Pointers in Labor and Social Legislation

2016 Bar Exams

By Professor Victoria V. Loanzon
Prepared with the assistance of Atty. Mikhail M. Tupaz
(Admitted to the Practice of Law on April 24, 2014)
Please find below the possible areas to be covered by the essay questions in the Labor and Social
Legislation(Pertinent ponencias of Justice Velasco have been highlighted):
A. Preliminaries
1

Labor rights protected and guaranteed under the 1987 Constitution. (Sec. 3, Art. XIII, 1987
Constitution)
a Right to self-organization;
b Right to collective bargain;
c Right to collectively negotiate;
d Right to peaceful concerted activities;
e Right to strike in accordance with law;
f Right to participate in policy and decision-making processes;
g Right to security of tenure;
h Right to human condition of work;
i
Right to a living wage;
j
Right to a just share in the profits.

Labor rights protected under the Labor Code. (Art. 3, Labor Code)
a Right to self-organize;
b Right to collectively bargain;
c Right to security of tenure;

(J. Velasco) -The security guards right to security of tenure does not give him a
vested right to the position as would deprive the company of its prerogative to
change the assignment of, or transfer the security guard to, a station where his
services would be most beneficial to the client. Indeed, an employer has the right
to transfer or assign its employees from one office or area of operation to
another, or in pursuit of its legitimate business interest, provided there is no
demotion in rank or diminution of salary, benefits, and other privileges, and the
transfer is not motivated by discrimination or bad faith, or effected as a form of
punishment or demotion without sufficient cause. (Exocet Security and Allied
Services Corporation vs. Serrano, G.R. No. 198538, September 29, 2014)
d
3

Right to just and humane work condition.

State policies on:

a Labor Code: (Art. 3, Labor Code)
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. The State shall assure the rights of workers to self-organization, collective bargaining,
security of tenure, and just and humane conditions of work.
b Employees Compensation (Art. 166, LC)
The State shall promote and develop a tax-exempt employees compensation program whereby
employees and their dependents, in the event of work-connected disability or death, may promptly
secure adequate income benefit and medical related benefits.
c Labor Relations (Art. 211, LC)
To promote and emphasize the primacy of free collective bargaining and negotiations, including
voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes;
To promote free trade unionism as an instrument for the enhancement of democracy and the promotion
of social justice and development;
To foster the free and voluntary organization of a strong and united labor movement;
To promote the enlightenment of workers concerning their rights and obligations as union members
and as employees;
To provide an adequate administrative machinery for the expeditious settlement of labor or industrial
disputes;
To ensure a stable but dynamic and just industrial peace; and
To ensure the participation of workers in decision and policy-making processes affecting their rights,
duties and welfare.

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To encourage a truly democratic method of regulating the relations between the employers and
employees by means of agreements freely entered into through collective bargaining, no court or
administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work or
other terms and conditions of employment, except as otherwise provided under this Code.
d Workers representation and participation in policy and decision-making (Art. 255, LC)
The labor organization designated or selected by the majority of the employees in an appropriate
collective bargaining unit shall be the exclusive representative of the employees in such unit for the
purpose of collective bargaining. However, an individual employee or group of employees shall have
the right at any time to present grievances to their employer.
Any provision of law to the contrary notwithstanding, workers shall have the right, subject to such
rules and regulations as the Secretary of Labor and Employment may promulgate, to participate in
policy and decision-making processes of the establishment where they are employed insofar as said
processes will directly affect their rights, benefits and welfare. For this purpose, workers and
employers may form labor-management councils: Provided that the representatives of the workers in
such labor-management councils shall be elected by at least the majority of all employees in said
establishment. (As amended by Section 22, Republic Act No. 6715, March 21, 1989)
To encourage a truly democratic method of regulating the relations between the employers and
employees by means of agreements freely entered into through collective bargaining, no court or
administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work or
other terms and conditions of employment, except as otherwise provided under this Code.
e Workers representation and participation in policy and decision-making (Art. 255, LC)
The labor organization designated or selected by the majority of the employees in an appropriate
collective bargaining unit shall be the exclusive representative of the employees in such unit for the
purpose of collective bargaining. However, an individual employee or group of employees shall have
the right at any time to present grievances to their employer.
Any provision of law to the contrary notwithstanding, workers shall have the right, subject to such
rules and regulations as the Secretary of Labor and Employment may promulgate, to participate in
policy and decision-making processes of the establishment where they are employed insofar as said
processes will directly affect their rights, benefits and welfare. For this purpose, workers and
employers may form labor-management councils: Provided that the representatives of the workers in
such labor-management councils shall be elected by at least the majority of all employees in said
establishment. (As amended by Section 22, Republic Act No. 6715, March 21, 1989)
f. Tripartism and tripartite conferences (Art. 275, LC)
Tripartism in labor relations is hereby declared a State policy. Towards this end, workers and
employers shall, as far as practicable, be represented in decision and policy-making bodies of the
government.
The Secretary of Labor and Employment or his duly authorized representatives may, from time to time,
call a national, regional, or industrial tripartite conference of representatives of government, workers
and employers for the consideration and adoption of voluntary codes of principles designed to promote
industrial peace based on social justice or to align labor movement relations with established priorities
in economic and social development. In calling such conference, the Secretary of Labor and
Employment may consult with accredited representatives of workers and employers. (As amended by
Section 32, Republic Act No. 6715, March 21, 1989)
4 Nature of relationship between employer and employee.
It is not merely contractual. Their relation is impressed with public interest that labor contracts entered into
between them must yield to the common good. Therefore, such contracts are subject to the special laws on
labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of
labor and similar subjects. (Art. 1700, Civil Code)
5 Construction of Labor Contracts and the Labor Code.
Labor contracts are construed as how the parties intended it to be. But in case of doubt, it shall be construed
in favor of the labor. (Art. 1702, Civil Code)
The Labor Code shall be construed verba legis. But in case of doubt in its implementation and
interpretation, all doubts shall be construed in favor of labor. (Art. 4, Labor Code)
B. Book I
1. Illegal Recruitment
Q. Can the accused object when two separate complaints for estafa and illegal recruitment is file against
him?
Answer: No. A person may be charged and convicted for both illegal recruitment and estafa. The reason for this
is that illegal recruitment is a malum prohibitum, whereas estafa is malum in se, meaning that the criminal
intent of the accused is not necessary for conviction in the former, but is required in the latter. (People v Saulo,
344 SCRA 605)

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Q. Charito used to work as a nurse in Ireland. She chose to retire in the Philippines. She convinced a
number of nurses in their barangay apply in the hospital in Ireland where she used to work without
obtaining a license to do so?
Answer: No. Charito must obtain a license and an authority from the Department of Labor and Employment.

Q. What are the elements of illegal recruitment?

Answer: (J. Velasco) -Illegal recruitment is committed when two (2) elements concur:
First, the offender does not have the required license or authority to engage in the
recruitment and placement of workers. Second, the offender undertook (1) recruitment
and placement activity defined under Article 13(b) of the Labor Code or (2) any
prohibited practice under Art.34 of the same code. Illegal recruitment is qualified into
large scale, when three or more persons, individually or as group, are victimized.
(People vs. Bartolome, G.R. No. 129486 July 4, 2008)
License and Authority, defined.
A License is a document issued by the Department of Labor authorizing a person to operate a private
employment agency.
An Authority is a document issued by the Department of Labor authorizing a person or association to engage
in recruitment and placement activities as a private recruitment entity.
Q. In the above situation, what action may be filed against Charito?
Answer: Illegal Recruitment. There is illegal recruitment under the Labor Code when any person: (Art. 38 (b))
1. Undertakes any recruitment activity as defined under Article 13(b) or any prohibited practice enumerated
under Article 34; and
2. Does not have a license or authority to engage in the recruitment and placement of workers.
There is illegal recruitment under the Migrant Workers Act (RA 8042) when any person commits: (Sec. 6, RA
8042)
1. Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, procuring workers ( CETCHUP)
and includes referring, contact services, promising or advertising for employment abroad, (CRAP) whether for
profit or not, when undertaken by a non-license or non-holder of authority; or
2. Any of the acts under Art. 34 of the Labor Code, whether committed by any person, whether a non-licensee,
non-holder, license or holder of authority.
Q. Will the number of persons recruited by Charito determine the action which may be instituted against
her?
Answer: Yes. There are two kinds of illegal recruitment:
1. There is simple illegal recruitment when
i. a person undertakes any recruitment activity as defined under Article 13(b) or any prohibited practice
enumerated under Article 34; and
ii. a person does not have a license or authority to engage in the recruitment and placement of workers.
2. Illegal recruitment as economic sabotage can either be:
a.) large scale illegal recruitment if committed against 3 or more persons individually or as a group; or
b.) syndicated illegal recruitment if it is committed by 3 or more persons in conspiracy.
Q. Can a party impute that the principal foreign employer had knowledge that its agent solicited
applicants for employment on its behalf?
Answer: No. The theory of imputed knowledge ascribes the knowledge of the agent to the
principal/employer, not the other way around. The knowledge of the principal-foreign employer cannot,
therefore, be imputed to its agent. 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, it and its
owner cannot be held solidarily liable for any of Divinas claims arising from the 2-year employment
extension. (Sunace v NLRC, G.R. No. 161757, Jan. 25, 2006)

Q. Is the non-receipt of the proceeds/profits from illegal recruitment a valid defense?

Answer: (J. Velasco) NO. The claim of the accused appellant that she received no
payment and that the payments were handed directly over to her co-accused fails in the
face of the testimony of the complainants that accused-appellant was the one who
received the money. In spite of the receipts having been issued by her co-accused, the
trial court found that payments were directly made to the accused-appellant, and this
finding was upheld by the CA. Nothing is more entrenched than the rule that where, as
here, the findings of fact of the trial court are affirmed by the CA, these are final and
conclusive upon this Court. And even if it were true no money changed hands, money is
not material to a prosecution for a illegal recruitment, as the definition of recruitment
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and placement in the Labor Code included the phrase, whether for profit or not. We
held in People vs. Jamilosa, 512 SCRA 340 (2007), that it was sufficient that the
accused promises or offers for a fee employment to warrant conviction for illegal
recruitment. Accused-appellant made representations that complainants would receive
employment abroad, and this suffices for her conviction, even if her name does not
appear on the receipts issued to complainants as evidence that payment was made.
(People vs. Valenciano, G.R. No. 180926 December 10, 2008)
Q. Can a mere employee of an Illegal Recruitment Agency be held liable as a principal?
(J. Velasco) YES. -The claim of accused-appellant that she was a mere employee of her
other co-accused does not relieve her of liability. An employee of a company or
corporation engage in illegal recruitment may be held liable as principal, together with
his employer, if it is shown that the employee actively and consciously participated in
illegal recruitment. As testified to by the complainants, accusedappellant was among
those who met and transacted with them regarding the job placement offers. In some
instances, she made the effort to go to their houses to recruit them. She even gave
assurances that they would be able to find employment abroad and leave Taiwan after
the filing of their applications. Accused-appellant was clearly engaged in recruitment
activities, notwithstanding her gratuitous protestation that her actions were merely
done in the course of her employment as a clerk. (People vs. Valenciano, supra)
Q. In the event that it is established by evidence that the principal foreign employer had knowledge that
its agent was engaged in illegal recruitment, what will be the liability of the principal foreign employer?
Answer: The liability of the principal/employer and the recruitment/placement agency for any and all claims
shall be joint and several. The performance bond to be filed by the recruitment/placement agency, as provided
by law, shall be answerable for all money claims or damages that may be awarded to the workers.
If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the
case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the
aforesaid claims and damages. (Sec. 10, RA 8042, as amended by RA 10022)
Q. Carlito has a two-contract with Pacific Shipping Co. On his 6 th month, Carlito was informed that he
will be repatriated back to Manila. There was reason given for the pre-termination of the contract. What
benefits can Carlito invoke the pre-termination his overseas employment contract?
Answer: 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 if 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. (Sec. 10, RA 8042, as amended;
Serrano v Gallant Maritime Service, Inc., GR 167614, March 24, 2009, which deleted the phrase or for
three months for every year of the unexpired term, whichever is less. for being unconstitutional)
Q. In anticipation of the need for manpower in the forthcoming Olympics in Brazil, Francisco was able to
establish a contact with Breezo, one of the contractors in the Olympic site which needed maintenance
personnel. Francisco started to advertise through the social media the manpower requirements of Breezo.
Was the act of Francisco proper?
Answer: No. Francisco is guilty of direct hiring of labor. The general rule is that direct hiring is not allowed
except through the Boards and Entities authorized by the Secretary of Labor.
The exception to the rule is when direct hiring is employed by the diplomatic corps;
international organizations; and such other employers as may be allowed by the Secretary of Labor.
2. Read the essential provisions of R.A. 8042 and 10022 on migrant workers

