2019 BOC Labor Law Reviewer PDF
2019 BOC Labor Law Reviewer PDF
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LABOR LAW
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4. Bars to a Certificate Election ............... 118 3. Money claims cognizable by the Regional
Director ........................................................... 188
D. Rights of a Labor Organization ........... 121
G. Retirement ............................................. 189
1. Check off, Assessment, Agency Fees .. 121
1. Eligibility ................................................ 189
2. Collective Bargaining ............................ 122
2. Amount of Retirement Pay .................. 189
E. Unfair Labor Practice (ULP)................ 131
3. Retirement Benefits of Workers Who are
1. Nature, Aspect....................................... 131 Paid By Results ............................................... 190
2. ULP by Employers ............................... 131 4. Retirement Benefit of Part-Time Workers
3. ULP of Labor Organizations ............... 137 190
F. Peaceful Concerted Activities .............. 138 5. Non-Taxable.......................................... 191
1. Strike....................................................... 139 VII. MANAGEMENT PREROGATIVE
192
2. Picketing................................................. 146 A. Discipline ............................................... 194
3. Lockouts ................................................ 147 B. Transfer of Employees ......................... 194
VI. POST-EMPLOYMENT ................ 149 C. Productivity Standard ........................... 195
A. Employer-Employee Relationship....... 149
D. Bonus ..................................................... 195
1. Tests to Determine Employer-Employee
(ER-EE) Relationship.................................... 149 E. Change of Working Hours ................... 195
2. Kinds of Employment .......................... 151 F. Bonafide Occupational Qualifications 195
3. Legitimate subcontracting v. Labor-Only G. Post-Employment Restrictions ............ 196
Contracting ..................................................... 160 VIII. JURISDICTION AND REMEDIES
B. Termination by Employer .................... 164 197
A. Labor Arbiter......................................... 197
1. Just Causes ............................................. 166
1. Jurisdiction ............................................. 197
2. Authorized Causes ................................ 172
2. Versus Regional Director [Art. 129] .... 197
3. Due Process ........................................... 176
3. Requirements to Perfect Appeal to NLRC
C. Termination of Employment by Employee 198
179
4. Reinstatement Pending Appeal ............ 198
1. Resignation vs. Constructive Dismissal
179 B. National Labor Relations Commission
(NLRC) ................................................................ 199
D. Preventive Suspension .......................... 181
1. Jurisdiction/Powers .............................. 199
E. Reliefs for Illegal Dismissal .................. 182
2. Remedies ................................................ 199
1. Reinstatement ........................................ 182
C. Judicial Review of Labor Rulings......... 202
2. Options given to employers: ................ 182
1. Court of Appeals ................................... 202
3. Backwages .............................................. 184
2. Supreme Court ...................................... 202
4. Damages and Attorney’s Fees.............. 185
D. Bureau of Labor Relations (BLR) ........ 203
5. Separation Pay ....................................... 185
1. Jurisdiction ............................................. 203
F. Money claims arising from employer-
employee .............................................................. 187 2. Appeals................................................... 204
1. Money claims cognizable by the Labor 3. Administrative Functions of the BLR . 204
Arbiter ............................................................. 187 E. National Conciliation and Mediation
Board (NCMB).................................................... 205
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Mutual obligation
Art. 1702, Civil Code. In case of doubt, all The employer's obligation to give his workers just
legislation and all labor contracts shall be construed compensation and treatment carries with it the
in favor of the safety and decent living for the corollary right to expect from the workers adequate
laborer. work, diligence and good conduct. [Judy Philippines, Inc.
v NLRC, G.R. No. 111934 (1998)]
In general
When there is doubt between the evidence submitted Compliance with law
by the employer and that submitted by the employee, It is also important to emphasize that the return-to-
the scales of justice must be tilted in favor of the work order not so much confers a right as it imposes
employee. This is consistent with the rule that an a duty; and while as a right it may be waived, it must
employer’s cause could only succeed on the strength be discharged as a duty even against the worker's will.
of its own evidence and not on the weakness of the [Sarmiento v. Tuico, G.R. No. 75271 (1988)]
employee’s evidence. [Misamis Oriental II Electric Service
Cooperative v. Virgilio Cagalawan, G.R. No. 175170 Employee's compliance and obedience to
(2012)] employer's orders
The lack of a written or formal designation should not
Liberal Construction be an excuse to disclaim any responsibility for any
damage suffered by the employer due to his
Of the laws negligence. The measure of the responsibility of an
Art. 4 of the Labor Code mandates that all doubts in employee is that if he performed his assigned task
the implementation and interpretation of the efficiently and according to the usual standards, then
provisions thereof shall be resolved in favor of labor. he may not be held personally liable for any damage
This is merely in keeping with the spirit of our arising therefrom. Failing in this, the employee must
Constitution and laws which lean over backwards in suffer the consequences of his negligence if not lack
favor of the working class, and mandate that every of due care in the performance of his duties. [PCIB v.
doubt must be resolved in their favor.” [Hocheng Jacinto, G.R. No. 92742 (1991)]
Philippines Corporation v. Farrales, G.R. No. 211497
(2015)]
Of labor contracts
While the terms and conditions of a CBA constitute
the law between the parties, it is not however, an
ordinary contract to which is applied the principles of
law governing ordinary contracts. A CBA, as a labor
contract within the contemplation of Art. 1700 of the
Civil Code of the Philippines which governs the
relations between labor and capital, is not merely
contractual in nature but impressed with public
interest, thus, it must yield to the common good. As
such, it must be construed liberally rather than
narrowly and technically, and the courts must place a
practical and realistic construction upon it, giving due
consideration to the context in which it is negotiated
and purpose which it is intended to serve. [Cirtek
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designed to liberate the worker from oppressive employment abroad to two or more persons shall be
terms and conditions of employment; deemed so engaged. [Sec. 5, RA 10022]
5. To influence or to attempt to influence any
person or entity not to employ any worker who 1. First type: Non-licensee/non-holder of authority
has not applied for employment through his a. Person charged undertakes any recruitment
agency; activity as defined in Art. 13 (b) of the Labor
6. To engage in the recruitment or placement of Code; and
workers in jobs harmful to public health or b. Said person does not have a license or
morality or to the dignity of the Republic of the authority to do so. [People v. Sison, G.R. No.
Philippines; 187160 (2017)]
7. To obstruct or attempt to obstruct inspection by
the Secretary of Labor or by his duly authorized 2. Second type: Licensee/non-licensee or holder of
representatives; authority/non-holder of authority
8. To fail to file reports on the status of a. Person charged commits any of the
employment, placement vacancies, remittance of enumerated prohibited acts under Sec. 6 of
foreign exchange earnings, separation from jobs, R.A. 8042, as amended by, R.A. 10022;
departures and such other matters or information b. It is immaterial whether he is a holder or not
as may be required by the Secretary of Labor. of any license or authority [People v. Sison,
9. To substitute or alter employment contracts supra]
approved and verified by the Department of
Labor from the time of actual signing thereof by Other prohibited acts under Sec. 6
the parties up to and including the periods of It shall likewise include the following acts, whether
expiration of the same without the approval of committed by any person, whether a non-licensee,
the Secretary of Labor; non-holder, licensee or holder of authority:
10. To become an officer or member of the Board of 1. To charge or accept directly or indirectly any
any corporation engaged in travel agency or to be amount greater than that specified in the
engaged directly or indirectly in the management schedule of allowable fees prescribed by the
of a travel agency; and Secretary of Labor and Employment, or to make
11. To withhold or deny travel documents from a worker pay or acknowledge any amount greater
applicant workers before departure for monetary than that actually received by him as a loan or
or financial considerations other than those advance;
authorized under this Code and its implementing 2. To furnish or publish any false notice or
rules and regulations. [Art. 34] information or document in relation to
recruitment or employment;
Profit or lack thereof is immaterial 3. To give any false notice, testimony, information
The act of recruitment may be "for profit or not." or document or commit any act of
Notably, it is the lack of the necessary license or misrepresentation for the purpose of securing a
authority, not the fact of payment that renders the license or authority under the Labor Code, or for
recruitment activity of the agency unlawful. [cf. Sharp the purpose of documenting hired workers
v. Espanol, G.R. No. 155903 (2007)] with the POEA, which include the act of
reprocessing workers through a job order
b. Illegal recruitment of Migrant Workers that pertains to nonexistent work, work
[governed by RA 8042, as amended by RA different from the actual overseas work, or
10022] work with a different employer whether
registered or not with the POEA;
Illegal Recruitment shall mean any act of 4. To include or attempt to induce a worker already
canvassing, enlisting, contracting, transporting, employed to quit his employment in order to
utilizing, hiring, or procuring workers and includes offer him another unless the transfer is designed
referring, contract services, promising or advertising to liberate a worker from oppressive terms and
for employment abroad, whether for profit or not, conditions of employment;
when undertaken by non-licensee or non-holder of 5. To influence or attempt to influence any person
authority contemplated under Art. 13(f) of or entity not to employ any worker who has not
Presidential Decree No. 442, as amended, otherwise applied for employment through his agency or
known as the Labor Code of the Philippines: who has formed, joined or supported, or has
Provided, That any such non-licensee or non-holder contacted or is supported by any union or
who, in any manner, offers or promises for a fee workers' organization;
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6. To engage in the recruitment or placement of which will be used for payment of legal and
workers in jobs harmful to public health or allowable placement fees and make the migrant
morality or to the dignity of the Republic of the worker issue, either personally or through a
Philippines; guarantor or accommodation party, postdated
7. To obstruct or attempt to obstruct inspection by checks in relation to the said loan;
the Secretary of Labor and Employment or by his 2. Impose a compulsory and exclusive arrangement
duly authorized representative whereby an overseas Filipino worker is required
8. To fail to submit reports on the status of to avail of a loan only from specifically designated
employment, placement vacancies, remittance of institutions, entities or persons;
foreign exchange earnings, separation from jobs, 3. Refuse to condone or renegotiate a loan incurred
departures and such other matters or information by an overseas Filipino worker after the latter's
as may be required by the Secretary of Labor and employment contract has been prematurely
Employment; terminated through no fault of his or her own;
9. To substitute or alter to the prejudice of the 4. Impose a compulsory and exclusive arrangement
worker, employment contracts approved and whereby an overseas Filipino worker is required
verified by the Department of Labor and to undergo health examinations only from
Employment from the time of actual signing specifically designated medical clinics,
thereof by the parties up to and including the institutions, entities or persons, except in the case
period of the expiration of the same without the of a seafarer whose medical examination cost is
approval of the Department of Labor and shouldered by the principal/shipowner;
Employment; 5. Impose a compulsory and exclusive arrangement
10. For an officer or agent of a recruitment or whereby an overseas Filipino worker is required
placement agency to become an officer or to undergo training, seminar, instruction or
member of the Board of any corporation engaged schooling of any kind only from specifically
in travel agency or to be engaged directly or designated institutions, entities or persons,
indirectly in the management of travel agency; except for recommendatory trainings mandated
11. To withhold or deny travel documents from by principals/shipowners where the latter
applicant workers before departure for monetary shoulder the cost of such trainings;
or financial considerations, or for any other 6. For a suspended recruitment/manning agency to
reasons, other than those authorized under the engage in any kind of recruitment activity
Labor Code and its implementing rules and including the processing of pending workers'
regulations; applications; and
12. Failure to actually deploy a contracted worker 7. For a recruitment/manning agency or a foreign
without valid reason as determined by the principal/employer to pass on the overseas
Department of Labor and Employment; Filipino worker or deduct from his or her salary
13. Failure to reimburse expenses incurred by the the payment of the cost of insurance fees,
worker in connection with his documentation premium or other insurance related charges, as
and processing for purposes of deployment, in provided under the compulsory worker's
cases where the deployment does not actually insurance coverage. [Sec. 6, RA 8042 as amended]
take place without the worker's fault. Illegal
recruitment when committed by a syndicate or in Effect of license
large scale shall be considered an offense By its terms, persons who engage in "canvassing,
involving economic sabotage; and enlisting, contracting, transporting, utilizing, hiring, or
14. To allow a non-Filipino citizen to head or procuring workers" without the appropriate
manage a licensed recruitment/manning agency government license or authority are guilty of illegal
[Sec. 6, RA 8042] recruitment whether or not they commit the wrongful
acts enumerated in that section. On the other hand,
Note: Underlined parts differ from those stated in the recruiters who engage in the canvassing, enlisting, etc.
prohibited practices under the Labor Code [See also of OFWs, although with the appropriate government
Art. 34] license or authority, are guilty of illegal recruitment
only if they commit any of the wrongful acts
Prohibited acts added by the amendment enumerated in Section 6. [Sto. Tomas v. Salac, G.R. No.
In addition to the acts enumerated above, it shall also 152642 (2012)]
be unlawful for any person or entity to commit the
following prohibited acts: Even the mere employee of a company or
1. Grant a loan to an overseas Filipino worker with corporation engaged in illegal recruitment could be
interest exceeding eight percent (8%) per annum, held liable, along with the employer, as a principal in
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Act Penalty
Imprisonment: 6 yrs. and 1 day –
Prohibited 12 yrs.
Act/s AND
Fine: P500k – P1M
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aforesaid claims and damages. [Sec. 10, RA 8042, as knowledge of the former of existing labor and social
amended] legislation in the Philippines is binding on the latter.
Consequently, notice to the former of any violation
The written application for a license to operate a thereof is notice to the latter.
private employment agency shall be submitted with,
among others, a duly notarized undertaking stating However, notice to the principal is not notice to the
that the applicant: agent. The SC held in Sunace International Management
1. Shall assume full and complete responsibility Services, Inc. v. NLRC [G.R. 161757 (2006)] that “the
for all claims and liabilities which may arise in theory of imputed knowledge ascribes the knowledge
connection with the use of the license; of the agent to the principal, not the other way
2. Assume joint and several liability with the around. The knowledge of the principal-foreign
employer for all claims and liabilities which may employer cannot, therefore, be imputed to its agent.”
arise in connection with the implementation of the
contract, including but not limited to unpaid 3. Termination of Contract of
wages, death and disability compensation and
repatriation; Migrant Worker Without Just
3. Assume full and complete responsibility for all
acts of its officers, employees and representatives
Cause
done in connection with recruitment and
placement [Part II, Rule II, Sec. 4 (f) (7-9), 2016 In case of termination of overseas employment,
Revised POEA Rules and Regulations] a. without just, valid or authorized cause as defined
by law or contract, or
In case of a corporation or partnership, a duly b. any unauthorized deductions from the migrant
notarized undertaking by the corporate officers and worker's salary
directors, or partners, that they shall be jointly and
severally liable with the corporation or partnership for ...shall entitle the worker to full reimbursement of:
claims and/or damages that may be awarded to the a. his placement fee and the deductions made with
workers is also required. [Part II, Rule II, Sec. 4 (g), interest at twelve percent (12%) per annum;
2016 Revised POEA Rules and Regulations] AND,
b. his salaries for the unexpired portion of his
Purpose of Solidary Liability employment contract [or for three (3) months for
The fact that the manning agency and its principal every year of the unexpired term, whichever is
have already terminated their agency agreement does less*] [Sec. 10, RA 8042, as amended by RA
not relieve the former of its liability. The agency 10022]
agreement with the principal even if ended as between
them, still extends up to and until the expiration of, Rule before Serrano (1995-2009): 3-month salary
the employment contracts of the employees recruited rule applied
and employed pursuant to the said recruitment The employment contract involved in the instant case
agreement. Otherwise, this will render nugatory the covers a two-year period but the overseas contract
very purpose for which the law governing the worker actually worked for only 26 days prior to his
employment of workers for foreign jobs abroad was illegal dismissal. Thus, the three months’ salary rule
enacted, that is, to assure aggrieved workers of applies [Flourish Maritime Shipping v. Almanzor, G.R.
immediate and sufficient payment of what is due No. 177948 (2008)]
them. [OSM Shipping Phil, Inc. v. NLRC, G.R. No.
138193 (2003)] Rule after Serrano: invalidated the 3-month salary
cap clause
The SC there held that “said clause is unconstitutional
d. Theory of Imputed Knowledge for being an invalid classification, in violation of the
equal protection clause”. [Serrano v. Gallant Maritime
This is a doctrine in agency which states that the Services, Inc., G.R. No. 167614 (2009)]
principal is chargeable with and bound by the
knowledge of or notice to his agent received while the In the case of Yap v. Thenamaris Ship’s Management and
agent was acting as such. Simply put, notice to the Intermare Maritime Agencies, Inc. [G.R. No. 179532
agent is notice to the principal. (May 30, 2011)], the SC affirmed the Serrano ruling,
but did not apply the Operative Fact doctrine: “As an
Since the local employment agency is considered the exception to the general rule, the doctrine applies only
agent of the foreign employer, the principal, as a matter of equity and fair play.”
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5. Regulations of Recruitment
Note: In 2010, a year after Serrano, RA 10022, in
amending RA 8042, reincorporated the nullified 3- and Placement Activities
month salary cap clause. However, the SC did not
allow this and again struck the revived clause as Note: No. 5 is not in the 2019 bar syllabus.
unconstitutional in the 2014 case of Sameer
Overseas Placement Agency v. Cabiles [G.R. No. a. Local
170139, (August 05, 2014)]. There, the SC said that:
“when a law or a provision of law is null because it is License and Authority
inconsistent with the Constitution, the nullity cannot License – is a document issued by the Department
be cured by reincorporation or reenactment of the of Labor and Employment (DOLE) authorizing a
same or a similar law or provision. A law or provision person or entity to operate a private employment
of law that was already declared unconstitutional agency, while an authority is a document issued by
remains as such unless circumstances have so the DOLE authorizing a person or association to
changed as to warrant a reverse conclusion.” Hence, engage in recruitment and placement activities as a
the case of Serrano holds as binding precedent, even private recruitment agency. [Art. 13(d) and (f); Sec. 3
after the passage of RA 10022. (h)(g), DO 141-14]
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Any transfer of business address, appointment or recruitment, or for crimes involving moral
designation of any agent or representative including turpitude;
the establishment of additional offices anywhere shall b. Those agencies whose licenses have been
be subject to the prior approval of the Department of revoked for violation of RA 8042, PD 442,
Labor. [Art. 29] RA 9208, and their IRRs;
c. Those agencies whose licenses have been
Citizenship requirement cancelled, or those who, pursuant to the
The applicant must be a Filipino citizen for single order of the Administrator, were included in
proprietorship. If the applicant is a partnership or the list of persons with derogatory record for
corporation, iseventy five percent (75%) of the violation of recruitment laws and regulations
authorized capital stock must be owned and 6. Any official employee of the DOLE, POEA,
controlled by Filipino citizens. [Sec. 4(a), DO 141-14] OWWA, DFA, DOJ, DOH, BI, IC, NLRC,
TESDA, CFO, NBI, PNP, Civil Aviation
Capitalization requirement Authority of the Philippines, international airport
All applicants for authority to hire or renewal of authorities, and other government agencies
license to recruit are required to have such substantial directly involved in the implementation of RA
capitalization as determined by the Secretary of 8042, as amended, and/or any of his/her
Labor. [Art. 28] relatives within the fourth civil degree of
consanguinity or affinity. [Part II, Rule I, Sec. 3,
The applicant for a license to operate a private 2016 Revised POEA Rules and Regulations]
employment agency must have a minimum net worth
of P1,000,000.00 in case of single proprietorship and Non-transferability of license or authority
a minimum paid up capital of P1,000,000.00 in case 1. No license shall be used, directly or indirectly, by
of partnership and corporation. [Sec. 4(b), DO 141- any person other than the one in whose favor it
14] was issued, nor at any place other than that stated
in the license;
b. Migrant 2. Nor may such license be transferred, conveyed or
assigned to any other person or entity. [Sec. 21,
Entities disqualified from Engaging or Revised POEA Rules]
Participating in the Business of Recruitment and
Placement of Workers for Overseas Employment Enforceability of the license
1. Travel agencies and sales agencies of airline Licensed agencies are prohibited from conducting any
companies, whether for profit or not. [Art. 26] recruitment activities of any form outside of the
2. Officers or members of the Board of any address stated in the license, acknowledged branch or
corporation or partners in a partnership engaged extension office, without securing prior authority
in the business of a travel agency; from the POEA. [People v. Buli-e, G.R. No. 123146
3. Corporations and partnerships, where any of its (2003)]
officers, members of the board or partners is also
an officer, member of the board or partner of a Duration of Validity
corporation or partnership engaged in the A provisional license shall be valid for a period of 2
business of a travel agency; years (non-extendible) from the date of issuance.
4. Individuals, partners, officers, or directors of an During the validity of which, the lincensee shall not
insurance company who make, propose or deploy domestic workers.
provide an insurance contract under the
compulsory insurance coverage for agency-hired Upon application, the provisional license may be
OFWs; upgraded to a regular license that shall be valid from
5. Sole proprietors, partners or officers and 4 years from the date of issuance of the provisional
members of the board with derogatory records, license. The application for upgrading of the
such as, but not limited to the ff: provisional license shall be filed within three (3)
a. Those convicted or against whom probable months before the expiration of the provisional
cause or prima facie finding of guilt is license. [2016 Revised POEA Rules and Regulations]
determined by a competent authority for
illegal recruitment or for other related crimes
or offenses committed in the course of,
related to, or resulting from, illegal
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B. Employment of Non-
Sec. 2, D.O. No. 186-17. Exemption – The
Resident Aliens following categories of foreign nationals are
exempt from securing an alien employment
Sec. 12, Art. XII, Constitution. The State shall permit:
promote the preferential use of Filipino labor, a. All members of the diplomatic service and
domestic materials and locally produced goods, and foreign government officials accredited by and
adopt measures that help make them competitive. with reciprocity arrangement with the
Philippine government;
b. Officers and staff of international
Art. 12, Labor Code. Statement of objectives. – organizations of which the Philippine
It is the policy of the State: government is a member, and their legitimate
xxx spouses desiring to work in the Philippines;
e. To regulate the employment of aliens, c. Owners and representatives of foreign
including the establishment of a registration principals whose companies are accredited by
and/or work permit system; the Philippine Overseas Employment
Administration (POEA), who come to the
Philippines for a limited period and solely for
1. Coverage the purpose of interviewing Filipino applicants
for employment abroad;
d. Foreign national who come to the Philippines
Art. 40, Labor Code. Employment permit of to teach, present and/or conduct research
non-resident aliens. – Any alien seeking studies in universities and colleges as visiting,
admission to the Philippines for employment exchange or adjunct professors under formal
purposes and any domestic or foreign employer agreements between the universities or
who desires to engage an alien for employment in colleges in the Philippines and foreign
the Philippines shall obtain an employment permit universities or colleges; or between the
from the Department of Labor. Philippine government and foreign
government: provided that the exemption is on
The employment permit may be issued to a non- a reciprocal basis;
resident alien or to the applicant employer after a e. Permanent resident foreign nationals,
determination of the non-availability of a person in probationary or temporary resident visa
the Philippines who is competent, able and willing holders under Sec. 13 (a-f) of the Philippine
at the time of application to perform the services Immigration Act of 1940 and Section 3 of the
for which the alien is desired. Alien Social Integration Act of 1995 (RA
7917);
For an enterprise registered in preferred areas of f. Regugees and stateless persons recognized by
investments, said employment permit may be DOJ pursuant to Article 17 of the UN
issued upon recommendation of the government Convention and Protocol Relating to status of
agency charged with the supervision of said Refugees and Stateless Persons; and
registered enterprise. g. All foreign nationals granted exemption by
law.
Sec. 1, D.O. No. 186-17. Coverage. All foreign
nationals who intend to engage in gainful Sec. 3, D.O. No. 186-17. Exclusion. – The
employment in the Philippines shall apply for Alien following categories of foreign nationals are
Employment Permit. excluded from securing employment permit:
a. Members of the governing board with voting
As used in this Rule, gainful employment shall refer rights only and do not intervene in the
to a state or condition that creates an employer- management of the corporation or in the day
employee relationship between the Philippine to day operation of the enterprise.
based employer and the foreign national where the b. President and Treasurer, who are part-owner
former has the power to hire or dismiss the foreign of the company.
national from employment, pays the salaries or c. Those providing consultancy services who do
wages thereof and has authority to control the not have employers in the Philippines.
performance or conduct of the tasks and duties.
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d. Intra corporate transferee who is a manager, 3. Must be employed by the foreign service
executive or specialist as defined below in supplier for at least one year prior to the
accordance with Trade Agreements and an supply of service in the Philippines.
employee of the foreign service supplier for at f. Representative of the Foreign
least one (1) year continuous employment Principal/Employer assigned in the Office of
prior to deployment to a branch, subsidiary, Licensed Manning Agency (OLMA) in
affiliate, or representative office in the accordance with the POEA law, rules and
Philippines. regulations.
1. an Executive: a natural person within the
organization who primarily directs the Art. 40 of the Labor Code which requires
management of the organization and employment permit refers to non-resident aliens.
exercises wide latitude in decision making Resident aliens do not fall within the ambit of the
and receives only general supervision or provision [Almodiel v. NRLC, 223 SCRA 341 (1993)]
direction from higher level executives, the
board of directors, or stockholders of the An alien cannot file a labor complaint without having
business; an executive would not directly obtained an employment permit. If such complaint is
perform tasks related to the actual filed, it shall be dismissed. [Andrew James McBurnie v.
provision of the service or services of the Eulalio Ganzon, 707 SCRA 646 (2013)]
organization;
2. a Manager: a natural person w/in the Certificate of Exclusion
organisation who primarily directs the All foreign nationals excluded from securing AEP
organisation/department/subdivision shall secure Certificate of Exclusion from the
and exercises supervisory and control Regional Office. Further, Regional Offices shall issue
functions over other supervisory, the Certificate of Exclusion within two (2) working
managerial or professional staff; does not days after receipt of complete documentary
include first line supervisors unless requirements and fees. [Section 4, D.O. No. 186-17]
employees supervised are professionals;
does not include employees who
primarily perform tasks necessary for the
2. Conditions for Grant of
provision of the service; or Permit
3. a Specialist: a natural person within the
organisation who possesses knowledge at Procedure in the Processing of Applications for
an advanced level of expertise essential to AEP
the establishment/provision of the a. All applications for AEP shall be filed and
service and/or possesses proprietary processed at the DOLE Regional Office or
knowledge of the organisation’s service, Field Office having jurisdiction over the
research equipment, techniques or intended place of work. A duly accomplished
management; may include, but is not application form with the ff. complete
limited to, members of a licensed documentary requirements must be submitted.
profession. i. Photocopy of passport with visa, or Cert
All other intra-corporate transferees not within of Recognition for Refugees or Stateless
these categories as defined above are required to Persons
secure an AEP prior to their employment in the ii. Original copy of notarized appointment
Philippines. or contract of employment enumerating
e. Contractual service supplier who is a manager, the duties and responsibilities, annual
executive, or specialist and an employee of a salary, and other benefits of the foreign
foreign service supplier which has no national
commercial presence in the Philippines iii. Photocopy of Mayor’s Permit to operate
1. Who enters the Philippines temporarily business, in case of locators in economic
to supply a service pursuant to a contract zones, certification from the PEZA or
between his/her employer and a service the Ecozone Authority that the
consumer in the Philippines company is located and operating within
2. Must possess the appropriate the ecozone, while in case of a
educational and professional construction company, photocopy of
qualifications; and license from PCAB or D.O. No. 174-17
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U.P. LAW BOC PRE-EMPLOYMENT LABOR LAW
Registration should be submitted in lieu All fees covered by official receipt issued by the
of Mayor’s Permit; and Regional Office are nonrefundable. [Sec. 6, D.O. No.
iv. Business Name Registration and 186-17]
Application Form with the Department
of Trade and Industry (DTI) or SEC Labor Market Test; Objections
Registration and GIS; The DOLE Regional Office shall publish in a
v. If the position title of the foreign newspaper of general circulation all applications
national is included in the list of for new AEP, change or additional position in the
regulated professions, a Special same company or subsequent assignment in related
Temporary Permit (STP) from the companies within 2 working days from receipt of
Professional Regulations Commission application.
(PRC); and
vi. If the employer is covered by the Anti- The same shall be published in the DOLE website
Dummy Law, an Authority to Employ and posted in the PESO, such publication and posting
Foreign National (ATEFN) from the shall be for a period of 30 days and shall contain the
DOJ or from the DENR in case of name, position, employer and address, a brief
mining. description of the functions to be performed by the
b. In case of foreign nationals to be assigned in foreign national, qualifications, monthly salary range
related companies, applications may be filed in and other benefits, if there are any.
the Regional Office or Field Office having
jurisdiction over any of the applicant’s intended It shall also indicate in the same notice of publication
places of work. that any person in the Philippines who is
c. Additional position of the foreign national in the competent, able and willing at any the time of the
same company or subsequent assignment in application to perform the services for which the
related companies during the validity or renewal foreign national is desired may file an objection at the
of the AEP will be subject for publication DOLE Regional Office.
requirement. A change of position or employer
shall require an application for new AEP. Any objection or information against the employment
d. At any given time only one AEP shall be issued of the foreign national relative to labor market test
to a foreign national. A foreign national may be must be filed with the Regional Office within 30 days
issued one AEP only at any given time. [Sec. after publication.
5, D.O. No. 186-17]
The DOLE Regional Office shall refer to the
Fees DOLE’s Philjobnet and PESO Information System
Upon filing of application, the applicant shall pay a (PEIS), the PRC Registry of professionals, and the
fee of P9,000 for an AEP with a validity of one year. TESDA registry of certified workers to establish
In case the period of employment is more than one availability or non availability of able and qualified
year, an additional P4,000 shall be charged for every Filipino worker.
additional year or fraction thereof. In case of renewal,
the applicant shall pay a permit fee of P4,000 for each Information or criminal offense and grave
year of validity or fraction thereof. misconduct in dealing with or ill treatment of workers
may be filed with the Regional Offices any time. [Sec.
A courier fee of P200 shall be charged to the foreign 6, D.O. No. 186-17]
national upon the implementation of the AEP online
application system. Processing; Issuance
Applications for new AEP shall be processed and an
Loss of AEP or change of information or entries in AEP shall be issued within three working days
the AEP shall be subject to payment of P1,500 for after publication and payment of required fees and
AEP replacement. In case of loss, the request for fines, if there are any.
replacement shall be supported by a duly notarized
affidavit of loss. Applications for renewal of AEP shall be processed
within one day after receipt. [Sec. 8, D.O. No. 186-
Processing and issuance of certificate of exclusion 17]
shall be subject to payment of P500 per application.
Page 21 of 220
U.P. LAW BOC PRE-EMPLOYMENT LABOR LAW
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U.P. LAW BOC PRE-EMPLOYMENT LABOR LAW
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U.P. LAW BOC LABOR STANDARDS LABOR LAW
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U.P. LAW BOC LABOR STANDARDS LABOR LAW
Members of the managerial staff (supervisory (b) Execute under general supervision work
employees) along specialized or technical lines requiring
special training, experience, or knowledge; OR
(c) Execute, under general supervision, special
Art. 82. Coverage. – As used herein, “managerial
assignments and tasks;
employees” refer to those whose primary duty
4. Who do not devote more than 20% of their hours
consists of the management of the establishment in
worked in a work week to activities which are not
which they are employed or of a department or
directly and closely related to the performance of
subdivision thereof and to other officers or
the work described in paragraphs (1), (2) and (3)
members of the managerial staff.
above.
Art. 219. Definitions. – (m) One who is vested Effective recommendatory power
with the powers or prerogatives to lay down and Supervisory employees are those who, in the interest
execute management policies and/or to hire, of the employer, effectively recommend such
transfer, suspend, lay off, recall, discharge, assign or managerial actions and the exercise of such authority
discipline employees. Supervisory employees are is not merely routinary or clerical in nature but
those who, in the interest of the employer, requires the use of independent judgment [Art.
effectively recommend such managerial actions if 219(m)].
the exercise of such authority is not merely
routinary or clerical in nature but requires the use c. Field Personnel
of independent judgment. All employees not falling
within any of the above definitions are considered Non-agricultural employees:
rank and file employees for purposes of this Book. 1. Who regularly perform their duties away from the
principal or place of business or branch office of
the employer; and
The definition in Art. 82 covers more people than that
2. Whose actual hours of work in the field cannot
in Art. 219(m) as Art. 82 also includes managerial staff
be determined with reasonable certainty. [Art. 82]
(supervisory employees). In effect, managerial
employees in Art. 82 includes supervisors, but Art.
