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LABOR
LAW
Ada D. Abad
Dean, Adamson University College of Law
A. GENERAL CONCEPTS
1. Employer-Employee relationship
Of these four tests however, the most important test is the element of
control, which has been defined as [MEMORIZE THIS] one where
the employer has reserved the right to control not only the work
to be achieved, but the manner and method by which such work
is to be achieved.. (LVN Pictures vs. LVN Musicians Guild, 1 SCRA
132).
Raul Locsin et. al. vs PLDT, G.R. No. 185251, 02 October 2009. --
Locsin and Tomaquin were security guards of SSCP, a security
agency, who were assigned to PLDT as principal. When the security
service agreement between PLDT and SSCP ended, Locsin and
Tomaquin were allowed to continue working for one more year; their
wages were still however paid by SSCP. Thereafter, they were
eventually terminated, for which reason, Locsin and Tomaquin filed
this illegal termination case plus monetary claims.
Distinguish between rules that fix methodology vs. rules that are
mere guidelines.
But this is not to say that ALL insurance agents are NOT employees
of the insurance company. As the Supreme Court clarified in the case
of Tongko vs. Manufacturers' Life Insurance Company (Phils.) Inc.
(G.R. No. 167622, 29 June 2010, En Banc; VELASCO PONENTE),
the Insular Life ruling above was tempered with the qualification that
had there been evidence that the company promulgated rules or
regulations that effectively controlled or restricted an insurance
agent's choice of methods or the methods themselves in selling
insurance, an employer-employee relationship would have existed. In
other words, the Court in Insular in no way definitively held that
insurance agents are not employees of insurance companies, but
rather made the same on a case-to-case basis.
GOOD EXAMPLE: Indophil Textile Mills Vs. Adviento, G.R. No. 171212, 04
August 2014
Issue: Can the Union validly claim proportionate share of service charges from non-
sales (example: free benefits from hotel and credit cards; and similar arrangements)?
Answer: NO. Hotel does not have any obligation to the Union, inasmuch as their claims
arises from non-sale transactions like Westin Gold Cards Revenue and Maxi Media
Barter to be negotiated contracts or contracts under special rates, and the entries
Business Promotions and Gift Certificates as contracts that did not involve a sale of
food, beverage, etc. Jurisprudence settles that a CBA is the law between the contracting
parties who are obliged under the law to comply with its provisions. Thus, if the terms of
the CBA are plain, clear and leave no doubt on the intention of the contracting parties, the
literal meaning of its stipulations, as they appear on the face of the contract, shall
prevail. Only when the words used are ambiguous and doubtful or leading to several
interpretations of the parties agreement that a resort to interpretation and construction is
called for.
Philippine Journalist Inc. vs.Journal Employees Union, G.R. No. 192601, 26 June 2013
CBA provision states:
SECTION 4. Funeral/ Bereavement Aid. The COMPANY agrees to grant a
funeral/bereavement aid in the following instances:
a. Death of a regular employee in line of duty P50,000
b. Death of a regular employee not in line of duty P40,000
c. Death of legal dependent of a regular employee P15,000.
Issue: In the availment of funeral and bereavement aid under the CBA, may the Company
interpret legal dependent in accordance with the SSS definition of beneficiary and
hence, refuse payment of the benefit?
Citing statutory definitions, the Supreme Court concluded that the civil status of the
employee as either married or single is not the controlling consideration in order that a
person may qualify as the employees legal dependent. What is rather decidedly
controlling is the fact that the spouse, child, or parent is actually dependent for support
upon the employee.
The free will of the management to conduct its own affairs to achieve its purpose cannot
be denied, PROVIDED THAT THE SAME IS EXERCISED:
7. Paradigm shift towards mutual cooperation - It is high time that employer and
employee cease to view each other as adversaries and instead recognize that there is a
symbiotic relationship, wherein they must rely on each other to ensure the success of the
business. (Toyota Motor Phils. Workers vs. NLRC, 537 SCRA 171)
B. MANAGEMENT PREROGATIVES:
2. 2013-2015 CASES:
G.J.T. Rebuilders Machine Shop et al. vs. Ricardo Ambos et. al., G.R. No. 174184, 28
January 2015. Although the employer may close its business as an exercise of
management prerogative that courts cannot interfere with, it failed to sufficiently prove
its alleged serious business losses. Thus, it must pay respondents their separation pay
equivalent to one-month pay or at least one-half-month pay for every year of service,
whichever is higher.
Mirant Philippines vs. Joselito A. Caro, G.R. No. 181490, 23 April 2014. While the
adoption and enforcement by petitioner corporation of its Anti-Drugs Policy is
recognized as a valid exercise of its management prerogative as an employer, such
exercise is not absolute and unbridled. In the exercise of its management prerogative, an
employer must therefore ensure that the policies, rules and regulations on work-related
activities of the employees must always be fair and reasonable and the corresponding
penalties, when prescribed, commensurate to the offense involved and to the degree of
the infraction. The Anti-Drugs Policy of Mirant fell short of these requirements.
Royal Plant Workers Union vs. Coca-Cola Bottlers Phils., G.R. 198783, 15 April 2013 -
- Question: Is the decision of Coca-Cola Bottlers to take out the chairs of employees in
an assembly line in exchange for additional periods of rest/breaks, a valid exercise of
management prerogatives, or is it a diminution of benefit which cannot be withdrawn
without employees consent?
The rights of the Union under any labor law were not violated. There is no law that
requires employers to provide chairs for bottling operators. The CA correctly ruled that
the Labor Code, specifically Article 132 thereof, only requires employers to provide
seats for women. No similar requirement is mandated for men or male workers. It must
be stressed that all concerned bottling operators in this case are men.
C. KINDS OF EMPLOYMENT
1. REGULAR EMPLOYEES those who are hired for activities which are necessary
or desirable in the usual trade or business of the employer.
