Академический Документы
Профессиональный Документы
Культура Документы
Page 1
to union in an enterprise
and registers the charter
with the regional office or
the BLR
RESULT Independent union Chapter or Local
Page 2
Issue:
Whether or not there was compliance with the requirements.
Ruling:
No. We are merely saying that the local union must first comply with the
statutory requirements in order to exercise this right. Big federations and
national unions of workers should take the lead in requiring their locals
and chapters to faithfully comply with the law and the rules instead of
merely snapping union after union into their folds in a furious bid with
rival federations to get the most number of members.
Requirements before a local or chapter becomes a legitimate labor
organization.A local or chapter therefore becomes a legitimate labor
organization only upon submission of the following to the BLR: 1) A
charter certificate, within 30 days from its issuance by the labor federation
or national union, and 2) The constitution and by-laws, a statement on
the set of officers, and the books of accounts all of which are certified
under oath by the secretary or treasurer, as the case may be, of such
local or chapter, and attested to by its president. Absent compliance with
these mandatory requirements, the local or chapter does not become a
legitimate labor organization.
Page 3
case, the factual circumstances of the ratification shall be recorded in the minutes of
the organizational meeting.
Disaffiliation only upon the written resolution approved by the majority of the total
memberhip adopted at a general membership meeting called for the purpose.
When to disaffiliate?
May only disaffiliate during the 60-day freedom period immediately preceding the
expiration of the CBA.
Effects:
Disaffiliated Union may join a new federation.
Substitutionary Doctrine
Binding of the members of the new or disaffiliated and independent union to the
CBA up until the latters expiration date.
Revocation of Charter
Federation may revoke a charter by serving a verified notice of revocation to the
latter on the ground of disloyalty or other grounds as provided by its constitution
or by-laws.
Page 4
SEC. 3. Article 238 of the Labor Code is hereby amended to read as follows:
o "ART. 238. Cancellation of Registration. - The certificate of registration of
any legitimate labor organization, whether national or local, may be
cancelled by the Bureau, after due hearing, only on the grounds specified
in Article 239 hereof."
SEC. 4. A new provision is hereby inserted into the Labor Code as Article 238-A t
o read as follows:
o "ART. 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.
o In case of cancellation, nothing herein shall restrict the right of the union
to seek just and equitable remedies in the appropriate courts."
Art. 239. Grounds for cancellation of union registration. The following shall
constitute grounds for cancellation of union registration:
Fraudulent Acts
1. Misrepresentation, false statement or fraud in connection with the adoption or
ratification of the constitution and by-laws or amendments thereto, the minutes
of ratification and the list of members who took part in the ratification;
Inaction or Omission
2. Failure to submit the documents mentioned in the preceding paragraph within
thirty (30) days from adoption or ratification of the constitution and by-laws or
amendments thereto;
3. Misrepresentation, false statements or fraud in connection with the election of
officers, minutes of the election of officers, the list of voters, or failure to submit
these documents together with the list of the newly elected/appointed officers
and their postal addresses within thirty (30) days from election;
4. Failure to submit the annual financial report to the Bureau within thirty (30) days
after the closing of every fiscal year and misrepresentation, false entries or fraud
in the preparation of the financial report itself;
Failure to comply with requirements under Articles 237 and 238.
a. Art. 237. Additional requirements for federations or national unions.
Subject to Article 238, if the applicant for registration is a federation or a
Page 5
national union, it shall, in addition to the requirements of the preceding
Articles, submit the following:
i. Proof of the affiliation of at least ten (10) locals or chapters, each
of which must be a duly recognized collective bargaining agent in
the establishment or industry in which it operates, supporting the
registration of such applicant federation or national union; and
ii. The names and addresses of the companies where the locals or
chapters operate and the list of all the members in each company
involved.
b. Art. 238. Conditions for registration of federations or national unions. No
federation or national union shall be registered to engage in any
organization activity in more than one industry in any area or region, and
no federation or national union shall be registered to engage in any
organizational activity in more than one industry all over the country.
The federation or national union which meets the requirements and
conditions herein prescribed may organize and affiliate locals and
chapters without registering such locals or chapters with the Bureau.
Locals or chapters shall have the same rights and privileges as if they
were registered in the Bureau, provided that such federation or national
union organizes such locals or chapters within its assigned organizational
field of activity as may be prescribed by the Secretary of Labor.
The Bureau shall see to it that federations and national unions shall only
organize locals and chapters within a specific industry or union.]
(Repealed by Executive Order No. 111, December 24, 1986)
Art. 238. Cancellation of registration; appeal. The certificate of
registration of any legitimate labor organization, whether national or
local, shall be cancelled by the Bureau if it has reason to believe, after
due hearing, that the said labor organization no longer meets one or
more of the requirements herein prescribed.
[The Bureau upon approval of this Code shall immediately institute
cancellation proceedings and take such other steps as may be necessary
to restructure all existing registered labor organizations in accordance
with the objective envisioned above.] (Repealed by Executive Order No.
111, December 24, 1986)
Page 6
Unlawful Acts
1. Acting as a labor contractor or engaging in the "cabo" system, or otherwise
engaging in any activity prohibited by law;
2. Entering into collective bargaining agreements which provide terms and
conditions of employment below minimum standards established by law;
3. Asking for or accepting attorneys fees or negotiation fees from employers;
4. Other than for mandatory activities under this Code, checking off special
assessments or any other fees without duly signed individual written
authorizations of the members;
5. Failure to submit list of individual members to the Bureau once a year or
whenever required by the Bureau; and
Page 7
Art. 250(241). Rights and Conditions of Membership in a Labor Organization.
Right of the Union Members
1. Deliberative and Decision-Making Right- the right to participate in deliberations
on major policy questions and decide by secret ballot.
2. Right to Information the right to be informed about:
a. The organizations constitution and by-laws
b. The collective bargaining agreement and labor laws.
3. Right over Money matters the right of the members:
a. Against imposition of excessive fees;
b. Against unauthorized collection of contributions or unauthorized
disbursements
c. To require adequate records of income and expenses;
d. To access financial records;
e. To vote on officers compensation;
f. To vote on special assessment; and
g. To be deducted a special assessment only with the members written
authorization
4. Political right the right to vote and be voted for, subject to lawful provisions on
qualifications and disqualifications
NOTE: Any violation of the above rights and conditions of membership shall be a
ground for cancellation of union registration or expulsion of an officer from office,
whichever is appropriate. Atleast 30% of all the members of the union or any
member or members specifically concerned may report such violation to the bureau.
(IRR, Labor Code)
Page 8
RATIO: Union dues are the lifeblood of the union. All unions are
authorized to collect reasonable membership fees, union dues,
assessments and fines and other contributions for labor education and
research, mutual death and hospitalization benefits, welfare fund, strike
fund and credit and cooperative undertakings.
Jurisdiction over Check-off Disputes
Being an intra-union conflict, the RD of DOLE has jurisdiction over check-
off disputes
Agency fee are dues equivalent to union dues, charged from the non-union
members who or benefited by or under the CBA
Page 9
Art. 251(242). Rights of Legitimate Labor Organizations
Rights of the Legitimate LO:
1. Undertake activities for the benefit of the organization and its members;
2. Sue and be sued;
3. Exclusive representative of all employees;
4. Represent union members;
5. Furnished by employers of audited financial statements;
6. Own properties; and
7. Exemption from taxes
Organizing in general
The rights to organize and to bargain, in general sense, are given not exclusively to
employees. Even workers who are not employees of any particular employer may form
Page 10
their organizations to protect their interest. The organization enjoys protection under
the Bill of Rights.
Consistent with the Constitutional mandate, Article 243 of the Code allows all persons
employed in commercial, industrial and agricultural enterprises to form, join or assist
labor organizations of their own choosing for purposes of collective bargaining.
The right to form, join or assist a labor organization is granted to all kinds of employees
of all kinds of employers- public or private, profit or nonprofit, commercial or religious.
Their usual form of organization is a union and the usual purpose is collective
bargaining and their employers.
Said the Supreme Court: although we have upheld the validity of the CBA
as the law among the parties, its provisions cannot override what is
expressly provided by the law that only managerial employees are
ineligible to join, assist or form any labor organization. Therefore,
regardless of the challenged employees designations, whether they are
employed as supervisors or in the confidential payrolls, if the nature of
their job does not fall under the definition of managerial as defined in
the Labor Code, they are eligible to be member of the bargaining unit and
to vote in the certification election. Their right to self-organization must be
upheld in the absence of an express provision of law to the contrary. It
cannot be curtailed by a collective bargaining agreement.
Page 11
brevity) seeks the reversal of the Order (pp. 38-40, Rollo) of Pura Ferrer-
Calleja, Director of Bureau of Labor Relations in BLR Case No. A-10-259-
86 which affirmed the Order of Med-Arbiter Antonio R. Cortez to conduct a
certification election among the rank-and-file employees of SAJELCO.
The Med-Arbiter who was assigned to the case issued an Order (pp. 24-
26, Rollo) granting the petition for direct certification election on the basis
of the pleadings filed. The Order said that while some of the members of
petitioner union are members of the cooperative, it cannot be denied that
they are also employees within the contemplation of the Labor Code and
are therefore entitled to enjoy all the benefits of employees, including the
right to self-organization (pp. 25, Rollo). This Order was appealed by
SAJELCO to the Bureau of Labor Relations.
Held:
Page 12
immediately conduct a direct certification election among the rank and file
employees of SAJELCO who are not members-consumers.
Facts:
Ernesto Callado, petitioner, was employed as a driver at the IRRI. One
day while driving an IRRI vehicle on an official trip to the NAIA and back
to the IRRI, petitioner figured in an accident.
Thereafter, petitioner filed a complaint before the Labor Arbiter for illegal
dismissal, illegal suspension and indemnity pay with moral and exemplary
damages and attorney's fees.
IRRI wrote the Labor Arbiter to inform him that the Institute enjoys
immunity from legal process by virtue of Article 3 of Presidential Decree
No. 1620, 5 and that it invokes such diplomatic immunity and privileges as
an international organization in the instant case filed by petitioner, not
having waived the same.
Page 13
The NLRC found merit in private respondent's appeal and, finding that
IRRI did not waive its immunity, ordered the aforesaid decision of the
Labor Arbiter set aside and the complaint dismissed.
The issue raised is whether the (IRRI) waive its immunity from suit in
this dispute which arose from an employer-employee relationship?
Held:
The court said Art. 3. Immunity from Legal Process. The Institute shall
enjoy immunity from any penal, civil and administrative proceedings,
except insofar as that immunity has been expressly waived by the
Director-General of the Institute or his authorized representatives.
Page 14
VICTORIANO VS. ELIZALDE UNION
Facts:
Benjamin Victoriano (Appellee), a member of the religious sect known as
the Iglesia ni Cristo, had been in the employ of the Elizalde Rope
Factory, Inc. (Company) since 1958. He was a member of the Elizalde
Rope Workers Union (Union) which had with the Company a CBA
containing a closed shop provision which reads as follows:
Membership in the Union shall be required as a condition of employment
for all permanent employees workers covered by this Agreement.
Under Sec 4(a), par 4, of RA 975, prior to its amendment by RA 3350, the
employer was not precluded from making an agreement with a labor
organization to require as a condition of employment membership therein,
if such labor organization is the representative of the employees.
On June 18, 1961, however, RA 3350 was enacted, introducing an
amendment to par 4 subsection (a) of sec 4 of RA 875, as follows: but
such agreement shall not cover members of any religious sects which
prohibit affiliation of their members in any such labor organization. Being
a member of a religious sect that prohibits the affiliation of its members
with any labor organization, Appellee presented his resignation to
appellant Union. The Union wrote a formal letter to the Company asking
the latter to separate Appellee from the service because he was resigning
from the Union as a member. The Company in turn notified Appellee and
his counsel that unless the Appellee could achieve a satisfactory
arrangement with the Union, the Company would be constrained to
dismiss him from the service.Appellee filed an action for injunction to
enjoin the Company and the Union from dismissing Appellee. The Union
invoked the union security clause of the CBA and assailed the
constitutionality of RA 3350 and contends it discriminatorily favors those
religious sects which ban their members from joining labor unions.
Issue:
Whether Appellee has the freedom of choice in joining the union or not.
Held:
The court said Yes, The Constitution and RA 875 recognize freedom of
association. Sec 1 (6) of Art III of the Constitution of 1935, as well as Sec
7 of Art IV of the Constitution of 1973, provide that the right to form
Page 15
associations or societies for purposes not contrary to law shall not be
abridged. Section 3 of RA 875 provides that employees shall have the
right to self-organization and to form, join of assist labor organizations of
their own choosing for the purpose of collective bargaining and to engage
in concerted activities for the purpose of collective bargaining and other
mutual aid or protection. What the Constitution and the Industrial Peace
Act recognize and guarantee is the right to form or join associations.
The Act does not require as a qualification, or condition, for joining any
lawful association membership in any particular religion or in any religious
sect; neither does the Act require affiliation with a religious sect that
prohibits its members from joining a labor union as a condition or
qualification for withdrawing from a labor union. Joining or withdrawing
from a labor union requires a positive act Republic Act No. 3350 only
exempts members with such religious affiliation from the coverage of
closed shop agreements. So, under this Act, a religious objector is not
required to do a positive act-to exercise the right to join or to resign from
the union. He is exempted ipso jure without need of any positive act on
his part.
Facts:
From 1984 to 1987 TUPAS was the sole and exclusive collective
bargaining representative of the workers in the Meat and Canning Division
of the Universal Robina Corporation, with a 3-year collective bargaining
agreement (CBA) which was to expire on November 15, 1987.
Page 16
On October 12, 1987, the TUPAS staged a strike. ROBINA obtained an
injunction against the strike, resulting in an agreement to return to work
and for the parties to negotiate a new CBA.
The next day, October 13, 1987, NEW ULO, claiming that it has "the
majority of the daily wage rank and file employees numbering 191," filed
a petition for a certification election at the Bureau of Labor Relations.
TUPAS moved to dismiss the petition for being defective in form and that
the members of the NEW ULO were mostly members of the Iglesia ni
Kristo sect which three (3) years previous refused to affiliate with any
labor union. It also accused the company of using the NEW ULO to defeat
TUPAS' bargaining rights.
Issue/s:
1. Whether or not Iglesia members can form a labor org which can be a
legitimate labor organization
2. Whether or not cert election barred by newly signed CBA between
TUPAS and Robina Meat factory
SC:
The right of members of the IGLESIA NI KRISTO sect not to join a labor
union for being contrary to their religious beliefs, does not bar the
members of that sect from forming their own union
The fact that TUPAS was able to negotiate a new CBA with ROBINA within
the 60-day freedom period of the existing CBA, does not foreclose the
right of the rival union, NEW ULO, to challenge TUPAS' claim to majority
status, by filing a timely petition for certification election on October 13,
1987 before TUPAS' old CBA expired on November 15, 1987 and before it
signed a new CBA with the company on December 3, 1987.
Page 17
ART. 254(244) RIGHT OF EMPLOYEES IN THE PUBLIC SERVICE
The highest law of the land guarantees to government employees the right to organize
and to negotiate, but not the right to strike.
Excepted Employees
Excepted from the application of E.O. No. 180, however, are members of the Armed
Forces of the Philippines, including police officers, policemen, firemen and jail guards.
(Sec. 4.) For reasons of security and safety, they are not allowed to unionize.
E.O. No. 180 also declares that high level employees whose functions are normally
considered as policy making or managerial, or whose duties are of a high confidential
nature shall not be eligible to join the organization of rank-and-file government
employees. A high level employee is one whose function are normally considered
policy determining, managerial or one whose duties are highly confidential in nature. A
managerial function refers to the exercise of powers such as: (1) to effectively
recommend such managerial actions; (2) to formulate or execute management policies
and decisions; (3) to hire, transfer, suspend, lay-off, recall, dismiss, assign or discipline
employees.
