Compilation of Labor laws and notes

Review notes
on Labor Law
Azucena, Chan, Alcantara and jurisprudence

2009
 Personal Notes of Janine J. Sarausos

TABLE OF CONTENTS
TOPIC 8. PAYMENT OF WAGES
TOPIC 1: THE APPLICABLE LAWS 153
INTRODUCTION TOPIC 9. WAGE ROTECTION PROVISIONS AND
LABOR STANDARDS LAW PROHIBITIONS REGARDING WAGES
LABOR RELATIONS LAW
TOPIC 10. CONDITIONS OF EMPLOYMENT
TOPIC 2. BASIC PRINCIPLES
FOUR-FOLD TEST IN DETERMINING THE EXISTENCE OF TOPIC 11: MINIMUM LABOR STANDARDS
EMPLOYER-EMPLOYEE RELATIONSHIP
PART II: LABOR RELATIONS TOPICS
TOPIC 3. RIGHT TO HIRE
MANAGEMENT PREROGATIVE TOPIC 12. RIGHT TO SECURITY OF TENURE
LAWS AND RULES APPLICABLE PRIOR TO HIRING
LABOR LAWS RESTRICTING THE RIGHTS OF THE TOPIC 13: MANAGEMENT PREROGATIVE
EMPLOYER DURING EMPLOYMENT
OTHER RELEVANT RECENT LAWS: TOPIC 14. PRESCRIPTION OF CLAIMS

PART I: LABOR STANDARDS TOPICS TOPIC 15. JURISDICTION OF THE LABOR ARBITER
TOPIC 4: WAGES AND WAGE RATIONALIZATION ACT
I. CONCEPT OF WAGES TOPIC 16. 2005 REVISED RULES OF PROCEDURE OF THE
WAGE NLRC
II. CONCEPT OF FACILITIES AND FACILITIES
III. METHODS OF FIXING COMPENSATION (ART. 98, LC) TOPIC 17. RIGHT TO SELF ORGANIZATION
IV. FIXING THE EMPLOYEE’S WAGE (RTWPB)
TOPIC 18. THE BUREAU OF LABOR RELATIONS
TOPIC 5. DETERMINATION OF WAGES
A. WAGE RATIONALIZATION ACT (RA 6767) TOPIC 19: RIGHTS OF LEGITIMATE LABOR
NATIONAL WAGES AND PRODUCTIVITY COMMISSION ORGANIZATION
WAGE ORDER
ENFORCEMENT OF WAGE ORDERS
TOPIC 1: THE APPLICABLE LAWS
TOPIC 6: SIMPLE MONEY CLAIM
INTRODUCTION
TOPIC 7: WAGE DISTORTION
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PD 442- Promulgated on May 1, 1974; took effect on November 1,
1974
RA 6715, AKA Herrera-Veloso law- took effect on March 21, 1989
Significant change: provision on the terms and conditions of employment
and computation of the backwages which is from the time compensation
was withheld up to the actual reinstatement.
Sen. Blas Ople – Father of Labor Code
Sources of Labor Laws:
a. Primary source
1. The Labor Code of the Philippines
2. Constitution:
Section 3, Art. XIII. The State shall afford full protection to labor,
local and overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization,
collective bargaining and negotiations, and peaceful concerted activities,
including the right to strike in accordance with law. They shall be entitled to
security of tenure, humane conditions of work, and a living wage. They
shall also participate in policy and decision-making processes affecting their
rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between
workers and employers and the preferential use of voluntary modes in
settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production and
the right of enterprises to reasonable returns to investments, and to
expansion and growth.
3. Rules and Regulations issued by administrative agencies
Have the force and effect of laws. Provided, however, that these rules
and issuance will not expand the law or strip the law. Otherwise, under the
rules on statutory construction, these will be considered void. e.g. Policy
Instruction No. 54-88 (issued by former Sec. Franklin Drilon) has been
Personal Notes of Janine J. Sarausos
declared void by the Supreme Court because this has expanded Art. 83 of
the Labor Code on Employment of Health Personnel by erroneously
interpreting that health employees are entitled to a “full weekly wage for 7 153
days” if they have completed the 40-hour/5-day workweek.
b. Secondary Sources
1. Judicial Decisions. Article 8, Civil Code: Judicial decisions applying
or interpreting the laws or the Constitution shall form part of the legal
system of the Philippines.
2. foreign court decisions
3. reviewers in labor laws
Basis for the enactment of Labor Law:
1. Police power- state authority to enact legislation that may interfere
with personal liberty or property in order to promote the general
welfare. Eg. Art. 263 (g) on the visitorial power of the SOLE.
2. Social justice- the humanization of laws and the equalization of
social and economic forces by the State so that justice in its
rational and objectively secular conception may atleast be
approximated. (for the protection of labor). Eg. Art. XIII,
Constitution and retirement law etc.
3. Doctrine of incorporation under Art. 2, Sec. 2 of 1987 Constitution
of UN declaration of Human rights, ILO Convention no. 87
(freedom of association) and ILO convention no. 98 (right to
organize)
4. Protection to labor clause (Art. XIII, Sec. 3 of the Constitution)
e.g. Migrant Worker’s Act
Limitations in the enactment of Labor Laws:
1. Non-impairment of contracts (Art. III, Sec. 10)
2. Equal protection clause (Art. III, Sec. 1)
3. Prohibition against involuntary servitude ( Art. III, Sec. 18 par. 2)
4. Due process of law ( Art. III, Sec. 1)
eg. Art. 280, LC
5. Other constitutional provisions
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Provisions on the effectivity of Labor Laws, Rules and Regulation (PASEI
vs. Torres, 212 SCRA 307):
1. Art. 2, NCC. Laws shall take effect after fifteen days following
the completion of their publication in the Official Gazette, unless it
is otherwise provided. This Code shall take effect one year after
such publication.
2. Art. 5, LC. Acts executed against the provisions of mandatory or
prohibitory laws shall be void, except when the law itself
authorizes their validity.
3. Sec. 3 (1) and (4), chapter 2, Book VII, Admin Code of 1987
Sec. 3 (1)- Filing. Every agency shall file with the UP law center,
three certified copies of every rule adopted by it. Rules in force on
the date of the effectivity of this Code which are not filed within
three (3) months shall not thereafter be the basis of any sanction
against the party or persons.
Sec. 4-. Effectivity. In addition to other rule-making requirements
provided by law not inconsistent with this Book, each rule shall
become effective 15 days from the date of filing as above provided
unless a different date is fixed by law, or specified in the rule in
cases of imminent danger to public health, safety, and welfare, the
existence of which must be expressed in a statement accompanying
the rule.
Publication Requirement: Philippine Association of Service Exporters, Inc.
v. Torres (G.R. No. 101279, August 6, 1992): “The circulars were issued
within the scope of the regulatory authority of the SOLE and POEA and are
a valid exercise of the police power of the executive branch of the
government. The circulars did not prohibit PASEI from engaging in the
recruitment and deployment of OFWs. Petitioner may still deploy other
class of Filipino workers not going to Hong Kong. The suspension was
temporary. Nevertheless, these administrative circulars are legally invalid,
defective and unenforceable for lack of proper publication and filing in the
Personal Notes of Janine J. Sarausos
Office of the National Administrative Register as required in Art. 2 of the
Civil Code, Art. 5 of the Labor Code and Secs. 3(1) and 4, Chapter 2, Book
VII of the Administrative Code of 1987.” 153
Rule on the implementation and interpretation of Labor Laws:
ART. 4, LC. Construction in favor of labor. - All doubts in the
implementation and interpretation of the provisions of this Code, including
its implementing rules and regulations, shall be resolved in favor of labor.
 Art. 1700. The relations between capital and labor are not merely
contractual. They are so impressed with public interest that labor contracts
must yield to the common good. Therefore, such contracts are subject to the
special laws on labor unions, collective bargaining, strikes and lockouts,
closed shop, wages, working conditions, hours of labor and similar subjects.
 Art. 1701. Neither capital nor labor shall act oppressively against the
other, or impair the interest or convenience of the public.
 Art. 1702. In case of doubt, all labor legislation and all labor
contracts shall be construed in favor of the safety and decent living for the
laborer.
Thus, PARTIES TO LABOR OR employment CONTRACT are:
1. Employer
2. Employee based on Arts. 1700-1702, NCC
3. State
4. Public
LABOR STANDARDS distinguished from LABOR RELATIONS:
LABOR STANDARDS LAW. The minimum requirements prescribed
by existing laws, rules and regulations and other issuances relating to
wages, hours of work, cost of living allowances and other monetary and
welfare benefits, including those set by occupational safety and health
hazards. (Section 7, Rule I, Rules on the Disposition of Labor Standards
Cases – September 16, 1987). It is that which sets out the minimum terms,
conditions and benefits of employment that employers must provide or
comply with and to which employees are entitled as a matter of right.
[KEYWORD: minimum terms and conditions]
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 Personal Notes of Janine J. Sarausos

1. Living wage 1. Self-organization

Aspects of Labor Standards: 2. Humane conditions of 2. Peaceful concerted activity
1. Protective- prevent harsh and oppressive condition of work work 3. CBA 153
inimical to health. Eg. Hours of work 3. Just share in the fruits of 4. Security of tenure
2. Meliorative- expand the flow of income and benefits to working production. 5. Participation in policy and
men required for decent living. Eg. OT and night-shift differential 4. Security of tenure decision-making processes
law affecting their rights and
benefits
Sources of Labor Standard: (for the applicability of non-diminution
of benefits) Note:
1. Contract Q: the 1987 Constitution does not contain any provision expressly
2. Company policies- declarations prescribing and fixing employment recognizing the power of compulsory arbitration. May such power be
standards/ benefits. Eg. Resignation benefits nevertheless exercised to settle disputes between labor and capital?
3. Company practice- customary mode of employer behavior, usually A; SC held that the exercise of compulsory arbitration can be justified
non-verbal, fixing employee standard over a period of time thru under the police power of the State.- UFE vs. Nestle Phils Dec. 10, 1990. It
repetitive employer behavior. is also implied in the grant of the power to regulate relations between labor
4. Statutes and management.
5. Administrative orders issued by DOLE
6. CBA
7. Arbitral award Three fields of Labor Law:
1. Social or welfare measures or labor legislationare welfare
LABOR RELATIONS LAW. Refers to the interactions between measures intended to substitute the income of employee when such
employer and employees or their representatives and the mechanism by employee is not able to work due to illness or disability occasioned
which the standards and the other terms and conditions of employment are by accident or sickness in relation with duty. Eg. SSS, GSIS and
negotiated, adjusted or enforced. [KEYWORD: interactions] Philhealth (in lieu of medicare).
2. Labor Standards
Concept of Labor Law: 3. Labor relations
Common: refer to work or service or working men
Technical: exertion by the human being either of physical or mental effort Tripartism
towards production of goods and services. ART. 275, LC. Tripartism and tripartite conferences. - (a) Tripartism in
 note: labor is neither a merchandise, neither chattel nor commodity but labor relations is hereby declared a State policy. Towards this end, workers
human and must be dealt with from the standpoint of human interest.J and employers shall, as far as practicable, be represented in decision and
policy-making bodies of the government.
Constitutional Rights of Workers (Art. XIII, Sec. 3, infra) (b) The SOLE or his duly authorized representatives may, from time to
Labor standards Labor relations time, call a national, regional, or industrial tripartite conference of
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representatives of government, workers and employers for the consideration
and adoption of voluntary codes of principles designed to promote
industrial peace based on social justice or to align labor movement relations
with established priorities in economic and social development. In calling
such conference, the Secretary of Labor and Employment may consult with
accredited representatives of workers and employers. (As amended by
Section 32, RA No. 6715, March 21, 1989).
 Amendatory decree no. 850 (1975) adopted tripartism as a state
policy
 Tripartism is a representation of three sectors in policy-making
bodies of the government. They are:
1. public or the government
2. employees
3. workers
 Such kind of representation is not ordained, not even by the
Constitution. What is provided for, for the private sector is worker’s
participation in policy and decision-making processes directly
affecting their rights, benefits, and welfare.
Four (4) systems of Labor:
1. Slavery- refers to the extraction of work or services from any person by
means of enticement, violence, intimidation or threat, use of force or
coercion, including deprivation of freedom, abuse of authority or moral
ascendance, debt bondage or deception. The worker is owned by
another at his free disposal.
2. Serfdom- worker not owned by master but by customary right he is
required to render services to master. Similar to forced labor. Eg. Death
bondage. It is the socio-economic status of peasants under feudalism,
and specifically relates to Manorialism. It was a condition of bondage
or modified slavery seen primarily during the Middle Ages in Europe.
Serfdom was the enforced labour of serfs on the fields of landowners,
in return for protection and the right to work on their leased fields.
Worker, by customary right to his Lord, owes certain service.
Personal Notes of Janine J. Sarausos
3. Free partisanship/ independent contractorship- labor code does not
apply but civil code does. Same as modern independent contractorship
wherein an independent contractor is engaged in a business separately 153
distinct from the principal, the performed job, work or service, and
works according to his own means and methods, free from the control
and direction of the principal except as to the results thereof. A free
person who offers his services to others subject to nobody’s will.
4. Wage system- Er-Ee relationship. Same as modern employer-employee
system where there is an employee under the control and supervision of
an employer as to the means, manner or method of which the work is to
be accomplished including the result thereof and is paid for the work
done in terms of wage. A person offers his services to another under an
employment contract for which such service is paid by wages.
 Specific Rights of Workers (From the works of batch
2008 Rm 228)
 Security of tenure
 Workers can’t be dismissed without just and authorized
causes
 Workers shall be made regular after 6 months probation unless a
different period is agreed upon by the worker and the employee
 Hours of work
 Normal working hours of eight hours a day
 Meal and rest period: meal break of less than one hour shall be
considered compensable working time
 Wage and wage related benefits
b. minimum wage
c. holiday pay – one day for every regular holiday even if unworked
subject to certain conditions
d. premium pay for work within 8 hours on:
 special rest day; 30% of the basic daily rate
 rest day falling on a special day: plus 50%
 rest day falling on a regular holiday: plus 30% of the 200%
of the basic daily rate
 Overtime pay
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 Ordinary days: 25% of the basic hourly rate
 Special/rest/holiday: 30% of the regular hourly rate on said days
 Night shift differential pay
 10% of the basic or regular rate between 10pm and 6am
 Service incentive leave
 5 days with pay per year after one year of service
 Service charges
 85 % (distribution to rank and file employees); 15% (losses,
breakages, distribution to managerial employees)
 Separation pay
 ½ month pay for every year of service for authorized causes of
separation
 13th month pay
 1/12 of the total basic salary earned within the calendar year
 Payment of wages
 Shall be paid in cash, legal tender, at or near the place of work
 May be made through a bank upon written petition of majority of
the workers in establishments with 25 or more employees and
within one kilometer radius to a bank
 Shall be made direct to the employees
 Shall be given not less than once every 2 weeks or twice within a
month at intervals not exceeding 16 days
 Labor-only contracting is prohibited and the person acting as
contractor is merely an agent of the employer
 Preference of workers money claims over government and other
creditors in case of bankruptcy or liquidation of business
 Safe and healthful conditions of work and welfare services
 Proper illumination and ventilation, fire exits and extinguishers,
occupational health personnel services, family welfare or family
planning services at the workplace)
 Employment of Young Workers
 Minimum employable age is 15 age
Personal Notes of Janine J. Sarausos
 A worker below 15 should be directly under the sole responsibility
of parents or guardians; work does not interfere with child’s
schooling and normal development 153
 No person below eighteen can be employed in hazardous or
deleterious undertaking
 Employment of women
 Nightwork prohibition unless allowed by the rules:
o Industrial undertaking – from 10 pm to 6 am
o Commercial – from 12 mn to 6 am
o Agricultural – at nighttime unless given not less than 9 consecutive
hours of rest
 Welfare facilities must be provided in the workplace
 Prohibition against discrimination with
respect to pay, promotion, training opportunities, study, and
scholarship grants
 Self-organization and collective bargaining
 Employees can form organizations such as union and
welfare committees
 An employee can join a union on the very first day of his
employment
 Collective Bargaining– a contract between workers and
employers on terms and conditions of employment which are
OVER and ABOVE those mandated by law
 Labor education through seminars, dialogues, and information,
education and communication materials
 Peaceful concerted activities in accordance with law
 Participation an policy and decision-making processes affecting
their rights and benefits
 Free access to the courts and quasi-judicial bodies and speedy
disposition of their cases
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 ECC benefits for work-related contingencies
 medical benefits for sickness and injuries
 disability benefits
 rehabilitation
 death and funeral
 SSS Benefits
 maternity
 sickness
 disability
 retirement
 death
TOPIC 2. BASIC PRINCIPLES
Definition and Distinction of Employer and Employee
Labor standards
Employer – Includes any person
directly or indirectly in the interest
of an employer in relation to an
employee and shall include the
Government and all its branches,
subdivision and instrumentalities, all
government-owned or controlled
corporations and institutions, as well
as non-profit private institutions, or
organizations. (Article 97 b)
Employee – Includes any individual
employed by an employer. (Article
97c)
Labor relations
Art. 212 (e) "Employer" includes
any person acting in the interest of
an employer, directly or indirectly.
The term shall not include any labor
organization or any of its officers or
agents except when acting as
employer.
(: it does not include government
coz CSC applies)
"Employee" includes any person in
the employ of an employer. The
term shall not be limited to the
employees of a particular employer,
unless the Code so explicitly states.
Personal Notes of Janine J. Sarausos
It shall include any individual whose
work has ceased as a result of or in
connection with any current labor 153
dispute or because of any unfair
labor practice if he has not obtained
any other substantially equivalent
and regular employment. (Art. 212
(f)]
Note:
The employer may be a natural or juridical person. May be a single
proprietor, a partnership or a corporation. But, only a natural person can
qualify as an employee. Natural persons may include Filipino citizens and
Foreigners.
Case: Philippine Fisheries Development vs. NLRC, 213 SCRA 21
“Notwithstanding that the petitioner is a government agency, its liabilities, which are
joint and solidary with that of the contractor, are provided in Article 106, 107 and
109 of the Labor Code. This places the petitioner’s liabilities under the scope of the
NLRC. Moreover, Book III, Title II on Wages specifically provides that the term
“EMPLOYER” includes any person acting directly or indirectly in the interest of
an employer in relation to an employee and shall include the Government and all its
branches, subdivisions and instrumentalities, all governed-owned or controlled
corporations and institutions as well as non-profit private institutions. The NLRC,
therefore, did not commit grave abuse of discretion in assuming jurisdiction to set
aside the Order of dismissal by the Labor Arbiter.”
Employer-Employee Relationship vs. Principal-Agent Relationship
Employee is governed by the LC, while the agent is governed by the
CC (SEE: art 1868, NCC).
Employer-Employee Relationship vs. Principal-Contractor
Relationship
Contractor – Carries on a distinct and independent business and
undertakes to perform the job, work or service on its own account and under
its own responsibility, according to its own manner and method, and free
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from the control and direction of the principal in all matters connected with
the performance of the work except as to the results thereof. (Department
Order No. 9)
In the principal-contractor relationship, the principal selects the
contractor. The contractor is compensated for services rendered. The
contractor is not under the discipline of the principal. The contractor is not
under the control of the principal. The definition says that aside from
engaging in a business separately distinct from the principal, the performed
job, work or service is, according to his own means or methods, free from
the control and direction of the principal except as to the results thereof.
Contractor may be an individual, or corporate or juridical contractor.
Principal-contractor relationship also exists in a situation under Article
106 wherein the principal will engage the services of a security agency to
render security services. That person rendering such services will also
qualify as a contractor.
Article 1713, Civil Code: By contract for a piece of work the contractor
binds himself to execute a piece of work for the employer, in consideration of a
certain price or compensation. The contractor may either employ only his labor or
skill, or also furnish the material.
FOUR-FOLD TEST IN DETERMINING THE EXISTENCE OF
EMPLOYER-EMPLOYEE RELATIONSHIP
1. The selection and engagement of the employee
2. The payment of wages or salaries for services
3. The power of dismissal or to impose disciplinary actions
4. The employer’s power to control the employee with respect to
the means and methods by which the work is to be
accomplished.
It is the so-called “control test” that is the most important element.
Add: Economic reality test
Francisco v. NLRC
G.R. No. 170087; August 31, 2006
Ruling:
Personal Notes of Janine J. Sarausos
The better approach would therefore be to adopt a two-tiered test
involving 1.) the putative employer’s power to control the employee with
respect to the means and methods by which the work is to be accomplished; 153
2.) the underlying economic realities of the activity of relationship. Thus,
the determination of the relationship between employer and employee
depends upon the circumstances of the whole economic activity. The proper
standard of economic dependence is whether the worker is dependent on the
alleged employer for his continued employment in that line of business.
By applying the control test, there is no doubt that petitioner is an
employee of the Company because she was under the control and
supervision of the latter. Under the broader economic reality test, the
petitioner can likewise be said to be an employee of respondent corporation
because she had served the company for six years before her dismissal,
receiving check vouchers indicating her salaries/ benefits, 13th month pay,
bonuses and allowances as well as deductions and SSS contributions. It is
therefore apparent that petitioner is economically dependent on
respondent for her continued employment in the latter’s line of business
(test).
In Sevilla v. Court of Appeals, we observed the need to consider
the existing economic conditions prevailing between the parties, in addition
to the standard of right-of-control like the inclusion of the employee in the
payrolls, to give a clearer picture in determining the existence of an
employer-employee relationship based on an analysis of the totality of
economic circumstances of the worker.
Thus, the determination of the relationship between employer and
employee depends upon the circumstances of the whole economic activity,
such as: (1) the extent to which the services performed are an integral part
of the employer’s business; (2) the extent of the worker’s investment in
equipment and facilities; (3) the nature and degree of control exercised by
the employer; (4) the worker’s opportunity for profit and loss; (5) the
amount of initiative, skill, judgment or foresight required for the success of
the claimed independent enterprise; (6) the permanency and duration of the
relationship between the worker and the employer; and (7) the degree of
dependency of the worker upon the employer for his continued employment
in that line of business.
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Note: economic reality test finds application when the employee holds
several positions and because of the complexity of the position, employee
relationship is hard to determine. Also, unlike employee, independent
contractor does not solely depend on the company for continued work as
they can pursue other jobs.
TOPIC 3. RIGHT TO HIRE
MANAGEMENT PREROGATIVE – An act of the employer according
to his own judgment or discretion to regulate his business. This includes
hiring, transfer, dismissal, etc.
The exercise of the right or prerogative to hire is not absolute. It is regulated
by laws, contract and basic principles of equity and fair play.
Case:
1. RAMOS vs. CA, DE LOS SANTOS MEDICAL CENTER et. al.
G.R. No. 124354. April 11, 2002
Ruling:
Anent private respondent DLSMC’s liability for the resulting injury to petitioner
Erlinda, we held that respondent hospital is solidarily liable with respondent doctors
therefor under Article 2180 of the Civil Code since there exists an employer-
employee relationship between private respondent DLSMC and Drs. Gutierrez and
Hosaka:
In other words, private hospitals, hire, fire and exercise real control over their
attending and visiting “consultant” staff. While “consultants” are not, technically
employees, x x x the control exercised, the hiring and the right to terminate
consultants all fulfill the important hallmarks of an employer-employee relationship,
with the exception of the payment of wages. In assessing whether such a
relationship in fact exists, the control test is determining. x x x
After a careful consideration of the arguments raised by DLSMC, the Court
finds that respondent hospital’s position on this issue is meritorious. There is no
employer-employee relationship between DLSMC and Drs. Gutierrez and Hosaka
which would hold DLSMC solidarily liable for the injury suffered by petitioner
Erlinda under Article 2180 of the Civil Code.
As explained by respondent hospital, that the admission of a physician to
membership in DLSMC’s medical staff as active or visiting consultant is first
decided upon by the Credentials Committee thereof, which is composed of the heads
Personal Notes of Janine J. Sarausos
of the various specialty departments such as the Department of Obstetrics and
Gynecology, Pediatrics, Surgery with the department head of the particular specialty
applied for as chairman. The Credentials Committee then recommends to DLSMC's 153
Medical Director or Hospital Administrator the acceptance or rejection of the
applicant physician, and said director or administrator validates the committee's
recommendation. Similarly, in cases where a disciplinary action is lodged against a
consultant, the same is initiated by the department to whom the consultant
concerned belongs and filed with the Ethics Committee consisting of the
department specialty heads. The medical director/hospital administrator merely acts
as ex-officio member of said committee.
Neither is there any showing that it is DLSMC which pays any of its
consultants for medical services rendered by the latter to their respective patients.
Moreover, the contract between the consultant in respondent hospital and his patient
is separate and distinct from the contract between respondent hospital and said
patient. The first has for its object the rendition of medical services by the
consultant to the patient, while the second concerns the provision by the hospital of
facilities and services by its staff such as nurses and laboratory personnel necessary
for the proper treatment of the patient.
LAWS AND RULES APPLICABLE PRIOR TO HIRING
A. Under the Labor Code:
1. Prohibition against gender discrimination
Article 135. Discrimination Prohibited. It shall be unlawful for any
employer to discriminate against any woman employee with respect to
terms and conditions of employment solely on account of her sex.
The following are ACTS OF DISCRIMINATION:
(a) Payment of lesser compensation, including wage, salary or
other form of remuneration or fringe benefits, to a female employee as
against a male employee, for work of equal value; and
(b) Favoring a male employee over a female employee with respect
to promotion, training opportunities, study and scholarship grants
solely on account of their sexes.
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Criminal liability for the willful commission of any unlawful act as
provided in this article or any violation to the rules and regulations
issued pursuant to Section 2 hereof (RA 6725) shall be penalized as
provided in Articled 288 and 289 of this Code. Provided, that the
institution of any criminal action under this provision shall not bar the
aggrieved employee from filing an entirely separate and distinct action
for money claims, for damages and other affirmative reliefs. The
actions hereby authorized shall proceed independently of each other.
SEE: RA 7192 (An Act Promoting the Integration of Women as Full and
Equal Partners of Men in Development and Nation Building).
2. Prohibition against stipulation of marriage
Article 136. Stipulation Against Marriage. It shall be unlawful for an
employer to require as a condition of employment or continuation of
employment that a woman employee shall not get married, or to stipulate
expressly or tacitly that upon getting married, a woman employee shall be
deemed separated, or to actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely by reason of her marriage.
PT&T vs. NLRC
272 SCRA 596
“In the case at bar, PT&T’s policy of not accepting or considering as
disqualified from work any woman worker who contracts marriage runs
afoul of the test of, and the right against, discrimination, afforded all
women worker’s by our labor laws and by no less than the Constitution.
Xxx
Art 136 is not intended to apply to only women employed in
ordinary occupations, or it should have categorically expressed so. The
sweeping intendment of the law, be it on special or ordinary occupations,
is reflected in the whole text and supported by Art 135 that speaks of non-
discrimination on the employment of women.
Petitioner’s policy is not only in derogation of Art 136 of the Labor
Code on the right of the woman to be free from any kind of stipulation
against marriage in connection with her employment, but it likewise
assaults good morals and public policy, tending to deprive a woman of
Personal Notes of Janine J. Sarausos
freedom to choose her status, a privilege that by all accounts inheres in
the individual as an intangible and inalienable right.”
3. Prohibition against child discrimination 153
Article 140. Prohibition Against Child Discrimination. No employer
shall discriminate against any person in respect to terms and conditions of
employment on account of his age.
4. Minimum Employable Age
Article 139. Minimum Employable Age.
(a) No child below 15 years of age shall be employed, except 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.
(b) Any person between 15 and 18 years of age may be employed for such
number of hours and such periods of the day as determined by the Secretary
of Labor in appropriate regulations.
(c) The foregoing provisions shall in no case allow the employment of a
person below 18 years of age in an undertaking which is hazardous or
deleterious in nature as determined by the Secretary of Labor.
Note: Sec. 12 of RA 7610 amended Art 139 and provides instances where children
below 15 years old may be employed. This is further amended by RA 9231 which
provides:
Sec. 12. Employment of Children. — Children below fifteen (15) years of
age shall not be employed except:
1) When a child works directly under the sole responsibility of his/her
parents or legal guardian and where only members of his/her family are
employed: provided, however, that his/her employment neither endangers
his/her life, safety, health, and morals, nor impairs his/her normal
development: provided, further, that the parent or legal guardian shall
provide the said child with the prescribed primary and/or secondary
education; or
2) Where a child's employment or participation in public entertainment or
information through cinema, theater, radio, television or other forms of
media is essential: provided, that the employment contract is concluded by
the child's parents or legal guardian, with the express agreement of the child
concerned, if possible, and the approval of the Department of Labor and
Page 11 of 145

Employment: provided, further, that the following requirements in all
instances are strictly complied with:
(a) The employer shall ensure the protection, health, safety, morals and
normal development of the child;
(b) The employer shall institute measures to prevent the child's exploitation
or discrimination taking into account the system and level of remuneration,
and the duration and arrangement of working time; and
(c) The employer shall formulate and implement, subject to the approval
and supervision of competent authorities, a continuing program for training
and skills acquisition of the child.
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.
For purposes of this Article, the term "child" shall apply to all persons
under eighteen (18) years of age."
Sec. 14, RA 7610. Prohibition on the Employment of Children in Certain
Advertisements. - No person shall employ child models in all commercials
or advertisements promoting alcoholic beverages, intoxicating drinks,
tobacco and its byproducts and violence.
DO NO. 065-04 (Rules and regulations of RA 9231)
SECTION 3. Definition of Terms. — As used in these Rules, the term:
(b) "Child labor" refers to any work or economic activity performed
by a child that subjects him/her to any form of exploitation or is harmful to
his/her health and safety or physical, mental or psychosocial development.
(c) "Working child" refers to any child engaged as follows:
i. when the child is below eighteen (18) years of age, in work or
economic activity that is not child labor as defined in the immediately
preceding subparagraph; and
ii. when the child is below fifteen (15) years of age, (i) in work where
he/she is directly under the responsibility of his/her parents or legal
guardian and where only members of the child's family are employed; or (ii)
in public entertainment or information.
Personal Notes of Janine J. Sarausos
(k) "Hours of work" include (1) all time during which a child is
required to be at a prescribed workplace, and (2) all time during which a
child is suffered or permitted to work. Rest periods of short duration during 153
working hours shall be counted as hours worked.
(l) "Workplace" refers to the office, premises or worksite where a
child is temporarily or habitually assigned. Where there is no fixed or
definite workplace, the term shall include the place where the child actually
performs work to render service or to take an assignment, to include
households employing children.
(q) "Forced labor and slavery" refers to the extraction of work or
services from any person by means of enticement, violence, intimidation or
threat, use of force or coercion, including deprivation of freedom, abuse of
authority or moral ascendancy, debt bondage or deception.
(r) "Child pornography" refers to any representation of a child
engaged in real or simulated explicit sexual activities or any representation
of the sexual parts of a child for primarily sexual purposes.
SECTION 4. General Prohibition. — Except as otherwise provided in
these Rules, no child below 15 years of age shall be employed, permitted or
suffered to work, in any public or private establishment.
SECTION 5. Prohibition on the Employment of Children in Worst
Forms of Child Labor. — No child shall be engaged in the worst forms of
child labor. The phrase "worst forms of child labor" shall refer to any of the
following:
(a) All forms of slavery, as defined under the "Anti-trafficking in
Persons Act of 2003", or practices similar to slavery such as sale and
trafficking of children, debt bondage and serfdom and forced or compulsory
labor, including recruitment of children for use in armed conflict.
(b) The use, procuring, offering or exposing of a child for prostitution,
for the production of pornography or for pornographic performances;
(c) The use, procuring or offering of a child for illegal or illicit
activities, including the production or trafficking of dangerous drugs or
volatile substances prohibited under existing laws; or
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(d) Work which, by its nature or the circumstances in which it is
carried out, is hazardous or likely to be harmful to the health, safety or
morals of children, such that it:
i. Debases, degrades or demeans the intrinsic worth and dignity of a
child as a human being; or
ii. Exposes the child to physical, emotional or sexual abuse, or is
found to be highly stressful psychologically or may prejudice morals; or
iii. Is performed underground, underwater or at dangerous heights; or
iv. Involves the use of dangerous machinery, equipment and tools
such as power-driven or explosive power-actuated tools; or
v. Exposes the child to physical danger such as, but not limited to the
dangerous feats of balancing, physical strength or contortion, or which
requires the manual transport of heavy loads; or
vi. Is performed in an unhealthy environment exposing the child to
hazardous working conditions, elements, substances, co-agents or processes
involving ionizing, radiation, fire, flammable substances, noxious
components and the like, or to extreme temperatures, noise levels or
vibrations; or
vii. Is performed under particularly difficult conditions; or
viii. Exposes the child to biological agents such as bacteria, fungi,
viruses, protozoa, nematodes and other parasites; or
ix. Involves the manufacture or handling of explosives and other
pyrotechnic products.
SECTION 6. Prohibition on the Employment of Children in Certain
Advertisements. — No child below 18 years of age shall be employed as a
model in any advertisement directly or indirectly promoting alcoholic
beverages, intoxicating drinks, tobacco and its by-products, gambling or
any form of violence or pornography.
SECTION 7. Exceptions and Conditions. — The following shall be the
only exceptions to the prohibition on the employment of a child below 15
years of age:
Personal Notes of Janine J. Sarausos
(a) When the child works under the sole responsibility of his/her
parents or guardian, provided that only members of the child's family are
employed. 153
(b) When the child's employment or participation in public
entertainment or information is essential, regardless of the extent of the
child's role.
Such employment shall be strictly under the following conditions:
i. The total number of hours worked shall be in accordance with
Section 15 of these Rules;
ii. The employment does not endanger the child's life, safety, health
and morals, nor impair the child's normal development;
iii. The child is provided with at least the mandatory elementary or
secondary education; and
iv. The employer secures a work permit for the child in accordance
with Section 8–12 of these Rules.
SECTION 15. Hours of Work of a Working Child. The following hours of
work shall be observed for any child allowed to work under Republic Act No. 9231
and these Rules:
(a) For a child below 15 years of age, the hours of work shall not be more than
twenty (20) hours as week, provided that the work shall not be more than four hours
at any given day;
(b) For a child 15 years of age, but below 18, the hours of work shall not be more
than eight hours a day, and in no case beyond 40 hours a week; and
(c) No child below 15 year of age shall be allowed to work between eight o’clock in
the evening and six o’clock in the morning of the following day and no child 15
years of age but below 18 shall be allowed to work between ten o’clock in the
evening and six o’clock in the morning of the following day.
Sleeping time as well travel time of a child engaged in public entertainment or
information from his/her residence to his/her workplace shall not be included as
hours worked without prejudice to the application of existing rules on employees
compensation.
SECTION 22. Grounds for Suspension and Cancellation of
Work Permit. — The Regional Director shall suspend or cancel the work
permit issued to a working child under the following instances:
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(a) If there is fraud or misrepresentation in the application for work
permit or any of its supporting documents;
(b) If the terms and conditions set forth in the child's employment
contract and/or employer's undertaking have been violated;
(c) If the employer fails to institute measures to ensure the protection,
health, safety, morals, and normal development of the child as required in
Section 7 (b)ii;
(d) If the employer fails to formulate and implement a program for the
education, training and skills acquisition of the child; or
(e) If a child has been deprived access to formal, non-formal or
alternative learning systems of education.
SECTION 23. Violations Not Resulting in Death, Insanity or Injury of
the Child. — The Regional Director, after due notice and hearing, and
without prejudice to the filing of the appropriate criminal and civil actions,
shall:
(a) In case of a first violation, issue a compliance order for immediate
restitution and correction of the violation. Failure to comply with said order
constitutes a second violation;
(b) In case of a second violation, issue a compliance order for
immediate restitution and correction of the violation and prohibit the
employer from hiring a child for six months commencing from date of last
offense. Failure to comply with said order constitutes a third violation; and
(c) In case of a third violation, issue a compliance order for immediate
restitution and correction of the violation. Failure to comply with said order
constitutes a fourth violation justifying closure of the establishment.
In appropriate cases, the Regional Director may file against the
employer a case for indirect contempt as provided for under Rule 71 of the
Revised Rules of Court.
Hazardous Workplaces
Section 8, Rule I, Book IV – The Bureau of Labor Standards shall,
with the approval of the Secretary of Labor, issue from time to time a
detailed list of hazardous workplaces for purpose of this Rule, in
addition to the following:
Personal Notes of Janine J. Sarausos
(a) Where the nature of the of the work exposes the workers to
dangerous environment elements, contaminants or work conditions
including ionizing radiations, chemicals, fire, flammable substances, 153
noxious components and the like.
(b) The workers are engaged in construction work, logging, fire-
fighting, mining, quarrying, blasting, stevedoring, dock work, deep
sea fishing and mechanized farming.
(c) Where the workers are engaged in the manufacture or
handling of explosive and other pyrotechnic products.
(d) Where the workers use or are exposed to heavy or power-
driven machinery or equipment.
(e) Where workers use or are exposed to power-driven tools.
Note: As regards the employment of a person 15, 16, 17 years old, you have
to make a qualification whether the undertaking or establishment is
hazardous or not. How do we know that it is hazardous or not?
Department Order No. 4-1999 shows what establishments have been
classified by the DOLE as hazardous.
Section 2. Policy.- a.) the employment of a person below eighteen (18)
years of age in an undertaking which is hazardous or deleterious in
nature as identified in this Guidelines shall be prohibited.
b. the employment of children below fifteen (15) years in any
undertaking is likewise prohibited, EXCEPT only in employment that
would not endanger their life, safety, health and morals, or impair their
normal development, and in any even subject to the requirement of RA
7658.
Sec. 3. Coverage. xxx
1. Work which exposes children to physical, psychological or sexual
abuse (eg: lewd shows, cabarets, bars, dance halls and bath houses
and massage clinics)
2. Work underground, under water, at dangerous heights or at
unguarded heights of two meters and above, or in confined places
Page 14 of 145

(eg: painting buildings, window cleaning, fruit picking involving
climbing)
3. Work with dangerous machinery, equipment and tools, or which
involves manual handling or transport of heavy tools. (eg. Working
in airport hangars, warehouses, in docks)
4. Work in an unhealthy environment which may expose children to
hazardous processes, to temperatures, noise levels or vibrations
damaging to their health, to toxic, corrosive, poisonous, noxious,
explosive, flammable and combustible substances or composites,
to harmful biological agents, or to other dangerous chemicals
including pharmaceuticals.
5. Work under particularly difficult conditions such as work for long
hours or during the night, or work where the child is unreasonably
confined to the premises of the employer.
Sec. 4. Applicability of this Guideline to Domestic or Household
services.- persons between 15 and 18 years of age may be allowed to
engage in domestic or household service, subject in all cases to the
limitations prescribed in nos. 1 to 5 of Section 3 herein.
Technical Guidelines for Classifying Hazardous and Non-Hazardous
Establishments, Workplaces and Work Processes (DOLE Memorandum
Circular No. 2-1998)
Section 3. Criteria for Classifying Hazardous Establishments or
Workplaces.
An establishment or workplace may be classified as hazardous if any of
the conditions provided under Rule 1013 of the OSHS has been confirmed,
as follows:
(a) Where the nature of the of the work exposes the workers to dangerous
environment elements, contaminants or work conditions including ionizing
radiations, chemicals, fire, flammable substances, noxious components and
the like;
Personal Notes of Janine J. Sarausos
(b) Where the workers are engaged in construction work, logging, fire-
fighting, mining, quarrying, blasting, stevedoring, dock work, deep sea
fishing and mechanized farming; 153
(c) Where the workers are engaged in the manufacture or handling of
explosives and other pyrotechnic products;
(d) Where the workers use or are exposed to power-driven or explosive
powder actuated tools; and
(e) Where the workers are exposed to biologic agents like bacteria and
fungi, viruses, protozoa, nematodes and other parasites.
5. Yellow Dog Contract.
Art. 248 (b). Unfair labor practices of employers. - It shall be unlawful for
an employer to commit any of the following unfair labor practice:
xx (b) To require as a condition of employment that a person or an
employee shall not join a labor organization or shall withdraw from one to
which he belongs;
B. Under Special Laws:
1. RA 7610, which amended Article 139 of the LC
Article VII, Section 12. Children below 15 years of age shall not be
employed, except:
(1) When a child works directly under the sole responsibility of his parents
or legal guardian and where only members of the employer’s family are
employed; Provided:
(a) His employment neither endangers his life, safety, health and
morals, nor impairs his normal development;
(b) The parent or legal guardian shall provide the said minor child with
the prescribed primary and secondary education;
(c) The employer shall first secure, before engaging such child a work
permit from DOLE which shall ensure observance of the above
requirements.
(2) When the child’s employment or participation in public and
entertainment or information through cinema, theater, radio or television is
essential; Provided:
Page 15 of 145

(a) The employer shall ensure the protection, health, safety, and morals
of the child;
(b) The employer shall institute measures to prevent the child’s
exploitation or discrimination taking into account the system and level
of remuneration, and the duration and arrangement of working time;
(c)The employer shall formulate and implement, subject to the approval
and supervision of competent authorities, a continuing program for
training and skills acquisition of the child;
(d) The employer shall first secure, before engaging such a child, a
work permit from DOLE which shall ensure observance of the above
requirements;
(e) The employment contract is concluded by the child’s parents or
legal guardian with the express agreement of the child concerned, if
possible.
Article VII, Section 14. No person shall employ child models in all
commercials or advertisements promoting alcoholic beverage, intoxicating
drinks, tobacco and its by-products and violence.
2. RA 7877 or the Anti-Sexual Harassment Act of 1995
Section 3(a). In a work-related environment, sexual harassment is
committed when:
(1) A sexual favor is made as a condition in the hiring or in the
employment, reemployment, or continued employment of said individual.
3. RA 7277 or the Magna Carta of Disabled Persons
Sec. 32. Discrimination on Employment. — No entity, whether public
or private, shall discriminate against a qualified disabled person by reason
of disability in regard to job application procedures, the hiring, promotion,
or discharge of employees, employee compensation, job training, and other
terms, conditions, and privileges of employment. The following constitute
acts of discrimination:
(a) Limiting, segregating or classifying a disabled job applicant in such a
manner that adversely affects his work opportunities;
(b) Using qualification standards, employment tests or other selection
criteria that screen out or tend to screen out a disabled person unless such
Personal Notes of Janine J. Sarausos
standards, tests or other selection criteria are shown to be job-related for the
position in question and are consistent with business necessity;
(c) Utilizing standards, criteria, or methods of administration that: 153
(1) have the effect of discrimination on the basis of disability; or
(2) perpetuate the discrimination of others who are subject to
common administrative control.
(d) Providing less compensation, such as salary, wage or other forms of
remuneration and fringe benefits, to a qualified disabled employee, by
reason of his disability, than the amount to which a non-disabled person
performing the same work is entitled;
(e) Favoring a non-disabled employee over a qualified disabled employee
with respect to promotion, training opportunities, study and scholarship
grants, solely on account of the latter's disability;
(f) Re-assigning or transferring a disabled employee to a job or position he
cannot perform by reason of his disability;
(g) Dismissing or terminating the services of a disabled employee by reason
of his disability unless the employer can prove that he impairs the
satisfactory performance of the work involved to the prejudice of the
business entity: Provided, however, That the employer first sought to
provide reasonable accommodations for disabled persons;
(h) Failing to select or administer in the most effective manner employment
tests which accurately reflect the skills, aptitude or other factor of the
disabled applicant or employee that such tests purports to measure, rather
than the impaired sensory, manual or speaking skills of such applicant or
employee, if any; and
(i) Excluding disabled persons from membership in labor unions or similar
organizations.
Sec. 5. Equal Opportunity for Employment. - No disable person shall
be denied access to opportunities for suitable employment. A qualified
disabled employee 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.
Sec. 4. Definition of Terms. — For purposes of this Act, these terms
are defined as follows:
(a) Disabled persons are those suffering from restriction or different
Page 16 of 145

abilities, as a result of a mental, physical or sensory impairment, to
perform an activity in the manner or within the range considered
normal for a human being;
(c) Disability shall mean 1) a physical or mental impairment that
substantially limits one or more psychological, physiological or
anatomical function of an individual or activities of such individual; 2)
a record of such an impairment; or 3) being regarded as having such an
impairment;
(d) Handicap refers to a disadvantage for a given individual, resulting
from an impairment or a disability, that limits or prevents the function
or activity, that is considered normal given the age and sex of the
individual;
(k) Marginalized Disabled Persons refer to disabled persons who lack
access to rehabilitative services and opportunities to be able to
participate fully in socioeconomic activities and who have no means of
livelihood and whose incomes fall below the poverty threshold;
(l) Qualified Individual with a Disability shall mean an individual
with a disability who, with or without reasonable accommodations, can
perform the essential functions of the employment position that such
individual holds or desires. However, consideration shall be given to
the employer's judgment as to what functions of a job are essential, and
if an employer has prepared a written description before advertising or
interviewing applicants for the job, this description shall be considered
evidence of the essential functions of the job;
Case: BERNARDO vs. NLRC, G.R. No. 122917, 12 July 1999: “The fact
that the employees were qualified disabled persons necessarily removes the
employment contracts from the ambit of Article 80. Since the Magna Carta
accords them the rights of qualified able-bodied persons, they are thus covered
by Article 280 of the Labor Code. x x x The noble objectives of Magna Carta
for Disabled Persons are not based merely on charity or accommodation, but on
justice and the equal treatment of qualified persons, disabled or not. In the
present case, the handicap of petitioners (deaf-mutes) is not a hindrance to their
work. The eloquent proof of this statement is the repeated renewal of their
employment contracts. Why then should they be dismissed, simply because
they are physically impaired? The Court believes, that, after showing their
Personal Notes of Janine J. Sarausos
fitness for the work assigned to them, they should be treated and granted the
same rights like any other regular employees.”
153
Updates on this matter:
RA 9432 or "Magna Carta for Public Social Workers."
SEC. 4. Coverage. - This Act shall cover all registered social workers
employed in the government service.
SEC. 5. Recruitment and Qualifications. - The selection and
appointment of social workers shall be in accordance with the merit and
fitness principle.
All government social work agencies and institutions shall be headed by
registered social worker except for cabinet and non-career positions.
Priority shall be given to registered social workers in filling up social work
positions in the government.
4. RA 8791 or the General Banking Laws of 2000
Section 55.4. No bank shall employ casual or non-regular personnel or
too lengthy probationary personnel in the conduct of its business involving
deposits.
Reason: There is a possibility on the part of the mentioned employees
to disclose confidentiality of bank deposits. They have no security of
tenure.
5. Sec. 35, RA 8504 (Philippine AIDS Prevention and Control Act of
1998)
SEC. 35.Discrimination in the Workplace. – Discrimination in any form
from pre-employment to post-employment, including hiring, promotion or
assignment, based on the actual, perceived or suspected HIV status of an
individual is prohibited. Termination from work on the sole basis of actual,
perceived or suspected HIV status is deemed unlawful.
6. RA 9208 "Anti-Trafficking in Persons Act of 2003".
Page 17 of 145

SEC.3. Definition of Terms. - Forced Labor and Slavery - refer to the
extraction of work or services from any person by means of enticement,
violence, intimidation or threat, use of force or coercion, including
deprivation of freedom, abuse of authority or moral ascendancy, debt-
bondage or deception.
7. Section 4. Acts of Trafficking in Persons. - It shall be unlawful for any
person, natural or juridical, to commit any of the following acts:
(a) To recruit, transport, transfer; harbor, provide, or receive a person by any
means, including those done under the pretext of domestic or overseas
employment or training or apprenticeship, for the purpose of prostitution,
pornography, sexual exploitation, forced labor, slavery, involuntary
servitude or debt bondage;
(h) To recruit, transport or adopt a child to engage in armed activities in the
Philippines or abroad.
LABOR LAWS RESTRICTING THE RIGHTS OF THE EMPLOYER
DURING EMPLOYMENT
1. Article 135 – Stipulation Against Marriage
ART. 135. Discrimination prohibited. -
The following are acts of discrimination:
(a) Payment of a lesser compensation, including wage, salary or other form
of remuneration and fringe benefits, to a female employees as against a
male employee, for work of equal value; and
(b) Favoring a male employee over a female employee with respect to
promotion, training opportunities, study and scholarship grants solely on
account of their sexes.
Criminal liability for the willful commission of any unlawful act as
provided in this Article or any violation of the rules and regulations issued
pursuant to Section 2 hereof shall be penalized as provided in Articles 288
and 289 of this Code: Provided, That the institution of any criminal action
under this provision shall not bar the aggrieved employee from filing an
entirely separate and distinct action for money claims, which may include
claims for damages and other affirmative reliefs. The actions hereby
Personal Notes of Janine J. Sarausos
authorized shall proceed independently of each other. (As amended by
Republic Act No. 6725, May 12, 1989).
153
2. Article 136 – Discrimination Prohibited
ART. 136. Stipulation against marriage. - It shall be unlawful for an
employer to require as a condition of employment or continuation of
employment that a woman employee shall not get married, or to stipulate
expressly or tacitly that upon getting married, a woman employee shall be
deemed resigned or separated, or to actually dismiss, discharge,
discriminate or otherwise prejudice a woman employee merely by reason of
her marriage.
OTHER RELEVANT RECENT LAWS:
1. Sec. 33 (b), Art. IV of RA 7920. New Electrical Engineering Law
(b) Industrial plants or factories, commercial establishments, or institutional
buildings having a connected Kva load of any size and employing voltages
of any standard rating - one (1) professional electrical engineer or one (1)
registered electrical engineer. However, for connected loads up to five
hundred kilovolt-amperes (500 Kva) and employing voltages up to six
hundred volts (600 V) - one (1) registered master electrician; Provided,
however, That in all the aforementioned cases, additional qualified
personnel shall be employed to ensure safe operation and safeguard public
welfare, life and property: Provided, further, That when the operation
requires more than one shift of personnel every twenty-four (24) hours, the
minimum complement of qualified personnel shall be employed in each
shift.
This section, however, shall not apply to any installation which has a
connected load of fifty kilovolt-amperes (50 Kva) or less and employs
voltages of not more than two hundred fifty volts (250 V) and for
installations which are designed to be automatic and do not require resident
personnel for their safe operation: Provided, however, That their
maintenance and repair shall be under the charge of a duly registered
personnel: Provided,further, That a yearly inspection will be conducted and
certified to be in a safe operating condition by a professional electrical
engineer, a registered electrical engineer, or a registered master electrician.
Page 18 of 145