Legal Test: Control & Supervision of employer
219(m) does not for purposes of the right to self-
Although the fishermen perform non-agricultural
organization.
work away from petitioner’s business offices, the fact
remains that throughout the duration of their work
It follows that under Book V, Omnibus Rules
they are under the effective control and
Implementing the Labor Code [hereinafter, IRR]
supervision of petitioner through the vessel’s patron
supervisors are allowed to form, join or assist a labor
or master. Hence, the fishermen are not “field
union. Supervisors are not, however, entitled to the
personnel”. [Mercidar Fishing Corporation v. NLRC,
benefits under Book III Articles 83 through 96, being
G.R. No. 112574 (1998)]
part of the exemption of managerial employees as
defined in Art. 82. [Azucena, The Labor Code with
In order to determine whether an employee is a field
Comments and Cases]
employee, it is also necessary to ascertain if actual
hours of work in the field can be determined with
Managerial Staff is included as they are
reasonable certainty by the employer. In so doing, an
considered managerial employees as well [Sec.
inquiry must be made as to whether or not the
2(c), Rule I, Book III, IRR]
employee’s time and performance are constantly
Officers or members of a managerial staff are also
supervised by the employer. [Far East Agricultural
exempted if they perform the following duties and
Supply v. Lebatique, G.R. No. 162813 (2007)]
responsibilities:
1. Their primary duty consists of the performance
of work directly related to management policies d. Dependent Family Members
of their employer;
2. Customarily and regularly exercise discretion and Workers who are family members of the employer,
independent judgment; and who are dependent on him for their support, are
3. (a) Regularly and directly assist a proprietor or a outside the coverage of this Title on working
managerial employee whose primary duty conditions and rest periods [Art. 82].
consists of the management of the establishment
in which he is employed or subdivision thereof;
OR
Page 25 of 220
U.P. LAW BOC LABOR STANDARDS LABOR LAW
"Domestic work" refers to work performed in or for g. Workers Paid by Result (piece-
a household. [Sec. 3(d), IRR of RA10361] workers)
"Household" refers to the immediate members of
Sec. 2(e), Rule I, Book III, IRR. Exemption –
the family or the occupants of the house who are
Workers
directly and regularly provided services by the
who are paid by results, including those who are
Kasambahay.
paid on piece work, “takay,” “pakiao” or task basis,
[Sec. 3(g), IRR of RA10361]
and other nontime work if their output rates are in
accordance with the standards prescribed under
Note: According the Sec. 2 of the IRR, RA10361 does
Sec. 8, Rule VII, Book Three of these regulations,
not cover service providers, family drivers, children
or where such rates have been fixed by the
under foster family arrangement, and any other
Secretary of Labor and Employment in accordance
person who performs work occasionally or
with the aforesaid Section.
sporadically and not on an occupational basis.
Page 26 of 220
U.P. LAW BOC LABOR STANDARDS LABOR LAW
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U.P. LAW BOC LABOR STANDARDS LABOR LAW
Exception to 8-Hour Law: Work Hours of Health Sec. 5 (b), Rule I, Book III, IRR. Waiting time.
Personnel
– xxx An employee who is not required to leave
word at his home or with company officials where
Par. 2, Art. 83. Normal Hours of Work. – he may be reached is NOT working while on call.
Health personnel in:
1. Cities and municipalities with a population of
Inactive due to work interruptions
at least one million (1,000,000) OR
The time during which an employee is inactive by
2. Hospitals and clinics with a bed capacity of at
reason of interruptions in his work beyond his
least one hundred (100) shall hold regular
control shall be considered working time either:
office hours for eight (8) hours a day, for five
1. If the imminence of the resumption of work
(5) days a week, exclusive of time for meals,
requires the employee's presence at the place of
except where the exigencies of the service
work OR
require that such personnel work for six (6)
2. If the interval is too brief to be utilized effectively
days or forty-eight (48) hours, in which case,
and gainfully in the employee's own interest. [Sec.
they shall be entitled to an additional
4 (d), Rule I, Book III, IRR]
compensation of at least thirty percent (30%)
of their regular wage for work on the sixth day.
Necessary Work After Normal Hours
If the work performed was necessary, or it benefited
For purposes of this Article, "health personnel"
the employer, or the employee could not abandon his
shall include resident physicians, nurses,
work at the end of his normal working hours because
nutritionists, dietitians, pharmacists, social workers,
he had no replacement, all the time spent for such
laboratory technicians, paramedical technicians,
work shall be considered as hours worked if the work
psychologists, midwives, attendants and all other
was with the knowledge of his employer or
hospital or clinic personnel.
immediate supervisor. [Sec. 4(c), Rule I, Book III,
IRR]
Medical secretaries are also considered clinic
personnel. [Azucena] Lectures, meetings, trainings
Attendance at lectures, meetings, training programs,
and other similar activities shall not be counted as
Sec. 4(b), Rule I, Book III, IRR. Principles in
working time if ALL of the following conditions are
Determining Hours Worked. – An employee
met:
need not leave the premises of the work place in
1. Attendance is outside of the employee’s regular
order that his rest period shall not be counted it
working hours;
being enough that he stops working may rest
2. Attendance is in fact voluntary; and
completely and may leave his work place to go
3. The employee does not perform any productive
elsewhere whether within or outside the premises
work during such attendance. [Sec. 6, Rule I,
of his work place.
Book III, IRR]
Page 28 of 220
U.P. LAW BOC LABOR STANDARDS LABOR LAW
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U.P. LAW BOC LABOR STANDARDS LABOR LAW
Page 30 of 220
U.P. LAW BOC LABOR STANDARDS LABOR LAW
Exceptions:
Other Flexible Work Arrangements [DOLE Employees may be given a meal period of not less
Advisory No. 04, Series of 2010] than twenty (20) minutes provided that such
1. Gliding or Flexi-Time Schedule – one where shorter meal period is credited as compensable hours
employees are required to complete the core worked of the employee:
work-hours in the establishment but are free to 1. Where the work is non-manual work in nature or
determine their arrival and departure time. does not involve strenuous physical exertion;
2. Flexi-Holidays Schedule – one where 2. Where the establishment regularly operates not
employees agree to avail the holidays at some less than sixteen (16) hours a day;
other days provided there is no diminution of 3. In case of actual or impending emergencies or
existing benefits as a result of such arrangement. there is urgent work to be performed on
machineries, equipment or installations to avoid
Other alternative work arrangements may be had serious loss which the employer would otherwise
under agreement, company policy, or practice in suffer; OR
accordance with existing laws and regulations 4. Where the work is necessary to prevent serious
loss of perishable goods [par. 1, Sec. 1, Rule I,
POWER INTERRUPTIONS/ BROWNOUTS Book III, IRR]
Work interruption due to brownouts The eight-hour work period does not include the meal
Brownouts of short duration, but not exceeding 20 break. Employees are not prohibited from going out
minutes, shall be treated as hours worked, whether of the premises as long as they return to their posts
used productively by the employees or not. on time. Nowhere in the law may it be inferred that
employees must take their meals within the company
If they last more than 20 minutes, the time may not premises. [Philippine Airlines v. NLRC, G.R. No.
be treated as hours worked if: 132805 (1999)]
1. the employees can leave their workplace or go
elsewhere whether within or without the work SYNTHESIS OF THE RULES
premises; OR General Rule: Meal periods are NOT compensable.
2. the employees can use the time effectively for
their own interest. Exception:
In this case, the employer may extend the working It becomes compensable:
hours beyond the regular schedule on that day to 1. Where the lunch period or meal time is
compensate for the loss of productive man-hours predominantly spent for the employer’s benefit.
without being liable for overtime pay. [Policy [Azucena citing 31 Am. Jur. 881; Duka, Labor
Instruction No. 36, May 22, 1978] Laws and Social Legislation]
2. Meal periods of 1 hour are deemed compensable
Note: The time during which an employee is inactive when the employee is on continuous shift.
by reason of work interruptions beyond his control is [National Development Co. v. CIR, G.R. No. L-
considered working time, either if the imminence of 15422, (1962)]
the resumption of work requires the employee’s 3. Shortened meal period of less than 1 hour (say,
presence at the place of work or if the interval is too 30 minutes) must be compensable. [Sec. 7, Rule
brief to be utilized effectively and gainfully in the I, Book III, IRR]
employee’s own interest. [Sec. 4(d), Rule I, Book III,
IRR] Note: To shorten meal time to less than 20 minutes is
not allowed. If the so-called meal time is less than 20
b. Meal periods minutes, it becomes only a REST PERIOD and is
considered working time.
General Rule: Subject to such regulations as the
Secretary of Labor may prescribe, it shall be the duty Exception to the Exception: Shortened meal breaks upon
of every employer to give his employees not less than the employees’ request – NOT compensable.
sixty (60) minutes time-off for their regular meals
[Art. 85] The employees themselves may request that the meal
period be shortened so that they can leave work
earlier than the previously established schedule.
[Drilon: Letter to Kodak Philippines, Nov. 27, 1989;
Cilindro: BWC-WHSD, Opinion No. 197, s. 1998]
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U.P. LAW BOC LABOR STANDARDS LABOR LAW
Page 32 of 220
U.P. LAW BOC LABOR STANDARDS LABOR LAW
Computation of additional compensation differential pay. The latter is payment for work done
during the night while the other is payment for the
excess of the regular eight-hour work. [Naric v. Naric
Art. 90. For purposes of computing overtime and
Workers Union, G.R. No. L-12075 (1959)]
other additional remuneration as required by this
Chapter (Hours of Work) the "regular wage" of an
SYNTHESIS OF RULES
employee shall include the cash wage only without
1. An employer cannot compel an employee to
deduction on account of facilities provided by the
work overtime
employer.
Exception: Emergency overtime work as provided
for in Art. 89
Base of Computation: Regular wage – means 2. Additional compensation is demandable only if
regular base pay; it excludes money received in the employer had knowledge and consented to
different concepts such as Christmas bonus and other the overtime work rendered by the employee.
fringe benefits. [Bisig ng Manggagawa ng Philippine Exception: Express approval by a superior NOT a
Refining Co. v. Philippine Refining Co., G.R. L-27761 requisite to make overtime compensable:
(1981)] a. If the work performed is necessary, or that it
benefited the company; or
BUT when the overtime work was performed on the b. That the employee could not abandon his
employee’s rest day or on special days or regular work at the end of his eight-hour work
holidays (Art. 93 and 94), the premium pay, must be because there was no substitute ready to take
included in the computation of the overtime pay. [See: his place. [Sec. 4(c), Rule I; Manila Railroad
p. 19 of Handbook on Workers’ Statutory Monetary Co. v. CIR, G.R. L-4614 (1952)]
Benefits, issued by the Bureau of Working
Conditions, 2006] Note: However, the Court has also ruled that a
claim for overtime pay is NOT justified in the
Emergency overtime absence of a written authority to render overtime
Any employee may be required by the employer to after office hours during Sundays and holidays.
perform overtime work in any of the following cases: [Global Incorporated v. Atienza, G.R. L-51612-13
1. When the country is at war or when any other (1986)]
national or local emergency has been declared by
the National Assembly or the Chief Executive; Daily time records cannot prove the performance
2. When it is necessary to prevent loss of life or of overtime work if the same had no prior
property or in case of imminent danger to public authorization by the management. [Robina Farms
safety due to an actual or impending emergency Cebu/Universal Robina Corp. v. Villa, G.R. No.
in the locality caused by serious accidents, fire, 175869 (2016)]
flood, typhoon, earthquake, epidemic, or other
disaster or calamity; 3. Compensation for work rendered in excess of the
3. When there is urgent work to be performed on 8 normal working hours in a day.
machines, installations, or equipment, in order to a. For ordinary days, additional 25% of the
avoid serious loss or damage to the employer or basic hourly rate.
some other cause of similar nature; b. For rest day/special day/holiday, additional
4. When the work is necessary to prevent loss or 30% of the basic hourly rate.
damage to perishable goods; and 4. A given day is considered an ordinary day, unless
5. Where the completion or continuation of the it is a rest day.
work started before the eighth hour is necessary 5. Undertime does NOT offset overtime.
to prevent serious obstruction or prejudice to the Undertime work on any particular day shall not
business or operations of the employer. [Art. 89] be offset by overtime work on any other day.
6. Where overtime work is necessary to avail of Permission given to the employee to go on leave
favorable weather or environmental conditions on some other day of the week shall NOT
where performance or quality of work [is exempt the employer from paying the additional
dependent thereon. [added by Rule 1, Sec. 10] compensation required in this Chapter. [Art. 88]
Overtime pay does not preclude night differential Offsetting work on a regular day with work rendered
pay on a holiday or rest day is prohibited because such
When the tour of duty of a laborer falls at nighttime deprives the employee of additional pay or premium.
[between 10:00pm and 6:00am], the receipt of [Lagatic v. NLRC, G.R. No. 121004 (1998)]
overtime pay will not preclude the right to night
Page 33 of 220
U.P. LAW BOC LABOR STANDARDS LABOR LAW
In general
Work on: Pay equals:
Regular day 1 or 100%
Rest day 1.3 or 130%
Special day 1.3 or 130%
Special day falling on rest day 1.5 or 150%
Regular holiday 2 or 200%
Regular holiday falling on rest
2.6 or 260%
day
Double holiday 3 or 300%
Double holiday fallling on rest
3.9 or 390%
day
Page 34 of 220
U.P. LAW BOC LABOR STANDARDS LABOR LAW
Overtime Pay with Night Shift Differential Sunday only when it is his established rest day. [Art.
Work on: Pay equals: 93(a)]
1 x 1.1 x 1.25 =
Regular day, overtime, night shift OTSRD = Hourly Wage x 169% x number of hours of OT
1.375 or 137.5%
1.3 x 1.1 x 1.3 = work
Rest day, overtime, night shift OTSRD = 100 x 1.69 x 4
1.859 or 185.9%
1.3 x 1.1 x 1.3 = OTSRD = 676
Special day, overtime, night shift
1.859 or 185.9%
Special day, rest day, overtime, 1.5 x 1.1 x 1.3 = Notes:
night shift 2.145 or 214.5% 1. Total wage is 1,716 ( WRD + OTSRD).
Regular holiday, overtime, night 2 x 1.1 x 1.3 = 2. 169% was derived by adding 39% (which is
shift 2.86 or 286% 30% of 130 or 1.3x.3 to 130%
Regular holiday, rest day/special 2.6 x 1.1 x 1.3 =
day, overtime, night shift 3.718 or 371.8% Work on Special Holiday (WSH)
Double holiday, overtime, night 3 x 1.1 x 1.3 Work performed on any special holiday shall be paid
shift =4.29 or 429% an additional compensation of at least thirty percent
Double holiday, rest day, 3.9 x 1.1 x 1.3 = (30%) of the regular wage of the employee. [Art.
overtime, night shift 5.577 or 557.7% 93(c)]
Note: Total wage is 1,300 (regular daily wage + OT OTWSHRD = Hourly wage x 195% x number of hours of
pay). OT work
OTWSHRD = 100 x 1.95 x 4
Work on Scheduled Rest Day (WRD) OTWSHRD = 780
Work performed on a rest day shall be paid an
additional compensation equivalent to 30%o of the Notes:
regular wage. [Art. 93] 1. Total wage is 1,980 (WSHRD + OTWSHRD).
2. 195% was derived by adding 45% (which is
WRD= Regular Wage x 130% 30% of 150% or 1.5x0.3) to 150%
WRD = 800 X 1.3
WRD= 1,040 Work on a Regular Holiday (WRH)
The employer may require an employee to work on
Overtime on Scheduled Rest Day (OTSRD) any holiday but such employee shall be paid a
Where an employee is made or permitted to work on compensation equivalent to twice his regular rate [Art.
his scheduled rest day, he shall be paid an additional 94(b)]
compensation of at least thirty percent (30%) of his
regular wage. An employee shall be entitled to such WRH = Regular wage x 200
additional compensation for work performed on WRH = 800 x 2
WRH = 1,600
Page 35 of 220
U.P. LAW BOC LABOR STANDARDS LABOR LAW
Page 36 of 220
U.P. LAW BOC LABOR STANDARDS LABOR LAW
shall respect the preference of employees as to their Coverage [Sec. 7, Rule III, Book III, IRR]
weekly rest day when such preference is based on General Rule: All employees
religious grounds. [Art. 94 (b)] Exceptions:
1. Those of the government and any of the political
The employee shall make know his preference to the subdivision, including government-owned and
employer in writing at least seven days before the controlled corporations;
desired effectivity of the initial rest day so preferred. 2. Managerial employees as defined in Book III;
3. Househelpers and persons in the personal service
When the choice of the employee as to his rest day of another;
based on religious grounds will inevitably result in 4. Workers who are paid by results, including those
serious prejudice or obstruction to the operations and who are paid on piece rate, takay, pakyaw, or task
the employer cannot normally be expected to resort basis, and other noontime work, if their output
to other measures, the employer may so schedule the rates are in accordance with the standards
weekly rest day of his choice for at least two days in a prescribed in the regulations, or where such rates
month [Rule III, Sec. 4] have been fixed by the Secretary of Labor and
Employment;
COMPULSORY WORK ON REST DAY 5. Field personnel, if they regularly perform their
The employer may require his employees to work on duties away from the principal or branch office
any day: or place of business of the ER and whose actual
1. In case of actual or impending emergencies hours of work in the filed cannot be determined
caused by serious accident, fire, flood, typhoon, with reasonable certainty.
earthquake, epidemic or other disaster or
calamity to prevent loss of life and property, or Premium pay rates [Handbook on Workers
imminent danger to public safety; Statutory Monetary Benefits, 2018]
2. In cases of urgent work to be performed on the
machinery, equipment, or installation, to avoid Premium
When Work Performed
serious loss which the employer would otherwise Pay
suffer; 130% of
3. In the event of abnormal pressure of work due to On scheduled rest day
regular wage
special circumstances, where the employer On Sunday ONLY IF this is the 130% of
cannot ordinarily be expected to resort to other ESTABLISHED rest day regular wage
measures; On Sunday and holidays, when no 130% of
4. To prevent loss or damage to perishable goods; regular work and rest days regular wage
5. Where the nature of the work requires 130% of
continuous operations and the stoppage of work On any special holiday/special day
regular wage
may result in irreparable injury or loss to the On any special holiday /special day 150% of
employer; and falling on scheduled rest day regular wage
6. Under other circumstances analogous or similar On a regular holiday falling on a rest 260% of
to the foregoing as determined by the Secretary day regular wage
of Labor and Employment. [Art. 92]
Work on a Sunday or holiday which is also a
Synthesis of the Rules scheduled rest day
1. Rest day of not less than 24 consecutive hours
after 6 consecutive days of work.
2. No work, no pay principle applies Sec. 2, Rule III, Book III, IRR. Business on
3. If an employee works on his designated rest day, Sundays/Holidays. – All establishments and
he is entitled to a premium pay. enterprises may operate or open for business on
4. Premium pay is additional 30% of the basic pay. Sundays and holidays provided that the employees
5. Employer selects the rest day of his employees are given the weekly rest day and the benefits as
6. However, employer must consider the religious provided in this Rule.
reasons for the choice of a rest day.
PREMIUM PAY
Premium pay refers to the additional compensation
for work performed within 8 hours on non-work
days, such as rest days and special days.
Page 37 of 220
U.P. LAW BOC LABOR STANDARDS LABOR LAW
Coverage
Sec. 7, Rule III, Book III, IRR. Compensation
General Rule: All employees [Art. 94(a); Rule IV, Sec.
on rest day/Sunday/holiday. –
1]
(a) Except those employees referred to under Sec.
Exceptions:
2, Rule I, Book III, an employee who is made
a. Those of the government and any of the political
or permitted to work on his scheduled rest day
subdivision, including government-owned and
shall be paid with an additional compensation
controlled corporation;
of at least 30% of his regular wage. An
b. Those of retail and service establishments
employee shall be entitled to such additional
regularly employing less than 10 workers;
compensation for work performed on a
c. Domestic helpers and persons in the personal
Sunday only when it is his established rest day.
service of another;
(b) Where the nature of the work of the employee
d. Managerial employees and officers or members
is such that he has no regular work days and no
of the managerial staff as defined in Book III
regular rest days can be scheduled, he shall be
e. Field personnel and other employees whose time
paid an additional compensation of at least
and performance is unsupervised by the
30% of his regular wage for work performed
employer including those who are engaged on
on Sundays and holidays.
task or contract basis, purely commission basis,
or those who are paid a fixed amount for
CBA on higher premium pay/ Rate Adjustments performing work irrespective of the time
Where the collective bargaining agreement or other consumed in the performance thereof. [Sec. 1,
applicable employment contract stipulates the Rule IV]
payment of a higher premium pay than that
prescribed under this Article, the employer shall pay Retail Establishment is one principally engaged in
such higher rate. [Art. 93 (d)] The employer and his the sale of goods to end-users for personal or
employees or their representatives are not prevented household use
from entering into any agreement with terms more
favorable to the employees. [Sec. 9, Rule II, Book III, Service Establishment is one principally engaged in
IRR] the sale of service to individuals for their own or
household use and is generally recognized as such.
The laws and regulations should not be used to [RA 6727 (The Wage Rationalization Act) IRR]
diminish any benefit granted to the employees under
existing laws agreements and voluntary employer Regular holidays
practices. [Ibid] Nothing in this rule shall justify an RA 9492 and 9849 (which added the two Muslim
employer in reducing the compensation of his holidays) provide for the observance of the following
employees for the unworked Sundays, holidays, or regular holidays:
other rest days which are considered paid off days or a. New year’s Day – Jan. 1
holidays by agreement or practice subsisting upon the b. Maundy Thursday – Movable date
effectivity of the Code. [Sec. 8, Rule III, Book III, c. Good Friday – Movable date
IRR] d. Araw ng Kagitingan – Monday nearest Apr. 9
e. Labor Day – Monday nearest May 1
4. Holidays f. Independence Day – Monday nearest June 12
g. Eid’l Fitr – Movable date
HOLIDAY PAY h. Eid’l Adha – Movable date
i. National Heroes Day – Last Monday of August
Holiday pay is a one-day pay given by law to an
j. Bonifacio Day – Monday nearest Nov. 30
employee even if he does not work on a regular
k. Christmas Day – Dec. 25
holiday. This gift of a day’s pay is limited to each of
l. Rizal Day – Monday nearest Dec. 30
the 12 regular holidays.
Special (Non-Working Days)
Note: Art. 94 (c), was superseded by E.O. 203, which
RA 9492 and RA 10966 provide for the observance
was subsequently amended by RA 9177, 9256, 9492,
of the following special holidays:
and 9849. The current state of the law is discussed
a. Ninoy Aquino Day – Monday nearest Aug. 21
below.
b. All Saints Day – Nov. 1
c. Immaculate Conception of Mary [RA 10966] –
Dec. 8
d. Last day of the year – Dec. 31
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Where the employer had a standing practice of using Right to holiday pay in case of absences
286 days as a divisor and following the correct All covered employees shall be entitled to the benefit
computation and taking into account that one of the provided herein when they are on leave of absence
holidays always falls on a Sunday, therefore increasing with pay.
the divisor to “287”, but increase would in some
instances prejudice the employees, in violation of the Employees who are on leave of absence without pay
proscription against non-diminution of benefits on the day immediately preceding a regular holiday
under Sec. 100 of the labor code, the “287” divisor may not be paid the required holiday pay if he has not
should only be used for computations which would worked on such regular holiday. [Sec. 6(a), Rule IV,
be advantageous to the employer (i.e. deduction for Book III, IRR]
absences) and not for computations which would
diminish the existing benefits of the employees (i.e., Notes:
overtime pay, holiday pay and leave conversions). a. If an employee is on leave of absence with pay
[Trans Asia Phils. v. NLRC, supra] on the day immediately preceding a regular
holiday, he is entitled to holiday pay.
b. If an employee is on leave of absence without
pay on the day immediately preceding a regular
holiday, he is not entitled to holiday pay unless he
works on such regular holiday.
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The employer may not pay his employees for the Piece workers
regular holidays during the suspension of work if: the Philosophy underlying the exclusion of piece workers
cessation of operation is due to business reverses, and from the 8-hour law is that said workers are paid
is authorized by the Secretary of Labor. depending upon the work they do irrespective of the
amount of time employed in doing said work. [Red V
Teachers, Piece Workers, Seafarers, Seasonal Coconut Products Ltd. v. CIR, G.R. No. L-21348 (1966)]
Workers, Etc.
a. Private school teachers, including faculty Seafarers
members of colleges and universities, may not be Any hours of work or duty including hours of watch-
paid for the regular holidays during semestral keeping performed by the seafarer on designated rest
vacations. They shall, however, be paid for the days and holidays shall be paid rest day or holiday pay.
regular holidays during Christmas vacation; [Sec. 11.C, Standard Terms and Conditions
b. Where a covered employee, is paid by results or Governing the Employment of Filipino Seafarers on
output, such as payment on piece work, his Board Ocean-Going Vessels]
holiday pay shall not be less than his average daily
earnings for the last seven (7) actual working days Seasonal workers
preceding the regular holiday; Provided, Seasonal workers who do not work during off-season
However, that in no case shall the holiday pay be are not entitled to pay for the regular holidays
less than the applicable statutory minimum wage occurring during their off-season. Workers assigned
rate. to “skeleton crews” that work during the off-season
c. Seasonal workers may not be paid the required have the right to be paid on regular holidays falling in
holiday pay during off-season when they are not that duration.
at work
d. Workers who have no regular working days shall ILLUSTRATIONS
be entitled to the benefits provided in this Rule.
[Sec. 8, Rule IV, Book III, IRR] Overtime on a Regular Day (OTRD)
Work may be performed beyond eight (8) hours a day
Holiday Pay of Hourly-Paid Faculty Members provided that the employee is paid for the overtime
Not Entitled: Regular Holiday Pay work, an additional compensation equivalent to his
Entitled: Regular hourly rate on days declared as regular wage plus at least twenty-five percent (25%)
special holidays or for some reason classes are called thereof [Art. 87]
off or shortened for the hours they are supposed to
have taught, whether extensions of class days be OTRD = Hourly wage x 125% x number of hours of OT
ordered or not; in case of extensions said faculty work
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Overtime on Scheduled Rest Day (OTSRD) OTRH = Hourly wage x 260% x number of hours of OT
Where an employee is made or permitted to work on work
his scheduled rest day, he shall be paid an additional
compensation of at least thirty percent (30%) of his Note: 2.6 was derived by adding 60% (which is 30% of
regular wage. An employee shall be entitled to such 2 or 2x0.3) to 200%
additional compensation for work performed on
Sunday only when it is his established rest day. [Art. Work on Regular Holiday which falls on a Rest
93(a)] Day (WRHRD)
If the holiday work falls on the scheduled rest day of
OTSRD = Hourly Wage x 169% x number of hours of OT the employee, he shall be entitled to an additional
work premium pay of at least 30% of his regular wage
holiday rate of 200% based on his regular wage rate
Note: 169% was derived by adding 39% (which is 30% [2nd sentence, Sec. 4, Rule IV, Book III, IRR].
of 130 or 1.3x.3 to 130%
WRHRD = Regular wage x 260%
Work on Special Holiday (WSH)
Work performed on any special holiday shall be paid Note: 260% was derived by adding 60% (which is 30%
an additional compensation of at least thirty percent of 2 or 2x0.3) to 200%
(30%) of the regular wage of the employee. [Art.
93(c)] Overtime on Regular Holiday which falls on a
Rest Day (OTWRHRD)
WSH = Regular wage x 130% Where the regular holiday work exceeding 8 hours
falls on the scheduled rest day of the employee, he
Work on Special Holiday which falls on a Rest shall be paid an additional compensation for the
Day (WSHRD) overtime work equivalent to his regular holiday-rest
Where such holiday work falls on the employee’s day for the first 8 hours plus 30% thereof. The regular
scheduled rest day, he shall be entitled to an additional holiday rest day rate of an employee shall consist of
compensation of at least fifty per cent (50%) of his 200% of his regular daily wage rate + 30% thereof
regular wage. [par. 2, Sec. 5, Rule IV, Book III, IRR].
WSHRD = Regular wage x 150% OTWRHRD = Hourly Rate x 338% x number of hours of
OT
Overtime during Work on Special Holiday which
falls on a Rest Day (OTWSHRD) Note: 338% was derived by adding 78% (which is 30%
of 260 or 2.6x0.3) to 200%
OTWSHRD = Hourly wage x 195% x number of hours of
OT work 5. Service incentive leaves
Note: 195% was derived by adding 45% (which is 30%
See: discussion on III. C. Leaves
of 150% or 1.5x0.3) to 150%
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Workers paid on a piece-rate basis - paid a Exception: ER may give to his employees half (½) of
standard amount for every piece or unit of work the required 13th Month Pay before the opening of
produced that is more or less regularly replicated, the regular school year and the other half on or before
without regard to the time spent in producing the the 24th of December every year.
same.
The frequency of payment of this monetary benefit
Minimum Amount may be the subject of agreement between the
1/12 of the total basic salary earned by an employee employer and the recognized CBA of the employees.
within a calendar year
13th Month Pay in Special Cases
a. Paid by Results: Employees who are paid on
piece work basis are, by law, entitled to the 13th
Month Pay. [Revised Guidelines on the
Implementation of the 13th Month Pay Law]
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b. Fixed or Guaranteed Wage: Employees who considered in lieu of 13th month pay. [Framanlis
are paid a fixed or guaranteed wage plus Farms, Inc. v. MOLE, G.R. No. 72616-17 (1989)]
commission are entitled to 13th month pay (not c. Wage Difference: The difference between the
purely commission); the basis for computation minimum wage and the actual salary received by
shall be both their fixed or guaranteed wage and the Employee cannot be deemed as his 13th
commission. [Revised Guidelines] month pay as such difference is not equivalent to
c. Those with Multiple Employers: Government or of the same import as the said benefit
Employees working part time in a private contemplated by law. [JPL Marketing Promotions v.
enterprise, including private educational CA, G.R. No. 151966 (2005)]
institutions, as well as Employees working in two d. 14th Month Pay is not mandated: Employers
or more private firms, whether on full or part already paying their employees a 13th month pay
time bases, are entitled to the required 13th Month Pay or its equivalent are not covered by this
from all their private Employers regardless of their Decree.[Kamaya Point Hotel v. NLRC, G.R. No.
total earnings from each or all their employers. 75289 (1989)]
[Revised Guidelines] e. Non-inclusion in regular wage: The mandated
d. Private School Teachers: Private school 13th month pay need not be credited as part of
teachers, including faculty members of regular wage of employees for purposes of
universities and colleges, are entitled to the determining overtime and premium pays, fringe
required 13th month pay, regardless of the benefits insurance fund, Social Security, Medicare
number of months they teach or are paid within and private retirement plans. [Revised Rules]
a year, if they have rendered service for at least
one (1) month within a year. [Revised Guidelines] Commissions vis-à-vis 13th month pay
Overload pay is NOT included in the The Rule on Productivity Bonuses. The so-called
computation for 13th month pay; overload is commissions “paid to or received by medical
not overtime as it is additional work done representatives of Boie-Takada Chemicals or by the
within the normal shift [Letran Calamba rank-and-file employees of Philippine Fuji Xerox Co.,
Faculty v. NLRC, G.R. No. 156225 (2008)] were excluded from the term “basic salary” because
these were paid to the medical representatives and
e. Resigned or Separated Employee: An rank-and-file employees as “productivity bonuses.”
Employee who has resigned or whose services These have no clear direct or necessary relation to the
were terminated at any time before the time for amount of work actually done by each individual
payment of the 13th month pay is entitled to this employee. More generally, a bonus is an amount
monetary benefit in proportion to the length of granted and paid ex gratia to an employee. If an
time he worked during the year, reckoned from employer cannot be compelled to pay a productivity
the time he started working during the calendar bonus to its employees, it should follow that such
year up to the time of his resignation or productivity bonus, when given, should not be
termination from service. [Revised Guidelines] deemed to fall within the “basic salary” of employees
f. Terminated Employees: The payment of the when the time comes to compute their 13th month
13th month pay may be demanded by the pay [Boie-Takeda v. de la Serna, G.R. No. 92174 and
employee upon the cessation of employer- G.R. No. L-102552 (1993)]
employee relationship. [Archilles Manufacturing
Corp. v. NLRC, G.R. No. 107225 (1995)] The decision in Boie-Takeda and the doctrine
enunciated in this case in fact co-exist with the other.
Additional Rules: The two cases present quite different factual
a. Commissions: If the commissions may be situations (although the same word “commissions”
properly considered part of the basic salary, then was used or invoked) the legal characterizations of
they should be INCLUDED. If they are not an which must accordingly differ.
integral part of the basic salary, then they should
be EXCLUDED. [Phil. Duplicators Inc. v. NLRC, In the instant case, there is no question that the sales
G.R. No. 110068 (1995)] commission earned by the salesmen who make or
b. Substitute Payment not allowed: Benefits in close a sale of duplicating machines constitute part of
the form of food or free electricity, assuming they the compensation or remuneration paid to salesmen
were given, were not a proper substitute for the for serving as salesmen, and hence as part of the
13th month pay required by law. Neither may “wage” or salary of petitioner’s salesmen. It appears
year-end rewards for loyalty and service be that petitioner pays its salesmen a small fixed or
guaranteed wage; the greater part of the salesmen’s
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Coverage/Exclusions
Wage includes the fair and reasonable value of
facilities furnished by the employer to the employee
[Art. 97(f)] while allowances are excluded from the
basic salary or wage computation. [Cebu Institute of
Technology v. Ople, G.R. No. L-58870 (1987)]
Applicability
The Labor Code Title on wages shall not apply to the
following [Art. 98 and Sec. 3, Rule VII, Book III,
IRR]:
a. Farm tenancy or leasehold;
b. Household or domestic helpers, including family
drivers and other persons in the personal service
of another;
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c. Homeworkers engaged in needlework; 3. Where all of the following conditions are met:
d. Workers in registered cottage industries who a. Bank/Facility for encashment is within 1-km
actually work at home; radius from the workplace
e. Workers in registered cooperatives when so b. ER did not receive any pecuniary benefit
recommended by the Bureau of Cooperative because of said arrangement
Development upon approval of the Secretary of c. EEs are given reasonable time during
Labor; banking hours to withdraw their wages
(compensable hours, if during working
Note: Workers in registered barangay micro business hours)
enterprise are only exempted from the Minimum d. The payment by check is with the written
Wage Law, not from the Title on Wages [RA 9178]. consent of the EEs concerned, in the
absence of a CBA. [Sec. 2, Rule VIII]
Wages v. Salary
Wages and salary are in essence synonymous. [Songco b. Time of Payment [Art. 103] [Sec.
v. NLRC, G.R. No. L-50999 (1990)]
3, Rule VIII, Book III, IRR]
There are slight differences:
Wage Salary Time of Payment
Paid to white collar At least once every 2 weeks
Frequency
Paid for skilled or workers and denote a or 2x per month
unskilled manual labor higher grade of Must not be more than 16
Intervals
employment days
Not subject to Not exempt from Valid excuse for delayed
execution, garnishment execution, garnishment payment
Force Majeure or
or attachment except or attachment [Gaa v. BUT ER must pay
circumstances beyond
for debts related to CA, G.R. No. L-44169 immediately after cessation
ER’s control
necessities [Art. 1708] (1985)] and not less than once a
month
Payments should be made
1. Payment of Wages with intervals not more than
Tasks which cannot 16 days, in proportion to
a. Form of Payment [Art. 102] be completed in 2 work completed
[Secs. 1-2, Rule VIII, Book III, weeks Final settlement is made
upon completion of the
IRR] work.
