Lecture On Labor Rel - gmg.NEW1

LECTURE ON THE LAW
ON
LABOR RELATIONS
BY:
JUDGE GENER M. GITO, LL.M., D.C.L.
(c)
STRUCTURE OF LECTURE
Constitutional
Underpinning
Article
254
[244].
Right
of
employees in the public service.
Employees
of
government
corporations established under the
Corporation Code shall have the right
to organize and to bargain collectively
with their respective employers. All other
employees in the civil service shall have
the right to form associations for
purposes not contrary to law.
EXCEPTIONS
EXCEPTIONS
2010 Bar Question

A, an employee of XYZ Cooperative,
owns 500 shares in the cooperative.
He has been asked to join the XYZ
Cooperative Employees Association.
He seeks your advice on whether he
can join the association. What advice
will you give him?
Answer
I will advice him not to join the
Association
of
Employees.
Jurisprudence tells us that employeemember of cooperative cannot join
or form labour organization for the
purpose of collective bargaining. A is
part owner of the cooperative. Thus,
he cannot bargain against himself.
TYPES OF EMPLOYEES FOR

PURPOSES OF RIGHT TO
SELF-ORGANIZATION

PURPOSES OF RIGHT TO SELFORGANIZATION
A. Managerial Employee
refers to an employee who is
vested
with
powers,
or
prerogatives to lay down and
execute management policies
or to hire, transfer, suspend,
lay off, recall, discharge,
assign
or
discipline
employees.

PORPOSES OF RIGHT TO SELFORGANIZATION
B.
Supervisory Employees
Supervisory employees are those
who, in the interest of the employer,
effectively
recommend
such
managerial actions if the exercise of
such authority is not merely routinary
or clerical in nature but requires the
use of independent judgment.
But to make one a supervisor, the

power to recommend must not
merely routinary or clerical in
nature but must require the use
of an independent judgment
Discretionary or
judgmental
Independent
Effective
Supervisory
Employees
Laguna Colleges vs. CIR, 25 SCRA
173
This case analyzed the function of area

supervisor for the purpose determining
whether she is a supervisory employee.
The recommendation submitted by area
supervisor is subject to the review and
final approval of the principal and such
recommendation is considered with a grain
of salt.
Efficiency ratings of the area supervisor
can be prevailed upon by the principal

PORPOSES OF RIGHT TO SELFORGANIZATION
C.
Rank
and
file
Employees
All
employees
not
falling
within any of the above
definitions are considered
rank-and-file
employees
for purposes of this Book.
Importance of
Classification
Ineligibility of Managerial
Employees
Article
255
[245].
Ineligibility
of
managerial employees to join any labor
organization;
Right
of
Supervisory
Employees. - Managerial employees are not
eligible to join, assist or form any labor
organization. Supervisory employees shall
not be eligible for membership in the collective
bargaining unit of the rank-and-file employees
but may join, assist or form separate collective
bargaining units and/or legitimate labor
organizations of their own. The rank-and-file
union and the supervisors union operating
within the same establishment may join the
same federation or national union.
May confidential
employees join,
assist or form any
labor organization?
Who are confidential

employees?
Confidential employee employees whose
nature of function is to assist in confidential
capacity to, or have access to confidential
matters of persons who exercise managerial
function in the field of labor relations
They are those 1) who assist or act in a
confidential capacity 2) to persons who
formulate,
determine
and
effectuate
management policies in the field of labour
relations.
May confidential
employees join, assist or
form any labor
organization?
Confidential employees are not
allowed to join, assist or form any
labor organization.
Basis: Metrolab Industries Inc.
vs. Confesor, G.R. No. 108855,
February
28,
1996;
SMS
Supevisor vs. Laguesma
Article 246. Non-abridgment of

right to self-organization
Article 256 [246]. Non-abridgment of
right to self-organization. It shall be
unlawful for any person to restrain, coerce,
discriminate against or unduly interfere with
employees and workers in their exercise of
the right to self-organization. Such right shall
include the right to form, join, or assist labor
organizations for the purpose of collective
bargaining through representatives of their
own choosing and to engage in lawful
concerted activities for the same purpose or
for their mutual aid and protection, subject
to the provisions of Article 264 of this Code.
Problem No. 1
In a certification election of the rank and file
employees of X Co., Roberta and Carlota who
are the respective executive secretaries of the
President and Executive Vice President for
Human Resource of X Co., desired to
participate in the said certification. To realize
their desire to participate in the certification
election, they joined Union A.
If you were the counsel for Union B, the
contending union, what will you do to
protect the interest of your client Union?
Answer
If I were the counsel for Union B, I will object to
the participation of Roberta and Carlota in the
certification election. Roberta and Carlota,
being confidential employees are prohibited
from joining, assisting and forming labour
organization for the purpose of collective
bargaining. Moreover, they are also not
allowed to join Union A as they are outside the
bargaining unit of the rank and file employees;
being confidential employees, they are
considered members of managerial staff.
Problem No. 2
Carlota is holding the position of HR
Supervisor. His function are as follows: 1)
conducts survey evaluation among the rank
and file employees as to the performance of
their
section
supervisors;
2)
gives
examinations to those rank and file employees
who seek promotion; 3) tally the result of the
survey
evaluation
and
result
of
the
examination and on the basis of the numeral
result, recommend the promotion of the
employees concerned.
Questions
Answer 1
A. Carlota is not a supervisory employee despite her
job appellation as such. Supervisory employees are
those who, in the interest of the employer,
effectively recommend such managerial actions if
the exercise of such authority is not merely routinary
or clerical in nature but requires the use of
independent judgment. In the problem, the exercise
of Carlotas power to recommend is routinary and
clerical. She only bases her recommendation on the
basis of the numerical result of the evaluation and
examination. Thus, her recommendation is not
discretionary and judgemental.
Answer 2
B. Carlota may not join, assist or form
labour organization for the purpose of
collective bargaining. Carlota, by the
nature of her job, is a confidential
employee.
She
holds
confidential
information in the field of labour relations
which
makes
him
a
confidential
employee. Thus, being a confidential
employee, jurisprudence prohibits her to
join, assist or form labour organization.
2004 Bar Question

MPH Labour Union is the duly certified
bargaining representative of the rank and
file employees of MM Park Hotel since
1970s. The CBA contained union shop
security provisions. After the signing of
the 2000-2005 CBA, the union demanded
the resignation of Carlo, Carla, and Lito.
The Hotel Management replied that it was
legally impossible to comply with the
demand of the Union.
2004 Bar Question

It appeared that Carlo, Carla and Lito were
recently promoted as supervisors which is the
reason why they resigned from the Union. But
according to the Union, the three submitted
resignations outside the freedom period. The
Union further argued that the Management
could not skirt away its obligation to respect
and implement the union security clause by
promoting the three employees. That could
be viewed as rewarding employees for their
disloyalty to union, said the union officers.
2004 Bar Question
Answer
With respect to the first question, union
security clause may not be used to justify the
demand to dismiss the promoted employees
who were formerly members of the rank and
file union. As supervisors, they are no longer
covered by the CBA of the employer and the
rank and file union. Their resignation is not an
act of disloyalty. They just obey the law which
requires that they cannot be member of a
union of the rank and file union.
Answer
With respect to the second question,
the Management may validly refuse
the demand of the Union. As stated
above, supervisory employees may
not join the union of the rank and file;
although they may join, assist or form
a union of their own
Concepts to
Remember
Labour Organizations - Any union or
association of employees which exists in whole
or in part for the purpose of collective
bargaining or of dealing with employees
concerning the terms and conditions of
employment [Article 219 (g)]
Legitimate labour organizations LO which
is registered with the DOLE [Article 219 (h)]
Union LO in the private sector organized for
collective bargaining and for other legitimate
purposes
Applications of
Concepts
How is a labour
organization registered?
Federation or National
Union
Registration fee
Names of its officers, their addresses, the principal address
of labour organization, the minutes of organizational
meeting and list of workers who participated in such
organization meetings
If the applicant union has been in existence for one or
more years, copies of its annual financial reports
4 copies of the constitution and by laws of the applicant,
minutes its adoption or ratification and the list of the
members who participated in it
Proof of affiliations of at least 10 locals or chapters which
must be a duly recognized collective bargaining agent
The names and addresses of the companies where the
local or chapter operates and list of all member.
Independent Union
Registration fee
Names of its officers, their addresses, the principal
address of labor organization, the minutes of
organizational meeting and list of workers who
participated in such organization meetings
The names of all its members comprising at least
20% of all the employees in the bargaining unit
where it seeks to operate
If the applicant union has been in existence for one
or more years, copies of its annual financial reports
4 copies of the constitution and by laws of the
applicant, minutes its adoption or ratification and the
list of the members who participated in it
Charter Union
Charter certificate indicating the
creation of local chapter
The names of chapters officers, their
addressees and the principal office of
the chapter
The chapters Constitution and by
laws: Provided that where the
Chapters Constitution and by-laws
are the same, statement of such fact
Tentative Legal
Personality
What are the grounds for

the cancellation of LOs
certificate of registration?
Misrepresentation, false statement or fraud in
connection with the adoption or ratification of
the constitution and by laws or amendments
thereof, the minutes of the ratification, and the
list of members who took part in the ratification
Misrepresentation, false statement or fraud in
connection with the election of officers,
munutes of the election and list of voters
Voluntary dissolution by the members
Article [239] 246, (LC)
Effect of inclusion as
members of employees
outside the bargaining unit
Article 255 [245-A] - The inclusion
as union members of employees
outside the bargaining unit shall
not be a ground for the cancellation
of the registration of the union.
Said employees are automatically
deemed removed from the list of
membership of said union.
2010 Bar Question

Company XYZ has two recognized labor
unions,
one
for
its
rank-and-file
employees
(RFLU),
and
one
for
supervisory employees (SELU). Of late,
the company instituted a restructuring
program by virtue of which A, a rank-andfile employee and officer of RFLU, was
promoted to a supervisory position along
with four (4) other colleagues, also active
union members and/or officers.
2010 Bar Question

Labor Union KMJ, a rival labor union
seeking recognition as the rank-and-file
bargaining agent, filed a petition for the
cancellation of the registration of RFLU
on the ground that A and her colleagues
have remained to be members of RFLU.
Is the petition meritorious?

Explain.
Answer
NO. The petition is not meritorious.
Under the Article 245-A (254), the
inclusion as union members of
employees outside the bargaining
unit shall not be a ground for the
cancellation of the registration. Said
employees are automatically deemed
removed.
Voluntary Cancellation
Article 247 (239-A). Voluntary cancellation of
registration. - The registration of a legitimate
labor organization may be cancelled by the
organization itself: Provided, That at least
two-thirds of its general membership
votes, in a meeting duly called for that
purpose to dissolve the organization:
organization
Provided, further, That an application to
cancel registration is thereafter submitted
by the board of the organization, attested
to by the president thereof.
thereof
Effect of Petition for

Cancellation
Problem No. 3
There are 3 unions in ABC Co.: Unions A, B, and C.
Union A filed a Petition for Certification Election.
Sensing that Union A will win in the certification
election, Union B filed a Petition for cancellation of
Union As registration on the ground that some of
the supervisory employees are members of said
Union. On account of the filing by Union B of a
petition for cancellation of Union As registration,
the former subsequently filed a Motion to suspend
certification election until the issue of Union As
cancellation of registration is resolved.
Questions
Answer
A. The ground relied upon by Union B for the
cancellation of the registration of Union A is not
valid. Under the LC The inclusion as union
members of employees outside the bargaining
unit shall not be a ground for the cancellation
of the registration of the union. Said employees
are automatically deemed removed from the
list of membership of said union. Besides, there
are only three grounds for the cancellation of
Unions registration.
Answer
B.
If I were the Med-Arbiter, I
will deny to Motion of Union B.
The LC clearly provides that The
petition for cancellation does not
suspend the proceedings on
certification election nor shall it
prevent the filing of petition for
certification election.
Rights and Conditions of

Membership in Labour
Organizations

Membership in Labor
Organizations
Right over money matters

Rights against unauthorized collection or
unauthorized disbursement
Right to vote on officers compensation
Members right against excessive fees
Right to require adequate records of income
and expenses and access to financial records
Right
to
vote
on
proposed
special
assessments

Membership in Labor
Organizations
Points to Consider
Points to Consider
Article 249 [o] (241)
Other than for mandatory activities
under the Code, no special assessments,
attorneys fees, negotiation fees or any other
extraordinary fees may be checked off from
any amount due to an employee without an
individual written authorization duly signed
by the employee. The authorization should
specifically state the amount, purpose and
beneficiary of the deduction;
Points to Consider
Exceptions to individual authorization
Other than for mandatory activities under the Code
Agency fees - Employees of an appropriate bargaining
unit who are not members of the recognized collective
bargaining agent may be assessed a reasonable fee
equivalent to the dues and other fees paid by members
of the recognized collective bargaining agent, if such
non-union members accept the benefits under the
collective bargaining agreement: Provided, that the
individual authorization required under Article 242,
paragraph (o) of this Code shall not apply to the nonmembers of the recognized collective bargaining agent
(Article 258 e [248])
Problem No. 4
There are 2 Unions in X Co.: Unions A and B. Union A is
the exclusive bargaining representatives of the rank
and file employees of X Co. Union A was able to
successfully forge a CBA with X Co. The execution of
CBA gives each rank and file employee a total
economic package of 15K a month. Union A charges all
rank and file employees who are not its members a fee
equivalent to the fee being paid by the members of
Union A. X Co. on the basis of the request of Union A,
checked off said fee from the salary of the concerned
employees. Said employees protested on the ground
that they have not executed written authorization to
that effect.
Question
Answer
The contention of the concerned
employee is not tenable. What is
being charged from them by
Union A is an agency fee. Under
the LC, the requirement of
individual authorization for a valid
check-off is not required in case
of agency fee.
Rights of Legitimate
Labour Organizations
Labor Organizations
Labor Organizations
Employee Participation
in Policy and Decision
Making
Article
[255]
266.
Exclusive
bargaining
representation and workers participation in policy
and decision-making.
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.
Constitutional
Underpinning
A close scrutiny of the objectionable

provisions of the Code reveals that they are
not purely business-oriented nor do they
concern the management aspect of the
business of the company as in the San
Miguel case. The provisions of the Code
clearly
have
repercussions
on
the
employee's right to security of tenure. The
implementation of the provisions may result
in the deprivation of an employee's means
of livelihood which, as correctly pointed out
by the NLRC, is a property right.
In view of these aspects of the case

which border on infringement of
constitutional rights, we must uphold
the constitutional requirements for
the protection of labor and the
promotion of social justice, for these
factors, according to Justice Isagani
Cruz, tilt "the scales of justice when
there is doubt, in favor of the worker"
Petitioner's assertion that it needed the

implementation of a new Code of Discipline
considering the nature of its business cannot
be overemphasized. In fact, its being a local
monopoly in the business demands the most
stringent of measures to attain safe travel for
its patrons. Nonetheless, whatever disciplinary
measures are adopted cannot be properly
implemented in the absence of full cooperation
of the employees. Such cooperation cannot be
attained if the employees are restive on
account, of their being left out in the
determination of cardinal and fundamental
matters affecting their employment.
Exclusive Bargaining
Representation
Bargaining Unit
A group of employees of a given
employer, comprised of all but not all
or less than all the entire body of the
employees, which consistent to the
equity to the employer, indicate to
the best suited to serve the
reciprocal rights and duties of the
parties
under
the
collective
bargaining provision of the law.
Appropriate
Bargaining Unit
Appropriate Bargaining
Unit
Community
of Interest or doctrine of
substantial interest
Similarity
in the scale and manner in

determining earnings
Employment benefits, hours of work
and other terms and conditions of
employment
Qualifications, skills and training.
Community of Interest or
Doctrine of Substantial
Interest
Frequency of contract or interchange
among employees
Common
supervision
and
determination of labor relations policy
History
of
previous
collective
bargaining
Desires of the effected employees
Extent of union organization
Determining
the
scope
or
membership of the bargaining
unit is significant and farreaching because it leads to the
determination
also
of:
The
employees who can vote in the

certification
election;
(1)
employees who can vote in the
certification
election;
(2)
the
employees to be represented in
bargaining with the employer; (3)
the employees who will covered by
resulting CBA
Importance of
distinguishing CBU from
the Union
Problem No. 5
X Co. has 300 employees. 30 of which are
supervisory employees. 50 of which are nonunion members. Union A is the exclusive
bargaining representative of the rank-in-file
employees of X Co., being the only Union in
the latter company. Union is negotiating for a
collective bargaining agreement with X Co.
The Union and the management could not
agree on some economic package which
resulted in a deadlock. The union filed a
notice of strike.
Questions
In conducting a strike vote, who are
allowed to participate?
Suppose a CBA is entered into who
shall ratify the CBA?
Suppose there are two or more
unions vying to become the exclusive
bargaining representatives, who shall
vote on a certification election?
Answers
Answers
Answers
METHODS OF
DETERMINING
BARGAINING
REPRESENTATIVE
A. Voluntary
Recognition
Requisites:
1. Is possible only in
unorganized establishment
2. Only one union is asking
for recognition
3. Union recognized should
be the majority union
Requirements for
Recording Voluntary
Recognition
joint statement under oath of voluntary
A
recognition
Certificate of posting of the joint statement
from 15 days in at least 2 conspicuous places
Approximate number of employees and the
list those employees who support voluntary
recognition comprising at least majority of the
members of the BU
Statement the Union is the only organization
B. Certification
Election
The process of determining

by secret ballot the sole
and exclusive bargaining
agent of the employees in
an
appropriate
bargaining agent.
Who files petition for

certification election
(PCE)?
It may be filed by a legitimate labor

organization or employer
A local or charter which has been
issued a charter certificate by the
National union or federation
National union or federation in behalf
of its local or chapter. In this case the
National union need not disclose the
local/chapters officer and members.
When to file?
When to file?
When to file PCE?
Grounds for Denial of