2. Sec. 34 (c), Art. IV, RA 8495. "Philippine Mechanical Engineering Act of
1998."
SEC. 34. Personnel Required in Mechanical Plant. – Every
mechanical work project or plant in operation shall have not less than the
following complement of resident licensed professional mechanical
engineer, mechanical engineer or certified plant mechanic:
c) Over 2000 kw: one (1) professional mechanical engineer: Provided,
That every mechanical work, project or plant in this category operating in
more than one shift every twenty-four (24) hours shall have, in addition to
the minimum personnel herein required at least one (1) professional
mechanical engineer in-charge of each and every additional shift.
Note: RA 7920 requires compulsory employment of Engineers. But, to
decide whether contract or employment is at the option of employer excepr
sec. 33. The same applies with RA 8495.
PART I: LABOR STANDARDS TOPICS
TOPIC 4: WAGES AND WAGE RATIONALIZATION ACT
II. CONCEPT OF WAGES
WAGE (Article 97f) – includes not just remuneration of services but
also fair and reasonable value, as determined by the Secretary of Labor of
board, lodging or other facilities customarily furnished by employer to
employee.
Wage versus Salary
1. Songco vs. NLRC, 183 SCRA 618: “Wage and salary have the same
etymology. While they have the same concept, distinctions have to be
made. WAGE is compensation more for skilled or unskilled manual
laborers. SALARY pertains to white collar workers and those of a
higher or grade of employment, superior grade of services and
Personal Notes of Janine J. Sarausos
position of office.The nature of the work of a salesman and the reason
for such type of remuneration for services rendered demonstrate
clearly that commissions are part of petitioners’ wage or salary. We 153
take judicial notice of the fact that some salesmen do not receive any
basic salary but depend on commissions and allowances or receive any
basic salary but depend on commissions and allowances or
commissions alone, although an employer-employee relationship
exists.”
2. Iran vs. NLRC, 289 SCRA 433 (1998): Commissions are considered
wage because Article 97 defines wage as to include payment of
remuneration in the form of commission. The definition of WAGES in
Article 97 (f) explicitly includes commissions as part of wages. While
commissions are indeed, incentives or forms of encouragement to inspire
employees to put a little more industry on the jobs particularly assigned to
them, still these COMMISSIONS are direct remunerations for services
rendered.
3. Gaa vs. CA, 140 SCRA 304: Wage of the employee is exempt from
garnishment. Under the Civil Code, there is a provision on the
exemption of the employee’s wage from garnishment. The SC was
able to apply this provision. Thus, article 1708 of the Civil Code
which exempts “laborer’s wage” from attachment or execution does
NOT apply to a responsibly placed employee, supervisory or
managerial employee, but only to rank-and-file.
4. EQUITABLE BANKING CORP. vs. SADAC, G.R.
No. 16477, June 8, 2006: In General Baptist Bible College
v. National Labor Relations Commission, We held that: The term
‘backwages without qualification and deduction’ means that the
workers are to be paid their backwages fixed as of the time of the
dismissal or strike without deduction for their earnings elsewhere
during their layoff and without qualification of their wages as thus
fixed; i.e., unqualified by any wage increases or other benefits that
may have been received by their co-workers who are not dismissed or
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did not go on strike. Awards including salary differentials are not
allowed. The salary base properly used should, however, include not
only the basic salary but also the emergency cost of living allowances
and also transportation allowances if the workers are entitled thereto."
II. CONCEPT OF FACILITIES AND FACILITIES
FACILITIES – are items of expense necessary for the laborer’s and his
family’s existence and subsistence. These are deductible from the
employees wage but for fair and reasonable value only. Eg. Transportation
allowance.
"Fair and reasonable value" shall not include any profit to the employer or to
any person affiliated with the employer (Art. 97, LC).
Requisites for FACILITIES to be considered as an integral part of an
employee’s wage:
1. Must be customarily furnished by the employer to the employees;
2. Must be charged at a fair and reasonable value; and
3. The provision on deductible facilities must be voluntarily accepted
by the employee in writing.
Cases:
1. Mabeza vs. NLRC, 271 SCRA 670: “More significantly, the food and
lodging, or the electricity and water consumed by the petitioner were not
facilities but supplements. A benefit or privilege granted to an employee
for the convenience of the employer is NOT a facility. The criterion in
making a distinction between the two not so much lies in the kind (food,
lodging) but the purpose. Considering, therefore, that hotel workers are
required to work different shifts and are expected to be available at various
odd hours, their ready availability is a necessary matter in the operations of
a small hotel, such as private respondent’s hotel.”
2. Millares vs. NLRC, 305 SCRA 50: “CUSTOMARY is founded on long-
established and constant practice connoting regularity. The receipt of an
allowance on a monthly basis does not ipso facto characterize it as a regular
and forming part of salary because the nature of the grant is a factor worth
Personal Notes of Janine J. Sarausos
considering. We agree with the observation of the Solicitor General that the
subject allowances were, temporarily, not regularly, received by the
petitioners because – In the case of housing allowance, once a vacancy 153
occurs in the company-provided housing accommodations, the employee
concerned transfers to the company premises and his housing allowance is
discontinued x x x x On the other hand, the transportation allowance is in he
form of advance for actual transportation expenses subject to liquidation x x
x given only to employees who have personal cars. The Bislig allowance is
given to Division managers and corporate officers assigned in Bislig,
Surigao del Norte. Once the officer is transferred outside Bislig, the
allowance stops.
SUPPLEMENTS – constitute extra remuneration or special privileges or
benefits given to or received by the laborers over and above their ordinary
earnings or wages. This is not deductible from the wage. Eg. 13th month
pay, vacation leave and OT.
TEST: Depends on the purpose, and not on the kind.
BASIC WAGE means all the remuneration or earnings paid by an
employer to a worker for services rendered on normal working days and
hours but does not include cost of living allowances (COLA), profit sharing
payments, premium payments, 13th month pay or other monetary benefits
which are not considered as part or integrated into the regular salary of the
workers.
STATUTORY MINIMUM WAGE is the lowest rate fixed by law that an
employer can pay his worker.
Basis: “Fair day’s wage for a fair day’s labor (If they are performing
similar functions and responsibilities under similar working conditions,
should be paid).”
Principles of “Fair day’s wage for a fair day’s labor” If there is no
work performed by the employee there can be no wage or pay unless the
laborer was able, willing and ready to work but was prevented by
management or was illegally locked out, suspended or dismissed.
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Nature and purpose of Minimum Wage Law:
1. To equalize bargaining power of labor and management.
2. Serve as preventive measure (How? Before industrial dispute on
wage rate arises, the issue is already settled. The minimum wage
law sets the limit upon which wages may not fall, thereby creating
competition of wages at a high level.
3. Its advantage is that it upgrades the morale of the workers.
Disadvantages of the Minimum Wage Law:
1. Tends to become the maximum
2. Tends to lead to unemployment, as when companies cannot open
for inability to meet and sustain the required minimum wage.
III. METHODS OF FIXING COMPENSATION (ART. 98, LC)
1. Time (daily and monthly paid workers)
The standard forms of compensation is based on time spent are salaries
or wages by the day, by the week and by the month. No work no pay is
applicable.
Under this method, once the agreed PERIOD of WORK is completed,
the compensation is earned and becomes due regardless of result. The
employee is paid regardless of the outcome of the work and whether he
finishes it or not.
Daily paid workers
Those who are paid on the day actually worked EXCEPT unworked
regular holidays when they are paid their basic wage if they are present or
on leave with pay on the working day preceding the regular holiday. Given
to manual and lower clerical wokers. Advantage: flexibility.
Monthly paid workers
Those who are paid everyday of the month including unworked rest
day, special day and regular holidays. It is the standard compensation rate
for managerial personnel, professional and administrative employees and
other white collar workers including clerical employees and higher grade
skilled workers. Advantage: higher morale and relative economy in record
keeping.
Personal Notes of Janine J. Sarausos
(for the divisors: See RTWPB wage order which changes depending on
economic outbreaks) 153
2. Commission or by the result
Commission is the recompense, compensation or reward of an agent,
salesman, executor, trustee, receiver, factor, broker or bailee, when the
same is calculated as a percentage on the amount of his transactions or on
the profit to the principal. A percentage or a fraction of the proceeds
resulting from the sales or similar transactions, effected is fixed. Pure
commission is applicable to barbershop etc or where there is sale of goods
or service. Advantage: to spur to effort and efficiency, since compensation is
payable only on resultant proceeds. Disadvantage: contingent. The earnings
may fall below the prescribed minimum.
3. Job or task basis
A flat or fixed sum is paid for each particular job or task completed,
without regard to the number of hours actually spent in the performance or
completion. This is appropriate only under the following conditions:
a. the work is susceptible of being segregated into standardized and
similar units each known as “job” or”task”; and
b. such in the nature of the job or task that the expenditures of time,
materials and effort for aech is substantially the same as for any
other. Example are construction of mass housing (by unit
completed)
4. Piece-rate basis (payment by results) [Section 8, Rule VII, Book III]
Under this method, a worker is 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. This method is permissible
under the following condition:
a. the finished product are things, articles or commodities, which are
physically discrete or distinct but fungible, in that one unit is much
like any other in value and physical qualities, such as cigarettes,
candy bars.
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b. The labor contributed by each worker to a particular process or
phase of production is determinable, and separable from that
contributed by others. This is important when a finished product
undergoes several distinct and separate stages, e.g. (1) making of
candy; (2) wrapping such candy; (3) packing in boxes.
c. The value of the labor input for any particular stage is standard,
that is, such input is worth he same regardless of the particular
worker who does it.
Cases:
1. Labor Congress of The Philippines vs. NLRC, 290 SCRA 509: “3
Factors lead us to conclude that petitioners, although piece-rate workers,
were regular employees of private respondents:
1. As to the nature of petitioners’ tasks, their job of repacking snack
food was necessary or desirable in the usual business of private
respondents, who were engaged in the manufacture and selling of
such food products;
2. Petitioners worked for private respondents throughout the year, their
employment not having been dependent on a specific project or
season; and
3. The length of time that petitioners worked for private respondents.
2. Villuga vs. NLRC, 225 SCRA 537: “ The respondent Commissioner is
in error. The mere fact that petitioners were paid on a piece-rate basis is no
argument that herein petitioners were not employees. The term “wage” has
been broadly defined in Article 97 as remuneration or earnings, capable of
being expressed in terms of money whether fixed or ascertained on a time,
task, piece or commission basis x x x.
The facts of this case indicate that payment by the piece is just a
method of compensation and does not define the essence of the relations.
That petitioners were allowed to perform their work at home does not
likewise imply absence of control and supervision. The control test calls
merely for the existence of a right to control the manner of doing the work,
not the actual exercise of the right.
Personal Notes of Janine J. Sarausos
Tailors and similar workers hired in the tailoring department although
paid weekly wages or piece-work basis are employees not independent
contractors.” 153
Distinction from job rate. In piece work, the unit of work completed is
performed by the worker alone while in job or task work, two or more
workers cooperate and work together to perform the job or task.
Similarity between “time spent method” and payment by result method ( job
rate and piece rate). Earnings are fairly certain because pay is earned upon
completion of the period in the case of time spent, and of the task or unit, in
the case of payment by result.
Difference. Unlike the time method of fixing compensation in which
effort, regardless of outcome or result, must be paid, in payment by result
methods, acceptable and completed outputs are required as a basis for
payment. Hence, payment of wages is geared, not merely to effort, but to
results from effort.
5. Boundary system
under this method, the personnel of public utility vehicles pay a fixed
charge per day or a fraction thereof to the employer, and take a portion of
their earnings the excess of the gross proceed for the day over the
“boundary fee” and the expenses of running the vehicle.
Relevance of knowing these methods of payment:
1. These are very important in relation to persons or employees who
are exempted from enjoying the benefits under the Labor Code.
Because under Article 82, workers paid by results are exempted
from overtime pay, service incentive leave, etc. (Conditions of
Employment)
2. 13th month pay- excludes the purely paid on commission basis and
the job and task paid.
IV. FIXING THE EMPLOYEE’S WAGE (RTWPB)
Methods of Minimum Wage adjustment:
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1. Floor wage method- fixing of determinate amount to be added to
the prevailing statutory minimum wage rate. This is the root cause
of wage distortion. It was adopted by earlier wage orders.
2. Salary ceiling method- wage adjustment is applied to employees
receiving a certain denominated (minimum) salary ceiling. This is
adopted by RA 6640 and RA 6727.
Reason for the shift from the first to the second:
a. Brought by labor disputes arising from wage distortions, as
consequence of the implementation of the wage order.
b. The latter minimized wage disputes.
Cases:
1. Pag-asa steel works vs. CA, March 31, 2005- “no right to wage
increase for employees receiving above minimum wage; no across-the-
board effect (apply to all without discrimination)
2. Metropolitan Bank vs NWPC, GR No. 144322, Feb. 6, 2007- “when
it issues a wage order, the RTWPB exercises quasi-legislative power, and
not quasi-judicial power. The decision of the RTWPB is appealable to the
NWPC and not to the CA (from there, Rule 65 to CA).
TOPIC 5. DETERMINATION OF WAGES
A. WAGE RATIONALIZATION ACT (RA 6767)
Date of effectivity: July 1, 1989
Declared Policy:
1. Rationalize fixing of minimum wage
How? 1st, by providing for full-time boards to police wages round-the-
clock.
2nd, by giving the boards enough powers to achieve this objective.
Also because of Article 124 which provides for the standards and criteria
that should guide the agency of government when it comes to fixing the
minimum wage. It is noted that under the standard criteria, that the
Personal Notes of Janine J. Sarausos
Congress has tried to weigh the factors involving the employers, as well as
the factors involving the laborers when it comes to fixing of employee’s
wage in order to rationalize it. 153
Article 124. Standards or Criteria for Minimum Wage Fixing.
1. The demand for living wages;
2. Wage adjustment vis-à-vis the consumer price index;
3. The cost of living and changes or increases therein;
4. The needs of workers and their families;
5. The need to induce industries to invest in the countryside;
6. Improvements in standards of living;
7. The prevailing wage levels;
8. Fair return of the capital invested and capacity to pay of employers;
9. Effects on employment generation and family income; and
10. The equitable distribution of income and wealth along with the
imperatives of economic and social development.
Case in point: Ilaw at Buklod ng Manggagawa vs. NLRC, 198 SCRA 586
(1991): It goes without saying that these joint or concerted activities (strike,
picketing and boycotts) may be forbidden or restricted by law or contract. In
the particular instance of “distortions of the wage structure within an
establishment” resulting from the “application of any prescribed wage
increase by virtue of a law or specific wage order,” section 3 of RA 6727
prescribes a specific, detailed and comprehensive procedure for the
correction thereof, thereby implicitly excluding strikes or lockout or other
concerted activities as a modes of settlement of disputes.
2. promote productivity improvement and gain-sharing measures
3. guarantee rights of labor to its just share in the fruits of the
production
4. allow business and industry reasonable returns of investment,
expansion and growth.
Case in point: Cagayan Sugar Milling vs. Secretary or Labor, G.R. No.
128399. January 15, 1998: “In passing RO2-02-A without going through
the process of public consultation and hearings, the Regional Board
deprived petitioner and other employers of due process as they were not
Page 23 of 145

given the opportunity to ventilate their positions regarding the proposed
wage increase.
In wage-fixing, factors such as fair return of capital invested, the
need to induce industries to invest in the countryside and the capacity of
employers to pay are, among others, taken into consideration. Hence, our
legislators provide for the creation of Regional Tripartite Boards composed
of representatives from the government, the workers and the employers to
determine the appropriate wage rates per region to ensure that all sides are
heard.
For the same reason, Article 123 of the Labor Code also provides
that in the performance of their wage-determining functions, the Regional
Board shall conduct public hearings and consultations, giving notices to
interested parties. Moreover, it mandates that the Wage Order shall take
effect only after publication in a newspaper of general circulation in the
region. It is a fundamental rule, borne out of a sense of fairness, that the
public is first notified of a law or wage order before it can be held liable for
violation thereof.”
5. The state shall also promote collective bargaining as the primary
mode of setting wages and other terms and conditions of employment; and
whenever necessary, the minimum wage rates shall be adjusted in a fair and
equitable manner, considering existing regional disparities in the cost-of-
living and other socio-economic factors and the national economic and
social development plans.
. engaged in the production, processing or manufacturing of
Wage fixing authority: Regional Tripartite Wages and Productivity
Board (RTWPB)
Composition of the Board:
1) Regional Director of the DOLE as Chairman
2) Regional Directors of NEDA and DTI as Vice Chairmen
3) 2 members each from the workers and employers sector who
shall be appointed by the President of the Philippines, upon
recommendation of the Secretary of the DOLE
4) Each Regional Board to be headed by its Chairman shall be
assisted by a Secretariat
Personal Notes of Janine J. Sarausos
Important Powers and Functions of the Board:
1. Determine and fix minimum wage rates applicable in their region, 153
provinces or industries therein, and to issue corresponding wage
orders, subject to guidelines issued by the National Wages and
Productivity Commission;
2. To receive, act and process application for exemptions from
prescribed wage rate as may be provided by law or any wage order.
Exemption from minimum wage rate:
1. Under the Labor Code (Art.98, LC):
1. Household or domestic helpers and persons employed in the
personal service of another, including family drivers;
2. Retail or service establishments regularly employing not more than
10 workers, upon application;
Service establishment- refers to one principally engaged in
the sale of services to individuals for their own or household use
and is generally recognized as such.
Retail establishment- refers to one principally engaged in the
sale of goods to end users for personal or household use.
3. Distressed employers or establishments whose capital has been
impaired by at least 25%, upon application;
4. RA 9178: "Barangay Micro Business Enterprise," hereinafter
referred to as BMBE, refers to any business entity or enterprise
products or commodities, including agro-processing, trading and
services, whose total assets including those arising from loans but
exclusive of the land on which the particular business entity's
office, plant and equipment are situated, shall not be more than
Three Million Pesos (P3,000,000.00).
2. by application of NWPC Guidelines series of 1996
Note: this is not automatic but must file a petition with the RTWPB with
jurisdiction of the establishment.
Cases: Wage Exemption
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1. RCPI vs. National Wages Council, 207 SCRA 581: “The purpose
of wage exemptions is to help financially distressed companies meet
their labor costs without endangering the existence or viability of the
firm upon which both management and labor depend for a living.
Under the spirit of Wage Order No. 6, it is the actual ability of a
firm to spend for its current needs and costs and not how the assets
and liabilities of a firm may appear in the technical jargon of higher
accounting principles which is important. True, the retained earnings
account constitutes a company's accumulated profits of losses.
However, it is not enough to treat said earnings as "earnings" in the
real sense of the word for purposes of wage exemptions.
NWC decided to give RCPI a breathing spell because of
numerous obligations that the company had to meet. Under a
compromise agreement, RCPI bound itself to pay 30% of whatever
was due the employees under PD 1713 for the mandatory third year
increases and Wage Order No. 1 for the first and second year. The
balance of 70% was subject to negotiations. (See G.R. No. 77503,
Buklod ng Manggagawa v. Sanchez, supra, Rollo, p. 168). NWC
found that RCPI's compliance with the Wage Orders would result in
the company's financial dislocation and, accordingly, granted it the
prayed for exemption. We see no reason from the records why a
different treatment should apply in the following year. Simply because
there were changes or transfers of the same items to differently named
accounts in the books of the company, it does not follow that it thereby
ceased to be entitled to exemptions.
2. Joy Brothers vs. NWPC, 273 SCRA 622(Distressed Establishment):
NWPC Revised Guidelines provides that it may be exempted
upon application and due determination by the board. The criteria for
exemption for Distressed Establishments are as follows:
(a) In case of a stock corporation, partnership, single
proprietorship, non-stock, non-profit organization or
cooperative engaged in a business activity or charging fees for
its services –
Personal Notes of Janine J. Sarausos
a.1 When accumulated losses for the last 2 full accounting
periods and interim period, if any, immediately preceding the
effectivity of the Order have impaired by at least 25% the: 153
-- Paid-up capital at the end of the last full accounting period
preceding the effectivity of the Order, in case of corporations.
-- Total invested capital at the beginning of the last full
accounting period preceding the effectivity of the Order in the
case of partnerships and single proprietorships.
a.1.1 Establishments operating for less than 2 years may be
granted exemption when accumulated losses for said period
have impaired by at least 25% the paid-up capital or total
invested capital, as the case may be.
Section 8, paragraph a, of the Rules Implementing Wage
Order No. NCR-03 provides that exemption from compliance
with the wage increase may be granted to distressed
establishments whose paid-up capital has been impaired by at
least 25% or which registers capital deficiency or negative net
worth.
3. C. Planas Commercial vs. NLRC, 303 SCRA 49 (Retail Establishment):
Section 4 (c) of RA 6727 categorically provides: Retail or
service establishments regularly employing not more than 10 workers may
be exempted from the applicability of this Act upon application with and as
determined by the appropriate Regional Board in accordance with the
applicable rules and regulations issued by the Commission. Whenever an
application for exemption has been duly filed with the appropriate Regional
Board, action on any complaint for alleged non-compliance with this Act
shall be deferred pending resolution of the application for exemption by the
appropriate Regional Board. In the event that the applications for
exemptions are not granted, employees shall receive the appropriate
compensation due them as provided for by this Act plus the interest of 1%
per month retroactive to the effectivity of this Act (emphasis supplied).
4. Nasipit Lumber vs. NWPC, 289 SCRA 667: “The power to prescribe
guidelines is lodged in the NWPC, not in the RTWPB. This is clearly
Page 25 of 145

provided for in Article 121 of RA 6727, amending the Labor Code. it grants
the NWPC, not the RTWPB, the power to prescribe rules and guidelines for
the determination of minimum wage and productivity measure.
While the RTWPB may issue wage orders under Article 122(b) of the
Labor Code, such orders must be under the guidelines of the NWPC.
However, the NWPC has the power not only to prescribe guidelines to
govern wage but also to issue exemptions therefrom, as the said rule
provides that whenever a wage order provides for an exemption, application
thereto must be filed with the appropriate Board which shall process the
same, subject to guidelines which the RTWPB implements. Significantly,
the NWPC authorized the RTWPB to issue exemptions from wage orders,
but subject to its review and approval. Since the NWPC never assented to
Guideline No.3 of the RTWPB, the said guideline is inoperative and cannot
be used by the latter in deciding or acting on petitioners’ application for
exemption.
NATIONAL WAGES AND PRODUCTIVITY COMMISSION (NWPC)
appellate agency. This is not the same as the NLRC.
Composition:
a) Secretary of Labor and
Employment as ex-officio chairman
b) Director-General of NEDA
as vice ex-officio chairman
c) 2 members from worker’s
sector
d) 2 members from employee’s
sector
Note: Power to issue Rules on exemption, NWPC; Power to
grant exemptions, RTWPB.
Revised Rules of Procedure on Minimum Wage fixing:
[see: NWPC Guidelines No. 001-95 (appendix 1)
and NWPC GUIDELINES NO. 01-96(appendix 2)]
1. Initiation: 2 ways of minimum wage fixing ( Rule II Section 3):
Personal Notes of Janine J. Sarausos
1. Motu Proprio by the RTWPB or as directed by the NWPC
(whenever conditions in the region, province or industry so warrant)
2. Through a verified petition filed by a legitimate labor 153
organization or a party who stands to be directly affected and with
substantial interest.
2. Board Action: examination by the Board of the petition as to form and
substance (grounds relied upon, amount of wage increase sought and area
and industry covered)
3. Consolidation of petitions
4. Publication of Notice of Petition/Public Hearing in a newspaper of
general circulation in the region and/or posted in public places as
determined by the Board. The publication or posting shall be made at least
15 days before the date of initial hearing and shall be in accordance with the
suggested form.
5. Opposition
6. Public hearing conducted either by Board en banc or by a duly
authorized committee thereof.
Hearings shall be conducted as soon as practicable, preferably within
45 days from date of initial hearing EXCEPT when conditions in the Region
warrant otherwise (Secs 3 and 4 of Rule III).
7. Issuance of wage order within 30 days after conclusion of the last
hearing and which shall in NO case be lower than the applicable statutory
minimum wage rate.
WAGE ORDER refers to the Order promulgated by the Board pursuant to
its wage fixing authority.
Contents: the region, province or industry which the minimum wage
prescribed shall apply, and the exemptions, if any (art. 123,LC)
Effectivity (Section 4): A Wage Order shall take effect 15 days after its
publication in at least 1 newspaper of general circulation in the region
Frequency of Wage Order (Section 3)
General Rule: Any Wage Order issued by the Board may not be
disturbed for a period of 12 months from its effectivity. And no petition for
wage increase shall be entertained within the said period.
Page 26 of 145

Exception: In the event, however, that supervening conditions (such
as extraordinary increase in prices of petroleum products and basic goods
and services), demand a review of the minimum wage rates as determined
by the Board and confirmed by the Commission, the Board shall proceed to
exercise its wage fixing function even before the expiration of the period
(12 months).
Reason: The petitions would clog the Board dockets unreasonably.
REMEDY AGAINST WAGE ORDER: Appeal to the NWPC.
Who may appeal: Any party aggrieved.
How? By filing a verified appeal with the Board to the National Wages and
Productivity Commission, in 3 typewritten legible copies, not later than 10
days from the date of publication of the Order. Accompanied by a
Memorandum of Appeal which shall state the grounds relied upon and the
arguments in support of the appeal. The Board shall serve notice of the
appeal to concerned parties.
Grounds for Appeal (Section 2)
(a) Non-conformity with prescribed guidelines and/or procedures
(b) Questions of law (Rule 45)- doubts on law applicable on the matter
oron the proper interpretation of the same.
(c) Grave abuse of discretion (Rule 65), as when the Board
deliberately ignores evidence of either parties when such is crucial
in the resolution of the case, or when the Board acts whimsically.
Period to Act on Appeal (Section 4): The Commission shall decide on the
appeal within 60 days from the filing thereof.
Effect of Appeal (Section 5): The filing of the appeal does not operate to
stay the Order unless the party appealing such Order shall file with the
Commission an undertaking with a surety or sureties satisfactory to the
Commission for payment to employees affected by the Order of the
corresponding increase, in the event such Order is affirmed.
Prohibition Against Injunction (sec. 7, RA 6727): No preliminary or
permanent injunction or temporary restraining order may be issued by any
Personal Notes of Janine J. Sarausos
court, tribunal or any other entity against any proceeding before the
Commission or Board.
153
REMEDY FROM THE DECISION OF THE NWPC:
No appeal from the decision of the NWPC. The legal remedy is by
means of Special Civil Action of Certiorari under Rule 65 to the Court of
Appeals within the period of 60 days. Note: Don’t forget to file MR first
before Cetiorary.
Case in point: St. Martin’s Funeral Home vs. NLRC, G.R. 130856,
September 16, 1998: “The Judiciary Reorganization Act, BP 129,
reorganized the Court of Appeals and at the same time expanded its
jurisdiction and powers. Among others, its appellate jurisdiction was
expanded to cover not only the final judgment of the RTC, but also all final
judgments, decisions, resolutions, orders, or awards of quasi-judicial
agencies, instrumentalities, boards and commissions, except those falling
within the appellate jurisdiction of the Supreme Court in accordance with
the Constitution, the provisions of BP 129 and of subparagraph 1 of the
third paragraph and subparagraph 4 of Section 17 of the Judiciary Act of
1948.”
Remedy from the decision of the Court of Appeals:
From the decision of the Court of Appeals ruling on the denial of the
petition for certiorari, a motion for reconsideration can still be filed within
15 days. If denied by the CA, the legal remedy is Rule 45 to the Supreme
Court on question of law.
Penalties for Violation of Prescribed Increases or Adjustment in the Wage
Rates (RA 8188):
1. Fine of not less than Twenty-five thousand pesos (P25.000) nor
more than One hundred thousand pesos (P100.000); or
2. Imprisonment of not less than two (2) years nor more than four (4)
years; or
3. both such fine and imprisonment at the discretion of the court.
Provided. That any person convicted under this Act shall not be
Page 27 of 145

entitled to the benefits provided for under the Probation Law.
The employer concerned shall be ordered to pay an arnount equivalent
to double the unpaid benefits owing to the employees: Provided. That
payment of indemnity shall not absolve the employer from the criminal
liability imposable under this Act.
If the violation is committed by a corporation, trust or firm, partnership,
association or any other entity, the penalty of imprisonment shall be
imposed upon the entity's responsible officers including but not limited to
the president, vice president, chief executive officer, general manager,
managing director or partner.
ENFORCEMENT OF WAGE ORDERS
Compliance with the wage orders issued by the Board shall be enforced
by the appropriate regional office of DOLE through its visitorial and
enforcement powers embodied in Arts. 128 and 129 of the Labor Code.
1. VISITORIAL POWER. Under this, the Secretary of Labor or his
duly authorized representatives, including labor regulation officers,
have access to employer’s records and premises at any time of the
day or night whenever work is being undertaken therein, and the
right to copy therefrom, to question any employee and investigate
any fact, condition or matter which maybe necessary to determine
violations or which may aid in the enforcement of the Code.
Usually, an affidavit is taken from an employee as to wage
received, etc. the statements are then verified by requiring the
employer to produce the payroll.
2. ENFORCEMENT POWER. Violations discovered in the course of
the inspection are rectified through the use of enforcement power.
Under this, the Regional Director, as representative of the SOLE,
or the Secretary himself, has the power to order and administer,
after due notice and hearing, compliance with the labor standards
provisions and to issue writs of execution to the appropriate
authority for the enforcement of their orders, EXCEPT:
a. In cases where the employer contest the findings of the
labor regulations officer AND raises issues which cannot
be resolved without considering evidentiary matters that
are not verifiable in the normal course of inspections (Art.
128, LC); or
Personal Notes of Janine J. Sarausos
b. In cases where the employer contests the findings of the
labor employment officer and raises issues supported by
documentary proofs which were not considered in the 153
course of inspection.
(note: documentary proofs not on evidentiary matter)
When non-compliance with the law or implementing rules and
regulations poses grave and imminent danger to the health and safety of
workers, STOPPAGE OF WORK or SUSPENSION OF OPERATIONS,
may be ordered by SOLE. A hearing shall be conducted (w/n 24hrs) from
the issuance of the Order, to determine whether an order for the stoppage of
work or suspension of operations shall be lifted.
If the violation is attributable to the fault of the employer, the affected
employees shall be entitled to their salaries or wages during the period of
such stoppage of work or suspension of operation. (but if the employer is
without fault: no work no pay)
REVIEW OF ENFORCEMENT POWER. “An order issued by the duly
authorized representative of the SOLE under this Article may be appealed to
the latter. In case said order involves a monetary award, an appeal by the
employer may be perfected only upon the posting of a cash or surety bond
issued by a reputable bonding company duly accredited by the SOLE in the
amount equivalent to the monetary award in the order appealed from. (As
amended by Sec. 1, par. 2, RA No. 7730, June 2, 1994).”
Graphical presentation of Visitorial Power (Art. 128)
Issue inspection authority
Inspection report by the Regional Director
Embodied in
Notice of Inspection Result by the Regional Director
appeal no appear/ No appeal
Protest of Notice of Inspection Result Final and executory
on or before the hearing of the NOIR
contest the findings w/ documentary proofs . Order of Complaince (RD)
RD indorse it to summary no MR allowed w/n
the appropriate and not NOA 7 calendar days
Page 28 of 145
 Personal Notes of Janine J. Sarausos

branch or NLRC adversarial beyond that, 3.

The aggregate claim to the employer does not exceed
Note: w/o considering the evidence writ of Treat as appeal. P5,000.00, including legal interest.
Labor Arbiter execution 4. The claim arises from employer-employee relationship. 153
In the absence of the foregoing requisites, the Labor Arbiter have
NLRC Appeal to SOLE w/n 10 days exclusive original jurisdiction.
Rule 43 With bond.( Final and
CA then to SC Rule 65 executory)
CA
Cases: Art. 128 Visitorial & enforcement ART. 129. Recovery of wages,
power simple money claims and other
1. EJR Crafts Corp. vs. CA, Mar. 10, 2006- Visitorial power of the RD of
benefits.
the DOLE under Art. 128; no denial of due process since employer failed to empowers the Secretary of Labor or empowers only the regional director
contest the notice of inspection results. any "duly authorized representative or authorized hearing officer
2. Ex- Bataan Veterans Security Agency vs. SOLE GR 152396, Nov. 20, covers all matters affected by the refers only to money claims and
2007. Visitorial power of the RD of the DOLE under Art. 128 can be validly Labor Code or any labor law benefits
exercised even if the claim exceeds p5,000.00. Jurisdictional limits in Art 129 do The regional director's authority
not apply to the exercise of powers under Art, 129 is subject to four
2. ADJUDICATORY POWER. Art. 129 of the Labor Code vests upon under Art 128. Par B of Art 128 was requisites.
the Regional Director of Dole the authority to hear and decide claims changed to its present wording by
for wages or monetary benefits amounting to NOT more than RA 7730 purposely to strengthen the
P5,000.00 filed by the employees or househelpers who do NOT seek visitorial enforcement power by
reinstatement. freeing it from the limitations of Art
The adjudicatory power is different from the enforcement power in 129,
the sense that the adjudicatory power is set into motion with the filing A decision under Art. 128, on the A decision under this Article, being
of the complaint, while the enforcement is an offshoot of the exercise other hand, is administrative and adjudicatory in nature, is appealable
of the visitorial power. therefore appealable to the Secretary to the National Labor Relations
of Labor who is the administrative Commission (NLRC)
Requisites for the exercise of a valid adjudicatory power: superior of all regional directors of
1. Claim shall be filed by a househelper or an employee or a the Department.
person employed in a domestic or household service;
2. The claimant, no longer being employed, does not seek Note:
reinstatement. This is because the nature of the proceedings Articles 128 and 129 are operative only in the context of employment
before the Regional Director is summary and prayer for relationship. A regular court; not DOLE or NLRC, has Jurisdiction over
reinstatement requires a full-blown hearing. claim of an independent contractor to adjust contractual fee.

See also:
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1. DO NO. 57-04, Series of 2004 (appendex3)
2. Revised Rules on Disposition of Labor Standard Cases, Series of
1987 (appendix 4)
3. Department Order No. 7-A series of 1995 (appendix 5)
4. DOLE Memo Circular No. 02-A series of 1992 (appendix 6)
Cases:
1. Rajah Humabon Hotel vs. Trajano, 226 SCRA 394 “ On the supposed
restrictive application of Article 217(6) of the Labor Code only to domestic
workers, it may be recalled that the DOLE emphasized that said proviso is
inapplicable to private respondents since the latter are not domestic
workers. But the prefatory statement of Article 217 speaks loudly about the
original and exclusive jurisdiction of the Labor Arbiters over all workers,
whether agricultural or non-agricultural, subject to particular cases specified
therein.
2. Guico vs. SOLE, 298 SCRA 666 “The Supreme Court sustained the
jurisdiction of the respondent Secretary. As the respondent correctly
pointed out, the SC’s ruling in the Servando case – that the visitorial
power of the SOLE to order and enforce compliance with labor
standard laws cannot be exercised where the individual claim exceed
P5,000 can no longer be applied in view of the enactment of RA 7730
amending Article 128(b) of the Labor Code.
Article 128(b) clearly provides that the appeal bond must be “in the
amount equivalent to the monetary award in the order appealed from.”
The record shows that the petitioner failed to post the required amount
of the appeal bond. His appeal was therefore not perfected.”
Personal Notes of Janine J. Sarausos
3. M. Ramirez Industry vs. SOLE, 266 SCRA 111 “If the individual
claims of employees exceed P5,000 and, even if they do not, if they include
claims for reinstatement, the matter falls within the original and exclusive 153
jurisdiction of the Labor Arbiter.
Moreover, petitioner is estopped from questioning the jurisdiction of
the Regional Director, having previously invoked it by filing a motion
to dismiss. As has been held: a party cannot invoke the jurisdiction of
a court to secure affirmative relief against his opponent and, after
obtaining or failing to obtain such relief, repudiate or question that
same jurisdiction.
The Regional Director may not be divested of jurisdiction over these
claims, unless the following elements are present:
(a) That the petitioner (employer) contests the findings of the labor
regulation officer and raises issues thereon;
(b) That in order to resolve such issues, there is need to examine
evidentiary matters; and
(c) That such matters are not verifiable in the normal course of
inspection.”
4. Batong Buhay Gold vs. de la Cerna, 312 SCRA 28
TOPIC 6: WAGE DISTORTION (ART. 124, LC)
– a situation where an increase in prescribed wage rates results in the
elimination or severe contraction of intentional quantitative differences in
wage or salary rates between and among employee groups in an
establishment as to effectively obliterate the distinctions embodies in such
wage structure based on skills, length of service, or other logical bases of
differentiation. (Article 124)
When does wage distortion happen?: It happens when the employer
grants an increase only to a certain group of employees drastically reducing
or eliminating the normal salary differential or gap.
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Possible Causes of Wage Distortion:
1) Government decreed increase thru wage orders
2 kinds of wage orders:
a. The Congress provides for a statutory minimum wage (during
the martial law era) and an increase is given and added to the
daily wage.
b. With the passage of RA 6727, instead of providing for a fixed
amount for an increase, the wage order now fixes a minimum
wage below which the wages cannot fall.
2) Merger of establishments (confusion or elimination of the
status of employee)
3) Increase granted by employers
4) Passage of RA 6727 or the Wage Rationalization Act
Effects on Existing Wage Structure. (Section 16, IRR of RA 6727)
Where the application of the wage increase prescribed herein results in
DISTORTIONS in the wage structure within an establishment which gives
rise to dispute therein, such dispute shall:
(a) First be settled voluntarily between the parties
(b) In the event of deadlock, such dispute shall be
finally resolved through compulsory arbitration by the Regional
Arbitration Branch of the NLRC having jurisdiction in the workplace.
Elements of Wage Distortion:
1. Existing hierarchy of positions with corresponding salary rates.
2. Significant change in the salary rate of a lower pay class without a
concomitant increase in the salary rate of the higher one.
3. The elimination of the distinction between the two levels (severe
contraction)
4. Existence of the distortion in the same region of the country.
Correction of Wage Distortion:
Personal Notes of Janine J. Sarausos
(1) For wage distortion caused by RA 6727, Sec. 16 of the Rules of
Implementing RA 6727:
Effects on Existing Wage Structure. - Where the application of the 153
wage increase prescribed herein results in distortions in the wage
structure within an establishment which gives rise to a dispute therein,
such dispute shall first be settled voluntarily between the parties. In the
event of a deadlock, such dispute shall be finally resolved through
compulsory arbitration by the regional arbitration branch of the
National Labor Relations Commission (NLRC) having jurisdiction over
the work place.
The NLRC shall conduct continuous hearings and decide any
dispute arising from wage distortion within 20 calendar days from the
time said dispute is formally submitted to it for arbitration The
tendency of a dispute arising from a wage distortion shall not in any
way delay the applicability of the increases in the wage rates prescribed
under the Act.
Any issue involving wage distortion shall not be a ground for a
strike/lockout
(2) For wage distortion caused by LAW or WAGE ORDER, Rule 7 on
Rules of Procedure on MW fixing:
a. For non-unionized
establishment/ not organized
1. The employer and the workers should negotiate to correct the
distortion.
2. If negotiations fail, the matter should be brought to the
National Conciliation and Mediation Board (NCMB).
3. If no settlement is arrived at after 10 calendar days of
conciliation, the dispute should be brought to the appropriate
branch of the NLRC, which shall conduct continuous hearings
and decide the dispute within 20 calendar days from the time
said dispute is submitted for compulsory arbitration.
The pendency of a dispute arising from a wage distortion shall not
in any way delay the applicability of any increase in the prescribed wage
rates pursuant to the provisions of the wage order.
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Any issue involving wage distortion shall NOT be a ground for
strike/lock out.
Diagram:
Negotiation of parties
National Conciliation and Mediation Board (NCMB)
Compulsory Arbitration [Jurisdiction: LA (basis: 2005 NLRC, Rule V, Sec.
1 (h)]
Appeal
NLRC (Art. 223,LC)
Rule 43
CA (then SC)
b. For unionized/ organized establishment:
Any dispute arising from wage distortion shall be resolved through the
grievance procedure under their CBA and if it remains unresolved, through
voluntary arbitration. [jurisdiction of VA: art. 261 and 262, LC]
Unless otherwise agreed by the parties in writing, such dispute shall be
decided by the voluntary arbitrator or panel of voluntary arbitrators within
10 days from the time said dispute was referred for voluntary arbitration.
Q1: remedy from the decision of Voluntary Arbitrator?
A: Rule 43 of the ROC, to CA since VA’s decision is final and executor
thus, file TRO and writ of Preliminary injunction.
Q2: in case of wage distortion, is the employer obliged to give wage
increase to those affected?
A: not necessarily. Employers are only obliged to negotiate to correct wage
distortion.
Reasons why a STRIKE or LOCKOUT is prohibited:
(1) RA 6727 provides for a procedure in settling disputes (Article 124)
Personal Notes of Janine J. Sarausos
(2) RA 6727 (Section 2) provides that it is the policy of the state to
promote collective bargaining as the primary mode of settling
wages and other terms and conditions of employment. 153
(Ilaw at Buklod ng Manggagawa vs. NLRC, 198 SCRA 586)
National Federation of Labor vs. NLRC, 234 SCRA 311
Correction of a wage distortion may be done by reestablishing a
substantial or significant gap between the wage rates of the differing classes
of employees. It must be a reasonable but NOT necessarily a historical gap.
Should a wage distortion exist, there is not legal requirement that, in
the rectification of that distortion by readjustment of the wage rates of the
differing classes of employees, the gap which had previously or historically
existed be restored in precisely the same amount. In other words, correction
of a wage distortion may be done by reestablishing a substantial or
significant gap (as distinguished from the historical gap) between the wage
rates of differing classes of employees.
When the employer has no financial resources to correct wage distortion,
the following may be availed of:
1. employer may not grant the full wage increase deemed necessary to
correct the distortion. Bu the wage increase prescribed in the wage order
must be given in full.
2. retrenchment
3. temporary lay-off
4. adopt cost cutting measures
Q3: what is the preferred [and promoted] primary mode of settling disputes
on wages?
A: Collective bargaining.
Grievance Machinery or Procedure (Article 260)
The parties to a collective bargaining agreement shall establish a
machinery for the adjustment and resolution of grievances arising from:
 The interpretation or implementation of CBA
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 The interpretation or enforcement of company personnel
policies (the voluntary arbitrator shall have exclusive and original
jurisdiction to hear and decide such grievances which remain
unresolved after exhaustion of grievance procedure)
All grievances submitted to the grievance machinery which are not
settled within 7 calendar days from the date of its submission shall
automatically be referred to VOLUNTARY ARBITRATION prescribed in
the CBA.
For this purpose, parties to a CBA shall
 Name and designate in advance a Voluntary Arbitrator or panel of
Voluntary Arbitrators, or
 Include in the agreement a procedure for the selection of such
Voluntary Arbitrator or panel of Voluntary Arbitrators, preferably from
the listing of qualified Voluntary Arbitrators duly accredited by the
Board.
In case the parties fail to select a Voluntary Arbitrator or panel of
Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrators,
as may be necessary, pursuant to the selection procedure agreed upon in the
CBA, which shall act with the same force and effect as if the Arbitrator or
panel of Arbitrators has been selected by the parties as prescribed.
Note: The judge in voluntary arbitration is called ARBITRATOR while that
in compulsory arbitration is called LABOR ARBITER.
LABOR ARBITRATION – reference of a labor dispute to a third party for
determination on the basis of evidence and arguments presented by such
parties, who are bound to accept the decision.
Arbitration may be classified on the basis of obligation on which it is
based, it may either be:
1. VOLUNTARY ARBITRATION – a contractual proceeding
whereby the parties to any dispute or controversy in order to obtain a
speedy and inexpensive final disposition of the matter, select a judge of
their own choice and by consent, submit their controversy to him for
Personal Notes of Janine J. Sarausos
determination (this is pursuant to a voluntary arbitration clause in the CBA).
Their decision is a final and binding resolution.
VOLUNTARY ARBITRATOR – means 153
(1) Any person accredited by the Board as such,
or
(2) Any person named or designated in the CBA
by the parties to act as their voluntary arbitrator, or
(3)One chosen, with or without the assistance of the NCMB,
pursuant to a selection procedure agreed upon in the CBA,
or
(4) Any official that may be authorized by the Secretary of Labor to
act as voluntary arbitrator upon the written request and agreement
of the parties to a labor dispute.
2. COMPULSORY ARBITRATION – process of settlement of labor
disputes by a government agency (or by other means provided by the
government) which has the authority to investigate and to make award
which is binding on all the parties.
ORGANIZED ESTABLISHMENT – refers to a firm or a company where
there is a recognized or certified exclusive bargaining agreement.
UNORGANIZED ESTABLISHMENT – where there is no recognized
union or collective bargaining agreement.
Cases: Wage Distortion
1. Prubankers Association vs. Prudential Bank and Trust
Company, 302 SCRA 74. “ Wage distortion presupposes an
increase in the compensation of lower ranks in an office
hierarchy without a corresponding raise for higher-tiered
employees in the same region of the country, resulting in the
elimination or the severe diminution of the distinction between
the two groups.
Such distortion does not arise when a wage order gives the
employees in one branch of a bank higher compensation than
Page 33 of 145

that given to their counterparts in other regions occupying the
same pay scale, who are not covered by the said wage order.
In short, the implementation of the wage orders in one region
but not in others does not in itself necessarily result in wage
distortion.”
2. Employees Confederation vs. NWPC, 201 SCRA 759. “The
NWPC noted that the determination of wages has generally
involved 2 methods, the floor wage method and the salary-
ceiling method.
RA 6727 was intended to rationalize wages, first, by
providing for full-time boards to police wages round-the-clock,
and second, by giving the boards enough powers to achieve this
objective.
The Act is meant to rationalize wages, that is, by having
permanent boards to decide wages rather than leaving wage
determination to Congress year after year and law after law.
The court used the salary ceiling method to minimize wage
distortions.
The court is not convinced that the board is decreeing the
across the board hike, performed an unlawful act of legislation.
Though the wage fixing like rate fixing constitutes an act of
Congress, the latter may also delegate the power to fix rate
provided there are sufficient standards.”
3. Metrobank vs. NLRC, 226 SCRA 268. “WAGE
DISTORTION as defined under RA 6727 means a situation
where an increase in prescribed wage rate result in the
elimination as severe contraction of intentional quantitative
differences in wage or salary rates between and among
employee groups in an establishment as to effectively obliterate
the distinction embodied in such wage structure based on skill,
length of service, or other logical basis of differentiation.
Whether it exists is mainly a question of fact the
determination of which is the statutory function of the NLRC.
Personal Notes of Janine J. Sarausos
In this case majority of the members of the NLRC agree that
there is a wage distortion arising from the banks
implementation of a P25 wage increase.” 153
NOTE: From a P900 salary difference to only P150, the SC
said there is a distortion as there is SEVERE CONTRACTION,
not necessarily elimination.
4. Metro Transit Organization vs. NLRC, 245 SCRA 767.
“BONUS is an act of gratuity or an act of liberality wherein
the recipient has no right to demand as a matter of right. A
bonus however is demandable or an enforceable obligation
when it is made part of the wage or salary of an employee.
If it is an additional compensation which the employer
promised and agreed to give without any conditions such as
success in business or increase in output, then it is part of the
wage. But if it is paid only if profits are realized or if a certain
level of productivity is achieved, it cannot be considered as part
of the wage. Where it is not payable to all but only to some
employees ans only when their labor becomes more efficient or
productive, it is only an inducement for efficiency, a prize
thereof not a part of wage.
The demanded increase of SEAM is not a bonus and is an
enforceable obligation as far as supervisory employees of Metro
are concerned.
The wage distortion had been corrected. A substantial gap or
difference had been re-established between rank and file and
supervisory employees.”
5. Capitol Wireless vs. Bate, 246 SCRA 249.
Petitioner and private respondent NAFLU signed a CBA with
duration of 5 years. Included in the CBA is a provision stating
that “should there be any government mandated wage increase
allowance, the same shall be over and above the benefit
granted.”
Page 34 of 145
 Personal Notes of Janine J. Sarausos
The wage orders did not give across the board wage increases Regional Director
to all employees in the National Capital Region but limited such ART. 129. Recovery of wages,
increase only to those already receiving not more than simple money claims and other
P125/day. benefits. – Regional Director or
Since the wage order specified those who among the anyone duly authorized, through
employees are entitled to the statutory wage increases, then the summary proceeding and after due
increases applied only to those mentioned. The provisions of notice, to hear and decide any matter
the CBA should be read in harmony of the wage order whose involving the recovery of wages and
benefit be given only to the employees entitled thereby. other monetary claims and benefits,
including legal interest,
Common Procedure in Unorganized and Organized Establishments: 1. Owing to an employee or person
employed in domestic or household
 If negotiations fail, the matter shall be referred to the National service or househelper under this
Conciliation and Mediation Board (NCMB). Code, arising from employer-
 Now, the Hearing Officer of the NCMB will try to conciliate and employee relations:
mediate between the parties so that they will reach an AMICABLE 2. complaint does not include a
SETTLEMENT. claim for reinstatement;
 If an amicable settlement is not reached, the Hearing Officer of the 3. The aggregate money claims of
NCMB will advise the parties to submit the matter to VOLUNTARY each employee or househelper does
ARBITRATION. So, there is Voluntary Arbitration for both organized not exceed Five thousand pesos
and unorganized establishments. (P5,000.00).
Note: Any such sum not paid to the
employee or househelper because he
TOPIC 7: SIMPLE MONEY CLAIM cannot be located after diligent and
Diagram: reasonable effort to locate him
Complaint (with RD of DOLE) within a period of three (3) years,
shall be held as a special fund of the
Regional Director
5 calendar days (govern: art. 223; bond for perfection) Department of Labor and
Appeal to the NLRC Employment to be used exclusively
Rule 65 for the amelioration and benefit of
Court of Appeals workers.
JURISDICTION:
Labor Arbiter
ART. 217. Jurisdiction of the Labor
Arbiters and the Commission. - (a) 153
Except as otherwise provided under
this Code, LA shall have original
and exclusive jurisdiction to hear
and decide, within thirty (30)
calendar days after the submission
of the case by the parties for
decision without extension: xxx
3. If accompanied with a claim for
reinstatement, those cases that
workers may file involving wages,
rates of pay, hours of work and other
terms and conditions of
employment; and
6. Except claims for Employees
Compensation, Social Security,
Medicare and maternity benefits, all
other claims arising from employer-
employee relations, including those
of persons in domestic or household
service, involving an amount
exceeding five thousand pesos
(P5,000.00) regardless of whether
accompanied with a claim for
reinstatement.
Note: The Commission shall have
exclusive appellate jurisdiction
over all cases decided by Labor
Arbiters.
Decisions, awards, or orders of
the Labor Arbiter are final and
executory unless appealed to the
Page 35 of 145

Commission by any or both parties
within ten (10) calendar days from
receipt of such decisions, awards, or
orders (ART. 223, LC).
In any event, the decision of the
Labor Arbiter reinstating a appealable and is immediately executory, unless a motion is filed to set
dismissed or separated employee,
insofar as the reinstatement aspect is
concerned, shall immediately be
executory, even pending appeal. The
employee shall either be admitted
back to work under the same terms
and conditions prevailing prior to his
dismissal or separation or, at the
option of the employer, merely
reinstated in the payroll. The posting
of a bond by the employer shall not
stay the execution for reinstatement
provided herein (ibid).
COMPROMISE AGREEMENTS (ART. 227, LC). - Any compromise
settlement, including those involving labor standard laws, voluntarily
agreed upon by the parties with the assistance of the Bureau or the regional
office of the Department of Labor, shall be final and binding upon the
parties. The National Labor Relations Commission or any court, shall not
assume jurisdiction over issues involved therein except in case of non-
compliance thereof or if there is prima facie evidence that the settlement
was obtained through fraud, misrepresentation, or coercion.
Section 8, Rule II of the Rules on the Disposition of Labor Standards
Cases in the regional offices provides:
Should the party arrive at an agreement as to the whole or part of the
dispute, said agreement shall be—
a. Reduced to writing
b. Signed by the parties;
Personal Notes of Janine J. Sarausos
c. In the presence of the Regional
Director or his duly authorized representative,otherwise, they are
not deemed to be duly executed. 153
d.
Cases:
1. A judgment rendered In accordance with a compromise agreement is not
aside the agreement on the ground of fraud, mistake, or duress, in which
case an appeal may be taken against the order denying the motion, (Master
Tours and Travel Corp. vs. CA, 219 SCRA 321; United Housing Corp. vs.
Dayrit, 181 SCRA 235.)
2)A compromise agreement by union officers must be authorized by the
union members. The authority must be produced in evidence. Each laborer
must authorize the union officers to enter into a compromise before the
laborer's right may be affected. (Kaisahan ng mga Manggagawa sa La
Campana vs. Sarmtento, 133 SCRA 220 [1984],) See further discussion
under Art. 242.
Note: To be sure, not all quitclaims are per se invalid or against public
policy. But those:
(1) Where there is clear proof that the waiver was wrangled from an
unsuspecting or gullible person or
(2) Where the terms of settlement are unconscionable on their face are
invalid.
TOPIC 8. PAYMENT OF WAGES
II. FORMS OF PAMENT
General Rule: Wages shall be paid in legal tender, and the use of
tokens, promissory notes, vouchers, coupons, or any other form alleged to
represent legal tender is absolutely prohibited even when expressly
requested by the employee (Art. 102, LC)
Exception (Art. 102, LC): Payment of wages by checks, postal checks,
or money orders is allowed where such manner of wage payment is:
Page 36 of 145

a. Customary on the date of effectivity of the Labor Code
(November 1, 1974);
b. When it is stipulated in the CBA; or
c. When all the following conditions are met (Rule VIII, Book III,
Sec. 2 of the Omnibus Rules):
1. The payment of the check is with written consent of the
employees concerned [if there is no collective agreement
authorizing the payment of wages by bank checks]
2. There is a bank or other facility for encashment within a radius
of 1km. from the workplace;
3. The employer or any of his agent or representatives does not
receive any pecuniary benefit directly or indirectly from the
arrangement;
4. The employees are given reasonable time during banking hours
to withdraw their wages from the bank which time shall be
considered as compensable hours worked.
2. TIME OF PAYMENT/ FREQUENCY OF PAYMENT
Wages shall be paid not less than once every 2 weeks or twice a month
at intervals not exceeding 16 days, unless payment cannot be made with
such regularity due to force majeure or circumstances beyond the
employer’s control, in which case, the employer shall pay the wages
immediately after such force majeure or circumstances have ceased (Art.
103, LC).
3. PLACE OF PAYMENT
General Rule: The place of payment shall be at or near the place of
undertaking (reasons: convenience and security)
Exceptions, Sec. 4, Rule VII, Book III of the Omnibus Rule):
(1) When payment cannot be effected at or near the place of work by
reason of the deterioration of peace and order conditions, or by
reason of actual or impending emergencies caused by fire, flood,
epidemic or other calamity rendering payment thereat impossible;
(2) When the employer provides free transportation to the employees
back and forth; and
Personal Notes of Janine J. Sarausos
(3) Under any other analogous circumstances; Provided, That the
time spent by the employees in collecting their wages shall be
considered as compensable hours worked; 153
Prohibited place of payment. No employer shall pay his employees in any
bar, night or day club, drinking establishment, massage clinic, dance hall, or
other similar places or in places where games are played with stakes of
money or things representing money except in the case of persons employed
in said places.
Payment through banks (Book III, chapter 1, Rule VII, Rule SECTION
19), requisites:
1. upon written permission of the majority of the employees or workers
concerned;
2. all private establishments, companies, businesses, and other entities
with at least 25 or more employees;
3. located within 1 kilometer radius to a commercial, savings or rural
banks shall pay wages or benefits of their employees through any of
the banks;
4. within the period of payment of wages fixed by PD 442, the Labor
Code, as amended.
THRU ATM (DOLE Labor Advisory on Payment of Salaries Thru
ATM, Series of 1996), requisites:
1. The ATM system of payment is within the written consent of the
employees concerned;
2. The employees are given reasonable time to withdraw their wages
from the bank facilities which time, if done during working hours,
shall be considered as compensable hours;
3. The system shall allow workers to receive their wages within the
period or frequency and in the amount prescribed under the Labor
Code.
4. There is a bank or ATM facility within the radius of 1 kilometer to
the place of work.
Page 37 of 145