Managerial employees are not eligible to join, assist or form any labor organization.
Supervisory employees shall not be eligible for membership in a labor organization of
the rank-and-file employees but may join, assist or form separate 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.
Page 18
This three-tiered classification is made by R.A. No. 6715 (popularized as Herrera-Veloso
law). This law, which took effect on March 21, 1989 (15 days after its publication in the
Philippine Daily Inquirer), provides that although supervisory employees shall not be
eligible for membership in a labor organization of the rank-and-file employees, they
may, however join, assist or form separate labor organization of their own.
Facts:
Petitioner is a union of supervisory employees. It appears that on March
20, 1995 the union filed a petition for certification election on behalf of
the route managers at Pepsi-Cola Products Philippines, Inc. However, its
petition was denied by the med-arbiter and, on appeal, by the Secretary
of Labor and Employment, on the ground that the route managers are
managerial employees and, therefore, ineligible for union membership
under the first sentence of Art. 245 of the Labor Code, which provides:
Petitioner brought this suit challenging the validity of the order, dismissed.
The right of the people, including those employed in the public and
private sectors, to form unions, associations, or societies for purposes not
contrary to law shall not be abridged.
Issue/s:
(1) whether the route managers at Pepsi-Cola Products Philippines, Inc.
are managerial employees
(2) whether Art. 245, insofar as it prohibits managerial employees from
forming, joining or assisting labor unions, violates Art. III, 8 of the
Constitution.
Page 19
A distinction exists between those who have the authority to devise,
implement and control strategic and operational policies (top and middle
managers) and those whose task is simply to ensure that such policies are
carried out by the rank-and-file employees of an organization (first-level
managers/supervisors). What distinguishes them from the rank-and-file
employees is that they act in the interest of the employer in supervising
such rank-and-file employees.
#1: It appears that this question was the subject of two previous
determinations by the Secretary of Labor and Employment, in accordance
with which this case was decided by the med-arbiter.
Page 20
Metrolab vs Confessor
Facts:
The issue raised is can the executive secretaries be given the benefit of
whatever the Union avails by way of its petitions. Stated differently, can
they be members of a labor organization?
SC:
No, as they are considered confidential employees. Although Article 245 of
the Labor Code limits the ineligibility to join, form and assist any labor
organization to managerial employees, jurisprudence has extended this
prohibition to confidential employees or those who by reason of their
positions or nature of work are required to assist or act in a fiduciary
manner to managerial employees and hence, are likewise privy to
sensitive and highly confidential records.
By the very nature of their functions, they assist and act in a confidential
capacity to, or have access to confidential matters of, persons who
exercise managerial functions in the field of labor relations. As such, the
Page 21
rationale behind the ineligibility of managerial employees to form, assist or
join a labor union equally applies to them.
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 for their mutual aid and
protection, subject to the provisions of Article 264 of this Code.
Unfair labor practices violate the constitutional right of workers and employees to
self-organization, are inimical to the legitimate interests of both labor and
management, including their right to bargain collectively and otherwise deal with
each other in an atmosphere of freedom and mutual respect, disrupt industrial
Page 22
peace and hinder the promotion of healthy and stable labor-management
relations.
Consequently, unfair labor practices are not only violations of the civil rights of
both labor and management but are also criminal offenses against the State
which shall be subject to prosecution and punishment as herein provided.
Elements of ULP
1. There is employer-employee relationship between the offender and the
offended
2. The act done is expressly defined in the Code as an act of unfair labor
practice
Aspect of ULP
Unfair labor practice has civil as well as criminal aspects. The civil aspect may
include liability for damages and these may be passed upon by a labor arbiter.
Page 23
Prescription
The offense prescribes in one year under Article 305 [290].
It shall be unlawful for an employer to commit any of the following unfair labor
practice:
(a) To interfere with, restrain or coerce employees in the exercise of their right
to self-organization;
(e) To discriminate in regard to wages, hours of work and other terms and
conditions of employment in order to encourage or discourage membership in
any labor organization. Nothing in this Code or in any other law shall stop the
parties from requiring membership in a recognized collective bargaining agent as
a condition for employment, except those employees who are already members
of another union at the time of the signing of the collective bargaining
agreement. 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 250 [241], paragraph (o) of this Code shall
not apply to the non-members of the recognized collective bargaining agent;
Page 24
(h) To pay negotiation or attorneys fees to the union or its officers or agents as
part of the settlement of any issue in collective bargaining or any other dispute;
or
The provisions of the preceding paragraph notwithstanding, only the officers and
agents of corporations, associations or partnerships who have actually
participated in, authorized or ratified unfair labor practices shall be held
criminally liable.
Forced Vacation Leave. Where the vacation leave without pay, which the
employer requires employees to take in view of the economic crisis, is neither
malicious, oppressive nor vindictive, ULP is not committed.
Page 25
Nine ULP Acts of Employer
Facts: The individual petitioners, who were all officers of the Roche
Products Labor Union, wrote the company expressing the grievances of
the union and seeking a formal conference with management regarding
the previous dismissal of the unions president and vice-president. At the
meeting, the companys general manager, instead of discussing the
problems affecting the labor union and management, allegedly berated
the petitioners for writing that letter and called the letter and the person
who prepared it stupid.
Feeling that he was the one alluded to, since he prepared the letter, the
counsel For the labor union filed a case for grave slander against the
general manager. The charge was based on the affidavit executed by the
petitioners. The company and the manager, in turn, filed a complaint for
perjury against the petitioners alleging that their affidavit contained false
statements.
In Republic Savings Bank vs. CIR, where the dismissed employees had
written a letter decried by the Bank as patently libellous for alleging
immorality, nepotism and favouritism on the part of the Bank president,
thus amounting to behavior necessitating their dismissal, the Court
declared the dismissal illegal as the letter was a concerted activity
protected by R.A. No. 875.
Where, as in the case, the letter written by and for the union addressed to
management referred to employee grievances and/or labor-management
issues and the employees concerned were all officers of the union, then
seeking a renegotiation of the collective bargaining agreement, a fact
which respondent company does not deny, there should, all the more, be
Page 26
a recognition of such a letter as an act for the mutual aid, protection and
benefit of the employees concerned. This recognition, in turn, should
extend to the petitioners execution of an affidavit in support of the charge
of slander against private respondent, for calling unions lawyer, who
prepared the letter, and the contents thereof stupid.
Page 27
above-detailed activities are unfair labor practices because they tend to
undermine the concerted activity of the employees, an activity to which they
are entitled free from the employer's molestation.
Page 28
ARTICLE 259(248): UNFAIR LABOR PRACTICES OF EMPLOYERS
Contracting out means to contract out services or functions being performed by union
members when such will interfere with, restrain or coerce employees in the exercise of
their right to self-organization (Shell Oil Workers Union v. Shell Ltd, May 31,
1971).
Runaway shop is an unfair labor practice of management, which usually takes place by
affecting the transfer of ownership, the plant itself, or its equipment, or by temporary
closing its business purposely to bust the union or evade the payment of legitimate
obligations.
Company unionism is considered ULP because the officers will be beholden to the
employers and they will not look after the interest of whom they represent.
Valid discrimination
Union Security clause is term applied to any form of agreement, which imposes upon
employees the obligation to acquire or retain union membership at the expense of their
employment if they fail to do so. The objective is to assure continued existence of the
union through enforced membership. In a sense, there is discrimination when certain
employees are obliged to join a particular union. But it is discrimination favoring
unionism; it is a valid kind of discrimination.
Page 29
Kinds of union security agreements:
1. Closed-shop agreement. The company can hire only union members and
they must remain as union members to retain employment in the company.
Exceptions:
a. Employees belonging to any religious sects who prohibit affiliation of their
members with any labor organization are not covered by such agreement.
The free exercise of religious belief is superior to contract rights.
b. Members of the rival union are not covered by such arrangement.
c. Confidential employees excluded from rank and file bargaining unit
d. Employees excluded by express term of the agreement.
Paid negotiation means to pay negotiation or attorneys fees to the union or its officers
or agents as part of the settlement of any issue in collective bargaining or any other
disputes.
Violation of CBA must be gross, flagrant and/or malicious refusal to comply with the
economic provision of the CBA. The grossly violate phrase is an amendment by R.A.
No. 6715. Hence, if the violation is not gross, it is not ULP but a grievance issue under
CBA.
Page 30
cases involving unfair labor practices. They shall resolve such cases within thirty
(30) calendar days from the time they are submitted for decision.
2. Should differences arise on the basis of such notice and reply, either party
may request for a conference which shall begin not later than ten (10)
calendar days from the date of request.
3. If the dispute is not settled, the Board shall intervene upon request of either
or both parties or at its own initiative and immediately call the parties to
conciliation meetings. The Board shall have the power to issue subpoenas
requiring the attendance of the parties to such meetings. It shall be the duty
Page 31
of the parties to participate fully and promptly in the conciliation meetings
the Board may call;
4. During the conciliation proceedings in the Board, the parties are prohibited
from doing any act which may disrupt or impede the early settlement of the
disputes; and
5. The Board shall exert all efforts to settle disputes amicably and encourage
the parties to submit their case to a voluntary arbitrator. (As amended by
Section 20, Republic Act No. 6715, March 21, 1989)
Page 32
COLLECTIVE BARGAINING AGREEMENT
The performance of a mutual obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating an agreement with respect to
wages, hours of work and all other terms and conditions of employment including
proposals for adjusting any grievances or questions arising under such agreement and
executing a contract incorporating such agreements if requested by either party, but
such duty does not compel any party to agree to a proposal or to make any concession.
Page 33
LIMITATIONS:
1. The duty to bargain collectively does not compel any party to:
a. agree to a proposal; or
b. make a concession.
No room for Take it or Leave it posture.
2. the parties cannot stipulate terms and conditions of employment which are below
the minimum requirements prescribed by law
Collective bargaining does not end with the execution of the agreement. It is a
continuous process. The duty to bargain imposes on the parties during the term of their
agreement the mutual obligation to meet and confer promptly and expeditiously and in
good faith for the purpose of adjusting any grievances or question arising under such
agreement.
Page 34
ACTS NOT DEEMED REFUSAL TO BARGAIN:
1. Adoption of an adamant bargaining position in good faith
2. Refusal to bargain over demands for commission of ULP
3. Refusal to bargain during period of illegal strike
4. There is no request for bargaining
5. Union seeks recognition for an inappropriately large unit
6. Union seeks to represent some persons who are excluded from the Code
7. The rank-and-file unit includes supervisors or inappropriate otherwise
8. The demand for recognition and bargaining is made within the year following a
certification election in which the clear choice was no union and no ad interim
significant change has taken place in the unit
9. The union makes unlawful bargaining demands
NON-REPLY TO PROPOSAL
Kiok Loy v. NLRC 141 SCRA 179 (1986)
The case at bar is not a case of first impression, for in the Herald Delivery
Carriers Union (PAFLU) vs. Herald Publications the rule had been laid
down that "unfair labor practice is committed when it is shown that the
respondent employer, after having been served with a written bargaining
proposal by the petitioning Union, did not even bother to submit an
answer or reply to the said proposal This doctrine was reiterated anew
in Bradman vs. Court of Industrial Relations wherein it was further ruled
that "while the law does not compel the parties to reach an agreement, it
does contemplate that both parties will approach the negotiation with an
open mind and make a reasonable effort to reach a common ground of
agreement
Page 35
reply to the latter's successive letters, all geared towards bringing the
Company to the bargaining table. It did not even bother to furnish or
serve the Union with its counter proposal despite persistent requests
made therefore. Certainly, the moves and overall behavior of petitioner-
company were in total derogation of the policy enshrined in the New
Labor Code which is aimed towards expediting settlement of economic
disputes. Hence, this Court is not prepared to affix its imprimatur to such
an illegal scheme and dubious maneuvers.
Page 36
impasse does not automatically establish bad faith. Neither can bad faith be inferred
from a partys insistence on the inclusion of a particular substantive provision unless it
concerns trivial manners or is obviously intolerable.
Bargaining to the point of deadlock may or may not amount to bargaining in bad
faith depending whether the insistence refers to a mandatory or a non-mandatory
subject.
Mandatory subject - Either party may bargain to an impasse as long as
he bargains in good faith.
Non-mandatory subject - a party may not insist in bargaining to the
point of impasse. His instance may be construed as evasion of duty to
bargain.
Boulwarism - Bargaining technique where a proposal is offered on a "take it or
leave it" basis. (NLRB v. General Electric Co. US Court of Appeals, 418 F.2d 736, 1970)
Ratification; Mandatory Requirements The Implementing Rules require
the posting of the CBA in two conspicuous locations for five days. The proper ratifying
group is not just the majority union but the majority of all the workers in the bargaining
unit represented in the negotiation. Non-compliance of the requirements will render the
CBA ineffective (ATU v. Trajano, GR No. L-75321, June 20, 1988)
Ratification; Not Needed Ratification is not needed when the CBA is a
product of an arbitral awards by appropriate government authority or by a voluntary
arbitrator. Arbitral awards may result from voluntary arbitration under Art. 262, or from
the secretarys assumption of jurisdiction or certification of the dispute to the NLRC,
under Art. 263(g).
Posting in two conspicuous locations for five days is still required, for the
information of the employees affected.
Page 37
This is so because the law makes it a duty of the parties to keep the status quo and to
continue in full effect the terms and conditions of the existing agreement until a new
agreement is reached by the parties. (Art. 253, LC). (2008 Bar Question)
Page 38
REASON: injunction contradicts the constitutional preference for voluntary modes of
dispute settlement
Page 39
Adequate Remedy one of that affords relief with reference to the
matter in controversy and which is appropriate to the particular
circumstances of the case. If the remedy is specifically provided by
law, it is presumed to be adequate (PAL v. NLRC, GR No. 120567,
March 20, 1998)
No court or entity shall enjoin any picketing, strike or lockout except as provided in
Articles 218 and 263 of the Labor Code, as amended. The National Labor Relations
Commission proper shall have the power to issue temporary injunctions but only after
due notice and hearing and in accordance with its rules. It may also issue restraining
orders to appropriate cases subject as a general rule to the requirements of due notice
and hearing.
Petitions for injunctions or restraining orders shall be handled or resolved with extreme
care and caution. All efforts to conciliate or settle amicably the issues in the main
dispute and those involved in petitions for injunctions shall be exhausted. Injunction
and restraining orders therefore may be issued only in case of extreme necessity based
Page 40
on legal grounds clearly established, after due consultations or hearing and when all
efforts at conciliation are exhausted.
Injunction orders shall be enforced only to the extent necessary to correct violations of
law and shall not prevent the workers exercising the right to peaceful picketing. The
right to ingress or egress may be exercised only for lawful purposes as may be
indicated in the injunctive orders or in line with established jurisprudence.
Injunction orders issued under Article 218 and 263 of the Labor Code, as amended shall
be served and enforced by appropriate officials or employees of the National Labor
Relations Commission or by such officials or employees of the Department of Labor and
Employment who may be designated by the labor secretary.
The assistance of other civilian authorities like national, local or city officials may be
sought, if necessary. Only under extreme circumstances shall the assistance of the
PC/INP be enlisted and in such cases, the police authorities shall only serve on a
supportive capacity to labor department officials or employees. All efforts must be
exerted in all cases to bring about a voluntary and peaceful compliance with injunctive
orders. PC/INP representatives shall be guided by duly promulgated guidelines.
Page 41
It claimed that it is a completely different corporation from RFM with a
different set of officers and employees; and there was no employer-
employee relation between the striking employees and respondent; and
that due to the picket lines formed by the striking unions the employees
of herein respondent could not enter and leave its premises thereby
causing the same to stop its operation which constitute an invasion of its
property rights and therefore causing irreparable and substantial
damages.