General rule: Legal Tender Only
Exception: Check/Money Order if customary OR c. Place of Payment [Art. 104] [Sec.
necessary because of special circumstances, as 4, Rule VIII, Book III, IRR]
specified by the Secretary of Labor or the CBA
Not allowed: General Rule: Shall be made at or near the place of
1. Promissory Notes undertaking (workplace)
2. Vouchers
3. Tokens Exceptions:
4. Tickets 1. Deterioration of peace and order conditions, or
5. Chits; or by reason of actual or impending emergencies
6. Any other form alleged to represent a legal (fire, flood, epidemic)
tender, even when expressly requested by the 2. Free transportation to the employees back and
employee. [Art. 102] forth
3. Under any other analogous circumstances
When payment through check, postal orders or provided, that the time spent by the employees in
money orders is allowed: collecting their wages shall be considered as
1. When payment is customary (on the date of Code compensable hours worked.
effectivity)
2. Where it is so stipulated in a collective agreement
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Note: Public hearing and publication are mandatory Unpaid benefits serve as the principal basis for
[Cagayan Sugar Milling Co. v. Sec. of Labor, G.R. No. computing the double indemnity [Sec. 2, D.O. No.
128399 (1998)]. 10-98]
Frequency: A WO issued by the Board may not be Wages of apprentices, learners and handicapped
disturbed for a period of 12 months from its workers shall in no case be less than 75% of the
effectivity and no petition for wage increase shall be statutory minimum wage rates [Sec. 10, IRR of RA
entertained during said period. [Rule IV, Sec. 4, 6727]
Revised rules of Procedure on Minimum Wage
Fixing] METHODS OF FIXING
a. Floor Wage Method- fixing a determinate
Exceptions: amount to be added to the prevailing statutory
a. When Congress itself issues a law increasing minimum wage rates (e.g. setting P25 increase for
wages. min. wage rates)
b. Supervening conditions (i.e. extraordinary b. Salary-Ceiling Method- Wage adjustment to be
increases in prices of petroleum products and applied to EEs receiving a certain denominated
basic goods/services. salary or workers being paid more than existing
min. wage (e.g. WO granting P25 increase to
Appeal: Any party aggrieved by the Wage Order those earning up to P250)
issued by the Regional Board may appeal such order
to the Commission within ten (10) calendar days from Floor Wage Salary Ceiling
the publication of such order. It shall be mandatory What it does
for the Commission to decide such appeal within sixty All wages under a certain
(60) calendar days from the filing thereof [Art. 123]. Adds to previous
wage increases to that
minimum wage
wage
Effect of Appeal: Example
General Rule: Does not operate to stay the order All wages under P456
Exception: Party appealing such order shall file with the P456 + P100 = P556 must be increased to
Commission an undertaking with a surety/sureties P556
(surety bond) satisfactory to the Commission for
payment to employees affected by the order of the Wage Distortion/Rectification
corresponding increase in the event such order is A situation where an increase in prescribed wage rates
affirmed [Art. 123]. results in the elimination or severe contraction of
intentional quantitative differences in wage or salary
Grounds for Appeals for Review of WO rates between and among employee groups in an
a. Non-conformity with prescribed guidelines establishment as to effectively obliterate the
and/or procedure distinctions embodied in such wage structure based
b. Questions of law on skills, length of service, or other logical bases of
c. Grave abuse of discretion [Sec. 2, Rule V, differentiation [Art. 124]
Revised Rules of Procedure on Minimum Wage
Fixing] Elements of wage distortion
a. Existing hierarchy of positions with
Double Indemnity Doctrine corresponding salary rates;
Double Indemnity is the payment to a concerned EE b. A significant change in the salary rate of a lower
of the prescribed increase or adjustments in the wage pay class without a concomitant increase in the
rate which was not paid by an ER in an amount salary rate of a higher one (must be caused by a
equivalent to 2x the benefits owing to such employee. wage order) [Philippine Geothermal Inc. v. Chevron,
[Philippine Hoteliers, Inc. v. National Union of G.R. No. 190187 (2018)]
Workers, GR No. 181972 (2009); RA 6727, as c. The elimination of the distinction between the
amended] two levels; and
d. The existence of the distortion in the same region
Unpaid Benefits of the country. [Prubankers Assn. v. Prudential Bank
The prescribed wage rates which the ER failed to pay and Co. , G.R. No. 131247 (1999)]
upon the effectivity of a WO, exclusive of other wage-
related benefits In Prubankers, the Court ruled that distortion does not
arise when a wage order gives employees in one
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branch of a bank higher compensation than that given CBA vis-à-vis Wage Orders – CBA creditability
to their counterparts in other regions occupying the In determining an employee’s regular wage, the
same pay scale, who are not covered by said wage pertinent stipulations in the CBA are controlling,
order. In short, the implementation of wage orders provided the result is not less than the statutory
in one region but not in others does not in itself requirement [Philippine National Bank v. PEMA, G.R.
necessarily result in wage distortion. No. L-30279 (1982)]
In Bankards Employees' Union v. NLRC [G.R. No. Note: The manner of resolving wage distortion is
140689 (2004)], the Court ruled that wage distortion largely based on the applicable wage order. The
can only exist where the wage adjustment is brought current one for NCR, WO 20, refers to the procedure
about by a wage order, not by management in Art. 124 of the Labor Code
prerogative. If the compulsory mandate under Article
124 to correct "wage distortion" is applied to 4. Non-Diminution of Benefits
voluntary and unilateral increases by the employer in
fixing hiring rates which is inherently a business
General Rule: There is a prohibition against elimination
judgment prerogative, then the hands of the employer
or diminution of benefits [Art. 100]
would be completely tied even in cases where an
increase in wages of a particular group is justified due
No wage order issued by any regional board shall
to a re-evaluation of the high productivity of a
provide for wage rates lower than the statutory
particular group, or as in the present case, the need to
minimum wage rates prescribed by Congress. [Art.
increase the competitiveness of the company’s hiring
127, as amended by RA 6727]
rate.
Requisites
HOW TO RESOLVE [Art. 124]
If the following are met, then the employer cannot
remove or reduce benefits [Vergara Jr. v. Coca-Cola
Organized Establishment
Bottlers Phils, G.R. No. 176985 (2013)]:
a. Employer and the union shall negotiate to correct
a. Ripened company policy: Benefit is founded on a
the distortions.
policy which has ripened into a practice over a
b. Disputes shall be resolved through the grievance
long period
procedure.
b. Practice is consistent and deliberate and
c. If still unresolved, voluntary arbitration.
c. Not due to error in the construction or application
of a doubtful or difficult question of law. [Globe
Grievance Procedure (under the CBA) → if
Mackay Cable v. NLRC, G.R. No. L-74156 (1988)]
unresolved, VOLUNTARY arbitration
d. The diminution or discontinuance is done
unilaterally by the employer.
Unorganized Establishment
a. ERs and Employees shall endeavor to correct
When not applicable: At least one of the requisites is
such distortions.
absent.
b. Disputes shall be settled through the National
a. Mistake in the application of the law [Globe
Conciliation and Mediation Board.
Mackay Cable v. NLRC, supra.]
c. If still unresolved after 10 calendar days of
b. Negotiated benefits [Azucena]
conciliation, it shall be referred to the appropriate
c. Reclassification of Positions – e.g. loss of some
branch of the NLRC – compulsory arbitration
benefits by promotion.
Both the employer and employee cannot use
d. Contingent or Conditional Benefits – the rule
economic weapons.
does not apply to a benefit whose grant depends
d. Employer cannot declare a lock-out; Employee
on the existence of certain conditions, so that the
cannot declare a strike because the law has
benefit is not demandable if those preconditions
provided for a procedure for settling
are absent.
e. The salary or wage differential does not need to
be maintained. [National Federation of Labor v.
Benefits initiated through negotiation between
NLRC, G.R. No. 103586 (1994)]
Employee and Employer, e.g. CBA, can only be
eliminated or diminished bilaterally.
National Conciliation and Mediation Board 🡪 if
unresolved, COMPULSORY arbitration by the
NLRC
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a. Discrimination
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Children - refers to any person under 18 years of age 5. The ER shall formulate and implement,
or those over but are unable to fully take care of subject to the approval and supervision of
themselves or protect themselves from abuse, neglect, competent authorities, a continuing program
cruelty, exploitation or discrimination because of a for training and skills acquisition of the child.
physical or mental disability or condition. [Sec. 2, RA [Sec. 12 of RA 7610, as amended by RA
7610] 7658]
Child labor - refers to any work or economic activity Employment of Children from 15 to 18
performed by a child that subjects him/her to any Employment is allowed even without permit but
form of exploitation or is harmful to his/her health restricted to non-hazardous work.
and safety or physical, mental or psychosocial
development. Non-hazardous work shall mean any work or
activity in which the EE is not exposed to any risk
Working child - refers to any child engaged as which constitutes an imminent danger to his safety
follows: and health. [Sec. 3, Rule XII, Book III, IRR]
a. when the child is below eighteen (18) years of age,
in work or economic activity that is not child The Secretary of Labor shall from time to time
labor as defined in the immediately preceding publish a list of hazardous work and activities in
subparagraph; and which persons 18 years of age and below cannot be
b. when the child is below fifteen (15) years of age, employed [Sec. 3, Rule XII, Book III, IRR]
in work where he/she is directly under the
responsibility of his/her parents or legal guardian The following are HAZARDOUS workplaces:
and where only members of the child‘s family are DO 149-16 as amended by DO 149-A-17, Sec. 6
employed; or in public entertainment or
information. [Sec. 3, D.O. No. 65-04] Worst Forms of Child Labor
a. All forms of slavery, as defined under the "Anti-
Exceptions trafficking in Persons Act of 2003", or practices
a. Child works directly under the sole responsibility similar to slavery such as sale and trafficking of
of his parents or legal guardian and where only children, debt bondage and serfdom and forced
members of the employer’s family are employed, or compulsory labor, including recruitment of
provided: children for use in armed conflict; or
1. his employment does NOT endanger his life, b. The use, procuring, offering or exposing of a
safety, health and morals, child for prostitution, for the production of
2. nor impairs his normal development, and pornography or for pornographic performances;
3. the parent or legal guardian shall provide the or
said minor child with the prescribed primary c. The use, procuring or offering of a child for
and/or secondary education; [Sec. 12 of RA illegal or illicit activities, including the production
7610, as amended by RA 7658] and trafficking of dangerous drugs and volatile
b. Child’s employment or participation in public substances prohibited under existing laws; or
entertainment or information through cinema, d. Work which, by its nature or the circumstances
theater, radio or television is essential, provided in which it is carried out, is hazardous or likely to
that [Sec. 12 of RA 7610, as amended by RA be harmful to the health, safety or morals of
7658]: children, such that it:
1. employment does NOT involve ads or 1. Debases, degrades or demeans the intrinsic
commercials promoting alcohol, tobacco worth and dignity of a child as a human
and its by-products or violence [Sec. 14, RA being; or
7610] 2. Exposes the child to physical, emotional or
2. the employment contract is concluded by the sexual abuse, or is found to be highly
child’s parents or guardian, and approved by stressful psychologically or may prejudice
DOLE morals; or
3. The ER shall ensure the protection, health, 3. Is performed underground, underwater or at
safety and morals of the child dangerous heights; or
4. The ER shall institute measures to prevent 4. Involves the use of dangerous machinery,
the child’s exploitation or discrimination equipment and tools such as power-driven
taking into account the system and level of or explosive power-actuated tools; or
remuneration, and the duration and 5. Exposes the child to physical danger such as,
arrangement of working time but not limited to the dangerous feats of
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Access to Outside Communication However, Sec. 12(a), (b), (c) and (d) shall be standard
The employer shall grant the domestic worker access requirements when the employment of the domestic
to outside communication during free worker is facilitated through the PEA.
time: Provided, That in case of emergency, access to The cost of the foregoing shall be borne by the
communication shall be granted even during work prospective employer or agency, as the case may be.
time. [Sec. 8, RA 10361] [Sec. 12, RA 10361]
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Notice to end the working relationship d. SSS, MEDICARE and ECC premium
If the duration of the domestic service is not contributions shall be deducted from their pay
determined either in stipulation or by the nature of and shall be remitted by
the service, the employer or the domestic worker may ER/contractor/subcontractor to the SSS [Sec. 6,
give notice to end the working relationship five (5) Rule XIV, Book III, IRR]
days before the intended termination of the service.
Liability of Employer
The domestic worker and the employer may mutually a. Employer may require homeworker to redo work
agree upon written notice to pre-terminate the improperly executed without additional pay [Sec.
contract of employment to end the employment 9(a), Rule XIV, Book III, IRR]
relationship. [Sec. 32, RA 10361] b. Employer need not pay homeworker for any
work done on goods or articles not returned due
4. Homeworkers to homeworker’s fault [Sec. 9(b), Rule XIV, Book
III, IRR]
c. If subcontractor/contractor fails to pay
Note: D.O. No. 5, DOLE (February 4, 1992), is now
homeworker, employer is jointly and severally
Rule XIV, Book III of the IRR.
liable with the former to the homeworker for
his/her wage [Sec. 11, Rule XIV, Book III, IRR]
Industrial homework
d. Employer shall assist the homeworkers in the
maintenance of basic safe and healthful working
a. Is a system of production under which work for
conditions at the homeworkers’ place of work.
an employer or contractor is carried out by a
[Sec. 11, Rule XIV, Book III, IRR]
homeworker at his/her home. Materials may or
may not be furnished by the employer or
Regional Office shall provide technical assistance
contractor.
to registered homeworkers’ organizations [Sec. 14,
b. Decentralized form of production, where there is
Rule XIV, Book III, IRR of ]
ordinarily very little supervision or regulation of
methods of work. [Sec. 2(a), Rule XIV, Book III,
Prohibited Homework
IRR]
a. explosives, fireworks and articles of like
character;
Industrial Homeworker - a worker who is engaged
b. drugs and poisons; and
in industrial homework
c. other articles, the processing of which requires
exposure to toxic substances. [Sec. 13, Rule XIV,
Employer means any natural or artificial person who
Book III, IRR]
a. Acts as a contractor or subcontractor – delivers
or causes to be delivered any goods, articles, or
Deductions
materials to be processed or fabricated in or
No deduction from the homeworker’s earnings for
about a home and thereafter to be returned or to
the value of materials lost, destroyed or damaged
be disposed of or distributed in accordance with
unless:
employer’s direction; OR
a. Homeworker is clearly shown to be responsible
b. Sells any goods, articles, or materials to be
for loss or damage
processed or fabricated in or about a home and
b. Reasonable opportunity to be heard
then rebuys them after. [Art. 153]
c. Amount of deduction is fair and reasonable, and
does not exceed actual loss or damage
Note: Sec. 2(d), Rule XIV, Book III is substantially
d. Deduction does not exceed 20% of
similar to the above.
homeworker’s weekly earnings [Sec. 8, Rule XIV,
Book III, IRR]
Rights and benefits accorded homeworkers
a. Right to form, join or assist organizations [Sec. 3,
Rule XIV, Book III, IRR] 5. Night Workers
b. Right to acquire legal personality and the rights
and privileges granted by law to legitimate labor Night worker
organizations upon issuance of the certification Any employed person whose work requires
of registration [Sec. 4, Rule XIV, Book III, IRR] performance of a substantial number of hours of
c. Immediate payment upon employer’s receipt of night work which exceed a specified limit. This limit
finished goods or articles [Sec. 6, Rule XIV, Book shall be fixed by the Sec of Labor after consulting the
III, IRR]
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Protection against dismissal and loss of benefits Who may employ apprentices
attached to employment status, seniority, and Only employers in highly technical industries may
access to promotion employ apprentices and only in apprenticeable
Where no alternative work can be provided to a occupations approved by the SOLE [Art. 60, LC].
woman employee who is not in a position to render
night work, she shall be allowed to go on leave or on The act of filing the proposed apprenticeship
extended maternity leave, using her earned leave program with the DOLE is a preliminary step towards
credits. its final approval, and does not instantaneously give
rise to an employer-apprentice relationship. It must
A woman employee shall NOT be dismissed for be duly approved by the Minister of Labor and
reasons of pregnancy, childbirth and childcare Employment. Hence, since the apprenticeship
responsibilities as defined under this Rule. She shall agreement between petitioner and respondent has no
NOT lose the benefits regarding her employment force and effect, respondent's assertion that he was
status, seniority, and access to promotion which may hired not as an apprentice but as a delivery boy
attach to her regular night work position. [Sec. 8, Rule deserves credence. [Nitto Enterprises v. NLRC, G.R.
XV, Book III, IRR, through D.O. No. 119-12] No. 114337 (1995)]
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b. Secondary
Benefit – entitlement to monthly pension from
1. Shall only receive when the primary beneficiaries retirement until death.
are absent
2. Dependent parents The monthly pension shall be suspended upon the
reemployment or resumption of self-employment of
a retired member who is less than sixty-five [65] years
c. Others old.
1. shall only receive when the primary and In Case of Death of Member
secondary beneficiaries are absent 1. His/her primary beneficiaries as of the date of
2. Any other person designated by member as his/her retirement shall be entitled to receive the
his/her secondary beneficiary. monthly pension; or
2. If he/she has no primary beneficiaries AND
3. Benefits he/she dies within sixty [60] months from the
start of his/her monthly pension, his/her
secondary beneficiaries shall be entitled to a lump
a. Monthly Pension [Sec.12] sum benefit equivalent to the total monthly
pensions corresponding to the balance of the
Computation of monthly pension five-year guaranteed period, excluding the
The monthly pension shall be the highest of the dependents’ pension.
following amounts:
1. P300 + [20% x [average monthly credit]] + [2% Lump Sum Alternative
x [average monthly credit] x [# of cash credited Member may opt to receive his/her first 18 monthly
years of service in excess of 10 years]]; pensions in lump sum but such is discounted at a
2. 40% x [average monthly credit]; preferential rate of interest.
3. P1,000; provided, that the monthly pension shall
in no case be paid for an aggregate amount of less Lump Sum Eligibility
than 60 months. [Sec. 12(a), R.A. No. 8262] A 60 year old member with less than 120 monthly
4. Notwithstanding the abovementioned, minimum contributions who is no longer employed or self-
pension is P1,200 for members with at least 10 employed, and who is not continuing contributions
years credit service, P2,400 for those with 20 independently, he is entitled to a lump sum equal to
years. [Sec. 12(b), R.A. No. 8262] his total contributions paid.
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3. Benefits
Computation of Service [Sec. 10]
From date of original appointment/election,
including periods of service at different times under
one or more employers, those performed overseas
under the authority of the Republic of the Philippines,
and those that may be prescribed by the GSIS in
coordination with the Civil Service Commission.
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SSS GSIS
RA 1161 as amended by RA 8282: RA 8291 amending PD 1146
Enabling law
Social Security Act of 1997
Employer – any person, natural or juridical, Employer – National government, its
domestic or foreign, who carries on in the political subdivisions, branches, agencies or
Philippines any trade business, industry, instrumentalities, including government-
undertaking, and uses the services of another owned or controlled corporations and
person who is under his orders as regards financial institutions with original charters
the employment, except those considered [GOCCs]; constitutional commissions; and
as employer under the GSIS. A self- judiciary
employed person shall be both employer and
employee at the same time.
Employee – any person who performs Employee – any person receiving
services for an employer in which either or compensation while in service of an employer
both mental and physical efforts are used whether by election or appointment,
and who receives compensation for such irrespective of status of appointment;
services, where there is an employer— baranggay officials; and sangguniang officials
employee relationship; also, a self-employed
person who is both employee and employer
at the same time
Self-employed – any person whose income Note: No counterpart for self-employed.
Definition of is not derived from employment, including,
Terms but not limited to:
• self-employed professionals;
• partners and single proprietors of
businesses;
• actors, directors, scriptwriters, news
correspondents not considered as
employees under the above definition;
• athletes, coaches, trainers, jockeys; and
• individual farmers and fishers.
Dependents: Same, except that a child here is below 18
• Legal spouse entitled by law to receive
support;
• Child – unmarried, not gainfully
employed, and below 21 or
• Child over 21 if he or she became
permanently incapacitated and
incapable of self-support, physically or
mentally,; child may be legitimate,
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Other
Any other person designated by the member
as his/her secondary beneficiary.
Compensation – all actual remuneration for Compensation – basic pay received
employment, including living allowance, as excluding per diems, bonuses, overtime,
well as the cash value of any remuneration honoraria, allowances and other emoluments
paid in any medium other than cash except not integrated into the basic pay under
that portion already above the max salary existing laws.
credit under Sec. 18 of the Act.
Compulsory Public sector employees below the
• Employers as defined above; compulsory retirement age of 65.
• Employees not over 60 years including
household helpers with at least P1,000 Exceptions:
monthly pay; and (1) AFP and PNP;
• Self-employed. (2) Members of the Judiciary and
Constitutional Commissions who are
Voluntary covered only by life insurance as they
• Spouses who devote full time to have separate retirement schemes;
managing household and family affairs; (3) Contractual employees with no
• OFWs recruited by foreign-based employee-employer relationship with the
employers; agency they serve.
• Employees already separated from
Coverage employment or those self-employed
with no realized income for a given
month, who chose to continue with
contributions to maintain right to full
benefit.
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dependency may exist although the dependent could monthly wage or salary actually received by the
have subsisted without the assistance he/she received, employee at the time of his death;
if such contributions were relied on by claimant for 2. The minimum income benefit shall not be less
his/her means of living as determined by his/her than Fifteen Thousand Pesos (P15,000.00). [Sec.
position in life. [Malate Taxicab v. Del Villar, G.R. 3, Rule XII, IRR]
No. L-7489 (1956)]
For secondary beneficiaries
Period of entitlement Income benefit is payable in monthly pension which
shall not exceed the period of 60 months and the
For primary beneficiaries aggregate income benefit shall not be less than P15,
The income benefit shall be paid beginning at the 000.00. [Sec. 3, Rule XII, IRR]
month of death and shall continue to be paid for as
long as the beneficiaries are entitled thereto. [Sec. 2, Death benefits after retirement are allowed
Rule XII, IRR] Generally, the term “covered employees” refers to an
employee who, at the time of his death, is still covered
Qualifications: by the GSIS. However, the implementing rules and
With respect to the surviving legitimate spouse, the regulations of the Employees’ Compensation
qualification is that he/she has not remarried. Commission allows death benefits to those retired
For the dependent children, the qualifications are: employees whose retirement was brought about by
1. Unmarried; permanent disability.
2. Not gainfully employed; and
3. Not over 21 years of age provided he/she is The Court is aware that death benefits must be
incapable of self-support due to a physical or granted to the primary beneficiaries of the decedent
mental defect which is congenital or acquired to help the family of a permanent and totally disabled
during minority. [Sec. 2(a), Rule XII, IRR] person who was so disabled because of causes that are
work-oriented. The rule applies all the more when the
For secondary beneficiaries disabled person later dies because of the same cause
The income benefit shall be sixty (60) times the or related cause. [Manuzon v. ECC, G.R. No. 88573,
monthly income benefit of a primary beneficiary (1990)]
which in no case be less than P 15,000.00, which shall
likewise be paid in monthly pension. [Sec. 2(a), Rule Death of a person receiving permanent total
XII, IRR] disability benefits
Under Art. 200(b), death benefit shall be paid to the
Manner of payment beneficiaries if an employee, while receiving
Death benefits are paid in the form of cash monthly permanent total disability benefit, dies.
pension:
1. for life to the primary beneficiaries, guaranteed Prescription of claims
for five years; All money claims arising from employer-employee
2. for not more than 60 months to the secondary relations shall be filed within three (3) years from the
beneficiaries in case there are no primary time the cause of action accrued; otherwise they shall
beneficiaries; forever be barred. [Art. 306, LC]
3. in no case shall the total benefit be less than
P15,000. [Art. 200]
2. POEA-Standard
Amount of benefits
Employment Contract
For primary beneficiaries
Monthly income benefit shall be equivalent to the As part of a seafarer's deployment for overseas work,
monthly income benefit for permanent total he/she and the vessel owner or its representative local
disability, which shall be guaranteed for five years, manning agency are required to execute the POEA-
increased by ten percent for each dependent child but SEC. Containing the standard terms and conditions
not exceeding 5, beginning with the youngest and of seafarers' employment, the POEA-SEC is deemed
without substitution. [Sec. 3, Rule XII, IRR] included in their contracts of employment in foreign
ocean-going vessels. [Sharpe Sea Personnel Inc. v.
Notes: Mabunay, G.R. No. 206113 (2017)]
1. The aggregate monthly benefit payable in the
case of the GSIS shall in no case exceed the
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a. Compensation and Benefits for of disability has been assessed by the company-
designated physician.
Injury or Illness
The period within the seafarer shall be entitled to
There are two requisites for a seafarer’s injury or sickness allowance shall not exceed 120 days.
disability to be considered compensable: Payment of the sickness allowance shall be made on a
(1) “the injury or illness must be work-related;” and regular basis, but not less than once a month. [Sec. 20.
(2) “the work-related injury or illness must have A.3, POEA-SEC]
existed during the term of the seafarer's employment
contract.” [ Magsaysay Maritime Services v. Laurel 3. Cost of medicines, mode of transportation and
707 Phil. 210 (2013).] accommodation
The seafarer shall be entitled to reimbursement of the
Work-related injury or illness cost of medicines prescribed by the company-
For an illness to be compensable, "it is not necessary designated physician.
that the nature of the employment be the sole and
only reason for the illness suffered by the seafarer." In case treatment of the seafarer is on an out-patient
basis as determined by the company-designated
It is enough that there is "a reasonable linkage physician, the company shall approve the appropriate
between the disease suffered by the employee and his mode of transportation and accommodation.
work to lead a rational mind to conclude that his work
may have contributed to the establishment or, at the The reasonable cost of actual traveling expenses
very least, aggravation of any pre-existing condition and/or accommodation shall be paid subject to
he might have had.” [Madridejos v. NYK-FIL Ship liquidation and submission of official receipts and/or
Management, Inc. 810 Phil. 704 (2017)] proof of expenses. [Sec. 20, A.3, POEA-SEC]
See Sec. 32 of POEA-SEC for the schedule of Mandatory post-employment medical
disability or impediment for injuries suffered and examination; strict compliance
diseases including occupational diseases of illness
contracted in the course of work. General rule: The seafarer shall submit himself/herself
to a post-medical examination by a company-
Those illnesses not listed in Sec. 32 are disputably designated physician within three working days
presumed as work-related. [Sec. 20, A.4, POEA-SEC] upon his return.
LIABILITIES OF EMPLOYER IN CASE OF Exceptions:
WORK-RELATED INJURY OR ILLNESS a. When the seafarer is physically incapacitated
to do so. In which case, a written notice to
1. Medical expenses the agency within the same period is deemed
If the injury or illness requires medical and/or dental as compliance. [Sec. 20, A.3, POEA-SEC]
treatment in a foreign port, the employer shall be b. When the non-compliance with the
liable for the full cost of such medical, serious dental, mandatory post-employment medical
surgical and hospital treatment as well as board and examination was “not due to the seafarer’s
lodging until the seafarer is declared fit to work or to fault but to the inadvertence or deliberate
be repatriated. refusal of the [employer].” [Interorient
Maritime Enterprises, Inc. v. Remo, 636
However, if after repatriation, the seafarer still Phil. 240 (2010)]
requires medical attention arising from said injury or
illness, he/she shall be so provided at cost to the Rationale
employer until such time he/she is declared fit or the The rationale for the rule [on the mandatory post-
degree of his/her disability has been established by employment medical examination] is that reporting
the company-designated physician. [Sec. 20, A.2, the illness or injury within three days from
POEA-SEC] repatriation fairly makes it easier for a physician to
determine the cause of the illness or injury.
2. Sickness allowance Ascertaining the real cause of the illness or injury
The seafarer shall also receive sickness allowance beyond the period may prove difficult. To ignore the
from his/her employer in an amount equivalent to rule might set a precedent with negative
his/her basic wage computed from the time he/she repercussions, like opening floodgates to a limitless
signed off until he is declared fir to work or the degree number of seafarers claiming disability benefits, or
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causing unfairness to the employer who would have b. Compensation and Benefits For
difficulty determining the cause of a claimant's illness
because of the passage of time. [Wallem Maritime Death
Services, Inc. v. Tanawan, 693 Phil. 416 (2012)]
In case of work-related death of the seafarer, during
Third Doctor Opinion Rule the term of his contract, the employer shall pay
If a doctor appointed by the seafarer disagrees with his/her beneficiaries the Philippine currency
the assessment [of the company-designated equivalent to the amount of Fifty Thousand US
physician], a third doctor may be agreed jointly dollars (US$50,000) and an additional amount of
between the employer and the seafarer. Seven Thousand US dollars (US$7,000) to each child
under the age of twenty-one (21) but not exceeding
The third doctor’s decision shall be final and binding four (4) children, at the exchange rate prevailing
on both parties. [Sec. 20, A.4, POEA-SEC] during the time of payment. [Sec. 20, B.1, POEA-
SEC]
Mandatory reporting requirement
In the course of the treatment, the seafarer shall also Requisites
report regularly to the company-designated physician For death to be compensable, the claimant bears the
specifically on the dates as prescribed by the burden to establish that:
company-designated physician and agreed to by the (1) the seafarer died during the duration of his/her
seafarer. Failure of the seafarer to comply with the contract and
mandatory reporting requirement shall result in his (2) his/her illness was work-related. [Sec. 20, B.1,
forfeiture of the right to claim the above benefits. POEA-SEC]
[Sec. 20, A.3, POEA-SEC]
Exception: When the seafarer’s death occurred after
GUIDELINES FOR THE CLAIM OF the termination of his/her contract after medical
PERMANENT TOTAL DISABILITY repatriation repatriation on account of a work-related
BENEFITS injury or illness
The employer must also compensate the seafarer for
his/her permanent total disability as finally While the general rule is that the seafarer’s death
determined by the company-designated physician. should occur during the term of his employment, the
seafarer’s death occurring after the termination of his
The following guidelines shall govern seafarers' claims employment due to his medical repatriation on
for permanent and total disability benefits: account of a work-related injury or illness constitutes
1. The company-designated physician must issue a an exception thereto. This is based on a liberal
final medical assessment on the seafarer's construction of the 2000 POEA-SEC as impelled by
disability grading within a period of 120 days the plight of the bereaved heirs who stand to be
from the time the seafarer reported to him; deprived of a just and reasonable compensation for
2. If the company-designated physician fails to give the seafarer’s death, notwithstanding its evident work-
his/her assessment within the period of 120 days, connection. [Racelis v. United Philippine Lines, 746
without any justifiable reason, then the seafarer's Phil. 758 (2014)]
disability becomes permanent and total;
3. If the company-designated physician fails to give When compensation payable is double
his/her assessment within the period of 120 days Where death is caused by warlike activity while sailing
with a sufficient justification (e.g. seafarer within a declared war zone or war risk area, the
required further medical treatment or seafarer compensation payable shall be doubled. [Sec. 20, B.2,
was uncooperative), then the period of diagnosis POEA-SEC]
and treatment shall be extended to 240 days. The
employer has the burden to prove that the Other liabilities of the employer when the seafarer
company-designated physician has sufficient dies as a result of work-related injury or illness during
justification to extend the period; and the term of employment are as follows:
4. If the company-designated physician still fails to a. The employer shall pay the deceased’s beneficiary
give his assessment within the extended period of all outstanding obligations due the seafarer under
240 days, then the seafarer's disability becomes this Contract.
permanent and total, regardless of any b. The employer shall transport the remains and
justification. [Jebsens Maritime Inc. v. Rapiz, G.R. personal effects of the seafarer to the Philippines
No. 218871 (2017)] at employer’s expense except if the death
occurred in a port where local government laws
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or regulations do not permit the transport of such When compensation is not payable
remains. In case death occurs at sea, the [applies to both disability and death benefits]
disposition of the remains shall be handled or No compensation and benefits shall be payable in
dealt with in accordance with the master’s best respect of any injury, incapacity, disability or death of
judgment. In all cases, the employer/master shall the seafarer resulting from his willful or criminal act
communicate with the manning agency to advise or intentional breach of his duties, provided however,
for disposition of seafarer’s remains. that the employer can prove that such injury,
c. The employer shall pay the beneficiaries of the incapacity, disability or death is directly attributable to
seafarer the Philippine currency equivalent to the the seafarer. [Sec. 20, D, POEA-SEC]
amount of One Thousand US dollars (US$1,000)
for burial expenses at the exchange rate Prescription of claims
prevailing during the time of payment. [Sec. 20, All claims arising from this contract shall be made
B.4, POEA-SEC] within three (3) years from the date the cause of action
arises, otherwise the same shall be barred. [Sec. 30,
POEA-SEC]
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e. Security personnel
Managerial functions refer “to powers and prerogatives
The security guards and other personnel employed by to lay down and execute management policies and/or
the security service contractor shall have the right: to hire, transfer, suspend, layoff, recall, discharge or
1. To form, join, or assist in the formation of a labor dismiss employees”. [San Miguel Corporation Supervisors
organization of their own choosing for purposes of and Exempt Union v. Laguesma, G.R. No. 110399 (1997)]
collective bargaining and
2. To engage in concerted activities which are not High Level/Managerial Government Employees
contrary to law including the right to strike. [D.O. High-level employees of the government whose
No. 14 Series of 2001 Guidelines Governing the functions are normally considered as policy-making or
Employment and Working Conditions of Security managerial or whose duties are of a highly confidential
Guards and Similar Personnel in the Private nature shall not be eligible to join the organization of
Security Industry) rank-and-file government employees. [Sec. 3, E.O. 180]
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iv. Members of the AFP, Policemen, Police a. To interfere with, restrain or coerce employees
Officers, Firemen, and Jail Guards in the exercise of their right to self-organization;
b. To require as a condition of employment that a
Members of the AFP, Policemen, Police Officers, person or an employee shall not join a labor
Firemen and Jail Guards are expressly excluded by EO organization or shall withdraw from one to
180, Sec. 4 from the coverage of the EO 180 which which he belongs;
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Art. 260 [249] Unfair Labor Practices of Labor Art. 287 [272] Penalties —
Organizations. — It shall be unfair labor practice a. Any person violating any of the provisions of
for a labor organization, its officers, agents or Article 264 of this Code shall be punished by a
representatives: fine of not less than one thousand pesos
(P1,000.00) nor more than ten thousand pesos
a. To restrain or coerce employees in the exercise (P10,000.00) and/or imprisonment for not less
of their right to self-organization. However, a than three months nor more than three (3)
labor organization shall have the right to years, or both such fine and imprisonment, at
prescribe its own rules with respect to the the discretion of the court. Prosecution under
acquisition or retention of membership; this provision shall preclude prosecution for the
same act under the Revised Penal Code, and
b. To cause or attempt to cause an employer to vice versa.
discriminate against an employee, including
discrimination against an employee with respect b. Upon the recommendation of the Minister of
to whom membership in such organization has Labor and Employment and the Minister of
been denied or to terminate an employee on any National Defense, foreigners who violate the
ground other than the usual terms and provisions of this Title shall be subject to
conditions under which membership or immediate and summary deportation by the
continuation of membership is made available Commission on Immigration and Deportation
to other members; and shall be permanently barred from re-
entering the country without the special
Art. 303 [288] Penalties. — Except as otherwise permission of the President of the Philippines.
provided in this Code, or unless the acts complained
of hinge on a question of interpretation or Book V, Rule XXII, Sec. 20, as renumbered by
implementation of ambiguous provisions of an D.O. 40-H-13
existing collective bargaining agreement, any Sec. 20. Criminal Prosecution — The regular
violation of the provisions of this Code declared to courts shall have jurisdiction over any criminal
be unlawful or penal in nature shall be punished with action under Article 272 (now 287) of the Labor
a fine of not less than One Thousand Pesos Code, as amended, but subject to the required
(P1,000.00) nor more than Ten Thousand Pesos clearance from the DOLE on cases arising out of or
(P10,000.00), or imprisonment of not less than three related to a labor dispute pursuant to the Ministry of
months nor more than three years, or both such fine Justice (now Department of Justice) Circular No. 15,
and imprisonment at the discretion of the court. Series of 1982, and Circular No. 9, Series of 1986.