5. Upon the request of the concerned employee/s, the employer shall
issue a record of payment of wages, benefits, and deductions for a
particular period.
6. There shall be no additional expenses and no diminution of
benefits and privileges as a result of the ATM system of payment.
7. The employer shall assume responsibility in case the wage
protection provisions of law and regulations are not complied with
under the arrangement.
4. TO WHOM MUST WAGES BE PAID/ PAYEE
General Rule: Directly to the employee entitled thereto.
Exceptions (Rule VIII, Book III, Sec. 5):
(a) Where the employer is authorized in writing by the employee to
pay his wages to a member of his family;
(b) Where payment to another person of any part of the employee's
wages is authorized by existing law (ex., insurance premiums, union
dues); or
(c) In case of death of the employee, in which case, [compulsory] heirs
shall be required to execute an affidavit of heirship (Sec. 6, ibid); [pay
thru the intercession of the DOLE, then becomes valid payment; if with
two separate claimants, the remedy is INTERPLEADER].
(d) In case of force majeure, rendering direct payment impossible, in
which case the worker may be paid through another person under
written authority given by the worker for the purpose.
TOPIC 9. WAGE ROTECTION PROVISIONS AND PROHIBITIONS
REGARDING WAGES
1. Non-interference in disposal of wages (ART. 112, LC). - No employer
shall limit or otherwise interfere with the freedom of any employee to
dispose of his wages. He shall not in any manner force, compel, or oblige
his employees to purchase merchandise, commodities or other property
from any other person, or otherwise make use of any store or services of
such employer or any other person.
Personal Notes of Janine J. Sarausos
2. Deposits for loss and liabilities (ART. 115, LC) - No deduction from the
deposits of an employee for the actual amount of the loss or damage shall 153
be made unless the employee has been heard thereon, and his responsibility
has been clearly shown.
See also: ART. 114, LC. Deposits for loss or damage. - No
employer shall require his worker to make deposits from which
deductions shall be made for the reimbursement of loss of or damage to
tools, materials, or equipment supplied by the employer, except when
the employer is engaged in such trades, occupations or business where
the practice of making deductions or requiring deposits is a recognized
one, or is necessary or desirable as determined by the Secretary of
Labor and Employment in appropriate rules and regulations.
3. Deduction to ensure employment (ART. 117, LC) - It shall be unlawful
to make any deduction from the wages of any employee for the benefit of
the employer or his representative or intermediary as consideration of a
promise of employment or retention in employment.
This is an example of the employee gives consent but becomes
illegal if required for hiring because it is against public policy.
4. Retaliatory measures (ART. 118, LC). - It shall be unlawful for an
employer to refuse to pay or reduce the wages and benefits, discharge or in
any manner discriminate against any employee who has filed any complaint
or instituted any proceeding under this Title or has testified or is about to
testify in such proceedings.
5. False reporting (ART. 119, LC). - It shall be unlawful for any person to
make any statement, report, or record filed or kept pursuant to the
provisions of this Code knowing such statement, report or record to be false
in any material respect.
6. Withholding/ kickbacks (ART. 116, LC)- It shall be unlawful for any
person, directly or indirectly, to withhold any amount from the wages of a
worker or induce him to give up any part of his wages by force, stealth,
intimidation, threat or by any other means whatsoever without the worker’s
consent.
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7. Wage deduction (ART. 113, LC)- No employer, in his own behalf or in
behalf of any person, shall make any deduction from the wages of his
employees, except:
(a) In cases where the worker is insured with his consent by the employer,
and the deduction is to recompense the employer for the amount paid by
him as premium on the insurance;
(b) For union dues, in cases where the right of the worker or his union to
check-off has been recognized by the employer or authorized in writing by
the individual worker concerned
[Q: can an employee who is not a union member but has received benefits
because of the union, be lawfully deducted of union dues?
A: yen, I the form of agency fees wherein the union here is considered an
agent of the employee concerned]; and
(c) In cases where the employer is authorized by law or regulations issued
by the Secretary of Labor and Employment.
Summary on the rule regarding prohibition on wages:
General Rule: No employer shall limit or otherwise interfere with the
freedom of any employee to dispose of his wages. He shall not in any
manner force, compel, or oblige his employees to purchase merchandise,
commodities, or other property from the employer or from any other person,
or otherwise make use of any services of such employer or any other
person.
Except:
1. By specific requirement of law:
a. Deduction for income tax (CTRP)
b. Deductions for social security premiums (RA 1161)
c. Deductions for medical premiums (PD 1519)
d. Deductions for employee’s compensation premium (PD 442)
2. By specific authorization of law:
a. SEE art. 113, LC on exceptions
b. Facilities [Art. 97(f)]
c. In cases where the employee is indebted to the employer,
where such indebtedness has become due and demandable
(Art. 1706, NCC);
Personal Notes of Janine J. Sarausos
d. In court awards, wages may be the subject of execution or
attachment, but only for debts incurred for food, shelter,
clothing and medical attendance (Art. 1703, NCC). Eg. 153
Judgment for support.
e. For loss or damage, provided the following requisites are met:
i. The employee concerned must clearly shown to be
responsible for the loss or damage;
ii. The employee should be given reasonable
opportunity to show cause why deduction should not
be made;
iii. The amount to be deducted should be fair and
reasonable and should not exceed the actual loss or
damage; and
iv. The deduction should not exceed 20% of the
employee’s wage in week.
v. When the employer is engaged in such trade where
deposit is a recognized one or is necessary or
desirable as determined by the Secretary of Labor
(Sec. 11, Rule VIII, Book III, Omnibus Code).
f. Wage deduction, provided:
i. Authorized by law eg. Insurance premiums and check
or authorized in writing by the individual employee
himself;
ii. With the written authorization of the employees for
payment to a third person and the employer agrees to
do so, provided that the latter does not receive any
pecuniary benefit, directly or indirectly, from the
transaction (Sec. 10, Rule VIII, Book III).
Penalty in case of violation: Art. 288, RPC. Other similar coercions;
(Compulsory purchase of merchandise and payment of wages by means of
tokens.) — The penalty of arresto mayor or a fine ranging from 200 to 500
pesos, or both, shall be imposed upon any person, agent or officer, of any
association or corporation who shall force or compel, directly or indirectly,
or shall knowingly permit any laborer or employee employed by him or by
such firm or corporation to be forced or compelled, to purchase
merchandise or commodities of any kind.
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The same penalties shall be imposed upon any person who shall pay the
wages due a laborer or employee employed by him, by means of tokens or
objects other than the legal tender currency of the laborer or employee.
Case:
1. Special Steel Products vs. Villaruel, GR. No. 143304, July 8, 2004.
“What an employee has worked for, his employer must pay. Hence, an
employer cannot unilaterally withhold the 13th month pay and other benefits
of an employee who obtained a car loan with the bank, and guaranteed by
the employer, to recompense for whatever amount the employer paid as
security for the employee’s car loan without the consent of the employee.
2. Agabon vs. NLRC, G.R. No. 158693, November 17, 2004. “ SSS loan
and value of shoes cannot be deducted by the employer from the
employee’s 13th month pay without the knowledge and consent of the latter.
Principle of “Non-diminution of benefits”
Basis: ART. 100, LC. Prohibition against elimination or diminution of
benefits. - Nothing in this Book shall be construed to eliminate or in any
way diminish supplements, or other employee benefits being enjoyed at the
time of promulgation of this Code.
ART. 127, LC. Non-diminution of benefits. - No wage order issued by
any regional board shall provide for wage rates lower than the statutory
minimum wage rates prescribed by Congress.
Non-diminution of employees wage under RA 6727: Section 3.
Article 127. Non-diminution of Benefits.: No Wage Order issued by any
Regional Board shall provide for wage rates lower than the statutory
minimum rates prescribed by Congress.
Note: The employer id not allowed to withdraw, providing:
1. Given consistently
2. Given for a period of time as to ripen into vested right.
Cases:
1. AMERICAN WIRE AND CABLE DAILY RATED EMPLOYEES
UNION, vs. AMERICAN WIRE AND CABLE CO., INC. and CA, G.R.
No. 155059. April 29, 2005- “Grant of service award, 35% premium of
basic pay on holy week, and Christmas party are all bonuses given out of
Personal Notes of Janine J. Sarausos
generosity and munificence, and can be withdrawn by management unless
they are made part of the wage or salary of the worker.
153
2. HONDA PHILS., INC. vs. SAMAHAN NG MALAYANG
MANGGAGAWA SA HONDA, G.R. No. 145561. June 15, 2005. - “pro
rating of 13th and 14th month pays due to period of strike is not valid, as it is
contrary to company practice under the CBA, citing 1993 case of Davao
Fruits.
3. Manila Jockey Club Employees Labor Union-PTGWO vs. Manila
Jockey Club, Inc. Gr. No. 167760, March 7, 2007. -“Change of work
schedule in the CBA from 9-5 to 1-8 pm due to change in the program of
horse races is management prerogative. The OT was not given consistently,
deliberately and unconditionally but as a compensation for additional
services rendered. Thus, it is not a benefit within the meaning of Art.
100,LC.
4. SMC vs. Layor, GR No. 1496540, Oct. 19, 2007. ”OT is not a benefit
because it requires rendition of additional services; and is not freely given
especially here where no proof that the supervising security guards were
obliged by the company to render OT work. The requirement of rendering
additional services differentiates OT pay from benefits such as a 13 th month
pay or yearly merit increase.
Cases:
1. Apex Mining vs. NLRC, 206 SCRA 497. –“The prohibition against
elimination or diminution of benefits set out in Article 100 of the
Labor Code is specifically concerned with benefits already enjoyed at
the time of the promulgation of the Labor Code. Article 100 does not,
in other words, purport to apply to situations arising after the
promulgation date of the Labor Code, Section 6 of the Rules
Implementing Wage Order No.6 relates to “supplements and other
benefits which employees are already “enjoying without cost at the
time of the effectivity of WO 6.” Such benefits which employees are
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already enjoying “without cost” could not, under Section 6, suddenly
be ascribed monetary value so as to offset or diminish increases in the
minimum wage reate prescribed by statute.
2. Kamaya Point Hotel vs. NLRC, 177 SCRA 160. – “There is no law
that mandates the payment of the 14 th month pay. This is emphasized
in the grant of exemption under PD 851 (13 th Month Pay Law) which
states: “Employers already paying their employees a 13th month pay
or its equivalent are not covered by this Decree.” Necessarily then,
only the 13th month pay is mandated. Having enjoyed the additional
income in the form of 13 th month pay, private respondents’ insistence
on the 14th month pay for 1982 is already an unwarranted expansion of
the liberality of the law. Also contractually, as gleaned from the CBA
between management and the union, there is no stipulation as to such
extra remuneration. Evidently, this omission is an acknowledgment
that such benefit is entirely contingent or dependent on the
profitability of the company’s operations.
This court is not prepared to compel petitioner to grant the 14 th
month pay solely because it has already ripened into a “company
practice” as the Labor Arbiter has put it. having lost its catering
business derived from Libyan students, Kamaya Hotel should not be
penalized for its previous liberality. An employer may not be obliged
to assume a “double burden” of paying the 13 th month pay in addition
to bonuses or other benefits aside from the employee’s basic salaries
or wages. Restated differently, we rule that an employer may not be
obliged to assume the onerous burden of granting bonuses or other
benefits aside from the employee’s basic salaries or wages in addition
to the required 13th month pay.”
TOPIC 10. CONDITIONS OF EMPLOYMENT
I. WORKDAYS
Authorized number of workdays in a week- six (6) days, to start any
day of the week, at the discretion of the employer.
Personal Notes of Janine J. Sarausos
Applicability- all employees, whether establishment is for profit or not,
except for health personnel who are authorized to work for five (5) days.
Except: Compressed workweek (DEPARTMENT ADVISORY NO. 02, 153
Series of 2004 of appendix 7)
A. Nature
In a company with a workweek of 45 hours consisting of 8
hours, daily from Monday to Friday and 5 hours on Saturday, the
employees and the management may agree to compress the
workdays to only Monday through Friday at nine hours per day,
without OT pay.
B. Is the waiver of the OT valid?
Yes, because the benefits derived by the employees under the
compressed work week are greater than the ones they waived.
Examples of benefits derived from the CWW:
1. extra rest day
2. savings on transportation and meal expenses, since they do not
have to go to work on Saturday.
Note: waiver of OT must be:
a. A written undertaking
b. Under oath by the employees concerned.
Guidelines for a valid Compressed Work Week:
a. The employees voluntarily agree to work 9 hours from
Monday to Friday;
b. There will NOT be any diminution whatsoever in the weekly
or monthly take home pay and fringe benefits of the
employees;
c. The value of the benefits that will accrue to the employees
under the proposed work schedule is more than, at least
commensurate with or equal to, the 1-hour overtime pay that is
due them during weekdays based on the employees
quantification.
d. The 1-hour overtime pay of the employees will become due
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and demandable if ever they are permitted or made to work on
any Saturday during the effectivity of the new working time
arrangement, since the arrangement between the employees
and the management is that there will be no Saturday work in
exchange for a longer workday during weekdays.
e. The work of employees does not involve strenuous physical
exertion and they are provided adequate rest periods or coffee
breaks in the morning and afternoon; and
f. The effectivity of the CWW is of temporary duration.
In CWW, the hours worked in a week must not exceed the
number of hours worked in a worked in a week prior to the
agreement. Also, work done in excess of the hour under the
CWW is compensable as overtime.
Case: Linton Commercial vs. Herrera, GR NO. 163147,
Oct. 10, 2007. “reduction of work days from 6 days a week to
3 days on rotation basis considered an illegal “compressed”
workweek and constitutes illegal reduction of work hours as it
would result to unsettling diminution of the periodic pay for a
protracted period especially here where there is no adequate
proof of financial losses.
Requisites for a valid reduction of workdays:
1. temporary
2. made known to the employee
3. for valid economic reaason
II. REST DAY
Definition: a period of not less than twenty-four (24) consecutive hours after
every six (6) consecutive normal work days. Based on this, the rest day is
necessarily the 7th day.
Purpose: To promote the health of and well-being of the working class.
Studies show that if an employee does not get enough rest, he becomes
unproductive.
Rest day need not necessarily be a Sunday. Establishment or enterprises
Personal Notes of Janine J. Sarausos
therefore, may open on Sundays and Holidays (Sec. 2, Rule III, Rules
Implementing the Labor Code)
Right of choice is with the employer. But this is not absolute, for the 153
preference of the employee as to his weekly day of rest shall be respected
by the employer if the same is based on religious ground. Where however
the choice of the employees as to their rest day based on religious grounds
will inevitably result in serious prejudice or obstruction to the operations of
the undertaking, and the employer cannot normally be expected to resort to
other remedial measures, the employer may so schedule the weekly rest day
of their choice for at least 2 days in a month.
For employees with no definite time or schedule of workdays, e.g.
those engages in arrastre services, rest day is on a Sunday or legal Holiday.
Q: can employees be compelled to work on the rest day?
A: Only under the following exceptional conditions (Section 6 Rule III,
Book III of the Omnibus Rules:
(1) In case of actual or impending emergencies caused by serious
accident, fire, flood, typhoon, earthquake, epidemic or other disaster or
calamity, to prevent loss of life or property, or in cases of force majeure
or imminent danger to public safety;
(2) In case of urgent work to be performed on machineries, equipment
or installations to avoid serious loss which the employer would
otherwise suffer;
(3) In the event of abnormal pressure of work due to special
circumstances, where the employer cannot ordinarily be expected to
resort to other measures;
(4) To prevent serious loss of perishable goods;
(5) Where the nature of the work is such that the employees have to
work continuously for seven (7) days in a week or more, as in the case
of the crew members of a vessel to complete a voyage and in other
similar cases; and
(6) When the work is necessary to avail of favorable weather or
environmental conditions where performance or quality of work is
dependent thereon.
No employee shall be required against his will to work on his
scheduled rest day except under circumstances provided in this Section:
Provided, However, that where an employee volunteers to work on his
rest day under other circumstances, he shall express such desire in
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writing, subject to the provisions of Section 7 hereof regarding
additional compensation.
Q: Suppose the employee refuses?
A: Refusal furnishes a ground for disciplinary action.
Note: Violation of all the rules contained herein constitutes violation of
labor standards, and is therefore covered by the provisions of Arts. 128 and
129 of the Labor Code.
If the employee works on his rest day, he is entitled to additional
compensation and this is called PREMIUM PAY. This is not the same as
overtime pay. This is additional compensation for the work of the employee
for not more than 8 hours during his rest day.
Section 2. Business on Sundays/Holidays. Rule III, Book III
All establishments and enterprises may operate or open for
business on Sundays and Holidays provided that the employees are given
the weekly rest day and the benefits due them under the law.
 The rest day need not be a Sunday, because the Blue Sunday Law no
longer finds application in the present.
Section 3. Weekly rest day. Rule III, Book III
Every employer shall give his employees a rest period of not less
than twenty-four (24) hours after every six consecutive normal work days.
Section 4. Preference of employee. Rule III, Book III
The preference of the employee as to his weekly day of rest shall
be respected by the employer if the same is based on religious grounds.
The employee shall make known his preference to the employer in writing
at least seven (7) days before the desired effectivity of the initial rest day so
preferred.
Where, however, the choice of the employees as to their rest day
based on religious grounds
 will inevitably result in serious prejudice or obstruction to the
operations of the undertaking and
Personal Notes of Janine J. Sarausos
 the employer cannot normally be expected to resort to other
remedial measures
the employer may so schedule the weekly rest day of their choice for at 153
least two (2) days in a month.
III. WORKING HOURS
i. Normal Hours of Work- not exceeding eight (8) hours a day (Art. 83,
LC), except
i. For health personnel who have different set of guidelines.
ii. RA 9231(Child Labor) Sec. 12-A. HOURS OF WORK OF A
WORKING CHILD – Under the exceptions provided in
Section 12 of this Act, as amended:
(1) A child below fifteen (15) years of age may be allowed to work
for not more than twenty (20) hours a week: Provided, that the
work shall not be more than four (4) hours at any given day;
(2) A child fifteen (15) years of age but below eighteen (18) shall
not be allowed to work for more than eight (8) hours a day, and
in no case beyond forty (40) hours a week;
(3) No child below fifteen (15) of age shall be allowed to work
between eight o’clock in the evening and six o’clock in the
morning of the following day and no child fifteen (15) years of
age but below eighteen (18) shall be allowed to work between
ten o’clock in the evening and six o’clock in the morning of the
following day.
Test to determine working time: if the time of the employee is:
1. Controlled by the employer; or
2. Utilized or spent in the interest of the employer, then such time is
time worked.
What constitutes hours worked (Art. 84)----
1. All time during which an employee is required to be on duty or to
be at the employer’s premises or to be at prescribed workplace;
2. All time during which an employee is suffered or permitted to
work.
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Guidelines in determining whether time spent by the employee
constitutes hours worked, and therefore, compensable/Principles in
determining hours worked (Book III, Rule I, Sec. 4).—
(1) All hours are hours worked which the employee is required to give his
employer, regardless of whether or not such hours are spent in productive
labor or involve physical or mental exertion.
(2) An employee need not leave the premises of the work place in order
that his rest period shall not be counted, it being enough that he stops
working, may rest completely and may leave his work place, to go
elsewhere, whether within or outside the premises of his work place.
(3) If the work performed was necessary, or it benefited the employer, or
the employee could not abandon his work at the end of his normal working
hours because he had no replacement, all time spent for such work shall be
considered as hours worked, if the work was with the knowledge of his
employer or immediate supervisor.
(4) The time during which an employee is inactive by reason of
interruptions in his work beyond his control shall be considered working
time if
i. Imminence of the resumption of work requires the employee's presence
at the place of work; or
ii. Interval is too brief to be utilized effectively and gainfully in the
employee's own interest.
B. Work interruotion
Section 4, Rule I, Book III (d) The time during which an employee is
inactive by reason of interruptions in his work beyond his control
shall be considered time either if the imminence of the resumption of
work requires the employee’s presence at the place of work or if the
interval is too brief to be utilized effectively and gainfully in the
employee’s own interest.
Power interruptions or brownouts
Brownouts of short duration but not exceeding 20 minutes are
considered as hours worked, whether used productively by the employees or
not.
Personal Notes of Janine J. Sarausos
Reason: The imminence of the resumption of work requires the
employee’s presence at the place of work and the time is too short for the
employees to utilize it effectively and gainfully for his own interest. 153
 Note: this was not discussed but is relatively important.
Brownouts exceeding 20 minutes will not be treated as hours
worked is any of the following conditions are present:
(a) The employees can leave their workplace to go elsewhere
within or without the work premises; or
(b) The employee can use the time effectively for their own
interest.
In either case, the employer can extend the working hours beyond
the regular schedule to compensate the loss of productive man-hours
without being liable for overtime pay.
Industrial enterprises with 1 or 2 work shifts may adopt any of the
work shifts prescribed for enterprises with 3 work shifts to prevent serious
loss or damage to materials, machineries or equipment that may result in
case of power interruptions (Policy Instructions #36).
C. Waiting time: when compensable
Waiting time spent by an employee shall be considered as working time if
waiting is:
1. An integral part of his work, eg. Telephone operators, salesgirls,
waiters; or
2. The employee is required or engaged by the employer to wait, as
when an employee is required to remain on call in the employer’s
premises or so close thereto that he cannot use the time effectively
and gainfully for his own purpose shall be considered as working
while on call. Eg. Fireman
D. On call: when working time
Working time if employee is required to remain on call in---
1. The employer’s premises; or
2. So close thereto that he cannot use the time effectively and
gainfully for his own purpose.
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E. Lectures, meetings, training programs (Sec.6, Rule 1, book III) —
Attendance at lectures, meetings, training programs, and other similar
activities shall not be counted as working time if all of the following
conditions are met:
(a) Attendance is outside of the employee's regular working hours;
(b) Attendance is in fact voluntary; and
(c) The employee does not perform any productive work during such
attendance.
F. Meal periods
General Rule: Every employer shall give his employees, regardless of sex,
not less than 1 hour time off for regular meals (art. 85,LC)
Exceptions (Section 7, Rule I, Book III): A meal period of not less than 20
minutes may be given by the employer provided that such shortened meal
period is credited as compensable hours worked of the employee:
1. Where the work is non-manual work in nature or does not involve
strenuous physical exertion;
2. Where the establishment regularly operates not less than 16 hours
a day;
3. In cases of actual or impending emergencies or there is urgent
work to be performed on machineries, equipment or installations
to avoid serious loss which the employer should otherwise suffer;
and
4. Where the work is necessary to prevent serious loss of perishable
goods.
Rest periods or coffee breaks running from five (5) to twenty (20)
minutes shall be considered as compensable working time.
Health Personnel
Art. 83. HOURS OF WORK – The normal hours of work of any employee
shall not exceed eight (8) hours a day.
Health personnel in cities and municipalities with a population of
at least one million (1,000,000) or in hospitals and clinics with a bed
capacity of at least one hundred (100) shall hold regular office hours for
eight (8) hours a day for five (5) days a week, exclusive of time for meals,
Personal Notes of Janine J. Sarausos
except where the exigencies of the service require that such personnel work
for six (6) days or forty-eight (48) hours which case they shall be entitled to
an additional compensation of at least thirty percent (30%) of their regular 153
wage for work on the sixth day. For purposes of this Article, “health
personnel” shall include resident physicians, nurses, nutritionists, dieticians,
pharmacists, social workers, laboratory technicians, paramedical technicians
psychologists, midwives, attendants and all other hospital or clinic
personnel. (Note: interns are not included. They are usually not employees
of the hospital)
TOPIC 11: MINIMUM LABOR STANDARDS
A. INTRODUCTION
Article 82. Coverage
The provisions of this Article shall apply to employees in all
establishments and undertakings whether for profit or not, but not to
government employees, managerial employees, field personnel, members of
the family who are dependent on him for support, domestic helpers, persons
in the personal service of another, and workers who are paid by result as
determined by the Secretary of Labor in appropriate regulations.
As used herein, “Managerial Employees” refer to those whose
primary duty consists of the management of the establishment in which they
are employed or of a department or subdivision thereof, and to other
officers or members of the managerial staff.
“Field Personnel” shall refer to non-agricultural employees who
regularly perform their duties away from the principal place of business or
branch office of the employer and whose actual hours of work in the field
cannot be determined with reasonable certainty.
Labor Standards Benefits covered under Art. 82:
(a) Night Shift Differential;
(b) Overtime pay;
(c) Holiday pay;
(d) Service Incentive Leave; and
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(e) Service Charges
Notable distinction: In labor standard: manager and rank and file while in
labor relations: managerial, supervisor and rank and file.
EMPLOYEES NOT COVERED BY THIS PROVISION (BENEFITS):
1. Government Employees – whether employed by the national
government or any of its political subdivisions, including those
employed in government-owned and –controlled corporations
REASON: They are governed by different set of laws, which are
the Civil Service Law, the Administrative Code, and by their
respective charters. If a government-owned or –controlled
corporation has been incorporated, they are governed by the
Corporation Code and are consequently covered by the Labor Code.
2. Managerial Employees and members of the Managerial Staffs
Managerial employees if they meet all of the following conditions:
1. Their primary duty consists of the management of the
establishment in which they are employed or of a department or
subdivision thereof; [formulate policies]
2. They customarily and regularly direct the work of two or more
employees therein; [execute management policies]
3. They have the authority to hire and fire employees of lower rank,
or their suggestions and recommendations to hiring and firing and as to
the promotion or any other change of status of other employees, are
given particular weight. [impose disciplinary actions]
REASON: Managerial employees are not usually employed and paid
by the hour. Their compensation is determined by their special
training, experience or knowledge, which require the exercise of
discretion and independent judgment; or perform work related to
management policies and general business operations along specialized
or technical lines.
Personal Notes of Janine J. Sarausos
Officers or members of the managerial staff if they perform the following
duties and responsibilities: 153
1. The primary duty consists of the performance of work directly related
to management policies of the employer;
2. Customarily and regularly exercise discretion and independent
judgment;
3. They:
i. Regularly and directly assist a proprietor or general managerial
employee whose primary duty consists of the management of the
establishment in which he is employed or a subdivision thereof;
ii. Execute, under general supervision, work along specialized or
technical lines requiring special training, experience or knowledge;
or
iii. Execute, under general supervision, special assignments and tasks.
4. They do not devote more than 20% of their hours worked in a
workweek to activities, which are not directly and closely related to
the performance of the work prescribed in the above-mentioned 1, 2
and 3.
REASON: They may be considered managerial employees as well.
Thus, it would not be feasible to provide a fixed hourly rate of pay or
maximum hours of work like managerial employees as previously
mentioned.
3. Field Personnels (Art. 82, LC)
Non-agricultural employees who:
(a) Regularly perform their duties away from the principal or branch
office or place of business of the employer; and
(b) Whose actual hours of work in the field cannot be determined
with reasonable certainty.
REASON: These workers perform their jobs away from the employer’s
place of business, and therefore not subject to the personal supervision
of their employer. His employer has no way of knowing the exact
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number of hours he is working in a day, like medical representatives
and field salesmen. Their hours of work cannot be determined with
reasonable certainty.
Cases:
a. Union of Filipro Employees vs. Vicar, 205 SCRA 200: “Under
Article 82, field personnel are not entitled to holiday pay. The law
requires that the actual hours of work in the field be reasonably
ascertained. The company has not way of determining whether or
not these sales personnel, even if they report to the office before 8
am prior to field work and come back at 4:30 pm, rally spend the
hours in between in actual field work.”
b. Mercidar Fishing Corp. vs. NLRC, 297 SCRA 445: “In the case
at bar, during the entire course of their fishing voyage, fishermen
employed by petitioner have no choice but to remain on board its
vessel. Although they perform non-agricultural work away from
petitioner’s business offices, the fact remains that throughout the
duration of their work, they are under the effective control and
supervision of petitioner through the vessel’s patron or master as
the NLRC correctly held.
4. Members of the family who are dependent upon him for support
REASON: The employer has already taken care of the sustenance,
clothing, medical attendance or education of the particular members of
his family. Note that this category refers to husband and wife, parents
and children, other descendants and ascendants, brothers and sisters
whether in the full or half blood. It does not include in-laws because they
do not pertain to the same family. Also keep in mind that the family must
be dependent upon the employer for support.
5. Household helpers, persons in the personal service of another
Salient distinctive feature of a household helper:
Personal Notes of Janine J. Sarausos
a. Employer is head of the family (natural family), otherwise,
employer-employee applies;
b. Services performed in or about the employer’s home 153
c. Services are exclusively for the personal comfort and convenience
of head of family and his/he relative.
Domestic servants and persons in the personal service of another if
they perform such services in the employer’s home which are usually
necessary and desirable for the maintenance and enjoyment thereof, or
minister to the personal comfort, convenience or safety of the employer as
well as the members of the employer’s household.
REASON: They are already provided with living quarters, food, and
extra clothing such that all in all, it would exceed the statutory minimum
wage. Also because the nature of the work plus the fact that they are not
employed in a business undertaking.
6. Workers paid by results (see: Section 8 Rule VII Book III)
REASON: They are not paid on an hourly basis but in their output.
Their pay is dependent upon the work done regardless of the time spent or
employed in doing the work. Moreover, they are governed by specific
contracts. Their output should be fixed in accordance with Section 8 Rule
VII Book III of the Omnibus Rules, which provide that they shall receive
not less than the applicable statutory wage rates prescribed by law for the
normal working hours which shall not exceed 8 hours a day, or a proportion
thereof for work less than the normal working hours.
Classification of workers paid by result
1. Piece Rate
2. Job or task base.
Case: Lambo vs. NLRC, GR 111042, October 26, 1999: “ There are 2
categories of employees paid by results:
1. Those whose time and performance are supervised by the employer.
(Here, there is an element of control and supervision over the manner as to
how the work is to be performed. A piece-rate worker belongs in this
category especially if he performs his work in the company premises.); and
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2. Those whose time and performance are unsupervised. (Here, the
employer’s control is over the result of the work. Workers on pakyao and
takay basis belong to this group.)
B. SPECIFIC MINIMUM LABOR STANDARD BENEFITS
See: 2006 Handbook on Workers Monetary Benefits
1. OVERTIME PAY (Art. 87, LC) – Additional compensation required
by law for work performed in excess of 8 hours in a day.
General Rule: Overtime work is voluntary on the part of the employee,
and no employee may be made to work beyond 8 hours against his will.
Exceptions: See: [Sec. 89, LC] and Sec. 10, Rule 1, BOOK III.
Compulsory overtime work. — xxx, provided that the employee required to
render overtime work is paid the additional compensation required by these
regulations:
(a) When the country is at war or when any other national or local
emergency has been declared by Congress or the Chief Executive;
(b) When overtime work is necessary to prevent loss of life or property, or
in case of imminent danger to public safety due to actual or impending
emergency in the locality caused by serious accident, fire, floods, typhoons,
earthquake, epidemic [FEFETA]or other disaster or calamities;
(c) When there is urgent work to be performed on machines, installations, or
equipment, in order to avoid serious loss or damage to the employer or
some other causes of similar nature;
(d) When the work is necessary to prevent loss or damage to perishable
goods;
(e) When the completion or continuation of work started before the 8th hour
is necessary to prevent serious obstruction or prejudice to the business or
operations of the employer; or
(f) When overtime work is necessary to avail of favorable weather or
environmental conditions where performance or quality of work is
dependent thereon.
In cases not falling within any of these enumerated in this Section, no
employee may be made to work beyond eight hours a day against his will.
Personal Notes of Janine J. Sarausos
Refusal of the employee may be a ground for disciplinary action on
ground of insubordination.
153
Reason for the general rule on voluntariness of overtime work:
a. Because law accords an employee at least 16 uninterrupted hours
for himself. If the employee is compelled, then this would be
against the above tenet.
b. Because human body needs rest. The presumption is that one’s
productivity level id only up to 8 hours.
Day is understood to be the 24-hour period which commences from the
time the employee regularly starts to work.
Computation of overtime pay/ compensation:
1. Get the regular pay rate. For ordinary days, this is the regular daily
wage. For rest days or holidays, this is the premium pay rate.
2. Convert the regular pay rate into hourly rate by dividing it by 8
(representing 8 hours of work).
3. Know the applicable overtime rate and apply it to the hourly rate
pay. This gives the hourly overtime rate.
4. Multiply the hourly overtime rate by the number of hours of
overtime work. The product is the overtime compensation due.
Note: Overtime Rate:
i. Ordinary days- plus 25% of the basic hourly rate
ii. Special days, rest days and holidays- plus 30% of the regular
hourly rate on said days (premium pay)
Note:
Article 88, LC. Undertime not offset by overtime. Undertime work on any
particular day shall not be offset by overtime work on any other day. Permission
given to the employee to go on leave on some other day of the week shall not
exempt the employer from paying the additional compensation required in this
Chapter.
2. PREMIUM PAY – Additional compensation required by law for work
performed during non-working days not exceeding 8 hours such as rest
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days, holidays. [Since it is additional compensation, it should not be
included in the computation of the 13th month pay]
Premium Pay Rate (Sec. 9, Rule 1, BOOK III):
a. For work performed on rest days or on special days- plus 30% of
the daily rate of 100% or total of 130%
b. For work performed on a rest day which is also a special day- plus
50% of the daily rate of 100% or a total of 150%
c. For work performed on a regular holiday which is also the
employee’s rest day- plus 30% of the regular holiday rate of 200%
based in the daily basic wag or a total of 260%.
However, Sunday is a regular workday unless it is his established rest
day.
PREMIUM PAY distinguished from OVERTIME PAY
1. Premium pay refers to the additional compensation required by law
for work performed within 8 hours on non-working days, such as
rest days and special days, while OTP refers to compensation for
work performed beyond 8 hours.
2. Premium pay is computed on the basis of daily rate while OTP is
computed on the basis of hourly rate.
3. Service Incentive Leave (Art. 95, LC and Sec. 2, Rule V, Book III)
Q: Does the Labor Code provide for vacation leave?
A: No, only for yearly incentive leave for 5 days.
Q: Is there a provision for sick leave?
A: None, also.
Who may avail of SIL?
Personal Notes of Janine J. Sarausos
Every employee who has rendered at least one year of service shall be
entitled to a yearly service incentive leave of five days with pay. The term
“at least one year service” [ Sec. 3, Rule V, Book III] shall mean service 153
within 12 months, whether continuous or broken reckoned from the date the
employee started working, unless the working days in the establishment, as a
matter of policy or practice, or that provided in the contract of employment,
is less than 112 months in which case, said period shall be considered as one
year.
Who may not granted SIL? (Art. 95):
1. those who are already enjoying the benefit herein provided
2. those enjoying vacation leave with pay at least five days; and
3. those employed in establishments regularly employing less than ten
employees or in establishments exempted from granting this benefit by the
Secretary of Labor after considering the viability or financial condition of
such establishment.
Note: The grant of benefit in excess of that provided herein shall not be made a
subject of arbitration or any court or administrative action.
The SIL which is not used or exhausted at the end of the year is
commutable to its money equivalent (Sec. 5, Rule V, Book III).
Cases:
1. Fernandez vs. NLRC, 285 SCRA 175: “Supreme Court emphasized
that the Labor Code does not prohibit the commutation of service incentive
leave to cash, unlike a vacation leave with pay. Since this vacation leave is
not statutorily given, this cannot be commutable to cash. When not availed
of by the employee at any given year, this (vacation leave) may be forfeited
by the employer unless the same employer provides that the same may be
commutable.
If the employer does not grant service incentive leave, he violates the
law. If not availed by the employee, the service incentive leave may be
converted to cash. If unpaid or outstanding, it accumulates and becomes a
money claim.”
2. Sobrepena vs. CA, 280 SCRA 476: “In the grant of vacation leaves
privileges to employees, the employer is given the leeway to impose
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conditions on the entitlement to and commutation of the same, as the grant
of vacation leave is not a standard of law, but a prerogative of management.
The purpose of vacation leave is to afford a laborer a chance to get a much
needed rest to replenish his worn out energies and acquire new vitality to
enable him to efficiently perform his duties, and not merely to give him
additional salary or bounty. This privilege must be demanded in its
opportune time and if he allows the years go by in silence, he waives it. It
becomes a mere concession or act of grace of the employer.”
4. Night Shift Differential (NSD) [Art. 86, LC] (see also: Sec. 2, 3, 4,
and 5, Rule II, Book III)
Not less than ten percent of his regular wage for each hour of work performed
between 10:00p.m. to 6:00a.m. Basis of computation: HOURLY RATE.
Justifications for NSD of 10%:
a. There are remotely injurious effects of permanent night work manifested
on the later year of the worker’s life.
b. Disarrangement of the worker’s social life, including recreation and
activities of his leisure hours and the ordinary association of normal
family relations;
c. From an economic viewpoint, night work is to be discourage because its
adverse effect upon efficiency and output.
Note: Night shift differential not waivable. The “waiver” rule is not applicable in
night shift differential. The additional compensation for nighttime work is founded
on public policy, hence the same cannot be waived (Artcle 6, NCC.) – [Mercury
Drug Co., Inc. vs. Nardo Dayao]
NIGHT WORK PROHIBITION (Article 130, LC)
No woman, regardless of age, shall be employed or permitted or
suffered to work, with or without compensation:
1) In any industrial undertaking or branch thereof between 10 at night
and 6 in the morning of the following day; or
Personal Notes of Janine J. Sarausos
2) In any commercial or non-industrial undertaking or branch thereof,
other than agricultural, between midnight and 6 in the morning of
the following day; or 153
3) In any agricultural undertaking at nighttime unless she is given a
period of rest of not less than 9 consecutive hours.
EXCEPTIONS (Article 131, LC):
1. In cases of actual or impending emergencies caused by serious
accident, fire, flood, typhoon, earthquake, epidemic, or other
disasters or calamity, to prevent loss of life or property, or in case
of force majeure or imminent danger to public safety;
2. In case of urgent work to be performed on machineries, equipment
or installations, to avoid serious loss which the employer would
otherwise suffer;
3. Where the work is necessary to prevent serious loss of perishable
goods;
4. Where the woman employee holds a responsible position of
managerial or technical nature, or where the woman employee has
been engaged to provide health and welfare service;
5. Where the nature of the work requires the manual skill and
dexterity of women workers and the same cannot be performed
with equal efficiency by male workers, or [where the employment
of women is the established practice in the enterprises concerned
on the date these rules become effective]; and
6. Where the women employees are immediate members of the
family operating the establishment or undertaking;
7. Other analogous cases as determined by the Secretary of Labor.
5. Service charges (Art. 96, LC)
All service charges collected by hotels, restaurants and similar establishments
shall be distributed at the rate of 85% for all covered employees and 15% for
management (Sec. 2 and 3, Rule VI, Book III). To be distributed not less than once
every 2 weeks or twice a month at intervals not exceeding 16 days (Sec. 4, Rule VI,
Book III). The share of the employees shall be equally distributed among them. In
case the service charge is abolished, the [average] monthly share of the covered
Page 50 of 145
 Personal Notes of Janine J. Sarausos

employees shall be integrated into their wages to prevent diminution of benefits 5. Field personnel and other employees including those who are engaged on
(Sec. 5,ibid). task or contract basis, purely commission basis, or those who are paid a
Service charge applies only to establishments collecting service charges, such fixed amount for performing work irrespective of the time consumed in 153
as hotels, restaurants, lodging houses, night clubs, cocktail lounges, massage clinics, the performance thereof.
bars, casinos and gambling houses, and similar enterprises, including those entities
operating primarily as private subsidiaries of the government. (Section 1, Rule VI, Q: Is there an instance where a daily-paid employee is not entitled to holiday pay?
Book III, Omnibus Rules) A: All covered employee shall be entitled to the benefits provided herein when they
are on leave of absence with pay. Employees who are on leave of absence without
Coverage (Sec. 1, Rule VI, Book III) pay on the day immediately preceding a regular holiday may not be paid the require
This rule shall apply only to establishments collecting holiday pay if he has not worked on such regular holiday ( Section 6. Absences.
service charges such as Rule IV, Book III).
(a) Hotels, Re: Successive regular holidays. Where there are two successive holidays, like
Holy Thursday, Good Friday, an employee may not be paid for both holidays is he
(b) Restaurants,
absents himself from work on the day immediately preceding the first holiday,
(c) Lodging houses,
unless he works on the first holiday, in which case, he is entitled to his holiday pay
(d) Night clubs, on the second holiday.
(e) Cocktail lounge,
(f) Massage clinics, Note: The employer may require an employee to work on any holiday but such
(g) Bars employee shall be paid a compensation equivalent to twice his regular rate.
(h) Casinos and gambling houses, and
(i) Similar establishments, including those entities operating primarily Compensation for (Section 4. Rule IV, Book III):
as private subsidiaries of the government. 1. Regular holiday:
If unworked, the Labor Code sanctions payment of 100%.
6. Holiday Pay ( Art. 94, LC) If worked, the premium pay is 200%. This is what is referred to as
See: Appendix 8 for RA 9492 (Holiday Economics) DOUBLE COMPENSATION.
2. Special Day
Q: Who are chiefly benefited? If unworked, the Labor Code does not provide for payment.
A: The daily paid employees. Daily paid employees operate under the principle of
This follows the principle of NO WORK NO PAY as lodged in the
“no work, no pay” hence, as there is no work on holidays, they will be adversely
famous principle of a FAIR DAY’S WAGE FOR A FAIR DAYS’S LABOR.
affected if there had been no provision on holidays with pay.

Coverage: All employees except: Compensation for rest day and Sunday or Holiday work (Art. 93.LC)
1. Government employees (a) Where an employee is made or permitted to work on his scheduled
2. in retail and service establishment regularly employing less than ten rest day, he shall be paid an additional compensation of at least
workers; 30% of his regular wage. An employee shall be entitled to such
3. domestic helpers and persons in the personal service of another additional compensation for work performed on Sunday only when it
4. managerial employees is his established rest day.

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(b) When the nature of the work of the employee is such that he has no
regular workdays and no regular rest days can be scheduled, he shall
be paid an additional compensation of at least 30% of his regular
wage for work performed on Sundays and holidays.
(c) Work performed on any special holiday shall be paid an additional
compensation of at least 30% of the regular wage of the employee.
Where such holiday work falls on the employee’s scheduled rest day,
he shall be entitled to an additional compensation of at least 50% of
his regular wage.
(d) Where the collective bargaining agreement or other applicable
employment contract stipulates the payment of a higher premium pay
than that prescribed under this Article, the employer shall pay such
higher rate.
Overtime pay for holiday work. Sec. 5, Rule IV, Book III
For work performed in excess of 8 hours on a regular holiday, an
employee shall be paid an additional compensation for the overtime work
equivalent to his rate for the first 8 hours on such holiday work plus at least
30% thereof.
Where the regular holiday work exceeding 8 hours falls on the
scheduled rest day of the employee, he shall be paid an additional
compensation for the overtime work equivalent to his regular holiday-rest
day for the first 8 hours plus 30% thereof. The regular holiday-rest day rate
of an employee shall consist of 200% of his regular daily wage rate plus
30% thereof.
Cases: FAIR DAY’S WAGE FOR A FAIR DAYS’S LABOR.
1. Caltex Refinery vs. Brillantes, 279 SCRA 218: “The age-old general
rule governing relations between labor and capital or management and
employee is “a fair day’s wage for a fair day’s work.” If no work is
performed by the employee, there can be no wage or pay unless of course
the laborer was ready, willing and able to work but was locked out,
dismissed or suspended or otherwise illegally prevented from working.”
Personal Notes of Janine J. Sarausos
2. SSS vs. SSS Supervisor’s Union, 117 SCRA 749: “Where the
failure of workers to work was not due to the employer’s fault, burden
of economic loss suffered by them should not be shifted to the 153
employer and each party must bear his own loss.”
Counterpart principle of Fair Day’s Wage for Fair Day’s Labor:
EQUAL PAY FOR EQUAL WORK.
Case:
International School Alliance of Educators vs. Quisumbing, GR
128845 June 1, 2000: “While we recognize the need of the School to attract
foreign-hires, salaries should not be used as an enticement to the prejudice
of local-hires. The local-hires perform the same services as foreign-hires
and they ought to be paid the same salaries as the latter. For the same
reason, the "dislocation factor" and the foreign-hires' limited tenure also
cannot serve as valid bases for the distinction in salary rates. The
dislocation factor and limited tenure affecting foreign-hires are adequately
compensated by certain benefits accorded them which are not enjoyed by
local-hires, such as housing, transportation, shipping costs, taxes and home
leave travel allowances. There is no reasonable distinction between the
services rendered by foreign-hires and local-hires. The practice of the
School of according higher salaries to foreign-hires contravenes public
policy and, certainly, does not deserve the sympathy of this Court.”
C. OTHER SPECIAL BENEFITS
1. 13TH MONTH PAY LAW (PD 851: Requiring All Employers To Pay
Their Employees 13th Month Pay)
Whereas:
1. It is necessary to further protect the level of real wages from the
ravage of world-wide inflation;
2. There has been no increase in the legal minimum wage rates since
1970;
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3. The Christmas season is an opportune time for society to show its
concern for the plight of the working masses so they may properly
celebrate Christmas and New Year.
Who are entitled:
With the removal of the ceiling P1, 000.00 all rank-and-file employees
regardless of the amount of basic salary that they received in a month are
entitled to the benefit regardless of their designation or employment status
and irrespective of method by which their wages are paid provided that they
have worked for at least 1 month during the calendar year.
Rank-and-file employees- all employees not considered by law as
managerial employees.
Managerial employee is one who is vested with the powers and
prerogatives to lay down and execute management policies and/or to hire,
transfer, suspend, lay-off, recall, discharge, assign or discipline employees,
or to effectively recommend such managerial actions.
Exempted employees:
a. Government and any of its political subdivisions including GOCC,
except those operating in the private subsidiaries of the government;
b. Employers already paying their employees a 13 th month pay or its
equivalent at the time of its issuance, eg. Bonuses and other
payments amounting to not less than ½ of the basic salary. Where an
employer pays less than the required 1/12th of the employee’s basic
salary, the employer shall pay the difference.
c. Employers of household helpers and persons in the personal service
of another in relation to such workers
d. Employers of those who are paid on purely commission, boundary or
task basis and those who are paid a fixed amount for performing
specific work irrespective of the time consumed in the performance
thereof, except where the workers are paid on piece-rate basis in
which case, the employer shall grant the required 13 th month pay to
workers.
Are barbers and manicurists entitled to 13th-month pay?
Personal Notes of Janine J. Sarausos
Yes. They are not excluded from the coverage. They are
employees. They are not independent contractors or managerial
employees especially since the law provides that those who are paid on 153
a piece rate basis are entitled to 13 th-month pay (Corporal Sr. vs.
NLRC 341 SCRA 669)
Are commissions included? In Philippine Duplicators vs. NLRC,
February 15, 1995, SC held commissions are included or excluded,
depending on what kind of commissions are involved. Here, it was held that
a wage-or-sales-percentage type of commission should be included in the
13th month pay computation, while in Boie-Takeda Chemicals vs. Dela
Sern, 228 SCRA 329, it was held that a profit-sharing or bonus-type
commission may be excluded in the computation. In principle, where the
earnings or remuneration are closely akin to fringe benefits, overtime pay or
profit-sharing payments, they are properly excluded in computing the 13th
month pay. However, sales commissions which are effectively an integral
portion of the basic salary structure of an employee, shall be included in the
determining his 13th month pay.
Thus, in Reyes vs. NLRC et. al. GR. 160233, Aug. 8, 2007, citing the
1993 case of BOIE Takeda and 1995 case of Phil. Duplicators, commission
received by a unit manager cannot be considered in the computation of
retirement pay and 13th month pay as they are in the form of profit-sharing
payments and had no clear, direct or necessary relation to the amount of
work he actually performed. Here the unit manager does not enter into
actual sale transaction and the commission were not regularly received by
him and in Letran Calamba Faculty and employees Assoc. vs. NLRC, G.R.
No. 156225, Jan. 29, 2008, overload pay should be excluded from the 13th
month pay, as it is paid for additional work in excess of the regular teaching
load, similar to OTP, regardless whether the overload pay is performed
within the normal working days.
13TH MONTH PAY – shall mean one-twelfth (1/12) of the total basic
salary EARNED by an employee within a calendar year. Earned because it
is possible that the employee has used his vacation leave, leave without pay
which should not be counted.
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“Basic salary– shall include ALL remunerations and earnings paid by
an employer to an employee for services rendered, but may NOT
INCLUDE:
 Cost of living allowances granted pursuant to PD 525
or LOI 174
 Profit sharing payments and
 All allowances and monetary benefits which are not
considered or integrated as part of the regular or basic salary of the
employee at the time of the promulgation of the decree [on December
16, 1975].
Except if this [exceptions] were made part of the CBA or
company practice.
Time of payment: not later than December 24 of every year, providing the
employee worked for 30 days. An employer, however may give to his
employee ½ of the required 13th month pay before the opening of the
regular school year and the other half on or before the 24 th of December of
every year. The frequency of payment of this monetary benefit may be the
subject of agreement between the employer and the recognized collective
bargaining agent of the employees.
13th month pay of resigned or separated employee: An employee who has
resigned or whose services were terminated at anytime before the time for
payment of the 13th month pay is entitled to this monetary benefit on
proportion to the length of time he worked during the year, up to the time of
his resignation or termination from the service, the payment maybe
demanded by the employee upon the cessation of ER-EE relationship. The
benefits granted shall not be credited as part of the employees and other
benefits.
The payment of the 13th month pay may be demanded by the employee
upon the cessation of ER-EE relationship. This is consistent with the
principle of equity that as the employer can require the employee to clear
himself of all the liabilities and property accountability, so can the employee
demand the payment of all benefits due him upon the termination of the
Personal Notes of Janine J. Sarausos
relationship. Thus, there is no forfeiture even if with just or authorized
cause.
153
th
Remedy of no-payment of 13 month pay: Sue. This is in the nature of a
money claim.
2. PATERNITY LEAVE ACT of 1996 (RA 8187, June 11, 1996)
Entitlement: Notwithstanding any law, rules and regulations to the
contrary, any married male employee in the public and private sectors shall
be entitled to a paternity leave of 7 [calendar] days with full pay for the first
4 deliveries of the legitimate spouse with whom he is cohabiting.
Conditions for Entitlement
1. He is employed at the time of delivery of the child;
2. He is cohabiting with his spouse at the time she gives birth or suffers
a miscarriage;
3. He has notified the employer of the pregnancy of his wife and her
expected date of delivery subject;
4. His wife has given birth, suffered an abortion [unintentional]
Paternity Leave is NOT commutable to cash. In the event that the
paternity leave benefit is not availed of, said leave shall not be convertible
to cash. Note that the purpose is to lend support to his wife during her
period of recovery and/or nursing of the newly-born child. The conversion
of the leave into money would defeat the very purpose of the law.
Penal Sanction (Sec. 5): Any person, corporation, trust, firm, partnership,
association or entity found violating this Act or the rules and
regulations promulgated thereunder shall be punished by a fine not
exceeding P25,000 or imprisonment of not less than 30 days nor
more than 6 months.
How is notification by the qualified male employee made? (Sec. 4)
As soon as the married male employee learns that his spouse is
pregnant:
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1. He shall inform his employer of such pregnancy and the expected
date of delivery within a reasonable period of time;
2. He shall accomplish a Paternity Notification Form to be
provided by the employer and submit the same to the latter,
together with the copy of his marriage contract, or where not
applicable, any proof of marriage. [This notification
requirement shall not apply in cases of miscarriage or
abortion.]
3. Any employee who has availed of the paternity leave benefits
shall, within a reasonable period of time, submit a copy of the
birth certificate of the newly-born child, death or medical
certificate in case of miscarriage or abortion, duly signed by
the attending physician or midwife, showing the actual date of
childbirth, miscarriage or abortion as the case may be.
Availment of Paternity Leave by a Male (papa) Employee [Sec. 5,
Revised Implementing Rules and Regulations (March 13, 1997)]:
Paternity leave benefits shall be granted to the qualified employee after
delivery by his wife, without prejudice to an employer allowing an
employee to avail of the benefit before or during the delivery, provided that
the total number of days shall not exceed seven (7) days for each delivery.
Where a male employee is already enjoying the paternity leave benefits
by reason of contract, company policy or collective bargaining agreement,
the following rules shall apply:
1. If the existing paternity leave benefit is greater than the benefit
herein provided, the greater benefit shall prevail;
2. If the existing paternity leave is less than that provided herein, such
existing benefit shall be adjusted to the extent of the difference.
However, when a contract, company policy or collective bargaining
agreement provides for an emergency or contingency leave without specific
provisions on paternity leave, the paternity leave provided by law shall
apply.
3. DOMESTIC ADOPTION ACT OF 1998 – R.A. 8552 SEC. 12
Personal Notes of Janine J. Sarausos
If the child is below 7 years of age and is placed with the prospective
adopter(s) through a pre-adoption placement authority issued by the
department the prospective adopter shall enjoy all the benefits to which 153
biological parents is entitled from the date the adoptee is placed with the
prospective adopters.
4. RETIREMENT PAY LAW (RA 7641) An amendment of article 287
EFFECTIVITY DATE: JANUARY 7, 1993 AS FURTHER AMENDED
BY RA 8588
Requisites:
1. He must be an employee at the time of the effectivity of the law.
2. Compliance with the requirement for eligibility under the law:
optional retirement – 60 years with 5 years of service
compulsory retirement – 65 years with no requirement of years of
service
Types of retirement (in the absence of CBA/ applicable agreement):
1. Compulsory age: 65 years
Except: underground mining employee-60 years (RA 8558)
2. Optional age: 60 years provided:
a. Has served at least 5 years in the said establishment and
b. 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.
Except: underground mining employee-50 years provided:
a. Has served at least 5 years as underground mine worker
b. 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.
Exempted under the law
(1) Employees of the National Government and its political
subdivisions, including government-owned and controlled
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corporations, if they are covered by the Covil Service Law
and its regulations;
(2) Employees of retail, service and agricultural establishments
or operations regularly employing not more than 10
employees.
Labor Advisory on Retirement Pay Law (October 24, 1996)
A. Coverage
RA 7641 or the retirement pay law shall apply to all employees in the
private sector, regardless of their position, designation, or status and
irrespective of the method by which their wages are paid. They shall
include the part-time employees, employees of service and other job
contractors and domestic helpers or persons in the personal service of
another.
Penal sanction for violation of Article 287, as amended
Article 288. Penalties
Except as otherwise provided in this Code, or unless the acts
complained of hinges on a question of interpretation or implementation of
ambiguous provisions of an existing collective bargaining agreement, any
violation of the provisions of this Code declared to be unlawful or penal in
nature shall be punished with a fine not less P1,000 nor more than P10,000
or imprisonment of not less than 3 months nor more than 3 years, or both
such fine and imprisonment at the discretion of the Court.
In addition to such penalty, any alien found guilty shall be
summarily deported upon completion of service of sentence.
Any provision of law to the contrary notwithstanding, any criminal
offense punished in this Code shall be under the concurrent jurisdiction of
the Municipal or City Courts and the Regional Trial Courts.
May the employer stipulate a lower retirement age?
Yes. Article 287 applies only in the absence of a retirement plan or
a CBA stipulating a retirement benefit, such retirement plan should not be
less than what is provided for by law
Personal Notes of Janine J. Sarausos
Case:
1. Producers Bank vs. NLRC, GR 118069, November 16, 1998:
“Petitioner's contention is untenable. Retirement results from a 153
voluntary agreement between the employer and the employee whereby
the latter after reaching a certain age agrees to sever his employment
with the former. The very essence of retirement is the termination of
the employer-employee relationship.
Hence, the retirement of an employee does not, in itself, affect his
employment status especially when it involves all rights and benefits
due to him, since these must be protected as though there had been no
interruption of service. It must be borne in mind that the retirement
scheme was part of the employment package and the benefits to be
derived therefrom constituted, as it were, a continuing consideration
for services rendered, as well as an effective inducement for remaining
with the corporation. It is intended to help the employee enjoy the
remaining years of his life, releasing him from the burden of worrying
for his financial support, and are a form of reward for his loyalty.
When the retired employees were requesting that their retirement
benefits be granted, they were not pleading for generosity but were
merely demanding that their rights, as embodied in the CBA, be
recognized. Thus, when an employee has retired but his benefits under
the law or the CBA have not yet been given, he still retains, for the
purpose of prosecuting his claims, the status of an employee entitled to
the protection of the Labor Code, one of which is the protection of the
labor union.”
2. Martinez vs. NLRC, GR 118743, October 12, 1998: “The
employer and employee agreed to change the date of retirement. In
consideration, the employer gave the employee something in
return.The SC said this is valid.
3. The option in optional retirements rests upon the employee
Capili vs. NLRC, G.R. No. 120802. June 17, 1997: “It is clear
from Policy Instruction No. 25 promulgated on 1 June 1977 by the
Secretary of Labor that in the absence of a collective bargaining
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agreement or company policy providing for a retirement plan, the
option to retire at age 60 could be exercised by either the employee or
the employer. This power of the employer no longer exists under R.A.
No. 7641, which unequivocally provides that the option to retire upon
reaching the age of 60 years or more but not beyond 65 is the
exclusive prerogative of the employee if there is no provision on
retirement in a collective bargaining agreement or any other agreement
or if the employer has no retirement plan [and provided the employee
has not signified his acceptance of the retirement].”
4. Requisites of retirement.
CJC Trading vs. NLRC, 246 SCRA 724: “By way of exception,
this Court has allowed grants of separation pay to stand as "a measure
of social justice" where the employee is validly dismissed for causes
other than serious misconduct or those reflecting on his moral
character.
An employee who voluntarily resigns is not entitled to separation
pay unless otherwise stipulated in an employment contract or
collective bargaining agreement, or sanctioned by established
employer practice or policy. The Labor Code is devoid of any
provision which grants separation pay to employees who voluntarily
resign. Neither was there anything in the record that shows that, in the
instant case, there is a collective bargaining agreement or any other
agreement or established company policy concerning the payment of
separation pay to employees who resign.
R.A. No. 7641 may be given effect where:
(1) the claimant for retirement benefits was still the
employee of the employer at the time the statute took effect; and
(2) the claimant was in compliance with the
requirements for eligibility under the statute for such retirement
benefits.
In the instant case, the complaints of private respondents were still
being resolved on the labor arbiter level when R.A. No. 7641 took
effect. However, it was quite clear, and both the Labor Arbiter and the
NLRC so held, that private respondents had ceased to be employees of
Personal Notes of Janine J. Sarausos
petitioner, by reason of voluntary resignation, before the statute went
into effect.”
153
5. SOLO PARENTS WELFARE ACT of 2000 (RA 8972: An Act
Providing for Benefits and Privileges to Solo Parents and their
Children, Appropriating Funds therefore and for other purposes)
Benefits:
a. Parental leave of not more than 7 working days every year to any solo
parent who has rendered at least one year of service. It is in addition to the
other benefits under the law.
Parental leave shall mean leave benefits granted to a solo parent to
enable him/her to perform parental duties and responsibilities where
physical presence is required.
b. Flexible working schedule- right to vary his/her arrival and departure
time without affecting the core work hours as defined by the employer.
Flexible working schedule is the right granted to a solo parent
employee to vary his/her arrival and departure time without affecting the
core work hours defined by the employer.
Children refer to those living with and depedent upon the solo parent
for support who are unmarried, unemployed, and not more than 18 years of
age, or even over 18 years but are incapable of self-support because of
mental and/or physical defect/disability..
Solo parent
Examples:
1.A woman who gives birth as a result of rape is considered as a solo parent.
2. Parent left solo because of death of spouse
3. Parent left solo because of conviction or detention for at least one year
4. Parent left solo with the responsibility left of parenthood because of legal
separation, abandoned spouses, left with custody of child
5. Parent left solo because of declaration of nullity or annulment of
marriage
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6. ANTI-VIOLENCE AGAINST WOMEN & THEIR CHILDREN’S
ACT OF 2004 (RA 9262)
Paid leave of absence up to 10 days; in addition to other paid leaves
under the Labor Code, extendible when the necessity arises.
PART II: LABOR RELATIONS TOPICS
TOPIC 12. RIGHT TO 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 (Sec. 279, LC).
Concept: Security of Tenure is the right of the employee to continue
work until terminated for a just or authorized cause (as provided by law).
Recap: Test in determining employer-employee relationship:
1. Selection and engagement of employee;
2. Payment of wages;
3. Power of dismissal; and
4. Power to control employee’s conduct. The control test is the most
important. Note that what is required is only the existence of the
power of control, it need not be actually wielded or exercised.
No employer-employee relationship exists among independent
contractors and collecting agents considering that the company exercises
control only with respect to the result or amount of collection and not with
respect to the means and method of collection.- Singer Sewing Machine Co.
vs. Drilon, 193 SCRA 270.
Article 280 of the Labor Code is not the yardstick for determining the
existence of employer-employee relationship because it merely
distinguishes between two kinds of employees, i.e., regular employees and
Personal Notes of Janine J. Sarausos
casual employees, for purposes of determining the right of an employee to
certain benefits, to join or form union, or to security of tenure. Art. 280 does
not apply where the existence of an employer-employee relationship is in 153
dispute. - Singer Sewing Machine Co. vs. Drilon, supra.
KINDS OF EMPLOYEES:
1. Regular employees- those who hold regular employment.
“ART. 280. Regular and casual employment. - The provisions of written
agreement to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the
employer. xxx Any employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his
employment shall continue while such activity exists.
There are thus 2 kinds of regular employees:
1. By the nature of work (tenure is indefinite);
2. By length of service (tenure is not indefinite)
The primary standard to determine a regular employment is the
reasonable connection between the particular activity performed by the
employee in relation to the usual business or trade of the employer.
Also, 2 if the employee has been performing the job for at least one
year, even if the performance is not continuous or merely intermittent,
the law deems the repeated and continuing need for its performance as
sufficient evidence of the necessity if not desirability of that activity to
the business. Hence, employment is also considered regular, but only
with respect to such activity and while such activity exists.- De Leon vs.
NLRC, 176 SCRA 615 (1989).
1-a. Probationary employment
ART. 281. Probationary employment. - Probationary employment shall
not exceed six (6) months from the date the employee [actually] started
working, unless it is covered by an apprenticeship agreement stipulating a
longer period. xxx An employee who is allowed to work after a
probationary period shall be considered a regular employee.
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“shall not exceed 6 months” means that the period mentioned herein is
the MAXIMUM period that an employer may fix as the probationary
period. If he opted to fix a shorter period, he should be bound by the same.
Standard set for placing the person under probationary employment:
the work requires application of skills, experience or training (SET). Hence,
if job is ministerial, or menial, a person cannot be validly placed under
probationary employment.
Probationary employee, defined: one who is on trial by an employer
during which period the employer determines whether or not he is qualified
for permanent employment, said qualification being made known at the
time of employment.
Probation is the period during which the employer may determine if
the employee is qualified for possible inclusion to the regular workplace.
Purpose of probationary employment: to afford an employer an
opportunity to observe the fitness of a probationer while at work, and to
ascertain whether he will become a proper and efficient employee [a trial
period].
Basis of power to set probationary period:
It is well-settled that the employer has the right or is at liberty t choose
who will be hired and who will be denied employment. In that sense, it is
within the exercise of the right to select his employees that the employer
may set or fix a probationary period within which the latter may test and
observe the conduct of the former before hiring him permanently. The right
of a laborer to ell his labor to such person as he may choose is, in its
essence, the same as the right of an employer to purchase labor ffrom any
person whom it chooses- Grand Motor Parts Corp. vs. NLRC, July 16, 1984
Basis for the determination of the probationer’s fitness: Performance
Evaluation Record; reflective of both the communication to the employee
and the RESULTS of the evaluation- Marcelino Asay vs. NLRC, Jan. 30,
1996.
Personal Notes of Janine J. Sarausos
Period of Probation:
GR: 6 months. 153
Exceptions:
1. If covered by apprenticeship agreement;
2. When parties to an employment contract agree otherwise, as when
the same is established by company policy;
3. When required by the nature of the work to be performed by an
employee, which requires extended trial period (Buiser vs.
Leogardo, G.R. No. L-63316, July 13, 1984);
4. When extension was granted by the employer ex gratia an act of
liberality on the part of the employer affording the employee a
second chance to make good after having initially failed to prove
his worth as an employee (Mariwasa Manufacturing, Inc. vs.
Leogardo, G.R. No. 74246, Jan. 26, 1989);
5. Sec. 92, Manual of Regulation for Private School.- Subject in all
instances to compliance with Department and school requirements,
the probationary period for academic personnel shall not be more
than 3 consecutive [school] years of satisfactory service for those
in the elementary and secondary levels, 6 consecutive regular
[school] semesters of satisfactory service for those in the tertiary
level, and 9 consecutive [school] trimester of satisfactory service
for those I the tertiary level where collegiate courses are offered on
the trimester basis.
Reason: According to Blas Ople, teaching is not an ordinary
job. It takes longer to acquire and learn and master the profession.
Sec. 93. Regular or Permanent status. Those who have served
the probationary period shall be made regular or permanent. Full-
time teachers who have satisfactorily completed their probationary
period shall be considered as regular or permanent.
“Academic personnel” includes all school personnel who are
formally engaged in actual teaching service or research
assignments, either on full-time or part-time basis, as well as those
who possess certain prescribed academic functions, such as
registrars, librarians, guidance councilors, researchers and other
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similar persons (Sec. 4, par.c). [note: manual on education applies
here and not labor code]
“Non-academic personnel” means school personnel usually
engaged in ADMINISTRATIVE functions, who are not covered
under the definition of academic personnel. They may include
school officials. [Note: labor code applies here]
6. Sec. 6 (d), Book VI, Omnibus Rules. (d) In all cases involving
employees engaged on probationary basis, the employer shall
make known to the employee the standards under which he will
qualify as a regular employee at the time of his engagement.
Termination of probationary employment:
Although a probationary or temporary employee has limited tenure, he still
enjoys security of tenure. During his tenure of employment or bfore his
contract expires, he cannot be removed except for cause as provided for by
law [Sec. 6 (c), Book VI]:
1. just cause, or
2. when authorized by existing laws, or
3. when he fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer at the time of
his engagement.
Limitations on the right to terminate probationary employment:
1. it must be exercised in accordance with the specific requirement of
the contract; if a particular time is prescribed, the termination must
be within such time, and if formal notice is required, then that form
must be used;
2. employer’s dissatisfaction must be real and in good faith, not
feigned so as to circumvent the contract or the law;
3. there must be no unlawful discrimation in the dismissal; and
4. procedure for termination must be followed (Manila Hotel Corp.
vs. NLRC G.R. No. 53453, Jan. 22, 1986)
Cases:
Personal Notes of Janine J. Sarausos
a. Octaviano vs. NLRC, 202 SCRA 332: “Successive hirings and firings
cannot be resorted to by the employer to avoid obligations imposed by law
for the protection and benefit of probationary employees.” Bottom-line: 153
probationary period is not subject to renewal coz it will circumvent the law.
2. Casual employees- those employed for a short term/duration (less than
one year), to perform work not related to the main line of business of the
employer.
“ART. 280. xxx An employment shall be deemed to be casual if it is
not covered by the preceding paragraph”
EXCEPTIONS TO REGULAR EMPLOYMENT:
1. PROJECT EMPLOYMENT
Project employee is one whose employment has been fixed for
specific project or undertaking, the completion or termination of which has
been determined at the time of the engagement of the employee or where
the work or service to be performed is seasonal in nature and the
employment is for the duration of the season (Art. 280, LC)
Specific undertaking, defined. Specific project or undertaking
contemplates an activity which was not commonly or habitually performed
or such type of work which is not on a daily basis BUT only for a specific
duration of time or until the completion of the project. The services
employed are thus necessary or desirable in the employer’s usual business
only for the period of time it takes to complete the project. Without the
performance of such services on a regular basis, the employer’s main
business is not expected to grind to a halt (Tucor Industries, Inc. vs. NLRC,
197 SCRA 296).
Test in determining whether employees are project employees: Whether or
not the project employees were assigned to carry out “specific project or
undertaking”, the duration and scope of which were specified at the time the
employees were engaged for that project.
Kinds of “project” employer may engage in:
a. One that is within the regular or usual business of the employer,
but which is distinct and separate, and identifiable as such, from
Page 60 of 145