PCE
A. Non-appearance
B. Illegitimacy (unregistered or no
charter)
C. Absence of employment relationship
D. Election Bar Rule (12 months)
E. Negotiation or Deadlock bar rule
F. Contract bar rule
G. Lack of Support
A. Non- Appearance
Under the IRR of the Labor Code, if
the petitioner does not appear for
two successive conferences called
by the Med-Arbiter, the petition
may be dismissed, after it is shown
that the petitioner was duly notified
D.O. No. 40-F-03
B. Illegitimacy
Only a legitimate labor organization
can file PCE. Thus, if the petitioning
union is not listed in the DOLEs list
of LLO or if the registration has been
cancelled with finality, these facts
will authorize the Med-Arbiter to
dismiss the PCE
Does the filing of petition

to cancel union registration
cause the suspension of
PCE?
Article 245 [238-A] Effect of a petition
for cancellation of registration. - A
petition
for
cancellation
of
union
registration
shall
not
suspend
the
proceedings for certification election nor
shall it prevent the filing of a petition for
certification election.
C. No EmployerEmployee
The employees right to unionize and the
unions right to file PCE are founded on
the existence of employer-employee
relationship. Where this is absent, the
petition has no legal and therefore should
be dismissed.
The employer, notified about the petition,
may invoke and prove the absence of
employer-employee relationship.
Does the Med-Arbiter or the

Secretary have the authority to
determine the existence of an
employer-employee
relationship between the
parties in the PCE?
D. 12 Month Bar Rule
There can be no determination of

bargaining representative within a year
of the proclamation of the results of the
CE. Here the results, which showed that
61% of the employees voted for new
union, were certified only on February
25, 1991 but on December 1, 1991,
Permex already recognized the union
and entered into a CBA. This is dubious.
E. Negotiation or
Deadlock Bar Rule
When is deadlock bar not

applicable?
F. Contract Bar Rule
What if the PCE is filed after the 5

year term of the CBA which is
already outside the freedom period?
National Congress of
Unions vs. Ferrer-Calleja,
(1992)
The contract bar rule is applicable in a

situation where the CBA was automatically
extended by operation of law under Article
253 which provides:
It shall be the duty of both parties to keep
the status quo and to continue in full force
and effect the terms and conditions of the
existing agreement during the 60-day
period or until a new agreement is reached
by the parties.
Will contract bar rule bar

the PCE if the CBA is
entered before or within
the freedom period?
N.B.
G. Lack of Support
Requirement when there is existing
CBA:
25% of the employees in the bargaining
unit
If a petition for certification election lacks
25% support because union members has
withdrawn their membership, may the
petition be still granted?
It depends on when the members withdrew
their signatures.
Appeal of the Order

Granting or Denying
Petition
Problem No. 6
X Co. needed 40 janitors, on top of its existing 40
janitors. Consequently, it entered into supply of
service contract with Y Janitorial Service, one of
the well-organized and capitalized janitorial
services in the country. 40 janitors of Y Janitorial
Service were assigned to X Co. The 40 janitors
assigned to X Co. organized themselves into a
labour Union and had it registered with the DOLE.
After it was registered, it filed a Petition for
Certification election in order to be certified as the
exclusive bargaining representative of
all the
janitors of X Co.
Question
Answer
If I were the counsel of X Co, I will file a Motion
to Dismiss the Petition for Certification filed by
the Union of 40 janitors. My ground in filing a
Motion to Dismiss is the absence of employeremployee relationship.
The employees right to unionize and the
unions rights to file a petition for CE are
founded on the existence of employer-employee
relationship.
Problem No. 7
X Co has an existing 5 year CBA with Union A
which is about to expire on March 30, 2014.
On January 15, 2015, X Co and Union A
negotiated and eventually renewed the CBA
for another 5 years starting from April 1,
2014. On March 15, 2014, Union B, a
contending union, filed a Petition for
Certification election. Union A filed a Motion
to Dismiss on the ground of contract bar rule
inasmuch as a new CBA has already been
renewed by Union A and X Co.
Question
Answer
If I were the Med-Arbiter, I will deny
the Motion to Dismiss.
The IRR of the Labour Code
provides that the representation
case shall not be adversely
affected by a CBA registered
before or during the last sixty
(60) days of the subsisting CBA.
Question
Answer
No. Union Bs Petition for Certification Election
is barred by contract bar rule.
It is provided under the LC that it shall be the
duty of both parties to keep the status quo and
to continue in full force and effect the terms
and conditions of the existing agreement during
the 60-day period or until a new agreement is
reached by the parties. Thus, the CBA is
automatically renewed by operation of law.
Run-off Election
A valid election took place because
majority of the CBU members voted
At least three choices
Not one obtained majority
Total union votes is at least 50%
No challenged votes or election
protest that would materially affect
the result of election
Problem No. 8
CBU has 100 members, result:
Union A 20
Union B 15
No Union - 5
Will there be run off
election?
Answer
No, there will not be run-off election. The following
are the requirements for a run-off election: A valid
election took place because majority of the CBU
members voted; at least three choices; not one
obtained majority; total union votes is at least 50%;
no challenged votes or election protest that will
materially affect the result of the election. In the
given problem, there is no valid election that took
place because not more than 50% of the employees
participated in the certification election.
Problem No. 9

Everyone voted, Result:
Union A 25
Union B 20
No Union - 55
Will there be run off election?
Answer
No, there will not be run-off election. The
following are the requirements for a run-off
election: A valid election took place because
majority of the CBU members voted; at least
three choices; not one obtained majority;
total union votes is at least 50%; no
challenged votes or election protest that will
materially affect the result of the election. In
the given problem, the no-union choice won
as it obtained the majority.
Problem No. 10
80 voted
Union A 30
Union B 15
Union C 20
No Union - 15
Will there be run off election?
Answer
Yes, there will be a run-off election. The
following are the requirements for a run-off
election: A valid election took place because
majority of the CBU members voted; at least
three choices; not one obtained majority; total
union votes is at least 50%; no challenged
votes or election protest that will materially
affect the result of the election. All the
requirements are present in the given
problem. The run-off election will be between,
Union A and Union B.
2009 Bar Question

Among the 400 regular rank and file workers of
MNO co., a certification election was ordered
conducted by the Med-Arbiter of the Region. The
contending parties obtained the following votes:
Union A 70
Union B 71
Union C 42
Union D 33
No Union 180
Spoiled votes 4
Question 1
There were no objections or challenges
raised by any party on the results of
the election
Can Union B be certified as the sole
and exclusive collective bargaining
agent among the rank and file workers
of MNO Co considering that it garnered
the highest number of votes among the
contending unions? Why and why not?
Answer
No. To be certified as bargaining
agent, the required is the majority of
the valid votes cast which in the
given problem is 199. Since Union B
got only 71 votes, it cannot be
certified as the sole and exclusive
bargaining agent of MNOs rank and
file workers
Question 2
May the management legally ask for
the absolute termination of the
certification election proceedings
because 180 of the workers a clear
plurality of the voters have chosen
not to be represented by any union?
Answer
No because 216 or the majority of the
workers want to be represented by a
Union as bargaining agent. Hence, a clear
majority is in favor of being represented
by the union. Moreover, Under the Article
(258-A), 270, in all cases, whether the
PCE is filed by an employer or legitimate
labour organization, the employer shall
not be considered a party thereto with
concomitant right to oppose the petition.
Question 3
If you were the duly designated
election officer in this case, what
would you do to effectively achieve
the
purpose
of
certification
proceedings. Discuss.
Answer
I will conduct a run-off election. All the
elements of a valid run-off election
are present. They are: A valid election
took place because majority of the
CBU members voted, at least three
choices; not one obtained majority;
total union votes is at least 50%; no
challenged votes or election protest
that will alter the result of the election
Consent Election
If during the preliminary
conference the contending
unions agreed to have a
consent
election
then
Med-Arbiter shall conduct
election.
Collective
Bargaining
Negotiation
JURISDICTIONAL
PRECONDITIONS OF
COLLECTIVE BARGAINING
1997 Bar Question

KKK, a newly-formed labor union claiming to
represent a majority of workers in the Company,
proceeded to present a list of demands to the
management for the purpose of collective
bargaining. The company, declined to deal with
the Union leaders, alleging that they had not as
yet presented any proof of majority status. KKK
then charged the Company with ULP, and
declared a wild cat strike wherein the means of
ingress and egress were blocked and isolated acts
of destruction and violence were committed.
Question
Answer
NO. It is not ULP for the employer not to
bargain
with
KKK.
There
are
3
jurisdictional
preconditions
for
bargaining. First, is the possession of
majority status; second, is proof of
majority status; and third, is the demand
to bargain. In the given problem, since
KKK has not presented proof of majority
status, the Company is not yet obligated
to bargain with it.
PARTIES TO COLLECTIVE
BARGAINING
PROCEDURE IN COLLECTIVE
BARGAINING
Article 260 (250)
What is the Duty to

Bargain Collectively?
Importance of this
Question
ULP:
Art. 258 (g) - To violate the
duty to bargain collectively as
prescribed by this Code.
What is the Duty to

Bargain
Collectively?
Article
262
(252)
What is the Duty to Bargain

Collectively?
Article
263
WHAT ARE THE ULP IN

BARGAINING?
Failure and Refusal to

Meet
and Convene
After
the
jurisdictional
preconditions for bargaining have
been complied with, it is the duty of
the employer to meet and convene
with the majority union.
Failure or refusal on the part of the
employer to meet the bargaining
union amounts to ULP.
Problem No. 11
The employers reason for not
meeting with the bargaining union is
that it filed a petition for cancellation
of the bargaining unions registration.
Employer contends that the petition
for cancellation of union registration
constitutes a prejudicial question that
should be settled first before it can be
compelled to bargain with the union.
Capitol Medical Center vs.

Trajano (2005)
That there is a pending cancellation of
registration proceedings against the
respondent Union is not a bar to set in
motion the mechanics of collective
bargaining. If a certification election is
not affected by the pendency of petition
for cancellation of Union registration, so
is the collective bargaining process.
Do economic
exigencies justify
refusal to bargain?
An employer is not guilty of refusal

to bargain by adamantly rejecting
the unions proposal where he is
operating at a loss, as long as he
continues to negotiate. But financial
hardships constitute no excuse for
refusing to bargain collectively.
Problem No. 12
The bargaining union submitted a proposed CBA to
the employer as jumpstart to collective bargaining
negotiation. The employer just ignored the
proposal of the union. Employer did not submit
any counter-proposal despite follow up from the
union. The union filed a notice of strike. The case
was eventually referred to NLRC for compulsory
arbitration. The NLRC ruled to adopt the unions
proposed CBA.
Is the ruling of NLRC correct inasmuch as
CBA being a contract must be mutually
agreed upon by the parties?
Kiok Loy vs. NLRC

(1986)
The ruling of the NLRC is correct. While it is not
obligatory upon either side of a labor
controversy to precipitately accept or agree to
the proposals of the other, an erring party
should not be tolerated and allowed with
impunity to resort to schemes feigning
negotiations by going through empty gestures.
In this case, the employer committed ULP by its
refusal to meet and convene with the Union.
Divine Word College of Tacloban vs.
Secretary of Labor
Evading Mandatory Subject

of Bargaining
It is the obligation of the
employer and the employees
representative to bargain with
each other with respect to
wages, hours of work and
other terms and condition of
employment.
What are the mandatory

subjects of collective
bargaining?
What is the importance of

knowing the mandatory
subjects of bargaining?
When is there deadlock or

impasse in bargaining?
A bargaining deadlock exists where
good faith bargaining on the part of the
parties has failed to resolve the issue
and there are no definite plans for
further efforts to break the deadlock
If this is so, the union may file a notice
of strike and the employer a lockout.
N.B.: the deadlock must be on the
mandatory subjects of bargaining.
Manila Central Line Corp.

vs. Union (1998)
After the NCMB failed to resolve the
bargaining deadlock between the
parties, the union filed a petition for
compulsory
arbitration
in
the
Arbitration Branch of the NLRC.
Petitioner joined the Petition and the
case was submitted for decision.
Manila Central Line Corp.

vs. Union (1998)
Although the petition is for compulsory
arbitration, it can be considered a voluntary
arbitration
because
of
the
willing
participation of both parties. It does not
matter whether the person chosen as
arbitrator is a labour arbiter. There is
nothing in the law that prohibits these
labour arbiters from also acting as voluntary
arbitrators as long as the parties agree to
have him hear and decide the case.
Bad Faith in Bargaining

The issue of bad faith in bargaining
can be resolved on a case to case
basis. There is no hard and fast rule
for its determination. Each factual
circumstance should be analyzed.
An employers steadfast position on a
particular proposal from the union
cannot, by itself, be considered bad
faith in bargaining.
Instances of Bad Faith
Standard Charter Bank

Employees Union vs.
Confesor (2004)
The union accused the bank of engaging

in surface bargaining because out of 36
economic provisions, the bank made only
6 economic counterproposals. Further, as
borne by the minutes of the meetings, the
bank, after indicating the economic
provision it had rejected, accepted,
retained or open for discussion, refused to
make a list of items it agreed to include in
the economic package.
Standard Charter Bank

Employees Union vs.
Confesor (2009)
The union was not able to show that the bank

had done acts, both at and away of the
bargaining table, which tend to show that it
did not want to reach an agreement with the
union, or settle the differences between it
and the union. Admittedly, the parties were
not able to agree and reached a deadlock.
However, it should be pointed out that the
duty to bargain does not compel either party
to agree to a proposal or to make a
concession.
When may bargaining in

faith
be
raised?
It should be raised while the bargaining is
in process. If the CBA has already been
executed, bargaining in bad faith can no
longer be imputed against either party.
REASON: All provisions in the CBA are
supposed to have been jointly and mutually
incorporated and agreed upon by the
parties.
SMTFM-UWP vs. NLRC, September 7,
1998
GROSS VIOLATION OF
CBA
Flagrant and/or malicious refusal
to
comply
with
economic
provisions of the CBA.
Thus, termination of the CBA
prior to its expiration is ULP.
RATIFICATION and
REGISTRATION
of CBA
The agreement negotiated by the employees

bargaining agent must be ratified by the majority
of all the workers of the bargaining unit. The CBA
must be posted for five days before ratification.
This is provided for by Article 236 (231)
BUT: Ratification is not needed when it is a
product of an arbitral award.
CBA must be registered with the DOLE, but it is
not a condition for its validity.
Contract bar rule will become effective from
the date of registration of CBA.
Requirement for the

