LABOR LAW Reviewer Chan 2015 PDF

ChanRobles Internet Bar Review : ChanRobles Professional Review, Inc.
PRE-WEEK NOTES
FOR THE 2015 BAR EXAMS
By:
Prof. Joselito Guianan Chan

Sources of rights of labor and employment:
1. Constitutional rights and mandates
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2. Police power of the State
3. Labor Code of the Philippines and its
Implementing Rules and Regulations TOPIC NO. 1
FUNDAMENTAL PRINCIPLES AND POLICIES
4. Civil Code
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5. Revised Penal Code
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6. International Covenants
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7. Collective Bargaining Agreements
8. Past practices or company policies
sCONSTITUTIONAL PROVISIONS
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 What are the significant constitutional principles related to Labor Law?
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The following principles are noteworthy:
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 Under Article II (Declaration of Principles and State Policies):
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a. Promotion of full employment, a rising standard of living, and an improved quality of life for all.
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b. Promotion of social justice in all phases of national development. Social Justice - humanization of laws and the equalization of social and economic
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forces by the State so that justice may at least be approximated.
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c. Full respect for human rights.
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d. Vital role of the youth in nation-building.
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e. Role of women in nation-building, and fundamental equality before the law of women and men.
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f. Indispensable role of the private sector,
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g. Protection-to-labor clause: “Section 18. The State affirms labor as a primary social economic force. It
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Q: Is labor's right and management's
right equal? shall protect the rights of workers and promote their welfare.
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Section 20. The State recognizes the
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NOTE: Article II is merely a statement of principles and state policies. Its provisions are not self-executing. They
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indispensable role of the private sector,
encourages private enterprise, and
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provides incentives to needed do not embody judicially enforceable constitutional rights but guidelines for legislation. These broad constitutional
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investments.
principles need legislative enactments to implement them. The disregard of these provisions cannot give rise
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to a cause of action in the courts. Consequently, no case can be filed based on these principles. There
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Management Rights:
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1. Right to return of investment and must be enabling laws to implement them.
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make profit
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 Under Article III (Bill of Rights):
2. Right to prescribe rules
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3. Right to select employees
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4. Right to transfer of discharge a. Due process and equal protection of the law.
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employees
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b. Freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and
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5. Right to transfer and discharge
petition the government for redress of grievances.
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employees
c. Right of the people to information on matters of public concern. Access to official records, and to
Q: Does an employer have the right to to documents and papers pertaining to official acts, transactions, or decisions, as well as to government
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require drug-testing?
research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as
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- mandatory or compulsory drug testing
may be provided by law.
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policy would only be legal and
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enforceable if it is imposed as a pre-
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employment requisite since an employer d. Right of public and private sector employees to form unions, associations, or societies for purposes not
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has the right to determine the
qualifications of people who seek for
contrary to law shall not be abridged.
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e. Non-impairment of obligations of contracts.
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employment. However, if compulsory
or mandatory drug testing is imposed as
a condition for the continued
f. Right to speedy disposition of cases in judicial, quasi-judicial or administrative bodies.
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g. Prohibitions against involuntary servitude.
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employment of a worker, this may
infringe on his constitutionally
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 Under Article XIII (Social Justice and Human Rights):
guaranteed right to privacy and the right
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against self-incrimination. By this
opinion, we do not however mean that a. Protection-to-Labor Clause: VERY IMPORTANT
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an employer is prohibited by law to
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incorporate in its rules of discipline,
Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized,
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lawful and reasonable provisions on
drug-related offenses that would serve and promote full employment and equality of employment opportunities for all. Organized - with CBA
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as basis, or ground for disciplinary
action. We qualified, however, that this It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and
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peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security
suggested rule must only be enforced in
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case there is probable cause that the
employee is using prohibited drugs. of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-
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making processes affecting their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and employers and the
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preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right of labor to its just
share in the fruits of production and the right of enterprises to reasonable returns to investments, and to
expansion and growth.
 What are the due process principles applicable in termination of employment?
1. Constitutional due process is not applicable to termination of employment. This means that the employee
undergoing investigation leading to his dismissal cannot invoke constitutional due process if and when he is
deprived of due process by the employer. This is so because constitutional due process may only be invoked
against the State or government. However, after being dismissed, the employee who files an illegal dismissal case
may invoke constitutional due process in case he is deprived of due process by the Labor Arbiter, the NLRC, or the
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2015 BAR EXAMS

Court of Appeals since, this time, it is already the government which may be said to have deprived him of due
process.
2. At the company level investigation leading to an employee’s dismissal, BOTH the following procedural due process
must be complied with:
a. Statutory due process per 2004 Agabon doctrine which refers to the due process provision in the Labor Code
(Article 277[b]); AND
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b. Contractual due process per 2013 Abbott Laboratories doctrine which refers to the due process prescribed
by the employer itself in its Company rules and regulations or Code of Discipline. Having prescribed the due
process itself, the employer is contractually bound to adhere to and observe it.
Penalty for non-compliance with either or both statutory or contractual due process - P30,000.00 indemnity in the
form of nominal damages.
 Is assistance of counsel in termination cases mandatory and indispensable?
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NO, according to the 2011 case of Lopez v. Alturas Group of Companies:
Except:
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(1) When the employee himself requests for counsel; or
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(2) When he manifests that he wants a formal hearing on the charges against him.
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NEW CIVIL CODE
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 What is latest example of a labor case where Article 1700 of the Civil Code was applied?
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Article 1700 of the Civil Code provides:
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“Art. 1700. The relations between capital and labor are not merely contractual. They are so impressed with public
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interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor
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unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar
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Strike - temporary stoppage of work due to labor disputes
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subjects.” Lockout - temporary stoppage of operations due to existing labor disputes with workers
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Protest - expression of grievance even without labor dispute
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2011 case of Leyte Geothermal Power Progressive Employees Union-ALU-TUCP v. Philippine National Oil
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Company-Energy Development Corporation, involving the issue of whether the members of petitioner union are project
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employees or regular employees. It was pronounced that Article 280 of the Labor Code, as worded, establishes that the nature
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of the employment is determined by law, regardless of any contract expressing otherwise. The supremacy of the law over the
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nomenclature of the contract and the stipulations contained therein is to bring to life the policy enshrined in the Constitution to
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"afford full protection to labor." Thus, labor contracts are placed on a higher plane than ordinary contracts; these are imbued
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with public interest and therefore subject to the police power of the State. However, notwithstanding the foregoing iterations,
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project employment contracts which fix the employment for a specific project or undertaking remain valid under the law. In the
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case at bar, the records reveal that the officers and the members of petitioner union signed employment contracts indicating
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the specific project or phase of work for which they were hired, with a fixed period of employment. As clearly shown by
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petitioner union’s own admission, both parties had executed the contracts freely and voluntarily without force, duress or acts
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tending to vitiate the workers’ consent. Thus, there is no reason not to honor and give effect to the terms and conditions
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stipulated therein.
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 How is Article 1702 of the Civil Code correlated with Article 4 of the Labor Code?
Both Article 1702 of the Civil Code and Article 4 of the Labor Code speak of the rule on interpretation and construction
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provisions of law and labor contracts.
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Article 1702 of the Civil Code provides:
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“Article 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and
decent living for the laborer.”
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“Article 4. Construction in Favor of Labor. – All doubts in the implementation and interpretation of the provisions of this
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Code, including its implementing rules and regulations, shall be resolved in favor of labor.”
Both articles above may be applied to doubts and ambiguities in:
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(1) labor contracts such as an employment contract or a CBA; or
(2) evidence presented in labor cases.
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Article 1. Name of Decree. This Decree shall be known as the
"Labor Code of the Philippines".
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C. Article 2. Date of effectivity. This Code shall take effect six (6)
THE LABOR CODE months after its promulgation.
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 What are the distinctions between Labor Relations and Labor Standards?
“Labor standards law” is that part of labor law which prescribes the minimum terms and conditions of employment
which the employer is required to grant to its employees. living allowance, and other monetary and welfare benefits, including occupational, safety, and health standards
– minimum requirements prescribed by existing laws, rules and regulations relating to wages, hours of work, cost-of-
“Labor relations law” is that part of labor law (Book V of the Labor Code) which deals with unionism, collective
bargaining, grievance machinery, voluntary arbitration, strike, picketing and lockout.
– defines the status, rights and duties, and the institutional mechanisms that govern the individual and collective interactions of employers, employees or their representatives. Covers
employment tenure and termination.
1 Abbott Laboratories, Philippines v. Pearlie Ann F. Alcaraz, G.R. No. 192571, July 23, 2013.
2 G.R. No. 191008, April 11, 2011, 647 SCRA 568.
3 G.R. No. 170351, March 30, 2011.
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Labor relations and labor standards laws are not mutually exclusive. They are complementary to, and closely
interlinked with, each other. For instance, the laws on collective bargaining, strikes and lockouts which are covered by labor
relations law necessarily relate to the laws on working conditions found in Book III.
 What is exclusive bargaining representative/agent?
“Exclusive bargaining representative” or “exclusive bargaining agent” refers to a legitimate labor organization duly
recognized or certified as the sole and exclusive bargaining representative or agent of all the employees in a bargaining unit.
 Can individual employee or group of employees bring grievable issues directly to their employer without the
participation of the bargaining union?
Yes. The designation of a bargaining agent does not deprive an individual employee or group of employees to exercise
their right at any time to present grievances to their employer, with or without the intervention of the bargaining agent.
 Can individual employee or group of employees bring grievable issues to voluntary arbitration without the
participation of the bargaining union?
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No, as held in the 2009 case of Tabigue v. International Copra Export Corporation, where the Supreme Court
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clarified that an individual employee or group of employees cannot be allowed to submit or refer unsettled grievances for
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voluntary arbitration without the participation of the bargaining union/agent. The reason is that it is the bargaining union/agent
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which is a party to the CBA which contains the provision on voluntary arbitration. Being a party thereto, it cannot be disregarded
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when a grievable issue will be submitted for voluntary arbitration.
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In order to have legal standing, the individual members should be shown to have been duly authorized to represent the
bargaining union/agent.
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 What is the principle of co-determination?
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The principle of co-determination refers to the right given to the employees to participate in policy and decision-making
processes that affect their rights, benefits and welfare.
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In PAL v. NLRC and PALEA, it was held that the formulation of a Code of Discipline among employees is a shared
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responsibility of the employer and the employees. It affirmed the decision of the NLRC which ordered that the New Code of
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Discipline should be reviewed and discussed with the union, particularly the disputed provisions and that copies thereof be
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furnished each employee.
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Does the grant of the right of participation mean co-management of business or intrusion into management prerogatives?
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No. This principle does not mean that workers should approve management policies or decisions.
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Manila Electric Company v. Quisumbing3 - the grant of this right is not an intrusion into the employer’s management
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prerogative. The mandate of the Constitution and the law is complied with when, for instance, the union is allowed to have
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representatives in the employer’s Safety Committee, Uniform Committee and other committees of similar nature. Certainly, such
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participation by the union in the said committees is not in the nature of a co-management control of the business of the employer. What
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is granted therein is participation and representation. Thus, there is no impairment of management prerogatives.
 What is Labor-Management Council (LMC)?
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The establishment of LMC is mandated under the said constitutional principle of co-determination. This is the body
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where workers, through their representatives, together with representatives of the employer, are allowed to participate in policy
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and decision-making processes that affect their rights, benefits and welfare.
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 What is the provision of the Labor Code enunciating STATUTORY DUE PROCESS?
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Article 277, paragraph (b) of the Labor Code enunciates the so-called statutory due process.
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Article 3. Declaration of basic policy.
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The State shall afford protection to labor, promote full employment,
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ensure equal work opportunities regardless of sex, race or creed - vs. -
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Rights under the Constitution. Art 3 does no include:
and regulate the relations between workers and employers. The - right to peaceful concerted activities
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State shall assure the rights of workers to self-organization, - right to strike in accordance with law
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collective bargaining, security of tenure, and just and humane - right to participate in decision-making activities
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- right to living wage
conditions of work. - State shall promote the responsibility of shared responsibility
Right to Self-organization
- Labor Code: Art 3, 246
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- Constitution: Art. XIII Sec 3 and Art III Sec 8
Section 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law
shall not be abridged.
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Article 5. Rules and regulations. Article 6. Applicability.
The Department of Labor and other government agencies charged All rights and benefits granted to workers under this Code shall, except as may
with the administration and enforcement of this Code or any of its otherwise be provided herein, apply alike to all workers, whether agricultural or
parts shall promulgate the necessary implementing rules and non-agricultural. (As amended by Presidential Decree No. 570-A, November 1,
regulations. Such rules and regulations shall become effective 1974)
fifteen (15) days after announcement of their adoption in Government corporations created by special
(original) charter from Congress are subject to Civil Service rules, while those
newspapers of general circulation. incorporated under the general Corporation Law are covered by the Labor
Code.
Similarly, employees of the Social Security System (SSS) are civil service
1 G.R. No. 183335, Dec. 23, 2009. employees. When they went on strike, the Regional Trial Court, not the National
2 G.R. No. 85985, Aug. 13, 1993. Labor Relations Commission, had jurisdiction to hear the petition to enjoin the
3 G.R. No. 127598, Jan. 27, 1999, 302 SCRA 173, 213. strike.
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It is not correct to say that employment relationship is a pre-condition to the applicability of the
Code. When the issue, for instance, is an indirect employer's liability, or illegal recruitment, or
misuse of POEA license, there is no employer-employee relationship between the complainant and
the respondent, and yet the pertinent Labor Code provisions may be invoked.
LABOR CODE is divided into 3:
1. Pre-employment - hiring Article 13. Definitions.
2. State of Employment - labor relations "Worker" means any member of the labor force, whether
3. Post Employment - termination ChanRobles Internet Bar Review : ChanRobles Professional Review,
employed or unemployed. Inc.
"Recruitment and placement" refers to any act of canvassing,
Department of Labor and Employment enlisting, contracting, transporting, utilizing, hiring or procuring
- "the primary policy-making, programming, coordinating, and BOOK ONE - PRE EMPLOYMENT workers, and includes referrals, contract services, promising or
administrative entity of the Executive Branch of the government in the & advertising for employment, locally or abroad, whether for profit
field of labor and employment." 2015 BAR EXAMS or not: Provided, That any person or entity which, in any manner,
BOOK TWO — HUMAN RESOURCES offers or promises for a fee, employment to two or more persons
DEVELOPMENT shall be deemed engaged in recruitment and placement.
Article 12. Statement of objectives. It is the policy of the State: "Private fee-charging employment agency" means any person or
TOPIC NO. 2
- To promote and maintain a state of full employment through entity engaged in recruitment and placement of workers for a fee
improved manpower training, allocation and utilization; which is charged, directly or indirectly, from the workers or
- To protect every citizen desiring to work locally or overseas by employers or both.
securing for him the best possible terms and conditions of "License" means a document issued by the Department of Labor
employment;
- To facilitate a free choice of available employment by persons
RECRUITMENT AND PLACEMENT authorizing a person or entity to operate a private employment
agency.
"Private recruitment entity" means any person or association
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seeking work in conformity with the national interest;
- To facilitate and regulate the movement of workers in conformity engaged in the recruitment and placement of workers, locally or
overseas, without charging, directly or indirectly, any fee from
RECRUITMENT OF
with the national interest;
- To regulate the employment of aliens, including the the workers or employers.
"Authority" means a document issued by the Department of
LOCAL AND MIGRANT WORKERS
establishment of a registration and/or work permit system;
- To strengthen the network of public employment offices and Labor authorizing a person or association to engage in
rationalize the participation of the private sector in the recruitment recruitment and placement activities as a private recruitment
and placement of workers, locally and overseas, to serve national entity.
development objectives; "Seaman" means any person employed in a vessel engaged in
- To insure careful selection of Filipino workers for overseas I. maritime navigation.
employment in order to protect the good name of the Philippines RECRUITMENT AND PLACEMENT "Overseas employment" means employment of a worker outside
abroad. the Philippines.
FOR LOCAL EMPLOYMENT "Emigrant" means any person, worker or otherwise, who
emigrates to a foreign country by virtue of an immigrant visa or
 What is a “Private Recruitment and Placement Agency (PRPA)”? resident permit or its equivalent in the country of destination.
It refers to any individual, partnership, corporation or entity engaged in the recruitment and placement of persons for
local employment.
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Article 16. Private recruitment. Except as provided in
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Chapter II of this Title, no person or entity other than the
 What are the qualifications of a PRPA for local employment?
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public employment offices, shall engage in the recruitment
and placement of workers.
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An applicant for a license to operate a PRPA must possess the following:
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1. Must be a Filipino citizen, if single proprietorship. In case of a partnership or a corporation, at least seventy-five
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percent (75%) of the authorized capital stock must be owned and controlled by Filipino citizens;
2. Must have a minimum net worth of P200,000.00 in the case of single proprietorship and partnership or a minimum
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paid-up capital of P500,000.00 in the case of a corporation.
3. The owner, partners or the officers of the corporation must be of good moral character and not otherwise disqualified
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by law;
4. Must have an office space with a minimum floor area of fifty (50) square meters.
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 What is the period of validity of the license?
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The license shall be valid all over the Philippines for two (2) years from the date of issuance, upon submission of proof
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Article 25 provides a broad exception as it states that "the private
of publication, unless sooner suspended, cancelled or revoked by the DOLE Regional Director. employment
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sector shall participate in the recruitment and
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placement of workers, locally and overseas." Based on the Rules
 Is the license transferable to other persons or entities? Implementing the Code, the following entities are authorized to
recruit and place workers for local or overseas employment:
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No license shall be transferred, conveyed or assigned to any other person or entity. a. public employment offices
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b. private recruitment entities
Article 29. Non-transferability of license or authority. No license or authority shall
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be used directly or indirectly by any person other than the one in whose favor it
c. private employment agencies
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was issued or at any place other than that stated in the license or authority be
II. d. shipping or manning agents or representatives
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transferred, conveyed or assigned to any other person or entity. Any transfer of RECRUITMENT AND PLACEMENT e. the POEA
f. construction contractors if authorized to operate by DOLE and the
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business address, appointment or designation of any agent or representative
including the establishment of additional offices anywhere shall be subject to the FOR OVERSEAS EMPLOYMENT Construction Industry Authority
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prior approval of the Department of Labor. g- members of the diplomatic corps although hirings done by them
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 What are the laws relevant to overseas employment? have to be processed through the POEA
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h. other persons or entities as may be authorized by the DOLE
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secretary.
1. The Labor Code; and
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2. Migrant Workers and Overseas Filipinos Act of 1995 [R. A. No. 8042], as amended by R.A. No. 10022 (March 8,
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2010).
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 What are the important terms related to overseas employment?
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1. “Overseas Filipinos” refer to migrant workers, other Filipino nationals and their dependents abroad.
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2. “Overseas Filipino Worker or Migrant Worker” refers to a person who is to be engaged, is engaged, or has
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been engaged in a remunerated activity in a state of which he or she is not a citizen or on board a vessel
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navigating the foreign seas other than a government ship used for military or non-commercial purposes, or
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on an installation located offshore or on the high seas. A “person to be engaged in a remunerated activity”
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refers to an applicant worker who has been promised or assured employment overseas.
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The following are authorized to engage in recruitment and placement of workers:
a. Public employment offices;
b. Philippine Overseas Employment Administration (POEA);
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c. Private recruitment entities;
d. Private employment agencies;
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e. Shipping or manning agents or representatives;
f. Such other persons or entities as may be authorized by the DOLE Secretary; and
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g. Construction contractors.
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LICENSING AND REGULATION
FOR OVERSEAS RECRUITMENT AND PLACEMENT
 What are the qualifications of a recruiter for overseas employment?
Only those who possess the following qualifications may be permitted to engage in the business of recruitment and
placement of overseas Filipino workers:
1. Filipino citizens, partnerships or corporations at least seventy five percent (75%) of the authorized capital stock of
which is owned and controlled by Filipino citizens;
Article 27. Citizenship requirement. Only Filipino citizens or corporations, partnerships or entities at least seventy-five percent (75%) of the authorized and voting capital
stock of which is owned and controlled by Filipino citizens shall be permitted to participate in the recruitment and placement of workers, locally or overseas.
2015 BAR EXAMS

Article 28. Capitalization. All
applicants for authority to hire or
renewal of license to recruit are 2. A minimum capitalization of Two Million Pesos (P2,000,000.00) in case of a single proprietorship or partnership
required to have such substantial
capitalization as determined by and a minimum paid-up capital of Two Million Pesos (P2,000,000.00) in case of a corporation; Provided, that
the Secretary of Labor.
those with existing licenses shall, within four (4) years from effectivity hereof, increase their capitalization or paid up
capital, as the case may be, to Two Million Pesos (P2,000,000.00) at the rate of Two Hundred Fifty Thousand
Pesos (P250,000.00) every year; and
3. Those not otherwise disqualified by law or other government regulations to engage in the recruitment and
placement of workers for overseas employment.
 What are the disqualifications?
The following are not qualified to engage in the business of recruitment and placement of Filipino workers overseas:
Article 26. Travel agencies
prohibited to recruit. Travel a. Travel agencies and sales agencies of airline companies;
agencies and sales agencies of
airline companies are prohibited b. Officers or members of the Board of any corporation or members in a partnership engaged in the business of a
from engaging in the business of
recruitment and placement of
travel agency;
workers for overseas employment c. Corporations and partnerships, when any of its officers, members of the board or partners, is also an officer,
whether for profit or not.
member of the board or partner of a corporation or partnership engaged in the business of a travel agency;
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d. Persons, partnerships or corporations which have derogatory records, such as, but not limited to, the following:
1) Those certified to have derogatory record or information by the NBI or by the Anti-Illegal Recruitment Branch of
the POEA;
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2) Those against whom probable cause or prima facie finding of guilt for illegal recruitment or other related cases
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exists;
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3) Those convicted for illegal recruitment or other related cases and/or crimes involving moral turpitude; and
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4) Those agencies whose licenses have been previously revoked or cancelled by the POEA for violation of R.A.
No. 8042, the Labor Code (PD 442, as amended), and their implementing rules and regulations.
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All applicants for issuance/renewal of license shall be required to submit clearances from the NBI and Anti-
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Illegal Recruitment Branch of the POEA, including clearances for their respective officers and employees.
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e. Any official or employee of the DOLE, POEA, Overseas Workers Welfare Administration (OWWA), Department of
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Foreign Affairs (DFA) and other government agencies directly involved in the implementation of R.A. No. 8042
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and/or any of his/her relatives within the fourth (4th) civil degree of consanguinity or affinity; and
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f. Persons or partners, officers and directors of corporations whose licenses have been previously cancelled or
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revoked for violation of recruitment laws.
 What is the period of validity of license?
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Every license shall be valid for four (4) years from the date of issuance unless sooner cancelled, revoked or
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suspended for violation of applicable Philippine law, the Rules and other pertinent issuances. Such license shall be valid only at
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the place/s stated therein and when used by the licensed person, partnership or corporation.
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 Can a license be transferred?
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No. The license shall not be transferred, conveyed or assigned to any person, partnership or corporation. It shall not be
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used directly or indirectly by any person, partnership or corporation other than the one in whose favor it was issued.
oNo. 10022)
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Article 25. Private sector participation in the recruitment and placement
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ILLEGAL RECRUITMENT of workers. Pursuant to national development objectives and in order to
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harness and maximize the use of private sector resources and initiative
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(Section 5, R.A. in the development and implementation of a comprehensive employment
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program, the private employment sector shall participate in the
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recruitment and placement of workers, locally and overseas, under such
 Who may commit illegal recruitment?
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guidelines, rules and regulations as may be issued by the Secretary of
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Labor.
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Broadly, “illegal recruitment” may be committed by any person, regardless of whether such person is a:
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1. Non-licensee;
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2. Non-holder of authority;
3. Licensee; or
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4. Holder of authority.
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 Any person, whether a non-licensee, non-holder, licensee or holder of authority, may be held liable for
illegal recruitment. Under R.A. No, 8042, as amended by R.A. No. 10022, license or authority of the illegal
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recruiter is immaterial.
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 What constitutes illegal recruitment when committed by a NON-LICENSEE or NON-HOLDER OF AUTHORITY?
Illegal recruitment, when undertaken by non-licensee or non-holder of authority, shall mean any act
of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes
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referring, contract services, promising or advertising for employment abroad, whether for profit or not,
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Provided, That any such non-licensee or non-holder who, in any manner, offers or promises for a fee employment
abroad to two or more persons shall be deemed so engaged.
Ch
 What constitutes illegal recruitment when committed by ANY PERSON, whether a NON-LICENSEE, NON-
HOLDER OF AUTHORITY or even by a LICENSEE or HOLDER OF AUTHORITY?
Article 34. Prohibited
practices. It shall be (a) To charge or accept, directly or indirectly, any amount greater than that specified in the schedule of allowable
unlawful for any fees prescribed by the Secretary of Labor and Employment, or to make a worker pay or acknowledge any
individual, entity, amount greater than that actually received by him as a loan or advance; Illegal exaction
licensee, or holder of
authority: (b) To furnish or publish any false notice or information or document in relation to recruitment or employment; False information
(c) To give any false notice, testimony, information or document or commit any act of misrepresentation for the
purpose of securing a license or authority under the Labor Code, or for the purpose of documenting hired
False information in securing license or authority
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2015 BAR EXAMS

workers with the POEA, which include the act of reprocessing workers through a job order that pertains to
non-existent work, work different from the actual overseas work, or work with a different employer whether
registered or not with the POEA;
(d) To induce or attempt to induce a worker already employed to quit his employment in order to offer him
another unless the transfer is designed to liberate a worker from oppressive terms and conditions of
employment; Pirating
(e) To influence or attempt to influence any person or entity not to employ any worker who has not applied for
employment through his agency or who has formed, joined or supported, or has contacted or is supported by
any union or workers' organization;
(f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the
dignity of the Republic of the Philippines;
(g) To fail to submit reports on the status of employment, placement vacancies, remittance of foreign exchange
earnings, separation from jobs, departures and such other matters or information as may be required by the
Secretary of Labor and Employment;
a r
(h) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by the
B
Department of Labor and Employment from the time of actual signing thereof by the parties up to and
s
including the period of the expiration of the same without the approval of the Department of Labor and
an
Employment;
l e
b
(i) For an officer or agent of a recruitment or placement agency to become an officer or member of the Board
Ro h
of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of
travel agency;
(j)
an r
To withhold or deny travel documents from applicant workers before departure for monetary or financial
a
considerations, or for any other reasons, other than those authorized under the Labor Code and its
C
Ch
B n
implementing rules and regulations;
e s a
(k) Failure to actually deploy a contracted worker without valid reason as determined by the Department of
l
n
Labor and Employment;
b
ia r
(l) Failure to reimburse expenses incurred by the worker in connection with his documentation and processing
R o
for purposes of deployment, in cases where the deployment does not actually take place without the
worker's fault. Illegal recruitment when committed by a syndicate or in large scale shall be considered
an u
an offense involving economic sabotage; and
PROHIBITED G
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(m) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning agency.”
ChIN RELATION s
o e
ACTIVITIES
l
t Ro
TO ILLEGAL RECRUITMENT
b
i
 What are the prohibited activities in connection with recruitment for overseas employment?
e
the following prohibited acts:
l an
Besides illegal recruitment, the law additionally provides that it shall also be unlawful for any person or entity to commit
r
s a
(1) Grant a LOAN to an overseas Filipino worker with interest exceeding eight percent (8%) per annum, which will be used
h B
Jo C
for payment of legal and allowable placement fees and make the migrant worker issue, either personally or through a guarantor
s
or accommodation party, post-dated checks in relation to the said loan;
e
. l
(2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to avail of a LOAN only
f b
from specifically designated institutions, entities or persons;
Ro
(3) Refuse to condone or renegotiate a LOAN incurred by an overseas Filipino worker after the latter's employment contract has
o
been prematurely terminated through no fault of his or her own;
r an r
(4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo HEALTH
a
P
EXAMINATIONS only from specifically designated medical clinics, institutions, entities or persons, except in the case
B
of a seafarer whose medical examination cost is shouldered by the principal/shipowner;
h s
(5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo TRAINING,
C e
SEMINAR, INSTRUCTION OR SCHOOLING of any kind only from specifically designated institutions, entities or
l
persons, except for recommendatory trainings mandated by principals/shipowners where the latter shoulder the cost
b
of such trainings;
o
(6) For a SUSPENDED RECRUITMENT/MANNING AGENCY to engage in any kind of recruitment activity including the processing
R
of pending workers' applications; and
n
(7) For a recruitment/manning agency or a foreign principal/employer to pass on the overseas Filipino worker or deduct from his or
a
her salary the payment of the cost of INSURANCE fees, premium or other insurance related charges, as provided under
the compulsory worker's INSURANCE coverage.
LICENSE VS. AUTHORITY

 What is a “license” for overseas recruitment?
Ch
“License” refers to the document issued by the DOLE Secretary authorizing a person, partnership or corporation to
operate a private recruitment or manning agency.
2015 BAR EXAMS

 What is an “authority” for overseas employment?

“Authority” refers to the document issued by the DOLE Secretary authorizing the officers, personnel, agents or
representatives of a licensed recruitment or manning agency to conduct recruitment and placement activities in a place stated
in the license or in a specified place.
ELEMENTS OF ILLEGAL RECRUITMENT
 What are the elements of illegal recruitment?
The essential elements of illegal recruitment vary in accordance with the following classifications:
(1) Simple illegal recruitment;
(2) When committed by a syndicate; or
(3) When committed in large scale.
When illegal recruitment is committed under either Nos. 2 or 3 above or both, it is considered an offense involving
economic sabotage.
a r
SIMPLE ILLEGAL RECRUITMENT
B
s
an
 What are the 2 elements of simple illegal recruitment?
l e
(1) The offender has no valid license or authority required by law to enable one to lawfully engage in recruitment
b
and placement of workers; and
Ro h
(2) He undertakes either any activity within the meaning of “recruitment and placement” defined under Article
13(b), (see above enumeration) or any prohibited practices (see above enumeration) under Article 34 of the
C
Labor Code.
an
 Can a recruiter be a natural or juridical person?
ar
Ch
Yes.
 What are some relevant principles on illegal recruitment?
e s
B
a n
l
n
1. Mere impression that a person could deploy workers overseas is sufficient to constitute illegal recruitment. But if no such
b
ia r
impression is given, the accused should not be convicted for illegal recruitment.
R o
2. Mere promise or offer of employment abroad amounts to recruitment.
3. There is no need to show that accused represented himself as a licensed recruiter.
an
4. Referrals may constitute illegal recruitment.
u Ba
G
5. It is illegal recruitment to induce applicants to part with their money upon false misrepresentations and promises in
Ch
assuring them that after they paid the placement fee, jobs abroad were waiting for them and that they would be deployed
soon.
s
o e
6. Recruitment whether done for profit or not is immaterial.
l
t
7. The act of receiving money far exceeding the amount as required by law is not considered as “recruitment and placement”
b
i
as this phrase is contemplated under the law.
o
l
8. Actual receipt of fee is not an element of the crime of illegal recruitment.
R
se
9. Conduct of interviews amounts to illegal recruitment.
an r
10. Absence of receipt is not essential to hold a person guilty of illegal recruitment.
11. Conviction for illegal recruitment may be made on the strength of the testimonies of the complainants.
B a
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12. Absence of documents evidencing the recruitment activities strengthens, not weakens, the case for illegal recruitment.
13. Only one person recruited is sufficient to convict one for illegal recruitment.
e s
.
14. Non-prosecution of another suspect is immaterial.
f bl
15. Execution of affidavit of desistance affects only the civil liability but has no effect on the criminal liability for illegal
recruitment.
o Ro
16. Defense of denial cannot prevail over positive identification. Positive identification where categorical and consistent and
not attended by any showing of ill motive on the part of the eyewitnesses on the matter prevails over alibi and denial.
P r the other hand, the former must prevail.

an
Between the categorical statements of the prosecution witnesses, on the one hand, and bare denials of the accused, on
B a r
Ch s
ILLEGAL RECRUITMENT AS A FORM OF ECONOMIC SABOTAGE
 When is illegal recruitment considered a crime involving economic sabotage?
l e
1. when committed by a syndicate; or
2. when committed in large scale.
ob
 When is illegal recruitment committed by a syndicate? R
an
If it is carried out by a group of three (3) or more persons conspiring or confederating with one another.
Ch
 Elements of illegal recruitment by a syndicate.
The essential elements of the crime of illegal recruitment committed by a syndicate are as follows:
1. There are at least three (3) persons who, conspiring and/or confederating with one another, carried out any
unlawful or illegal recruitment and placement activities as defined under Article 13(b) or committed any prohibited
activities under Article 34 of the Labor Code; and
2. Said persons are not licensed or authorized to do so, either locally or overseas.
2015 BAR EXAMS

The law does not require that the syndicate should recruit more than one (1) person in order to constitute the
crime of illegal recruitment by a syndicate. Recruitment of one (1) person would suffice to qualify the illegal recruitment
act as having been committed by a syndicate.
 When is illegal recruitment considered in large scale?
If committed against three (3) or more persons individually or as a group.
 Elements of illegal recruitment in large scale.
The elements of illegal recruitment in large scale, as distinguished from simple illegal recruitment, are as follows:
1. The accused engages in the recruitment and placement of workers as defined under Article 13(b) or committed any
prohibited activities under Article 34 of the Labor Code; and
2. The accused commits the same against three (3) or more persons, individually or as a group.
 Distinguished from illegal recruitment by a syndicate.
As distinguished from illegal recruitment committed by a syndicate, illegal recruitment in large scale may be committed
by only one (1) person. What is important as qualifying element is that there should be at least three (3) victims of such illegal
recruitment, individually or as a group.
a r
B
 What are some relevant principles on illegal recruitment involving economic sabotage?
s
1. The number of persons victimized is determinative of the crime. A conviction for large scale illegal recruitment must be
an
individually or as a group.
l e
based on a finding in each case of illegal recruitment of three (3) or more persons having been recruited, whether
b
2. Failure to prove at least 3 persons recruited makes the crime a case of simple illegal recruitment.
Ro h
3. There is no illegal recruitment in large scale based on several informations filed by only one complainant.
C
4. The number of offenders is not material in illegal recruitment in large scale.
an r
5. Recruitment in large scale or by a syndicate is malum prohibitum and not malum in se.
a
B VS. ESTAFA n
Ch s a
ILLEGAL RECRUITMENT
e
 Can a person be charged and convicted separately for illegal recruitment and estafa involving one and the same act
l
b n
of recruitment?
o
i a
Yes. It is clear that conviction under the Labor Code does not preclude conviction for estafa or other crimes under
R
other laws.
an u r
Some relevant principles:
a
G
 Same evidence to prove illegal recruitment may be used to prove estafa.
h B
 Conviction for both illegal recruitment and estafa, not double jeopardy.
C OF LIABILITY s AGENCY
o l e
NATURE OF LOCAL RECRUITMENT
t Ro b
AND FOREIGN EMPLOYER
i
 What is the nature of the liability between local recruiter and its foreign principal?
l an
e
The nature of their liability is “solidary” or “joint and several” for any and all claims arising out of the employment
contract of OFWs.
r
s a
 Is the solidary liability of corporate officers with the recruitment agency “automatic” in character?
h B
Jo C s
No. In order to hold the officers of the agency solidarily liable, it is required that there must be proof of their culpability
e
1
therefor. Thus, it was held in the 2013 case of Gagui v. Dejero, that while it is true that R.A. 8042 and the Corporation Code
f. b l
provide for solidary liability, this liability must be so stated in the decision sought to be implemented. Absent this express
statement, a corporate officer may not be impleaded and made to personally answer for the liability of the corporation.
o Ro
 What are some relevant principles on the persons liable for illegal recruitment?
r an r
1. Employees of a licensed recruitment agency may be held liable for illegal recruitment as principal by direct participation,
a
P
together with his employer, if it is shown that he actively and consciously participated in illegal recruitment.
h B
2. Good faith and merely following orders of superiors are not valid defenses of an employee.
C s
3. A manager of a recruitment/manning agency is not a mere employee. As such, he receives job applications, interviews
e
l
applicants and informs them of the agency’s requirement of payment of performance or cash bond prior to the applicant’s
b
deployment. As the crewing manager, he was at the forefront of the company’s recruitment activities.
 What is meant by this theory?

THEORY OF IMPUTED KNOWLEDGE
R o
a n
Knowledge of the agent is deemed knowledge of the principal but not the other way around.
The theory of imputed knowledge is a rule that any information material to the transaction, either possessed by the
Ch
agent at the time of the transaction or acquired by him before its completion, is deemed to be the knowledge of the principal, at
least insofar as the transaction is concerned, even though the knowledge, in fact, is not communicated to the principal at all.
2
Sunace International Management Services, Inc. v. NLRC - The High Court here has the opportunity to discuss the
application of the theory of imputed knowledge. The OFW (Divina), a domestic helper in Taiwan, has extended her 12-month
contract, after its expiration, for two (2) more years after which she returned to the Philippines. It was established by evidence
that the extension was without the knowledge of the local recruitment agency, petitioner Sunace. The Court of Appeals, however,
affirmed the Labor Arbiter’s and NLRC’s finding that Sunace knew of and impliedly consented to the extension of Divina’s 2-year
1 G.R. No. 196036, Oct. 23, 2013.

2 G.R. No. 161757, Jan. 25, 2006.
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2015 BAR EXAMS

contract. It went on to state that “It is undisputed that [Sunace] was continually communicating with [Divina’s] foreign employer.”
It thus concluded that “[a]s agent of the foreign principal, ‘petitioner cannot profess ignorance of such extension as obviously, the
act of the principal extending complainant (sic) employment contract necessarily bound it.’”
In finding that the application by the CA of this theory of imputed knowledge was misplaced, the High Court ruled that
this theory ascribes the knowledge of the agent, Sunace, to the principal, employer Xiong, not the other way around. The
knowledge of the principal-foreign employer cannot, therefore, be imputed to its agent, Sunace. There being no substantial proof
that Sunace knew of and consented to be bound under the 2-year employment contract extension, it cannot be said to be privy
thereto. As such, Sunace and its owner cannot be held solidarily liable for any of Divina’s claims arising from the 2-year
employment extension. As the New Civil Code provides: “Contracts take effect only between the parties, their assigns, and heirs,
except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or
by provision of law.”
PRE-TERMINATION OF CONTRACT OF MIGRANT WORKER
 Can an OFW acquire regularity of employment?
No. The prevailing rule is that OFWs are contractual (fixed-term only), not regular, employees. In fact, they can never
attain regularity of employment.
a r
B
 What are some relevant principles?
s
an
1. Indefinite period of employment of OFWs is not valid as it contravenes the explicit provision of the POEA Rules
e
and Regulations on fixed-period employment.
l
b
2. OFWs do not become regular employees by reason of nature of work, that is, that they are made to perform work
Ro h
that is usually necessary and desirable in the usual business or trade of the employer. The exigencies of their work
necessitate that they be employed on a contractual basis. This notwithstanding the fact that they have rendered
an r C
more than twenty (20) years of service.
a
3. Regular employment does not result from the series of re-hiring of OFWs.
Ch e s
B
a n
4. The fixed-period employment of OFWs is not discriminatory against them nor does it favor foreign employers. It is
for the mutual interest of both the seafarer and the employer why the employment status must be contractual only
l
n
or for a certain period of time. Seafarers spend most of their time at sea and understandably, they cannot stay for
b
a long and an indefinite period of time at sea. Limited access to shore society during the employment will have an
o
ia r
adverse impact on the seafarer. The national, cultural and lingual diversity among the crew during the contract of
R
employment is a reality that necessitates the limitation of its period.
an u
5. The expiration of the employment contracts of OFWs marks its ending.
Ba
Ch G
 What is the effect of hiring a seafarer for overseas employment but assigning him to local vessel?
s
1
As held in OSM Shipping Philippines, Inc. v. NLRC, the non-deployment of the ship overseas did not affect the
o l e
validity of the perfected employment contract. After all, the decision to use the vessel for coastwise shipping was made by
t b
petitioner only and did not bear the written conformity of private respondent. A contract cannot be novated by the will of only one
i o
party. The claim of petitioner that it processed the contract of private respondent with the POEA only after he had started working
l
is also without merit. Petitioner cannot use its own misfeasance to defeat his claim.
R
se an r
 What is the effect of non-deployment of OFW to overseas employment?
2
Petitioner-seafarer, in Santiago v. CF Sharp Crew Management, Inc. was not deployed overseas despite the
B a
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signing of a POEA-approved employment contract. One of his contentions is that such failure to deploy was an act designed to
e s
prevent him from attaining the status of a regular employee. The Supreme Court, however, disagreed and ruled that “seafarers
. bl
are considered contractual employees and cannot be considered as regular employees under the Labor Code. Their
f
employment is governed by the contracts they sign every time they are rehired and their employment is terminated when the
Ro
contract expires. The exigencies of their work necessitate that they be employed on a contractual basis.”
o
 What is doctrine of processual presumption?
r an a r
P
“Presumed-identity approach” or “processual presumption” is an International Law doctrine which dictates that where a
B
foreign law is not pleaded or, even if pleaded, is not proved, the presumption is that foreign law is the same as Philippine law.
Ch
Thus, under this situation, Philippine labor laws should apply in determining the issues presented in a case.
 Is due process under Philippine law applicable to termination of employment of OFWs?
es
b l
Yes. In the absence of proof of applicable foreign law, OFWs are entitled to due process in accordance with Philippine
laws.
 Is the Agabon doctrine applicable to OFWs who are dismissed for cause but without due process?
R o
an
Yes. The Agabon doctrine of awarding indemnity in the form of nominal damages in cases of valid termination for just
Ch
or authorized cause but without procedural due process also applies to termination of OFWs.
 Who has the burden of proof to show that the dismissal of the OFW is legal?
Burden of proof devolves on both recruitment agency and its foreign principal.
 Are OFWs entitled to the reliefs under the Labor Code?
No. They are not entitled to such reliefs under Article 279 as reinstatement or separation pay in lieu of reinstatement or
full backwages.
1 G.R. No. 138193, March 5, 2003.

2 G.R. No. 162419, July 10, 2007.
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2015 BAR EXAMS

 What are the reliefs to which OFWs are entitled?

They are entitled to the reliefs provided under Section 10 of R.A. No. 8042, as amended, to wit:
(1) All salaries for the unexpired portion of the contract;
(2) Full reimbursement of placement fees and deductions made with interest at twelve percent (12%) per annum.
In other words, all the reliefs available to an illegally dismissed OFW are always monetary in nature.
1
It must be noted that under the 2009 Serrano doctrine, (Antonio M. Serrano v. Gallant Maritime Services, Inc.,), an
illegally dismissed OFW is now entitled to all the salaries for the entire unexpired portion of their employment contracts,
irrespective of the stipulated term or duration thereof. The underlined phrase in Section 10 below has been declared
unconstitutional in this case:
“In case of termination of overseas employment without just, valid or authorized cause as defined by law or
contract, or any unauthorized deductions from the migrant worker's salary, the worker shall be entitled to the full
reimbursement of his placement fee and the deductions made with interest at twelve percent (12%) per annum, plus his
salaries for the unexpired portion of his employment contract or for three (3) months for every year of the
r
unexpired term, whichever is less.”
Ba
However, R.A. No. 10022 (March 8, 2010), which amended R.A. No. 8042 (Migrant Workers and Overseas Filipinos
Act of 1995), has replicated and re-enacted the same unconstitutional provision exactly as above quoted. The question is:
s
was the unconstitutionality of the above-underlined part of the provision cured by such replication or re-enactment in
an
the amendatory law?
l e
b
The 2014 en banc case of Sameer Overseas Placement Agency, Inc. v. Joy C. Cabiles,2 answered this in the
Ro h
negative. The said provision was thus declared still unconstitutional and null and void despite its replication in R.A. No. .
C
 What are some principles in regard to monetary awards to OFWs?
an r
1. Monetary award to OFW is not in the nature of separation pay or backwages but a form of indemnity.
a
n
2. Only salaries are to be included in the computation of the amount due for the unexpired portion of the contract. Overtime,
B
Ch
holiday and leave pay and allowances are not included. However, this rule on exclusion of allowance does not apply in
case it is encapsulated in the basic salary clause.
e s a
l
3. Entitlement to overtime pay of OFWs. - As far as entitlement to overtime pay is concerned, the correct criterion in
b n
determining whether or not sailors are entitled to overtime pay is not whether they were on board and cannot leave ship
o
ia r
beyond the regular eight (8) working hours a day, but whether they actually rendered service in excess of said number of
R
hours. An OFW is not entitled to overtime pay, even if guaranteed, if he failed to present any evidence to prove that he
u
rendered service in excess of the regular eight (8) working hours a day.
an
4. In case of unauthorized deductions from OFW’s salary, he shall be entitled to the full reimbursement of the deductions
G Ba
made with interest at twelve percent (12%) per annum. This is in addition to the full reimbursement of his placement fee
Ch
with the same interest of twelve percent (12%) per annum plus his salaries for the unexpired portion of his employment
s
contract if he is terminated without just, valid or authorized cause as defined by law or contract.
t o bl e
i
CLAIMS FOR DISABILITY AND DEATH BENEFITS OF OFWs
o
l R
 Which/Who has jurisdiction over an OFW’s claims for disability and death benefits?
se an r
a. The Labor Arbiters, NOT the SSS, have jurisdiction over claims for disability, death and other benefits of OFWs.
b. Labor Arbiters have jurisdiction even if the case is filed by the heirs of the deceased OFW.
B a
Jo Ch s
 Is the Labor Code’s concept of permanent total disability similar to that of OFWs?
e
. bl
Yes. The concept of this kind of disability under Article 192 of the Labor Code is applicable to them as reiterated lately
f
in the 2013 case of Kestrel Shipping Co., Inc. v. Munar. Article 18. Ban on direct-hiring. No
Ro
employer may hire a Filipino worker for
o
 What are the requisites for compensability of injury or illness of seafarers? overseas employment except through the
Boards and entities authorized by the
r an r
1. It should be work-related; and Secretary of Labor. Direct-hiring by
a
P
members of the diplomatic corps,
2. The injury or illness existed during the term of the seafarer’s employment contract.
B
international organizations and such other
Ch
employers as may be allowed by the
s
DIRECT HIRING Secretary of Labor is exempted from this
 What is direct hiring? provision.
l e
“Direct Hiring” refers to the process of directly hiring workers by employers for overseas employment as authorized
by the DOLE Secretary and processed by the POEA, including: GR: Direct-hiring is prohibited
ob
R
Exceptions:
1. Those hired by international organizations;
an
2. Those hired by members of the diplomatic corps;
3. Name hires or workers who are able to secure overseas employment opportunity with an employer without the
Ch
assistance or participation of any agency.
 Does the POEA Administrator or the DOLE Secretary or DOLE Regional Director have the power to issue closure
order?
Yes. If upon preliminary examination or surveillance, the DOLE Secretary, the POEA Administrator or DOLE Regional
Director is satisfied that such danger or exploitation exists, a written order may be issued for the closure of the establishment
being used for illegal recruitment activity.
1 G.R. No. 167614, March 24, 2009.

2 G.R. No. 170139, Aug. 05, 2014. The foreign employer alleged in this case that respondent’s dismissal was due to inefficiency in her work and negligence in her duties.
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2015 BAR EXAMS

 Does the DOLE Secretary have the power to issue warrant of arrest and search and seizure orders?
1
No. Salazar v. Achacoso, declared that the exercise by the DOLE Secretary of his twin powers to issue arrest
warrant and search and seizure orders provided under Article 38[c] of the Labor Code is unconstitutional. Only regular courts
can issue such orders.
REMITTANCE OF FOREIGN EXCHANGE EARNINGS
 Is remittance of foreign exchange earnings by OFWs mandatory?
Yes. It shall be mandatory for all Filipino workers abroad to remit a portion of their foreign exchange earnings to their
families, dependents, and/or beneficiaries in the country in accordance with rules and regulations prescribed by the DOLE
Secretary. It should be made through the Philippine banking system. Article 22. Mandatory remittance of foreign exchange
earnings. It shall be mandatory for all Filipino workers
------------oOo------------ abroad to remit a portion of their foreign exchange earnings
to their families, dependents, and/or beneficiaries in the
country in accordance with rules and regulations prescribed
by the Secretary of Labor.
a r
B
s
an
e
Title II
l
EMPLOYMENT OF NON-RESIDENT ALIENS
Article 40. Employment permit of non-resident aliens. Any alien seeking admission to the Philippines for employment purposes and any domestic or foreign employer who desires to engage an alien for
b
employment in the Philippines shall obtain an employment permit from the Department of Labor.
The employment permit may be issued to a non-resident alien or to the applicant employer after a determination of the non-availability of a person in the Philippines who is competent, able and willing at
Ro h
the time of application to perform the services for which the alien is desired.
For an enterprise registered in preferred areas of investments, said employment permit may be issued upon recommendation of the government agency charged with the supervision of said registered
C
enterprise.
an r
Article 41. Prohibition against transfer of employment.
After the issuance of an employment permit, the alien shall not transfer to another job or change his employer without prior approval of the Secretary of Labor.
a
Any non-resident alien who shall take up employment in violation of the provision of this Title and its implementing rules and regulations shall be punished in accordance with the provisions of Articles
B n
289 and 290 of the Labor Code.
Ch
In addition, the alien worker shall be subject to deportation after service of his sentence.
s a
Article 42. Submission of list. Any employer employing non-resident foreign nationals on the effective date of this Code shall submit a list of such nationals to the Secretary of Labor within thirty (30) days
after such date indicating their names, citizenship, foreign and local addresses, nature of employment and status of stay in the country. The Secretary of Labor shall then determine if they are entitled to
e
an employment permit.
l
b n
R o
u ia r
an Ba
Ch G s
t o bl e
l i R o
se Ch
an B ar
. Jo bl
e s
o f Ro
P r an B a r
Ch es
b l
R o
an
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1 G.R. No. 81510, March 14, 1990.

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2015 BAR EXAMS

BOOK THREE
Prof.— CONDITIONS
Joselito OF EMPLOYMENT
Guianan Chan
TOPIC NO. 3
Article 82. Coverage. The provisions of this Title shall apply to employees in
all establishments and undertakings whether for profit or not, but not to
government employees, managerial employees, field personnel, members of
LABOR STANDARDS
the family of the employer who are dependent on him for support, domestic
helpers, persons in the personal service of another, and workers who are
paid by results as determined by the Secretary of Labor in appropriate
regulations.
A.
As used herein, "managerial employees" refer to those whose primary duty HOURS OF WORK
consists of the management of the establishment in which they are
employed or of a department or subdivision thereof, and to other officers or
members of the managerial staff.
"Field personnel" shall refer to non-agricultural employees who regularly
1.
perform their duties away from the principal place of business or branch COVERAGE/EXCLUSIONS
office of the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty. (Article 82, Labor Code)
 Who are covered by the labor standards provisions of the Labor Code?
Employees in all establishments, whether operated for profit or not, are covered by the law on labor standards.
 Who are excluded?
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The following are excluded from the coverage of the law on labor standards:
a. Government employees; B
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b. Managerial employees;
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c. Other officers or members of a managerial staff;
d.
b
Domestic workers or kasambahay and persons in the personal service of another;
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e. Workers paid by results; Article 83. Normal hours of work. The normal hours of work of any employee
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f. Non-agricultural field personnel; and shall not exceed eight (8) hours a day.
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Health personnel in cities and municipalities with a population of at least one
g. Members of the family of the employer.
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million (1,000,000) or in hospitals and clinics with a bed capacity of at least one
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hundred (100) shall hold regular office hours for eight (8) hours a day, for five
2. (5) days a week, exclusive of time for meals, except where the exigencies of
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the service require that such personnel work for six (6) days or forty-eight (48)
NORMAL HOURS OF WORK hours, in which case, they shall be entitled to an additional compensation of at
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least thirty percent (30%) of their regular wage for work on the sixth day. For
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purposes of this Article, "health personnel" shall include resident physicians,
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nurses, nutritionists, dietitians, pharmacists, social workers, laboratory
 What is the total normal hours of work per day? technicians, paramedical technicians, psychologists, midwives, attendants and
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all other hospital or clinic personnel.
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Eight (8) hours daily.
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Article 84. Hours worked. Hours worked shall include (a) all time during which
 What is overtime work? an employee is required to be on duty or to be at a prescribed workplace; and
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(b) all time during which an employee is suffered or permitted to work.
Rest periods of short duration during working hours shall be counted as hours
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Any work in excess of eight (8) hours is considered overtime work. worked.
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 May normal working hours be reduced?
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Yes, provided that no corresponding reduction is made on the employee’s wage or salary equivalent to an 8-hour work
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day. In instances where the number of hours required by the nature of work is less than 8 hours, such number of hours should be
regarded as the employee’s full working day.
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 What are flexible working hours?
R
se an r
“Flexible work arrangements” refer to alternative arrangements or schedules other than the traditional or standard work
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hours, workdays and workweek. The effectivity and implementation of any of the flexible work arrangements should be
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temporary in nature.
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Under R.A. No. 8972, otherwise known as “The Solo Parents’ Welfare Act of 2000,” solo parents are allowed to work
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.
on a flexible schedule. The phrase “flexible work schedule” is defined in the same law as the right granted to a solo parent
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employee to vary his/her arrival and departure time without affecting the core work hours as defined by the employer.
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 What is compressed work week?
COMPRESSED WORK WEEK
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“Compressed Workweek” or “CWW” refers to a situation where the normal workweek is reduced to less than six (6)
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days but the total number of work-hours of 48 hours per week remains. The normal workday is increased to more than eight (8)
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hours but not to exceed twelve (12) hours, without corresponding overtime premium. This concept can be adjusted accordingly in
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cases where the normal workweek of the firm is five (5) days.
 What are the conditions for its validity?
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The CWW scheme is undertaken as a result of an express and voluntary agreement of majority of the covered
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employees or their duly authorized representatives.
 How should compensation be made under a valid CWW?
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Unless there is a more favorable practice existing in the firm, work beyond eight (8) hours will not be compensable
by overtime premium provided the total number of hours worked per day shall not exceed twelve (12) hours. In any
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case, any work performed beyond twelve (12) hours a day or forty-eight (48) hours a week shall be subject to overtime pay.
Article 85. Meal periods. Subject to such regulations as the
MEAL BREAK Secretary of Labor may prescribe, it shall be the duty of
(Article 85, Labor Code) every employer to give his employees not less than sixty
(60) minutes time-off for their regular meals.
 What is the rule on time-off for regular meal?
Every employer is required to give his employees, regardless of sex, not less than one (1) hour (or 60 minutes) time-off
for regular meals.
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2015 BAR EXAMS

 Is meal break compensable?

Being time-off, it is not compensable hours worked. In this case, the employee is free to do anything he wants, except
to work. If he is required, however, to work while eating, he should be compensated therefor.
WAITING TIME
(Article 84, Labor Code)
• What is covered by compensable working hours?
The following shall be considered as compensable hours worked:
a. All time during which an employee is required to be on duty or to be at the employer’s premises or to be at a
prescribed workplace; and
b. All time during which an employee is suffered or permitted to work.
• When is waiting time compensable?
Waiting time spent by an employee shall be considered as working time if waiting is an integral part of his work or the
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employee is required or engaged by the employer to wait. Time spent waiting for work is compensable if it is spent “primarily for
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the benefit of the employer and [its] business.”
B(ArticleWORK,
Article 87. Overtime work. Work may be performed beyond eight (8)
hours a day provided that the employee is paid for the overtime work,
sOVERTIME OVERTIME PAY
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an additional compensation equivalent to his regular wage plus at
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least twenty-five percent (25%) thereof. Work performed beyond eight
87, Labor Code)
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hours on a holiday or rest day shall be paid an additional
compensation equivalent to the rate of the first eight hours on a
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• What are some basic principles on overtime work? holiday or rest day plus at least thirty percent (30%) thereof.
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1. Work rendered after normal eight (8) hours of work is called “overtime work.”
2. In computing overtime work, "regular wage" or "basic salary" means "cash" wage only without deduction for
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facilities provided by the employer.
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3. "Premium pay" means the additional compensation required by law for work performed within eight (8) hours on
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non-working days, such as regular holidays, special holidays and rest days.
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4. "Overtime pay" means the additional compensation for work performed beyond eight (8) hours.
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5. Illustrations on how overtime is computed:
Article 90. Computation of
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a. For overtime work performed on an ordinary day, the overtime pay is plus 25% of the basic hourly rate.
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additional compensation. For
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b. For overtime work performed on a rest day or on a special day, the overtime pay is plus 30% of the
purposes of computing overtime
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and other additional remuneration
as required by this Chapter, the basic hourly rate which includes 30% additional compensation as provided in Article 93 [a] of the Labor
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"regular wage" of an employee shall Code.
include the cash wage only, without
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deduction on account of facilities c. For overtime work performed on a rest day which falls on a special day, the overtime pay is plus 30%
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provided by the employer.
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of the basic hourly rate which includes 50% additional compensation as provided in Article 93 [c] of the
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Labor Code.
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d. For overtime work performed on a regular holiday, the overtime pay is plus 30% of the basic hourly
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rate which includes 100% additional compensation as provided in Article 94 [b] of the Labor Code.
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e. For overtime work performed on a rest day which falls on a regular holiday, the overtime pay is plus
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30% of the basic hourly rate which includes 160% additional compensation.
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• What is the distinction between PREMIUM PAY and OVERTIME PAY?
“Premium pay” refers to the additional compensation required by law for work performed within eight (8) hours on
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non-working days, such as rest days and regular and special holidays.
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“Overtime pay” refers to the additional compensation for work performed beyond eight (8) hours a day. Every
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employee who is entitled to premium pay is likewise entitled to the benefit of overtime pay.
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What is built-in overtime pay? bl
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•
r o In case the employment contract stipulates that the compensation includes built-in overtime pay and the same is duly
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approved by the DOLE, the non-payment by the employer of any overtime pay for overtime work is justified and valid.
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What is emergency overtime work? (Article 89, Labor Code).
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•
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a. General rule. Article 89. Emergency overtime work.
The general rule remains that no employee may be compelled to render overtime work against his will.
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b. Exceptions when employee may be compelled to render overtime work:
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1. When the country is at war or when any other national or local emergency has been declared by the National
Assembly or the Chief Executive;
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2. When overtime work is necessary to prevent loss of life or property or in case of imminent danger to public safety
due to actual or impending emergency in the locality caused by serious accident, fire, floods, typhoons,
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earthquake, epidemic or other disasters or calamities;
3. When there is urgent work to be performed on machines, installations or equipment, or in order to avoid serious
loss or damage to the employer or some other causes of similar nature;
4. When the work is necessary to prevent loss or damage to perishable goods;
5. When the completion or continuation of work started before the 8th hour is necessary to prevent serious
obstruction or prejudice to the business or operations of the employer; and
6. When overtime work is necessary to avail of favorable weather or environmental conditions where performance or
quality of work is dependent thereon.
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2015 BAR EXAMS

 May an employee validly refuse to render overtime work under any of the afore-said circumstances?
No, When an employee refuses to render emergency overtime work under any of the foregoing conditions, he may be
dismissed on the ground of insubordination or willful disobedience of the lawful order of the employer.
• Can overtime pay be waived?

NO. The right to claim overtime pay is not subject to a waiver. Such right is governed by law and not merely by the
agreement of the parties.
NIGHT WORK (R.A. NO. 10151),

NIGHT SHIFT DIFFERENTIAL (ARTICLE 86, LABOR CODE)
• What is the new law on night work? Article 86. Night shift differential. Every employee shall be paid a night shift
differential of not less than ten percent (10%) of his regular wage for each hour of
R.A. No. 10151 [JUNE 21, 2011]. work performed between ten o'clock in the evening and six o'clock in the morning.
a. Significance of the law.
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R.A. No. 10151 has repealed Article 130 [Nightwork Prohibition] and Article 131 [Exceptions] of the Labor Code and
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accordingly renumbered the same articles. Additionally, it has inserted a new Chapter V of Title III of Book III of the Labor Code
an
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entitled “Employment of Night Workers” which addresses the issue on nightwork of all employees, including women workers.
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b. Coverage of the law. l
Chapter V covers newly renumbered Articles 154 up to 161 of the Labor Code.
Ro h
The law on nightwork applies not only to women but to all persons, who shall be employed or permitted or suffered
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to work at night, except those employed in agriculture, stock raising, fishing, maritime transport and inland navigation, during a
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period of not less than seven (7) consecutive hours, including the interval from midnight to five o'clock in the morning,
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to be determined by the DOLE Secretary, after consulting the workers’ representatives/labor organizations and employers.
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c. Night worker, meaning.
s a
"Night worker" means any employed person whose work covers the period from 10 o'clock in the evening to 6
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o'clock the following morning provided that the worker performs no less than seven (7) consecutive hours of work.
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NIGHT SHIFT DIFFERENTIAL PAY
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• How is it reckoned and computed?
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Night shift differential is equivalent to 10% of employee's regular wage for each hour of work performed between 10:00
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p.m. and 6:00 a.m. of the following day.
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• What is the distinction between night shift differential pay and overtime pay?
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When the work of an employee falls at night time, the receipt of overtime pay shall not preclude the right to receive
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night differential pay. The reason is the payment of the night differential pay is for the work done during the night; while the
l
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payment of the overtime pay is for work in excess of the regular eight (8) working hours.
•
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How is Night Shift Differential Pay computed?
R o
se
1. Where night shift (10 p.m. to 6 a.m.) work is regular work.
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a. On an ordinary day: Plus 10% of the basic hourly rate or a total of 110% of the basic hourly rate.
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Jo Ch
b. On a rest day, special day or regular holiday: Plus 10% of the regular hourly rate on a rest day, special
day or regular holiday or a total of 110% of the regular hourly rate.
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f. 2. Where night shift (10 p.m. to 6 a.m.) work is overtime work.
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a. On an ordinary day: Plus 10% of the overtime hourly rate on an ordinary day or a total of 110% of the
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overtime hourly rate on an ordinary day.
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b. On a rest day or special day or regular holiday: Plus 10% of the overtime hourly rate on a rest day or
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special day or regular holiday.
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3. For overtime work in the night shift. Since overtime work is not usually eight (8) hours, the compensation for
overtime night shift work is also computed on the basis of the hourly rate.
es
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a. On an ordinary day. Plus 10% of 125% of basic hourly rate or a total of 110% of 125% of basic hourly rate.
b
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b. On a rest day or special day or regular holiday. Plus 10% of 130% of regular hourly rate on said days or a
total of 110% of 130% of the applicable regular hourly rate.
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PART-TIME WORK
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• What is part-time work?
“Part-time work” is “a single, regular or voluntary form of employment with hours of work substantially shorter than
those considered as normal in the establishment.” A “part-time worker” is an employed person whose normal hours of work are
less than those of comparable full-time workers.
Part-time work may take different forms depending on the agreed hours of work in a day, the days of work in a week or
other reference periods. In the Philippines, however, the two most common and acceptable forms are four (4) hours work
per day and weekend work or two (2) full days per week.
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2015 BAR EXAMS

CONTRACT FOR PIECE WORK

(SEE CIVIL CODE)
• What is contract for piece work under the Civil Code?
By the contract for a piece of work, the contractor binds himself to execute a piece of work for the employer, in
consideration of a certain price or compensation. The contractor may either employ only his labor or skill, or also furnish the
material.
B.
WAGES
WAGE VS. SALARY

• What is the basic distinction between wage and salary?
The term “wage” is used to characterize the compensation paid for manual skilled or unskilled labor. “Salary,” on the
other hand, is used to describe the compensation for higher or superior level of employment.
•
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What is the distinction in respect to execution, attachment or garnishment?
B
In cases of execution, attachment or garnishment of the compensation of an employee received from work issued
s
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by the court to satisfy a judicially-determined obligation, a distinction should be made whether such compensation is considered
l e
“wage” or “salary.” Under Article 1708 of the Civil Code, if considered a “wage,” the employee’s compensation shall not be
b
subject to execution or attachment or garnishment, except for debts incurred for food, shelter, clothing and medical attendance.
Ro h
If deemed a “salary,” such compensation is not exempt from execution or attachment or garnishment. Thus, the salary,
commission and other remuneration received by a managerial employee (as distinguished from an ordinary worker or laborer)
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cannot be considered wages. Salary is understood to relate to a position or office, or the compensation given for official or other
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service; while wage is the compensation for labor.
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Ch
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MINIMUM WAGE DEFINED
• What are the attributes of wage?
e s a
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n
“Wage” has the following attributes:
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1. It is the remuneration or earnings, however designated, for work done or to be done or for services rendered or to be
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rendered;
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2. It is capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece or commission
a
basis, or other method of calculating the same;
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3. It is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be
C h
done or for services rendered or to be rendered; and
s
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4. It includes the fair and reasonable value, as determined by the DOLE Secretary, of board, lodging, or other facilities
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customarily furnished by the employer to the employee. “Fair and reasonable value” shall not include any profit to the
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employer or to any person affiliated with the employer.
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• What is basic wage?
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“Basic wage” means all the remuneration or earnings paid by an employer to a worker for services rendered on
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normal working days and hours but does not include cost-of-living allowances, profit-sharing payments, premium payments,
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13th month pay or other monetary benefits which are not considered as part of or integrated into the regular salary of the workers.
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Jo C s
Further, as held in Honda Phils., Inc. v. Samahan ng Malayang Manggagawa sa Honda, the following should be
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.
excluded from the computation of “basic salary,” to wit: payments for sick, vacation and maternity leaves, night
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differentials, regular holiday pay and premiums for work done on rest days and special holidays.
Ro
What is minimum wage?
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•
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The minimum wage rates prescribed by law shall be the basic cash wages without deduction therefrom of whatever
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benefits, supplements or allowances which the employees enjoy free of charge aside from the basic pay.
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P• What is statutory minimum wage?
C h s
B
The term “statutory minimum wage” refers simply to the lowest basic wage rate fixed by law that an employer can
pay his workers.
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• What is regional minimum wage rate?
ob
The term “regional minimum wage rates” refers to the lowest basic wage rates that an employer can pay his
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workers, as fixed by the Regional Tripartite Wages and Productivity Boards (RTWPBs), and which shall not be lower than
the applicable statutory minimum wage rates.
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• What are included/excluded in the term “wage rate”?
The term "wage rates" includes cost-of-living allowances as fixed by the RTWPB, but excludes other wage-related
benefits such as overtime pay, bonuses, night shift differential pay, holiday pay, premium pay, 13 th month pay, premium pay,
leave benefits, among others.
• Can COLA be integrated into the minimum wage?
Yes. The cost-of-living allowance (COLA) may be ordered integrated into the minimum wage by the Regional Tripartite
Wages and Productivity Board (“RTWPB” or “Regional Board”).
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2015 BAR EXAMS

• What is COLA?
COLA is not in the nature of an allowance intended to reimburse expenses incurred by employees in the performance
of their official functions. It is not payment in consideration of the fulfillment of official duty. As defined, “cost of living” refers to
“the level of prices relating to a range of everyday items” or “the cost of purchasing the goods and services which are included in
an accepted standard level of consumption.” Based on this premise, COLA is a benefit intended to cover increases in the cost of
living.
• What is the “NO WORK, NO PAY” principle?
The “no work, no pay” or “fair day’s wage for fair day’s labor” means that if the worker does not work, he is
generally not entitled to any wage or pay. The exception is when it was the employer who unduly prevented him from working
despite his ableness, willingness and readiness to work; or in cases where he is illegally locked out or illegally suspended or
illegally dismissed, or otherwise illegally prevented from working, in which event, he should be entitled to his wage.
MINIMUM WAGE SETTING
• What is a Wage Order?
r
The term “Wage Order” refers to the order promulgated by the Regional Board pursuant to its wage fixing authority.
When is it proper to issue a Wage Order?
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Whenever conditions in the region so warrant, the Regional Board shall investigate and study all pertinent facts and
s
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based on the prescribed standards and criteria, shall proceed to determine whether a Wage Order should be issued. Any such
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Wage Order shall take effect after fifteen (15) days from its complete publication in at least one (1) newspaper of general
b
circulation in the region.
Ro h
• What are the standards/criteria for minimum wage fixing?
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In the determination of regional minimum wages, the Regional Board shall, among other relevant factors, consider the
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following:
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(1) Needs of workers and their families
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2)
Demand for living wages;
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Wage adjustment vis-à-vis the consumer price index;
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3) Cost of living and changes therein;
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4) Needs of workers and their families;
5)
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Improvements in standards of living.
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(2) Capacity to pay
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1) Fair return on capital invested and capacity to pay of employers;
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2) Productivity.
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(3) Comparable wages and incomes
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1) Prevailing wage levels.
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(4) Requirements of economic and social development
R o
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1) Need to induce industries to invest in the countryside;
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2) Effects on employment generation and family income;
3) Equitable distribution of income and wealth along the imperatives of economic and social development.
B a
Jo Ch s
• What are the methods of fixing the minimum wage rates?
e
. bl
There are two (2) methods, to wit:
f
1. “Floor-Wage” method which involves the fixing of a determinate amount to be added to the prevailing statutory
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minimum wage rates. This was applied in earlier wage orders; and
2. “Salary-Cap” or “Salary-Ceiling” method where the wage adjustment is to be applied to employees receiving a
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certain denominated salary ceiling. In other words, workers already being paid more than the existing minimum
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wage (up to a certain amount stated in the Wage Order) are also to be given a wage increase.
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The “Salary-Cap” or “Salary-Ceiling” method is the preferred mode.
The distinction between the two (2) methods is best shown by way of an illustration. Under the “Floor Wage Method,” it
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would be sufficient if the Wage Order simply set P15.00 as the amount to be added to the prevailing statutory minimum wage
b
rates; while in the “Salary-Ceiling Method,” it would be sufficient if the Wage Order states a specific salary, such as P250.00, and
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only those earning below it shall be entitled to the wage increase.
MINIMUM WAGE OF WORKERS PAID BY RESULTS
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• What are the minimum wage rates of workers paid by results?
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Ch
According to Article 124 of the Labor Code:
“All workers paid by results, including those who are paid on piecework, takay, pakyaw or task basis, shall
receive not less than the prescribed wage rates per eight (8) hours of work a day, or a proportion thereof for
working less than eight (8) hours.”
• Who are workers paid by results?
They are workers who are engaged on pakyao, piecework, task and other non-time work. They are so called because
they are paid not on the basis of the time spent on their work but according to the quantity, quality or kind of job and the
consequent results thereof.
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2015 BAR EXAMS

• What are the categories of workers paid by results?