Q. Is there a need for a local recruitment agency to show that an OFW has been validly
dismissed from employment?
Answer: (J. Velasco) YES. - Even though EDI and/or ESI were merely the local
employment or recruitment agencies and not the foreign employer, they should have
adduced additional evidence to convincingly show that Grans employment was validly
and legally terminated. The burden devolves not only upon the foreign-based employer
but also on the employment or recruitment agency for the latter is not only an agent of
the former, but is also solidarily liable with the foreign principal for any claims or
liabilities arising from the dismissal of the worker. (EDI-SII vs. NLRC G.R. No. 145587,
October 6, 2007)

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Q. What are Trade-Tests? What is the consequence if an OFW is deployed overseas by a

recruitment agency without conducting trade tests?
Answer: (J. Velasco) - In Prieto, this Court ruled that it is presumed that before their
deployment, the petitioners were subjected to trade tests required by law to be
conducted by the recruiting agency to insure employment of only technically qualified
workers for their foreign principal. The CA, using the ruling in the said case, ruled
that Gran must have passed the test; otherwise, he would not have been hired.
Therefore, EDI was at fault when if deployed the employee who was allegedly
incompetent for the job. According to the petitioner, the Prieto ruling is not
applicable because in the case at hand, the employee misrepresented himself in his
curriculum vitae as a Computer Specialist; thus, he was not qualified for the job for
which he was hired. We disagree. The CA is correct in applying Prieto. The purpose of
the required trade test is to weed our incompetent applicants from the pool of available
workers. It is supposed to reveal applicants with false educational backgrounds, and
expose bogus qualifications. Since EDI deployed the employee to Riyadh, it can be
presumed that Gran has passed the required trade test and that Gran is qualified for
the job. Even if there was no objective trade test done by EDI, it was still EDIs
responsibility to subject Gran to a trade test; and its failure to do so only weakened its
position but should not in any way prejudice Gran. In any case, the issue is rendered
moot and academic because Grans incompetency is unproved. (EDI-SII vs. NLRC,
supra)
3. Read on role of OWWA/POEA
Q. Can a Filipino overseas worker invoke the provisions of the Labor Code in case he is retrenched?
Answer: Yes. The provisions of the Labor Code still apply to Filipino OFWs who have been deployed abroad
and are retrenched by the foreign principal. (Article 283, Labor Code, International Management Services v.
Legate (2012))
Q. What is the prescription period within which an OFW may file his monetary claims?
Answer: Article 291 is the law governing the prescription of money claims of seafarers, a class of overseas
contract workers. This law prevails over Section 28 of the Standard Employment Contract for Seafarers which
provides for claims to be brought only within one year from the date of the seafarers return to the point of hire.
The prescriptive period is thus three years from the time the cause of action accrues. (Southeastern Shipping v.
Navarra, June 22, 2010)
Q. What factors are considered to ensure that a contract of employment of an OFW is perfected?
Answer: A contract approved by the POEA is deemed perfected at the moment (1) the parties come to agree
upon its terms; and (2) concur in the essential elements thereof (Consent, object and consideration).
The Court awarded moral damages and attorneys fees to the complainant OFW since after the perfection of the
contract, he was not deployed. The Court said that the action of International Management Services was tainted
with bad faith. ( Bright Maritime Corp v. Fantonial (2012))
C. Book II
1. Apprenticeship (Art. 58(a), Labor Code)
Q. If the company allowed individuals to work for at least three months and then executed
Apprenticeship Agreement on the 4th month, is the agreement valid?
Answer: No. Apprenticeship Agreement is not valid where complainants were hired as employees first before
the execution of apprenticeship agreement. The fact that the workers were already rendering service to the
company when they were made to undergo apprenticeship renders the apprenticeship agreements irrelevant as
far as the employees are concerned, especially since, prior to the apprenticeship, the employees performed tasks
that were usually necessary and desirable to the companys usual business.
Even assuming there was a valid apprenticeship, the expiration of the first agreement and the retention of the
employees was recognition by the employer of their training and acquisition of a regular employee status. The
second apprenticeship agreement for a second skill which was not even mentioned in the agreement is a
violation of the Labor Codes implementing rules. (Atlanta Industries v. Sabolino (2011))
2. Learners
3. Hiring of Minors, Article 139 (c)/ see also protection of handicapped workers (Art. 78, Labor Code)
Disabled workers are entitled to 75% of applicable minimum wage.
Incentives for employment of handicapped workers (Sec. 2, R.A. 7277)
PLEASE READ ON THE PROVISIONS OF KASAMBAY LAW

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COVERAGE
ENTITLEMENT
PROCEDURE FOR REGISTRATION
LIABILITY FOR NON COMPLIANCE
D. Book III1. Classification of Employees
- Nature of seasonal employees
- Regularization of employees
Q. What are three types of employees under the Labor Code?
Answer: The Labor Code provides for three kinds of employment arrangements, namely: regular,
project/seasonal and casual. Regular employment refers to that arrangement whereby the employee has been
engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
employer [.] Under this definition, the primary standard that determines regular employment is the
reasonable connection between the particular activity performed by the employee and the usual business or
trade of the employer; the emphasis is on the necessity or desirability of the employees activity.
By way of an exception, paragraph 2, Article 280 of the Labor Code also considers as regular, a casual
employment arrangement when the casual employees engagement is made to last for at least one year, whether
the service is continuous or broken. The controlling test in this arrangement is the length of time during which
the employee is engaged.
Seasonal employment operates much in the same way as project employment, albeit it involves work or
service that is seasonal in nature or lasting for the duration of the season. As with project employment,
although the seasonal employment arrangement involves work that is seasonal or periodic in nature, the
employment itself is not automatically considered seasonal so as to prevent the employee from attaining regular
status. To exclude the asserted seasonal employee from those classified as regular employees, the employer
must show that: (1) the employee must be performing work or services that are seasonal in nature; and (2) he
had been employed for the duration of the season. Hence, when the seasonal workers are continuously and
repeatedly hired to perform the same tasks or activities for several seasons or even after the cessation of the
season, this length of time may likewise serve as badge of regular employment. In fact, even though
denominated as seasonal workers, if these workers are called to work from time to time and are only
temporarily laid off during the off-season, the law does not consider them separated from the service during the
off-season period. The law simply considers these seasonal workers on leave until re-employed.

Q. Who is considered a regular employee?

Answer::
A
regular
employee
is
one
who
by
the
nature
of
his
engagement is to perform an activity usually necessary or desirable in the employers business. The nature of
the employment does not depend solely on the will or word of the employer or on the procedure for hiring and
the manner of designating the employee. Rather, the nature of the employment depends on the nature of the
activities to be performed by the employee, taking into account the nature of the employers business, the
duration and scope of work to be done, and, in some cases, even the length of time of the performance and its
continued existence. (Universal Robina Sugar Milling Corporation and Rene Cabati, G.R. No. 186439.
January 15, 2014)

Q. Can an employee stipulate his period of engagement?

Answer: Yes. In Brent School, Inc. v. Zamora (G.R. No. L-48494, February 5, 1990), the Court, for the first
time, recognized and resolved the anomaly created by a narrow and literal interpretation of Article 280 of
the Labor Code that appears to restrict the employees right to freely stipulate with his employer on the duration
of his engagement. In this case, the Court upheld the validity of the fixed-term employment agreed upon by
the employer, Brent School, Inc., and the employee, Dorotio Alegre, declaring that the restrictive clause in
Article 280 should be construed to refer to the substantive evil that the Code itself x x x singled out:
agreements entered into precisely to circumvent security of tenure. It should have no application to instances
where [the] fixed period of employment was agreed upon knowingly and voluntarily by the parties x x x
absent any x x x circumstances vitiating [the employees] consent, or where [the facts satisfactorily show] that
the employer and [the] employee dealt with each other on more or less equal terms[.] The indispensability or

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desirability of the activity performed by the employee will not preclude the parties from entering into an
otherwise valid fixed term employment agreement; a definite period of employment does not essentially
contradict the nature of the employees duties as necessary and desirable to the usual business or trade of the
employer.
Nevertheless, where the circumstances evidently show that the employer imposed the period precisely
to preclude the employee from acquiring tenurial security, the law and this Court will not hesitate to strike
down or disregard the period as contrary to public policy, morals, etc. In such a case, the general restrictive
rule under Article 280 of the Labor Code will apply and the employee shall be deemed regular.

Q. How can an employer overcome the allegation that an employee has become a regular employee when
said employee was hired as a project employee?
Answer: A project employment contemplates on arrangement whereby the employment has been fixed for a
specific project or undertaking whose completion or termination has been determined at the time of the
engagement of the employee.
Two requirements need to be satisfied to remove the engagement from the presumption of regularity of
employment, namely: (1) designation of a specific project or undertaking for which the employee is hired; and
(2) clear determination of the completion or termination of the project at the time of the employees
engagement. The services of the project employees are legally and automatically terminated upon the end or
completion of the project as the employees services are coterminous with the project.