Petitioners, Republic Flour Mills Workers Association and PAFLU, filed a
motion to dismiss, arguing that the injunction prayed for by herein
respondent is a labor injunction and because the petition for injunction
failed to allege the jurisdictional requisites provided for in Section 9 (b) of
Republic Act 875 it is fatally defective and, therefore, should be dismissed.
The respondent Judge found that AIA Feed Mills, Inc. is a distinct and
separate entity from the RFM., that it has a distinct personnel of its own,
that it was engaged in a different business, and that petitioner unions
picketing had no connection whatsoever with herein respondent. Based on
said findings, the respondent Judge issued the writ of preliminary
injunction.
Issue:
Whether or not the respondent Judge Reyes had jurisdiction to issue the
writ of preliminary injunction in question.
Held:
No. There is no labor dispute between the petitioners and respondent AIA
Feed Mills, Inc., and neither is there an employer-employee relation
between them.
The Court declared that the writ of preliminary injunction issued by the
respondent Judge is not a labor injunction that is provided for in Section
9, paragraph (d) of Republic Act 875. The court may issue an injunction,
whether temporary or permanent, as provided in said section of Republic
Act 875, only in a case involving or growing out of a labor dispute.
No labor dispute existed between the petitioner unions and the
respondent AIA Feed Mills, Inc. The preliminary injunction issued by the
respondent Judge was, therefore, one that was within its jurisdiction to
issue pursuant to the provisions of Rule 60 of the Rules of Court (now
Rule 58 of the Revised Rules of Court.)
Page 42
The writ of preliminary injunction issued by the respondent Judge did not
in any way curtail the right of petitioner unions to picket, because the writ
simply and clearly ordered and commanded the petitioner unions to
desist from preventing AIA Feed Mills; employees from entering its
premises.
The writ did not prevent petitioner unions from picketing against their
employer, the Republic Flour Mills, Inc. The record shows that the
respondent Judge issued the writ of preliminary injunction after a hearing.
The respondent Judge, therefore, had not acted in a manner that was in
violation of the law or with grave abuse of discretion when he issued the
writ of preliminary injunction in question.
PAL v. NLRC
August 13, 1993
Facts:
PAL completely revised its 1966 Code of Discipline. The Code was
circulated among the employees and was immediately implemented, and
some employees were forthwith subjected to the disciplinary measures
embodied therein. The Philippine Airlines Employees Association (PALEA)
Page 43
filed a complaint before the National Labor Relations Commission (NLRC).
PALEA contended that PAL, by its unilateral implementation of the Code,
was guilty of unfair labor practice, specifically Paragraphs E and G of
Article 249 and Article 253 of the Labor Code. PALEA alleged that copies
of the Code had been circulated in limited numbers; that being penal in
nature the Code must conform to the requirements of sufficient
publication, and that the Code was arbitrary, oppressive, and prejudicial to
the rights of the employees. It prayed that implementation of the Code be
held in abeyance; that PAL should discuss the substance of the Code with
PALEA; that employees dismissed under the Code be reinstated and their
cases subjected to further hearing; and that PAL be declared guilty of
unfair labor practice and be ordered to pay damages PAL asserted its
prerogative as an employer to prescribe rules and regulations regarding
employees' conduct in carrying out their duties and functions, and alleging
that by implementing the Code, it had not violated the collective
bargaining agreement (CBA) or any provision of the Labor Code. Assailing
the complaint as unsupported by evidence, PAL maintained that Article
253 of the Labor Code cited by PALEA referred to the requirements for
negotiating a CBA which was inapplicable as indeed the current CBA had
been negotiated
Issue:
Whether or not the formulation of a Code of Discipline among employees
is a shared responsibility of the employer and the employees.
Held:
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.
Page 44
INDIVIDUAL GRIEVANCE
Individual grievance can be about concerns an employee may have relating to their
specific terms and conditions of employment, working conditions and or practices.
Any employee who has a complaint arising out of his or her employment should seek to
have that complaint addressed by using the appropriate university's procedure for his or
her staff group.
It is expected that the majority of such complaints will not develop into formal
grievances but will be dealt with and satisfactorily resolved through informal discussion,
as described below.
However, whenever the formal procedures are used, the employee has a right to have
his or her complaint carefully and impartially considered and to receive, after
appropriate consideration and discussion, a final response which will either:
Where two or more employees within the same department have identical complaints
about a particular situation, their complaints should be dealt with simultaneously by
means of the individual grievance procedure described below. This procedure is not
available where employees have a grievance affecting more than one department. In
these circumstances collective grievances that cannot be resolved by informal
discussion may be raised under the procedure for resolving differences.
Page 45
APPROPRIATENESS OF BU; FACTORS CONSIDERED
- an effort to inject a public policy component into the initial shaping of the collective
bargaining structure, so as to encourage the practice and procedure of collective
bargaining and enhance the likelihood of a more viable and harmonious collective
bargaining relationship
It has been consistently held valid and appropriate that the bargaining unit may consist
of all rank-and-file employees in the company, regardless of the difference in their
positions and other considerations. (Laguna College vs. CIR, et al., 25 SCRA 167)
THE GLOBE DOCTRINE this principle is based on the will of the employees. This
rule was first enunciated in the United States case of Globe Machine and Stamping Co.,
where it was ruled that in defining appropriate bargaining unit, the determining factor is
the desire of the workers themselves, through referendum, plebiscites, certification
election, etc.
EXCEPTION:
- Supervisory employees who are allowed to form their own unions apart from the
rank-and-file employees
- The policy should yield to the right of employees to form unions for purposes not
contrary to law, self-organization and to enter into collective bargaining negotiations.
Two companies cannot be treated into a single bargaining unit even if their
businesses are related.
Page 46
SUBSIDIARIES AND SPUN-OFF CORPORATIONS
ISSUES:
1. Whether or not the duration of the renegotiated terms of the CBA is
three yrs. or two; and
2. Whether or not the bargaining unit of the SMC includes also employees
of Magnolia and SMFI. Pertinent to the first issue is Art. 253-A of the LC,
as amended. The Supreme Court quoting a book, defines the two classes
Page 47
of CBA provisions. The representation aspect refers to the identity and
majority status of the union and the negotiated CBA as the exclusive
bargaining representative of the appropriate bargaining unit concerned.
All other provisions simply refers to the rest of the CBA, economic as well
non-economic provisions, other than representational. Then the court
explains the three and five yr. term.
HELD:
1. The framers of the law wanted to maintain industrial peace and
stability having both the management and the labor work
harmoniously together without any disturbance. Thus no outside union
can enter the establishment within 5 years and challenge the status of
the incumbent union as the exclusive bargaining agent. Likewise, the
terms and conditions of employment (economic and non-economic)
cannot be questioned by the employers and employees during the
period of the effectivity of the CBA. The CBA is in contract between the
parties and the parties must respect the terms and conditions of the
agreement. Notably, the framers of the law did not give the fixed
terms and conditions of employment. It can be gleaned from their
discussions that it was left to the parties to fix the period. The issue as
to the non-representation provisions of the CBA need not be labored
especially when we take note of the Memorandum of the Sec. of Labor
dated Feb 24, 1994. In the said memorandum, the Sec of Labor had
the occasion to clarify the term of the renegotiated terms of the CBA
vis- -vis the term of the bargaining agent, to wit: As a matter of
policy the parties are encouraged to enter into a renegotiated CBA
with a term which would coincide with the aforesaid 5 yrs. term of the
bargaining representative. In the event however that the parties, by
mutual agreement, enter into a renegotiated contract with the term of
3 yrs. or one which does not coincide with the said 5 yr term, and the
said agreement is ratified by the said majority members in the
bargaining unit, the subject contract is valid and legal and therefore,
binds the contracting parties. The same will however not adversely
affect the right of another union to challenge the majority status of the
incumbent bargaining agent within 60 days before the lapse of the
original 5 yrs. term of the CBA. Thus, we do not find grave abuse of
discretion on the part of the Sec of Labor in the ruling that the
effectivity of the renegotiated terms of the CBA shall be for 3 years.
Page 48
employees of Magnolia and SMFI in the SMC bargaining unit so as to
have a bigger mass base of employees has, therefore, no more valid
ground. Moreover, in determining an appropriate bargaining unit, the
test of grouping is mutuality or commonality of interests. The
employees sought to be represented by the collective bargaining agent
must have substantial mutual interests in terms of employment and
working conditions evidenced by the type of work they performed.
Considering the spin-offs, the companies would consequently have
their respective and distinctive concerns in terms of nature of work,
wages, hours of work and other conditions of employment. Interests of
employees in different companies perforce differ. SMC is engaged in
the business of beer manufacturing. Magnolia is involved in the
manufacturing and processing products while the SMFI is involved in
the production of feeds and processing of chicken. The nature of their
products and scale of their business may require different
compensation packages. The different companies may have different
volumes of work and different working conditions. For such reason, the
employees of the different companies see the need to group
themselves together to organize themselves into distinct and organize
groups. It would then be best to have separate bargaining units for
different companies where employees can bargain separately
according to their needs and according to their own working
conditions.
SUMMATION OF SIGNIFICANCE
To employees:
- Collective bargaining develops a sense of self-respect and responsibility among the
employees.
- It increases the strength of the workforce, thereby, increasing their bargaining
capacity as a group.
- Collective bargaining increases the morale and productivity of employees.
- It restricts managements freedom for arbitrary action against the employees.
Moreover, unilateral actions by the employer are also discouraged.
- Effective collective bargaining machinery strengthens the trade unions movement.
- The workers feel motivated as they can approach the management on various matters
and bargain for higher benefits.
Page 49
- It helps in securing a prompt and fair settlement of grievances. It provides a flexible
means for the adjustment of wages and employment conditions to economic and
technological changes in the industry, as a result of which the chances for conflicts are
reduced.
To employers:
- It becomes easier for the management to resolve issues at the bargaining level rather
than taking up complaints of individual workers.
- Collective bargaining tends to promote a sense of job security among employees and
thereby tends to reduce the cost of labor turnover to management.
- Collective bargaining opens up the channel of communication between the workers
and the management and increases worker participation in decision making.
- Collective bargaining plays a vital role in settling and preventing industrial disputes.
To Society:
- Collective bargaining leads to industrial peace in the country
- It results in establishment of a harmonious industrial climate which supports which
helps the pace of a nations efforts towards economic and social development since the
obstacles to such a development can be reduced considerably.
- The discrimination and exploitation of workers is constantly being checked.
- It provides a method or the regulation of the conditions of employment of those who
are directly concerned about them.
Page 50
CERTIFICATION ELECTION the process of determining by secret ballot the sole
and exclusive bargaining agent of the employees in an appropriate bargaining unit, for
purposes of collective bargaining
Voluntary Recognition
the process whereby the employer recognizes a labor organization as the
exclusive bargaining representative of the employees in the appropriate
Page 51
bargaining unit after a showing that the labor organization is supported by at
least a majority of the employees in the bargaining unit.
Page 52
Who can Vote in the C. E.
The petition must be supported by the written consent of at least 25% of all the
employees in the appropriate bargaining unit.
Consent Election
to determine the issue of majority representation of all the workers in the appropriate
collective bargaining unit mainly for the purpose of determining the administrator of the
CBA when the contracting union suffered massive disaffiliation but not for the purpose
of determining the bargaining agent for purposes of collective bargaining.
Page 53
certified exclusive bargaining agent of all rank-and-file employees did not,
for more than four (4) years, take any action to legally compel the
employer to comply with its duty to bargain collectively, hence, no CBA
was executed; nor did it file any unfair labor practice suit against the
employer or initiate a strike against the latter. Under the circumstances, a
certification election may be validly held.
Page 54
against a transferee of an enterprise, labor contracts being in personam, thus
binding only between the parties. A labor contract merely creates an action in
personam and does not create any real right which should be respected by third
parties. This conclusion draws its force from the right of an employer to select
his employees and to decide when to engage them as protected under our
Constitution, and the same can only be restricted by law through the exercise of
the police power.
Wiley Doctrine
States that, a duty to arbitrate arising from a collective bargaining agreement
survives the employers ceasing to do business as a separate entity after its merger
with a substantially large corporation, so as to be binding on the larger corporation,
where relevant similarity and continuity of operations across the change in
ownership is evidenced by the wholesale transfer of smaller corporations
employees to the larger corporations plant.
Page 55
Distinguish from Mediation
Arbitrator Mediator
A person accredited by the Board as A disinterested party, usually a
such or a person named or government employee who helps in
designated in the CBA by the parties settling disputes involving terms and
to act as their Voluntary Arbitrator or conditions of a CBA and is not
one chosen with or without the assigned and paid by the State.
assistance of the NCMB, pursuant to
a selection procedure agreed upon in
the CBA, or any official authorized by
the Sec. Of Labor to act as Voluntary
Arbitrator upon written request and
agreement of parties to a labor
dispute.
Nature of Proceedings
Informal proceedings; Arbitrator A mediator renders no final and
determines what is admissible as binding decision and merely suggests
evidence. solutions. He usually suggests that
parties submit the issue to an
arbitrator.
Precedent
Arbitrators are not obliged to follow
precedents set by other arbitration in
similar cases.
Appeal
Appeal is to the CA under Rule 43 of
the Rules of Court.
Page 56
Government employees may form labor unions but are not allowed to strike.
Only legitimate labor organizations are given the right to strike.
Ununionized workers may hold a protest action but not a strike
Not all concerted activities are strikes; they may only be protest actions. And
they do not necessarily cause work stoppage by the protesters. A strike, in
contrast, is always a group action accompanied by work stoppage.
ECONOMIC STRIKE
A voluntary strike because the employee will declare a strike to compel
management to grant its demands.
It is initiated by the collective bargaining agent of the appropriate bargaining unit
can declare an economic strike.
It has a cooling off period of 30 days from the filing of the notice of strike
before the intended date of actual strike subject to the 7-day strike ban and such
is mandatory without exception.
Notice of strike and strike vote maybe dispensed with and they may strike
immediately.
Employees are not entitled to Strike Duration Pay in case of legal strike based on
the principle that a fair days wage accrues only for a fair days labor.
As an exception, the cooling off period may be dispensed with and the union
may take immediate action in case of dismissal from employment of their
officers duly elected in accordance with the unions Constitution and by-laws,
which may constitute union busting where the existence of the union is
threatened. HOWEVER, it must still observe the mandatory 7-day period before
it can stage a valid strike.
Page 57
The employees may be awarded the Strike Duration Pay in case of legal strike,
which is paid in the discretion of the authority deciding the case.
Facts:
Immediately after holding an election, which Inhelder Laboratories Inc.
and Sister Companies Employees Union obtained the requisites majority,
the Union submitted to the Management of respondent corporations a set
of demands for a collective bargaining agreement. This led to negotiations
and lasted for several weeks. As an agreement was reached on some
points, the same were incorporated into a draft of agreement, which, in
turn, became the basis for, or was followed by, further negotiations. As
additional points of agreement were reached, another draft of agreement
was prepared.
In a meeting held before said Conciliation Division, another such draft was
drawn, to which the Management refers as "final draft". However,
petitioners' representatives pressed for the inclusion, in the agreement, of
a union clause, an accumulated sick leave clause, and an accumulated
vacation leave clause, apart from the increase of the high cost of living
monthly allowance from P20.00 to P30.00, the creation of a grievance
committee and a general salary increase.
Petitioners filed a 30-day notice of strike upon the ground that respondent
corporations had been bargaining in bad faith. On the other hand, the
Management of respondent corporations filed unfair labor practice against
petitioner Union on the ground of alleged refusal to bargain. Meanwhile,
the Management of respondent corporations suspended, transferred
Page 58
and/or demoted union members. Hence, before the expiration of the 30-
day period, petitioners declared a strike.