2015 CASES:
Nelson Begino, et al., vs. ABS-CBN , etc., G.R. No. 199166, 20 April 2015. -- The
Court finds that, notwithstanding the nomenclature of their Talent Contracts and/or
Project Assignment Forms and the terms and conditions embodied therein,
petitioners are regular employees of ABS-CBN. As cameraman/editors and
reporters, petitioners were performing functions necessary and essential to ABS-
CBNs business of broadcasting television and radio content. It matters little that
petitioners services were engaged for specified periods for TV Patrol Bicol and that
they were paid according to the budget allocated therefor. Respondents repeated
rehiring of petitioners for its long-running news program positively indicates that the
latter were ABS-CBNs regular employees.
Romeo Basau, et al., vs. Coca-Cola Bottlers Philippines, G.R. No. 174365-66, 04
February 2015. -- Route helpers are regular employees; their nature of work are
necessary and desirable in the usual trade or business of the employer; hence,
entitled to security of tenure.
Universidad de Sta. Isabel vs. Sambajon, G.R. Nos. 196280 & 196286, 02 April
2014 . It is the Manual of Regulations for Private Schools, and not the Labor Code,
that determines whether or not a faculty member in an educational institution has
attained regular or permanent status.
Abbot Laboratories, Philippines, et al., vs. Pearlie Ann Alcaraz, G.R. No. 192571,
22 April 2014. En Banc. - If a probationary employee was apprised of the
performance standards for his regularization, his failure to perform the duties and
responsibilities which have been clearly made known to him constitutes a justifiable
basis for a probationary employees non-regularization. The determination of
adequate performance is not in all cases, measurable by quantitative specification.
It also hinges on the qualitative assessment of the employees work; by its nature,
this largely rests on the reasonable exercise of the employers management
prerogative.
required for his regularization, the former is not precluded from dismissing
the latter. The rule is that when a valid cause for termination exists, the
2.1 Burden of proof upon employer to show that the employee failed to
qualify as a regular employee in accordance with reasonable
standards made known to him at the time of engagement.
3. TERM EMPLOYEES those who are hired for a specific period, the arrival of the
date specified in the contract of which automatically terminates the employer-
employee relationship. (Brent School vs. NLRC, 181 SCRA 702 [1989], reiterated in
AMA Computer Paranaque vs. Austria, 538 SCRA 438 [November 2007]).
3.1 A contract of employment for a definite period terminates by its own terms at the
end of such period
3.2 The decisive determinant in term employment should not be the activities that
the employee is called upon to perform, but the day certain agreed upon by the
parties for the commencement and the termination of their employment relation.
3.3 Criteria for fixed term employment contracts so that the same will not circumvent
security of tenure:
4.2 Indicators of Project Employment is found in Section 2.2(e) and (f) of DOLE
Department Order No. 19, Series of 1993, entitled Guidelines Governing the
Employment of Workers in the Construction Industry, to wit:
2.2 Indicators of project employment. - Either one or more of the following
circumstances, among others, may be considered as indicators that an employee
is a project employee.
Ma. Charito C. Gadia, et al. vs. Sykes Asia, Inc. et al., G.R. No. 209499, 28
January 2015. - Requisites for an employee to be considered project-based BPO
employee: (a) the employee was assigned to carry out a specific project or
undertaking; and (b) the duration and scope of which were specified at the time
they were engaged for such project.
In this case, Gadia is properly a project employee: (a) Sykes BPO informed the
petitioner of their employment status at the time of their engagement, as
evidenced by their employment contracts which provided that they were hired in
connection with the Alltel Project, and that their positions were project-based
and as such is co-terminus to the project; and (b) Sykes duly submitted an
Establishment Employment Report and an Establishment Termination Report to
the DOLE Makati Field Office regarding the cessation of the Alltel Project and
the list of employees affected thereby. Case law deems such submission as an
indication that the employment was indeed project-based.
In this case, records are bereft of any evidence to show that respondents were
made to sign employment contracts explicitly stating that they were going to be
hired as project employees, with the period of their employment to be co-
terminus with the original period of Omnis service contract with the Quezon
City government. Neither is petitioners allegation that respondents were duly
apprised of the project-based nature of their employment supported by any other
evidentiary proof. Thus, the logical conclusion is that respondents were not
clearly and knowingly informed of their employment.
Universal Robina Sugar Milling Corporation and Rene Cabati, G.R. No. 186439. 15
January 2014. -- The respondents are neither project, seasonal nor fixed-term
employees, but regular seasonal workers of URSUMCO.xxx THEIR SEASONAL
WORK, HOWEVER, DOES NOT DETRACT FROM CONSIDERING THEM IN
REGULAR EMPLOYMENT since in a litany of cases, this Court has already
settled that seasonal workers who are called to work from time to time and are
temporarily laid off during the off-season are not separated from the service in said
period, but are merely considered on leave until re-employment
Hacienda Cataywa, et al. vs. Rosario Lorezo, G.R. No. 179640, 18 March 2015. --
Farm workers generally are seasonal workers. Seasonal employees may become
regular employees when they are called to work from time to time. They acquire
regular employment because of the nature of their work, not because of the length
of time they have worked. However, seasonal workers who work only for one
season, cannot become regular employees. (Hacienda Fatima vs. NFSW, 444 Phil.
587[2003].) Respondent performed hacienda work, such as planting sugarcane
point, fertilizing, weeding, replanting dead sugarcane fields and routine
miscellaneous hacienda work. Thus, he is considered a regular seasonal worker.
Since cultivation of sugarcane is only for six months, he cannot be considered a
regular employee during the months when there is no cultivation.
6. CASUAL EMPLOYEES those who are hired to perform work or service which is
merely incidental to the business of the employer. Any casual employee who has
rendered at least one (1) year of service, whether it be continuous or broken, shall
be considered a regular employee with respect to the activity for which he is
employed, and his employment shall continue while such activity exists.
FRAMEWORK:
Exception to exception:
Probationary employees allowed to work after probn. period
Casual workers rendering service for more than one year
Term employee allowed to work after term has expired/ended
Project employee allowed to work after project without any contract; or project
employee allowed to work project after project but no termination reports.