Q. What is the concept of control test in an employer-employee relationship?

Answer: Guidelines indicative of labor law control,, should not merely relate to the mutually desirable result
intended by the contractual relationship; they must have the nature of dictating the means or methods to be
employed in attaining the result, or of fixing the methodology and of binding or restricting the party hired to the
use of these means. (Tongko v. Manufacturers Life Insurance G.R. No. 167622, June 29, 2010 & January 25,
2011):
Q. What is the fourfold test in secondment position?
Answer: The continuity, existence or termination of an employer-employee relationship in a typical
secondment contract is measured by the FOUR FOLD TEST:
(1)If the acceptance of the new assignment (2) required the abandonment of the employees permanent
position with the former employer; (3) in order for him to assume a position in an entirely different company,
and (4) the permanent transfer or assignment constituted a severance of employment with the former
employer. (Intel Technology v. NLRC & Cabiles, February 5, 2014)

Q. Professor Mercado has been teaching Mathematics at the Unibersidad ng Pag-Asa (U.P.) for four
semesters on a probationary status. He hold a Bachelors Degree in Education and graduated cum laude.
He requested U.P. to regularize his employment so he can enjoy the benefits under the CBA of the faculty
members of U.P.. Can he compel U.P. to give him a regular status?
Answer: No. Mere completion of the four semester probation, even with an above-average performance, does
not guarantee that the teacher will automatically acquire a permanent employment status. The probationer can
only qualify upon fulfilment of the reasonable standards set for permanent employment as a member of the
teaching personnel. A school CBA must be read in conjunction with statutory and administrative regulations
governing faculty qualifications. (University of the East v. Pepanio, January 23, 2013)

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Q. After undergoing her probationary period and with completion of 12 units for her masters degree in
education, Professor Cecilio insisted that he be regularized. Can she compel the school to issue her a
regular employment?
Answer: No. The requirement of a masters degree for attaining permanent full time faculty member status is a
reasonable qualification. (Herrera-Manaois v. St. Scholasticas College, December 11, 2013)

Q. Is it proper to have both the teaching and non-teaching personnel of an academic institution to just
have one bargaining unit?
Answer: No.: An academic institution should have two bargaining units: one for academic personnel;
and another for non-academic personnel. The differences, however, between the two categories of
employees are no substantial enough to warrant a dismissal of a petition for certification election, seeking
an election for only one unit. The remedy is to hold two certification elections. (Holy Child Catholic
School v. HCCS-TELU-PIGLAS, July 23, 2013)

Q. What will consist of due notice to terminate an employee under probation?

Answer::: If the termination is brought about by the completion of a contract or phase thereof, or by failure of
an employee to meet the standards of the employer in the case of probationary employment, it shall be sufficient
that a written notice is served the employee, within a reasonable time from the effective date of termination.
(Section 2, Rule I, Book VI, Abbot Laboratories vs. Alcaraz, July 23, 2013)

Q. If a probationary employee was illegally dismissed, what is the basis of the computation of his
backwages?
Answer: The computation of backwages of a probationary employee should not cover the entire period from
the time her compensation was withheld up to the time of her actual reinstatement. The computation of
backwages shall end upon the end of the probationary employment.
The lapse of the probationary employment without any appointment as a regular employee of the employer
effectively severed the employer-employee relationship between the parties. (Robinsons Galleria/Robinsons
Supermarket Corp. v. Ranchez, January 19, 2011)

Q. Cristina was initially hired by Abet Laboratories Inc. (ALI) on a probationary basis. She has been
on probation for the past two years. Under the Employees Handbook, an employee who has consistently
rendered above average performance for a probationary period of two years will automatically become a
regular employee. Cristina requested that she be regularized. ALI refused to regularize Cristina and
instead, it terminated her employment. Cristina instituted an action against ALI. Will the case prosper?
Answer: Yes. The employers violation of its own company procedure for termination renders the termination
procedurally infirm, warranting the payment of nominal damages. The adequate performance of ones duties is,
by and of itself an inherent and implied standard for a probationary employee to be regularized; such is a
regularization standard which need not be spelled out or mapped into technical indicators in every case. (Abbot
Laboratories vs. Alcaraz, July 23, 2013)

Q. Who is considered a project employee?

Answer: A project employee may be classified according to the nature of activities either as:

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1. A particular job or undertaking that is within the regular or usual business of the employer company, but
which is distinct and separate, and identifiable as such, from the other undertakings of the company. Such job or
undertaking begins and ends at determined or determinable times.
2. A particular job or undertaking that is not within the regular business of the corporation. Such a job or
undertaking must also be identifiably separate and distinct from the ordinary or regular business operations of
the employer. The job or undertaking also begins and ends at determined or determinable times. ( Leyte
Geothermal Power Progressive Employees Union v. PNOC, March 30, 2011)

Q. What is the test to determine if one is a project employee?

Answer: The principal test used to determine whether employees are project employees is whether or not the
employees were assigned to carry out a specific project or undertaking, the duration or scope of which was
specified at the time the employees were engaged for that project. (Asos v. PNCC, July 3, 2013)

Q. Is prior advice necessary to terminate the services of a project employee?

Answer: No. Completion of the work or project automatically terminates the employment. Prior or advance
notice of termination is not part of procedural due process if the termination is brought about by the completion
of the contract or phase thereof for which the employee was engaged. There is no violation of any requirement
of procedural due process by failing to give the project employees advance notice of their termination; thus,
there is no basis for the payment of nominal damages. (DM Consunji v. Gobres, August 8, 2010)
Q. Who is a seasonal employee?
Answer: The general rule is that seasonal employees may be considered as regular employees. Regular seasonal
employees are those called to work from time to time. The nature of their relationship with the employer is such
that during the off season, they are temporarily laid off; but reemployed during the summer season or when their
services may be needed. They are in regular employment because of the nature of their job, and not because of
the length of time they have worked.
The exception to the rule is that seasonal workers who have worked for one season only may not be considered
regular employees. Similarly, when seasonal employees are free to contract their services with other farm
owners, then the former are not regular employees. (Gapayao v. Fulo, June 13, 2013)
Q. Who are confidential employees?
Answer: Confidential employees are those who (1) assist or act in a confidential capacity, (2) to persons who
formulate, determine, and effectuate management policies in the field of labor relations. The two (2) criteria
are cumulative, and both must be met.
The exclusion from bargaining units of employees who, in the normal course of their duties, become aware of
management policies relating to labor relations is a principal objective sought to be accomplished by the
confidential employee rule. (Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v. Asia Brewery,
August 3, 2010)
Q. Mr. Ramos is a paymaster of a manufacturing company. Can he be considered a confidential
employee?
Answer: No. Payroll Master and employees who have access to salary and compensation data are NOT
Confidential employees. Their position do not involve dealing with confidential labor relations information.
(San Miguel Foods v. SMC Supervisors and Exempt Union, August 1, 2011)

Q. Mr. Santos is a well-known publicist. Pursuant to the By-Laws of ABC Company, the Board of
Directors created the position of Communications Manager and it engaged the services of Mr. Santos for
said position. Is Mr. Santos considered a corporate officer?
Answer: No. A position must be expressly mentioned in the By-Laws in order to be considered as a corporate
office. Thus, the creation of an office pursuant to or under a By-Law enabling provision is not enough to make a
position a corporate office.

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Q. As an ordinary corporate officer, can Mr. Santos be terminated at will by ABC Company?
Answer: No. The criteria for distinguishing between corporate officers who may be ousted from office at will,
on one hand, and ordinary corporate employees who may only be terminated for just cause, on the other hand,
do not depend on the nature of the services performed, but on the manner of creation of the office. ( Matling
Industrial v. Coros, October 13, 2010)

Q. Mr. Reyes is a stockholder of XYZ Company. Being an accountant, the company hired him as its
Comptroller, a position not provided for in the companys By-Laws.
Mr. Reyes is listed as an officer in the General Information Sheet of the Company.
The company terminated his services because he found to be remised of his responsibility as Comptroller.
Can Mr. Reyes file an intra-corporate suit before the RTC for his dismissal?
Answer: No. The contents of the General Information Sheets, which identifies the employee as an
officer of the company could neither govern nor establish the nature of the office held by the employee
and his appointment thereto. The mere fact that the complainant employee was a stockholder of the
company does not necessarily make the action an intra-corporate controversy. (Cosare v. Broadcom Asia,
February 5, 2014)

Q. What is the test to be determine whether or not a termination of employment involves an

intracorporate controversy?
Answer: The fact that the parties involved in the controversy are all stockholders or that the parties involved are
the stockholders and the corporation does not necessarily place the dispute within the ambit of the jurisdiction
of the RTC. The Two-tier Test must be applied. The test must scrutinize: the status or relationship of the parties;
and the nature of the question that is the subject of the controversy.
Real v. Sangu Phils., January 19, 2011: If the worker was not appointed by the Board of Directors, there is no
intra-corporate relationship. If what is involved is termination of employment, it is a labor controversy, and not
an intra-corporate dispute.

Q. Mr. Alden Richards, an American citizen, was hired by Aldub Company as a Marketing Specialist. He
has worked for the company for two years. The company terminated the services for Mr. Richards
because the Human Resources Manager of the company found out that he does not have any Alien
Employment Permit. Mr. Richards sued the company for illegal dismissal. Will the case prosper?
Answer: No. A foreigner who alleged illegal dismissal and sought to claim under our labor laws is required to
establish first that he was qualified and duly authorized to obtain employment within our jurisdiction. A
requirement for foreigners who intend to work within the country is an employment permit. With the failure of
Mr. Richards to obtain his Alien Employment Permit warrants the dismissal of his labor complaint. (McBurnie
v. Ganzon, EGI-Managers, Inc., October 17, 2013)

Q. Mr. Ricardo Sanchez is a referee engaged by the UAAP. Is he an employee of the UAAP?
Answer: No. The contractual stipulations do not pertain to, much less dictate, how and when the referees will
blow the whistle and make calls. They merely serve as rules of conduct or guidelines in order to maintain the
integrity of the professional basketball league. (Bernante v. PBA, September 14, 2011)

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Q. Ms. Ay is a talent of Showcase, a noontime show of a popular television network. Is she considered an
employee of the television network company?
Answer: No. As a talent, Ms. Ay Ay is considered not an employee of the television network company.
However, production assistants, drivers/cameramen and security guards of the network company not being
talents are considered employees. (Fulache v. ABS-CBN, January 21, 2010; Television and Production
Exponents v. Servaa, January 28, 2008; ABS-CBN Broadcasting Corp. v. Nazareno, Sept. 26, 2006)
2. Labor Contracting
- Requisites
- What is an independent contractor agreement?
- Service contractor
-labor/job contractor
- Rights under labor contracting
Q. What characterizes legitimate job contracting?
Answer: A person is considered engaged in legitimate job contracting or subcontracting if the following
conditions concur:
(a) The contractor carries on a distinct and independent business and undertakes the contract work on his
account under his own responsibility according to his own manner and method, free from the control and
direction of his employer or principal in all matters connected with the performance of his work except as to the
results thereof;
(b) The contractor has substantial capital or investment; and
(c) The agreement between the principal and the contractor or subcontractor assures the contractual employees'
entitlement to all labor and occupational safety and health standards, free exercise of the right to selforganization, security of tenure, and social welfare benefits. (Babas v. Lorenzo Shipping, December 15, 2010)
Q. A complaint was lodged against Top Company by a group of laborers alleging that the company does
not have sufficient capital to operate as an independent contractor. During the hearing, Top Company
presented its Certificate of Registration with the DOLE. Is the Certificate of Registration sufficient proof
to establish that it is an independent contractor?
Answer: No. A contractors Certificate of Registration is not sufficient proof that it is an independent
contractor. A Certificate of Registration issued by the Department of Labor and Employment is not conclusive
evidence of such status. The fact of registration simply prevents the legal presumption of being a mere laboronly contractor from arising. (Babas v. Lorenzo Shipping, December 15, 2010)
3. Wage Formulation

Q. What is the effect of a Wage Boards setting of an across the board wage increase?
Answer: (J. Velasco) - The Court held that a RTWPB commits ultra vires and
unreasonable act when, instead of setting a minimum wage rate, it prescribes a wage
increase cutting across all levels of employment and wage brackets: In the present case,
the RTWPB did not determine or fix the minimum wage rate by the floor-wage
method or the salary-ceiling method in issuing the Wage Order. The RTWPB did
not set a wage level nor a range to which a wage adjustment or increase will be added.
Instead, it granted an across-the-board wage increase at P15.00 to all employees and
workers of Region 2. In doing so, the RTWPB exceeded its authority by extending the
Wage Orders to wage earners receiving more than the prevailing minimum wage rate,
without the denominated salary ceiling. As correctly pointed out by the OSG, the Wage
Order granted additional benefits not contemplated by R.A. No. 6727 (Nasipit
Integrated Arrastre and Stevedoring Services, Inc. vs. Nasipit Employees Labor Union,
G.R. No. 162411, June 27, 2008)
- Powers of Wage Boards
- Coverage/Effectivity of Schedule of Adjustments
- Wage Distortion
4. Benefits for Women Workers
- Maternity Leave contrast this with Paternity Leave
- Gynecological Leave
-Sexual Harassment
5. Diminution of Benefits
- Prohibition
- When justified