In addition to such penalty, any alien found guilty
shall be summarily deported upon completion of
service of sentence.
5. Rights and Conditions of
Membership
Any provision of law to the contrary
notwithstanding, any criminal offense punished in Note: No. 5 is not included in the 2019 Bar Syllabus
this Code shall be under the concurrent jurisdiction
of the Municipal or City Courts and the Courts of a. Nature of Relationship
First Instance.
MEMBER-LABOR UNION
Art. 304 [289] Who are Liable When Committed The nature of the relationship between the union and
by Other Than Natural Person — If the offense its members is fiduciary in nature, which arises from the
is committed by a corporation, trust, firm, dependence of the employee on the union, and from
partnership, association or any other entity, the the comprehensive power vested in the union with
penalty shall be imposed upon the guilty officer or respect to the individual. The union may be considered
officers of such corporation, trust, firm, partnership, but the agent of its members for the purpose of
association or entity. securing for them fair and just wages and good working
conditions. [Heirs of Cruz v. CIR, G.R. No. L-23331-32
(1969)]
Page 97 of 220
U.P. LAW BOC LABOR RELATIONS LABOR LAW
Admission and Discipline of Members Regional Office and the Bureau in accordance with
No arbitrary or excessive initiation fees or fines. No Rule III, Secs. 6 and 7 [Sec. 1(b), Rule I, Book V, IRR]
arbitrary or excessive initiation fees shall be required of
the members of a legitimate labor organization nor shall Independent Union
arbitrary, excessive or oppressive fine and forfeiture be A labor organization operating at the enterprise level
imposed. [Art. 250(e)] that acquired legal personality through independent
registration under Art. 234 of the Labor Code and Rule
Prohibition on subversive activities or membership III, Sec. 2-A [Sec. 1(x), Rule I, Book V
No labor organization shall knowingly admit as
members or continue in membership any individual National Union or Federation
who: A group of legitimate labor unions in a private
1. belongs to a subversive organization; or establishment organized for collective bargaining or for
2. who is engaged directly or indirectly in any dealing with employers concerning terms and
subversive activity; conditions of employment for their member union or
for participating in the formulation of social and
Unions cannot arbitrarily exclude qualified employment policies, standards and programs,
applicants registered with the BLR in accordance with Rule III
Unions are not entitled to arbitrarily exclude qualified Sec. 2-B[Sec. 1(ll), Rule I, Book V, IRR]
applicants for membership, and a closed--shop
provision would not justify the employer in discharging, Labor Union-Federation
or a union in insisting upon the discharge of, an Local unions do not owe their creation and existence to
employee whom the union thus refuses to admit to the national federation to which they are affiliated but,
membership, without any reasonable ground therefor. instead, to the will of their members, […] The local
Needless to say, if said unions may be compelled to unions remain the basic units of association, free to
admit new members, who have the requisite serve their own interests subject to the restraints
qualifications, with more reason may the law and the imposed by the constitution and by-laws of the national
courts exercise the coercive power when the employee federation, and free also to renounce the affiliation
involved is a long standing union member, who, owing upon the terms laid down in the agreement which
to provocations of union officers, was impelled to brought such affiliation into existence. [Philippine
tender his resignation, which he forthwith withdrew or Skylanders, Inc. v. NLRC, G.R. 127374 (2002)]
revoked. [Salunga v. CIR, G.R. No. L-22456 (1967)]
Chartered Local (Local Chapter)
Members who seek destruction of union lose right to A labor organization in the private sector operating at
remain as members the enterprise level that acquired legal personality
through registration with Regional Office [Sec. 1(j),
Inherent in every labor union, or any organization for Rule I, Book V, IRR]
that matter, is the right of self-preservation. When
members of a labor union, therefore, sow the seeds of A duly registered federation or national union may
dissension and strife within the union; when they seek directly create a local chapter by issuing a charter
the disintegration and destruction of the very union to certificate indicating the establishment of the local
which they belong, they thereby forfeit their rights to chapter. The chapter shall acquire legal personality only
remain as members of the union which they seek to for purposes of filing a petition for certification election
destroy. [Villar v. Inciong, No. L-50283-84 (1983)] from the date it was issued a charter certificate.
b. Union Chartering The chapter shall be entitled to all other rights and
privileges of a legitimate labor organization only
i. Definitions upon the submission of the following documents in
addition to its charter certificate:
1. The names of the chapter's officers, their
Affiliate
addresses, and the principal office of the chapter;
An independent union affiliated with a federated,
and
national union or a chartered local which was
2. The chapter's constitution and by-laws: Provided,
subsequently granted independent registration but did
That where the chapter's constitution and by-laws
not disaffiliate from its federation, reported to the
are the same as that of the federation or the
Page 98 of 220
U.P. LAW BOC LABOR RELATIONS LABOR LAW
Page 99 of 220
U.P. LAW BOC LABOR RELATIONS LABOR LAW
A local union has the right to disaffiliate from its Obligation to pay union dues is coterminous with
mother union or declare its autonomy. A local union, membership
being a separate and voluntary association, is free to The obligation of an employee to pay union dues is
serve the interests of all its members including the coterminous with his affiliation or membership. “The
freedom to disaffiliate or declare its autonomy from the employees’ check-off authorization, even if declared
federation to which it belongs when circumstances irrevocable, is good only as long as they remain
warrant, in accordance with the constitutional members of the union concerned”. A contract between
guarantee of freedom of association. [Malayang Samahan an employer and the parent organization as bargaining
ng mga Manggagawa sa M. Greenfield, Inc. v. Ramos, G.R. agent for the employees is terminated by the
No. 113907 (2000)] disaffiliation of the local of which the employees are
members. [Volkschel Labor Union v. BLR, No. L-45824
[The federation] is entitled to receive the dues from [the (1985)]
employer] as long as the [local] union is affiliated with
it and [the employer is] authorized by their employees Power to represent principal severed
(members of [the local] union) to deduct union dues. By [the local union’s disaffiliation from the federation],
[Volkschel Labor Union v. BLR, G.R. No. L-45824 the vinculum that previously bound the two entities was
(1985)] completely severed. [The federation] was divested of
any and all power to act in representation of the union.
Period of Disaffiliation Thus, any act performed by [the federation] affecting
Generally, a labor union may disaffiliate from the the interests and affairs of the [local union] is rendered
mother union to form a local or independent union without force and effect. [ANGLO v. Samana, G.R. No.
only during the 60-day freedom period immediately 118562 (1996)]
preceding the expiration of the CBA. However, even
before the onset of the freedom period, disaffiliation SUBSTITUTIONARY DOCTRINE
may be carried out when there is a shift of allegiance on The “substitutionary” doctrine provides that the
the part of the majority of the members of the union. employees cannot revoke the validly executed collective
[Alliance of Nationalist and Genuine Labor Organization v. bargaining contract with their employer by the simple
Samahan ng mga Manggagawang Nagkakaisa sa Manila Bay expedient of changing their bargaining agent. And it is
Spinning Mills, G.R. No. 118562 (1996)] in the light of this that the phrase “said new agent would
have to respect said contract” must be understood. It
[A] local union which has affiliated itself with a only means that the employees, thru their new
federation is free to sever such affiliation anytime and bargaining agent, cannot renege on their collective
such disaffiliation cannot be considered disloyalty. In bargaining contract, except of course to negotiate with
the absence of specific provisions in the federation’s management for the shortening thereof. [Benguet
constitution prohibiting disaffiliation or the declaration Consolidated v. BCI Employees and Workers Union-PAFLU,
of autonomy of a local union, a local may dissociate G.R. No. L-24711 (1968)]
with its parent union. [Malayang Manggagawa sa M.
Greenfield v. Ramos, G.R. No. 113907 (2000)] Conditions to apply the doctrine
1. change of bargaining agent (through affiliation,
EFFECT OF DISAFFILIATION disaffiliation, or other means); and
2. existing CBA with the previous bargaining agent
On legal personality [Benguet Consolidated v. BCI Employees and
A registered independent union retains its legal Workers Union-PAFLU, G.R. No. L-24711
personality while a chartered local loses its legal (1998)]
personality unless it registers itself.
Effects:
No effect on CBA 1. new bargaining agent cannot revoke and must
A disaffiliation does not disturb the enforceability and respect the existing CBA; and
administration of a collective agreement; it does not 2. it may negotiate with management to shorten the
occasion a change of administrators of the contract nor existing CBA’s lifetime
even an amendment of the provisions thereof.
[Volkschel Labor Union v. BLR, No. L-45824 (1985)]
Other factors:
A settled formulation of the doctrine of piercing the 1. Geography and Location
corporate veil is that when two business enterprises are 2. Policy of avoiding fragmentation of the bargaining
owned, conducted, and controlled by the same parties, unit
both law and equity will, when necessary to protect the
rights of third parties, disregard the legal fiction that Globe Doctrine
these two entities are distinct and treat them as identical A practice designated as the “Globe doctrine,”
or as one and the same. [Ang Lee v. Samahang Manggagawa sanctions the holding of a series of elections, not for the
ng Super Lamination, G.R. No. 193816 (2016)] purpose of allowing the group receiving an overall
majority of votes to represent all employees, but for the
Determining whether or not to establish separate specific purpose of permitting the employees in each of
bargaining units the several categories to select the group which each
The fact that the businesses are related, that some of chooses as a bargaining unit. [Kapisanan ng mga
the employees are the same persons working in the Manggagawa sa Manila Road Co. v. Yard Crew Union, G.R.
other company and the physical plants, offices and Nos. L-16292-94 (1960)]
facilities are in the same compound are NOT sufficient
to justify piercing the corporate veil. [Indophil Textile Rationale: Highly skilled or specialized technical workers
Mills Workers Union v. Calica, G.R. No. 96490 (1992)] ) may choose to form their own bargaining unit because
they may be in better position to bargain with the
Spun-off corporations employer considering the market value of their skills.
The transformation of the companies is a management
prerogative and business judgment which the courts Community or Mutuality of Interests
cannot look into unless it is contrary to law, public The basic test in determining the appropriate bargaining
policy or morals. [...] Considering the spin-offs, the unit is that a unit, to be appropriate, must affect a
companies would consequently have their respective grouping of employees who have substantial, mutual
and distinctive concerns in terms of the nature of work, interests in wages, hours, working conditions and other
wages, hours of work and other conditions of subjects of collective bargaining. [UP v. Ferrer-Calleja,
employment. [...] The nature of their products and G.R. No. 96189, (1992)]
scales of business may require different skills, volumes
of work, and working conditions which must Rationale: There are greater chances of success for the
necessarily be commensurate by different collective bargaining process. The bargaining unit is
compensation packages. [San Miguel Union v. Confesor, designed to maintain the mutuality of interest among
G.R. No. 111262 (1996)] the employees in such unit.
TEST TO DETERMINE THE When the interest between groups has changed over
CONSTITUENCY OF AN APPROPRIATE time, there is reason to dissolve, change or expand a
BARGAINING UNIT – 4 Factors: certain bargaining unit.
1. Will of the Employees (Globe Doctrine)
2. Affinity and unity of employees’ interest Prior Collective Bargaining History
(Substantial Mutual Interests Rule) The existence of a prior collective bargaining history is
3. Prior collective bargaining history neither decisive nor conclusive in the determination of
4. Employment status [Democratic Labor Association v. what constitutes an appropriate bargaining unit. [Sta.
Cebu Stevedoring Co. Inc, G.R. No. L-10321 (1958); Lucia East Commercial Corporation v. SOLE, G.R. No.
University of the Philippines v. Ferrer-Calleja, G.R. No. 162355 (2009)]
96189 (1992)]
Employment Status
Note: Where the employment status was not at issue but Among the factors to be considered [is the]
the nature of work of the employees concerned; the employment status of the employees to be affected
Court stressed the importance of the 2nd factor. [Belyca [regular, casual, seasonal, probationary, etc.], that is the
Corp. v. Calleja, G.R. No. 77395 (1988)] positions and categories of work to which they belong
[....] [Belyca Corp. v. Calleja, G.R. No. 77395 (1988)]
Note: Rule VIII, Sec. 14 (f) and Rule IX, Sec. 6 refer to
employees as those employed 3 months prior to the
issuance of the order/the filing of the petition for
certification election while Rule IX, Sec. 2 reckon the
period of employment from the “time of filing the
petition”. This difference has not been resolved in any
case before the Supreme Court.
If the Regional Director finds it deficient, he/she shall EFFECT OF SEBA CERTIFICATION (Sec. 4.2)
advise the requesting union or local to comply within Upon the issuance of the [SEBA Certification], the
ten (10) days from notice. Failure to comply within the certified union or local shall enjoy all the rights and
prescribed period shall be deemed withdrawal of the privileges of an exclusive bargaining agent of all the
request. employees in the covered bargaining unit.
If Unorganized Establishment (Sec. 4) The certification shall bar the filing of a [PCE] by any
a. Finding of only 1 legitimate labor organization – labor organization for a period of one (1) year from the
Regional Director shall call a conference within date of its issuance. Upon expiration of this one-year
five (5) working days for the SUBMISSION of: period, any legitimate labor organization may file a
i. Names of employees in the covered [PCE] in the same bargaining unit represented by the
bargaining unit who signify support for certified labor organization, unless a [CBA] between the
certification; [and these] employees employer and the certified labor organization was
comprise at least majority of the number of executed and registered with the Regional Office in
employees in the covered bargaining unit; accordance with Rule XVII.
and
ii. Certification under oath by the president of b. Consent Election
the requesting union or local that all
documents submitted are true and correct Consent Election means the election voluntarily
based on personal knowledge agreed upon by the parties with or without the
b. Failure to Complete Requirements for SEBA intervention by DOLE [Sec. 1(i), Rule I, Book V, IRR]
Certification - the request for SEBA certification
shall be referred to the election officer for the Procedure [Sec. 11, Rule VIII, Book V, IRR]
conduct of election pursuant to Rule IX of this 1. The parties may agree to hold a consent election
rules. a. Where no petition for certification election
was filed; or
Note: If there is more than one Legitimate Labor b. Where a petition for certification election had
Organization, Art. 269 applies been filed, and upon the intercession of Med-
Arbiter [Sec. 25, Rule VIII, Book V, IRR]
If Organized Establishment (Sec. 6) 2. Mediator-Arbiter shall call for the consent election,
If the Regional Director finds the establishment reflecting the parties’ agreement and the call in the
organized he/she shall refer it to the mediator- minutes of the conference. Regional Director or
arbitrator for determination and propriety of authorized representative shall determine the
conducting a certification election. Election Officer by raffle in the presence of
representatives of the contending unions if they so
4. Regional Director shall act on the submission (Sec. desire
4.1) 3. First pre-election conference is scheduled within
ten (10) days from the date of the agreement.
The request shall be referred to Subsequent conferences may be called to expedite
Incomplete
Election Officer for the conduct of and facilitate the holding of the consent election.
requirements
election pursuant to Rule IX.
Complete Regional Director shall issue a
requirements certification as SEBA
c. Certification Election
Certification Election is the process of determining,
5. Regional Director shall post the SEBA
through secret ballot, the sole and exclusive
Certification (Sec. 4.1)
representative of the employees in an appropriate
Period: Fifteen (15) consecutive days
bargaining unit for purposes of collective bargaining or
Where: At least two (2) conspicuous places in the
negotiation. [Sec. 1(i), Rule I, Book V, IRR]
establishment or covered bargaining unit.
The principle of the employer as by-stander shall be Where two or more petitions involving the same
strictly observed throughout the conduct of bargaining unit [Sec. 2, Rule VIII, Book V, IRR]:
certification election. The employer shall not harass,
intimidate, threat[en], or coerce employees before, Filed in one Automatically consolidated with
during and after elections. [Sec. 1, Rule IX, Book V, Regional [Med-Arbiter] who first acquired
IRR] Office jurisdiction
The Regional Office in which the
However, manifestation of facts that would aid the Filed in
petition was first filed shall exclude
[Med-Arbiter] in expeditiously resolving the petition different
all others; [...] The latter shall indorse
such as existence of a contract-bar, one year bar or Regional
the petition to the former for
deadlock bar may be considered. [Sec. 1, Rule VIII, Offices
consolidation
Book V, IRR]
Procedure: CERTIFICATION ELECTION IN
The Contract-Bar Rule shall apply in any of the AN UNORGANIZED ESTABLISHMENT
following: (1) when there exists an unexpired registered
CBA; or (2) when there is no challenge on the Unorganized Establishment
representation status of the incumbent union during the [It is an] establishment where there is no certified
freedom period. [D.O. No. 40-1-15] bargaining agent. [Art. 269]
Discretionary rule
Procedure: CERTIFICATION ELECTION IN The [Med-Arbiter], in the exercise of sound discretion,
AN ORGANIZED ESTABLISHMENT may order a certification election notwithstanding the
failure to meet the [25%] requirement [in petitions for
Organized Establishment certification election in an organized establishment].
Refers to an enterprise where there exists a recognized [Scout Albano Memorial College v. Noriel, G.R. No. L-48347
or certified sole and exclusive bargaining agent. [Sec. (1978)]
1(ll), Rule I, Book V, IRR]
Inapplicable to Motions for Intervention
Procedure [Art. 268] [The] requisite written consent of at least 20% (now
1. File a verified petition questioning the majority. 25%) of the workers in the bargaining unit applies to
2. It must be filed within the 60-day period before certification election only, and not to motions for
expiration of CBA (freedom period) intervention. Nowhere in the legal provisions [and in
3. Supported by written consent of at least 25% of the Omnibus Rules] does it appear that a motion for
ALL employees in the bargaining unit (substantial intervention in a certification election must be
support) accompanied by a similar written consent. [PAFLU v.
4. Med-Arbiter shall automatically order an election. Calleja, G.R. No. 79347 (1989)]
SECTION 2. Raffle of the Case. — Within The contending unions may agree to the holding of
twenty-four (24) hours from receipt of the an election, in which case it shall be called a consent
notice of entry of final judgment granting election. The mediator-arbiter shall forthwith call
the conduct of a certification election, the for the consent election, reflecting the parties'
Regional Director shall cause the raffle of agreement and the call in the minutes of the
the case to an Election Officer who shall conference
have control of the pre-election
General Procedure
conference and election proceedings. (1a) The mediator-arbiter shall, immediately forward
the records of the petition to the regional director
or his/her 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.
With the exception of aforementioned provisions that specifically apply only for Certification
Election or Consent Election respectively, Rule IX, on the Conduct of Certification, Secs. 3 –
21, applies to both certification and consent elections
Voluntarily agreed upon by the parties, with or
Conduct Ordered by the DOLE
without the intervention of DOLE
3. Statement that none of the grounds for dismissal Effect of Filing Memorandum of Appeal
[...] in Sec. 14 exists; Stays the holding of any certification election. [Sec. 23,
4. Names of the contending labor unions [...] in the Rule VIII, Book V, IRR]
following order:
a. Petitioner unions in the order of the date of Reply to Appeal
filing of their respective petitions Reply by any party to the petition shall be filed within
b. The forced intervenor ten (10) days from receipt of the memorandum of
c. “No union” appeal […] and filed directly with the office of the
5. [If] the local/chapter is one the contending unions, Secretary. [Sec. 22, Rule VIII, Book V, IRR]
a directive to an unregistered local/chapter or a
federation/national union representing all When no appeal is filed
unregistered local/chapter to personally submit to The decision shall be final and executory if no appeal is
the Election Officer its certificate of creation at filed within the ten (10) day period. [Sec. 21, Rule VIII,
least five (5) working days before the actual Book V, IRR]
conduct of the certification election. [This is to
afford an individual employee-voter an informed Decision of the Secretary
choice.] Period to decide: Fifteen (15) days from receipt of
6. Non-submission of this requirement as certified by entire records of the petition to decide the appeal.
Election Officer shall disqualify the local/ chapter
from participating in the certification election Secretary’s decision shall be final and executory within
7. Directive to the employer and the contending ten (10) days from receipt by parties. [Sec. 23, Rule VIII,
unions to submit within ten (10) days from receipt Book V, IRR]
of order:
a. The certified list of employees in the Note: No motion for reconsideration of decision shall
bargaining unit, or where necessary, be entertained. [Sec. 23, Rule VIII, Book V, IRR]
b. Payrolls covering the members of the
bargaining unit for the last three (3) months Implementation of decision
prior to the issuance of the order General Rule: Shall not be stayed
Exception: Restrained by appropriate court [Sec. 24, Rule
f. Appealing the Order Granting or VIII, Book V, IRR]
Denying the Conduct of
g. Raffling of the Case to an Election
Certification Election [Sec. 19-20,
Officer
RULE VIII, BOOK V, IRR]
Regional Director shall cause the raffle of the case to an
Form of appeal: Election Officer who shall have control of:
1. verified under oath 1. Pre-election conference; and
2. consists of a memorandum of appeal specifically 2. Election proceedings
stating the grounds relied upon by appellant with
the supporting arguments and evidence When: Within twenty-four (24) hours from receipt of
notice of entry of final judgment granting the conduct
Dismissed or of a certification election [Sec. 2, Rule IX, Book V, IRR]
Organized denied Appeal to
Granted Office of
Dismissed or Secretary
h. Pre-Election Conference
Unorganized denied
Notice of Pre-Election Conference [Sec. 3, Rule IX,
Granted Unappealable
Book V, IRR]
The Election Officer shall cause the issuance of notice
When: Within ten (10) days from receipt of the order
of pre-election conference upon the contending unions
[of the Med-Arbiter].
When: Within twenty-four (24) hours from the
Where: Regional Office where the petition originated
[Election Officer’s] receipt of assignment for the
conduct of a certification election
Included: Requisites:
1. Starting from the opening to the closing of the 1. There must be a valid certification or consent
polls election
2. Counting, tabulation and consolidation of votes
Valid Election: At least majority of the number of
Excluded: eligible voters have cast their votes (VOTES CAST)
1. Period for the final determination of the challenged [Sec. 17, Rule IX, Book V, IRR]
votes
2. Canvass of the challenged votes [Sec. 1(q), Rule I, 2. The winning union must garner majority of the
Book V, IRR] VALID VOTES CAST [Sec. 16, Rule IX, Book V,
IRR]
l. Canvassing of Votes [Sec. 15, Rule
Winning union certifies as SEBA if there is no protest
IX, Book V, IRR] [Sec. 16, Rule IX, Book V, IRR]
Election precincts shall open and close on the date and The [winning union] shall be certified as the [SEBA] in
time agreed upon during the pre-election conference. the appropriate bargaining unit within five (5) days
from date of election, provided no protest is recorded
The opening and canvass of votes shall proceed in the minutes of the election.
immediately after the precincts have closed
When winning choice is local chapter without
Procedure [Sec. 14, Rule IX, Book V, IRR] certificate of creation of chartered local
1. Election Officer shall count and tabulate the votes
in the presence of the representatives of the It must submit its DOLE issued certificate of creation
contending unions. within five (5) days from the conclusion of election
2. Upon completion of canvass, the Election Officer
shall give each representative a copy of the minutes Note: Please note that valid votes differ from mere votes
of the election proceedings and results of the as the former excludes spoiled ballots.
election.
3. Ballots and tally sheets shall be sealed in an Abstention: refers to a blank or unfilled ballot validly
envelope and signed by the Election Officer and cast by an eligible voter. It is not considered as a
the representatives of the contending unions and negative vote. However, it shall be considered a valid
transmitted to the Med-Arbiter together with the vote for purposes of determining a valid election. [Sec.
minutes and results of the election within twenty- 1(a), Rule I, Book V, IRR]
four (24) hours from the completion of the
canvass. Spoiled Ballot: Refers to a ballot that is torn, defaced,
or contains markings which can lead another to clearly
Election conducted in more than one region identify the voter who casts such vote. [Sec. 1(ww), Rule
Consolidation of results shall be made within fifteen I, Book V, IRR]
(15) days from the conduct thereof.
Effect of Failure of Election [Sec. 19, Rule IX, Book 1. No protests were filed, or even if one was filed, [it]
V, IRR] was not perfected within the five-day period
Shall not bar the filing of a motion for the immediate 2. No challenge or eligibility issue was raised, or even
holding of a certification or consent election within six if one was raised, [its] resolution will not materially
(6) months from date of declaration of failure of change the results of the elections.
election.
Winning union shall have the rights, privileges, and
Note: Under Sec. 1(tt), Rule I, Book V, a RE-RUN obligations of a duly certified collective bargaining
ELECTION “shall likewise refer to an election agent from the time the certification is issued.
conducted after a failure of election has been declared
by the Election Officer and/or affirmed by the [Med- Majority of valid votes cast results in “no Union”
Arbiter].” Thus, under the Rules, this is the other obtaining majority
definition of a Re-Run Election (see p. 154 to compare).
Med-Arbiter shall declare such fact in the order
Motion for another election after failure of election
[Sec. 20, Rule IX, Book V, IRR] o. Appeal from Certification Election
Within twenty-four (24) hours from receipt of the Orders [Art. 272]
motion, the Election Officer shall:
1. Immediately schedule another election within Who appeals: Any party to an election
fifteen (15) days from receipt of motion What is appealed: Order or results of the election
2. Cause posting of the notice of election Appeal to: Directly to SOLE
a. At least ten (10) days prior to the scheduled
date of election Ground: Rules and regulations established by the
b. In two (2) most conspicuous places in the SOLE for the conduct of the election have been
establishment violated.
Same guidelines and list of voters shall be used. 4. Bars to a Certificate Election
Nullification of Election Results Petition for certification may be filed:
It is precisely because respect must be accorded to the General Rule: Anytime
will of labor thus ascertained that a general allegation of Exceptions:
duress is not sufficient to invalidate a certification a. One-year bar rule
election; it must be shown by competent and credible b. Negotiation bar rule
proof. [United Employees Union of Gelmart Industries c. Deadlock bar rule
Philippines (UEUGIP) v. Noriel, No. L-40810 (1975)] d. Contract bar rule
n. Proclamation and Certification of See: Grounds for denying a Petition for Certification
the result of the election Election
a petition for certification election by any labor enterprise collective bargaining or multi-employer
organization for a period of one (1) year from the date bargaining shall not be affected by a subsequent [CBA]
of its issuance.” [Sec. 4.2, Rule VII, Book V, IRR] executed between the same bargaining agent and the
employer during the same five-year period. [Sec. 7, Rule
b. Negotiation Bar Rule XVII, Book V, IRR]
No certification of election may be filed when: Despite an agreement for a CBA with a life of more
1. Within 1 year after the valid certification election than five years, either as an original provision or by
2. The DULY CERTIFIED union has amendment, the bargaining union’s exclusive
COMMENCED AND SUSTAINED bargaining status is effective only for five years and can
negotiations in good faith with the employer be challenged within sixty (60) days prior to the
3. In accordance with Art. 261 of the Labor Code Sec. expiration of the CBA’s first five years. [FVC Labor
3(b), Rule VIII, Book V Union-PTGWO v. SANAMA-FVC-SIGLO, G.R. No.
176249 (2009)]
c. Deadlock Bar Rule The rule is that despite the lapse of the formal
effectivity of the CBA the law still considers the same
No certification of election may be filed when: as continuing in force and effect until a new CBA shall
1. The incumbent or certified bargaining agent is a have been validly executed. Hence, the contract bar rule
party; still applies. . [Colegio de San Juan de Letran v. Association of
2. A bargaining deadlock had been: Employees, G.R. No. 141471, (2000)]
a. Submitted to conciliation or arbitration or;
b. Had become the subject of a valid notice of Petition for cancellation of union registration
strike or lockout [Sec. 3(c), Rule VIII, Book V, DOES NOT suspend or prevent filing of
IRR] certification election.
A petition for cancellation of union registration shall
A “deadlock” is defined as the “counteraction of things not:
producing entire stoppage; a state of inaction or of 1. suspend the proceedings for certification election;
neutralization caused by the opposition of persons or nor
of factions (as in government or voting body): 2. prevent the filing of a petition for certification
standstill.” [...] The word is synonymous with the word election. [Art. 246]
impasse which [...] “presupposes reasonable effort at
good faith bargaining which, despite noble intentions, A certification election can be conducted despite
does not conclude in agreement between the parties” pendency of a petition to cancel the union registration
[Divine World University v. SOLE, G.R. No. 91915 certificate. For the fact is that at the time the [union],
(1992)] whose registration certificate is sought to be cancelled,
filed its petition for certification, it still had the legal
d. Contract Bar Rule personality to perform such act absent an order
BLR shall not entertain any petition for certification directing its cancellation. [Association of Court of Appeals
election or any other action which may disturb the Employees v. Calleja, G.R. No. 94716, (1991)]
administration of DULY REGISTERED existing
collective bargaining agreements affecting the parties. Prejudicial Question Rule
except under Arts. 264, 265, and 268 [(60-day freedom Labor claims cannot proceed independently of:
period)]. [Art. 238] 1. A bankruptcy liquidation proceeding; and
2. Suspension order in a rehabilitation case. The law
No petition for certification election may be filed when is clear, upon the creation of a management
a [CBA] between the employer and a SEBA has been committee or the appointment of a rehabilitation
registered in accordance with Art. 237. Where such receiver, all claims for actions “shall be suspended
[CBA] is registered, the petition may be filed only within accordingly.” No exception in favor of labor claims
sixty (60) days prior to its expiry. [Sec. 3(d), Rule VIII, is mentioned in the law. Since the law makes no
Book V, IRR]. distinction or exemptions, neither should this
Court.
The five-year representation status acquired by an
incumbent bargaining agent either through single
In RA 10142, a claim refers to “all claims or demands in the unfair labor practice case, the union selected
of whatever nature or character against the debtor or its would be decertified and the whole election
property, whether for money or otherwise, liquidated or proceedings would be rendered useless and nugatory.
unliquidated, fixed or contingent, matured or [B.F. Goodrich Phils. Marikina v. B.F. Goodrich Confidential
unmatured, disputed or undisputed, including, but not and Salaried Employees Union, G.R. No. L-34069-70,
limited to; (1) all claims of the government, whether (1973)]
national or local, including taxes, tariffs and customs
duties; and (2) claims against directors and officers of
the debtor arising from acts done in the discharge of
their functions falling within the scope of their
authority: Provided, That, this inclusion does not
prohibit the creditors or third parties from filing cases
against the directors and officers acting in their personal
capacities.”