December 2014 citing DOLE D.O. 18-A [2011], sec. 5 (b); Sonza vs. ABS-CBN,
supra, see page __ hereof. -- There are different kinds of independent contractors:
those engaged in legitimate job contracting, and those who have unique skills and
talents that set them apart from ordinary employees. Since no employer-employee
exist between independent contractors and their principals, their contracts are
governed by the Civil Code provisions on contracts and other applicable laws.
ADAS NOTE: In the above 2014 case of Fuji Television Network vs. Arlene Espiritu, the
Supreme Court made an exhaustive distinction between Independent Contractor vs. Fixed-
term employment and/or regular employment. The main factor that distinguishes
independent contracting from fixed-term or regular employment is that of CONTROL.
Where the alleged employer has no actual control over the conduct of the work of the
complainant, then there is no employer-employee relationship. However, if control over
the conduct of work can be established, then this is one of fixed-term or regular
employment depending on the circumstances of the case..
For labor-only to exist, Sec. 5 of Department Order No. 18-02 requires any
two of the elements to be present, viz.:
OR
4.1 Job contracting is a trilateral work arrangement arising out of two different
contracts:
But note that there should be NO CONTROL between Principal and Agency or
Principal and employees of the agency; otherwise, an employer-employee
relationship is established in either case.
4.2 Contracting out is valid as an exercise of management prerogative for as long
as it complies with the limits and standards provided by the Labor Code.
Essentially, there must be proof of capitalization, and of control over his
employees on the part of the independent contractor. The law allows
contracting and subcontracting involving services but closely regulates these
activities for the protection of workers. Thus, an employer can contract out part
of its operations, provided it complies with the limits and standards provided in
the Code and in its implementing rules. xxx In strictly laymans terms, a
manufacturer can sell its products on its own, or allow contractors,
independently operating on their own, to sell and distribute these products in a
manner that does not violate the regulations. From the terms of the above-
quoted D.O. 18-02, the legitimate job contractor must have the capitalization
and equipment to undertake the sale and distribution of the manufacturers
products, and must do it on its own using its own means and selling
methods.xxx [COCA-COLA BOTTLERS VS. DELA CRUZ ET AL, G.R.
No. 184977, 07 December 2009.
4.3 The right of management to outsource parts of its operations is within the
purview of management prerogative, but said right may limited by law, CBA
provisions or the general principles of fair play and justice. Goya Inc. vs. Goya
Employees Union FFW, G.R. No. 170054 21 January 2013.
4.4 The law and its implementing rules recognize that management may rightfully
exercise its prerogatives in determining what activities may be contracted out,
REGARDLESS OF WHETHER SUCH ACTIVITY IS PERIPHERAL OR
CORE IN NATURE. (Alviado et. al. vs. Procter & Gamble, and Promm
Gemm, G.R. No. 160506, 09 March 2010, Del Castillo, J).
4.6 General Rule: The DOLE certification simply gives rise to a presumption that
the contractor is a legitimate one. It does NOT prohibit the Supreme Court, in
the exercise of its plenary judicial powers of review, to determine sufficiency of
evidence other than the certification, in ruling that one is, or is not, an
independent contractor. RAMY GALLEGO VS. BAYER PHILS. G.R. No.
179807, 31 July 2009,
4.7 IMPORTANT VELASCO CASE: Fonterra Brands Phils. Vs. Largado and
Estrellado, G.R. No. 205300, 18 March 2015
Answer: NO. Not regular ees. As correctly held by the Labor Arbiter and the
NLRC, the termination of respondents employment with Zytron was brought
about by the cessation of their contracts with the latter. We give credence to the
Labor Arbiters conclusion that respondents were the ones who refused to renew
their contracts with Zytron, and the NLRCs finding that they themselves
acquiesced to their transfer to A.C. Sicat.
FAIR AND REASONABLE VALUE shall not include any profit to the employer,
or to any person affiliated with the employer.
EQUAL PAY FOR EQUAL WORK. -- Employees who work with substantially
equal qualifications, skill, effort and responsibility, under similar conditions should
be paid similar salaries (International School Alliance of Educators vs. Quisumbing,
GR No.128845, June 1, 2000).
Art. 1706. Withholding of the wages, except for a debt due, shall not be made by the
employer.
Art. 1707. The laborers wages shall be a lien on the goods manufactured or the
work done.
Art. 1708. The laborers wages shall not be subject to execution or attachment except
for debts incurred for food, shelter, clothing, and medical attendance.
Art. 1709. The employer shall neither seize nor retain any tool or other articles
belonging to the laborer.
Hours of work: Hours of worked shall include: (a) all time during which an
employee is required to be on duty or to be at the prescribed workplace, and
(b) all time during which an employee is suffered or permitted to work. The
normal working hours shall be no more than eight (8) hours a day. Meal
Holiday pay. -- The employee is entitled to the payment of his regular daily
basic wage (100%) during said holidays, even if the worker did not report
for work on said days; PROVIDED THAT HE WAS PRESENT OR WAS
ON LEAVE OF ABSENCE WITH PAY ON THE WORK DAY
IMMEDIATELY PRECEDING THE HOLIDAY. If the employee was
suffered to work during the said holidays, they will be entitled to payment of
holiday premium of 200% of his basic wage (100% of basic wage PLUS
100%).
Nightshift differential pay: plus 10% of the basic/regular rate for work
between 10PM 6AM
EXCEPTIONS:
2015 CASE: Emer Milan, et al. vs. NLRC, et al., G.R. No. 202961, February
04, 2015. -- An employer can withhold terminal pay and benefits pending the
employees return of its properties. An employer is allowed to withhold
terminal pay and benefits pending the employees return of its properties. The
return of the propertys possession became an obligation or liability on the
part of the employees when the employer-employee relationship ceased. The
NLRC has jurisdiction to determine, preliminarily, the parties right over a
property, when it is necessary to determine an issue related to rights or claims
arising from an employer-employee relationship.
