Labor Finals

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TOPIC NO. 1
FUNDAMENTAL PRINCIPLES AND POLICIES
A. CONSTITUTIONAL PROVISIONS
What are the significant constitutional principles related to Labor Law?
The following principles are noteworthy:
1. Under Article II (Declaration of Principles and State Policies):
2. Promotion of full employment, a rising standard of living, and an improved

quality of life for all.
3. Promotion of social justice in all phases of national development.
4. Full respect for human rights.
5. Vital role of the youth in nation-building.
6. Role of women in nation-building, and fundamental equality before the law of

women and men.
7. Indispensable role of the private sector,
Protection-to-labor clause: “Section 18. The State affirms labor as a primary social
economic force. It shall protect the rights of workers and promote their welfare.
NOTE: Article II is merely a statement of principles and state policies. Its provisions
are not self-executing. They do not embody judicially enforceable constitutional
rights but guidelines for legislation. These broad constitutional principles need
legislative enactments to implement them. The disregard of these provisions
cannot give rise to a cause of action in the courts. Consequently, no case can
be filed based on these principles. There must be enabling laws to implement
them.
Under Article III (Bill of Rights):
a) Due process and equal protection of the law.
b) Freedom of speech, of expression, or of the press, or the right of the people

peaceably to assemble and petition the government for redress of grievances.
c) Right of the people to information on matters of public concern. Access to

official records, and to documents and papers pertaining to official acts,
transactions, or decisions, as well as to government research data used as basis
for policy development, shall be afforded the citizen, subject to such limitations as
may be provided by law.
d) Right of public and private sector employees to form unions, associations, or

societies for purposes not contrary to law shall not be abridged.
e) Non-impairment of obligations of contracts.
f) Right to speedy disposition of cases in judicial, quasi-judicial or administrative

bodies. g. Prohibitions against involuntary servitude.
Under Article XIII (Social Justice and Human Rights):
a. Protection-to-Labor Clause: VERY IMPORTANT
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 to investments, and to expansion and growth.
What are the due process principles applicable in termination of employment?
1. Constitutional due process is not applicable to termination of employment. This means

that the employee undergoing investigation leading to his dismissal cannot invoke
constitutional due process if and when he is deprived of due process by the employer. This is
so because constitutional due process may only be invoked against the State or government.
However, after being dismissed, the employee who files an illegal dismissal case may invoke
constitutional due process in case he is deprived of due process by the Labor Arbiter, the
NLRC, or the Court of Appeals since, this time, it is already the government which may be said
to have deprived him of due process.
2. At the company level investigation leading to an employee’s dismissal, BOTH the following
procedural due process must be complied with:
(a) Statutory due process per 2004 Agabon doctrine which refers to the due process
provision in the Labor Code (Article 277[b]); AND
(b) Contractual due process per 2013 Abbott Laboratories doctrine1 which refers to
the due process prescribed by the employer itself in its Company rules and regulations
or Code of Discipline. Having prescribed the due process itself, the employer is
contractually bound to adhere to and observe it.
Penalty for non-compliance with either or both statutory or contractual due process -
P30,000.00 indemnity in the form of nominal damages.
Is assistance of counsel in termination cases mandatory and indispensable?
NO, according to the 2011 case of Lopez v. Alturas Group of Companies:2
Except:
(1) When the employee himself requests for counsel; or
(2) When he manifests that he wants a formal hearing on the charges against him.
B.
NEW CIVIL CODE
What is latest example of a labor case where Article 1700 of the Civil Code was
applied?
Article 1700 of the Civil Code provides:
“Art. 1700. The relations between capital and labor are not merely contractual. They
are so impressed with public interest that labor contracts must yield to the common
good. Therefore, such contracts are subject to the special laws on labor unions,
collective bargaining, strikes and lockouts, closed shop, wages, working
conditions, hours of labor and similar subjects.”
2011 case of Leyte Geothermal Power Progressive Employees Union-ALU-TUCP v.

Philippine National Oil Company-Energy Development Corporation, involving the issue
of whether the members of petitioner union are project tending to vitiate the workers’
consent. Thus, there is no reason not to honor and give effect to the terms and conditions
stipulated therein.
How is Article 1702 of the Civil Code correlated with Article 4 of the Labor Code?
Both Article 1702 of the Civil Code and Article 4 of the Labor Code speak of the rule on
interpretation and construction provisions of law and labor contracts.
Article 1702 of the Civil Code provides:
“Article 1702. In case of doubt, all labor legislation and all labor contracts shall be
construed in favor of the safety and decent living for the laborer.”
Article 4 of the Labor Code states:
“Article 4. Construction in Favor of Labor. – All doubts in the implementation and

interpretation of the provisions of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor.”
Both articles above may be applied to doubts and ambiguities in:
(1) labor contracts such as an employment contract or a CBA; or
(2) evidence presented in labor cases.
C.
THE LABOR CODE
What are the distinctions between Labor Relations and Labor Standards?
“Labor standards law” is that part of labor law which prescribes the minimum terms and
conditions of employment which the employer is required to grant to its employees.
“Labor relations law” is that part of labor law (Book V of the Labor Code) which deals with
unionism, collective bargaining, grievance machinery, voluntary arbitration, strike, picketing
and lockout.
Labor relations and labor standards laws are not mutually exclusive. They are
complementary to, and closely interlinked with, each other. For instance, the laws on
collective bargaining, strikes and lockouts which are covered by labor relations law necessarily
relate to the laws on working conditions found in Book III.
What is exclusive bargaining representative/agent?
“Exclusive bargaining representative” or “exclusive bargaining agent” refers to a legitimate

labor organization duly recognized or certified as the sole and exclusive bargaining
representative or agent of all the employees in a bargaining unit.
Can individual employee or group of employees bring grievable issues directly to

their employer without the participation of the bargaining union?
Yes. The designation of a bargaining agent does not deprive an individual employee or group
of employees to exercise their right at any time to present grievances to their employer, with
or without the intervention of the bargaining agent.
Can individual employee or group of employees bring grievable issues to

voluntary arbitration without the participation of the bargaining union?
No, as held in the 2009 case of Tabigue v. International Copra Export Corporation,1
where the Supreme Court clarified that an individual employee or group of employees cannot
be allowed to submit or refer unsettled grievances for voluntary arbitration without the
participation of the bargaining union/agent. The reason is that it is the bargaining union/agent
which is a party to the CBA which contains the provision on voluntary arbitration. Being a
party thereto, it cannot be disregarded when a grievable issue will be submitted for voluntary
arbitration.
In order to have legal standing, the individual members should be shown to have been duly
authorized to represent the bargaining union/agent.
What is the principle of co-determination?
The principle of co-determination refers to the right given to the employees to participate in
policy and decision-making processes that affect their rights, benefits and welfare.
In PAL v. NLRC and PALEA,2 it was held that the formulation of a Code of Discipline among
employees is a shared responsibility of the employer and the employees. It affirmed the
decision of the NLRC which ordered that the New Code of Discipline should be reviewed and
discussed with the union, particularly the disputed provisions and that copies thereof be
furnished each employee.
Does the grant of the right of participation mean co-management of business or

intrusion into management prerogatives?
The establishment of LMC is mandated under the said constitutional principle of co-
determination. This is the body where workers, through their representatives, together with
representatives of the employer, are allowed to participate in policy and decision-making
processes that affect their rights, benefits and welfare.
What is the provision of the Labor Code enunciating STATUTORY DUE PROCESS?
Article 277, paragraph (b) of the Labor Code enunciates the so-called statutory due process.
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TOPIC NO. 2
RECRUITMENT AND PLACEMENT
A. RECRUITMENT OF LOCAL AND MIGRANT WORKERS
I. RECRUITMENT AND PLACEMENT FOR LOCAL EMPLOYMENT
What is a “Private Recruitment and Placement Agency (PRPA)”?
It refers to any individual, partnership, corporation or entity engaged in the recruitment and
placement of persons for local employment.
What are the qualifications of a PRPA for local employment?
An applicant for a license to operate a PRPA must possess the following:
1. Must be a Filipino citizen, if single proprietorship. In case of a partnership or a

corporation, at least seventy-five percent (75%) of the authorized capital stock must
be owned and controlled by Filipino citizens;
2. Must have a minimum net worth of P200,000.00 in the case of single proprietorship
and partnership or a minimum paid-up capital of P500,000.00 in the case of a
corporation.
3. The owner, partners or the officers of the corporation must be of good moral character
and not otherwise disqualified by law;
4. Must have an office space with a minimum floor area of fifty (50) square meters.
What is the period of validity of the license?
The license shall be valid all over the Philippines for two (2) years from the date of issuance,
upon submission of proof of publication, unless sooner suspended, cancelled or revoked by the
DOLE Regional Director.
Is the license transferable to other persons or entities?

No license shall be transferred, conveyed or assigned to any other person or entity.
II. RECRUITMENT AND PLACEMENT FOR OVERSEAS EMPLOYMENT
What are the laws relevant to overseas employment?
1. The Labor Code; and

2. Migrant Workers and Overseas Filipinos Act of 1995 [R. A. No. 8042], as amended by
R.A. No. 10022 (March 8,2010).
What are the important terms related to overseas employment?
1. “Overseas Filipinos” refer to migrant workers, other Filipino nationals and their
dependents abroad;
2. “Overseas Filipino Worker or Migrant Worker” refers to a person who is to be

engaged, is engaged, or has been engaged in a remunerated activity in a state
of which he or she is not a citizen or on board a vessel navigating the foreign
seas other than a government ship used for military or non-commercial
purposes, or on an installation located offshore or on the high seas. A
“person to be engaged in a remunerated activity” refers to an applicant worker
who has been promised or assured employment overseas.
What are the entities authorized to engage in recruitment and placement of

workers?
The following are authorized to engage in recruitment and placement of workers:
a. Public employment offices;

b. Philippine Overseas Employment Administration (POEA);
c. Private recruitment entities;
d. Private employment agencies;
e. Shipping or manning agents or representatives;
f. Such other persons or entities as may be authorized by the DOLE Secretary;
and g. Construction contractors.
LICENSING AND REGULATION FOR OVERSEAS RECRUITMENT AND PLACEMENT
What are the qualifications of a recruiter for overseas employment?
Only those who possess the following qualifications may be permitted to engage in the
business of recruitment and placement of overseas Filipino workers:
1. Filipino citizens, partnerships or corporations at least seventy five percent (75%)

of the authorized capital stock of which is owned and controlled by Filipino citizens;
2. A minimum capitalization of Two Million Pesos (P2,000,000.00) in case of a single

proprietorship or partnership and a minimum paid-up capital of Two Million Pesos
(P2,000,000.00) in case of a corporation; Provided, that those with existing
licenses shall, within four (4) years from effectivity hereof, increase their
capitalization or paid up capital, as the case may be, to Two Million Pesos
(P2,000,000.00) at the rate of Two Hundred Fifty Thousand Pesos (P250,000.00)
every year; and
3. Those not otherwise disqualified by law or other government regulations to engage

in the recruitment and placement of workers for overseas employment.
What are the disqualifications?
The following are not qualified to engage in the business of recruitment and placement of
Filipino workers overseas:
a. Travel agencies and sales agencies of airline companies;
b. Officers or members of the Board of any corporation or members in a partnership

engaged in the business of a travel agency;
c. Corporations and partnerships, when any of its officers, members of the board or
partners, is also an officer, member of the board or partner of a corporation or
partnership engaged in the business of a travel agency;
d. Persons, partnerships or corporations which have derogatory records, such as, but not
limited to, the following:
1) Those certified to have derogatory record or information by the NBI or by the

Anti-Illegal Recruitment Branch of the POEA;
2) Those against whom probable cause or prima facie finding of guilt for illegal
recruitment or other related cases exists;
3) Those convicted for illegal recruitment or other related cases and/or crimes
involving moral turpitude; and
4) Those agencies whose licenses have been previously revoked or cancelled by
the POEA for violation of R.A. No. 8042, the Labor Code (PD 442, as
amended), and their implementing rules and regulations.
All applicants for issuance/renewal of license shall be required to submit

clearances from the NBI and Anti- Illegal Recruitment Branch of the POEA,
including clearances for their respective officers and employees.
e. Any official or employee of the DOLE, POEA, Overseas Workers Welfare Administration
(OWWA), Department of Foreign Affairs (DFA) and other government agencies directly
involved in the implementation of R.A. No. 8042 and/or any of his/her relatives within
the fourth (4th) civil degree of consanguinity or affinity; and
f. Persons or partners, officers and directors of corporations whose licenses have been
previously cancelled or revoked for violation of recruitment laws.
What is the period of validity of license?
Every license shall be valid for four (4) years from the date of issuance unless sooner
cancelled, revoked or suspended for violation of applicable Philippine law, the Rules and other
pertinent issuances. Such license shall be valid only at the place/s stated therein and when
used by the licensed person, partnership or corporation.
Can a license be transferred?
No. The license shall not be transferred, conveyed or assigned to any person, partnership or
corporation. It shall not be used directly or indirectly by any person, partnership or
corporation other than the one in whose favor it was issued.
ILLEGAL RECRUITMENT
(Section 5, R.A. No. 10022)
Who may commit illegal recruitment?
Broadly, “illegal recruitment” may be committed by any person, regardless of whether

such person is a:
1) Non-licensee;
2) Non-holder of authority;
3) Licensee; or
4) Holder of authority.
Any person, whether a non-licensee, non-holder, licensee or holder of authority, may

be held liable for illegal recruitment. Under R.A. No, 8042, as amended by R.A. No.
10022, license or authority of the illegal recruiter is immaterial.
What constitutes illegal recruitment when committed by a NON-LICENSEE or NON-

HOLDER OF AUTHORITY?
Illegal recruitment, when undertaken by non-licensee or non-holder of authority,

shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring,
or procuring workers and includes referring, contract services, promising or
advertising for employment abroad, whether for profit or not, Provided, That any such
non-licensee or non-holder who, in any manner, offers or promises for a fee employment
abroad to two or more persons shall be deemed so engaged.
What constitutes illegal recruitment when committed by ANY PERSON, whether

a NON-LICENSEE, NON- HOLDER OF AUTHORITY or even by a LICENSEE or HOLDER
OF AUTHORITY?
(a) To charge or accept, directly or indirectly, any amount greater than that specified
in the schedule of allowable fees prescribed by the Secretary of Labor and
Employment, or to make a worker pay or acknowledge any amount greater than
that actually received by him as a loan or advance;
(b) To furnish or publish any false notice or information or document in relation to

recruitment or employment;
(c) To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under the
Labor Code, or for the purpose of documenting hired workers with the POEA,
which include the act of reprocessing workers through a job order that pertains to
non-existent work, work different from the actual overseas work, or work with a
different employer whether registered or not with the POEA;
(d) To induce or attempt to induce a worker already employed to quit his employment
in order to offer him another unless the transfer is designed to liberate a worker
from oppressive terms and conditions of employment;
(e) To influence or attempt to influence any person or entity not to employ any
worker who has not applied for employment through his agency or who has
formed, joined or supported, or has contacted or is supported by any union or
workers' organization;
(f) To engage in the recruitment or placement of workers in jobs harmful to public

health or morality or to the dignity of the Republic of the Philippines;
(g) To fail to submit reports on the status of employment, placement vacancies,

remittance of foreign exchange earnings, separation from jobs, departures and
such other matters or information as may be required by the Secretary of Labor
and Employment;
(h) To substitute or alter to the prejudice of the worker, employment contracts

approved and verified by the Department of Labor and Employment from the time
of actual signing thereof by the parties up to and including the period of the
expiration of the same without the approval of the Department of Labor and
Employment;
(i) For an officer or agent of a recruitment or placement agency to become an
officer or member of the Board of any corporation engaged in travel agency or
to be engaged directly or indirectly in the management of travel agency;
(j) To withhold or deny travel documents from applicant workers before departure
for monetary or financial considerations, or for any other reasons, other than
those authorized under the Labor Code and its implementing rules and
regulations;
(k) Failure to actually deploy a contracted worker without valid reason as determined
by the Department of Labor and Employment;
(l) Failure to reimburse expenses incurred by the worker in connection with his
documentation and processing for purposes of deployment, in cases where the
deployment does not actually take place without the worker's fault. Illegal
recruitment when committed by a syndicate or in large scale shall be
considered an offense involving economic sabotage; and
(m) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning

agency.”
PROHIBITED ACTIVITIES IN RELATION TO ILLEGAL RECRUITMENT
What are the prohibited activities in connection with recruitment for overseas
employment?
Besides illegal recruitment, the law additionally provides that it shall also be unlawful for any
person or entity to commit the following prohibited acts:
(1) Grant a LOAN to an overseas Filipino worker with interest exceeding

eight percent (8%) per annum, which will be used for payment of legal and
allowable placement fees and make the migrant worker issue, either personally
or through a guarantor or accommodation party, post-dated checks in relation
to the said loan;
(2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino

worker is required to avail of a LOAN only from specifically designated
institutions, entities or persons;
(3) Refuse to condone or renegotiate a LOAN incurred by an overseas Filipino

worker after the latter's employment contract has been prematurely terminated
through no fault of his or her own;

worker is required to undergo HEALTH EXAMINATIONS only from
specifically designated medical clinics, institutions, entities or persons,
except in the case of a seafarer whose medical examination cost is
shouldered by the principal/shipowner;

worker is required to undergo TRAINING, SEMINAR, INSTRUCTION OR
SCHOOLING of any kind only from specifically designated
institutions, entities or persons, except for recommendatory trainings
mandated by principals/shipowners where the latter shoulder the cost
of such trainings;
(6) For a SUSPENDED RECRUITMENT/MANNING AGENCY to engage in any kind of

recruitment activity including the processing of pending workers' applications;
and
(7) For a recruitment/manning agency or a foreign principal/employer to pass on
the overseas Filipino worker or deduct from his or her salary the payment of
the cost of INSURANCE fees, premium or other insurance related
charges, as provided under the compulsory worker's INSURANCE coverage.
LICENSE VS. AUTHORITY
What is a “license” for overseas recruitment?
“License” refers to the document issued by the DOLE Secretary authorizing a person,
partnership or corporation to operate a private recruitment or manning agency.
What is an “authority” for overseas employment?
“Authority” refers to the document issued by the DOLE Secretary authorizing the officers,
personnel, agents or representatives of a licensed recruitment or manning agency to
conduct recruitment and placement activities in a place stated in the license or in a specified
place.
ELEMENTS OF ILLEGAL RECRUITMENT
What are the elements of illegal recruitment?
The essential elements of illegal recruitment vary in accordance with the following
classifications:
(1) Simple illegal recruitment;
(2) When committed by a syndicate; or
(3) When committed in large scale.
When illegal recruitment is committed under either Nos. 2 or 3 above or both, it is considered
an offense involving economic sabotage.
SIMPLE ILLEGAL RECRUITMENT
What are the 2 elements of simple illegal recruitment?
(1) The offender has no valid license or authority required by law to enable one to
lawfully engage in recruitment and placement of workers; and
(2) He undertakes either any activity within the meaning of “recruitment and
placement” defined under Article 13(b), (see above enumeration) or any
prohibited practices (see above enumeration) under Article 34 of the Labor Code.
Can a recruiter be a natural or juridical person? Yes.
What are some relevant principles on illegal recruitment?
(1) Mere impression that a person could deploy workers overseas is sufficient to constitute
illegal recruitment. But if no such impression is given, the accused should not be
convicted for illegal recruitment.
(2) Mere promise or offer of employment abroad amounts to recruitment.
(3) There is no need to show that accused represented himself as a licensed recruiter.
(4) Referrals may constitute illegal recruitment.
(5) It is illegal recruitment to induce applicants to part with their money upon false
misrepresentations and promises in assuring them that after they paid the placement
fee, jobs abroad were waiting for them and that they would be deployed soon.
(6) Recruitment whether done for profit or not is immaterial.
(7) The act of receiving money far exceeding the amount as required by law is not
considered as “recruitment and placement” as this phrase is contemplated under the
law.
(8) Actual receipt of fee is not an element of the crime of illegal recruitment.
(9) Conduct of interviews amounts to illegal recruitment.
(10) Absence of receipt is not essential to hold a person guilty of illegal recruitment.
(11) Conviction for illegal recruitment may be made on the strength of the
testimonies of the complainants.
(12) Absence of documents evidencing the recruitment activities strengthens, not

weakens, the case for illegal recruitment.
(13) Only one person recruited is sufficient to convict one for illegal recruitment.
(14) Non-prosecution of another suspect is immaterial.
(15) Execution of affidavit of desistance affects only the civil liability but has no effect
on the criminal liability for illegal recruitment.
(16) Defense of denial cannot prevail over positive identification. Positive

identification where categorical and consistent and not attended by any showing of ill
motive on the part of the eyewitnesses on the matter prevails over alibi and denial.
Between the categorical statements of the prosecution witnesses, on the one hand, and
bare denials of the accused, on the other hand, the former must prevail.
ILLEGAL RECRUITMENT AS A FORM OF ECONOMIC SABOTAGE
When is illegal recruitment considered a crime involving economic sabotage?
1. when committed by a syndicate; or
2. when committed in large scale.
When is illegal recruitment committed by a syndicate?
If it is carried out by a group of three (3) or more persons conspiring or confederating

with one another.
Elements of illegal recruitment by a syndicate.
The essential elements of the crime of illegal recruitment committed by a syndicate are as
follows:
1. There are at least three (3) persons who, conspiring and/or confederating with one
another, carried out any unlawful or illegal recruitment and placement activities as
defined under Article 13(b) or committed any prohibited activities under Article 34 of
the Labor Code; and
2. Said persons are not licensed or authorized to do so, either locally or overseas.
The law does not require that the syndicate should recruit more than one (1) person
in order to constitute the crime of illegal recruitment by a syndicate. Recruitment of
one (1) person would suffice to qualify the illegal re cruitment act as having been
committed by a syndicate.
When is illegal recruitment considered in large scale?
If committed against three (3) or more persons individually or as a group.
Elements of illegal recruitment in large scale.
The elements of illegal recruitment in large scale, as distinguished from simple illegal
recruitment, are as follows:
1. The accused engages in the recruitment and placement of workers as defined under
Article 13(b) or committed any prohibited activities under Article 34 of the Labor Code;
and
2. The accused commits the same against three (3) or more persons, individually or as a
group.
Distinguished from illegal recruitment by a syndicate.
As distinguished from illegal recruitment committed by a syndicate, illegal recruitment in large

scale may be committed by only one (1) person. What is important as qualifying element is
that there should be at least three (3) victims of such illegal recruitment, individually or as a
group.
What are some relevant principles on illegal recruitment involving economic

sabotage?
(1) The number of persons victimized is determinative of the crime. A conviction for large
scale illegal recruitment must be based on a finding in each case of illegal recruitment
of three (3) or more persons having been recruited, whether individually or as a group.
(2) Failure to prove at least 3 persons recruited makes the crime a case of simple illegal
recruitment.
(3) There is no illegal recruitment in large scale based on several informations filed by only
one complainant.
(4) The number of offenders is not material in illegal recruitment in large scale.
(5) Recruitment in large scale or by a syndicate is malum prohibitum and not malum in se.
ILLEGAL RECRUITMENT VS. ESTAFA
Can a person be charged and convicted separately for illegal recruitment and estafa
involving one and the same act of recruitment?
Yes. It is clear that conviction under the Labor Code does not preclude conviction for estafa or
other crimes under
The nature of their liability is “solidary” or “joint and several” for any and all claims arising
out of the employment contract of OFWs.
Is the solidary liability of corporate officers with the recruitment agency “automatic”
in character?
No. In order to hold the officers of the agency solidarily liable, it is required that there must
be proof of their culpability therefor. Thus, it was held in the 2013 case of Gagui v. Dejero,1
that while it is true that R.A. 8042 and the Corporation Code provide for solidary liability, this
liability must be so stated in the decision sought to be implemented. Absent this express
statement, a corporate officer may not be impleaded and made to personally answer for the
liability of the corporation.
What are some relevant principles on the persons liable for illegal recruitment?
1. Employees of a licensed recruitment agency may be held liable for illegal recruitment
as principal by direct participation, together with his employer, if it is shown that he
actively and consciously participated in illegal recruitment.
2. Good faith and merely following orders of superiors are not valid defenses of an
employee.
3. A manager of a recruitment/manning agency is not a mere employee. As such, he

receives job applications, interviews applicants and informs them of the agency’s
requirement of payment of performance or cash bond prior to the applicant’s
deployment. As the crewing manager, he was at the forefront of the company’s
recruitment activities.
THEORY OF IMPUTED KNOWLEDGE
What is meant by this theory?
Knowledge of the agent is deemed knowledge of the principal but not the other way
around.
The theory of imputed knowledge is a rule that any information material to the transaction,
either possessed by the agent at the time of the transaction or acquired by him before its
completion, is deemed to be the knowledge of the principal, at least insofar as the
transaction is concerned, even though the knowledge, in fact, is not communicated to the
principal at all.
Sunace International Management Services, Inc. v. NLRC2 - The High Court here has
the opportunity to discuss the application of the theory of imputed knowledge. The OFW
(Divina), a domestic helper in Taiwan, has extended her 12-month contract, after its
expiration, for two (2) more years after which she returned to the Philippines. It was
established by evidence that the extension was without the knowledge of the local recruitment
agency, petitioner Sunace. The Court of Appeals, however, affirmed the Labor Arbiter’s and
NLRC’s finding that Sunace knew of and impliedly consented to the extension of Divina’s 2-
year contract. It went on to state that “It is undisputed that [Sunace] was continually
communicating with [Divina’s] foreign employer.” It thus concluded that “[a]s agent of the
foreign principal, ‘petitioner cannot profess ignorance of such extension as obviously, the act
of the principal extending complainant (sic) employment contract necessarily bound it.’”
In finding that the application by the CA of this theory of imputed knowledge was misplaced,
the High Court ruled that this theory ascribes the knowledge of the agent, Sunace, to the
principal, employer Xiong, not the other way around. The knowledge of the principal-foreign
employer cannot, therefore, be imputed to its agent, Sunace. There being no substantial proof
that Sunace knew of and consented to be bound under the 2-year employment contract
extension, it cannot be said to be privy thereto. As such, Sunace and its owner cannot be held
solidarily liable for any of Divina’s claims arising from the 2-year employment extension. As
the New Civil Code provides: “Contracts take effect only between the parties, their assigns,
and heirs, except in case where the rights and obligations arising from the contract are not
transmissible by their nature, or by stipulation or by provision of law.”
PRE-TERMINATION OF CONTRACT OF MIGRANT WORKER
Can an OFW acquire regularity of employment?
No. The prevailing rule is that OFWs are contractual (fixed-term only), not regular,
employees. In fact, they can never attain regularity of employment.
What are some relevant principles?
1. Indefinite period of employment of OFWs is not valid as it contravenes the explicit

provision of the POEA Rules and Regulations on fixed-period employment.
2. OFWs do not become regular employees by reason of nature of work, that is, that they are
made to perform work that is usually necessary and desirable in the usual business or trade of
the employer. The exigencies of their work necessitate that they be employed on a contractual
basis. This notwithstanding the fact that they have rendered more than twenty (20) years of
service.
3. Regular employment does not result from the series of re-hiring of OFWs.
4. The fixed-period employment of OFWs is not discriminatory against them nor does it favor
foreign employers. It is for the mutual interest of both the seafarer and the employer why the
employment status must be contractual only or for a certain period of time. Seafarers spend
most of their time at sea and understandably, they cannot stay for a long and an indefinite
period of time at sea. Limited access to shore society during the employment will have an
adverse impact on the seafarer. The national, cultural and lingual diversity among the crew
during the contract of
What is the effect of non-deployment of OFW to overseas employment?

Petitioner-seafarer, in Santiago v. CF Sharp Crew Management, Inc.2 was not deployed
overseas despite the signing of a POEA-approved employment contract. One of his contentions
is that such failure to deploy was an act designed to prevent him from attaining the status of a
regular employee. The Supreme Court, however, disagreed and ruled that “seafarers are
considered contractual employees and cannot be considered as regular employees
under the Labor Code. Their employment is governed by the contracts they sign every time
they are rehired and their employment is terminated when the contract expires. The
exigencies of their work necessitate that they be employed on a contractual basis.”
What is doctrine of processual presumption?
“Presumed-identity approach” or “processual presumption” is an International Law doctrine

which dictates that where a foreign law is not pleaded or, even if pleaded, is not proved, the
presumption is that foreign law is the same as Philippine law. Thus, under this situation,
Philippine labor laws should apply in determining the issues presented in a case.
Is due process under Philippine law applicable to termination of employment of

OFWs?
Yes. In the absence of proof of applicable foreign law, OFWs are entitled to due process in
accordance with Philippine
laws.
Is the Agabon doctrine applicable to OFWs who are dismissed for cause but without
due process?
Yes. The Agabon doctrine of awarding indemnity in the form of nominal damages in cases of
valid termination for just or authorized cause but without procedural due process also applies
to termination of OFWs.
Who has the burden of proof to show that the dismissal of the OFW is legal?
Burden of proof devolves on both recruitment agency and its foreign principal.
Are OFWs entitled to the reliefs under the Labor Code?
No. They are not entitled to such reliefs under Article 279 as reinstatement or separation pay
in lieu of reinstatement or full backwages.
2015 BAR EXAMS
Prof. Joselito Guianan Chan
What are the reliefs to which OFWs are entitled?
They are entitled to the reliefs provided under Section 10 of R.A. No. 8042, as amended, to
wit: (1) All salaries for the unexpired portion of the contract;
(2) Full reimbursement of placement fees and deductions made with interest at twelve
percent (12%) per annum.
In other words, all the reliefs available to an illegally dismissed OFW are always monetary in
nature.
It must be noted that under the 2009 Serrano doctrine, (Antonio M. Serrano v. Gallant
Maritime Services, Inc.,),1 an illegally dismissed OFW is now entitled to all the salaries
for the entire unexpired portion of their employment contracts, irrespective of the
stipulated term or duration thereof. The underlined phrase in Section 10 below has been
declared unconstitutional in this case:
“In case of termination of overseas employment without just, valid or authorized cause as
defined by law or contract, or any unauthorized deductions from the migrant worker's salary,
the worker shall be entitled to the full reimbursement of his placement fee and the deductions
made with interest at twelve percent (12%) per annum, plus his salaries for the unexpired
portion of his employment contract or for three (3) months for every year of the
unexpired term, whichever is less.”
However, R.A. No. 10022 (March 8, 2010), which amended R.A. No. 8042 (Migrant Workers
rendered service in excess of the regular eight (8)
and Overseas Filipinos Act of 1995), has replicated and re-enacted the same unconstitutional
working
provision hours a day.
exactly as above quoted. The question is: was the unconstitutionality of the
above-underlined
4. In case of unau horizedpart of the
deduct ons provision cured
rom OFW’s salary, by be
he shall such replication
entitled or re-enactment
to the full reimbursement of the deductionsin
the amendatory law?
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made with interest at twelve percent (12%) per annum. This is in addition to the full reimbursement of his placement fee
with the same interest of twelve percent (12%) per annum plus his salaries for the unexpired portion of his employment
contract if he is terminated without just, valid or authorized cause as defined by law or contract.
The 2014 en banc case of Sameer Overseas Placement Agency, Inc. v. Joy C. Cabiles,2
answered this in the
negative. The said provision was thus declared still unconstitutional and null and void despite
its replication in R.A. No. . FOR DISABILITY AND DEATH BENEFITS OF OFWs
CLAIMS
Which/Who has jurisdiction over an OFW’s claims for disability and death benefits?
What are some principles in regard to monetary awards to OFWs?
1. Monetary award to OFW is not in the nature of separation pay or backwages but a form of
indemnity.
2. Only salaries are to be included in the computation of the amount due for the unexpired
portion of the contract. Overtime, holiday and leave pay and allowances are not included.
However, this rule on exclusion of allowance does not apply in case it is encapsulated in the
basic salary clause.
3. Entitlement to overtime pay of OFWs. - As far as entitlement to overtime pay is

concerned, the correct criterion in
determining whether or not sailors are entitled to overtime pay is not whether they were on
board and cannot leave ship beyond the regular eight (8) working hours a day, but whether
they actually rendered service in excess of said number of hours. An OFW is not entitled to
overtime pay, even if guaranteed, if he failed to present any evidence to prove that he
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t i f
a. The Labor Arbiters, NOT the SSS, have jurisdiction over claims for disability, death and
other benefits of OFWs. b. Labor Arbiters have jurisdiction even if the case is filed by the
heirs of the deceased OFW.
Is the Labor Code’s concept of permanent total disability similar to that of OFWs?
Yes. The concept of this kind of disability under Article 192 of the Labor Code is applicable to
them as reiterated lately in the 2013 case of Kestrel Shipping Co., Inc. v. Munar.
What are the requisites for compensability of injury or illness of seafarers?
1. It should be work-related; and
2. The injury or illness existed during the term of the seafarer’s employment contract.
DIRECT HIRING
What is direct hiring?
“Direct Hiring” refers to the process of directly hiring workers by employers for overseas
employment as authorized by the DOLE Secretary and processed by the POEA, including:
1. Those hired by international organizations;
2. Those hired by members of the diplomatic corps;
3. Name hires or workers who are able to secure overseas employment opportunity with an
employer without the assistance or participation of any agency.
Does the POEA Administrator or the DOLE Secretary or DOLE Regional Director have
the power to issue closure order?
Yes. If upon preliminary examination or surveillance, the DOLE Secretary, the POEA
Administrator or DOLE Regional Director is satisfied that such danger or exploitation exists, a
written order may be issued for the closure of the establishment being used for illegal
recruitment activity.
1 G.R. No. 167614, March 24, 2009.
2 G.R. No. 170139, Aug. 05, 2014. The foreign employer alleged in this case that
respondent’s dismissal was due to inefficiency in her work and negligence in her duties.
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Does the DOLE Secretary have the power to issue warrant of arrest and search and
seizure orders?
No. Salazar v. Achacoso,1 declared that the exercise by the DOLE Secretary of his twin powers
to issue arrest warrant and search and seizure orders provided under Article 38[c] of the Labor
Code is unconstitutional. Only regular courts can issue such orders.
REMITTANCE OF FOREIGN EXCHANGE EARNINGS
Is remittance of foreign exchange earnings by OFWs mandatory?
Yes. It shall be mandatory for all Filipino workers abroad to remit a portion of their foreign
exchange earnings to their families, dependents, and/or beneficiaries in the country in accordance
with rules and regulations prescribed by the DOLE Secretary. It should be made through the
Philippine banking system.
------------oOo------------
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1 G.R. No. 81510, March 14, 1990.
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ChanRobles Internet Bar Review : ChanRobles Professional Review, Inc.
TOPIC NO. 3 2015 BAR EXAMS
LABOR STANDARDS Prof. Joselito Guianan Chan
A.
HOURS OF WORK
1. COVERAGE/EXCLUSIONS (Article 82, Labor Code)
Who are covered by the labor standards provisions of the Labor Code?
Employees in all establishments, whether operated for profit or not, are covered by the law on
labor standards.
Who are excluded?
The following are excluded from the coverage of the law on labor standards:
a. Government employees;
b. Managerial employees;
c. Other officers or members of a managerial staff;
d. Domestic workers or kasambahay and persons in the personal service of another;
e. Workers paid by results;
f. Non-agricultural field personnel; and
g. Members of the family of the employer.
2.
NORMAL HOURS OF WORK
What is the total normal hours of work per day?
Eight (8)
What hours daily.
is overtime work?
Any work in excess of eight (8) hours is considered overtime work.
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“Flexible work arrangements” refer to alternative arrangements or schedules other than the
traditional or standard work hours, workdays and workweek. The effectivity and
implementation of any of the flexible work arrangements should be temporary in nature.
Under R.A. No. 8972, otherwise known as “The Solo Parents’ Welfare Act of 2000,” solo parents
are allowed to work on a flexible schedule. The phrase “flexible work schedule” is defined in the
same law as the right granted to a solo parent employee to vary his/her arrival and departure
time without affecting the core work hours as defined by the employer.
COMPRESSED WORK WEEK
What is compressed work week?
“Compressed Workweek” or “CWW” refers to a situation where the normal workweek is reduced
to less than six (6) days but the total number of work-hours of 48 hours per week remains. The
normal workday is increased to more than eight (8) hours but not to exceed twelve (12) hours,
without corresponding overtime premium. This concept can be adjusted accordingly in cases
where the normal workweek of the firm is five (5) days.
What are the conditions for its validity?
The CWW scheme is undertaken as a result of an express and voluntary agreement of

majority of the covered employees or their duly authorized representatives.
How should compensation be made under a valid CWW?
Unless there is a more favorable practice existing in the firm, work beyond eight (8) hours
will not be compensable by overtime premium provided the total number of hours
worked per day shall not exceed twelve (12) hours. In any case, any work performed
beyond twelve (12) hours a day or forty-eight (48) hours a week shall be subject to overtime
pay.
MEAL BREAK (Article 85, Labor Code)
What is the rule on time-off for regular meal?
Every employer is required to give his employees, regardless of sex, not less than one (1) hour
(or 60 minutes) time-off for regular meals.
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Is meal break compensable?
Being time-off, it is not compensable hours worked. In this case, the employee is free to do
anything he wants, except to work. If he is required, however, to work while eating, he should
be compensated therefor.
WAITING TIME
(Article 84, Labor Code)
• What is covered by compensable working hours?
The following shall be considered as compensable hours worked:
a. All time during which an employee is required to be on duty or to be at the employer’s

premises or to be at a
prescribed workplace; and
b. All time during which an employee is suffered or permitted to work.

basic hourly rate which includes 30% additional compensation as
• 93 [a]
When is waiting time of the Labor
compensable?
provided in Article
Waiting time spent by an employee shall be considered as working time if waiting is an
Code.
integral part of his work or the employee is required or engaged by the employer to wait.
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Time spentc. waiting for work
For overtime work is compensable
performed if it falls
on a rest day which is spent “primarily
on a special for thepaybenefit
day, the overtime of the
is plus 30%
employer andof[its] business.”
the basic hourly rate which includes 50% additional compensation as provided in Article 93 [c] of the
Labor Code.
d. For overtime work performed on a regular holiday, the overtime pay is plus 30% of the basic hourly
OVERTIME WORK,
rate whichOVERTIME PAY (Article
includes 100% additional 87,asLabor
compensation provided Code)
in Article 94 [b] of the Labor Code.
• What e.
areForsome basic
overtime principles
work performed on aon
restovertime work?
day which falls on a regular holiday, the overtime pay is plus
1. Work rendered after

30% of the basicnormal
hourly rateeight
which (8) hours
includes 160%ofadditional
work is called “overtime work.”
compensation.
2. In computing overtime work, "regular wage" or "basic salary" means "cash" wage only
without deduction for
facilities provided by the employer.
3. "Premium pay" means the additional compensation required by law for work performed
within eight (8) hours on non-working days, such as regular holidays, special holidays and
rest days.
4. "Overtime pay" means the additional compensation for work performed beyond eight (8)
hours.
5. Illustrations on how overtime is computed:
a. For overtime work performed on an ordinary day, the overtime pay is plus 25% of
the basic hourly rate. b. For overtime work performed on a rest day or on a special
day, the overtime pay is plus 30% of the
• What is the distinction between PREMIUM PAY and OVERTIME PAY?
“Premium pay” refers to the additional compensation required by law for work performed
within eight (8) hours on non-working days, such as rest days and regular and special
holidays.
“Overtime pay” refers to the additional compensation for work performed beyond eight (8)
hours a day. Every employee who is entitled to premium pay is likewise entitled to the benefit
of overtime pay.
• What is built-in overtime pay?
In case the employment contract stipulates that the compensation includes built-in overtime
pay and the same is duly approved by the DOLE, the non-payment by the employer of any
overtime pay for overtime work is justified and valid.
• What is emergency overtime work? (Article 89, Labor Code). a. General rule.
The general rule remains that no employee may be compelled to render overtime work
against his will.
b. Exceptions when employee may be compelled to render overtime work:
1. When the country is at war or when any other national or local emergency has been
declared by the National
Assembly or the Chief Executive;
2. When overtime work is necessary to prevent loss of life or property or in case of imminent
danger to public safety due to actual or impending emergency in the locality caused by serious
accident, fire, floods, typhoons, earthquake, epidemic or other disasters or calamities;
3. When there is urgent work to be performed on machines, installations or equipment, or in

order to avoid serious loss or damage to the employer or some other causes of similar nature;
4. When the work is necessary to prevent loss or damage to perishable goods;
5. When the completion or continuation of work started before the 8th hour is
necessary to prevent serious obstruction or prejudice to the business or operations of the
employer; and
6. When overtime work is necessary to avail of favorable weather or environmental conditions

where performance or quality of work is dependent thereon.
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May an employee validly refuse to render overtime work under any of the afore-said
circumstances?
No, When an employee refuses to render emergency overtime work under any of the foregoing
conditions, he may be dismissed on the ground of insubordination or willful disobedience of
the lawful order of the employer.
• Can overtime pay be waived?
NO. The right to claim overtime pay is not subject to a waiver. Such right is governed by law and
not merely by the agreement of the parties.
NIGHT WORK (R.A. NO. 10151),
NIGHT SHIFT DIFFERENTIAL (ARTICLE 86, LABOR CODE)
• What is the new law on night work?
R.A. No. 10151 [JUNE 21, 2011]. a. Significance of the law.
R.A. No. 10151 has repealed Article 130 [Nightwork Prohibition] and Article 131 [Exceptions] of
the Labor Code and accordingly renumbered the same articles. Additionally, it has inserted a new
Chapter V of Title III of Book III of the Labor Code entitled “Employment of Night Workers” which
addresses the issue on nightwork of all employees, including women workers. Chapter V covers
newly renumbered Articles 154 up to 161 of the Labor Code.
b. Coverage of the law.
The law on nightwork applies not only to women but to all persons, who shall be employed or
permitted or suffered to work at night, except those employed in agriculture, stock raising,
fishing, maritime transport and inland navigation, during a period of not less than seven (7)
consecutive hours, including the interval from midnight to five o'clock in the morning,
to be determined by the DOLE Secretary, after consulting the workers’ representatives/labor

organizations and employers.
c. Night worker, meaning.
"Night worker" means any employed person whose work covers the period from 10 o'clock in
the evening to 6 o'clock the following morning provided that the worker performs no less
than seven (7) consecutive hours of work.
NIGHT SHIFT DIFFERENTIAL PAY
•
How is it reckoned and computed?
Night shift differential is equivalent to 10% of employee's regular wage for each hour of work performed between 10:00
p.m. and 6:00 a.m. of the following day.
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What is the distinction between night shift differential: pay
www.chanroblesbar.com and overtime pay?
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When the work of an employee falls at night time, the receipt of overtime pay shall not preclude the right to receive
1. Where night shift (10 p.m. to 6 a.m.) work is regular work.
a. On an ordinary day: Plus 10% of the basic hourly rate or a total of 110% of the basic hourly
rate.
b. On a rest day, special day or regular holiday: Plus 10% of the regular hourly rate on a
rest day, special day or regular holiday or a total of 110% of the regular hourly rate.
2. Where night shift (10 p.m. to 6 a.m.) work is overtime work.
a. On an ordinary day: Plus 10% of the overtime hourly rate on an ordinary day or a total of
110% of the overtime hourly rate on an ordinary day.
b. On a rest day or special day or regular holiday: Plus 10% of the overtime hourly rate on
a rest day or special day or regular holiday.
3. For overtime work in the night shift. Since overtime work is not usually eight (8) hours,
the compensation for overtime night shift work is also computed on the basis of the hourly rate.
a. On an ordinary day. Plus 10% of 125% of basic hourly rate or a total of 110% of 125% of
basic hourly rate.
b. On a rest day or special day or regular holiday. Plus 10% of 130% of regular hourly rate
on said days or a total of 110% of 130% of the applicable regular hourly rate.
PART-TIME WORK
• What is part-time
work?
“Part-time work” is “a single, regular or voluntary form of employment with hours of work
substantially shorter than those considered as normal in the establishment.” A “part-time worker”
is an employed person whose normal hours of work are less than those of comparable full-time
workers.
Part-time work may take different forms depending on the agreed hours of work in a day, the
days of work in a week or other reference periods. In the Philippines, however, the two most
common and acceptable forms are four (4) hours work per day and weekend work or
two (2) full days per week.
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CONTRACT FOR PIECE WORK (SEE CIVIL CODE)
• What is contract for piece work under the Civil Code?
By the contract for a piece of work, the contractor binds himself to execute a piece of work for
the employer, in consideration of a certain price or compensation. The contractor may either
employ only his labor or skill, or also furnish t he material.
B. WAGES
WAGE VS. SALARY
• What is the basic distinction between wage and salary?
The term “wage” is used to characterize the compensation paid for manual skilled or
unskilled labor. “Salary,” on the other hand, is used to describe the compensation for higher
or superior level of employment.
render ed;
• What is the distinction in respect to execution, attachment or garnishment?

2. It is capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece or commission
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basis, or other method of calculating the same;
In cases of execution, attachment or garnishment of the compensation of an employee
received3. from
It is payable
workby an employerby
issued to anthe
employee
court under
toa written
satisfyor unwritten contract of employment for work
a judicially-determined done or to be a
obligation,
done or for services rendered or to be rendered; and
distinction should be made whether such compensation is considered “wage” or “salary.”
Under Article 1708the
4. It includes offairthe
and Civil Code,
reasonable value,if asconsidered
determined by a the“wage,” the employee’s
DOLE Secretary, of board, lodging,compensation
or other facilities
shall not becustomarily
subjectfurnished by the employer
to execution to the employee.
or attachment or “Fair and reasonable except
garnishment, value” shallfor
not include
debtsany profit to the
incurred for
food, shelter, clothing and medical attendance. If deemed a “salary,” such compensation is
employer or to any person affiliated with the employer.
not exempt from execution or attachment or garnishment. Thus, the salary, commission and
other remuneration received by a managerial employee (as distinguished from an ordinary
worker
• Whatoris laborer)
basic wage? cannot be considered wages. Salary is understood to relate to a position or
office, or the compensation given for official or other service; while wage is the compensation
for labor.
MINIMUM WAGE DEFINED
• What are the attributes of wage?
“Wage” has the following attributes:
1. It is the remuneration or earnings, however designated, for work done or to be done or

for services rendered or to be
“Basic wage” means all the remuneration or earnings paid by an employer to a worker for
services rendered on normal working days and hours but does not include cost-of-living
allowances, profit-sharing payments, premium payments,
13th month pay or other monetary benefits which are not considered as part of or integrated
into the regular salary of the workers.
Further, as held in Honda Phils., Inc. v. Samahan ng Malayang Manggagawa sa Honda,

the following should be excluded from the computation of “basic salary,” to wit:
payments for sick, vacation and maternity leaves, night differentials, regular
holiday pay and premiums for work done on rest days and special holidays.
• What is minimum wage?
The minimum wage rates prescribed by law shall be the basic cash wages without
deduction therefrom of whatever benefits, supplements or allowances which the employees
enjoy free of charge aside from the basic pay.
• What is statutory minimum wage?
The term “statutory minimum wage” refers simply to the lowest basic wage rate fixed by
law that an employer can pay his workers.
• What is regional minimum wage rate?
The term “regional minimum wage rates” refers to the lowest basic wage rates that an
employer can pay his workers, as fixed by the Regional Tripartite Wages and
Productivity Boards (RTWPBs), and which shall not be lower than the applicable statutory
minimum wage rates.
• What are included/excluded in the term “wage rate”?
The term "wage rates" includes cost-of-living allowances as fixed by the RTWPB, but
excludes other wage-related benefits such as overtime pay, bonuses, night shift differential
pay, holiday pay, premium pay, 13th month pay, premium pay, leave benefits, among
others.
• Can COLA be integrated into the minimum wage?
Yes. The cost-of-living allowance (COLA) may be ordered integrated into the minimum wage
by the Regional Tripartite
Wages and Productivity Board (“RTWPB” or “Regional Board”).
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• What is COLA?
COLA is not in the nature of an allowance intended to reimburse expenses incurred by

employees in the performance of their official functions. It is not payment in consideration of
the fulfillment of official duty. As defined, “cost of living” refers to “the level of prices
relating to a range of everyday items” or “the cost of purchasing the goods and services which
are included in an accepted standard level of consumption.” Based on this premise, COLA is a
benefit intended to cover increases in the cost of living.
• What is the “NO WORK, NO PAY” principle?
The “no work, no pay” or “fair day’s wage for fair day’s labor” means that if the worker
does not work, he is generally not entitled to any wage or pay. The exception is when it was
the employer who unduly prevented him from working despite his ableness, willingness and
readiness to work; or in cases where he is illegally locked out or illegally suspended or illegally
dismissed, or otherwise illegally prevented from working, in which event, he should be entitled
to his wage.
MINIMUM WAGE SETTING
• What is a Wage Order?
The term “Wage Order” refers to the order promulgated by the Regional Board pursuant to
its wage fixing authority.
When is(2)itCapacit
proper to issue a Wage Order? y to pay
Whenever conditions in the region so warrant, the Regional Board shall investigate and study
all pertinent facts and based on the prescribed standards and criteria, shall proceed to
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1) Fair return
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determine whether on capitalOrder
a Wage investedshould
and capacity
be toissued.
pay of employers;
Any such Wage Order shall take effect
after fifteen2)(15) days
Productivity. from its complete publication in at least one (1) newspaper of general
circulation in the region.
• What are the standards/criteria

(3) Comparable wages and incomes for minimum wage fixing?
1) Prevailing wage levels.

In the determination of regional minimum wages, the Regional Board shall, among other
relevant factors, consider the
(4) Requirements of economic and social development
followin
g:
(1) Needs of workers and their families
1) Demand for living wages;
2) Wage adjustment vis-à-vis the consumer price index;
3) Cost of living and changes therein;
4) Needs of workers and their families;
5) Improvements in standards of living.
1) Need to induce industries to invest in the countryside;
2) Effects on employment generation and family income;
3) Equitable distribution of income and wealth along the imperatives of economic and social
development.
• What are the methods of fixing the minimum wage rates?
There are two (2) methods, to wit:
1. “Floor-Wage” method which involves the fixing of a determinate amount to be added to

the prevailing statutory minimum wage rates. This was applied in earlier wage orders; and
2. “Salary-Cap” or “Salary-Ceiling” method where the wage adjustment is to be applied to

employees receiving a certain denominated salary ceiling. In other words, workers already
being paid more than the existing minimum
wage (up to a certain amount stated in the Wage Order) are also to be given a wage increase.
The “Salary-Cap” or “Salary-Ceiling” method is the preferred mode.
The distinction between the two (2) methods is best shown by way of an illustration. Under
the “Floor Wage Method,” it would be sufficient if the Wage Order simply set P15.00 as the
amount to be added to the prevailing statutory minimum wage rates; while in the “Salary-
Ceiling Method,” it would be sufficient if the Wage Order states a specific salary, such as
P250.00, and only those earning below it shall be entitled to the wage increase.
MINIMUM WAGE OF WORKERS PAID BY RESULTS
• What are the minimum wage rates of workers paid by results?
According to Article 124 of the Labor Code:
“All workers paid by results, including those who are paid on piecework, takay, pakyaw or
task basis, shall receive not less than the prescribed wage rates per eight (8) hours of work a
day, or a proportion thereof for working less than eight (8) hours.”
• Who are workers paid by results?
They are workers who are engaged on pakyao, piecework, task and other non-time work.
They are so called because they are paid not on the basis of the time spent on their work but
according to the quantity, quality or kind of job and the consequent results thereof.
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• What are the categories of workers paid by results?
Workers paid by results may be classified into:
a. Supervised workers; and b. Unsupervised workers.
As the term clearly connotes, supervised workers are those whose manner of work is under
the control of the employer; while unsupervised workers are those whose work is controlled
more in the results than in the manner or method of performing it.
The law does not make any categorical differentiation among the workers paid by results.
Thus, the workers may be on pakyao (sometimes spelled “pakyaw”), takay or piece-rate or
output basis. All of them are similar in character in that they are all paid on the basis of the
results of their work. When the law does not distinguish, we should not distinguish.
WAGE RATE OF APPRENTICES AND LEARNERS
• What is the wage rate of apprentices and learners?
The wage rate of a learner or an apprentice is set at seventy-five percent (75%) of the
statutory minimum wage.
and on the purpose for which the determination is being made. For instance, the
of commissions for
WAGE RATE OF PERSONS WITH DISABILITY (PWDs) rule on the inclusion
purposes of computing the separation pay may essentially differ from the inclusionary rule thereof for purposes of computing the
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•13th month
What pay.
is the wage rate of PWD?
• Is there a law which mandates the payment of commission?

Under R.A. No. 7277, the wage rate of PWDs had been increased to and fixed at 100% of the
1
None. According to Lagatic v. NLRC, there is no law which requires employers to pay commissions.
applicable minimum
wage.
• Is there a standard formula to compute commission?
None. There is no law which prescribes aCOMMISSIONS

method for computing commission. The determination of the amount of
commissions is the result of collective bargaining negotiations, individual employment contracts or established employer practice.
• What is
“commission”?
“Commission” is the recompense, compensation or reward of an employee, agent,

salesman, executor, trustee, receiver, factor, broker or bailee, when the same is calculated
as a percentage on the amount of his transactions or on the profit of the principal.
• Is commission part of wage?
Commission may or may not be considered part of wage/salary depending on the peculiar
circumstances of a case
DEDUCTIONS FROM WAGES
• May employer deduct from wage of employees?
The general rule is that an employer, by himself or through his representative, is prohibited
from making any deductions from the wages of his employees. The employer is not
allowed to make unnecessary deductions without the knowledge or authorization of the
employees.
• Are there exceptions to this rule?
Yes.
(a) In cases where the worker is insured with his consent by the employer, and the
deduction is to recompense the employer for the amount paid by him as premium on the
insurance;
(b) For union dues, in cases where the right of the worker or his union to check-off has
been recognized by the employer or authorized in writing by the individual worker concerned;
and
(c) In cases where the employer is authorized by law or regulations issued by the DOLE
Secretary.
(d) Deductions for loss or damage under Article 114 of the Labor Code;
(e) Deductions made for agency fees from non-union members who accept the benefits
under the CBA negotiated by the bargaining union. This form of deduction does not require
the written authorization of the non-bargaining union member concerned;
(f) Deductions for value of meal and other facilities;
(g) Deductions for premiums for SSS, PhilHealth, employees’ compensation and Pag-
IBIG; (h) Withholding tax mandated under the National Internal Revenue Code (NIRC);
(i) Withholding of wages because of the employee’s debt to the employer which is already
due;
1 G.R. No. 121004, Jan. 28, 1998.
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2015 BAR EXAMS
(j) Deductions made pursuant to a court judgment against the worker under
circumstances where the wages may be the subject of attachment or execution but only for
debts incurred for food, clothing, shelter and medical attendance;
(k) When deductions from wages are ordered by the court;
NON-DIMINUTION OF BENEFITS
• What is the applicability of the non-diminution rule in Article 100 of the Labor
Code?
Albeit Article 100 is clear that the principle of non-elimination and non-diminution of benefits
apply only to the benefits being enjoyed “at the time of the promulgation” of the Labor Code,
the Supreme Court has consistently cited Article 100 as being applicable even to benefits
granted after said promulgation. It has, in fact, been treated as the legal anchor for the
declaration of the invalidity of so many acts of employers deemed to have eliminated or
diminished the benefits of employees.
The 2014 case of Wesleyan University-Philippines v. Wesleyan University-

Philippines Faculty and Staff Association,1 succinctly pointed out that the Non-
Diminution Rule found in Article 100 of the Labor Code explicitly prohibits employers from
eliminating or reducing the benefits received by their
similar kind by reason employees.
of which, This
it gains the status of arule, however,
company policy thatapplies
can no lo
or withdrawn.
only if the benefit is based on any of the following: nger be disturbed
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(1) An of
reason
To ripen into a company practice that is demandable as a matter of right, the giving of the benefit should not be by
express policy;
a strict legal or contractual obligation but by reason of an act of liberality on the part of the employer.
(2) A written contract; or

• What are the criteria that may be used to determine existence of company practice?
(3) A company practice.
Since there is no hard and fast rule which may be used and applied in determining whether a certain act of the
There ismay
employer notbemuch
considered as having ripened
controversy into abenefit
if the practice, involved
the followingiscriteria may be used
provided to determine
for under Nos.whether
1 andan act2
has ripened
above. into a if
Thus, company
it is practice:
expressly laid down in a written policy unilaterally promulgated by the
employer, the employer is duty-bound to adhere and comply by its own policy. It cannot be
allowed to renege from its commitment as expressed in the policy.
If the benefit is granted under a written contract such as an employment contract or a

collective bargaining agreement
(CBA), the employer is likewise under legal compulsion to so comply therewith.
On No. 3 above, please see discussion below.
COMPANY PRACTICE
• What is company
practice?
Company practice is a custom or habit shown by an employer’s repeated, habitual customary

or succession of acts of
(1) The act of the employer has been done for a considerable period of time; (2) The act
should be done consistently and intentionally; and
(3) The act should not be a product of erroneous interpretation or construction of a doubtful
or difficult question of law or provision in the CBA.
(See the 2013 case of Vergara, Jr. v. Coca-Cola Bottlers Philippines, Inc.2)
1. THE ACT OF THE EMPLOYER HAS BEEN DONE FOR A CONSIDERABLE PERIOD OF
TIME.
If done only once as in the case of Philippine Appliance Corporation (Philacor) v. CA,3
where the CBA signing bonus was granted only once during the 1997 CBA negotiation, the
same cannot be considered as having ripened into a company practice.
In the following cases, the act of the employer was declared company practice because of the
considerable period of time it has been practiced:
(a) Davao Fruits Corporation v. Associated Labor Unions.4 - The act of the company of
freely and continuously including in the computation of the 13th month pay, items that were
expressly excluded by law has lasted for six (6) years, hence, was considered indicative of
company practice.
(b) Sevilla Trading Company v. A. V. A. Semana.5 - The act of including non-basic

benefits such as paid leaves for unused sick leave and vacation leave in the computation of
the employees’ 13th month pay for at least two (2) years was considered a company
practice.
(c) The 2010 case of Central Azucarera de Tarlac v. Central Azucarera de Tarlac
Labor Union-NLU,6 also ruled as company practice the act of petitioner of granting for thirty
(30) years, its workers the mandatory 13th month pay computed in accordance with the
following formula: Total Basic Annual Salary divided by twelve (12) and Including in the
computation of the Total Basic Annual Salary the following: basic monthly salary; first eight
1 G.R. No. 181806, March 12, 2014.
2 G.R. No. 176985, April 1, 2013; See also Supreme Steel Corporation v. Nagkakaisang
Manggagawa ng Supreme Independent Union (NMS-IND-APL), G.R. No.
185556, March 28, 2011, 646 SCRA 501, 527; TSPIC Corporation v. TSPIC Employees Union
(FFW), G.R. No. 163419, Feb. 13, 2008, 545 SCRA 215, 226.
3 G.R. No. 149434, June 3, 2004.
4 G.R. No. 85073, Aug. 24, 1993, 225 SCRA 562.
5 G.R. No. 152456, April 28, 2004, 438 SCRA 239.
6 G.R. No. 188949, July 26, 2010.
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2015 BAR EXAMS
(8) hours overtime pay on Sunday and legal/special holiday; night premium pay; and vacation
and sick leaves for each year.
2. THE ACT SHOULD BE DONE CONSISTENTLY AND INTENTIONALLY.
The following cases may be cited to illustrate this principle:
(a) Tiangco v. Leogardo, Jr.,1 where the employer has consistently been granting
fixed monthly emergency allowance to the employees from November, 1976 but discontinued
this practice effective February, 1980 insofar as non-working days are concerned based on the
principle of “no work, no pay.” The Supreme Court ruled that the discontinuance of said
benefit contravened Article 100 of the Labor Code which prohibits the diminution of existing
benefits.
3. THE ACT SHOULD NOT BE A PRODUCT OF ERRONEOUS INTERPRETATION OR

CONSTRUCTION OF A DOUBTFUL OR DIFFICULT QUESTION OF LAW OR PROVISION
IN THE CBA.
The general rule is that if it is a past error that is being corrected, no vested right may be said
to have arisen therefrom nor any diminution of benefit may have resulted by virtue of the
correction thereof. The error, however, must be corrected immediately after its discovery;
otherwise, the rule on non-diminution of benefits would still apply.
The following cases would illuminate this principle:
(a) Globe Mackay Cable and Radio Corporation v. NLRC,2 where the Supreme Court
ruled on the proper computation of the cost-of-living allowance (COLA) for monthly-paid
employees. Petitioner corporation, pursuant to Wage Order No. 6 (effective October 30,
1984), increased the COLA of its monthly-paid employees by multiplying the P3.00 daily COLA
by 22 days which is the number of working days in the company. The union disagreed with
the computation, claiming that the daily COLA rate of P3.00 should be multiplied by 30 days
which has been the practice of the company for several years. The Supreme Court, however,
upheld the contention of the petitioner corporation. It held that the grant by the employer of
benefits through an erroneous application of the law due to absence of clear administrative
guidelines is not considered a voluntary act which cannot be unilaterally discontinued.
(b) TSPIC Corp. v. TSPIC Employees Union [FFW],3 where the Supreme Court reiterated
the rule enunciated in
Globe-Mackay, that an erroneously granted benefit may be withdrawn without violating the
prohibition against non-diminution of benefits. No vested right accrued to individual
respondents when TSPIC corrected its error by crediting the salary increase for the year 2001
against the salary increase granted under Wage Order No. 8, all in accordance with the CBA.
Hence, any amount given to the employees in excess of what they were entitled to, as
• What is the rule on its demandability and enforceability?
Bonus, as a general rule, is an amount granted and paid ex gratia to the employee.
It cannot be forced upon the employer who may not be obliged to assume the onerous burden
of granting bonuses or other benefits aside from the employees’ basic salaries or wages. If
there is no profit, there should be no bonus. If profit is reduced, bonus should likewise be
reduced, absent any agreement making such bonus part of the compensation of the
employees.
• When is bonus demandable and enforceable?
It becomes demandable and enforceable:
(1) If it has ripened into a company practice;
(2) If it is granted as an additional compensation which the employer agreed to give

without any condition such as success of business or more efficient or more productive
operation, hence, it is deemed part of wage or salary.
(3) When considered as part of the compensation and therefore demandable and
enforceable, the amount is usually fixed. If the amount thereof is dependent upon the
realization of profits, the bonus is not demandable and
compu ted above, may be legally deducted by TSPIC from the
enforceable.employe
es’ salaries.
FACILITIES VS. SUPPLEMENTS
But if the error does not proceed from the interpretation or construction of a law or a provision in the CBA, the same
Bar
may ripen into a company practice.
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Example:
• What are
facilities? 4
(a) Hinatuan Mining Corporation and/or the Manager v. NLRC, where the act of the employer in granting
separation pay to resigning employees, despite the fact that the Labor Code does not grant it, was considered an
established employer practice.
The term “facilities” includes articles or services for the benefit of the employee or his
family but does not include tools of the trade or articles or services primarily for the benefit of
BONUS
the employer or necessary to the conduct of the employer’s business. They are items of
expense necessary for the laborer’s and his family’s existence and subsistence which form
part of the wage and when furnished by the employer, are deductible therefrom, since if they
are not so furnished, the laborer would spend and pay for them just the same.
1 G.R. No. L-57636, May 16, 1983, 122 SCRA 267; 207 Phil. 2235.
2 G.R. No. 74156, June 29, 1988, 163 SCRA 71.
3 G.R. No. 163419, Feb. 13, 2008.
4 G.R. No. 117394, Feb. 21, 1997.
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2015 BAR EXAMS
• What are supplements?
The term “supplements” means extra remuneration or special privileges or benefits given to
or received by the laborers over and above their ordinary earnings or wages.
• What are the distinctions between facilities and supplements?
The benefit or privilege given to the employee which constitutes an extra remuneration over
and above his basic or ordinary earning or wage is supplement; and when said benefit or
privilege is made part of the laborer’s basic wage, it is a facility. The criterion is not so much
with the kind of the benefit or item (food, lodging, bonus or sick leave) given but its purpose.
Thus, free meals supplied by the ship operator to crew members, out of necessity, cannot be
considered as facilities but supplements which could not be reduced having been given not as
part of wages but as a necessary matter in the maintenance of the health and efficiency of the
crew during the voyage.
• What is the rule on deductibility of facilities and supplements?
Facilities are deductible from wage but not supplements.
WAGE DISTORTION/RECTIFICATION
•thereWhat
exists a is
wage distor distortion?
wage tion. xxx. The concept of wage distortion assumes an
existing grouping or classification of employees which establishes distinctions among such employees on some relevant or
legitimate basis. This classification is reflected in a
“Wage distortion” contemplates a situation where an increase in prescribed wage rates results
indiffering
either wage
of rate
thefor
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each of the existing classes of employees.
following:
Bar
• What are the elements of wage distortion?
1. Elimination of the quantitative differences in the rates of wages or salaries; or
2. Severe contraction of intentional quantitative differences in wage or salary rates between

The four (4) elements of wage distortion are as follows:
and among employee groups in an establishment as to effectively obliterate the distinctions
embodied in such wage structure based on the following criteria:
(1) An existing hierarchy of positions with corresponding salary rates;
a. Skills;
(2) A significant change in the salary rate of a lower pay class without a concomitant increase in the salary rate of
b. Length of service;
a higher one; or
c. Other logical bases of differentiation.
Wage distortion presupposes a classification of positions and ranking of these positions at

various levels. One visualizes a hierarchy of positions with corresponding ranks basically in
terms of wages and other emoluments. Where a significant change occurs at the lowest level
of positions in terms of basic wage without a corresponding change in the other level in the
hierarchy of positions, negating as a result thereof the distinction between one level of
position from the next higher level, and resulting in a parity between the lowest level and the
next higher level or rank, between new entrants and old hires,
(3) The elimination of the distinction between the two levels; and
(4) The existence of the distortion in the same region of the country.
Normally, a company has a wage structure or method of determining the wages of its
employees. In a problem dealing with “wage distortion,” the basic assumption is that there
exists a grouping or classification of employees that establishes distinctions among them on
some relevant or legitimate bases.
Involved in the classification of employees are various factors such as the degrees of
responsibility, the skills and knowledge required, the complexity of the job, or other
logical basis of differentiation. The differing wage rate for each of the existing classes of
employees reflects this classification.
• What is the formula for rectifying or resolving wage distortion?
Following is the formula for the correction of wage distortion in the pay scale structures:
Minimum Wage = % x Prescribed Increase = Distortion Adjustment
Actual Salary
The above formula was held to be just and equitable.
DIVISOR TO DETERMINE DAILY RATE
• Who is a monthly-paid employee?
A “monthly-paid employee” is one who is paid his wage or salary for every day of the
month, including unworked rest days, special days or regular holidays.
• Who is a daily-paid employee?
A “daily-paid employee” is one who is paid his wage or salary only on the days he actually
worked, except in cases of regular holidays wherein he is paid his wage or salary even if he
does not work during those days, provided that he is present or on leave of absence with pay
on the working day immediately preceding the regular holidays.
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2015 BAR EXAMS
• What are the factors/divisors in computing benefits and wage deductions?
Equivalent daily rate (EDR), the basis for deductions for absences and for computing overtime pay
and other benefits.
Monthly Rate x 12
No. of Days Considered = Equivalent Daily Rate (EDR) Paid in a Year
REST PERIODS
1.
WEEKLY REST DAY
• What is the duration of weekly rest period?
It shall be the duty of every employer, whether operating for profit or not, to provide each of his
employees a rest period of not less than twenty-four (24) consecutive hours after every six
(6) consecutive normal work days.
Is the employer’s prerogative to determine the rest period of its employees subject to
limitations?
Yes. The employer shall determine and schedule the weekly rest day of his employees subject to
CBA and to such rules and regulations as the DOLE Secretary may provide. However, the
employer shall respect the preference of employees as to their weekly rest day when such
preference is based on religious grounds.
2.
EMERGENCY REST DAY WORK
• When can an employer require work on a rest day?
The employer may require any of its employees to work on their scheduled rest day for the
duration of the following emergency and exceptional conditions:
a. In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon,
earthquake, epidemic or other disaster or calamity, to prevent loss of life and property, or in case
of force majeure or imminent danger to public safety;
b. In case of urgent work to be performed on machineries, equipment, or installations, to avoid

serious loss which the
employe r would otherwise suffer;
c. In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be
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expected to resort to other measures;
d. To prevent serious loss of perishable goods;
HOLIDAY PAY/PREMIUM PAY
1.
COVERAGE, EXCLUSIONS
• Who are covered by the law on holiday pay?
Generally, all employees are entitled to and covered by the law on holiday pay.
• Who are excluded from its coverage?
The following are excluded:
a. Those of the government and any of the political subdivisions, including government-
owned and controlled corporations;
b. Those of retail and service establishments regularly employing less than ten (10) workers;
c. Domestic workers or Kasambahays;
d. Persons in the personal service of another;
e. Managerial employees as defined in Book III of the Labor Code;
f. Field personnel and other employees whose time and performance is unsupervised by the
employer;
g. Those who are engaged on task or contract basis or purely commission basis;
h. Those who are paid a fixed amount for performing work irrespective of the time consumed in
the performance thereof;
i. Other officers and members of the managerial staff;
j. Members of the family of the employer who are dependent on him for support.
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2015 BAR EXAMS
What are REGULAR and SPECIAL HOLIDAYS?
A. Regular Holidays
New Year’s Day - 1 January

Araw ng- 9 (Wednesday)
April (Wednesday)
Maundy
Kagitingan - 17 April
Good Friday
Thursday - 18 April
Labor Day - 1 May (Thursday)
Independence - 12 June (Thursday)
National
Day Heroes- 25 August (Last
Day August)
Monday of
Bonifacio Day - 30 November
Christmas Day - 25 December
(Sunday)
Rizal Day - 30 December
(Thursday)
(Tuesday)
B. Special (Non-Working) Days
Chinese New- 31 January (Friday)

Year
Black Saturday - 19 April
Ninoy Aquino- 21 August
All
DaySaints Day - 1 November
(Thursday)
(Saturday)
C. Special Holiday (for all schools)
EDSA Revolution
Anniversary
The total nu – 25 February (Tuesday)
mber of regular holidays is twelve (12) days per year. This is
imp ortant for purposes of reckoning certain divisors and computation of employee benefits.
Not included in the enumeration above on regular holidays are (1) Eid’l Fitr and (2) Eidul
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Adha. The reason is that proclamations declaring the observance of these national holidays
are Bar
• issued after the
What is premium approximate
pay for holidays and restdates
days? of the Islamic holidays have been determined in
accordance with the Islamic calendar (Hijra) or the lunar calendar, or upon Islamic
astronomical calculations, whichever is possible or convenient. To this end, the National
Commission “Premium pay” refersFilipinos
on Muslim to the additional
(NCMF) compensation requiredthe
shall inform by law to be paid
Office for work
of the performedon
President within the regular
which days
eight (8) hours on non-working days,
the holidays shall respectively fall. such as rest days, regular and special holidays.
• How is premium pay for holidays computed?

