LABOR RELATIONS LAW OUTLINE

(2017 EDITION)

(Suggested Reference: CHAN, Joselito G., Labor Code Annotated Vol. II Labor Relations and
Termination of Employment)

Note: The provisions of the Labor Code (PD 442, as amended) has been renumbered pursuant
to DOLE Dept. Advisory No. 1, series of 2015.

LABOR RELATIONS LAW- PRIVATE SECTOR

PART ONE- INTRODUCTORY MATERIALS

LABOR RELATIONS POLICY: FORMULATION AND HISTORICAL DEVELOPMENT

1987 Constitution

Art. II, Sec. 2, 10 and 18

SECTION 2. The Philippines renounces war as an instrument of national policy, adopts the
generally accepted principles of international law as part of the law of the land and adheres to
the policy of peace, equality, justice, freedom, cooperation, and amity with all nations.

SECTION 10. The State shall promote social justice in all phases of national development.

SECTION 18. The State affirms labor as a primary social economic force. It shall protect the
rights of workers and promote their welfare.

Art. III, Sec. 8

SECTION 8. The right of the people, including those employed in the public and private sectors,
to form unions, associations, or societies for purposes not contrary to law shall not be abridged.

Art. IX B, Sec. 2B

SECTION 2. (1)

(2) Appointments in the civil service shall be made only according to merit and fitness to be
determined, as far as practicable, and, except to positions which are policy-determining,
primarily confidential, or highly technical, by competitive examination.

Art. XII, Sec. 12

SECTION 12. The State shall promote the preferential use of Filipino labor, domestic materials
and locally produced goods, and adopt measures that help make them competitive.

Art. XIII, Sec. 3 and 14

SECTION 3. The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance with
law. They shall be entitled to security of tenure, humane conditions of work, and a living wage.
They shall also participate in policy and decision-making processes affecting their rights and
benefits as may be provided by law.

The State shall promote the principle of shared responsibility between workers and employers
and the preferential use of voluntary modes in settling disputes, including conciliation, and shall
enforce their mutual compliance therewith to foster industrial peace.

The State shall regulate the relations between workers and employers, recognizing the right of
labor to its just share in the fruits of production and the right of enterprises to reasonable
returns on investments, and to expansion and growth.

Women

SECTION 14. The State shall protect working women by providing safe and healthful working
conditions, taking into account their maternal functions, and such facilities and opportunities
that will enhance their welfare and enable them to realize their full potential in the service of
the nation.

LABOR CODE

Art. 3

Declaration of Basic Policy.

The State shall (afford, promote, ensure, regulate) afford protection to labor, promote full
employment, ensure equal work opportunities regardless of (SRC) sex, race or creed and
regulate the relations between workers and employers.

The State shall assure the rights of workers to: (SeCoSeJ)

Self-organization
Collective bargaining
Security of Tenure
Just and Humane Conditions of Work
Art. 218. Declaration of Policy in Labor Relations.

A. It is the basic policy of the State:

a. To promote and emphasize the primacy of free collective bargaining and negotiations,
including voluntary arbitration, mediation and conciliation as modes of settling labor or
industrial disputes.
b. To promote free trade unionism as an instrument for the enhancement of democracy
and the promotion of social justice and development.
c. To foster the free and voluntary organization of strong and united labor movement.
d. To promote the enlightenment of workers concerning their rights and obligations
e. To provide an adequate administrative machinery for the expeditious settlement of labor
or industrial disputes
f. To ensure a stable but dynamic and just industrial peace.
g. To ensure the participation of workers in decision and policy making process affecting
their rights, duties and welfare.

B. To encourage a truly democratic method of regulating the relations between the

employers and employees by means of agreements freely entered into through
collective bargaining, no court or administrative agency or official shall have the power
to set or fix wages, rates of pay, hours of work or other terms and conditions of
employment, except as otherwise provided under this code.

Art. 290. Tripartism, Tripartite Conferences, and Tripartite Industrial Peace Councils.

a. Tripartism in Labor Relations- declared as State Policy.

Toward this end, workers and employers shall, as far as practicable, be represented in
decision and policy-making bodies of the government.

b. The Secretary of Labor and Employment or his duly authorized representatives may
from time to time call a national, regional, or industrial tripartite conference of
representatives of government, workers and employers, and other interest groups as the
case may be, for the consideration and adoption of voluntary codes of principles
designed to promote industrial peace based on social justice or to align labor movement
relations with established priorities in economic and social development. In calling such
conference, the Secretary of Labor and Employment may consult with accredited
representatives of workers and employers.

c. A National Tripartite Industrial Peace Council (NTIPC) shall be established, headed by

the Secretary of Labor and Employment, with twenty (20) representatives each from the
labor and employers sectors to be designated by the President at regular intervals. For
this purpose, a sectoral nomination, selection, and recall process shall be established by
 the DOLE in consultation with the sectors observing the most representative
organization criteria of ILO Convention No. 144.

"Tripartite Industrial Peace Councils (TIPCs) at the regional or industry level shall also be
established with representatives from government, workers and employers to serve as a
continuing forum for tripartite advisement and consultation in aid of streamlining the
role of government, empowering workers and employers organizations, enhancing their
respective rights, attaining industrial peace, and improving productivity.1wphi1

"The TIPCs shall have the following functions:

"(1) Monitor the full implementation and compliance of concerned sectors with
the provisions of all tripartite instruments, including international conventions
and declarations, codes of conduct, and social accords;

"(2) Participate in national, regional or industry-specific tripartite conferences

which the President or the Secretary of Labor and Employment may call from
time to time;

"(3) Review existing labor, economic and social policies and evaluate local and
international developments affecting them;

"(4) Formulate, for submission to the President or to Congress, tripartite views,

recommendations and proposals on labor, economic, and social concerns,
including the presentation of tripartite positions on relevant bills pending in
Congress;

"(5) Advise the Secretary of Labor and Employment in the formulation or

implementation of policies and legislation affecting labor and employment;

"(6) Serve as a communication channel and a mechanism for undertaking joint

programs among government, workers, employers and their organizations
toward enhancing labor-management relations; and

"(7) Adopt its own program of activities and rules, consistent with development
objectives.

"All TIPCs shall be an integral part of the organizational structure of the NTIPC.

"The operations of all TIPCs shall be funded from the regular budget of the DOLE."

ASSOCIACION DE AGRICULTURES DE TALISAY-SILAY, INC., et. al. vs. TALISAY-

SILAY MILLING CO., INC., et. al

FACTS
The claim of Associacion De Agricultures De Talisay-Silay (PLANTERS), Inc., is that under R.A.
No. 809 (An Act to Regulate the Relations among persons engaged in the Sugar Industry) it is
provided that:

Section 1. In the absence of written milling agreements between the majority of planters
and the millers of sugarcane in any milling district in the Philippines, the unrefined sugar
produced in that district from the mining by any sugar central of the sugar-cane of any
sugar-cane planter or plantation owner, as well as all by products and derivatives
thereof, shall be divided between them as follows:

Sixty per centum for the planter, and forty per centum for the central in any milling
district the maximum actual production of which is not more than four hundred
thousand piculs: Provided, That the provisions of this section shall not apply to sugar
centrals with an actual production of less than one hundred fifty thousand piculs.

Sixty-two and one-half per centum for the planter, and thirty-seven and one-half per
centum for the central in any milling district the maximum actual production of which
exceeds four hundred thousand piculs but does not ex six hundred thousand piculs;

Sixty-five per centum for the planter, and thirty-five per centum for the central in any
milling district the maximum actual production of which exceeds six hundred thousand
piculs but does not exceed nine hundred thousand piculs;

Sixty-seven and one-half per centum for the planter, and thirty-two and one-half per
centum for the central in any mining district the maximum actual production of which
exceed nine hundred thousand piculs but does not exceed one million two hundred
thousand piculs;

Seventy per centum for the planter, and thirty per centum for the central in any milling
district the maximum actual production of which exceeds one on two hundred thousand
piculs.

As second and alternative cause of action, the PLANTERS averred that the Talisay-Silay Milling
Co., Inc. (CENTRAL) executed contracts with eight planters in which a higher percentage of
partition in the sugar and by-products and derivatives produced by the CENTRAL was given to
said eight planters than those given to the rest of the planters in the district, that is, 63% to
64%, the latter, whenever the production of the CENTRAL should be 1,200,000 piculs or over,
whereas all the others were given only 60%, and inasmuch as under the provisions of the
milling contracts between the PLANTERS and the CENTRAL since the crop year 1920-1921.

