6. WHAT IS A YELLOW DOG CONTRACT?

It is one which exacts from workers as a condition of employment that they shall not join or
belong to a labor organization, or attempt to organize one during their period of employment or that
they shall withdraw therefrom in case they are already members of a labor organization.

COMMON STIPULATIONS IN A YELLOW DOG CONTRACT.

A typical yellow dog contract embodies the following stipulations:

(1) A representation by the employee that he is not a member of a labor organization;

(2) A promise by the employee that he will not join a union; and
(3) A promise by the employee that upon joining a labor organization, he will quit his
employment.

The act of the employer in imposing such a condition constitutes unfair labor practice under
Article 248(b) of the Labor Code. Such stipulation in the contract is null and void.

7. NO STRIKE NO LOCKOUT CLAUSE (guys, hindi ko Makita sa chan. Ito lang nakalagay sa UP, phelp
kung may Makita kayo)

Q: When does the No StrikeNo Lockout clause in the CBA apply?

A: The no strikeno lockout clause in the CBA applies only to economic strikes. It does not apply to
ULP strikes. Hence, if the strike is founded on an unfair labor practice of the employer, a strike declared
by the union cannot be considered a violation of the no strike clause. (Master Iron Labor Union v.
NLRC, G.R. No. 92009, Feb. 17, 1993)

Q: Is a no strike/lockout clause legal?

A: Yes, but it is applicable only to economic strikes, not ULP strikes. As a provision in the CBA, it is a
valid stipulation although the clause may be invoked by an employer (Er) only when the strike is
economic in nature or one which is conducted to force wage or other concessions from the Er that are
not mandated to be granted by the law itself. It would be inapplicable to prevent a strike which is
grounded on ULP. (Panay Electric Co. v. NLRC, G.R. No. 102672, Oct. 4, 1995; Malayang Samahan ng
mga Manggagawa sa Greenfield v. Ramos, G.R. No. 113907, Feb. 28, 2000)

8. STATUTORY COOLING OFF PERIOD

OBSERVANCE OF THE COOLING-OFF PERIOD

a. GENERAL RULE.
The cooling-off periods provided under the law before the intended date of the actual mounting of the
strike are as follows:

1. In case of bargaining deadlock, the cooling-off period is thirty (30) days from the filing of the
notice of strike; or
2. In case of unfair labor practice, the cooling-off period is fifteen (15) days from the filing of the
notice of strike.

b. EXCEPTION: IN CASE OF UNION-BUSTING.

In case of dismissal from employment of union officers (not ordinary members) duly elected in
accordance with the union constitution and by-laws which may constitute union-busting because the
existence of the union is threatened by reason of such dismissal, the 15-day cooling-off period does
not apply and the union may take action immediately after the strike vote is conducted and the
results thereof duly submitted to the regional branch of the NCMB.

In cases of union-busting, only the 15-day cooling-off period need not be observed; all the other
requisites must be fully complied with.

c. RECKONING OF THE COOLING-OFF PERIODS.

The start of the cooling-off periods should be reckoned from the time the notice of strike is filed with
the NCMB-DOLE, a copy thereof having been served on the other party concerned.

d. PURPOSE OF THE COOLING-OFF PERIODS.

The purpose of the cooling-off periods is to provide an opportunity for mediation and conciliation of the
dispute by the NCMB-DOLE with the end in view of amicably settling it.

7-DAY WAITING PERIOD OR STRIKE BAN

a. PURPOSE OF THE 7-DAY WAITING PERIOD OR STRIKE BAN.

The seven (7) day waiting period is intended to give the NCMB-DOLE an opportunity to verify whether
the projected strike really carries the approval of the majority of the union members.

b. WAITING PERIOD/STRIKE BAN VS. COOLING-OFF PERIOD.

The 7-day waiting period or strike ban is a distinct and separate requirement from the cooling-off
period prescribed by law. The latter cannot be substituted for the former and vice-versa.

The cooling-off period is counted from the time of the filing of the notice of strike. The 7-day waiting
period/strike ban, on the other hand, is reckoned from the time the strike vote report is submitted to
the NCMB-DOLE. Consequently, a strike is illegal for failure to comply with the prescribed mandatory
cooling-off period and the 7-day waiting period/strike ban after the submission of the report on the
strike vote.

c. BOTH MUST BE COMPLIED WITH SEPARATELY AND DISTINCTLY FROM EACH OTHER.
The requirements of cooling-off period and 7-day waiting period/strike ban must both be complied
with. The labor union may take the strike vote and report the same to the NCMB-DOLE within the
statutory cooling-off period. In this case, the 7-day waiting period/strike ban should be counted from
the day following the expiration of the cooling-off period. A contrary view would certainly defeat and
render nugatory the salutary purposes behind the distinct requirements of cooling-off period and the
waiting period/strike ban.

The NCMB Primer on Strike, Picketing and Lockout,1 issued by the NCMB, the agency of government
directly tasked with the implementation and enforcement of this particular legal provision and
requirement, is very clear on this point, thus:

In the event the result of the strike/lockout vote ballot is filed within the cooling-off
period, the 7-day requirement shall be counted from the day following the expiration of the
cooling-off period.

In other words, the seven (7) days should be added to the cooling-off period of fifteen (15) days, in
case of unfair labor practice, or thirty (30) days, in case of collective bargaining deadlock and it is only
after the lapse of the total number of days after adding the two (2) periods that the strike/lockout may
be lawfully and validly staged. While there was no categorical declaration on this point, the Supreme
Court, in holding in the 2010 case of Phimco Industries, Inc. v. Phimco Industries Labor
Association (PILA), that respondents fully satisfied the legal procedural requirements, noted that the
strike notice grounded on collective bargaining deadlock was filed on March 9, 1995. Consequently,
the 30-day cooling-off period would have lapsed on April 9, 1995. The strike vote was reached on
March 16, 1995 and the notification thereof was filed with the DOLE on March 17, 1995 or well
within the cooling-off period. Based on the said rule in the NCMB Primer, the strike could only be validly
staged starting from April 17, 1995 and onwards, i.e., after the lapse of 7 days from April 9, 1995.
Hence, since the actual strike was launched only on April 25, 1995, there was clearly full
compliance with the requisites.

