The Labor Code and The Dynamics Between Employees

and Employers

ATTY. J. OSWALD B. LORENZO

Former Labor Arbiter, NCR-NLRC; Professor of Law and Pre-Bar Reviewer; President, The Center for Law
Advocacy and Specialized Studies (CLASS); former Assistant Secretary, DENR and POEA Director for
Licensing and Past President, National Association of Labor Arbiters (NALA), Inc.
 BAR ITEM NO. 1
PROTECTION TO LABOR CLAUSE
v  BASIC PRINCIPLES ON PROTECTION TO LABOR
v  The State shall afford protection to labor, promote full employment, ensure equal
work opportunities regardless of sex, race or creed and regulate the relations
between workers and employers.
v  The State shall assure the rights of workers to self-organization, collective
bargaining, security of tenure, and just and humane conditions of work.
v  Labor contracts are not ordinary contracts as the relation between capital and
labor is impressed with public interest.
 BAR ITEM NO. 2
GENERAL PRINCIPLES
v  2.1. Art. 4 – Construction in Favor of Labor clause
v  2.2. Test of a Valid Rule of Regulation
v  2.3. ONAR/UP LAW CENTER should be furnished rules and regulation
issue
v  2.4. Substantive Law vs. IRR/Rules or Regulations
v  2.5. Labor Code applies to all workers, whether agricultural or non-
agricultural
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v  AREAS OF JURISDICTIONAL CONFLICT

v  Labor Arbiter vs. Civil Service Commission (Line Agency Employees)
v  Labor Arbiter vs. Civil Service Commission (GOCC’s with Original
Charter)
v  Labor Arbiter vs. Civil Service Commission (GOCC’s without Original
Charter)
v  Corporate Officers (Labor Arbiter vs. RTC)
v  Employees of International/Specialized Agencies
v  Reasonable Causal Connection of Money Claims (LA vs. RTC)
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OVERSEAS EMPLOYMENT
v  Illegal Recruitment; Kinds of and Penalties
v  Marsaman and Skipper Cases abandoned by
Serrano vs. Gallant Maritime and SAMEER
v  Venue of Illegal Recruitment Cases
v  Solidary Liability
v  Jurisprudence of Note
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WORKING CONDITIONS

v  Coverage and Exclusions

v  NASURECO CASE ON SUPERVISORS
v  Concepts: Management Prerogative and Employer-Employee
Relationship
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VITAL MATTERS IN BOOK III

v  Basic Labor Benefits
v  Hours of Work and Overtime and the Non-Offsetting Rule
v  Non-Interference in the Disposal of Wages
v  Payment thru ATM and Checks
v  Minors; Househelpers and Home Workers
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JURISDICTION OF THE NLRC DIVISIONS

v  Original - Art. 225 (e) Injunction /

Temporary Restraining Order (TRO);
Art. 225(d) Contempt; Certified Cases

v  Appellate - Art. 224 (b), Labor Code

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JURISDICTION OF THE LABOR ARBITER

Art. 224. JURISDICTION OF LABOR ARBITERS AND THE COMMISSION

– (a) Except as otherwise provided under this Code, the Labor Arbiters shall
have original and exclusive jurisdiction to hear and decide within thirty (30)
calendar days after the submission of the case by the parties for decision
without extension, even in the absence of stenographic notes, the following
cases involving all workers, whether agricultural or non-agricultural:
v  Unfair labor practice cases;

v  Termination disputes;

v  If accompanied with a claim for reinstatement, those cases that workers
may file involving wages, rates of pay, hours of work and other terms and
conditions of employment;

v  Claims for actual, moral, exemplary and other forms of damages arising
from the employer-employee relations;
v  Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts;

v  Excepts claims for Employees Compensation, Social Security, Medicare and
maternity benefits, all other claims, arising from employer-employee relations,
including those of persons in domestic or household service, involving an
amount exceeding five thousand pesos (P5,000.00) regardless of whether
accompanied with a claim for reinstatement.
 BAR ITEM NO. 9
ART. 223 ( now Art. 229 OF THE LABOR
CODE
Period to Appeal (10 Calendar Days)
v  Grounds for Appeal (6)
v  Posting of Bond is Mandatory (Cash or Surety)
v  Property Bond allowed in Certain Cases
v  Reinstatement Pending Appeal (Physical or Merely on Payroll at Employer’s
Option)
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JURISDICTION OF THE BLR; MED-
ARBITER AND NCMB