As third cause of action, the PLANTERS alleged that notwithstanding that the applicability of
R.A. No. 809 to the Talisay-Silay milling district had already been ruled upon by the Sugar
Quota Administrator, the CENTRAL still refused to abide by said ruling and to cause the release
to the PLANTERS of the corresponding amounts to which they are entitled.

CENTRAL filed its respective answers to the amended complaint and the supplements thereto.
In said answers, the CENTRAL alleged in substance the following defenses: (1) that Republic
Act 809 is invalid and unconstitutional; (2) that even if said Act were valid, it is not applicable to
the Talisay-Silay milling district because the majority of the planters had written milling
contracts with the CENTRAL at the time said Act went into effect, and that this continued during
the crop years 1951-52, 1952-53, 1953-54, and all the subsequent crop years in dispute; (3)
that the planters who entered into said milling contracts did so voluntarily and those voluntary
contracts may not be altered or modified without infringing the constitutional guarantee on
freedom of contracts and the non-impairment clause of the Constitution; and as to those
planters who entered into contracts after the effective date of the law, they should be deemed
as having voluntarily waived all the rights and benefits that might accrue to them under it; (4)
that the Act does not contain any expressed or implied provision invalidating the written milling
contract s entered into between the CENTRAL and the owners of adherent plantations before its
effective date; (5) that the Act sanctions and allows the entering into milling contracts after its
effective date, and as a matter of fact a large number of the PLANTERS are also planters in the
Hawaiian-Philippine milling district, adjoining the Talisay-Silay milling district, and they had
entered into milling contracts with the Hawaiian-Philippine Co. one year and four months after
the effectivity of the Act and in their milling contracts they had stipulations regarding sharing
participation without regard to the ratios fixed in the Act, and they have abided by those mining
contracts, and (6) that the arrangement, regarding the issuance of escrow quedans and the
deposit of the proceeds of the sale of the disputed increased participation of the planters was
agreed to and accepted by the CENTRAL from the Sugar Quota Administrator under duress,
because said Administrator would not allow the issuance of any warehouse receipt on the share
of the mill unless the CENTRAL agreed to the escrow quedans arrangement; (7) that neither are
the PLANTERS entitled to increased participation as claimed by them in their second and
alternative cause of action because they do not qualify as the PLANTERS contemplated in their
invoked twenty second (Vigesimo Segundo) paragraph of the original milling contract, since
what are referred to in that paragraph are only the PLANTERS "que se obliguen a
molercailadulce en la fabrics para la cosecha 1920-21 "; (8) that the provisions of Republic Act
809 relating to the increased sharing participation of the planters would affect and alter the
allocation of exportable sugar to the United States (export A sugar) among Philippine mills and
plantation owners, in violation of the Trade Relations Agreement between the Philip pines and
the United States, and this is precisely what is expected from the application of the law as
provided in the second paragraph of Section 8 of the very same Republic Act 809; and (9) that
the instant case is not a proper one for a class suit.

Issue
Whether or not Republic Act 809 is not unconstitutional for the reason that it is a social justice
and police power measure for the promotion of labor conditions in sugar plantations.

(Note: I used the phrase not unconstitutional because there is always a presumption that a
law is constitutional)

Held

Yes. Republic Act 809 is a Social Justice and Police Power Measure for the promotion of labor
conditions in sugar plantations, hence whatever rational degree of constraint it exerts on
freedom of contract and existing contractual obligations is constitutionally permissible.

Police Power

In Lutz vs. Araneta (G.R. No. L-2859, Dec. 22 1959), this Court recognized the propriety of
exercising police power when it is needed to do so in order that our sugar industry may be
stabilized, and to that end, it was held that the legislature could provide that the distribution of
benefits from the proceeds of sugar be readjusted among the components of the industry to
enable it to resist the added strain of the increase in taxes that it had to sustain then. With at
least equal persuasiveness must such reasoning obtain when the re-adjustment of the
distribution of proceeds is impelled by the need to render social justice among all the
participants in the industry, specially the laborers. The amicus curiae held that there is not
enough showing of unreasonableness in the legislation in question. Quite to the contrary, all the
provisions of the impugned act to be germane to the end being pursued.

Social Justice

But it is not police power alone that sustains the validity of the statutory provision in dispute.
Having in view its primary objective to promote the interests of labor, it can never be possible
that the State would be bereft of constitutional authority to enact legislations of its kind. Here,
in the Philippines, whenever any government measure designed for the advancement of the
working class is impugned on constitutional grounds and shadows of doubt are cast over the
scope of the State's prerogative in respect thereto, the imperious mandate of the social justice
Ideal consecrated in our fundamental laws, both the old and the new asserts its majesty, upon
the courts to accord utmost consideration to the spirit animating the act assailed, not just for
the sake of enforcing the explicit social justice provisions of the article on "Declaration of
Principles and State Policies", but more fundamentally, to serve the sacred cause of human
dignity, which is actually what lies at the core of those constitutional precepts as it is also the
decisive element always in the determination of any controversy between capital and labor.

Thus, Section 5 of Article II of the Constitution of 1935, under the aegis of which the law in
question was enacted, made it one of the declared principles to which the people committed
themselves that "the promotion of social justice to insure the well being and economic security
of all the people should be the concern of the State." More specifically in regard to labor, there
was also Section 6 of Article XIX, to the effect that "the State shall afford protection to labor ...
and shall regulate the relation between . . . labor and capital in industry and in agriculture. It is
difficult to conceive of any legislation more aptly rooted in the declared principle and the plain
injunction of the old Constitution just quoted than the Act under discussion which is a law to
regulate the relations between the centrals and the planters with the primordial objective of
protecting and promoting the interests of labor. In regard then to the arguments of the centrals
relative to due process and the sanctity of contractual obligations as well as the freedom of
contract, We hold that more cogently than in regard to the exertion of police power as
discussed above, the criterion for determining whether or not social justice has been over-
extended in any given case is nothing more than the economic viability or feasibility of the
proposed law in favor of labor, and certainly not the existence of exceptional circumstances. In
other words, as long as capital in industry or agriculture will not be fatally prejudiced to the
extent of incurring losses as a result of its enforcement, any legislation to improve labor
conditions would be valid, provided the assailed legislation is more or less demanded as a
measure to improve the situation in which the workers and laborers are actually found And in
the case at bar, there is not even a pretension that the finances of the centrals would be
anywhere in the red as a result of the enforcement of Republic Act 809.

In the light of the foregoing considerations, the court do not find the position of the CENTRAL
that Section I of Republic Act 809 interferes unconstitutionally with existing contracts and the
freedom of all the parties concerned in entering into new ones to be sufficiently persuasive.

If the court declare the Act unconstitutional upon the ground that it is unwarranted invasion of
the freedom of contract as between the millers and the planters, the deplorable condition of the
laborers in the sugar farms would remain as it was before its enactment. On the other hand, if
the court sustain its validity but at the same time apply it literally and sanction a construction
thereof that would enable the centrals and their planters to enter into agreements, under which
the latter would have to be given increased participation without any obligation to share the
same with their laborers, the Court would be a party to a conspiracy to virtually defraud labor of
the benefits, the grant of which is precisely its sole redeeming feature to save it from
unconstitutionality. For it is clear for anyone to see that without the Act, under the conditions
prevailing in the industry, the planters would have no means of persuading, much less
compelling, the centrals or millers to give them any increase in their respective shares,
whereas, with this law, faced with the prospect of being forced to grant the planters their
proportion of sharing prescribed by it, if no written contracts were to be signed by them with
the majority of the planters, naturally, the centrals would readily agree to give the planters the
increase they want, which could be less than that stipulated in the Act and yet be exactly
what the planters would get under it if the majority of them were not to have written contracts
with the central. In which eventuality, and should we uphold the proposed strictly literal
construction of the Act, the laborers would be left holding the proverbial empty bag. In that
way, the interests of the capitalist components of the industry, the millers and planters, would
be served by the compulsive effect of the law but labor would not be assured of receiving even
the crumbs, when the truth is that the legislation would have no reason for being as a
constitutional and enforceable statute if it did not include mandatory provisions designed to lift
them from misery. The Court emphatically refuses to have anything to do with such an
unconscionable posture vis-a-vis the fate of labor, which pose, after all We must assume could
not have been in the contemplation of the legislature that precisely inserted into it its pro-labor
element in order to bring it within the ambit of the social justice and police power protection of
the fundamental law. We condemn such a view as definitely anti-social and as a gross injustice
to labor, which no respectable legislature composed of duly elected representatives of the
people may ever be deemed as capable of dirtying the sacred statute books with.