Different types of Attorney’s Fees An amount, equivalent to union dues, which a non-
Ordinary Extraordinary union member pays to the union because he benefits
Indemnity for damages from the CBA negotiated by the union. [Azucena]
Reasonable
ordered by the court to
compensation paid to a Rationale for Allowing Agency Fees
be paid by the losing
lawyer for legal services The legal basis of the union’s right to agency fees is
party to the winning
rendered neither contractual nor statutory, but quasi-contractual,
party
Agreed upon by the deriving from the established principle that non-union
Awarded by the NLRC employees may not unjustly enrich themselves by
parties
Payable to the lawyer Payable to the client benefiting from employment conditions negotiated by
Not limited (freedom to Limited by Art. 111 to the bargaining union. [Holy Cross of Davao College, Inc v.
contract) 10% Hon. Joaquin, G.R. No. 110007 (1996)]
[Kaisahan at Kapatiran ng mga Manggagawa at Kawani sa
MWC-East Zone Union v. Manila Water, G.R. No. 174179 When Agency Fee Assessed
(2011)] If such non-union member accept the benefits under
the collective bargaining agreement. [Art. 259(e)]
There are two concepts of attorney's fees. In the
ordinary sense, attorney's fees represent the reasonable Measure of Fee
compensation paid to a lawyer by his client for the legal A reasonable fee equivalent to the dues and other fees
services rendered to the latter. On the other hand, in its paid by members of the recognized collective
extraordinary concept, attorney's fees may be awarded bargaining agent. [Art. 259(e)]
by the court as indemnity for damages to be paid by the
losing party to the prevailing party, such that, in any of Requirements:
the cases provided by law where such award can be a. Non-member of SEBA
made, e.g., those authorized in Art. 2208 of the Civil b. Member of Collective Bargaining Unit
Code, the amount is payable not to the lawyer but to c. Reasonable fee equivalent to the dues and other
the client, unless they have agreed that the award shall fees paid by members
pertain to the lawyer as additional compensation or as d. Acceptance of CBA benefits
part thereof. [Masmud v NLRC, G.R. No. 183385 (
2009)] Mandatory Activities
Definition: A judicial process of settling dispute laid
In Masmud, the contingency agreement between lawyer down by the law. [Vengco v. Trajano, G.R. No. 74453
and client consisting of 39% of the monetary award was (1989)]
deemed not unconscionable by the SC.
Placement of re-negotiations for a CBA under
Agency Fees compulsory arbitration does not make it a “mandatory
Art. 259 (3) – Nothing in this Code or in any other activity”. [Galvadores v. Trajano, No. 70067 (1986)]
law shall stop the parties from requiring membership
in a recognized collective bargaining agent as a It dispenses with the requirement of the individual
condition for employment, except those employees written authorization duly signed by the employee
who are already members of another union at the [Art. 250(o)]
time of the signing of the collective bargaining
agreement. Employees of an appropriate bargaining 2. Collective Bargaining
unit who are not members of the recognized
collective bargaining agent may be assessed a GENERAL CONCEPTS
reasonable fee equivalent to the dues and other fees
paid by members of the recognized collective Constitutional Policies
bargaining agent, if such non-union members accept a. [The State] shall guarantee the rights of all workers
the benefits under the collective bargaining to self-organization, collective bargaining and
agreement: Provided, That the individual negotiations […] [par. 2, Sec. 3, Art. XIII, 1987
authorization required under Article 242, paragraph Constitution]
(o) of this Code shall not apply to the non-members b. The State shall promote the principle of shared
of the recognized collective bargaining agent; responsibility between workers and employers and
the preferential use of voluntary modes in settling
disputes, including conciliation, and shall enforce preventing the latter’s closure. [...] It was PALEA, as the
their mutual compliance therewith to foster exclusive bargaining agent of PALs ground employees,
industrial peace. [par. 3, Sec. 3, Art. XIII, 1987 that voluntarily entered into the CBA with PAL. It was
Constitution] also PALEA that voluntarily opted for the 10-year
suspension of the CBA. Either case was the union’s
Statutory Policies exercise of its right to collective bargaining. The right
a. To promote and emphasize the primacy of free to free collective bargaining, after all, includes the right
collective bargaining and negotiations, including to suspend it. [Rivera v. Espiritu, G.R. No. 135547
voluntary arbitration, mediation and conciliation, (2000)]
as modes of settling labor or industrial disputes.
[Art. 218-A(a)] a. Duty to Bargain Collectively
b. It is the policy of the State to promote and
emphasize the primacy of free and responsible i. In General
exercise of the right to self-organization and
collective bargaining, either through single
Definition
enterprise level negotiations or through the
creation of a mechanism by which different Art. 263. Meaning of duty to bargain collectively.
employers and recognized certified labor unions in — The duty to bargain collectively means the
their establishments bargain collectively. [Book V, performance of a mutual obligation to meet and
IRR Rule XVI, Sec. 1] convene promptly and expeditiously in good faith
c. To encourage a truly democratic method of for the purpose of negotiating an agreement with
regulating the relations between the employers and respect to wages, hours of work, and all other terms
employees by means of agreements freely entered and conditions of employment including proposals
into through collective bargaining, no court or for adjusting any grievances or questions arising
administrative agency or official shall have the under such agreement and executing a contract
power to set or fix wages, rates of pay, hours of incorporating such agreements if requested by either
work or other terms and conditions of party, but such duty does not compel any party to
employment, except as otherwise provided under agree to a proposal or to make any concession.
this Code [Art. 218-B]
Jurisdictional Preconditions on Duty To Bargain
Definition, Nature, and Purpose 1. Possession of the status of majority representation
Collective bargaining which is defined as negotiations of the employees’ representative in accordance
towards a collective agreement, is one of the democratic with any of the means of selection or designation
frameworks under the [Labor] Code, designed to provided for by the Code;
stabilize the relations between labor and management 2. Proof of majority representation; AND Demand to
and to create a climate of sound and stable industrial bargain under Art. 261(a) [Kiok Loy v. NLRC, G.R.
peace. It is a mutual responsibility of the employer and No. L-54334 (1986)]
the Union and is characterized as a legal obligation.
[Kiok Loy v. NLRC, G.R. No. L-54334 (1986)] [Citing Art. 267], only the labor organization designated
or selected by the majority of the employees in an
The institution of collective bargaining is [...] a prime appropriate collective bargaining unit is the exclusive
manifestation of industrial democracy at work. The two representative of the employees in such unit for the
parties to the relationship, labor and management, purpose of collective bargaining. The union is
make their own rules by coming to terms [...] to govern admittedly not the exclusive representative of the
themselves in matters that really count. [United Employees majority of the employees [...], hence, it could not
Union of Gelmart Industries v. Noriel, G.R. No. L-40810 demand from [the employer] the right to bargain
(1975)] collectively in their behalf. [Phil. Diamond Hotel and Resort
Inc v. Manila Diamond Hotel and Employees Union, G.R.
Right to Suspend Free Collective Bargaining No. 158075 (2006)]
The assailed PAL-PALEA agreement was the result of
voluntary collective bargaining negotiations undertaken
in the light of the severe financial situation faced by the
employer, with the peculiar and unique intention of not
merely promoting industrial peace at PAL, but
Meaning of Bargaining in Good Faith [Hongkong and Shanghai Banking Corp. Employees Union v.
[T]here is no per se test of good faith in bargaining. NLRC, G.R. No. 125038 (1997)]
Good faith or bad faith is an inference to be drawn
from the facts. [Union of Filipino Employees v. Nestle Blue-Sky Bargaining
Philippines, Inc., G.R. Nos. 158930-31 (2008)][T]he Blue-Sky Bargaining is defined as "unrealistic and
failure to reach an agreement after negotiations unreasonable demands in negotiations by either or both
continued for a reasonable period does not establish a labor and management, where neither concedes
lack of good faith. The laws invite and contemplate a anything and demands the impossible." It actually is not
collective bargaining contract, but they do not compel collective bargaining at all. [Roberts Dictionary of
one. [Tabangao Shell Refinery Employees Association v. Industrial Relations as cited in Standard Bank Chartered
Pilipinas Shell Petroleum Corporation, G.R. No. 170007 Employees Union v. Confesor, G.R. No. 114974 (2004)]
(2014)]
Surface Bargaining
Duty to Bargain does not include: Surface bargaining is defined as "going through the
1. Any legal duty [on the employer] to initiate contract motions of negotiating," without any real intent to
negotiation [Kiok Loy v NLRC, G.R. No. L-54334 reach an agreement. [Roberts Dictionary of Industrial
(1986)] Relations as cited in Standard Bank Chartered Employees
2. The obligation to reach an agreement: While the Union v. Confesor, supra.]
law makes it an obligation for the employer and the
employees to bargain collectively with each other, It violates the Act's requirement that parties negotiate
such compulsion does not include the commitment in "good faith." It is prohibited because, as one
to precipitately accept or agree to the proposals of commentator explained: The bargaining status of a
the other. All it contemplates is that both parties union can be destroyed by going through the motions
should approach the negotiation with an open of negotiating almost as easily as by bluntly withholding
mind and make reasonable effort to reach a recognition […] As long as there are unions weak
common ground of agreement. [Union of Filipro enough to be talked to death, there will be employers
Employees v. Nestle, G.R. Nos. 158930-31 (2008)] who are tempted to engage in the forms of collective
bargaining without the substance. [K-MART Corporation
Evading the Mandatory Subjects of Bargaining v. NLRB, 1980 626 F.2d 704]
The refusal to negotiate a mandatory subject of
bargaining is an unfair labor practice although either Individual Bargaining
party has every desire to reach agreement and earnestly It is an unfair labor practice for an employer operating
and in all good faith bargains to that end. […] However, under a CBA to negotiate with his employees
the duty to bargain does not obligate the parties to make individually. That constitutes interference because the
concessions or yield a position fairly held. [Azucena] company is still under obligation to bargain with the
union as the bargaining representative.
The duty to bargain is limited to mandatory bargaining
subjects; as to other matters, he is free to bargain or not Individual bargaining contemplates a situation where
to bargain. Over mandatory subjects, a party may insist the employer bargains with the union through the
on bargaining, even to the point of deadlock, and his employees instead of the employees through the union.
insistence will not be construed as bargaining in bad [The Insular Life Assurance Co. Ltd., Employees Assn. v.
faith. Insular Life Assurance Co. Ltd, G.R. No. L-25291 (1971)]
Failure to Reply as Indicia of Bad Faith Whether the agreement concerns a mandatory subject
[The employer’s] refusal to make a counter-proposal of bargaining depends not on its form, but on its
[...] is an indication of its bad faith. Where the employer practical effect. [Azucena]
did not even bother to submit an answer to the
bargaining proposals of the union, there is a clear Importance of Determining the character of the
evasion of the duty to bargain collectively, [...] making Bargaining Issue
it liable for unfair labor practice. [General Milling Corp. v. The question as to what are mandatory and what are
CA, G.R. No. 146728 (2004)] merely permissive subjects of collective bargaining is of
significance on the right of a party to insist on his
v. Bargainable Issues position to the point of stalemate. A party may refuse
to enter into a collective bargaining contract unless it
Mandatory Bargainable Issues includes a desired provision as to a matter which is a
1. Wages mandatory subject of collective bargaining. [But] a
2. Hours of work refusal to contract unless the agreement covers a matter
3. All other terms and conditions of employment which is not a mandatory subject is in substance a
including proposals for adjusting any grievances or refusal to bargain about matters which are mandatory
questions arising under such agreement [Art. 263] subjects of collective bargaining; and it is no answer to
the charge of refusal to bargain in good faith that the
Examples: insistence on the disputed clause was not the sole cause
1. Vacations and holidays of the failure to agree or that agreement was not
2. Bonuses reached with respect to other disputed clauses.
3. Seniority, Transfer, and Layoffs
4. Employee workloads Such refusal will not be deemed as an unfair labor
5. Work rules and regulations practice. However, if a party refuses to contract based
6. Union security arrangements on an issue which is not a mandatory bargainable issue,
7. Pension and insurance benefits for active the party will be guilty of ULP. [Samahang Manggagawa sa
employees Top Form v. NLRC, G.R. No. 113856 (1998)]
General Rule: [W]here the CBA is clear and iii. Administration and Enforcement of
unambiguous, it becomes the law between the parties CBA
and compliance therewith is mandated by the express
policy of the law. [Zuellig Pharma Corporation v. Alice Sibal, Substandard CBA
G.R. No.173587 (2013)] A CBA that falls below the minimum standards
required by law is prohibited. Nonetheless, RA 9481
Exception: If the words appear to be contrary to the removed substandard CBAs as a ground for the
evident intention of the parties, the latter shall prevail cancellation of registration of union registration.
over the former. [Kimberly Clark Phils. v. Lorredo,
G.R. No. 103090 (1993)] Note: A substandard CBA cannot bar a petition for
certification election under the contract-bar rule. [Prof.
ii. Mandatory Provisions of the CBA Battad]
[I]n the absence of the specific provision of law assets or enterprise is not legally bound to absorb in its
prohibiting retroactivity of the effectivity of the arbitral employ the employees of the seller of such assets or
awards issued by the Secretary of Labor pursuant to enterprise, the parties are liable to the employees if the
Art. 263(g) of the Labor Code, [the Secretary] is deemed transaction between the parties is colored or clothed
vested with plenary powers to determine the effectivity with bad faith. [Sundowner Development Corporation v.
thereof. Drilon, G.R. No. 82341 (1989)]
[T]o deprive respondent Secretary of such power and Where the change of ownership is in bad faith or is used
discretion would run counter to the well-established to defeat the rights of labor, the successor-employer is
rule that all doubts in the interpretation of labor laws deemed to have absorbed the employees and is held
should be resolved in favor of labor. In upholding the liable for the transgressions of his or her predecessor
assailed orders of respondent Secretary, this Court is [Philippine Airlines, Inc. v. NLRC, G.R. No. 125792
only giving meaning to this rule. Indeed, the Court (1998)]
should help labor authorities in providing workers
immediate benefits, without being hampered by General Rule: An innocent transferee of a business
arbitration or litigation processes that prove to be not establishment has no liability to the employees of the
only nerve-wracking but financially burdensome in the transferor to continue employing them. Nor is the
long run. [LMG Chemicals v. Secretary of Labor, G.R. No. transferee liable for past unfair labor practices of the
127422 (2001)] previous owner.
vi. CBA Duration Exception: When the liability therefore is assumed by the
new employer under the contract of sale, or when
Any Collective Bargaining Agreement that the parties liability arises because of the new owner's participation
may enter into shall, insofar as the representation aspect in thwarting or defeating the rights of the employees.
is concerned, be for a term of five (5) years. [...] All The most that the transferee may do, for reasons of
other provisions of the Collective Bargaining public policy and social justice, is to give preference to
Agreement shall be renegotiated not later than three (3) the qualified separated employees in the filling of
years after its execution. [...] [Art. 265] vacancies in the facilities of the purchaser. [Manlimos v.
NLRC, G.R. No. 113337 (1995)]
CBA Duration for economic provisions
3 years. The general rule applies only to the sale and purchase
of asset. If the method of acquisition is by way of
CBA Duration for non-economic provisions purchase of controlling shares, the employer remains
5 years for representational or political issues; cannot be the same and the new owners must honor the existing
renegotiated to extend beyond 5 years. [FVC Labor contracts.
Union-PTGWO v. SANAMA-FVC-SIGLO, G.R. No.
176249 (2009)]
Exception:
E.Unfair Labor Practice “Yellow Dog” condition or contract: to require as a
(ULP) condition of employment that a person or an employee
shall not join a labor organization or shall withdraw
from one to which he belongs. [Art. 259 (b)]
1. Nature, Aspect
Parties Not Estopped from Raising ULP by
Unfair labor practice refers to acts that violate the Eventual Signing of the CBA
workers’ right to organize. The prohibited acts are The eventual signing of the CBA does not operate to
related to the workers’ right to self-organization estop the parties from raising unfair labor practice
and to the observance of a CBA. Without that charges against each other. [Standard Chartered Bank
element, the acts, no matter how unfair, are not unfair Union v. Confesor, G.R. No. 114974 (2004)]
labor practices. The only exception is Art. 259 (f) [i.e.
to dismiss, discharge or otherwise prejudice or Statutory Construction
discriminate against an employee for having given or The Labor Code does not undertake the impossible
being about to give testimony under this Code]. [Philcom task of specifying in precise and unmistakable language
Employees Union v. Phil. Global, G.R. No. 144315 (2006)] each incident which constitutes an unfair labor practice.
Rather, it leaves to the court the work of applying the
Nature of ULP law's general prohibitory language in light of infinite
a. inimical to the legitimate interests of both labor combinations of events which may be charged as
and management, including their right to bargain violative of its terms. [HSBC Employee Union v. NLRC,
collectively and otherwise deal with each other in G.R. No. 125038 (1997)]
an atmosphere of freedom and mutual respect
b. disrupt industrial peace Note: Bargaining in bad faith, discussed under 3.a. on
c. hinder the promotion of healthy and stable labor- Duty to Bargain Collectively, constitutes Unfair Labor
management relations Practice which may be committed by either Employer
d. violations of the civil rights of both labor and or Labor Organization. See page 182.
management but are also criminal offenses [Art.
258]
2. ULP by Employers
Four forms of Unfair Labor Practice in Collective
Bargaining a. Interference/Restraint/Coercion
a. Failure or Refusal to meet and convene
b. Evading the mandatory subjects of bargaining Art. 259 Unfair Labor Practices of Employers.
c. Bargaining in bad faith —
d. Gross violation of the CBA xxx
a. To interfere with, restrain or coerce employees in
Purpose of the Policy Against ULPs the exercise of their right to self-organization;
Protection of right to self-organization and/or
collective bargaining: There is no per se test of good faith in bargaining. Good
a. The employee is not only protected from the faith or bad faith is an inference to be drawn from the
employer but also from labor organizations. facts. The effect of an employers or a unions actions
b. The employer is also protected from ULP individually is not the test of good-faith bargaining, but
committed by a labor organization. the impact of all such occasions or actions, considered
as a whole. In this case, The fact that the resignations
The public is also protected because it has an interest in of the union members occurred during the pendency of
continuing industrial peace. the case before the labor arbiter shows GMCs desperate
attempts to cast doubt on the legitimate status of the
Employer-Employee Relationship Required union. The ill-timed letters of resignation from the
union members indicate that GMC had interfered with
General Rule: An unfair labor practice may be the right of its employees to self-organization. [General
committed only within the context of an employer- Milling Corporation v. Court of Appeals, G.R. 146728
employee relationship [American President Lines v. Clave, (2004)]
G.R. No. L-51641 (1982)]
Company union means any labor organization whose who are already members of another union at the
formation, function or administration has been assisted time of the signing of the collective bargaining
by any act defined as unfair labor practice by this Code. agreement.
[Art. 219(i)]
The law has allowed stipulations for 'union shop' and
The employer commits ULP if it initiates, dominates, or 'closed shop' as means of encouraging workers to join
otherwise interferes with the formation or administration of and support the union of their choice in the protection
any labor organization. of their rights and interests vis-a-vis the employer. [Del
Monte Philippines v. Salvidar, G.R. No. 158620 (2006)]
Example: giving out financial aid to any union's
supporters or organizers. Purpose
To safeguard and ensure the existence of the union and
e. Discrimination to Encourage/ thus, promote unionism in general as a state policy.
Discourage Unionism [Art. 259
It is the policy of the State to promote unionism to
(e)] enable the workers to negotiate with the management
on the same level and with more persuasiveness than if
General Rule: it is ULP to discriminate in regard to they were to individually and independently bargain for
wages, hours of work and other terms and conditions the improvement of their respective conditions. […]
of employment in order to encourage or discourage For this reason, the law has sanctioned stipulations for
membership in any labor organization. the union shop and closed shop as a means of
encouraging the workers to join and support the labor
Exception: Union security clauses union of their own choice vis-à-vis the employer.
[Liberty Flour Mills Employees v. Liberty Flour Mills, G.R.
UNION SECURITY CLAUSES No. 58768-70 (1989)]
Union security is a generic term which is applied to Coverage [BPI v. BPI Employees Union-Davao Chapter,
and comprehends “closed shop,” “union shop,” G.R. No. 164301 (2010)]
“maintenance of membership” or any other form of
agreement which imposes upon employees the General Rule: All employees in the bargaining unit
obligation to acquire or retain union membership as a covered by the union security clause are subject to its
condition affecting employment. [NUWHRAIN v. terms
NLRC, G.R. No. 179402 (2008)]
Exception:
[Union security clause] is an indirect restriction on the 1. Employees who are already members of another
right of an employee to self-organization. It is a solemn union at the time of the signing of the collective
pronouncement of a policy that while an employee is bargaining agreement may not be compelled by any
given the right to join a labor organization, such right union security clause to join any union. [Art. 254
should only be asserted in a manner that will not spell (e)]
the destruction of the same organization. [Tanduay 2. Employees already in service at the time the closed
Distillery Labor Union v. NLRC, G.R. No. 75037 (1987)] shop union security clause took effect
[Employees], although entitled to disaffiliation from A closed shop provision in a CBA is not to be given
their union to form a new organization of their own, a retroactive effect as to preclude its being applied
must, however, suffer the consequences of their to employees already in service. [Guijarno v. CIR,
separation from the union under the security clause of G.R. No. L-28791-93 (1973)]
the CBA. [Villar v. Inciong, G.R. No. L-50283-84 (1983)].
3. Any employee who at the time the union security
Statutory Basis and Rationale clause took effect is a bona fide member of religious
Art. 259 (e). Unfair Labor Practices of organization which prohibits its members from
Employers. – Nothing in this Code or in any other joining labor unions on religious grounds [Reyes v.
law shall stop the parties from requiring membership Trajano, 209 SCRA 484 (1992)]
in a recognized collective bargaining agent as a 4. Confidential employees who are excluded from the
condition for employment, except those employees rank-and-file bargaining unit
Requisites for the enforcement of Union Security Nothing in this Code or in any other law shall stop the
Clauses parties from requiring membership in a recognized
In terminating the employment of an employee by collective bargaining agent as a condition for
enforcing the union security clause, the employer needs employment.
only to determine and prove that:
1. The union security clause is applicable Note: Dismissals due to USC should still follow the
2. The union is requesting for the enforcement of the requirements of due process
union security provision in the CBA
3. There is sufficient evidence to support the union’s f. Discrimination for having given or
decision to expel the employee from the union.
[Alabang Country Club v. NLRC, G.R. No. 170287 about to give testimony
(2008)]
Art. 259 Unfair Labor Practices of Employers —
Company must conduct separate investigation or xxx
hearing (f) To dismiss, discharge or otherwise prejudice or
While company may validly dismiss the employees discriminate against an employee for having given or
expelled under the union security clause upon the being about to give testimony
recommendation by the union, this dismissal should
not be done hastily and summarily thereby eroding the It is an act of ULP by an employer to dismiss, discharge
employees' right to due process, self-organization and or otherwise prejudice or discriminate against an
security of tenure. The enforcement of union security employee for having given or being about to give
clauses is authorized by law provided such enforcement testimony under this Code.
is not characterized by arbitrariness, and always with
due process. Even if there are valid grounds to expel Note: This is broader than the prohibition under Art.
the union officers, due process requires that these union 118 because Art. 259 (f) covers testimony under the
officers be accorded a separate hearing by respondent whole Code, while Art. 118 only covers testimony
company. [Malayang Samahan ng Manggagawa sa M. under Book I: Pre-Employment, Title II: Wages
Greenfield v. Ramos, G.R. No. 113907 (2000)]
Note further: Includes not giving testimony (see
Requirement of Due Process Azucena)
The requirements laid down by the law in determining
whether or not an employee was validly terminated g. Violation of Duty to Bargain
must still be followed even if it is based on a [union
security clause] of a CBA, i.e. the substantive as well as
Collectively
the procedural due process requirements. [Del Monte v.
Saldivar, G.R. No. 158620 (2006)] Art. 259 Unfair Labor Practices of Employers —
xxx
Obligations and Liabilities (g) To violate the duty to bargain collectively as
Where the employer dismissed his employees in the prescribed by this Code;
belief in good faith that such dismissal was required by
the [union security provision] of the collective Duty to bargain collectively is a continuous process,
bargaining agreement with the union, he may not be non-compliance of which constitutes ULP. Collective
ordered to pay back compensations to such employees bargaining does not end with the execution of an
although their dismissal is found to be illegal. agreement. Being a continuous process, the duty to
[Confederated Sons of Labor v. Anakan Lumber Co., G.R. bargain necessarily impose on the parties the obligation
No. L-12503 (1960)] to live up to the terms of such a collective bargaining
agreement if entered into, it is undeniable that non-
As dictated by fairness, […] the union shall be liable to compliance therewith constitutes an unfair labor
pay their backwages. This is because management practice. [Shell Oil Workers Union v. Shell Co., G.R. No.
would not have taken the action it did had it not been L-28607 (1971)]
for the insistence of the labor union seeking to give
effect to its interpretation of a closed shop provision. Note: See ULP in Collective Bargaining above.
[Guijarno v. CIR, G.R. No. L-28791-93 (1973)]
Flagrant and/or malicious refusal required Art. 257. Non-abridgment of right to self-
Violations of collective bargaining agreements, except organization. — It shall be unlawful for any person
flagrant and/or malicious refusal to comply with its to restrain, coerce, discriminate against or unduly
economic provisions, shall not be considered unfair interfere with employees and workers in their
labor practice [Art. 274] and shall not be strikeable [Sec. exercise of the right to self-organization. Such right
5, Rule XXII, Book V, IRR]. shall include the right to form, join, or assist labor
organizations for the purpose of collective
Note: See also discussion on bargaining in bad faith bargaining through representatives of their own
under 3(a) which constitute ULP of either the choosing and to engage in lawful concerted activities
Employer or the Labor Organization. for the same purpose or for their mutual aid and
protection, subject to the provisions of Art. [279] of
this Code.
Good faith strike requires rational basis attainment of social justice is never meant to
A mere claim of good faith would not justify the oppress or destroy the employer. The law provides
holding of a strike under the aforesaid exception as, in limits for its exercise. Among such limits are the
addition thereto, the circumstances must have prohibited activities under Art. [279], particularly
warranted such belief. It is, therefore, not enough that paragraph (e), which states that no person engaged in
the union believed that the employer committed acts of picketing shall:
ULP when the circumstances clearly negate even a 1. commit any act of violence, coercion, or
prima facie showing to sustain such belief. [Interwood intimidation or
Employees Assoc. v. Int’l Hardwood, G.R. No. L-7409 2. obstruct the free ingress to or egress from the
(1956)] employer's premises for lawful purposes or
3. obstruct public thoroughfares.
iii. Noncompliance With Procedural
Requirements A legal strike may turn into an illegal strike
Even if the strike is valid because its objective or
See: Procedural requirements of a valid strike below purpose is lawful, the strike may still be declared invalid
where the means employed are illegal. [Phil. Diamond
A strike which does not strictly comply with the Hotel and Resort, Inc. v. Manila Diamond Hotel Employees
procedural requirements set by law and the rules is an Union, G.R. No. 158075 (2006)]
unlawful/illegal strike. [Sta. Rosa Coca-Cola Plant
Employees Union v. Coca-Cola Bottlers Philippines, Inc., G.R. Examples of unlawful means and methods
Nos. 164302-03 (2007)] 1. Acts of violence and terrorism
2. Destruction of property
Note: Good faith strike must still comply with
procedural requirements Guidelines and balancing of Interest
1. A strike otherwise valid, if violent in character, may
Even if the union acted in good faith in the belief that be placed beyond the pale.
the company was committing an unfair labor practice, 2. Care is to be taken especially where an unfair labor
if no notice of strike and a strike vote were conducted, practice is involved, to avoid stamping it with
the said strike is illegal. [Grand Boulevard Hotel v. illegality just because it is tainted by such acts. To
GLOWHRAIN, G.R. No. 153664 (2003)] avoid rendering illusory the recognition of the right
to strike, responsibility in such a case should be
General Rule: A strike based on a non-strikeable ground individual and not collective.
is an illegal strike; a strike grounded on ULP is illegal if 3. A different conclusion would be called for if the
no such acts actually exist. existence of force while the strike lasts is pervasive
and widespread, consistently and deliberately
Exception: Even if no ULP acts are committed by the resorted to as a matter of policy. It could be
employer, if the employees believe in good faith that reasonably concluded then that even if justified as
ULP acts exist so as to constitute a valid ground to to ends, it becomes illegal because of the means
strike, then the strike held pursuant to such belief may employed'.
be legal. [NUWHRAIN v. NLRC, G.R. No. 125561 4. This is not by any means to condone the utilization
(1998)] of force by labor to attain its objectives. It is only
to show awareness that in labor conflicts, the
iv. Unlawful Means And Methods tension that fills the air as well as the feeling of
frustration and bitterness could break out in
Purpose and means test sporadic acts of violence.
There must be concurrence between the validity of the
purpose of the strike and the means of conducting it. If there be in this case a weighing of interests in the
balance, the ban the law imposes on unfair labor
A strike is a legitimate weapon in the universal struggle practices by management that could provoke a strike
for existence. It is considered as the most effective and its requirement that it be conducted peaceably, it
weapon in protecting the rights of the employees to would be, to repeat, unjustified, considering all the facts
improve the terms and conditions of their employment. disclosed, to stamp the strike with illegality. It is enough
But to be valid, a strike must be pursued within that individual liability be incurred by those guilty of
legal bounds. The right to strike as a means for the such acts of violence that call for loss of employee
status. Such an approach is reflected in our recent Note: Mere participation in an illegal strike by a union
decisions. [Shell Oil Workers Union v. Shell Co. of the Phils, officer is sufficient ground to terminate his
G.R. No. L-28607 (1971)] employment. In case of a lawful strike, the union officer
must commit illegal acts during a strike for him to be
The Labor Code regulates the exercise of said right by terminated. [Art. 279(a)]
balancing the interests of labor and management in the
light of the overarching public interest. Thus, Procedural due process is still required for dismissing
paragraphs (c) and (f) of Art. 278 mandate the following union officers/ordinary workers. of The essence of due
procedural steps to be followed before a strike may be process is the opportunity to be heard. What the law
staged: filing of notice of strike, taking of strike vote, prohibits is not the absence of previous notice but the
and reporting of the strike vote result to the DOLE. It absolute absence thereof and the lack of opportunity to
bears stressing that these requirements are mandatory, be heard. Where an opportunity to be heard either
meaning, non-compliance therewith makes the strike through oral arguments or through pleadings is
illegal. The evident intention of the law in requiring the accorded, there is no denial of procedural due process.
strike notice and strike-vote report is to reasonably [Equitable PCI Banking Corp. v. RCBC Capital Corp, 574
regulate the right to strike, which is essential to the SCRA 858 (2004)
attainment of legitimate policy objectives embodied in
the law. [Stamford Mark Corp. v. Julian, G.R. No. 145496 Liability of Ordinary Workers
(2004)]
General rule: Participation by a worker in a lawful strike
v. Violation Of Injunction Order is not ground for termination of his employment. [Art.
279(a)]
An automatic injunction under Art. 278(g) or a valid
injunction order under the exceptions to Art. 279 must Exception: When the worker participated in illegal acts
be complied with. Otherwise, the strike becomes illegal. during the strike; needs clear, substantial and
convincing proof available under the circumstances to
vi. Those Contrary To An Existing justify the penalty of dismissal [Toyota Motors Philippines
Agreement Workers Association v. NLRC, 537 SCRA 171 (2007)]
(e.g. No strike/lockout provisions in the CBA) [Citing Note: The mere fact that the criminal complaints against
Ludwig Teller in Toyota Motors v. NLRC, G.R. Nos. terminated Union members were subsequently
158786 & 158787 (2007)] dismissed does not extinguish their liability under the
Labor Code [C. Alcantara & Sons, Inc. v. CA, G.R. No.