At this juncture, two (2) unfair labor practice cases commenced in the
Court of Industrial Relation where one was filed by the Management of
Inhelder Laboratories, Inc. and its sister companies (Inhelder, Inc. and
San Roque Trading Corporation) against the Labor Union of employees
thereof and some officers and members of the Union, and the other by
the latter against the former. Being interrelated, the two cases were
jointly heard.
On the other hand, petitioner Union and its members contend that the
strike was provoked by alleged unfair labor practices on the part of the
respondents and that petitioners had acted in good faith in staging said
strike.
Hence, this appeal by certiorari taken by the Union and its members
adversely affected by the said resolution.
Ruling:
Although the Management may have had the strict legal right to take
against union members the disciplinary and other administrative measures
above referred to, there is no denying the fact that the time chosen by
the Management therefore, when considered in relation with the attending
circumstances, reasonably justified the belief of the Union that the real or
main purpose of the Management was to discourage membership in the
Union, to discredit the officers thereof, to weaken the Union and to induce
Page 59
or compel the same to sign the draft of agreement Exhibit D as amended,
on May 29 and 30 or 31, 1963. As stated in the decision of His Honor, the
trial Judge, said belief was confirmed by the fact that prosecutors of the
Court of Industrial Relations found sufficient grounds to file and did file,
against the Management, a complaint for unfair labor practices.
1. Statutory Prohibition
Employees in the public service are prohibited to engage in strikes. While
they may enjoy the right to organize as recognized under the Constitution, they
are prohibited from staging strikes, demonstrations, mass leaves, walkouts and
other forms of mass action which will result in temporary stoppage or disruption
of public service. Their remedy is to refer the dispute to the Public Sector Labor-
Management Council.
Page 60
3. Compliance with Procedural Requirements of the Law
3.1. Notice of Strike
No labor organization shall declare a strike without first having
filed a notice of strike. A notice of strike must be filed with the National
Conciliation and Mediation Board (NCMB) of the Department of Labor
and Employment (DOLE) at least twenty-four (24) hours prior to the
taking of the strike vote by secret balloting, informing said office of the
decision to conduct a strike vote, and the date, place, and time thereof.
Page 61
NCMB-DOLE. A decision to declare a strike must be approved by a
majority of the total union membership in the bargaining unit
concerned, obtained by secret ballot in meetings or referenda called for
that purpose. This process is called strike vote balloting. The
purpose of a strike vote is to ensure that the decision to strike broadly
rests with the majority of the union members in general and not with a
mere minority. At the same time, it is meant to discourage wildcat
strikes, union bossism and even corruption. The majority decision to
stage a strike is valid for the duration of the dispute based on
substantially the same grounds considered when the strike vote was
taken.
The evident intention of the law in mandatorily requiring the
submission of the strike vote report is to reasonably regulate the right to
strike which is essential to the attainment of legitimate policy objectives
embodied in the law. Verily, mere substantial compliance with a
mandatory provision will not suffice. Strict adherence to the mandate of
the law is required. The strike vote report should be submitted to the
NCMB-DOLE at least seven (7) days before the actual staging of the
intended strike, subject to the observance of the cooling-off periods
provided under the law.
Page 62
4. Injunction
This is the remedy to enjoin an intended or impending strike or lockout, to
compel all the striking workers or locked out employees to return to work, and to
compel the employer to re-admit all workers under the same terms and
conditions prevailing before the strike or lockout. This is simply to maintain the
status quo of the situation and/or return to the normal situation.
5. Agreement of parties
A no-strike prohibition in a CBA is applicable only to economic strikes and
ULP strike is not covered wherein workers may go on strike based on ULP
despite the no-strike provision.
6. Lawful means and methods
A strike is legal when lawful means concur with lawful purpose.
MEANS EMPLOYED TEST A strike may be legal at its inception but
eventually be declared illegal if the strike is accompanied by violence which is
widespread, pervasive and adopted as a matter of policy and not merely violence
which is sporadic which normally occur in strike area.
CONVERSION DOCTRINE This doctrine involves conversion of strike from
economic to ULP and vice versa. A strike or lockout may start as an economic but
later on due to the actuations of the parties, the same may be converted to ULP or
vice versa. Under such situation, the conversion shall apply in which case the
requirements for the converted strike shall be observed.
Page 63
f) Except in cases of union-busting, the cooling-off period of 15 days, in
case of unfair labor practices of the employer, or 30 days, in case of
collective bargaining deadlock, should be fully observed; and
g) The 7-day waiting period/strike ban reckoned after the submission of
the strike vote report to the NCMB-DOLE should also be fully observed
in all cases.
All the preceding requisites, although procedural in nature, are mandatory and
failure to comply with any of them would render the strike illegal.
Facts
This is a petition for prohibition seeking to annul the decision dated
February 20, 1982 of Labor Arbiter Ethelwoldo R. Ovejera of the National
Labor Relations Commission (NLRC) with station at the Regional
Arbitration Branch No. VI-A, Bacolod City, which, among others, declared
illegal the ongoing strike of the National Federation of Sugar Workers
(NFSW) at the Central Azucarera de la Carlota (CAC), and to restrain the
implementation thereof.
NFSW has been the bargaining agent of CAC rank and file
employees and has concluded with CAC a collective bargaining
agreement effective from 1981 to 1984. Under Art. VII, Sec. 5 of the said
CBA, Bonuses: the parties also agree to maintain the present practice on
the grant of Christmas bonus, milling bonus, and amelioration bonus to
the extent as the latter is required by law.
On January 22, 1982, NFSW filed with the Ministry of Labor and
Employment (MOLE) Regional Office in Bacolod City a notice to strike
based on non-payment of the 13th month pay. Six days after, NFSW
Page 64
struck. One day after the commencement of the strike, a report of the
strike-vote was filed by NFSW with MOLE.
Issue
WON the strike declared by NFSW is illegal, wherein the resolution
of which mainly depends on the mandatory or directory character of the
cooling-off period and the 7-day strike ban after report to MOLE of the
result of a strike-vote, as prescribed in the Labor Code
Ruling
The provisions hardly leave any room for doubt that the cooling-off
period in Art. 264(c) and the 7-day strike ban after the strike-vote report
prescribed in Art. 264(f) were meant to be, and should be deemed,
mandatory.
When the law says "the labor union may strike" should the dispute
"remain unsettled until the lapse of the requisite number of days (cooling-
off period) from the filing of the notice," the unmistakable implication is
that the union may not strike before the lapse of the cooling-off period.
Similarly, the mandatory character of the 7-day strike ban after the report
on the strike-vote is manifest in the provision that "in every case," the
union shall furnish the MOLE with the results of the voting "at least seven
(7) days before the intended strike, subject to the (prescribed) cooling-off
period." It must be stressed that the requirements of cooling-off period
and 7-day strike ban must both be complied with, although the labor
Page 65
union may take a strike vote and report the same within the statutory
cooling-off period.
If only the filing of the strike notice and the strike-vote report
would be deemed mandatory, but not the waiting periods so specifically
and emphatically prescribed by law, the purposes for which the filing of
the strike notice and strike-vote report is required would not be achieved,
as when a strike is declared immediately after a strike notice is served, or
when as in the instant case the strike-vote report is filed with MOLE
after the strike had actually commenced Such interpretation of the law
ought not and cannot be countenanced. It would indeed be self-defeating
for the law to imperatively require the filing on a strike notice and strike-
vote report without at the same time making the prescribed waiting
periods mandatory.
The cooling-off period and the 7-day strike ban after the filing of a
strike- vote report, as prescribed in Art. 264 of the Labor Code, are
reasonable restrictions and their imposition is essential to attain the
legitimate policy objectives embodied in the law. We hold that they
constitute a valid exercise of the police power of the state.
NFSW strike is illegal. The NFSW declared the strike six (6) days
after filing a strike notice, i.e., before the lapse of the mandatory cooling-
off period. It also failed to file with the MOLE before launching the strike a
report on the strike-vote, when it should have filed such report "at least
seven (7) days before the intended strike." Under the circumstances, we
are perforce constrained to conclude that the strike staged by petitioner is
not in conformity with law. This conclusion makes it unnecessary for us to
determine whether the pendency of an arbitration case against CAC on
Page 66
the same issue of payment of 13th month pay has rendered illegal the
above strike under Art. 265 of the Labor Code which provides:
It shall likewise be unlawful to declare a strike or lockout after
assumption of jurisdiction by the President or the Minister, or after
certification or submission of the dispute to compulsory or voluntary
arbitration or during the pendency of cases involving the same grounds
for the strike or lockout.
General Rule: A strike grounded on ULP is illegal if no such acts actually exist.
Exception: Even if no ULP acts are committed by the Employer, if the Employees believe
in good faith that ULP acts exist so as to constitute a valid ground to strike, then the
strike held pursuant to such belief may be legal. Where the union believed that the
Employer committed ULP and the circumstances warranted such belief in good faith,
the resulting strike may be considered legal although, subsequently, such allegations of
ULP were found to be groundless. (NUWHRAINInterim Junta v. NLRC, G.R. No.
125561, Mar. 6, 1998)
Page 67
DEFIANCE OF RETURN TO WORK ORDER
Page 68
Master Iron Labor Union VS NLRC, February 17, 1993
Facts:
Page 69
regular workers thereby causing the reduction of the latters workdays;
illegal suspension of Abulencia without any investigations; discrimination
for hiring casual workers in violation of the CBA, and illegal dispersal of
the picket lines. Thereafter, Labor arbiter declared strike illegal. NLRC
affirmed. Petitioners contend that notwithstanding the non-strike provision
in the CBA, the strike they staged was legal because the reasons therefor
are non-economic in nature. They assert the NLRC abused its discretion in
holding that there was failure to exhaust the provision on grievance
procedure in view of the fact that they themselves sought grievance
meetings but the Corporation ignored such requests.
Issue: Whether or not the strike was illegal because of the no-strike
clause
Much more than an economic issue, the said practice of the Corporation
was a blatant violation of the CBA and unfair labor practice on the part
of the employer under Article 248 of the Labor Code. Although the end
result, should the Corporation be required to observe the CBA, may be
economic in nature because the workers would then e given their regular
working hours and therefore their just pay, not one of the said grounds is
an economic demand within the meaning of the law on labor strikes.
Professor Perfecto Fernandez, in his book Law on Strike, Picketing and
Lockouts, states that an economic strike involves issues relating to
demands for higher wages, higher pension or overtime rates, pensions,
profit sharing, shorter working hours, fewer work days for the same pay,
elimination of night work, lower retirement age, more healthful working
conditions, better health services, better sanitation and more safety
appliances. The demands of the petitioners, being covered by the CBA,
are definitely within the power of the Corporation to grant and therefore
the strike was not an economic strike.
The other grounds, i.e., discrimination, unreasonable suspension of union
officials and unreasonable refusal to entertain grievance, had been
ventilated before the Labor Arbiter. They are clearly unfair labor practices
as defined in the Labor Code. The subsequent withdrawal of petitioners
complaint for unfair labor practice which was granted by Labor Arbiter
Ceferine Diosana who also considered the case closed and terminated
may not, therefore, be considered as having converted their other
grievance into economic demands.
Page 70
STRIKE DURATION PAY
General Rule: Strikers are not entitled to their wages during the period of a strike,
even if the strike is legal
Reason: No work, no pay, or a fair days wage for a fair days labor.
Remedy: A worker who absents himself from work as a result of a strike, must seek
reimbursement of his wages from his union which declared the strike, or he might have
his unused vacation leaves.
Exceptions:
1. In case of a unfair labor strike, in the discretion of the authority deciding the case.
2. Where the strikers voluntarily and unconditionally offered to return, but the employer
refused to accept the offer.
Effect: They are entitled to backwages from the date the offer was made.
3. Where there is return-to-work order and the employees are discriminated.
Page 71
LOSS OF EMPLOYMENT BY REASON OF STRIKE
Exceptions:
The following strikers are not entitled to reinstatement:
1. Union officers who knowingly participate in an illegal strike; and
2. Any striker/union member who knowingly participates in the commission of illegal
acts during the strike.
Backwages in Economic strike:
General Rule: In economic strike, the strikers are not entitled to backwages on
the principle that a fair days wage accrues only for a fair days labor.
Exception: Backwages in ULP strike
Page 72
1. Involuntary strikers illegally locked-out;
2. Voluntary strikers in Unfair Labor Practice who offered to return to
work unconditionally; and
3. If there is a strike-duration pay in Collective Bargaining Agreement.
Page 73
C. COOLING OFF PERIOD
-30 days from
the filing of the
notice of strike -15 days from the filing of the notice of strike.
before the
intended date of
actual strike
subject to the 7-
day strike ban.
D. EXCEPTION TO THE COOLING-OFF PERIOD
- No - the cooling off period may be dispensed with, and the union may take
exception immediate action in case of dismissal from employment of their officers
mandatory. duly elected in accordance with the unions Constitution and By-laws,
which may constitute union busting where the existence of the
union is threatened.
- Notice of - BUT it must still observe the mandatory 7-day period before it
strike and can stage a valid strike.
strike vote
maybe
dispensed
with. They
may strike
immediately.
E. STRIKE DURATION PAY IN CASE OF A LEGAL STRIKE
- not entitled to - may be awarded the said paid in the discretion of the authority deciding
said pay based on the case.
the principle that
a fair days wage
accrues only for a
fair days labor
CHARACTERISTICS OF STRIKES:
1. There must be an established relationship between the strikers and the person/s
against whom the strike is called
2. The relationship must be one of employer and employee
Page 74
3. The existence of a dispute between the parties and the utilization by labor of the
weapon of concerted refusal to work as a means of persuading or coercing
compliance with the working mens demands
4. The contention advanced by the workers that although the work ceases, the
employment relation is deemed to continue albeit in a state of belligerent
suspension
5. There is work stoppage, which stoppage is temporary
6. The work stoppage is done through the concerted action of the employees
7. The striking group is a legitimate labor organization, and in case of bargaining
deadlock, is the employees sole bargaining representative.
a. notice of strike
b. 30/15-day cooling-off period before the intended date of actual strike
subject to the 7-day strike ban.
COOLING OFF PERIOD - that period of time given the NCMB to mediate
and conciliate the parties.
It is that span of time allotted by law for the parties to settle
theirdisputes in a peaceful manner, before staging a strike or lockout.
c. strike vote
Page 75
STRIKE VOTE - a requirement wherein the decision to declare a
strike must be:
1. approved by a MAJORITY of the total union
membership in the bargaining unit concerned [not of the
whole bargaining unit],
2. obtained by SECRET BALLOT in MEETINGS OR
REFERENDA called for the purpose.
7-DAY STRIKE BAN it is the 7 day waiting period before the date of
the purported strike [within which the union intending to conduct a strike
must at least submit a report to the Department as to the result of the
strike vote] intended to give the Department an opportunity TO VERIFY
whether the projected strike really carries the imprimatur of the majority
of the union members in addition to the cooling off period before actual
strike.
3. MEANS EMPLOYED TEST-A strike may be legal at its inception but eventually be
declared illegal if the strike is accompanied by violence which violence is
widespread, pervasive and adopted as a matter of policy and not merely violence
which is sporadic which normally occur in a strike area [see prohibited activities
under art. 264].
NOTE: The 3 tests must concur. Non-compliance with any of the aforementioned
requisites renders the strike illegal.
Page 76
TOTALITY DOCTRINE - the culpability of an employers remarks are to be
evaluated not only on the basis of their implicit implications but are to be appraised
against the background of and in conjunction with collateral circumstances.
