LABOR LAW REVIEW

First Semester, SY 2017 - 2018

ATTY. VON LOVEL D. BEDONA

Professor

CLASS DISCUSSION – JULY 18, 2017 (Second Part)

Article 219 (formerly 212) provides the definition of the terms

commonly used and applied in labor relations. There are, however,
important terms that cannot be found in this Article but are defined and
enumerated in the Amended Rules Implementing Book V of the Labor
Code. One of these is the Collective Bargaining Unit.

For a better understanding of the term “collective bargaining unit”,

the Supreme Court, in several cases, has provided the fundamental factors in
determining the appropriate collective bargaining unit and these are: (1) the
will of the employees (Globe Doctrine); (2) affinity and unity of the
employees' interest, such as substantial similarity of work and duties, or
similarity of compensation and working conditions (Substantial Mutual
Interests Rule); and (3) prior collective bargaining history, and similarity of
employment status. The existence of prior collective bargaining history is
neither decisive nor conclusive in the determination of what constitutes an
appropriate bargaining unit. (Mechanical Department of Labor Union Sa
Philippine National Railways v. Court of Industrial Relations, G.R. No. L-
28223, August 30, 1968, citing Globe Machine & Stamping Co., 3 NLRB
294) applied in Democratic Labor Union vs. Cebu Stevedoring Co., L-
10321, 28 February 1958)

Read and understand Articles 220 to Article 223 of the Labor Code.
These Articles pertain to the National Labor Relations Commission (NLRC)
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Article 224 of the Labor Code refers to the jurisdiction of Labor

Arbiters and the National Labor Relations Commission

Jurisprudential References

Claims arising from an employer – employee relationship are not

limited to claims by an employee. Employers may also have claims against
the employee, which arise from the same relationship.
In Bañez v. Valdevilla, the Supreme Court ruled that Article 217 (now
Article 224) of the Labor Code also applies to employers' claim for
damages, which arises from or is connected with the labor issue. Thus:
Whereas the Supreme Court in a number of occasions had applied the
jurisdictional provisions of Article 217 (now Article 224) to claims for
damages filed by employees, it hold that by the designating clause "arising
from the employer – employee relations" Article 217 (now Article 224)
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 counterclaim in the illegal dismissal case. (Emer Milan et al v.
NLRC and Solid Mills, G.R. No. 202961, February 4, 2015)

In addition to disputes enumerated in Article 224, the claims 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 shall fall
under the jurisdiction of the Labor Arbiter as provided in Section 10,
Republic Act 8042 as amended.

The provisions of the Constitution as well as the Labor Code that

afford protection to labor apply to Filipino employees whether working
within the Philippines or abroad. Moreover, the principle of lex loci
contractus (the law of the place where the contract is made) governs in this
jurisdiction. The Contract of Employment entered into and executed by and
between the parties here in the Philippines with the approval of the
Philippine Overseas Employment Administration (POEA). Hence, the Labor
Code together with its implementing rules and regulations and other laws
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affecting labor apply in this case. (Sameer Overseas Placement Agency, Inc.
vs. Joy C. Cabilles, G.R. No. 170139, August 5, 2014.)
Under Article 224, it is clear that a labor arbiter has original and
exclusive jurisdiction over termination disputes. On the other hand, under
Article 272, a voluntary arbitrator has original and exclusive jurisdiction over
grievances arising from the interpretation or enforcement of company
policies. As a general rule then, termination disputes should be brought
before a labor arbiter, except when the parties, under Art. 262 (now Article
273) unmistakably express that they agree to submit the same to voluntary
arbitration. (Negros Metal Corp. vs. Armelo J. Lamayo, G.R. No. 186557,
August 25, 2010)