No Strike/Lockout Provisions in the CBA 155109 (2011)]
A “no strike, no lock-out” is a valid provision in the
CBA. However, it only applies to economic provisions. Liability of Employer
It cannot prevent a strike which is grounded on unfair Any worker whose employment has been terminated as
labor practice. [Malayang Samahan ng mga Manggagawa sa a consequence of any unlawful lockout shall be entitled
Greenfield v. Ramos, G.R. No. 113907 (2000)] to reinstatement with full backwages. [Art. 279(a)]
When defense of illegality of strike is not deemed In case of bargaining deadlocks, the notice shall, as far
waived as practicable, further state the unresolved issues in
The ruling cited in the Bisaya case that the employer the bargaining negotiations and be accompanied by the
waives his defense of illegality of the strike upon written proposals of the union, the counter-proposals
reinstatement of strikers is applicable only to strikers of the employer and the proof of a request for
who signified their intention to return to work and were conference to settle differences. In cases of unfair labor
accepted back. […] practices, the notice shall, as far as practicable, state the
acts complained of, and efforts taken to resolve the
Truly, it is more logical and reasonable for condonation dispute amicably. [Sec. 4, Rule XXII, Book V, IRR]
to apply only to strikers who signified their intention to
return and did return to work. The reason is obvious. The Implementing Rules use the words as far as
These strikers took the initiative in normalizing practicable. In this case, attaching the counter-proposal
relations with their employer and thus helped promote of the company to the notice of strike of the union was
industrial peace. However, as regards the strikers not practicable. It was absurd to expect the union to
who decided to pursue with the case, […] the produce the company’s counter-proposal which it did
employer could not be deemed to have condoned not have. One cannot give what one does not have.
their strike, because they had not shown any Indeed, compliance with the requirement was
willingness to normalize relations with it. [Philippine impossible because no counter-proposal existed at the
Inter-Fashion, Inc. v. NLRC, G.R. No. L-59847 (1982)] time the union filed a notice of strike. [Club Filipino, Inc.
v. Bautista, G.R. No. 168406 (2009)]
However, the mere act of entering into a compromise
agreement cannot be deemed to be a waiver of the d. Filing and Service of Notice of
illegality of the strike, unless it such a waiver is clearly
shown in the agreement. The court has emphasized that Strike
“[for] a waiver to be valid and effective [it] must be
couched in clear and unequivocal terms which leave no Art. 278 (c). Strikes, Picketing and Lockouts. –
doubt as to the intention of a party to give up a right or In case of bargaining deadlocks, the duly certified or
benefit which legally pertains to him.” [Filcon recognized bargaining agent may file a notice of
Manufacturing Corp v. Lakas Manggagawa sa Filcon – Lakas strike or the employer may file a notice of lockout
Manggagawa Labor Center, G.R. No. 150166 (2004)] with the Ministry at least 30 days before the intended
date thereof. In cases of unfair labor practice, the
Procedural Requirements for Strike [Art. 278] period of notice shall be 15 days and in the absence
1. Effort to bargain (for bargaining deadlock strikes) of a duly certified or recognized bargaining agent,
2. Filing and service of notice of strike the notice of strike may be filed by any legitimate
3. Observance of cooling-off period labor organization in behalf of its members.
a. 15 days for ULP However, in case of dismissal from employment of
No cooling-off period when the ULP can be union officers duly elected in accordance with the
considered union busting (dismissal of duly union constitution and by-laws, which may
elected union officers from employment) constitute union-busting, where the existence of the
b. 30 days for bargaining deadlock union is threatened, the 15-day cooling-off period
4. Notice of strike vote meeting to NCMB within 24 shall not apply and the union may take action
hours before the strike vote [Sec. 10, Rule XXII, immediately.
Book V, IRR]
5. Strike vote Unfair Labor Practice; Union Busting
6. Strike vote report sent to NCMB
7. Observance of the waiting period (7-day strike ban) Note: The notice must be served to the employer.
Failure to do so will constitute noncompliance with the
c. Effort to Bargain procedural requirements and will result to an illegal
strike. [Filipino Pipe and Foundry Corp v. NLRC, G.R. No.
No labor organization […] shall declare a strike […] 115180 (1999)]
without first having bargained collectively in
accordance with Title VII of this Book […] [Art. 279(a)] Rationale: Due process. [IRR]
Contents of Notice of Strike settlement. Should the dispute remain unsettled until
1. Names and addresses of the employer and the the lapse of the requisite number of days from the
union involved mandatory filing of the notice, the labor union may
2. Nature of the industry to which the employer strike or the employer may declare a lockout.
belongs
3. Number of union members and of workers in the The purpose of the cooling-off period is to provide an
bargaining unit opportunity for mediation and conciliation. [National
4. Such other relevant data as may facilitate the Federation of Sugar Workers v. Ovejera, G.R. No. L-59743
settlement of the dispute. (1982)]
ADDITIONAL REQUIREMENTS
f. Notice of Strike-Vote Meeting
In case of Bargaining Deadlocks:
1. Statement of unresolved issues in the bargaining Art. 278 (f). Strikes, Picketing and Lockouts. –
negotiations [T]he Department may, at its own initiative or upon
2. Written proposals of the union the request of any affected party, supervise the
3. Counter-proposals of the employer conduct of the secret balloting. […]
4. Proof of a request for conference to settle the
differences. [Sec. 4, Rule XXII, Book V, IRR] Sec. 10, Rule XXII, Book V. Strike or Lockout
Vote. – In every case, the union or the employer shall furnish
In cases of ULP: the regional branch of the Board the notice of meetings referred
1. Statement of acts complained of to in the preceding paragraph at least twenty-four (24) hours
2. Efforts taken to resolve the dispute amicably. [Sec. before such meetings…
4, Rule XXII, Book V, IRR]
The purpose of the notice is to allow the NCMB to
Action on Notice: decide whether or not they will send a representative to
1. Upon receipt of a valid notice of strike or lockout, supervise the strike vote.
the NCMB, through its Conciliator-Mediators,
shall call the parties to a conference the soonest g. Strike Vote
possible time in order to actively assist them to
explore all possibilities for amicable settlement.
2. The Conciliator-Mediator may suggest/offer Art. 278 (f). Strikes, Picketing and Lockouts. –
proposals as an alternative avenue for the A decision to declare a lockout must be approved by
resolution of their disagreement/conflict which a majority of the board of directors of the
may not necessarily bind the parties. corporation or association or of the partners in a
3. If conciliation/mediation fails, the parties shall be partnership, obtained by secret ballot in a meeting
encouraged to submit their dispute for voluntary called for that purpose…
arbitration.
Requirements for a declaration of a strike in a
strike vote
e. Observance of Cooling-Off 1. approval by a majority of the total union
Periods membership in the bargaining unit concerned
2. approval is obtained by secret ballot in a
Cooling off periods meeting/referendum called for the purpose
1. Bargaining deadlock – 30 days
2. ULP but not un ion busting – 15 days Duration of the Validity of the Strike-Vote
3. ULP and union busting – no cooling-off period Art. 278 (f). Strikes, Picketing and Lockouts. –
[T]he decision shall be valid for the duration of the
Purpose of Cooling Off Period dispute based on substantially the same grounds
considered when the strike or lockout vote was
Art. 278 (e). Strikes, Picketing and Lockouts. – taken. […]
During the cooling-off period, it shall be the duty of
the Ministry [now DOLE] to exert all efforts at
mediation and conciliation to effect a voluntary
h. Strike Vote Report When at least a majority of the union members vote
to accept the improved offer, the striking workers
Art. 278 (f). Strikes, Picketing and Lockouts. – shall immediately return to work and the employer
[I]n every case, the union or the employer shall shall thereupon re-admit them upon the signing of
furnish the Department the results of the voting at the agreement.
least 7 days before the intended strike or lockout,
subject to the cooling-off period herein provided. 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
i. Observance of the 7-Day Waiting before the 30th day of the lockout. When at least a
Period majority of the board of directors or trustees or the
partners holding the controlling interest in the case
7 Day Observance of the Strike Ban of partnership vote to accept the reduced offer, the
The waiting period, on the other hand, is intended to workers shall immediately return to work and the
provide opportunity for the members of the union or employer shall thereupon readmit them upon the
the management to take the appropriate remedy in case signing of the agreement.
the strike or lockout vote report is false or inaccurate.
[National Federation of Sugar Workers v. Ovejera, G.R. No. 2. Picketing
L-59743 (1982)]
The right of legitimate labor organizations to strike and
The waiting period is intended to give the DOLE an
picket and of employers to lockout, consistent with the
opportunity to verify whether the projected strike really
national interest, shall continue to be recognized and
carries the imprimatur of the majority of the union
respected. [Art. 278(b)]
members. [Lapanday Workers Union v. NLRC, G.R. Nos.
95494-97 (1995)]
Picketing involves merely the marching to and fro at
the premises of the employer, usually accompanied by
Compliance with Both Cooling-off and Waiting
the display of placards and other signs making known
Periods
the facts involved in a labor dispute. As applied to a
The observance of both periods must be complied with,
labor dispute, to picket means the stationing of one or
although a labor union may take a strike vote and report
more persons to observe and attempt to observe. The
the same within the statutory cooling-off period. The
purpose of pickets is said to be a means of peaceable
cooling-off and 7-day strike ban provisions of law
persuasion. [Sta. Rosa Coca-Cola Plant Employees Union v.
constitute a valid exercise of police power of the State.
Coca-Cola Bottlers Philippines, Inc., G.R. Nos. 164302-03
[National Federation of Sugar Workers v. Ovejera, G.R. No.
(2007)]
L-59743 (1982)]
Peaceful Picketing is the right of workers during
Mutually exclusive periods (used in the NCMB
strikes consisting of marching to and fro before an
Manual). The cooling off period and the 7-day period
establishment involved in a labor dispute generally
are mutually exclusive. Thus, in the case of Capitol
accompanied by the carrying and display of signs,
Medical Center v. NLRC [G.R. No. 147080 (2005)], the
placards and banners intended to inform the public
Court held that when the strike vote is conducted
about the dispute. [Guidelines Governing Labor Relations,
within the cooling-off period, the 7-day requirement
October 19, 1987] [NCMB Manual, Sec. 1]
shall be counted from the day following the expiration
of the cooling off period.
Purpose
The purpose of the picket line is to persuade employers
Improved Offer Balloting
peacefully by publicizing the labor dispute to inform the
Sec. 12, Rule XXII, Book V. Improved Offer public of what is happening and thus cause other
Balloting. – In case of a strike, the regional branch workers not to work in the establishment and for
of the Board shall, at its own initiative or upon the customers not to do business there [Phimco Industries, Inc.
request of any affected party, conduct a referendum v. Phimco Industries Labor Association (PILA), et al., 628
by secret balloting on the improved offer of the SCRA 119 (2010)]
employer on or before the 30th day of strike.
The most important element is the employer’s control applying the Labor Code ought to be the economic
of the employee’s conduct, not only as to the result of dependence of the worker on his employer.
the work to be done, but also as to the means and
methods to accomplish it. [Lirio v. Genovia, G.R. No. The standard of “economic dependence” is whether the
169757 (2011)]. worker is dependent on the alleged employer for his
continued employment in that line of business. [Orozco
The control test calls merely for the “existence” of the v. CA, G.R. No. 155207 (2008)].
right to control and not the “actual exercise” of the
right. [Zanotte Shoes v. NLRC, G.R. No. 100665, (1995)]. Evidence of employee status
No particular form of evidence is required to prove the
Not every form of control will have the effect of existence of an employer-employee relationship. Any
establishing ER-EE relationship. The line should be competent and relevant evidence to prove the
drawn between: relationship may be admitted. For, if only
1. Rules that merely serve as guidelines towards the documentary evidence would be required to show that
achievement of mutually desired results without relationship, no scheming employer would ever be
dictating the means or methods to be employed in brought before the bar of justice, as no employer would
attaining it. These aim only to promote the result. wish to come out with any trace of the illegality he has
In such case, NO ER-EE relationship exists. authored considering that it should take much weightier
2. Rules that control or fix the methodology and bind proof to invalidate a written instrument. [Tenazas, et al.,
or restrict the party hired to the use of such means. v. R. Villegas Taxi Transport, G.R. No. 192998 (2014)].
These address both the result and the means used
to achieve it and hence, ER-EE relationship exists. Burden of Proving Employer-Employee
[Insular Life Assurance Co, LTD v. NLRC, G.R. No. Relationship
84484 (1989)]. The onus probandi rests on the employer to prove that
its dismissal was for a valid cause. However, before a
Payment of wages case for illegal dismissal can prosper, an employer-
The Court held that the fact that a worker was not employee relationship must first be established. It is
reported as an employee to the SSS is not conclusive incumbent upon the employee to prove the employer-
proof of the absence of employer-employee employee relationship by substantial evidence. [Javier v.
relationship. Nor does the fact that respondent’s name Fly Ace Corporation, G.R. No. 192558 (2012)].
does not appear in the payrolls and pay envelope
records submitted by petitioners negate the existence of Piercing the corporate veil
employer-employee relationship. For a payroll to be In Sarona v. NLRC [G.R. No. 185280 (2012)], the
utilized to disprove the employment of a person, it doctrine of piercing the corporate veil was applied. It
must contain a true and complete list of the involved the illegal dismissal of Sarona, a security guard
employee. [Southeast East International Rattan v Coming, who first worked at Sceptre but was subsequently
G.R. No. 186621 (2014)] assigned to Royale, where he was illegally dismissed. In
the computation of his separation pay, Sarona prayed
b. Economic Dependence Test that the corporate veil of Royale be pierced as it was a
mere continuation of Sceptre; hence, his separation pay
Two-tiered approach. should be computed from the time he was hired by
1. First Tier: Control Test (refer to the Four-Fold Sceptre.
Test)
2. Second Tier: The underlying economic realities of The SC explained that the corporate veil may be pierced
the activity or relationship. [Sevilla v. Court of when the corporation is just an alter ego of a person or
Appeals, G.R. Nos. L-41182-3 (1988)]. of another corporation.
The economic realities prevailing within the activity or Because the circumstances indicated that Spectre and
between the parties are examined, taking into Royale were one and the same (same office, same
consideration the totality of circumstances surrounding officers, same person exercising control and
the true nature of the relationship between the parties. supervision over EEs of both companies), and that
Sarona’s transfer to Royale was done in bad faith, the
The benchmark of economic reality in analyzing SC pierced the corporate veil and ruled in his favor.
possible employment relationships for purposes of
When applicable
Art. 295 is not the yardstick for determining the Sec. 5(b), Rule I, Book VI, IRR. Casual
existence of an employment relationship because it Employment. --- There is casual employment where
merely distinguishes between two kinds of employees, an employee is engaged to perform a job, work or
i.e., regular employees and casual employees, for service which is merely incidental to the business of
purposes of determining the right of an employee to the employer, and such job, work or service is for a
certain benefits, to join or form a union, or to security definite period made known to the employee at the
of tenure; it does not apply where the existence of an time of engagement: Provided, That any employee
employment relationship is in dispute. [Atok Big Wedge who has rendered at least one year of service, whether
Co., Inc. v. Gison, G.R. No. 169510 (2011)] such service is continuous or not, shall be considered
a regular employee with respect to the activity in
Hiring for an extended period which he is employed and his employment shall
Where the employment of project employees is continue while such activity exists.
extended long after the supposed project has been
finished, the employees are removed from the scope of A casual employee is engaged to perform a job, work
project employees and considered regular employees. or service which is merely incidental to the business of
[Audion Electric Co., Inc. v. NLRC, G.R. No. 106648 the employer, and such job, work or service is for a
(1999)] definite period made known to the employee at the time
of engagement.
While length of time may not be a controlling test for
project employment, it can be a strong factor in Someone who is not a regular, project or seasonal
determining whether the employee was hired for a employee.
specific undertaking or in fact tasked to perform
functions which are vital, necessary and indispensable Requirements to become regular employee:
to the usual business or trade of the employer. [Tomas 1. One (1) year service, continuous or broken with
Lao Const. v. NLRC, G.R. No. 116781 (1997)] respect to activity employed
2. Employment shall continue while such activity
Repeated renewal of contract exists
While the Court has recognized the validity of
contractual stipulations as to the duration of
employment, this cannot apply where the contract-to-
contract arrangement was but an artifice to prevent her
from acquiring security of tenure and to frustrate
constitutional decrees. [Beta Electric Corp. v. NLRC, G.R.
No. 86408 (1990)]
2. The employer must make such communication at Absorbed employees not probationary
the time of the probationary employee’s The private respondents could not be considered
engagement. probationary employees because they were already well-
trained in their respective functions. As stressed by the
If the employer fails to comply with either, the Solicitor General, while private respondents were still
employee is deemed as a regular and not a probationary with the CCAS they were already clerks. Respondent
employee. Gelig had been a clerk for CCAS for more than ten (10)
years, while respondent Quijano had slightly less than
The employer has the burden of proof to show that ten (10) years of service. They were, therefore, not
they have informed the probationary employee of the novices in their jobs but experienced workers. [Cebu
standards to be applied to his/her work, that those Stevedoring Co., Inc. v. Regional Director, G.R. No. L-54285
standards have been applied to him/her, and that (1988)]
he/she fell short of such standard.
Private school teachers
An employer is deemed to have made known the Questions respecting a private school teacher’s
standards that would qualify a probationary employee entitlement to security of tenure are governed by the
to be a regular employee when it has exerted reasonable Manual of Regulations for Private Schools and not the
efforts to apprise the employee of what he is expected Labor Code. [Aklan College v. Guarino, G.R. No. 152949
to do or accomplish during the trial period of (2007)]
probation. This goes without saying that the employee
is sufficiently made aware of his probationary status as The legal requisites, therefore, for acquisition by a
well as the length of time of the probation. teacher of permanent employment, of security of tenure
are:
The exception to the foregoing is when the job is self- 1. A full-time teacher;
descriptive in nature, for instance, in the case of maids, 2. Must have rendered three consecutive years of
cooks, drivers, or messengers. [Abbott Laboratories Phil. service; and
et al. v. Alcaraz, G.R. No. 192571 (2013)] 3. Service must have been satisfactory. [La Salette of
Santiago v. NLRC, G.R. No. 82918 (1991)]
In all cases of probationary employment, the employer
shall make known to the employee the standards under Mere completion of the three-year probation, even with
which he will qualify as a regular employee at the time an above-average performance, does not guarantee that
of his engagement. Where no standards are made the employee will automatically acquire a permanent
known to the employee at that time, he shall be deemed employment status. The probationer can only qualify
a regular employee. Conversely, an employer is deemed upon fulfillment of the reasonable standards set for
to substantially comply with the rule on notification of permanent employment as a member of the teaching
standards if he apprises the employee that he will be personnel. [Herrera-Manaois v. St. Scholastica’s College,
subjected to a performance evaluation on a particular G.R. No. 18891 (2013)]
date after his hiring. [Alcira v. NLRC, G.R. No. 149859,
(2004)] These standards should be made known to the teachers
on probationary status at the start of their probationary
Regular status after probation period, or at the very least under the circumstances of
When the bank renewed the contract after the lapse of the present case, at the start of the semester or the
the six-month probationary period, the employees trimester during which the probationary standards are
thereby became regular employees. No employer is to be applied. Of critical importance in invoking a
allowed to determine indefinitely the fitness of its failure to meet the probationary standards, is that the
employees. [Bernardo v. NLRC, supra.] school should show – as a matter of due process – how
these standards have been applied. [Colegio del Santisimo
Double probation Rosario v. Rojo, G.R. No. 170388 (2013)]
There is no basis for subjecting an employee to a new
probationary or temporary employment where he had Termination
already become a regular employee when he was A probationary employee enjoys only a temporary
absorbed by a sister company. [A Prime Security Services, employment status. This means that he is terminable at
Inc. v. NLRC, G.R. No. 107023, (2000)] any time, permanent employment not having been
attained in the meantime. The employer could well
2. Such duration, as well as the specific work/service The simple fact that the employment as project
to be performed, is defined in an employment; employees has gone beyond one (1) year does not
3. Agreement and is made clear to the employee at the detract from, or legally dissolve, their status as project
time of the hiring; employees. The second paragraph of Art. 280 of the LC
4. The work/service to be performed by the providing that an employee who has served at least one
employee is in connection with the particular (1) year shall be considered a regular employee, relates
project/undertaking for which he is engaged; to casual employees, not to project employees. [Raycor
5. The employee, while not employed and awaiting Aircontrol Systems v. NLRC, G.R. No. 114290 (1996)]
engagement, is free to offer his services to any
other employer; Generally, length of service provides a fair yardstick for
6. The termination of his employment in the determining when an employee initially hired on a
particular project/undertaking is reported to the temporary basis becomes a permanent one, entitled to
DOLE Regional Office having jurisdiction over the security and benefits of regularization. But this
the workplace following the date of his separation standard will not be fair, if applied to the construction
from work, using the prescribed form on industry, simply because construction firms cannot
employees’ terminations /dismissals/suspensions; guarantee work and funding for its payrolls beyond the
7. An undertaking in the employment contract by the life of each project. And getting projects is not a matter
employer to pay completion bonus to the project of course. [William Uy Construction Corp. v. Trinidad, G.R.
employee as practiced by most construction No. 183250 (2010)]
companies. [DO No. 19, Sec. 2.2; Samson v. NLRC,
G.R. No. 11366 (1996)]. See also Policy Instructions No. 20 of 1997 and D.O.
No. 19 of 1993
Test of project employment
The litmus test in determining the existence of project Work pool employee
employment is whether or not the employment has Members of a work pool from which a construction
been fixed for a specific project or undertaking the company draws its project employees, if considered
completion or termination of which has been employees of the construction company while in the
determined at the time of the engagement of the work pool, are non-project employees or employees for
employee. [D.M. Consunji v. NLRC, G.R. No. 116572 an indefinite period. If they are employed in a particular
(2000)] project, the completion of the project or any phase
thereof will not mean severance of the employer-
Evidently, although the employment contract did not employee relationship. [Policy Instruction No. 20; J. &
state a particular date, it did specify that the termination DO Aguilar Corp. v. NLRC, G.R. No. 116352 (1997)]
of the parties’ employment relationship was to be on a
“day certain” -- the day when the phase of work termed Project employees may or may not be members of a
“Lifting & Hauling of Materials” for the “World work pool (that is, the employer may or may not have
Finance Plaza” project would be completed. Thus, formed a work pool at all), and in turn, members of a
respondent cannot be considered to have been a regular work pool could be either project employees or regular
employee. He was a project employee. [Filipinas Pre- employees. [Raycor Aircontrol Systems, Inc. vs. National
Fabricated Building Systems, Inc. v. Puente, G.R. No. Labor Relations Commission, G.R. 114290, (1996)]
153832 (2005)]
A work pool may exist although the workers in the pool
Repeated hiring, length of service not determinant do not receive salaries and are free to seek other
of regularity of employee employment during temporary breaks in the business,
The repeated and successive rehiring of project provided, that the worker shall be available when called
employees do not qualify them as regular employees, as to report for a project. Although primarily applicable to
length of service is not the controlling determinant of regular seasonal workers, this set-up can likewise be
the employment tenure of a project employee, but applied to project workers insofar as the effect of
whether the employment has been fixed for a specific project or temporary cessation of work is concerned. [Maraguinot
undertaking, its completion has been determined at the time of the v. NLRC, G.R. No. 120969. (1998)]
engagement of the employee. [Leyte Geothermal Power Progressive
Employees Union v. Philippine National Oil Company, G.R.
No. 170351 (2011)]
When a project employee or a member of a work employed. [Philippine Tobacco Flue-Curing &Redrying Corp.
pool acquires the status of regular employment v. NLRC, G.R. No. 127395, (1998)]
The ff. requisites must concur:
1. There is a continuous rehiring of project employees Illustrative cases
even after cessation of a project; For respondents to be considered seasonal employees,
2. The tasks performed by the alleged “project it is not enough that they perform work or services that
employees” are vital, necessary and indispensable are seasonal in nature. They must have been employed
to the usual business or trade of the employer. only for the duration of one season. The evidence proves
[Imbuido v. NLRC, G.R. No. 114734 (200); theexistence of the first, but not of the second,
Maraguinot v. NLRC, G.R. No. 120969. (1998)] condition. The fact that respondentsrepeatedly worked
as sugarcane workers for petitioners for several years is
Note: The length of time which the employees are not denied bythe latter. Evidently, petitioners employed
continually re-hired is not in itself controlling but respondents for more than one season. Therefore, the
merely serves as a badge of regular employment. [See general rule of regular employment is applicable.
previous discussion; Leyte Geothermal Power Progressive [Hacienda Fatima v. National Federatiom of Sugarcane
Employees Union v. Philippine National Oil Company, G.R. Workers, G.R. No. 149440 (2003)]
No. 170351 (2011)]
Citing Hacienda Fatima, the Court in Hacienda Vino v.
Termination; Rule on reportorial requirement Cuenca [G.R. No. 150478 (2005)] ruled that while the
A report of termination to the nearest public records sufficiently show that the respondents’ work in
employment office every time their employment was the hacienda was seasonal in nature, there was,
terminated due to completion of each construction however, no proof that they were hired for the duration
project. Failure of the employer to file termination of one season only. In fact, the payrolls, submitted in
reports after every project completion proves that the evidence by the petitioners, show that they availed the
employees are not project employees. [Pasos v. Philippine services of the respondents since 1991. Absent any
National Construction Corp., G.R. No. 192394 (2013)] proof to the contrary, the general rule of regular
employment should, therefore, stand.
e. Seasonal
It appears that the questioned employees were never
separated from the service (continuous re-hiring). Their
Art. 295, 1st par. status is that of regular seasonal employees who are
...where the work or service to be performed is called to work from time to time, mostly during
seasonal in nature and the employment is for the summer season. The nature of their relationship with
duration of the season... the hotel is such that during off season they are
temporarily laid off but during summer season they are
Seasonal employees are those whose work or services re-employed, or when their services may be needed.
to be performed are seasonal in nature, employment is They are not strictly speaking separated from the
for the duration of the season. There is no continuing services but are merely considered as on leave of
need for the worker. absence without pay until they are re-employed. Their
employment relationship is never severed but only
“Regular Seasonal” Employees After One Season suspended. As such, these employees can be considered
Seasonal workers who are constantly rehired and are as in the regular employment of the hotel. [Manila Hotel
only temporarily laid off during off-season are not v. CIR, G.R. No. L-19973 (1963)]
separated from service in said period, but are merely
considered on leave until work resumes. They are Exception
considered regular and permanent employees. Although respondent constantly availed herself of the
petitioners’ services from year to year, it was clear from
The nature of their relationship . . . is such that during the facts therein that they were not in her regular
off season they are temporarily laid off but during employ. Petitioners therein performed different
summer season they are re-employed, or when their phases of agricultural work in a given year.
services may be needed. They are not strictly speaking However, during that period, they were free to
separated from the service but are merely considered as work for other farm owners, and in fact they did. In
on leave of absence without pay until they are re- other words, they worked for respondent, but were
nevertheless free to contract their services with other
farm owners. The Court was thus emphatic when it automatically mean that he/she could never be a regular
ruled that petitioners were mere project employees, employee.
who could be hired by other farm owner. [Mercado, Sr.
v. NLRC, G.R. No. 79869 (1991)] An employee can be a regular employee with a fixed-
term contract. The law does not preclude the possibility
f. Fixed-Term that a regular employee may opt to have a fixed-term
contract for valid reasons. This was recognized in
Art. 295 has no application to instances where Brent: For as long as it was the employee who
1. a fixed period of employment was agreed upon requested, or bargained, that the contract have a
knowingly and voluntarily by the parties, without “definite date of termination,” or that the fixed-term
any force, duress or improper pressure being contract be freely entered into by the employer and the
brought to bear upon the employee and absent any employee, then the validity of the fixed-term contract
other circumstances vitiating his consent, or will be upheld. [Fuji Television Network Inc v. Espiritu,
2. where it satisfactorily appears that the employer G.R. No. 204944-45 (2014)].
and employee dealt with each other on more or less
equal terms with no moral dominance whatever Project employment and Fixed-term employment
being exercised by the former over the latter. [Brent distinguished
School v. Zamora, G.R. No. L-48494 (1990)] A project employee is assigned to carry out a specific
project or undertaking, the duration and scope of which
Note: The employee in this case was a college graduate. were specified at the time the employee is engaged for
the project
The Brent doctrine is applicable only in a few special
cases wherein the employer and employee are on more The duration of a fixed-term employment agreed upon
or less equal footing in entering into the contract. The by the parties may be any day certain, which is
reason for this is evident: when a prospective employee, understood to be "that which must necessarily come
on account of special skills or market forces, is in a although it may not be known when." The decisive
position to make demands upon the prospective determinant in fixed-term employment is not the
employer, such prospective employee needs less activity that the employee is called upon to perform but
protection than the ordinary worker. [GMA Network, the day certain agreed upon by the parties for the
Inc. v. Pabriga, G.R. No. 176419 (2013)] The level of commencement and termination of the employment
protection to labor must be determined on the basis of relationship. [GMA Network, Inc. v. Pabriga, G.R. No.
the nature of the work, qualifications of the employee, 176419 (2013)]
and other relevant circumstances. For example, a
prospective employee with a bachelor’s degree cannot Independent contractors distinguished from fixed-
be said to be on equal footing with a grocery bagger term employees
with a high school diploma. [Fuji Television Network Inc v. No employer-employee relationship exists between
Espiritu, G.R. No. 204944-45 (2014)]. independent contractors and their principals; their
contracts are governed by the Civil Code provisions on
Determining factor contracts and other applicable laws. Employees under
The test in this kind of contract is not the necessity and fixed-term contracts cannot be independent
desirability of the employee’s activities, “but the day contractors (those engaged in legitimate job contracting
certain agreed upon by the parties for the or those who have unique skills and talents) because in
commencement and termination of the employment fixed-term contracts, an employer-employee
relationship.” [Brent School v. Zamora, G.R. No. L-48494 relationship exists. Fuji's argument that Arlene was an
(1990); GMA Network, Inc. v. Pabriga, G.R. No. 176419 independent contractor under a fixed-term contract is
(2013); Fuji Television Network Inc v. Espiritu, G.R. No. contradictory. Employees under fixed-term contracts
204944-45 (2014)]. cannot be independent contractors because in fixed-
term contracts, an employer-employee relationship
Regular fixed-term employee exists. [Fuji Television Network Inc v. Espiritu, G.R. No.
Where an employee’s contract had been continuously 204944-45 (2014)]
extended or renewed to the same position, with the
same duties and remained in the employ without any
interruption, then such employee is a regular employee.
The employee’s contract indicating a fixed term did not
Termination of contract In all such cases, the employer shall reinstate the
The existence of a fixed-term contract should not employee to his former position without loss of
mean that there can be no illegal dismissal. Due seniority rights if he indicates his desire to resume his
process must still be observed in the pretermination of work not later than one (1) month from the
fixed-term contracts of employment. [Fuji Television resumption of operations of his employer or from his
Network Inc v. Espiritu, G.R. No. 204944-45 (2014)] relief from the military or civic duty.
g. Security guards Under Article 286 (now Art. 301) of the Labor Code,
the bona fide suspension of the operation of a business
Previously, security guards were not allowed to join or undertaking for a period not exceeding six
labor organizations of the rank-and-file. However, months, or the fulfillment by the employee of a military
EO111, s. 1986, in amending the Labor Code, or civic duty does not terminate employment.
eliminated the disqualification on security guards from During this time, employees are considered on "floating
joining labor organizations. status".[Art. 301; International Hardware, Inc. vs. NLRC,
G.R. No. 80770 (1989)
Subsequently, RA 6715 was passed amending Art. 245
of the Labor Code, to wit: "Managerial employees are A floating status requires the dire exigency of the
not eligible to join, assist or form any labor employer’s bona fide suspension of operation, business
organization. Supervisory employees shall not be or undertaking. It takes place when (a) the security
eligible for membership in a labor organization of the agency’s clients decide not to renew their contracts with
rank-and-file employees but may join, assist, or form the agency and (b) also in instances where contracts for
separate labor organizations of their own." security services stipulate that the client may request the
agency for the replacement of the guards assigned to it.
As will be noted, the second sentence of Art. 245 In the latter case, the employer should prove that there
embodies an amendment disqualifying supervisory are no posts available to which the employee
employees from membership in a labor organization of temporarily out of work can be assigned. [Peak Ventures
the rank-and-file employees. It does not include security Corp v. Nestor Villareal, G.R. No. 184618 (2014)]
guards in the disqualification.
Temporary “off-detail” or “floating status” is the
While therefore under the old rules, security guards period of time when security guards are in between
were barred from joining a labor organization of the assignments or when they are made to wait after being
rank and file, under RA 6715, they may now freely join relieved from a previous post until they are transferred
a labor organization of the rank and file or that of the to a new one. For as long as such temporary inactivity
supervisory union, depending on their rank. By does not continue for a period exceeding six months, it
accommodating supervisory employees, the Secretary has been ruled that placing an employee on temporary
of Labor must likewise apply the provisions of RA 6715 "off-detail" or “floating status” is not equivalent to
to security guards by favorably allowing them free dismissal. [Leopard Security & Investigation Agency v. Quitoy,
access to a labor organization, whether rank and file or G.R. No. 186344 (2013)]
supervisory, in recognition of their constitutional right
to self-organization. [Manila Electric Co. v. Secretary of
Labor, G.R. No. 91902 (1991)]
The Secretary of Labor and Employment may, by Sec. 2. D.O. No. 174-17: Rules Implementing
appropriate regulations, restrict or prohibit the Articles 106 to 109 of the Labor Code, as
contracting-out of labor to protect the rights of amended.
workers established under this Code. In so Coverage:
prohibiting or restricting, he may make appropriate This shall apply to all parties in an arrangement where
distinctions between labor-only contracting and job ER-EE relationships exist.
contracting as well as differentiations within these
types of contracting and determine who among the Contractors and subcontractors referred to in these
parties involved shall be considered the employer for rules are prohibited from engaging in recruitment and
purposes of this Code, to prevent any violation or placement activities as defined in Art. 13(b) of the
circumvention of any provision of this Code. whether for local or overseas employment.
Security of Tenure
Art. 294. Security of Tenure. – In case of regular
employment, the employer shall not terminate the
services of an employee except for a just cause or
when authorized by this Tile. 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.
Nature of Right/Rationale
It is a constitutionally protected right [Sec. 3, Art. XIII,
1987 Constitution]; it cannot be blotted out by an
employment contract.