the undertakings of the company. Such job or undertaking begins
and ends at determined or determinable times;
Case:
b. One that is not within the regular business of the corporation but
such job or undertaking must also be identifiable, separate and
distinct from the ordinary or regular operation of the employer. it
also begins and ends at determined or determinable times.
The length of service of a project employee is not the controlling test of
employment tenure. It is whether or not the employment has been fixed for
a specified project or undertaking the completion of which has been
determined at the time of the engagement of the employee.
Hence, 2nd par of Art. 282 of the Labor Code, providing that an
employee who served for at least one year shall be considered a regular
employee, relates to casual employees, not to project employees.
Casual employees distinguished from project employees:
In casual employment, employer does not fix the period for the
expected completion of the undertaking.
In project employment, the period of completion is stated at the time
employment of the employee.
Do project employees enjoy security of tenure? Yes, the fundamental
guarantee of security of tenure and due process dictates that no worker shall
be dismissed except for a just and authorized cause provided by law and
after due process has been properly complied with. Therefore, a project
employee hired for a specific task also enjoys security of tenure. A
termination of his employment must be for a lawful cause and must be done
in a manner which affords him the proper notice and hearing. Thus, a
project employee must be duly furnished a written notice of his impending
dismissal and must be given the opportunity to dispute the legality of his
removal.
Is project employment a permanent employment? No, it is dependent upon
or coterminous with the duration of the project.
Personal Notes of Janine J. Sarausos
What are the reliefs for an illegally dismissed project employee?
Reinstatement with full back wages from the time they were dismissed up
to the completion of the project or phases thereof to which they were 153
assigned- Sodeco vs. NLRC, Oct. 16, 1997
Is a project employee entitled to a separation pay? GR: a project employee
is not entitled to separation pay. His services are deemed coterminous with
the project, and his dismissal is caused by the completion thereof (Salazar
vs. NLRC, 256 SCRA 277). Exception: if the project he is working on has
not yet been completed when his service were terminated (De Ocampo vs.
NLRC, June 6, 1990)
NOTE: Extension of employment long after the project is completed will
remove the scope of employment from project employment.
If the project is directly related to the main business of the employer,
and it continues on and on, then the same is not a project employment but a
regular employment.
When there is doubt as to whether employees are project or regular
employees, such doubt should be resolved in favor of their status as regular
employees- Raycor Air Control systems, Inc vs. NLRC, Sept. 9, 1996.
2. SEASONAL EMPLOYMENT- engaged in processing of
agricultural crops, which are available in certain parts of each year.
Seasonal employment refers to employment where the work id for the
duration of the season (art. 2280, LC).
When is an undertaking considered as seasonal? Two instances, such as: (a)
climatic or natural causes such as those engaged in selling dried fish, (b)
engage in processing agricultural crops which are available regularly in
certain part of the year.
Are employees terminated during off-season?
1. Manila Hotel Co. vs. CIR, Sept. 30, 1963: “seasonal employees are
considered regular employees. The nature of their relationship with
the employer is such that during off-season, they are temporarily
Page 61 of 145

laid off but during summer season, they are re-employed, or when
their services may be needed. They are not, strictly speaking,
separated from the service but are merely considered as on leave
of absence without pay until they are re-employed. Their
employment relationship is never severed but only suspended.
2. Mercado, Sr. vs. NLRC, Gr. No. 79869, Sept. 5, 1991: “Based on
the provisions of Art. 280 of the Labor Code, the employment of
seasonal employees are deemed legally ended upon the completion
of the season. The termination of their employment cannot and
should not constitute an illegal dismissal.
The Mercado ruling, penned by Justice Padilla, refused to apply the
element of time mentioned in the second paragraph of Art. 280. It is said
that the one-year duration on the job is pertinent to deciding whether a
casual employee has become regular or not. But it is not pertinent to a
seasonal or project employee. In other words, passage of time does not
make a seasonal worker regular or permanent. (Note: Mercado ruling was
reiterated in ALU-TUCP vs. NLRC, 234 SCRA 679)
3. FIXED-PEIOD EMPLOYMENT/ TERM EMPLOYMENT
Why is fixed term employment allowed? Because Art. 280, LC,
enumerating instances of employment with a period, is NOT exclusive. It
merely enumerates the examples, it is not the sole and exclusive scope of
employment.
“Art. 280 of the Labor Code, under a narrow and literal interpretation,
not only fails to exhaust the gamut of employment contracts to which the
lack of a fixed period would be an anomaly, but would also appear to
restrict, without reasonable distinctions, the right of an employee to freely
stipulate with his employer the duration of his engagement, it logically
follows that such literal interpretation should be eschewed or avoided.
(Brent School, Inc. vs. Zamora, Feb. 5, 1990)
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 he parties for the commencement and termination of their
employment relationship, a day certain being understood to be that which
must necessarily come, although it may not be known when. The term
Personal Notes of Janine J. Sarausos
period was further defined to be the length of existence; duration (Phil.
Village Hotel vs. NLRC, 230 SCRA 423)
GR: fixed term employment is valid 153
Exception: when such agreement is entered into to circumvent the
security of tenure. [that is, repetitive hiring with proof of circumvention of
the law; contract is void, hence employee is regular]
Two criteria used to test the validity of fixed term employment:
(a) The fixed period of employment was knowingly and voluntarily
agreed upon by the parties without any force, duress or improper
pressure being brought to bear upon the employee and absent any
other circumstances vitiating his consent; or
(b) It satisfactorily appears that the employer and the employee dealt
with each other on more or less equal terms with no moral
dominance whatever being exercised by the former on the latter.
[Pantranco North Express, Inc. vs. NLRC, 239 SCRA 272]
4. WORKERS IN THE CONSTRUCTION INDUSTRY UNDER
D.O. NO. 19, s.1993
a. Project
b. Non-Project
b.1. probationary
b.2. regular
b.3. casual
5. BROADCAST INDUSTRY (DOLE Policy Instruction No. 40)
*Same classification as in the Labor Code. Policy Instruction No. 40
has been declared to be of NO effect in the case of Sonza vs. ABS-CBN
(G.R. 138051, June 10, 2004)
6. PERSONNEL IN PRIVATE EDUCATIONAL INSTITUTION
(Manual of Regulations for Private School)
a. Academic Personnel
a.1. Academic teaching
a.2. Academic non-teaching (ex. The librarian)
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b. Non-Academic Personnel – those staff who perform
administrative functions but are not involved in academic
work
Their employment is NOT covered by the MRPS or by
the TVET Manual but by the Labor Code.
TOPIC 13: MANAGEMENT PREROGATIVE
Management prerogative- the right of an employer to regulate, generally
without restraint, according to its own discretion and judgment, every
aspect of its business, subject to limitations of the law.
SCOPE: Extent of Management Prerogative to Prescribe Working
Methods, Time, Place, Manner and Other Aspects of Work
Employers have the freedom and prerogative, according to their
discretion and best judgment, to regulate and control all aspects of
employment in their business organizations. Such aspects of
employment include hiring, work assignments, working methods, time,
place and manner of work, tools to be used, processes to be followed,
supervision of workers, working regulations, transfer of employees,
work supervision, lay-off of workers and the discipline, dismissal and
recall of workers. (Philippine Airlines, Inc. vs. NLRC, G. R. No.
115785, Aug. 4, 2000).
LIMITATIONS ON THE EXERCISE OF MANAGEMENT
PREROGATIVES
The exercise of management prerogative is not absolute but subject to the
limitations imposed by law or by CBA, employment contract, employer
policy or practice and general principles of fair play and justice.
ASPECTS:
1. Right to Hire -This is inherently a management right because it is not
found in the Labor Code. Hence, it is not a statutory right.
Personal Notes of Janine J. Sarausos
2. Right to Promote
Promotion, as we defined in Millares v, Subido, is “the advancement
from one position to another with an increase in duties and responsibilities 153
as authorized by law, and usually accompanied by an increase in salary.”
Apparently, the indispensable element for there to be a promotion is that
there must be“advancement from one position to another” or an upward
vertical movement of the employee’s rank or position. Any increase in
salary should only be considered incidental but never determinative of
whether or not a promotion is bestowed upon an employee. This can be
likened to the upgrading of salaries of government employees without
conferring upon the, the concomitant elevation to the higher positions (PT
& T vs. CA, Sept 29, 2003).
There is no law that compels an employee to accept a promotion, as a
promotion is in the nature of a gift or reward, which a person has a right to
refuse. When an employee refuses to accept his promotion, he is exercising
a right, and he cannot be punished for it as he who uses his own legal right
injures no one- Dosch vs. NLRC, July 5, 1983.
Transfer vs. promotion. Whereas promotion denotes a scalar ascent of a
senior officer or employee to another position higher either in rank or
salary, transfer refers to lateral movement from one position to another of
equivalent rank, level or salary (Millares vs. Subido, 20 SCRA 954)
3. Right to Demote
Demotion means the movement from one position to another with a
diminution in duties and/or status or rank, not necessarily with a
reduction in salary. Demotion necessitates the issuance of a notification
of demotion for cause.
It may be exercised by an employer when the interests of the employer
reasonably demand subject to the following limitations:
a.) It must not be exercised arbitrarily, capriciously or whimsically.
b.) It must be for a cause
c.) due process must be complied with because just like dismissal cases,
demotion affects one’s source of livelihood. This is especially true if
demotion is accompanied by a diminution of salary. Moreover,
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considering that demotion is, like dismissal, also punitive action, the
employer being demoted should be given a chance to contest the same
(Jarcia vs. NLRC, Jan. 2, 1997)
d.) It must pass the test of reasonableness, equity and good faith.
Failure on these requirements may amount to illegal or constructive
dismissal, as the case may be. It is even more so if the demotion is not
part of the company policy.
4. Right to Transfer
Transfer is a "movement from one position to another which is of
equivalent rank, level or salary, without break in service (Millares vs.
Subido, supra).
An employee’s right to security of tenure does not give him such a vested
right in his position as would deprive the company of its prerogative to
change his assignment or transfer him where he may be useful.
This right can be challenged if it is exercised arbitrarily or capriciously or
in the absence of good faith.
Consent here on the part of the employee is not required since this can
only be exercised by the management in accordance with best interest
of the company by trying to see where a particular employee can be
best maximized.
Requisites for a Valid Transfer:
a.) Reasonable or it must have a sound purpose.
b.) Convenience or welfare of the employee.
c.) Not prejudicial to the employee
d.) Not involve a demotion of rank or status or a diminution of the
employee’s salary, benefits and other benefits.
GR: must be strictly followed.
Exception: when prompted by business necessity.
Note: Violation of the above requirements amounts to constructive
dismissal.
Case:
Personal Notes of Janine J. Sarausos
1. Paguio vs. PLDT, Oct. 12, 2005: “Nonetheless, as correctly pointed
out by the Court of Appeals, there are limits to the management
prerogative. While it may be conceded that management is in the best 153
position to know its operational needs, the exercise of management
prerogative cannot be utilized to circumvent the law and public policy on
labor and social justice. That prerogative accorded management should not
defeat the very purpose for which our labor laws exist: to balance the
conflicting interests of labor and management. By its very nature,
management prerogative must be exercised always with the principles of
fair play and justice. In particular, the employer must be able to show that
the transfer is not unreasonable, inconvenient or prejudicial to the
employee; nor does it involve a demotion in rank or a diminution of his
salaries, privileges and other benefits. The employer bears the burden of
proving that the transfer of the employee has complied with the foregoing
test.
2. Mendoza vs. Rural Bank of Lucban, July 7, 2004: “The law
protects both the welfare of employees and the prerogatives of management.
Courts will not interfere with business judgments of employers, provided
they do not violate the law, collective bargaining agreements, and general
principles of fair play and justice. The transfer of personnel from one area
of operation to another is inherently a managerial prerogative that shall be
upheld if exercised in good faith -- for the purpose of advancing business
interests, not of defeating or circumventing the rights of employees. In the
pursuit of its legitimate business interest, management has the prerogative
to transfer or assign employees from one office or area of operation to
another -- 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 privilege is inherent in the right of
employers to control and manage their enterprise effectively. The right of
employees to security of tenure does not give them vested rights to their
positions to the extent of depriving management of its prerogative to change
their assignments or to transfer them. Managerial prerogatives, however, are
subject to limitations provided by law, collective bargaining agreements,
and general principles of fair play and justice.”
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A.) Actual Dismissal

5. Right to Discipline – right to impose reasonable penalties including
dismissal on erring employees pursuant to company rule and regulations.
Reasons:
a. Demoralizing the rank and file if the undeserving remains in the
service.
b. Prejudicial to the interest of the employer if he remains in the
service.
The employer’s right to conduct the affairs of his business, according to
its own discretion and judgment, includes the prerogative to instill
discipline in its employees and to impose penalties, including dismissal,
upon erring employees. This is a management prerogative where the free
will of management to conduct its own affairs to achieve its purpose takes
form. The only criterion to guide the exercise of its management prerogative
is 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. (St. Michael’s Institute vs. Santos, G. R. No.
145280, Dec. 4, 2001; Consolidated Food Corporation vs. NRLC, 315
SCRA 129, 139 [1999]).
Instilling discipline among its employees is a basic management right
and prerogative. Management may lawfully impose reasonable penalties
such as dismissal upon an employee who transgresses the company rules
and regulations. (Deles, Jr. vs. NLRC, G. R. No. 121348, March 9, 2000).
The employer cannot be compelled to maintain in his employ the
undeserving, if not undesirable, employees. (Shoemart, Inc. vs. NLRC, G.
R. No. 74229, Aug. 11, 1989).
6. RIGHT TO DISMISS -It is a right to on the management as a measure
of self-protection on the part of the employer against all acts inimical to its
interest. It is not simply a prerogative but a right because it is found in the
Labor Code.
Basis/ Purpose- a measure of self-protection.
Nature of right- not absolute.
Kinds of dismissal:
B.) Constructive Dismissal - act of quitting because continued
employment is rendered impossible, unreasonable or unlikely as in 153
the case of an offer involving a demotion in rank and a diminution
in pay.
LIMITATIONS: 1. Validity of cause- must be for just or authorized cause/s
under the LC
2. Validity of manner by which dismissal is done
As Mr. Justice Panganiban, in en banc decision, states: To
constitute a completely valid and faultless dismissal, it is
well-settled that the employer must show not only
sufficient ground thereof but it must also prove hat it
observed procedural due process by giving the employee
two notices: (one) of the intention to dismiss, indicating
therein his acts or omissions complained against, and
(two), notice of the decision to dismiss; and an
opportunity to answer and rebut the charges against him,
in between such notice (MGG Marine Services, Inc. et. al.
vs. NLRC and E.A. Molina, G.R. No. 114313, July 29,
1996).
A. VALIDITY OF CAUSE
Q: Who has the burden of proving the existence of a valid/authorized
cause? Employer- Art. 277, LC.
Note the case of Jaka Food Processing Corp. vs. Pacot, G.R. No.
151378 March 28, 2005, the SC made distinction as to just cause and
authorized cause, viz:
Divergent Just causes Authorized causes (Art.
Implication (Art. 282) 283)
Who initiated the cause the employee does not necessarily
concerned has imply delinquency or
committed, or is guilty culpability on the part
of, some violation of the employee. Thus,
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 Personal Notes of Janine J. Sarausos

against the employer, the dismissal process (a) Serious misconduct or willful disobedience by the employee of the
i.e. the employee is initiated by the lawful orders of his employer or representative in connection with his
himself initiated the employer's exercise of work; 153
dismissal process. his management (b) Gross and habitual neglect by the employee of his duties;
prerogative (c) Fraud or willful breach by the employee of the trust reposed in him
Separation pay Payment of separation The law requires by his employer or duly authorized representative;
pay, as a rule, is not payment of separation (d) Commission of a crime or offense by the employee against the
required. pay. person of his employer or any immediate member of his family or his
As to the treatment sanction to be imposed sanction should be duly authorized representatives; and
(if with cause but upon him should be stiffer because the (e) Other causes analogous to the foregoing.
failed to comply with tempered because the dismissal process was
the notice requirement) dismissal process was, initiated by the 1. Serious Misconduct or willful disobedience is an improper conduct,
in effect, initiated by employer's exercise of willful in character and of such grave which transgressed some established
an act imputable to the his management and definite rule of action in relation to the employee’s work (Aris Phils. vs.
employee prerogative. NLRC [1994])
Procedural aspect the employer must give if the dismissal is based Serious misconduct- misconduct is improper or wrong conduct. It is the
(Taken from the case the employee two on authorized causes transgression of some established and definite rule of action; a forbidden
of Agabon) written notices and a under Articles 283 and act, a dereliction of duty, willful in character, and implies wrongful intent
hearing or opportunity 284, the employer must and not mere error in judgment. The misconduct must be serious within the
to be heard if requested give the employee and meaning of the Act and must be of such a grave and aggravated character
by the employee before the Department of and not merely trivial or unimportant. Such misconduct, however serious,
terminating the Labor and Employment must, nevertheless, be in connection with the employer’s work to constitute
employment: a notice written notices 30 days just cause for separation (Dept of Labor Manual, Sec. 4343.01)
specifying the grounds prior to the effectivity
for which dismissal is of his separation. Requisites for just cause based on serious misconduct:
sought a hearing or an 1. It must be an improper act, serious and willful in nature, and not
opportunity to be heard minor;
and after hearing or 2. Of grave and aggravated character
opportunity to be 3. Must be “work-related” or relate to the performance of the
heard, a notice of the employer’s business;
decision to dismiss. 4. Must show that the employee has become unfit to continue
working for the employer.
A. JUST CAUSES FOR TERMINATION (Art. 282, LC) A series of irregularities when put together may constitute serious
misconduct, which is a just cause for termination- National Service Corp.
vs. Leogardo, July 20, 1984.
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Thus, in the case of Cadiz et. al. vs. CA, Gr. No. 153784, October 25,
2005, SC held that: there is jurisprudential support, as noted by the CA in
citing University f the East vs. NLRC that lack of material or pecuniary
damages would not in any way mitigate a person’s liability nor obliterate
the loss of confidence. In the case of Ectuban vs. Sulpicion Lines, this Court
definitively ruled that “whether or not the respondent bank was financially
prejudiced is immaterial. Also, what matters is not the amount onvolved, be
it paltry or gargantuan; rather the fraudulent scheme in which the petitioner
was involved, which constitutes a clear betrayal of trust and confidence.
Moreover, it cannot be discounted that as bank employees, the
responsibilities of petitioners are impressed with a high degree of public
interest. Private persons entrust their fortunes to banks, and it would cause a
breakdown of the financial order if the judicial system were to leave
unsanctioned bank employees who treat depositors accounts as their own
private kitty.”
Willful disobedience- in order to constitute disobedience, the
employee’s conduct must have been willful or intentional, willfulness being
characterized by a wrongful and perverse mental attitude rendering the
employee’s act inconsistent with the proper subordination.
Further, the orders, regulations, or instructions of the employer or
representative must be:
a. reasonable and lawful, with reasonableness
referring not only to the kind and character of directions and
commands, with reasonableness referring to the manner by which
they are made;
b. sufficiently known to the employee; and
c. in connection with the duties which the
employee has been engaged to discharge
2. Gross and habitual neglect of duty
Gross negligence connotes want of even the slightest care in the
performance of one’s duties. While, habitual neglect implies repeated
Personal Notes of Janine J. Sarausos
failure to perform one’s duties for a period of time, depending upon the
circumstances (JGB & Assoc. vs. NLRC, March 7, 1996)
Gross Neglect – means an absence of that diligence which an ordinary 153
man would use in his own affairs.
GR: neglect must be BOTH gross and habitual.
EXCEPTION: there are instances when SC has held that gross neglect
suffices, especially when there are losses. Eg. Fuentes vs. NLRC, 166
SCRA 752, here the substantial amount of P50K that was lost was taken
into account.
Tardiness and absenteeism is gross neglect if tardiness/ absenteeism
affects company operation.
3. Fraud and willful breach of trust imply bad faith on the part of the
employee in failing to perform his job his job to the detriment of the
employer’s business (JGB & Assoc, supra)
Fraud- intent to deceive or cheat employer. Eg. SMC vs. NLRC, 174
SCRA 510. It has been defined as any act, omission or concealment which
involves a breach of legal duty, trust or confidence justly reposed and is
injurious to another.
To constitute a just cause for terminating the employee’s service, the
fraud must be committed against the employer or representative and in
connection with the employee’s work. The position imposed must be
imposed with trust and confidence.
Thus, the fraud committed by an employee against third persons not in
connection with his work and which does not involve his employer is not a
ground for the dismissal. Furthermore, since fraud implies willfulness or
wrongful intent, an innocent non-disclosure of facts by the employee done
to the employer will not constitute just cause for the dismissal [Dept of
Labor Manual, Sec. 4343.01 (3)].
For willful breach of trust, breach of trust must be:
a. work-related; and
b. the position must be impressed with trust and confidence (employee
has custody over the funds, money or other property of the company)
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Breach of trust and confidence:
i. By rank-and –file personnel: There must be proof of involvement
in the allege act.
ii. Managerial- mere existence of basis for believing will suffice.
(Caoile vs, NLRC, Nov. 24, 1998)
Thus, in Caoile v. National Labor Relations Commission, the Court had
occasion to explain as follows: Thus, with respect to rank-and-file
personnel, loss of trust and confidence as ground for valid dismissal
requires proof of involvement in the alleged events in question, and that
mere uncorroborated assertions and accusations by the employer will not be
sufficient. But as regards a managerial employee, the mere existence of a
basis for believing that such employee has breached the trust of his
employer would suffice for his dismissal. Hence, in the case of managerial
employees, proof beyond reasonable doubt is not required, it being
sufficient that there is some basis for such loss of confidence, such as when
the employer has reasonable ground to believe that the employee concerned
is responsible for the purported misconduct, and the nature of his
participation therein renders him unworthy of the trust and confidence
demanded by his position.
In addition, the language of Article 282(c) of the Labor Code states that
the loss of trust and confidence must be based on willful breach of the trust
reposed in the employee by his employer. Such breach is willful if it is done
intentionally, knowingly, and purposely, without justifiable excuse, as
distinguished from an act done carelessly, thoughtlessly, heedlessly or
inadvertently. Loss of confidence must not be indiscriminately used as a
shield by the employer against a claim that the dismissal of an employee
was arbitrary. And, in order to constitute a just cause for dismissal, the act
complained of must be work-related and shows that the employee
concerned is unfit to continue working for the employer. In addition, loss of
confidence as a just cause for termination of employment is premised on the
fact that the employee concerned holds a position of responsibility, trust and
confidence or that the employee concerned is entrusted with confidence
with respect to delicate matters, such as the handling or care and protection
Personal Notes of Janine J. Sarausos
of the property and assets of the employer. The betrayal of this trust is the
essence of the offense for which an employee is penalized.
153
GR: an employee’s acquittal in a criminal case does not automatically
preclude a determination that he has been guilty of acts inimical to the
employer’s interest resulting in loss of trust and confidence. Corollarily, the
ground for the dismissal of an employee does not require proof beyond
reasonable doubt, the quantum of poof required is mere substantial evidence
(Vergara vs. NLRC, Dec. 5, 1997)
EXC: Where there is an entire want of evidence to justify the dismissal
f the employee as where the criminal and civil cases against the employee
are dismissed for failure to prosecute and to prove the commission of the
crime (Quiambao vs. NLRC, March 4, 1996)
Limitation- it must be genuine, not a mere afterthought to justify earlier
action taken in bad faith.
Importance- Management has wider discretion in terminating employees
holding position impressed with trust and confidence.
Quantum of evidence- proof beyond reasonable doubt not required.
Breach is said to be willful if intentional, if done knowingly,
deliberately and without justifiable excuse.
4. Commission of a Crime or an Offense against the person of:
1. Employer’
2. Immediate member of his
family- spouse, ascendants, descendants, or legitimate, natural or
adopted brothers or sisters of the employer or of his relative by affinity
in the same degrees, and those by consanguinity within the fourth civil
degree (Art. 11, Sec. 2, RPC).
Conviction is not necessary to effect termination on this ground.
The quantum of evidence is merely substantial evidence.
5. Analogous Causes- one is analogous to another if it is susceptible of
comparison with the latter either in general or in same specific detail; or has
a close relationship with the latter.
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a. Abandonment of job is a form of neglect of duty- it requires deliberate,
unjustified refusal of the employee to resume his employment. Prolonged
absence is not alone a sufficient basis to say that an employee has
abandoned his work. Absences must also fall under gross and habitual
neglect. The immediate filing of a complaint for illegal dismissal against an
employer, with a prayer for reinstatement negates the employees’ intent to
abandon his job.
Elements of abandonment:
1. Failure to report for work or absence without valid or justifiable
reason; and
2. Clear intention to sever the employee-employer relationship, with
the second element as the more determinative factor and being
manifested by some overt acts.
Thus, in Agabon et. al. vs. NLRC, G.r. no. 158693, Nov. 17, 2004, the
SC held that “Abandonment is the deliberate and unjustified refusal of an
employee to resume his employment. It is a form of neglect of duty, hence,
a just cause for termination of employment by the employer. For a valid
finding of abandonment, these two factors should be present: (1) the failure
to report for work or absence without valid or justifiable reason; and (2) 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. The
intent to discontinue the employment must be shown by clear proof that it
was deliberate and unjustified.”
b. Attitude Problem since without the necessary teamwork and synergy,
the organization cannot function well as where the employee is
quarrelsome, bossy, unreasonable and very difficult to deal with (Cathedral
School of Technology vs. NLRC, 214 SCRA 551)
Thus, in Heavylift Manila, Inc. vs. CA, Gr. No. 154410, October 20,
2005, where the SC held that: “An employee who cannot get along with his
co-employees is detrimental to the company for he can upset and strain the
Personal Notes of Janine J. Sarausos
working environment. Without the necessary teamwork and synergy, the
organization cannot function well. Thus, management has the prerogative to
take the necessary action to correct the situation and protect its organization. 153
When personal differences between employees and management affect the
work environment, the peace of the company is affected. Thus, an
employee's attitude problem is a valid ground for his termination. It is a
situation analogous to loss of trust and confidence that must be duly proved
by the employer. Similarly, compliance with the twin requirement of notice
and hearing must also be proven by the employer.”
c. Reporting for work late and drowsy, sleeping while on duty, being
always out of place of work (Laguna Transportation Employees Union vs.
Laguna Transportation Co., Inc, 23 SCRA 173)
d. Accepting employment in other security agencies without previously
resigning from employment, where there has been an agreement not to do
so (Agro Commercial Security Services Agency, Inc. vs. NLRC, 175 SCRA
791).
e. Conflict of interest is a form abuse of power reposed by the employer
(GT Printers, Inc vs. NLRC, 208 SCRA 321)- disloyalty which exists when
one asserts an interest, or performs acts which renders him a competitor/
adverse to employer.
f. Lack of Common Sense as exemplified in the case of Aberdeen Court,
Inc vs. Agustin Jr., Gr. No. 149371, April 13, 2005, where the SC held
that: “As it is, the SC found it hard to believe that complainant would just
have been made to sign the report to signify his presence. By saying so,
complainant is inadvertently degrading himself from an electrical engineer
to a mere watchdog. It is in this regard that the SC concured with the
respondents that by his omission, lack of concern and grasp of basic
knowledge and common sense, complainant has shown himself to be
undeserving of continued employment from probationary employee to
regular employee. Nevertheless, it appears that petitioners violated due
process in the dismissal of respondent, by not affording him the required
notice. As this Court held in Agabon, et al. v. NLRC, an employer who
Page 69 of 145

dismisses an employee for just cause but does so without notice, is liable for
nominal damages in the amount of P30,000.”
g. Sexual Harassment is a form of willful breach of trust and confidence
(Villarama vs. NLRC, 236 SCRA 281)
h. Gross Inefficiency or Poor Performance or poor performance refers to
failure to observe prescribed standards of work, or to fulfill reasonable work
assignments due to inefficiency. It is closely related to gross neglect for
both involved specific acts of omissions on the part of the employee
resulting in damage to the employer or his business [Bruiser et. al. vs.
Leogardo et. al (1984)].
Poor performance is equivalent to inefficiency and incompetence in the
performance of official duties. An unsatisfactory rating can be a just cause
for dismissal only if it amounts to gross and habitual neglect of duties
[Eastern Overseas Employment Center vs. Bea (2005)].
Q: is inefficiency a ground to terminate?
A: Inefficiency is not always synonymous with gross and habitual
neglect. Hence, inefficiency must be qualified to mean failure to attain work
goals or quotas, either by failing to attain the same within a prescribed
period or by failing to give the desired result (Buiser vs. Leogardo, 131
SCRA 151)
i. Drug Use or Abuse (RA 9165)
Sec. 36 (d) Officers and employees of public and private offices. -
Officers and employees of public and private offices, whether domestic or
overseas, shall be subjected to undergo a random drug test as contained in
the company's work rules and regulations, which shall be borne by the
employer, for purposes of reducing the risk in the workplace. Any officer or
employee found positive for use of dangerous drugs shall be dealt with
administratively which shall be a ground for suspension or termination,
subject to the provisions of Article 282 of the Labor Code and pertinent
provisions of the Civil Service Law;
Personal Notes of Janine J. Sarausos
g. n Gianhan case, where the employee committed theft against his co-
employee and the SC held that it is analogous with serious misconduct.
153
B.) AUTHORIZED CAUSES (Art. 284 and 284, LC)
a. Installation of labor-saving devices (automation) separation pay: 1 mo.
b. Redundancy or 1 mo./yr of service
c. Retrenchment to prevent loss
d. Closure or cessation of operations of establishment or undertaking NOT
due to serious business losses.
c and d separation pay: ½ month/year of service or at least 1
month, whichever is higher. Note: a fraction of at least 6 months shall be
considered as one (1) whole year.
d. Closure or cessation of operation of establishment or undertaking due
to serious business losses- No separation pay required EXCEPT where the
closure is for the purpose of circumventing the provisions of the Code, in
which case SP is = to c and d.
e. If employee has been found to be suffering from any disease and whose
continued employment is prohibited by law or is prejudicial to his health or
his co-employees.
Separation pay: ½ mo/year of service, or at least 1 mo. Whichever is
higher.
NOTE: An employee may also be lawfully dismissed pursuant to the union
security clause in the CBA
1. Installation of Labor-Saving Devices
Reduction of the number of workers in a company’s factory made
necessary by the introduction of machinery in the manufacture of its
products is justified. There can be no question as to the right of the
manufacturer to use new labor-saving devices with a view to effecting more
economy and efficiency in its method of production.
2. Redundancy (Landmark case: Wiltshire File Co., Inc vs. NLRC, Feb. 7,
1991)
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 Personal Notes of Janine J. Sarausos