Under this doctrine expressions of opinion by an employer which, though
innocent in themselves, frequently were held to be culpable because:
A motion for reconsideration does not suspend the effects as the assumption
order is immediately executory.
Page 77
ISSUES THAT THE SECRETARY OF LABOR CAN RESOLVE WHEN HE
ASSUMES JURISDICTION OVER A LABOR DISPUTE:
a. Only issues submitted to the Secretary may be resolved by him. (PAL vs.
Sec. of Labor, 23 January 1991).b
b. Issues submitted to the Secretary for resolution and such issues involved
in the labor dispute itself. (St. Scholasticas College vs. Torres; 29 June
1992)
c. Secretary of Labor may subsume pending labor cases before Labor
Arbiters which are involved in the dispute and decide even issues falling
under the exclusive and original jurisdiction of labor arbiters such as the
declaration of legality or illegality of strike. (Intl Pharmaceuticals vs. Sec
of Labor; 09 January 1992).
d. Power of Sec. of Labor is plenary and discretionary. (St. Lukes Medical
Center vs. Torres; 29 June 1993; reiterated in PAL vs. Confesor; 10 March
1994).
GENERAL RULE: Strikers are not entitled to their wages during the period of a
strike, even if the strike is legal.
EXCEPTIONS:
1. In case of a ULP STRIKE, in the discretion of the authority deciding the case
[see table for more distinction bet. Economic and ULP strike]
They are entitled to backwages from the date the offer was made
Page 78
- They are entitled to backwages from the date of discrimination.
LABOR ORGANIZATIONS
1. No labor 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 Art. 263 or
without the necessary strike or lockout vote first having been obtained and
reported to the Department.
Page 79
NO strike or lockout shall be declared:
a. AFTER assumption of jurisdiction by the President or the Secretary or
b. AFTER certification or submission of the dispute to compulsory or voluntary
arbitration or
c. DURING the pendency of cases involving the same grounds for the strike or
lockout.
THIRD PERSONS
NO person [3rd persons] all obstruct, impede or interfere with by force, violence,
coercion, threats or intimidation
any peaceful picketing by employees
during any labor controversy or in the exercise of the right of self-
organization or collective bargaining or
shall aid or abet such obstruction or interference.
EMPLOYERS
NO employer shall use or employ any STRIKE-BREAKER nor shall any person be
employed as a strikebreaker
shall bring in, introduce or escort in any manner, any individual who seeks
to replace strikes in entering or leaving the premises of a strike area, or work
in place of the strikers.
The police force shall keep out of the picket lines unless actual violence or
other criminal acts occur therein:
Provided, That nothing herein shall be interpreted to prevent any public officers
from taking any measure necessary to:
a. maintain peace and order,
b. protect life and property, and/or
c. enforce the law and legal order.
Page 80
PERSONS ENGAGED IN PICKETING
NO person engaged in PICKETING shall:
a. commit any act of violence, coercion or intimidation or
b. obstruct the free ingress to or egress from the employers premises for lawful
purposes ,or
c. obstruct public thoroughfares
ISSUE: Does the court have the power to enjoin the picket, despite being
peaceful?
HELD: Yes. The courts are vested with the power to limit the exercise of
the right of peaceful picketing to parties involved in the labor dispute, or
having a direct interest to the context of this issue. Wellington is a mere
"innocent bystander" who is not involved in the labor dispute. Thus, they
are entitled to seek protection of their rights from the courts and the
courts may, accordingly, legally extend the same.
Page 81
majority of the board of directors or trustees or the partners holding the controlling
interest in the partnership, vote to accept the reduced offer, the workers shall
immediately return to work and the employer shall thereupon readmit them upon
signing of the agreement.
AS TO PURPOSE
AS TO PERIOD OF FILING
On or before the 30th day of the STRIKE On or before the 30th day of the LOCKOUT
GENERAL RULE: A police officer cannot arrest or detain a union member for union
activities without previous consultations with the Secretary of Labor.
Page 82
ART. 284 (269) PROHIBITIONS AGAINST ALIENS; EXCEPTIONS
EXCEPTIONS: Aliens who: (a) work in the country with valid permits issued by
the DOLE; and (b) are nationals of a country which grants the same or similar
rights to Filipino workers.
Tripartism is the representation of the three sectors the public or the government,
the employers and the workers in policy-making bodies of the government.
1. Such kind representation in the policy-making bodies of private
enterprises is not ordained, not even by the Philippine Constitution and does
not men representation in the corporate board.
2. What is provided is workers participation in policy and decision-making
process directly affecting their rights, benefits and welfare.
Page 83
Tripartism is observed in the following government agencies:
1. NLRC;
2. National Wages and Productivity Commission;
3. Employees Compensation Commission;
4. POEA Governing Board;
5. Philippine Health Insurance Corporation;
6. Social Security Commission; and
7. GSIS Board of Trustees
Note: This amendment created the National Tripartite Industrial Peace Council
The last part of Article 292(b)is different from the assumption or certification powers of
the Secretary of Labor provided for under Article 278(g) in that the former needs a
hearing first before the Secretary of Labor may suspend the effects of the termination
pending resolution of the dispute.
Managerial employees also enjoy security of tenure. The principle of security of tenure
applies not only to rank-and-file employees but also to managerial employees. (PLDT
vs. Tolentino, G. R. No. 143171, Sept. 21, 2004).
Page 84
The fact that one is a managerial employee does not by itself exclude him from the
protection of the constitutional guarantee of security of tenure. ( Fujitsu Computer
Products Corporation of the Philippines vs. CA, G. R. No. 158232, April 8, 2005;
Maglutac vs. NLRC, 189 SCRA 767 [1990]).
Management Rights
Our laws recognize and respect the exercise by management of certain rights and
prerogatives. For this reason, courts often decline to interfere in legitimate business
decisions of employers. In fact, labor laws discourage interference in employers
judgment concerning the conduct of their business. (Philippine Industrial Security
Agency Corporation vs. Aguinaldo, G. R. No. 149974, June 15, 2005; Mendoza vs. Rural
Bank of Lucban, G.R. No. 155421, July 7, 2004).
An employer can regulate, generally without restraint, according to its own discretion
and judgment, every aspect of its business. (Deles, Jr. vs. NLRC, G. R. No. 121348,
March 9, 2000).
This privilege is inherent in the right of employers to control and manage their
enterprise effectively. (Mendoza vs. Rural Bank of Lucban, G.R. No. 155421, 07 July
2004).
Page 85
such nature which may be considered calculated to undermine or injure such
interest or which would make the worker incapable of performing his work.
Sexual harassment - Republic Act No. 7877, approved on February 14, 1995,
otherwise known as the Anti-Sexual Harassment Act of 1995 declares
sexual harassment unlawful in the employment, education or training
environment.
Elements
Gold City Integrated Port Services, Inc. v. NLRC, G.R. No. 86000, 21
September 1990
Facts:
Private respondent Jose Balcaso figured in a fist fight inside their immediate
superiors office despite being told to stop provoking his co-employee and
that he should behave properly. Consequently, private respondent was
terminated from service for alleged inability of Balcaso to get along with his
co-employees and with the companys customers. Balcaso then filed a
complaint for illegal dismissal and contented that there was no evidence he
had willfully disobeyed any order given by his superior during the incident.
Issue:
Whether the act of Balcaso may be considered just cause for his termination
from service.
Held:
The High Court held that private respondents act constituted willful
disobedience to a lawful order of petitioners representative which was
obviously connected with private respondents work. The Court explained that
Page 86
willful disobedience of the employers lawful orders, as a just cause for
dismissal of an employee, envisages the concurrence of at least two
requisites:
a. the employees assailed conduct must have been willful or intentional, the
willfulness being characterized by a wrongful and perverse attitude; and
b. the order violated must have been reasonable, lawful, made known to the
employee and must pertain to the duties which he had been engaged to
discharge.
Transfer when valid - The Supreme Court has recognized and upheld the
prerogative of management to transfer an employee from one office to
another within the business establishment, provided there is no demotion in
rank or diminution of salary, benefits, and other privileges; and the action is
not motivated by discrimination, made in bad faith, or effected as a form of
punishment or demotion without sufficient cause. This is a privilege inherent
in the employers right to control and manage its enterprise effectively.
(Mendoza vs. Rural Bank of Lucban, G. R. No. 155421, July 7, 2004; Benguet
Electric Cooperative vs. Fianza, G. R. No. 158606, March 9, 2004).
Homeowners SLA vs. NLRC, G.R. No. 97067, September 26, 1996
Facts:
Private respondent Marylin Cabatbat filed a complaint for illegal dismissal
after she was terminated from her employment as Branch Accountant for her
refusal to be transferred to the Urdaneta Branch as she maintained that her
re-assignment from San Carlos Branch to Urdaneta Branch involved a
promotion which she can rightfully decline without being guilty of willful
disobedience, a just cause for termination. Petitioner, however, averred that
the re-assignment was merely a transfer to another post which she cannot
validly refuse without incurring the concomitant disciplinary measures the
petitioner corporation may deem fit to impose, which in this case is
termination.
Issue:
Whether Cabatbats refusal to be transferred to the Urdaneta Branch
constitutes a ground for dismissal from employment.
Page 87
Held:
Yes. The petitioners decision to transfer private respondent to the Urdaneta
Branch was made without grave abuse of discretion. As creditably explained
by management, the reason for the transfer was due to the exigency to uplift
the operational efficiency of the Urdaneta Branch, and that private
respondents continued failure to report to said branch has continuously
exposed the bank to lack of control in its cash operation and has also resulted
to a backlog in its recordkeeping and delay in the accomplishment of
reportorial requirements, all of which fall under the scope of the
responsibilities of the Branch Accountant.
Page 88
Issue:
Assuming the allegations of the guards were true, was the dismissal valid?
Held:
No, the dismissal was not valid. Disobedience, to be a just cause for
termination, must be willful and perverse mental attitude rendering the
employees act inconsistent with proper subordination. A willful or
intentional disobedience justifies dismissal only when the rule, order or
instruction is;(1) reasonable and lawful, (2) sufficiently known to the
employee, and (3) connected with the duties which the employee has been
engaged to discharge. The reasonableness and lawfulness of a rule depend
on the circumstances of each case. Reasonableness pertains to the kind or
character of directives and commands and to the manner in which they are
made. In this case, the order to report to the Manila office fails to meet this
standard. It was grossly inconvenient for the guards who were residents
and heads of families in Basilan. The guards were not provided with funds
to defray their transportation and living expenses. The dismissal in this case
was too harsh a penalty for the insubordination which was neither willful nor
intentional. The guards failure to answer PISIs show-cause letters does
not negate this conclusion as PISI granted other guards a second chance to
explain, an opportunity it denied Escobin and his group
Transfer with promotion; if rejected - In Dosch vs. NLRC, [208 Phil. 259; 123
SCRA 296 (1983)], the refusal of the employee to be transferred was upheld
because no law compels an employee to accept a promotion and because the
position he was supposed to be promoted to did not even exist at that time.
3) Neglect of duties the following are the grounds for gross neglect of duties:
Element of habituality may be disregarded where loss is substantial.
Element of habituality may be disregarded if totality of evidence justifies
dismissal.
Element of actual loss or damage, not an essential requisite.
Habitual tardiness or habitual absenteeism may be a ground for termination.
Page 89
b. a clear intention to sever the employer-employee relationship. This is the
more determinative factor being manifested by some overt acts.
5) Loss of confidence The law and jurisprudence have long recognized the right of
employers to dismiss employees by reason of loss of trust and confidence. Thus, if
there is sufficient evidence to show that the employee has been guilty of breach of
trust or that his employer has ample reason to distrust him, the labor tribunal
cannot justly deny to the employer the authority to dismiss such employee, more so
in cases where the latter occupies a position of responsibility.
Facts:
Page 90
Issue:
Whether petitioner was illegally dismissed.
Held:
No. By the very nature of his position, the maintenance of an employer-
employee relationship is highlv dependent upon the trust and confidence
reposed on the employee by the employer. The loss of trust and confidence
by the employer would instantly mean the termination of employment. It has
been repeatedly held by the Supreme Court in a long line of decisions that
where an employee has been guilty of breach of trust or that his employer
has ample reason to distrust him, a labor tribunal cannot deny the employer
the authority to dismiss the employee.
Page 91
7) Other causes analogous to the foregoing a cause must be due to the
voluntary or willful act or omission of the employee (Nadura vs Benguet
Consolidated;
GR L-17780).
redundancy, for purposes of the Labor Code, exists where the services of an
employee are in excess of what is reasonably demanded by the actual
requirements of the enterprise. (Wishire File Co. Inc. vs. NLRC)
REDUNDANCY V. RETRENCHMENT
Page 92
caused by the cancellation of orders from abroad and by the garments
embargo of 1990.
Believing that their "temporary lay-off" was a ploy to dismiss them which
was resorted to because of their union activities and was in violation of
their right to security of tenure since there was no valid ground therefor,
the laid-off employees filed with the Labor Arbiter's office in the NCR
complaints for illegal dismissal, unfair labor practice, underpayment of
wages, and non-payment of overtime pay and 13th month pay.
GTI denied the claim of illegal dismissal and asserted that it was its
prerogative to lay-off its employees temporarily for a period not exceeding
six months to prevent losses due to lack of work or job orders from
abroad, and that the lay-off affected both union and non-union members.
It justified its failure to recall the laid-off employees after the lapse of six
months because of the subsequent cancellations of job orders made by its
foreign principals, a fact which was communicated to the petitioners and
the other complainants who were all offered severance pay. Twenty-two
(22) of the 38 complainants accepted the separation pay. The petitioners
herein did not.
Issue:
Whether or not the lay-off is a valid retrenchment or an illegal
constructive dismissal
Held:
Redundancy exists where the services of an employee are in excess of
what is reasonably demanded by the actual requirements of the
enterprise. A position is redundant where it is superfluous, and superfluity
of a position or positions may be the outcome of a number of factors,
such as overhiring of workers, decreased volume of business, or dropping
of a particular product line or service activity previously manufactured or
undertaken by the enterprise.
Page 93
lack of work, and considerable reduction on the volume of his business, a
right consistently recognized and affirmed by this Court.
Here, both the Labor Arbiter and the NLRC found that the private
respondent was suffering and would continue to suffer serious losses,
thereby justifying the retrenchment of some of its employees, including
the petitioners
Lopez Sugar Corp. vs. Federation of Free Workers, Aug. 30, 1990
The controversy in this case is that whether or not petitioners application
for clearance to retrench its employees should be granted.
It was ruled by the Supreme Court in the negative stating the provisions
of article 283 of the Labor Code as amended.
Page 94
(1) the losses incurred are substantial and not deminimis:
(2) the losses are actual or reasonably imminent;
(3) the retrenchment is reasonably necessary and is likely to be
effective in preventing the expected imminent losses sought to be
forestalled, are proven by sufficient and convincing evidence.
Upon the other hand, it appears from the record that petitioner, after
reducing its work force, advised 110 casual workers to register with the
company personnel officer as extra workers. Petitioner, as earlier noted,
argued that it did not actually hire casual workers but that it merely
organize(d) a pool of extra workers from which workers could be drawn
whenever vacancies occurred by reason of regular workers going on leave
of absence. Both the Labor Arbiter and the NLRC did not accord much
credit to petitioners explanation but petitioner has not shown that the
Labor Arbiter and the NLRC were merely being arbitrary and capricious in
their evaluation.
Page 95
To resolve the issue, the court revisit the provision of law adverted to
by the parties in their submissions, namely, Art. 283 of the Labor
Code.
As already stated, Art. 283 of the Labor Code does not obligate an
employer to pay separation benefits when the closure is due to losses.
In the case before us, the basis for the claim of the additional
separation benefit is alleged discrimination, i.e., unequal treatment of
employees, which is proscribed as an unfair labor practice by Art. 248
(e) of said Code.