However, if the disputes involving claims of Filipino seafarers

wherein the parties are covered by a collective bargaining agreement, the
dispute or claim should be submitted to the jurisdiction of a √voluntary
arbitrator or panel of arbitrators. It is only in the absence of a collective
bargaining agreement that parties may opt to submit the dispute to either the
NLRC or to voluntary arbitration. It is elementary that rules and regulations
issued by administrative bodies to interpret the law that they are entrusted to
enforce, have the force of law, and are entitled to great respect. Such rules
and regulations partake of the nature of a statute and are just as binding as if
they have been written in the statute itself. (Estate of Nelson R. Dulay vs.
Aboitiz Jebsen Maritime, Inc., et al., G.R. No. 172642, June 13, 2012)

In the decided case entitled Ma. Ana M. Tamonte, et al. vs. Hongkong
and Shanghai Banking Corp. Ltd., et al., G.R. No. 166970, August 17, 2011
the Supreme Court ruled:

As we said, petitioners were already in default in the payment of

their loan obligations; thus, foreclosure of the mortgage property
was resorted to by respondents. Respondents were only enforcing
the civil obligation of petitioners under their mortgage contract.
There is no labor aspect involved in the enforcement of petitioners'
obligation. In Hongkong and Shanghai Banking Corporation, Ltd.
Staff Retirement Plan (HSBC SRP) v. Spouses Broqueza, (G.R. No.
178610, November 17, 2010) which involved the dismissed co –
employees of herein petitioner Ana who were also unable to pay the
monthly amortizations of their respective loans, and despite HSBC
SRP's demand for them to pay their loan, they still failed to pay
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their loan obligations, We said, among others, that the enforcement

of a loan agreement involves debtor – creditor relations founded on
contracts and does not in any way concern employee relations.

To reiterate, respondent HSBC SRP and petitioners agreed in their

mortgage contract that HSBC SRP as mortgagee was authorized to
foreclose the mortgaged property in the event that the petitioners –
mortgagors failed to pay the sum of money secured by the
mortgage. After petitioners failed to pay upon demand, the civil
obligation of the petitioners under the mortgage contract must be
enforced to protect HSBC SRP's interest in the housing loan.

The Commission (NLRC) shall have exclusive appellate jurisdiction over

all cases decided by Labor Arbiters.

As a rule, labor arbiters and the National Labor Relations

Commission have no power or authority to grant reliefs from claims
that do not arise from employer – employee relations. They have no
jurisdiction over torts that have no reasonable causal connection to
any of the claims provided for in the Labor Code, other labor
statutes, or collective bargaining agreements.

While it is true that labor arbiters and the NLRC have jurisdiction
to award not only reliefs provided by labor laws, but also damages
governed by the Civil Code, these reliefs must still be based on an
action that has a reasonable causal connection with the Labor Code,
other labor statutes, or collective bargaining agreements. (Evelyn
Tolosa vs. NLRC, G.R. No. 149578, April 10, 2003)

Not every controversy or money claim by an employee against the

employer or vice – versa is within the exclusive jurisdiction of the
labor arbiter. A money claim by a worker against the employer or
vice – versa is within the exclusive jurisdiction of the labor arbiter
only if there is a "reasonable causal connection" between the claim
asserted and employee – employer relation. Absent such a link, the
complaint will be cognizable by the regular courts of justice.
Actions between employees and employer where the employer –
employee relationship is merely incidental and the cause of action
precedes from a different source of obligation is within the
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exclusive jurisdiction of the regular court. (Eduardo G. Eviota v.