Registration of CBA
Collective Bargaining Agreement
Statement that the CBA was posted
in two (2) conspicuous places for at
least five (5) consecutive days
Statement that the CBA was ratified
by the majority of the employees in
the bargaining unit
AUTOMATIC RENEWAL OF
CBA
Article 263 (253): x x x. It shall be
the duty of both parties to keep the
status quo and to continue in full
force and effect the terms and
conditions of the existing agreement
during the 60-day period and/or
until
a
new
agreement
is
reached by the parties.
Problem No. 13
The parties executed a CBA which
has the duration of 3 years; from
2001 to 2004. It provided for a yearly
increase in salary. In 2004, due to the
case pending between the parties, a
new CBA was not executed.
Will there be salary increase in
2005?
Answer
Yes, there will be salary increase in 2005. The
mandate of Article (253), 263 of the Labor
Code is very clear that there should be an
automatic renewal of the CBA until new
agreement is reached by the parties. The law
does not provide for any exception nor
qualification as to which the economic
provision of the existing agreement are to
retain force and effect, therefore, it must be
understood as encompassing all the terms
and conditions in the said agreement .
Term of the CBA

Article 264 (253-A). Terms of a collective
bargaining agreement. Any Collective
Bargaining Agreement that the parties may enter
into shall, insofar as the representation aspect
is concerned, be for a term of five (5) years.
No petition questioning the majority status of the
incumbent bargaining agent shall be entertained
and no certification election shall be conducted by
the Department of Labor and Employment outside
of the sixty-day period immediately before the
date of expiry of such five-year term of the
Collective Bargaining Agreement.
TERM OF THE CBA

Article 264 (253-A). Terms of a collective bargaining
agreement. x x x. All other provisions of the Collective
Bargaining Agreement shall be renegotiated not later than
three (3) years after its execution. Any agreement on such
other provisions of the Collective Bargaining Agreement
entered into within six (6) months from the date of expiry
of the term of such other provisions as fixed in such
Collective Bargaining Agreement, shall retroact to the day
immediately following such date. If any such agreement
is entered into beyond six months, the parties shall
agree on the duration of retroactivity thereof. In
case of a deadlock in the renegotiation of the
Collective Bargaining Agreement, the parties may
exercise their rights under this Code.
Two Periods in CBA
Illustration
The Company and the Union forged a CBA which
became effective on January 1, 2014.
The economic provision shall be renegotiated not
later than December 31, 2017. However, the
representational provision will expire on December
31, 2019.
Should the party forge a renegotiated agreement
on May 1, 2017, it will retroact on January 1, 2017.
However, should the parties forged an agreement
August 1, 2017, the retroactivity is subject to the
mutual agreement of the parties.
Problem No. 14
The economic provisions of CBA will expire in
2001. The parties renewed it for three years.
It thus exceeds the five (5) year term of the
CBA.
Are parties allowed to have an extension of
three years for economic provisions of the
CBA or should it be limited to two (2) years?
Will the extension prevent the holding
of certification election during the last
60 day of the existing CBA?
Answer
Yes. The parties are allowed to agree on the period of
extension of the economic provisions of the CBA and
their agreement is binding as long as it is ratified by the
majority of the employees of the bargaining unit. The
same will however not adversely affect the right of
another union to challenge the majority status of the
incumbent bargaining agent within sixty (60) days
before the lapse of the original five (5) year term of the
CBA.
San Miguel Corp. employees Union-PTGWO vs.
Confesor (1996)
2009 Bar Question

The Company and X Union, the
certified bargaining agent of the
rank-and-file employees, entered into
a CBA effective for the period of
January 1, 2002 to December 31,
2007. For the 4th and 5th years of the
CBA, the significant improvements in
wages and other benefits obtained
by the Union were:
2009 Bar Question

Salary increase of P1,000 and P1,200
monthly, effective January 1, 2006 and
January 1, 2007, respectively;
Vacation leave and sick leave were adjusted
from 12 days to 15 days annually for each
employee
Medical Subsidy from P3,000 to P10,000
Rice subsidy of P600 per month
Birthday Leave with pay and birthday gift of
P1,500
2009 Bar Question

As early as October 2007, the Company and
the Union started negotiations to renew the
CBA. Despite mutual good intentions and
earnest efforts, they could not agree.
However, no union filed a petition for
certification election during the freedom
period. On March 30, 2008, no CBA had
been concluded. Management learned that
the Union would declare a deadlock on the
next scheduled bargaining meeting.
2009 Bar Question

As expected, on April 3, 2008, the Union
declared a deadlock. In the afternoon of
the same day, management issued a
formal announcement in writing, posted
on the bulletin board, that due to the
CBA expiration on December 31, 2007,
all fringe benefits contained therein are
considered withdrawn and can no longer
be implemented, effective immediately.
Question 1
Answer
The freedom period or the period
within which the contending
union
may
challenge
the
majority status of the bargaining
union is the last sixty days of the
five year CBA or from 60 days
before the expiry date of the
CBA.
Question 2
Answer
No. The certification election filed by the
contending union will not prosper. It
should be pointed out that the petition
for certification election was filed
outside the freedom. Moreover, because
of the mandated automatic renewal of
the CBA under Article 253 (263) of the
LC, the petition for certification election
is barred by contract bar rule.
Question 3
Answer
NO. The management withdrawal of
fringe benefits is illegal. Under Article
253, It shall be the duty of both parties to
keep the status quo and to continue in
full force and effect the terms and
conditions of the existing agreement
during the 60-day period and/or until a
new agreement is reached by the parties.
Thus, the CBA is automatically renewed.
May the parties agree to

extend the five year term of
the representation issue?
NO. As the representation aspect of the CBA, it is

non-extendable. It is for a term of five years. 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 status is effective only for five years and
can be challenged within sixty (60) days prior to
the expiration of the CBAs first 5 years.
FVC Labor Union-PTWGO vs. Samahang
Nagkakaisang
Manggagawa
ng
FVC,
November 27, 2009
CBA: Law Between the

Parties
FACTS: Jean Legaspi, an English teacher in
Petitioner clollege, requested the latter to allow her
to be on study leave with grant-in aid equivalent
to her 18 months salary and allowance, pursuant to
Section 1, Article XIII of the CBA. However, petitioner
denied her request, claiming that she is not entitled
to grant-in aid under its "Policy Statement and
Guidelines for Trips Abroad for Professional Growth."
The petitioner reasoned out that per its policy, it
would only grant study leave if the teacher would
pursue a higher degree studies, not that one which
only confers a certificate and not a degree.
CBA: Law Between the

Parties
QUESTION: May company policy override the
provision of the CBA?
ANSWER: NO. The CBA is considered to be the law
between the parties. Unilaterally formulated rules
and policy can neither contradict nor undermine the
CBA. At most, such rules are merely suppletory to
the CBA. Besides, should there be doubt in the in
the definition of higher studies, such doubt should
be resolved in favor of labor.
Holy Cross of Davao College vs. Holy Cross of
Davao
Faculty
Union-KAMAPI,
G.R.
No.
156098, June 27, 2005
Interpretation of CBA
Art. 1700. The relations between capital and labor
are not merely contractual. They are so impressed
with public interest that labor contracts 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. 1702. In case of doubt, all labor legislation
and all labor contracts shall be construed in favor
of the safety and decent living for the laborer.
Zipping Clause
It is a stipulation in the CBA
indicating that issues that could
have been negotiated upon but
not contained in the CBA cannot
be raised for negotiation when
CBA is already in effect. In short,
CBA is a complete agreement;
negotiation is closed.
Persons Entitled to
Benefits
When a collective bargaining contract is
entered into by the union representing
the employees and the employer, even
the non-member employees are
entitled to the benefits of the
contract. To accord its benefits only to
members of the union without any valid
reason
would
constitute
undue
discrimination against non-members
Change of Bargaining
Agent: Substitutionary
Doctrine
The agreement is binding on the parties for
the period therein specified. The employees
cannot
revoke
the
validly
executed
bargaining contract with their employer by
the simple expedient of changing their
representative.
The new agent, however, may bargain for
the shortening of the contract
Benguet
Consolidated
vs.
BCI
Employees and Workers Union, 23 SCRA
465
No Injunction Rule
Article 265 (254). Injunction
prohibited. No temporary or
permanent injunction or restraining
order in any case involving or
growing out of labor disputes shall be
issued by any court or other entity,
except as otherwise provided in
Articles 218 and 264 of this Code.
Article. 272 (260). Grievance machinery

and voluntary arbitration. - The parties to
a Collective Bargaining Agreement shall
include therein provisions that will ensure the
mutual observance of its terms and
conditions.
They
shall
establish
a
machinery for the adjustment and
resolution of grievances arising from
the interpretation or implementation of
their Collective Bargaining Agreement
and
those
arising
from
the
interpretation
or
enforcement
of
company personnel policies.
Article. 272 (260). - x x x x

All grievances submitted to the
grievance machinery which are
not settled within seven (7)
calendar days from the date of
its
submission
shall
automatically be referred to
voluntary arbitration prescribed
in the Collective Bargaining
Agreement.
Article. 272 (260). Grievance machinery and

voluntary arbitration. - x x x x
For this purpose, parties to a Collective Bargaining
Agreement shall name and designate in advance a
Voluntary Arbitrator or panel of Voluntary Arbitrators, or
include in the agreement a procedure for the selection of
such Voluntary Arbitrator or panel of Voluntary
Arbitrators, preferably from the listing of qualified
Voluntary Arbitrators duly accredited by the Board. In
case the parties fail to select a Voluntary Arbitrator or
panel of Voluntary Arbitrators, the Board shall designate
the Voluntary Arbitrator or panel of Voluntary Arbitrators,
as may be necessary, pursuant to the selection
procedure agreed upon in the Collective Bargaining
Agreement, which shall act with the same force and
effect as if the Arbitrator or panel of Arbitrators has been
selected by the parties as described above.
What is grievance?
Grievance Machinery
Refusal or failure to follow grievance
procedure by either party is ULP. This
is because grievance procedure is part
of the continuing process of collective
bargaining.
As a matter of rule, before an
aggrieved party may resort to the
courts to enforce his individual rights
under the CBA, he must exhaust all
the available remedies in the CBA.
Problem No. 15
Petitioner was asked by the management to
explain her allegedly hostile, arrogant,
disrespectful and defiant attitude. After she
gave her explanation, she was dismissed. She
informed the management that she is waiving
her right to avail of the grievance machinery
and instead submitted the case to voluntary
arbitrator to which the management agreed
Is her waiver to avail grievance machinery,
a relinquishment of her right to avail of the
aid of voluntary arbitrator?
Answer
NO. Voluntary arbitration as a mode of
settling the dispute was not forced upon
the respondents. The respondent agreed
to it. Besides, the employees waiver of
her option to submit her case to
grievance machinery did not amount to
relinquishing her right to avail herself of
voluntary arbitration.
Apalisok vs. Radio Philippines Network
G.R. No. 138094, May 29, 2003
Voluntary Arbitration
Article. 273 (261). Jurisdiction of Voluntary Arbitrators
or panel of Voluntary Arbitrators. - The Voluntary
Arbitrator or panel of Voluntary Arbitrators shall have
original and exclusive jurisdiction to hear and decide
all
unresolved
grievances
arising
from
the
interpretation or implementation of the Collective
Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel
policies referred to in the immediately preceding article.
Accordingly, violations of a Collective Bargaining Agreement,
except those which are gross in character, shall no longer
be treated as unfair labor practice and shall be resolved as
grievances under the Collective Bargaining Agreement. For
purposes of this article, gross violations of Collective
Bargaining Agreement shall mean flagrant and/or
malicious refusal to comply with the economic
provisions of such agreement.
Article. 273 (261). Jurisdiction of Voluntary
Arbitrators or panel of Voluntary
Arbitrators. - x x x
The Commission, its Regional Offices and the
Regional Directors of the Department of Labor
and Employment shall not entertain disputes,
grievances or matters under the exclusive
and original jurisdiction of the Voluntary
Arbitrator or panel of Voluntary Arbitrators
and shall immediately dispose and refer the
same to the Grievance Machinery or
Voluntary Arbitration provided in the
Collective Bargaining Agreement.
Article. 274 (262). Jurisdiction
over other labor disputes. The Voluntary Arbitrator or panel
of Voluntary Arbitrators, upon
agreement of the parties, shall
also hear and decide all other
labor disputes including unfair
labor practices and bargaining
deadlocks.
Voluntary Arbitrator
What is company personnel

policy?
Company personnel policies are the
guiding principles stated in broad, longrange terms that express the philosophy
of an organizations top authority
regarding personnel matters. They deal
with matters affecting the administration
of wages, benefits, promotions, transfer
and other personnel movements which
are not spelled out in the CBA.
Jurisdiction of Labor
Arbiter
Unfair labor practices
Termination disputes
Claims for wages, rates of pay, hours of work, or
other terms and conditions of employment, if
accompanied with a claim for reinstatement
Claims for actual, moral, exemplary and other
damages
arising
from
employer-employee
relationship
Violation of Article 264 and legality of strikes and
lock-outs
All claims arising from employer-employee
relationship exceeding 5K pesos.
Comparison of
Jurisdiction
LABOR ARBITER
VOLUNTARY ARBITRATOR
Cases
provided
in
Article 217
ULP,
termination
disputes,
money
claims arising from
employer-employee
relation
Legality of strikes and
lockouts
Claims of domestic
helpers
Cases provided in
Article 261 and 262
Unresolved
grievances
Any and all labor
dispute
upon
agreement of the
parties
Does Voluntary Arbitrator

have jurisdiction over
termination disputes?
All other disputes under Article 262 of the
Labor Code may include termination
disputes, provided that the agreement
between the company and the union states
in unequivocal language that the parties
conform to the submission of termination
disputes and unfair labor practice to
voluntary arbitration.
Vivero vs. Court of Appeals, 344 SCRA
268
Problem No. 16
The Company has an existing CBA with Union A.
During the existence of said CBA, a faction of Union
A vaulted from it and established a new union,
Union B. More than half of the members of Union A
resigned and joined Union B. The Company, upon
demand from Union B, withheld remitting union
dues to Union A. Worse, the Company negotiated
with Union B for another CBA. Union A filed a ULP
case against the Company with the Labour Arbiter
for violating the CBA. The companys contention is
that the LA has no jurisdiction as the case should
be referred to Voluntary Arbitrator.
Question
Answer
If I were the Labour Arbiter, I will not consider the
contention of the Company that I do not have
jurisdiction to hear and decide the case. Not all
violations of the CBA amount to ULP; only those which
are gross and pertain to the CBAs economic provisions.
However, gross violation per se, such as utter disregard
of the very existence of the CBA itself is ULP. When the
company proceeds to negotiate with the splinter union
despite the existence of its valid CBA with Union A, the
company indubitably abandons its recognition of the
latter and terminates the entire CBA.
Employees Union of Bayers vs. Bayers

(2010)
Procedure
Article. 275 (262-A). Procedures.
- The Voluntary Arbitrator or panel of
Voluntary Arbitrators shall have the
power to hold hearings, receive
evidences and take whatever action
is necessary to resolve the issue or
issues subject of the dispute,
including efforts to effect a voluntary
settlement between parties.
Procedure
Article. 262-A. Procedures. x x x
All parties to the dispute shall be
entitled to attend the arbitration
proceedings. The attendance of any
third party or the exclusion of any
witness from the proceedings shall be
determined by the Voluntary Arbitrator
or panel of Voluntary Arbitrators.
Hearing may be adjourned for cause or
upon agreement by the parties.
Procedure
Article. 262-A. Procedures. x
xx
Unless the parties agree otherwise, it
shall be mandatory for the Voluntary
Arbitrator or panel of Voluntary
Arbitrators to render an award or
decision within twenty (20) calendar
days from the date of submission of
the dispute to voluntary arbitration.
Procedure
The award or decision of the Voluntary
Arbitrator or panel of Voluntary
Arbitrators shall contain the facts and
the law on which it is based. It shall be
final and executory after ten (10)
calendar days from receipt of the copy
of the award or decision by the parties.
Procedure
Upon motion of any interested party, the
Voluntary Arbitrator or panel of Voluntary
Arbitrators or the Labor Arbiter in the region
where the movant resides, in case of the
absence or incapacity of the Voluntary Arbitrator
or panel of Voluntary Arbitrators, for any reason,
may issue a writ of execution requiring either the
sheriff of the Commission or regular courts or
any public official whom the parties may
designate in the submission agreement to
execute the final decision, order or award.
Flow Chart of Procedure
Is motion for reconsideration

allowed on the decision of the
Voluntary Arbitrator?
Coca-Cola Bottlers Phils. vs. Coca-Cola, July
28, 2005, the Supreme Court ruled that MR is
allowed. It based its ruling on Article 262 and the
1989 rules of NCMB. BUT:
Section 7, Rule XIX of D.O. No. 40, series of
2003:
The decision, order, resolution or award of the
voluntary arbitrator or panel of voluntary arbitrators
shall be final and executory after ten (10) calendar
days from receipt of the copy of the award or
decision by the parties and it shall not be subject
of a motion for reconsideration.
Review of Decision of
VR
The decision of the Voluntary Arbitrator is

appealable to the Court of Appeals
through a Petition for Review under Rule
43.
Section 1 of which provides. This rule shall
apply to appeals from judgments or final
orders or resolutions of or authorized by
any quasi-judicial agency in the exercise
of its quasi-judicial functions x x x
voluntary arbitrators . . .
UNFAIR LABOR
PRACTICES
Concept of Unfair Labor