Workers paid by results may be classified into:
a. Supervised workers; and
b. Unsupervised workers.
As the term clearly connotes, supervised workers are those whose manner of work is under the control of the
employer; while unsupervised workers are those whose work is controlled more in the results than in the manner or method
of performing it.
The law does not make any categorical differentiation among the workers paid by results. Thus, the workers may be
on pakyao (sometimes spelled “pakyaw”), takay or piece-rate or output basis. All of them are similar in character in that they are
all paid on the basis of the results of their work. When the law does not distinguish, we should not distinguish.
WAGE RATE OF APPRENTICES AND LEARNERS
• What is the wage rate of apprentices and learners?
The wage rate of a learner or an apprentice is set at seventy-five percent (75%) of the statutory minimum wage.
a r
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WAGE RATE OF PERSONS WITH DISABILITY (PWDs)
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• What is the wage rate of PWD?
l e
Under R.A. No. 7277, the wage rate of PWDs had been increased to and fixed at 100% of the applicable minimum
wage.
b
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COMMISSIONS
C h
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• What is “commission”?
a
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“Commission” is the recompense, compensation or reward of an employee, agent, salesman, executor, trustee,
B
Ch
receiver, factor, broker or bailee, when the same is calculated as a percentage on the amount of his transactions or on the
profit of the principal.
e s a
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n
• Is commission part of wage?
b
o
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Commission may or may not be considered part of wage/salary depending on the peculiar circumstances of a case
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and on the purpose for which the determination is being made. For instance, the rule on the inclusion of commissions for
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purposes of computing the separation pay may essentially differ from the inclusionary rule thereof for purposes of computing the
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13th month pay.
•
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Is there a law which mandates the payment of commission?
G s
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1
None. According to Lagatic v. NLRC, there is no law which requires employers to pay commissions.
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t b
• Is there a standard formula to compute commission?
l i R o
None. There is no law which prescribes a method for computing commission. The determination of the amount of
commissions is the result of collective bargaining negotiations, individual employment contracts or established employer practice.
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DEDUCTIONS FROM WAGES
B
Jo Ch
May employer deduct from wage of employees?
s
•
e
.
The general rule is that an employer, by himself or through his representative, is prohibited from making any
f bl
deductions from the wages of his employees. The employer is not allowed to make unnecessary deductions without the
knowledge or authorization of the employees.
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• Are there exceptions to this rule?
P r Yes.
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Ch
(a) In cases where the worker is insured with his consent by the employer, and the deduction is to recompense the
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employer for the amount paid by him as premium on the insurance;
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(b) For union dues, in cases where the right of the worker or his union to check-off has been recognized by the
employer or authorized in writing by the individual worker concerned; and
(c) In cases where the employer is authorized by law or regulations issued by the DOLE Secretary.
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(d) Deductions for loss or damage under Article 114 of the Labor Code;
R o
(e) Deductions made for agency fees from non-union members who accept the benefits under the CBA negotiated
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by the bargaining union. This form of deduction does not require the written authorization of the non-bargaining
union member concerned;
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(f) Deductions for value of meal and other facilities;
(g) Deductions for premiums for SSS, PhilHealth, employees’ compensation and Pag-IBIG;
(h) Withholding tax mandated under the National Internal Revenue Code (NIRC);
(i) Withholding of wages because of the employee’s debt to the employer which is already due;
1 G.R. No. 121004, Jan. 28, 1998.

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2015 BAR EXAMS

(j) Deductions made pursuant to a court judgment against the worker under circumstances where the wages may
be the subject of attachment or execution but only for debts incurred for food, clothing, shelter and medical
attendance;
(k) When deductions from wages are ordered by the court;
NON-DIMINUTION OF BENEFITS
• What is the applicability of the non-diminution rule in Article 100 of the Labor Code?
Albeit Article 100 is clear that the principle of non-elimination and non-diminution of benefits apply only to the benefits
being enjoyed “at the time of the promulgation” of the Labor Code, the Supreme Court has consistently cited Article 100 as being
applicable even to benefits granted after said promulgation. It has, in fact, been treated as the legal anchor for the declaration of
the invalidity of so many acts of employers deemed to have eliminated or diminished the benefits of employees.
The 2014 case of Wesleyan University-Philippines v. Wesleyan University-Philippines Faculty and Staff
1
Association, succinctly pointed out that the Non-Diminution Rule found in Article 100 of the Labor Code explicitly prohibits
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employers from eliminating or reducing the benefits received by their employees. This rule, however, applies only if the benefit is
a
based on any of the following:
(1) An express policy;
B
s
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(2) A written contract; or
(3) A company practice.
l e
b
There is not much controversy if the benefit involved is provided for under Nos. 1 and 2 above. Thus, if it is expressly
Ro h
laid down in a written policy unilaterally promulgated by the employer, the employer is duty-bound to adhere and comply by its
own policy. It cannot be allowed to renege from its commitment as expressed in the policy.
an r C
If the benefit is granted under a written contract such as an employment contract or a collective bargaining agreement
a
(CBA), the employer is likewise under legal compulsion to so comply therewith.
Ch
B n
On No. 3 above, please see discussion below.
e s a
l
COMPANY PRACTICE
• What is company practice?
b n
o
ia r
Company practice is a custom or habit shown by an employer’s repeated, habitual customary or succession of acts of
R
similar kind by reason of which, it gains the status of a company policy that can no longer be disturbed or withdrawn.
an u
To ripen into a company practice that is demandable as a matter of right, the giving of the benefit should not be by
Ba
G
reason of a strict legal or contractual obligation but by reason of an act of liberality on the part of the employer.
Ch s
• What are the criteria that may be used to determine existence of company practice?
o l e
Since there is no hard and fast rule which may be used and applied in determining whether a certain act of the
t b
employer may be considered as having ripened into a practice, the following criteria may be used to determine whether an act
i o
has ripened into a company practice:
l R
(1) The act of the employer has been done for a considerable period of time;
se an r
(2) The act should be done consistently and intentionally; and
a
(3) The act should not be a product of erroneous interpretation or construction of a doubtful or difficult question of law
B
Jo Ch
or provision in the CBA.
(See the 2013 case of Vergara, Jr. v. Coca-Cola Bottlers Philippines, Inc.2)
e s
f. 1. THE ACT OF THE EMPLOYER HAS BEEN DONE FOR A CONSIDERABLE PERIOD OF TIME.
bl
Ro
3
If done only once as in the case of Philippine Appliance Corporation (Philacor) v. CA, where the CBA signing
o
bonus was granted only once during the 1997 CBA negotiation, the same cannot be considered as having ripened into a
r
company practice.
an a r
P
In the following cases, the act of the employer was declared company practice because of the considerable period of
B
Ch
time it has been practiced:
4
(a) Davao Fruits Corporation v. Associated Labor Unions. - The act of the company of freely and continuously
es
including in the computation of the 13th month pay, items that were expressly excluded by law has lasted for six
(6) years, hence, was considered indicative of company practice.
b l
(b) Sevilla Trading Company v. A. V. A. Semana.5 - The act of including non-basic benefits such as paid leaves for
R o
unused sick leave and vacation leave in the computation of the employees’ 13 th month pay for at least two (2)
an
years was considered a company practice.
Ch
6
(c) The 2010 case of Central Azucarera de Tarlac v. Central Azucarera de Tarlac Labor Union-NLU, also ruled
as company practice the act of petitioner of granting for thirty (30) years, its workers the mandatory 13 th month
pay computed in accordance with the following formula: Total Basic Annual Salary divided by twelve (12)
and Including in the computation of the Total Basic Annual Salary the following: basic monthly salary; first eight
1 G.R. No. 181806, March 12, 2014.

2 G.R. No. 176985, April 1, 2013; See also Supreme Steel Corporation v. Nagkakaisang Manggagawa ng Supreme Independent Union (NMS-IND-APL), G.R. No.
185556, March 28, 2011, 646 SCRA 501, 527; TSPIC Corporation v. TSPIC Employees Union (FFW), G.R. No. 163419, Feb. 13, 2008, 545 SCRA 215, 226.
3 G.R. No. 149434, June 3, 2004.
4 G.R. No. 85073, Aug. 24, 1993, 225 SCRA 562.
5 G.R. No. 152456, April 28, 2004, 438 SCRA 239.
6 G.R. No. 188949, July 26, 2010.
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2015 BAR EXAMS

(8) hours overtime pay on Sunday and legal/special holiday; night premium pay; and vacation and sick leaves for
each year.
2. THE ACT SHOULD BE DONE CONSISTENTLY AND INTENTIONALLY.

The following cases may be cited to illustrate this principle:
1
(a) Tiangco v. Leogardo, Jr., where the employer has consistently been granting fixed monthly emergency
allowance to the employees from November, 1976 but discontinued this practice effective February, 1980 insofar
as non-working days are concerned based on the principle of “no work, no pay.” The Supreme Court ruled that the
discontinuance of said benefit contravened Article 100 of the Labor Code which prohibits the diminution of existing
benefits.
3. THE ACT SHOULD NOT BE A PRODUCT OF ERRONEOUS INTERPRETATION OR CONSTRUCTION OF A
DOUBTFUL OR DIFFICULT QUESTION OF LAW OR PROVISION IN THE CBA.
The general rule is that if it is a past error that is being corrected, no vested right may be said to have arisen therefrom
nor any diminution of benefit may have resulted by virtue of the correction thereof. The error, however, must be corrected
a
The following cases would illuminate this principle: r
immediately after its discovery; otherwise, the rule on non-diminution of benefits would still apply.
B 2
(a) Globe Mackay Cable and Radio Corporation v. NLRC, where the Supreme Court ruled on the proper
s
an
e
computation of the cost-of-living allowance (COLA) for monthly-paid employees. Petitioner corporation, pursuant
l
to Wage Order No. 6 (effective October 30, 1984), increased the COLA of its monthly-paid employees by
b
multiplying the P3.00 daily COLA by 22 days which is the number of working days in the company. The union
Ro h
disagreed with the computation, claiming that the daily COLA rate of P3.00 should be multiplied by 30 days which
has been the practice of the company for several years. The Supreme Court, however, upheld the contention of
C
the petitioner corporation. It held that the grant by the employer of benefits through an erroneous application of
an ar
the law due to absence of clear administrative guidelines is not considered a voluntary act which cannot be
B n
unilaterally discontinued.
Ch
3
(b) TSPIC Corp. v. TSPIC Employees Union [FFW], where the Supreme Court reiterated the rule enunciated in
e s a
Globe-Mackay, that an erroneously granted benefit may be withdrawn without violating the prohibition against
l
n
non-diminution of benefits. No vested right accrued to individual respondents when TSPIC corrected its error by
b
crediting the salary increase for the year 2001 against the salary increase granted under Wage Order No. 8, all in
o
ia r
accordance with the CBA. Hence, any amount given to the employees in excess of what they were entitled to, as
R
computed above, may be legally deducted by TSPIC from the employees’ salaries.
an u
But if the error does not proceed from the interpretation or construction of a law or a provision in the CBA, the same
Ba
may ripen into a company practice.
Example:
Ch G s
o e
4
(a) Hinatuan Mining Corporation and/or the Manager v. NLRC, where the act of the employer in granting
l
separation pay to resigning employees, despite the fact that the Labor Code does not grant it, was considered an
established employer practice.
i t o b
l R
BONUS
se an r
• What is the rule on its demandability and enforceability?
Bonus, as a general rule, is an amount granted and paid ex gratia to the employee.
B a
Jo Ch s
It cannot be forced upon the employer who may not be obliged to assume the onerous burden of granting bonuses or
e
other benefits aside from the employees’ basic salaries or wages. If there is no profit, there should be no bonus. If profit is
. bl
reduced, bonus should likewise be reduced, absent any agreement making such bonus part of the compensation of the
f
employees.
o Ro
• When is bonus demandable and enforceable?
r an r
It becomes demandable and enforceable:
a
P
(1) If it has ripened into a company practice;
B
Ch
(2) If it is granted as an additional compensation which the employer agreed to give without any condition such as
(3) When considered as part of the compensation and therefore demandable and enforceable, the amount is
es
success of business or more efficient or more productive operation, hence, it is deemed part of wage or salary.
enforceable.
b l
usually fixed. If the amount thereof is dependent upon the realization of profits, the bonus is not demandable and
FACILITIES VS. SUPPLEMENTS

R o
an
• What are facilities?
The term “facilities” includes articles or services for the benefit of the employee or his family but does not include
Ch
tools of the trade or articles or services primarily for the benefit of the employer or necessary to the conduct of the employer’s
business. They are items of expense necessary for the laborer’s and his family’s existence and subsistence which form part of
the wage and when furnished by the employer, are deductible therefrom, since if they are not so furnished, the laborer would
spend and pay for them just the same.
1 G.R. No. L-57636, May 16, 1983, 122 SCRA 267; 207 Phil. 2235.
2 G.R. No. 74156, June 29, 1988, 163 SCRA 71.
3 G.R. No. 163419, Feb. 13, 2008.
4 G.R. No. 117394, Feb. 21, 1997.
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2015 BAR EXAMS

• What are supplements?

The term “supplements” means extra remuneration or special privileges or benefits given to or received by the
laborers over and above their ordinary earnings or wages.
• What are the distinctions between facilities and supplements?
The benefit or privilege given to the employee which constitutes an extra remuneration over and above his basic or
ordinary earning or wage is supplement; and when said benefit or privilege is made part of the laborer’s basic wage, it is a
facility. The criterion is not so much with the kind of the benefit or item (food, lodging, bonus or sick leave) given but its purpose.
Thus, free meals supplied by the ship operator to crew members, out of necessity, cannot be considered as facilities but
supplements which could not be reduced having been given not as part of wages but as a necessary matter in the maintenance
of the health and efficiency of the crew during the voyage.
• What is the rule on deductibility of facilities and supplements?
Facilities are deductible from wage but not supplements.
r
WAGE DISTORTION/RECTIFICATION
• What is wage distortion?
Ba
s
“Wage distortion” contemplates a situation where an increase in prescribed wage rates results in either of the following:
an
l e
1. Elimination of the quantitative differences in the rates of wages or salaries; or
b
2. Severe contraction of intentional quantitative differences in wage or salary rates between and among employee
Ro h
groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on
the following criteria:
an r C
a. Skills;
a
b. Length of service; or
Ch
B n
c. Other logical bases of differentiation.
s a
Wage distortion presupposes a classification of positions and ranking of these positions at various levels. One
e
visualizes a hierarchy of positions with corresponding ranks basically in terms of wages and other emoluments. Where a
l
b n
significant change occurs at the lowest level of positions in terms of basic wage without a corresponding change in the other
ia r
level in the hierarchy of positions, negating as a result thereof the distinction between one level of position from the next higher
o
level, and resulting in a parity between the lowest level and the next higher level or rank, between new entrants and old hires,
R
u
there exists a wage distortion. xxx. The concept of wage distortion assumes an existing grouping or classification of employees
an
which establishes distinctions among such employees on some relevant or legitimate basis. This classification is reflected in a
G Ba
differing wage rate for each of the existing classes of employees.
Ch s
• What are the elements of wage distortion?
o l e
The four (4) elements of wage distortion are as follows:
i t b
(1) An existing hierarchy of positions with corresponding salary rates;
o
l
(2) A significant change in the salary rate of a lower pay class without a concomitant increase in the salary rate of
a higher one;
R
se an r
(3) The elimination of the distinction between the two levels; and
a
(4) The existence of the distortion in the same region of the country.
B
Jo Ch
Normally, a company has a wage structure or method of determining the wages of its employees. In a problem dealing
s
with “wage distortion,” the basic assumption is that there exists a grouping or classification of employees that establishes
e
. bl
distinctions among them on some relevant or legitimate bases.
f
Involved in the classification of employees are various factors such as the degrees of responsibility, the skills and
o Ro
knowledge required, the complexity of the job, or other logical basis of differentiation. The differing wage rate for each of the
existing classes of employees reflects this classification.
P
•
r What is the formula for rectifying or resolving wage distortion?
an B a r
Ch
Following is the formula for the correction of wage distortion in the pay scale structures:
Minimum Wage = % x Prescribed Increase = Distortion Adjustment
es
l
Actual Salary
The above formula was held to be just and equitable.
ob
R
an
DIVISOR TO DETERMINE DAILY RATE
• Who is a monthly-paid employee?
Ch
A “monthly-paid employee” is one who is paid his wage or salary for every day of the month, including unworked rest
days, special days or regular holidays.
• Who is a daily-paid employee?
A “daily-paid employee” is one who is paid his wage or salary only on the days he actually worked, except in cases
of regular holidays wherein he is paid his wage or salary even if he does not work during those days, provided that he is present
or on leave of absence with pay on the working day immediately preceding the regular holidays.
20
2015 BAR EXAMS

• What are the factors/divisors in computing benefits and wage deductions?

Equivalent daily rate (EDR), the basis for deductions for absences and for computing overtime pay and other benefits.
Monthly Rate x 12
No. of Days Considered = Equivalent Daily Rate (EDR)
Paid in a Year
REST PERIODS Article 91. Right to weekly rest day.

It shall be the duty of every employer, whether operating for profit or not, to
provide each of his employees a rest period of not less than twenty-four (24)
1. consecutive hours after every six (6) consecutive normal work days.
WEEKLY REST DAY The employer shall determine and schedule the weekly rest day of his
employees subject to collective bargaining agreement and to such rules and
regulations as the Secretary of Labor and Employment may provide. However,
the employer shall respect the preference of employees as to their weekly rest
• What is the duration of weekly rest period? day when such preference is based on religious grounds.
It shall be the duty of every employer, whether operating for profit or not, to provide each of his employees a rest
period of not less than twenty-four (24) consecutive hours after every six (6) consecutive normal work days.
r
Is the employer’s prerogative to determine the rest period of its employees subject to limitations?
a
B
Yes. The employer shall determine and schedule the weekly rest day of his employees subject to CBA and to such
s
rules and regulations as the DOLE Secretary may provide. However, the employer shall respect the preference of employees as
an
e
to their weekly rest day when such preference is based on religious grounds.
l
b
h
2.
Ro
EMERGENCY REST DAY WORK
•
an r
When can an employer require work on a rest day? Article 92. When employer may require work on a rest day.
a C
B n
The employer may require any of its employees to work on their scheduled rest day for the duration of the following
Ch
emergency and exceptional conditions:
e s a
a. In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic
l
n
or other disaster or calamity, to prevent loss of life and property, or in case of force majeure or imminent danger to
b
ia r
public safety;
R
employer would otherwise suffer;o
b. In case of urgent work to be performed on machineries, equipment, or installations, to avoid serious loss which the
an u
c. In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be
Ba
G
expected to resort to other measures;
Ch
d. To prevent serious loss of perishable goods;
s
e. Where the nature of the work is such that the employees have to work continuously for seven (7) days in a week or
o e
more, as in the case of the crew members of a vessel to complete a voyage and in other similar cases; and
l
t
f. When the work is necessary to avail of favorable weather or environmental conditions where performance or
b
i
quality of work is dependent thereon.
o
l R
se an1. r
HOLIDAY PAY/PREMIUM PAY
a
Article 94. Right to holiday pay.
Every worker shall be paid his regular daily wage during regular
B
Jo Ch
holidays, except in retail and service establishments regularly
employing less than ten (10) workers;
s
COVERAGE, EXCLUSIONS The employer may require an employee to work on any holiday but
e
such employee shall be paid a compensation equivalent to twice his
. bl
regular rate; and
As used in this Article, "holiday" includes: New Year's Day, Maundy
f
• Who are covered by the law on holiday pay? Thursday, Good Friday, the ninth of April, the first of May, the twelfth
of June, the fourth of July, the thirtieth of November, the twenty-fifth
Ro
Generally, all employees are entitled to and covered by the law on holiday pay.
o
and thirtieth of December and the day designated by law for holding a
general election.
r
• Who are excluded from its coverage?
an a r
P
The following are excluded:
B
Ch
a. Those of the government and any of the political subdivisions, including government-owned and controlled
corporations;
b. Those of retail and service establishments regularly employing less than ten (10) workers;
es
c. Domestic workers or Kasambahays;
d. Persons in the personal service of another;
b l
e. Managerial employees as defined in Book III of the Labor Code;
f. Field personnel and other employees whose time and performance is unsupervised by the employer;
R o
an
g. Those who are engaged on task or contract basis or purely commission basis;
h. Those who are paid a fixed amount for performing work irrespective of the time consumed in the performance
Ch
thereof;
i. Other officers and members of the managerial staff;
j. Members of the family of the employer who are dependent on him for support.
21
2015 BAR EXAMS

What are REGULAR and SPECIAL HOLIDAYS?

Article 93. Compensation for rest day, Sunday or holiday work.
A. Regular Holidays Where an employee is made or permitted to work on his scheduled
rest day, he shall be paid an additional compensation of at least
New Year’s Day - 1 January (Wednesday) thirty percent (30%) of his regular wage. An employee shall be
entitled to such additional compensation for work performed on
Araw ng Kagitingan - 9 April (Wednesday) Sunday only when it is his established rest day.
Maundy Thursday - 17 April When the nature of the work of the employee is such that he has no
Good Friday - 18 April regular workdays and no regular rest days can be scheduled, he
shall be paid an additional compensation of at least thirty percent
Labor Day - 1 May (Thursday) (30%) of his regular wage for work performed on Sundays and
Independence Day - 12 June (Thursday) holidays.
National Heroes Day - 25 August (Last Monday of Work performed on any special holiday shall be paid an additional
compensation of at least thirty percent (30%) of the regular wage of
August) the employee. Where such holiday work falls on the employee's
Bonifacio Day - 30 November (Sunday) scheduled rest day, he shall be entitled to an additional
Christmas Day - 25 December (Thursday) compensation of at least fifty per cent (50%) of his regular wage.
Where the collective bargaining agreement or other applicable
Rizal Day - 30 December (Tuesday) employment contract stipulates the payment of a higher premium
pay than that prescribed under this Article, the employer shall pay
such higher rate.
B. Special (Non-Working) Days
Chinese New Year - 31
a r
January (Friday)
B
Black Saturday - 19 April
Ninoy Aquino Day - 21 August (Thursday)
s
an
e
All Saints Day - 1 November (Saturday)
b l
C. Special Holiday (for all schools)
Ro h
EDSA Revolution
C
Anniversary – 25 February (Tuesday)
an ar
Not included in the enumeration above on regular holidays are (1) Eid’l Fitr and (2) Eidul Adha.
B n
The reason is that proclamations declaring the observance of these national holidays are issued after the
Ch
approximate dates of the Islamic holidays have been determined in accordance with the Islamic calendar
e s a
(Hijra) or the lunar calendar, or upon Islamic astronomical calculations, whichever is possible or convenient.
l
n
To this end, the National Commission on Muslim Filipinos (NCMF) shall inform the Office of the President on
b
which days the holidays shall respectively fall.
o
ia r
• What is the total number of regular holidays?
R
an u
The total number of regular holidays is twelve (12) days per year. This is important for purposes of reckoning certain
Ba
divisors and computation of employee benefits.
•
Ch
What is premium pay for holidays and rest days?
G s
o e
“Premium pay” refers to the additional compensation required by law to be paid for work performed within the regular
l
eight (8) hours on non-working days, such as rest days, regular and special holidays.
•
i
How is premium pay for holidays computed?
t o b
a. Regular Holidays
l R
se an r
• If the employee did not work, he/she shall be paid 100 % of his/her salary for that day. Computation: (Daily rate +
Cost of Living Allowance) x 100%. The COLA is included in the computation of holiday pay.
B a
Jo Ch
• If the employee worked, he/she shall be paid 200 % of his/her regular salary for that day for the first eight hours.
s
Computation: (Daily rate + COLA) x 200%. The COLA is also included in computation of holiday pay.
e
. bl
• If the employee worked in excess of eight hours (overtime work), he/she shall be paid an additional 30 percent of
f
his/her hourly rate on said day. Computation: Hourly rate of the basic daily wage x 200% x 130% x number of
Ro
hours worked.
r o • If the employee worked during a regular holiday that also falls on his/her rest day, he/she shall be paid an
an
additional 30 % of his/her daily rate of 200 %. Computation: (Daily rate + COLA) x 200%] + (30% [Daily rate x
a r
P
200%)].
B
Ch
• If the employee worked in excess of eight hours (overtime work) during a regular holiday that also falls on his/her
rest day, he/she shall be paid an additional 30 % of his/her hourly rate on said day. Computation: (Hourly rate of
the basic daily wage x 200% x 130% x 130% x number of hours worked);
es
b. Special (Non-Working) Days
b l
o
• If the employee did not work, the “no work, no pay” principle shall apply, unless there is a favorable company
R
policy, practice, or CBA granting payment on a special day.
an
• If the employee worked, he/she shall be paid an additional 30 % of his/her daily rate on the first eight hours of
work. Computation: [(Daily rate x 130%) + COLA).
Ch
• If the employee worked in excess of eight hours (overtime work), he/she shall be paid an additional 30 % of his/her
hourly rate on said day. Computation: (Hourly rate of the basic daily wage x 130% x 130% x number of hours
worked).
• If the employee worked during a special day that also falls on his/her rest day, he/she shall be paid an additional
50% of his/her daily rate on the first eight hours of work. Computation: [(Daily rate x 150%) + COLA].
• If the employee worked in excess of eight hours (overtime work) during a special day that also falls on his/her rest
day, he/she shall be paid an additional 30 % of his/her hourly rate on said day. Computation: (Hourly rate of the
basic daily wage x 150% x 130% x number of hours worked).
22
2015 BAR EXAMS

c. Special Holiday for all schools

 For private establishments, 25 February 2014 is an ordinary workday and no premium is required to be paid for
work on said day.
 On the other hand, employees in private schools, whether academic or administrative personnel, shall be paid in
accordance with the rules for pay on special (non-working) days as stated above.
 What are the effects of absences on the computation of holiday pay?
1. Employees on leave of absence with pay - entitled to holiday pay when they are on leave of absence with
pay.
2. Employees on leave of absence without pay on the day immediately preceding the regular holiday - may
not be paid the required holiday pay if they have not worked on such regular holiday.
3. Employees on leave while on SSS or employee’s compensation benefits - Employers should grant the
same percentage of the holiday pay as the benefit granted by competent authority in the form of employee’s
compensation or social security payment, whichever is higher, if they are not reporting for work while on such
benefits.
r
4. When day preceding regular holiday is a non-working day or scheduled rest day - should not be deemed
Ba
to be on leave of absence on that day, in which case, employees are entitled to the regular holiday pay if they
worked on the day immediately preceding the non-working day or rest day.
s
an
2.
l e HOLIDAY PAY/PREMIUM PAY OF
b
TEACHERS, PIECE WORKERS, TAKAY,
Ro h
SEASONAL WORKERS, SEAFARERS
an r C
Are private school teachers entitled to holiday pay during semestral vacations? What about Christmas vacation”
a
No, as far as regular holidays during semestral vacations are concerned.

ChAre hourly-paid teachers entitled to holiday pay?
e s
B
Yes, as far as regular holidays during Christmas vacation are concerned.
a n
l
n
A school is exempted from paying hourly-paid faculty members their pay for regular holidays, whether the same be
b
ia r
during the regular semesters of the school year or during semestral, Christmas, or Holy Week vacations. However, it is liable to
R o
pay the faculty members their regular hourly rate on days declared as special holidays or if, for some reason, classes are called
off or shortened for the hours they are supposed to have taught, whether extensions of class days be ordered or not; and in case
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of extensions, said faculty members shall likewise be paid their hourly rates should they teach during said extensions.
Ba
G

Ch
Are piece-workers, takay and others paid by results entitled to holiday pay?
s
Yes. Where a covered employee is paid by results or output such as payment on piece-work, his holiday pay should
o e
not be less than his average daily earnings for the last seven (7) actual working days preceding the regular holiday. In no
l
t b
case, however, should the holiday pay be less than the applicable statutory minimum wage rate.

l i o
What are the distinctions between “supervised” and “unsupervised” workers paid by results to determine their
entitlement to holiday pay?
R
se an r
The principal test to determine entitlement to holiday pay is whether the employees’ time and performance of the work
are “supervised” or “unsupervised” by their employer. If supervised, the employee is entitled to holiday pay. If
B a
Jo Ch
unsupervised, he is not.
e s
.
The distinctions between supervised and unsupervised workers paid by results are as follows:
f bl
(1) Those whose time and performance are supervised by the employer. Here, there is an element of control and
Ro
supervision over the manner as to how the work is to be performed. A piece-rate worker belongs to this category
o
especially if he performs his work in the company premises; and
r an r
(2) Those whose time and performance are unsupervised. Here, the employer’s control is over the result of the
a
P
work. Workers on pakyao and takay basis belong to this group. Both classes of workers are paid per unit
B
Ch
accomplished. Piece-rate payment is generally practiced in garment factories where work is done in the company
s
premises, while payment on pakyao and takay basis is commonly observed in the agricultural industry, such as in
sugar plantations where the work is performed in bulk or in volumes, hence, difficult to quantify.
l e
b
 Are seasonal workers entitled to holiday pay?
regular holiday pay during off-season where they are not at work.
R o
Yes. Seasonal workers are entitled to holiday pay while working during the season. They may not be paid the required
an
 Are seafarers entitled to holiday pay?
Ch
Yes. Any hours of work or duty including hours of watchkeeping performed by the seafarer on designated rest days
and holidays shall be paid rest day or holiday pay.
• What are important principles on holiday pay?
 In case of two (2) regular holidays falling on the same day, the worker should be compensated as follows:
o If unworked – 200% for the two regular holidays;
o If worked – 200% for the two regular holidays plus premium of 100% for work on that day.
 “Monthly-paid” employees are not excluded from the coverage of holiday pay.
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2015 BAR EXAMS

Prof. Joselito Guianan Chan Article 95. Right to service incentive leave.
Every employee who has rendered at least one year of service shall be
entitled to a yearly service incentive leave of five days with pay.
This provision shall not apply to those who are already enjoying the benefit
LEAVES herein provided, those enjoying vacation leave with pay of at least five days
and those employed in establishments regularly employing less than ten
1. employees or in establishments exempted from granting this benefit by the
Secretary of Labor and Employment after considering the viability or
SERVICE INCENTIVE LEAVE financial condition of such establishment.
The grant of benefit in excess of that provided herein shall not be made a
subject of arbitration or any court or administrative action.
• What is service incentive leave?
Every covered employee who has rendered at least one (1) year of service is entitled to a yearly service incentive
leave of five (5) days with pay.
The term “at least one year of service” should mean service within twelve (12) months, whether continuous or
broken, reckoned from the date the employee started working, including authorized absences and paid regular holidays, unless
the number of working days in the establishment as a matter of practice or policy, or that provided in the employment contract, is
less than twelve (12) months, in which case, said period should be considered as one (1) year for the purpose of determining
entitlement to the service incentive leave benefit.
r
All employees are covered by the rule on service incentive leave except:
a
B
a. Those of the government and any of its political subdivisions, including government-owned and controlled
corporations;
s
an
e
b. Domestic workers or kasambahays;
l
c. Persons in the personal service of another;
b
d. Managerial employees as defined in Book III of the Labor Code;
Ro h
e. Field personnel and other employees whose performance is unsupervised by the employer;
f. Those who are engaged on task or contract basis, purely commission basis, or those who are paid in a fixed
C
amount for performing work irrespective of the time consumed in the performance thereof;
an ar
g. Those who are already enjoying the benefit provided in the law;
B n
h. Those enjoying vacation leave with pay of at least five (5) days;
Ch
i. Those employed in establishments regularly employing less than ten (10) employees;
e s
j. Other officers and members of the managerial staff; and
a
l
n
k. Members of the family of the employer who are dependent on him for support.
b
ia r
• Are unavailed service incentive leaves commutable to cash?
R o
Yes. The service incentive leave is commutable to its money equivalent if not used or exhausted at the end of the year.
an
2.
u Ba
G
MATERNITY LEAVE
Ch s
• What is maternity leave?
o l e
“Maternity leave” is the period of time which may be availed of by a woman employee, married or unmarried, to
t b
undergo and recuperate from childbirth, miscarriage or complete abortion during which she is permitted to retain her rights
i o
and benefits flowing from her employment.
What is the period of leave?
l R
se
•
an r
60 days – for normal delivery
B a
Jo Ch
78 days – for caesarian delivery
• What is the amount granted?
e s
f. bl
Daily maternity benefit equivalent to one hundred percent (100%) of her average daily salary credit for sixty (60) days
or seventy-eight (78) days in case of caesarian delivery/
o Ro
• What is the number of delivery or miscarriage covered?
r an r
The maternity benefits shall be paid only for the first four (4) deliveries or miscarriages/
a
P• Is an unmarried woman entitled to maternity leave benefit?
Ch
Yes. For as long as a woman is pregnant, she is entitled to maternity leave benefit regardless of whether she is
s
B
married or unmarried.
l e
• What is paternity leave benefit?
PATERNITY LEAVE
ob
R
an
“Paternity leave” covers a married male employee allowing him not to report for work for seven (7) calendar days
but continues to earn the compensation therefor, on the condition that his spouse has delivered a child or suffered miscarriage
Ch
for purposes of enabling him to effectively lend support to his wife in her period of recovery and/or in the nursing of the newly-
born child.
“Delivery” includes childbirth or any miscarriage.
“Spouse” refers to the lawful wife. For this purpose, “lawful wife” refers to a woman who is legally married to the
male employee concerned.
“Cohabiting” refers to the obligation of the husband and wife to live together.
24
2015 BAR EXAMS

• What is the covered total number of deliveries?

Every married employee in the private and public sectors is entitled to a paternity leave of seven (7) calendar days with
full pay for the first four (4) deliveries of the legitimate spouse with whom he is cohabiting.
Paternity leave benefits are granted to the qualified employee after the delivery by his wife, without prejudice to an
employer allowing an employee to avail of the benefit before or during the delivery, provided that the total number of days
should not exceed seven (7) calendar days for each delivery.
 Is an unavailed paternity leave benefit convertible to cash?
No. In the event that the paternity leave benefit is not availed of, said leave shall not be convertible to cash.
PARENTAL LEAVE
(R.A. No. 8972)
• What is parental leave?
“Parental leave” is the leave benefit granted to a male or female solo parent to enable him/her to perform parental
r
duties and responsibilities where physical presence is required.
a
•
B
How many days may be availed of as parental leave?
s
an
The parental leave shall not be more than seven (7) working days every year to a solo parent who has rendered
l e
service of at least one (1) year, to enable him/her to perform parental duties and responsibilities where his/her physical
b
presence is required. This leave shall be non-cumulative.
Ro h
It bears noting that this leave privilege is an additional leave benefit which is separate and distinct from any other leave
benefits provided under existing laws or agreements.
•
an
Who is a solo parent?
ar C
Ch
B n
The term "solo parent" refers to any individual who falls under any of the following categories:
s a
(1) A woman who gives birth as a result of rape and other crimes against chastity even without a final conviction of
e
l
the offender: Provided, That the mother keeps and raises the child;
b n
(2) Parent left solo or alone with the responsibility of parenthood due to death of spouse;
o
ia r
(3) Parent left solo or alone with the responsibility of parenthood while the spouse is detained or is serving sentence
R
for a criminal conviction for at least one (1) year;
an u
(4) Parent left solo or alone with the responsibility of parenthood due to physical and/or mental incapacity of spouse
Ba
as certified by a public medical practitioner;
Ch G
(5) Parent left solo or alone with the responsibility of parenthood due to legal separation or de facto separation from
s
spouse for at least one (1) year, as long as he/she is entrusted with the custody of the children;
o l e
(6) Parent left solo or alone with the responsibility of parenthood due to declaration of nullity or annulment of marriage
t b
as decreed by a court or by a church as long as he/she is entrusted with the custody of the children;
i o
(7) Parent left solo or alone with the responsibility of parenthood due to abandonment of spouse for at least one (1)
l R
year;
se an r
(8) Unmarried mother/father who has preferred to keep and rear her/his child/children instead of having others care
a
for them or give them up to a welfare institution;
B
Ch
(9) Any other person who solely provides parental care and support to a child or children;
Jo s
(10) Any family member who assumes the responsibility of head of family as a result of the death, abandonment,
e
.
disappearance or prolonged absence of the parents or solo parent.
•
f
What is the effect of change of status of the solo parent?
bl
o Ro
A change in the status or circumstance of the parent claiming benefits under this Act, such that he/she is no longer left
alone with the responsibility of parenthood, shall terminate his/her eligibility for these benefits.
P
•
r Who are considered children under this law?
an B a r
Ch
"Children" refer to those living with and dependent upon the solo parent for support who are unmarried, unemployed
and not more than eighteen (18) years of age, or even over eighteen (18) years but are incapable of self-support because of
mental and/or physical defect/disability.
es
• Is an unavailed parental leave convertible to cash?
b l
agreed upon previously.
R o
No. In the event that the parental leave is not availed of, said leave shall not be convertible to cash unless specifically
an
LEAVE FOR VICTIMS OF VIOLENCE
Ch
AGAINST WOMEN AND CHILDREN
(R.A. No. 9262)
• What is this kind of leave?
This special leave is granted to a woman employee who is a victim under this law. It is for a total of ten (10) days of
paid leave of absence, in addition to other paid leaves under the law. It is extendible when the necessity arises as specified in
the protection order. Its purpose is to enable the woman employee to attend to the medical and legal concerns relative to said
law. This leave is not convertible to cash.
25
2015 BAR EXAMS

• What is the requirement for its entitlement?

At any time during the application of any protection order, investigation, prosecution and/or trial of the criminal case, a
victim of Violence Against Women and their Children (VAWC) who is employed shall be entitled to said paid leave of up to ten
(10) days. The Punong Barangay/kagawad or prosecutor or the Clerk of Court, as the case may be, shall issue a certification at
no cost to the woman that such an action is pending, and this is all that is required for the employer to comply with the 10-
day paid leave.
SPECIAL LEAVE BENEFIT FOR WOMEN

• What is this special leave benefit [GYNECOLOGICAL SURGERY LEAVE]?
A special leave benefit for women was granted under R.A. No. 9710, otherwise known as “The Magna Carta of
Women” [August 14, 2009]. Thus, any female employee in the public and private sector regardless of age and civil status shall
be entitled to a special leave of two (2) months with full pay based on her gross monthly compensation subject to existing
laws, rules and regulations due to surgery caused by gynecological disorders under the following terms and conditions:
r
1. She has rendered at least six (6) months continuous aggregate employment service for the last twelve (12) months
a
prior to surgery;
B
2. In the event that an extended leave is necessary, the female employee may use her earned leave credits; and
s
an
3. This special leave shall be non-cumulative and non-convertible to cash.
l e
“Gynecological disorders” refer to disorders that would require surgical procedures such as, but not limited to,
b
dilatation and curettage and those involving female reproductive organs such as the vagina, cervix, uterus, fallopian tubes,
Ro h
ovaries, breast, adnexa and pelvic floor, as certified by a competent physician. Gynecological surgeries shall also include
hysterectomy, ovariectomy, and mastectomy.
•
an
Is this leave similar to maternity leave?
ar C
Ch
B n
No. This leave should be distinguished from maternity leave benefit, a separate and distinct benefit, which may be
s a
availed of in case of childbirth, miscarriage or complete abortion.
l e
A woman, therefore, may avail of this special leave benefit in case she undergoes surgery caused by gynecological
b CHARGE n
disorder and at the same time maternity benefit as these two leaves are not mutually exclusive.
ia r
Article 96. Service charges. All service charges collected by hotels,
R oSERVICE restaurants and similar establishments shall be distributed at the rate of

eighty-five percent (85%) for all covered employees and fifteen percent (15%)
u
for management. The share of the employees shall be equally distributed
an
among them. In case the service charge is abolished, the share of the
• What are the kinds of establishment covered by the law on service charge? covered employees shall be considered integrated in their wages.
G Ba
Ch
The rules on service charge apply only to establishments collecting service charges, such as hotels, restaurants,
s
lodging houses, night clubs, cocktail lounges, massage clinics, bars, casinos and gambling houses, and similar enterprises,
o e
including those entities operating primarily as private subsidiaries of the government.
l
t b
• Who are the employees covered by this law?
l i o
The same rules on service charges apply to all employees of covered employers, regardless of their positions,
R
designations or employment status, and irrespective of the method by which their wages are paid except those receiving more
se an r
than P2,000.00 a month.
• Who are not covered?
B a
Jo Ch s
Specifically excluded from coverage are employees who are receiving wages of more than P2,000.00 a month.
e
However, it must be pointed out that the P2,000.00 ceiling is no longer realistic considering the applicable minimum wages
.
prevailing in the country. Hence, it must be disregarded.
f bl
Ro
• How is the service charge distributed?
r o a. Percentage of sharing.
an
All service charges collected by covered employers are required to be distributed at the following rates:
a r
P
1. 85% to be distributed equally among the covered employees; and
B
Ch s
2. 15% to management to answer for losses and breakages and distribution to employees receiving more than
e
P2,000.00 a month, at the discretion of the management.
b. Frequency of distribution.
b l
o
The share of the employees referred to above should be distributed and paid to them not less often than once every
R
two (2) weeks or twice a month at intervals not exceeding sixteen (16) days.
an
• Can the service charge be integrated into the wages of covered employees?
Yes. In case the service charge is abolished, the share of covered employees should be considered integrated in their
Ch
wages, in accordance with Article 96 of the Labor Code. The basis of the amount to be integrated is the average monthly share
of each employee for the past twelve (12) months immediately preceding the abolition or withdrawal of such charges.
 What are some principles on service charge?
 Tips and services charges are two different things. Tips are given by customers voluntarily to waiters and other people who
serve them out of recognition of satisfactory or excellent service. There is no compulsion to give tips under the law. The
same may not be said of service charges which are considered integral part of the cost of the food, goods or services
ordered by the customers.
 Service charges are not in the nature of profit share and, therefore, cannot be deducted from wage.
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2015 BAR EXAMS

THIRTEENTH MONTH PAY

 Who are covered by the 13th month pay law?
Only rank-and-file employees, regardless of their designation or employment status and irrespective of the method by
which their wages are paid, are entitled to the 13 th month pay benefit. Managerial employees are not entitled to 13 th month
pay.
 What is the minimum period of service required in a calendar year to be entitled to 13 th month pay?
To be entitled to the 13th month pay benefit, it is imposed as a minimum service requirement that the employee
should have worked for at least one (1) month during a calendar year.
 When should 13th month pay be paid?
It must be paid not later than December 24 of every year.
 Who are excluded from its coverage?
The following employers are not covered by the 13th month pay law:
r
1. The government and any of its political subdivisions, including government-owned and controlled
2.
Ba
corporations, except those corporations operating essentially as private subsidiaries of the government.
Employers already paying their employees 13th month pay or more in a calendar year or its equivalent at the time
s
of the issuance of the Revised Guidelines.
an
3.
e
Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid a
l
fixed amount for performing a specific work, irrespective of the time consumed in the performance thereof,
b
except where the workers are paid on piece-rate basis, in which case, the employer shall be covered by the
Ro h
Revised Guidelines insofar as such workers are concerned. Workers paid on piece-rate basis shall refer to
C
those who are paid a standard amount for every piece or unit of work produced that is more or less regularly
an r
replicated without regard to the time spent in producing the same.
a
B n

Ch
Are domestic workers or Kasambahays covered?
s
Yes. They are now covered under the Kasambahay Law.
e a
l
n
 Are extras, casuals and seasonal employees entitled to 13th month pay?
b
ia r
Yes, they are entitled thereto.
 Is 13th month pay part of wage?
R o
an u
13th month pay which is in the nature of additional income, is based on wage but not part of wage.
G Ba
 What is the minimum amount of the 13th month pay?
Ch s
The minimum 13th month pay should not be less than one-twelfth (1/12) of the total basic salary earned by an
o e
employee within a calendar year.
l
t
 What is meant by “basic salary” or “basic wage”?
b
i o
“Basic salary” or “basic wage” contemplates work within the normal eight (8) working hours in a day. This means that the
l R
basic salary of an employee for purposes of computing the 13th month pay should include all remunerations or earnings paid by
se
the employer for services rendered during normal working hours.
an ar
For purposes of computing the 13th month pay, “basic salary” should be interpreted to mean not the amount actually
B
Ch
received by an employee, but 1/12 of their standard monthly wage multiplied by their length of service within a given calendar
Jo s
year.
e
. bl
SEPARATION PAY
o f
What are the separation pays expressly provided under the Labor Code?
Ro
r
The Labor Code prescribes the payment of separation pay only in the following four (4) situations:
an a r
P
(1) When termination is due to authorized causes:
B
Ch
(1) installation of labor-saving devices;
(2) redundancy;
(3) retrenchment; or
es
(4) closing or cessation of business operations; and
(5) disease. b l
 What are separation pays provided in jurisprudence?
R o
an
In accordance with jurisprudence, the following separation pay may be cited:
Ch
(1) Separation pay in lieu of reinstatement; and
(2) Separation pay as financial assistance in cases where the dismissal was held valid and legal but the employee is
given financial assistance by reason of long years of service, unblemished record, substantial justice, etc.
 What is the prevailing doctrine regarding grant of financial assistance?
 THE TOYOTA DOCTRINE.
Under this doctrine, all grounds in Article 282 of the Labor Code, except analogous causes, would not merit
payment of financial assistance.
In the following cases, the Toyota doctrine was applied; hence, no financial assistance was awarded because the
grounds invoked are in accordance with Article 282:
27
2015 BAR EXAMS

Reno Foods v. Nagkakaisang Lakas ng Manggagawa (NLM), where it was maintained that labor adjudicatory
officials and the Court of Appeals must demur the award of separation pay based on social justice when an employee’s dismissal
is based on serious misconduct or willful disobedience; gross and habitual neglect of duty; fraud or willful breach of trust; or
commission of a crime against the person of the employer or his immediate family – grounds under Article 282 of the Labor Code
that sanction dismissals of employees.
Equitable PCI Bank v. Dompor, Moya v. First Solid Rubber Industries, Inc., and Unilever Philippines, Inc. v.
Rivera, where the infractions committed by the respondent constituted serious misconduct or willful disobedience resulting to
loss of trust and confidence.
Central Philippines Bandag Retreaders, Inc. v. Diasnes, and Quiambao v. Manila Electric Company, involving
gross and habitual neglect of duties due to respondent’s repeated and continuous absences without prior leave and frequent
tardiness.
 Exception to Toyota doctrine: When termination is based on analogous causes.
Toyota, however, makes a distinction when the grounds cited are the analogous causes for termination under Article
282(e), like inefficiency, incompetence, ineptitude, poor performance and others. It declared that in these cases, the NLRC or the
r
courts may opt to grant separation pay anchored on social justice in consideration of the length of service of the employee, the
a
amount involved, whether the act is the first offense, the performance of the employee and the like, using the guideposts
B
enunciated in PLDT on the propriety of the award of separation pay.
Illustrative cases.
s
an
l e
Yrasuegui v. Philippine Airlines, Inc., where the dismissal of petitioner (an international flight attendant) due to his
b
obesity was held valid as an analogous cause under Article 282(e) of the Labor Code. The Supreme Court, however, as an act of
Ro h
social justice and for reason of equity, awarded him separation pay equivalent to one-half (1/2) month’s pay for every year of
service, including his regular allowances. The Court observed that his dismissal occasioned by his failure to meet the weight
C
standards of his employer was not for serious misconduct and does not reflect on his moral character.
an
 THE SOLIDBANK DOCTRINE.
ar
Ch e s
B
cause are not entitled to be paid additional separation pay by way of financial assistance.
a n
Under this 2010 doctrine, as distinguished from just cause termination, employees terminated due to authorized
l
n
The reason is that the employer is only required under the law to pay his employees separation pay in accordance with
b
ia r
Article 283 of the Labor Code. That is all that the law requires. The Court should refrain from adding more than what the law
o
requires, as the same is within the realm of the legislature.
R
an RETIREMENT PAY
u Ba
Ch
a.
G s
o e
ELIGIBILITY
l
t b
 Who are covered under the retirement pay law?
l i o
The following employees are eligible to avail of retirement benefits under Article 287 of the Labor Code:
R
se
1. All employees in the private sector, regardless of their position, designation or status and irrespective of the method
an ar
by which their wages are paid;
B
2. Part-time employees;
Jo Ch
3. Employees of service and other job contractors;
4. Domestic helpers or persons in the personal service of another;
e s
. bl
3. Underground mine workers;
f
4. Employees of government-owned and/or controlled corporations organized under the Corporation Code (without
Ro
original charters).

r oWho are excluded?

Article 287, as amended, does not apply to the following employees:
an a r
P
1. Employees of the national government and its political subdivisions, including government-owned and/or controlled
B
Ch
corporations, if they are covered by the Civil Service Law and its regulations.
2. Employees of retail, service and agricultural establishments or operations regularly employing not more than ten
es
l
(10) employees. These terms are defined as follows:
b
a. “Retail establishment” is one principally engaged in the sale of goods to end-users for personal or
o
household use. It shall lose its retail character qualified for exemption if it is engaged in both retail and
R
wholesale of goods.
b. “Service establishment” is one principally engaged in the sale of service to individuals for their own or
an
household use and is generally recognized as such.
c. “Agricultural establishment/operation” refers to an employer which is engaged in agriculture. This term
Ch
refers to all farming activities in all branches and includes, among others, the cultivation and tillage of soil,
production, cultivation, growing and harvesting of any agricultural or horticultural commodities, dairying, raising
of livestock or poultry, the culture of fish and other aquatic products in farms or ponds, and any activities
performed by a farmer or on a farm as an incident to, or in conjunction with, such farming operations, but does
not include the manufacture and/or processing of sugar, coconut, abaca, tobacco, pineapple, aquatic or other
farm products.
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2015 BAR EXAMS

 What is the optional and compulsory retirement age?

a. Under Article 287.
This article provides for two (2) types of retirement:
(1) Optional retirement upon reaching the age of sixty (60) years.
(2) Compulsory retirement upon reaching the age of sixty-five (65) years.
It is the employee who exercises the option under No. 1 above.
b. Under retirement plan.
The optional and compulsory retirement schemes provided under Article 287 come into play only in the absence of a
retirement plan or agreement setting forth other forms of optional or compulsory retirement schemes. Thus, if there is a
retirement plan or agreement in an establishment providing for an earlier or older age of retirement (but not beyond 65 which has
been declared the compulsory retirement age), the same shall be controlling.
c. Retirement at an earlier age or after rendering certain period of service.
r
Based on Article 287 the employers and employees are free to agree and stipulate on the retirement age, either in a
Ba
CBA or employment contract. It is only in the absence of such agreement that the retirement age shall be fixed by law, that is, in
accordance with the optional and compulsory retirement age prescribed under Article 287.
s
an
d. By mutual agreement, employers may be granted the sole and exclusive prerogative to retire employees at
e
an earlier age or after rendering a certain period of service.
l
b
Cainta Catholic School v. Cainta Catholic School Employees Union [CCSEU], where the Supreme Court upheld
Ro h
the exercise by the school of its option to retire employees pursuant to the existing CBA where it is provided that the school has
the option to retire an employee upon reaching the age limit of sixty (60) or after having rendered at least twenty (20)
C
years of service to the school, the last three (3) years of which must be continuous. Hence, the termination of employment
an r
of the employees, arising as it did from an exercise of a management prerogative granted by the mutually-negotiated CBA
a
n
between the school and the union is valid.
B
Ch
e. To be valid, retirement at an earlier age must be voluntarily consented to by the employee.
e s a
In Jaculbe v. Silliman University, the Supreme Court ruled that in order for retirement at an earlier age to be valid, it
l
n
must be shown that the employee’s participation in the plan is voluntary. An employer is free to impose a retirement age of less
b
than 65 for as long as it has the employees’ consent. Stated conversely, employees are free to accept the employer’s offer to
o
ia r
lower the retirement age if they feel they can get a better deal with the retirement plan presented by the employer.
R
 What is the minimum years of service required for entitlement under the law?
an u
Five (5) years is the minimum years of service that must be rendered by the employee before he can avail of the
Ba
G
retirement benefits upon reaching optional or compulsory retirement age under Article 287.
Ch
 What is the retirement age of underground mine workers?
s
o e
The optional retirement age of underground mine workers is 50 years of age; while the compulsory retirement age is
l
60 years old.
i t b
 What is the minimum number of years of service required of underground mine workers?
o
l
Minimum years of service is also 5 years.
R
se
 Are the retirement benefits of underground mine workers similar to ordinary retirees?
to underground mine workers.

a n ar
Yes. In fact, other than the retirement age, all other requirements as well as benefits provided in the law are applicable
B
o Ch
AMOUNT OF RETIREMENT PAY
J e s
.
 What is retirement pay under the law?
f bl
a. One-half (½) month salary.
Ro
In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment,
o
an employee, upon reaching the optional or compulsory retirement age specified in Article 287, shall be entitled to retirement pay
r an r
equivalent to at least one-half (½) month salary for every year of service, a fraction of at least six (6) months being considered as
a
P
one (1) whole year.
B
Ch
b. Components of one-half (½) month salary.
For purposes of determining the minimum retirement pay due an employee under Article 287, the term “one-half
month salary” shall include all of the following:
es
(1) Fifteen (15) days salary of the employee based on his latest salary rate.
b l
o
(2) The cash equivalent of five (5) days of service incentive leave;
R
(3) One-twelfth (1/12) of the 13th month pay due the employee; and
an
(4) All other benefits that the employer and employee may agree upon that should be included in the computation of
the employee’s retirement pay.
Ch
c. “One-half (½) month salary” means 22.5 days.
“One-half [½] month salary” is equivalent to “22.5 days” arrived at after adding 15 days plus 2.5 days representing
one-twelfth [1/12] of the 13th month pay plus 5 days of service incentive leave.
 What are some principles on retirement benefits?
 1/12 of 13th month pay and 5 days of service incentive leave (SIL) should not be included if the employee was not
entitled to 13th month pay and SIL during his employment.
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2015 BAR EXAMS

Example: R & E Transport, Inc. v. Latag,1 where it was held that employees who are not entitled to 13th month pay
and SIL pay while still working should not be paid the entire “22.5 days” but only the fifteen (15) days salary. In other words, the
additional 2.5 days representing one-twelfth [1/12] of the 13th month pay and the five (5) days of SIL should not be included as
part of the retirement benefits.
The employee in this case was a taxi driver who was being paid on the “boundary” system basis. It was undisputed
that he was entitled to retirement benefits after working for fourteen (14) years with R & E Transport, Inc. However, he was not
entitled to the 13th month pay since Section 3 of the Rules and Regulations Implementing P.D. No. 851 exempts from its
coverage employers of those who are paid on purely boundary basis. He was also not entitled to the 5-day service incentive
leave pay pursuant to the Rules to Implement the Labor Code which expressly excepts field personnel and other employees
whose performance is unsupervised by the employer.
2
But in the 2010 case of Serrano v. Severino Santos Transit, which involves a bus conductor (petitioner) who worked
for 14 years for respondent bus company which did not adopt any retirement scheme. It was held herein that even if petitioner
as bus conductor was paid on commission basis, he falls within the coverage of R.A. 7641 (Retirement Pay Law, now Article 287
of Labor Code). This means that his retirement pay should include the cash equivalent of the 5-day SIL and 1/12 of the 13th
month pay for a total of 22.5 days. The affirmance by the Court of Appeals of the reliance by the NLRC on R & E Transport case
a r
was held erroneous. For purposes of applying the law on SIL as well as on retirement, there is a difference between drivers paid
under the “boundary system” and conductors paid on commission basis. This is so because in practice, taxi drivers do not
B
receive fixed wages. They retain only those sums in excess of the “boundary” or fee they pay to the owners or operators of the
s
an
vehicles. Conductors, on the other hand, are paid a certain percentage of the bus’ earnings for the day. It bears emphasis that
l e
under P.D. No. 851 and the SIL Law, the exclusion from its coverage of workers who are paid on a purely commission basis is
b
only with respect to field personnel.
Ro h
RETIREMENT BENEFITS OF
C
WORKERS PAID BY RESULTS
an ar
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• What are the retirement benefits of workers paid by results?
Ch s
For covered workers who are paid by results and do not have a fixed monthly rate, the basis for the determination of
e a
the salary for fifteen (15) days shall be their average daily salary (ADS). The ADS is the average salary for the last twelve (12)
l
n
months reckoned from the date of their retirement, divided by the number of actual working days in that particular period.
b
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RETIREMENT BENEFITS OF PART-TIME WORKERS
R
•
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How should the retirement benefits of part-time workers be computed?
u Ba
Ch G
Applying the principles under Article 287, as amended, the components of retirement benefits of part-time workers
s
may also be computed at least in proportion to the salary and related benefits due them.
t o J.
bl e
i
WOMEN WORKERS
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l
a.
R
se
PROVISIONS AGAINST DISCRIMINATION
an ar
• What are acts of discrimination under the Labor Code?
B
Jo Ch
(a) Payment of a lesser compensation, including wage, salary or other form of remuneration and fringe benefits, to a
female employee as against a male employee, for work of equal value; and
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f. bl
(b) Favoring a male employee over a female employee with respect to promotion, training opportunities, study and
scholarship grants solely on account of their sexes.
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• What are acts of discrimination under the Magna Carta of Women?
r an r
R.A. No. 9710, otherwise known as “The Magna Carta of Women,” is a comprehensive women’s human rights law that
a
P
seeks to eliminate discrimination against women by recognizing, protecting, fulfilling and promoting the rights of Filipino women,
B
Ch
especially those in marginalized sector.
Based on the definition of the term “Discrimination Against Women” in R.A. No. 9710, the following are considered
es
l
discriminatory acts:
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1. Any gender-based distinction, exclusion, or restriction which has the effect or purpose of impairing or nullifying the
recognition, enjoyment, or exercise by women, irrespective of their marital status, on a basis of equality of men and
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women, of human rights and fundamental freedoms in the political, economic, social, cultural, civil or any other
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field;
2. Any act or omission, including by law, policy, administrative measure, or practice, that directly or indirectly excludes
Ch
or restricts women in the recognition and promotion of their rights and their access to and enjoyment of
opportunities, benefits or privileges;
3. A measure or practice of general application that fails to provide for mechanisms to offset or address sex or
gender-based disadvantages or limitations of women, as a result of which women are denied or restricted in the
recognition and protection of their rights and in their access to and enjoyment of opportunities, benefits, or
privileges; or women, more than men, are shown to have suffered the greater adverse effects of those measures or
practices; and
1 G.R. No. 155214, Feb. 13, 2004.

2 G.R. No. 187698, Aug. 9, 2010.
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2015 BAR EXAMS

4. Discrimination compounded by or intersecting with other grounds, status, or condition, such as ethnicity, age,
poverty or religion.
Additionally, women are guaranteed their right to decent work. The State shall progressively realize and ensure decent
work standards for women that involve the creation of jobs of acceptable quality in conditions of freedom, equity, security and
human dignity.
b.
STIPULATION AGAINST MARRIAGE
• Is the prohibition against marriage valid?
Article 136 of the Labor Code considers as an unlawful act of the employer to require as a condition for or continuation
of employment that a woman employee shall not get married or to stipulate expressly or tacitly that upon getting married, a
woman employee shall be deemed resigned or separated.
It is likewise an unlawful act of the employer, to actually dismiss, discharge, discriminate or otherwise prejudice a
woman employee merely by reason of her marriage.
•
a r
What are the relevant pieces of jurisprudence on marriage?
B 1
1. Philippine Telegraph and Telephone Company v. NLRC. - It was declared here that the company policy of not
s
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accepting or considering as disqualified from work any woman worker who contracts marriage runs afoul of the test
l e
of, and the right against, discrimination afforded all women workers by our labor laws and by no less than the
b
Constitution.
Ro h
2
2. Star Paper Corp. v. Simbol, Comia and Estrella. - The following policies were struck down as invalid for
violating the standard of reasonableness which is being followed in our jurisdiction, otherwise called the
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“Reasonable Business Necessity Rule”:
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n
“1. New applicants will not be allowed to be hired if in case he/she has [a] relative, up to [the] 3 rd degree of
B
Ch
relationship, already employed by the company.
e s a
“2. In case of two of our employees (both singles [sic], one male and another female) developed a friendly
l
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relationship during the course of their employment and then decided to get married, one of them should resign to
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preserve the policy stated above.”
o
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3
3. Duncan Association of Detailman-PTGWO v. Glaxo Welcome Philippines, Inc. In this case, the prohibition
R
against marriage embodied in the following stipulation in the employment contract was held as valid:
an u Ba
“10. You agree to disclose to management any existing or future relationship you may have, either by consanguinity
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or affinity with co-employees or employees of competing drug companies. Should it pose a possible conflict of
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interest in management discretion, you agree to resign voluntarily from the Company as a matter of Company
policy.”
s
o l e
The Supreme Court ruled that the dismissal based on this stipulation in the employment contract is a valid exercise of
t b
i
management prerogative. The prohibition against personal or marital relationships with employees of competitor companies
o
upon its employees was held reasonable under the circumstances because relationships of that nature might compromise the
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interests of the company. In laying down the assailed company policy, the employer only aims to protect its interests against the
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possibility that a competitor company will gain access to its secrets and procedures.
c.
B a
Jo Ch
PROHIBITED ACTS
e s
.
What are the prohibited acts against women under the Labor Code?
bl
•
f
Article 137 of the Labor Code and its implementing rule consider unlawful the followings acts of the employer:
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1. To discharge any woman employed by him for the purpose of preventing such woman from enjoying maternity
leave, facilities and other benefits provided under the Labor Code;
P r pregnancy;
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2. To discharge such woman on account of her pregnancy, or while on leave or in confinement due to her
B a r
Ch s
3. To discharge or refuse the admission of such woman upon returning to her work for fear that she may again be
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pregnant;
4. To discharge any woman or any other employee for having filed a complaint or having testified or being about
to testify under the Labor Code; or
b l
stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or
R o
5. To require as a condition for or continuation of employment that a woman employee shall not get married or to
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separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee
merely by reason of marriage.
Ch
1 G.R. No. 118978, May 23, 1997, 272 SCRA 596, 605.
2 G.R. No. 164774, April 12, 2006.
3 G.R. No. 162994, Sept. 17, 2004.
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d.
ANTI-SEXUAL HARASSMENT ACT
(R.A. No. 7877)
• What are the 3 situations contemplated under this law?
R.A. No. 7877 declares sexual harassment unlawful only in three (3) situations, namely:
(1) employment;
(2) education; and
(3) training environment.
• Can sexual harassment be committed also against a man?
Yes. Sexual harassment is not the sole domain of women as men may also be subjected to the same despicable act.
Said law does not limit the victim of sexual harassment to women.
• Who are the persons who may be held liable for sexual harassment?
a r
Work, education or training-related sexual harassment is committed by any employer, employee, manager, supervisor,
agent of the employer, teacher, instructor, professor, coach, trainor, or any other person who, having authority, influence or moral
B
ascendancy over another in a work or training or education environment, demands, requests or otherwise requires any sexual
s
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favor from another, regardless of whether the demand, request or requirement for submission is accepted by the object of said
act.
l e
b
Further, any person who directs or induces another to commit any act of sexual harassment as defined in the law, or
Ro h
who cooperates in the commission thereof by another without which it would not have been committed, shall also be held liable
under the law.
•
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How is sexual harassment committed in a work-related or employment environment?
a C
Ch
B n
In a work-related or employment environment, sexual harassment is committed when:
s a
1. The sexual favor is made a condition in the hiring or in the employment, re-employment or continued employment
e
l
of said individual or in granting said individual favorable compensation, terms, conditions, promotions, or privileges;
b n
or the refusal to grant the sexual favor results in limiting, segregating or classifying the employee which in any way
o
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would discriminate, deprive or diminish employment opportunities or otherwise adversely affect said employee;
R
2. The above acts would impair the employee’s rights or privileges under existing labor laws; or
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3. The above acts would result in an intimidating, hostile, or offensive environment for the employee.
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What are duties of the employer in regard to sexual harassment complaints?
Ba
G
•
Ch
It is the duty of the employer to prevent or deter the commission of acts of sexual harassment and to provide the
s
o
procedures for the resolution or prosecution of acts of sexual harassment.
l e
t
The employer or head of office is required to:
b
l i R o
1. promulgate appropriate rules and regulations, in consultation with and jointly approved by the employees or
students or trainees, through their duly designated representatives, prescribing the procedure for the investigation
se
of sexual harassment cases and the administrative sanctions therefor. The said rules and regulations issued shall
an ar
include, among others, guidelines on proper decorum in the workplace and educational or training institutions.
B
Jo Ch
2. create a committee on decorum and investigation of cases on sexual harassment. The committee shall conduct
s
meetings, as the case may be, with officers and employees, teachers, instructors, professors, coaches, trainors
e
.
and students or trainees to increase understanding and prevent incidents of sexual harassment. It shall also
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conduct the investigation of alleged cases constituting sexual harassment.
o f K.
EMPLOYMENT OF MINORS
Ro
r an r
(Labor Code and R.A. No. 7678, R.A. No. 9231)
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P
Who is a “child” or “working child”?
B
•
Ch s
For legal purposes, the term “child” refers to any person less than eighteen (18) years of age.
A “working child” refers to any child engaged as follows:
l e
ii. when the child below fifteen (15) years of age:
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i. when the child is below eighteen (18) years of age, in work or economic activity that is not “child labor;” and
R
(a) in work where he/she is directly under the responsibility of his/her parents or legal guardian and where only
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members of the child’s family are employed; or
Ch
(b) in “public entertainment or information” which refers to artistic, literary, and cultural performances for
television show, radio program, cinema or film, theater, commercial advertisement, public relations activities or
campaigns, print materials, internet, and other media.
• What are the working hours of a child?
The term “hours of work” includes (1) all time during which a child is required to be at a prescribed workplace, and (2)
all time during which a child is suffered or permitted to work. Rest periods of short duration during working hours shall be
counted as hours worked.
The following hours of work shall be observed for any child allowed to work under R.A. No. 9231 and its Implementing
Rules:
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2015 BAR EXAMS

(a) For a child below 15 years of age, the hours of work shall not be more than twenty (20) hours per week, provided
that the work shall not be more than four (4) hours at any given day;
(b) For a child 15 years of age but below 18, the hours of work shall not be more than eight (8) hours a day, and in
no case beyond forty (40) hours a week; and
(c) No child below 15 years of age shall be allowed to work between eight (8) o’clock in the evening and six (6)
o’clock in the morning of the following day and no child 15 years of age but below 18 shall be allowed to work
between ten (10) o’clock in the evening and six (6) o’clock in the morning of the following day.
What is the prohibition of employing minors in certain undertakings and advertisements?
No child below 18 years of age is allowed to be employed as a model in any advertisement directly or indirectly
promoting alcoholic beverages, intoxicating drinks, tobacco and its by-products, gambling or any form of violence or
pornography.
L.
HOUSEHELPERS
a r
(Labor Code as amended by R.A. No. 7655,
An Act Increasing the Minimum Wage of Househelpers;
B
See also – Household Service under the Civil Code)
s
an
e
(NOTE: The above provisions of the Labor Code on Househelpers
l
b
cited in the 2014 Syllabus have already been repealed by R.A. No.
10361, otherwise known as “Domestic Workers Act” or “Batas
Ro h
Kasambahay” approved by President Benigno S. Aquino III on
C
January 18, 2013).
an ar
• What is the coverage of the Kasambahay Law?
Ch
B n
R.A. No. 10361 applies to all domestic workers employed and working within the country. It shall cover all parties to
s a
an employment contract for the services of the following Kasambahay, whether on a live-in or live-out arrangement, such as,
but not limited to:
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l
(a) General househelp;
b n
o
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(b) Yaya;
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(c) Cook;
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(d) Gardener;
an Ba
(e) Laundry person; or
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(f) Any person who regularly performs domestic work in one household on an occupational basis.
Ch s
The following are not covered:
t o bl e
i
(a) Service providers;
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l
(b) Family drivers;
R
se
(c) Children under foster family arrangement; and
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(d) Any other person who performs work occasionally or sporadically and not on an occupational basis.
Who is a domestic worker or kasambahay?
B a
Ch
•
Jo s
“Domestic worker” or “kasambahay” refers to any person engaged in domestic work within an employment
e
.
relationship, whether on a live-in or live-out arrangement, such as, but not limited to, general househelp, "yaya", cook, gardener,
f bl
or laundry person, but shall exclude service providers, family drivers, children who are under foster family arrangement, or any
person who performs domestic work only occasionally or sporadically and not on an occupational basis.
o Ro
This term shall not include children who are under foster family arrangement which refers to children who are living
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with a family or household of relative/s and are provided access to education and given an allowance incidental to education, I.e.,
a
P
"baon", transportation, school projects, and school activities.
B
Ch
Because of these new terminologies prescribed in the law, the use of the term “househelper” may no longer be legally
correct.
es
• Is the employment contract required to be in writing?
Yes. The employment contract must be in writing and should contain the conditions set by law. b l
• What are the rights and privileges of a kasambahay?
R o
an
The rights and privileges of the Kasambahay are as follows:
Ch
(a) Minimum wage;
(b) Other mandatory benefits, such as the daily and weekly rest periods, service incentive leave, and 13 th month pay;
(c) Freedom from employers' interference in the disposal of wages;
(d) Coverage under the SSS, PhilHealth and Pag-IBIG laws;
(e) Standard of treatment;
(f) Board, lodging and medical attendance;
(g) Right to privacy;
(h) Access to outside communication;
(i) Access to education and training;
(j) Right to form, join, or assist labor organization;
(k) Right to be provided a copy of the employment contract;
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2015 BAR EXAMS

(I) Right to certificate of employment;

(m) Right to terminate the employment; and
(n) Right to exercise their own religious beliefs and cultural practices.
The foregoing rights and privileges are discussed below.
• What is the minimum wage of kasambahay?
Under the Kasambahay Law, the following are the minimum wages of kasambahays:
(a) Two thousand five hundred pesos (P2,500.00) a month for those employed in the National Capital Region (NCR);
(b) Two thousand pesos (P2,000.00) a month for those employed in chartered cities and first class municipalities; and
(c) One thousand five hundred pesos (P1,500.00) a month for those employed in other municipalities.
• Are the minimum wages subject to review by the RTWPBs or Regional Boards?
Yes. After one (1) year from the effectivity of the Kasambahay Law, and periodically thereafter, the Regional
Tripartite and Productivity Wage Boards (RTPWBs) shall review, and if proper, determine and adjust the minimum wage
rates of domestic workers.”