• What is the total number of regular holidays?
a. Regular Holidays
• If the employee did not work, he/she shall be paid 100 % of his/her salary for that day.
Computation: (Daily rate + Cost of Living Allowance) x 100%. The COLA is included in the
computation of holiday pay.
• If the employee worked, he/she shall be paid 200 % of his/her regular salary for that day
for the first eight hours. Computation: (Daily rate + COLA) x 200%. The COLA is also
included in computation of holiday pay.
• If the employee worked in excess of eight hours (overtime work), he/she shall be paid an
additional 30 percent of his/her hourly rate on said day. Computation: Hourly rate of the basic
daily wage x 200% x 130% x number of hours worked.
• If the employee worked during a regular holiday that also falls on his/her rest day, he/she
shall be paid an additional 30 % of his/her daily rate of 200 %. Computation: (Daily rate +
COLA) x 200%] + (30% [Daily rate x
200%)].
• If the employee worked in excess of eight hours (overtime work) during a regular holiday
that also falls on his/her rest day, he/she shall be paid an additional 30 % of his/her hourly
rate on said day. Computation: (Hourly rate of the basic daily wage x 200% x 130% x 130%
x number of hours worked);
b. Special (Non-Working) Days
• If the employee did not work, the “no work, no pay” principle shall apply, unless there is
a favorable company policy, practice, or CBA granting payment on a special day.
• If the employee worked, he/she shall be paid an additional 30 % of his/her daily rate on the
first eight hours of work. Computation: [(Daily rate x 130%) + COLA).
• If the employee worked in excess of eight hours (overtime work), he/she shall be paid an
additional 30 % of his/her hourly rate on said day. Computation: (Hourly rate of the basic
daily wage x 130% x 130% x number of hours worked).
• If the employee worked during a special day that also falls on his/her rest day, he/she shall
be paid an additional
50% of his/her daily rate on the first eight hours of work. Computation: [(Daily rate x 150%)
+ COLA].
• If the employee worked in excess of eight hours (overtime work) during a special day that
also falls on his/her rest day, he/she shall be paid an additional 30 % of his/her hourly rate on
said day. Computation: (Hourly rate of the basic daily wage x 150% x 130% x number of
hours worked).
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2015 BAR EXAMS
c. Special Holiday for all schools
For private establishments, 25 February 2014 is an ordinary workday and no premium is

required to be paid for work on said day.
On the other hand, employees in private schools, whether academic or administrative

personnel, shall be paid in accordance with the rules for pay on special (non-working) days as
stated above.
What are the effects of absences on the computation of holiday pay?
1. Employees on leave of absence with pay - entitled to holiday pay when they are on
leave of absence with pay.
2. Employees on leave of absence without pay on the day immediately preceding the
regular holiday - may not be paid the required holiday pay if they have not worked on such
regular holiday.
3. Employees on leave while on SSS or employee’s compensation benefits -

Employers should grant the same percentage of the holiday pay as the benefit granted by
competent authority in the form of employee’s compensation or social security payment,
whichever is higher, if they are not reporting for work while on such benefits.
4. When day preceding regular holiday is a non-working day or scheduled rest day -
should not be deemed to be on leave of absence on that day, in which case, employees are
entitled to the regular holiday pay if they worked on the day immediately preceding the non-
working day or rest day.
2.
off or shortened for the hours they are supposed to have taught, whether extensions
HOLIDAY PAY/PREMIUM PAY OF TEACHERS, PIECE WORKERS, TAKAY, SEASONAL
of class days be ordered or not; and in case
WORKERS, SEAFARERS
of extensions, said faculty members shall likewise be paid their hourly rates should they teach during said extensions.
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Are piece-workers, takay and others paid by results entitled to holiday pay?
Are private school teachers entitled to holiday pay during semestral vacations?
What about Christmas
Yes. Where vacation”
a covered employee is paid by results or output such as payment on piece-work, his holiday pay should
not be less than his average daily earnings for the last seven (7) actual working days preceding the regular holiday. In no
No, as far as regular holidays during semestral vacations are concerned.
case, however, should the holiday pay be less than the applicable statutory minimum wage rate.
Yes, as far as regular holidays during Christmas vacation are concerned.
Whathourly-paid
Are are the distinctions between “supervised”
teachers entitled to andholiday
“unsupervised”
pay?workers paid by results to determine their
entitlement to holiday pay?
A school is exempted from paying hourly-paid faculty members their pay for regular
holidays, whether the same be during the regular semesters of the school year or during
semestral, Christmas, or Holy Week vacations. However, it is liable to pay the faculty
members their regular hourly rate on days declared as special holidays or if, for some reason,
classes are called
The principal test to determine entitlement to holiday pay is whether the employees’ time and
performance of the work are “supervised” or “unsupervised” by their employer. If
supervised, the employee is entitled to holiday pay. If unsupervised, he is not.
The distinctions between supervised and unsupervised workers paid by results are as follows:
(1) Those whose time and performance are supervised by the employer. Here, there is an
element of control and supervision over the manner as to how the work is to be performed. A
piece-rate worker belongs to this category especially if he performs his work in the company
premises; and
(2) Those whose time and performance are unsupervised. Here, the employer’s control is
over the result of the work. Workers on pakyao and takay basis belong to this group. Both
classes of workers are paid per unit accomplished. Piece-rate payment is generally practiced in
garment factories where work is done in the company premises, while payment on pakyao
and takay basis is commonly observed in the agricultural industry, such as in sugar
plantations where the work is performed in bulk or in volumes, hence, difficult to quantify.
Are seasonal workers entitled to holiday pay?
Yes. Seasonal workers are entitled to holiday pay while working during the season. They may
not be paid the required regular holiday pay during off-season where they are not at work.
Are seafarers entitled to holiday pay?
Yes. Any hours of work or duty including hours of watchkeeping performed by the seafarer on
designated rest days and holidays shall be paid rest day or holiday pay.
• What are important principles on holiday pay?
In case of two (2) regular holidays falling on the same day, the worker should be
compensated as follows:
o If unworked – 200% for the two regular holidays;
o If worked – 200% for the two regular holidays plus premium of 100% for work on that day.
“Monthly-paid” employees are not excluded from the coverage of holiday pay.
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2015 BAR EXAMS
LEAVES
1.
SERVICE INCENTIVE LEAVE
• What is service
incentive leave?
Every covered employee who has rendered at least one (1) year of service is entitled to a
yearly service incentive leave of five (5) days with pay.
The term “at least one year of service” should mean service within twelve (12) months,
whether continuous or broken, reckoned from the date the employee started working,
including authorized absences and paid regular holidays, unless the number of working days in
the establishment as a matter of practice or policy, or that provided in the employment
contract, is less than twelve (12) months, in which case, said period should be considered as
one (1) year for the purpose of determining entitlement to the service incentive leave benefit.
• Who are excluded from its coverage?
All employees are covered by the rule on service incentive leave except:
a. Those of the government and any of its political subdivisions, including

government-owned and controlled corporations;
b. Domestic workers or kasambahays;
c. Persons in the personal service of another;
d. Managerial employees as defined in Book III of the Labor Code;
e. Field personnel and other employees whose performance is unsupervised by the employer;
f. Those who are engaged on task or contract basis, purely commission basis, or those who
are paid in a fixed amount for performing work irrespective of the time consumed in the
performance thereof;
g. Those who are already enjoying the benefit provided in the law;
h. Those enjoying vacation leave with pay of at least five (5) days;
i. Those employed in establishments regularly employing less than ten (10) employees;
j. Other officers and members of the managerial staff; and
k. Members of the family of the employer who are dependent on him for support.
• Are unavailed service incentive leaves commutable to cash?
60 days – for normal delivery
78 days – for caesarian delivery
• What is the amount granted?
Daily maternity benefit equivalent to one hundred percent (100%) of her average daily
salary credit for sixty (60) days or seventy-eight (78) days in case of caesarian delivery/
Yes. The ser vice incentive leave is commutable to its money equivalent if n
at the end of the year.
ot used or exhausted
• What is the number of delivery or miscarriage covered?

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2. MATERNITY
LEAVE
The maternity benefits shall be paid only for the first four (4) deliveries or
miscarriages/
• What is maternity leave?
“Maternity leave” is the period of time which may be availed of by a woman employee, married or unmarried, to
•undergo
Is an unmarried
and recuperate woman miscarriage
from childbirth, entitled ortocomplete
maternity leave
abortion duringbenefit?
which she is permitted to retain her rights
and benefits flowing from her employment.
Yes. For as long as a woman is pregnant, she is entitled to maternity leave benefit regardless
of What is the period of leave?
whether she is married or unmarried.
PATERNITY LEAVE
• What is paternity
leave benefit?
“Paternity leave” covers a married male employee allowing him not to report for work for
seven (7) calendar days but continues to earn the compensation therefor, on the condition
that his spouse has delivered a child or suffered miscarriage for purposes of enabling him to
effectively lend support to his wife in her period of recovery and/or in the nursing of the
newly- born child.
“Delivery” includes childbirth or any miscarriage.
“Spouse” refers to the lawful wife. For this purpose, “lawful wife” refers to a woman who
is legally married to the male employee concerned.
“Cohabiting” refers to the obligation of the husband and wife to live together.
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2015 BAR EXAMS
• What is the covered total number of deliveries?
Every married employee in the private and public sectors is entitled to a paternity leave of seven
(7) calendar days with full pay for the first four (4) deliveries of the legitimate spouse with
whom he is cohabiting.
Paternity leave benefits are granted to the qualified employee after the delivery by his wife,
without prejudice to an employer allowing an employee to avail of the benefit before or during
the delivery, provided that the total number of days should not exceed seven (7) calendar days for
each delivery.
Is an unavailed paternity leave benefit convertible to cash?
No. In the event that the paternity leave benefit is not availed of, said leave shall not be
convertible to cash.
PARENTAL LEAVE (R.A. No. 8972)
• What is parental leave?
“Parental leave” is the leave benefit granted to a male or female solo parent to enable him/her
to perform parental duties and responsibilities where physical presence is required.
• How many days may be availed of as parental leave?
The parental leave shall not be more than seven (7) working days every year to a solo parent
who has rendered service of at least one (1) year, to enable him/her to perform parental duties
and responsibilities where his/her physical presence is required. This leave shall be non-
cumulative.
It bears noting that this leave privilege is an additional leave benefit which is separate and distinct
from any other leave benefits provided under existing laws or agreements.
• Who is a solo parent?
The term "solo parent" refers to any individual who falls under any of the following categories:
(1) A woman who gives birth as a result of rape and other crimes against chastity even without a
final conviction of the offender: Provided, That the mother keeps and raises the child;
for a cr iminal conviction for at least one (1) year;

(2) Parent left solo or alone with the responsibility of parenthood due to death of spouse;
(3) Parent left solo or alone with the responsibility of parenthood while the spouse is detained or
is serving sentence
(8) Unmarried mother/father who has preferred to keep and rear her/his child/children instead of
having others care for them or give them up to a welfare institution;
(9) Any other person who solely provides parental care and support to a child or children;
(10) Any family member who assumes the responsibility of head of family as a result of the
death, abandonment, disappearance or prolonged absence of the parents or solo parent.
• What is the effect of change of status of the solo parent?
A change in the status or circumstance of the parent claiming benefits under this Act, such that
he/she is no longer left alone with the responsibility of parenthood, shall terminate his/her
eligibility for these benefits.
• Who are considered children under this law?
"Children" refer to those living with and dependent upon the solo parent for support who are
unmarried, unemployed and not more than eighteen (18) years of age, or even over eighteen (18)
years but are incapable of self -support because of mental and/or physical defect/disability.
• Is an unavailed parental leave convertible to cash?
No. In the event that the parental leave is not availed of, said leave shall not be convertible to
cash unless specifically agreed upon previously.
LEAVE FOR VICTIMS OF VIOLENCE AGAINST WOMEN AND

CHILDREN (R.A. No. 9262)
• What is this kind of

leave?
This special leave is granted to a woman employee who is a victim under this law. It is for a total
of ten (10) days of paid leave of absence, in addition to other paid leaves under the law. It is
extendible when the necessity arises as specified in the protection order. Its purpose is to enable
the woman employee to attend to the medical and legal concerns relative to said law. This
leave is not convertible to cash.
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2015 BAR EXAMS
• What is the requirement for its entitlement?
At any time during the application of any protection order, investigation, prosecution and/or
trial of the criminal case, a victim of Violence Against Women and their Children (VAWC) who
is employed shall be entitled to said paid leave of up to ten (10) days. The Punong
Barangay/kagawad or prosecutor or the Clerk of Court, as the case may be, shall issue a
certification at no cost to the woman that such an action is pending, and this is all that is
required for the employer to comply with the 10- day paid leave.
SPECIAL LEAVE BENEFIT FOR WOMEN
• What is this special leave benefit [GYNECOLOGICAL SURGERY LEAVE]?
A special leave benefit for women was granted under R.A. No. 9710, otherwise known as “The
Magna Carta of Women” [August 14, 2009]. Thus, any female employee in the public and
private sector regardless of age and civil status shall be entitled to a special leave of two (2)
months with full pay based on her gross monthly compensation subject to existing laws,
rules and regulations due to surgery caused by gynecological disorders under the
following terms and conditions:
SERVICE CHARGE
1. She has rendered at least six (6) months continuous aggregate employment service for the
last
• twelve
What are(12) months
the kinds prior to surgery;
of establishment covered by the law on service charge?
2. In the event that an extended leave is necessary, the female employee may use her earned Bar
leave credits; ChanRobles
and
The rules on service charge apply only to establishments collecting service charges, such as hotels, restaurants,
lodging houses, night clubs, cocktail lounges, massage clinics, bars, casinos and gambling houses, and similar enterprises,
3.including
This special leave
those entities shallprimarily
operating be non-cumulative
as private subsidiariesand
of thenon-convertible
government. to cash.
• Who are the employees

“Gynecological coveredrefer
disorders” by thisto
law?
disorders that would require surgical procedures such as,
but not limited to, dilatation and curettage and those involving female reproductive organs
such as the vagina, cervix, uterus, fallopian tubes, ovaries, breast, adnexa and pelvic floor, as
The same rules on service charges apply to all employees of covered employers, regardless of their positions,
certified by a competent physician. Gynecological surgeries shall also include hysterectomy,
designations or employment status, and irrespective of the method by which their wages are paid except those receiving more
ovariectomy, and mastectomy.
• Is this leave similar to maternity leave?
No. This leave should be distinguished from maternity leave benefit, a separate and distinct
benefit, which may be availed of in case of childbirth, miscarriage or complete abortion.
A woman, therefore, may avail of this special leave benefit in case she undergoes surgery
caused by gynecological disorder and at the same time maternity benefit as these two leaves
are not mutually exclusive.
than P2,000.00 a month.
• Who are not covered?
Specifically excluded from coverage are employees who are receiving wages of more than
P2,000.00 a month. However, it must be pointed out that the P2,000.00 ceiling is no longer
realistic considering the applicable minimum wages prevailing in the country. Hence, it must
be disregarded.
• How is the service charge distributed?
a. Percentage of sharing.
All service charges collected by covered employers are required to be distributed at the
following rates:
1. 85% to be distributed equally among the covered employees; and
2. 15% to management to answer for losses and breakages and distribution to employees
receiving more than
P2,000.00 a month, at the discretion of the management.
b. Frequency of distribution.
The share of the employees referred to above should be distributed and paid to them not less
often than once every two (2) weeks or twice a month at intervals not exceeding sixteen (16)
days.
• Can the service charge be integrated into the wages of covered employees?
Yes. In case the service charge is abolished, the share of covered employees should be
considered integrated in their wages, in accordance with Article 96 of the Labor Code. The
basis of the amount to be integrated is the average monthly share of each employee for the
past twelve (12) months immediately preceding the abolition or withdrawal of such charges.
What are some principles on service charge?
Tips and services charges are two different things. Tips are given by customers voluntarily to
waiters and other people who serve them out of recognition of satisfactory or excellent
service. There is no compulsion to give tips under the law. The
same may not be said of service charges which are considered integral part of the cost of the
food, goods or services
ordered by the customers.
Service charges are not in the nature of profit share and, therefore, cannot be
deducted from wage.
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2015 BAR EXAMS
THIRTEENTH MONTH PAY
Who are covered by the 13th month pay law?
Only rank-and-file employees, regardless of their designation or employment status and

irrespective of the method by which their wages are paid, are entitled to the 13th month pay
benefit. Managerial employees are not entitled to 13th month pay.
What is the minimum period of service required in a calendar year to be entitled to

13th month pay?
To be entitled to the 13th month pay benefit, it is imposed as a minimum service requirement
that the employee should have worked for at least one (1) month during a calendar year.
When should 13th month pay be paid?
It must be paid not later than December 24 of every year.
Who are excluded from its coverage?
The following employers are not covered by the 13th month pay law:
1. The government and any of its political subdivisions, including government-

owned and controlled corporations, except those corporations operating essentially as
private subsidiaries of the government.
2. Employers already paying their employees 13th month pay or more in a calendar year or
its equivalent at the time of the issuance of the Revised Guidelines.
3. Employers of those who are paid on purely commission, boundary, or task basis, and
those who are paid a fixed amount for performing a specific work, irrespective of the time
consumed in the performance thereof, except where the workers are paid on piece-rate basis, in
which case, the employer shall be covered by the Revised Guidelines insofar as such workers are
concerned. Workers paid on piece-rate basis shall refer to those who are paid a standard
amount for every piece or unit of work produced that is more or less regularly replicated without
regard to the time spent in producing the same.
Are domestic workers or Kasambahays covered?
Yes. They are now covered under the Kasambahay Law.
Are extras, casuals and seasonal employees entitled to 13th month pay?
Yes, they are entitled thereto.
Is 13 month p ay part of wage?

th
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13th month pay which is in the nature of additional income, is based on wage but not part of wage.
What is the minimum amount of the 13th month pay?
The minimum 13th month pay should not be less than one-twelfth (1/12) of the total basic salary earned by an
employee within a calendar year.
What is meant by “basic salary” or “basic wage”?

“Basic salary” or “basic wage” contemplates work within the normal eight (8) working hours in a day. This means that the
basic salary of an employee for purposes of computing the 13th month pay should include all remunerations or earnings paid by
the employer for services rendered during normal working hours.
For purposes of computing the 13th month pay, “basic salary” should be interpreted to mean not
the amount actually received by an employee, but 1/12 of their standard monthly wage
multiplied by their length of service within a given calendar year.
SEPARATION PAY
What are the separation pays expressly provided under the Labor Code?
The Labor Code prescribes the payment of separation pay only in the following four (4) situations:
(1) When termination is due to authorized causes:
(1) installation of labor-saving devices; (2) redundancy;
(3) retrenchment; or
(4) closing or cessation of business operations; and
(5) disease.
What are separation pays provided in jurisprudence?
In accordance with jurisprudence, the following separation pay may be cited: (1) Separation pay
in lieu of reinstatement; and
(2) Separation pay as financial assistance in cases where the dismissal was held valid and
legal but the employee is
given financial assistance by reason of long years of service, unblemished record, substantial
justice, etc.
What is the prevailing doctrine regarding grant of financial assistance?
THE TOYOTA DOCTRINE.
Under this doctrine, all grounds in Article 282 of the Labor Code, except analogous causes,
would not merit payment of financial assistance.
In the following cases, the Toyota doctrine was applied; hence, no financial assistance was
awarded because the grounds invoked are in accordance with Article 282:
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2015 BAR EXAMS
Reno Foods v. Nagkakaisang Lakas ng Manggagawa (NLM), where it was maintained

that labor adjudicatory officials and the Court of Appeals must demur the award of separation
pay based on social justice when an employee’s dismissal is based on serious misconduct or
willful disobedience; gross and habitual neglect of duty; fraud or willful breach of trust; or
commission of a crime against the person of the employer or his immediate family – grounds
under Article 282 of the Labor Code that sanction dismissals of employees.
Equitable PCI Bank v. Dompor, Moya v. First Solid Rubber Industries, Inc., and
Unilever Philippines, Inc. v. Rivera, where the infractions committed by the respondent
constituted serious misconduct or willful disobedience resulting to loss of trust and confidence.
Central Philippines Bandag Retreaders, Inc. v. Diasnes, and Quiambao v. Manila

Electric Company, involving gross and habitual neglect of duties due to respondent’s
repeated and continuous absences without prior leave and frequent tardiness.
Exception to Toyota doctrine: When termination is based on analogous causes.
Toyota, however, makes a distinction when the grounds cited are the analogous causes for
termination under Article
282(e), like inefficiency, incompetence, ineptitude, poor performance and others. It declared
that in these cases, the NLRC or the courts may opt to grant separation pay anchored on
social justice in consideration of the length of service of the employee, the amount involved,
whether the act is the first offense, the performance of the employee and the like, using the
guideposts enunciated in PLDT on the propriety of the award of separation pay.
Illustrative cases.
Yrasuegui v. Philippine Airlines, Inc., where the dismissal of petitioner (an international
flight attendant) due to his obesity was held valid as an analogous cause under Article 282(e)
of the Labor Code. The Supreme Court, however, as an act of social justice and for reason of
equity, awarded him separation pay equivalent to one-half (1/2) month’s pay for every year of
RETIREMENT PAY
service, including his regular allowances. The Court observed that his dismissal occasioned by
his failure to meet the weight standards of his employer was not for serious misconduct and
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does not reflect on his moral character.
Bar
a.
ELIGIBILITY
THE SOLIDBANK DOCTRINE.
Who are covered under the retirement pay law?

Under this 2010 doctrine, as distinguished from just cause termination, employees
terminated due to authorized cause are not entitled to be paid additional separation pay by
The following
way of financial employees are eligible to avail of retirement benefits under Article 287 of the Labor Code:
assistance.
The reason is that the employer is only required under the law to pay his employees
separation pay in accordance with Article 283 of the Labor Code. That is all that the law
requires. The Court should refrain from adding more than what the law requires, as the same
is within the realm of the legislature.
1. All employees in the private sector, regardless of their position, designation or status and
irrespective of the method by which their wages are paid;
2. Part-time employees;
3. Employees of service and other job contractors;
4. Domestic helpers or persons in the personal service of another;
3. Underground mine workers;
4. Employees of government-owned and/or controlled corporations organized under the

Corporation Code (without original charters).
Who are excluded?
Article 287, as amended, does not apply to the following employees:
1. Employees of the national government and its political subdivisions, including

government-owned and/or controlled corporations, if they are covered by the Civil Service
Law and its regulations.
2. Employees of retail, service and agricultural establishments or operations regularly

employing not more than ten
(10) employees. These terms are defined as follows:
a. “Retail establishment” is one principally engaged in the sale of goods to end-

users for personal or household use. It shall lose its retail character qualified for exemption
if it is engaged in both retail and wholesale of goods.
b. “Service establishment” is one principally engaged in the sale of service to individuals

for their own or household use and is generally recognized as such.
c. “Agricultural establishment/operation” refers to an employer which is engaged in

agriculture. This term refers to all farming activities in all branches and includes, among
others, the cultivation and tillage of soil, production, cultivation, growing and harvesting of
any agricultural or horticultural commodities, dairying, raising of livestock or poultry, the
culture of fish and other aquatic products in farms or ponds, and any activities performed by a
farmer or on a farm as an incident to, or in conjunction with, such farming operations, but
does not include the manufacture and/or processing of sugar, coconut, abaca, tobacco,
pineapple, aquatic or other farm products.
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What is the optional and compulsory retirement age?
a. Under Article 287.
This article provides for two (2) types of retirement:
(1) Optional retirement upon reaching the age of sixty (60) years.
(2) Compulsory retirement upon reaching the age of sixty-five (65) years.
It is the employee who exercises the option under No. 1 above.
b. Under retirement plan.
The optional and compulsory retirement schemes provided under Article 287 come into play
only in the absence of a retirement plan or agreement setting forth other forms of optional or
compulsory retirement schemes. Thus, if there is a retirement plan or agreement in an
establishment providing for an earlier or older age of retirement (but not beyond 65 which has
been declared the compulsory retirement age), the same shall be controlling.
c. Retirement at an earlier age or after rendering certain period of service.

What is the min imum years of service required for entitlement under the
Based
law? on Article 287 the employers and employees are free to agree and stipulate on the
retirement age, either in a CBA or employment contract. It is only in the absence of such
agreement Five that
(5) years
theis the minimum years
retirement ageof shall
service that
be must
fixedbe by
rendered
law,bythatthe employee
is, in before he can avail
accordance withof the
the
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optional
retirement and compulsory
benefits upon reachingretirement age prescribed
optional or compulsory retirement ageunder Article
under Article 287.287.
d. What
By ismutual agreement,
the retirement employers
age of underground may be granted the sole and exclusive
mine workers?
prerogative to retire employees at an earlier age or after rendering a certain period
The optional retirement age of underground mine workers is 50 years of age; while the compulsory retirement age is
of service.
60 years Catholic
Cainta old. School v. Cainta Catholic School Employees Union [CCSEU], where the
Supreme Court upheld the exercise by the school of its option to retire employees pursuant to
What is the minimum number of years of service required of underground mine workers?
the existing CBA where it is provided that the school has the option to retire an employee
upon reaching the
Minimum years age is
of service limit
also 5 of sixty (60) or after having rendered at least twenty
years.
(20) years of service to the school, the last three (3) years of which must be
continuous. Hence, the termination of employment of the employees, arising as it did from
an exercise of a management prerogative granted by the mutually-negotiated CBA between
the school and the union is valid.
e. To be valid, retirement at an earlier age must be voluntarily consented to by the

employee.
In Jaculbe v. Silliman University, the Supreme Court ruled that in order for retirement at
an earlier age to be valid, it must be shown that the employee’s participation in the plan is
voluntary. An employer is free to impose a retirement age of less than 65 for as long as it has
the employees’ consent. Stated conversely, employees are free to accept the employer’s offer
to lower the retirement age if they feel they can get a better deal with the retirement plan
presented by the employer.
Are the retirement benefits of underground mine workers similar to ordinary

retirees?
Yes. In fact, other than the retirement age, all other requirements as well as benefits provided
in the law are applicable to underground mine workers.
AMOUNT OF RETIREMENT PAY
What is retirement pay under the law?
a. One-half (½) month salary.
In the absence of a retirement plan or agreement providing for retirement benefits of

employees in the establishment, an employee, upon reaching the optional or compulsory
retirement age specified in Article 287, shall be entitled to retirement pay equivalent to at
least one-half (½) month salary for every year of service, a fraction of at least six (6) months
being considered as one (1) whole year.
b. Components of one-half (½) month salary.
For purposes of determining the minimum retirement pay due an employee under Article 287,
the term “one-half
month salary” shall include all of the following:
(1) Fifteen (15) days salary of the employee based on his latest salary rate. (2) The
cash equivalent of five (5) days of service incentive leave;
(3) One-twelfth (1/12) of the 13th month pay due the employee; and
(4) All other benefits that the employer and employee may agree upon that should be
included in the computation of
the employee’s retirement pay.
c. “One-half (½) month salary” means 22.5 days.
“One-half [½] month salary” is equivalent to “22.5 days” arrived at after adding 15 days
plus 2.5 days representing one-twelfth [1/12] of the 13th month pay plus 5 days of service
incentive leave.
What are some principles on retirement benefits?
1/12 of 13th month pay and 5 days of service incentive leave (SIL) should not be
included if the employee was not entitled to 13th month pay and SIL during his employment.
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Example: R & E Transport, Inc. v. Latag,1 where it was held that employees who are not
entitled to 13th month pay and SIL pay while still working should not be paid the entire “22.5
days” but only the fifteen (15) days salary. In other words, the additional 2.5 days
representing one-twelfth [1/12] of the 13th month pay and the five (5) days of SIL should not
be included as part of the retirement benefits.
The employee in this case was a taxi driver who was being paid on the “boundary” system
basis. It was undisputed that he was entitled to retirement benefits after working for fourteen
(14) years with R & E Transport, Inc. However, he was not entitled to the 13th month pay
since Section 3 of the Rules and Regulations Implementing P.D. No. 851 exempts from its
coverage employers of those who are paid on purely boundary basis. He was also not entitled
to the 5-day service incentive leave pay pursuant to the Rules to Implement the Labor Code
which expressly excepts field personnel and other employees whose performance is
unsupervised by the employer.
But in the 2010 case of Serrano v. Severino Santos Transit,2 which involves a bus
conductor (petitioner) who worked for 14 years for respondent bus company which did not
adopt any retirement scheme. It was held herein that even if petitioner as bus conductor was
paid on commission basis, he falls within the coverage of R.A. 7641 (Retirement Pay Law, now
Article 287 of Labor Code). This means that his retirement pay should include the cash
equivalent of the 5-day SIL and 1/12 of the 13th month pay for a total of 22.5 days. The
affirmance by the Court of Appeals of the reliance by the NLRC on R & E Transport case was
held erroneous. For purposes of applying the law on SIL as well as on retirement, there is a
difference between drivers paid under the “boundary system” and conductors paid on
commission basis. This is so because in practice, taxi drivers do not receive fixed wages. They
retain only those sums in excess of the “boundary” or fee they pay to the owners or operators
of the vehicles. Conductors, on the other hand, are paid a certain percentage of the bus’
earnings for the day. It bears emphasis that under P.D. No. 851 and the SIL Law, the
exclusion fromthe
• How should its coverage of workers who are paid on a purely
retirement benefits commission basis
of part-time workers beis only with
computed?
respect to field personnel.
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Applying the principles under Article 287, as amended, the components of retirement benefits of part-time workers
RETIREMENT BENEFITS OF WORKERS PAID BY RESULTS
may also be computed at least in proportion to the salary and related benefits due them.
J.
• What are the retirement benefits of workers paid by results?
WOMEN WORKERS
For covered workers who are paid by results and do not have a fixed monthly rate, the basis
for the determination of the salary for fifteen (15) days shall be their average daily salary
a. twelve (12) months reckoned from the date
(ADS). The ADS is the average salary for the last
of their retirement, divided by the number of actual working days in that particular period.
RETIREMENT BENEFITS OF PART-TIME WORKERS
PROVISIONS AGAINST DISCRIMINATION
• What are acts of discrimination under the Labor Code?
(a) Payment of a lesser compensation, including wage, salary or other form of remuneration
and fringe benefits, to a female employee as against a male employee, for work of equal
value; and
(b) Favoring a male employee over a female employee with respect to promotion, training
opportunities, study and scholarship grants solely on account of their sexes.
• What are acts of discrimination under the Magna Carta of Women?
R.A. No. 9710, otherwise known as “The Magna Carta of Women,” is a comprehensive
women’s human rights law that seeks to eliminate discrimination against women by
recognizing, protecting, fulfilling and promoting the rights of Filipino women, especially those
in marginalized sector.
Based on the definition of the term “Discrimination Against Women” in R.A. No. 9710, the
following are considered discriminatory acts:
1. Any gender-based distinction, exclusion, or restriction which has the effect or purpose of
impairing or nullifying the recognition, enjoyment, or exercise by women, irrespective of their
marital status, on a basis of equality of men and women, of human rights and fundamental
freedoms in the political, economic, social, cultural, civil or any other field;
2. Any act or omission, including by law, policy, administrative measure, or practice, that
directly or indirectly excludes or restricts women in the recognition and promotion of their
rights and their access to and enjoyment of opportunities, benefits or privileges;
3. A measure or practice of general application that fails to provide for mechanisms to offset
or address sex or gender-based disadvantages or limitations of women, as a result of which
women are denied or restricted in the recognition and protection of their rights and in their
access to and enjoyment of opportunities, benefits, or privileges; or women, more than men,
are shown to have suffered the greater adverse effects of those measures or practices; and
1 G.R. No. 155214, Feb. 13, 2004.
2 G.R. No. 187698, Aug. 9, 2010.
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4. Discrimination compounded by or intersecting with other grounds, status, or condition, such as

ethnicity, age, poverty or religion.
Additionally, women are guaranteed their right to decent work. The State shall progressively
realize and ensure decent work standards for women that involve the creation of jobs of
acceptable quality in conditions of freedom, equity, security and human dignity.
b.
STIPULATION AGAINST MARRIAGE
• Is the prohibition against marriage valid?
Article 136 of the Labor Code considers as an unlawful act of the employer to require as a
condition for or continuation of employment that a woman employee shall not get married or to
stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed
resigned or separated.
It is likewise an unlawful act of the employer, to actually dismiss, discharge, discriminate or

otherwise prejudice a woman employee merely by reason of her marriage.
• What are the relevant pieces of jurisprudence on marriage?
1. Philippine Telegraph and Telephone Company v. NLRC.1 - It was declared here that the
company policy of not accepting or considering as disqualified from work any woman worker who
contracts marriage runs afoul of the test of, and the right against, discrimination afforded all
women workers by our labor laws and by no less than the Constitution.
2. Star Paper Corp. v. Simbol, Comia and Estrella.2 - The following policies were struck
down as invalid for violating the standard of reasonableness which is being followed in our
jurisdiction, otherwise called the “Reasonable Business Necessity Rule”:
“1. New applicants will not be allowed to be hired if in case he/she has [a] relative, up to [the] 3rd
degree of relationship, already employed by the company.
“2. In case of two of our employees (both singles [sic], one male and another female) developed a
friendly relationship during the course of their employment and then decided to get married, one
of them should resign to preserve the policy stated above.”
3. Duncan Association of Detailman-PTGWO v. Glaxo Welcome Philippines, Inc.3 In this

case, the prohibition
against marriage embodied in the following stipulation in the
employment contract was held as valid:
“10. You agree to disclose to management any existing or future relationship you may have, either by consanguinity
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or affinity with co-employees or employees of competing drug companies. Should it pose a possible conflict of
interest in management discretion, you agree to resign voluntarily from the Company as a matter of Company
policy.”
The Supreme Court ruled that the dismissal based on this stipulation in the employment contract is a valid exercise of
management prerogative. The prohibition against personal or marital relationships with employees of competitor companies
possibility that a competitor company will gain access to its secrets and procedures.
c. PROHIBITED ACTS
• What are the prohibited acts against women under the Labor Code?
Article 137 of the Labor Code and its implementing rule consider unlawful the followings acts of
the employer:
1. To discharge any woman employed by him for the purpose of preventing such woman from
enjoying maternity leave, facilities and other benefits provided under the Labor Code;
2. To discharge such woman on account of her pregnancy, or while on leave or in

confinement due to her
pregnancy;
3. To discharge or refuse the admission of such woman upon returning to her work for fear that
she may again be
pregnant;
4. To discharge any woman or any other employee for having filed a complaint or having
testified or being about to testify under the Labor Code; or
5. To require as a condition for or continuation of employment that a woman employee shall not
get married or to stipulate expressly or tacitly that upon getting married, a woman
employee shall be deemed resigned or separated, or to actually dismiss, discharge,
discriminate or otherwise prejudice a woman employee merely by reason of marriage.
1 G.R. No. 118978, May 23, 1997, 272 SCRA 596, 605.
2 G.R. No. 164774, April 12, 2006.
3 G.R. No. 162994, Sept. 17, 2004.
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d.
ANTI-SEXUAL HARASSMENT ACT (R.A. No. 7877)
• What are the 3 situations contemplated under this law?
R.A. No. 7877 declares sexual harassment unlawful only in three (3) situations, namely: (1)
employment;
(2) education; and
(3) training environment.
• Can sexual harassment be committed also against a man?
Yes. Sexual harassment is not the sole domain of women as men may also be subjected to the
same despicable act. Said law does not limit the victim of sexual harassment to women.
• Who are the persons who may be held liable for sexual harassment?
Work, education or training-related sexual harassment is committed by any employer,

employee, manager,
3. The above supervisor, agent of the employer, teacher,
acts would instructor,
result in an intimidating, professor, coach,
hostile, or offensive
trainor, or any other person who, having authority, influence or moral ascendancy over
another enviro
in a worknment for the employee.
or training or education environment, demands, requests or otherwise
requires any sexual favor from another, regardless of whether the demand, request or
requirement ChanRobles
• What are duties of the employer
for submission
Bar isinaccepted
regard to sexual
by theharassment complaints?
object of said act.
It is the duty of the employer to prevent or deter the commission of acts of sexual harassment and to provide the
procedures
Further, any for theperson
resolutionwho
or prosecution
directsofor
acts of sexual harassment.
induces another to commit any act of sexual harassment
as defined in the law, or who cooperates in the commission thereof by another without which
it would not have been committed, shall also be held liable under the law.
The employer or head of office is required to:
• 1.How
promulgate appropriate
is sexual rules and regulations,
harassment in consultation
committed in with and jointly approved or
a work-related by the employees or
employment
students
environment? or trainees, through their duly designated representatives, prescribing the procedure for the investigation
In a work-related or employment environment, sexual harassment is committed when:
1. The sexual favor is made a condition in the hiring or in the employment, re-employment or
continued employment of said individual or in granting said individual favorable compensation,
terms, conditions, promotions, or privileges; or the refusal to grant the sexual favor results in
limiting, segregating or classifying the employee which in any way would discriminate, deprive
or diminish employment opportunities or otherwise adversely affect said employee;
2. The above acts would impair the employee’s rights or privileges under existing labor laws;
or
of sexual harassment cases and the administrative sanctions therefor. The said rules and
regulations issued shall include, among others, guidelines on proper decorum in the workplace
and educational or training institutions.
2. create a committee on decorum and investigation of cases on sexual harassment. The

committee shall conduct meetings, as the case may be, with officers and employees, teachers,
instructors, professors, coaches, trainors and students or trainees to increase understanding
and prevent incidents of sexual harassment. It shall also conduct the investigation of alleged
cases constituting sexual harassment.
K. EMPLOYMENT OF MINORS
(Labor Code and R.A. No. 7678, R.A. No. 9231)
• Who is a “child” or “working child”?
For legal purposes, the term “child” refers to any person less than eighteen (18) years of
age. A “working child” refers to any child engaged as follows:
i. when the child is below eighteen (18) years of age, in work or economic activity that is not
“child labor;” and ii. when the child below fifteen (15) years of age:
(a) in work where he/she is directly under the responsibility of his/her parents or legal
guardian and where only
members of the child’s family are employed; or
(b) in “public entertainment or information” which refers to artistic, literary, and cultural
performances for television show, radio program, cinema or film, theater, commercial
advertisement, public relations activities or campaigns, print materials, internet, and other
media.
• What are the working hours of a child?
The term “hours of work” includes (1) all time during which a child is required to be at a
prescribed workplace, and (2) all time during which a child is suffered or permitted to work.
Rest periods of short duration during working hours shall be counted as hours worked.
The following hours of work shall be observed for any child allowed to work under R.A. No.
9231 and its Implementing
Rules:
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2015 BAR EXAMS
(a) For a child below 15 years of age, the hours of work shall not be more than twenty
(20) hours per week, provided that the work shall not be more than four (4) hours at any
given day;
(b) For a child 15 years of age but below 18, the hours of work shall not be more than
eight (8) hours a day, and in no case beyond forty (40) hours a week; and
(c) No child below 15 years of age shall be allowed to work between eight (8) o’clock in
the evening and six (6) o’clock in the morning of the following day and no child 15 years of
age but below 18 shall be allowed to work between ten (10) o’clock in the evening and six
(6) o’clock in the morning of the following day.
What is the prohibition of employing minors in certain undertakings and

advertisements?
No child below 18 years of age is allowed to be employed as a model in any advertisement

directly or indirectly promoting alcoholic beverages, intoxicating drinks, tobacco and its
by-products, gambling or any form of violence or pornography.
L. HOUSEHELPERS
(c) Cook;
(Labor Code as amended by R.A. No. 7655,

(d) Gardener;
(e) Laundry person;

An Act Increasing
Bar
theorMinimum Wage of Househelpers; See also – Household Service
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under the Civil Code)
(f) Any person who regularly performs domestic work in one household on an occupational basis.
• Who are
(NOTE: The excluded
above from its coverage? of the Labor Code on Househelpers cited in the 2014
provisions
Syllabus have already been repealed by R.A. No.
The following are not covered:
10361, (a)otherwise known as “Domestic Workers Act” or “Batas Kasambahay”
Service providers;
approved by President Benigno S. Aquino III on January 18, 2013).
(b) Family drivers;
• What is the coverage of the Kasambahay Law?
R.A. No. 10361 applies to all domestic workers employed and working within the country. It
shall cover all parties to an employment contract for the services of the following
Kasambahay, whether on a live-in or live-out arrangement, such as, but not limited to:
(a) General househelp; (b) Yaya;
(c) Children under foster family arrangement; and
(d) Any other person who performs work occasionally or sporadically and not on an
occupational basis.
• Who is a domestic worker or kasambahay?
“Domestic worker” or “kasambahay” refers to any person engaged in domestic work

within an employment relationship, whether on a live-in or live-out arrangement, such as, but
not limited to, general househelp, "yaya", cook, gardener, or laundry person, but shall exclude
service providers, family drivers, children who are under foster family arrangement, or any
person who performs domestic work only occasionally or sporadically and not on an
occupational basis.
This term shall not include children who are under foster family arrangement which
refers to children who are living with a family or household of relative/s and are provided
access to education and given an allowance incidental to education, I.e., "baon",
transportation, school projects, and school activities.
Because of these new terminologies prescribed in the law, the use of the term “househelper”
may no longer be legally
correct.
• Is the employment contract required to be in writing?
Yes. The employment contract must be in writing and should contain the conditions set by
law.
• What are the rights and privileges of a kasambahay?
The rights and privileges of the Kasambahay are as follows: (a) Minimum wage;
(b) Other mandatory benefits, such as the daily and weekly rest periods, service incentive
leave, and 13th month pay;
(c) Freedom from employers' interference in the disposal of wages; (d) Coverage under the
SSS, PhilHealth and Pag-IBIG laws;
(e) Standard of treatment;
(f) Board, lodging and medical attendance; (g) Right to privacy;
(h) Access to outside communication; (i) Access to education and training;
(j) Right to form, join, or assist labor organization;
(k) Right to be provided a copy of the employment contract;
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2015 BAR EXAMS
(I) Right to certificate of employment;
(m) Right to terminate the employment; and
(n) Right to exercise their own religious beliefs and cultural practices. The foregoing rights and
privileges are discussed below.
• What is the minimum wage of kasambahay?
Under the Kasambahay Law, the following are the minimum wages of kasambahays:
(a) Two thousand five hundred pesos (P2,500.00) a month for those employed in the National
Capital Region (NCR); (b) Two thousand pesos (P2,000.00) a month for those employed in
chartered cities and first class municipalities; and (c) One thousand five hundred pesos
(P1,500.00) a month for those employed in other municipalities.
• Are the minimum wages subject to review by the RTWPBs or Regional Boards?
Yes. After one (1) year from the effectivity of the Kasambahay Law, and periodically thereafter,
the Regional Tripartite and Productivity Wage Boards (RTPWBs) shall review, and if proper,
determine and adjust the minimum wage rates of domestic workers.”
What are some important principles on wage of kasambahay?
Frequency of payment of wages. - The wages of the Kasambahay shall be paid at least once a
month. This is so because the minimum wage rates are on a monthly basis.
The equivalent minimum daily wage rate of the Kasambahay shall be determined by dividing
the applicable minimum monthly rate by thirty (30) days.
The amount of the minimum wage depends on the geographical area where the Kasambahay
works.
Payment of wages:
1. To whom paid. - It should be made on time directly to the Kasambahay to whom they are
due in cash at least once a month.
2. Deductions, prohibition; when allowed. - The employer, unless allowed by the

Kasambahay through a written consent, shall make no deductions from the wages other than that
which is mandated by law such as for SSS, Philhealth or Pag-IBIG contributions.
3. Mode of payment. - It should be paid in cash and not by means of promissory notes,
vouchers, coupons, tokens, tickets, chits, or any object other than the cash wage as provided for
under this Act.
4. P ay slip. – The employer shall at all times provide the Kasamba

the pay slip containing the
hay with a copy of
amount paid in cash every pay day, and indicating all deductions made, if any. The copies of the pay slip
Barshall be kept by the employer for a period of three (3) years.
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5. Prohibition on Interference in the disposal of wages. – It shall be unlawful for the employer to interfere
with the freedom of the Kasambahay in the: disposition
www.chanroblesbar.com of his/her wages, such as:
(a) Forcing, compelling, or obliging the Kasambahay to purchase merchandise, commodities or other
withhold the wages of the Kasambahay. If the Kasambahay leaves without any justifiable reason,
any unpaid salary for a period not exceeding fifteen (15) days shall be forfeited. Likewise, the
employer shall not induce the Kasambahay to give up any part of the wages by force, stealth,
intimidation, threat or by any other means whatsoever.
• What are important terms and conditions of employment of kasambahay?
The following is a rundown of the basic terms and conditions that should be observed in the
employment of a
Kasambahay:
a. Employable age. - Children whose age is below 15 years are absolutely prohibited to work as
Kasambahay.
b. Normal daily hours of work. – Because R.A. No. 10361 does not contain any provision on
the number of normal hours of work that a Kasambahay should render in a day but merely
prescribes said daily rest period of eight (8) hours per day, it may be concluded that the
Kasambahay should work for at least a total of sixteen (16) hours per day as normal hours of
work. However, it must be noted that the Labor Code does not contain any provision on the
normal hours of work of househelpers. Article 1695 of the Civil Code, however, specifically
provides that househelpers shall not be required to work for more than ten (10) hours a day.
Since R.A. No. 10361, a special law, is the most recent piece of legislation, it should prevail over
the general provision of the Civil Code.
c. Normal daily hours of work for working child-kasambahay is eight (8) hours per day.
d. 13th month pay. - The Kasambahay who has rendered at least one (1) month of service
is entitled to a 13th month pay which shall not be less than one-twelfth (1/12) of his/her total
basic salary earned in a calendar year. The 13th month pay shall be paid not later than December
24 of every year or upon separation from employment.
e. Daily rest period. – The Kasambahay shall be entitled to an aggregate daily rest period of
eight (8) hours.
f. Weekly rest period. - The Kasambahay shall be entitled to at least twenty-four (24)
consecutive hours of rest in a week. The employer and the Kasambahay shall agree in writing
on the schedule of the weekly rest day but the preference of the Kasambahay, when based on
religious grounds, shall be respected.
g. Service incentive leave. - A Kasambahay who has rendered at least one (1) year of service
shall be entitled to an annual service incentive leave of at least five (5) days with pay. Any unused
portion of said annual leave shall not be cumulative or carried over to the succeeding years.
Unused leaves shall not be convertible to cash.
h. Social security benefits. - A Kasambahay who has rendered at least one (1) month of
service shall be covered by the Social Security System (SSS), Employees Compensation
Commission (ECC), Philippine Health Insurance
34
2015 BAR EXAMS
Corporation (PhilHealth), and Home Development Mutual Fund or Pag-IBIG, and shall be
entitled to all the benefits in accordance with their respective policies, laws, rules and
regulations.
i. Obligation of employer to register and enrol with SSS, PhilHealth, and Pag -IBIG.
- As employer of the Kasambahay, he/she shall register himself/herself with, and enroll the
latter as his/her employee to the SSS, PhilHealth, and Pag-IBIG.
j. Deposits for loss or damage. - It shall be unlawful for the employer or any other person
to require a Kasambahay to make deposits from which deductions shall be made for the
reimbursement of loss or damage to tools, materials, furniture and equipment in the
household.
k. Standard of treatment. - The Kasambahay shall be treated with respect by the employer
or any member of the household. He/she shall not be subjected to any kind of abuse,
including repeated verbal or psychological, nor be inflicted with any form of physical violence
or harassment or any act tending to degrade his/her dignity, as defined under the Revised
Penal Code, Violence Against Women and their Children Law (R.A. No. 9262), Special
Protection of Children Against Child Abuse, Exploitation and Discrimination Act (R.A. No. 7610)
as amended by R.A. No. 9231, Anti-Trafficking in Persons Act of 2003 (R.A. No. 9208), and
other applicable laws.
l. Board, lodging and medical attendance. - The employer shall provide for the
basic necessities of the
Kasambahay, to include the following:

peculiar nature of dom estic work.
(1) At least three (3) adequate meals a day, taking into consideration the Kasambahay's
religious beliefs and cultural practices;
(2) Humane sleeping

s. Prohibition on debtcondition
bondage. - Itthat respects
shall be the
unlawful for the person's privacy
employer or any person for
actinglive-in arrangement;
on his/her behalf to place
and
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the Kasambahay under debt bondage. “Deb bondage” refers to the rendering of service by the Kasambahay as security or
payment
(3) for a debt where
Appropriate resttheand
lengthmedical
and nature of service is in
assistance notthe
clearly defined
form of or when themedicines,
first-aid value of the service
in case is not
of
reasonably applied in the payment of the debt.
illnesses and injuries sustained during service without loss of benefits.
t. Assignment to non-household work. - The employer shall not assign the Kasambahay to work, whether in full or
part-time, in a commercial,for
m. Opportunities industrial or agricultural
education and enterprise at a wage
training. rate lower
- The than that provided
Kasambahay shallforbe
agricultural
afforded or non
the-
agricultural workers.
opportunity to finish basic education, which shall consist of elementary and secondary
education. He/she may be allowed access to alternative learning systems and, as far as
practicable, higher education or technical vocational education and training.
n. Membership in labor organization. - The Kasambahay shall have the right to join a
labor organization of his/her own choosing for purposes of mutual aid and collective
negotiation.
r. Health and safety. - The employer shall safeguard the safety and health of the
Kasambahay in accordance with the standards which the DOLE shall develop through the
Bureau of Working Conditions (BWC) and the Occupational Safety and Health Center (OSHC)
within six (6) months from the promulgation of this IRR. The said standards shall take into
account the
If so assigned, the Kasambahay will no longer be treated as such but as a

regular employee of the establishment.
• What are the rules on termination of Kasambahay?
a. Pre-termination of employment. – The following rules shall be observed:
(1) In case the duration of employment is specified in the contract, the Kasambahay and the
employer may mutually agree upon notice to terminate the contract of employment before the
expiration of its term.
(2) In case the duration is not determined by stipulation or by nature of service, the employer
or the Kasambahay may give notice to end the employment relationship five (5) days before
the intended termination of employment.
b. Termination of employment initiated by the Kasambahay. - The Kasambahay may

terminate the employment relationship at any time before the expiration of the contract for
any of the following causes:
(1) Verbal or emotional abuse of the Kasambahay by the employer or any member of the
household;
(2) Inhuman treatment including physical abuse of the Kasambahay by the employer or any
member of the household; (3) Commission of a crime or offense against the Kasambahay by
the employer or any member of the household;
(4) Violation by the employer of the terms and conditions of the employment contract and
other standards set forth in the law;
(5) Any disease prejudicial to the health of the Kasambahay, the employer, or members of the
household; and
(6) Other causes analogous to the foregoing.
If the Kasambahay leaves without cause, any unpaid salary due, not exceeding the equivalent
of 15 days work, shall be forfeited. In addition, the employer may recover from the
Kasambahay deployment expenses, if any, if the services have been terminated within six (6)
months from employment.
c. Termination of employment initiated by the employer. - An employer may terminate

the employment of the
Kasambahay at any time before the expiration of the contract for any of the following causes:
(1) Misconduct or willful disobedience by the Kasambahay of the lawful order of the employer
in connection with the former's work;
(2) Gross or habitual neglect or inefficiency by the Kasambahay in the performance of duties;
35
2015 BAR EXAMS
(3) Fraud or willful breach of the trust reposed by the employer on the Kasambahay;
(4) Commission of a crime or offense by the Kasambahay against the person of the employer
or any immediate member of the employer's family;
(5) Violation by the Kasambahay of the terms and conditions of the employment contract and
other standards set forth under the law;
(6) Any disease prejudicial to the health of the Kasambahay, the employer, or members of the
household; and
(7) Other causes analogous to the foregoing.
If the employer dismissed the Kasambahay for reasons other than the above, he/she shall pay
the Kasambaha y the earned compensation plus indemnity in the amount equivalent to fifteen
(15) days work.
d. Invalid ground for termination. - Pregnancy and marriage of the Kasambahay

are not valid grounds for termination of employment.
e. Employment Certification. - Upon the termination of employment, the employer shall

issue the Kasambahay, within five (5) days from request, a certificate of employment
indicating the nature, duration of the service and work description.
e. “Employe r.” – It refers to any natural or artificial person who, for his
nefit, or on behalf of any
own account or be
M.
person residing outside the Philippines, directly or indirectly, or through any employee, agent, contractor, subcontractor or any
BarChanRobles
other person:
EMPLOYMENT OF HOMEWORKERS
1. delivers or causes to be delivered any goods, articles or materials to be processed or fabricated in or about a home
and thereafter to be returned or to be disposed of or distributed in accordance with his direction; or
• What areany
2. sells important
goods, articlesterms that
or materials for should
the purposebe noted
of having ingoods
such employment of homeworkers?
or articles processed in or about a home
and then repurchases them himself or through another after such processing.
“Con rac or” or “subcon rac or.” - It refers to any person who, for the account or benefit of an employer, delivers
a. “Industrial homeworker.” – It refers to a worker who is engaged in industrial
or causes to be delivered to a homeworker, goods or articles to be processed in or about his home and thereafter to be returned,
homework.
b. “Industrial homework.” – It refers to a system of production under which work for an

employer or contractor is carried out by a homeworker at his/her home. Materials may or
may not be furnished by the employer or contractor. It differ s from regular factory
production principally in that, it is a decentralized form of production where there is ordinarily
ve ry little supervision or regulation of methods of work.
c. “Home.” - It means any nook, house, apartment or other premises used regularly, in
whole or in part, as a dwelling place, except those situated within the premises or compound
of an employer, contractor/subcontractor and the work performed therein is under the active
or personal supervision by or for the latter.
d. “Field personnel.” – It refers to a non-agricultural employee who regularly performs his

duties away from the principal place of business or branch office of the employer and whose
actual hours of work in the field cannot be determined with reasonable certainty.
f. t t t t
disposed of or distributed in accordance with the direction of the employer.
g. “Processing.” - It refers to manufacturing, fabricating, finishing, repairing, altering,

packing, wrapping or handling in any way connected with the production or preparation of an
article or material.
• How is homework paid?
Immediately upon receipt of the finished goods or articles, the employer is required to pay the
homeworker or the contractor or subcontractor, as the case may be, for the work performed
less the corresponding homeworker’s share of SSS, PhilHealth and ECC premium contributions
which should be remitted by the contractor or subcontractor or employer to the SSS with the
employer’s share. However, where payment is made to a contractor or subcontractor, the
homeworker should likewise be paid immediately after the goods or articles have been
collected from the workers.
• What are prohibited homeworks?
No homework shall be performed on the following:
1. Explosives, fireworks and articles of like character;
2. Drugs and poisons; and
3. Other articles, the processing of which requires exposure to toxic substances.
N.
APPRENTICES AND LEARNERS
• What are the distinctions between learnership and apprenticeship?
The following are the distinctions:
1. Practical training. Both learnership and apprenticeship involve practical training on-the-
job.
2. Training agreement. Learnership is governed by a learnership agreement; while

apprenticeship is governed by an apprenticeship agreement.
2. Occupation. Learnership involves learnable occupations consisting of semi-skilled and

other industrial occupations which are non-apprenticeable; while apprenticeship concerns
apprenticeable occupations or any trade, form of employment or occupation approved for
apprenticeship by the DOLE Secretary.
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2015 BAR EXAMS
3. Theoretical instructions. Learnership may or may not be supplemented by related

theoretical instructions; while apprenticeship should always be supplemented by related
theoretical instructions.
4. Ratio of theoretical instructions and on-the-job training. For both learnership and
apprenticeship, the normal ratio is one hundred (100) hours of theoretical instructions for
every two thousand (2,000) hours of practical or on- the-job training. Theoretical instruction
time for occupations requiring less than two thousand (2,000) hours for proficiency should be
computed on the basis of such ratio.
5. Competency-based system. Unlike in apprenticeship, it is required in learnership that it

be implemented based on the TESDA-approved competency-based system.
6. Duration of training. Learnership involves practical training on the job for a period not
exceeding three (3) months; while apprenticeship requires for proficiency, more than
three (3) months but not over six (6) months of practical training on the job.
7. Qualifications. The law does not expressly mention any qualifications for learners;
while the following qualifications are required to be met by apprentices under Article 59 of
the Labor Code:
(a) Be at least fourteen (14) years of age;
(b) Possess vocational aptitude and capacity for appropriate tests; and
(c) Possess the ability to comprehend and follow oral and written instructions.
minimum wage.
8. Circumstances justifying hiring of trainees. Unlike in apprenticeship, in learnership,

the law, Article 74 of the
ChanRobles
Labor Code, expressly prescribes the pre-requisites
O. before learners may be validly employed,
to wit: Bar PERSONS WITH DISABILITY
(R.A. No. 7277, as Amended by R.A. No. 9442)

(a) When no experienced workers are available;
(b) The areemployment

• Who of learners
persons with disability (PWDs)? is necessary to prevent curtailment of employment
opportunities; and
(c) The “Persons

employment does not
with Disability” create
are those unfair
suffering fromcompetition in terms
restriction or different abilities,ofas alabor costs
result of or physical
a mental, impairoror
lower
sensoryworking
impairment,standards.
to perform an activity in the manner or within the range considered normal for a human being.
9. Limitation on the number of trainees. In learnership, a participating enterprise is

allowed to take in learners only up to a maximum of twenty percent (20%) of its total regular
workforce. No similar cap is imposed in the case of apprenticeship.
10. Option to employ. In learnership, the enterprise is obliged to hire the learner after the
lapse of the learnership period; while in apprenticeship, the enterprise is given only an
“option” to hire the apprentice as an employee.
11. Wage rate. The wage rate of a learner or an apprentice is set at seventy-five percent
(75%) of the statutory
• What is impairment?
“Impairment” refers to any loss, diminution or aberration of psychological, physiological, or

anatomical structure or
function.
• What is disability?
“Disability” means (1) a physical or mental impairment that substantially limits one or more
psychological, physiological or anatomical functions of an individual or activities of such
individual; (2) a record of such an impairment; or (3) being regarded as having such an
impairment.
• What is handicap?
“Handicap” refers to a disadvantage for a given individual, resulting from an impairment or a

disability that limits or prevents the function or activity that is considered normal given the
age and sex of the individual.
b.
RIGHTS OF PERSONS WITH DISABILITY
• What are the rights of PWDs?
Under the law, PWDs are entitled to equal opportunity for employment. Consequently, no PWD
shall be denied access to opportunities for suitable employment. A qualified employee with
disability shall be subject to the same terms and conditions of employment and the
same compensation, privileges, benefits, fringe benefits, incentives or allowances as
a qualified able-bodied person.
• What is the wage rate of PWDs?
The wage rate of PWDs is 100% of the applicable minimum wage.
• What is the wage rate of PWD if hired as apprentice or learner?
A PWD hired as an apprentice or learner shall be paid not less than seventy-five percent
(75%) of the applicable minimum wage.
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2015 BAR EXAMS
c.
PROHIBITION ON DISCRIMINATION AGAINST PERSONS WITH DISABILITY
• What is the rule on discrimination against employment of PWDs?
No entity, whether public or private, shall discriminate against a qualified PWD by reason of
disability in regard to job application procedures, the hiring, promotion, or discharge of
employees, employee compensation, job training, and other terms, conditions and privileges of
employment. The following constitute acts of discrimination:
(a) Limiting, segregating or classifying a job applicant with disability in such a manner that
adversely affects his work opportunities;
(b) Using qualification standards, employment tests or other selection criteria that screen out or
tend to screen out a PWD unless such standards, tests or other selection criteria are shown to be
job-related for the position in question and are consistent with business necessity;
(c) Utilizing standards, criteria, or methods of administration that:
(1) have the effect of discrimination on the basis of disability; or
(2) perpetuate the discrimination of others who are subject to common administrative control.
(d) Providing less compensation, such as salary, wage or other forms of remuneration and fringe
benefits, to a qualified employee with disability, by reason of his disability, than the amount to
which a non-disabled person performing the same work is entitled;
(e) Favoring a non-disabled employee over a qualified employee with disability with respect to
promotion, training opportunities, study and scholarship grants, solely on account of the latter’s
disability;
(f) Re-assigning or transferring an employee with a disability to a job or position he cannot

perform by reason of his disability;
(g) Dismissing or terminating the services of an employee with disability by reason of his
disability unless the employer can prove that he impairs the satisfactory performance of the work
involved to the prejudice of the business entity; provided, however, that the employer first sought
to provide reasonable accommodations for persons with disability;
(h) Failing to select or administer in the most effective manner employment tests which
accurately reflect the skills, aptitude or other factor of the applicant or employee with disability
that such tests purports to measure, rather than
the im paired sensory, manual or speaking skills of such applicant or

employee, if any; and
(i) Excluding PWD from membership in labor unions or similar organizations.