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Q. Is the removal of a company benefit given in error be removed/corrected without

violating the rule on non-dimunition of benefits?
Answer: (J. Velasco) YES. As correctly pointed out by the corporation, the
overpayment of its employees was a result of an error. This error was immediately
rectified by the corporation upon its discovery. We have ruled before that an
erroneously granted benefit may be withdrawn without violating the prohibition
against non-diminution of benefits. We ruled in Globe Mackay Cable and Radio Corp.
vs. NLRC, 163 SCRA 71: Absent clear administrative guidelines, Petitioner
Corporation cannot be faulted for erroneous application of the law. Payment may be
said to have been made by reason of a mistake in the construction or application of a
doubtful or difficult question of law. (Article 2155, in relation to Article 2154 of the
Civil Code). Since it is a past error that is being corrected, no vested right may be said
to have arisen nor any diminution of benefit under Article 100 of the Labor Code may
be said to have resulted by virtue of the correction. (TSPIC Corporation vs. TSPIC
Employees Union, 545 SCRA 215, G.R. No. 163419, February 13, 2008)
E. Book IV
1. Death Benefits of Seafarers
Q. Can a claim for death benefits be denied even if the injury was sustained in the course of his work?
Answer: Yes. Failure of an injured seafarer to comply with medical checkup within three days from repatriation
is not entitled to receive death benefits. The Court ruled that it could not find a direct link that pneumonia being
the cause of death based on the Death Certificate was triggered by the tetanus caused by the injury sustained by
the seafarer. (Crew and Management International Inc and Selena Inc. V. Jina T. Soria (2012))

2. Disability Benefits of Seafarers

Q. What does total disability mean?

Answer: (J. Velasco) -It has been held that disability is intimately related to ones
earning capacity. It should be understood less on its medical significance but more on
the loss of earning capacity. Total disability does not mean absolute helplessness. In
disability compensation, it is not the injury which is compensated, but rather the
incapacity to work resulting in the impairment of ones earning capacity. Thus,
permanent disability is the inability of a worker to perform his job for 120 days,
regardless of whether or not he loses the use of any part of his body. (Oriental
Shipmanagement Co. Inc. vs. Bastol, G.R. No. 186289, June 29, 2010)
Q. What is the basis of disability benefit of a Filipino overseas seafarer?
Answer:. With respect to the applicable rules, it is doctrinal that the entitlement of seamen on overseas work to
disability benefits is a matter governed, not only by medical findings, but by law and by contract. The material
statutory provisions are Articles 191 to 193 under Chapter VI (Disability Benefits) of the Labor Code, in
relation [to] Rule X of the Rules and Regulations Implementing Book IV of the Labor Code. By contract, the
POEA-SEC, as provided under Department Order No. 4, series of 2000 of the Department of Labor and
Employment, and the parties Collective Bargaining Agreement bind the seaman and his employer to each
other.
In the foregoing light, the Court observes that respondent executed his contract of employment on July 17,
2000, incorporating therein the terms and conditions of the 2000 POEA-SEC which took effect on June 25,
2000.
However, since the implementation of the provisions of the foregoing 2000 POEA-SEC was temporarily
suspended by the Court on September 11, 2000, particularly Section 20, paragraphs (A), (B), and (D) thereof,
and was lifted only on June 5, 2002, through POEA Memorandum Circular No. 2, series of 2002, the
determination of respondents entitlement to the disability benefits should be resolved under the provisions of
the 1996 POEA-SEC as it was, effectively, the governing circular at the time respondents employment contract

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was executed. (Shipmanagement, Inc. Captain Sigfredo E. Monterroyo and/or Interorient Navigation
Limited v. Alexander L. Moradas, G.R. No., January 15, 2014)

Q. Do Seafarers enjoy a presumption of compensability while under employment?

Answer: (J. Velasco) YES. -Sec. 20 (B) (4) of the POEA-SEC clearly established a
disputable presumption in favor of the compensability of an illness suffered by a
seafarer during the term of his contract. This disputable presumption works in favor of
the employee pursuant to the mandate under Executive Order No. 247 dated July 21,
1987 under which the POES-SEC was created: to secure the best terms and conditions
of employment of Filipino contract workers and ensure compliance therewith and to
promote and protect the well-being of Filipino workers overseas. Hence, unless
contrary evidence is presented by the seafarers employer/s, this disputable
presumption stands. (David vs. OSG Shipmanagement Manila, Inc. G.R. No. 197205
September 26, 2012)
Q. Who has the burden of proof to show that an illness is work-related?
Answer: (J. Velasco) -Anent employees claim for permanent total disability benefits, its
propriety hinges on whether or not his illness was work-related. We find no compelling
reason to deviate from the factual findings of the NLRC that employee failed to
establish that his illness was work-related. Thus, he is not entitled to claim total
permanent disability benefits. This Court has, time and again, held that the factual
findings of quasi-judicial agencies like the NLRC, when affirmed by the Court of
Appeals, are conclusive upon the parties and binding on this Court. It must be
stressed that in petitions for review under Rule 45 of the Rules of Court, only questions
of law must be raised before this Court. Tonsil cancer or tonsillar carcinoma is, indeed,
not work-related. The NLRC and the CA correctly ruled on this issue. It is not included
in the list of occupational diseases. Thus, the employee carried the burden of showing
by substantial evidence that his cancer developed or was aggravated from work-related
causes. As both the NLRC and the CA found, he had nothing to support his claim other
than his bare allegations. (Transportation Ship Management (Phils), Inc. vs. Vedad G.R.
No. 194490-91 March 20, 2013)
3. Claims under Employees Compensation Act
F. Book V
1. Unions and Registration
- Process of registration
- Grounds for denial of registration
Q. Is the submission of financial statement material to registration of a labor union?
Answer: NoThe registered union is not required to submit financial statements and/or keep membership
representing 20% of the appropriate bargaining unit throughout its lifetime. The Court said that the
constitutionally guaranteed freedom of association and right of workers to self-organization far outweigh
respondents compliance to maintain its status as a legitimate labor organizations. (Heritage Hotel v.
NUWHRAIN-HHMSC (2011))
Q. What is the effect of withdrawal of membership after the application for registration has been filed?
Answer:: The subsequent affidavits of retraction (withdrawal of membership) will not retroact to the time of
the application for registration or even way back to the organizational meeting.
Art. 234(c) of the Labor Code requires the list of names of all the union members of an independent union
comprising at least 20% of the bargaining unit. This should not be equated with the list of workers who
participated in the organizational meetings (par [b]). (Eagle Ridge Golf and Country Club v. CA, March 18,
2010)
Q. Can both the supervisory and rank-and-file employees be affiliated with the same labor organization?
Answer: Yes. The mixture of rank-and-file and supervisory employees in a union does not nullify its legal
personality as a legitimate labor organization. (Samahang Manggagawa Sa Charter Chemical (SMCCSUPER) v. Charter Chemical and Coating Corp., March 16, 2011)

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Q. Can both the supervisory union and the rank-and-file employees union be affiliated with the same
labor federation?
Answer: Yes. As amended by R.A. 9481, the Labor Code now allows a rank and file union and a supervisory
union of the same company to be part of the same federation for the following reasons:
An employer cannot ignore the existence of a legitimate labor organization at the time of its voluntary
recognition of another union. The employer and the voluntarily recognized union cannot, by themselves, decide
whether the other union represented an appropriate bargaining unit.
The employer may voluntarily recognize the representation status of a union in unorganized establishments.
(Sta. Lucia East Commercial Corporation v. Hon. Secretary of Labor, August 14, 2012)
San Miguel Foods v. San Miguel Corp. Supervisors and Exempt Union, August 1, 2011: The test of grouping
is community or mutuality of interest.
There should be only one bargaining unit for employees involved in dressed chicken processing and workers
engaged in live chicken operations.
Although they seem separate and distinct from each other, the tasks of each division are actually interrelated
and there exists mutuality of interests which warrants the formation of a single bargaining unit.
2. Affiliation and Disaffiliation

Q. Is the Company obliged to inquire as to who the authorized bargaining

representative? What is the Med-Arbiters duty?
Answer: (J. Velasco) -It is not the duty or obligation of respondents to inquire into the
validity of the election of the Gamilla Group. Such issue is properly an intra-union
controversy subject to the jurisdiction of the med-arbiter of the DOLE. Respondents
could not have been expected to stop dealing with the Gamilla Group on the mere accusation
of the Mario Group that the former was not validly elected into office. The subsequent
ruling of this Court in G.R. No. 131235 that the Gamilla Group was not validly elected into
office cannot support petitioners allegation of ULP. Has respondents dealt with the Gamilla
Group after our ruling in G.R. No. 131235 had become final and executory, it would have
been a different story. As the CA ruled correctly, until the validity of the election of the
Gamilla Group is resolved with finality, respondents could not be faulted for negotiating with
said group. (UST Faculty Union vs University of Santo Tomas, G.R. No. 180892, April 7,
2009)
Q. Can the Court intervene in an intra-union dispute?
Answer: No. In the present case, whether the FFW went against the will of its principle (memberemployees) by pursuing the case despite signing of the MOA, is not for the Court, nor for the respondent
employer to determine, but for the Union and FFW to resolve on their own pursuant to their principal
agent relationship. Moreover, the issue of disaffiliation is an intra-union dispute which must be resolved
in a different forum.(Cirtek Employees Labor Union- FFW v. Cirtek Electronics (2011))
3. Certification Elections and CBA
- procedural aspects