Under the facts and circumstances of the present case, the grant of a
lesser amount of separation pay to private respondent was done, not
by reason of discrimination, but rather, out of sheer financial
bankruptcy a fact that is not controlled by management
prerogatives. Stated differently, the total cessation of operation due to
mind-boggling losses was a supervening fact that prevented the
company from continuing to grant the more generous amount of
separation pay.
The fact that North Davao at the point of its forced closure voluntarily
paid any separation benefits at all although not required by law
and 12.5-days worth at that, should have elicited admiration instead of
condemnation. But to require it to continue being generous when it is
no longer in a position to do so would certainly be unduly oppressive,
unfair and most revolting to the conscience.
Closure of Business
Serious Business Losses
REAHS CORP v NLRC April 15, 1997
Facts:
Page 96
In their defense, Respondent replied that due to poor business, increase
in the rental cost and the failure of Meralco to reconnect the electrical
services in the establishment, it suffered losses leading to its closure.
Issue:
Held:
Page 97
case, the right of affected employees to separation pay is lost for obvious
reasons.
Here, the corporation's alleged serious business losses and financial
reverses were not amply shown or proved.
Facts:
BSSI was engaged in the manufacture and sale of computer forms. Due to
financial reverses, its creditors, the Development Bank of the Philippines
(DBP) and the Asset Privatization Trust (APT), took possession of its
assets, including a manufacturing plant in Marilao, Bulacan.
However, barely two and a half months later, these remaining employees
were likewise discharged because the company decided to cease business
operations altogether. Unlike the private respondents, that batch of
employees received separation pay equivalent to a full month's salary for
every year of service plus mid-year bonus.
Page 98
The Labor Arbiter ruled in favor of the herein private respondents to
which petitioners appealed to the NLRC.
Issue:
Whether or not Petitioners contention regarding the differentials of the
separation benefits is correct.
Held:
The SC ruled based on the following observations of the Commission
which are relevant.
BSSI argued that the giving of more separation benefit to the second and
third batches of employees separated was their expression of gratitude
and benevolence to the remaining employees who have tried to save and
make the company viable in the remaining days of operations.
This justification is not plausible. There are workers in the first batch who
have rendered more years of service and could even be said to be more
efficient than those separated subsequently, yet they did not receive the
same recognition.
As it happened, there are workers in the first batch who have rendered
more years in service but received lesser separation pay, because of that
arrangement made by the respondents in paying their termination
benefits.
Page 99
the guise of exercising management prerogatives, grant greater benefits
to some and less to others. Management prerogatives are not absolute
prerogatives but are subject to legal limits, collective bargaining
agreements, or general principles of fair play and justice
(UST vs. NLRC, 190 SCRA 758)
b. with a certification from public health officer that the disease is incurable
within 6 months despite due medication and treatment.
Page
100
CAUSE OF SEPARATION PAY
TERMINATIO
N
Automation Equivalent to at least one month pay or at least one month
pay for every year of service, whichever is higher
Redundancy Equivalent to at least one month pay or at least one month
pay for every year of service, whichever is higher
NOTE: ARTICLE 283 governs the grant of separation benefits in case of closures or
cessation of operation of business establishments NOT due to serious business
losses or cessation of operation [North Davao Mining Corp. vs. NLRC, et al].
Therefore, the employee is not entitled to such benefit if the closure was due to
SERIOUS BUSINESS LOSSES.
Page
101
When termination is brought about by the completion of the contract or phase
thereof, no prior notice is required
ACT OF DISMISSAL
As part of substantive due process, an act of dismissal refers to the grounds upon
which the employees dismissal is based. The legality of such act of dismissal must be
within the grounds provided under Article 282 to 284 of the Labor Code.
MANNER OF DISMISSAL
Procedural due process requires that an employees dismissal should comply with the
procedural requirements laid down by the Labor Code and other special laws.
Page
102
Standards of Due Process
As a general rule, the Constitution provides that the essential elements of due process
are notice and hearing whereby a person is given the right to be informed of the
charges against him and that he is given the opportunity to be heard. In termination
cases, notice and hearing are cannot be dispensed with.
TWO-NOTICE RULE
As stated in Article 277(b), the Labor Code requires that two notices be furnished to the
employee prior to his or her dismissal, namely:
Page
103
Reasonable opportunity refers to every kind of assistance that the management
must accord to the employees to enable them to prepare adequately for their
defense, e.g. gathering of data, evidence, etc. (King of Kings Transport v. Mamac)
It is a written notice of termination served upon the employee, indicating that upon
due consideration of all the circumstances, the grounds upon which his or her
termination is based have been established to justify the termination.
Page
104
Facts:
Private respondent Roberto Mallare was hired by petitioner Wenphil
as a crew member at its Cubao Branch. He thereafter became the
assistant head of the Backroom Department.On May 20, 1985, private
respondent had an altercation with a co-employee, Job Barrameda
regarding the tending of the salad bar. Mallare slapped Barramedas cap,
stepped on the latters foot, and picked up the ice scooper and brandished
it againstthe latter.The incident was reported to the assistant manager,
Delilah Hermosura, who immediately asked Mallare to see her. Mallare
refused to see Hermosura and it took the security guard to bring him to
her. Mallare then shouted profane words instead of making an explanation
before her. He stated that the matter should be settled only by him and
Barrameda.
The store manager, on the basis of Hermosuras report, suspended
Mallare and Barrameda until further notice. Later that day, the store
manager issued a memorandum suspending Barrameda for one week and
dismissing Mallare from service,in accordance with their Personnel Manual.
The notice of dismissal was served on Mallare on May 25,
1985..Respondent Mallare filed a complaint against petitioner Wenphil for
unfair labor practice, illegal suspension, and illegal dismissal.Petitioner
contended that under its Personnel Manual, which had been read and
understood by respondent Mallare, an investigation shall only be
conducted if the offense committed by the erring employee is punishable
with a penalty higher than suspension of fifteen says and the erring
employee requests for an investigation of the incident. Petitioner alleged
that since respondent Mallare did not ask for an investigation, he is
deemed to have waived such right. The Labor Arbiter dismissed the
complaint for lack of merit, since hearing cannot be conducted due to the
repeated absence of private respondents counsel. The NLRC set aside the
appealed decision and ordered the reinstatement of the private
respondent to his former position, without loss of seniority and other
benefits and one (1) year back wages without qualification and deduction.
Hence, the instant petition for review.
ISSUE:
Whether or not an employee dismissed for just cause but without due
process be reinstated to work.
Ruling:
Page
105
The basic requirement of due process is that which it hears before
it condemns, proceeds upon inquiry and renders judgment only after trial.
The dismissal of an employee must be for a just cause and after due
process. Petitioner committed an infraction of the second requirement
thus it must be imposed a sanction for its failure to give a formal notice
and conduct an investigation as required by law before dismissing Mallare
from employment. Petitioner must indemnify the dismissed employee
which depends on the facts of each case and the gravity of the omission
committed by the employer.
Under the so-called WENPHIL DOCTRINE if the services of
the employee was terminated due to a just or authorized cause
but the affected employees right to due process has been
violated, the dismissal is legal but the employee is entitled to
damages by way of indemnification for the violation of the right.
In the last couple of decades, the Supreme Court has grappled
with the legal effect and the corresponding sanction in cases
where there exists a just and valid ground to justify the dismissal
but the employer fails to comply with the due process
requirement of the law. Prior to the promulgation in 1989 of
Wenphil v. NLRC, [170 SCRA 69, February 8, 1989], the
prevailing doctrine held that dismissing employees without
giving them proper notices and an opportunity to be heard was
illegal and that, as a consequence thereof, they were entitled to
reinstatement plus full backwages. Wenphil abandoned this
jurisprudence and ruled that if the dismissal was for a just or an
authorized cause but done without due process, the termination
was valid but the employer should be sanctioned with the
payment of indemnity ranging from P1,000.00 to P10,000.00.
Page
106
The LA rendered a decision in favor of Serrano. It stated that
Isetann failed to establish that it had retrenched its security division, that
the petitioner was not accorded due process, etc. and even stated that
the day after Serranos dismissal, Isetann employed a safety and security
supervisor with similar duties to that of the former. The NLRC on the
other hand reversed the LA but ordered Isetann to pay separation pay
equivalent to one month per year of service, unpaid salary, etal. It held
that the phase-out of the security section was a valid exercise of
management prerogative on the part of Isetann, for which the NLRC
cannot substitute its judgment in the absence of bad faith or abuse of
discretion on the part of the latter; and that the security and safety
supervisors position was long in place prior to Serranos separation from
the company, or the phase-out of the Security Section.
Issue:
Whether or not the dismissal was illegal.
Held:
An employers good faith in implementing a redundancy program is not
necessarily put in doubt by the availment of the services of an
independent contractor to replace the services of the terminated
employees to promote economy and efficiency. Absent proof that
management acted in a malicious or arbitrary manner, the Court will not
interfere with the exercise of judgment by an employer.If termination of
employment is not for any of the cause provided by law, it is illegal and
the employee should be reinstated and paid backwages. To contend that
even if the termination is for a just cause, the employee concerned should
be reinstated and paid backwages would be to amend Art 279 by adding
another ground for considering dismissal illegal.If it is shown that the
employee was dismissed for any of the causes mentioned in Art 282, the
in accordance with that article, he should not be reinstated but must be
paid backwages from the time his employment was terminated until it is
determined that the termination of employment is for a just cause
because the failure to hear him before he is dismissed renders the
termination without legal effect.
Page
107
Therefore, the employee is entitled to backwages from the time
he was dismissed until the determination of the justness of the
cause of the dismissal. In 2000, the Supreme Court promulgated
Serrano v. NLRC, [G.R. No. 117040, January 27, 2000], which
modified Wenphil. It considered such termination ineffectual
(not illegal) and sanctioned the employer with payment of full
backwages plus nominal and moral damages, if warranted by the
evidence. In case the dismissal was for an authorized cause,
separation pay in accordance with Article 283 of the Labor Code
should be awarded.
Page
108
Held:
No. To dismiss an employee, the law required not only the
existence of a just and valid cause but also enjoins the employer to give
the employee the right to be heard and to defend himself. Abandonment
is the deliberate and unjustified refusal of an employee to resume his
employment. For a valid finding or abandonment, two factors are
considered: failure to report for work without a valid reason; and, a clear
intention to sever employer-employee relationship with the second as the
more determinative factor which is manifested by overt acts from which it
may be deduced that the employees has no more intention to work.Where
the employer had a valid reason to dismiss an employee but did not follow
the due process requirement, the dismissal may be upheld but the
employer will be penalized to pay an indemnity to the employee. This
became known as the Wenphil Doctrine of the Belated Due process
Rule.Art. 279 means that the termination is illegal if it is not for any of the
justifiable or authorized by law. Where the dismissal is for a just cause,
the lack of statutory due process should not nullify the dismissal but the
employer should indemnify the employee for the violation of his statutory
rights. The indemnity should be stiffer to discourage the abhorrent
practice of dismiss now, pay later which we sought to deter in Serrano
ruling. The violation of employees rights warrants the payment of nominal
damages.
Page
109
JAKA Food Processing vs. Pacot -GR No. 151378
TEMPERED VS STIFFER SANCTIONS
Facts:
Respondents were earlier hired by petitioner JAKA Foods
Processing Corporation until the latter terminated their employment
because the corporation was in dire financial straits. It is not disputed,
however, that the termination was effected without JAKA complying with
the requirement under Article 283 of the Labor Code regarding the service
of a written notice upon the employees and the Department of Labor and
Employment at least one (1) month before the intended date of
termination. Respondents filed complaints for illegal dismissal,
underpayment of wages and nonpayment of service incentive leave and
13th month pay against JAKA. The Labor Arbiter rendered a decision
declaring the termination illegal and ordering JAKA to reinstate
respondents with full backwages, and separation pay if reinstatement is
not possible. The Court of Appeals reversed said decision and ordered
respondent JAKA to pay petitioners separation pay equivalent to one (1)
month salary, the proportionate 13th month pay and, in addition, full
backwages from the time their employment was terminated.
Issue:
Whether or not full backwages and separation pay be awarded to
respondents when employers effected termination without complying with
the twin notice rule.
Held:
The dismissal of the respondents was for an authorized cause
under Article 283. A dismissal for authorized cause does not necessarily
imply delinquency or culpability on the part of the employee. Instead, the
dismissal process is initiated by the employers exercise of his
management prerogative, i.e. when the employer opts to install labor-
saving devices, when he decides to cease business operations or when
he undertakes to implement a retrenchment program.
Page
110
imposed upon him should be tempered because the dismissal
was initiate by an act imputable to the employee.
2) if the dismissal is based on an authorized cause but the
employer fails to comply with the notice requirement, the
sanction should be stiffer because the dismissal process was
initiated by the employers exercise of his management
prerogative. Thus, dismissal was upheld but ordered JAKA to pay each
of the respondents the amount of PhP 50,000.00 representing nominal
damages for non-compliance with statutory due process.
PREVENTIVE SUSPENSION
When there is an imminent threat to the lives and properties of the employer, his
family and representatives as well as the offenders co-workers by the continued service
of the employee then he may be placed under preventive suspension pending his
investigation, leading to termination.
preventive suspension should not last for more than thirty (30) days. The
employee should be made to resume his work after 30 days.
it can be extended provided the employees wages are paid after the 30 day
period.
CONSEQUENCES OF TERMINATION
Page
111
Separation Pay. An employee lawfully dismissed for a just cause is not
entitled to any separation pay; while an employee separated for an authorized
cause is entitled to separation pay in accordance with the rates prescribed by
law. (Chan. The Labor Code of the Philippines Annotated Volume II).
Art. 298. [283] Closure of Establishment and Reduction of Personnel.
The employer may also terminate the employment of any employee due to the
installation of labor-saving devices, redundancy, retrenchment to prevent losses
or the closing or cessation of operation of the establishment or undertaking
unless the closing is for the purpose of circumventing the provisions of this Title,
by serving a written notice on the workers and the Ministry of Labor and
Employment at least one (1) month before the intended date thereof. In case of
termination due to the installation of labor-saving devices or redundancy, the
worker affected thereby shall be entitled to a separation pay equivalent to at
least his one (1) month pay or to at least one (1) month pay for every year of
service, whichever is higher. In case of retrenchment to prevent losses and in
cases of closures or cessation of operations of establishment or undertaking not
due to serious business losses or financial reverses, the separation pay shall be
equivalent to one (1) month pay or at least one-half (1/2) month pay for every
year of service, whichever is higher. A fraction of at least six (6) months shall be
considered as one (1) whole year.
In case the CBA or company policy provides for a higher separation pay,
the same must be followed instead of the one provided in Article 283. (Chan.
The Labor Code of the Philippines Annotated Volume II).
Art. 299. [284] Disease as a Ground of 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.
Page
112
An employee who is dismissed for just cause is generally not entitled to
separation pay. A reading of Art. 279 in relation to Art. 282 of the Labor Code,
reveals that an employee who is dismissed for cause after appropriate
proceedings in compliance with due process requirements is not entitled to an
award of separation pay. In some cases however, the SC awarded separation
pay to a legally dismissed employee on the grounds of equity and social justice.
This is not allowed though when the employee has been dismissed for serious
misconduct or some other causes reflecting on his moral character or personal
integrity. (Etcuban, Jr. v. Sulpicio Lines, Inc. G.R. No. 148410, Jan. 17, 2005,
among others).