BAR ITEM NO. 11

MODES OF UNION FORMATION
v  Independent Union (Art. 240, Labor Code) and Chartered Local (Book V Rules)
v  Federation or National Union
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AFFILIATION AND DISAFFILIATION

v  Benguet Consolidated Case

v  Effects of Disaffiliation on Indepemdent Unions and Chartered Locals
v  Substitutionary Doctrine
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CANCELLATION OF UNION
REGISTRATION (GROUNDS)
v  Where Filed? Where Appealed?
v  Effects of Cancellation? (Itogon Suyoc Case)
v  Effects of Final Cancellation
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RIGHTS AND CONDITIONS OF UNION

MEMBERSHIP
v  Art. 250 (d), Labor Code- Questions of Major Policy
v  Additional Compensation (Art. 250 (k), Labor Code)
v  Special Assessment (Attorney’s Fees, etc.) Art. 250 (n), Labor Code
 BAR ITEM NO. 15

CASES ON VIOLATIONS OF ART. 250,

LABOR CODE

v  Art. 250 to be Distinguished

with Art. 289 of the Labor Code

v  Vercelles vs. BLR (2005 Case)

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RIGHT TO SELF-ORGANIZATION AND THE

NON-ABRIDGMENT CLAUSE

v  Public Sector Unionism (Art. 254, Labor Code and E.O. No. 180)
v  Private Sector Unionism
v  Iglesia ni Kristo Cases
v  Electric Cooperative Cases
v  The Non-Abridgment Clause (Art. 256, Labor Code)
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UNFAIR LABOR PRACTICE

(ART. 258 to 2260, LABOR CODE)

v  Concepts
v  Examples of Unfair Labor Practice
v  Jurisprudence
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UNION SECURITY CLAUSES (ART. 248,

v  Nature and Kind LABOR CODE)
v  Agency Fee
v  Check-Off; Concept and When Check-Off Not Required
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v  COLLECTIVE BARGAINING

When there is a Collective Bargaining Agreement
v  When there is NO Collective Bargaining Agreement
v  KIOK LOY vs. NLRC, 141 SCRA 179
v  Bargaining in Good or Bad Faith
v  Other Concepts: Surface Bargaining, Blue Sky Demand, etc.
 BAR ITEM NO. 20

ART. 265, LABOR CODE, AS AMENDED

v  Effectivity of Collective Barganing Agreements

v  St. Lukes and Meralco vs. Quisumbing Case
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CERTIFICATION ELECTION
v  Organized Establishment (Art. 268)
v  Unorganized Establishment (Art. 269)
v  Petition for Certification Election Filed by Employer (Art. 270 and 271)
v  Run-Off vs. Re-Run Elections
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BARS TO CERTIFICATION ELECTIONS

v  Contract Bar Rule
v  Deadlock Bar Rule
v  One (1) year Ban; Certification Year Bar and Negotiation Year Bar;
v  Consent Election as Bar
v  Charge of Company Domination
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BOOK V (NEW) EFFECTS OF GRANT OR

DENIAL OF PETITION FOR
CERTIFICATION ELECTION
v  Unorganized – VPCE is Granted – No Appeal – PCE is DENIED - Subject to
Appeal

v  Organized – VPCE is GRANTED or DENIED – Subject to Appeal

 BAR ITEM NO. 24

v 
STRIKES AND LOCKOUTS
Requisites for a Valid Strike
v  Art. 278 (c) and Art. 278(f)-Notice of Strike and Strike Vote Report are
Mandarory
v  Capitol Medical Center vs. NLRC (2005)
v  Legal Effects of an Illegal Strike
v  May a Strike be the Subject of Injunction or TRO?
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ART. 278 (g) ASSUMPTION POWER OF THE SECRETARY OF LABOR

