regional Trial Court of La Trinidad, Benguet a complaint for
must satisfy the court that aside from the grounds specified in Rule 58 of the injunction and damages. Respondent Judge eventually dismissed the complaint.
Rules of Court, it is entirely different from, without any connection whatsoever Issue: The core issue is whether or not the trial court may take cognizance of the
to, either party to the dispute and, therefore, its interests are totally foreign to the complaint filed by petitioner and consequently provide the injunctive relief
context thereof. sought.
In the case at bar, petitioner cannot be said not to have such connection Held: Petitioner filed the third-party claim before the court a quo by reason of a
to the dispute. As correctly observed by the appellate court: writ of execution against a property to which it claims ownership. Ostensibly the
Coming now to the case before us, we find that the negotiation, contract complaint before the trial court was for the recovery of possession and
of sale, and the post transaction between Philtread, as vendor, and Siam Tyre, as injunction, but in essence it was an action challenging the legality or propriety of
vendee, reveals a legal relation between them which, in the interest of petitioner, the levy vis-a-vis the alias writ of execution, including the acts performed by the
we cannot ignore. To be sure, the transaction between Philtread and Siam Tyre, Labor Arbiter and the Deputy Sheriff implementing the writ. The complaint was
was not a simple sale whereby Philtread ceased to have any proprietary rights in effect a motion to quash the writ of execution of a decision rendered on a case
over its sold assets. On the contrary, Philtread remains as 20% owner of private properly within the jurisdiction of the Labor Arbiter, it is then logical to conclude
respondent and 60% owner of Sucat Land Corporation which was likewise that the subject matter of the third party claim is but an incident of the labor case,
incorporated in accordance with the terms of the Memorandum of Agreement a matter beyond the jurisdiction of regional trial courts.
with Siam Tyre, and which now owns the land were subject plant is located. This, Petitioner failed to realize that by filing its third-party claim with the
together with the fact that private respondent uses the same plant or factory; deputy sheriff, it submitted itself to the jurisdiction of the Commission acting
similar or substantially the same working conditions; same machinery, tools, and through the Labor Arbiter. It failed to perceive the fact that what it is really
equipment; and manufacture the same products as Philtread, lead us to safely controverting is the decision of the Labor Arbiter and not the act of the deputy
conclude that private respondents personality is so closely linked to Philtread as sheriff in executing said order issued as a consequence of said decision rendered.
to bar its entitlement to an injunctive writ. Stated differently, given its close links Petitioner should have filed its third-party claim before the Labor Arbiter,
with Philtread as to bar its entitlement to an injunctive writ. Stated differently, from whom the writ of execution originated, before instituting said civil case.
given its close links with Philtread, we find no clear and unmistakable right on
the part of private respondent to entitle it to the writ of preliminary injunction it
prayed for below. F. PRESCRIPTION

Atty. Marlon Manuel
reinstatement on May 2, 1980, and his demand was categorically rejected by the
Mendoza vs. NLRC, 287 SCRA 51 petitioner on May 10, 1980.
Petitioner was employed by respondent Baliwag Transit, Inc. as a passenger bus Applying the aforesaid ruling, petitioners cause of action accrued only
driver. The bus driven by petitioner was heavily damaged in an accident. in December 1986 when respondent Baliwag formally dismissed him from the
Petitioner was grounded and advised by respondent Baliwag to wait for the service.
result of the police investigation and the actions that might be taken by the
owners of the other vehicles. Petitioner patiently waited. Realizing that he has Thus, it is clear from the foregoing, that the action for illegal dismissal
waited too long, petitioner requested respondent Baliwag to reinstate him as he filed by petitioner had not yet prescribed.
needed money to support his family. But, private respondent formally informed
him to look for another job because the management has terminated his services Laureano vs. CA, 324 SCRA 414
on account of the May 20, 1983 vehicular accident. Petitioner filed a complaint Plaintiff Laureano was offered a contract of employment as an expatriate B-707.
against respondent Baliwag for illegal dismissal, damages and attorneys fees Sometime in 1982, defendant, hit by a recession, initiated cost-cutting
before the Arbitration Branch of the NLRC. measures. On October 5, 1982, defendant informed plaintiff of his termination
In answer, respondent Baliwag denied petitioners allegation contending effective November 1, 1982. Plaintiff filed the instant case for damages due to
that petitioner was not dismissed but abandoned his job after the incident of May illegal termination of contract of services before the court a quo.
30, 1983. Respondent likewise asserted that petitioners cause of action had long Defendant filed its answer reiterating the grounds relied upon in its
prescribed and that he is guilty of laches in not asserting his right sooner. motion to dismiss and further arguing that plaintiff is barred by laches, waiver,
Labor Arbiter rendered a decision in favor of respondent Baliwag. and estoppel from instituting the complaint and that he has no cause of action .
The trial court handed down its decision in favor of plaintiff. This was reversed
Held: The SC held that the private respondents right of action could not have by the CA saying that the period of 4 years has prescribed.
accrued from the mere fact of the occurrence of the mishap on August 10, 1974,
as he was not considered automatically dismissed on that date. At best, he was Issue: Petitioner raises the issue of whether his action is one based on Article
deemed suspended from his work. Hence, there existed no justification at that 1144 or on Article 1146 of the Civil Code. According to him, his termination of
time for private respondent to demand reinstatement and no opportunity warrant employment effective November 1, 1982, was based on an employment contract
either for the petitioner to reject that demand. which is under Article 1144, so his action should prescribe in 10 years as
provided for in said article. Thus he claims the ruling of the appellate court based
The Court agrees with the private respondent that May 10, 1980, is the on Article 1146 where prescription is only four (4) years, is an error.
date when his cause of action accrued, for it was then that the petitioner denied
his demand for reinstatement and so committed the act of omission constituting Held: The SC however stated that neither Article 1144 nor Article 1146 of the
a breach of the obligation of the defendant to the plaintiff. The earlier requests Civil Code is here pertinent. What is applicable is Article 291 of the Labor Code,
made by him having been warded off with indefinite promises, and the private viz:
respondent not yet having decided to assert his right, his cause of action could ARTICLE 291. Money claims. All money claims arising from
not be said to have then already accrued. The issues had not yet been joined, so to employee-employer relations accruing during the effectivity of this Code shall be
speak. This happened only when the private respondent finally demanded his

Atty. Marlon Manuel
filed within three (3) years from the time the cause of action accrued; otherwise On appeal, this order was affirmed in toto by public respondent NLRC.
they shall be forever barred. On March 11, 1989, almost nine years later, the petitioner filed a motion for the
What rules on prescription should apply in cases like this one has long been issuance of a writ of execution of the decision. The motion was granted by the
decided by this Court. In illegal dismissal, it is settled, that the ten-year executive labor arbiter. However, the NLRC sustained the appeal of the CDCP
prescriptive period fixed in Article 1144 of the Civil Code may not be invoked by holding that the motion for execution was time-barred, having been filed beyond
petitioners, for the Civil Code is a law of general application, while the the five-year period prescribed by both the Rules of Court and the Labor Code.
prescriptive period fixed in Article 292 of the Labor Code [now Article 291] is a The petitioner contends that this decision is tainted with grave abuse of discretion
SPECIAL LAW applicable to claims arising from employee-employer relations. and asks for its reversal.
It should be noted further that Article 291 of the Labor Code is a special law Held: The original decision called for her reinstatement within ten days from
applicable to money claims arising from employer-employee relations; thus it receipt thereof following its affirmance by the NLRC on August 29, 1980, but
necessarily prevails over Article 1144 of the Civil Code, a general law. Hence the there is no evidence that she demanded her reinstatement or that she complained
cause of action has prescribed. when her demand was rejected. What appears is that she entered into a
Petitioner also claims that the running of the prescriptive period was tolled compromise agreement with CDCP where she waived her right to reinstatement
when he filed his complaint for illegal dismissal before the Labor Arbiter of the and received from the CDCP the sum of P14,000.00 representing her back wages
National Labor Relations Commission. However, this claim deserves scant from the date of her dismissal to the date of the agreement. Dismissing the
consideration; it has no legal leg to stand on. In Olympia International, Inc. vs. compromise agreement, the petitioner now claims she was actually reinstated
Court of Appeals, it was held that although the commencement of a civil action only on March 16, 1987, and so should be granted back pay for the period
stops the running of the statute of prescription or limitations, its dismissal or beginning November 28, 1978, date of her dismissal, until the date of her
voluntary abandonment by plaintiff leaves the parties in exactly the same reinstatement. She conveniently omits to mention several significant
position as though no action had been commenced at all. developments that transpired during and after this period that seriously cast doubt
on her candor and bona fides.
G. QUITCLAIMS; COMPROMISE AGREEMENTS Not all waivers and quitclaims are invalid as against public policy. If the
agreement was voluntarily entered into and represents a reasonable settlement, it
Periquet vs. NLRC, 186 SCRA 724 is binding on the parties and may not later be disowned simply because of a
The petitioner was dismissed as toll collector by the Construction Development change of mind. It is only where there is clear proof that the waiver was wangled
Corporation of the Philippines, private respondent herein, for willful breach of from an unsuspecting or gullible person, or the terms of settlement are
trust and unauthorized possession of accountable toll tickets allegedly found in unconscionable on its face, that the law will step in to annul the questionable
her purse during a surprise inspection. Claiming she had been framed, she filed transaction, But where it is shown that the person making the waiver did so
a complaint for illegal dismissal and was sustained by the labor arbiter, who voluntarily, with full understanding of what he was doing, and the consideration
ordered her reinstatement within ten days without loss of seniority rights and for the quitclaim is credible and reasonable, the transaction must be recognized
other privileges and with full back wages to be computed from the date of her as a valid and binding undertaking. As in this case.
actual dismissal up to date of her actual reinstatement.