Requisites for voluntary employer practice such that the same cannot be
unilaterally withdrawn anymore: (a) It should have been practiced over a
long period of time; and (b) It must be shown to have been consistent and
deliberate. (Sevilla Trading Company vs. Semana, 428 SCRA 239 [2004],
citing Globe Mackay Cable and Radio Corp. vs. NLRC, 163 SCRA 71
[1988].
The Supreme Court has not laid down any specific rule requiring a specific
minimum number of years. Rather, the test of long practice has been
enunciated thus: where the company agreed to continue giving a benefit
knowing fully well that said employees are not covered by the law
requiring payment of said. (Oceanic Pharmacal Employees Union (FFW)
vs. Inciong, 94 SCRA 270 [1979]).
giving of the benefit is done over a long period of time, and that it has
been made consistently and deliberately. Jurisprudence has not laid down
employer agreed to continue giving the benefit knowing well that the
2.1 How much: 1/12th of the basic salary of an employee within a calendar year.
2.2 COVERAGE
1. Government and any of its political subdivisions, including GOCCs with original
charters. (If GOCC without original charter, then considered part of private
sector)
2. Employers already paying their employees 13th month pay or more in a calendar
year or its equivalent at the time of issuance of PD 851;
4. Distressed employers:
a. currently incurring substantial losses or
b. in the case of non-profit institutions and organizations, where their
income, whether from donations, contributions, grants and other
earnings from any source, has consistently declined by more than forty
(40%) percent of their normal income for the last two (2) years, subject
to the provision of Section 7 of this issuance;
5. Employers of those who are paid on commission, boundary, or task basis, and
those who are paid a fixed amount for performance of a specific work,
irrespective of the time consumed in the performance thereof.
Exception: Where the workers are paid on a piece-rate basis, in which case the
employer shall grant the required 13th month pay to such workers.
Piece Rate employees who are paid a standard amount for every
piece or unit of work produced that is more or less regularly
replicated, without regard to the time spent in producing the same.
3. BONUS
3.1 Nature of a bonus: a prerogative, not an obligation. -- The matter of giving a bonus
over and above the workers lawful salaries and allowances is entirely dependent on
the financial capability of the employer to give it. (Traders Royal Bank vs. NLRC,
189 SCRA 274 [1990]).
a. If the commission form part of the employees basic salary, then this will
likewise be included in the computation of 13th month pay. (Philippine
Duplicators, Inc. vs. NLRC, 241 SCRA 380 [1995]).
4. HOURS OF WORK.
4.1 Hours of worked shall include: (a) all time during which an employee is required to
be on duty or to be at the prescribed workplace, and (b) all time during which an
employee is suffered or permitted to work. (Art. 84, Labor Code; See also Rada vs.
NLRC, 205 SCRA 69 [1992].)
4.2 Rest period of short duration during working hours shall be counted as hours
worked. (Art. 84, Labor Code.) Example: coffee break of 15 minutes; meal period
of less than one hour, e.g., 30 minutes.
4.3 Exemptions. (See Art. 82, Labor Code.) . -- The following employees are not
covered by the Labor Code provisions on hours of work:
a) Government employees;
b) Managerial employees (International Pharmaceuticals, Inc. vs. NLRC, 287
SCRA 213 [1998].);
c) Field Personnel;
d) Members of the employer who are dependent upon him for support;
e) Domestic helpers and persons in the personal service of another;
f) Workers who are paid by results, e.g., piece workers. (Red V Coconut
Products, Ltd. vs. CIR, 17 SCRA 553 [1966], citing Lara vs. del Rosario, 94
Phil. 780) (Note: Reason is that workers who are paid by the result are
compensated on the basis of the work completed, and NOT in respect of the
time spent working on it).
5.1 Domestic helper or househelpers or domestic servant defined. -- shall refer to any
person, whether male or female, who renders services in and about the employers
home and which services are usually necessary or desirable for the maintenance
and enjoyment thereof, and ministers exclusively to the personal comfort and
enjoyment of the employers family.
5.2 Homeworker, defined.-- one who performs in or about his home any processing
of goods or materials, in whole or in part, which have been furnished directly or
indirectly, by an employer and thereafter to be returned to the latter. (Book III,
Rule XIV, Section 1 of the Omnibus Rules Implementing the Labor Code.)
2) It also makes explicit the employers duty to pay and remit SSS, Philhealth and ECC
premiums.
6.1 GENERAL RULE: Employment of any child below fifteen (15) years of age is
prohibited
EXCEPT:
1. When he works directly under the sole responsibility of his parents or guardian,
and his employment does not in any way interfere with his schooling. The
following conditions must be met:
The employment does not endanger the childs life, safety, health and morals;
The employment does not impair the childs normal development;
The employer parent or legal guardian provides the child with the primary
and/or secondary education prescribed by the Department of Education
6.2 NOTE: In the above-exceptional cases where any such child may be employed, the
employer shall first secure, before engaging such child, a work permit from the
Department of Labor and Employment which shall ensure observance of the above
requirements. (Rep. Act. No. 9231).
ON HAZARDOUS WORK. -- Any person between fifteen (15) and eighteen (18)
years of age may be employed for NON-HAZARDOUS WORK for such number of
hours and such periods of the day as determined by the Secretary of Labor in
appropriate regulations. No such prohibition if eighteen (18) years old and above.
A child below 15 Allowed to work for not more than 20 hours a week.
Provided, the work shall not be more than 4 hours
in a day.
Shall not be allowed to work between 8pm and 6am
of the following day.
A child above 15 Shall not be allowed to work for more than 8 hours
years of age but a day, and in no case beyond 40 hours a week.
below 18 Shall not be allowed to work between 10 pm and
6am the following day
7.2 Learners are persons hired as trainees in semi-skilled and other industrial occupations
which are non-apprenticeable and may be learned through practical training on the
job in a relatively short period of time which shall not exceed three months.
APPRENTICESHIP LEARNERSHIP
COMITMT
TO HIRE At option of At option of learner
employer
WAGES
Must always be paid; 75%
DOLE May be paid or of minimum
8. DISABLED WORKERS
Qualified disabled employees shall be subject to the same terms and conditions
of employment and the same compensation, privileges, benefits, fringe
benefits, incentives or allowances as a qualified able-bodied person.