BAR ITEM NO. 26

PURPOSE AND MEANS TEST

BAR ITEM NO. 27

IMPROVED AND REDUCED OFFER BALLOTING (Art. 280, Labor Code)

 BAR ITEM NO. 28

VOLUNTARY ARBITRATION
v  Nature of Office of the Voluntary Arbitrator
v  Decision of Voluntary Arbitrator; Where Appealed
v  Jurisprudence
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ART. 292 (b) MISCELLANEOUS PROVISIONS

BAR ITEM NO. 30

ART. 293 AND 294

v  Security of Tenure and Due Process
v  Backwages- Basis
v  Bustamante and Other Cases
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KINDS OF EMPLOYMENT
v  Art. 295, Labor Code (Regular and Casual Employment) –Reasonable
Connection Test
v  Probationary Employment (Art. 296)
v  Fixed Period; Seasonal; Project Employees
 BAR ITEM NO. 32
JUST CAUSES FOR DISMISSAL (ART. 282)
Art. 297. Termination by employer. – An employer may terminate an
employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders
of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud of willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family of his duly authorized
representative; and
(e) Other causes analogous to the foregoing.
 BAR ITEM NO. 33

AUTHORIZED CAUSES- ART. 298 AND 299

v  Redundancy; Automation (ILSD);

v  Closure or Lay-off for Reason other than Serious business Losses; and
Disease

v  North Davao Mining vs. NLRC and sister cases

 BAR ITEM NO. 34

ART. 300 AND ART. 301

v  When Employee May Sever Relationship?
(With Notice or Without Notice)

v  Temporary Cessation of Business Operations

v  Rendering of Civic or Military Duty

 BAR ITEM NO. 35

RETIREMENT
(ART. 302, LABOR CODE AND
REP. ACT NO. 7641)

v  Basic Retirement Benefits

v  Jurisprudence
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SALE, MERGER AND CONSOLIDATION

v  Sundowner Dev’t. Corp. vs Drilon - on Sale or Transfer of Business in good
faith

v  Filport Case on Merger and Consolidation

v  Piercing of the Veil of Corporate Entity (Sale or Transfer in Bad Faith)
 BAR ITEM NO. 37

AGABON, JAKA FOODS AND WENPHIL

CASES
v  Agabon Case – Just Causes – Nominal Damages is P30,000.00

v  Jaka Foods Case – Authorized Causes – P50,000.00

v  Wenphil Doctrine (Reinstated); Serrano Doctrine (Abandoned)

 BAR ITEM NO. 38

STRAINED RELATIONS

v  How Construed

v  When and When Should Strained Relations be

raised

v  Jurisprudence
 BAR ITEM NO. 39

13TH MONTH PAY AND BONUS

v  What is included in 13th Month Computation
v  Sevilla Trading vs. Voluntary Arbitrator Tomas Semana
v  Is Commission Included in the Computation of 13th Month Pay? Yes, if
commission was pre-determined with guaranteed wage or salary
v  Pro-rated 13th Month Pay in case of Resignation
 BAR ITEM NO. 40

AIM-WET-IHO - THE ANTI-SEXUAL

HARASSMENT LAW (REP. ACT NO. 7877)

v Concept

v Jurisprudence
 BAR ITEM NO. 41

SSS AND GSIS

v  Coverage and Exceptions

v  System of Claims and Appeal

v  Benefits/Beneficiaries
 BAR ITEM NO. 42

ART. 106 – 109, Labor Code

(LABOR ONLY CONTRACTING VS. JOB OR
INDEPENDENT CONTRACTING)

v  Substantial Investment – Capital OR TEMP

v  Indicators of JOB or Independent Contracting

v  Legal Effects of Labor Only Contracting

 BAR ITEM NO. 43

ART. 110 – WORKERS PREFERENCE

v  Mortgage Credits vs. Workers

Preference

v  DBP vs. NLRC Cases

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ART. 128 (VISITORIAL AND INSPECTION