Redundancy exists where the services of an employee are in excess of c. Retrenchment must be reasonably necessary and likely to
what is reasonably demanded by the actual requirement of the enterprise. effectively prevent the expected losses.
d. Alleged losses, if already realized, and the expected imminent 153
Possible causes of redundancy: losses sought to be forestalled, must be proven by sufficient and convincing
1. Over-hiring of workers evidence.
2. Decreased volume of business
3. Dropping of a particular product line/ service previously 4. Closing or Cessation of Operation of the Establishment or Undertaking
undertaken UNLESS the closing is for the purpose of circumventing the provisions
4. Lack of demand for products of law.
Q: why is redundancy considered an authorized cause? Closure of business is allowed whether or not the business is losing. If
A: Because the law does not impose upon the employer an obligation to the business is not losing but its owner, for reasons of his own, wants to get
keep in its payroll more employees than are necessary of the operation out of the business, he in good faith can lawfully do so anytime. Just as no
of its business (Wiltshire,supra) law forces anyone to go into business, no law compels anybody to stay in
business.
Possible reasons The prevailing rule now is that in case of closure due to serious
business losses, then the employer is not under any obligation to give its
3. Retrenchment to Prevent Losses employees separation pay.
If the closure is done in bad faith amounting to ULP, the employer can
Requisites for a Valid Retrenchment: be compelled via affirmative relief to reopen and admit the dismissed
a. The retrenchment is necessary to prevent losses and such employees.
losses are proven;
b. Written notice to the employees and to the Department of 5. Ailment or Disease
Labor and Employment at least one moth prior to the intended Requisites:
date of retrenchment; and a. The employee suffers from a disease and his continued
c. Payment of separation pay equivalent to one moth pay or at employment is prohibited by law or prejudicial to his health or to the health
least ½ month pay for every year of service, whichever is of his co-employees.
higher. b. There is a certification by a competent public health authority that
the disease is of such nature or at such a stage that is cannot be cured within
Four Standards of Retrenchment: a period of six months even with proper medical treatment.
a. The losses expected should be substantial and not merely de
minimis in extent. OTHERS:
b. The substantial loss apprehended must be reasonably imminent, as a. Reorganization and abolition of positions
such imminence can be perceived objectively and in good faith by the b. Early retirement program
employer. c. Voluntary resignation program
d. Job evaluation program
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EMPLOYMENT POLICIES and STIPULATIONS
a. Restrictive covenant clauses
b. Non-competing clause and competitive employment ban -
c. No spouse employment policy – to avoid conflict of interest
TERMINATION OF ACADEMIC PERSONNEL (Manual of Regulation
of Private Schools shall govern and suppletorily by the Labor Code)
Section 94 (2) of the Manual of Regulation of Private Schools: Disgraceful
or Immoral Conduct
Immoral Conduct - any act that is inimical to the public welfare and
policy as expressed in law.
Disgraceful Conduct - that which is shameful, scandalous, or
dishonorable.
Gross Inefficiency and Incompetence in the Performance of Duties
Negligence in Keeping School and Student Records or Tampering with
or Falsification of These Records
Being Notoriously Undesirable.
Selling of Tickets or Collection of Any Contribution in Any Form or for
Any Purpose or Projects Whatsoever, whether voluntary or otherwise
EXCEPT Girl or Boy Scout Membership Fees among others
PREVENTIVE SUSPENSION
The right to impose preventive suspension is a management prerogative
although it is not found in the LC. It is found in its implementing and
regulations.
Valid Suspension:
If the employees continued employment poses a serious and imminent
threat to the life and or property of the employer or of his co-workers.
(section 3, rule XIV, book V)
It is not a form of penalty; it is more of a protective measure
undertaken by the employer. One cannot impose a penalty because the
employee cannot be punished without due process. In practice, preventive
suspension notice should be in writing.
Personal Notes of Janine J. Sarausos
Maximum Period: 30 days
The employer shall thereafter: Reinstate the worker in his former or in 153
a substantially equivalent position; or The employer may extend the period
of suspension, provided that during the period of extension, he pays the
wages and other benefits due to the worker concerned. In such a case, the
worker shall not be bound to reimburse the amount paid to him during the
extension if the employer decides, after completion of the hearing, to
dismiss the worker.
SUSPENSION OF BUSINESS OPERATIONS
BASIS
Article 286: Employment is deemed not terminated when
there is:
Bona-fide suspension by the employer of the operation of his
business or undertaking for a period not exceeding six (6)
months;
Fulfillment by the employee of a military duty; or
Fulfillment by the employee of a civic duty.
Sec .12, Rule, Book VI:
The employer-employee relationship shall be deemed suspended in
case of suspension of operation of the business or undertaking of the
employer for a period not exceeding six (6) months, unless the
suspension is for the purpose of defeating the rights of the employees
under the Code, and in case of mandatory fulfillment by the employee
of a military or civic duty.
The payment of wages of the employee as well as the grant of other
benefits and privileges while he is on a military or civic duty shall be
subject to special laws and decrees and to the applicable individual or
collective bargaining agreement and voluntary employer practice or
policy.
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EFFECT ON EMPLOYMENT STATUS
Compensation of Employees during the Six-month Suspension
Employees are not entitled to their wages and benefits during
the 6-month period. The reason is, within the said period, the
employer-employee relationship is deemed suspended. The
employment relationship being suspended, both the employer
and the employees cease to be bound, at least temporarily, by
the basic terms and conditions of their employment contract -
the employer regarding his obligation to provide salary to his
workers; and on the part of the workers, to provide their
services to the former.
Effect of Suspension of Work Exceeding 6 Months
In the 2005 case of Mayon Hotel & Restaurant vs. Adana, [G.
R. No. 157634, May 16, 2005], the High Court declared that
Article 286 is clear - there is termination of employment when
an otherwise bona fide suspension of work exceeds six (6)
months. Moreover, even assuming arguendo that the cessation
of employment on April 1997 was merely temporary when
hotel operations were suspended due to the termination of the
lease of the old premises, it became dismissal by operation of
law when petitioners failed to reinstate respondents after the
lapse of six (6) months, pursuant to Article 286. And even
assuming that the closure was due to a reason beyond the
control of the employer, it still has to accord its employees
some relief in the form of severance pay.
Effect of Employment of the Employee in Other Establishments during
6-Month Period
In the 2005 case of JPL Marketing Promotions vs. CA, [G. R.
No. 151966, July 8, 2005], it was established that private
respondent-employees sought employment from other
establishments even before the expiration of the six (6)-month
Personal Notes of Janine J. Sarausos
period provided by law. They admitted that all three of them
applied for and were employed by another establishment after
they received the notice from JPL. Consequently, it was held 153
that petitioner JPL cannot be said to have terminated their
employment for it was they themselves who severed their
relations with JPL. Thus, they are not entitled to separation
pay, even on the ground of compassionate justice. Clearly, the
principle in the law which grants separation pay applies only
when the employee is dismissed by the employer, which is not
the case in this instance. In seeking and obtaining employment
elsewhere, private respondents effectively terminated their
employment with JPL.
ANALOGOUS SITUATION
There is no law on temporary retrenchment or lay-off, Article
286 applies only by analogy.
Suspension of operation may involve only a section or
department of the company and not necessarily the entire
operations.
The burden to prove bona-fide suspension of operation is on
the employer.
DISTINGUISH from STOPPAGE of WORK OR SUSPENSION of
OPERATION
Art. 128(c)
The Secretary of Labor and Employment may likewise order stoppage
of work or suspension of operations of any unit or department of an
establishment when there is non-compliance with the law or
implementing rules and regulations poses grave and imminent danger
to the health and safety of workers in the workplace.
Within twenty-four hours, a hearing shall be conducted to determine
whether an order for the stoppage of work or suspension of operations
shall be lifted or not.
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In case the violation is attributable to the fault of the employer, he shall
pay the employees concerned their salaries or wages during the period
of such stoppage of work or suspension of operation.
TEMPORARY OR PERIODIC SHUTDOWN and TEMPORARY
CESSATION OF WORK
Section 7, Rule IV, Book III
Temporary or periodic shutdown and temporary cessation of work.
In cases of temporary or periodic shutdown and
temporary cessation of work of an establishment, as
when a yearly inventory or when the repair or
cleaning of machineries and equipment is undertaken,
the regular holidays falling within the period shall be
compensated in accordance with this Rule.
The regular holiday during the cessation of operation
of an enterprise due to business reverses as
authorized by the Secretary of Labor and
Employment may not be paid by the employer.
RETIREMENT
Statutory basis: Social Security Act of 1997
Others: CBA
Employment contract
Established employer policy
Basic or minimum benefits:
a. ½ month salary per year of service
b. Cash equivalent of 5 days service incentive leave
c. ½ of 13th month pay
d. Other benefits agreed upon
Benefits may be higher if so provided in the contact/CBA. But if benefits
provided are lesser than that provided for by law, the employer shall pay the
Personal Notes of Janine J. Sarausos
difference between the amount due to the employee under this Rule and that
provided under the CBA or other applicable contract.
153
Q: may RA 7641 be given retroactive application?
A: yes, RA 7641 being a curative statute, provided that:
a. Claimant was still an employee if company at the time the stature
took effect (January 7, 1993)
b. There is compliance with the eligibility requirement (age)
TERMINATION OF EMPLOYMENT BY EMPLOYEE (RESIGNATION),
ART. 285
Resignation is the voluntary act of an employee who finds himself in
the situation where he believes that personal reason cannot be sacrificed in
favor of the exigency if the service, that he has no other choice but to
dissociate himself from the employment.
Procedure to be followed:
GR: serving a written notice on the employer at least one (1) month in
advance; otherwise, employer upon whom no such notice was served may
hold the employee liable for damages.
Exception (An employee may put an end to the relationship without serving
any notice on the employer for any of the following just causes):
1. Serious insult by the employer or his representative on the honor and
person of the employee;
2. Inhuman and unbearable treatment accorded the employee by the
employer or his representative;
3. Commission of a crime or offense by the employer or his
representative against the person of the employee or any of the immediate
members of his family; and
4. Other causes analogous to any of the foregoing.
A resignation is withdrawable even if the employee has called it
“irrevocable”. But after it is accepted or approved by the employer, its
withdrawal needs employer’s consent.
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In Phils. Today, Inc vs. NLRC, Gr. No. 112965, January 30, 1997
where the SC held that resignations, once accepted, may not be withdrawn
without the consent of the employer. If the employer accepts the
withdrawal, the employee retains his job. If the employer does not, the
employee cannot claim illegal dismissal. To say that an employee who has
resigned is illegally dismissed, is to encroach upon the right of employers to
hire persons who will be of service to them.
Obviously, this is a recognition of the contractual nature of employment
which requires mutuality of consent between the parties. An employment
contract is consensual and voluntary. Hence, if the employee "finds himself
in a situation where he believes that personal reasons cannot be sacrificed in
favor of the exigency of the service, then he has no other choice but to
disassociate himself from his employment". 22 If accepted by the employer,
the consequent effect of resignation is severance of the contract of
employment.
A resigned employee who desires to take his job back has to re-apply
therefore and he shall have the status of a stranger who cannot unilaterally
demand an appointment. He cannot arrogate unto himself the same position
which he earlier decided to leave. To allow him to do so would be to
deprive the employer of his basic right to choose whom to employ. Such is
tantamount to undue oppression of the employer.
Antecedent, contemporaneous and subsequent acts/events are factors
that should be taken into account in construing acts of resignation”
GR: an employee who resigns is not entitled to resignation pay.
Exception: when such is provided in the employment contract or CBA
or is sanctioned by the company policy. (CJC Trading vs. NLRC, 246
SCRA 724)
However, in the case of Phil. Active Japan Carbon Corp. vs. NLRC,
171 SCRA 164, where the SC held that constructive dismissal is quitting
because continued working is rendered impossible, unreasonable or
unlikely, as an offer involving a demotion in rank and a diminution in pay.
B. VALIDITY OF MANNER OF TERMINATION/ DISMISSAL
Personal Notes of Janine J. Sarausos
Take note of the landmark case of Agabon vs. NLRC, Gr. No. 158693,
November 17, 2004, en banc where the SC held that: From the foregoing
rules four possible situations may be derived: 153
(1) the dismissal is for a just cause (Art. 282,LC), for an authorized cause
(Art. 283), or for health reasons (Art. 284), and due process was observed,
dismissal is valid and the employer will not suffer any liability;
(2) the dismissal is without just or authorized cause but due process was
observed, (3) the dismissal is without just or authorized cause and there
was no due process, the dismissal is illegal and following Article 279 which
mandates that the employee is entitled to reinstatement without loss of
seniority rights and other privileges and full backwages, inclusive of
allowances, and other benefits or their monetary equivalent computed from
the time the compensation was not paid up to the time of actual
reinstatement ; and
(4) the dismissal is for just or authorized cause but due process was not
observed, dismissal is upheld. While the procedural infirmity cannot be
cured, it should not invalidate the dismissal. However, the employer should
be held liable for non-compliance with the procedural requirements of due
process.
Apply Wenphil or Belated Due Process Rule: 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
The violation of the petitioner’s right to statutory due process warrants
the payment of indemnity in the form of nominal damages. (Under the Civil
Code, nominal damages is adjudicated in order that a right of the plaintiff,
which has been violated or invaded by the defendant, may be vindicated or
recognized, and not for the purpose of indemnifying the plaintiff for the loss
suffered by him).
JUST CAUSES (D.O. No. 9 Issued June 21, 1997)
Written notice served on the employee specifying the ground for
termination, and giving to such employee reasonable opportunity within
which to explain his side. [rule XXIII, section 1 (a) ]
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Written notice of termination served on the employee indicating that
upon due consideration of all the circumstances, grounds have been
established to justify his termination. [rule XXIII, section 2 (1) (b)]
There must be a hearing or conference during which the employment
concerned, with the assistance of counsel if the employee so desires, so that
he may be given an opportunity to respond to the charge, present his
evidence or rebut the evidence presented against him.
As long as the substantive requirements are complied with, the
termination is valid, but defective. The employer may be held liable for
indemnity in the form damages, for not having complied with the
procedural aspect of due process. If only the procedural requirements and
not the substantial requirements are complied with, the dismissal is invalid
and illegal. It is a deprivation of an employee of his right to due process.
Thus in the case of Electro System Industries Corp. vs. NLRC, Gr.
No. 165282, October 5, 2005, where the SC held citing the case of
Maquiling vs. Phil. Tuberculosis Society, Inc., were it was stressed that the
first notice must inform outright the employee that an investigation will be
conducted on the charges particularized therein which, if proven, will result
to his dismissal. Such notice must not only contain a plain statement of the
charges of malfeasance or misfeasance but must categorically state the
effect on his employment if the charges are proven to be true. The rationale
for this rule was explained by the Court as follows: “this notice will afford
the employee an opportunity to avail all defenses and exhaust all remedies
to refute the allegations hurled against him for what is at stake is his very
life and limb his employment. Otherwise, the employee may just disregard
the notice as a warning without any disastrous consequence to be
anticipated.
AUTHORIZED CAUSES
Serve a written notice upon the worker at least one month before the
intended date of the termination. D.O. No. 9 states “30 days.”
This is to inform the employee of the impending loss of his
employment, thus enable him to look for a fallback position at the earliest
opportunity.
Personal Notes of Janine J. Sarausos
Serve a written notice upon the Department of Labor and Employment
at least one month or 30 days before the intended date thereof.
This is in order for the DOLE todetermine the validity of the dismissal; 153
and to intervene for a possible conciliation or mediation. To give Separation
Pay where warranted or applicable.
EFFECT OR CONSEQUENCES OF VALID DISMISSAL
General Rule: When an employee is dismissed and the dismissal
complies with both substantive and procedural due process, separation pay
is not given.
Exception: If one is dismissed based on a just cause, and such cause
does not constitute serious misconduct nor reflect the employees’ moral
character, Separation pay may be validly awarded to the employee concern.
This is called the DISCERNING COMPASSION DOCTRINE.
The award of Separation Pay is called a FINANCIAL ASSISTANCE
and is awarded based on equity. It is a measure of social justice where the
employee is validly dismissed for causes not constituting serious
misconduct or those reflecting on his moral character.
In most cases, the Supreme Court awarded financial assistance
equivalent to one-half month pay for every year of service.
JUST CAUSE - Separation pay, in lieu of reinstatement, shall include
the amount equivalent at least to one (1) month salary or to one (1) month
salary for every year of service, whichever is higher, a fraction of at least
six (6) months being considered as one (1) whole year including regular
allowances. If not regular, not included.
AUTHORIZED CAUSE – Separation pay is as follows:
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 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
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service, whichever is higher. A fraction of at least six (6) months shall be
considered one (1) whole year.
In cases of closures or cessation of operations of establishment or
undertaking due to serious business losses or financial reverses, there shall
be no separation pay.
EFFECT OR CONSEQUENCES OF ILLEGAL DISMISSAL
Article 279, LC: 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 to their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual
reinstatement.
In a host of cases, the court has upheld the employee’s right to security
of tenure in the face of oppressive management behavior and management
prerogative. Security of tenure is a right which may not be denied on mere
speculation of any unclear and nebulous basis.
RIGHTS OF AN ILLEGALLY DISMISSED EMPLOYEE
a. Backwages - the salary that the employee would have earned had he no
been illegally dismissed. It is computed from the date of the illegal
dismissal up to the date of the illegal dismissal up to the date of the
employee’s actual reinstatement.
b. Reinstatement or separation pay incase reinstatement is no longer
feasible
General Rule: Restoration of the employee to his previous position or
to a substantially equivalent position without loss of seniority rights and
other privileges.
Exceptions:
strained relationship
it is legally or physically impossible
because of supervening events
when employee voluntarily opts to be awarded separation pay
Personal Notes of Janine J. Sarausos
Damages particularly moral and exemplary where warranted
153
TOPIC 14. PRESCRIPTION OF CLAIMS (Arts. 290-291)
1. Offenses penalized under this Code and the rules and regulations
issued= 3 years.
2. ULP= 1 year from accrual of such unfair labor practice
3. Money claim that arose from. –
a. employer-employee relations accruing during the effectivity of this
Code= 3 years from the time the cause of action accrued.
b. Those accruing prior to the effectivity of this Code= 1 year from
the date of effectivity (Nov. 1, 1974).
Q: How may the 3 year prescriptive period of money claims be
interrupted?
A: applying Art. 1155 of the Civil Code, the prescriptive period is
interrupted by the filing of the claim with the appropriate judicial or quasi-
judicial body, or by written demand addressed to the employer (debtor)
[ MLQU Assoc. et.al vs. MLQ Educational Institution, Inc, et al. April 19,
1989]
Another prescriptive period which must be considered is Art. 1146, CC
which provides that the following actions must be instituted within 4 years:
a. Upon injury to the rights of the plaintiff
b. Upon a quasi-delict
One’s employment or profession is property right, and the wrongful
interference therewith is an actionable wrong. Thus, illegal dismissal
prescribes in 4 years from the occurrence of the cause (civil code: injury to
right of person). Thus, in the case of Victory Liner, Inc vs. Race, Gr. No.
164820, March 28, 2007, the SC held that in illegal dismissal cases, the
employee concerned is given a period of four years from the time of his
dismissal within which to institute a complaint. This is based on Article
1146 of the New Civil Code which states that actions based upon an injury
to the rights of the plaintiff must be brought within four years. The four-
year prescriptive period shall commence to run only upon the accrual of a
cause of action of the worker. It is settled that in illegal dismissal cases, the
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cause of action accrues from the time the employment of the worker was
unjustly terminated. Thus, the four-year prescriptive period shall be
counted and computed from the date of the employee’s dismissal up to the
date of the filing of complaint for unlawful termination of employment.
Rule: The period mentioned under Art. 291 of the Labor Code refers to
and is limited to money claims, all other cases of injury to rights of a
working man being governed by the Civil Code. Hence, an action for
reinstatement must be brought within 4 years, pursuant to Art. 1146, NCC.
TOPIC 15. JURISDICTION OF THE LABOR ARBITER
A. ORIGINAL and EXCLUSIVE
1. Unfair labor practice cases
The civil aspects of all cases involving ULP, which may include claims
for damages and other affirmative relief shall be under the jurisdiction of
the LA (National Union Bank Employees vs. J. Lazaro, et. al. January
19,1988)
Q: is violation of CBA a ULP, hence falling under the jurisdiction of
the LA?
A: If the violation if CBA is gross, it is ULP. If not gross, it is not ULP.
Gross violation of CBA shall mean flagrant and/or malicious refusal to
comply with the economic provisions of such agreement.
2. Termination disputes
Note however that termination cases arising in or resulting from the
interpretation and implementation of the CBA and enforcement and
interpretation of company personnel policies which were initially processed
at the various steps of the plant-level grievance procedures under the
parties’ CBA fall within the original and exclusive jurisdiction of the
voluntary arbitrator, pursuant to Art 217 (c) and Art. 261 of LC. Said cases,
if filed before the LA, shall be dismissed by the LA for lack of jurisdiction
and referred to the concerned NCMB regional branch for appropriate action
(Policy instruction no. 56_April 6, 1993)
Personal Notes of Janine J. Sarausos
3. If accompanied with a claim for reinstatement, those cases that workers
may file involving wages, rate of pay, hours of work and other terms
and conditions of employment; 153
4. Claims for actual, moral, exemplary and other forms of damages
arising from the employer-employee relations (note: moral damages
would be recoverable when the dismissal is tainted with bad faith);
5. Cases arising from any violation of Article 264 of this Code, including
questions involving the legality of strikes and lockouts; and
6. Except claims for employees compensation, social security, medicare
and maternity benefits, all other claims arising from employer-
employee relations, including those of persons in domestic or
household service, involving an amount exceeding five thousand pesos
(P5,000.00), whether or not accompanied with a claim for
reinstatement.
7. Money claims arising out of employer-employee relationship or by
virtue of any law or contract, involving Filipino workers for overseas
deployment, including claims for actual, moral, exemplary and other
forms of damages;
8. Wage distortion disputes in unorganized establishments not
voluntarily settled by the parties pursuant to Republic Act No.6727;
9. Enforcement of compromise agreements when there is non-compliance
by any of the parties pursuant to Article 227 of the Labor Code, as
amended referring to the compromise of labor standard laws wit the
assistance of RD of DOLE or BLR; and
10. Other cases as may be provided by law.
Note: jurisdictions mentioned in nos. 7-10 are those listed in Rule V,
Sec. 1 of 2005 Revised Rules of Procedure of the NLRC- January 7,
2006
Additional:
MIGRANT WORKERS AND OVERSEAS FILIPINO ACT (RA 8042)
Sec. 10. Money Claims. – Notwithstanding any provision of law to
the contrary, the LA of the NLRC shall have the original and exclusive
jurisdiction to hear and decide, within ninety (90) calendar days after the
filing of the complaint, the claims arising out of an employer-employee
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relationship or by virtue of any law or contract involving Filipino workers
for overseas deployment including claims for actual, moral, exemplary and
other forms of damages.
Common element: existence of the employer-employee relationship
Note:
If the court had no jurisdiction but the case was tried and decided upon
the theory that it had jurisdiction, the parties are not barred, on appeal, from
assailing the jurisdiction, for the same must exist as a matter of law and may
not be conferred by the consent of the parties or by estoppels.
However, if the lower court had jurisdiction, and the case was heard
and decided upon the theory that the court had no jurisdiction, the party
who induced it to adopt such theory will not be permitted, on appeal, to
assume an inconsistent position, ie., that the lower court had jurisdiction.
Here the principle of estoppels applies.
B. CONCURRENT JURISDICTION of OTHER AGENCIES
1. Secretary of Labor/ regional Director of DOLE (Art. 128)
a. The Secretary of Labor and Employment or his duly authorized
representatives, including labor regulations officers, shall have access to
employer's records and premises at any time of the day or night whenever
work is being undertaken therein, and the right to copy therefrom, to
question any employee and to investigate any fact, condition or matter
which may be necessary to determine violations or which may aid in the
enforcement of this Code and of any labor law, wage order or rules and
regulations issued pursuant thereto.
b. SOLE or his duly authorized representatives, in cases where
employer-employee still exists, shall have the power to order and
administer, after due notice and hearing, compliance with the labor
standards provisions of this Code and other labor legislation based on the
findings of labor regulation officers or industrial safety engineers made in
the course of inspection, and to issue writs of execution to the appropriate
authority for the enforcement of their order, except in cases where the
employer contests the findings of the labor regulation officer and raises
Personal Notes of Janine J. Sarausos
issues which cannot be resolved without considering evidentiary matters
that are not verifiable in the normal course of inspection. (enforcement
power) 153
c. SOLE may likewise order stoppage of work or suspension of
operations of any unit or department of an establishment when non-
compliance with the law or implementing rules and regulations poses grave
and imminent danger to the health and safety of workers in the workplace.
Within 24 hours, a hearing shall be conducted to determine whether an
order for the stoppage of work or suspension of operations shall be lifted or
not. In case the violation is attributable to the fault of the employer, he shall
pay the employees concerned their salaries or wages during the period of
such stoppage of work or suspension of operation.
Penalty: It shall be unlawful for any person or entity to obstruct, impede,
delay or otherwise render ineffective the order of the Secretary of Labor and
Employment or his duly authorized representatives issued pursuant to the
authority granted under this Article,
and no inferior court or entity shall issue temporary or permanent
injunction or restraining order or otherwise assume jurisdiction over any
case involving the enforcement orders issued in accordance with this
Article.
Art. 129. Regional Director of DOLE or any of the duly authorized hearing
officers shall have the power, through summary proceeding and after due
notice, to hear and decide any matter involving the recovery of wages and
other monetary claims and benefits, including legal interest, owing to an
employee or person employed in domestic or household service or
househelper under this Code, arising from employer-employee relations:
Provided, That such complaint does not include a claim for reinstatement:
Provided, further, That the aggregate money claims of each employee or
househelper do not exceed five thousand pesos (P5,000). (Adjudicatory
power)
ELEMENTS of ART. 129:
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1. The claim is presented by an employee or person employed in
domestic/ household service or house helper;
2. Claim arises from employer-employee relations;
3. Claimant does not ask for reinstatement (if there is reinstatement,
LA);and
4. The aggregate claim of each employee or house helper does not
exceed P5,000. (if it exceeds, LA).
Visitorial and Enforcement powers (VP/EP) distinguished from
adjudicatory power (AP):
a. VP/EP is an inquisitorial method of recovering money claim because
complaint is not necessary to exercise this power; AP is an adversarial
method of recovering wages because complaint must be lodged as
consequence for the exercise of the power, which is directed against the
employer who is then given 5 calendar days within which to answer
complaint. In AP, proceedings are summary in nature, and the decisions
is based on the pleadings.
b. In VP/EP, employer-employee relations must still exist at the time of
the exercise of the power; in AP, it need not.
2. With Voluntary Arbitrators
“Art. 262. The voluntary arbitrator or panel of voluntary arbitrators,
upon agreement of the parties, shall also hear and decide all other labor
disputes including unfair labor practices and bargaining deadlocks.”
3. Secretary of Labor and Employment/ President of the Philippines
Art. 263. (g). When, in his opinion, there exists a labor dispute causing or
likely to cause a strike or lockout in an industry indispensable to the
national interest, the SOLE may assume jurisdiction over the dispute and
decide it or certify the same to the Commission for compulsory arbitration.
Such assumption or certification shall have the effect of automatically
enjoining the intended or impending strike or lockout as specified in the
assumption or certification order. If one has already taken place at the time
of assumption or certification, all striking or locked out employees shall
immediately return to work and the employer shall immediately resume
Personal Notes of Janine J. Sarausos
operations and readmit all workers under the same terms and conditions
prevailing before the strike or lockout. The SOLE may seek the assistance
of law enforcement agencies to ensure compliance with this provision as 153
well as with such orders as he may issue to enforce the same.
In labor disputes adversely affecting the continued operation of such
hospitals, clinics or medical institutions, it shall be the duty of the striking
union or locking-out employer to provide and maintain an effective skeletal
workforce of medical and other health personnel, whose movement and
services shall be unhampered and unrestricted, as are necessary to insure the
proper and adequate protection of the life and health of its patients, most
especially emergency cases, for the duration of the strike or lockout.
In such cases, therefore, the SOLE may immediately assume, within 24
hours from knowledge of the occurrence of such a strike or lockout,
jurisdiction over the same or certify it to the Commission for compulsory
arbitration. For this purpose, the contending parties are strictly enjoined to
comply with such orders, prohibitions and/or injunctions as are issued by
the SOLE or the Commission, under pain of immediate disciplinary action,
including dismissal or loss of employment status or payment by the locking-
out employer of backwages, damages and other affirmative relief, even
criminal prosecution against either or both of them.
The foregoing notwithstanding, the President of the Philippines shall
not be precluded from determining the industries that, in his opinion, are
indispensable to the national interest, and from intervening at any time and
assuming jurisdiction over any labor dispute in such industries in order to
settle or terminate the same.
For information as to who are considered as industries indispensible to
national interest, see: LOI 368, Jan. 26, 1976.
Q: how is the Jurisdiction of the SOLE invoked?
A: Through a petition for assumption of jurisdiction filed before the
office of the SOLE.
If SOLE assumes jurisdiction, he shall issue an assumption order; if
not, a certification order to the Commission, certifying the urgency of the
situation and enjoining the Commission to make its priority.
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Q: if SOLE decides to assume jurisdiction, what can be inquired into and
resolved by him?
A: All matters incidental to the labor dispute, cf. St. Scholastica’s College
case.
Bar Q: may he provide for the retroactivity of his arbitral award?
A: Yes, there is no provision of law prohibiting it. (St. Luke Medical Center
vs. Torres, June 30, 1993)
C. INSTANCES WHERE LA HAS NO JURISDICTION:
1. Over intra-corporate disputes, ie. Disputes which pertain to any of the
following relationships:
a. Between corporation, partnership or association, and the public;
b. Between corporation, partnership or association, and its
stockholders, partners, members or officers;
c. Between corporation, partnership or association, and the state
insofar as its franchise, permit or license to operate is concerned;
and
d. Among the stockholders, partners or associates themselves.
Thus in the case of Easycall Communications Phils, Inc. vs. King,
Gr. No. 145901, Dec. 15, 2005 the SC held that “under Section 5 of PD
902-A, the law applicable at the time this controversy arose, the SEC, not
the NLRC, had original and exclusive jurisdiction over cases involving the
removal of corporate officers. Section 5(c) of PD 902-A applied to a
corporate officer’s dismissal for his dismissal was a corporate act and/or an
intra-corporate controversy.
However, it had to be first established that the person removed or
dismissed was a corporate officer before the removal or dismissal could
properly fall within the jurisdiction of the SEC and not the NLRC. Here,
aside from its bare allegation, petitioner failed to show that respondent was
in fact a corporate officer.
“Corporate officers” in the context of PD 902-A are those officers of a
corporation who are given that character either by the Corporation Code or
by the corporation’s by-laws. Under Section 25 of the Corporation Code,
Personal Notes of Janine J. Sarausos
the “corporate officers” are the president, secretary, treasurer and such other
officers as may be provided for in the by-laws.
The burden of proof is on the party who makes the allegation. Here, 153
petitioner merely alleged that respondent was a corporate officer. However,
it failed to prove that its by-laws provided for the office of “vice president
for nationwide expansion.” Since petitioner failed to satisfy the burden of
proof that was required of it, we cannot sanction its claim that respondent
was a “corporate officer” whose removal was cognizable by the SEC under
PD 902-A and not by the NLRC under the Labor Code.
Note: An “office” is created by the charter of the corporation and the
officer is elected by the directors or stockholders. On the other hand, an
employee occupies no office and generally is employed not by the action of
the directors or stockholders but by the managing officer of the corporation
who also determines the compensation to be paid to such employee.”
A corporate officer’s dismissal is always a corporate act and/or intra-
corporate controversy and that nature is not altered by the reason or
wisdom which the Board of directors may have in taking such actions.
The fact that petitioner sought payment of backwages, other benefits as
well as moral and exemplary damages and attorney’s fees in his complaint
for illegal dismissal will not operate to prevent the SEC from exercising its
jurisdiction. While the affirmative reliefs and monetary claims sought to by
petitioner in his complaint may, at first glance, mislead one into placing the
case under the jurisdiction of the LA, a closer examination reveals that they
are actually part of the prerequisites if his elective position,; hence
intimately linked with his relations with the Corporation.
The Regional Trial Courts (not SEC) now have jurisdiction under R. A.
8799 (Securities Regulation Act of 2000). Jurisdiction of RTC includes
adjudication of monetary claims of the corporate officer who was
dismissed, (such as unpaid salaries, leaves, 13th month pay, bonuses, etc.),
damages and attorney's fees. (Lozon vs. NLRC, G. R. No. 107660, Jan. 02,
1995, 240 SCRA 1)
Labor dispute (LA) Art. 212, includes any controversy or matter concerning
terms or conditions of employment or the association or representation of
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persons in negotiating, fixing, maintaining, changing or arranging the terms
and conditions of employment, regardless of whether the disputants stand in
the proximate relation of employer and employee.
Kinds of Labor Dispute:
a. Labor standards disputes- eg. Disputes on the compensation, benefits,
working standards
b. Labor relations disputes-
1. ULP- coercion, company unionism, members’ complaint against
union officers;
2. Representation disputes
3. Bargaining disputes- refusal to bargain, strike/ lockout
4. CBA administration/ personnel policy disputes- noncompliance with
grievance machinery.
5. employment tenure dispute- non-regularization of employees, illegal
termination
Remedies in Labor Disputes:
a. Grievance procedure
b. Conciliation- process where a disinterested third party meets with
management and labor, at their request or otherwise, during a labor
dispute or in a collective bargaining conference, and by cooling
tempers, aids in reaching an agreement;
c. Mediation- a third party studies each side of the dispute then makes
proposal for the disputants to consider, but a mediator cannot render an
award;
Conciliation and mediation done by the NCMB.
d. Enforcement of compliance order- an act of the SOLE (Thru’ RD’s or
other representatives) in the exercise of his visitorial and enforcement
power;
e. Certification of bargaining representatives- c/- Med-Arbter
f. Arbitration- the submission of a dispute to an impartial third person
for determination on the basis of evidence and arguments of the parties.
Personal Notes of Janine J. Sarausos
Voluntary- if the submission of the dispute is by agreement of the
parties and he arbitrators or panel of arbitrators is chosen by them.
Voluntary arbitration arbitration is done by voluntary arbitrators. 153
Compulsory- if submission of the dispute is by directive of law.
Unlike a conciliatory or mediator, an arbitrator is a judge; he makes
decisions and awards that the parties must accept. Compulsory arbitration is
done primarily by the Labor Arbiters.
In VA, the award is final and unappeable, and the only recourse is
certiorari.
In CA, the decision is appealable to the NLRC.
g. Assumption of jurisdiction by the Secretary or the President.
h. Certification to NLRC- an action of the Secretary of Labor
empowering NLRC to compulsory arbitrate a dispute causing or likely
to cause a strike or lockout in an industry indispensible to national
interest.
Either “assumption” or “certification” automatically enjoins an
impending strike/lockout. A return to work order is issued to strikes, at the
same time, the employer is ordered to immediately assume operations and
readmit all workers under the same terms and conditions prevailing before
the strike/lockout.
i. Injunction under Art. 218 (e), LC
j. Judicial action re offenses against persons or property; criminal
case of ULP
k. Compromise agreement
2. Adjustment or resolution of grievances arising from the interpretation
or implementation of CBA and those arising from the interpretation or
enforcement of company personal policies- C/o Grievance Machinery
and Voluntary Arbitrator pursuant to Art. 261, LC.
The failure of the parties to the CBA to establish the grievance
machinery ad its unavailability is not an excuse for the LA to assume
jurisdiction over the disputes arising from the implementation and
enforcement of a provision in the CBA.
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3. Money claims which have no reasonable causal connection with
employer- employee relationship, or which primarily a breach of
contractual obligation.
Test: Where the claim to the principal relief sought is to be resolved
not by reference to the Labor Code or other labor relations statute or a CBA,
but by the general civil law, the jurisdiction over the dispute belongs to the
regular courts of justice and not to the LA and the NLRC.
Proceedings before the Labor Arbiter:
Nature of the proceedings. Non-litigious, technicalities of law and
procedure and rules obtaining in the courts of law shall not strictly apply
thereto.
A formal-type hearing is not at all times and in all instances essential to
due process, the requirements of which are satisfied where the parties are
afforded fair and reasonable opportunity to explain their side of the
controversy.
But note: while administrative bodies are not bound by technical rules
of procedure, this should not be misconstrued as license to disregard certain
fundamental evidentiary rules. While the rules of evidence prevailing in
courts of law are not controlling in administrative bodies, the evidence
presented before it must have at least a modicum of admissibility for it to
be given same probative value [Jarcia Machine Shop vs. NLRC, Jan. 2,
1997]
A plea of denial of due process does not lie where a defect consisting of
an absence of notice of hearing set was thereafter cured by the alleged
aggrieved party having had the opportunity to be heard on a motion for
reconsideration.
Venue & Jurisdiction (129, LC)
GR: Regional Director of the DOLE or any of the duly authorized
hearing officers of the Department having jurisdiction over the workplace of
the complainant or petitioner.
Workplace shall be understood as the place or locality where the
employee is regularly assigned at the time the cause of action arose. In case
of field employees, as well as ambulant or itinerant workers, their
Personal Notes of Janine J. Sarausos
workplace is where they are regularly assigned, or where they are supposed
to regularly receive their salaries and wages or work instructions from, and
report the results of their assignment to, their employers. 153
Cases involving overseas Filipino workers may be filed before the
Regional Arbitration Branch having jurisdiction over the place where the
complainant resides or where the principal office of any of the respondents
is situated, at the option of the complainant.
Exception: The venue of an action may be changed or transferred to a
different Regional Arbitration Branch by written agreement of the parties or
when the Commission or LA before whom the case is pending so orders,
upon motion by the proper party in meritorious cases.
Where two (2) or more Regional Arbitration Branches have jurisdiction
over the workplace of the complainant or petitioner, the Branch that first
acquired jurisdiction over the case shall exclude the others.
When venue is not objected to before the filling of position papers such
issue shall be deemed waived.
Quantum of evidence required: Substantial evidence, or that relevant
evidence as a reasonable mind might accept as adequate to support a
conclusion.
Appearance of non-lawyers: only in the following instances:
1. he represents himself as party to the case;
2. he represents a legitimate labor organization, as defined under Article
212 and 242 of the Labor Code, as amended, which is a party to the
case: Provided, that he presents: (i) a certification from the Bureau of
Labor Relations (BLR) or Regional Office of the Department of Labor
and Employment attesting that the organization he represents is duly
registered and listed in the roster of legitimate labor organizations; (ii) a
verified certification issued by the secretary and attested to by the
president of the said organization stating that he is authorized to
represent the said organization in the said case; and (iii) a copy of the
resolution of the board of directors of the said organization granting
him such authority;
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3. he represents a member or members of a legitimate labor organization
that is existing within the employer's establishment, who are parties to
the case: Provided, that he presents: (i) a verified certification attesting
that he is authorized by such member or members to represent them in
the case; and (ii) a verified certification issued by the secretary and
attested to by the president of the said organization stating that the
person or persons he is representing are members of their organization
which is existing in the employer's establishment;
4. he is a duly-accredited member of any legal aid office recognized by
the Department of Justice or Integrated Bar of the Philippines:
Provided, that he (i) presents proof of his accreditation; and (ii)
represents a party to the case;
5. he is the owner or president of a corporation or establishment which is
a party to the case: Provided, that he presents: (i) a verified certification
attesting that he is authorized to represent said corporation or
establishment; and (ii) a copy of the resolution of the board of directors
of said corporation, or other similar resolution or instrument issued by
said establishment, granting him such authority.
Change of Lawyer, requisites:
1. There must be filed a written application for substitution;
2. There must be the written consent of the client to the substitution;
3. There must be field the written consent of the attorney to be substituted,
if such consent can be obtained; and
4. In case such written consent cannot be procured, there must be filed
with the application for substitution, proof of service of notice of such
motion in the manner required by the rules, on the attorney to be
substituted.
Procedure:
1. Filing of Motion to dismiss when applicable before or on the date set
for mandatory conference, on any of the following grounds (Rule III,
Section 4, letter a, of the 2005 NLRC Rules):
i. lack of jurisdiction over the subject matter
ii. improper venue
Personal Notes of Janine J. Sarausos
iii. res adjudicate
iv. prescription
v. forum shopping 153
Note: the NLRC is a quasi-judicial agency, hence, initiatory pleadings filed
before it should be accompanied by certificate of non-forum shopping
[Maricalum Mining Corp vs. NLRC, Nov. 3, 1998]
Complaint or petition is a pleading alleging the cause or causes of
action of the complainant or petitioner. The names and addresses of all
complainants or petitioners and respondents must be stated in the complaint
or petition. It shall be signed under oath by the complainant or petitioner,
with a declaration of non-forum shopping. (Rule III, Section 1, Letter a,
2005 NLRC Rules). No amendment of the complaint or petition shall be
allowed after the filing of position papers, unless with leave of the Labor
Arbiter or the Commission (Rule III, Section 1, Letter c, 2005 NLRC
Rules).
Cause of action: A party having more than one cause of action against the
other party, arising out of the same relationship, shall include all of them in
one complaint or petition (Rule III, Section 1, Letter b, 2005 NLRC Rules).
Real party in interest. The full names of all the real parties in interest,
whether natural or juridical persons or entities authorized by law, shall be
stated in the caption of the complaint or petition, as well as in the decisions,
resolutions or orders of the Labor Arbiter or the Commission (Rule III,
Section 2, 2005 NLRC Rules).
Summons. 1. Served on the parties to the case personally by the Bailiff or
duly authorized public officer 3 days from receipt thereof or by registered
mail;
2. In special circumstances, in accordance with the pertinent
provisions of the Rules of Court;
3. In decisions and final awards, to both parties and their counsel or
representative by registered mail;
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4. If party or his counsel personally inquires, service to said party
shall be deemed effected upon actual receipt thereof;
5. Where parties are so numerous, service shall be made on counsel
and upon such number of complainants, as may be practicable, which shall
be considered substantial compliance with Article 224 (a) of the Labor
Code, as amended (Rule III, Section 6, 2005 NLRC Rules).
Prohibited Pleadings and Motions (Rule III, Section 4, 2005 NLRC
Rules)
1. Motion to dismiss the complaint except on the ground of lack of
jurisdiction over the subject matter, improper venue, res
adjudicata, prescription and forum shopping;
2. Motion for a bill of particulars;
3. Motion for new trial;
4. Petition for relief from judgment when filed with the Labor Arbiter;
5. Petition for certiorari, mandamus or prohibition;
6. Motion to declare respondent in default;
7. Motion for reconsideration or appeal from any interlocutory order of
the Labor Arbiter.
2. Conciliation and Mediation Conference shall be called for the purpose
of (1) amicably settling the case upon a fair compromise; (2) determining
the real parties in interest; (3) determining the necessity of amending the
complaint and including all causes of action; (4) defining and simplifying
the issues in the case; (5) entering into admissions or stipulations of facts;
and (6) threshing out all other preliminary matters. The Labor Arbiter shall
preside and take full control of the proceedings.
Should the parties arrive at any agreement as to the whole or any part
of the dispute, the same shall be (1) reduced to writing and (2) signed by the
parties and their respective counsel or authorized representative, if any, (3)
before the Labor Arbiter who shall grant the same if he is satisfied that the
parties understand the agreement, that the same was entered into freely and
voluntarily by them, and that it is not contrary to law, morals, and public
policy.
A compromise agreement duly entered into in accordance with this
Personal Notes of Janine J. Sarausos
Section shall be final and binding upon the parties and shall have the force
and effect of a judgment rendered by the Labor Arbiter.
153
6. Conciliation and Mediation Conference shall be called for the
purpose of (1) amicably settling the case upon a fair compromise; (2)
determining the real parties in interest; (3) determining the necessity of
amending the complaint and including all causes of action; (4) defining and
simplifying the issues in the case; (5) entering into admissions or
stipulations of facts; and (6) threshing out all other preliminary matters. The
Labor Arbiter shall preside and take full control of the proceedings.
Should the parties arrive at any agreement as to the whole or any part
of the dispute, the same shall be (1) reduced to writing and (2) signed by the
parties and their respective counsel or authorized representative, if any, (3)
before the Labor Arbiter who shall grant the same if he is satisfied that the
parties understand the agreement, that the same was entered into freely and
voluntarily by them, and that it is not contrary to law, morals, and public
policy.
A compromise agreement duly entered into in accordance with this
Section shall be final and binding upon the parties and shall have the force
and effect of a judgment rendered by the Labor Arbiter.
The mandatory conciliation and mediation conference shall, except for
justifiable grounds, be terminated within thirty (30) calendar days from the
date of the first conference.
No motion for postponement shall be entertained except on meritorious
grounds (Rule V, Sections 3, 4, 5, and 6, of the 2005 NLRC Rules)
Appearance of non-lawyers: only in the following instances:
6. he represents himself as party to the case;
7. he represents a legitimate labor organization, as defined under Article
212 and 242 of the Labor Code, as amended, which is a party to the
case: Provided, that he presents: (i) a certification from the Bureau of
Labor Relations (BLR) or Regional Office of the Department of Labor
and Employment attesting that the organization he represents is duly
registered and listed in the roster of legitimate labor organizations; (ii) a
verified certification issued by the secretary and attested to by the
Page 85 of 145

president of the said organization stating that he is authorized to
represent the said organization in the said case; and (iii) a copy of the
resolution of the board of directors of the said organization granting
him such authority;
8. he represents a member or members of a legitimate labor organization
that is existing within the employer's establishment, who are parties to
the case: Provided, that he presents: (i) a verified certification attesting
that he is authorized by such member or members to represent them in
the case; and (ii) a verified certification issued by the secretary and
attested to by the president of the said organization stating that the
person or persons he is representing are members of their organization
which is existing in the employer's establishment;
9. he is a duly-accredited member of any legal aid office recognized by
the Department of Justice or Integrated Bar of the Philippines:
Provided, that he (i) presents proof of his accreditation; and (ii)
represents a party to the case;
10. he is the owner or president of a corporation or establishment which is
a party to the case: Provided, that he presents: (i) a verified certification
attesting that he is authorized to represent said corporation or
establishment; and (ii) a copy of the resolution of the board of directors
of said corporation, or other similar resolution or instrument issued by
said establishment, granting him such authority.
Change of Lawyer, requisites:
5. There must be filed a written application for substitution;
6. There must be the written consent of the client to the substitution;
7. There must be field the written consent of the attorney to be substituted,
if such consent can be obtained; and
8. In case such written consent cannot be procured, there must be filed
with the application for substitution, proof of service of notice of such
motion in the manner required by the rules, on the attorney to be
substituted.
Consequences in Conciliation and mediation proceeding:
a. Effect of Failure of Conciliation and Mediation (Sec. 4.). – If parties
Personal Notes of Janine J. Sarausos
fail to amicably settle, in whole or part—LA shall terminate the
conciliation and mediation stage and proceed to pursue the other
purposes of the said conference and direct the parties to simultaneously 153
file their respective position papers on the issues agreed upon by the
parties and as reflected in the minutes of the proceedings.
b. Non-Appearance of Parties (Sec. 5). –
1. Of the complainant or petitioner during the two settings despite
due notice shall be a ground for the dismissal of the case without
prejudice.
Remedy: File a motion to revive or re-open a case dismissed without
prejudice, within 10 calendar days from receipt of notice of the order
dismissing the same; otherwise, his only remedy shall be to re-file the
case in the arbitration branch of origin.
2. Of respondent despite being duly served with summons, the LA
shall immediately terminate the mandatory conciliation and
mediation conference and allow the complainant or petitioner to
file his verified position paper and submit evidence in support of
his causes of action, and thereupon render his decision on the basis
of the evidence on record.
Compromise before Regional Director and Labor Arbiter
Any compromise settlement, including those involving labor standard
laws, voluntarily agreed upon by the parties with the assistance of the
Bureau or the regional office of the DOLE, shall be final and binding upon
the parties. The NLRC or any court, shall not assume jurisdiction over
issues involved therein except:
1. in case of non-compliance thereof or
2. if there is prima facie evidence that the settlement was obtained
through fraud, misrepresentation, or coercion (Art. 227 of the
Labor Code).
Remedy if compromise agreement is violated:
1. enforce the compromise agreement by writ of execution; or
2. regard it as rescinded, and insist on the original demand.
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Rule: Dire necessity + unconscionability= invalid compromise agreement.
Q: when is dire necessity deemed unacceptable to invalidate a
compromise agreement?
A: the existence of a VOLUNTARY ACCEPTANCE of the
agreement and the REASONABLE CONSIDERATION for it make the
agreement intrinsically valid and binding, and render the dire necessity
excuse immaterial and irrelevant (Galcia vs. NLRC, 1997)
Note: breach of compromise before RD is triable in LA.
Re: Waiver and Quitclaim:
A deed of release and quitclaim cannot bar an employee from
demanding the benefits to which he is legally entitled; that, quitclaims or
complete releases executed by the employees do not stop them from
pursuing their claim arising from the ULP of the employer; and that the
employees who received their separation pay are not barred from contesting
the legality of their dismissal and that acceptance of these benefits would
not amount to estoppels.
Generally, quitclaims by laborers are frowned upon as contrary to
public policy and are held to be ineffective to bar recovery for the full
measure of the worker’s rights. The reason for the rule is that the employer
and the employee do not stand on the same footing (Pure foods Corp vs.
NLRC, 12-12-97)
The waiver of a money claim is a personal right; i.e., a right that must
be personally exercised. Money claims due to laborers cannot be the object
of settlement or compromise effected by the union, union officers or
counsel without the specific individual consent of each laborer concerned
(General Rubber Corp. vs. Drilon, January 31, 1989).
Not all waivers and quitclaims are invalid as against public policy. If
the agreement was voluntarily entered into and represents a reasonable
settlement, it is binding upon parties ad may not later be disowned simply
because of a change of mind (see, Labor vs. NLRC & Gold City
Commercial Complex, Sept 14, 1995).
Personal Notes of Janine J. Sarausos
9. Submission of verified Position Paper and Contents of Position
Paper with supporting documents and affidavits, within an inextendible
period of 10 calendar days from the date of termination of the 153
mandatory conciliation and mediation conference (Rule V, Section 7 of
the 2005 NLRC Rules).
Should the parties fail to reach an agreement, LA should not decide the
case on the merits, but should instead REQUIRE the submission of position
papers, otherwise, there is violation of due process. The opportunity to
submit position papers should not be summarily done away with (Kanlaon
Construction Enterprises vs. NLRC, Sept. 18, 1987)
Reply may be filed by any party within 10 calendar days from receipt
of the position paper of the adverse party.
Quantum of evidence required: Substantial evidence, or that relevant
evidence as a reasonable mind might accept as adequate to support a
conclusion.
Burden of Proof: upon the complainant or petitioner.
10. Determination of the necessity of Clarificatory Hearing
LA shall MOTU PROPRIO determine whether there is a need for a
hearing or clarificatory conference and ask clarificatory questions to further
elicit facts or information, including but not limited to subpoena. He shall
take full control (eg. Presentation of evidence) and personally conduct the
hearing or clarificatory conference on matters relevant to the issue before
him and necessary for a just and speedy disposition of the case.
Consequences of non-appearance of non-appearance of parties and
postponement of hearings:
1. By the complainant or petitioner, who was duly notified thereof, may
be sufficient cause to dismiss the case without prejudice; BUT
dismissal of the case for the second time due to the unjustified non-
appearance of the complainant or petitioner, who was duly notified of
the clarificatory hearing, shall be with prejudice.
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Remedy: File a motion to revive or re-open a case dismissed without
prejudice, within 10 calendar days from receipt of notice of the order
dismissing the same; otherwise, his only remedy shall be to re-file the
case in the arbitration branch of origin.
2. By the respondent despite due notice thereof, the complainant shall be
allowed to present evidence ex-parte, without prejudice to cross-
examination at the next hearing or conference. 2 successive non-
appearances by the respondent during his scheduled presentation of
evidence or opportunity to cross-examine witnesses, despite due notice
thereof, shall be construed as a waiver on his part to present evidence
or conduct cross-examination.
Inhibition. LA may voluntarily inhibit himself from the proceedings, but an
order denying or granting the motion for prohibition is INAPPELABLE.
11. Period to decide the case (Sec. 13). Within 30 calendar days,
without extension, after the submission of the case by the parties for
decision, even in the absence of stenographic notes;
Provided however, that cases involving overseas Filipino workers shall
be decided within 90 calendar days after the filing of the complaint which
shall commence to run upon acquisition by the Labor Arbiter of jurisdiction
over the respondents.
Contents of Decisions. - The decisions and orders of the Labor Arbiter shall
be clear and concise and shall include a brief statement of the: a) facts of the
case; b) issues involved; c) applicable laws or rules; d) conclusions and the
reasons therefor; and e) specific remedy or relief granted. In cases involving
monetary awards, the decisions or orders of the Labor Arbiter shall contain
the amount awarded.
In case the decision of the Labor Arbiter includes an order of
reinstatement, it shall likewise contain: a) a statement that the reinstatement
aspect is immediately executory; and b) a directive for the employer to
submit a report of compliance within 10 calendar days from receipt of the
said decision.
Personal Notes of Janine J. Sarausos
Q: is writ of execution necessary for the enforcement of reinstatement
order?
A: No. immediate reinstatement is mandatory, and is NOT stayed by an 153
appeal or posting of a bond pending appeal. The legislative intent is quite
obvious, i.e., to make an award for reinstatement immediately enforceable,
even pending appeal. To require the application for and issuance of a writ of
execution would betray the object and intent of Art. 223 for an application
for a writ of execution and its issuance could be delayed for numerous
reasons (Pioneer Texturizing Corp. vs. NLRC, Oct. 16, 1997).
Now, reinstatement is not only immediately executor, but also self-
executory.
“the remedy for refusal of the employer to reinstate the employee
despite several writs of execution is not the grant of additional backwages
to serve as damages, but to file a motion to cite the employer for contempt
(Christian Literature Crusade vs. NLRC, 171 SCRA 712).
“reinstatement during appeal is warranted ONLY when the LA himself
rules that the dismissed employee should be reinstated. An order for
reinstatement must be specifically declared and cannot be presumed (Filflex
Industrial & Manufacturing Corp. vs. NAFLU, Feb. 12, 1998).
Motions for Reconsideration and Petitions for Relief from Judgment. -
No MR or PFR of any decision, resolution or order of a LA allowed. BUT,
when one such MR is filed, it shall be treated as an appeal provided that it
complies with the requirements for perfecting an appeal. In the case of a
PFR from judgment, the LA shall elevate the case to the NLRC for
disposition.
Q: is writ if execution necessary for the enforcement of reinstatement
order? (actual and payroll reinstatement)
A: NO. immediate reinstatement is mandatory, and is not stayed by an
appeal or posting of a bond pending appeal. The legislative intent is quite
obvious, i.e., to make an award for reinstatement immediately enforceable,
even pending appeal. To require the application for the issuance of a writ of
execution would betray the object and intent of Art. 223 for an application
for a writ of execution and its issuance could be delayed for numerous
reasons. Now, reinstatement is not just immediately executor; it is SELF-
Page 88 of 145
 Personal Notes of Janine J. Sarausos

EXECUTORY. 4. Administrative supervision: exclusively upon the chairman

“The remedy for refusal of the employer to reinstate the employee
despite several writs of execution is not the grant of additional backwages 5. Appointment of LA: by the President upon recommendation of NLRC 153
to serve as damages, but to file a motion to cite the employer for contempt en banc (NLRC is attached to DOLE for policy and coordination
(Christian Literature Crusade vs. NLRC, 171 SCRA 712) purposes; it is independent)
6. Salaries and benefits and emolument. NLRC has same rank CA and LA
TOPIC 16. NLRC and The 2005 REVISED RULES OF PROCEDURE of RTC.
OF THE NLRC
Powers of the NLRC:
RA 9347 1. Rule-making power (promulgate rules and regulation)
1. Composition: i. Governing the heating and disposition of vases before it and
Chairman and 23 members: its regional branches;
8- public sectors ii. Pertaining to its internal functions; and
8- worker’s organization iii. Those as may be necessary to carry out the purposes of this
8- employer’s organization Code
2. Division 2. Power to issue compulsory processes
8 divisions at 3 members each i. Administer oaths;
En Banc is administrative not quasi-judicial. It sits only for purposes of ii. Summon parties; and
promulgating rules and regulations governing the hearing and disposition of iii. Issue subpoena duces tecum and ad testificandum
cases before any of its divisions and regional branches and formulating 3. Power to investigate matters and hear disputes within its jurisdiction
policies affecting its administration and operations. But the NLRC may sit i. Conduct investigations for the determination of a question,
en banc on temporary or emergency basis, allow cases within the matter or controversy within its jurisdiction; and
jurisdiction of any division to be heard and decided by any other division ii. Proceed to hear and determine the dispute in the manner laid
whose docket allows the additional workload and such transfer will not down under par. c of Art. 218
expose litigants to unnecessary additional expenses. 4. Contempt power
Division- adjudicative function. It sits to exercise its adjudicatory and Grounds for Direct contempt: misbehavior in the presence of or so near
all other powers, functions, and The divisions of the Commission shall have the Commissioner or LA as to obstruct or interrupt the proceedings before
exclusive appellate jurisdiction over cases within their respective territorial the same, including:
jurisdiction. a. Disrespect toward said officials;
b. Offensive acts towards others;
3. Territorial jurisdiction c. Refusal to be sworn or answer as witness;
1-6th division: NCR and other parts of Luzon; d. Refusal to subscribe to an affidavit or deposition when
7th div: Visayas lawfully required to do so.
8th div.: Mindanao Grounds for Indirect contempt: Rule 71, Rules of Court