Q. Is the issuance of a certificate of registration a ministerial function of the Bureau of

Labor Relations?
Answer: (J. Velasco) NO. It cannot be over-emphasized that the registration or the
recognition of a labor union after it has submitted the corresponding papers is not
ministerial on the part of the BLR. Far from it. After a labor organization has filed the
necessary registration documents, it becomes mandatory for the BLR to check if the
requirements under Art. 234[19] of the Labor Code have been sedulously complied
with. If the unions application is infected by falsification and like serious irregularities,
especially those appearing on the face of the application and its attachments, a union should
be denied recognition as a legitimate labor organization. Prescinding from these
considerations, the issuance to the Union of Certificate of Registration necessarily implies
that its application for registration and the supporting documents thereof are prima facie free
from any vitiating irregularities. (SS Ventures International, Inc. vs. S.S. Ventures Labor
Union, 595 SCRA 435, G.R. No. 161690 July 23, 2008)
Q. Is compliance with the 30% employee membership requirement for the conduct of
Certification Election Absolute?
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Answer: (J. Velasco) NO. -In Eastland Manufacturing Company, Inc. v. Noriel, 111 SCRA
674 the Court emphasized, and reiterated its earlier rulings, that even if there were less
than 30% (the required percentage of minimum membership then) of the employees
asking for a certification election, that of itself would not be a bar to respondent
Director ordering such an election provided, of course, there is no grave abuse of
discretion. Citing Philippine Association of Free Labor Unions vs. Bureau of Labor
Relations, 68 SCRA 132 the Court emphasized that a certification election is the most
appropriate procedure for the desired goal of ascertaining which of the competing
organizations should represent the employees for the purpose of collective bargaining.
Indeed, where the company seeks cancellation of a unions registration during the pendency
of a petition for certification election, the same grounds invoked to cancel should not be used
to bar the certification election. A certification election is the most expeditious and fairest
mode of ascertaining the will of a collective bargaining unit as to its choice of its
exclusive representative. It is the fairest and most effective way of determining which
labor organization can truly represent the working force. It is a fundamental postulate
that the will of the majority, if given expression in an honest election with freedom on
the part of the voters to make their choice, is controlling. (Eagle Ridge Golf & Country
Club vs. Court of Appeals, 616 SCRA 116, G.R. No. 178989, March 18, 2010)
Q. What is the effect of the employees withdrawal from union membership before and
after the filing of a petition for certification election?
Answer: (J. Velasco) - As aptly noted by both the BLR and CA, these mostly undated written
statements submitted by Ventures on March 20, 2001, or seven months after it filed its
petition for cancellation of registration, partake of the nature of withdrawal of union
membership executed after the Unions filing of a petition for certification election on March
21, 2000. We have in precedent cases said that the employees withdrawal from a labor
union made before the filing of the petition for certification election is presumed
voluntary, while withdrawal after the filing of such petition is considered to be
involuntary and does not affect the same. Now then, if a withdrawal from union
membership done after a petition for certification election has been filed does not vitiate
such petition, is it not but logical to assume that such withdrawal cannot work to nullify the
registration of the union? Upon this light, the Court is inclined to agree with the CA that the
BLR did not abuse its discretion nor gravely err when it concluded that the affidavits of
retraction of the 82 members had no evidentiary weight. (Eagle Ridge Golf & Country Club
vs. Court of Appeals, 616 SCRA 116, G.R. No. 178989, March 18, 2010)
Review the following aspects in Labor Relations:
- coverage of CBA
- conduct of CBA
- relate to kinds of employees, (Art. 82, Book V)
- prescription of action on ULP
- liability for just/authorized cause, see Art. 282
- constructive dismissal
- reinstatement, grounds
- payroll reinstatement
- entitlement to back wages (applicable rules/ maximum amount)
- Notice to Strike (period, grounds)

Rule on participation of union officers and union members in illegal strike:

(J. Velasco) - Regarding the Union officers and members liabilities for their
participation in the illegal picket and strike, Art. 264(a), paragraph 3 of the Labor Code
provides that [a]ny union officer who knowingly participates in an illegal strike and any
worker or union officer who knowingly participates in the commission of illegal acts
during a strike may be declared to have lost his employment status x x x. The law
makes a distinction between union officers and mere union members. Union officers
may be validly terminated from employment for their participation in an illegal strike,
while union members have to participate in and commit illegal acts for them to lose
their employment status. Thus, it is necessary for the company to adduce proof of the
participation of the striking employees in the commission of illegal acts during the
strikes. (NUWHRAIN-Dusit Nikko Hotel Chapter vs. CA 570 SCRA 598, G.R. No.
163942 November 11, 2008)
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Q. Are the employees who participated in an illegal strike entitled to backwages?

Answer: (J. Velasco) NO. The Court held in one case that union members who participated
in an illegal strike but were not identified to have committed illegal acts are entitled to be
reinstated to their former positions but without backwages.
In G & S Transport Corporation v. Infante, the Court held that with respect to backwages,
the principle of a fair days wage for a fair days labor remains as the basic factor in
determining the award thereof. If there is no work performed by the employee there
can be no wage or pay unless, of course, the laborer was able, willing and ready to work
but was illegally locked out, suspended or dismissed or otherwise illegally prevented
from working. While it was found that respondents expressed their intention to report back
to work, the latter exception cannot apply in this case. In Philippine Marine Officers Guild v.
Campania Maritima, as affirmed in Philippine Diamond Hotel and Resort v. Manila
Diamond Hotel Employees Union, the Court stressed that for this exception to apply, it is
required that the strike be legal, a situation that does not obtain in the case at bar.
Q.What are the responsibilities of a union official and a union member in an Illegal
Strike?
Answer: (J. Velasco) It is clear that the responsibility of union officials is greater than
that of the members. They are tasked with the duty to lead and guide the membership in
decision making on union activities in accordance with the law, government rules and
regulations, and established labor practices. The leaders are expected to recommend
actions that are arrived at with circumspection and contemplation, and always keep
paramount the best interests of the members and union within the bounds of law. If the
implementation of an illegal strike is recommended, then they would mislead and deceive the
membership and the supreme penalty of dismissal is appropriate. On the other hand, if the
strike is legal at the beginning and the officials commit illegal acts during the duration of the
strike, then they cannot evade personal and individual liability for said acts. (Toyota Motors
Phils. Corp. Workers Association vs. NLRC, G.R. Nos. 158786 & 158789, G.R. Nos.
158798-99 October 19, 2007)
Q. An ordinary employee who participated in an illegal strike cannot be terminated
from employment but may be terminated upon proof that he committed illegal acts.
Who has the burden of proof?
Answer: (J. Velasco) The Court said that its ruling in Association of Independent Unions
in the Philippines v. NLRC lays down the rule on the liability of the union members:
Decisive on the matter is the pertinent provisions of Article 264 (a) of the Labor Code
that: [x x x] any worker [x x x] who knowingly participates in the commission of illegal
acts during a strike may be declared to have lost his employment status. [x x x] It can be
gleaned unerringly from the aforecited provision of law in point, however, that an
ordinary striking employee cannot be terminated for mere participation in an illegal
strike. There must be proof that he committed illegal acts during the strike and the
striker who participated in the commission of illegal act[s] must be identified. But proof
beyond reasonable doubt is not required. Substantial evidence available under the
circumstances, which may justify the imposition of the penalty of dismissal, may suffice.
In the landmark case of Ang Tibay vs. CIR, the court ruled Not only must there be some
evidence to support a finding or conclusion, but the evidence must be substantial.
Substantial evidence is more than a mere scintilla. It means such relevant evidence that
a reasonable mind might accept as sufficient to support a conclusion
Thus, it is necessary for the company to adduce proof on the participation of the
striking employee in the commission of illegal acts during the strikes. (supra)
Q. What are acts are considered illegal acts during a strike?
Answer: (J. Velasco) No precise meaning was given to the phrase illegal acts. It may
encompass a number of acts that violate existing labor or criminal laws, such as the
following:
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(1) Violation of Art. 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 employers premises for lawful purposes, or obstruct
public thoroughfares;
(2) Commission of crimes and other unlawful acts in carrying out the strike; and
(3) Violation of any order, prohibition, or injunction issued by the DOLE Secretary or
NLRC in connection with the assumption of jurisdiction/certification Order under Art.
263(g) of the Labor Code.
As earlier explained, this enumeration is not exclusive and it may cover other breaches
of existing laws.
Q. What are the six categories of Illegal Strikes?
Answer: (J. Velasco). Noted authority on labor law, Ludwig Teller, lists six (6) categories
of an illegal strike, viz:
(1) [when it] is contrary to a specific prohibition of law, such as strike by employees
performing governmental functions; or
(2) [when it] violates a specific requirement of law [, such as Article 263 of the Labor
Code on the requisites of a valid strike]; or
(3) [when it] is declared for an unlawful purpose, such as inducing the employer to
commit an unfair labor practice against non-union employees; or
(4) [when it] employs unlawful means in the pursuit of its objective, such as a
widespread terrorism of non-strikers [for example, prohibited acts under Art. 264(e) of
the Labor Code]; or
(5) [when it] is declared in violation of an existing injunction [, such as injunction,
prohibition, or order issued by the DOLE Secretary and the NLRC under Art. 263 of
the Labor Code]; or
(6) [when it] is contrary to an existing agreement, such as a no-strike clause or
conclusive arbitration clause. (supra)

Q. Can a mass leave be considered a Strike?

Answer: (J. Velasco) NO. -The term Mass Leave has been left undefined by the Labor
Code. Plainly, the legislature intended that the terms ordinary sense be used. Mass is
defined as participated in, attended by, or affecting a large number of individuals;
having a large-scale character. While the term Leave is defined as an authorized
absence or vacation from duty or employment usually with pay.
Thus, the phrase mass leave may refer to a simultaneous availment of authorized
leave benefits by a large number of employees in a company. It is undeniable that going
on leave or absenting ones self from work for personal reasons when they have leave
benefits available is an employees right. (Naranjo v. Biomedica Health Care Inc, 681
SCRA 438, G.R. No. 193789 September 19, 2012)
Q. Is a certificate of non-forum shopping a requisite in a certification proceeding?
Answer: No. There is no requirement for a certificate of non-forum shopping in the Labor Code or in the rules.
A certification proceeding, even though initiated by a petition, is not litigation but an investigation of a nonadversarial and fact-finding character. Such proceedings are not predicated upon an allegation of misconduct
requiring relief, but, rather, are merely of an inquisitorial nature. (SAMMA-LIKHA v. SAMMA Corporation,
March 13, 2009)
Q. Can probationary employees be allowed to vote in certification election?
Answer: Yes. Any employee, whether employed for a definite period or not, shall beginning on the first day of
his/her service, be eligible for membership in any labor organization. In a certification election for the
bargaining unit of rank and file employees, all rank and file employees, whether probationary or permanent are
entitled to vote. As long as probationary employees belong to the defined bargaining unit, they are eligible to
support the petition for certification election. (NUWHRAIN-Manila Pavilion Hotel Chapter v. Secretary, July
31, 2009)
4. Unfair Labor Practice (ULP) and Strikes

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Q. Who has jurisdiction over an unfair labor practice complaint?