POWERS OF SECRETARY OF LABOR ; AND
129 AND 224 (a)(6), LABOR CODE, ON
MONEY CLAIMS

v  Rep. Act. No. 7730; June, 1994

v  No Shared Jurisdiction on Money Claims Between the Regional Director and the
Labor Arbiter
v  Jurisprudence and Examples
 BAR ITEM NO. 45

ART. 111 AND 228 IN RELATION TO 250 (n),

LABOR CODE
v  Traders Royal Bank Case

v  Pacific Bank vs. Clave

v  Art. 250 (n) on Special Assessment of Attorney’s Fees and Negotiation
fees and Requisites
 BAR ITEM NO. 46

WAGE ORDER AND WAGE DISTORTION

v  Correction of Distortion on Wages
v  Jurisprudence (Prubankers and Cagayan Sugar Milling Cases)
v  The Edna Bonto Perez (Metrobank Formula)
v  Frequency of Wage Orders to be Issued by Regional Board
v  Jurisprudence
 BAR ITEM NO. 47

FACTORS IN DETERMINING BARGAINING

UNITS
v  Globe Doctrine, etc.

v  UP vs. Calleja and Sister Cases

v  Jurisprudence
 BAR ITEM NO. 48

APPEALS IN LABOR CASES RENDERED BY

VARIOUS LABOR AGENCIES
v  Decision of Labor Arbiter

v  Decision of BLR and Med-Arbiter

v  Decision of Voluntary Arbitrator

v  Decision of Regional Director on Money Claims

v  Decision of Secretary of Labor

 BAR ITEM NO. 49

SEPARATION PAY AND RETIREMENT

BENEFITS
v  May Both Separation Pay and Retirement Benefits be Paid to Retrenched or
Retired Employees?

v  Jurisprudence
 BAR ITEM NO. 50

ART. 259 (i) AND ART. 274, LABOR CODE

v  Gross ULP vs. Grievable Matters

v  Labor Arbiter (Economic) and Voluntary Arbitrator (Non-Economic)

 BAR ITEM NO. 51

THE DOCTRINE OF FORUM NON- CONVENIENCE

MAY THIS DOCTRINE BE INVOKED AGAINST THE
EXERCISE OF JURISDICTION BY THE LABOR
ARBITER?
Under the rule of forum non conveniens, a Philippine court or agency MAY
assume jurisdiction over a case if it chooses to do so, PROVIDED:
a. that the Philippine court is one to which the parties may conveniently resort to;
b. that the Philippine court is in a position to make an intelligent decision as to
the law and the facts; and
c. that the Philippine court has or is likely to have power to enforce its
decision.
v  This doctrine may be invoked against the exercise of jurisdiction of the labor
arbiters as held in the case of Manila Hotel Corporation and Manila Hotel
International limited vs. NLRC and Marcelo Santos wherein the SC ruled that the
NLRC was a seriously an inconvenient forum.
v  Philippine National Bank vs. Cabansag, [G. R. No. 157010, June 21, 2005]. Here,
the doctrine of forum non conveniens was rejected by the SC.as argued by PNB.
Instead, there was reason to presume per the SC that Cabansag was a migrant
worker, wherein the petitioner cannot escape the application of Philippine laws or
the jurisdiction of the NLRC and the Labor Arbiter.
 BAR ITEM NO. 52
WHAT IS THE HOBSON DOCTRINE?
In San Miguel Corporation vs. NLRC, [G. R. No. 107693, July 23, 1998],
the employees were given the option to retire, be retrenched or dismissed but they
were made to understand that they had no choice but to leave the company. This is
known as the Hobson’s choice which means that they have no choice at all. All that
the private respondents were offered was a choice on the means or method of
terminating their services but never as to the status of their employment.
In short, they were never asked if they still wanted to work for petitioner. The mere
absence of actual physical force to compel private respondents to ink an
application for retirement did not make their retirement voluntary. Confronted with
the danger of being jobless, unable to provide their families even with the basic
needs or necessities of life, the private respondents had no choice but to sign the
documents proffered to them