a r
What are some important principles on wage of kasambahay?
B
s
 Frequency of payment of wages. - The wages of the Kasambahay shall be paid at least once a month. This is
an
l e
so because the minimum wage rates are on a monthly basis.
 The equivalent minimum daily wage rate of the Kasambahay shall be determined by dividing the applicable
b
minimum monthly rate by thirty (30) days.
Ro h
 The amount of the minimum wage depends on the geographical area where the Kasambahay works.
 Payment of wages:
an r
1. To whom paid. - It should be made on time directly to the Kasambahay to whom they are due in cash at
least once a month.
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Ch
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2. Deductions, prohibition; when allowed. - The employer, unless allowed by the Kasambahay through a
s a
written consent, shall make no deductions from the wages other than that which is mandated by law such as
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for SSS, Philhealth or Pag-IBIG contributions.
l
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3. Mode of payment. - It should be paid in cash and not by means of promissory notes, vouchers, coupons,
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tokens, tickets, chits, or any object other than the cash wage as provided for under this Act.
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4. Pay slip. – The employer shall at all times provide the Kasambahay with a copy of the pay slip containing the
an u
amount paid in cash every pay day, and indicating all deductions made, if any. The copies of the pay slip
Ba
shall be kept by the employer for a period of three (3) years.
Ch G
5. Prohibition on Interference in the disposal of wages. – It shall be unlawful for the employer to interfere
s
with the freedom of the Kasambahay in the disposition of his/her wages, such as:
o e
(a) Forcing, compelling, or obliging the Kasambahay to purchase merchandise, commodities or other
l
t b
properties from the employer or from any other person; or
i
(b) Making use of any store or services of such employer or any other person.
o
l R
6. Prohibition against withholding of wages. – It shall be unlawful for an employer, directly or indirectly, to
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withhold the wages of the Kasambahay. If the Kasambahay leaves without any justifiable reason, any unpaid
a
salary for a period not exceeding fifteen (15) days shall be forfeited. Likewise, the employer shall not induce
B
Ch
the Kasambahay to give up any part of the wages by force, stealth, intimidation, threat or by any other means
Jo s
whatsoever.
e
What are important terms and conditions of employment of kasambahay?
.
•
f bl
The following is a rundown of the basic terms and conditions that should be observed in the employment of a
Kasambahay:
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a. Employable age. - Children whose age is below 15 years are absolutely prohibited to work as Kasambahay.
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b. Normal daily hours of work. – Because R.A. No. 10361 does not contain any provision on the number of normal
a
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hours of work that a Kasambahay should render in a day but merely prescribes said daily rest period of eight (8)
B
Ch
hours per day, it may be concluded that the Kasambahay should work for at least a total of sixteen (16) hours per
day as normal hours of work. However, it must be noted that the Labor Code does not contain any provision on the
normal hours of work of househelpers. Article 1695 of the Civil Code, however, specifically provides that
es
househelpers shall not be required to work for more than ten (10) hours a day. Since R.A. No. 10361, a special
b
law, is the most recent piece of legislation, it should prevail over the general provision of the Civil Code. l
c. Normal daily hours of work for working child-kasambahay is eight (8) hours per day.
R o
an
d. 13th month pay. - The Kasambahay who has rendered at least one (1) month of service is entitled to a 13th
month pay which shall not be less than one-twelfth (1/12) of his/her total basic salary earned in a calendar year.
The 13th month pay shall be paid not later than December 24 of every year or upon separation from employment.
Ch
e. Daily rest period. – The Kasambahay shall be entitled to an aggregate daily rest period of eight (8) hours.
f. Weekly rest period. - The Kasambahay shall be entitled to at least twenty-four (24) consecutive hours of rest in
a week. The employer and the Kasambahay shall agree in writing on the schedule of the weekly rest day but the
preference of the Kasambahay, when based on religious grounds, shall be respected.
g. Service incentive leave. - A Kasambahay who has rendered at least one (1) year of service shall be entitled to an
annual service incentive leave of at least five (5) days with pay. Any unused portion of said annual leave shall not
be cumulative or carried over to the succeeding years. Unused leaves shall not be convertible to cash.
h. Social security benefits. - A Kasambahay who has rendered at least one (1) month of service shall be covered by
the Social Security System (SSS), Employees Compensation Commission (ECC), Philippine Health Insurance
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2015 BAR EXAMS

Corporation (PhilHealth), and Home Development Mutual Fund or Pag-IBIG, and shall be entitled to all the benefits
in accordance with their respective policies, laws, rules and regulations.
i. Obligation of employer to register and enrol with SSS, PhilHealth, and Pag-IBIG. - As employer of the
Kasambahay, he/she shall register himself/herself with, and enroll the latter as his/her employee to the SSS,
PhilHealth, and Pag-IBIG.
j. Deposits for loss or damage. - It shall be unlawful for the employer or any other person to require a Kasambahay
to make deposits from which deductions shall be made for the reimbursement of loss or damage to tools, materials,
furniture and equipment in the household.
k. Standard of treatment. - The Kasambahay shall be treated with respect by the employer or any member of the
household. He/she shall not be subjected to any kind of abuse, including repeated verbal or psychological, nor be
inflicted with any form of physical violence or harassment or any act tending to degrade his/her dignity, as defined
under the Revised Penal Code, Violence Against Women and their Children Law (R.A. No. 9262), Special
Protection of Children Against Child Abuse, Exploitation and Discrimination Act (R.A. No. 7610) as amended by
R.A. No. 9231, Anti-Trafficking in Persons Act of 2003 (R.A. No. 9208), and other applicable laws.
r
l. Board, lodging and medical attendance. - The employer shall provide for the basic necessities of the
Ba
Kasambahay, to include the following:
(1) At least three (3) adequate meals a day, taking into consideration the Kasambahay's religious beliefs and
cultural practices;
s
an
e
(2) Humane sleeping condition that respects the person's privacy for live-in arrangement; and
l
b
(3) Appropriate rest and medical assistance in the form of first-aid medicines, in case of illnesses and injuries
sustained during service without loss of benefits.
Ro h
m. Opportunities for education and training. - The Kasambahay shall be afforded the opportunity to finish basic
C
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education, which shall consist of elementary and secondary education. He/she may be allowed access to alternative learning
a
systems and, as far as practicable, higher education or technical vocational education and training.
Ch
B n
n. Membership in labor organization. - The Kasambahay shall have the right to join a labor organization of his/her
s
own choosing for purposes of mutual aid and collective negotiation.
e a
l
n
r. Health and safety. - The employer shall safeguard the safety and health of the Kasambahay in accordance with the
b
standards which the DOLE shall develop through the Bureau of Working Conditions (BWC) and the Occupational Safety and
o
ia r
Health Center (OSHC) within six (6) months from the promulgation of this IRR. The said standards shall take into account the
R
peculiar nature of domestic work.
an u
s. Prohibition on debt bondage. - It shall be unlawful for the employer or any person acting on his/her behalf to place
Ba
G
the Kasambahay under debt bondage. “Debt bondage” refers to the rendering of service by the Kasambahay as security or
Ch
payment for a debt where the length and nature of service is not clearly defined or when the value of the service is not
reasonably applied in the payment of the debt.
s
o l e
t. Assignment to non-household work. - The employer shall not assign the Kasambahay to work, whether in full or
t b
i
part-time, in a commercial, industrial or agricultural enterprise at a wage rate lower than that provided for agricultural or non-
agricultural workers.
o
l R
se
If so assigned, the Kasambahay will no longer be treated as such but as a regular employee of the
an r
establishment.
B a
Ch
What are the rules on termination of Kasambahay?
Jo
•
a. Pre-termination of employment. – The following rules shall be observed:
e s
f. bl
(1) In case the duration of employment is specified in the contract, the Kasambahay and the employer may mutually
agree upon notice to terminate the contract of employment before the expiration of its term.
o Ro
(2) In case the duration is not determined by stipulation or by nature of service, the employer or the Kasambahay may
r
give notice to end the employment relationship five (5) days before the intended termination of employment.
an a r
P
b. Termination of employment initiated by the Kasambahay. - The Kasambahay may terminate the employment
B
Ch
relationship at any time before the expiration of the contract for any of the following causes:
(1) Verbal or emotional abuse of the Kasambahay by the employer or any member of the household;
es
(2) Inhuman treatment including physical abuse of the Kasambahay by the employer or any member of the household;
b
(3) Commission of a crime or offense against the Kasambahay by the employer or any member of the household; l
the law;
R o
(4) Violation by the employer of the terms and conditions of the employment contract and other standards set forth in
an
(5) Any disease prejudicial to the health of the Kasambahay, the employer, or members of the household; and
(6) Other causes analogous to the foregoing.
Ch
If the Kasambahay leaves without cause, any unpaid salary due, not exceeding the equivalent of 15 days work, shall
be forfeited. In addition, the employer may recover from the Kasambahay deployment expenses, if any, if the services have been
terminated within six (6) months from employment.
c. Termination of employment initiated by the employer. - An employer may terminate the employment of the
Kasambahay at any time before the expiration of the contract for any of the following causes:
(1) Misconduct or willful disobedience by the Kasambahay of the lawful order of the employer in connection with the
former's work;
(2) Gross or habitual neglect or inefficiency by the Kasambahay in the performance of duties;
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2015 BAR EXAMS

(3) Fraud or willful breach of the trust reposed by the employer on the Kasambahay;
(4) Commission of a crime or offense by the Kasambahay against the person of the employer or any immediate
member of the employer's family;
(5) Violation by the Kasambahay of the terms and conditions of the employment contract and other standards set forth
under the law;
(6) Any disease prejudicial to the health of the Kasambahay, the employer, or members of the household; and
(7) Other causes analogous to the foregoing.
If the employer dismissed the Kasambahay for reasons other than the above, he/she shall pay the Kasambahay the
earned compensation plus indemnity in the amount equivalent to fifteen (15) days work.
d. Invalid ground for termination. - Pregnancy and marriage of the Kasambahay are not valid grounds for
termination of employment.
e. Employment Certification. - Upon the termination of employment, the employer shall issue the Kasambahay,
within five (5) days from request, a certificate of employment indicating the nature, duration of the service and work description.
a rM.
B
EMPLOYMENT OF HOMEWORKERS
s
an
• What are important terms that should be noted in employment of homeworkers?
l e
a. “Industrial homeworker.” – It refers to a worker who is engaged in industrial homework.
b
b. “Industrial homework.” – It refers to a system of production under which work for an employer or contractor is
Ro h
carried out by a homeworker at his/her home. Materials may or may not be furnished by the employer or contractor. It differs
C
from regular factory production principally in that, it is a decentralized form of production where there is ordinarily very little
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supervision or regulation of methods of work.
a
c. “Home.” - It means any nook, house, apartment or other premises used regularly, in whole or in part, as a dwelling
Ch
B n
place, except those situated within the premises or compound of an employer, contractor/subcontractor and the work performed
s
therein is under the active or personal supervision by or for the latter.
e a
l
n
d. “Field personnel.” – It refers to a non-agricultural employee who regularly performs his duties away from the
b
principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined
o
ia r
with reasonable certainty.
R
e. “Employer.” – It refers to any natural or artificial person who, for his own account or benefit, or on behalf of any
an u
person residing outside the Philippines, directly or indirectly, or through any employee, agent, contractor, subcontractor or any
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other person:
Ch G
1. delivers or causes to be delivered any goods, articles or materials to be processed or fabricated in or about a home
s
and thereafter to be returned or to be disposed of or distributed in accordance with his direction; or
o e
2. sells any goods, articles or materials for the purpose of having such goods or articles processed in or about a home
l
t b
and then repurchases them himself or through another after such processing.
l i R o
f. “Contractor” or “subcontractor.” - It refers to any person who, for the account or benefit of an employer, delivers
or causes to be delivered to a homeworker, goods or articles to be processed in or about his home and thereafter to be returned,
se
disposed of or distributed in accordance with the direction of the employer.
an ar
g. “Processing.” - It refers to manufacturing, fabricating, finishing, repairing, altering, packing, wrapping or handling in
B
Ch
any way connected with the production or preparation of an article or material.
Jo s
• How is homework paid?
e
f. bl
Immediately upon receipt of the finished goods or articles, the employer is required to pay the homeworker or the
contractor or subcontractor, as the case may be, for the work performed less the corresponding homeworker’s share of SSS,
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PhilHealth and ECC premium contributions which should be remitted by the contractor or subcontractor or employer to the SSS
with the employer’s share. However, where payment is made to a contractor or subcontractor, the homeworker should likewise
r an r
be paid immediately after the goods or articles have been collected from the workers.
a
P
What are prohibited homeworks?
B
•
Ch s
No homework shall be performed on the following:
1. Explosives, fireworks and articles of like character;
l e
b
2. Drugs and poisons; and
o
Article 58. Definition of Terms. As used in this Title:
3. Other articles, the processing of which requires exposure to toxic substances. "Apprenticeship" means practical training on the job supplemented by
R
related theoretical instruction.
An "apprentice" is a worker who is covered by a written apprenticeship
an
N. agreement with an individual employer or any of the entities
recognized under this Chapter.
APPRENTICES AND LEARNERS An "apprenticeable occupation" means any trade, form of employment
Ch
or occupation which requires more than three (3) months of practical
• What are the distinctions between learnership and apprenticeship? training on the job supplemented by related theoretical instruction.
"Apprenticeship agreement" is an employment contract wherein the
employer binds himself to train the apprentice and the apprentice in
The following are the distinctions: turn accepts the terms of training.
1. Practical training. Both learnership and apprenticeship involve practical training on-the-job.
2. Training agreement. Learnership is governed by a learnership agreement; while apprenticeship is governed by an
apprenticeship agreement.
2. Occupation. Learnership involves learnable occupations consisting of semi-skilled and other industrial occupations
which are non-apprenticeable; while apprenticeship concerns apprenticeable occupations or any trade, form of
employment or occupation approved for apprenticeship by the DOLE Secretary.
Article 73. Learners defined. Learners are persons hired as trainees in semi-skilled
36 and other industrial occupations which are non-apprenticeable and which may be
learned through practical training on the job in a relatively short period of time which
shall not exceed three (3) months.
2015 BAR EXAMS

3. Theoretical instructions. Learnership may or may not be supplemented by related theoretical instructions; while
apprenticeship should always be supplemented by related theoretical instructions.
4. Ratio of theoretical instructions and on-the-job training. For both learnership and apprenticeship, the normal
ratio is one hundred (100) hours of theoretical instructions for every two thousand (2,000) hours of practical or on-
the-job training. Theoretical instruction time for occupations requiring less than two thousand (2,000) hours for
proficiency should be computed on the basis of such ratio.
5. Competency-based system. Unlike in apprenticeship, it is required in learnership that it be implemented based on
the TESDA-approved competency-based system.
6. Duration of training. Learnership involves practical training on the job for a period not exceeding three (3)
months; while apprenticeship requires for proficiency, more than three (3) months but not over six (6) months
of practical training on the job.
7. Qualifications. The law does not expressly mention any qualifications for learners; while the following
qualifications are required to be met by apprentices under Article 59 of the Labor Code:
(a) Be at least fourteen (14) years of age;
a r
(b) Possess vocational aptitude and capacity for appropriate tests; and
(c) Possess the ability to comprehend and follow oral and written instructions.
B
s
8. Circumstances justifying hiring of trainees. Unlike in apprenticeship, in learnership, the law, Article 74 of the
an
e
Labor Code, expressly prescribes the pre-requisites before learners may be validly employed, to wit:
b l
(a) When no experienced workers are available;
(b) The employment of learners is necessary to prevent curtailment of employment opportunities; and
Ro
(c) The employment does not create unfair competition in terms of labor costs or impair or lower working
standards.
C h
an ar
9. Limitation on the number of trainees. In learnership, a participating enterprise is allowed to take in learners only
Ch
B n
up to a maximum of twenty percent (20%) of its total regular workforce. No similar cap is imposed in the case of
s a
apprenticeship.
l e
10. Option to employ. In learnership, the enterprise is obliged to hire the learner after the lapse of the learnership
b n
period; while in apprenticeship, the enterprise is given only an “option” to hire the apprentice as an employee.
o
ia r
11. Wage rate. The wage rate of a learner or an apprentice is set at seventy-five percent (75%) of the statutory
R
minimum wage. Article 72. Apprentices without compensation. The Secretary of Labor and Employment may authorize the hiring of apprentices
n PERSONS WITH u
without compensation whose training on the job is required by the school or training program curriculum or as requisite for
graduation or board examination.
a a
G es
O.
B
Ch
DISABILITY
(R.A. No. 7277, as Amended by R.A. No. 9442)
• Who are persons with disability (PWDs)?
t Roo b l
i
“Persons with Disability” are those suffering from restriction or different abilities, as a result of a mental, physical or
l an
sensory impairment, to perform an activity in the manner or within the range considered normal for a human being.
e
Article 78. Definition. Handicapped workers are those whose earning capacity is impaired by age
r
• What is impairment?
s
or physical or mental deficiency or injury.
a
“Impairment” refers to any loss, diminution or aberration of psychological, physiological, or anatomical structure or
B
h
Jo C
function.
What is disability?
e s
.
•
l
f b
“Disability” means (1) a physical or mental impairment that substantially limits one or more psychological,
physiological or anatomical functions of an individual or activities of such individual; (2) a record of such an impairment; or (3)
o Ro
being regarded as having such an impairment.
r an r
• What is handicap?
a
P
“Handicap” refers to a disadvantage for a given individual, resulting from an impairment or a disability that limits or
h B
prevents the function or activity that is considered normal given the age and sex of the individual.
s
Article 79. When employable. Handicapped workers
b. C
may be employed when their employment is necessary
e
to prevent curtailment of employment opportunities and
l
when it does not create unfair competition in labor costs
RIGHTS OF PERSONS WITH DISABILITY
b
or impair or lower working standards.
o
• What are the rights of PWDs?
R
Under the law, PWDs are entitled to equal opportunity for employment. Consequently, no PWD shall be denied access
a n
to opportunities for suitable employment. A qualified employee with disability shall be subject to the same terms and
conditions of employment and the same compensation, privileges, benefits, fringe benefits, incentives or allowances as
Ch
a qualified able-bodied person.
• What is the wage rate of PWDs?
The wage rate of PWDs is 100% of the applicable minimum wage.
• What is the wage rate of PWD if hired as apprentice or learner?
A PWD hired as an apprentice or learner shall be paid not less than seventy-five percent (75%) of the applicable
minimum wage.
Article 80. Employment agreement. Any employer who employs handicapped workers shall enter
into an employment agreement with them, which agreement shall include:
The names and addresses of the handicapped workers to be employed;
The rate to be paid the handicapped workers which shall not be less than seventy five (75%)
percent of the applicable legal minimum wage; 37
The duration of employment period; and
The work to be performed by handicapped workers.
The employment agreement shall be subject to inspection by the Secretary of Labor or his duly
authorized representative.
2015 BAR EXAMS

c.
PROHIBITION ON DISCRIMINATION
AGAINST PERSONS WITH DISABILITY
• What is the rule on discrimination against employment of PWDs?

No entity, whether public or private, shall discriminate against a qualified PWD by reason of disability in regard to job
application procedures, the hiring, promotion, or discharge of employees, employee compensation, job training, and other terms,
conditions and privileges of employment. The following constitute acts of discrimination:
(a) Limiting, segregating or classifying a job applicant with disability in such a manner that adversely affects his work
opportunities;
(b) Using qualification standards, employment tests or other selection criteria that screen out or tend to screen out a
PWD unless such standards, tests or other selection criteria are shown to be job-related for the position in
question and are consistent with business necessity;
(c) Utilizing standards, criteria, or methods of administration that:
a r
(1) have the effect of discrimination on the basis of disability; or
B
(2) perpetuate the discrimination of others who are subject to common administrative control.
s
(d) Providing less compensation, such as salary, wage or other forms of remuneration and fringe benefits, to a
an
e
qualified employee with disability, by reason of his disability, than the amount to which a non-disabled person
b l
performing the same work is entitled;
(e) Favoring a non-disabled employee over a qualified employee with disability with respect to promotion, training
Ro h
opportunities, study and scholarship grants, solely on account of the latter’s disability;
C
(f) Re-assigning or transferring an employee with a disability to a job or position he cannot perform by reason of his
an r
disability;
a
B n
(g) Dismissing or terminating the services of an employee with disability by reason of his disability unless the
Ch
employer can prove that he impairs the satisfactory performance of the work involved to the prejudice of the
e s a
business entity; provided, however, that the employer first sought to provide reasonable accommodations for
l
n
persons with disability;
b
ia r
(h) Failing to select or administer in the most effective manner employment tests which accurately reflect the skills,
R o
aptitude or other factor of the applicant or employee with disability that such tests purports to measure, rather than
the impaired sensory, manual or speaking skills of such applicant or employee, if any; and
an u
(i) Excluding PWD from membership in labor unions or similar organizations.
G Ba
Ch s
------------oOo------------
t o bl e
l i R o
se Ch
an B ar
. Jo bl
e s
o f Ro
P r an B a r
Ch es
b l
R o
an
Ch
38
2015 BAR EXAMS

TOPIC NO. 4
TERMINATION OF EMPLOYMENT
A.
EMPLOYER-EMPLOYEE RELATIONSHIP
1.
Four-Fold Test
• What is the 4-fold test of existence of employer-employee relationship?
1. Selection and engagement of the employee;
2. Payment of wages or salaries;
3. Exercise of the power of dismissal; or
4. Exercise of the power to control the employee’s conduct.
a r
These tests, however, are not fool-proof as they admit of exceptions.
B
The control test is the controlling test which means that the employer controls or has reserved the right to control
s
e n
the employee not only as to the result of the work to be done but also as to the means and methods by which the same is to be
l
a
accomplished.

b
What is the 2-tiered test of employment relationship?
Ro
1
The two-tiered test enunciated in Francisco v. NLRC, is composed of:
C h
an r
(1) The putative employer’s power to control the employee with respect to themeans and methods by which
a
the work is to be accomplished [control test]; and
Ch
B n
2
(2) The underlying economic realities of the activity or relationship[broader economic reality test].
s a
Employment relationship under the control test is determined by asking whether “the person for whom the
e
services are performed reserves the right to control not only the end to be achieved but also themanner and means to
l
n
3
b
be used in reaching such end.”
a
The broader economic reality test calls for the determination of the nature of the relationship based on the
Ro i
circumstances of the whole economic activity, namely:
u
(1) The extent to which the services performed are an integral part of the employer’s business;
an r
(2) The extent of the worker’s investment in equipment and facilities;
a
G B
(3) The nature and degree of control exercised by the employer;
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(4) The worker’s opportunity for profit and loss;
s
o e
(5) The amount of initiative, skill, judgment or foresight required for the success of the claimed independent
l
enterprise;
it R b
(6) The permanency and duration of the relationship between the worker and the employer; and
o
l
(7) The degree of dependency of the worker upon the employer for his continued employment in that line of
4
business.
e an r
Under the economic reality test, the proper standard of economic dependence is whether the worker is
s a
5
dependent on the alleged employer for his continued employment in that line of business.
h B
o
Following the broader economic reality test, the Supreme Court found petitioner in Orozco v. The Fifth Division
J C s
of the Honorable Court of Appeals,6 who is a columnist in the Philippine Daily Inquirer (PDI), not an employee of PDI but
e
. l
an independent contractor. Thus:
f b
“Petitioner’s main occupation is not as a columnist for respondent but as a women’s rights advocate
o
o
working in various women’s organizations. Likewise, she herself admits that she also contributes articles to other
R
publications. Thus, it cannot be said that petitioner was dependent on respondent PDI for her continued
r an r
employment in respondent’s line of business.
a
P
“The inevitable conclusion is that petitioner was not respondent PDI’s employee but an independent
B
Ch
contractor, engaged to do independent work.”
es
l
• Is it necessary to have a written contract of employment in order to establish employer-employee relationship?
b
No. It may be an oral or written contract. A written contract is not necessary for the creation and validity of the
Ro
relationship.
The only exception is in the case of Kasambahay where it is required that the contract of employment should
an
be in writing.
2.
Ch
KINDS OF EMPLOYMENT
 What are the general classifications of employment?

There are five (5) classifications of employment:
1 G.R. No. 170087, Aug. 31, 2006.

2 Id.
3 Id.
4 Id.
5 Id.
6 G.R. No. 155207, April 29, 2005.
39
2015 BAR EXAMS

(a) Regular employees referring to those who have been “engaged to perform activities which are usually necessary
or desirable in the usual business or trade of the employer”;
(b) Project employees referring to those “whose employment has been fixed for a specific project or undertaking, the
completion or termination of which has been determined at the time of the engagement of the employee”;
(c) Seasonal employees referring to those who work or perform services which are seasonal in nature, and the
employment is for the duration of the season;
(d) Casual employees referring to those who are not regular, project, or seasonal employees;
(e) Fixed-term employees whose term is freely and voluntarily determined by the employer and the employee.
a.
PROBATIONARY EMPLOYMENT
 How is probationary period, say, of 6 months computed?
The 6-month probationary period should be reckoned “from the date of appointment up to the same calendar date
of the 6th month following.”
a r
B
 May probationary period be extended?
s
Yes, but only upon the mutual agreement by the employer and the probationary employee.
an

l e
What is the effect of allowing a probationary employee to work beyond the probationary period?
b
He is considered a regular employee.

Ro
What is the effect if there is no written contract providing for probationary employment?
C h
an ar
If there is no written contract, the employee is considered a regular employee from day one of his employment. And
B n
even if there is one, he is deemed regular if there is no stipulation on probationary period.

Ch s
What are the grounds to terminate probationary employment?
e a
l
n
Under Article 281, a probationary employee may be terminated only on three (3) grounds, to wit:
1. For a just cause; or
b
o
ia r
2. For authorized cause; or
R
3. When the probationary employee fails to qualify as a regular employee in accordance with reasonable
an u
standards made known by the employer to the employee at the start of the employment.
G Ba
 Is procedural due process required in termination of probationary employment?
Ch s
Yes, but only in the case of Numbers 1 and 2 above.
No, in the case of No. 3 above.
t o bl e
i
 When should termination of probationary employment be made?
o
l R
Termination to be valid must be done prior to lapse of probationary period. Termination a few days after lapse of
se an r
probationary period cannot be done without due process as he has already become a regular employee by that time.
b.
B a
Jo Ch
REGULAR EMPLOYMENT
e s
.
 How does one become a regular employee?
f bl
Under the Labor Code, regular employment may be attained in either of three (3) ways, namely:
o Ro
1. By nature of work. - The employment is deemed regular when the employee has been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer.
P r an
2. By period of service. - The employment is reckoned as regular when the employee has rendered at least one (1)
year of service, whether such service is continuous or broken, with respect to the activity in which he is employed
B a r
Ch
and his employment shall continue while such activity exists.
3. By probationary employment. - The employment is considered regular when the employee is allowed to work
es
after a probationary period.
b l
o
 Is the manner or method of paying wage material in determining regularity of employment?
R
No. The manner and method of payment of wage or salary is immaterial to the issue of whether the employee is
an
regular or not.
Ch
c.
PROJECT EMPLOYMENT
 What is the litmus test of project employment?
The litmus test of project employment, as distinguished from regular employment, is whether or not the project
employees were assigned to carry out a specific project or undertaking, the duration and scope of which were specified at
the time the employees were engaged for that project.
A true project employee should be assigned to a project which begins and ends at determined or determinable times
and be informed thereof at the time of hiring.
40
2015 BAR EXAMS

 What are the indicators of project employment?

Either one or more of the following circumstances, among others, may be considered as indicator/s that an employee
is a project employee:
1. The duration of the specific/identified undertaking for which the worker is engaged is reasonably
determinable.
2. Such duration, as well as the specific work/service to be performed, are defined in an employment agreement and
is made clear to the employee at the time of hiring.
3. The work/service performed by the employee is in connection with the particular project or undertaking for
which he is engaged.
4. The employee, while not employed and awaiting engagement, is free to offer his services to any other
employer.
5. A report of the termination of employment in the particular project/undertaking is submitted to the DOLE Regional
Office having jurisdiction over the workplace, within thirty (30) days following the date of his separation from work.
r
6. An undertaking in the employment contract by the employer to pay completion bonus to the project employee as
a
practiced by most construction companies.

B
Is length of service material in determining validity of project employment?
s
an
e
No. Length of service is not a controlling determinant of employment tenure.
l
b
 What are some principles on project employment?
Ro h
1. Project employees should be informed of their status as such at inception of the employment relationship.
2. There must be a written contract of project employment stating the duration of the project employment as well as
an r
the particular work or service to be performed. A written project employment contract is an indispensable
requirement.
a C
Ch
B n
3. Intervals in employment contracts indicate project employment.
s a
4. Continuous, as opposed to intermittent, rehiring shows that employee is regular.
e
5. “Project-to-project” basis of employment is valid.
l
On termination of project employment.
b n
o
ia r
1. Project employees enjoy security of tenure only during the term of their project employment.
R
2. Project employees have presumably become regular employees if they are allowed to work beyond the completion
an u
of the project or any phase thereof to which they were assigned or after the “day certain” which they and their
Ba
G
employer have mutually agreed for its completion. Having become regular employees, they can no longer be
Ch
terminated on the basis of the completion of the project or any phase thereof to which they were deployed.
d.
s
o
SEASONAL EMPLOYMENT
t bl e
i
 Can a seasonal employee become a regular seasonal employee?
o
l R
Yes, provided the following requisites are complied with:
se an r
1. The seasonal employee should perform work or services that are seasonal in nature; and
a
2. They must have also been employed for more than one (1) season.
B
Jo Ch
 Can a regular seasonal worker file an illegal dismissal case in the event he is not hired for the next season?
e s
.
Yes. The reason is, being a regular seasonal employee, the employer should re-hire him in the next season. During
bl
off-season, his employment is deemed suspended and he is considered as being on leave of absence without pay.
o f e.
CASUAL EMPLOYMENT
Ro
P

r What is the most important distinguishing feature of casual employment?
an
The most important distinction is that the work or job for which he was hired is merely incidental to the principal
B a r
Ch s
business of the employer and such work or job is for a definite period made known to the employee at the time of engagement.
 When does a casual employee become regular?
l e
reckoned from the hiring date. Repeated rehiring of a casual employee makes him a regular employee.
ob
Casual employee becomes regular after one year of service by operation of law. The one (1) year period should be
f.
R
an
FIXED-TERM EMPLOYMENT
Ch
 What are the requisites in order for fixed-term employment to be valid?
The two (2) requisites or criteria for the validity of a fixed-term contract of employment are as follows:
1. The fixed period of employment was knowingly and voluntarily agreed upon by the parties, without any
force, duress or improper pressure being brought to bear upon the employee and absent any other
circumstances vitiating his consent; or
2. It satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with
no moral dominance whatever being exercised by the former on the latter.
41
2015 BAR EXAMS

 Is fixed-term employment valid if the job is directly related to the principal business of the employer?
Yes. Fixed-term employment is the only exception to the rule that one becomes regular if he is made to perform activities
directly related to the principal business of the employer (Regularity by virtue of nature of work)
 When does a fixed-term employee become regular?
1. When he is allowed to work beyond the agreed fixed term.
2. When there are successive renewals of fixed-period contracts.
NOTE: The practice of hiring of employees on a uniformly fixed 5-month basis and replacing them upon the expiration of
their contracts with other workers with the same employment status circumvents their right to security of tenure.
3.
JOB CONTRACTING
 Is job contracting valid if the contractor-supplied employees are engaged to perform not merely peripheral but core
r
jobs with the principal?
Ba
Yes, per the 2012 case of Digital Telecommunications Philippines, Inc. v. Digitel Employees Union (DEU), where
the Court recognized the management prerogative to farm out any of its activities, regardless of whether such activity is
s
peripheral or core in nature.
b l e
DEPARTMENT
b.
ORDER NO. 18-A (Series of 2011)
a n

n
Ro
What is this issuance?
r C h
This is the prevailing implementing rules on legitimate job contracting.
a c. a
C

h
e
What is this issuance? s
B
DEPARTMENT CIRCULAR NO. 01-12
a n
l
b n
This was issued by the DOLE Secretary to clarify that Department Order No. 18-A, Series of 2011, is not applicable to
o a
i
Business Processing Outsourcing (BPO)/Knowledge Process Outsourcing (KPO) and the Construction Industry
because:
R
an u r
(1) BPOs and KPOs since these companies may hire employees in accordance with applicable laws, and maintain
a
these employees based on business requirements, which may or may not be for different clients of the BPOs at different periods
h
of the employees' employment.
C G s
B
(2) the Construction Industry because the licensing and the exercise of regulatory powers over the construction
o e
industry are lodged with the Philippine Contractors Accreditation Board (PCAB), which is under the Construction Industry
l
t Ro b
Authority of the Philippines (ClAP), and not with the DOLE. Thus, the DOLE, through its regional offices, shall not require
i
contractors licensed by PCAB in the Construction Industry to register under D.O. 18-A, Series of 2011. Moreover, findings of
l and.
violation/s on labor standards and occupational health and safety standards shall be coordinated with PCAB for its appropriate
e
action, including the possible cancellation/suspension of the contractor’s license.
r
o C s h s
B a
J
TRILATERAL RELATIONSHIP IN JOB CONTRACTING
e
. l
 What is meant by trilateral relationship?
o f o b
As distinguished from employment contract which is “bilateral” in nature, involving as it does only two (2) parties,
namely: (1) the employer, and (2) the employee, in legitimate job contracting, there are three (3) parties involved, to wit:
R
r an r
1. The principal who decides to farm out a job, work or service to a contractor;
a
P
2. The contractor who has the capacity to independently undertake the performance of the job, work or service; and
h B
3. The contractual workers engaged by the contractor to accomplish the job, work or service.
e.
C CONTRACTING es
EFFECTS OF LABOR-ONLY
LEGITIMATE JOB CONTRACTING. b l

R o
What are the requisites of legitimate job contracting?
contractor.
a n
(1) The contractor must be duly registered with the DOLE. If not registered, the contractor is presumed a labor-only
Ch
(2) The contractor carries a distinct and independent business and undertakes to perform the job, work or service
on its own responsibility, according to its own manner and method, and free from control and direction of
the principal in all matters connected with the performance of the work except as to the results thereof;
(3) The contractor has substantial capital and/or investment in the form of tools, equipment, machineries, work
premises, and other materials which are necessary in the conduct of the business; and
(4) The Service Agreement between principal and contractor should ensure compliance with all the rights and
benefits of workers under Labor Laws such as labor and occupational safety and health standards, free exercise
of the right to self-organization, security of tenure, and social and welfare benefits.
Absence of any of the foregoing requisites makes it a labor-only contracting arrangement.
42
2015 BAR EXAMS

What is the amount of substantial capital under the new Rules?

1. In the case of corporations, partnerships or cooperatives – paid-up capital stocks/shares of at least P3
Million; or
2. In the case of single proprietorship - a net worth of at least P3 Million.
 “Substantial capital” and “investment in tools, etc.” are two separate requirements.
“Substantial capital” and “investment in tools, equipment, implements, machineries and work premises” should be
treated as two (2) distinct and separate requirements in determining whether there is legitimate job contracting
arrangement.
 May individuals engage in legitimate job contracting?
Yes. Legitimate job contracting may not only be engaged by corporation, partnership or single proprietorship. Individuals
may become legitimate job contractors themselves for as long as they have SPECIAL SKILLS or TALENTS.
 Are individuals engaged as legitimate job contractors required to fulfill the requisites of legitimate job contracting
r
as afore-described?
Ba
NO. They need not be registered as independent contractors with DOLE; they need not have substantial capital. All that
they are required is to have their tools consisting of SPECIAL SKILLS or TALENTS.
s
an

e
What are examples of individuals as independent contractors?
l
1.
b
Sonza v. ABS-CBN Broadcasting Corporation1 - TV and radio talents and others with special talents and skills are
Ro h
not employees but legitimate independent contractors.
C
2. Orozco v. The Fifth Division of the Honorable Court of Appeals 2 - A newspaper columnist is not an employee but
an r
an independent contractor of the newspaper publishing the column.
a
B n
3. Jose Mel Bernarte v. Philippine Basketball Association3 - Basketball or soccer referee or umpire, an independent
Ch s a
contractor.
4.
e
Semblante and Pilar v. CA, Gallera de Mandaue, et al.4 - Cockpit masiador and sentenciador are independent
l
n
contractors.
b
ia r
5. Escasinas v. Shangri-la’s Mactan Island Resort5 - A doctor may be engaged as an independent contractor.
R o
u
Respondent hotel resort, pursuant to Article 157 of the Labor Code which requires that an employer which
an
employs more than 200 workers, should “furnish” its employees with the services of a full-time registered nurse, a part-
G Ba
time physician and dentist, and an emergency clinic, engaged the services of respondent doctor who, in turn, hired
Ch
petitioners as full-time registered nurses. Petitioners contend that they are regular employees of respondent hotel resort.
s
The Supreme Court, in holding that respondent doctor is an independent contractor and that petitioners are employees of
o l e
the doctor and not of respondent hotel resort, declared:
i t b
“Against the above-listed determinants, the Court holds that respondent doctor is a legitimate
o
l
independent contractor. That Shangri-la provides the clinic premises and medical supplies for use of its employees
R
and guests does not necessarily prove that respondent doctor lacks substantial capital and investment. Besides, the
se an r
maintenance of a clinic and provision of medical services to its employees is required under Art. 157, which are not
directly related to Shangri-la’s principal business - operation of hotels and restaurants.
B a
Ch
“As to payment of wages, respondent doctor is the one who underwrites the following: salaries, SSS
Jo s
contributions and other benefits of the staff; group life, group personal accident insurance and life/death insurance
e
for the staff with minimum benefit payable at 12 times the employee’s last drawn salary, as well as value added
. bl
taxes and withholding taxes, sourced from her P60,000.00 monthly retainer fee and 70% share of the service
f
charges from Shangri-la’s guests who avail of the clinic services.
o Ro
“With respect to the supervision and control of the nurses and clinic staff, it is not disputed that a
document, ‘Clinic Policies and Employee Manual’ claimed to have been prepared by respondent doctor exists, to
r an r
which petitioners gave their conformity and in which they acknowledged their co-terminus employment status. It is
thus presumed that said document, and not the employee manual being followed by Shangri-la’s regular workers,
a
P B
governs how they perform their respective tasks and responsibilities.
Ch s
“Contrary to petitioners’ contention, the various office directives issued by Shangri-la’s officers do not
e
imply that it is Shangri-la’s management and not respondent doctor who exercises control over them or that
l
Shangri-la has control over how the doctor and the nurses perform their work. The letter addressed to respondent
b
doctor dated February 7, 2003 from a certain Tata L. Reyes giving instructions regarding the replenishment of
o
emergency kits is, at most, administrative in nature, related as it is to safety matters; while the letter dated May 17,
2004 from Shangri-la’s Assistant Financial Controller, Lotlot Dagat, forbidding the clinic from receiving cash
R
payments from the resort’s guests is a matter of financial policy in order to ensure proper sharing of the proceeds,
an
considering that Shangri-la and respondent doctor share in the guests’ payments for medical services rendered. In
fine, as Shangri-la does not control how the work should be performed by petitioners, it is not petitioners’
Ch
employer.”
1 G.R. No. 138051, June 10, 2004.

2 G.R. No. 155207, Aug. 13, 2008.
3 G.R. No. 192084, Sept. 14, 2011.
4 G.R. No. 196426, Aug. 15, 2011.
5 G.R. No. 178827, March 4, 2009.
43
2015 BAR EXAMS

LABOR-ONLY CONTRACTING.
 When is there labor-only contracting?

(a) The contractor does not have substantial capital or investments in the form of tools, equipment, machineries, work
premises, among others, and the employees recruited and placed are performing activities which are usually
necessary or desirable to the operation of the company, or directly related to the main business of the
principal within a definite or predetermined period, regardless of whether such job, work or service is to be
performed or completed within or outside the premises of the principal; OR
(b) The contractor does not exercise the right of control over the performance of the work of the employee.
NOTE: Even if only one of the two (2) elements above is present, there is labor-only contracting.
 What are the effects of labor-only contracting?

1. The labor-only contractor will be treated as the agent or intermediary of the principal. Since the act of an agent is
the act of the principal, representations made by the labor-only contractor to the employees will bind the principal.
a r
2. The principal will become the employer as if it directly employed the workers supplied by the labor-only contractor
B
to undertake the subcontracted job or service. It will be responsible to them for all their entitlements and benefits
s
under labor laws.
an
l e
3. The principal and the labor-only contractor will be solidarily treated as the direct employer.
b
4. The employees will become employees of the principal, subject to the classifications of employees under Article
Ro h
280 of the Labor Code.
C
 What are the distinctions between legitimate job contracting and labor-only contracting?
an ar
The chief distinctions between legitimate job contracting, on the one hand, and the prohibited labor-only contracting, on
Ch
B n
the other, may be summed up as follows:
s a
1. In the former, no employer-employee relationship exists between the contractual employees of the job contractor
e
l
and the principal; while in the latter, an employer-employee relationship is created by law between the principal and
b n
the contractual employees supplied by the labor-only contractor.
o
ia r
2. In the former, the principal is considered only an “indirect employer,” as this term is understood under Article 107 of
R
the Labor Code; while in the latter, the principal is considered the “direct employer” of the contractual employees in
u
accordance with the last paragraph of Article 106 of the Labor Code.
an Ba
3. In the former, the joint and several obligation of the principal and the legitimate job contractor is only for a limited
Ch G
purpose, that is, to ensure that the employees are paid their wages. Other than this obligation of paying the wages,
s
the principal is not responsible for any claim made by the contractual employees; while in the latter, the principal
o e
becomes jointly and severally or solidarily liable with the labor-only contractor to the latter’s employees in the same
l
t
manner and extent that the principal is liable to employees directly hired by him/her, as provided in Article 106 of
b
i
the Labor Code, as amended.
o
l
4. In the former, the legitimate job contractor undertakes to perform a specific job for the principal; while in the latter,
R
se
the labor-only contractor merely provides, supplies, recruits and places the personnel to work for the principal.
an ar
 What are the prohibitions other than labor-only contracting?
B
Jo Ch
Contracting out of jobs, works or services when not done in good faith and not justified by the exigencies of
the business such as the following:
e s
. bl
(1) Contracting out of jobs, works or services when the same results in the termination or reduction of regular
f
employees and reduction of work hours or reduction or splitting of the bargaining unit.
o Ro
(2) Contracting out of work with a "Cabo." "Cabo" refers to a person or group of persons or to a labor group
which, in the guise of a labor organization, cooperative or any entity, supplies workers to an employer, with or
r an r
without any monetary or other consideration, whether in the capacity of an agent of the employer or as an
a
P
ostensible independent contractor.
B
Ch
(3) Taking undue advantage of the economic situation or lack of bargaining strength of the contractor's
employees, or undermining their security of tenure or basic rights, or circumventing the provisions of regular
employment, in any of the following instances:
es
(i)
b
Requiring them to perform functions which are currently being performed by the regular employees of l
o
the principal; and
R
(ii) Requiring them to sign, as a precondition to employment or continued employment, an antedated
an
resignation letter; a blank payroll; a waiver of labor standards including minimum wages and social or
welfare benefits; or a quitclaim releasing the principal, contractor or from any liability as to payment of
Ch
future claims.
(4) Contracting out of a job, work or service through an in-house agency.
(5) Contracting out of a job, work or service that is necessary or desirable or directly related to the business or
operation of the principal by reason of a strike or lockout whether actual or imminent.
(6) Contracting out of a job, work or service being performed by union members when such will interfere with,
restrain or coerce employees in the exercise of their rights to self-organization as provided in Art. 248 (c) of
the Labor Code, as amended.
44
2015 BAR EXAMS

(7) Repeated hiring of employees under an employment contract of short duration or under a Service Agreement
of short duration with the same or different contractors, which circumvents the Labor Code provisions on
Security of Tenure.
(8) Requiring employees under a subcontracting arrangement to sign a contract fixing the period of employment
to a term shorter than the term of the Service Agreement, unless the contract is divisible into phases for which
substantially different skills are required and this is made known to the employee at the time of engagement.
(9) Refusal to provide a copy of the Service Agreement and the employment contracts between the contractor
and the employees deployed to work in the bargaining unit of the principal's certified bargaining agent to the
sole and exclusive bargaining agent (SEBA).
(10) Engaging or maintaining by the principal of subcontracted employees in excess of those provided for in the
applicable Collective Bargaining Agreement (CBA) or as set by the Industry Tripartite Council (ITC).
B.
DISMISSAL FROM EMPLOYMENT

a r
What is meant by two-fold due process requirement?
B
Dismissal of employees requires the observance of the two-fold due process requisites, namely:
s
an
e
1. Substantive aspect which means that the dismissal must be for any of the (1) just causes provided under Article
b l
282 of the Labor Code or the company rules and regulations promulgated by the employer; or (2) authorized
causes under Articles 283 and 284 thereof; and
Ro
2. Procedural aspect which means that the employee must be accorded due process, the elements of which are
notice and the opportunity to be heard and to defend himself.
C h
an ar
 What is the distinction between JUST CAUSES and AUTHORIZED CAUSES?
Ch
B n
A dismissal based on a just cause means that the employee has committed a wrongful act or omission; while a
s a
dismissal based on an authorized cause means that there exists a ground which the law itself allows or authorizes to be
e
invoked to justify the termination of an employee even if he has not committed any wrongful act or omission such as installation
l
n
of labor-saving devices, redundancy, retrenchment, closure or cessation of business operations or disease.
b
o
ia r
1.
R
JUST CAUSES
an u
 What are the just causes under the Labor Code?
G Ba
The just causes in the Labor Code are found in the following provisions thereof:
Ch s
(1) Article 282 - (Termination by the Employer) which provides for the following grounds:
o l e
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
t b
i
representative in connection with his work;
o
l
(b) Gross and habitual neglect by the employee of his duties;
R
se an r
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized
a
representative;
B
Jo Ch
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate
member of his family or his duly authorized representatives; and
e s
. bl
(e) Other causes analogous to the foregoing.
o f (2) Article 264(a) - (Prohibited Activities) which provides for the termination of the following:
Ro
(a) Union officers who knowingly participate in an illegal strike and therefore deemed to have lost their employment
r an r
status.
a
P
(b) Any employee, union officer or ordinary member who knowingly participates in the commission of illegal acts
B
Ch
during a strike (irrespective of whether the strike is legal or illegal), is also deemed to have lost his employment
status.
es
b
issued by the DOLE Secretary or the NLRC, may be imposed immediate disciplinary action, including dismissal or l
(3) Article 263(g) - (National Interest Cases) where strikers who violate orders, prohibitions and/or injunctions as are
loss of employment status.
R o
(4) Article 248(e) - (Union Security Clause) where violation of the union security agreement in the CBA may result in
an
termination of employment. Under this clause, the bargaining union can demand from the employer the dismissal of
an employee who commits a breach of union security arrangement, such as failure to join the union or to maintain
Ch
his membership in good standing therein. The same union can also demand the dismissal of a member who
commits an act of disloyalty against it, such as when the member organizes a rival union.
 What are just causes under jurisprudence?
In addition to the just causes mentioned in the Labor Code, just causes are also found in prevailing jurisprudence. The
following may be cited as just causes in accordance with prevailing jurisprudence:
1. Violation of Company Rules and Regulations or Company Code of Discipline.
2. Theft of property owned by a co-employee as distinguished from company-owned property which is considered
serious misconduct.
3. Incompetence, inefficiency or ineptitude.
45
2015 BAR EXAMS

4. Failure to attain work quota.

5. Failure to comply with weight standards of employer.
6. Attitude problem.
 Is dismissal based on Company Code of Discipline or Company Rules and Regulations illegal?
No.
In the 2013 case of Sampaguita Auto Transport Corporation v. NLRC, the Supreme Court pronounced that the
Court of Appeals erred in ruling that the dismissal of private respondent, a bus driver of petitioner, was illegal because the
“grounds upon which petitioners based respondent’s termination from employment, viz.: ‘hindi lahat ng schedule nailalabas,’
[‘]mababa ang revenue ng bus, laging kasama an[g] asawa sa byahe’ and ‘maraming naririnig na kwento tungkol sa kanya, nag-
uutos ng conductor para kumita sa hindi magandang paraan[,]’ xxx are not among those enumerated under Article 282 of the
Labor Code as just causes for termination of employment.” The irregularities or infractions committed by private respondent in
connection with his work as a bus driver constitute serious misconduct or, at the very least, conduct analogous to serious
misconduct, under the above-cited Article 282 of the Labor Code. The requirement in the company rules that: ‘3. to obey traffic
rules and regulations as well as the company policies. 4. to ensure the safety of the riding public as well as the other
vehicles and motorist (sic)’ is so fundamental and so universal that any bus driver is expected to satisfy the requirement
whether or not he has been so informed.
a r
B
I.
SERIOUS MISCONDUCT
s
an
1. REQUISITES.
l e
b
For misconduct or improper behavior to be a just cause for dismissal, the following requisites must concur:
Ro h
1. It must be serious; and
2. It must relate to the performance of the employee’s duties; and
an r C
3. It must show that he has become unfit to continue working for the employer.
a
All the above three (3) requisites must concur.
Ch
B n
2. SOME PRINCIPLES ON SERIOUS MISCONDUCT.
e s a
• Serious misconduct implies that it must be of such grave and aggravated character and not merely trivial or
l
n
unimportant.
b
• Simple or minor misconduct would not justify the termination of the services of an employee.
o
ia r
• Possession or use of shabu or other drugs is a valid ground to terminate employment.
R
• Immorality, as a general rule, is not a just ground to terminate employment. The exception is when such immoral
an u
conduct is prejudicial or detrimental to the interest of the employer.
Ba
• Immoral act committed beyond office hours is a valid ground to terminate employment.
Ch G
• Sexual intercourse inside company premises constitutes serious misconduct.
s
• The act of a 30-year old lady teacher in falling in love with a 16-year old student is not immoral.
o e
• Fighting is a ground for termination but only the instigator or aggressor and not the victim who was constrained to
l
t
defend himself should be dismissed.
b
i
• Challenging superiors to a fight is a just cause for termination.
o
l
• Assaulting another employee is a just cause for termination.
R
• Utterance of obscene, insulting or offensive words constitutes serious misconduct.
se an r
• Gambling within company premises is a serious misconduct.
• Rendering service to business rival is a just cause to terminate employment.
B a
Jo Ch
• Selling products of a competitor is a just cause for termination.
s
• Organizing a credit union by employees in a bank is a serious misconduct.
e
.
• Deceiving a customer for personal gain is a just cause for termination.
bl
• Contracting work in competition with employer constitutes serious misconduct.
f
• Intoxication which interferes with the employee’s work constitutes serious misconduct.
o Ro
• The act of a teacher in pressuring a colleague to change the failing grade of a student is serious misconduct.
• Sexual harassment is a just ground to dismiss.
r an r
• Sleeping while on duty is a ground for termination.
a
P
• Dismissal is too harsh a penalty for eating while at work.
B
Ch
• Pilferage or theft of company-owned property is a just cause to terminate.
s
• Theft of funds or property not owned by employer is not a ground to terminate.
• Act of falsification is a valid ground to terminate employment.
• Punching-in of time cards of other employees is a just cause for termination.
l e
II.
ob
INSUBORDINATION
R
an
OR WILLFUL DISOBEDIENCE OF LAWFUL ORDERS
Ch
1. REQUISITES.
One of the fundamental duties of an employee is to obey all reasonable rules, orders and instructions of the employer.
In order to validly invoke this ground, the following requisites must be complied with, to wit:
1. The employee’s assailed conduct must have been willful or intentional, the willfulness being characterized by a
wrongful and perverse attitude; and
2. The order violated must be based on a reasonable and lawful company rule, regulation or policy and made known
to the employee and must pertain to the duties for which he has been engaged to discharge.
46
2015 BAR EXAMS

2. SOME PRINCIPLES ON INSUBORDINATION.

 Making false allegations in complaint does not constitute insubordination.
 Failure to answer memo to explain constitutes willful disobedience.
 Another notice is required in case of termination on the ground of failure to answer memo to explain.
 Refusal to undergo random drug testing constitutes both serious misconduct and insubordination.
 Refusal to render overtime to meet production deadline constitutes insubordination.
 Refusal to comply with a lawful transfer constitutes insubordination.
III.
GROSS AND HABITUAL NEGLECT OF DUTIES
1. REQUISITES.
The following are the requisites:
(1) There must be negligence which is gross and/or habitual in character; and
(2) It must be work-related as would make him unfit to work for his employer.
r
2. SOME PRINCIPLES ON GROSS AND HABITUAL NEGLECT OF DUTIES.
a
B
 Simple negligence is not sufficient to terminate employment.
s
 The negligence must be gross in character which means absence of that diligence that an ordinarily prudent man would use
an
e
in his own affairs.
b l
 As a general rule, negligence must be both gross and habitual to be a valid ground to dismiss.
 Habituality may be disregarded if negligence is gross or the damage or loss is substantial. “Habitual negligence” implies
Ro h
repeated failure to perform one’s duties for a period of time, depending upon the circumstances.
 Actual damage, loss or injury is not an essential requisite.
an
 Gross negligence may result to loss of trust and confidence.
ar
 Absences, if authorized, cannot be cited as a ground to terminate employment.
C
Ch
B n
 Tardiness or absenteeism, if not habitual, cannot be cited as a ground to terminate employment.
s
 Tardiness or absenteeism, if habitual, may be cited as a ground to terminate employment.
e
 Tardiness or absenteeism, if habitual, may be tantamount to serious misconduct.
a
l
b n
 Absences or tardiness due to emergency, ailment or fortuitous event are justified and may not be cited as just cause to
ia r
terminate employment.
o
 Unsatisfactory or poor performance, inefficiency and incompetence are considered just causes for dismissal only if
R
u
they amount to gross and habitual neglect of duties.
an IV.
Ba
Ch G
ABANDONMENT OF WORK
1. CONCEPT.
s
t o l e
Abandonment is a form of neglect of duty; hence, a just cause for termination of employment under Article 282 [b] of
b
i
the Labor Code.
o
l R
2. REQUISITES.
se an r
To constitute abandonment, two (2) elements must concur, namely:
a
1. The employee must have failed to report for work or must have been absent without valid or justifiable reason; and
B
Jo Ch
2. There must have been a clear intention on the part of the employee to sever the employer-employee relationship
manifested by some overt act.
e s
.
3. SOME PRINCIPLES ON ABANDONMENT.
f bl
Ro
 Mere absence is not enough to constitute abandonment.
o
 Clear intention to sever employment relationship is necessary.
r an r
 Due process in abandonment cases consists only of the service of 2 notices to the employee, viz.:
a
P
a. First notice directing the employee to explain why he should not be declared as having abandoned his job; and
B
Ch
b. Second notice to inform him of the employer’s decision to dismiss him on the ground of abandonment.
 No hearing is required to validly dismiss an employee for abandonment.
es
 Notices in abandonment cases must be sent to employee’s last known address per record of the company. The
employer need not look for the employee’s current whereabouts.
b l
 Immediate filing of a complaint for illegal dismissal praying for reinstatement negates abandonment.
R o
 Lapse of time between dismissal and filing of a case is not a material indication of abandonment. Hence, lapse of 2 years
an
and 5 months or 20 months or 9 months or 8 months before filing the complaint for illegal dismissal is not an indication of
abandonment. Under the law, the employee has a 4-year prescriptive period within which to institute his action for illegal
Ch
dismissal.
 Filing of a case to pre-empt investigation of the administrative case is tantamount to abandonment.
 When what is prayed for in the complaint is separation pay and not reinstatement, the filing of complaint does not
negate abandonment.
 It is abandonment when what is prayed for in the complaint is separation pay and it was only in the position paper that
reinstatement was prayed for.
 Employment in another firm coinciding with the filing of complaint does not indicate abandonment.
 Offer of reinstatement by employer during proceedings before Labor Arbiter and refusal by employee does not indicate
abandonment but more of a symptom of strained relations between the parties.
47
2015 BAR EXAMS

 An employee may be absolved from the charge of abandonment of work but adjudged guilty of AWOL. These two grounds
are separate and distinct from each other.
 An employee who failed to report for work after the expiration of the duly approved leave of absence is considered to have
abandoned his job.
 An employee who failed to comply with the order for his reinstatement is deemed to have abandoned his work.
 An employee who, after being transferred to a new assignment, did not report for work anymore is deemed to have
abandoned his job.
 An employee who deliberately absented from work without leave or permission from his employer for the purpose of looking
for a job elsewhere is deemed to have abandoned his work.
 Imprisonment or detention by military does not constitute abandonment.
 Absence to evade arrest is not a valid justification. To do so would be to place an imprimatur on the employee’s attempt to
derail the normal course of the administration of justice.
V.
FRAUD
1. REQUISITES.
a r
B
s
The following are the requisites of this ground:
an
l e
1. There must be an act, omission, or concealment;
b
2. The act, omission or concealment involves a breach of legal duty, trust, or confidence justly reposed;
Ro h
3. It must be committed against the employer or his/her representative; and
4. It must be in connection with the employees' work.1
an r C
2. SOME PRINCIPLES ON FRAUD.
 Failure to deposit collection constitutes fraud.
a
Ch s
B
a n
 Lack of damage or losses is not necessary in fraud cases. The fact that the employer did not suffer losses from the
dishonesty of the dismissed employee because of its timely discovery does not excuse the latter from any culpability.
e
 Lack of misappropriation or shortage is immaterial in case of unauthorized encashment of personal checks by teller and
l
b n
cashier.
ia r
 Restitution does not have absolutory effect.
R o VI.
an u
WILLFUL BREACH OF TRUST AND CONFIDENCE
G Ba
Ch
1. REQUISITES.
s
For the doctrine of loss of trust and confidence to apply, the following requisites must be satisfied:
o
(1) The employee holds a position of trust and confidence;
t bl e
(2) There exists an act justifying the loss of trust and confidence, which means that the act that betrays the
l i R o
employer’s trust must be real, i.e., founded on clearly established facts;
(3) The employee’s breach of the trust must be willful, i.e., it was done intentionally, knowingly and purposely, without
se
justifiable excuse; and
an ar
(4) The act must be in relation to his work which would render him unfit to perform it.
B
Ch
2. GUIDELINES.
Jo s
As a safeguard against employers who indiscriminately use “loss of trust and confidence” to justify arbitrary dismissal
e
.
of employees, the Supreme Court, in addition to the above elements, came up with the following guidelines for the application of
bl
the doctrine:
o f (1) The loss of confidence must not be simulated;
Ro
(2) It should not be used as a subterfuge for causes which are illegal, improper or unjustified;
(3) It may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and
r an r
(4) It must be genuine, not a mere afterthought, to justify earlier action taken in bad faith.
a
P
The foregoing guidelines have been prescribed by the Supreme Court due to the subjective nature of this ground which
B
Ch
makes termination based on loss of trust and confidence prone to abuse.
3. SOME PRINCIPLES ON THE DOCTRINE OF LOSS OF TRUST AND CONFIDENCE.
es
 Employee’s position must be reposed with trust and confidence.
b
 “Position of trust and confidence” is one where a person is entrusted with confidence on delicate matters, or with thel
custody, handling, or care and protection of the employer’s property.
R o
 Two (2) classes of positions of trust. The first class consists of managerial employees or those who, by the nature of
an
their position, are entrusted with confidential and delicate matters and from whom greater fidelity to duty is correspondingly
expected. They refer to those vested with the powers or prerogatives to lay down and execute management policies and/or
Ch
to hire, transfer suspend, lay-off, recall, discharge, assign or discipline employees or to effectively recommend such
managerial actions. Their primary duty consists of the management of the establishment in which they are employed or of a
department or a subdivision thereof.
The second class includes “cashiers, auditors, property custodians, or those who, in the normal and routine exercise of
their functions, regularly handle significant amounts of [the employer’s] money or property.” They are fiduciary rank-and-file
employees who, though rank-and-file, are routinely charged with the custody, handling or care and protection of the
employer's money or property, or entrusted with confidence on delicate matters, and are thus classified as occupying
positions of trust and confidence.
1 Per latest DOLE Department Order No. 147-15, series of 2015, September 07, 2015.
48
2015 BAR EXAMS

 Rules on termination of managerial and supervisory employees different from those applicable to rank-and-file
employees. Thus, with respect to rank-and-file personnel, loss of trust and confidence as a ground for valid dismissal
requires proof of involvement in the alleged events in question and that mere uncorroborated assertions and accusations
by the employer will not be sufficient. But as regards a managerial employee, the mere existence of a basis for believing
that he has breached the trust of his employer would suffice for his dismissal.
 There must be “some basis” for the loss of trust and confidence which means that there is reasonable ground to believe, if
not to entertain the moral conviction, that the concerned employee is responsible for the misconduct and that the nature of
his participation therein rendered him absolutely unworthy of trust and confidence demanded by his position.
 Dismissal due to feng shui mismatch is not a valid ground to lose trust and confidence.
 Command responsibility of managerial employees is a ground to dismiss.
 Confidential employee may be dismissed for loss of trust and confidence.
 Grant of promotions and bonuses negates loss of trust and confidence.
 Long years of service, absence of derogatory record and small amount involved are deemed inconsequential insofar as loss
of trust and confidence is concerned.
 Dropping of criminal charges or acquittal in a criminal case arising from the same act does not affect the validity of dismissal
r
based on loss of trust and confidence.
Ba
 Full restitution does not absolve employee of offense which resulted in the loss of trust and confidence.
VII.
s
an
e
COMMISSION OF CRIME OR OFFENSE
b l
Ro h
1. REQUISITES.
The following are the requisites for the valid invocation of this ground:
an
1. A crime or offense was committed by the employee;
ar C
n
2. It was committed against any of the following persons:
B
Ch
(a) His employer;
s
(b) Any immediate member of his employer’s family; or
e a
l
n
(c) His employer’s duly authorized representative.
b
ia r
2. SOME PRINCIPLES ON THE COMMISSION OF CRIME OR OFFENSE.
R o
 Because of its gravity, work-relation is not necessary. Neither is it necessary to show that the commission of the criminal act
u
would render the employee unfit to perform his work for the employer.
an Ba
Ch G
VIII.
s
OTHER ANALOGOUS CAUSES
t o bl e
i
1. ANALOGOUS CAUSES UNDER ESTABLISHED JURISPRUDENCE.
o
l
The following may be cited as analogous causes:
R
se an r
1) Violation of company rules and regulations.
a
2) Theft of property owned by a co-employee, as distinguished from theft of property owned by the employer.
B
3) Incompetence, inefficiency or ineptitude.
Jo Ch
4) Failure to attain work quota.
5) Failure to comply with weight standards of employer.
e s
. bl
6) “Attitude problem” is analogous to loss of trust and confidence.
o f IX.
TERMINATION DUE TO ENFORCEMENT OF
Ro
r an r
UNION SECURITY CLAUSE
a
P
 What is a union security clause?
B
Ch
The “union security clause” is a stipulation in a CBA which allows the parties thereto to enter into an agreement
requiring membership in the exclusive collective bargaining agent which successfully negotiated said CBA as a condition for
continued employment with the exception of employees who are already members of another union at the time of the signing of
es
the CBA.
b l
o
 What are the effects of application of this clause?
The following are the effects:
R
an
a. On members of the bargaining union/agent. They are not allowed to resign or terminate their membership
therefrom. Any member of the bargaining agent who resigns or is expelled therefrom may be recommended to the
Ch
employer by the bargaining agent for termination of his employment.
b. On non-members of the bargaining union/agent but members of the minority union/s. They are not bound by
the union security clause if they are members of the minority or other unions at the time of the signing of the CBA.
Hence, they cannot be compelled to resign from their union/s in order to join the bargaining agent.
c. On non-members of the bargaining union/agent or of any minority union/s. If not a member of the bargaining
agent or any other unions in the bargaining unit at the time of the signing of the CBA by reason of the fact that he is
excepted from the coverage of the bargaining unit, the employee cannot be compelled to join the bargaining agent.
d. On new employees hired after the signing of the CBA containing the union security clause. They can be
compelled to join the bargaining agent. If they refuse, they can be recommended for termination.
49
2015 BAR EXAMS

 Is there an exception to this rule?

Yes. An employee cannot be compelled to join a union based on religious ground. For example: members of the
Iglesia ni Kristo (INK) cannot be compelled to join a union; hence, they are not bound by the union security doctrine.
 What are the requisites in order to validly terminate employees based on this clause?
(1) The union security clause is applicable;
(2) The bargaining union is requesting for the termination of employment due to enforcement of the union security
provision in the CBA; and
(3) There is sufficient evidence to support the union’s decision to expel the employee from the union.
All the foregoing requisites should be complied with to justify the termination of employment.
OTHER CAUSES PER DEPARTMENT ORDER NO. 147-15, SERIES OF 2015 (07 SEPTEMBER 2015):1
 An employee found positive for use of dangerous drugs shall be dealt with administratively which shall be a
2
ground for suspension or termination.
a r
 An employee shall not be terminated from work based on actual, perceived or suspected HIV status.
3
B
4
 An employee shall not be terminated on basis of actual, perceived or suspected Hepatitis B status.
s
 An employee who has or had Tuberculosis shall not be discriminated against. He/she shall be entitled to work for
an
l e
as long as they are certified by the company's accredited health provider as medically fit and shall be restored to
work as soon as his/her illness is controlled.
5
b
 An employee may also be terminated based on the grounds provided for under the CBA.
Ro
C h
an r
2.
AUTHORIZED CAUSES
a

Ch
What are the 2 classes of authorized cause termination?
e s
B
a n
l
Under the Labor Code, authorized causes are classified into two (2) classes, namely:
b n
(1) Business-related causes. – Referring to the grounds specifically mentioned in Article 283, to wit:
o
ia r
a. Installation of labor-saving device;
b. Redundancy;
R
an u
c. Retrenchment;
Ba
d. Closure or cessation of business operations NOT due to serious business losses or financial reverses; and
Ch G
e. Closure or cessation of business operations due to serious business losses and financial reverses.
s
(2) Health-related causes. – Referring to disease covered by Article 284 of the Labor Code.
o e

l
What are the common requisites applicable to the authorized causes under Article 283?
t b
The following are the five (5) common requisites applicable to the ALL the grounds under Article 283:
l i
1. There is good faith in effecting the termination;
R o
2. The termination is a matter of last resort, there being no other option available to the employer after resorting to
se an r
cost-cutting measures;
a
3. Two (2) separate written notices are served on both the affected employees and the DOLE at least one (1)
B
month prior to the intended date of termination;
Jo Ch
4. Separation pay is paid to the affected employees, to wit:
e s
(a) If based on (1) installation of labor-saving device, or (2) redundancy. - One (1) month pay or at least one (1)
. bl
month pay for every year of service, whichever is higher, a fraction of at least six (6) months shall be
f
considered as one (1) whole year.
Ro
(b) If based on (1) retrenchment, or (2) closure NOT due serious business losses or financial reverses. - One
o
(1) month pay or at least one-half (½) month pay for every year of service, whichever is higher, a fraction of at
r an r
least six (6) months shall be considered as one (1) whole year.
a
P
(c) If closure is due to serious business losses or financial reverses, NO separation pay is required to be paid.
B
(d) In case the CBA or company policy provides for a higher separation pay, the same must be followed instead of
Ch
the one provided in Article 283.
5. Fair and reasonable criteria in ascertaining what positions are to be affected by the termination, such as, but not
es
l
limited to: nature of work; status of employment (whether casual, temporary or regular); experience; efficiency;
ob
seniority; dependability; adaptability; flexibility; trainability; job performance; discipline; and attitude towards work.
Failure to follow fair and reasonable criteria in selecting who to terminate would render the termination invalid.
R
an
I.
INSTALLATION OF LABOR-SAVING DEVICE
Ch
 What are the additional requisites unique to this ground?
In addition to the five (5) common requisites above, the unique requisites are as follows:
1. There must be introduction of machinery, equipment or other devices; and
1 See Section 6 thereof. (Other Causes of Termination.) xxx

2 DOLE Department Order No. 53, Series of 2003 in relation to the IRR of R.A. 9165.
3 DOLE Department Order No. 102, Series of 2010.
4 DOLE Department Advisory No.5, Series of 2010 Part III C1. par. c.
5 DOLE Department Order No. 75, Series of 2005.
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2015 BAR EXAMS

2. The purpose for such introduction must be valid such as to save on cost, enhance efficiency and other justifiable
1
economic reasons.
II.
REDUNDANCY
 What are the additional requisites unique to this ground?

The additional requisites are as follows:
1. There must be superfluous positions or services of employees;
2. The positions or services are in excess of what is reasonably demanded by the actual requirements of the enterprise
to operate in an economical and efficient manner; and
3. There must be an adequate proof of redundancy such as but not limited to the new staffing pattern, feasibility
studies/proposal, on the viability of the newly created positions, job description and the approval by the management
of the restructuring.
2
a r
B III.
s
an
RETRENCHMENT
l e
b
What are the additional requisites unique to this ground?
Ro h
3
Per latest issuance of the DOLE, the following are the additional requisites:
an r C
1. The retrenchment must be reasonably necessary and likely to prevent business losses;
a
2. The losses, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only
Ch
B n
expected, are reasonably imminent;
e s
3. The expected or actual losses must be proved by sufficient and convincing evidence; 4 and
a
l
b n
4. The retrenchment must be in good faith for the advancement of its interest and not to defeat or circumvent the
ia r
employees' right to security of tenure.
R o
This is the only statutory ground in Article 283 which requires this kind of proof. The other grounds of closure or
an u
cessation of business operations may be resorted to with or without losses.
G Ba
 What are some relevant principles on retrenchment?
Ch
 The fact that there has been economic or other crisis besetting a particular sector or the country as a whole is not sufficient
justification for retrenchment.
s
o e
 The phrase “retrenchment to prevent losses” means that retrenchment must be undertaken by the employer before the
l
t b
losses anticipated are actually sustained or realized. The employer need not keep all his employees until after his losses
i
shall have materialized. Otherwise, the law could be vulnerable to attack as undue taking of property for the benefit of
o
l
another.
R
se
 Best evidence of losses - financial statements audited by independent auditors (not by internal auditors).
an r
 Best evidence of losses in a government-controlled corporation - financial statements audited by COA.
 Income tax returns, not valid since they are self-serving documents.
B a
Jo Ch
 Mere affidavit on alleged losses is not sufficient.
 Retrenchment effected long after the business losses is not valid.
e s
.
 Profitable operations in the past do not affect the validity of retrenchment.
f bl
 Retrenchment due to liquidity problem is not valid.
 Sharp drop in income is not a ground to justify retrenchment. A mere decline in gross income cannot in any manner be
o Ro
considered as serious business losses. It should be substantial, sustained and real.
 Litany of woes, in the absence of any solid evidence that they translated into specific and substantial losses that would
P r necessitate retrenchment, will not suffice to justify retrenchment.
an
 Rehiring of retrenched employees does not necessarily indicate illegality of retrenchment.
B a r
Ch
 In an enterprise which has several branches nationwide, profitable operations in some of them will not affect the
validity of the retrenchment if overall, the financial condition thereof reflects losses.
es
IV.
CLOSURE OR CESSATION OF BUSINESS OPERATIONS
b l
Can an employer close its business even if it is not suffering from business losses?
R o
an
Yes. In fact, closure involves two (2) situations:
(a) When NOT due to serious business losses or financial reverses; or
Ch
(b) When due to serious business losses or financial reverses
It is only in the first that payment of separation pay is required. No such requirement is imposed in the second.
What are some relevant principles on closure?
 Principle of closure under Article 283 applies in cases of both total and partial closure or cessation of business
operations. Management may choose to close only a branch, a department, a plant, or a shop.
1 Per latest DOLE Department Order No. 147-15, series of 2015, September 07, 2015.
2 Id.
3 Id.
4 Balasabas v. NLRC, G.R. No. 85286, August 24,1992; Central Azucarerra dela Carlota v. NLRC, G.R. No. 100092, December 29, 1995.
51
2015 BAR EXAMS

 Closure of department or section and hiring of workers supplied by independent contractor as replacements is valid.
 Relocation of business may amount to cessation of operations.
 Closure of business to merge or consolidate with another or to sell or dispose all of its assets, held valid.
 Audited financial statements necessary only in closure due to losses.
V.
DISEASE
1. THE DEOFERIO DOCTRINE ON THE REQUISITES.