Page
113
SEPARATION PAY AS AN EMPLOYEE BENEFIT
Employers may lawfully and effectively reduce their personnel by offering
resignation benefits through a Voluntary Resignation Program where employees
are afforded the right to voluntarily terminate the employment relationship. If
made in good faith, such as scheme should be considered a valid form of
terminating employment. Consequently, the employer need not comply with the
requirement under Article 283 of the Labor Code that notice be sent to the
Department of Labor and Employment at least a month prior to the effectivity of
the termination of employment. The reason is that by applying to voluntarily
resign, the employee thereby acknowledges the existence of a valid cause for
terminating his employment. (Dole Philippines Inc. v. NLRC, G.R. No. 120009,
Sept. 13, 2001; International Hardware, Inc. v. NLRC, G.R. No. 80770, Aug. 10,
1989).
BACKWAGES
Page
114
Separation pay cannot be paid in lieu of backwages. (Torillo v. Leogardo,
G.R. No. 77205, May 27, 1991).
FULL BACKWAGES
MERCURY DRUG RULE (PRIOR TO R.A. 6715)
MERCURY DRUG VS. CIR 56 SCRA 694
MAKASIAR, J.:p
Procedural History:
Petitioner Mercury Drug Co., Inc. seeked the reversal of the decision of
respondent Court of Industrial Relations dated January 17, 1964 and its
order dated February 25, 1964 denying petitioners' motion for
reconsideration of the said decision.
Statement of Facts:
Private respondent Dayao was employed on February 13, 1956 by the
petitioners originally as driver, later assigned as delivery man, then as
checker and was last promoted to the position of assistant chief checker in
the checking department until his separation on April 10, 1961.
Days before April 10, 1961, Dayao urged petitioners to pay them overtime
pay, criticized their employees' association for failing to protect the
welfare of the employees by not securing such additional compensation
for overtime, and campaigned among his co-employees to organize
another labor union. Hearing of Dayao's union activities, petitioner called
for Dayao on April 10, 1961, told him to resign and persuaded him to
accept the amount of P562.50 as termination pay and to sign a clearance
stating to the effect that he has no claims whatsoever of any kind and
nature against herein petitioners.
On April 25, 1963, exactly two years and fifteen days from his separation
on April 10, 1961, Dayao filed a complaint for unfair labor practice against
petitioners for dismissing him because of his having campaigned among
his co-employees to become members of a new labor union that he was
then organizing.
In their answer to the ULP complaint, petitioners interposed as their only
defense that Dayao "was separated from the service ... for cause because
Page
115
of creating trouble with another employee who was also dismissed and
that even if the said complainant was separated for cause, he received
compensation pay and hereby relieved respondent from whatever claim or
claims that he had against respondents." They also relied on laches, aside
from estoppel, to defeat Dayao's ULP charge.
SC held that the petitioners were guilty of unfair labor practices. There
was no sufficient basis for discharging Dayao from employment.
Acceptance of termination pay does not divest a laborer the right to
prosecute his employer for unfair labor practice acts, much less for signing
the clearance paper. Acceptance of those benefits would not amount to
estoppel. SC stated that there was clear interference with the union
activity and that his dismissal from employment was discriminatory. And
since there was illegal dismissal, Dayao was entitled to backwages.
Issue:
How much backwages shall be allowed private respondent Dayao.
Answer:
Dayao should be paid backwages equivalent to one year, eleven months,
and fifteen days without further disqualifications, which is computed from
4 years prescriptive period less the period of delay in instituting the ULP
charge (2 years and 15 days).
Reasoning:
While this case was submitted for decision on March 29, 1965, the delay
in its resolution is not due to the parties. However, it should be noted that
private respondent Dayao filed his ULP charge with reinstatement and
back wages about two years and fifteen days after his separation on April
10, 1961. As aforestated, the shortest prescriptive period for the filing of
all other actions for which the statute of limitations does not fix a period,
is four years. The period of delay in instituting this ULP charge with claim
for reinstatement and back wages, although within the prescriptive period,
should be deducted from the liability of the employer to him for back
wages. In order that the employee however should be relieved from
proving his income during the period he was out of the service and the
employer from submitting counter-proofs, which may delay the execution
of the decision, the employer in the case at bar should be directed to pay
private respondent Dayao backwages equivalent to one year, eleven
months, and fifteen days without further disqualifications.
Page
116
Holding:
WHEREFORE, THE PETITION IS HEREBY DISMISSED AND PETITIONERS
ARE HEREBY DIRECTED: (1) TO PAY PRIVATE RESPONDENT NARDO
DAYAO BACK WAGES EQUIVALENT TO ONE YEAR, ELEVEN MONTHS, AND
FIFTEEN DAYS; (2) TO REINSTATE HIM AFTER CERTIFICATION OF HIS
PHYSICAL FITNESS BY A GOVERNMENT PHYSICIAN; AND (3) TO PAY THE
COSTS.
Page
117
RULE AFTER R.A. 6715 (DATE TO RECKON MARCH 21, 1989)
ALEX FERRER VS. NLRC
JULY 5, 1993
MELO, J.:
Procedural History:
The petition for certiorari seeks to annul and set aside: (a) the decision
dated June 20, 1991 of the Second Division of the National Labor
Relations Commission (NLRC) which affirmed in toto the decision of April
5, 1990 of Labor Arbiter dismissing the complaint for illegal dismissal and
unfair labor practice on the ground that both the company and the union
merely complied with the collective bargaining agreement provision
sanctioning the termination of any employee who fails to retain
membership in good standing with the union; and (b) the NLRC resolution
denying the motion for the reconsideration of said decision.
Statement of Facts:
Petitioners were regular and permanent employees of the Occidental
Foundry Corporation (OFC) which was under the management of Hui Kam
Chang. As piece workers, petitioners' earnings ranged from P110 to P140
a day. They had been in the employ of OFC for about ten years at the
time of their dismissal in 1989.
On January 5, 1989, the Samahang Manggagawa ng Occidental Foundry
Corporation-FFW (SAMAHAN) and the OFC entered into a collective
bargaining agreement (CBA) which would be effective for the three-year
period between October 1, 1988 and September 30, 1991. It included a
union security clause saying that failure to retain membership in good
standing with the UNION shall be ground for the operation of paragraph 1
hereof and the dismissal by the company of the aforesaid employee upon
written request by the union.
Several intraunion squabbles took place as to the election of the officers
due to their alleged inattentiveness to the economic demands of the
members. This prompted the union to send a letter to Hui Kam Chang,
requesting for the dismissal of several people, including petitioners Ferrer
et. al. The petitioners professed their innocence to the chages levelled
against them by SAMAHAN and FFW, but received no reply. As such, they
Page
118
filed a complained for illegal dismissal and unfair labor practice before the
NLRC against Hui Kam Chang, OFC, SAMAHAN, and FFW.
Labor Arbiter dismissed the complaint, saying that OFC was merely
complying with the mandatory provisions of the CBA, and that SAMAHAN
and FFW cannot be charged with illegal dismissal as there was no
employer-employee relationship between them and the petitioners. NLRC
affirmed the decision of Labor Arbiter. Hence the appeal.
SC held that the petitioners were illegally dismissed because while the
CBAs union security clause was valid, both parties thereto should see to it
that no right is violated or impaired during its implementation. There was
an absence of notice and hearing when the petitioners were illegally
dismissed. Due process was inexistent.
Issue:
Whether or not the petitioners, who were illegally dismissed, were entitled
to backwages.
Answer:
Yes. The petitioners can receive their full back wages computed from the
moment their compensation was withheld after their dismissal in 1989 up
to the date of actual reinstatement.
Reasoning:
With the passage of Republic Act No. 6715 which took effect on March 21,
1989, Article 279 of the Labor Code was amended to read as follows:
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. 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.
Page
119
the Mercury Drug Rule (Mercury Drug Co., Inc. vs. Court of Industrial
Relations, 56 SCRA 694 [1974]) which limited the award of back wages of
illegally dismissed workers to three (3) years "without deduction or
qualification" to obviate the need for further proceedings in the course of
execution, is no longer applicable.
A legally dismissed employee may now be paid his back wages,
allowances, and other benefits for the entire period he was out of
work subject to the rule enunciated before the Mercury Drug
Rule, which is that the employer may, however, deduct any
amount which the employee may have earned during the period
of his illegal termination. Computation of full back wages and
presentation of proof as to income earned elsewhere by the illegally
dismissed employee after his termination and before actual reinstatement
should be ventilated in the execution proceedings before the Labor Arbiter
concordant with Section 3, Rule 8 of the 1990 new Rules of Procedure of
the National Labor Relations Commission.
The petitioners can receive their back wages computed from the moment
their compensation was withheld after their dismissal in 1989 up to the
date of actual reinstatement. In such a scenario, the award of back wages
can extend beyond the 3-year period fixed by the Mercury Drug Rule
depending, of course, on when the employer will reinstate the employees.
Holding:
WHEREFORE, the decision appealed from is hereby SET ASIDE and private
respondents are hereby ordered to reinstate petitioners to their former or
equivalent positions without loss of seniority rights and with full back
wages, inclusive of allowances and other benefits or their monetary
equivalent, pursuant to Article 279 of the Labor Code, as amended by
Republic Act No. 6715.
Page
120
1990, in NLRC Case No. 01-04-0056-89, which affirmed in toto the
decision of the Labor Arbiter dated February 28,1990.
Statement of Facts:
Private respondents Bentrez et. al., were all employed as teachers on
probationary basis by petitioner Pines City Educational Center. All the
private respondents, except Roland Picart and Lucia Chan, signed
contracts of employment with petitioner for a fixed duration. On March 31,
1989, due to the expiration of private respondents' contracts and their
poor performance as teachers, they were notified of petitioners' decision
not to renew their contracts anymore.
On April 10, 1989, private respondents filed a complaint for illegal
dismissal before the Labor Arbiter, alleging that their dismissals were
without cause and in violation of due process. Except for private
respondent Leila Dominguez who worked with petitioners for one
semester, all other private respondents were employed for one to two
years. They were never informed in writing by petitioners regarding the
standards or criteria of evaluation so as to enable them to meet the
requirements for appointment as regular employees.
For their part, petitioners contended that private respondents' separation
from employment, apart from their poor performance, was due to the
expiration of the periods stipulated in their respective contracts. In the
case of private respondent Dangwa Bentrez, the duration of his
employment contract was for one year, or beginning June, 1988 to March
1989 whereas in the case of the other private respondents, the duration
of their employment contracts was for one semester, or beginning
November, 1988 to March 1989.
On February 28, 1990, the Labor Arbiter rendered judgment in favor of
private respondents, ordering their reinstatement and the payment of
their full backwages and other benefits and privileges without qualification
and deduction from the time they were dismissed up to their actual
reinstatement. The computation of backwages covered only the period
private respondents were terminated up to January 31, 1990 or 10
months and does not include backwages from January 31, 1990 up to
their actual reinstatement. In support of this decision, the Labor Arbiter
rationalized that the teacher's contracts were vague and did not include
the specific description of duties and assignments of private respondents.
Page
121
NLRC affirmed the decision of Labor Arbiter. Hence, the appeal.
SC held that insofar as the private respondents who knowingly and
voluntarily agreed upon fixed periods of employment are concerned, their
services were lawfully terminated by reason of the expiration of the
periods of their respective contracts. With respect to the remaining private
respondents Roland Picart and Lucia Chan, both of whom did not sign any
contract fixing the periods of their employment nor to have knowingly and
voluntarily agreed upon fixed periods of employment, petitioners had the
burden of proving that the termination of their services was legal. As
probationary employees, they are likewise protected by the security of
tenure provision of the Constitution. Consequently, they cannot be
removed from their positions unless for cause.
Issue:
Whether or not private respondents Picart and Chan, who were illegally
dismissed, were entitled to payment of backwages.
Answer:
Yes. Private respondents Picart and Chan were entitled to payment of
backwages. However, in the computation of the backwages, the total
amount derived from employment elsewhere by the employee from the
date of dismissal up to the date of reinstatement, if any, should be
deducted therefrom.
Reasoning:
The order for their reinstatement and payment of full backwages and
other benefits and privileges from the time they were dismissed up to
their actual reinstatement was proper, conformably with Article 279 of the
Labor Code, as amended by Section 34 of Republic Act No. 6715, 14
which took effect on March 21, 1989. It should be noted that private
respondents Roland Picart and Lucia Chan were dismissed illegally on
March 31, 1989, or after the effectivity of said amendatory law.
However, in ascertaining the total amount of backwages payable
to them, SC went back to the rule prior to the Mercury Drug Rule
that the total amount derived from employment elsewhere by
the employee from the date of dismissal up to the date of
reinstatement, if any, should be deducted therefrom. SC restated
the underlying reason that employees should not be permitted to enrich
themselves at the expense of their employer. In addition, the law abhors
double compensation. To this extent, SCs ruling in Alex Ferrer, et al., v.
Page
122
NLRC, et al., G.R. No. 100898, promulgated on July 5, 1993, was hereby
modified.
Holding:
WHEREFORE, the resolution of public respondent National Labor Relations
Commission dated November 29, 1990 is hereby MODIFIED. Private
respondents Roland Picart and Lucia Chan are ordered reinstated without
loss of seniority rights and other privileges and their backwages paid in
full inclusive of allowances, and to their other benefits or their monetary
equivalent pursuant to Article 279 of the Labor Code, as amended by
Section 34 of Republic Act No. 6715, subject to deduction of income
earned elsewhere during the period of dismissal, if any, to be
computed from the time they were dismissed up to the time of
their actual reinstatement. The rest of the Labor Arbiter's decision
dated February 28, 1990, as affirmed by the NLRC is set aside.
Page
123
From here, SC stated that over the years, it applied different methods in
the computation of backwages:
1. The first labor relations law governing the award of backwages was
Republic Act No. 875, the Industrial Peace Act, approved on 17 June
1953. Sections 5 and 15 thereof provided that backpay (the same as
backwages) could be awarded where, in the opinion of the Court of
Industrial Relations (CIR) such was necessary to effectuate the policies of
the Industrial Peace Act. As the CIR was given wide discretion to grant or
disallow payment of backpay (backwages) to an employee, it also had the
implied power of mitigating (reducing) the backpay where backpay was
allowed. Thus, in the exercise of its jurisdiction, the CIR increased or
diminished the award of backpay, depending on several circumstances,
among them, the employee's employment in other establishments during
the period of illegal dismissal. The same was enunciated in the case of
Itogon-Suyoc Mines, Inc. v. Sagilo-Itogon Workers' Union.
2. SC found occasion in the case of Mercury Drug Co., Inc., et al. v. CIR, et
al. to rule that a fixed amount of backwages without further qualifications
should be awarded to an illegally dismissed employee (hereinafter the
Mercury Drug rule). However, Justice Teehankee dissented from the
majority and opined that an award of back wages equivalent to three
years (where the case is not terminated sooner) should serve as the base
figure for such awards without deduction, subject to deduction where
there are mitigating circumstances in favor of the employer but subject to
increase by way of exemplary damages where there are aggravating
circumstances (e.g. oppression or dilatory appeals) on the employer's
part."
3. The proposal on the three-year backwages was subsequently adopted in
later cases.
4. Then came Presidential Decree No. 442 (the Labor Code of the
Philippines) which was signed into law on 1 May 1974 and which took
effect on 1 November 1974. The law specifically declared that the award
of backwages was to be computed from the time compensation was
withheld from the employee up to the time of his reinstatement. This
nothwithstanding, the rule generally applied by the Court after the
promulgation of the Mercury Drug case, and during the effectivity of P.D.
No. 442 was still the Mercury Drug rule. A survey of cases from 1974 until
1989, when the amendatory law to P.D. No. 442, namely, R.A. No. 6715
took effect, supports this conclusion.