Bar
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------------oOo------------
38
TERMINATION OF EMPLOYMENT Prof. Joselito Guianan Chan
A.
EMPLOYER-EMPLOYEE RELATIONSHIP
1.
Four-Fold Test
• What is the 4-fold test of existence of employer-employee relationship?
1. Selection and engagement of the employee;
2. Payment of wages or salaries;
3. Exercise of the power of dismissal; or
4. Exercise
(1) of
Thethe
ex power to control the employee’s tent
conduct.
to which the services performed are an integral part
of t he employer’s business;
(2) The extent of the worker’s investment in equipment and facilities;

These tests, however, are not fool-proof as they admit of exceptions.
ChanRobles
Bar
(3) The nature and degree of control exercised by the employer;
(4) The worker’s opportunity for profit and loss;

The control test is the controlling test which means that the employer controls or has
reserved(5) the
Theright
amounttoof control
initiative, skill,
thejudgment or foresight
employee not onlyrequired
as toforthe
theresult
success of
ofthe
theclaimed
workindependent
to be done
enterprise;
but also as to the means and methods by which the same is to be accomplished.
(6) The permanency and duration of the relationship between the worker and the employer; and
(7) The degree of dependency of the worker upon the employer for his continued employment in that line of
What isbusiness.
the 2-tiered
4
test of employment relationship?
The two-tiered test enunciated in Francisco v. NLRC,1 is composed of:
(1) The putative employer’s power to control the employee with respect to themeans and
methods by which
the work is to be accomplished [control test]; and
(2) The underlying economic realities of the activity or relationship[broader economic

reality test].2
Employment relationship under the control test is determined by asking whether “the person
for whom the
services are performed reserves the right to control not only the end to be achieved but also
themanner and means to be used in reaching such end.”3
The broader economic reality test calls for the determination of the nature of the
relationship based on the circumstances of the whole economic activity, namely:
Under the economic reality test, the proper standard of economic dependence is whether
the worker is dependent on the alleged employer for his continued employment in that line of
business5.
Following the broader economic reality test, the Supreme Court found petitioner in Orozco v.
The Fifth Division of the Honorable Court of Appeals,6 who is a columnist in the Philippine
Daily Inquirer (PDI), not an employee of PDI but an independent contractor. Thus:
“Petitioner’s main occupation is not as a columnist for respondent but as a women’s rights
advocate working in various women’s organizations. Likewise, she herself admits that she also
contributes articles to other publications. Thus, it cannot be said that petitioner was
dependent on respondent PDI for her continued employment in respondent’s line of business.
“The inevitable conclusion is that petitioner was not respondent PDI’s employee but an
independent contractor, engaged to do independent work.”
• Is it necessary to have a written contract of employment in order to establish

employer-employee relationship?
No. It may be an oral or written contract. A written contract is not necessary for the creation
and validity of the relationship.
The only exception is in the case of Kasambahay where it is required that the
contract of employment should be in writing.
2.
KINDS OF EMPLOYMENT
What are the general classifications of employment?
There are five (5) classifications of employment:
1 G.R. No. 170087, Aug. 31, 2006.
2 Id.
3 Id.
4 Id.
5 Id.
6 G.R. No. 155207, April 29, 2005.
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2015 BAR EXAMS
(a) Regular employees referring to those who have been “engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer”;
(b) Project employees referring to those “whose employment has been fixed for a specific project
or undertaking, the
completion or termination of which has been determined at the time of the engagement of the
employee”;
(c) Seasonal employees referring to those who work or perform services which are seasonal in
nature, and the employment is for the duration of the season;
(d) Casual employees referring to those who are not regular, project, or seasonal employees;
(e) Fixed-term employees whose term is freely and voluntarily determined by the employer and
the employee.
a. PROBATIONARY EMPLOYMENT
How is probationary period, say, of 6 months computed?
The 6-month probationary period should be reckoned “from the date of appointment up to the
same calendar date of the 6th month following.”
May probationary period be extended?
Yes, but only upon the mutual agreement by the employer and the probationary employee.
What is the effect of allowing a probationary employee to work beyond the

probationary period?
He is considered a regular employee.
What is the effect if there is no written contract providing for probationary

employment?
If there is no written contract, the employee is considered a regular employee from day one of his
employment. And even if there is one, he is deemed regular if there is no stipulation on
probationary period.
What are the grounds to terminate probationary employment?
Under Article 281, a probationary employee may be terminated only on three (3) grounds, to wit:
1. For a just cause; or
2. For authorized cause; or
3. When t he probationary employee fails to qualify as a regular
probationary period cannot be done without due process as he has already become a regular
employee by em
that time. ployee in accordance with reasonable standards made known by the employer to the employee at
the start of the employment.
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b. Bar
Is procedural due process required in termination of probationary employment?
REGULAR EMPLOYMENT
Yes, but only in the case of Numbers 1 and 2 above.
No, in the case of No. 3 above.
How does one become a regular employee?
When should termination of probationary employment be made?
Under the Termination

Labor Code, to beregular
valid mustemployment
be done prior tomay
lapsebe attained in
of probationary either
period. of three
Termination (3)days
a few ways,
afternamely:
lapse of
1. By nature of work. - The employment is deemed regular when the employee has been
engaged to perform activities which are usually necessary or desirable in the usual business or
trade of the employer.
2. By period of service. - The employment is reckoned as regular when the employee has
rendered at least one (1) year of service, whether such service is continuous or broken, with
respect to the activity in which he is employed and his employment shall continue while such
activity exists.
3. By probationary employment. - The employment is considered regular when the employee

is allowed to work after a probationary period.
Is the manner or method of paying wage material in determining regularity of

employment?
No. The manner and method of payment of wage or salary is immaterial to the issue of whether
the employee is regular or not.
c.
PROJECT EMPLOYMENT
What is the litmus test of project employment?
The litmus test of project employment, as distinguished from regular employment, is whether or
not the project employees were assigned to carry out a specific project or undertaking, the
duration and scope of which were specified at the time the employees were engaged for
that project.
A true project employee should be assigned to a project which begins and ends at determined or
determinable times and be informed thereof at the time of hiring.
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2015 BAR EXAMS
What are the indicators of project employment?
Either one or more of the following circumstances, among others, may be considered as
indicator/s that an employee is a project employee:
1. The duration of the specific/identified undertaking for which the worker is

engaged is reasonably determinable.
2. Such duration, as well as the specific work/service to be performed, are defined in an

employment agreement and is made clear to the employee at the time of hiring.
3. The work/service performed by the employee is in connection with the particular

project or undertaking for which he is engaged.
4. The employee, while not employed and awaiting engagement, is free to offer his
services to any other employer.
5. A report of the termination of employment in the particular project/undertaking is

submitted to the DOLE Regional
Office having jurisdiction over the workplace, within thirty (30) days following the date of his
separation from work.
6. An undertaking in the employment contract by the employer to pay completion bonus to

the project employee as practiced by most construction companies.
2. Project employees have presumably become regular employees if they

are allowed to work beyond the completion
Is length of service material in determining validity of project employment?
of the project or any phase thereof to which they were assigned or after the “day certain” which they and their
BarChanRobles
employer have mutually agreed for its completion. Having become regular employees, they can no longer be
No. Lengthterminated
of serviceon the
is basis
not ofa the completion of
controlling the project or any
determinant ofphase thereof to which
employment they were deployed.
tenure.
d.
SEASONAL EMPLOYMENT
What are some principles on project employment?
Can a seasonal employee become a regular seasonal employee?

1. Project employees should be informed of their status as such at inception of the
employment relationship.
Yes, provided the following requisites are complied with:
2. There must be a written contract of project employment stating the duration of the project
employment as well as the particular work or service to be performed. A written project
employment contract is an indispensable requirement.
3. Intervals in employment contracts indicate project employment.
4. Continuous, as opposed to intermittent, rehiring shows that employee is regular.
5. “Project-to-project” basis of employment is valid.
On termination of project employment.
1. Project employees enjoy security of tenure only during the term of their project
employment.
1. The seasonal employee should perform work or services that are seasonal in nature; and
2. They must have also been employed for more than one (1) season.
Can a regular seasonal worker file an illegal dismissal case in the event he is not
hired for the next season?
Yes. The reason is, being a regular seasonal employee, the employer should re-hire him in the
next season. During off-season, his employment is deemed suspended and he is considered as
being on leave of absence without pay.
e.
CASUAL EMPLOYMENT
What is the most important distinguishing feature of casual employment?
The most important distinction is that the work or job for which he was hired is merely
incidental to the principal business of the employer and such work or job is for a definite
period made known to the employee at the time of engagement.
When does a casual employee become regular?
Casual employee becomes regular after one year of service by operation of law. The one (1)
year period should be reckoned from the hiring date. Repeated rehiring of a casual employee
makes him a regular employee.
f.
FIXED-TERM EMPLOYMENT
What are the requisites in order for fixed-term employment to be valid?
The two (2) requisites or criteria for the validity of a fixed-term contract of employment are as
follows:
1. The fixed period of employment was knowingly and voluntarily agreed upon by the
parties, without any force, duress or improper pressure being brought to bear upon the
employee and absent any other circumstances vitiating his consent; or
2. It satisfactorily appears that the employer and employee dealt with each other on more or
less equal terms with no moral dominance whatever being exercised by the former
on the latter.
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2015 BAR EXAMS
Is fixed-term employment valid if the job is directly related to the principal business
of the employer?
Yes. Fixed-term employment is the only exception to the rule that one becomes regular if he is
made to perform activities directly related to the principal business of the employer (Regularity by
virtue of nature of work)
When does a fixed-term employee become regular?
1. When he is allowed to work beyond the agreed fixed term.
2. When there are successive renewals of fixed-period contracts.
NOTE: The practice of hiring of employees on a uniformly fixed 5-month basis and replacing them
upon the expiration of their contracts with other workers with the same employment status
circumvents their right to security of tenure.
3.
JOB CONTRACTING
Is job contracting valid if the contractor-supplied employees are engaged to

perform not merely peripheral but core jobs with the principal?
Yes, per the 2012 case of Digital Telecommunications Philippines, Inc. v. Digitel
Employees Union (DEU), where the Court recognized the management prerogative to farm out
any of its activities, regardless of whether such activity is peripheral or core in nature.
b.
DEPARTMENT ORDER NO. 18-A (Series of 2011)
What is this
issuance?
This is the prevailing implementing rules on legitimate job contracting.
c.
DEPARTMENT CIRCULAR NO. 01-12
What is this issuance?
because:
(1) BPOs and KPOs since these companies may hire employees in accordance with applicable laws, and maintain
This was issued by the DOLE Secretary to clarify that Department Order No. 18-A, Series of 2011,
is not applicable to
Business Processing Outsourcing (BPO)/Knowledge Process Outsourcing (KPO) and

the Construction Industry
action, including the possible cancellation/suspension of the contractor’s license.
d.
TRILATERAL RELATIONSHIP IN JOB CONTRACTING
What is meant by trilateral relationship?
As distinguished from employment contract which is “bilateral” in nature, involving as it does only
two (2) parties,
namely: (1) the employer, and (2) the employee, in legitimate job contracting, there are three (3)
parties involved, to wit:
1. The principal who decides to farm out a job, work or service to a contractor;
2. The contractor who has the capacity to independently undertake the performance of the job,
work or service; and
3. The contractual workers engaged by the contractor to accomplish the job, work or service.
e.
EFFECTS OF LABOR-ONLY CONTRACTING
LEGITIMATE JOB CONTRACTING.
What are the requisites of legitimate job contracting?
(1) The contractor must be duly registered with the DOLE. If not registered, the contractor is
presumed a labor-only
contractor.
(2) The contractor carries a distinct and independent business and undertakes to perform
the job, work or service on its own responsibility, according to its own manner and method,
and free from control and direction of the principal in all matters connected with the
performance of the work except as to the results thereof;
(3) The contractor has substantial capital and/or investment in the form of tools, equipment,
machineries, work
premises, and other materials which are necessary in the conduct of the business; and
(4) The Service Agreement between principal and contractor should ensure compliance with all
the rights and benefits of workers under Labor Laws such as labor and occupational safety and
health standards, free exercise of the right to self-organization, security of tenure, and social and
welfare benefits.
Absence of any of the foregoing requisites makes it a labor-only contracting arrangement.
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2015 BAR EXAMS
What is the amount of substantial capital under the new Rules?
1. In the case of corporations, partnerships or cooperatives – paid-up capital stocks/shares

of at least P3
Million; or
2. In the case of single proprietorship - a net worth of at least P3 Million.
“Substantial capital” and “investment in tools, etc.” are two separate requirements.
“Substantial capital” and “investment in tools, equipment, implements, machineries and work
premises” should be treated as two (2) distinct and separate requirements in determining whether
there is legitimate job contracting arrangement.
May individuals engage in legitimate job contracting?
Yes. Legitimate job contracting may not only be engaged by corporation, partnership or single
proprietorship. Individuals may become legitimate job contractors themselves for as long as they
have SPECIAL SKILLS or TALENTS.
Are individuals engaged as legitimate job contractors required to fulfill the

requisites of legitimate job contracting as afore-described?
NO. They need not be registered as independent contractors with DOLE; they need not have
substantial capital. All that they are required is to have their tools consisting of SPECIAL SKILLS
or TALENTS.
What are examples of individuals as independent contractors?
1. Sonza v. ABS-CBN Broadcasting Corporation1 - TV and radio talents and others with
special talents and skills are not employees but legitimate independent contractors.
2. Orozco v. The Fifth Division of the Honorable Court of Appeals2 - A newspaper

columnist is not an employee but
an independent contractor of the newspaper publishing the column.
3. Jose Mel Bernarte v. Philippine Basketball Association3 - Basketball or soccer referee

or umpire, an independent contractor.
4. Semblante and Pilar v. CA, Gallera de Mandaue, et al.4 - Cockpit masiador and
sentenciador are independent contractors.
5. Escasinas v. Shangri-la’s Mactan Island Resort5 - A doctor may be engaged as an

independent contractor.
Responden t hotel resort, pursuant to Article 157 of the Labor Code
w hich requires that an employer which employs more than 200 workers, should “furnish” its employees with the
services of a full-time registered nurse, a part-
maintenance of a clinic and provision of medical services to its employees is required under Art.
157, which are not directly related to Shangri-la’s principal business - operation of hotels and
restaurants.
“As to payment of wages, respondent doctor is the one who underwrites the following: salaries,
SSS contributions and other benefits of the staff; group life, group personal accident insurance
and life/death insurance for the staff with minimum benefit payable at 12 times the employee’s
last drawn salary, as well as value added taxes and withholding taxes, sourced from her
P60,000.00 monthly retainer fee and 70% share of the service charges from Shangri-la’s guests
who avail of the clinic services.
“With respect to the supervision and control of the nurses and clinic staff, it is not disputed that a
document, ‘Clinic Policies and Employee Manual’ claimed to have been prepared by respondent
doctor exists, to which petitioners gave their conformity and in which they acknowledged their co-
terminus employment status. It is thus presumed that said document, and not the employee
manual being followed by Shangri-la’s regular workers, governs how they perform their respective
tasks and responsibilities.
“Contrary to petitioners’ contention, the various office directives issued by Shangri-la’s officers do
not imply that it is Shangri-la’s management and not respondent doctor who exercises control
over them or that Shangri-la has control over how the doctor and the nurses perform their work.
The letter addressed to respondent doctor dated February 7, 2003 from a certain Tata L. Reyes
giving instructions regarding the replenishment of emergency kits is, at most, administrative in
nature, related as it is to safety matters; while the letter dated May 17,
2004 from Shangri-la’s Assistant Financial Controller, Lotlot Dagat, forbidding the clinic from
receiving cash payments from the resort’s guests is a matter of financial policy in order to ensure
proper sharing of the proceeds,
considering that Shangri-la and respondent doctor share in the guests’ payments for medical
services rendered. In
fine, as Shangri-la does not control how the work should be performed by petitioners, it is not
petitioners’
employer.”
1 G.R. No. 138051, June 10, 2004.
2 G.R. No. 155207, Aug. 13, 2008.
3 G.R. No. 192084, Sept. 14, 2011.
4 G.R. No. 196426, Aug. 15, 2011.
5 G.R. No. 178827, March 4, 2009.
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2015 BAR EXAMS
LABOR-ONLY CONTRACTING.
When is there labor-only contracting?
(a) The contractor does not have substantial capital or investments in the form of tools,
equipment, machineries, work premises, among others, and the employees recruited and
placed are performing activities which are usually necessary or desirable to the
operation of the company, or directly related to the main business of the principal
within a definite or predetermined period, regardless of whether such job, work or
service is to be performed or completed within or outside the premises of the principal; OR
(b) The contractor does not exercise the right of control over the performance of the work of
the employee.
NOTE: Even if only one of the two (2) elements above is present, there is labor-only
contracting.
What are the effects of labor-only contracting?

the Labo r Code; while in the latter, the principal is considered the “dir
contractual employees in
ect employer” of the
1. The labor-only contractor will be treated as the agent or intermediary of the principal.
accordance with the last paragraph of Article 106 of the Labor Code.
Since the act of an agent is the act of the principal, representations made by the labor-only
contractor
3. to Bar
the employees
ChanRobles
In the former, will
the joint and bindobligation
several the principal.
of the principal and the legitimate job contractor is only for a limited
purpose, that is, to ensure that the employees are paid their wages. Other than this obligation of paying the wages,
the principal is not responsible for any claim made by the contractual employees; while in the latter, the principal
becomes jointly and severally or solidarily liable with the labor-only contractor to the latter’s employees in the same
2. The principal will become the employer as if it directly employed the workers supplied by
manner and extent that the principal is liable to employees directly hired by him/her, as provided in Article 106 of
the labor-only contractor to undertake the subcontracted job or service. It will be responsible
the Labor Code, as amended.
to them for all their entitlements and benefits under labor laws.
4. In the former, the legitimate job contractor undertakes to perform a specific job for the principal; while in the latter,
3. The principal and the labor-only contractor will be solidarily treated as the direct employer.
4. The employees will become employees of the principal, subject to the classifications of
employees under Article
280 of the Labor Code.
What are the distinctions between legitimate job contracting and labor-only
contracting?
The chief distinctions between legitimate job contracting, on the one hand, and the prohibited
labor-only contracting, on the other, may be summed up as follows:
1. In the former, no employer-employee relationship exists between the contractual

employees of the job contractor and the principal; while in the latter, an employer-employee
relationship is created by law between the principal and the contractual employees supplied by
the labor-only contractor.
2. In the former, the principal is considered only an “indirect employer,” as this term is
understood under Article 107 of
the labor-only contractor merely provides, supplies, recruits and places the personnel to work
for the principal.
What are the prohibitions other than labor-only contracting?
Contracting out of jobs, works or services when not done in good faith and not
justified by the exigencies of the business such as the following:
(1) Contracting out of jobs, works or services when the same results in the termination or
reduction of regular
employees and reduction of work hours or reduction or splitting of the bargaining unit.
(2) Contracting out of work with a "Cabo." "Cabo" refers to a person or group of persons or
to a labor group which, in the guise of a labor organization, cooperative or any entity, supplies
workers to an employer, with or without any monetary or other consideration, whether in the
capacity of an agent of the employer or as an ostensible independent contractor.
(3) Taking undue advantage of the economic situation or lack of bargaining strength
of the contractor's employees, or undermining their security of tenure or basic rights, or
circumventing the provisions of regular employment, in any of the following instances:
(i) Requiring them to perform functions which are currently being performed by the regular
employees of the principal; and
(ii) Requiring them to sign, as a precondition to employment or continued employment, an

antedated resignation letter; a blank payroll; a waiver of labor standards including minimum
wages and social or welfare benefits; or a quitclaim releasing the principal, contractor or from
any liability as to payment of future claims.
(4) Contracting out of a job, work or service through an in-house agency.
(5) Contracting out of a job, work or service that is necessary or desirable or directly related
to the business or operation of the principal by reason of a strike or lockout whether actual or
imminent.
(6) Contracting out of a job, work or service being performed by union members when such
will interfere with, restrain or coerce employees in the exercise of their rights to self-
organization as provided in Art. 248 (c) of the Labor Code, as amended.
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2015 BAR EXAMS
(7) Repeated hiring of employees under an employment contract of short duration or under a
Service Agreement of short duration with the same or different contractors, which circumvents
the Labor Code provisions on Security of Tenure.
(8) Requiring employees under a subcontracting arrangement to sign a contract fixing the
period of employment to a term shorter than the term of the Service Agreement, unless the
contract is divisible into phases for which substantially different skills are required and this is
made known to the employee at the time of engagement.
(9) Refusal to provide a copy of the Service Agreement and the employment contracts
between the contractor and the employees deployed to work in the bargaining unit of the
principal's certified bargaining agent to the sole and exclusive bargaining agent (SEBA).
(10) Engaging or maintaining by the principal of subcontracted employees in excess of those

provided for in the applicable Collective Bargaining Agreement (CBA) or as set by the Industry
Tripartite Council (ITC).
B.
DISMISSAL FROM EMPLOYMENT
What is meant by two-fold due process requirement?
Dismissal of employees requires the observance of the two-fold due process requisites,
namely:
Bar
1. Substantive aspect which means that the dismissal must be for any of the (1) just
ChanRobles
causes provided under Article
282 of the Labor Code or the company rules and regulations promulgated by the employer; or
(2) authorized causes under Articles 283 and 284 thereof; and
2. Procedural aspect which means that JUST

theCAUSES
employee must be accorded due process, the
elements of which are notice and the opportunity to be heard and to defend himself.
What are the just causes under the Labor Code?
What is the distinction between JUST CAUSES and AUTHORIZED CAUSES?

The just causes in the Labor Code are found in the following provisions thereof:
A dismissal based on a just cause means that the employee has committed a wrongful act or
omission; while a dismissal based on an authorized cause means that there exists a ground
(1) Article
which the 282 - (Termination
law itself allows or by the Employer) which
authorizes to provides for the following
be invoked grounds:the termination of an
to justify
employee even if he has not committed any wrongful act or omission such as in stallation of
labor-saving devices, redundancy, retrenchment, closure or cessation of business operations
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
or disease.
representative in connection with his work;
1.
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or
any immediate member of his family or his duly authorized representatives; and
(e) Other causes analogous to the foregoing.
(2) Article 264(a) - (Prohibited Activities) which provides for the termination of the
following:
(a) Union officers who knowingly participate in an illegal strike and therefore deemed to have
lost their employment status.
(b) Any employee, union officer or ordinary member who knowingly participates in the
commission of illegal acts during a strike (irrespective of whether the strike is legal or illegal),
is also deemed to have lost his employment status.
(3) Article 263(g) - (National Interest Cases) where strikers who violate orders, prohibitions
and/or injunctions as are issued by the DOLE Secretary or the NLRC, may be imposed
immediate disciplinary action, including dismissal or loss of employment status.
(4) Article 248(e) - (Union Security Clause) where violation of the union security agreement
in the CBA may result in termination of employment. Under this clause, the bargaining union
can demand from the employer the dismissal of an employee who commits a breach of union
security arrangement, such as failure to join the union or to maintain his membership in good
standing therein. The same union can also demand the dismissal of a member who commits
an act of disloyalty against it, such as when the member organizes a rival union.
What are just causes under jurisprudence?
In addition to the just causes mentioned in the Labor Code, just causes are also found in
prevailing jurisprudence. The following may be cited as just causes in accordance with
prevailing jurisprudence:
1. Violation of Company Rules and Regulations or Company Code of Discipline.
2. Theft of property owned by a co-employee as distinguished from company-owned

property which is considered serious misconduct.
3. Incompetence, inefficiency or ineptitude.
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2015 BAR EXAMS
4. Failure to attain work quota.
5. Failure to comply with weight standards of employer.
6. Attitude problem.
Is dismissal based on Company Code of Discipline or Company Rules and Regulations

illegal?
No.
In the 2013 case of Sampaguita Auto Transport Corporation v. NLRC, the Supreme Court
pronounced that the Court of Appeals erred in ruling that the dismissal of private respondent, a
bus driver of petitioner, was illegal because the “grounds upon which petitioners based
respondent’s termination from employment, viz.: ‘hindi lahat ng schedule nailalabas,’ [‘]mababa
ang revenue ng bus, laging kasama an[g] asawa sa byahe’ and ‘maraming naririnig na kwento
tungkol sa kanya, nag- uutos ng conductor para kumita sa hindi magandang paraan[,]’ xxx are
not among those enumerated under Article 282 of the Labor Code as just causes for termination of
employment.” The irregularities or infractions committed by private respondent in connection with
his work as a bus driver constitute serious misconduct or, at the very least, conduct analogous to
serious misconduct, under the above-cited Article 282 of the Labor Code. The requirement in the
company rules that: ‘3. to obey traffic rules and regulations as well as the company
policies. 4. to ensure the safety of the riding public as well as the other vehicles and
motorist (sic)’ is so fundamental and so universal that any bus driver is expected to satisfy the
requirement whether or not he has been so informed.
I.
SERIOUS MISCONDUCT
1.
REQUISITES.
For misconduct or improper behavior to be a just cause for dismissal, the following requisites must
concur:
1. It must be serious; and
2. It must relate to the performance of the employee’s duties; and
3. It must show that he has become unfit to continue working for the employer. All the above
three (3) requisites must concur.
2. SOME PRINCIPLES ON SERIOUS MISCONDUCT.
• Serious misconduct implies that it must be of such grave and aggravated character and not
merely trivial or unimportant.
• Simple or minor misconduct would not justify the termination of the services of an employee.
• Possession or use of shabu or other drugs is a valid ground to terminate employment.
• Immorality, as a general rule, is not a just ground to terminate em
The exception is when such immoral ployment.
conduct is prejudicial or detrimental to the interest of the employer.
• Gambling within company premises is a serious misconduct.
• Rendering service to business rival is a just cause to terminate employment.
• Selling products of a competitor is a just cause for termination.
• Organizing a credit union by employees in a bank is a serious misconduct.
• Deceiving a customer for personal gain is a just cause for termination.
• Contracting work in competition with employer constitutes serious misconduct.
• Intoxication which interferes with the employee’s work constitutes serious misconduct.
• The act of a teacher in pressuring a colleague to change the failing grade of a student is serious
misconduct.
• Sexual harassment is a just ground to dismiss.
• Sleeping while on duty is a ground for termination.
• Dismissal is too harsh a penalty for eating while at work.
• Pilferage or theft of company-owned property is a just cause to terminate.
• Theft of funds or property not owned by employer is not a ground to terminate.
• Act of falsification is a valid ground to terminate employment.
• Punching-in of time cards of other employees is a just cause for termination.
II. INSUBORDINATION
OR WILLFUL DISOBEDIENCE OF LAWFUL ORDERS
1. REQUISITES.
One of the fundamental duties of an employee is to obey all reasonable rules, orders and
instructions of the employer. In order to validly invoke this ground, the following requisites must
be complied with, to wit:
1. The employee’s assailed conduct must have been willful or intentional, the willfulness being
characterized by a wrongful and perverse attitude; and
2. The order violated must be based on a reasonable and lawful company rule, regulation or
policy and made known to the employee and must pertain to the duties for which he has been
engaged to discharge.
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2015 BAR EXAMS
2. SOME PRINCIPLES ON INSUBORDINATION.
Making false allegations in complaint does not constitute insubordination.
Failure to answer memo to explain constitutes willful disobedience.
Another notice is required in case of termination on the ground of failure to answer memo to
explain.
Refusal to undergo random drug testing constitutes both serious misconduct and
insubordination.
Refusal to render overtime to meet production deadline constitutes insubordination.
Refusal to comply with a lawful transfer constitutes insubordination.
III.
GROSS AND HABITUAL NEGLECT OF DUTIES
1.
REQUISITE
S.
The following are the requisites:
(1) There must be negligence which is gross and/or habitual in character; and
(2) It must be work-related as would make him unfit to work for his employer.
they amount to gr oss and habitual neglect of duties.

2. SOME PRINCIPLES ON GROSS AND HABITUAL NEGLECT OF DUTIES.
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IV.
Simple negligence is not sufficient to terminate employment.
ABANDONMENT OF WORK
The negligence must be gross in character which means absence of that diligence that an
ordinarily prudent man would use in his own affairs.
1. CONCEPT.
As a general rule, negligence must be both gross and habitual to be a valid ground to
dismiss.
Abandonment is a form of neglect of duty; hence, a just cause for termination of employment under Article 282 [b] of
the Labor Code.may be disregarded if negligence is gross or the damage or loss is substantial.
Habituality
“Habitual negligence” implies
2. REQUISITES.
repeated failure to perform one’s duties for a period of time, depending upon the
circumstances.
Actual damage, loss or injury is not an essential requisite.
Gross negligence may result to loss of trust and confidence.
Absences, if authorized, cannot be cited as a ground to terminate employment.
Tardiness or absenteeism, if not habitual, cannot be cited as a ground to terminate

employment.
Tardiness or absenteeism, if habitual, may be cited as a ground to terminate employment.
Tardiness or absenteeism, if habitual, may be tantamount to serious misconduct.
Absences or tardiness due to emergency, ailment or fortuitous event are justified and may
not be cited as just cause to terminate employment.
Unsatisfactory or poor performance, inefficiency and incompetence are considered

just causes for dismissal only if
To constitute abandonment, two (2) elements must concur, namely:
1. The employee must have failed to report for work or must have been absent without valid
or justifiable reason; and
2. There must have been a clear intention on the part of the employee to sever the employer-
employee relationship manifested by some overt act.
3. SOME PRINCIPLES ON ABANDONMENT.
Mere absence is not enough to constitute abandonment.
Clear intention to sever employment relationship is necessary.
Due process in abandonment cases consists only of the service of 2 notices to the
employee, viz.:
a. First notice directing the employee to explain why he should not be declared as having
abandoned his job; and b. Second notice to inform him of the employer’s decision to dismiss
him on the ground of abandonment.
No hearing is required to validly dismiss an employee for abandonment.
Notices in abandonment cases must be sent to employee’s last known address per record
of the company. The
employer need not look for the employee’s current whereabouts.
Immediate filing of a complaint for illegal dismissal praying for reinstatement negates
abandonment.
Lapse of time between dismissal and filing of a case is not a material indication of
abandonment. Hence, lapse of 2 years and 5 months or 20 months or 9 months or 8 months
before filing the complaint for illegal dismissal is not an indication of
abandonment. Under the law, the employee has a 4-year prescriptive period within which to
institute his action for illegal dismissal.
Filing of a case to pre-empt investigation of the administrative case is tantamount to

abandonment.
When what is prayed for in the complaint is separation pay and not reinstatement,
the filing of complaint does not negate abandonment.
It is abandonment when what is prayed for in the complaint is separation pay and it was only
in the position paper that reinstatement was prayed for.
Employment in another firm coinciding with the filing of complaint does not indicate
abandonment.
Offer of reinstatement by employer during proceedings before Labor Arbiter and refusal by
employee does not indicate abandonment but more of a symptom of strained relations
between the parties.
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2015 BAR EXAMS
An employee may be absolved from the charge of abandonment of work but adjudged guilty
of AWOL. These two grounds are separate and distinct from each other.
An employee who failed to report for work after the expiration of the duly approved leave of
absence is considered to have abandoned his job.
An employee who failed to comply with the order for his reinstatement is deemed to have
abandoned his work.
An employee who, after being transferred to a new assignment, did not report for work
anymore is deemed to have abandoned his job.
An employee who deliberately absented from work without leave or permission from his
employer for the purpose of looking for a job elsewhere is deemed to have abandoned his
work.
Imprisonment or detention by military does not constitute abandonment.
Absence to evade arrest is not a valid justification. To do so would be to place an imprimatur

on the employee’s attempt to
derail the normal course of the administration of justice.
V. FRAUD
VI.
1. REQUISITES.
WILLFUL BREACH OF TRUST AND CONFIDENCE
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The following are the requisites of this ground:
1. REQUISITES.
For the doctrine of loss of trust and confidence to apply, the following requisites must be satisfied:
1. There(1)
mustThebe an act,
employee omission,
holds a position ofor
trustconcealment;
and confidence;
2. The act,
(2) omission
There existsoranconcealment
act justifying theinvolves a breach
loss of trust of legal
and confidence, duty,
which trust,
means or confidence
that the act that betraysjustly
the
reposed;
employer’s trust must be real, i.e., founded on clearly established facts;
3. It must be committed against the employer or his/her representative; and
(3) The employee’s breach of the trust must be willful, i.e., it was done intentionally, knowingly and purposely, without
4. It must be in connection with the employees' work.1
2. SOME PRINCIPLES ON FRAUD.
Failure to deposit collection constitutes fraud.
Lack of damage or losses is not necessary in fraud cases. The fact that the employer did not
suffer losses from the dishonesty of the dismissed employee because of its timely discovery
does not excuse the latter from any culpability.
Lack of misappropriation or shortage is immaterial in case of unauthorized encashment of

personal checks by teller and cashier.
Restitution does not have absolutory effect.
justifiable excuse; and
(4) The act must be in relation to his work which would render him unfit to perform it.
2. GUIDELINES.
As a safeguard against employers who indiscriminately use “loss of trust and confidence” to
justify arbitrary dismissal of employees, the Supreme Court, in addition to the above
elements, came up with the following guidelines for the application of the doctrine:
(1) The loss of confidence must not be simulated;
(2) It should not be used as a subterfuge for causes which are illegal, improper or
unjustified; (3) It may not be arbitrarily asserted in the face of overwhelming evidence to the
contrary; and (4) It must be genuine, not a mere afterthought, to justify earlier action taken
in bad faith.
The foregoing guidelines have been prescribed by the Supreme Court due to the subjective
nature of this ground which makes termination based on loss of trust and confidence prone to
abuse.
3. SOME PRINCIPLES ON THE DOCTRINE OF LOSS OF TRUST AND CONFIDENCE.
Employee’s position must be reposed with trust and confidence.
“Position of trust and confidence” is one where a person is entrusted with confidence on
delicate matters, or with the
custody, handling, or care and protection of the employer’s property.
Two (2) classes of positions of trust. The first class consists of managerial employees
or those who, by the nature of their position, are entrusted with confidential and delicate
matters and from whom greater fidelity to duty is correspondingly expected. They refer to
those 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 or to
effectively recommend such managerial actions. Their primary duty consists of the
management of the establishment in which they are employed or of a department or a
subdivision thereof.
The second class includes “cashiers, auditors, property custodians, or those who, in the
normal and routine exercise of their functions, regularly handle significant amounts of [the
employer’s] money or property.” They are fiduciary rank-and-file employees who, though
rank-and-file, are routinely charged with the custody, handling or care and protection of the
employer's money or property, or entrusted with confidence on delicate matters, and are thus
classified as occupying positions of trust and confidence.
1 Per latest DOLE Department Order No. 147-15, series of 2015, September 07, 2015.
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2015 BAR EXAMS
Rules on termination of managerial and supervisory employees different from those

applicable to rank-and-file employees. Thus, with respect to rank-and-file personnel,
loss of trust and confidence as a ground for valid dismissal requires proof of involvement in
the alleged events in question and that mere uncorroborated assertions and accusations by
the employer will not be sufficient. But as regards a managerial employee, the mere
existence of a basis for believing that he has breached the trust of his employer would suffice
for his dismissal.
There must be “some basis” for the loss of trust and confidence which means that there is
reasonable ground to believe, if not to entertain the moral conviction, that the concerned
employee is responsible for the misconduct and that the nature of his participation therein
rendered him absolutely unworthy of trust and confidence demanded by his position.
Dismissal due to feng shui mismatch is not a valid ground to lose trust and confidence.
Command responsibility of managerial employees is a ground to dismiss.
Confidential employee may be dismissed for loss of trust and confidence.
Grant of promotions and bonuses negates loss of trust and confidence.
Long years of service, absence of derogatory record and small amount involved are deemed
inconsequential insofar as loss of trust and confidence is concerned.
Dropping of criminal charges or acquittal in a criminal case arising from the same act does
not affect the validity of dismissal based on loss of trust and confidence.
Full restitution does not absolve employee of offense which resulted in the loss of trust and
Because of its gr
confidence. avity, work-relation is not necessary. Neither is it necessary to
mission of the criminal act
show that the com
would render the employee unfit to perform his work for the employer.
VII.
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COMMISSION OF CRIME OR OFFENSE VIII.
OTHER ANALOGOUS CAUSES
1. REQUISITES.
1. ANALOGOUS CAUSES UNDER ESTABLISHED JURISPRUDENCE.
The following are the requisites for the valid invocation of this ground:
The following may be cited as analogous causes:
1. A crime or offense was committed by the employee;
2. It was committed against any of the following persons: (a) His employer;
(b) Any immediate member of his employer’s family; or
(c) His employer’s duly authorized representative.
2. SOME PRINCIPLES ON THE COMMISSION OF CRIME OR OFFENSE.
1) Violation of company rules and regulations.
2) Theft of property owned by a co-employee, as distinguished from theft of property owned

by the employer.
3) Incompetence, inefficiency or ineptitude.
4) Failure to attain work quota.
5) Failure to comply with weight standards of employer.
6) “Attitude problem” is analogous to loss of trust and confidence.
IX.
TERMINATION DUE TO ENFORCEMENT OF UNION SECURITY CLAUSE
What is a union security clause?
The “union security clause” is a stipulation in a CBA which allows the parties thereto to enter
into an agreement requiring membership in the exclusive collective bargaining agent which
successfully negotiated said CBA as a condition for continued employment with the exception
of employees who are already members of another union at the time of the signing of the
CBA.
What are the effects of application of this clause?
The following are the effects:
a. On members of the bargaining union/agent. They are not allowed to resign or

terminate their membership therefrom. Any member of the bargaining agent who resigns or
is expelled therefrom may be recommended to the employer by the bargaining agent for
termination of his employment.
b. On non-members of the bargaining union/agent but members of the minority

union/s. They are not bound by the union security clause if they are members of the minority
or other unions at the time of the signing of the CBA. Hence, they cannot be compelled to
resign from their union/s in order to join the bargaining agent.
c. On non-members of the bargaining union/agent or of any minority union/s. If not

a member of the bargaining agent or any other unions in the bargaining unit at the time of the
signing of the CBA by reason of the fact that he is excepted from the coverage of the
bargaining unit, the employee cannot be compelled to join the bargaining agent.
d. On new employees hired after the signing of the CBA containing the union
security clause. They can be compelled to join the bargaining agent. If they refuse, they can
be recommended for termination.
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2015 BAR EXAMS
Is there an exception to this rule?
Yes. An employee cannot be compelled to join a union based on religious ground. For example:
members of the
Iglesia ni Kristo (INK) cannot be compelled to join a union; hence, they are not bound by the
union security doctrine.
What are the requisites in order to validly terminate employees based on this clause?
(1) The union security clause is applicable;
(2) The bargaining union is requesting for the termination of employment due to enforcement of
the union security provision in the CBA; and
(3) There is sufficient evidence to support the union’s decision to expel the employee from the
union.
All the foregoing requisites should be complied with to justify the termination of employment.
OTHER CAUSES PER DEPARTMENT ORDER NO. 147-15, SERIES OF 2015 (07 SEPTEMBER
2015):1
An employee found positive for use of dangerous drugs shall be dealt with administratively
which shall be a ground for suspension or termination.2
An employee shall not be terminated from work based on actual, perceived or suspected
HIV status.3
An employee shall not be terminated on basis of actual, perceived or suspected Hepatitis B

status.4
An employee who has or had Tuberculosis shall not be discriminated against. He/she shall be
entitled to work for as long as they are certified by the company's accredited health provider as
medically fit and shall be restored to work as soon as his/her illness is controlled.5
An employee may also be terminated based on the grounds provided for under the CBA.
2. AUTHORIZED CAUSES
What are the 2 classes of authorized cause termination?
Under the Labor Code, authorized causes are classified into two (2) classes, namely:
(1) Business-related causes. – Referring to the grounds specifically mentioned in Article 283, to
wit:
a. Installation of labor-saving device;
b. Redu ndancy;
cost-cutting measures;
3. Two (2) separate written notices are served on both the affected employees and the DOLE
at least one (1)
month prior to the intended date of termination;
4. Separation pay is paid to the affected employees, to wit:
(a) If based on (1) installation of labor-saving device, or (2) redundancy. - One (1) month
pay or at least one (1) month pay for every year of service, whichever is higher, a fraction of at
least six (6) months shall be considered as one (1) whole year.
(b) If based on (1) retrenchment, or (2) closure NOT due serious business losses or
financial reverses. - One (1) month pay or at least one-half (½) month pay for every year of
service, whichever is higher, a fraction of at least six (6) months shall be considered as one (1)
whole year.
(c) If closure is due to serious business losses or financial reverses, NO separation pay is required
to be paid.
(d) In case the CBA or company policy provides for a higher separation pay, the same must be
followed instead of the one provided in Article 283.
5. Fair and reasonable criteria in ascertaining what positions are to be affected by the
termination, such as, but not limited to: nature of work; status of employment (whether casual,
temporary or regular); experience; efficiency; seniority; dependability; adaptability; flexibility;
trainability; job performance; discipline; and attitude towards work.
Failure to follow fair and reasonable criteria in selecting who to terminate would render the
termination invalid.
I.
INSTALLATION OF LABOR-SAVING DEVICE
What are the additional requisites unique to this ground?
In addition to the five (5) common requisites above, the unique requisites are as follows:
1. There must be introduction of machinery, equipment or other devices; and
1 See Section 6 thereof. (Other Causes of Termination.) xxx
2 DOLE Department Order No. 53, Series of 2003 in relation to the IRR of R.A. 9165.
3 DOLE Department Order No. 102, Series of 2010.
4 DOLE Department Advisory No.5, Series of 2010 Part III C1. par. c.
5 DOLE Department Order No. 75, Series of 2005.
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2015 BAR EXAMS
2. The purpose for such introduction must be valid such as to save on cost, enhance efficiency
and other justifiable economic reasons.1
II. REDUNDANCY
What are the additional requisites unique to this ground?
The additional requisites are as follows:
1. There must be superfluous positions or services of employees;
2. The positions or services are in excess of what is reasonably demanded by the actual
requirements of the enterprise to operate in an economical and efficient manner; and
3. There must be an adequate proof of redundancy such as but not limited to the new staffing
This is the only statutory ground in Article 283 which requires this kind
pattern, feasibility erstudies/proposal,
grounds of closure or on the viability of the newly created positions, job
of proof. The oth
description and the approval by the management of the restructuring.2
cessation of business operations may be resorted to with or without losses.
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III. RETRENCHMENT
What are some relevant principles on retrenchment?
The fact that there has been economic or other crisis besetting a particular sector or the country as a whole is not sufficient
justification for retrenchment.
The phrase “retrenchmen o preven losses” means that retrenchment must be undertaken by the employer before the
What areanticipated
losses the additional
are actually requisites unique
sustained or realized. The to this need
employer ground?
not keep all his employees until after his losses
shall have materialized. Otherwise, the law could be vulnerable to attack as undue taking of property for the benefit of
Per latest issuance of the DOLE, 3 the following are the additional requisites:
another.
1. The retrenchment must be reasonably necessary and likely to prevent business losses;
2. The losses, if already incurred, are not merely de minimis, but substantial, serious,
actual and real, or if only expected, are reasonably imminent;
3. The expected or actual losses must be proved by sufficient and convincing evidence;4 and
4. The retrenchment must be in good faith for the advancement of its interest and not to
defeat or circumvent the employees' right to security of tenure.
tt t
Best evidence of losses - financial statements audited by independent auditors (not

by internal auditors).
Best evidence of losses in a government-controlled corporation - financial

statements audited by COA.
Income tax returns, not valid since they are self-serving documents.
Mere affidavit on alleged losses is not sufficient.
Retrenchment effected long after the business losses is not valid.
Profitable operations in the past do not affect the validity of retrenchment.
Retrenchment due to liquidity problem is not valid.
Sharp drop in income is not a ground to justify retrenchment. A mere decline in gross
income cannot in any manner be considered as serious business losses. It should be
substantial, sustained and real.
Litany of woes, in the absence of any solid evidence that they translated into specific and
substantial losses that would
necessitate retrenchment, will not suffice to justify retrenchment.
Rehiring of retrenched employees does not necessarily indicate illegality of retrenchment.
In an enterprise which has several branches nationwide, profitable operations in

some of them will not affect the validity of the retrenchment if overall, the financial
condition thereof reflects losses.
IV.
CLOSURE OR CESSATION OF BUSINESS OPERATIONS
Can an employer close its business even if it is not suffering from business losses?
Yes. In fact, closure involves two (2) situations:
(a) When NOT due to serious business losses or financial reverses; or
(b) When due to serious business losses or financial reverses
It is only in the first that payment of separation pay is required. No such requirement is
imposed in the second.
What are some relevant principles on closure?
Principle of closure under Article 283 applies in cases of both total and partial closure or
cessation of business operations. Management may choose to close only a branch, a
department, a plant, or a shop.
1 Per latest DOLE Department Order No. 147-15, series of 2015, September 07, 2015.
2 Id.
3 Id.
4 Balasabas v. NLRC, G.R. No. 85286, August 24,1992; Central Azucarerra dela Carlota v.
NLRC, G.R. No. 100092, December 29, 1995.
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2015 BAR EXAMS
Closure of department or section and hiring of workers supplied by independent contractor as

replacements is valid.
Relocation of business may amount to cessation of operations.
Closure of business to merge or consolidate with another or to sell or dispose all of its assets,
held valid.
Audited financial statements necessary only in closure due to losses.
V. DISEASE
1. THE DEOFERIO DOCTRINE ON THE REQUISITES.
Disease is one of the authorized causes to terminate employment. In the 2014 case of
Deoferio v. Intel Technology Philippines, Inc.,1 the Supreme Court divided into two
the requisites that must be complied with before termination of employment due to
disease may be justified, namely:
(1) Substantive requisites; and
(2) Procedural requisites.
1.1. THE DEOFERIO RULE ON SUBSTANTIVE REQUISITES.
The following are the three (3) substantive requisites:

from autho rized cause termination under Article 298 [283].
(1) An employee has been found to be suffering from any disease;
(2) His continued employment is prohibited by law or prejudicial to his health, as well as to
From
the health ofthese perspectives,
his co- employees;it was held
andin Deoferio that the CA erred in not finding that the NLRC gravely abused its
ChanRobles
Bar
discretion when it ruled that the twin-notice requirement does not apply to Article 284 (Disease) of the Labor Code. This
(3) A competent
conclusion is totally devoidpublic health
of any legal authority
basis; its ruling is issues a medical
wholly unsupported certificate
by law that the
and jurisprudence. disease
In other words,istheof
such nature or at such a stage that it cannot be cured within a period of six (6) months even
NLRC’s
with unprecedented,
proper medical whimsical and arbitrary ruling, which the CA erroneously affirmed, amounted to a jurisdictional error.
treatment.2
2. THE FUJI RULE – THE EMPLOYEE SHOULD BE GIVEN THE CHANCE TO PRESENT COUNTERVAILING MEDICAL
1.2. THE DEOFERIO RULE ON PROCEDURAL REQUISITES.
CERTIFICATES.
Deoferio,Subsequent
finally topronounced
Deoferio, anotherthe
2014rule
case, that the employer
Fuji Television Network, Inc.must furnish
v. Arlene the 3 has
S. Espiritu, employee
further
two (2) written
expounded on the due notices in terminations
process requirement due
in termination duetoto disease,
disease, thisnamely:
time by categorically specifying the right of the
(1) The notice to apprise the employee of the ground for which his dismissal is sought; and
(2) The notice informing the employee of his dismissal, to be issued after the employee has
been given reasonable opportunity to answer and to be heard on his defense.
Due process in termination due to disease is similar to due process for just cause
termination but different
ailing employee to present countervailing evidence in the form of medical certificates to prove
that his dismissal due to disease is not proper and therefore illegal.
Respondent Arlene was petitioner’s news correspondent/producer “tasked to report Philippine

news to Fuji through its Manila Bureau field office.” She was successively given yearly fixed-
term employment contracts until she was diagnosed with lung cancer sometime in January
2009 when the Chief of News Agency of Fuji informed her “that the company will have a
problem renewing her contract” since it would be difficult for her to perform her job. She,
however, “insisted that she was still fit to work as certified by her attending physician.”
Subsequently, Arlene and Fuji signed a non-renewal contract where it was stipulated that her
contract would no longer be renewed after its expiration on May 31, 2009 and that the parties
release each other from liabilities and responsibilities under the employment contract. Arlene
received her unpaid salaries and bonuses bu t she affixed her signature on the non-renewal
contract with the initials “U.P.” for “under protest.” The day after Arlene signed the non-
renewal contract, she filed a complaint for illegal dismissal and attorney’s fees with the Labor
Arbiter, alleging that she was forced to sign the non-renewal contract when Fuji came to know
of her illness and that Fuji withheld her salaries and other benefits for March and April 2009
when she refused to sign. Arlene claimed that she was left with no other recourse but to sign
the non-renewal contract, and it was only upon signing that she was given her salaries and
bonuses, in addition to separation pay equivalent to 4 years.
The Supreme Court declared respondent Arlene as having been constructively dismissed. It
was likewise held here that respondent was not afforded due process, thus:
“There is no evidence showing that Arlene was accorded due process. After informing her
employer of her lung cancer, she was not given the chance to present medical
certificates. Fuji immediately concluded that Arlene could no longer perform her duties
because of chemotherapy. It did not ask her how her condition would affect her work. Neither
did it suggest for her to take a leave, even though she was entitled to sick leaves. Worse, it
did not present any certificate from a competent public health authority. What Fuji did was to
inform her that her contract would no longer be renewed, and when she did not agree, her
salary was withheld. Thus, the Court of Appeals correctly upheld the finding of the National
Labor Relations Commission that for failure of Fuji to comply with due process, Arlene was
illegally dismissed.”
1 G.R. No. 202996, June 18, 2014.
2 Per Deoferio v. Intel Technology Philippines, Inc., supra.
3 Fuji Television Network, Inc. v. Arlene S. Espiritu, G.R. Nos. 204944-45, Dec. 03, 2014.
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2015 BAR EXAMS
What are some salient points to consider under this ground?
If the disease or ailment can be cured within the period of six (6) months with proper medical
treatment, the employer should not terminate the employee but merely ask him to take a
leave of absence. The employer should reinstate him to
his former position immediately upon the restoration of his normal health.
In case the employee unreasonably refuses to submit to medical examination or treatment

upon being requested to do so, the employer may terminate his services on the ground of
insubordination or willful disobedience of lawful order.
A medical certificate issued by a company’s own physician is not an acceptable

certificate for purposes of terminating an employment based on Article 284, it having been
issued not by a “competent public health authority,” the
person referred to in the law.
A “competent public health authority” refers to a government doctor whose medical

specialization pertains to the disease being suffered by the employee. For instance, if
the employee suffers from tuberculosis, the medical certificate should be issued by a
government-employed pulmonologist who is competent to make an opinion thereon. If the
employee has cardiac symptoms, the competent physician in this case would be a cardiologist.
The medical certificate should be procured by the employer and not by the
employee.
3. Are the twin-no tice requirement and hearing required in all cases of
terminat ion?
DUE PROCESS
BarChanRobles
No. The two-notice
(a) Twin-Notice requirement and hearing are required only in case of just cause termination in the following order:
Requirement
(b) Hearing; Meaning of Opportunity to be Heard

1. Service of first written notice;
What is the oflatest

2. Conduct hearing;rule
and on due process?
3. Service of second written notice.

Due process means compliance with both STATUTORY due process and
CONTRACTUAL due process. CONSTITUTIONAL due process is not applicable (Per
Agabon doctrine).
What is the King of Kings Transport doctrine on just cause procedural due process?
Statutory due process refers to the one prescribed in the Labor Code (Article 277[b]); while
contractual due process refers to the one prescribed in the Company Rules and Regulations
(Per Abbott Laboratories doctrine).
Contractual due process was enunciated in the 2013 en banc ruling in Abbott
Laboratories, Philippines v. Pearlie Ann F. Alcaraz.1 Thus, it is now required that in
addition to compliance with the statutory due process, the employer should still comply with
the due process procedure prescribed in its own company rules. The employer’s failure to
observe its own
company-prescribed due process will make it liable to pay an indemnity in the form of nominal
damages, the amount of which is equivalent to the P30,000.00 awarded under the Agabon
doctrine.
Based on this doctrine which was enunciated in King of Kings Transport, Inc. v. Mamac,2
the following requirements should be complied with in just cause termination:
(1) First written notice.
The first written notice to be served on the employee should:
a) Contain the specific causes or grounds for termination against him;
b) Contain a directive that the employee is given the opportunity to submit his written
explanation within the reasonable period of FIVE (5) CALENDAR DAYS from receipt of the
notice:
1) to enable him to prepare adequately for his defense;
2) to study the accusation against him;
3) to consult a union official or lawyer;
4) to gather data and evidence; and
5) to decide on the defenses he will raise against the complaint.
c) Contain a detailed narration of the facts and circumstances that will serve as basis for the
charge against the employee. This is required in order to enable him to intelligently prepare
his explanation and defenses. A general description of the charge will not suffice.
d) Specifically mention which company rules, if any, are violated and/or which among the
grounds under Article 282 is being charged against the employee.
(2) Hearing required,
After serving the first notice, the employer should schedule and conduct a hearing or
conference wherein the employee will be given the opportunity to:
1) explain and clarify his defenses to the charge/s against him;
2) present evidence in support of his defenses; and
3) rebut the evidence presented against him by the management.
1 G.R. No. 192571, July 23, 2013.
2 G.R. No. 166208, June 29, 2007.
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2015 BAR EXAMS
During the hearing or conference, the employee is given the chance to defend himself
personally, with the assistance of a representative or counsel of his choice. Moreover, this
conference or hearing could be used by the parties as an opportunity to come to an amicable
settlement.
(3) Second written notice.
After determining that termination of employment is justified, the employer shall serve the
employees a written notice of termination indicating that:
1) all circumstances involving the charge/s against the employee have been considered; and
2) grounds have been established to justify the severance of his employment.
What is the Perez doctrine on hearing?
The Perez doctrine enunciates the new guiding principle on the hearing requirement. It has
interpreted the term
“ample opportunity to be heard” as follows:
(a) “Ample opportunity to be heard” means any meaningful opportunity (verbal or

written) given to the employee to answer the charges against him and submit evidence in
support of his defense, whether in a hearing, conference or some other fair, just and
(1) way.
reasonable the em ployee to be terminated; and
(2) the appropriate DOLE Regional Office, at least one (1) month before the intended date of the termination
(b) A formal hearing or conference is no longer mandatory. It becomes mandatory
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Bar
specifying the ground/s therefor and the undertaking to pay the separation pay required under Article 283 of the
only under any of the following circumstances:
Labor Code.
(1) When requested by the employee in writing; or (2) When substantial evidentiary
For obvious reason, hearing is not required.
disputes exist; or (3) When a company rule or practice requires it; or (4) When similar
circumstances justify it.
Are the twin-notice requirement and hearing applicable to an abandonment case which is a just cause to terminate
employment?
(c) the “ample opportunity to be heard” standard in the Labor Code prevails over the
“hearing No. or conference”
Although considered asrequirement
a just cause to in its Implementing
terminate Rules
employment, the due andrequirement
process Regulations. This
is different. No is
how the Supreme Court resolved the conflict in the following provisions of the Labor Code and
its implementing rules:
The Perez doctrine is now the prevailing rule as shown by a catena of cases which cited it after
its promulgation.
Are the twin-notice requirement and hearing applicable to authorized cause

termination?
No. Due process in authorized cause termination is deemed complied with upon the separate
and simultaneous service of a written notice of the intended termination to both:
hearing is required (since the employee has already abandoned his job) but the following
notices should be complied with:
1) First notice asking the employee to explain why he should not be declared as having
abandoned his job; and
2) Second notice informing him of the employer’s decision to dismiss him on the ground of
abandonment.
What are some notable principles on the hearing requirement?
If employee does not answer, hearing should still proceed.
Outright termination violates due process.
Investigation still required even if incident was witnessed by many.
Meeting, dialogue, consultation or interview is not the hearing required by law. It may not be
a substitute for the actual holding of a hearing.
Prior consultation with union is not part of the due process requirement.
Cross-examination or confrontation of witnesses is not necessary in company

investigations.
Co-conspirator’s confession is not sufficient to merit dismissal.
What are the instances where hearing is not required?
Hearing is not required in the following cases:
1. Termination of project, seasonal, casual or fixed-term employment.
2. Termination of probationary employment on the ground of failure of the

probationary employee to qualify as a regular employee in accordance with
reasonable standards made known to him at the start of the employment.
3. Termination due to abandonment of work.
4. Termination due to authorized causes under Article 283 (installation of labor-saving

device, redundancy, retrenchment or closure of business or cessation of operations). In such
cases, there are no allegations which the employees should refute and defend themselves
from.
5. Termination due to disease under Article 284.
6. Termination by the employee (resignation) under Article 285.
7. Termination after 6 months of bona-fide suspension of operation under Article 286. For
purposes of satisfying due process, what is required is simply that the notices provided under
Article 283 be served to both the affected employees and the DOLE at least one (1) month
before the termination becomes effective.
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2015 BAR EXAMS
8. Termination due to retirement under Article 287.
9. Termination due to closure or stoppage of work by government authorities when

non-compliance with the law or implementing rules and regulations poses grave and imminent
danger to the health and safety of workers in the workplace.
10. Termination of employee who has admitted his guilt for the offense charged.
What are the seven (7) standard situations in termination cases?
The rules on termination of employment in the Labor Code and pertinent jurisprudence are
applicable to seven (7)
different situations, namely:
1. The dismissal was for a just cause under Article 282, for an authorized cause under Article
283, or for health reasons under Article 284, and due process was observed – This termination
is LEGAL.
2. The dismissal was without a just or authorized cause but due process was observed – This
termination is ILLEGAL.
(3) Other benefits or their monetary equivalent.
3. The dismissal was without a just or authorized cause and due process was not observed –
This termination is
2. OTHER RELIEFS NOT FOUND IN ARTICLE 279 BUT AWARDED IN ILLEGAL DISMISSAL CASES PER
ILLEGAL. ChanRobles
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JURISPRUDENCE.
The following reliefs that are awarded in illegal dismissal cases are missing in Article 279:
4. The dismissal
(1) Award ofwas for a pay
separation justin or
lieuauthorized cause but due process was not observed – This
of reinstatement.
termination is LEGAL.
(2) Award of penalty in the form of nominal damages in case of termination due to just or authorized cause but
without observance of procedural due process.