Management prerogative must be exercised in good employer's case succeeds or fails on the strength of its
faith and with due regard to the rights of the workers in evidence and not the weakness of that adduced by the
the spirit of fairness and with justice in mind. [Philbag employee, in keeping with the principle that the scales
Industrial Manufacturing Corp. v. Philbag Workers Union- of justice should be tilted in favor of the latter in case
Lakas at Gabay ng Manggagawang Nagkakaisa, G.R. No. of doubt in the evidence presented by them. [Functional,
182486 (2012)] Inc. v. Granfil, G.R. No. 176377 (2011)]
Requisites for the validity of management Employee must first establish the fact of dismissal
prerogative affecting security of tenure Before the employer must bear the burden of proving
1. Exercised in good faith for the advancement of the that the dismissal was legal, the employee must first
Employer's interest, and establish by substantial evidence the fact of his
2. Not for the purpose of defeating or circumventing dismissal from service. If there is no dismissal, then
the rights of the Employees under special laws or there can be no question as to the legality or illegality
under valid agreements. [San Miguel Brewery Sales thereof. [MZR Industries v. Colambot, G.R. No. 179001
Force Union v. Ople, G.R. No. 53515 (1989)] (2013)]
Guide in disposition of labor disputes In an illegal dismissal case, the onus probandi rests on the
Bare and vague allegations as to the manner of service employer to prove that its dismissal of an employee was
and the circumstances surrounding the same would not for a valid cause. However, before a case for illegal
suffice. A mere copy of the notice of termination dismissal can prosper, an employer-employee
allegedly sent by respondent to petitioner, without relationship must first be established by the employee
proof of receipt, or in the very least, actual service [Javier v. Fly Ace Corp., G.R. No. 192558 (2012)]
thereof upon petitioner, does not constitute substantial
evidence. Summary on Burden of Proof
1. Existence of ER-EE Relationship: Employee
There may be cases where the circumstances warrant 2. Fact of dismissal: Employee
favoring labor over the interests of management but 3. Validity of Dismissal: Employer
never should the scale be so tilted if the result is an
injustice to the employer. Justitia nemini neganda est Measure of Penalty
(Justice is to be denied to none). [Mansion Printing Center Not every case of insubordination or willful
v. Bitara, Jr., G.R. No. 168120. (2012)] disobedience by an employee reasonably deserves the
penalty of dismissal. The penalty to be imposed on an
Procedural vis-à-vis substantive issues erring employee must be commensurate with the
In labor cases, substantive issues must be addressed gravity of his offense. [Joel Montallana v. La Consolacion
more than anything else, and so, the Court may forego College Manila, G.R. No. 208890 (2014)]
the matter of procedural infirmities. [Ang v. San Joaquin,
Jr., G.R. No. 185549 (2013)] While an employer enjoys a wide latitude of discretion
in the promulgation of policies, rules and regulations on
Employer’s Burden of Proof work-related activities of the employees, those
directives, however, must always be fair and
Art. 292 (b). Miscellaneous Provisions. – … The
reasonable, and the corresponding penalties, when
burden of proving the termination was for a valid or
prescribed, must be commensurate to the offense
authorized cause shall rest on the employer.
involved and to the degree of the infraction. [Moreno v.
San Sebastian College-Recoletos, G.R. No. 175283 (2008)]
Unsubstantiated accusations or baseless conclusions of
the employer are insufficient legal justifications to
dismiss an employee. The unflinching rule in illegal
dismissal cases is that the employer bears the burden of
proof. [Garza v. Coca-Cola Bottlers Philippines, Inc., G.R.
No. 180972 (2014)]
the act complained of must be work-related and shows and Hotel Supreme, G.R No. 118506, April 18, 1997.)
that the employee concerned is unfit to continue Moreover, in order to constitute a "just cause" for
working for the employer. In addition, loss of dismissal, the act complained of must be related to the
confidence as a just cause for termination of performance of the duties of the employee such as
employment is premised on the fact that the employee would show him to be thereby unfit to continue
concerned holds a position of responsibility, trust working for the employer. [Equitable Banking Corp. vs.
and confidence or that the employee concerned is NLRC, et al., G.R. No. 102467 (1997)
entrusted with confidence with respect to delicate
matters, such as handling or case and protection of Note: DO 174-15 distinguishes fraud or willful breach
the property and assets of the employer. The of trust from loss of confidence but, as seen in the cases
betrayal of this trust is the essence of the offense for cited above, jurisprudence seems to make no such
which an employee is penalized. [Villanueva, Jr. v. distinction.
NLRC, G.R. No. 176893 (2012)]
POSITIONS OF TRUST AND CONFIDENCE
The loss of trust and confidence must be based not on 1. Managerial Employees - those vested with the
ordinary breach by the employee of the trust reposed in powers or prerogatives to lay down management
him by the employer, but, in the language of Art. 282 policies and to hire, transfer, suspend, lay-off,
(c) of the Labor Code, on willful breach. A breach is recall, discharge, assign or discipline employees or
willful if it is done intentionally, knowingly and effectively recommend such managerial actions.
purposely, without justifiable excuse, as distinguished 2. Fiduciary Rank And File - those who in the
from an act done carelessly, thoughtlessly, heedlessly or normal and routine exercise of their functions,
inadvertently. It must rest on substantial grounds and regularly handle significant amounts of money or
not on the employer's arbitrariness, whims, caprices or property. Examples are cashiers, auditors, property
suspicion; otherwise, the employee would eternally custodians, etc. [Prudential Guarantee and Assurance
remain at the mercy of the employer. [Johansen World Employee Labor Union v. NLRC, G.R. No. 185335
Group Corp. v. Gonzales III, G.R. No. 198733 (2012)] (2012)]
f. Analogous Causes
Acquittal in Criminal Case arising from
Misconduct Requisites:
Notwithstanding petitioner’s acquittal in the criminal 1. There must be an act or omission similar to those
case for qualified theft, the company had adequately specified just causes; and
established the basis for the company’s loss of 2. The act or omission must be voluntary and/or
confidence as a just cause to terminate. As opposed to willful on the part of the employees
the "proof beyond reasonable doubt" standard of
evidence required in criminal cases, labor suits require No act or omission shall be considered as analogous
only substantial evidence to prove the validity of the cause unless expressly specified in the company rules
dismissal. [Paulino v. NLRC, G.R. No. 176184 (2012)] and regulations or policies. [Sec. 5.2. (g), D.O. No. 147-
15]
Betrayal by a long-time employee
Length of service is not a bargaining chip that can One is analogous to another if it is susceptible of
simply be stacked against the employer. After all, an comparison with the latter either in general or in some
employer-employee relationship is symbiotic where specific detail; or has a close relationship with the latter.
both parties benefit from mutual loyalty and dedicated
service. If an employer had treated his employee well, OTHER CAUSES
has accorded him fairness and adequate compensation
as determined by law, it is only fair to expect a long- 1. Abandonment
time employee to return such fairness with at least some 2. Courtesy Resignation
respect and honesty. Thus, it may be said that betrayal 3. Change of Ownership
by a long-time employee is more insulting and odious 4. Habitual Absenteeism/Tardiness
for a fair employer. [Moya v. First Solid Rubber Industries, 5. Poor Performance
Inc., G.R. No. 184011 (2013)] 6. Past Offenses
7. Habitual Infractions
e. Commission of a Crime 8. Immorality
9. Totality of infractions
Requisites: 10. Pregnancy out of wedlock
1. There must be an act or omission 11. Conviction/Commission of a Crime
punishable/prohibited by law; and 12. Temporary “Off-detail” or “floating status”
2. The act or omission was committed by the
employee against the person of the employer, any Abandonment
immediate member of his/her family, or his/her Abandonment is a just cause for dismissal under Art.
duly authorized representative. [Sec. 5.2. (f), D.O. 297(b), . It is the deliberate and unjustified refusal of an
No. 147-15] employee to resume his employment. It is a form of
neglect of duty. Two factors should be present: (1)
Commission of a crime or offense by the employee Failure to report for work or absence without valid or
against the person of his employer or any immediate justifiable reason, (2) Clear intention to sever ER-EE
member of his family or his duly authorized relationship. The burden to prove whether the
representatives [Art. 297(d)] employee abandoned his or her work rests on the
employer. [Protective Maximum Security, Inc v. Celso E.
The employer may validly dismiss for loss of trust and Fuentes, G.R. No. 169303 (2015)]
confidence an employee who commits an act of fraud
prejudicial to the interest of the employer. Neither a Elements:
criminal prosecution nor a conviction beyond 1. Failure to report for work or absence without valid
reasonable doubt for the crime is a requisite for the or justifiable reason, and
validity of the dismissal. [Concepcion v Minex Import 2. A clear intention to sever the employer-employee
Corporation/Minerama Corporation, G.R. No. 153569 relationship, with the second element as the more
(2012)] determinative factor and being manifested by some
overt acts.
Absence must be accompanied by overt acts unerringly performance of an employee does not necessarily mean
pointing to the fact that the employee simply does not that he is guilty of gross and habitual neglect of duties
want to work anymore. It has been ruled that the [INC Shipmanagement Inc. v. Campo-Redondo, G.R. No.
employer has the burden of proof to show a deliberate 199931 (2015)].
and unjustified refusal of the employee to resume his
employment without any intention of returning. [Tan Past Offenses
Brothers Corp. of Basilan City v. Escudero, G.R. No. 188711 Previous offense may be used as valid justification for
(2013)] dismissal from work only if the infractions are related
to the subsequent offense upon which the basis of
Courtesy Resignation termination is decreed. [Century Canning Corporation v.
Resignation per se means voluntary relinquishment of a Ramil, G.R. No. 171630 (2010)]
position or office. Adding the word "courtesy" did not
change the essence of resignation. [Batongbacal v. Habitual Infractions
Associated Bank, G.R. No. 72977 (1988)] A series of irregularities when put together may
constitute serious misconduct, which under Art. 297 of
Change Of Ownership the Labor Code, as amended, is a just cause for
A mere change in the equity composition of a dismissal [Gustilo v. Wyeth Phil. Inc., G.R. No. 149629
corporation is neither a just nor an authorized cause (2004)]
that would legally permit the dismissal of the
corporation's employees en masse. [SME Bank, Inc. v. De Immorality
Guzman, G.R. No. 184517, 186641 (2013)] DECS Order No. 92 provides that disgraceful or
immoral conduct can be used as a basis for termination
Habitual Absenteeism/ Tardiness of employment [Santos, Jr. v. NLRC, G.R. No. 115795
Habitual tardiness is a form of neglect of duty. Lack of (1998)]
initiative, diligence, and discipline to come to work on
time everyday exhibit the employee's deportment The act of engaging in extramarital affairs was
towards work. Habitual and excessive tardiness is specifically provided for by the cooperative’s Personnel
inimical to the general productivity and business of the Policy as one of the grounds for termination of
employer. This is especially true when the tardiness employment and said act raised concerns to the
and/or absenteeism occurred frequently and repeatedly cooperative as the Board received numerous
within an extensive period of time. [R.B. Michael Press v. complaints and petitions from the cooperative
Galit, G.R. No. 153510 (2008)] members themselves asking for the removal of
Bandiola because of his immoral conduct, hence,
However, there are cases when absenteeism is not immorality (extramarital affair) justified terminating the
sufficient to justify termination. In the case of, Cavite employment by the employer [Alilem Credit Cooperative v.
Apparel v Michelle Marquez, G.R. No. 172044, (2013), the Bandiola, Jr., G.R. No. 173489 (2013)]
SC held: “Michelle might have been guilty of violating
company rules on leaves of absence and employee Jurisprudence has already set the standard of morality
discipline, still we find the penalty of dismissal imposed with which an act should be gauged – it is public and
on her unjustified under the circumstances. As earlier secular, not religious. Whether a conduct is
mentioned, Michelle had been in Cavite Apparel’s considered disgraceful or immoral should be made in
employ for six years, with no derogatory record other accordance with the prevailing norms of conduct,
than the four absences without official leave in which as stated in Leus, refer to those conducts which
question, not to mention that she had already been are proscribed because they detrimental to conditions
penalized for the first three absences, the most serious upon which depend the existence of and progress of
penalty being a six-day suspension for her third absence human society. The fact that a particular act does not
on April 27, 2000.” conform to the traditional moral views of a certain
sectarian institution is insufficient reason to qualify
Poor Performance such act as immoral unless it likewise does not conform
As a general concept, poor performance is tantamount to the public and secular standards. More importantly
to inefficiency and incompetence in the performance of there must be substantial evidence to establish that
official duties. An unsatisfactory rating can be a just premarital sexual relations and pregnancy out of
cause for dismissal only if it amounts to gross and wedlock is considered disgraceful or immoral. [Capin-
habitual neglect of duties. Poor or unsatisfactory Cadiz v Brent Hospital, G.R. 187417, (2016)]
Totality of Infractions Doctrine "off-detail" if there are no available posts under the
The totality of infractions or the number of violations agency's existing contracts. During such time, the
committed during the period of employment shall be security guard does not receive any salary or any
considered in determining the penalty to be imposed financial assistance provided by law. It does not
upon an erring employee. Fitness for continued constitute a dismissal, as the assignments primarily
employment cannot be compartmentalized into tight depend on the contracts entered into by the security
little cubicles of aspects of character, conduct and agencies with third parties, so long as such status does
ability separate and independent of each other. While it not continue beyond a reasonable time. When such a
may be true that petitioner was penalized for his "floating status" lasts for more than six (6) months, the
previous infractions, this does not and should not mean employee may be considered to have been
that his employment record would be wiped clean of constructively dismissed [Salvaloza v. NLRC, G.R. No.
his infractions. After all, the record of an employee is a 182086 (2010)].
relevant consideration in determining the penalty that
should be meted out since an employee's past See: A.2.h. Floating status.
misconduct and present behavior must be taken
together in determining the proper imposable penalty. Transfer/Reassignment of Work
[Merin v. NLRC, G.R. No. 171790 (2008)] Concerning the transfer of employees, these are the
following jurisprudential guidelines:
Pregnancy out of Wedlock 1. a transfer is a movement from one position to
Accordingly, when the law speaks of immoral or, another of equivalent rank, level or salary without
necessarily, disgraceful conduct, it pertains to public break in the service or a lateral movement from one
and secular morality; it refers to those conducts which position to another of equivalent rank or salary;
are proscribed because they are detrimental to 2. the employer has the inherent right to transfer or
conditions upon which depend the existence and reassign an employee for legitimate business
progress of human society. To stress, pre-marital sexual purposes;
relations between two consenting adults who have no 3. a transfer becomes unlawful where it is motivated
impediment to marry each other, and, consequently, by discrimination or bad faith or is effected as a
conceiving a child out of wedlock, gauged from a purely form of punishment or is a demotion without
public and secular view of morality, does not amount to sufficient cause;
a disgraceful or immoral conduct under Sec. 94(e) of 4. the employer must be able to show that the transfer
the 1992 MRPS. [Cheryl Leus v. St. Scholastica College is not unreasonable, inconvenient, or prejudicial to
Westgrove, G.R. No. 187226 (2015)] the employee. [Rural Bank of Cantilan, Inc. v. Julve,
G.R. No. 169750 (2007)]
Conviction/Commission of a Crime
The charge of drug abuse within the company’s If the transfer of an employee is not unreasonable, or
premises and during work hours constitutes serious inconvenient, or prejudicial to him, and it does not
misconduct which is one of the just causes for involve a demotion in rank or a diminution of his
termination. [Bughaw, Jr. v. Treasure Island Industrial, G.R. salaries, benefits and other privileges, the employee
No. 173151 (2008)] may not complain that it amounts to a constructive
dismissal. [Peckson v. Robinson’s Supermarket Corp., G.R.
Temporary “Off-Detail” or “Floating Status” No. 198534 (2013)]
Temporary "off-detail" or "floating status" is the period
of time when security guards are in between
assignments or when they are made to wait after being
relieved from a previous post until they are transferred
to a new one. It takes place when the security agency's
clients decide not to renew their contracts with the
agency, resulting in a situation where the available posts
under its existing contracts are less than the number of
guards in its roster. It also happens in instances where
contracts for security services stipulate that the client
may request the agency for the replacement of the
guards assigned to it even for want of cause, such that
the replaced security guard may be placed on temporary
Art. 298. The employer may also terminate the This refers to the installation of machinery to effect
employment of any employee due to the installation economy and efficiency in the employer’s method of
of labor-saving devices, redundancy, retrenchment to production [Edge Apparel, Inc. v. NLRC, G.R. No.
prevent losses or the closing or cessation of 121314 (1998)]
operation of the establishment or undertaking unless
the closing is for the purpose of circumventing the Requisites of a valid termination based on
provisions of this Title, by serving a written notice on installation of labor-saving devices
the workers and the Ministry of Labor and 1. There must be introduction of machinery,
Employment at least 1 month before the intended equipment or other devices;
date thereof. In case of termination due to the 2. The introduction must be done in good faith;
installation of labor-saving devices or redundancy, 3. The purpose for such introduction must be valid
the worker affected thereby shall be entitled to a such as to save on cost, enhance efficiency and
separation pay equivalent to at least 1 month pay or other justifiable economic reasons;
to at least 1 month pay for every year of service, 4. There is no other option available to the employer
whichever is higher. In case of retrenchment to than the introduction of machinery, equipment or
prevent losses in cases of closures or cessation of device and the consequent termination of
operations of establishment or undertaking not due employment of those affected thereby; and
to serious business losses or financial reverses, the 5. There must be fair and reasonable criteria in
separation pay shall be equivalent to 1 month pay or selecting employees to be terminated.
at least 1⁄2 month pay for every year of service,
whichever is higher. A fraction of at least 6 months In cases of installation of labor-saving devices,
shall be considered 1 whole year. redundancy and retrenchment, the ‘Last-In, First-Out
Rule’ shall apply except when an employee volunteers
to be separated from employment. [Sec. 5.4. (a), D.O.
Under Art. 298, the ff. are authorized causes: No. 147-15]
a. Installation of labor-saving devices
b. Redundancy
c. Retrenchment to prevent serious losses
b. Redundancy
d. Closing or cessation of business not due to serious
Redundancy exists when the service capability of the
losses
workforce is in excess of what is reasonably needed to
meet the demands of the business enterprise. A
Due to retrenchment,
Due to labor-saving position is redundant when it is superfluous, and
closure, or suspension
devices or redundancy superfluity of a position or positions could be the result
of operations
of a number of factors, such as the overhiring of
1-month pay, or at least 1-month pay, or at least
workers, a decrease in the volume of business or the
1-month pay for every ½ month pay for every
dropping of a particular line or service previously
year of service, year of service,
manufactured or undertaken by the enterprise. [Morales
whichever is higher whichever is higher
v. Metrobank, G.R. No. 182475 (2012)]
A fraction of at least six months shall be considered
as one year Requisites of redundancy:
1. There must be superfluous positions or services of
Basis employees;
Employment is the lifeblood upon which the worker 2. The positions or services are in excess of what is
and his family owe their survival. [Flight Attendants and reasonably demanded by the actual requirements of
Stewards Ass'n of the Philippines v. PAL, Inc., G.R. No. the enterprise to operate in an economical and
178083 (2009)] efficient manner;
3. There must be good faith in abolishing redundant
positions;
4. There must be fair and reasonable criteria in
selecting the employees to be terminated; and
5. There must be an adequate proof of redundancy Employment at least one month prior to the
such as but not limited to the new staffing patter, intended date of retrenchment;
feasibility studies/proposal, on the viability of the 7. That the employer pays the retrenched employees
newly created positions, job description and the separation pay equivalent to 1 month pay or at least
approval by the management of the restructuring. 1⁄2 month pay for every year of service, whichever
[Sec. 5.4. (c), D.O. No. 147-15] is higher.
6. Written notice served on both the employees and
the DOLE at least one month prior to the intended The employer bears the burden of proving the existence
date of termination of employment; of the imminence of substantial losses with clear and
7. Payment of separation pay equivalent to at least satisfactory evidence that there are legitimate business
one month pay for every year of service reasons justifying a retrenchment. [Mount Carmel College
Employees Union (MCCEU), et. al v. Mount Carmel College,
In implementing a redundancy program, it has been Inc. G.R. No. 187621 (2014)]
ruled that the employer is required to adopt a fair and
reasonable criteria, taking into consideration such The Court recognizes two kinds of losses which can
factors as (a) preferred status; (b) efficiency; and (c) justify retrenchment — incurred losses which are
seniority, among others. [Morales v. Metrobank, G.R. No. substantial, serious, actual and real, and expected losses
182475 (2012)] which are reasonably imminent. [Sanoh Fulton Phils. Inc.
v. Bernardo & Tagohoy, G.R. No. 187214 (2013)]
To exhibit its good faith and that there was a fair and
reasonable criteria in ascertaining redundant positions, d. Closure of a Business
a company claiming to be over manned must produce
adequate proof of the same. Such proof includes but is Requisites:
not limited to the new staffing pattern, feasibility 1. There must be a decision to close or cease
studies/proposals on the viability of the newly created operation of the enterprise by the management;
positions, job description and the approval by the 2. The decision was made in good faith; and
management of the restructuring. [General Milling 3. There is no other option available to the employer
Corporation v Violeta L. Viajar, G.R. No. 181738 (2013)] except to close or cease operations. [Sec. 5.4. (d),
D.O. No. 147-15]
c. Retrenchment
Guidelines in Closure
Requisites of a valid retrenchment: 1. Closure or cessation of operations of establishment
1. The retrenchment is reasonably necessary and or undertaking may either be partial or total
likely to prevent business 2. Closure or cessation of operations of establishment
2. The losses, if already incurred, are not merely de or undertaking may or may not be due to serious
minimis, but substantial, serious, actual and real, or business losses or financial service reverses.
if only expected, are reasonably imminent as However, in both instances, proof must be shown
perceived objectively and in good faith by the that:
employer; a. it was done in good faith to advance the
3. The expected or actual losses must be proved by employer's interest and not for the purpose of
sufficient and convincing evidence; defeating or circumventing the rights of
4. The retrenchment must be in good faith for the employees under the law or a valid agreement;
advancement of its interest and not to defeat or and
circumvent the employees’ right to security of b. Written notice on the affected employees and
tenure; and the DOLE is served at least one month before
5. There must be fair and reasonable criteria in the intended date of termination of
ascertaining who would be dismissed and who employment.
would be retained among the employees, such as 3. The employer can lawfully close shop even if not
status, efficiency, seniority, physical fitness, age, due to serious business losses or financial reverses
and financial hardship for certain workers. [Sec. but separation pay, which is equivalent to at least
5.2. (c), D.O. No. 147-15] one month pay as provided for by Art. 289 of the
6. That the employer served written notice both to Labor Code, as amended, must be given to all the
the employees and to the Department of Labor and affected employees.
Definition of Resignation
Resignation is the voluntary act of an employee who
C. Termination of finds himself in a situation where he believes that
Employment by Employee personal reasons cannot be sacrificed in favor of the
exigency of the service, such that he has no other choice
but to disassociate himself from his employment.
1. Resignation vs. Constructive [Cervantes v. PAL Maritime Corp., G.R. No. 175209
Dismissal (2013)]
Period of suspension
No preventive suspension shall last longer than thirty
(30) days.
Reinstatement means restoration to a state or a. Actually reinstate the dismissed employees or,
condition from which one had been removed or b. Constructively reinstate them in the payroll.
separated. The person reinstated assumes the position
he had occupied prior to his dismissal. [Asian Terminals, Either way, this must be done immediately upon the
Inc. v. Villanueva, G.R. No. 143219 (2006)] filing of their appeal, without need of any executory
writ.
General Rule: Reinstatement and backwages
If the order of reinstatement of the Labor Arbiter is
Exceptions: reversed on appeal, it is obligatory on the part of the
a. Separation pay employer to reinstate and pay the wages of the
b. Closure of business [Retuya v. Hon. Dumarpa, G.R. dismissed employee during the period of appeal until
No. 148848 (2003)] reversal by the higher court. The Labor Arbiter's order
c. Economic business conditions [Union of Supervisors of reinstatement is immediately executory and the
v. Secretary of Labor, G.R. No. L-39889 (1981)] employer has to either re-admit them to work under the
d. Employee’s unsuitability [Divine Word High School v. same terms and conditions prevailing prior to their
NLRC, G.R. No. 72207 (1986)] dismissal, or to reinstate them in the payroll, and that
e. Employee’s retirement/ overage [New Philippine failing to exercise the options in the alternative,
Skylanders, Inc. v. Dakila, G.R. No. 199547 (2012)] employer must pay the employee's salaries [Magana v.
f. Antipathy and antagonism [Wensha Spa Center v. Medicard Philippines, Inc., G.R. No. 174833 (2010)]
Yung, G.R. No. 185122 (2010)]
An employee who voluntarily resigns is not entitled to the position to which he/she is to be reinstated no
separation pay unless stipulated in the employment longer exists and there is no substantially
contract, or the collective bargaining agreement, or is equivalent position in the establishment to which
sanctioned by established practice or policy of the he/she can be assigned. [Gaco v. NLRC, G.R. No.
employer. [Phimco Industries v. NLRC, G.R. No. 118041 104690 (1994)]
(1997); Hinatuan Mining Corp v. NLRC, G.R. No. d. Lack of service assignment of security guard by
117394 (1997) cited in JPL Marketing Promotions v. CA, reason of age. [D.O. 150, s. 2016] [DOLE
G.R. No. 151966 (2005)] Handbook on Workers’ Statutory Monetary
Benefits, 2018 ed.]
AMOUNT
Notice of Termination
One-Half (½) Month Pay per Year of Service The employer may terminate the employment of any
An employee is entitled to receive separation pay employee due to the above-mentioned authorized
equivalent to ½ month pay for every year of service, a causes by serving a written notice on the employee
fraction of at least six (6) months being considered as and the DOLE through its regional office having
one whole year, if his/her separation from the service jurisdiction over the place of business at least 1 month
is due to any of the following authorized causes: before the intended date thereof. [DOLE Handbook on
a. Retrenchment to prevent losses (i.e. reduction of Workers’ Statutory Monetary Benefits, 2018 ed.]
personnel effected by management to prevent
losses) [Art. 298]; Basis of Separation Pay
b. Closure or cessation of operation of an The computation of separation pay of an employee
establishment not due to serious losses or financial shall be based on his/her latest salary rate. [DOLE
reverses [Art. 298]; Handbook on Workers’ Statutory Monetary Benefits, 2018 ed.]
c. When the EE is suffering from a disease not
curable within a period of six (6) months and Inclusion of Regular Allowance in the
his/her continued employment is prejudicial to Computation
his/her health or to the health of his/her co- In the computation of separation pay, it would be error
employees [Art. 299]; and, not to integrate the allowance with the basic salary. The
d. Lack of service assignment of security guard for a salary base properly used in computing the separation
continuous period of six (6) months [D.O. 150, s. pay should include not just the basic salary but also the
2016] regular allowances that an employee has been receiving.
[Planters’ Products, Inc. v. NLRC, G.R. No. 78524 (1989);
In no case will an employee get less than one (1) month [DOLE Handbook on Workers’ Statutory Monetary Benefits,
separation pay if the separation is due to the above 2018 ed.]]
stated causes. [DOLE Handbook on Workers’ Statutory
Monetary Benefits, 2018 ed.] Non-taxable
In case of separation of an official or employee from
One-Month Pay per Year of Service the service of the employer due to death, sickness or
An employee is entitled to separation pay equivalent to other physical disability or for any cause beyond the
his/her one-month pay for every year of service, a control of the said official or employee, any amount
fraction of at least 6 months being considered as one received by him or by his heirs from the employer as a
whole year, if his/her separation from service is due to consequence of such separation shall likewise be
any of the following: exempt from tax. [Last provisio of par. 1, Sec. 1, RA
a. Installation by employer of labor-saving devices; 4917]
b. Redundancy, as when the position of the employee
has been found to be excessive or unnecessary in
the operation of the enterprise;
c. Impossible reinstatement of the employee to
his/her former position or to a substantially
equivalent position for reasons not attributable to
the fault of the employer, as when the
reinstatement ordered by a competent authority
cannot be implemented due to closure of cessation
of operations of the establishment/employer, or
Thus, “one-half month salary” is equivalent to 22.5 months reckoned from the date of retirement by the
days. [Capitol Wireless, Inc. v. Sec. Confessor, G.R. No. number of actual working days in that particular period,
117174 (1996); Reyes v. NLRC, G.R. No. 160233 (2007)] provided that the determination of rates of payment by
results are in accordance with established regulations.
Other benefits may be included in the computation of
the retirement pay upon agreement of the ER and the For covered workers who are paid by result and do not
EE or if provided in the CBA. have a fixed monthly salary rate, the basis for the
determination of the salary for 15 days shall be their
Retirement pay under RA 7641 vis-à-vis retirement average daily salary (ADS).
benefits under SSS and GSIS laws
RA 7641 mandates payment of retirement benefits. All The ADS is derived by dividing the total salary or
private sector employees regardless of their position, earning for the last 12 months reckoned from the date
designation or status and irrespective of the method by of retirement by the number of actual working days in
which their wages are paid are entitled to retirement that particular period, provided that the determination
benefits upon compulsory retirement at the age of sixty- of rates of payment by results are in accordance with
five (65) or upon optional retirement at sixty (60) or established regulations.
more but not 65. The minimum retirement pay due
covered employees shall be equivalent to one-half 4. Retirement Benefit of Part-
month salary for every year of service, a fraction of at
least six (6) months being considered as one whole year. Time Workers
The benefits under this law are other than those granted
by the SSS or the GSIS. [Secs. 1 & 2, RA 7641] Part-time workers are also entitled to retirement pay of
“one-half month salary” for every year of service under
Retirement Benefits under a CBA or Applicable RA 7641 after satisfying the following conditions
Contract precedent for optional retirement:
Any EE may retire or be retired by his/her ER upon a. There’s no retirement plan between the ER and the
reaching the age established in the CBA or other EE; and,
applicable agreement/contract and shall receive the b. The EE should have reached the age of 60 years,
retirement benefits granted therein; provided, however, and should have rendered at least 5 years of service
that such retirement benefits shall not be less than the with the ER.
retirement pay required under RA 7641, and provided
further that if such retirement benefits under the Applying the foregoing principle, the components of
agreement are less, the ER shall pay the difference. [Art. retirement benefit of part-time workers may likewise be
302; Sec. 3.2, IRR] computed at least in proportion to the salary and related
benefits due them. [DOLE Handbook on Workers’
Where both the ER and the EE contribute to a Statutory Monetary Benefits, 2018 ed.]
retirement fund pursuant to the applicable agreement,
the ER’s total contributions and the accrued interest
thereof should not be less than the total retirement
benefits to which the EE would have been entitled had
there been no such retirement benefits’ fund. If such
total portion from the ER is less, the ER shall pay the
deficiency. [Sec. 3.3, IRR]
3. Retirement Benefits of
Workers Who are Paid By
Results
For covered workers who are paid by result and do not
have a fixed monthly salary rate, the basis for the
determination of the salary for 15 days shall be their
average daily salary (ADS). The ADS is derived by
dividing the total salary or earning for the last 12
The State shall regulate the relations between workers The law in protecting the rights of the employees
and employers, recognizing the right of labor to its authorizes neither oppression nor self-destruction of
just share in the fruits of production and the right of the employer. It should be made clear that when the law
enterprises to reasonable returns to investments, and tilts the scale of justice in favor of labor, it is but a
to expansion and growth. recognition of the inherent economic inequality
between labor and management. Never should the scale
be so tilted if the result is an injustice to the employer.
The right of an employer to regulate all aspects of [Panuncillo v. CAP, G.R. No. 161305 (2007)]
employment, aptly called “management prerogative,”
gives employers the freedom to regulate, according to Under the doctrine of management prerogative, every
their discretion and best judgment, all aspects of employer has the inherent right to regulate, according
employment, including work assignment, working to his own discretion and judgment, all aspects of
methods, processes to be followed, working employment, including hiring, work assignments,
regulations, transfer of employees, work supervision, working methods, the time, place and manner of work,
lay-off of workers and the discipline, dismissal and work supervision, transfer of employees, lay-off of
recall of workers. In this light, courts often decline to workers, and discipline, dismissal, and recall of
interfere in legitimate business decisions of employers. employees. The only limitations to the exercise of this
In fact, labor laws discourage interference in employers’ prerogative are those imposed by labor laws and the
judgment concerning the conduct of their business. principles of equity and substantial justice. [Peckson v.