Page 89 of 145

5. Power to issue injunctions and restraining orders when it is established
on the basis of a sworn allegations in the petition that the acts complained
of, involving or arising from any labor dispute before the Commission
which if not restrained or performed forthwith, may cause grave or
irreparable damage to any party or render ineffectual any decision in favor
of such party, and that the petitioner is willing to post a bond (see, PAL vs.
NLRC, March 20, 1998)
6. Power to conduct ocular inspection
The chairman, any Commissioner, LA or their duly authorized
representative may at anytime during working hours:
a. Con
duct an ocular inspection on any establishment, building or ship or
vessel, place or premises, including any work, material, implement,
machinery, appliance or any object therein; and
b. Ask
any employee, laborer or any person, as the case may be, for any
information or data concerning any matter or question relative to the
object of the investigation.
7. Appellate power
NLRC has exclusive appellate jurisdiction over all cases decided by the
LA and employer-employee relations cases decided by the POAE, if any.
Q: may the NLRC order the reinstatement of workers who did not
appeal from a decision of the Labor Arbiter ordering payment to them of
separation pay in lieu of reinstatement?
A: NO. an appellee who has not himself appealed cannot obtain from
the appellate court any affirmative relief other than those granted in the
decision of the court below. The appellee can only advance argument to
defeat the appellant’s claim or to uphold disputed decision (SMI Fish
Industries, Inc vs. NLRC, Sept 2, 1992)
APPELLATE PROCEEDINGS BEFORE THE NLRC
Nature of Proceedings. Art. 221, LC: - In any proceeding before the
Commission or any of the Labor Arbiters, the rules of evidence prevailing
Personal Notes of Janine J. Sarausos
in courts of law or equity shall not be controlling and it is the spirit and
intention of this Code that the Commission and its members and the Labor
Arbiters shall use every and all reasonable means to ascertain the facts in 153
each case speedily and objectively and without regard to technicalities
of law or procedure, all in the interest of due process.
Thus, even if the evidence is not submitted to the LA, the fact that it
was duly introduced on appeal to respondent commission is enough basis
for the latter to have been more judicious in admitting the same, instead of
falling back on the mere technicality that the said evidence can no longer be
considered on appeal (PT&T Corp. vs. NLRC, March 21, 1990).
Proceedings:
Period to Appeal (Rule VI, Sec. 1). Within 10 calendar days from
receipt of such decisions, awards, or orders of the LA and 5 calendar days
from the decision etc of the Regional Directors. No motion or request for
extension of the period within which to perfect an appeal shall be allowed.
Only Grounds (Sec. 2):
a) If there is prima facie evidence of abuse of discretion on the part of the
Labor Arbiter or Regional Director;
b) If the decision, resolution or order was secured through fraud or
coercion, including graft and corruption;
c) If made purely on questions of law; and/or
d) If serious errors in the findings of facts are raised which, if not corrected,
would cause grave or irreparable damage or injury to the appellant.
Where Filed (Sec. 3). - Regional Arbitration Branch or Regional Office
where the case was heard and decided.
Requisites For Perfection Of Appeal (Sec. 4):
1) filed within the reglementary period;
2) verified by the appellant himself;
3) in the form of a memorandum of appeal which shall state the grounds
relied upon and the arguments in support thereof, the relief prayed for, and
with a statement of the date the appellant received the appealed decision,
resolution or order;
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4) in 3 legibly typewritten or printed copies; and
5) accompanied by:
i) proof of payment of the required appeal fee (2005 NLRC Rule:
P150.00 only, but in NLRC En Banc Res. No. 08-07, Series of 2007
effective June 24, 2007 on New Schedule of Legal Fees: P500.00);
ii) posting of a cash or surety bond (a provided in Art. 223 of the LC,
incases of a judgment involving a monetary award, an appeal by the
employer may be perfected only upon the posting of a cash or surety bond
issued by a reputable bonding company duly accredited by the Commission
in the amount equivalent to the monetary award in the judgment appealed
from, exclusive of damages and attorney's fees as amended by sec. 6,
ibid);
No motion to reduce bond shall be entertained except on meritorious
grounds, and only upon the posting of a bond in a reasonable amount in
relation to the monetary award.
The mere filing of a motion to reduce bond without complying with the
requisites in the preceding paragraphs shall not stop the running of the
period to perfect an appeal.
iii) a certificate of non-forum shopping; and
iv) proof of service upon the other parties.
Omissions not fatal to the appeal:
1.) Failure to give copy of the appeal to the adverse party within 10 days
2.) Failure to pay the appeal fees
Note: A mere notice of appeal without complying with the other requisites
aforestated shall not stop the running of the period for perfecting an appeal.
Appellee may file an answer or reply, not later than 10 calendar days
from receipt thereof, and failure to do so may be construed as a waiver on
his part to file the same.
To discourage frivolous or dilatory appeals, the Commission or the
Labor Arbiter shall impose reasonable penalty, including fines or censures,
upon the erring parties.
In as much as in the practice the NLRC allows that reduction of the
appeal bond upon motion of appellant and on meritorious grounds, it
Personal Notes of Janine J. Sarausos
follows that a motion to that effect may be filed within the reglementary
period for appealing. Such motion may be filed in lieu of a bond which
amount is being contested. In the meantime, the appeal is not deemed 153
perfected and the LA retains jurisdiction over the case until the NLRC has
acted on the motion and appellant has filed the bond fixed by the NLRC
(Star Angel Handicraft vs. NLRC, Sept. 20, 1994).
Thus in the case of, Nicol v. Footjoy Industrial Corp., GR No. 159372,
July 27, 2007, J. Morales
Facts:
Footjoy, a manufacturer of slippers, shoes, sandals, and luggage, was
sued by its employees after they were terminated from work due to business
losses and a fire that destroyed the company’s premises. The Labor Arbiter
found for the employees, declared them to be constructively terminated, and
ordered Footjoy to pay them wage differentials, backwages, and attorney’s
fees totaling Php51,956,314. Footjoy appealed to the NLRC and moved to
reduce its appeal bond to Php10 Million. The NLRC, however, denied
Footjoy’s motion and later, dismissed its appeal. The CA reversed the
NLRC.
Held: The Court said that the CA did not commit a reversible error in ruling
that the NLRC acted with grave abuse of discretion when it peremptorily
denied Footjoy’s motion to reduce its appeal bond without considering
evidence to justify the reduction. Respondent Footjoy had presented to
NLRC evidence that 153 individual complainants had already executed
quitclaims and that 795 other former employees had already received their
separation pay, leaving only about 241 workers with unsatisfied claims. The
NLRC showed precipitate haste when it dismissed the quitclaims and
release documents presented by Footjoy when it could easily have required
the verification of the signatures and the settlement’s legitimacy, the Court
said.
The Court also said that while Footjoy’s motion to reduce the appeal
bond was primarily due to the unhealthy state of its finances, the NLRC
was not precluded from making a preliminary determination of Footjoy’s
financial capability to post the required bond, without necessarily making a
ruling on the merits. It added that NLRC is also not precluded from
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receiving evidence on appeal as technical rules of evidence are not binding
in labor cases, the NLRC having the authority to determine whether the
bond offered is reasonable in relation to the award.
Period to resolve appeal. Within 20 calendar days from receipt of the
answer of the appellee which decision of the Commission shall be final and
executory after 10 calendar days from receipt thereof by the parties.
MOTIONS FOR RECONSIDERATION (Sec. 15). - MR of any
decision, resolution or order of the Commission shall not be entertained
except when based on palpable or patent errors; provided the following
conditions are meet:
1. Motion is under oath and filed within 10 calendar days from receipt
of decision, resolution or order, with proof of service that a copy of the
same has been furnished, within the reglementary period, the adverse
party;and
2. That only one from the same party shall be entertained.
Q: Suppose a party fails to appeal, may he still participate and file a motion
for reconsideration in a separate appeal timely filed by the adverse party?
A: The party who failed to appeal from the decision of the LA to the NLRC
can still participate in a separate appeal timely filed by adverse party by a
MR of the decision of the NLRC on appeal (Sadol vs. KAO, Inc., June 13,
11990)
EXECUTION PROCEEDINGS
1. Pre-Execution Conference (Rule XI, Sec. 2). Within 2 working days
from receipt of a motion for the issuance of a writ of execution, LA shall
schedule a pre-execution conference or hearing to thresh out matters
relevant to execution, including the computation of the award.”
2. Quashal of Writ of Execution (Rule XI, Sec. 11). The mere filing of a
motion to quash shall not stay execution proceedings. A motion to quash
shall be resolved by the LA within 10 working days from submission of said
motion for resolution.”
Personal Notes of Janine J. Sarausos
Third Party Claims (Rule XI, Sec. 12): File within five (5) days from
the last day of posting or publication of the notice of execution sale;
otherwise the claim shall be forever barred. 153
The third party claimant shall:
1. Execute an affidavit stating his title to the property or right to
possession thereof with supporting evidence, and
2. File the same with the Sheriff and the Commission or Labor Arbiter
who issued the writ of execution.
LA who issued the writ may require the third party claimant to adduce
additional evidence in support of his third party claim and to post a cash or
surety bond equivalent to the amount of his claim, as provided for in
Section 6 of Rule VI, without prejudice to the posting by the prevailing
party of a supersedeas bond in an amount equivalent to that posted by the
third party claimant.
Upon receipt of the third party claim, all proceedings, with respect to
the execution of the property subject of such claim, shall automatically be
suspended.
LA shall resolve the propriety of such third party claim within 10
working days from submission of said claim for resolution.”
REMEDY FROM ADVERSE DECISION OF THE NLRC.
St. Martin Funeral Home vs. NLRC and Aricayos, Gr. No. 130866,
Sept. 16, 1998, En Banc:
We prefatorily delve into the legal history of the NLRC. It was first
established in the DOLE by PD. 21 on Oct. 14, 1974, and its decision
were expressly declared to be appealable to the SOLE and, ultimately,
to the President of the Philippines.
On May 1, 1974, PD No. 442 enacted the Labor Code of the
Philippines, the same to take effect six months after its
promulgation.xxx Initially, Art. 303 (now Art 223) thereof also granted
an aggrieved party the remedy of appeal form the decision of the
NLRC to the SOLE, but PD 1392 subsequently amended said provision
and abolished such appeals. No appellate review has since then been
provided for. Thus, to repeat, under the present state of law, there is no
provision for appeals from the decision of the NLRC.xxx It will
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however be noted that par. 3, Sec. 9 f BP 129 now grants exclusive
appellate jurisdiction to the Court of Appeals over all final adjudication
of RTC and quasi-judicial agencies, except, among others, “those
falling within the appellate jurisdiction of the Supreme Court in
accordance with… Labor Code xxx” This would necessarily contradict
with what has been said all along that appeal does not lie from
decisions of the NLRC. Yet, under such excepting clause literally
construed, the appeal from the NLRC cannot be brought to the CA, but
to the SC by necessary implication. This is illogical and impracticable,
and Congress could not have intended that procedural gaffe, since there
are no cases in the Labor Code the decisions, resolutions, orders or
awards of which are within the appellate jurisdiction of the SC or any
other court for that matter. The Court is therefore of the considered
opinion that ever since appeals from the NLRC to the Supreme Court
were eliminated, the legislative intendment was that the special civil
action of certiorari was and still is the proper vehicle for judicial review
of the decisions of the NLRC.
Therefore, all references in the amended Sec. 9 of BP 129 to
supposed appeals from the NLRC to the Supreme Court are
interpreted and hereby declared to mean and refer to petitions for
certiorari under Rule 65. Consequently, all such petitions should
henceforth be initially filed in the Court of Appeals in strict
observance of the doctrine on the Hierarchy of courts as the
appropriate forum for the relief desired.
Note: Failure to file MR before filing the Petition for Certiorari is NOT
always a fatal omission (eg. Ranara vs. NLRC, Aug. 14, 1992 and Alfante
vs. NLRC, Dec. 15, 1997)
Finality of NLRC: After 10 calendar days from receipt thereof by the parties
(Rule VII, Section 14, 2005 NLRC Rules). After the expiration of the said
period, the decision shall be entered in a book of entries of judgment.
Pre-Execution Conference (Rule XI, Section 2 of the 2005 NLRC Rules)-
Within 2 working days from receipt of a motion for the issuance of a writ of
Personal Notes of Janine J. Sarausos
execution, and subject to Section 1, paragraph (b) of this Rule, the LA shall
schedule a pre-execution conference or hearing to thresh out matters
relevant to execution, including the computation of the award.” 153
EXECUTION OF MONETARY JUDGMENT (THE NLRC MANUAL
ON EXECUTION OF JUDGMENT, As amended by Resolution No. 02-02,
Series of 2002)
Pertinent provisions:
1. RULE I
THIRD PARTY CLAIM- a claim whereby a person, not a party to the
case, asserts title or right to the possession of the property levied upon.
2. RULE II- the Sheriff
Only bonded sheriffs may serve writs of execution involving the taking,
holding or delivering of money or property in trust for the prevailing
party (sec. 2)
3. RULE III- the writ of execution
1. Execution upon final judgment or order: Execution shall issue only
upon a judgment or order that finally disposes of an action or
proceeding, except in specific instances where the law provides for
execution pending appeal (SEC 1).
2. Issuance, Form and Contents of a Writ of Execution (SEC 2). Issued in
the name of the Republic of the Philippines from the NLRC or any of
its LA, requiring the sheriff or duly designated officer to execute their
judgment; containing a dispositive portion of the decision, order or
award sought to be executed; and must require the sheriff to apply the
writ first to the personal property then to the real property.
If the execution be for the reinstatement of any person to any
position, office or employment, such writ shall be served by the sheriff
upon the losing party or upon any other person required by law to obey
the same. Such party or person may be punished for contempt if he
disobeys such decision or order for reinstatement, INCLUDING
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PAYMENT OF SALARY AS A CONSEQUENCE OF
REINSTATEMENT PENDING APPEAL;
Note: the posting of a bond by the employer shall NOT stay the execution
of an order for reinstatement.
3. Execution in Case of Death of Party (SEC 3). Where a party dies after
the finality of the decision/entry of judgment , or order, execution
thereon may issue or one already issued may be enforced in the
following cases:
a. In case of death of the prevailing party, upon filing of motion for
substitution of party by the heirs, successors-in-interest,
executor or administrator;
b. In case of death by the losing party, after appropriate testate or
intestate proceedings against his successors-in-interest, executor
or administrator;
c. In case of death of the losing party after execution and actual levy
upon any of his property, the same may be sold for the satisfaction
thereof, and the sheriff making the sale shall account to his HEIRS,
successors-in-interest, executor or administrator for any surplus in
his hands.
4. Issuance of a Writ (SEC 4). The Commission or LA shall, motu propio
or upon motion of any interested party, issue a writ of execution on a
judgment only within 5 years from the date it becomes final and
executory. No motion for execution shall be entertained nor a writ be
issued unless the Commission or LA is in possession of the records of
the case which shall include an entry of judgment where the case has
been appealed EXCEPT IN CASES OF REINSTATEMENT
PENDING APPEAL AND IN THOSE CASES WHERE PARTIAL
EXECUTION IS ALLOWED BY LAW, WHERE THE LABOR
ARBITER SHALL RETAIN DUPLICATE ORIGINAL COPIES OF
THE DECISION TO BE IMPLEMENTED AND PROOF OF
SERVICE THEREOF FOR THE PURPOSE OF ITS IMMEDIATE
ENFORCEMENT.
Personal Notes of Janine J. Sarausos
5. Resolution of Motion to Quash (Sec. 5). In case the aggrieved party
files a motion to quash, said motion shall be resolved by the LA within 153
10 days from the submission of said motion for resolution. An appeal
from the order of the LA resolving the motion to quash may be treated
as a petition for injunction under Par (e) of Art. 218 of the Labor
Code, as amended if the same satisfies the requirements provided for
by law.
6. Execution by Independent Action (SEC 6). A judgment, after the lapse
of five (5) years from the date it becomes final and executory and
before it is barred by prescription, may only be enforced by AN
INDEPENDENT action.
4. RULE IV- execution
(1) Execution of Money Judgment (SEC 2). Levy on all the properties
of the losing party, not exempt from execution, or on a sufficient
amount of such property, if there be sufficient and selling the same at
public auction to the highest bidder, and depositing the proceeds
thereof with the cashier of the NLRC. Where payments are made in
checks, the same shall be issued in the name of the National Labor
Relations Commission.
5. RULE V- Levy
(1) On Personal Property (SEC 1). – Requirements for a valid personal
levy:
i. Personal property capable of manual delivery- taking the property plus
issuance of the receipt;
ii. Stocks shares-by leaving with the president or managing agent thereof,
a copy of the decision, order or award, and a notice stating that the
stock or interest of the party against whom the levy is issued, is levied
pursuant thereto;
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iii. Debts and credits, and other personal property not capable of manual
delivery- by leaving with the person owing such debts, or having in his
possession or under his control, such credits or other personal property,
or with his agent, a copy of the decision, order or award, and notice that
the debts owing by him to the party against whom the levy is issued,
and the credits and other personal property in his possession, or under
his control, belonging to said party are levied in pursuance of such
decisions, order or award;
A copy of said decision, order or award, and notice shall also be filed
with the Office of the Clerk of Court in which said estate is being settled
and served upon the heir, legatee or devisee concerned.
If the property sought to be levied is in custodia legis, a copy of the
decision, order or award, and notice shall be filed with the proper court, and
notice of levy served upon the custodian of such property.
(2) Effect of Garnishment (SEC 2). - By serving a notice thereof to the
third party who has possession or control of such money, goods,
chattels and/or any interest therein, belonging or owing to the losing
party directing or requiring him (garnishee) to hold the same subject to
further orders from the Commission or Labor Arbiter who issued the
writ. Where the property garnished consists of money deposited with a
bank or third party, the Commission or Labor Arbiter shall order that
the same shall only be released to the cashier of the NLRC.
(3) Levy on Real Property (SEC 3).- by filing with the register of deeds a
copy of the decision, order, or award, together with a description of the
property levied, and a notice that it is levied upon and by leaving a
copy of such decision, order or award, description, and notice with the
occupant of the property, if there is any
(4) Effect of Levy on Debts and Credits (SEC 5). All persons having in
their possession or under their control any credit or other similar
personal property belonging to the party against whom levy is issued,
or owing any debt to the latter, at the time of service upon them a copy
of the decision, order or award, and notice, shall be liable to the
Personal Notes of Janine J. Sarausos
prevailing party for the amount of such credits, debts or other property,
until the levy is discharged, or any judgment recovered by him is
satisfied, unless such property is delivered or transferred, or such debts 153
are paid, to the sheriff or duly designated officer of the National Labor
Relations Commission.
6. RULE VI- THIRD PARTY CLAIM
Proceedings:
1. The third party claimant shall execute an affidavit of third party
claim stating his title to the property or possession thereof WITH
SUPPORTING EVIDENCE and
2. Shall file the same with the sheriff and copies thereof served upon
the Commission or Labor Arbiter who issued the writ and upon the
prevailing party.
3. Upon receipt of the third party claim, all proceedings related to the
3rd-party property shall be suspended. The Commission or LA who
issued the writ may require the third party claimant to adduce
additional evidence in support of his affidavit and to post a cash or
surety bond equivalent to the amount of his claim without
prejudice to the posting by the prevailing party of a supersedeas
bond in an amount equivalent to that posted by the third party
claimant.
4. The propriety of the third party claim shall be resolved within 10
working days from SUBMISSION OF THE CLAIM FOR
RESOLUTION.
LA’s decision is appealable to the NLRC within 10 working days from
notice. NLRC shall resolve the appeal within the same period.
7. RULE VII-SALE OF PROPERTY ON EXECUTION
(1) Notice of Sale (SEC 1). Is mandated to be made describing the property
to be sold, its location, the date, time and place of sale and terms and
conditions thereof.
i. Perishable property- by posting written notice of the time and place of
the sale in 3 public places in the municipality or city, where the sale is
to take place, for such time as the sheriff may deem reasonable,
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considering the character and condition of the property;
ii. Other personal property, by posting a similar notice in 3 public
places in the municipality or city where the sale is to take place, for not
less than 5 nor more than 10 days;
iii. Real property- by posting for 20 days a notice in 3 public places in the
municipality or city where the property is situated, a similar notice
particularly describing the property and stating where the property is to
be sold, and, if the assessed value of the property exceeds P50,000.00,
by publishing a copy of the notice once a week for 2 consecutive
weeks, in a newspaper of general circulation in the province or city, if
there be one. If there are newspapers published in the province or city
in English and/or Filipino, then the publication shall be made in one
such newspaper;
In all cases, written notice of the sale shall be given to the losing party;
How Property Sold on Execution (Sec. 3). ? All sales shall be made at
public auction, to the highest bidder, between 9:00AM and 5:00PM.
Refusal of Purchaser to Pay (Sec. 4).- The sheriff may again sell the
property to the highest bidder and shall not be responsible for any loss
occasioned thereby; but the Commission or Labor Arbiter who issued the
writ of execution may order the refusing purchaser to pay to the former the
amount of such loss, with costs, and may punish him for contempt if he
disobeys the order.
(2) Conveyance
(3) Redemption of Real Property Sold (SEC 11);
Who?: 1. The losing party, or his successor in interest in the whole or
any part of the property; 2. A creditor called redemptioner, having a lien
by attachment, judgment or mortgage on the property sold.
When?: at any time within twelve (12) months after the sale, by paying
the purchaser the amount of his purchase, with one per centum per
month interest thereon, in addition, up to the time of redemption,
together with the amount of any assessments or taxes which the
purchaser may have paid thereon after purchase and interest on such
last-named amount at the same rate. Subject to re-redemption within 60
Personal Notes of Janine J. Sarausos
days after the last redemption .
Revival of Judgment. Purchaser may in a proper action, recover from the 153
prevailing party the price paid, with interest, or so much thereof as has not
been delivered to the losing party; or he may, on motion after notice, have
the original judgment revived in his name for the whole price with interest,
or so much thereof as has been delivered to the losing party.
Grounds:
i. Purchaser of real property sold on execution or his successor-in-
interest fails to recover the possession thereof, or
ii. Evicted due to irregularities in the proceedings concerning the sale,
or
iii. Property sold was exempt from execution, or
iv. Third party has vindicated his claim to the property,
CQN: The judgment so revived shall have the same force and effect as
an original judgment would have as of the date of the revival.
TOPIC 17. RIGHT TO SELF ORGANIZATION
Constitutional Basis: Article III Section 8 (1987 Constitution). The
right of the people in the public and private sectors to form unions,
associations or societies for purposes not contrary to law shall not be
abridged.
Note: However in RA 3350 otherwise known as the Industrial Peace
Act -“but such agreement shall not cover members of any religious sects
which prohibit affiliation of their members in any such labor
organization.”… The free exercise of religious profession or belief is
superior to contract rights. In case of conflicts the latter must yield to the
former (Victoriano vs. Elizalde Rope Worker’s Union et al)
Statutory basis. Art. 243 of the Labor Code
What right to self-organization includes (two-faceted right):
The right to self-organization shall include the right to form, join or
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assist labor organizations for 1 purposes of collective bargaining through
representatives of their own choosing and 2 to engage in lawful concerted
activities for the same purpose or for their mutual aid and protection,
subject to the provisions of Art. 264 of this Code.
The right not to join, affiliate with, form or assist a labor organization is
subsumed in the right to join, form or assist union.
The right to join, form or assist labor organizations comprehends two broad
notions:
1. liberty or freedom, i.e., absence of legal restraint, whereby an employee
may act for himself without being prevented by law; and
2. power, whereby an employee may, as he pleases, join or refrain from
joining an association.
Coverage of self-organization:
1. All persons employed in commercial, industrial and agricultural
enterprises and in religious, charitable, medical, or educational institutions,
whether operating for profit or not, shall have the right to self-organization
and to form, join, or assist labor organizations of their own choosing for
purposes of collective bargaining.
2. Ambulant, intermittent and itinerant workers, self-employed people,
rural workers and those without any definite employers may form labor
organizations for their mutual aid and protection. (ART. 243, LC).
3. A duly registered federation or national union may directly create a
local chapter by issuing a charter certificate indicating the establishment of
the local chapter. The chapter shall acquire legal personality only for
purposes of filing a petition for certification election from the date it was
issued a charter certificate (Art. 234-A, inserted by RA 9481)
Who are workers with right to self-organization?
Any employee, whether employed for a definite period or not, shall,
beginning on his first day of service, be considered as an employee for
purposes of membership in any labor union [Art. 277 (c)]
All persons employed in commercial, industrial and agricultural
enterprises including:
Personal Notes of Janine J. Sarausos
1. Employees of government owned or controlled corporations
without original charters established under the Corporation Code.
2. Employees of religious, charitable medical or education institutions 153
operating for profit or not
3. Alien employees with valid working permits issued by the DOLE if
they are nationals of a country which grants the same or similar rights
to Filipino workers as certified by the DFA (Reciprocity rule) and
which has ratified ILO convention no. 87 and 98.
4. All other workers including ambulant, intermittent and other workers,
the self-employed people, rural workers and those without any definite
employers may form labor organizations for their mutual aid and
protection and other legitimate purposes except collective bargaining
(DO 40-03; 40-A-03; 40-B-03).
Note: Everybody can exercise their right to association whether in the
public or private sector.
Excluded employees (DISQUALIFICATIONS):
1. Employees of Government corporations established through
special charters- governed by Civil Service Rules and Regulations;
may form union for their mutual aid and protection but not for the
purpose of collective bargaining (SSSEA vs. CA, 175 SCRA 689).
2. Managerial employees- absolutely disqualified by express
provision of the Labor Code (Art, 245). Thus, managerial
employees are not eligible to join, assist or form any labor
organization.
Rationale for the prohibition: Conflict of interest. If these
managerial employees will belong to or be affiliated with a Union, the
latter might not be assured of their loyalty to the union in view of
evident Conflict in interest or that the union can also be company-
dominated with the presence of managerial employees in union
membership. (United Pepsi-Cola Supervisory Union vs. Laguesma and
Golden Farms, Inc. vs. Ferrer-Calleja, 175 SCRA 471)
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3. Supervisory employee- relatively disqualified; shall not be eligible
for membership in the collective bargaining unit of the rank-and-
file employees but may join, assist or form separate collective
bargaining units and/or legitimate labor organizations of their own.
The rank and file union and the supervisors' union operating
within the same establishment may join the same federation or
national union (Art. 245, as amended by RA 9481)."
DISTINCTIONS:
a) Supervisory employees vs. rank-and-file:
1. In hierarchy of status, supervisory employees belong to the
higher rank;
2. Supervisory employees are required to exercise independent
judgment while rank-and-file employees are required to do
routinary work.
b) Supervisory employees vs. managerial employees:
1. Managerial employees have the power to hire, dismiss, transfer
employees; supervisory employees merely effectively recommend.
“Effectively recommend”, meaning: Where recommendatory
powers are subject to evaluation, review and final action by the
department heads and other higher executives of the company, the
same, although present, are not effective and not an exercise of
independent judgment as required by law (Franklin Baker Co. vs.
Trajano, 157 SCRA 416).
2. Managerial employees lay down management policy, supervisory
employees merely execute management policy.
It is the nature of the employee’s functions, and not the
nomenclature or title given to his job, which determines whether
he is a managerial or supervisory employee (NATU vs. Torres, 239
SCRA 546).
Rationale for relative disqualification of supervisory employee: Merger
(of rank and file and supervisory employees) would create an obvious
conflict of views among the members, or at least between two groups
of members, espousing opposing interest. Members of the supervisory
Personal Notes of Janine J. Sarausos
union might refuse to carry out disciplinary measures against their co-
member rank and file employees.
Possible areas of conflict of interest (PhilPhos Fertilizer Corp vs. 153
Torrres, 231 SCRA 335):
1. Discipline
2. Collective bargaining
3. Strike
3. Confidential employees -They are 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.
(Metro Lab Industries vs. Confessor et al). One entrusted with
confidence on delicate matters or with the custody, handling,
care and protection of the employer’s property.
Examples: legal secretaries (Pier 8 Arrastre & Stevedoring Services,
Inc vs. Roldan- Confessor)
Accounting personnel
Radio/ telegraph operators (Golden Farms, Inc. vs. Ferrer-Calleja,
supra)
Tests to determine whether one is a confidential employee:
a) Must assist or act in a confidential capacity; and
b) To persons who formulate, determine and effectuate management
policies in the field of labor relations. According to SMC
Supervisors & Exempt Union vs. Laguesma, Aug 15, 1997, “an
important element of the confidential employee rule is the
employees need to use labor relations information. Thus, in
determining whether an employee is a confidential employee, the
key question frequently considered is the employee’s necessary
access to confidential labor relations information.
The two criteria are cumulative and both must be present.
Thus, in the case of Metrolab Industries vs. Roldan Confessor, Gr.
No. 108855, feb 25, 1996, the SC ruled: Although Art. 245 limits the
ineligibility to join, form and assist any labor organization to managerial
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employees, jurisprudence has extended this prohibition to confidential
employees or those who by reason of their position 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.
The exclusion from bargaining units of employees, who in the
normal course of their duties, become aware of management policies
relating to labor relations is a principal objective sought to be
accomplished by the “confidential employee rule.” The broad rationale
behind this rule is that employees should not be placed in a position
involving a potential conflict of interests, SMC vs. Laguesma, supra.
Basis of prohibition: Doctrine of Necessary Implication- Confidential
employees, by the very nature of their function, assist and act in a
confidential capacity to or have access to confidential matters or persons
who exercise managerial functions in the field of labor relations. As such
the rationale behind the ineligibility of managerial employees to form, assist
or join a labor union equally applies to them (Philips Industrial
Development vs. NLRC, 210 SCRA 339 [1992]). This doctrine states that
what is implied in a statute is as much a part thereof as that which is
expressed (NATU-rep. Planters Bank Supervisors Chapter vs. Torres, 239
SCRA 546 [1994]).
4. Members (co-owners of a cooperative)- may form union for
their mutual aid and protection, as there is no law prohibiting
them from doing so. [criterion is fact of ownership]
BUT, the general rule is that employees of a cooperative who are
also members and co-owners thereof cannot invoke the right to self-
organization, collective bargaining and negotiation, for certainly, an
owner cannot bargain with himself or his co-owners. Nevertheless,
the rule does not apply to those employees who are not members or
co-owners of such cooperative (Benguet vs. Electric Cooperative,
Inc. vs. Ferrer-Calleja, supra)
5. Members of International Organizations- By the Doctrine of
Incorporation, they are immune from suit and cannot be
Personal Notes of Janine J. Sarausos
subject to local jurisdiction. (International Catholic Migration
Commission vs. Calleja; Kapisanan ng mga Manggagawa at
TAC sa IRRIOLALIA vs. Secretary of Labor and 153
Employment)
6. Firemen, members of AFP, PNP, and jail guards, under E.O.
111
7. Security Guards under RA 6715, may now freely join a labor
organization of the rank-and –file or that of the supervisory
union depending on their rank in recognition of their
constitutional right to self organization
8. RA 3350 was passed to exempt from such compulsory union
membership (Industrial Peace Act of 1953) mentioned
religious sect whose teachings forbid membership in labor
unions upholding the Victoriano vs. Elizzalde case.
Effect of Inclusion as Members of Employees Outside the
Bargaining Unit. - The inclusion as union members of employees outside
the bargaining unit shall not be a ground for the cancellation of the
registration of the union. Said employees are automatically deemed
removed from the list of membership of said union (ART. 245-A, as added
by RA 9481).
Non- abridgement of right to self-organizarion (Art. 246). 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. (see, ULP)
LABOR ORGANIZATION means any union or association of employees
which exists in whole or in part (thus, can have multiple purposes, and the
multiplicities of purposes does not destroy the nature of the LO) for the
purpose of (1)collective bargaining or (2)of dealing with employers
concerning terms and conditions of employment (Art. 212 [g], LC). (note:
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the emphasis of the definition is not on membership, but on purpose, thus,
LO can admit employees of other employer.)
The function of LO- an instrument for the enhancement of democracy
and the promotion of social justice.
Worker’s Association- association of workers organized for mutual aid
and protection of its members or for any legitimate purpose other than
collective bargaining.
Steps in forming labor organization:
a. Recruitment of members;
b. Organizational meeting;
c. Adoption of constitution and by-laws. Usual contents of a constitution:
a. Rights and duties of members
b. Conditions of membership
c. Dues, fines and forfeitures
Fines are disciplinary sanctions/penalties paid for infractions
committed by members against the union.
d. Qualifications, duties and functions of union officer
e. Election and term of office
f. Grounds for expulsion
g. Persons authorized to collect dues;
h. Others not contrary to law, morals and public policy
d. Election of officers in accordance with adopted constitution
e. Filing of application for registration
REGISTRATION OF LABOR ORGANIZATION
Legitimate Labor organization- refers to any labor organization in the
private sector registered or reported with the Department in accordance with
Rules III and IV of these Rules (DO 40-03)
. Q: Why is registration important?
A: registration is necessary for the Labor Organization to acquire legal
personality and to be entitled to the rights and privileges granted by law to
legitimate labor organizations upon issuance of the certificate of registration
(Art. 234, LC).
Personal Notes of Janine J. Sarausos
Q: Is this constitutional?
A: Yes, the registration prescribed is not a limitation to the right of
assembly or association, which may be exercised with or without said 153
registration. The latter is merely a condition sine qua non for the
acquisition of legal personality by labor organizations, associations or
unions and the possession of the rights and privileges granted by law to
legitimate labor organizations. The Constitution does not guarantee these
rights and privileges, much less said personality, which are mere statutory
creations, for the possession and exercise of which registration is required
to protect both labor and public against abuses, fraud or impostors who pose
as organizers, although not truly accredited agents of the union they purport
to represent. Such requirement is valid exercise of police power because the
activities in which labor organizations, associations and unions of workers
are engaged affect public interest, which should be protected (PAFLU vs.
SOLE, 27 SCRA 40).
Requirements for application (ART. 234, as amended by RA 9481).
A federation, national union or industry or trade union center or an
independent union shall acquire legal personality and shall be entitled to the
rights and privileges granted by law to legitimate labor organizations upon
issuance of the certificate of registration based on the following
requirements:
d. Fifty pesos (P50.00) registration fee;
e. The names of its officers, their addresses, the principal address of the
labor organization, the minutes of the organizational meetings and the
list of the workers who participated in such meetings;
f. In case the applicant is an independent union, the names of all its
members comprising at least twenty percent (20%) of all the employees
in the bargaining unit where it seeks to operate;
g. If the applicant union has been in existence for one or more years,
copies of its annual financial reports; and
h. Four copies of the constitution and by-laws of the applicant union,
minutes of its adoption or ratification, and the list of the members who
participated in it."
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 Personal Notes of Janine J. Sarausos