Practice
Article 257 (247)
Violate the constitutional right of

workers and employees to selforganization
Inimical to the legitimate interests
of both labor and management
Hinder the promotion of healthy and
stable labor-management relations
Concept of Unfair
Labor Practice
Unfair labor practices are not
only violations of the civil
rights of both labor and
management but are also
criminal offenses against the
State.
How is the criminal aspect

of ULP prosecuted?
No criminal prosecution under this Title may be
instituted without a final judgment finding that an
unfair labor practice was committed, having been first
obtained in administrative proceedings.
During the pendency of such administrative
proceeding, the running of the period of prescription
of the criminal offense herein penalized shall be
considered interrupted:
Provided, however, that the final judgment in the
administrative proceedings shall not be binding in the
criminal case nor be considered as evidence of guilt
but merely as proof of compliance of the
requirements therein set forth.
Elements of ULP
ULP of Employers
Unfair Labor Practices of

Employer
Article 258 (248)
Interference
Insular Life Assurance Employees
Association vs. Insular Life Co.,
Ltd, G.R. No. L-25291, January 30,
1971
Company president sent a letter to
strikers to abandon the strike with
corresponding consideration in return
Dabuet vs. Roche (1987)

The petitioners, who were all officer of the Union,
wrote a letter to the management expressing the
grievance of the Union regarding the dismissal of the
Union President and Vice-President. At the meeting,
in stead of discussing the problem, the GM berated
the petitioners and called the person who wrote the
letter stupid. Feeling alluded to, the lawyer of the
Union, filed a case for grave slander against the GM
based on the affidavit executed by the Petitioner.
The GM in turn, filed a case for perjury against the
petitioner. Further, the GM suspended the petitioner
and later dismissed them for lost of trust and
confidence.
Dabuet vs. Roche (1987)

Did the
ULP?
management
commit
Yes. The GM act of dismissing the petitioners,

who then constituted the remaining and entire
officialdom of the Union is ULP. This is more so
when the CBA in the company was about to be
renegotiated. Their dismissal under the
circumstances, amounted to interference with,
restrain or coerce employees in the exercise of
their right to engage in concerted activities for
their mutual aid and protection
May ULP be committed

even when the Union is yet
to be organized?
Yellow Dog Contract
Contracting out
In contracting out services, is

it required that the Union be
first consulted?
It is not required. It is within the exclusive

prerogative of the management to decide
on whether to contract out services or not.
For as long as the employer is motivated
by good faith and the contracting out is
not resorted to circumvent the law or it is a
result of malicious or arbitrary action,
contracting out cannot be classified as ULP.
Meralco vs. Quisumbing and MEWA,
1999
Runaway Shop
Runaway shop refers to business
relocation animated by anti-union
animus. Sameness of business is not
reason enough to show run-away shop
to pierce the veil of separate corporate
entity.
Complex
Electronic
Employees
Association vs. NLRC, July 19, 1999
Company Union
Manifestation of Company
Domination of Union:
Discrimination
Test of Discrimination
For the purpose of determining whether or not a
discharge is discriminating, it is necessary that the
underlying reason for discharge be established. The fact
that a lawful cause for discharge is available is not a
defense where the employee is actually discharge
because of his union activities. (NLRB vs. Ace Comb). If
the discharge is actually motivated by a lawful reason,
the fact that employee is engaged in union activities at
the time will not lie against the employer and prevent
him from the exercise of his business judgment to
discharge an employee for cause.
Cainta Catholic School vs. Union, (2006)
Valid Discrimination
Union Security
Agreements
Union Security
Agreement
Union Security
Agreement
Union Security
Agreement
Union Security
Agreement
Exceptions to Closed
Shop
BPI vs. BPI Employees

Union (2010)
New employees falling within the
bargaining unit as defined in Article I of this
Agreement, who may hereafter be
regularly employed by the Bank shall,
within thirty (30) days after they
become regular employees, join the
Union as a condition of their continued
employment.
It
is
understood
that
membership in good standing in the Union is
a condition of their continued employment
with the Bank.

Union (2010)
How does union security clause
apply in merged corporation? Are
the employees of the absorbed
corporations required to join the
union? Can they be considered as
new employees of the surviving
corporation?

Union (2010)
Section 2, Article II of the CBA is silent as
to how one becomes a regular
employee of the BPI for the first time.
There is nothing in the said
provision which requires that a
new
regular
employee
first
undergo
a
temporary
or
probationary status before being
deemed as such under the union
shop clause of the CBA.

Union (2010)
Petitioner insists that the term new employees, as
the same is used in the Union Shop Clause of the CBA
at issue, refers only to employees hired by BPI as nonregular employees who later qualify for regular
employment and become regular employees, and not
those who, as a legal consequence of a merger, are
allegedly automatically deemed regular employees of
BPI. However, the CBA does not make a distinction as
to how a regular employee attains such a status.
Moreover, there is nothing in the Corporation Law and
the merger agreement mandating the automatic
employment as regular employees by the surviving
corporation in the merger.

Union (2010)
What is indubitable in from the Union Shop
Clause is that upon the effectivity of the CBA,
petitioners new regular employees, regardless
of the manner by which they became
employees of BPI are required to join the Union
as a condition of their continued employment.
Discrimination for
Testimony
Discrimination for
Testimony
Will it cover refusal to
testify?
Yes.
Mebeza vs. NLRC (1997)
Violation of the Duty to

Bargain
Paid Negotiation
Violation of CBA
(i) To violate a collective
bargaining agreement
Who is liable?
Problem No. 17
Carlito filed a collection suit against
Luis, a friend of Lito, Carlitos
employer. Rowena, Carlitos coemployee testified in favor of Carlito.
This infuriated Lito. Consequently,
Lito suspended Rowena for testifying
in favour of Carlito.
Is Lito guilty of ULP?
Answer
NO. Carlito is not guilty of ULP. To be
liable of ULP for discriminating for giving
testimony the testimony must be
related to the provision of the Labour
Code. The language of the LC speaks of
testimony under the Code. Thus, if the
testimony has nothing to do with the
provisions of the LC, the employers may
be liable for anything but not ULP.
Unfair Practices of Labor

Organization
[Article 259]
(a) To restrain or coerce employees
in the exercise of their right to selforganization. However, a labor
organization shall have the right to
prescribe its own rules with
respect to the acquisition or
retention of membership.

Organization
(b) To cause or attempt to cause an
employer to discriminate against an
employee, including discrimination against
an employee with respect to whom
membership in such organization has been
denied or to terminate an employee on
any ground other than the usual terms and
conditions under which membership or
continuation of membership is made
available to other members

Organization
(c) To violate the duty, or

refuse
to
bargain
collectively
with
the
employer, provided it is
the representative of the
employees

Organization
(d) To cause or attempt to cause
an employer to pay or deliver or
agree to pay or deliver any
money or other things of value, in
the nature of an exaction, for
services which are not performed
or not to be performed, including
the demand for fee for union
negotiations.

Organization
(e) To ask for or accept
negotiation or attorneys fees
from employers as part of the
settlement of any issue in
collective bargaining or any
other dispute

Organization
(f) To violate a collective
bargaining agreement.
Who will be Liable?

Only officers, members of the
governing
boards,
representatives or agents or
members of labour association or
organizations who have actually
participated authorized or ratified
unfair labour practices shall be
criminally liable.
STRIKES AND LOCK-OUTS
Constitutional
Underpinning
Article XIII, Section 3
It shall guarantee the rights of all workers to
self-organization, collective bargaining and
negotiations,
and
peaceful
concerted
activities, including the right to strike in
accordance with law. They shall be
entitled to security of tenure, humane
conditions of work, and a living wage. They
shall also participate in policy and decisionmaking processes affecting their rights and
benefits as may be provided by law.
STRIKE
Temporary
stoppage of work
by concerted
action of the
employees as a
result of labour
and industrial
dispute
Article 219 (o)
LABOR DISPUTE
It includes any controversy or matter
concerning terms and conditions of
employment or the association or
representation of persons in negotiating,
fixing,
maintaining,
changing
or
arranging the terms and conditions of
employment, regardless of whether the
disputants stand in the proximate
relation of employer and employee.
[Article 219(l)]
Employees with no labour

dispute with their employer
but who refuses to work on
work day to join a Welga
ng Bayan commit an
illegal work stoppage.
Biflex Phils., Inc., Labor
Union, et.al., vs. Biflex
Industrial, 511 SCRA 247
Not all labour dispute may

become the basis of strike or
lock-out
The right of legitimate labour organizations
to strike and picket and of employers to
lockout, consistent with the national
interest, shall continue to be recognized
and respected. However, no labour union
may strike and no employer may declare a
lockout on grounds involving inter-union
and intra-union disputes.
Article 277 (b)
Who May Strike/LockOut?

Strike
Bargaining Deadlock
Exclusive bargaining
representative
Unfair Labour
Practice
Legitimate Labour
Organization
Exclusive bargaining
representatives
Lock-Out
Employer
6 Factors Effecting the

Legality
of Strike
1. Contrary to Specific
Provision
of
Law
Social Security System Employees
Association (SSSEA) vs. CA, 175 SCRA
686
Bangalisan vs. CA, July 31, 1997
Public employees are denied the right to
strike or engage in stoppage against public
employer. The right of the sovereign to
prohibit strikes or work stoppages by public
employees was clearly recognized by
common law.
2. Violate Specific
Requirement of Law
Procedural Requirements
Filing of Notice of Strike
Observance of Cooling-Off Period
Taking of Strike Vote
Observance of Seven Day StrikeVote-Report Period.
Notice of Strike
The notice shall state, among others, the
names and addresses of the employer and
the union involved, the nature of the
industry to which the employer belongs,
the number of union members and of the
workers in the bargaining unit, and such
other relevant data as may facilitate the
settlement of the dispute, such as a brief
statement or enumeration of all pending
labour disputes involving the same parties.
Notice of Strike
In cases of bargaining deadlocks, the notice
shall, as far as practicable, further state the
unresolved
issues
in
the
bargaining
negotiations and be accompanied by the
written proposals of the union, the counterproposals of the employer and the proof of a
request for conference to settle the
differences. In cases of unfair labour practices,
the notice shall, as far as practicable, state
the acts complained of and the efforts taken
to resolve the dispute amicably.
Who files the Notice of

Strike?
Only a legitimate labour organization
can legally hold a strike.
If the reason for intended strike is
ULP, notice should be filed by the
LLO or certified bargaining agent.
If bargaining deadlock, only the
certified bargaining agent can file
notice of strike
Cooling-Off Period
Union busting as
ground
Union busting as
ground
Article 264: No labour
organization shall declare
strike..without first having a
filed a noticeor without the
necessary strike vote having
first obtained and reported.
Strike Vote
The failure of the union to

comply with the requirement of
the giving of notice to NCMB at
least 24 hours prior to the
holding of a strike vote will
make render the subsequent
strike staged by the union
illegal.
Capitol Medical Centre vs.
NLRC, April 26, 2005
Strike Vote Report
Should the strike vote be

taken within or outside the
cooling-off period, it shall be
counted from the day
following the expiration of
the cooling off-period.
Sukhotai Cuisine vs. CA,
July 17, 2006
PROCEDURAL
REQUIREMENTS ARE
MANDATORY; NONOBSERVANCE MAKES THE
STRIKE ILLEGAL
No labour organization or
employer shall declare a strike or
lockout without first having
bargained collectively in
accordance with Title VII of this
Book or without first having filed
the notice required in the preceding
Article or without the necessary
strike or lockout vote first having
been obtained and reported to the
Ministry.
Article (264) (278) (a)
Other reasons that may

cause the illegality of
strike?
What is preventive
mediation?
Mediation is a process of resolving
disputes with the aid of a neutral person
the mediator who helps the parties
identify issues and develop proposals to
resolve disputes.
Although the LC does not name
preventive mediation, the NCMB manual
enunciates it as a remedy. The remedy of
preventive
mediation
is
already
jurisprudentially accepted.
3. Declared for Unlawful

Purpose
Non-Strikable Issues
ULP Strike in Good Faith

Two Test in Determining the
Existence of ULP
Objectively, when strike is declared in
protest of ULP which is found to have
been actually committed.
Subjectively, when strike is declared in
protest to what the union believed to
be ULP committed by the employer.
We have ruled in several cases that

a strike may be considered legal
when the union believed that the
respondent company committed
unfair labour acts and the
circumstance warranted such belief
in good faith although subsequently
such allegation of ULP are found not
true.
Peoples Industrial and Commercial

Employees and Workers Org. vs. Peoples
Industrial and Commercial Corp., March 15,
1982
Do procedural
requirements apply
even to ULP Strike in
good faith?
Even if the union acted in good faith

in the belief that the company was
committing an unfair labour practice,
if no notice of strike and strike vote
were conducted, the said strike is
illegal.
National Federation of Labour,
et.al., vs. NLRC, et. al., December
4. Employs Unlawful
Means
Employs unlawful
means
5. Violation of Existing
Injunction
When, in his opinion, there exists a labour
dispute causing or likely to cause a strike
or lockout in an industry indispensable
to the national interest, the Secretary
of Labour and Employment may assume
jurisdiction over the dispute and decide it
or certify the same to the Commission for
compulsory arbitration.
Article 263, 277 (g)
Violation of Existing
Injunction
The President of the Philippines shall
not be precluded from determining
the industries that, in his opinion, are
indispensable to the national interest,
and from intervening at any time and
assuming jurisdiction over any such
labour dispute in order to settle or
terminate the same.
Article 277 (g)
2 Persons who may

assume jurisdiction
Assumption by the
President
Assumption of the
SOL
Effect of Assumption of
Jurisdiction
Such assumption or certification shall have the
effect of automatically enjoining the intended
or impending strike or lockout as specified in
the assumption or certification order. If one has
already taken place at the time of assumption
or certification, all striking or locked out
employees shall immediately return-to-work
and the employer shall immediately resume
operations and readmit all workers under the
same terms and conditions prevailing before
the strike or lockout.
Article 277 (g)
What are considered

national interest
cases?
The Code vest the President or the
Secretary of Labor almost unlimited
discretion
to
determine
what
industries may be considered as
indispensable to the national interest
Effect of Defiance of
RTWO
Non-compliance with the certification order
shall be considered as an illegal act committed
in the course of the strike or lock-out and the
participating employees shall be considered to
have lost their employment.
A strike undertaken despite the issuance of
AJO becomes a prohibited activity and, thus,
illegal. Moreover, the union officers and
members who have participated in the said
illegal activity are, as result, deemed to have
lost their employment status.
Points to Remember
in AJO
What disputes may be

resolved when the
Secretary assumes
All cases jurisdiction?
between the same parties,
except where the certification order
specifies otherwise the issues submitted
for arbitration, which are already filed or
may be filed, and are relevant to are
proper incidents of the certified case, shall
be considered subsumed or absorbed by
the certified case, and shall be decided by
the
appropriate
Division
of
the
Commission.
What disputes may be

resolved when the
Secretary assumes
The Secretary jurisdiction?
was explicitly granted by Article 263 (g)
of the Labour Code the authority to assume jurisdiction

over a labour dispute causing or likely to cause a strike
or lockout in an industry indispensable to the national
interest, and decide the same accordingly. Necessarily,
this authority to assume jurisdiction over the said
labour dispute must include and extend to all
questions and controversies arising there from,
including cases over which the labour arbiter
has exclusive jurisdiction.
International
Pharmaceuticals,
Inc.,
vs.
Secretary, 205 SCRA 59
Does assumption of
jurisdiction empower
the DOLE Secretary to
render an arbitral
award?
Yes, it is within the Secretarys power

under Article 277(g). By assuming
jurisdiction over labor disputes in
industries indispensable to national
interest, it is within his competence
to render an arbitral award.
Bagong Pagkakaisa ng
Manggagawa ng Triumph vs.
Secretary (2010)
Article 277(g) (263) is both extra-ordinary and a preemptive power to address an extra-ordinary
situation a strike or lockout in an industry
indispensable to national interest. The grant is not
limited to the grounds in the notice of strike or
lockout, nor it is limited to the incidents of the strike
or lockout that in the meanwhile may have taken
place. As the term assume jurisdiction connotes,
matters within the dispute that gave rise to or
which arose out of the strike; it extends to all
questions and controversies arising from or
related to dispute, including cases over which
the labour arbiter has exclusive jurisdiction.
How do you question the

arbitral award of the
Secretary of Labour?
6. Violation of the Existing

Agreement
No strike clause in the CBA is binding
only as far as the ground for strike is
economic. Such clause does not cover
strike whose ground is ULP.
Thus, even if there is no-strike clause
in the CBA, union may declare strike if
ULP is committed.
Master Iron Labour Union, vs.
NLRC, February 17, 1993
Violation of the Existing