Disease is one of the authorized causes to terminate employment. In the 2014 case of Deoferio v. Intel Technology
Philippines, Inc.,1 the Supreme Court divided into two the requisites that must be complied with before termination of
employment due to disease may be justified, namely:
(1) Substantive requisites; and
(2) Procedural requisites.
r
1.1. THE DEOFERIO RULE ON SUBSTANTIVE REQUISITES.
Ba
The following are the three (3) substantive requisites:
(1) An employee has been found to be suffering from any disease;
s
an
e
(2) His continued employment is prohibited by law or prejudicial to his health, as well as to the health of his co-
employees; and
b l
(3) A competent public health authority issues a medical certificate that the disease is of such nature or at such a
Ro h
stage that it cannot be cured within a period of six (6) months even with proper medical treatment. 2
C
1.2. THE DEOFERIO RULE ON PROCEDURAL REQUISITES.
an ar
Deoferio, finally pronounced the rule that the employer must furnish the employee two (2) written notices in
B n
terminations due to disease, namely:
Ch s a
(1) The notice to apprise the employee of the ground for which his dismissal is sought; and
l e
(2) The notice informing the employee of his dismissal, to be issued after the employee has been given reasonable
b
opportunity to answer and to be heard on his defense.
n
o
ia r
 Due process in termination due to disease is similar to due process for just cause termination but different
R
from authorized cause termination under Article 298 [283].
an u
From these perspectives, it was held in Deoferio that the CA erred in not finding that the NLRC gravely abused its
Ba
G
discretion when it ruled that the twin-notice requirement does not apply to Article 284 (Disease) of the Labor Code. This
Ch
conclusion is totally devoid of any legal basis; its ruling is wholly unsupported by law and jurisprudence. In other words, the
s
NLRC’s unprecedented, whimsical and arbitrary ruling, which the CA erroneously affirmed, amounted to a jurisdictional error.
o
2. THE FUJI RULE – THE EMPLOYEE SHOULD BE GIVEN THE CHANCE TO PRESENT COUNTERVAILING MEDICAL
CERTIFICATES.
t bl e
l i o
Subsequent to Deoferio, another 2014 case, Fuji Television Network, Inc. v. Arlene S. Espiritu,3 has further
R
expounded on the due process requirement in termination due to disease, this time by categorically specifying the right of the
se an r
ailing employee to present countervailing evidence in the form of medical certificates to prove that his dismissal due to disease is
a
not proper and therefore illegal.
B
Jo Ch
Respondent Arlene was petitioner’s news correspondent/producer “tasked to report Philippine news to Fuji through its
s
Manila Bureau field office.” She was successively given yearly fixed-term employment contracts until she was diagnosed with
e
.
lung cancer sometime in January 2009 when the Chief of News Agency of Fuji informed her “that the company will have a
f bl
problem renewing her contract” since it would be difficult for her to perform her job. She, however, “insisted that she was still fit to
work as certified by her attending physician.” Subsequently, Arlene and Fuji signed a non-renewal contract where it was
o Ro
stipulated that her contract would no longer be renewed after its expiration on May 31, 2009 and that the parties release each
other from liabilities and responsibilities under the employment contract. Arlene received her unpaid salaries and bonuses but
P r an
she affixed her signature on the non-renewal contract with the initials “U.P.” for “under protest.” The day after Arlene signed the
non-renewal contract, she filed a complaint for illegal dismissal and attorney’s fees with the Labor Arbiter, alleging that she was
B a r
Ch
forced to sign the non-renewal contract when Fuji came to know of her illness and that Fuji withheld her salaries and other
benefits for March and April 2009 when she refused to sign. Arlene claimed that she was left with no other recourse but to sign
the non-renewal contract, and it was only upon signing that she was given her salaries and bonuses, in addition to separation
es
pay equivalent to 4 years.
b l
o
The Supreme Court declared respondent Arlene as having been constructively dismissed. It was likewise held here
R
that respondent was not afforded due process, thus:
an
“There is no evidence showing that Arlene was accorded due process. After informing her
employer of her lung cancer, she was not given the chance to present medical certificates. Fuji
Ch
immediately concluded that Arlene could no longer perform her duties because of chemotherapy. It
did not ask her how her condition would affect her work. Neither did it suggest for her to take a
leave, even though she was entitled to sick leaves. Worse, it did not present any certificate from a
competent public health authority. What Fuji did was to inform her that her contract would no
longer be renewed, and when she did not agree, her salary was withheld. Thus, the Court of
Appeals correctly upheld the finding of the National Labor Relations Commission that for failure of
Fuji to comply with due process, Arlene was illegally dismissed.”
1 G.R. No. 202996, June 18, 2014.

2 Per Deoferio v. Intel Technology Philippines, Inc., supra.
3 Fuji Television Network, Inc. v. Arlene S. Espiritu, G.R. Nos. 204944-45, Dec. 03, 2014.
52
2015 BAR EXAMS

 What are some salient points to consider under this ground?

 If the disease or ailment can be cured within the period of six (6) months with proper medical treatment, the employer
should not terminate the employee but merely ask him to take a leave of absence. The employer should reinstate him to
his former position immediately upon the restoration of his normal health.
 In case the employee unreasonably refuses to submit to medical examination or treatment upon being requested to do
so, the employer may terminate his services on the ground of insubordination or willful disobedience of lawful order.
 A medical certificate issued by a company’s own physician is not an acceptable certificate for purposes of
terminating an employment based on Article 284, it having been issued not by a “competent public health authority,” the
person referred to in the law.
 A “competent public health authority” refers to a government doctor whose medical specialization pertains to the
disease being suffered by the employee. For instance, if the employee suffers from tuberculosis, the medical certificate
should be issued by a government-employed pulmonologist who is competent to make an opinion thereon. If the
employee has cardiac symptoms, the competent physician in this case would be a cardiologist.
 The medical certificate should be procured by the employer and not by the employee.
a r 3.
DUE PROCESS
B
(a) Twin-Notice Requirement
s
an
e
(b) Hearing; Meaning of Opportunity to be Heard

b l
What is the latest rule on due process?
Ro h
Due process means compliance with both STATUTORY due process and CONTRACTUAL due process.
CONSTITUTIONAL due process is not applicable (Per Agabon doctrine).
an r C
Statutory due process refers to the one prescribed in the Labor Code (Article 277[b]); while contractual due process
a
n
refers to the one prescribed in the Company Rules and Regulations (Per Abbott Laboratories doctrine).
B
Ch s a
Contractual due process was enunciated in the 2013 en banc ruling in Abbott Laboratories, Philippines v. Pearlie
e
1
Ann F. Alcaraz. Thus, it is now required that in addition to compliance with the statutory due process, the employer should still
l
n
comply with the due process procedure prescribed in its own company rules. The employer’s failure to observe its own
b
ia r
company-prescribed due process will make it liable to pay an indemnity in the form of nominal damages, the amount of which is
o
equivalent to the P30,000.00 awarded under the Agabon doctrine.
R
u
 Are the twin-notice requirement and hearing required in all cases of termination?
an Ba
No. The two-notice requirement and hearing are required only in case of just cause termination in the following order:
Ch
1. Service of first written notice;
G s
o e
2. Conduct of hearing; and
l
t b
3. Service of second written notice.

l i o
What is the King of Kings Transport doctrine on just cause procedural due process?
R
se an r
2
Based on this doctrine which was enunciated in King of Kings Transport, Inc. v. Mamac, the following requirements
a
should be complied with in just cause termination:
B
Jo Ch
(1) First written notice.
The first written notice to be served on the employee should:
e s
f. a) Contain the specific causes or grounds for termination against him;
bl
o Ro
b) Contain a directive that the employee is given the opportunity to submit his written explanation within the
reasonable period of FIVE (5) CALENDAR DAYS from receipt of the notice:
P r 1)
2)
to enable him to prepare adequately for his defense;
to study the accusation against him;
an B a r
Ch
3) to consult a union official or lawyer;
4) to gather data and evidence; and
es
l
5) to decide on the defenses he will raise against the complaint.
ob
c) Contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the
employee. This is required in order to enable him to intelligently prepare his explanation and defenses. A
general description of the charge will not suffice.
R
an
d) Specifically mention which company rules, if any, are violated and/or which among the grounds under Article 282
is being charged against the employee.
Ch
(2) Hearing required,
After serving the first notice, the employer should schedule and conduct a hearing or conference wherein the
employee will be given the opportunity to:
1) explain and clarify his defenses to the charge/s against him;
2) present evidence in support of his defenses; and
3) rebut the evidence presented against him by the management.
1 G.R. No. 192571, July 23, 2013.

2 G.R. No. 166208, June 29, 2007.
53
2015 BAR EXAMS

During the hearing or conference, the employee is given the chance to defend himself personally, with the assistance
of a representative or counsel of his choice. Moreover, this conference or hearing could be used by the parties as an opportunity
to come to an amicable settlement.
(3) Second written notice.
After determining that termination of employment is justified, the employer shall serve the employees a written notice
of termination indicating that:
1) all circumstances involving the charge/s against the employee have been considered; and
2) grounds have been established to justify the severance of his employment.
 What is the Perez doctrine on hearing?
The Perez doctrine enunciates the new guiding principle on the hearing requirement. It has interpreted the term
“ample opportunity to be heard” as follows:
(a) “Ample opportunity to be heard” means any meaningful opportunity (verbal or written) given to the employee to
answer the charges against him and submit evidence in support of his defense, whether in a hearing, conference
r
or some other fair, just and reasonable way.
following circumstances:
Ba
(b) A formal hearing or conference is no longer mandatory. It becomes mandatory only under any of the
s
an
e
(1) When requested by the employee in writing; or
(2)
(3)
b l
When substantial evidentiary disputes exist; or
When a company rule or practice requires it; or
Ro h
(4) When similar circumstances justify it.
C
(c) the “ample opportunity to be heard” standard in the Labor Code prevails over the “hearing or conference”
an r
requirement in its Implementing Rules and Regulations. This is how the Supreme Court resolved the conflict in the
a
following provisions of the Labor Code and its implementing rules:
 Ch s
B n
The Perez doctrine is now the prevailing rule as shown by a catena of cases which cited it after its promulgation.
e
Are the twin-notice requirement and hearing applicable to authorized cause termination?
a
l
b n
No. Due process in authorized cause termination is deemed complied with upon the separate and simultaneous
o
ia r
service of a written notice of the intended termination to both:
R
(1) the employee to be terminated; and
an u
(2) the appropriate DOLE Regional Office, at least one (1) month before the intended date of the termination
Ba
specifying the ground/s therefor and the undertaking to pay the separation pay required under Article 283 of the
Ch G
Labor Code.
For obvious reason, hearing is not required.
s

t o l e
Are the twin-notice requirement and hearing applicable to an abandonment case which is a just cause to terminate
b
i
employment?
o
l R
No. Although considered as a just cause to terminate employment, the due process requirement is different. No
se
hearing is required (since the employee has already abandoned his job) but the following notices should be complied with:
an ar
1) First notice asking the employee to explain why he should not be declared as having abandoned his job; and
B
Ch
2) Second notice informing him of the employer’s decision to dismiss him on the ground of abandonment.
Jo s
 What are some notable principles on the hearing requirement?
e
. bl
 If employee does not answer, hearing should still proceed.
f
 Outright termination violates due process.
 Investigation still required even if incident was witnessed by many.
o Ro
 Meeting, dialogue, consultation or interview is not the hearing required by law. It may not be a substitute for the actual
r
holding of a hearing.
an r
 Prior consultation with union is not part of the due process requirement.
a
P
 Cross-examination or confrontation of witnesses is not necessary in company investigations.
B
Ch
 Co-conspirator’s confession is not sufficient to merit dismissal.
es
l
 What are the instances where hearing is not required?
Hearing is not required in the following cases:
1. Termination of project, seasonal, casual or fixed-term employment.
ob
R
2. Termination of probationary employment on the ground of failure of the probationary employee to qualify as
an
a regular employee in accordance with reasonable standards made known to him at the start of the
employment.
Ch
3. Termination due to abandonment of work.
4. Termination due to authorized causes under Article 283 (installation of labor-saving device, redundancy,
retrenchment or closure of business or cessation of operations). In such cases, there are no allegations which the
employees should refute and defend themselves from.
5. Termination due to disease under Article 284.
6. Termination by the employee (resignation) under Article 285.
7. Termination after 6 months of bona-fide suspension of operation under Article 286. For purposes of satisfying due
process, what is required is simply that the notices provided under Article 283 be served to both the affected
employees and the DOLE at least one (1) month before the termination becomes effective.
54
2015 BAR EXAMS

8. Termination due to retirement under Article 287.

9. Termination due to closure or stoppage of work by government authorities when non-compliance with the law
or implementing rules and regulations poses grave and imminent danger to the health and safety of workers in the
workplace.
10. Termination of employee who has admitted his guilt for the offense charged.
 What are the seven (7) standard situations in termination cases?
The rules on termination of employment in the Labor Code and pertinent jurisprudence are applicable to seven (7)
different situations, namely:
1. The dismissal was for a just cause under Article 282, for an authorized cause under Article 283, or for health reasons
under Article 284, and due process was observed – This termination is LEGAL.
2. The dismissal was without a just or authorized cause but due process was observed – This termination is ILLEGAL.
3. The dismissal was without a just or authorized cause and due process was not observed – This termination is
ILLEGAL.
a r
4. The dismissal was for a just or authorized cause but due process was not observed – This termination is LEGAL.
B
5. The dismissal was for a non-existent cause – This termination is ILLEGAL.
s
an
l e
6. The dismissal was not supported by any evidence of termination – This termination is NEITHER LEGAL NOR
ILLEGAL as there is no dismissal to speak of. Reinstatement is ordered not as a relief for illegal dismissal but on
b
equitable ground.
Ro
7. The dismissal was brought about by the implementation of a law – This termination is LEGAL.
C h
an r
C.
RELIEFS FOR ILLEGAL DISMISSAL
a
Ch
1. RELIEFS UNDER ARTICLE 279 OF THE LABOR CODE.
e s
B
Under this article, an illegally dismissed employee is entitled to the following reliefs:
a n
l
b
(1) Reinstatement without loss of seniority rights and other privileges;
n
o
ia r
(2) Full backwages, inclusive of regular allowances; and
R
(3) Other benefits or their monetary equivalent.
an u
2. OTHER RELIEFS NOT FOUND IN ARTICLE 279 BUT AWARDED IN ILLEGAL DISMISSAL CASES PER
Ba
G
JURISPRUDENCE.
Ch s
The following reliefs that are awarded in illegal dismissal cases are missing in Article 279:
o l e
(1) Award of separation pay in lieu of reinstatement.
t b
(2) Award of penalty in the form of nominal damages in case of termination due to just or authorized cause but
i
without observance of procedural due process.
o
l
(3) Reliefs to illegally dismissed employee whose employment is for a fixed period. The proper relief is only the
R
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payment of the employee’s salaries corresponding to the unexpired portion of the employment contract.
an r
(4) Award of damages and attorney’s fees.
a
(5) Award of financial assistance in cases where the employee’s dismissal is declared legal but because of long
B
Jo Ch
years of service, and other considerations, financial assistance is awarded.
(6) Imposition of legal interest on separation pay, backwages and other monetary awards.
e s
f. 1.
REINSTATEMENT
bl
o a.
Ro
r an r
REINSTATEMENT PENDING APPEAL
a
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(Article 223, Labor Code)
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 Is reinstatement pending appeal solely applicable to reinstatement ordered by the Labor Arbiter?
es
Yes. Reinstatement is self-executory or immediately executory only if it is ordered by the Labor Arbiter. This means
b l
that the employee ordered reinstated need not file any motion for the issuance of writ of execution to enforce reinstatement.
The employer, in fact, is required to manifest within 10 days from his receipt of the order of reinstatement which of the two (2)
options he is taking:
R o
an
(1) To reinstate the employee to his former position or to a substantially equivalent position; or
(2) To reinstate him in the payroll, which means the employee need not report for work but only for the purpose of
getting his wage.
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There is no way the employer can disregard the reinstatement order. Posting of a bond does not stay the execution of
immediate reinstatement.
In contrast, if ordered by the NLRC, on appeal, or the Court of Appeals, under a Rule 65 certiorari petition, or even by
the Supreme Court, reinstatement is not immediately executory. This means that the employee reinstated should still file a
motion for issuance of writ of execution to enforce the reinstatement.
 Are there instances where writ of execution of Labor Arbiter’s reinstatement order is still required?
Yes, under the 2011 NLRC Rules of Procedure, there are two (2) instances when a writ of execution should still be
issued immediately by the Labor Arbiter to implement his order of reinstatement, even pending appeal, viz.:
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2015 BAR EXAMS

(1) When the employer disobeys the Rules-prescribed directive to submit a report of compliance within ten (10)
calendar days from receipt of the decision; or
(2) When the employer refuses to reinstate the dismissed employee.
The Labor Arbiter shall motu proprio issue a corresponding writ to satisfy the reinstatement wages as they accrue until
actual reinstatement or reversal of the order of reinstatement.
The employee need not file a motion for the issuance of the writ of execution since the Labor Arbiter shall thereafter
motu proprio issue the writ. Employer may be cited for contempt for his refusal to comply with the order of reinstatement.
Employer is liable to pay the salaries for the period that the employee was ordered reinstated pending appeal even if
his dismissal is later finally found to be legal on appeal.
 What are some relevant principles on reinstatement pending appeal?
 The Labor Arbiter cannot exercise option of employer by choosing payroll reinstatement pending appeal.
 If the former position is already filled up, the employee ordered reinstated under Article 223 should be admitted back to
work in a substantially equivalent position.
 Reinstatement to a position lower in rank is not proper.
a r
 Reinstatement cannot be refused on the basis of the employment elsewhere of the employee ordered reinstated.
 The failure of the illegally dismissed employee who was ordered reinstated to report back to work does not give the
B
employer the right to remove him, especially when there is a reasonable explanation for his failure.
s
n
 No reinstatement pending appeal should be made when antipathy and antagonism exist.
l e
 If reinstatement is not stated in the Labor Arbiter’s decision (neither in the dispositive portion nor in the text thereof),
b
reinstatement is not warranted.
a
RoSEPARATION PAY IN LIEU OF REINSTATEMENT h
b.
a n a r C
B n
 Is separation pay applicable only to reinstatement as an alternative remedy?
h s a
Yes. Separation pay, as a substitute remedy, is only proper for reinstatement but not for backwages.
C e
This remedy is not found in the Labor Code but is granted in case reinstatement is no longer possible or feasible, such
l
n
as when any of the following circumstances exists:
b
a
(1) Where the continued relationship between the employer and the employee is no longer viable due to the strained
o
i
relations and antagonism between them (Doctrine of Strained Relations).
R
(2) When reinstatement proves impossible, impracticable, not feasible or unwarranted for varied reasons and thus
an u r
hardly in the best interest of the parties such as:
a
G
(a) Where the employee has already been replaced permanently as when his position has already been taken over
h B
by a regular employee and there is no substantially equivalent position to which he may be reinstated.
C s
(b) Where the dismissed employee’s position is no longer available at the time of reinstatement for reasons not
o e
attributable to the fault of the employer.
l
t Ro b
(c) When there has been long lapse or passage of time that the employee was out of employer’s employ from the
i
date of the dismissal to the final resolution of the case or because of the realities of the situation.
l an
(d) By reason of the injury suffered by the employee.
e
(e) The employee has already reached retirement age under a Retirement Plan.
r
s
(f) When the illegally dismissed employees are over-age or beyond the compulsory retirement age and their
a
reinstatement would unjustly prejudice their employer.
B
h
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(3) Where the employee decides not to be reinstated as when he does not pray for reinstatement in his complaint or
J s
position paper but asked for separation pay instead.
e
. l
(4) When reinstatement is rendered moot and academic due to supervening events, such as:
o f b
(a) Death of the illegally dismissed employee.
o
(b) Declaration of insolvency of the employer by the court.
R
(c) Fire which gutted the employer’s establishment and resulted in its total destruction.
r an r
(d) In case the establishment where the employee is to be reinstated has closed or ceased operations.
a
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(5) To prevent further delay in the execution of the decision to the prejudice of private respondent.
h B
(6) Other circumstances such as (a) when reinstatement is inimical to the employer’s interest; (b) reinstatement does
C es
not serve the best interests of the parties involved; (c) the employer is prejudiced by the workers’ continued
l
employment; or (d) that it will not serve any prudent purpose as when supervening facts transpired which made
b
execution unjust or inequitable.

o
What is the amount of separation pay in lieu of reinstatement?
R
Per prevailing jurisprudence, the following are the components of separation pay in lieu of reinstatement>
a n
(1) The amount equivalent to at least one (1) month salary or to one (1) month salary for every year of service,
whichever is higher, a fraction of at least six (6) months being considered as one (1) whole year.
Ch
(2) Allowances that the employee has been receiving on a regular basis.
 What is the period covered?
From start of employment up to the date of finality of decision except when the employer has ceased its operation
earlier, in which case, the same should be computed up to the date of closure.
 What is the salary rate to be used in computing it?
The salary rate prevailing at the end of the period of putative service should be the basis for computation which
refers to the period of imputed service for which the employee is entitled to backwages.
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 What are some important principles on separation pay in lieu of reinstatement?
1. Award of separation pay and backwages are not inconsistent with each other. Hence, both may be awarded to an
illegally dismissed employee. The payment of separation pay is in addition to payment of backwages.
2. Reinstatement cannot be granted when what is prayed for by employee is separation pay in lieu thereof.
BACKWAGES
 What is the Bustamante doctrine?
In 1996, the Supreme Court changed the rule on the reckoning of backwages. It announced a new doctrine in the case
1
of Bustamante v. NLRC, which is now known as the Bustamante doctrine. Under this rule, the term “full backwages” should
mean exactly that, i.e., without deducting from backwages the earnings derived elsewhere by the concerned employee during
the period of his illegal dismissal.
 What are the components of backwages?
The components of backwages are as follows:
a r
1. Salaries or wages computed on the basis of the wage rate level at the time of the illegal dismissal and not in
B
accordance with the latest, current wage level of the employee’s position.
s
an
2. Allowances and other benefits regularly granted to and received by the employee should be made part of
backwages.
l e

b
What are some principles on backwages?
Ro
 Salary increases during period of unemployment are not included as component in the computation of
C h
an r
backwages.
a
 Dismissed employee’s ability to earn is irrelevant in the award of backwages.
Ch
B n
 In case reinstatement is ordered, full backwages should be reckoned from the time the compensation was withheld
s a
(which, as a rule, is from the time of illegal dismissal) up to the time of reinstatement, whether actual or in the payroll.
e
 If separation pay is ordered in lieu of reinstatement, full backwages should be computed from the time of illegal
l
n
dismissal until the finality of the decision. The justification is that along with the finality of the Supreme Court’s decision,
b
ia r
the issue on the illegality of the dismissal is finally laid to rest.
R o
 If the illegally dismissed employee has reached the optional retirement age of 60 years, his backwages should only
cover the time when he was illegally dismissed up to the time when he reached 60 years. Under Article 287, 60 years is
an u
the optional retirement age.
Ba
 If the employee has reached 65 years of age or beyond, his full backwages should be computed only up to said age.
Ch G
The contention of the employer that backwages should be reckoned only up to age 60 cannot be sustained.
s
 If employer has already ceased operations, full backwages should be computed only up to the date of the closure. To
o e
allow the computation of the backwages to be based on a period beyond that would be an injustice to the employer.
l
t Ro
 Any amount received during payroll reinstatement is deductible from backwages.
b
i
LIMITED
l an
BACKWAGES
e
 When is the award of backwages limited?
r
o s
(1) When the dismissal is deemed too harsh a penalty;
h
(2) When the employer acted in good faith; or
s
B a
J C
(3) Where there is no evidence that the employer dismissed the employee.
e
. bl
Thus, the backwages will not be granted in full but limited to 1 year, 2 years or 5 years.

o f PREVENTIVE SUSPENSION
When is preventive suspension proper to be imposed?
Ro
P r an
Preventive suspension may be legally imposed against an errant employee only while he is undergoing an
investigation for certain serious offenses. Consequently, its purpose is to prevent him from causing harm or injury to the
B a r
Ch
company as well as to his fellow employees. It is justified only in cases where the employee’s continued presence in the
company premises during the investigation poses a serious and imminent threat to the life or property of the employer
es
l
or of the employee’s co-workers. Without this threat, preventive suspension is not proper.
 What are some relevant principles in preventive suspension?
ob

R
Preventive suspension is not a penalty. Preventive suspension, by itself, does not signify that the company has
an
already adjudged the employee guilty of the charges for which she was asked to answer and explain.
 Preventive suspension is neither equivalent nor tantamount to dismissal.
Ch
 If the basis of the preventive suspension is the employee’s absences and tardiness, the imposition of preventive
suspension on him is not justified as his presence in the company premises does not pose any such serious or
imminent threat to the life or property of the employer or of the employee’s co-workers simply “by incurring repeated
absences and tardiness.”
 Preventive suspension does not mean that due process may be disregarded.
 Preventive suspension should only be for a maximum period of thirty (30) days. After the lapse of the 30-day period,
the employer is required to reinstate the worker to his former position or to a substantially equivalent position.
1 G.R. No. 111651, Nov. 28, 1996, 265 SCRA 61.

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 During the 30-day preventive suspension, the worker is not entitled to his wages and other benefits. However, if the
employer decides, for a justifiable reason, to extend the period of preventive suspension beyond said 30-day period, he
is obligated to pay the wages and other benefits due the worker during said period of extension. In such a case, the
worker is not bound to reimburse the amount paid to him during the extension if the employer decides to dismiss him
after the completion of the investigation.
 Extension of period must be justified. During the 30-day period of preventive suspension, the employer is expected to
conduct and finish the investigation of the employee’s administrative case. The period of thirty (30) days may only be
extended if the employer failed to complete the hearing or investigation within said period due to justifiable grounds. No
extension thereof can be made based on whimsical, capricious or unreasonable grounds.
 Preventive suspension lasting longer than 30 days, without the benefit of valid extension, amounts to constructive
dismissal.
 Indefinite preventive suspension amounts to constructive dismissal.
CONSTRUCTIVE DISMISSAL

r
When is there constructive dismissal?
a
Constructive dismissal contemplates any of the following situations:
B
s
1) An involuntary resignation resorted to when continued employment is rendered impossible, unreasonable or
an
e
unlikely;
b l
2) A demotion in rank and/or a diminution in pay; or
3) A clear discrimination, insensibility or disdain by an employer which becomes unbearable to the employee that
Ro h
it could foreclose any choice by him except to forego his continued employment.

C
What is the test of constructive dismissal?
an r
The test of constructive dismissal is whether a reasonable person in the employee’s position would have felt compelled
a
to give up his position under the circumstances. It is an act amounting to dismissal but made to appear as if it were not. In fact,
Ch s
B
a n
the employee who is constructively dismissed may be allowed to keep on coming to work. Constructive dismissal is, therefore, a
dismissal in disguise. The law recognizes and resolves this situation in favor of the employees in order to protect their rights
and interests from the coercive acts of the employer.
e
l

b n
ia r
What are examples of constructive dismissal or forced resignation?
R
reducing their workweek to three days.o
 Denying to the workers entry to their work area and placing them on shifts “not by weeks but almost by month” by
an u
 Barring the employees from entering the premises whenever they would report for work in the morning without any
Ba
justifiable reason, and they were made to wait for a certain employee who would arrive in the office at around noon, after
Ch G
they had waited for a long time and had left.
s
 Sending to an employee a notice of indefinite suspension which is tantamount to dismissal.
o e
 Imposing indefinite preventive suspension without actually conducting any investigation.
l
t
 Changing the employee’s status from regular to casual constitutes constructive dismissal.
b
i
 Preventing the employee from reporting for work by ordering the guards not to let her in. This is clear notice of
o
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dismissal.
R
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------------oOo------------
an B ar
Jo Ch e s
f. bl
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P r an B a r
Ch es
b l
R o
an
Ch
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2015 BAR EXAMS

TOPIC NO. 5
MANAGEMENT PREROGATIVES
 What are management prerogatives?
Management prerogatives are granted to the employer to regulate every aspect of their business, generally without
restraint in accordance with their own discretion and judgment. This privilege is inherent in the right of employers to control
and manage their enterprise effectively. Such aspects of employment include hiring, work assignments, working methods,
time, place and manner of work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer
of employees, lay-off of workers and the discipline, dismissal and recall of workers.
 What are the limitations to the exercise of these prerogatives?
1. Limitations imposed by:
a) law;
b) CBA;
c) employment contract;
d) employer policy;
a r
B
e) employer practice; and
f) general principles of fair play and justice.
s
n
2. It is subject to police power.
l e
3. Its exercise should be without abuse of discretion.
b
4. It should be done in good faith and with due regard to the rights of labor.
a
Ro A.
C h
an r
DISCIPLINE
a
an

h
What are the components of the right to discipline?
B
C s
The right or prerogative to discipline covers the following:
e
l
1) Right to discipline;
2) Right to dismiss;
b
an
Ro
3) Right to determine who to punish;
i r
4) Right to promulgate rules and regulations;
u
5) Right to impose penalty; proportionality rule;
an
6) Right to choose which penalty to impose; and
G Ba
7) Right to impose heavier penalty than what the company rules prescribe.
Ch s
o e
B.
TRANSFER OF EMPLOYEES
l

i
What are the various kinds of transfer?
t ob
l R
a. Two (2) kinds of transfer. - A transfer means a movement:
s e an
1. From one position to another of equivalent rank, level or salary, without a break in the service; or
2. From one office to another within the same business establishment.
Ba r
o Ch
 What are salient points to consider in transfer?
s
.J
 The exercise of the prerogative to transfer or assign employees from one office or area of operation to another is valid
l e
provided there is no demotion in rank or diminution of salary, benefits and other privileges. The transfer should
f b
not be motivated by discrimination or made in bad faith or effected as a form of punishment or demotion without
sufficient cause.
o
o
 Commitment made by the employee like a salesman in the employment contract to be re-assigned anywhere in
R
r
the Philippines is binding on him.
an r
 Even if the employee is performing well in his present assignment, management may reassign him to a new
a
P
post.
B
Ch
 The transfer of an employee may constitute constructive dismissal when:
1) When the transfer is unreasonable, inconvenient or prejudicial to the employee;
e s
l
2) When the transfer involves a demotion in rank or diminution of salaries, benefits and other privileges; and
b
3) When the employer performs a clear act of discrimination, insensibility, or disdain towards the employee, which
forecloses any choice by the latter except to forego his continued employment.
Ro
 The refusal of an employee to be transferred may be held justified if there is a showing that the transfer was directed by
the employer under questionable circumstances. For instance, the transfer of employees during the height of their
an
union’s concerted activities in the company where they were active participants is illegal.
 An employee who refuses to be transferred, when such transfer is valid, is guilty of insubordination or willful
Ch
disobedience of a lawful order of an employer under Article 282 of the Labor Code.
 Refusal to transfer due to parental obligations, additional expenses, inconvenience, hardship and anguish is
not valid. An employee could not validly refuse lawful orders to transfer based on these grounds.
 Refusal to transfer to overseas assignment is valid.
 Refusal to transfer consequent to promotion is valid.
 Transfer to avoid conflict of interest is valid.
 A transfer from one position to another occasioned by the abolition of the position is valid.
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2015 BAR EXAMS

C.
PRODUCTIVITY STANDARD
 How may productivity standards be imposed?

The employer has the prerogative to prescribe the standards of productivity which the employees should comply. The
productivity standards may be used by the employer as:
1. an incentive scheme; and/or
2. a disciplinary scheme.
As an incentive scheme, employees who surpass the productivity standards or quota are usually given additional
benefits.
As a disciplinary scheme, employees may be sanctioned or dismissed for failure to meet the productivity standards or
quota.
 Illustrative cases:
1
In the 2014 case of International School Manila v. International School Alliance of Educators (ISAE), the teacher
a
standards set by the school in teaching Filipino classes. r
was held guilty of gross inefficiency meriting her dismissal on the basis of the Court’s finding that she failed to measure up to the
B
s
2
In the 2012 case of Reyes-Rayel v. Philippine Luen Thai Holdings Corp., the validity of the dismissal of petitioner
an
e
who was the Corporate Human Resources (CHR) Director for Manufacturing of respondent company, on the ground of
b l
inefficiency and ineptitude, was affirmed on the basis of the Court’s finding that petitioner, on two occasions, gave wrong
information regarding issues on leave and holiday pay which generated confusion among employees in the computation of
Ro h
salaries and wages.
C
In another 2012 case, Realda v. New Age Graphics, Inc.,3 petitioner, a machine operator of respondent company,
an r
was dismissed on the ground, among others, of inefficiency. In affirming the validity of his dismissal, the Supreme Court
reasoned:
a
Ch
B n
“xxx (T)he petitioner’s failure to observe Graphics, Inc.’s work standards constitutes inefficiency that is a valid
s a
cause for dismissal. Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to
e
inefficiency may constitute just cause for dismissal. Such inefficiency is understood to mean failure to attain work goals
l
n
or work quotas, either by failing to complete the same within the allotted reasonable period, or by producing
b
ia r
unsatisfactory results.”
R o
u
D.
an Ba
GRANT OF BONUS
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See discussion on this under Topic III (Labor Standards) above.
s
o l e
E.
t b
CHANGE OF WORKING HOURS

l i
What is the extent of the exercise of this prerogative?
R o
se an r
Employers have the freedom and prerogative, according to their discretion and best judgment, to regulate and control
the time when workers should report for work and perform their respective functions.
B a
Jo Ch
4
Manila Jockey Club Employees Labor Union – PTGWO, v. Manila Jockey Club, Inc. - The validity of the exercise
s
of the same prerogative to change the working hours was affirmed in this case. It was found that while Section 1, Article IV of the
e
. bl
CBA provides for a 7-hour work schedule from 9:00 a.m. to 12:00 noon and from 1:00 p.m. to 5:00 p.m. from Mondays to
f
Saturdays, Section 2, Article XI thereof expressly reserves to respondent the prerogative to change existing methods or facilities
and to change the schedules of work. Consequently, the hours of work of regular monthly-paid employees were changed from
o Ro
the original 9:00 a.m. to 5:00 p.m. schedule to 1:00 p.m. to 8:00 p.m. when horse races are held, that is, every Tuesday and
r
Thursday. The 9:00 a.m. to 5:00 p.m. schedule for non-race days was, however, retained. Respondent, as employer, cited the
an r
change in the program of horse races as reason for the adjustment of the work schedule. It rationalized that when the CBA was
a
P
signed, the horse races started at 10:00 a.m. When the races were moved to 2:00 p.m., there was no other choice for
h
management but to change the work schedule as there was no work to be done in the morning. Evidently, the adjustment in the
B
work schedule is justified.
es C
RULES ON MARRIAGE BETWEEN EMPLOYEES OF COMPETITOR-EMPLOYERSl
F.
o b
R
 What is the best illustrative case of this prerogative?
n
5
Duncan Association of Detailman-PTGWO v. Glaxo Welcome Philippines, Inc. - The contract of employment in
a
this case expressly prohibited an employee from having a relationship with an employee of a competitor company. It provides:
Ch
“10. You agree to disclose to management any existing or future relationship you may have, either by consanguinity or
affinity with co-employees or employees of competing drug companies. Should it pose a possible conflict of interest in
management discretion, you agree to resign voluntarily from the Company as a matter of Company policy.”
The Supreme Court ruled that this stipulation is a valid exercise of management prerogative. The prohibition against
personal or marital relationships with employees of competitor-companies upon its employees is reasonable under the
1 G.R. No. 167286, Feb. 5, 2014.

2 G.R. No. 174893, July 11, 2012.
3 G.R. No. 192190, April 25, 2012.
4 G.R. No. 167760, March 7, 2007.
5 G.R. No. 162994, Sept. 17, 2004.
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2015 BAR EXAMS

circumstances because relationships of that nature might compromise the interests of the company. In laying down the assailed
company policy, the employer only aims to protect its interests against the possibility that a competitor company will gain access
to its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information.
G.
POST-EMPLOYMENT BAN
 Is a non-compete clause valid?
Yes. The employer and the employee are free to stipulate in an employment contract prohibiting the employee within a
certain period from and after the termination of his employment, from:
(1) starting a similar business, profession or trade; or
(2) working in an entity that is engaged in a similar business that might compete with the employer.
The non-compete clause is agreed upon to prevent the possibility that upon an employee’s termination or resignation,
he might start a business or work for a competitor with the full competitive advantage of knowing and exploiting confidential and
sensitive information, trade secrets, marketing plans, customer/client lists, business practices, upcoming products, etc., which he
acquired and gained from his employment with the former employer. Contracts which prohibit an employee from engaging in
r
business in competition with the employer are not necessarily void for being in restraint of trade.

Ba
What are the requisites in order for a non-compete clause to be valid?
s
A non-compete clause is not necessarily void for being in restraint of trade as long as there are reasonable
an
e
limitations as to time, trade, and place.
l
Example: b
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The non-compete clause (called “Non-Involvement Provision”) in the 2007 case of Daisy B. Tiu v. Platinum Plans
Philippines, Inc., provides as follows:
C h
an ar
Ch
B n
“8. NON-INVOLVEMENT PROVISION – The EMPLOYEE further undertakes that during his/her engagement with
s a
EMPLOYER and in case of separation from the Company, whether voluntary or for cause, he/she shall not, for the next TWO
e
(2) years thereafter, engage in or be involved with any corporation, association or entity, whether directly or indirectly, engaged
l
n
in the same business or belonging to the same pre-need industry as the EMPLOYER. Any breach of the foregoing provision
b
shall render the EMPLOYEE liable to the EMPLOYER in the amount of One Hundred Thousand Pesos (P100,000.00) for and
ia r
as liquidated damages.”
R o
Starting on January 1, 1993, petitioner worked for respondent as Senior Assistant Vice-President and Territorial
u
Operations Head in charge of its Hongkong and Asean operations under a 5-year contract of employment containing the afore-
an
quoted clause. On September 16, 1995, petitioner stopped reporting for work. In November 1995, she became the Vice-
G Ba
President for Sales of Professional Pension Plans, Inc., a corporation engaged also in the pre-need industry. Consequently,
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respondent sued petitioner for damages before the RTC of Pasig City. Respondent alleged, among others, that petitioner’s
s
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employment with Professional Pension Plans, Inc. violated the above-quoted non-involvement clause in her contract of
l e
employment. Respondent thus prayed for P100,000 as compensatory damages; P200,000 as moral damages; P100,000 as
t b
exemplary damages; and 25% of the total amount due plus P1,000 per counsel’s court appearance, as attorney’s fees.
l i R o
Petitioner countered that the non-involvement clause was unenforceable for being against public order or public policy:
First, the restraint imposed was much greater than what was necessary to afford respondent a fair and reasonable protection.
se an r
Petitioner contended that the transfer to a rival company was an accepted practice in the pre-need industry. Since the products
a
sold by the companies were more or less the same, there was nothing peculiar or unique to protect. Second, respondent did not
B
Ch
invest in petitioner’s training or improvement. At the time petitioner was recruited, she already possessed the knowledge and
Jo s
expertise required in the pre-need industry and respondent benefited tremendously from it. Third, a strict application of the non-
e
involvement clause would amount to a deprivation of petitioner’s right to engage in the only work she knew.
f. bl
In upholding the validity of the non-involvement clause, the trial court ruled that a contract in restraint of trade
is valid provided that there is a limitation upon either time or place. In the case of the pre-need industry, the trial court
o Ro
found the two-year restriction to be valid and reasonable.
r
On appeal, the Court of Appeals affirmed the trial court’s ruling. It reasoned that petitioner entered into the contract on
an r
her own will and volition. Thus, she bound herself to fulfill not only what was expressly stipulated in the contract, but also all its
a
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consequences that were not against good faith, usage, and law. The appellate court also ruled that the stipulation prohibiting
B
Ch
non-employment for two years was valid and enforceable considering the nature of respondent’s business.
In affirming the validity of the Non-Involvement Clause, the Supreme Court ratiocinated as follows:
es
l
“xxx a non-involvement clause is not necessarily void for being in restraint of trade as long as there are reasonable
limitations as to time, trade, and place.
o
“In this case, the non-involvement clause has a time limit: two years from the time petitioner’s employment withb
R
respondent ends. It is also limited as to trade, since it only prohibits petitioner from engaging in any pre-need business
an
akin to respondent’s. It is limited as to place since the pprohibition covers only Hongkong and Asean operations.
“More significantly, since petitioner was the Senior Assistant Vice-President and Territorial Operations Head in charge of
Ch
respondent’s Hongkong and Asean operations, she had been privy to confidential and highly sensitive marketing strategies of
respondent’s business. To allow her to engage in a rival business soon after she leaves would make respondent’s trade secrets
vulnerable especially in a highly competitive marketing environment. In sum, we find the non-involvement clause not
contrary to public welfare and not greater than is necessary to afford a fair and reasonable protection to respondent.
“Thus, as held by the trial court and the Court of Appeals, petitioner is bound to pay respondent P100,000 as liquidated
damages. While we have equitably reduced liquidated damages in certain cases, we cannot do so in this case, since it appears
that even from the start, petitioner had not shown the least intention to fulfill the non-involvement clause in good faith.”
------------oOo------------
61
2015 BAR EXAMS

TOPIC NO. 6
SOCIAL WELFARE LEGISLATION
A.
SSS LAW
(R.A. No. 8282)
 Who are covered employers?
a. An employer or any person who uses the services of another person in business, trade, industry or any
undertaking.
b. A social, civic, professional, charitable and other non-profit organizations which hire the services of employees are
considered “employers.”
c. A foreign government, international organization or its wholly-owned instrumentality such as an embassy in the
Philippines, may enter into an administrative agreement with the SSS for the coverage of its Filipino employees.
 Who are compulsorily covered employees?
ar
a. A private employee, whether permanent, temporary or provisional, who is not over 60 years old.
B
b. A domestic worker or kasambahay who has rendered at least one (1) month of service.
s
n
c. A Filipino seafarer upon the signing of the standard contract of employment between the seafarer and the manning
l e
agency which, together with the foreign ship owner, act as employers.
b a
d. An employee of a foreign government, international organization or their wholly-owned instrumentality based in the
Philippines, which entered into an administrative agreement with the SSS for the coverage of its Filipino workers.
 R o
e. The parent, spouse or child below 21 years old of the owner of a single proprietorship business.
C h
an r
Are self-employed persons covered?
a
Yes. A self-employed person, regardless of trade, business or occupation, with an income of at least P1,000 a month
Ch
B n
and not over 60 years old, should register with the SSS. Included, but not limited to, are the following self-employed persons:
a. Self-employed professionals;
e s
b. Business partners, single proprietors and board directors;
a
l
n
c. Actors, actresses, directors, scriptwriters and news reporters who are not under an employer-employee
b
a
relationship;
o
i
d. Professional athletes, coaches, trainers and jockeys;
e. Farmers and fisherfolks; and
R
an u Bar
f. Workers in the informal sector such as cigarette vendors, watch-your-car boys, hospitality girls, among others.
h G
Unless otherwise specified, all provisions of the law, R.A. No. 8282, applicable to covered employees shall also be
s
applicable to the covered self-employed persons.
C
o b e
A self-employed person shall be both employee and employer at the same time.
l
t
 Who may be covered voluntarily?
1. Separated Members
l i Ro
e
A member who is separated from employment or ceased to be self-employed/OFW/non-working spouse and would
s an r
like to continue contributing.
Ba
o Ch
2. Overseas Filipino Workers (OFWs)
J s
A Filipino recruited in the Philippines by a foreign-based employer for employment abroad or one who legitimately
e
. l
entered a foreign country (i.e., tourist, student) and is eventually employed.
o f 3. Non-working spouses of SSS members
R o b
A person legally married to a currently employed and actively paying SSS member who devotes full time in the
r
management of household and family affairs may be covered on a voluntary basis, provided there is the approval
an r
of the working spouse. The person should never have been a member of the SSS. The contributions will be based
a
P on 50 percent (50%) of the working spouse’s last posted monthly salary credit but in no case shall it be lower than
P1,000.
Ch s
B
 What is the effective date of coverage?
l e
For compulsory coverage:
o b
1. For employer - Compulsory coverage of the employer shall take effect on the first day of his operation or on the first
R
day he hires employee/s. The employer is given only 30 days from the date of employment of employee to report
the person for coverage to the SSS.
an
2. For employee - Compulsory coverage of the employee shall take effect on the first day of his employment.
3. For self-employed - The compulsory coverage of the self-employed person shall take effect upon his registration
Ch
with the SSS or upon payment of the first valid contribution, in case of initial coverage.
For voluntary coverage:
1. For an OFW – upon first payment of contribution, in case of initial coverage.
2. For a non-working spouse – upon first payment of contribution.
3. For a separated member – on the month he/she resumed payment of contribution.
62
2015 BAR EXAMS

 Who are excluded employers?

Government and any of its political subdivisions, branches or instrumentalities, including corporations owned or
controlled by the Government with original charters.
 Who are excluded employees?
Workers whose employment or service falls under any of the following circumstances are not covered:
(1) Employment purely casual and not for the purpose of occupation or business of the employer;
(2) Service performed on or in connection with an alien vessel by an employee if he is employed when such vessel is
outside the Philippines;
(3) Service performed in the employ of the Philippine Government or instrumentality or agency thereof;
(4) Service performed in the employ of a foreign government or international organization, or their wholly-owned
instrumentality: Provided, however, That this exemption notwithstanding, any foreign government, international
organization or their wholly-owned instrumentality employing workers in the Philippines or employing Filipinos
outside of the Philippines, may enter into an agreement with the Philippine Government for the inclusion of such
employees in the SSS except those already covered by their respective civil service retirement systems: Provided,
a r
further, That the terms of such agreement shall conform with the provisions of R.A. No. 8282 on coverage and
B
amount of payment of contributions and benefits: Provided, finally, That the provisions of this Act shall be
supplementary to any such agreement; and
s
an
e
(5) Such other services performed by temporary and other employees which may be excluded by regulation of the
b l
Social Security Commission. Employees of bona-fide independent contractors shall not be deemed employees of
the employer engaging the service of said contractors.

Ro
What are the classifications of benefits?
C h
an r
The SSS benefits may be classified into two (2) as follows:
(a) Social security benefits:
a
Ch
B n
1) Sickness
2) Maternity
3) Retirement
e s a
l
b n
4) Disability
ia r
5) Death and funeral.
R o
(b) Employees’ compensation benefits.
an u
 Who are primary beneficiaries?
G Ba
The following are primary beneficiaries:
Ch s
1. The dependent spouse until he or she remarries;
o l e
2. The dependent legitimate, legitimated or legally adopted, and illegitimate children who are not yet 21 years of
age.
t b
l i o
The dependent illegitimate children shall be entitled to 50% of the share of the legitimate, legitimated or legally
R
adopted children. However, in the absence of the dependent legitimate, legitimated children of the member, his/her
se an r
dependent illegitimate children shall be entitled to 100% of the benefits
 Who are secondary beneficiaries?
B a
Jo Ch s
The following are secondary beneficiaries:
e
. bl
1. The dependent parents, in the absence of the primary beneficiaries.
o f 2. Any other person designated by the member as his/her secondary beneficiary, in the absence of all the foregoing
primary beneficiaries and dependent parents.
Ro
r an r
B.
a
P
GSIS LAW
B
Ch
(R.A. No. 8291)
 Who are compulsorily required to become members of the GSIS?

es
b l
1. All government personnel, whether elective or appointive, irrespective of status of appointment, provided they are
o
receiving fixed monthly compensation and have not reached the mandatory retirement age of 65 years, are compulsorily covered
R
as members of the GSIS and shall be required to pay contributions.
an
2. However, employees who have reached the retirement age of 65 or more shall also be covered, subject to the
following rules:
Ch
An employee who is already beyond the mandatory retirement age of 65 shall be compulsorily covered and be required
to pay both the life and retirement premiums under the following situations:
a. An elective official who at the time of election to public office is below 65 years of age and will be 65 years or
more at the end of his term of office, including the period/s of his re-election to public office thereafter without
interruption.
b. Appointive officials who, before reaching the mandatory age of 65, are appointed to government position by the
President of the Republic of the Philippines and shall remain in government service at age beyond 65.
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2015 BAR EXAMS

c. Contractual employees including casuals and other employees with an employee-government agency
relationship are also compulsorily covered, provided they are receiving fixed monthly compensation and rendering
the required number of working hours for the month.
 What are the classes of membership in the GSIS?
Membership in the GSIS is classified either by type or status of membership.
 As to type of members, there are regular and special members:
(a) Regular Members – are those employed by the government of the Republic of the Philippines, national or local,
legislative bodies, government-owned and controlled corporations (GOCC) with original charters, government
financial institutions (GFIs), except uniformed personnel of the Armed Forces of the Philippines, the Philippine
National Police, Bureau of Jail Management and Penology (BJMP) and Bureau of Fire Protection (BFP), who are
required by law to remit regular monthly contributions to the GSIS.
(b) Special Members – are constitutional commissioners, members of the judiciary, including those with equivalent
ranks, who are required by law to remit regular monthly contributions for life insurance policies to the GSIS in
r
order to answer for their life insurance benefits defined under RA 8291.
a
B
 As to status of membership, there are active and inactive members.
s
an
(a) Active member – refers to a member of the GSIS, whether regular or special, who is still in the government
e
service and together with the government agency to which he belongs, is required to pay the monthly
l
b
contribution.
Ro h
(b) Inactive member – a member who is separated from the service either by resignation, retirement, disability,
dismissal from the service, retrenchment or, who is deemed retired from the service under this Act.

an
When does membership become effective?
ar C
Ch
B n
The effective date of membership shall be the date of the member’s assumption to duty on his original appointment or
s a
election to public office.
 What is the effect of separation from the service?
l e
b n
ia r
A member separated from the service shall continue to be a member, and shall be entitled to whatever benefits he has
o
qualified to in the event of any contingency compensable under the GSIS Law.
R
u
 Who are excluded from the compulsory coverage of the GSIS Law?
an
The following employees are excluded from compulsory coverage:
Ba
Ch G
(a) Uniformed personnel of the Armed Forces of the Philippines (AFP), Philippine National Police (PNP), Bureau of
s
o e
Fire Protection (BFP) and Bureau of Jail Management and Penology (BJMP);
l
(b) Barangay and Sanggunian Officials who are not receiving fixed monthly compensation;
i t b
(c) Contractual Employees who are not receiving fixed monthly compensation; and
o
l
(d) Employees who do not have monthly regular hours of work and are not receiving fixed monthly compensation.
R
se an ar
 What are the kinds of benefits under the GSIS Law?
B
Jo Ch
The following are the benefits under the GSIS Law:
(a) Compulsory Life Insurance Benefits under the Life Endowment Policy (LEP)
e s
. bl
(b) Compulsory Life Insurance Benefits under the Enhanced Life Policy (ELP)
f
(c) Retirement Benefits
Ro
(d) Separation Benefit
r o (e)
(f)
Unemployment Benefit
Disability Benefits
an a r
P
(g) Survivorship Benefits
B
(h) Funeral Benefits
 Who are beneficiaries under the GSIS Law?

Ch es
There are two (2) kinds of beneficiaries under the GSIS Law as follows:
b l
R o
1. Primary beneficiaries — The legal dependent spouse until he/she remarries and the dependent children.
2. Secondary beneficiaries — The dependent parents and, subject to the restrictions on dependent children, the
an
legitimate descendants.
Ch
 Who are dependents under the GSIS Law?
Dependents shall be the following:
(a) the legitimate spouse dependent for support upon the member or pensioner;
(b) the legitimate, legitimated, legally adopted child, including the illegitimate child, who is unmarried, not gainfully
employed, not over the age of majority, or is over the age of majority but incapacitated and incapable of self-
support due to a mental or physical defect acquired prior to age of majority; and
(c) the parents dependent upon the member for support.
64
2015 BAR EXAMS

Gainful Occupation — Any productive activity that provided the member with income at least equal to the minimum
compensation of government employees.
C.
LIMITED PORTABILITY LAW
(R.A. No. 7699)
 What is limited portability scheme?
R.A. No. 7699 was enacted to enable those from the private sector who transfer to the government service or from the
government sector to the private sector to combine their years of service and contributions which have been credited with the
SSS or GSIS, as the case may be, to satisfy the required number of years of service for entitlement to the benefits under the
applicable laws.
 What is totalization?
The term “totalization” refers to the process of adding up the periods of creditable services or contributions under each
What is portability?
a r
of the Systems, SSS or GSIS, for the purpose of eligibility and computation of benefits.
B
s
On the other hand, the term “portability” refers to the transfer of funds for the account and benefit of a worker who
an
e
transfers from one system to the other.

b
How are benefits computed?
l
Ro h
All services rendered or contributions paid by a member personally and those that were paid by the employers to either
System shall be considered in the computation of benefits which may be claimed from either or both Systems. However, the
an r C
amount of benefits to be paid by one System shall be in proportion to the services rendered or periods of contributions made to
that System.
a
Ch
“Benefits” refer to the following:
1. Old-age benefit;
e s
B
a n
l
n
2. Disability benefit;
b
ia r
3. Survivorship benefit;
4.
5.
Sickness benefit;
R o
Medicare benefit, provided that the member shall claim said benefit from the System where he was last a member;
an u
and
Ba
6. Such other benefits common to both Systems that may be availed of through totalization.

Ch
When does totalization apply?
G s
o e
a. if a worker is not qualified for any benefits from both Systems; or
l
t
b. if a worker in the public sector is not qualified for any benefits from the GSIS; or
b
i
c. if a worker in the private sector is not qualified for any benefits from the SSS.
o
l R
For purposes of computation of benefits, totalization applies in all cases so that the contributions made by the worker-
se
member in both Systems shall provide maximum benefits which otherwise will not be available. In no case shall the contribution
an r
be lost or forfeited.
B a
Jo Ch
 What is the effect if worker is not qualified after totalization?
e s
If after totalization, the worker-member still does not qualify for any benefit as listed in the law, the member will then get
. bl
whatever benefits correspond to his/her contributions in either or both Systems.

o f
What is the effect if worker qualifies for benefits in both Systems?
R o
If a worker qualifies for benefits in both Systems, totalization shall not apply.
P r D.
a n
EMPLOYEE’S COMPENSATION
B a r
Ch
COVERAGE AND WHEN COMPENSABLE
 What is the State Insurance Fund [SIF]?
es
b l
The State Insurance Fund (SIF) is built up by the contributions of employers based on the salaries of their employees
o
as provided under the Labor Code.
R
There are two (2) separate and distinct State Insurance Funds: one established under the SSS for private sector
an
employees; and the other, under the GSIS for public sector employees. The management and investment of the Funds are done
separately and distinctly by the SSS and the GSIS. It is used exclusively for payment of the employees’ compensation benefits
Ch
and no amount thereof is authorized to be used for any other purpose.
 What are the agencies involved in the implementation of the Employees Compensation Program (ECP)?
There are three (3) agencies involved in the implementation of the Employees’ Compensation Program (ECP). These
are: (1) The Employees’ Compensation Commission (ECC) which is mandated to initiate, rationalize and coordinate policies
of the ECP and to review appealed cases from (2) the Government Service Insurance System (GSIS) and (3) the Social
Security System (SSS), the administering agencies of the ECP.
 Who are covered by the ECP?
a. General coverage. – The following shall be covered by the Employees’ Compensation Program (ECP):
65
2015 BAR EXAMS

1. All employers;
2. Every employee not over sixty (60) years of age;
3. An employee over 60 years of age who had been paying contributions to the System (GSIS/SSS) prior to age sixty
(60) and has not been compulsorily retired; and
4. Any employee who is coverable by both the GSIS and SSS and should be compulsorily covered by both Systems.
b. Sectors of employees covered by the ECP. - The following sectors are covered under the ECP:
1. All public sector employees including those of government-owned and/or controlled corporations and local
government units covered by the GSIS;
2. All private sector employees covered by the SSS; and
3. Overseas Filipino workers (OFWs), namely:
a. Filipino seafarers compulsorily covered under the SSS.
b. Land-based contract workers provided that their employer, natural or juridical, is engaged in any trade,
industry or business undertaking in the Philippines; otherwise, they shall not be covered by the ECP.
 When is the start of coverage of employees under the ECP?
r
The coverage under the ECP of employees in the private and public sectors starts on the first day of their employment.
 What are the benefits under the ECP?
Ba
The following are the benefits provided under the Labor Code:
s
an
a. Medical Benefits
b. Disability Benefits
l e
b
1. Temporary total disability
Ro h
2. Permanent total disability
3. Permanent partial disability
C
c. Death Benefit
an r
d. Funeral Benefit
a
Ch
B n
------------oOo------------
e s a
l
b n
Ro
u ia r
an Ba
Ch G s
t o bl e
l i R o
se Ch
an B ar
. Jo bl
e s
o f Ro
P r an B a r
Ch es
b l
R o
an
Ch
66
2015 BAR EXAMS

TOPIC NO. 7
LABOR RELATIONS LAW
A.
RIGHT TO SELF-ORGANIZATION
1.
WHO MAY UNIONIZE
FOR PURPOSES OF COLLECTIVE BARGAINING
 Who are eligible to join, form or assist a labor organization for purposes of collective bargaining?
 In the private sector:
1. All persons employed in commercial, industrial and agricultural enterprises;
2. Employees of government-owned and/or controlled corporations without original charters established under the
Corporation Code;
ar
3. Employees of religious, charitable, medical or educational institutions, whether operating for profit or not;
B
4. Front-line managers, commonly known as supervisory employees [See discussion below];
s
n
5. Alien employees [See discussion below];
l e
6. Working children [See discussion below];
b a
7. Homeworkers [See discussion below];
h
8. Employees of cooperatives [See discussion below]; and
o
9. Employees of legitimate contractors not with the principals but with the contractors
R
an
 In the public sector:
ar C
n
All rank-and-file employees of all branches, subdivisions, instrumentalities, and agencies of government, including
B
Ch
government-owned and/or controlled corporations with original charters, can form, join or assist employees’
organizations of their own choosing.
es a
l

n
Are front-line managers or supervisors eligible to join, form or assist a labor organization?
b
ia r
Yes, but only among themselves. They cannot join a rank-and-file union.

R o
Is mixed membership of supervisors and rank-and-file union in one union a ground to cancel its registration?
an u
No. In case there is mixed membership of supervisors and rank-and-file employees in one union, the new rule
G Ba
enunciated in Article 245-A of the Labor Code, unlike in the old law, is that it cannot be invoked as a ground for the cancellation
C h
of the registration of the union. The employees so improperly included are automatically deemed removed from the list of
members of said union. In other words, their removal from the said list is by operation of law.
s
o b e
Article 269. Prohibition against aliens; exceptions. All aliens, natural or juridical, as well as
l
foreign organizations are strictly prohibited from engaging directly or indirectly in all forms of
 Do alien employees have the right to join a labor organization?
t
trade union activities without prejudice to normal contacts between Philippine labor unions
i Ro
and recognized international labor centers: Provided, however, That aliens working in the
No, except if the following requisites are complied with: country with valid permits issued by the Department of Labor and Employment, may
l
exercise the right to self-organization and join or assist labor organizations of their own
(1) He should have a valid working permit issued by the DOLE; and choosing for purposes of collective bargaining: Provided, further, That said aliens are
se
nationals of a country which grants the same or similar rights to Filipino workers. (As
an r
amended by Section 29, Republic Act No. 6715, March 21, 1989)
(2) He is a national of a country which grants the same or similar rights to Filipino workers or which has ratified either
ILO Convention No. 87 or ILO Convention No. 98, as certified by the Philippine Department of Foreign Affairs
B a
o Ch
(DFA).

J
Do members of cooperatives have the right to join, form or assist a labor organization?
e s
f
 .
No, because they are co-owners co-owners of the cooperative.
What about employees of a cooperative?
ob l
o R
Yes, because they have employer-employee relationship with the cooperative.
r an r
 What about members who are at the same time employees of the cooperative?
a
P
No, because the prohibition covers employees of the cooperative who are at the same time members thereof.
B
Ch
But employee-members of a cooperative may withdraw as members of the cooperative for purposes of joining a labor
union.
e s
 Can employees of job contractors join, form or assist a labor organization?
Yes, but not for the purpose of collective bargaining with the principal but with their direct employer – the job
b l
Ro
contractor.
 Are self-employed persons allowed to join, form or assist a labor organization?
an
Yes, for their mutual aid and protection but not for collective bargaining purposes since they have no employers but
themselves.
Ch
This rule applies as well to ambulant, intermittent and other workers, rural workers and those without any definite
employers. The reason for this rule is that these persons have no employers with whom they can collectively bargain.
(a)
WHO CANNOT FORM, JOIN OR ASSIST
LABOR ORGANIZATIONS
1. PERSONS NOT ALLOWED TO FORM, JOIN OR ASSIST LABOR ORGANIZATIONS.
a. In the private sector.
1. Top and middle level managerial employees; and
67
2015 BAR EXAMS

2. Confidential employees.
b. In the public sector.
The following are not eligible to form employees’ organizations:
1. High-level employees whose functions are normally considered as policy-making or managerial or whose duties
are of a highly confidential nature;
2. Members of the Armed Forces of the Philippines;
3. Police officers;
4. Policemen;
5. Firemen; and
6. Jail guards.
 Are managerial employees allowed unionize?
There are 3 types of managerial employees:
1. Top Management
2. Middle Management
r
3. First-Line Management (also called supervisory level)
a
The first two above are absolutely prohibited; but the third are allowed but only among themselves.
B
s
 Are confidential employees allowed to join, form or assist a labor organization?
an
e
No, under the confidential employee rule.
l
b
“Confidential employees” are those who meet the following criteria:
Ro h
(1) They assist or act in a confidential capacity;
(2) To persons or officers who formulate, determine, and effectuate management policies specifically in the field of
an r C
labor relations.
a
The two (2) criteria are cumulative and both must be met if an employee is to be considered a “confidential
Ch
B n
employee” that would deprive him of his right to form, join or assist a labor organization.

e s
What are some principles on the right to self-organization?
a
l
b n
a. Some principles on the right to self-organization.
o
ia r
 Any employee, whether employed for a definite period or not, shall, beginning on the first day of his service, be
R
eligible for membership in any labor organization.
an u
 Right to join a union cannot be made subject of a CBA stipulation.
G Ba
2.
Ch s
BARGAINING UNIT
o e
 What is a bargaining unit?
l
i t b
A “bargaining unit” refers to a group of employees sharing mutual interests within a given employer unit, comprised of
o
all or less than all of the entire body of employees in the employer unit or any specific occupational or geographical grouping
l R
within such employer unit. It may also refer to the group or cluster of jobs or positions within the employer’s establishment that
se n(a) r
supports the labor organization which is applying for registration.
a B a
h
Jo C
TEST TO DETERMINE THE CONSTITUENCY
OF AN APPROPRIATE BARGAINING UNIT
e s

f. b l
What are the four tests to determine appropriate bargaining unit?
o Ro
Based on jurisprudence, there are certain tests which may be used in determining the appropriate collective bargaining
unit, to wit:
P r (1)
(2)
(3)
an
Community or mutuality of interest doctrine;
Globe doctrine or will of the members;
h
Collective bargaining history doctrine; and
B a r
(4) Employment status doctrine.
C es
1. COMMUNITY OR MUTUALITY OF INTEREST DOCTRINE.
b l
o
Under this doctrine, the employees sought to be represented by the collective bargaining agent must have community
R
or mutuality of interest in terms of employment and working conditions as evinced by the type of work they perform. It is
characterized by similarity of employment status, same duties and responsibilities and substantially similar compensation and
working conditions.
a n
Ch
1
St. James School of Quezon City v. Samahang Manggagawa sa St. James School of Quezon City. -
Respondent union sought to represent the rank-and-file employees (consisting of the motor pool, construction and transportation
employees) of petitioner-school’s Tandang Sora campus. Petitioner-school opposed it by contending that the bargaining unit
should not only be composed of said employees but must include administrative, teaching and office personnel in its five (5)
campuses. The Supreme Court disagreed with said contention. The motor pool, construction and transportation employees of
the Tandang Sora campus had 149 qualified voters at the time of the certification election, hence, it was ruled that the 149
qualified voters should be used to determine the existence of a quorum during the election. Since a majority or 84 out of the 149
qualified voters cast their votes, a quorum existed during the certification election. The computation of the quorum should be
1 G.R. No. 151326, Nov. 23, 2005.

68
2015 BAR EXAMS

based on the rank-and-file motor pool, construction and transportation employees of the Tandang Sora campus and not on all
the employees in petitioner’s five (5) campuses. Moreover, the administrative, teaching and office personnel are not members of
the union. They do not belong to the bargaining unit that the union seeks to represent.
2. GLOBE DOCTRINE.
This principle is based on the will of the employees. It is called Globe doctrine because this principle was first
1
enunciated in the United States case of Globe Machine and Stamping Co., where it was ruled, in defining the appropriate
bargaining unit, that in a case where the company’s production workers can be considered either as a single bargaining unit
appropriate for purposes of collective bargaining or as three (3) separate and distinct bargaining units, the determining factor is
the desire of the workers themselves. Consequently, a certification election should be held separately to choose which
representative union will be chosen by the workers.
2
International School Alliance of Educators [ISAE] v. Quisumbing. - The Supreme Court ruled here that foreign-
hired teachers do not belong to the bargaining unit of the local-hires because the former have not indicated their intention to be
grouped with the latter for purposes of collective bargaining. Moreover, the collective bargaining history of the school also shows
that these groups were always treated separately.
3. COLLECTIVE BARGAINING HISTORY DOCTRINE.
a r
This principle puts premium to the prior collective bargaining history and affinity of the employees in determining the
B
appropriate bargaining unit. However, the existence of a prior collective bargaining history has been held as neither decisive nor
s
conclusive in the determination of what constitutes an appropriate bargaining unit.
an
l e
National Association of Free Trade Unions v. Mainit Lumber Development Company Workers Union. - It was
3
b
ruled here that there is mutuality of interest among the workers in the sawmill division and logging division as to justify their
Ro h
formation of a single bargaining unit. This holds true despite the history of said two divisions being treated as separate units and
notwithstanding their geographical distance from each other.
an
4. EMPLOYMENT STATUS DOCTRINE.
ar C
n
The determination of the appropriate bargaining unit based on the employment status of the employees is considered
B
Ch
an acceptable mode. For instance, casual employees and those employed on a day-to-day basis, according to the Supreme
s a
Court in Philippine Land-Air-Sea Labor Union v. CIR, 4 do not have the mutuality or community of interest with regular and
e
l
permanent employees. Hence, their inclusion in the bargaining unit composed of the latter is not justified. Confidential
b n
employees, by the very nature of their functions, assist and act in a confidential capacity to, or have access to confidential
o
ia r
matters of, persons who exercise managerial functions in the field of labor relations. As such, the rationale behind the ineligibility
of managerial employees to form, assist or join a labor union equally applies to them. Hence, they cannot be allowed to be
R
u
included in the rank-and-file employees’ bargaining unit. The rationale for this inhibition is that if these managerial employees
an
would belong to or be affiliated with a union, the latter might not be assured of their loyalty to the union in view of evident conflict
G Ba
of interest. The union can also become company-dominated with the presence of managerial employees in its membership.
Ch s
3.
o e
BARGAINING AGENT
l
 What is an exclusive bargaining agent?
i t o b
l
The term “exclusive bargaining representative” or “exclusive bargaining agent” refers to a legitimate labor union duly
R
se
recognized or certified as the sole and exclusive bargaining representative or agent of all the employees in a bargaining unit.
an ar
 What are the modes of determining the sole and exclusive bargaining agent?
B
Jo Ch
The following are the modes:
1. Voluntary recognition;
e s
f. 2.
3.
Certification election;
Consent election; bl
o Ro
4. Run-off election;
r an r
5. Re-run election.
a
P
(a)
B
Ch
VOLUNTARY RECOGNITION
es
l
 What is voluntary recognition?
ob
“Voluntary recognition” refers to the process by which a legitimate labor union is voluntarily recognized by the
employer as the exclusive bargaining representative or agent in a bargaining unit and reported as such with the Regional Office
in accordance with the Rules to Implement the Labor Code.
R
an
 When is voluntary recognition proper?
Ch
Voluntary recognition is proper only in cases where there is only one legitimate labor organization existing and
operating in a bargaining unit. It cannot be done in case there are two or more unions in contention.
1 3 NLRB 294 (1937).