Answer: The correlations of Article 248 (1) and Article 261 of the Labor Code stress that for a ULP case to be
cognizable by the Labor Arbiter, and for the NLRC to exercise appellate jurisdiction thereon, the allegations in
the complaint must show prima facie the concurrence of two things, namely: (1) gross violation of the CBA;
and (2) the violation pertains to the economic provisions of the CBA.
However, when an employer proceeds to negotiate with a splinter union despite the existence of its valid CBA
with the duly certified and exclusive bargaining agent, the former indubitably abandons its recognition of the
latter and terminates the entire CBA.( Silva v. National Labor Relations Commission)
Q. How will the Labor Arbiter rule if malice was not alleged in a complaint for unfair labor practice?
Answer: Dismiss the case. For a charge of unfair labor practice to prosper, it must be shown that the employer
was motivated by ill-will, bad faith or fraud, or was oppressive to labor. The employer must have acted in a
manner contrary to morals, good customs, or public policy causing social humiliation, wounded feelings or
grave anxiety. While the law makes it an obligation for the employer and the employees to bargain collectively
with each other, such compulsion does not include the commitment to precipitately accept or agree to the
proposals of the other. All it contemplates is that both parties should approach the negotiation with an open
mind and make reasonable effort to reach a common ground of agreement. (Manila Mining Corporation
Employees Association v. Manila Mining Corp., September 29, 2010)
Q. Is it possible for a labor union to commit an unfair labor practice?
Answer: Yes.: A CBA which prescribes three categories of employees (probationary, regular, casual) and
provides for the definition, functions and duties of each, serves as a limitation on managements prerogative of
outsourcing parts of its operations, particularly if it involves functions or duties specified under the CBA. (Goya
v. Goya Employees Union, January 21, 2013)
Q. With the adoption of cost cutting measures, Eduardo was part of manufacturing that was retrenched
by the company. Can Eduardo ask for reinstatement?
Answer: No. Retrenchment in good faith is not an unfair labor practice. The fact that the retrenchment program
was implemented on a company-wide basis shows that the scheme was not calculated to stymie union activities.
(Pepsi Cola Products v. Molon et al., February 18, 2013)
Q. Jerusalem Corp. (JC) has been providing new chairs to its sewing crew for the past five years. On
the sixth year, JC stopped providing new chairs. Can the company be charged with unfair labor practice
for withdrawal of this regular provision?
Answer: No. Removal of chairs, which had been provided for more than three decades, was not ULP. The
rights of the Union under any labor law were not violated. (Royal Plant Workers Union v. Coca Cola Bottlers,
April 15, 2013)
Since the CBA stated that any benefit not expressly provided for in the CBA shall be deemed as purely
voluntary acts, and shall not be construed as obligation of the company, its subsequent removal was valid. The
long practice did not convert it into an obligation or a vested right in favor of the union. Chairs are not
considered benefits and are not therefore covered by the prohibition against diminution.
Q. Who has the burden of proof in an unfair labor practice case?
Answer: The party who instituted the case has the burden of proof. Basic is the principle that good faith is
presumed and he who alleges bad faith has the duty to prove the same. By imputing bad faith to the actuations
of CAB, CABEU-NFL has the burden of proof to present substantial evidence to support the allegation of unfair
labor practice. Apparently, CABEU-NFL refers only to the circumstances mentioned in the letter-response,
namely, the execution of the supposed CBA between CAB and CABELA and the request to suspend the
negotiations, to conclude that bad faith attended CABs actions. The Court is of the view that CABEU-NFL, in
simply relying on the said letter-response, failed to substantiate its claim of unfair labor practice to rebut the
presumption of good faith. (Central Azucarera de Bais Employees Union v. Central Azucarera de Bais,
November 17, 2010)
Q. Who has the burden of proof in a case when there is allegation that the registration of the labor union
was attended with fraud?
Answer: The party who instituted the action has the burden of proof.: The charge that a labor organization
committed fraud and misrepresentation in securing its registration is a serious charge that should be clearly
established by evidence and the surrounding circumstances.
The petitioner (the party that filed the Petition for Cancellation) has the burden of proof. (Yokohama Tire Phils.
v. Yokohama Employees Union, March 10, 2010; Heritage Hotel Manila v. PIGLAS-Heritage, October 30,
2009)
Q. Is the employer a party to the petition for certification election?
Answer: No. Except when it is requested to bargain collectively, an employer is a mere bystander to any
petition for certification election; such proceeding is non-adversarial and merely investigative, for the purpose
thereof is to determine which organization will represent the employees in their collective bargaining with the
employer. The choice of their representative is the exclusive concern of the employees; the employer cannot

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have any partisan interest therein; it cannot interfere with, much less oppose, the process by filing a motion to
dismiss or an appeal from it; not even a mere allegation that some employees participating in a petition for
certification election are actually managerial employees will lend an employer legal personality to block the
certification election. The employer's only right in the proceeding is to be notified or informed thereof.
As amended by R.A. 9481, the Labor Code now provides that, in certification election cases, the employer shall
not be considered a party with a concomitant right to oppose a petition for certification election. (Republic of
the Philippines, represented by DOLE, v. Kawashima Textile, July 23, 2008)
Q. Can employer terminate the employment of union members during the Freedom Period?
Answer: No. The mere signing of the authorization in support of a Petition for Certification Election before the
freedom period, is not sufficient ground to terminate the employment of union members under the Union
Security Clause respondents inasmuch as the petition itself was actually filed during the freedom period.
(PICOP Resources, Inc. v. Taeca, August 9, 2010)
Q. What is the effect if the employer and the company extends its 5-year CBA?
Answer: While the parties may agree to extend the CBAs original five-year term together with all other CBA
provisions, any such amendment or term in excess of five years will not carry with it a change in the unions
exclusive collective bargaining status. By express provision of the above-quoted Article 253-A, the exclusive
bargaining status cannot go beyond five years and the representation status is a legal matter not for the
workplace parties to agree upon. In other words, despite an agreement for a CBA with a life of more than five
years, either as an original provision or by amendment, the bargaining unions exclusive bargaining status is
effective only for five years and can be challenged within sixty (60) days prior to the expiration of the CBAs
first five years. (FVC Labor Union-Philippine Transport and General Workers Organization (FVCLUPTGWO) v. Sama-Samang Nagkakaisang Manggagawa Sa FVC-Solidarity of Independent and General
Labor Organizations (SANAMA-FVC-SIGLO), November 27, 2009)
Q. Can the personality of the petitioner labor be collaterally attacked in the same certification election
proceeding?
Answer: No. The legal personality of petitioner union cannot be collaterally attacked in the certification
election proceedings. The remedy is to file a separate action for cancellation of the unions registration/legal
personality. (Samahang Manggagawa Sa Charter Chemical (SMCC-SUPER) v. Charter Chemical and
Coating Corp., March 16, 2011)
Q. Can bonuses be demandable?
Answer: Yes. The general rule is a bonus is not a demandable and enforceable obligation. For a bonus to be
enforceable, it must have been promised by the employer and expressly agreed upon by the parties. Given that
the bonus in this case is integrated in the CBA, the same partakes the nature of a demandable obligation. Verily,
by virtue of its incorporation in the CBA, the Christmas bonus due to respondent Association has become more
than just an act of generosity on the part of the petitioner but a contractual obligation it has undertaken.
(Eastern Telecoms v. Eastern Telecoms Employees Union, February 8, 2012)
Q: Are dismissed employees entitled to backwages?
Answer: If termination was not without just cause, they are entitled to back wages.
As a general rule, backwages are granted to indemnify a dismissed employee for his loss of earnings during the
whole period that he is out of his job. Considering that an illegally dismissed employee is not deemed to have
left his employment, he is entitled to all the rights and privileges that accrue to him from the employment. The
grant of backwages to him is in furtherance and effectuation of the public objectives of the Labor Code, and is
in the nature of a command to the employer to make public reparation for dismissing the employee in violation
of the Labor Code.
The Court held that the respondents are not entitled to the payment of backwages. The Court, citing G&S
Transport Corporation v. Infante (G. R. No. 160303, September 13, 2007) stated that the principle of a fair
days wage for a fair days labor remains as the basic factor in determining the award thereof. An exception to
the rule would be if the laborer was able, willing and ready to work but was illegally locked out, suspended or
dismissed or otherwise illegally prevented from working. It is, however, required, for this exception to apply,
that the strike be legal, a situation which does not obtain in the case at bar.
The Supreme Court stressed that the law makes a distinction between union members and union officers. A
union member who merely participates in an illegal strike may not be terminated from employment. It is only
when he commits illegal acts during a strike that he may be declared to have lost employment status. In
contrast, a union officer may be terminated from employment for knowingly participating in an illegal strike or
participates in the commission of illegal acts during a strike. The law grants the employer the option of
declaring a union officer who participated in an illegal strike as having lost his employment. It possesses the
right and prerogative to terminate the union officers from service. (Visayas Community Medical Center

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(VCMC) formerly known as Metro Cebu Community Hospital (MCCH) v. Erma Yballe, et al., G.R. No.
196156, January 15, 2014)

F. Book VI
1. Just Cause
Jonas Michael R. Garza v. Coca-Cola Bottlers Phils. Inc., et al.,G.R. No. 180972. January 20, 2014: The
burden is on the employer to prove that the termination was for valid cause. Unsubstantiated accusations or
baseless conclusions of the employer are insufficient legal justifications to dismiss an employee. The
unflinching rule in illegal dismissal cases is that the employer bears the burden of proof. Embezzlement and
failure to remit collections can only be sustained if the employee actually collected the amounts due to the
company.

Q. Can an employees previous infractions be considered in terminating his

employment?
Answer: (J. Velasco) NO. - In the case of Filipino v. The Honorable Minister Blas F. Ople,
the Court, quoting then Labor Minister Ople, ruled that past infractions for which the
employee has suffered the corresponding penalty for each violation cannot be used as a
justification for the employees dismissal for that would penalize him twice for the same
offense. At most, it was explained, these collective infractions could be used as supporting
justification to a subsequent similar offense. In contrast, the petitioners in the case at bar
did not impose any punishment for the numerous absences and tardiness of respondent.
Thus, said infractions can be used collectively by petitioners as a ground for dismissal.
(Michael Press vs. Galit 545 SCRA 23, G. R. No. 153510 February 13, 2008)
Q. Is the employees failure to meet a company imposed quota equivalent to gross
inefficiency? Exception.
Answer: (J. Velasco) - In fine, an employees failure to meet sales or work quotas falls
under the concept of gross inefficiency, which in turn is analogous to gross neglect of
duty that is a just cause for dismissal under Article 282 of the Code. However, in order for
the quota imposed to be considered a valid productivity standard and thereby validate a
dismissal, managements prerogative of fixing the quota must be exercised in good faith
for the advancement of its interest. The duty to prove good faith, however, rests with
WWWEC as part of its burden to show that the dismissal was for a just cause. WWWEC
must show that such quota was imposed in good faith. (Aliling vs. Feliciano 671 SCRA 186,
G.R. No. 185819, April 25, 2012)

2. Authorized Cause

Q. The principle of loss of trust and confidence as a cause to terminate employment are
applicable only to which employees?
Answer: (J. Velasco) Loss of confidence, as a ground for dismissal, is premised on the
fact that the employee concerned holds a position of responsibility or of trust and
confidence. As such, the employee must be invested with confidence on delicate matters,
such as the custody, handling, or care of the employers money and other assets.
Loss of confidence as a just cause for dismissal was never intended to provide employers
with a blank check for terminating their employees. Such a vague, all-encompassing pretext
as loss of confidence, if unqualifiedly given the seal of approval by this Court, could readily
reduce to barren form the words of the constitutional guarantee of security of tenure. Having
this in mind, loss of confidence should ideally apply only to cases involving employees
occupying positions of trust and confidence or to those situations where the employee is
routinely charged with the care and custody of the employers money or property. To the
first class belong managerial employees, i.e., those vested with the powers or prerogatives
to lay down management policies [effect personnel movements] x x x or effectively
recommend such managerial actions; and to the second class belong cashiers, auditors,
property custodians, etc., or those who, in the normal and routine exercise of their
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functions, regularly handle significant amounts of money or property. (Aromin vs.

NLRC 553 SCRA 273, G.R. No. 164824 April 30, 2008)
Q. What must be established for a valid termination of employment by reason of loss of
trust and confidence?
Answer: (J. Velasco) There is no doubt that respondent held a position of trust; thus,
greater fidelity is expected of her. She was not an ordinary rank-and-file employee but
an employee occupying a very sensitive position. As University Treasurer, she handled
and supervised all monetary transactions and was the highest custodian of funds
belonging to WUP. To be sure, in the normal exercise of her functions, she regularly
handled significant amounts of money of her employer and managed a critical
department.
The presence of the first requisite is certain. So is as regards the second requisite.
Indeed, the Court finds that petitioner adequately proved respondents dismissal was
for a just cause, based on a willful breach of trust and founded on clearly established
facts as required by jurisprudence. At the end of the day, the question of whether she
was a managerial or rank-and file employee does not matter in this case because not
only is there basis for believing that she breached the trust of her employer, her
involvement in the irregularities attending to petitioners finances has also been proved.
(Wesleyan University-Philippines vs. Reyes, 731 SCRA 516, G.R. No. 208321 July 30,
2014)
Q. What constitutes constructive dismissal?
Answer: There is constructive dismissal when the employer pre-judged the employees guilt without proper
investigation, and instantly reported her to the police as the suspected thief, after the employee herself reported
the loss of money. The due process requirements under the Labor Code are mandatory and may not be
supplanted by police investigation or court proceedings. The criminal aspect of the case is considered
independent of the administrative aspect. Employers should not rely solely on the findings of the Prosecutors
Office. They are mandated to conduct their own separate investigation, and to accord the employee every
opportunity to defend ones self. (Robinsons Galleria/Robinsons Supermarket Corp. v. Ranchez, January 19,
2011)
Dreamland Hotel v. Johnson, March 12, 2014: The employers non-payment of the employees salaries for
three months constituted constructive dismissal, even if it was the employee who resigned, since the employee
clearly cited in the resignation letter the non-payment of salaries as the reason for the resignation.
The University of the Immaculate Conception v. NLRC, January 26, 2011: Constructive Dismissal occurs
when there is cessation of work because continued employment is rendered impossible, unreasonable, or
unlikely as when there is a demotion in rank or diminution in pay or when a clear discrimination, insensibility,
or disdain by an employer becomes unbearable to the employee, leaving the latter with no other option but to
quit.