Agreement
BUT: No strike clause in the CBA is
binding only to union that agreed to
it in the CBA. It does not bind the
newly certified bargaining agent.
Benguet Consolidated, Inc., vs
BCI Employees and Workers
Union-PAFLU, April 30, 1968
CONSEQUENCES OF
CONCERTED ACTIONS
Fundamental Principle:
Employment relationship is not severed
when the workers refused to work on
account of a valid strike.
Why?
Employee includes any individual
whose work has ceased as a result of or
in connection with any current labor
dispute [Article 219 (f)].
When Strike is Legal

Effects:
Employees who participated in legal strike
shall not become liable, whether they are
officers of the union or mere members.
However, the workers who participated in
the strike is not entitled to wages during
the time that they were on strike. A
principle of a fair days work for a fair
days labor applies.
When Strike is Illegal

Effects:
Employees who participated in illegal
strike shall not be liable, that is, they
shall not lose their employment.
However, union officers knowingly
participates in an illegal strike may be
declared
to
have
lost
their
employment. [Article 278(a)]
When Employees
Committed Illegal Acts
During Strike
Effects:
Employees who participated in the
commission of illegal act during legal
or illegal strike shall be liable in the
sense that they may be declared to
have lost their employment. [Article
278(a)]
This includes union officers and
members of union.
Who declares loss of

employment status?
May the employees who were

dismissed for participating in
an illegal strike entitled to
reinstatement and
backwages?
Only reinstatement but not backwages.
Considering that they did not render work
for the employer during strike, they are
entitled only to reinstatement. With respect
to backwages, the principle of a fair days
work for a fair days labor, applies.
Abaria vs. NLRC, December 7,

2011
2003 Bar Question

Magdalo, a labour union in Oakwood, a furniture
manufacturing firm, after failing in its negotiations with
Oakwood, filed with the DOLE a notice of strike. The
DOLE summoned Magdalo and Oakwood for conciliation
hearings to resolve the deadlock. Unable to agree
despite efforts of the DOLE, Magdalo called a strike
participated in by its officers and union members
including Cesar, a rank-and-file employee. Oakwood filed
a petition to declare a strike illegal for not observing the
seven day cooling-off period. Oakwood claimed that the
strike being illegal, all those who participated therein,
including Cesar could be dismissed as, in fact, they were
so dismissed by Oakwood. Decide the case.
Answer
Not all who participated in the illegal strike may be
dismissed. We must distinguish who participated in
the illegal strikes. If it is the union officers who
knowingly participated in the illegal strike, they may
be declared to have lost their employment. If they
are only union members, then they will not be
considered to have lost their employment. Ordinary
union members may be considered to have lost
their employment if they committed illegal acts
during the strike.
Applying the said legal principle, the dismissal of
union members including Cesar is illegal.
2004 Bar Question

Employees of ABC declared a strike after
filing a Notice of Strike with DOLE. They
barricaded company gates and damage
vehicles entering company premises. On
the second day of strike, ABC filed a
petition for DOLE to intervene through
the issuance of assumption of jurisdiction
order that the Secretary may issue when
a strike or lock-out will adversely affect
national interest.
2004 Bar Question

ABC furnished the Secretary with evidence to show
that company vehicles had been damaged; that
electric power had been cut off; and equipment and
materials were damaged because electric power
was not immediately restored. ABC forecast that
the countrys supply of chlorine for water treatment
(which the company produces) would be affected
adversely if ABCs operations were closed down by
the strikers.
Could the DOLE Secretary intervene, assume
jurisdiction and issue a TRO? Briefly justify
your answer.
Answer
Yes, the SOLE can assume jurisdiction
over the dispute because ABC could be
considered as an industry indispensable
to the national interest since it produces
the countrys supply of chlorine for water
treatment. The assumption of jurisdiction
by the SOLE has the effect of ending the
strike. The strikers will be subject to a
return to work order by the SOLE upon
her assumption jurisdiction
2004 Bar Question

Because of allege ULP by the management of
GFI System, a government-owned and controlled
corporation, its employees walked out from their
jobs and refused to return to work until the
management would grant their union official
recognition and start negotiations with them. The
leaders of the walk-out dismissed, and the other
participants were suspended for 60 days. In
arguing their case before the CSC, they cited the
principle of social justice for workers and the right
to self-organization and collective action, including
the right to strike.
2004 Bar Question

They claimed that the Constitution
shielded them from any penalty
because their walk-out was a
concerted action pursuant to their
rights guaranteed by the basic law.
Is the position taken by the walkout leaders and participants legally
correct?
Answer
The position taken by the walk-out
leaders and participants is not legally
correct. They are government employees,
and as such, they do not have the right to
strike. Section 3, Article XIII provides that
the State shall guarantee the rights of
the workers to self-organization, collective
bargaining and negotiations, and peaceful
concerted activities including the right to
strike in accordance with law.
2006 Bar Question

As a result of bargaining deadlock
between
ROSE
Corp.
and
ROSE
Employees Union, its members staged a
strike.
During
the
strike,
several
employees staged a strike. During the
strike, several employees committed
illegal acts. The company refused to give
in to the unions demands. Eventually, its
members informed the company of their
intention to return back to work
Question
Answer
ROSE Corporation cannot validly refuse to admit all
workers who stage a strike. The strike is illegal because
it is not mentioned in the given problem that the
necessary procedural requirements for a valid strike had
been complied with. In illegal strike, only union officers
who knowingly participated in an illegal strike shall be
deemed to have lost their employment. Moreover, those
workers who committed illegal acts during legal or illegal
strike shall be deemed to have lost their employment.
Thus, only union officers who knowingly participated in
an illegal strike and all union members who committed
illegal act during the strike can be validly refused by the
management to report back to work.
1997 Bar Question

KKK, a newly-formed labour union claiming to
represent a majority of workers in the Company,
proceeded to present a list of demands to the
management for the purpose of collective
bargaining. The company, declined to with the
Union leaders, alleging that they had not as yet
presented any proof of majority status. KKK then
charged the Company with ULP, and declared a
wild cat strike wherein the means of ingress and
egress were blocked and isolated acts of
destruction and violence were committed.
Question
Answer
NO. The strike is illegal. A wild cat
strike is one declared by a group of
workers
without
formal
union
approval. Its illegality lies in the fact
that it was not approved by the
majority of union membership; no
strike vote report was submitted and
observance of the cooling of period
for ULP was not observed.
1998 Bar Question

The Secretary of Labour, after assumption
of jurisdiction over a labor dispute in an
airline company, issues a RTWO. The
airline filed a Motion for Reconsideration of
the Order and pending resolution of the
motion, differed the implementation of the
Order.
Can the airline defer the implementation of
the Order pending resolution of the motion
for reconsideration?
Answer
NO. The airline company cannot defer
the implementation of the RTWO
pending resolution of the motion for
reconsideration. The RTWO order
issued by the SOL upon his assumption
of
jurisdiction
is
immediately
executory. Thus, the filing of the
motion for reconsideration will not toll
the implementation of such Order.
KINDS OF EMPLOYMENT
UNDER ARTICLE 294
(280) & 295 (281)
KINDS OF EMPLOYEES
An employment shall
REGULAR
The primary
be deemed to be
standard to
determine is
the reasonable
connection
between the
particular
activity
performed by
the employee in
relation to the
usual trade and
business of the
employer. The
test is whether
the former is
usually or
desirable in the
usual business
or trade of the
regular where the

employee has been
engaged to perform
activities which are
usually necessary
or desirable in the
usual business or
trade of the
employer
Article 280
PROBLEM NO. 18
Coca-cola Bottlers Phils. Inc., is one of the
largest manufacturers of soft-drinks in
the country. Respondent workers have
long been in the service of the company.
Respondent workers when hired, would
go with route salesmen on board delivery
trucks and undertake the laborious task
of loading and unloading soft-drinks
products of the company to its various
delivery points.
Are the respondent

workers regular
employees of the
company?
ANSWER
Yes, the respondent workers are regular
employees of the company. This is because
their work is necessary and desirable in the
usual trade or business of the company. That
the activity being performed by the
respondent workers is not intimately related
to manufacturing of softdrinks is of no
moment. The nature of work performed must
be viewed from a perspective of business or
trade in its entirety and not on a confined
scope.
Necessity or desirability of
the activity performed by
the employee is to be
assessed in relation to the
general scheme of the
business or undertaking of
the employer
Magsalin, et.al., vs. National Organization
of Working Men, et.al., May 09, 2003
May regular jobs be

contracted out?
Yes, provided two

conditions are met. First,
it must be done in good
faith. Second, the same
was resorted on account
of the exigencies of
business.
Serrano vs. Isetan, January
27, 2000
CASUAL
However, his
employment
shall continue
as long as the
activity for
which he was
employed
continues to
exist.
Where employment is
one which is neither
regular nor seasonal or
fixed for a specific
project, it is deemed to
be casual.
BUT
A casual employees may

become regular if he has
rendered at least one year
of service, whether such
service is continuous or
broken with respect to
activity in which he is
employed.
PROBLEM NO. 19
Petitioners were hired to cut cogon grass and
weeds at the back of the factory building
used by private respondents. They were not
required to work on fixed schedule and they
worked on any day of the week on their own
discretion and convenience. The services of
the petitioners were terminated by the
private respondent on July 13, 1987. The
company is engaged in the manufacture of
cultured milk which is sold under the brand
name Yakult.
How may the

employment of the
petitioners be
categorized?
Answer
Petitioners
employment
may
be
categorized as casual. The usual business
or trade of private respondents is the
manufacture of cultured milk. The cutting
of the cogon grasses in the premises of
its factory is hardly necessary or desirable
in the usual business of the private
respondents. Indeed, it is alien thereto.
Suppose the petitioners

rendered service as cogon
cutter for 8 months, may
they be dismissed even
without just cause?
Yes, they may be validly dismissed.
The
petitioners
are
casual
employees. As such, they may be
validly
dismissed
before
the
expiration of the one (1) year period.
Would your answer be the

same if the petitioner
rendered service for at
least one years?
No. Any employee who has rendered
at least one year of service, whether
such service is continuous or broken,
shall be considered a regular
employee with respect to the activity
in which he is employed.
Suppose there is no more

grass to be cut, may they
be validly dismissed on
that account?
Yes. They may be validly dismissed.
Casual
employees
who
become
regularized by virtue length of service
shall continue his employment as long
as the activity for which he was
employed continues to exist.
One who
was hired
for specific
project or
undertaking,
the
completion
and
termination
of which has
been
determined
at the time
of
engagement
.
Employees must
be duly informed
of their status as
such.
PROJECT
EMPLOYEE
The principal test for
determining whether
or not particular
employees are
properly
characterized as
project employees is
whether or not the
project employees
were assigned to
carry out a specific
project or
undertaking the
duration of which
were specified at the
time the employees
were engaged for
that project.
Two Types of Project

Employees
Those
whose
job
or
undertaking is related to the
regular or usual business of
the employer.
Those
whose
job
or
undertaking is not related to
the regular or usual business
of the employer.
Indicators of Project
Employment in
Construction Industry
(Department Order No.
19, Series of 1993)
INDICATORS OF PROJECT
EMPLOYMENT
The duration of the specific/identified
undertaking for which the worker is engaged
is reasonably determinable.
Such duration, as well as the specific
work/service to be performed, is defined in
an employment agreement and is made
clear to the employee at the time of hiring.
The
work/service
performed
by
the
employee is in connection with the particular
project/undertaking for which he is engaged.
EMPLOYMENT
The employee, while not employed and
awaiting engagement, is free to offer
his services to any other employer.
The termination is reported to (DOLE)
Regional
Office
within
30
days
following the date of his separation
from work, using the prescribed form
on employees' terminations dismissals
suspensions.
EMPLOYMENT
An undertaking in the employment
contract by the employer to pay
completion bonus to the project
employee as practiced by most
construction companies.
Doctrines RE: D.O. 19

Failure to file termination reports,
particularly on the cessation of petitions
employment, was an indication that the
petitioner was not a project employee
but a regular employee.
Goma vs. Pamplona Plantation, Inc.,
557 SCRA 124
Doctrines RE: D.O. 19

An undertaking by the employer to pay a
completion bonus shall be an indicator
that the employee is a project employee.
Where there is no such undertaking, the
employee may be considered a nonproject employee
Hanjin Heavy Industries vs. Inanez,
26 June 2008
May project employee

become regular
employee?
A project employee or a
member of a work pool may
acquire the status of a regular
employee when the following
concur:
1) There is a continuous rehiring of
project employees even after the
cessation of a project;
2) The tasks performed by the alleged
"project employee" are vital, necessary
and indispensable to the usual business
or trade of the employer.
Cocomangas Hotel Beach

Resort vs. Visca, 567
SCRA
269
In the present case, respondents cannot
be classified as project employees, since
they worked continuously for petitioners
from three to twelve years without any
mention of a project to which they were
specifically assigned. While they had
designations as foreman, carpenter
and mason, they performed work other
than carpentry or masonry.

SCRA 269
They
were
tasked
with
the
maintenance and repair of the
furniture, motor boats, cottages, and
windbreakers
and
other
resort
facilities. There is likewise no
evidence of the project employment
contracts
covering
respondents'
alleged periods of employment.

SCRA 269
More importantly, there is no
evidence that petitioners reported
the termination of respondents'
supposed project employment to the
DOLE as project employees.

SCRA
269
Department Order No. 19, as well as the
old Policy Instructions No. 20, requires
employers to submit a report of an
employees termination to the nearest
public employment office every time his
employment is terminated due to a
completion of a project. Petitioners' failure
to file termination reports is an indication
that the respondents were not project
employees but regular employees.
An employment ceases to
be coterminous with specific
projects when the employee
is continuously rehired due
to the demands of
employers business and reengaged for many more
projects without
interruption.
Liganza v. RBL Shipyard

Corporation, 504 SCRA
678, citing Tomas Lao
Construction v. National
Labor Relations
Commission, 344 Phil.
268, 279 (1997).
Uy vs. Trinidad, March

10, 2010
But the test for distinguishing a project

employee from a regular employee is
whether or not he has been assigned to carry
out a specific project or undertaking, with the
duration and scope of his engagement specified
at the time his service is contracted. Here, it is
not disputed that petitioner company contracted
respondent Trinidads service by specific projects
with the duration of his work clearly set out in
his employment contracts. He remained a
project employee regardless of the number of
years and the various projects he worked for the
company.

10, 2010
Generally, length of service provides a fair

yardstick for determining when an employee
initially hired on a temporary basis becomes a
permanent one, entitled to the security and
benefits of regularization. But this standard will
not be fair, if applied to the construction
industry, simply because construction firms
cannot guarantee work and funding for its
payrolls beyond the life of each project. And
getting projects is not a matter of course.
Construction companies have no control over
the decisions and resources of project
proponents or owners.

10, 2010
For this reason, the Court held in Caseres v.