5. The dismissal was for a non-existent cause – This termination is ILLEGAL.
(3) Reliefs to illegally dismissed employee whose employment is for a fixed period. The proper relief is only the
6. The dismissal was not supported by any evidence of termination – This termination is
NEITHER LEGAL NOR ILLEGAL as there is no dismissal to speak of. Reinstatement is
ordered not as a relief for illegal dismissal but on equitable ground.
7. The dismissal was brought about by the implementation of a law – This termination is
LEGAL.
C.
RELIEFS FOR ILLEGAL DISMISSAL
1. RELIEFS UNDER ARTICLE 279 OF THE LABOR CODE.
Under this article, an illegally dismissed employee is entitled to the following reliefs: (1)
Reinstatement without loss of seniority rights and other privileges;
(2) Full backwages, inclusive of regular allowances; and
payment of the employee’s salaries corresponding to the unexpired portion of the

employment contract. (4) Award of damages and attorney’s fees.
(5) Award of financial assistance in cases where the employee’s dismissal is declared legal
but because of long
years of service, and other considerations, financial assistance is awarded.
(6) Imposition of legal interest on separation pay, backwages and other monetary
awards.
1. REINSTATEMENT
a.
REINSTATEMENT PENDING APPEAL (Article 223, Labor Code)
Is reinstatement pending appeal solely applicable to reinstatement ordered by

the Labor Arbiter?
Yes. Reinstatement is self-executory or immediately executory only if it is ordered by the

Labor Arbiter. This means that the employee ordered reinstated need not file any motion for
the issuance of writ of execution to enforce reinstatement. The employer, in fact, is required
to manifest within 10 days from his receipt of the order of reinstatement which of the two (2)
options he is taking:
(1) To reinstate the employee to his former position or to a substantially equivalent position;
or
(2) To reinstate him in the payroll, which means the employee need not report for work but
only for the purpose of getting his wage.
There is no way the employer can disregard the reinstatement order. Posting of a bond does
not stay the execution of immediate reinstatement.
In contrast, if ordered by the NLRC, on appeal, or the Court of Appeals, under a Rule 65
certiorari petition, or even by the Supreme Court, reinstatement is not immediately executory.
This means that the employee reinstated should still file a motion for issuance of writ of
execution to enforce the reinstatement.
Are there instances where writ of execution of Labor Arbiter’s reinstatement

order is still required?
Yes, under the 2011 NLRC Rules of Procedure, there are two (2) instances when a writ of
execution should still be issued immediately by the Labor Arbiter to implement his order of
reinstatement, even pending appeal, viz.:
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2015 BAR EXAMS
(1) When the employer disobeys the Rules-prescribed directive to submit a report of compliance
within ten (10)
calendar days from receipt of the decision; or
(2) When the employer refuses to reinstate the dismissed employee.
The Labor Arbiter shall motu proprio issue a corresponding writ to satisfy the reinstatement wages
as they accrue until actual reinstatement or reversal of the order of reinstatement.
The employee need not file a motion for the issuance of the writ of execution since the Labor
Arbiter shall thereafter
motu proprio issue the writ. Employer may be cited for contempt for his refusal to comply with the
order of reinstatement.
Employer is liable to pay the salaries for the period that the employee was ordered reinstated
pending appeal even if his dismissal is later finally found to be legal on appeal.
What are some relevant principles on reinstatement pending appeal?
The Labor Arbiter cannot exercise option of employer by choosing payroll reinstatement pending
appeal.
If the former position is already filled up, the employee ordered reinstated under Article 223
should be admitted back to work in a substantially equivalent position.
Reinstatement to a position lower in rank is not proper.
Reinstatement cannot be refused on the basis of the employment elsewhere of the employee
ordered reinstated.
The failure of the illegally dismissed employee who was ordered reinstated to report back to work
does not give the employer the right to remove him, especially when there is a reasonable
explanation for his failure.
No reinstatement pending appeal should be made when antipathy and antagonism exist.
If reinstatement is not stated in the Labor Arbiter’s decision (neither in the dispositive portion nor
in the text thereof),
reinstatement is not warranted.
b.
SEPARATION PAY IN LIEU OF REINSTATEMENT
Is separation pay applicable only to reinstatement as an alternative remedy?
Yes. Separation pay, as a substitute remedy, is only proper for reinstatement but not for
backwages.
This remedy is not found in the Labor Code but is granted in case reinstatement is no longer
possible or feasible, such as when any of the following circumstances exists:
(1) Where the continued relationship between the employer and the employee is no longer viable
due to the strained relations and antagonism between them (Doctrine of Strained Relations).
(e) The employee has already reached retirement age under a Retirement Plan.
(f) When the illegally dismissed employees are over-age or beyond the compulsory retirement
age and their reinstatement would unjustly prejudice their employer.
(3) Where the employee decides not to be reinstated as when he does not pray for reinstatement
in his complaint or position paper but asked for separation pay instead.
(4) When reinstatement is rendered moot and academic due to supervening events, such as: (a)
Death of the illegally dismissed employee.
(b) Declaration of insolvency of the employer by the court.
(c) Fire which gutted the employer’s establishment and resulted in its total destruction.
(d) In case the establishment where the employee is to be reinstated has closed or ceased
operations. (5) To prevent further delay in the execution of the decision to the prejudice of private
respondent.
(6) Other circumstances such as (a) when reinstatement is inimical to the employer’s interest; (b)
reinstatement does
not serve the best interests of the parties involved; (c) the employer is prejudiced by the workers’
continued employment; or (d) that it will not serve any prudent purpose as when supervening
facts transpired which made execution unjust or inequitable.
What is the amount of separation pay in lieu of reinstatement?
Per prevailing jurisprudence, the following are the components of separation pay in lieu of
reinstatement>
(1) The amount equivalent to at least one (1) month salary or to one (1) month salary for every
year of service, whichever is higher, a fraction of at least six (6) months being considered as one
(1) whole year.
(2) Allowances that the employee has been receiving on a regular basis.
What is the period covered?
From start of employment up to the date of finality of decision except when the employer has
ceased its operation earlier, in which case, the same should be computed up to the date of
closure.
What is the salary rate to be used in computing it?
The salary rate prevailing at the end of the period of putative service should be the basis for
computation which refers to the period of imputed service for which the employee is
entitled to backwages.
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2015 BAR EXAMS
What are some important principles on separation pay in lieu of reinstatement?
1. Award of separation pay and backwages are not inconsistent with each other. Hence,
both may be awarded to an illegally dismissed employee. The payment of separation pay is in
addition to payment of backwages.
2. Reinstatement cannot be granted when what is prayed for by employee is separation pay
in lieu thereof.
BACKWAGES
What is the Bustamante doctrine?
In 1996, the Supreme Court changed the rule on the reckoning of backwages. It announced a
new doctrine in the case of Bustamante v. NLRC,1 which is now known as the Bustamante
doctrine. Under this rule, the term “full backwages” should mean exactly that, i.e., without
deducting from backwages the earnings derived elsewhere by the concerned employee during
the period of his illegal dismissal.
What are the components of backwages?

cover the tim e when he was illegally dismissed up to the time when he rea
r Article 287, 60 years is
ched 60 years. Unde
the optional retirement

The components age.
of backwages are as follows:
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If the employee has reached 65 years of age or beyond, his full backwages should be computed only up to said age.
The contention
1. Salaries of the employer
or wages that backwages
computed on theshould be reckoned
basis of theonlywage
up to age 60 cannot
rate level be at
sustained.
the time of the
illegal If dismissal and not in accordance with the latest, current wage
employer has already ceased operations, full backwages should be computed only up to the date of the level of Tothe
closure.
employee’s position.
allow the computation of the backwages to be based on a period beyond that would be an injustice to the employer.
Any amount received during payroll reinstatement is deductible from backwages.
2. Allowances and other benefits regularly granted to and received by the employee
should be made part of backwages.LIMITED BACKWAGES
What are some principles on backwages?
Salary increases during period of unemployment are not included as

component in the computation of backwages.
Dismissed employee’s ability to earn is irrelevant in the award of backwages.
In case reinstatement is ordered, full backwages should be reckoned from the time the
compensation was withheld
(which, as a rule, is from the time of illegal dismissal) up to the time of reinstatement,
whether actual or in the payroll.
If separation pay is ordered in lieu of reinstatement, full backwages should be

computed from the time of illegal dismissal until the finality of the decision. The justification
is that along with the finality of the Supreme Court’s decision, the issue on the illegality of the
dismissal is finally laid to rest.
If the illegally dismissed employee has reached the optional retirement age of 60 years,
his backwages should only
When is the award of backwages limited?
(1) When the dismissal is deemed too harsh a penalty;
(2) When the employer acted in good faith; or
(3) Where there is no evidence that the employer dismissed the employee.
Thus, the backwages will not be granted in full but limited to 1 year, 2 years or 5 years.
PREVENTIVE SUSPENSION
When is preventive suspension proper to be imposed?
Preventive suspension may be legally imposed against an errant employee only while
he is undergoing an investigation for certain serious offenses. Consequently, its purpose is
to prevent him from causing harm or injury to the company as well as to his fellow
employees. It is justified only in cases where the employee’s continued presence in
the company premises during the investigation poses a serious and imminent threat
to the life or property of the employer or of the employee’s co-workers. Without this
threat, preventive suspension is not proper.
What are some relevant principles in preventive suspension?
Preventive suspension is not a penalty. Preventive suspension, by itself, does not

signify that the company has already adjudged the employee guilty of the charges for which
she was asked to answer and explain.
Preventive suspension is neither equivalent nor tantamount to dismissal.
If the basis of the preventive suspension is the employee’s absences and tardiness, the
imposition of preventive
suspension on him is not justified as his presence in the company premises does not pose any
such serious or imminent threat to the life or property of the employer or of the employee’s
co-workers simply “by incurring repeated absences and tardiness.”
Preventive suspension does not mean that due process may be disregarded.
Preventive suspension should only be for a maximum period of thirty (30) days. After
the lapse of the 30-day period, the employer is required to reinstate the worker to his former
position or to a substantially equivalent position.
1 G.R. No. 111651, Nov. 28, 1996, 265 SCRA 61.
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During the 30-day preventive suspension, the worker is not entitled to his wages and other
benefits. However, if the employer decides, for a justifiable reason, to extend the period of
preventive suspension beyond said 30-day period, he is obligated to pay the wages and other
benefits due the worker during said period of extension. In such a case, the worker is not bound
to reimburse the amount paid to him during the extension if the employer decides to dismiss him
after the completion of the investigation.
Extension of period must be justified. During the 30-day period of preventive suspension,
the employer is expected to conduct and finish the investigation of the employee’s administrative
case. The period of thirty (30) days may only be extended if the employer failed to complete the
hearing or investigation within said period due to justifiable grounds. No
extension thereof can be made based on whimsical, capricious or unreasonable grounds.
Preventive suspension lasting longer than 30 days, without the benefit of valid extension,
amounts to constructive dismissal.
Indefinite preventive suspension amounts to constructive dismissal.
CONSTRUCTIVE DISMISSAL
When is there constructive dismissal?
Constructive dismissal contemplates any of the following situations:
1) An involuntary resignation resorted to when continued employment is rendered impossible,

unreasonable or unlikely;
2) A demotion in rank and/or a diminution in pay; or
3) A clear discrimination, insensibility or disdain by an employer which becomes unbearable

to the employee that it could foreclose any choice by him except to forego his continued
employment.
What is the test of constructive dismissal?
The test of constructive dismissal is whether a reasonable person in the employee’s position would
have felt compelled to give up his position under the circumstances. It is an act amounting to
dismissal but made to appear as if it were not. In fact, the employee who is constructively
dismissed may be allowed to keep on coming to work. Constructive dismissal is, therefore, a
dismissal in disguise. The law recognizes and resolves this situation in favor of the employees
in order to protect their rights and interests from the coercive acts of the employer.
What are examples of constructive dismissal or forced resignation?
Denying to the workers entry to their work area and placing them on shifts “not by weeks but
reducing the ir workweek to three days.
almost by month” by
Barring the employees from entering the premises whenever they would report for work in the morning without any
BarChanRobles
justifiable reason, and they were made to wait for a certain employee who would arrive in the office at around noon, after
they had waited for a long time and had left.
Sending to an employee a notice of indefinite suspension which is tantamount to dismissal.

Imposing indefinite preventive suspension without actually conducting any investigation.
------------oOo------------
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TOPIC NO. 5
MANAGEMENT PREROGATIVES
What are management prerogatives?
Management prerogatives are granted to the employer to regulate every aspect of their
business, generally without restraint in accordance with their own discretion and judgment.
This privilege is inherent in the right of employers to control
and manage their enterprise effectively. Such aspects of employment include hiring,
work assignments, working methods, time, place and manner of work, tools to be used,
processes to be followed, supervision of workers, working regulations, transfer
of employees, lay-off of workers and the discipline, dismissal and recall of workers.
What are the limitations to the exercise of these prerogatives?
1. Limitations imposed by:
a) law;
b) CBA;
c) employment contract;
5) Right to impose penalty; proportionality rule;
d) employer policy;
e) employer practice; and

6) Right to choose which penalty to impose; and
f) generalChanRobles
Barprinciples
7) Right to imposeof fair penalty
heavier play and justice.
than what the company rules prescribe.
2. It is subject to police power.
3. Its exercise should be without abuse of discretion.

B.
4. It should be done in good faith and with due

TRANSFER OF regard to the rights of labor.
EMPLOYEES
What are the various kinds of transfer?
A. DISCIPLINE
a. Two (2) kinds of transfer. - A transfer means a movement:
What are the components of the right to discipline?
The right or prerogative to discipline covers the following:
1) Right to discipline;
2) Right to dismiss;
3) Right to determine who to punish;
4) Right to promulgate rules and regulations;
1. From one position to another of equivalent rank, level or salary, without a break in the
service; or
2. From one office to another within the same business establishment.
What are salient points to consider in transfer?
The exercise of the prerogative to transfer or assign employees from one office or area of
operation to another is valid
provided there is no demotion in rank or diminution of salary, benefits and other

privileges. The transfer should not be motivated by discrimination or made in bad faith or
effected as a form of punishment or demotion without
sufficient cause.
Commitment made by the employee like a salesman in the employment contract to

be re-assigned anywhere in the Philippines is binding on him.
Even if the employee is performing well in his present assignment, management

may reassign him to a new post.
The transfer of an employee may constitute constructive dismissal when:
1) When the transfer is unreasonable, inconvenient or prejudicial to the employee;
2) When the transfer involves a demotion in rank or diminution of salaries, benefits and other
privileges; and
3) When the employer performs a clear act of discrimination, insensibility, or disdain towards
the employee, which forecloses any choice by the latter except to forego his continued
employment.
The refusal of an employee to be transferred may be held justified if there is a showing that
the transfer was directed by the employer under questionable circumstances. For instance,
the transfer of employees during the height of their
union’s concerted activities in the company where they were active participants is
illegal.
An employee who refuses to be transferred, when such transfer is valid, is guilty

of insubordination or willful disobedience of a lawful order of an employer under
Article 282 of the Labor Code.
Refusal to transfer due to parental obligations, additional expenses,

inconvenience, hardship and anguish is not valid. An employee could not validly
refuse lawful orders to transfer based on these grounds.
Refusal to transfer to overseas assignment is valid.
Refusal to transfer consequent to promotion is valid.
Transfer to avoid conflict of interest is valid.
A transfer from one position to another occasioned by the abolition of the position is valid.
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C. PRODUCTIVITY STANDARD
How may productivity standards be imposed?
The employer has the prerogative to prescribe the standards of productivity which the
employees should comply. The productivity standards may be used by the employer as:
1. an incentive scheme; and/or
2. a disciplinary scheme.
As an incentive scheme, employees who surpass the productivity standards or quota are
usually given additional
benefit
s.
quota. As a disciplinary scheme, employees may be sanctioned or dismissed for failure to
meet the productivity standards or
Illustrative cases:
In the 2014 case of International School Manila v. International School

Alliance of Educators (ISAE), 1 the teacher
was held guilty of gross inefficiency meriting her dismissal on the basis of the Court’s finding
that she failed to measure up to the
D.
standards set by the school in teaching Filipino classes.
GRANT OF BONUS
In the 2012 case of Reyes-Rayel v. Philippine Luen Thai Holdings Corp.,2 the validity of
the dismissal of See
petitioner whoonwas
discussion this the
underCorporate Human
Topic III (Labor Bar
Resources
Standards) (CHR) Director for
above.
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Manufacturing of respondent company, on the ground of inefficiency and ineptitude, was
affirmed on the basis of the Court’s finding that petitioner, on two occasions, gave wrong
information regarding issues on leave and holiday pay which generated confusion among
employees in the computation of salaries and wages.
E.
In another 2012 case, RealdaCHANGEv. New Age Graphics, HOURS
OF WORKING Inc.,3 petitioner, a machine operator
of respondent company, was dismissed on the ground, among others, of inefficiency. In
affirming the validity of his dismissal, the Supreme Court reasoned:
“xxx (T)he petitioner’s failure to observe Graphics, Inc.’s work standards constitutes
inefficiency that is a valid cause for dismissal. Failure to observe prescribed standards of
work, or to fulfill reasonable work assignments due to inefficiency may constitute just cause
for dismissal. Such inefficiency is understood to mean failure to attain work goals or work
quotas, either by failing to complete the same within the allotted reasonable period,
or by producing unsatisfactory results.”
What is the extent of the exercise of this prerogative?
Employers have the freedom and prerogative, according to their discretion and best judgment,
to regulate and control the time when workers should report for work and perform their
respective functions.
Manila Jockey Club Employees Labor Union – PTGWO, v. Manila Jockey Club, Inc.4 -
The validity of the exercise of the same prerogative to change the working hours was affirmed
in this case. It was found that while Section 1, Article IV of the CBA provides for a 7-hour
work schedule from 9:00 a.m. to 12:00 noon and from 1:00 p.m. to 5:00 p.m. from Mondays
to Saturdays, Section 2, Article XI thereof expressly reserves to respondent the prerogative to
change existing methods or facilities and to change the schedules of work. Consequently, the
hours of work of regular monthly-paid employees were changed from the original 9:00 a.m. to
5:00 p.m. schedule to 1:00 p.m. to 8:00 p.m. when horse races are held, that is, every
Tuesday and Thursday. The 9:00 a.m. to 5:00 p.m. schedule for non-race days was, however,
retained. Respondent, as employer, cited the change in the program of horse races as reason
for the adjustment of the work schedule. It rationalized that when the CBA was signed, the
horse races started at 10:00 a.m. When the races were moved to 2:00 p.m., there was no
other choice for management but to change the work schedule as there was no work to be
done in the morning. Evidently, the adjustment in the work schedule is justified.
F.
RULES ON MARRIAGE BETWEEN EMPLOYEES OF COMPETITOR-EMPLOYERS
What is the best illustrative case of this prerogative?
Duncan Association of Detailman-PTGWO v. Glaxo Welcome Philippines, Inc.5 - The

contract of employment in this case expressly prohibited an employee from having a
relationship with an employee of a competitor company. It provides:
“10. You agree to disclose to management any existing or future relationship you may have,
either by consanguinity or affinity with co-employees or employees of competing drug
companies. Should it pose a possible conflict of interest in management discretion, you agree
to resign voluntarily from the Company as a matter of Company policy.”
The Supreme Court ruled that this stipulation is a valid exercise of management prerogative.
The prohibition against personal or marital relationships with employees of competitor-
companies upon its employees is reasonable under the
1 G.R. No. 167286, Feb. 5, 2014.
2 G.R. No. 174893, July 11, 2012.
3 G.R. No. 192190, April 25, 2012.
4 G.R. No. 167760, March 7, 2007.
5 G.R. No. 162994, Sept. 17, 2004.
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2015 BAR EXAMS
circumstances because relationships of that nature might compromise the interests of the
company. In laying down the assailed company policy, the employer only aims to protect its
interests against the possibility that a competitor company will gain access to its trade
secrets, manufacturing formulas, marketing strategies and other confidential programs and
information.
G.
POST-EMPLOYMENT BAN
Is a non-compete clause valid?
Yes. The employer and the employee are free to stipulate in an employment contract
prohibiting the employee within a certain period from and after the termination of his
employment, from:
(1) starting a similar business, profession or trade; or
(2) working in an entity that is engaged in a similar business that might compete with the
employer.
The non-compete clause is agreed upon to prevent the possibility that upon an employee’s
termination or resignation, he might start a business or work for a competitor with the full
competitive advantage of knowing and exploiting confidential and sensitive information, trade
secrets, marketing plans, customer/client lists, business practices, upcoming products, etc.,
which he acquired and gained from his employment with the former employer. Contracts
which prohibit an employee from engaging in business in competition with the employer are
not necessarily void for being in restraint of trade.
What are the requisites in order for a non-compete clause to be valid?
A non-compete clause is not necessarily void for being in restraint of trade as long as there
are reasonable limitations as to time, trade, and place.
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Example:
The non-compete clause (called “Non-Involvement Provision”) in the 2007 case of Daisy B.
Tiu v. Platinum Plans
Philippines,
StartingInc., provides
on January as petitioner
1, 1993, follows:worked for respondent as Senior Assistant Vice-President and Territorial
Operations Head in charge of its Hongkong and Asean operations under a 5-year contract of employment containing the afore-
quoted clause. On September 16, 1995, petitioner stopped reporting for work. In November 1995, she became the Vice-
“8. NON-INVOLVEMENT
President for Sales of ProfessionalPROVISION – aThe
Pension Plans, Inc., EMPLOYEE
corporation engaged alsofurther
in the undertakes
pre-need industry.that during
Consequently,
his/her engagement with EMPLOYER and in case of separation from the Company,
respondent sued petitioner for damages before the RTC of Pasig City. Respondent alleged, among others, that petitioner’swhether
voluntary
employment or withfor cause, he/she
Professional shall not,
Pension Plans, for the
Inc. violated thenext TWO (2)
above-quoted years thereafter,
non-involvement clause in engage in of
her contract or
be involved with any corporation, association or entity, whether directly or indirectly,
employment. Respondent thus prayed for P100,000 as compensatory damages; P200,000 as moral damages; P100,000 as engaged
inexemplary
the samedamages;business orthebelonging
and 25% of to plus
total amount due theP1,000
sameperpre-need industry
counsel’s court appearance,asasthe EMPLOYER.
attorney’s fees. Any
breach of the foregoing provision shall render the EMPLOYEE liable to the EMPLOYER in the
amount Petitioner
of One countered
Hundredthat the non-involvement
Thousand Pesos clause was unenforceable
(P100,000.00) for andfor being against public damages.”
as liquidated order or public policy:
First, the restraint imposed was much greater than what was necessary to afford respondent a fair and reasonable protection.
Petitioner contended that the transfer to a rival company was an accepted practice in the pre-
need industry. Since the products sold by the companies were more or less the same, there
was nothing peculiar or unique to protect. Second, respondent did not invest in petitioner’s
training or improvement. At the time petitioner was recruited, she already possessed the
knowledge and expertise required in the pre-need industry and respondent benefited
tremendously from it. Third, a strict application of the non- involvement clause would amount
to a deprivation of petitioner’s right to engage in the only work she knew.
In upholding the validity of the non-involvement clause, the trial court ruled that a
contract in restraint of trade is valid provided that there is a limitation upon either
time or place. In the case of the pre-need industry, the trial court found the two-
year restriction to be valid and reasonable.
On appeal, the Court of Appeals affirmed the trial court’s ruling. It reasoned that petitioner
entered into the contract on her own will and volition. Thus, she bound herself to fulfill not
only what was expressly stipulated in the contract, but als o all its consequences that were not
against good faith, usage, and law. The appellate court also ruled that the stipulation
prohibiting non-employment for two years was valid and enforceable considering the nature of
respondent’s business.
In affirming the validity of the Non-Involvement Clause, the Supreme Court ratiocinated as
follows:
“xxx a non-involvement clause is not necessarily void for being in restraint of trade
as long as there are reasonable limitations as to time, trade, and place.
“In this case, the non-involvement clause has a time limit: two years from the time
petitioner’s employment with respondent ends. It is also limited as to trade, since it
only prohibits petitioner from engaging in any pre-need business akin to
respondent’s. It is limited as to place since the pprohibition covers only Hongkong and
Asean operations.
“More significantly, since petitioner was the Senior Assistant Vice-President and Territorial
Operations Head in charge of respondent’s Hongkong and Asean operations, she had been
privy to confidential and highly sensitive marketing strategies of respondent’s business. To
allow her to engage in a rival business soon after she leaves would make respondent’s trade
secrets vulnerable especially in a highly competitive marketing environment. In sum, we
find the non-involvement clause not contrary to public welfare and not greater than
is necessary to afford a fair and reasonable protection to respondent.
“Thus, as held by the trial court and the Court of Appeals, petitioner is bound to pay
respondent P100,000 as liquidated damages. While we have equitably reduced liquidated
damages in certain cases, we cannot do so in this case, since it appears that even from the
start, petitioner had not shown the least intention to fulfill the non-involvement clause in good
faith.”
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2015 BAR EXAMS

TOPIC NO. 6
SOCIAL WELFARE LEGISLATION
A.
SSS LAW (R.A. No. 8282)
Who are covered employers?
a. An employer or any person who uses the services of another person in business,
trade, industry or any
undertaking.
b. A social, civic, professional, charitable and other non-profit organizations which hire the
services of employees are
considered “employers.”
c. A foreign government, international organization or its wholly-owned instrumentality such

as an embassy in the
Philippines, may enter into an administrative agreement with the SSS for the coverage of its
Filipino employees.
e. Farmer s and fisherfolks; and
Who are compulsorily covered employees?
a. A private employee,
f. Workers whether
in the informal permanent,
sector such temporary
as cigarette vendors, or provisional,
watch-your-car boys, hospitalitywho is not
girls, among over 60
others.
years old. b. A domestic worker or kasambahay who has rendered at least one (1) month of
service. ChanRobles
Bar
Unless otherwise specified, all provisions of the law, R.A. No. 8282, applicable to covered employees shall also be
c.applicable
A Filipino seafarer
to the covered upon the
self-employed signing of the standard contract of employment between the
persons.
seafarer and the manning
A self-employed person shall be both employee and employer at the same time.
agency which, together with the foreign ship owner, act as employers.
Who may be covered voluntarily?
d. An employee of a foreign government, international organization or their wholly-owned
1. Separated
instrumentality Members
based in the
Philippines, which entered into an administrative agreement with the SSS for the coverage of
its Filipino workers. e. The parent, spouse or child below 21 years old of the owner of a single
proprietorship business.
Are self-employed persons covered?
Yes. A self-employed person, regardless of trade, business or occupation, with an income of at

least P1,000 a month and not over 60 years old, should register with the SSS. Included, but
not limited to, are the following self-employed persons:
a. Self-employed professionals;
b. Business partners, single proprietors and board directors;
c. Actors, actresses, directors, scriptwriters and news reporters who are not under an
employer-employee relationship;
d. Professional athletes, coaches, trainers and jockeys;
A member who is separated from employment or ceased to be self-employed/OFW/non-

working spouse and would like to continue contributing.
2. Overseas Filipino Workers (OFWs)
A Filipino recruited in the Philippines by a foreign-based employer for employment abroad or

one who legitimately entered a foreign country (i.e., tourist, student) and is eventually
employed.
3. Non-working spouses of SSS members
A person legally married to a currently employed and actively paying SSS member who
devotes full time in the management of household and family affairs may be covered on a
voluntary basis, provided there is the approval of the working spouse. The person should
never have been a member of the SSS. The contributions will be based on 50 percent (50%)
of the working spouse’s last posted monthly salary credit but in no case shall it be lower than
P1,000.
What is the effective date of coverage?
For compulsory coverage:
1. For employer - Compulsory coverage of the employer shall take effect on the first day of
his operation or on the first day he hires employee/s. The employer is given only 30 days from
the date of employment of employee to report the person for coverage to the SSS.
2. For employee - Compulsory coverage of the employee shall take effect on the first day of
his employment.
3. For self-employed - The compulsory coverage of the self-employed person shall take
effect upon his registration with the SSS or upon payment of the first valid contribution, in
case of initial coverage.
For voluntary coverage:
1. For an OFW – upon first payment of contribution, in case of initial coverage.
2. For a non-working spouse – upon first payment of contribution.
3. For a separated member – on the month he/she resumed payment of contribution.
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2015 BAR EXAMS
Who are excluded employers?
Government and any of its political subdivisions, branches or instrumentalities, including

corporations owned or controlled by the Government with original charters.
Who are excluded employees?
Workers whose employment or service falls under any of the following circumstances are not
covered: (1) Employment purely casual and not for the purpose of occupation or business of
the employer;
(2) Service performed on or in connection with an alien vessel by an employee if he is

employed when such vessel is
outside the Philippines;
(3) Service performed in the employ of the Philippine Government or instrumentality or

agency thereof;
(4) Service performed in the employ of a foreign government or international organization, or

their wholly-owned instrumentality: Provided, however, That this exemption notwithstanding,
any foreign government, international organization or their wholly-owned instrumentality
employing workers in the Philippines or employing Filipinos outside of the Philippines, may
enter into(b) an agreement with the Philippine Government
Emplo for the on
yees compensa inclusion
benefits. of such employees in
the SSS except those already covered by their respective civil service retirement systems:
Provided, further, That the terms of such agreement shall conform with the provisions of R.A.
No. Who
8282 on coverage
are primary and amount of payment of contributions and benefits: Provided,
beneficiaries?
finally, That the provisions of this Act shall be supplementary to any such agreement; and
(5) SuchThe
ChanRobles
Bar
other services
following performed
are primary by temporary and other employees which may be excluded
beneficiaries:
by regulation of the Social Security Commission. Employees of bona-fide independent
contractors shall not be deemed employees of the employer engaging the service of said
1. The dependent spouse until he or she remarries;
contractors.
2. The dependent legitimate, legitimated or legally adopted, and illegitimate children who are not yet 21 years of
What are
age. the classifications of benefits?
The SSS benefits may be classified into two (2) as follows: (a) Social security benefits:
The dependent illegitimate children shall be entitled to 50% of the share of the legitimate, legitimated or legally
1) Sickness
adopted children. However, in the absence of the dependent legitimate, legitimated children of the member, his/her
2) Maternity
3) Retirement
4) Disability
5) Death and funeral.
’ ti
dependent illegitimate children shall be entitled to 100% of the benefits
Who are secondary beneficiaries?
The following are secondary beneficiaries:
1. The dependent parents, in the absence of the primary beneficiaries.
2. Any other person designated by the member as his/her secondary beneficiary, in the
absence of all the foregoing primary beneficiaries and dependent parents.
B. GSIS LAW (R.A. No. 8291)
Who are compulsorily required to become members of the GSIS?
1. All government personnel, whether elective or appointive, irrespective of status of

appointment, provided they are receiving fixed monthly compensation and have not reached
the mandatory retirement age of 65 years, are compulsorily covered as members of the GSIS
and shall be required to pay contributions.
2. However, employees who have reached the retirement age of 65 or more shall also be
covered, subject to the following rules:
An employee who is already beyond the mandatory retirement age of 65 shall be compulsorily
covered and be required to pay both the life and retirement premiums under the following
situations:
a. An elective official who at the time of election to public office is below 65 years of age
and will be 65 years or more at the end of his term of office, including the period/s of his re-
election to public office thereafter without interruption.
b. Appointive officials who, before reaching the mandatory age of 65, are appointed to
government position by the
President of the Republic of the Philippines and shall remain in government service at age
beyond 65.
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2015 BAR EXAMS
c. Contractual employees including casuals and other employees with an

employee-government agency relationship are also compulsorily covered, provided they are
receiving fixed monthly compensation and rendering the required number of working hours for
the month.
What are the classes of membership in the GSIS?
Membership in the GSIS is classified either by type or status of membership.
As to type of members, there are regular and special members:
(a) Regular Members – are those employed by the government of the Republic of the
Philippines, national or local, legislative bodies, government-owned and controlled
corporations (GOCC) with original charters, government financial institutions (GFIs), except
uniformed personnel of the Armed Forces of the Philippines, the Philippine National Police,
Bureau of Jail Management and Penology (BJMP) and Bureau of Fire Protection (BFP), who are
required by law to remit regular monthly contributions to the GSIS.
(b) Special Members – are constitutional commissioners, members of the judiciary, including
those with equivalent ranks, who are required by law to remit regular monthly contributions
for Who
life are exclud
insurance policies to the GSIS in order edtofrom the compulsory
answer coverage
for their life of the GSIS Law?
insurance benefits
defined under RA 8291.
Bar ChanRobles
The following employees are excluded from compulsory coverage:
As to status of membership, there are active and inactive members.
(a) Uniformed personnel of the Armed Forces of the Philippines (AFP), Philippine National Police (PNP), Bureau of
(a) ActiveFire Protection (BFP)

member and Bureau
– refers to aofmember
Jail Management
of theandGSIS,
Penologywhether
(BJMP); regular or special, who is
still in the government service and together with the government agency to which he
(b) Barangay and Sanggunian Officials who are not receiving fixed monthly compensation;
belongs, is required to pay the monthly contribution.
(c) Contractual Employees who are not receiving fixed monthly compensation; and
(d) Employees who do not have monthly regular hours of work and are not receiving fixed monthly compensation.
(b) Inactive member – a member who is separated from the service either by resignation,
retirement, disability, dismissal from the service, retrenchment or, who is deemed retired
from the service under this Act.
When does membership become effective?
The effective date of membership shall be the date of the member’s assumption to duty on his
original appointment or election to public office.
What is the effect of separation from the service?
A member separated from the service shall continue to be a member, and shall be entitled to
whatever benefits he has qualified to in the event of any contingency compensable under the
GSIS Law.
What are the kinds of benefits under the GSIS Law?
The following are the benefits under the GSIS Law:
(a) Compulsory Life Insurance Benefits under the Life Endowment Policy (LEP) (b)
Compulsory Life Insurance Benefits under the Enhanced Life Policy (ELP) (c) Retirement
Benefits
(d) Separation Benefit
(e) Unemployment Benefit
(f) Disability Benefits
(g) Survivorship Benefits
(h) Funeral Benefits
Who are beneficiaries under the GSIS Law?
There are two (2) kinds of beneficiaries under the GSIS Law as follows:
1. Primary beneficiaries — The legal dependent spouse until he/she remarries and the
dependent children.
2. Secondary beneficiaries — The dependent parents and, subject to the restrictions on

dependent children, the legitimate descendants.
Who are dependents under the GSIS Law?
Dependents shall be the following:
(a) the legitimate spouse dependent for support upon the member or pensioner;
(b) the legitimate, legitimated, legally adopted child, including the illegitimate child, who is
unmarried, not gainfully employed, not over the age of majority, or is over the age of majority
but incapacitated and incapable of self- support due to a mental or physical defect acquired
prior to age of majority; and
(c) the parents dependent upon the member for support.
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2015 BAR EXAMS
Gainful Occupation — Any productive activity that provided the member with income at least equal
to the minimum compensation of government employees.
C.
LIMITED PORTABILITY LAW (R.A. No. 7699)
What is limited portability

scheme?
R.A. No. 7699 was enacted to enable those from the private sector who transfer to the
government service or from the government sector to the private sector to combine their years of
service and contributions which have been credited with the SSS or GSIS, as the case may be, to
satisfy the required number of years of service for entitlement to the benefits under the applicable
laws.
What is totalization?
The term “totalization” refers to the process of adding up the periods of creditable services or
contributions under each of the Systems, SSS or GSIS, for the purpose of eligibility and
computation of benefits.
What is portability?
On the other hand, the term “portability” refers to the transfer of funds for the account and benefit
of a worker who transfers from one system to the other.
How are benefits computed?
All services rendered or contributions paid by a member personally and those that were paid by
the employers to either System shall be considered in the computation of benefits which may be
claimed from either or both Systems. However, the amount of benefits to be paid by one System
shall be in proportion to the services rendered or periods of contributions made to that System.
“Benefits” refer to the following:
1. Old-age benefit;
2. Disability benefit;
3. Survivorship benefit;
4. Sickness benefit;
5. Medica re benefit, provided that the member shall claim said benefit fr
e he was last a member;
om the System wher
and
Bar
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6. Such other benefits common to both Systems that
www.chanroblesbar.com : may be availed of through totalization.
member in both Systems shall provide maximum benefits which otherwise will not be available. In
no case shall the contribution be lost or forfeited.
What is the effect if worker is not qualified after totalization?
If after totalization, the worker-member still does not qualify for any benefit as listed in the law,
the member will then get whatever benefits correspond to his/her contributions in either or both
Systems.
What is the effect if worker qualifies for benefits in both Systems?
If a worker qualifies for benefits in both Systems, totalization shall not apply.
D.
EM PLOYEE’ S COM PENS ATI O N
COVERAGE AND WHEN COMPENSABLE
What is the State Insurance Fund [SIF]?
The State Insurance Fund (SIF) is built up by the contributions of employers based on the salaries
of their employees as provided under the Labor Code.
There are two (2) separate and distinct State Insurance Funds: one established under the SSS
for private sector employees; and the other, under the GSIS for public sector employees. The
management and investment of the Funds are done separately and distinctly by the SSS and the
GSIS. It is used exclusively for payment of the employees’ compensation benefits and no amount
thereof is authorized to be used for any other purpose.
What are the agencies involved in the implementation of the Employees

Compensation Program (ECP)?
There are three (3) agencies involved in the implementation of the Employees’ Compensation
Program (ECP). These are: (1) The Employees’ Compensation Commission (ECC) which is
mandated to initiate, rationalize and coordinate policies of the ECP and to review appealed cases
from (2) the Government Service Insurance System (GSIS) and (3) the Social Security
System (SSS), the administering agencies of the ECP.
Who are covered by the ECP?
a. General coverage. – The following shall be covered by the Employees’ Compensation Program
(ECP):
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2015 BAR EXAMS
1. All employers;
2. Every employee not over sixty (60) years of age;
3. An employee over 60 years of age who had been paying contributions to the System
(GSIS/SSS) prior to age sixty
(60) and has not been compulsorily retired; and
4. Any employee who is coverable by both the GSIS and SSS and should be compulsorily covered
by both Systems.
b. Sectors of employees covered by the ECP. - The following sectors are covered under the
ECP:
1. All public sector employees including those of government-owned and/or controlled

corporations and local government units covered by the GSIS;
2. All private sector employees covered by the SSS; and
3. Overseas Filipino workers (OFWs), namely:
a. Filipino seafarers compulsorily covered under the SSS.
b. Land-based contract workers provided that their employer, natural or juridical, is engaged in
any trade, industry or business undertaking in the Philippines; otherwise, they shall not be
covered by the ECP.
When is the start of coverage of employees under the ECP?
The coverage under the ECP of employees in the private and public sectors starts on the first day
of their employment.
What are the benefits under the ECP?
The following are the benefits provided under the Labor Code:
a. Medical Benefits b. Disability Benefits
1. Temporary total disability
2. Permanent total disability
3. Permanent partial disability c. Death Benefit
d. Funeral Benefit
------------oOo------------
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66
LABOR RELATIONS LAW Prof. Joselito Guianan Chan
A.
RIGHT TO SELF-ORGANIZATION
1.
WHO MAY UNIONIZE
FOR PURPOSES OF COLLECTIVE BARGAINING
Who are eligible to join, form or assist a labor organization for purposes of collective
bargaining?
In the private sector:
1. All persons employed in commercial, industrial and agricultural enterprises;
2. Employees of government-owned and/or controlled corporations without original charters

established under the
Corporation Code;
3. Employees of religious, charitable, medical or educational institutions, whether operating for

profit or not;
4. Front-line managers, commonly known as supervisory employees [See discussion below];
5. Alien employees [See discussion below];
6. Working children [See discussion below];
7. Homeworkers [See discussion below];
8. Employees of cooperatives [See discussion below]; and
9. Employees of legitimate contractors not with the principals but with the contractors
In the public sector:
All rank-and-file employees of all branches, subdivisions, instrumentalities, and agencies of

government, including government-owned and/or controlled corporations with original
charters, can form, join or assist employees’ organizations of their own choosing.
Are front-line managers or supervisors eligible to join, form or assist a labor

organization?
Is mixed membwww.chanroblesbar.com : www.chanroblesbar.com.ph

ership of supervisors and rank-and-file union in one union
l its registration?
a ground to cance
Yes, but only among themselves. They cannot join a rank-and-file union.
(2) He is a national of a country which grants the same or similar rights to Filipino workers or
which has ratified either ILO Convention No. 87 or ILO Convention No. 98, as certified by the
Philippine Department of Foreign Affairs (DFA).
Do members of cooperatives have the right to join, form or assist a labor

organization?
No, because they are co-owners co-owners of the cooperative.
What about employees of a cooperative?
Yes, because they have employer-employee relationship with the cooperative.
What about members who are at the same time employees of the cooperative?
No, because the prohibition covers employees of the cooperative who are at the same time
members thereof.
But employee-members of a cooperative may withdraw as members of the cooperative for

purposes of joining a labor
union.
Can employees of job contractors join, form or assist a labor organization?
Yes, but not for the purpose of collective bargaining with the principal but with their direct
employer– the job contractor.
Are self-employed persons allowed to join, form or assist a labor organization?
Yes, for their mutual aid and protection but not for collective bargaining purposes since they have
no employers but themselves.
This rule applies as well to ambulant, intermittent and other workers, rural workers and those
without any definite employers. The reason for this rule is that these persons have no employers
with whom they can collectively bargain.
(a)
WHO CANNOT FORM, JOIN OR ASSIST LABOR ORGANIZATIONS
1. PERSONS NOT ALLOWED TO FORM, JOIN OR ASSIST LABOR ORGANIZATIONS. a. In

the private sector.
1. Top and middle level managerial employees; and
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2015 BAR EXAMS
2. Confidential employees.
b. In the public sector.
The following are not eligible to form employees’ organizations:
1. High-level employees whose functions are normally considered as policy-making or

managerial or whose duties are of a highly confidential nature;
2. Members of the Armed Forces of the Philippines;
3. Police officers;
4. Policemen;
5. Firemen; and
6. Jail guards.
Are managerial employees allowed unionize?
There are 3 types of managerial employees:
1. Top Management
2. Middle Management
3. First-Line Management (also called supervisory level)
eligible
The first two above are absolutely prohibited; for
but membership
the thirdin anyare
laborallowed
organization.
but only among
themselves.
Right to join a union cannot be made subject of a CBA stipulation.
ChanRobles
Bar
Are confidential employees allowed to join, form or assist a labor organization?
2. BARGAINING
No, under the confidential employee rule.UNIT
“Confidential employees” are those who meet the following criteria: (1) They assist or act in
a confidential capacity;
What is a bargaining unit?
(2) To persons or officers who formulate, determine, and effectuate management policies
specifically in theunit”
A “bargaining field oftolabor
refers a grouprelations.
of employees sharing mutual interests within a given employer unit, comprised of
all or less than all of the entire body of employees in the employer unit or any specific occupational or geographical grouping
within such employer unit. It may also refer to the group or cluster of jobs or positions within the employer’s establishment that
The two (2) criteria are cumulative and both must be met if an employee is to be considered a
“confidential employee” that would deprive him of his right to form, join or assist a labor
organization.
What are some principles on the right to self-organization?
a. Some principles on the right to self-organization.
Any employee, whether employed for a definite period or not, shall, beginning on the first day
of his service, be
supports the labor organization which is applying for registration.
(a)
TEST TO DETERMINE THE CONSTITUENCY OF AN APPROPRIATE BARGAINING UNIT
What are the four tests to determine appropriate bargaining unit?
Based on jurisprudence, there are certain tests which may be used in determining the
appropriate collective bargaining unit, to wit:
(1) Community or mutuality of interest doctrine; (2) Globe doctrine or will of the
members;
(3) Collective bargaining history doctrine; and
(4) Employment status doctrine.
1. COMMUNITY OR MUTUALITY OF INTEREST DOCTRINE.
Under this doctrine, the employees sought to be represented by the collective bargaining
agent must have community or mutuality of interest in terms of employment and working
conditions as evinced by the type of work they perform. It is characterized by similarity of
employment status, same duties and responsibilities and substantially similar compensation
and working conditions.
St. James School of Quezon City v. Samahang Manggagawa sa St. James

School of Quezon City. 1 - Respondent union sought to represent the rank-and-file
employees (consisting of the motor pool, construction and transportation employees) of
petitioner-school’s Tandang Sora campus. Petitioner-school opposed it by contending that the
bargaining unit should not only be composed of said employees but must include
administrative, teaching and office personnel in its five (5) campuses. The Supreme Court
disagreed with said contention. The motor pool, construction and transportation employees of
the Tandang Sora campus had 149 qualified voters at the time of the certification election,
hence, it was ruled that the 149 qualified voters should be used to determine the existence of
a quorum during the election. Since a majority or 84 out of the 149 qualified voters cast their
votes, a quorum existed during the certification election. The computation of the quorum
should be
1 G.R. No. 151326, Nov. 23, 2005.
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2015 BAR EXAMS
based on the rank-and-file motor pool, construction and transportation employees of the
Tandang Sora campus and not on all the employees in petitioner’s five (5) campuses.
Moreover, the administrative, teaching and office personnel are not members of the union.
They do not belong to the bargaining unit that the union seeks to represent.
2. GLOBE DOCTRINE.
This principle is based on the will of the employees. It is called Globe doctrine because this
principle was first enunciated in the United States case of Globe Machine and Stamping
Co.,1 where it was ruled, in defining the appropriate bargaining unit, that in a case where the
company’s production workers can be considered either as a single bargaining unit
appropriate for purposes of collective bargaining or as three (3) separate and distinct
bargaining units, the determining factor is the desire of the workers themselves.
Consequently, a certification election should be held separately to choose which representative
union will be chosen by the workers.
International School Alliance of Educators [ISAE] v. Quisumbing.2 - The Supreme

Court ruled here that foreign- hired teachers do not belong to the bargaining unit of the local-
hires because the former have not indicated their intention to be grouped with the latter for
purposes of collective bargaining. Moreover, the collective bargaining history of the school also
shows that these groups were always treated separately.
3. COLLECTIVE BARGAINING HISTORY DOCTRINE.
This principle puts premium to the prior collective bargaining history and affinity of the
employees in determining the appropriate bargaining unit. However, the existence of a prior
collective bargaining history has been held as neither decisive nor conclusive in the
determination of what constitutes an appropriate bargaining unit.
included in the rank- and-file employees’ bargaining unit. The rationale for this
National
inhibition Association of Free Trade
is that if these managerial employees Unions v. Mainit Lumber Development Company
Workers Union. 3 - It was ruled here that there is mutuality of interest among the workers
inwould
thebelong to or be
sawmill affiliated and
division with alogging
union, the division
latter might as
not be
to assured
justifyoftheir
their loyalty to the union
formation of ina view of evident
single conflict
bargaining
unit. BarChanRobles
ThisThe
of interest. holds
union true
can also despite the history of said
become company-dominated
and notwithstanding their geographical distance from each other.
two
with the divisions
presence beingemployees
of managerial treatedin as separate units
its membership.
3. BARGAINING
4. EMPLOYMENT STATUS DOCTRINE.
AGENT
What is an exclusive bargaining agent?

The determination of the appropriate bargaining unit based on the employment status of the
employees is considered an acceptable mode. For instance, casual employees and those
employed Theon
terma “exclusive
day-to-daybargaining representative”
basis, according or “exclusive bargaining agent”
to the Supreme Courtrefers
in to Philippine
a legitimate laborLand-Air-
union duly
Sea Labor Union v. CIR, 4 do not have the mutuality or community of interest with regular
and permanent employees. Hence, their inclusion in the bargaining unit composed of the
latter is not justified. Confidential employees, by the very nature of their functions, assist
and act in a confidential capacity to, or have access to con fidential matters of, persons who
exercise managerial functions in the field of labor relations. As such, the rationale behind the
ineligibility of managerial employees to form, assist or join a labor union equally applies to
them. Hence, they cannot be allowed to be
recognized or certified as the sole and exclusive bargaining representative or agent of all the
employees in a bargaining unit.
What are the modes of determining the sole and exclusive bargaining agent?
The following are the modes:
1. Voluntary recognition;
2. Certification election;
3. Consent election;
4. Run-off election;
5. Re-run election.
(a)
VOLUNTARY RECOGNITION
What is voluntary recognition?
“Voluntary recognition” refers to the process by which a legitimate labor union is voluntarily
recognized by the employer as the exclusive bargaining representative or agent in a
bargaining unit and reported as such with the Regional Offi ce in accordance with the Rules to
Implement the Labor Code.
When is voluntary recognition proper?
Voluntary recognition is proper only in cases where there is only one legitimate labor
organization existing and operating in a bargaining unit. It cannot be done in case there are
two or more unions in contention.
1 3 NLRB 294 (1937).
2 G.R. No. 128845, June 1, 2000.
3 G.R. No. 79526, Dec. 21, 1990.
4 G.R. No. L-14656, Nov. 29, 1960.
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2015 BAR EXAMS
CERTIFICATION ELECTION
What is certification
election?
“Certification election” refers to the process of determining through secret ballot the sole and
exclusive bargaining agent of the employees in an appropriate bargaining unit for purposes of
collective bargaining or negotiations.
Who may file a petition for certification election?
The petition may be filed by:
1. A legitimate labor organization which may be: (a) an independent union; or
(b) a national union or federation which has already issued a charter certificate to its local
chapter participating
in the certification election; or
(c) a local chapter which has been issued a charter certificate by the national union or
federation.
1. from th e date the fact of voluntary recognition has been entered; or

2. An employer, when requested by a labor organization to bargain collectively and its
majority status is in doubt.
2. from the date a valid certification, consent, run-off or re-run election has been conducted within the bargaining
ChanRobles
Bar
unit.
What are the rules prohibiting the filing of petition for certification election (bar
rules)?
2. NEGOTIATIONS BAR RULE.
a. General Underrule.
this rule, no petition for certification election should be entertained while the sole and exclusive bargaining agent
and the employer have commenced and sustained negotiations in good faith within the period of one (1) year from the date of a
valid certification, consent, run-off or re-run election or from the date of voluntary recognition.
The general rule is that in the absence of a CBA duly registered in accordance with Article 231
of the Labor Code, a petition for certification election may be filed at any time.
Once the CBA negotiations have commenced and while the parties are in the process of negotiating the terms and
b. Bar rules.
No certification election may be held under the following rules:
1. Certification year bar rule;
2. Negotiations bar rule;
3. Bargaining deadlock bar rule; or
4. Contract bar rule.
1. CERTIFICATION YEAR BAR RULE.
Under this rule, a petition for certification election may not be filed within one (1) year:
conditions of the CBA, no challenging union is allowed to file a petition for certification election
that would disturb the process and unduly forestall the early conclusion of the agreement.
3. BARGAINING DEADLOCK BAR RULE.
Under this rule, a petition for certification election may not be entertained when a bargaining
deadlock to which an incumbent or certified bargaining agent is a party has been submitted to
conciliation or arbitration or has become the subject of a valid notice of strike or lockout.
Kaisahan ng Manggagawang Pilipino [KAMPIL-KATIPUNAN] v. Trajano. - The

bargaining deadlock-bar rule was not applied here because for more than four (4) years after
it was certified as the exclusive bargaining agent of all the ran k-and- file employees, it did
not take any action to legally compel the employer to comply with its duty to bargain
collectively, hence, no CBA was executed. Neither did it file any unfair labor practice suit
against the employer nor did it initiate a strike against the latter. Under the circumstances, a
certification election may be validly ordered and held.
4. CONTRACT BAR RULE.
Under this rule, a petition for certification election may not be filed when a CBA between the
employer and a duly recognized or certified bargaining agent has been registered with the
Bureau of Labor Relations (BLR) in accordance with the Labor Code. Where the CBA is duly
registered, a petition for certification election may be filed only within the 60-day freedom
period prior to its expiry. The purpose of this rule is to ensure stability in the relationship of
the workers and the emplo yer by preventing frequent modifications of any CBA earlier
entered into by them in good faith and for the stipulated original period.
When contract bar rule does not apply.
The contract-bar rule does not apply in the following cases:
1. Where there is an automatic renewal provision in the CBA but prior to the date when such
automatic renewal became effective, the employer seasonably filed a manifestation with the
Bureau of Labor Relations of its intention to terminate the said agreement if and when it is
established that the bargaining agent does not represent anymore the majority of the workers
in the bargaining unit.
2. Where the CBA, despite its due registration, is found in appropriate proceedings that: (a) it
contains provisions lower than the standards fixed by law; or (b) the documents supporting its
registration are falsified, fraudulent or tainted with misrepresentation.
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2015 BAR EXAMS
3. Where the CBA does not foster industrial stability, such as contracts where the identity of
the representative is in doubt since the employer extended direct recognition to the union and
concluded a CBA therewith less than one (1) year from the time a certification election was
conducted where the “no union” vote won. This situation obtains in a case where the company
entered into a CBA with the union when its status as exclusive bargaining agent of the
employees has not been established yet.
4. Where the CBA was registered before or during the last sixty (60) days of a subsisting
agreement or during the pendency of a representation case. It is well-settled that the 60-day
freedom period based on the original CBA should not be affected by any amendment,
extension or renewal of the CBA for purposes of certification election.
What are the requisites for the validity of the petition for certification election?
The following requisites should concur:
1. The union should be legitimate which means that it is duly registered and listed in the
registry of legitimate labor unions of the BLR or that its legal personality has not been revoked
or cancelled with finality.
2. In case of organized establishments, the petition for certification election is filed during
(and not before or after)
not stay the holding thereof.
the 60-day freedom period of a duly registered CBA.
3. Direct
In casecertification as a method establishments,
of organized of selecting the exclusive
thebargaining
petitionagent of the employees
complied is not25%
with the allowed.written
This is
Bar ChanRobles
support of the members of the
because the conduct of a certification election is still necessary in order to arrive in a manner definitive and certain
bargaining
concerning unit.
the choice of the labor organization to represent the workers in a collective bargaining unit.
4. The petition
The “No Union”isvote
filed not in
is always oneviolation of inany
of the choices of the four
a certification (4)Where
election. bar majority
rules [See above
of the valid discussion
votes cast results in
thereof].
“No Union” obtaining the majority, the Med-Arbiter shall declare such fact in the order.
Only persons who have direct employment relationship with the employer may vote in the certification election,
regardless of their period of employment.
What are the two (2) kinds of majorities?
The process of certification election requires two (2) kinds of majority votes, viz.:
1. Number of votes required for the validity of the process of certification election
itself. In order to have a valid certification election, at least a majority of all eligible voters
in the appropriate bargaining unit must have cast their votes.
2. Number of votes required to be certified as the collective bargaining agent. To be

certified as the sole and exclusive bargaining agent, the union should obtain a majority of
the valid votes cast.
What are some pertinent principles on certification election?
The pendency of a petition to cancel the certificate of registration of a union participating in a

certification election does not stay the conduct thereof.
The pendency of an unfair labor practice case filed against a labor organization participating
in the certification election does
IN AN UNORGANIZED ESTABLISHMENT
What is meant by “unorganized establishment”?
As distinguished from “organized establishment,” an “unorganized establishment” is an

employer entity where there is no recognized or certified collective bargaining union or agent.
A company or an employer-entity, however, may still be considered an unorganized

establishment even if there are unions in existence therein for as long as not one of them is
duly certified as the sole and exclusive bargaining representative of the employees in the
particular bargaining unit it seeks to operate and represent.
Further, a company remains unorganized even if there is a duly recognized or certified

bargaining agent for rank-and- file employees, for purposes of the petition for certification
election filed by supervisors. The reason is that the bargaining unit composed of supervisors is
separate and distinct from the unionized bargaining unit of rank-and-file employees. Hence,
being unorganized, the 25% required minimum support of employees within the bargaining
unit of the supervisors need not be complied with.
How should certification election be conducted in an unorganized establishment?
In case of a petition filed by a legitimate organization involving an unorganized

establishment, the Med-Arbiter is required to immediately order the conduct of a certification
election upon filing of a petition for certification election by a legitimate labor organization.
IN AN ORGANIZED ESTABLISHMENT
What are the requisites for the conduct of a certification election in an organized
establishment?
The Med-Arbiter is required to automatically order the conduct of a certification election by

secret ballot in an organized establishment as soon as the following requisites are fully met:
1. That a petition questioning the majority status of the incumbent bargaining agent is filed
before the DOLE within the
60-day freedom period;
2. That such petition is verified; and
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2015 BAR EXAMS
3. That the petition is supported by the written consent of at least twenty-five percent
(25%) of all the employees in the bargaining unit.
RUN-OFF ELECTION
What is run-off
election?
A “run-off election” refers to an election between the labor unions receiving the two (2)
highest number of votes in a certification election or consent election with three (3) or more
choices, where such a certification election or consent ele ction results in none of the three (3)
or more choices receiving the majority of the valid votes cast, provided that the total number
of votes for all contending unions is at least fifty percent (50%) of the number of votes cast.
RE-RUN ELECTION
When should a re-run election be conducted?
A re-run election may be justified if certain irregularities have been committed during the
conduct of the certification election such as, inter alia, disenfranchisement of the voters,
lack of secrecy in the voting, fraud or bribery, in which case, the certification election
should be invalidated. Such invalidation would necessitate the conduct of a re-run election
among the contending unions to determine the true will and desire of the employee-
electorates.
Can the parties agree to the conduct of consent election even during the
pen
CONSENTdency of certification election?
ELECTION
Bar ChanRobles
Yes. In fact, the Med-Arbiter is required to determine if the contending labor unions are willing to submit themselves to
a consent election. And if they do, the Med-Arbiter should conduct consent election instead of certification election.
What is consent election?
A “consent election” refers to the process

AFFILIATION of determining through
AND DISAFFILIATION OF THEsecret ballot the sole and
exclusive representative LOCAL
of the employees in an appropriate
UNION FROM THE MOTHER UNION bargaining unit for purposes of
collective bargaining and negotiation. It is voluntarily agreed upon by the parties, with or
without the intervention of the DOLE.
1. AFFILIATION.
What is the distinction between consent election and certification election?
A consent election is one mutually agreed upon by the parties, with or without the
intervention of the DOLE, its purpose being merely to determine the issue of majority
representation of all the workers in an appropriate collective bargaining unit; while a
certification election is one which is ordered by the DOLE. The purpose for both electoral
exercise is the same, i.e., to determine the sole and exclusive bargaining agent of all the
employees in an appropriate bargaining unit for the purpose of collective bargaining. From the
very nature of consent election, it is a separate and distinct process from certification election
and has nothing to do with the import and effect of the latter.
a. Mother union.
In relation to an affiliate, the federation or national union is commonly known as the “mother
union.” This term is not found in law but oftentimes, the Supreme Court uses this term to
describe a federation or a national union.
b. Affiliate.
An “affiliate” refers to:
(1) An independent union affiliated with a federation or a national union; or
(2) A local chapter which has been subsequently granted independent registration but did
not disaffiliate from the federation or national union which created it.
c. A chartered local/local chapter, not an affiliate.
Based on the above definition and description, technically, a local chapter created through the
mode of chartering by a mother union under Article 234-A of the Labor Code, cannot be
properly called an “affiliate” if it has not acquired any independent registration of its own.
d. Purpose of affiliation.
The purpose is to further strengthen the collective bargaining leverage of the affiliate. No
doubt, the purpose of affiliation by a local union with a mother union (federation or national
union) is to increase by collective action its bargaining power in respect of the terms and
conditions of labor.
e. Contract of agency.
The mother union, acting for and in behalf of its affiliate, has the status of an agent while the
local union remains the principal – the basic unit of the association free to serve the common
interest of all its members subject only to the restraints imposed by the constitution and by-
laws of the association.
f. Some principles on affiliation.
Independent legal personality of an affiliate union is not affected by affiliation.
Affiliate union becomes subject of the rules of the federation or national union.
The appendage of the acronym of the federation or national union after the name of the
affiliate union in the registration with the DOLE does not change the principal-agent
relationship between them. Such inclusion of the
acronym is merely to indicate that the local union is affiliated with the federation or national
union at the time of the
registration. It does not mean that the affiliate union cannot independently stand on its own.
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2015 BAR EXAMS
The fact that it was the federation which negotiated the CBA does not make it the
principal and the affiliate or local union which it represents, the agent.
In case of illegal strike, the local union, not the mother union, is liable for damages.
2. DISAFFILIATION.
a. Right to disaffiliate.
The right of the affiliate union to disaffiliate from its mother federation or national union is a
constitutionally-guaranteed right which may be invoked by the former at any time. It is
axiomatic that an affiliate union is a separate and voluntary association free to serve the
interest of all its members - consistent with the freedom of association guaranteed in the
Constitution.
b. Disaffiliation of independently-registered union and local chapter, distinguished.
The disaffiliation of an independently-registered union does not affect its legitimate status as a
labor organization. However, the same thing may not be said of a local chapter which has no
independent registration since its creation was effected pursuant to the charter certificate
issued to it by the federation or national union. Once a local chapter disaffiliates from the
federation or national union which created it, it ceases to be entitled to the rights and
privileges granted to a legitimate labor organization. Hence, it cannot, by itself, file a petition
for certification election.
c. Some principles on disaffiliation.
Disaffiliation does not divest an affiliate union of its

(i)legal personality.
Disaffiliation of an affiliate union is not an act of disloyalty.
SUBSTITUTIONARY DOCTRINE
Disaffiliation for purposes of forming a new union does not terminate the status of the Bar
members
1. CHANGE OF ChanRobles
thereof as employees
BARGAINING of theDURING
REPRESENTATIVE company. ByOF
THE LIFE said act of disaffiliation, the employees
A CBA.
who are members of the local union did not form a new union but merely exercised their right
to register their local union. The local union is free to disaffiliate from its mother union.
It simply refers to the substitution of the bargaining agent by a newly certified agent which defeated in in the
Disaffiliation should
certification election. As newbe approved
bargaining agent,byit is
the majority
duty-bound of the
to respect the union
existing members.
CBA but it can renegotiate for new terms
and conditions therein.
Disaffiliation terminates the right to check-off federation dues. The obligation to check-off
federation dues is terminated with the valid disaffiliation of the affiliate union from the
federation
2. EFFECT OFwith which it wasDOCTRINE
SUBSTITUTIONARY previously ON affiliated.
THE DEPOSED UNION’S PERSONAL UNDERTAK NGS
Disaffiliation does not affect the CBA. It does not operate to amend it or change the
administration of the contract.
Disaffiliating from the federation and entering into a CBA with the employer does not
constitute an unfair labor practice.
Disaffiliation is not a violation of the union security clause.
I .
In case of change of bargaining agent under the substitutionary doctrine, the new bargaining
agent is not bound by the personal undertakings of the deposed union like the “no strike,
no lockout” clause in a CBA which is the personal undertaking of the bargaining agent which
negotiated it.
3. SOME PRINCIPLES ON SUBSTITUTIONARY DOCTRINE.
The substitutionary doctrine cannot be invoked to subvert an existing CBA, in derogation of

the principle of freedom of contract. The substitution of a bargaining agent cannot be allowed
if the purpose is to subvert an existing CBA freely entered into by the parties. Such act
cannot be sanctioned in law or in equity as it is in derogation of the principle underlying the
freedom of contract and good faith in contractual relations.
The substitutionary doctrine is applicable also to a situation where the local union, which was
created through the process of chartering by the mother union, disaffiliates from the latter
after it secured an independent registration. The local union will thus be substituted to that of
the federation which negotiated the CBA as in Elisco-Elirol Labor Union [NAFLU] v.
Noriel,
where petitioner union was created through the mode of chartering by the National Federation
of Labor Unions (NAFLU) and later, it secured its independent registration with the BLR and
disaffiliated with NAFLU by virtue of a resolution by its general membership.
(b)
UNION DUES AND SPECIAL ASSESSMENTS
1. REQUISITES FOR VALIDITY OF UNION DUES AND SPECIAL ASSESSMENTS.
The following requisites must concur in order for union dues and special assessments for the
union’s incidental expenses, attorney’s fees and representation expenses to be valid, namely:
(a) Authorization by a written resolution of the majority of all the members at a

general membership meeting
duly called for the purpose;
(b) Secretary’s record of the minutes of said meeting; and
(c) Individual written authorizations for check-off duly signed by the employees
concerned.
3. ASSESSMENT FOR ATTORNEY’S FEES, NEGOTIATION FEES AND SIMILAR

CHARGES.
The rule is that no such attorney’s fees, negotiation fees or similar charges of any kind arising
from the negotiation or
conclusion of the CBA shall be imposed on any individual member of the contracting union.
Such fees may be charged only
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2015 BAR EXAMS
against the union funds in an amount to be agreed upon by the parties. Any contract,
agreement or arrangement of any sort to the contrary is deemed null and void. Clearly, what
is prohibited is the payment of attorney’s fees when it is effected through forced
contributions from the workers from their own funds as distinguished from the
union funds.
4. CHECK-OFF OF UNION DUES AND ASSESSMENTS.
“Check-off” means a method of deducting from the employee’s pay at prescribed periods,
any amount due for fees, fines or assessments. It is a process or device whereby the
employer, on agreement with the union recognized as the proper bargaining representative,
or on prior authorization from its employees, deducts union dues and assessments from the
latter’s wages and remits them directly to the union.
5. INDIVIDUAL WRITTEN AUTHORIZATION, WHEN REQUIRED.
The law strictly prohibits the check-off from any amount due an employee who is a member of
the union, of any union dues, special assessment, attorney’s fees, negotiation fees or any
other extraordinary fees other than for mandatory activities under the Labor Code, without the
individual written authorization duly signed by the employee. Such authorization must
specifically state the amount, purpose and beneficiary of the deduction. The purpose of the
individual written authorization is to protect the employees
(c) from unwarranted practices that
diminish their compensation without their knowledge or consent.
AGENCY FEES
Bar
ChanRobles
6. INDIVIDUAL WRITTEN AUTHORIZATION,
(i) WHEN NOT REQUIRED.
REQUISITES FOR ASSESSMENT
In the following cases, individual written authorization is not required:
1. NATURE OF AGENCY FEE - NEITHER CONTRACTUAL NOR STATUTORY BUT QUASI-CONTRACTUAL.

a. Assessment from non-members of the bargaining agent of “agency fees” which should be
equivalent to the dues and other fees paid by members of the recognized bargaining agent, if
such non-members
The bargaining accept the successfully
agent which benefits under thetheCBA.
negotiated CBA with the employer is given the right to collect a
b. Deductions for fees for mandatory activities such as labor relations seminars and
labor education activities. c. Deductions for withholding tax mandated under the
National Internal Revenue Code.
e. Deductions for withholding of wages because of employee’s debt to the employer which
is already due.
f. Deductions made pursuant to a judgment against the worker under circumstances

where the wages may be the subject of attachment or execution but only for debts
incurred for food, clothing, shelter an d medical attendance.
g. Deductions from wages ordered by the court.
h. Deductions authorized by law such as for premiums for PhilHealth, SSS,

Pag-IBIG, employees’
compensation and the like.
reasonable fee, called “agency fee” from its non-members - who are employees covered
by the bargaining unit being represented by the bargaining agent - in case they accept the
benefits under the CBA. It is called “agency fees” because by availing of the benefits of the
CBA, they, in effect, recognize and accept the bargaining union as their “agent” as well.
2. A NON-BARGAINING UNION MEMBER HAS THE RIGHT TO ACCEPT OR NOT THE