Xxx Among the employer’s management prerogatives Robinson’s Supermarket Corporation, G.R. No. 198534,
is the right to prescribe reasonable rules and regulations (2013)]
necessary or proper for the conduct of its business or
concern, to provide certain disciplinary measures to The exercise of management prerogative is valid
implement said rules and to assure that the same would provided it is not performed in a malicious, harsh,
be complied with. At the same time, the employee has oppressive, vindictive or wanton manner or out of
the corollary duty to obey all reasonable rules, orders, malice or spite. [Magdadaro v. PNB, G.R. No. 166198
and instructions of the employer; and willful or (2009)]
intentional disobedience thereto, as a general rule,
justifies termination of the contract of service and the Limits to Management Prerogative
dismissal of the employee. [St. Luke’s Medical Center, Inc.
v. Sanchez, G.R. 212054 (2015)] 1. Good faith - So long as a company’s management
prerogatives are exercised in good faith for the
The employer’s right to conduct the affairs of his advancement of the employer’s interest and not for
business, according to its own discretion and judgment, the purpose of defeating or circumventing the
is well-recognized. An employer has a free reign and rights of the employees under special laws or under
valid agreements, this Court will uphold them. Although management prerogative refers to the
Even as the law is solicitous of the welfare of the right to regulate all aspects of employment, it
employees, it must also protect the right of an cannot be understood to include the right to
employer to exercise what are clearly management temporarily withhold salary/wages without the
prerogatives. The free will of management to consent of the employee. To sanction such an
conduct its own business affairs to achieve its interpretation would be contrary to Art. 116 of the
purpose cannot be denied. [Ernesto G. Ymbong v. Labor Code. [SHS Perforated Materials, Inc. v. Diaz,
ABS-CBN Broadcasting Corp., supra.] G.R. No. 185814 (2010)]
It is incumbent upon the company to show that 4. Collective Bargaining – The CBA provisions
decisions made under management prerogative are agreed upon by the Company and the Union
in good faith and not intended to circumvent delimit the free exercise of management
employees’ rights. [San Miguel Brewery Sales Force prerogative. The parties in a CBA may establish
Union (PTGWO) v. Ople, G.R. No. L-53515 (1989)] such stipulations, clauses, terms and conditions as
they may deem convenient provided these are not
2. Without grave abuse of discretion - But, like contrary to law, morals, good customs, public
other rights, there are limits thereto. The order or public policy. Where the CBA is clear and
managerial prerogative to transfer personnel must unambiguous, it becomes the law between the
be exercised without grave abuse of discretion, bearing in parties and compliance therewith is mandated by
mind the basic elements of justice and fair play. the express policy of the law. [Goya Inc. v. Goya, Inc.,
Having the right should not be confused with the Employees Union-FFW, G.R. No. 170054 (2013)]
manner in which the right is exercised. [Tinio v. CA,
G.R. No. 171764 (2007)] 5. Equity and/or Substantial Justice – The Court
recognized the inherent right of the employer to
3. Law – In one case, a pharmaceutical company discipline its employees but it should still ensure
defended its termination of rank and file employees that the employer exercises the prerogative to
during a bargaining deadlock, as an exercise of discipline humanely and considerately, and that the
management prerogative. This was after the Labor sanction imposed is commensurate to the offense
Secretary had assumed jurisdiction over the dispute involved and to the degree of the infraction. The
and enjoined the parties from “any acts which discipline exacted by the employer should further
might exacerbate the situation.” consider the employee’s length of service and the
number of infractions during his employment.
The Court disagreed with the company’s defense, [Dongon v. Rapid Movers and Forwarders Co., Inc., G.R.
stating that the privilege is not absolute but subject No. 163431 (2013)]
to limitations imposed by law. In this case, it is
limited by Sec. 236(g), which gives the Secretary the Assumption of jurisdiction by the Secretary of
power to assume jurisdiction and resolve labor Labor; an exception to management prerogative
disputes involving industries indispensable to This Court declared that it recognizes the exercise of
national interest. management prerogatives and it often declines to
interfere with the legitimate business decisions of the
The company’s management prerogatives are not employer… However, as expressed in PAL v. NLRC,
being unjustly curtailed but duly tempered by the the privilege is not absolute, but subject to exceptions.
limitations set by law, taking into account its special One of these exceptions is when the Secretary of Labor
character and the particular circumstances in the assumes jurisdiction over labor disputes involving
case at bench. [Metrolab Industries, Inc. v. Roldan- industries indispensable to the national interest under
Confesor, G.R. No. 108855 (2013)] Art. 263(g) of the Labor Code. [University of Immaculate
Concepcion Inc. v. Sec. of Labor, G.R. No. 151379 (2005)]
Management prerogative refers to the right of an
employer to regulate all aspects of employment,
such as the freedom to prescribe work
assignments, working methods, processes to be
followed, regulation regarding transfer of
employees, supervision of their work, lay-off and
discipline, and dismissal and recall of work.
The employer’s right to conduct the affairs of his The Employer has the right to transfer or assign
business, according to its own discretion and judgment, Employees from one area of operation to another, or
includes the prerogative to instill discipline in its one office to another or in pursuit of its legitimate
employees and to impose penalties, including dismissal, business interest, Provided there is no demotion in rank
upon erring employees. The only criterion to guide the or diminution of salary, benefits and other privileges
exercise of its management prerogative is that the and not motivated by discrimination or made in bad
policies, rules and regulations on work-related activities faith, or effected as a form of punishment or demotion
of the employees must always be fair and reasonable without sufficient cause. [Westin Phil. Plaza Hotel v.
and the corresponding penalties, when prescribed, NLRC, G.R. No. 121621 (1999)]
commensurate to the offense involved and to the
degree of the infraction. [Consolidated Food Corporation v. When the transfer is not unreasonable, or inconvenient,
NRLC, G.R. No. 118647 (1999); St. Michael’s Institute v. or prejudicial to the employee, and it does not involve
Santos, G.R. No. 145280 (2001)] a demotion in rank or diminution of salaries, benefits,
and other privileges, the employee may not complain
Right to dismiss or otherwise impose disciplinary that it amounts to a constructive dismissal. [Bisig ng
sanctions upon an employee for just and valid cause, Manggagawa sa TRYCO v. NLRC, G.R. No. 151309
pertains in the first place to the employer, as well as the (2008)]
authority to determine the existence of said cause in
accordance with the norms of due process. [Makati It is management prerogative for employers to transfer
Haberdashery, Inc. v. NLRC, G.R. Nos. 83380-81 (1989)] employees on just and valid grounds such as genuine
business necessity. [William Barroga v. Data Center College
Although the right of employers to shape their own of the Philippines, G.R. No. 174158 (2011)]
work force,is recognized, this management prerogative
must not curtail the basic right of employees to security Re-assignments made by management pending
of tenure. [Alert Security & Investigation Agency, Inc. v. investigation of irregularities allegedly committed by an
Saidali Pasawilan, et. al., G.R. No. 182397 (2011)] employee fall within the ambit of management
prerogative. The purpose of reassignments is no
Disciplinary action against an erring employee is a different from that of preventive suspension which
management prerogative which, generally, is not subject management could validly impose as a disciplinary
to judicial interference. However, this policy can be measure for the protection of the company's property
justified only if the disciplinary action is dictated by pending investigation of any alleged malfeasance or
legitimate business reasons and is not oppressive. misfeasance committed by the employee. [Ruiz v. Wendel
[Areno v. Skycable, G.R. No 180302 (2010)] Osaka Realty Corp., G.R. No. 189082 (2012)]
Management has the prerogative on whether or not to The matter of giving a bonus over and above the
renew the contract of a fixed-term employee. [Fonterra worker’s lawful salaries and allowances is entirely
Brands Phils., Inc. v. Largado, G.R. No. 205300 (2015)] dependent on the financial capability of the employer
to give it. [Kimberly-Clark Philippines, Inc. v. Dimayuga,
G.R. No. 177705 (2009)]
C. Productivity Standard
The employer has the right to demote and transfer an E.Change of Working Hours
employee who has failed to observe proper diligence in
his work and incurred habitual tardiness and absences Management retains the prerogative, whenever
and indolence in his assigned work. [Petrophil Corporation exigencies of the service so require, to change the
v. NLRC, G.R. No. L-64048 (1986)] working hours of its employees. So long as such
prerogative is exercised in good faith for the
In the consolidated cases of Leonardo v. NLRC [G. R. advancement of the employer’s interest and not for the
No. 125303 (2000)] and Fuerte v. Aquino [G. R. No. purpose of defeating or circumventing the rights of the
126937 (2000)], the employer claimed that the employees under special laws or under valid
employee was demoted pursuant to a company policy agreements, this Court will uphold such exercise. [Sime
intended to foster competition among its employees. Darby Pilipinas Inc. v. NLRC, G.R. No. 119205 (1998)]
Under this scheme, its employees are required to
comply with a monthly sales quota. Should a supervisor
such as the employee fail to meet his quota for several
F. Bonafide Occupational
consecutive months, he will be demoted, whereupon
his supervisor’s allowance will be withdrawn and be
Qualifications
given to the individual who takes his place. When the Employment in particular jobs may not be limited to
employee concerned succeeds in meeting the quota persons of a particular sex, religion, or national origin
again, he is re-appointed supervisor and his allowance unless the employer can show that sex, religion, or
is restored. The Supreme Court held that this national origin is an actual qualification for performing
arrangement is an allowable exercise of company rights the job. The exception is is called a bona fide
since an employer is entitled to impose productivity occupational qualification (BFOQ). In the United
standards for its workers. In fact, non-compliance may States, there are a few federal and many state job
be visited with a penalty even more severe than discrimination laws that contain an exception allowing
demotion. an employer to engage in an otherwise unlawful form
of prohibited discrimination when the action is based
D. Bonus on a BFOQ necessary to the normal operation of a
business or enterprise. BFOQ is valid "provided it
A bonus is "a gratuity or act of liberality of the giver reflects an inherent quality reasonably necessary for
which the recipient has no right to demand as a matter satisfactory job performance."[Yrasuegui v. PAL, G.R.
of right" [Philippine National Construction Corp. v. National No. 168081 (2008)]
Labor Relations Commission, 345 Phil. 324, 331 (1997)]. "It
is something given in addition to what is ordinarily The concept of a bona fide occupational qualification is
received by or strictly due the recipient." The granting not foreign in our jurisdiction. We employ the standard
of a bonus is basically a management prerogative which of reasonableness of the company policy which is
cannot be forced upon the employer "who may not be parallel to the bona fide occupational qualification
obliged to assume the onerous burden of granting requirement. In Duncan Association of Detailman-PTGWO
bonuses or other benefits aside from the employee's and Pedro Tecson v. Glaxo Wellcome Philippines, Inc., we
basic salaries or wages" xxx. [Kamaya Point Hotel v. passed on the validity of the policy of a pharmaceutical
National Labor Relations Commission, Federation of Free company prohibiting its employees from marrying
Workers and Nemia Quiambao, G.R. No. 75289, (1989); employees of any competitor company. We held that
Traders Royal Bank v. NLRC, G.R. No. 120592 (1990)] Glaxo has a right to guard its trade secrets,
manufacturing formulas, marketing strategies and other
confidential programs and information from
competitors. We considered the prohibition against
personal or marital relationships with employees of
competitor companies upon Glaxo’s employees
G. Post-Employment
Restrictions
In cases where an employee assails a contract
containing a provision prohibiting him or her from
accepting competitive employment as against public
policy, the employer has to adduce evidence to prove
that the restriction is reasonable and not greater than
necessary to protect the employer’s legitimate business
interests. The restraint may not be unduly harsh or
oppressive in curtailing the employee’s legitimate
efforts to earn a livelihood and must be reasonable in
light of sound public policy. [Rivera v. Solidbank, G.R.
No. 163269 (2006)]
Except as otherwise provided under the Code the 2. Versus Regional Director
Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide: [Art. 129]
a. Unfair labor practices cases;
b. Termination disputes; Jurisdiction on Money Claims (Labor Arbiter v.
c. If accompanied with a claim for reinstatement, Regional Director)
those cases that workers may file involving wages, A money claim arising from employer-employee
rates of pay, hours of work and other terms and relations, except SSS, ECC/Medicare [Philhealth]
conditions of employment; claims, is within the jurisdiction of a labor arbiter if:
d. Claims for actual, moral, exemplary and other a. The claim, regardless of amount, is accompanied
forms of damages arising from the employer- with a claim of reinstatement; or
employee relations; b. The claim exceeds P5,000, whether or not there is
e. Cases arising from any violation of Art. [279] of a claim for reinstatement.
this Code, including questions involving the
legality of strikes and lockouts; The Regional Director has jurisdiction if:
f. Except claims for Employees Compensation, a. Money claims arising out of employer-employees
Social Security, Medicare [Philhealth] and relationships
maternity benefits, all other claims, arising from b. the money claim is not accompanied by a claim for
employer-employee relations, including those of reinstatement AND
persons in domestic or household service, c. the claim does not exceed P5,000, whether or not
involving an amount exceeding five thousand claims do arise from ER-EE relationships
pesos (P5,000) regardless of whether accompanied
with a claim for reinstatement. [Art. 224] PROCEDURE BEFORE LABOR ARBITER
g. Money claims arising out of employer-employee
relationship or by virtue of any law or contract, Where to File [Sec. 1, Rule IV, 2011 NLRC Rules of
involving claims for actual, moral, exemplary and Procedure]
other forms of damages, as well as employment All cases which Labor Arbiters have authority to hear
termination of OFWs; and decide may be filed in the Regional Arbitration
h. Wage distortion disputes in unorganized Branch (RAB) having jurisdiction over the workplace
establishments not voluntarily settled by the of the complainant or petitioner
parties. [Art. 124] a. Workplace – place or locality where the employee
i. Enforcement of compromise agreements when is regularly assigned at the time the cause of action
there is non-compliance by any of the parties. arose. It shall include the place where the employee
[Art. 233] is supposed to report back after a temporary detail,
j. Other cases as may be provided by law. assignment, or travel.
b. In the case of field employees, ambulant or
Requisites of LA’s jurisdiction over Money Claims itinerant workers, their workplace is (a) where they
a. Money claims arose from ER-EE relations are regularly assigned or (b) where they are
Employer-employee relationship is a jurisdictional supposed to regularly receive their salaries and
requisite, absent of which, the NLRC has no wages or work instructions from, and report the
jurisdiction to hear and decide the case. [Hawaiian- results of their assignment to their employers.
Philippine Company v. Gulmatico, G.R. No. 106231
(1994)]
2. Remedies
Appeal: Appeal from decisions of the NLRC after
denial of Motion for Reconsideration appealed via Rule
65 to CA then Rule 45 to the SC [St. Martin’s Funeral
Homes v. NLRC, 295 SCRA 494 (1998)]
4. In three (3) legibly typewritten or printed the same to the Commission for compulsory
copies; and arbitration. Such assumption or certification shall
5. Accompanied by (a) proof of payment of the have the effect of automatically enjoining the
required appeal fee; (b) posting of a cash or intended or impending strike or lockout as specified
surety bond as provided in Sec. 6 of the NLRC in the assumption or certification order.
Rules; and (c) proof of service upon the other
parties. Function of the NLRC
b. A mere notice of appeal without complying with When sitting in a compulsory arbitration certified to by
the other requisites aforestated shall not stop the the Secretary of Labor, the NLRC is not sitting as a
running of the period for perfecting an appeal. judicial court but as an administrative body charged
c. The appellee may file with the Regional Arbitration with the duty to implement the order of the Secretary.
Branch or Regional Office where the appeal was Its function only is to formulate the terms and
filed, his answer or reply to appellant’s conditions of the CBA and cannot go beyond the scope
memorandum of appeal, not later than 10 calendar of the order. Moreover, the Commission is further
days from receipt thereof. Failure on the part of the tasked to act within the earliest time possible and with
appellee who was properly furnished with a copy the end in view that its action would not only serve the
of the appeal to file his answer or reply within the interests of the parties alone, but would also have
said period may be construed as a waiver on his favorable implications to the community and to the
part to file the same. economy as a whole. This is the clear intention of the
d. Subject to the provisions of Art. [225] of the Labor legislative body in enacting Art. 278 paragraph (g) of the
Code, once the appeal is perfected in accordance Labor Code, as amended by Sec. 27 of RA 6175 [Union
with these Rules, the Commission shall limit itself of Filipino Employees v. NLRC, G.R. No. 91025 (1990)]
to reviewing and deciding only the specific issues
that were elevated on appeal. Effects of Certification
a. Upon certification, the intended or impending
EXTRAORDINARY REMEDY strike or lockout is automatically enjoined,
notwithstanding the filing of any motion for
Verified Petition: A party aggrieved by any order or reconsideration of the certification order nor the
resolution of the Labor Arbiter, including a writ of non-resolution of any such motion which may have
execution and others issued during execution been duly submitted to the Office of the Secretary
proceedings, may file a verified petition to annul or of Labor and Employment.
modify the same. The petition may be accompanied by b. If a work stoppage has already taken place at the
an application for the issuance of a temporary time of the certification, all striking or locked out
restraining order and/or writ of preliminary or employees shall immediately return to work and
permanent injunction to enjoin the Labor Arbiter, or the employer shall immediately resume operations
any person acting under his/her authority, to desist and readmit all workers under the same terms and
from enforcing said resolution, order or writ. [Rule XII, conditions prevailing before the strike or lockout.
Sec. 1, 2011 NLRC Rules of Procedure, as amended by c. All cases between the same parties, except where
En Banc Resolution No. 07-14] the certification order specifies otherwise the issues
submitted for arbitration which are already filed or
CERTIFIED CASES may be filed, and are relevant to or are proper
incidents of the certified case, shall be considered
Definition subsumed or absorbed by the certified case, and
Certified labor disputes are cases certified to the shall be decided by the appropriate Division of the
Commission for compulsory arbitration under Art. Commission.
278(g) of the Labor Code. [Sec. 2, The 2011 NLRC d. The parties to a certified case, under pain of
Rules and Procedures] contempt, shall inform their counsels and the
Division concerned of all cases pending with the
Art. 278 (g). Strikes, Picketing and Lockouts. – Regional Arbitration Branches and the Voluntary
When, in his opinion, there exists a labor dispute Arbitrators relative or incident to the certified case
causing or likely to cause a strike or lockout in an before it.
industry indispensable to the national interest, the e. When a certified labor dispute involves a business
Secretary of Labor and Employment may assume entity with several workplaces located in different
jurisdiction over the dispute and decide it or certify regions, the Division having territorial jurisdiction
over the principal office of the company shall c. No motion for extension or postponement shall be
acquire jurisdiction to decide such labor dispute; entertained. [Sec. 5, Rule VIII, 2011 NLRC Rules
unless the certification order provides otherwise. and Procedures]
[Sec. 3, Rule VIII, 2011 NLRC Rules and
Procedures] Execution of Judgment
Upon issuance of the entry of judgment, the
Effects of Defiance Commission motu propio or upon motion by the
Non-compliance with the certification order of the proper party, may cause the execution of the judgment
SOLE shall be considered as an illegal act committed in the certified case. [Sec. 6, Rule VIII, 2011 NLRC
in the course of the strike or lockout and shall authorize Rules and Procedures]
the Commission to enforce the same under pain of
immediate disciplinary action, including dismissal or
loss of employment status or payment by the locking-
out employer of backwages, damages and/or other
affirmative relief, even criminal prosecution against the
liable parties.
ORIGINAL JURISDICTION
a. Inter-union and intra-union disputes and other
related labor relations disputes.
b. All disputes, grievances or problems 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.
[Art. 232]
require it to submit reports regularly on prescribed The factual findings of the SOLE or the Regional
forms, and act on violation of any provisions of this Directors made in the exercise of their visitorial and
Title. enforcement powers are binding on Labor Arbiters and
the NLRC under the doctrine of res judicata [Norkis
Art. 289. Visitorial Power. –The Secretary of Labor Trading v. Buenavista, G.R. No. 182018, (2012)]
and Employment or his duly authorized
representative is hereby empowered to inquire into 2. Power to Suspend/Effects of
the financial activities of legitimate labor
organizations upon the filing of a complaint under
Termination
oath and duly supported by the written consent of at
least twenty percent (20%) of the total membership Art. 292 (b). Visitorial and Enforcement Power
of the labor organization concerned and to examine – The Secretary of the Department of Labor and
their books of accounts and other records to Employment may suspend the effects of the
determine compliance or non-compliance with the termination pending resolution of the dispute in the
law and to prosecute any violations of the law and event of a prima facie finding by the appropriate
the union constitution and by-laws: Provided, That official of the Department of Labor and
such inquiry or examination shall not be conducted Employment before whom such dispute is pending
during the sixty (60)-day freedom period nor within that the termination may cause a serious labor
the thirty (30) days immediately preceding the date dispute or is in the implementation of a mass lay-off.
of election of union officials.
The SOLE may suspend the effects of a termination
The visitorial and enforcement powers of the DOLE pending resolution of the dispute in the event of a prima
Regional Director to order and enforce compliance facie finding by the appropriate official of the DOLE
with labor standard laws can be exercised even where that the dispute is:
the individual claim exceeds P5,000.00. As the duly a. The termination may cause a serious labor dispute
authorized representative of respondent Secretary of (may or may not be a strike or a lockout)
Labor, and in the lawful exercise of the Secretary's b. The termination is in implementation of a mass lay-
visitorial and enforcement powers under Article 128 of off
the Labor Code, respondent Regional Director had
jurisdiction to issue compliance orders [Cirineo Bowling 3. Assumption of jurisdiction
Plaza, Inc. v. Sensing, G.R. No. 146572 (2005)].
When May the SOLE Assume Jurisdiction
If a complaint is brought before the DOLE to give Art. 278 (g). Strikes, Picketing and Lockouts. –
effect to the labor standards provisions of the Labor When in his opinion, there exist a labor dispute
Code or other labor legislation, and there is a finding by causing or likely to cause a strike or lockout in an
the DOLE that there is an existing employer-employee industry indispensable to the national interest, the
relationship, the DOLE exercises jurisdiction to the SOLE may assume jurisdiction over the dispute and
exclusion of the NLRC. The findings of the DOLE,
decide it or certify the same to the Commission for
however, may still be questioned through a petition
compulsory arbitration.
for certiorari under Rule 65 of the Rules of Court […]
The DOLE's labor inspection program can now
proceed without being sidetracked by unscrupulous Requisites for Assumption of Jurisdiction assume
employers who could render nugatory the "expanded jurisdiction provided that:
visitorial and enforcement power of the DOLE granted a. Both parties have requested the SOLE to assume
by RA 7730 . . . by the simple expedient of disputing jurisdiction; or
the employer-employee relationship [and] force the b. After a conference called by the Office of the
referral of the matter to the NLRC. [People's Broadcasting SOLE on the propriety of its issuance, motu proprio
Service v. Secretary of the Department of Labor and or upon a request or petition by either parties to
Employment, G.R. No. 179652 (2012 Resolution)] the labor dispute [Book V, IRR Rule XXII, sec. 15,
IRR as amended by D.O. No. 40-H-13 s 2013]
Par. 2, Art. 279 (a). Prohibited Activities. – No Art. 266. Injunction Prohibited. – No temporary
strike or lockout shall be declared after assumption or permanent injunction or restraining order in any
of jurisdiction by the President or the Minister or case involving or growing out of labor disputes shall
after certification or submission of the dispute to be issued by any court or other entity, except as
compulsory or voluntary arbitration or during the otherwise provided in Art.s [225] and [279] of this
pendency of cases involving the same grounds for Code.
the strike or lockout.
General Rule: Injunctions are prohibited.
Strike/lockout becomes illegal
A strike undertaken despite the issuance by the Exceptions: Those provided under Art. 225 (referring to
Secretary of Labor of an assumption or certification the Powers of the NLRC) in connection with Art.
order becomes a prohibited activity and thus, illegal, 279(on Prohibited Activities) under the Labor Code.
pursuant to Art. 279(a) of the Labor Code. [Allied
Banking v. NLRC, G.R. No. 116128 (1996)] Findings of fact by the NLRC for an Injunction to
issue
See notes on Liabilities of employer, union officers,
and ordinary workers under illegal strike. Art. 225 - (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 lockout shall be entitled to reinstatement with full
injunction in any case involving or growing out of a backwages. Any union officer who knowingly
labor dispute as defined in this Code shall be issued participates in an illegal strike and any worker or
except after hearing the testimony of witnesses, with union officer who knowingly participates in the
opportunity for cross-examination, in support of the commission of illegal acts during a strike may be
allegations of a complaint made under oath, and declared to have lost his employment status:
testimony in opposition thereto, if offered, and only Provided, That mere participation of a worker in a
after a finding of fact by the Commission, to the lawful strike shall not constitute sufficient ground
effect: for termination of his employment, even if a
replacement had been hired by the employer
(1) That prohibited or unlawful acts have been during such lawful strike.
threatened and will be committed unless restrained,
or have been committed and will be continued 2. No person shall obstruct, impede, or interfere with,
unless restrained, but no injunction or temporary by force, violence, coercion, threats or
restraining order shall be issued on account of any intimidation, any peaceful picketing by employees
threat, prohibited or unlawful act, except against the during any labor controversy or in the exercise of
person or persons, association or organization the right to self-organization or collective
making the threat or committing the prohibited or bargaining, or shall aid or abet such obstruction or
unlawful act or actually authorizing or ratifying the interference.
same after actual knowledge thereof; 3. No employer shall use or employ any strike-
breaker, nor shall any person be employed as a
(2) That substantial and irreparable injury to strike-breaker.
complainant's property will follow; 4. No public official or employee, including officers
and personnel of the New Armed Forces of the
(3) That as to each item of relief to be granted, Philippines or the Integrated National Police, or
greater injury will be inflicted upon complainant by armed person, shall bring in, introduce or escort in
the denial of relief than will be inflicted upon any manner, any individual who seeks to replace
defendants by the granting of relief; strikers in entering or leaving the premises of a
strike area, or work in place of the strikers. The
(4) That complainant has no adequate remedy at law; police force shall keep out of the picket lines unless
and actual violence or other criminal acts occur therein:
Provided, That nothing herein shall be interpreted
(5) That the public officers charged with the duty to to prevent any public officer from taking any
protect complainant's property are unable or measure necessary to maintain peace and order,
unwilling to furnish adequate protection. protect life and property, and/or enforce the law
and legal order.
Prohibited Activities [Art. 279] 5. No person engaged in picketing shall commit any
1. No labor organization or employer shall declare a act of violence, coercion or intimidation or
strike or lockout without first having bargained obstruct the free ingress to or egress from the
collectively in accordance with Title VII of this employer’s premises for lawful purposes, or
Book or without first having filed the notice obstruct public thoroughfares.
required in the preceding Art. or without the
necessary strike or lockout vote first having been “INNOCENT BYSTANDER RULE”
obtained and reported to the Ministry [DOLE].
Test to Determine if a Party is an “Innocent
No strike or lockout shall be declared after Bystander”
assumption of jurisdiction by the President or the An "innocent bystander," who seeks to enjoin a labor
Minister or after certification or submission of the strike, must satisfy the court that aside from the
dispute to compulsory or voluntary arbitration or grounds specified in Rule 58 of the Rules of Court, it is
during the pendency of cases involving the same entirely different from, without any connection
grounds for the strike or lockout. whatsoever to, either party to the dispute and, its
interests are totally foreign to the context thereof.
Any worker whose employment has been [MSF Tire and Rubber Inc. v. CA, G.R. No. 128632
terminated as a consequence of any unlawful (1999)]
The undertaking herein mentioned shall be DOLE Circular No. 1 Series of 2006. – …this
understood to constitute an agreement entered into administrative procedure for the voluntary
by the complainant and the surety upon which an settlement of labor disputes is hereby established:
order may be rendered in the same suit or
proceeding against said complainant and surety, 1. Either or both the employer and the certified
upon a hearing to assess damages, of which hearing, collective bargaining agent (or representative
complainant and surety shall have reasonable notice, of the employees where there is no certified
the said complainant and surety submitting bargaining agent) may voluntarily bring to the
themselves to the jurisdiction of the Commission for Office of the SOLE through a REQUEST
that purpose. But nothing herein contained shall FOR INTERVENTION, any potential or
deprive any party having a claim or cause of action ongoing dispute defined below.
under or upon such undertaking from electing to
same vein, if the specific issue brought before the bargaining deadlock, if the parties agree [Art. 275]
arbitrators referred to the date of regularization of the e. Wage distortions arising from application of any
employee, law and jurisprudence gave them enough wage orders in organized establishments [Art. 124]
leeway as well as adequate prerogative to determine the f. Unresolved grievances arising from the
entitlement of the employees to higher benefits in interpretation and implementation of the
accordance with the finding of regularization. [Manila productivity incentives program under RA 6971
Pavilion Hotel, etc. v. Henry Delada, G.R. No. 189947 [Book V, IRR Rule XIX. Sec. 4]
(2011)]
In general, the arbitrator [“VA”] is expected to decide
Other Labor Disputes those questions expressly stated and limited in the
submission agreement. However, since arbitration is
Art. 275. Jurisdiction Over Other Labor the final resort for the adjudication of disputes, the
Disputes. – The VA or panel of VAs, upon arbitrator can assume that he has the power to make a
agreement of the parties, shall also hear and decide final settlement. [...] [The VA has] plenary jurisdiction
all other labor disputes including ULP and and authority to interpret the [CBA] and to determine
bargaining deadlocks. the scope of his [or her] own authority. [...] Subject to
judicial review, this leeway of authority [and] adequate
Art. 274. Jurisdiction of Voluntary Arbitrators or prerogative is aimed at accomplishing the rationale of
Panel of Voluntary Arbitrators. – The the law on voluntary arbitration – speedy labor justice.
Commission, its Regional Offices and the Regional [Goya, Inc. v. Goya, Inc. Employees Union-FFW, G.R. No.
Directors of the DOLE shall not entertain disputes, 170054 (2013)]
grievances or matters under the exclusive and
original jurisdiction of the Voluntary Arbitrator or 2. Procedure
panel of Voluntary Arbitrators and shall immediately
dispose and refer the same to the grievance Art. 276. Procedures. — The Voluntary Arbitrator
machinery or Voluntary Arbitration provided in the or panel of Voluntary Arbitrators shall have the
Collective Bargaining Agreement. power to hold hearings, receive evidences and take
whatever action is necessary to resolve the issue or
Art. 224 (c). Jurisdiction of the Labor Arbiters issues subject of the dispute, including efforts to
and the Commission. – Cases arising from the effect a voluntary settlement between parties.
interpretation or implementation of CBAs and those
arising from the interpretation or enforcement of All parties to the dispute shall be entitled to attend
company personnel policies shall be disposed of by the arbitration proceedings. The attendance of any
the LA by referring the same to the grievance third party or the exclusion of any witness from the
machinery and VA as may be provided for in said proceedings shall be determined by the Voluntary
agreements. Arbitrator or panel of Voluntary Arbitrators.
Hearing may be adjourned for cause or upon
Option – Voluntary Arbitration agreement by the parties.
Art. 278 (h). Strikes, Picketing and Lockouts. – Unless the parties agree otherwise, it shall be
Before or at any stage of the compulsory arbitration mandatory for the Voluntary Arbitrator or panel of
process, the parties may opt to submit their dispute Voluntary Arbitrators to render an award or decision
to voluntary arbitration. within twenty (20) calendar days from the date of
submission of the dispute to voluntary arbitration.
Summary of Arbitrable Issues
a. Interpretation or implementation of the CBA [Art. The award or decision of the Voluntary Arbitrator
274] or panel of Voluntary Arbitrators shall contain the
b. interpretation or enforcement of company facts and the law on which it is based. It shall be final
personnel policies [Art. 274] and executor after ten (10) calendar days from
c. violations of a CBA which are not gross in receipt of the copy of the award or decision by the
character (gross being flagrant and/or malicious parties.
refusal to comply with the economic provisions of
[the CBA]) [Art. 274] Upon motion of any interested party, the Voluntary
d. all other labor disputes including ULP and Arbitrator or panel of Voluntary Arbitrators or the
Labor Arbiter in the region where the movant Voluntary Arbitrator's Fee
resides, in case of the absence or incapacity of the […] The fixing of the fee of the Voluntary Arbitrators
Voluntary Arbitrator or panel of Voluntary or panel of Voluntary Arbitrators, whether shouldered
Arbitrators, for any reason, may issue a writ of wholly by the parties or subsidized by the special
execution requiring either the sheriff of the voluntary arbitration fund, shall take into account the
Commission or regular courts or any public official following factors:
whom the parties may designate in the submission a. nature of the case;
agreement to execute the final decision, order or b. time consumed in hearing the case;
award. c. professional standing of the voluntary arbitrator;
d. capacity to pay of the parties;
[Rule XI, Book V, IRR] e. fees provided for in the Rules of Court [Art. 277]
Hearing 3. Remedies
All parties to the dispute shall be entitled to attend the
arbitration proceedings. The attendance of any third Motion for Reconsideration
party or the exclusion of any witness from the The absence of a categorical language in Art. [276] does
proceedings shall be determined by the VA or panel of not preclude the filing of a motion for reconsideration
Vas. Hearing may be adjourned for cause or upon of the VA’s decision within the 10-day period. [Teng v
agreement by the parties. Pahagac, G.R. 169704 (2010)]
Days to render an award/decision Appeal
Unless the parties agree otherwise, it shall be mandatory The decision of a Voluntary Arbitrator or panel of
for the VA or panel of VAs to render an award or Voluntary Arbitrators is appealable by ordinary appeal
decision within 20 calendar days from the date of under Rule 43 of the Rules of Civil Procedure directly
submission of the dispute to voluntary arbitration. to the Court of Appeals. [AMA Computer College-Santiago
City, Inc. v. Nacino, G.R. No. 162739 (2008)]
Form of award/decision
The award or decision of the VA or panel of VAs must But See: Guagua National Colleges v. CA, G.R. 188412,
state in clear, concise and definite terms the facts, the Aug. 28, 2018, the 10-day period under Article 276 of
law and/contract upon which it is based. the Labor Code refers to the filing of a motion for
reconsideration vis-à-vis the Voluntary Arbitrator's
Finality decision or award, while the 15 days is the period to file
It shall be final and executory after 10 calendar days petition for review under Rule 43 of the Rules of Court.
from the receipt of the copy of the award or decision
by the parties. (Note: The Guagua case of Aug. 2018 decision
however is beyond the cut – off date of June 30,
Execution of award/decision 2018 for the 2019 Bar Exam)
Upon motion of any interested party, the Voluntary
Arbitrator or panel of Voluntary Arbitrators or the
Labor Arbiter in the region where the movant resides,
in case of the absence or incapacity of the Voluntary
Arbitrator or panel of Voluntary Arbitrators, for any
reason, may issue a writ of execution requiring either
the sheriff of the Commission or regular courts or any
public official whom the parties may designate in the
submission agreement to execute the final decision,
order or award.
Costs
The parties to a Collective Bargaining Agreement shall
provide therein a proportionate sharing scheme on the
cost of the voluntary arbitration including the
Voluntary Arbitrator’s fee. […] [Art. 277]