2 G.R. No. 128845, June 1, 2000.
3 G.R. No. 79526, Dec. 21, 1990.
4 G.R. No. L-14656, Nov. 29, 1960.
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CERTIFICATION ELECTION
 What is certification election?
“Certification election” refers to the process of determining through secret ballot the sole and exclusive bargaining
agent of the employees in an appropriate bargaining unit for purposes of collective bargaining or negotiations.
 Who may file a petition for certification election?
The petition may be filed by:
1. A legitimate labor organization which may be:
(a) an independent union; or
(b) a national union or federation which has already issued a charter certificate to its local chapter participating
in the certification election; or
(c) a local chapter which has been issued a charter certificate by the national union or federation.
2. An employer, when requested by a labor organization to bargain collectively and its majority status is in doubt.

a r
What are the rules prohibiting the filing of petition for certification election (bar rules)?
a. General rule.
B
s
an
l e
The general rule is that in the absence of a CBA duly registered in accordance with Article 231 of the Labor Code, a
petition for certification election may be filed at any time.
b
Ro h
b. Bar rules.
No certification election may be held under the following rules:
an
1. Certification year bar rule;
ar C
n
2. Negotiations bar rule;
B
Ch
3. Bargaining deadlock bar rule; or
4. Contract bar rule.
e s a
l
n
1. CERTIFICATION YEAR BAR RULE.
b
o
ia r
Under this rule, a petition for certification election may not be filed within one (1) year:
R
1. from the date the fact of voluntary recognition has been entered; or
an u
2. from the date a valid certification, consent, run-off or re-run election has been conducted within the bargaining
Ba
unit.
Ch
2. NEGOTIATIONS BAR RULE.
G s
o e
Under this rule, no petition for certification election should be entertained while the sole and exclusive bargaining agent
l
t
and the employer have commenced and sustained negotiations in good faith within the period of one (1) year from the date of a
b
i
valid certification, consent, run-off or re-run election or from the date of voluntary recognition.
o
l R
Once the CBA negotiations have commenced and while the parties are in the process of negotiating the terms and
se
conditions of the CBA, no challenging union is allowed to file a petition for certification election that would disturb the process and
an ar
unduly forestall the early conclusion of the agreement.
B
Jo Ch
3. BARGAINING DEADLOCK BAR RULE.
e s
Under this rule, a petition for certification election may not be entertained when a bargaining deadlock to which an
. bl
incumbent or certified bargaining agent is a party has been submitted to conciliation or arbitration or has become the subject of a
f
valid notice of strike or lockout.
o Ro
Kaisahan ng Manggagawang Pilipino [KAMPIL-KATIPUNAN] v. Trajano. - The bargaining deadlock-bar rule was
not applied here because for more than four (4) years after it was certified as the exclusive bargaining agent of all the rank-and-
r an r
file employees, it did not take any action to legally compel the employer to comply with its duty to bargain collectively, hence, no
a
P
CBA was executed. Neither did it file any unfair labor practice suit against the employer nor did it initiate a strike against the
B
Ch
latter. Under the circumstances, a certification election may be validly ordered and held.
4. CONTRACT BAR RULE.
es
Under this rule, a petition for certification election may not be filed when a CBA between the employer and a duly
b
recognized or certified bargaining agent has been registered with the Bureau of Labor Relations (BLR) in accordance with the l
R o
Labor Code. Where the CBA is duly registered, a petition for certification election may be filed only within the 60-day freedom
period prior to its expiry. The purpose of this rule is to ensure stability in the relationship of the workers and the employer by
an
preventing frequent modifications of any CBA earlier entered into by them in good faith and for the stipulated original period.
When contract bar rule does not apply.
Ch
The contract-bar rule does not apply in the following cases:
1. Where there is an automatic renewal provision in the CBA but prior to the date when such automatic renewal
became effective, the employer seasonably filed a manifestation with the Bureau of Labor Relations of its intention
to terminate the said agreement if and when it is established that the bargaining agent does not represent anymore
the majority of the workers in the bargaining unit.
2. Where the CBA, despite its due registration, is found in appropriate proceedings that: (a) it contains provisions
lower than the standards fixed by law; or (b) the documents supporting its registration are falsified, fraudulent or
tainted with misrepresentation.
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3. Where the CBA does not foster industrial stability, such as contracts where the identity of the representative is in
doubt since the employer extended direct recognition to the union and concluded a CBA therewith less than one (1)
year from the time a certification election was conducted where the “no union” vote won. This situation obtains in a
case where the company entered into a CBA with the union when its status as exclusive bargaining agent of the
employees has not been established yet.
4. Where the CBA was registered before or during the last sixty (60) days of a subsisting agreement or during the
pendency of a representation case. It is well-settled that the 60-day freedom period based on the original CBA
should not be affected by any amendment, extension or renewal of the CBA for purposes of certification election.
 What are the requisites for the validity of the petition for certification election?
The following requisites should concur:
1. The union should be legitimate which means that it is duly registered and listed in the registry of legitimate labor
unions of the BLR or that its legal personality has not been revoked or cancelled with finality.
2. In case of organized establishments, the petition for certification election is filed during (and not before or after)
the 60-day freedom period of a duly registered CBA.
a r
3. In case of organized establishments, the petition complied with the 25% written support of the members of the
bargaining unit.
B
4. The petition is filed not in violation of any of the four (4) bar rules [See above discussion thereof].
s
an

e
What are the two (2) kinds of majorities?
l
b
The process of certification election requires two (2) kinds of majority votes, viz.:
Ro h
1. Number of votes required for the validity of the process of certification election itself. In order to have a valid
C
certification election, at least a majority of all eligible voters in the appropriate bargaining unit must have cast
an r
their votes.
a
B n
2. Number of votes required to be certified as the collective bargaining agent. To be certified as the sole and
Ch
exclusive bargaining agent, the union should obtain a majority of the valid votes cast.

e s
What are some pertinent principles on certification election?
a
l
b n
 The pendency of a petition to cancel the certificate of registration of a union participating in a certification election does not
ia r
stay the conduct thereof.

o
The pendency of an unfair labor practice case filed against a labor organization participating in the certification election does
R
u
not stay the holding thereof.
an
 Direct certification as a method of selecting the exclusive bargaining agent of the employees is not allowed. This is
G Ba
because the conduct of a certification election is still necessary in order to arrive in a manner definitive and certain
Ch
concerning the choice of the labor organization to represent the workers in a collective bargaining unit.

s
The “No Union” vote is always one of the choices in a certification election. Where majority of the valid votes cast results in
t o bl e
“No Union” obtaining the majority, the Med-Arbiter shall declare such fact in the order.
Only persons who have direct employment relationship with the employer may vote in the certification election,
i o
regardless of their period of employment.
l R
se
an r
IN AN UNORGANIZED ESTABLISHMENT
B a
Ch
 What is meant by “unorganized establishment”?
Jo s
As distinguished from “organized establishment,” an “unorganized establishment” is an employer entity where there is
e
. bl
no recognized or certified collective bargaining union or agent.
f
A company or an employer-entity, however, may still be considered an unorganized establishment even if there are
o Ro
unions in existence therein for as long as not one of them is duly certified as the sole and exclusive bargaining representative of
the employees in the particular bargaining unit it seeks to operate and represent.
P r an
Further, a company remains unorganized even if there is a duly recognized or certified bargaining agent for rank-and-
file employees, for purposes of the petition for certification election filed by supervisors. The reason is that the bargaining unit
B a r
Ch
composed of supervisors is separate and distinct from the unionized bargaining unit of rank-and-file employees. Hence, being
unorganized, the 25% required minimum support of employees within the bargaining unit of the supervisors need not be
es
l
complied with.
 How should certification election be conducted in an unorganized establishment?
ob
R
In case of a petition filed by a legitimate organization involving an unorganized establishment, the Med-Arbiter is
required to immediately order the conduct of a certification election upon filing of a petition for certification election by a legitimate
an
labor organization.
Ch
IN AN ORGANIZED ESTABLISHMENT
 What are the requisites for the conduct of a certification election in an organized establishment?
The Med-Arbiter is required to automatically order the conduct of a certification election by secret ballot in an organized
establishment as soon as the following requisites are fully met:
1. That a petition questioning the majority status of the incumbent bargaining agent is filed before the DOLE within the
60-day freedom period;
2. That such petition is verified; and
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2015 BAR EXAMS

3. That the petition is supported by the written consent of at least twenty-five percent (25%) of all the employees in
the bargaining unit.
RUN-OFF ELECTION
 What is run-off election?
A “run-off election” refers to an election between the labor unions receiving the two (2) highest number of votes in a
certification election or consent election with three (3) or more choices, where such a certification election or consent election
results in none of the three (3) or more choices receiving the majority of the valid votes cast, provided that the total number of
votes for all contending unions is at least fifty percent (50%) of the number of votes cast.
RE-RUN ELECTION
 When should a re-run election be conducted?

A re-run election may be justified if certain irregularities have been committed during the conduct of the certification
r
election such as, inter alia, disenfranchisement of the voters, lack of secrecy in the voting, fraud or bribery, in which case,
a
the certification election should be invalidated. Such invalidation would necessitate the conduct of a re-run election among the
B CONSENT ELECTION
contending unions to determine the true will and desire of the employee-electorates.
s
an
 What is consent election?
l e
b
A “consent election” refers to the process of determining through secret ballot the sole and exclusive representative
Ro h
of the employees in an appropriate bargaining unit for purposes of collective bargaining and negotiation. It is voluntarily agreed
upon by the parties, with or without the intervention of the DOLE.
C

an ar
What is the distinction between consent election and certification election?
Ch s
B
a n
A consent election is one mutually agreed upon by the parties, with or without the intervention of the DOLE, its
purpose being merely to determine the issue of majority representation of all the workers in an appropriate collective bargaining
e
l
unit; while a certification election is one which is ordered by the DOLE. The purpose for both electoral exercise is the same,
b n
i.e., to determine the sole and exclusive bargaining agent of all the employees in an appropriate bargaining unit for the purpose
o
ia r
of collective bargaining. From the very nature of consent election, it is a separate and distinct process from certification election
and has nothing to do with the import and effect of the latter.
R
an u
 Can the parties agree to the conduct of consent election even during the pendency of certification election?
G esOF THE Ba
Yes. In fact, the Med-Arbiter is required to determine if the contending labor unions are willing to submit themselves to
ChAFFILIATION AND DISAFFILIATION

a consent election. And if they do, the Med-Arbiter should conduct consent election instead of certification election.
t Roo b l UNION
i
LOCAL UNION FROM THE MOTHER
l an
1. AFFILIATION.
e
a. Mother union.
r
s
In relation to an affiliate, the federation or national union is commonly known as the “mother union.” This term is not
a
found in law but oftentimes, the Supreme Court uses this term to describe a federation or a national union.
B
h
Jo C s
b. Affiliate.
e
.
An “affiliate” refers to:
l
f b
(1) An independent union affiliated with a federation or a national union; or
Ro
(2) A local chapter which has been subsequently granted independent registration but did not disaffiliate from the
o
federation or national union which created it.
r an r
c. A chartered local/local chapter, not an affiliate.
a
P
Based on the above definition and description, technically, a local chapter created through the mode of chartering by a
h B
mother union under Article 234-A of the Labor Code, cannot be properly called an “affiliate” if it has not acquired any
C s
independent registration of its own.
d. Purpose of affiliation.
l e
b
The purpose is to further strengthen the collective bargaining leverage of the affiliate. No doubt, the purpose of
o
affiliation by a local union with a mother union (federation or national union) is to increase by collective action its bargaining
R
power in respect of the terms and conditions of labor.
n
e. Contract of agency.
a
The mother union, acting for and in behalf of its affiliate, has the status of an agent while the local union remains the
Ch
principal – the basic unit of the association free to serve the common interest of all its members subject only to the restraints
imposed by the constitution and by-laws of the association.
f. Some principles on affiliation.
 Independent legal personality of an affiliate union is not affected by affiliation.
 Affiliate union becomes subject of the rules of the federation or national union.
 The appendage of the acronym of the federation or national union after the name of the affiliate union in the
registration with the DOLE does not change the principal-agent relationship between them. Such inclusion of the
acronym is merely to indicate that the local union is affiliated with the federation or national union at the time of the
registration. It does not mean that the affiliate union cannot independently stand on its own.
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2015 BAR EXAMS

 The fact that it was the federation which negotiated the CBA does not make it the principal and the affiliate
or local union which it represents, the agent.
 In case of illegal strike, the local union, not the mother union, is liable for damages.
2. DISAFFILIATION.
a. Right to disaffiliate.
The right of the affiliate union to disaffiliate from its mother federation or national union is a constitutionally-guaranteed
right which may be invoked by the former at any time. It is axiomatic that an affiliate union is a separate and voluntary
association free to serve the interest of all its members - consistent with the freedom of association guaranteed in the
Constitution.
b. Disaffiliation of independently-registered union and local chapter, distinguished.
The disaffiliation of an independently-registered union does not affect its legitimate status as a labor organization.
However, the same thing may not be said of a local chapter which has no independent registration since its creation was effected
pursuant to the charter certificate issued to it by the federation or national union. Once a local chapter disaffiliates from the
federation or national union which created it, it ceases to be entitled to the rights and privileges granted to a legitimate labor
c. Some principles on disaffiliation.

a r
organization. Hence, it cannot, by itself, file a petition for certification election.
B
 Disaffiliation does not divest an affiliate union of its legal personality.
s
an
 Disaffiliation of an affiliate union is not an act of disloyalty.
l e
 Disaffiliation for purposes of forming a new union does not terminate the status of the members thereof as
b
employees of the company. By said act of disaffiliation, the employees who are members of the local union did not
Ro h
form a new union but merely exercised their right to register their local union. The local union is free to disaffiliate
from its mother union.
C
 Disaffiliation should be approved by the majority of the union members.
an r
 Disaffiliation terminates the right to check-off federation dues. The obligation to check-off federation dues is
a
n
terminated with the valid disaffiliation of the affiliate union from the federation with which it was previously
B
Ch
affiliated.
s a
 Disaffiliation does not affect the CBA. It does not operate to amend it or change the administration of the contract.
e
l
 Disaffiliating from the federation and entering into a CBA with the employer does not constitute an unfair labor
practice.
b n
o
ia r
 Disaffiliation is not a violation of the union security clause.
R (i)
an
SUBSTITUTIONARY DOCTRINE
u Ba
G
1. CHANGE OF BARGAINING REPRESENTATIVE DURING THE LIFE OF A CBA.
Ch s
It simply refers to the substitution of the bargaining agent by a newly certified agent which defeated in in the
o e
certification election. As new bargaining agent, it is duty-bound to respect the existing CBA but it can renegotiate for new terms
l
t b
and conditions therein.
i o
2. EFFECT OF SUBSTITUTIONARY DOCTRINE ON THE DEPOSED UNION’S PERSONAL UNDERTAKINGS.
l R
se
In case of change of bargaining agent under the substitutionary doctrine, the new bargaining agent is not bound by the
an r
personal undertakings of the deposed union like the “no strike, no lockout” clause in a CBA which is the personal undertaking
of the bargaining agent which negotiated it.
B a
Jo Ch
3. SOME PRINCIPLES ON SUBSTITUTIONARY DOCTRINE.
e s
 The substitutionary doctrine cannot be invoked to subvert an existing CBA, in derogation of the principle of freedom of
. bl
contract. The substitution of a bargaining agent cannot be allowed if the purpose is to subvert an existing CBA freely
f
entered into by the parties. Such act cannot be sanctioned in law or in equity as it is in derogation of the principle
Ro
underlying the freedom of contract and good faith in contractual relations.
r o
 The substitutionary doctrine is applicable also to a situation where the local union, which was created through the process of
an
chartering by the mother union, disaffiliates from the latter after it secured an independent registration. The local union will
a r
P
thus be substituted to that of the federation which negotiated the CBA as in Elisco-Elirol Labor Union [NAFLU] v. Noriel,
B
Ch
where petitioner union was created through the mode of chartering by the National Federation of Labor Unions (NAFLU)
s
and later, it secured its independent registration with the BLR and disaffiliated with NAFLU by virtue of a resolution by its
e
general membership.
(b)
b l
UNION DUES AND SPECIAL ASSESSMENTS
R o
an
1. REQUISITES FOR VALIDITY OF UNION DUES AND SPECIAL ASSESSMENTS.
The following requisites must concur in order for union dues and special assessments for the union’s incidental
Ch
expenses, attorney’s fees and representation expenses to be valid, namely:
(a) Authorization by a written resolution of the majority of all the members at a general membership meeting
duly called for the purpose;
(b) Secretary’s record of the minutes of said meeting; and
(c) Individual written authorizations for check-off duly signed by the employees concerned.
3. ASSESSMENT FOR ATTORNEY’S FEES, NEGOTIATION FEES AND SIMILAR CHARGES.
The rule is that no such attorney’s fees, negotiation fees or similar charges of any kind arising from the negotiation or
conclusion of the CBA shall be imposed on any individual member of the contracting union. Such fees may be charged only
73
2015 BAR EXAMS

against the union funds in an amount to be agreed upon by the parties. Any contract, agreement or arrangement of any
sort to the contrary is deemed null and void. Clearly, what is prohibited is the payment of attorney’s fees when it is effected
through forced contributions from the workers from their own funds as distinguished from the union funds.
4. CHECK-OFF OF UNION DUES AND ASSESSMENTS.
“Check-off” means a method of deducting from the employee’s pay at prescribed periods, any amount due for fees,
fines or assessments. It is a process or device whereby the employer, on agreement with the union recognized as the proper
bargaining representative, or on prior authorization from its employees, deducts union dues and assessments from the latter’s
wages and remits them directly to the union.
5. INDIVIDUAL WRITTEN AUTHORIZATION, WHEN REQUIRED.
The law strictly prohibits the check-off from any amount due an employee who is a member of the union, of any union
dues, special assessment, attorney’s fees, negotiation fees or any other extraordinary fees other than for mandatory activities
under the Labor Code, without the individual written authorization duly signed by the employee. Such authorization must
specifically state the amount, purpose and beneficiary of the deduction. The purpose of the individual written authorization is to
protect the employees from unwarranted practices that diminish their compensation without their knowledge or consent.
a r
6. INDIVIDUAL WRITTEN AUTHORIZATION, WHEN NOT REQUIRED.
B
In the following cases, individual written authorization is not required:
s
an
l e
a. Assessment from non-members of the bargaining agent of “agency fees” which should be equivalent to the dues
and other fees paid by members of the recognized bargaining agent, if such non-members accept the benefits
b
under the CBA.
Ro h
b. Deductions for fees for mandatory activities such as labor relations seminars and labor education activities.
C
c. Deductions for withholding tax mandated under the National Internal Revenue Code.
an ar
e. Deductions for withholding of wages because of employee’s debt to the employer which is already due.
B n
f. Deductions made pursuant to a judgment against the worker under circumstances where the wages may be the
Ch
subject of attachment or execution but only for debts incurred for food, clothing, shelter and medical
attendance.
e s a
l
n
g. Deductions from wages ordered by the court.
b
ia r
h. Deductions authorized by law such as for premiums for PhilHealth, SSS, Pag-IBIG, employees’
compensation and the like.
R o
u
(c)
anREQUISITES FOR(i) ASSESSMENT a

AGENCY FEES
Ch G es B
o
t Ro b l
1. NATURE OF AGENCY FEE - NEITHER CONTRACTUAL NOR STATUTORY BUT QUASI-CONTRACTUAL.
i
l an
The bargaining agent which successfully negotiated the CBA with the employer is given the right to collect a
e
reasonable fee, called “agency fee” from its non-members - who are employees covered by the bargaining unit being
r
represented by the bargaining agent - in case they accept the benefits under the CBA. It is called “agency fees” because by
s a
availing of the benefits of the CBA, they, in effect, recognize and accept the bargaining union as their “agent” as well.
h B
Jo C
2. A NON-BARGAINING UNION MEMBER HAS THE RIGHT TO ACCEPT OR NOT THE BENEFITS OF THE CBA.
e s
.
There is no law that compels a non-bargaining union member to accept the benefits provided in the CBA. He has the
l
freedom to choose between accepting and rejecting the CBA itself by not accepting any of the benefits flowing therefrom.
o f Ro
b
Consequently, if a non-bargaining union member does not accept or refuses to avail of the CBA-based benefits, he is not under
any obligation to pay the “agency fees” since, in effect, he does not give recognition to the status of the bargaining union as his
agent.
P r
3. LIMITATION ON THE AMOUNT OF AGENCY FEE.
h
an B a r
The bargaining union cannot capriciously fix the amount of agency fees it may collect from its non-members. Article
s
248(e) of the Labor Code expressly sets forth the limitation in fixing the amount of the agency fees, thus:
C
(1) It should be reasonable in amount; and
e
b l
(2) It should be equivalent to the dues and other fees paid by members of the recognized collective bargaining agent.
R o
Thus, any agency fee collected in excess of this limitation is a nullity.
4. NON-MEMBERS OF THE CERTIFIED BARGAINING AGENT NEED NOT BECOME MEMBERS THEREOF.
a n
The employees who are not members of the certified bargaining agent which successfully concluded the CBA are not
required to become members of the latter. Their acceptance of the benefits flowing from the CBA and their act of paying the
Ch
agency fees do not make them members thereof.
5. CHECK-OFF OF AGENCY FEES.
“Check-off” of agency fees is a process or device whereby the employer, upon agreement with the bargaining union,
deducts agency fees from the wages of non-bargaining union members who avail of the benefits from the CBA and remits them
directly to the bargaining union.
6. ACCRUAL OF RIGHT OF BARGAINING UNION TO DEMAND CHECK-OFF OF AGENCY FEES.
The right of the bargaining union to demand check-off of agency fees accrues from the moment the non-bargaining
union member accepts and receives the benefits from the CBA. This is the operative fact that would trigger such liability.
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2015 BAR EXAMS

7. NO INDIVIDUAL WRITTEN AUTHORIZATION BY NON-BARGAINING UNION MEMBERS REQUIRED.

To effect the check-off of agency fees, no individual written authorization from the non-bargaining union members who
accept the benefits resulting from the CBA is necessary.
8. EMPLOYER’S DUTY TO CHECK-OFF AGENCY FEES.
It is the duty of the employer to deduct or “check-off” the sum equivalent to the amount of agency fees from the non-
bargaining union members' wages for direct remittance to the bargaining union.”
10. MINORITY UNION CANNOT DEMAND FROM THE EMPLOYER TO GRANT IT THE RIGHT TO CHECK-OFF OF UNION
DUES AND ASSESSMENTS FROM THEIR MEMBERS.
The obligation on the part of the employer to undertake the duty to check-off union dues and special assessments
holds and applies only to the bargaining agent and not to any other union/s (called “Minority Union/s”).
B.
RIGHT TO COLLECTIVE BARGAINING
DUTY TO BARGAIN COLLECTIVELY
1. MEANING OF DUTY TO BARGAIN COLLECTIVELY.
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The “duty to bargain collectively” means the performance of a mutual obligation to meet and convene promptly
and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work and all
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other terms and conditions of employment, including proposals for adjusting any grievances or questions arising under such
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agreement and executing a contract incorporating such agreements if requested by either party but such duty does not compel
any party to agree to a proposal or to make any concession.
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The duty does not compel any party to agree blindly to a proposal nor to make concession. While the law
imposes on both the employer and the bargaining union the mutual duty to bargain collectively, the employer is not under any
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legal obligation to initiate collective bargaining negotiations.
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2. TWO (2) SITUATIONS CONTEMPLATED.
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The duty to bargain collectively involves two (2) situations, namely:
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1. Duty to bargain collectively in the absence of a CBA under Article 251 of the Labor Code.
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2. Duty to bargain collectively when there is an existing CBA under Article 253 of the Labor Code.
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WHEN THERE IS ABSENCE OF A CBA
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1. HOW DUTY SHOULD BE DISCHARGED WHEN THERE IS NO CBA YET.
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The duty to bargain collectively when there has yet been no CBA in the bargaining unit where the bargaining agent
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seeks to operate should be complied with in the following order:
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First, in accordance with any agreement or voluntary arrangement between the employer and the bargaining agent
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providing for a more expeditious manner of collective bargaining; and
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Secondly, in its absence, in accordance with the provisions of the Labor Code, referring to Article 250 thereof which
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lays down the procedure in collective bargaining.
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WHEN THERE IS A CBA
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.
1. CONCEPT.
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When there is a CBA, the duty to bargain collectively shall mean that neither party shall terminate nor modify such
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agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty
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(60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full force and
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effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by
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the parties.
P2. FREEDOM PERIOD.
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The last sixty (60) days of the 5-year lifetime of a CBA immediately prior to its expiration is called the “freedom period.”
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It is denominated as such because it is the only time when the law allows the parties to freely serve a notice to terminate, alter or
by filing the appropriate petition for certification election.

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modify the existing CBA. It is also the time when the majority status of the bargaining agent may be challenged by another union
3. AUTOMATIC RENEWAL CLAUSE.

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a. Automatic renewal clause deemed incorporated in all CBAs.
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Pending the renewal of the CBA, the parties are bound to keep the status quo and to treat the terms and conditions
embodied therein still in full force and effect during the 60-day freedom period and/or until a new agreement is negotiated and
ultimately concluded and reached by the parties. This principle is otherwise known as the “automatic renewal clause” which is
mandated by law and therefore deemed incorporated in all CBAs.
For its part, the employer cannot discontinue the grant of the benefits embodied in the CBA which just expired as it is
duty-bound to maintain the status quo by continuing to give the same benefits until a renewal thereof is reached by the parties.
On the part of the union, it has to observe and continue to abide by its undertakings and commitments under the expired CBA
until the same is renewed.
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4. KIOK LOY DOCTRINE.

This doctrine is based on the ruling In Kiok Loy v. NLRC, 1 where the petitioner, Sweden Ice Cream Plant, refused to
submit any counter-proposal to the CBA proposed by its employees’ certified bargaining agent. The High Court ruled that the
employer had thereby lost its right to bargain the terms and conditions of the CBA. Thus, the CBA proposed by the union was
imposed lock, stock and barrel on the erring company.
The Kiok Loy case epitomizes the classic case of negotiating a CBA in bad faith consisting of the employer’s refusal to
bargain with the collective bargaining agent by ignoring all notices for negotiations and requests for counter-proposals. Such
refusal to send a counter-proposal to the union and to bargain on the economic terms of the CBA constitutes an unfair labor
practice under Article 248(g) of the Labor Code.
2.
COLLECTIVE BARGAINING AGREEMENT (CBA)
1. CBA.
A “Collective Bargaining Agreement” or “CBA” for short, refers to the negotiated contract between a duly recognized or
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certified exclusive bargaining agent of workers and their employer, concerning wages, hours of work and all other terms and
conditions of employment in the appropriate bargaining unit, including mandatory provisions for grievances and arbitration
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machineries. It is executed not only upon the request of the exclusive bargaining representative but also by the employer.
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2. ESSENTIAL REQUISITES OF COLLECTIVE BARGAINING.
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Prior to any collective bargaining negotiations between the employer and the bargaining union, the following requisites
must first be satisfied:
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1. Employer-employee relationship must exist between the employer and the members of the bargaining unit
being represented by the bargaining agent;
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2. The bargaining agent must have the majority support of the members of the bargaining unit established
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through the modes sanctioned by law; and
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3. A lawful demand to bargain is made in accordance with law.
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3. SOME PRINCIPLES ON CBA.
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 CBA is the law between the parties during its lifetime and thus must be complied with in good faith.
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 Being the law between the parties, any violation thereof can be subject of redress in court.
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 Non-impairment of obligations of contract. A contract is the law between the parties and courts have no choice but to
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enforce such contract so long as it is not contrary to law, morals, good customs or public policy. Otherwise, courts would be
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interfering with the freedom of contract of the parties.
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 CBA is not an ordinary contract as it is impressed with public interest.
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 Automatic Incorporation Clause – law is presumed part of the CBA.
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 The benefits derived from the CBA and the law are separate and distinct from each other.
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 Workers are allowed to negotiate wage increases separately and distinctly from legislated wage increases. The
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parties may validly agree in the CBA to reduce wages and benefits of employees provided such reduction does not
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go below the minimum standards.
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 Ratification of the CBA by majority of all the workers in the bargaining unit makes the same binding on all employees
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therein.
 Employees entitled to CBA benefits. The following are entitled to the benefits of the CBA:
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(1) Members of the bargaining union;
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(2) Non-members of the bargaining union but are members of the bargaining unit;
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(3) Members of the minority union/s who paid agency fees to the bargaining union; and
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(4) Employees hired after the expiration of the CBA.
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 Pendency of a petition for cancellation of union registration is not a prejudicial question before CBA negotiation
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 CBA should be construed liberally. If the terms of a CBA are clear and there is no doubt as to the intention of the
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contracting parties, the literal meaning of its stipulation shall prevail.
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(a)
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MANDATORY PROVISIONS OF CBA
1. MANDATORY STIPULATIONS OF THE CBA.
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The Syllabus mentions 4 provisions that are mandatorily required to be stated in the CBA, to wit:
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1. Grievance Procedure;
2. Voluntary Arbitration;
3. No Strike-No Lockout Clause; and
4. Labor-Management Council (LMC).
If these provisions are not reflected in the CBA, its registration will be denied by the BLR.
1 G.R.No. L-54334, Jan. 22, 1986, 141 SCRA 179, 188.

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(i)
GRIEVANCE PROCEDURE
1. “GRIEVANCE” OR “GRIEVABLE ISSUE”.
A “grievance” or “grievable issue” is any question raised by either the employer or the union regarding any of the
following issues or controversies:
1. The interpretation or implementation of the CBA;
2. The interpretation or enforcement of company personnel policies; or
3. Any claim by either party that the other party is violating any provisions of the CBA or company personnel
policies.
In order to be grievable, the violations of the CBA should be ordinary and not gross in character; otherwise, they
shall be considered as unfair labor practice (ULP).
Gross violation of the CBA is defined as flagrant and/or malicious refusal by a party thereto to comply with the
economic provisions thereof. If what is violated, therefore, is a non-economic or a political provision of the CBA, the same
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shall not be considered as unfair labor practice and may thus be processed as a grievable issue in accordance with and following
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the grievance machinery laid down in the CBA.
2. GRIEVANCE MACHINERY.
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“Grievance machinery” refers to the mechanism for the adjustment and resolution of grievances arising from the
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policies.
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interpretation or implementation of a CBA and those arising from the interpretation or enforcement of company personnel
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3. GRIEVANCE PROCEDURE.
“Grievance procedure” refers to the internal rules of procedure established by the parties in their CBA with voluntary
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arbitration as the terminal step, which are intended to resolve all issues arising from the implementation and interpretation of their
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collective agreement. It is that part of the CBA which provides for a peaceful way of settling differences and misunderstanding
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between the parties.
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The terms “grievance procedure” and “grievance machinery” may be used interchangeably.
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VOLUNTARY
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ARBITRATION
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1. VOLUNTARY ARBITRATION.
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“Voluntary arbitration” refers to the mode of settling labor-management disputes in which the parties select a
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competent, trained and impartial third person who is tasked to decide on the merits of the case and whose decision is final and
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executory.
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2. VOLUNTARY ARBITRATOR.
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A “Voluntary Arbitrator” refers to any person who has been mutually named or designated by the parties to the CBA
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– the employer and the bargaining agent - to hear and decide the issues between them.
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A Voluntary Arbitrator is not an employee, functionary or part of the government or of the Department of Labor and
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Employment, but he is authorized to render arbitration services provided under labor laws.
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“NO STRIKE, NO LOCKOUT” CLAUSE
1. SIGNIFICANCE OF THE CLAUSE.
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A “No Strike, No Lockout” clause in the CBA is an expression of the firm commitment of the parties thereto that, on
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the part of the union, it will not mount a strike during the effectivity of the CBA, and on the part of the employer, that it will not
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stage a lockout during the lifetime thereof.
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This clause may be invoked by an employer only when the strike is economic in nature or one which is conducted to
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force wage or other concessions from the employer that are not mandated to be granted by the law itself. It does not bar strikes
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grounded on unfair labor practices. This is so because it is presumed that all economic issues between the employer and the
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bargaining agent are deemed resolved with the signing of the CBA.
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The same rule also applies in case of lockout. The said clause may only be invoked by the union in case the ground
for the lockout is economic in nature but it may not be so cited if the ground is unfair labor practice committed by the union.
2. EFFECT OF VIOLATION OF THE CLAUSE.
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A strike conducted in violation of this clause is illegal.
(iv)
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LABOR-MANAGEMENT COUNCIL
1. CREATION OF LMC, CONSTITUTIONALLY AND LEGALLY JUSTIFIED.

The Labor-Management Council (LMC) whose creation is mandated under the Labor Code, is meant to implement the
constitutionally mandated right of workers to participate in policy and decision-making processes of the establishment
where they are employed insofar as said processes will directly affect their rights, benefits and welfare. This is the body that
implements the policy of co-determination in the Constitution.
The LMC is mandated to be created in both organized and unorganized establishments.
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2. SELECTION OF REPRESENTATIVES TO LMC.

In organized establishments, the workers’ representatives to the committee or council should be nominated by the
exclusive bargaining representative.
In establishments where no legitimate labor organization exists, the workers’ representative should be elected
directly by the employees at large.
3. LABOR-MANAGEMENT COUNCIL (LMC) VS. GRIEVANCE MACHINERY (GM).
To avoid confusion and possible major legal complication, a clear distinction line should be drawn between LMC and
GM. The following may be cited:
1. Constitutional origin. – The creation of the LMC is based on the constitutional grant to workers of the right to
participate in policy and decision-making processes under the 1st paragraph, Section 3, Article XIII of the 1987 Constitution,
thus:
“It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of
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tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by law.”
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The creation of a GM, on the other hand, is based on a different constitutional provision, the 2nd paragraph, Section 3,
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Article XIII of the 1987 Constitution, which provides as follows:
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“The State shall promote the principle of shared responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual
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compliance therewith to foster industrial peace.”
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2. Legal anchor. - The creation of LMC is provided under Article 255 of the Labor Code; while the formation of a GM
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is mandated under Article 260 of the same Code.
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3. Compulsory provision in the CBA. - Both LMC and GM are compulsorily required to be embodied in the CBA in
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order for it to be considered a valid agreement.
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4. Purpose for creation. - The LMC is created for the purpose of affording workers the right to participate in policy and
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decision-making processes in matters affecting their rights, benefits and welfare; while that of the GM is to resolve disputes and
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grievances arising from such policies or decisions or more specifically, to adjust and resolve grievances arising from (1) the
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interpretation or implementation of the CBA or (2) the interpretation or enforcement of company personnel policies.
5. Nature of functions. - The LMC is in the nature of a preventive mechanism meant to prevent and avoid disputes or
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grievances by co-determining the proper policies that should be implemented by the employer in respect of the workers’ rights,
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benefits and welfare; while a GM is an adjudicatory mechanism which is set into motion only when a dispute or grievance occurs.
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6. Nature of cognizable issues. – The LMC performs non-adversarial and non-adjudicatory tasks as it concerns itself
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only with policy formulations and decisions affecting the workers’ rights, benefits and welfare and not violations or transgressions
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of any policy, rule or regulation; while that of the GM is adversarial and adjudicatory in character since its jurisdiction is confined
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to resolving and deciding disputes and grievances between management and the workers arising from violations or
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transgressions of existing policies, rules or regulations. In other words, the LMC does not resolve grievable or contentious
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issues; the GM does.
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A case illustrative of this principle is the 2011 case of Cirtek Employees Labor Union-Federation of Free Workers
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v. Cirtek Electronics, Inc. The CBA negotiation between petitioner union and respondent company was deadlocked resulting in
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the staging of a strike by the former. The DOLE Secretary assumed jurisdiction over the labor dispute but before he could rule on
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the controversy, respondent created a Labor-Management Council (LMC) through which it concluded with the remaining officers
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of petitioner a Memorandum of Agreement (MOA) providing for daily wage increases of P6.00 per day effective January 1, 2004
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and P9.00 per day effective January 1, 2005. Petitioner submitted the MOA to the DOLE Secretary, alleging that the remaining
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officers signed the MOA under respondent’s assurance that should the Secretary order a higher award of wage increase,
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respondent would comply.
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without the assistance of the Federation of Free Workers or counsel, adding that respondent could have waited for the
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Secretary’s resolution of the pending CBA deadlock or that the MOA could have been concluded before representatives of the
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DOLE Secretary. As found by the DOLE Secretary, the MOA came about as a result of the constitution, at respondent's behest,
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of the LMC which, he reminded the parties, should not be used as an avenue for bargaining but for the purpose of affording
workers to participate in policy and decision-making. Hence, the agreements embodied in the MOA were not the proper subject
of the LMC deliberation or procedure but of CBA negotiations and, therefore, deserving little weight.
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certified bargaining agent, depending on whether the establishment is organized or unorganized. Thus, in organized
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7. Composition. - The representatives of the workers to the LMC may or may not be nominated by the recognized or
establishments, the workers’ representatives to the LMC should be nominated by the exclusive bargaining agent. In
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establishments where no legitimate labor organization exists, the workers’ representatives should be elected directly by the
employees of the establishment at large; while those in the GM are nominated solely by the bargaining agent.
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(b)
DURATION OF CBA
(i)
FOR ECONOMIC PROVISIONS
(ii)
FOR NON-ECONOMIC PROVISIONS
1. TERMS OF A CBA.
The terms of a CBA are classified into two (2), viz.:
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2015 BAR EXAMS

(a) Representation aspect – 5 years which is the lifetime of a CBA;

(b) All other provisions – Subject to renegotiation after first 3 years of the 5-year lifetime of CBA.
2. REPRESENTATION ASPECT.
The phrase “representation aspect” in Article 253-A of the Labor Code refers to the identity and majority status of the
bargaining agent that successfully negotiated the CBA as the exclusive bargaining representative of the employees in the
appropriate bargaining unit concerned.
The 5-year representation status of the incumbent exclusive bargaining agent should be reckoned from the effectivity
of the CBA. This means that no petition for certification election questioning its majority status may be entertained during the
lifetime of the CBA except within the 60-day freedom period immediately preceding the expiry date of the 5-year term.
 Suspension of CBA for a period longer than 5 years, held valid.
1
The case of Rivera v. Espiritu, is in point. It was held here that the suspension of the CBA between PAL and PALEA
for ten (10) years in order to resolve the strike is not violative of the Constitution or the law. This is so because the right to free
collective bargaining includes the right to suspend it. There is nothing in Article 253-A which prohibits the parties from waiving or
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suspending the mandatory timetables and agreeing on the remedies to enforce the same.
Article 253-A has a two-fold purpose. One is to promote industrial stability and predictability. Inasmuch as the
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agreement sought to promote industrial peace at PAL during its rehabilitation, said agreement satisfies the first purpose of Article
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253-A. The other is to assign specific timetables wherein negotiations become a matter of right and requirement. Nothing in
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Article 253-A prohibits the parties from waiving or suspending the mandatory timetables and agreeing on the remedies to enforce
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the same. The suspension agreement is a valid exercise of the freedom to contract. Under the principle of inviolability of
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contracts guaranteed by the Constitution, the contract must be upheld. The agreement afforded full protection to labor; promoted
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the shared responsibility between workers and employers; and exercised the voluntary modes in settling disputes, including
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conciliation to foster industrial peace.
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3. RE-NEGOTIATION OF ALL PROVISIONS OTHER THAN THE REPRESENTATION ASPECT OF THE CBA SHOULD BE
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MADE AFTER FIRST 3 YEARS FROM EFFECTIVITY.
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Considering that the five (5) year period is quite long during which the economic situations of the parties may have
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already changed, Article 253-A recognizes the need for the parties to re-assess and re-negotiate all the provisions of the CBA,
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except its representation aspect, after the lapse of the first three (3) years of its 5-year lifetime. Such re-negotiation, however,
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should only pertain to the terms and conditions of the parties’ relationship for the last remaining two (2) years of the CBA’s 5-year
term. This re-negotiation process may be invoked by any of the parties as a matter of right.
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4. “ALL OTHER PROVISIONS,” REFER TO BOTH ECONOMIC AND NON-ECONOMIC PROVISIONS.
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The phrase “all other provisions” mentioned in Article 253-A simply refers to all the provisions of the CBA irrespective
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of whether they are economic or non-economic in nature. The only item excepted therefrom is the representation status of
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the incumbent exclusive bargaining agent which may only be questioned during the 60-day freedom period.
5. RETROACTIVITY OF THE CBA.
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The application of the rules on retroactivity depends on any of the following two (2) situations:
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(a) When the CBA is voluntarily concluded by the parties; or
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(b) When the CBA is concluded through arbitral award.
6. RULE WHEN VOLUNTARILY CONCLUDED BY THE PARTIES IN THE NEGOTIATING TABLE.
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(a) The effectivity of the CBA shall retroact to the day immediately after the date of expiry of the old CBA in case the
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new CBA is concluded and entered into within six (6) months from the said expiry date.
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(b) If the new CBA is entered into beyond six (6) months from the expiry date of the old CBA, the parties are given
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the right to negotiate the duration of the retroactivity thereof.
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7. RULE ON RETROACTIVITY IN CASE OF CONCLUSION OF CBA THROUGH ARBITRAL AWARD.
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a. No law on retroactivity in case of CBA arbitral awards.
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The law is silent as to the retroactivity of a CBA secured through arbitral award or that granted not by virtue of the
a
Pmutual agreement of the parties but by intervention of the government.
b. Variations in the application of the retroactivity rule.
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The rule laid down by the Supreme Court in cases involving this particular issue of retroactivity varies from case to
case. Basically, the rule, based on jurisprudence, may be restated in the following manner:
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(1) Prospectivity rule;
(2) Retroactivity rule which makes the CBA retroactively effective to:
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(a) the date of the expiration of the previous CBA; and
(b) the first day after the six-month period following the expiration of the last day of the CBA.
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(iii)
FREEDOM PERIOD
1. 60-DAY FREEDOM PERIOD.
When there is an existing CBA, the parties thereto are bound to observe the terms and conditions therein set forth until
its expiration. Neither party is allowed to terminate nor modify such agreement during its lifetime. The only time the parties are
1 G.R. No. 135547, Jan. 23, 2002.

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allowed to terminate or modify the agreement is within the so-called “freedom period” of at least sixty (60) days prior to its
expiration date by serving a notice to that effect.”
2. REASON IT IS CALLED “FREEDOM PERIOD.”
The last 60 days of the 5-year lifetime of a CBA immediately prior to its expiration is called the “freedom period”
because:
(a) it is the only time when the law allows the parties to freely serve a notice to terminate, alter or modify the existing
CBA; and
(b) it is also the time when the majority status of the bargaining agent may be challenged by another union by filing
the appropriate petition for certification election.
3. RULE ON FILING OF CERTIFICATION ELECTION VIS-À-VIS FREEDOM PERIOD.
In a petition involving an organized establishment or enterprise where the majority status of the incumbent collective
bargaining union is questioned by a legitimate labor organization, the Med-Arbiter shall immediately order the conduct of a
certification election if the petition is filed during the last sixty (60) days of the CBA. Any petition filed before or after the 60-
day freedom period shall be dismissed outright.
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The 60-day freedom period based on the original collective bargaining agreement shall not be affected by any
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amendment, extension or renewal of the CBA for purposes of certification election.
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4. AUTOMATIC RENEWAL CLAUSE.
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A petition for certification election challenging the majority status of the existing bargaining agent should be filed within –
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and not before or after - said 60-day freedom period. Upon the expiration of the said period and no petition for certification
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election is filed by a challenging union, the employer is duty-bound to continue to recognize the majority status of the incumbent
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bargaining agent. Negotiation for a new CBA may even validly commence between the incumbent bargaining agent and
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the employer during the 60-day freedom period if no challenge to the bargaining agent’s majority status is posed by
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another union.
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3.
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UNION SECURITY
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1. NATURE AND PURPOSE OF UNION SECURITY CLAUSE.
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The “union security clause” allows the parties thereto to enter into an agreement requiring compulsory membership
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in the bargaining agent which successfully negotiated said CBA as a condition for continued employment with the
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exception of employees who are already members of another union at the time of the signing of the CBA.
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“Union security” is a generic term which is applied to and comprehends “closed shop,” “union shop,” “maintenance of
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membership” or any other form of agreement which imposes upon the employees the obligation to acquire or retain union
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membership as a condition to their continued employment. In other words, the purpose of a union security arrangement is to
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guarantee the continued existence of the union through enforced membership for the benefit of the workers.
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Without this clause, the existence of the union is always subject to uncertainty as its members may resign anytime
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resulting in the decimation of its ranks. The union becomes gradually weakened and increasingly vulnerable to company
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machinations. In this security clause lies the strength of the union during the enforcement of the CBA. It is this clause that
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provides labor with substantial power in collective bargaining.
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2. THE RIGHT NOT TO JOIN A UNION IS NOT ABSOLUTE SINCE IT MAY BE RESTRICTED.
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The right of an employee not to join a union is not absolute and must give way to the collective good of all members of
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the bargaining unit. When certain employees are obliged to join a particular union as a requisite for continued employment, as in
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the case of a union security clause, this condition is a valid restriction on the freedom or right not to join any labor organization
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because it is in favor of unionism.
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3. UNION SECURITY CLAUSE DOES NOT VIOLATE CONSTITUTIONAL RIGHT TO FREEDOM OF ASSOCIATION.
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A union security clause in a CBA is not a violation or a restriction of the employee’s right to freedom of association
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Pguaranteed by the Constitution. Labor, being the weaker in economic power and resources than capital, deserves protection that
is actually substantial and material.
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4. EMPLOYEES EXEMPTED FROM COVERAGE OF UNION SECURITY CLAUSE.
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All employees in the bargaining unit covered by a Union Security Clause in their CBA with the employer are subject to
its terms. However, under law and established jurisprudence, the following kinds of employees are exempted from its coverage,
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namely:
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1. Employees who, at the time the union security agreement takes effect, are bona-fide members of a religious
organization which prohibits its members from joining labor unions on religious grounds;
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2. Employees who are already members of a union other than the bargaining agent at the time the union security
agreement took effect;
3. Confidential employees who are excluded from the rank-and-file or supervisory bargaining unit;
4. Supervisory employees who are excluded from becoming members of the rank-and-file union and vice-versa; and
5. Employees excluded from the union security clause by express terms of the agreement.
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(a)
UNION SECURITY CLAUSES:
CLOSED SHOP, UNION SHOP, MAINTENANCE OF MEMBERSHIP SHOP, ETC.
1. CLASSIFICATION OF UNION SECURITY ARRANGEMENTS.
Generally, a union security clause may take the form of:
1. Closed-shop agreement;
2. Maintenance of membership agreement;
3. Union shop agreement;
4. Modified union shop agreement;
5. Exclusive bargaining agreement;
6. Bargaining for members only agreement;
7. Agency shop agreement; or
8. Preferential hiring agreement.
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 Modification of arrangements.
the peculiar requirements of the situation.

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The above classification admits of certain modified types which the parties may agree upon in the CBA depending on
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2. CLOSED-SHOP AGREEMENT.
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A “closed-shop” may be defined as a scheme in which, by agreement between the employer and its employees
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through their bargaining union/agent, no person may be employed unless he or she is, becomes, and, for the duration of the
agreement, remains a member in good standing of the bargaining union. Basically, this kind of agreement stipulates the
C
undertaking by the employer not to hire or employ any person who is not a member of the bargaining union. Once employed, it
an r
is required that the said person should remain a member of the bargaining union in good standing as a condition for continued
employment, at least during the whole duration of the CBA.
a
Ch
3. MAINTENANCE OF MEMBERSHIP AGREEMENT.
e s
B
a n
There is “maintenance of membership agreement” when employees, who are union members as of the effective
l
n
date of the agreement, or who thereafter become members, must maintain union membership as a condition for continued
b
ia r
employment until they are promoted or transferred out of the bargaining unit, or the agreement is terminated. Its role is to protect
R o
the union’s current membership. By its express terms, it covers and renders continued union membership compulsory for: (1)
those who were already union members at the time the CBA was signed; and (2) the new employees who will become regular
an u
during the life of the CBA.
G Ba
4. UNION SHOP AGREEMENT.
Ch
There is “union shop” when all new regular employees are required to join the union within a certain period as a
s
condition for their continued employment. Its role is to compel the membership of those who are not yet union members. Under
o l e
this scheme, the employer is given the freedom to hire and employ any person who is not a member of the bargaining agent.
t b
Once such person becomes an employee, he is required to become a member of the bargaining agent and to remain as such
i o
member in good standing for the whole period of the effectivity of the CBA as a condition for his continued employment.
5. MODIFIED UNION SHOP AGREEMENT.
l R
se an r
Employees under this arrangement who are not union members at the time of the signing or execution of the CBA are
a
not required to join the bargaining union. However, any and all workers hired or employed after the signing or execution of
B
Jo Ch
the CBA are required to join the bargaining union.
6. EXCLUSIVE BARGAINING AGENT AGREEMENT.
e s
f. bl
The union which negotiated and concluded the CBA with management is considered and recognized as the sole and
exclusive bargaining agent of all the covered employees in the bargaining unit, whether they be members or not of the said
Ro
agent.
o
7. BARGAINING FOR MEMBERS ONLY AGREEMENT.
r an
Under this arrangement, the union which negotiated and concluded the CBA with management is recognized as the
a r
P
bargaining agent only for its own members.
B
Ch s
8. AGENCY SHOP AGREEMENT.
Under this scheme, there is no requirement for non-members of the bargaining agent to become its members.
l
However, it is required that such non-union members should pay to the bargaining agent an agency fee as a condition for theire
continued employment.
ob
R
9. PREFERENTIAL HIRING AGREEMENT.
an
It is the principal feature of this arrangement that the employer gives preference in hiring to the members of the
bargaining agent under equal circumstances and qualifications. Once hired or employed, they are required to maintain their
Ch
membership in good standing in the bargaining agent for the duration of the CBA as a condition for their continued employment.
10. DISMISSAL DUE TO VIOLATION OF UNION SECURITY CLAUSE.
a. Requisites for valid termination based on union security clause.
The following are the requisites that the employer should comply prior to terminating the employment of an employee
by virtue of the enforcement of the union security clause:
(1) The union security clause is applicable;
(2) The union is requesting for the enforcement of the union security provision in the CBA; and
(3) There is sufficient evidence to support the union’s decision to expel the employee from the union.
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The foregoing requisites constitute a just cause for terminating an employee based on the CBA’s union security
provision.
b. The due process afforded by the union prior to expulsion is different from the due process required prior to
termination of employment.
The distinction is not hard to comprehend. The due process afforded by the union is meant solely and exclusively to
address the issue of validity of the termination of the membership of the employee in the union; while that required of the
employer is aimed at addressing the issue of validity of the employee’s termination of employment. Hence, it is complete error on
the part of the employer to adopt as its own due process what has been earlier afforded by the union to the erring employee
without conducting its own independent and separate due process.
1
Thus, in declaring the illegality of the dismissal of petitioner in Cariño v. NLRC, the Supreme Court noted in regard to
the involvement of the company in his dismissal, that the company, upon being formally advised in writing of the expulsion of
petitioner Cariño from the union, in turn simply issued a termination letter to Cariño, the termination being made effective the very
next day. The Company should have given petitioner Cariño an opportunity to explain his side of the controversy with the union.
Notwithstanding the union security clause in the CBA, the company should have reasonably satisfied itself by its own inquiry that
a r
the union had not been merely acting arbitrarily and capriciously in impeaching and expelling petitioner Cariño. Had the company
taken the trouble to investigate the acts and proceedings of the union, it could have very easily determined that the union had
B
acted arbitrarily in impeaching and expelling from its ranks petitioner Cariño.
s
an
e
11. SOME PRINCIPLES ON TERMINATION DUE TO VIOLATION OF UNION SECURITY CLAUSE.
b l
 Employer is obligated to act upon being demanded by the union to terminate the employment of its errant members.
 Members of the minority union cannot be compelled to join the bargaining union. The union security clause
Ro h
therefore does not cover employees who are members of the union/s other than the bargaining union. Not being so
C
covered, they cannot be dismissed for violation of said clause.
an r
 The employer has the right to be reimbursed for payment of any claims arising out of dismissals demanded by the union
a
under the union security clause. Such right of reimbursement may be invoked:
Ch s
(1) By express provision in the CBA to that effect; or
e
(2) By securing it through judicial directive.
a n B
l
n
(b)
b
a
CHECK-OFF; UNION DUES, AGENCY FEES
o
R i
1. CHECK-OFF OF AGENCY FEE, DIFFERENT FROM CHECK-OFF OF UNION DUES AND ASSESSMENTS.
an u r
Check-off of agency fee does not require the execution by the non-bargaining union members of individual written
a
authorizations; while such is an indispensable requisite for check-off of union dues and special assessments from members
4.G
of the bargaining union.
h B
C s
o l
UNFAIR LABOR PRACTICE
t (a)RIN BAD b
e
i
IN COLLECTIVE BARGAINING
o FAITH
e l an
BARGAINING
r
1. BASIC PRINCIPLES.
s h B a
Jo C
It is essential that the employer and the employees should both act in good faith.
e s
.
Where an employer did not even bother to submit an answer to the bargaining proposals of the union, there is a clear
l
f
evasion of the duty to bargain collectively.
b
Ro
2. MAKING A PROMISE DURING THE CBA NEGOTIATIONS, NOT AN INDICATION OF BAD FAITH.
r o Promises made by management during the CBA negotiations may not be considered an indication of bad faith or a
an
scheme of feigning to undertake the negotiation proceedings through empty promises.
a r
P
3. ADAMANT STANCE RESULTING IN AN IMPASSE, NOT AN INDICIUM OF BAD FAITH.
h B
The adamant insistence on a bargaining position to the point where the negotiations reach an impasse does not
C s
establish bad faith. Neither can bad faith be inferred from a party’s insistence on the inclusion of a particular substantive
e
l
provision unless it concerns trivial matters or is obviously intolerable.
ob
4. PARTIES HAVE NO OBLIGATION TO PRECIPITATELY AGREE TO THE PROPOSALS OF EACH OTHER.
While the law makes it an obligation for the employer and the employees to bargain collectively with each other, such
R
compulsion does not include the commitment to precipitately accept or agree to the proposals of the other. All it contemplates is
n
that both parties should approach the negotiation with an open mind and make reasonable effort to reach a common ground of
agreement.
a
Ch
5. ALLEGATIONS OF BAD FAITH WIPED OUT WITH THE SIGNING OF THE CBA.
With the execution of the CBA, bad faith bargaining can no longer be imputed upon any of the parties thereto. All
provisions in the CBA are supposed to have been jointly and voluntarily incorporated therein by the parties. The CBA is proof
enough that the company exerted reasonable effort at good faith bargaining.
1 G.R. No. 91086, May 8, 1990, 185 SCRA 177.

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(b)
REFUSAL TO BARGAIN
1. FAILURE OR REFUSAL OF MANAGEMENT TO GIVE COUNTER-PROPOSALS TO THE UNION’S DEMANDS.
The failure of the employer to submit its counter-proposals to the demands of the bargaining union does not, by itself,
constitute refusal to bargain. However, it is different if the employer refuses to submit an answer or reply to the written
bargaining proposals of the certified bargaining union. In this case, unfair labor practice is committed.
1
In General Milling Corporation v. CA, the Supreme Court found the petitioner guilty of unfair labor practice for
refusing to send a counter-proposal to the union and to bargain anew on the economic terms of the CBA.
Similarly, in the earlier case of Colegio de San Juan de Letran v. Association of Employees and Faculty of
2
Letran, the petitioner school was declared guilty of unfair labor practice when it failed to make a timely reply to the
proposals of the certified bargaining union more than a month after the same were submitted to it. In explaining its
failure to reply, the school merely offered the feeble excuse that its Board of Trustees had not yet convened to discuss the
matter. Clearly, its actuation showed a lack of sincere desire to negotiate the CBA thereby rendering it guilty of unfair labor
r
practice.
2. REFUSAL OF A PARTY TO SIGN THE CBA.
Ba
s
A party to a fully-concluded CBA may be compelled to sign it, especially if said refusal to sign is the only remaining
an
e
hitch to its being implemented. Such refusal is considered an unfair labor practice.
b l (c)
Ro h
INDIVIDUAL BARGAINING
C
1. EMPLOYER’S ACT OF NEGOTIATING WITH UNION MEMBERS INDIVIDUALLY, A ULP.
an ar
To negotiate or attempt to negotiate with individual workers rather than with the certified bargaining agent is an unfair
B n
labor practice.
Ch s a
3
In Insular Life Assurance Co., Ltd., Employees Association-NATU v. Insular Life Assurance Co., Ltd.,
e
respondent company, through its president, sent two (2) sets of letters to the individual strikers during the strike. The first
l
n
contained promises of benefits to the employees in order to entice them to return to work; while the second contained threats to
b
ia r
obtain replacements for the striking employees in the event they did not report for work on June 2, 1958. The respondents
R o
contend that the sending of the letters constituted a legitimate exercise of their freedom of speech. The Supreme Court,
however, disagreed. The said letters were directed to the striking employees individually - by registered special delivery mail at
an u
that - without being coursed through the unions which were representing the employees in collective bargaining. Moreover, the
Ba
G
sending of these letters is not protected by the free speech provision of the Constitution. The free speech protection under the
Ch
Constitution is inapplicable where the expression of opinion by the employer or his agent contains a promise of benefit or threats
or reprisal.
s
o
2. UNION CANNOT VALIDLY BARGAIN IN BEHALF OF ITS MEMBERS ONLY.
t bl e
i
Respondent union in Philippine Diamond Hotel and Resort, Inc. [Manila Diamond Hotel] v. Manila Diamond Hotel
o
l
4
Employees Union, insists that it could validly bargain in behalf of “its members” only. The Supreme Court, however, ruled that
R
the same would only “fragment the employees” of petitioner. What respondent union will be achieving is to divide the
se an r
employees, more particularly, the rank-and-file employees of petitioner hotel. The other workers who are not members are at a
a
serious disadvantage, because if the same shall be allowed, employees who are non-union members will be economically
B
Jo Ch
impaired and will not be able to negotiate their terms and conditions of work, thus defeating the very essence and reason of
s
collective bargaining which is an effective safeguard against the evil schemes of employers in terms and conditions of
e
.
work. Petitioner’s refusal to bargain then with respondent cannot be considered an unfair labor practice to justify the
bl
staging of the strike.
o f (d)
BLUE-SKY BARGAINING
Ro
r an r
1. CONCEPT.
a
P
“Blue-sky bargaining” means making exaggerated or unreasonable proposals. This kind of unfair labor practice act
B
Ch
may only be committed by the bargaining union.
(e)
es
l
SURFACE BARGAINING
1. CONCEPT.
ob
R
“Surface bargaining” is defined as “going through the motions of negotiating” without any legal intent to reach an
agreement. This kind of unfair labor practice may only be committed by the employer.
an
Ch
1 G.R. No. 146728, Feb. 11, 2004.

2 G.R. No. 141471, Sept. 18, 2000.
3 G.R. No. L-25291, Jan. 30, 1971, 37 SCRA 244.
4 G.R. No. 158075, June 30, 2006.
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2015 BAR EXAMS

5.
UNFAIR LABOR PRACTICE
(ULP)
(a)
NATURE OF ULP
1. WHEN AN ACT CONSTITUTES ULP.
At the outset, it must be clarified that not all unfair acts constitute ULPs. While an act or decision of an employer or
a union may be unfair, certainly not every unfair act or decision thereof may constitute ULP as defined and enumerated under
the law.
The act complained of as ULP must have a proximate and causal connection with any of the following 3 rights:
1. Exercise of the right to self-organization;
2. Exercise of the right to collective bargaining; or
r
3. Compliance with CBA.
a
Sans this connection, the unfair acts do not fall within the technical signification of the term “unfair labor practice.”
B
s
2. THE ONLY ULP WHICH MAY OR MAY NOT BE RELATED TO THE EXERCISE OF THE RIGHT TO SELF-
an
e
ORGANIZATION AND COLLECTIVE BARGAINING.
b l
The only ULP which is the exception as it may or may not relate to the exercise of the right to self-organization and
collective bargaining is the act described under Article 248 [f], i.e., to dismiss, discharge or otherwise prejudice or
Ro
discriminate against an employee for having given or being about to give testimony under the Labor Code.
C h
an r
3. LABOR CODE PROVISIONS ON ULP.
a
Under the Labor Code, there are only five (5) provisions related to ULP, to wit:
Ch s
B
a n
1. Article 247 which describes the concept of ULPs and prescribes the procedure for their prosecution;
e
l
2. Article 248 which enumerates the ULPs that may be committed by employers;
b n
ia r
3. Article 249 which enumerates the ULPs that may be committed by labor organizations;
o
4. Article 261 which considers violations of the CBA as no longer ULPs unless the same are gross in character which
R
u
means flagrant and/or malicious refusal to comply with the economic provisions thereof.
an Ba
5. Article 263 [c] which refers to union-busting, a form of ULP, involving the dismissal from employment of union
Ch G
officers duly elected in accordance with the union constitution and by-laws, where the existence of the union is
s
threatened thereby.
4. PARTIES WHO/WHICH MAY COMMIT ULP.
t o bl e
i
A ULP may be committed by an employer or by a labor organization. Article 248 describes the ULPs that may be
o
l
committed by an employer; while Article 249 enumerates those which may be committed by a labor organization.
R
se
On the part of the employer, only the officers and agents of corporations, associations or partnerships who have
an r
actually participated in or authorized or ratified ULPs are criminally liable.
B a
Jo Ch
On the part of the union, only the officers, members of governing boards, representatives or agents or members of
s
labor associations or organizations who have actually participated in or authorized or ratified the ULPs are criminally liable.
e
. bl
5. ELEMENTS OF ULP.
o f Before an employer or labor organization may be said to have committed ULP, the following elements must concur:
Ro
1. There should exist an employer-employee relationship between the offended party and the offender; and
r an r
2. The act complained of must be expressly mentioned and defined in the Labor Code as an unfair labor
a
P
practice.
B
Ch
Absent one of the elements aforementioned will not make the act an unfair labor practice.
6. ASPECTS OF ULP.
es
Under Article 247, a ULP has two (2) aspects, namely:
b l
1. Civil aspect; and
2. Criminal aspect. R o
an
The civil aspect of an unfair labor practice includes claims for actual, moral and exemplary damages, attorney’s fees
Ch
and other affirmative reliefs. Generally, these civil claims should be asserted in the labor case before the Labor Arbiters who
have original and exclusive jurisdiction over unfair labor practices. The criminal aspect, on the other hand, can only be asserted
before the regular court.
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2015 BAR EXAMS

(b)
ULP OF EMPLOYERS
I.
INTERFERENCE WITH, RESTRAINT OR COERCION OF EMPLOYEES
IN THE EXERCISE OF THEIR RIGHT TO SELF-ORGANIZATION
1. TEST OF INTERFERENCE, RESTRAINT OR COERCION.
The terms “interfere,” “restrain” and “coerce” are very broad that any act of management that may reasonably tend to
have an influence or effect on the exercise by the employees of their right to self-organize may fall within their meaning and
coverage. According to the Supreme Court in Insular Life Assurance Co., Ltd., Employees Association-NATU v. Insular
1
Life Assurance Co., Ltd., the test of whether an employer has interfered with or restrained or coerced employees within the
meaning of the law is whether the employer has engaged in conduct which may reasonably tend to interfere with the free
exercise of the employees’ rights. It is not necessary that there be direct evidence that any employee was in fact intimidated
or coerced by the statements or threats of the employer if there is a reasonable inference that the anti-union conduct of the
employer does have an adverse effect on the exercise of the right to self-organization and collective bargaining.
2. TOTALITY OF CONDUCT DOCTRINE.
a r
B
In ascertaining whether the act of the employer constitutes interference with, restraint or coercion of the employees’
s
an
exercise of their right to self-organization and collective bargaining, the “totality of conduct doctrine” may be applied.
l e
The totality of conduct doctrine means that expressions of opinion by an employer, though innocent in themselves,
b
may be held to constitute an unfair labor practice because of the circumstances under which they were uttered, the history of the
Ro h
particular employer’s labor relations or anti-union bias or because of their connection with an established collateral plan of
coercion or interference. An expression which may be permissibly uttered by one employer, might, in the mouth of a more hostile
an r C
employer, be deemed improper and consequently actionable as an unfair labor practice. The past conduct of the employer and
a
like considerations, coupled with an intimate connection between the employer’s action and the union affiliation or activities of the
Ch
B n
particular employee or employees taken as a whole, may raise a suspicion as to the motivation for the employer’s conduct. The
s a
failure of the employer to ascribe a valid reason therefor may justify an inference that his unexplained conduct in respect of the
e
particular employee or employees was inspired by the latter’s union membership and activities.
l
b
3. INTERFERENCE IN THE EMPLOYEE’S RIGHT TO SELF-ORGANIZATION.
n
o
ia r
a. Interference is always ULP.
R
u
The judicial dictum is that any act of interference by the employer in the exercise by employees of their right to self-
an
organization constitutes an unfair labor practice. This is the very core of ULP.
G Ba
Ch
2
In Hacienda Fatima v. National Federation of Sugarcane Workers – Food and General Trade, the Supreme
s
Court upheld the factual findings of the NLRC and the Court of Appeals that from the employer’s refusal to bargain to its acts of
o e
economic inducements resulting in the promotion of those who withdrew from the union, the use of armed guards to prevent the
l
t
organizers to come in, and the dismissal of union officials and members, one cannot but conclude that the employer did not want
b
i
a union in its hacienda - a clear interference in the right of the workers to self-organization. Hence, the employer was held guilty
o
l
of unfair labor practice.
R
se
b. Formation of a union is never a valid ground to dismiss.
an
c. It is ULP to dismiss a union officer or an employee for his union activities.
B ar
Jo Ch s
II.
e
YELLOW DOG CONTRACT
f.
1. WHAT IS A YELLOW DOG CONTRACT?
bl
Ro
It is one which exacts from workers as a condition of employment that they shall not join or belong to a labor
o
organization, or attempt to organize one during their period of employment or that they shall withdraw therefrom in
r
case they are already members of a labor organization.
an a r
P
2. COMMON STIPULATIONS IN A YELLOW DOG CONTRACT.
B
Ch
A typical yellow dog contract embodies the following stipulations:
(1) A representation by the employee that he is not a member of a labor organization;
es
(2) A promise by the employee that he will not join a union; and
b l
(3) A promise by the employee that upon joining a labor organization, he will quit his employment.
R o
an
The act of the employer in imposing such a condition constitutes unfair labor practice under Article 248(b) of the Labor
Code. Such stipulation in the contract is null and void.
Ch
III.
CONTRACTING OUT OF SERVICES AND FUNCTIONS
1. GENERAL RULE.
As a general rule, the act of an employer in having work or certain services or functions being performed by union
members contracted out is not per se an unfair labor practice. This is so because contracting-out of a job, work or service is
clearly an exercise by the employer of its business judgment and its inherent management rights and prerogatives. Hiring of
1 G.R. No. L-25291, Jan. 30, 1971, 37 SCRA 244.

2 G.R. No. 149440, Jan. 28, 2003.
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2015 BAR EXAMS

workers is within the employer’s inherent freedom to regulate its business and is a valid exercise of its management prerogative
subject only to special laws and agreements on the matter and the fair standards of justice. The employer cannot be denied the
faculty of promoting efficiency and attaining economy by a study of what units are essential for its operation. It has the ultimate
right to determine whether services should be performed by its personnel or contracted to outside agencies.
2. WHEN CONTRACTING-OUT BECOMES ULP.
It is only when the contracting out of a job, work or service being performed by union members will interfere with,
restrain or coerce employees in the exercise of their right to self-organization that it shall constitute an unfair labor practice. Thus,
it is not unfair labor practice to contract out work for reasons of business decline, inadequacy of facilities and equipment,
reduction of cost and similar reasonable grounds.
IV.
COMPANY UNION
1. COMPANY INITIATED, DOMINATED OR ASSISTED UNION.
Paragraph [d] of Article 248 considers it an unfair labor practice to initiate, dominate, assist or otherwise interfere with
a r
the formation or administration of any labor organization, including the giving of financial or other support to it or its organizers or
supporters. Such union is called “company union” as its formation, function or administration has been assisted by any act
defined as unfair labor practice under the Labor Code.
B
es
an
V.
l
DISCRIMINATION
1. COVERAGE OF PROHIBITION.
b
Ro h
What is prohibited as unfair labor practice under the law is to discriminate in regard to wages, hours of work, and other
terms and conditions of employment in order to encourage or discourage membership in any labor organization.
C
an
4. MATERIALITY OF PURPOSE OF ALLEGED DISCRIMINATORY ACT.
ar
Ch
B n
1
In Manila Pencil Co., Inc. v. CIR, it was ruled that even assuming that business conditions justify the dismissal of
e s a
employees, it is an unfair labor practice of employer to dismiss permanently only union members and not non-unionists.
l
n
2
In Manila Railroad Co. v. Kapisanan ng mga Manggagawa sa Manila Railroad Co., the non-regularization of
b
ia r
long-time employees because of their affiliation with the union while new employees were immediately regularized was
declared an act of discrimination.
R o
u
VI.
an
FILING OF CHARGES OR GIVING OF TESTIMONY
G Ba
1. CONCEPT.
Ch
Under paragraph [f] of Article 248 of the Labor Code, it is an unfair labor practice for an employer to dismiss, discharge
s
o e
or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under the Labor
l
Code.
i t b
2. THE ONLY ULP NOT REQUIRED TO BE RELATED TO EMPLOYEE’S EXERCISE OF THE RIGHT TO SELF-
o
l
ORGANIZATION AND COLLECTIVE BARGAINING.
R
se
It must be underscored that Article 248(f) is the only unfair labor practice that need not be related to the exercise by the
an r
employees of their right to self-organization and collective bargaining.
3
a
In Itogon-Suyoc Mines, Inc. v. Baldo, it was declared that an unfair labor practice was committed by the employer
B
Jo Ch
when it dismissed the worker who had testified in the hearing of a certification election case despite its prior request for the
s
employee not to testify in the said proceeding accompanied with a promise of being reinstated if he followed said request.
e
. bl
VII.
f
CBA-RELATED ULPs
o Ro
1. THREE (3) CBA-RELATED ULPs.
Article 248 enunciates three (3) CBA-related unfair labor practices, to wit:
P r an
1. To violate the duty to bargain collectively as prescribed in the Labor Code.
2. To pay negotiation or attorney’s fees to the union or its officers or agents as part of the settlement of any
B a r
Ch
issue in collective bargaining or any other dispute.
3. To violate a collective bargaining agreement.
es
VII-A.
PAYMENT OF NEGOTIATION AND ATTORNEY’S FEES
b l
1. WHEN PAYMENT CONSIDERED ULP.
R o
an
Article 248(h) of the Labor Code considers as an unfair labor practice the act of the employer in paying negotiation fees
or attorney’s fees to the union or its officers or agents as part of the settlement of any issue in collective bargaining or any other
Ch
dispute.
1 G.R. No. L-16903, Aug. 31, 1965, 14 SCRA 955.