Universal
Robina
Sugar
Milling
Corporationthat
the
repeated
and
successive rehiring of project employees do
not qualify them as regular employees, as
length of service is not the controlling
determinant of the employment tenure of a
project
employee,
but
whether
the
employment has been fixed for a specific
project or undertaking, its completion has
been determined at the time of the
engagement of the employee.
PROBLEM NO. 20
Pedro,
an
experienced
construction
worker, was hired DMCI, a construction
company, as one of the workers who will
construct a 35 floor condominium
building. The building is expected to be
finished in 14 months. Thus, Pedro was
hired for such duration. After, 14 months,
the services of Pedro was terminated.
DMCI complied with the requirements of
D.O. No. 19 prior to terminating Pedro.
PROBLEM NO. 20
Pedro protested his termination of the
ground that he is a regular employee as
he performed works or activities which
are necessary and desirable in the usual
trade or business of DMCI. Moreover,
according to Pedro, since he has
performed service for 14 months, he
should
be
considered
as
regular
employee. Hence, entitled to security of
tenure.
IS PEDRO, AS
REGULAR EMPLOYEE?
ANSWER
Pedro is not a regular employee. He is a
project employee. Pedro was engaged for a
particular project or undertaking, completion
and termination of which has been
determined at the time of his engagement.
That his services lasted for 14 months is of
no moment. An employee who has rendered
service for at least one year shall be
considered regular pertains to causal
employees and not to project employees.
Caseres vs. Universal

Robina Milling
Corporation, 515 SCRA
288
The length of service or rehiring of construction workers

on a project to project basis
does not confer upon them
regular employment status
since their re-hiring is only a
natural consequence of the fact
that experienced construction
workers are preferred.
Hanjin Heavy Industries vs.
Inanez,
26 June 2008
Seasonal Employee
Seasonal workers are those
who are called to work from
time to time according to the
occurrence of varying need
during a season, and are laid
off after the completion of
the required phase of work
for the season
For workers to be excluded from

those classified as regular
employees, it is not enough that
they perform work or services that
are seasonal in nature. They must
have also been employed only for
the duration of one season.
Hacienda Fatima vs. National
Federation of Sugarcane
Workers, 28 January 2003
Philippine Tobacco vs.

NLRC
Seasonal employees are
regular employees and
merely
considered
on
leave without pay duringoff season.
Mercado, Sr., vs. NLRC,

September 5, 1991
The Mercado ruling refused to apply
the element of time mentioned in the
second paragraph of Article 280. It is
said essentially that the one year duration
on the job is pertinent to deciding whether
a casual employee has become regular or
not. But it is not pertinent to seasonal or
project employee. In other words, the
passage of time does not make a seasonal
worker regular or permanent.
Mercado, Sr. vs. NLRC

Last paragraph of Article 280
An employment shall be deemed casual if
it is not covered by the preceding
paragraph. Provided, that any employee
who has rendered at least one year of
service, whether such service is continuous
or broken, shall be considered a regular
employee with respect to the activity in
which he is employed and his employment
shall continue while such activity exists.
Mercado, Sr., vs. NLRC,

September 5, 1991
The general rule is that the office of a proviso is to
qualify or modify only the phrase immediately
preceding it or restrain or limit the generality of the
clause that it immediately follows. Thus, it has
been held that a proviso is to be construed with
reference to the immediately preceding part of
the provision to which it is attached, and not to
the statute itself or to other sections thereof.
The only exception to this rule is where the
clear legislative intent is to restrain or qualify
not only the phrase immediately preceding it
(the proviso) but also earlier provisions of the
statute or even the statute itself as a whole.
Probationary Employee
Those who are hired for generally
regular positions but are placed on
probationary status generally for a
period of six months. He may become
regular once he has qualified as such
in accordance with the reasonable
standards made known to him at the
time of hiring. They are considered
regular if they are allowed to work
beyond probationary period.
In all cases involving

employees on
probationary status, the
employer shall make
known to the employee
at the time he is hired,
the standards by which
he will qualify as regular
employee. Otherwise, he
is hired as regular
What are the grounds for

terminating a probationary
employee?
The general rule is that

probationary period is six
(6) months.
Exceptions to the
General Rule
Learnership/apprenticeship period
Three years in case of teacher
Where the parties agree to a
longer term by virtue of company
policy or when the same is
required by the nature of the work
Problem No. 21
Luisa and Carla were hired as receptionists in a
Hotel. He was hired as a probationary employee
for a period of six (6) months. At the time of
their engagement, they were informed of the
criteria that they have to comply for them to be
qualified as regular employees. On the third
month of their employment, Luisa was informed
that she already qualified as regular employee.
On the other hand, on the same period, Carla
was terminated as she was not able to comply
with the criteria set up by the Hotel.
Questions
Answer 1
The regularization of Luisa is legal.
There is nothing under the Labour
Code that would preclude the
employer from extending a regular or
a permanent appointment to an
employee once the employer finds
that the employee is qualified for
regular employment even before the
expiration of the probationary period.
Answer 2
The dismissal of Carla is valid. There is nothing
under the Labour Code that would preclude the
employer from extending a regular or a permanent
appointment even before the end of the
probationary period, if the purpose sought by the
employer is neither attained nor attainable within
the said period. Article 281 (295) does not likewise
preclude the employer from terminating the
probationary employment on justifiable causes.
Canadian
Opportunities
Unlimited
vs.
Dalangin (2012)
May probation period be

extended?
Yes, if it is to give the
probationary employee a chance
to meet companys standard.
Mariwasa Manufacturing vs.
Leogardo
Probation of
Teachers
1. Teacher must be full time
2. Three consecutive years of
service
3. Such service must be
satisfactory
Lacuesta vs. ADMU, 477

SCRA 217
Completing the probation period does not
automatically qualify her to become a permanent
employee of the university. Petitioner could only
qualify to become a permanent employee upon
fulfilling the reasonable standards for permanent
employment as faculty member. Consistent with
academic freedom and constitutional autonomy, an
institution of higher learning has the prerogative to
provide standards for its teachers and determine
whether these standards have been met. At the end
of the probation period, the decision to re-hire an
employee on probation, belongs to the university as
the employer alone.
Problem No. 22
Procopia was hired as receptionist in a Hotel.
She had undergone an on the job training for 3
weeks in order to determine whether she was
apt to be included in the regular work force.
Aside from the requirement of on the job
training, she had to undergo a probationary
period of six (6) months. Four days before the
expiration of the stipulated deadline of probation
of six (6) months, the Hotel notified her of her
dismissal, on the ground that her performance
had not come up to the standards of the Hotel.
Is the dismissal of Procopia

valid?
Holiday Inn Manila vs.

NLRC,
226 SCRA 417
The dismissal of Procopia is illegal. Probation
is the period during which the employer may
determine if the employee is qualified for
possible inclusion in the regular force. In the
case at bar, the period was for three weeks,
during Procopia's on-the-job training. When
her services were continued after this
training, the Hotel in effect recognized that
she had passed probation and was qualified
to be a regular employee.
TERMINATION OF
EMPLOYMENT
ART. 292. Coverage. The provisions of this

Title shall apply to all
establishments
or
undertakings, whether
for profit or not.
Constitutional
Underpinning
TERMINATION OF
EMPLOYMENT
ART.
292.
Security
of
tenure. - In cases of regular
employment, the employer
shall
not
terminate
the
services of an employee
except for a just cause or
when authorized by this Title.
EFFECT OF ILLEGAL
DISMISSAL
An
employee
who
is
unjustly
dismissed from work shall be entitled:
To reinstatement without loss of seniority
rights and other privileges and
To his full backwages, inclusive of
allowances, and to his other benefits or
their monetary equivalent computed from
the time his compensation was withheld
from him up to the time of his actual
reinstatement [Article (179) 293].
Conflict of Rights
Management Rights
Just Causes
(a)
Serious
misconduct
or
willful
disobedience;
(b) Gross and habitual neglect;
(c) Fraud or willful breach by the employee of
the trust reposed in him;
(d) Commission of a crime or offense by the
employee against the person of his employer
or any immediate member of his family or his
duly authorized representatives;
(e) Other causes analogous to the foregoing.
S-N-F-C-A (Article [282] 296)
Serious Misconduct
Serious Misconduct
Improper or wrongful conduct. It is serious
when the misconduct is of such a grave and
aggravated character not merely trivial or
unimportant
Chua-Qua vs. Clave, August 30, 1990
If the two fell in love despite the disparity
of their ages and academic level, it only
lends to the truism that heart has reasons
which reason does not know. Yielding to
this gentle and universal emotion is not
be casually equated with immorality
Santos vs. Hagonoy, Institute, (1998)
Wilful Disobedience
Problem No. 22
The policy of the Paper Manufacturing Co. provides that:
1. New applicant will not be hired if he/she has a relative, up
to the 3rd degree of relationship, already employed by the
company.
2. In case of two of our employees (singles, one male and
another female) developed a friendly relationship during the
course of their employment and then decided to get
married, one of them should resign to preserve the policy
stated above.
Cita and Chito, both co-employees got married with each
other. Neither one of them resigned. Hence, they were both
terminated for wilful disobedience.
Question
Answer
NO. The dismissal is not valid. Cita and
Chito are not guilty of wilful disobedience.
The policy which Cita and Chito allegedly
violated is not reasonable. There is no
showing how the marriage of two coemployees will materially affect their
performance and efficiency in company.
In resolving similar issue, the case of Star
Paper Corp. vs. Simbol established the
disparate impact theory.
Star Paper Corp vs.

Simbol (2006)
Under the disparate impact theory, the only way

it could pass judicial scrutiny is a showing that it
is reasonable despite being discriminatory. In
such cases, it is necessary to prove a legitimate
business concern in imposing the questioned
policy and that should not prejudice the
employees right to be free from arbitrary
discrimination based upon stereotypes of married
persons working together in one company.
Willful Disobedience
Transfer of employees
It is a management prerogative.
As a general rule, transfer of an
employee is valid and failure of
the employee to abide with the
order of transfer is willful
disobedience
Willful Disobedience
But transfer of employees must
comply with some parameters
It must be exercised without
grave abuse of discretion, putting
to mind the basic elements of
justice and fair play. The transfer
must also be reasonable.
Ruiz vs. Wendel Osaka

Realty (2012)
An office manager was preventively
suspended for 30 days while an
investigation was being conducted on the
charge that she stole company records.
The 30 days lapsed but the investigation
was not yet finished. The management
decided that instead of reinstating the
petitioner to her previous position, she was
transferred to another location without
loss of all the privileges and benefits. She
was nonetheless given a transportation
allowance for her new locations.
Ruiz vs. Wendel Osaka

Realty (2012)
Petitioner filed a case for constructive
dismissal.
There is no constructive dismissal.
Re-assignments made by management pending
investigation of irregularities allegedly committed
by an employee fall within the ambit of
management prerogative. The purpose of
reassignments is no different from that of
preventive suspension which management could
validly impose as a disciplinary measure for the
protection of the company's property pending
investigation of any alleged malfeasance or
misfeasance committed by the employee.
Misamis Oriental Electric

Coop vs. Cagalawan (2012)
Cagalawan was the Head of the disconnecting
crew of the Electric Coop assigned in
Balingasag,
Misamis
Oriental.
He
was
transferred to Gingoog City of the same
province as member of disconnecting crew in
that area. Cagalawan protested on the ground
that it was a demotion. Cagalawan also
contended that the reason why he was
transferred was because he supported an
employee who filed an illegal dismissal case
against the Cooperative.

Cagalawan stopped working and instead filed a
case for constructive dismissal?
The Court ruled in favor of Cagalawan.
Here, while we find that the transfer of Cagalawan
neither entails any demotion in rank since he did
not have tenurial security over the position of head
of the disconnection crew, nor result to diminution
in pay as this was not sufficiently proven by him,
MORESCO IIs evidence is nevertheless not enough
to show that said transfer was required by the
exigency of the electric cooperatives business
interest.

Notably, the only evidence adduced by MORESCO
II to support the legitimacy of the transfer was
the letter-request of Engr. Canada. However, this
piece of evidence cannot in itself sufficiently
establish that the Gingoog sub-office was indeed
suffering from losses due to collection deficiency
so as to justify the assignment of additional
personnel in the area. Engr. Canadas letter is
nothing more than a mere request for additional
personnel
to
augment
the
number
of
disconnection crew assigned in the area.

While it mentioned that the areas collection efficiency
should be improved and that there is a shortage of
personnel therein, it is, standing alone, self-serving and
thus cannot be considered as competent evidence to
prove the accuracy of the allegations therein. MORESCO
II could have at least presented financial documents or
any other concrete documentary evidence showing that
the collection quota of the Gingoog sub-office has not
been met or could not be reached. It should have also
submitted such other documents which would show the
lack of sufficient personnel in the area. Unfortunately,
the area managers letter provides no more than bare
allegations which deserve not even the slightest credit.
Cases on Transfer
Homeowners Savings and Loans
Association vs. NLRC
Accountant assigned at San Carlos,
Pangasinan
and
transferred
to
Urdaneta, Pangasinan
Escobin vs. NLRC
Security guards assigned in Basilan
were deployed to Manila
Dosch vs. NLRC
Promotion with transfer
Gross Neglect of
Duties
In order to constitute a just cause for the
employees' dismissal, the neglect of duties
must not only be gross but it must also be
habitual.
However, to justify the dismissal of an
employee for neglect of duties, it is not
necessary that the employer show that he was
prejudiced or damaged by reason of such
neglect of duty. What is necessary is that gross
neglect of duties tends to damage or prejudice
the employer.
Gross Neglect of
Duties
Gross Neglect of
Duties
Abandonment
Immediate filing of complaint for
illegal dismissal against the employer
with prayer for reinstatement shows
that
the
employee
was
not
abandoning his work
Arc-Men Food Industries Corp. vs.
NLRC
Fraud and Willful Breach

of Trust

of Trust
Loss of confidence as a valid ground
for the termination of employee
should apply only to:
Cases involving employees occupying
positions of trust and confidence
Situations where employee is routinely
charged with care and custody of the
employers money or property

of Trust

of Trust
Does
failure
to
reach
sales
or
production quota amount to breach of
trust that justifies dismissal?
No. It cannot be considered an intentional
and
unjustified
act
of
employee
amounting to a willful breach of trust on
his part that would call for his termination.
Indeed, the low sales performance could
be attributed to several factors which are
beyond employees control.
Norkis vs. Descallar, March 14, 2012

of Trust
Does lack of knowledge of labor laws
by an HR a valid reason for dismissal?
Yes. Due to the nature of her functions,
petitioner (HR Director) is expected to
have a strong working knowledge of
labor laws and regulations to help shed
light on issues and questions regarding
the same.
Reyes-Royal vs. Phil. Luen Thai
Holdings (2012)
Other Causes
Commission of the
Crime
Conviction not a
requirement
Analogous Cases
Is it lawful to prohibit employment

with competitor after receiving
retirement package
from the former employer?
In determining whether the contract is
reasonable or not, the trial court should
consider the following factors: (a) whether the
covenant protects a legitimate business interest
of the employer; (b) whether the covenant
creates an undue burden on the employee; (c)
whether the covenant is injurious to the public
welfare; (d) whether the time and territorial
limitations contained in the covenant are
reasonable; and (e) whether the restraint is
reasonable from the standpoint of public policy.

retirement package
There is a distinction between restrictive
covenants barring an employee to accept a
post-employment competitive employment or
restraint on trade in employment contracts
and restraints on post-retirement competitive
employment in pension and retirement plans
either incorporated in employment contracts,
which provide that an employee who accepts
post retirement competitive employment will
forfeit retirement and other benefits or will be
obliged to restitute the same to the employer.

retirement package
The strong weight of authority is that
forfeitures for engaging in subsequent
competitive
employment
included
in
pension and retirement plans are valid even
though unrestricted in time or geography.
Riveral vs. Solidbank, April 19, 2006
Termination due to
enforcement of union
security clause, requisites:
Union security clause is applicable
Union is requesting for its enforcement
There is sufficient evidence to support the
unions decision to expel the employee
from the Union or company
Hotel Enterprise of the Phil. Vs.
Samahan ng Manggagawa sa Hyatt
(588 SCRA 497)
Contract based
dismissal
Is non-compliance with a stipulation in
the employment contract a valid or just
cause of termination? Does this fall under
analogous cases? May the dismissal be
justified if the cause is not one of those
enumerated in Article 282?
The agreement shall be governed by
contract of employment. Autonomy
of contract shall be applicable.
2010 Bar Question