Atty. Marlon Manuel
Anino vs. NLRC, 290 SCRA 489 to dismiss all officers of the union and members who participated in the
Complainants allege that they are employees of respondent Hinatuan Mining commission of illegal acts; to pay petitioner actual, moral and exemplary
Corporation (HMC) holding supervisory positions. Sometime in September 1993, damages, plus attorneys fees. After KMUs Atty. Pontenciano Flores was
complainants planned the formation of a supervisors union with HMC. retained as counsel by the union and strikers, and sensing the gravity of the
On or about 03 November 1993, HIMSU formally notified the company penalties attendant to the strike resorted to, including the financial award that
of its legal existence through a letter addressed to SALVADOR B. ZAMORA III, may be due the Golden Donuts, Inc. and civil liabilities that may be awarded
President of respondent HMC. It formally informed the company of its desire for thereafter, said counsel pleaded for a compromise. Hence, on July 16, 1990, a
a collective bargaining agreement and submitted its proposals. compromise agreement was entered into by the KMDD-CFW and Golden
Donuts, Inc.
The company, complainant claims, completely ignored the unions
proposals and did not answer HIMSU about it, which constrained the union to Out of the said 262 striking force, only the complainants disagree and did not
file an unfair labor practice case against HMC on 13 May 1994. In order to receive the amount due, arguing that the compromise agreement was entered into
weaken and if possible destroy the union, respondents, in the guise of by their counsel and the President of the Union without their individual consent
retrenchment, dismissed the complainants who are the active leaders of the and/or authority and that the same was not approved nor ratified by the majority
union. of the union membership.
Issue: Whether or not the National Labor Relations Commission likewise On January 29, 1993, the Labor Arbiter rendered a decision upholding the
exceeded its jurisdiction in recognizing the waivers/quitclaims executed by dismissal of private respondents and ruling that they were bound by the
petitioners as an effective bar to this complaint compromise agreement entered into by the union with petitioners. On appeal, the
NLRC issued a resolution ordering respondent to reinstate complainants to their
Private respondents also insist that petitioners acceptance of separation former positions without loss of seniority rights and back-wages limited to three
benefits and execution of waivers and quitclaims negate their claim of illegal years from the time of their dismissal.
dismissal. The waivers and quitclaims allegedly constitute valid and binding
contracts between petitioners and respondent corporation. Issues: The questions presented in the petition are: (1) whether or not a union
may compromise or waive the rights to security of tenure and money claims of its
Held: The recognized and accepted doctrine is that a dismissed employee who minority members, without the latters consent, and (2) whether or not the
has accepted separation pay is not necessarily estopped from challenging the compromise agreement entered into by the union with petitioner company, which
validity of his or her dismissal. Neither does it relieve the employer of legal has not been consented to nor ratified by respondents minority members has the
obligations. effect of res judicata upon them.
Waivers and quitclaims, on the other hand, are generally looked upon As a consequence of a negative ruling on the foregoing issues, there arises
with disfavor. the issue of whether private respondents are entitled to monetary benefits subject
of their individual complaints.
Golden Donuts vs. NLRC, 322 SCRA 294:
Complainants were members of KMDD-CFW who staged a strike on November Held: The petition is without merit.
16, 1989. a Complaint with Prayer for Preliminary Injunction was filed by First, even if a clear majority of the union members agreed to a settlement with
Golden Donuts, Inc. on January 9, 1990, seeking to declare the strike illegal and the employer, the union has no authority to compromise the individual claims of

Atty. Marlon Manuel
members who did not consent to such settlement. Rule 138 Section 23 of the consent or forgery. A compromise is basically a contract perfected by mere
1964 Revised Rules of Court requires a special authority before an attorney may consent. Consent is manifested by the meeting of the offer and the acceptance
compromise his clients litigation. The authority to compromise cannot lightly upon the thing and the cause which are to constitute the contract. A compromise
be presumed and should be duly established by evidence. agreement is not valid when a party in the case has not signed the same or when
In the case at bar, minority union members did not authorize the union to someone signs for and in behalf of such party without authority to do so.
compromise their individual claims. Absent a showing of the unions special Viewed in light of the foregoing legal principles, the conclusion is
authority to compromise the individual claims of private respondents for inescapable that private respondents are not bound by the compromise agreement
reinstatement and back wages, there is no valid waiver of the aforesaid rights. As entered into by the union without their consent. They have not waived their right
private respondents did not authorize the union to represent them in the to security of tenure nor can they be barred from entitlement of their individual
compromise settlement, they are not bound by the terms thereof. claims.
Second, money claims due to laborers cannot be the object of settlement Since the Labor Arbiter found no evidence showing that private
or compromise effected by a union or counsel without the specific individual respondents committed any illegal act during the strike, petitioners failure to
consent of each laborer concerned. The beneficiaries are the individual reinstate them after the settlement of the strike amounts to illegal dismissal,
complainants themselves. The union to which they belong can only assist them entitling them to the twin reliefs of reinstatement and back wages.
but cannot decide for them. The waiver of money claims, which in this case were
accrued money claims, by workers and employees must be regarded as a personal PCEA vs PCMC, 340 SCRA 383
right, that is, a right that must be personally exercised. For a waiver thereof to be The Union is the certified sole and exclusive collective bargaining agent of all
legally effective, the individual consent or ratification of the workers or rank and file employees in Philippine Carpet Manufacturing Corporation.
employees involved must be shown. Neither the officers nor the majority or the Jonathan Barquin is a union member who was hired by the company as casual
union had any authority to waive the accrued rights pertaining to the dissenting worker
minority members, even under a collective bargaining agreement which provided By virtue of Wage order No. 4 and 4-A the Union demanded an across-
for a union shop. the-board implementation, threatening legal action against the company in the
We have consistently ruled that a compromise is governed by the basic event that the said demand is denied. The Companys position is that the
principle that the obligations arising therefrom have the force of law between the employees are not covered by Wage order No. 4 and 4-A for the reason that
parties. nobody in the company is receiving a salary of P145.00 a day. In the meantime,
Consequently, private respondents may pursue their individual claims Jonathan Barquin received a notice dated March 14, 1996 from the company,
against petitioners before the Labor Arbiter. advising him that his services were to be terminated effective at the close of
working hours on April 13, 1996. In lieu of the 30-day notice requirement for his
The judgment of the Labor Arbiter based on the compromise agreement termination, he was placed on forced leave status effective March 15, 1996 but
in question does not have the effect of res judicata upon private respondents who was paid in full for the duration of the said leave. The company justified
did not agree thereto. Baquins separation from the service as a valid act of retrenchment. While the
A compromise, once approved by final orders of the court has the force Union averred that the separation is tantamount to illegal dismissal resorted to by
of res judicata between the parties and should not be disturbed except for vices of the company to avoid compliance with the provisions of Wage Order 4 and 4-A.

Atty. Marlon Manuel
Failing to resolve the issues in the mediation level, the parties agreed to issue, then the claim of employee may still be given due course. The law looks
submit the case for voluntary arbitration. On August 3, 1996, the voluntary with disfavor upon quitclaims and releases by employees pressured into signing
arbitrator ruled that Jonathan Barquin (BARQUIN) was hastily dismissed to the same by unscrupulous employers minded to evade legal responsibilities.
avoid compliance with Wage Order Nos. 4 and 4-A, but held that he is not In the present case, both the Court of Appeals and the voluntary
entitled to reinstatement because he received his separation pay and voluntarily arbitrator erred in concluding that BARQUIN voluntarily signed the Deed of
signed the Deed of Release and Quitclaim and acquiesced to his separation. The Release and Quitclaim. Records reveal that the respondent company informed
Court of Appeals on appeal affirmed the decision. BARQUIN that his services were being terminated on the ground of
Issue: The only issue posed now concerns the reinstatement of BARQUIN. In retrenchment as the company was constrained to reduce the number of its
essence, the petitioners maintain that since both the voluntary arbitrator and the personnel due to the tremendous drop of production output since about the last
Court of Appeals found that petitioner, BARQUIN, was illegally dismissed, he is quarter of 1994 up to the present. However, this claim was rejected by both the
entitled to reinstatement as a matter of right pursuant to Article 279 of the Labor voluntary arbitrator and the Court of Appeals, which ruled that the respondent
Code. Respondents, on the other hand, maintain that the consideration therein company failed to prove that it was suffering from actual poor financial condition
was a fair and full settlement of the amount legally due to BARQUIN who never and that it was doubtful if the retrenchment of one helper in the production
alleged that he was physically threatened or intimidated into signing the department earning P145.00 a day would avert losses of the company. Instead,
quitclaim. the voluntary arbitrator found that the respondent company had an ulterior
Held: The petition is meritorious. motive behind BARQUINs dismissal and that only he was singled out and
retrenched by the respondent company. The voluntary arbitrator went as far as
It is not disputed that the respondent company was guilty of illegal saying that BARQUINs hasty dismissal in the guise of retrenchment was a
dismissal in terminating BARQUINs employment. In holding that although feeble attempt at circumventing the law. 26 It was shown that BARQUIN was the
BARQUIN was illegally dismissed he was not entitled to reinstatement, both the only employee earning P145.00 a day and was qualified to receive the mandated
Court of Appeals and the voluntary arbitrator upheld the validity of the Deed of wage increase granted by Wage Order Nos. 4 and 4-A.
Release and Quitclaim that BARQUIN signed after concluding that he
voluntarily signed the same for the reason that the respondent company did not An increase in his salary would cause a wage distortion in the wage
coerce or intimidate him into signing and receiving his separation pay, and structure of the company, which would necessitate the adjustment of the wages of
consequently ruled that he waived his right to reinstatement. its other employees. 27 It is therefore reversible error to hold, despite such
findings, that BARQUIN voluntarily signed the quitclaim for the only logical
The SC said the validity of quitclaims executed by laborers has long been conclusion that can be drawn is that the respondent company feigned that it was
recognized in this jurisdiction. Not all waivers and quitclaims are invalid as suffering business losses in order to justify retrenchment and consequently enable
against public policy. If the agreement was voluntarily entered into and it to terminate the services of BARQUIN in order to prevent the wage distortion.
represents a reasonable settlement of the claims of the employee, it is binding on Respondent companys lack of candor and good faith in informing BARQUIN
the parties and may not later be disowned simply because of a change of mind. that he was being terminated due to a valid retrenchment and not because it
Such legitimate waivers resulting from voluntary settlements of laborers claims sought to avoid compliance with the mandated wage increases amounted to a
should be treated and upheld as the law between the parties. However, when as in deception which led BARQUIN to the mistaken belief that there was legal
this case, the voluntariness of the execution of the quitclaim or release is put into ground for retrenchment and prompted him to acquiesce to his termination and