2 G.R. No. L-19728, July 30, 1964.
3 G.R. No. L-17739, Dec. 24, 1964.
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2015 BAR EXAMS

VII-B.
VIOLATION OF THE CBA
1. CORRELATION.
Article 248(i) of the Labor Code should be read in relation to Article 261 thereof. Under Article 261, as amended,
violations of a CBA, except those which are gross in character, shall no longer be treated as an unfair labor practice and shall be
resolved as grievances under the CBA. Gross violations of CBA shall mean flagrant and/or malicious refusal to comply with the
economic provisions of such agreement.
2. CASE LAW.
The act of the employer in refusing to implement the negotiated wage increase stipulated in the CBA, which increase is
intended to be distinct and separate from any other benefits or privileges that may be forthcoming to the employees, is an unfair
labor practice.
Refusal for a considerable number of years to give salary adjustments according to the improved salary scales in the
CBA is an unfair labor practice.
a r
B
s
le
an
ULP OF LABOR ORGANIZATIONS
b I.
Ro h
RESTRAINT AND COERCION OF EMPLOYEES
IN THE EXERCISE OF THEIR RIGHT TO SELF-ORGANIZATION
an ar
1. UNION MAY INTERFERE WITH BUT NOT RESTRAIN OR COERCE EMPLOYEES IN THE EXERCISE OF THEIR RIGHT TO
C
Ch
B n
SELF-ORGANIZE.
s a
Under Article 249(a), it is ULP for a labor organization, its officers, agents or representatives to restrain or coerce
e
employees in the exercise of their right to self-organization. Compared to similar provision of Article 248(a) of the Labor Code,
l
n
notably lacking is the use of the word “interfere” in the exercise of the employees’ right to self-organize. The significance in the
b
ia r
omission of this term lies in the grant of unrestricted license to the labor organization, its officers, agents or representatives to
R o
interfere with the exercise by the employees of their right to self-organization. Such interference is not unlawful since without it,
no labor organization can be formed as the act of recruiting and convincing the employees is definitely an act of interference.
an
II.
u Ba
G
DISCRIMINATION
Ch s
1. CONCEPT.
o l e
Under Article 249(b), it is ULP for a labor organization, its officers, agents or representatives to cause or attempt to
t b
cause an employer to discriminate against an employee, including discrimination against an employee with respect to whom
i o
membership in such organization has been denied, or to terminate an employee on any ground other than the usual terms and
l
conditions under which membership or continuation of membership is made available to other members.
R
se an r
III.
DUTY OF UNION TO BARGAIN COLLECTIVELY
B a
Jo Ch e s
.
1. CONCEPT.
f bl
Under Article 249(c), it is ULP for a duly certified sole and exclusive bargaining union, its officers, agents or
Ro
representatives to refuse or violate the duty to bargain collectively with the employer. This is the counterpart provision of Article
o
248(g) respecting the violation by the employer of its duty to bargain collectively.
r an r
2. PURPOSE.
a
P The obvious purpose of the law is to ensure that the union will negotiate with management in good faith and for the
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purpose of concluding a mutually beneficial agreement regarding the terms and conditions of their employment relationship.
s
B
IV.
l e
b
ANTI-FEATHERBEDDING DOCTRINE
1. CONCEPT.
R o
an
Under Article 249(d), it is ULP for a labor organization, its officers, agents or representatives to cause or attempt to
cause an employer to pay or deliver or agree to pay or deliver any money or other things of value, in the nature of an exaction,
Ch
for services which are not performed or not to be performed, including the demand for fee for union negotiations.
This practice of the union is commonly known as “featherbedding” as it unduly and unnecessarily maintains or
increases the number of employees used or the amount of time consumed to work on a specific job. This is done by the
employees to unduly secure their jobs in the face of technological advances or as required by minimum health and safety
standards, among other justifications. These featherbedding practices have been found to be wasteful and without legitimate
justifications.
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2015 BAR EXAMS

2. DEMAND FOR PAYMENT OF STANDBY SERVICES.

A union commits an unfair labor practice under this provision by causing or attempting to cause an employer to pay or
agree to pay for standby services. Payments for “standing-by,” or for the substantial equivalent of “standing-by,” are not
payments for “services performed” within the meaning of the law. When an employer received a bona-fide offer of competent
performance of relevant services, it remains for the employer, through free and fair negotiation, to determine whether such offer
should be accepted and what compensation should be paid for the work done.
V.
DEMAND OR ACCEPTANCE
OF NEGOTIATION FEES OR ATTORNEY’S FEES
1. CONCEPT.
Under Article 249(e), it is ULP for a labor organization, its officers, agents or representatives to ask for or accept
negotiation fees or attorney’s fees from employers as part of the settlement of any issue in collective bargaining or any other
dispute.
a r
B
VI.
s
VIOLATION OF THE CBA
an
l e
b
1. CONCEPT.
Ro h
Under Article 249(f), it is ULP for a labor organization, its officers, agents or representatives to violate a CBA.
an
2. COUNTERPART PROVISION.
ar C
This is the counterpart provision of Article 248(i) regarding the employer’s act of violating a CBA. But it must be noted
Ch s
B
a n
that under Article 261 of the Labor Code, violation of the CBA is generally considered merely a grievable issue. It becomes an
unfair labor practice only if the violation is gross in character which means that there is flagrant and/or malicious refusal to
e
l
comply with the economic (as distinguished from non-economic) stipulations in the CBA. This principle applies not only to the
b n
employer but to the labor organization as well.
o
ia r
VII.
R
CRIMINAL LIABILITY FOR ULPs OF LABOR ORGANIZATION
an u Ba
G
1. PERSONS LIABLE.
Ch
Article 249 is explicit in its provision on who should be held liable for ULPs committed by labor organizations. It states
s
o e
that only the officers, members of governing boards, representatives or agents or members of labor associations or organizations
l
who have actually participated in, authorized or ratified unfair labor practices shall be held criminally liable.
i t o b
l R
C.
se n1. r
RIGHT TO PEACEFUL CONCERTED ACTIVITIES
a B a
h
J o C
FORMS OF CONCERTED ACTIVITIES
e s
. l
1. FORMS OF CONCERTED ACTIVITIES.
f b
There are three (3) forms of concerted activities, namely:
o Ro
1. Strike;
r
2. Lockout; and
an r
3. Picketing.
a
P2. STRIKE.
C h s
B
“Strike” means any temporary stoppage of work by the concerted action of the employees as a result of an industrial
or labor dispute.
b. Forms and classification of strikes.
l e
A strike may be classified:
ob
R
1. As to nature:
n
a. Legal strike - one called for a valid purpose and conducted through means allowed by law.
a
b. Illegal strike - one staged for a purpose not recognized by law or, if for a valid purpose, it is conducted through
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means not sanctioned by law.
c. Economic strike - one declared to demand higher wages, overtime pay, holiday pay, vacation pay, etc. It is one
which is declared for the purpose of forcing wage or other concessions from the employer for which he is not
required by law to grant.
d. Unfair labor practice (ULP) or political strike - one called to protest against the employer’s unfair labor practices
enumerated in Article 248 of the Labor Code, including gross violation of the CBA under Article 261 and union-
busting under Article 263(c) of the Labor Code.
e. Slowdown strike - one staged without the workers quitting their work but by merely slackening or reducing their
normal work output. It is also called “a strike on the installment plan.”
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2015 BAR EXAMS

f. Mass leaves - One where the employees simultaneously filed leaves of absence based on various reasons such
as, inter alia, vacation and sick leaves.
g. Wildcat strike - one declared and staged without the majority approval of the recognized bargaining agent.
h. Sitdown strike - one where the workers stop working but do not leave their place of work.
i. Overtime boycott – one involving the act of the workers in refusing to render overtime work in violation of the
CBA, resorted to as a means to coerce the employer to yield to their demands.
j. Boycott of products – one which involves the concerted refusal to patronize an employer's goods or services
and to persuade others to a like refusal.
k. Attempts to damage, destroy or sabotage plant equipment and facilities and similar activities;
l. The sporting by the workers of closely cropped hair or cleanly shaven heads after their union filed a
1
notice of strike as a result of a CBA deadlock is a form of illegal strike.
2. As to coverage:
a. General strike – one which covers and extends over a whole province or country. In this kind of strike, the
a r
employees of various companies and industries cease to work in sympathy with striking workers of another
company. It is also resorted to for the purpose of putting pressure on the government to enact certain labor-
B
related measures such as mandated wage increases or to cease from implementing a law which workers
s
consider inimical to their interest. It is also mounted for purposes of paralyzing or crippling the entire economic
an
dispensation.
l e
b. Particular strike – one which covers a particular establishment or employer or one industry involving one union or
b
federation.
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3. As to purpose:
a. Economic strike.
C h
an ar
b. Unfair labor practice strike or political strike.
Ch
B n
4. As to the nature of the strikers’ action:
e s
a. Partial strike – one which consists of unannounced work stoppages such as slowdowns, walkouts or
a
l
n
unauthorized extension of rest periods.
b. Sit-down strike.
b
o
ia r
c. Slowdown strike.
R
5. As to the extent of the interest of strikers:
an u Ba
a. Primary strike – refers to a strike conducted by the workers against their employer, involving a labor dispute
G
directly affecting them.
Ch s
b. Secondary strike - refers to a strike staged by the workers of an employer involving an issue which does not
o e
directly concern or affect their relationship but rather, by some circumstances affecting the workers such as
l
t
when the employer persists to deal with a third person against whom the workers have an existing grievance.
b
i
Workers stage this kind of strike to secure the economic assistance of their employer to force the third person to
o
l
yield to the union on the issues involving it and said third person.
R
se an r
c. Sympathy strike - refers to a strike where the strikers have no demands or grievances or labor dispute of their
a
own against their employer but nonetheless stage the strike for the purpose of aiding, directly or indirectly, other
B
strikers in other establishments or companies, without necessarily having any direct relation to the advancement
Jo Ch
of the strikers’ interest. This is patently an illegal strike. An example of a sympathy strike is the “welga ng
e s
bayan” where workers refuse to render work to join a general strike which does not involve a labor or industrial
. bl
dispute between the strikers and the employer struck against but it is staged in pursuit of certain ends such as
f
reduction in the electric power rates, increase in the legislated wages, etc.
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3. LOCKOUT.
r an r
“Lockout” means the temporary refusal by an employer to furnish work as a result of an industrial or labor dispute.
a
P
It consists of the following:
B
Ch s
1. Shutdowns;
2. Mass retrenchment and dismissals initiated by the employer.
l e
b
3. The employer’s act of excluding employees who are union members.
4. PICKETING.
“Picketing” is the act of workers in peacefully marching to and fro before an establishment involved in a labor dispute
R o
an
generally accompanied by the carrying and display of signs, placards and banners intended to inform the public about the
dispute.
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2.
WHO MAY DECLARE A STRIKE OR LOCKOUT?
1. WHO MAY DECLARE A STRIKE?
a. Proper party.
Only a legitimate labor organization may declare a strike. For obvious reason, the employer cannot.
1 National Union of Workers in the Hotel, Restaurant and Allied Industries [NUWHRAIN-APL-IUF] Dusit Hotel Nikko Chapter v. The Honorable CA, G.R. Nos. 163942 and
166295, Nov. 11, 2008.
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2015 BAR EXAMS

b. Basic requirements.
As to the personality of the union, the following requirements should be shown before a strike may be validly declared
and staged:
a. The union should be legitimate. A strike conducted by a union which has not been shown to be a legitimate labor
organization is illegal.
b. In organized establishment where there is a certified bargaining agent, only the recognized or certified collective
bargaining union can validly stage a strike. A minority union cannot stage a strike. A strike conducted by a
minority union is patently illegal because no labor dispute which will justify the conduct of a strike may
exist between the employer and a minority union. To permit the union’s picketing activities would be to flaunt at
the will of the majority.
c. In unorganized establishment where there is no certified bargaining agent, any legitimate labor organization in
the establishment may declare a strike but only on the ground of unfair labor practice. The only other ground of
bargaining deadlock cannot be invoked in support of a strike in an unorganized establishment for the simple
reason that no CBA can be negotiated and concluded absent such recognized or certified collective bargaining
agent. In this situation, the existence of a bargaining deadlock is an impossibility.
2. WHO MAY DECLARE A LOCKOUT?
a r
a. Proper party.
B
s
an
e
Only the employer can declare and stage a lockout. For obvious reason, no union can.
l
b
b. Grounds.
Ro h
The employer may declare a lockout based on any of the two (2) grounds that may similarly be invoked by the union in
C
staging a strike, i.e., (1) bargaining deadlock; and/or (2) unfair labor practice.
an ar
3. WHO MAY STAGE A PICKET?
B n
Although not mentioned in the syllabus, it is important to discuss this point. Distinctively, in case of picketing, the
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absence of employment relationship between the employer and the picketers or some of them does not affect its
e s a
validity. Picketing, if peacefully carried out, cannot be prohibited even in the absence of employer-employee
l
n
relationship. Example: A picket conducted by the employees with the participation of militant groups like Bayan, Gabriela, etc.
will not make the picket illegal.
b 3.
R o
i a
REQUISITES FOR A VALID STRIKE
an
1. REQUISITES FOR A VALID STRIKE.
u ar
h G
a. Procedural but mandatory requisites.
C s
B
o e
In accordance with Article 263 and pertinent prevailing jurisprudence, a strike, in order to be valid and legal, must
conform to the following procedural requisites:
l
1st requisite -
i t Ro b
It must be based on a valid and factual ground;
l an
2nd requisite - A notice of strike must be filed with the NCMB-DOLE;
e r
3rd requisite - A notice must be served to the NCMB-DOLE at least twenty-four (24) hours prior to the taking of the
s a
strike vote by secret balloting, informing said office of the decision to conduct a strike vote, and the
B
date, place, and time thereof;
h
Jo C s
4th requisite - A strike vote must be taken where a majority of the members of the union obtained by secret ballot in
e
.
a meeting called for the purpose, must approve it;
l
f
5th requisite - A strike vote report should be submitted to the NCMB-DOLE at least seven (7) days before the
intended date of the strike;
b
o Ro
6th requisite - Except in cases of union-busting, the cooling-off period of 15 days, in case of unfair labor practices of
r
the employer, or 30 days, in case of collective bargaining deadlock, should be fully observed; and
an a r
P
7th requisite - The 7-day waiting period/strike ban reckoned after the submission of the strike vote report to the
B
NCMB-DOLE should also be fully observed in all cases.
C h s
All the foregoing requisites, although procedural in nature, are mandatory and failure of the union to comply with any
of them would render the strike illegal.
l e
b
I.
o
FIRST REQUISITE:
R
EXISTENCE OF VALID AND FACTUAL GROUND/S
1. VALID GROUNDS.
a n
The law recognizes only 2 grounds in support of a valid strike, viz.:
Ch
1. Collective bargaining deadlock (Economic Strike); and/or
2. Unfair labor practice (Political Strike).
A strike not based on any of these two grounds is illegal.
2. SOME PRINCIPLES ON THE FIRST REQUISITE.
 Violation of CBA, except when gross, is not an unfair labor practice, hence, may not be cited as ground for a
valid strike. Ordinary violation of a CBA is no longer treated as an unfair labor practice but as a mere grievance
which should be processed through the grievance machinery and voluntary arbitration.
 Inter-union or intra-union dispute is not a valid ground.
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2015 BAR EXAMS

 Violation of labor standards is not a valid ground.

 Wage distortion is not a valid ground.
II.
SECOND REQUISITE:
FILING OF A NOTICE OF STRIKE
1. NOTICE OF STRIKE.
No labor organization shall declare a strike without first having filed a notice of strike.
III.
THIRD REQUISITE:
SERVICE OF A 24-HOUR PRIOR NOTICE
In the 2005 case of Capitol Medical Center, Inc. v. NLRC, it was imposed as additional requisite that a 24-hour notice
must be served to the NCMB-DOLE prior to the taking of the strike vote by secret balloting, informing it of the union’s decision to
a r
conduct a strike vote as well as the date, place, and time thereof.
B IV.
s
an
FOURTH REQUISITE:
l e CONDUCT OF A STRIKE VOTE
b
1. MAJORITY APPROVAL OF THE STRIKE.
Ro h
No labor organization shall declare a strike without the necessary strike vote first having been obtained and reported to
C
the NCMB-DOLE.
an ar
A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit
B n
concerned, obtained by secret ballot in meetings or referenda called for that purpose. This process is called “strike vote
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balloting.”
2. PURPOSE.
e s a
l
b n
The purpose of a strike vote is to ensure that the decision to strike broadly rests with the majority of the union members
o
ia r
in general and not with a mere minority.
R
3. DURATION OF THE VALIDITY OF THE MAJORITY APPROVAL OF A STRIKE.
an u Ba
The majority decision to stage a strike is valid for the duration of the dispute based on substantially the same grounds
G
considered when the strike vote was taken.
Ch s
V.
o l e
FIFTH REQUISITE:
t b
SUBMISSION OF THE STRIKE VOTE TO NCMB-DOLE
i o
1. PURPOSE FOR REQUIRING A STRIKE VOTE REPORT.
l R
The evident intention of the law in mandatorily requiring the submission of the strike vote report is to afford the NCMB
se an r
of opportunity to verify the truth and veracity of the majority vote by the union members in support of the intended strike.
2. WHEN TO SUBMIT THE STRIKE VOTE REPORT.
B a
Jo Ch
The strike vote report should be submitted to the NCMB-DOLE at least seven (7) days before the actual staging of the
intended strike, subject to the observance of the cooling-off periods provided under the law.
e s
f. VI.
SIXTH REQUISITE:
bl
o Ro
OBSERVANCE OF THE COOLING-OFF PERIOD
r
1. GENERAL RULE.
an a r
P
The cooling-off periods provided under the law before the intended date of the actual mounting of the strike are as
B
Ch
follows:
es
1. In case of bargaining deadlock, the cooling-off period is thirty (30) days from the filing of the notice of strike; or
l
2. In case of unfair labor practice, the cooling-off period is fifteen (15) days from the filing of the notice of strike.
2. EXCEPTION: IN CASE OF UNION-BUSTING.
ob
R
In case of dismissal from employment of union officers (not ordinary members) duly elected in accordance with the
union constitution and by-laws which may constitute union-busting because the existence of the union is threatened by reason
an
of such dismissal, the 15-day cooling-off period does not apply and the union may take action immediately after the strike
vote is conducted and the results thereof duly submitted to the regional branch of the NCMB.
Ch
In cases of union-busting, only the 15-day cooling-off period need not be observed; all the other requisites must be
fully complied with.
3. RECKONING OF THE COOLING-OFF PERIODS.
The start of the cooling-off periods should be reckoned from the time the notice of strike is filed with the NCMB-DOLE,
a copy thereof having been served on the other party concerned.
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2015 BAR EXAMS

4. PURPOSE OF THE COOLING-OFF PERIODS.

The purpose of the cooling-off periods is to provide an opportunity for mediation and conciliation of the dispute by the
NCMB-DOLE with the end in view of amicably settling it.
VII.
SEVENTH REQUISITE:
7-DAY WAITING PERIOD OR STRIKE BAN
1. PURPOSE OF THE 7-DAY WAITING PERIOD OR STRIKE BAN.
The seven (7) day waiting period is intended to give the NCMB-DOLE an opportunity to verify whether the projected
strike really carries the approval of the majority of the union members.
2. WAITING PERIOD/STRIKE BAN VS. COOLING-OFF PERIOD.

The 7-day waiting period or strike ban is a distinct and separate requirement from the cooling-off period prescribed by
r
law. The latter cannot be substituted for the former and vice-versa.
a
B
The cooling-off period is counted from the time of the filing of the notice of strike. The 7-day waiting period/strike ban,
on the other hand, is reckoned from the time the strike vote report is submitted to the NCMB-DOLE.
s
an
l e
Consequently, a strike is illegal for failure to comply with the prescribed mandatory cooling-off period and the 7-day
waiting period/strike ban after the submission of the report on the strike vote.
b
Ro h
3. BOTH MUST BE COMPLIED WITH SEPARATELY AND DISTINCTLY FROM EACH OTHER.
The requirements of cooling-off period and 7-day waiting period/strike ban must both be complied with. The labor union
an r C
may take the strike vote and report the same to the NCMB-DOLE within the statutory cooling-off period. In this case, the 7-day
a
waiting period/strike ban should be counted from the day following the expiration of the cooling-off period. A contrary view would
Ch
B n
certainly defeat and render nugatory the salutary purposes behind the distinct requirements of cooling-off period and the waiting
s a
period/strike ban.
e
The NCMB Primer on Strike, Picketing and Lockout,1 issued by the NCMB, the agency of government directly tasked
l
n
with the implementation and enforcement of this particular legal provision and requirement, is very clear on this point, thus:
b
ia r
“In the event the result of the strike/lockout vote ballot is filed within the cooling-off period,
period.”2
R o
the 7-day requirement shall be counted from the day following the expiration of the cooling-off
an u
In other words, the seven (7) days should be added to the cooling-off period of fifteen (15) days, in case of unfair labor
Ba
G
practice, or thirty (30) days, in case of collective bargaining deadlock and it is only after the lapse of the total number of days
Ch
after adding the two (2) periods that the strike/lockout may be lawfully and validly staged.
s
While there was no categorical declaration on this point, the Supreme Court, in holding in the 2010 case of Phimco
o l e
Industries, Inc. v. Phimco Industries Labor Association (PILA), 3 that respondents fully satisfied the legal procedural
t b
requirements, noted that the strike notice grounded on collective bargaining deadlock was filed on March 9, 1995. Consequently,
i o
the 30-day cooling-off period would have lapsed on April 9, 1995. The strike vote was reached on March 16, 1995 and the
l
notification thereof was filed with the DOLE on March 17, 1995 or well within the cooling-off period. Based on the said rule in the
R
se
NCMB Primer, the strike could only be validly staged starting from April 17, 1995 and onwards, i.e., after the lapse of 7 days
an r
from April 9, 1995. Hence, since the actual strike was launched only on April 25, 1995, there was clearly full compliance with
the requisites.
B a
Jo Ch
Example: In a case where the notice of strike grounded on ULP is filed on October 1, 2015, and the strike vote is
e s
taken within the cooling-off period, say, on October 5, 2015 and the strike vote report showing majority support for the intended
. bl
strike is submitted to the NCMB-DOLE the following day, October 6, 2015, the question is when can the union legally stage the
f
strike?
Ro
Following the above principle, the answer obviously is on October 24, 2015 or any day thereafter. This is so because
o
the 15-day cooling-off period for ULP expires on October 16 and adding the 7-day strike ban which “should be counted from the
r an
day following the expiration of the cooling-off period,” the 7th day would be on October 23, 2015. Obviously, the strike cannot be
a r
P
conducted on the 7th day but rather after the lapse thereof; hence, it is only on October 24, 2015 and onwards that the union
B
Ch
may lawfully conduct the strike.
s
4. SOME PRINCIPLES ON COOLING-OFF PERIOD AND 7-DAY WAITING PERIOD.
 Deficiency of even one (1) day of the cooling-off period and 7-day strike ban is fatal.
l e
b
 One-day strike without complying with the 7-day strike ban is illegal.
4.
REQUISITES FOR A VALID LOCKOUT
R o
1. SUBSTANTIALLY SIMILAR REQUISITES AS IN STRIKE.
an
Ch
With a slight, insignificant variation, the procedural but mandatory requisites for a valid strike discussed above are
substantially similar to those applicable for valid lockout. For purposes of ease and clarity, the same are presented as follows:
 1st requisite - It must be based on a valid and factual ground;
 2nd requisite - A notice of lockout must be filed with the NCMB-DOLE;
1 2nd Edition, December 1995.

2 No. 6 thereof.
3 G.R. No. 170830, Aug. 11, 2010.
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2015 BAR EXAMS

 3rd requisite - A notice must be served to the NCMB-DOLE at least twenty-four (24) hours prior to the taking of the
lockout vote by secret balloting, informing said office of the decision to conduct a lockout vote, and the date, place,
and time thereof;
 4th requisite - A lockout vote must be taken where a majority of the members of the Board of Directors of the
corporation or association or of the partners in a partnership obtained by secret ballot in a meeting called for the
purpose, must approve it;
 5th requisite - A lockout vote report should be submitted to the NCMB-DOLE at least seven (7) days before the
intended date of the lockout;
 6th requisite - The cooling-off period of 15 days, in case of unfair labor practices of the labor organization, or 30
days, in case of collective bargaining deadlock, should be fully observed; and
 7th requisite - The 7-day waiting period/lockout ban reckoned after the submission of the lockout vote report to the
NCMB-DOLE should also be fully observed in all cases.
5.
r
REQUISITES FOR LAWFUL PICKETING
Ba
1. THE REQUISITES FOR A VALID STRIKE ARE NOT APPLICABLE TO PICKETING.
The seven (7) requisites for a valid strike discussed above do not apply to picketing.
s
an
e
2. REQUISITES FOR LAWFUL PICKETING.
l
The most singular requirement to make picketing valid and legal is that it should be peacefully conducted.
b
Ro h
Based on the foregoing provision, the requisites may be summed up as follows:
1. The picket should be peacefully carried out;
an r
2. There should be no act of violence, coercion or intimidation attendant thereto;
a
3. The ingress to (entrance) or egress from (exit) the company premises should not be obstructed; and
C
Ch
B n
4. Public thoroughfares should not be impeded.
3. RIGHT TO PICKET IS PROTECTED BY THE CONSTITUTION AND THE LAW.
e s a
l
Unlike a strike which is guaranteed under the Constitutional provision on the right of workers to conduct peaceful
b n
concerted activities under Section 3, Article XIII thereof, the right to picket is guaranteed under the freedom of speech and
o
ia r
of expression and to peaceably assemble to air grievances under Section 4, Article III (Bill of Rights) thereof.
R
4. EFFECT OF THE USE OF FOUL LANGUAGE DURING THE CONDUCT OF THE PICKET.
an u
In the event the picketers employ discourteous and impolite language in their picket, such may not result in, or give rise
Ba
G
to, libel or action for damages.
Ch s
5. PICKETING VS. STRIKE.
o l e
(a) To strike is to withhold or to stop work by the concerted action of employees as a result of an industrial or labor
t b
dispute. The work stoppage may be accompanied by picketing by the striking employees outside of the company compound.
l i o
(b) While a strike focuses on stoppage of work, picketing focuses on publicizing the labor dispute and its incidents to
R
se
inform the public of what is happening in the company being picketed.
an ar
(c) A picket simply means to march to and fro in front of the employer’s premises, usually accompanied by the display
B
of placards and other signs making known the facts involved in a labor dispute. It is but one strike activity separate and different
Jo Ch
from the actual stoppage of work.
e s
.
1
Phimco Industries, Inc. v. Phimco Industries Labor Association (PILA). - While the right of employees to
f bl
publicize their dispute falls within the protection of freedom of expression and the right to peaceably assemble to air grievances,
these rights are by no means absolute. Protected picketing does not extend to blocking ingress to and egress from the
o Ro
company premises. That the picket was moving, was peaceful and was not attended by actual violence may not free it
from taints of illegality if the picket effectively blocked entry to and exit from the company premises.
P r
6. WHEN PICKET CONSIDERED A STRIKE.
an B a r
Ch
In distinguishing between a picket and a strike, the totality of the circumstances obtaining in a case should be taken
into account.
es
l
2
Santa Rosa Coca-Cola Plant Employees Union v. Coca-Cola Bottlers Phils., Inc. - Petitioners contend that what
ob
they conducted was a mere picketing and not a strike. In disagreeing to this contention, the High Court emphasized that it is not
an issue in this case that there was a labor dispute between the parties as petitioners had notified the respondent of their
R
intention to stage a strike, and not merely to picket. Petitioners’ insistence to stage a strike is evident in the fact that an amended
an
notice of strike was filed even as respondent moved to dismiss the first notice. The basic elements of a strike are present in this
case: 106 members of petitioner Union, whose respective applications for leave of absence on September 21, 1999 were
disapproved, opted not to report for work on said date, and gathered in front of the company premises to hold a mass protest
Ch
action. Petitioners deliberately absented themselves and instead wore red ribbons and carried placards with slogans such as:
“YES KAMI SA STRIKE,” “PROTESTA KAMI,” “SAHOD, KARAPATAN NG MANGGAGAWA IPAGLABAN,” “CBA-’WAG
BABOYIN,” “STOP UNION BUSTING.” They marched to and fro in front of the company’s premises during working hours. Thus,
petitioners engaged in a concerted activity which already affected the company’s operations. The mass concerted activity
obviously constitutes a strike. Moreover, the bare fact that petitioners were given a Mayor’s permit is not conclusive evidence
that their action/activity did not amount to a strike. The Mayor’s description of what activities petitioners were allowed to conduct
1 G.R. No. 170830, Aug. 11, 2010.

2 G.R. Nos. 164302-03, Jan. 24, 2007.
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2015 BAR EXAMS

is inconsequential. To repeat, what is definitive of whether the action staged by petitioners is a strike and not merely a picket is
the totality of the circumstances surrounding the situation.
Petitioner union in the 2011 case of Leyte Geothermal Power Progressive Employees Union-ALU-TUCP v.
Philippine National Oil Company – Energy Development Corporation,1 contends that there was no stoppage of work; hence,
they did not strike. Euphemistically, petitioner union avers that it “only engaged in picketing,” and maintains that “without any
work stoppage, [its officers and members] only engaged in xxx protest activity.” The Supreme Court, however, ruled that it was a
strike and not picketing or protest activity that petitioner union staged. It found the following circumstances in support of such
finding:
(1) Petitioner union filed a Notice of Strike on December 28, 1998 with the DOLE grounded on respondent’s purported
unfair labor practices, i.e., “refusal to bargain collectively, union busting and mass termination.” On even date, petitioner Union
declared and staged a strike.
(2) The DOLE Secretary intervened and issued a Return-to-Work Order dated January 4, 1999, certifying the labor
dispute to the NLRC for compulsory arbitration. The Order indicated the following facts: (1) filing of the notice of strike; (2)
staging of the strike and taking control over respondent’s facilities of its Leyte Geothermal Project on the same day petitioner
r
union filed the notice of strike; (3) attempts by the NCMB to forge a mutually acceptable solution proved futile; (4) in the
Luzon and Visayas grids.

Ba
meantime, the strike continued with no settlement in sight placing in jeopardy the supply of much needed power supply in the
s
an
(3) Petitioner union itself, in its pleadings, used the word “strike.”
l e
(4) Petitioner union’s asseverations are belied by the factual findings of the NLRC, as affirmed by the CA thus: “The
b
failure to comply with the mandatory requisites for the conduct of strike is both admitted and clearly shown on record. Hence, it is
Ro h
undisputed that no strike vote was conducted; likewise, the cooling-off period was not observed and that the 7-day strike ban
after the submission of the strike vote was not complied with since there was no strike vote taken.”
an r C
In fine, petitioner union’s bare contention that it did not hold a strike cannot trump the factual findings of the NLRC that
a
n
petitioner union indeed struck against respondent. In fact, and more importantly, petitioner union failed to comply with the
h
requirements set by law prior to holding a strike.
B
C e s
ASSUMPTION OF JURISDICTION BY THE DOLE SECRETARY OR a
6.
l
b n
CERTIFICATION OF
o a
THE LABOR DISPUTE TO THE NLRC FOR COMPULSORY ARBITRATION
R i
1. WHEN DOLE SECRETARY MAY ASSUME OR CERTIFY A LABOR DISPUTE.
u
an r
Article 263(g) of the Labor Code provides that when in the opinion of the DOLE Secretary, the labor dispute
a
G
causes or will likely to cause a strike or lockout in an industry indispensable to the national interest, he is empowered to
h
do either of 2 things:
B
C s
o e
1. He may assume jurisdiction over the labor dispute and decide it himself; or
l
t Ro b
2. He may certify it to the NLRC for compulsory arbitration, in which case, it will be the NLRC which shall hear and
i
decide it.
e l an
This power may be exercised by the DOLE Secretary even before the actual staging of a strike or lockout since
r
Article 263(g) does not require the existence of a strike or lockout but only of a labor dispute involving national interest.
o C s
2. WHAT CONSTITUTES A NATIONAL INTEREST CASE?
h s
B a
J
The Labor Code vests in the DOLE Secretary the discretion to determine what industries are indispensable to the
e
.
national interest. Accordingly, upon the determination by the DOLE Secretary that such industry is indispensable to the national
l
interest, he has authority to assume jurisdiction over the labor dispute in the said industry or certify it to the NLRC for compulsory
f b
arbitration.
o
o R
Past issuances of the DOLE Secretary have not made nor attempted to mention specifically what the industries
r
indispensable to the national interest are. It was only in Department Order No. 40-H-13, Series of 2013, that certain industries
an r
were specifically named, thus:
a
P h B
“Section 16. Industries Indispensable to the National Interest. – For the guidance of the workers and
C s
employers in the filing of petition for assumption of jurisdiction, the following industries/services are hereby recognized as
e
deemed indispensable to the national interest:
l
a. Hospital sector;
b
b. Electric power industry;
o
c. Water supply services, to exclude small water supply services such as bottling and refilling
stations;
d. Air traffic control; and
R
(TIPC).”
a n
e. Such other industries as may be recommended by the National Tripartite Industrial Peace Council
Ch
Obviously, the above enumerated industries are not exclusive as other industries may be considered indispensable to
the national interest based on the appreciation and discretion of the DOLE Secretary or as may be recommended by TIPC.
3. DIFFERENT RULE ON STRIKES AND LOCKOUTS IN HOSPITALS, CLINICS AND MEDICAL INSTITUTIONS.
As a general rule, strikes and lockouts in hospitals, clinics and similar medical institutions should be avoided.
In case a strike or lockout is staged, it shall be the duty of the striking union or locking-out employer to provide and
maintain an effective skeletal workforce of medical and other health personnel whose movement and services shall be
1 G.R. No. 170351, March 30, 2011.

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2015 BAR EXAMS

unhampered and unrestricted as are necessary to insure the proper and adequate protection of the life and health of its patients,
most especially emergency cases, for the duration of the strike or lockout.
The DOLE Secretary may immediately assume, within twenty four (24) hours from knowledge of the occurrence of
such a strike or lockout, jurisdiction over the same or certify it to the NLRC for compulsory arbitration.
4. SOME PRINCIPLES ON ASSUMPTION/CERTIFICATION POWER OF THE DOLE SECRETARY.
 Prior notice and hearing are not required in the issuance of the assumption or certification order.
 The DOLE Secretary may seek the assistance of law enforcement agencies like the Philippine National Police to ensure
compliance with the provision thereof as well as with such orders as he may issue to enforce the same.
5. RETURN-TO-WORK ORDER.
a. It is always part of assumption/certification order even if not expressly stated therein.
The moment the DOLE Secretary assumes jurisdiction over a labor dispute involving national interest or certifies it to
the NLRC for compulsory arbitration, such assumption or certification has the effect of automatically enjoining the intended or
impending strike or, if one has already been commenced, of automatically prohibiting its continuation. The mere issuance of an
r
assumption or certification order automatically carries with it a return-to-work order, even if the directive to return to work is not
a
expressly stated therein. It is thus not necessary for the DOLE Secretary to issue another order directing the strikers to return to
B
work.
s
It is error therefore for striking workers to continue with their strike alleging absence of a return-to-work order since
an
l e
Article 263(g) is clear that once an assumption/certification order is issued, strikes are enjoined or, if one has already taken
place, all strikers should immediately return to work.
b
Ro h
b. Nature of return-to-work order.
C
Return-to-work order is compulsory and immediately executory in character. It should be strictly complied with by the
an r
parties even during the pendency of any petition questioning its validity in order to maintain the status quo while the
a
determination is being made. Filing of a motion for reconsideration does not affect the enforcement of a return-to-work
Ch
B n
order which is immediately executory.
c. Some principles on return-to-work order.
e s a
l
n
 The issue of legality of strike is immaterial in enforcing the return-to-work order.
b
ia r
 Upon assumption or certification, the parties should revert to the status quo ante litem which refers to the state of
R o
things as it was before the labor dispute or the state of affairs existing at the time of the filing of the case. It is the last
actual, peaceful and uncontested status that preceded the actual controversy.
an u
 To implement the return-to-work order, the norm is actual reinstatement. However, payroll reinstatement in lieu of
Ba
actual reinstatement may properly be resorted to when special circumstances exist that render actual
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reinstatement impracticable or otherwise not conducive to attaining the purposes of the law.
Example:
s
o l e
University of Sto. Tomas v. NLRC, where the teachers ordered to return to work could not be given back their
t b
academic assignments since the return-to-work order of the DOLE Secretary was issued in the middle of the first
i o
semester of the academic year. The Supreme Court affirmed the validity of the payroll reinstatement order of the
l
NLRC and ruled that the NLRC did not commit grave abuse of discretion in providing for the alternative remedy of
R
se
payroll reinstatement. It observed that the NLRC was only trying its best to work out a satisfactory ad hoc solution to
a festering and serious problem.
a n7. ar
NATUREh B
J o CCERTIFICATION ORDER
OF ASSUMPTION ORDER
e s
. bl
OR
f
1. A POLICE POWER MEASURE.
o Ro
The power to issue assumption or certification orders is an extraordinary authority granted to the President and to his
r
alter ego, the DOLE Secretary, the exercise of which should be strictly limited to national interest cases. It is in the nature of a
an r
police power measure. This is done for the promotion of the common good considering that a prolonged strike or lockout can
a
P
be inimical to the national economy.
B
Ch s
8.
EFFECT OF DEFIANCE OF
ASSUMPTION OR CERTIFICATION ORDERS
l e
1. DEFIANCE OF THE ORDER, A VALID GROUND TO DISMISS.
ob
R
The defiance by the union, its officers and members of the Labor Secretary's assumption of jurisdiction or certification
an
order constitutes a valid ground for dismissal.
The following are the justifications:
Ch
1. A strike that is undertaken after the issuance by the DOLE Secretary of an assumption or certification order
becomes a prohibited activity and thus illegal. The defiant striking union officers and members, as a result, are
deemed to have lost their employment status for having knowingly participated in an illegal strike.
2. From the moment a worker defies a return-to-work order, he is deemed to have abandoned his job.
3. By so defying, the workers have forfeited their right to be readmitted to work.
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2015 BAR EXAMS

2. ALL DEFIANT STRIKERS, REGARDLESS OF WHETHER THEY ARE OFFICERS OR ORDINARY MEMBERS, ARE
DEEMED DISMISSED.
Once the DOLE Secretary assumes jurisdiction over a labor dispute or certifies it to the NLRC for compulsory
arbitration, such jurisdiction should not be interfered with by the application of the coercive processes of a strike or lockout. Any
defiance thereof is a valid ground for the loss of employment status.
3. PERIOD OF DEFIANCE OF THE RETURN-TO-WORK ORDER, NOT MATERIAL.
The length of time within which the return-to-work order was defied by the strikers is not significant in determining their
liability for the legal consequences thereof. The following cases are illustrative of this rule:
1
a. University of San Agustin Employees’ Union-FFW v. The CA. - The period of defiance was less than nine (9)
hours from 8:45 a.m. to 5:25 p.m. on September 19, 2003.
2
b. Federation of Free Workers v. Inciong. - The period of defiance was only nine (9) days.
4. SOME PRINCIPLES ON DEFIANCE OF THE ASSUMPTION/CERTIFICATION ORDER.
r
 The assumption/certification order may be served at any time of the day or night.
this practice.
Ba
 No practice of giving 24 hours to strikers within which to return to work. There is no law or jurisprudence recognizing
s
 The defiant strikers could be validly replaced.
an
l e
 The refusal to acknowledge receipt of the assumption/certification orders and other processes is an apparent attempt
to frustrate the ends of justice, hence, invalid. The union cannot be allowed to thwart the efficacy of the said orders issued in
b
the national interest through the simple expediency of refusing to acknowledge receipt thereof.
Ro
9.
C h
an r
ILLEGAL STRIKE
1. WHEN IS A STRIKE CONSIDERED ILLEGAL?
a
Ch
A strike is illegal if it is declared and staged:
e s
B
a
1) Without complying with the procedural but mandatory requisites (See 7 requisites above).n
l
n
2) For unlawful purpose such as to compel the dismissal of an employee or to force recognition of the union or for
b
ia r
trivial and puerile purpose or to circumvent contracts and judicial orders.
o
3) Based on non-strikeable or invalid grounds such as:
R
u
a) Inter-union or intra-union disputes.
an
b) Simple violation of CBA in contrast to gross violation thereof which is deemed ULP.
G Ba
c) Violation of labor standards.
Ch
d) Legislated wage orders (wage distortion).
4) Without first having bargained collectively.
s
o e
5) In violation of the “no strike, no lockout” clause in the CBA.
l
t b
6) Without submitting the issues to the grievance machinery or voluntary arbitration or failing to exhaust the steps
i
provided therein.
o
l
7) While conciliation and mediation proceeding is on-going at the NCMB.
R
se
8) Based on issues already brought to voluntary or compulsory arbitration.
an r
9) During the pendency of a case involving the same ground/s cited in the notice of strike.
10) In defiance of an assumption or certification or return-to-work order.
B a
Jo Ch
11) In violation of a temporary restraining order or an injunction order.
12) After the conversion of the notice of strike into a preventive mediation case.
e s
.
13) Against the prohibition by law.
f bl
14) By a minority union.
15) By an illegitimate union.
o Ro
16) By dismissed employees.
17) In violation of the company code of conduct which prohibits “inciting or participating in riots, disorders, alleged
P r an
strikes or concerted actions detrimental to [Toyota’s] interest,” The penalty for which is dismissal.
18) As protest rallies in front of government offices such as in the following cases:
B a r
Ch s
3
Toyota Motor Phils. Corp. Workers Association [TMPCWA] v. NLRC, where the Supreme Court ruled that
e
the protest rallies staged by the employees from February 21 to 23, 2001 in front of the offices of the Bureau of
b
to peaceably assemble and petition the government for redress of grievances. It was illegal for having beenl
Labor Relations (BLR) and the DOLE Secretary constitute illegal strike and not legitimate exercise of their right
4
R o
undertaken without satisfying the mandatory pre-requisites for a valid strike under Article 263 of the Labor Code.
The ruling in Toyota was cited in Solidbank Corporation v. Gamier, as basis in declaring the protest action of
an
the employees of petitioner Solidbank which was staged in front of the Office of the DOLE Secretary in
Intramuros, Manila, as constitutive of illegal strike since it paralyzed the operations of the bank. The protest
Ch
action in this case was conducted because of the CBA deadlock.
19) As welga ng bayan which is in the nature of a general strike as well as an extended sympathy strike.
1 G.R. No. 169632, March 28, 2006.

2 G.R. No. L-49983, April 20, 1992.
3 G.R. Nos. 158786 &158789, Oct. 19, 2007.
4 G.R. No. 159460, Nov. 15, 2010.
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2015 BAR EXAMS

(a)
LIABILITY OF UNION OFFICERS
(b)
LIABILITY OF ORDINARY WORKERS
These two topics will be discussed jointly because of their close interrelation.
1. PARTICIPATION IN LAWFUL STRIKE.

An employee who participates in a lawful strike is not deemed to have abandoned his employment. Such participation
should not constitute sufficient ground for the termination of his employment even if a replacement has already been hired by the
employer during such lawful strike.
2. PARTICIPATION IN ILLEGAL STRIKE.
a. Distinction in the liability between union officers and ordinary union members.
1. Union officers.
a r
The mere finding or declaration of illegality of the strike will result in the termination of all union officers who
knowingly participated in the illegal strike. Unlike ordinary members, it is not required, for purposes of termination, that the
officers should commit an illegal act during the strike.
B
s
an
e
However, absent any showing that the employees are union officers, they cannot be dismissed based solely on
l
the illegality of the strike.
b
To illustrate how the “knowing participation” of union officers may be ascertained and established, the following
Ro h
1
factors were taken into account in another 2011 case, Abaria v. NLRC, which led to the declaration that they knowingly
participated in the illegal strike:
an r C
(1) Their persistence in holding picketing activities despite the declaration by the NCMB that their union was not duly
a
registered as a legitimate labor organization and notwithstanding the letter from the federation’s legal counsel informing them
Ch
B n
that their acts constituted disloyalty to the national federation; and
s a
(2) Their filing of the notice of strike and conducting a strike vote despite the fact that their union has no legal
e
l
personality to negotiate with their employer for collective bargaining purposes.
2. Ordinary union members.
b n
o
ia r
The mere finding or declaration of illegality of a strike will not result in termination of ordinary union members. For an
R
ordinary union member to suffer termination, it must be shown by clear evidence that he has committed illegal acts during the
an u
strike.
Ba
b. Reason for the distinction.
Ch G
The reason for this distinction is that the union officers have the duty to guide their members to respect the law. If
s
instead of doing so, the officers urged the members to violate the law and defy the duly constituted authorities, their dismissal
o e
from the service is a just penalty or sanction for their unlawful act. Their responsibility as main players in an illegal strike is
l
t
greater than that of the ordinary union members and, therefore, limiting the penalty of dismissal only to the former for their
b
i
participation in an illegal strike is in order.
o
l
c. Some principles on illegality of a strike.
R
se an r
 The fact that the employees are signatories to the CBA does not in itself sufficiently establish their status as union
a
officers during the illegal strike. Neither were their active roles during the bargaining negotiations be considered as
B
evidence of their being union officers.
Jo Ch
 Only the union officers during the period of illegal strike are liable. If the employees acted as union officers
e s
after the strike, they may not be held liable and, therefore, could not be terminated in their capacity as such.
. bl
 Shop stewards are union officers. Hence, they should be terminated upon the declaration of the illegality of the
f
strike.
Ro
 Union officers may be dismissed despite the fact that the illegal strike was staged only for 1 day or even
o
for less than 10 hours. This holds true in cases of defiance of the assumption/ certification order issued in
r an r
national interest cases.
a
P
 If the dispositive portion of the decision failed to mention the names of union officers, resort should be
B
made to the text of the decision.
Ch
 No wholesale dismissal of strikers allowed. The employer cannot just unceremoniously dismiss a hundred of
its employees in the absence of clear and convincing proof that these people were indeed guilty of the acts
es
charged and then, afterwards, go to court to seek validation of the dismissal it whimsically executed. That
certainly cannot be allowed.
b l
3. PARTICIPATION IN THE COMMISSION OF ILLEGAL ACTS DURING A STRIKE.
R o
an
a. Legality or illegality of strike, immaterial.
As far as liability for commission of illegal acts during the strike is concerned, the issue of legality or illegality of the
Ch
strike is irrelevant. As long as the union officer or member commits an illegal act in the course of the strike, be it legal or
illegal, his employment can be validly terminated.
b. Meaning of “illegal acts.”
The term “illegal acts” under Article 264(a) may encompass a number of acts that violate existing labor or criminal
laws, such as the following:
1 G.R. Nos. 154113, 187778, 187861 & 196156, Dec. 7, 2011, 661 SCRA 686.
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2015 BAR EXAMS

(1) Violation of Article 264(e) of the Labor Code which provides that “[n]o person engaged in picketing shall commit
any act of violence, coercion or intimidation or obstruct the free ingress to or egress from the employer’s premises
for lawful purposes, or obstruct public thoroughfares.”
(2) Commission of crimes and other unlawful acts in carrying out the strike.
(3) Violation of any order, prohibition, or injunction issued by the DOLE Secretary or NLRC in connection with the
assumption of jurisdiction or certification order under Article 263(g) of the Labor Code.
This enumeration is not exclusive as jurisprudence abounds where the term “illegal acts” has been interpreted and
construed to cover other breaches of existing laws.
Liability for illegal acts should be determined on an individual basis. For this purpose, the individual identity of
the union members who participated in the commission of illegal acts may be proved thru affidavits and photographs. Simply
referring to them as “strikers,” or “complainants in this case” is not enough to justify their dismissal.
d. Some principles on commission of illegal acts in the course of the strike.
 Only members who are identified as having participated in the commission of illegal acts are liable. Those
a r
who did not participate should not be blamed therefor.
 To effectively hold ordinary union members liable, those who participated in the commission of illegal acts must
B
not only be identified but the specific illegal acts they each committed should be described with
s
an
e
particularity.
l
 If violence was committed by both employer and employees, the same cannot be cited as a ground to declare the
b
strike illegal.
Ro h
(c)
C
LIABILITY OF EMPLOYER
an ar
n
I.
B
Ch
LIABILITY OF EMPLOYER IN CASE OF STRIKE
1. LIABILITY FOR REINSTATEMENT OF STRIKERS.
e s a
l
b n
a. Reinstatement, when proper.
o
ia r
Reinstatement (without backwages) of ordinary rank-and-file union members who did not participate in the
R
commission of illegal acts during the conduct of the illegal strike may be ordered.
an
b. No reinstatement for strikers who committed illegal acts.
u Ba
Ch G
The strikers who committed illegal acts during and in the course of a strike may be terminated. They are not entitled
s
to be reinstated. Additionally, they may be held criminally liable therefor.
o
c. Strikers who failed to return to work forfeit reinstatement.
t bl e
i
Strikers who failed to report for work without proper justification and despite the order reinstating them to their job are
o
l
deemed to have forfeited their right to reinstatement.
R
se
d. Employer who fails to reinstate strikers who were ordered reinstated by the Labor Arbiter is liable to pay
an r
them backwages reckoned from Labor Arbiter’s issuance of the reinstatement order up to its reversal by the
NLRC.
B a
Jo Ch s
2. SEPARATION PAY IN LIEU OF REINSTATEMENT IN STRIKE CASES.
e
. bl
a. Separation pay in lieu of reinstatement, when proper.
o f In strike cases, the award of separation pay in lieu of reinstatement is proper only when the strikers did not participate
in the commission of illegal acts in the course thereof.
Ro
r
3. BACKWAGES IN STRIKE CASES.
an a r
P
a. If the strike is illegal, no backwages should be paid.
B
Ch
1
Thus, in the case of Arellano University Employees and Workers Union v. CA, where the strike was declared
s
illegal, petitioner-union members who were found not to have participated in the commission of illegal acts during the strike were
ordered reinstated to their former positions but without backwages. If reinstatement is no longer possible, they should receive
l
separation pay of one (1) month for every year of service in accordance with existing jurisprudence. With respect to the union e
officers, their mere participation in the illegal strike warrants their dismissal.
(d)
ob
WAIVER OF ILLEGALITY OF STRIKE
R
an
1. VOLUNTARY REINSTATEMENT CONSTITUTES A WAIVER OF THE ILLEGALITY OF THE STRIKE.
Ch
2
In Citizens Labor Union v. Standard Vacuum Oil Co., the act of the employer in inviting the workers to return to
their posts without making any reference to the pending case involving the issue of the illegality of the strike or imposing any
condition or alteration of the terms of their employment was deemed a waiver of its right to consider the strikers as wrongdoers.
More so in this case when such invitation was accepted by the strikers. By said act, the parties may be said to have both
abandoned their original positions and come to a virtual compromise to resume unconditionally their former relations.
1 G.R. No. 139940, Sept. 19, 2006.

2 G.R. No. L-7478, May 6, 1955.
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2015 BAR EXAMS

10.
INJUNCTIONS
I.
INJUNCTION IN PICKETING, STRIKE OR LOCKOUT CASES
1. PROHIBITION ON INJUNCTION AGAINST THE CONDUCT OF STRIKES AND LOCKOUTS.
As a general rule, strikes and lockouts that are validly declared enjoy the protection of the law and cannot be enjoined
unless illegal acts are committed or threatened to be committed in the course thereof. In the case of strikes, this policy applies
even if the strike appears to be illegal in nature. The rationale for this policy is the protection extended to the right to strike under
the Constitution and the law. It is basically treated as a weapon that the law guarantees to employees for the advancement of
their interest and for their protection.
2. EXCEPTIONS WHEN THE STRIKE ITSELF MAY BE ENJOINED.
However, in some cases, injunctions issued to enjoin the conduct of the strike itself and not only the commission of
r
illegal or prohibited acts in the course thereof, were held to be valid.
a
B
1
For instance, in San Miguel Corporation v. NLRC, the Supreme Court ruled that injunction may be issued not only
s
against the commission of illegal acts in the course of the strike but against the strike itself because the notice of strike filed by
an
e
the union has been converted into a preventive mediation case. Having been so converted, a strike can no longer be staged
b l
based on said notice. Upon such conversion, the legal effect is that there is no more notice of strike to speak of.
2
In the earlier case of San Miguel Corporation v. NLRC, the Supreme Court ruled that the NLRC committed grave
Ro h
abuse of discretion when it denied the petition for injunction to restrain the union from declaring a strike based on non-strikeable
grounds.
C
an ar
3. REGULAR COURTS ARE PROHIBITED FROM ISSUING INJUNCTION AGAINST STRIKES OR LOCKOUT.
Ch s
B
a n
The cases cited above involve the issuance of restraining order or injunction by the NLRC pursuant to the exercise of
its injunctive power. In contrast, regular courts are absolutely prohibited to grant any injunctive relief in cases of strikes or
e
l
lockouts.
b n
ia r
II.
o
INJUNCTION IN PICKETING CASES
R
u
1. PROHIBITION ON INJUNCTION AGAINST PEACEFUL PICKETING.
an Ba
As a general rule, injunction cannot be issued against the conduct of picketing by the workers. Under our constitutional
Ch G
set up, picketing is considered part of the freedom of speech duly guaranteed by the Constitution. However, excepted from this
s
legal proscription are the situations mentioned below.
2. EXCEPTIONS.
t o bl e
i
Under the following circumstances, picketing may be enjoined by the NLRC:
o
l R
(1) Where picketing is carried out through the use of illegal means;
se
(2) Where picketing involves the use of violence and other illegal acts;
an(b) r
(3) Where picketing affects the rights of third parties and injunction becomes necessary to protect such rights.
B a
Jo Ch
“INNOCENT BYSTANDER RULE”
e s
.
1. WHEN INJUNCTION ON PICKETING IS ALLOWED THROUGH THE REGULAR COURTS AND NOT THROUGH THE
f
NLRC.
bl
o Ro
In situations where the picket affects not only the employer but also the business operations of other establishments
r
owned by third parties, an injunction may be secured by the latter from the regular courts to enjoin the picket under the
an a r
“Innocent Bystander Rule.” Under this rule, the third-party employers or “innocent bystanders” who have no employer-
Pemployee relationship with the picketing strikers, may apply for injunction with the regular courts (not with the NLRC) to enjoin
the conduct of the picket.
Ch s
B
Because of the absence of such employer-employee relationship, the NLRC cannot entertain such application for
injunction from “innocent bystanders.” Only the employer of the picketers can apply for injunctive relief from the NLRC.
l e
ob
------------oOo------------
R
an
Ch
1 G.R. No. 119293, June 10, 2003.

2 G.R. No. 99266, March 2, 1999, 304 SCRA 1.
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2015 BAR EXAMS

TOPIC NO. 8
PROCEDURE AND JURISDICTION
PRELIMINARY CONSIDERATIONS
ON PROCEDURE AND JURISDICTION
1. EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP.

The existence of employer-employee relationship between the parties-litigants, or a reasonable causal connection to
such relationship is a jurisdictional pre-requisite for the exercise of jurisdiction over a labor dispute by the Labor Arbiters or any
other labor tribunals.
2. THE CAUSE OF ACTION MUST ARISE FROM THE EMPLOYER-EMPLOYEE RELATIONSHIP.
Even if there is employer-employee relationship, if the cause of action did not arise out of or was not incurred in
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connection with the employer-employee relationship, Labor Arbiters and other labor tribunals have no jurisdiction thereover.
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Actions between employers and employees where the employer-employee relationship is merely incidental are within
the exclusive original jurisdiction of the regular courts.
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3. REASONABLE CAUSAL CONNECTION RULE – THE RULE IN CASE OF CONFLICT OF JURISDICTION BETWEEN
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LABOR COURT AND REGULAR COURT.
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Under this rule, if there is a reasonable causal connection between the claim asserted and the employer-employee
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relations, then the case is within the jurisdiction of labor courts.
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In the absence of such nexus, it is the regular courts that have jurisdiction.
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4. THE POWER TO DETERMINE EXISTENCE OF EMPLOYMENT RELATIONSHIP.
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B
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Under labor laws, it is not only the Labor Arbiters and the NLRC who/which are vested with the power to determine the
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existence of employer-employee relationship.
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The following have also the power to make similar determination:
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(2) The Med-Arbiter;
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(1) The DOLE Secretary and the DOLE Regional Directors, to the exclusion of the Labor Arbiter and the NLRC;
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(3) The Social Security Commission (SSC).
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5. IN CASES FILED BY OFWs, LABOR ARBITERS MAY EXERCISE JURISDICTION EVEN ABSENT THE EMPLOYMENT
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RELATIONSHIP.
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1
In Santiago v. CF Sharp Crew Management, Inc., it was held that a seafarer who has already signed a POEA-
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approved employment contract but was not deployed overseas and, therefore, there is no employer-employee relationship, may
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file his monetary claims case with the Labor Arbiter. This is because the jurisdiction of Labor Arbiters is not limited to claims
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arising from employer-employee relationships. Under Section 10 of R. A. No. 8042 (Migrant Workers and Overseas Filipinos Act
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of 1995), as amended, the Labor Arbiter may exercise jurisdiction over the claims of OFWs arising out of an employer-employee
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relationship or by virtue of any law or contract involving Filipino workers for overseas deployment, including claims for
2
actual, moral, exemplary and other forms of damage. (See also the 2012 case of Bright Maritime Corporation v. Fantonial ).
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6. LABOR ARBITERS HAVE JURISDICTION EVEN IF THE CASE IS FILED BY THE HEIRS OF THE OFW.
3
B a
This was the ruling in Medline Management, Inc. v. Roslinda. As heirs, the wife and son of Juliano Roslinda, the
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deceased OFW, have the personality to file the claim for death compensation, reimbursement of medical expenses, damages
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and attorney's fees before the Labor Arbiter of the NLRC.
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7. LABOR DISPUTES, NOT SUBJECT TO BARANGAY CONCILIATION.
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Labor cases are not subject to the conciliation proceedings prescribed under P.D. No. 1508 requiring the submission of
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disputes before the Barangay Lupong Tagapayapa prior to their filing with the court or other government offices. Instead of
simplifying labor proceedings designed at expeditious settlement or referral to the proper courts or offices to decide them finally,
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unduly delay the disposition of labor cases.
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the conciliation of the issues before the Barangay Lupong Tagapayapa would only duplicate the conciliation proceedings and
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A.
Ch e s
1. THE LABOR ARBITER.
LABOR ARBITER
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The Labor Arbiter is an official in the Arbitration Branch of the National Labor Relations Commission (NLRC) who hears
and decides cases falling under his original and exclusive jurisdiction as provided by law.
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2. LABOR ARBITERS HAVE NO INJUNCTIVE POWER; ONLY THE COMMISSION (NLRC) HAS THIS POWER.
Ch
Previously, Labor Arbiters are possessed of injunctive power. This grant of injunctive power, however, was deleted in
recent NLRC Rules. The Labor Arbiter thus has no more injunctive power. Only the Commission (NLRC) has that power.
1 G.R. No. 162419, July 10, 2007.

2 G.R. No. 165935, Feb. 8, 2012.
3 G.R. No. 168715, Sept. 15, 2010.
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1.
JURISDICTION
1. NATURE OF JURISDICTION OF LABOR ARBITERS - ORIGINAL AND EXCLUSIVE.
The jurisdiction conferred by Article 217 upon the Labor Arbiters is both original and exclusive, meaning, no other
officers or tribunals can take cognizance of, or hear and decide, any of the cases therein enumerated.
2. EXCEPTIONS TO THE ORIGINAL AND EXCLUSIVE JURISDICTION OF LABOR ARBITERS.
The following cases are the exceptions when the Labor Arbiters may not exercise their original and exclusive
jurisdiction:
1. In assumed cases. When the DOLE Secretary or the President exercises his power under Article 263(g) of the
Labor Code to assume jurisdiction over national interest cases and decide them himself.
2. In certified cases. When the NLRC exercises its power of compulsory arbitration over similar national interest
cases that are certified to it by the DOLE Secretary pursuant to the exercise by the latter of his certification power
under the same Article 263(g).
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3. In cases arising from CBA. - When cases arise from the interpretation or implementation of collective bargaining
agreements and from the interpretation or enforcement of company personnel policies which shall be disposed of
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by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration, as may be
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provided in said agreements.
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4. In cases submitted for voluntary arbitration. - When the parties agree to submit the case to voluntary arbitration
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before a Voluntary Arbitrator or panel of Voluntary Arbitrators who, under Articles 261 and 262 of the Labor Code,
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are also possessed of original and exclusive jurisdiction to hear and decide cases mutually submitted to them by
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the parties for arbitration and adjudication.
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3. RUNDOWN OF ALL CASES FALLING UNDER THE JURISDICTION OF THE LABOR ARBITERS.
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More particularly, Labor Arbiters shall have original and exclusive jurisdiction to hear and decide the following cases
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involving all workers, whether agricultural or non-agricultural:
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1. Under Article 217 of the Labor Code:
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(a) Unfair labor practice cases;
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(b) Termination disputes (Illegal dismissal cases);
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(c) Money claims exceeding P5,000.00.
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(d) Claims for actual, moral, exemplary and other forms of damages arising from employer-employee relations; and
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(e) Cases involving the legality of strikes and lockouts.
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NOTE: Claims for employees compensation, SSS, Philhealth (Medicare) and maternity benefits do not fall under the
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jurisdiction of the Labor Arbiter because these fall under the jurisdiction of other government agencies.
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2. Under Article 124 of the Labor Code, as amended by R.A. No. 6727:
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Disputes involving legislated wage increases and wage distortion in unorganized establishments not voluntarily
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settled by the parties pursuant to R.A. No. 6727.
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3. Under Article 128(b) of the Labor Code, as amended by R.A. No. 7730:
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 Contested cases under the exception clause in Article 128(b) of the Labor Code.
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4. Under Article 227 of the Labor Code:
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 Enforcement of compromise agreements when there is non-compliance by any of the parties thereto,
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pursuant to Article 227 of the Labor Code.
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5. Under Article 262-A of the Labor Code:
r o  Issuance of writ of execution to enforce decisions of Voluntary Arbitrators or panel of Voluntary Arbitrators,
in case of their absence or incapacity, for any reason.
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P 6. Under Section 10 of R.A. No. 8042, as amended by R.A. No. 10022:
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 Money claims of OFWs arising out of employer-employee relationship or by virtue of any law or contract, including B
claims death and disability benefits and for actual, moral, exemplary and other forms of damages.
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7. Other cases as may be provided by law.
I.
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JURISDICTION OVER UNFAIR LABOR PRACTICE CASES
1. SOME PRINCIPLES ON JURISDICTION OVER ULPs.
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 The Labor Arbiter has jurisdiction over all ULPs whether committed by the employers or the labor organizations.
 The Labor Arbiter has jurisdiction only over the civil aspect of ULP, the criminal aspect being lodged with the regular courts.
II.
JURISDICTION OVER ILLEGAL DISMISSAL CASES
1. SOME PRINCIPLES ON JURISDICTION OVER TERMINATION CASES.
 The validity of the exercise of jurisdiction by Labor Arbiters over illegal dismissal cases is not dependent on the
kind or nature of the ground cited in support of the dismissal; hence, whether the dismissal is for just cause
or authorized cause, it is of no consequence.
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 In case of conflict of jurisdiction between Labor Arbiter and the Voluntary Arbitrator over termination cases,
the former’s jurisdiction shall prevail for the following reasons:
(1) Termination of employment is not a grievable issue that must be submitted to the grievance machinery or
voluntary arbitration for adjudication. The jurisdiction thereover remains within the original and exclusive ambit
of the Labor Arbiter and not of the Voluntary Arbitrator.
(2) Even if the CBA provides that termination disputes are grievable, the same is merely discretionary on the part
of the parties thereto.
(3) Once there is actual termination, jurisdiction is conferred upon Labor Arbiters by operation of law.
(4) Interpretation of CBA and enforcement of company personnel policies are merely corollary to an illegal
dismissal case.
(5) Article 217 is deemed written into the CBA being an intrinsic part thereof.
 In other words, the Voluntary Arbitrator will only have jurisdiction over illegal dismissal cases when there is express
agreement of the parties to the CBA, i.e., the employer and the bargaining agent, to submit the termination
case to voluntary arbitration. Absent the mutual express agreement of the parties, Voluntary Arbitrator cannot
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acquire jurisdiction over termination cases.
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 The express agreement must be stated in the CBA or there must be enough evidence on record unmistakably
showing that the parties have agreed to resort to voluntary arbitration.
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l e III.
b JURISDICTION OVER MONEY CLAIMS CASES
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1. CLASSIFICATION OF MONEY CLAIMS.
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Money claims falling within the original and exclusive jurisdiction of the Labor Arbiters may be classified as follows:
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1. Any money claim, regardless of amount, when asserted in an illegal dismissal case (hence, accompanied
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B n
with a claim for reinstatement). Here, the money claim is but an accompanying remedy subordinated to the
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principal cause of action, i.e., illegal dismissal; or
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2. Any money claim exceeding the amount of P5,000.00 per claimant.
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If the amount does not exceed P5,000.00, it is, under Article 129, the DOLE Regional Director has jurisdiction to take
cognizance thereof.
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3. SOME PRINCIPLES ON JURISDICTION OVER MONEY CLAIMS.
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 Award of statutory benefits even if not prayed for is valid.
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 Claim for notarial fees by a lawyer employed by a company is within the jurisdiction of the Labor Arbiter.
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(a)
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VERSUS REGIONAL DIRECTOR
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1. LABOR ARBITERS HAVE NO JURISDICTION OVER SMALL MONEY CLAIMS LODGED UNDER ARTICLE 129.
R
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As earlier emphasized, under Article 129 of the Labor Code, DOLE Regional Directors have jurisdiction over claims
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amounting to P5,000 or below, provided the following requisites concur:
B
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1. The claim must arise from employer-employee relationship;
2. The claimant does not seek reinstatement; and
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.
3. The aggregate money claim of each employee does not exceed P5,000.00.
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2. IN INSPECTION OF ESTABLISHMENT CASES UNDER ARTICLE 128, DOLE REGIONAL DIRECTORS HAVE
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JURISDICTION REGARDLESS OF WHETHER OR NOT THE TOTAL AMOUNT OF CLAIMS PER EMPLOYEE EXCEEDS
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P5,000.00.
a. Requisites.
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P For the valid exercise by the DOLE Secretary or any of his duly authorized representatives (DOLE Regional Directors)
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of the visitorial and enforcement powers provided under Article 128(b), the following requisites should concur:
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B
(1) The employer-employee relationship should still exist;
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(2) The findings in question were made in the course of inspection by labor inspectors; and
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(3) The employees have not yet initiated any claim or complaint with the DOLE Regional Director under Article 129,
or the Labor Arbiter under Article 217.
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3. HOWEVER, JURISDICTION OVER CONTESTED CASES UNDER THE EXCEPTION CLAUSE IN ARTICLE 128(b) OF THE
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LABOR CODE INVOLVING INSPECTION OF ESTABLISHMENTS BELONGS TO THE LABOR ARBITERS AND NOT TO
DOLE REGIONAL DIRECTORS.
a. Relation of paragraph (b) of Article 128 to the jurisdiction of Labor Arbiters.
The Labor Arbiters have jurisdiction over contested cases under the exception clause in Article 128(b). which states:
“xxx. 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.”
In interpreting the afore-quoted provision of the exception clause, three (3) elements must concur to divest the
Regional Directors or their representatives of jurisdiction thereunder, to wit:
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2015 BAR EXAMS

(a) That the employer contests the findings of the labor regulations officer and raises issues thereon;
(b) That in order to resolve such issues, there is a need to examine evidentiary matters; and
(c) That such matters are not verifiable in the normal course of inspection.
1
The 2009 case of Meteoro v. Creative Creatures, Inc., best illustrates the application of the exception clause. Here,
it was held that the Court of Appeals aptly applied the “exception clause” because at the earliest opportunity, respondent
company registered its objection to the findings of the labor inspector on the ground that there was no employer-employee
relationship between petitioners and respondent company. The labor inspector, in fact, noted in his report that “respondent
alleged that petitioners were contractual workers and/or independent and talent workers without control or supervision and also
supplied with tools and apparatus pertaining to their job.” In its position paper, respondent again insisted that petitioners were
not its employees. It then questioned the Regional Director’s jurisdiction to entertain the matter before it, primarily because of
the absence of an employer-employee relationship. Finally, it raised the same arguments before the Secretary of Labor and the
appellate court. It is, therefore, clear that respondent contested and continues to contest the findings and conclusions of the
labor inspector. To resolve the issue raised by respondent, that is, the existence of an employer-employee relationship, there is a
need to examine evidentiary matters.
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IV.
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JURISDICTION OVER CLAIMS FOR DAMAGES
B
1. LABOR ARBITERS HAVE JURISDICTION OVER CLAIMS FOR DAMAGES.
s
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It is now a well-settled rule that claims for damages as well as attorney’s fees in labor cases are cognizable by the
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Labor Arbiters, to the exclusion of all other courts. Rulings to the contrary are deemed abandoned or modified accordingly.
b
2. CLAIMS FOR DAMAGES OF OVERSEAS FILIPINO WORKERS (OFWs).
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Claims for actual, moral, exemplary and other forms of damages that may be lodged by overseas Filipino workers are
cognizable by the Labor Arbiters.
C h
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JURISDICTION OVER LEGALITY OF STRIKES AND LOCKOUTS
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JURISDICTIONAL INTERPLAY IN STRIKE OR LOCKOUT CASES
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1. A STRIKE OR LOCKOUT IS CROSS-JURISDICTIONAL IN NATURE.
b n
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Based on the pertinent provisions of the Labor Code, below is an outline of the interplay in jurisdiction among them.
R
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1. Filing of a notice of strike or lockout with NCMB. - A union which intends to stage a strike or an employer which
Ba
desires to mount a lockout should file a notice of strike or notice of lockout, as the case may be, with the NCMB and not with any
G
2
other office. It must be noted, however, that the NCMB, per Tabigue v. International Copra Export Corporation, is not a
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quasi-judicial body; hence, the Conciliators-Mediators of the NCMB do not have any decision-making power. They
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cannot issue decisions to resolve the issues raised in the notice of strike or lockout. Their role is confined solely to the
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conciliation and mediation of the said issues, although they can suggest to the parties that they submit their dispute to voluntary
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arbitration through the Voluntary Arbitrators accredited by the NCMB.
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2. Filing of a complaint to declare the illegality of the strike or lockout with the Labor Arbiter or Voluntary
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Arbitrator or panel of Voluntary Arbitrator. - In case a party wants to have the strike or lockout declared illegal, a complaint
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should be filed either with the Labor Arbiter under Article 217(a)(5) of the Labor Code or, upon mutual agreement of the parties,
with the Voluntary Arbitrator or panel of Voluntary Arbitrators under Article 262 of the same Code. The issue of illegality of the
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strike or lockout cannot be resolved by the Conciliators-Mediators of the NCMB as earlier pointed out and discussed.
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3. Filing of an injunction petition with the Commission (NLRC). - In case illegal acts violative of Article 264 are
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committed in the course of the strike or lockout, a party may file a petition for injunction directly with the Commission (NLRC)
f
under Article 218(e) of the Labor Code for purposes of securing a temporary restraining order (TRO) and injunction. The Labor
Ro
Arbiters or Voluntary Arbitrators are not possessed of any injunctive power under the Labor Code. In other words, the aggrieved
o
party, despite the pendency of the case for the declaration of the illegality of the strike or lockout with the Labor Arbiter or
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Voluntary Arbitrator, as the case may be, may directly go to the Commission to secure the injunctive relief.
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4. Assumption of jurisdiction by the DOLE Secretary. – Under Article 263(g) of the Labor Code, the DOLE
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Secretary has the power to assume jurisdiction over labor disputes which, in his opinion, may cause or likely to cause a strike or
lockout in industries indispensable to the national interest (so-called “national interest” cases). Once he makes the assumption,
he shall decide all the issues related to the labor dispute himself, to the exclusion of all other labor authorities.
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5. Certification of the labor dispute to the NLRC. - Under the same provision of Article 263(g) of the Labor Code,
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the DOLE Secretary has the option of not assuming jurisdiction over the labor dispute in national interest cases. Instead, he may
certify it to the NLRC for compulsory arbitration, in which case, it will be the NLRC which shall hear and decide all the issues
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subject of the certification order.
In case at the time of the said assumption or certification, there is a pending case before the Labor Arbiter or Voluntary
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Arbitrator on the issue of illegality of the strike or lockout, the same shall be deemed subsumed in the assumed or certified case.
Resultantly, it is no longer the Labor Arbiter or the Voluntary Arbitrator who should decide the said case but the DOLE Secretary,
in the case of assumed cases, or the NLRC, in the case of certified cases.
6. Assumption of jurisdiction over a national interest case by the President. - The President of the Philippines is
not precluded from intervening in a national interest case by exercising himself the powers of his alter ego, the DOLE Secretary,
granted under Article 263(g) by assuming jurisdiction over the same for purposes of settling or terminating it.
1 G.R. No. 171275, July 13, 2009.