BENEFITS OF THE CBA.
There is no law that compels a non-bargaining union member to accept the benefits provided
in the CBA. He has the freedom to choose between accepting and rejecting the CBA itself by
not accepting any of the benefits flowing therefrom. Consequently, if a non-bargaining union
member does not accept or refuses to avail of the CBA-based benefits, he is not under any
obligation to pay the “agency fees” since, in effect, he does not give recognition to the status
of the bargaining union as his agent.
3. LIMITATION ON THE AMOUNT OF AGENCY FEE.
The bargaining union cannot capriciously fix the amount of agency fees it may collect from its
non-members. Article
248(e) of the Labor Code expressly sets forth the limitation in fixing the amount of the agency
fees, thus: (1) It should be reasonable in amount; and
(2) It should be equivalent to the dues and other fees paid by members of the recognized
collective bargaining agent. Thus, any agency fee collected in excess of this limitation is a
nullity.
4. NON-MEMBERS OF THE CERTIFIED BARGAINING AGENT NEED NOT BECOME

MEMBERS THEREOF.
The employees who are not members of the certified bargaining agent which successfully
concluded the CBA are not required to become members of the latter. Their acceptance of the
benefits flowing from the CBA and their act of paying the agency fees do not make them
members thereof.
5. CHECK-OFF OF AGENCY FEES.
“Check-off” of agency fees is a process or device whereby the employer, upon agreement with
the bargaining union, deducts agency fees from the wages of non-bargaining union members
who avail of the benefits from the CBA and remits them directly to the bargaining union.
6. ACCRUAL OF RIGHT OF BARGAINING UNION TO DEMAND CHECK-OFF OF AGENCY

FEES.
The right of the bargaining union to demand check-off of agency fees accrues from the
moment the non-bargaining union member accepts and receives the benefits from the CBA.
This is the operative fact that would trigger such liability.
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2015 BAR EXAMS
7. NO INDIVIDUAL WRITTEN AUTHORIZATION BY NON-BARGAINING UNION

MEMBERS REQUIRED.
To effect the check-off of agency fees, no individual written authorization from the non-
bargaining union members who accept the benefits resulting from the CBA is necessary.
8. EMPLOYER’S DUTY TO CHECK-OFF AGENCY FEES.
It is the duty of the employer to deduct or “check-off” the sum equivalent to the amount of
agency fees from the non- bargaining union members' wages for direct remittance to the
bargaining union.”
10. MINORITY UNION CANNOT DEMAND FROM THE EMPLOYER TO GRANT IT THE
RIGHT TO CHECK-OFF OF UNION DUES AND ASSESSMENTS FROM THEIR MEMBERS.
The obligation on the part of the employer to undertake the duty to check-off union dues and
special assessments
holds and applies only to the bargaining agent and not to any other union/s (called “Minority
Union/s”).
B.
RIGHT TO COLLECTIVE BARGAINING DUTY TO BARGAIN COLLECTIVELY
DUTY TO BARGAIN COLLECTIV

1. MEANING OF DUTY TO BARGAIN COLLECTIVELY.
ELY
The “duty to bargain collectively” WHEN THERE means the performance
IS ABSENCE OF A CBA of a mutual obligation to
meet and convene promptly and expeditiously in good faith for the purpose of
negotiating an agreement with respect to wages, hours of work and all other terms
Bar
and
1. HOWconditions ChanRobles
DUTY SHOULDof employment,
BE DISCHARGED WHENincluding
THERE IS NOproposals
CBA YET. for adjusting any grievances or
questions arising under such agreement and executing a contract incorporating such
agreements if requested by either party but such duty does not compel any party to agree to
a proposal The or
dutytotomake
bargainany
collectively when there has yet been no CBA in the bargaining unit where the bargaining agent
concession.
seeks to operate should be complied with in the following order:
The duty does not compel any party to agree blindly to a proposal nor to make
concession. While the law imposes on both the employer and the bargaining union the
First, in accordance with any agreement or voluntary arrangement between the employer and the bargaining agent
mutual duty to bargain collectively, the employer is not under any legal obligation to initiate
providing for a more expeditious manner of collective bargaining; and
collective bargaining negotiations.
Secondly, in its absence, in accordance with the provisions of the Labor Code, referring to Article 250 thereof which
2. TWO (2) SITUATIONS CONTEMPLATED.
The duty to bargain collectively involves two (2) situations, namely:
1. Duty to bargain collectively in the absence of a CBA under Article 251 of the Labor
Code.
2. Duty to bargain collectively when there is an existing CBA under Article 253 of the
Labor Code.
lays down the procedure in collective bargaining.
DUTY TO BARGAIN COLLECTIVELY WHEN THERE IS A CBA
1. CONCEPT.
When there is a CBA, the duty to bargain collectively shall mean that neither party shall
terminate nor modify such agreement during its lifetime. However, either party can serve a
written notice to terminate or modify the agreement at least sixty (60) days prior to its
expiration date. It shall be the duty of both parties to keep the status quo and to continue
in full force and effect the terms and conditions of the existing agreement during the 60-day
period and/or until a new agreement is reached by the parties.
2. FREEDOM PERIOD.
The last sixty (60) days of the 5-year lifetime of a CBA immediately prior to its expiration is
called the “freedom period.” It is denominated as such because it is the only time when the
law allows the parties to freely serve a notice to terminate, alter or modify the existing CBA. It
is also the time when the majority status of the bargaining agent may be challenged by
another union by filing the appropriate petition for certification election.
3. AUTOMATIC RENEWAL CLAUSE.
a. Automatic renewal clause deemed incorporated in all CBAs.
Pending the renewal of the CBA, the parties are bound to keep the status quo and to treat the
terms and conditions embodied therein still in full force and effect during the 60-day freedom
period and/or until a new agreement is negotiated and ultimately concluded and reached by
the parties. This principle is otherwise known as the “automatic renewal clause” which is
mandated by law and therefore deemed incorporated in all CBAs.
For its part, the employer cannot discontinue the grant of the benefits embodied in the CBA
which just expired as it is duty-bound to maintain the status quo by continuing to give the
same benefits until a renewal thereof is reached by the parties. On the part of the union, it
has to observe and continue to abide by its undertakings and commitments under the expired
CBA until the same is renewed.
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2015 BAR EXAMS
4. KIOK LOY DOCTRINE.
This doctrine is based on the ruling In Kiok Loy v. NLRC, 1 where the petitioner, Sweden Ice
Cream Plant, refused to submit any counter-proposal to the CBA proposed by its employees’
certified bargaining agent. The High Court ruled that the employer had thereby lost its right to
bargain the terms and conditions of the CBA. Thus, the CBA proposed by the union was
imposed lock, stock and barrel on the erring company.
The Kiok Loy case epitomizes the classic case of negotiating a CBA in bad faith consisting of
the employer’s refusal to bargain with the collective bargaining agent by ignoring all notices
for negotiations and requests for counter-proposals. Such refusal to send a counter-proposal
to the union and to bargain on the economic terms of the CBA constitutes an unfair labor
practice under Article 248(g) of the Labor Code.
2.
COLLECTIVE BARGAINING AGREEMENT (CBA)
1.
CBA.
A “Collective Bargaining Agreement” or “CBA” for short, refers to the negotiated

Beingcontract
the law b between a duly
etween the recognized
parties, any violation orr
thereof can be subject of
edress in court.
certified exclusive bargaining agent of workers and their employer, concerning wages, hours
of work and all other terms and conditions of employment in the appropriate bargaining unit,
Bar ChanRobles
including
only enforce
mandatory
Non-impairment
upon the request
provisions
of obligations
of the
for grievances
of contract.
exclusive
A contract is and
bargaining
arbitration
the law between the machineries.
representative
parties and courtsIthave
but also by the
is executed
no choice butnot
employer.
to
such contract so long as it is not contrary to law, morals, good customs or public policy. Otherwise, courts would be
interfering with the freedom of contract of the parties.
2. ESSENTIAL REQUISITES OF COLLECTIVE BARGAINING.
Prior to any collective bargaining negotiations between the employer and the bargaining
CBA is not an ordinary contract as it is impressed with public interest.
union, the following requisites must first be satisfied:
Automatic Incorporation Clause – law is presumed part of the CBA.
1. Employer-employee relationship must exist between the employer and the members
of the
Thebargaining
benefits derivedunit
from being
the CBArepresented by the and
and the law are separate bargaining agent;
distinct from each other.
Workers are allowed to negotiate wage increases separately and distinctly from legislated wage increases. The
2. The bargaining agent must have the majority support of the members of the
bargaining unit established through the modes sanctioned by law; and
3. A lawful demand to bargain is made in accordance with law.
3. SOME PRINCIPLES ON CBA.
CBA is the law between the parties during its lifetime and thus must be complied with
in good faith.
parties may validly agree in the CBA to reduce wages and benefits of employees
provided such reduction does not go below the minimum standards.
Ratification of the CBA by majority of all the workers in the bargaining unit makes the same
binding on all employees therein.
Employees entitled to CBA benefits. The following are entitled to the benefits of the CBA:
(1) Members of the bargaining union;
(2) Non-members of the bargaining union but are members of the bargaining unit; (3)
Members of the minority union/s who paid agency fees to the bargaining union; and (4)
Employees hired after the expiration of the CBA.
Pendency of a petition for cancellation of union registration is not a prejudicial

question before CBA negotiation may proceed.
CBA should be construed liberally. If the terms of a CBA are clear and there is no doubt
as to the intention of the contracting parties, the literal meaning of its stipulation shall prevail.
(a)
MANDATORY PROVISIONS OF CBA
1. MANDATORY STIPULATIONS OF THE CBA.
The Syllabus mentions 4 provisions that are mandatorily required to be stated in the CBA, to
wit:
1. Grievance Procedure;
2. Voluntary Arbitration;
3. No Strike-No Lockout Clause; and
4. Labor-Management Council (LMC).
If these provisions are not reflected in the CBA, its registration will be denied by the BLR.
1 G.R.No. L-54334, Jan. 22, 1986, 141 SCRA 179, 188.
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2015 BAR EXAMS
(i) GRIEVANCE PROCEDURE
1. “GRIEVANCE” OR “GRIEVABLE ISSUE”.
A “grievance” or “grievable issue” is any question raised by either the employer or the
union regarding any of the following issues or controversies:
1. The interpretation or implementation of the CBA;
2. The interpretation or enforcement of company personnel policies; or
3. Any claim by either party that the other party is violating any provisions of the CBA or
company personnel policies.
In order to be grievable, the violations of the CBA should be ordinary and not gross in
character; otherwise, they shall be considered as unfair labor practice (ULP).
Gross violation of the CBA is defined as flagrant and/or malicious refusal by a party
thereto to comply with the economic provisions thereof. If what is violated, therefore,
is a non-economic or a political provision of the CBA, the same shall not be considered as
unfair labor practice and may thus be processed as a grievable issue in accordance with and
following the grievance machinery laid down in the CBA.
2. GRIEVANCE MACHINERY.
“Grievance machinery” refers to the mechanism for the adjustment and resolution of
grievances arising from the interpretation or implementation of a CBA and those arising from
the interpretation or enforcement of company personnel policies.
“Volun ary PROCEDURE.
3. GRIEVANCE arbitration” refers to the mode of settling labor-
managemen procedure”
“Grievance t disputes in refers
which the
to parties select a competent,
the internal rules of trained and impartial
procedure third person
established bywho
theis tasked to decide
parties in
on the merits of the case and whose decision is final and
executory.
issues
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their CBA with voluntary arbitration as the terminal step, which are intended to resolve all
Bar
arising from the implementation and interpretation of their collective agreement. It is
that part of the CBA which provides for a peaceful way of settling differences and
misunderstanding between the parties.
2. VOLUNTARY ARBITRATOR.
The terms A “Volun“grievance procedure”

ary Arbitrator” refers and
to any person who “grievance
has been mutually namedmachinery”
or designated by themay bethe CBA
parties to used
interchangeably.
– the employer and the bargaining agent - to hear and decide the issues between them.
(ii) VOLUNTARY ARBITRATION

A Voluntary Arbitrator is not an employee, functionary or part of the government or of the Department of Labor and
1. VOLUNTARY ARBITRATION.
Employment, but he is authorized to render arbitration services provided under labor laws.
(iii)
“NO STRI KE, NO LO CKO UT” CL AU SE
1. SIGNIFICANCE OF THE CLAUSE.
A “No Strike, No Lockout” clause in the CBA is an expression of the firm commitment of the
parties thereto that, on the part of the union, it will not mount a strike during the effectivity of
the CBA, and on the part of the employer, that it will not stage a lockout during the lifetime
thereof.
This clause may be invoked by an employer only when the strike is economic in nature or
one which is conducted to force wage or other concessions from the employer that are not
mandated to be granted by the law itself. It does not bar strikes grounded on unfair labor
practices. This is so because it is presumed that all economic issues between the employer
and the bargaining agent are deemed resolved with the signing of the CBA.
The same rule also applies in case of lockout. The said clause may only be invoked by the
union in case the ground for the lockout is economic in nature but it may not be so cited if
the ground is unfair labor practice committed by the union.
2. EFFECT OF VIOLATION OF THE CLAUSE.
A strike conducted in violation of this clause is illegal.
(iv)
LABOR-MANAGEMENT COUNCIL
1. CREATION OF LMC, CONSTITUTIONALLY AND LEGALLY JUSTIFIED.
The Labor-Management Council (LMC) whose creation is mandated under the Labor Code, is
meant to implement the constitutionally mandated right of workers to participate in
policy and decision-making processes of the establishment where they are employed
insofar as said processes will directly affect their rights, benefits and welfare. This is the
body that implements the policy of co-determination in the Constitution.
The LMC is mandated to be created in both organized and unorganized establishments.
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2015 BAR EXAMS
2. SELECTION OF REPRESENTATIVES TO LMC.
In organized establishments, the workers’ representatives to the committee or council

should be nominated by the exclusive bargaining representative.
In establishments where no legitimate labor organization exists, the workers’

representative should be elected directly by the employees at large.
3. LABOR-MANAGEMENT COUNCIL (LMC) VS. GRIEVANCE MACHINERY (GM).
To avoid confusion and possible major legal complication, a clear distinction line should be
drawn between LMC and
GM. The following may be cited:
1. Constitutional origin. – The creation of the LMC is based on the constitutional grant to
workers of the right to participate in policy and decision-making processes under the 1st
paragraph, Section 3, Article XIII of the 1987 Constitution, thus:
“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
5. Nature
wage. They shallo also participate in policy andf decision-making
functions. - The LMC isprocesses
in the nature affecting
of a preventive
their rights and benefits as may be provided by law.”
mechanism meant to prevent and avoid disputes or grievances by co-determining the proper policies that should be
implemented by the employer in respect of the workers’ rights,
The creation
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of awhile
and welfare; GM,a GMonis the other hand,
an adjudicatory is based
mechanism which ison a different
set into motion onlyconstitutional provision,
when a dispute or grievance the
occurs.
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2nd paragraph, Section 3, Article XIII of the 1987 Constitution, which provides as follows:
6. Nature of cognizable issues. – The LMC performs non-adversarial and non-adjudicatory tasks as it concerns itself
only with policy formulations and decisions affecting the workers’ rights, benefits and welfare and not violations or transgressions
of any policy, rule or regulation; while that of the GM is adversarial and adjudicatory in character since its jurisdiction is confined
“The State and
to resolving shalldeciding
promote the and
disputes principle of shared
grievances between responsibility
management andbetween workers
the workers arising and
from employers
violations or
and the preferential
transgressions use of
of existing policies, rulesvoluntary
or regulations.modes in settling
In other words, the LMC disputes, including
does not resolve grievable conciliation,
or contentious
and shall
issues; enforce
the GM does. their mutual compliance therewith to foster industrial peace.”
2. Legal anchor. - The creation of LMC is provided under Article 255 of the Labor Code;
while the formation of a GM
is mandated under Article 260 of the same Code.
3. Compulsory provision in the CBA. - Both LMC and GM are compulsorily required to be
embodied in the CBA in order for it to be considered a valid agreement.
4. Purpose for creation. - The LMC is created for the purpose of affording workers the right
to participate in policy and decision-making processes in matters affecting their rights,
benefits and welfare; while that of the GM is to resolve disputes and grievances arising from
such policies or decisions or more specifically, to adjust and resolve grievances arising from
(1) the interpretation or implementation of the CBA or (2) the interpretation or enforcement of
company personnel policies.
A case illustrative of this principle is the 2011 case of Cirtek Employees Labor Union-
Federation of Free Workers v. Cirtek Electronics, Inc. The CBA negotiation between
petitioner union and respondent company was deadlocked resulting in the staging of a strike
by the former. The DOLE Secretary assumed jurisdiction over the labor dispute but before he
could rule on the controversy, respondent created a Labor-Management Council (LMC)
through which it concluded with the remaining officers of petitioner a Memorandum of
Agreement (MOA) providing for daily wage increases of P6.00 per day effective January 1,
2004 and P9.00 per day effective January 1, 2005. Petitioner submitted the MOA to the DOLE
Secretary, alleging that the remaining officers signed the MOA under respondent’s assurance
that should the Secretary order a higher award of wage increase, respondent would comply.
Respecting the MOA, petitioner posits that it was “surreptitiously entered into [in] bad faith,”
it having been forged without the assistance of the Federation of Free Workers or counsel,
adding that respondent could have waited for the Secretary’s resolution of the pending CBA
deadlock or that the MOA could have been concluded before representatives of the DOLE
Secretary. As found by the DOLE Secretary, the MOA came about as a result of the
constitution, at respondent's behest, of the LMC which, he reminded the parties, should not be
used as an avenue for bargaining but for the purpose of affording workers to participate in
policy and decision-making. Hence, the agreements embodied in the MOA were not the proper
subject of the LMC deliberation or procedure but of CBA negotiations and, therefore, deserving
little weight.
7. Composition. - The representatives of the workers to the LMC may or may not be
nominated by the recognized or certified bargaining agent, depending on whether the
establishment is organized or unorganized. Thus, in organized establishments, the workers’
representatives to the LMC should be nominated by the exclusive bargaining agent. In
establishments where no legitimate labor organization exists, the workers’
representatives should be elected directly by the employees of the establishment at large;
while those in the GM are nominated solely by the bargaining agent.
(b) DURATION OF CBA
(i)
FOR ECONOMIC PROVISIONS
(ii)
FOR NON-ECONOMIC PROVISIONS
1. TERMS OF A CBA.
The terms of a CBA are classified into two (2), viz.:
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2015 BAR EXAMS
(a) Representation aspect – 5 years which is the lifetime of a CBA;
(b) All other provisions – Subject to renegotiation after first 3 years of the 5-year
lifetime of CBA.
2. REPRESENTATION ASPECT.
The phrase “representation aspect” in Article 253-A of the Labor Code refers to the identity
and majority status of the bargaining agent that successfully negotiated the CBA as the
exclusive bargaining representative of the employees in the appropriate bargaining unit
concerned.
The 5-year representation status of the incumbent exclusive bargaining agent should be
reckoned from the effectivity of the CBA. This means that no petition for certification election
questioning its majority status may be entertained during the lifetime of the CBA except
within the 60-day freedom period immediately preceding the expiry date of the 5-year term.
Suspension of CBA for a period longer than 5 years, held valid.
The case of Rivera v. Espiritu,1 is in point. It was held here that the suspension of the CBA
between PAL and PALEA for ten (10) years in order to resolve the strike is not violative of the
Constitution or the law. This is so because the right to free collective bargaining includes the
right to suspend it. There is nothing in Article 253-A which prohibits the parties from waiving
or
4. suspending the mandatory timetables and agreeing
“ALL OTHER PRO on the
VIS ONS,” remedies
REFER TO BOTHto enforceAND
ECONOMIC theNON-
same.
ECONOMI
Article 253-A has C PROVISIONS.
a two-fold purpose. One is to promote industrial stability and predictability.
Inasmuch as the agreement sought to promote industrial peace at PAL during its
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The phrase
rehabilitation, “all agreement
said other provisions”satisfies
mentionedthe
in Article
first253-A simply of
purpose refers to all the provisions of the CBA irrespective
Article
of whether they are economic or non-economic in nature. The only item excepted therefrom is the representation status of
253-A. The other is to assign specific timetables wherein negotiations become a matter of
the incumbent exclusive bargaining agent which may only be questioned during the 60-day freedom period.
right and requirement. Nothing in
Article 253-A prohibits

5. RETROACTIVITY the parties from waiving or suspending the mandatory timetables and
OF THE CBA.
agreeing on the remedies to enforce the same. The suspension agreement is a valid exercise
of the freedom to contract. Under the principle of inviolability of contracts guaranteed by the
Constitution, the of
The application contract
the rules onmust be upheld.
retroactivity depends onThe
any ofagreement afforded
the following two full protection to labor;
(2) situations:
promoted the shared responsibility between workers and employers; and exercised the
voluntary modes in settling disputes, including conciliation to foster industrial peace.
3. RE-NEGOTIATION OF ALL PROVISIONS OTHER THAN THE REPRESENTATION

ASPECT OF THE CBA SHOULD BE MADE AFTER FIRST 3 YEARS FROM EFFECTIVITY.
Considering that the five (5) year period is quite long during which the economic situations of
the parties may have already changed, Article 253-A recognizes the need for the parties to re-
assess and re-negotiate all the provisions of the CBA, except its representation aspect, after
the lapse of the first three (3) years of its 5-year lifetime. Such re-negotiation, however,
should only pertain to the terms and conditions of the parties’ relationship for the last
remaining two (2) years of the CBA’s 5-year term. This re-negotiation process may be invoked
by any of the parties as a matter of right.
(a) When the CBA is voluntarily concluded by the parties; or
(b) When the CBA is concluded through arbitral award.
6. RULE WHEN VOLUNTARILY CONCLUDED BY THE PARTIES IN THE NEGOTIATING

TABLE.
(a) The effectivity of the CBA shall retroact to the day immediately after the date of expiry of
the old CBA in case the new CBA is concluded and entered into within six (6) months from
the said expiry date.
(b) If the new CBA is entered into beyond six (6) months from the expiry date of the old
CBA, the parties are given the right to negotiate the duration of the retroactivity
thereof.
7. RULE ON RETROACTIVITY IN CASE OF CONCLUSION OF CBA THROUGH ARBITRAL

AWARD. a. No law on retroactivity in case of CBA arbitral awards.
The law is silent as to the retroactivity of a CBA secured through arbitral award or that
granted not by virtue of the mutual agreement of the parties but by intervention of the
government.
b. Variations in the application of the retroactivity rule.
The rule laid down by the Supreme Court in cases involving this particular issue of
retroactivity varies from case to case. Basically, the rule, based on jurisprudence, may be
restated in the following manner:
(1) Prospectivity rule;
(2) Retroactivity rule which makes the CBA retroactively effective to:
(a) the date of the expiration of the previous CBA; and
(b) the first day after the six-month period following the expiration of the last day of the
CBA.
(iii) FREEDOM PERIOD
1. 60-DAY FREEDOM PERIOD.
When there is an existing CBA, the parties thereto are bound to observe the terms and
conditions therein set forth until its expiration. Neither party is allowed to terminate nor
modify such agreement during its lifetime. The only time the partie s are
1 G.R. No. 135547, Jan. 23, 2002.
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2015 BAR EXAMS
allowed to terminate or modify the agreement is within the so-called “freedom period” of at least
sixty (60) days prior to its expiration date by serving a notice to that effect.”
2. REASON IT IS CALLED “FREEDOM PERIOD.”
The last 60 days of the 5-year lifetime of a CBA immediately prior to its expiration is called the
“freedom period”
because:
(a) it is the only time when the law allows the parties to freely serve a notice to
terminate, alter or modify the existing
CBA; and
(b) it is also the time when the majority status of the bargaining agent may be
challenged by another union by filing the appropriate petition for certification election.
3. RULE ON FILING OF CERTIFICATION ELECTION VIS-À-VIS FREEDOM PERIOD.
In a petition involving an organized establishment or enterprise where the majority status of the
incumbent collective bargaining union is questioned by a legitimate labor organization, the Med-
Arbiter shall immediately order the conduct of a certification election if the petition is filed during
the last sixty (60) days of the CBA. Any petition filed before or after the 60- day freedom
period shall be dismissed outright.
The 60-day freedom period based on the original collective bargaining agreement shall
not be affected by any amendment, extension or renewal of the CBA for purposes of
certification election.
4. AUTOMATIC RENEWAL CLAUSE.
A petition for certification election challenging the majority status of the existing bargaining agent
should be filed within – and not before or after - said 60-day freedom period. Upon the expiration
of the said period and no petition for certification election is filed by a challenging union, the
employer is duty-bound to continue to recognize the majority status of the incumbent bargaining
agent. Negotiation for a new CBA may even validly commence between the incumbent
bargaining agent and the employer during the 60-day freedom period if no challenge to
the bargaining agent’s majority status is posed by another union.
3.
UNION SECURITY
The “union security clause” allows the parties thereto to enter into an agr
mpulsory membership
eement requiring co
in the bargaining agent which successfully negotiated said CBA as a condition for continued employment with the
1. NATURE AND PURPOSE OF UNION SECURITY CLAUSE.
machinations. In this security clause lies the strength of the union during the enforcement of the
CBA. It is this clause that provides labor with substantial power in collective bargaining.
2. THE RIGHT NOT TO JOIN A UNION IS NOT ABSOLUTE SINCE IT MAY BE RESTRICTED.
The right of an employee not to join a union is not absolute and must give way to the collective
good of all members of the bargaining unit. When certain employees are obliged to join a
particular union as a requisite for continued employment, as in the case of a union security clause,
this condition is a valid restriction on the freedom or right not to join any labor organization
because it is in favor of unionism.
3. UNION SECURITY CLAUSE DOES NOT VIOLATE CONSTITUTIONAL RIGHT TO FREEDOM

OF ASSOCIATION.
A union security clause in a CBA is not a violation or a restriction of the employee’s right to
freedom of association guaranteed by the Constitution. Labor, being the weaker in economic
power and resources than capital, deserves protection tha t is actually substantial and material.
4. EMPLOYEES EXEMPTED FROM COVERAGE OF UNION SECURITY CLAUSE.
All employees in the bargaining unit covered by a Union Security Clause in their CBA with the
employer are subject to its terms. However, under law and established jurisprudence, the
following kinds of employees are exempted from its coverage, namely:
1. Employees who, at the time the union security agreement takes effect, are bona-fide
members of a religious organization which prohibits its members from joining labor
unions on religious grounds;
2. Employees who are already members of a union other than the bargaining agent at the
time the union security agreement took effect;
3. Confidential employees who are excluded from the rank-and-file or supervisory bargaining
unit;
4. Supervisory employees who are excluded from becoming members of the rank-and-file union
and vice-versa; and
5. Employees excluded from the union security clause by express terms of the
agreement.
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2015 BAR EXAMS
(a)
UNION SECURITY CLAUSES:
CLOSED SHOP, UNION SHOP, MAINTENANCE OF MEMBERSHIP SHOP, ETC.
1. CLASSIFICATION OF UNION SECURITY ARRANGEMENTS.
Generally, a union security clause may take the form of:
1. Closed-shop agreement;
2. Maintenance of membership agreement;
3. Union shop agreement;
4. Modified union shop agreement;
5. Exclusive bargaining agreement;
6. Bargaining for members only agreement;
7. Agency shop agreement; or
8. Preferential hiring agreement.
Modification of arrangements.
The above classification admits of certain modified types which the parties may agree upon in the
CBA depending on the peculiar requirements of the situation.
2. CLOSED-SHOP AGREEMENT.
A “closed-shop” may be defined as a scheme in which, by agreement between the employer and
its employees through their bargaining union/agent, no person may be employed unless he or she
is, becomes, and, for the duration of the agreement, remains a member in good standing of the
bargaining union. Basically, this kind of agreement stipulates the undertaking by the employer not
to hire or employ any person who is not a member of the bargaining union. Once employed, it is
required that the said person should remain a member of the bargaining union in good standing as
a condition for continued employment, at least during the whole duration of the CBA.
3. MAINTENANCE OF MEMBERSHIP AGREEMENT.
There is “maintenance of membership agreement” when employees, who are union members
as of the effective date of the agreement, or who thereafter become members, must maintain
union membership as a condition for continued employment until they are promoted or transferred
out of the bargaining unit, or the agreement is terminated. Its role is to protect the union’s current
membership. By its express terms, it covers and renders continued union membership
compulsory for: (1)
those who were alrea dy union members at the time the CBA was signed; and (2)
who will become regular
the new employees
during the life of thewww.chanroblesbar.com

CBA. : www.chanroblesbar.com.ph
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4. UNION SHOP AGREEMENT.
Employees under this arrangement who are not union members at the time of the signing or
execution of the CBA are not required to join the bargaining union. However, any and all
workers hired or employed after the signing or execution of the CBA are required to join
the bargaining union.
6. EXCLUSIVE BARGAINING AGENT AGREEMENT.
The union which negotiated and concluded the CBA with management is considered and
recognized as the sole and exclusive bargaining agent of all the covered employees in the
bargaining unit, whether they be members or not of the said agent.
7. BARGAINING FOR MEMBERS ONLY AGREEMENT.
Under this arrangement, the union which negotiated and concluded the CBA with management is
recognized as the bargaining agent only for its own members.
8. AGENCY SHOP AGREEMENT.
Under this scheme, there is no requirement for non-members of the bargaining agent to become
its members. However, it is required that such non-union members should pay to the bargaining
agent an agency fee as a condition for their continued employment.
9. PREFERENTIAL HIRING AGREEMENT.
It is the principal feature of this arrangement that the employer gives preference in hiring to the
members of the bargaining agent under equal circumstances and qualifications. Once hired or
employed, they are required to maintain their membership in good standing in the bargaining
agent for the duration of the CBA as a condition for their continued employment.
10. DISMISSAL DUE TO VIOLATION OF UNION SECURITY CLAUSE.
a. Requisites for valid termination based on union security clause.
The following are the requisites that the employer should comply prior to terminating the
employment of an employee by virtue of the enforcement of the union security clause:
(1) The union security clause is applicable;
(2) The union is requesting for the enforcement of the union security provision in the CBA; and
(3) There is sufficient evidence to support the union’s decision to expel the employee from the
union.
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2015 BAR EXAMS
The foregoing requisites constitute a just cause for terminating an employee based on
the CBA’s union security
provisio
n.
b. The due process afforded by the union prior to expulsion is different from
the due process required prior to termination of employment.
The distinction is not hard to comprehend. The due process afforded by the union is
meant solely and exclusively to
address the issue of validity of the termination of the membership of the employee in the
union; while that required of the employer is aimed at addressing the issue of validity of the
employee’s termination of employment. Hence, it is complete error on the part of the
employer to adopt as its own due process what has been earlier afforded by the union to the
erring employee without conducting its own independent and separate due process.
Thus, in declaring the illegality of the dismissal of petitioner in Cariño v. NLRC,1 the
Supreme Court noted in regard to the involvement of the company in his dismissal, that the
company, upon being formally advised in writing of the expulsion of petitioner Cariño from the
union, in turn simply issued a termination letter to Cariño, the termination being made
effective the very next day. The Company should have given petitioner Cariño an opportunity
to explain his side of the controversy with the union. Notwithstanding the union security
clause in the CBA, the company should have reasonably satisfied itself by its own inquiry that
the union had not been merely acting arbitrarily and capriciously in impeaching and expelling
petitioner Cariño. Had the company taken the trouble to investigate the acts and proceedings
of the union, it could have very easily determined that the union had acted arbitrarily in
impeaching and expelling from its ranks petitioner Cariño.
11. SOME PRINCIPLES ON TERMINATION DUE TO VIOLATION OF UNION SECURITY

CLAUSE.
Employer is obligated to act upon being demanded by the union to terminate the employment
of its errant members.
Members of the minority union cannot be compelled to join the bargaining union.
The union security clause therefore does not cover employees who are members of the
union/s other than the bargaining union. Not being so
covered, they cannot be dismissed for violation of said clause.
The employer has the right to be reimbursed for payment of any claims arising out of
dismissals demanded by the union under the union security clause. Such right of
reimbursement may be invoked:
(1) By express provision in the CBA to that effect; or
(2) By securing it through judicial directive.
(b)
CHECK-OFF; UNION DUES, AGENCY FEES
1. CHECK-OFF OF AGENCY FEE, DIFFERENT FROM CHECK-OFF OF UNION DUES AND

ASSESSMENTS.
BARGAINING IN BAD FAITH
1. BASIC
PRINCIPLES.
It is essential that the employer and the employees should both act in good faith.
Where an employer did not even bother to submit an answer to the bargaining proposals of
the union, there is a clear evasion of the duty to bargain collectively.
2. MAKING A PROMISE DURING THE CBA NEGOTIATIONS, NOT AN INDICATION OF

BAD FAITH.
Promises made by management during the CBA negotiations may not be considered an
Check-off of agency fee does not require the execution by the non-
indication of bad faith or a scheme of feigning to undertake the negotiation proceedings
through empty promises.
bargaining union members of individual written authorizations; while such is an indispensable requisite for check-off of
union dues and special assessments from members
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3. ADAMANT STANCE RESULTING IN AN IMPASSE, NOT AN INDICIUM OF BAD FAITH.
of the bargaining union.
The adamant insistence on a bargaining position to the point where the negotiations reach an
impasse does not establish bad faith. Neither can bad faith be inferred from a party’s
insistence on the inclusion of a particular substantive 4. provision unless it concerns trivial
matters or is obviously intolerable.
UNFAIR LABOR PRACTICE IN
COLLECTIVE
4. PARTIES HAVE NO OBLIGATION BARGAINING AGREE TO THE PROPOSALS
TO PRECIPITATELY
OF EACH OTHER.
While the law makes it an obligation for (a) the employer and the employees to bargain
collectively with each other, such compulsion does not include the commitment to precipitately
accept or agree to the proposals of the other. All it contemplates is that both parties should
approach the negotiation with an open mind and make reasonable effort to reach a common
ground of agreement.
5. ALLEGATIONS OF BAD FAITH WIPED OUT WITH THE SIGNING OF THE CBA.
With the execution of the CBA, bad faith bargaining can no longer be imputed upon any of the
parties thereto. All provisions in the CBA are supposed to have been jointly and voluntarily
incorporated therein by the parties. The CBA is proof enough that the company exerted
reasonable effort at good faith bargaining.
1 G.R. No. 91086, May 8, 1990, 185 SCRA 177.
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(b)
REFUSAL TO BARGAIN
1. FAILURE OR REFUSAL OF MANAGEMENT TO GIVE COUNTER-PROPOSALS TO THE

UNION’S DEMANDS.
The failure of the employer to submit its counter-proposals to the demands of the bargaining
union does not, by itself, constitute refusal to bargain. However, it is different if the employer
refuses to submit an answer or reply to the written bargaining proposals of the certified
bargaining union. In this case, unfair labor practice is committed.
In General Milling Corporation v. CA,1 the Supreme Court found the petitioner guilty of
unfair labor practice for refusing to send a counter-proposal to the union and to bargain anew
on the economic terms of the CBA.
Similarly, in the earlier case of Colegio de San Juan de Letran v. Association of

Employees and Faculty of Letran,2 the petitioner school was declared guilty of unfair labor
practice when it failed to make a timely reply to the proposals of the certified
bargaining union more than a month after the same were submitted to it . In
explaining its failure to reply, the school merely offered the feeble excuse that its Board of
Trustees had not yet convened to discuss the matter. Clearly, its actuation showed a lack of
sincere desire to negotiate the CBA thereby rendering it guilty of unfair labor
practice.
2. REFUSAL OF A PARTY TO SIGN THE CBA.
A party to a fully-concluded CBA may be compelled to sign it, especially if said refusal to sign
is the only remaining hitch to its being implemented. Such refusal is considered an unfair
labor practice.
(c)
INDIVIDUAL BARGAINING
1. EMPLOYER’S ACT OF NEGOTIATING WITH UNION MEMBERS INDIVIDUALLY, A

ULP.
To negotiate or attempt to negotiate with individual workers rather than with the certified
bargaining agent is an unfair labor practice.
In Insular Life Assurance Co., Ltd., Employees Association-NATU v. Insular Life

Assurance Co., Ltd.,3 respondent company, through its president, sent two (2) sets of
letters to the individual strikers during the strike. The fi rst contained promises of benefits to
the employees in order to entice them to return to work; while the second contained threats
to obtain replacements for the striking employees in the event they did not report for work on
June 2, 1958. The respondents contend that the sending of the letters constituted a
legitimate exercise of their freedom of speech. The Supreme Court,
the same would only “fragment the employees” of petitioner. What respondent union
will be achieving is to divide the employees, more particularly, the rank-and-file employees of
petitioner hotel. The other workers who are not members are at a serious disadvantage,
because if the same shall be allowed, employees who are non-union members will be
economically impaired and will not be able to negotiate their terms and conditions of work,
thus defeating the very essence and reason of collective bargaining which is an effective
safeguard against the evil schemes of employers in terms and conditions of work.
Petitioner’s refusal to bargain then with respondent cannot be considered an unfair
labor practice to justify the staging of the strike.
(d)
BLUE-SKY BARGAINING
however, disagreed. The said letters were directed to the striking employees
1.
individua lly - by registered special delivery mail at
CONCEPT.
that - without being coursed through the unions which were representing the employees in collective bargaining. Moreover, the
Bar ChanRobles
“Blue-sky bargaining” means making exaggerated or unreasonable proposals. This kind of
sending of these letters is not protected by the free speech provision of the Constitution. The free speech protection under the
unfair labor practice act may only be committed by the bargaining union.
Constitution is inapplicable where the expression of opinion by the employer or his agent contains a promise of benefit or threats
or reprisal.
(e)
SURFACE BARGAINING
2. UNION CANNOT VALIDLY BARGAIN IN BEHALF OF ITS MEMBERS ONLY.
Respondent union in Philippine Diamond Hotel and Resort, Inc. [Manila Diamond Hotel] v. Manila Diamond Hotel
1. 4
Employees Union, insists that it could validly bargain in behalf of “its members” only. The Supreme Court, however, ruled that
CONCEPT.
“Surface bargaining” is defined as “going through the motions of negotiating” without any
legal intent to reach an agreement. This kind of unfair labor practice may only be committed
by the employer.
1 G.R. No. 146728, Feb. 11, 2004.
2 G.R. No. 141471, Sept. 18, 2000.
3 G.R. No. L-25291, Jan. 30, 1971, 37 SCRA 244.
4 G.R. No. 158075, June 30, 2006.
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2015 BAR EXAMS
5.
UNFAIR LABOR PRACTICE (ULP)
(a) NATURE OF ULP
1. WHEN AN ACT
CONSTITUTES ULP.
At the outset, it must be clarified that not all unfair acts constitute ULPs. While an act or
decision of an employer or a union may be unfair, certainly not every unfair act or decision
thereof may constitute ULP as defined and enumerated under the law.
The act complained of as ULP must have a proximate and causal connection with any of
the following 3 rights:
1. Exercise of the right to self-organization;
2. Exercise of the right to collective bargaining; or

means flagrant and/or malicious refusal to comply with the economic
3. Compliance with CBA.
provisions thereof.
ChanRobles
5. Article 263 [c] which refers to union-busting, a form of ULP, involving the dismissal from employment of union
Bar
Sans this connection, the unfair acts do not fall within the technical signification of the term
officers duly elected in accordance with the union constitution and by-laws, where the existence of the union is
“unfair labor practice.”
threatened thereby.
4. PARTIES WHO/WHICH MAY COMMIT ULP.

2. THE ONLY ULP WHICH MAY OR MAY NOT BE RELATED TO THE EXERCISE
OF THE RIGHT TO SELF- ORGANIZATION AND COLLECTIVE BARGAINING.
A ULP may be committed by an employer or by a labor organization. Article 248 describes the ULPs that may be
committed by an employer; while Article 249 enumerates those which may be committed by a labor organization.
The only ULP which is the exception as it may or may not relate to the exercise of the right to
self-organization and collective bargaining is the act described under Article 248 [f], i.e.,
to dismiss, discharge or otherwise prejudice or discriminate against an employee
for having given or being about to give testimony under the Labor Code.
3. LABOR CODE PROVISIONS ON ULP.
Under the Labor Code, there are only five (5) provisions related to ULP, to wit:
1. Article 247 which describes the concept of ULPs and prescribes the procedure for their
prosecution;
2. Article 248 which enumerates the ULPs that may be committed by employers;
3. Article 249 which enumerates the ULPs that may be committed by labor organizations;
4. Article 261 which considers violations of the CBA as no longer ULPs unless the same are
gross in character which
On the part of the employer, only the officers and agents of corporations, associations or
partnerships who have actually participated in or authorized or ratified ULPs are criminally
liable.
On the part of the union, only the officers, members of governing boards, representatives or
agents or members of labor associations or organizations who have actually participated in or
authorized or ratified the ULPs are criminally liable.
5. ELEMENTS OF ULP.
Before an employer or labor organization may be said to have committed ULP, the following
elements must concur:
1. There should exist an employer-employee relationship between the offended party and
the offender; and
2. The act complained of must be expressly mentioned and defined in the Labor Code
as an unfair labor practice.
Absent one of the elements aforementioned will not make the act an unfair labor practice.
6. ASPECTS OF ULP.
Under Article 247, a ULP has two (2) aspects, namely:
1. Civil aspect; and
2. Criminal aspect.
The civil aspect of an unfair labor practice includes claims for actual, moral and exemplary
damages, attorney’s fees and other affirmative reliefs. Generally, these civil claims should be
asserted in the labor case before the Labor Arbiters who have original and exclusive
jurisdiction over unfair labor practices. The criminal aspect, on the other hand, can only be
asserted before the regular court.
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2015 BAR EXAMS
(b)
ULP OF EMPLOYERS
I.
INTERFERENCE WITH, RESTRAINT OR COERCION OF EMPLOYEES IN THE EXERCISE

OF THEIR RIGHT TO SELF-ORGANIZATION
1. TEST OF INTERFERENCE, RESTRAINT OR COERCION.
The terms “interfere,” “restrain” and “coerce” are very broad that any act of management that
may reasonably tend to have an influence or effect on the exercise by the employees of their
right to self-organize may fall within their meaning and coverage. According to the Supreme
Court in Insular Life Assurance Co., Ltd., Employees Association-NATU v. Insular Life
Assurance Co., Ltd.,1 the test of whether an employer has interfered with or restrained or
coerced employees within the meaning of the law is whether the employer has engaged in
conduct which may reasonably tend to interfere with the free
exercise of the employees’ rights. It is not necessary that there be direct evidence that
any employee was in fact intimidated or coerced by the statements or threats of the employer
if there is a reasonable inference that the anti-union conduct of the employer does have an
adverse effect on the exercise of the right to self-organization and collective bargaining.
2. TOTALITY OF CONDUCT DOCTRINE.
In ascertaining whether the act of the employer constitutes interference with, restraint or
coercion of the employees’
exercise of their right to self-organization and collective bargaining, the “totality of conduct
doctrine” may be applied.
The totality of conduct doctrine means that expressions of opinion by an employer, though
innocent in themselves, may be held to constitute an unfair labor practice because of the
circumstances under which they were uttered, the history of the particular employer’s labor
relations or anti-union bias or because of their connection with an established collateral plan
of coercion or interference. An expression which may be permissibly uttered by one employer,
might, in the mouth of a more hostile employer, be deemed improper and consequently
actionable as an unfair labor practice. The past conduct of the employer and like
considerations, coupled with an intimate connection between the employer’s action and the
union affiliation or activities of the particular employee or employees taken as a whole, may
raise a suspicion as to the motivation for the employer’s conduct. The failure of the employer
to ascribe a valid reason therefor may justify an inference that his unexplained conduct in
respect of the particular employee or employees was inspired by the latter’s union
membership and activities.
3. INTERFERENCE IN THE EMPLOYEE’S RIGHT TO SELF-ORGANIZATION. a.

Interference is always ULP.
b. Formation of a union is never a valid ground to dismiss.
c. It is ULP to dismiss a union officer or an employee for his union activities.
II.
YELLOW DOG CONTRACT
1. WHAT IS A YELLOW DOG CONTRACT?
It is one which exacts from workers as a condition of employment that they shall not join or
belong to a labor organization, or attempt to organize one during their period of
employment or that they shall withdraw therefrom in case they are already
members of a labor organization.
2. COMMON STIPULATIONS IN A YELLOW DOG CONTRACT.
A typicalThe judicialdog contract embodies the following

yellow dictum is that any act of interference by the employer in the
stipulations:
exe rcise by employees of their right to self- organization constitutes an unfair labor practice. This is the very core of ULP.
(1) ChanRobles
A representation by the employee that he is not a member of a labor
Bar
organization; (2) A promise by the employee that he will not join a union; and
In Hacienda Fatima v. National Federation of Sugarcane Workers – Food and General Trade, the Supreme
2
(3) A promise
Court upheld the factualby theofemployee
findings the NLRC and that upon
the Court joining
of Appeals a labor
that from organization,
the employer’s he towill
refusal to bargain quit
its acts of
his employment.
economic inducements resulting in the promotion of those who withdrew from the union, the use of armed guards to prevent the
organizers to come in, and the dismissal of union officials and members, one cannot but conclude that the employer did not want
a union in its hacienda - a clear interference in the right of the workers to self-organization. Hence, the employer was held guilty
of unfair labor practice.
The act of the employer in imposing such a condition constitutes unfair labor practice under
Article 248(b) of the Labor
Code. Such stipulation in the contract is null and void.
III.
CONTRACTING OUT OF SERVICES AND FUNCTIONS
1. GENERAL
RULE.
As a general rule, the act of an employer in having work or certain services or functions being
performed by union members contracted out is not per se an unfair labor practice. This is so
because contracting-out of a job, work or service is clearly an exercise by the employer of its
business judgment and its inherent management rights and prerogatives. Hiring of
1 G.R. No. L-25291, Jan. 30, 1971, 37 SCRA 244.
2 G.R. No. 149440, Jan. 28, 2003.
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2015 BAR EXAMS
workers is within the employer’s inherent freedom to regulate its business and is a valid
exercise of its management prerogative subject only to special laws and agreements on the
matter and the fair standards of justice. The employer cannot be denied the faculty of
promoting efficiency and attaining economy by a study of what units are essential for its
operation. It has the ultimate right to determine whether services should be performed by its
personnel or contracted to outside agencies.
2. WHEN CONTRACTING-OUT BECOMES ULP.
It is only when the contracting out of a job, work or service being performed by union
members will interfere with, restrain or coerce employees in the exercise of their right to self-
organization that it shall constitute an unfair labor practice. Thus, it is not unfair labor
practice to contract out work for reasons of business decline, inadequacy of facilities and
equipment, reduction of cost and similar reasonable grounds.
IV. COMPANY UNION
1. COMPANY INITIATED, DOMINATED OR ASSISTED UNION.
Paragraph [d] of Article 248 considers it an unfair labor practice to initiate, dominate, assist or
VI.
otherwise interfere with the formation or administration of any labor organization, including
the giving of financial or other
FILING OFsupport
CHARGES to OR
it or its organizers
GIVING or supporters. Such union is
OF TESTIMONY
called “company union” as its formation, function or administration has been assisted by any
1. CONCEPT.
act defined as unfair labor practice under the Labor Bar
Code.
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Under paragraph [f] of Article 248 of the Labor Code, it is an unfair labor practice for an employer to dismiss, discharge
or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under the Labor
Code. V. DISCRIMINATION
2. THE ONLY ULP NOT REQUIRED TO BE RELATED TO EMPLOYEE’S EXERCISE OF THE RIGHT TO SELF-
ORGANIZATION AND COLLECTIVE BARGAINING.
1. COVERAGE OF
PROHIBITION.
What is prohibited as unfair labor practice under the law is to discriminate in regard to wages,
hours of work, and other terms and conditions of employment in order to encourage or
discourage membership in any labor organization.
4. MATERIALITY OF PURPOSE OF ALLEGED DISCRIMINATORY ACT.
In Manila Pencil Co., Inc. v. CIR,1 it was ruled that even assuming that business conditions
justify the dismissal of employees, it is an unfair labor practice of employer to dismiss
permanently only union members and not non-unionists.
In Manila Railroad Co. v. Kapisanan ng mga Manggagawa sa Manila Railroad Co.,2

the non-regularization of long-time employees because of their affiliation with the union
while new employees were immediately regularized was declared an act of discrimination.
It must be underscored that Article 248(f) is the only unfair labor practice that need not be
related to the exercise by the employees of their right to self-organization and collective
bargaining.
In Itogon-Suyoc Mines, Inc. v. Baldo,3 it was declared that an unfair labor practice was
committed by the employer when it dismissed the worker who had testified in the hearing of a
certification election case despite its prior request for the employee not to testify in the said
proceeding accompanied with a promise of being reinstated if he followed said request.
VII.
CBA-RELATED ULPs
1. THREE (3) CBA-RELATED ULPs.
Article 248 enunciates three (3) CBA-related unfair labor practices, to wit:
1. To violate the duty to bargain collectively as prescribed in the Labor Code.
2. To pay negotiation or attorney’s fees to the union or its officers or agents as part
of the settlement of any
issue in collective bargaining or any other dispute.
3. To violate a collective bargaining agreement.
VII-A.
P AY M ENT O F NEG O T I AT IO N AN D AT T O RNEY ’S F E ES
1. WHEN PAYMENT CONSIDERED ULP.
Article 248(h) of the Labor Code considers as an unfair labor practice the act of the employer
in paying negotiation fees or attorney’s fees to the union or its officers or agents as part of the
settlement of any issue in collective bargaining or any other dispute.
1 G.R. No. L-16903, Aug. 31, 1965, 14 SCRA 955.
2 G.R. No. L-19728, July 30, 1964.
3 G.R. No. L-17739, Dec. 24, 1964.
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2015 BAR EXAMS
VII-B. VIOLATION OF THE CBA
1. CORRELATION.
Article 248(i) of the Labor Code should be read in relation to Article 261 thereof. Under Article
261, as amended, violations of a CBA, except those which are gross in character, shall no
longer be treated as an unfair labor practice and shall be resolved as grievances under the
CBA. Gross violations of CBA shall mean flagrant and/or malicious refusal to comply with
the economic provisions of such agreement.
2. CASE LAW.
The act of the employer in refusing to implement the negotiated wage increase stipulated in
the CBA, which increase is intended to be distinct and separate from any other benefits or
privileges that may be forthcoming to the employees, is an unfair labor practice.
Refusal for a considerable number of years to give salary adjustments according to the
improved salary scales in the
no labor organization can be formed as the act of recruiting and convincing the
CBA is an unfair labor practice.
employe es is definitely an act of interference.
II.
BarChanRobles DISCRIMINATION
ULP OF LABOR ORGANIZATIONS
1. CONCEPT.
I.
Under Article 249(b), it is ULP for a labor organization, its officers, agents or representatives to cause or attempt to
RESTRAINT
cause an employerAND COERCION
to discriminate OF
against an EMPLOYEES
employee, including discrimination against an employee with respect to whom
membership in such organization has been denied, or to terminate an employee on any ground other than the usual terms and
IN THE EXERCISE
conditions OF THEIR
under which membership RIGHTofTO
or continuation SELF-ORGANIZATION
membership is made available to other members.
1. UNION MAY INTERFERE WITH BUT NOT RESTRAIN OR COERCE EMPLOYEES IN THE
EXERCISE OF THEIR RIGHT TO SELF-ORGANIZE.
Under Article 249(a), it is ULP for a labor organization, its officers, agents or representatives
to restrain or coerce employees in the exercise of their right to self-organization. Compared to
similar provision of Article 248(a) of the Labor Code, notably lacking is the use of the word
“interfere” in the exercise of the employees’ right to self-organize. The significance in the
omission of this term lies in the grant of unrestricted license to the labor organization, its
officers, agents or representa tives to interfere with the exercise by the employees of their
right to self-organization. Such interference is not unlawful since without it,
III.
DUTY OF UNION TO BARGAIN COLLECTIVELY
1. CONCEPT.
Under Article 249(c), it is ULP for a duly certified sole and exclusive bargaining union,
its officers, agents or representatives to refuse or violate the duty to bargain collectively with
the employer. This is the counterpart provision of Article
248(g) respecting the violation by the employer of its duty to bargain collectively.
2. PURPOSE.
The obvious purpose of the law is to ensure that the union will negotiate with management in
good faith and for the purpose of concluding a mutually beneficial agreement regarding the
terms and conditions of their employment relationship.
IV.
ANTI-FEATHERBEDDING DOCTRINE
1. CONCEPT.
Under Article 249(d), it is ULP for a labor organization, its officers, agents or representatives
to cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any
money or other things of value, in the nature of an exaction, for services which are not
performed or not to be performed, including the demand for fee for union negotiations.
This practice of the union is commonly known as “featherbedding” as it unduly and

unnecessarily maintains or increases the number of employees used or the amount of time
consumed to work on a specific job. This is done by the employees to unduly secure their
jobs in the face of technological advances or as required by minimum health and safety
standards, among other justifications. These featherbedding practices have been found to be
wasteful and without legitimate justifications.
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2015 BAR EXAMS
2. DEMAND FOR PAYMENT OF STANDBY SERVICES.
A union commits an unfair labor practice under this provision by causing or attempting to
cause an employer to pay or agree to pay for standby services. Payments for “standing-by,”
or for the substantial equivalent of “standing-by,” are not payments for “services performed”
within the meaning of the law. When an employer received a bona-fide offer of competent
performance of relevant services, it remains for the employer, through free and fair
negotiation, to determine whether such offer should be accepted and what compensation
should be paid for the work done.
V.
DEMAND OR ACCEPTANCE
OF NEGOTIATION FEES OR ATTORNEY’ S FEES
1. CONCEPT.
Under Article 249(e), it is ULP for a labor organization, its officers, agents or representatives
to ask for or accept negotiation fees or attorney’s fees from employers as part of the
CRIMINAL
settlement of any issue in collective bargaining or any LIABILITY FOR ULPs OF LABOR O
other dispute.
RGANIZATION
VI. Bar
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1. PERSONS LIABLE.
VIOLATION OF THE CBA
Article 249 is explicit in its provision on who should be held liable for ULPs committed by labor organizations. It states
that only the officers, members of governing boards, representatives or agents or members of labor associations or organizations
who have actually participated in, authorized or ratified unfair labor practices shall be held criminally liable.
1. CONCEPT.
Under Article 249(f), it is ULP for a labor organization, its officers, agents or representatives to
violate a CBA. C.
2. COUNTERPART PROVISION.
This is the counterpart provision of Article 248(i) regarding the employer’s act of violating a
CBA. But it must be noted that under Article 261 of the Labor Code, violation of the CBA is
generally considered merely a grievable issue. It becomes an unfair labor practice only if the
violation is gross in character which means that there is flagrant and/or malicious refusal to
comply with the economic (as distinguished from non-economic) stipulations in the CBA. This
principle applies not only to the employer but to the labor organization as well.
VII.
RIGHT TO PEACEFUL CONCERTED ACTIVITIES
1.
FORMS OF CONCERTED ACTIVITIES
1. FORMS OF CONCERTED ACTIVITIES.
There are three (3) forms of concerted activities, namely:
1. Strike;
2. Lockout; and
3. Picketing.
2. STRIKE.
“Strike” means any temporary stoppage of work by the concerted action of the employees as
a result of an industrial or labor dispute.
b. Forms and classification of strikes.
A strike may be classified:
1. As to nature:
a. Legal strike - one called for a valid purpose and conducted through means allowed by law.
b. Illegal strike - one staged for a purpose not recognized by law or, if for a valid purpose, it
is conducted through means not sanctioned by law.
c. Economic strike - one declared to demand higher wages, overtime pay, holiday pay,
vacation pay, etc. It is one which is declared for the purpose of forcing wage or other
concessions from the employer for which he is not required by law to grant.
d. Unfair labor practice (ULP) or political strike - one called to protest against the employer’s
unfair labor practices enumerated in Article 248 of the Labor Code, including gross violation of
the CBA under Article 261 and union- busting under Article 263(c) of the Labor Code.
e. Slowdown strike - one staged without the workers quitting their work but by merely
slackening or reducing their normal work output. It is also called “a strike on the installment
plan.”
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2015 BAR EXAMS
f. Mass leaves - One where the employees simultaneously filed leaves of absence based on
various reasons such as, inter alia, vacation and sick leaves.
g. Wildcat strike - one declared and staged without the majority approval of the
recognized bargaining agent. h. Sitdown strike - one where the workers stop working but
do not leave their place of work.
i. Overtime boycott – one involving the act of the workers in refusing to render overtime
work in violation of the
CBA, resorted to as a means to coerce the employer to yield to their demands.
j. Boycott of products – one which involves the concerted refusal to patronize an

employer's goods or services and to persuade others to a like refusal.
k. Attempts to damage, destroy or sabotage plant equipment and facilities and similar
activities;
l. The sporting by the workers of closely cropped hair or cleanly shaven heads after
their union filed a notice of strike as a result of a CBA deadlock is a form of illegal
strike.1
2. As to coverage:
a. General strike – one which covers and extends over a whole province or country. In this
kind of strike, the employees of various companies and industries cease to work in sympathy
5. As to th e extent of the interest of strikers:
with striking workers of another company. It is also resorted to for the purpose of putting
pressure on the government to enact certain labor- related measures such as mandated wage
increases or to cease from implementing a law which workers consider inimical to their
interest. It is alsostrike
a. Primary mounted
– refers tofor purposes
a strike conducted of paralyzing
by the or their
workers against crippling
employer,the entire
involving economic
a labor dispute
dispensation.ChanRobles
Bar directly affecting them.
b. Particular strike – one which covers a particular establishment or employer or one industry
involving one union or federation.
b. Secondary strike - refers to a strike staged by the workers of an employer involving an issue which does not
directly concern or affect their relationship but rather, by some circumstances affecting the workers such as
3. As to purpose:
when the employer persists to deal with a third person against whom the workers have an existing grievance.
a. EconomicWorkers
strike.stage this kind of strike to secure the economic assistance of their employer to force the third person to
yield to the union on the issues involving it and said third person.
b. Unfair labor practice strike or political strike.
4. As to the nature of the strikers’ action:
a. Partial strike – one which consists of unannounced work stoppages such as

slowdowns, walkouts or unauthorized extension of rest periods.
b. Sit-down strike.
c. Slowdown strike.
c. Sympathy strike - refers to a strike where the strikers have no demands or grievances or
labor dispute of their own against their employer but nonetheless stage the strike for the
purpose of aiding, directly or indirectly, other strikers in other establishments or companies,
without necessarily having any direct relation to the advancement of the strikers’ interest.
This is patently an illegal strike. An example of a sympathy strike is the “welga ng bayan”
where workers refuse to render work to join a general strike which does not involve a labor or
industrial dispute between the strikers and the employer struck against but it is staged in
pursuit of certain ends such as reduction in the electric power rates, increase in the legislated
wages, etc.
3. LOCKOUT.
“Lockout” means the temporary refusal by an employer to furnish work as a result of an

industrial or labor dispute. It consists of the following:
1. Shutdowns;
2. Mass retrenchment and dismissals initiated by the employer.
3. The employer’s act of excluding employees who are union members.
4. PICKETING.
“Picketing” is the act of workers in peacefully marching to and fro before an establishment
involved in a labor dispute generally accompanied by the carrying and display of signs,
placards and banners intended to inform the public about the dispute.
2.
WHO MAY DECLARE A STRIKE OR LOCKOUT?
1. WHO MAY DECLARE A STRIKE?
a. Proper party.
Only a legitimate labor organization may declare a strike. For obvious reason, the employer
cannot.
1 National Union of Workers in the Hotel, Restaurant and Allied Industries [NUWHRAIN-
APL-IUF] Dusit Hotel Nikko Chapter v. The Honorable CA, G.R. Nos. 163942 and
166295, Nov. 11, 2008.
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2015 BAR EXAMS
b. Basic requirements.
As to the personality of the union, the following requirements should be shown before a strike
may be validly declared and staged:
a. The union should be legitimate. A strike conducted by a union which has not been shown
to be a legitimate labor organization is illegal.
b. In organized establishment where there is a certified bargaining agent, only the

recognized or certified collective bargaining union can validly stage a strike. A minority
union cannot stage a strike. A strike conducted by a minority union is patently illegal
because no labor dispute which will justify the conduct of a strike may exist
between the employer and a minority union. To permit the union’s picketing activities
would be to flaunt at the will of the majority.
c. In unorganized establishment where there is no certified bargaining agent, any

legitimate labor organization in the establishment may declare a strike but only on the
ground of unfair labor practice. The only other ground of bargaining deadlock cannot be
invoked in support of a strike in an unorganized establishment for the simple reason that no
CBA can be negotiated and concluded absent such recognized or certified collective bargaining
agent. In this situation, the existence of a bargaining deadlock is an impossibility.
2. WHO MAY DECLARE A LOCKOUT?
a. Proper party.
Only the employer can declare and stage a lockout. For obvious reason, no union can.
b. Grounds.
The employer may declare a lockout based on any of the two (2) grounds that may similarly
be invoked by the union in staging a strike, i.e., (1) bargaining deadlock; and/or (2) unfair
labor practice.
3. WHO MAY STAGE A PICKET?
Although not mentioned in the syllabus, it is important to discuss this point. Distinctively, in
case of picketing, the absence of employment relationship between the employer and
the picketers or some of them does not affect its validity. Picketing, if peacefully
carried out, cannot be prohibited even in the absence of employer-employee
relationship. Example: A picket conducted by the employees with the participation of militant
groups like Bayan, Gabriela, etc. will not make the picket illegal.
3.
3rd requisite - A notice must be served to the NCMB-DOLE at least twenty-four (24) hours
prior to the taking of the strike vote by secret balloting, informing said office of the decision to
conduct a strike vote, and the date, place, and time thereof;
4th requisite - A strike vote must be taken where a majority of the members of the union
obtained by secret ballot in a meeting called for the purpose, must approve it;
5th requisite - A strike vote report should be submitted to the NCMB-DOLE at least seven
(7) days before the intended date of the strike;
6th requisite - Except in cases of union-busting, the cooling-off period of 15 days, in case
of unfair labor practices of the employer, or 30 days, in case of collective bargaining deadlock,
should be fully observed; and
7th requisite - The 7-day waiting period/strike ban reckoned after the submission of the
strike vote report to the
NCMB-DOLE should also be fully observed in all cases.
All the foregoing requisites, although procedural in nature, are mandatory and failure of the
union to comply with any of them would render the strike illegal.
I. REQUISITES FOR A VALID STRIK E
FIRST REQUISITE:
1. REQUISITES FOR A VALID STRIKE.
EXISTENCE OF VALID AND FACTUAL Bar

GROUND/S
ChanRobles
a. Procedural but mandatory requisites.
1. In VALID
accordance with Article 263 and pertinent prevailing jurisprudence, a strike, in order to be valid and legal, must
GROUNDS.
conform to the following procedural requisites:
The law 1recognizes

st requisite - It must2begrounds
based on ainvalid and factual
only support of ground;
a valid strike, viz.:
2nd requisite - A notice of strike must be filed with the NCMB-DOLE;
1. Collective bargaining deadlock (Economic Strike); and/or
2. Unfair labor practice (Political Strike).
A strike not based on any of these two grounds is illegal.
2. SOME PRINCIPLES ON THE FIRST REQUISITE.
Violation of CBA, except when gross, is not an unfair labor practice, hence, may not be cited
as ground for a valid strike. Ordinary violation of a CBA is no longer treated as an unfair labor
practice but as a mere grievance which should be processed through the grievance machinery
and voluntary arbitration.
Inter-union or intra-union dispute is not a valid ground.
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2015 BAR EXAMS
Violation of labor standards is not a valid ground.
Wage distortion is not a valid ground.
II.
SECOND REQUISITE:
FILING OF A NOTICE OF STRIKE
1. NOTICE OF
STRIKE.
No labor organization shall declare a strike without first having filed a notice of strike.
III.
THIRD REQUISITE:
SERVICE OF A 24-HOUR PRIOR NOTICE
In the 2005 case of Capitol Medical Center, Inc. v. NLRC, it was imposed as additional
requisite that a 24-hour notice must be served to the NCMB-DOLE prior to the taking of the
strike vote by secret balloting, informing it of the union’s decision to conduct a strike vote as
well as the date, place, and time thereof.
IV.
FOURTH REQUISITE:
CONDUCT OF A STRIKE VOTE
1. MAJORITY APPROVAL OF THE STRIKE.
No labor organization shall declare a strike without the necessary strike vote first having been
obtained and reported to the NCMB-DOLE.
A decision to declare a strike must be approved by a majority of the total union membership
in the bargaining unit concerned, obtained by secret ballot in meetings or referenda called for
that purpose. This process is called “strike vote balloting.”
2. PURPOSE.
The purpose of a strike vote is to ensure that the decision to strike broadly rests with the
majority of the union members in general and not with a mere minority.
of opportunity to verify the truth and veracity of the majority vote by the union members in
support of the intended strike.
2. WHEN TO SUBMIT THE STRIKE VOTE REPORT.
The strike vote report should be submitted to the NCMB-DOLE at least seven (7) days
before the actual staging of the intended strike, subject to the observance of the cooling-off
periods provided under the law.
3. DURATION OF THE
VI. VALIDITY OF THE MAJORITY APPROVAL OF A STRIKE.
SIXTH REQUISITE:
The majority decision