Court of Appeals, G.R. No. 152121, July 29, 2003)

The pertinent provision of Article 2176 of the Civil Code that

governs quasi – delict provides that:
Whoever by act or omission causes damage to another, there being
fault or negligence, is obliged to pay for the damage done. Such
fault or negligence, if there is no pre – existing contractual relation
between the parties, is called quasi – delict.
Thus, to sustain a claim liability under quasi – delict, the following
requisites must concur: (a) damages suffered by the plaintiff; (b)
fault or negligence of the defendant, or some other person for
whose acts he must respond; and (c) the connection of cause and
effect between the fault or negligence of the defendant and the
damages incurred by the plaintiff. (INDOPHIL TEXTILE MILLS,
INC., petitioner, vs. ENGR. SALVADOR ADVIENTO, respondent,
G.R. No. 171212, August 4, 2014)
In Yusen Air and Sea Services Phils., Inc. v. Villamor the Supreme Court
held:
When the cause of action is based on a quasi – delict or tort, which has
no reasonable causal connection with any of the claims provided for in
Article 217 (now Article 224), jurisdiction over the action is with the
regular courts.
A labor arbiter may only take cognizance of a case and award
damages where the claim for such damages arises out of an
employer – employee relationship. (Ronilo Sorreda vs. Cambridge
Electronics Corp., G.R. No. 172927, February 11, 2010)

Article 225 refers to the Powers of the Commission (NLRC).

The NLRC can promulgate its own rules, issue temporary restraining
orders that are valid for twenty (20) days, issue preliminary injunction, hold any
person in contempt directly or indirectly and impose appropriate penalties
therefor in accordance with law. That the reception of evidence for the
application of a writ of injunction may be delegated by the Commission to any
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of its Labor Arbiters who shall conduct such hearings in such places as he may
determine to be accessible to the parties and their witnesses and shall submit
thereafter his recommendation to the Commission.

The NLRC has the power to decide case certified for compulsory
arbitration by the Secretary of Labor and Employment as provided in Article 277
(g) of the Labor Code. The decisions of the NLRC in certified cases cannot be
reviewed by the Secretary of Labor and Employment but can be brought to the
Court of Appeals via petition for certiorari under Rule 65 of the Rules of Court.

Technical rules are not binding the proceedings before the NLRC and the
Labor Arbiters.

In proceedings before the NLRC or a labor arbiter, technical rules of

procedure and evidence are not binding. Even under the revised rules of the
NLRC an expeditious procedure is provided for. Simplification of procedure,
without regard to technicalities of law or procedure and without sacrificing the
fundamental requisites of due process, is mandated to insure a speedy
administration of social justice. The Supreme Court construed Article 221 (now
Article 227) of the Labor Code as to allow the NLRC or a labor arbiter to decide
a case on the basis of position papers and other documents submitted without
resorting to technical rules of evidence as observed in regular courts of justice.
(Robusta Agro Marine Products, Inc. vs. Baltazar Gorombalem, G.R. No.
80500, July 5, 1989)

In a number of cases, the Supreme Court has construed Article 221 (now
Article 227) of the Labor Code as permitting the NLRC or the LA to decide a
case on the basis of position papers and other documents submitted without
necessarily resorting to technical rules of evidence as observed in the regular
courts of justice. Rules of evidence are not strictly observed in proceedings
before administrative bodies like the NLRC. (Lepanto Consolidated Mining Co.
vs. Moreno Dumapis, et al., G.R. No. 163210, August 13, 2008)

Appeal from the decision of the Labor Arbiter to the NLRC

(Article 229)
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The Posting of the Bond

These statutory and regulatory provisions explicitly provide that an

appeal from the Labor Arbiter to the NLRC must be perfected within ten
calendar days from receipt of such decisions, awards or orders of the Labor
Arbiter. In a judgment involving a monetary award, the appeal shall be
perfected only upon (1) proof of payment of the required appeal fee; (2)
posting of a cash or surety bond issued by a reputable bonding company; and
(3) filing of a memorandum 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 holds that the appeal bond
posted by the respondent in the amount of P100,000.00 which is equivalent
to around 20% of the total amount of monetary bond is sufficient to perfect
an 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 right of the employer to appeal must be upheld.
This is in recognition of the importance of the remedy of appeal, which is an
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. (Andy D. Balite et al v.
SS Ventures International et al., G.R. No. 195109, February 4, 2015)
In Philippine Touristers, Inc. v. MAS Transit Workers Union –
ANGLO – KMU, the Supreme Court held:
In this regard, it bears stressing that the reduction of the bond
provided thereunder is not a matter of right on the part of the movant and its
grant still lies within the sound discretion of the NLRC upon a showing of
meritorious grounds and the reasonableness of the bond tendered under the
circumstances.
In Nicol v. Footjoy Industrial Corp., the Court held that "meritorious
cases" for said purpose would include "instances in which (1) there was
substantial compliance with the Rules, (2) surrounding facts and
circumstances constitute meritorious grounds to reduce the bond, (3) a
liberal interpretation of the requirement of an appeal bond would serve the
desired objective of resolving controversies on the merits, or (4) the
appellants, at the very least exhibited their willingness and/or good faith by
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posting a partial bond during the reglementary period." Notably, in