5. In the case of New Manila Candy Workers Union (Naconwa-Paflu) v. CIR
(1978), or after the Labor Code (P.D. No. 442) had taken effect, the Court
still followed the Mercury Drug rule to avoid the necessity of a hearing on
Page
124
earnings obtained elsewhere by the employee during the period of illegal
dismissal. In an even later case (1987) the Court declared that the general
principle is that an employee is entitled to receive as backwages all the
amounts he may have received from the date of his dismissal up to the
time of his reinstatement. However, in compliance with the jurisprudential
policy of fixing the amount of backwages to a just and reasonable level,
the award of backwages equivalent to three (3) years, without
qualification or deduction, was nonetheless followed.
6. In a more direct approach to the rule on the award of backwages, this
Court declared in the 1990 case of Medado v. Court of Appeals that "any
decision or order granting backwages in excess of three (3) years is null
and void as to the excess". In sum, during the effectivity of P.D. 442, the
Court enforced the Mercury Drug rule and, in effect, qualified the
provision under P.D. No. 442 by limiting the award of backwages to three
(3) years.
7. On 21 march 1989, Republic Act No. 6715 took effect, amending the
Labor Code. In here, an illegally dismissed employee is entitled to his full
backwages from the time his compensation was withheld from him
(which, as a rule, is from the time of his illegal dismissal) up to the time of
his actual reinstatement. It was true that SC had ruled in the case of Pines
City Educational Center vs. NLRC (G.R. No. 96779, 10 November 1993,
227 SCRA 655) that "in ascertaining the total amount of backwages
payable to them (employees), SC went back to the rule prior to the
Mercury Drug rule that the total amount derived from employment
elsewhere by the employee from the date of dismissal up to the date of
reinstatement, if any, should be deducted therefrom." The rationale for
such ruling was that, the earning derived elsewhere by the dismissed
employee while litigating the legality of his dismissal, should be deducted
from the full amount of backwages which the law grants him upon
reinstatement, so as not to unduly or unjustly enrich the employee at the
expense of the employer.
Issue:
Whether or not the ruling in Pines City v NLRC must still be observed.
Answer:
No. SC categorically concluded the final computation of the backwages
after reconsidering the ruling mentioned in Pines City v. NLRC case.
Those who were illegally dismissed are entitled to the payment of full
backwages.
Page
125
Reasoning:
With the evident legislative intent as expressed in Rep. Act No. 6715,
above-quoted, backwages to be awarded to an illegally dismissed
employee, should not, as a general rule, be diminished or reduced
by the earnings derived by him elsewhere during the period of
his illegal dismissal. The underlying reason for this ruling is that the
employee, while litigating the legality (illegality) of his dismissal, must still
earn a living to support himself and family, while full backwages have to
be paid by the employer as part of the price or penalty he has to pay for
illegally dismissing his employee.
The clear legislative intent of the amendment in Rep. Act No. 6715 is to
give more benefits to workers than was previously given them under the
Mercury Drug rule or the "deduction of earnings elsewhere" rule. Thus, a
closer adherence to the legislative policy behind Rep. Act No. 6715 points
to "full backwages" as meaning exactly that, i.e., without deducting from
backwages the earnings derived elsewhere by the concerned employee
during the period of his illegal dismissal.
Therefore, in accordance with R.A No. 6715, petitioners were entitled to
their full backwages, inclusive of allowances and other benefits or their
monetary equivalent, from the time their actual compensation was
withheld from them up to the time of their actual reinstatement. As to
reinstatement of petitioners, SC has already ruled that since reinstatement
is no longer feasible, because the company would be unjustly prejudiced
by the continued employment of petitioners who at present are overage, a
separation pay equal to one-month salary granted to them in the Labor
Arbiter's decision was in order and, therefore, affirmed in the Court's
decision of 15 March 1996. Furthermore, since reinstatement in this case
is no longer feasible, the amount of backwages shall be computed from
the time of their illegal termination on 25 June 1990 up to the time of
finality of this decision.
Holding:
ACCORDINGLY, private respondent's Motion for Reconsideration, dated 10
April 1996, is DENIED.
Page
126
NO RETROACTIVITY
MARANAW HOTELS AND RESORTS CORPORATION (CENTURY
PARK SHERATON MANILA), petitioner,
vs.
COURT OF APPEALS, HON. SANTIAGO O. TAADA (Voluntary
Arbitrator) and GREGORIO GALE, respondents.
Facts:
For blurting out offensive remarks against his supervisors in their absence
but promptly reported to them, private respondent Gregorio Gale, a
roomboy at the five-star Century Park Sheraton Manila owned and
operated by petitioner Maranaw Hotels and Resorts Corporation, was
dismissed for "discourtesy and use of disrespectful and impolite language
against a superior which constitutes gross misconduct."
Gregorio Gale subsequently instituted a complaint for illegal dismissal
which, conformably with their collective bargaining agreement, was then
submitted to retired Judge Santiago O. Taada for voluntary arbitration.
On 13 December 1989, after hearing and the submission of the evidence,
position papers and memoranda of the parties, Voluntary Arbitrator
Taada rendered a decision pertinent portions of which read
After going over the evidence adduced by the parties, the Arbitrator finds
no evidence that there was fighting, nor challenging to a fight, no
assaulting nor intimidation of co-employees or supervisors within the hotel
premises. What was established as per evidence on record was more of
discourtesy, and use of disrespectful and impolite language uttered by
complainant which falls under Section 2, Rule VI of the Rules of the Hotel
and carries the penalty of 7 days of suspension for first offense. The
evidence shows it was a first offense.
IN VIEW OF THE FOREGOING, the Arbitrator finds and so holds that
complainant Gregorio Gale has violated Section 2, Rule VI of the Rules of
the Hotel and orders his suspension for a period of seven (7) days.
However, as per admission of the parties, Mr. Gale has already been
dismissed. In case complainant Mr. Gale has been out of his job as
roomboy of the Hotel for more than that period of 7 days, his immediate
reinstatement is hereby ordered with right to collect his share in the
service charge.
Issue: Is the respondent entitled to full back wages?
Page
127
Held: This is not to overlook the passage of R.A. 6715, amending among
others Art. 279 of the Labor Code, which now provides
Art. 279. Security of Tenure. In cases of regular employment, the
employer shall not terminate the services of an employee except for just
cause or when authorized by this Title. 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. (Emphasis supplied).
But as We resolved in Sealand Service, Inc. v. NLRC
[I]t may be mentioned in passing that the amendatory provision in R.A.
6715, which entitled an employee who is unjustly dismissed from work to
his full backwages inclusive of allowance, and to his other benefits or their
monetary equivalent computed from the time his compensation was
withheld from him up to the time of actual reinstatement has no
application in the case at bar, said amendment having taken effect on
March 21, 1989, after the decision sought to be enforced in the case had
become final and executory. We have ruled in Lantion, et al. v. NLRC, et
al., that said amendment has no retroactive application.
In the case before Us, since the illegal dismissal of private respondent
occurred on 4 December 1987, or before R.A. 6715 took effect on 21
March 1989, he is entitled only to three (3) years' backwages, inclusive of
all allowances and other benefits, without deducting any renumerations he
may have received as member of the Armed Forces of the Philippines, or
from any other employment, and not to his full wages from the time he
was dismissed up to the present. Certainly, private respondent cannot be
allowed to receive salary from petitioner for the whole duration that he
was not working as roomboy by reason of his unjust dismissal, while at
the same time, draw compensation as member of the Armed Forces of the
Philippines which would not have been possible had he continued to work
for petitioner; for that would be unjust enrichment. Consequently, if
private respondent already received more than what he is entitled to in
accordance herewith, he should reimburse petitioner such amount in
excess of what is due him; otherwise, petitioner should make good the
corresponding deficiency.
Page
128
REINSTATEMENT WITHOUT BACKWAGES
An illegally dismissed employee is entitled to either reinstatement, if viable, or
separation pay if reinstatement is no longer viable, and backwages. In certain cases,
however, the Court has ordered the reinstatement of the employee without backwages
considering the fact that (1) the dismissal of the employee would be too harsh a
penalty; and (2) the employer was in good faith in terminating the employee.
For instance, in the case of Cruz v. Minister of Labor and Employment the Court ruled
as follows:
The Court is convinced that petitioner's guilt was substantially established.
Nevertheless, we agree with respondent Minister's order of reinstating petitioner
without backwages instead of dismissal which may be too drastic. Denial of backwages
would sufficiently penalize her for her infractions. The bank officials acted in good faith.
They should be exempt from the burden of paying backwages. The good faith of the
employer, when clear under the circumstances, may preclude or diminish recovery of
backwages. Only employees discriminately dismissed are entitled to backpay. x x x
Likewise, in the case of Jtogon-Suyoc Mines, Inc. v. National Labor Relations
Commission, the Court pronounced that "[t)he ends of social and compassionate justice
would therefore be served if private respondent is reinstated but without backwages in
view of petitioner's good faith."
Page
129
STRAINED RELATIONSHIP BAR TO REINSTATEMENT
Under the existing law, an employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights. It must be emphasized,
though, that the has declared that there are specific circumstances obtaining where
reinstatement is not practicable remedy, as when the relations between the employer
and the employee have been so severely strained that it is no longer fitting to order
reinstatement or when the employee decides not to be reinstated. (Cabatulan vs. Buat,
et al., GR no. 147142, Feb 12, 2005)
When reinstatement to their former position is no longer possible under the
circumstances, an award equivalent to three years backwages plus separation pay to
compensate for their illegal separation is thus proper.
The circumstances prevailing in this case do not warrant the reinstatement of the
illegally dismissed private respondents. The antagonism and imputations of bad faith
caused a severe strain in the relationship between petitioner and private respondents,
that a more equitable disposition would be an award of separation pay, in lieu of
reinstatement, plus backwages for not more than three years years without qualification
or deduction. (China City Restaurant Corporation vs. NLRC, GR no. 97196, Jan 22,
1993)
ATTORNEYS FEES
The award of attorneys fee is warranted pursuant to Article 111 of the Labor Code. Ten
(10%) percent of the total award is usually the reasonable amount of attorneys fees
awarded. It is settled that where an employee was forced to litigate and, thus, incur
expenses to protect his rights and interest, the award of attorneys fees is legally and
morally justifiable. (Lambert Pawnbrokers and Jewelry Corporation v. Binamira, G.R. No.
170464, July 12, 2010, 624 SCRA 705)
Page
130
ART. 285. TERMINATION BY EMPLOYEE
An employee may terminate:
1. without just cause- by serving a written notice on the employer at least one
month in advance. The employer upon whom no such notice was served may hold
the employee liable for damages.
2. With just cause - an employee may put an end to his employment without serving
any notice on the employer for any of the following just causes:
a. Serious insult by the employer or his representative on the hour and person
of the employee;
RESIGNATION
Is the voluntary act of the employees who are compelled by personal reasons to
dissociate themselves from their employment.
RESIGNATION NOTICE
-The employee must serve a written notice on the employer at least one (1) month
in advance.
Page
131
Rationale: to afford the employer the opportunity to find replacement for the
resigning employee, at least within the 1 month period.
RESIGNATION PAY
- An employee who voluntarily resigns from his work is not entitled to separation
pay. There is no provision in the Labor Code which grants separation pay to
voluntarily resigning employees.
CONSTRUCTIVE DISMISSAL
Is defined as quitting because continued employment is rendered impossible,
unreasonable or unlikely, as an offer involving demotion in rank and a diminution in
pay. (jo Cinema corp. vs. Abellana GR no. 132837, june 28, 2001)
FORCED RESIGNATION
-the employee is made to do or perform an involuntary act submission or tender
of resignation meant to validate the action of management in inveigling, luring or
influencing or practically forcing the employee to effectuate the termination of
employment, instead of doing the termination himself.
Page
132
ART. 286- WHEN EMPLOYMENT NOT DEEMED TERMINATED:
1. Bona fide suspension of the operation of a business or undertaking for a period
not exceeding six (6) months; or
2. Fulfillment by the employee of a military or civic duty.
SUSPENSION OF OPERATIONS
-There is no termination of employment during the bona fide suspension of business
operations. The establishment simply temporarily suspends its operations for
legitimate and valid reasons, including but not limited to, serious financial losses or
business reverses, force majeure (fire, flood, typhoon, etc.), failure to obtain a
permit or license to operate, or due to a lawful order by a competent authority.
FLOATING STATUS
-Floating status means an indefinite period of time when one does not receive any
salary or financial benefit provided by law (Mojar et al. vs Agro Commercial Security
Service Agency Inc., et al., G.R. No. 187188).
Page
133
Held:
The transfer of an employee involves a lateral movement within the
business or operation of the employer, without demotion in rank,
diminution of benefits or, worse, suspension of employment even if
temporary. The recall and transfer of security guards require
reassignment to another post and are not equivalent to their placement
on floating status. Off-detailing security guards for a reasonable period
of six months is justified only in bona fide cases of suspension of
operation, business or undertaking.
The Client did not, as it could not, illegally dismiss the complainants.
Thus, it should not be held liable for separation pay and back wages. But
even if the Client is not responsible for the illegal dismissal of the
complainants, it is jointly and severally liable with the Agency for the
complainants service incentive leave pay.
As the indirect employer, the Client is jointly and severally liable with the
contractor for the workers wages, in the same manner and extent that it
is liable to its direct employees. This liability of the Client covers the
payment of the service incentive leave pay of the complainants during the
time they were posted at the Cebu branch of the Client. As service had
been rendered, the liability accrued, even if the complainants were
eventually transferred or reassigned.
Page
134
In the early part of 1986, petitioner's service contracts with various
corporations and government agencies to which private respondents
were previously assigned had been terminated generally due to the
sequestration of the said offices by the Presidential Commission on
Good Government. Accordingly, many of the private respondents were
placed on "floating status" on September 16, 1986. A number of them
had been put on that status even earlier.
Hence, the herein petition alleging that the petitioner was denied due
process of law by the NLRC and it committed a grave abuse of
discretion in considering private respondents as employees of
petitioner, in ruling that the "floating status" of private respondents
amounted to an illegal dismissal, and in causing the execution of the
judgment pending a complete and full adjudication of the issues.
Page
135
six (6) months, they may be considered to have been illegally
dismissed from the service. Thus, they are entitled to the
corresponding benefits for their separation.
ART. 302(287) RETIREMENT. Any employee may be retired upon reaching the
retirement age established in the collective bargaining agreement or other applicable
employment contract.
In case of retirement, the employee shall be entitled to receive such retirement benefits
as he may have earned under existing laws and any collective bargaining agreement
and other agreements: Provided, however, That an employee's retirement benefits
under any collective bargaining and other agreements shall not be less than those
provided herein.
In the absence of a retirement plan or agreement providing for retirement benefits of
employees in the establishment, an employee upon reaching the age of sixty (60) years
or more, but not beyond sixty-five (65) years which is hereby declared the compulsory
retirement age, who has served at least five (5) years in the said establishment, may
retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month
salary for every year of service, a fraction of at least six (6) months being considered as
one whole year.
Unless the parties provide for broader inclusions, the term one-half (1/2) month salary
shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the
cash equivalent of not more than five (5) days of service incentive leaves.
An underground mining employee upon reaching the age of fifty (50) years or more,
but not beyond sixty (60) years which is hereby declared the compulsory retirement
age for underground mine workers, who has served at least five (5) years as
underground mine worker, may retire and shall be entitled to all the retirement benefits
provided for in this Article.
Retail, service and agricultural establishments or operations employing not more than
ten (10) employees or workers are exempted from the coverage of this provision.
Violation of this provision is hereby declared unlawful and subject to the penal
provisions provided under Article 288 of this Code.
Nothing in this Article shall deprive any employee of benefits to which he may be
entitled under existing laws or company policies or practices."
Kinds of Retirement:
1. Compulsory as required by law and contributory in nature.
2. Through Agreement of Employer and Employees in CBA or other agreements.
Page
136
3. Expressly announced in the Company policy.
Page
137