LABOR LAW BAR 2018

POINTS TO CONSIDER

1. What is the constitutional and legal basis of the private enterprise system?
What is its relevance to labor law and social legislation?

Section 20 of Article II of the 1987 Constitution provides that, the State recognizes the
indispensable role of the private sector, encourage private enterprise and provides incentives to
needed investments.

The private enterprise system is an economic system under which property of all kinds can
be privately owned and in which individuals, alone or in association with another, can embark on
a business activity.

This economic system is the counter-balance to labor’s rights. The State is required to
maintain the balance of the power of government, through its police power, to regulate the
employees’ rights as against the rights of employers, the private enterprises, which play an
indispensable role in the State’s economic development.

2. May the NLRC order the grant of separation pay as a matter of equity, to an
employee dismissed for just causes?

Under the present jurisprudential framework, the grant of separation pay

as a matter of equity to a validly dismissed employee is not contingent on whether
the ground for dismissal is expressly under Article 282(a) but whether the ground
relied upon is akin to serious misconduct or involves willful or wrongful intent on
the part of the employee.

Serious misconduct as a valid cause for the dismissal of an employee is

defined simply as improper or wrong conduct. It is a transgression of some
established and definite rule of action, a forbidden act, a dereliction of duty,
willful in character, and implies wrongful intent and not mere error of
judgment. To be serious within the meaning and intendment of the law, the
misconduct must be of such grave and aggravated character and not merely trivial
or unimportant. However serious such misconduct, it must, nevertheless, be in
connection with the employees work to constitute just cause for his
separation. The act complained of must be related to the performance of the
employees’ duties such as would show him to be unfit to continue working for the
employer. On the other hand, moral turpitude has been defined as everything
which is done contrary to justice, modesty, or good morals; an act of baseness,
vileness or depravity in the private and social duties which a man owes his
fellowmen, or to society in general, contrary to justice, honesty, modesty, or good
morals.

In this case the transgressions imputed to dismissed employee have never

been firmly established as deliberate and willful acts clearly directed at making
the company lose millions of pesos. At the very most, they can only be
characterized as unintentional, albeit major, lapses in professional
judgment. Likewise, the same cannot be described as morally reprehensible
actions. Thus, the employee may be granted separation pay on the ground of
equity which this Court had defined as justice outside law, being ethical rather
than jural and belonging to the sphere of morals than of law. It is grounded on the
precepts of conscience and not on any sanction of positive law, for equity finds no
room for application where there is law.

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 3. On February 8, 2008, in the contract he signed while still in the Philippines,
Dagsadas was employed as Network Technician; on the other hand, his new contract indicated
that he was employed as Superintendent. However, no job description - or such duties and
responsibilities attached to either position - was adduced in evidence. It thus means that the job
for which Dagasdas was hired was not definite from the beginning.

In April 2008, Dagasdas returned to Al-Khobar and stayed at the ITM Office.
Later, ITM gave him a termination notice indicating that his last day of work was on April 30,
2008, and he was dismissed pursuant to clause 17.4.3 of his contract, which provided that ITM
reserved the right to terminate any employee within the three-month probationary period without
need of any notice to the employee.

Before his repatriation, Dagasdas signed a Statement of Quitclaim with Final

Settlement stating that ITM paid him all the salaries and benefits for his services from February
11, 2008 to April 30, 2008 in the total amow1t of SR7,156.80, and ITM was relieved from all
financial obligations due to Dagasdas. Was Dagasdas illegally dismissed?

Indeed, Dagasdas was not sufficiently informed of the work standards for
which his performance will be measured. Even his position based on the job title
given him was not fully explained by his employer. Simply put, ITM failed to
show that it set and communicated work standards for Dagasdas to follow, and on
which his efficiency (or the lack thereof) may be determined.

Second, the new contract was not shown to have been processed through
the POEA. Under our Labor Code, employers hiring OFWs may only do so
through entities authorized by the Secretary of the Department of Labor and
Employment.