Doctrine

As long as capital in industry or agriculture will not be fatally prejudiced to the extent of
incurring losses as a result of its enforcement, any legislation to improve labor conditions would
be valid, provided the assailed legislation is more or less demanded as a measure to improve
the situation in which the workers and laborers are actually found And in the case at bar, there
is not even a pretension that the finances of the centrals would be anywhere in the red as a
result of the enforcement of Republic Act 809.

PHILIPPINE AIR LINES, INC., vs. PHILIPPINE AIR LINES EMPLOYEES ASSOCIATION
(PALEA), PHILIPPINE AIR LINES SUPERVISORS ASSOCIATION (PALSA) and COURT
OF INDUSTRIAL RELATIONS

FACTS:
What is sought is a reversal of an order of respondent Court reinstating one Fidel
Gotangco dismissed by his employer, petitioner Philippine Air Lines, for having been found
guilty of the breach of trust and violation of the rules and regulations of the company.

Fidel Gotangco was confiscated with a piece of lead material from his person at one of
the gates of the PAL Airfield compound and a signed statement by him, taken at an
investigation, wherein he admitted his apprehension by a company security guard with a lead
material he intended to take home for his personal use. He was held guilty of breach of trust
and violation of the rules and regulations of his employer. But respondent sees authority to
dismiss him on the basis of such guilt. It is believed, however, that in this particular case
dismissal is too severe a penalty to impose on Fidel Gotangco for trying to slip out a lead
material belonging to respondent. Because (1) it is his first time to commit the charge in
question for the duration of his 17 years of service with respondent; (2) the cost of said
material, considering its size, is negligible (8" x 10" x 1/2"); (3) respondent did not lose
anything after all as the lead material was retrieved in time; (4) the ignominy and mental
torture undergone by Gotangco is practically punishment in itself; and (5) he has been under
preventive suspension to date.

Petitioner was therefore ordered "to reinstate Fidel Gotangco immediately, without
backwages." But the petitioner, as indicated by his appeal, appears to be unsatisfied. It insists
on dismissal.

ISSUE: W/N the State has the duty to assure workers security of tenure

RULING:
YES. The futility of this appeal becomes even more apparent considering the express
provision in the Constitution already noted, requiring the State to assure workers "security of
tenure."17 It was not that specific in the 1935 Charter. The mandate was limited to the State
affording "protection to labor, especially to working women and minors, .... "18 If by virtue of
the above, it would not be legally justifiable to reverse the order of reinstatement, it becomes
even more readily apparent that such a conclusion is even more unwarranted now. To reach it
would be to show lack of fealty to a constitutional command.

National Service Corporation vs NLRC

FACTS:

Eugenia C. Credo was an employee of the National Service Corporation (NASECO), a

domestic corporation which provided security guards as well as messengerial, janitorial and
other similar manpower services to the Philippine National Bank (PNB) and its agencies. She
was first employed with NASECO as a lady guard.

In 1983, she was administratively charged by the Company, stemming from her non-
compliance with a memorandum. Thus, placed her on "Forced Leave" status for 15 days.
Subsequently, she filed a complaint, with the Arbitration Branch, Manila, against the Company
for placing her on forced leave, without due process.

While she was on forced leave, the Companys Committee on Personnel Affairs
deliberated and evaluated a number of past acts of misconduct or infractions attributed to her,
in consequence, the committee recommended her termination, with forfeiture of benefits.
Consequently, she filed a supplemental complaint for illegal dismissal, alleging the absence of
just or authorized cause for her dismissal and lack of opportunity to be heard.
 The labor arbiter dismissed her complaint but directed the Company to pay her
separation pay equivalent to one half month's pay for every year of service.

On appeal, NLRC directed the Company to reinstate the employee to her former
position, or substantially equivalent position, with six (6) months' back wages and without loss
of seniority rights and other privileges appertaining thereto, on the ground that: 1) the
company violated the requirements mandated by law on termination.

Hence, this petition.

ISSUE: Whether or not the employee be reinstated on the ground that the company violated
the requirements mandated by law on termination?

HELD: YES
As guidelines for employers in the exercise of their power to dismiss employees for just causes,
the law provides that:
Section 2. Notice of dismissal. Any employer who seeks to dismiss a worker
shall furnish him a written notice stating the particular acts or omission
constituting the grounds for his dismissal.
xxx xxx xxx
Section 5. Answer and Hearing. The worker may answer the allegations stated
against him in the notice of dismissal within a reasonable period from receipt of
such notice. The employer shall afford the worker ample opportunity to be heard
and to defend himself with the assistance of his representative, if he so desires.
Section 6. Decision to dismiss. The employer shall immediately notify a worker
in writing of a decision to dismiss him stating clearly the reasons therefor.

These guidelines mandate that the employer furnish an employee sought to be

dismissed two (2) written notices of dismissal before a termination of employment can be
legally effected. These are the notice which apprises the employee of the particular acts or
omissions for which his dismissal is sought and the subsequent notice which informs the
employee of the employer's decision to dismiss him.

Likewise, a reading of the guidelines in consonance with the express provisions of law
on protection to labor (which encompasses the right to security of tenure) and the
broader dictates of procedural due process necessarily mandate that notice of the employer's
decision to dismiss an employee, with reasons therefor, can only be issued after the employer
has afforded the employee concerned ample opportunity to be heard and to defend himself.

In the case at bar, the Company did not comply with these guidelines in effecting the
employees dismissal. Although she was apprised and "given the chance to explain her side" of
the charges filed against her, this chance was given so perfunctorily, thus rendering illusory her
right to security of tenure. And she was not given ample opportunity to be heard and to defend
herself is evident from the fact that the compliance with the injunction to apprise her of the
charges filed against her and to afford her a chance to prepare for her defense was dispensed
in only a day. This is not effective compliance with the legal requirements aforementioned.

WHEREFORE, in view of the foregoing, the challenged decision of the NLRC is

AFFIRMED.

PLDT VS NLRC

Facts:
Marilyn Abucay, a traffic operator of the Philippine Long Distance Telephone Company,
was accused by two complainants of having demanded and received from them the total
amount of P3,800.00 in consideration of her promise to facilitate approval of their applications
for telephone installation. She was found guilty as charged and accordingly separated from the
service. She went to the Ministry of Labor and Employment claiming she had been illegally
removed. It was dismissed but ordered to pay her one month pay for every year of services for
financial assistance. Both appealed to NLRC but it upheld the decision. PLDT contended that the
employee dismissed for a cause is not entitle to reinstatement or backwages and is not allowed
for any relief. However the NLRC claimed that she was sufficiently punished with her dismissal.
It is not a reward but merely to help her for loss based on equity and compassion.

Issues: Whether or not the separation pay is proper on the ground that is based on social
justice.

Ruling:
No. The reason is that our Constitution is replete with positive commands for the
promotion of social justice, and particularly the protection of the rights of the workers. Article
XIII expressly recognizes the vital role of labor, hand in hand with management, in the
advancement of the national economy and the welfare of the people in general. We hold that
henceforth separation pay shall be allowed as a measure of social justice only in those instances
where the employee is validly dismissed for causes other than serious misconduct or those
reflecting on his moral character. Where the reason for the valid dismissal is, for example,
habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations
with a fellow worker, the employer may not be required to give the dismissed employee
separation pay, or financial assistance, or whatever other name it is called, on the ground of
social justice.
The policy of social justice is not intended to countenance wrongdoing simply because it
is committed by the underprivileged. At best it may mitigate the penalty but it certainly will not
condone the offense. Compassion for the poor is an imperative of every humane society but
only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be
permitted to be refuge of scoundrels any more than can equity be an impediment to the
punishment of the guilty. Those who invoke social justice may do so only if their hands are
clean and their motives blameless and not simply because they happen to be poor. This great
policy of our Constitution is not meant for the protection of those who have proved they are not
worthy of it, like the workers who have tainted the cause of labor with the blemishes of their
own character.
The fact that she has worked with the PLDT for more than a decade, if it is to be
considered at all, should be taken against her as it reflects a regrettable lack of loyalty that she
should have strengthened instead of betraying during all of her 10 years of service with the
company. If regarded as a justification for moderating the penalty of dismissal, it will actually
become a prize for disloyalty, perverting the meaning of social justice and undermining the
efforts of labor to cleanse its ranks of all undesirables.

A. Statutory Source and Interpretation

B.F. GOODRICH PHILIPPINES, INC.,vs. B.F. GOODRICH (MARIKINA FACTORY) CONFIDENTIAL &
SALARIED EMPLOYEES UNION-NATU, B.F. GOODRICH (MAKATI OFFICE) CONFIDENTIAL &
SALARIED EMPLOYEES UNION-NATU, and COURT OF INDUSTRIAL RELATIONS

Facts:
President of B.F. Goodrich (Makati Office) Confidential and Salaried Employees Union-NATU,
sent a letter to the petitioner, seeking recognition as the bargaining agent of such employees so
that thereafter there could be negotiations for a collective contract. On the same date, President
of B.F. Goodrich (Marikina Factory) Confidential and Salaried Employees Union-NATU and Vice-
President, NATU, sent a letter to the petitioner, of a similar tenor.