Q. Will the pendency of a criminal case justify the termination of employment of an employee?
Answer: No. A first notice which stated that the employment contract had expired but likewise made general
references to alleged criminal suits filed against the employee is non-compliant with the twin-notice
requirement.
An employees guilt or innocence in a criminal case is not determinative of the existence of a just or authorized
cause for the employees dismissal. The pendency of a criminal suit against an employee does not, by itself,
sufficiently establish a ground for an employer to terminate the employees services.(United Tourist Promotion
v. Kemplin, February 5, 2014)
3. Observation of Due Notice
- Two-notice rule: appraisal and notice of termination
Q. When will the two-notice rule not apply?
AnswerThe employers policy of suspending drivers who fail to remit the full amount of the boundary was fair
and reasonable under the circumstances. An employer has free rein and enjoys wide latitude of discretion to
regulate all aspects of employment, including the prerogative to instill discipline on the employees. Since the

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case involved a suspension, not a termination, the strict application of the twin-notice rule is not warranted . :
(Caong v. Regualos, January 26, 2011)
Q. Will lending a company I.D. to allow a relative to avail of shuttle bus service of the company justify his
dismissal?
Answer: No. An employees act of lending his I.D. card to a relative who was an applicant at the employer
company (to allow the relative to have free pass for the shuttle bus) was considered as insufficient ground for
termination, despite the guilt of the employee.
Reinstatement WITHOUT backwages was ordered, because: (1) dismissal of the employee was too harsh a
penalty; (2) the employer was in good faith in terminating the employee. (Integrated Microelectronics v.
Pionilla, August 28, 2013)
Q. What would justify non-payment of separation pay?
Answer: In addition to serious misconduct, in dismissals based on other grounds under Art. 282 like wilful
disobedience, gross and habitual neglect of duty, fraud or wilful breach of trust, and commission of a crime
against the employer or his family, separation pay should not be conceded to the dismissed employee.
In analogous causes for termination like inefficiency, drug use, and others, the NLRC or the courts may opt to
grant separation pay anchored on social justice in consideration of the length of service of the employee, the
amount involved, whether the act is the first offense, the performance of the employee and the like .
(International School v. ISAE, February 5, 2014)

Q. Can an employee dismissed because of wilful betrayal of trust entitled to financial

assistance or separation pay?
Answer: (J. Velasco) NO. - Guided by the foregoing doctrinal pronouncements and with the
reality that Aromin is guilty of willful betrayal of trust, a serious offense akin to dishonesty,
he is not entitled to financial assistance or separation pay. It may be that his 26 years of
service might generally be considered for a severance pay award or some form of financial
assistance to cushion the effects of his termination. But as aptly observed by the NLRC
and the CA, Aromins length of service is of little moment for purposes of financial
award since his willful breach of trust reflects a regrettable lack of loyalty to his
employer. Indeed, if length of service is to be regarded as justification for moderating
the penalty of dismissal, then we would be giving a premium to disloyalty, distorting in
the process the meaning of social justice and undermining the efforts of labor to cleanse its
ranks of undesirables. (Aromin vs. NLRC 553 SCRA 273 G.R.No. 164824 April 30, 2008)
Grievance procedure

Jonas Michael R. Garza v. Coca-Cola Bottlers Phils. Inc., et al.,G.R. No. 180972. January 20, 2014: The
burden is on the employer to prove that the termination was for valid cause. Unsubstantiated accusations or
baseless conclusions of the employer are insufficient legal justifications to dismiss an employee. The
unflinching rule in illegal dismissal cases is that the employer bears the burden of proof.
One of CCBPIs policies requires that, on a daily basis, CCBPI Salesmen/Account Specialists must account for
their sales/collections and obtain clearance from the company Cashier before they are allowed to leave company
premises at the end of their shift and report for work the next day. If there is a shortage/failure to account, the
concerned Salesmen/Account Specialist is not allowed to leave the company premises until he settles the same.
In addition, shortages are deducted from the employees salaries. If CCBPI expects to proceed with its case
against petitioner, it should have negated this policy, for its existence and application are inextricably tied to
CCBPIs accusations against petitioner. In the first place, as petitioners employer, upon it lay the burden of
proving by convincing evidence that he was dismissed for cause. If petitioner continued to work until June
2004, this meant that he committed no infraction, going by this company policy; it could also mean that any
infraction or shortage/non-remittance incurred by petitioner has been duly settled. Respondents decision to
ignore this issue generates the belief that petitioner is telling the truth, and that the alleged infractions are
fabricated, or have been forgiven. Coupled with Macatangays statement which remains equally unrefuted
that the charges against petitioner are a scheme by local CCBPI management to cover up problems in the Naga
City Plant, the conclusion is indeed telling that petitioner is being wrongfully made to account.

Q. Is the Termination of Employment pursuant to a Union Security Clause a valid cause

for dismissal?
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Answer: (J. Velasco) YES. - Another cause for termination is dismissal from employment
due to the enforcement of the union security clause in the CBA. Here, Art. II of the CBA on
Union security contains the provisions on the Union shop and maintenance of membership
shop. There is union shop when all new regular employees are required to join the union
within a certain period as a condition for their continued employment. There is maintenance
of membership shop when employees who are union members as of the effective date of the
agreement, or who thereafter become members, must maintain union membership as a
condition for continued employment until they are promoted or transferred out of the
bargaining unit or the agreement is terminated. Termination of employment by virtue of a
union security clause embodied in a CBA is recognized and accepted in our jurisdiction. This
practice strengthens the union and prevents disunity in the bargaining unit within the duration
of the CBA. By preventing member disaffiliation with the threat of expulsion from the union
and the consequent termination of employment, the authorized bargaining representative
gains more numbers and strengthens its position as against other unions which may want to
claim majority representation. (Alabang Country Club, Inc vs. NLRC, 545 SCRA 351 G.R.
No 170287 February 14, 2008)

Question: What are its requisites?

Answer: (J. Velasco) In terminating the employment of an employee by enforcing the union
security clause, the employer needs only to determine and prove that:
(1) the union security clause is applicable;
(2) the union is requesting for the enforcement of the union security provision in the CBA;
and
(3) there is sufficient evidence to support the union's decision to expel the employee from the
union. These requisites constitute just cause for terminating an employee based on the CBAs
union security provision. (Supra)
G. Book VII
1. JURISDICTION: LABOR ARBITER

Q.What is the nature of the proceedings before the Labor Arbiter?

Answer: (J. Velasco) The foregoing provisos manifestly show the non-litigious and the
summary nature of the proceedings before the Labor Arbiter, who is given full discretion
whether to conduct a hearing or not and to decide the case before him through position
papers. (Oriental Shipmanagement Co., Inc. vs. Bastol, G.R. No. 186289 June 29, 2010)
Q.What is the rationale behind the summary nature of proceedings before Labor
Arbiter?
Answer: (J. Velasco) In Iriga Telephone Co, Inc. v. National Labor Relations Commission,
286 SCRA 600 (1998), the Court discussed the reason why it is discretionary on the part of
the Labor Arbiter, who, motu proprio, determines whether to hold a hearing or not.
Consequently, a hearing cannot be demanded by either party as a matter of right. The parties
are required to file their corresponding position papers and all the documentary evidence and
affidavits to prove their cause of action and defenses. The rationale behind this is to avoid
delay and curtail the pernicious practice of withholding of evidence. (Oriental
Shipmanagement Co., Inc. vs. Bastol, supra)
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Q.Are quasi-judicial labor tribunals bound by strict rules of procedure?

Answer: (J. Velasco) The posting of a bond is indispensable to the perfection of an appeal in
cases involving monetary awards from the Decision of the Labor Arbiter. Article 223 of the
Labor Code provides: xxx Time and again, however, this Court, considering the substantial
merits of the case, has relaxed this rule on, and excused the late posting of, the appeal
bond when there are strong and compelling reasons for the liberality, such as the
prevention of miscarriage of justice extant in the case or the special circumstances in
the case combined with its legal merits or the amount and the issue involved. After all,
technical rules cannot prevent courts from exercising their duties to determine and settle,
equitably and completely, the rights and obligations of the parties. This is one case where the
exception to the general rule lies. (Semblante vs. CA, 19th Division, G.R. No. 196426, August
15, 2011)
Price v. Innodata (2008): Where contract of employment, being a contract of adhesion, is ambiguous, any
ambiguity therein should be construed strictly against the party who prepared it.
Sofio v. Valenzuela (2012): When the labor arbiters decision has become final, party who prevailed already
attained a vested right to said judgment. They had to rely on the immutability of judgment.

INC Shipmanagement, Inc. Captain Sigfredo E. Monterroyo and/or Interorient Navigation Limited v.
Alexander L. Moradas, G.R. No., January 15, 2014: Having established through substantial evidence that
respondents injury was self-inflicted and, hence, not compensable pursuant to Section 20 (D) of the 1996
POEA-SEC, no grave abuse of discretion can be imputed against the NLRC in upholding LAs decision to
dismiss respondents complaint for disability benefits. It is well-settled that an act of a court or tribunal can only
be considered to be tainted with grave abuse of discretion when such act is done in a capricious or whimsical
exercise of judgment as is equivalent to lack of jurisdiction

Jurisdiction: NLRC

INC Shipmanagement, Inc. Captain Sigfredo E. Monterroyo and/or Interorient Navigation Limited v.
Alexander L. Moradas, G.R. No., January 15, 2014: In labor cases, as in other administrative proceedings, only
substantial evidence or such relevant evidence as a reasonable mind might accept as sufficient to support a
conclusion is required. To note, considering that substantial evidence is an evidentiary threshold, the Court, on
exceptional cases, may assess the factual determinations made by the NLRC in a particular case.
The Court ruled that NLRC had cogent legal bases to conclude that petitioners have successfully discharged the
burden of proving by substantial evidence that respondents injury was directly attributable to him. Records
bear out circumstances which all lead to the reasonable conclusion that respondent was responsible for the
flooding and burning incidents. While respondent contended that the affidavits and statements of the
vessels officers and his fellow crew members should not be given probative value as they were biased, selfserving, and mere hearsay, he nonetheless failed to present any evidence to substantiate his own theory.
Besides, as correctly pointed out by the NLRC, the corroborating affidavits and statements of the
vessels officers and crew members must be taken as a whole and cannot just be perfunctorily dismissed as
self-serving absent any showing that they were lying when they made the statements therein.