determining whether the arguments raised by the petitioners in their motion
to reduce bond is a "meritorious ground," the NLRC is not precluded from
conducting a preliminary determination of the merits of the appellant's
contentions. And since the intention is merely to give the NLRC an idea of
the justification for the reduced bond, the evidence for the purpose would
necessarily be less than the evidence required for a ruling on the merits.
The intention of the lawmakers to make the bond an indispensable
requisite for the perfection of an appeal by the employer is underscored by
the provision that an appeal may be perfected "only upon the posting of a
cash or surety bond." The word "only" makes it perfectly clear that the
lawmakers intended the posting of a cash or surety bond by the employer to
be the exclusive means by which an employer's appeal may be considered
completed. The law however does not require its outright payment, but only
the posting of a bond to ensure that the award will be eventually paid should
the appeal fail. What petitioners have to pay is a moderate and reasonable
sum for the premium of such bond. (Accessories Specialist, Inc., et al. vs.
Erlinda B. Alabanza, G.R. No. 168985, July 23, 2008)

The posting of a cash or surety bond is a requirement sine qua non for
the perfection of an appeal from the labor arbiter's monetary award. The
posting of a bond within the period provided by law is not merely mandatory
but jurisdictional. Failure to perfect an appeal has the effect of rendering the
judgment final and executory. (Benjamin S. Santos vs. Elena Velarde, G.R.
No. 140753, April 30, 2003)

The requirement for posting the surety bond is not merely procedural
but jurisdictional and cannot be trifled with. Non-compliance with such legal
requirements is fatal and has the effect of rendering the judgment final and
executory. (Hilario S. Ramirez vs. Court of Appeals, et al., G.R. No. 182626,
December 4, 2009)

The requirement that the employer post a cash or surety bond to

perfect its/his appeal is apparently intended to assure the workers that if they
prevail in the case, they will receive the money judgment in their favor upon
the dismissal of the employer's appeal. It was intended to discourage
employers from using an appeal to delay, or even evade, their obligation to
satisfy their employees' just and lawful claims.
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While the bond requirement on appeals involving monetary awards

has been relaxed in certain cases, this can only be done where there was
substantial compliance of the NLRC Rules of Procedure or where the
appellants, at the very least, exhibited willingness to pay by posting a partial
bond or where the failure to comply with the requirements for perfection of
appeal was justified. (Philux, Inc., et al. vs. NLRC, et al., G.R. No. 151854,
September 3, 2008)

Time and again, however, this Court, considering the substantial

merits of the case, has relaxed this rule on, and excused the late posting of,
the appeal bond when there are strong and compelling reasons for the
liberality, such as the prevention of miscarriage of justice extant in the case
or the special circumstances in the case combined with its legal merits or the
amount and the issue involved. After all, technical rules cannot prevent
courts from exercising their duties to determine and settle, equitably and
completely, the rights and obligations of the parties. This is one case where
the exception to the general rule lies. (Marticio Semblante, et al. vs. Court of
Appeals, 19th Division, et al., G.R. No. 196426, August 15, 2011)