1. Private entities that employ disabled persons who meet the required skills or
qualifications either as regular employee, apprentice or learner, shall be entitled
to an additional deduction from their gross income, equivalent to 25% of the
total amount paid as salaries and wages to disabled persons; Provided, that the
following are complied with:
a. Presentation of proof certified by DOLE that disabled persons are
under their employ; and
b. Disabled employee is accredited with DOLE and DOH as to his
disability, skills and qualifications.
EXCEPTION:
Where the company provides for a Retirement Plan with earlier retirement age,
then the companys Retirement Plan will apply
EXCEPTION:
Where the company provides for a Retirement Plan with better benefits, then the
companys Retirement Plan will apply
9.3 CASES:
General Milling Corporation vs. Viajar, G.R. No. 181738, 30 January 2013,
Citing Quevedo vs. Benguet Electric Cooperative, Inc., 599 SCRA 438
[2009]. -- While termination of employment and retirement from service are
common modes of ending employment, they are mutually exclusive, with
varying judicial bases and resulting benefits. Retirement from the service is
contractual (i.e. based on the bilateral agreement of the employer and
employee), while termination of employment is statutory (i.e. governed by
the Labor Code and other related laws as to its grounds, benefits and
procedure. The benefits resulting from termination vary, depending on the
cause. For retirement, Article 287 of the Labor Code gives leeway to the
parties to stipulate above a floor of benefits.
2015 CASE: Zenaida Paz vs. Northern Tobacco Redrying Co., Inc., et al.,
G.R. No. 199554, 18 February 2015. -- If optional retirement is
involuntary, the employee shall be deemed to be illegally dismissed.
ANSWER: YES! By carrying over the same stipulation in the present CBA,
both PAL and ALPAP recognized that the companys effort in sending pilots
for training abroad is an investment which necessarily expects a reasonable
return in the form of service for a period of at least three (3) years. This
stipulation had been repeatedly adopted by the parties in the succeeding
renewals of their CBA, thus validating the impression that it is a reasonable
and acceptable term to both PAL and ALPAP. Consequently, the petitioner
cannot conveniently disregard this stipulation by simply raising the absence of
a contract expressly requiring the pilot to remain within PALs employ within
a period of 3 years after he has been sent on training. The supposed absence of
contract being raised by the petitioner cannot stand as the CBA clearly
covered the petitioners obligation to render service to PAL within 3 years to
enable it to recoup the costs of its investment. Further, to allow the petitioner
to leave the company before it has fulfilled the reasonable expectation of
service on his part will amount to unjust enrichment.
1. Existence of ER-EE relationship is essential for the determination of whether or not one
may exercise right of self-organization for purposes of collective bargaining
2.1 General Rule: Any employee may be eligible to join and be a member of a labor
union, beginning on his first day of service, whether employed for a definite period
or not. (Article 277 [c], Labor Code; See also: UST Faculty Union vs. Bitonio)
Managerial employees
Confidential employees
Government Employees, including GOCCs WITH original charter
3.1 Modified previous Supreme Court rulings prohibiting supervisors unions from
joining with the same federation as the rank and file. Law now explicity
ALLOWS for the commingling of the two.
Section 8 of new law provides: Article 245 of the Labor Code is hereby amended
to read as follows --
(a) The names of the chapters officers, their addresses, and the principal
office of the chapter; and
(b) The chapters constitution and by-laws: Provided, That where the
chapters constitution and by-laws are the same as that of the
federation or the national union, this fact shall be indicated
accordingly.
3.3 Failure to comply with reportorial requirements shall no longer be a ground for
cancellation of union registration, but shall subject errant officers/members to
penalty.
3.4 There are ONLY THREE GROUNDS allowed, whereas the old law provides for
at least seventeen (17) different grounds for cancellation.
3.6 The inclusion of union members of employees outside the bargaining unit no
longer a ground for cancellation of union registration. Note that this is contrary to
the implication in previous supreme court decisions in Toyota Motor and
Tagaytay Highlands Cases.
Republic Act No. 9481, Sec. 9. -- A new provision, Article 245-A is inserted into
the Labor Code to read as follows:
4. 2014-2015 CASES:
4.1 IMPORTANT: Issue: Must there be an attendance of at least 20% of the total
membership in the appropriate bargaining unit during the organizational meeting;
otherwise, ground for cancellation on account of fraud or misrepresentation?
Takata (Philippines) vs. Bureau of Labor Relations and Samahang Lakas
Manggagawa Ng Takata (Salamat), G.R. No. 196276, 04 June 2014. --
4.2 Question: Is a registered union required to submit financial statements and/or keep
membership representing 20% of the appropriate bargaining unit throughout its
lifetime, or risk cancellation of its registration?
There is nothing essentially mysterious or irregular about the fact that only 127
members ratified the unions constitution and by-laws when 128 signed the
attendance sheet. It cannot be assumed that all those who attended approved of the
constitution and by-laws. Any member had the right to hold out and refrain from
ratifying those documents or to simply ignore the process. AT ANY RATE, THE
LABOR CODE AND ITS IMPLEMENTING RULES DO NOT REQUIRE THAT
THE NUMBER OF MEMBERS APPEARING ON THE DOCUMENTS IN
QUESTION SHOULD COMPLETELY DOVETAIL. For as long as the documents
and signatures are shown to be genuine and regular and the constitution and by-laws
democratically ratified, the union is deemed to have complied with registration
requirements. (The Heritage Hotel Manila, acting through its owner, Grand Plaza
Hotel, Corp. vs. National Union of Workers in the Hotel, Restaurant and Allied
Industries-Heritage Hotel Manila Supervisors Chapter (NUWHRAIN-
HHMSC), G.R. No. 178296, 12 January 2011.)