THE to stage a strike is validPERIOD
for the duration of the dispute based on substantially the same grounds
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OBSERVANCE OF COOLING-OFF
considered when the strike vote was taken.
1. GENERAL RULE.
V.
FIFTH REQUISITE:
The cooling-off periods provided under the law before the intended date of the actual
SUBMISSION OF THE STRIKE VOTE TO NCMB-DOLE
mounting of the strike are as
1. PURPOSE FOR REQUIRING A STRIKE VOTE REPORT.
follow
s: The evident intention of the law in mandatorily requiring the submission of the strike vote report is to afford the NCMB
1. In case of bargaining deadlock, the cooling-off period is thirty (30) days from
the filing of the notice of strike; or
2. In case of unfair labor practice, the cooling-off period is fifteen (15) days from
the filing of the notice of strike.
2. EXCEPTION: IN CASE OF UNION-BUSTING.
In case of dismissal from employment of union officers (not ordinary members) duly
elected in accordance with the union constitution and by-laws which may constitute union-
busting because the existence of the union is threatened by reason of such dismissal, the 15-
day cooling-off period does not apply and the union may take action immediately after the
strike vote is conducted and the results thereof duly submitted to the regional branch of the
NCMB.
In cases of union-busting, only the 15-day cooling-off period need not be observed; all the
other requisites must be fully complied with.
3. RECKONING OF THE COOLING-OFF PERIODS.
The start of the cooling-off periods should be reckoned from the time the notice of strike is
filed with the NCMB-DOLE, a copy thereof having been served on the other party concerned.
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2015 BAR EXAMS
4. PURPOSE OF THE COOLING-OFF PERIODS.
The purpose of the cooling-off periods is to provide an opportunity for mediation and
conciliation of the dispute by the
NCMB-DOLE with the end in view of amicably settling it.
VII.
SEVENTH REQUISITE:
7-DAY WAITING PERIOD OR STRIKE BAN
1. PURPOSE OF THE 7-DAY WAITING PERIOD OR STRIKE BAN.
The seven (7) day waiting period is intended to give the NCMB-DOLE an opportunity to verify
whether the projected strike really carries the approval of the majority of the union members.
2. WAITING PERIOD/STRIKE BAN VS. COOLING-OFF PERIOD.

period.”2
In other words, the seven (7) days should be added to the cooling-off period of fifteen (15) days, in case of unfair labor
off
afterperiod prescribed by that
law.theThe latter cannot be substituted
Bar
The 7-day waiting period or strike ban is a distinct and separate requirement from the cooling-
practice, or thirty (30) days, in case of collective bargaining deadlock and it is only after the lapse of the total number of days
for the former and vice-versa.
adding the
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two (2) periods strike/lockout may be lawfully and validly staged.
While there was no categorical declaration on this point, the Supreme Court, in holding in the 2010 case of Phimco
Industries, Inc. v. Phimco Industries Labor Association (PILA), 3 that respondents fully satisfied the legal procedural
The cooling-off
requirements, noted period is counted
that the strike fromonthe
notice grounded timebargaining
collective of the filing
deadlockofwas
thefiled
notice
on Marchof 9,
strike. The 7-day
1995. Consequently,
waiting period/strike ban, on the other hand, is reckoned from the time the strike
the 30-day cooling-off period would have lapsed on April 9, 1995. The strike vote was reached on March 16, 1995 and vote report
the
isnotification
submitted towas
thereof thefiled
NCMB-DOLE.
with the DOLE on March 17, 1995 or well within the cooling-off period. Based on the said rule in the
Consequently, a strike is illegal for failure to comply with the prescribed mandatory cooling-off
period and the 7-day waiting period/strike ban after the submission of the report on the strike
vote.
3. BOTH MUST BE COMPLIED WITH SEPARATELY AND DISTINCTLY FROM EACH

OTHER.
The requirements of cooling-off period and 7-day waiting period/strike ban must both be
complied with. The labor union may take the strike vote and report the same to the NCMB-
DOLE within the statutory cooling-off period. In this case, the 7-day waiting period/strike ban
should be counted from the day following the expiration of the cooling-off period. A contrary
view would certainly defeat and render nugatory the salutary purposes behind the distinct
requirements of cooling-off period and the waiting period/strike ban.
The NCMB Primer on Strike, Picketing and Lockout,1 issued by the NCMB, the agency of
government directly tasked with the implementation and enforcement of this particular legal
provision and requirement, is very clear on this point, thus:
“In the event the result of the strike/lockout vote ballot is filed within the cooling-
off period, the 7-day requirement shall be counted from the day following the
expiration of the cooling-off
NCMB Primer, the strike could only be validly staged starting from April 17, 1995 and
onwards, i.e., after the lapse of 7 days from April 9, 1995. Hence, since the actual strike
was launched only on April 25, 1995, there was clearly full compliance with the requisites.
Example: In a case where the notice of strike grounded on ULP is filed on October 1, 2015,
and the strike vote is taken within the cooling-off period, say, on October 5, 2015 and the
strike vote report showing majority support for the intended strike is submitted to the NCMB-
DOLE the following day, October 6, 2015, the question is when can the union legally stage the
strike?
Following the above principle, the answer obviously is on October 24, 2015 or any day
thereafter. This is so because the 15-day cooling-off period for ULP expires on October 16 and
adding the 7-day strike ban which “should be counted from the day following the expiration of
the cooling-off period,” the 7th day would be on October 23, 2015. Obviously, the strike
cannot be conducted on the 7th day but rather after the lapse thereof; hence, it is only on
October 24, 2015 and onwards that the union may lawfully conduct the strike.
4. SOME PRINCIPLES ON COOLING-OFF PERIOD AND 7-DAY WAITING PERIOD.
Deficiency of even one (1) day of the cooling-off period and 7-day strike ban is fatal.
One-day strike without complying with the 7-day strike ban is illegal.
4.
REQUISITES FOR A VALID LOCKOUT
1. SUBSTANTIALLY SIMILAR REQUISITES AS IN STRIKE.
With a slight, insignificant variation, the procedural but mandatory requisites for a valid strike
discussed above are substantially similar to those applicable for valid lockout. For purposes of
ease and clarity, the same are presented as follows:
1st requisite - It must be based on a valid and factual ground;
2nd requisite - A notice of lockout must be filed with the NCMB-DOLE;
1 2nd Edition, December 1995.
2 No. 6 thereof.
3 G.R. No. 170830, Aug. 11, 2010.
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2015 BAR EXAMS
3rd requisite - A notice must be served to the NCMB-DOLE at least twenty-four (24) hours
prior to the taking of the lockout vote by secret balloting, informing said office of the decision
to conduct a lockout vote, and the date, place, and time thereof;
4th requisite - A lockout vote must be taken where a majority of the members of the Board
of Directors of the corporation or association or of the partners in a partnership obtained by
secret ballot in a meeting called for the purpose, must approve it;
5th requisite - A lockout vote report should be submitted to the NCMB-DOLE at least seven
(7) days before the intended date of the lockout;
6th requisite - The cooling-off period of 15 days, in case of unfair labor practices of the
labor organization, or 30 days, in case of collective bargaining deadlock, should be fully
observed; and
7th requisite - The 7-day waiting period/lockout ban reckoned after the submission of the
lockout vote report to the
NCMB-DOLE should also be fully observed in all cases.
5.
REQUISITES FOR LAWFUL PICKETING
4. THE
1. EFFECT OF THE US
REQUISITES FOR A VALID STRIKE ARE NOT E OF FOUL LANGUAGE DURING
APPLICABLE THE CONDUCT OF THE
TO PICKETING.
PICKET.
The seven (7) requisites for a valid strike discussed above do not apply to picketing.
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2. REQUISITES FOR
In the event the LAWFUL
picketers PICKETING.
employ discourteous and impolite language in their picket, such may not result in, or give rise
to, libel or action for damages.
The most singular requirement to make picketing valid and legal is that it should be
peacefully conducted. Based on the foregoing provision, the requisites may be summed up
as follows: VS. STRIKE.
5. PICKETING
1. The picket should be peacefully carried out;

(a) To strike is to withhold or to stop work by the concerted action of employees as a result of an industrial or labor
2. There should be no act of violence, coercion or intimidation attendant thereto;
dispute. The work stoppage may be accompanied by picketing by the striking employees outside of the company compound.
3. The ingress to (entrance) or egress from (exit) the company premises should not be
obstructed; and
(b) While a strike focuses on stoppage of work, picketing focuses on publicizing the labor dispute and its incidents to
4. Public thoroughfares should not be impeded.
3. RIGHT TO PICKET IS PROTECTED BY THE CONSTITUTION AND THE LAW.
Unlike a strike which is guaranteed under the Constitutional provision on the right of workers
to conduct peaceful concerted activities under Section 3, Article XIII thereof, the right to
picket is guaranteed under the freedom of speech and of expression and to
peaceably assemble to air grievances under Section 4, Article III (Bill of Rights) thereof.
inform the public of what is happening in the company being picketed.
(c) A picket simply means to march to and fro in front of the employer’s premises, usually
accompanied by the display of placards and other signs making known the facts involved in a
labor dispute. It is but one strike activity separate and different from the actual stoppage of
work.
Phimco Industries, Inc. v. Phimco Industries Labor Association (PILA).1 - While the
right of employees to publicize their dispute falls within the protection of freedom of
expression and the right to peaceably assemble to air grievances, these rights are by no
means absolute. Protected picketing does not extend to blocking ingress to and
egress from the company premises. That the picket was moving, was peaceful and
was not attended by actual violence may not free it from taints of illegality if the
picket effectively blocked entry to and exit from the company premises.
6. WHEN PICKET CONSIDERED A STRIKE.
In distinguishing between a picket and a strike, the totality of the circumstances obtaining in a
case should be taken into account.
Santa Rosa Coca-Cola Plant Employees Union v. Coca-Cola Bottlers Phils., Inc.2 -
Petitioners contend that what they conducted was a mere picketing and not a strike. In
disagreeing to this contention, the High Court emphasized that it is not an issue in this case
that there was a labor dispute between the parties as petitioners had notified the respondent
of their intention to stage a strike, and not merely to picket. Petitioners’ insistence to stage a
strike is evident in the fact that an amended notice of strike was filed even as respondent
moved to dismiss the first notice. The basic elements of a strike are present in this case: 106
members of petitioner Union, whose respective applications for leave of absence on
September 21, 1999 were disapproved, opted not to report for work on said date, and
gathered in front of the company premises to hold a mass protest action. Petitioners
deliberately absented themselves and instead wore red ribbons and carried placards with
slogans such as: “YES KAMI SA STRIKE,” “PROTESTA KAMI,” “SAHOD, KARAPATAN NG
MANGGAGAWA IPAGLABAN,” “CBA -’WAG BABOYIN,” “STOP UNION BUSTING.” They
marched to and fro in front of the company’s premises during working hours. Thus,
petitioners engaged in a concerted activity which already affected the company’s operations.
The mass concerted activity obviously constitutes a strike. Moreover, the bare fact that
petitioners were given a Mayor’s permit is not conclusive evidence that their action/activity did
not amount to a strike. The Mayor’s description of what activities petitioners were allowed to
conduct
1 G.R. No. 170830, Aug. 11, 2010.
2 G.R. Nos. 164302-03, Jan. 24, 2007.
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2015 BAR EXAMS
is inconsequential. To repeat, what is definitive of whether the action staged by petitioners is

a strike and not merely a picket is the totality of the circumstances surrounding the situation.
Petitioner union in the 2011 case of Leyte Geothermal Power Progressive Employees
Union-ALU-TUCP v. Philippine National Oil Company – Energy Development
Corporation,1 contends that there was no stoppage of work; hence, they did not strike.
Euphemistically, petitioner union avers that it “only engaged in picketing,” and maintains that
“without any work stoppage, [its officers and members] only engaged in xxx protest activity.”
The Supreme Court, however, ruled that it was a strike and not picketing or protest activity
that petitioner union staged. It found the following circumstances in support of such finding:
(1) Petitioner union filed a Notice of Strike on December 28, 1998 with the DOLE grounded on
respondent’s purported unfair labor practices, i.e., “refusal to bargain collectively, union
busting and mass termination.” On even date, petitioner Union declared and staged a strike.
(2) The DOLE Secretary intervened and issued a Return-to-Work Order dated January 4,
1999, certifying the labor dispute to the NLRC for compulsory arbitration. The Order indicated
the following facts: (1) filing of the notice of strike; (2) staging of the strike and taking control
over respondent’s facilities of its Leyte Geothermal Project on the same day petitioner union
filed the notice of strike; (3) attempts by the NCMB to forge a mutually acceptable solution
proved futile; (4) in the meantime, the strike continued with no settlement in sight placing in
jeopardy the supply of much needed power supply in the Luzon and Visayas grids.
1. WHEN DOLE SECR ETARY MAY ASSUME OR CERTIFY A LABOR DISPUTE.
(3) Petitioner union itself, in its pleadings, used the word “strike.”
Article 263(g) of the Labor Code provides that when in the opinion of the DOLE Secretary, the labor dispute
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causes or will likely to cause a strike or lockout in an industry indispensable to the national interest, he is empowered to
(4) Petitioner
do either union’s asseverations are belied by the factual findings of the NLRC, as affirmed
of 2 things:
by the CA thus: “The failure to comply with the mandatory requisites for the conduct of strike
is both admitted and clearly shown on record. Hence, it is undisputed that no strike vote was
conducted; 1. Helikewise,
may assumethe
jurisdiction over the labor
cooling-off dispute
period wasand not
decideobserved
it himself; or and that the 7-day strike ban
after the submission of the strike vote was not complied with since there was no strike vote
taken.”
2. He may certify it to the NLRC for compulsory arbitration, in which case, it will be the NLRC which shall hear and
decide it.
In fine, petitioner union’s bare contention that it did not hold a strike cannot trump the factual
findings This power
of the may be
NLRC exercised
that by the DOLE
petitioner Secretary
union indeed even beforeagainst
struck the actualrespondent.
staging of a strike or lockout
In fact, since
and more
importantly, petitioner union failed to comply with the requirements set by law prior to holding
a strike.
6.
ASSUMPTION OF JURISDICTION BY THE DOLE SECRETARY OR CERTIFICATION OF

THE LABOR DISPUTE TO THE NLRC FOR COMPULSORY ARBITRATION
Article 263(g) does not require the existence of a strike or lockout but only of a labor dispute
involving national interest.
2. WHAT CONSTITUTES A NATIONAL INTEREST CASE?
The Labor Code vests in the DOLE Secretary the discretion to determine what industries are
indispensable to the national interest. Accordingly, upon the determination by the DOLE
Secretary that such industry is indispensable to the national interest, he has authority to
assume jurisdiction over the labor dispute in the said industry or certify it to the NLRC for
compulsory arbitration.
Past issuances of the DOLE Secretary have not made nor attempted to mention specifically
what the industries indispensable to the national interest are. It was only in Department Order
No. 40-H-13, Series of 2013, that certain industries were specifically named, thus:
“Section 16. Industries Indispensable to the National Interest. – For the guidance of
the workers and employers in the filing of petition for assumption of jurisdiction, the following
industries/services are hereby recognized as deemed indispensable to the national interest:
a. Hospital sector;
b. Electric power industry;
c. Water supply services, to exclude small water supply services such as bottling
and refilling stations;
d. Air traffic control; and
e. Such other industries as may be recommended by the National Tripartite

Industrial Peace Council
(TIPC).”
Obviously, the above enumerated industries are not exclusive as other industries may be
considered indispensable to the national interest based on the appreciation and discretion of
the DOLE Secretary or as may be recommended by TIPC.
3. DIFFERENT RULE ON STRIKES AND LOCKOUTS IN HOSPITALS, CLINICS AND

MEDICAL INSTITUTIONS.
As a general rule, strikes and lockouts in hospitals, clinics and similar medical institutions
should be avoided.
In case a strike or lockout is staged, it shall be the duty of the striking union or locking-out
employer to provide and maintain an effective skeletal workforce of medical and other
health personnel whose movement and services shall be
1 G.R. No. 170351, March 30, 2011.
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2015 BAR EXAMS
unhampered and unrestricted as are necessary to insure the proper and adequate protection
of the life and health of its patients, most especially emergency cases, for the duration of the
strike or lockout.
The DOLE Secretary may immediately assume, within twenty four (24) hours from knowledge
of the occurrence of such a strike or lockout, jurisdiction over the same or certify it to the
NLRC for compulsory arbitration.
4. SOME PRINCIPLES ON ASSUMPTION/CERTIFICATION POWER OF THE DOLE

SECRETARY.
Prior notice and hearing are not required in the issuance of the assumption or certification
order.
The DOLE Secretary may seek the assistance of law enforcement agencies like the Philippine
National Police to ensure compliance with the provision thereof as well as with such orders as
he may issue to enforce the same.
5. RETURN-TO-WORK ORDER.
a. It is always part of assumption/certification order even if not expressly stated

therein.
The moment the DOLE Secretary assumes jurisdiction over a labor dispute involving national
interest or certifies it to the NLRC for compulsory arbitration, such assumption or certification
has the effect of automatically enjoining the intended or impending strike or, if one has
already been commenced, of automatically prohibiting its continuation. The mere issuance of
an assumption or certification order automatically carries with it a return-to-work order, even
if the directive to return to work is not expressly stated therein. It is thus not necessary for
the DOLE Secretary to issue another order directing the strikers to return to work.
It is error therefore for striking workers to continue with their strike alleging absence of a
return-to-work order since Article 263(g) is clear that once an assumption/certification order is
issued, strikes are enjoined or, if one has already taken place, all strikers should immediately
return to work.
b. Nature of return-to-work order.
Return-to-work order is compulsory and immediately executory in character. It

should be strictly complied with by the parties even during the pendency of any petition
questioning its validity in order to maintain the status quo while the determination is
being made. Filing of a motion for reconsideration does not affect the enforcement of
a return -to-work order which is immediately executory.
c. Some principles on return-to-work order.
The issue of legality of strike is immaterial in enforcing the return-to-work order.
Upon assumption or certification, the parties should revert to the status quo ante litem
which refers to the state of things as it was before the labor dispute or the state of affairs
existing at the time of the filing of the case. It is the last
payroll reinstatement. It observed that the NLRC was only trying its best to work out a
satisfactory ad hoc solution to a festering and serious problem.
7.
NATURE OF ASSUMPTION ORDER OR CERTIFICATION

ORDER
actual, p POWER
1. A POLICE eaceful and uncontested status that
preceded the actual controve
MEASURE. rsy.
To implement the return-to-work order, the norm is actual reinstatement. However, payroll reinstatement in lieu of
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Bar
actual reinstatement may properly be resorted to when special circumstances exist that render actual
The power to issue assumption or certification orders is an extraordinary authority granted
reinstatement impracticable or otherwise not conducive to attaining the purposes of the law.
to the President and to his alter ego, the DOLE Secretary, the exercise of which should be
strictly limited
Example:to national interest cases. It is in the nature of a police power measure.
This is done for the promotion of the common good considering that a prolonged strike or
lockout can University of Sto. Tomas
be inimical to thev. national
NLRC, whereeconomy.
the teachers ordered to return to work could not be given back their
academic assignments since the return-to-work order of the DOLE Secretary was issued in the middle of the first
semester of the academic year. The Supreme Court affirmed the validity of the payroll reinstatement order of the
NLRC and ruled that the NLRC did not commit grave abuse of discretion in providing for the alternative remedy of
8.
EFFECT OF DEFIANCE OF ASSUMPTION OR CERTIFICATION ORDERS
1. DEFIANCE OF THE ORDER, A VALID GROUND TO DISMISS.
The defiance by the union, its officers and members of the Labor Secretary's assumption of
jurisdiction or certification order constitutes a valid ground for dismissal.
The following are the justifications:
1. A strike that is undertaken after the issuance by the DOLE Secretary of an assumption or
certification order becomes a prohibited activity and thus illegal. The defiant striking union
officers and members, as a result, are deemed to have lost their employment status for
having knowingly participated in an illegal strike.
2. From the moment a worker defies a return-to-work order, he is deemed to have

abandoned his job.
3. By so defying, the workers have forfeited their right to be readmitted to work.
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2015 BAR EXAMS
2. ALL DEFIANT STRIKERS, REGARDLESS OF WHETHER THEY ARE OFFICERS OR

ORDINARY MEMBERS, ARE DEEMED DISMISSED.
Once the DOLE Secretary assumes jurisdiction over a labor dispute or certifies it to the NLRC
for compulsory arbitration, such jurisdiction should not be interfered with by the application of
the coercive processes of a strike or lockout. Any defiance thereof is a valid ground for the
loss of employment status.
3. PERIOD OF DEFIANCE OF THE RETURN-TO-WORK ORDER, NOT MATERIAL.
The length of time within which the return-to-work order was defied by the strikers is not
significant in determining their liability for the legal consequences thereof. The following cases
are illustrative of this rule:
a. University of San Agustin Employees’ Union-FFW v. The CA.1 - The period of defiance
was less than nine (9)
hours from 8:45 a.m. to 5:25 p.m. on September 19, 2003.
b. Federation of Free Workers v. Inciong. 2 - The period of defiance was only nine (9)
days.
4. SOME PRINCIPLES ON DEFIANCE OF THE ASSUMPTION/CERTIFICATION ORDER.
a) Inter -union or intra-union disputes.
The assumption/certification order may be served at any time of the day or night.
b) Simple violation of CBA in contrast to gross violation thereof which is deemed ULP.
No practice of giving 24 hours to strikers within which to return to work. There is no
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Bar
c) Violation ofrecognizing
law or jurisprudence labor standards.this practice.
d) strikers
The defiant Legislatedcould
wage orders (wage distortion).
be validly replaced.
4) Without first having bargained collectively.
The refusal to acknowledge receipt of the assumption/certification orders and other
processes
5) is an apparent
In violation attempt
of the “no strike, to frustrate
no lockout” clause in thethe
CBA.ends of justice, hence, invalid. The union
cannot be allowed to thwart the efficacy of the said orders issued in the national interest
through 6)
theWithout
simple submitting the issues
expediency oftorefusing
the grievance machinery or voluntary
to acknowledge arbitration
receipt or failing to exhaust the steps
thereof.
provided therein.
7) While conciliation and mediation proceeding is on-going at the NCMB.

9. ILLEGAL STRIKE
1. WHEN IS A STRIKE CONSIDERED ILLEGAL?
A strike is illegal if it is declared and staged:
1) Without complying with the procedural but mandatory requisites (See 7 requisites
above).
2) For unlawful purpose such as to compel the dismissal of an employee or to force

recognition of the union or for trivial and puerile purpose or to circumvent contracts and
judicial orders.
3) Based on non-strikeable or invalid grounds such as:
8) Based on issues already brought to voluntary or compulsory arbitration.
9) During the pendency of a case involving the same ground/s cited in the notice of strike.
10) In defiance of an assumption or certification or return-to-work order.
11) In violation of a temporary restraining order or an injunction order.
12) After the conversion of the notice of strike into a preventive mediation case.
13) Against the prohibition by law.
14) By a minority union.
15) By an illegitimate union.
16) By dismissed employees.
17) In violation of the company code of conduct which prohibits “inciting or participating in
riots, disorders, alleged strikes or concerted actions detrimental to [Toyota’s] interest,” The
penalty for which is dismissal.
18) As protest rallies in front of government offices such as in the following cases:
Toyota Motor Phils. Corp. Workers Association [TMPCWA] v. NLRC,3 where the
Supreme Court ruled that the protest rallies staged by the employees from February 21 to 23,
2001 in front of the offices of the Bureau of Labor Relations (BLR) and the DOLE Secretary
constitute illegal strike and not legitimate exercise of their right to peaceably assemble and
petition the government for redress of grievances. It was illegal for having been undertaken
without satisfying the mandatory pre-requisites for a valid strike under Article 263 of the
Labor Code.
The ruling in Toyota was cited in Solidbank Corporation v. Gamier, 4 as basis in declaring
the protest action of the employees of petitioner Solidbank which was staged in front of the
Office of the DOLE Secretary in Intramuros, Manila, as constitutive of illegal strike since it
paralyzed the operations of the bank. The protest action in this case was conducted because
of the CBA deadlock.
19) As welga ng bayan which is in the nature of a general strike as well as an extended
sympathy strike.
1 G.R. No. 169632, March 28, 2006.
2 G.R. No. L-49983, April 20, 1992.
3 G.R. Nos. 158786 &158789, Oct. 19, 2007.
4 G.R. No. 159460, Nov. 15, 2010.
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2015 BAR EXAMS
(a)
LIABILITY OF UNION OFFICERS
(b)
LIABILITY OF ORDINARY WORKERS
These two topics will be discussed jointly because of their close interrelation.
1. PARTICIPATION IN LAWFUL STRIKE.
An employee who participates in a lawful strike is not deemed to have abandoned his
employment. Such participation should not constitute sufficient ground for the termination of his
employment even if a replacement has already been hired by the employer during such lawful
strike.
2. PARTICIPATION IN ILLEGAL STRIKE.
a. Distinction in the liability between union officers and ordinary union members.
1. Union officers.
The mere finding or declaration of illegality of the strike will result in the termination of all
union officers who knowingly participated in the illegal strike. Unlike ordinary members, it is
not required, for purposes of termination, that the officers should commit an illegal act during the
strike.
However, absent any showing that the employees are union officers, they cannot be dismissed
based solely on the illegality of the strike.
To illustrate how the “knowing participation” of union officers may be ascertained and
established, the following factors were taken into account in another 2011 case, Abaria v.
NLRC,1 which led to the declaration that they knowingly participated in the illegal strike:
(1) Their persistence in holding picketing activities despite the declaration by the NCMB that their
union was not duly registered as a legitimate labor organization and notwithstanding the letter
from the federation’s legal counsel informing them that their acts constituted disloyalty to the
national federation; and
(2) Their filing of the notice of strike and conducting a strike vote despite the fact that their union
has no legal personality to negotiate with their employer for collective bargaining purposes.
2. Ordinary union members.
The mere finding or declaration of illegality of a strike will not result in termination of ordinary
union members. For an
ordinary union membe r to suffer termination, it must be shown by clear evidence
illegal acts during the
that he has committed
strike.
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b. Reason for the distinction.
The reason for this distinction is that the union officers have the duty to guide their members to respect the law. If
instead of doing so, the officers urged the members to violate the law and defy the duly constituted authorities, their dismissal
from the service is a just penalty or sanction for their unlawful act. Their responsibility as main players in an illegal strike is
greater than that ofwww.chanroblesbar.com
the ordinary union members and, therefore, limiting the penalty of dismissal only to the former for their
: www.chanroblesbar.com.ph
participation in an illegal strike is in order.
The fact that the employees are signatories to the CBA does not in itself sufficiently establish their
status as union officers during the illegal strike. Neither were their active roles during the
bargaining negotiations be considered as evidence of their being union officers.
Only the union officers during the period of illegal strike are liable. If the employees acted
as union officers
after the strike, they may not be held liable and, therefore, could not be terminated in their
capacity as such.
Shop stewards are union officers. Hence, they should be terminated upon the declaration of
the illegality of the strike.
Union officers may be dismissed despite the fact that the illegal strike was staged only
for 1 day or even for less than 10 hours. This holds true in cases of defiance of the
assumption/ certification order issued in
national interest cases.
If the dispositive portion of the decision failed to mention the names of union officers,
resort should be made to the text of the decision.
No wholesale dismissal of strikers allowed. The employer cannot just unceremoniously

dismiss a hundred of its employees in the absence of clear and convincing proof that these people
were indeed guilty of the acts
charged and then, afterwards, go to court to seek validation of the dismissal it whimsically
executed. That certainly cannot be allowed.
3. PARTICIPATION IN THE COMMISSION OF ILLEGAL ACTS DURING A STRIKE. a.

Legality or illegality of strike, immaterial.
As far as liability for commission of illegal acts during the strike is concerned, the issue of legality
or illegality of the strike is irrelevant. As long as the union officer or member commits an
illegal act in the course of the strike, be it legal or illegal, his employment can be validly
terminated.
b. Meaning of “illegal acts.”
The term “illegal acts” under Article 264(a) may encompass a number of acts that violate
existing labor or criminal laws, such as the following:
1 G.R. Nos. 154113, 187778, 187861 & 196156, Dec. 7, 2011, 661 SCRA 686.
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2015 BAR EXAMS
(1) Violation of Article 264(e) of the Labor Code which provides that “[n]o person engaged in
picketing shall commit any act of violence, coercion or intimidation or obstruct the free ingress to
or egress from the employer’s premises for lawful purposes, or obstruct public thoroughfares.”
(2) Commission of crimes and other unlawful acts in carrying out the strike.
(3) Violation of any order, prohibition, or injunction issued by the DOLE Secretary or NLRC in
connection with the assumption of jurisdiction or certification order under Article 263(g) of the
Labor Code.
This enumeration is not exclusive as jurisprudence abounds where the term “illegal acts” has been
interpreted and
construed to cover other breaches of existing laws.
Liability for illegal acts should be determined on an individual basis. For this purpose, the
individual identity of the union members who participated in the commission of illegal acts may
be proved thru affidavits and photographs. Simply referring to them as “strikers,” or
“complainants in this case” is not enough to justify their dismissal.
d. Some principles on commission of illegal acts in the course of the strike.
Only members who are identified as having participated in the commission of illegal acts
are liable. Those who did not participate should not be blamed therefor.
To effectively hold ordinary union members liable, those who participated in the commission of
illegal acts must not only be identified but the specific illegal acts they each
committed should be described with
particularity.
If violence was committed by both employer and employees, the same cannot be cited as a
ground to declare the strike illegal.
(c)
LIABILITY OF EMPLOYER
I.
LIABILITY OF EMPLOYER IN CASE OF STRIKE
1. LIABILITY FOR REINSTATEMENT OF STRIKERS. a. Reinstatement, when proper.
Reinstatement (without backwages) of ordinary rank-and-file union members who did not
participate in the
commission of illeg al acts during the conduct of the illegal strike may be ordered.
d. Employer who fails to reinstate strikers who were ordered reinstated by the Labor
Arbiter is liable to pay them backwages reckoned from Labor Arbiter’s issuance of the
reinstatement order up to its reversal by the NLRC.
2. SEPARATION PAY IN LIEU OF REINSTATEMENT IN STRIKE CASES. a. Separation pay

in lieu of reinstatement, when proper.
In strike cases, the award of separation pay in lieu of reinstatement is proper only when the
strikers did not participate in the commission of illegal acts in the course thereof.
3. BACKWAGES IN STRIKE CASES.
a. If the strike is illegal, no backwages should be paid.
Thus, in the case of Arellano University Employees and Workers Union v. CA,1 where the
strike was declared illegal, petitioner-union members who were found not to have participated in
the commission of illegal acts during the strike were ordered reinstated to their former positions
but without backwages. If reinstatement is no longer possible, they should receive separation
pay of one (1) month for every year of service in accordance with existing jurisprudence. With
respect to the union officers, their mere participation in the illegal strike warrants their dismissal.
(d)
WAIVER OF ILLEGALITY OF STRIKE
1. VOLUNTARY REINSTATEMENT CONSTITUTES A WAIVER OF THE ILLEGALITY OF THE

STRIKE.
In Citizens Labor Union v. Standard Vacuum Oil Co.,2 the act of the employer in inviting the
workers to return to their posts without making any reference to the pending case involving the
issue of the illegality of the strike or imposing any condition or alteration of the terms of their
employment was deemed a waiver of its right to consider the strikers as wrongdoers. More so in
this case when such invitation was accepted by the strikers. By said act, the parties may be said
to have both abandoned their original positions and come to a virtual compromise to resume
unconditionally their former relations.
1 G.R. No. 139940, Sept. 19, 2006.
2 G.R. No. L-7478, May 6, 1955.
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10. INJUNCTIONS
I.
INJUNCTION IN PICKETING, STRIKE OR LOCKOUT CASES
1. PROHIBITION ON INJUNCTION AGAINST THE CONDUCT OF STRIKES AND LOCKOUTS.
As a general rule, strikes and lockouts that are validly declared enjoy the protection of the law and
cannot be enjoined unless illegal acts are committed or threatened to be committed in the course
thereof. In the case of strikes, this policy applies even if the strike appears to be illegal in nature.
The rationale for this policy is the protection extended to the right to strike under the Constitution
and the law. It is basically treated as a weapon that the law guarantees to employees for the
advancement of their interest and for their protection.
2. EXCEPTIONS WHEN THE STRIKE ITSELF MAY BE ENJOINED.
However, in some cases, injunctions issued to enjoin the conduct of the strike itself and not only
the commission of illegal or prohibited acts in the course thereof, were held to be valid.
For instance, in San Miguel Corporation v. NLRC,1 the Supreme Court ruled that injunction
may be issued not only against the commission of illegal acts in the course of the strike but
against the strike itself because the notice of strike filed by the union has been converted into a
preventive mediation case. Having been so converted, a strike can no longer be staged based
on said notice. Upon such conversion, the legal effect is that there is no more notice of strike to
speak of.
In the earlier case of San Miguel Corporation v. NLRC,2 the Supreme Court ruled that the
NLRC committed grave abuse of discretion when it denied the petition for injunction to restrain the
union from declaring a strike based on non-strikeable grounds.
3. REGULAR COURTS ARE PROHIBITED FROM ISSUING INJUNCTION AGAINST STRIKES

OR LOCKOUT.
The cases cited above involve the issuance of restraining order or injunction by the NLRC pursuant
to the exercise of its injunctive power. In contrast, regular courts are absolutely prohibited to
grant any injunctive relief in cases of strikes or lockouts.
II.
INJUNCTION IN PICKETING CASES
1. PROHIBITION ON INJUNCTION AGAINST PEACEFUL PICKETING.

1 G.R. No. 119293, June 10, 2003.
2
G.R. No. 99266, March 2, 1999, 304 SCRA 1. 99
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As a general rule, injunction cannot be issued against the conduct of picketing by the workers. Under our constitutional
set up, picketing is considered part of the freedom of speech :duly

www.chanroblesbar.com guaranteed by the Constitution. However, excepted from this
legal proscription are the situations mentioned below.
(2) Where picketing involves the use of violence and other illegal acts;
(3) Where picketing affects the rights of third parties and injunction becomes necessary to
protect such rights.
(b)
“I NNO CENT BYS T AND ER RULE”
1. WHEN INJUNCTION ON PICKETING IS ALLOWED THROUGH THE REGULAR COURTS

AND NOT THROUGH THE NLRC.
In situations where the picket affects not only the employer but also the business operations of
other establishments owned by third parties, an injunction may be secured by the latter from the
regular courts to enjoin the picket under the “Innocent Bystander Rule.” Under this rule, the
third-party employers or “innocent bystanders” who have no employer- employee relationship with
the picketing strikers, may apply for injunction with the regular courts (not with the NLRC) to
enjoin the conduct of the picket.
Because of the absence of such employer-employee relationship, the NLRC cannot entertain such
application for
injunction from “innocent bystanders.” Only the employer of the picketers can apply for injunctive
relief from the NLRC.
------------oOo------------
1 G.R. No. 119293, June 10, 2003.

2
G.R. No. 99266, March 2, 1999, 304 SCRA 1. 99
PROCEDURE AND JURISDICTION Prof. Joselito Guianan Chan
PRELIMINARY CONSIDERATIONS ON PROCEDURE AND JURISDICTION
1. EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP.
The existence of employer-employee relationship between the parties-litigants, or a

reasonable causal connection to such relationship is a jurisdictional pre-requisite for the
exercise of jurisdiction over a labor dispute by the Labor Arbiters or any other labor tribunals.
2. THE CAUSE OF ACTION MUST ARISE FROM THE EMPLOYER-EMPLOYEE

RELATIONSHIP.
Even if there is employer-employee relationship, if the cause of action did not arise out of or
was not incurred in connection with the employer-employee relationship, Labor Arbiters and
other labor tribunals have no jurisdiction thereover.
Actions between employers and employees where the employer-employee relationship is

merely incidental are within the exclusive original jurisdiction of the regular courts.
3. REASONABLE CAUSAL CONNECTION RULE – THE RULE IN CASE OF CONFLICT OF

JURISDICTION BETWEEN LABOR COURT AND REGULAR COURT.
Under this rule, if there is a reasonable causal connection between the claim asserted and
the employer-employee relations, then the case is within the jurisdiction of labor courts.
In the absence of such nexus, it is the regular courts that have jurisdiction.
4. THE POWER TO DETERMINE EXISTENCE OF EMPLOYMENT RELATIONSHIP.
Under labor laws, it is not only the Labor Arbiters and the NLRC who/which are vested with
the pow er to determine the existence of employer-employee relationship.
The following have also the power to make similar determination:
(1) The DOLE Secretary and the DOLE Regional Directors, to the exclusion of the
Labor Arbiter and the NLRC;
(2) The Med-Arbiter;
actual, moral, exemplary and other forms of damage. (See also the 2012 case of Bright
Maritime Corporation v. Fantonial ).
6. LABOR ARBITERS HAVE JURISDICTION EVEN IF THE CASE IS FILED BY THE

HEIRS OF THE OFW.
This was the ruling in Medline Management, Inc. v. Roslinda.3 As heirs, the wife and
son of Juliano Roslinda, the deceased OFW, have the personality to file the claim for death
compensation, reimbursement of medical expenses, damages and attorney's fees before
the Labor Arbiter of the NLRC.
7. LABOR DISPUTES, NOT SUBJECT TO BARANGAY CONCILIATION.
Labor cases are not subject to the conciliation proceedings prescribed under P.D. No. 1508
requiring the submission of disputes before the Barangay Lupong Tagapayapa prior to
their filing with the court or other government offices. Instead of simplifying labor
proceedings designed at expeditious settlement or referral to the proper courts or offices to
decide them f inally, the conciliation of the issues before the Barangay Lupong Tagapayapa
would only duplicate the conciliation proceedings and unduly delay the disposition of labor
cases.
A.
LABOR ARBITER
1. THE LABOR
ARBITER.
The Labor Arbiter is an official in the Arbitration Branch of the National Labor Relations
Commission (NLRC) who hears and decides cases falling under his original and exclusive
jurisdiction as provided by law.
2. LABOR ARBITERS HAVE NO INJUNCTIVE POWER; ONLY THE COMMISSION (NLRC) Bar
HAS THIS POWER. ChanRobles
Previously, Labor Arbiters are possessed of injunctive power. This grant of injunctive power,
however, was deleted in recent NLRC Rules. The Labor Arbiter thus has no more injunctive
power. Only the Commission (NLRC) has that power.
(3) The Social Security Commission (SSC).
5. IN CASES FILED BY OFWs, LABOR ARBITERS MAY EXERCISE JURISDICTION EVEN ABSENT THE EMPLOYMENT
RELATIONSHIP.
1
In Santiago v. CF Sharp Crew Management, Inc., it was held that a seafarer who has already signed a POEA-
approved employment contract but was not deployed overseas and, therefore, there is no employer-employee relationship, may
file his monetary claims case with the Labor Arbiter. This is because the jurisdiction of Labor Arbiters is not limited to c laims
arising from employer-employee relationships. Under Section 10 of R. A. No. 8042 (Migrant Workers and Overseas Filipinos Act
of 1995), as amended, the Labor Arbiter may exercise jurisdiction over the claims of OFWs arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for overseas deployment, including claims for
2
1 G.R. No. 3 G.R. No. 168715, Sept. 15, 2010.
162419, July 10,
2007.
2 G.R. No.
165935, Feb. 8,
2012.
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2015 BAR EXAMS
1. JURISDICTION
1. NATURE OF JURISDICTION OF LABOR ARBITERS - ORIGINAL AND EXCLUSIVE.
The jurisdiction conferred by Article 217 upon the Labor Arbiters is both original and exclusive,
meaning, no other officers or tribunals can take cognizance of, or hear and decide, any of the
cases therein enumerated.
2. EXCEPTIONS TO THE ORIGINAL AND EXCLUSIVE JURISDICTION OF LABOR

ARBITERS.
The following cases are the exceptions when the Labor Arbiters may not exercise their
original and exclusive jurisdiction:
1. In assumed cases. When the DOLE Secretary or the President exercises his power under
Article 263(g) of the
Labor Code to assume jurisdiction over national interest cases and decide them himself.
(b) Term ination disputes (Illegal dismissal cases);

2. In certified cases. When the NLRC exercises its power of compulsory arbitration over
similar national interest cases that are certified to it by the DOLE Secretary pursuant to the
exercise by the latter of his certification power under the same Article 263(g).
(c) Money claims exceeding P5,000.00.
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(d) Claims for actual, moral, exemplary and other forms of damages arising from employer-employee relations; and
3. In cases arising
(e) Cases from
involving CBA.of- strikes
the legality Whenand cases arise from the interpretation or implementation
lockouts.
of collective bargaining agreements and from the interpretation or enforcement of company
personnel NOTE: Claimswhich
policies for employees
shall compensation,
be disposedSSS, Philhealth
of by (Medicare)
the Labor and maternity
Arbiter benefits do
by referring notsame
the fall under
to the
the
jurisdiction of the Labor Arbiter because these fall under the jurisdiction of other government agencies.
grievance machinery and voluntary arbitration, as may be provided in said agreements.
2. Under Article 124 of the Labor Code, as amended by R.A. No. 6727:
Disputes involving legislated wage increases and wage distortion in unorganized establishments not voluntarily
4. In cases submitted for voluntary arbitration. - When the parties agree to submit the
case to voluntary arbitration before a Voluntary Arbitrator or panel of Voluntary Arbitrators
who, under Articles 261 and 262 of the Labor Code, are also possessed of original and
exclusive jurisdiction to hear and decide cases mutually submitted to them by the parties for
arbitration and adjudication.
3. RUNDOWN OF ALL CASES FALLING UNDER THE JURISDICTION OF THE LABOR

ARBITERS.
More particularly, Labor Arbiters shall have original and exclusive jurisdiction to hear and
decide the following cases involving all workers, whether agricultural or non-agricultural:
1. Under Article 217 of the Labor Code:
(a) Unfair labor practice cases;
settled by the parties pursuant to R.A. No. 6727.
3. Under Article 128(b) of the Labor Code, as amended by R.A. No. 7730:
Contested cases under the exception clause in Article 128(b) of the Labor Code.
4. Under Article 227 of the Labor Code:
Enforcement of compromise agreements when there is non-compliance by any of the

parties thereto, pursuant to Article 227 of the Labor Code.
5. Under Article 262-A of the Labor Code:
Issuance of writ of execution to enforce decisions of Voluntary Arbitrators or panel of

Voluntary Arbitrators, in case of their absence or incapacity, for any reason.
6. Under Section 10 of R.A. No. 8042, as amended by R.A. No. 10022:
Money claims of OFWs arising out of employer-employee relationship or by virtue of any law
or contract, including claims death and disability benefits and for actual, moral, exemplary
and other forms of damages.
7. Other cases as may be provided by law.
I.
JURISDICTION OVER UNFAIR LABOR PRACTICE CASES
1. SOME PRINCIPLES ON JURISDICTION OVER ULPs.
The Labor Arbiter has jurisdiction over all ULPs whether committed by the employers or the
labor organizations.
The Labor Arbiter has jurisdiction only over the civil aspect of ULP, the criminal aspect being
lodged with the regular courts.
II.
JURISDICTION OVER ILLEGAL DISMISSAL CASES
1. SOME PRINCIPLES ON JURISDICTION OVER TERMINATION CASES.
The validity of the exercise of jurisdiction by Labor Arbiters over illegal dismissal cases is not
dependent on the kind or nature of the ground cited in support of the dismissal;
hence, whether the dismissal is for just cause or authorized cause, it is of no
consequence.
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2015 BAR EXAMS
In case of conflict of jurisdiction between Labor Arbiter and the Voluntary Arbitrator
over termination cases,
the former’s jurisdiction shall prevail for the following reasons:
(1) Termination of employment is not a grievable issue that must be submitted to the
grievance machinery or voluntary arbitration for adjudication. The jurisdiction thereover
remains within the original and exclusive ambit of the Labor Arbiter and not of the Voluntary
Arbitrator.
(2) Even if the CBA provides that termination disputes are grievable, the same is merely
discretionary on the part of the parties thereto.
(3) Once there is actual termination, jurisdiction is conferred upon Labor Arbiters by
operation of law.
(4) Interpretation of CBA and enforcement of company personnel policies are merely
corollary to an illegal dismissal case.
(5) Article 217 is deemed written into the CBA being an intrinsic part thereof.
In other words, the Voluntary Arbitrator will only have jurisdiction over illegal dismissal cases
when there is express agreement of the parties to the CBA, i.e., the employer and the
bargaining agent, to submit the termination case to voluntary arbitration. Absent the mutual
express agreement of the parties, Voluntary Arbitrator cannot acquire jurisdiction over
termination cases.
The express agreement must be stated in the CBA or there must be enough evidence on
record unmistakably showing that the parties have agreed to resort to voluntary arbitration.
3. SOME PRINCIPLE S ON JURISDICTION OVER MONEY CLAIMS.

III.
JURISDICTION OVER MONEY CLAIMS CASES
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Award of statutory benefits even if not prayed for is valid.
Claim for notarial fees by a lawyer employed by a company is within the jurisdiction of the Labor Arbiter.
1. CLASSIFICATION OF MONEY CLAIMS.
(a)
Money claims falling within the original and exclusive jurisdiction of the Labor Arbiters may be
VERSUS REGIONAL DIRECTOR
classified as follows:
1. LABOR ARBITERS HAVE NO JURISDICTION OVER SMALL MONEY CLAIMS LODGED UNDER ARTICLE 129.
1. Any money claim, regardless of amount, when asserted in an illegal dismissal case
(hence, accompanied with a claim for reinstatement). Here, the money claim is but an
accompanying remedy subordinated to the principal cause of action, i.e., illegal dismissal; or
2. Any money claim exceeding the amount of P5,000.00 per claimant.
If the amount does not exceed P5,000.00, it is, under Article 129, the DOLE Regional Director
has jurisdiction to take cognizance thereof.
As earlier emphasized, under Article 129 of the Labor Code, DOLE Regional Directors have
jurisdiction over claims amounting to P5,000 or below, provided the following requisites
concur:
1. The claim must arise from employer-employee relationship;
2. The claimant does not seek reinstatement; and
3. The aggregate money claim of each employee does not exceed P5,000.00.
2. IN INSPECTION OF ESTABLISHMENT CASES UNDER ARTICLE 128, DOLE REGIONAL

DIRECTORS HAVE JURISDICTION REGARDLESS OF WHETHER OR NOT THE TOTAL
AMOUNT OF CLAIMS PER EMPLOYEE EXCEEDS P5,000.00.
a. Requisites.
For the valid exercise by the DOLE Secretary or any of his duly authorized representatives
(DOLE Regional Directors)
of the visitorial and enforcement powers provided under Article 128(b), the following
requisites should concur: (1) The employer-employee relationship should still exist;
(2) The findings in question were made in the course of inspection by labor inspectors; and
(3) The employees have not yet initiated any claim or complaint with the DOLE Regional
Director under Article 129, or the Labor Arbiter under Article 217.
3. HOWEVER, JURISDICTION OVER CONTESTED CASES UNDER THE EXCEPTION

CLAUSE IN ARTICLE 128(b) OF THE LABOR CODE INVOLVING INSPECTION OF
ESTABLISHMENTS BELONGS TO THE LABOR ARBITERS AND NOT TO DOLE REGIONAL
DIRECTORS.
a. Relation of paragraph (b) of Article 128 to the jurisdiction of Labor Arbiters.
The Labor Arbiters have jurisdiction over contested cases under the exception clause in
Article 128(b). which states: “xxx. The Secretary or his duly authorized representatives shall
issue writs of execution to the appropriate authority for the enforcement of their orders,
except in cases where the employer contests the findings of the labor employment and
enforcement officer and raises issues supported by documentary proofs which were not
considered in the course of inspection.”
In interpreting the afore-quoted provision of the exception clause, three (3) elements must
concur to divest the
Regional Directors or their representatives of jurisdiction thereunder, to wit:
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2015 BAR EXAMS
(a) That the employer contests the findings of the labor regulations officer and
raises issues thereon; (b) That in order to resolve such issues, there is a need to
examine evidentiary matters; and
(c) That such matters are not verifiable in the normal course of inspection.
The 2009 case of Meteoro v. Creative Creatures, Inc.,1 best illustrates the application of
the exception clause. Here, it was held that the Court of Appeals aptly applied the “exception
clause” because at the earliest opportunity, respondent company registered its objection to
the findings of the labor inspector on the ground that there was no employer-employee
relationship between petitioners and respondent company. The labor inspector, in fact, noted
in his report that “respondent alleged that petitioners were contractual workers and/or
independent and talent workers without control or supervision and also supplied with tools and
apparatus pertaining to their job.” In its position paper, respondent again insisted that
petitioners were not its employees. It then questioned the Regional Director’s jurisdiction to
entertain the matter before it, primarily because of the absence of an employer-employee
relationship. Finally, it raised the same arguments before the Secretary of Labor and the
appellate court. It is, therefore, clear that respondent contested and continues to contest the
findings and conclusions of the labor inspector. To resolve the issue raised by respondent, that
is, the existence of an employer-employee relationship, there is a need to examine evidentiary
matters.
IV.
JURISDICTION OVER CLAIMS FOR DAMAGES
1. LABOR ARBITERS HAVE JURISDICTION OVER CLAIMS FOR DAMAGES.
1. Filing of a notice of strike or lockout with NCMB. - A union which

It is now a well-settled rule that claims for damages as well as attorney’s fees in labor cases
intecognizable
are nds toby
stage
thea strike or an employer which desires to mount a lockout should file a notice of strike or notice of lockout,
as the case may be, with the NCMB and not with any
ChanRobles
Labor Arbiters, to the exclusion of all other courts. Rulings to the contrary are 2deemed
Bar
other office. It must be noted, however, that the NCMB, per Tabigue v. International Copra Export Corporation, is not a
abandoned
quasi-judicial or modified
body; accordingly.
hence, the Conciliators-Mediators of the NCMB do not have any decision-making power. They
cannot issue decisions to resolve the issues raised in the notice of strike or lockout. Their role is confined solely to the
conciliation and mediation of the said issues, although they can suggest to the parties that they submit their dispute to voluntary
arbitration
2. CLAIMS through
FORthe DAMAGES
Voluntary Arbitrators
OF accredited
OVERSEAS by the FILIPINO
NCMB. WORKERS (OFWs).
2. Filing of a complaint to declare the illegality of the strike or lockout with the Labor Arbiter or Voluntary
Claims for actual, moral, exemplary and other forms of damages that may be lodged by
overseas Filipino workers are cognizable by the Labor Arbiters.
V.
JURISDICTION OVER LEGALITY OF STRIKES AND LOCKOUTS
JURISDICTIONAL INTERPLAY IN STRIKE OR LOCKOUT CASES
1. A STRIKE OR LOCKOUT IS CROSS-JURISDICTIONAL IN NATURE.
Based on the pertinent provisions of the Labor Code, below is an outline of the interplay in
jurisdiction among them.
Arbitrator or panel of Voluntary Arbitrator. - In case a party wants to have the strike or
lockout declared illegal, a complaint should be filed either with the Labor Arbiter under Article
217(a)(5) of the Labor Code or, upon mutual agreement of the part ies, with the Voluntary
Arbitrator or panel of Voluntary Arbitrators under Article 262 of the same Code. The issue of
illegality of the strike or lockout cannot be resolved by the Conciliators-Mediators of the NCMB
as earlier pointed out and discussed.
3. Filing of an injunction petition with the Commission (NLRC). - In case illegal acts
violative of Article 264 are committed in the course of the strike or lockout, a party may file a
petition for injunction directly with the Commission (NL RC) under Article 218(e) of the Labor
Code for purposes of securing a temporary restraining order (TRO) and injunction. The Labor
Arbiters or Voluntary Arbitrators are not possessed of any injunctive power under the Labor
Code. In other words, the aggriev ed party, despite the pendency of the case for the
declaration of the illegality of the strike or lockout with the Labor Arbiter or Voluntary
Arbitrator, as the case may be, may directly go to the Commission to secure the injunctive
relief.
4. Assumption of jurisdiction by the DOLE Secretary. – Under Article 263(g) of the Labor
Code, the DOLE Secretary has the power to assume jurisdiction over labor disputes which, in
his opinion, may cause or likely to cause a strike or lockout in industries indispensable to the
national interest (so-called “national interest” cases). Once he makes the assumption, he shall
decide all the issues related to the labor dispute himself, to the exclusion of all other labor
authorities.
5. Certification of the labor dispute to the NLRC. - Under the same provision of Article
263(g) of the Labor Code, the DOLE Secretary has the option of not assuming jurisdiction over
the labor dispute in national interest cases. Instead, he may certify it to the NLRC for
compulsory arbitration, in which case, it will be the NLRC which shall hear and decide all the
issues subject of the certification order.
In case at the time of the said assumption or certification, there is a pending case before the
Labor Arbiter or Voluntary Arbitrator on the issue of illegality of the strike or lockout, the same
shall be deemed subsumed in the assumed or certified case. Resultantly, it is no longer the
Labor Arbiter or the Voluntary Arbitrator who should decide the said case but the DOLE
Secretary, in the case of assumed cases, or the NLRC, in the case of certified cases.
6. Assumption of jurisdiction over a national interest case by the President. - The

President of the Philippines is not precluded from intervening in a national interest case by
exercising himself the powers of his alter ego, the DOLE Secretary, granted under Article
263(g) by assuming jurisdiction over the same for purposes of settling or terminating it.
1 G.R. No. 171275, July 13, 2009.
2 G.R. No. 183335, Dec. 23, 2009; See also Hotel Employees Union-NFL v. Waterfront
Insular Hotel Davao, G.R. Nos. 174040-41, Sept. 22, 2010.
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7. Submission of a national interest case to voluntary arbitration. - Despite the

pendency of the assumed or certified national interest case, the parties are allowed to submit
any issues raised therein to voluntary arbitration at any stage of the proceeding, by virtue of
Article 263(h) which provides that “(b)efore or at any stage of the compulsory arbitration
process, the parties may opt to submit their dispute to voluntary arbitration.”
The foregoing interplay explains why Article 263(i) makes specific reference to the President
of the Philippines, the Secretary of Labor and Employment, the Commission (NLRC) or the
Voluntary Arbitrator in connection with the law on strike, lockout and picketing embodied in
Article 263. The only labor official not so mentioned therein but who has a significant role to
play in the interaction of labor officials and tribunals in strike or lockout cases, is the Labor
Arbiter. This is understandable in the light of the separate express grant of jurisdiction to the
Labor Arbiters under Article 217(a)(5) as above discussed.
VI.
JURISDICTION OVER CASES INVOLVING LEGISLATED WAGE INCREASES AND WAGE

DISTORTION
1. CASES IN ORGANIZED
ESTABLISHMENTS.
Jurisdiction is with the Voluntary

Arbitrator.
2. CASES IN UNORGANIZED
ESTABLISHMENTS.
Jurisdiction is with Labor Arbiter.
VII.
JURISDICTION OVER ENFORCEMENT OR ANNULMENT OF

COMPROMISE AGREEMENTS
1. LEGAL
BASIS.
Article 227 clearly embodies the following provisions on compromise agreements:
“Article 227. Compromise Agreements. - Any compromise settlement, including those

involving labor standard laws, voluntarily agreed upon by the parties with the assistance of
the Bureau or the regional office of the Department of Labor, shall be final and binding upon
the parties. The National Labor Relations Commission or any court shall not assume
jurisdiction over issues involved therein except in case of non-compliance thereof or
if there is prima facie evidence that the settlement was obtained through fraud,
misrepresentation, or coercion.”
Clear from the foregoing provision that, although the compromise agreement may have been
entered into by the parties before the Bureau of Labor Relations (BLR) or the DOLE Regional
Office, it is the Labor Arbiter who has jurisdiction to take
should follow in adjudicating cases filed before them. Once a decision has been rendered in a
case and subsequently becomes final and executory, it may be enforced through the writ of
execution issued by the same Voluntary Arbitrator or panel of Voluntary Arbitrators who
rendered it, addressed to and requiring certain public officers to execute the final decision,
order or award.
2. LABOR ARBITERS MAY ISSUE THE WRIT OF EXECUTION.
In situations, however, where the Voluntary Arbitrator or the panel of Voluntary Arbitrators
who rendered the decision is absent or incapacitated for any reason, Article 262-A grants
jurisdiction to any Labor Arbiter in the region where the winning party resides, to take
cognizance of a motion for the issuance of the writ of execution filed by such party and
accordingly issue such writ addressed to and requiring the public officers mentioned above to
execute the final decision, order or award of the Voluntary Arbitrator or panel of Voluntary
Arbitrators.
IX.
JURISDICTION OVER CASES OF OVERSEAS FILIPINO WORKERS (OFWs)
1. LABOR ARBITERS HAVE JURISDICTION OVER ALL MONEY CLAIMS OF OFWs.
All claims of OFWs with a sign of peso are cognizable by the Labor Arbiters, including claims
for disability and death
benefits.
2. EXCEPTION: VOLUNTARY ARBITRATORS HAVE JURISDICTION OVER MONEY

CLAIMS IF THERE EXISTS A CBA.
If there is a CBA between the foreign employer and the bargaining union of the OFWs, the
jurisdiction over monetary claims of OFWs belongs to the Voluntary Arbitrator and not to the
Labor Arbiter.
3. OFW-RELATED CASES OVER WHICH THE POEA, AND NOT THE LABOR ARBITERS,
HAS JURISDICTION.
The Philippine Overseas Employment Administration (POEA) has original and exclusive
jurisdiction to hear and
decid
e:
(a) cter, involving or arising out of violation of rules and regulations relating to licensing
All and registration of recruitment and employment agencies or entities, including refund
cases of fees collected from workers and violation of the conditions for the issuance of
which license to recruit workers.
are
admin (b) Disciplinary action cases and other special cases which are administrative in
istrati character, involving employers, principals, contracting partners and Filipino migrant
ve in workers.
chara
104
cognizance of the follo wing issues related thereto, to the exclusion of the BLR and
the Directors:
DOLE Regional
Bar ChanRobles
(1) To enforce the compromise agreement in case of non-compliance therewith by any of the parties thereto; or
(2) To nullify it if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or
coercion.
VIII.
JURISDICTION OVER EXECUTION AND ENFORCEMENT

OF DECISIONS OF VOLUNTARY ARBITRATORS
1. DECISIONS OF VOLUNTARY ARBITRATORS.
Article 262-A of the Labor Code prescribes the procedures that Voluntary Arbitrators or panel of Voluntary Arbitrators
2015 BAR EXAMS
No. 1 above covers recruitment violations or violations of conditions of license; while No. 2
above involves (a) disciplinary action cases against foreign principals or employers, and (a)
disciplinary action cases against land-based OFWs and seafarers.
X.
OTHER ISSUES OVER WHICH LABOR ARBITERS HAVE JURISDICTION
1. JURISDICTION OVER CERTAIN ISSUES AS PROVIDED IN JURISPRUDENCE.
In accordance with well-entrenched jurisprudence, the issues, claims or cases of the following
fall under the jurisdiction of the Labor Arbiters:
(a) Employees in government-owned and/or controlled corporations without original

charters; (b) Domestic workers or kasambahay;
(c) Employees of cooperatives;
(d) Counter-claims of employers against employees.
JURISDICTION OVER CASES OF DOMESTIC WORKERS OR KASAMBAHAY
1. WHEN LABOR ARBITERS HAVE JURISDICTION.
The Labor Arbiter has jurisdiction if the amount of the claim exceeds P5,000.00; otherwise,
the jurisdiction is vested with the DOLE Regional Director under Article 129 of the Labor Code.
Incidentally, it is no longer legally correct to use the term “domestic servant” or “househelper”
in reference to a person who performs domestic work. Under R.A. No. 10361, “domestic
servant” or “househelper” should now be referred to as “domestic worker” or “kasambahay.”
JURISDICTION OVER CASES OF EMPLOYEES OF COOPERATIVES
1. WHEN LABOR ARBITERS HAVE JURISDICTION.
The Labor Arbiter has jurisdiction only over monetary claims and illegal dismissal cases
involving employees of cooperatives but not the claims or termination of membership of
members thereof. Cooperatives organized under R.A. No. 6938, are composed of members;
hence, issues on the termination of their membership with the cooperative do not fall within
the jurisdiction of the Labor Arbiters.
Perpetual Help Credit Cooperative, Inc. v. Faburada. - Petitioner in this case contends
that the Labor Arbiter has no
loading and unloading the bottles to and from the delivery trucks, and to perform other tasks
as may be ordered by SMC’s officers. Semillano, together with the other respondents, filed the
complaint for regularization with petitioner SMC, contending that AMPCO was a mere labor-
only contractor. The High Court declared in this case that AMPCO was a labor-only contractor
and consequently pronounced that all the respondents, including Semillano, were regular
employees of petitioner. On this issue of jurisdiction, the High Court held that the Labor
Arbiter has jurisdiction because precisely, Semillano has joined the others in filing this
complaint because it is his position that petitioner SMC is his true employer and liable for all
his claims under the Labor Code.
JURISDICTION OVER COUNTER-CLAIMS OF EMPLOYERS
1. EMPLOYERS MAY ASSERT COUNTER-CLAIMS AGAINST EMPLOYEES FILED BY THE

LATTER BEFORE THE LABOR ARBITERS.
Almost all labor cases decided by labor courts involve claims asserted by the workers. The
question that may be propounded is whether the employers can assert counter-claims against
their employees before the Labor Arbiters. The Supreme Court answered this poser in the
affirmative.
Bañez v. Hon. Valdevilla.2 - The jurisdiction of Labor Arbiters and the NLRC is
comprehensive enough to include claims for all forms of damages “arising from the employer-
employee relations.” By this clause, Article 217 should apply with equal force to the claim of
an employer for actual damages against its dismissed employee, where the basis for the claim
arises from or is necessarily connected with the fact of termination, and should be entered as
a counter-claim in the illegal dismissal case. This is in accord with paragraph 6 of Article
217(a), which covers “all other claims, arising from employer-employee relations.”
But such tocounter-claim,

jurisdiction take cog being a factual issue, must beof the
nizance asserted
complaintbefore
of privatethe Laborwho
respondents Arbiter;
are not
otherwise,
m it can no longer be passed upon
embers but employees of the cooperative. by a reviewing court.
XI.
The Supreme Court ruled that there is no evidence that private respondents are members of petitioner cooperative and even if
Bar ChanRobles
they are, the
ISSUES dispute
AND is about OVER
CASES payment WHICH
of wages, overtime
LABOR pay,ARBITERS
rest day and termination
HAVE of employment.
NO Under Article 217 of the
JURISDICTION
Labor
1. Code, these
LABOR disputes areHAVE
ARBITERS within the
NOoriginal and exclusive jurisdiction
JURISDICTION OVER of the Labor Arbiters.
CERTAIN ISSUES AND CASES.
1
In the 2010
The following case or
issues of San Miguel
cases doCorp.
not v. Semillano,
fall under the petitioner asserts thatofthe
jurisdiction presentArbiters:
Labor case is outside the jurisdiction
of the labor tribunals because respondent Vicente Semillano is a member of the Alilgilan Multi-Purpose Coop (AMPCO), not an
employee
(a) of petitioner
Claims SMC. Petitioner
for damages is of thefrom
arising position that the of
breach instant dispute is intra-cooperative
a non-compete clausein nature
andfalling
other within the
post-
jurisdiction of theprohibitions;
employment Arbitration Committee of the Cooperative Development Authority. AMPCO was contracted by petitioner to
supply it with workers to perform the task of segregating bottles, removing dirt therefrom, filing them in designated places,
1 G.R. No. 164257, July
5, 2010.
2 G.R. No. 128024, May

9, 2000, 331 SCRA 584. 105
2015 BAR EXAMS
(b) Claims for payment of cash advances, car, appliance and other loans of
employees; (c) Dismissal of corporate officers and their monetary claims;
(d) Cases involving entities immune from suit;
(e) Cases falling under the doctrine of forum non conveniens;
(f) Constitutionality of CBA provisions.
XI-A.
CLAIMS FOR DAMAGES ARISING FROM BREACH OF NON-COMPETE CLAUSE AND

OTHER POST-EMPLOYMENT PROHIBITIONS
1. JURISDICTION IS LODGED WITH THE REGULAR COURTS.
In case of violation of the non-compete clause and similar post-employment bans or

prohibitions, the employer can assert his claim for damages against the erring employee with
the regular courts and not with the labor courts.
XI-B.
EM PL O Y ER’S CLAIMS FOR CASH ADVANCES, CAR, APPLIANCE AND OTHER

PERSONAL LOANS OF EMPLOYEES
1. LABOR ARBITERS HAVE NO JURISDICTION.
With respect to resolving issues involving loans availed of by employees from their employers,
it has been the consistent ruling of the Supreme Court that the Labor Arbiters have no
jurisdiction thereover but the regular courts.
Where the claim to the principal relief sought is to be resolved not by reference to the Labor
Code or other labor relations statute or a collective bargaining agreement but by the general
civil law, the jurisdiction over the dispute belongs to the regular courts of justice and not to
of the car s to the company, is not a labor, but a civil, dispute. It
the Labor Arbiter and the NLRC. In such situations, resolutions of the dispute requires
expertise, not in labor management relations nor in wage structures and other terms and
conditions involves
of employment, but rather
debtor-creditor in the
relations, ratherapplication of the general
than employee-employer relations. civil law. Clearly, such
claims fall outside the area of competence or expertise ordinarily ascribed to Labor Arbiters
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and the NLRC and the rationale for granting jurisdiction over such claims to these agencies
disappears.” Bar
c. Appliance loans concern the enforcement of a loan agreement involving debtor-creditor relations founded on
contract and do not in any way concern employee relations. As such it should be enforced through a separate civil
The following loans
action in the may
regularbe cited:
courts and not before the Labor Arbiter.
a. Cashd. loans/advances
Loans from retirementarefundinalso
the nature
involve of simple
the same principlecollection of a collection
as above; hence, sum oftherefor
money maybrought
only be
made through
by the employer, asthecreditor,
regular courts and not through
against the Labor Arbiterasor any
the employee, labor tribunal.
debtor. The fact that they were
employer and employee at the time of the transaction does not negate the civil jurisdiction of
XI-C.
the trial court. The case does not involve adjudication of a labor dispute but recovery of a sum
of money based on our civil laws on obligation and contract.
b. Car loans such as those granted to sales or medical representatives by reason of the
nature of their work. The
employer’s demand for payment of the employees’ amortizations on their car loans, or, in the
alternative, the return
DISMISSAL OF DIRECTORS AND CORPORATE OFFICERS
1. LABOR ARBITERS HAVE NO JURISDICTION.
The dismissal of a director or corporate officer is an intra-corporate dispute cognizable by the

Regional Trial Court and not by the Labor Arbiter.
2. MATLING DOCTRINE.
Under this doctrine,1 the following rules should be observed:
(1) The dismissal of regular employees falls under the jurisdiction of Labor Arbiters; while
that of corporate officers
falls within the jurisdiction of the regular courts.
(2) The term “corporate officers” refers only to those expressly mentioned in the
Corporation Code and By-Laws;
all other officers not so mentioned therein are deemed employees.
(3) Corporate officers are elected or appointed by the directors or stockholders, and those
who are given that character eith er by the Cor po r atio n Cod e o r by the cor po r atio n’s
by -laws.
(4) The Corporation Code specifically mentions only the following corporate officers, to
wit: president, secretary
and treasurer and such other officers as may be provided for in the by-laws.
(5) The Board of Directors can no longer create corporate offices because the
power of the Board of Directors to create a corporate office cannot be delegated.
Therefore, the term “corporate officers” should only refer to the above and to no other. A
different interpretation can easily leave the way open for the Board of
Directors to circumvent the constitutionally guaranteed security of tenure of the employee by

the expedient
inclusion in the By-Laws of an enabling clause on the creation of just any corporate officer
position.
(6) Distinction between a corporate officer and an employee. - An “office” is created

by the charter of the corporation and the “corporate officer” is elected by the directors or
stockholders. On the other hand, an “employee” occupies no office and generally is
employed not by the action of the directors or stockholders but by
the managing officer of the corporation who also determines the compensation to be paid to
such employee.
(7) Because of the Matling doctrine, the rulings in Tabang and Nacpil, are no longer
controlling because they are
“too sweeping and do not accord with reason, justice, and fair play.”
1 Enunciated in the 2010 case of Matling Industrial and Commercial Corp. v. Ricardo R.
Coros, G.R. No. 157802, Oct. 13, 2010. This case is an appeal via petition for review on
certiorari. The petitioners challenge the decision of the CA which sustained the ruling of the
NLRC to the effect that the Labor Arbiter had jurisdiction because the respondent, its Vice
President for Finance and Administration, was not a corporate officer of petitioner Matling.
106
2015 BAR EXAMS
(8) The status of an employee as director and stockholder does not automatically
convert his dismissal into an intra-corporate dispute.
(9) Two (2) elements to determine whether a dispute is intra-corporate or not.
(a) The status or relationship of the parties (Relationship test); and
(b) The nature of the question that is the subject of their controversy. (Nature of
controversy test).
In the absence of any one of these factors, the RTC will not have jurisdiction.
(10) The criteria do not depend on the services performed but on the manner of
creation of the office.
In Matling, respondent Corros was supposedly at once an employee, a stockholder, and a

Director of Matling. The circumstances surrounding his appointment to office must be fully
considered to determine whether the dismissal constituted an intra-corporate controversy or a
labor termination dispute. It must also be considered whether his status as Director and
stockholder had any relation at all to his appointment and subsequent dismissal as Vice
President for Finance and Administration.
Obviously enough, the respondent was not appointed as Vice President for Finance and
Administration because of his being a stockholder or Director of Matling. He had started
working for Matling on September 8, 1966, and had been employed continuously for 33 years
until his termination on April 17, 2000. His first work as a bookkeeper and his climb in 1987
to his last position as Vice President for Finance and Administration had been gradual but
steady. Even though he might have become a stockholder of Matling in 1992, his promotion to
the position of Vice President for Finance and Administration in 1987 was by virtue of the
length of quality service he had rendered as an employee of Matling. His subsequent
acquisition of the status of Director/stockholder had no relation to his promotion. Besides, his
status of Director/stockholder was unaffected by his dismissal from employment as Vice
President for Finance and Administration.
3. SIGNIFICANT CASES DECIDED BASED ON THE MATLING DOCTRINE. a. Cosare v.