Petitioner, (The Company) countered by filing two petitions for certification election with
respondent Court of Industrial Relations. Then, two strike notices from respondents, filed with the
Bureau of Labor Relations, demanding union recognition. It was not until April 13, 1971, that
respondent Court commenced the hearings of the petitions for certification election. But, It was
then alleged that on two days in April 19 and 20, 1971, there was a strike staged by those
affiliated with private respondents, to force recognition of their unions. Subsequently, after
preliminary investigation first had, on a finding of a prima facie case of illegal strike and unfair
labor practice committed by the members of the two unions.

The petitioner contested that if the case will prosper and the strike staged by the unions during
the pendency of the case will be declared illegal and the members cited therein found guilty of
unlabor practice and be disqualified to vote in a certification election. On the other hand, the
unions contested that the holding if the certification proceeding in abeyance until the final
 judgement of the ULP case will be denial of their statutory right which is the employees being left
without collective bargaining representative.

ISSUE: Whether or not the holding of the suspension in abeyance until final judgement of the case will
cause the denial of the statutory right of the members of the union.

HELD:
Yes, The Court ruled that It is merely to stress that such a suit should not be allowed to lend itself
as a means, whether intended or not, to prevent a truly free expression of the will of the labor group as to
the organization that will represent it. It is not only the loss of time involved, in itself not likely to enhance
the prospect of respondent-unions, but also the fear engendered in the mind of an ordinary employee that
management has many weapons in its arsenal to bring the full force of its undeniable power against those
of its employees dissatisfied with things as they are. There is no valid reason then for the postponement
sought. The law clearly contemplates all the employees, not only some of them. As much as possible
then, there is to be no unwarranted reduction in the number of those taking part in a certification election,
even under the guise that in the meanwhile, which may take some time, some of those who are
employees could possibly lose such status, by virtue of a pending unfair labor practice case.

The time that might elapse is hard to predict, as the matter may eventually reach this Tribunal. In
the meanwhile, there is no opportunity for free choice on the part of the employees as to which labor
organization shall be their exclusive bargaining representative. The force of such an objection could be
blunted if after a final decision to the effect that the employees complained of were engaged in illegal
strike, they would automatically lose their jobs. Such is not the law, however. It does not necessarily
follow that whoever might have participated in a strike thus proscribed has thereby forfeited the right to
employment.

Caltex Filipino Managers and Supervisors Association vs

Court of Industrial Relations, Caltex ( Philippines ) , INC., W.E. Menefee and B. F. Edwards

Facts:
The Caltex Filipino Managers and Supervisors Association is a labor organization of Filipino
managers supervisors in Caltex (Philippines) , Inc., respondent Company in this proceeding. The
Association sent a set of proposals to the Company wherein one of the demands was the recognition of
the Association as the duly authorized bargaining agency for managers and supervisors in the company.
To this the Company countered stating that a distinction exists between representatives of management
and individuals employed as supervisors and that is Companys belief that managerial employees are not
qualified for membership in a labor organization; hence it is digested that the Association institute a
certification proceeding so as to remove any question with regard to the position titles that should be
included in the bargaining unit. The Association felt disinclined to follow the suggestion of the company
and so on the Company initiated a certification proceeding.

On March 8, 1965 the Association filed a notice to strike giving reasons which are refusal to
bargain in good faith and to act on demands. During the hearing of the certification proceedings Judge
Tabigne cautioned the parties to maintain the status quo; he specifically advised the employees not to go
on strike, making it clear , however, that in the presence of unfair labor practices they could go on strike
even without any notice.
 On the basis of the strike notice, after the efforts exerted by the Bureau of Labor Relations to
settle the differences between the parties failed. Then through the Urgent Petition , the Company filed
cases. Such urgent petition was frontally met by the Association with a motion to dismiss questioning the
jurisdiction of the industrial court. The motion to dismiss was opposed by the Company, the trial court
denied the same. Not satisfied with the order, the Association moved for its reconsideration before
respondent court en banc.

Because of the settlement between the parties of some of their disputes, the Association filed
with respondent court a manifestation ( to which was attached a copy of the return-to-work agreement
signed by the parties ), to the effect the issues had become moot and academic. Considering the
interrelation of the issues involved in the two cases and by agreement of the parties, the two cases were
heard jointly.

Issue:
Whether or not the strike staged by the Association is illegal.

Held:
The court view the return-to-work agreement of May 30, 1965 as in the nature of a partial
compromise between the parties and, more important a labor; consequently in the latter aspect the same
must yield to the common good ( Art. 1700, Civil Code of the Philippines ) and in case of doubt.. shall
be construed in favor of the safety and decent living for the laborer ( Article 1702 ). The court said when
the company unqualifiedly bound itself in the return- to-work agreement that all employees will be taken
back with the same employee status prior to April 22, 1965 , the company thereby made manifest its
intention and conformity not to proceed with case no. 1484-MC relating the illegality of the strike incident.
For while it is true that there is a reservation in the return-to-work agreement as follows:

The parties agree that all court cases now pending shall continue, including CIR case no. 1484-
MC.

The court said it should be construed the same bearing in mind the conduct and intention of the
parties. The failure to mention case no. 1484-MC (1) which is the illegality of the strike while specifically
mentioning case no. 1484-MC which is incident of the certification election proceedings, the courts
opinion , bars the company from proceeding with the former especially in the light of the additional
specific stipulation that the strikers would be taken back with the same employee status prior to the strike
on April 22, 1965.
The court said that the Association resorted to means beyond the pale of the law in the
prosecution of the strike. The Association filed its notice to strike on March 8, 1965, giving reasons
therefor any one of which is valid ground for a strike. Besides, one of the important rights recognized by
the Magna Carta of Labor is the right to self-organization and the court do not hesitate to say that is the
cornerstone of the monumental piece of labor legislation.

Wherefore, respondent courts resolution en banc dated May 16, 1969, together with the decision
dated February 26, 1969, is revered.

In case no. 1484 MC (1), the court declares the strike of the Caltex Filipino Managers and
Supervisors Association as legal in all respects and consequently, the forfeit of the employee status of
J.J. Mapa and Dominador Mangalino to their former positions without loss of seniority and privileges, with
backwages from the time of dismissal on July 1, 1969.
 The court finds also in case no. 4344- ULP , the company of B.F. Edwards and W. E. Menefee
guilty of unfair labor practices and they are therefore ordered to cease and desist from the same. The
company is directed to pay backwages to the striking employees from April 22, 1965 to May 30, 1965.

B. Definitions

Labor Code, Art. 219 (before Art. 212)

Art. 212. Definitions.

1. "Commission" means the National Labor Relations Commission or any of its divisions, as the
case may be, as provided under this Code.

2. "Bureau" means the Bureau of Labor Relations and/or the Labor Relations Divisions in the
regional offices established under Presidential Decree No. 1, in the Department of Labor.

3. "Board" means the National Conciliation and Mediation Board established under Executive
Order No. 126.

4. "Council" means the Tripartite Voluntary Arbitration Advisory Council established under
Executive Order No. 126, as amended.

5. "Employer" includes any person acting in the interest of an employer, directly or indirectly.
The term shall not include any labor organization or any of its officers or agents except
when acting as employer.

6. "Employee" includes any person in the employ of an employer. The term shall not be limited
to the employees of a particular employer, unless the Code so explicitly states. It shall
include any individual whose work has ceased as a result of or in connection with any
current labor dispute or because of any unfair labor practice if he has not obtained any
other substantially equivalent and regular employment.

7. "Labor organization" means any union or association of employees which exists in whole or
in part for the purpose of collective bargaining or of dealing with employers concerning
terms and conditions of employment.

8. "Legitimate labor organization" means any labor organization duly registered with the
Department of Labor and Employment, and includes any branch or local thereof.

9. "Company union" means any labor organization whose formation, function or administration
has been assisted by any act defined as unfair labor practice by this Code.

10. "Bargaining representative" means a legitimate labor organization whether or not employed
by the employer.
11. "Unfair labor practice" means any unfair labor practice as expressly defined by the Code.

12. "Labor dispute" includes any controversy or matter concerning terms and conditions of
employment or the association or representation of persons in negotiating, fixing,
maintaining, changing or arranging the terms and conditions of employment, regardless of
whether the disputants stand in the proximate relation of employer and employee.