Atty. Marlon Manuel
sign the quitclaim. Verily, had the respondent company not misled BARQUIN The most common mistake, and I see this year after year after year, is
into believing that there was a ground to retrench, it is not difficult to believe that they use the daily rate in computing the hourly overtime rate. It is totally
he would have thought twice before signing the quitclaim inasmuch there was no erroneous.
reason for the termination of his employment. Assuming you have 2 hours of overtime, you cannot use this daily rate,
Contrary to the assumption of both the Court of Appeals and the kasi kung meron kang ibang claim. The first thing that you should do is divide
voluntary arbitrator, the mere fact that BARQUIN was not physically coerced or the daily rate by 8, assuming 8 hours yung regular time nya. Youll get 40.
intimidated does not necessarily imply that he freely or voluntarily consented to Tama ba?
the terms of the quitclaim. Moreover, as correctly pointed out by the petitioners, One important tip in taking computation, always identify what you get
this Court has ruled in Salonga vs. National Labor Relations Commission 32 that after the formula, after the computation.
it is the employer (respondent company) and not BARQUIN who has the burden
of proving that the quitclaim was voluntarily entered into by him. 33 The Court b) Determine what rate should be applied
of Appeals therefore erred in ruling that the burden of proof to show that the deed So, for example, this. What is this P40? This is the hourly rate for work within 8
of Release and Quitclaim was signed and executed voluntarily was on hours, right? That the first thing you have. Now, you know that you have to
BARQUIN. compute the overtime pay for 2 hours of work. How would you do it? P40 per
hour multiplied by how much? It depends on the day, diba?
BARQUINs consent to the quitclaim cannot be deemed as being
voluntarily and freely given inasmuch as his consent was vitiated by mistake or There are 2 overtime rates. One is 25% (OT for ordinary day), the other
fraud, we have no recourse but to annul the same. is 30%.(for non-ordinary days)
So, before you even start computing overtime, determine first what rate
Lecture on Labor Standards and Dispute Settlement you are concerned with. If its a normal day, you can apply 25%. What you can
do is multiply immediately by 125%, thats one way, thats a short cut. Bakit
1. OVERTIME PAY shortcut? Because the product you have here is the total compensation for that
The most common is Overtime pay. The most common benefit on top pf the hour. Hindi lang yung overtime premium.
regular basic salary. What is overtime pay? What is it for? For work beyond 8 Ok, lets do it the long way. Sometimes the long way is also beneficial
hours. You have to be clear on that. Even if the normal hours of work is less because youre isolating the overtime premium. If youre asked for overtime
than 8 hours, anything beyond that regular hours of work but which is not pay, then you have to add the basic.
exceeding 8 hours of work per day is not overtime. Clear about that? P40 multiplied by 25%, thats 10. What is P10? Again, you have to
identify the product. What is that? Thats the overtime premium. Thats not the
a) Ascertain the hourly rate overtime pay ha. This is the overtime premium per hour. Overtime pay is the
Let us say that an employee had 10 hours of work in a particular day, that basic pay + overtime premium. So you have to add this to P40, so you have P50
means 8 regular plus 2 overtime equals overtime pay. For example, he earns - this is the hourly overtime pay. Hindi overtime premium ha, kundi overtime
P320/ day. pay, overtime pay. That incorporates the P40 per hour. Kung shinort cut natin,
kung P40 x 125%, doon din babagsak sa P50. Shinortcut ko lang,
mathematically, process lang yun. Nothing legal about this.

Atty. Marlon Manuel
What is the importance of determining whether a day is a holiday or an important

c) Multiply by the number of hours of overtime work special day? Holiday if unworked, you get the regular pay. So assuming, we are
Now, after getting this, what do you do? You multiply by the number of using this P320. For that unworked day, nasa bahay ka lang, natulog ka lang,
hours of overtime work. In this case, 2. What do we have? You have P100. This you still get the P320. But a special day, if unworked you get nothing. Kaya
is the total overtime pay for that particular day. For 2 hours of overtime work. noong panahon ni Presidente Ramos, ang lagi nyang excuse kapag may nagsasabi
na dapat may holiday ito para may long weekend for something, sinasabi ni
Be careful about the question you are answering. If the question asks for President Ramos, kawawa naman yung mga daily wage earners because daily
overtime pay, then just encircle and just write the overtime pay. Huwag ninyong wage earners do not earn anything. Kapag monthly ka kasi, hindi gaano material
idagdag kasi kapag idinagdag ninyo, kapag tinignan ng examiner . . . . assuming yung holidays dahil hindi naman mababago yung monthly pay mo, diba? Kahit
you have a simple computation . . . . lets say sa finals, kapag and hinahanap ko ilan pa yung holiday for that given month. Yung sweldo mo ng February which
ay overtime pay lang, kapag binigyan ninyo ako ng total compensation per day. has 28 days will be the same as your salary for January and March, diba? Kahit
Then I will simply check the figures against the correct answer then kapag mali magkaiba yung number of day. So, for monthly paid employees, wala ngang
yan, mali yan. Be careful about the question. If the question asks for overtime effect yan. May effect yan sa daily wage workers or sa weekly paid employees
pay, then you have to write this. If the question asks for total compensation for because unworked special day will not be compensated.
the day, then you add this to P320 then you get P420. Thats the total
compensation for 10 hours of work on an ordinary day. If the holiday is worked, that will be twice the regular wage. So, P320,
nagtrabaho ka, P640. Whats the rationale? Kung hindi ka nga nagtrabaho may
2. HOLIDAYS AND SPECIAL DAYS P320 ka na, e nagtrabaho ka, doble na. Ganoon kasimple lang yun. Kung
Assuming . . . . OK. Lagay natin sa holiday. Wala nang regular holiday natulog ka, sumweldo ka na, e bakit ka pa magtratrabaho? Kung pinagtrabaho ka
and special holiday. We only have holiday and special day. Yun lang yung 2 pa, dapat bayaran ka pa ulit of your pay for that day.
categories. Bakit parang nagulat kayo? Wala na yung distinction na regular Special day. Lets talk about that. Dapat ba twice? Hinde kasi special
holiday and special holiday, wala. What we have is holiday and special day. day lang yan. So apply the OT premium of 30% to the special day if workerd
Wala nang regular holiday, wala nang special holiday. We only have holidays only.
and special days. We have 10 holidays and we only have 2 special days. Plus the
non-annual special days. What do we mean by non-annual special days? overtime pay when worked on a holiday:
Elections, although walang nakalagay sa calendar natin this year, sa 2004. Hindi P640, how much is that in terms of hourly rate? P640 divided by 8 is
yan naka-kalendaryo, every year wala yan, pinapasok lang. Like the announced P80. If you multiply P80 by the overtime premium, not 25% because this is a
EDSA commemoration day. Hindi yan holiday, thats a special day. holiday. The overtime premium is 30% for a holiday. So, P80 by 30%, that
means youll get P24. What is P24? P24 is the overtime premium for work
You have to know the 10 holidays pero its easy if you know the 2, kasi worked beyond 8 hours on a holiday, in this case. So, to get the overtime pay per
what are the holidays that we know that fall under holidays? What are the 2 hour, you add this, so you have P104. What is that amount? P104 is overtime
special days? December 31 and November 1. Last days of the year and All pay, that is not overtime premium ha. Overtime pay for work performed beyond
Saints Day, yun lang. All other holidays that we know are properly called 8 hours on a holiday.
holidays, not special days.