See also similar case of Mariwasa Siam Ceramics vs. Secretary of Labor et al., GR
No. 183317, 21 Dec 2009., where a substantial number of members allegedly
recanted their membership in the union and this was made a ground for cancellation
of union registration. We cannot give full credence to these affidavits which were
executed under suspicious circumstances, and which contain allegations
unsupported by evidence. At best, these affidavits are self-serving. They possess no
probative value. Nevertheless, even assuming the veracity of said affidavits, the
legitimacy of the respondent Union as a labor organization must be affirmed.
While it is true that withdrawal of support may be considered as resignation from
the union, THE FACT REMAINS THAT AT THE TIME OF THE UNIONS
APPLICATION FOR REGISTRATION, THE AFFIANTS WERE MEMBERS OF
THE UNION AND COMPRISED MORE THAN THE REQUIRED 20%
MEMBERSHIP FOR PURPOSES OF REGISTRATION AS A UNION. ART. 234
MERELY REQUIRES A MINIMUM OF 20% MEMBERSHIP DURING
APPLICATION FOR UNION REGISTRATION. IT DOES NOT MANDATE
THAT A UNION MUST MAINTAIN THE 20% MINIMUM MEMBERSHIP
REQUIREMENT ALL THROUGHOUT ITS EXISTENCE.
1.1 Definition: It is the process of determining the sole and exclusive bargaining agent
of the employees in an appropriate bargaining unit for purposes of collective
bargaining. (Sec. [n], Rule I, Book V, Implementing Rules.)
General Rule: The employer is not a party in a certification election, which activity is the
sole concern of the workers. It is improper for the employer to be present at all during the
proceedings, even as an observer, let alone sit and participate therein thru a
representative.
Thus, Republic Act No. 9481 explicitly mandates that the employer is to be a
BYSTANDER in the certification election proceedings. Hence:
Exception: Where the employer has to file a petition for certification election pursuant to
Art. 258 of the Labor Code because it was requested to bargain collectively. Even then,
it becomes a neutral bystander.
With duly registered CBA - only during freedom period (60 days
prior to the expiration of the 5-yr representation term of the
CBA)
3.2 Denial of the petition; Grounds. The Med-Arbiter may dismiss the petition
on any of the following grounds:
o CONTRACT BAR RULE: the petition was filed before or after the freedom
period of a duly registered collective bargaining agreement; provided that
the sixty-day period based on the original collective bargaining
agreement shall not be affected by any amendment, extension or renewal
of the collective bargaining agreement
o ONE YEAR BAR RULE: the petition was filed within one (1) year from
entry of voluntary recognition or a valid certification, consent or run-off
election and no appeal on the results of the certification, consent or run-
off election is pending;
4.1 To have a valid election, a majority of all eligible voters in the appropriate
bargaining unit must have CAST their votes (FIRST MAJORITY RULE --
JUST COUNT HOW MANY VOTED).
4.2 The Union obtaining a majority of ALL VALID VOTES cast shall be certified
as sole and exclusive bargaining representative of the workers in the
appropriate bargaining unit. (SECOND MAJORITY RULE JUST COUNT
IF THERE IS A UNION THAT GARNERED A MAJORITY OF THE VALID
VOTES CAST)
Other related labor relations disputes shall include any conflict between a labor
union and the employer or any individual, entity or group that is not a labor
organization or workers association. This includes: (1) cancellation of
registration of unions and workers associations; and (2) a petition for
interpleader.
4.1 With Regional Office that issued the certificate of registration or certificate of
creation of chartered local, for the following complaints --
When two or more petitions involving the same parties and the same causes of
action are filed, the same shall be automatically consolidated.
ADAS NOTES: This implies earnest efforts exerted by the parties toward a
reasonable compromise or agreement acceptable to both parties. Contrast
this with the following concepts:
2.2 DUTY TO BARGAIN collectively does NOT compel any party to agree to any
proposal nor to make any concession by virtue thereof (Article 253, Labor
Code), nor are the parties obliged to reach an agreement. (Union of Filipro
Employees vs. Nestle Philippines, G.R. Nos. 158930-31, 03 March 2008).
All employees in the bargaining unit covered by a Union Shop Clause in their
CBA with management are subject to its terms.
a) employees who at the time the union shop agreement takes effect are bona
fide members of a religious organization which prohibits its members from
joining labor unions on religious grounds (Elizalde Rope Workers case);
b) employees already in the service and already members of a union other than
the majority at the time the union shop agreement took effect (Art. 248 [e]);
c) confidential employees who are excluded from the rank and file bargaining
unit; and
d) employees excluded from the union shop by express terms of the agreement.
(Bank of the Philippine Islands vs. BPI Employees Union - Davao Chapter -
Federation of Unions in BPI Unibank, G.R. No. 164301, 10 August 2010; En
Banc.).
5. 2010-2014 CASES:
5.2 IMPT 2014 ULP CASE NOT ASKED IN 2015 BAR: WHERE THE EMPLOYER
HAS ORCHESTRATED ACTIVITIES TO SUBVERT CERTIFICATION
ELECTIONS. (T & H Shopfitters Corporation/ Gin Queen Corporation et. al. vs. T
& H Shopfitters Corporation/Gin Queen Workers Union, et. al., G.R. No. 191714,
26 February 2014, J. Mendoza).
The various questioned acts of petitioners show interference in the right to self-
organization by the employees, namely: 1) sponsoring a field trip to Zambales for
its employees, to the exclusion of union members, before the scheduled certification
election; 2) the active campaign by the sales officer of petitioners against the union
prevailing as a bargaining agent during the field trip; 3) escorting its employees
after the field trip to the polling center; 4) the continuous hiring of subcontractors
performing respondents functions; 5) assigning union members to the Cabangan
site to work as grass cutters; and 6) the enforcement of work on a rotational basis
for union members.