13. "Managerial employee" is one who is vested with the powers or prerogatives to lay down
and execute management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees. Supervisory employees are those who, in the
interest of the employer, effectively recommend such managerial actions if the exercise of
such authority is not merely routinary or clerical in nature but requires the use of
independent judgment. All employees not falling within any of the above definitions are
considered rank-and-file employees for purposes of this Book.

14. "Voluntary Arbitrator" means any person accredited by the Board as such or any person
named or designated in the Collective Bargaining Agreement by the parties to act as their
Voluntary Arbitrator, or one chosen with or without the assistance of the National
Conciliation and Mediation Board, pursuant to a selection procedure agreed upon in the
Collective Bargaining Agreement, or any official that may be authorized by the Secretary of
Labor and Employment to act as Voluntary Arbitrator upon the written request and
agreement of the parties to a labor dispute.

15. "Strike" means any temporary stoppage of work by the concerted action of employees as a
result of an industrial or labor dispute.

16. "Lockout" means any temporary refusal of an employer to furnish work as a result of an
industrial or labor dispute.

17. "Internal union dispute" includes all disputes or grievances arising from any violation of or
disagreement over any provision of the constitution and by laws of a union, including any
violation of the rights and conditions of union membership provided for in this Code.

18. "Strike-breaker" means any person who obstructs, impedes, or interferes with by force,
violence, coercion, threats, or intimidation any peaceful picketing affecting wages, hours or
conditions of work or in the exercise of the right of self-organization or collective bargaining.

19. "Strike area" means the establishment, warehouses, depots, plants or offices, including the
sites or premises used as runaway shops, of the employer struck against, as well as the
immediate vicinity actually used by picketing strikers in moving to and fro before all points
of entrance to and exit from said establishment. (As amended by Section 4, Republic Act
No. 6715, March 21, 1989)
BVRIS 1, (Book V, Rule 1, Sec. 1 of the Omnibus Rules Implementing the Labor Code)
 1. Employer and Employee
Art. 219 [212]. (e), (f)

"Employer" includes any person acting in the interest of an employer, directly or indirectly.
The term shall not include any labor organization or any of its officers or agents except
when acting as employer.

"Employee" includes any person in the employ of an employer. The term shall not be limited to
the employees of a particular employer, unless the Code so explicitly states. It shall include any
individual whose work has ceased as a result of or in connection with any current labor dispute
or because of any unfair labor practice if he has not obtained any other substantially equivalent
and regular employment.

FEATI UNIVERSITY vs. BAUTISTA

FACTS:
The President of the Feati University Club wrote a letter to the President of the University,
informing her of the organization of the Faculty Club into a registered labor union. The union is composed
of members of the faculty and/or instructors of the university. Another letter was sent containing 26
demands in connection with the employment of its members and requesting an answer within 10 days.
The President answered, however, requesting for an extension of 30 days to study thoroughly the
demands. The Counsel of the University wrote a letter to the President of the Faculty Club demanding
proof of its majority status and designation as a bargaining representative. The Faculty Club rejected the
request and on the same day filed a notice of strike with the Bureau of Labor, alleging that the University
refused to bargain collectively. Then, the Faculty Club declared a strike and established picket lines that
resulted to the disruption of classes. Since no satisfactory agreement was arrived at despite the efoorts of
the Department of Labor, the President of the Philippines certified the dispute to CIR, pursuant to RA No.
875.

The University, however, contended that CIR has no jurisdiction upon the ground that Republic
Act No. 875 is not applicable to the University because it is an educational institution and not an industrial
establishment and hence not an "employer" in contemplation of RA No. 875; and neither is Republic Act
No. 875 applicable to the members of the Faculty Club because the latter are independent contractors
and, therefore, not employees within the purview of the said Act.

ISSUES:
(1) WON Feati University is an employer
(2) WON the members of Faculty Club are employees

RULING:

a) YES. Under the Act. Section 2(c) of the Act, it is provided that an employer includes any person
acting in the interest of an employer, directly or indirectly, but shall not include any labor
organization or any one acting in the capacity or agent of such labor organization. In using the
word "includes" and not "means", Congress did not intend to give a complete definition of
"employer", but rather that such definition should be complementary to what is commonly
understood as employer. Congress intended the term to be understood in a broad meaning
because (1) the statutory definition includes not only "a principal employer but also a person
acting in the interest of the employer"; and (2) the Act itself specifically enumerated those who
are not included in the term "employer namely: (a) a labor organization, (b) anyone acting in the
capacity of officer or agent of such labor organization, and (3) the Government and any political
subdivision or instrumentality. Among these statutory exemptions, educational institutions are not
included; hence, they can be included in the term "employer". However, those educational
institutions that are not operated for profit are not within the purview of Republic Act No. 875.
Since the University admits that it has declared dividends and that it is not strictly for educational
purposes, the Act is applicable.

b) YES. The principal consideration in determining whether a workman is an employee or an

independent contractor is the right to control the manner of doing the work, and it is not the actual
exercise of the right by interfering with the work, but the right to control, which constitutes the test. It is
shown that university (1) controls the work of the members of its faculty, (2) prescribes the courses or
subjects that professors teach, (3) when and where to teach, (4) their work is characterized by
regularity and continuity for a fixed duration (5) compensated for their services by wages and salaries,
rather than by profits (6) cannot substitute others to do the work without the consent of the university,
and (7) and can be laid off if their work is found not satisfactory. All these indicate that the university
has control over their work; and professors are, therefore, employees. Thus, it follows that they have
a right to unionize in accordance with the provisions of Section 3 of (Republic Act No. 875)
 2. Labor Organization- Legitimate Labor Organization
Art. 219 [212] (g), (h)

"Labor organization" means any union or association of employees which exists in whole or
in part for the purpose of collective bargaining or of dealing with employers concerning
terms and conditions of employment.

"Legitimate labor organization" means any labor organization duly registered with the
Department of Labor and Employment, and includes any branch or local thereof.

Airline Pilots Association of the Philippines, et. al., vs. CIR

FACTS
A labor dispute arose between the members of ALPAP, a labor union, and PAL, the
employer of the said members, sometime in October 1970. In the membership meeting held by
the union, a majority of its members adopted a resolution amending the unions constitution
and by-laws which provides that any active member who shall be forced to retire or resign or
otherwise terminated for union activities has the option to either remain as an active member in
good standing or resign in wiring his active membership with the union. Although a no-work
stoppage was issued by the CIR, a substantial majority of the union members filed letters of
retirement and resignation. Moreover, Gaston, a resigned pilot of the employer and a member
of the union, was elected as the president by those who were already resigned/retired while
Gomez was elected as the president by those who remained with their employer.

Then, a petition with the CIR was filed by Gomez praying for the certification as the sole
and exclusive bargaining representative of all pilots now under employment by PAL and are on
active flight or operational assignments. This was opposed by Gaston on the ground that a
certification proceeding in CIR is not the proper forum to determine the lawful president of a
legitimate labor organization. A decision was rendered by CIR certifying the union composed of
pilots employed by PAL with Gomez as its president as the sole and exclusive bargaining
representatives since pilots belonging to Gaston group had already resigned or retired and no
longer members of the union.

ISSUE/S
W/N the membership with the union is exclusive only to the employees of a certain
employer.
W/N the authorization given to Gomez to exclusively take over the office, funds, and
name of the union was is valid.

HELD
 1. NO, the membership with the union is not exclusive to the employees of a certain
employer.

Labor organization, as defined in Sec. 2(e) of R.A. 875 otherwise known as an Act to
Promote Industrial Peace and For Other Purposes, is any union or association of employees
which exist, in whole or in part, for the purpose of the collective bargaining or dealing with
employers concerning terms and conditions of employment. The emphasis of Industrial Peace
Act is clearly on the purposes for which a union or association of employees established rather
than that membership therein should be limited only to the employees of a particular employer.
In addition, under Section 2(h) of R.A 875, a representative is defined as a legitimate labor
organization or any officer or agent of such organization, whether or not employed by the
employer or employee whom he represents.

Furthermore, nothing in the constitution and by-laws of the union which indubitably
restricts membership therein to PAL pilots alone. Although according to the union, there has
never been an instance when a non-PAL pilot became a member of ALPAP. The complete lack
of any such precondition for ALPAP membership cannot but be interpreted as an unmistakable
authority for the association to accept pilots into its fold though they may not be under PAL's
employ. Hence, non-employees can represent and be a member of a union of employees of a
certain employer.

2. NO, the authorization given to Gomez is not valid. The Court held that Gomezs
election cannot be said to be valid and binding since he was elected only by 45 members as
compared to Gaston who was elected by 180 out of 270 members. However, the Gomez group
cannot be said as having no right over the office, funds, and name of the union in which they
are also members.