Atty. Marlon Manuel
Ok . . . . you have 2 hours of overtime , , , , then you simply multiply If the holiday falls on your rest day, what will happen? Start with the
this by 2, and youll get P208. P208 is the total overtime pay for 2 hours of holiday pay. Maghoholiday pay ka muna. So, you have P640. The P640 and
overtime work on that holiday. And you add that to the holiday pay, to the multiply that by 30% or 130% to get the daily rate for work performed on a
compensation for work performed on a holiday of P640 to get the daily pay for holiday which happens to be your rest day.
that day. Any questions? If the holiday is January 1, nagkataon na ang January 1 falls on a
Thursdays and Thursday is your scheduled rest day, so again, similar to the
Q: Sir, P80 + P24 = P104 is overtime pay for work performed on a holiday. principle that we have applied with the overlapping of April 9 and Holy Thursday
Thats the hourly rate? or Good Friday, nag overlap yung dapat ay non-working days mo. Dapat
dalawang pahinga mo na yon, dapat may non-working day ka sa January 1 and
A: OO, kasi, hourly lang ang P80 e, diba? One hour lang yan e. 2 hours ang non-working day ka for Thursday, nagkataon nag overlap. So, what do you do?
overtime mo. P80 multiply that by 2. Kaya kailangan you have to identify. I Magooverlap din ang benefits. You compute the daily rate for the worked
receive answers in the examinations, nalilito sila. Minsan nalilimutan nila i- holiday first and then you compute the 30% rest day premium. Rest day
multiply by the number of hours of overtime work, kasi nga hindi mo . . . premium is computed on a daily basis, hindi hourly rest day premium yun. Hindi
nakakalimutan na kung ano na yung nakuha mo sa dami ng computation. Dapat ka nagcocompute ng hourly rest day premium pay. Any question about that? So
every step, once you get an amount, identify what that amount is. ganoon lang yun, magpapatong lang kayo. Unahin lang yung holiday and then
compute rest day premium.
In rare years, April 9 may fall on a Good Friday or a Holy Thursday. In
which case . . . the Department of Labor issued a circular . . . that will be Q: Sir, would it make a difference if the scheme of payment is monthly?
equivalent, if worked, that will be equivalent to 300%. Nagdoble and holiday.
Isang beses lang mangyayari yan, sa April 9 lang mangyayari yan. Imposibleng A; It will. Why? Because . . . ano ang . . . . mahihirapan if you have monthly
magdoble and pasko at bagong taon diba? Imposibleng mangyari yan sa June 12, pay? The difficulty is in determining the daily rate, diba? Pinag-aawayan. Kasi
Independence day and lets say, Rizal day. Imposible yan. Kaya lang nangyayari in this case, we earn a certain amount of daily rate. What if you are earning let us
yan kasi Holy Week is movable and April 9 is close to that period. Alam ninyo say P8574. Because of the formula . . . this is by month and this is gross. How
ba kung paano kumukuha ng holy week? Its dependent on the moon. Its not will you compute the daily rate? Kasi, walang problema kung regular na
decided by the Pope or the Church pero tinitignan yan sa . . . Im not sure about overtime, doon sa spread across the whole month kasi 24 and number of hours a
the cycle, but it has something to do with the lunar cycle, so movable yan. And day lang yan. E what if, on that particular month, isang araw ka lang
April 9 is masyadong close to that period. So, minsan nagpapatong ang April 9 nagovertime, 2 oras lang ang overtime mo. So, kailangan mong kunin ang daily
and either Holy Thursday or Good Friday, in which case you have 2 holidays rate diba? What will be your daily rate if you are given a monthly pay of P8574?
falling on the same day. Sabi ng Department of Labor, dahil dalawang holiday Dito pumapasok ang issue about the divisor. Saan mo ididivide yan? It depends
yan, if unworked, twice kaagad ang pay mo. Kapag nagtrabaho ka, e di thrice. on the company policy. Theres no formula. Theres no legal formula for
Logical. Bihirang-bihira lang mangyari yan. computation of the daily rate for monthly paid employees. The only requirement
is that the monthly pay if divided by the divisor to get the daily rate should not
work on a holiday falling on a rest day produce an amount lower than minimum wage.

Atty. Marlon Manuel
So, ano ang divisor mo? Pwedeng 30 days, in which case even unworked Q: Sir, iba pa ba yung computation kapag kinsenas?
days are paid. Ok lang yun. Or pwedeng bawasin yung unworked day. So, you A: Kapag kinsenas, thats monthly. You are being paid twice a month because
can have 24 days. So, nagiiba-iba yan. The most common formula is to multiply the law requires the employees be paid at least twice a month at intervals not
this by 12 and use the divisor: exceeding 15 days.
Monthly rate x 12 Q: Sir, so monthly paid yun?

Divisor A: Monthly paid
I dont think this will be asked in the bar examinations but just so youd Q: Sir, so again, of youre weekly paid, iba na naman siya?
know how to compute overtime pay for monthly paid employees. You apply the A: Mag-iiba na naman, kasi some weekly paid employees are paid according to
divisor which is used by the company, based on company policy. the number of days worked lang. So kapag nagabsent ka, tatlong araw ka lang
nagtrabaho for that week, kinocompute lang yung tatlong araw, similar to daily
Q: Will that divisor be the actual number of days worked by the employee? paid workers. Theoretically, its daily, at the end of the day babayaran ka na pero
A: Not necessarily because some companies are paying their employees even for iniipon lang, pero ang computation mo on a daily basis pa rin.
days that are not worked. In which case, the divisor may include unworked days.
Minimum daily wage is P250 but there is and additional COLA. The latest wage
Q: Sir, you said that the company can use any divisor . . . . . order provides for a COLA not for an increase in the minimum wage. Just to
A: Yes. make sure that by September youll know if a new wage order is issued, Ill just .
. . . Yes?
Q: . . . . .as long as when you divide the salary, you will come up with an amount
not less than the minimum wage. Sir, so they can circumvent the law and use, Q: (sorry inaudible ulit but Im assuming it is a question on a worked holiday
put there like 20? falling on a rest day with overtime based on Atty. Manuels answer)
A: Well, hindi naman. Of course the divisor . . . nag-iiba-iba yung divisor A: O, Holiday and rest day. Magkano and holiday pay niya? P640 diba?
because of the days you deduct. So hindi pwedeng magimbento ka. Nagiiba-iba Multiply by 30%. What do you get?
lang kasi yung iba and dinededuct lang lahat ng Sundays and holidays, yung iba
idinededuct pati Saturdays. Kaya depende nga on the company policy. Q: P832 for the day
Multiply it by 12 atsaka ka gagamit ng divisor na ginagamit ng company. And A: Times 130% na yan?
the divisor is sometimes determined by 365 days minus the holidays minus the Q: Yes, Sir.
special days minus the 52 Sundays. A: P832. So what is P832? This is your payment for the holiday which is also
your rest day. E may overtime ka ng 2 hours. Divide this by 8, diba? Kasi this
(question was asked but inaudible . . . ) is the daily rate. Always divide by 8. Always get the hourly rate in computing
A: No because you are computing the daily rate, iba ang usapan kapag 13 th for overtime. Divide this by 8 so you will get how much? P104. What is P104?
month This is your hourly rate for work performed on a holiday which is also a rest day.
So wala pang overtime. Magcompute ka ngayon. Times overtime premium,

Atty. Marlon Manuel
which is 30%. P104 multiplied by 30% is P31.20. What is P31.20? This is A: Assuming wala pang overtime. The question is, how much will an employee
overtime premium for work performed on a holiday which is also a rest day. earn for work performed on a special day which happens to be an employees
Palaging ganoon para di ka magkakamali ng add. You add the P31.20 to the scheduled rest day. Its 150%. Huwag kayo malilito so 150%, 130%, 125%. Is
P104, so what do you get? You get P135.20. What is P135.20? This is overtime it simply a shortcut. Ang overtime pay kasi is 25% , diba? Ginagawa mo yang by
pay for work performed on a holiday which is also a rest day. Per hour, hourly 125%. Automatically idinadagdag mo na yung base. Shinortcut mo lang yung
rate. How many hours of overtime do we have? 2. Multiply it by 2 and you get procedure, hindi yon magic. HIndii yon mathematical magic. Shinortcut ko
the total pay for 2 hours of overtime for work performed on a holiday which is lang kasi anyway idinadagdag mo din siya sa base pay. 125% or 130%
also a rest day. Just add this to P832 and then youll get the daily rate, the daily
pay Q: Sir, if you work and its your rest day and special day, time 30% diba? What
if its a special day plus holiday tapos rest day mo pa?
Q: Sir, hindi ba pwedeng gawin ng employer na 10 hours regular working day A; That will only happen . . . dalawang holiday yan kapag April 9. April 9 is a
instead? holiday. Kapag sinabi mong special day . . . . . . . . . .kasi ang special day dalawa
A: No, yung regular working day mo is 10 hours, ibig sabihin, everyday may 2 lang, December 31 and November1, diba? Hindi yan papatong sa holiday, on a
hours kang overtime normal year . . . . . Election mo ay tumapat ng holiday, then cumulative yan, you
compute. Multiply it by 2, assuming this rate, multiply it by 30% for the rest day
Q: Sir, paano kung P400 per day pero 10 hours a day premium, then you get the computation for the day
A: Thats difficult kasi thats a lump sum Again, the question is, special day ay tumapat sa holiday, magyayari lang to,
(theres a discussion that was inaudible) again, for declared special days, hindi yung November 1 or December 31 kasi
A: If that is the case and I were acting as counsel for the worker, Id say, that is walang kalapit yung November 1 and December 31 na magoovrelap na holiday.
my daily rate and my daily rate for regular hours of work is 8 hours, wala pang Ok, nagdeclare si President Macapagal-Arroyo ng holiday to celebrate something
overtime yan. Kapag nag-away kayo . . . the ambiguity is caused by the and that happens to be a holiday which is also absurd because why would you
employer and that would be interpreted against him. That should be the pay for declare a special day on a day which is also a holiday. But assuming that
normal hours of work happens, assuming ang election ay fixed by law, and election is a holiday. The
Before I proceed, please take note of Art 93 subpar c: work performed on computation, if it is worked, compute the 1st 8 hours for the holiday then account
any special day shall be paid an additional compensation of at least 30% of the for the rest day premium, multiply that 200%. After multiplying it by 2, that will
regular wage of the employee. Special holidays should be read as special day, be your base for computing the 30% special day premium. Kapag nabuo mo na
marami nalilito dyan. Where such holiday, meaning special day, 2 nd day. Where yung special day and rest day, may 50% na idadagdag mo
such holiday falls on an employees scheduled rest day, he shall be entitled to an
additional compensation of at least 50% of the regular wage. So rest day = Basta its a step by step process, dagdag lang kayo ng dagdag
special day. Kapag special day kasi, plus 30% ka, diba? Kapag rest day, plus May base pay ka, holiday times 2, rest day times 30 pa ulit, overtime kung ano
30% din. Pero kapag combined sila, ginagawang 50%. Special day + rest day = yung holiday rate mo multiply by 30%. May night shift differential, times 10%
plus 50%. Hindi 30%-30%, plus 50%. Pero kapag holiday, compute the holiday only for the period covered
pay first than you apply the overtime rate for the special day I-compartmentalize ninyo. Nagtrabaho ka ng ordinary day, 100% ang
(Inaudible question asked by student) kita mo. Nagtrabaho ka ng holiday, 200% ang kita mo. Nagtrabaho ka ng