Answer: NO. Article 2521 of the Labor Code defines the phrase duty to bargain
collectively. For a charge of unfair labor practice to prosper, it must be shown that
the employer was motivated by ill-will, bad faith or fraud, or was oppressive to
labor. The employer must have acted in a manner contrary to morals, good
customs, or public policy causing social humiliation, wounded feelings or grave
anxiety. In this case, it cannot be said that MMC deliberately avoided the
negotiation. It merely sought a suspension and even expressed its willingness to
negotiate once the mining operations resume. There was valid reliance on the
suspension of mining operations for the suspension of the CBA negotiation. The
Union failed to prove bad faith.
1
Renumbered as Article 262, Labor Code.
ANSWER: NO. While the parties may agree to extend the CBAs original five-
year term together with all other CBA provisions, any such amendment or term in
excess of five years will not carry with it a change in the unions exclusive
collective bargaining status.
The negotiated extension of the CBA term has no legal effect on the FVCLU-
PTGWOs exclusive bargaining representation status which remained effective only
for five years ending on the original expiry date of January 30, 2003. Thus, sixty
days prior to this date, or starting December 2, 2002, SANAMA-SIGLO could
properly file a petition for certification election. Its petition, filed on January 21,
2003 or nine (9) days before the expiration of the CBA and of FVCLU-PTGWOs
exclusive bargaining status, was seasonably filed.
2. Requisites of a valid strike: (a) Must have a lawful purpose; (b) conducted through
lawful means; and (c) must be in compliance with the procedural requirements under
the Labor Code
2.2 Lawful means -- Even if the strike is valid because its objective or purpose
is lawful, the strike may still be declared invalid where the means
employed are illegal.
Article 264 [e]: No person engaged in picketing shall commit any act
of violence, coercion or intimidation, or obstruct the free ingress to
and egress from the employers premises for lawful purposes, or to
obstruct public thoroughfares.
2.2.3 What are the liabilities of the workers who participated in the
commission of the prohibited activities as mentioned above are
committed during the conduct of the strike? Loss of employment
status
Apart and separate from the lawful purposes and lawful means in the
conduct of a valid strike, the third requisite is compliance with the
procedural requirements of law. Thus:
2.3.4 Seven Day Strike ban (Dept. Order No. 9. R22, S7[e]) - after the
strike vote is taken, it is required that the union must file the result
of the strike vote with the NCMB at least 7 days prior to the
intended date of strike.
Note: Both cooling off period and 7-day strike ban must be
complied with and is mandatory. Otherwise, illegal strike.
(National Federation of Sugar Workers vs. Ovejera, 114 SCRA
354)
"A Strike that is undertaken despite the issuance by the Secretary of Labor of
an assumption or certification order becomes a prohibited activity and thus
illegal, pursuant to the second paragraph of Art. 264 of the Labor Code as
amended (Zamboanga Wood Products, Inc. vs. NLRC, G.R. 82088, October
13, 1989; 178 SCRA 482). The Union, officers and members, as a result, are
deemed to have lost their employment status for having knowingly
participated in an illegal act." (Union of Filipino Employees vs. Nestle
Philippines, Inc. [192 SCRA 396])
No Strike-No Lockout clause in the CBA applies only to economic strikes; it does
not apply to ULP strikes. Hence, if the strike is founded on an unfair labor practice
of the employer, a strike declared by the union cannot be considered a violation of
the no-strike clause. (Master Iron Labor Union vs. NLRC, 219 SCRA 47.)
5. 2010-2015 CASES
5.1 2015 CASE: Club Filipino, Inc., et al. vs. Benjamin Bautista, et al., G.R. No.
168406, 04 January 2015. -- The law requires knowledge of the illegality of the
strike on the part of the union officer before he can be dismissed; when second
motion for reconsideration may be allowed; illegal dismissal case is not res
judicata to illegal strike case.
L. LAW ON TERMINATION
STATE
Police power/social justice
Interpretation in favor of labor
Adas Notes: Thus, in the context of the balancing of interests relative to the
conduct of human relationships and work performance within the business,
certain parameters will have to be observed:
a) Burden of proof is upon the employer to show just cause for the
imposition of a penalty upon the employee.
2012 CASE: Negros Slashers vs. Alvin Teng, G.R. No. 187122, 22 Feb
2012.
b) St. Lukes Medical Center vs. Ma. Theresa Sanchez, G.R. No. 212054, 11
March 2015; on dishonesty viz., theft of medical supplies. Question:
Whether or not employee may validly set up as a defense that there was no
real intention to bring out unused hospital supplies left by patients
(syringe, micropore, cotton balls, gloves, etc), to avoid termination?
Rationale: In several rulings where the meaning of fight was decisive, the
Court has observed that the term fight was considered to be different
from the term argument. In People v. Asto, for instance, the Court
characterized fight as not just a merely verbal tussle but a physical combat
between two opposing parties. Similarly, in Pilares, Sr. v. People,14 a
fight was held to be more than just an exchange of words that usually
succeeded the provocation by either party. Based on the foregoing, the
incident involving Del Rosario and Gamboa could not be justly considered
as akin to the fight contemplated by Northwest. In the eyes of the NLRC,
Del Rosario and Gamboa were arguing but not fighting. Moreover, even
assuming arguendo that the incident was the kind of fight prohibited by
Northwest's Rules of Conduct, the same could not be considered as of
such seriousness as to warrant Del Rosario's dismissal from the service.
The gravity of the fight, which was not more than a verbal argument
between them, was not enough to tarnish or diminish Northwest's public
image.
d) Colegio de San Juan de Letran vs. Isidra Dela Rosa-Meris, G.R. No.
178837, 01 September 2014. -- Tampering of school records/altering
grades constitute serious misconduct punishable with termination under
the Labor Code and under the Manual of Regulations for Private Schools.
Elements:
1. employees assailed conduct must be willful or intentional;
2. willfulness characterized by wrongful or perverse attitude;
3. the order violated must be reasonable, lawful and made
known to the employee; and
4. the order must pertain to the duties which the employee has
been engaged to discharge. (The Coffee Bean and Tea Leaf
Philippines, Inc. vs. Rolly P. Arenas G.R. No. 208908, 11 March
2015)
b) The Coffee Bean and Tea Leaf Philippines, Inc. vs. Rolly P. Arenas,
G.R. No. 208908, 11 March 2015. -- Willful disobedience Company
official cannot be held liable for the dismissal of an employee unless he
acted with malice or bad faith.