While Section 6, Rule VI of the NLRC's New Rules of Procedure

allows the Commission to reduce the amount of the bond, the exercise of the
authority is not a matter of right on the part of the movant, but lies within the
sound discretion of the NLRC upon a showing of meritorious grounds. It is
daylight-clear from the foregoing that while the bond may be reduced upon
motion by the employer, this is subject to the conditions that (1) the motion
to reduce the bond shall be based on meritorious grounds; and (2) a
reasonable amount in relation to the monetary award is posted by the
appellant; otherwise, the filing of the motion to reduce bond shall not stop
the running of the period to perfect an appeal. The qualification effectively
requires that unless the NLRC grants the reduction of the cash bond within
the 10-day reglementary period, the employer is still expected to post the
cash or surety bond securing the full amount within the said 10-day period.
(Hilario S. Ramirez vs. Court of Appeals, et al., G.R. No. 182626, December
4, 2009)

The Rules of Procedure of the NLRC allows the filing of a motion to

reduce bond subject to two conditions: (1) there is meritorious ground, and
(2) a bond in a reasonable amount is posted. The filing of a motion to reduce
bond and compliance with the two conditions stop the running of the period
to perfect an appeal. The NLRC has full discretion to grant or deny the
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motion to reduce bond, and it may rule on the motion beyond the 10-day
period within which to perfect an appeal. Obviously, at the time of the filing
of the motion to reduce bond and posting of a bond in a reasonable amount,
there is no assurance whether the appellant's motion is indeed based on
"meritorious ground" and whether the bond he or she posted is of a
"reasonable amount." Thus, the appellant always runs the risk of failing to
perfect an appeal. (Cesar V. Garcia, et al. vs. KJ Commercial, et al., G.R.
No. 196830, February 29, 2012)

To clarify, the prevailing jurisprudence on the matter provides that the

filing of a motion to reduce bond, coupled with compliance with the two
conditions emphasized in Garcia v. KJ Commercial for the grant of such
motion, namely, (1) a meritorious ground, and (2) posting of a bond in a
reasonable amount, shall suffice to suspend the running of the period to
perfect an appeal from the labor arbiter's decision to the NLRC. To require
the full amount of the bond within the 10 – day reglementary period would
only render nugatory the legal provisions which allow an appellant to seek a
reduction of the bond.

Although the general rule provides that an appeal in labor cases from
a decision involving a monetary award may be perfected only upon the
posting of a cash or surety bond, the Court has relaxed this requirement
under certain exceptional circumstances in order to resolve controversies on
their merits. These circumstances include: (1) the fundamental consideration
of substantial justice; (2) the prevention of miscarriage of justice or of unjust
enrichment; and (3) special circumstances of the case combined with its
legal merits, and the amount and the issue involved. Guidelines that are
applicable in the reduction of appeal bonds were also explained in Nicol v.
Footjoy Industrial Corporation. The bond requirement in appeals involving
monetary awards has been and may be relaxed in meritorious cases,
including instances in which (1) there was substantial compliance with the
Rules, (2) surrounding facts and circumstances constitute meritorious
grounds to reduce the bond, (3) a liberal interpretation of the requirement of
an appeal bond would serve the desired objective of resolving controversies
on the merits, or (4) the appellants, at the very least, exhibited their
willingness and/or good faith by posting a partial bond during the
reglementary period. (McBurnie v. Ganzon, G.R. Nos. 178034, 178117 &
186984-85, October 17, 2013 citing Garcia v. KJ Commercial, G.R. No.
196830, February 29, 2012)
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The Period to Perfect the Appeal

With respect to the period within which to perfect the appeal, the Supreme
Court, in the case of Judy Phils., Inc. vs. NLRC, G.R. No. 111934, April 29, 1998
has ruled that:

Since the 10-day period provided in Article 223 (now Article 229)
of the Labor Code refers to ten calendar days and not to ten
working days, this means that Saturdays, Sundays and Legal
Holidays are not to be excluded, but included, in the computation of
the 10-day period. This is in line with the objective of the law for
speedy disposition of labor cases with the end in view of protecting
the interest of the workingman. In subsequent cases, We ruled that
if the tenth day to perfect an appeal from the decision of the Labor
Arbiter to the NLRC falls on a Saturday, the appeal shall be made
on the next working day, as embodied in Section 1, Rule VI of the
NLRC Rules of Procedure promulgated on January 14, 1992. This
conclusion arrived at by the Court recognizes the fact that on
Saturdays the offices of NLRC and certain post offices are closed.

The Reinstatement Aspect of the Decision of the Labor

Arbiter

Article 223 (now Article 229) (3rd paragraph) of the Labor Code,
as amended by Section 12 of Republic Act No. 6715, and Section 2
of the NLRC Interim Rules on Appeals under RA No. 6715,
Amending the Labor Code, provide that an order of reinstatement
by the Labor Arbiter is immediately executory even pending
appeal. (Alejandro Roquero vs. Philippine Airlines, Inc., G.R. No.
152329, April 22, 2003)

For better understanding, the Supreme Court has elucidated the rule on
reinstatement aspect pending appeal in the case of Froilan M. Bergonio, Jr. v.
South East Asian Airlines, G.R. No. 195227, April 21, 2014. The Supreme Court
held:

Otherwise stated, a dismissed employee whose case was favorably

decided by the LA is entitled to receive wages pending appeal upon
reinstatement, which reinstatement is immediately executory.
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Unless the appellate tribunal issues a restraining order, the LA is

duty bound to implement the order of reinstatement and the
employer has no option but to comply with it.

Moreover, and equally worth emphasizing, is that an order of

reinstatement issued by the LA is self – executory, i.e., the dismissed
employee need not even apply for and the LA need not even issue a
writ of execution to trigger the employer's duty to reinstate the
dismissed employee. In Pioneer Texturizing Corp. v. NLRC, et al.,
decided in 1997, the Court clarified once and for all this self –
executory nature of a reinstatement order. After tracing back the
various Court rulings interpreting the amendments introduced by
Republic Act No. 6715 on the reinstatement aspect of a labor
decision under Article 223 (now Article 229) of the Labor Code, the
Court concluded that to otherwise "require the application for and
issuance of a writ of execution as prerequisites for the execution of
a reinstatement award would certainly betray and run counter to
the very object and intent of Article 223 (now Article 229), i.e., the
immediate execution of a reinstatement order."

In short, therefore, with respect to decisions reinstating employees,

the law itself has determined a sufficiently overwhelming reason for
its immediate and automatic execution even pending appeal. The
employer is duty-bound to reinstate the employee, failing which, the
employer is liable instead to pay the dismissed employee's salary.
The Court's consistent and prevailing treatment and interpretation
of the reinstatement order as immediately enforceable, in fact,
merely underscores the right to security of tenure of employees that
the Constitution protects.

The reversal by a higher tribunal of the LA's finding (of illegal

dismissal), notwithstanding, an employer, who, despite the LA's
order of reinstatement, did not reinstate the employee during the
pendency of the appeal up to the reversal by a higher tribunal may
still be held liable for the accrued wages of the employee, i.e., the
unpaid salary accruing up to the time the higher tribunal reverses
the decision. The rule, therefore, is that an employee may still
recover the accrued wages up to and despite the reversal by the
higher tribunal. This entitlement of the employee to the accrued
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wages proceeds from the immediate and self – executory nature of

the reinstatement aspect of the LA's decision.

By way of exception to the above rule, an employee may be barred

from collecting the accrued wages if shown that the delay in
enforcing the reinstatement pending appeal was without fault on the
part of the employer. To determine whether an employee is thus
barred, two tests must be satisfied: (1) 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. Note that under the second test, the
delay must be without the employer's fault. 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 LA's decision.

Good Luck