Atty. Marlon Manuel
holiday which is also your rest day, 230% ang kita mo. Dagdag lang ng dagdag (inaudible question)
ng premium. So, ordinary day, idinagdag mo yung holiday rate, idinagdag mo A; Hindi, hindi mo na idagdag tong P320. Sa principal sya idadagdag. This
yung rest day rate, or dinagdag mo yung special day rate, kinompute mo yung accounts for the first 8 hours. Kapag dinagdag mo yan dito tapos dinagdag mo
overtime and then yung night shift differential ulit, parang holiday na yon, doble na. P320 is for the first 8 hours, kita mo ng 9
to 10 ay P50, kita mo ng 10-11 ay P55. So P320 + 50 + 55. Remember, 50 is
(inaudible question asked) overtime pay not just overtime premium, kasi overtime premium mo dito is P10
A: Yes, idadagdag. The 30% will be applied to your base pay. And the base pay lang. . . . Yes?
for a holiday, assuming it is worked, is 200%. So if the holiday is a rest day, the
30% should be applied to the 200% na. Hindi mo uunahin yung 30% saka mo Q: Sir, in that case, yung order you follow the . . . . . statement, it will
imumultiply by 2, hinde become . . . .P105 is your total overtime pay with night shift differential?
A: Thats correct. Overtime pay with night shift differential. Pero thats not
Q: Sir, paano kung nag-overtime tapos inabot hanggang 10:00, yung 25% pay accurate, that might give the impression that the overtime period is covered by
tapos yung night shift differential . . . . night shift which is not true. Only half of the overtime period is covered by the
A : 35% ordinarily yun night shift provision
Q: What if the EE worked until 1 am and the next day is April 9?

3. NIGHT SHIFT DIFFERENTIAL A: O, thats a complication, and thats often asked in my classes. What will
Night Shift Differential may complicate the computation. Why? Because happen? I think that in the computation of overtime pay, you use the work day.
the overtime pay will now be computed in phases. So, pwede kang magkaroon What do I mean by that? The employer cannot say hindi ka overtime kasi once
ng overtime work from 8 hours from 8 pm until 7 am the following day. In lumampas na tayo ng 12, you are starting a new day. No, as long as there is a
which case, iba yung computation mo from 8 to 10, iba yung computation mo continuity of work. Nagsimula ka ng 8 am of one day, ang end of your work day
from 10 to 6, iba yung computation mo from 6 to 7. chop chop mo is 7:59am of the following day. So, anything rendered within that period is
Balik tayo sa P320 ha. Assuming itong 2 hours of work, and schedule ng rendered within one day. And if that exceeds 8 hours of work within that 24 hour
employee natapos yung 8 hours nya at 9 pm. 9pm natapos and kayang 8 hours, work day, that should be considered overtime pay, Kahit na lumampas na siya ng
Ok? araw na calendar day. However, for holidays, I think it is more beneficial for the
So the P320, the employee earned that by 9 pm. Nagtrabaho pa siya until 11 pm. employee to consider the holiday pay starting 12mn specially if its Christmas or
2 hours of overtime. Magiiba na yung computation natin. Bakit? Kasi from New Year when you have to be at home by 12 midnight diba? But theres no
9pm until 10 pm, you compute . . . ano ba yung hourly rate? . . . hourly rate is legal provision applying to that special case.
P40 per hour, multiply by 25%. So P10 + P40 = P50 per hour and since 1 hour
lang yan, yung kinita niya plus P50 lang. So, magkano yung kinita niya by Q: Sir, so in that case, sir, we are not sure of which base to use?
10pm? P320 + P50. Now, 10 pm to 11 pm, meron na naman siyang overtime. A: Yes, thats the confusion e, Will you use the base pay for April 8 or the base
So, ito na yung gagamitin mo. P50 na overtime base pay niya + 10% lang, what pay for April 9. April 9, holiday yun diba? So, sasabihin mo holiday na yan, e di
will you have? P320 + 50 + 55. So if you will now have a difference of P5 for holiday pay na yan. Holiday rate na Yan
9-10 overtime and for 10-11 overtime because of 10% night shift

Atty. Marlon Manuel
Q: Sir so, you can decide in favor of labor Any questions on the computation? Somebody was asking about wage
A: In that case, I think it can be argued that way distortions. Well discuss this mamaya, kapag bumalik na yung nagtanong.
Theres a question about offsetting, I will discuss this later. Any other question?
Q: Sir, going to the other side, in fact an employee worked on April 9 up to 12
midnight upto the next day which it not a holiday . . . Q: Sir not related to computation, sir for example, Im a front desk in a hotel
Q: Then you do not use the ___?___computation for the worked performed on natapos yung shift ko 2-10, tapos 10 hindi pa dumating yung kapalit ko, can I
April 10 because April 10 is not a holiday. Kaya complicated yan. That can only refuse to extend?
happen if the company is operating 24 hours a day like hotels for example. But A: As a general rule, overtime work cannot be compelled. Overtime is not
for ordinary factories working under normal circumstances, the work day will fall allowed. If you follow the law, it will only be allowed in exceptional
under, within the calendar day. circumstances
Q: Sir, what about if there are shifts and there is a change in shifting? For Q: Sir, can you consider that as an exceptional circumstance, hindi dumating
example sir, your ordinary day, your first shift is from 8 to 2. From 8 to 4, and yung kapalit mo?
then your supposed to go back, ordinarily youre supposed to go back the next A: if it will have an effect on , , , , may requirement yon diba? , , , Pwede siyang
day pa. Pero sir for that . . . inabutan ka ng change ng shift so instead of 8 ka the . . . . ano yan gas station?
next day mag-show up for work, you showed up at 2 am, so 2 to 8. Sir so what
happens there? Its within the work day. Q: Hotel
A: Yung natapos by 4? Natapos ka by 4, nagreport ka ng 2:00. are you saying A; Hotel. I dont think it may qualify. But in most cases, hindi naman ganoon
that will be considered overtime? Kasi yung shift mo nag-start ng 8 e so kalaking violation if it can be considered a violation
matatapos yung work day mo at 8 am of the following day. So pag nagtrabaho
ka na kaagad at 2 am, I will say that is overtime 4. WAGE DISTORTION
Q: Sir what about . . . . I dont understand wage distortion
Q: Sir, pwede bang sabihin naputol yung schedule. Yung work day mo . . . . A: Ok, Thats important, you have to understand that.
(blah blah) You have employees A, B and C. Employee A is earning P300, employee B is
A: I think you can argue it that way, pwede yung . Pero halimbawa, may earning P400, employee C is earning P500 per day. Bakit iba-iba ang sweldo
emergency lang, pinatrabaho ka pa, dahil wala yung ka-shift mo, wala yung nila? Kasi si A, 1 year pa lang, si B 3 years, si C ay 5 years na. So the wage gap
kapalit mo, I think that should be counted as overtime pay. Because the idea is between them is accounted for by the gap in their years of service. Between A
for work performed beyond 8 hours a day to be compensated with a premium and B, ano ang difference mo? P100. That P100 is supposed to account for the 2
because it deprives you of the rest that you should have after working for 8 hours. years experience by B ahead of A. Kaya magkaiba. Between B & C, you have a
If that is the rationale, then it should follow that work within the 24 hour work difference of P100 to account for the 2 years difference, It may be dependent on
day should be considered overtime. the job and pay scale of the company, assuming they have that.
Any questions on the computation? Basta do it step by step and you will not have Wage distortion as defined by law will only happen if there is a wage order
a hard time. Konting practice lang yan. AS long as you know the rates increasing the minimum wage. And it will not happen if the wage order is
I will no longer discuss the meal periods no, you can just . . . . . . . . applied across the board. Lets give an example