United Placement v. NLRC (1993): Review powers of NLRC are limited only on issues raised on appeal.
Hence, it is grave abuse of discretion for the NLRC to resolve issues not raised on appeal.

JURISDICTION: BUREAU OF LABOR RELATIONS

Q. Is the issuance of a certificate of registration a ministerial function of the BLR?

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Answer: (J. Velasco) NO. It cannot be over-emphasized that the registration or the
recognition of a labor union after it has submitted the corresponding papers are not
ministerial on the part of the BLR. Far from it. After a labor organization has filed the
necessary registration documents, it becomes mandatory for the BLR to check if the
requirements under Art. 234 of the Labor Code have been sedulously complied with. If
the unions application is infected by falsification and like serious irregularities, especially
those appearing on the face of the application and its attachments, a union should be denied
recognition as a legitimate labor organization. Prescinding from these considerations, the
issuance to the Union of Certificate of Registration necessarily implies that its application for
registration and the supporting documents thereof are prima facie free from any vitiating
irregularities. (S.S. Ventures International, Inc. vs. SS Venture Labor Union, G.R. No.
161690 July 23, 2008)
JURISDICTION: NATIONAL CONCILIATION AND MEDIATION BOARD
Insular Hotel Employees Union- NFL v. Waterfront Insular Hotel (2010): Procedurally, the first step to
submit a case for mediation is to file a notice of preventive mediation with the NCMB.
JURISDICTION: DOLE REGIONAL DIRECTORS
JURISDICTION: GRIEVANCE MACHINERY AND VOLUNTARY ARBITRATION
Insular Hotel Employees Union v. Waterfront Insular Hotel, September 22, 2010: The general rule is
individual employees cannot raise a grievance. Only disputes involving the union and the company shall be
referred to the grievance machinery or voluntary arbitrators. A labor federation cannot raise a grievance on
behalf of members of its local/chapter.
BPI v. BPI Employees Union (2012): In ruling in favor of the union in a voluntary arbitration, the Court held
that the CBA is the contract between the parties. All provisions and conditions for availment of benefits should
be made clear. Any ambiguity must be resolved in favor of the employees.
Santuyo v. Remerco Garments, March 22, 2010: Article 217(c) of the Labor Code requires labor arbiters to
refer cases involving the implementation of CBAs to the grievance machinery provided therein and to voluntary
arbitration.
Moreover, Article 260 of the Labor Code clarifies that such disputes must be referred first to the grievance
machinery and, if unresolved within seven days, they shall automatically be referred to voluntary arbitration.
Continental Steel v. Accredited Voluntary Arbitrator Montano: Being for the benefit of the employee, CBA
provisions on bereavement leave and other death benefits should be interpreted liberally to give life to the
intentions thereof.
JURISDICTION: DOLE SECRETARY

(J. Velasco) Under Art. 129 of the Labor Code, the power of the DOLE and its duly
authorized hearing officers to hear and decide any matter involving the recovery of wages
and other monetary claims and benefits was qualified by the proviso that the complaint not
include a claim for reinstatement, or that the aggregate money claims not exceed Php5, 000.
RA 7730, or an Act Further Strengthening the Visitorial and Enforcement Powers of the
Secretary of Labor, did away with the Php5,000 limitation, allowing the DOLE Secretary to
exercise its visitorial and enforcement power for claims beyond Php5,000. The only
qualification to this expanded power of the DOLE was only that there still is an existing
employer-employee relationship. (Bombo Radyo Phils. Inc. vs. Secretary of the Department
of Labor and Employment, G.R. No. 179652, March 6, 2012)
Chris Garments Corporation v. Hon. Patricia A. Sto. Tomas and Chris Garments Workers Union-PTGWO,
January 12, 2009: The Secretary of Labor and Employment dismissed the first petition as it was filed
outside the 60-day freedom period. Subsequently, another petition for CE was filed, this time within the
freedom period.
Q. Will the subsequent petition prosper?
Answer: Yes, because the dismissal has no bearing in the instant case since the third petition for certification
election was filed well within the 60-day freedom period. Otherwise stated, there is no identity of causes of
action to speak of since in the first petition, the union has no cause of action while in the third, a cause of action
already exists for the union as they are now legally allowed to challenge the status of SMCGC-SUPER as
exclusive bargaining representative.

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2. Prescription of Actions
- Illegal dismissal without any legal bar: 4 years
- Money claims without legal bar: 3 years
- Termination of employment: 4 years (Art. 1146, Civil Code)

Q. What are the elements of laches?

Answer: (J. Velasco) - On the issue of laches, we agree and so hold that it is inapplicable to
the instant case. Estate of the Late Encarnacion vda. De Panlilio vs. Dizon ,536 SCRA 565
(2007), explains the concept of laches in this wise: According to settled jurisprudence,
laches means the failure or neglect, for an unreasonable and unexplained length of time,
to do that which-by the exercise of due diligence- could or should have been done earlier.
Verily, laches serves to deprive a party guilty of it of any judicial remedies. Its elements are:
(1)conduct on the part of the defendant, or of one under whom the defendant claims,
giving rise to the situation which the complaint seeks a remedy;
(2) delay in asserting the complainants rights, the complainant having had knowledge
or notice of the defendants conduct as having been afforded an opportunity to institute
a suit;
(3)lack of knowledge or notice on the part of the defendant that the complainant would
assert the right in which the defendant bases the suit;
(4)injury or prejudice to the defendant in the event relief is accorded to the
complainant, or t he suit is not held barred. In Santiago vs. Court of Appeals, 278 SCRA
98 (1997), we explained that there is no absolute rule as to what constitutes laches or
staleness of demand; each case is to be determined according to its particular circumstances.
(Associated Labor Unions (ALU) vs. Court of Appeals, G.R. No. 156882, October 31, 2008)
Goodrich v. Ativo (2010): Courts look with disfavor on quitclaims. Exceptions to the general rule on quitclaims:
1. Employee executes quitclaim voluntarily
2. There is fraud or deceit on the part of the employer
3. Consideration for quitclaim is credible and reasonable
4. Contract is not contrary to law, public order, public policy, morals or good customs or prejudicial to a third
person with a right recognized by law
Villaruel v. Yeo Han Guan, June 1, 2011: Separation pay under Article 284 presupposes that it is the employer
who terminates the services of the employee found to be suffering from disease. It does not apply to a situation
where it is the employee who severe his or her employment ties.
Nippon Housing v. Leynes, August 3, 2011: A complaint for illegal dismissal filed prior to the lapse of the sixmonth period (off-detailing/floating status) and/or the actual dismissal of the employee is generally considered
premature.

Q. What are required for a valid and enforceable quitclaim/waiver?

Answer: (J. Velasco) In order to prevent disputes on the validity and enforceability of
quitclaims and waivers of employees under Philippine laws, said agreements should
contain the following:
(1) A fixed amount as full and final compromise settlement;
(2) The benefits of the employees are possible with corresponding amounts, which the
employees are giving up in consideration of the fixed compromise amount;
(3) A statement that the employer has clearly explained to the employee in English, Filipino
or in the dialect known to the employees- that by signing the waiver or quitclaim, they are
forfeiting or relinquishing their right to receive the benefits which are due them under the
law;
(4) A statement that the employees signed and executed the document voluntarily, and had
fully understood the contents of the document and that their consent was freely given without
any threat, violence, duress intimidation, or undue influence executed on their person. It is
advisable that the stipulations be made in English and Tagalog or in the dialect known to the
employee. There should be two (2) witnesses to the execution of the quitclaim who must also
sign the quitclaim. The document should be subscribed and sworn to under oath preferably
before any administering official of the Department of Labor and Employment or its regional
office, the Bureau of Labor Relations, the NLRC or the labor attach in a foreign country.
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Such official shall assist the parties regarding the execution of the quitclaim and waiver. This
compromise settlement becomes final and binding y under Article 227 of the Labor Code.
(EDI-SII vs. NLRC G.R. No. 145587, October 26, 2007)
3. MODES OF APPEAL
GENERAL RULE: THE ABSENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP MAY NOT BE
RAISED FOR THE FIRST TIME ON APPEAL.
INC Shipmanagement, Inc. Captain Sigfredo E. Monterroyo and/or Interorient Navigation Limited v. Alexander
L. Moradas, G.R. No., January 15, 2014: The Courts jurisdiction in cases brought before it from the CA via
Rule 45 of the Rules of Court is generally limited to reviewing errors of law. The Court is not the proper venue
to consider a factual issue as it is not a trier of facts. This rule, however, is not ironclad and a departure
therefrom may be warranted where the findings of fact of the CA are contrary to the findings and conclusions of
the NLRC and LA, as in this case. In this regard, there is therefore a need to review the records to determine
which of them should be preferred as more conformable to evidentiary facts.
The prevailing rule under Section 20 (B) of the 1996 POEA-SEC on compensation and benefits for injury or
illness was that an employer shall be liable for the injury or illness suffered by a seafarer during the term of his
contract. To be compensable, the injury or illness must be proven to have been contracted during the term of the
contract. However, the employer may be exempt from liability if he can successfully prove that the cause of the
seamans injury was directly attributable to his deliberate or willful act as provided under Section 20 (D)
thereof, to wit:
D. No compensation shall be payable in respect of any injury, incapacity, disability or death of the
seafarer resulting from his willful or criminal act, provided however, that the employer can prove that
such injury, incapacity, disability or death is directly attributable to seafarer.
Hence, the onus probandi falls on the petitioners herein to establish or substantiate their claim that the
respondents injury was caused by his willful act with the requisite quantum of evidence.

Q: Can a question of fact be raised in appeal by Certiorari to the Supreme Court under Rule
45?
Answer: (J.Velasco). At the outset, it is clear that the issue submitted for resolution is a
question of fact which is proscribed by the rule disallowing factual issues in appeal by
certiorari to the Supreme Court under Rule 45. This is explicit in Rule 45, Section 1 that
petitions of this nature shall raise only questions of law which must be distinctly set forth.
Petitioner would like the Court to examine the pleadings and documentary evidence extant
on the records of the Labor Arbiter to determine if said official indeed made a finding on the
existence of alleged employer-employee nexus between the parties based on the facts
contained in said pleadings and evidence. Evidently this issue is embraced by the
circumscription. (St. Martin Funeral Jomes vs. National Labor Relations Commission, G.R.
No. 142351 November 22, 2006)

4. Award of Attorneys Fees

- Nature of award
- Grounds for award
-maximum amount
Q. Can monetary award be granted based on equity?
Answer: Yes. Luna v. Allado Construction, May 30, 2011; Villaruel v. Yeo Han Guan, June 1, 2011: Even if
there is a finding that the employee indeed resigned and was not dismissed, the employee may still be granted
financial assistance on equity considerations.

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Q. Will the sale of a company asset give rise to a preference of credit in favor of its
employees in accordance with Art. 110 of Labor Code?
Answer: (J. Velasco) NO. -We agree with the company that a judgment lien over the subject
properties has not legally attached and that Art.110 of the Labor, in relation to Arts 2242,
2243, and 2244 of the Civil Code on concurrence and preference of credits, does not cover
the subject properties. Art. 110 of the Labor Code applies only to cases of bankruptcy
and liquidation. Likewise, the abovementioned articles of the Civil Code on concurrence
and preference of credits properly comes into play only in cases of insolvency. Since
there is not bankruptcy or insolvency proceeding to speak of, much less a liquidation of the
assets of DWUT, the Union cannot look to said statutory provision for support. (Associated
Labor Unions (ALU) vs. Court of Appeals, G.R. No. 156882, October 31, 2008)

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