Third, under this new contract, Dagasdas was not afforded procedural due
process when he was dismissed from work.

As cited above, a valid dismissal requires substantive and procedural due

process. As regards the latter, the employer must give the concerned employee at
least two notices before his or her tem1ination. Specifically, the employer must
inform the employee of the cause or causes for his or her termination, and
thereafter, the employer's decision to dismiss him. Aside from the notice
requirement, the employee must be accorded the opportunity to be heard.

Here, no prior notice of purported infraction, and such opportunity to

explain on any accusation against him was given to Dagasdas.1âwphi1 He was
simply given a notice of termination. In fact, it appears that ITM intended not to
comply with the twin notice requirement.

Lastly, while it is shown that Dagasdas executed a waiver in favor of his

employer, the same does not preclude him from filing this suit.

Generally, the employee's waiver or quitclaim cannot prevent the

employee from demanding benefits to which he or she is entitled, and from filing
an illegal dismissal case. This is because waiver or quitclaim is looked upon with
disfavor, and is frowned upon for being contrary to public policy. Unless it can be
established that the person executing the waiver voluntarily did so, with full
understanding of its contents, and with reasonable and credible consideration, the

USA College of Law 2018 Labor Law Review

 same is not a valid and binding undertaking. Moreover, the burden to prove that
the waiver or quitclaim was voluntarily executed is with the employer.

4. May the Labor Code be applicable even if there is no employer-employee

relationship?

Yes. In cases where there is an indirect employer-employee relationship between the

workers of a legitimate job contractor and that of the principal; in illegal recruitment and misuse
of POEA licenses.

5. How are the labor standards benefits of bus drivers determined?

Bus owners and/or operators, in consultation with their drivers and conductors shall
determine the following:

a) The fixed component, shall be based on an amount mutually agreed upon by the
owner/operator and the driver/conductor, which shall take into account minimum
ridership requirement and in no case be lower than the applicable minimum wage for
work during normal hours/days. They shall also be entitled to wage related benefits such
as overtime pay, premium pay and holiday pay, among others.

b) The performance-based component shall be based on safety performance and

business performance such as ridership, revenues/profitability, and other related
parameters.

6. May the absence of employer-employee relationship as a jurisdictional issue

may be raised for the first time on appeal?

“The determination of this relationship involves a finding of fact, which is conclusive and
binding and not subject to review by this Court. In this case, petitioner insisted that respondent
was dismissed from employment for cause and after the observance of the proper procedure for
termination. Consequently, petitioner cannot now deny that respondent is its employee. While
indeed, jurisdiction cannot be conferred by acts or omission of the parties, petitioners belated
denial that it is the employer of respondent is obviously an afterthought, a devise to defeat the
law and evade its obligations.

It is a fundamental rule of procedure that higher courts are precluded from entertaining
matters neither alleged in the pleadings nor raised during the proceedings below but ventilated
for the first time only in a motion for reconsideration or on appeal. Petitioner is bound by its
submissions that respondent is its employee and it should not be permitted to change its theory.
Such change of theory cannot be tolerated on appeal, not due to the strict application of
procedural rules, but as a matter of fairness. (G.R. No. 174809, June 27, 2012)

7. In the termination of an employee for a just cause, is a hearing or conference

necessary?

Yes. A verbal appraisal of the charges against an employee does not comply with the first
notice requirement. In Pepsi Cola Bottling Co. v. NLRC, the Court held that consultations or
conferences are not a substitute for the actual observance of notice and hearing. Also, in
Loadstar Shipping Co., Inc. v. Mesano, the Court, sanctioning the employer for disregarding the
due process requirements, held that the employees written explanation did not excuse the fact
that there was a complete absence of the first notice. Regardless of respondents written
explanation, a hearing was still necessary in order for him to clarify and present evidence in
support of his defense. (G.R. No. 166208 June 29, 2007)

8. May the Regional Director, in the exercise of its visitorial power, rule on the
existence of employer-employee relationship?
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 Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully
empowered to make a determination as to the existence of an employer-employee relationship in
the exercise of its visitorial and enforcement power, subject to judicial review, not review by the
NLRC.