Atty. Marlon Manuel
A new wage order, Wage Order No. 1 is issued . . . ok, remember, take not of the Bakit na-distort? Kasi nawala na yung pagitan nila which accounts for the years
gap. The gap here is P100, the gap here is P100. Wage Order No. 1 by the of service. Nabali wala na yung experience ni B at yung experience ni C which
Regional Wage Board giving across the board increases of P50 a day to was previously accounted for by the difference in their salary rates. Because of
employees covered. So this means A, B & C are covered by the wage order. the wage order, nasira lahat yun, nadistort. Thats why you have a wage
What will happen? Si A ay P350, si B ay P450, si C ay P550. na-maintain yung distortion. Should that distortion be corrected? Yes, It there a way to correct it?
gap na P100? Yes. Theres still wage distortion, walang problem dyan. The law will not give us any formula. It is supposed to be negotiated by the
parties. Yun nga yung magulo sa batas e. Guguluhin mo yung distortion tapos
Unfortunately, most wage orders that will be issued now, will not be across the bahala na yung parties to decide. In most cases this becomes the start of major
board increases but will increase the minimum wage rate. Assuming the disputes which may in some cases may end up in strikes. Malinaw na ba yun?
minimum wage rate at the time Wage Order No. 2 is issued is P350 per day. In May wage distortion dyan.
the region where A, B & C are working, A, B & C are employees of the same
company ha, employees of the same company. Ang sabi ng wage order, Q: Sir, if theres a wage distortion, the law requires that you do something about
minimum wage is now increased from P350 to P500. Generous, P150 ang it, it just doesnt give you the outlet right?
increase assuming. Ganyan ang ginawa nila. So what will happen? Is As salary A: The law says you have to negotiate for it. For the correction
below the minimum wage rate? Yes, As salary is P350. The new minimum wage
rate is P500. P350 is lower than P500, diba? Mag-iincrease ka from P350 to Q: Sir, kasi yung wage order regional? So sir, for example, theres a bank and it
500 so apektado ba si A? Yes. Should As salary be increased? yes. Automatic has different branches and in one particular region nagkaroon ng wage order so
yan. A will now be increased to 500. Si B? Is this salary below the minimum increase yung salary nila doon. For the same position . . .
wage rate? No . A: The same employer for the same position, will have different rates. Thats
But the wage order affects A, B and Cs salary scale. Before P100 and OK, according to the Court, theres no wage distortion intra-region
difference ni A and B. Bakit P100? Kasi mas matagal si B kay A. Ngayon
pantay na sila, thats not fair for B na pareho sila ng sweldo. So theres a wage Q: So, sir, theres no compulsion to compel . . . .
distortion in this case, the wage gap of 100 is totally eliminated. The wage gap is A: Theres nothing to correct because there is no distortion in the first place.
totally eliminated. There is no distortion as defined by law. The distortion may be internal to the
Between B and C what happened? The wage gap is reduced by half. I company. So halimbawa, may Coca-Cola driver, assuming the drivers are regular
would say that this is a wage distortion. Ill argue that this Is a substantial employees of Coca-Cola. May planta ang Coca-Cola sa Valenzuela, Valenzuela
reduction, a severe contraction of the wage gap. If its at least 50%. Theres no is part of the NCR. May planta ang Coca-Cola sa Meycauayan. Meycauayan is
clear rule about that. In fact, I would say, that if it is at least 50% then it is a part of Region 3. Magkaiba ang wage orders, magkaiba and regional wage
severe contraction of the wage gap. Is there a wage distortion here? Yes, theres a boards nyan. Magkaiba and rate. Yung driver na naka-assign sa Valenzuela may
wage distortion here because theres an elimination of the wage gap and theres a be earning higher than the driver who is assigned to Maycauayan plant. Kahit
wage distortion here because assuming this will be upheld later as the rule, at pareho ang seniority level nila, magkaiba yung sweldo nila. Is that distortion
least 50% of the wage gap is eliminated. Severe contraction, elimination. There under the law? No because distortion can only happen within a particular region.
is a wage distortion here. Hindi ka pwede magcompare ng wages ng 2 employees even if they are
employed by the same employer if they are assigned to different regions because

Atty. Marlon Manuel
they are covered by different wage orders and that is precisely the rule for the undertime. So hindi ka na namin babayaran, quits na lang tayo. Thats not
regionalization of the determination of the minimum wage. To account for the allowed. Thats prohibited. Why is that prohibited? In effect if you will deduct
regional differences, but it may be absurd na kapitbahay mo lang, Valenzuela from the employee the equivalent of 1 hour here, the employee will still get
and Meycauayan, sabihin mo na 5 minutes away nandun ka na and yet youre something because this is paid with a premium, so this cannot be offset with this
earning differently. But if that will happen, thats not a wage distortion according one.
to the court. The off-setting will not apply here because in the first place, you do not
Again, wage distortion as defined by law will only happen if theres a have an undertime here. You do not have an overtime. You have a _____?_____
wage order. So, a wage order triggers the distortion. that was compensated. Hindi yun mag-aapply dito. Theres no undertime here.
Assuming the negotiation did not produce settlement. What is the logical Theres no overtime. Ang undertime you performed, you worked for less than
next step? Assuming theres a CBA. No, its not a strikeable issue, its a your regular number of hours.
grievance. Its supposed to be a grievance to be resolved through a grievance
machinery in the CBA and if it is not resolved by monetary computation Q: (inaudible)
Kaya everytime na mag-iissue ng wage order, pinapadami lang ng gobyerno and A: Ok, forget about this, set this aside. Your regular work is from 8 am, your
labor disputes dahil pinapag-away nila ang mga tao regular work is from 10 am to 12 noon, 1 hour lunch break, tapos 1 pm ka ulit
mag-resume and you will work until 4 pm. You have 2 hours here in the morning
5. OVERTIME AND UNDERTIME WORK and 3 hours here in the afternoon, For a total of 5 hours. 5 hours ang normal
Lets go back to overtime. There was one question about overtime which hours of work. Ok lang ba yun? Yes because under the law, normal or regular
I think should be discussed hours or work shall not exceed 8 hours per day, hindi sinabi na should be
Example, and pasok mo ay 8 am until 12 noon,1 hour lunch break, lunch, equivalent to 8 hours per day.
again, until 1 pm, so naka ilang oras yun? 4. Diretso ka hanggang 5 pm. Ito What is the effect of this? Kapag nagtrabaho ka beyond 4:00, nagtrabaho
yung normal working schedule mo, 8 hours a day. Bawas yung 1 hour, so 1 hour, ka until 7pm, you exceeded your regular work schedule, but did you perform
bawas yan. 4 hours in the morning, 4 hours in the evening or in the afternoon, overtime work? Of course not. No because overtime work should be anything in
Late ka na dumating . . . eto yung weekly schedule mo Monday dumating ka excess of 8 hours. Ilang oras yun? 5 hours + 3 hours, 8 hours , walang overtime
ng 9am, Nahiya ka ngayon, late ako dumating, magtatrabaho ako until 6 pm. Should you be compensated for the 3 hours? Yes, but not as overtime pay. That
Did you perform overtime work? No, 8 hours pa din. Overtime work is not is something that you should discuss and negotiate with your employer. 5 hours
computed on the number of hours that exceeds your work schedule. It is based, it lang ako dapat, e lagi akong nag-eexceed ng hours, but that is not the statutory
is determined by the number of hours that exceed 8 hours in your work day. overtime work. Its compensable by the statutory overtime pay. In short, you
Halimbawa, Tuesday late na naman siya, 9am. Sabi niya, hindi naman will not apply the 25% or 30% overtime rate.
ako babayaran ng overtime, bakit mag-overtime ako? So kakapalan ko na lang
mukha ko, uwi na lang ako ng 5pm, hindi na mahahalata yun, 1 hour. Q: Sir, yung example na 5 hours, payable ng 320
Wednesday, pumasok siya ng maaga, marami siyang ginawa, nag-end sya ng A: 5 hours, 320
6pm. May overtime work ba? Yes, from 5 to 6, thats 1 hour overtime work.
Noong bayaran na, hindi siya binayaran ng overtime pay, sabi ng Q: yung 3 hours, divide mo ng 5 yung 320 times 3
employer, e kulang ka naman ng 1 hour dito e noong Tuesday. 1 hour yang

Atty. Marlon Manuel
A: But that is not statutory. You dont have any statutory basis for an automatic counsel for the employer, 1 hour, magkano ba ang madededuct mo dyan? Konti
computation for the hourly rate for the 3 hours. So you have to discuss that with lang yan, that would not matter, kung siya i-sanction mo, verbal reprimand,
you employer, but thats a reasonable basis for computing your compensation. warning, written reprimand, 1 day suspension, then 5 days suspension then
Compute your hourly basis then multiply it by 3. But what Im saying is that it is possibly 15 days suspension. Tapos naka-establish ka ng pattern, that can be
not overtime and that is not overtime pay gross and habitual neglect which can be a ground for termination.
(inaudible question) Q: (inaudible question)