Additional requirements for federations or national unions(ART. Applications for registration of federations, national unions or workers'
237, LC). - If the applicant for registration is a federation or a national associations operating in more than one region shall be filed with the
union, it shall, in addition to the requirements of the preceding Articles, Bureau or the Regional Offices, but shall be processed by the Bureau. 153
submit the following:
(a) Proof of the affiliation of at least ten (10) locals or chapters, each of
1ST MODE OF REGISTRATION
which must be a duly recognized collective bargaining agent in the
A FEDERATION/ NATIONAL UNION TO CREATE CHARTERED
establishment or industry in which it operates, supporting the registration of
LOCAL(DO 40-F-03)
such applicant federation or national union; and
A duly-registered federation or national union may directly create a
(b) The names and addresses of the companies where the locals or
local/chapter by issuing a charter certificate indicating the establishment of
chapters operate and the list of all the members in each company involved.
the local/chapter. The local/ chapter shall acquire legal personality only for
purposes of filing a petition for certification election from the date it was
Modes of registration:
issued a charter certificate.
1. A federation/ national union to create chartered local
The local/chapter shall be entitled to all other rights and privileges of a
2. As independent union through an independent action for
legitimate labor organization only upon the submission of the following
registration; or
documents in addition to its charter certificate:
3. Through affiliation with a duly-registered or national union.
(a) The names of the local/chapter’s officers, their addresses, and the
principal office of the local/chapter; and
Federation/national union- means any LO with at least 10
(b) The chapter’s constitution and by-laws, provided that where the
locals/chapters or affiliates each of which must be duly certified or
chapter’s constitution and by-laws is the same as that of the federation or
recognized as CBA.
national union, this fact shall be indicated accordingly.
Local union/chapter- means any LO operating at the enterprise level
The genuiness and due execution of the supporting requirements shall
whose legal personality is derived through the issuance of a chapter by a
be certified under oath by the Secretary or Treasurer of the local/chapter and
duly-registered federation or national union.
attested by its President.”
"Affiliate" refers to an independent union affiliated with a federation,
Section 4. All chartered locals duly-registered prior to the effectivity
national union or a chartered local which was subsequently granted
of this amendatory issuance shall maintain their legitimate status, with all
independent registration but did not disaffiliate from its federation, reported
rights and obligations appurtenant thereto.
to the Regional Office and the Bureau.
Chartered Local” refers to a labor organization in the private sector
Chartering and Creation of a Local Chapter (ART. 234-A, as added
operating at the enterprise level that acquired legal personality through
by RA 9481). - A duly registered federation or national union may
registration with the Regional Office (as amended by DO 40-B-03).
directly create a local chapter by issuing a charter certificate indicating
the establishment of the local chapter.
Where to file. Applications for registration of independent labor
unions, chartered locals, workers' associations shall be filed with the
TWO-FOLD PROCEDURE IN CREATION A CHAPTER/ LOCAL:
Regional Office where the applicant principally operates. It shall be
The chapter shall acquire legal personality only for purposes of
processed by the Labor Relations Division at the Regional Office.
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filing a petition for certification election from the date it was issued a
charter certificate (by the National or federation union).
The chapter shall be entitled to all other rights and privileges of a
legitimate labor organization only upon the submission of the following
documents in addition to its charter certificate:
a. The names of the chapter's officers, their addresses, and the principal
office of the chapter; and
b. The chapter's constitution and by-laws: Provided, That where the
chapter's constitution and by-laws are the same as that of the federation or
the national union, this fact shall be indicated accordingly.
The additional supporting requirements shall be certified under oath by
the secretary or treasurer of the chapter and attested by its president (Art.
234-A).
Certificate of Registration/Certificate of Creation of Chartered
Local for change of name (Sec. 5, DO 40-03). - The certificate of
registration and the certificate of creation of a chartered local issued to the
labor organization for change of name shall bear the same registration
number as the original certificate issued in its favor and shall indicate the
following: (a) the new name of the labor organization; (b) its former name;
(c) its office or business address; and (d) the date when the labor
organization acquired legitimate personality as stated in its original
certificate of registration/certificate of creation of chartered local.
2ND MODE OF REGISTRATION:
INDEPENDENT ACTION FOR REGISTRATION
Requirements for application (Sec. 2):
1) the name of the applicant labor union, its principal address, the name
of its officers and their respective addresses, approximate number of
employees in the bargaining unit where it seeks to operate, with a statement
that it is not reported as a chartered local of any federation or national
union;
2) the minutes of the organizational meeting(s) and the list of
Personal Notes of Janine J. Sarausos
employees who participated in the said meeting(s);
3) the name of all its members comprising at least 20% of the
employees in the bargaining unit (Note: Art. 277 (c). Any employee, 153
whether employed for a definite period or not, shall, beginning on his first
day of service, be considered as an employee for purposes of membership in
any labor union);
4) the annual financial reports if the applicant has been in existence for
one or more years, unless it has not collected any amount from the
members, in which case a statement to this effect shall be included in the
application;
5) the applicant's constitution and by-laws, minutes of its adoption or
ratification, and the list of the members who participated in it. The list of
ratifying members shall be dispensed with where the constitution and by-
laws was ratified or adopted during the organizational meeting. In such a
case, the factual circumstances of the ratification shall be recorded in the
minutes of the organizational meeting(s).
3RD MODE OF REGISTRATION
BY AFFILIATION
The application for registration of federations and national unions shall be
accompanied by the following documents:
1) a statement indicating the name of the applicant labor union, its
principal address, the name of its officers and their respective addresses;
2) the minutes of the organizational meeting(s) and the list of
employees who participated in the said meeting(s);
3) the annual financial reports if the applicant union has been in
existence for one or more years, unless it has not collected any amount from
the members, in which case a statement to this effect shall be included in
the application;
4) the applicant union's constitution and by-laws, minutes of its
adoption or ratification, and the list of the members who participated in it.
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The list of ratifying members shall be dispensed with where the constitution
and by-laws was ratified or adopted during the organizational meeting(s). In
such a case, the factual circumstances of the ratification shall be recorded in
the minutes of the organizational meeting(s);
5) the resolution of affiliation of at least ten (10) legitimate labor
organizations, whether independent unions or chartered locals, each of
which must be a duly certified or recognized bargaining agent in the
establishment where it seeks to operate; and
6) the name and addresses of the companies where the affiliates operate
and the list of all the members in each company involved.
Labor organizations operating within an identified industry may also
apply for registration as a federation or national union within the specified
industry by submitting to the Bureau the same set of documents
Report of Affiliation with federations or national unions; Where to
file (Sec. 6, DO 40-03). - The report of affiliation of an independently
registered labor union with a federation or national union shall be filed with
the Regional Office that issued its certificate of registration.
Requirements of affiliation (Sec. 7, DO 40-03). - The report of
affiliation of independently registered labor unions with a federation or
national union shall be accompanied by the following documents:
(a) resolution of the labor union's board of directors approving the
affiliation;
(b) minutes of the general membership meeting approving the affiliation;
(c) the total number of members comprising the labor union and the names
of members who approved the affiliation;
(d) the certificate of affiliation issued by the federation in favor of the
independently registered labor union; and
(e) written notice to the employer concerned if the affiliating union is the
Personal Notes of Janine J. Sarausos
incumbent bargaining agent.
153
4TH MODE OF REGISTRATION
WORKER’S ASSOCIATION:
1) the name of the applicant association, its principal address, the name
of its officers and their respective addresses;
2) the minutes of the organizational meeting(s) and the list of members
who participated therein;
3) the financial reports of the applicant association if it has been in
existence for one or more years, unless it has not collected any amount from
the members, in which case a statement to this effect shall be included in
the application;
4) the applicant's constitution and by-laws to which must be attached
the names of ratifying members, the minutes of adoption or ratification of
the constitution and by-laws and the date when ratification was made,
unless ratification was done in the organizational meeting(s), in which case
such fact shall be reflected in the minutes of the organizational meeting(s).
Acquisition of legal personality? From the date of ISSUANCE of
certificate of registration. Such legal personality cannot thereafter be the
subject of a collateral attack, but may be questioned only in an independent
petition for cancellation.
See: Topic 19 for the rights of legitimate labor organization
MAJORITY STATUS OF A UNION
HOW ESTABLISHED
I. VOLUNTARY RECOGNITION
When and where to file. - In unorganized establishments with only
one legitimate labor organization, the employer may voluntarily recognize
the representation status of such a union. Within thirty (30) days from such
recognition, the employer and union shall submit a notice of voluntary
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recognition with the Regional Office which issued the recognized labor
union's certificate of registration or certificate of creation of a chartered
local.
Requirements for voluntary recognition. - The notice of voluntary
recognition shall be accompanied by the original copy and 2 duplicate
copies of the following documents:
(a) a joint statement under oath of voluntary recognition attesting to the
fact of voluntary recognition;
(b) certificate of posting of the joint statement of voluntary recognition
for 15 consecutive days in at least 2 conspicuous places in the establishment
or bargaining unit where the union seeks to operate;
(c) the approximate number of employees in the bargaining unit,
accompanied by the names of those who support the voluntary recognition
comprising at least a majority of the members of the bargaining unit; and
(d) a statement that the labor union is the only legitimate labor
organization operating within the bargaining unit.
All accompanying documents of the notice for voluntary recognition
shall be certified under oath by the employer representative and president of
the recognized labor union.
Action on the Notice. - Where the notice of voluntary recognition is
sufficient in form, number and substance and where there is no other
registered labor union operating within the bargaining unit concerned, the
Regional Office, through the Labor Relations Division shall, within 10 days
from receipt of the notice, record the fact of voluntary recognition in its
roster of legitimatelabor unions and notify the labor union concerned.
Where the notice of voluntary recognition is insufficient in form,
number and substance, the Regional Office shall, within the same period,
notify the labor union of its findings and advise it to comply with the
necessary requirements. Where neither the employer nor the labor union
failed to complete the requirements for voluntary recognition under Section
2 of this Rule within 30 days from receipt of the advisory, the Regional
Office shall return the notice for voluntary recognition together with all its
accompanying documents without prejudice to its re-submission.
Personal Notes of Janine J. Sarausos
Effect of recording of fact of voluntary recognition. - From the time
of recording of voluntary recognition, the recognized labor union shall 153
enjoy the rights, privileges and obligations of an existing bargaining agent
of all the employees in the bargaining unit.
Entry of voluntary recognition shall bar the filing of a petition for
certification election by any labor organization for a period of 1 year from
the date of entry of voluntary recognition (one year bar rule/ certification
rule: to ensure industrial stability). Upon expiration of this one-year
period, any legitimate labor organization may file a petition for certification
election in the same bargaining unit represented by the voluntarily
recognized union, unless a CBA between the employer and voluntarily
recognized labor union was executed and registered with the Regional
Office.
II. CONSENT ELECTION
A certification election is ordered by the Department, while a consent
election is voluntarily agreed upon by the parties, with or without the
intervention by the Department, to determine the issue of majority
representation of all the workers in the appropriate CBU.
Effects of consent election. - Where a petition for certification election
had been filed, and upon the intercession of the Med-Arbiter, the parties
agree to hold a consent election, the results thereof shall constitute a bar to
the holding of a certification election for 1 year from the holding of such
consent election. Where an appeal has been filed from the results of the
consent election, the running of the one-year period shall be suspended until
the decision on appeal has become final and executory.
Where no petition for certification election was filed but the parties
themselves agreed to hold a consent election with the intercession of the
Regional Office, the results thereof shall constitute a bar to another petition
for certification election.
III. CERTIFICATION ELECTION- the process of determining through a
secret ballot the sole and exclusive bargaining representative of the
employees in an appropriate b.u. for the purpose of collective
bargaining.
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Who may file. -Any legitimate labor organization, INCLUDING A
NATIONAL UNION OR FEDERATION THAT HAS ISSUED A
CHARTER CERTIFICATE TO ITS LOCAL/CHAPTER ITSELF, may file
a petition for certification election.
A national union or federation filing a petition in behalf of its
local/chapter shall not be required to disclose the names of the
local/chapter’s officers and members, but shall attach to the petition the
chapter certificate it issued to its local/chapter.
When requested to bargain collectively in a bargaining unit where no
registered collective bargaining agreement exisrs, an employer may file a
petition for certification election with the Regional Office.
In all cases, whether the petition for certification election is filed by an
employer or a legitimate labor organization, the employer shall not be
considered a party thereto with a concomitant right to oppose a petition for
certification election. The employer’s participation in such proceeding shall
be limited to: (1) being notified or informed of petitions of such nature; and
(2) submitting the list of employees during the pre-election conference
should the Med-Arbiter act favorably on the petition.
Any employee has the right to intervene for the protection of his
individual right (DO 40-F-03).
Where to file. - Regional Office which issued the petitioning union's
certificate of registration/certificate of creation of chartered local to be
heard and resolved by the Med-Arbiter.
Where two or more petitions involving the same bargaining unit are
filed in one Regional Office, the same shall be automatically consolidated
with the Med-Arbiter who first acquired jurisdiction. Where the petitions
are filed in different Regional Offices, the Regional Office in which the
petition was first filed shall exclude all others; in which case, the latter shall
indorse the petition to the former for consolidation.
When to file. - A petition for certification election may be filed
anytime, except:
(a) when a fact of voluntary recognition has been entered or a valid
certification, consent or run-off election has been conducted within the
Personal Notes of Janine J. Sarausos
bargaining unit within 1 year prior to the filing of the petition for
certification election. Where an appeal has been filed from the order of the
Med-Arbiter certifying the results of the election, the running of the one 153
year period shall be suspended until the decision on the appeal has become
final and executory;
(b) when the duly certified union has commenced and sustained
negotiations in good faith with the employer in accordance with Article 250
of the Labor Code within the one year period referred to in the immediately
preceding paragraph;
(c) when a bargaining deadlock to which an incumbent or certified
bargaining agent is a party had been submitted to conciliation or arbitration
or had become the subject of a valid notice of strike or lockout;
(d) when a collective bargaining agreement between the employer and
a duly recognized or certified bargaining agent has been registered in
accordance with Article 231 of the Labor Code. Where such collective
bargaining agreement is registered, the petition may be filed only within 60
days prior to its expiry.
Form and contents of petition (as amended by DO 40-F-03). - The
petition shall be in writing, verified under oath by the president of
petitioning labor organization. Where a federation or national union files a
petition in behalf of its local or affiliate, the petition shall be verified under
oath by the president or duly authorized representative of the federation or
national union. In case the employer files the petition, the owner, president
or any corporate officer, who is authorized by the Board of Directors, shall
verify the petition. The petition shall contain the following:
(a) the name of petitioner, its address, and affiliation if appropriate, the
date and number of its certificate of registration. If the petition is filed by a
federation or national union, the national president or his/her duly
authorized representative shall certify under oath as to the existence of its
local/ chapter in the establishment and attaching thereto the charter
certificate or a certified true copy thereof. If the petition is filed by a
local/chapter it shall attach its charter certificate or a certified true copy
theeof;
(b) the name, address and nature of employer's business;
(c) the description of the bargaining unit;
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(d) the approximate number of employees in the bargaining unit;
(e) the names and addresses of other legitimate labor unions in the barg
aining unit;
(f) a statement indicating any of the following circumstances:
1) that the bargaining unit is unorganized or that there is no registered
collective bargaining agreement covering the employees in the bargaining
unit;
2) if there exists a duly registered collective bargaining agreement, that
the petition is filed within the sixty-day freedom period of such agreement;
or
3) if another union had been previously recognized voluntarily or
certified in a valid certification, consent or run-off election, that the petition
is filed outside the one-year period from date of recording of such
voluntary recognition or conduct of certification or run-off election and no
appeal is pending thereon.
(g) in an organized establishment, the signature of at least twenty-five
percent (25%) of all employees in the appropriate bargaining unit shall be
attached to the petition at the time of its filing; and
(h) other relevant facts.
Representation Issue in Organized Establishments (ART. 256, as
amended by RA 9481). - In organized establishments, when a verified
petition questioning the majority status of the incumbent bargaining agent is
filed by any legitimate labor organization including a national union or
federation which has already issued a charter certificate to its local chapter
participating in the certification election or a local chapter which has been
issued a charter certificate by the national union or federation before the
DOLE within the 60-day period before the expiration of the collective
bargaining agreement, the Med-Arbiter shall automatically order an election
by secret ballot when the verified petition is supported by the written
consent of at least 25% of all the employees in the bargaining unit to
ascertain the will of the employees in the appropriate bargaining unit. To
have a valid election, at least a majority of all eligible voters in the unit
must have cast their votes. The labor union receiving the majority of the
valid votes cast shall be certified as the exclusive bargaining agent of all the
Personal Notes of Janine J. Sarausos
workers in the unit. When an election which provides for three or more
choices results in no choice receiving a majority of the valid votes cast, a
run-off election shall be conducted between the labor unions receiving the 153
two highest number of votes: Provided, That the total number of votes for
all contending unions is at least 50% of the number of votes cast. In cases
where the petition was filed by a national union or federation, it shall not be
required to disclose the names of the local chapter's officers and members.
At the expiration of the freedom period, the employer shall continue to
recognize the majority status of the incumbent bargaining agent where no
petition for certification election is filed.
Petitions in Unorganized Establishments (ART. 257, as amended by RA
9481). - In any establishment where there is no certified bargaining agent, a
certification election shall automatically be conducted by the Med-Arbiter
upon the filing of a petition by any legitimate labor organization, including
a national union or federation which has already issued a charter certificate
to its 1ocal/chapter participating in the certification election or a
local/chapter which has been issued a charter certificate by the national
union or federation. In cases where the petition was filed by a national
union or federation, it shall not be required to disclose the names of the
local chapter's officers and members.
PROCEDURE:
1 Filing of Petition
2 Raffling of the case- the Regional Director or his/her duly authorized
representative upon receipt of the petition shall immediately assign
it by raffle to a mediator-arbiter. The raffle shall be done in the
presence of the petitioner is the latter so desires (DO 40-F-03)
3 Notice of preliminary conference by the Med-Arbiter, who shall in
the same instance prepare and serve upon the petitioning party a notice
for preliminary conference. 1st prelim: within 10 days from receipt of
the petition. Med-Arbiter then, 3 working days from receipt cause the
service (personal, registered mail or by courier service) to the petitioner
and incumbent B.U. which shall be posted also in at least two
conspicuous places in the establishment. If multi-location workplaces,
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the posting shall be made in at least 2 conspicuous places in every
location (DO 40-F-03).
Forced Intervenor. - The incumbent bargaining agent shall
automatically be one of the choices in the certification election as forced
intervenor.
Motion for Intervention. - When a petition for certification election
was filed in an organized establishment, any legitimate labor union other
than the incumbent bargaining agent operating within the bargaining unit
may file a motion for intervention with the Med-Arbiter during the freedom
period of the collective bargaining agreement. The form and contents of the
motion shall be the same as that of a petition for certification election.
In an unorganized establishment, the motion shall be filed at any time
prior to the decision of the Med- Arbiter. The form and contents of the
motion shall likewise be the same as that of a petition for certification
election. The motion for intervention shall be resolved in the same decision
issued in the petition for certification election.
ART. 258-A. Employer as Bystander. - In all cases, whether the
petition for certification election is filed by an employer or a legitimate
labor organization, the employer shall not be considered a party thereto with
a concomitant right to oppose a petition for certification election. The
employer's participation in such proceedings shall be limited to:
(1) being notified or informed of petitions of such nature; and
(2) submitting the list of employees during the pre-election conference
should the Med-Arbiter act favorably on the petition.
1. Preliminary Conference; Hearing. - The Med-Arbiter shall conduct a
preliminary conference and hearing within ten (10) days from receipt of
the petition to determine the following:
(a) the bargaining unit to be represented;
(b) contending labor unions;
(c) possibility of a consent election;
(d) existence of any of the bars to certification election under Section 3
of this Rule; and
Personal Notes of Janine J. Sarausos
(e) such other matters as may be relevant for the final disposition of the
case.
The conduct thereof exceed 15 days from the date of the scheduled 153
preliminary conference/hearing, after which time the petition shall be
considered submitted for decision.
Note: The contending unions may agree to the holding of an election,
in which case it shall be called a consent election. The Mediator-Arbiter
shall forthwith call for the consent election, reflecting the parties’ agreement
and the call in the minutes of the conference.
The Mediator-Arbiter shall, immediately forward the records of the
petition to the Regional Director or his/her duly authorized representative
for the determination of the Election Officer who shall be chosen by raffle
in the presence of representatives of the contending unions if they so desire.
The first pre-election conference shall be scheduled within 10 days
from the date of the consent election agreement. Subsequent conference
may be called to expedite and facilitate the holding of the consent election.
To afford an individual employee-voter an informed choice where a
local/chapter is the petitioning union, the local/chapter shall secure its
certificate of creation at least five working days before the date of the
consent election (DO 40-F-03).
Failure to appear despite notice. - The failure of any party to appear
in the hearing(s) when notified or to file its pleadings shall be deemed a
waiver of its right to be heard. The Med-Arbiter, however, when agreed
upon by the parties for meritorious reasons may allow the cancellation of
scheduled hearing(s). The cancellation of any scheduled hearing(s) shall not
be used as a basis for extending the 15-day period within which to terminate
the same.
2. Order/Decision on the petition (as amended by DO 40-F-03). -
Within 10 days from the date of the last hearing, the Med-Arbiter shall
formal issue a ruling granting or denying the petition except in
organized establishments where the grant of the petition can only be
made after the lapse of the freedom period.
The ruling for the conduct of a certification election shall state the
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following:
(a) the name of the employer or establishment;
(b) the description of the bargaining unit;
(c) a statement that none of the grounds for dismissal enumerated in the
succeeding paragraph exists;
(d) the names of the contending labor unions which shall appear in the
following order: the petitioner unions in the order of the date of filing of
their respective petitions, forced intervenor, and “no union”;
(e) to afford an individual employee-voter an informed choice where a
local/chapter is one of the contending unions, a directive to an unregistered
local/chapter or a federation/ nations union representing an unregistered
local/chapter to personally submit to the election officer its certificate of
creation at least five working days before the actual conduct of the
certification.
Non-submission of this requirement as certified by the election officer
shall disqualify the local/chapter from participating in the certification
election; and
(f) a directive upon the employer and the contending union(s) to submit
within ten (10) days from receipt of the order, the certified list of employees
in the bargaining unit, or where necessary, the payrolls covering the
members of the bargaining unit for the last three (3) months prior to the
issuance of the order.
Grounds for denial of the petition; Grounds (as amended by DO 40-
F-03). - The Mediator-Arbiter may dismiss the petition on any of the
following grounds:
(a) the petitioning union or national union/federation is not listed in the
Department's registry of legitimate labor unions or that its legal personality
has been revoked or cancelled with finality in accordance with Rule XIV of
these Rules;
(b) failure of a local/chapter or national union/federation to submit a
duly issued charter certificate upon the filing of the petition for certification
election;
(c) filing the petition 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
Personal Notes of Janine J. Sarausos
affected by any amendment, extension or renewal of the collective
bargaining agreement;
(d) filing the petition within one (1) year from the date of recording of 153
the voluntary recognition, or within the same period from a valid
certification, consent or run-off election where no appeal on the results of
the certification, consent or run-off election is pending;
(e) where a duly certified union has commenced and sustained
negotiations with the employer in accordance with Article 250 of the Labor
Code within the one-year period referred to in Section 14.d of this Rule, or
where there exists a bargaining deadlock which has been submitted to
conciliation or arbitration or has become the subject of a valid notice of
strike or lockout where an incumbent or certified bargaining agent is a
party;
(f) in an organized establishment, the failure to submit the twenty-five
percent (25%) signature requirement to support the filing of the petition
for certification election.
(g) Non-appearance of the petitioner for two (2) consecutive scheduled
conferences before the mediator-arbiter despite due notice; and
(h) absence of employer-employee relationship between all the
members of the petitioning union and the establishment where the propose
bargaining unit is sought to be represented.
Prohibited grounds for the denial/suspension of the petition (as
amended by DO 40-F-03). – The inclusion as union members of employees
outside the bargaining unit shall not be a ground for the cancellation of the
registration of the union. Said employees are automatically deemed
removed from the list of membership of said unions.
Ancillary issues (as amended and renumbered as sec. 16 of Rule VIII).
All issues pertaining to the existence of employer-employee relationship
raised before the Mediator-Arbiter during the hearing(s) and in the
pleadings shall be resolved in the same order or decision granting or
denying the petition for certification election.
All issues pertaining to the validity of petitioning union's certificate of
registration or its legal personality as a labor organization, validity of
registration and execution of collective bargaining agreements shall be
heard and resolved by the Regional Director in an independent petition for
cancellation of its registration and not by the Mediator-Arbiter in the
petition for certification election, unless the petitioning union is not listed in
the Department's roster of legitimate labor organizations, or an existing
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collective bargaining agreement is not registered with the Department.
3. Appeal. –
a) The order granting the conduct of a certification election in an
unorganized establishment shall not be subject to appeal. Any issue arising
therefrom may be raised by means of protest on the conduct and results of
the certification election.
b) The order granting the conduct of a certification election in an
organized establishment and the decision dismissing or denying the petition,
whether in an organized or unorganized establishment, may be appealed to
the Office of the Secretary within ten (10) days from receipt thereof. The
appeal shall be verified under oath and shall consist of a memorandum of
appeal, specifically stating the grounds relied upon by the appellant with the
supporting arguments and evidence.
Where to file appeal. - The memorandum of appeal shall be filed in
the Regional Office where the petition originated, copy furnished the
contending unions and the employer, as the case may be. Within twenty-
four (24) hours from receipt of the appeal, the Regional Director shall cause
the transmittal thereof together with the entire records of the case to the
Office of the Secretary.
Period to Reply. - A reply to the appeal may be filed by any party to
the petition within 10 days from receipt of the memorandum of appeal. The
reply shall be filed directly with the Office of the Secretary.
Decision of the Secretary. - The Secretary shall have 15 days from
receipt of the entire records of the petition within which to decide the
appeal. The filing of the memorandum of appeal from the order or decision
of the Med-Arbiter stays the holding of any certification election. The
decision of the Secretary shall become final and executory after 10 days
from receipt thereof by the parties. No motion for reconsideration of the
decision shall be entertained.
Effects of early agreements. - The representation case shall not be
adversely affected by a collective bargaining agreement registered before or
during the last 60 days of a subsisting agreement or during the pendency of
the representation case.
CONDUCT OF CERTIFICATION ELECTION
1.) Raffle of the case. - Within twenty-four (24) hours from receipt of
the notice of entry of final judgment granting the conduct of a certification
election, RD shall cause the raffle of the case to an Election Officer who
Personal Notes of Janine J. Sarausos
shall have control of the pre-election conference and election proceedings.
2.) Pre-election conference (as amended by DO 40-F-03). – W/n 24
hours from receipt of the assignment for the conduct of a certification 153
election, the Election Officer shall cause the issuance of notice of pre-
election conference upon the contending unions, which shall be scheduled
w/n 10 calendar days from receipt of the assignment. The employer shall be
required to submit the certified list of employees in the bargaining unit, or
where necessary, the payrolls covering the members of the bargaining unit
at the time of the filing of the petition.
The pre-election conference shall set the mechanics for the election and
shall determine, among others, the following:
(a) date, time and place of the election, which shall not be later than 45
days from the date of the first pre-election conference, and shall be on a
regular working day and within the employer's premises, unless
circumstances require otherwise;
(b) list of eligible and challenged voters;
(c) number and location of polling places or booths and the number of
ballots to be prepared with appropriate translations, if necessary;
(d) name of watchers or representatives and their alternates for each of
the parties during election;
(e) mechanics and guidelines of the election.
The pre-election conference shall be completed within 30 days from the
date of the first hearing.
Waiver of right to be heard (as amended by DO 40-F-03). - Failure of any
party to appear during the pre-election conference despite notice shall be
considered as a waiver of its right to be present and to question or object to
any of the agreements reached in the pre-election conference. However, this
shall not deprive the non-appearing party of the right to be furnished notices
of and to attend subsequent pre-election conferences.
Qualification of voters; inclusion-exclusion. - All employees who are
members of the appropriate bargaining unit sought to be represented by the
petitioner at the time of the issuance of the order granting the conduct of a
certification election shall be eligible to vote. An employee who has been
dismissed from work but has contested the legality of the dismissal in a
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forum of appropriate jurisdiction at the time of the issuance of the order for
the conduct of a certification election shall be considered a qualified voter,
unless his/her dismissal was declared valid in a final judgment at the time of
the conduct of the certification election.
In case of disagreement over the voters' list or over the eligibility of
voters, all contested voters shall be allowed to vote. But their votes shall be
segregated and sealed in individual envelopes in accordance with Sections
10 and 11 of this Rule. (note: the election officer has no jurisdiction to
rule on the exclusion and exclusion of the voter/ candidate, only the
MID-ARBITER can).
3.) Posting of Notices of election. – at least 10 days before the actual
date of the election in 2 most conspicuous places in the company premises.
The posting of the notice of election, the information required to be
included therein and the duration of posting cannot be waived by the
contending unions or the employer.
4.) Preparation of ballots observing secrecy and confidentiality
and the marking of votes (as amended by DO 40-F-03). The Election
Officer shall prepare the ballots in English and Filipino or the local dialect,
the number of ballots should correspond to the number of voters in the
bargaining unit plus reasonable number of extra ballots for contingencies.
All ballots shall be signed at the back by the Election Officer and an
authorized representative each of the contending unions. A party who
refuses or fails to sign the ballots waives its right to do so and the Election
Officer shall enter the fact of refusal or failure and the reason therefor in the
records of the case.
Challenging of votes. - An authorized representative of any of the
contending unions and employer may challenge a vote before it is deposited
in the ballot box only on any of the following grounds:
(a) that there is no employer-employee relationship between the voter
and the company;
(b) that the voter is not a member of the appropriate bargaining unit
which petitioner seeks to represent.
Procedure in the challenge of votes. – The ballot of the voter who has
been properly challenged during the pre-election conference, shall be placed
in an envelope which shall be sealed by the Election Officer in the presence
of the voter and the representatives of the contending unions. The Election
Officer shall indicate on the envelope the voter's name, the union
Personal Notes of Janine J. Sarausos
challenging the voter, and the ground for the challenge. The sealed envelope
shall then be signed by the Election Officer and the representatives of the
contending unions. The Election Officer shall note all challenges in the 153
minutes of the election and shall be responsible for consolidating all
envelopes containing the challenged votes. The envelopes shall be opened
and the question of eligibility shall be passed by the Mediator-Arbiter only
if the number of segregated voters will materially alter the results of the
election.
On-the-spot questions. - The Election Officer shall rule on any
question relating to and raised during the conduct of the election. In no
case, however, shall the election officer rule on any of the grounds for
challenge specified in the immediately preceding section.
Protest; when perfected. - Any party-in-interest may file a protest based on
the conduct or mechanics of the election. Such protests shall be recorded in
the minutes of the election proceedings. Protests not so raised are deemed
waived.
The protesting party must formalize its protest with the Med-Arbiter,
with specific grounds, arguments and evidence, within 5 days after the close
of the election proceedings. If not recorded in the minutes and formalized
within the prescribed period, the protest shall be deemed dropped.
1. Canvassing of votes. - The votes shall be counted and tabulated by
the Election Officer in the presence of the representatives of the contending
unions. Upon completion of the canvass, the Election Officer shall give
each representative a copy of the minutes of the election proceedings and
results of the election. Failure of any party or his/her/their representative to
appear during the election proceedings and canvass of votes shall be
considered a waiver of the right to be present and to question the conduct
thereof.
2. Certification of Collective Bargaining Agent. - The union which
obtained a majority of the valid votes cast shall be certified as the sole and
exclusive bargaining agent of all the employees in the appropriate
bargaining unit within 5 days from the day of the election, provided no
protest is recorded in the minutes of the election.
Double-majority rule:
a valid election: a majority of all eligible voters in the unit must have
casyed there votes
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a valid certified LO: majority of the valid votes
Failure of election. - Where the number of votes cast in a certification or
consent election is less than the majority of the number of eligible voters
and there are no material challenged votes, the Election Officer shall
declare a failure of election in the minutes of the election proceedings.
Effect of failure of election. - A failure of election shall not bar the
filing of a motion for the immediate holding of another certification or
consent election within 6 months from date of declaration of failure of
election.
Action on the motion. – Within 24 hours from receipt of the motion,
the Election Officer shall immediately schedule the conduct of another
certification or consent election within 15 days from receipt of the motion
and cause the posting of the notice of certification election at least 10 days
prior to the scheduled date of election in 2 most conspicuous places in the
establishment. The same guidelines and list of voters shall be used in the
election.
4. Proclamation and certification of the result of the election. -
Within 24 hours from final canvass of votes, there being a valid election, the
Election Officer shall transmit the records of the case to the Med-Arbiter
who shall, within the same period from receipt of the minutes and results of
election, issue an order proclaiming the results of the election and certifying
the union which obtained a majority of the valid votes cast as the sole and
exclusive bargaining agent in the subject bargaining unit, under any of the
following conditions:
(a) no protest was filed or, even if one was filed, the same was not
perfected within the five-day period for perfection of the protest;
(b) no challenge or eligibility issue was raised or, even if one was
raised, the resolution of the same will not materially change the results of
the elections.
The winning union shall have the rights, privileges and obligations of a
duly certified collective bargaining agent from the time the certification is
issued.
Where majority of the valid votes cast results in "No Union" obtaining
the majority, the Med-Arbiter shall declare such fact in the order.
RUN-OFF ELECTIONS
When proper. - When an election which provides for 3 or more choices
results in none of the contending unions receiving a majority of the valid
Personal Notes of Janine J. Sarausos
votes cast (majority of the eligible voters casted), and there are no
objections or challenges which if sustained can materially alter the results,
the Election Officer shall motu propio conduct a run-off election within ten 153
(10) days from the close of the election proceedings between the labor
unions receiving the two highest number of votes; provided, that the total
number of votes for all contending unions is at least fifty (50%) percent of
the number of votes cast. "No Union" shall not be a choice in the run-off
election. Notice of run-off elections shall be posted by the Election Officer
at least 5 days before the actual date of run-off election.
Qualification of voters. - The same voters' list used in the certification
election shall be used in the run-off election. The ballots in the run-off
election shall provide as choices the unions receiving the highest and
second highest number of the votes cast. The labor union receiving the
greater number of valid votes cast shall be certified as the winner.
BARS TO CERTIFICATION ELECTION:
1.) CONTRACT BAR RULE- if there id a registered CBA,
certification election will not be allowed except during the 60 days prior to
the expiry thereof (“freedom period”).
2.) CERTIFICATION BAR RULE- within one year from valid CE,
run-off or consent election, no CE may be allowed. Where an appeal has
been filed on the order of the Mid-Arbiter certifying the result of the
election, the running of the one year period shall be suspended until the
decision on the appeal shall have become final and executor.
CANCELLATION OF REGISTRATION (considered an inter or intra-
union dispute)
Where to file (as amended by DO 40-F-03). – Subject to the
requirements of notice and due process,
Regional Director- for cancellation of:
Independent labor union
Local/Chapter
Worker’s association
How? Upon the filing of a petition for cancellation of union
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registration, or application by the organization itself for voluntary
dissolution. The petition for cancellation or application for voluntary
dissolution shall be filed in the Regional Office which issued its certificate
of registration or creation.
Bureau Director- for cancellation of:
Federations
National or industry unions
Trade union centers
How? BD may cancel the registration upon the filing of a petition
for cancellation or application for voluntary dissolution in the Bureau of
Labor Relations.
Who may file:
Members of the labor organization concerned –for actions involving
violation of article 241
Any party in interest- all other grounds
Jurisdiction: Bureau, after due hearing (Art. 238)
Grounds (as amended by DO 40-F-03): ANY OF the following may
constitute as ground/s for cancellation of registration of labor organization:
a) 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;
b) Misrepresentation, false statements or fraud in connection with the
election of officers, minutes of the election of officers, and the list of voters;
c) Voluntary dissolution by the members."
Voluntary cancellation of registration: how made. A legitimate labor
organization may cancel its registration provided at least two thirds (2/3) of
its general membership votes to dissolve the organization in a meeting duly
called for that purpose and an application to cancel its registration is
thereafter submitted by the Board of the Organization to the
Regional/Bureau Director, as the case may be. The application shall be
attested to by the President of the organization (DO 40-F-03). (see also:
ART. 239-A, as added by RA 9481).
Personal Notes of Janine J. Sarausos
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 153
petition for certification election.
In case of cancellation, nothing herein shall restrict the right of the
union to seek just and equitable remedies in the appropriate courts."
Action on the petition (as amended by DO 40-F-03). - The
petition/application shall be acted upon by the Regional/Bureau Director, as
the case may be. In a case of a petition fro cancellation of registration, the
formal requirements, processes and periods of disposition stated in Rule XI
shall be followed in the determination of the merits of the petition.
Prohibited grounds for cancellation of registration (as added by D) 40-F-
03). The inclusion as union members of employees who are outside the
bargaining unit shall not be a ground to cancel the union registration. The
ineligible employees are automatically deemed removed from the list of
membership of the union.
The affiliation of the rank-and-file and supervisory unions operation
within the same establishment to the same federation or national union shall
not be a ground to cancel the registration of either union.
Procedure:
The Labor Relations Division of the Regional Office shall make a
report of the labor organization's non-compliance and submit the same to
the Bureau for verification with its records.
The Bureau shall send by registered mail with return card to the labor
organization concerned, a notice for compliance indicating the documents it
failed to submit and the corresponding period in which they were required,
with notice to comply with the said reportorial requirements and to submit
proof thereof to the Bureau within 10 days from receipt thereof.
Where no response is received by the Bureau within thirty (30) days
from the release of the first notice, another notice for compliance shall be
made by the Bureau, with warning that failure on its part to comply with the
reportorial requirements within the time specified shall cause the
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continuation of the proceedings for the administrative cancellation of its
registration.
Publication of notice of cancellation of registration .
Where no response is again received by the Bureau within 30 days
from release of the second notice, the Bureau shall cause the publication of
the notice of cancellation of registration of the labor organization in 2
newspapers of general circulation. The Bureau may conduct an
investigation within the employer's premises and at the labor organization's
last known address to verify the latter's existence.
Cancellation of registration. –
Where no response is received by the Bureau within 30 days from date
of publication, or where the Bureau has verified the dissolution of the labor
organization, it shall order the cancellation of registration of the labor
organization and cause its de-listing from the roster of legitimate labor
organizations.
Conditions for administrative cancellation of certificate of registration.
No registration of labor organization shall be cancelled administratively by
the Bureau due to non-compliance with the reportorial requirements unless:
(a) non-compliance is for a continuous period of 5 years;
(b) the procedures laid down in this Rule were complied with; and
(c) the labor organization concerned has not responded to any of the notices
sent by the Bureau, or its notices were returned unclaimed.
Note:
Effect of cancellation shall operate to divest the local/chapter of their
status as legitimate labor organization. It shall divest the local chapter of its
legal personality. As distinguish from Effect of a Petition for
Cancellation of Registration shall not suspend the proceedings for
certification election nor shall it prevent the filing of a petition for
certification election. While, in case of cancellation, nothing herein shall
restrict the right of the union to seek just and equitable remedies in the
appropriate courts (Art. 238-A, RA 9481).
Personal Notes of Janine J. Sarausos
TOPIC 18. THEBUREAU OF LABOR RELATIONS 153
MED-ARBITER refers to the officer of the DOLE Regional office or the
Bureau of Labor relations officer authorized to hear and decide
representation cases, inter/intra-union disputes and other related labor
disputes except cancellation of registration dues.
1.) All inter-union conflicts (definition from DO 40-03)- refers to any
conflict between and among legitimate labor unions involving
representation questions for purposes of collective bargaining or to any
other conflict or dispute between legitimate labor unions.
2.) intra-union conflicts- refers to any conflict between and among union
members, including grievances arising from any violation of the rights and
conditions of membership, violation of or disagreement over any provision
of the union's constitution and by-laws, or disputes arising from chartering
or affiliation of union.
3.) all disputes arising from or affecting labor-management relations in all
workplaces, whether agricultural or non-agricultural, except those arising
from the implementation or interpretation of collective bargaining
agreements which shall be the subject of grievance procedure and/or
voluntary arbitration.
BLR shall have 15 working days to act on labor cases before it, subject
to extension by agreement of the parties.
Related labor relations dispute- It shall be filed with the BLR but
where there is a grievance procedure in the CBA, involving its
implementation or interpretation, the voluntary arbitrator is the one
authorized. It includes cancellation of registration of a LLO.
Note:
If the issue involves conflict between the labor union and the employer,
or any individual, entity or group that is not a labor organization of workers,
the BLR is bereft of any authority to hear the same.
b. ADMINISTRATIVE (DO 40-F-03):
Shall be the national registry of labor organizations and CBA. As such
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it shall:
1.) Maintain a national registry;
2.) Within the month of march following the end of the calendar year,
publish in the DOLE website the list of labor organizations and federations
which have complied with the reportorial requirements of Rule V and
delinquent labor organizations;
3.) Publish a list of officers of labor organizations with criminal
conviction by final judgment; and
4.) Verify the existence of a registered labor organization with no
registered CBA and which has not been complying with the reportorial
requirements for at least five years. (the RO shall make a report of non-
compliance to be submitted to the BLR for verification. The BLR shall send
by registered mail notice of compliance. Reply within 10 days from receipt.
If no response w/in 30 days from the service of the first notice, BLR to send
another notice of compliance with warning that failure to comply with
reportorial requirement shall cause its publication as a non-existing labor
organization in the DOLE website. 30 days from service of the second
notice, cause to publish in website. 30 days from the date of publication, or
where the Bureau has verified the dissolution of the labor organization, it
shall delist the LO from the roaster if LLO).
Under EO 126, the conciliation, mediation and voluntary arbitration
functions of the BLR have been absorbed by the NCMB. NCMB is the
body created by EO 126, effective January 30, 1987, which absorbed the
conciliation, mediation and voluntary arbitration functions of the BLR.
RULE XI- DO40-03, as amended by DO 40-F-03
INTER/INTRA-UNION DISPUTES AND OTHER RELATED
LABOR RELATIONS DISPUTES
Section 1. Coverage. –
A. Inter/intra-union disputes shall include:
(a) conduct or nullification of election of officers of unions and workers'
association;
(b) audit/accounts examination of union or workers' association funds;
Personal Notes of Janine J. Sarausos
(c) deregistration of collective bargaining agreements;
(d) validity/invalidity of union affiliation or disaffiliation;
(e) validity/invalidity of acceptance/non-acceptance for union membership; 153
(f) validity/invalidity of voluntary recognition;
(g) opposition to application for union or CBA registration;
(h) violations of or disagreements over any provision of the Constitution
and By-laws of a union or workers' association;
(i) disagreements over chartering or registration of labor organizations or
the registration of collective bargaining agreements;
(j) violations of the rights and conditions of membership in a union or
workers' association;
(k) violations of the rights of legitimate labor organizations, except
interpretation of collective bargaining agreements;
(l) validity/invalidity of impeachment/ expulsion/ suspension or any
disciplinary action against any officer and member, including those arising
from non-compliance with the reportorial requirements under Rule V
(m) such other disputes or conflicts involving the rights to self-organization,
union membership and collective bargaining -
(1) between and among legitimate labor organizations; and
(2) between and among members of a union or workers' association.
B. Other labor relations disputes, not otherwise covered by Art. 217 of the
Labor Code, shall include:
a. any conflict between:
1. a labor union and the employer, or
2. a labor union and a group that is not a labor organization; or
3. a labor union and an individual who is not a member of such union;
b. cancellation of registration of unions and workers associations filed by
individual/s other than its members, or group that is not a labor
organization; and
c. a petition for interpleader involving labor relations.
Section 2. Effects of the filing/pendency of inter/intra-union and other
related labor relations disputes. - The rights, relationships and obligations
of the parties litigants against each other and other parties-in-interest prior
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to the institution of the petition shall continue to remain during the
pendency of the petition and until the date of finality of the decision
rendered therein. Thereafter, the rights, relationships and obligations of the
parties litigants against each other and other parties-in-interest shall be
governed by the decision so ordered.
The filing or pendency of any inter/intra-union dispute and other
related labor relations dispute is not a prejudicial question to any petition
for certification election and shall not be a ground for the dismissal of a
petition for certification election or suspension of proceedings for
certification election.
Section 3. Who may file. - Any legitimate labor organization or member(s)
thereof specially concerned may file a complaint or petition involving
disputes or issues enumerated in Section 1 hereof. Any party-in-interest may
file a complaint or petition involving disputes or issues enumerated in
Section 2 hereof.
Where the issue involves the entire membership of the labor
organization, the complaint or petition shall be supported by at least thirty
percent (30%) of its members.
Section 4. Where to file. - Complaints or petitions involving labor unions
with independent registrations, chartered locals, workers' associations, its
officers or members shall be filed with the Regional Office that issued its
certificate of registration or certificate of creation of chartered local.
Complaints involving federations, national unions, industry unions, its
officers or member organizations shall be filed with the Bureau.
(see: diagram on topic: registration)
Petitions for cancellation of registration of labor unions with
independent registration, chartered locals and workers association and
petitions for deregistration of collective bargaining agreements shall be
resolved by the Regional Director. He/She may appoint a Hearing Officer
from the Labor Relations Division.
Other inter/intra-union disputes and related labor relations disputes
shall be heard and resolved by the Med-Arbiter in the Regional Office.
Complaints or petitions involving federations, national or industry
Personal Notes of Janine J. Sarausos
unions, trade union centers and their chartered locals, affiliates or member
organizations shall be filed either with the Regional Office or the Bureau.
The complaint or petition shall be heard and resolved by the Bureau. 153
When two or more petitions involving the same parties and the same
causes of action are filed, the same shall be automatically consolidated.
Section 5. Formal requirements of the complaint or petition. - The
complaint or petition shall be in
writing, verified under oath and shall, among others, contain the following:
(a) name, address and other personal circumstances of the complainant(s) or
petitioner(s);
(b) name, address and other personal circumstances of the respondent(s) or
person(s) charged;
(c) nature of the complaint or petition;
(d) facts and circumstances surrounding the complaint or petition;
(e) cause(s) of action or specific violation(s) committed;
(f) a statement that the administrative remedies provided for in the
constitution and by-laws have been exhausted or such remedies are not
readily available to the complainant(s) or petitioner(s) through no fault of
his/her/their own, or compliance with such administrative remedies does not
apply to complainant(s) or petitioner(s);
(g) relief(s) prayed for;
(h) certificate of non-forum shopping; and
(i) other relevant matters.
Section 6. Raffle of the case. -Upon the filing of the complaint or petition,
the Regional Director or any of his/her authorized representative in the
Regional Office and the Docket Section of the Bureau shall allow the party
filing the complaint or petition to determine the Med-Arbiter or Hearing
Officer assigned to the case by means of a raffle. Where there is only one
Med-Arbiter or Hearing Officer in the region, the raffle shall be dispensed
with and the complaint or petition shall be assigned to him/her.
Section 7. Notice of preliminary conference. - Immediately after the raffle
of the case or receipt of the complaint or petition, the same shall be
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transmitted to the Med-Arbiter or Hearing Officer, as the case may be, who
shall in the same instance prepare the notice for preliminary conference and
cause the service thereof upon the party filing the petition. The preliminary
conference shall be scheduled within ten (10) days from receipt of the
complaint or petition.
Within three (3) days from receipt of the complaint or petition, the
Med-Arbiter or Hearing Officer, as the case may be, shall cause the service
of summons upon the respondent(s) named therein, directing him/her to file
his/her answer/comment on the complaint or petition on or before the
scheduled preliminary conference and to appear before the Med-Arbiter or
Hearing Officer on the scheduled preliminary conference.
Section 8. Conduct of preliminary conference. - The Med-Arbiter or
Hearing Officer, as the case may be, shall conduct a preliminary conference
and hearing within ten (10) days from receipt of the complaint or petition.
He/She shall exert every effort to effect an amicable settlement of the
dispute.
Where the parties agree to settle amicably, their agreements shall be
specified in the minutes of the conference and a decision based on
compromise shall be issued by the Med-Arbiter or the Regional Director, as
the case may be, within five (5) days from the date of the mandatory
conference.
Where no amicable settlement is reached, the Med-Arbiter or Hearing
Officer, as the case may be, shall proceed with the stipulation of facts,
limitation or definition of the issues, clarificatory questioning and
submission of laws and jurisprudence relied upon in support of each other's
claims and defenses.
Section 9. Conduct of Hearing(s). - The Med-Arbiter or Hearing Officer,
as the case may be, shall determine whether to call further hearing(s) on the
complaint or petition.
Where the Med-Arbiter or Hearing Officer, as the case may be, decides
to conduct further hearing(s), he/she shall require the parties to submit the
affidavits of their witnesses and such documentary evidence material to
prove each other's claims and defenses. The hearing(s) shall be limited to
Personal Notes of Janine J. Sarausos
clarificatory questions by the Med-Arbiter or Hearing Officer and must be
completed within 25 days from the date of preliminary conference.
The complaint or petition shall be considered submitted for decision 153
after the date of the last hearing or upon expiration of 25 days from date of
preliminary conference, whichever comes first.
Section 10. Affirmation of testimonial evidence. - Any affidavit submitted
by a party to prove his/her claims or defenses shall be re-affirmed by the
presentation of the affiant before the Med-Arbiter or Hearing Officer, as the
case may be. Any affidavit submitted without the re-affirmation of the
affiant during a scheduled hearing shall not be admitted in evidence, except
when the party against whom the affidavit is being offered admits all
allegations therein and waives the examination of the affiant.
Section 11. Filing of pleadings. - The parties may file his/her pleadings,
including their respective position papers, within the 25 day period
prescribed for the conduct of hearing(s). No other pleading shall be
considered or entertained after the case is considered submitted for decision.
Section 12. Hearing and resolution of the complaint or petition in the
Bureau. - The Bureau shall observe the same process and have the same
period within which to hear and resolve the complaints or petitions filed
before it.
Section 13. Decision. - The Bureau and the Med-Arbiter or Regional
Director, as the case may be, shall have 20 days from the date of the last
hearing within which to decide the complaint or petition. The decision shall
state the facts, findings, conclusion, and reliefs granted.
Section 14. Release of Decision. - The notice of decision shall be signed by
the Records Officer in the Bureau and by the Med-Arbiter or Hearing
Officer in the Regional Office. Within 20 days from date of last hearing, the
decision shall be released to the parties personally on a date and time agreed
upon during the last hearing.
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Section 15. Appeal. - The decision of the Med-Arbiter and Regional
Director may be appealed to the Bureau by any of the parties within 10 days
from receipt thereof, copy furnished the opposing party. The decision of the
Bureau Director in the exercise of his/her original jurisdiction may be
appealed to the Office of the Secretary by any party within the same period,
copy furnished the opposing party.
The appeal shall be verified under oath and shall consist of a
memorandum of appeal specifically stating the grounds relied upon by the
appellant, with supporting arguments and evidence.
Section 16. Where to file appeal. - The memorandum of appeal shall be
filed in the Regional Office or Bureau where the complaint or petition
originated. Within 24 hours from receipt of the memorandum of appeal, the
Bureau or Regional Director shall cause the transmittal thereof together
with the entire records of the case to the Office of the Secretary or the
Bureau, as the case may be.
Section 17. Finality of Decision. - Where no appeal is filed within the ten-
day period, the Bureau and Regional Director or Med-Arbiter, as the case
may be, shall enter the finality of the decision in the records of the case and
cause the immediate implementation thereof.
Section 18. Period to reply. - A reply to the appeal may be filed by any
party to the complaint or petition within 10 days from receipt of the
memorandum of appeal. The reply shall be filed directly with the Bureau or
the Office of the Secretary, as the case may be.
Section 19. Decision of the Bureau/Office of the Secretary. - The Bureau
Director or the Secretary, as the case may be, shall have 20 days from
receipt of the entire records of the case within which to decide the appeal.
The filing of the memorandum of appeal from the decision of the Med-
Arbiter or Regional Director and Bureau Director stays the implementation
of the assailed decision.
The Bureau or Office of the Secretary may call the parties to a
clarificatory hearing in aid of its appellate jurisdiction.
Personal Notes of Janine J. Sarausos
Section 20. Finality of Decision of Bureau/Office of the Secretary. - The
decision of the Bureau or the Office of the Secretary shall become final and 153
executory after ten (10) days from receipt thereof by the parties, unless a
motion for its reconsideration is filed by any party therein within the same
period.
Only one (1) motion for reconsideration of the decision of the Bureau
or the Office of the Secretary in the exercise of their appellate jurisdiction
shall be allowed.
Section 21. Execution of decision. - The decision of the Med-Arbiter and
Regional Director shall automatically be stayed pending appeal with the
Bureau. The decision of the Bureau in the exercise of its appellate
jurisdiction shall be immediately executory upon issuance of entry of final
judgment.
The decision of the Bureau in the exercise of its original jurisdiction
shall automatically be stayed pending appeal with the Office of the
Secretary. The decision of the Office of the Secretary shall be immediately
executory upon issuance of entry of final judgment.
Section 22. Transmittal of records to the Regional Office/Bureau. -
Within 48 hours from notice of receipt of decision by the parties and finality
of the decision, the entire records of the case shall be remanded to the
Bureau or Regional Office of origin for implementation. The
implementation of the decision shall not be stayed unless restrained by the
appropriate court.
TOPIC 19: RIGHTS OF LEGITIMATE LABOR ORGANIZATION
1. Autonomy and governance of its affairs, particularly: to draw up their
Constitution; freely elect their representatives; to organize their activities
and formulate programs; dissolve or suspend the organization; and right to
protection from unfair labor practice.
2. Right of representation
3. Right to information- upon written request, to be furnished by the
employer with its annual audited financial statements within 30 calendar
days from date of receipt or within 60 calendar days before the expiration of
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the existing CBA, or during the CBA negotiation.
4. Property rights- to own property for the benefit of the labor
organization and its members; to sue and be sued.
5. Exemption from taxes.
Duty (see: ART. 242-A and DO 40-F-03):
Reporting Requirements. – it shall be the duty of every legitimate labor
union and workers’ association to submit to the Regional Office or the
Bureau which issued its certificate of registration or certificate of creation
of local/chapter, as the case may be, two (2) copies of the following
documents:
a) Its constitution and by-laws, or amendments thereto, the minutes of
adoption or ratification, and the list of members who took part therein,
within thirty (30) days from adoption or ratification;
b) Its list of elected and appointed officers and agents entrusted with
the handling of union funds, the minutes of election of officers, and list of
voters, within thirty (30) days from election or appointment;
c) Its annual financial report within thirty (30) days after the close of
every fiscal year; and
d) Its list of members at least once a year or whenever required by the
Bureau.
The fiscal year of a labor Organization shall coincide with the calendar
year unless a different period is provided in its Constitution and By-laws
(DO-F-03)
Failure to comply with the above requirements shall not be a ground
for cancellation of union registration but shall subject the erring officers or
members to suspension, expulsion from membership, or any appropriate
penalty (Art. 242-A).
RIGHTS OF MEMBERS AND CONDITIONS OF MEMBERSHIP
The relationship between union and its members is fiduciary in nature.
The union may be considered as the agent of its members for the purpose of
securing for them fair and just wages and good working conditions (Heirs
of Teodolo M. Cruz vs. CIR, 30 SCRA 917).
Rights of union members:
Personal Notes of Janine J. Sarausos
1. Political right- member’s right to vote and be voted for, subject to
lawful provisions on qualification (good standing) and disqualification
(conviction of moral turpitude, not an employee and reasonable requirement 153
not designed to undermine right to self-organization), by secret ballot at
intervals of five (5) years.
Only members of the union can take part in the election of union
officers. The question of eligibility to vote may be determined through the
use of the appropriate payroll period and employee’s status during the
applicable payroll period--- the payroll of the month next preceding the
labor dispute in case of regular employees and the payroll period at or near
the peak of operations in case of employees in seasonal industries.
If none of the contending unions insisted on the use of payroll-list as
voting list, the act of nonunion employees of joining t election by casting
their votes is a clear manifestation of their intention to join a union. They
must therefore be considered ipso facto union members. Said employees
having exercised their right to unionism, by joining one of the unions, their
decision is paramount.
Submission of the employee’s name with the BLR as qualified
members is not a condition sine qua non to enable said members to vote in
the election of union officers (Tancinco vs. Pura Ferrer-Calleja, January 20,
1988)
After the election of union officers, they may not be expelled from the
union or as officers for past malfeasance, because to do so would nullify the
choice of the union members (KMP vs, Trajano, 134 SCRA 236)
2. Right to information- member’s right to be informed about the
organization’s Constitution and by-laws and CBA and about labor laws.
3. Deliberative and decision-making right- the right to participate in
deliberations on major policy questions and decide them by secret ballot.
4. Rights over money matters- the member’s right against excessive fees,
the right against unauthorized disbursement or collection of contributions,
the right to require adequate records of income and expenses and the right
of access to financial records; the right to vote an officer’s compensation;
the right to vote on proposed special assessments and be deducted a special
assessment only with the member’s written authorization.
Duty: payment of union dues, as allowed in Art. 248 (e)(applies to both
union and non union members). Members of a legitimate labor organization
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has the duty to contribute funds but subject to the caveat of excessive fees,
fines or forfeitures.
Union dues – regular mandatory contribution to union funds
Fines and Forfeitures – disciplinary measures imposed by the union to
erring members
CHECK-OFF is a method of deducting from an employee’s pay at
prescribed period, the amounts due the union for fees, fines and
assessments.
Q: is this not an illegal deduction of employee’s wage?
A: No. Statutory basis: art. 113 (b) of LC: For union dues, in cases where
the right of the worker or his union to check-off has been recognized by the
employer or authorized in writing by the individual worker concerned;
Other than for mandatory activities under the LC, no special
assessment, attorney’s fees, negotiation fees, or any other extraordinary fees
may be checked off unless there is an individual written authorization duly
signed by the employee. The authorization should specify state the amount,
purpose, and beneficiary of the deduction.
A mandatory activity is a judicial process of settling disputes laid down
by law. An amicable settlement entered into by the management and the
union is not a mandatory activity under the Code.
Compulsory arbitration is not mandatory activity under the Labor Code
which dispenses with individual written authorizations for check-offs.
Therefore, individual written authorizations are needed to deduct from
members’ salary the attorney’s fees for concluding CBA through
compulsory arbitration.
Q: When can a union have the right to check-off?
A: 1. When the right is recognized by the employer or contained in the
CBA. Here, individual written authorization of employee is not necessary;
or
5. When there are individual written authorizations from employees
Rule: When the union and employer agree, the attitude of the
employees is immaterial. When the employees duly recognized the
check-off in writing, the employer’s consent is unnecessary and the
recognition of the right is obligatory.
6. Mandatory activities
Personal Notes of Janine J. Sarausos
Requisites for valid exaction of special assessment:
1. Must be authorized by a written resolution of a majority of all the 153
members;
2. At a general membership meeting duly called for the purpose
Q: may special assessment be checked off?
A: Yes, as long as there is a written authorization duly signed by the
employee (Art. 241 (o), LC).
COLLECTIVE BARGAINING is the process of negotiation between the
employer and employee’s organization or union to reach an agreement on
the terms and conditions of employment for a specified period. Collective
bargaining is a continuous process. The CB does not end with the execution
of the CBA. Thereafter, the parties to the agreement are obliged to meet and
confer promptly, expeditiously and in good faith to thresh out any
grievances in accordance with the grievance procedure therein provided.
Indeed, the grievance procedure is part of the continuous process of CB
(Republic Savings Bank vs. CIR, Sept. 27, 1967).
A. Duty to Bargain Collectively means 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 (Art. 252, LC).
B. When Collective bargaining should begin: if the jurisdictional
precondition are present, the collective bargaining should begin within 12
months following the determination and certification of the employee’s
exclusive bargaining agent (Certification Period)
RULE XVI- DO 40-03
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COLLECTIVE BARGAINING
Section 2. Disclosure of information. - In collective bargaining, the
parties shall, at the request of either of them, make available such up-to-date
financial information on the economic situation of the undertaking, which is
normally submitted to relevant government agencies, as is material and
necessary for meaningful negotiations. Where the disclosure of some of this
information could be prejudicial to the undertaking, its communication may
be made condition upon a commitment that it would be regarded as
confidential to the extent required. The information to be made available
may be agreed upon between the parties to collective bargaining.
Section 3. When single enterprise bargaining available. - Any
voluntarily recognized or certified labor union may demand negotiations
with its employer for terms and conditions of work covering employees in
the bargaining unit concerned.
Section 4. Procedure in single enterprise bargaining - A recognized
or certified labor union that desires to negotiate with its employer shall
submit such intention in writing to the employer, together with its proposals
for collective bargaining.
The recognized or certified labor union and its employer may adopt
such procedures and processes they may deem appropriate and necessary
for the early termination of their negotiations. They shall name their
respective representatives to the negotiation, schedule the number and
frequency of meetings, and agree on wages, benefits and other terms and
conditions of work for all employees covered in the bargaining unit.
Section 5. When multi-employer bargaining available. - A legitimate
labor union(s) and employers may agree in writing to come together for the
purpose of collective bargaining, provided:
(a) only legitimate labor unions who are incumbent exclusive
bargaining agents may participate and negotiate in multi-employer
bargaining;
(b) only employers with counterpart legitimate labor unions who are
Personal Notes of Janine J. Sarausos
incumbent bargaining agents may participate and negotiate in multi-
employer bargaining; and
(c) only those legitimate labor unions who pertain to employer units 153
who consent to multi-employer bargaining may participate in multi-
employer bargaining.
Section 6. Procedure in multi-employer bargaining. - Multi-
employer bargaining may be initiated by the labor unions or by the
employers.
(a) Legitimate labor unions who desire to negotiate with their
employers collectively shall execute a written agreement among
themselves, which shall contain the following:
1) the names of the labor unions who desire to avail of multi-employer
bargaining;
2) each labor union in the employer unit;
3) the fact that each of the labor unions are the incumbent exclusive
bargaining agents for their respective employer units;
4) the duration of the collective bargaining agreements, if any, entered
into by each labor union with their respective employers.
Legitimate labor unions who are members of the same registered
federation, national, or industry union are exempt from execution of this
written agreement.
(b) The legitimate labor unions who desire to bargain with multi-
employers shall send a written notice to this effect to each employer
concerned. The written agreement stated in the preceding paragraph, or the
certificates of registration of the federation, national, or industry union,
shall accompany said notice.
Employers who agree to group themselves or use their existing
associations to engage in multi-employer bargaining shall send a written
notice to each of their counterpart legitimate labor unions indicating their
desire to engage in multi-employer bargaining. Said notice shall indicate the
following:
1) the names of the employers who desire to avail of multi-employer
bargaining;
2) their corresponding legitimate labor organizations;
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3) the fact that each corresponding legitimate union is any incumbent
exclusive bargaining agent;
4) the duration of the current collective bargaining agreement, if any,
entered into by each employer with the counterpart legitimate labor union.
(c) Each employer or concerned labor union shall express its
willingness or refusal to participate in multi-employer bargaining in writing,
addressed to its corresponding exclusive bargaining agent or employer.
Negotiations may commence only with regard to respective employers and
labor unions who consent to participate in multi-employer bargaining;
(d) During the course of negotiations, consenting employers and the
corresponding legitimate labor unions shall discuss and agree on the
following:
1) the manner by which negotiations shall proceed;
2) the scope and coverage of the negotiations and the agreement; and
3) where appropriate, the effect of the negotiations on current
agreements or conditions of employment among the parties.
Section 7. Posting and registration of collective bargaining
agreement. - Two (2) signed copies of collective bargaining agreement
reached through multi-employer bargaining shall be posted for at least 5
days in two conspicuous areas in each workplace of the employer units
concerned. Said collective bargaining agreement shall affect only those
employees in the bargaining units who have ratified it.
The same collective bargaining agreement shall be registered with the
Department in accordance with the following Rule.
Contents of CBA
The subjects of provisions commonly found in collective bargaining
agreements are:
a. Enumeration or reservation of management rights
b. Union recognition and security
c. Wage and fringe benefits and their administration
d. Physical working conditions
e. Selected personnel management and plant operation practices
f. Grievance and arbitration
Personal Notes of Janine J. Sarausos
g. Duration of contract
h. Programs to promote drug-free workplace (required under RA 9165)
153
Kinds of Provisions in the CBA:
1.) Allowable provisions- Union security clause is an agreement which
imposes upon the employees the obligation to acquire or retain union
membership as a condition affecting employment. The obvious purpose is to
safeguard and ensure the continued existence of the union.
Types of union security clause:
1.) Closed shop agreement- only union members can be hired and
workers must remain as union members to retain employment (must be due
to clear and unequivocal statement that the loss of the status of a member of
good standing in the union);
2.) Maintenance of membership agreement- no employee is compelled
to join a union, but all present or future members must, as condition of
employment, remain in good standing in the union;
3.) Union shop agreement- nonmembers may be hired, but to retain
employment, must become members of union after a certain period;
4.) Modified union shop agreement- employees who are not union
members at the time of signing of contract need not join the union, but all
workers hired thereafter must join;
5.) Exclusive bargaining agreement-the union is recognized as the
exclusive bargaining agent for all employees, whether union members or
not;
6.) Bargaining for members only agreement-the union is recognized as
the bargaining agent only for its own members;
7.) Agency shop agreement-employees must either join the union or pay
to the union as exclusive bargaining agent a sum equal to that paid by the
members.
8.) Preferential hiring agreement
Closed-shop vs. union shop
Under closed shop:
1.) Employer cannot hire any worker who is not a member of the
contracting union;
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2.) Membership in the contracting union is a condition for employment
and retention of employment.
Whereas under union shop:
1.) Members may be hired, but they must within a specified period of time
after employment, become a member of the contracting union;
2.) Membership is a condition for continued employment.
Employees not covered by the Union Security Clause:
1.) Religious objectors (but may form unions of their own)
2.) Employees already in the service and already members of the unions
other than the majority union at the time of the closed-shop agreement;
3.) Supervisors ineligible to join the majority union because of
membership therein of employees under their supervision;
4.) Those excluded by express terms of the agreement
2.) Mandatory Provisions of the CBA
a. Provision on wage increases;
b. Grievance machinery and voluntary arbitration;
c. A “no strike, no lockout” clause
Boulwarism
It is an unfair labor practice to make a proposal which is not subject to
bargaining. In a US case, the employer’s “firm and final” offer,
accompanied by a take-it-or-leave-it strategy, was presented through a
barrage of publicity praising the “fairness” of the package and picturing the
company (not the union) as the employees’ “true” representative. In effect,
there was to be no bargaining and the union was rendered ineffective or
irrelevant. The company dealt with the union through the employees rather
than with the employees through the union. This strategy, called
Boulwarism because if was first used by a Mr. Boulware, is construed by a
US court as bad-faith bargaining, hence an unfair labor practice.
Ratification of CBA
A. When needed?
The agreement negotiated by the employees’ bargaining agent should
Personal Notes of Janine J. Sarausos
be ratified or approved by the majority of all the workers in the bargaining
unit, as provided under Article 231of the Labor Code.
The ratification and the way to do it are mandatory. The CBA should 153
be posted for at least five (5) days in two (2) conspicuous places in the
establishment before ratification, to enable the workers to inform
themselves of its provisions. Moreover, the CBA to be submitted to the
DOLE should carry the sworn statement of the union secretary, attested to
be the union president, that the CBA had been duly posted and ratified.
There requirements are mandatory; non-compliance makes the CBA
ineffective.
Art. 231. Registry of unions and file of collective bargaining agreements.
The Bureau shall keep a registry of legitimate labor organizations. The
Bureau shall also maintain a file of all collective bargaining agreements and
other related agreements and records of settlement of labor disputes and
copies of orders and decisions of voluntary arbitrators. The file shall be
open and accessible to interested parties under conditions prescribed by the
Secretary of Labor and Employment, provided that no specific information
submitted in confidence shall be disclosed unless authorized by the
Secretary, or when it is at issue in any judicial litigation, or when public
interest or national security so requires.
Within thirty (30) days from the execution of a Collective Bargaining
Agreement, the parties shall submit copies of the same directly to the
Bureau or the Regional Offices of the Department of Labor and
Employment for registration, accompanied with verified proofs of its
posting in two conspicuous places in the place of work and ratification by
the majority of all the workers in the bargaining unit. The Bureau or
Regional Offices shall act upon the application for registration of such
Collective Bargaining Agreement within five (5) calendar days from receipt
thereof. The Regional Offices shall furnish the Bureau with a copy of the
Collective Bargaining Agreement within five (5) days from its submission.
The Bureau or Regional Office shall assess the employer for every
Collective Bargaining Agreement a registration fee of not less than one
thousand pesos (P1,000.00) or in any other amount as may be deemed
appropriate and necessary by the Secretary of Labor and Employment for
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the effective and efficient administration of the Voluntary Arbitration
Program. Any amount collected under this provision shall accrue to the
Special Voluntary Arbitration Fund.
The Bureau shall also maintain a file and shall undertake or assist in the
publication of all final decisions, orders and awards of the Secretary of
Labor and Employment, Regional Directors and the Commission. (As
amended by Section 15, Republic Act No. 6715, March 21, 1989)
B. When NOT needed?
Ratification of the CBA by the employees in the bargaining unit is not
needed when the CBA is a product of an arbitral award by appropriate
government authority or a voluntary arbitrator.
The arbitral award may result from voluntary arbitration under Art.
262, or from Secretary’s government authority or by a voluntary arbitrator.
Reason: Arbitration—either compulsory because designated by the
Government, or voluntary because designated by the parties—entails
submission to the judgment of an impartial third person. The settlement
device will be circuitous and the very definition of the arbitration will be
contradicted if the arbitrator’s judgment, after being rendered, will be
dependent on acceptance or rejection by any or both of the disputants. If
that would be so, arbitration should not have begun at all. However, posting
of CBA is still necessary.
Retroactivity of the new CBA
1.) If entered within 6 months from the expiration of the provisions, new
CBA shall retroact to the date following the expiry date;
2.) If the new agreement was entered into outside the 6-month-period,then
the parties shall agree on the duration of retroactivity thereof.
3.) If there is no agreement, CBA shall be given prospective effect.
In case of arbitral awards, the retroactivity of the CBA provided under
Article 253-A of the Labor Code (enumerated above) has no application.
Thus, the Supreme Court ruled: In St. Luke's Medical Center, Inc. vs.
Torres, [223 SCRA 779 (1993)], the effectivity date was made retroactive to
the date of the expiration of the previous CBA.
In Pier 8 Arrastre and Stevedoring Services, Inc. vs. Roldan-Confesor,
Personal Notes of Janine J. Sarausos
[241 SCRA 294, 307 (1995)], the effective date of the new CBA should be
the date the Secretary of Labor and Employment has resolved the labor
dispute. 153
In Manila Electric Company vs. Quisumbing, [G. R. No. 127598,
January 27, 1999, 302 SCRA 173, 209], the effectivity date was made
prospective per its January 27, 1999 ruling. Later, per its February 22, 2000
ruling in the same case which was rendered upon motion for
reconsideration, the effectivity of the CBA was made retroactive. But later,
in its August 1, 2000 ruling which was rendered after a Motion for Partial
Reconsideration was filed by Meralco, the Supreme Court finally changed
the effectivity date thereof. It held that the arbitral award should retroact to
the first day after the six-month period following the expiration of the last
day of the CBA, i.e., from June 1, 1996 to May 31, 1998.
LATEST RULING: In the case of LMG Chemicals Corporation vs.
Secretary of DOLE, (G. R. No. 127422, April 17, 2001), the Supreme Court
ruled that retroactivity of CBA in arbitral awards is subject to the discretion
of the DOLE Secretary.
Hold-Over Principle
In the absence of a new CBA, the parties must maintain the status quo
and must continue in full force and effect the terms and conditions of the
existing agreement until a new agreement is reached. (automatic renewal
clause)
What are the remedies in case of CBA deadlock?
In case of a deadlock in the negotiation or renegotiation of the
collective bargaining agreement, the parties may exercise the following
rights under the Labor Code:
a. Conciliation and mediation by the NCMB, DOLE.
b. Declaration of a strike or lockout, as the case may be.
c. Referral of case to compulsory or voluntary arbitration.
RULE XVII- DO 40-03
REGISTRATION OF COLLECTIVE BARGAINING AGREEMENTS
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Section 1. Where to file. - Within thirty (30) days from execution of a
collective bargaining agreement, the parties thereto shall submit two (2)
duly signed copies of the agreement to the Regional Office which issued the
certificate of registration/certificate of creation of chartered local of the
labor union-party to the agreement. Where the certificate of creation of the
concerned chartered local was issued by the Bureau, the agreement shall be
filed with the Regional Office which has jurisdiction over the place where it
principally operates. Multi-employer collective bargaining agreements shall
be filed with the Bureau.
Section 2. Requirements for registration. - The application for CBA
registration shall be accompanied by the original and two (2) duplicate
copies of the following documents which must be certified under oath by
the representative(s) of the employer(s) and labor union(s) concerned
(a) the collective bargaining agreement;
(b) a statement that the collective bargaining agreement was posted in at
least two (2) conspicuous places in the establishment or establishments
concerned for at least five (5) days before its ratification; and
(c) a statement that the collective bargaining agreement was ratified by the
majority of the employees in the bargaining unit of the employer or
employers concerned.
No other document shall be required in the registration of collective
bargaining agreements.
Section 3. Payment of registration fee. - The certificate of registration of
collective bargaining agreement shall be issued by the Regional Office upon
payment of the prescribed registration fee.
Section 4. Action on the application. - The Regional Office and the
Bureau shall act on applications for registration of collective bargaining
agreements within five (5) days from receipt thereof, either by:
(a) approving the application and issuing the certificate of registration; or
(b) denying the application for failure of the applicant to comply with the
requirements for registration.
Personal Notes of Janine J. Sarausos
Where the documents supporting the application are not complete or
are not verified under oath, the Regional Office or the Bureau shall, within
five (5) days from receipt of the application, notify the applicants in writing 153
of the requirements needed to complete the application. Where the
applicants fail to complete the requirements within ten (10) days from
receipt of notice, the application shall be denied without prejudice.
Section 5. Denial of registration; grounds for appeal. - The denial of
registration shall be in writing, stating in clear terms the reasons therefor
and served upon the applicant union and employer within twenty-four (24)
hours from issuance. The denial by the Regional Office of the registration of
single
enterprise collective bargaining agreements may be appealed to the Bureau
within ten (10) days from receipt of the notice of denial. The denial by the
Bureau of the registration of multi-employer collective bargaining
agreements may be appealed to the Office of the Secretary within the same
period. The memorandum of appeal shall be filed with the Regional Office
or the Bureau, as the case may be.
The same shall be transmitted, together with the entire records of the
application, to the Bureau or the Office of the Secretary, as the case may be,
within 24 hours from receipt of the memorandum of appeal.
Single-EC---- Bureau
APPEAL Multi-EC----- Office of the Secretary
Section 6. Period and manner of disposition of appeal. - The Bureau and
the Office of the Secretary shall resolve the appeal within the same period
and in the same manner prescribed in Rule XI of these Rules.
Section 7. Term of representation status; contract bar rule. - The
representation status of the incumbent exclusive bargaining agent which is a
party to a duly registered collective bargaining agreement shall be for a term
of five (5) years from the date of the effectivity of the collective bargaining
agreement. No petition questioning the majority status of the incumbent
exclusive bargaining agent or petition for certification election filed outside
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of the sixty-day period immediately preceding the expiry date of such five-
year term shall be entertained by the Department.
The five-year representation status acquired by an incumbent
bargaining agent either through single enterprise collective bargaining or
multi-employer bargaining shall not be affected by a subsequent collective
bargaining agreement executed between the same bargaining agent and the
employer during the same five-year period.
Note:
Representation status- refers to the identity and majority status of the
union that negotiated the CBA as the exclusive bargaining agent of the
appropriate b.u.
All others- refers to the rest of the CBA- economic and non-economic
provisions, except representation, which has a term of 3 years from
execution.
Section 8. Re-negotiation of collective bargaining agreements. - All
provisions of a collective bargaining agreement, except the representation
status of the incumbent bargaining agent shall, as a matter of right, be
renegotiated not later than three (3) years after its execution.
The re-negotiated collective bargaining agreement shall be ratified and
registered with the same Regional Office where the preceding agreement
was registered. The same requirements and procedure in the registration of
collective bargaining agreements prescribed in the preceding rules shall be
applied.
GRIEVANCE MACHINERY
The law grants to voluntary arbitrators original and exclusive
jurisdiction to hear and decide all unresolved grievances arising from the
interpretation or implementation of their CBA and company personnel
policies (Art. 261, LC).
The parties to the CBA are the union and the company. Hence, only
disputes involving the union and the company shall be referred to the
grievance machinery or voluntary arbitrators. Where both the union and the
Personal Notes of Janine J. Sarausos
company are united or have come to an agreement regarding the dismissal
of private respondents, no grievance between them exists which could be
brought to a grievance machinery. The failure of the parties to the CBA to 153
establish the grievance machinery and its unavailability is not an excuse for
the Labor Arbiter to assume jurisdiction over the disputes arising from the
interpretation and implementation of CBA (Sanyo Phils. Workers Union-
PSSLU vs. Canizares, 211 SCRA 361).
A violation of the Code of Employee Discipline does not constitute a
grievance (Navarro III vs. Damasco, 246 SCRA 261).
Q: What if grievance machinery is bypassed by the employee?
A: Employer may ask for dismissal of the complaint.
RULE XIX- DO 40-03
GRIEVANCE MACHINERY AND VOLUNTARY ARBITRATION
Section 1. Establishment of grievance machinery. - The parties to a
collective bargaining agreement shall establish a machinery for the
expeditious resolution of grievances arising from the interpretation or
implementation of the collective bargaining agreement and those arising
from the interpretation or enforcement of company personnel policies.
Unresolved grievances will be referred to voluntary arbitration and for this
purpose, parties to a collective bargaining agreement shall name and
designate in advance a voluntary arbitrator or panel of voluntary arbitrators,
or include in the agreement a procedure for the selection of such voluntary
arbitrator or panel of voluntary arbitrators, preferably from the listing of
qualified voluntary arbitrators duly accredited by the Board.
In the absence of applicable provision in the collective bargaining
agreement, a grievance committee shall be created within ten (10) days
from signing of the collective bargaining agreement. The committee shall be
composed of at least two (2) representatives each from the members of the
bargaining unit and the employer, unless otherwise agreed upon by the
parties. The representatives from among the members of the bargaining unit
shall be designated by the union.
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Section 2. Procedure in handling grievances. - In the absence of a specific
provision in the collective bargaining agreement or existing company
practice prescribing for the procedures in handling grievance, the following
shall apply:
(a) An employee shall present this grievance or complaint orally or in
writing to the shop steward. Upon receipt thereof, the shop steward shall
verify the facts and determine whether or not the grievance is valid.
(b) If the grievance is valid, the shop steward shall immediately bring the
complaint to the employee's immediate supervisor. The shop steward, the
employee and his immediate supervisor shall exert efforts to settle the
grievance at their level.
(c) If no settlement is reached, the grievance shall be referred to the
grievance committee which shall have ten (10) days to decide the case.
Where the issue involves or arises from the interpretation or
implementation of a provision in the collective bargaining agreement, or
from any order, memorandum, circular or assignment issued by the
appropriate authority in the establishment, and such issue cannot be
resolved at the level of the shop steward or the supervisor, the same may be
referred immediately to the grievance committee.
Section 3. Submission to voluntary arbitration. - Where grievance
remains unresolved, either party may serve notice upon the other of its
decision to submit the issue to voluntary arbitration. The notice shall state
the issue or issues to be arbitrated, copy thereof furnished the board or the
voluntary arbitrator or panel of voluntary arbitrators named or designated in
the collective bargaining agreement.
If the party upon whom the notice is served fails or refuses to respond
favorably within seven (7) days from receipt thereof, the voluntary
arbitrator or panel of voluntary arbitrators designated in the collective
bargaining agreement shall commence voluntary arbitration proceedings.
Where the collective bargaining agreement does not so designate, the board
shall call the parties and appoint a voluntary arbitrator or panel of voluntary
arbitrators, who shall thereafter commence arbitration proceedings in
accordance with the proceeding paragraph.
In instances where parties fail to select a voluntary arbitrator or panel
Personal Notes of Janine J. Sarausos
of voluntary arbitrators, the regional branch of the Board shall designate the
voluntary arbitrator or panel of voluntary arbitrators, as may be necessary,
which shall have the same force and effect as if the parties have selected the 153
arbitrator.
Section 4. Jurisdiction of voluntary arbitrator or panel of voluntary
arbitrators. –
The voluntary arbitrator or panel of voluntary arbitrators shall have
exclusive and original jurisdiction to hear and decide all grievances arising
from the implementation or interpretation of the collective bargaining
agreements and those arising from the interpretation or enforcement of
company personnel policies which remain unresolved after exhaustion of
the grievance procedure.
They shall also have exclusive and original jurisdiction, to hear and
decide wage distortion issues arising from the application of any wage
orders in organized establishments, as well as unresolved grievances arising
from the interpretation and implementation of the productivity incentive
programs under RA 6971.
The National Labor Relations Commission, its regional branches and
Regional Directors of the Department of Labor and Employment shall not
entertain disputes, grievances or matters under the exclusive and original
jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators and
shall immediately dispose and refer the same to the appropriate grievance
machinery or voluntary arbitration provided in the collective bargaining
agreement.
Upon agreement of the parties, any other labor dispute may be
submitted to a voluntary arbitrator or panel of voluntary arbitrators. Before
or at any stage of the compulsory arbitration process, the parties may opt to
submit their dispute to voluntary arbitration.
Section 5. Powers of voluntary arbitrator or panel of voluntary
arbitrators. - The voluntary arbitrator or panel of voluntary arbitrators shall
have the power to hold hearings, receive evidence and take whatever action
is necessary to resolve the issue/s subject of the dispute.
The voluntary arbitrator or panel of voluntary arbitrators may conciliate
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or mediate to aid the parties in reaching a voluntary settlement of the
dispute.
Section 6. Procedure. - All parties to the dispute shall be entitled to attend
the arbitration proceedings. The attendance of any third party or the
exclusion of any witness from the proceedings shall be determined by the
voluntary arbitrator or panel of voluntary arbitrators. Hearing may be
adjourned for cause or upon agreement by the parties.
Unless the parties agree otherwise, it shall be mandatory for the
voluntary arbitrator or panel of voluntary arbitrators to render an award or
decision within twenty (20) calendar days from the date of submission for
resolution.
Failure on the part of the voluntary arbitrator to render a decision,
resolution, order or award within the prescribed period, shall upon
complaint of a party, be sufficient ground for the Board to discipline said
voluntary arbitrator, pursuant to the guidelines issued by the Secretary. In
cases that the recommended sanction is de-listing, it shall be unlawful for
the voluntary arbitrator to refuse or fail to turn over to the board, for its
further disposition, the records of the case within ten (10) calendar days
from demand thereof.
Section 7. Finality of Award/Decision. - The decision, order, resolution or
award of the voluntary arbitrator or panel of voluntary arbitrators shall be
final and executory after ten (10) calendar days from receipt of the copy of
the award or decision by the parties and it shall not be subject of a motion
for
reconsideration.
Section 8. Execution of Award/Decision. - Upon motion of any interested
party, the voluntary arbitrator or panel of voluntary arbitrators or the Labor
Arbiter in the region where the movant resides, in case of the absence or
incapacity for any reason of the voluntary arbitrator or panel of voluntary
arbitrators who issued the award or decision, may issue a writ of execution
requiring either the Sheriff of the Commission or regular courts or any
public official whom the parties may designate in the submission agreement
Personal Notes of Janine J. Sarausos
to execute the final decision, order or award.
Section 9. Cost of voluntary arbitration and voluntary arbitrator's fee. 153
- The parties to a collective bargaining agreement shall provide therein a
proportionate sharing scheme on the cost of voluntary arbitration including
the voluntary arbitrator's fee. The fixing of fee of voluntary arbitrators or
panel of voluntary arbitrators, whether shouldered wholly by the parties or
subsidized by the Special Voluntary Arbitration Fund, shall take into
account the following factors:
(a) Nature of the case;
(b) Time consumed in hearing the case;
(c) Professional standing of the voluntary arbitrator;
(d) Capacity to pay of the parties; and
(e) Fees provided for in the Revised Rules of Court.
Unless the parties agree otherwise, the cost of voluntary arbitration
proceedings and voluntary arbitrator's fee shall be shared equally by the
parties.
Parties are encouraged to set aside funds to answer for the cost of
voluntary arbitration proceedings including voluntary arbitrator's fee. In the
event the said funds are not sufficient to cover such expenses, an amount by
way of subsidy taken out of the Special Voluntary Arbitration fund may be
availed of by either or both parties subject to the guidelines on voluntary
arbitration to be issued by the Secretary.
Section 10. Maintenance of case records by the Board. - The Board shall
maintain all records pertaining to a voluntary arbitration case. In all cases,
the Board shall be furnished a copy of all pleadings and submitted to the
voluntary arbitrator as well as the orders, awards and decisions issued by
the voluntary arbitrator.
The records of a case shall be turned over by the voluntary arbitrator or
panel of voluntary arbitrators to the concerned regional branch of the Board
within ten (10) days upon satisfaction of the final arbitral
award/order/decision.
VOLUNTARY ARBITRATION
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Labor Arbitration- is the reference of a labor dispute to a third party
for determination on the basis of evidence and arguments presented by such
parties, who are bound to accept the decision.
Classifications:
1.) Voluntary- when it is binding because of prior agreement or contract;
2.) Compulsory- when the law declares the dispute subject to arbitration,
regardless of the consent or desire of the parties.
Voluntary arbitration- a contractual proceedings whereby the parties
to any dispute or controversy, in order to obtain a speedy and inexpensive
final disposition of the matter involved, select a judge of their own choice
and by consent submit the controversy to him for determination.
REVISED PROCEDURAL GUIDELINES IN THE CONDUCT OF
VOLUNTARY ARBITRATION PROCEEDINGS
Pursuant to the mandate of the National Conciliation and Mediation Board
under Executive Order No. 126, as amended by Executive Order No. 251,
and in order to implement Articles 260-262 (b) of the Labor Code, as
amended by RA 6715 and Department Order No. 40-03, the following
guidelines governing proceedings before a voluntary arbitrator are hereby
adopted and promulgated:
Rule I
TITLE AND CONSTRUCTION
Section 1. Title. These guidelines shall be known as the NCMB Revised
Procedural Guidelines in the Conduct of Voluntary Arbitration Proceedings.
Section 2. Construction. These guidelines shall be liberally construed to
carry out the objectives of the Labor Code of the Philippines, as amended,
to promote voluntary arbitration as a preferred mode of labor or industrial
dispute settlement and as an integral component of the collective bargaining
process.
Section 3. Directory and Suppletory Application of the Guidelines and
Rules of the Court. The rules governing the proceedings before a voluntary
Personal Notes of Janine J. Sarausos
arbitrator shall be the subject of agreement among the parties to a labor
dispute and their chosen arbitrator. In the absence of agreement on any or
various aspects of the voluntary arbitration proceedings, the pertinent 153
provisions of these Guidelines and the Revised Rules of Court shall apply
by analogy or in a directory or suppletory character and effect.
Rule II
DEFINITION OF TERMS
Section 1. Definition of Terms.-
(a) “Board” – refers to the National Conciliation and Mediation Board
AND ITS REGIONAL BRANCHES created under Executive Order No.
126, as amended.
(b) “EXECUTIVE DIRECTOR – refers to the head of the Board.
(c) “Regional Branch” – refers to any of the Regional Branches of the
Board.
(d) “Voluntary Arbitration” – refers to the mode of settling labor-
management disputes by which the parties select a competent, trained and
impartial third person who shall decide on the merits of the case and whose
decision is final AND executory.
(e) “Voluntary Arbitrator” – refers to any person who has been accredited
by the Board as such, or any person named or designated in the collective
bargaining agreement by the parties as their voluntary arbitrator, or one
chosen BY THE PARTIES with OR WITHOUT the assistance of the
BOARD, pursuant to a selection procedure agreed upon in the CBA OR
ONE APPOINTED BY THE BOARD IN CASE EITHER OF THE
PARTIES TO THE CBA REFUSES TO SUBMIT TO VOLUNTARY
ARBITRATION. THE TERM INCLUDES PANEL OF VOLUNTARY
ARBITRATORS.
1) PERMANENT ARBITRATOR – the voluntary arbitrator specifically
named or designated in the CBA by the partied as their voluntary arbitrator.
(f) AD-HOC ARBITRATOR - the voluntary arbitrator chosen by the
parties in accordance with the established procedures in the CBA or the one
appointed by the Board in case there is failure in the selection or in case
either of the parties to the CBA refuses to voluntary arbitration.
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 Personal Notes of Janine J. Sarausos