There is a view that despite Art. 128(b) of the Labor Code, as amended by RA 7730, there
is still a threshold amount set by Arts. 129 and 217 of the Labor Code when money claims are
involved, i.e., that if it is for PhP 5,000 and below, the jurisdiction is with the regional director of
the DOLE, under Art. 129, and if the amount involved exceeds PhP 5,000, the jurisdiction is with
the labor arbiter, under Art. 217. The view states that despite the wording of Art. 128(b), this
would only apply in the course of regular inspections undertaken by the DOLE, as differentiated
from cases under Arts. 129 and 217, which originate from complaints. There are several cases,
however, where the Court has ruled that Art. 128(b) has been amended to expand the powers of
the DOLE Secretary and his duly authorized representatives by RA 7730. In these cases, the
Court resolved that the DOLE had the jurisdiction, despite the amount of the money claims
involved. Furthermore, in these cases, the inspection held by the DOLE regional director was
prompted specifically by a complaint. Therefore, the initiation of a case through a complaint
does not divest the DOLE Secretary or his duly authorized representative of jurisdiction under
Art. 128(b). (G.R. No. 179652, March 6, 2012)

9. Greg was employed as a barista at USA Coffeeshop. Recently, the coffee shop
received complaints as regards its Americano coffee. Management decided to install cameras.
Management reviewed the tapes and discovered that Greg was diluting the beans used in the
Americano coffee with another type of beans that were erroneously ordered. In fact, the said
beans were kept in the storage cabinet wherein only the shop’s manager has access, until the
same is disposed. Management issued a notice of termination to Greg, on the ground of loss of
trust and confidence, stating that his employment is deemed terminated on October 18, 2016.
Management further investigated the supervisor and after notice and hearing, issued a notice of
termination on the ground of loss of trust and confidence.

Greg questioned the termination before the Labor Arbiter alleging that he could not be
terminated as he was an ordinary rank and file employee. The supervisor questioned his
termination on the ground that there was no factual basis that would warrant his termination.
USA Coffeeshop contended that the dismissals were all valid. Unfortunately, the supervisor died
during the pendency of the case.

a. If you are the Labor Arbiter, how would you resolve the contentions of Greg and the
supervisor?

The contention is without merit. While Greg is an ordinary rank and file worker, his
position as Barista is imbued with trust and confidence. Therefore, he may be dismissed for
breach of trust.

The contention of the supervisor is not correct. As regards supervisory employees, the
loss of trust need not be factually established with substantial evidence. Mere existence of facts
that would establish loss of trust are sufficient basis.

b. Assuming that the Labor Arbiter ruled that Greg was illegally dismissed, what are
the reliefs he is entitled to and how will it be computed? Are the reliefs immediately
executory? Will your answer be the same if the termination was declared illegal on
appeal by the NLRC?

Greg will be entitled to automatic reinstatement within 10 days from receipt by the
employer of the decision of the Labor Arbiter. He is entitled to full backwages to be computed
from the date of dismissal until his reinstatement. Since it is ordered by the Labor Arbiter, his
reinstatement is immediately executory.

USA College of Law 2018 Labor Law Review

 If the termination is declared illegal by the NLRC, the reinstatement is not immediately
executory and will require the complainant to file a motion for execution with the Labor Arbiter
after the record of the case has been transmitted back to the court of origin.

10. How is the last day of probation computed?

 180 days from date of engagement, or

(Mitsubishi case, June 29, 2004)

 Anniversary date of sixth month

(Alcira, June 9, 2004)

11. What kind of employees are seafarers?

Seafarers are considered contractual employees – their employment is governed by the

contracts they sign every time they are rehired and their employment is terminated when the
contract expires. (Delos Santos vs. Jebsen Maritime, Inc. Nov. 22, 2005)

12. Can an employee of a corporation engaged in illegal recruitment be held

liable as principal?