A: I will say there can be no offsetting. You have to pay the full overtime pay. A: The office of the job contractor? . . . .as long as you are working within the
What will you do? Nalulugi ka na dahil lagging late itong taong to? Tardiness region. Its the place of work not the place of business of the employer , its the
can amount to habitual neglect of duties which can amount to a valid ground for place of work
termination. Then I will not advice, assuming I were counsel for the employer, I
will not advice automatic deductions of the salary that will be received by the Another point about overtime work. Overtime work without the consent
employee on account of tardiness, medyo delikado yun. That can be considered of the employer is not compensable. Hindi ka pwedeng mag-overtime lang ng
as illegal deductions from wages overtime dahil nag-iipon ka. Gusto mong bumili ng cellphone, sige mag
overtime ako nag mag-overtime. Management can refuse to pay that. If you
Q: Sir, for example, yung shift mo, something like 2 to 10 in the evening and cannot show that you have been authorized to render overtime.
then may company policy na kung malate ka, they allow you to make up for it,
sir so for example you came in at 3 you go home at 11 . . . Q: Sir, for example, in again, your work is until 5 in the afternoon. However,
A: There should be night differential without overtime pay. Thats clear, any before leaving, you have to perform certain duties. For example sir, stacking
work rendered between 10 and 6 should be compensated by night differential. everything. What sir, what if you were able to do that but sir in excess na of 8
Thats independent of whether that period is overtime work or regular hours or hours?
work. Walang connection. And night differential is given for any work A: That should be considered overtime. Some employers would have the policy
performed by any employee, whether that employee is on permanent night shift of paying overtime that will only exceed 30 minutes
work, whether work is performed only for 1 day in a year. Bastat nagtrabaho
ang isang tao between 10 in the evening until 6 the following morning, may night Q: Thats valid sir?
shift differential yan na 10%, kahit hindi yan ang talagang oras nya, nagkataon A: I think yes, Its reasonable, kasi medyo mahirap din e. It may be tedious to
lang na may ni-rush sya umabot siya ng late. I encountered one employer saying compute overtime pay per minute. Nag-exceed ako ng 15 minutes therefore may
na hindi naman talaga night shift e, wala siyang night shift differential. Of 15 minutes overtime pay ako, I dont think thats reasonable.
course not, any work performed between 10 and 6 should be given night shift
differential. (inaudible question)
A: that was asked earlier and answered earlier
Q: Sir, clarification, Sir you said kanina na you cannot deduct kapag nalate ka? The general rule, if you follow the law, overtime can only be compelled under
A: I will not advice it. Why? I will not advice it because I think that employer is exceptional circumstances. But some employees would readily do it diba? The
exposing itself to a possible charge of illegal deduction of wages. Kung ako ang Employees would be willing to render overtime work

Atty. Marlon Manuel
There are some cases concerning the requirements, the evidentiary night shift differential because its automatic. Anything rendered between 10 and
requirement for claiming ng overtime. 6 should be given 10% night shift differential.
If you were the employee and you say that you have not been paid the
minimum wage, the burden is on the employer to show that you have been paid Q: Sir going back . . . .can the employer compel the employee to render service
the minimum wage. Because its a negative statement, its a negative claim. You beyond the 5 hours but not lead to overtime?
cannot prove a negative claim. Hindi mo pwedeng sabihin hindi nya ako A: If you look at the law, it is technically not compulsion for overtime work
binayaran, ipoprove ko na hindi nya ako binayaran. Hindi ka nga binayaran e because there is no overtime work. But if you look at it at the point of view of
what proof do you have? There employer would now have the burden to prove contractual law, of the law on Obligations and Contracts, ang pinagusapan natin 5
payment. An in fact, this rule applies to any kind of payment hours lang ako e, hindi mo ko pwedeng pilitin na dapat 8 hours. Kasi yun yung
However, if it refers to overtime work, it is not automatic that the work schedule na pinagusapan natin e. you are paying me for 5 hours, why do
employer would have the burden of proving that overtime pay was not paid. you now force me to work for 8 hours? What is the practical effect of this? The
Why? Because the employee must first prove that overtime work was rendered. employee can justly refuse and the just refusal will not be a ground for
Because it is beyond regular, beyond the normal hours of work. So kailangan mo disciplinary action, it is as simple as that. Kapag nagpapilit ka, sorry ka na lang,
ipakita na on this date I have rendered 2 hours of work, this is unpaid. Only after diba? Ano pang remedy ang mahihingi mo e nagtrabaho ka na? Nagpaplit ka na?
you have proved that you have rendered overtime work. Only after you have But I think the more important question will come in when the employee
claimed that you have not been paid that the burden will be shifted to the refuses the order to render overtime work or in this case to render 3 hours of
employer to prove payment. What do you need? You need, if you have daily work beyond the regular schedule of the employee, which Is only 5 hours per
service reports, if youre using a Bundy clock, you can show that as evidence. day. and such refusal is now being used by the employer as a ground for
Once youve shown your schedule, the employer would now have the burden of termination. Ibang usapan na yon. I will cite the provision prohibiting
proving that payment was made. compulsion of overtime work, and I will say that the refusal of the employee is
In one case, there was a dispute about the schedule of the employee. justified. And if It is justified, you cannot use that as a ground fro disciplinary
Nag-settle sila na and schedule in employee ay from 5 am until 8 hours after. So action
ang tanong ngayon, kailangan mo pa bang i-prove ng employee and entitlement
niya to nigh shift differential? Hindi na, kasi automatic na yun e. Hindi yan 6. Jurisdiction
kagaya ng overtime naman na you have to prove overtime work. Kasi once you Q: Ill ask a question not related to labor standards, Sir, about jurisdiction,
have shown that your schedule is not disputed by the employer, that your regular When it comes to money claims, Sir, the jurisdiction of the Labor Arbiter and the
work will cover work rendered after 10 pm and before 6 am, then automatic na other person . . . .
may bight shift differential. So nag-iiba-iba yun. A: The Regional Director
For claim for unpaid wages, employer has the burden. For a claim for Q: Sir, who has jurisdiction over money claims?
unpaid overtime pay, burden is first on the employee to show that overtime work A: Over money claims, you have a P5000 limit per employees claim. Beyond
was rendered and only then will the burden be shifted to show payment for the P5000, the Labor Arbiter . . . . ok, lets start with the basics.
overtime work. But for night shift differential, if it has been established that the A money claim is a simple claim for unpaid benefits. It is not a termination
employees regular work schedule will cover the period between 10 pm and 6am dispute. If it arose out of a termination, the employees are asking for
the following day, then the employee need not prove anything for the claim of reinstatement not simply asking for unpaid wages and benefits. Yun ang money

Atty. Marlon Manuel
claim. As a general rule, the Labor Arbiter will only have jurisdiction over So, kung may violation ka, may union kayo, ayaw mo sa Labor Arbiter,
termination disputes and not over money claims, However, if the money claim of dahil wala kang tiwala sa NLRC, pa inspect ka. Mag-request ka ng inspection,
the employee exceeds P5000, that is per employee and not per complaint, kasi mas madali sa Regional Office. Huwag kang mag-file ng complaint sa Regional
pwedeng 5 employees sa isang complaint, at ang aggregate amount nila is Office kasi kapag nagfile ka ng complaint, adjudicatory yan. Magpa-inspect ka,
P10,000, you have to know the individual complaint, the individual claim. Per mag-request ka ng inspection at bantayan mo yung inspector, kapag hindi mo
employee, P5000 is the limit, beyond P5000, the Regional Director does not have binantayan, wala kang makukuha. Are we clear about the distinction? The
jurisdiction, jurisdiction is now with the Labor Arbiter. However, if . . . ok, this applicability of the P5000 limit?
issue between Art. 128 and Art. 129 of the Labor Code. Art. 128 speaks of the Once there is a claim for reinstatement, it ceases to be a simple money claim. It
enforcement and visitorial powers of the Secretary of Labor. Art. 129 speaks of becomes a termination dispute. So, regardless of the amount of the money claim
the dispute regarding money claims and the jurisdiction of the Regional Director. involved, it is a termination dispute under the jurisdiction of the Labor Arbiter.
What is the difference? Art. 128 is visitorial, Art. 129 is adjudicatory. The Regional Director does not have any jurisdiction. Pero madalas, kapag
Adjudicatory - you have a case, you have a complaint filed, you have to decide. merong complaint, nagcoconciliate sila, kapag walang nangyari, atsaka lang nila
The P5000 limit applies to the adjudicatory powers under Art 129. It will not ipapasa sa Labor Arbiter.
apply to the visitorial and enforcement powers under Art 128. What do we mean
by that? Nagpa-inspect ka, and inspection is pursuant to the visitorial and 7. BONUSES AND BENEFITS
enforcement powers of the Secretary of Labor which can be exercised through Q: Sir, what is the nature of the Service Incentive Leave?
duly authorized representatives, specifically the Regional Offices, the Regional A: The Vacation Leave and Sick Leave we know, are not statutory benefits. They
Director and the representatives of the Regional Director. Nagpadala na ng are additional benefits given out of practice in the Phils. Pero wala yun. So if
inspector, a Labor Inspector Officer, sa isang company. Nag-report yung you work in a company which does not give its employees 15 days sick leave ad
inspector, ah maraming hindi nababayaran ng minimum wage ditto. At ito and 15 days vacation leave, the company Is not violating any law. What should be
computation ng unpaid wage from the start of the effectivity of the new wage given is just 5 days Service Incentive Leave.
order. Noong tiningnan mo, yung claim ng . . . yung unpaid benefits to the
employees, ang average nila is P8000. Q: Sir, for example you have 15 days vacation leave and 15 days sick leave . . .
Who has jurisdiction? The Regional Director or the Labor Arbiter? The A: Wala ka nang service incentive leave
Regional Director will still retain jurisdiction, even if the claim per employee
exceeds P5000. Why? Because this is Art. 128 and not under Art. 129. And Art. Q: Sir, after 5 years, binawasan naging 10 . . .
128, the enforcement and visitorial powers of the Secretary of Labor which can A: Ah no, thats diminution
be exercised through the Regional Director is not limited by the P5000 limit. Are
we clear about that? Kapag nag-inspection ka, kapag visitorial-enforcement Q: Is that ok, sir?
powers, wala yung P5000 limit, kahit P25,000 yan per employee, Regional A: No, of course not. Once you have given benefits, you cannot withdraw those
Director pa din and may jurisdiction. Is that clear? Read Art 128 and 129. Doon benefits.
mo makikita how it is worded, P5000 limit is applicable only to the adjudicatory
powers, not for visitoriaL and enforcement powers. Q: Sir, is it the same, sir, if the company pays 15h month pay, you cannot
withhold the . . . . .?