2 G.R. No. 183335, Dec. 23, 2009; See also Hotel Employees Union-NFL v. Waterfront Insular Hotel Davao, G.R. Nos. 174040-41, Sept. 22, 2010.
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7. Submission of a national interest case to voluntary arbitration. - Despite the pendency of the assumed or
certified national interest case, the parties are allowed to submit any issues raised therein to voluntary arbitration at any stage of
the proceeding, by virtue of Article 263(h) which provides that “(b)efore or at any stage of the compulsory arbitration process, the
parties may opt to submit their dispute to voluntary arbitration.”
The foregoing interplay explains why Article 263(i) makes specific reference to the President of the Philippines, the
Secretary of Labor and Employment, the Commission (NLRC) or the Voluntary Arbitrator in connection with the law on strike,
lockout and picketing embodied in Article 263. The only labor official not so mentioned therein but who has a significant role to
play in the interaction of labor officials and tribunals in strike or lockout cases, is the Labor Arbiter. This is understandable in the
light of the separate express grant of jurisdiction to the Labor Arbiters under Article 217(a)(5) as above discussed.
VI.
JURISDICTION OVER CASES INVOLVING
LEGISLATED WAGE INCREASES AND WAGE DISTORTION
1. CASES IN ORGANIZED ESTABLISHMENTS.
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Jurisdiction is with the Voluntary Arbitrator.
2. CASES IN UNORGANIZED ESTABLISHMENTS.
Jurisdiction is with Labor Arbiter.
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VII.
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JURISDICTION OVER ENFORCEMENT OR ANNULMENT
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OF COMPROMISE AGREEMENTS
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1. LEGAL BASIS.
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Article 227 clearly embodies the following provisions on compromise agreements:
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“Article 227. Compromise Agreements. - Any compromise settlement, including those involving labor
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standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the regional office of the
Department of Labor, shall be final and binding upon the parties. The National Labor Relations Commission or any
e s a
court shall not assume jurisdiction over issues involved therein except in case of non-compliance thereof or if
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there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion.”
b n
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Clear from the foregoing provision that, although the compromise agreement may have been entered into by the parties
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before the Bureau of Labor Relations (BLR) or the DOLE Regional Office, it is the Labor Arbiter who has jurisdiction to take
cognizance of the following issues related thereto, to the exclusion of the BLR and the DOLE Regional Directors:
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(1) To enforce the compromise agreement in case of non-compliance therewith by any of the parties thereto; or
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(2) To nullify it if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or
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coercion.
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VIII.
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JURISDICTION OVER EXECUTION AND ENFORCEMENT
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OF DECISIONS OF VOLUNTARY ARBITRATORS
1. DECISIONS OF VOLUNTARY ARBITRATORS.
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Article 262-A of the Labor Code prescribes the procedures that Voluntary Arbitrators or panel of Voluntary Arbitrators
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should follow in adjudicating cases filed before them. Once a decision has been rendered in a case and subsequently becomes
final and executory, it may be enforced through the writ of execution issued by the same Voluntary Arbitrator or panel of
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Voluntary Arbitrators who rendered it, addressed to and requiring certain public officers to execute the final decision, order or
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award.
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.
2. LABOR ARBITERS MAY ISSUE THE WRIT OF EXECUTION.
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In situations, however, where the Voluntary Arbitrator or the panel of Voluntary Arbitrators who rendered the decision is
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absent or incapacitated for any reason, Article 262-A grants jurisdiction to any Labor Arbiter in the region where the winning party
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resides, to take cognizance of a motion for the issuance of the writ of execution filed by such party and accordingly issue such
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writ addressed to and requiring the public officers mentioned above to execute the final decision, order or award of the Voluntary
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Arbitrator or panel of Voluntary Arbitrators.
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JURISDICTION OVER CASES OF OVERSEAS FILIPINO WORKERS (OFWs)
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1. LABOR ARBITERS HAVE JURISDICTION OVER ALL MONEY CLAIMS OF OFWs.
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benefits.
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All claims of OFWs with a sign of peso are cognizable by the Labor Arbiters, including claims for disability and death
2. EXCEPTION: VOLUNTARY ARBITRATORS HAVE JURISDICTION OVER MONEY CLAIMS IF THERE EXISTS A CBA.
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If there is a CBA between the foreign employer and the bargaining union of the OFWs, the jurisdiction over monetary
claims of OFWs belongs to the Voluntary Arbitrator and not to the Labor Arbiter.
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3. OFW-RELATED CASES OVER WHICH THE POEA, AND NOT THE LABOR ARBITERS, HAS JURISDICTION.
The Philippine Overseas Employment Administration (POEA) has original and exclusive jurisdiction to hear and
decide:
(a) All cases which are administrative in character, involving or arising out of violation of rules and regulations relating
to licensing and registration of recruitment and employment agencies or entities, including refund of fees collected
from workers and violation of the conditions for the issuance of license to recruit workers.
(b) Disciplinary action cases and other special cases which are administrative in character, involving employers,
principals, contracting partners and Filipino migrant workers.
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No. 1 above covers recruitment violations or violations of conditions of license; while No. 2 above involves (a)
disciplinary action cases against foreign principals or employers, and (a) disciplinary action cases against land-based OFWs and
seafarers.
X.
OTHER ISSUES OVER WHICH LABOR ARBITERS HAVE JURISDICTION
1. JURISDICTION OVER CERTAIN ISSUES AS PROVIDED IN JURISPRUDENCE.
In accordance with well-entrenched jurisprudence, the issues, claims or cases of the following fall under the jurisdiction
of the Labor Arbiters:
(a) Employees in government-owned and/or controlled corporations without original charters;
(b) Domestic workers or kasambahay;
(c) Employees of cooperatives;
(d) Counter-claims of employers against employees.
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JURISDICTION OVER CASES OF
a
DOMESTIC WORKERS OR KASAMBAHAY
B
1. WHEN LABOR ARBITERS HAVE JURISDICTION.
s
The Labor Arbiter has jurisdiction if the amount of the claim exceeds P5,000.00; otherwise, the jurisdiction is vested
an
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with the DOLE Regional Director under Article 129 of the Labor Code.
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b
Incidentally, it is no longer legally correct to use the term “domestic servant” or “househelper” in reference to a person
who performs domestic work. Under R.A. No. 10361, “domestic servant” or “househelper” should now be referred to as
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“domestic worker” or “kasambahay.”
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JURISDICTION OVER CASES OF
a
EMPLOYEES OF COOPERATIVES
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1. WHEN LABOR ARBITERS HAVE JURISDICTION.
Ch s a
The Labor Arbiter has jurisdiction only over monetary claims and illegal dismissal cases involving employees of
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cooperatives but not the claims or termination of membership of members thereof. Cooperatives organized under R.A. No. 6938,
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are composed of members; hence, issues on the termination of their membership with the cooperative do not fall within the
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jurisdiction of the Labor Arbiters.
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Perpetual Help Credit Cooperative, Inc. v. Faburada. - Petitioner in this case contends that the Labor Arbiter has no
jurisdiction to take cognizance of the complaint of private respondents who are not members but employees of the cooperative.
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The Supreme Court ruled that there is no evidence that private respondents are members of petitioner cooperative and even if
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they are, the dispute is about payment of wages, overtime pay, rest day and termination of employment. Under Article 217 of the
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Labor Code, these disputes are within the original and exclusive jurisdiction of the Labor Arbiters.
1
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In the 2010 case of San Miguel Corp. v. Semillano, petitioner asserts that the present case is outside the jurisdiction
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of the labor tribunals because respondent Vicente Semillano is a member of the Alilgilan Multi-Purpose Coop (AMPCO), not an
l
t b
employee of petitioner SMC. Petitioner is of the position that the instant dispute is intra-cooperative in nature falling within the
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jurisdiction of the Arbitration Committee of the Cooperative Development Authority. AMPCO was contracted by petitioner to
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supply it with workers to perform the task of segregating bottles, removing dirt therefrom, filing them in designated places,
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loading and unloading the bottles to and from the delivery trucks, and to perform other tasks as may be ordered by SMC’s
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officers. Semillano, together with the other respondents, filed the complaint for regularization with petitioner SMC, contending
a
that AMPCO was a mere labor-only contractor. The High Court declared in this case that AMPCO was a labor-only contractor
B
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and consequently pronounced that all the respondents, including Semillano, were regular employees of petitioner. On this issue
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of jurisdiction, the High Court held that the Labor Arbiter has jurisdiction because precisely, Semillano has joined the others in
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.
filing this complaint because it is his position that petitioner SMC is his true employer and liable for all his claims under the Labor
f bl
Code.
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JURISDICTION OVER COUNTER-CLAIMS OF EMPLOYERS
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1. EMPLOYERS MAY ASSERT COUNTER-CLAIMS AGAINST EMPLOYEES FILED BY THE LATTER BEFORE THE LABOR
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ARBITERS.
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Almost all labor cases decided by labor courts involve claims asserted by the workers. The question that may be
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propounded is whether the employers can assert counter-claims against their employees before the Labor Arbiters. The
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Supreme Court answered this poser in the affirmative.
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2
Bañez v. Hon. Valdevilla. - The jurisdiction of Labor Arbiters and the NLRC is comprehensive enough to include
claims for all forms of damages “arising from the employer-employee relations.” By this clause, Article 217 should apply with
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equal force to the claim of an employer for actual damages against its dismissed employee, where the basis for the claim arises
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from or is necessarily connected with the fact of termination, and should be entered as a counter-claim in the illegal dismissal
case. This is in accord with paragraph 6 of Article 217(a), which covers “all other claims, arising from employer-employee
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relations.”
But such counter-claim, being a factual issue, must be asserted before the Labor Arbiter; otherwise, it can no longer be
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passed upon by a reviewing court.
XI.
ISSUES AND CASES OVER WHICH
LABOR ARBITERS HAVE NO JURISDICTION
1. LABOR ARBITERS HAVE NO JURISDICTION OVER CERTAIN ISSUES AND CASES.
The following issues or cases do not fall under the jurisdiction of Labor Arbiters:
(a) Claims for damages arising from breach of a non-compete clause and other post-employment prohibitions;
1 G.R. No. 164257, July 5, 2010.

2 G.R. No. 128024, May 9, 2000, 331 SCRA 584.
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(b)
Claims for payment of cash advances, car, appliance and other loans of employees;
(c)
Dismissal of corporate officers and their monetary claims;
(d)
Cases involving entities immune from suit;
(e)
Cases falling under the doctrine of forum non conveniens;
(f)
Constitutionality of CBA provisions.
XI-A.
CLAIMS FOR DAMAGES ARISING FROM BREACH OF NON-COMPETE CLAUSE AND OTHER
POST-EMPLOYMENT PROHIBITIONS
1. JURISDICTION IS LODGED WITH THE REGULAR COURTS.
In case of violation of the non-compete clause and similar post-employment bans or prohibitions, the employer can
assert his claim for damages against the erring employee with the regular courts and not with the labor courts.
XI-B.
EMPLOYER’S CLAIMS FOR CASH ADVANCES, CAR, APPLIANCE
AND OTHER PERSONAL LOANS OF EMPLOYEES
r
1. LABOR ARBITERS HAVE NO JURISDICTION.
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With respect to resolving issues involving loans availed of by employees from their employers, it has been the
consistent ruling of the Supreme Court that the Labor Arbiters have no jurisdiction thereover but the regular courts.
s
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Where the claim to the principal relief sought is to be resolved not by reference to the Labor Code or other labor
l e
relations statute or a collective bargaining agreement but by the general civil law, the jurisdiction over the dispute belongs to the
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regular courts of justice and not to the Labor Arbiter and the NLRC. In such situations, resolutions of the dispute requires
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expertise, not in labor management relations nor in wage structures and other terms and conditions of employment, but rather in
the application of the general civil law. Clearly, such claims fall outside the area of competence or expertise ordinarily ascribed to
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Labor Arbiters and the NLRC and the rationale for granting jurisdiction over such claims to these agencies disappears.”
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The following loans may be cited:
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a. Cash loans/advances are in the nature of simple collection of a sum of money brought by the employer, as
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creditor, against the employee, as debtor. The fact that they were employer and employee at the time of the
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transaction does not negate the civil jurisdiction of the trial court. The case does not involve adjudication of a labor
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dispute but recovery of a sum of money based on our civil laws on obligation and contract.
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b. Car loans such as those granted to sales or medical representatives by reason of the nature of their work. The
employer’s demand for payment of the employees’ amortizations on their car loans, or, in the alternative, the return
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of the cars to the company, is not a labor, but a civil, dispute. It involves debtor-creditor relations, rather than
an
employee-employer relations.
G Ba
c. Appliance loans concern the enforcement of a loan agreement involving debtor-creditor relations founded on
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contract and do not in any way concern employee relations. As such it should be enforced through a separate civil
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action in the regular courts and not before the Labor Arbiter.
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d. Loans from retirement fund also involve the same principle as above; hence, collection therefor may only be
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made through the regular courts and not through the Labor Arbiter or any labor tribunal.
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XI-C.
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DISMISSAL OF DIRECTORS AND CORPORATE OFFICERS
1. LABOR ARBITERS HAVE NO JURISDICTION.
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The dismissal of a director or corporate officer is an intra-corporate dispute cognizable by the Regional Trial Court and
not by the Labor Arbiter.
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.
2. MATLING DOCTRINE.
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1
Under this doctrine, the following rules should be observed:
r o (1) The dismissal of regular employees falls under the jurisdiction of Labor Arbiters; while that of corporate officers
falls within the jurisdiction of the regular courts.
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(2) The term “corporate officers” refers only to those expressly mentioned in the Corporation Code and By-Laws;
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all other officers not so mentioned therein are deemed employees.
(3) Corporate officers are elected or appointed by the directors or stockholders, and those who are given that
character either by the Corporation Code or by the corporation’s by-laws.
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(4) The Corporation Code specifically mentions only the following corporate officers, to wit: president, secretary
and treasurer and such other officers as may be provided for in the by-laws.
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(5) The Board of Directors can no longer create corporate offices because the power of the Board of
Directors to create a corporate office cannot be delegated. Therefore, the term “corporate officers” should
R o
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only refer to the above and to no other. A different interpretation can easily leave the way open for the Board of
Directors to circumvent the constitutionally guaranteed security of tenure of the employee by the expedient
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inclusion in the By-Laws of an enabling clause on the creation of just any corporate officer position.
(6) Distinction between a corporate officer and an employee. - An “office” is created by the charter of the
corporation and the “corporate officer” is elected by the directors or stockholders. On the other hand, an
“employee” occupies no office and generally is employed not by the action of the directors or stockholders but by
the managing officer of the corporation who also determines the compensation to be paid to such employee.
(7) Because of the Matling doctrine, the rulings in Tabang and Nacpil, are no longer controlling because they are
“too sweeping and do not accord with reason, justice, and fair play.”
1 Enunciated in the 2010 case of Matling Industrial and Commercial Corp. v. Ricardo R. Coros, G.R. No. 157802, Oct. 13, 2010. This case is an appeal via petition for
review on certiorari. The petitioners challenge the decision of the CA which sustained the ruling of the NLRC to the effect that the Labor Arbiter had jurisdiction because
the respondent, its Vice President for Finance and Administration, was not a corporate officer of petitioner Matling.
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(8) The status of an employee as director and stockholder does not automatically convert his dismissal into
an intra-corporate dispute.
(9) Two (2) elements to determine whether a dispute is intra-corporate or not.
(a) The status or relationship of the parties (Relationship test); and
(b) The nature of the question that is the subject of their controversy. (Nature of controversy test).
In the absence of any one of these factors, the RTC will not have jurisdiction.
(10) The criteria do not depend on the services performed but on the manner of creation of the office.
In Matling, respondent Corros was supposedly at once an employee, a stockholder, and a Director of Matling. The
circumstances surrounding his appointment to office must be fully considered to determine whether the dismissal
constituted an intra-corporate controversy or a labor termination dispute. It must also be considered whether his
status as Director and stockholder had any relation at all to his appointment and subsequent dismissal as Vice
President for Finance and Administration.
Obviously enough, the respondent was not appointed as Vice President for Finance and Administration because
of his being a stockholder or Director of Matling. He had started working for Matling on September 8, 1966, and
had been employed continuously for 33 years until his termination on April 17, 2000. His first work as a
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bookkeeper and his climb in 1987 to his last position as Vice President for Finance and Administration had been
gradual but steady. Even though he might have become a stockholder of Matling in 1992, his promotion to the
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position of Vice President for Finance and Administration in 1987 was by virtue of the length of quality service he
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had rendered as an employee of Matling. His subsequent acquisition of the status of Director/stockholder had no
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relation to his promotion. Besides, his status of Director/stockholder was unaffected by his dismissal from
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employment as Vice President for Finance and Administration.
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3. SIGNIFICANT CASES DECIDED BASED ON THE MATLING DOCTRINE.
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a. Cosare v. Broadcom Asia, Inc., (2014)
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In this 2014 case, the Supreme Court ruled that the Labor Arbiter, not the regular courts, has original jurisdiction over
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the illegal dismissal case filed by petitioner Cosare who was an incorporator of respondent Broadcom and was holding the
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position of Assistant Vice President for Sales (AVP for Sales) and Head of the Technical Coordination at the time of his
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termination. The following justifications were cited in support of this ruling:
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(1) The mere fact that a person was a stockholder and an officer of the company at the time the subject controversy
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developed does not necessarily make the case an intra-corporate dispute.
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(2) A person, although an officer of the company, is not necessarily a corporate officer thereof.
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(3) General Information Sheet (GIS) submitted to SEC neither governs nor establishes the nature of office.
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(4) The Nature of the Controversy Test: The mere fact that a person was a stockholder at the time of the filing of the
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illegal dismissal case does not make the action an intra-corporate dispute.
b. Other cases:
t o bl e
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(1) Barba v. Liceo de Cagayan University (2012);
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(2) Marc II Marketing, Inc. and Lucila V. Joson v. Alfredo M. Joson (2011);
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(3) Real v. Sangu Philippines, Inc. (2011).
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XI-D.
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.
LABOR CASES INVOLVING ENTITIES IMMUNE FROM SUIT
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1. IMMUNE ENTITIES CANNOT BE SUED FOR LABOR LAW VIOLATIONS.
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In this jurisdiction, the generally accepted principles of international law are recognized and adopted as part of the law
o
of the land. Immunity of a State and international organizations from suit is one of these universally recognized principles. It is on
r an
this basis that Labor Arbiters or other labor tribunals have no jurisdiction over immune entities.
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2. ILLUSTRATIVE CASE.
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1
In Department of Foreign Affairs v. NLRC, involving an illegal dismissal case filed against the Asian Development
prosper. And this immunity extends to its officers who also enjoy immunity in respect of all acts performed by them in their
l e
Bank (ADB), it was ruled that said entity enjoys immunity from legal process of every form and therefore the suit against it cannot
covenants and commitments voluntarily assumed by the Philippine government which must be respected.
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official capacity. The Charter and the Headquarters Agreement granting these immunities and privileges to the ADB are treaty
3. EXCEPTION TO THE RULE.

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2
There is an exception to the immunity rule as exemplified by the case of United States v. Hon. Rodrigo, where it was
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held that when the function of the foreign entity otherwise immune from suit partakes of the nature of a proprietary activity, such
as the restaurant services offered at John Hay Air Station undertaken by the United States Government as a commercial activity
for profit and not in its governmental capacity, the case for illegal dismissal filed by a Filipino cook working therein is well within
the jurisdiction of Philippine courts. The reason is that by entering into the employment contract with the cook in the discharge of
its proprietary functions, it impliedly divested itself of its sovereign immunity from suit.
1 G.R. No. 113191, Sept. 18, 1996, 262 SCRA 39, 43-44.
2 G.R. No. 79470, Feb. 26, 1990, 182 SCRA 644, 660.
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4. ESTOPPEL DOES NOT CONFER JURISDICTION OVER AN IMMUNE ENTITY.

An entity immune from suit cannot be estopped from claiming such diplomatic immunity since estoppel does not
operate to confer jurisdiction to a tribunal that has none over a cause of action.
XI-E.
DOCTRINE OF FORUM NON CONVENIENS
1. REQUISITES.
This doctrine is an international law principle which has been applied to labor cases. The following are the requisites
for its applicability:
(1) That the Philippine court is one to which the parties may conveniently resort;
(2) That the Philippine court is in a position to make an intelligent decision as to the law and the facts; and
(3) That the Philippine court has or is likely to have power to enforce its decision.
2. APPLICATION TO LABOR CASES.
a. Case where doctrine was rejected.
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1
Petitioners’ invocation of this principle was rejected in Pacific Consultants International Asia, Inc. v. Schonfeld.
Petitioners’ insistence was based on the fact that respondent is a Canadian citizen and was a repatriate. In so rejecting
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petitioners’ contention, the Supreme Court cited the following reasons that do not warrant the application of the said principle: (1)
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the Labor Code does not include forum non conveniens as a ground for the dismissal of the complaint; and (2) the
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propriety of dismissing a case based on this principle requires a factual determination; hence, it is properly considered
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as a defense.
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b. Case where doctrine was applied.
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This doctrine was applied in the case of The Manila Hotel Corp. and Manila Hotel International Limited v. NLRC,
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where private respondent Marcelo Santos was an overseas worker employed as a printer in a printing press in the Sultanate of
Ch s
Oman when he was directly hired by the Palace Hotel, Beijing, People’s Republic of China to work in its print shop. This hotel
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was being managed by the Manila Hotel International Ltd., a foreign entity registered under the laws of Hong Kong. Later, he
l
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was terminated due to retrenchment occasioned by business reverses brought about by the political upheaval in China (referring
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to the Tiananmen Square incident) which severely affected the hotel’s operations.
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In holding that the NLRC was a seriously inconvenient forum, the Supreme Court noted that the main aspects of the
R
case transpired in two foreign jurisdictions and the case involves purely foreign elements. The only link that the Philippines has
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with the case is that the private respondent employee (Marcelo Santos) is a Filipino citizen. The Palace Hotel and MHICL are
Ba
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foreign corporations. Consequently, not all cases involving Filipino citizens can be tried here. Respondent employee was hired
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directly by the Beijing Palace Hotel, a foreign employer, through correspondence sent to him while he was working at the
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Sultanate of Oman. He was hired without the intervention of the POEA or any authorized recruitment agency of the government.
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Hence, the NLRC is an inconvenient forum given that all the incidents of the case - from the time of recruitment, to employment
l
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to dismissal - occurred outside the Philippines. The inconvenience is compounded by the fact that the proper defendants, the
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Palace Hotel and MHICL, are not nationals of the Philippines. Neither are they “doing business in the Philippines.” Likewise, the
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main witnesses, Mr. Shmidt (General Manager of the Palace Hotel) and Mr. Henk (Palace Hotel’s Manager) are non-residents of
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the Philippines.
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Neither can an intelligent decision be made as to the law governing the employment contract as such was perfected in
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foreign soil. This calls to fore the application of the principle of lex loci contractus (the law of the place where the contract was
Jo Ch s
made). It must be noted that the employment contract was not perfected in the Philippines. Private respondent employee
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signified his acceptance thereof by writing a letter while he was in the Sultanate of Oman. This letter was sent to the Palace
. bl
Hotel in the People’s Republic of China. Neither can the NLRC determine the facts surrounding the alleged illegal dismissal as all
f
acts complained of took place in Beijing, People’s Republic of China. The NLRC was not in a position to determine whether the
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Tiananmen Square incident truly adversely affected the operations of the Palace Hotel as to justify respondent employee’s
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retrenchment.
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Even assuming that a proper decision could be reached by the NLRC, such would not have any binding effect against
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the employer, the Palace Hotel, which is a corporation incorporated under the laws of China and was not even served with
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summons. Jurisdiction over its person was not acquired. This is not to say that Philippine courts and agencies have no power to
solve controversies involving foreign employers. Neither could it be said that the Supreme Court does not have power over an
employment contract executed in a foreign country. If the respondent employee were an “overseas contract worker”, a Philippine
es
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forum, specifically the POEA, not the NLRC, would protect him. He is not an “overseas contract worker”, a fact which he admits
with conviction. l
XI-F.
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CONSTITUTIONALITY OF LABOR CONTRACT STIPULATIONS
1. THE HALAGUEÑA DOCTRINE.
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3
In Halagueńa v. Philippine Airlines, Inc., it was pronounced that it is not the Labor Arbiter but the regular court which
has jurisdiction to rule on the constitutionality of labor contracts such as a CBA. Petitioners were female flight attendants of
respondent Philippine Airlines (PAL) and are members of the Flight Attendants and Stewards Association of the Philippines
(FASAP), the sole and exclusive bargaining representative of the flight attendants, flight stewards and pursers of respondent.
The July 11, 2001 CBA between PAL and FASAP provides that the compulsory retirement for female flight attendants is fifty-five
(55) and sixty (60) for their male counterpart.
1 G.R. No. 166920, Feb. 19, 2007.

2 G.R. No. 120077, Oct. 13, 2000.
3 G.R. No. 172013, Oct. 2, 2009.
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Claiming that said CBA provision is discriminatory against them, petitioners filed against respondent a Special Civil
Action for Declaratory Relief with Prayer for the Issuance of Temporary Restraining Order and Writ of Preliminary Injunction with
the Regional Trial Court (RTC) of Makati City.
In ruling that the RTC has jurisdiction, the Supreme Court cited the following reasons:
(1) The case is an ordinary civil action, hence, beyond the jurisdiction of labor tribunals.
(2) The said issue cannot be resolved solely by applying the Labor Code. Rather, it requires the application of the
Constitution, labor statutes, law on contracts and the Convention on the Elimination of All Forms of Discrimination
Against Women (CEDAW). The power to apply and interpret the constitution and CEDAW is within the jurisdiction
of trial courts, a court of general jurisdiction.
(3) Not every controversy or money claim by an employee against the employer or vice-versa is within the exclusive
jurisdiction of the Labor Arbiter. Actions between employees and employer where the employer-employee
relationship is merely incidental and the cause of action proceeds from a different source of obligation are within
the exclusive jurisdiction of the regular courts. Here, the employer-employee relationship between the parties is
merely incidental and the cause of action ultimately arose from different sources of obligation, i.e., the
Constitution and CEDAW.
a r2.
B
REINSTATEMENT PENDING APPEAL
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1. PIONEER TEXTURIZING DOCTRINE: REINSTATEMENT ASPECT OF LABOR ARBITER’S DECISION, IMMEDIATELY
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EXECUTORY EVEN PENDING APPEAL; NO WRIT OF EXECUTION REQUIRED.
According to the Pioneer Texturizing doctrine, an order of reinstatement issued by the Labor Arbiter under Article 223
Ro h
of the Labor Code is self-executory or immediately executory even pending appeal. This means that the perfection of an appeal
shall stay the execution of the decision of the Labor Arbiter except execution of the reinstatement pending appeal.
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2. REINSTATEMENT PENDING APPEAL, APPLICABLE ONLY TO THE REINSTATEMENT ORDER ISSUED BY THE
a
LABOR ARBITER; WRIT OF EXECUTION REQUIRED WHEN REINSTATEMENT IS ORDERED BY NLRC ON APPEAL,
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OR SUBSEQUENTLY BY THE COURT OF APPEALS OR SUPREME COURT, AS THE CASE MAY BE.
s a
By way of distinction, the rule on reinstatement pending appeal applies only to the order of reinstatement issued by the
e
Labor Arbiter and to no other. This means that if the reinstatement order is issued by the NLRC on appeal, or by the Court of
l
n
Appeals or by the Supreme Court, there is a need to secure a writ of execution from the Labor Arbiter of origin to enforce the
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reinstatement of the employee whose dismissal is declared illegal.
3. TWO (2) OPTIONS OF EMPLOYER.
R o
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To implement the reinstatement aspect of a Labor Arbiter’s decision, there are only two (2) options available to the
an
employer, to wit:
G Ba
1. Actual reinstatement. - The employee should be reinstated to his position which he occupies prior to his illegal
Ch
dismissal under the same terms and conditions prevailing prior to his dismissal or separation or, if no longer
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available, to a substantially-equivalent position; or
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2. Payroll reinstatement. – The employee should be reinstated in the payroll of the company without requiring him to
report back to his work.
i t o b
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4. DUTY OF EMPLOYER TO NOTIFY EMPLOYEE ORDERED REINSTATED.
R
se
It is required that in case the decision of the Labor Arbiter includes an order of reinstatement, it should contain:
an r
(a) A statement that the reinstatement aspect is immediately executory; and
a
(b) A directive for the employer to submit a report of compliance within ten (10) calendar days from receipt of the said
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Jo Ch
decision.
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Disobedience of this directive clearly denotes a refusal to reinstate. The employee need not file a motion for the
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issuance of the writ of execution since the Labor Arbiter is mandated thereafter to motu proprio issue the writ. With the new rules
f
in place, there is hardly any difficulty in determining the employer’s intransigence in immediately complying with the order.
Ro
5. INSTANCES WHEN WRIT OF EXECUTION OF LABOR ARBITER’S REINSTATEMENT ORDER STILL REQUIRED.
r o Under the 2011 NLRC Rules of Procedure, there are two (2) instances when a writ of execution should still be issued
an
immediately by the Labor Arbiter to implement his order of reinstatement, even pending appeal, viz.:
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(1) When the employer disobeys the prescribed directive to submit a report of compliance within ten (10) calendar
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days from receipt of the decision; or
(2) When the employer refuses to reinstate the dismissed employee.
The Labor Arbiter shall motu proprio issue a corresponding writ to satisfy the reinstatement wages as they accrue
es
until actual reinstatement or reversal of the order of reinstatement.
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6. SOME PRINCIPLES ON REINSTATEMENT PENDING APPEAL.
R o
 Employer has no way of staying execution of immediate reinstatement. He cannot post bond to prevent its execution.
an
 Reinstatement pending appeal applies to all kinds of illegal dismissal cases, regardless of the grounds thereof.
 Reinstatement pending appeal does not apply when the dismissal is legal but reinstatement is ordered for some
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reasons like equity and compassionate justice.
 The failure of employee ordered reinstated pending appeal to report back to work as directed by the employer does not
give the employer the right to remove him, especially when there is a reasonable explanation for his failure.
 When former position is already filled up, the employee ordered reinstated pending appeal should be reinstated to a
substantially equivalent position.
 Reinstatement to a position lower in rank is not proper.
 In case of two successive dismissals, the order of reinstatement pending appeal under Article 223 issued in the first
case shall apply only to the first case and should not affect the second dismissal. According to Sevilla v. NLRC, the
Labor Arbiter was correct in denying the third motion for reinstatement filed by the petitioner because what she
should have filed was a new complaint based on the second dismissal. The second dismissal gave rise to a new
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cause of action. Inasmuch as no new complaint was filed, the Labor Arbiter could not have ruled on the legality of
the second dismissal.
 Reinstatement pending appeal is not affected by the reinstated employee’s employment elsewhere.
 Effect of grant of achievement award during reinstatement pending appeal.
1
In the 2014 case of Garza v. Coca-Cola Bottlers Philippines, Inc., it was pronounced that the act of respondent CCBPI
in giving an award of a Certificate of Achievement to petitioner for his exemplary sales performance during his
reinstatement ordered by the Labor Arbiter, while respondent’s appeal with the NLRC was still pending, constitutes
recognition of petitioner’s abilities and accomplishments. It indicates that he is a responsible, trustworthy and hardworking
employee of CCBPI. It constitutes adequate proof weighing in his favor.
3.
REQUIREMENTS TO PERFECT APPEAL TO NLRC
I.
APPEAL IN GENERAL
1. APPEAL, MEANING AND NATURE.
a r
The term “appeal” refers to the elevation by an aggrieved party to an agency vested with appellate authority of any
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decision, resolution or order disposing the principal issues of a case rendered by an agency vested with original jurisdiction,
s
undertaken by filing a memorandum of appeal.
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2. SOME PRINCIPLES ON APPEAL.
l e
b
 Appeals under Article 223 apply only to appeals from the Labor Arbiter’s decisions, awards or orders to the Commission
Ro h
(NLRC).
 There is no appeal from the decisions, orders or awards of the NLRC. Clearly, therefore, Article 223 of the Labor Code is
an r C
not the proper basis for elevating the case to the Court of Appeals or to the Supreme Court. The proper remedy from the
a
decisions, awards or orders of the NLRC to the Court of Appeals is a Rule 65 petition for certiorari and from the Court of
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Appeals to the Supreme Court, a Rule 45 petition for review on certiorari.
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 Appeal from the NLRC to the DOLE Secretary and to the President had long been abolished.
e s a
 Appeal is not a constitutional right but a mere statutory privilege. Hence, parties who seek to avail of it must comply with the
l
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statutes or rules allowing it.
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 A motion for reconsideration is unavailing as a remedy against a decision of the Labor Arbiter. The Labor Arbiter should
o
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treat the said motion as an appeal to the NLRC.
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 A “Petition for Relief” should be treated as appeal.
an u
 Affirmative relief is not available to a party who failed to appeal. A party who does not appeal from a decision of a court
Ba
cannot obtain affirmative relief other than the ones granted in the appealed decision.
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3. GROUNDS FOR APPEAL TO THE COMMISSION (NLRC).
G s
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The appeal to the NLRC may be entertained only on any of the following grounds:
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a. If there is a prima facie evidence of abuse of discretion on the part of the Labor Arbiter;
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b. If the decision, order or award was secured through fraud or coercion, including graft and corruption;
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c. If made purely on questions of law; and/or
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d. If serious errors in the findings of fact are raised which, if not corrected, would cause grave or irreparable damage or
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injury to the appellant.
 NLRC has certiorari power.
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Jo Ch s
The first ground above regarding prima facie evidence of abuse of discretion on the part of the Labor Arbiter is
e
.
2
actually an exercise of certiorari power by the NLRC. The case of Triad Security & Allied Services, Inc. v. Ortega, expressly
bl
3
recognized this certiorari power of the NLRC. Clearly, according to the 2012 case of Auza, Jr. v. MOL Philippines, Inc., the
o f
NLRC is possessed of the power to rectify any abuse of discretion committed by the Labor Arbiter.
II.
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PERFECTION OF APPEAL
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1. EFFECT OF PERFECTION OF APPEAL ON EXECUTION.
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To reiterate, the perfection of an appeal shall stay the execution of the decision of the Labor Arbiter except execution
for reinstatement pending appeal.
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2. PERFECTION OF APPEAL, MANDATORY AND JURISDICTIONAL.
b l
The perfection of appeal within the period and in the manner prescribed by law is jurisdictional and non-compliance
o
with the legal requirements is fatal and has the effect of rendering the judgment final and executory, hence, unappealable.
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3. REQUISITES.
The requisites for perfection of appeal to the NLRC are as follows:
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(1) Observance of the reglementary period;
(2) Payment of appeal and legal research fee;
(3) Filing of a Memorandum of Appeal;
(4) Proof of service to the other party; and
(5) Posting of cash, property or surety bond, in case of monetary awards.
The foregoing are discussed below.
1 G.R. No. 180972, Jan. 20, 2014.

2 G.R. No. 160871, Feb. 6, 2006.
3 G.R. No. 175481, Nov. 21, 2012.
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III.
REGLEMENTARY PERIOD
1. TWO (2) KINDS OF REGLEMENTARY PERIOD.
The reglementary period depends on where the appeal comes from, viz.:
1. Ten (10) calendar days – in the case of appeals from decisions of the Labor Arbiters under Article 223 of the Labor
Code; and
2. Five (5) calendar days – in the case of appeals from decisions of the DOLE Regional Director under Article 129
of the Labor Code.
Calendar days and not working days.
The shortened period of ten (10) days fixed by Article 223 contemplates calendar days and not working days. The
same holds true in the case of the 5-day reglementary period under Article 129 of the Labor Code. Consequently, Saturdays,
Sundays and legal holidays are included in reckoning and computing the reglementary period.
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2. EXCEPTIONS TO THE 10-CALENDAR DAY OR 5-CALENDAR DAY REGLEMENTARY PERIOD RULE.
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The following are the specific instances where the rules on the reckoning of the reglementary period have not been
strictly observed:
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working day.
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1) 10th day (or 5th day) falling on a Saturday, Sunday or holiday, in which case, the appeal may be filed in the next
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2) Reliance on erroneous notice of decision as when the notice expressly states “working days” and not “calendar
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days.”
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3) Appeal from decisions of Labor Arbiters in direct contempt cases – five (5) calendar days.
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4) Filing of petition for extraordinary remedies from orders or resolutions of Labor Arbiters or on third party claims
– ten (10) calendar days.
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5) When NLRC exercises its power to “correct, amend, or waive any error, defect or irregularity whether in substance
s a
or form” in the exercise of its appellate jurisdiction, as provided under Article 218(c) of the Labor Code, in which
case, the late filing of the appeal is excused.
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6) When technical rules are disregarded under Article 221.
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7) When there are some compelling reasons that justify the allowance of the appeal despite its late filing such as
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when it is granted in the interest of substantial justice.
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3. SOME PRINCIPLES ON REGLEMENTARY PERIOD.
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 The reglementary period is mandatory and not a “mere technicality.”
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 The failure to appeal within the reglementary period renders the judgment appealed from final and executory by
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operation of law. Consequently, the prevailing party is entitled, as a matter of right, to a writ of execution and the issuance
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thereof becomes a ministerial duty which may be compelled through the remedy of mandamus.
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 The date of receipt of decisions, resolutions or orders by the parties is of no moment. For purposes of appeal, the
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reglementary period shall be counted from receipt of such decisions, resolutions, or orders by the counsel or
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representative of record.
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 Miscomputation of the reglementary period will not forestall the finality of the judgment. It is in the interest of everyone that
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the date when judgments become final and executory should remain fixed and ascertainable.
 Date of mailing by registered mail of the appeal memorandum is the date of its filing.
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 Motion for extension of time to perfect an appeal is not allowed. This kind of motion is a prohibited pleading.
 Motion for extension of time to file the memorandum of appeal is not allowed.
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 Motion for extension of time to file appeal bond is not allowed.
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APPEAL FEE AND LEGAL RESEARCH FEE
1. PAYMENT OF APPEAL FEE AND LEGAL RESEARCH FEE, MANDATORY AND JURISDICTIONAL.
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P r an
The payment by the appellant of the prevailing appeal fee and legal research fee is both mandatory and
jurisdictional. An appeal is perfected only when there is proof of payment of the appeal fee. It is by no means a mere
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technicality. If not paid, the running of the reglementary period for perfecting an appeal will not be tolled.
V.
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MEMORANDUM OF APPEAL
1. REQUISITES.
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The requisites for a valid Memorandum of Appeal are as follows:
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1. The Memorandum of Appeal should be verified by the appellant himself in accordance with the Rules of Court, as
amended;
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2. It should be presented in three (3) legibly typewritten or printed copies;
3. It shall state the grounds relied upon and the arguments in support thereof, including the relief prayed for;
4. It shall contain a statement of the date the appellant received the appealed decision, award or order; and
5. It shall be accompanied by:
(i) proof of payment of the required appeal fee and legal research fee;
(ii) posting of a cash or surety bond (in case of monetary awards); and
(iii) proof of service upon the other party.
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2. REQUIREMENTS NOT JURISDICTIONAL.

The aforesaid requirements that should be complied with in a Memorandum of Appeal are merely a rundown of the
contents of the required appeal memorandum to be submitted by the appellant. They are not jurisdictional requirements.
3. SOME PRINCIPLES ON MEMORANDUM OF APPEAL.
 Mere notice of appeal without complying with the other requisites aforestated shall not stop the running of the
period for perfecting an appeal.
 Memorandum of appeal is not similar to motion for reconsideration.
 Lack of verification in a memorandum of appeal is not a fatal defect. It may easily be corrected by requiring an
oath.
 An appeal will be dismissed if signed only by an unauthorized representative.
 Only complainants who signed the memorandum of appeal are deemed to have appealed the Labor Arbiter’s
decision. The prevailing doctrine in labor cases is that a party who has not appealed cannot obtain from the appellate court
any affirmative relief other than those granted, if any, in the decision of the lower tribunal.
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VI.
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PROOF OF SERVICE TO ADVERSE PARTY
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1. FAILURE TO SERVE COPY TO ADVERSE PARTY, NOT FATAL.
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While it is required that in all cases, the appellant shall furnish a copy of the Memorandum of Appeal to the other party
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(appellee), non-compliance therewith, however, will not be an obstacle to the perfection of the appeal; nor will it amount to a
jurisdictional defect on the NLRC’s taking cognizance thereof.
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VII.
POSTING OF BOND
C h
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1. WHEN POSTING OF BOND REQUIRED.
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Only in case the decision of the Labor Arbiter or the DOLE Regional Director (under Article 129 of the Labor Code)
involves a monetary award, that an appeal by the employer may be perfected only upon the posting of a bond, which shall
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either be in the form of (1) cash deposit, (2) surety bond or (3) property bond, equivalent in amount to the monetary award,
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but excluding the amount of damages (moral and exemplary) and attorney’s fees. In other words, only monetary awards
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(such as unpaid wages, backwages, separation pay, 13 th month pay, etc.) are required to be covered by the bond. Moral
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and exemplary damages and attorney’s fees are excluded.
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2. SOME PRINCIPLES ON POSTING OF BOND.
G Ba
 Posting of bond is mandatory and jurisdictional.
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 The cash or surety bond required for the perfection of appeal should be posted within the reglementary period. If a
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party failed to perfect his appeal by the non-payment of the appeal bond within the 10-calendar day period provided by law,
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the decision of the Labor Arbiter becomes final and executory upon the expiration of the said period.
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 In case the employer failed to post a bond to perfect its appeal, the remedy of the employee is to file a motion to
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dismiss the appeal and not a petition for mandamus for the issuance of a writ of execution.
 Surety bond must be issued by a reputable bonding company duly accredited by the Commission (NLRC) or the Supreme
se
Court.
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 The bond shall be valid and effective from the date of deposit or posting, until the case is finally decided, resolved or
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terminated, or the award satisfied.
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 Posting of a bank guarantee or bank certification is not sufficient compliance with the bond requirement. It is not
equivalent to nor can be considered compliance with the cash, surety or property bond.
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.
 Cooperatives are not exempted from posting bond.
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 Government is exempt from posting of bond; government-owned and/or controlled corporations, however, are not
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exempt therefrom.
 Bond is not required for the NLRC to entertain a motion for reconsideration. An appeal bond is required only for the
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perfection of an appeal of a Labor Arbiter’s decision involving a monetary award.
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 Bond is not required to file a Rule 65 petition for certiorari.
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3. JUSTIFICATIONS FOR NON-POSTING OF BOND.
 No monetary award, no bond required. The rule is clear that when the judgment of the Labor Arbiter does not involve any
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monetary award, no appeal bond is necessary.
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 There is no duty to post a bond if the monetary award is not specified in the decision. The Labor Arbiter’s decision orl
appeal bond is not required to be posted.
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order should state the amount awarded. If the amount of the monetary award is not contained or fixed in the judgment, the
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 In case of conflict between the body and the fallo of the decision, the latter should prevail.
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VII-A.
RULE ON REDUCTION OF APPEAL BOND
1. REQUISITES WHEN THE AMOUNT OF APPEAL BOND MAY BE REDUCED.
(1) The motion should be filed within the reglementary period;
(2) The motion to reduce bond should be based on meritorious grounds; and
(3) The motion should be accompanied by a partial bond, the amount of which should be reasonable in relation to the
monetary awards.
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2015 BAR EXAMS

2. THE MCBURNIE DOCTRINE: NEW GUIDELINES FOR FILING AND ACCEPTANCE OF MOTIONS TO REDUCE BOND.
The 2013 en banc decision rendered in the case of Andrew James Mcburnie v. Eulalio Ganzon,1 has enunciated the
following guidelines that must be observed in the matter of the filing and acceptance of motions to reduce appeal bond, as
provided in Section 6, Rule VI of the 2011 NLRC Rules of Procedure:
(a) The filing of a motion to reduce appeal bond shall be entertained by the NLRC subject to the following conditions:
(1) there is meritorious ground; and (2) a bond in a reasonable amount is posted;
(b) For purposes of compliance with condition no. (2) above, a motion shall be accompanied by the posting of a
provisional cash or surety bond equivalent to ten percent (10%) of the monetary award subject of the appeal,
exclusive of damages and attorney's fees;
(c) Compliance with the foregoing conditions shall suffice to suspend the running of the 10-day reglementary period
to perfect an appeal from the Labor Arbiter’s decision to the NLRC;
(d) The NLRC retains its authority and duty to resolve the motion to reduce bond and determine the final amount of
bond that shall be posted by the appellant, still in accordance with the standards of meritorious grounds and
reasonable amount; and
(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds the amount of the
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provisional bond, the appellant shall be given a fresh period of ten (10) days from notice of the NLRC order within
which to perfect the appeal by posting the required appeal bond.
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This Mcburnie ruling has completely overhauled the rules on motion to reduce bond. Before its advent, the issue of
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what amount to post by way of partial or provisional bond has continued to hound the party litigants and the courts. Now, the
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fixing of “ten percent (10%) of the monetary award subject of the appeal, exclusive of damages and attorney's fees” as the
b
“reasonable amount” that should be posted has completely eradicated any and all controversies thereon. In other words, no
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more motion for reduction of bond accompanied by said 10% requirement would be denied outright on the ground of insufficiency
or inadequacy of the partial or provisional bond.
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What is left for the determination by the NLRC, using its sound judgment and discretion, are only the issues of (1) the
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reasonable final amount of the bond; and (2) what constitute “meritorious grounds.” This determination is important since “in all
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cases, the reduction of the appeal bond shall be justified by meritorious grounds and accompanied by the posting of the required
Ch s a
appeal bond in a reasonable amount.”2
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The rule set in McBurnie was clarified3 by the Court in the consolidated cases of Sara Lee Philippines v. Ermilinda
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Macatlang.4 Thus, while McBurnie has effectively addressed the preliminary amount of the bond to be posted in order to toll the
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running of the period to appeal, there is no hard and fast rule in determining whether the additional bond to be posted is
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reasonable in relation to the judgment award. In this case of Sara Lee, petitioner companies5 were held liable by the Labor
Arbiter for the illegal dismissal of 5,984 employees with accompanying award of separation pay and other monetary benefits
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amounting to P3,453,664,710.86. Petitioner companies filed their Notice of Appeal with Motion to Reduce Appeal Bond and To
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Admit Reduced Amount with the NLRC. They asked the NLRC to reduce the appeal bond to P1 Million each on the grounds that
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it is impossible for any insurance company to cover such huge amount and that, in requiring them to post in full the appeal bond,
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it would be tantamount to denying them their right to appeal.
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In light of the impossibility for any surety company to cover the appeal bond and the huge economic losses which the
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companies and their employees might suffer if the P3.45 Billion bond is sustained, the NLRC granted the reduction of the appeal
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bond. The NLRC issued an Order dated 31 March 2006 directing petitioner corporations to post an additional P4.5 Million bond,
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bringing the total posted bond to P9 Million. The Court of Appeals, however, reversed and set aside the said 31 March 2006
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NLRC Resolution and deemed it reasonable under the circumstances of the case to order the posting of an additional appeal
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bond of P1 Billion.
Considering the peculiar circumstances in Sara Lee, the Court has to determine what is the reasonable amount of
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appeal bond. The fact was underscored that the amount of 10% of the award is not a permissible bond but is only such amount
that shall be deemed reasonable in the meantime that the appellant’s motion is pending resolution by the NLRC. The actual
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reasonable amount yet to be determined is necessarily a bigger amount. In an effort to strike a balance between the
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constitutional obligation of the state to afford protection to labor, on the one hand, and the opportunity afforded to the employer to
appeal, on the other, it considered the appeal bond in the amount of P725M which is equivalent to 25% of the monetary award
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sufficient to perfect the appeal, viz.:
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“We sustain the Court of Appeals in so far as it increases the amount of the required appeal bond. But we
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deem it reasonable to reduce the amount of the appeal bond to P725 Million. This directive already considers
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that the award if not illegal, is extraordinarily huge and that no insurance company would be willing to issue a
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bond for such big money. The amount of P725 Million is approximately 25% of the basis above calculated. It
is a balancing of the constitutional obligation of the state to afford protection to labor which, specific to this
es
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case, is assurance that in case of affirmance of the award, recovery is not negated; and on the other end of
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the spectrum, the opportunity of the employer to appeal.
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“By reducing the amount of the appeal bond in this case, the employees would still be assured of at least
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substantial compensation, in case a judgment award is affirmed. On the other hand, management will not be
effectively denied of its statutory privilege of appeal.”
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In line with Sara Lee and the objective that the appeal on the merits to be threshed out soonest by the NLRC, the
Court, in the 2015 case of Balite v. SS Ventures International, Inc.,6 held that the appeal bond of P100,000.00 posted by the
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respondent company for the total monetary award of P490,308.00, which is equivalent to around 20% thereof, is sufficient to
perfect the appeal. With the employer's demonstrated good faith in filing the motion to reduce the bond on demonstrable grounds
coupled with the posting of the appeal bond in the requested amount, as well as the filing of the memorandum of appeal, the
1 G.R. Nos. 178034, 178117, 186984 and 186985, Oct. 17, 2013.
2 Andrew James Mcburnie v. Eulalio Ganzon, G.R. Nos. 178034, 178117, 186984 and 186985, Oct. 17, 2013.
3 The fact of clarification was pronounced in Balite v. SS Ventures International, Inc., G.R. No. 195109, Feb. 4, 2015.
4 G.R. Nos. 180147-180150, 180319 and 180685, June 4, 2014.
5 This case is a consolidation of 6 cases involving several corporations, namely: Sara Lee Philippines, Inc. (SLPI), Aris Philippines, Inc. (Aris), Sara Lee Corporation (SLC)
and Fashion Accessories Philippines, Inc. (FAPI).
6 G.R. No. 195109, Feb. 4, 2015.
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right of the employer to appeal must be upheld. This is in recognition of the importance of the remedy of appeal, which is an
essential part of our judicial system and the need to ensure that every party litigant is given the amplest opportunity for the
proper and just disposition of his cause freed from the constraints of technicalities.
B.
NATIONAL LABOR RELATIONS COMMISSION (NLRC)
1. NATURE.
The NLRC is an administrative quasi-judicial body. It is an agency attached to the DOLE solely for program and policy
coordination only. It is in charge of deciding labor cases through compulsory arbitration.
2. COMPOSITION OF THE NLRC.
The NLRC is composed of a Chairman and twenty-three (23) members called “Commissioners.”
The NLRC has tripartite composition. Eight (8) members thereof should be chosen only from among the nominees of
the workers sector and another eight (8) from the employers sector. The Chairman and the seven (7) remaining members
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shall come from the public sector, with the latter to be chosen preferably from among the incumbent Labor Arbiters.
3. COMMISSION EN BANC.
Ba
s
The Commission sits en banc only for the following purposes:
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l e
(1) To promulgate rules and regulations governing the hearing and disposition of cases before any of its divisions and
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regional branches; and
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(2) To formulate policies affecting its administration and operations.
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The NLRC does not sit en banc to hear and decide cases. The banc has no adjudicatory power. The
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Commission exercises its adjudicatory and all other powers, functions, and duties through its eight (8) Divisions.
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4. NLRC’S EIGHT (8) DIVISIONS.
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The NLRC is divided into eight (8) divisions, each one is comprised of three (3) members. Each Division shall consist
l
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of one (1) member from the public sector who shall act as its Presiding Commissioner and one (1) member each from the
workers and employers sectors, respectively.
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The various Divisions of the Commission have exclusive appellate jurisdiction over cases within their
respective territorial jurisdictions.
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1.
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JURISDICTION
1. TWO (2) KINDS OF JURISDICTION.
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The NLRC exercises two (2) kinds of jurisdiction:
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1. Exclusive original jurisdiction; and
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2. Exclusive appellate jurisdiction.
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2. EXCLUSIVE ORIGINAL JURISDICTION.
The NLRC exercises exclusive and original jurisdiction over the following cases:
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a. Petition for injunction in ordinary labor disputes to enjoin or restrain any actual or threatened commission of
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.
any or all prohibited or unlawful acts or to require the performance of a particular act in any labor dispute which, if
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not restrained or performed forthwith, may cause grave or irreparable damage to any party.
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b. Petition for injunction in strikes or lockouts under Article 264 of the Labor Code.
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c. Certified cases which refer to labor disputes causing or likely to cause a strike or lockout in an industry
indispensable to the national interest, certified to it by the Secretary of Labor and Employment for compulsory
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arbitration by virtue of Article 263(g) of the Labor Code.
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d. Petition to annul or modify the order or resolution (including those issued during execution proceedings) of the
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Labor Arbiter.
3. EXCLUSIVE APPELLATE JURISDICTION.
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The NLRC exercises exclusive appellate jurisdiction over the following:
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a. All cases decided by the Labor Arbiters.
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b. Cases decided by the DOLE Regional Directors or hearing officers involving small money claims under Article 129
of the Labor Code.
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c. Contempt cases decided by the Labor Arbiters.
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2.
EFFECT OF NLRC REVERSAL OF
LABOR ARBITER’S ORDER OF REINSTATEMENT
1. EFFECT OF REVERSAL OF REINSTATEMENT ORDER WHEN EMPLOYEE WAS ACTUALLY REINSTATED.
The BERGONIO Rule:
Bergonio, Jr. v. South East Asian Airlines, April 21, 2014.
 After reversal of Labor Arbiter’s decision, the employer’s duty to reinstate the dismissed employee in the actual
service or in the payroll is effectively terminated. The employee, in turn, is not required to return the wages that he
had received prior to the reversal of the LA’s decision.
2. EFFECT OF REVERSAL OF REINSTATEMENT ORDER WHEN EMPLOYEE WAS REINSTATED IN THE PAYROLL.
The GENUINO Doctrine:
Marilou S. Genuino v. NLRC, Citibank, N.A., Dec. 4, 2007.

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The Refund Doctrine in Genuino no longer applies, per Garcia Doctrine.
The WENPHIL Rule: (The prevailing rule)
B
s
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Wenphil Corporation v. Abing, April 7, 2014.
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
b
The period for computing the backwages due to the dismissed employees during the period of appeal should END
Ro h
on the date that a higher court (in this case the CA) reversed the labor arbitration ruling of illegal dismissal.”
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3. EFFECT OF REVERSAL OF REINSTATEMENT ORDER WHEN EMPLOYEE WAS NEITHER REINSTATED TO HIS
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FORMER POSITION OR IN THE PAYROLL.
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Entitlement to reinstatement salaries/wages, allowances and benefits under the following doctrines:
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(1) ROQUERO doctrine; and
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(2) GARCIA doctrine.
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Roquero v. Philippine Air Lines, Inc., April 22, 2003.
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Garcia v. Philippine Airlines, Inc., Jan. 20, 2009 (En Banc).
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3.1. ENTITLEMENT TO REINSTATEMENT WAGES.
u Ba
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From the moment an employee is ordered reinstated by the Labor Arbiter on the basis of the finding that his dismissal
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is illegal, up to the time that an appellate tribunal like the NLRC, Court of Appeals and Supreme Court, as the case may be,
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reverses the said finding, the employee is generally entitled to his so-called “reinstatement wages.” The issue of entitlement to
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this benefit has been the subject of several doctrinal rulings now known as follows:
(1) Roquero doctrine; and
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(3) Garcia doctrine.
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3.1.1. ROQUERO DOCTRINE.
a
The Roquero doctrine, enunciates the rule that in cases where an employee is ordered reinstated by the Labor Arbiter
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and the employer fails or refuses to obey the reinstatement order but initiates an appeal, the employer’s success in having the
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decision of the Labor Arbiter’s decision reversed on appeal will not exculpate him from the liability to pay the reinstatement
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wages of the employee reckoned and computed from the time the employee was ordered reinstated by the Labor Arbiter until the
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date of its reversal on appeal.
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In this case of Roquero, the dismissal of petitioners Roquero and Pabayo was held valid by the Labor Arbiter. On
appeal to the NLRC, the Labor Arbiter’s decision was reversed and consequently, petitioners were ordered reinstated. They did
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not appeal from that decision of the NLRC but filed a motion for the issuance of a writ of execution of the order of reinstatement.
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The Labor Arbiter granted the motion but respondent PAL refused to comply with the said order on the ground that it has filed a
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Petition for Review before the Supreme Court. Subsequently, the CA reversed the decision of the NLRC and ruled that the
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dismissal of petitioners was valid. The Supreme Court later affirmed the CA’s decision but it held that the unjustified refusal by
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PAL to reinstate Roquero who, unlike Pabayo, has not amicably settled his case, entitles him to the payment of his reinstatement
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PAL to actually reinstate Roquero or reinstate him in the payroll. Having failed to do so, the former must pay the latter the l
wages effective from the time PAL failed to reinstate him despite the issuance of the writ of execution. Thus, it was mandatory for
Supreme Court.
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salaries he is entitled to, as if he was reinstated, from the time of the decision of the NLRC until the finality of the decision of the
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Following Roquero, it is now the norm that even if the order of reinstatement of the Labor Arbiter is reversed on appeal,
it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal
Ch
until its reversal by the NLRC, or the Court of Appeals or the Supreme Court, as the case may be. If the employee has been
reinstated during the appeal period and such reinstatement order is subsequently reversed on appeal with finality, the employee
is not required to reimburse whatever salaries he has received for he is entitled to such, more so if he actually rendered services
during the said period.
3.1.2. GARCIA DOCTRINE.
a. Modification of the Roquero and Genuino doctrines.
The Roquero and Genuino doctrines have been modified by the Garcia doctrine. In this case, while respondent
Philippine Airlines (PAL) was undergoing rehabilitation receivership, an illegal dismissal case was filed by petitioners against
respondent PAL which was decided by the Labor Arbiter in their favor thus ordering PAL to, inter alia, immediately comply with
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the reinstatement aspect of the decision. On appeal, the NLRC reversed the ruling of the Labor Arbiter and held that their
dismissal was valid. The issue of whether petitioners may collect their reinstatement wages during the period between the Labor
Arbiter’s order of reinstatement pending appeal and the NLRC decision overturning that of the Labor Arbiter, now that
respondent PAL has terminated and exited from rehabilitation proceedings, was resolved in the negative by the Supreme Court.
The following ratiocinations were cited:
(1) Re: modification of the Genuino doctrine. - The “refund doctrine” in Genuino should no longer be observed
because it easily demonstrates how a favorable decision by the Labor Arbiter could harm, more than help, a dismissed
employee. The employee, to make both ends meet, would necessarily have to use up the salaries received during the
pendency of the appeal, only to end up having to refund the sum in case of a final unfavorable decision. It is mirage of a stop-
gap leading the employee to a risky cliff of insolvency. Further, the Genuino ruling not only disregards the social justice
principles behind the rule, but also institutes a scheme unduly favorable to management. Under such scheme, the salaries
dispensed pendente lite merely serve as a bond posted in installment by the employer. For in the event of a reversal of the
Labor Arbiter’s decision ordering reinstatement, the employer gets back the same amount without having to spend ordinarily for
bond premiums. This circumvents, if not directly contradicts, the proscription that the “posting of a bond [even a cash bond] by
the employer shall not stay the execution for reinstatement.”
a r
(2) Re: modification of the Roquero doctrine. – The Roquero doctrine was reaffirmed but with the modification that
“[a]fter the Labor Arbiter’s decision is reversed by a higher tribunal, the employee may be barred from collecting the accrued
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wages, if it is shown that the delay in enforcing the reinstatement pending appeal was without fault on the part of the employer.”
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b. Two-fold test under the Garcia doctrine.
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Under Garcia, the test to determine the liability of the employer (who did not reinstate the employee pending appeal) to
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pay the wages of the dismissed employee covering the period from the time he was ordered reinstated by the Labor Arbiter to
the reversal of the Labor Arbiter’s decision either by the NLRC, the Court of Appeals or the High Court, is two-fold, to wit:
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(1) There must be actual delay or the fact that the order of reinstatement pending appeal was not executed prior to its
reversal; and
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(2) The delay must not be due to the employer’s unjustified act or omission. If the delay is due to the employer’s
unjustified refusal, the employer may still be required to pay the salaries notwithstanding the reversal of the Labor
e
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Arbiter’s decision.
b n
ia r
In Garcia, there was actual delay in reinstating petitioners but respondent PAL was justified in not complying with the
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reinstatement order of the Labor Arbiter because during the pendency of the illegal dismissal case, the SEC placed respondent
PAL under an Interim Rehabilitation Receiver who, after the Labor Arbiter rendered his decision, was replaced with a Permanent
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Rehabilitation Receiver. It is settled that upon appointment by the SEC of a rehabilitation receiver, all actions for claims before
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any court, tribunal or board against the corporation shall ipso jure be suspended. Resultantly, respondent PAL’s “failure to
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exercise the alternative options of actual reinstatement and payroll reinstatement was thus justified. Such being the case,
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respondent’s obligation to pay the salaries pending appeal, as the normal effect of the non-exercise of the options, did not
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attach.”
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t b
c. Cases decided after the promulgation of the Garcia doctrine.
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Subsequent to Garcia, some of the cases decided in accordance with this doctrine are as follows:
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(1) College of the Immaculate Conception v. NLRC (2010);
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(2) Islriz Trading v. Capada (2011);
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(3) Pfizer, Inc. v. Velasco (2011); and
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(4) C. Alcantara & Sons, Inc. v. CA (2012).
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.
2. RECKONING OF THE PERIOD COVERED BY ACCRUED REINSTATEMENT WAGES.
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To clarify, employees ordered reinstated by the Labor Arbiter are entitled to accrued reinstatement wages only from
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the time the employer received a copy of the Labor Arbiter’s decision declaring the employees’ termination illegal and
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ordering their reinstatement up to the date of the decision of the appellate tribunal overturning that of the Labor Arbiter. It
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is not accurate therefore to state that such entitlement commences “from the moment the reinstatement order was issued up to
an a r
the date when the same was reversed by a higher court without fear of refunding what he had received.”
P4. SOME PRINCIPLES ON REINSTATEMENT WAGES.
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 Employer is not liable to pay any reinstatement backwages if reinstatement is ordered not by the Labor Arbiter but by the
and/or Supreme Court.

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NLRC on appeal and it was not executed by writ and its finding of illegal dismissal is later reversed by the Court of Appeals
payroll reinstatement until the illegal dismissal case is reversed by a higher tribunal.
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 Payroll-reinstated employee is entitled not only to reinstatement wages but also to other benefits during the period of
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 Award of additional backwages and other benefits from the time the Labor Arbiter ordered reinstatement until actual or
payroll reinstatement is proper and valid.
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3.
REMEDIES
1. EXTRAORDINARY REMEDIES.
a. Nature.
The power of the Commission (NLRC) to grant extraordinary remedies mentioned in No. 3 above is not provided in the
Labor Code or in any other laws. It is a newly created remedy which saw light for the first time under Rule XII of the 2011 NLRC
Rules of Procedure. Past NLRC Rules did not provide therefor.
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Since this is a recent newly minted remedy, there has yet been no decision by the Supreme Court dwelling on its
validity.
What is clear though is that this remedy is not equivalent to nor a substitute for appeal. It is directed against “orders” or
“resolutions” issued by the Labor Arbiter in the course of the proceedings before him where the remedy of appeal is not
available. Notably, the remedy of appeal is available only against the main decision of a case. But orders or resolutions issued
prior to the rendition of the decision in the main as well as orders or resolutions issued thereafter, specifically during the
execution stage, are subject of this rule on extraordinary remedies.
b. Grounds.
The petition filed under this Rule may be entertained only on any of the following grounds:
(a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;
(b) If serious errors in the findings of facts are raised which, if not corrected, would cause grave or irreparable
damage or injury to the petitioner;
(c) If a party by fraud, accident, mistake or excusable negligence has been prevented from taking an appeal;
(d) If made purely on questions of law; or
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(e) If the order or resolution will cause injustice if not rectified.
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B
c. Initiation through verified petition.
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To secure these extraordinary remedies, a party aggrieved by any order or resolution of the Labor Arbiter including
l e
those issued during execution proceedings may file a verified petition to annul or modify such order or resolution. The petition
b
may be accompanied by an application for the issuance of a temporary restraining order and/or writ of preliminary or permanent
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injunction to enjoin the Labor Arbiter, or any person acting under his/her authority, to desist from enforcing said resolution or
order.
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4.
CERTIFIED CASES
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1. CERTIFIED LABOR DISPUTES.
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B
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“Certified labor disputes” are national interest cases certified by the DOLE Secretary to the Commission (NLRC) for
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compulsory arbitration under Article 263(g) of the Labor Code.
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2. EFFECTS OF CERTIFICATION OF LABOR DISPUTES.
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The certification of a labor dispute to the NLRC has the following effects:
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(1) On intended or impending strike or lockout. - Upon certification, the intended or impending strike or lockout is
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automatically enjoined, notwithstanding the filing of any motion for reconsideration of the certification order or the non-resolution
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of any such motion which may have been duly submitted to the DOLE Secretary.
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(2) On actual strike or lockout. - If a work stoppage has already taken place at the time of the certification, all striking
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or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all
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workers under the same terms and conditions prevailing before the strike or lockout.
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(3) On cases already filed or may be filed. - All cases between the same parties, except where the certification order
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specifies otherwise the issues submitted for arbitration which are already filed or may be filed, and are relevant to or are proper
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incidents of the certified case, shall be considered subsumed or absorbed by the certified case, and shall be decided by the
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appropriate Division of the Commission.
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(4) On other pending cases. - The parties to a certified case, under pain of contempt, shall inform their counsels and
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the Division concerned of all cases pending with the Regional Arbitration Branches and the Voluntary Arbitrators relative or
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incident to the certified case before it.
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(5) On which Division should take cognizance of the certified case in case entity has several workplaces in
different regions. - Whenever a certified labor dispute involves a business entity with several workplaces located in different
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regions, the Division having territorial jurisdiction over the principal office of the company shall acquire jurisdiction to decide such
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labor dispute; unless the certification order provides otherwise.
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 Same effect of certification to the NLRC as in cases assumed directly by DOLE Secretary.
The effects described above are also applicable when the DOLE Secretary directly assumes jurisdiction over a labor
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dispute affecting industries imbued with national interest and decides it himself.
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C.
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BUREAU OF LABOR RELATIONS
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– MED-ARBITERS
1. MED-ARBITER OR MEDIATOR-ARBITER.
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“Med-Arbiter” or “Mediator-Arbiter” refers to an officer in the Regional Office or in the BLR authorized to hear and
decide representation cases, inter-union or intra-union disputes and other related labor relations disputes, except cancellation of
union registration cases.
Some principles on Med-Arbiter.
 Injunctive power. The Med-Arbiter is possessed of the power to issue temporary restraining order and the writ of
injunction in appropriate cases.
 Contempt power. The Med-Arbiter has contempt power.
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 Factual findings of Med-Arbiters are accorded great respect. They are binding if they are supported by
substantial evidence and there exists no capricious exercise of judgment warranting reversal by certiorari.
 Execution of decisions, orders or awards of Med-Arbiters. The Med-Arbiter may, upon his own initiative or on
motion of any interested party, issue a writ of execution on a judgment within five (5) years from the date it becomes
final and executory, requiring the Sheriff or a duly deputized officer to execute or enforce the same.
1.
JURISDICTION
(ORIGINAL AND APPELLATE)
I.
CASES FALLING UNDER THE JURISDICTION OF THE MED-ARBITERS,
DOLE DIRECTORS AND BLR DIRECTOR, IN GENERAL
1. INTRODUCTION.
For purposes of clarity in the otherwise labyrinthine issue of jurisdiction and procedure in the BLR, there is a need to
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cite first the cases over which the following officials have their respective jurisdictions:
(1) Mediator-Arbiter (Med-Arbiter);
(2) DOLE Regional Director; and
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(3) BLR Director.
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The Mediator-Arbiter and the DOLE Regional Director exercise original and exclusive jurisdiction over specified
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cases mentioned below. For his part, the BLR Director exercises not only appellate but original jurisdiction over some particular
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cases.
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2. CASES COVERED.
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There are three (3) general classifications of the cases covered by the jurisdiction of said officials, to wit:
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(a) Inter-union disputes;
(b) Intra-union disputes; and
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(c) Other related labor relations disputes.
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I-A.
1. INTER-UNION OR REPRESENTATION DISPUTES.