(g) “Collective Bargaining Agreement” – CBA for short, refers to the productivity gainsharing program whereby the employees are granted
contract between a duly recognized or certified exclusive bargaining agent productivity bonuses.
of workers and the employer concerning wages, hours of work and all other 153
terms and conditions of employment in the appropriate bargaining UNIT. Rule III
(h) “Grievance” – is a complaint arising from the interpretation or PLEADINGS AND APPEARANCE
implementation of the collective bargaining agreement (CBA) and those
arising from interpretation or enforcement of COMPANY RULES AND Section 1. Caption and Title. In all cases submitted to a voluntary arbitrator
REGULATIONS, personnel policies, AND ESTABLISHED PRACTICES, by the parties, the aggrieved party shall be called “Complainant,” and the
OR SUCH OTHER CONTROVERSY INVOLVING EMPLOYER- opposing party, the “Respondent.”
EMPLOYEE RELATIONSHIP. The full names of the parties, as far as they are known, shall be stated
(i) “Grievance Procedure” – refers to the system of grievance settlement in the original caption of the original pleading, award or decision and in
as provided FOR in the collective bargaining agreement. It usually consists all summons, notices and processes to be served upon them. The caption
of successive steps starting at the level of complainant and his immediate shall be as follows:
supervisor and ending, when necessary, at VOLUNTARY ARBITRATION. Republic of the Philippines
(j) "SUBMISSION AGREEMENT" – refers to a written agreement by Office of the Voluntary Arbitrator
the parties submitting their case for arbitration containing the issued, the NAME OF VOLUNTARY ARBITRATOR & BUSINESS ADDRESS
chosen arbitrator and stipulation to abide by and comply with the resolution
including the cost of arbitration.. IN RE: Voluntary Arbitration Between
(k) "NOTICE TO ARBITRATE" – refers to a formal demand made by CASE NO. xxxxxxxxxxxxxxxxxxxx
one party to the other for the arbitration of a particular dispute in case of ……………………………………………….
refusal of one party in a CBA to submit to arbitration. Complainant
(l) "ARBITRATION CLAUSE" –is a provision in the CBA requiring that -and-
grievances, if unsettled, shall be finally resolved by a voluntary arbitrator. ………………………………………………..
(m) "WAGE DISTORTION" – means a situation where an increase in Respondent
prescribed wage rates results in the elimination or severe contraction of Issues Involved:
intentional quantitative differences in wage or salary rates between and xxxxxxxxx
among employee groups in an establishment as to effectively obliterate the IN ORDER TO SYSTEMATIZE MONITORING OF VOLUNTARY
distinctions embodied in such wage structure based on skills, length of ARBITRATION CASES, THE ADOPTION OF A STANDARDIZED
service, or other logical bases of differentiation. NUMBERING SYSTEM OF CASES SHALL BE USED. THE DOCKET
(n) "PRODUCTIVITY INCENTIVE PROGRAMS" – refers to a formal OF THE INDIVIDUAL ACCREDITED VOLUNTARY ARBITRATION
agreement voluntarily established by the labor-management committed CASES SHALL INCLUDE THE FOLLOWING:
containing a productivity improvement program that will promote gainful 1. ACCREDITATION NUMBER
employment, improve working conditions, maintaining industrial peace and 2. REGION WHERE THE CASE ORIGINATES
result in increased productivity, including cost savings, as well as a 3. NUMBER OF CASE SUBJECT OF ARBITRATION

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4. MONTH WHEN THE CASE IS SUBMITTED TO THE
ARBITRATOR
5. YEAR WHEN THE CASE IS SUBMITTED THE ARBITRATOR
Section 2. Where to File Pleadings. All pleadings relative to the voluntary
arbitration case shall be filed directly with the chosen voluntary arbitrator at
his designated business or professional office COPY FURNISHED THE
REGIONAL BRANCH OF THE BOARD HAVING JURISDICTION
OVER THE WORKPLACE OF THE COMPLAINANT.
Section 3. Service of Copies of Pleadings. The party filing the pleadings
shall serve the opposing party or parties with a copy or copies thereof in the
manner provided for in these Guidelines.
Section 4. Service of Pleadings, Notices and Awards. Copies of pleadings,
notices or copies of award may be served through personal service or by
registered mails on the parties to the dispute; provided, that where a party is
represented by counsel or authorized representative, service will be made on
the latter. Service by registered mail is complete upon receipt by the
addressee or his agents.
Section 5. Representations. – The parties may personally appear in their
own behalf or by representatives. In the latter case, the representative must
be duly authorized to appear in writing or he can be practicing attorney-at-
law.
The complete name and office address or any change in the address of
counsel/representative shall be made of record and the party should be
properly informed.
Section 6. Limitation on Authority to Bind Party. Attorneys and other
representatives of parties shall be presumed to have the full authority to
bind their clients or principals in all matters of procedure; but they cannot,
without a special power of attorney or expressed consent, enter into a
compromise agreement with the opposing party in full or partial discharge
of a client’s or principal’s claim.
Personal Notes of Janine J. Sarausos
Rule IV
JURISDICTION OF VOLUNTARY ARBITRATOR 153
Section 1. Exclusive and Original Jurisdiction. The voluntary arbitrator
shall have exclusive and original jurisdiction over the following cases:
1) All unresolved grievances arising from the interpretation or
implementation of the collective bargaining agreement.
2) All unresolved grievances arising from the implementation or
enforcement of company personnel policies.
3) ALL WAGE DISTORTION ISSUES ARISING FROM THE
APPLICATION OF ANY WAGE ORDERS IN ORGANIZED
ESTABLISHMENTS
4) ALL UNRESOLVED GRIEVANCES ARISING FROM THE
INTERPRETATION AND IMPLEMENTATION OF THE
PRODUCTIVITY INCENTIVE PROGRAMS UNDER RA 6971.
For this purpose, all grievances which are not settled or resolved
within seven (7) calendar days from the date of the submission for
resolution to the last step of the grievance machinery shall automatically be
referred to voluntary arbitration prescribed in the collective bargaining
agreement.
Cases falling within the exclusive and original jurisdiction of voluntary
arbitrators but filed either with the National Labor Relations Commission
and its Regional Branches, or the Regional Directors of the Department of
Labor and Employment or with the Board and its Branches, shall be
decided by the voluntary arbitrator upon referral of said cases pursuant to
paragraph 2, Article 261 of the Labor Code, as amended by RA 6715 AND
DEPARTMENT ORDER NO. 40-03.
Section 2. Concurrent Jurisdiction. The voluntary arbitrator upon
agreement of the parties, shall also hear and decide all other labor disputes
including unfair labor practice and bargaining deadlocks. Before or at any
stage of the compulsory arbitration process, parties to a labor dispute may
agree to submit their case to voluntary arbitration.
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 Personal Notes of Janine J. Sarausos

2) Upon receipt of a notice to arbitrate after the lapse of seven (7)-day

SECTION 3. NUMBER OF ARBITRATORS. If the CBA does not specify period within which to respond, the permanent arbitrator/s shall
the number of arbitrators, the case shall be heard and resolved by a sole immediately commence arbitration proceedings; 153
arbitrator, unless the parties agree otherwise. 3) In the absence of a permanent arbitrator in the CBA, the Board appoints
a voluntary arbitrator who shall immediately commence arbitration
Section 4. When Jurisdiction is Exercised. The voluntary arbitrator shall proceedings upon receipt of such appointment.
exercise jurisdiction over specific case/s:
1) Upon receipt of a Submission Agreement duly signed by both parties. SECTION 7. CONTENTS OF A NOTICE TO ARBITRATE. THE NOTICE
2) Upon receipt of the notice to arbitrate when there is refusal from one SHALL CONTAIN, AMONG OTHERS, THE FOLLOWING:
party; 1. The names, addresses and contact numbers of the party upon whom
3) Upon receipt of an appointment/ designation as voluntary arbitrator by the notice is made;
the Board in either of the following circumstances: 2. The arbitration clause of the CBA;
3.1. In the event that parties fail to select an arbitrator; or 3. The specific issue/s or dispute to be arbitrated;
3.2. In the absence of a named arbitrator in the CBA and the party 4. The relief sought;
upon whom the notice to arbitrate is served does not favorably reply within 5. The names, address and contact numbers of the initiating party
seven (7) days from receipt pf such notice. requesting arbitration.

Section 5. Contents of Submission Agreement. The SUBMISSION SECTION 8. CONTENTS OF AN APPOINTMENT FROM THE
Agreement shall contain, among others, the following: BOARD. THE APPOINTMENT FROM THE BOARD SHALL
1. THE agreement to submit to arbitration; CONTAIN, AMONG OTHERS, THE FOLLOWING:
2. THE specific issue/s to be ARBITRATED; 1. THE NAME OF THE ARBITRATOR;
3. THE name of the arbitrator; 2. THE NAMES, ADDRESSES AND CONTACT NUMBERS OF
4. THE NAMES, ADDRESSES AND CONTACT NUMBERS OF THE THE PARTIES;
PARTIES; 3. THE ISSUES TO BE ARBITRATED;
5. THE agreement to perform or abide by the decision. 4. THE BASIS OF APPOINTMENT;
5. THE ARBITRATOR’S FEE;
SECTION 6. SUBMISSION TO ARBITRATION THROUGH NOTICE 6. THE SIGNATURE OF APPOINTING NCMB DIRECTOR.
TO ARBITRATE. After exhaustion of the grievance procedure but the
grievance remains unresolved and there is refusal from one party to submit Rule V
to voluntary arbitration, the following shall be observed: POWERS AND DUTIES OF VOLUNTARY ARBITRATOR
1) A notice to arbitrate shall be served upon the unwilling party, copy
furnished the permanent arbitrator and the NCMB Regional Branch having Section 1. DUTY to Conciliate and Mediate. The voluntary arbitrator
jurisdiction over the workplace; SHALL EXERT BEST EFFORTS to conciliate or mediate to aid the parties
in reaching a voluntary settlement of the dispute, before proceeding with
arbitration.
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SECTION 2. DUTY TO ENCOURAGE THE PARTIES TO ENTER
INTO STIPULATION OF FACTS. To facilitate speedy disposition of
cases, in case the parties failed to reach a voluntary settlement of the
dispute, the voluntary arbitrator shall encourage the parties to enter into
stipulation of facts, which shall be reduced in writing, signed by the parties,
and shall form part of the records of the case.
Section 3. Powers. The voluntary arbitrator shall have the FOLLOWING
powers to:
1) Require any person to attend hearing/s;
2) Subpoena witnesses and RECEIVE documents when the relevancy of
the testimony and the materiality thereof has been demonstrated to the
arbitrators;
3) TAKE WHATEVER ACTION IS NECESSARY TO RESOLVE THE
ISSUE/S SUBJECT OF THE DISPUTE;
4) ISSUE A WRIT OF EXECUTION TO ENFORCE FINAL
DECISIONS AND, IN CONNECTION THEREWITH, IT SHALL BE HIS
DUTY TO:
4.1 SEE TO IT THAT HIS/HER DECISION IS FULLY SATISFIED;
4.2 INQUIRE INTO THE CORRECTNESS OF THE EXECUTION OF
HIS/HER FINAL DECISION;
4.3 CONSIDER WHATEVER SUPERVENING EVENT THAT MAY
TRANSPIRE DURING SUCH EXECUTION;
4.4 DETERMINE EVERY QUESTION OF FACT AND LAW WHICH
MAY BE INVOLVED IN THE EXECUTION.
Rule VI
PROCEEDINGS BEFORE VOLUNTARY ARBITRATOR
Section 1. Nature of Proceedings. The proceedings before a voluntary
arbitrator are non-litigious in nature. They are not governed by technical
rules applicable to court or judicial proceedings, but they must, at all times,
comply with the requirements of due process.
Personal Notes of Janine J. Sarausos
Section 2. Setting of Initial Conference; Notice to Parties. Within two (2)
days from receipt of the Submission Agreement, NOTICE TO ARBITRATE
OR APPOINTMENT, the voluntary arbitrator, shall set the date, time and 153
place of the initial conference with due notice to the parties.
SECTION 3. INITIAL CONFERENCE. During the INITIAL conference,
the parties shall be encouraged to explore all possible means of effecting a
settlement of the dispute. Should the parties arrive at any agreement as to
the whole or any part of the dispute, the same shall be reduced in writing
and signed by the parties before the voluntary arbitrator AND IT SHALL
FORM PART OF THE DECISION.
SECTION 4. STIPULATION OF FACTS. In the absence of any
settlement, the voluntary arbitrator shall REQUIRE THE PARTIES TO
STIPULATE FACTS WHICH ARE NO LONGER DISPUTABLE,
LEAVING THE PRESENTATION AND EXAMINATION OF
EVIDENCE, AND ONLY TO SUCH FACTS THAT ARE STILL IN
DISPUTE.
Section 5. Simplification of Arbitrable Issue/s. The arbitrator must see to
it that he understands clearly the issue/s submitted to arbitration. If, after
conferring with the parties, he finds the necessity to clarify/simplify the
issue/s, he shall assist the parties in the reformulation of the same.
SECTION 6. FORMULATION OF GROUND RULES. THE PARTIES
AND THE ARBITRATOR SHALL JOINTLY FORMULATE AND ADOPT
THE GROUND RULES ON THE FOLLOWING:
1) SCHEDULE AND FREQUENCY OF CONFERENCES
2) RULES ON POSTPONEMENTS
3) PERIOD AND MANNER OF SUBMISSION OF POSITION PAPERS
AND OTHER PLEADINGS
4) DETERMINATION FOR THE NECESSITY OF CONDUCTING
CLARIFICATORY CONFERENCE
5) PERIOD TO DECIDE THE CASE
6) COST OF ARBITRATION
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SECTION 7. EFFECT OF NON-APPEARANCE. In case of non-
appearance of either parties for two consecutive conferences, despite due
notice, the voluntary arbitrator shall terminate the conference and issue an
order requiring the parties to submit their respective position papers within
10 calendar days from receipt of the said order; otherwise, the case will be
deemed submitted for decision based on available records on file.
SECTION 8. SUBMISSION OF POSITION PAPERS AND OTHER
PLEADINGS. The voluntary arbitrator shall direct parties to submit
verified position papers and other pleadings on the dates agreed upon during
the initial conference. These position papers shall cover only issues and
causes of action raised in the submission agreement, notice to arbitrate or
appointments of voluntary arbitrator/s and stipulation of facts, as simplified
and clarified during the initial conference. These shall be accompanied by
supporting evidence, if any, including affidavits of witnesses which shall
take the form of direct testimonies.
SECTION 9. DETERMINATION FOR THE NECESSITY OF A
CLARIFICATORY CONFERENCE INCLUDING CONDUCT OF
OCULAR INSPECTIONS. Immediately after the submission of the
position papers and other pleadings, the voluntary arbitrator shall determine
the need for holding a clarificatory conference or ocular inspection, in
which case, the parties shall be duly notified.
Section 10. Recording. THE PROCEEDINGS BEFORE A VOLUNTARY
ARBITRATOR NEED NOT BE RECORDED, PROVIDED HOWEVER,
THAT THE ARBITRATOR/S, IN CONSULTATION WITH THE
PARTIES, SHOULD MAKE A WRITTEN SUMMARY OF THE
PROCEEDINGS, INCLUDING THE SUBSTANCE OF THE EVIDENCE
PRESENTED, SHOULD THE PARTIES REQUEST for the taking of
record of proceedings and the testimony of witnesses, SUCH REQUEST
SHALL BE ARRANGED BY THE ARBITRATOR and payment of the cost
thereof is assumed by such requesting party or parties.
Personal Notes of Janine J. Sarausos
Section 11. Attendance of Persons. Persons having a direct interest in the
subject of arbitration shall have the right to attend any CONFERENCE; but
the attendance of any other person shall be at the discretion of the arbitrator. 153
Section 12. Arbitration CONFERENCE. In the conduct of
CONFERENCE, the arbitrator shall provide the parties adequate
opportunities to be heard. He shall control the proceedings and see to it that
proper decorum is observed. He must render a ruling of the issue/s raised in
the course of the proceedings. He must treat all significant aspects of the
proceedings as confidential in nature unless confidentiality is waived by the
parties.
Rule VII
DECISIONS
Section 1. Decision. The final arbitral disposition of issue/s submitted to
voluntary arbitration is the Decision, WHICH may take the form of a
dismissal of a claim or grant of specific remedy, either by way of
prohibition of particular acts or specific performance of particular acts.
Section 2. Period to Render Decision. The decision of voluntary arbitrator
must be rendered within the PERIOD AGREED UPON by the parties AND
THE ARBITRATOR DURING THE INITIAL CONFERENCE but in no
case to exceed twenty (20) calendar days from submission of the case FOR
DECISION.
SECTION 3. SANCTION FOR FAILURE TO COMPLY WITH THE
PERIOD TO DECIDE. Failure on the part of the voluntary arbitrator to
render decision, within the agreed or prescribed period, without justifiable
cause or reason, shall upon a verified complaint of a party to the case, be
sufficient ground for the Board to discipline said VA/s, pursuant to the
guidelines issued by the Secretary.
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In case of de-listing, the VA shall, within ten (10) calendar days from
demand, turnover the records of the case to the Board for further
disposition.
Section 4. FULL AND COMPLETE Settlement During Arbitration. In
the event that the parties FINALLY settle their dispute DURING THE
PENDENCY OF THE ARBITRATION PROCEEDINGS, THE TERMS OF
SETTLEMENT SHALL BE REDUCED INTO WRITING AND SHALL
BE ADOPTED AS THE DECISION OF the arbitrator.
Section 5. Basis of the Decision. The DECISION must state in clear,
concise and definite terms the facts and the LAW upon which it was
BASED.
In case the DECISION of the voluntary arbitrator INVOLVES
MONETARY AWARD, the amount granted and the formula used in the
computation if any, SHALL BE SPECIFIED.
Section 6. Finality of Decision. THE decision of THE voluntary arbitrator
SHALL BE final and executory after ten (10) calendar days from receipt of
the copy of the decision by the parties.
SECTION 7. MOTIONS FOR RECONSIDERATION. The decision of
the VA is not subject of a motion for reconsideration.
Section 8. COMPLIANCE WITH DECISION. Both parties shall comply
voluntarily and faithfully with the DECISION.
RULE VIII
EXECUTION PROCEEDINGS
SECTION 1. ENFORCEMENT OF DECISION. In instances of non-
compliance by either or both parties, a motion to enforce/execute the award
may be filed with the voluntary arbitrator who may issue a writ of execution
requiring either the sheriff of the National Labor Relations Commission or
the regular courts or any public official whom the parties may designate in
the submission agreement, to execute the final decision.
Personal Notes of Janine J. Sarausos
In the absence of the voluntary arbitrator or in case of his incapacity,
the motion shall be filed with the Labor Arbiter in the region having
jurisdiction over the workplace. The filing of motion for the issuance of 153
Writ of Execution is without prejudice to any other action the aggrieved
party may take against the non-complying party such as a petition for
contempt or imposition of fines and penalties.
SECTION 2. PRE-EXECUTION CONFERENCE. Within two (2)
working days from receipt of the motion for the issuance of a writ of
execution, the VA or in case of his incapacity, the LA before whom the
motion is filed, shall schedule a pre-conference to thresh out matters
relevant to execution.
SECTION 3. ISSUANCE OF A WRIT. Execution shall issue upon a
decision that finally disposes of the actions or proceedings.
SECTION 4. ENFORCEMENT OF WRIT. The sheriff or other authorized
officer shall be guided by the NLRC Manual on Execution of Judgment, the
procedural guidelines in the execution of Voluntary Arbitrators decision, the
memorandum of agreement executed between NLRC and NCMB and in the
absence of applicable rules, the Revised Rules of Court, as amended.
SECTION 5. DESIGNATION OF SPECIAL SHERIFFS. Only the
SOLE may designate special sheriffs to ensure compliance with the decision
of Voluntary Arbitrators.
SECTION 6. EFFECT OF FILING OF PETITION FOR CERTIORARI
ON EXECUTION. The filing of a petition for Certiorari with the CA or the
SC shall not stay the execution of the assailed decision unless a temporary
restraining order or injunction is issued by the CA or the SC pending
resolution of such petition.
STRIKES AND LOCKOUTS
Kinds and Forms of Strike
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AS TO EXTENT
GENERAL STRIKE – extends over a whole community, province, state or
country.
LOCAL OR PARTICULAR STRIKE – one undertaken by workers in a
particular enterprise, locality, or occupation.
AS TO THE NATURE OF THE ACT
STRIKE PROPER
SIT-DOWN STRIKE – when a group of employees or others interested
in obtaining a certain objective in a particular business establish themselves
within the plant, stop its production and refuse access to the owners or to
others desiring to work; or one where the workers stop working but do not
leave their place of work.
PARTIAL OR QUICKIE STRIKE – intermittent, unannounced work
stoppage, including slowdowns, unauthorized extension of rest periods, and
walkouts for portions of a shift or for entire shifts.
AS TO THE DEGREE OF EMPLOYEE INTEREST
PRIMARY STRIKE – one declared by the employees who have a
direct and immediate interest, whether economic or otherwise, in the subject
of the dispute which exists between them and the employer.
SECONDARY STRIKE – a coercive measure adopted by workers
against an employer connected by product or employment with alleged
unfair labor conditions or practices.
SYMPATHETIC STRIKE – one in which the striking employees have
no demands or grievances of their own, but strike for the purpose of directly
or indirectly aiding others, without direct relation to the advancement of the
interest of the strikers.
AS TO NATURE OR PURPOSE OF EMPLOYEE INTEREST
ECONOMIC STRIKE – one staged by workers to force wage or other
economic concessions from the employer which he is not required by law to
grant (Consolidated Labor Association of the Phil. vs. Marsman and
Company, 11 SCRA 589).
Personal Notes of Janine J. Sarausos
ULP STRIKE – one called to protest against the employer’s acts of
unfair labor practice enumerated in Article 248 of the Labor Code, as
amended, including gross violation of the collective bargaining agreement 153
(CBA) and union busting.
WHAT ARE THE other DIFFERENT FORMS OF STRIKES?
1. LEGAL STRIKE – one called for a valid purpose and conducted
through means allowed by law.
2. ILLEGAL STRIKE – one staged for a purpose not recognized by law,
or if for a valid purpose, conducted through means not sanctioned by law.
3. SLOWDOWN STRIKE – one staged without the workers quitting their
work but merely slackening or by reducing their normal work output; a
strike on installment plan. Slowdown is generally condemned as inherently
illicit and unjustifiable, because while employees continue to work and
remain at their positions and accept the wages due them, they at the same
time select what part of their allocated tasks they care to perform of their
own volition or refuse openly or secretly to the employer’s damage to do
other work.
4. WILD-CAT STRIKE – one declared and staged without filing the
required notice of strike and without the majority approval of the
recognized bargaining agent.
The right to strike is a constitutional and legal right of the workers as
the employers have the inherent and statutory right to lockout, all within the
context of labor relations and collective bargaining. It is a means of last
resort and presupposes that the duty to bargain in good faith has been
fulfilled and other voluntary modes of dispute settlement have been
tried and exhausted. (Guidelines Governing Labor Relations).
WHAT ARE THE LEGAL IMPLICATIONS FOR NON-
COMPLIANCE WITH THE REQUIREMENTS FOR A VALID
STRIKE OR LOCKOUT?
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The requirements for a valid strike or lockout are mandatory in
character and non-compliance therewith is sufficient ground to declare the
strike or lockout illegal.
If a strike is declared illegal, the employer may be authorized to
terminate any union officer who knowingly participates in an illegal strike
and any worker or union officer who knowingly participates in the
commission of illegal acts during a strike; provided, That mere participation
of a worker in a lawful strike shall not constitute sufficient ground for
termination of his employment, even if a replacement had been hired by the
employer during such lawful strike.
In case the lockout is declared illegal, any worker whose employment
has been terminated as a consequence thereof may be entitled to re-
instatement including payment of full backwages and other benefits.
CATEGORIES OF ILLEGAL STRIKE:
Violation of a legal prohibition- it is illegal for government employees
to stage a strike.
Non-observance of procedural requirements- procedural requisites that
must be observed are: filing of notice of strike, observance of cooling-off
period, taking of strike vote, and observance of the seven-day strike-vote
report period.
Strike based on non-strikeable grounds- the Labor Code recognizes
only 2 strikeable grounds: collective bargaining deadlock and unfair labor
practice.
The means employed are illegal.-use of threats, coercion or violence
are illegal -even if the purpose of a strike is valid, the strike may still be
held invalid where the means employed are illegal. However, where
violence was committed on both sides during a strike, such violence cannot
be a ground for declaring the strike as illegal.
No strike or lockout shall be declared 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.
WHAT ARE THE REQUISITES OF A LAWFUL STRIKE OR
LOCKOUT?
Personal Notes of Janine J. Sarausos
The requirements for a valid strike or lockout are as follows:
Substantial limitation: It must be based on a valid and factual ground; 153
The Labor Code recognizes only 2 strikeable grounds, viz: collective
bargaining deadlock, ULP (note: Union busting: cooling off period can be
foregone.) As provided in Wage Rationalization Act, no strike in case of
wage distortion.
“Deadlock” arises when there is an impasse which presupposes
reasonable effort at good faith bargaining which, despite noble
intentions, does not conclude in agreement between the parties. Where, for
instance, the employer never made any serious efforts to respond to the
proposals for collective bargaining by the union, it cannot be maintained
that a deadlock arose (DWU-Tacloban vs. SOLE, Sept 4, 1992).
Impasse is a point at which no further progress can be made. A
situation that is so difficult that no progress can be made; a deadlock or a
stalemate: i.e. reached an impasse in the negotiations.
Procedural Limitation:
1. A strike or lockout NOTICE shall be filed with the National
Conciliation and Mediation Board (NCMB) at least 15 days before the
intended date of the strike or lockout if the issues raised are unfair labor
practices, or at least 30 days before the intended date thereof if the issue
involves bargaining deadlock.
In cases of dismissal from employment of union officers duly elected in
accordance with the union constitution and by-laws, which may constitute
UNION BUSTING where the existence of the union is threatened, the 15-
day cooling-off period shall not apply and the union may take action
immediately after the strike vote is conducted and the result thereof
submitted to the Department of Labor and Employment.
If notice of strike is converted into a preventive mediation case, notice
of strike will have to be dropped from the calendar. In that case, union
cannot go on strike anymore, otherwise the strike is illegal (PAL vs. NLRC,
193 SCRA 223).
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WHEN A DISPUTE SUBJECT OF A NOTICE OF STRIKE IS
FORTHWITH TREATED AS A PREVENTIVE MEDIATION CASE,
MAY THE UNION LATER ON STAGE A STRIKE ON ACCOUNT OF
THE SAME DISPUTE? A. No. Once the dispute has been converted
into a preventive mediation case, the notice of strike is deemed dropped
from the dockets as if no notice of strike has been filed. Since there is no
more notice of strike to speak about, any strike subsequently staged by the
Union is deemed not to have complied with the requirements of a valid
strike. The same rule applies in the case of lockout by an employer, (PAL
vs. Sec. of Labor)
2. The Upon receipt of a valid notice of strike or lockout, the NCMB,
through its Conciliator-Mediators, shall call the parties to a conference
immediately, in order to actively assist them to explore all possibilities for
amicable settlement. To this end, the Conciliator-Mediator may
suggest/offer proposals as an alternative avenue for the resolution of their
disagreement/conflict which may not necessarily bind the parties. In the
event of failure in conciliation/mediation the parties shall be encouraged to
submit their dispute for voluntary arbitration.
3. STRIKE VOTE
Purpose of the Strike Vote: 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, discourage wildcat strikes, union bossism
and even corruption.
a. Give notice of the conduct of a strike vote to the NCMB
at least 24 hours the meeting for the said purpose. Reason: to inform the
NCMB of the intent of the union to conduct a strike vote; give the NCMB
ample time to decide on whether or not there is a need to supervise the
conduct of the strike vote to prevent acts of violence and/or conduct of the
strike vote; and, to give NCMB reasonable time to deploy the requisite
personnel.
b. A strike must be approved by a majority vote of the
members of the Union and a lockout must be approved by a majority vote
Personal Notes of Janine J. Sarausos
of the members of the Board of Directors of the Corporation or Association
or of the partners in a partnership, obtained by secret ballot in a meeting
called for that purpose. 153
c. A strike or lockout VOTE shall be reported (strike vote
report) to the NCMB-DOLE Regional Branch at least 7 days before the
intended strike or lockout subject to the cooling-off period.
PURPOSE OF THE STRIKE VOTE REPORT: To ensure that a strike
vote was indeed taken and in the event that the report is false, to afford the
members an opportunity to take the appropriate remedy before it is too late.
4. COOLING OFF AND 7-DAY STRIKE BAN
In the event the result of the strike/lockout ballot is filed within the
cooling-off period, the 7-day requirement shall be counted from the day
following the expiration of the cooling-off period. (NSFW vs. Ovejera,
G.R. No. 59743, May 31, 1982).
The 15 and 30 days FROM THE FILING OF THE NOTICE OF
STRIKE requirement is known as the Cooling-Off Period designed to
afford parties the opportunity to amicable resolve the dispute with the
assistance of the NCMB Conciliator/Mediator. Should the dispute remain
unsettled until the lapse of the required number of days from the mandatory
filing of the notice, the labor union may strike or the employer may
commence a lockout after having complied with the 7-day requirement for
the filing of the strike or lockout vote, as the case may be.
5. ACTUAL STRIKE: LAWFUL MEANS
Doctrine of means and purposes- valid purpose must concur with
lawful means for a strike to remain valid. Hence, strikers may not commit
any act of violence, coercion or intimidation, or obstruct the free ingress to
or egress from the employer’s premises for lawful purposes or obstruct
public thoroughfares. [however, when the acts of violence that attended the
strike were not pervasive, the strike may still be considered legal, and the
responsibility for the acts is individual, not collective (shell Oil Workers
Union vs. Shell Company, May 31, 1971).]
Rights of workers during the actual strike:
Page 137 of 145

a. Right against employers from obstructing, impending, impairing
by force, intimidation, etc. the strike;
b. Right against employment of strike-breakers;
c. Right against all prohibited acts.
WHAT IS A STRIKE AREA? A strike area includes: (a) the
establishment of the employer struck against including run-away shops,
factories or warehouses and other premises where members of the
bargaining unit carry out the operations and business of the employer, and
(b) the area immediately before points of entrance and exit of establishment
struck against.
IS THE INGRESS AND EGRESS OF THE ESTABLISHMENT PART
OF THE STRIKE AREA? No. Since it is not part of the strike area,
the same could not be blocked or picketed.
WHO IS A STRIKE-BREAKER? A strike-breaker means any
person who obstructs, impedes or interferes with by force, violence,
coercion, threats or intimidation any peaceful picket by employees during
any labor controversy.
Limitations provided by contract
Eg: no-strike clause in the CBA
Thus in the case of Panay Electric Company, Inc vs. NLRC, Oct. 4,
1995 the SC held that “No strike, no lock-out provision in the CBA is a
valid stipulation but may be invoked only by the employer when the strike
is economic in nature or one which is conducted to force wage or other
concessions from the employer that are not mandated to be granted by the
law itself. It would be inapplicable to prevent a strike which is grounded on
ULP.
The no-strike clause is not binding upon newly-certified bargaining
agent. The substitutionary doctrine cannot be invoked to support the
contention that a newly certified collective bargaining automatically
assumes all the personal undertakings—like the no-strike stipulation—in
Personal Notes of Janine J. Sarausos
the CBA made by the deposed union. When the deposed union bound itself
not to strike, it could not have validly bound also all other rival unions
existing in the bargaining unit in question. A union is an agent of the 153
employees, not of the other unions. To consider the newly certified
bargaining agent contractually bound to the no-strike stipulation would
therefore violate the legal maxim that res inter alios acta alios nec prodest
nec nocest.
WHAT ARE THE PROHIBITED ACTS AND PRACTICES?
1. Declaring a strike or lockout on grounds involving inter-union and
intra-union disputes or on issues brought to voluntary or compulsory
arbitration.
2. Declaring a strike or lockout without first having bargained
collectively or without first having filed the required notice or without the
necessary strike or lockout vote first having been obtained and reported to
the Regional Branch of the NCMB.
3. Declaring a strike or lockout in defiance of a cease-and-desist
order, or an order for the striking employees to return to work and for the
employer to accept the workers after assumption of jurisdiction by the
President or Secretary of Labor and Employment, or after certification or
submission of the dispute to compulsory or voluntary arbitration, or during
the pendency of a case involving the authorized grounds for the strike or
lockout.
4. Obstructing, impending or interfering with by force, violence,
coercion, threats or intimidation any peaceful picketing by employees
during any labor controversy or in the exercise of their right to self-
organization or collective bargaining, or aiding or abetting such obstruction
or interference.
5. Employing any strike breaker or being employed as a strike-
breaker.
6. No public official or employee, including officers and personnel of
the Armed Forces of the Philippines, of the Philippine National Police, or
any armed person shall bring in, introduce or escort, in any manner, any
individual who seeks to replace strikers in entering or leaving the premises
of a strike area, or work in place of strikers.
Page 138 of 145

Nothing herein shall be interpreted to prevent the aforementioned
officials, employees or peace officers from taking any measure necessary to
maintain peace and order and/or to protect life and property.
7. Stationary picket and the use of means like placing of objects to
constitute permanent blockade or to effectively close points of entry or exit
in company premises.
8. Any act of violence, coercion or intimidation by any picketer.
9. The obstruction of the free ingress to or egress from the
employer’s premises for lawful purposes.
10. Obstruction of public thoroughfares while engaged in picketing.
CAN THE PHILIPPINE NATIONAL POLICE (PNP) BE
DEPUTIZED TO ENFORCE ORDERS FROM THE DEPARTMENT
OF LABOR AND EMPLOYMENT? Yes. The Secretary of Labor
and Employment, the National Labor Relations Commission (NLRC) or
any Labor Arbiter may deputize the PNP to enforce any of its order, award
or decision.
IN CASE THE PNP IS DEPUTIZED TO ENFORCE ORDERS FROM
THE DEPARTMENT OF LABOR, WHAT WILL BE ITS ROLE?
In such a case, the role of the PNP is merely to assist the sheriff or the
appropriate DOLE Officers in enforcing the decision, award or order. It
shall maintain peace and order and public safety in the area where the
decision, award or order is to be enforced. It shall also give security to the
officers enforcing the decision, award or order. (Please see also Article 264
(d), Article 266 of the Labor Code, as amended, and Guidelines for the
Conduct of PNP During Strikes, Lockouts and Labor Disputes in General,
Oct. 22, 1987).
ART. 266, LC. Requirement for arrest and detention. - Except on
grounds of national security and public peace or in case of commission of a
crime, no union members or union organizers may be arrested or detained
for union activities without previous consultations with the Secretary of
Labor.
Personal Notes of Janine J. Sarausos
WHO HAS JURISDICTION TO DETERMINE THE LEGALITY OF
STRIKE AND LOCKOUT? 153
In general, the Labor Arbiter in the appropriate Arbitration Branch of
the National Labor Relations Commission has the power to determine
questions involving the legality or the illegality of a strike or lockout upon
the filing of a proper complaint and after due hearing.
Where the matter of legality or illegality of strike is raised in the
dispute over which the Secretary assumed jurisdiction or in disputes
certified by the Secretary to the Commission for compulsory arbitration, the
same may be resolved by the Secretary or the Commission, respectively.
(International Pharmaceuticals, Inc. vs. Secretary of Labor and Associated
Labor Union, G.R. No. 92981-83, January 9, 1992.)
CAN ANY PERSON PERFORMING ANY OF THE PROHIBITED
ACTIVITIES MENTIONED IN THE PROCEEDING PARAGRAPH
BE CHARGED BEFORE THE COURT? Yes. They may be charged
before the appropriate civil and criminal courts.
WHAT IS THE PENALTY IMPOSABLE? Any person violating
any of the provisions of Article 265 of the Labor Code (performing any of
the above prohibited activities) shall be punished by a fine of not exceeding
P500.00 and/or imprisonment for not less than one (1) day nor more than
six (6) months.
If the person so convicted is a foreigner, he shall be subjected to
immediate and summary deportation and will be permanently barred from
re-entering the country without the special permission of the President.
IS PARTICIPATION BY AN EMPLOYEE IN A STRIKE
SUFFICIENT GROUND FOR AN EMPLOYER TO TERMINATE
HIS EMPLOYMENT? No. The mere participation of a worker in
lawful strike shall not constitute sufficient ground for the termination of his
employment even if a replacement has been hired by the employer during
such lawful strike. However, any union officer who knowingly participates
in an illegal strike and any worker or union officer who knowingly
Page 139 of 145

participates in the commission of illegal acts during a strike may be
declared to have lost his employment status.
MAY A STRIKE/LOCKOUT BE ENJOINED/PREVENTED BY
LEGAL PROCESS? As a general rule, strikes and lockouts validly
declared enjoy the protection of law and cannot be enjoined unless illegal
acts are committed in the course of such strikes or lockouts. Ordinarily, the
law vests in the NLRC the authority to issue injunctions to restrain the
commission of illegal acts during strikes and pickets.
In the national interest cases, the certification or assumption of
jurisdiction by the Secretary of Labor over the dispute under Article 263(g)
of the Labor Code, as a amended, has the effect of automatically enjoining
the intended strike or lockout whether or not a corresponding return to
work order has been issued. The workers shall immediately return to work
and the employer shall immediately resume operations and re-admit all
workers under the same terms and conditions of employment prevailing
before the strike.
ASSUMPTION OF JURISDICTION BY THE SECRETARY OF
LABOR OR CERTIFICTION TO THE NLRC FOR COMPULSORY
ARBITRATION (ART. 263 (g):
WHEN PROPER. When, in his opinion, there exists a labor dispute
causing or likely to cause a strike or lockout in an industry indispensable to
the national interest, the SOLE may assume jurisdiction over the dispute
and decide it or certify the same to the Commission for compulsory
arbitration.
EFFECT. Such assumption or certification shall have the effect of
automatically enjoining the intended or impending strike or lockout as
specified in the assumption or certification order.
If one has already taken place at the time of assumption or certification,
all striking or locked out employees shall immediately return-to-work and
the employer shall immediately resume operations and readmit all workers
under the same terms and conditions prevailing before the strike or lockout.
The SOLE or the Commission may seek the assistance of law enforcement
Personal Notes of Janine J. Sarausos
agencies to ensure compliance with this provision as well as with such
orders as he may issue to enforce the same.
In line with the national concern for and the highest respect accorded to 153
the right of patients to life and health, strikes and lockouts in hospitals,
clinics and similar medical institutions shall, to every extent possible, be
avoided, and all serious efforts, not only by labor and management but
government as well, be exhausted to substantially minimize, if not prevent,
their adverse effects on such life and health, through the exercise, however
legitimate, by labor of its right to strike and by management to lockout.
DUTY OF THE PARTIES. In labor disputes adversely affecting the
continued operation of such hospitals, clinics or medical institutions, it shall
be the duty of the striking union or locking-out employer to provide and
maintain an effective skeletal workforce of medical and other health
personnel, whose movement and services shall be unhampered and
unrestricted, as are necessary to insure the proper and adequate protection
of the life and health of its patients, most especially emergency cases, for
the duration of the strike or lockout. In such cases, therefore, the SOLE may
immediately assume, within 24 hours from knowledge of the occurrence of
such a strike or lockout, jurisdiction over the same or certify it to the
Commission for compulsory arbitration.
LIMITATION TO PARTIES. For this purpose, the contending parties
are strictly enjoined to comply with such orders, prohibitions and/or
injunctions as are issued by the SOLE or the Commission, under pain of
immediate disciplinary action, including dismissal or loss of employment
status or payment by the locking-out employer of backwages, damages and
other affirmative relief, even criminal prosecution against either or both of
them.
The foregoing notwithstanding, the President of the Philippines shall
not be precluded from determining the industries that, in his opinion, are
indispensable to the national interest, and from intervening at any time and
assuming jurisdiction over any such labor dispute in order to settle or
terminate the same.
Note: Under Article 277(b) of the Labor Code, as amended, the SOLE
may suspend the effects of the termination pending resolution of the dispute
in the event of a prima facie finding by the appropriate official of the DOLE
before whom such dispute is pending that the termination may cause a
serious labor dispute or is in the implementation of a mass lay-off.
Page 140 of 145

RULE XXII- DO 40-03
CONCILIATION, STRIKES AND LOCKOUTS
Section 1. Conciliation of labor-management disputes. - The board may,
upon request of either ofboth parties or upon its own initiative, provide
conciliation-mediation services to labor disputes other than notices of
strikes or lockouts. Conciliation cases which are not subjects of notices of
strike or lockout shall be docketed as preventive mediation cases.
Section 2. Privileged communication. - Information and statements given
in confidence at conciliation proceedings shall be treated as privileged
communications. Conciliators and similar officials shall not testify in any
court or body regarding any matter taken up at conciliation proceedings
conducted by them.
Section 3. Issuance of subpoena. - The Board shall have the power to
require the appearance of any parties at conciliation meetings.
Section 4. Compromise Agreements. - Any compromise settlement,
including those involving labor standard laws, voluntarily agreed upon by
the parties with the assistance of the Board and its regional branches shall
be final and binding upon the parties. The National Labor Relations
Commission or any court shall not assume jurisdiction over issues involved
therein except in case of non-compliance thereof or if there is prima facie
evidence that the settlement was obtained through fraud, misrepresentation,
or coercion. Upon motion of any interested party, the Labor Arbiter in the
region where the agreement was reached may issue a writ of execution
requiring a sheriff of the Commission or the courts to enforce the terms of
the agreement.
Section 5. Grounds for strike or lockout. - A strike or lockout may be
declared in cases of bargaining deadlocks and unfair labor practices.
Violations of collective bargaining agreements, except flagrant and/or
malicious refusal to comply with its economic provisions, shall not be
considered unfair labor practice and shall not be strikeable. No strike or
Personal Notes of Janine J. Sarausos
lockout may be declared on grounds involving inter-union and intra-union
disputes without first having filed a notice of strike or lockout or without
the 153
necessary strike or lockout vote having been obtained and reported to the
Board. Neither will a strike be declared after assumption of jurisdiction by
the Secretary 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.
Section 6. Who may declare a strike or lockout. - Any certified or duly
recognized bargaining representative may declare a strike in cases of
bargaining deadlocks and unfair labor practices. The employer may declare
a lockout in the same cases. In the absence of a certified or duly recognized
bargaining representative, any legitimate labor organization in the
establishment may declare a strike but only on grounds of unfair labor
practices.
Section 7. Notice of strike or lockout. - In bargaining deadlocks, a notice
of strike or lockout shall be filed with the regional branch of the Board at
least thirty (30) days before the intended date thereof, a copy of said notice
having been served on the other party concerned. In cases of unfair labor
practice, the period of notice shall be fifteen (15) days. However, in case of
unfair labor practice involving the dismissal from employment of any union
officer duly elected in accordance with the union constitution and by-laws
which may constitute union-busting where the existence of the union is
threatened, the fifteen-day cooling-off period shall not apply and the union
may take action immediately after the strike vote is conducted and the
results thereof submitted to the appropriate regional branch of the Board.
Section 8. Contents of notice. - The notice shall state, among others, the
names and addresses of the employer and the union involved, the nature of
the industry to which the employer belongs, the number of union members
and of the workers in the bargaining unit, and such other relevant data as
may facilitate the settlement of the dispute, such as a brief statement or
enumeration of all pending labor disputes involving the same parties.
Page 141 of 145

In cases of bargaining deadlocks, the notice shall, as far as practicable,
further state the unresolved issues in the bargaining negotiations and be
accompanied by the written proposals of the union, the counter-proposals of
the employer and the proof of a request for conference to settle the
differences. In cases of unfair labor practices, the notice shall, as far as
practicable, state the acts complained of and the efforts taken to resolve the
dispute amicably.
In case a notice does not conform with the requirements of this and the
foregoing section/s, theregional branch of the Board shall inform the
concerned party of such fact.
Section 9. Action on Notice. - Upon receipt of the notice, the regional
branch of the Board shall exert all efforts at mediation and conciliation to
enable the parties to settle the dispute amicably. The regional branch of the
Board may, upon agreement of the parties, treat a notice as a preventive
mediation case.
It shall also encourage the parties to submit the dispute to voluntary
arbitration.
During the proceedings, the parties shall not do any act which may
disrupt or impede the early settlement of the dispute. They are obliged, as
part of their duty to bargain collectively in good faith and to participate
fully and promptly in the conciliation meetings called by the regional
branch of the Board.
A notice, upon agreement of the parties, may be referred to alternative
modes of dispute resolution, including voluntary arbitration.
Section 10. Strike or lockout vote. - 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 the
purpose. A decision to declare a lockout must be approved by a majority of
the Board of Directors of the employer, corporation or association or the
partners in a partnership obtained by a secret ballot in a meeting called for
the purpose.
The regional branch of the Board may, at its own initiative or upon
request of any affected party, supervise the conduct of the secret balloting.
Personal Notes of Janine J. Sarausos
In every case, the union or the employer shall furnish the regional branch of
the Board and the notice of meetings referred to in the preceding paragraph
at least twenty-four (24) hours before such meetings as well as the results of 153
the voting at least seven (7) days before the intended strike or lockout,
subject to the cooling-off period provided in this Rule.
Section 11. Declaration of strike or lockout. - Should the dispute remain
unsettled after the lapse of the requisite number of days from the filing of
the notice of strike or lockout and of the results of the election required in
the preceding section, the labor union may strike or the employer may lock
out its workers. The regional branch of the Board shall continue mediating
and conciliating.
Section 12. Improved offer balloting. - In case of a strike, the regional
branch of the Board shall, at its own initiative or upon the request of any
affected party, conduct a referendum by secret balloting on the improved
offer of the employer on or before the 30th day of strike. When at least a
majority of the union members vote to accept the improved offer, the
striking workers shall immediately return to work and the employer shall
thereupon re-admit them upon the signing of the agreement.
In case of a lockout, the regional branch of the Board shall also conduct
a referendum by secret balloting on the reduced offer of the union on or
before the 30th day of the lockout. When at least a majority of the board of
directors or trustees or the partners holding the controlling interest in the
case of partnership vote to accept the reduced offer, the workers shall
immediately return to work and the employer shall thereupon readmit them
upon the signing of the agreement.
Section 13. Peaceful picketing. - Workers shall have the right to peaceful
picketing. No person engaged in picketing shall commit any act of violence,
coercion or intimidation or obstruct the free ingress to or egress from the
employer's premises for lawful purposes, or obstruct public thoroughfares.
No person shall obstruct, impede or interfere with, by force, violence,
coercion, threats or intimidation, any peaceful picketing by workers during
any labor controversy or in the exercise of the right to self-organization or
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collective bargaining or shall aid or abet such obstruction or interference.
No employer shall use or employ any person to commit such acts nor shall
any person be employed for such purpose.
Section 14. Injunctions (freedom at the workplace). - No court or entity
shall enjoin any picketing, strike or lockout, except as provided in Articles
218 and 263 of the Labor Code.
The Commission shall have the power to issue temporary restraining
orders in such cases but only after due notice and hearing and in accordance
with its rules. The reception of evidence for the application of a writ of
injunction may be delegated by the Commission to any Labor Arbiter who
shall submit his recommendations to the Commission for its consideration
and resolution.
Any ex parte restraining order issued by the Commission, or its
chairman or Vice-Chairman where the Commission is not in session and as
prescribed by its rules, shall be valid for a period not exceeding twenty (20)
days.
[ART. 218. Powers of the Commission. - (e) To enjoin or restrain any actual
or threatened commission of any or all prohibited or unlawful acts or to
require the performance of a particular act in any labor dispute which, if not
restrained or performed forthwith, may cause grave or irreparable damage
to any party or render ineffectual any decision in favor of such party:
Provided, That no temporary or permanent injunction in any case involving
or growing out of a labor dispute as defined in this Code shall be issued
except after hearing the testimony of witnesses, with opportunity for cross-
examination, in support of the allegations of a complaint made under oath,
and testimony in opposition thereto, if offered, and only after a finding of
fact by the Commission, to the effect:
(1) That prohibited or unlawful acts have been threatened and will be
committed and will be continued unless restrained, but no injunction or
temporary restraining order shall be issued on account of any threat,
prohibited or unlawful act, except against the person or persons, association
or organization making the threat or committing the prohibited or unlawful
Personal Notes of Janine J. Sarausos
act or actually authorizing or ratifying the same after actual knowledge
thereof;
(2) That substantial and irreparable injury to complainant’s property will 153
follow;
(3) That as to each item of relief to be granted, greater injury will be
inflicted upon complainant by the denial of relief than will be inflicted upon
defendants by the granting of relief;
(4) That complainant has no adequate remedy at law; and
(5) That the public officers charged with the duty to protect complainant’s
property are unable or unwilling to furnish adequate protection.
Art. 263. Certified cases on strikes to industries indispensible to national
interest]
Section 15. Criminal prosecution. - The regular courts shall have
jurisdiction over any criminal action under Article 272 of the Labor Code.
UNFAIR LABOR PRACTICE
I. CONCEPT
ART. 247. Concept of unfair labor practice and procedure for
prosecution thereof. - 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 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.
Subject to the exercise by the President or by the SOLE of the powers
vested in them by Articles 263 and 264 of this Code, the civil aspects of all
cases involving unfair labor practices, which may include claims for actual,
moral, exemplary and other forms of damages, attorney’s fees and other
affirmative relief, shall be under the jurisdiction of the Labor Arbiters. The
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Labor Arbiters shall give utmost priority to the hearing and resolution of all
cases involving unfair labor practices. They shall resolve such cases within
thirty (30) calendar days from the time they are submitted for decision.
Recovery of civil liability in the administrative proceedings shall bar
recovery under the Civil Code.
No criminal prosecution under this Title may be instituted without a
final judgment finding that an unfair labor practice was committed, having
been first obtained in the preceding paragraph. During the pendency of such
administrative proceeding, the running of the period of prescription of the
criminal offense herein penalized shall be considered interrupted: Provided,
however, that the final judgment in the administrative proceedings shall not
be binding in the criminal case nor be considered as evidence of guilt but
merely as proof of compliance of the requirements therein set forth. (As
amended by Batas Pambansa Bilang 70, May 1, 1980 and later further
amended by Section 19, Republic Act No. 6715, March 21, 1989).
Essence of ULP- ULP are acts to restrain, coerce, discriminate against
or unduly interfere with the exercise of right of self-organization. In ULP, it
is the RIGHT TO SELF-ORGANIZATION that is under siege.
ELEMENTS OF ULP:
1. Employer-employee relationship between offender and offended;
2. Act done is expressly defined by the Labor Code as an act of unfair
labor practice---Art. 248 for employer; Art. 249 for a labor organization.
II. UNFAIR LABOR PRACTICES OF EMPLOYERS
ART. 248. Unfair labor practices of employers. - 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;
(b) To require as a condition of employment that a person or an
employee shall not join a labor organization or shall withdraw from one to
which he belongs (yellow-dog contract) [note: may be committed against a
prospective employee. The provision uses the phrase “person or
employee”];
Personal Notes of Janine J. Sarausos
(c) 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 rights to self-organization; 153
(d) To initiate, dominate, assist or otherwise interfere with the
formation or administration of any labor organization, including the giving
of financial or other support to it or its organizers or supporters;
(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 242, paragraph (o) of this Code shall not apply to the non-
members of the recognized collective bargaining agent;
(f) To dismiss, discharge or otherwise prejudice or discriminate against
an employee for having given or being about to give testimony under this
Code;
(g) To violate the duty to bargain collectively as prescribed by this
Code;
(h) To pay negotiation or attorney’s 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
(i) To violate a collective bargaining agreement.
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. (As amended by Batas Pambansa Bilang 130, August
21, 1981).
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 Personal Notes of Janine J. Sarausos

III. UNFAIR LABOR PRACTICES OF LABOR ORGANIZATIONS

ART. 249. Unfair labor practices of labor organizations. - It shall be
unfair labor practice for a labor organization, its officers, agents or 153
representatives:
(a) To restrain or coerce employees in the exercise of their right to self-
organization. However, a labor organization shall have the right to prescribe
its own rules with respect to the acquisition or retention of membership;
(b) To cause or attempt to cause an employer to discriminate against an
employee, including discrimination against an employee with respect to
whom membership in such organization has been denied or to terminate an
employee on any ground other than the usual terms and conditions under
which membership or continuation of membership is made available to
other members;
(c) To violate the duty, or refuse to bargain collectively with the
employer, provided it is the representative of the employees;
(d) To cause or attempt to cause an employer to pay or deliver or agree
to pay or deliver any money or other things of value, in the nature of an
exaction, for services which are not performed or not to be performed,
including the demand for fee for union negotiations;
(e) To ask for or accept negotiation or attorney’s fees from employers
as part of the settlement of any issue in collective bargaining or any other
dispute; or
(f) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the
officers, members of governing boards, representatives or agents or
members of labor associations or organizations who have actually
participated in, authorized or ratified unfair labor practices shall be held
criminally liable. (As amended by Batas Pambansa Bilang 130, August 21,
1981).

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