Example: In a case where the notice of strike grounded on ULP is filed on October 1, 2015, and the
strike vote is taken within the cooling-off period, say, on October 5, 2015 and the strike vote report
showing majority support for the intended strike is submitted to the NCMB-DOLE the following day,
October 6, 2015, the question is when can the union legally stage the strike?

Following the above principle, the answer obviously is on October 24, 2015 or any day thereafter.
This is so because the 15-day cooling-off period for ULP expires on October 16 and adding the 7-day
strike ban which should be counted from the day following the expiration of the cooling-off period,
the 7th day would be on October 23, 2015. Obviously, the strike cannot be conducted on the 7th day
but rather after the lapse thereof; hence, it is only on October 24, 2015 and onwards that the union
may lawfully conduct the strike.

d.. SOME PRINCIPLES ON COOLING-OFF PERIOD AND 7-DAY WAITING PERIOD.

Deficiency of even one (1) day of the cooling-off period and 7-day strike ban is fatal.
One-day strike without complying with the 7-day strike ban is illegal.

9. WHAT IS AN ECONOMIC STRIKE?

Economic strike - one declared to demand higher wages, overtime pay, holiday pay, vacation pay, etc.
It is one which is declared for the purpose of forcing wage or other concessions from the employer for
which he is not required by law to grant.

10. LABOR ONLY CONTRACTING

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

(a) The contractor does not have substantial capital or investments in the form of tools, equipment,
machineries, work premises, among others, and the employees recruited and placed are
performing activities which are usually necessary or desirable to the operation of the
company, or directly related to the main business of the principal within a definite or
predetermined period, regardless of whether such job, work or service is to be performed or
completed within or outside the premises of the principal; OR

(b) The contractor does not exercise the right of control over the performance of the work of the
employee.

NOTE: Even if only one of the two (2) elements above is present, there is labor-only contracting.

What are the effects of labor-only contracting?

1. The labor-only contractor will be treated as the agent or intermediary of the principal. Since the act
of an agent is the act of the principal, representations made by the labor-only contractor to the
employees will bind the principal.

2. The principal will become the employer as if it directly employed the workers supplied by the labor-
only contractor to undertake the subcontracted job or service. It will be responsible to them for all their
entitlements and benefits under labor laws.

3. The principal and the labor-only contractor will be solidarily treated as the direct employer.

4. The employees will become employees of the principal, subject to the classifications of employees
under Article 280 of the Labor Code.

What are the distinctions between legitimate job contracting and labor-only contracting?

The chief distinctions between legitimate job contracting, on the one hand, and the prohibited labor-
only contracting, on the other, may be summed up as follows:

1. In the former, no employer-employee relationship exists between the contractual employees of the
job contractor and the principal; while in the latter, an employer-employee relationship is created by
law between the principal and the contractual employees supplied by the labor-only contractor.

2. In the former, the principal is considered only an indirect employer, as this term is understood
under Article 107 of the Labor Code; while in the latter, the principal is considered the direct
employer of the contractual employees in accordance with the last paragraph of Article 106 of the
Labor Code.
3. In the former, the joint and several obligation of the principal and the legitimate job contractor is
only for a limited purpose, that is, to ensure that the employees are paid their wages. Other than this
obligation of paying the wages, the principal is not responsible for any claim made by the contractual
employees; while in the latter, the principal becomes jointly and severally or solidarily liable with the
labor-only contractor to the latters employees in the same manner and extent that the principal is
liable to employees directly hired by him/her, as provided in Article 106 of the Labor Code, as
amended.

4. In the former, the legitimate job contractor undertakes to perform a specific job for the principal;
while in the latter, the labor-only contractor merely provides, supplies, recruits and places the
personnel to work for the principal.

What are the prohibitions other than labor-only contracting?

Contracting out of jobs, works or services when not done in good faith and not justified by
the exigencies of the business such as the following:

(1) Contracting out of jobs, works or services when the same results in the termination or reduction of
regular employees and reduction of work hours or reduction or splitting of the bargaining unit.

(2) Contracting out of work with a "Cabo." "Cabo" refers to a person or group of persons or to a labor
group which, in the guise of a labor organization, cooperative or any entity, supplies workers to an
employer, with or without any monetary or other consideration, whether in the capacity of an agent of
the employer or as an ostensible independent contractor.

(3) Taking undue advantage of the economic situation or lack of bargaining strength of the contractor's
employees, or undermining their security of tenure or basic rights, or circumventing the provisions of
regular employment, in any of the following instances:
(i) Requiring them to perform functions which are currently being performed by the regular
employees of the principal; and
(ii) Requiring them to sign, as a precondition to employment or continued employment, an
antedated resignation letter; a blank payroll; a waiver of labor standards including minimum wages
and social or welfare benefits; or a quitclaim releasing the principal, contractor or from any liability as
to payment of future claims.

(4) Contracting out of a job, work or service through an in-house agency.

(5) Contracting out of a job, work or service that is necessary or desirable or directly related to the
business or operation of the principal by reason of a strike or lockout whether actual or imminent.

(6) Contracting out of a job, work or service being performed by union members when such will
interfere with, restrain or coerce employees in the exercise of their rights to self-organization as
provided in Art. 248 (c) of the Labor Code, as amended.