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INTER-UNION OR INTRA-UNION DISPUTES
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An “inter-union dispute” or “representation dispute” is one occurring or carried on between or among unions. It refers to
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a case involving a petition for certification election filed by a duly registered labor organization which is seeking to be
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recognized as the sole and exclusive bargaining agent of the rank-and-file employees or supervisory employees, as the case
may be, in the appropriate bargaining unit of a company, firm or establishment.
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Broadly, an “inter-union dispute” refers to any conflict between and among legitimate labor unions involving
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representation questions for purposes of collective bargaining or to any other conflict or dispute between legitimate labor unions.
2. INTRA-UNION OR INTERNAL UNION DISPUTES.
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An “intra-union dispute” or “internal union dispute” refers to a conflict within or inside a labor union. It is any conflict
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between and among union members, including grievances arising from any violation of the rights and conditions of membership,
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violation of or disagreement over any provision of the union’s constitution and by-laws or disputes arising from chartering or
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affiliation of a union. It refers to a case involving the control, supervision and management of the internal affairs of a duly
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registered labor union such as those relating to specific violations of the union’s constitution and by-laws.
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A complaint for any violation of the constitution and by-laws and the rights and conditions of union membership under
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Article 241 of the Labor Code, may be filed in the Regional Office where the union is domiciled.
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3. RUNDOWN OF INTER-UNION/INTRA-UNION CASES.
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The following is a rundown of all possible inter-union/intra-union disputes:
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1) Inter-union disputes:
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(a) Validity/invalidity of voluntary recognition, certification election, consent election, run-off election or re-run
election;
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(b) Such other disputes or conflicts involving the rights to self-organization, union membership and collective
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bargaining between and among legitimate labor organizations.
2) Intra-union disputes:
(a) Conduct or nullification of election of officers of unions and workers' association;
R o
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(b) Audit or accounts examination of union or workers' association funds;
(c) Deregistration of collective bargaining agreements;
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(d) Validity/invalidity of union affiliation or disaffiliation;
(e) Validity/invalidity of acceptance/non-acceptance for union membership;
(f) Opposition to application for union or CBA registration;
(g) Violations of or disagreements over any provision of the Constitution and By-Laws of a union or workers'
association;
(h) Disagreements over chartering or registration of labor organizations or the registration of collective bargaining
agreements;
(i) Violations of the rights and conditions of membership in a union or workers' association;
(j) Violations of the rights of legitimate labor organizations, except interpretation of CBAs;
(k) Validity/Invalidity of impeachment/expulsion/suspension or any disciplinary action meted against any officer and
member, including those arising from non-compliance with the reportorial requirement;
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(l) Such other disputes or conflicts involving the rights to self-organization, union membership and collective
bargaining between and among members of a union or workers’ association.
1-B.
OTHER RELATED LABOR RELATIONS DISPUTES
1. MEANING OF “RELATED LABOR RELATIONS DISPUTES.”
“Related labor relations dispute” refers to any conflict between a labor union and the employer or any individual, entity
or group that is not a labor union or workers’ association.
2. COVERAGE OF RELATED LABOR RELATIONS DISPUTES NOT OTHERWISE COVERED BY ARTICLE 217.
(a) Any conflict between:
(1) a labor union and the employer, or
(2) a labor union and a group that is not a labor organization; or
(3) a labor union and an individual who is not a member of such union;
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(b) Cancellation of registration of unions and workers associations filed by individuals other than its members, or
a
group that is not a labor organization; and
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(c) A petition for interpleader involving labor relations.
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“Interpleader” refers to a proceeding brought by a party against two or more parties with conflicting claims, compelling
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the claimants to litigate between and among themselves their respective rights to the claim, thereby relieving the party so filing
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from suits they may otherwise bring against it.
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II.
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ORIGINAL AND EXCLUSIVE JURISDICTION OF MED-ARBITERS,
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DOLE DIRECTORS AND BLR DIRECTOR
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Having known the various cases afore-described, a discussion of the respective jurisdictions of the Med-Arbiters,
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DOLE Directors and BLR Director over these cases may now be made with greater clarity.
1. ORIGINAL AND EXCLUSIVE JURISDICTION OF THE MED-ARBITERS.
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The cases falling under the original and exclusive jurisdiction of the Med-Arbiters are as follows:
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(a) Inter-union disputes, also known as representation/certification election conflicts;
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(b) Intra-union disputes;
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(c) Other related labor relations disputes; and
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(d) Contempt cases.
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Excepted from their jurisdiction is cancellation of union registration cases which are cognizable by the DOLE
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Regional Directors.
2. ORIGINAL AND EXCLUSIVE JURISDICTION OF THE DOLE REGIONAL DIRECTORS.
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The cases falling under the original and exclusive jurisdiction of the DOLE Regional Directors are as follows:
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(1) Petitions for cancellation of registration of independent unions, local chapters and workers’ associations;
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(2) Petitions for deregistration of CBAs;
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(3) Request for examination of books of accounts of said labor organizations under Article 274 of the Labor Code.
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On No. 3 [Examination of Books of Accounts] above, there is a need to point out that although by nature, this is an
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intra-union dispute, the rules treat this separately from those applicable to intra-union disputes and vest jurisdiction thereover in
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the DOLE Regional Directors and not in the Med-Arbiters.
s
The case in point is La Tondena Workers Union vs. Secretary of Labor. Intra-union conflicts such as examinations
e
.
of accounts are under the jurisdiction of the BLR. However, the Rules of Procedure on Mediation-Arbitration purposely and
f bl
expressly separated or distinguished examinations of union accounts from the genus of intra-union conflicts and provided a
different procedure for the resolution of the same. Original jurisdiction over complaints for examinations of union accounts is
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vested in the Regional Director and appellate jurisdiction over decisions of the former is lodged with the BLR. This is apparent
from Sections 3 and 4, Rule II of the Med-Arbitration Rules. Contrast these two sections from Section 2 and Section 5 of the
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same Rules. Section 2 expressly vests upon Med-Arbiters original and exclusive jurisdiction to hear and decide, inter alia, all
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other inter-union or internal union disputes. Section 5 states that the decisions of the Med-Arbiter shall be appealable to the
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DOLE Secretary. These are the provisions consistent with Section 5 of Rule VIII of the Implementing Rules of the Labor Code.
3. ORIGINAL AND EXCLUSIVE JURISDICTION OF THE BLR DIRECTOR.
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At the outset, it must be stressed that reference in the law and pertinent rules to “BLR”, as far as the issue of
b
jurisdiction is concerned, should rightfully mean “BLR Director.”
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The BLR Director, therefore, as head of the agency, has the original and exclusive jurisdiction over the following:
R
(1) Complaints and petitions involving the registration or cancellation of registration of federations, national unions,
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industry unions, trade union centers and their local chapters, affiliates and member organizations;
(2) Request for examination of books of accounts of said labor organizations (federations, national unions,
Ch
industry unions and trade union centers) under Article 274 of the Labor Code;
(3) Intra-union disputes involving said labor organizations (federations, national unions, industry unions and
trade union centers); and
(4) Contempt cases.
1
As far as No. 3 [Intra-Union Disputes] above is concerned, the 2010 case of Atty. Montaño v. Atty. Verceles, is
relevant. Petitioner here claimed that under the Implementing Rules, it is the Regional Director of the DOLE and not the BLR who
has jurisdiction over intra-union disputes involving federations which, in this case, pertains to the election protests in connection
with the election of officers of the federation (Federation of Free Workers [FFW]). In finding no merit in petitioner’s contention, the
1 G.R. No. 168583, July 26, 2010.

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High Court pointed out that Article 226 of the Labor Code clearly provides that the BLR and the Regional Directors of DOLE have
concurrent jurisdiction over inter-union and intra-union disputes. Such disputes include the conduct or nullification of election of
union and workers’ association officers. There is, thus, no doubt as to the BLR’s jurisdiction over the instant dispute involving
member-unions of a federation arising from disagreement over the provisions of the federation’s constitution and by-laws. It
agreed with the following observation of the BLR:
“Rule XVI lays down the decentralized intra-union dispute settlement mechanism. Section 1 states that any complaint in
this regard ‘shall be filed in the Regional Office where the union is domiciled.’ The concept of domicile in labor relations
regulation is equivalent to the place where the union seeks to operate or has established a geographical presence for
purposes of collective bargaining or for dealing with employers concerning terms and conditions of employment.
“The matter of venue becomes problematic when the intra-union dispute involves a federation, because the geographical
presence of a federation may encompass more than one administrative region. Pursuant to its authority under Article 226, this
Bureau exercises original jurisdiction over intra-union disputes involving federations. It is well-settled that FFW, having local
unions all over the country, operates in more than one administrative region. Therefore, this Bureau maintains original and
exclusive jurisdiction over disputes arising from any violation of or disagreement over any provision of its constitution and by-
laws.”
II.
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APPELLATE JURISDICTION OF THE BLR DIRECTOR
B
1. CASES FALLING UNDER THE APPELLATE JURISDICTION OF THE BLR DIRECTOR.
s
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The BLR Director exercises exclusive appellate jurisdiction over the following cases:
l e
(a) All decisions of the Med-Arbiters in (1) intra-union disputes, and (2) other related labor relations disputes.
b
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NOTE: Decisions in inter-union disputes or representation/certification election conflicts, are NOT
appealable to the BLR Director but directly to the DOLE Secretary. [See discussion below].
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(b) All decisions originating from the DOLE Regional Directors in the cases falling under their original jurisdiction as
enumerated above.
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2. APPELLATE JURISDICTION OVER MED-ARBITER’S DECISIONS IN INTER-UNION DISPUTES OR CERTIFICATION
s
ELECTION CASES IS LODGED WITH THE DOLE SECRETARY AND NOT WITH THE BLR DIRECTOR.
e a
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To reiterate, decisions of Med-Arbiters in certification election cases or inter-union disputes are appealable not to the
b n
BLR Director but directly to the DOLE Secretary by virtue of Article 259 of the Labor Code.
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It must be noted that the rule on appeal in certification election cases in unorganized establishments is different from
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that of organized establishments.
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(a) Rule on appeal in unorganized establishments. - The order granting the conduct of a certification election in an
Ba
unorganized establishment is not subject to appeal. Any issue arising from its conduct or from its results is
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proper subject of a protest. Appeal may only be made to the DOLE Secretary in case of denial of the petition
within ten (10) days from receipt of the decision of denial.
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(b) Rule on appeal in organized establishments. - The order granting the conduct of a certification election in an
t b
organized establishment and the decision dismissing or denying the petition may be appealed to the DOLE
i o
Secretary within ten (10) days from receipt thereof.
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3. APPEALS AND REMEDIES FROM DECISIONS OF THE BLR DIRECTOR.
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a. Jurisdictional distinctions.
B a
Ch
The distinctions pointed out above between the respective jurisdictions of the DOLE Regional Directors, Med-Arbiters
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and the BLR Director find significance in determining which of the cases may be appealed to the BLR Director and those that
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may be appealed to the DOLE Secretary. Thus, the rule may be stated as follows:
f. bl
(1) Decisions in cases cognizable by the BLR Director in the exercise of his original and exclusive jurisdiction are
appealable to the DOLE Secretary;
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(2) Decisions in cases cognizable by the Med-Arbiters in their original and exclusive jurisdiction are appealable to
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the BLR Director with the single exception of decisions in certification election or inter-union disputes which, as
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earlier emphasized, are directly appealable to the DOLE Secretary as mandated under Article 259 of the Labor
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Code; and
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(3) Decisions in cases cognizable by the DOLE Regional Directors in their original and exclusive jurisdiction are
appealable to the BLR Director.
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b. Remedies.
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(1) On No. 1 above. – The decision rendered by the DOLE Secretary in his appellate jurisdiction may be elevated to
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the Court of Appeals by way of Rule 65 petition for certiorari.
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(2) On Nos. 2 and 3 above. - The decisions rendered by the BLR Director in his appellate jurisdiction may be
elevated directly to the Court of Appeals by way of Rule 65 petition for certiorari. It cannot be appealed to the
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DOLE Secretary because they were rendered by the BLR Director in the exercise of his appellate jurisdiction.
Simply stated, another appeal to the DOLE Secretary is not allowed under the situations contemplated in Nos. 2
and 3 above, the decisions being final and executory.
4. EXAMPLES OF SPECIFIC CASES.
a. APPEALS FROM DENIAL OF APPLICATION FOR REGISTRATION AND CANCELLATION OF REGISTRATION
OF LABOR ORGANIZATIONS.
For purposes of appeal, the issue of union registration involves two (2) situations, to wit:
(1) Denial of application for union registration; and
(2) Revocation or cancellation of union registration.
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 On denial of application for union registration.

(1) If the denial is made by the Regional Office in cases involving application for registration of independent
unions, local chapters and workers’ associations, the same may be appealed to the BLR Director; or
(2) If the denial is made by the BLR Director in cases involving federations, national unions, industry unions
and trade union centers, the same is appealable to the DOLE Secretary.
 On revocation or cancellation of union registration.
(1) If decision is rendered by the Regional Director. - The decision of the Regional Director in the cases over
which he has original jurisdiction, may be appealed to the BLR Director by any of the parties within ten (10)
days from receipt thereof, copy furnished the opposing party.
(2) If decision is rendered by the BLR Director. - The decision of the BLR Director, in the exercise of his
original jurisdiction, may be appealed to the DOLE Secretary by any party within the same period of ten (10)
days, copy furnished the opposing party.
5. EXCEPTION WHEN DOLE SECRETARY MAY ENTERTAIN APPEAL DIRECTLY FROM THE DOLE REGIONAL
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DIRECTOR’S DECISION WITHOUT PASSING THROUGH THE BLR DIRECTOR.
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The Heritage Hotel Manila v. National Union of Workers in the Hotel, Restaurant and Allied Industries-Heritage
1
Hotel Manila Supervisors Chapter (NUWHRAIN-HHMSC). In this 2011 case, the Supreme Court allowed a deviation from the
s
standing rule on the appellate jurisdiction of the BLR Director over a decision of the DOLE Regional Director when the BLR
an
l e
Director inhibited himself from taking cognizance of the appeal from the decision of the DOLE Regional Director because he
was a former counsel of respondent. The DOLE Secretary may thus legally assume jurisdiction over an appeal from the decision
b
of the DOLE Regional Director in the event that the BLR Director inhibits himself from the case. In the absence of the BLR
Ro h
Director, there is no person more competent to resolve the appeal than the DOLE Secretary. Thus, jurisdiction remained
with the BLR despite the BLR Director’s inhibition. When the DOLE Secretary resolved the appeal, she merely stepped into the
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shoes of the BLR Director and performed a function that the latter could not himself perform. She did so pursuant to her power of
supervision and control over the BLR.
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B n
III.
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ADMINISTRATIVE FUNCTIONS OF THE BLR AND LRDs
e a
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n
In addition to the afore-mentioned controversies over which they have concurrent original and exclusive jurisdiction, the
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BLR and the Labor Relations Divisions (LRDs) in the DOLE Regional Offices likewise have concurrent jurisdiction over the
o
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following administrative functions:
R
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1. Registration of labor unions;
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2. Keeping of registry of labor unions;
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3. Maintenance and custody of the files of Collective Bargaining Agreements (CBAs) and other related agreements.
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4. Records of settlement of labor disputes; and
5. Copies of orders and decisions of Voluntary Arbitrators.
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It must be noted that it is the registration of the labor organization with the BLR and not with the Securities
t b
and Exchange Commission (SEC) which makes it a legitimate labor organization with rights and privileges granted
under the Labor Code.
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D.
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NATIONAL CONCILIATION AND MEDIATION BOARD
(NCMB)
B a
h 1.
. Jo C
NATURE OF PROCEEDINGS
bl
e s
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1. NCMB IS NOT A QUASI-JUDICIAL AGENCY.
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NCMB is not a quasi-judicial agency, according to the 2009 case of Tabigue v. International Copra Export
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2
Corporation.
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“Quasi-judicial function” is a term which applies to the action, discretion, etc. of public administrative officers or
B
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bodies, who are required to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions from them
as a basis for their official action and to exercise discretion of a judicial nature.
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2. NOT BEING A QUASI-JUDICIAL AGENCY, NCMB’S RULINGS CANNOT BE ELEVATED TO, AND COGNIZABLE BY, THE
COURT OF APPEALS.
b l
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Rule 43 of the Rules of Court applies only to awards, judgments, final orders or resolutions of or authorized by any
quasi-judicial agency in the exercise of its quasi-judicial functions. Hence, NCMB’s decision, not having been rendered by a
an
quasi-judicial body, cannot be elevated to the Court of Appeals under said rule.
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2.
CONCILIATION VS. MEDIATION
1. CONCILIATION AND MEDIATION, MEANING.
Both the terms “conciliation” and “mediation” refer to a process whereby a third person usually called Conciliator (in
case of conciliation) or Mediator (in case of mediation), intervenes in a dispute involving two or more conflicting parties for the
purpose of reconciling their differences or persuading them into adjusting or settling their dispute. The Conciliator or Mediator
normally does not make or render any decision, his role being confined to the functions afore-described.
1 G.R. No. 178296, Jan. 12, 2011.

2 G.R. No. 183335, Dec. 23, 2009.
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3. DISTINCTION BETWEEN CONCILIATION AND MEDIATION.

Generally, there are no marked distinctions between conciliation and mediation. The reason is that In both cases, a
neutral third party (called Conciliator or Mediator) is tasked to assist two or more opposing parties in finding appropriate
resolution to a dispute.
In the NCMB, the hearing officer is called Conciliator-Mediator. There is no separate classification between
conciliators and mediators. When the Conciliator-Mediator performs his task, he does not make any distinction when he is acting
as Conciliator or as Mediator.
In other jurisdictions, the principal distinction between conciliation and mediation lies on the extent of the
power and authority granted to the neutral third party.
In mediation, the Mediator normally facilitates a deliberation or discussion of the issues between the parties. He may
or may not offer any opinions on the strength and weaknesses of each party's positions and arguments. Thus, mediation may be
classified into two, namely:
1. Facilitative Mediation where the Mediator does not make or offer any opinion; or
a r
2. Evaluative Mediation where the Mediator offers an opinion which is not binding on the parties.
It bears stressing, however, that regardless of which of the 2 methods above is chosen, the Mediator is not empowered
to impose his will on the parties.
B
s
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In conciliation, the Conciliator is given more power and authority in that he may not only offer an opinion on the issues
at hand but may actually make a binding opinion thereon provided the parties stipulate in advance to this effect. His opinion is
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based on the facts and the law involved in the controversy before him.
Ro h
It may thus be observed that conciliation is more formal than mediation in the sense that the Conciliator’s opinion,
unlike the Mediator’s, may be binding on the parties, although it may be merely temporary in character.
C
an 3.
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B n
PREVENTIVE MEDIATION
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n
1. PREVENTIVE MEDIATION AS A REMEDY.
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“Preventive mediation,” as a remedy, is not found in the Labor Code. But under the law which created the NCMB, it is
o
ia r
expressly stated that one of its functions is to provide preventive mediation to disputing parties.
R
The term “preventive mediation case” refers to the potential or brewing labor dispute which is the subject of a formal or
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informal request for conciliation and mediation assistance sought by either or both parties in order to remedy, contain or prevent
Ba
its degeneration into a full blown dispute through amicable settlement.
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2. HOW TO INITIATE PREVENTIVE MEDIATION.
G
Preventive mediation proceeding may be initiated in two (2) ways:
s
t o l e
(1) By filing a notice or request of preventive mediation, as distinguished from a notice of strike/lockout; or
b
i
(2) By conversion of the notice of strike/lockout into a preventive mediation case.
o
l
3. AUTHORITY TO CONVERT A NOTICE OF STRIKE/LOCKOUT INTO A PREVENTIVE MEDIATION CASE.
R
se
The NCMB has the authority to convert a notice of strike/lockout filed by the union/employer into a preventive
an r
mediation case under any of the following circumstances:
1. When the issues raised in the notice of strike/lockout are not strikeable in character.
B a
Jo Ch s
2. When the party which filed the notice of strike/lockout voluntarily asks for the conversion.
e
.
3. When both parties to a labor dispute mutually agree to have it subjected to preventive mediation proceeding.
f bl
Such authority is in pursuance of the NCMB’s duty to exert all efforts at mediation and conciliation to enable the parties
to settle their dispute amicably and in line with the State policy of favoring voluntary modes of settling labor disputes.
o Ro
4. CONVERSION OF A NOTICE OF STRIKE OR NOTICE OF LOCKOUT INTO A PREVENTIVE MEDIATION CASE RESULTS
r an r
IN ITS DISMISSAL.
a
P
Once the notice of strike is converted into a preventive mediation case, the notice is deemed dropped from the dockets
B
Ch
as if no notice of strike has been filed. Since there is no more notice of strike to speak about, any strike subsequently staged by
the union after the conversion is deemed not to have complied with the requirements of a valid strike and therefore illegal.
es
The same rule applies in the case of lockout by an employer.
5. RELEVANT CASES.
b l
1
R o
A case in point is Philippine Airlines, Inc. v. Secretary of Labor and Employment, where the strike was declared
an
illegal for lack of a valid notice of strike in view of the NCMB’s conversion of said notice into a preventive mediation case.
2
It is clear, according to San Miguel Corporation v. NLRC, that the moment the NCMB orders the preventive
Ch
mediation in a strike case, the union thereupon loses the notice of strike it had filed. Consequently, if it still defiantly proceeds
with the strike while mediation is on-going, the strike is illegal.
1 G.R. No. 88210, Jan. 23, 1991, 193 SCRA 223.

2 G.R. No. 119293, June 10, 2003.
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E.
DOLE REGIONAL DIRECTORS
1.
JURISDICTION
1. JURISDICTION OF THE DOLE REGIONAL DIRECTORS.
The DOLE Regional Directors have original and exclusive jurisdiction over the following cases:
(a) Labor standards enforcement cases under Article 128;
(b) Small money claims cases arising from labor standards violations in the amount not exceeding P5,000.00 and not
accompanied with a claim for reinstatement under Article 129;
(c) Occupational safety and health violations;
(d) Registration of unions and cancellation thereof, cases filed against unions and other labor relations related cases;
(e) Complaints against private recruitment and placement agencies (PRPAs) for local employment; and
(f) Cases submitted to them for voluntary arbitration in their capacity as Ex-Officio Voluntary Arbitrators (EVAs)
under Department Order No. 83-07, Series of 2007.
a rI.
B
LABOR STANDARDS ENFORCEMENT CASES
s
an
1. SUBJECT OF THE VISITORIAL AND ENFORCEMENT POWERS: THE ESTABLISHMENT AND NOT THE EMPLOYEES
THEREIN.
l e
b
The subject of the visitorial and enforcement powers granted to the DOLE Secretary or his duly authorized
Ro h
representatives under Article 128 is the establishment which is under inspection and not the employees thereof.
C
Consequently, any awards granted are not confined to employees who signed the complaint inspection but are equally
an r
applicable to all those who were employed by the establishment concerned at the time the complaint was filed, even if
a
they were not signatories thereto. The reason is that the visitorial and enforcement powers are relevant to, and may be
Ch
B n
exercised over, establishments, not over individual employees thereof, to determine compliance by such
s a
establishments with labor standards laws. Necessarily, in case of an award from such violation by the establishment,
e
all its existing employees should be benefited thereby. It must be stressed, however, that such award should not apply to
l
n
those who resigned, retired or ceased to be employees at the time the complaint was filed.
b
o
ia r
2. ORIGINAL JURISDICTION.
R
The DOLE Regional Directors exercise original jurisdiction over the following:
an u Ba
(a) Cases involving inspection of establishments to determine compliance with labor standards (Visitorial Power); and
G
(b) Cases involving issuance of compliance orders and writs of execution (Enforcement Power).
Ch s
3. VISITORIAL POWER OF REGIONAL DIRECTORS UNDER ARTICLE 128(a).
o l e
Pursuant to their visitorial power under Article 128(a), the DOLE Regional Directors shall have:
t b
i
(a) access to employer’s records and premises at any time of the day or night, whenever work is being undertaken
o
l
therein; and
R
se
(b) the right:
an r
(1) to copy from said records;
a
(2) to question any employee and investigate any fact, condition or matter which may be necessary to determine
B
Jo Ch
violations or which may aid in the enforcement of the Labor Code and of any labor law, wage order, or rules
and regulations issued pursuant thereto.
e s
. bl
4. ENFORCEMENT POWER OF REGIONAL DIRECTORS UNDER ARTICLE 128(b).
o f The statutory basis of the authority of the DOLE Regional Directors to administer and enforce labor standards is found
in Article 128(b) of the Labor Code, as amended.
Ro
r an r
Pursuant thereto, the DOLE Regional Director, in cases where the employer-employee relationship still exists, shall
a
P
have the power:
B
Ch
a. to issue compliance orders to give effect to the labor standards provisions of the Labor Code and other labor
legislations based on the findings of labor employment and enforcement officers or industrial safety engineers
made in the course of inspection.
es
b.
b
to 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
l
R o
supported by documentary proofs which were not considered in the course of inspection, in which case, the
contested case shall fall under the jurisdiction of the Labor Arbiter to whom it should be endorsed by the Regional
an
Director.
c. to order stoppage of work or suspension of operations of any unit or department of an establishment when
Ch
non-compliance with the law or implementing rules and regulations poses grave and imminent danger to the
health and safety of workers in the workplace. Within 24 hours, a hearing shall be conducted to determine
whether an order for the stoppage of work or suspension of operations shall be lifted or not. In case the violation is
attributable to the fault of the employer, he shall pay the employees concerned their salaries or wages during the
period of such stoppage of work or suspension of operation.
d. to require employers, by appropriate regulations, to keep and maintain such employment records as may be
necessary in aid of his visitorial and enforcement powers under the Labor Code.
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II.
SMALL MONEY CLAIMS CASES
1. JURISDICTION OVER CLAIMS NOT EXCEEDING P5,000.
The DOLE Regional Director has original jurisdiction over small money claims cases arising from labor standards
violations in the amount not exceeding P5,000.00 and not accompanied with a claim for reinstatement under Article 129 of the
Labor Code.
Article 129 contemplates the recovery of wages and other monetary claims and benefits, including legal interest, owing
to an employee or domestic worker or kasambahay, arising from employer-employee relations provided the claim does not
exceed P5,000.00.
2. REQUISITES FOR THE VALID EXERCISE OF JURISDICTION BY DOLE REGIONAL DIRECTORS UNDER ARTICLE 129.
The following requisites must all concur, to wit:
(1) The claim is presented by an employee or domestic worker or kasambahay;
(2) The claimant, no longer being employed, does not seek reinstatement; and
(3) The aggregate money claim of the employee or domestic worker or kasambahay does not exceed P5,000.00.
a r
In the absence of any of the aforesaid three (3) requisites, the Labor Arbiters have original and exclusive
B
jurisdiction over all claims arising from employer-employee relations, other than claims for employees’ compensation, social
s
security, PhilHealth and maternity benefits.
an
l e III.
b
CASES SUBMITTED TO REGIONAL DIRECTORS AND ASSISTANT REGIONAL
Ro h
DIRECTORS FOR VOLUNTARY ARBITRATION IN THEIR CAPACITY AS EX-OFFICIO
VOLUNTARY ARBITRATORS (EVAs)
an r C
1. JURISDICTION.
a
As EVAs, the DOLE Regional Directors and their Assistants have jurisdiction over the following cases:
Ch e s
B
(a) All grievances arising from the interpretation or implementation of the CBA;
a n
(b) All grievances arising from the interpretation or enforcement of company personnel policies which remain
l
n
unresolved after exhaustion of the grievance procedure;
b
(c) Cases referred to them by the DOLE Secretary under the DOLE’s Administrative Intervention for Dispute
o
ia r
Avoidance (AIDA) initiative (provided under DOLE Circular No. 1, Series of 2006); and
R
(d) Upon agreement of the parties, any other labor dispute may be submitted to the EVAs for voluntary arbitration.
an u
F.
Ba
DOLE SECRETARY
Ch
1. POWERS OF THE DOLE SECRETARY.
G s
The DOLE Secretary, being the head of the Department of Labor and Employment, is possessed of a number of
o
powers, some of which are mentioned in the syllabus, to wit:
1. Visitorial and enforcement powers;
t bl e
3. Assumption of jurisdiction;
l i
2. Power to suspend/effects of termination;
R o
se
4. Appellate jurisdiction; and
a n1.
5. Voluntary arbitration powers.
ar
VISITORIAL h B
Jo C s
AND ENFORCEMENT POWERS
e
.
1. THREE (3) KINDS OF POWER UNDER ARTICLE 128.
l
f b
Article 128 of the Labor Code, as amended, basically enunciates the three (3) kinds of power which the DOLE
Ro
Secretary and/or the Regional Directors, his duly authorized representatives, may exercise in connection with the administration
o
and enforcement of the labor standards provisions of the Labor Code and of any labor law, wage order or rules and regulations
r
issued pursuant thereto.
an a r
P
The three (3) kinds of power are as follows:
1) Visitorial power:
h B
2) Enforcement power: and
C es
l
3) Appellate power or power of review.
2. WHO EXERCISE THE POWERS.
ob
R
Nos. 1 and 2 above are exercised under the original jurisdiction of the DOLE Regional Directors.
n
This has been earlier discussed under the separate topic of “VII. PROCEDURE AND JURISDICTION, E. DOLE Regional
a
Directors, 1. Jurisdiction”, supra. Hence, the same will no longer be touched under the instant topical discussion.
Ch
The appellate power in No. 3 above may only be exercised by the DOLE Secretary in respect to any decision, order or
award issued by the DOLE Regional Directors.
3. NATURE OF THE VISITORIAL AND ENFORCEMENT POWERS.
The visitorial and enforcement powers granted to the DOLE Secretary and the DOLE Regional Directors who are his
duly authorized representatives, are quasi-judicial in nature.
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4. IT IS THE REGIONAL DIRECTORS WHO HAVE ORIGINAL JURISDICTION TO EXERCISE THE VISITORIAL AND
ENFORCEMENT POWERS UNDER ARTICLES 37, 128 AND 274.
In the instances contemplated under Articles 37, 128 and 274, it is the DOLE Regional Directors, the DOLE Secretary’s
duly authorized representatives commonly referred to in these three (3) articles, who have the original jurisdiction to exercise
the visitorial power granted therein.
5. THE ROLE OF THE DOLE SECRETARY IN THE EXERCISE OF VISITORIAL AND ENFORCEMENT POWERS IS
APPELLATE IN NATURE.
It is clear from the above disquisition that the original jurisdiction over the exercise of the visitorial and enforcement
powers belongs to the DOLE Regional Directors, as the duly authorized representatives of the DOLE Secretary.
The role of the DOLE Secretary is confined to the exercise of his appellate jurisdiction over the decisions, orders and
awards of the DOLE Regional Directors in cases brought before them for adjudication under Articles 128 and 274.
2.
POWER TO SUSPEND EFFECTS OF TERMINATION
1. GROUNDS.
a r
B
The DOLE Secretary may suspend the effects of termination pending resolution of the dispute in the event of a prima
s
an
facie finding by the appropriate official of the DOLE before whom the dispute is pending that:
l e
1. the termination may cause a serious labor dispute; and/or
b
2. the termination is in implementation of a mass lay-off.
Ro
2. RATIONALE FOR SUSPENDING THE EFFECTS OF TERMINATION.
C h
an r
The obvious purpose behind this rule is to bring the parties back to the status quo ante litem, that is, their state of
a
relationship prior to the termination. In this way, the workers will be litigating the issue of the validity or legality of their termination
Ch
wages while the litigation is on-going.
e s
B
a n
on more or less equal footing with the employer since they will be immediately reinstated and accordingly not be deprived of their
l
n
3. REINSTATEMENT PENDING RESOLUTION OF THE TERMINATION DISPUTE.
b
ia r
Suspension of the effects of termination will necessarily result in the immediate reinstatement of the terminated
o
employees. An order of reinstatement pending resolution of the case may thus be issued by the DOLE Secretary pursuant to this
R
u
power.
an
4. DISTINGUISHED FROM DOLE SECRETARY’S POWER OF ASSUMPTION OR CERTIFICATION IN NATIONAL INTEREST
Ba
Ch G
CASES.
a. Different power of the DOLE Secretary.
s
t o l e
This power of the DOLE Secretary granted under Article 277(b) should be distinguished from his power to assume or
b
i
certify labor disputes involving industries indispensable to the national interest under Article 263(g). The following distinctions
o
l
may be cited:
R
se
First, the exercise of the power to suspend the effects of termination involves only the issue of termination of
an r
employment which may cause a serious labor dispute or is in implementation of a mass lay-off; while the power to assume or
a
certify labor disputes is applicable to all labor disputes, irrespective of the grounds therefor, provided such labor disputes will
B
Jo Ch
cause or likely to cause strikes or lockouts in industries indispensable to the national interest.
e s
Second, the former requires the conduct of preliminary determination of the existence of prima facie evidence that the
. bl
termination may cause a serious labor dispute or is in implementation of a mass lay-off to be conducted by the appropriate
f
official of the DOLE before whom the termination dispute is pending; while the latter does not require such preliminary prima
Ro
facie determination. In fact, prior notice and hearing are not required before the DOLE Secretary may issue an assumption or
o
certification order.
r an r
Third, the “serious labor dispute” contemplated under the former may or may not involve a strike or lockout; while the
a
P
labor dispute referred to in the latter will cause or likely to cause a strike or lockout.
B
Ch
Fourth, the former may be exercised in cases of termination of employment for as long as any of the two (2) grounds
mentioned in Article 277(b) exists, irrespective of the nature of the business of the employer; while the latter may only be
exercised in industries indispensable to the national interest.
es
b
Fifth, the remedy under the former is immediate reinstatement pending resolution of the termination case; while in the l
o
latter, the remedy is the automatic return to work of the strikers or locked-out employees, if the strike or lock-out is on-going at
the time of the issuance of the assumption/certification order or the enjoining of the strike or lockout, if one has not taken place,
pending the resolution of the issues raised in the notice of strike or lockout.
R
an
3.
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ASSUMPTION OF JURISDICTION
The DOLE Secretary is granted under Article 263(g) of the Labor Code, the extraordinary police power of assuming
jurisdiction over a labor dispute which, in his opinion, will cause or likely to cause a strike or lockout in an industry indispensable
to the national interest, or the so-called “national interest” cases. Alternatively, he may certify the labor dispute to the NLRC for
compulsory arbitration.
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4.
APPELLATE JURISDICTION
I.
VARIOUS APPEALS TO THE DOLE SECRETARY
UNDER THE LABOR CODE AND APPLICABLE RULES
1. OFFICES FROM WHICH APPEALS MAY ORIGINATE.
Appeals to the DOLE Secretary may originate from any of the following offices:
(1) DOLE Regional Directors;
(2) Med-Arbiters;
(3) Director of the Bureau of Labor Relations (BLR); and
(4) Philippine Overseas Employment Administration (POEA).
2. CASES NOT APPEALABLE TO THE DOLE SECRETARY.
The following decisions, awards or orders are not appealable to the Office of the DOLE Secretary:
a r
(1) Those rendered by Labor Arbiters that are appealable to the Commission (NLRC) which has exclusive appellate
B
jurisdiction thereover;
s
(2) Those rendered by the Commission (NLRC) since they can be elevated directly to the CA by way of a Rule 65
an
certiorari petition;
l e
(3) Those rendered by the BLR Director in the exercise of his appellate jurisdiction since they can be brought directly
b
to the CA under Rule 65 certiorari petition;
Ro h
(4) Those rendered by DOLE Regional Directors under Article 129 of the Labor Code since they are appealable to the
C
NLRC;
an r
(5) Those issued by DOLE Regional Directors in their capacity as Ex-Officio Voluntary Arbitrators (EVAs) since they
a
can be brought directly to the CA under Rule 43 of the Rules of Court; and
Ch
B n
(6) Those rendered by Voluntary Arbitrators which are appealable directly to the CA under Rule 43 of the Rules of
Court.
e s II.
a
l
b n
APPEALS FROM DOLE REGIONAL DIRECTORS
o
ia r
1. CASES APPEALABLE TO DOLE SECRETARY.
R
Not all decisions, awards or orders rendered by the DOLE Regional Directors are appealable to the DOLE Secretary.
an u
Only those issued in the following cases are so appealable:
G Ba
(a) Labor standards enforcement cases under Article 128;
Ch
(b) Occupational safety and health violations; and
s
o e
(c) Complaints against private recruitment and placement agencies (PRPAs) for local employment.
l
t
2. CASES NOT APPEALABLE TO THE DOLE SECRETARY.
b
i
As earlier pointed out, the following cases decided by the DOLE Regional Directors are not appealable to the DOLE
o
l
Secretary but to some other agencies/tribunals indicated below:
R
se an r
(a) Decisions in small money claims cases arising from labor standards violations in the amount not exceeding
a
P5,000.00 and not accompanied with a claim for reinstatement under Article 129 are appealable to the NLRC;
B
Ch
(b) Decisions in cases submitted to DOLE Regional Directors for voluntary arbitration in their capacity as Ex-Officio
Jo s
Voluntary Arbitrators (EVAs) under Department Order No. 83-07, Series of 2007 may be elevated directly to the
e
Court of Appeals by way of a Rule 43 petition. This is so because the DOLE Regional Directors, in so deciding,
f. bl
are acting as Voluntary Arbitrators; hence, what should apply are the rules on appeal applicable to voluntary
arbitration.
o Ro
III.
APPEALS FROM DECISIONS OF
r an r
MEDIATORS-ARBITERS (MED-ARBITERS) AND BLR DIRECTOR
a
P
(NOTE: The discussion of this sub-topic is presented alongside the comments on the topic of “VIII. PROCEDURE
B
Ch
AND JURISDICTION, C. Bureau of Labor Relations – Med-Arbiters, 1. Jurisdiction (Original and Appellate)”,
supra)
es
V.
APPEALS FROM DECISIONS OF POEA
b l
1. CASES APPEALABLE TO THE DOLE SECRETARY.
R o
an
The decisions in the following cases rendered by the Philippine Overseas Employment Administration (POEA) in its
original jurisdiction are appealable to the DOLE Secretary:
Ch
(a) Recruitment violations and other related cases. - All cases which are administrative in character, involving or
arising out of violation of rules and regulations relating to licensing and registration of recruitment and
employment agencies or entities, including refund of fees collected from workers and violation of the conditions
for the issuance of license to recruit workers.
(b) Disciplinary action cases and other special cases which are administrative in character, involving employers,
principals, contracting partners and Filipino migrant workers.
It must be noted that the POEA ceased to have any jurisdiction over money claims of OFWs, or those arising out of
an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment
including claims for actual, moral, exemplary and other forms of damages. The jurisdiction over these claims was transferred to
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the Labor Arbiters of the NLRC by virtue of Section 10 of R.A. No. 8042, as amended. Hence, appeals therefrom may be
instituted to the Commission (NLRC).
5.
VOLUNTARY ARBITRATION POWERS
1. AIDA.
a. New rule on voluntary arbitration by the DOLE Secretary.
A new form of dispute settlement by the DOLE Secretary was introduced by DOLE Circular No. 1, Series of 2006.
Called Administrative Intervention for Dispute Avoidance (AIDA), this is a new administrative procedure for the voluntary
settlement of labor disputes in line with the objectives of R.A. No. 9285, Executive Order No. 523 and the mandate of the DOLE
to promote industrial peace.
b. Nature of administrative intervention by DOLE Secretary.
This recourse is separate from the established dispute resolution modes of mediation, conciliation and arbitration
a r
under the Labor Code, and is an alternative to other voluntary modes of dispute resolution such as the voluntary submission of
a dispute to the Regional Director for mediation, to the NCMB for preventive mediation, or to the intervention of a regional or
local tripartite peace council for the same purpose.
B
s
an
e
c. Parties who may request for DOLE Secretary’s intervention.
b l
Either or both the employer and the certified collective bargaining agent (or the representative of the employees where
there is no certified bargaining agent) may voluntarily bring to the Office of the DOLE Secretary, through a Request for
Ro
Intervention, any potential or ongoing dispute defined below.
C h
an r
d. Potential or on-going dispute.
A potential or on-going dispute refers to:
a
Ch
(a) a live and active dispute;
e s
(b) that may lead to a strike or lockout or to massive labor unrest; and
B
a n
l
n
(c) is not the subject of any complaint or notice of strike or lockout at the time a Request for Intervention is made.
b
o
ia r
2. VOLUNTARY ARBITRATION BY DOLE SECRETARY.
R
If the intervention through AIDA fails, either or both parties may avail themselves of the remedies provided under the
an u
Labor Code. Alternatively, the parties may submit their dispute to the Office of the DOLE Secretary for voluntary arbitration. Such
Ba
voluntary arbitration should be limited to the issues defined in the parties' submission to voluntary arbitration agreement and
Ch G
should be decided on the basis of the parties' position papers and submitted evidence. The Office of the DOLE Secretary is
s
mandated to resolve the dispute within sixty (60) days from the parties' submission of the dispute for resolution.
o
3. DOES THE DOLE SECRETARY ASSUME THE ROLE OF VOLUNTARY ARBITRATOR ONCE HE ASSUMES
JURISDICTION OVER A LABOR DISPUTE?
t bl e
1
l i R o
In the 2014 case of Philtranco Service Enterprises, Inc. v. Philtranco Workers Union-Association of Genuine
Labor Organizations (PWU-AGLO), this poser was answered in the negative. A notice of strike was filed by respondent union
se an r
which, after failure of conciliation and mediation by the NCMB, was referred by the Conciliator-Mediator to the Office of the DOLE
a
Secretary who thereby assumed jurisdiction over the labor dispute. The case was resolved by the Acting DOLE Secretary in
B
Ch
favor of respondent union. A motion for reconsideration was filed by petitioner company. The DOLE Secretary, however,
Jo s
declined to rule on the motion citing a DOLE regulation, applicable to voluntary arbitration, which provided that the Voluntary
e
Arbitrators’ decisions, orders, resolutions or awards shall not be the subject of motions for reconsideration. The DOLE Secretary
. bl
took the position that when he assumed jurisdiction over the labor dispute, he was acting as a Voluntary Arbitrator. Petitioner
f
subsequently filed a Rule 65 certiorari petition with the CA. The CA, however, dismissed petitioner company’s Rule 65 certiorari
Ro
petition on the ground, among others, that the decision of the DOLE Secretary, having been rendered by him in his capacity as
o
Voluntary Arbitrator, is not subject to a Rule 65 certiorari petition but to a Rule 43 petition for review which properly covers
r
decisions of Voluntary Arbitrators.
an a r
P
Before the Supreme Court, petitioner asserted that, contrary to the CA’s ruling, the case is not a simple voluntary
B
Ch
arbitration case. The character of the case, which involves an impending strike by petitioner’s employees; the nature of
s
petitioner’s business as a public transportation company, which is imbued with public interest; the merits of its case; and the
assumption of jurisdiction by the DOLE Secretary – all these circumstances removed the case from the coverage of Article 262,
and instead placed it under Article 263, of the Labor Code. For its part, respondent union argued that the DOLE Secretary
l e
decided the assumed case in his capacity as Voluntary Arbitrator; thus, his decision, being that of a Voluntary Arbitrator, is only
assailable via a petition for review under Rule 43.
ob
The Supreme Court, however, pronounced that:
R
an
“It cannot be said that in taking cognizance of NCMB-NCR CASE No. NS-02-028-07, the Secretary of Labor did so in a
limited capacity, i.e., as a voluntary arbitrator. The fact is undeniable that by referring the case to the Secretary of Labor,
Ch
Conciliator-Mediator Aglibut conceded that the case fell within the coverage of Article 263 of the Labor Code; the impending
strike in Philtranco, a public transportation company whose business is imbued with public interest, required that the Secretary
of Labor assume jurisdiction over the case, which he in fact did. By assuming jurisdiction over the case, the provisions of
Article 263 became applicable, any representation to the contrary or that he is deciding the case in his capacity as a voluntary
arbitrator notwithstanding.”
Consequently, the Supreme Court reversed and set aside the CA ruling and reinstated the case and directed the CA
“to resolve the same with deliberate dispatch.”
1 G.R. No. 180962, Feb. 26, 2014. Although this case involves a decision of the DOLE Secretary, the principle enunciated herein equally applies to the NLRC.
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G.
GRIEVANCE MACHINERY
AND VOLUNTARY ARBITRATION
1.
SUBJECT MATTER OF GRIEVANCE
1. GRIEVANCE OR GRIEVABLE ISSUE.
A “grievance” or “grievable issue” is any question raised by either the employer or the union regarding any of the
following issues or controversies:
1. The interpretation or application of the CBA;
2. The interpretation or enforcement of company personnel policies; or
3. Violation of any provisions of the CBA or company personnel policies.
4.
2. VALIDITY AND BINDING EFFECT OF DECISIONS OF GRIEVANCE COMMITTEE.
by whatever disposition the latter may render thereon.

a r
A member of the bargaining union who brought his grievable issue for resolution by the Grievance Committee is bound
B
s
an
ELEVATION OF GRIEVANCE TO VOLUNTARY ARBITRATION
1. UNRESOLVED GRIEVANCES.
l e
b
All grievances submitted to the grievance machinery which are not settled within seven (7) calendar days from the date
Ro h
of their submission for resolution should automatically be referred to voluntary arbitration prescribed in the CBA.
C
The various internal procedural steps or stages of resolving grievances under the grievance machinery in a CBA
an ar
should be fully exhausted before resort to voluntary arbitration may be made. The 7-calendar day period is usually reckoned from
B n
the date of their submission for resolution to the last step of the internal grievance machinery. Simply stated, only after
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exhausting all the internal procedures and only after the lapse of this period that unsettled or unadjusted grievances should
e s
automatically be referred to voluntary arbitration enunciated in the CBA.
a
l
n
2. A PARTY IS NOT ALLOWED TO GO DIRECTLY TO COURT IN DISREGARD OF VOLUNTARY ARBITRATION AFTER
b
ia r
DECISION IS RENDERED BY GRIEVANCE COMMITTEE.
R o
Before a party is allowed to seek the intervention of the court, it is a precondition that he should have availed of all the
u
means of administrative processes afforded him. Hence, if a remedy within the administrative machinery can still be resorted to
an Ba
by giving the administrative officer concerned every opportunity to decide on a matter that comes within his jurisdiction, then
G
such remedy should be exhausted first before the court’s judicial power can be sought. The premature invocation of the court’s
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judicial intervention is fatal to one’s cause of action.” Indeed, the underlying principle of the rule on exhaustion of
s
o e
administrative remedies rests on the presumption that when the administrative body, or grievance machinery, is afforded a
l
chance to pass upon the matter, it will decide the same correctly.
i t ARBITRATOR
2.
o b
l an
VOLUNTARY
R
e
1. VOLUNTARY ARBITRATION.
r
o s h
a
“Voluntary arbitration” refers to the mode of settling labor-management disputes in which the parties select a
B
competent, trained and impartial third person who is tasked to decide on the merits of the case and whose decision is final and
s
J C
executory. It is a third-party settlement of a labor dispute involving the mutual consent by the representatives of the employer and
e
.
the labor union involved in a labor dispute to submit their case for arbitration.
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2. VOLUNTARY ARBITRATOR.
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a. Who is a Voluntary Arbitrator?
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A “Voluntary Arbitrator” refers to:
a
P
(1) any person who has been accredited by the National Conciliation and Mediation Board (“NCMB” or “Board”) as
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such; or
(2) any person named or designated in the CBA by the parties as their Voluntary Arbitrator; or
(3) one chosen by the parties with or without the assistance of the NCMB, pursuant to a selection procedure agreed
es
upon in the CBA; or
b l
(4) one appointed by the NCMB in case either of the parties to the CBA refuses to submit to voluntary arbitration.
This term includes a panel of Voluntary Arbitrators.
R o
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3. VOLUNTARY ARBITRATOR ACTS IN QUASI-JUDICIAL CAPACITY.
Ch
Although not a part of a government unit or a personnel of the Department of Labor and Employment, a Voluntary
Arbitrator, by the nature of his functions, acts in a quasi-judicial capacity. He is a means by which government acts, or by which a
certain government act or function is performed. He performs a state function pursuant to a governmental power delegated to
him under the Labor Code. The landmark case of Luzon Development Bank v. Association of Luzon Development Bank
1
Employees, clearly declared that a Voluntary Arbitrator, whether acting solely or in a panel, enjoys in law the status of
a quasi-judicial agency.
1 G.R. No. 120319, Oct. 6, 1995.

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2015 BAR EXAMS

(a)
JURISDICTION
1. ORIGINAL AND EXCLUSIVE JURISDICTION.
a. In general.
The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have exclusive and original jurisdiction over the
following cases:
(1) Unresolved grievances arising from the interpretation or implementation of the collective bargaining agreement
(CBA).
(2) Unresolved grievances arising from the interpretation or enforcement of company personnel policies.
(3) Violations of the CBA which are not gross in character.
(4) Other labor disputes, including unfair labor practices and bargaining deadlocks, upon agreement of the parties.
(5) National interest cases.
(6) Wage distortion issues arising from the application of any wage orders in organized establishments.
(7) Unresolved grievances arising from the interpretation and implementation of the Productivity Incentive Programs
under R.A. No. 6971.
a r
B
b. Rights disputes.
s
Nos. 1, 2 and 3 above, which are provided for under Article 261 of the Labor Code, are commonly known as “rights
an
l e
disputes.” This kind of disputes contemplates the existence of a CBA already concluded or, at any rate, a situation in which no
effort is made to bring about a formal change in its terms or to create a new one. The dispute relates either to the meaning or
b
proper application of a particular provision therein with reference to a specific situation or to an omitted case. In the latter event,
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the claim is founded upon some incident of the employment relation or asserted one, independent of those covered by the
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collective agreement. In either case, the claim is to rights accrued and not merely to new ones created for the future.
an ar
c. Interest disputes.
Ch
B n
Bargaining deadlocks are often referred to as “interest disputes.” This kind of disputes relates to disputes over the
s a
formation of collective agreements or efforts to secure them. They arise where there is no such agreement or where it is sought
e
to change the terms of one and therefore the issue is not whether an existing agreement controls the controversy. They look to
l
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the acquisition of rights for the future, not to assertion of rights claimed to have vested in the past.
o
ia r
I.
R
III.
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JURISDICTION OVER OTHER LABOR DISPUTES
Ba
Under Article 262 of the Labor Code, upon agreement of the parties, the Voluntary Arbitrator or panel of Voluntary
Ch G
Arbitrators may also hear and decide all other labor disputes, including unfair labor practices and bargaining deadlocks.
s
For this purpose, before or at any stage of the compulsory arbitration process, parties to a labor dispute may agree to submit
o e
their case to voluntary arbitration.
l
t b
IV.
i
JURISDICTION OVER NATIONAL INTEREST CASES
o
l R
Article 263(g) of the Labor Code which involves the DOLE Secretary’s power of assumption of jurisdiction or
se
certification to the NLRC of labor disputes affecting industries indispensable to the national interest, also provides that “[b]efore
an ar
or at any stage of the compulsory arbitration process, the parties may opt to submit their dispute to voluntary
B
arbitration.”
Jo Ch
This means that even if the case has already been assumed by the DOLE Secretary or certified to the NLRC for
e s
compulsory arbitration, or even during its pendency therewith, the parties thereto may still withdraw the case from the DOLE
. bl
Secretary or NLRC, as the case may be, and submit it to a Voluntary Arbitrator for voluntary arbitration purposes.
f
V.
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JURISDICTION OVER WAGE DISTORTION CASES
o
 Jurisdiction over wage distortion cases depends on whether the establishment is organized or unorganized.
r an
In organized establishments, the employer and the union are required to negotiate to correct the wage distortion.
a r
P
Any dispute arising from such wage distortion should be resolved through the grievance procedure under the CBA and if it
B
Ch
remains unresolved, through voluntary arbitration.
In unorganized establishments, where there are no CBAs or recognized or certified collective bargaining unions, the
es
l
jurisdiction is with the Labor Arbiter.
VI.
EXERCISE OF JURISDICTION
ob
1. HOW VOLUNTARY ARBITRATOR ACQUIRES JURISDICTION.
R
an
The Voluntary Arbitrator or panel of Voluntary Arbitrators shall exercise jurisdiction over a specific case only under the
following:
Ch
(1) Upon receipt of a Submission Agreement duly signed by both parties;
(2) Upon receipt of a Notice to Arbitrate when there is refusal to arbitrate by one party;
(3) Upon receipt of an appointment or designation as Voluntary Arbitrator by the NCMB (Board) in either of the
following circumstances:
(3.1.) In the event that the parties failed to select a Voluntary Arbitrator; or
(3.2.) In the absence of a named Voluntary Arbitrator in the CBA and the party upon whom the Notice to Arbitrate
is served does not favorably reply within seven (7) days from receipt of such notice.
129
2015 BAR EXAMS

2. HOW INITIATED.
Based on the foregoing discussion, an arbitration may be initiated either by way of:
(1) A Submission Agreement; or
(2) A Demand or Notice to Arbitrate invoking the arbitration clause in the CBA; or
(3) An Appointment from the NCMB.
A “Submission Agreement” refers to a written agreement by the parties submitting their case for arbitration, containing
a statement of the issues, the name of their chosen Voluntary Arbitrator and a stipulation and an undertaking to abide by and
comply with the resolution that may be rendered therein, including the cost of arbitration.
A “Notice to Arbitrate” refers to a formal demand made by one party to the other for the arbitration of a particular
dispute in the event of refusal by one party in a CBA to submit the same to arbitration
3. SOME PRINCIPLES.
1) Cases cognizable by Voluntary Arbitrators in their original jurisdiction but filed with Labor Arbiters, DOLE
Regional Offices or NCMB should be disposed of by referring them to the Voluntary Arbitrators or panel of
r
Voluntary Arbitrators mutually chosen by the parties.
a
2)
B
Cases cognizable by Voluntary Arbitrators but filed with regular courts should be dismissed.
3)
s
THE WELL-ENTRENCHED RULE IS THAT WHEN A CASE DOES NOT INVOLVE THE PARTIES TO A CBA – THE
an
l e
EMPLOYER AND THE BARGAINING UNION - IT IS NOT SUBJECT TO VOLUNTARY ARBITRATION. While
individual or group of employees, without the participation of the union, are granted the right to bring
b
grievance directly to the employer, they cannot submit the same grievance, if unresolved by the employer, for
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voluntary arbitration without the union’s approval and participation. The reason is that it is the union which is
C
the party to the CBA, and not the individual or group of employees. - This rule was lately affirmed in the 2009
an r
case of Tabigue v. International Copra Export Corporation. Pursuant to Article 260 of the Labor Code, the parties to
a
a CBA shall name or designate their respective representatives to the grievance machinery and if the grievance is
Ch
B n
unsettled in that level, it shall automatically be referred to the voluntary arbitrators designated in advance by parties to
s a
a CBA. Consequently only disputes involving the union and the company shall be referred to the grievance
machinery or voluntary arbitrators.”
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l (b)
bPROCEDURE n
R o
EXECUTION PROCEEDINGS
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IN VOLUNTARY ARBITRATION CASES
G Ba
Ch
1. PROCEDURAL RULES IN THE ENFORCEMENT OF WRIT OF EXECUTION.
s
o e
In the enforcement of a writ of execution, the Sheriff or other authorized officer should be guided by the Procedural
l
t
Guidelines in the Execution of Voluntary Arbitration Awards/Decisions. These Guidelines should be followed in the execution of
b
i
the awards or decision of Voluntary Arbitrators or panel of Voluntary Arbitrators. Other rules that may be pertinently observed
and followed are the following:
o
l R
se
(1) 2012 NLRC Sheriffs’ Manual on Execution of Judgment;
an r
(2) Memorandum of Agreement between the NLRC and the NCMB dated July 26, 1996; and
(3) Revised Rules of Court, as amended, in the absence of applicable rules.
B a
Jo Ch
2. EXECUTION MOTU PROPRIO OR UPON MERE MOTION WITHIN FIVE (5) YEARS FROM FINALITY OF DECISION.
e s
The Voluntary Arbitrator or panel of Voluntary Arbitrators may, motu proprio or on motion of any interested party, issue
. bl
a writ of execution on a judgment within five (5) years from the date it becomes final and executory.
f
3. WHEN LABOR ARBITER MAY ISSUE THE WRIT OF EXECUTION.
o Ro
In case the Voluntary Arbitrator or panel of Voluntary Arbitrators who rendered and issued the decision, order or award
is, for any reason, absent or incapacitated, the Labor Arbiter in the region where the movant resides, may issue the writ of
r an r
execution. But unlike the Voluntary Arbitrator or panel of Voluntary Arbitrators who issued the decision, order or award, the
a
P
Labor Arbiter cannot issue such writ motu proprio but only upon motion of any interested party.
B
Ch
4. PERSONS WHO MAY ENFORCE THE WRIT OF EXECUTION.
Any of the following persons may be required to enforce the writ of execution:
es
(1) The Sheriff of the Commission (NLRC);
(2) A duly deputized officer;
b l
(3) A Special Sheriff;
(4) The Sheriff of the regular courts; or
R o
an
(5) Any public official whom the parties may designate in the submission agreement to execute the final decision, order
or award.
Ch
(c)
REMEDIES
1. RELIEFS AND REMEDIES THAT MAY BE GRANTED BY VOLUNTARY ARBITRATORS.
Besides the procedural remedies discussed above, the Voluntary Arbitrator or panel of Voluntary Arbitrators may grant
the same reliefs and remedies granted by Labor Arbiters under Article 279 of the Labor Code, such as:
(1) In illegal dismissal cases:
(a) Actual reinstatement;
(b) Separation pay in lieu of reinstatement, in case reinstatement becomes impossible, non-feasible or
impractical;
(c) Full backwages;
130
2015 BAR EXAMS

(d) Moral and exemplary damages; and

(e) Attorney’s fees.
(2) Monetary awards in monetary claims cases in which case, the decision should specify the amount granted and
the formula used in the computation thereof.
H.
COURT OF APPEALS
1.
RULE 65, RULES OF COURT
1. RULE 65 PETITION FOR CERTIORARI, THE ONLY MODE OF ELEVATING A LABOR CASE TO THE COURT OF
APPEALS.
The only mode by which a labor case decided by any of the following labor authorities/tribunals may reach the Court of
Appeals is through a Rule 65 petition for certiorari.
(a) the DOLE Secretary;
(b) the Commission (NLRC); and
a r
(c) the Director of the Bureau of Labor Relations (BLR) in cases decided by him in his appellate jurisdiction (as
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distinguished from those he decides in his original jurisdiction which are appealable to the DOLE Secretary).
s
an
e
The remedy of ordinary appeal to the Court of Appeals is not available from their decisions, orders or awards. The
2. THE ONLY EXCEPTION.

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reason for this rule is that their decisions, orders or awards are final and executory and therefore inappealable.
Ro
The only exception to the foregoing rule is in the case of decisions, orders or awards issued by the Voluntary
Arbitrator or panel of Voluntary Arbitrators which may be elevated to the Court of Appeals by way of an ordinary appeal
C h
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under a Rule 43 petition for review.
a
B n
3. FILING OF MOTION FOR RECONSIDERATION OF THE DECISION OF THE DOLE SECRETARY, THE COMMISSION
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(NLRC) OR THE BLR DIRECTOR, A PRE-REQUISITE TO FILING OF RULE 65 PETITION FOR CERTIORARI.
e s
The rule on the filing of a Motion for Reconsideration of the decision of the DOLE Secretary, the NLRC and the BLR
a
l
n
Director is mandatory and jurisdictional. Failure to comply therewith would result in the dismissal of the Rule 65 certiorari
b
ia r
petition. Jurisprudence abounds enunciating the rule that a motion for reconsideration is a pre-requisite for the filing of a special
civil action for certiorari.
R o
The reason for this rule is that in labor cases, a motion for reconsideration is the plain and adequate remedy
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from an adverse decision of the DOLE Secretary, the NLRC and the BLR Director.
G Ba
 THE PHILTRANCO DOCTRINE: a motion for reconsideration should be filed even though it is not required or
Ch
even prohibited by the concerned government office. This was the rule enunciated in the 2014 case of Philtranco
s
Service Enterprises, Inc. v. Philtranco Workers Union-Association of Genuine Labor Organizations (PWU-
o l e
1
AGLO). Thus, while a government office may prohibit altogether the filing of a motion for reconsideration with respect
t b
to its decisions or orders, the fact remains that certiorari inherently requires the filing of a motion for reconsideration
i o
which is the tangible representation of the opportunity given to the office to correct itself. Unless it is filed, there could
l
be no occasion to rectify. Worse, the remedy of certiorari would be unavailing. Simply put, regardless of the
R
se
proscription against the filing of a motion for reconsideration, the same may be filed on the assumption that rectification
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of the decision or order must be obtained and before a petition for certiorari may be instituted.
B a
Jo Ch
4. CERTIORARI PETITION MAY BE FILED EVEN IF THE DECISION OF THE DOLE SECRETARY, THE COMMISSION
(NLRC), OR THE BLR DIRECTOR HAS ALREADY BECOME FINAL AND EXECUTORY.
e s
. bl
This rule applies to the decisions rendered by the DOLE Secretary, the NLRC or the BLR Director (in cases which he
f
decided in his appellate jurisdiction).
o Ro
If the CA grants the petition and nullifies their decisions on the ground of grave abuse of discretion amounting to
excess or lack of jurisdiction, such decisions are, in contemplation of law, null and void ab initio; hence, they never became final
P r
and executory.
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JUDICIAL REVIEW OF DECISIONS
s
OF VOLUNTARY ARBITRATORS
l e
b
1. DECISIONS, FINAL AND EXECUTORY.
o
As a general rule, decisions or awards of Voluntary Arbitrators are final, inappealable and executory after ten (10)
R
calendar days from receipt of a copy thereof by the parties.
an
2. ORDINARY APPEAL UNDER RULE 43 OF THE 1997 RULES OF CIVIL PROCEDURE – VOLUNTARY ARBITRATORS
ARE OF THE SAME LEVEL AS RTC JUDGES.
Ch
Being a quasi-judicial agency, the decisions and awards of a Voluntary Arbitrator are appealable by way of a petition
for review to the Court of Appeals under Revised Administrative Circular No. 1-95 which provides for a uniform procedure for
appellate review of all adjudications of quasi-judicial entities and which is now embodied in Section 1, Rule 43 of the 1997 Rules
of Civil Procedure.
2
The ruling in Luzon Development Bank v. Association of Luzon Development Bank Employees, in effect,
equates the decisions or awards of the Voluntary Arbitrator to those of the Regional Trial Court (RTC). Hence, in a petition for
certiorari from the awards or decisions of the Voluntary Arbitrator, the Court of Appeals has concurrent jurisdiction with the
Supreme Court.
1 G.R. No. 180962, Feb. 26, 2014. Although this case involves a decision of the DOLE Secretary, the principle enunciated herein equally applies to the NLRC.
2 G.R. No. 120319, October 6, 1995.
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2015 BAR EXAMS

1
In Alcantara, Jr. v. CA, it was held that Luzon Development Bank is still a good law.
3. PERIOD OF APPEAL – 15 DAYS.
Rule 43 of the Rules of Court requires that the petition for review to be taken to the Court of Appeals should be filed
within fifteen (15) days from notice of the award, judgment or final order or resolution of the Voluntary Arbitrator.
I.
SUPREME COURT
1.
RULE 45, RULES OF COURT
1. RULE 45 PETITION FOR REVIEW ON CERTIORARI, THE ONLY MODE BY WHICH A LABOR CASE MAY REACH THE
SUPREME COURT.
Since the Court of Appeals has jurisdiction over the petition for certiorari under Rule 65 that may be filed before it from
the decisions of the NLRC or the DOLE Secretary or the BLR Director (in cases decided by him in his appellate jurisdiction), any
alleged errors committed by it in the exercise of its jurisdiction would be errors of judgment which are reviewable by means of a
r
timely appeal to the Supreme Court and not by a special civil action of certiorari.
a
B
If the aggrieved party fails to do so within the reglementary period and the decision accordingly becomes final and
executory, he cannot avail himself of the writ of certiorari, his predicament being the effect of his deliberate inaction. A petition
s
an
e
for certiorari under Rule 65 cannot be a substitute for a lost appeal under Rule 45; hence, it should be dismissed.
b l
2. THE NEYPES DOCTRINE (FRESH PERIOD RULE) - FRESH PERIOD FROM DENIAL OF MOTION FOR
RECONSIDERATION.
Ro
2
In the 2013 case of Elizabeth Gagui v. Dejero, petitioner successively filed two Motions for Reconsideration of the
C h
an r
CA’s decision but both were denied. Petitioner elevated the case to the Supreme Court under Rule 45. In their comment,
a
respondents alleged that the instant petition had been filed 15 days after the prescriptive period of appeal under Section 2, Rule
Ch
B n
45 of the Rules of Court. In her reply, petitioner countered that she has a fresh period of 15 days from the date she received the
s a
Resolution of the CA to file the instant Rule 45 petition. In affirming the contention of petitioner, the Supreme Court cited the en
e
3
banc ruling in the case of Neypes v. CA which standardized the appeal periods, thus:
l
b n
“To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal their cases, the
ia r
Court deems it practical to allow a fresh period of 15 days within which to file the notice of appeal in the Regional Trial Court,
o
counted from receipt of the order dismissing a motion for a new trial or motion for reconsideration.
R
u
“Henceforth, this ‘fresh period rule’ shall also apply to Rule 40 governing appeals from the Municipal Trial Courts to the
an
Regional Trial Courts; Rule 42 on petitions for review from the Regional Trial Courts to the Court of Appeals; Rule 43 on
G Ba
appeals from quasi-judicial agencies to the Court of Appeals and Rule 45 governing appeals by certiorari to the
Ch
Supreme Court. The new rule aims to regiment or make the appeal period uniform, to be counted from receipt of the order
s
denying the motion for new trial, motion for reconsideration (whether full or partial) or any final order or resolution.”
o l e
Consequently, since petitioner in Gagui received the CA Resolution denying her two Motions for Reconsideration only
t b
on 16 March 2011, she had another 15 days within which to file her Petition, or until 31 March 2011. This Petition, filed on 30
i
March 2011, fell within the prescribed 15-day period.
l R o
se an r
J.
PRESCRIPTION OF ACTIONS
B a
Jo Ch
1. MONEY CLAIMS CASES.
e s
.
a. Prescriptive period is three (3) years under Article 291 of the Labor Code. - The prescriptive period of all money
bl
claims and benefits arising from employer-employee relations is 3 years from the time the cause of action accrued;
f
otherwise, they shall be forever barred.
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b. All other money claims of workers prescribe in 3 years. - Article 291 contemplates all money claims arising from
r
employer-employee relationship, including:
an a r
1. Money claims arising from the CBA.
P 2. Incremental proceeds from tuition increases.

3. Money claims of Overseas Filipino Workers (OFWs).
Ch s
B
e
4
Note must be made that in the 2010 case of Southeastern Shipping v. Navarra, Jr., the 1-year prescriptive period in
Section 28 of POEA-SEC was declared null and void. The reason is that Article 291 of the Labor Code is the law governing
the prescription of money claims of seafarers, a class of overseas contract workers. This law prevails over said Section 28.
b l
2. ILLEGAL DISMISSAL CASES.
R o
an
a. Legal basis is not Article 291 of the Labor Code but Article 1146 of the Civil Code. - The 3-year prescriptive
period in Article 291 solely applies to money claims but not to illegal dismissal cases which are not in the nature of
Ch
money claims. The prescriptive period of illegal dismissal cases is 4 years under Article 1146 of the Civil Code.
3. UNFAIR LABOR PRACTICE (ULP) CASES.
a. Prescriptive period of ULP cases is 1 year (Article 290, Labor Code). - The prescriptive period for all complaints
involving unfair labor practices is one (1) year from the time the acts complained of were committed; otherwise,
they shall be forever barred.
1 G.R. No. 143397, Aug. 6, 2002.

2 G.R. No. 196036, Oct. 23, 2013.
3 G.R. No. 141524, Sept. 14, 2005.
4 G.R. No. 167678, June 22, 2010.
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2015 BAR EXAMS

b. Pre-requisite for prosecution of criminal cases. - Before a criminal action for ULP may be filed, it is a condition
sine qua non that a final judgment finding that an unfair labor practice act was committed by the respondent should
first be secured or obtained in the labor case initiated before the Labor Arbiter or the Voluntary Arbitrator, as the
case may be. Final judgment is one that finally disposes of the action or proceeding. For instance, if the remedy of
appeal is available but no appeal is made, then, the judgment is deemed final and executory. If an appeal is made,
then the final judgment rendered by the last tribunal, say the Supreme Court, to which the case was elevated
should be the reckoning factor.
c. Interruption of prescriptive period of offenses. - As far as ULP cases are concerned, the running of the one (1)
year prescriptive period is interrupted during the pendency of the labor proceeding.
d. Evidentiary value of the final judgment in the labor case. - In ULP cases, the final judgment in the labor case
cannot be presented as evidence of the facts proven therein or as evidence of the guilt of the respondent therein.
Its evidentiary or probative value is confined merely in proving the fact of compliance with the condition sine qua
non prescribed by law, i.e., that a final judgment has been secured in the labor proceeding finding that an unfair
labor practice act was in fact committed by the respondent.
4. OFFENSES PENALIZED UNDER THE LABOR CODE AND ITS IMPLEMENTING RULES AND REGULATIONS (IRR).
r
a. Prescriptive period is 3 years (Article 290, Labor Code). - The prescriptive period of all criminal offenses
a
penalized under the Labor Code and the Rules to Implement the Labor Code is three (3) years from the time of
B
commission thereof.
s
b. Consequence of non-compliance with prescriptive period under Article 290. - Failure to initiate or file the
an
l e
criminal action or complaint within the prescriptive period shall forever bar such action.
c. Illegal dismissal is not an “offense” under Article 290. - The act of the employer in dismissing an employee
b
without cause, although a violation of the Labor Code and its implementing rules, does not amount to an “offense” as
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this term is understood and contemplated under Article 290.
C
5. ILLEGAL RECRUITMENT CASES.
an r
a. Simple illegal recruitment cases. – The prescriptive period is five (5) years.
a
B n
b. Illegal recruitment cases involving economic sabotage. – The prescriptive period is twenty (20) years.
Ch s a
6. ACTIONS INVOLVING UNION FUNDS.
e
A complaint or petition for audit or examination of funds and books of accounts prescribes within three (3) years:
l
n
(a) from the date of submission of the annual financial report to the DOLE; or
b
ia r
(b) from the date the same should have been submitted as required by law, whichever comes earlier.
o
It should be noted, however, that this provision on the prescriptive period applies only to a legitimate labor organization
R
u
which has submitted the financial report required under the Labor Code.
an Ba
7. CLAIMS FOR SSS BENEFITS.
Ch G
a. Action against employer.
s
The right to institute the necessary action against the employer for non-remittance of contributions may be commenced
o e
within twenty (20) years:
l
t
(1) from the time the delinquency is known; or
b
i
(2) from the time the assessment is made by the SSS; or
o
l
(3) from the time the benefit accrues, as the case may be.
R
se
b. Action for disability claims.
an r
The prescriptive period in the filing of disability benefit claim is ten (10) years from the date of occurrence of disability.
8. CLAIMS FOR GSIS BENEFITS.
B a
Jo Ch s
Claims for benefits, except for life and retirement, prescribe after four (4) years from the date of contingency.
e
f. bl
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P r ------------oOo------------ a
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B a r
Ch es
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R o
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Ch
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ChanRobles Internet Bar Review : ChanRobles Professional Review, Inc.

Prof. Joselito Guianan Chan

2015 BAR EXAMS

P r Article 4 of the Labor Code states:

2015 BAR EXAMS

2015 BAR EXAMS

2015 BAR EXAMS

LICENSE VS. AUTHORITY

2015 BAR EXAMS

 What is an “authority” for overseas employment?

P r the other hand, the former must prevail.

2015 BAR EXAMS

 What is meant by this theory?

1 G.R. No. 196036, Oct. 23, 2013.

2015 BAR EXAMS

1 G.R. No. 138193, March 5, 2003.

2015 BAR EXAMS

 What are the reliefs to which OFWs are entitled?

1 G.R. No. 167614, March 24, 2009.

2015 BAR EXAMS

1 G.R. No. 81510, March 14, 1990.

2015 BAR EXAMS

 How should compensation be made under a valid CWW?

2015 BAR EXAMS

 Is meal break compensable?

sOVERTIME OVERTIME PAY

2015 BAR EXAMS

• Can overtime pay be waived?

NIGHT WORK (R.A. NO. 10151),

2015 BAR EXAMS

CONTRACT FOR PIECE WORK

WAGE VS. SALARY

2015 BAR EXAMS

2015 BAR EXAMS

• What are the categories of workers paid by results?

1 G.R. No. 121004, Jan. 28, 1998.

2015 BAR EXAMS

1 G.R. No. 181806, March 12, 2014.

2015 BAR EXAMS

2. THE ACT SHOULD BE DONE CONSISTENTLY AND INTENTIONALLY.

FACILITIES VS. SUPPLEMENTS

2015 BAR EXAMS

• What are supplements?

2015 BAR EXAMS

• What are the factors/divisors in computing benefits and wage deductions?

REST PERIODS Article 91. Right to weekly rest day.

2015 BAR EXAMS

What are REGULAR and SPECIAL HOLIDAYS?

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c. Special Holiday for all schools

l e HOLIDAY PAY/PREMIUM PAY OF

2015 BAR EXAMS

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• What is the covered total number of deliveries?

2015 BAR EXAMS

• What is the requirement for its entitlement?

SPECIAL LEAVE BENEFIT FOR WOMEN

R oSERVICE restaurants and similar establishments shall be distributed at the rate of

2015 BAR EXAMS

THIRTEENTH MONTH PAY

2015 BAR EXAMS

r oWho are excluded?

2015 BAR EXAMS