Moreover, a segment of the union can be authorized by its duly elected officers to
bargain collectively with a certain employer on matters affecting the terms and conditions of
their particular employment. In this case, Gaston had extended recognition to Gomez to enter
and conclude collective bargaining contracts with PAL. Since Gomez was given this authority,
Gaston cannot disallow the former from the certain use of the office, funds, and name of the
union which would enable Gomez to bargain collectively with the employer. Also, in the
eventuality that the pilots presently employed by PAL and who subscribe to the leadership of
Ben Hur Gomez should consider it to their better interest to have their own separate office,
name and union funds, nothing can prevent them from setting up a separate labor union. In
that eventuality, whatever vested rights, interest or participation they may have in the assets,
including cash funds, of ALPAP as a result of their membership therein should properly be
liquidated in favor of such withdrawing members of the association.
 Lopez Sugar Corp. vs Secretary of Labor

Facts:
On 7/26/1989 National Congress of Unions in the Sugar Industry of the Philippines-TUCP
(NACUSIP-TUCP) filed with the Department of Labor and Employment (DOLE) a petition for
direct certification or for certification election to determine the sole and exclusive collective
bargaining representative of the supervisory employees of herein petitioner, Lopez Sugar
Corporation (LSC). NACUSIP-TUCP averred that it was a legitimate national labor
organization; that LSC was employing 55 supervisory employees, the majority of whom were
members of the union; that no other labor organization was claiming membership over the
supervisory employees; that there was no existing collective bargaining agreement covering
said employees; and that there was no legal impediment either to a direct certification of
NACUSIP-TUCP or to the holding of a certification election. -LSC contended it. NACUSIP-TUCP
submitted Charter Certificate No. 003-89, dated 20 July 1989, of the NACUSIP-TUCP Lopez
Sugar Central Supervisory Chapter.

Issue: W/N NACUSIP-TUCP is a legitimate labor organization

Held:
No. NACUSIP-TUCP is not a legitimate labor organization. A local or chapter therefore
becomes a legitimate labor organization only upon submission of the following to the BLR: 1) A
charter certificate, within 30 days from its issuance by the labor federation or national union,
and 2) The constitution and by-laws, a statement on the set of officers, and the books of
accounts all of which are certified under oath by the secretary or treasurer, as the case may be,
of such local or chapter, and attested to by its president. Absent compliance with these
mandatory requirements, the local or chapter does not become legitimate labor organization.
The only document extant on record to establish the legitimacy of the NACUSIP-TUCP Lopez
Sugar Central Supervisory Chapter is a charter certificate and nothing else.

3. Labor Dispute
Art. 219 [212] (l)

"Labor dispute" includes any controversy or matter concerning terms and conditions of
employment or the association or representation of persons in negotiating, fixing, maintaining,
changing or arranging the terms and conditions of employment, regardless of whether the
disputants stand in the proximate relation of employer and employee.

Definition:

San Miguel Corporation Employees Union vs. Bersamira

FACTS
SMC entered into contracts for merchandising services with Lipercon and D'Rite. In said
contracts, it was expressly understood and agreed that the workers employed by the
contractors were to be paid by the latter and that none of them were to be deemed employees
or agents of SMC. There was to be no employer-employee relation between the contractors
and/or its workers, on the one hand, and SMC on the other. SMC Employees Union is the duly
authorized representative of the monthly paid R&F employees of SMC. In a letter, the Union
advised SMC that some Lipercon and D'Rite workers had signed up for union membership and
sought the regularization of their employment with SMC.

ISSUE
W/N there is a labor dispute between SMC and the Union.

HELD
YES. A "labor dispute" as defined in Article 212 (1) of the Labor Code includes "any
controversy or matter concerning terms and conditions of employment or the association or
representation of persons in negotiating, fixing, maintaining, changing, or arranging the terms
and conditions of employment, regardless of whether the disputants stand in the proximate
relation of employer and employee."

While it is SanMig's submission that no employer-employee relationship exists between

itself, on the one hand, and the contractual workers of Lipercon and D'Rite on the other, a labor
dispute can nevertheless exist "regardless of whether the disputants stand in the proximate
relationship of employer and employee" (Article 212 [1], Labor Code, supra) provided the
controversy concerns, among others, the terms and conditions of employment or a "change" or
"arrangement" thereof.

At bottom, what the Union seeks is to regularize the status of the employees. This
matter definitely dwells on the working relationship between said employees vis-a-vis SanMig.
Terms, tenure and conditions of their employment and the arrangement of those terms are thus
involved bringing the matter within the purview of a labor dispute. Further, the Union also
seeks to represent those workers. SanMig resists that Union demand on the ground that there
is no employer-employee relationship between it and those workers and because the demand
violates the terms of their CBA. Obvious then is that representation and association, for the
purpose of negotiating the conditions of employment are also involved. In fact, the injunction
sought by SanMig was precisely also to prevent such representation. Again, the matter of
representation falls within the scope of a labor dispute. Neither can it be denied that the
controversy below is directly connected with the labor dispute.

As the case is indisputably linked with a labor dispute, jurisdiction belongs to the labor
tribunals.
 Gold City Integrated Port Service, Inc. vs NLRC

FACTS:

Petitioners employees stopped working and gathered in a mass action to express their
grievances regarding wages, thirteenth month pay and hazard pay. Said employees were all
members of the Macajalar Labor Union Federation of Free Workers (MLU-FFW) with whom
petitioner had an existing collective bargaining agreement.

The strikers filed individual notices of strike (Kaugalingon nga Declarasyon sa Pag-
Welga) with the then Ministry of Labor and Employment.

With the failure of conciliation conferences between petitioner and the strikers, INPORT
filed a complaint before the Labor Arbiter for Illegal Strike with prayer for a restraining
order/preliminary injunction.

The National Labor Relations Commission issued a temporary restraining order.

Thereafter, majority of the strikers returned to work, leaving herein private respondents who
continued their protest.

For not having complied with the formal requirements in Article 264 of the Labor
Code, 3 the strike staged by petitioners workers on April 30, 1985 was found by the Labor
Arbiter to be illegal. 4 The workers who participated in the illegal strike did not, however, lose
their employment, since there was no evidence that they participated in illegal acts. After noting
that petitioner accepted the other striking employees back to work, the Labor Arbiter held that
the private respondents should similarly be allowed to return to work without having to undergo
the required screening to be undertaken by their union (MLU-FFW).

As regards the six private respondents who were union officers, the Labor Arbiter ruled
that they could not have possibly been duped or tricked into signing the strike notice for they
were active participants in the conciliation meetings and were thus fully aware of what was
going on. Hence, said union officers should be accepted back to work after seeking
reconsideration from herein petitioner. 5

The NLRC affirmed with modification 8 the Arbiters decision. It held that the concerted
action by the workers was more of a protest action than a strike. Private respondents,
including the six union officers, should also be allowed to work unconditionally to avoid
discrimination. However, in view of the strained relations between the parties, separation pay
was awarded in lieu of reinstatement.

The Commission ruled that since private respondents were not actually terminated from
service, there was no basis for reinstatement. However, it awarded six months salary as
separation pay or financial assistance in the nature of equitable relief. The award for
backwages was also deleted for lack of factual and legal basis. In lieu of backwages,
compensation equivalent to P1,000.00 was given.

ISSUE:

W/N the employees mass action may be considered as a strike

RULING:

A strike, considered as the most effective weapon of labor, is defined as any temporary
stoppage of work by the concerted action of employees as a result of an industrial or labor
dispute. A labor dispute includes any controversy or matter concerning terms or conditions of
employment or the association or representation of persons in negotiating, fixing, maintaining,
changing or arranging the terms and conditions of employment, regardless of whether or not
the disputants stand in the proximate relation of employers and employees.

Private respondents and their co-workers stopped working and held the mass action on
April 30, 1985 to press for their wages and other benefits. What transpired then was clearly a
strike, for the cessation of work by concerted action resulted from a labor dispute.

The Arbiter correctly ruled that the strike was illegal for failure to comply with the
requirements of Article 264 (now Article 263) paragraphs (c) and (f) of the Labor Code.

Test for Determining Labor Dispute

RCPI V PHILIPPINE COMMUNICATIONS ELECTRONICS AND ELECTRICITY WORKERS

FEDERATION

FACTS
The case is about the prayer of the respondent union, Philippine Communications,
Electronics & Electricity Workers Federation (FCWF), RCPI Employees Union for a modified
judgment. The plea is for the Supreme Court to include in the judgment the award of
backwages to the employees and laborers concerned, in addition to their immediate
reinstatement. The plea is opposed by RCPI upon the ground that the issue of payment of
backwages was neither raised in nor passed upon by the Industrial Court and is, in fact, not
even touched in the previous pleadings of the parties.