A was an able seaman contracted by ABC
Recruitment Agency for its foreign principal,
Seaworthy Shipping Company (SSC). His
employment contract provided that he would
serve on board the Almieda II for eight (8)
months with a monthly salary of US$450. In
connection with his employment, he signed an
undertaking to observe the drug and alcohol
policy which bans possession or use of all
alcoholic beverages, prohibited substances
and un-prescribed drugs on board the ship.
2010 Bar Question

The undertaking provided that: (1)
disciplinary action including dismissal
would be taken against anyone in
possession
of
the
prohibited
substances or who is impaired by the
use of any of these substances, and
(2) to enforce the policy, random test
sampling would be done on all those
on board the ship.
2010 Bar Question

On his third month of service while the
Almieda II was docked at a foreign port, a
random drug test was conducted on all
members of the crew and A tested positive
for marijuana. He was given a copy of the
drug test result. In compliance with the
companys directive, he submitted his
written explanation which the company did
not find satisfactory. A month later, he was
repatriated to the Philippines.
2010 Bar Question

Upon arrival in the Philippines, A filed with
the National Labour Relations Commission
(NLRC) a complaint against the agency and
the principal for illegal dismissal with a
claim for salaries for the unexpired portion
of his contract.
Was As dismissal valid? Explain.
Is his claim for salaries for the
unexpired portion of his contract
tenable? Explain.
Answer 1
Was As dismissal valid? Explain.
No. The dismissal of A is not valid. The
employment contract between A and the
Employer
governs
their
employment
relationship. It is provided in their contract
that clearly provided in their contract that
disciplinary action including dismissal would
be taken against anyone in possession of the
prohibited substances or who is impaired by
the use of any of these substances.
Answer 1
A was not found to be in possession of
illegal substances. Neither was A
impaired by the use of any of these
prohibited substances. Admittedly, there
is some doubt as to whether, the
agreement will is applicable to the given
problem. Suffice it to say, however, that
any doubts in the interpretation of a
labor contract shall be resolved in favor
of labor.
Answer 2
Is his claim for salaries for the
unexpired portion of his contract
tenable? Explain
Yes. Under Section 10 of the Migrant
Workers Act, as amended, in case of
illegal dismissal, the aggrieved party is
entitled, among others, to the unexpired
portion of the contract or for 3 months for
every year of the unexpired term which
ever is less.
Authorized Causes for

Termination
Installation of labor
saving device
Procedural Requirements:
Service of written notice on worker and DOLE at
least one month before the intended date of
termination
Payment of separation pay equivalent at least one
(1) month or one (1) month for every year of
service whichever is higher. A fraction of at least
six months shall be considered one year.
Redundancy
It exists when the services
of an employee are in
excess
of
what
is
reasonably demanded by
the actual requirements of
the enterprise.
Redundancy
Service of written notice on worker and DOLE
at least one month before the intended date
of termination
Payment of separation pay equivalent at least
one (1) month or one 1 month for every year
of service whichever is higher. A fraction of at
least six months shall be considered one year.
Requisites for
implementation of a
valid redundancy
Written noticeprogram
served on both the employee
and DOLE at least 1 month prior to intended

date of termination
Payment of separation pay equivalent to 1
month or at least 1 month for every year of
service, whichever is higher
Good faith in abolishing redundant positions
Fair and reasonable criteria in ascertaining
what positions are to be declared redundant
GMC vs. Viajar, (2013)

While it is true that the characterization of an
employees services as superfluous or no longer
necessary and, therefore, properly terminable, is an
exercise of business judgment on the part of the
employer, the exercise of such judgment, however,
must not be in violation of the law, and must not be
arbitrary or malicious. The Court has always stressed
that a company cannot simply declare redundancy
without basis. To exhibit its good faith and that there
was a fair and reasonable criteria in ascertaining
redundant positions, a company claiming to be over
manned must produce adequate proof of the same.

There is no showing that GMC made an evaluation
of the existing positions and their effect to the
company. Neither did GMC exert efforts to present
tangible proof that it was experiencing business
slow down or over hiring. The Establishment
Termination Report it submitted to the DOLE Office
did not account for anything to justify declaring the
positions redundant. The Court notes that the list of
terminated employees presented by GMC was a list
taken as of June 6, 2006 or almost three years after
the respondent was illegally dismissed and almost
a year after the LA promulgated its decision.

While the petitioner had been harping that it
was on a reduction mode of its employees, it
has not presented any evidence (such as new
staffing pattern, feasibility studies or proposal,
viability of newly created positions, job
description
and
the
approval
of
the
management of the restructuring, audited
financial documents like balance sheets, annual
income tax returns and others) which could
readily show that the companys declaration of
redundant positions was justified.

Such proofs, if presented, would suffice to show the
good faith on the part of the employer or that this
business prerogative was not whimsically exercised in
terminating respondents employment on the ground
of redundancy. Unfortunately, these are wanting in the
instant case. The petitioner only advanced a selfserving general claim that it was experiencing
business reverses and that there was a need to
reduce its manpower complement. On the other hand,
the respondent presented proof that the petitioner
had been hiring new employees while it was firing the
old ones, negating the claim of redundancy.
Retrenchment
Retrenchment is one of the economic
grounds resorted by the employer to
terminate employment primarily to
avoid or minimize business losses.
However, the employer bears the
burden of proving his allegation of
business or economic reverses.
Retrenchment
It is necessary to prevent losses and such
losses are proven
Service of written notice on worker and DOLE
at least one month before the intended date
of termination
Payment of separation pay equivalent at
least one (1) month or one half (1/2) month
for every year of service whichever is higher.
A fraction of at least six months shall be
considered one year.
Retrenchment
Standards to justify
retrenchment:
Losses expected should be substantial and
not merely de minimis
Substantial loss apprehended must be
reasonably imminent
It is needed to prevent the expected losses
Realized or expected losses must be proven
by sufficient and convincing evidence.
Closure of Business
Two kinds of closure of
business:
Closure because of losses
Closure of management
decision not on the basis
of losses
Closure of Business
Closure because of losses
Service of written notice on worker
and DOLE at least one month before
the intended date of termination
No obligation to give separation pay
North Davao Mining Corp. vs.
NLRC
Closure of Business
Closure of management decision
not on the basis of losses
Requirements:
Service of written notice on worker and
DOLE at least one month before the
intended date of termination.
Payment of separation pay equivalent at
least one (1) month or one half month for
every year of service whichever is higher. A
fraction of at least six months shall be
considered one year.
Sale in Good Faith

No law prohibits bona fide sale of a going
enterprise. When that happens, the purchaser
has no legal obligation to continue employing
the employees of the seller. The seller, as the
employer, is obliged to pay his employees
separation pay and other benefits. The
transferee may, but is not obliged to give
preference to the former employees.
San Felipe Neri School vs. NLRC, Sept. 11,
1991
Merger of Company
Sale is not the same as merger and the effects
of merger are far from those of sale.
In merger, succession of employment rights
and obligations occurs between the absorbing
corporation. Not only must the absorbing
corporation retain the employees, it should also
recognize the length of service in the previous
employer. Successor of employer applies.
Filipinas Port Services vs. NLRC, Aug. 16,
1991
Ailment and Disease

ART.
298.
Disease
as
ground
for
termination. - An employer may terminate the
services of an employee who has been found to
be suffering from any disease and whose
continued employment is prohibited by law
or is prejudicial to his health as well as to
the health of his co-employees: Provided,
That he is paid separation pay equivalent to at
least one (1) month salary or to one-half (1/2)
month salary for every year of service,
whichever is greater, a fraction of at least six (6)
months being considered as one (1) whole year.
Ailment and Disease

The implementing Rules requires that there
must be a certification by competent authority
that the disease is of such nature or at such
stage that it cannot be cured within a period of
six months even with proper medical
treatment.
Medical certificate issued by the companys
physician is not certificate by competent
authority. (Cebu Royal Plant vs. Ministry
of Labor, 1987); The requirement of medical
certificate cannot be dispensed with (Manly
Express, Inc., vs. Payong, 2005)
Procedure to Terminate an
Employee
I. Termination based on Just Causes
A. Written notice served on the employee
specifying the grounds for termination and
giving said employee an opportunity to explain
his side.
B.
Hearing or conference where the
employee is given an opportunity to respond
to the charge.
C. Written notice of termination served on
the employee stating the ground for
employees termination.
Employee
Formal
hearing
not
required
Gatus vs. Quality House, Inc.
Procedural due process not
wiped
away
by
union
security clauses
Cario vs. NLRC
Employee
II. Termination
based
on
Authorized Causes
The requirement of due process shall
be deemed complied with upon
service of written notice to the
employee and the appropriate
regional office of DOLE at least 30
days before the effectivity of
termination, specifying the ground
or grounds for termination
Employee
III.
Other Causes of Termination
If the termination is brought about by the
completion of contract or phase thereof, no
prior notice is required.
If termination is brought about by the
failure of an employee to meet the
standards of the employer in the case of
probationary employment, it shall be
sufficient that written notice is served
within reasonable time from the effective
date of termination.
Preventive Suspension
Preventive suspension is for a period of 30
days if the continued employment of the
employee poses a serious and imminent
threat to the life or property of the
employer or his co-workers.
After that the employer shall reinstate the
worker to his former position or in a
substantially equivalent position.
Preventive suspension exceeding 30 days
is constructive dismissal
Does suspension need

two notice requirement?
Consequences of
Termination
Four kinds of Separation Pay
Separation pay as employers statutory obligation

in cases of termination due to authorized causes
under Article 283 or 284.
Separation pay as financial assistance, as an act of
social justice, even in cases of legal dismissal
under Article 282.
Separation pay in lieu of reinstatement in illegal
dismissal in cases where the employee is ordered
reinstated but reinstatement is not anymore
possible.
Separation pay as employees benefit granted in a
CBA or company policy.
Consequences of
Termination
Separation pay as an act of social

justice
Separation pay as an act of social justice may be
granted to employee dismissed for just causes,
except (1) for serious misconduct and other
offense reflecting on his moral character.
These exceptions have been expanded as they
now include offenses from clause (a) to (d) under
Article 282. Dismissal under these clauses
precludes separation pay or financial assistance.
(Toyota Motor Phil. Workers Association vs.
NLRC)
Consequences of
Termination
When is there legal dismissal?
There is valid dismissal when the
following elements are present:
When the dismissal is for just and
authorize causes under the Labor Code.
When there is observance of procedural
due process.
Thus: there must be observance of
substantive and procedural due
process.
Consequences of
Termination
Dismissal for cause

without
due process
Prior to the promulgation of Wenphil

Corp. vs. NLRC in 1989, the rule was
non-observance
of
procedural
due
process would make the dismissal illegal.
It was changed by Wenphil.
Serrano vs. NLRC, January 27, 2000
modified Wenphil. When due process is
disregarded, the dismissed employee
should be awarded full backwages.
Consequences of
Termination
Dismissal for cause without due
process
Viernes vs. NLRC, April 4, 2003
furthered modified Wenphil and Serrano.
The employee dismissed for valid
reasons, remains dismissed, but the
employer
who
disregarded
proper
procedure, must pay full backwages, in
addition to separation pay and indemnity
Consequences of
Termination
Dismissal for cause without due
process
Agabon vs. NLRC discards Serrano
and partially restores Wenphil.
The violation of employees right to
procedural due process by the
employer will make the latter liable for
indemnity which is left to the sound
discretion of the court. But it should be
higher than that imposed in Wenphil.
Dismissal for cause

without
due process
Dismissal for cause without due process

JAKA Food vs. Pacot, March 28, 2005
If the dismissal is based on a just cause under
Article 282 but the employer failed to comply
with the notice requirement, the sanction on
the employer is tempered because the
dismissal is by the act of the employee.
If dismissal is for authorized causes without
observance of due process, the penalty is
stiffer inasmuch as the act of dismissal is
initiated by employer.
Dismissal for cause

without
due
process
Dismissal for cause without due process
JAKA in turn was refined by Industrial
Timber vs. NLRC, March 30, 2006
Authorized causes contemplates two situations:

Termination due to losses
Termination not due to losses.
If the authorized cause that terminates
employment arises from losses, the penalty to
the employer to the disregarded due process
may be lighter than if the authorized cause has
no relation to losses.
Consequences of Illegal
Dismissal
Backwages
Coverage: From the time the employee
has been prevented from working up to
the employees actual reinstatement.
Backwages must be full:
Mercury Drug Rule: 3 years without
qualification and deduction
Rule now: Bustamante vs. NLRC
Full back-wages without deduction.
What is the rate of

salary upon
reinstatement?
Reinstatement means restoration to a

state condition from which one has
been removed or separated. One who is
reinstated assumes the position he
occupied prior to the dismissal and is,
ordinarily entitled only to the last salary
in that position.
Grolier International vs. Executive
Labor Arbiter, August 31, 1989
2 Ways of
Reinstatements
Is reinstatement selfexecutory?
In Pioneer Texturizing Corp vs.
NLRC, October 16, 1997,
1997 the Court
using as basis R.A. 6715 which uses
the
phrase
shall
immediately
executory
without
qualification,
opined that reinstatement need not be
effected through execution. It is
immediately
executory
pending
appeal.
Is the employee whose

dismissal was ruled upon
by LA as illegal whose
decision was eventually
reversed, required to
reimburse the
backwages he received
from the employer?
Roquero vs PAL, April 22,

2003
Hence, even if the order of reinstatement of the
Labor Arbiter is reversed on appeal, it is obligatory
on the part of the employer to reinstate and pay
the wages of the dismissed employee during the
period of appeal until reversal by the higher court.
On the other hand, if the employee has been
reinstated during the appeal period and such
reinstatement order is reversed with finality, the
employee is not required to reimburse whatever
salary he received for he is entitled to such, more
so if he actually rendered services during the
period.
Garcia vs. PAL, January 20, 2009
LABOR LITIGATION
JURISDICTION OF
LABOR ARBITERS
Unfair labor practice
Termination disputes
Cases involving wages, rates of pay, hours
of work and other terms and conditions of
employment, if accompanied with a claim
for reinstatement
Claims for damages arising from employeremployee relations
Legality of strikes and lock-outs
All other claims arising from EE relations
involving an amount exceeding 5000
[Article 224]
JURISDICTION OF
LABOR ARBITERS
Money claims arising out of employeremployee relationship or by virtue of any
law or contract, involving Filipino workers
for overseas deployment, including claim
for actual, moral, exemplary and other
forms of damages as well as termination of
OFWs [Section 10, RA 8042]
Wage distortion disputes in an unorganized
establishments [Article 124]
Enforcement of compromise agreements
when there is non-compliance by the
parties [Article 33]
Correlation of
Jurisdiction
EXCEPT
AS
OTHERWISE
PROVIDED UNDER THIS CODE
Not all labor cases should be tried
and decided or are within the
jurisdiction of the Labor Arbiter.
Article 224 should be correlated with
other provisions of the Labor Code.
Correlation of
Jurisdiction
Visitorial and Enforcement

Power of SOL under Article
128
The visitorial and investigatory power of

the SOL under Article 128 is broad enough
to cover any fact, conditions or matter
related to the enforcement not only of the
LC but of any labor law.
Such power is likewise unlimited by the
amount of monetary liability involved. The
liability may be enforced through an order
or writ of execution regardless the amount
involved.
Visitorial and Enforcement

Power of SOL under Article
128
(b) Notwithstanding the provisions of Articles 129

and 217 of this Code to the contrary, and in
cases where the relationship of employeremployee still exists, the Secretary of Labor
and Employment or his duly authorized
representatives shall have the power to issue
compliance orders to give effect to the labor
standards provisions of this Code and other labor
legislation based on the findings of labor
employment
and
enforcement officers or
industrial safety engineers made in the course of
inspection.
Who determines the

existence of E-E
Indispensable
Requirement for the
exercise of enforcement
power
How do we question the

compliance order of the
RD?
How do stop the

enforcement of
compliance order
involving monetary
award?
An appeal by the employer may be

perfected only upon posting a cash or
surety bond in the amount equivalent to
the monetary award in the order
appealed from.
Article 128 (b)
Small Money Claims

under
Article 129
Requisites:
The claim is presented by an employee, or
person employed in domestic or household
help
The claim arises from employer-employee
relations
The claimant does not seek reinstatement
The aggregate claim of each claimant does not
exceed Php5000 (N.B. Under, Section 37 of
Kasambahay Law, claims regardless of the
amount falls within the jurisdiction of RD)
Appeal from the Order of

RD
Let us for back to LA,

VENUE:
Regional
Arbitration
Branch
having
jurisdiction over the workplace of the
complainant.
Where to or more RAB, the first to acquire
jurisdiction
Venue can be waived
The venue may be changed by written
agreement of the parties or on motion by
party, by the order of the Commission or
Labor Arbiter
Where is the workplace

for purposes of venue?
Workplace shall be understood as a place
where the employee is regularly assigned at
the time the cause of action accrues. It shall
include the place where the employee is
supposed to report back after temporary
detail or assignment.
In case of field employees, their work place is
where they are regularly assigned or where
they are supposed to regularly receive their
salaries or work instruction from or report the
result of their assignments.
Discussion on Cases
under the Jurisdiction of
the Labor Arbiter
Unfair Labor Practice
BUT:
Before the VA may
have jurisdiction over ULP,
it must be expressly agreed
by the parties, otherwise LA
will have jurisdiction over it.
May it be
decided by
Voluntary
Arbitrator or
the Secretary
of Labor?
Yes. Articles
274 and
Article 277
ISSUES:
Dismissal
on
account
of
interpretation of company personnel
policies.
The rule is termination dispute is
within the jurisdiction of the LA
unless expressly agreed upon by the
parties (SMC vs. NLRC, March 15,
1996)
Termination Disputes
Issue
Sec. 5, PD 902-A
Termination
of Corporate
Officers:
Which has
jurisdiction
Labor Arbiter
Or RTC?
B) Controversies arising out

of intra-corporate or
partnership relations
between and among
stockholders, members or
associates;
between any and all of
them and the
corporation, partnership
and association
And between such
coproration, partnership
and association and the
State with respect to their
franchise.
Termination Dispute
Issue
Mainland vs. Movilla
[1995]
Tabang vs. NLRC, Jan.