Broadcom Asia, Inc., (2014)
In this 2014 case, the Supreme Court ruled that the Labor Arbiter, not the regular courts, has
original jurisdiction over the illegal dismissal case filed by petitioner Cosare who was an
incorporator of respondent Broadcom and was holding the position of Assistant Vice President
for Sales (AVP for Sales) and Head of the Technical Coordination at the time of his
termination. The following justifications were cited in support of this ruling:
(1) The mere fact that a person was a stockholder and an officer of the company at the time
the subject controversy developed does not necessarily make the case an intra-corporate
dispute.
(3) Real v. Sangu Philippines, Inc. (2011).
XI-D.
LABOR CASES INVOLVING ENTITIES IMMUNE FROM SUIT
1. IMMUNE ENTITIES CANNOT BE SUED FOR LABOR LAW VIOLATIONS.
In this jurisdiction, the generally accepted principles of international law are recognized and
adopted as part of the law of the land. Immunity of a State and international organizations
from suit is one of these universally recognized principles. It is on this basis that Labor
Arbiters or other labor tribunals have no jurisdiction over immune entities.
2. ILLUSTRATIVE CASE.
In Department of Foreign Affairs v. NLRC,1 involving an illegal dismissal case filed

against the Asian Development Bank (ADB), it was ruled that said entity enjoys immunity
(2) A person , although an officer of the company, is not necessarily a
from legal process of every form and therefore the suit against it cannot prosper. And this
immunity extends to officer
corporate its officers
thereof. who also enjoy immunity in respect of all acts performed by
them in their official capacity. The Charter and the Headquarters Agreement granting these
immunities and Information
(3) General privileges to(GIS)
Sheet thesubmitted
ADB are to SECtreaty covenants
neither governs and commitments
nor establishes the nature of office. voluntarily
ChanRobles
Bar
assumed by the Philippine government which must be respected.
(4) The Nature of the Controversy Test: The mere fact that a person was a stockholder at the time of the filing of the
illegal dismissal case does not make the action an intra-corporate dispute.
3. EXCEPTION TO THE RULE.
There isb.an
Other cases:
exception to the immunity rule as exemplified by the case of United States v.
Hon. Rodrigo,2 where it was held that when the function of the foreign entity otherwise
immune from suit partakes of the nature of a proprietary activity, such as the restaurant
(1) Barba
services offered at v.John
Liceo Hay
de Cagayan Universityundertaken
Air Station (2012); by the United States Government as a
commercial activity for profit and not in its governmental capacity, the case for illegal
dismissal filed by a Filipino cook working therein is well within the jurisdiction of Philippine
(2) Marc II Marketing, Inc. and Lucila V. Joson v. Alfredo M. Joson (2011);
courts. The reason is that by entering into the employment contract with the cook in the
discharge of its proprietary functions, it impliedly divested itself of its sovereign immunity
from suit.
1 G.R. No. 113191, Sept. 18,

1996, 262 SCRA 39, 43-44.
2 G.R. No. 79470, Feb. 26,

1990, 182 SCRA 644, 660. 107
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4. ESTOPPEL DOES NOT CONFER JURISDICTION OVER AN IMMUNE ENTITY.
An entity immune from suit cannot be estopped from claiming such diplomatic immunity since
estoppel does not operate to confer jurisdiction to a tribunal that has none over a cause of
action.
XI-E.
DOCTRINE OF FORUM NON CONVENIENS
1. REQUISITES.
This doctrine is an international law principle which has been applied to labor cases. The
following are the requisites for its applicability:
(1) That the Philippine court is one to which the parties may conveniently resort;
(2) That the Philippine court is in a position to make an intelligent decision as to the law and
the facts; and
(3) That the Philippine court has or is likely to have power to enforce its decision.
2. APPLICATION TO LABOR CASES.
a. Case where doctrine was rejected.
Petitioners’ invocation of this principle was rejected in Pacific Consultants International

Asia, Inc. v. Schonfeld.1
Petitioners’ insistence was based on the fact that respondent is a Canadian citizen and was a
repatriate. In so rejecting petitioners’ contention, the Supreme Court cited the following
reasons that do not warrant the application of the said principle: (1) the Labor Code does
not include forum non conveniens as a ground for the dismissal of the complaint;
and (2) the propriety of dismissing a case based on this principle requires a factual
determination; hence, it is properly considered as a defense.
b. Case where doctrine was applied.
This doctrine was applied in the case of The Manila Hotel Corp. and Manila Hotel
International Limited v. NLRC,2 where private respondent Marcelo Santos was an overseas
worker employed as a printer in a printing press in the Sultanate of Oman when he was
directly hired by the Palace Hotel, Beijing, People’s Republic of China to work in its print shop.
This hotel was being managed by the Manila Hotel International Ltd., a foreign entity
registered under the laws of Hong Kong. Later, he was terminated due to retrenchment
occasioned by business reverses brought about by the political upheaval in China (referring
to the Tiananmen Square incident) which severely affected the hotel’s operations.
In holding that the NLRC was a seriously inconvenient forum, the Supreme Court noted that
the main aspects of the
the Philippines.
Neither can an intelligent decision be made as to the law governing the employment contract
as such was perfected in foreign soil. This calls to fore the application of the principle of lex
loci contractus (the law of the place where the contract was made). It must be noted that the
employment contract was not perfected in the Philippines. Private respondent employee
signified his acceptance thereof by writing a letter while he was in the Sultanate of Oman. This
letter was sent to the Palace Hotel in the People’s Republic of China. Neither can the NLRC
determine the facts surrounding the alleged illegal dismissal as all acts complained of took
place in Beijing, People’s Republic of China. The NLRC was not in a position to determine
whether the Tiananmen Square incident truly adversely affected the operations of the Palace
Hotel as to justify respondent employee’s retrenchment.
case transpired in two foreign jurisdictions and the case involves purely foreign
elemen ts. The only link that the Philippines has
Even assuming that a proper decision could be reached by the NLRC, such would not have any
with the case
binding is thatagainst
effect the privatethe
respondent
employer, employee the(Marcelo
Palace Santos)
Hotel,is a Filipino
whichcitizen.
is aThe Palace Hotel and
corporation MHICL are
incorporated
under
was
Bar ChanRobles
the laws of
foreign corporations.
notbyacquired.
directly
China and
Consequently,
This isHotel,
the Beijing Palace
notwas
not atoforeign
notinvolving
all cases
say that
even served
Philippine
employer,
with can
Filipino citizens summons.
courts and agencies
through correspondence
Jurisdiction
be tried here.
sent to himhave
over itswas
Respondent employee
nowas
while he power
person
to at
working
hired
solve
the
controversies involving foreign employers. Neither could it be said that the
Sultanate of Oman. He was hired without the intervention of the POEA or any authorized recruitment agency of the government. Supreme Court
does
Hence,not haveis an
the NLRC power over forum
inconvenient an given
employment contract
that all the incidents of theexecuted
case - from in a foreign
the time country.
of recruitment, If the
to employment
respondent employee
to dismissal - occurred were
outside an “overseas
the Philippines. contract isworker”,
The inconvenience compounded a Philippine forum,
by the fact that specifically
the proper defendants, the
the
Palace Hotel
POEA, not and
theMHICL,
NLRC,arewouldnot nationals
protect of the Philippines.
him. He is Neither
not an are“overseas
they “doing business
contract in the Philippines.”
worker”, Likewise,
a fact the
which
main
he witnesses,
admits withMr. conviction.
Shmidt (General Manager of the Palace Hotel) and Mr. Henk (Palace Hotel’s Manager) are non-residents of
XI-F.
CONSTITUTIONALITY OF LABOR CONTRACT STIPULATIONS
1. THE HALAGUEÑA DOCTRINE.
In Halagueńa v. Philippine Airlines, Inc.,3 it was pronounced that it is not the Labor
Arbiter but the regular court which has jurisdiction to rule on the constitutionality of labor
contracts such as a CBA. Petitioners were female flight attendants of respondent Philippine
Airlines (PAL) and are members of the Flight Attendants and Stewards Association of the
Philippines (FASAP), the sole and exclusive bargaining representative of the flight attendants,
flight stewards and pursers of respondent. The July 11, 2001 CBA between PAL and FASAP
provides that the compulsory retirement for female flight attendants is fifty-five (55) and sixty
(60) for their male counterpart.
1 G.R. No. 166920, Feb. 19, 2007.
2 G.R. No. 120077, Oct. 13, 2000.
3 G.R. No.
172013, Oct. 2,
2009.
108
2015 BAR EXAMS
Claiming that said CBA provision is discriminatory against them, petitioners filed against
respondent a Special Civil Action for Declaratory Relief with Prayer for the Issuance of
Temporary Restraining Order and Writ of Preliminary Injunction with the Regional Trial Court
(RTC) of Makati City.
In ruling that the RTC has jurisdiction, the Supreme Court cited the following reasons:
(1) The case is an ordinary civil action, hence, beyond the jurisdiction of labor tribunals.
(2) The said issue cannot be resolved solely by applying the Labor Code. Rather, it requires
the application of the Constitution, labor statutes, law on contracts and the Convention on the
Elimination of All Forms of Discrimination Against Women (CEDAW). The power to apply and
interpret the constitution and CEDAW is within the jurisdiction
of trial courts, a court of general jurisdiction.
(3) Not every controversy or money claim by an employee against the employer or vice-
versa is within the exclusive jurisdiction of the Labor Arbiter. Actions between employees
and employer where the employer-employee relationship is merely incidental and the cause
of action proceeds from a different source of obligation are within the exclusive jurisdiction of
the regular courts. Here, the employer-employee relationship between the parties is merely
incidental and the cause of action ultimately arose from different sources of
obligation, i.e., the Constitution and CEDAW.
2.
REINSTATEMENT PENDING APPEAL
1. PIONEER TEXTURIZING DOCTRINE: REINSTATEMENT ASPECT OF LABOR

ARBITER’S DECISION, IMMEDIATELY
To implemen t the reinstatement aspect of a Labor Arbiter’s decision,
EXECUTORY EVEN PENDING APPEAL; NO WRIT OF EXECUTION REQUIRED.

there are only two (2) options available to the employer, to wit:
According to the Pioneer Texturizing doctrine, an order of reinstatement issued by the Labor
Arbiter under
ChanRobles
1. ActualArticle
reinstatement.
223 of- The theemployee should be
Labor Code is reinstated to his position
self-executory which he occupies
or immediately prior to his illegal
executory even
Bar dismissal under the same terms and conditions prevailing prior to his
pending appeal. This means that the perfection of an appeal shall stay the execution of thedismissal or separation or, if no longer
decision ofavailable,
the Laborto a substantially-equivalent
Arbiter except executionposition; or of the reinstatement pending appeal.
2. Payroll reinstatement. – The employee should be reinstated in the payroll of the company without requiring him to
2. REINSTATEMENT PENDING APPEAL, APPLICABLE ONLY TO THE
report back to his work.
REINSTATEMENT ORDER ISSUED BY THE LABOR ARBITER; WRIT OF EXECUTION
REQUIRED WHEN
4. DUTY OF EMPLOYER REINSTATEMENT
TO NOTIFY EMPLOYEE ORDERED IS REINSTATED.
ORDERED BY NLRC ON APPEAL, OR
SUBSEQUENTLY BY THE COURT OF APPEALS OR SUPREME COURT, AS THE CASE MAY
BE.
By way of distinction, the rule on reinstatement pending appeal applies only to the order of
reinstatement issued by the Labor Arbiter and to no other. This means that if the
reinstatement order is issued by the NLRC on appeal, or by the Court of Appeals or by the
Supreme Court, there is a need to secure a writ of execution from the Labor Arbiter of origin
to enforce the reinstatement of the employee whose dismissal is declared illegal.
3. TWO (2) OPTIONS OF EMPLOYER.
It is required that in case the decision of the Labor Arbiter includes an order of reinstatement,
it should contain: (a) A statement that the reinstatement aspect is immediately executory;
and
(b) A directive for the employer to submit a report of compliance within ten (10) calendar
days from receipt of the said
decision.
Disobedience of this directive clearly denotes a refusal to reinstate. The employee need not
file a motion for the issuance of the writ of execution since the Labor Arbiter is mandated
thereafter to motu proprio issue the writ. With the new rules in place, there is hardly any
difficulty in determining the employer’s intransigence in immediately complying with the
order.
5. INSTANCES WHEN WRIT OF EXECUTION OF LABOR ARBITER’S REINSTATEMENT

ORDER STILL REQUIRED.
Under the 2011 NLRC Rules of Procedure, there are two (2) instances when a writ of execution
should still be issued immediately by the Labor Arbiter to implement his order of
reinstatement, even pending appeal, viz.:
(1) When the employer disobeys the prescribed directive to submit a report of compliance
within ten (10) calendar days from receipt of the decision; or
(2) When the employer refuses to reinstate the dismissed employee.
The Labor Arbiter shall motu proprio issue a corresponding writ to satisfy the reinstatement
wages as they accrue until actual reinstatement or reversal of the order of reinstatement.
6. SOME PRINCIPLES ON REINSTATEMENT PENDING APPEAL.
Employer has no way of staying execution of immediate reinstatement. He cannot

post bond to prevent its execution.
Reinstatement pending appeal applies to all kinds of illegal dismissal cases, regardless
of the grounds thereof.
Reinstatement pending appeal does not apply when the dismissal is legal but
reinstatement is ordered for some reasons like equity and compassionate justice.
The failure of employee ordered reinstated pending appeal to report back to work as directed
by the employer does not give the employer the right to remove him, especially when there is
a reasonable explanation for his failure.
When former position is already filled up, the employee ordered reinstated pending appeal
should be reinstated to a
substantially equivalent position.
Reinstatement to a position lower in rank is not proper.
In case of two successive dismissals, the order of reinstatement pending appeal under
Article 223 issued in the first case shall apply only to the first case and should not affect the
second dismissal. According to Sevilla v. NLRC, the Labor Arbiter was correct in denying the
third motion for reinstatement filed by the petitioner because what she should have filed was
a new complaint based on the second dismissal. The second dismissal gave rise to a new
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2015 BAR EXAMS
cause of action. Inasmuch as no new complaint was filed, the Labor Arbiter could not have ruled
on the legality of the second dismissal.
Reinstatement pending appeal is not affected by the reinstated employee’s employment

elsewhere.
Effect of grant of achievement award during reinstatement pending appeal.
In the 2014 case of Garza v. Coca-Cola Bottlers Philippines, Inc.,1 it was pronounced that
the act of respondent CCBPI
in giving an award of a Certificate of Achievement to petitioner for his exemplary sales

performance during his reinstatement ordered by the Labor Arbiter, while respondent’s appeal
with the NLRC was still pending, constitutes recognition of petitioner’s abilities and
accomplishments. It indicates that he is a responsible, trustworthy and hardworking employee of
CCBPI. It constitutes adequate proof weighing in his favor.
3.
REQUIREMENTS TO PERFECT APPEAL TO NLRC
I.
APPEAL IN GENERAL
1. APPEAL, MEANING AND NATURE.
The term “appeal” refers to the elevation by an aggrieved party to an agency vested with
appellate authority of any decision, resolution or order disposing the principal issues of a case
rendered by an agency vested with original jurisdiction, undertaken by filing a memorandum of
appeal.
2. SOME PRINCIPLES ON APPEAL.
Appeals under Article 223 apply only to appeals from the Labor Arbiter’s decisions, awards or
orders to the Commission
(NLRC).
There is no appeal from the decisions, orders or awards of the NLRC. Clearly, therefore, Article
223 of the Labor Code is not the proper basis for elevating the case to the Court of Appeals or to
the Supreme Court. The proper remedy from the decisions, awards or orders of the NLRC to the
Court of Appeals is a Rule 65 petition for certiorari and from the Court of
Appeals to the Supreme Court, a Rule 45 petition for review on certiorari.
Appeal from the NLRC to the DOLE Secretary and to the President had long been
abolished.
Appeal is not a constitutional right but a mere statutory privilege. Hence, parties who seek to
avail of it must comply with the statutes or rules allowing it.
A motion for reconsideration is unavailing as a remedy against a decision of the Labor Arbiter.
The Labor Arbiter should treat the said motion as an appeal to the NLRC.
A “Petition for Re lief” should be treated as appeal.
Affirmative relief is not available to a party who failed to appeal. A party who does not appeal from a decision of a court
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the appealed decision.
d. If serious errors in the findings of fact are raised which, if not corrected, would cause grave or
irreparable damage or injury to the appellant.
NLRC has certiorari power.
The first ground above regarding prima facie evidence of abuse of discretion on the part of the
Labor Arbiter is actually an exercise of certiorari power by the NLRC. The case of Triad Security
& Allied Services, Inc. v. Ortega,2 expressly recognized this certiorari power of the NLRC.
Clearly, according to the 2012 case of Auza, Jr. v. MOL Philippines, Inc.,3 the NLRC is
possessed of the power to rectify any abuse of discretion committed by the Labor Arbiter.
II. PERFECTION OF APPEAL
1. EFFECT OF PERFECTION OF APPEAL ON EXECUTION.
To reiterate, the perfection of an appeal shall stay the execution of the decision of the Labor
Arbiter except execution for reinstatement pending appeal.
2. PERFECTION OF APPEAL, MANDATORY AND JURISDICTIONAL.
The perfection of appeal within the period and in the manner prescribed by law is jurisdictional
and non-compliance with the legal requirements is fatal and has the effect of rendering the
judgment final and executory, hence, unappealable.
3. REQUISITES.
The requisites for perfection of appeal to the NLRC are as follows: (1) Observance of the
reglementary period;
(2) Payment of appeal and legal research fee;
(3) Filing of a Memorandum of Appeal;
(4) Proof of service to the other party; and
(5) Posting of cash, property or surety bond, in case of monetary awards.
The foregoing are discussed below.
1 G.R. No. 180972,

Jan. 20, 2014.
2 G.R. No. 160871,

Feb. 6, 2006.
3 G.R. No. 175481, 110

Nov. 21, 2012.
2015 BAR EXAMS
III. REGLEMENTARY PERIOD
1. TWO (2) KINDS OF REGLEMENTARY PERIOD.
The reglementary period depends on where the appeal comes from, viz.:
1. Ten (10) calendar days – in the case of appeals from decisions of the Labor Arbiters
under Article 223 of the Labor
Code; and
2. Five (5) calendar days – in the case of appeals from decisions of the DOLE Regional
Director under Article 129 of the Labor Code.
Calendar days and not working days.
The shortened period of ten (10) days fixed by Article 223 contemplates calendar days and
not working days. The same holds true in the case of the 5-day reglementary period under
Article 129 of the Labor Code. Consequently, Saturdays, Sundays and legal holidays are
included in reckoning and computing the reglementary period.
3. SOME PRINCIPLE S ON REGLEMENTARY PERIOD.
2. EXCEPTIONS TO THE 10-CALENDAR DAY OR 5-CALENDAR DAY REGLEMENTARY

The reglementary
PERIOD ChanRobles
RULE. period is mandatory and not a “mere technicality.”
Bar
The failure to appeal within the reglementary period renders the judgment appealed from final and executory by
operation of law. Consequently, the prevailing party is entitled, as a matter of right, to a writ of execution and the issuance
The following areathe
thereof becomes specific
ministerial instances
duty which where the
may be compelled rules
through on the
the remedy of reckoning
mandamus. of the reglementary
period have not been strictly observed:
The date of receipt of decisions, resolutions or orders by the parties is of no moment. For purposes of appeal, the
reglementary period shall be counted from receipt of such decisions, resolutions, or orders by the counsel or
representative of record.
1) 10th day (or 5th day) falling on a Saturday, Sunday or holiday, in which case, the appeal
may be filed in the next working day.
2) Reliance on erroneous notice of decision as when the notice expressly states “working
days” and not “calendar days.”
3) Appeal from decisions of Labor Arbiters in direct contempt cases – five (5) calendar days.
4) Filing of petition for extraordinary remedies from orders or resolutions of Labor

Arbiters or on third party claims
– ten (10) calendar days.
5) When NLRC exercises its power to “correct, amend, or waive any error, defect or
irregularity whether in substance or form” in the exercise of its appellate jurisdiction, as
provided under Article 218(c) of the Labor Code, in which case, the late filing of the appeal is
excused.
6) When technical rules are disregarded under Article 221.
7) When there are some compelling reasons that justify the allowance of the appeal despite
its late filing such as when it is granted in the interest of substantial justice.
Miscomputation of the reglementary period will not forestall the finality of the judgment. It is
in the interest of everyone that the date when judgments become final and executory should
remain fixed and ascertainable.
Date of mailing by registered mail of the appeal memorandum is the date of its
filing.
Motion for extension of time to perfect an appeal is not allowed. This kind of motion is a
prohibited pleading.
Motion for extension of time to file the memorandum of appeal is not allowed.
Motion for extension of time to file appeal bond is not allowed.
IV.
APPEAL FEE AND LEGAL RESEARCH FEE
1. PAYMENT OF APPEAL FEE AND LEGAL RESEARCH FEE, MANDATORY AND

JURISDICTIONAL.
The payment by the appellant of the prevailing appeal fee and legal research fee
is both mandatory and jurisdictional. An appeal is perfected only when there is proof of
payment of the appeal fee. It is by no means a mere technicality. If not paid, the running of
the reglementary period for perfecting an appeal will not be tolled.
V. MEMORANDUM OF APPEAL
1. REQUISITES.
The requisites for a valid Memorandum of Appeal are as follows:
1. The Memorandum of Appeal should be verified by the appellant himself in accordance with
the Rules of Court, as amended;
2. It should be presented in three (3) legibly typewritten or printed copies;
3. It shall state the grounds relied upon and the arguments in support thereof, including the
relief prayed for;
4. It shall contain a statement of the date the appellant received the appealed decision,
award or order; and
5. It shall be accompanied by:
(i) proof of payment of the required appeal fee and legal research fee; (ii) posting of a
cash or surety bond (in case of monetary awards); and
(iii) proof of service upon the other party.
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2015 BAR EXAMS
2. REQUIREMENTS NOT JURISDICTIONAL.
The aforesaid requirements that should be complied with in a Memorandum of Appeal are
merely a rundown of the contents of the required appeal memorandum to be submitted by the
appellant. They are not jurisdictional requirements.
3. SOME PRINCIPLES ON MEMORANDUM OF APPEAL.
Mere notice of appeal without complying with the other requisites aforestated shall
not stop the running of the period for perfecting an appeal.
Memorandum of appeal is not similar to motion for reconsideration.
Lack of verification in a memorandum of appeal is not a fatal defect. It may easily

be corrected by requiring an oath.
An appeal will be dismissed if signed only by an unauthorized representative.
Only complainants who signed the memorandum of appeal are deemed to have
appealed the Labor Arbiter’s
decision. The prevailing doctrine in labor cases is that a party who has not appealed cannot
obtain from the appellate court
any affirmative relief other than those granted, if any, in the decision of the lower tribunal.
2. SOME PRINCIPLE S ON POSTING OF BOND.
VI.
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PROOF OF
Posting of SERVICE TO ADVERSE
bond is mandatory PARTY
and jurisdictional.
The cash or surety bond required for the perfection of appeal should be posted within the reglementary period. If a
party failed to perfect his appeal by the non-payment of the appeal bond within the 10-calendar day period provided by law,
1. FAILURE
the decisionTOof theSERVE COPY
Labor Arbiter TO final
becomes ADVERSE PARTY,
and executory upon theNOT FATAL.
expiration of the said period.
In case the employer failed to post a bond to perfect its appeal, the remedy of the employee is to f ile a motion to
dismiss the appeal and not a petition for mandamus for the issuance of a writ of execution.
While it is required that in all cases, the appellant shall furnish a copy of the Memorandum of
Surety bond must be issued by a reputable bonding company duly accredited by the Commission (NLRC) or the Supreme
Appeal to the other party (appellee), non-compliance therewith, however, will not be an
obstacle to the perfection of the appeal; nor will it amount to a jurisdictional defect on the
NLRC’s taking cognizance thereof.
VII. POSTING OF BOND
1. WHEN POSTING OF BOND

REQUIRED.
Only in case the decision of the Labor Arbiter or the DOLE Regional Director (under Article 129
of the Labor Code) involves a monetary award, that an appeal by the employer may be
perfected only upon the posting of a bond, which shall either be in the form of (1) cash
deposit, (2) surety bond or (3) property bond, equivalent in amount to the monetary
award, but excluding the amount of damages (moral and exemplary) and attorney’s
fees. In other words, only monetary awards (such as unpaid wages, backwages,
separation pay, 13th month pay, etc.) are required to be covered by the bond. Moral
and exemplary damages and attorney’s fees are excluded.
Court.
The bond shall be valid and effective from the date of deposit or posting, until the case is
finally decided, resolved or terminated, or the award satisfied.
Posting of a bank guarantee or bank certification is not sufficient compliance with

the bond requirement. It is not equivalent to nor can be considered compliance with the
cash, surety or property bond.
Cooperatives are not exempted from posting bond.
Government is exempt from posting of bond; government-owned and/or controlled

corporations, however, are not exempt therefrom.
Bond is not required for the NLRC to entertain a motion for reconsideration. An
appeal bond is required only for the
perfection of an appeal of a Labor Arbiter’s decision involving a monetary award.
Bond is not required to file a Rule 65 petition for certiorari.
3. JUSTIFICATIONS FOR NON-POSTING OF BOND.
No monetary award, no bond required. The rule is clear that when the judgment of the
Labor Arbiter does not involve any monetary award, no appeal bond is necessary.
There is no duty to post a bond if the monetary award is not specified in the
decision. The Labor Arbiter’s decision or
order should state the amount awarded. If the amount of the monetary award is not contained
or fixed in the judgment, the
appeal bond is not required to be posted.
In case of conflict between the body and the fallo of the decision, the latter should
prevail.
VII-A.
RULE ON REDUCTION OF APPEAL BOND
1. REQUISITES WHEN THE AMOUNT OF APPEAL BOND MAY BE REDUCED.
(1) The motion should be filed within the reglementary period;
(2) The motion to reduce bond should be based on meritorious grounds; and
(3) The motion should be accompanied by a partial bond, the amount of which should be
reasonable in relation to the monetary awards.
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2015 BAR EXAMS
2. THE MCBURNIE DOCTRINE: NEW GUIDELINES FOR FILING AND ACCEPTANCE OF

MOTIONS TO REDUCE BOND.
The 2013 en banc decision rendered in the case of Andrew James Mcburnie v. Eulalio
Ganzon,1 has enunciated the following guidelines that must be observed in the matter of the
filing and acceptance of motions to reduce appeal bond, as provided in Section 6, Rule VI of
the 2011 NLRC Rules of Procedure:
(a) The filing of a motion to reduce appeal bond shall be entertained by the NLRC subject to
the following conditions: (1) there is meritorious ground; and (2) a bond in a reasonable
amount is posted;
(b) For purposes of compliance with condition no. (2) above, a motion shall be accompanied
by the posting of a provisional cash or surety bond equivalent to ten percent (10%) of the
monetary award subject of the appeal, exclusive of damages and attorney's fees;
(c) Compliance with the foregoing conditions shall suffice to suspend the running of the 10-
day reglementary period
to perfect an appeal from the Labor Arbiter’s decision to the NLRC;
(d) The NLRC retains its authority and duty to resolve the motion to reduce bond and
determine the final amount of bond that shall be posted by the appellant, still in accordance
with the standards of meritorious grounds and reasonable amount; and
(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that
exceeds the amount of the provisional bond, the appellant shall be given a fresh period of ten
(10) days from notice of the NLRC order within which to perfect the appeal by posting the
required appeal bond.
Arbiter for the illegal dismissal of 5,984 employees with accompanying award of
other monetary benefits
This Mcburnie ruling has completely overhauled the rules on motion separationtopayreduce
and bond. Before its
advent, the issue of what amount to post by way of partial or provisional bond has continued
amounting to P3,453,664,710.86. Petitioner companies filed their Notice of Appeal with Motion to Reduce Appeal Bond and To
to hound the party litigants and the courts. Now, the fixing of “ten percent (10%) of the
Bar ChanRobles
monetary
Admit Reduced award
Amountsubject of the
with the NLRC. They appeal, exclusive
asked the NLRC to reduceofthedamages
appeal bond and attorney's
to P1 Million each on fees” as that
the grounds the
it is impossible foramount”
“reasonable any insurancethatcompany to cover be
should such huge
postedamounthas and that, in requiring them
completely to post in full any
eradicated the appeal
andbond,
all
it would be tantamount to denying them their right to appeal.
controversies thereon. In other words, no more motion for reduction of bond accompanied by
said 10% requirement would be denied outright on the ground of insufficiency or inadequacy
In light of the impossibility for any surety company to cover the appeal bond and the huge economic losses which the
of the partial or provisional bond.
companies and their employees might suffer if the P3.45 Billion bond is sustained, the NLRC granted the reduction of the appeal
bond. is
What Theleft
NLRC forissued
the an Order dated 31 March
determination by the2006 NLRC,
directing petitioner
using its corporations to post an additional
sound judgment P4.5 Million bond,
and discretion, are
bringing the total posted bond to P9 Million. The Court of Appeals,
only the issues of (1) the reasonable final amount of the bond; and (2) what however, reversed and set aside the said 31 March 2006
constitute
“meritorious grounds.” This determination is important since “in all cases, the reduction of the
appeal bond shall be justified by meritorious grounds and accompanied by the posting of the
required appeal bond in a reasonable amount.”2
The rule set in McBurnie was clarified3 by the Court in the consolidated cases of Sara Lee
Philippines v. Ermilinda Macatlang.4 Thus, while McBurnie has effectively addressed the
preliminary amount of the bond to be posted in order to toll the running of the period to
appeal, there is no hard and fast rule in determining whether the additional bond to be posted
is reasonable in relation to the judgment award. In this case of Sara Lee, petitioner
companies5 were held liable by the Labor
NLRC Resolution and deemed it reasonable under the circumstances of the case to order the
posting of an additional appeal bond of P1 Billion.
Considering the peculiar circumstances in Sara Lee, the Court has to determine what is the
reasonable amount of appeal bond. The fact was underscored that the amount of 10% of the
award is not a permissible bond but is only such amount that shall be deemed reasonable in
the meantime that the appellant’s motion is pending resolution by the NLRC. The actual
reasonable amount yet to be determined is necessarily a bigger amount. In an effort to
strike a balance between the constitutional obligation of the state to afford protection to labor,
on the one hand, and the opportunity afforded to the employer to appeal, on the other, it
considered the appeal bond in the amount of P725M which is equivalent to 25% of the
monetary award sufficient to perfect the appeal, viz.:
“We sustain the Court of Appeals in so far as it increases the amount of the required appeal
bond. But we deem it reasonable to reduce the amount of the appeal bond to P725 Million.
This directive already considers that the award if not illegal, is extraordinarily huge and that
no insurance company would be willing to issue a bond for such big money. The amount of
P725 Million is approximately 25% of the basis above calculated. It is a balancing of the
constitutional obligation of the state to afford protection to labor which, specific to this case, is
assurance that in case of affirmance of the award, recovery is not negated; and on the other
end of the spectrum, the opportunity of the employer to appeal.
“By reducing the amount of the appeal bond in this case, the employees would still be assured
of at least substantial compensation, in case a judgment award is affirmed. On the other
hand, management will not be effectively denied of its statutory privilege of appeal.”
In line with Sara Lee and the objective that the appeal on the merits to be threshed out
soonest by the NLRC, the Court, in the 2015 case of Balite v. SS Ventures International,
Inc.,6 held that the appeal bond of P100,000.00 posted by the respondent company for the
total monetary award of P490,308.00, which is equivalent to around 20% thereof, is sufficient
to perfect the appeal. With the employer's demonstrated good faith in filing the motion to
reduce the bond on demonstrable grounds coupled with the posting of the appeal bond in the
requested amount, as well as the filing of the memorandum of appeal, the
1 G.R. Nos. 178034, 178117, 186984 and 186985, Oct. 17, 2013.
2 Andrew James Mcburnie v. Eulalio Ganzon, G.R. Nos. 178034, 178117, 186984 and
186985, Oct. 17, 2013.
3 The fact of clarification was pronounced in Balite v. SS Ventures International, Inc., G.R.
No. 195109, Feb. 4, 2015.
4 G.R. Nos. 180147-180150, 180319 and 180685, June 4, 2014.
5 This case is a consolidation of 6 cases involving several corporations, namely: Sara Lee
Philippines, Inc. (SLPI), Aris Philippines, Inc. (Aris), Sara Lee Corporation (SLC)
and Fashion Accessories Philippines, Inc. (FAPI).
6 G.R. No. 195109, Feb. 4, 2015.
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2015 BAR EXAMS
right of the employer to appeal must be upheld. This is in recognition of the importance of the
remedy of appeal, which is a n essential part of our judicial system and the need to ensure
that every party litigant is given the amplest opportunity for the proper and just disposition of
his cause freed from the constraints of technicalities.
B.
NATIONAL LABOR RELATIONS COMMISSION (NLRC)
1. NATURE.
The NLRC is an administrative quasi-judicial body. It is an agency attached to the DOLE solely
for program and policy coordination only. It is in charge of deciding labor cases through
compulsory arbitration.
2. COMPOSITION OF THE NLRC.
The NLRC is composed of a Chairman and twenty-three (23) members called

“Commissioners.”
respective territorial jurisdictions.
The NLRC has tripartite composition. Eight (8) members thereof should be chosen only from
among the nominees of the workers sector and another eight (8) from the employers
sector. The Chairman and the seven (7) remaining members shall come from the public
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1.
sector, with the latter to be chosen preferably from among the incumbent Labor Arbiters.
JURISDICTION
1. COMMISSION
3. TWO (2) KINDS OF JURISDICTION.
EN BANC.
The NLRC exercises two (2) kinds of jurisdiction:

The Commission sits en banc only for the following purposes:
1. Exclusive original jurisdiction; and

(1) To promulgate rulesappellate
2. Exclusive and regulations
jurisdiction. governing the hearing and disposition of cases before
any of its divisions and regional branches; and
(2) To formulate policies affecting its administration and operations.
The NLRC does not sit en banc to hear and decide cases. The banc has no
adjudicatory power. The
Commission exercises its adjudicatory and all other powers, functions, and duties
through its eight (8) Divisions.
4. NLRC’S EIGHT (8) DIVISIONS.
The NLRC is divided into eight (8) divisions, each one is comprised of three (3) members.
Each Division shall consist of one (1) member from the public sector who shall act as its
Presiding Commissioner and one (1) member each from the workers and employers sectors,
respectively.
The various Divisions of the Commission have exclusive appellate jurisdiction

over cases within their
2. EXCLUSIVE ORIGINAL JURISDICTION.
The NLRC exercises exclusive and original jurisdiction over the following cases:
a. Petition for injunction in ordinary labor disputes 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.
b. Petition for injunction in strikes or lockouts under Article 264 of the Labor Code.
c. Certified cases which refer to labor disputes causing or likely to cause a strike or
lockout in an industry indispensable to the national interest, certified to it by the Secretary of
Labor and Employment for compulsory arbitration by virtue of Article 263(g) of the Labor
Code.
d. Petition to annul or modify the order or resolution (including those issued during
execution proceedings) of the
Labor Arbiter.
3. EXCLUSIVE APPELLATE JURISDICTION.
The NLRC exercises exclusive appellate jurisdiction over the following:
a. All cases decided by the Labor Arbiters.
b. Cases decided by the DOLE Regional Directors or hearing officers involving small money
claims under Article 129 of the Labor Code.
c. Contempt cases decided by the Labor Arbiters.
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2015 BAR EXAMS
2.
EFFECT OF NLRC REVERSAL OF
LABOR ARBITER’ S O RDER O F REI NSTATEM ENT
1. EFFECT OF REVERSAL OF REINSTATEMENT ORDER WHEN EMPLOYEE WAS

ACTUALLY REINSTATED. The BERGONIO Rule:
Bergonio, Jr. v. South East Asian Airlines, April 21, 2014.
After reversal of Labor Arbiter’s decision, the employer’s duty to reinstate the
dismissed employee in the actual service or in the payroll is effectively terminated. The
employee, in turn, is not required to return the wages that he had received prior to the
reversal of the LA’s decision.

REINSTATED IN THE PAYROLL. The GENUINO Doctrine:
Marilou S. Genuino v. NLRC, Citibank, N.A., Dec. 4, 2007.
The Refund Doctrine in Genuino no longer applies, per Garcia Doctrine.

Garcia v. P hilippine Airlines, Inc., Jan. 20, 2009 (En Banc).
The WENPHIL Rule: (The prevailing rule)

3.1. ENTITLEMENT TO REINSTATEMENT WAGES.
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the moment an v. Abing,
employee Aprilreinstated
is ordered 7, 2014. by the Labor Arbiter on the basis of the finding that his dismissal
is illegal, up to the time that an appellate tribunal like the NLRC, Court of Appeals and Supreme Court, as the case may be,
reverses the said finding, the employee is generally entitled to his so-called “reinstatemen wages.” The issue of entitlement to
this benefit has been the subject of several doctrinal rulings now known as follows:
The period for computing the backwages due to the dismissed employees during the period
of appeal should END
(1) Roquero doctrine; and
on the date that a higher court (in this case the CA) reversed the labor arbitration ruling of
illegal dismissal.”
(3) Garcia doctrine.

NEITHER REINSTATED TO HIS FORMER POSITION OR IN THE PAYROLL.
Entitlement to reinstatement salaries/wages, allowances and benefits under the

following doctrines: (1) ROQUERO doctrine; and
(2) GARCIA doctrine.
Roquero v. Philippine Air Lines, Inc., April 22, 2003.
t
3.1.1. ROQUERO DOCTRINE.
The Roquero doctrine, enunciates the rule that in cases where an employee is ordered
reinstated by the Labor Arbiter and the employer fails or refuses to obey the reinstatement
order but initiates an appeal, the employer’s success in having the decision of the Labor
Arbiter’s decision reversed on appeal will not exculpate him from the liability to pay the
reinstatement wages of the employee reckoned and computed from the time the employee
was ordered reinstated by the Labor Arbiter until the date of its reversal on appeal.
In this case of Roquero, the dismissal of petitioners Roquero and Pabayo was held valid by the
Labor Arbiter. On appeal to the NLRC, the Labor Arbiter’s decision was reversed and
consequently, petitioners were ordered reinstated. They did not appeal from that decision of
the NLRC but filed a motion for the issuance of a writ of execution of the order of
reinstatement. The Labor Arbiter granted the motion but respondent PAL refused to comply
with the said order on the ground that it has filed a Petition for Review before the Supreme
Court. Subsequently, the CA reversed the decision of the NLRC and ruled that the dismissal of
petitioners was valid. The Supreme Court later affirmed the CA’s decision but it held that the
unjustified refusal by PAL to reinstate Roquero who, unlike Pabayo, has not amicably settled
his case, entitles him to the payment of his reinstatement wages effective from the time PAL
failed to reinstate him despite the issuance of the writ of execution. Thus, it was mandatory
for PAL to actually reinstate Roquero or reinstate him in the payroll. Having failed to do so, the
former must pay the latter the salaries he is entitled to, as if he was reinstated, from the time
of the decision of the NLRC until the finality of the decision of the Supreme Court.
Following Roquero, it is now the norm that even if the order of reinstatement of the Labor
Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay
the wages of the dismissed employee during the period of appeal until its reversal by the
NLRC, or the Court of Appeals or the Supreme Court, as the case may be. If the employee has
been reinstated during the appeal period and such reinstatement order is subsequently
reversed on appeal with finality, the employ ee is not required to reimburse whatever salaries
he has received for he is entitled to such, more so if he actually rendered services during the
said period.
3.1.2. GARCIA DOCTRINE.
a. Modification of the Roquero and Genuino doctrines.
The Roquero and Genuino doctrines have been modified by the Garcia doctrine. In this case,
while respondent Philippine Airlines (PAL) was undergoing rehabilitation receivership, an illegal
dismissal case was filed by petitioners against respondent PAL which was decided by the Labor
Arbiter in their favor thus ordering PAL to, inter alia, immediately comply with
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the reinstatement aspect of the decision. On appeal, the NLRC reversed the ruling of the Labor
Arbiter and held that their dismissal was valid. The issue of whether petitioners may collect their
reinstatement wages during the period between the Labor Arbiter’s order of reinstatement
pending appeal and the NLRC decision overturning that of the Labor Arbiter, now that
respondent PAL has terminated and exited from rehabilitation proceedings, was resolved in the
negative by the Supreme Court. The following ratiocinations were cited:
(1) Re: modification of the Genuino doctrine. - The “refund doctrine” in Genuino should no
longer be observed because it easily demonstrates how a favorable decision by the Labor Arbiter
could harm, more than help, a dismissed employee. The employee, to make both ends meet,
would necessarily have to use up the salaries received during the pendency of the appeal, only to
end up having to refund the sum in case of a final unfavorable decision. It is mirage of a stop-
gap leading the employee to a risky cliff of insolvency. Further, the Genuino ruling not only
disregards the social justice principles behind the rule, but also institutes a scheme unduly
favorable to management. Under such scheme, the salaries dispensed pendente lite merely serve
as a bond posted in installment by the employer. For in the event of a reversal of the Labor
Arbiter’s decision ordering reinstatement, the employer gets back the same amount without
having to spend ordinarily for bond premiums. This circumvents, if not directly contradicts, the
proscription that the “posting of a bond [even a cash bond] by the employer shall not stay the
execution for reinstatement.”
(2) Re: modification of the Roquero doctrine. – The Roquero doctrine was reaffirmed but
with the modification that “[a]fter the Labor Arbiter’s decision is reversed by a higher tribunal, the
employee may be barred from collecting the accrued wages, if it is shown that the delay in
enforcing the reinstatement pending appeal was without fault on the part of the employer.”
b. Two-fold test under the Garcia doctrine.
Under Garcia, the test to determine the liability of the employer (who did not reinstate the
employee pending appeal) to pay the wages of the dismissed employee covering the period from
the time he was ordered reinstated by the Labor Arbiter to the reversal of the Labor Arbiter’s
decision either by the NLRC, the Court of Appeals or the High Court, is two-fold, to wit:
(1) There must be actual delay or the fact that the order of reinstatement pending appeal was not
executed prior to its reversal; and
(2) The delay must not be due to the employer’s unjustified act or omission. If the delay is due
to the employer’s unjustified refusal, the employer may still be required to pay the salaries
notwithstanding the reversal of the Labor Arbiter’s decision.
In Garcia, there was actual delay in reinstating petitioners but respondent PAL was justified in not
complying with the reinstatement order of the Labor Arbiter because during the pendency of the
illegal dismissal case, the SEC placed respondent
PAL under an Interim Rehabilitation Receiver who, after the Labor Arbiter rendered
his decision, was replaced with a Permanent
Rehabilitation Receiver. It is settled that upon appointment by the SEC of a rehabilitation receiver, all actions for claims before
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any court, tribunal or board against the corporation shall ipso jure be suspended. Resultantly, respondent PAL’s “failure to
exercise the alternative options of actual reinstatement and payroll reinstatement was thus justified. Such being the case,
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respondent’s obligation to pay the salaries pending appeal,: aswww.chanroblesbar.com.ph
the normal effect of the non-exercise of the options, did not
attach.”
(1) College of the Immaculate Conception v. NLRC (2010); (2) Islriz Trading v. Capada
(2011);
(3) Pfizer, Inc. v. Velasco (2011); and
(4) C. Alcantara & Sons, Inc. v. CA (2012).
2. RECKONING OF THE PERIOD COVERED BY ACCRUED REINSTATEMENT WAGES.
To clarify, employees ordered reinstated by the Labor Arbiter are entitled to accrued reinstatement
wages onl y from the time the employer received a copy of the Labor Arbiter’s decision
declaring the employees’ termination illegal and ordering their reinstatement up to the date of
the decision of the appellate tribunal overturning that of the Labor Arbiter. It is not
accurate therefore to state that such entitlement commences “from the moment the reinstatement
order was issued up to the date when the same was reversed by a higher court without fear of
refunding what he had received.”
4. SOME PRINCIPLES ON REINSTATEMENT WAGES.
Employer is not liable to pay any reinstatement backwages if reinstatement is ordered not by the
Labor Arbiter but by the NLRC on appeal and it was not executed by writ and its finding of illegal
dismissal is later reversed by the Court of Appeals and/or Supreme Court.
Payroll-reinstated employee is entitled not only to reinstatement wages but also to other
benefits during the period of payroll reinstatement until the illegal dismissal case is
reversed by a higher tribunal.
Award of additional backwages and other benefits from the time the Labor Arbiter ordered
reinstatement until actual or payroll reinstatement is proper and valid.
3. REMEDIES
1. EXTRAORDINARY
REMEDIES. a. Nature.
The power of the Commission (NLRC) to grant extraordinary remedies mentioned in No. 3 above
is not provided in the Labor Code or in any other laws. It is a newly created remedy which saw
light for the first time under Rule XII of the 2011 NLRC Rules of Procedure. Past NLRC Rules did
not provide therefor.
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Since this is a recent newly minted remedy, there has yet been no decision by the
Supreme Court dwelling on its
validit
y.
What is clear though is that this remedy is not equivalent to nor a substitute for
appeal. It is directed against “orders” or
“resolutions” issued by the Labor Arbiter in the course of the proceedings before him where
the remedy of appeal is not available. Notably, the remedy of appeal is available only against
the main decision of a case. But orders or resolutions issued prior to the rendition of the
decision in the main as well as orders or resolutions issued thereafter, specifically during the
execution stage, are subject of this rule on extraordinary remedies.
b. Grounds.
The petition filed under this Rule may be entertained only on any of the following grounds: (a)
If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;
(b) If serious errors in the findings of facts are raised which, if not corrected, would cause
grave or irreparable
damage or injury to the petitioner;
(c) If a party by fraud, accident, mistake or excusable negligence has been prevented from
taking an appeal; (d) If made purely on questions of law; or
(e) If the order or resolution will cause injustice if not rectified.

The certification of a labor dispute to the NLRC has the following effects:
c. Initiation through verified petition.
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(1) On intended or impending strike or lockout. - Upon certification, the intended or impending strike or lockout is
automatically enjoined, notwithstanding the filing of any motion for reconsideration of the certification order or the non-resolution
of any
To such motion
secure these which may have been duly
extraordinary submitted to
remedies, a the DOLEaggrieved
party Secretary. by any order or resolution of the
Labor Arbiter including those issued during execution proceedings may file a verified petition
to annul or modify such order or resolution. The petition may be accompanied by an
application(2) On actual
for thestrike or lockout.
issuance of -aIf atemporary
work stoppagerestraining
has already taken place and/or
order at the timewrit
of the of
certification,
preliminaryall striking
or
or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all
permanent injunction to enjoin the Labor Arbiter, or any person acting under his/her
workers under the same terms and conditions prevailing before the strike or lockout.
authority, to desist from enforcing said resolution or order.
(3) On cases already filed or may be filed. - All cases between the same parties, except where the certification order
4. CERTIFIED CASES
1. CERTIFIED LABOR
DISPUTES.
“Certified labor disputes” are national interest cases certified by the DOLE Secretary to the
Commission (NLRC) for compulsory arbitration under Article 263(g) of the Labor Code.
2. EFFECTS OF CERTIFICATION OF LABOR DISPUTES.
specifies otherwise the issues submitted for arbitration which are already filed or may be filed,
and are relevant to or are proper incidents of the certified case, shall be considered subsumed
or absorbed by the certified case, and shall be decided by the appropriate Division of the
Commission.
(4) On other pending cases. - The parties to a certified case, under pain of contempt, shall
inform their counsels and the Division concerned of all cases pending with the Regional
Arbitration Branches and the Voluntary Arbitrators relative or incident to the certified case
before it.
(5) On which Division should take cognizance of the certified case in case entity has
several workplaces in different regions. - Whenever a certified labor dispute involves a
business entity with several workplaces located in different regions, the Division having
territorial jurisdiction over the principal office of the company shall acquire jurisdiction to
decide such labor dispute; unless the certification order provides otherwise.
Same effect of certification to the NLRC as in cases assumed directly by DOLE

Secretary.
The effects described above are also applicable when the DOLE Secretary directly assumes
jurisdiction over a labor dispute affecting industries imbued with national interest and decides
it himself.
C.
BUREAU OF LABOR RELATIONS
– MED-ARBITERS
1. MED-ARBITER OR MEDIATOR-ARBITER.
“Med-Arbiter” or “Mediator-Arbiter” refers to an officer in the Regional Office or in the BLR

authorized to hear and decide representation cases, inter-union or intra-union disputes and
other related labor relations disputes, except cancellation of union registration cases.
Some principles on Med-Arbiter.
Injunctive power. The Med-Arbiter is possessed of the power to issue temporary restraining
order and the writ of injunction in appropriate cases.
Contempt power. The Med-Arbiter has contempt power.
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Factual findings of Med-Arbiters are accorded great respect. They are binding if
they are supported by substantial evidence and there exists no capricious exercise of
judgment warranting reversal by certiorari.
Execution of decisions, orders or awards of Med-Arbiters. The Med-Arbiter may, upon

his own initiative or on motion of any interested party, issue a writ of execution on a judgment
within five (5) years from the date it becomes
final and executory, requiring the Sheriff or a duly deputized officer to execute or enforce the
same.
1. JURISDICTION
(ORIGINAL AND APPELLATE)
I.
CASES FALLING UNDER THE JURISDICTION OF THE MED-ARBITERS, DOLE

DIRECTORS AND BLR DIRECTOR, IN GENERAL
1. INTRODUCTION.
For
1. purposes of clarity
INTER-UNION OR in the otherwise labyrinthine issue of jurisdiction
REPRESENTATION and procedure in the
DISPUTES.
BLR, there is a need to cite first the cases over which the following officials have their
respective jurisdictions:
An “inter-union dispute” or “representation dispute” is one occurring or carried on between or among unions. It refers to
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a case involving a petition for certification election filed by a duly registered labor organization which is seeking to be
(1) Mediator-Arbiter
recognized (Med-Arbiter);
as the sole and exclusive bargaining (2) DOLE
agent of Regionalemployees
the rank-and-file Director;
or and (3) employees,
supervisory BLR Director.
as the case
may be, in the appropriate bargaining unit of a company, firm or establishment.
Broadly, an “inter-union dispute” refers to any conflict between and among legitimate labor unions involving
The Mediator-Arbiter
representation and ofthe
questions for purposes DOLE
collective Regional
bargaining Director
or to any other conflict orexercise original
dispute between and
legitimate exclusive
labor unions.
jurisdiction over specified cases mentioned below. For his part, the BLR Director exercises
not only appellate
2. INTRA-UNION but original
OR INTERNAL UNIONjurisdiction
DISPUTES. over some particular cases.
2. CASES COVERED.
There are three (3) general classifications of the cases covered by the jurisdiction of
said officials, to wit: (a) Inter-union disputes;
(b) Intra-union disputes; and
(c) Other related labor relations disputes.
I-A.
INTER-UNION OR INTRA-UNION DISPUTES
An “intra-union dispute” or “internal union dispute” refers to a conflict within or inside a labor
union. It is any conflict between and among union members, including grievances arising from
any violation of the rights and conditions of membership, violation of or disagreement over
any provision of the union’s constitution and by-laws or disputes arising from chartering or
affiliation of a union. It refers to a case involving the control, supervision and management of
the internal affairs of a duly registered labor union such as those relating to specific violations
of the union’s constitution and by-laws.
A complaint for any violation of the constitution and by-laws and the rights and conditions of
union membership under
Article 241 of the Labor Code, may be filed in the Regional Office where the union is
domiciled.
3. RUNDOWN OF INTER-UNION/INTRA-UNION CASES.
The following is a rundown of all possible inter-union/intra-union disputes:
1) Inter-union disputes:
(a) Validity/invalidity of voluntary recognition, certification election, consent election, run-off

election or re-run election;
(b) Such other disputes or conflicts involving the rights to self-organization, union
membership and collective bargaining between and among legitimate labor organizations.
2) Intra-union disputes:
(a) Conduct or nullification of election of officers of unions and workers' association;

(b) Audit or accounts examination of union or workers' association funds;
(c) Deregistration of collective bargaining agreements; (d) Validity/invalidity of union

affiliation or disaffiliation;
(e) Validity/invalidity of acceptance/non-acceptance for union membership;
(f) Opposition to application for union or CBA registration;
(g) Violations of or disagreements over any provision of the Constitution and By-Laws of a
union or workers' association;
(h) Disagreements over chartering or registration of labor organizations or the registration of

collective bargaining agreements;
(i) Violations of the rights and conditions of membership in a union or workers' association;
(j) Violations of the rights of legitimate labor organizations, except interpretation of CBAs;
(k) Validity/Invalidity of impeachment/expulsion/suspension or any disciplinary action meted

against any officer and
member, including those arising from non-compliance with the reportorial requirement;
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(l) Such other disputes or conflicts involving the rights to self-organization, union
membership and collective
bargaining between and among members of a union or workers’ association.
1-B.
OTHER RELATED LABOR RELATIONS DISPUTES
1. MEANING OF “RELATED LABOR RELATIONS DISPUTES.”
“Related labor relations dispute” refers to any conflict between a labor union and the employer
or any individual, entity
or group that is not a labor union or workers’ association.
2. COVERAGE OF RELATED LABOR RELATIONS DISPUTES NOT OTHERWISE COVERED

BY ARTICLE 217.
(a) Any conflict between:
(1) a labor union and the employer, or
(2) a labor union and a group that is not a labor organization; or
(3) a labor union and an individual who is not a member of such union;
(b) Cancellation of registration of unions and workers associations filed by individuals other
than its members, or group that is not a labor organization; and
(c) A petition for interpleader involving labor relations.
“Interpleader” refers to a proceeding brought by a party against two or more parties with
conflicting claims, compelling the claimants to litigate between and among themselves their
respective rights to the claim, thereby relieving the party so filing from suits they may
otherwise bring against it.
II.
ORIGINAL AND EXCLUSIVE JURISDICTION OF MED-ARBITERS, DOLE DIRECTORS

AND BLR DIRECTOR
Having known the various cases afore-described, a discussion of the respective jurisdictions of
the Med-Arbiters, DOLE Directors and BLR Director over these cases may now be made with
greater clarity.
1. ORIGINAL AND EXCLUSIVE JURISDICTION OF THE MED-ARBITERS.
The cases falling under the original and exclusive jurisdiction of the Med-Arbiters are as
follows: (a) Inter-union disputes, also known as representation/certification election
conflicts;
(b) Intra-union disputes;
On No. 3 [Examination of Books of Accounts] above, there is a need to point out that
although by nature, this is an intra-union dispute, the rules treat this separately from those
applicable to intra-union disputes and vest jurisdiction thereover in the DOLE Regional
Directors and not in the Med-Arbiters.
The case in point is La Tondena Workers Union vs. Secretary of Labor. Intra-union
conflicts such as examinations of accounts are under the jurisdiction of the BLR. However, the
Rules of Procedure on Mediation-Arbitration purposely and expressly separated or
distinguished examinations of union accounts from the genus of intra-union conflicts and
provided a different procedure for the resolution of the same. Original jurisdiction over
complaints for examinations of union accounts is vested in the Regional Director and appellate
jurisdiction over decisions of the former is lodged with the BLR. This is appar ent from
Sections 3 and 4, Rule II of the Med-Arbitration Rules. Contrast these two sections from
Section 2 and Section 5 of the same Rules. Section 2 expressly vests upon Med-Arbiters
original and exclusive jurisdiction to hear and decide, inter alia, all other inter-union or
internal union disputes. Section 5 states that the decisions of the Med-Arbiter shall be
appealable to the DOLE Secretary. These are the provisions consistent with Section 5 of Rule
VIII of the Implementing Rules of the Labor Code.
3. ORIGINAL AND EXCLUSIVE JURISDICTION OF THE BLR DIRECTOR.
At the outset, it must be stressed that reference in the law and pertinent rules to “BLR”, as far
as the issue of
jurisdiction is concerned, should rightfully mean “BLR Director.”
The BLR Director, therefore, as head of the agency, has the original and exclusive
jurisdiction over the following:
(1) Complaints and petitions involving the registration or cancellation of registration of

federations, national unions, industry unions, trade union centers and their local
chapters, affiliates and member organizations;
(2) Request for examination of books of accounts of said labor organizations

(federations, national unions, industry unions and trade union centers) under Article
274 of the Labor Code;
(3) Intra-union disputes involving said labor organizations (federations, national

unions, industry unions and
trade union centers); and
(4) Contempt cases.
As far as No. 3 [Intra-Union Disputes] above is concerned, the 2010 case of Atty. Montaño
v. Atty. Verceles,1 is relevant. Petitioner here claimed that under the Implementing Rules, it
is the Regional Director of the DOLE and not the BLR who has jurisdiction over intra-union
disputes involving federations which, in this case, pertains to the election protests in
connection with the election of officers of the federation (Federation of Free Workers [FFW]).
In finding no merit in petitioner’s contention, the
1 G.R. No.
168583, July 26,
2010. 119
(c) Other related labor relations disputes; and
(d) Contempt cases.
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Excepted from their jurisdiction is cancellation of union registration cases which are cognizable by the DOLE
Regional Directors.
2. ORIGINAL AND EXCLUSIVE JURISDICTION OF THE DOLE REGIONAL DIRECTORS.
The cases falling under the original and exclusive jurisdiction of the DOLE Regional Directors are as follows:
(1) Petitions for cancellation of registration of independent unions, local chapters and workers’ associa ions;
(2) Petitions for deregistration of CBAs;
(3) Request for examination of books of accounts of said labor organizations under Article 274 of the Labor Code.
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High Court pointed out that Article 226 of the Labor Code clearly provides that the BLR and
the Regional Directors of DOLE have concurrent jurisdiction over inter-union and intra-union
disputes. Such disputes include the conduct or nullification of election of union and workers’
association officers. There is, thus, no doubt as to the BLR’s jurisdiction over the instant
dispute involving member-unions of a federation arising from disagreement over the
provisions of the federation’s constitution and by-laws. It agreed with the following
observation of the BLR:
“Rule XVI lays down the decentralized intra-union dispute settlement mechanism. Section 1
states that any complaint in this regard ‘shall be filed in the Regional Office where the union is
domiciled.’ The concept of domicile in labor relations regulation is equivalent to the place
where the union seeks to operate or has established a geographical presence for purposes of
collective bargaining or for dealing with employers concerning terms and conditions of
employment.
“The matter of venue becomes problematic when the intra-union dispute involves a
federation, because the geographical presence of a federation may encompass more than one
administrative region. Pursuant to its authority under Article 226, this Bureau exercises
original jurisdiction over intra-union disputes involving federations. It is well-settled that FFW,
having local unions all over the country, operates in more than one administrative region.
Therefore, this Bureau maintains original and exclusive jurisdiction over disputes arising from
any violation of or disagreement over any provision of its constitution and by- laws.”
II.
APPELLATE JURISDICTION OF THE BLR DIRECTOR
1. CASES FALLING UNDER THE APPELLATE JURISDICTION OF THE BLR DIRECTOR.
The BLR Director exercises exclusive appellate jurisdiction over the following cases: Bar
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(a) All decisions of the Med-Arbiters in (1) intra-union disputes, and (2) other related labor
relations disputes.
that of organized establishments.