An employee of a company or a corporation engaged in illegal recruitment may be held

liable as a principal, together with his employer, if it is shown that he actively and consciously
participated in the recruitment process. (People vs. Gasacao, Nov. 11, 2005)

13. What are the modes of registration of legitimate labor organizations?

1. Independent Registration;
2. Chartering and Creation of Local Chapter;

A duly registered federation or national union may directly create a local chapter by
issuing a charter certificate indicating the establishment of the local chapter. The chapter shall
acquire legal personality only for purposes of filing a petition for certification election from the
date it was issued a charter certificate.

The chapter shall be entitled to all other rights and privileges of a legitimate labor
organization only upon the submission of the documents required under Article 241 in addition
to its charter certificate.

14. Is the Bureau of Labor Relations or the DOLE Regional Office empowered to
deny legal recognition to a local/chapter owing to questions pertaining to the personality of
the federation or national union to which it belongs?

While a local/chapter acquires legal personality from the date of the filing of the
complete documentary requirements, and not from the issuance of a certification to such effect
by the Regional Office or Bureau, a labor organization is deemed to have acquired legal
personality only on the date of issuance of its certificate of registration, which takes place only
after the Bureau of Labor Relations or its Regional Offices have undertaken an evaluation
process.

When a local/chapter applies for registration, matters raised against the personality of the
federation or national union itself should not be acted upon by the Bureau or Regional Office,
owing to the preclusion of collateral attack. Instead, the proper matter for evaluation by the
Bureau or Regional Office should be limited to whether the local/chapter is indeed a duly created
affiliate of the national union or federation. (San Miguel Corp. (Mandaue Packaging Products
Plants) vs. Mandaue Packaging Products Plants – San Miguel Packaging Products – San
Miguel Corp. Monthlies Rank-and-File Union FFW Aug. 16, 2005)

USA College of Law 2018 Labor Law Review

 15. Notable amendments to the Labor Code by R.A. 9481

1. No required number for charter registration;

2. Tentative legal personality for local chapters;
3. Specific grounds (3) for cancellation
4. PCE proceeds despite Petition to Cancel Union Registration
5. Cancellation by Action of the Members;
6. Reportorial requirements;
7. Affiliation with same Federation
8. Commingling is not a ground for cancellation;
9. Non-disclosure of identity (even in Unorganized Establishments);
10. Employer is a bystander;

16. Basic Rights of Union Members

1. Political Right/Decision-Making
- Participate in Electoral Processes
- Participate in deliberations
2. Financial Rights
- Right against excessive fees, assessments, disbursements, examine
financial records
3. Information
- Information on membership, union rules, CBA

17. Financial Rights

 Prescription
- 3 years from date audited financial reports submitted/should have been
submitted
- No financial report, sanction on the officer concerned
 Visitorial Power to inspect financial records require;
- 20% of Membership
- Examination of financial activities only
- No examination during Freedom Period or 30 days before election of
officers

18. Requirements for a Valid Special Assessment

1. Written Resolution approved by majority

2. General membership meeting called for that purpose
3. President / Secretary to attest to:
 Minutes
 Members present
 Votes cast
 Purpose of Special Assessment
 Recipient

19. Is attitude problem a valid ground for the termination of an employee?

An employee who cannot get along with his co-employees is detrimental to the
company for he can upset and strain the working environment. Management has the
prerogative to take the necessary action to correct the situation and protect its
organization. Thus, an employee’s attitude problem is a valid ground for his termination.
(Heavylift Manila, In. vs CA Oct. 20, 2005)

USA College of Law 2018 Labor Law Review

 -Good Luck-

USA College of Law 2018 Labor Law Review