ISSUE
Whether or not there is labor dispute between RCPI and FCWF.

RULING
 There is no labor dispute. The Court said that they are not dealing with the backwages
to be paid to workers who are being ordered to be reinstated as a consequence of a finding by
the court that their suspension or dismissal by RCPI is illegal. What is involved is a failure to
comply or a veiled defiance by RCPI of a return-to-work order of the Industrial Court issued
seven years ago. The Industrial Court had no discretion in the matter. There was no
controversial issue of fault it had to decide. It was a plain case of exacting the most natural
sanction for a defiance of its order.

C. LABOR RELATIONS POLICY

1. Dispute Settlement Methodology

Art. 218 [211] (a)

Art. 211. Declaration of Policy.

It is the policy of the State:

a. To promote and emphasize the primacy of free collective bargaining and

negotiations, including voluntary arbitration, mediation and conciliation, as modes of
settling labor or industrial disputes;

2. Collective Bargaining

KIOK LOY, doing business under the name and style SWEDEN ICE CREAM PLANT vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC) and PAMBANSANG KILUSAN
NG PAGGAWA (KILUSAN)
FACTS:
The Pambansang Kilusang Paggawa (Union for short), a legitimate late labor federation,
won and was subsequently certified as the sole and exclusive bargaining agent of the rank-and-
file employees of Sweden Ice Cream Plant (Company for short).

After several request for collective bargaining negotiations, the Union filed a "Notice of
Strike", with the Bureau of Labor Relations (BLR) on ground of unresolved economic issues in
collective bargaining.

The NLRC held the Company guilty of unjustified refusal to bargain.

Petitioner Company now maintains that its right to procedural due process has been
violated when it was precluded from presenting further evidence in support of its stand and
when its request for further postponement was denied. Petitioner further contends that the
National Labor Relations Commission's finding of unfair labor practice for refusal to bargain is
not supported by law and the evidence considering that it was only on May 24, 1979 when the
Union furnished them with a copy of the proposed Collective Bargaining Agreement and it was
only then that they came to know of the Union's demands; and finally, that the Collective
Bargaining Agreement approved and adopted by the National Labor Relations Commission is
unreasonable and lacks legal basis.

ISSUE: W/N the NLRC acted with grave abuse of discretion

HELD:
NO. Collective bargaining which is defined as negotiations towards a collective
agreement,6 is one of the democratic frameworks under the New Labor Code, designed to
stabilize the relation between labor and management and to create a climate of sound and
stable industrial peace. It is a mutual responsibility of the employer and the Union and is
characterized as a legal obligation. So much so that Article 249, par. (g) of the Labor Code
makes it an unfair labor practice for an employer to refuse "to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating an agreement with respect to wages,
hours of work, and all other terms and conditions of employment including proposals for
adjusting any grievance or question arising under such an agreement and executing a contract
incorporating such agreement, if requested by either party.

While it is a mutual obligation of the parties to bargain, the employer, however, is not
under any legal duty to initiate contract negotiation.7 The mechanics of collective bargaining is
set in motion only when the following jurisdictional preconditions are present, namely, (1)
possession of the status of majority representation of the employees' representative in
accordance with any of the means of selection or designation provided for by the Labor Code;
(2) proof of majority representation; and (3) a demand to bargain under Article 251, par. (a) of
the New Labor Code . ... all of which preconditions are undisputedly present in the instant case.

From the over-all conduct of petitioner company in relation to the task of negotiation,
there can be no doubt that the Union has a valid cause to complain against its (Company's)
attitude, the totality of which is indicative of the latter's disregard of, and failure to live up to,
what is enjoined by the Labor Code to bargain in good faith.

We are in total conformity with respondent NLRC's pronouncement that petitioner

Company is GUILTY of unfair labor practice. It has been indubitably established that (1)
respondent Union was a duly certified bargaining agent; (2) it made a definite request to
bargain, accompanied with a copy of the proposed Collective Bargaining Agreement, to the
Company not only once but twice which were left unanswered and unacted upon; and (3) the
Company made no counter proposal whatsoever all of which conclusively indicate lack of a
sincere desire to negotiate.
 3. Trade Unionism

Art. 218 [211] (b), (c)

Art. 211. Declaration of Policy.

It is the policy of the State:

b. To promote free trade unionism as an instrument for the enhancement of democracy

and the promotion of social justice and development;

c. To foster the free and voluntary organization of a strong and united labor movement;

Art. 219 [212] (g)

"Labor organization" means any union or association of employees which exists in whole or in
part for the purpose of collective bargaining or of dealing with employers concerning terms and
conditions of employment.

4. Worker Enlightenment

Art. 218 [211] (d)

Art. 211. Declaration of Policy.

It is the policy of the State:

d. To promote the enlightenment of workers concerning their rights and obligations as

union members and as employees;

Art. 250 [241] 250 (p) Rights and Conditions of Membership in a Labor Organization

Art. 241. Rights and conditions of membership in a labor organization. The

following are the rights and conditions of membership in a labor organization:

p. It shall be the duty of any labor organization and its officers to inform its members
on the provisions of its constitution and by-laws, collective bargaining agreement,
 the prevailing labor relations system and all their rights and obligations under
existing labor laws.
For this purpose, registered labor organizations may assess reasonable dues to finance
labor relations seminars and other labor education activities.
Any violation of the above rights and conditions of membership shall be a ground for
cancellation of union registration or expulsion of officers from office, whichever is
appropriate. At least thirty percent (30%) of the members of a union or any member or
members specially concerned may report such violation to the Bureau. The Bureau shall
have the power to hear and decide any reported violation to mete the appropriate
penalty.
Criminal and civil liabilities arising from violations of above rights and conditions of
membership shall continue to be under the jurisdiction of ordinary courts.

Art. 292 [277] (a) Miscellaneous Provisions

Book V, Rule 20 Sec. 1-3

DAVAO INTEGRATED PORT AND STEVEDORING SERVICES CORPORATION vs

ALFREDO C. OLVIDA
FACTS:
The controversy centers on the interpretation of two provisions of the five-year
Collective Bargaining Agreement Davao Integrated Port and Stevedoring Services Corporation
and Association of Trade Unions Namely:
1. ARTICLE VIII SICK, VACATION AND EMERGENCY LEAVES.
Sec. 4 Emergency Leaves. The Company agrees to grant a
maximum or six (6) days Emergency Leave with pay per calendar
year to all regular field workers, covered by this agreement who
have rendered at least six months of service (including overtime)
per calendar year, are members of the Regular Labor Pool, upon
prior approval by the company. Said Emergency Leave is not
cumulative (sic) nor commutable." (pp. 46-47, Rollo; Emphasis
supplied.)
ARTICLE XVII SPECIAL PROVISIONS.
Sec. 4 Union Education and Training Fund. The Company
agrees to contribute twelve thousand (P12,000.00) pesos per year
to the Union Education and Training Fund. (p. 48, Rollo.)
 The company insisted that the above provisions are to be interpreted as:
1. Under Article VIII, Section 4 (Emergency Leave) that before the
intermittent field workers who are members of the Regular Labor Pool can avail
of the six (6) days Emergency Leave, the workers must have rendered at least
six months of service per calendar year regardless of their employment status
(i.e., regular or probationary).
2. Under Article XVII, Section 4 (Union Education and Training Fund)
petitioner required that the Union should first prepare and submit a seminar
program before it can avail of the Education and Training Fund of
P12,000.00 per annum.
The Arbitrator decided in favor of the Union.
Hence, this petition.

ISSUE:
1. Whether or not the company is correct on the ground that only regular employees who
have rendered at least six months can avail the emergency leave?
2. Whether or not the company is correct in requiring the union to submit a seminar
program before it can avail the education and training fund?

HELD:
1. Yes
2. No
The provision of the CBA is clear: (1) the employee must be a member of the Regular
Labor Pool; (2) he is entitled to only six (6) days emergency leave with pay per calendar year;
and (3) he must have rendered service for at least six (6) months during the year when he took
his emergency leave. The emergency leave may be staggered or it may last for any number of
days as emergencies arise but the employee is entitled only to six (6) days of emergency leave
"with pay" per year. Since the emergency leave is allowed to enable the employee to attend to
an emergency in his family or household, it may be taken at any time during the calendar year
but he must render at least six months service for that year to be entitled to collect his wages
for the six (6) days of his emergency leave. Since emergencies are unexpected and
unscheduled happenings, it would be absurd to require the employee to render six (6) months
service before being entitled to take a six-day emergency leave with pay for it would mean that
no emergency leave can be taken by an employee during the first six months of a calendar
year.