NOTE: Decisions in inter-union disputes or representation/certification election conflicts, are
NOT
(a) Rule on appeal in unorganized establishments. - The order granting the conduct of a certification election in an
appealable unorganized
to the BLRestablishment
Director but is not subject to
directly toappeal.
the DOLEAny issue arising from
Secretary. its conduct
[See or from its
discussion results is
below].
proper subject of a protest. Appeal may only be made to the DOLE Secretary in case of denial of the petition
within ten (10) days from receipt of the decision of denial.
(b) All decisions originating from the DOLE Regional Directors in the cases falling under their
original jurisdiction as enumerated
(b) Rule on appeal above.
in organized establishments. - The order granting the conduct of a certification election in an
organized establishment and the decision dismissing or denying the petition may be appealed to the DOLE
2. APPELLATE JURISDICTION
Secretary OVER
within ten (10) days from receipt MED-ARBITER’S
thereof. DECISIONS IN INTER-UNION
DISPUTES OR CERTIFICATION ELECTION CASES IS LODGED WITH THE DOLE
SECRETARY AND NOT WITH THE BLR DIRECTOR.
To reiterate, decisions of Med-Arbiters in certification election cases or inter-union disputes

are appealable not to the
BLR Director but directly to the DOLE Secretary by virtue of Article 259 of the Labor Code.
It must be noted that the rule on appeal in certification election cases in unorganized
establishments is different from
3. APPEALS AND REMEDIES FROM DECISIONS OF THE BLR DIRECTOR. a.

Jurisdictional distinctions.
The distinctions pointed out above between the respective jurisdictions of the DOLE Regional
Directors, Med-Arbiters and the BLR Director find significance in determining which of the
cases may be appealed to the BLR Director and those that may be appealed to the DOLE
Secretary. Thus, the rule may be stated as follows:
(1) Decisions in cases cognizable by the BLR Director in the exercise of his original and
exclusive jurisdiction are
appealable to the DOLE Secretary;
(2) Decisions in cases cognizable by the Med-Arbiters in their original and exclusive
jurisdiction are appealable to the BLR Director with the single exception of decisions in
certification election or inter-union disputes which, as earlier emphasized, are directly
appealable to the DOLE Secretary as mandated under Article 259 of the Labor Code; and
(3) Decisions in cases cognizable by the DOLE Regional Directors in their original and
exclusive jurisdiction are
appealable to the BLR Director.
b. Remedies.
(1) On No. 1 above. – The decision rendered by the DOLE Secretary in his appellate
jurisdiction may be elevated to the Court of Appeals by way of Rule 65 petition for certiorari.
(2) On Nos. 2 and 3 above. - The decisions rendered by the BLR Director in his
appellate jurisdiction may be elevated directly to the Court of Appeals by way of Rule 65
petition for certiorari. It cannot be appealed to the DOLE Secretary because they were
rendered by the BLR Director in the exercise of his appellate jurisdiction. Simply stated,
another appeal to the DOLE Secretary is not allowed under the situations contemplated in
Nos. 2 and 3 above, the decisions being final and executory.
4. EXAMPLES OF SPECIFIC CASES.
a. APPEALS FROM DENIAL OF APPLICATION FOR REGISTRATION AND

CANCELLATION OF REGISTRATION OF LABOR ORGANIZATIONS.
For purposes of appeal, the issue of union registration involves two (2) situations, to wit: (1)
Denial of application for union registration; and
(2) Revocation or cancellation of union registration.
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On denial of application for union registration.
(1) If the denial is made by the Regional Office in cases involving application for
registration of independent unions, local chapters and workers’ associations, the same
may be appealed to the BLR Director; or
(2) If the denial is made by the BLR Director in cases involving federations, national
unions, industry unions
and trade union centers, the same is appealable to the DOLE Secretary.
On revocation or cancellation of union registration.
(1) If decision is rendered by the Regional Director. - The decision of the Regional
Director in the cases over which he has original jurisdiction, may be appealed to the BLR
Director by any of the parties within ten (10) days from receipt thereof, copy furnished the
opposing party.
(2) If decision is rendered by the BLR Director. - The decision of the BLR Director, in
the exercise of his original jurisdiction, may be appealed to the DOLE Secretary by any party
within the same period of ten (10) days, copy furnished the opposing party.
5. EXCEPTION WHEN DOLE SECRETARY MAY ENTERTAIN APPEAL DIRECTLY

FROM THE DOLE REGIONAL
DIRECTOR’S DECISION WITHOUT PASSING THROUGH THE BLR DIRECTOR.
The Heritage Hotel Manila v. National Union of Workers in the Hotel, Restaurant and
Allied Industries-Heritage Hotel Manila Supervisors Chapter (NUWHRAIN-HHMSC).1
In this 2011 case, the Supreme Court allowed a deviation from the standing rule on the
appellate jurisdiction of the BLR Director over a decision of the DOLE Regional Director when
the BLR Director inhibited himself from taking cognizance of the appeal from the decision of
the DOLE Regional Director because he
was a former counsel of respondent. The DOLE Secretary may thus legally assume jurisdiction
over an appeal from the decision of the DOLE Regional Director in the event that the BLR
Director inhibits himself from the case. In the absence of the BLR Director, there is no
person more competent to resolve the appeal than the DOLE Secretary. Thus,
jurisdiction remained with the BLR despite the BLR Director’s inhibition. When the DOLE
Secretary resolved the appeal, she merely stepped into the shoes of the BLR Director and
performed a function that the latter could not himself perform. She did so pursuant to her
power of supervision and control over the BLR.
III.
ADMINISTRATIVE FUNCTIONS OF THE BLR AND LRDs
In addition to the afore-mentioned controversies over which they have concurrent original and
exclusive jurisdiction, the BLR and the Labor Relations Divisions (LRDs) in the DOLE Regional
Offices likewise have concurrent jurisdiction over the following administrative functions:
D.
NATIONAL CONCILIATION AND MEDIATION BOARD (NCMB)
1.
NATURE OF PROCEEDINGS
1. NCMB IS NOT A QUASI-JUDICIAL AGENCY.
NCMB is not a quasi-judicial agency, according to the 2009 case of Tabigue v.

International Copra Export
Corporation. 2
“Quasi-judicial function” is a term which applies to the action, discretion, etc. of public
administrative officers or bodies, who are required to investigate facts or ascertain the
existence of facts, hold hearings, and draw conclusions from them as a basis for their official
action and to exercise discretion of a judicial nature.
2. NOT BEING A QUASI-JUDICIAL AGENCY, NCMB’S RULINGS CANNOT BE ELEVATED

TO, AND COGNIZABLE BY, THE
COURT OF APPEALS.
Rule 43 of the Rules of Court applies only to awards, judgments, final orders or resolutions of
or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions.
Hence, NCMB’s decision, not having been rendered by a quasi-judicial body, cannot be
elevated to the Court of Appeals under said rule.
2.
CONCILIATION VS. MEDIATION
1. CONCILIATION AND MEDIATION, MEANING.
Both the terms “conciliation” and “mediation” refer to a process whereby a third person usually
called Conciliator (in case of conciliation) or Mediator (in case of mediation), intervenes in a
dispute involving two or more conflicting parties for the purpose of reconciling their differences
or persuading them into adjusting or settling their dispute. The Conciliator or Mediator
normally does not make or render any decision, his role being confined to the functions afore-
described.
1 G.R. No.
178296, Jan. 12,
2011.
2 G.R. No. 121

183335, Dec. 23,
2009.
1. Registratio n of labor unions;
2. Keeping of registry of labor unions;
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3. Maintenance and custody of the files of Collective Bargaining Agreements (CBAs) and other related agreements.
4. Records of settlement of labor disputes; and
5. Copies of orders and decisions of Voluntary Arbitrators.
It must be noted that it is the registration of the labor organization with the BLR and not with the Securities
and Exchange Commission (SEC) which makes it a legitimate labor organization with rights and privileges granted
under the Labor Code.
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3. DISTINCTION BETWEEN CONCILIATION AND MEDIATION.
Generally, there are no marked distinctions between conciliation and mediation. The reason is that
In both cases, a neutral third party (called Conciliator or Mediator) is tasked to assist two or
more opposing parties in finding appropriate resolution to a dispute.
In the NCMB, the hearing officer is called Conciliator-Mediator. There is no separate

classification between conciliators and mediators. When the Conciliator-Mediator performs his
task, he does not make any distinction when he is acting as Conciliator or as Mediator.
In other jurisdictions, the principal distinction between conciliation and mediation lies
on the extent of the power and authority granted to the neutral third party.
In mediation, the Mediator normally facilitates a deliberation or discussion of the issues between
the parties. He may or may not offer any opinions on the strength and weaknesses of each party's
positions and arguments. Thus, mediation may be classified into two, namely:
1. Facilitative Mediation where the Mediator does not make or offer any opinion; or
2. Evaluative Mediation where the Mediator offers an opinion which is not binding on the
parties.
It bears stressing, however, that regardless of which of the 2 methods above is chosen, the
Mediator is not empowered to impose his will on the parties.
In conciliation, the Conciliator is given more power and authority in that he may not only offer
an opinion on the issues at hand but may actually make a binding opinion thereon provided the
parties stipulate in advance to this effect. His opinion is based on the facts and the law involved in
the controversy before him.
It may thus be observed that conciliation is more formal than mediation in the sense that the
Conciliator’s opinion, unlike the Mediator’s, may be binding on the parties, although it may be
merely temporary in character.
3. PREVENTIVE MEDIATION
1. PREVENTIVE MEDIATION AS A REMEDY.
“Preventive mediation,” as a remedy, is not found in the Labor Code. But under the law which
created the NCMB, it is expressly stated that one of its functions is to provide preventive
mediation to disputing parties.
The term “pr eventive mediation case” refers to the potential or brewing labo
the subject of a formal or
r dispute which is
informal request for www.chanroblesbar.com

conciliation and mediation assistance sought by either or both parties in order to remedy, contain or prevent
: www.chanroblesbar.com.ph
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its degeneration into a full blown dispute through amicable settlement.
The NCMB has the authority to convert a notice of strike/lockout filed by the union/employer into
a preventive mediation case under any of the following circumstances:
1. When the issues raised in the notice of strike/lockout are not strikeable in character.
2. When the party which filed the notice of strike/lockout voluntarily asks for the conversion.
3. When both parties to a labor dispute mutually agree to have it subjected to preventive
mediation proceeding.
Such authority is in pursuance of the NCMB’s duty to exert all efforts at mediation and conciliation
to enable the parties
to settle their dispute amicably and in line with the State policy of favoring voluntary modes of
settling labor disputes.
4. CONVERSION OF A NOTICE OF STRIKE OR NOTICE OF LOCKOUT INTO A PREVENTIVE

MEDIATION CASE RESULTS IN ITS DISMISSAL.
Once the notice of strike is converted into a preventive mediation case, the notice is deemed
dropped from the dockets as if no notice of strike has been filed. Since there is no more notice of
strike to speak about, any strike subsequently staged by the union after the conversion is deemed
not to have complied with the requirements of a valid strike and therefore illegal.
The same rule applies in the case of lockout by an employer.
5. RELEVANT CASES.
A case in point is Philippine Airlines, Inc. v. Secretary of Labor and Employment,1 where
the strike was declared
illegal for lack of a valid notice of strike in view of the NCMB’s conversion of said notice into a
preventive mediation case.
It is clear, according to San Miguel Corporation v. NLRC,2 that the moment the NCMB orders
the preventive mediation in a strike case, the union thereupon loses the notice of strike it had
filed. Consequently, if it still defiantly proceeds with the strike while mediation is on-going, the
strike is illegal.
1 G.R. No. 88210, Jan. 2 G.R. No. 119293, June 10, 2003.
23, 1991, 193 SCRA 223.
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2015 BAR EXAMS
E.
DOLE REGIONAL DIRECTORS
1. JURISDICTION
1. JURISDICTION OF THE DOLE REGIONAL DIRECTORS.
The DOLE Regional Directors have original and exclusive jurisdiction over the following cases:
(a) Labor standards enforcement cases under Article 128;
(b) Small money claims cases arising from labor standards violations in the amount not
exceeding P5,000.00 and not
accompanied with a claim for reinstatement under Article 129; (c) Occupational safety and
health violations;
(d) Registration of unions and cancellation thereof, cases filed against unions and other labor
relations related cases; (e) Complaints against private recruitment and placement agencies
(PRPAs) for local employment; and
(f) Cases submitted to them for voluntary arbitration in their capacity as Ex-Officio
Voluntary Arbitrators (EVAs)
under Department Order No. 83-07, Series of 2007.
I. The DOLE Regional Directors exercise original jurisdiction over the
LABOR following:
STANDARDS ENFORCEMENT CASES
(a) Cases involving inspection of establishments to determine compliance with labor standards (Visitorial Power); and
1. SUBJECT
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OF THE
(b) Cases involving VISITORIAL
issuance of complianceAND ENFORCEMENT
orders and POWERS:Power).
writs of execution (Enforcement THE ESTABLISHMENT
AND NOT THE EMPLOYEES THEREIN.
3. VISITORIAL POWER OF REGIONAL DIRECTORS UNDER ARTICLE 128(a).
The subject of the visitorial and enforcement powers granted to the DOLE Secretary or his
duly authorized representatives
Pursuant to their under
visitorial power under Article
Article 128(a), the 128
DOLE is the Directors
Regional establishment
shall have: which is under
inspection and not the employees thereof.
Consequently, any
(a) access awards records
to employer’s granted
andare not atconfined
premises any time ofto
theemployees who signed
day or night, whenever the complaint
work is being undertaken
inspection but are
therein; and equally applicable to all those who were employed by the
establishment concerned at the time the complaint was filed, even if they were not
signatories thereto. The reason is that the visitorial and enforcement powers are
relevant to, and may be exercised over, establishments, not over individual
employees thereof, to determine compliance by such establishments with labor
standards laws. Necessarily, in case of an award from such violation by the
establishment, all its existing employees should be benefited thereby. It must be
stressed, however, that such award should not apply to those who resigned, retired or ceased
to be employees at the time the complaint was filed.
2. ORIGINAL JURISDICTION.
(b) the right:
(1) to copy from said records;
(2) to question any employee and investigate any fact, condition or matter which may be
necessary to determine violations or which may aid in the enforcement of the Labor Code and
of any labor law, wage order, or rules and regulations issued pursuant thereto.
4. ENFORCEMENT POWER OF REGIONAL DIRECTORS UNDER ARTICLE 128(b).
The statutory basis of the authority of the DOLE Regional Directors to administer and enforce
labor standards is found in Article 128(b) of the Labor Code, as amended.
Pursuant thereto, the DOLE Regional Director, in cases where the employer-employee
relationship still exists, shall have the power:
a. to issue compliance orders to give effect to the labor standards provisions of the
Labor Code and other labor legislations based on the findings of labor employment and
enforcement officers or industrial safety engineers made in the course of inspection.
b. to issue writs of execution to the appropriate authority for the enforcement of their
orders, except in cases where the employer contests the findings of the labor employment
and enforcement officer and raises issues supported by documentary proofs which were not
considered in the course of inspection, in which case, the
contested case shall fall under the jurisdiction of the Labor Arbiter to whom it should be
endorsed by the Regional
Director.
c. to order stoppage of work or suspension of operations of any unit or department

of an establishment when non-compliance with the law or implementing rules and regulations
poses grave and imminent danger to the health and safety of workers in the workplace. Within
24 hours, a hearing shall be conducted to determine whether an order for the stoppage of
work or suspension of operations shall be lifted or not. In case the violation is attributable to
the fault of the employer, he shall pay the employees concerned their salaries or wages during
the period of such stoppage of work or suspension of operation.
d. to require employers, by appropriate regulations, to keep and maintain such

employment records as may be necessary in aid of his visitorial and enforcement powers
under the Labor Code.
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2015 BAR EXAMS
II.
SMALL MONEY CLAIMS CASES
1. JURISDICTION OVER CLAIMS NOT EXCEEDING P5,000.
The DOLE Regional Director has original jurisdiction over small money claims cases arising
from labor standards violations in the amount not exceeding P5,000.00 and not accompanied
with a claim for reinstatement under Article 129 of the Labor Code.
Article 129 contemplates the recovery of wages and other monetary claims and benefits,
including legal interest, owing to an employee or domestic worker or kasambahay, arising
from employer-employee relations provided the claim does not exceed P5,000.00.
2. REQUISITES FOR THE VALID EXERCISE OF JURISDICTION BY DOLE REGIONAL

DIRECTORS UNDER ARTICLE 129.
The following requisites must all concur, to wit:
(1) The claim is presented by an employee or domestic worker or kasambahay; (2) The
claimant, no longer being employed, does not seek reinstatement; and
(3) The aggregate money claim of the employee or domestic worker or kasambahay does
not exceed P5,000.00.
In the absence of any of the aforesaid three (3) requisites, the Labor Arbiters have
original and exclusive jurisdiction over all claims arising from employer-employee
relations, other than claims for employees’ compensation, social security, PhilHealth and
maternity benefits.
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CASES SUBMITTED TO REGIONAL DIRECTORS AND ASSISTANT REGIONAL
DIRECTORS FOR VOLUNTARY ARBITRATION IN THEIR CAPACITY AS EX-OFFICIO
VOLUNTARY ARBITRATORS (EVAs)
(d) Upon agreement of the parties, any other labor dispute may be submitted to the EVAs for voluntary arbitration.
1. JURISDICTION. F.
DOLE SECRETARY
1. POWERS OF THE DOLE SECRETARY.
As EVAs, the DOLE Regional Directors and their Assistants have jurisdiction over the following
cases: (a) All grievances
The DOLE arising
Secretary, being from
the head theDepartment
of the interpretation
of Labor or
andimplementation of theofCBA;
Employment, is possessed a number of
powers, some of which are mentioned in the syllabus, to wit:
(b) All grievances arising from the interpretation or enforcement of company personnel
policies 1.which remain
Visitorial and enforcement powers;
unresolved aftertoexhaustion
2. Power suspend/effectsof
of the grievance procedure;
termination;
(c) 3. Assumption
Cases referredof jurisdiction;
to them by the DOLE Secretary under the DOLE’s Administrative
Intervention for Dispute
Avoidance (AIDA) initiative (provided under DOLE Circular No. 1, Series of 2006); and
4. Appellate jurisdiction; and
5. Voluntary arbitration powers.
1.
VISITORIAL AND ENFORCEMENT POWERS
1. THREE (3) KINDS OF POWER UNDER ARTICLE 128.
Article 128 of the Labor Code, as amended, basically enunciates the three (3) kinds of power
which the DOLE Secretary and/or the Regional Directors, his duly authorized representatives,
may exercise in connection with the administration and enforcement of the labor standards
provisions of the Labor Code and of any labor law, wage order or rules and regulations issued
pursuant thereto.
The three (3) kinds of power are as follows:
1) Visitorial power:
2) Enforcement power: and
3) Appellate power or power of review.
2. WHO EXERCISE THE POWERS.
Nos. 1 and 2 above are exercised under the original jurisdiction of the DOLE Regional
Directors.
This has been earlier discussed under the separate topic of “VII. PROCEDURE AND
JURISDICTION, E. DOLE Regional
Directors, 1. Jurisdiction”, supra. Hence, the same will no longer be touched under the
instant topical discussion.
The appellate power in No. 3 above may only be exercised by the DOLE Secretary in respect
to any decision, order or award issued by the DOLE Regional Directors.
3. NATURE OF THE VISITORIAL AND ENFORCEMENT POWERS.
The visitorial and enforcement powers granted to the DOLE Secretary and the DOLE Regional
Directors who are his duly authorized representatives, are quasi-judicial in nature.
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2015 BAR EXAMS
4. IT IS THE REGIONAL DIRECTORS WHO HAVE ORIGINAL JURISDICTION TO

EXERCISE THE VISITORIAL AND ENFORCEMENT POWERS UNDER ARTICLES 37, 128
AND 274.
In the instances contemplated under Articles 37, 128 and 274, it is the DOLE Regional
Directors, the DOLE Secretary’s duly authorized representatives commonly referred to in these
three (3) articles, who have the original jurisdiction to exercise the visitorial power granted
therein.
5. THE ROLE OF THE DOLE SECRETARY IN THE EXERCISE OF VISITORIAL AND

ENFORCEMENT POWERS IS APPELLATE IN NATURE.
It is clear from the above disquisition that the original jurisdiction over the exercise of the
visitorial and enforcement powers belongs to the DOLE Regional Directors, as the duly
authorized representatives of the DOLE Secretary.
The role of the DOLE Secretary is confined to the exercise of his appellate jurisdiction over the
decisions, orders and awards of the DOLE Regional Directors in cases brought before them for
adjudication under Articles 128 and 274.
power.
2.
POWER TO SUSPEND
4. DISTINGUISHED EFFECTS
FROM DOLE OF TERMINATION
SECRETARY’S POWER OF ASSUMPTION OR CERTIFICATION IN NATIONAL INTEREST
CASES.
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1. GROUNDS.
a. Different power of the DOLE Secretary.
The DOLE ThisSecretary

power of the may
DOLE suspend the effects
Secretary granted of termination
under Article 277(b) should bepending resolution
distinguished of the
from his power dispute
to assume or
incertify
the labor
event of ainvolving
disputes prima industries
facie finding by the
indispensable appropriate
to the official
national interest of the263(g).
under Article DOLE Thebefore
followingwhom the
distinctions
dispute is pending that:
may be cited:
1. the termination may cause a serious labor dispute; and/or
2. the termination is in implementation of a mass lay-off.
2. RATIONALE FOR SUSPENDING THE EFFECTS OF TERMINATION.
The obvious purpose behind this rule is to bring the parties back to the status quo ante litem,
that is, their state of relationship prior to the termination. In this way, the workers will be
litigating the issue of the validity or legality of their termination on more or less equal footing
with the employer since they will be immediately reinstated and accordingly not be deprived
of their wages while the litigation is on-going.
3. REINSTATEMENT PENDING RESOLUTION OF THE TERMINATION DISPUTE.
Suspension of the effects of termination will necessarily result in the immediate reinstatement
of the terminated employees. An order of reinstatement pending resolution of the case may
thus be issued by the DOLE Secretary pursuant to this
First, the exercise of the power to suspend the effects of termination involves only the issue
of termination of employment which may cause a serious labor dispute or is in implementation
of a mass lay-off; while the power to assume or certify labor disputes is applicable to all labor
disputes, irrespective of the grounds therefor, provided such labor dispute s will cause or likely
to cause strikes or lockouts in industries indispensable to the national interest.
Second, the former requires the conduct of preliminary determination of the existence of
prima facie evidence that the termination may cause a serious labor dispute or is in
implementation of a mass lay-off to be conducted by the appropriate official of the DOLE
before whom the termination dispute is pending; while the latter does not require such
preliminary prima facie determination. In fact, prior notice and hearing are not required before
the DOLE Secretary may issue an assumption or certification order.
Third, the “serious labor dispute” contemplated under the former may or may not involve a
strike or lockout; while the
labor dispute referred to in the latter will cause or likely to cause a strike or lockout.
Fourth, the former may be exercised in cases of termination of employment for as long as
any of the two (2) grounds mentioned in Article 277(b) exists, irrespective of the nature of the
business of the employer; while the latter may only be exercised in industries indispensable to
the national interest.
Fifth, the remedy under the former is immediate reinstatement pending resolution of the
termination case; while in the latter, the remedy is the automatic return to work of the
strikers or locked-out employees, if the strike or lock-out is on-going at the time of the
issuance of the assumption/certification order or the enjoining of the strike or lockout, if one
has not taken place, pending the resolution of the issues raised in the notice of strike or
lockout.
3.
ASSUMPTION OF JURISDICTION
The DOLE Secretary is granted under Article 263(g) of the Labor Code, the extraordinary
police power of assuming jurisdiction over a labor dispute which, in his opinion, will cause or
likely to cause a strike or lockout in an industry indispensable to the national interest, or the
so-called “national interest” cases. Alternatively, he may certify the labor dispute to the
NLRC for compulsory arbitration.
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2015 BAR EXAMS
4.
APPELLATE JURISDICTION
I.
VARIOUS APPEALS TO THE DOLE SECRETARY UNDER THE LABOR CODE AND APPLICABLE
RULES
1. OFFICES FROM WHICH APPEALS MAY ORIGINATE.
Appeals to the DOLE Secretary may originate from any of the following offices: (1) DOLE Regional
Directors;
(2) Med-Arbiters;
(3) Director of the Bureau of Labor Relations (BLR); and
(4) Philippine Overseas Employment Administration (POEA).
2. CASES NOT APPEALABLE TO THE DOLE SECRETARY.
The following decisions, awards or orders are not appealable to the Office of the DOLE Secretary:
(1) Those rendered by Labor Arbiters that are appealable to the Commission (NLRC) which has
exclusive appellate jurisdiction thereover;
(2) Those rendered by the Commission (NLRC) since they can be elevated directly to the CA by
way of a Rule 65
certiorari petition;
(3) Those rendered by the BLR Director in the exercise of his appellate jurisdiction since they can
be brought directly to the CA under Rule 65 certiorari petition;
(4) Those rendered by DOLE Regional Directors under Article 129 of the Labor Code since they are
appealable to the
NLRC;
(5) Those issued by DOLE Regional Directors in their capacity as Ex-Officio Voluntary Arbitrators
(EVAs) since they can be brought directly to the CA under Rule 43 of the Rules of Court; and
(6) Those rendered by Voluntary Arbitrators which are appealable directly to the CA under Rule 43
of the Rules of
Court.
II.
APPEALS FROM DOLE REGIONAL DIRECTORS
Not all deci sions, awards or orders rendered by the DOLE Regional
1. CASES APPEALABLE TO DOLE SECRETARY.
Director s are appealable to the DOLE Secretary.
Only those issued in the following cases are so appealable:
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(a) Labor standards enforcement cases under Article 128;

(a) Decisions in small money claims cases arising from labor standards violations in the amount
not exceeding
P5,000.00 and not accompanied with a claim for reinstatement under Article 129 are appealable
to the NLRC;
(b) Decisions in cases submitted to DOLE Regional Directors for voluntary arbitration in their
capacity as Ex-Officio Voluntary Arbitrators (EVAs) under Department Order No. 83-07, Series of
2007 may be elevated directly to the Court of Appeals by way of a Rule 43 petition. This is so
because the DOLE Regional Directors, in so deciding, are acting as Voluntary Arbitrators; hence,
what should apply are the rules on appeal applicable to voluntary arbitration.
III.
APPEALS FROM DECISIONS OF
MEDIATORS-ARBITERS (MED-ARBITERS) AND BLR DIRECTOR
(NOTE: The discussion of this sub-topic is presented alongside the comments on the
topic of “VIII. PROCEDURE AND JURISDICTION, C. Bureau of Labor Relations – Med-
Arbiters, 1. Jurisdiction (Original and Appellate)”, supra)
V.
APPEALS FROM DECISIONS OF POEA
1. CASES APPEALABLE TO THE DOLE SECRETARY.
The decisions in the following cases rendered by the Philippine Overseas Employment
Administration (POEA) in its
original jurisdiction are appealable to the DOLE Secretary:
(a) Recruitment violations and other related cases. - All cases which are administrative in
character, involving or arising out of violation of rules and regulations relating to licensing
and registration of recruitment and employment agencies or entities, including refund of fees
collected from workers and violation of the conditions for the issuance of license to recruit
workers.
(b) Disciplinary action cases and other special cases which are administrative in character,
involving employers, principals, contracting partners and Filipino migrant workers.
It must be noted that the POEA ceased to have any jurisdiction over money claims of OFWs, or
those arising out of an employer-employee relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment including claims for actual, moral, exemplary
and other forms of damages. The jurisdiction over these claims was transferred to
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2015 BAR EXAMS
the Labor Arbiters of the NLRC by virtue of Section 10 of R.A. No. 8042, as amended. Hence,
appeals therefrom may be instituted to the Commission (NLRC).
5.
VOLUNTARY ARBITRATION POWERS
1.
AIDA.
a. New rule on voluntary arbitration by the DOLE Secretary.
A new form of dispute settlement by the DOLE Secretary was introduced by DOLE
Circular No. 1, Series of 2006.
Called Administrative Intervention for Dispute Avoidance (AIDA), this is a new

administrative procedure for the voluntary settlement of labor disputes in line with the
objectives of R.A. No. 9285, Executive Order No. 523 and the mandate of the DOLE to
promote industrial peace.
b. Nature of administrative intervention by DOLE Secretary.
This recourse is separate from the established dispute resolution modes of mediation,
conciliation
If the and arbitration under the Labor Code, tion
interven and is an
through alternative
AIDA to other
fails, either or both voluntary
parties may avail them
edies provided under the
modes of dispute resolution such as the voluntary submission of ofa the
selves dispute
rem to the Regional
Director for mediation, to the NCMB for preventive mediation, or to the intervention of a
Labor Code. Alternatively, the parties may submit their dispute to the Office of the DOLE Secretary for voluntary arbitration. Such
regional or local tripartite peace council for the same purpose.
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voluntary arbitration should be limited to the issues defined in the parties' submission to voluntary arbitration agreement and
should be decided on the basis of the parties' position papers and submitted evidence. The Office of the DOLE Secretary is
c.mandated
Parties who the
to resolve may request
dispute for
within sixty (60)DOLE Secretary’s
days from intervention.
the parties' submission of the dispute for resolution.
3. DOES THE DOLE SECRETARY ASSUME THE ROLE OF VOLUNTARY ARBITRATOR ONCE HE ASSUMES
Either or both the
JURISDICTION OVERemployer and the certified collective bargaining agent (or the representative
A LABOR DISPUTE?
of the employees where there is no certified bargaining agent) may voluntarily bring to the
Office ofInthe
the 2014
DOLE case of Philtrancothrough
Secretary, Service Enterprises,
a RequestInc. v. Intervention,
for Philtranco Workers any Union-Association
potential orofongoing
Genuine
dispute defined below.
Labor Organizations
1
(PWU-AGLO), this poser was answered in the negative. A notice of strike was filed by respondent union
d. Potential or on-going dispute.
A potential or on-going dispute refers to: (a) a live and active dispute;
(b) that may lead to a strike or lockout or to massive labor unrest; and
(c) is not the subject of any complaint or notice of strike or lockout at the time a Request for
Intervention is made.
2. VOLUNTARY ARBITRATION BY DOLE SECRETARY.
which, after failure of conciliation and mediation by the NCMB, was referred by the Conciliator-
Mediator to the Office of the DOLE Secretary who thereby assumed jurisdiction over the labor
dispute. The case was resolved by the Acting DOLE Secretary in favor of respondent union. A
motion for reconsideration was filed by petitioner company. The DOLE Secretary, however,
declined to rule on the motion citing a DOLE regulation, applicable to voluntary arbitration,
which provided that the Voluntary Arbitrators’ decisions, orders, resolutions or awards shall
not be the subject of motions for reconsideration. The DOLE Secretary took the position that
when he assumed jurisdiction over the labor dispute, he was acting as a Voluntary Arbitrator.
Petition er subsequently filed a Rule 65 certiorari petition with the CA. The CA, however,
dismissed petitioner company’s Rule 65 certiorari petition on the ground, among others, that
the decision of the DOLE Secretary, having been rendered by him in his capacity as Voluntary
Arbitrator, is not subject to a Rule 65 certiorari petition but to a Rule 43 petition for review
which properly covers decisions of Voluntary Arbitrators.
Before the Supreme Court, petitioner asserted that, contrary to the CA’s ruling, the case is not
a simple voluntary arbitration case. The character of the case, which involves an impending
strike by petitioner’s employees; the nature of petitioner’s business as a public transportation
company, which is imbued with public interest; the merits of its case; and the assumption of
jurisdiction by the DOLE Secretary – all these circumstances removed the case from the
coverage of Article 262, and instead placed it under Article 263, of the Labor Code. For its
part, respondent union argued that the DOLE Secretary decided the assumed case in his
capacity as Voluntary Arbitrator; thus, his decision, being that of a Voluntary Arbitrator, is
only assailable via a petition for review under Rule 43.
The Supreme Court, however, pronounced that:
“It cannot be said that in taking cognizance of NCMB-NCR CASE No. NS-02-028-07, the
Secretary of Labor did so in a limited capacity, i.e., as a voluntary arbitrator. The fact is
undeniable that by referring the case to the Secretary of Labor, Conciliator-Mediator Aglibut
conceded that the case fell within the coverage of Article 263 of the Labor Code; the
impending strike in Philtranco, a public transportation company whose business is imbued with
public interest, required that the Secretary of Labor assume jurisdiction over the case, which
he in fact did. By assuming jurisdiction over the case, the provisions of Article 263 became
applicable, any representation to the contrary or that he is deciding the case in his capacity as
a volunt ary arbitrator notwithstanding.”
Consequently, the Supreme Court reversed and set aside the CA ruling and reinstated the
case and directed the CA
“to resolve the same with deliberate dispatch.”
1 G.R. No. 180962, Feb. 26, 2014. Although this case involves a decision of the DOLE
Secretary, the principle enunciated herein equally applies to the NLRC.
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2015 BAR EXAMS
G. GRIEVANCE MACHINERY
AND VOLUNTARY ARBITRATION
1.
SUBJECT MATTER OF GRIEVANCE
1. GRIEVANCE OR GRIEVABLE ISSUE.
A “grievance” or “grievable issue” is any question raised by either the employer or the union
regarding any of the following issues or controversies:
1. The interpretation or application of the CBA;
2. The interpretation or enforcement of company personnel policies; or
3. Violation of any provisions of the CBA or company personnel policies.
4.
2. VALIDITY AND BINDING EFFECT OF DECISIONS OF GRIEVANCE COMMITTEE.
A member of the bargaining union who brought his grievable issue for resolution by the
Grievance Committee is bound by whatever disposition the latter may render thereon.
ELEVATION OF GRIEVANCE TO VOLUNTARY ARBITRATION
1. UNRESOLVED GRIEVANCES.
All grievances submitted to the grievance machinery which are not settled within seven (7)
calendar days from the date of their submission for resolution should automatically be referred
to voluntary arbitration prescribed in the CBA.
The various internal procedural steps or stages of resolving grievances under the grievance
machinery in a CBA should be fully exhausted before resort to voluntary arbitration may be
made. The 7-calendar day period is usually reckoned from the date of their submission for
resolution to the last step of the internal grievance machinery. Simply stated, only after
exhausting all the internal procedures and only after the lapse of this period that unsettled or
unadjusted grievances should automatically be referred to voluntary arbitration enunciated in
the CBA.
2. A PARTY IS NOT ALLOWED TO GO DIRECTLY TO COURT IN DISREGARD OF

VOLUNTARY ARBITRATION AFTER DECISION IS RENDERED BY GRIEVANCE
COMMITTEE.
1. VOLUNTARY ARBITRATION.
“Voluntary arbitration” refers to the mode of settling labor-management disputes in

which the parties select a competent, trained and impartial third person who is tasked to
decide on the merits of the case and whose decision is final and executory. It is a third-party
settlement of a labor dispute involving the mutual consent by the representatives of the
employer and the labor union involved in a labor dispute to submit their case for arbitration.
2. VOLUNTARY ARBITRATOR.
a. Who is a Voluntary Arbitrator?
A “Voluntary Arbitrator” refers to:
(1) any person who has been accredited by the National Conciliation and Mediation Board
(“NCMB” or “Board”) as such; or
(2) any person named or designated in the CBA by the parties as their Voluntary Arbitrator;
or
(3) one chosen by the parties with or without the assistance of the NCMB, pursuant to a
selection proc edure agreed
upon in the CBA; or
(4) one appointed by the NCMB in case either of the parties to the CBA refuses to submit to
voluntary arbitration. This term includes a panel of Voluntary Arbitrators.
3. VOLUNTARY ARBITRATOR ACTS IN QUASI-JUDICIAL CAPACITY.
Although not a part of a government unit or a personnel of the Department of Labor and
Employment, a Voluntary Arbitrator, by the nature of his functions, acts in a quasi-judicial
capacity. He is a means by which government acts, or by which a certain government act or
function is performed. He performs a state function pursuant to a governmental power
delegated to him under the Labor Code. The landmark case of Luzon Development Bank v.
Association of Luzon Development Bank
Employees,1 clearly declared that a Voluntary Arbitrator, whether acting solely or in
a panel, enjoys in law the status of a quasi-judicial agency.
1 G.R. No.
120319, Oct. 6,
1995. 128
Before a pa rty is allowed to seek the intervention of the court, it is a preco

uld have availed of all the
ndition that he sho
means of administrative processes afforded him. Hence, if a remedy within the administrative machinery can still be resorted to
Bar
by giving the administrative officer concerned every opportunity to decide on a matter that comes within his jurisdiction, then
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such remedy should be exhausted first before the court’s judicial power can be sought. The premature invocation of the court’s
judicial intervention is fatal to one’s cause of action.” Indeed, the underlying principle of the rule on exhaustion of
administrative remedies rests on the presumption that when the administrative body, or grievance machinery, is afforded a
chance to pass upon the matter, it will decide the same correctly.
2.
VOLUNTARY ARBITRATOR
2015 BAR EXAMS
(a) JURISDICTION
1. ORIGINAL AND EXCLUSIVE

JURISDICTION. a. In general.
The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have exclusive and original
jurisdiction over the following cases:
(1) Unresolved grievances arising from the interpretation or implementation of the collective
bargaining agreement
(CBA).
(2) Unresolved grievances arising from the interpretation or enforcement of company

personnel policies. (3) Violations of the CBA which are not gross in character.
(4) Other labor disputes, including unfair labor practices and bargaining deadlocks, upon
agreement of the parties. (5) National interest cases.
(6) Wage distortion issues arising from the application of any wage orders in organized
establishments.
(7) Unresolved grievances arising from the interpretation and implementation of the
Productivity Incentive Programs under R.A. No. 6971.
b. Rights disputes.
Nos. 1, 2 and 3 above, which are provided for under Article 261 of the Labor Code, are
commonly known as “rights disputes.” This kind of disputes contemplates the existence of a
CBA already concluded or, at any rate, a situation in which no effort is made to bring about a
formal change in its terms or to create a new one. The dispute relates either to the meaning
or proper application of a particular provision therein with reference to a specific situation or
to an omitted case. In the latter event, the claim is founded upon some incident of the
employment relation or asserted one, independent of those covered by the collective
agreement. In either case, the claim is to rights accrued and not merely to new ones created
for the future.
c. Interest disputes.
Bargaining deadlocks are often referred to as “interest disputes.” This kind of disputes
relates to disputes over the formation of collective agreements or efforts to secure them.
They arise where there is no such agreement or where it is sought to change the terms of one
and therefore the issue is not whether an existing agreement controls the controversy. They
look to the acquisition of rights for the future, not to assertion of rights claimed to have
vested in the past.
I.
certification to the NLRC of labor disputes affecting industries indispensable to the national
interest, also provides that “[b]efore or at any stage of the compulsory arbitration
process, the parties may opt to submit their dispute to voluntary arbitration.”
This means that even if the case has already been assumed by the DOLE Secretary or certified
to the NLRC for compulsory arbitration, or even during its pendency therewith, the parties
thereto may still withdraw the case from the DOLE Secretary or NLRC, as the case may be,
and submit it to a Voluntary Arbitrator for voluntary arbitration purposes.
V.
JURISDICTION OVER WAGE DISTORTION CASES
Jurisdiction over wage distortion cases depends on whether the establishment is

organized or unorganized.
In organized establishments, the employer and the union are required to negotiate to
correct the wage distortion. Any dispute arising from such wage distortion should be resolved
through the grievance procedure under the CBA and if it remains unresolved, through
voluntary arbitration.
In unorganized establishments, where there are no CBAs or recognized or certified

collective bargaining unions, the jurisdiction is with the Labor Arbiter.
VI.
EXERCISE OF JURISDICTION
1. HOW VOLUNTARY ARBITRATOR ACQUIRES JURISDICTION.
The Voluntary Arbitrator or panel of Voluntary Arbitrators shall exercise jurisdiction over a
specific case only under the
followin
g:
(1) Upon receipt of a Submission Agreement duly signed by both parties;
(2) Upon receipt of a Notice to Arbitrate when there is refusal to arbitrate by one
party;
(3) Upon receipt of an appointment or designation as Voluntary Arbitrator by the

NCMB (Board) in either of the following circumstances:
(3.1.) In the event that the parties failed to select a Voluntary Arbitrator; or
(3.2.) In the absence of a named Voluntary Arbitrator in the CBA and the party upon
whom the Notice to Arbitrate is served does not favorably reply within seven (7) days
from receipt of such notice.
129
III.
JURISDICTION OVER OTHER LABOR DISPUTES
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Under Article 262 of the Labor Code, upon agreement of the parties, the Voluntary Arbitrator or panel of Voluntary
Arbitrators may also hear and decide all other labor disputes, including unfair labor practices and bargaining deadlocks.
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For this purpose, before or at any stage of the compulsory arbitration process, parties to a labor dispute may agree to submit
their case to voluntary arbitration.
IV.
JURISDICTION OVER NATIONAL INTEREST CASES
Article 263(g) of the Labor Code which involves the DOLE Secretary’s power of assumption of jurisdiction or
2015 BAR EXAMS
2. HOW INITIATED.
Based on the foregoing discussion, an arbitration may be initiated either by way of: (1) A
Submission Agreement; or
(2) A Demand or Notice to Arbitrate invoking the arbitration clause in the CBA; or
(3) An Appointment from the NCMB.
A “Submission Agreement” refers to a written agreement by the parties submitting their case
for arbitration, containing a statement of the issues, the name of their chosen Voluntary
Arbitrator and a stipulation and an undertaking to abide by and comply with the resolution
that may be rendered therein, including the cost of arbitration.
A “Notice to Arbitrate” refers to a formal demand made by one party to the other for the
arbitration of a particular dispute in the event of refusal by one party in a CBA to submit the
same to arbitration
3. SOME PRINCIPLES.
1) Cases cognizable by Voluntary Arbitrators in their original jurisdiction but

filed with Labor Arbiters, DOLE Regional Offices or NCMB should be disposed of by
referring them to the Voluntary Arbitrators or panel of Voluntary
EXECUTION Arbitrators mutually chosen
PROCEEDINGS
by the parties.
IN VOLUNTARY ARBITRATION CASES
Bar
2)
1. PROCEDURAL
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Cases cognizable
RULES IN THE by Voluntary
ENFORCEMENT OFArbitrators
WRIT OF EXECUTION.but filed with regular courts should
be dismissed.
In the enforcement of a writ of execution, the Sheriff or other authorized officer should be guided by the Procedural
3) THE
Guidelines WELL-ENTRENCHED
in the RULE
Execution of Voluntary Arbitration IS THAT WHEN
Awards/Decisions. A CASEshould
These Guidelines DOES NOT INVOLVE
be followed THE
in the execution of
PARTIES
the awards orTO A CBA
decision – THE
of Voluntary EMPLOYER
Arbitrators or panel of AND THE
Voluntary BARGAINING
Arbitrators. Other rules thatUNION - IT IS
may be pertinently NOT
observed
SUBJECT TOtheVOLUNTARY
and followed are following: ARBITRATION. While individual or group of employees,
without the participation of the union, are granted the right to bring grievance
directly to the employer, they cannot submit the same grievance, if unresolved by
the employer, for voluntary arbitration without the union’s approval and
participation. The reason is that it is the union which is the party to the CBA, and not
the individual or group of employees. - This rule was lately affirmed in the 2009 case of
Tabigue v. International Copra Export Corporation. Pursuant to Article 260 of the Labor
Code, the parties to a CBA shall name or designate their respective representatives to the
grievance machinery and if the grievance is unsettled in that level, it shall automatically be
referred to the voluntary arbitrators designated in advance by parties to a CBA. Consequently
only disputes involving the union and the company shall be referred to the grievance
machinery or voluntary arbitrators.”
(b) PROCEDURE
(1) 2012 NLRC Sheriffs’ Manual on Execution of Judgment;
(2) Memorandum of Agreement between the NLRC and the NCMB dated July 26, 1996; and
(3) Revised Rules of Court, as amended, in the absence of applicable rules.
2. EXECUTION MOTU PROPRIO OR UPON MERE MOTION WITHIN FIVE (5) YEARS
FROM FINALITY OF DECISION.
The Voluntary Arbitrator or panel of Voluntary Arbitrators may, motu proprio or on motion of
any interested party, issue a writ of execution on a judgment within five (5) years from the
date it becomes final and executory.
3. WHEN LABOR ARBITER MAY ISSUE THE WRIT OF EXECUTION.
In case the Voluntary Arbitrator or panel of Voluntary Arbitrators who rendered and issued the
decision, order or award is, for any reason, absent or incapacitated, the Labor Arbiter in the
region where the movant resides, may issue the writ of execution. But unlike the
Voluntary Arbitrator or panel of Voluntary Arbitrators who issued the decision, order or award,
the Labor Arbiter cannot issue such writ motu proprio but only upon motion of any interested
party.
4. PERSONS WHO MAY ENFORCE THE WRIT OF EXECUTION.
Any of the following persons may be required to enforce the writ of execution: (1) The Sheriff
of the Commission (NLRC);
(2) A duly deputized officer;
(3) A Special Sheriff;
(4) The Sheriff of the regular courts; or
(5) Any public official whom the parties may designate in the submission agreement to
execute the final decision, order or award.
(c) REMEDIES
1. RELIEFS AND REMEDIES THAT MAY BE GRANTED BY VOLUNTARY ARBITRATORS.
Besides the procedural remedies discussed above, the Voluntary Arbitrator or panel of
Voluntary Arbitrators may grant the same reliefs and remedies granted by Labor Arbiters
under Article 279 of the Labor Code, such as:
(1) In illegal dismissal cases: (a) Actual reinstatement;
(b) Separation pay in lieu of reinstatement, in case reinstatement becomes

impossible, non-feasible or
impractical;
(c) Full backwages;
130
2015 BAR EXAMS
(d) Moral and exemplary damages; and
(e) Attorney’s fees.
(2) Monetary awards in monetary claims cases in which case, the decision should
specify the amount granted and the formula used in the computation thereof.
H.
COURT OF APPEALS
1.
RULE 65, RULES OF COURT
1. RULE 65 PETITION FOR CERTIORARI, THE ONLY MODE OF ELEVATING A LABOR

CASE TO THE COURT OF APPEALS.
The only mode by which a labor case decided by any of the following labor
authorities/tribunals may reach the Court of
Appeals is through a Rule 65 petition for certiorari.
(a) theThe
DOLEreason
Secretary; for this rule is that in labor cases, a motion for
reconsider ation is the plain and adequate remedy
(b) the Commission (NLRC); and
from an adverse decision of the DOLE Secretary, the NLRC and the BLR Director.
(c)
appellate
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the Director of the Bureau of Labor Relations (BLR) in cases decided by him in his
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THE PHILTRANCO DOCTRINE: a motion for reconsideration should be filed even though it is not required or
evenjurisdiction (asconcerned
prohibited by the distinguished from
government those
office. hethedecides
This was in his
rule enunciated original
in the 2014 case jurisdiction
of Philtranco
which are appealable
Service to the
Enterprises, Inc. DOLE Secretary).
v. Philtranco Workers Union-Association of Genuine Labor Organizations (PWU-
1
AGLO). Thus, while a government office may prohibit altogether the filing of a motion for reconsideration with respect
to its decisions or orders, the fact remains that certiorari inherently requires the filing of a motion for reconsideration
The remedy
which of ordinary
is the appeal to
tangible representation theopportunity
of the Court of Appeals
given is not
to the office available
to correct fromit their
itself. Unless is filed,decisions,
there could
be awards.
orders or no occasionTheto rectify.
reason Worse, the remedy
for this of that
rule is certiorari would
their be unavailing.
decisions, Simplyorput,awards
orders regardless areof final
the
and executory and therefore inappealable.
2. THE ONLY EXCEPTION.
The only exception to the foregoing rule is in the case of decisions, orders or awards issued by
the Voluntary Arbitrator or panel of Voluntary Arbitrators which may be elevated to the
Court of Appeals by way of an ordinary appeal under a Rule 43 petition for review.
3. FILING OF MOTION FOR RECONSIDERATION OF THE DECISION OF THE DOLE

SECRETARY, THE COMMISSION (NLRC) OR THE BLR DIRECTOR, A PRE-REQUISITE TO
FILING OF RULE 65 PETITION FOR CERTIORARI.
The rule on the filing of a Motion for Reconsideration of the decision of the DOLE Secretary,
the NLRC and the BLR Director is mandatory and jurisdictional. Failure to comply therewith
would result in the dismissal of the Rule 65 certiorari petition. Jurisprudence abounds
enunciating the rule that a motion for reconsideration is a pre-requisite for the filing of a
special civil action for certiorari.
proscription against the filing of a motion for reconsideration, the same may be filed on the
assumption that rectification of the decision or order must be obtained and before a petition
for certiorari may be instituted.
4. CERTIORARI PETITION MAY BE FILED EVEN IF THE DECISION OF THE DOLE

SECRETARY, THE COMMISSION (NLRC), OR THE BLR DIRECTOR HAS ALREADY
BECOME FINAL AND EXECUTORY.
This rule applies to the decisions rendered by the DOLE Secretary, the NLRC or the BLR
Director (in cases which he decided in his appellate jurisdiction).
If the CA grants the petition and nullifies their decisions on the ground of grave abuse of
discretion amounting to excess or lack of jurisdiction, such decisions are, in contemplation of
law, null and void ab initio; hence, they never became final and executory.
JUDICIAL REVIEW OF DECISIONS OF VOLUNTARY ARBITRATORS
1. DECISIONS, FINAL AND EXECUTORY.
As a general rule, decisions or awards of Voluntary Arbitrators are final, inappealable and
executory after ten (10)
calendar days from receipt of a copy thereof by the parties.
2. ORDINARY APPEAL UNDER RULE 43 OF THE 1997 RULES OF CIVIL PROCEDURE –

VOLUNTARY ARBITRATORS ARE OF THE SAME LEVEL AS RTC JUDGES.
Being a quasi-judicial agency, the decisions and awards of a Voluntary Arbitrator are
appealable by way of a petition for review to the Court of Appeals under Revised
Administrative Circular No. 1-95 which provides for a uniform procedure for appellate review
of all adjudications of quasi-judicial entities and which is now embodied in Section 1, Rule 43
of the 1997 Rules of Civil Procedure.
The ruling in Luzon Development Bank v. Association of Luzon Development Bank

Employees,2 in effect, equates the decisions or awards of the Voluntary Arbitrator to those
of the Regional Trial Court (RTC). Hence, in a petition for certiorari from the awards or
decisions of the Voluntary Arbitrator, the Court of Appeals has concurrent jurisdiction with the
Supreme Court.
1 G.R. No. 180962, Feb. 26, 2014. Although this case involves a decision of the DOLE
Secretary, the principle enunciated herein equally applies to the NLRC.
2 G.R. No. 120319, October 6, 1995.
131
2015 BAR EXAMS
In Alcantara, Jr. v. CA,1 it was held that Luzon Development Bank is still a good law.
3. PERIOD OF APPEAL – 15 DAYS.
Rule 43 of the Rules of Court requires that the petition for review to be taken to the Court of
Appeals should be filed within fifteen (15) days from notice of the award, judgment or final
order or resolution of the Voluntary Arbitrator.
I. SUPREME COURT
1.
RULE 45, RULES OF COURT
1. RULE 45 PETITION FOR REVIEW ON CERTIORARI, THE ONLY MODE BY WHICH A

LABOR CASE MAY REACH THE SUPREME COURT.
Since the Court of Appeals has jurisdiction over the petition for certiorari under Rule 65 that
may be filed before it from the decisions of the NLRC or the DOLE Secretary or the BLR
Director (in cases decided by him in his appellate jurisdiction), any alleged errors committed
by it in the exercise of its jurisdiction would be errors of judgment which are reviewable by
means of a timely appeal to the Supreme Court and not by a special civil action of certiorari.
If the aggrieved party fails to do so within the reglementary period and the decision
accordingly becomes final and executory, he cannot avail himself of the writ of certiorari, his
predicament being the effect of his deliberate inaction. A petition for certiorari under Rule
65 cannot be a substitute for a lost appeal under Rule 45; hence, it should be
dismissed.
2. THE NEYPES DOCTRINE (FRESH PERIOD RULE) - FRESH PERIOD FROM DENIAL OF
MOTION FOR RECONSIDERATION.
In the 2013 case of Elizabeth Gagui v. Dejero,2 petitioner successively filed two Motions
for Reconsideration of the CA’s decision but both were denied. Petitioner elevated the case to
the Supreme Court under Rule 45. In their comment, respondents alleged that the instant
petition had been filed 15 days after the prescriptive period of appeal under Section 2, Rule
45 of the Rules of Court. In her reply, petitioner countered that she has a fresh period of 15
days from the date she received the
Resolution of the CA to file the instant Rule 45 petition. In affirming the contention of
petitioner, the Supreme Court cited the en banc ruling in the case of Neypes v. CA3 which
standardized the appeal periods, thus:
“To standardize the appeal periods provided in the Rules and to afford litigants fair
opportunity to appeal their cases, the Court deems it practical to allow a fresh period of 15
days within which to file the notice of appeal in the Regional Trial Court, counted from receipt
of the order dismissing a motion for a new trial or motion for reconsideration.
J. PRESCRIPTION OF ACTIONS
1. MONEY CLAIMS
CASES.
a. Prescriptive period is three (3) years under Article 291 of the Labor Code. - The
prescriptive period of all money claims and benefits arising from employer-employee relations
is 3 years from the time the cause of action accrued; otherwise, they shall be forever barred.
b. All other money claims of workers prescribe in 3 years. - Article 291 contemplates all
money claims arising from employer-employee relationship, including:
1. Money claims arising from the CBA.
2. Incremental proceeds from tuition increases.
“Hencef of Overseas Filipino Workers (OFWs).

3. Money claims orth, this ‘fresh period rule’ shall also apply to Rule 40 governing
appe als from the Municipal Trial Courts to the
Note must be made that in the 2010 case of Southeastern Shipping v. Navarra, Jr.,4 the
Regional Trial Courts; Rule 42 on petitions for review from the Regional Trial Courts to the Court of Appeals; Rule 43 on
1-year prescriptive period in Section 28 of POEA-SEC was declared null and void. The
reason is that from
appeals
Supreme
Bar
ChanRobles
Article
Court. The
291 ofagencies
quasi-judicial
new rule
the Labor
aims to regiment
Codeof is
to the Court
or make the
the law
Appeals
appeal
and Rule
period
governing
45 governing
uniform, to be
the
counted
prescription
appeals
from
by certiorariof
receipt of the
to money
the
order
claims of seafarers, a class of overseas contract workers. This law prevails over said Section
denying the motion for new trial, motion for reconsideration (whether full or partial) or any final order or resolution.”
28.
Consequently, since petitioner in Gagui received the CA Resolution denying her two Motions for Reconsideration only
onILLEGAL
2. 16 March 2011, she had another
DISMISSAL 15 days within which to file her Petition, or until 31 March 2011. This Petition, filed on 30
CASES.
March 2011, fell within the prescribed 15-day period.
a. Legal basis is not Article 291 of the Labor Code but Article 1146 of the Civil Code.
- The 3-year prescriptive period in Article 291 solely applies to money claims but not to illegal
dismissal cases which are not in the nature of money claims. The prescriptive period of illegal
dismissal cases is 4 years under Article 1146 of the Civil Code.
3. UNFAIR LABOR PRACTICE (ULP) CASES.
a. Prescriptive period of ULP cases is 1 year (Article 290, Labor Code). - The
prescriptive period for all complaints involving unfair labor practices is one (1) year from the
time the acts complained of were committed; otherwise, they shall be forever barred.
1 G.R. No. 143397, Aug. 6, 2002.
2 G.R. No. 196036, Oct. 23, 2013.

3 G.R. No.
141524, Sept. 14,
2005.
4 G.R. No.
167678, June 22,
2010.
132
2015 BAR EXAMS
b. Pre-requisite for prosecution of criminal cases. - Before a criminal action for ULP
may be filed, it is a condition sine qua non that a final judgment finding that an unfair labor
practice act was committed by the respondent should first be secured or obtained in the
labor case initiated before the Labor Arbiter or the Voluntary Arbitrator, as the case may be.
Final judgment is one that finally disposes of the action or proceeding. For instance, if the
remedy of appeal is available but no appeal is made, then, the judgment is deemed final
and executory. If an appeal is made, then the final judgment rendered by the last tribunal,
say the Supreme Court, to which the case was elevated should be the reckoning factor.
c. Interruption of prescriptive period of offenses. - As far as ULP cases are concerned,

the running of the one (1)
year prescriptive period is interrupted during the pendency of the labor proceeding.
d. Evidentiary value of the final judgment in the labor case. - In ULP cases, the final
judgment in the labor case cannot be presented as evidence of the facts proven therein or
as evidence of the guilt of the respondent therein. Its evidentiary or probative value is
confined merely in proving the fact of compliance with the condition sine qua non prescribed
by law, i.e., that a final judgment has been secured in the labor proceeding finding that an
unfair labor practice act was in fact committed by the respondent.
4. OFFENSES PENALIZED UNDER THE LABOR CODE AND ITS IMPLEMENTING

RULES AND REGULATIONS (IRR).
a. Prescriptive period is 3 years (Article 290, Labor Code). - The prescriptive period of
all criminal offenses penalized under the Labor Code and the Rules to Implement the Labor
Code is three (3) years from the time of commission thereof.
which has submitted the financial report required under the Labor Code.
b. Consequence of non-compliance with prescriptive period under Article 290. -
Failure to initiate or file the criminal action or complaint within the prescriptive period shall
7. CLAIMSbar
forever FORsuch
SSS BENEFITS.
action.
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a. Action against employer.
c. Illegal dismissal is not an “offense” under Article 290. - The act of the employer in
dismissing antoemployee
The right without
institute the necessary cause,
action against although
the employer a
for violation ofof the
non-remittance Labormay
contributions Code and its
be commenced
implementing rules, does not amount to an “offense” as this term is understood and
within twenty (20) years:
contemplated under Article 290.
(1) from
5. ILLEGAL the time the delinquency
RECRUITMENT is known; or
CASES.
(2) from
a. Simple the time
illegal the assessment cases.
recruitment is made by–the SSS;
The or
prescriptive period is five (5) years.
(3) from the time the benefit accrues, as the case may be.
b. Illegal recruitment cases involving economic sabotage. – The prescriptive period is
twenty (20) years.
6. ACTIONS INVOLVING UNION FUNDS.
A complaint or petition for audit or examination of funds and books of accounts prescribes
within three (3) years:
(a) from the date of submission of the annual financial report to the DOLE; or
(b) from the date the same should have been submitted as required by law, whichever
comes earlier.
It should be noted, however, that this provision on the prescriptive period applies only to a
legitimate labor organization
b. Action for disability claims.
The prescriptive period in the filing of disability benefit claim is ten (10) years from the
date of occurrence of disability.
8. CLAIMS FOR GSIS BENEFITS.
Claims for benefits, except for life and retirement, prescribe after four (4) years from
the date of contingency.
------------oOo------------
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FUNDAMENTAL PRINCIPLES AND POLICIES

What are the significant constitutional principles related to Labor Law?

The following principles are noteworthy:

1. Under Article II (Declaration of Principles and State Policies):

2. Promotion of full employment, a rising standard of living, and an improved

3. Promotion of social justice in all phases of national development.

4. Full respect for human rights.

5. Vital role of the youth in nation-building.

6. Role of women in nation-building, and fundamental equality before the law of

7. Indispensable role of the private sector,

Under Article III (Bill of Rights):

a) Due process and equal protection of the law.

b) Freedom of speech, of expression, or of the press, or the right of the people

c) Right of the people to information on matters of public concern. Access to

d) Right of public and private sector employees to form unions, associations, or

e) Non-impairment of obligations of contracts.

f) Right to speedy disposition of cases in judicial, quasi-judicial or administrative

a. Protection-to-Labor Clause: VERY IMPORTANT

What are the due process principles applicable in termination of employment?

1. Constitutional due process is not applicable to termination of employment. This means

Is assistance of counsel in termination cases mandatory and indispensable?

NO, according to the 2011 case of Lopez v. Alturas Group of Companies:2

NEW CIVIL CODE

Article 1700 of the Civil Code provides:

2011 case of Leyte Geothermal Power Progressive Employees Union-ALU-TUCP v.

Article 1702 of the Civil Code provides:

Article 4 of the Labor Code states:

“Article 4. Construction in Favor of Labor. – All doubts in the implementation and

Both articles above may be applied to doubts and ambiguities in:

(1) labor contracts such as an employment contract or a CBA; or

(2) evidence presented in labor cases.

THE LABOR CODE

What is exclusive bargaining representative/agent?

“Exclusive bargaining representative” or “exclusive bargaining agent” refers to a legitimate

Can individual employee or group of employees bring grievable issues directly to

Can individual employee or group of employees bring grievable issues to

What is the principle of co-determination?

Does the grant of the right of participation mean co-management of business or

RECRUITMENT AND PLACEMENT

A. RECRUITMENT OF LOCAL AND MIGRANT WORKERS

I. RECRUITMENT AND PLACEMENT FOR LOCAL EMPLOYMENT

What is a “Private Recruitment and Placement Agency (PRPA)”?

What are the qualifications of a PRPA for local employment?

An applicant for a license to operate a PRPA must possess the following:

1. Must be a Filipino citizen, if single proprietorship. In case of a partnership or a

What is the period of validity of the license?

Is the license transferable to other persons or entities?

II. RECRUITMENT AND PLACEMENT FOR OVERSEAS EMPLOYMENT

What are the laws relevant to overseas employment?

1. The Labor Code; and

What are the important terms related to overseas employment?

2. “Overseas Filipino Worker or Migrant Worker” refers to a person who is to be

What are the entities authorized to engage in recruitment and placement of

The following are authorized to engage in recruitment and placement of workers:

a. Public employment offices;

LICENSING AND REGULATION FOR OVERSEAS RECRUITMENT AND PLACEMENT

What are the qualifications of a recruiter for overseas employment?

1. Filipino citizens, partnerships or corporations at least seventy five percent (75%)

2. A minimum capitalization of Two Million Pesos (P2,000,000.00) in case of a single

3. Those not otherwise disqualified by law or other government regulations to engage

a. Travel agencies and sales agencies of airline companies;

b. Officers or members of the Board of any corporation or members in a partnership

1) Those certified to have derogatory record or information by the NBI or by the