In order for willful disobedience under Art. 296 (a) [formerly Article 282
(a) of the Labor Code] to be properly invoked as a just cause for dismissal,
the conduct must be willful or intentional, willfulness being characterized
by a wrongful and perverse mental attitude. (Nissan Motors Phil., Inc. vs.
Angelo, G.R. No. 164181, 14 September 2011, 657 SCRA 520.)
Moreover, willfulness was described as attended by a wrongful and
perverse mental attitude rendering the employees act inconsistent with
proper subordination. (Dongon v. Rapid Movers and Forewarders Co.,
Inc. G.R. No. 163431, 28 August 2013, 704 SCRA 56)
2014 CASE: Dr. Phylis C. Rio vs. Colegio De Sta. Rosa Makati, G.R.
No. 189629, 06 Aug 2014. - Gross inefficiency and incompetence,
and negligence in the keeping of school or student records, or
tampering with or falsification of records.
c) willful neglect of duties: imply bad faith on the part of the employee in
failing to perform his job, to the detriment of the employer and the
latters business
The general rule is that an employee terminated for just causes is not
entitled to separation pay except on grounds of equity and social justice.
Where the dismissal is based on willful breach by the employee of the
trust reposed in him by the employer, the supervisory employee Moya is
outside the protective mantle of the principle of social justice. His act of
concealing the truth from the company 2 is a clear disloyalty to the
company which has long employed him. The defense of the infraction
being his first offense, and that he had no willful intention to conceal the
truth or cover up the mistake of his employee, is unavailing. His length of
service should be taken against him. Length of service is not a bargaining
chip that can simply be stacked against the employer. If an employer has
treated his employee well, has accorded him fairness and adequate
compensation as determined by law, it is only fair to expect a long-time
employee to return such fairness with at least some respect and honesty.
2
Failure to report five tires damaged as a result of undercuring brought about by negligence of another
employee.
INCOMPETENCE
2014 CASE: Dr. Phylis C. Rio vs. Colegio De Sta. Rosa Makati, G.R.
No. 189629, 06 Aug 2014. - Gross inefficiency and incompetence, and
negligence in the keeping of school or student records, or tampering with
or falsification of records. (See discussion on page 107).
DISEASE 1 MO PAY OR
MONTH FOR EVERY
YEAR OF SERVICE
INSTALLATION OF LABOR 1 MO PAY OR 1
SAVING DEVICES MONTH FOR EVERY
YEAR OF SERVICE
RETRENCHMENT 1 MO PAY OR
MONTH FOR EVERY
YEAR OF SERVICE
REDUNDANCY 1 MO PAY OR 1
MONTH FOR EVERY
YEAR OF SERVICE
CLOSURE NOT DUE TO 1 MO PAY OR
SERIOUS BUSINESS MONTH FOR EVERY
LOSSES YEAR OF SERVICE
3.1 DISEASE (separation pay of 1/2 month pay for every year of service)
Express, Inc. v. Payong, Jr., (510 Phil. 818 [2005]), the Court
finally pronounced the rule that the employer must furnish the
namely: (1) the notice to apprise the employee of the ground for
which his dismissal is sought; and (2) the notice informing the
Page | 59 PALS BAR OPS PILIPINAS 2016
employee of his dismissal, to be issued after the employee has
controversy.
3.3 RETRENCHMENT (Sepn. Pay: 1/2 month pay for every year of service)
3
See: Sebuguero vs. NLRC, 248 SCRA 533 [1995].
4
San Pedro Hospital of Digos, Inc. vs. Secretary of Labor, 263 SCRA 98 [1996].
5
Guerrero vs. NLRC, 261 SCRA 301 [1996]
6
San Miguel Jeepney Services vs. NLRC, 265 SCRA 35 [1996]
EXCEPTION: If no due process but with just cause, then Agabon ruling
to apply.
The denial of the fundamental right to due process being apparent, the
dismissal order in disregard of that right is void for lack of jurisdiction.
The cardinal precept is that where there is a violation of basic
constitutional rights, courts are ousted from their jurisdiction. The
violation of a partys right to due process raises a serious jurisdictional
issue which cannot be glossed over or disregarded at all. It is well settled
that a decision rendered without due process is void ab initio and may be
attacked at any time directly or collaterally be means of a separate action,
or by resisting such decision in any action or proceeding where is it
invoked. (Salva vs. Valle, G.R. No. 193773, 02 April 2013; En Banc,
citations omitted.)
Agabon vs. NLRC ruling, G.R. No. 158693, 11/17/2004 - where there was
substantial evidence proving just cause BUT that due process was not
followed, the termination will be UPHELD (considered valid and effective)
but the employee will be penalized the amount of P30,000.00-50,000.00
(see discussion on difference below).
Should employee seek damages on this account, may file with regular court.
[Governed exclusively by the Civil Code. (Shoemart vs. NLRC, supra.)]
6.2 HEARING:
note that a formal hearing (as in the manner of regular courts) is not
required; only substantial evidence is necessary.
6.3 Right to counsel on the part of the employee is this mandatory and
indispensable as part of due process?
NO. In the case of Lopez vs. Alturas Group, 11 April 2011, the Supreme
Court ruled that the right to counsel and the assistance of one in
investigations involving termination cases is neither indispensable nor
mandatory, except when the employee himself requests for one or that he
manifests that he wants a formal hearing on the charges against him.
7. ON REINSTATEMENT:
2015 CASE: Smart Communications, Inc., et al. vs. Jose Leni Z. Solidum,
G.R. No. 204646, 15 April 2015. -- In illegal dismissal cases, if the LA
ordered reinstatement, and the employer failed to reinstate the employer either
actually or in the payroll, and the NLRC on appeal reversed the decision of
the LA, the employee is entitled to the accrued salaries and other benefits
8. ON BACKWAGES
of the decision to the account for the time the illegally dismissed
entitlements.