Atty. Marlon Manuel
A: It depends if the 15th month pay has become a policy of the employer which provisions of DO 10 and deleted the bad provisions. What are the bad
is not dependent on the amount of profits earned for a year. provisions? The enumeration in Sec. 6. Yun yung natanggal, yung requirement
of registration, nandoon pa din, co-terminous contract requirement and contract
Q: Sir, if it depends? of service provision. So, mukhang wala naman gaanong problema. I did not
A: If it depends, then it will be in nature of a bonus and unless you can show a notice any particular provision that makes a new rule, mukhang wala namang
pattern that they make it a clear company policy, giving 15 th month pay to the ganoon. Konti lang yun, maikli lang, mas maikli sa DO 10, mga 5 pages. I dont
employees, then it will remain a bonus which is given not out of obligation. So, have a copy . . .. next week
it cannot be demanded as any other benefit.
Q; . . . .does employer have the right to diminish benefits?
Q: Sir, clarification regarding the bonuses, what happens if you are able to prove A: No because, I answered that question, considering the absence of any
a pattern and yet as in this case, theres a receivership problem, so sir what provision giving such right kasi . . . the question is does the employer have the
happens? right? If you say yes, you have to point out a particular provision. But there is
A: The problem with bonuses is that, in the first place, it is not a statutory right. no such provision
It is mainly given out of the generosity of the employer. And it is given because
of profits, diba? You will not give bonuses if you have not earned profits. Yun Q: Sir so dapat negotiate that with the employee
yung simula. But if it has become a policy of the employer, meaning you are A; it cannot be negotiated and the employees may waive some benefits. The
now expecting that as part of your compensation, then it becomes part of your question of the validity of the waiver will be a different issue
compensation package, which cannot be withdrawn. However, I think it will be
reasonable to say that if the company really cannot afford it, the bonus, then the Q:(inaudible question again)
failure of the company to give the bonus because it is in such a financial state that A: Yes, some employees would prefer o leave. Why? E makukuha nila yung
it cannot give such bonus, I dont think the company should be penalized for that. separation pay nila, diba? Another factor, staying in the company will reduce
I dont think that will not be reasonable. As long as the company is paying 13 th benefits. Some are saying its a balance between the right to security of tenure
month pay. The 13th month pay, ke-kumita ka or hindi, ke-lubog ka na, kailangan and the right to reasonable benefits. I would think that some employees would
mo magbayad niyan. Thats not based on profit, thats a statutory benefit. But prefer to be terminated and in many cases termination of employees with the
still the general ruling if it has become a company policy, it cannot be withdrawn corresponding payment of the separation pay may be beneficial to the employees
rather than stay in the company and receive reduced benefits and be uncertain on
Q: Sir, I havent read this particular Department Order, D.O. No 18, sir . . . . but what will happen later on, diba?
does it have any bearing at all? Did I assign the case of PAL, the dispute which happened in 1998, about
A: I just got D.O. No. 10 last week, I had a copy last . .. . Ok, the only thing here the referendum by Erap? May referendum sila, nagkaroon ng suspension ng
is the new, supposedly the new rules on sub-contracting which replaced D.O. No. CBA for 10 years. May group of employees na nagcontest niyan, umakyat sa
10 which repealed D.O. No. 3. I had a copy about 2 weeks ago and had a brief Supreme Court yung petition. Ok, I dont have a copy of that case right now.
time to go over it. I scanned it and my general impression, I might be wrong, I The ponente is the dad of former Secretary of Labor Quisumbing, Justice
have to read it provision per provision. Somebody in the office is doing the Quisumbing. The Court upheld the validity of the waiver, the validity of the
comparison. My impression is that it retained, it simply retained the good suspension of the CBA for 10 years. Essentially, the Court said that the

Atty. Marlon Manuel
employees agreed to it and definitely the 10 year suspension should apply. That A: One way is to ask the union to do it and for the union . . . its difficult kasi for
the last portion of the decision, before the dispositive portion is what is nice the _____?____ to file the case e. So, one way . .. . of addressing that issue and
because it is totally erroneous. Justice Quisumbing said, in lieu of the 10 year . . . we have done this, not only for the _____?_____ but also for valet parkers, for
. . theres one issue, if you uphold the validity of the 10 year suspension of the example, is for the union to claim that these employees should be covered by the
CBA, ibig sabihin niyan, wala kang freedom period for 10 years. Kasi ang CBA being regular employees. If the company refuses, then the union will file a
freedom period doon pa towards the end of the CBA, of the 5 year period. E complaint
kapag sinuspend mo yang CBA, ibig sabihin, 10 years na walang pwedeng maka- Q: Sir, what if the union itself doesnt want to recognize these people as part of
challenge sa status ng incumbent Bargaining Agent. Then that may be used by the CBA?
company unions. Mag-C-CBA sila then mag-strike sila, madedelay yung CBA A: Then the employees should act on their own. They should file a case against
for 20 years and for 20 years walang pwedeng pumasok na ibang union. That the company for non-payment of benefits provided in the CBA
will work for the company. So problema yan. How did Justice Quisumbing
answer that? The good Justice said, Im being sarcastic, Justice Quisumbing said Q: Sir, do they file a claim against the union?
the 5 year representation period is in the meantime held in abeyance. Hindi A: No, of course not. The union is not obliged to give them anything. If they
tumatakbo yung 5 year representation period. Anong kalokohan yan? The law is are not members of the union, they cannot demand anything from the union
clear, representation is limited to 5 years. Thats the term of the CBA with regard especially since the company is not recognizing them and the union is also not
to representation aspect. Yan ang mahirap sagutin doon sa 10 year suspension recognizing them as part of the bargaining unit.
kasi the 10 year suspension affects the 5 year representation term. That is an
argument against upholding the validity of the suspension. Ginawa nila, Q: Sir, yung taxi drivers and jeepney drivers on the boundary system, sir. Are
binaliktad nila, inupheld nila muna atsaka na lang ginawaan ng paraan yung 5 they always considered employees or are there times when they can be
years. At ang sinabi, held in abeyance. Lokohan yon diba? Held in abeyance. If considered as mere lessees of the vehicles?
youll suspend the CBA, youre holding in abeyance the 5 year representation A; If you base your answer in Dinglasan, which was reiterated in a 2001 case.
period. In effect, you are prolonging the status of the incumbent bargaining May bagong case, 2001. I included that in your case diba? The court will tell
agent. For the period you are suspending the effectivity of the CBA A ___?___ you that the drivers should be considered employees, so you can cite that if that is
doctrine. and that might be asked in the Bar Examinations. You read that case, asked in the Bar Examinations, I dont think however that Dinglasan should be
that might be asked in the Bar Examinations. Do you trust the examiners to applied s a general rule. I think you still have to examine the relationship
abide by that rule on cut-off? between the operator of the taxicabs and jeepneys vis--vis the work of the
employee concerned, of the worker. Kung wala naman talagang control, I dont
8. EMPLOYER-EMPLOYEE RELATIONSHIP think may control, wala naman talaga e, even in Dinglasan, I dont think may
Q: Sir, for example, in hotels, the services in the hotel, diba they should be control of the worker over the conduct of the work of the employee. The
considered . . . schedule in itself will not amount to control over the means of work. So I dont
A: Regular, yes. Why? Its part of he service that the hotel gives to the guests. think thats a good decision but you still have it and it has been reiterated very
recently so . .. . I did not include Dinglasan but I think I included something that
Q: Sir, what if they are not considered as regular employees? Who will you file reiterated Dinglasan . . . thats why I did not include Dinglasan
the case against?

Atty. Marlon Manuel
In fact, hindi ko na nga dinidiscuss yan dati e pero last year may lumabas . . . I
believe that . . . . Ill give you the citation . . . I have it in my 1 st year, 1st sem list,
so if you get hold of a copy of the 1 st year, 1st sem list, then check or you can just
read Dinglasan, it just reiterated Dinglasan.
GOOD LUCK!!!

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Ateneo Law 2002, 2nd Semester

LABOR LAW REVIEW LABOR CODE

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Art. 281. Probationary employment.

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- Rehired whenever their services are required (e.g. farmworkers)

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Ateneo Law 2002, 2nd Semester

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Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

RULE VI SECTION 4. Affiliation of independent union. An independent union

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

SECTION 1. Right of union to collect dues. The right of the

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester

- Provided, That the individual authorization required under

Ateneo Law 2002, 2nd Semester

Ateneo Law 2002, 2nd Semester