With regard to the provision on Union Education and Training Fund in Section 4, Article
XVII of the CBA, the petitioner's requirement that the Union submit a seminar program for each
calendar year before it may claim the company's P12,000 yearly donation to the fund, is not
warranted by the terms of the CBA.
 WHEREFORE, the petition is GRANTED however the decision of the Voluntary Arbitrator
is AFFIRMED in other respects.

Victoria vs Inciong
Facts:
Victoria was employed by private respondent Far East Broadcasting Company,
Incorporated as a radio transmitter operator. He and his co-workers organized the Far East
Broadcasting Company Employees Association. After registering their association with the then
Department of Labor, they demanded recognition of said association by the company but the
latter refused on the ground that being a non-profit, non-stock, non-commercial and religious
corporation, it is not covered by Industrial Peace Act, the labor law enforced at that time.
Director of Labor Relations Edmundo Cabal advised the union members that the company could
not be forced to recognize them or to bargain collectively with them because it is a non-profit,
non-commercial and religious organization. Notwithstanding such advice, the union members
led by Saturno Victoria as its president, declared a strike and picketed the company's premises
on September 6, 1972 for the purpose of seeking recognition of the labor union. This prompted
the company to file for damages and preliminary injunction. Petitioner was subsequently
dismissed from the company and he alleged that he was illegally dismissed since prior clearance
is needed from the Secretary before the dismissal of employees or cessation of business.

Issue: Whether or not petitioner was illegally dismissed since there is no prior clearance that is
needed.

Ruling:
No. Technically speaking, no clearance was obtained by private respondent from the
then Secretary of Labor, the last step towards full compliance with the requirements of law on
the matter of dismissal of employees. However, the rationale behind the clearance requirement
was fully met. The Secretary of Labor was apprised of private respondent's intention to
terminate the services of petitioner. This in effect is an application for clearance to dismiss
petitioner from employment. The affirmance of the restrictive condition in the dispositive
portion of the labor arbiter's decision in NLRC Case Nos. 0021 and 0285 by the Secretary of
Labor and the Office of the President of the Philippines, signifies a grant of authority to dismiss
petitioner in case the strike is declared illegal by the Court of First Instance of Bulacan.
Consequently and as correctly stated by the Solicitor General, private respondent acted in good
faith when it terminated the employment of petitioner upon a declaration of illegality of the
strike by the Court of First Instance of Bulacan. Moreover, the then Secretary of Labor
manifested his conformity to the dismissal, not once, but twice. In this regard, the mandatory
rule on clearance need not be applied.
 The strike staged by the union in 1972 was a futile move. The law then enforced,
Republic Act 875 specifically excluded respondent company from its coverage. Even if the
parties had gone to court to compel recognition, no positive relief could have been obtained
since the same was not sanctioned by law. Because of this, there was no necessity on the part
of private respondent to show specific acts of petitioner during the strike to justify his dismissal.

This is a matter of responsibility and of answerability. Petitioner as a union leader, must

see to it that the policies and activities of the union in the conduct of labor relations are within
the precepts of law and any deviation from the legal boundaries shall be imputable to the
leader. He bears the responsibility of guiding the union along the path of law and to cause the
union to demand what is not legally demandable, would foment anarchy which is a prelude to
chaos.

Petitioner should have known and it was his duty to impart this imputed knowledge to
the members of the union that employees and laborers in non- profit organizations are not
covered by the provisions of the Industrial Peace Act and the Court of Industrial Relations [in
the case at bar, the Court of First Instance] has no jurisdiction to entertain petitions of labor
unions or organizations of said non-profit organizations for certification as the exclusive
bargaining representatives of said employees and laborers.

5. Machinery Dispute Settlement

Art. 218 [211] (e)

6. Industrial Peace

Art. 218 [211] (f)

 Art. 288 [273] (a) (i) Study of Labor Management Relations

7. Worker Participation in Decision- Making

Art. 218 [211] (g)

 Art. 292 [277] (g) Miscellaneous Provisions

8. Wage Fixing

Art. [211] 218 (b)

Art. [263] 278 (g) Strikes, Picketing, & Lockouts

9. Labor injunction

Art. 266 [254] Injunction Prohibited

Art. 225 [218] (e) Powers of the Commission

 Art. 281 [266] Requirement for Arrest & Detention

Rationale for Policy on Injunction

Caltex Filipino Managers and Supervisors Association vs

Court of Industrial Relations, Caltex ( Philippines ) , INC., W.E. Menefee and B. F.
Edwards

Facts:
The Caltex Filipino Managers and Supervisors Association is a labor organization of
Filipino managers supervisors in Caltex (Philippines) , Inc., respondent Company in this
proceeding. The Association sent a set of proposals to the Company wherein one of the
demands was the recognition of the Association as the duly authorized bargaining agency for
managers and supervisors in the company. To this the Company countered stating that a
distinction exists between representatives of management and individuals employed as
supervisors and that is Companys belief that managerial employees are not qualified for
membership in a labor organization; hence it is digested that the Association institute a
certification proceeding so as to remove any question with regard to the position titles that
should be included in the bargaining unit. The Association felt disinclined to follow the
suggestion of the company and so on the Company initiated a certification proceeding.

On March 8, 1965 the Association filed a notice to strike giving reasons which are refusal
to bargain in good faith and to act on demands. During the hearing of the certification
proceedings Judge Tabigne cautioned the parties to maintain the status quo; he specifically
advised the employees not to go on strike, making it clear , however, that in the presence of
unfair labor practices they could go on strike even without any notice.

On the basis of the strike notice, after the efforts exerted by the Bureau of Labor
Relations to settle the differences between the parties failed. Then through the Urgent Petition
, the Company filed cases. Such urgent petition was frontally met by the Association with a
motion to dismiss questioning the jurisdiction of the industrial court. The motion to dismiss was
opposed by the Company, the trial court denied the same. Not satisfied with the order, the
Association moved for its reconsideration before respondent court en banc.

Because of the settlement between the parties of some of their disputes, the Association
filed with respondent court a manifestation ( to which was attached a copy of the return-to-
work agreement signed by the parties ), to the effect the issues had become moot and
academic. Considering the interrelation of the issues involved in the two cases and by
agreement of the parties, the two cases were heard jointly.

Issue:
Whether or not the strike staged by the Association is illegal.

Held:
The court view the return-to-work agreement of May 30, 1965 as in the nature of a
partial compromise between the parties and, more important a labor; consequently in the latter
aspect the same must yield to the common good ( Art. 1700, Civil Code of the Philippines )
and in case of doubt.. shall be construed in favor of the safety and decent living for the
laborer ( Article 1702 ). The court said when the company unqualifiedly bound itself in the
return- to-work agreement that all employees will be taken back with the same employee
status prior to April 22, 1965 , the company thereby made manifest its intention and
conformity not to proceed with case no. 1484-MC relating the illegality of the strike incident.
For while it is true that there is a reservation in the return-to-work agreement as follows:
 The parties agree that all court cases now pending shall continue, including CIR case no.
1484- MC.

The court said it should be construed the same bearing in mind the conduct and
intention of the parties. The failure to mention case no. 1484-MC (1) which is the illegality of
the strike while specifically mentioning case no. 1484-MC which is incident of the certification
election proceedings, the courts opinion , bars the company from proceeding with the former
especially in the light of the additional specific stipulation that the strikers would be taken back
with the same employee status prior to the strike on April 22, 1965.
The court said that the Association resorted to means beyond the pale of the law in the
prosecution of the strike. The Association filed its notice to strike on March 8, 1965, giving
reasons therefor any one of which is valid ground for a strike. Besides, one of the important
rights recognized by the Magna Carta of Labor is the right to self-organization and the court do
not hesitate to say that is the cornerstone of the monumental piece of labor legislation.

Wherefore, respondent courts resolution en banc dated May 16, 1969, together with the
decision dated February 26, 1969, is revered.

In case no. 1484 MC (1), the court declares the strike of the Caltex Filipino Managers
and Supervisors Association as legal in all respects and consequently, the forfeit of the
employee status of J.J. Mapa and Dominador Mangalino to their former positions without loss of
seniority and privileges, with backwages from the time of dismissal on July 1, 1969.

The court finds also in case no. 4344- ULP , the company of B.F. Edwards and W. E.
Menefee guilty of unfair labor practices and they are therefore ordered to cease and desist from
the same. The company is directed to pay backwages to the striking employees from April 22,
1965 to May 30, 1965.

10. Tripartism

Art. 290 [275] (a), (b)