21, 1997
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
jurisdiction of SEC.
An intra-corporate
controversy is one which
arises between a
stockholder and the
corporation. There is no
distinction, qualification,
nor any exemption
whatsoever. The provision
is broad and covers all
kinds of controversies
between stockholders and
corporations.
Termination Dispute
Issue
Matling Industrial vs. Coros,
October 13, 2010
Conformably with Section 25, a position
must be expressly mentioned in the ByLaws 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.
Money Claims Issues

THE LA HAS JURISDICTION:
If the money claim regardless of the
amount
is
accompanied
with
reinstatement
If money claim is beyond 5000.
BUT: under the new Kasambahay Law,
money claims of any amount shall be
within the jurisdiction of DOLE Regional
Office. [Section 37]
When is money claim

deemed to have arisen
from employment?
Where the claim to the principal
relief sought is to be resolved not by
reference to the Labor Code or other
labor relations or a collective
bargaining agreement but by general
civil law, the jurisdiction between the
dispute belongs to the regular court
of justice and not to the Labor Arbiter
(SMC vs. NLRC, May 31, 1988)
Strikes and Lock-outs

Question relating to strikes or lockouts or
any form of work stoppage including
incidents thereof fall within the labor
arbiters jurisdiction. Whether the alleged
reason for strike is strikeable, whether
the required strike procedure is followed,
or whether the strikers committed
prohibited acts during a strike, are some
of the issues a labor arbiter may called
upon to decide.
Migrant Workers Act

Definition of OFW
(a) "Overseas Filipino worker" refers to a
person who is to be engaged, is engaged or has
been engaged in a remunerated activity in a
state of which he or she is not a citizen or on
board a vessel navigating the foreign seas other
than a government ship used for militaty or
non-commercial purposes or on an installation
located offshore or on the high seas; to be used
interchangeably with migrant worker.
Section 3(a), R.A. 8042, as amended
Money Claims
Section 10, R.A. 8042 as amended by R.A. 10022
Notwithstanding any provision of law to the contrary,
the Labor Arbiters of the National Labor Relations
Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety
(90) calendar days after the filing of the complaint, the
claims arising out of an employer-employee
relationship or by virtue of any law or contract
involving
Filipino
workers
for
overseas
deployment including claims for actual, moral,
exemplary and other forms of damage. Consistent
with this mandate, the NLRC shall endeavor to update
and keep abreast with the developments in the global
services industry.
Santiago vs. CF Sharp

Crew
Despite the absence of an employer-employee
relationship between petitioner and respondent,
the Court rules that the NLRC has jurisdiction
over petitioners complaint. The jurisdiction of
labor arbiters is not limited to claims arising
from employer-employee relationships.
Since the present petition involves the
employment contract entered into by petitioner
for overseas employment, his claims are
cognizable by the labor arbiters of the NLRC.
Santiago vs. CF Sharp

Crew
Whether the seafarer, who was prevented from
leaving the port of Manila and refused
deployment without valid reason but whose
POEA-approved employment contract provides
that the employer-employee relationship shall
commence only upon the seafarers actual
departure from the port in the point of hire, is
entitled to relief?
Does the Labor Arbiter have jurisdiction despite
the absence of employer-employee relationship?
Money Claims
Section 10, id.
"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 or for three (3)
months for every year of the unexpired term,
whichever is less.
Serrano vs. Gallant

Maritime
Sec. 10. Money Claims. - x x x In case of
termination of overseas employment without
just, valid or authorized cause as defined by
law or contract, the workers shall be entitled
to the full reimbursement of his placement
fee with interest of twelve percent (12%) per
annum, plus his salaries for the unexpired
portion of his employment contract or for
three (3) months for every year of the
unexpired term, whichever is less.
The problem is Serrano

vs. Gallant was decided
in March 24, 2009. R.A.
10022 amending R.A.
8042 which was
approved in March 4,
2010 which contains the
very same provision
decided by the Court
unconstitutional.
Serrano vs. Gallant

Maritime
In sum, prior to R.A. No. 8042, OFWs and local

workers with fixed-term employment who were
illegally discharged were treated alike in terms of the
computation of their money claims: they were
uniformly entitled to their salaries for the entire
unexpired portions of their contracts. But with the
enactment of R.A. No. 8042, specifically the adoption
of the subject clause, illegally dismissed OFWs with
an unexpired portion of one year or more in their
employment contract have since been differently
treated in that their money claims are subject to a 3month cap, whereas no such limitation is imposed on
local workers with fixed-term employment.
Serrano vs. Gallant

Maritime
The Court concludes that the subject clause

contains a suspect classification in that, in
the computation of the monetary benefits of
fixed-term employees who are illegally
discharged, it imposes a 3-month cap on the
claim of OFWs with an unexpired portion of
one year or more in their contracts, but none
on the claims of other OFWs or local workers
with fixed-term employment. The subject
clause singles out one classification of OFWs
and burdens it with a peculiar disadvantage.
Skippers United Pacific vs.

Doza
February 8, 2012
The Migrant Workers Act provides that salaries for

the unexpired portion of the employment contract
or three (3) months for every year of the unexpired
term, whichever is less, shall be awarded to the
overseas Filipino worker, in cases of illegal
dismissal. However, in 24 March 2009, Serrano v.
Gallant Maritime Services and Marlow Navigation
Co. Inc., the Court, in an En Banc Decision, declared
unconstitutional the clause or for three months for
every year of the unexpired term, whichever is less
and awarded the entire unexpired portion of the
employment contract to the overseas Filipino
worker.
Skippers United Pacific

vs.Doza
February 8, 2012
The declaration in March 2009 of the
unconstitutionality of the clause or for three
months for every year of the unexpired term,
whichever is less in RA 8042 shall be given
retroactive effect to the termination that
occurred in January 1999 because an
unconstitutional clause in the law confers no
rights, imposes no duties and affords no
protection. The unconstitutional provision is
inoperative, as if it was not passed into law at
all.
Skippers United Pacific

vs.Doza
February 8, 2012
On 8 March 2010, however, Section 7 of Republic

Act No. 10022 (RA 10022) amended Section 10 of
the Migrant Workers Act, and once again reiterated
the provision of awarding the unexpired portion of
the employment contract or three (3) months for
every year of the unexpired term, whichever is less.
Nevertheless, since the termination occurred
on January 1999 before the passage of the
amendatory RA 10022, we shall apply RA
8042, as unamended, without touching on the
constitutionality of Section 7 of RA 10022.
Who are liable?
Section 7, R.A. 10022

Principal/employer
Recruitment/placement agency
If the recruitment/placement agency
is a juridical being, the corporate
officers and directors and partners as
the case may be.
What is the nature of the

liability of the persons
liable?
Section 7, R.A. 10022

The liability of the principal/employer and the
recruitment/placement agency for any and all
claims under this section shall be joint and
several. This provision shall be incorporated in
the contract for overseas employment and shall
be a condition precedent for its approval. 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.
2010 Bar Question

A was recruited to work abroad by Speedy
Recruitment Agency as a technician for a Saudi
Arabian construction firm, with a monthly salary of
$650.00. When she got to the construction site, the
employer compelled her to sign another contract that
referred her to another employer for a salary of
$350.00. She worked for the second employer and
was paid $350.00 until her two-year contract expired.
Upon her return to the Philippines, she filed a case
against the agency and the two employers. May the
agency validly raise the defense that it was not privy
to the transfer of A to the second employer? Explain.
Answer
NO. Speedys obligation to A is joint and several
with the principal employer. The liability of the
principal/employer and the recruitment and
placement agency for any claims for money
claims shall be joint and several, which
undertaking shall form part of As employment
contract, and condition precedent for its
approval. This liability shall continue during the
entire period or duration of the employment
contract and shall not be affected by any
substitution, amendment or modification made
locally
Appeal from the

Decision
of Labor Arbiter
Where to Appeal
NLRC
When to Appeal
Within 10 calendar days from
receipt of such decisions
Appeal from the

Decision
of Labor Arbiter
Grounds for Appeal

(a) If there is prima facie evidence of abuse of
discretion on the part of the Labor Arbiter;
(b) If the decision, order or award was secured
through fraud or coercion, including graft and
corruption;
(c) If made purely on questions of law; and
(d) If serious errors in the findings of facts are
raisedwhich would cause grave or irreparable
damage or injury to the appellant.
2009 Bar Question

Alexander, a security guard of Jaguar Security
Agency (JSA), could not be given any assignment
because no client would accept him. He had a
face only a mother could love. After six (6)
months of being on "floating" status, Alexander
sued JSA for constructive dismissal. The Labor
Arbiter upheld Alexanders claim of constructive
dismissal and ordered JSA to immediately
reinstate Alexander. JSA appealed the decision to
the
NLRC.
Alexander
sought
immediate
enforcement of the reinstatement order while the
appeal was pending.
2009 Bar Question

JSA hires you as lawyer, and seeks your
advice on the following:
[a] Because JSA has no client who would accept
Alexander, can it still be compelled to reinstate
him pending appeal even if it has posted an appeal
bond?
[b] Can the order of reinstatement be immediately
enforced in the absence of a motion for the
issuance of a writ of execution?
[c] If the order of reinstatement is being enforced,
what should JSA do in order to prevent
reinstatement?
Answer 1
[a] Because JSA has no client who
would accept Alexander, can it still be
compelled to reinstate him pending
appeal even if it has posted an appeal
bond?
Yes. The posting of a bond by the

employer does not stay the execution of
reinstatement aspect of the decision.
Under
the
LC,
reinstatement
is
immediately executory.
Answer 2
[b] Can the order of reinstatement be
immediately enforced in the absence
of a motion for the issuance of a writ
of execution?
Yes. Under the LC, the reinstatement aspect
of the decision is immediately executory.
Thus, by the very language of the law, the
reinstament need not be enforced by a writ
of execution. This is in fact the ruling in
Pioneer Textirizing Corp vs. NLRC
Answer 3
[c] If the order of reinstatement is
being enforced, what should JSA do
in order to prevent reinstatement?
The
employer
cannot
prevent
reinstatement but may however, opt for
reinstatement of the employee in the
payroll of the company without requiring
him back to his work (Zamboanga City
Water District vs. Buat, 1994)
What is the
requirement if the
judgment involves
monetary award?
In case of a judgment involving a
monetary award, an appeal by the
employer may be perfected only upon
the posting of a cash or surety bond
issued by a reputable bonding company
duly accredited by the Commission in
the amount equivalent to the monetary
award in the judgment appealed from
If the judgment includes

reinstatement?
The decision of the Labor Arbiter reinstating a
dismissed or separated employee, insofar as the
reinstatement aspect is concerned,
shall
immediately be executory, even pending
appeal. The employee shall either be
admitted back to work under the same
terms and conditions prevailing prior to his
dismissal or separation or, at the option of
the employer, merely reinstated in the
payroll. The posting of a bond by the employer
shall not stay the execution for reinstatement
provided herein.
Requisites for Perfection

of Appeal
Filed within the reglementary period

Appeal must be verified
In the form of Memorandum of appeal
3 copies
Accompanied by: a) proof of payment
of legal and research fee; b) posting of
cash or surety bond; c) proof of service
Effect of non-posting
cash or
surety
bond
The appeal shall not be perfected.
The intention of the lawmaker to make

the bond an indispensable requisite for
the perfection of an appeal by the
employer is underscored by the provision
that an appeal may be perfected only
by posting cash ro surety bond.
Borja Estate vs. Spouses Ballad, June
8, 2005
Appeal from the Decision

of the NLRC
By virtue of the ruling of the Supreme
Court in St. Martin Funeral Homes
(1998), decision of the NLRC may be
reviewed through Petition for Certiorari
under Rule 65
The petition should be filed with the
Court of Appeals
From CA to SC: Rule 45
Injunctive Power of
NLRC
General Policy on injunction on

labour dispute:
Article 254 now 265 provides for nor
injunction policy: No temporary or
permanent injunction or restraining
order in any case involving or growing
out of labour dispute shall be issued by
any court or other entity, except:
Article 218 e (225 e) and 264 (278)
Injunctive Power of
NLRC
Article 225 (e)(218) - To enjoin or

restrain any actual or threatened
commission of any or all prohibited
or unlawful acts or to require the
performance of a particular act in
any labor dispute which, if not
restrained or performed forthwith, may
cause grave or irreparable damage to
any party or render ineffectual any
decision in favor of such party:
Injunctive Power of
NLRC
Provided, That no temporary or permanent

injunction in any case involving or growing
out of a labor dispute as defined in this Code
shall be issued except after hearing the
testimony
of
witnesses,
with
opportunity for cross-examination, in
support of the allegations of a complaint
made under oath, and testimony in
opposition thereto, if offered, and only
after a finding of fact by the Commission
May the Labor Arbiter

issue injunction?
NO. It is a power which exclusively belongs to
the Commission
Under Sec. 1, Rule X of the 2011 NLRC
Rules of Procedure, only the NLRC, through
its division, may issue writs of preliminary
injunctions and TRO. The role of Labor Arbiter
with regard to the issuance of writs of
preliminary injunctions, is limited to reception
of evidence as may be delegated by NLRC.
Lahm III vs. LA Mayor, Februrary 12, 2012
Employee was dismissed.

Instead of filing an
illegal dismissal case,
employee filed an
Injunction case with the
NLRC to enjoin the
implementation of his
dismissal.
Will it prosper?
It will not prosper

It is an essential requirement that there must
first be a labor dispute between the contending
parties before the labor arbiter. In the present
case, there is no labor dispute between the
employer and the employee as there has yet
been no complaint for illegal dismissal filed with
the LA.
The Injunction is in the nature of illegal dismissal
case which is under the jurisdiction of LA.
PAL vs. NLRC, October 27, 1986
Technical Rules no
Binding/
Resort to Amicable
any proceeding
before the Commission
Settlement
In
or
any of the LaborArbiters, the rules of evidence
prevailing in courts of law or equity shall not
be controlling and it is the spirit and intention
of this Code that the Commission and its
members and the Labor Arbiters shall use
every and all reasonable means to ascertain
the facts in each case speedily and objectively
and without regard to technicalities of law or
procedure, all in the interest of due process.
Article 227 (221)
Jurisdiction of BLR
Jurisdiction of BLR
Appeal Process
Decision of the Med-Arbiter and RD is
appealable to the BLR
Decision of the BLR in the exercise of its
original jurisdiction is appealable to the SOL
Decision of BLR or SOL in the exercise of its
appellate jurisdiction may be assailed
through a petition for certiorari under Rule
65
CA to SC under Rule 45

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LECTURE ON THE LAW

JUDGE GENER M. GITO, LL.M., D.C.L.

2010 Bar Question

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